SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): February 5, 2002
THE AES CORPORATION
(exact name of registrant as specified in its charter)
DELAWARE 333-15487 54-1163725
(State of Incorporation) (Commission File No.) (IRS Employer Identification No.)
1001 North 19th Street, Suite 2000
Arlington, Virginia 22209
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code:
(703) 522-1315
NOT APPLICABLE
(Former Name or Former Address, if changed since last report)
Item 5. Other Events
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The AES Corporation announced today that net income for 2001 was $727 million,
before deducting the non-cash foreign currency transaction losses at Brazilian
affiliates, the mark-to-market losses from FAS 133, the nonrecurring severance
and transaction costs recorded in conjunction with the IPALCO
pooling-of-interests transaction, and discontinued operations. Diluted earnings
per share, before such charges, were $1.35 for the year. Net income and diluted
earnings per share for the year, after all charges, were $273 million and
$0.51, respectively. For the year, revenues increased 24% to $9.3 billion. As a
result of the pooling-of-interests transaction, the results of operations of
AES for the periods ended December 31, 2000 have been restated to include
IPALCO.
For the quarter ended December 31, 2001, net income and diluted earnings per
share, before such charges, were $149 million and $0.28, respectively. Net
income and diluted earnings per share for the quarter, after all charges, were
$44 million and $0.08, respectively.
Barry J. Sharp, Chief Financial Officer, stated "Although 2001 provided several
challenges for us, including lower prices in the U.K. and rationing in Brazil,
we met our revised financial expectations. Several businesses in our global
portfolio performed better than expected this year including EDC in Venezuela,
Placerita in California, Haripur in Bangladesh, as well as our businesses in
Hungary and in the Dominican Republic."
Dennis W. Bakke, President and Chief Executive Officer, commented, "I am
pleased that we reported 2001 earnings at the high end of our recent guidance
for the full year. The people of AES have responded with innovation and
tenacity as they address difficult market conditions in certain parts of the
world. The long-term contract nature of many of our businesses provide valuable
protection to potential earnings volatility. As we start the New Year, I look
forward to sharing with investors our new organizational arrangement that we
announced earlier today. After 20 years of strong growth, I believe we are well
positioned for the future."
Update on Argentina Situation
Argentina is experiencing a significant political and economic crisis that has
resulted in significant changes in general economic policies and regulations as
well as specific changes in the energy sector. Over the past several weeks,
many new economic measures have been adopted by the Argentine government,
including abandoning the country's fixed dollar-to-peso exchange rate,
converting dollar denominated loans into pesos and placing restrictions on the
convertibility of the Argentine peso. The government has also adopted new
regulations in the energy sector that have the effect
of repealing US dollar denominated pricing under electricity tariffs as
prescribed in existing electricity distribution concessions in Argentina by
fixing all prices to consumers in pesos until June 30, 2002. In combination
these circumstances create significant uncertainty surrounding the performance,
cash flow and potential for profitability of the electricity industry in
Argentina, including the Argentine subsidiaries of AES.
AES has several subsidiaries in Argentina operating in both the competitive
supply and growth distribution segments of the electricity business. Eden, Edes
and Edelap are distribution companies that operate in the province of Buenos
Aires. Generating businesses include Alicura, Parana, CTSN, Rio Juramento and
several other smaller hydro facilities. These businesses are experiencing cash
flow shortfalls arising from the economic and regulatory changes described
earlier, and the majority of the businesses are in default on their project
financing arrangements. AES is not generally required to support the potential
cash flow or debt service obligations of these businesses.
The effects of the crisis are not expected to have a significant negative
impact on AES's overall liquidity, due primarily to the non-recourse financing
structure in place at most of AES's Argentine businesses. The effects of the
current circumstances on reported earnings are much more uncertain and
difficult to predict. AES's total contributed cash investment and retained
earnings in the competitive supply business in Argentina is approximately $575
million and the total similar investment in the distribution business is
approximately $465 million. Depending on the ultimate resolution of these
uncertainties, AES may be required in 2002 to record a material impairment loss
or write-off associated with the recorded carrying values of its investments,
including goodwill, although no such loss has been recorded to date.
Additionally, under current conditions, the Argentine businesses may also incur
operating losses during 2002. AES is currently investigating and pursuing
several potential alternatives to minimize the impacts on reported earnings. It
is possible, as AES pursues these alternatives, that future Argentine business
results may be reported as discontinued operations.
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED DECEMBER 31, 2001 AND 2000
-------------------------------------------------------------------------------
Quarter Quarter
Ended Ended
($ in millions, except per share amounts) 12/31/01 12/31/00
-------------------------------------------------------------------------------
REVENUES:
Sales and services $ 2,387 $ 2,117
OPERATING COSTS AND EXPENSES:
Cost of sales and services 1,705 1,532
Selling, general and administrative expenses 47 14
----------- ----------
Total operating costs and expenses 1,752 1,546
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OPERATING INCOME 635 571
OTHER INCOME AND (EXPENSE):
Interest expense, net (396) (276)
Other income 19 6
Equity in earnings of affiliates (before income tax) 50 156
Environmental fine - (17)
Gain on sale of assets - 31
Nonrecurring severance and transaction costs - (79)
----------- ----------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 308 392
Income tax provision 81 100
Minority interest 37 55
----------- ----------
INCOME FROM CONTINUING OPERATIONS 190 237
Loss from operations of discontinued components
(net of income taxes of $9 and $4, respectively) (146) (9)
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INCOME BEFORE EXTRAORDINARY ITEM 44 228
Extraordinary item, net of tax -
Early extinguishment of debt - (4)
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NET INCOME $ 44 $ 224
============ ==========
DILUTED EARNINGS PER SHARE:
Income from continuing operations $ 0.35 $ 0.46
Discontinued operations (0.27) (0.02)
Extraordinary item - (0.01)
----------- ----------
Total $ 0.08 $ 0.43
=========== ==========
Diluted weighted average
shares outstanding (in millions) 541 542
THE AES CORPORATION -- Supplemental Schedule (1)
CONSOLIDATED SCHEDULE
(Excluding Brazilian affiliates foreign currency effects, effects of FAS No. 133, nonrecurring
citems, discontinued operations and extraordinary items)(1)
FOR THE PERIODS ENDED DECEMBER 31, 2001 AND 2000
----------------------------------------------------------------------------------------------------
Quarter Quarter
Ended Ended
($ in millions, except per share amounts) 12/31/01 12/31/00
----------------------------------------------------------------------------------------------------
REVENUES:
Sales and services $ 2,387 $ 2,117
OPERATING COSTS AND EXPENSES:
Cost of sales and services 1,705 1,532
Selling, general and administrative expenses 47 14
------------ ------------
Total operating costs and expenses 1,752 1,546
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OPERATING INCOME 635 571
OTHER INCOME AND (EXPENSE), Excluding Brazilian affiliates
foreign currency effects, effects of FAS No. 133, nonrecurring items,
discontinued operations and extraordinary items:
Interest expense, net (402) (276)
Other income 38 6
Equity in (loss) earnings of affiliates (before income tax) (25) 192
------------ ------------
INCOME BEFORE TAXES AND MINORITY INTEREST, Excluding
Brazilian affiliates foreign currency effects, effects of FAS No. 133,
nonrecurring items, discontinued operations and extraordinary items: 246 493
Income tax provision 60 128
Minority interest 37 55
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NET INCOME, Excluding Brazilian affiliates foreign currency effects,
effects of FAS No. 133, nonrecurring items, discontinued operations
and extraordinary items: $ 149 $ 310
============ ============
DILUTED EARNINGS PER SHARE, Excluding Brazilian affiliates
foreign currency effects, effects of FAS No. 133, nonrecurring items,
discontinued operations and extraordinary items: $ 0.28 $ 0.59
============ ============
Diluted weighted average
shares outstanding (in millions) 541 552
(1) Basis of presentation - This schedule presents, on a proforma basis, the results of operations
of AES excluding the aggregate (both subsidiaries and affiliates) Brazilian affiliates foreign
currency gains of approximately $48 million after income tax, or $0.09 per share in 2001 and
losses of approximately $24 million after income tax, or $0.04 per share in 2000, mark to
market losses from FAS No. 133 of approximately $7 million after income tax, or $0.02 per share
in 2001 and nonrecurring charges, including transaction and severance costs related to the
IPALCO transaction of approximately $52 million after income tax, or $0.09 per share in 2000, a
gain on a sale of assets by IPALCO of $20 million after income taxes, or $0.04 per share in
2000 and an environmental fine of $17 million after income taxes, or $0.04 per share in 2000.
This schedule also excludes the loss on discontinued operations of $146 million in 2001 and $9
million in 2000 and an extraordinary loss of approximately $4 million in 2000. Discontinued
operations consists primarily of Termocandelaria, Ib Valley and several telecommunications
businesses in Brazil and the U.S.
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED DECEMBER 31, 2001 AND 2000
-----------------------------------------------------------------------------
Year Year
Ended Ended
($ in millions, except per share amounts) 12/31/01 12/31/00
-----------------------------------------------------------------------------
REVENUES:
Sales and services $ 9,327 $ 7,534
OPERATING COSTS AND EXPENSES:
Cost of sales and services 7,025 5,539
Selling, general and administrative expenses 120 82
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Total operating costs and expenses 7,145 5,621
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OPERATING INCOME 2,182 1,913
OTHER INCOME AND (EXPENSE):
Interest expense, net (1,465) (1,138)
Other income 41 31
Equity in earnings of affiliates (before income tax) 175 475
Gain on sale of investment - 112
Gain on sale of assets - 31
Environmental fine - (17)
Nonrecurring severance and transaction costs (131) (79)
---------- ----------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 802 1,328
Income tax provision 230 377
Minority interest 105 124
---------- ----------
INCOME FROM CONTINUING OPERATIONS 467 827
Loss from operations of discontinued components
(net of income taxes of $ 35 and $11, respectively) (194) (21)
---------- ----------
INCOME BEFORE EXTRAORDINARY ITEM 273 806
Extraordinary item, net of tax -
Early extinguishment of debt - (11)
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NET INCOME $ 273 $ 795
========== ==========
DILUTED EARNINGS PER SHARE:
Income from continuing operations $ 0.87 $ 1.65
Discontinued operations (0.36) (0.04)
Extraordinary item - (0.02)
---------- ----------
Total $ 0.51 $ 1.59
========== ==========
Diluted weighted average
shares outstanding (in millions) 543 514
THE AES CORPORATION --- Supplemental Schedule (1)
CONSOLIDATED SCHEDULE
(Excluding Brazilian affiliates foreign currency effects, effects of FAS No.
133, nonrecurring items, discontinued operations and extraordinary items)(1)
FOR THE PERIODS ENDED DECEMBER 31, 2001 AND 2000
----------------------------------------------------------------------------------------------
Year Year
Ended Ended
($ in millions, except per share amounts) 12/31/01 12/31/00
----------------------------------------------------------------------------------------------
REVENUES:
Sales and services $ 9,327 $ 7,534
OPERATING COSTS AND EXPENSES:
Cost of sales and services 7,025 5,539
Selling, general and administrative expenses 120 82
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Total operating costs and expenses 7,145 5,621
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OPERATING INCOME 2,182 1,913
OTHER INCOME AND (EXPENSE), Excluding Brazilian affiliates
foreign currency effects, effects of FAS No. 133, nonrecurring items,
discontinued operations and extraordinary items:
Interest expense, net (1,430) (1,138)
Other income 61 31
Equity in earnings of affiliates (before income tax) 386 539
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INCOME BEFORE TAXES AND MINORITY INTEREST, Excluding
Brazilian affiliates foreign currency effects, effects of FAS No. 133,
nonrecurring items, discontinued operations and extraordinary items: 1,199 1,345
Income tax provision 367 376
Minority interest 105 124
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NET INCOME, Excluding Brazilian affiliates foreign currency effects,
effects of FAS No. 133, nonrecurring items, discontinued operations
and extraordinary items: $ 727 $ 845
======= =======
DILUTED EARNINGS PER SHARE, Excluding Brazilian affiliates
foreign currency effects, effects of FAS No. 133, nonrecurring items,
discontinued operations and extraordinary items: $ 1.35 $ 1.69
====== =======
Diluted weighted average
shares outstanding (in millions) 543 514
=== ===
(1) Basis of presentation - This schedule presents, on a proforma basis, the
results of operations of AES excluding the aggregate (both subsidiaries
and affiliates) Brazilian affiliates foreign currency losses of
approximately $139 million after income tax, or $0.25 per share in 2001
and approximately $42 million after income tax, or $0.08 per share in
2000, mark to market losses from FAS No. 133 of approximately $36 million
after income tax, or $0.07 per share in 2001, and nonrecurring items,
including transaction and severance costs related to the IPALCO
acquisition of $85 million after income tax, or $0.16 per share in 2001,
and approximately $52 million after income tax, or $0.10 per share in
2000, a gain on the sale of an investment held by IPALCO of $73 million
after income tax, or $0.14 per share in 2000, a gain on a sale of assets
by IPALCO of $20 million after income tax, or $.04 per share in 2000 and
an environmental fine of $17 million after tax, or $.04 per share in 2000.
This schedule also excludes the loss on discontinued operations of $194
million in 2001 and $21 million in 2000 and an extraordinary loss of
approximately $11 million in 2000. Discontinued operations consists
primarily of Termocandelaria, Ib Valley, Power Direct and several
telecommunications businesses in Brazil and the U.S.
The AES Corporation
Unaudited Supplemental Data
---------------------2000-------------------- ---------------------2001--------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year
------- ------- ------- ------- ---- ------- ------- ------- ------- ----
GEOGRAPHIC - % of Total
North America
Revenues 45% 47% 44% 42% 45% 38% 37% 45% 36% 39%
Income before Taxes (1) 37% 41% 42% 35% 38% 41% 27% 56% 39% 40%
Caribbean
Revenues 7% 11% 17% 21% 15% 21% 22% 19% 18% 20%
Income before Taxes (1) 2% 7% 13% 20% 11% 18% 31% 15% 31% 23%
South America
Revenues 17% 16% 16% 14% 15% 17% 20% 17% 21% 19%
Income before Taxes (1) 26% 36% 33% 34% 32% 32% 36% 20% 22% 28%
Europe/Africa
Revenues 22% 17% 16% 15% 17% 15% 13% 15% 17% 15%
Income before Taxes (1) 26% 8% 6% 7% 12% 8% 1% 6% 7% 6%
Asia
Revenues 9% 9% 7% 8% 8% 9% 8% 4% 8% 7%
Income before Taxes (1) 9% 8% 6% 4% 7% 1% 5% 3% 1% 3%
SEGMENTS - % of Total
Contract Generation
Revenues 23% 24% 23% 23% 23% 27% 28% 26% 25% 27%
Operating Margin (2) 40% 47% 38% 32% 38% 36% 35% 27% 43% 36%
Income before Taxes (1) 40% 39% 29% 21% 31% 32% 20% 17% 52% 30%
Competitive Supply
Revenues 36% 35% 31% 28% 32% 27% 26% 33% 31% 29%
Operating Margin (2) 30% 28% 28% 24% 28% 22% 17% 24% 14% 19%
Income before Taxes (1) 29% 16% 21% 17% 21% 11% 3% 22% (1)% 9%
Large Utilities
Revenues 23% 24% 31% 32% 28% 28% 27% 27% 22% 26%
Operating Margin (2) 18% 22% 30% 34% 27% 31% 37% 37% 26% 32%
Income before Taxes (1) 28% 46% 47% 58% 46% 50% 71% 58% 23% 51%
Growth Distribution Businesses
Revenues 18% 17% 15% 17% 17% 18% 19% 14% 22% 18%
Operating Margin (2) 12% 3% 4% 10% 7% 11% 11% 12% 17% 13%
Income before Taxes (1) 3% (1)% 3% 4% 2% 7% 6% 3% 26% 10%
FINANCIAL HIGHLIGHTS - million $, except Total Assets in billion $
Revenues $1,692 $1,743 $1,982 $2,117 $7,534 $2,494 $2,184 $2,262 $2,387 $9,327
Income before Taxes (1) $378 $305 $403 $542 $1,628 $495 $420 $376 $368 $1,659
Net Income Excluding
Extraordinary and Other
Item(3) $189 $160 $186 $310 $845 $237 $184 $157 $149 $727
Total Assets (billions) $26 $31 $32 $33 $33 $36 $36 $36 $37 $37
Deprec./Amort. $142 $163 $196 $199 $700 $205 $209 $222 $223 $859
(1) Income before taxes excludes the Corporate and Business Development
segment. The following items are included in the Corporate and Business
Development segment: corporate interest, other corporate costs, business
development expenses, Brazilian affiliates foreign currency effects,
effects of FAS No. 133, discontinued operations and nonrecurring items.
(2) Operating Margin is revenues reduced by cost of sales, depreciation and
amortization and other operating expenses.
(3) Net Income excludes Brazilian affiliates foreign currency effects, effects
of FAS No. 133, discontinued operations, nonrecurring and extraordinary
items.
The AES Corporation
Capital Resources and Other Balance Sheet Data
(unaudited, $ in billions)
December 31,
-------------------------
Capitalization: 2001 2000
-------------------------
Recourse debt $ 5.40 $ 3.46
Non-recourse debt 16.86 15.33
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Total debt 22.26 18.79
Preferred Securities 0.98 1.23
Minority Interest 1.43 1.44
Stockholders' equity 5.52 5.54
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Total capitalization $ 30.19 $ 27.00
======== =======
Selected Balance Sheet Data by Geographic Region:
Property, Plant Total Non-recourse
December 31, 2001 & Equipment Assets Debt
--------------- ------- ------------
North America 32% 28% 31%
Caribbean 20% 18% 19%
South America 20% 28% 26%
Europe/Africa 21% 18% 18%
Asia 7% 7% 6%
Corporate - 1% -
December 31, 2000
North America 31% 28% 32%
Caribbean 20% 18% 18%
South America 19% 27% 26%
Europe/Africa 24% 18% 19%
Asia 6% 8% 5%
Corporate - 1% -
Selected Balance Sheet Data by Line of Business:
Property, Plant Total Non-recourse
December 31, 2001 & Equipment Assets Debt
--------------- ------- ------------
Contract Generation 36% 34% 38%
Competitive Supply 34% 28% 25%
Large Utilities 21% 25% 29%
Growth Distribution Businesses 9% 12% 8%
Corporate - 1% -
December 31, 2000
Contract Generation 33% 31% 35%
Competitive Supply 33% 26% 28%
Large Utilities 25% 30% 30%
Growth Distribution Businesses 9% 12% 7%
Corporate - 1% -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE AES CORPORATION
Date: February 5, 2002 By /s/ William Luraschi
------------------------
William Luraschi
(signing officer)