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Just as your pulse is checked during a routine physical, free cash flow is used as an indicator of a company's health. It equals the cash brought in from operations minus the money needed to pay the bills. Think about leftover money in your checking account after you pay this month's bills.
Investors and analysts see this leftover money as a gauge of a company's ability to perform. It is available for transactions such as handing out dividends and working on new products.
Some argue free cash flow is wrongly overshadowed by the emphasis often placed on earnings. Earnings numbers can be manipulated and don't always tell the whole story -- and earnings don't mean much if there's nothing left over after a company pays its expenses. Even if you bring in a six-figure salary, but no money left after paying the bills, are you in great financial shape?
You don't have to be Einstein to figure out free cash flow. To calculate the number, subtract the company's expenditures and dividends from its operating cash flow.
If the free cash flow is written in red ink, it doesn't necessarily signal curtains. This is common for young companies looking to grow. It also could be a result of heavy investments, which in the long run could be worth a standing ovation.
Home / Markets / Industries / Energy
Friday, May 09, 2008
AES Acquires Landfill Gas Project in El Salvador to Reduce Greenhouse Gas Emissions and Produce Renewable Energy
Comtex
ARLINGTON, Va., May 09, 2008 (BUSINESS WIRE) ----The AES Corporation (NYSE:AES) today announced the acquisition of a landfill gas to renewable energy project in Nejapa, El Salvador that is projected to generate an average of 400,000 Certified Emissions Reductions (CERs) annually over the next 20 years.
"The purchase of the Nejapa Landfill Project further demonstrates AES's global commitment to reducing greenhouse gases," said Bill Lyons, President, AES Climate Solutions. "This transaction, one of the first acquisitions involving a Clean Development Mechanism project since the start of the Kyoto process, will help reduce emissions while providing power to the growing El Salvador market. This is the first of many opportunities we see for AES to invest in a broad range of projects and technologies that reduce harmful greenhouse gas emissions."
AES Nejapa Gas, Ltda., an indirect, wholly-owned subsidiary of AES, will own and operate the gas gathering system at the Nejapa Landfill site. The company also will install and operate energy generation equipment to provide up to 25 MW of renewable energy from the capture and combustion of methane, a potent greenhouse gas with a global warming potential 21 times greater than carbon dioxide.
"Through investments in projects like Nejapa, which converts waste to energy, AES is working to provide citizens of El Salvador with a secure supply of energy today and well into the future," said Fernando Pujals, President, AES El Salvador. "We will continue to seek investments aimed at improving the quality of life for our customers and the communities we serve."
AES started its Climate Solutions business in 2005 and is building a portfolio of projects to lower greenhouse gas emissions by over 34 million tonnes each year by the end of 2012. The company's current global pipeline includes projects that could produce up to 19 million CERs annually from renewable energy generation, reduction of greenhouse gas emissions from third party sources - primarily methane - and energy efficiency initiatives.
About AES
AES is one of the world's largest global power companies, with 2007 revenues of $13.6 billion. With operations in 29 countries on five continents, AES's generation and distribution facilities have the capacity to serve 100 million people worldwide. Our 13 regulated utilities amass annual sales of over 78,000 GWh and our 123 generation facilities have the capacity to generate more than 43,000 megawatts. Our global workforce of 28,000 people is committed to operational excellence and meeting the world's growing power needs. To learn more about AES, please visit www.aes.com or contact AES media relations at media@aes.com.
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES's current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to, continued normal levels of operating performance and electricity volume at our distribution companies and operational performance at our generation businesses consistent with historical levels, as well as achievements of planned productivity improvements and incremental growth investments at normalized investment levels and rates of return consistent with prior experience.
Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES's filings with the Securities and Exchange Commission, including, but not limited to, the risks discussed under Item 1A "Risk Factors" in AES's 2007 Annual Report on Form 10-K. Readers are encouraged to read AES's filings to learn more about the risk factors associated with AES's business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE: AES Corporation
AES Corporation Media Contact Robin Pence, 703-682-6552 Investors Ahmed Pasha, 703-682-6451
Copyright Business Wire 2008
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