The AES Corporation (NYSE:AES) Q4 2014 Earnings Conference Call - Final Transcript

Feb 26, 2019 • 09:00 am ET


The AES Corporation (NYSE:AES) Q4 2014 Earnings Conference Call - Final Transcript


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Good morning. My name is Sean, I will be your conference operator today. At this time, I would like to welcome everyone to the AES Corporation's Fourth Quarter and Full Year 2014 Financial Review Conference Call. [Operator Instructions] Thank you. Vice President of Investor Relations, Mr. Ahmed Pasha, you may begin your conference.

Ahmed Pasha

Thank you, Sean. Good morning, and welcome to our Fourth Quarter and Full Year 2014 Earnings Call. Our earnings release presentation and related financial information are available on our website at Today, we will be making forward-looking statements during the call. There are many factors that may cause future results to differ materially from these statements. Please refer to our SEC filings for a discussion of these factors.

Joining me this morning are Andres Gluski, our President and Chief Executive Officer, Tom O'Flynn, our Chief Financial Officer and other senior members of our management team. With that, I will now turn the call over to Andres. Andres?

Andres Ricardo Gluski Weilert

Good morning, everyone, and thank you for joining our Fourth Quarter and Full Year 2014 Earnings Call. Today I will, first, review our 2014 results, second, discuss the current macroeconomic environment and how it will affect our 2015 guidance, third, provide an update on the execution of our strategy to date, fourth, share my thoughts on capital allocation and fifth, discuss our priorities for 2015. Then Tom will discuss our 2014 results and 2015 guidance and longer-term expectations in detail.

Turning to Slide 4. During 2014, we made significant progress on our strategy and continued to position our company for the future. During this year, we brought in financial partners to invest $1.9 billion in our subsidiaries, announced or closed 10 transactions for $1.8 billion in equity proceeds from asset sales, broke new ground on six new platform expansion projects, totaling 2,200 megawatts and won [Phonetic] long-term contracts to build 1,400 megawatts of capacity in California. We allocated $600 million to reduce parent debt and improve our credit profile, returned $450 million to shareholders through dividends and buybacks and announced a doubling of our dividend, with an intended growth rate of 10%.

Turning to Slide 5. Unfortunately, our financial results for the year were affected by $0.10 of adverse hydrology in Panama and Brazil. Still, we earned an adjusted EPS of $1.30, which was at the lower end of our original guidance range of $1.30 to $1.40, and slightly better than our expectations at the end of our third quarter call in November. We are disappointed with our proportional free cash flow of $891 million. Although proportional free cash flow came in at the low end of our revised guidance, it is 20% lower than our original guidance, primarily driven by the higher working capital requirements in Brazil and Chile as well as increased receivables in Bulgaria. All of which, we expect to reverse in 2015.

Now turning to Slide 6. I would like to outline several factors affecting our 2015 outlook. Importantly, we have taken a number of steps