AES is out to please power customers around the world. A leading independent power producer, the company has interests in 98 generation facilities in 23 countries throughout the Americas, Asia, Africa, Europe, and the Middle East that gave it a net generating capacity of 40,023 MW in 2012. AES sells electricity to utilities and other energy marketers through wholesale contracts or on the spot market. AES also sells power directly to customers worldwide through stakes in distribution utilities, mainly in Latin America and the US. In 2012 the company reported that it had 2,212 MW of traditional power plants under development in eight countries.
AES has operations in Argentina, Brazil, Bulgaria, Cameroon, Chile, Colombia, Dominican Republic, El Salvador, Hungary, Jordan, Kazakhstan, Panama, Pakistan Philippines, Mexico, Oman, Philippines, Puerto Rico, Qatar, Spain, Sri Lanka, the UK, the Ukraine, and the US. In 2012 Brazil accounted for 31% of the company's revenues; the US, 20%.
The company operates 37 generation businesses across five continents and 13 utility companies, primarily in Brazil and the US. It addition to traditional power generation and electric distribution businesses, in 2012 AES had 1,863 MW of renewable power capacity (primarily wind farms) in nine countries on three continents.
Revenues increased by 5% as the result of acquisitions (including DPL). Utilities' revenues grew thanks to DPL (new retail customers added in Illinois), higher prices of IPL in Indiana (higher fuel adjustment and other pass-through charges), and increased energy available for wholesale sales as regulated customers switched to other suppliers. The Generation segment revenues in Asia grew thanks to favorable derivative mechanisms.
However, AES reported a net loss of $912 million in 2012 (compared to met income of $58 million in 2011) due to increased operating expenses, a major goodwill impairment ($1.8 billion, primarily related to the DPL purchase), and foreign currency transaction losses.
AES is focusing on expanding in core markets, specifically Brazil, Chile, Colombia, and the US, while developing assets in target growth countries including Turkey, Poland, and the UK. It is also exiting selected non-strategic markets to narrow its geographic focus in order to achieve better results from fewer countries. The company is also aiming to reduce overhead and business development costs.
In this context in 2012 the company sold or agreed to sell power assets in China (coal, hydro and wind plants for $134 million), France ($42 million of assets), the US (power plants in New Jersey and Pennsylvania) and Spain.
Growing its presence in Turkey, in 2011 AES took advantage of the privatization of power generation in that country to form a joint venture with energy giant Koc to develop a coal project..
AES has earmarked $150 million to build a coal-fueled power plant in El Salvador. The 250 MW plant will be the first of its kind in the Latin American country. Owning four of the five electricity distribution companies in El Salvador, AES controls nearly 80% of the country's electric distribution utility.
Mergers and Acquisitions
In 2011 AES acquired in a $4.7 billion deal. The acquisition, which involves $3.5 billion in cash and $1.2 billion in assumed debt, allows AES to complement its nearby Indianapolis Power and Light unit with another utility operating in a US growth market. Following the transaction DPL remained a standalone company.
China Investment Corporation owns about 17% of AES.