Q1 2019 Strategic Highlights
-
On track to attain investment grade credit ratings in 2020
-
Signed long-term contracts for 494 MW of renewable capacity,
increasing backlog to 6.2 GW
-
Signed a 12-year agreement to sell up to 18 TBTU of LNG annually in
the Caribbean, beginning in 2020
-
Announcing $100 million incremental annual run rate cost savings
target, to be realized by 2022 from digital initiatives
-
Agreed to sell the Company's interests in its businesses in Jordan and
Northern Ireland for $211 million
Q1 2019 Financial Highlights
-
Diluted EPS of $0.23, compared to $1.03 in Q1 2018, which included a
gain on the sale of Masinloc in the Philippines
-
Adjusted EPS of $0.28, compared to $0.28 in Q1 20181
-
Reaffirming 2019 guidance and 7% to 9% average annual growth target
for Adjusted EPS and Parent Free Cash Flow through 20221
ARLINGTON, Va.--(BUSINESS WIRE)--
The
AES Corporation (NYSE: AES) today reported financial results for the
quarter ended March 31, 2019.
"We continue to execute on our strategic plan: de-risking our portfolio;
growing our LNG and renewables businesses; and becoming a technology
leader," said Andrés
Gluski, AES President and Chief Executive Officer. "We agreed to
sell our assets in Jordan and Northern Ireland, which will reduce our
footprint to 13 countries. We also signed a long-term LNG tolling
agreement for up to 18 TBTU annually and grew our backlog of mostly
renewable projects to 6.2 GW. Today, we are announcing a target of an
additional $100 million in annual cost savings by 2022 from our digital
initiatives that are currently underway."
"With our first quarter 2019 performance in line with our expectations,
we are off to a solid start to deliver on our full year 2019 guidance
and our 7% to 9% average annual growth target through 2022," said Gustavo
Pimenta, AES Executive Vice President and Chief Financial Officer.
"Our strong and growing cash flow, combined with our significant debt
reduction in 2018, keep us on track to attain investment grade ratings
by 2020."
Key Q1 2019 Financial Results
First quarter 2019 Diluted Earnings Per Share from Continuing Operations
(Diluted EPS) was $0.23, a decrease of $0.80 compared to first quarter
2018, primarily reflecting the $0.94 net gain on the sale of Masinloc in
the Philippines in 2018, partially offset by the $0.18 net loss on
extinguishment of debt in 2018.
First quarter 2019 Adjusted Earnings Per Share (Adjusted EPS, a non-GAAP
financial measure) was $0.28, which was unchanged compared to first
quarter 2018, primarily reflecting the impact of asset sales and
dispositions in the Eurasia and US and Utilities Strategic Business
Units (SBU), partially offset by lower Parent interest and a lower
effective tax rate.
Detailed Strategic Highlights
-
As of March 31, 2019, the Company's backlog of 6,225 MW includes:
-
3,845 MW under construction and expected on-line through 2021; and
-
2,380 MW of renewables signed under long-term Power Purchase
Agreements (PPAs), including 494 MW signed in year-to-date 2019:
-
219 MW of solar plus storage at AES Distributed Energy (AES
DE) with utilities and commercial and industrial customers in
the U.S.
-
175 MW of solar at sPower with a utility in the U.S.
-
100 MW of energy storage with a utility in the U.S.
-
In March and April, the Company agreed to sell its interests in its
businesses in Jordan and Northern Ireland for $211 million
-
Once these transactions close, which is expected later this year,
the Company will have operations in 13 countries, down from 28 in
2011
-
The Company is announcing a $100 million incremental annual run rate
cost savings target, to be realized by 2022 from digital initiatives,
including utilizing data and technology for maintenance, outage
prevention, inspection and procurement
Guidance and Expectations
1
The Company reaffirms its 2019 Adjusted EPS guidance of $1.28 to $1.40
and its average annual growth rate target of 7% to 9% through 2022.
Growth in 2019 will be primarily driven by contributions from new
businesses, cost savings and lower Parent interest.
The Company also reaffirms its 2019 Parent Free Cash Flow expectation of
$700 million to $750 million and its average annual growth rate target
of 7% to 9% through 2022.
|
|
|
|
1
|
|
Adjusted EPS and Parent Free Cash Flow are non-GAAP financial
measures. See attached "Non-GAAP Measures" for definition of
Adjusted EPS and see below for definition of Parent Free Cash Flow.
The Company is not able to provide a corresponding GAAP equivalent
or reconciliation for its Adjusted EPS guidance or its Parent Free
Cash Flow expectation without unreasonable effort. See "Non-GAAP
measures" for a description of the adjustments to reconcile Adjusted
EPS to Diluted EPS for the quarter ended March 31, 2019.
|
|
|
|
Non-GAAP Financial Measures
See Non-GAAP Measures for definitions of Adjusted Earnings Per Share and
Adjusted Pre-Tax Contributions, as well as reconciliations to the most
comparable GAAP financial measures.
Parent Free Cash Flow should not be construed as an alternative to Net
Cash Provided by Operating Activities which is determined in accordance
with GAAP. Parent Free Cash Flow is equal to Subsidiary Distributions
less cash used for interest costs, development, general and
administrative activities, and tax payments by the Parent Company.
Parent Free Cash Flow is used for dividends, share repurchases, growth
investments, recourse debt repayments, and other uses by the Parent
Company.
Attachments
Condensed Consolidated Statements of Operations, Segment Information,
Condensed Consolidated Balance Sheets, Condensed Consolidated Statements
of Cash Flows, Non-GAAP Financial Measures and Parent Financial
Information.
Conference Call Information
AES will host a conference call on Tuesday, May 7, 2019 at 9:00 a.m.
Eastern Daylight Time (EDT). 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 1733093. 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 500 global power company.
We provide affordable, sustainable energy to 15 countries through our
diverse portfolio of distribution businesses as well as thermal and
renewable generation facilities. Our workforce is committed to
operational excellence and meeting the world’s changing power needs. Our
2018 revenues were $11 billion and we own and manage $33 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 the execution
of PPAs, conversion of our backlog and 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’ 2018 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 2018 Annual Report
on Form 10-K filed February 27, 2019 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)
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
2019
|
|
2018
|
|
|
(in millions, except
per share amounts)
|
|
Revenue:
|
|
|
|
|
|
Regulated
|
|
$
|
785
|
|
|
$
|
722
|
|
|
Non-Regulated
|
|
1,865
|
|
|
2,018
|
|
|
Total revenue
|
|
2,650
|
|
|
2,740
|
|
|
Cost of Sales:
|
|
|
|
|
|
Regulated
|
|
(635
|
)
|
|
(601
|
)
|
|
Non-Regulated
|
|
(1,429
|
)
|
|
(1,483
|
)
|
|
Total cost of sales
|
|
(2,064
|
)
|
|
(2,084
|
)
|
|
Operating margin
|
|
586
|
|
|
656
|
|
|
General and administrative expenses
|
|
(46
|
)
|
|
(56
|
)
|
|
Interest expense
|
|
(265
|
)
|
|
(281
|
)
|
|
Interest income
|
|
79
|
|
|
76
|
|
|
Loss on extinguishment of debt
|
|
(10
|
)
|
|
(170
|
)
|
|
Other expense
|
|
(12
|
)
|
|
(9
|
)
|
|
Other income
|
|
30
|
|
|
13
|
|
|
Gain (loss) on disposal and sale of business interests
|
|
(4
|
)
|
|
788
|
|
|
Foreign currency transaction losses
|
|
(4
|
)
|
|
(19
|
)
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN
EARNINGS OF AFFILIATES
|
|
354
|
|
|
998
|
|
|
Income tax expense
|
|
(115
|
)
|
|
(231
|
)
|
|
Net equity in earnings (losses) of affiliates
|
|
(6
|
)
|
|
11
|
|
|
INCOME FROM CONTINUING OPERATIONS
|
|
233
|
|
|
778
|
|
|
Loss from operations of discontinued businesses
|
|
—
|
|
|
(1
|
)
|
|
NET INCOME
|
|
233
|
|
|
777
|
|
|
Less: Income from continuing operations attributable to
noncontrolling interests and redeemable stock of subsidiaries
|
|
(79
|
)
|
|
(93
|
)
|
|
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION
|
|
$
|
154
|
|
|
$
|
684
|
|
|
AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS:
|
|
|
|
|
|
Income from continuing operations, net of tax
|
|
$
|
154
|
|
|
$
|
685
|
|
|
Loss from discontinued operations, net of tax
|
|
—
|
|
|
(1
|
)
|
|
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION
|
|
$
|
154
|
|
|
$
|
684
|
|
|
BASIC EARNINGS PER SHARE:
|
|
|
|
|
|
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS
|
|
$
|
0.23
|
|
|
$
|
1.04
|
|
|
DILUTED EARNINGS PER SHARE:
|
|
|
|
|
|
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS
|
|
$
|
0.23
|
|
|
$
|
1.03
|
|
|
DILUTED SHARES OUTSTANDING
|
|
667
|
|
|
663
|
|
|
|
|
|
|
|
|
|
|
|
THE AES CORPORATION
|
|
Strategic Business Unit (SBU) Information
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
(in millions)
|
|
2019
|
|
2018
|
|
REVENUE
|
|
|
|
|
|
US and Utilities SBU
|
|
$
|
1,019
|
|
|
$
|
1,027
|
|
|
South America SBU
|
|
845
|
|
|
895
|
|
|
MCAC SBU
|
|
450
|
|
|
408
|
|
|
Eurasia SBU
|
|
339
|
|
|
419
|
|
|
Corporate and Other
|
|
9
|
|
|
9
|
|
|
Eliminations
|
|
(12
|
)
|
|
(18
|
)
|
|
Total Revenue
|
|
$
|
2,650
|
|
|
$
|
2,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE AES CORPORATION
|
|
Condensed Consolidated Balance Sheets (Unaudited)
|
|
|
|
|
|
|
|
March 31,
2019
|
|
December 31,
2018
|
|
|
(in millions, except share
and per share data)
|
|
ASSETS
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,426
|
|
|
$
|
1,166
|
|
|
Restricted cash
|
|
519
|
|
|
370
|
|
|
Short-term investments
|
|
378
|
|
|
313
|
|
|
Accounts receivable, net of allowance for doubtful accounts of $23
and $23, respectively
|
|
1,564
|
|
|
1,595
|
|
|
Inventory
|
|
579
|
|
|
577
|
|
|
Prepaid expenses
|
|
111
|
|
|
130
|
|
|
Other current assets
|
|
703
|
|
|
807
|
|
|
Current held-for-sale assets
|
|
575
|
|
|
57
|
|
|
Total current assets
|
|
5,855
|
|
|
5,015
|
|
|
NONCURRENT ASSETS
|
|
|
|
|
|
Property, Plant and Equipment:
|
|
|
|
|
|
Land
|
|
450
|
|
|
449
|
|
|
Electric generation, distribution assets and other
|
|
24,844
|
|
|
25,242
|
|
|
Accumulated depreciation
|
|
(8,273
|
)
|
|
(8,227
|
)
|
|
Construction in progress
|
|
4,207
|
|
|
3,932
|
|
|
Property, plant and equipment, net
|
|
21,228
|
|
|
21,396
|
|
|
Other Assets:
|
|
|
|
|
|
Investments in and advances to affiliates
|
|
1,147
|
|
|
1,114
|
|
|
Debt service reserves and other deposits
|
|
430
|
|
|
467
|
|
|
Goodwill
|
|
1,059
|
|
|
1,059
|
|
|
Other intangible assets, net of accumulated amortization of $467 and
$457, respectively
|
|
467
|
|
|
436
|
|
|
Deferred income taxes
|
|
108
|
|
|
97
|
|
|
Loan receivable
|
|
1,406
|
|
|
1,423
|
|
|
Other noncurrent assets
|
|
1,771
|
|
|
1,514
|
|
|
Total other assets
|
|
6,388
|
|
|
6,110
|
|
|
TOTAL ASSETS
|
|
$
|
33,471
|
|
|
$
|
32,521
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
Accounts payable
|
|
$
|
1,224
|
|
|
$
|
1,329
|
|
|
Accrued interest
|
|
265
|
|
|
191
|
|
|
Accrued non-income taxes
|
|
271
|
|
|
250
|
|
|
Accrued and other liabilities
|
|
914
|
|
|
962
|
|
|
Non-recourse debt, including $338 and $479, respectively, related to
variable interest entities
|
|
1,265
|
|
|
1,659
|
|
|
Current held-for-sale liabilities
|
|
418
|
|
|
8
|
|
|
Total current liabilities
|
|
4,357
|
|
|
4,399
|
|
|
NONCURRENT LIABILITIES
|
|
|
|
|
|
Recourse debt
|
|
3,895
|
|
|
3,650
|
|
|
Non-recourse debt, including $3,077 and $2,922 respectively, related
to variable interest entities
|
|
14,550
|
|
|
13,986
|
|
|
Deferred income taxes
|
|
1,302
|
|
|
1,280
|
|
|
Other noncurrent liabilities
|
|
2,828
|
|
|
2,723
|
|
|
Total noncurrent liabilities
|
|
22,575
|
|
|
21,639
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
Redeemable stock of subsidiaries
|
|
890
|
|
|
879
|
|
|
EQUITY
|
|
|
|
|
|
THE AES CORPORATION STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
Common stock ($0.01 par value, 1,200,000,000 shares authorized;
817,593,854 issued and 663,694,956 outstanding at March 31, 2019
and 817,203,691 issued and 662,298,096 outstanding at December 31,
2018)
|
|
8
|
|
|
8
|
|
|
Additional paid-in capital
|
|
8,039
|
|
|
8,154
|
|
|
Accumulated deficit
|
|
(839
|
)
|
|
(1,005
|
)
|
|
Accumulated other comprehensive loss
|
|
(2,107
|
)
|
|
(2,071
|
)
|
|
Treasury stock, at cost (153,898,898 and 154,905,595 shares at
March 31, 2019 and December 31, 2018, respectively)
|
|
(1,867
|
)
|
|
(1,878
|
)
|
|
Total AES Corporation stockholders’ equity
|
|
3,234
|
|
|
3,208
|
|
|
NONCONTROLLING INTERESTS
|
|
2,415
|
|
|
2,396
|
|
|
Total equity
|
|
5,649
|
|
|
5,604
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
$
|
33,471
|
|
|
$
|
32,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE AES CORPORATION
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
2019
|
|
2018
|
|
|
(in millions)
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net income
|
|
$
|
233
|
|
|
$
|
777
|
|
|
Adjustments to net income:
|
|
|
|
|
|
Depreciation and amortization
|
|
246
|
|
|
254
|
|
|
Loss (gain) on disposal and sale of business interests
|
|
4
|
|
|
(788
|
)
|
|
Deferred income taxes
|
|
62
|
|
|
180
|
|
|
Loss on extinguishment of debt
|
|
10
|
|
|
170
|
|
|
Loss on sale and disposal of assets
|
|
7
|
|
|
2
|
|
|
Other
|
|
99
|
|
|
72
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
(Increase) decrease in accounts receivable
|
|
9
|
|
|
(39
|
)
|
|
(Increase) decrease in inventory
|
|
(18
|
)
|
|
(16
|
)
|
|
(Increase) decrease in prepaid expenses and other current assets
|
|
47
|
|
|
(33
|
)
|
|
(Increase) decrease in other assets
|
|
2
|
|
|
19
|
|
|
Increase (decrease) in accounts payable and other current liabilities
|
|
25
|
|
|
(66
|
)
|
|
Increase (decrease) in income tax payables, net and other tax
payables
|
|
(35
|
)
|
|
—
|
|
|
Increase (decrease) in other liabilities
|
|
(1
|
)
|
|
(17
|
)
|
|
Net cash provided by operating activities
|
|
690
|
|
|
515
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
Capital expenditures
|
|
(504
|
)
|
|
(495
|
)
|
|
Proceeds from the sale of business interests, net of cash and
restricted cash sold
|
|
—
|
|
|
1,180
|
|
|
Sale of short-term investments
|
|
150
|
|
|
149
|
|
|
Purchase of short-term investments
|
|
(220
|
)
|
|
(345
|
)
|
|
Contributions to equity affiliates
|
|
(90
|
)
|
|
(44
|
)
|
|
Other investing
|
|
1
|
|
|
(29
|
)
|
|
Net cash provided by (used in) investing activities
|
|
(663
|
)
|
|
416
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
Borrowings under the revolving credit facilities
|
|
504
|
|
|
881
|
|
|
Repayments under the revolving credit facilities
|
|
(274
|
)
|
|
(783
|
)
|
|
Issuance of recourse debt
|
|
—
|
|
|
1,000
|
|
|
Repayments of recourse debt
|
|
(1
|
)
|
|
(1,774
|
)
|
|
Issuance of non-recourse debt
|
|
866
|
|
|
757
|
|
|
Repayments of non-recourse debt
|
|
(428
|
)
|
|
(510
|
)
|
|
Payments for financing fees
|
|
(4
|
)
|
|
(14
|
)
|
|
Distributions to noncontrolling interests
|
|
(50
|
)
|
|
(17
|
)
|
|
Contributions from noncontrolling interests and redeemable security
holders
|
|
10
|
|
|
11
|
|
|
Dividends paid on AES common stock
|
|
(90
|
)
|
|
(86
|
)
|
|
Payments for financed capital expenditures
|
|
(96
|
)
|
|
(89
|
)
|
|
Other financing
|
|
(35
|
)
|
|
(6
|
)
|
|
Net cash provided by (used in) financing activities
|
|
402
|
|
|
(630
|
)
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash
|
|
(4
|
)
|
|
5
|
|
|
(Increase) decrease in cash, cash equivalents and restricted cash of
discontinued operations and held-for-sale businesses
|
|
(53
|
)
|
|
74
|
|
|
Total increase in cash, cash equivalents and restricted cash
|
|
372
|
|
|
380
|
|
|
Cash, cash equivalents and restricted cash, beginning
|
|
2,003
|
|
|
1,788
|
|
|
Cash, cash equivalents and restricted cash, ending
|
|
$
|
2,375
|
|
|
$
|
2,168
|
|
|
SUPPLEMENTAL DISCLOSURES:
|
|
|
|
|
|
Cash payments for interest, net of amounts capitalized
|
|
$
|
169
|
|
|
$
|
207
|
|
|
Cash payments for income taxes, net of refunds
|
|
$
|
65
|
|
|
$
|
71
|
|
|
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
Non-cash contributions of assets and liabilities for the Fluence
transaction
|
|
$
|
—
|
|
|
$
|
20
|
|
|
Dividends declared but not yet paid
|
|
$
|
91
|
|
|
$
|
86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE AES CORPORATION
|
|
NON-GAAP FINANCIAL MEASURES
|
|
(Unaudited)
|
|
|
|
RECONCILIATION OF ADJUSTED PRE-TAX CONTRIBUTION (PTC) AND
ADJUSTED EPS
|
|
Adjusted PTC is defined as pre-tax income from continuing operations
attributable to The AES Corporation excluding gains or losses of the
consolidated entity due to (a) unrealized gains or losses related to
derivative transactions and equity securities; (b) unrealized
foreign currency gains or losses; (c) gains, losses, benefits and
costs associated with dispositions and acquisitions of business
interests, including early plant closures; (d) losses due to
impairments; (e) gains, losses and costs due to the early retirement
of debt; and (f) costs directly associated with a major
restructuring program, including, but not limited to, workforce
reduction efforts, relocations, and office consolidation. Adjusted
PTC also includes net equity in earnings of affiliates on an
after-tax basis adjusted for the same gains or losses excluded from
consolidated entities.
|
|
|
|
Adjusted EPS is defined as diluted earnings per share from
continuing operations excluding gains or losses of both consolidated
entities and entities accounted for under the equity method due to
(a) unrealized gains or losses related to derivative transactions
and equity securities; (b) unrealized foreign currency gains or
losses; (c) gains, losses, benefits and costs associated with
dispositions and acquisitions of business interests, including early
plant closures, and the tax impact from the repatriation of sales
proceeds; (d) losses due to impairments; (e) gains, losses and costs
due to the early retirement of debt; (f) costs directly associated
with a major restructuring program, including, but not limited to,
workforce reduction efforts, relocations, and office consolidation;
and (g) tax benefit or expense related to the enactment effects of
2017 U.S. tax law reform and related regulations and any subsequent
period adjustments related to enactment effects.
|
|
|
|
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
or equity securities remeasurement, unrealized foreign currency
gains or losses, losses due to impairments and strategic decisions
to dispose of or acquire business interests, retire debt or
implement restructuring activities, 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.
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2019
|
|
Three Months Ended
March 31, 2018
|
|
|
|
|
Net of NCI (1) |
|
Per Share
(Diluted) Net
of NCI (1)
|
|
Net of NCI (1) |
|
Per Share
(Diluted) Net
of NCI (1)
|
|
|
|
|
(in millions, except per share amounts)
|
|
|
|
Income from continuing operations, net of tax, attributable to
AES and Diluted EPS
|
|
$
|
154
|
|
|
$
|
0.23
|
|
|
$
|
685
|
|
|
$
|
1.03
|
|
|
|
|
Add: Income tax expense from continuing operations attributable to
AES
|
|
85
|
|
|
|
|
198
|
|
|
|
|
|
|
Pre-tax contribution
|
|
$
|
239
|
|
|
|
|
$
|
883
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized derivative and equity securities losses
|
|
$
|
3
|
|
|
$
|
0.01
|
|
|
$
|
12
|
|
|
$
|
0.02
|
|
|
|
|
Unrealized foreign currency losses (gains)
|
|
11
|
|
|
0.02
|
|
|
(3
|
)
|
|
—
|
|
|
|
|
Disposition/acquisition losses (gains)
|
|
9
|
|
|
0.01
|
|
|
(778
|
)
|
|
(1.17
|
)
|
|
(2)
|
|
Impairment expense
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
Loss on extinguishment of debt
|
|
8
|
|
|
0.01
|
|
|
171
|
|
|
0.26
|
|
|
(3)
|
|
Restructuring costs
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
|
|
U.S. Tax Law Reform Impact
|
|
|
|
0.01
|
|
|
|
|
—
|
|
|
|
|
Less: Net income tax expense (benefit)
|
|
|
|
(0.01
|
)
|
|
|
|
0.14
|
|
|
(4)
|
|
Adjusted PTC and Adjusted EPS
|
|
$
|
272
|
|
|
$
|
0.28
|
|
|
$
|
288
|
|
|
$
|
0.28
|
|
|
|
|
_____________________________
|
|
|
|
|
(1)
|
|
NCI is defined as Noncontrolling Interests.
|
|
(2)
|
|
Amount primarily relates to gain on sale of Masinloc of $777
million, or $1.17 per share.
|
|
(3)
|
|
Amount primarily relates to loss on early retirement of debt at the
Parent Company of $169 million, or $0.26 per share.
|
|
(4)
|
|
Amount primarily relates to the income tax expense under the GILTI
provision associated with gain on sale of Masinloc of $155 million,
or $0.23 per share, partially offset by income tax benefits
associated with the loss on early retirement of debt at the Parent
Company of $53 million, or $0.08 per share.
|
|
|
|
|
|
|
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
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
|
June 30,
2018
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Subsidiary distributions (1) to Parent & QHCs
|
|
$
|
1,035
|
|
|
$
|
1,186
|
|
|
$
|
1,255
|
|
|
$
|
1,240
|
|
Returns of capital distributions to Parent & QHCs
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|
(65
|
)
|
|
Total subsidiary distributions & returns of capital to Parent
|
|
$
|
1,035
|
|
|
$
|
1,186
|
|
|
$
|
1,188
|
|
|
$
|
1,175
|
|
Parent only data: quarterly
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
Quarter Ended
|
|
Total subsidiary distributions & returns
of capital to Parent
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
|
June 30,
2018
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Subsidiary distributions (1) to Parent & QHCs
|
|
$
|
200
|
|
|
$
|
390
|
|
|
$
|
175
|
|
|
$
|
270
|
|
Returns of capital distributions to Parent & QHCs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total subsidiary distributions & returns of capital to Parent
|
|
$
|
200
|
|
|
$
|
390
|
|
|
$
|
175
|
|
|
$
|
270
|
|
Parent Company Liquidity
(2)
|
|
|
|
(in millions)
|
|
Balance at
|
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
|
June 30,
2018
|
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Cash at Parent & Cash at QHCs (3) |
|
$
|
34
|
|
|
$
|
24
|
|
|
$
|
43
|
|
|
$
|
151
|
|
Availability under credit facilities
|
|
775
|
|
|
1,022
|
|
|
1,042
|
|
|
687
|
|
|
Ending liquidity
|
|
$
|
809
|
|
|
$
|
1,046
|
|
|
$
|
1,085
|
|
|
$
|
838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Subsidiary distributions should not be construed as an alternative
to Net Cash Provided by Operating Activities which is 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 available borrowings under existing credit facility 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’ 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.
|
|
|
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20190507005466/en/
Investor Contact: Ahmed Pasha 703-682-6451
Media Contact: Amy
Ackerman 703-682-6399
Source: The AES Corporation