Reaffirms 2023 Guidance and Annualized Growth
Rate Targets for All Metrics
Strategic Accomplishments
- Signed new long-term contracts for 2.2 GW of renewables in
year-to-date 2023
- On track to complete construction of 3.4 GW of renewables in
2023, with 786 MW completed in year-to-date 2023
- Filed a new rate case and for regulatory approval to build the
largest energy storage facility in the state at AES Indiana
- Continued progress toward exiting coal by year-end
20251 with the retirement of 415 MW at Petersburg Unit 2
in Indiana, announcement of the
expected retirement of the 276 MW Norgener plant in Chile in 2025, and termination of the PPA for
the 205 MW Warrior Run plant in Maryland
Q2 2023 Financial Highlights
- Q2 2023 Diluted EPS of ($0.06),
compared to ($0.27) in Q2 2022
- Q2 2023 Adjusted EPS2 of $0.21, compared to $0.34 in Q2 2022
- Q2 2023 Net Income of ($19)
million, compared to ($136)
million in Q2 2022
- Q2 2023 Adjusted EBITDA with Tax Attributes3,4 of
$607 million, compared to
$722 million in Q2 2022
-
- Q2 2023 Adjusted EBITDA3 of $569 million, compared to $686 million in Q2 2022
Financial Position and Outlook
- Reaffirming 2023 guidance for Adjusted EPS2 of
$1.65 to $1.75 and annualized growth target2 of
7% to 9% through 2025, off a base year of 2020
- Reaffirming 2023 guidance for Adjusted EBITDA3 of
$2,600 to $2,900 million and annualized growth
target3 of 17% to 20% excluding the Energy
Infrastructure SBU through 2027, off a base of 2023 guidance
ARLINGTON, Va., Aug. 3, 2023
/PRNewswire/ -- The AES Corporation (NYSE: AES) today reported
financial results for the quarter ended June
30, 2023.
"We are making excellent progress on our strategic priorities:
tripling our installed renewables capacity by 2027; growing our US
utilities' rate base by more than 10% annually; and exiting coal by
year-end 2025," said Andrés Gluski, AES President and Chief
Executive Officer. "So far this year, we have signed
long-term contracts for 2.2 GW of new renewables and increased our
backlog of signed PPAs to a record level of 13.2 GW. At the
same time, our construction program is going very well, with 786 MW
of renewable projects completed year-to-date. We remain on
track to commission a total of 3.4 GW this year, including 2.1 GW
in the US."
"We are pleased with our financial results to-date, and see
ourselves as well-positioned to execute on all of our priorities in
the second half of the year," said Stephen
Coughlin, AES Executive Vice President and Chief Financial
Officer. "Our quarterly results are fully in line with our
expectations, including the seasonality in our earnings that we
outlined earlier this year, and today we are reaffirming our 2023
guidance and long-term annualized growth rate targets for all
metrics."
Q2 2023 Financial Results
Second quarter 2023 Net Income was ($19)
million, an increase of $117
million compared to second quarter 2022. This increase
is the result of favorable contributions at the Utilities,
Renewables, and New Energy Technologies Strategic Business Units
(SBU), partially offset by lower contributions at the Energy
Infrastructure SBU.
Second quarter 2023 Adjusted EBITDA5 (a non-GAAP
financial measure) was $569 million,
a decrease of $117 million compared
to second quarter 2022, primarily reflecting higher cost of sales
and lower thermal dispatch substituted with renewable sources at
the Energy Infrastructure SBU. These negative drivers were
partially offset by lower losses from affiliates at the New Energy
Technologies SBU mainly attributable to improved margins on a new
product line, favorable weather conditions impacting demand and
increased rider revenues at the Utilities SBU, and new businesses
and favorable wind and hydrological conditions at the Renewables
SBU.
During the second quarter of 2023, the Company realized Tax
Attributes6 of $38
million, an increase of $2
million compared to second quarter 2022.
Second quarter 2023 Diluted Earnings Per Share from Continuing
Operations (Diluted EPS) was ($0.06),
an increase of $0.21 compared to
second quarter 2022, primarily reflecting lower long-lived asset
impairments in the current year, partially offset by the
recognition of unrealized losses due to the termination of a PPA
and higher cost of sales at the Energy Infrastructure SBU.
Second quarter 2023 Adjusted Earnings Per Share7
(Adjusted EPS, a non-GAAP financial measure) was $0.21, a decrease of ($0.13), compared to second quarter 2022, mainly
driven by lower contributions from the Energy Infrastructure
SBU.
Strategic Accomplishments
- As of today, the Company's backlog, which consists of projects
with signed contracts, but which are not yet operational, is 13,170
MW, including 5,389 MW under construction. This is compared to a
11,932 MW backlog as of the Company's first quarter 2023 earnings
call on May 5, 2023.
- In year-to-date 2023, the Company completed 786 MW of wind,
solar and energy storage and expects to complete a total of 3.4 GW
by year-end 2023.
- AES Indiana filed its first rate case since 2018, and expects
to receive regulatory approval by the middle of 2024. During the
second quarter of 2023, AES Indiana filed for approval to build a
200 MW, or 800 MWh, energy storage facility at the site of the
retiring Petersburg coal plant and
expects to receive approval by the end of 2023. The facility is
expected to come online by the end of 2024, at which point it will
be the largest battery storage project in the Midwest.
- The Company expects to receive approval for AES Ohio's new
Electric Security Plan (ESP4) by the
end of August 2023, with new
distribution rates effective immediately.
- During the second quarter of 2023, the Company continued to
make progress toward exiting coal by year-end
20258:
-
- Retirement of the 415 MW Petersburg Unit 2 in Indiana;
- Announcement of the expected retirement of the 276 MW Norgener
plant in Chile in 2025; and
- Receipt of final regulatory approval, and subsequent deal
closing, for the termination of the PPA for the 205 MW Warrior Run
plant in Maryland.
Guidance and
Expectations9,10
The Company is reaffirming its 2023 guidance for Adjusted
EBITDA9 of $2,600 to
$2,900 million, and its expectation
for annualized growth in Adjusted EBITDA9 of 3% to 5%
through 2027, from a base of its reaffirmed 2023 guidance.
Excluding the Company's Energy Infrastructure SBU, annualized
growth in Adjusted EBITDA9 is expected to be 17% to 20%
through 2027, from a base of 2023 guidance.
The Company is reaffirming its 2023 guidance for Adjusted
EPS10 of $1.65 to
$1.75. Growth in 2023 is
expected to be primarily driven by 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.
The Company is reaffirming its annualized growth target for
Adjusted EPS10 of 6% to 8% through 2027, from a base of
its reaffirmed 2023 guidance of $1.65
to $1.75. The Company is also
reaffirming its annualized growth target for Adjusted
EPS10 of 7% to 9% through 2025, from a base year of
2020.
The Company's 2023 guidance is based on foreign currency and
commodity forward curves as of June 30,
2023.
Non-GAAP Financial Measures
See Non-GAAP Measures for definitions of Adjusted Earnings Per
Share, Adjusted Pre-Tax Contribution, and 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.
Conference Call Information
AES will host a conference call on Friday, August 4, 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 +1-404-975-4839. The Participant Access
Code for this call is 636658. 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.
|
|
|
|
|
|
|
1 Through asset sales, fuel conversions
and retirements, while maintaining reliability and affordability,
and subject to necessary approvals.
|
2 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 and six
months ended June 30, 2023. The Company is not able to
provide a corresponding GAAP equivalent or reconciliation for its
Adjusted EPS guidance without unreasonable effort.
|
3 Adjusted EBITDA is a non-GAAP
financial measure. 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 and six
months ended June 30, 2023. The Company is not able to
provide a corresponding GAAP equivalent or reconciliation for its
Adjusted EBITDA guidance without unreasonable effort.
|
4 Pre-tax effect of Production Tax
Credits, Investment Tax Credits, and depreciation tax expense
allocated to tax equity investors.
|
5 Adjusted EBITDA is a non-GAAP
financial measure. 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 and six
months ended June 30, 2023. The Company is not able to
provide a corresponding GAAP equivalent or reconciliation for its
Adjusted EBITDA guidance without unreasonable effort.
|
6 Pre-tax effect of Production Tax
Credits, Investment Tax Credits, and depreciation tax expense
allocated to tax equity investors.
|
7 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 and six months ended
June 30, 2023. The Company is not able to provide a
corresponding GAAP equivalent or reconciliation for its Adjusted
EPS guidance without unreasonable effort.
|
8 Through asset sales, fuel conversions
and retirements, while maintaining reliability and affordability,
and subject to necessary approvals.
|
9 Adjusted EBITDA is a non-GAAP
financial measure. 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 and six
months ended June 30, 2023. The Company is not able to
provide a corresponding GAAP equivalent or reconciliation for its
Adjusted EBITDA guidance without unreasonable effort.
|
10 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 and six months ended
June 30, 2023. The Company is not able to provide a
corresponding GAAP equivalent or reconciliation for its Adjusted
EPS guidance without unreasonable effort.
|
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
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in millions, except
per share amounts)
|
Revenue:
|
|
|
|
|
|
|
|
Non-Regulated
|
$
2,193
|
|
$ 2,276
|
|
$
4,480
|
|
$
4,293
|
Regulated
|
834
|
|
802
|
|
1,786
|
|
1,637
|
Total
revenue
|
3,027
|
|
3,078
|
|
6,266
|
|
5,930
|
Cost of
Sales:
|
|
|
|
|
|
|
|
Non-Regulated
|
(1,782)
|
|
(1,781)
|
|
(3,579)
|
|
(3,398)
|
Regulated
|
(747)
|
|
(734)
|
|
(1,595)
|
|
(1,439)
|
Total cost of
sales
|
(2,529)
|
|
(2,515)
|
|
(5,174)
|
|
(4,837)
|
Operating
margin
|
498
|
|
563
|
|
1,092
|
|
1,093
|
General and
administrative expenses
|
(72)
|
|
(46)
|
|
(127)
|
|
(98)
|
Interest
expense
|
(310)
|
|
(279)
|
|
(640)
|
|
(537)
|
Interest
income
|
131
|
|
95
|
|
254
|
|
170
|
Loss on extinguishment
of debt
|
—
|
|
(1)
|
|
(1)
|
|
(7)
|
Other
expense
|
(12)
|
|
(29)
|
|
(26)
|
|
(41)
|
Other
income
|
14
|
|
70
|
|
24
|
|
76
|
Loss on disposal and
sale of business interests
|
(4)
|
|
(2)
|
|
(4)
|
|
(1)
|
Asset impairment
expense
|
(174)
|
|
(482)
|
|
(194)
|
|
(483)
|
Foreign currency
transaction losses
|
(67)
|
|
(49)
|
|
(109)
|
|
(68)
|
INCOME (LOSS) FROM
CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN
EARNINGS OF
AFFILIATES
|
4
|
|
(160)
|
|
269
|
|
104
|
Income tax benefit
(expense)
|
2
|
|
19
|
|
(70)
|
|
(41)
|
Net equity in earnings
(losses) of affiliates
|
(25)
|
|
5
|
|
(29)
|
|
(28)
|
NET INCOME
(LOSS)
|
(19)
|
|
(136)
|
|
170
|
|
35
|
Less: Net income
attributable to noncontrolling interests and redeemable stock
of
subsidiaries
|
(20)
|
|
(43)
|
|
(58)
|
|
(99)
|
NET INCOME (LOSS)
ATTRIBUTABLE TO THE AES CORPORATION
|
$
(39)
|
|
$
(179)
|
|
$
112
|
|
$
(64)
|
BASIC EARNINGS PER
SHARE:
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO THE AES CORPORATION COMMON
STOCKHOLDERS
|
$
(0.06)
|
|
$
(0.27)
|
|
$
0.17
|
|
$
(0.10)
|
DILUTED EARNINGS PER
SHARE:
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO THE AES CORPORATION COMMON
STOCKHOLDERS
|
$
(0.06)
|
|
$
(0.27)
|
|
$
0.16
|
|
$
(0.10)
|
DILUTED SHARES
OUTSTANDING
|
669
|
|
668
|
|
712
|
|
668
|
THE AES
CORPORATION
|
Strategic Business
Unit (SBU) Information
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
(in
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
REVENUE
|
|
|
|
|
|
|
|
Renewables
SBU
|
$
541
|
|
$
455
|
|
$
1,036
|
|
$
875
|
Utilities
SBU
|
852
|
|
821
|
|
1,823
|
|
1,680
|
Energy
Infrastructure SBU
|
1,654
|
|
1,820
|
|
3,378
|
|
3,427
|
New Energy
Technologies SBU
|
1
|
|
2
|
|
75
|
|
2
|
Corporate and
Other
|
40
|
|
34
|
|
67
|
|
57
|
Eliminations
|
(61)
|
|
(54)
|
|
(113)
|
|
(111)
|
Total
Revenue
|
$
3,027
|
|
$
3,078
|
|
$
6,266
|
|
$
5,930
|
THE AES
CORPORATION
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
|
June 30,
2023
|
|
December 31,
2022
|
|
(in millions, except
share
and per share
data)
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
1,322
|
|
$
1,374
|
Restricted
cash
|
517
|
|
536
|
Short-term
investments
|
713
|
|
730
|
Accounts
receivable, net of allowance for doubtful accounts of $8 and $5,
respectively
|
1,710
|
|
1,799
|
Inventory
|
774
|
|
1,055
|
Prepaid
expenses
|
218
|
|
98
|
Other current
assets
|
1,449
|
|
1,533
|
Current
held-for-sale assets
|
502
|
|
518
|
Total current
assets
|
7,205
|
|
7,643
|
NONCURRENT
ASSETS
|
|
|
|
Property, Plant and
Equipment:
|
|
|
|
Land
|
490
|
|
470
|
Electric
generation, distribution assets and other
|
27,312
|
|
26,599
|
Accumulated
depreciation
|
(8,413)
|
|
(8,651)
|
Construction in
progress
|
6,688
|
|
4,621
|
Property, plant
and equipment, net
|
26,077
|
|
23,039
|
Other
Assets:
|
|
|
|
Investments in
and advances to affiliates
|
858
|
|
952
|
Debt service
reserves and other deposits
|
171
|
|
177
|
Goodwill
|
362
|
|
362
|
Other intangible
assets, net of accumulated amortization of $475 and $434,
respectively
|
2,282
|
|
1,841
|
Deferred income
taxes
|
383
|
|
319
|
Loan receivable,
net of allowance of $25 and $26, respectively
|
1,018
|
|
1,051
|
Other noncurrent
assets, net of allowance of $21 and $51, respectively
|
3,149
|
|
2,979
|
Total other
assets
|
8,223
|
|
7,681
|
TOTAL
ASSETS
|
$
41,505
|
|
$
38,363
|
LIABILITIES AND
EQUITY
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Accounts
payable
|
$
1,583
|
|
$
1,730
|
Accrued
interest
|
303
|
|
249
|
Accrued
non-income taxes
|
228
|
|
249
|
Accrued and
other liabilities
|
2,232
|
|
2,151
|
Recourse
debt
|
500
|
|
—
|
Non-recourse
debt, including $896 and $416, respectively, related to variable
interest entities
|
2,445
|
|
1,758
|
Current
held-for-sale liabilities
|
337
|
|
354
|
Total current
liabilities
|
7,628
|
|
6,491
|
NONCURRENT
LIABILITIES
|
|
|
|
Recourse
debt
|
4,976
|
|
3,894
|
Non-recourse debt,
including $2,032 and $2,295, respectively, related to variable
interest entities
|
18,622
|
|
17,846
|
Deferred income
taxes
|
1,104
|
|
1,139
|
Other noncurrent
liabilities
|
3,128
|
|
3,168
|
Total noncurrent
liabilities
|
27,830
|
|
26,047
|
Commitments and
Contingencies
|
|
|
|
Redeemable stock of
subsidiaries
|
1,289
|
|
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 June 30, 2023
and December 31,
2022)
|
838
|
|
838
|
Common stock ($0.01
par value, 1,200,000,000 shares authorized; 818,808,272 issued and
669,385,716 outstanding at
June 30, 2023 and
818,790,001 issued and 668,743,464 outstanding at December 31,
2022)
|
8
|
|
8
|
Additional paid-in
capital
|
6,550
|
|
6,688
|
Accumulated
deficit
|
(1,523)
|
|
(1,635)
|
Accumulated other
comprehensive loss
|
(1,567)
|
|
(1,640)
|
Treasury stock, at
cost (149,422,556 and 150,046,537 shares at June 30, 2023 and
December 31, 2022, respectively)
|
(1,814)
|
|
(1,822)
|
Total AES Corporation
stockholders' equity
|
2,492
|
|
2,437
|
NONCONTROLLING
INTERESTS
|
2,266
|
|
2,067
|
Total
equity
|
4,758
|
|
4,504
|
TOTAL LIABILITIES AND
EQUITY
|
$
41,505
|
|
$
38,363
|
THE AES
CORPORATION
Condensed
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in
millions)
|
|
(in
millions)
|
OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
|
$
(19)
|
|
$
(136)
|
|
$
170
|
|
$
35
|
Adjustments to net
income:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
277
|
|
264
|
|
550
|
|
534
|
Loss on disposal
and sale of business interests
|
4
|
|
2
|
|
4
|
|
1
|
Impairment
expense
|
179
|
|
482
|
|
199
|
|
483
|
Deferred income
taxes
|
(108)
|
|
(36)
|
|
(119)
|
|
(43)
|
Loss on
extinguishment of debt
|
—
|
|
1
|
|
1
|
|
7
|
Loss (gain) of
affiliates, net of dividends
|
25
|
|
19
|
|
29
|
|
52
|
Emissions
allowance expense
|
50
|
|
121
|
|
139
|
|
239
|
Loss on
realized/unrealized foreign currency
|
38
|
|
57
|
|
71
|
|
20
|
Other
|
81
|
|
(63)
|
|
99
|
|
28
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
(Increase)
decrease in accounts receivable
|
122
|
|
(185)
|
|
60
|
|
(262)
|
(Increase)
decrease in inventory
|
85
|
|
(183)
|
|
276
|
|
(227)
|
(Increase)
decrease in prepaid expenses and other current assets
|
7
|
|
(246)
|
|
71
|
|
(187)
|
(Increase)
decrease in other assets
|
24
|
|
104
|
|
74
|
|
94
|
Increase
(decrease) in accounts payable and other current
liabilities
|
(12)
|
|
275
|
|
(305)
|
|
151
|
Increase
(decrease) in income tax payables, net and other tax
payables
|
(78)
|
|
(121)
|
|
(85)
|
|
(114)
|
Increase
(decrease) in deferred income
|
21
|
|
49
|
|
42
|
|
59
|
Increase
(decrease) in other liabilities
|
(134)
|
|
4
|
|
(89)
|
|
(5)
|
Net cash provided by
operating activities
|
562
|
|
408
|
|
1,187
|
|
865
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(1,845)
|
|
(893)
|
|
(3,396)
|
|
(1,659)
|
Acquisitions of
business interests, net of cash and restricted cash
acquired
|
(290)
|
|
(107)
|
|
(290)
|
|
(107)
|
Proceeds from the sale
of business interests, net of cash and restricted cash
sold
|
—
|
|
—
|
|
98
|
|
1
|
Sale of short-term
investments
|
350
|
|
148
|
|
706
|
|
345
|
Purchase of short-term
investments
|
(202)
|
|
(349)
|
|
(620)
|
|
(694)
|
Contributions and
loans to equity affiliates
|
(92)
|
|
(76)
|
|
(112)
|
|
(169)
|
Purchase of emissions
allowances
|
(37)
|
|
(157)
|
|
(115)
|
|
(293)
|
Other
investing
|
(10)
|
|
4
|
|
(21)
|
|
(7)
|
Net cash used in
investing activities
|
(2,126)
|
|
(1,430)
|
|
(3,750)
|
|
(2,583)
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
Borrowings under the
revolving credit facilities and commercial paper program
|
14,381
|
|
1,907
|
|
16,716
|
|
3,100
|
Repayments under the
revolving credit facilities and commercial paper program
|
(14,184)
|
|
(1,554)
|
|
(15,809)
|
|
(2,269)
|
Issuance of recourse
debt
|
900
|
|
—
|
|
1,400
|
|
—
|
Repayments of recourse
debt
|
—
|
|
—
|
|
—
|
|
(29)
|
Issuance of
non-recourse debt
|
767
|
|
1,422
|
|
1,457
|
|
3,132
|
Repayments of
non-recourse debt
|
(284)
|
|
(681)
|
|
(944)
|
|
(1,469)
|
Payments for financing
fees
|
(49)
|
|
(11)
|
|
(67)
|
|
(38)
|
Purchases under
supplier financing arrangements
|
289
|
|
80
|
|
818
|
|
173
|
Repayments of
obligations under supplier financing arrangements
|
(275)
|
|
(84)
|
|
(862)
|
|
(134)
|
Distributions to
noncontrolling interests
|
(100)
|
|
(46)
|
|
(147)
|
|
(93)
|
Acquisitions of
noncontrolling interests
|
(1)
|
|
(5)
|
|
(1)
|
|
(540)
|
Contributions from
noncontrolling interests
|
—
|
|
20
|
|
18
|
|
28
|
Sales to
noncontrolling interests
|
189
|
|
181
|
|
189
|
|
229
|
Issuance of preferred
shares in subsidiaries
|
—
|
|
—
|
|
3
|
|
60
|
Dividends paid on AES
common stock
|
(111)
|
|
(106)
|
|
(222)
|
|
(211)
|
Payments for financed
capital expenditures
|
(3)
|
|
(5)
|
|
(7)
|
|
(9)
|
Other
financing
|
(6)
|
|
(12)
|
|
(13)
|
|
(6)
|
Net cash provided by
financing activities
|
1,513
|
|
1,106
|
|
2,529
|
|
1,924
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(19)
|
|
(38)
|
|
(37)
|
|
(18)
|
Increase in cash, cash
equivalents and restricted cash of held-for-sale
businesses
|
3
|
|
43
|
|
(6)
|
|
(21)
|
Total increase
(decrease) in cash, cash equivalents and restricted cash
|
(67)
|
|
89
|
|
(77)
|
|
167
|
Cash, cash equivalents
and restricted cash, beginning
|
2,077
|
|
1,562
|
|
2,087
|
|
1,484
|
Cash, cash equivalents
and restricted cash, ending
|
$
2,010
|
|
$
1,651
|
|
$
2,010
|
|
$
1,651
|
SUPPLEMENTAL
DISCLOSURES:
|
|
|
|
|
|
|
|
Cash payments for
interest, net of amounts capitalized
|
$
260
|
|
$
238
|
|
$
512
|
|
$
423
|
Cash payments for
income taxes, net of refunds
|
147
|
|
95
|
|
200
|
|
141
|
SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Initial recognition of
contingent consideration for acquisitions (see Note 17)
|
$
218
|
|
—
|
|
218
|
|
15
|
Non-cash contributions
from noncontrolling interests
|
$
30
|
|
—
|
|
30
|
|
—
|
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, adding
back interest income recognized under service concession
arrangements, and 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. Adjusted EBITDA with Tax Attributes is defined as
Adjusted EBITDA, adding back the pre-tax effect of Production Tax
Credits ("PTCs"), Investment Tax Credits ("ITCs"), and depreciation
tax expense allocated to tax equity investors.
The GAAP measure most comparable to EBITDA, Adjusted EBITDA, and
Adjusted EBITDA with Tax Attributes is net income. We believe that
EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes
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, Adjusted EBITDA, and
Adjusted EBITDA with Tax Attributes should not be construed as
alternatives to net income, which is determined in accordance with
GAAP.
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
Reconciliation of
Adjusted EBITDA (in millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
(loss)
|
$
(19)
|
|
$
(136)
|
|
$
170
|
|
$
35
|
Income tax expense
(benefit)
|
(2)
|
|
(19)
|
|
70
|
|
41
|
Interest
expense
|
310
|
|
279
|
|
640
|
|
537
|
Interest
income
|
(131)
|
|
(95)
|
|
(254)
|
|
(170)
|
Depreciation and
amortization
|
277
|
|
264
|
|
550
|
|
534
|
EBITDA
|
$
435
|
|
$
293
|
|
$
1,176
|
|
$
977
|
Less: Adjustment for
noncontrolling interests and redeemable stock of subsidiaries
(1)
|
(155)
|
|
(156)
|
|
(325)
|
|
(312)
|
Less: Income tax
expense (benefit), interest expense (income) and depreciation
and
amortization from
equity affiliates
|
27
|
|
23
|
|
66
|
|
57
|
Interest income
recognized under service concession arrangements
|
18
|
|
20
|
|
36
|
|
39
|
Unrealized derivative
and equity securities losses (gains)
|
32
|
|
(34)
|
|
(7)
|
|
8
|
Unrealized foreign
currency losses
|
32
|
|
38
|
|
64
|
|
20
|
Disposition/acquisition losses
|
16
|
|
23
|
|
13
|
|
32
|
Impairment
losses
|
164
|
|
479
|
|
173
|
|
480
|
Loss on extinguishment
of debt
|
—
|
|
—
|
|
1
|
|
6
|
Adjusted
EBITDA
|
$
569
|
|
$
686
|
|
$
1,197
|
|
$
1,307
|
Tax attributes
allocated to tax equity investors
|
38
|
|
36
|
|
51
|
|
49
|
Adjusted EBITDA with
Tax Attributes (2)
|
$
607
|
|
$
722
|
|
$
1,248
|
|
$
1,356
|
|
|
|
|
|
|
|
|
(1)
|
The allocation of
earnings to tax equity investors from both consolidated entities
and equity affiliates is removed from Adjusted EBITDA.
|
(2)
|
Adjusted EBITDA with
Tax Attributes includes the impact of the share of the ITCs, PTCs,
and depreciation expense allocated to tax equity investors under
the HLBV accounting method and recognized as Net loss
attributable to noncontrolling interests and redeemable stock of
subsidiaries on the Condensed Consolidated Statements of
Operations. All of the tax attributes are related to the Renewables
SBU.
|
THE AES
CORPORATION
NON-GAAP FINANCIAL
MEASURES
(Unaudited)
RECONCILIATION
OF ADJUSTED EBITDA, ADJUSTED 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, 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
June 30, 2023
|
|
Three Months
Ended
June 30, 2022
|
|
Six Months Ended
June 30, 2023
|
|
Six Months Ended
June 30, 2022
|
|
|
Net of NCI
(1)
|
|
Per Share
(Diluted)
Net of NCI
(1)
|
|
Net of NCI
(1)
|
|
Per Share
(Diluted)
Net of NCI
(1)
|
|
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
|
$
(39)
|
|
$
(0.05)
|
|
$
(179)
|
|
$
(0.25)
|
|
$ 112
|
|
$ 0.16
|
|
$
(64)
|
|
$
(0.09)
|
|
Add: Income tax expense
from
continuing operations
attributable to AES
|
(16)
|
|
|
|
(29)
|
|
|
|
35
|
|
|
|
21
|
|
|
|
Pre-tax
contribution
|
$
(55)
|
|
|
|
$
(208)
|
|
|
|
$ 147
|
|
|
|
$
(43)
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized derivative
and equity securities losses (gains)
|
$ 33
|
|
$
0.05
|
(2)
|
$ (35)
|
|
$
(0.05)
|
(3)
|
$
(6)
|
|
$
(0.01)
|
(4)
|
$
6
|
|
$ 0.01
|
|
Unrealized foreign
currency losses
|
33
|
|
0.04
|
(5)
|
39
|
|
0.05
|
(6)
|
64
|
|
0.09
|
(7)
|
20
|
|
0.03
|
|
Disposition/acquisition
losses
|
16
|
|
0.02
|
|
23
|
|
0.03
|
(8)
|
13
|
|
0.02
|
|
32
|
|
0.04
|
(8)
|
Impairment
losses
|
164
|
|
0.23
|
(9)
|
479
|
|
0.68
|
(10)
|
173
|
|
0.24
|
(9)
|
480
|
|
0.68
|
(10)
|
Loss on extinguishment
of debt
|
—
|
|
—
|
|
6
|
|
0.01
|
|
4
|
|
0.01
|
|
16
|
|
0.02
|
|
Less: Net income tax
benefit
|
|
|
(0.08)
|
(11)
|
|
|
(0.13)
|
(12)
|
|
|
(0.08)
|
(11)
|
|
|
(0.14)
|
(12)
|
Adjusted PTC and
Adjusted EPS
|
$ 191
|
|
$
0.21
|
|
$ 304
|
|
$
0.34
|
|
$ 395
|
|
$ 0.43
|
|
$ 511
|
|
$ 0.55
|
|
|
|
|
|
|
|
|
|
(1)
|
NCI is defined as
Noncontrolling Interests.
|
(2)
|
Amount primarily
relates to recognition of unrealized losses due to the termination
of a PPA of $72 million, or $0.10 per share, partially offset by
unrealized derivative gains at the Energy Infrastructure SBU of $37
million, or $0.05 per share.
|
(3)
|
Amount primarily
relates to the unrealized gain on remeasurement of our existing
investment in 5B, accounted for using the measurement alternative,
of $26 million, or $0.04 per share.
|
(4)
|
Amount primarily
relates to unrealized derivative gains at the Energy Infrastructure
SBU of $87 million, or $0.12 per share, partially offset by the
recognition of unrealized losses due to the termination of a PPA of
$72 million, or $0.10 per share.
|
(5)
|
Amount primarily
relates to unrealized foreign currency losses mainly associated
with the devaluation of long-term receivables denominated in
Argentine pesos of $24 million, or $0.03 per share, and unrealized
foreign currency losses at AES Andes due to the depreciating
Colombian peso of $15 million, or $0.02 per share.
|
(6)
|
Amount primarily
relates to unrealized foreign currency losses on debt in Brazil of
$12 million, or $0.02 per share, and unrealized foreign currency
losses of $9 million, or $0.01 per share, mainly associated with
the devaluation of long-term receivables denominated in Argentine
pesos.
|
(7)
|
Amount primarily
relates to unrealized foreign currency losses mainly associated
with the devaluation of long-term receivables denominated in
Argentine pesos of $49 million, or $0.07 per share, and unrealized
foreign currency losses at AES Andes due to the depreciating
Colombian peso of $31 million, or $0.04 per share.
|
(8)
|
Amount primarily
relates to the recognition of an allowance on the AES Gilbert
sales-type lease receivable as a cost of disposition of a business
interest of $20 million, or $0.03 per share, for the three and six
months ended June 30, 2022.
|
(9)
|
Amount primarily
relates to asset impairments at the Norgener coal-fired plant in
Chile of $136 million, or $0.19 per share, and the GAF Projects at
AES Renewable Holdings of $18 million, or $0.03 per share for the
three and six months ended June 30, 2023.
|
(10)
|
Amount primarily
relates to asset impairment at Maritza of $475 million, or $0.67
per share, for the three and six months ended June 30,
2022.
|
(11)
|
Amount primarily
relates to income tax benefits associated with the asset impairment
at the Norgener coal fired plant in Chile of $33 million, or $0.05
per share, and income tax benefits associated with the recognition
of unrealized losses due to the termination of a PPA of $18
million, or $0.02 per share, for the three and six months ended
June 30, 2023.
|
(12)
|
Amount primarily
relates to income tax benefits associated with the impairment at
Maritza of $110 million, or $0.15 per share, partially offset by
income tax expense associated with the unrealized gain on
remeasurement of our existing investment in 5B of $6 million, or
$0.01 per share for the three and six months ended June 30,
2022.
|
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,
2023
|
March 31,
2023
|
December 31,
2022
|
September 30,
2022
|
Actual
|
Actual
|
Actual
|
Actual
|
Subsidiary
distributions1 to
Parent & QHCs
|
$
1,383
|
$
1,489
|
$
1,298
|
$
1,022
|
Returns of capital
distributions to Parent & QHCs
|
56
|
56
|
—
|
1
|
Total subsidiary
distributions & returns of capital to Parent
|
$
1,439
|
$
1,545
|
$
1,298
|
$
1,023
|
Parent only data:
quarterly
|
|
|
|
|
(in
millions)
|
Quarter
Ended
|
Total subsidiary
distributions & returns of capital to Parent
|
June 30,
2023
|
March 31,
2023
|
December 31,
2022
|
September 30,
2022
|
Actual
|
Actual
|
Actual
|
Actual
|
Subsidiary
distributions1 to
Parent & QHCs
|
$
205
|
$
356
|
$
753
|
$
69
|
Returns of capital
distributions to Parent & QHCs
|
—
|
56
|
—
|
—
|
Total subsidiary
distributions & returns of capital to Parent
|
$
205
|
$
412
|
$
753
|
$
69
|
|
|
(in
millions)
|
Balance
at
|
|
June 30,
2023
|
March 31,
2023
|
December 31,
2022
|
September 30,
2022
|
Parent Company
Liquidity2
|
Actual
|
Actual
|
Actual
|
Actual
|
Cash at Parent &
Cash at QHCs3
|
$
35
|
$
117
|
$
24
|
$
49
|
Availability under
credit facilities
|
883
|
970
|
1,141
|
374
|
Ending
liquidity
|
$
918
|
$
1,087
|
$
1,165
|
$
423
|
|
|
|
|
|
|
|
|
(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,
susan.harcourt@aes.com
Media Contact: Amy Ackerman
703-682-6399, amy.ackerman@aes.com
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SOURCE AES CORP.