Detailed Business Review and Long-Term Outlook
to be Presented at Investor Day on Monday,
May 8, 2023
Strategic Accomplishments
- On track to complete 2023 construction projects of more than 3
GW of renewables
- AES Ohio signed a comprehensive settlement for its Electric
Security Plan (ESP4), providing the
regulatory foundation necessary to drive future growth
- Announced next decarbonization milestone with the agreement to
terminate the PPA for the 205 MW Warrior Run coal plant in
Maryland, for a total payments of
$357 million
- Signed agreements to extend the operation of 1.4 GW of gas
generation at the Southland legacy units in Southern California for three more years
Q1 2023 Financial Highlights
- Diluted EPS of $0.21, compared to
$0.16 in Q1 2022
- Adjusted EPS1 of $0.22, compared to $0.21 in Q1 2022
- Net Income of $189 million,
compared to $171 million in Q1
2022
- Added Adjusted EBITDA2 metric to disclosures
- Adjusted EBITDA2 of $628
million, compared to $621
million in Q1 2022
Financial Position and Outlook
- Reaffirming 2023 guidance for Adjusted EPS1 of
$1.65 to $1.75 and 7% to 9% annualized growth
target1 through 2025, off a base year of 2020
ARLINGTON, Va., May 4, 2023
/PRNewswire/ -- The AES Corporation (NYSE: AES) today reported
financial results for the quarter ended March 31, 2023.
"Our first quarter results put us on track to meet our 2023
guidance and longer-term growth rates," said Andrés Gluski, AES
President and Chief Executive Officer. "The settlement
agreement of AES Ohio's rate case and the termination of Warrior
Run's thermal PPA for $357 million,
materially advance our strategic objectives of growing our US
utilities by double digits and decarbonizing our portfolio. I
am also pleased to announce our four new Strategic Business Units,
which better reflect the greatly simplified company that AES is
today."
"I am excited about our financial performance and strategic
accomplishments so far this year, which position us well to achieve
or exceed our goals in this year and beyond," said Stephen Coughlin, AES Executive Vice President
and Chief Financial Officer. "At our Investor Day this
Monday, May 8th, we will provide
greater detail around our new SBUs, new metrics, and our
longer-term growth expectations."
New Strategic Business Units (SBU)
AES is a diversified power generation and utility company
organized into four SBUs: Renewables (solar, wind, energy storage,
hydro, biomass and landfill gas); Utilities (AES Indiana, AES Ohio
and AES El Salvador); Energy Infrastructure3 (natural
gas, LNG, coal, pet coke, diesel and oil); and New Energy
Technologies (the development of green hydrogen, Fluence, Uplight
and 5B).
Q1 2023 Financial Results
First quarter 2023 Net Income was $189
million, an increase of $18
million compared to first quarter 2022. This increase
is the result of favorable contributions from the Energy
Infrastructure and New Energy Technology Strategic Business Units
(SBU), partially offset by lower contributions from the Utilities
and Renewables SBUs.
First quarter 2023 Adjusted EBITDA2 (a non-GAAP
financial measure) was $628 million,
an increase of $7 million compared to
first quarter 2022, primarily reflecting favorable wind and
hydrology conditions, and new businesses at the Renewables SBU,
favorable LNG transactions at the Energy Infrastructure SBU, and
lower losses at the New Energy Technologies SBU due to reduced
shipping constraints and costs, as well as fewer project
delays. These positive drivers were partially offset by
unfavorable weather conditions impacting demand at the Utilities
SBU.
First quarter 2023 Diluted Earnings Per Share from Continuing
Operations (Diluted EPS) was $0.21,
an increase of $0.05 compared to
first quarter 2022, primarily reflecting favorable LNG transactions
at the Energy Infrastructure SBU, new businesses at the Renewables
SBU, and lower losses of affiliates at the New Energy Technologies
SBU, partially offset by lower margins due to unfavorable weather
conditions at the Utilities SBU.
First quarter 2023 Adjusted Earnings Per Share1
(Adjusted EPS, a non-GAAP financial measure) was $0.22, an increase of $0.01, compared to first quarter 2022, mainly
driven by the same drivers above, adjusted for Noncontrolling
Interests, and a lower adjusted tax rate.
Strategic Accomplishments
- As of the end of the first quarter of 2023, the Company's
backlog, which includes projects with signed contracts, but which
are not yet operational, was 11,932 MW, including 5,627 MW under
construction. This is compared to a 12,179 MW backlog as of
year-end 2022.
- In April 2023, AES Ohio signed a
comprehensive settlement with the Public Utilities Commission of
Ohio (PUCO) for its Electric
Security Plan (ESP4), providing the
regulatory foundation necessary to enable future growth. The
settlement is expected to be approved by the PUCO in the third
quarter of 2023.
- In April 2023, the Company
announced its next decarbonization milestone with the agreement to
terminate the PPA for the 205 MW Warrior Run coal plant in
Maryland, for a total
consideration of $357 million,
subject to approval by the Maryland Public Service Commission
(PSC). AES will continue to operate the plant through at least
May 2024, after which the Company
sees interesting opportunities to repurpose the site for low carbon
solutions that will continue to serve local communities.
- In April 2023, the Company signed
agreements for three-year extensions of 1.4 GW of gas generation at
the Southland legacy units in Southern
California. The extension will help meet the State of California's grid reliability needs
while supporting its decarbonization goals.
Guidance and Expectations1
The Company is reaffirming its 7% to 9% annualized growth rate
target1 through 2025, from a base year of 2020.
The Company is reaffirming its 2023 guidance for Adjusted
EPS1 of $1.65 to
$1.75. Growth in 2023 is
expected to be primarily driven by 3.4 GW of new renewables
expected to come online. This growth is expected to be
partially offset by lower margins from the Company's LNG business,
due to normalization of LNG prices and the roll-off of a gas supply
contract, lower contract margins in Chile, and higher interest expense in
Colombia. This guidance also incorporates the impact of 0.6
GW of new renewables likely coming online in 2024, instead of
2023.
The Company's 2023 guidance is based on foreign currency and
commodity forward curves as of March 31,
2023.
Non-GAAP Financial Measures
See Non-GAAP Measures for definitions of Adjusted Earnings Per
Share, Adjusted Pre-Tax Contribution, Adjusted EBITDA, as well as
reconciliations to the most comparable GAAP financial measures.
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.
First Quarter Financial Review Conference Call
Information
AES will host a conference call on Friday, May 5, 2023 at 10:00 a.m. Eastern Time (ET). Interested
parties may listen to the teleconference by dialing 1-833-470-1428
at least ten minutes before the start of the call. International
callers should dial +1-929-526-1599. The Participant Access
Code for this call is 382953. 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.
2023 Investor Day Webcast Information
AES will hold an Investor Day on Monday,
May 8, 2023 at 9:00 a.m. Eastern
Time (ET) in New York City. At the event, AES
Management will deliver prepared remarks and host a question and
answer session with analysts and investors. Interested
parties may access the live webcast and presentation materials at
www.aes.com by selecting "Investors" and then "Upcoming Events"
prior to the start of the event. A replay will be available
shortly after the conclusion of the event at www.aes.com by
selecting "Investors" and then "Presentations and Webcasts."
___________________
|
1
|
Adjusted EPS is a
non-GAAP financial measure. See attached "Non-GAAP Measures"
for definition of Adjusted EPS and a description of the adjustments
to reconcile Adjusted EPS to Diluted EPS for the quarter ended
March 31, 2023. The Company is not able to provide a
corresponding GAAP equivalent or reconciliation for its Adjusted
EPS guidance without unreasonable effort.
|
2
|
Adjusted EBITDA is a
non-GAAP financial metric. See attached "Non-GAAP Measures"
for definition of Adjusted EBITDA and a description of the
adjustments to reconcile Adjusted EBITDA to Net Income for the
quarter ended March 31, 2023. The Company is not able to
provide a corresponding GAAP equivalent or reconciliation for its
Adjusted EBITDA guidance without unreasonable effort.
|
3
|
The Company's
businesses in Chile, which have a mix of generation sources,
including renewables, are also included within the Energy
Infrastructure SBU, as the generation from all sources is pooled to
service existing PPAs.
|
About AES
The AES Corporation (NYSE: AES) is a Fortune 500 global power
company accelerating the future of energy. Together with our
many stakeholders, we're improving lives by delivering the greener,
smarter energy solutions the world needs. Our diverse
workforce is committed to continuous innovation and operational
excellence, while partnering with our customers on their strategic
energy transitions and continuing to meet their energy needs
today. For more information, visit www.aes.com.
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 expectations regarding 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, rates of
return consistent with prior experience and the COVID-19
pandemic.
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' 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, except where required by
law.
Any Stockholder who desires a copy of the Company's 2022 Annual
Report on Form 10-K filed March 1, 2023 with the SEC may
obtain a copy (excluding the exhibits thereto) 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 Annual Report on Form 10-K may be
obtained by visiting the Company's website at www.aes.com.
Website Disclosure
AES uses its website, including its quarterly updates, as
channels of distribution of Company information. The
information AES posts through these channels may be deemed
material. Accordingly, investors should monitor our website,
in addition to following AES' press releases, quarterly SEC filings
and public conference calls and webcasts. In addition, you
may automatically receive e-mail alerts and other information about
AES when you enroll your e-mail address by visiting the "Subscribe
to Alerts" page of AES' Investors website. The contents of
AES' website, including its quarterly updates, are not, however,
incorporated by reference into this release.
THE AES CORPORATION Condensed
Consolidated Statements of Operations (Unaudited)
|
|
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
|
(in millions, except
per share amounts)
|
Revenue:
|
|
|
|
Non-Regulated
|
$
2,287
|
|
$
2,017
|
Regulated
|
952
|
|
835
|
Total
revenue
|
3,239
|
|
2,852
|
Cost of
Sales:
|
|
|
|
Non-Regulated
|
(1,797)
|
|
(1,617)
|
Regulated
|
(848)
|
|
(705)
|
Total cost of
sales
|
(2,645)
|
|
(2,322)
|
Operating
margin
|
594
|
|
530
|
General and
administrative expenses
|
(55)
|
|
(52)
|
Interest
expense
|
(330)
|
|
(258)
|
Interest
income
|
123
|
|
75
|
Loss on extinguishment
of debt
|
(1)
|
|
(6)
|
Other
expense
|
(14)
|
|
(12)
|
Other
income
|
10
|
|
6
|
Gain on disposal and
sale of business interests
|
—
|
|
1
|
Asset impairment
expense
|
(20)
|
|
(1)
|
Foreign currency
transaction losses
|
(42)
|
|
(19)
|
INCOME FROM CONTINUING
OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF
AFFILIATES
|
265
|
|
264
|
Income tax
expense
|
(72)
|
|
(60)
|
Net equity in losses
of affiliates
|
(4)
|
|
(33)
|
NET INCOME
|
189
|
|
171
|
Less: Net income
attributable to noncontrolling interests and redeemable stock of
subsidiaries
|
(38)
|
|
(56)
|
NET INCOME
ATTRIBUTABLE TO THE AES CORPORATION
|
$
151
|
|
$
115
|
BASIC EARNINGS PER
SHARE:
|
|
|
|
NET INCOME
ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS
|
$
0.22
|
|
$
0.17
|
DILUTED EARNINGS PER
SHARE:
|
|
|
|
NET INCOME
ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS
|
$
0.21
|
|
$
0.16
|
DILUTED SHARES
OUTSTANDING
|
712
|
|
711
|
THE AES
CORPORATION
|
Strategic Business
Unit (SBU) Information
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
(in
millions)
|
2023
|
|
2022
|
REVENUE
|
|
|
|
Renewables
SBU
|
$
495
|
|
$
420
|
Utilities
SBU
|
971
|
|
859
|
Energy Infrastructure
SBU
|
1,724
|
|
1,607
|
New Energy
Technologies SBU
|
74
|
|
—
|
Corporate and
Other
|
27
|
|
23
|
Eliminations
|
(52)
|
|
(57)
|
Total
Revenue
|
$
3,239
|
|
$
2,852
|
THE AES CORPORATION Condensed
Consolidated Balance Sheets (Unaudited)
|
|
|
March 31,
2023
|
|
December 31,
2022
|
|
(in millions, except
share
and per share
data)
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
1,441
|
|
$
1,374
|
Restricted
cash
|
456
|
|
536
|
Short-term
investments
|
822
|
|
730
|
Accounts receivable,
net of allowance for doubtful accounts of $5 and $5,
respectively
|
1,859
|
|
1,799
|
Inventory
|
864
|
|
1,055
|
Prepaid
expenses
|
167
|
|
98
|
Other current
assets
|
1,523
|
|
1,533
|
Current held-for-sale
assets
|
511
|
|
518
|
Total current
assets
|
7,643
|
|
7,643
|
NONCURRENT
ASSETS
|
|
|
|
Property, Plant and
Equipment:
|
|
|
|
Land
|
477
|
|
470
|
Electric generation,
distribution assets and other
|
27,054
|
|
26,599
|
Accumulated
depreciation
|
(8,882)
|
|
(8,651)
|
Construction in
progress
|
5,564
|
|
4,621
|
Property, plant and
equipment, net
|
24,213
|
|
23,039
|
Other
Assets:
|
|
|
|
Investments in and
advances to affiliates
|
768
|
|
952
|
Debt service reserves
and other deposits
|
180
|
|
177
|
Goodwill
|
362
|
|
362
|
Other intangible
assets, net of accumulated amortization of $455 and $434,
respectively
|
1,862
|
|
1,841
|
Deferred income
taxes
|
324
|
|
319
|
Loan receivable, net
of allowance of $25 and $26, respectively
|
1,044
|
|
1,051
|
Other noncurrent
assets, net of allowance of $46 and $51, respectively
|
2,961
|
|
2,979
|
Total other
assets
|
7,501
|
|
7,681
|
TOTAL
ASSETS
|
$
39,357
|
|
$
38,363
|
LIABILITIES AND
EQUITY
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Accounts
payable
|
$
1,505
|
|
$
1,730
|
Accrued
interest
|
296
|
|
249
|
Accrued non-income
taxes
|
289
|
|
249
|
Accrued and other
liabilities
|
2,103
|
|
2,151
|
Recourse
debt
|
500
|
|
—
|
Non-recourse debt,
including $314 and $416, respectively, related to variable interest
entities
|
1,737
|
|
1,758
|
Current held-for-sale
liabilities
|
346
|
|
354
|
Total current
liabilities
|
6,776
|
|
6,491
|
NONCURRENT
LIABILITIES
|
|
|
|
Recourse
debt
|
4,081
|
|
3,894
|
Non-recourse debt,
including $2,413 and $2,295, respectively, related to variable
interest entities
|
18,513
|
|
17,846
|
Deferred income
taxes
|
1,110
|
|
1,139
|
Other noncurrent
liabilities
|
3,131
|
|
3,168
|
Total noncurrent
liabilities
|
26,835
|
|
26,047
|
Commitments and
Contingencies
|
|
|
|
Redeemable stock of
subsidiaries
|
1,283
|
|
1,321
|
EQUITY
|
|
|
|
THE AES CORPORATION
STOCKHOLDERS' EQUITY
|
|
|
|
Preferred stock
(without par value, 50,000,000 shares authorized; 1,043,050 issued
and
outstanding at March 31, 2023 and December 31, 2022)
|
838
|
|
838
|
Common stock ($0.01
par value, 1,200,000,000 shares authorized; 818,808,272 issued
and
669,335,716 outstanding at March 31, 2023 and 818,790,001 issued
and 668,743,464
outstanding at December 31, 2022)
|
8
|
|
8
|
Additional paid-in
capital
|
6,557
|
|
6,688
|
Accumulated
deficit
|
(1,484)
|
|
(1,635)
|
Accumulated other
comprehensive loss
|
(1,742)
|
|
(1,640)
|
Treasury stock, at
cost (149,472,556 and 150,046,537 shares at March 31, 2023
and December 31, 2022, respectively)
|
(1,815)
|
|
(1,822)
|
Total AES Corporation
stockholders' equity
|
2,362
|
|
2,437
|
NONCONTROLLING
INTERESTS
|
2,101
|
|
2,067
|
Total
equity
|
4,463
|
|
4,504
|
TOTAL LIABILITIES AND
EQUITY
|
$
39,357
|
|
$
38,363
|
THE AES CORPORATION Condensed Consolidated
Statements of Cash Flows (Unaudited)
|
|
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
|
(in
millions)
|
OPERATING
ACTIVITIES:
|
|
|
|
Net income
|
$
189
|
|
$
171
|
Adjustments to net
income:
|
|
|
|
Depreciation and
amortization
|
273
|
|
270
|
Gain on disposal and
sale of business interests
|
—
|
|
(1)
|
Impairment
expense
|
20
|
|
1
|
Deferred income
taxes
|
(11)
|
|
(7)
|
Loss on extinguishment
of debt
|
1
|
|
6
|
Loss of affiliates,
net of dividends
|
4
|
|
33
|
Emissions allowance
expense
|
89
|
|
118
|
Other
|
51
|
|
54
|
Changes in operating
assets and liabilities:
|
|
|
|
(Increase) decrease in
accounts receivable
|
(62)
|
|
(77)
|
(Increase) decrease in
inventory
|
191
|
|
(44)
|
(Increase) decrease in
prepaid expenses and other current assets
|
64
|
|
59
|
(Increase) decrease in
other assets
|
50
|
|
(10)
|
Increase (decrease) in
accounts payable and other current liabilities
|
(293)
|
|
(124)
|
Increase (decrease) in
income tax payables, net and other tax payables
|
(7)
|
|
7
|
Increase (decrease) in
deferred income
|
21
|
|
10
|
Increase (decrease) in
other liabilities
|
45
|
|
(9)
|
Net cash provided by
operating activities
|
625
|
|
457
|
INVESTING
ACTIVITIES:
|
|
|
|
Capital
expenditures
|
(1,551)
|
|
(766)
|
Proceeds from the sale
of business interests, net of cash and restricted cash
sold
|
98
|
|
1
|
Sale of short-term
investments
|
356
|
|
197
|
Purchase of short-term
investments
|
(418)
|
|
(345)
|
Contributions and
loans to equity affiliates
|
(20)
|
|
(93)
|
Purchase of emissions
allowances
|
(78)
|
|
(136)
|
Other
investing
|
(11)
|
|
(11)
|
Net cash used in
investing activities
|
(1,624)
|
|
(1,153)
|
FINANCING
ACTIVITIES:
|
|
|
|
Borrowings under the
revolving credit facilities and commercial paper program
|
2,335
|
|
1,193
|
Repayments under the
revolving credit facilities and commercial paper program
|
(1,625)
|
|
(715)
|
Issuance of recourse
debt
|
500
|
|
—
|
Repayments of recourse
debt
|
—
|
|
(29)
|
Issuance of
non-recourse debt
|
690
|
|
1,710
|
Repayments of
non-recourse debt
|
(660)
|
|
(788)
|
Payments for financing
fees
|
(18)
|
|
(27)
|
Purchases under
supplier financing arrangements
|
529
|
|
93
|
Repayments of
obligations under supplier financing arrangements
|
(587)
|
|
(50)
|
Distributions to
noncontrolling interests
|
(47)
|
|
(47)
|
Acquisitions of
noncontrolling interests
|
—
|
|
(535)
|
Contributions from
noncontrolling interests
|
18
|
|
8
|
Sales to
noncontrolling interests
|
—
|
|
48
|
Issuance of preferred
shares in subsidiaries
|
3
|
|
60
|
Dividends paid on AES
common stock
|
(111)
|
|
(105)
|
Payments for financed
capital expenditures
|
(4)
|
|
(4)
|
Other
financing
|
(7)
|
|
6
|
Net cash provided by
financing activities
|
1,016
|
|
818
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(18)
|
|
20
|
Increase in cash, cash
equivalents and restricted cash of held-for-sale
businesses
|
(9)
|
|
(64)
|
Total increase
(decrease) in cash, cash equivalents and restricted cash
|
(10)
|
|
78
|
Cash, cash equivalents
and restricted cash, beginning
|
2,087
|
|
1,484
|
Cash, cash equivalents
and restricted cash, ending
|
$
2,077
|
|
$
1,562
|
SUPPLEMENTAL
DISCLOSURES:
|
|
|
|
Cash payments for
interest, net of amounts capitalized
|
$
252
|
|
$
185
|
Cash payments for
income taxes, net of refunds
|
53
|
|
46
|
SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
Dividends declared but
not yet paid
|
111
|
|
105
|
THE AES CORPORATION
NON-GAAP FINANCIAL MEASURES
(Unaudited)
RECONCILIATION OF ADJUSTED EBITDA, ADJUSTED PTC AND ADJUSTED
EPS
EBITDA is defined as earnings before interest income and
expense, taxes, depreciation and amortization. Adjusted EBITDA is
defined as EBITDA excluding the impact of NCI and interest, taxes,
depreciation and amortization of our equity affiliates, and adding
back interest income recognized under service concession
arrangements; 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 gains and losses recognized at
commencement of sales-type leases; (d) losses due to impairments;
(e) gains, losses and costs due to the early retirement of debt;
and (f) net gains at Angamos, one of our businesses in the Energy
Infrastructure SBU, associated with the early contract terminations
with Minera Escondida and Minera Spence.
The GAAP measure most comparable to EBITDA and Adjusted EBITDA
is net income. We believe that EBITDA and Adjusted EBITDA better
reflect the underlying business performance of the Company.
Adjusted EBITDA is the most relevant measure considered in the
Company's internal evaluation of the financial performance of its
segments. 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, strategic
decisions to dispose of or acquire business interests or retire
debt, the non-recurring nature of the impact of the early contract
terminations at Angamos, and the variability of allocations of
earnings to tax equity investors, which affect results in a given
period or periods. In addition, each of these metrics represent 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. EBITDA and Adjusted EBITDA should
not be construed as alternatives to net income, which is determined
in accordance with GAAP.
|
|
Three Months Ended
March 31,
|
Reconciliation of
Adjusted EBITDA (in millions)
|
|
2023
|
|
2022
|
Net
income
|
|
$
189
|
|
$
171
|
Income tax
expense
|
|
72
|
|
60
|
Interest
expense
|
|
330
|
|
258
|
Interest
income
|
|
(123)
|
|
(75)
|
Depreciation and
amortization
|
|
273
|
|
270
|
EBITDA
|
|
$
741
|
|
$
684
|
Less: Adjustment for
noncontrolling interests and redeemable stock of subsidiaries
(1)
|
|
(170)
|
|
(156)
|
Less: Income tax
expense (benefit), interest expense (income) and depreciation and
amortization from equity affiliates
|
|
39
|
|
34
|
Interest income
recognized under service concession arrangements
|
|
18
|
|
19
|
Unrealized derivative
and equity securities losses (gains)
|
|
(39)
|
|
42
|
Unrealized foreign
currency losses (gains)
|
|
32
|
|
(18)
|
Disposition/acquisition losses
|
|
(3)
|
|
9
|
Impairment
losses
|
|
9
|
|
1
|
Loss on extinguishment
of debt
|
|
1
|
|
6
|
Adjusted
EBITDA
|
|
$
628
|
|
$
621
|
_______________________________
|
(1)
|
The allocation of
earnings to tax equity investors from both consolidated entities
and equity affiliates is removed from Adjusted EBITDA.
|
|
|
|
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, and gains and losses recognized at
commencement of sales-type leases; (d) losses due to
impairments; (e) gains, losses, and costs due to the early
retirement of debt; and (f) net gains at Angamos, one of our
businesses in the Energy Infrastructure SBU, associated with
the early contract terminations
with Minera Escondida and Minera Spence.
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, and gains and losses recognized at commencement of
sales-type leases; (d) losses due to impairments;
(e) gains, losses and costs due to the early retirement of
debt; (f) net gains at Angamos, one of our businesses in the
Energy Infrastructure SBU, associated with the early contract
terminations
with Minera Escondida and Minera Spence;
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, including the 2021
tax benefit on reversal of uncertain tax positions effectively
settled upon the closure of the Company's U.S. tax return
exam.
|
|
|
|
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, strategic decisions to dispose of or acquire business
interests or retire debt, and the non-recurring nature of the
impact of the early contract terminations at Angamos, 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, 2023
|
|
Three Months
Ended
March 31, 2022
|
|
|
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
|
$ 151
|
|
$ 0.21
|
|
$ 115
|
|
$ 0.16
|
|
Add: Income tax expense
from continuing operations attributable to AES
|
51
|
|
|
|
50
|
|
|
|
Pre-tax
contribution
|
$ 202
|
|
|
|
$ 165
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
Unrealized derivative
and equity securities losses (gains)
|
$ (39)
|
|
$
(0.06)
|
(2)
|
$
41
|
|
$ 0.06
|
(3)
|
Unrealized foreign
currency losses (gains)
|
31
|
|
0.04
|
(4)
|
(19)
|
|
(0.02)
|
(5)
|
Disposition/acquisition
losses
|
(3)
|
|
—
|
|
9
|
|
0.01
|
|
Impairment
losses
|
9
|
|
0.01
|
|
1
|
|
—
|
|
Loss on extinguishment
of debt
|
4
|
|
0.01
|
|
10
|
|
0.01
|
|
Less: Net income tax
benefit
|
|
|
0.01
|
|
|
|
(0.01)
|
|
Adjusted PTC and
Adjusted EPS
|
$ 204
|
|
$ 0.22
|
|
$ 207
|
|
$ 0.21
|
|
_____________________________
|
(1)
|
NCI is defined as
Noncontrolling Interests.
|
(2)
|
Amount primarily
relates to unrealized derivative losses at Energy Infrastructure
SBU of $48 million, or $0.07 per share.
|
(3)
|
Amount primarily
relates to unrealized commodity derivative losses at New York Wind
of $20 million, or $0.03 per share, and unrealized foreign currency
derivative losses in Brazil of $20 million, or $0.03 per
share.
|
(4)
|
Amount primarily
relates to unrealized foreign currency losses mainly associated
with the devaluation of long-term receivables denominated in
Argentine pesos of $25 million, or $0.03 per share.
|
(5)
|
Amount primarily
relates to unrealized foreign currency gains in Brazil of $22
million, or $0.03 per share, mainly associated with debt
denominated in Brazilian reais.
|
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,
2023
|
December 31,
2022
|
September 30,
2022
|
June 30,
2022
|
Actual
|
Actual
|
Actual
|
Actual
|
Subsidiary
distributions1 to
Parent & QHCs
|
$
1,489
|
$
1,298
|
$
1,022
|
$
1,231
|
Returns of capital
distributions to Parent & QHCs
|
56
|
—
|
1
|
1
|
Total subsidiary
distributions & returns of capital to Parent
|
$
1,545
|
$
1,298
|
$
1,023
|
$
1,232
|
Parent only data:
quarterly
|
|
|
|
|
(in
millions)
|
Quarter
Ended
|
Total subsidiary
distributions & returns of capital to Parent
|
March 31,
2023
|
December 31,
2022
|
September 30,
2022
|
June 30,
2022
|
Actual
|
Actual
|
Actual
|
Actual
|
Subsidiary
distributions1 to
Parent & QHCs
|
$
356
|
$
753
|
$
69
|
$
311
|
Returns of capital
distributions to Parent & QHCs
|
56
|
—
|
—
|
—
|
Total subsidiary
distributions & returns of capital to Parent
|
$
412
|
$
753
|
$
69
|
$
311
|
|
|
(in
millions)
|
Balance
at
|
|
March 31,
2023
|
December 31,
2022
|
September 30,
2022
|
June 30,
2022
|
Parent Company
Liquidity2
|
Actual
|
Actual
|
Actual
|
Actual
|
Cash at Parent &
Cash at QHCs3
|
$
117
|
$
24
|
$
49
|
$
29
|
Availability under
credit facilities
|
970
|
1,141
|
374
|
414
|
Ending
liquidity
|
$
1,087
|
$
1,165
|
$
423
|
$
443
|
____________________________
|
(1)
|
Subsidiary
distributions received by Qualified Holding Companies ("QHCs")
excluded from Schedule 1. Subsidiary Distributions should not be
construed as an alternative to Consolidated Net Cash Provided by
Operating Activities, which is determined in accordance with US
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
Consolidated 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 available to the Parent Company,
including cash at qualified holding companies (QHCs), plus
available borrowings under our existing credit facility. 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 have 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.
|
Investor Contact: Susan Harcourt
703-682-1204
Media Contact: Amy Ackerman
703-682-6399
View original content to download
multimedia:https://www.prnewswire.com/news-releases/aes-reports-positive-momentum-in-first-quarter-reaffirms-2023-guidance-introduces-new-strategic-business-units-301816641.html
SOURCE AES CORP.