The Aes Corporation · NYSE:AES
The Aes — Q2 2006 Earnings Presentation
23 slides from The Aes's earnings presentation, Aug 7, 2006
Slide 1: AES Corporation Second Quarter 2006 Financial Review
AES Corporation Second Quarter 2006 Financial Review August 7, 2006 The Global Power Company
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure Certain statements in the following presentation regarding AES’s business operations may constitute “forward looking statements.” Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance.
Slide 3: Second Quarter 2006 Highlights
Second Quarter 2006 Highlights ($ Millions except earnings per share and percent) Second Quarter Revenue Comparison 2006 2005 Change Period-Over-Period Revenues $3,038 $2,649 15% Price/Volume/Allowances 10% Gross Margin (1) $919 $526 75% New projects (3) 1% as % of Sales 30.3% 19.9% 1,040b.p. Curren
Slide 4: Reconciliation of Adjusted Earnings Per Share
Reconciliation of Adjusted Earnings Per Share ($ Per Share) Six Months Second Quarter Ended June 30, 2006 2005 2006 2005 Diluted Earnings Per Share From Continuing $0.31 $0.13 $0.85 $0.31 Operations FAS 133 Mark-to-Market (Gains)/Losses (0.01) 0.02 (0.02) 0.02 Currency Transaction (Gains)/Losses (0.
Slide 5: Second Quarter 2006 Earnings Bridge
Second Quarter 2006 Earnings Bridge $0.05 $(0.09) $(0.14) $0.30 $0.31 $0.29 $(0.02) $0.13 $0.06 2Q05 2005 Brazil Higher Lower Lower Higher 2Q06 Adjusted 2Q06 Diluted EPS Receivables Gross Interest IBT&MI Income Diluted EPS Adjusted From Reserve and Margin Expense, (Net of Taxes & EPS Factors EPS (1)
Slide 6: Second Quarter Cash Flow Highlights
Second Quarter Cash Flow Highlights ($ Millions) Second Quarter 2006 2005 (2) Subsidiary-Only Subsidiary Net Cash from Operating Activities (1) $1,316 $496 Consolidated Net Cash from Operating Activities $434 $328 Free Cash Flow (1) $243 $182 Parent-Only Subsidiary Distributions (1) $177 $170 Return
Slide 7: Second Quarter Subsidiary Distributions
Second Quarter Subsidiary Distributions ($ Millions) Second Quarter 2006 Subsidiary Distributions(1) North Latin Europe & Asia & America America Africa Middle East Total Regulated $64 $0 $10 $0 $74 Utilities Contract $18 $31 $17 $25 $91 Generation Competitive $5 $7 $0 $0 $12 Supply Total (1) $87 $38
Slide 8: Segment Highlights: Regulated Utilities
Second Quarter Segment Highlights Regulated Utilities ($ Millions except as noted) Second Quarter % 2006 2005 Change Segment Highlights Revenues $1,506 $1,376 9% • Revenues increased primarily from Gross Margin $408 $112 264% favorable foreign exchange rates in Latin America and higher fuel cost as
Slide 9: Segment Highlights: Contract Generation
Second Quarter Segment Highlights Contract Generation ($ Millions except as noted) Second Quarter % 2006 2005 Change Segment Highlights Revenues $1,199 $988 21% • The increases are driven primarily by Gross Margin $415 $353 18% higher demand in Pakistan, higher demand and pricing in Latin America as
Slide 10: Segment Highlights: Competitive Supply
Second Quarter Segment Highlights Competitive Supply ($ Millions except as noted) Second Quarter % 2006 2005 Change Segment Highlights Revenues $333 $285 17% • Revenues increased primarily as a Gross Margin $96 $61 57% result of better prices and volume in New York, higher prices in Argentina, as %
Slide 11: 2006 Financial Guidance Update: Income Statement
2006 Financial Guidance Update: Income Statement Contains Forward Looking Statements 2006 Guidance Element Updated Guidance Prior Guidance Revenue Growth (% change) 7 to 8% 4 to 5% Gross Margin $3.5 to $3.6 billion $3.2 to $ 3.3 billion Business Segment Income Before Tax & Minority Interest $2.4 to
Slide 12: 2006 Financial Guidance Update: Cash Flow and Sensitivities
2006 Financial Guidance Update: Cash Flow and Sensitivities Contains Forward Looking Statements 2006 Guidance Element Updated Guidance Prior Guidance Net Cash From Operating Activities $2.2 to $2.3 billion $2.2 to $2.3 billion Maintenance Capital Expenditures $800 to $900 million $800 to $900 millio
Slide 13: Appendix
Appendix 13 2Q06 Financial Review www.aes.com
Slide 14: Segment Reporting Changes
Segment Reporting Changes Contains Forward Looking Statements Business Segments: Contract Generation Contract Generation Competitive Supply Competitive Supply Regulated Utilities Regulated Utilities New Format Prior Format Geographic Segments: North America Asia & ME North America Asia US/Puerto Ric
Slide 15: Parent Sources and Uses of Cash
Parent Sources and Uses of Cash ($ Millions) Six Month Second Quarter Ended June 30, Sources 2006 2006 Total Subsidiary Distributions(1) $177 $308 Proceeds from Asset Sales, Net 80 188 Refinancing Proceeds, Net -- -- Increased Senior Unsecured Credit Facility Commitments 100 600 Issuance of Common S
Slide 16: Reconciliation of Changes to Debt Balances
Second Quarter 2006 Reconciliation of Changes to Debt Balances ($ Millions) Debt Reconciliation Parent Debt (Including Letters of Credit) at 12/31/05 (1) $5,176 Scheduled Debt Maturities: -- Discretionary Debt Repayments: Prepayment of Debt (115) Other (2) 400 Parent Debt (Including Letters of Credi
Slide 17: Second Quarter 2006 Consolidated Cash Flow
Second Quarter 2006 Consolidated Cash Flow ($ Millions) Subsidiaries AES Corp (1) Eliminations Consolidated Net Cash from Operating Activities (2) $630 $(32) $(164) $434 Property Additions (372) 11 -- (361) Project Development Costs 12 (26) -- (14) Investment in Subsidiaries (35) (132) 167 -- Return
Slide 18: Six Months Ended June 30, 2006 Consolidated Cash Flow
Six Months Ended June 30, 2006 Consolidated Cash Flow ($ Millions) Subsidiaries AES Corp (1) Eliminations Consolidated Net Cash from Operating Activities (2) $1,316 $25 $(364) $977 Property Additions (570) (23) -- (593) Project Development Costs (1) (26) -- (27) Investment in Subsidiaries (44) (248)
Slide 19: Reconciliation of Subsidiary Distributions and Parent Liquidity
Reconciliation of Subsidiary Distributions and Parent Liquidity ($ Millions) Quarter Ended Total subsidiary distributions June 30, Mar. 31, Dec. 31, Sept. 30, June 30, & returns of capital to Parent 2006 2006 2005 2005 2005 Subsidiary distributions to Parent $177 $132 $354 $274 $170 Net distribution
Slide 20: Assumptions
Assumptions Forecasted financial information is based on certain material assumptions. Such assumptions include, but are not limited to: (a) no unforeseen external events such as wars, depressions, or economic or political disruptions occur; (b) businesses continue to operate in a manner consistent
Slide 21: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures • Adjusted earnings per share (a non-GAAP financial measure), is defined as diluted earnings per share from continuing operations excluding gains or losses associated with (a) mark-to-market amounts related to FAS 133 derivative transactions, (b) foreign currency tra
Slide 22: Reconciliation of Cash Flow Items
Reconciliation of Cash Flow Items Net Cash from Operating Activities ($ Millions) AES Corp & Subsidiaries QHCs (1) Eliminations Consolidated Second Quarter 2006 $630 $(32) $(164) $434 Six Months Ended June 30, 2006 $1,316 $25 $(364) $977 Property Additions ($ Millions) Six Months Ended Second Quarte
Slide 23: Calculations of Return on Invested Capital
Second Quarter Calculations of Return on Invested Capital ($ Millions except percent) Rolling Twelve Rolling Twelve Third Fourth First Second Months Third Fourth First Second Months Quarter Quarter Quarter Quarter Second Quarter Quarter Quarter Quarter Quarter Second Quarter Net Operating Profit Aft