Remains on Track to Deliver on Strategic and
Financial Objectives
Strategic Accomplishments
- Signed new contracts for 3.7 GW of renewables in year-to-date
2023
- On track to complete construction of 3.5 GW of renewables in
2023
- Agreed to minority sell-downs of businesses in the Dominican Republic and Panama for $190
million in asset sale proceeds, securing full year 2023
asset sales target
- Awarded up to $2.4 billion of
grant funding by the US Department of Energy for two green hydrogen
hubs with AES participation
Q3 2023 Financial Highlights
- Q3 2023 Diluted EPS of $0.32,
compared to $0.59 in Q3 2022
- Q3 2023 Adjusted EPS1 of $0.60, compared to $0.63 in Q3 2022
- Q3 2023 Net Income of $291
million, compared to $446
million in Q3 2022
- Q3 2023 Adjusted EBITDA with Tax Attributes2,3 of
$1,008 million, compared to
$991 million in Q3 2022
- Q3 2023 Adjusted EBITDA2 of $990 million, compared to $931 million in Q3 2022
Financial Position and Outlook
- With year-to-date Adjusted EPS1 of $1.03, now expect full year Adjusted
EPS1 to be in top half of guidance range of $1.65 to $1.75
- Reaffirming annualized Adjusted EPS1 growth target
of 7% to 9% through 2025, off a base year of 2020
- Reaffirming 2023 guidance for Adjusted EBITDA2 of
$2,600 to $2,900 million
- Reaffirming annualized growth target2 of 17% to 20%
excluding the Energy Infrastructure SBU through 2027, off a base of
2023 guidance
ARLINGTON, Va., Nov. 2, 2023
/PRNewswire/ -- The AES Corporation (NYSE: AES) today reported
financial results for the quarter ended September 30, 2023.
"We had a strong third quarter across the board and are on track
to deliver on all of our financial and strategic objectives," said
Andrés Gluski, AES President and Chief Executive Officer. "We
fully expect to complete construction of 3.5 GW of new renewables
this year, which is more than double compared to last year.
Demand for renewables with long-term contracts remains
exceptionally strong across the sector, and particularly from our
primary customers, large technology companies and data
centers. As a result of this demand, we have signed a total
of 3.7 GW of contracts for new renewables so far this year and
expect to sign at least 5 GW before the end of the year."
"We expect to be in the top half of our Adjusted
EPS4 guidance range for 2023 and we are reaffirming
all of our short- and long-term financial guidance metrics.
Our hedging programs and low-risk commercial structure ensure that
we continue to have limited exposure to interest rates," said
Stephen Coughlin, AES Executive Vice
President and Chief Financial Officer. "We have already
secured our asset sale proceeds target and external financing needs
for the year, further strengthening our balance sheet.
Additionally, we are accelerating and increasing our asset sale
program to eliminate any need for new equity until at least
2026."
Q3 2023 Financial Results
Third quarter 2023 Net Income was $291
million, a decrease of $155
million compared to third quarter 2022. This decrease
is the result of lower contributions from LNG transactions versus
2022 at the Energy Infrastructure Strategic Business Unit (SBU),
partially offset by favorable contributions at the Utilities,
Renewables, and New Energy Technologies SBUs.
Third quarter 2023 Adjusted EBITDA5 (a non-GAAP
financial measure) was $990 million,
an increase of $59 million compared
to third quarter 2022, primarily driven by higher contributions at
the Utilities SBU, favorable weather conditions and new businesses
at the Renewables SBU, higher revenues under a PPA termination
agreement at the Energy Infrastructure SBU, and improved margins at
Fluence at the New Energy Technologies SBU. These positive
drivers were partially offset by favorable LNG transactions in 2022
at the Energy Infrastructure SBU.
During the third quarter of 2023, the Company realized Tax
Attributes6 of $18
million, a decrease of $42
million compared to third quarter 2022.
Third quarter 2023 Diluted Earnings Per Share from Continuing
Operations (Diluted EPS) was $0.32, a
decrease of $0.27 compared to third
quarter 2022, primarily reflecting higher long-lived asset
impairments in 2023 and lower earnings at the Energy Infrastructure
SBU mainly due to unrealized foreign currency losses and favorable
LNG transactions in 2022. These negative drivers were
partially offset by higher contributions at the Utilities SBU due
to the 2022 recognition of previously deferred fuel and energy
purchases and favorable weather conditions and new businesses at
the Renewables SBU.
Third quarter 2023 Adjusted Earnings Per Share7
(Adjusted EPS, a non-GAAP financial measure) was $0.60, a decrease of $0.03, compared to third quarter 2022, mainly
driven by lower contributions from the Energy Infrastructure SBU,
higher Parent interest, and a higher adjusted tax rate, partially
offset by higher contributions at the Utilities SBU.
Strategic Accomplishments
- As of today, the Company's backlog, which consists of projects
with signed contracts, but which are not yet operational, is 13,138
MW, including 5,761 MW under construction.
- In year-to-date 2023, the Company completed the construction or
acquisition of 1,314 MW of wind, solar and energy storage and
expects to complete a total of 3.5 GW by year-end 2023.
- In year-to-date 2023, the Company has signed 3,740 MW of
contracts for new renewables.
- In September 2023, the Company
agreed to minority sell-downs of its businesses in the Dominican Republic and Panama, for a total of $190 million in asset sale proceeds.
Guidance and Expectations7,8
The Company is reaffirming its 2023 guidance for Adjusted
EBITDA8 of $2,600 to
$2,900 million, and its expectation
for annualized growth in Adjusted EBITDA8 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 EBITDA8 is expected to be 17% to 20%
through 2027, from a base of 2023 guidance.
The Company now expects full year 2023 Adjusted
EPS7 to be in the top half of the guidance range 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 EPS7 of 7% to 9% through 2025, from a base year
of 2020. The Company is also reaffirming its annualized
growth target for Adjusted EPS7 of 6% to 8% through
2027, from a base of its reaffirmed 2023 guidance of $1.65 to $1.75.
The Company's 2023 guidance is based on foreign currency and
commodity forward curves as of September 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, November 3, 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 309600. 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 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 nine months ended September 30, 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 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 nine
months ended September 30, 2023. The Company is not able to
provide a corresponding GAAP equivalent or reconciliation for its
Adjusted EBITDA guidance without unreasonable effort.
|
3 Pre-tax effect of Production Tax
Credits, Investment Tax Credits, and depreciation tax expense
allocated to tax equity investors.
|
4 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 nine
months ended September 30, 2023. The Company is not able to
provide a corresponding GAAP equivalent or reconciliation for its
Adjusted EPS guidance without unreasonable effort.
|
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 nine
months ended September 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 nine
months ended September 30, 2023. The Company is not able to
provide a corresponding GAAP equivalent or reconciliation for its
Adjusted EPS guidance without unreasonable effort.
|
8 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 nine
months ended September 30, 2023. The Company is not able to
provide a corresponding GAAP equivalent or reconciliation for its
Adjusted EBITDA guidance without unreasonable effort.
|
About AES
The AES Corporation (NYSE: AES) is a Fortune 500 global energy
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
September 30,
|
|
Nine Months Ended
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in millions, except
per share amounts)
|
Revenue:
|
|
|
|
|
|
|
|
Non-Regulated
|
$
2,571
|
|
$ 2,651
|
|
$
7,051
|
|
$
6,944
|
Regulated
|
863
|
|
976
|
|
2,649
|
|
2,613
|
Total
revenue
|
3,434
|
|
3,627
|
|
9,700
|
|
9,557
|
Cost of
Sales:
|
|
|
|
|
|
|
|
Non-Regulated
|
(1,813)
|
|
(1,839)
|
|
(5,392)
|
|
(5,237)
|
Regulated
|
(703)
|
|
(896)
|
|
(2,298)
|
|
(2,335)
|
Total cost of
sales
|
(2,516)
|
|
(2,735)
|
|
(7,690)
|
|
(7,572)
|
Operating
margin
|
918
|
|
892
|
|
2,010
|
|
1,985
|
General and
administrative expenses
|
(64)
|
|
(51)
|
|
(191)
|
|
(149)
|
Interest
expense
|
(326)
|
|
(276)
|
|
(966)
|
|
(813)
|
Interest
income
|
144
|
|
100
|
|
398
|
|
270
|
Loss on extinguishment
of debt
|
—
|
|
(1)
|
|
(1)
|
|
(8)
|
Other
expense
|
(12)
|
|
(10)
|
|
(38)
|
|
(51)
|
Other
income
|
12
|
|
4
|
|
36
|
|
80
|
Gain (loss) on
disposal and sale of business interests
|
—
|
|
1
|
|
(4)
|
|
—
|
Asset impairment
expense
|
(158)
|
|
(50)
|
|
(352)
|
|
(533)
|
Foreign currency
transaction gains (losses)
|
(100)
|
|
8
|
|
(209)
|
|
(60)
|
INCOME FROM CONTINUING
OPERATIONS BEFORE TAXES AND
EQUITY IN EARNINGS OF AFFILIATES
|
414
|
|
617
|
|
683
|
|
721
|
Income tax
expense
|
(109)
|
|
(145)
|
|
(179)
|
|
(186)
|
Net equity in losses
of affiliates
|
(14)
|
|
(26)
|
|
(43)
|
|
(54)
|
NET INCOME
|
291
|
|
446
|
|
461
|
|
481
|
Less: Net income
attributable to noncontrolling interests and redeemable
stock of subsidiaries
|
(60)
|
|
(25)
|
|
(118)
|
|
(124)
|
NET INCOME
ATTRIBUTABLE TO THE AES CORPORATION
|
$
231
|
|
$
421
|
|
$
343
|
|
$
357
|
BASIC EARNINGS PER
SHARE:
|
|
|
|
|
|
|
|
NET INCOME
ATTRIBUTABLE TO THE AES CORPORATION COMMON
STOCKHOLDERS
|
$
0.34
|
|
$
0.63
|
|
$
0.51
|
|
$
0.53
|
DILUTED EARNINGS PER
SHARE:
|
|
|
|
|
|
|
|
NET INCOME
ATTRIBUTABLE TO THE AES CORPORATION COMMON
STOCKHOLDERS
|
$
0.32
|
|
$
0.59
|
|
$
0.48
|
|
$
0.50
|
DILUTED SHARES
OUTSTANDING
|
712
|
|
711
|
|
712
|
|
711
|
THE AES
CORPORATION
|
Strategic Business
Unit (SBU) Information
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
REVENUE
|
|
|
|
|
|
|
|
Renewables
SBU
|
$
708
|
|
$
532
|
|
$
1,744
|
|
$
1,407
|
Utilities
SBU
|
880
|
|
994
|
|
2,703
|
|
2,674
|
Energy Infrastructure
SBU
|
1,861
|
|
2,126
|
|
5,239
|
|
5,553
|
New Energy
Technologies SBU
|
—
|
|
—
|
|
75
|
|
2
|
Corporate and
Other
|
29
|
|
24
|
|
96
|
|
81
|
Eliminations
|
(44)
|
|
(49)
|
|
(157)
|
|
(160)
|
Total
Revenue
|
$
3,434
|
|
$
3,627
|
|
$
9,700
|
|
$
9,557
|
THE AES
CORPORATION
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
|
September 30,
2023
|
|
December 31,
2022
|
|
(in millions, except
share
and per share
data)
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
1,765
|
|
$
1,374
|
Restricted
cash
|
365
|
|
536
|
Short-term
investments
|
538
|
|
730
|
Accounts receivable,
net of allowance for doubtful accounts of $9 and $5,
respectively
|
1,725
|
|
1,799
|
Inventory
|
798
|
|
1,055
|
Prepaid
expenses
|
161
|
|
98
|
Other current
assets
|
1,432
|
|
1,533
|
Current held-for-sale
assets
|
493
|
|
518
|
Total current
assets
|
7,277
|
|
7,643
|
NONCURRENT
ASSETS
|
|
|
|
Property, Plant and
Equipment:
|
|
|
|
Land
|
492
|
|
470
|
Electric generation,
distribution assets and other
|
27,998
|
|
26,599
|
Accumulated
depreciation
|
(8,602)
|
|
(8,651)
|
Construction in
progress
|
7,647
|
|
4,621
|
Property, plant and
equipment, net
|
27,535
|
|
23,039
|
Other
Assets:
|
|
|
|
Investments in and
advances to affiliates
|
894
|
|
952
|
Debt service reserves
and other deposits
|
205
|
|
177
|
Goodwill
|
362
|
|
362
|
Other intangible
assets, net of accumulated amortization of $486 and $434,
respectively
|
2,290
|
|
1,841
|
Deferred income
taxes
|
428
|
|
319
|
Loan receivable, net
of allowance of $24 and $26, respectively
|
990
|
|
1,051
|
Other noncurrent
assets, net of allowance of $16 and $51, respectively
|
3,180
|
|
2,979
|
Total other
assets
|
8,349
|
|
7,681
|
TOTAL
ASSETS
|
$
43,161
|
|
$
38,363
|
LIABILITIES AND
EQUITY
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Accounts
payable
|
$
1,641
|
|
$
1,730
|
Accrued
interest
|
379
|
|
249
|
Accrued non-income
taxes
|
269
|
|
249
|
Accrued and other
liabilities
|
2,442
|
|
2,151
|
Recourse
debt
|
700
|
|
—
|
Non-recourse debt,
including $1,015 and $416, respectively, related to variable
interest entities
|
3,060
|
|
1,758
|
Current held-for-sale
liabilities
|
328
|
|
354
|
Total current
liabilities
|
8,819
|
|
6,491
|
NONCURRENT
LIABILITIES
|
|
|
|
Recourse
debt
|
4,864
|
|
3,894
|
Non-recourse debt,
including $1,781 and $2,295, respectively, related to variable
interest entities
|
18,767
|
|
17,846
|
Deferred income
taxes
|
1,257
|
|
1,139
|
Other noncurrent
liabilities
|
2,775
|
|
3,168
|
Total noncurrent
liabilities
|
27,663
|
|
26,047
|
Commitments and
Contingencies
|
|
|
|
Redeemable stock of
subsidiaries
|
1,423
|
|
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 September 30, 2023 and December 31, 2022)
|
838
|
|
838
|
Common stock ($0.01
par value, 1,200,000,000 shares authorized; 819,051,591 issued
and
669,629,035 outstanding at September 30, 2023 and 818,790,001
issued and 668,743,464
outstanding at December 31, 2022)
|
8
|
|
8
|
Additional paid-in
capital
|
6,449
|
|
6,688
|
Accumulated
deficit
|
(1,292)
|
|
(1,635)
|
Accumulated other
comprehensive loss
|
(1,410)
|
|
(1,640)
|
Treasury stock, at
cost (149,422,556 and 150,046,537 shares at September 30, 2023
and
December 31, 2022, respectively)
|
(1,814)
|
|
(1,822)
|
Total AES Corporation
stockholders' equity
|
2,779
|
|
2,437
|
NONCONTROLLING
INTERESTS
|
2,477
|
|
2,067
|
Total
equity
|
5,256
|
|
4,504
|
TOTAL LIABILITIES AND
EQUITY
|
$
43,161
|
|
$
38,363
|
THE AES
CORPORATION
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(in
millions)
|
|
(in
millions)
|
OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
|
$
291
|
|
$
446
|
|
$
461
|
|
$
481
|
Adjustments to net
income:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
286
|
|
266
|
|
836
|
|
800
|
Loss on disposal and
sale of business interests
|
—
|
|
(1)
|
|
4
|
|
—
|
Impairment
expense
|
159
|
|
50
|
|
358
|
|
533
|
Deferred income
taxes
|
17
|
|
43
|
|
(102)
|
|
—
|
Loss of affiliates,
net of dividends
|
18
|
|
26
|
|
47
|
|
78
|
Emissions allowance
expense
|
72
|
|
80
|
|
211
|
|
319
|
Loss on
realized/unrealized foreign currency
|
113
|
|
25
|
|
184
|
|
45
|
Other
|
50
|
|
(36)
|
|
150
|
|
(1)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
(Increase) decrease in
accounts receivable
|
(44)
|
|
(147)
|
|
16
|
|
(409)
|
(Increase) decrease in
inventory
|
(23)
|
|
(134)
|
|
253
|
|
(361)
|
(Increase) decrease in
prepaid expenses and other current assets
|
45
|
|
71
|
|
116
|
|
(116)
|
(Increase) decrease in
other assets
|
(118)
|
|
157
|
|
(44)
|
|
251
|
Increase (decrease) in
accounts payable and other current liabilities
|
118
|
|
(43)
|
|
(187)
|
|
108
|
Increase (decrease) in
income tax payables, net and other tax payables
|
18
|
|
(17)
|
|
(67)
|
|
(131)
|
Increase (decrease) in
deferred income
|
8
|
|
(11)
|
|
50
|
|
48
|
Increase (decrease) in
other liabilities
|
112
|
|
9
|
|
23
|
|
4
|
Net cash provided by
operating activities
|
1,122
|
|
784
|
|
2,309
|
|
1,649
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(1,899)
|
|
(1,052)
|
|
(5,295)
|
|
(2,711)
|
Acquisitions of
business interests, net of cash and restricted cash
acquired
|
(21)
|
|
(7)
|
|
(311)
|
|
(114)
|
Proceeds from the sale
of business interests, net of cash and restricted cash
sold
|
—
|
|
—
|
|
98
|
|
1
|
Sale of short-term
investments
|
296
|
|
309
|
|
1,002
|
|
654
|
Purchase of short-term
investments
|
(144)
|
|
(397)
|
|
(764)
|
|
(1,091)
|
Contributions and
loans to equity affiliates
|
(35)
|
|
(33)
|
|
(147)
|
|
(202)
|
Affiliate repayments
and returns of capital
|
—
|
|
71
|
|
—
|
|
71
|
Purchase of emissions
allowances
|
(46)
|
|
(122)
|
|
(161)
|
|
(415)
|
Other
investing
|
(74)
|
|
(11)
|
|
(95)
|
|
(18)
|
Net cash used in
investing activities
|
(1,923)
|
|
(1,242)
|
|
(5,673)
|
|
(3,825)
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
Borrowings under the
revolving credit facilities and commercial paper program
|
17,265
|
|
1,114
|
|
33,981
|
|
4,214
|
Repayments under the
revolving credit facilities and commercial paper program
|
(16,359)
|
|
(513)
|
|
(32,168)
|
|
(2,782)
|
Issuance of recourse
debt
|
—
|
|
200
|
|
1,400
|
|
200
|
Repayments of recourse
debt
|
—
|
|
—
|
|
—
|
|
(29)
|
Issuance of
non-recourse debt
|
327
|
|
422
|
|
1,784
|
|
3,554
|
Repayments of
non-recourse debt
|
(318)
|
|
(303)
|
|
(1,262)
|
|
(1,772)
|
Payments for financing
fees
|
(9)
|
|
(45)
|
|
(76)
|
|
(83)
|
Purchases under
supplier financing arrangements
|
489
|
|
126
|
|
1,307
|
|
299
|
Repayments of
obligations under supplier financing arrangements
|
(237)
|
|
(100)
|
|
(1,099)
|
|
(234)
|
Distributions to
noncontrolling interests
|
(26)
|
|
(36)
|
|
(173)
|
|
(129)
|
Acquisitions of
noncontrolling interests
|
(11)
|
|
(1)
|
|
(12)
|
|
(541)
|
Contributions from
noncontrolling interests
|
45
|
|
94
|
|
63
|
|
122
|
Sales to
noncontrolling interests
|
182
|
|
107
|
|
371
|
|
336
|
Issuance of preferred
shares in subsidiaries
|
—
|
|
—
|
|
3
|
|
60
|
Dividends paid on AES
common stock
|
(111)
|
|
(105)
|
|
(333)
|
|
(316)
|
Payments for financed
capital expenditures
|
(1)
|
|
(14)
|
|
(8)
|
|
(23)
|
Other
financing
|
(25)
|
|
(7)
|
|
(38)
|
|
(13)
|
Net cash provided by
financing activities
|
1,211
|
|
939
|
|
3,740
|
|
2,863
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(71)
|
|
(26)
|
|
(108)
|
|
(44)
|
Increase in cash, cash
equivalents and restricted cash of held-for-sale
businesses
|
(14)
|
|
(72)
|
|
(20)
|
|
(93)
|
Total increase in
cash, cash equivalents and restricted cash
|
325
|
|
383
|
|
248
|
|
550
|
Cash, cash equivalents
and restricted cash, beginning
|
2,010
|
|
1,651
|
|
2,087
|
|
1,484
|
Cash, cash equivalents
and restricted cash, ending
|
$
2,335
|
|
$
2,034
|
|
$
2,335
|
|
$
2,034
|
SUPPLEMENTAL
DISCLOSURES:
|
|
|
|
|
|
|
|
Cash payments for
interest, net of amounts capitalized
|
$
223
|
|
$
231
|
|
$
735
|
|
$
654
|
Cash payments for
income taxes, net of refunds
|
67
|
|
62
|
|
267
|
|
203
|
SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Initial recognition of
contingent consideration for acquisitions (see Note 18)
|
$
(3)
|
|
(15)
|
|
215
|
|
15
|
Noncash recognition of
new operating and financing leases
|
$
16
|
|
35
|
|
187
|
|
129
|
Noncash contributions
from noncontrolling interests
|
$
30
|
|
—
|
|
60
|
|
—
|
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
September 30,
|
|
Nine Months Ended
September 30,
|
Reconciliation of
Adjusted EBITDA (in millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income
(loss)
|
$
291
|
|
$
446
|
|
$
461
|
|
$
481
|
Income tax expense
(benefit)
|
109
|
|
145
|
|
179
|
|
186
|
Interest
expense
|
326
|
|
276
|
|
966
|
|
813
|
Interest
income
|
(144)
|
|
(100)
|
|
(398)
|
|
(270)
|
Depreciation and
amortization
|
286
|
|
266
|
|
836
|
|
800
|
EBITDA
|
$
868
|
|
$
1,033
|
|
$
2,044
|
|
$
2,010
|
Less: Adjustment for
noncontrolling interests and redeemable stock of subsidiaries
(1)
|
(183)
|
|
(174)
|
|
(508)
|
|
(486)
|
Less: Income tax
expense (benefit), interest expense (income) and depreciation and
amortization from equity affiliates
|
27
|
|
36
|
|
93
|
|
93
|
Interest income
recognized under service concession arrangements
|
18
|
|
19
|
|
54
|
|
58
|
Unrealized derivative
and equity securities losses (gains)
|
10
|
|
(8)
|
|
3
|
|
—
|
Unrealized foreign
currency losses
|
97
|
|
3
|
|
161
|
|
23
|
Disposition/acquisition losses
|
8
|
|
4
|
|
21
|
|
36
|
Impairment
losses
|
145
|
|
17
|
|
318
|
|
497
|
Loss on extinguishment
of debt
|
—
|
|
1
|
|
1
|
|
7
|
Adjusted
EBITDA
|
$
990
|
|
$
931
|
|
$
2,187
|
|
$
2,238
|
Tax attributes
allocated to tax equity investors
|
18
|
|
60
|
|
69
|
|
109
|
Adjusted EBITDA with
Tax Attributes (2)
|
$
1,008
|
|
$
991
|
|
$
2,256
|
|
$
2,347
|
_____________________________
|
|
|
(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
September 30, 2023
|
|
Three Months
Ended
September 30, 2022
|
|
Nine Months
Ended
September 30, 2023
|
|
Nine Months
Ended
September 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
|
$ 231
|
|
$
0.32
|
|
$ 421
|
|
$
0.59
|
|
$ 343
|
|
$ 0.48
|
|
$ 357
|
|
$ 0.50
|
|
Add: Income tax expense
from
continuing operations attributable to AES
|
101
|
|
|
|
128
|
|
|
|
136
|
|
|
|
149
|
|
|
|
Pre-tax
contribution
|
$ 332
|
|
|
|
$ 549
|
|
|
|
$ 479
|
|
|
|
$ 506
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized derivative
and equity
securities losses (gains)
|
$
9
|
|
$
0.01
|
|
$
(8)
|
|
$
(0.01)
|
|
$
3
|
|
$
—
|
(2)
|
$
(2)
|
|
$
—
|
|
Unrealized foreign
currency losses
|
96
|
|
0.14
|
(3)
|
3
|
|
—
|
|
160
|
|
0.22
|
(4)
|
23
|
|
0.03
|
(5)
|
Disposition/acquisition
losses
|
8
|
|
0.01
|
|
4
|
|
0.01
|
|
21
|
|
0.03
|
|
36
|
|
0.05
|
(6)
|
Impairment
losses
|
145
|
|
0.21
|
(7)
|
17
|
|
0.02
|
(8)
|
318
|
|
0.45
|
(9)
|
497
|
|
0.70
|
(10)
|
Loss on extinguishment
of debt
|
3
|
|
—
|
|
4
|
|
0.01
|
|
7
|
|
0.01
|
|
20
|
|
0.03
|
|
Less: Net income tax
expense (benefit)
|
|
|
(0.09)
|
(11)
|
|
|
0.01
|
|
|
|
(0.16)
|
(12)
|
|
|
(0.13)
|
(13)
|
Adjusted PTC and
Adjusted EPS
|
$ 593
|
|
$
0.60
|
|
$ 569
|
|
$
0.63
|
|
$ 988
|
|
$ 1.03
|
|
$
1,080
|
|
$ 1.18
|
|
____________________________
|
|
|
(1)
|
NCI is defined as
Noncontrolling Interests.
|
(2)
|
Amount primarily
relates to unrealized derivative losses due to the termination of a
PPA of $72 million, or $0.10 per share and unrealized derivative
losses at AES Clean Energy of $20 million, or $0.03 per share,
offset by unrealized derivative gains at the Energy Infrastructure
SBU of $108 million, or $0.15 per share.
|
(3)
|
Amount primarily
relates to unrealized foreign currency losses mainly associated
with the devaluation of long-term receivables denominated in
Argentine pesos of $60 million, or $0.08 per share, unrealized
foreign currency losses at AES Andes of $21 million, or $0.03 per
share, and unrealized foreign currency losses on debt in Brazil of
$10 million, or $0.01 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 $109 million, or $0.15 per share, and unrealized
foreign currency losses at AES Andes of $54 million, or $0.08 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 $19 million, or $0.03 per share.
|
(6)
|
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.
|
(7)
|
Amount primarily
relates to asset impairments at TEG and TEP of $76 million and $58
million, respectively, or $0.19 per share.
|
(8)
|
Amount primarily
relates to asset impairment at Jordan of $19 million, or $0.03 per
share.
|
(9)
|
Amount primarily
relates to asset impairments at the Norgener coal-fired plant in
Chile of $136 million, or $0.19 per share, at TEG and TEP of $76
million and $58 million, respectively, or $0.19 per share, the GAF
Projects at AES Renewable Holdings of $18 million, or $0.03 per
share, and at Jordan of $16 million, or $0.02 per share.
|
(10)
|
Amount primarily
relates to asset impairment at Maritza of $468 million, or $0.66
per share, and at Jordan of $19 million, or $0.03 per
share.
|
(11)
|
Amount primarily
relates to income tax benefits associated with the asset
impairments at TEG and TEP of $34 million, or $0.05 per share and
income tax benefits associated with unrealized foreign currency
losses at AES Andes of $6 million, or $0.01 per share.
|
(12)
|
Amount primarily
relates to income tax benefits associated with the asset
impairments at the Norgener coal fired plant in Chile of $35
million, or $0.05 per share and at TEG and TEP of $34 million, or
$0.05 per share, 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, and income tax benefits associated
with unrealized foreign currency losses at AES Andes of $14
million, or $0.02 per share.
|
(13)
|
Amount primarily
relates to income tax benefits associated with the impairment at
Maritza of $73 million, or $0.10 per share, and at Jordan of $8
million, or $0.01 per share.
|
The AES
Corporation
|
Parent Financial
Information
|
Parent only data:
last four quarters
|
|
|
|
|
(in
millions)
|
4 Quarters
Ended
|
Total subsidiary
distributions & returns of capital to Parent
|
September
30, 2023
|
June 30,
2023
|
March 31,
2023
|
December 31,
2022
|
Actual
|
Actual
|
Actual
|
Actual
|
Subsidiary
distributions1 to
Parent & QHCs
|
$
1,625
|
$
1,383
|
$
1,489
|
$
1,298
|
Returns of capital
distributions to Parent & QHCs
|
116
|
56
|
56
|
—
|
Total subsidiary
distributions & returns of capital to Parent
|
$
1,741
|
$
1,439
|
$
1,545
|
$
1,298
|
Parent only data:
quarterly
|
|
|
|
|
(in
millions)
|
Quarter
Ended
|
Total subsidiary
distributions & returns of capital to Parent
|
September
30, 2023
|
June 30,
2023
|
March 31,
2023
|
December 31,
2022
|
Actual
|
Actual
|
Actual
|
Actual
|
Subsidiary
distributions1 to
Parent & QHCs
|
$
311
|
$
205
|
$
356
|
$
753
|
Returns of capital
distributions to Parent & QHCs
|
60
|
—
|
56
|
—
|
Total subsidiary
distributions & returns of capital to Parent
|
$
371
|
$
205
|
$
412
|
$
753
|
|
|
(in
millions)
|
Balance
at
|
|
September 30,
2023
|
June 30,
2023
|
March 31,
2023
|
December 31,
2022
|
Parent Company
Liquidity2
|
Actual
|
Actual
|
Actual
|
Actual
|
Cash at Parent &
Cash at QHCs3
|
$
51
|
$
35
|
$
117
|
$
24
|
Availability under
credit facilities
|
857
|
883
|
970
|
1,141
|
Ending
liquidity
|
$
908
|
$
918
|
$
1,087
|
$
1,165
|
|
_______________________________
|
|
|
(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
View original content to download
multimedia:https://www.prnewswire.com/news-releases/aes-expects-full-year-2023-adjusted-eps-to-be-in-the-top-half-of-guidance-range-of-1-65-to-1-75--301976483.html
SOURCE AES CORP.