The AES Corporation · NYSE:AES
The AES — Merrill Lynch Power & Gas Conference 2007
26 slides from The AES's conference presentation, Sep 25, 2007
Slide 1: AES Corporation: Today. Tomorrow. Making it Happen.
» AES Corporation: Today. Tomorrow. Making it Happen. Victoria Harker, Executive Vice President & CFO Merrill Lynch Power & Gas Conference New York, NY September 25, 2007
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: A Global Opportunity
» A Global Opportunity Contains Forward Looking Statements › Industry Leadership – Over 25 years of development, construction & operational experience – Operations in 28 countries on 5 continents managing $33 billion assets › Diversified Portfolio – 44 GW generation plants largely contracted under l
Slide 4: AES is Among the Largest Global Power Companies
» AES is Among the Largest Global Power Companies Contains Forward Looking Statements 1,015 MW Wind Generation in the United States 127 Power Plants totaling 44 GW gross generation capacity Coal 42% Gas 32% Hydro 17% Wind 3% Other Thermal 6% 13 Utilities with sales of over 73,000 GWh Note: Not owner
Slide 5: Track Record of Meeting our Commitments
» Track Record of Meeting our Commitments Contains Forward Looking Statements › High free cash flow generation positions AES to take advantage of continued de-levering, opportunistic acquisitions and platform expansion opportunities Adjusted Earnings Per Share(1) Operating Cash Flow % 2,500 $2,360 1
Slide 6: Price Appreciation and Improved Credit Ratings
» Price Appreciation and Improved Credit Ratings Contains Forward Looking Statements › Improvements in operational performance and financial profile are reflected in price appreciation at our public subsidiaries and credit ratings upgrades Public Subsidiary Price Performance(1) Credit Ratings Histor
Slide 7: Balanced Debt Maturity Profile
» Balanced Debt Maturity Profile Contains Forward Looking Statements › Average annual maturities within parent free cash flow generation Recourse Debt & Trust Preferred Maturity Schedule $800 $600 $478 $400 $213 $200 $467 $423 $202 $200 $0 2007 2008 2009 2010 2011 Trust Preferreds Senior Unsecured N
Slide 8: Managing Commodity and Interest Rate Risks
» Managing Commodity and Interest Rate Risks Contains Forward Looking Statements › 72% of our generation portfolio is under long- › As a prudent policy, we maintain term contracts(1) approximately 80% of our total debt in fixed rates to hedge our interest rate exposure › We actively monitor our rema
Slide 9: A Leader in Global Power and Alternative Energy
» A Leader in Global Power and Alternative Energy Contains Forward Looking Statements AES Growth Global Potential Assumptions in within next 5 years 2011 Guidance › 4,000 MW on line Power 500-700 GW(1) 6,500 MW(4) › 2,500 MW under construction Wind 100,000 MW(2) 2,100 MW Greenhouse 2 Billion Tons(3)
Slide 10: Development and Construction Experience
» Development and Construction Experience Contains Forward Looking Statements › In 2006 - 2007 completed 4 plants totaling 1,679 MW, all with long-term contracts › Currently 1,682 MW under construction in 4 countries: Bulgaria Chile Chile Panama Jordan Project Maritza East Guacolda III Nueva Ventana
Slide 11: Core Power Development Update
» Core Power Development Update Contains Forward Looking Statements Medium to Advanced Stage Projects Geographic breakdown 2011 (15 GW) Target Europe, CIS 6,500 MW and Africa 23% Already announced 1,762 MW: Philippines 660 MW(1) Asia & South Africa 1,102 MW(1) Middle East 47% Latin America 15 GW pro
Slide 12: Core Power Development Pipeline
» Core Power Development Pipeline Contains Forward Looking Statements › Examples of projects beyond early stage development: Type Project Estimated Fuel Estimated Country Gross MW Economic Ownership GREENFIELD Greenfield Mong Duong 1,200 Coal 90% Vietnam Greenfield Musi Rawas 1,200 Coal 70% Indonesi
Slide 13: Core Power Acquisition Example: Masinloc
» Core Power Acquisition Example: Masinloc Contains Forward Looking Statements › 660MW (gross) coal fired power plant commissioned in 1998 › $930 million acquisition expected to be closed in Q4 2007 – Seller financing available for up to 60% of the purchase price › Lowest cost thermal plant in the s
Slide 14: Greenfield Investment Example: Bulgaria
» Greenfield Investment Example: Bulgaria Contains Forward Looking Statements › 670MW lignite-fired power plant › $1.4 billion project cost – ~70% (~$1 billion) non recourse financing provided by commercial banks and multilaterals. – AES equity commitment already funded through a letter of credit ›
Slide 15: Alternative Energy: Wind Generation
» Alternative Energy: Wind Generation Contains Forward Looking Statements › Global installed capacity expected to more than triple by 2015 › AES currently operates over 1,000 MW wind generation › Already achieved 400 MW of our 2,100 MW goal – 186 MW acquisition from GE Energy in 2Q07 – Completed con
Slide 16: Alternative Energy: Climate Change
» Alternative Energy: Climate Change Contains Forward Looking Statements › New environmental regulations expected to create a $10 billion a year market for emission offset credits › Aggregation contracts signed in Europe, China, Malaysia, Indonesia and South America for over 8 million tons of annual
Slide 17: AES Climate Change Strategy
» AES Climate Change Strategy Contains Forward Looking Statements › Strategic approach Business as Usual Emissions – Invest in large scale, low cost methods for creating certified Development and emissions reductions (CERs) in deployment of developing countries for delivery technologies that against
Slide 18: Adjusted EPS Guidance for the Next Five Years
» Adjusted EPS(1) Guidance for the Next Five Years Contains Forward Looking Statements 2006 – 2011 CAGR $ Per Share $2.50 13% - 18% $2.15 $2.00 $1.85 $1.45 $1.75 $1.50 $1.55 $1.20 $1.07 $1.25 $1.00 $1.12 $0.93 $0.50 $0.64 $0.40 2004 2005 2006 2007 2008 2009 2010 2011 (2) (2) (2) (2) (1)A non-GAAP fi
Slide 19: Forecast Shows Strong Cash Flow Growth
» Forecast Shows Strong Cash Flow Growth Contains Forward Looking Statements $3.0-4.0 $ Billions 4.0 $2.5-3.3 2.3-3.3 3.0 $2.4-2.7 1.8-2.6 $2.3-2.5 1.5-2.5 $2.2-2.3 1.6-2.0 1.4-2.1 2.0 1.5-1.8 1.2-1.6 1.2-1.4 1.2-1.4 1.1 1.0 0.0 2007 2008 2009 2010 2011 Net Cash from Operating Activities Free Cash F
Slide 20: Adjusted EPS Growth Driven by Four Factors
» Adjusted EPS(1) Growth Driven by Four Factors Contains Forward Looking Statements $ Per Share $2.50 $2.15 Core Power $2.00 $1.75 Alternative Energy $1.50 Construction $1.07 Existing Operating $1.00 $0.93 Businesses $0.50 $- 2006 2007 2011 2011 Adjusted Low(2) High(2) EPS(1) (1)A non-GAAP financial
Slide 21: Summary
» Summary Contains Forward Looking Statements › Solid Fundamentals and Operating Model –Project Finance skills –Operating and Turnaround Expertise › Global Reach, Local Insights › Experienced in Leveraging Market Opportunities and Industry Dynamics › Rigorous Capital Allocation and Risk Management ›
Slide 22: Appendix
» Appendix AES Corporation 22
Slide 23: AES Brazil Business Structure
» AES Brazil Business Structure Holding Company 100% V 100% E AES BNDES Intermediary Holding Co. 50.1% V 46.2% E 49.9% V 53.8% E Operating company 100% V 100% E Brasiliana 71.3% V 52.5% E 100% V 100% E 98.3% V 98.3% E 0% V 4.4% E Elpa 77.8% V 31.0% E Sul Eletropaulo Tieté Uruguaiana 100% V 100% E 38
Slide 24: 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 consisten
Slide 25: Definitions of Non-GAAP Financial Measures
» Definitions of Non-GAAP Financial Measures › Adjusted earnings per share – 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 transaction impacts on t
Slide 26: Reconciliation of 2011 Guidance Elements
» Reconciliation of 2011 Guidance Elements Contains Forward Looking Statements Reconciliation of 2003 and 2004 Adjusted EPS 2004 2005 2006 2007 Diluted Earnings Per Share From Continuing $0.27 $0.61 $0.20 $1.04 Operations FAS 133 Mark-to-Market (Gains)/Losses (0.01) - - 0.02 Currency Transaction (Ga