The AES Corporation · NYSE:AES
The AES — Lehman Brothers CEO Energy/Power Conference 2008
27 slides from The AES's conference presentation, Sep 4, 2008
Slide 1: AES Corporation
AES Corporation September 4, 2008 Victoria Harker, Executive VP and Chief Financial Officer Lehman Brothers CEO Energy/Power Conference 1
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure Certain statements in the following presentation regarding AES’s business operations may constitute “forward-looking statements.” Such forward- looking statements include, but are not limited to, those related to future earnings growth and financial and operating performance.
Slide 3: AES Overview
AES Overview Contains Forward Looking Statements z A mix of core power, renewables and climate solution businesses Unique Electric z Operations in 29 countries with workforce of over 28,000 Power Company z Holding company structure with broad capabilities – e.g., fuel/ technology, development and co
Slide 4: AES is Among the Largest Global Power Companies
AES is Among the Largest Global Power Companies Contains Forward Looking Statements 1,185 MW Wind Generation in the United States 124 Power plants worldwide totaling more than 43 GW gross generation capacity Fuel Type Geography Asia & Renewables Middle East Latin Coal America 15 Utilities worldwide,
Slide 5: Track Record of Growth in Key Financial Metrics
Track Record of Growth in Key Financial Metrics Contains Forward Looking Statements Adjusted Earnings Per Share1 Operating Cash Flow ($ in Millions)2 3% (1) U p4 w h Flo as $2,206 eC $2,087 33% Fr e AG R $1.02 -2007 $1,878 C 4 -200 7 $0.94 200 04 $1,436 3 20 $1,372 $1,290 $0.64 $1,340 $0.43 $939 $16
Slide 6: Our Strategy is Aligned With Key Market Trends
Our Strategy is Aligned With Key Market Trends Contains Forward Looking Statements Market Conditions AES Strengths AES Focus Global demand for new z More than 16 Core Power generation capacity years international z Gas continues to grow development, construction and z Coal z Higher GDP growth, incre
Slide 7: 2,500 GW of Additional Global Power Needed by 2020
2,500 GW1 of Additional Global Power Needed by 2020 Contains Forward Looking Statements Greenfield Gross Capacity Investment AES's Global Core Power Pipeline Needs by 2020 As of May 2008 2,500 GW 29 GW Latin America Latin America 5% North America 11% North America 12% 8% Europe, 13% CIS & Africa 22%
Slide 8: Progress Continues in Projects Under Construction
Progress Continues in Projects Under Construction Contains Forward Looking Statements z Currently 3,000 MW under construction in 8 countries z Since December 2007, began construction on 4 power projects in 3 countries totaling 954 MW 1 (100% platform expansion); Commenced simple cycle operations for
Slide 9: We Are Aggressively Executing Our 29,000 MW Core Power Development Pipeline
We Are Aggressively Executing Our 29,000 MW Core Power Development Pipeline – Examples Contains Forward Looking Statements Land Fuel Rights Supply Power Environmental Letter of for the Water Secured Engineering Purchase Permits Intent Power Rights Tolling/ and Agreement/ Commercial Fuel Platform Sig
Slide 10: We Are Well-Positioned to Achieve Our Core Power Growth Targets
We Are Well-Positioned to Achieve Our Core Power Growth Targets Contains Forward Looking Statements Expected New Capacity Additions in MW z Core Power Already in Construction by Year 2012 prior to Guidance 1,964 MW4 under construction at the time of long term guidance 8,000 z Incremental Capacity
Slide 11: We Are Also Successfully Growing Our Global Wind Pipeline
We Are Also Successfully Growing Our Global Wind Pipeline Contains Forward Looking Statements AES’s Global Wind Global Wind Potential Installed Capacity (MW)1 Pipeline (6,000 MW) 250,000 Rest of World Asia & the % North Middle East 200,000 Asia Pacific R 20 America North America CAG 11% 12 150,000 E
Slide 12: Significant Milestones Already Achieved to Deliver Wind Growth
Significant Milestones Already Achieved to Deliver Wind Growth – Examples Contains Forward Looking Statements Environmental Interconnection Capacity Site Permitting Turbine Delivery Long-Term Construction Commercial Countries Wind Data MW Control Secured PPA/Tariff Start Operation Date Applied Secur
Slide 13: We Are Also Well Positioned to Achieve Our Wind Power Targets
We Are Also Well Positioned to Achieve Our Wind Power Targets Contains Forward Looking Statements Expected New Capacity Additions in MW Wind Power Growth Guidance1 by Year 2012 z 2,600 MW additional capacity in operation by 2012 3,000 Guidance1 2,500 2,000 Progress 1,500 z 700 MW2 already in operati
Slide 14: Solar Offers Significant Growth Opportunities
Solar Offers Significant Growth Opportunities Contains Forward Looking Statements Market Drivers Projected Global Solar PV Installed Capacity (MW)1 z Significant increase in fossil fuel prices 7,000 z Government incentives z Steadily dropping cost of solar energy 6,000 % from more efficient photovol
Slide 15: Carbon Regulations Are Expected to Create a Need for Carbon Reductions/Offsets
Carbon Regulations Are Expected to Create a Need for Carbon Reductions/Offsets Contains Forward Looking Statements Kyoto Protocol: Phase II Potential Market Size of 1,500–3,000 Million Tonnes of Offsets per Year AES Climate Solutions Pipeline by Region AES Climate Solutions Pipeline by Sector z Curr
Slide 16: High Quality Development Pipeline Positions AES to Help Meet Market Demand Through 2012
High Quality Development Pipeline Positions AES to Help Meet Market Demand Through 2012 Contains Forward Looking Statements Core Power Wind Power 1 800 2 132 GW GW 29 4 6 4.1 2.6 Global Potential AES's Base Case Growth Global Potential AES's Base Case Growth Development Target by 2012 5 Development
Slide 17: Focused Acquisition Strategy
Focused Acquisition Strategy Contains Forward Looking Statements Masinloc – the Philippines TEG and TEP – Mexico 660 MW Coal-Fired Plant 460 MW Pet Coke-Fired Plants z $930 million acquisition closed in April 2008 z $611 million acquisition closed in Closed on ~$650 million non-recourse financing
Slide 18: Portfolio Management is Also a Good Source of Capital to Grow Our Business
Portfolio Management is Also a Good Source of Capital to Grow Our Business Contains Forward Looking Statements Continuous Assessment of Asset Hold Versus Market Value, Risk Profiles, and Strategic Fit Drive Capital Market Transactions Examples Gener, Chile Kazakhstan z Sold 10% stake in Gener (Chile
Slide 19: Earnings Growth Driven by Diversified Factors
Earnings Growth Driven by Diversified Factors Contains Forward Looking Statements As a Result, We Target 14–17% Growth in EPS Over the Next Five Years (CAGR), Tied To Pipeline Projects in Each Segment 2.50 $2.10 2.00 Core Power Wind and Climate Solutions $ Per Share 1.50 $1.16 Organic Growth and $1.
Slide 20: Forecast Shows Strong Cash Flow Growth
Forecast Shows Strong Cash Flow Growth Contains Forward Looking Statements Net Cash from Operating Free Cash Flow1,2 ($ in Millions) Activities2 ($ in Millions) 3,700 2,900 2,087 2,206 2,200 1,372 1,400 1,290 2006 2007 2008 2012 2006 2007 2008 2012 1 A non-GAAP financial measure. See Appendix. 2 Exc
Slide 21: Strategy to Increase Shareholder Value
Strategy to Increase Shareholder Value Contains Forward Looking Statements z Unique position Growing free cash flow Proven development, construction and operation capabilities Global growth potential with: – Organic growth of existing portfolio through performance improvements and increased de
Slide 22: The World Needs Power… …AES is Well Positioned
The World Needs Power… Contains Forward Looking Statements Existing Facility Development Office Pakistan China “Pakistan power shortage “China cuts aluminum hits steel, textile mills.” output by 6% on — Reuters, 01/05/08 power curbs.” — Bloomberg, South Africa 01/31/08 “South Africa, the world’s big
Slide 23: Appendix
COAES the power of being global Appendix
Slide 24: Reconciliation of Adjusted EPS
Reconciliation of Adjusted EPS Contains Forward Looking Statements Actual Forecast 2004 2005 2006 2007 2008 2009 2010 2011 2012 Diluted EPS from $1.20- $1.45- $1.70- $1.95- $0.29 $0.56 $0.27 $0.73 $2.22 Continuing Operations $1.25 $1.65 $1.95 $2.25 FAS 133 Mark to Market (Gains) – 0.03 (0.05) 0.03 –
Slide 25: Cash Flow Reconciliation
Cash Flow Reconciliation Contains Forward Looking Statements Actual Forecast 20041 2005 2006 2007 2008 2009 2010 2011 2012 (Restated) (Restated) (Restated) Net Cash Provided by 2,200- 2,300- 2,900- 3,300- 1,487 2,220 2,351 2,357 2,200 Operating Activities 2,500 2,900 3,600 4,100 EDC Impact1 (51) (34
Slide 26: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures Adjusted earnings per share – Adjusted earnings per share (a non-GAAP financial measure) is defined as diluted earnings per share from continuing operations excluding gains or losses associated with (a) mark-to-market amounts related to FAS 133 derivative t
Slide 27: Assumptions
Assumptions Forecasted financial information is based on certain material assumptions. Such assumptions include, but are not limited to: (a) no unforeseen external events such as wars, depressions, or economic or political disruptions occur; (b) businesses continue to operate in a manner consistent
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