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 February 28, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934
Commission File Number: 0-23148
AES CHINA GENERATING CO. LTD.
(Exact name of registrant as specified in its charter)
Bermuda 98-0152612
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3/F., Jinqiao Building
#1 Jianguomenwai Avenue
Beijing 100020, People's Republic of China
(Address of principal executive office)
Telephone Number (86 10) 5089619
(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
--- ----
Indicate the number of shares outstanding of each of the registrant's
classes of Common Stock, as of April 10, 1997.
8,158,095 shares of Class A Common Stock, $.01 par value.
7,500,000 shares of Class B Common Stock, $.01 par value.
<PAGE>
AES CHINA GENERATING CO. LTD.
INDEX
PART I. FINANCIAL INFORMATION Page No
Item 1. Consolidated Financial Statements:
Consolidated Statements of Operations .. ........... 3
Consolidated Balance Sheets......................... 4
Consolidated Statements of Cash Flows............... 6
Notes to Consolidated Financial Statements ......... 7
Item 2. Discussion and Analysis of Financial Condition
and Results of Operations........................ 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K .................. 14
Signatures......................................... 15
<PAGE>
PART I
Item 1. Consolidated Financial Statements
AES CHINA GENERATING CO. LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
<S> <C> <C>
Three Months Ended
February 28, 1997 February 29, 1996
-----------------------------------------------
(unaudited)
REVENUES:
Electricity sales US$ 2,507 US$ 64
Construction delay fee - 360
------------------- --------------------
Total revenues 2,507 424
OPERATING COSTS AND EXPENSES:
Costs of sales 1,726 231
Development, selling, general and
administrative expenses 1,637 1,992
------------------- --------------------
Total operating costs and expenses 3,363 2,223
------------------- --------------------
OPERATING LOSS (856) (1,799)
OTHER INCOME/(EXPENSES):
Interest income 3,215 1,978
Interest expense (1,170) -
Equity in earnings of affiliates 107 126
Amalgamation cost (143) -
------------------- --------------------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 1,153 305
Income taxes 86
-
Minority interest (56) (11)
------------------- --------------------
NET INCOME US$ 1,123 US$ 316
------------------- --------------------
NET INCOME PER SHARE US$ 0.07 US$ 0.02
=================== ====================
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
AES CHINA GENERATING CO. LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par values and share amounts)
<TABLE>
<CAPTION>
<S> <C> <C>
As of As of
February 28, 1997 November 30, 1996
------------------- -------------------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents US$ 145,738 US$ 56,200
Investments - held-to-maturity 43,572 8,995
Investments - available-for-sale 12,993 -
Accounts receivable from related parties 3,264 6,809
Interest receivable 737 286
Inventory 1,057 765
Prepaid expenses and other current assets 653 874
-------------------- ----------------------
Total current assets 208,014 73,929
Property, Plant and Equipment:
Electric generating facilities 71,474 64,185
Equipment, furniture and leasehold improvements 2,863 2,646
Accumulated depreciation and amortization (4,016) (3,143)
Construction in progress 135,487 98,912
-------------------- ----------------------
Total property, plant and equipment, net 205,808 162,600
Other Assets:
Deferred costs, net 5,935 407
Project development costs 3,907 3,352
Investments in and advances to affiliates 42,421 33,202
Note receivable 6,631 6,626
Deposits and other assets 575 582
-------------------- ----------------------
Total other assets 59,469 44,169
-------------------- ----------------------
TOTAL US$ 473,291 US$ 280,698
==================== ======================
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
AES CHINA GENERATING CO. LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par values and share amounts)
<TABLE>
<CAPTION>
<S> <C> <C>
As of As of
February 28, 1997 November 30, 1996
--------------------- ---------------------
(unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable - The AES Corporation US$ 600 US$ 1,185
Accounts payable 2,953 2,199
Accrued liabilities 5,179 2,618
Accrued liabilities for construction 3,449 4,259
Loans from minority shareholders - current portion 1,955 1,365
Bank loans 2,387 2,861
--------------------- ---------------------
Total current liabilities 16,523 14,487
Long-Term Liabilities:
Notes payable, net 179,831 -
Bank loan 7,000 -
Deferred income taxes 472 387
Loans from minority shareholders 34,998 34,933
--------------------- ---------------------
Total long-term liabilities 222,301 35,320
Minority Interest 42,703 40,536
Shareholder's Equity:
Class A Common Stock - par value $0.01 per share,
(50,000,000 shares authorized; issued and outstanding:
1997 - 8,158,095; 1996 - 8,134,100) 82 81
Class B Common Stock - par value $0.01 per share,
(50,000,000 authorized; 7,500,000 shares issued
and outstanding) 75 75
Additional paid-in capital 184,203 183,980
Retained earnings 7,030 5,907
Cumulative translation adjustment 374 312
--------------------- ---------------------
Total shareholders' equity 191,764 190,355
--------------------- ---------------------
TOTAL US$ 473,291 US$ 280,698
===================== =====================
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
AES CHINA GENERATING CO. LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
Three Months Ended
February 28, 1997 February 29, 1996
------------------------------------------------
(unaudited)
Net cash provided by / (used in) operating activities US$ 3,712 US$ (1,869)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of notes 174,151 --
Contributions and loans from minority shareholders 2,190 3,562
Repayment of loans from minority shareholders (687) --
Proceeds from bank loans 8,206 36
Repayment of bank loans (1,680) --
Sale of Class A common stock 224 --
Repurchase of Class A common stock -- (11,443)
-------------------- --------------------
Net cash provided by/(used in) financing activities 182,404 (7,845)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and construction in progress (40,985) (5,934)
Purchase of investments -held-to-maturity (43,153) (6,602)
Purchase of investments -available-for-sale (12,991) (8,746)
Proceeds from maturity of investments -held-to-maturity 9,000 10,187
Proceeds from sales of investments -available-for-sale -- 3,000
Investments in and advances to affiliates (7,977) --
Project development costs and other assets (472) (132)
-------------------- --------------------
Net cash used in investing activities (96,578) (8,227)
-------------------- --------------------
Increase/(decrease) in cash and cash equivalents 89,538 (17,941)
CASH AND CASH EQUIVALENTS,
Beginning of period 56,200 125,684
-------------------- --------------------
End of period US$ 145,738 US$ 107,743
==================== ====================
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
AES CHINA GENERATING CO. LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. General and Basis of Presentation
AES China Generating Co. Ltd. ("AES Chigen" or the "Company"), a Bermuda
company, was incorporated on December 7, 1993, to develop, acquire, finance,
construct, own and manage electric power generation facilities in the People's
Republic of China (the "PRC"). The Company is a controlled affiliate of the AES
Corporation ("AES"). As of February 28, 1997, AES owned approximately 48% of the
outstanding common stock of the Company.
The consolidated financial statements include the accounts of AES China
Generating Co. Ltd. (the "Company"), its subsidiaries and controlled affiliates.
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. Intercompany transactions and balances have been
eliminated.
In the Company's opinion, all adjustments necessary for a fair presentation of
the unaudited results of operations for the three months ended February 28, 1997
and February 29, 1996 are included. All such adjustments are accruals of a
normal and recurring nature. The results of operations for the periods are not
necessarily indicative of the results of operations for the full year. The
financial statements are unaudited.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at February 28, 1997 and November 30, 1996 and
the reported amounts of revenues and expenses during the three months ended
February 28, 1997 and February 29, 1996. Actual results could differ from those
estimates.
The organization and business of the Company, accounting policies followed by
the Company and other information are contained in the notes to the Company's
financial statements filed as part of the Company's Annual Report on Form 10-K
for the fiscal year ended November 30, 1996 (the "Annual Report"). This
Quarterly Report on Form 10-Q should be read in conjunction with such Annual
Report.
2. Notes Payable
As of February 28, 1997, notes payable consisted of $180 million principal
amount Notes due on December 15, 2006 (the "2006 Notes"). The 2006 Notes bear
interest at the rate of 10 1/8% per annum. Interest is payable on June 15 and
December 15 of each year, commencing on June 15, 1997. The 2006 Notes rank at
least pari passu in right of payment with all existing and future senior
unsecured indebtedness of the Company. The holders of the 2006 Notes have a
claim to
<PAGE>
amounts on deposit in debt service and interest reserve accounts that is prior
to the claims of other creditors of the Company. The 2006 Notes are redeemable
at the Company's option, in whole or in part, beginning December 15, 2001 at
redemption prices in excess of par and are redeemable at par beginning December
15, 2003.
The terms of the 2006 Notes contain certain covenants and restrictions. The most
restrictive of these covenants include a requirement to maintain certain
reserves and limitations on the payment of dividends, redemption of equity
interests, redemption of subordinated indebtedness, making of certain
investments, incurrence of certain indebtedness, certain assets sales and the
incurrence of indebtedness to refinance existing indebtedness, among other
things.
3. Long Term Bank Loans
As of February 28, 1997, a long-term bank loan of $7.0 million to Anhui
Liyuan-AES Power Company Ltd., a joint venture of the Company, was outstanding.
The loan is unsecured and bears interest at the prevailing lending rates in the
PRC. The interest rate for the first quarter of 1997 was approximately 7.7% per
annum. Scheduled maturities of the bank loan as of February 28, 1997 are as
follows:
(in thousands)
1998 $ --
1999 --
2000 2,000
2001 2,000
2002 3,000
--------------
$ 7,000
==============
4. Commitments and Contingencies
Since the commencement of operations, the Company has entered into commitments
to invest a total of approximately $259.6 million in the form of equity
contributions and loans to its joint ventures. As of February 28, 1997, the
total outstanding commitments to its joint ventures was $91.5 million.
The Company has initialed or signed several joint venture contracts which become
effective under Chinese law following receipt of certain government approvals.
These joint venture contracts are also subject to the satisfaction or waiver of
certain conditions precedent specified in the joint venture contracts. Until the
appropriate governmental approvals have been obtained and all conditions
precedent have been satisfied or waived, the Company regards the initialing or
signing of a joint venture contract as being a preliminary step in the
development of an electric power generation project and therefore does not
recognize amounts under these joint venture contracts as commitments.
<PAGE>
5. Proposed Amalgamation
The Company and AES Corporation have entered into an Amended and Restated
Agreement and Plan of Amalgamation, dated as of November 12, 1996, pursuant to
which a wholly owned subsidiary of AES would amalgamate (the "Amalgamation")
with the Company and each share of the Company's Class A common stock
outstanding prior to the Amalgamation will thereafter represent the right to
receive shares of AES common stock. The Agreement and Plan of Amalgamation is
subject to various conditions, including the approval of the holders of the
Class A common stock of the Company. In the Amalgamation, all outstanding
options to acquire Class B common stock in the Company under the Company's
Incentive Stock Option Plan would be converted into options to acquire shares of
AES common stock. The Company's shareholders approved the Amalgamation at a
Special Class Meeting of holders of the Class A common stock and a Special
General Meeting of the shareholders of the Company, both of which were held on
April 10, 1997. The Amalgamation is expected to become effective in late April
1997 after certain regulatory filings are made in Bermuda.
Item 2. Discussion and Analysis of Financial Condition and Results of
Operations
Introduction
The Company, directly and through its wholly owned offshore subsidiaries,
engages in the development, construction, operation and ownership of electric
power generating facilities in the PRC by means of its participation in joint
ventures. The Company currently owns interests in the following eight power
plants (the "Current Projects") with an aggregate nameplate capacity of
approximately 818MW.
Projects in Operation or Under Construction
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Company Company
Location Capacity Interest Ownership
Joint Venture(s) (Province) (MW) (MW) (%) Fuel Status
- ---------------- ---------- -------- -------- --------- ---- ------
Jiaozuo Wan Fang Henan 250 175 70 Coal Under construction
Power Company (first unit scheduled to
Ltd. be in operation by the
("Jiaozuo second quarter of 1997:
Aluminum second unit scheduled
Power") to be in operation by the
second quarter of 1998)
<PAGE>
Wuhu Shaoda Anhui 250 62.5 25 Coal In operation
Electric Power (second unit passed its
Development output performance test on
Company Ltd. March 17, 1997)
("Wuhu Grassy Lake")
Anhui Liyuan-AES Anhui 115.2 80.6 70 Oil Under construction
Power Company (simple cycle unit
Ltd. and Hefei scheduled to be in
Zhongli Energy operation by the third
Company Ltd. quarter of 1997:
("Hefei Prosperity combined cycle unit
Lake") scheduled to be in
operation in the second
quarter of 1998)
Wuxi-AES-CAREC Jiangsu 63 34.7 55 Oil In operation
Gas Turbine Power
Company Ltd. and
Wuxi-AES-
Zhonghang Power
Company Ltd.
("Wuxi Tin Hill")
Sichuan Fuling Aixi Sichun 50 35 70 Coal Under construction
Power Company (scheduled to be in
Ltd. operation in February
("Aixi Heart River") 1998)
Chengdu AES-Kaihua Sichuan 48 16.8 35 Natural Under construction
Gas Turbine Power Gas (scheduled to be in
Company Ltd. operation in the third
("Chengdu Lotus quarter of 1997)
City")
Huanan Xingci-AES Hunan 26.2 13.4 51 Hydro In operation.
Hydro Power (last unit passed its
Company Ltd. performance test on
("Cili Misty Mountain") February 22, 1997)
Yangchun Fuyang Guangdong 15.1 3.8 25 Oil In operation
Diesel Engine Power
Company Ltd.
("Yangchun Sun
Spring")
----- -----
Total 817.5 421.8
----- -----
</TABLE>
The Company is considering an investment in Yangcheng Sun City, a project with
an aggregate nameplate capacity of 2,100MW, and is considering investments in
two other power projects,
<PAGE>
namely Tianjin Teda and Nanpu Southern Delta, with an aggregate nameplate
capacity of 800MW (the "Potential Projects").
The Company and AES Corporation have entered into an Amended and Restated
Agreement and Plan of Amalgamation, dated as of November 12, 1996, pursuant to
which a wholly owned subsidiary of AES would amalgamate (the "Amalgamation")
with the Company and each share of the Company's Class A common stock
outstanding prior to the Amalgamation will thereafter represent the right to
receive shares of AES common stock. The Agreement and Plan of Amalgamation is
subject to various conditions, including the approval of the holders of the
Class A common stock of the Company. In the Amalgamation, all outstanding
options to acquire Class B common stock in the Company under the Company's
Incentive Stock Option Plan would be converted into options to acquire shares of
AES common stock. The Company's shareholders approved the Amalgamation at a
Special Class Meeting of holders of the Class A common stock and a Special
General Meeting of the shareholders of the Company, both of which were held on
April 10, 1997. The Amalgamation is expected to become effective in late April
1997 after certain regulatory filings are made in Bermuda.
After the Amalgamation, the Company's ability to invest in projects will be
substantially limited by covenants contained in various AES debt agreements (the
"AES Debt Covenants"). See "Liquidity and Capital Resources."
In March 1997, the Wuxi Tin Hill joint venture reached agreement with the power
purchaser on the amount of payment for required minimum offtake of electricity
for 1996, which was in dispute. The agreement included the deferral of certain
amounts scheduled to be paid in 1996 and a corresponding adjustment upward of
future scheduled payments of capital return.
On March 17, 1997, the second unit of the Wuhu Grassy Lake 250 MW coal-fired
facility passed its output performance test. This essentially completes the
construction of the facility. However, the project has experienced delays in
obtaining approvals for electricity tariff to be paid to the joint venture. Due
to this delay and uncertainty related to the actual level of tariff to be
approved, no amount for the Company's equity in the earnings of the Wuhu Grassy
Lake project has been recognized in the statement of operations.
Results of Operations
Revenues and Cost of Sales. Total revenue increased from approximately $0.4
million to $2.5 million from the first quarter of 1996 to the first quarter of
1997. Costs of sales, which include fuel, operations, maintenance expenses,
depreciation and amortization, increased from approximately $0.2 million to $1.7
million from the first quarter of 1996 to the first quarter of 1997. The
increases in revenues and costs of sales were primarily due to the commencement
of operations of the Wuxi Tin Hill project.
Development, Selling, General and Administrative Expenses. Development, selling,
general and administrative expenses decreased approximately $0.4 million from
$2.0 million to $1.6 million from the first quarter of 1996 to the first quarter
of 1997. The decrease was primarily due
<PAGE>
to the capitalization of development costs associated with the Yangcheng Sun
City project, which has achieved certain project related milestones.
Interest Income. Interest income increased $1.2 million from $2.0 million to
$3.2 million from the first quarter of 1996 to the first quarter of 1997. The
increase was primarily due to the proceeds received from the Company's public
debt offering in December 1996 being available for investment in marketable
securities for the three months ended February 28, 1997.
Interest Expense. During the first quarter of 1997, interest expense was
approximately $1.2 million. There were two components to interest expenses
incurred in the first quarter of 1997: (i) the interest expense associated with
the issuance of the 2006 Notes in December of 1996, offset in part by
capitalization of interest incurred during the development and construction of
the Company's projects, and (ii) interest on two minority shareholder loans to
Wuxi-AES-CAREC. Capitalized interest was approximately $3.0 million for the
first quarter of 1997. For the corresponding period in 1996, the Company had no
outstanding loans.
Amalgamation Cost. Amalgamation cost of approximately $0.1 million related to
expenses incurred in pursuing the proposed Amalgamation with AES announced in
November 1996.
Liquidity and Capital Resources
The Company's business has required substantial investment associated with the
development, acquisition and construction of electric power plants and related
facilities through its Joint Ventures. Since commencing business, the Company
has entered into commitments to invest a total of approximately $259.6 million
in the form of equity contributions and loans to its Joint Ventures, of which
$178.4 million has been invested as of March 31, 1997. If the Amalgamation is
not consummated or the AES Debt Covenants otherwise do not apply, the Company
would expect to incur additional commitments in the future in connection with
the development, acquisition, construction, ownership and operation of
additional electric power plants and related facilities in China.
If any holder of shares of Class A Common Stock exercises dissenter's rights
under Bermuda law in connection with the Amalgamation, the Company would be
obligated to pay any amounts awarded by a Bermuda court, which would reduce the
amounts available for investment in the Current Projects or the Potential
Projects.
The Company is not currently affected by the AES Debt Covenants because it is
not a subsidiary of AES. After the Amalgamation, the Company will be subject to
the AES Debt Covenants, including those contained in the documents governing
AES's 10 1/4% Subordinated Notes due 2006, 9 3/4% Senior Subordinated Notes due
2000 and $425 million credit facility due 1999. The material limitations that
will become applicable to the Company pursuant to the AES Debt Covenants will
include those described below.
Under the AES Debt Covenants, AES may not permit any subsidiary with a direct or
indirect interest in a power generation facility (as defined in the relevant
agreements) to make any
<PAGE>
investment in, or to consolidate or merge with, any other entity with a direct
or indirect interest in any other power generation facility or other business.
Immediately prior to the expected consummation of the Amalgamation, the Company
intends to contribute the net proceeds of the 2006 Notes remaining after the
funding of an interim reserve account and a debt service reserve account to its
subsidiaries to provide funding for the Potential Projects and other future
projects, as well as additional funding for the Current Projects. It is
anticipated that these amounts will not in the aggregate be more than
approximately $80 million. Under the AES Debt Covenants, as a general matter,
after exhaustion of these amounts, no additional AES Chigen funds would be
available to fund investment in additional power projects or to fund the capital
requirements and construction cost overruns for the Current Projects. As a
consequence, opportunities for investment, along with the associated risks, that
would otherwise be available to the Company may instead be taken by other
investors, including AES. Additional capital requirements for AES
Chigen-invested projects would have to be funded by other parties, including
AES, which would result in a dilution of the Company's interest in any such
project. In addition, due to the application of the AES Debt Covenants, cash
flow generated from projects would not be permitted to be invested in any other
project. As a result, to the extent these funds are not required to pay expenses
incurred by the Company, they may accumulate over time. The Company is
permitted, pursuant to the terms of the Indenture under which the 2006 Notes
were issued, to pay a portion of such funds as dividends, provided that the
Company satisfies certain conditions.
In addition, under the AES Debt Covenants, investment could not be made in a
project directly by the Company (as opposed to through one of its subsidiaries).
Accordingly, prior to the Amalgamation, the Company intends to transfer its
interests in certain potential projects, such as Yangcheng Sun City and Nanpu
Southern Delta, to wholly owned subsidiaries of the Company. In the case of each
of these projects, the consent of the Company's partners in such project and the
examination and approval of the relevant PRC government authority are required
to effect the transfers of the Company's interest. There can be no assurance
that such consents and approvals will be obtained in order to permit investments
to be made in these projects following the Amalgamation.
One of the results of the Amalgamation will be to terminate the Non-Competition
and Non-Disclosure Agreement, dated as of December 29, 1993 and amended and
restated as of February 1, 1994 (the "Non-Competition Agreement") between the
Company and AES, which, among things, prohibits the Company from developing,
constructing, owning, managing and operating electric power generation projects
in any part of Asia other than China. Subject to the limitations imposed by the
AES Debt Covenants, the Company may consider investing through its subsidiaries
in power projects outside of China.
Under the AES Debt Covenants, the Company and its subsidiaries would be
effectively prohibited from incurring additional indebtedness (as defined in the
relevant instruments), except that a subsidiary would under some circumstances
be permitted to incur indebtedness for the purpose of financing a power project
as long as such indebtedness did not have recourse to AES, the Company or
another subsidiary.
<PAGE>
Both the AES Debt Covenants and the covenants contained in the Indenture for the
2006 Notes applicable to the Company require the repayment or purchase of
indebtedness under specified circumstances involving asset dispositions. Insofar
as separate repayments are required at the AES and the Company levels with
respect to a single asset sale, this covenant may tend to cause the Company not
to make an asset sale under circumstances where it otherwise would.
Under the AES Debt Covenants, an AES subsidiary is not permitted to make an
investment in a project company following the occurrence of a condition
permitting the acceleration of indebtedness relating to the project or any
failure to pay such indebtedness at its final maturity.
Cash from Operations
Net cash provided by operating activities for the three months ended February
28, 1997 totaled $3.7 million as compared to $1.9 million used in operating
activities for the same period in 1996. The increase in 1997 resulted primarily
from an increase in net income due to the commencement of operations of Wuxi Tin
Hill and interest income from investments in marketable securities and a net
increase in the components of working capital.
Cash from Investing Activities
Net cash used in investing activities totaled $96.6 million during the first
quarter of 1997 as compared to $8.2 million used in investing activities during
the same period of 1996. The 1997 amount primarily reflected the purchase of
property, plant and equipment and other project related investments of $49.5
million and the purchase of short-term investments (net of any proceeds from the
maturity or sale of short-term investments) of $47.1 million.
Cash from Financing Activities
Net cash provided by financing activities during the first quarter of 1997
aggregated $182.4 million as compared to $7.8 million used in financing
activities during the same period of 1996. During the first quarter of 1997, the
Company received proceeds, net of underwriting discounts and commissions and
offering costs, of $174.2 million from the issuance of the 2006 Notes, proceeds
of $8.2 million from bank loans available to subsidiaries and $2.2 million of
loans and contributions made to subsidiaries by minority shareholders, which
were partially offset by repayment of bank loans of $1.7 million and repayment
of $0.7 million of loans from minority shareholders.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit
Number Document
-------- --------
11 Statements Regarding Computation of Earnings Per Share.
27 Financial Data Schedule.
99.1 Statement Re: Computation of Fixed Charge Coverage Ratio.
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AES China Generating Co. Ltd.
(Registrant)
Date: April 14, 1997 /s/ Jeffery A. Safford
----------------------
Jeffery A. Safford
Vice President,
Chief Financial Officer and
Secretary
<PAGE>
Exhibit 11
AES CHINA GENERATING CO. LTD.
STATEMENTS REGARDING COMPUTATION OF EARNINGS PER SHARE
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
<S> <C> <C>
Three Months Ended
February 28, 1997 February 29, 1996
-----------------------------------------------
(unaudited)
PRIMARY
Weighted Average Number of Shares of
Common Stock Outstanding 15,637 15,647
Net effect of Dilutive Stock Options Based
on the Treasury Stock Method Using
Average Market Price 347 -
Stock Allocated to Pension Plan 6 -
-------------------- ------------------
Weighted Average Shares Outstanding 15,990 15,647
==================== ==================
Net Income US$ 1,123 US$ 316
==================== ==================
Per Share Amount US$ 0.07 US$ 0.02
==================== ==================
FULLY DILUTED
Weighted Average Number of Shares of
Common Stock Outstanding 15,637 15,647
Net Effect of Dilutive Stock Options Based
on the Treasury Stock Method Using Ending
Market Price 550 -
Stock Allocated to Pension Plan 6 -
-------------------- ------------------
Weighted Average Shares Outstanding 16,193 15,647
==================== ==================
Net Income US$ 1,123 US$ 316
==================== ==================
Per Share Amount US$ 0.07 US$ 0.02
==================== ==================
</TABLE>
<PAGE>
Exhibit 99.1
AES CHINA GENERATING CO. LTD.
STATEMENT RE: COMPUTATION OF FIXED CHARGE COVERAGE RATIO
(in thousands except ratio amounts)
<TABLE>
<CAPTION>
<S> <C> <C>
Three months ended
February 28, 1997 February 29, 1996
-------------------------------------------------
Adjusted Cash Flow
(A) Cash Inflow:
(i) Dividend, distribution, payment of interest and
scheduled repayment of loan received by the Company
and its Wholly Owned Subsidiaries from the Project
Companies $ 800 $ --
(ii) 50% of the combined interest income of the Company,
and its Wholly Owned Subsidiaries from cash, cash
equivalents and investments in marketable securities 1,019 932
--------------------- ----------------------
1,819 932
--------------------- ----------------------
(B) Cash Flow:
(i) Selling, general and administrative expenses of the
Company and its Wholly Owned Subsidiaires 486 953
(ii) Company Designated Costs -- 1,184
--------------------- ----------------------
486 2,137
--------------------- ----------------------
$ 1,333 $ (1,205)
===================== ======================
Adjusted Interest Expenses $ 3,848 $ --
===================== ======================
Fixed Charge Coverage ratio 0.35 : 1.0 --
===================== ======================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED
FEBRUARY 28, 1997 AND THE CONSOLIDATED BALANCE SHEET AS OF FEBRUARY 28, 1997 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> FEB-28-1997
<CASH> 145,738
<SECURITIES> 56,565
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 1,057
<CURRENT-ASSETS> 208,014
<PP&E> 209,824
<DEPRECIATION> 4,016
<TOTAL-ASSETS> 473,291
<CURRENT-LIABILITIES> 16,523
<BONDS> 221,829
0
0
<COMMON> 157
<OTHER-SE> 191,607
<TOTAL-LIABILITY-AND-EQUITY> 473,291
<SALES> 0
<TOTAL-REVENUES> 2,507
<CGS> 0
<TOTAL-COSTS> 1,726
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,170
<INCOME-PRETAX> 1,153
<INCOME-TAX> 86
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,123
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
