AES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 

                                                        Quarter Ended

                                                          March 31,

($ in millions, except per share amounts)               2005    2004

                                                       ---------------

 

 

Revenues                                               $2,645  $2,257

Cost of sales                                          (1,863) (1,577)

                                                       ------- -------

  GROSS MARGIN                                            782     680

 

General and administrative expenses                       (49)    (48)

                                                       ------- -------

 

  OPERATING INCOME                                        733     632

 

Interest expense                                         (467)   (493)

Interest income                                            86      69

Other nonoperating expense, net                           (15)    (14)

Foreign currency transaction losses                       (12)     (8)

Loss on sale of investments                                 -      (1)

Equity in earnings of affiliates                           25      16

                                                       ------- -------

 

  INCOME BEFORE INCOME TAXES AND MINORITY INTEREST

                                                          350     201

 

Income tax expense                                       (126)    (64)

Minority interest expense, net                            (91)    (63)

                                                       ------- -------

 

  INCOME FROM CONTINUING OPERATIONS                       133      74

 

Loss from operations of discontinued components (net

 of income tax expense of $0 and $2, respectively)          -     (26)

                                                       ------- -------

 

  INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE

                                                          133      48

 

Cumulative effect of accounting change                      -       -

 

                                                       ------- -------

  NET INCOME                                           $  133  $   48

                                                       ======= =======

 

 

DILUTED EARNINGS PER SHARE

Income from continuing operations                      $ 0.20  $ 0.12

Discontinued operations                                     -   (0.04)

Cumulative effect of accounting change                      -       -

                                                       ------- -------

Total                                                  $ 0.20  $ 0.08

                                                       ======= =======

 

Diluted weighted average shares outstanding (in

 millions)                                                660     633

                                                       ======= =======

 

 

AES CORPORATION

 

SEGMENT INFORMATION (unaudited)

 

                                                        Quarter Ended

                                                          March 31,

($ in millions)                                          2005    2004

                                                       ---------------

 

BUSINESS SEGMENTS

 

REVENUES

  Large Utilities                                      $1,007  $  818

  Growth Distribution                                     374     328

  Contract Generation                                     985     868

  Competitive Supply                                      279     243

                                                       ------- -------

 

    Total revenues                                     $2,645  $2,257

 

GROSS MARGIN

  Large Utilities                                      $  252  $  194

  Growth Distribution                                      73      63

  Contract Generation                                     393     359

  Competitive Supply                                       64      64

                                                       ------- -------

 

    Total gross margin                                 $  782  $  680

 

INCOME BEFORE INCOME TAXES AND MINORITY INTEREST

  Large Utilities                                      $  153  $  117

  Growth Distribution                                      45      31

  Contract Generation                                     252     190

  Competitive Supply                                       53      55

  Corporate                                              (153)   (192)

                                                       ------- -------

 

    Total income before income taxes and minority

     interest                                          $  350  $  201

 

----------------------------------------------------------------------

 

GEOGRAPHIC SEGMENTS

 

REVENUES

  North America                                        $  540  $  546

  Caribbean                                               403     391

  South America                                         1,192     879

  Europe/Africa                                           309     274

  Asia                                                    201     167

                                                       ------- -------

 

    Total revenues                                     $2,645  $2,257

 

INCOME BEFORE INCOME TAXES AND MINORITY INTEREST

  North America                                        $  114  $  118

  Caribbean                                                55      61

  South America                                           190      92

  Europe/Africa                                            79      57

  Asia                                                     65      65

  Corporate                                              (153)   (192)

                                                       ------- -------

 

    Total income before income taxes and minority

     interest                                          $  350  $  201

 

 

AES CORPORATION

 

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

 

                                                March 31, December 31,

($ in millions)                                   2005       2004

                                                ----------------------

 

ASSETS

  CURRENT ASSETS

  Cash and cash equivalents                     $  1,555  $     1,396

  Restricted cash                                    334          395

  Short term investments                              57          153

  Accounts receivable, net of reserves of $322

   and $303, respectively                          1,547        1,575

  Inventory                                          413          418

  Receivable from affiliates                           7            8

  Deferred income taxes - current                    193          187

  Prepaid expenses                                   116           93

  Other current assets                               674          713

  Current assets of held for sale and

   discontinued businesses                             -            -

                                                --------- ------------

    Total current assets                           4,896        4,938

 

  PROPERTY, PLANT AND EQUIPMENT

  Land                                               783          788

  Electric generation and distribution assets     22,463       22,434

  Accumulated depreciation and amortization       (5,530)      (5,353)

  Construction in progress                         1,107          919

                                                --------- ------------

    Property, plant and equipment, net            18,823       18,788

 

  OTHER ASSETS

  Deferred financing costs, net                      496          513

  Investment in and advances to affiliates           684          655

  Debt service reserves and other deposits           678          737

  Goodwill, net                                    1,422        1,378

  Deferred income taxes - noncurrent                 798          813

  Long-term assets of held for sale and

   discontinued businesses                             -            -

  Other assets                                     1,866        1,910

                                                --------- ------------

    Total other assets                             5,944        6,006

                                                --------- ------------

 

      TOTAL ASSETS                              $ 29,663  $    29,732

                                                ========= ============

 

LIABILITIES AND STOCKHOLDERS' EQUITY

  CURRENT LIABILITIES

  Accounts payable                              $  1,106  $     1,143

  Accrued interest                                   409          336

  Accrued and other liabilities                    1,686        1,583

  Current liabilities of held for sale and

   discontinued businesses                             -            -

  Recourse debt-current portion                      146          142

  Non-recourse debt-current portion                1,748        1,618

                                                --------- ------------

    Total current liabilities                      5,095        4,822

 

  LONG-TERM LIABILITIES

  Non-recourse debt                               11,435       11,813

  Recourse debt                                    5,016        5,010

  Deferred income taxes                              729          685

  Long-term liabilities of held for sale and

   discontinued businesses                             -            -

  Pension liabilities                                869          891

  Other long-term liabilities                      3,108        3,261

                                                --------- ------------

    Total long-term liabilities                   21,157       21,660

 

  Minority Interest                                1,663        1,605

 

  STOCKHOLDERS' EQUITY

  Common stock                                         7            7

  Additional paid-in capital                       6,368        6,341

  Accumulated deficit                               (680)        (813)

  Accumulated other comprehensive loss            (3,947)      (3,890)

                                                --------- ------------

    Total stockholders' equity                     1,748        1,645

                                                --------- ------------

 

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $ 29,663  $    29,732

                                                ========= ============

 

 

AES CORPORATION

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 

                                                          March 31,

($ in millions)                                          2005    2004

                                                       ------- -------

 

OPERATING ACTIVITIES

  Net income                                           $  133  $   48

  Adjustments:

    Depreciation and amortization of intangible assets    224     200

    Other non-cash charges                                153     226

    Increase in working capital                           (84)    (78)

    Changes in other assets and liabilities                94       6

                                                       ------- -------

      Net cash provided by operating activities           520     402

 

INVESTING ACTIVITIES

  Property additions                                     (271)   (190)

  Proceeds from the sale of assets                          3      27

  Sale of short-term investments                          430     392

  Purchase of short-term investments                     (330)   (428)

  Acquisitions, net of cash acquired                      (85)      -

  Decrease (increase) in restricted cash                   67    (435)

  Decrease (increase) in debt service reserves and

   other assets                                            27      (4)

  Other investing                                          (7)      7

                                                       ------- -------

    Net cash used in investing activities                (166)   (631)

 

FINANCING ACTIVITIES

  Borrowings under the revolving credit facilities         10       -

  Issuance of non-recourse debt and other coupon

   bearing securities                                     416   1,133

  Repayments of non-recourse debt and other coupon

   bearing securities                                    (586) (1,473)

  Payments for deferred financing costs                    (1)    (40)

  Dividends to minority interests, net                    (21)     (8)

  Issuance of common stock, net                             8       2

  Other financing                                          (2)     (1)

                                                       ------- -------

    Net cash used in financing activities                (176)   (387)

    Effect of exchange rate changes on cash               (19)    (15)

                                                       ------- -------

 

Total increase (decrease) in cash and cash equivalents    159    (631)

Decrease in cash and cash equivalents of discontinued

 operations and businesses held for sale                    -      (1)

Cash and cash equivalents, beginning                    1,396   1,727

                                                       ------- -------

Cash and cash equivalents, ending                      $1,555  $1,095

                                                       ======= =======

 

 

AES CORPORATION

 

RECONCILIATION OF ADJUSTED EARNINGS PER SHARE (1)  (unaudited)

 

                                                         Quarter Ended

                                                           March 31,

($ per share)                                             2005   2004

                                                         -------------

 

 

 

Adjusted Earnings Per Share                              $0.17  $0.17

 

  FAS 133 Mark-to-Market Gains/(Losses) (2)                  -  (0.05)

  Currency Transaction Gains/(Losses)                     0.03   0.01

  Net Asset Gains/(Losses and Impairments)                   -      -

  Debt Retirement Gains/(Losses)                             -  (0.01)

                                                         ------ ------

 

Diluted EPS From Continuing Operations                   $0.20  $0.12

                                                         ====== ======

 

(1) Adjusted earnings per share (a non-GAAP financial measure) is

    defined as diluted earnings per share from continuing operations

    excluding gains or losses associated with (a) mark-to-market

    amounts related to FAS 133 derivative transactions, (b) foreign

    currency transaction impacts on the net monetary position related

    to Brazil, Venezuela, and Argentina, (c) significant asset gains

    or losses due to disposition transactions and impairments, and (d)

    early retirement of recourse debt. 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 associated with

    mark-to-market gains or losses related to certain derivative

    transactions, currency transaction gains or losses, periodic

    strategic decisions to dispose of certain assets which may

    influence results in a given period, and the early retirement of

    corporate debt.

 

(2) The Quarter Ended March 31, 2004 includes $(0.03) related to Chile

    debt restructuring costs included in interest expense.

 

 

                         The AES Corporation

                     Parent Financial Information

----------------------------------------------------------------------

 

Parent only data: last four quarters

($ in millions)

                                             4 Quarters Ended

                                     March  December September  June

                                      31,      31,      30,      30,

Total subsidiary distributions &     2005     2004     2004     2004

 returns of capital to Parent       Actual   Actual   Actual   Actual

--------------------------------    ------- -------- --------- -------

Subsidiary distributions to Parent  $  977  $   991  $    953  $1,056

Net distributions to/(from)

 QHCs (1)                               18       13        29      24

                                    ------- -------- --------- -------

Subsidiary distributions               995    1,004       982   1,080

 

Returns of capital distributions to

 Parent                                115      116       130     219

Net returns of capital

 distributions to/(from) QHCs (1)       11       11        12      (6)

                                    ------- -------- --------- -------

Returns of capital distributions       126      127       142     213

 

Combined distributions & return of

 capital received                    1,121    1,131     1,124   1,293

Less: combined net distributions &

 returns of capital to/(from)

 QHCs (1)                              (29)     (24)      (41)    (18)

                                    ------- -------- --------- -------

Total subsidiary distributions &

 returns of capital to Parent       $1,092  $ 1,107  $  1,083  $1,275

                                    ======= ======== ========= =======

 

 

Parent only data: quarterly

($ in millions)                               Quarter Ended

                                     March  December September  June

                                      31,      31,      30,      30,

Total subsidiary distributions &     2005     2004     2004     2004

 returns of capital to Parent       Actual   Actual   Actual   Actual

--------------------------------    ------- -------- --------- -------

Subsidiary distributions to Parent  $  190  $   286  $    209  $  292

Net distributions to/(from)

 QHCs (1)                                5       (9)       12      10

                                    ------- -------- --------- -------

Subsidiary distributions               195      277       221     302

 

Returns of capital distributions to

 Parent                                  2        3       110       -

Net returns of capital

 distributions to/(from) QHCs (1)        -        -        11       -

                                    ------- -------- --------- -------

Returns of capital distributions         2        3       121       -

 

Combined distributions & return of

 capital received                      197      280       342     302

Less: combined net distributions &

 returns of capital to/(from)

 QHCs (1)                               (5)       9       (23)    (10)

                                    ------- -------- --------- -------

Total subsidiary distributions &

 returns of capital to Parent       $  192  $   289  $    319  $  292

                                    ======= ======== ========= =======

 

 

Liquidity (2)

-------------                                   Balance at

($ in millions)                      March  December September  June

                                      31,     31,       30,      30,

                                     2005    2004      2004     2004

                                    Actual   Actual   Actual   Actual

                                    ------- -------- --------- -------

Cash at Parent                      $  256  $   287  $    525  $  310

Availability under revolver            218      352       325     331

Cash at QHCs (1)                         3        4        13      15

                                    ------- -------- --------- -------

  Ending liquidity                  $  477  $   643  $    863  $  656

                                    ======= ======== ========= =======

 

(1) The cash held at qualifying holding companies (QHCs) represents

    cash sent to subsidiaries of the company domiciled outside 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 the US. These investments included equity investments

    and loans to other foreign subsidiaries as well as development and

    general costs and expenses incurred outside the US. Since the cash

    held by these qualifying holding companies is available to the

    parent, AES uses the combined measure of subsidiary distributions

    to parent and qualified holding companies as a useful measure of

    cash available to the parent to meet its international liquidity

    needs.

 

(2) AES believes that unconsolidated parent company liquidity is

    important to the liquidity position of AES as a Parent company

    because of the non-recourse nature of most of AES's

    indebtedness.

 

SOURCE: AES Corporation