SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ____ to ____
Commission file number 333-82306
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Employees' Thrift Plan of Indianapolis Power & Light Company
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
The AES Corporation
1001 North 19th Street
Arlington, VA 22209
REQUIRED INFORMATION
A list of the required financial statements filed as part of this Form 11-K
is set forth on page F-1. The consent of Deloitte & Touche to the incorporation
by reference of these financial statements into the AES Corporation's Form S-8
Registration Statement relating to the Plan (Registration No. 333-82306) is set
forth hereto as Exhibit 23. The certification of the chief executive officer and
the chief financial officer of Indianapolis Power & Light Company, pursuant to
18 U.S.C. ss.1350, is attached hereto as Exhibit 99.
Employees' Thrift Plan of Indianapolis Power & Light Company
Financial Statements for the Years Ended
December 31, 2002 and 2001,
Supplemental Schedules as of and for the
Year Ended December 31, 2002, and
Independent Auditors' Report
EMPLOYEES' THRIFT PLAN OF
INDIANAPOLIS POWER & LIGHT COMPANY
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Assets Available for Benefits as of December 31, 2002 and 2001 2
Statement of Changes in Assets Available for Benefits for the Year Ended December 31, 2002 3
Notes to Financial Statements 4
SUPPLEMENTAL SCHEDULES*:
Item 4i - Schedule H - Schedule of Assets (Held at the End of Year) as of December 31, 2002 9
Item 4j - Schedule H - Schedule of Reportable Transactions for the Year Ended
December 31, 2002 10
* Schedules not filed herewith are omitted because of the absence of the
conditions under which they are required by Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employees Retirement
Income Security Act of 1974.
EMPLOYEES' THRIFT PLAN OF
INDIANAPOLIS POWER & LIGHT COMPANY
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2002 AND 2001
--------------------------------------------------------------------------------
ASSETS 2002 2001
INVESTMENTS - at fair value:
The AES Corporation
Common Stock $ 8,065,808 $36,309,430
Merrill Lynch Equity Index Trust
Common/Collective Trust 4,181,345 5,752,509
Merrill Lynch Rtirement Preservatin Trust
Common/Collective Trust 4,215,854 4,797,633
Aim Income Fund
Mutual Fund 485,582 424,722
Alliance Technology Fund
Mutual Fund 1,134,435 2,044,443
Ivy International Fund
Mutual Fund 538,193 661,615
Merrill Lynch Capital Fund
Mutual Fund 2,094,130 2,782,731
Merrill Lynch Federal Securities Trust
Mutual Fund 10,364,771 12,811,956
Oppenheimer Main Street Income & Growth
Mutual Fund 6,344,482 8,296,472
----------- -----------
Total Investments 37,424,600 73,881,511
CASH 3,312 25,657
CONTRIBUTIONS RECEIVABLE 220,033 150,125
ACCRUED INTEREST AND DIVIDENDS 88,240 85,961
----------- -----------
ASSETS AVAILABLE FOR BENEFITS $37,738,185 $74,143,254
=========== ===========
See notes to financial statements.
EMPLOYEES' THRIFT PLAN OF
INDIANAPOLIS POWER & LIGHT COMPANY
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2002
--------------------------------------------------------------------------------
INCREASES
Employee contributions $ 2,570,285
Company contributions, net 1,324,211
Interest and dividend income 854,684
-----------
Total 4,749,180
-----------
DECREASES
Net depreciation in fair value of investments 32,745,727
Withdrawals by participants or their beneficiaries 8,380,653
Administrative fees 27,869
-----------
Total 41,154,249
-----------
DECREASE IN ASSETS AVAILABLE FOR BENEFITS (36,405,069)
ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR 74,143,254
-----------
ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $37,738,185
===========
See notes to financial statements.
EMPLOYEES' THRIFT PLAN OF
INDIANAPOLIS POWER & LIGHT COMPANY
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Employees' Thrift Plan of Indianapolis
Power & Light Company (the "Plan") have been prepared on the accrual basis.
Plan Assets
Assets of the Plan are maintained in trust. Once placed in trust, assets
may be withdrawn only for the purpose of refunding employee contributions,
payment of vested employer contributions to employees withdrawing from the
Plan, to employees obtaining an in-service (suspension) withdrawal, to
retiring employees, and to beneficiaries of deceased employees; or to pay
expenses of the Plan. All payments made from the trust require the approval
of the Employees' Pension Committee of the Employees' Thrift Plan of
Indianapolis Power & Light Company (the "Pension Committee").
Merrill Lynch Trust Company of America ("Merrill Lynch") is the sole
trustee and recordkeeper of the assets of the Plan.
Investments
Investments in securities are stated at fair value as determined by quoted
market prices. Investment transactions are recorded as of the trade date.
The cost of the securities sold is determined on a specific identification
basis.
Use of Management Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires that
management make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements. The reported amounts
of increases and decreases in assets during the reporting period may also
be affected by the estimates and assumptions management is required to
make. Actual results may differ from those estimates.
Administrative Fees
The Trustee assesses each participant $1.88 on a quarterly basis for the
base service fee. Participants pay a commission of $0.08 per share for open
market transactions in The AES Corporation ("AES") common stock. The
commission is reflected in the price per share for each transaction. There
are no other transaction-based fees for the investment funds.
Expenses for postage and handling for participant statements, confirmations
and distributions are charged directly to participants. It is estimated
that these expenses will be approximately $3.00 per participant per plan
year.
Payment of Benefits
Upon severance of employment, a participant may elect to receive a lump sum
payment for the full value of the participant's account, including vested
employer contributions and related earnings. The participant also has the
option of maintaining the account until reaching the age of 70 1/2 years.
Benefits are recorded when paid.
2. DESCRIPTION OF THE PLAN
The Plan is administered by the Pension Committee which is a committee of
not less than five persons appointed by the Indianapolis Power & Light
Company ("IPALCO") Board of Directors. The Plan is a defined contribution
plan, and employees become eligible to participate in the Plan immediately
upon date of employment.
All employees become fully vested in the Plan after five years of
uninterrupted service. Termination of employment before the five-year
requirement requires forfeiture of a prorated amount of allocated employer
contributions. Forfeited amounts may be used to reduce employer matching
contributions. As of December 31, 2002 there is currently $3,160 in the
forfeiture fund.
The Plan is valued on a daily "share" valuation.
Employee contributions are made through payroll deductions representing
amounts equal to a specific percentage of the employee's base rate of
compensation. Employees have the option of contributing anywhere from 1% to
21%, in increments of 1%, and direct their contributions into any of nine
options. Employees can make such contributions under a "Before Tax" or
"After Tax" option. Employer contributions are made in an amount equal to
current employee contributions up to a maximum of 4% and are invested in
the common stock of AES. Prior to February 9, 2002, employer contributions
were not transferable to any of the other funds. Effective February 9,
2002, participants are allowed to transfer employer contributions to any of
the available investment options in accordance with the Plan's procedures.
Each participant's account is credited with the participant's contribution
and the Company's matching contribution. Allocations of Plan earnings are
based on individual account balances relative to total account balances as
of the valuation dates.
Participant fund transfers are subject to certain restrictions as outlined
in the Summary Plan Description. In the event of partial or total
termination of the Plan, the funds in the Plan shall be valued as of the
date of partial or total termination and, after payment of necessary
expenses, shall be distributed as though all participants directly affected
by the partial or total termination had retired as of that date.
The Plan is maintained with the intent of being a qualified trust under
Section 401(a) of the Internal Revenue Code. Its related trust is exempt
from Federal income taxes under Section 501(a) of the Code. The Plan
obtained its latest determination letter on February 6, 2003 in which the
Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code.
The Plan has been amended since receiving the determination letter.
However, the Plan administrator and the Plan's tax counsel believe that the
Plan, as amended, is being operated in compliance with the applicable
requirements of the Internal Revenue Code.
Although it has not expressed any intent to do so, IPALCO has the right
under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants would become 100 percent vested in their employer
contributions.
Participants should refer to the Summary Plan Description for a more
detailed description of the Plan.
On March 27, 2001, AES acquired IPALCO Enterprises, Inc. through an
Agreement and Plan of Share Exchange.
On June 21, 2001, the Plan was amended to no longer allow non-union
employees to make contributions to or participate in the Plan effective
July 7, 2001. Effective January 1, 2003, all non-union employees, who were
hired prior to July 1, 2001, were given a choice to make a one-time
irrevocable election to rejoin the plan.
3. NONPARTICIPANT-DIRECTED INVESTMENTS
The employer contribution portion of AES common stock fund is
nonparticipant-directed. Information about the assets available for
benefits and significant components of the changes in assets available for
benefits relating to this fund is as follows:
2002 2001
Net assets:
The AES Corporation common stock $ 8,065,808 $36,309,430
Changes in assets:
Contributions $ 2,432,066
Net deprecation in fair value of investment (28,846,893)
Withdrawals by participants or their beneficiaries (763,026)
Transfers to participant-directed investments (1,064,419)
Administrative fees and other expenses (1,350)
------------
$(28,243,622)
4. RISKS AND UNCERTAINTIES
The Plan invests in various securities including U.S. Government
securities, corporate debt instruments, corporate stocks, registered
investment companies, and common/collective trusts. Investment securities,
in general, are exposed to various risks, such as interest rate, credit,
and overall market volatility. Due to the level of risk associated with
certain investment securities, it is reasonably possible that changes in
the values of investment securities will occur in the near term and that
such changes could materially affect the amounts reported in the statements
of net assets available for benefits.
5. INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's assets.
2002 2001
The AES Corporation common stock 2,670,797 and
2,220,760 shares, respectively $ 8,065,808* $36,309,430*
Oppenheimer Main Street Income & Growth
Mutual Fund, 244,019 and 255,276 shares, respectively $ 6,344,482 $ 8,296,472
Merrill Lynch Federal Securities Trust
1,001,427 and 1,291,528 shares, respectively $10,364,771 $12,811,956
Merrill Lynch Retirement Preservation Trust,
4,215,854 and 4,797,633 shares, respectively $ 4,215,854 $ 4,797,633
Merrill Lynch Equity Index Trust,
66,741 and 71,371 shares, respectively $ 4,181,345 $ 5,752,509
Merrill Lynch Capital Fund
94,076 and 104,105 shares, respectively $ 2,094,130 $ 2,782,731
* Includes nonparticipant-directed investments
During 2002, the Plan's investments (including both realized and unrealized
gains and losses) depreciated in value by $32,745,727 as follows:
Mutual Funds $ 2,638,096
Common/Collective Trust 1,260,738
Common Stock 28,846,893
-----------
Net depreciation in fair value of investments $32,745,727
===========
6. MERRILL LYNCH RETIREMENT PRESERVATION TRUST
One of the investment funds is the Merrill Lynch Retirement Preservation
Trust, which is a trust for the collective investment of Qualified Plans.
The majority of the fund assets consist of investment contracts which are
included in the financial statements at contract value, (which represents
contributions made under the contracts, plus earnings, less withdrawals and
administrative expenses) because they are fully benefit responsive. For
example, participants may ordinarily direct the withdrawal or transfer of
all or a portion of their investment at contract value. There are no
reserves against contract value for credit risk of the contract issuer or
otherwise. The contract value of the investment contracts at December 31,
2002 and 2001 approximates market value. The average yield rates for 2002
and 2001 were approximately 5.47% and 6.50%, respectively.
7. RELATED PARTY TRANSACTIONS
Merrill Lynch, the Plan Trustee, invests in AES common stock. Since AES is
the parent company of IPALCO Enterprises, Inc. and IPALCO Enterprises, Inc.
is the parent company of Indianapolis Power & Light, any investment
transactions involving AES common stock qualify as related-party
transactions. Merrill Lynch is also the Investment Manager for the Merrill
Lynch Retirement Preservation Trust, the Merrill Lynch Equity Index Trust,
the Merrill Lynch Capital Fund, and the Merrill Lynch Federal Securities
Trust.
*****
Form 5500 - Schedule H, Part IV, Line 4i
Schedule of Assets (Held at End of Year)
EIN: 35-0413620
PN: 003
EMPLOYEES' THRIFT PLAN OF
INDIANAPOLIS POWER & LIGHT COMPANY
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2002
------------------------------------------------------------------------------------------------------
Fair
Shares Description Cost Value
75,636 Aim Income Fund
Mutual Fund $ 485,582
29,581 Alliance Technology Fund
Mutual Fund 1,134,435
2,670,797 * The AES Corporation Common Stock $53,558,126 8,065,808
32,917 Ivy International Fund
Mutual Fund 538,193
4,215,854 * Merrill Lynch Retirement Preservation Trust
Common/Collective Trust 4,215,854
66,741 * Merrill Lynch Equity Index Trust
Common/Collective Trust 4,181,345
244,019 Oppenheimer Main Street Income & Growth
Mutual Fund 6,344,482
1,001,427 * Merrill Lynch Federal Securities Trust
Mutual Fund 10,364,771
94,076 * Merrill Lynch Capital Fund
Mutual Fund 2,094,130
-----------
Total Investments $37,424,600
===========
* Party-in-interest transaction
Form 5500 - Schedule H, Part IV, Line 4j
Schedule of Reportable Transactions
EIN: 35-0413620
PN: 003
EMPLOYEES THRIFT PLAN OF
INDIANAPOLIS POWER & LIGHT COMPANY
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2002
------------------------------------------------------------------------------------------------------------------
Purchase Selling
Description of Asset Price Price Net Loss
Single transactions representing 5% or more of
net assets available for benefits at beginning
of year:
No activity to report
Series of transactions representing 5% or more
of net assets available for benefits at beginning
of the year:
Purchased:
The AES Corporation Common Stock $3,713,836
Sold:
The AES Corporation Common Stock $9,573,888 $2,628,953 $(6,944,935)
INDEPENDENT AUDITORS' REPORT
To the Employees' Pension Committee of the Employees' Thrift Plan of
Indianapolis Power & Light Company
We have audited the accompanying statements of assets available for benefits of
the Employees' Thrift Plan of Indianapolis Power & Light Company as of December
31, 2002 and 2001, and the related statement of changes in assets available for
benefits for the year ended December 31, 2002. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the assets available for benefits of the Plan at December 31, 2002 and
2001, and the changes in assets available for benefits for the year ended
December 31, 2002, in conformity with accounting principles generally accepted
in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
Table of Contents are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plan's management. These
schedules have been subjected to the auditing procedures applied in our audit of
the basic 2002 financial statements and, in our opinion, are fairly stated in
all material respects when considered in relation to the basic 2002 financial
statements taken as a whole.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Indianapolis, Indiana
June 16, 2003
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
EMPLOYEE'S THRIFT PLAN OF INDIANAPOLIS POWER & LIGHT
COMPANY By the Plan Administrator:
EMPLOYEE'S PENSION COMMITTEE OF INDIANAPOLIS POWER &
LIGHT COMPANY
By: /s/ Edward J. Kunz
-------------------------------------------------
Edward J. Kunz, Chairman of the Committee
DATE: June 27, 2003