U.S. markets closed
  • S&P 500

    3,298.46
    +51.87 (+1.60%)
     
  • Dow 30

    27,173.96
    +358.56 (+1.34%)
     
  • Nasdaq

    10,913.56
    +241.26 (+2.26%)
     
  • Russell 2000

    1,474.91
    +23.09 (+1.59%)
     
  • Crude Oil

    40.04
    -0.27 (-0.67%)
     
  • Gold

    1,864.30
    -12.60 (-0.67%)
     
  • Silver

    22.99
    -0.21 (-0.91%)
     
  • EUR/USD

    1.1639
    -0.0037 (-0.31%)
     
  • 10-Yr Bond

    0.6590
    -0.0070 (-1.05%)
     
  • GBP/USD

    1.2744
    -0.0007 (-0.06%)
     
  • USD/JPY

    105.5590
    +0.1570 (+0.15%)
     
  • BTC-USD

    10,706.21
    +9.22 (+0.09%)
     
  • CMC Crypto 200

    230.19
    +12.36 (+5.67%)
     
  • FTSE 100

    5,842.67
    +19.89 (+0.34%)
     
  • Nikkei 225

    23,204.62
    +116.82 (+0.51%)
     

AES Delivers Strong Second Quarter Financial Performance and Achieves Strategic Milestones

ARLINGTON, Va., Aug. 6, 2020 /PRNewswire/ --

(PRNewsfoto/The AES Corporation)
(PRNewsfoto/The AES Corporation)

Strategic Accomplishments

  • During the second quarter, agreed to sell 2.0 GW of capacity, reducing generation from coal by 11 percentage points to 34% of total generation and expect to be below 30% by year-end 2020

  • Signed or awarded 852 MW of new renewables and energy storage, for a total of 1.5 GW in year-to-date 2020

  • Total backlog of renewables awarded, under signed PPAs or under construction of 6.2 GW

  • Fluence maintained its global lead in the energy storage market with a total backlog of 1.6 GW as of the end of the second quarter

Q2 2020 Financial Highlights

  • Overall market demand trends better than expected and collections remain in line with historic levels

  • Maintained strong liquidity of $3.5 billion

  • Diluted EPS of ($0.13), compared to $0.02 in Q2 2019

  • Adjusted EPS1 of $0.25, compared to $0.26 in Q2 2019

Financial Position and Outlook

  • As of June 30, 2020, the Company comfortably exceeded targeted investment grade ratios and is on track to attain a second investment grade rating by year-end 2020

  • Reaffirming 2020 guidance and expectations, as well as 7% to 9% average annual growth target through 2022

  • Remain committed to growing dividend by 4% to 6% annually, subject to Board approval

The AES Corporation (NYSE: AES) today reported financial results for the quarter ended June 30, 2020.

"Our strong quarterly results demonstrate the resiliency of our core business model of long-term contracted generation with credit-worthy offtakers," said Andrés Gluski, AES President and Chief Executive Officer.  "Since our last call, we added 852 MW to our pipeline of renewable projects, increasing our backlog to 6.2 GW.  At the same time, we consolidated our global lead in energy storage through Fluence, which launched its sixth-generation product.  Finally, by growing renewables and signing agreements to sell 2.0 GW of coal-fired generation, we are well on our way toward reducing our total generation from coal to less than 30% by the end of this year."

"Our solid financial performance in the second quarter highlights once more the quality and resilience of our existing business model. Collections have remained stable and our assets continued to play a critical role in the markets where we operate," said Gustavo Pimenta, AES Executive Vice President and Chief Financial Officer. "Based on our year-to-date results and our outlook for the remainder of the year, we remain optimistic that we will attain a second investment grade rating before the end of this year, and we are reaffirming our 2020 guidance and expectations, as well as our 7% to 9% average annual growth through 2022."

Key Q2 2020 Financial Results

Second quarter 2020 Diluted Earnings Per Share from Continuing Operations (Diluted EPS) was ($0.13), a decrease of $0.15 compared to second quarter 2019, primarily reflecting the $0.10 impact from higher impairments and losses on asset sales in 2020.  Second quarter 2020 results also include the impact from lower contributions from the US and Utilities Strategic Business Unit (SBU), partially offset by higher contributions from the South America SBU.

Second quarter 2020 Adjusted Earnings Per Share1 (Adjusted EPS, a non-GAAP financial measure) was $0.25, a decrease of $0.01 compared to second quarter 2019, primarily reflecting the performance at the Company's SBUs, which also drove Diluted EPS.

Detailed Strategic Overview

AES is leading the industry's transition to clean energy by investing in sustainable growth and innovative solutions. The Company is taking advantage of favorable trends in clean power generation, transmission and distribution, and LNG infrastructure to deliver superior results.

Sustainable Growth: Through its presence in key growth markets, AES is well-positioned to benefit from the global transition toward a more sustainable power generation mix.

  • In year-to-date 2020, the Company completed construction of 1,437 MW of new projects, including:

  • In year-to-date 2020, the Company was awarded or signed 1,537 MW of renewables and energy storage under long-term Power Purchase Agreements (PPA):

  • The Company's backlog of 6,191 MW of renewables now includes:

  • The Company is on track to reduce its coal-fired generation to below 30% of total generation volume by year-end 2020 (proforma for asset sales announced in 2020) and to less than 10% by year-end 2030.

  • In August 2020, the Company acquired an additional 18.5% interest in AES Tiete in Brazil, bringing its total interest to 43%.

Innovative Solutions: The Company is developing and deploying innovative solutions such as battery-based energy storage, digital customer interfaces and energy management.

  • Fluence, the Company's joint venture with Siemens, is the global leader in the fast-growing energy storage market, which is expected to increase by 15 to 20 GW annually.

  • In July 2020, the Company acquired a 25% stake in 5B, a prefabricated solar solution provider whose patented technology allows solar projects to be installed up to three times faster, while using half the land to achieve the same solar output.

Superior Results: By investing in sustainable growth and offering innovative solutions to customers, the Company is transforming its business mix to deliver superior results.

  • The Company has a resilient and diversified portfolio of electric generation and utilities with credit-worthy offtakers and an average contract life of 14 years.

  • As of June 30, 2020, the Company had $3.5 billion of available liquidity. This includes $2.2 billion of cash and cash equivalents, restricted cash and short-term investments, as well as $1.3 billion available under committed credit lines.

Guidance and Expectations1

The Company is reaffirming its 2020 guidance, expectations and average annual growth rate target through 2022.



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 June 30, 2020.



Non-GAAP Financial Measures

See Non-GAAP Measures for definitions of Adjusted Earnings Per Share and Adjusted Pre-Tax Contributions, as well as reconciliations to the most comparable GAAP financial measures.

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 Thursday, August 6, 2020 at 9:00 a.m. Eastern Daylight Time (EDT).  Interested parties may listen to the teleconference by dialing 1-888-317-6003 at least ten minutes before the start of the call. International callers should dial +1-412-317-6061.  The Conference ID for this call is 9724268.  Internet access to the conference call and presentation materials will be available on the AES website at www.aes.com by selecting "Investors" and then "Presentations and Webcasts."

A webcast replay, as well as a replay in downloadable MP3 format, will be accessible at www.aes.com beginning shortly after the completion of the call.

About AES

The AES Corporation (NYSE: AES) is a Fortune 500 global power company.  We provide affordable, sustainable energy to 14 countries through our diverse portfolio of distribution businesses as well as thermal and renewable generation facilities. Our workforce is committed to operational excellence and meeting the world's changing power needs. Our 2019 revenues were $10 billion and we own and manage $34 billion in total assets. To learn more, please visit www.aes.com. Follow AES on Twitter @TheAESCorp.

Safe Harbor Disclosure

This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES' current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to, our expectations regarding the COVID-19 pandemic, 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 and rates of return consistent with prior experience.

Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES' filings with the Securities and Exchange Commission (the "SEC"), including, but not limited to, the risks discussed under Item 1A: "Risk Factors" and Item 7: "Management's Discussion & Analysis" in AES' 2019  Annual Report on Form 10-K and in subsequent reports filed with the SEC. Readers are encouraged to read AES' filings to learn more about the risk factors associated with AES' business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Any Stockholder who desires a copy of the Company's 2019 Annual Report on Form 10-K filed February 27, 2020 with the SEC may obtain a copy (excluding Exhibits) without charge by addressing a request to the Office of the Corporate Secretary, The AES Corporation, 4300 Wilson Boulevard, Arlington, Virginia 22203. Exhibits also may be requested, but a charge equal to the reproduction cost thereof will be made. A copy of the Form 10-K may be obtained by visiting the Company's website at www.aes.com.

 

THE AES CORPORATION

Condensed Consolidated Statements of Operations (Unaudited)



Three Months Ended June 30,


Six Months Ended June 30,


2020


2019


2020


2019


(in millions, except per share amounts)

Revenue:








Regulated

$

624



$

724



$

1,336



$

1,509


Non-Regulated

1,593



1,759



3,219



3,624


Total revenue

2,217



2,483



4,555



5,133


Cost of Sales:








Regulated

(535)



(605)



(1,127)



(1,240)


Non-Regulated

(1,158)



(1,376)



(2,397)



(2,805)


Total cost of sales

(1,693)



(1,981)



(3,524)



(4,045)


Operating margin

524



502



1,031



1,088


General and administrative expenses

(40)



(49)



(78)



(95)


Interest expense

(218)



(273)



(451)



(538)


Interest income

64



82



134



161


Loss on extinguishment of debt

(40)



(51)



(41)



(61)


Other expense

(3)



(14)



(7)



(26)


Other income

9



18



54



48


Loss on disposal and sale of business interests

(27)



(3)



(27)



(7)


Asset impairment expense



(116)



(6)



(116)


Foreign currency transaction gains (losses)

(6)



22



18



18


Other non-operating expense

(158)





(202)




INCOME FROM CONTINUING OPERATIONS BEFORE TAXES AND
EQUITY IN EARNINGS OF AFFILIATES

105



118



425



472


Income tax expense

(113)



(57)



(202)



(172)


Net equity in earnings (losses) of affiliates

8



5



6



(1)


INCOME FROM CONTINUING OPERATIONS



66



229



299


Gain from disposal of discontinued businesses

3



1



3



1


NET INCOME

3



67



232



300


Less: Net income attributable to noncontrolling interests and redeemable
stock of subsidiaries

(86)



(50)



(171)



(129)


NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION

$

(83)



$

17



$

61



$

171


AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION COMMON
STOCKHOLDERS:








Income (loss) from continuing operations, net of tax

$

(86)



$

16



$

58



$

170


Income from discontinued operations, net of tax

3



1



3



1


NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION

$

(83)



$

17



$

61



$

171


BASIC EARNINGS PER SHARE:








Income (loss) from continuing operations attributable to The AES Corporation
common stockholders, net of tax

$

(0.13)



$

0.02



$

0.09



$

0.26


Income from discontinued operations attributable to The AES Corporation
common stockholders, net of tax

0.01








NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION
COMMON STOCKHOLDERS

$

(0.12)



$

0.02



$

0.09



$

0.26


DILUTED EARNINGS PER SHARE:








Income (loss) from continuing operations attributable to The AES Corporation
common stockholders, net of tax

$

(0.13)



$

0.02



$

0.09



$

0.26


Income from discontinued operations attributable to The AES Corporation
common stockholders, net of tax

0.01








NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION
COMMON STOCKHOLDERS

$

(0.12)



$

0.02



$

0.09



$

0.26


DILUTED SHARES OUTSTANDING

665



667



668



667


 

 

THE AES CORPORATION

Strategic Business Unit (SBU) Information

(Unaudited)










Three Months Ended June 30,


Six Months Ended June 30,

(in millions)

2020


2019


2020


2019

REVENUE








US and Utilities SBU            

$

913



$

976



$

1,884



$

1,995


South America SBU

711



765



1,423



1,610


MCAC SBU

381



478



813



928


Eurasia SBU

214



265



439



604


Corporate and Other

114



16



142



25


Eliminations

(116)



(17)



(146)



(29)


Total Revenue

$

2,217



$

2,483



$

4,555



$

5,133


 

 

THE AES CORPORATION

Condensed Consolidated Balance Sheets (Unaudited)



June 30,
 2020
 


December 31,
2019
 


(in millions, except share
and per share data)



ASSETS




CURRENT ASSETS




Cash and cash equivalents

$

1,417



$

1,029


Restricted cash

364



336


Short-term investments

422



400


Accounts receivable, net of allowance for doubtful accounts of $18 and $20, respectively

1,414



1,479


Inventory

504



487


Prepaid expenses

92



80


Other current assets, net of allowance of $2 and $0, respectively

880



802


Current held-for-sale assets

873



618


Total current assets

5,966



5,231


NONCURRENT ASSETS




Property, Plant and Equipment:




Land

411



447


Electric generation, distribution assets and other

26,925



25,383


Accumulated depreciation

(8,623)



(8,505)


Construction in progress

4,123



5,249


Property, plant and equipment, net

22,836



22,574


Other Assets:




Investments in and advances to affiliates

802



966


Debt service reserves and other deposits

326



207


Goodwill

1,059



1,059


Other intangible assets, net of accumulated amortization of $323 and $307, respectively

566



469


Deferred income taxes

204



156


Loan receivable, net of allowance of $31 and $0, respectively

1,280



1,351


Other noncurrent assets, net of allowance of $27 and $0, respectively

1,527



1,635


Total other assets

5,764



5,843


TOTAL ASSETS

$

34,566



$

33,648


LIABILITIES AND EQUITY




CURRENT LIABILITIES




Accounts payable

$

1,207



$

1,311


Accrued interest

183



201


Accrued non-income taxes

244



253


Accrued and other liabilities

1,247



1,021


Non-recourse debt, including $340 and $337, respectively, related to variable interest entities

2,041



1,868


Current held-for-sale liabilities

526



442


Total current liabilities

5,448



5,096


NONCURRENT LIABILITIES




Recourse debt

3,693



3,391


Non-recourse debt, including $4,375 and $3,872, respectively, related to variable interest entities

15,639



14,914


Deferred income taxes

1,166



1,213


Other noncurrent liabilities

3,103



2,917


Total noncurrent liabilities

23,601



22,435


Commitments and Contingencies




Redeemable stock of subsidiaries

875



888


EQUITY




THE AES CORPORATION STOCKHOLDERS' EQUITY




Common stock ($0.01 par value, 1,200,000,000 shares authorized; 817,964,353 issued and 664,935,827
outstanding at June 30, 2020 and 817,843,916 issued and 663,952,656 outstanding at December 31,
2019)

8



8


Additional paid-in capital

7,670



7,776


Accumulated deficit

(665)



(692)


Accumulated other comprehensive loss

(2,693)



(2,229)


Treasury stock, at cost (153,028,526 and 153,891,260 shares at June 30, 2020 and December 31, 2019,
respectively)

(1,858)



(1,867)


Total AES Corporation stockholders' equity

2,462



2,996


NONCONTROLLING INTERESTS

2,180



2,233


Total equity

4,642



5,229


TOTAL LIABILITIES AND EQUITY

$