Q2 2018 Strategic Highlights
- Credit ratings upgraded by Fitch and
Moody's; now rated a notch below investment grade by all three
agencies
- On track to achieve $100 million cost
savings program
- Year-to-date, signed long-term
contracts for 1.5 GW of renewables, bringing total backlog to 5.7
GW
- Fluence energy storage JV signed
contracts for 80 MW
Q2 2018 Financial Highlights
- Diluted EPS of $0.15, compared to $0.08
in Q2 2017; YTD 2018 Diluted EPS of $1.18, compared to $0.04 in YTD
2017
- Adjusted EPS of $0.25, compared to
$0.25 in Q2 2017; YTD 2018 Adjusted EPS of $0.52, compared to $0.42
in YTD 2017
- Reaffirming 2018 guidance and
expectations for 8% to 10% average annual growth in Adjusted EPS
and Parent Free Cash Flow through 2020
The AES Corporation (NYSE: AES) today reported financial results
for the quarter ended June 30, 2018.
"During the second quarter, we continued to make progress on our
strategic objectives of improving our credit profile, enhancing
efficiency and greening our portfolio," said Andrés Gluski, AES
President and Chief Executive Officer. "Our cost savings initiative
is on track to deliver $100 million in 2018. We brought on-line the
671 MW Eagle Valley CCGT in Indiana in April and will be
inaugurating the 380 MW Colon CCGT and LNG regasification terminal
in Panama later this month. Year-to-date we have signed long-term
contracts for 1,473 MW of renewable energy, which combined with our
4,252 MW under construction, brings our total backlog to 5,725
MW."
"With the recent credit rating upgrades by Fitch and Moody's, we
are now rated a notch below our investment grade rating target,
which we expect to achieve in 2020," said Tom O'Flynn, AES
Executive Vice President and Chief Financial Officer. "We are
encouraged with our strategic and financial progress, and
accordingly, we are reaffirming our 2018 guidance and expectations
through 2020."
Key Q2 2018 Financial Results
Second quarter 2018 Diluted Earnings Per Share from Continuing
Operations (Diluted EPS) was $0.15, an increase of $0.07 compared
to second quarter 2017, primarily reflecting the gain on the sale
of Electrica Santiago in Chile versus prior year losses on the sale
of the Company's merchant coal-fired businesses in Kazakhstan,
partially offset by higher unrealized foreign currency losses.
Second quarter 2018 Adjusted Earnings Per Share (Adjusted EPS, a
non-GAAP financial measure) was $0.25, unchanged compared to second
quarter 2017. This reflects lower Parent interest expense and
higher contributions from the Company's South America and MCAC
Strategic Business Units (SBU), which were offset by the impact of
asset sales in the Philippines and Kazakhstan, as well as a higher
quarterly tax rate of 36%, compared to 31% in the second quarter of
2017.
Detailed Strategic Highlights
- On track to achieve investment grade
credit metrics in 2019 and attain investment grade ratings in 2020
- Upgraded by Fitch to BB+ from BB in May
2018
- Upgraded by Moody's to Ba1 from Ba2 in
June 2018
- Backlog of 5,725 MW includes:
- 4,252 MW under construction and coming
on-line through 2021; and
- 1,473 MW of renewables signed
year-to-date under long-term Power Purchase Agreements (PPA, 60%
solar and 40% wind) that are expected to come on-line through
2020
- 1,298 MW in the US, primarily at
sPower, with contracts in eight states; majority of offtakers are
large Commercial & Industrial customers or utilities; and
- 175 MW in Argentina and Brazil
- Closed sale of Eletropaulo in Brazil
for net proceeds of approximately $310 million
- Expect to receive approvals from the
Commissions by year-end for two recently settled rate cases at IPL
and DPL in the US
Guidance and Expectations1
The Company reaffirms its 2018 Adjusted EPS guidance of $1.15 to
$1.25 and its average annual growth rate target of 8% to 10%
through 2020. Growth in 2018 will be primarily driven by
contributions from new businesses, cost savings and lower Parent
interest.
The Company also reaffirms its 2018 Parent Free Cash Flow
expectation of $600 million to $675 million.
The Company's 2018 guidance and expectations through 2020 are
based on foreign currency and commodity forward curves as of June
30, 2018.
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 without
unreasonable effort. See "Non-GAAP measures" for a description of
the adjustments to reconcile Adjusted EPS to Diluted EPS for the
quarter ended June 30, 2018.
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 Measures and Parent
Financial Information.
Conference Call Information
AES will host a conference call on Tuesday, August 7, 2018
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 0295415.
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 2017 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
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’ 2017 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 2017 Annual
Report on Form 10-K dated on or about February 26, 2018 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 June 30, Six
Months Ended June 30, 2018 2017
2018 2017 (in millions, except per share
amounts) Revenue: Regulated $ 716 $ 783 $ 1,438 $ 1,596
Non-Regulated 1,821 1,830 3,839 3,598
Total revenue 2,537 2,613 5,277 5,194
Cost of Sales: Regulated (617 ) (681 ) (1,218 ) (1,384 )
Non-Regulated (1,320 ) (1,309 ) (2,803 ) (2,630 ) Total cost of
sales (1,937 ) (1,990 ) (4,021 ) (4,014 ) Operating margin 600
623 1,256 1,180 General and
administrative expenses (35 ) (49 ) (91 ) (103 ) Interest expense
(263 ) (276 ) (544 ) (563 ) Interest income 76 59 152 122 Gain
(loss) on extinguishment of debt (6 ) (12 ) (176 ) 5 Other expense
(4 ) (7 ) (13 ) (31 ) Other income 7 14 20 87 Gain (loss) on
disposal and sale of businesses 89 (48 ) 877 (48 ) Asset impairment
expense (92 ) (90 ) (92 ) (258 ) Foreign currency transaction gains
(losses) (30 ) 12 (49 ) (8 ) INCOME FROM CONTINUING
OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF AFFILIATES 342
226 1,340 383 Income tax expense (132 ) (86 ) (363 ) (153 ) Net
equity in earnings of affiliates 14 2 25 9
INCOME FROM CONTINUING OPERATIONS 224 142 1,002 239 Income
(loss) from operations of discontinued businesses, net of income
tax expense of $2, $5, $2 and $7, respectively (4 ) 8 (5 ) 9 Gain
from disposal of discontinued businesses, net of income tax expense
of $42, $0, $42 and $0, respectively 196 — 196
— NET INCOME 416 150 1,193 248 Noncontrolling interests:
Less: Income from continuing operations attributable to
noncontrolling interests and redeemable stocks of subsidiaries (128
) (89 ) (221 ) (210 ) Less: Loss (income) from discontinued
operations attributable to noncontrolling interests 2 (8 ) 2
(9 ) NET INCOME ATTRIBUTABLE TO THE AES CORPORATION $ 290
$ 53 $ 974 $ 29 AMOUNTS ATTRIBUTABLE TO
THE AES CORPORATION COMMON STOCKHOLDERS: Income from continuing
operations, net of tax $ 96 $ 53 $ 781 $ 29 Income from
discontinued operations, net of tax 194 — 193
— NET INCOME ATTRIBUTABLE TO THE AES CORPORATION $ 290
$ 53 $ 974 $ 29 BASIC EARNINGS PER
SHARE: Income from continuing operations attributable to The AES
Corporation common stockholders, net of tax $ 0.15 $ 0.08 $ 1.18 $
0.04 Income from discontinued operations attributable to The AES
Corporation common stockholders, net of tax 0.29 —
0.29 — NET INCOME ATTRIBUTABLE TO THE AES CORPORATION
COMMON STOCKHOLDERS $ 0.44 $ 0.08 $ 1.47 $
0.04 DILUTED EARNINGS PER SHARE: Income from continuing
operations attributable to The AES Corporation common stockholders,
net of tax $ 0.15 $ 0.08 $ 1.18 $ 0.04 Income from discontinued
operations attributable to The AES Corporation common stockholders,
net of tax 0.29 — 0.29 — NET INCOME
ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS $ 0.44
$ 0.08 $ 1.47 $ 0.04 DILUTED SHARES
OUTSTANDING 664 662 664 662 DIVIDENDS
DECLARED PER COMMON SHARE $ — $ — $ 0.13 $
0.12
THE AES CORPORATION Strategic
Business Unit (SBU) Information (Unaudited)
Three Months Ended June 30, Six Months
Ended June 30, (in millions) 2018
2017 2018 2017 REVENUE US and
Utilities SBU $ 995 $ 1,046 $ 2,022 $ 2,093 South America SBU 846
796 1,741 1,543 MCAC SBU 406 375 814 723 Eurasia SBU 292 395 711
824 Corporate, Other and Inter-SBU eliminations (2 ) 1 (11 )
11 Total Revenue $ 2,537 $ 2,613 $ 5,277 $
5,194
THE AES CORPORATION Condensed Consolidated Balance Sheets
(Unaudited) June 30, December 31,
2018 2017
(in millions, except share
and per share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,140 $ 949 Restricted cash 379 274
Short-term investments 856 424 Accounts receivable, net of
allowance for doubtful accounts of $17 and $10, respectively 1,423
1,463 Inventory 583 562 Prepaid expenses 116 62 Other current
assets 682 630 Current held-for-sale assets 108 2,034
Total current assets 5,287 6,398
NONCURRENT ASSETS
Property, Plant and Equipment: Land 480 502 Electric generation,
distribution assets and other 24,269 24,119 Accumulated
depreciation (7,905 ) (7,942 ) Construction in progress 3,875
3,617 Property, plant and equipment, net 20,719
20,296 Other Assets: Investments in and advances to
affiliates 1,327 1,197 Debt service reserves and other deposits 623
565 Goodwill 1,059 1,059 Other intangible assets, net of
accumulated amortization of $476 and $441, respectively 341 366
Deferred income taxes 83 130 Service concession assets, net of
accumulated amortization of $0 and $206, respectively — 1,360 Loan
receivable 1,458 — Other noncurrent assets 1,700 1,741
Total other assets 6,591 6,418 TOTAL ASSETS $
32,597 $ 33,112
LIABILITIES AND EQUITY CURRENT
LIABILITIES Accounts payable $ 1,506 $ 1,371 Accrued interest 200
228 Accrued and other liabilities 1,036 1,232 Non-recourse debt,
includes $369 and $1,012, respectively, related to variable
interest entities 1,235 2,164 Current held-for-sale liabilities 17
1,033 Total current liabilities 3,994 6,028
NONCURRENT LIABILITIES Recourse debt 4,126 4,625
Non-recourse debt, includes $2,520 and $1,358, respectively,
related to variable interest entities 14,230 13,176 Deferred income
taxes 1,165 1,006 Other noncurrent liabilities 2,562 2,595
Total noncurrent liabilities 22,083 21,402
Commitments and Contingencies (see Note 8) Redeemable stock of
subsidiaries 863 837 EQUITY THE AES CORPORATION STOCKHOLDERS’
EQUITY Common stock ($0.01 par value, 1,200,000,000 shares
authorized; 816,449,182 issued and 661,528,835 outstanding at June
30, 2018 and 816,312,913 issued and 660,388,128 outstanding at
December 31, 2017) 8 8 Additional paid-in capital 8,402 8,501
Accumulated deficit (1,234 ) (2,276 ) Accumulated other
comprehensive loss (1,988 ) (1,876 ) Treasury stock, at cost
(154,920,347 and 155,924,785 shares at June 30, 2018 and December
31, 2017, respectively) (1,879 ) (1,892 ) Total AES Corporation
stockholders’ equity 3,309 2,465 NONCONTROLLING INTERESTS 2,348
2,380 Total equity 5,657 4,845 TOTAL
LIABILITIES AND EQUITY $ 32,597 $ 33,112
THE AES CORPORATION Condensed Consolidated
Statements of Cash Flows (Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
(in millions) (in millions) OPERATING ACTIVITIES: Net
income $ 416 $ 150 $ 1,193 $ 248 Adjustments to net income:
Depreciation and amortization 258 290 512 581 Loss (gain) on
disposal and sale of businesses (89 ) 48 (877 ) 48 Asset impairment
expense 93 90 93 258 Deferred income taxes 3 (12 ) 183 (18 )
Provisions for contingencies — 11 — 23 Loss (gain) on
extinguishment of debt 6 12 176 (5 ) Net loss on sales of assets —
7 2 19 Gain on sale of discontinued operations (238 ) — (238 ) —
Other 54 54 126 102 Changes in operating assets and liabilities
(Increase) decrease in accounts receivable 45 (170 ) 6 (120 )
(Increase) decrease in inventory (17 ) (27 ) (33 ) (43 ) (Increase)
decrease in prepaid expenses and other current assets (42 ) 42 (75
) 153 (Increase) decrease in other assets (4 ) (112 ) 15 (155 )
Increase (decrease) in accounts payable and other current
liabilities (24 ) (66 ) (90 ) (131 ) Increase (decrease) in income
taxes payable, net and other taxes payable (62 ) (99 ) (62 ) (61 )
Increase (decrease) in other liabilities — 36 (17 )
63 Net cash provided by operating activities 399 254
914 962 INVESTING ACTIVITIES: Capital
expenditures (499 ) (649 ) (994 ) (1,123 ) Acquisitions of
businesses, net of cash acquired, and equity method investments (42
) (2 ) (42 ) (2 ) Proceeds from the sale of businesses, net of cash
and restricted cash sold 628 29 1,808 33 Proceeds from the sale of
assets 15 — 15 — Sale of short-term investments 269 1,023 418 1,930
Purchase of short-term investments (593 ) (1,160 ) (938 ) (1,876 )
Contributions to equity affiliates (46 ) (43 ) (90 ) (43 ) Other
investing (28 ) 23 (57 ) (15 ) Net cash provided by (used
in) investing activities (296 ) (779 ) 120 (1,096 )
FINANCING ACTIVITIES: Borrowings under the revolving credit
facilities 252 313 1,133 538 Repayments under the revolving credit
facilities (259 ) (440 ) (1,042 ) (524 ) Issuance of recourse debt
— 525 1,000 525 Repayments of recourse debt (7 ) (519 ) (1,781 )
(860 ) Issuance of non-recourse debt 435 1,263 1,192 1,832
Repayments of non-recourse debt (331 ) (687 ) (841 ) (982 )
Payments for financing fees (11 ) (62 ) (25 ) (80 ) Distributions
to noncontrolling interests (111 ) (151 ) (128 ) (184 )
Contributions from noncontrolling interests and redeemable security
holders 17 15 28 44 Dividends paid on AES common stock (86 ) (79 )
(172 ) (158 ) Payments for financed capital expenditures (31 ) (35
) (120 ) (61 ) Other financing 33 — 27 (26 )
Net cash provided by (used in) financing activities (99 ) 143
(729 ) 64 Effect of exchange rate changes on cash (25
) (5 ) (20 ) 6 (Increase) decrease in cash and restricted cash of
discontinued operations and held-for-sale businesses (5 ) 20
69 (15 ) Total increase (decrease) in cash, cash equivalents
and restricted cash (26 ) (367 ) 354 (79 ) Cash, cash equivalents
and restricted cash, beginning 2,168 2,248 1,788
1,960 Cash, cash equivalents and restricted cash,
ending $ 2,142 $ 1,881 $ 2,142 $ 1,881
SUPPLEMENTAL DISCLOSURES: Cash payments for interest, net of
amounts capitalized $ 315 $ 417 $ 522 $ 612 Cash payments for
income taxes, net of refunds $ 138 $ 144 $ 209 $ 218 SCHEDULE OF
NONCASH INVESTING AND FINANCING ACTIVITIES: Non-cash acquisition of
intangible assets $ 5 $ — $ 5 $ — Non-cash contributions of assets
and liabilities for Fluence acquisition $ — $ — $ 20 $ — Conversion
of Alto Maipo loans and accounts payable into equity $ — $ — $ — $
279
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. 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,
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. Effective January 1, 2018, the Company changed the
definition of Adjusted PTC and Adjusted EPS to exclude unrealized
gains or losses from equity securities resulting from a newly
effective accounting standard. We believe excluding these gains or
losses provides a more accurate picture of continuing operations.
Factors in this determination include the variability due to
unrealized gains or losses related to equity securities
remeasurement. The Company has also reflected these changes in the
comparative period.
Three Months EndedJune 30,
2018
Three Months EndedJune 30,
2017
Six Months EndedJune 30,
2018
Six Months EndedJune 30,
2017
Net of NCI (1)
Per Share(Diluted) Netof NCI (1)
Net of NCI (1)
Per Share(Diluted) Netof NCI (1)
Net of NCI (1)
Per Share(Diluted) Netof NCI (1)
Net of NCI (1)
Per Share(Diluted) Netof NCI (1)
(in millions, except per share amounts) Income from
continuing operations, net of tax, attributable to AES and Diluted
EPS $ 96 $ 0.15 $ 53
$ 0.08 $ 781 $ 1.18
$ 29 $ 0.04 Add: Income tax expense
from continuing operations attributable to AES 93 50
291 70 Pre-tax contribution
$ 189
$ 103 $ 1,072 $ 99
Adjustments Unrealized derivative and equity securities
losses (gains) $ (24 ) $ (0.04 ) $ 2 $ — $ (12 ) $ (0.02 ) $ 1 $ —
Unrealized foreign currency losses (gains) 52 0.08 (2) (24 ) (0.03
) 49 0.07 (3) (33 ) (0.04 ) Disposition/acquisition losses (gains)
(61 ) (0.09 ) (4) 56 0.08 (5) (839 ) (1.26 ) (6) 108 0.16 (7)
Impairment expense 92 0.14 (8) 94 0.14 (9) 92 0.14 (8) 262 0.40
(10) Losses (gains) on extinguishment of debt 7 0.01 11 0.02 178
0.27 (11) (5 ) (0.01 ) Restructuring costs — — — — 3 — — — Less:
Net income tax expense (benefit) — (0.04 )
(12) 0.14 (13) (0.13 ) (14)
Adjusted PTC
and Adjusted EPS $ 255 $
0.25 $ 242 $ 0.25
$ 543 $ 0.52
$ 432 $ 0.42
_____________________________
(1) NCI is defined as Noncontrolling Interests. (2) Amount
primarily relates to unrealized FX losses of $20 million, or $0.03
per share, associated with the devaluation of long-term receivables
denominated in Argentine pesos, and unrealized FX losses of $16
million, or $0.02 per share, on intercompany receivables
denominated in Euros at the Parent Company. (3) Amount primarily
relates to unrealized FX losses of $22 million, or $0.03 per share,
associated with the devaluation of long-term receivables
denominated in Argentine pesos, and unrealized FX losses of $12
million, or $0.02 per share, associated with the devaluation of
receivables denominated in Chilean pesos. (4) Amount primarily
relates to gain on sale of Electrica Santiago of $49 million, or
$0.07 per share, and realized derivative gains associated with the
sale of Eletropaulo of $17 million, or $0.03 per share. (5) Amount
primarily relates to loss on sale of Kazakhstan CHPs of $48
million, or $0.07 per share. (6) Amount primarily relates to gain
on sale of Masinloc of $777 million, or $1.17 per share, gain on
sale of Electrica Santiago of $49 million, or $0.07 per share, and
realized derivative gains associated with the sale of Eletropaulo
of $17 million, or $0.03 per share. (7) Amount primarily relates to
loss on sale of Kazakhstan CHPs of $48 million, or $0.07 per share,
realized derivative losses associated with the sale of Sul of $38
million, or $0.06 per share, and costs associated with early plant
closures at DPL of $20 million, or $0.03 per share. (8) Amount
primarily relates to the asset impairment at a U.S. generation
facility of $83 million, or $0.13 per share. (9) Amount primarily
relates to asset impairments at Kazakhstan HPPs of $90 million, or
$0.14 per share. (10) Amount primarily relates to asset impairments
at Kazakhstan HPPs of $90 million, or $0.14 per share, Kazakhstan
CHPs of $94 million, or $0.14 per share, and DPL of $66 million, or
$0.10 per share. (11) Amount primarily relates to loss on early
retirement of debt at the Parent Company of $169 million, or $0.26
per share. (12) Amount primarily relates to the income tax benefit
associated with asset impairments of $30 million, or $0.05 per
share. (13) 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, and income tax expense
associated with the gain on sale of Electrica Santiago of $23
million, or $0.04 per share; partially offset by income tax
benefits associated with the loss on early retirement of debt at
the Parent Company of $52 million, or $0.08 per share, and income
tax benefits associated with the impairment at a U.S. generation
facility of $26 million, or $0.04 per share. (14) Amount primarily
relates to the income tax benefit associated with asset impairments
of $81 million, or $0.12 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
June 30,2018
March 31,2018
December 31,2017
September 30,2017
Actual Actual Actual
Actual Subsidiary distributions (1) to Parent & QHCs $
1,240 $ 1,345 $ 1,203 $ 1,170 Returns of capital distributions to
Parent & QHCs (65 ) — — 80
Total subsidiary distributions & returns of capital to
Parent $ 1,175 $
1,345 $ 1,203
$ 1,250 Parent only data: quarterly (in
millions)
Quarter Ended
Total subsidiary
distributions & returns of capital to Parent
June 30,2018
March 31,2018
December 31,2017
September 30,2017
Actual Actual Actual
Actual Subsidiary distributions (1) to Parent & QHCs $
270 $ 351 $ 459 $ 160 Returns of capital distributions to Parent
& QHCs — — (67 ) 2
Total
subsidiary distributions & returns of capital to Parent
$ 270 $ 351
$ 392 $ 162
Parent Company
Liquidity (2)
(in millions)
Balance at
June 30,2018
March 31,2018
December 31,2017
September 30,2017
Actual Actual Actual
Actual Cash at Parent & Cash at QHCs (3) $ 151 $ 76 $ 11
$ 81 Availability under credit facilities 687 807
858 551
Ending liquidity
$ 838 $ 883
$ 869 $ 632 (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/20180807005361/en/
The AES CorporationInvestor Contact:Ahmed Pasha,
703-682-6451orMedia Contact:Amy Ackerman, 703-682-6399
AES (NYSE:AES)
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