SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20349
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): April 4, 2006
THE AES CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE |
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001-12291 |
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54-1163725 |
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(State of Incorporation) |
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(Commission File No.) |
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(IRS Employer Identification No.) |
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4300 Wilson Boulevard, Suite 1100 |
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(Address of principal executive offices, including zip code) |
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Registrant’s telephone number, including area code: |
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(703) 522-1315 |
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NOT APPLICABLE |
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(Former Name or Former Address, if changed since last report) |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On April 4, 2006, The AES Corporation (“the Company”) announced via press release in connection with reporting its 2005 financial results that it is restating its previously reported financial statements as a result of errors discovered by management of the Company. The full text of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On April 4, 2006 The AES Corporation issued a press release announcing its Fourth Quarter and Full Year 2005 Results and Fourth Quarter and Full Year 2005 Results Financial Review presentation teleconference to be held on Thursday, April 6, 2006, and posted on the Company’s website the AES Investor Presentation that will be referenced in investor discussions prior to and during the financial review. A copy of the Fourth Quarter and Full Year 2005 Press Release is attached hereto as Exhibit 99.1.
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Item 9.01 Financial Statements and Exhibits
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(d) |
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Exhibits |
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Exhibit No. |
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Description |
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99.1 |
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Press Release issued by The AES Corporation, dated April 4, 2006, AES Reports Fourth Quarter and Full-Year 2005 Results; Full-Year Diluted EPS from Continuing Operations up 132% and Net Cash from Operating Activities up 38%; Certain Prior Period Results Restated |
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Item 8.01: Other Events
THE AES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
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Quarter Ended |
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Year Ended |
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December 31, |
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December 31, |
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($ in millions, except per share amounts) |
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2005 |
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2004 (Restated) |
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2005 |
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2004 (Restated) |
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Revenues |
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$ |
2,973 |
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$ |
2,523 |
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$ |
11,086 |
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$ |
9,463 |
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Cost of sales |
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(2,044 |
) |
(1,817 |
) |
(7,908 |
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(6,681 |
) |
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GROSS MARGIN |
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929 |
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706 |
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3,178 |
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2,782 |
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General and administrative expenses |
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(78 |
) |
(52 |
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(221 |
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(182 |
) |
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Interest expense |
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(504 |
) |
(493 |
) |
(1,896 |
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(1,932 |
) |
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Interest income |
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111 |
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91 |
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391 |
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282 |
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Other (expense) income, net |
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(22 |
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36 |
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19 |
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12 |
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Loss on sale of investments, asset and goodwill impairment expense |
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— |
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(40 |
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— |
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(45 |
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Foreign currency transaction (losses) on net monetary position |
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(35 |
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(58 |
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(89 |
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(165 |
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Equity in earnings of affiliates |
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10 |
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13 |
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76 |
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70 |
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INCOME BEFORE INCOME TAXES AND MINORITY INTEREST |
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411 |
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203 |
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1,458 |
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822 |
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Income tax expense |
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(93 |
) |
(148 |
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(465 |
) |
(359 |
) |
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Minority interest expense |
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(139 |
) |
(36 |
) |
(361 |
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(199 |
) |
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INCOME FROM CONTINUING OPERATIONS |
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179 |
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19 |
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632 |
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264 |
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Income from operations of discontinued businesses (net of income tax benefit of $0, $4, $0 and $36, respectively) |
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— |
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82 |
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— |
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34 |
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INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE |
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179 |
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101 |
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632 |
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298 |
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Cumulative effect of accounting change |
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(2 |
) |
— |
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(2 |
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— |
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NET INCOME |
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$ |
177 |
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$ |
101 |
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$ |
630 |
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$ |
298 |
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DILUTED EARNINGS PER SHARE |
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Income from continuing operations |
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$ |
0.27 |
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$ |
0.03 |
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$ |
0.95 |
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$ |
0.41 |
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Discontinued operations |
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— |
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0.13 |
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— |
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0.05 |
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Cumulative effect of accounting change |
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— |
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— |
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— |
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— |
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Diluted Earnings Per Share |
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$ |
0.27 |
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$ |
0.16 |
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$ |
0.95 |
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$ |
0.46 |
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Diluted weighted average shares outstanding (in millions) |
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661 |
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656 |
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665 |
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648 |
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4
THE AES CORPORATION
SEGMENT INFORMATION (unaudited)
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Quarter Ended |
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Year Ended |
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December 31, |
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December 31, |
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($ in millions) |
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2005 |
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2004 (Restated) |
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2005 |
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2004 (Restated) |
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BUSINESS SEGMENTS |
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REVENUES |
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Regulated Utilities |
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$ |
1,537 |
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$ |
1,355 |
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$ |
5,737 |
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$ |
4,897 |
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Contract Generation |
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1,118 |
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904 |
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4,137 |
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3,546 |
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Competitive Supply |
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318 |
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264 |
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1,212 |
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1,020 |
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Total revenues |
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$ |
2,973 |
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$ |
2,523 |
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$ |
11,086 |
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$ |
9,463 |
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GROSS MARGIN |
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Regulated Utilities |
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$ |
416 |
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$ |
275 |
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$ |
1,237 |
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$ |
1,116 |
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Contract Generation |
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405 |
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374 |
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1,603 |
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1,428 |
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Competitive Supply |
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108 |
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57 |
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338 |
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238 |
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Total gross margin |
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$ |
929 |
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$ |
706 |
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$ |
3,178 |
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$ |
2,782 |
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INCOME BEFORE INCOME TAXES AND MINORITY INTEREST |
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Regulated Utilities |
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$ |
275 |
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$ |
222 |
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$ |
786 |
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$ |
634 |
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Contract Generation |
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236 |
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140 |
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1,049 |
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726 |
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Competitive Supply |
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80 |
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13 |
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267 |
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153 |
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Corporate |
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(180 |
) |
(172 |
) |
(644 |
) |
(691 |
) |
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Total income before income taxes and minority interest |
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$ |
411 |
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$ |
203 |
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$ |
1,458 |
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$ |
822 |
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GEOGRAPHIC SEGMENTS |
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REVENUES |
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Latin America |
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$ |
1,727 |
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$ |
1,413 |
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$ |
6,420 |
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$ |
5,136 |
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North America |
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727 |
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645 |
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2,776 |
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2,589 |
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Europe/Middle East/Africa (EMEA) |
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429 |
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397 |
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1,587 |
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1,481 |
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Asia |
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90 |
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68 |
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303 |
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257 |
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Corporate |
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— |
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— |
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— |
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— |
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Total revenues |
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$ |
2,973 |
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$ |
2,523 |
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$ |
11,086 |
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$ |
9,463 |
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INCOME BEFORE INCOME TAXES AND MINORITY INTEREST |
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|
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Latin America |
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$ |
345 |
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$ |
232 |
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$ |
1,090 |
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$ |
617 |
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North America |
|
114 |
|
112 |
|
538 |
|
530 |
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Europe/Middle East/Africa (EMEA) |
|
110 |
|
38 |
|
387 |
|
308 |
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Asia |
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22 |
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(7 |
) |
87 |
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58 |
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Corporate |
|
(180 |
) |
(172 |
) |
(644 |
) |
(691 |
) |
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Total income before income taxes and minority interest |
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$ |
411 |
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$ |
203 |
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$ |
1,458 |
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$ |
822 |
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5
THE AES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
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December 31, |
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December 31, |
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($ in millions) |
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2005 |
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2004 (Restated) |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
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$ |
1,390 |
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$ |
1,281 |
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Restricted cash |
|
420 |
|
395 |
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Short term investments |
|
203 |
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268 |
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Accounts receivable, net of reserves of $279 and $303, respectively |
|
1,615 |
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1,530 |
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Inventory |
|
460 |
|
418 |
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Receivable from affiliates |
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2 |
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8 |
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Deferred income taxes - current |
|
267 |
|
218 |
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Prepaid expenses |
|
119 |
|
87 |
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Other current assets |
|
756 |
|
781 |
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Total current assets |
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5,232 |
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4,986 |
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PROPERTY, PLANT AND EQUIPMENT |
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Land |
|
860 |
|
788 |
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Electric generation and distribution assets |
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22,440 |
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21,729 |
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Accumulated depreciation and amortization |
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(6,087 |
) |
(5,259 |
) |
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Construction in progress |
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1,441 |
|
919 |
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Property, plant and equipment, net |
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18,654 |
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18,177 |
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|
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OTHER ASSETS |
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Deferred financing costs, net |
|
294 |
|
343 |
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Investment in and advances to affiliates |
|
670 |
|
655 |
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Debt service reserves and other deposits |
|
611 |
|
737 |
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Goodwill, net |
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1,428 |
|
1,419 |
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Deferred income taxes - noncurrent |
|
807 |
|
774 |
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Other assets |
|
1,736 |
|
1,832 |
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Total other assets |
|
5,546 |
|
5,760 |
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|
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|
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TOTAL ASSETS |
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$ |
29,432 |
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$ |
28,923 |
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|
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES |
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Accounts payable |
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$ |
1,104 |
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$ |
1,081 |
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Accrued interest |
|
382 |
|
335 |
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Accrued and other liabilities |
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2,122 |
|
1,707 |
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Recourse debt-current portion |
|
200 |
|
142 |
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Non-recourse debt-current portion |
|
1,598 |
|
1,619 |
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Total current liabilities |
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5,406 |
|
4,884 |
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|
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LONG-TERM LIABILITIES |
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Non-recourse debt |
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11,226 |
|
11,817 |
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Recourse debt |
|
4,682 |
|
5,010 |
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Deferred income taxes |
|
721 |
|
678 |
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Pension liabilities |
|
857 |
|
891 |
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Other long-term liabilities |
|
3,280 |
|
3,382 |
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Total long-term liabilities |
|
20,766 |
|
21,778 |
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|
|
|
|
|
|
|
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Minority Interest |
|
1,611 |
|
1,305 |
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|
|
|
|
|
|
|
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STOCKHOLDERS’ EQUITY |
|
|
|
|
|
||
|
Common stock |
|
7 |
|
7 |
|
||
|
Additional paid-in capital |
|
6,517 |
|
6,434 |
|
||
|
Accumulated deficit |
|
(1,214 |
) |
(1,844 |
) |
||
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Accumulated other comprehensive loss |
|
(3,661 |
) |
(3,641 |
) |
||
|
Total stockholders’ equity |
|
1,649 |
|
956 |
|
||
|
|
|
|
|
|
|
||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
29,432 |
|
$ |
28,923 |
|
6
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
|
|
|
Year Ended December 31, |
|
||||
|
($ in millions) |
|
2005 |
|
2004 (Restated) |
|
||
|
|
|
|
|
|
|
||
|
OPERATING ACTIVITIES |
|
|
|
|
|
||
|
Net income |
|
$ |
630 |
|
$ |
298 |
|
|
Adjustments to net income: |
|
|
|
|
|
||
|
Depreciation and amortization of intangible assets |
|
889 |
|
799 |
|
||
|
Loss from sale of investments and goodwill and asset impairment expense |
|
43 |
|
45 |
|
||
|
Gain on disposal and impairment write-down associated with discontinued operations |
|
— |
|
(98 |
) |
||
|
Provision for deferred taxes |
|
100 |
|
190 |
|
||
|
Minority interest expense |
|
361 |
|
199 |
|
||
|
Other |
|
92 |
|
322 |
|
||
|
Changes in operating assets and liabilities: |
|
|
|
|
|
||
|
Decrease (increase) in accounts receivable |
|
26 |
|
(128 |
) |
||
|
Increase in inventory |
|
(73 |
) |
(33 |
) |
||
|
Decrease in prepaid expenses and other current assets |
|
41 |
|
7 |
|
||
|
(Decrease) increase in accounts payable and accrued liabilities |
|
(79 |
) |
78 |
|
||
|
Other assets and liabilities |
|
135 |
|
(108 |
) |
||
|
Net cash provided by operating activities |
|
2,165 |
|
1,571 |
|
||
|
|
|
|
|
|
|
||
|
INVESTING ACTIVITIES |
|
|
|
|
|
||
|
Property additions |
|
(1,143 |
) |
(892 |
) |
||
|
Proceeds from the sale of assets |
|
26 |
|
63 |
|
||
|
Sale of short-term investments |
|
1,496 |
|
1,387 |
|
||
|
Purchase of short-term investments |
|
(1,344 |
) |
(1,371 |
) |
||
|
Acquisitions, net of cash acquired |
|
(85 |
) |
— |
|
||
|
Proceeds from the sale of of emisson allowances |
|
41 |
|
— |
|
||
|
Decrease (increase) in restricted cash |
|
58 |
|
(32 |
) |
||
|
Decrease (increase) in debt service reserves and other assets |
|
68 |
|
(151 |
) |
||
|
Other investing |
|
10 |
|
(29 |
) |
||
|
Net cash used in investing activities |
|
(873 |
) |
(1,025 |
) |
||
|
|
|
|
|
|
|
||
|
FINANCING ACTIVITIES |
|
|
|
|
|
||
|
(Repayments) borrowings under the revolving credit facilities, net |
|
53 |
|
— |
|
||
|
Issuance of recourse debt |
|
5 |
|
491 |
|
||
|
Issuance of non-recourse debt and other coupon bearing securities |
|
1,884 |
|
2,449 |
|
||
|
Repayments of recourse debt |
|
(259 |
) |
(1,140 |
) |
||
|
Repayments of non-recourse debt and other coupon bearing securities |
|
(2,682 |
) |
(2,534 |
) |
||
|
Payments for deferred financing costs |
|
(21 |
) |
(109 |
) |
||
|
Distributions to minority interests |
|
(186 |
) |
(139 |
) |
||
|
Contributions from minority interests |
|
1 |
|
28 |
|
||
|
Issuance of common stock |
|
26 |
|
16 |
|
||
|
Other financing |
|
(16 |
) |
2 |
|
||
|
Net cash used in financing activities |
|
(1,195 |
) |
(936 |
) |
||
|
Effect of exchange rate changes on cash |
|
12 |
|
8 |
|
||
|
|
|
|
|
|
|
||
|
Total increase (decrease) in cash and cash equivalents |
|
109 |
|
(382 |
) |
||
|
Cash and cash equivalents, beginning |
|
1,281 |
|
1,663 |
|
||
|
Cash and cash equivalents, ending |
|
$ |
1,390 |
|
$ |
1,281 |
|
7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf of the undersigned hereunto duly authorized.
|
|
THE AES CORPORATION |
||
|
|
|
||
|
Date: April 4, 2006 |
By: |
/s/ Cathy M. Freeman |
|
|
|
|
Name: Cathy M. Freeman |
|
|
|
|
Title: Vice President and Corporate Controller |
|
8
EXHIBIT INDEX
|
No. |
|
Description |
|
99.1 |
|
Press Release issued by The AES Corporation, dated April 4, 2006, AES Reports Fourth Quarter and Full-Year 2005 Results; Full-Year Diluted EPS from Continuing Operations up 132% and Net Cash from Operating Activities up 38%; Certain Prior Period Results Restated |
9