<PAGE>
================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-19281
THE AES CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 54-1163725
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1001 NORTH 19TH STREET, ARLINGTON, VIRGINIA 22209
(Address of Principal Executive Offices) (Zip Code)
(703) 522-1315
(Registrant's Telephone Number, Including Area Code)
----------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
----------
The number of shares outstanding of Registrant's Common Stock, par
value $0.01 per share, at July 31, 2000, was 456,774,338.
================================================================================
<PAGE>
THE AES CORPORATION
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
----
<S> <C>
Item 1. Interim Financial Statements:
Consolidated Statements of Operations...........................................................1
Consolidated Balance Sheets.....................................................................2
Consolidated Statements of Cash Flows...........................................................3
Notes to Consolidated Financial Statements......................................................4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations......................................................................................9
Item 3. Quantitative and Qualitative Disclosures About Market Risk.....................................14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings..............................................................................15
Item 2. Changes in Securities and Use of Proceeds......................................................15
Item 3. Defaults Upon Senior Securities................................................................15
Item 4. Submission of Matters to a Vote of Security Holders............................................15
Item 5. Other Information..............................................................................16
Item 6. Exhibits and Reports on Form 8-K...............................................................16
Signatures..............................................................................................20
</TABLE>
<PAGE>
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
--------------------- ---------------------
6/30/00 6/30/99 6/30/00 6/30/99
------- ------- ------- -------
($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
REVENUES:
Sales and services ....................................... $ 1,538 $ 640 $ 3,014 $ 1,278
OPERATING COSTS AND EXPENSES:
Cost of sales and services ............................... 1,203 412 2,260 830
Selling, general and administrative expenses ............. 19 15 48 31
------- ------- ------- -------
TOTAL OPERATING COSTS AND EXPENSES .......................... 1,222 427 2,308 861
------- ------- ------- -------
OPERATING INCOME ............................................ 316 213 706 417
OTHER INCOME AND (EXPENSE):
Interest expense ......................................... (313) (143) (582) (276)
Interest and other income ................................ 69 12 100 31
Equity in earnings (loss) before income tax .............. 99 37 217 (54)
------- ------- ------- -------
INCOME BEFORE INCOME TAXES, MINORITY INTEREST
AND EXTRAORDINARY ITEM ................................... 171 119 441 118
Income tax provision ..................................... 43 34 114 28
Minority interest ........................................ 17 14 35 32
------- ------- ------- -------
Income before extraordinary item ......................... 111 71 292 58
EXTRAORDINARY ITEM, NET OF TAX - EARLY EXTINGUISHMENT OF DEBT -- -- (7) --
------- ------- ------- -------
NET INCOME .................................................. $ 111 $ 71 $ 285 $ 58
======= ======= ======= =======
BASIC EARNINGS PER SHARE:
Before extraordinary item ................................ $ 0.26 $ 0.19 $ 0.69 $ 0.16
Extraordinary item ....................................... -- -- (0.02) --
------- ------- ------- -------
Total .................................................... $ 0.26 $ 0.19 $ 0.67 $ 0.16
======= ======= ======= =======
DILUTED EARNINGS PER SHARE:
Before extraordinary item ................................ $ 0.25 $ 0.18 $ 0.66 $ 0.16
Extraordinary item ....................................... -- -- (0.02) --
------- ------- ------- -------
Total .................................................... $ 0.25 $ 0.18 $ 0.64 $ 0.16
======= ======= ======= =======
</TABLE>
See Notes to Consolidated Financial Statements.
1
<PAGE>
THE AES CORPORATION
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2000 AND DECEMBER 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
-------- --------
($ IN MILLIONS)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................................ $ 1,200 $ 669
Short-term investments ............................................... 190 164
Acounts receivable (net of reserves of $128 and $104 respectively) ... 1,331 934
Inventory ............................................................ 437 307
Receivable from affiliates ........................................... 33 2
Deferred income taxes ................................................ 289 184
Contract receivable .................................................. 543 --
Prepaid expenses and other current assets ............................ 459 327
-------- --------
Total current assets ................................................. 4,482 2,587
PROPERTY, PLANT AND EQUIPMENT:
Land ................................................................. 276 216
Electric generation and distribution assets .......................... 16,001 12,552
Accumulated depreciation and amortization ............................ (952) (763)
Construction in progress ............................................. 1,903 1,442
-------- --------
Property, plant and equipment, net ................................... 17,228 13,447
OTHER ASSETS:
Deferred financing costs, net ........................................ 276 236
Project development costs ............................................ 93 53
Investments in and advances to affiliates ............................ 3,504 1,575
Debt service reserves and other deposits ............................. 441 328
Electricity sales concessions and contracts, net ..................... 1,158 1,056
Goodwill, net ........................................................ 802 795
Other assets ......................................................... 1,036 803
-------- --------
Total other assets ................................................... 7,310 4,846
-------- --------
TOTAL ................................................................... $ 29,020 $ 20,880
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ..................................................... $ 398 $ 381
Accrued interest ..................................................... 257 218
Accrued and other liabilities ........................................ 1,379 755
Other notes payable - current portion ................................ -- 335
Project financing debt - current portion ............................. 2,192 881
-------- --------
Total current liabilities ............................................ 4,226 2,570
LONG-TERM LIABILITIES:
Project financing debt ............................................... 10,911 8,651
Other notes payable .................................................. 2,617 2,167
Deferred income taxes ................................................ 2,619 1,787
Other long-term liabilities .......................................... 1,409 602
-------- --------
Total long-term liabilities .......................................... 17,556 13,207
MINORITY INTEREST ....................................................... 1,720 1,148
COMPANY-OBLIGATED CONVERTIBLE MANDATORILY REDEEMABLE PREFERRED SECURITIES
OF SUBSIDIARY TRUSTS HOLDING SOLELY JUNIOR SUBORDINATED DEBENTURES OF AES 1,528 1,318
STOCKHOLDERS' EQUITY:
Common stock ......................................................... 5 2
Additional paid-in capital ........................................... 3,781 2,617
Retained earnings .................................................... 1,406 1,120
Accumulated other comprehensive loss ................................. (1,202) (1,102)
-------- --------
Total stockholders' equity ........................................... 3,990 2,637
-------- --------
TOTAL ................................................................... $ 29,020 $ 20,880
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE>
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------------
2000 1999
------- -------
($ IN MILLIONS)
<S> <C> <C>
OPERATING ACTIVITIES:
Net cash provided by operating activities .............................. $ 611 $ 159
INVESTING ACTIVITIES:
Property additions ..................................................... (595) (298)
Construction contract payment .......................................... (291) --
Acquisitions, net of cash acquired ..................................... (1,517) (1,374)
Proceeds from the sales of assets ...................................... -- 666
Sale of short-term investments, net .................................... 20 4
Affiliate advances and equity investments .............................. (284) (142)
Project development costs .............................................. (52) (31)
Increase in restricted cash ............................................ (46) --
Debt service reserves and other assets ................................. (43) (190)
------- -------
Net cash used in investing activities ................................. (2,808) (1,365)
FINANCING ACTIVITIES:
Borrowings (repayments) under the revolver ............................. 115 (173)
Issuance of project financing debt and other coupon bearing securities . 2,361 1,469
Repayments of project financing debt and other coupon bearing securities (492) (614)
Payments for deferred financing costs .................................. (86) (30)
Other liabilities ...................................................... (82) (57)
Minority Interest Payments ............................................. (3) (3)
Sales of common stock .................................................. 915 514
------- -------
Net cash provided by financing activities ............................. 2,728 1,106
Increase in cash and cash equivalents ................................. 531 (100)
Cash and cash equivalents, beginning .................................. 669 491
------- -------
Cash and cash equivalents, ending ..................................... $ 1,200 $ 391
======= =======
SUPPLEMENTAL INTEREST AND INCOME TAXES DISCLOSURES:
Cash payments for interest ............................................... $ 521 $ 221
======= =======
Cash payments for income taxes ........................................... $ 10 $ 24
======= =======
SUPPLEMENTAL SCHEDULE OF NONCASH ACTIVITIES:
Liability assumed in purchase transactions ............................... $ 2,304 $ 95
======= =======
Common stock issued ...................................................... $ 8 $ --
======= =======
</TABLE>
See Notes to Consolidated Finacial Statements
3
<PAGE>
THE AES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
(UNAUDITED)
1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of The AES
Corporation, its subsidiaries and controlled affiliates (the "Company" or
"AES"). Intercompany transactions and balances have been eliminated. Investments
in 50% or less owned affiliates, over which the Company has the ability to
exercise significant influence, but not control, are accounted for using the
equity method.
In the Company's opinion, all adjustments necessary for a fair
presentation of the unaudited results of operations for the periods ended June
30, 2000 and 1999, respectively, are included. All such adjustments are accruals
of a normal and recurring nature. The results of operations for the period ended
June 30, 2000 are not necessarily indicative of the results of operations to be
expected for the full year. The financial statements are unaudited and should be
read in conjunction with the consolidated financial statements, which are
incorporated by reference in the Company's Annual Report on Form 10-K for the
year ended December 31, 1999.
2. EARNINGS PER SHARE
Basic and diluted earnings per share computations are based on the
weighted average number of shares of common stock and potential common stock
outstanding during the period, after giving effect to stock splits. Potential
common stock, for purposes of determining diluted earnings per share, includes
the dilutive effects of stock options, warrants, deferred compensation
arrangements and convertible securities. The effect of such potential common
stock is computed using the treasury stock method or the if-converted method, in
accordance with Statement of Financial Accounting Standards "SFAS" No. 128,
Earnings Per Share. The reconciliation of basic earnings per share to diluted
earnings per share is shown in Exhibit 11. All share data has been adjusted for
the two-for-one stock split effective June 1, 2000.
3. BUSINESS COMBINATIONS
On June 7, 2000, pursuant to its tender offer for American
Depositary Shares (ADSs), a subsidiary of the Company purchased approximately
36 million ADSs, each representing 50 shares, of C.A. La Electricidad de
Caracas (EDC) and Corporacion EDC, C.A. (CEDC) at US$28.50 per ADS,
representing approximately 49% of all outstanding shares. Prior to this
purchase, the Company owned approximately 1.1% of the outstanding shares. On
June 12, 2000, pursuant to its tender offer for all outstanding shares of EDC
and CEDC, a subsidiary of the Company purchased approximately 1.1 billion
shares of EDC and CEDC at US$0.57 per share. The additional purchase
increased the Company's ownership interest in EDC and CEDC to approximately
73%. The total consideration paid by the Company for the shares and ADSs
purchased was approximately US$1.7 billion. The acquisition was financed
through a combination of cash and a nonrecourse senior bridge loan. The
Company contributed approximately $2 billion of AES stock to its subsidiary
in connection with the loan. Subsequently, the Company's total ownership
reached approximately 87% primarily due to a stock buyback program initiated
by management of EDC and CEDC in July. EDC and CEDC have interests in several
distribution businesses in Venezuela, Colombia and El Salvador which serve
over 2.8 million customers. In addition, EDC and CEDC operate several
generation facilities in Venezuela and Colombia, which provide 3,500 MW of
capacity. EDC and CEDC also hold interests in other businesses
4
<PAGE>
involved in telecommunications, oil and gas processing, gas distribution,
security services, engineering, property and stock transfer services in
Venezuela.
In March 2000, a subsidiary of the Company acquired GeoUtilities, Inc.
(GeoUtilities), an internet-based superstore which is able to offer to consumers
in deregulated markets all the current choices of energy, telecom and other
services from those providers that operate in their respective area, for
approximately $8 million in AES common stock and an additional 94,674 shares of
common stock to be paid over a two-year period upon GeoUtilities meeting
specified future earnings targets.
The table below presents supplemental unaudited pro forma operating
results as if all of the acquisitions had occurred at the beginning of the
periods shown (in millions, except per share amounts):
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
--------------------
2000 1999
------ ------
<S> <C> <C>
Revenues $3,345 $2,465
Income before extraordinary items 309 135
Net income $ 302 $ 135
Basic earnings per share before extraordinary item $ 0.71 $ 0.35
Diluted earnings per share before extraordinary item $ 0.67 $ 0.34
</TABLE>
The pro forma results are based upon assumptions and estimates that the
Company believes are reasonable. The pro forma results do not purport to be
indicative of the results that actually would have been obtained had the
acquisitions occurred on January 1, 1999, nor are they intended to be a
projection of future results. Other acquisitions, which were acquired from July
1999 through December 1999, are included in the pro forma numbers presented
above as if they had occurred on January 1, 1999.
In February 2000, a subsidiary of the Company entered into an agreement
to acquire a 59% equity interest in a Hidroeletrica Alicura S.A. (Alicura) in
Argentina from Southern Energy, Inc. Alicura holds the concession to operate a
1,000 MW peaking hydro facility located in the province of Neuquen, Argentina.
The purchase price of approximately $205 million includes the assumption of debt
obligations. Closing is expected to occur in the latter half of 2000.
On April 28, 2000, the Company also announced its intention to launch a
tender offer to acquire all outstanding common and preferred shares of the
Brazilian generation company Companhia de Geracao de Energia Eletrica Tiete
(Tiete). Tiete is a hydroelectric generation company in the state of Sao Paulo
with an installed capacity of 2,644 MW. The Company currently owns 71.3% of the
voting common stock and 14.0% of the preferred stock of Tiete, the majority of
which was acquired when Tiete was privatized in October 1999. The Company
expects the transaction to be completed by the middle of the fourth quarter of
2000.
5
<PAGE>
On May 10, 2000, the Company won a bid to purchase a controlling
interest in the 1,580 MW Mohave Generating Station (Mohave) in Laughlin, Nevada
from Southern California Edison Company and Nevada Power Company for $667
million. Mohave provides power to Phoenix, Arizona, Las Vegas, Nevada and
Southern California. The acquisition is subject to approval by the FERC and the
California Public Utilities Commission and review by the Nevada Public Utilities
Commission. The Company will have a 70% interest in the facility upon closing.
Closing is expected to occur late in the fourth quarter of 2000.
On July 15, 2000, the Company entered into a share exchange
agreement to acquire IPALCO Enterprises, Inc. (IPALCO) for $25.00 per share,
or approximately $2.15 billion, plus the assumption of $890 million of debt
and preferred stock, in a business combination expected to be accounted for
as a pooling of interests. IPALCO is a utility holding company headquartered
in Indianapolis, Indiana, whose primary subsidiary, Indianapolis Power &
Light, is an integrated electric utility that owns and operates 3,000
megawatts of coal-fired generation and provides retail electric service to
433,000 customers in the greater Indianapolis area. Under the terms of the
share exchange agreement, upon closing, each share of IPALCO common stock
will be exchanged for a number of the Company's shares such that IPALCO
shareholders will receive a fixed value of $25.00 per IPALCO share. The final
exchange ratio will be determined five business days prior to closing, based
upon the average daily closing prices of the Company's common stock for the
preceding twenty trading days and capped at a ratio of 0.794 of the Company's
shares for each IPALCO share. Upon closing, IPALCO will become a wholly-owned
subsidiary of the Company. This business combination is subject to certain
conditions, including receipt of the approval of IPALCO shareholders and
receipt of regulatory approvals, including that of the Federal Energy
Regulatory Commission and the Securities and Exchange Commission. The Company
anticipates receiving all regulatory approvals and closing the business
combination during early 2001.
4. INVESTMENTS IN AND ADVANCES TO AFFILIATES
The Company is a party to joint venture/consortium agreements through
which the Company has equity investments in several operating companies. The
joint venture/consortium parties generally share operational control of the
investee. The agreements prescribe ownership and voting percentages as well as
other matters. The Company records its share of earnings from its equity
investees on a pre-tax basis. The Company's share of the investee's income taxes
is recorded in income tax expense.
The following table presents summarized unaudited financial information
(in millions) for the equity method affiliates on a combined 100% basis.
Equity ownership percentages for these investments are presented below:
<TABLE>
<CAPTION>
EQUITY OWNERSHIP AT
JUNE 30, DECEMBER 31,
AFFILIATE COUNTRY 2000 1999
--------- ------- ---- ----
<S> <C> <C> <C>
Cemig Brazil 9.45% 9.45%
Elsta Netherlands 50.00 50.00
Kingston Canada 50.00 50.00
Light Brazil 17.68 17.68
Medway Power, Ltd. United Kingdom 25.00 25.00
NIGEN United Kingdom n/a 46.17
Northern/AES Energy United States n/a 50.00
OPGC India 49.00 49.00
Chigen affiliates China 30.00 30.00
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-----------------------------
6/30/00 6/30/99
------- -------
<S> <C> <C>
Revenues $ 2,010 $ 1,642
Operating Income 631 591
Net Income (Loss) 395 (381)
</TABLE>
Effective May 1, 2000, the Company disposed of its investment in
Northern/AES Energy. The disposition of the investment did not have a material
effect on the Company's financial condition or results of operations.
On May 12, 2000, the Company completed the acquisition of 100% of
Tractebel Power Ltd (TPL) for $67 million together with an obligation to repay
existing debt of $15 million. TPL owns 46% of NIGEN. With the completion of this
transaction, the Company owns approximately 92% of NIGEN's common stock and
consolidate its financial results.
On May 17, 2000, a subsidiary of the Company acquired an additional
5% of the preferred, non-voting shares of Eletropaulo S.A. (Eletropaulo)
via a required tender offer for approximately $90 million, as a continuation
of an acquisition that occurred in January 2000. In January 2000, 59% of the
preferred, non-voting shares were acquired for approximately $1 billion at
auction from BNDES, the National Bank of Brazil. The price established at
auction, for both acquisitions, was approximately $72.18 per 1,000 shares, to
be paid in four annual installments commencing with a payment of 18.5% of the
total price upon closing of the transaction and installments of 25.9%, 27.1%
and 28.5% of the total price to be paid annually. The Company directly and
indirectly through its ownership in Light, owns approximately 46.5% of the
total equity of Eletropaulo.
5. LITIGATION
The Company is also involved in certain legal proceedings in the normal course
of business. It is the opinion of the Company that none of the pending
litigation is expected to have a material adverse effect on its results of
operations or financial position.
6. COMPREHENSIVE INCOME
Comprehensive income (loss) consists of net income and foreign currency
translation adjustments. It includes $137 million and $110 million of foreign
currency translation adjustment losses for the quarters ended June 30, 2000 and
1999, respectively, and $100 million and $852 million for the six months ended
June 30, 2000 and 1999, respectively. Comprehensive losses are $26 million and
$39 million for the quarters ended June 30. 2000 and 1999, respectively.
Comprehensive income is $185 million for the six months ended June 30, 2000, and
comprehensive loss is $794 million for the six months ended June 30 1999.
7
<PAGE>
7. SEGMENTS
Information about the Company's operations by segment are as follows
(in millions):
<TABLE>
<CAPTION>
EQUITY
GROSS EARNINGS/
REVENUE (1) MARGIN (LOSS)
----------- ------ ------
<S> <C> <C> <C>
QUARTER ENDED JUNE 30, 2000
Generation $ 800 $ 312 $ 8
Distribution 738 23 91
------ ------ ------
Total $1,538 $ 335 $ 99
====== ====== ======
QUARTER ENDED JUNE 30, 1999
Generation $ 410 $ 182 $ 13
Distribution 230 46 24
------ ------ ------
Total $ 640 $ 228 $ 37
====== ====== ======
SIX MONTHS ENDED JUNE 30, 2000
Generation $1,715 $ 660 $ 34
Distribution 1,299 94 183
------ ------ ------
Total $3,014 $ 754 $ 217
====== ====== ======
SIX MONTHS ENDED JUNE 30, 1999
Generation $ 799 $ 354 $ 28
Distribution 479 94 (82)
------ ------ ------
Total $1,278 $ 448 $ (54)
====== ====== ======
</TABLE>
-(1) Intersegment revenues for the quarter ended June 30, 2000 and 1999 were $14
million and $21 million, respectively, and for six months ended June 30, 2000
and 1999 were $37 million and $45 million, respectively.
8. SUBSEQUENT EVENT
On August 3, 2000, the Company announced that a subsidiary had
completed a $1 billion bond offering. AES Drax Holding Limited issued L200
million of 9.07% bonds due in 2025 and $302 million of 10.41% bonds due in 2020.
The dollar tranche will be swapped into sterling at an effective coupon of
approximately 9.25%. AES Drax Energy Limited issued L135 million of 11.25% bonds
and $200 million of 11.5% bonds due 2010. The dollar tranche will be swapped
into sterling at an effective coupon of approximately 10.45%. The proceeds from
the offering are being used to refinance existing outstanding bank debt.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OVERVIEW
EXISTING OPERATIONS. The AES Corporation and its subsidiaries and
affiliates (collectively "AES" or the "Company") are a global power company
committed to serving the world's needs for electricity in a socially responsible
way. AES's electricity "generation" business consists of sales to wholesale
customers (generally electric utilities, regional electric companies or
wholesale commodity markets known as "power pools") for further resale to
end-users. AES also sells electricity directly to end users such as commercial,
industrial, governmental and residential customers through its "distribution"
business.
AES's generation business represented 57% of total revenues for the six
months ended June 30, 2000 compared to 63% for the six months ended June 30,
1999. Sales within the generation business are made under long-term contracts
from power plants owned by the Company's subsidiaries and affiliates, as well as
directly into power pools. The Company owns new plants constructed for such
purposes ("greenfield" plants) as well as older power plants acquired through
competitively bid privatization initiatives or negotiated acquisitions.
AES's distribution business represented 43% of total revenues for the
six months ended June 30, 2000 compared to 37% for the six months ended June 30,
1999. Electricity sales by AES's distribution businesses, including affiliates,
are generally made pursuant to the provisions of long-term electricity sale
concessions granted by the appropriate governmental authorities. In certain
cases, these distribution companies are "integrated", in that they also own
electric power plants for the purpose of generating a portion of the electricity
they sell.
Certain subsidiaries and affiliates of the Company (domestic and
non-U.S.) have signed long-term contracts or made similar arrangements for the
sale of electricity and are in various stages of developing the related
greenfield power plants. Successful completion depends upon overcoming
substantial risks, including, but not limited to, risks relating to failures of
siting, financing, construction, permitting, governmental approvals or
termination of the power sales contract as a result of a failure to meet certain
milestones. At June 30, 2000, capitalized costs for projects under development
and in early stage construction were approximately $93 million. The Company
believes that these costs are recoverable; however, no assurance can be given
that individual projects will be completed and reach commercial operation.
The Company has been actively involved in the acquisition and operation
of electricity assets in countries that are restructuring and deregulating the
electricity industry. Some of these acquisitions have been made from other
electricity companies that have chosen to exit the electricity generation
business. In such situations, sellers generally seek to complete competitive
solicitations in less than one year, which is much faster than the time incurred
to complete greenfield developments, and require payment in full on transfer.
AES believes that its experience in competitive markets and its worldwide
integrated group structure (with its significant geographic coverage and
presence) enable it to react quickly and creatively in such situations.
The financing for such acquisitions, in contrast to that for greenfield
development, often must be arranged quickly and therefore may preclude the
Company from arranging non-recourse project financing (the Company's
historically preferred financing method, which is discussed further under
"Capital Resources, Liquidity and Market Risk" in the Company's Annual Report on
Form 10-K for the year ended December 31, 1999). Moreover, acquisitions that are
large, that occur simultaneously with one another or those occurring
simultaneously with commencing construction on several greenfield
9
<PAGE>
developments would potentially require the Company to obtain substantial
additional financing, including both debt and equity. As a result, and in order
to enhance its financial capabilities to respond to these more accelerated
opportunities, on March 31, 2000 the Company executed an $850 million credit
agreement.
RESULTS OF OPERATIONS
REVENUES. Revenues increased $898 million, or 140%, to $1.54 billion
for the three months ended June 30, 2000 from $640 million for the three months
ended June 30, 1999. Revenues increased $1.74 billion, or 136%, to $3.01 billion
for the six months ended June 30, 2000 from $1.27 billion for the six months
ended June 30, 1999. The increase in revenues for both the three months and the
six months ended June 30, 2000 is due primarily to acquisitions of new
generation and distribution businesses.
Generation revenues increased $390 million, or 95%, to $800 million for
the three months ended June 30, 2000 from $410 million for the three months
ended June 30, 1999. Generation revenues increased $916 million, or 115%, to
$1.71 billion for the six months ended June 30, 2000 compared to $799 million
for the six months ended June 30, 1999. The increase in generation revenues for
both the three months and the six months ended June 30, 2000 is due primarily to
the acquisitions of the New York plants, Tiete and Drax. The percentage increase
in generation revenues for the six months ended June 30, 2000 is greater than
for the three months ended June 30, 2000, because the New York plants were
acquired in May 1999 and provided some revenues during the three months ended
June 30, 1999, and also because of the seasonality at Drax.
Distribution revenues increased $508 million, or 221%, to $738 million
for the three months ended June 30, 2000 from $230 million for the three months
ended June 30, 1999. Distribution revenues increased $820 million, or 171%, to
$1.30 billion for the six months ended June 30, 2000 from $479 million for the
six months ended June 30, 1999. The increase in distribution revenues for both
the three months and the six months ended June 30, 2000 is due primarily to the
acquisitions of CILCORP, NewEnergy, EDE Este and CESCO. The acquisition of EDC
during the second quarter of 2000 also contributed to the increase in
distribution revenues for the three months ended June 30, 2000 and resulted in a
greater percentage increase in distribution revenues for the three months ended
June 30, 2000 than for the six months ended June 30, 2000.
GROSS MARGIN. Gross margin, which represents total revenues reduced by
cost of sales, increased $107 million, or 47%, to $335 million for the three
months ended June 30, 2000 from $228 million for the three months ended June 30,
1999. Gross margin as a percentage of revenues decreased to 22% for the three
months ended June 30, 2000 from 36% for the three months ended June 30, 1999.
Gross margin increased $306 million, or 68%, to $754 million for the six months
ended June 30, 2000 from $448 million for the six months ended June 30, 1999.
Gross margin as a percentage of revenues decreased to 25% for the six months
ended June 30, 2000 from 35% for the six months ended June 30, 1999. The
decrease in gross margin as a percentage of revenues for both the three and the
six months ended June 30, 2000 is due mainly to lower gross margins at newly
acquired distribution companies.
The generation gross margin increased $130 million, or 71%, to $312
million for the three months ended June 30, 2000 from $182 million for the three
months ended June 30, 1999. The generation gross margin as a percentage of
revenues decreased to 39% for the three months ended June 30, 2000 from 44% for
the three months ended June 30, 1999. The generation gross margin increased $306
million, or 86%, to $660 million for the six months ended June 30, 2000 from
$354 million for the six months ended June 30, 1999. The generation gross margin
as a percentage of revenues decreased to 38% for the six months ended June 30,
2000 from 44% for the six months ended June 30, 1999. The
10
<PAGE>
overall increase in generation gross margin is due primarily to new
acquisitions. The decrease in gross margin as a percentage of revenues is due
primarily to lower gross margins at certain of the generation businesses in
Asia. In the second quarter of 1999, the gross margin as a percentage of
revenues was favorably impacted by the settlement with the government of
Kazakhstan which resulted in a reduction in the provision to reduce contract
receivables.
The distribution gross margin decreased $23 million, or 50%, to $23
million for the three months ended June 30, 2000 from $46 million for the three
months ended June 30, 1999. The distribution gross margin as a percentage of
revenues decreased to 3% for the three months ended June 30, 2000 from 20% for
the three months ended June 30, 1999. The significant decrease in distribution
gross margin is due primarily to losses at NewEnergy and EDE Este, both of which
were acquired in the third quarter of 1999. The decrease in distribution margin
as a percentage of revenues is due to the losses at NewEnergy and EDE Este, and
lower gross margins at certain other newly acquired distribution companies. The
distribution gross margin was $94 million for both the six months ended June 30,
2000 and the six months ended June 30, 1999. The distribution gross margin as a
percentage of revenues decreased to 7% for the six months ended June 30, 2000
from 20% for the six months ended June 30, 1999. The decrease in distribution
gross margin as a percentage of revenue is due to losses at NewEnergy, EDE Este
and CESCO.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $4 million, or 27%, to $19 million for the
three months ended June 30, 2000 from $15 million for the three months ended
June 30, 1999. Selling, general and administrative expenses as a percentage of
revenues were 1% for the three months ended June 30, 2000 and were 2% for the
three months ended June 30, 1999. Selling, general and administrative expenses
increased $17 million, or 55%, to $48 million for the six months ended June 30,
2000 from $31 million for the six months ended June 30, 1999. Selling, general
and administrative expenses as a percentage of revenues were 2% for both the six
months ended June 30, 2000 and the six months ended June 30, 1999. The overall
increase in selling, general and administrative expenses during both the three
and the six months ended June 30, 2000 is due to increased development
activities.
INTEREST EXPENSE. Interest Expense increased $170 million, or 119%, to
$313 million for the three months ended June 30, 2000 from $143 million for the
three months ended June 30, 1999. Interest expense as a percentage of revenues
was 20% for the three months ended June 30, 2000 and 22% for the three months
ended June 30, 1999. Interest expense increased $306 million, or 111%, to $582
million for the six months ended June 30, 2000 from $276 million for the six
months ended June 30, 1999. Interest expense as a percentage of revenues was 19%
for the six months ended June 30, 2000 and 22% for the six months ended June 30,
1999. Interest expense increased due to increased project financing for new
businesses and asset acquisitions, as well as from additional corporate interest
from debt issued to finance new investments.
INTEREST AND OTHER INCOME. Interest and other income increased $57
million, or 475%, to $69 million for the three months ended June 30, 2000 from
$12 million for the three months ended June 30, 1999. Interest and other income
as a percentage of revenues was 4% for the three months ended June 30, 2000 and
was 2% for the three months ended June 30, 1999. Interest and other income
increased $69 million, or 223%, to $100 million for the six months ended June
30, 2000 from $31 million for the six months ended June 30, 1999. Interest and
other income as a percentage of revenues was 3% for the six months ended June
30, 2000 and was 2% for the six months ended June 30, 1999. The increase in
interest income accounted for 90% of the total increase for the three months
ended June 30, 2000 and 82% of the total increase for the six months ended June
30, 2000. Foreign exchange gains and gains from asset sales comprise other
income.
11
<PAGE>
EQUITY IN EARNINGS OF AFFILIATES. Equity in earnings of affiliates
(before income taxes) increased $62 million, or 168%, to $99 million for the
three months ended June 30, 2000 from $37 million for the three months ended
June 30, 1999. The increase in equity in earnings is due to the increase in
equity in earnings from distribution affiliates offset by a slight decrease in
equity in earnings from generation affiliates. Equity in earnings of affiliates
(before income taxes) increased $271 million to $217 million for the six months
ended June 30, 2000 from a loss of $54 million for the six months ended June 30,
1999. The loss for the six months ended June 30, 1999 includes $144 million of
foreign currency transaction losses from distribution affiliates in Brazil.
Equity in earnings of generation affiliates decreased $5 million, or
38%, to $8 million for the three months ended June 30, 2000 from $13 million for
the three months ended June 30, 1999. The decrease in equity in earnings of
generation affiliates is due primarily to the acquisition of a controlling
interest in NIGEN which was previously reported as an equity investment, as well
as a slight decrease in the contribution from OPGC. Equity in earnings of
generation affiliates increased $6 million, or 21%, to $34 million for the six
months ended June 30, 2000 from $28 million for the six months ended June 30,
1999.
Equity in earnings of distribution affiliates increased $67 million, or
279%, to $91 million for the three months ended June 30, 2000 from $24 million
for the three months ended June 30, 1999. The increase in equity in earnings of
distribution affiliates is due to improved economic conditions in Brazil which
resulted in greater contributions from Eletropaulo and CEMIG. Equity in earnings
of distribution affiliates increased $265 million to $183 million for the six
months ended June 30, 2000 from a loss of $82 million for the six months ended
June 30, 1999. Equity in earnings of distribution affiliates included $6 million
of foreign currency transaction losses in Brazil during the six months ended
June 30, 2000 and $144 million of foreign currency transaction losses in Brazil
during the six months ended June 30, 1999.
INCOME TAX PROVISION. The provision for income taxes increased $9
million, or 26%, to $43 million for the three months ended June 30, 2000 from
$34 million for the three months ended June 30, 1999. The provision for income
taxes increased $86 million, or 307%, to $114 million for the six months ended
June 30, 2000 from $28 million for the six months ended June 30, 1999. The
Company's effective tax rate was 28% for all periods in 2000 and was 32% for all
periods in 1999. The decrease in the effective tax rate is due to the increase
in earnings of certain foreign businesses which are taxed at a rate lower than
the U.S. income tax rate.
MINORITY INTEREST. Minority interest increased $3 million, or 21%, to
$17 million for the three months ended June 30, 2000 from $14 million for the
three months ended June 30, 1999. During the three months ended June 30, 2000,
both generation and distribution minority interest increased slightly. Minority
interest increased $3 million, or 9%, to $35 million for the six months ended
June 30, 2000 from $32 million for the six months ended June 30, 1999. During
the six months ended June 30, 2000, the increase in generation minority interest
was offset by a decrease in distribution minority interest.
Generation minority interest increased $2 million, or 22%, to $11
million for the three months ended June 30, 2000 from $9 million for the three
months ended June 30, 1999. Generation minority interest increased $6 million,
or 32%, to $25 million for the six months ended June 30, 2000 from $19 million
for the six months ended June 30, 1999. The increase in generation minority
interest is due primarily to increased contributions from generation businesses
in South America.
Distribution minority interest increased $1 million, or 20%, to $6
million for the three months ended June 30, 2000 from $5 million for the three
months ended June 30, 1999. During the three months ended June 30, 2000,
increases in distribution minority interest at EDC and CEMIG were offset
12
<PAGE>
by losses at EDE Este and CESCO. Distribution minority interest decreased $3
million, or 23%, to $10 million for the six months ended June 30, 2000 from $13
million for the six months ended June 30, 1999. During the six months ended June
30, 2000, the losses at EDE Este and CESCO were greater than the increases at
EDC and CEMIG, because EDC was not acquired until late in the second quarter of
2000.
EXTRAORDINARY ITEM. During the six months ended June 30, 2000, the
Company renegotiated the corporate revolving bank loan to incorporate the letter
of credit facility. Since the corporate revolving bank loan was not due until
December 2000, the Company wrote-off the related deferred financing costs
resulting in an extraordinary item for the early extinguishments of debt of $7
million, net of tax.
NET INCOME. Net income increased $40 million, or 56%, to $111 million
for the three months ended June 30, 2000 from $71 million for the three months
ended June 30, 1999. The increase in net income during the three months ended
June 30, 2000 is due to the increase in income from generation businesses offset
by an increase in corporate interest. Income from distribution businesses
remained fairly constant during the three months ended June 30, 2000 and the
three months ended June 30, 1999. Net income increased $227 million, or 391%, to
$285 million for the six months ended June 30, 2000 from $58 million for the six
months ended June 30, 1999. The increase in net income during the six months
ended June 30, 2000 is due to increases in income from both generation and
distribution businesses. The Company recorded $100 million (after income taxes)
of foreign currency transaction losses during the six months ended June 30,
1999.
FINANCIAL POSITION, CASH FLOWS AND FOREIGN CURRENCY EXCHANGE RATES
At June 30, 2000, cash and cash equivalents totaled approximately
$1.2 billion, as compared to $669 million at December 31, 1999. The $531
million increase resulted from funding of $611 million from operating
activities and $2.73 billion from financing activities offset by a use of
$2.81 billion for investing activities. Significant investing activity
includes the acquisition of EDC, additions to property, plant and equipment
as well as continued development activities at various projects. The net
source of cash from financing activities was primarily the result of project
finance borrowings of $2.4 billion and proceeds from the issuance of common
stock of $915 million, offset by repayments of project finance borrowings of
$492 million. Unrestricted net cash flow of the parent company for the four
quarters ended June 30, 2000 totaled approximately $501 million.
Through its equity investments in foreign affiliates and subsidiaries,
AES operates in jurisdictions with currencies other than the Company's
functional currency, the U.S. dollar. Such investments and advances were made to
fund equity requirements and to provide collateral for contingent obligations.
Due primarily to the long-term nature of the investments and advances, the
Company accounts for any adjustments resulting from translation of the financial
statements of its foreign investments as a charge or credit directly to a
separate component of stockholders' equity until such time as the Company
realizes such charge or credit. At that time, any differences would be
recognized in the statement of operations as gains or losses.
In addition, certain of the Company's foreign subsidiaries have entered
into obligations in currencies other than their own functional currencies or the
U.S. dollar. These subsidiaries have attempted to limit potential foreign
exchange exposure by entering into revenue contracts that adjust to changes in
the foreign exchange rates. Certain foreign affiliates and subsidiaries operate
in countries where the local inflation rates are greater than U.S. inflation
rates. In such cases the foreign currency tends to devalue relative to the U.S.
dollar over time. The Company's subsidiaries and affiliates have entered into
revenue contracts which attempt to adjust for these differences, however, there
can be no
13
<PAGE>
assurance that such adjustments will compensate for the full effect of currency
devaluation, if any. The Company had approximately $1.2 billion in cumulative
foreign currency translation adjustment losses at June 30, 2000.
14
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The company believes that there have been no material changes in
exposure to market risks during the second quarter of 2000 from those set forth
in the Company's Annual Report filed with the Commission on Form 10-K for the
year ended December 31, 1999.
15
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See discussion of litigation and other proceedings in the Company's
Quarterly Report on Form 10-Q for the period ended March 31, 2000, which is
incorporated herein by reference.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
The Company declared a stock split, payable in the form of a dividend,
paid on June 1, 2000 to stockholders of record on May 1, 2000.
On May 11, 2000, the Company issued 24,725,000 shares of Common
Stock, par value $.01 per share, at a price per share of $37.1875, for net
proceeds of approximately $890 million, and a subsidiary of the Company
issued 9,200,000 $3.00 trust convertible preferred securities for net
proceeds of approximately $441 million. The proceeds for these offerings were
used to (1) fund all or a portion of the purchase price of certain
acquisitions, (2) fund all or a portion of certain tender offers, and (3) for
general corporate purposes. All numbers have been adjusted for the 2-for-1
stock split and to account for the exercise of the underwriters'
overallotment option.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of stockholders on April 18,
2000. The following matters were decided by a vote of the stockholders.
Election of Directors
<TABLE>
<CAPTION>
NOMINEE FOR AGAINST/ABSTAIN
------- --- ---------------
<S> <C> <C>
Roger W. Sant 170,746,486 1,253,659
Dennis W. Bakke 159,784,870 12,215,275
Alice F. Emerson 170,807,388 1,192,757
Robert Hemphill 166,661,927 5,338,218
Frank Jungers 170,797,961 1,202,184
John McArthur 170,798,100 1,202,045
Hazel O'Leary 170,728,241 1,271,904
Thomas I. Unterberg 164,857,040 7,143,105
Robert Waterman 170,813,169 1,186,976
Ratification of Certified Independent Accountants
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C>
171,517,338 39,965 442,842
Proposal to Amend Restated Certificate of Incorporation
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C>
156,453,327 15,075,363 471,455
</TABLE>
16
<PAGE>
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS.
3.1 Fifth Amended and Restated Certificate of Incorporation of The
AES Corporation is incorporated here in by reference to
Exhibit 3.1 to the Quarterly Report on Form 10-Q of the
Registrant for the quarterly period ended June 30, 1998 filed
August 14, 1998.
3.2 By-Laws of The AES Corporation, as amended is incorporated
here in by reference to Exhibit 3.2 to the Quarterly Report on
Form 10-Q of the Registrant for the quarterly period ended
June 30, 1998 filed August 14, 1998.
4.1 Amended and Restated Declaration of Trust of AES Trust I,
among The AES Corporation, The First National Bank of Chicago
and First Chicago Delaware, Inc., to provide for the issuance
of the $2.6875 Term Convertible Securities, Series A is
incorporated herein by reference to Exhibit 4.1 to Annual
Report on Form 10-K of the Registrant for the year ended
December 31, 1997 filed March 30, 1998.
4.2 Junior Subordinated Indenture, between The AES Corporation and
The First National Bank of Chicago, to provide for the
issuance of the $2.6875 Term Convertible Securities, Series A
is incorporated herein by reference to Exhibit 4.1 to Annual
Report on Form 10-K of the Registrant for the year ended
December 31, 1997 filed March 30, 1998.
4.3 First Supplemental Indenture to Junior Subordinated Indenture,
between The AES Corporation and The First National Bank of
Chicago, as trustee, to provide for the issuance of the
$2.6875 Term Convertible Securities, Series A is incorporated
herein by reference to Exhibit 4.1 to Annual Report on Form
10-K of the Registrant for the year ended December 31, 1997
filed March 30, 1998.
4.4 Guarantee Agreement, between The AES Corporation and The First
National Bank of Chicago, as initial guarantee trustee, to
provide for the issuance of the $2.6875 Term Convertible
Securities, Series A is incorporated herein by reference to
Exhibit 4.1 to Annual Report on Form 10-K of the Registrant
for the year ended December 31, 1997 filed March 30, 1998.
4.5 Second Supplemental Indenture dated as of October 13, 1997
between the Company and the First National Bank of Chicago, as
trustee, to provide for the issuance from time to time of the
10.25% Senior Subordinated Notes Due 2006, is incorporated
herein by reference to Exhibit 4.2.1 of the Registration
Statement on Form S-3/A (Registration No. 333-39857) filed
November 19, 1997.
4.6 Indenture dated as of October 29, 1997 between The AES
Corporation and The First National Bank of Chicago, as
trustee, to provide for the issuance from time to time of the
8.50% Senior Subordinated Notes due 2007 of the Company and
the 8.875% Senior Subordinated Debentures due 2027, is
incorporated herein by reference to Exhibit 4.1 to the
Registration Statement on Form S-4 (Registration No.
333-44845) filed January 23, 1998.
4.7 First Supplemental Indenture dated as of November 21, 1997
between The AES Corporation and The First National Bank of
Chicago, as trustee, to provide for the issuance from time to
time of the 8.50% Senior Subordinated Notes due 2007 of the
Company and the 8.875% Senior Subordinated Debentures due
2027, is incorporated herein by reference to Exhibit 4.1.2 to
the Registration Statement on Form S-4 (Registration No.
333-44845) filed January 23, 1998.
17
<PAGE>
4.8 Junior Subordinated Debt Trust Securities Indenture dated as
of March 1, 1997 between the Company and The First National
Bank of Chicago, to provide for the issuance of the $2.75 Term
Convertible Securities, Series B, is incorporated herein by
reference to Exhibit 4.1 to the Registration Statement on Form
S-3 (Registration No. 333-46189) filed February 12, 1998.
4.9 Second Supplemental Indenture dated as of October 29, 1997
between the Company and The First National Bank of Chicago, to
provide for the issuance of the $2.75 Term Convertible
Securities, Series B, is incorporated herein by reference to
Exhibit 4.1.1 to the Registration Statement on Form S-3
(Registration No. 333-46189) filed February 12, 1998.
4.10 Amended and Restated Declaration of Trust of AES Trust II, to
provide for the issuance of the $2.75 Term Convertible
Securities, Series B, is incorporated herein by reference to
Exhibit 4.3 to the Registration Statement on Form S-3
(Registration No. 333-46189) filed February 12, 1998.
4.11 Restated Certificate of Trust of AES Trust II, to provide for
the issuance of the $2.75 Term Convertible Securities, Series
B, is incorporated herein by reference to Exhibit 4.4 to the
Registration Statement on Form S-3 (Registration No.
333-46189) filed February 12, 1998.
4.12 Form of Preferred Security, to provide for the issuance of the
$2.75 Term Convertible Securities, Series B, is incorporated
herein by reference to Exhibit 4.5 to the Registration
Statement on Form S-3 (Registration No. 333-46189) filed
February 12, 1998.
4.13 Form of Junior Subordinated Debt Trust Security, to provide
for the issuance of the $2.75 Term Convertible Securities,
Series B, is incorporated herein by reference to Exhibit 4.6
to the Registration Statement on Form S-3 (Registration No.
333-46189) filed February 12, 1998.
4.14 Preferred Securities Guarantee with respect to Preferred
Securities, to provide for the issuance of the $2.75 Term
Convertible Securities, Series B, is incorporated herein by
reference to Exhibit 4.7 to the Registration Statement on Form
S-3 (Registration No. 333-46189) filed February 12, 1998.
4.15 Junior Subordinated Indenture dated as of August 10, 1998,
between The AES Corporation and The First National Bank of
Chicago, as trustee, to provide for the issuance of the 4.5%
Convertible Junior Subordinated Debentures due 2005 is
incorporated here in by reference to Exhibit 4.15 to the
Quarterly Report on Form 10-Q of the Registrant for the
quarterly period ended June 30, 1998 filed August 14, 1998.
4.16 First Supplemental Indenture dated as of August 10. 1998, to
the Junior Subordinated Indenture dated as of August 10, 1998,
between The AES Corporation and The First National Bank of
Chicago, as trustee, to provide for the issuance of the 4.5%
Convertible Junior Subordinated Debentures due 2005 is
incorporated here in by reference to Exhibit 4.16 to the
Quarterly Report on Form 10-Q of the Registrant for the
quarterly period ended June 30, 1998 filed August 14, 1998.
4.17 Senior Indenture dated December 8, 1998 between the Registrant
and the First National Bank of Chicago to provide for the
issuance of $200 million of 8% Senior Note due 2008 is
incorporated herein by reference to Exhibit 4.01 to the
Current Report on Form 8-K of the Registrant filed December
11, 1998.
4.18 First Supplemental Indenture dated December 8, 1998 to the
Senior Indenture between the Registrant and the First National
Bank of Chicago to provide for the issuance of $200 million of
8% Senior Note due 2008 is incorporated herein by reference to
Exhibit 4.02 to the Current Report on Form 8-K of the
Registrant filed December 11, 1998.
4.19 Other instruments defining the rights of holders of long-term
indebtedness of the Registrant and its consolidated
subsidiaries is incorporated here in by reference to
18
<PAGE>
Exhibit 4.17 to the Quarterly Report on Form 10-Q of the
Registrant for the quarterly period ended June 30, 1998 filed
August 14, 1998.
10.1 Amended Power Sales Agreement, dated as of December 10, 1985,
between Oklahoma Gas and Electric Company and AES Shady Point,
Inc. is incorporated herein by reference to Exhibit 10.5 to
the Registration Statement on Form S-1 (Registration No.
33-40483).
10.2 First Amendment to the Amended Power Sales Agreement, dated as
of December 19, 1985, between Oklahoma Gas and Electric
Company and AES Shady Point, Inc. is incorporated herein by
reference to Exhibit 10.45 to the Registration Statement on
Form S-1 (Registration No. 33-46011).
10.3 Electricity Purchase Agreement, dated as of December 6, 1985,
between The Connecticut Light and Power Company and AES
Thames, Inc. is incorporated herein by reference to Exhibit
10.4 to the Registration Statement on Form S-1 (Registration
No. 33-40483).
10.4 Power Purchase Agreement, dated March 25, 1988, between AES
Barbers Point, Inc. and Hawaiian Electric Company, Inc., as
amended, is incorporated herein by reference to Exhibit 10.6
to the Registration Statement on Form S-1 (Registration No.
33-40483).
10.5 The AES Corporation Profit Sharing and Stock Ownership Plan is
incorporated herein by reference to Exhibit 4(c)(1) to the
Registration Statement on Form S-8 (Registration No.
33-49262).
10.6 The AES Corporation Incentive Stock Option Plan of 1991, as
amended, is incorporated herein by reference to Exhibit 10.30
to the Annual Report on Form 10-K of the Registrant for the
fiscal year ended December 31, 1995.
10.7 Applied Energy Services, Inc. Incentive Stock Option Plan of
1982 is incorporated herein by reference to Exhibit 10.31 to
the Registration Statement on Form S-1 (Registration No.
33-40483).
10.8 Deferred Compensation Plan for Executive Officers, as amended,
is incorporated herein by reference to Exhibit 10.32 to
Amendment No. 1 to the Registration Statement on Form S-1
(Registration No. 33-40483).
10.9 Deferred Compensation Plan for Directors is incorporated
herein by reference to Exhibit 10.9 to the Quarterly Report on
Form 10-Q of the Registrant for the quarter ended March 31,
1998, filed May 15, 1998.
10.10 The AES Corporation Stock Option Plan for Outside Directors is
incorporated herein by reference to Exhibit 10.43 to the
Annual Report on Form 10-K of Registrant for the Fiscal Year
ended December 31, 1991.
10.11 The AES Corporation Supplemental Retirement Plan is
incorporated herein by reference to Exhibit 10.64 to the
Annual Report on Form 10-K of the Registrant for the year
ended December 31, 1994.
10.12 $600,000,000 Credit Agreement dated as of December 19, 1997
(amended and restated as of March 31, 1999) among AES, The
Banks Listed Therein, The Fronting Banks Listed Therein, and
Morgan Guaranty Trust Company of New York, as agent.
10.13 Amendment No.1 dated as of May 21, 1999 to the $600,000,000
Credit Agreement dated as of December 19, 1997 (amended and
restated as of March 31, 1999) among AES, The Banks Listed
Therein, The Fronting Banks Listed Therein, and Morgan
Guaranty Trust Company of New York, as agent.
10.14 Amendment No.2 dated as of July 27, 1999 to the $600,000,000
Credit Agreement dated as of December 19, 1997 (amended and
restated as of March 31, 1999) among AES, The Banks Listed
Therein, The Fronting Banks Listed Therein, and Morgan
Guaranty Trust Company of New York, as agent.
10.15 Amendment No.3 dated as of September 28, 1999 to the
$600,000,000 Credit Agreement dated as of December 19, 1997
(amended and restated as of March 31,
19
<PAGE>
1999) among AES, The Banks Listed Therein, The Fronting Banks
Listed Therein, and Morgan Guaranty Trust Company of New York,
as agent.
10.16 Guaranty dated as of September 30, 1999 made by AES Oklahoma
Management Co., Inc., AES Hawaii Management Company, Inc., AES
Southland Funding LLC, and AES Warrior Run Funding LLC in
favor of the banks and the Fronting Banks party to the Credit
Agreement and Morgan Guaranty Trust Company of New York, as
agent.
10.17 Letter of Credit and Reimbursement Agreement dated as of
October 19, 1999 among AES, the several Banks and Financial
Institutions parties thereto from time to time, the Letter of
Credit Issuing Banks thereto from time to time, Union Bank of
California, N.A. as Administrative Agent, Morgan Guaranty
Trust Company of New York as Syndication Agent, and Bank of
America, N.A. as Documentation Agent.
10.18 Credit Agreement dated as of March 31, 2000 among AES, The
Banks Listed Therein, The Fronting Banks Listed Therein, Bank
of America, N.A., as Documentation Agent, Morgan Guarantee
Trust Company of New York, as Syndication Agent and Citibank,
N.A., as Agent.
11 Statement of Computation of Earnings Per Share.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
Registrant filed a Current Report on Form 8-K dated May 8, 2000
relating to the Company's results of operations for the quarter ended
March 31, 2000.
Registrant filed a Current Report on Form 8-K filed May 12, 2000
relating to the pricing of securities offerings of Common Stock and
trust convertible preferred securities.
Registrant filed a Current Report on Form 8-K on June 21, 2000 relating
to the indirect acquisition by the Company of C.A. La Electricidad de
Caracas.
20
<PAGE>
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 by the
undersigned thereunto duly authorized.
THE AES CORPORATION
(REGISTRANT)
Date: August 11, 2000 By: /s/ BARRY J. SHARP
------------------
Name: Barry J. Sharp
Title: Senior Vice President and
Chief Financial Officer
21
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT DESCRIPTION OF EXHIBIT NUMBERED
PAGE
<S> <C> <C>
11 Statement of Computation of Earnings Per Share.
27 Financial Data Schedule.
</TABLE>
