AES 4Q 07 Review

» AES Corporation
Fourth Quarter & Full Year 2007 Financial Review
March 17, 2008

» 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. 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 or better levels of
operating performance and electricity demand 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 from investments at investment levels and
rates of return consistent with prior experience. For additional assumptions see the Appendix to this
presentation. 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 the Company’s Annual Report on Form 10-K for the year
ended December 31, 2007, as well as our other SEC filings. AES undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new information, future events or
otherwise.

AES Corporation 1


» Highlights Contains Forward Looking Statements

› Q4 and full year 2007 financials at a glance
– Operating Cash Flow and Free Cash Flow(1) of $2.4 billion and $1.5 billion, respectively
› Up $119 million and $82 million, respectively, when compared to 2006, after excluding the impacts of EDC (sold in Q2 2007)

– Revenues for the year up 17% to $13.6 billion, with Gross Margin and IBT&MI at $3.4 billion and $1.6 billion,
respectively
– Q4 and full year Adjusted EPS(1) of $0.19 and $1.02
› Results include a one-time charge of $0.07 related to a change in Mexican tax law

› Improved operations in North American and European businesses, along with contributions from new businesses, helped offset the
higher costs and lower volumes in Chile & Argentina

› Portfolio and Capital Structure Optimization Plans on track
– Sold 10% stake in Chilean subsidiary (Gener) for approximately $300 million
– Issued $2 billion unsecured notes, primarily to refinance 2nd Lien notes; reducing secured debt as a percentage
of total debt from 43% to 17%
– Announced sale of Ekibastuz and Maikuben for an upfront price of $1.1 billion plus up to an additional $380
million in performance based earn-outs and management fees over a 3 year period
› Making significant progress to achieving our LT Growth Targets
– Announced as Winner of Bids in The Philippines and South Africa totaling 1,762 MW, subject to final negotiation
and closing conditions
– Secured coal rights for up to 2,400 MW of coal-fired capacity in India (OPCG expansion and Chhattisgarh)
– Added 427 MW of capacity to our wind operating portfolio, including the start-up of commercial operations for
phase 2 of the Buffalo Gap wind farm and the acquisition of Midwest wind from GE
– Began construction of an additional 170 MW expansion to Buffalo Gap wind farm (Buffalo Gap 3)

AES Corporation 2
(1)A Non-GAAP financial measure. See Appendix.


» Meeting Our Commitments

2007 Guidance(1) 2007 Results
Gross Margin $3.5 - $3.6 billion $3.4 billion
Income Before Income Taxes and $2.0 - $2.1 billion $1.6 billion
Minority Interest (IBT&MI)(1)
Diluted EPS from Continuing $1.04 $0.73
Operations(2)
Adjusted EPS(3)(4) $1.07 $1.02
Net Cash from Operations $2.2 - $2.3 billion $2.4 billion
Free Cash Flow(4) $1.2 - $1.4 billion $1.5 billion
Subsidiary Distributions(4) $1.1 billion $1.1 billion
Maintenance Capex $0.9 - $1.0 billion $0.9 billion
Total Capex $2.3 - $2.5 billion $2.5 billion

(1)2007 results include approximately $400 million net charges relating to impairments and write-offs net of gain from sale of investments.
(2)Includes$0.26 adjustments relating to impairments and write-offs net of gain from sale of investments, and an additional $0.07 one-time
deferred tax charge related to a change in Mexican tax law.
(3)2007 results include a one-time charge of $0.07 related to a change in Mexican tax law.
AES Corporation 3


» Fourth Quarter & Full Year 2007 Highlights
($ Millions Except Earnings Per Share and Percent)

Full Year Ended
Fourth Quarter December 31,
2006 2007 % Change 2007 2006 % Change
(Restated) (Restated)

Revenues $3,673 $2,934 25.2% $13,588 $11,576 17.4%

Gross Margin 809 789 2.5 3,409 3,434 (0.7)
(Loss) Income from (35) 68 (151.5) 1,614 1,001 61.2
Continuing Operations
Before Income Taxes &
Minority Interest (IBT & MI)
Diluted EPS from $0.00 ($0.02) n/a $0.73 $0.27 170.4%
Adjusted EPS(1) $0.19 ($0.02) n/a $1.02 $0.93 9.7%

› Strong results for Q4 2007 were primarily driven by:
– Improved operations in North American & European subsidiaries
– New businesses
– Favorable foreign currency translation

› Weaker results in Q4 2006 EPS were primarily driven by:
– North America outages
– Higher business development and restatement charges
– Brazil restatement charges
AES Corporation 4


» Reconciliation of Adjusted Earnings Per Share(1)
($ Per Share)

Full Year Ended
2007 2006 2007 2006

Diluted Earnings (Loss) Per Share from $0.00 ($0.02) $0.73 $0.27
FAS 133 Mark to Market (Gains)/Losses 0.02 - 0.03 (0.06)

Currency Transaction (Gains)/Losses - - - 0.01

Net Asset (Gains)/Losses and Impairments 0.09 - 0.18 0.68

Debt Retirement (Gains)/Losses 0.08 - 0.08 0.03

Adjusted Earnings (Loss) Per Share(1) $0.19 ($0.02) $1.02 $0.93

(1)A non-GAAP financial measure. See Appendix. AES Corporation 5


» Fourth Quarter 2007 Bridge
($ Per Share)
$0.19
$0.07

$0.11 $0.19
($0.10)

$0.02
($0.08)
($0.02) $0.00

Q4 2006 Higher Adjusted Q4 2007
Operational Impairments Debt Other Q4 2007
Overhead and Improvements EPS Adjusted
& Other Retirement Adjustments Diluted EPS
(Restated)
Factors(5) EPS(5)
Other in Q4 2007 Charges in Q4 related from
Diluted EPS
2007(3)
Significant (2) charges in Q4 Continuing
from
2007(4)
Charges in Q4 Operations
Continuing
2006(1)
Operations

(1)Primarily driven by higher G&A expenses in Q4 2006, Brazil restatement charges, Transgas restructuring charges and Panama non-recourse re-financing related write-off.
(2) Primarily driven by improved operations in North American & European subsidiaries.
(3)Impairments & Other Charges include: Uruguiana, AgCert, gain from sale of Gener shares, FAS 133 and other adjustments.
(4)Primarily driven by costs related to early retirement of recourse debt.
(5)A non-GAAP financial Measure. See Appendix.
AES Corporation 6


» Full Year 2007 Bridge
($ Per Share)

$0.29
$0.02
$0.18
$0.63
($0.08)
($0.09)
($0.20)

$1.02

$0.73

$0.27

FY 2007 FY 2007
FY 2006 Restructuring FY 2007 Gas Foreign Higher Other Adjusted EPS FY 2007
Factors(3)
Charges Net of Curtailment Operational Diluted EPS
Currency G&A and Adjustments Adjusted
(Restated)
EPS(3)
Impact in the Improvements Translation from
Asset Sale Restatement
Diluted (2) Continuing
Gains in 2006 Southern Charges
EPS from (1) Operations
Cone
Continuing
Operations

(1) Primarily
driven by $0.76 loss from Brasiliana restructuring, offset by ($0.13) gain from sale of Kingston.
(2)Primarily
driven by improved operations in North American & European subsidiaries and addition of new businesses.
(3)A non-GAAP financial measure. See Appendix.
AES Corporation 7


» Cash Flow Highlights
($ Millions)
Full Year Ended
2007 2006 2007 2006

Consolidated
Net Cash from Operating Activities(1) $488 $476 $2,357 $2,351
Maintenance Capital Expenditures:
Operational Maintenance Capex(2) $135 $255 $643 $702
Environmental Capex(2) $64 $37 $235 $165
Less: Total Maintenance Capital Expenditures(2) $199 $292 $878 $867

Free Cash Flow(2)(3) $289 $184 $1,479 $1,484

› Excluding the impacts of EDC, net cash from operating activities would have increased by $30 million for 4Q07
compared to 4Q06 and increased by $119 million for 2007 compared to 2006
› Excluding the impacts of EDC, free cash flow would have increased by $73 million for 4Q07 compared to 4Q06 and
increased by $82 million for 2007 compared to 2006

(1)Excluding the impacts of EDC, net cash from operating activities would have been $458 million for 4Q06, $2,206 million for 2007 and $2,087 million for 2006.
(3)Excluding the impacts of EDC, free cash flow would have been $216 million for 4Q06, $1,372 million for 2007 and $1,290 million for 2006.
AES Corporation 8


» Fourth Quarter & Full Year 2007 Subsidiary Distributions
($ Millions)

Fourth Quarter/Full Year Ended December 31, 2007 Subsidiary Distributions(1)
North Europe &
Other(2)
Latin America Asia Total
America Africa
Utilities 54 / 170 41 / 215 31 / 33 -/- 126 / 418
Generation 48 / 316 54 / 93 76 / 177 29 / 72 207 / 658
Other 10 / 23 10 / 23
Total 102 / 486 95 / 308 107 / 210 29 / 72 10 / 23 343 / 1,099

Top 10 Full Year Ended December 31, 2007 Subsidiary Distributions(1)
Business Amount Segment Business Amount Segment
IPALCO 170 NA Utilities Hawaii 49 NA Generation
New York 122 NA Generation Cartagena 42 E&A Generation
EDC(3) 97 LA Utilities Shady Point 38 NA Generation
Brasiliana 90 LA Utilities Ekibastuz 37 E&A Generation
Kilroot 69 E&A Generation Gener 36 LA Generation

(1)Anon-GAAP financial measure. See Appendix.
(2)Otherincludes wind and other alternative energy projects. AES Corporation 9
(3)AES sold EDC in Q2 2007.


» Fourth Quarter Segment Highlights
Latin America Generation
($ Millions except as noted)

Fourth Quarter Segment Highlights
2007 2006 % Change › Latin America Generation revenue increased
(Restated)
by $326 million to $1.0 billion, primarily due to:
Revenues $1,036 $710 46%
– Higher prices and volume in Chile of
Gross Margin 324 273 19%
approximately $184 million;
IBT&MI 20 149 (87%) – An increase in sales to Eletropaulo and the
volume of energy sold to third parties at
Tiete of approximately $55 million;
Comparison (% Change) Revenue Gross Margin – Higher spot market sales in the Dominican
Republic of approximately $20 million; and
Volume/Price/Mix 43% 24%
– Favorable foreign currency translation of
New Businesses/Projects 1% (1%) approximately $13 million.
Currency (Net) 2% (4%)
› Gross margin increased by $51 million to $324
Total 46% 19%
million, primarily due to the Tiete energy sales.

› IBT&MI decreased by $129 million to $20
million, primarily due to the Uruguaiana
impairment offset by the Gener share sale
gain.
AES Corporation 10


Latin America Utilities

2007 2006 % Change › Latin America Utilities revenue increased by
(Restated)
$228 million to $1.4 billion, primarily due to
favorable foreign currency translation of
Revenues $1,383 $1,155 20%
approximately $211 million
Gross Margin 94 200 (53%)
IBT&MI 3 (29) 110% › Gross margin decreased by $106 million to
$94 million, primarily due to an increase in
fixed costs and higher purchased power costs
Comparison (% Change) Revenue Gross Margin of approximately $107 million at Eletropaulo.
Approximately $84 million of the increase in
Volume/Price/Mix 2% (81%)
fixed costs is associated with an increase in
New Businesses/Projects 0% 0% the labor contingency charge recorded in 2007
versus 2006
Currency (Net) 18% 28%
Total 20% (53%)
› IBT&MI increased by $32 million to $3 million,
primarily due to the Eletropaulo Special
Obligation charges in 2006

AES Corporation 11


North America Generation

2007 2006 % Change › North America Generation revenue increased
(Restated)
by $121 million to $543 million, primarily due to
approximately $57 million in contributions from
Revenues $543 $422 29%
the newly acquired TEG and TEP businesses
in Mexico and approximately $28 million
IBT&MI 94 22 327% attributable to higher prices in New York as
well as higher volumes due to the planned
Somerset outage in 2006.
Comparison (% Change) Revenue Gross Margin
million, primarily due to the higher rates and
New Businesses/Projects(1) 16% 22% volumes as well as lower costs at Eastern
Energy, an impact of approximately $41
million, and contributions from TEG and TEP
Total 29% 64%
of approximately $18 million.

primarily due to the increase in gross margin
coupled with Southland legal reserves in 2006.

AES Corporation 12
(1)Includes TEG and TEP in Mexico.


North America Utilities

2007 2006 % Change › North America Utilities revenue increased by
(Restated)
$4 million to $257 million, due primarily to an
increase in wholesale power sales and
Revenues $257 $253 2%
environmental trackers within IPL’s rates.
IBT&MI 38 32 19% › Gross margin increased by $3 million to $68
million. Lower SO2 allowance purchase costs
of approximately $13 million arising from the
Comparison (% Change) Revenue Gross Margin installation of clean coal technology at the
Harding Street plant contributed to the
increase, offset in part by higher fixed
New Businesses/Projects 0% 0% maintenance costs of approximately $12
million.
Total 2% 5%
› Consistent with the improvement in gross
margin, IBT&MI showed an increase of $6
million to $38 million.

AES Corporation 13


Europe & Africa Generation(1)

2007 2006 % Change › Europe & Africa Generation revenue increased
(Restated)
favorable foreign currency translation of
Revenues $292 $262 11%
approximately $23 million. Increased prices
and volumes of approximately $15 million in
IBT&MI 88 51 73% Kazakhstan and $13 million in Kilroot
contributed as well, more than offsetting the
decrease in volume at Hungary of
Comparison (% Change) Revenue Gross Margin approximately $19 million.
New Businesses/Projects 0% 0% million, primarily due to higher capacity pricing
at Kilroot and increased prices and volume in
Kazakhstan.
Total 11% 42%
primarily due to increased gross margin
contribution from Kilroot and Kazakhstan.

AES Corporation 14
(1)Includes CIS countries.


Europe & Africa Utilities(1)

2007 2006 % Change › Europe & Africa Utilities revenue increased by
(Restated)
$30 million to $182 million, primarily due to
increased rates of approximately $18 million in
Revenues $182 $152 20%
Ukraine and approximately $9 million in
Gross Margin (1) 12 (108%)
favorable foreign currency translation.
IBT&MI (6) 3 (300%)
› Gross margin decreased by $13 million,
primarily due to an increase in fixed
Comparison (% Change) Revenue Gross Margin maintenance costs of approximately $18
million at Sonel in Cameroon.
New Businesses/Projects 0% 0% › Consistent with gross margin, IBT&MI
decreased by $9 million, primarily due to
higher fixed costs at Sonel.
Total 20% (108%)

AES Corporation 15


Asia Generation(1)

2007 2006 % Change › Asia Generation revenue increased by $29
(Restated)
million to $203 million, primarily due to higher
volume in Sri Lanka and higher dispatch in
Revenues $203 $174 17%
Pakistan.
IBT&MI 16 14 14% › Gross margin decreased by $4 million to $39
million, primarily due to higher fuel costs at
Ras Laffan in Oman and higher coal costs in
Comparison (% Change) Revenue Gross Margin China. Increased revenue in Sri Lanka and
Pakistan had only a modest impact on gross
margin due to related increases in fuel costs.
New Businesses/Projects 0% 0%
› IBT&MI increased by $2 million to $16 million
primarily due to asset impairments at Chigen in
Total 17% (9%)
2006.

AES Corporation 16
(1)Includes the Middle East.


» 2008 Guidance Update
Contains Forward Looking Statements

2008 Guidance Element 2008 Full Year Guidance
Gross Margin $3.6 to 3.7 billion
Income Before Tax & Minority Interest(1) $3.0 to 3.1 billion
Diluted Earnings Per Share from Continuing Operations(1) $2.43
Adjusted Earnings Per Share Factors(1)(2) ($1.29)
Adjusted Earnings Per Share(2) $1.14
Net Cash from Operating Activities $2.3 to 2.4 billion
Maintenance Capital Expenditures $0.8 to 0.9 billion
Free Cash Flow(2) $1.4 to 1.6 billion
Growth Capital Expenditures $2.3 to 2.4 billion
Subsidiary Distributions(2) $1.0 to 1.1 billion

(1)Includes net gain of approximately $900 million or $1.29 per share primarily from sale of two indirectly owned subsidiaries in Kazakhstan, which have not yet closed.

AES Corporation 17


» Base Case Growth Assumptions(1)

Prior Guidance Revised Guidance Guidance by 2012
by 2011(2) by 2011
Core Power
Incremental Capacity Online 4,000 MW 3,000 MW 4,100 MW
Incremental Capacity Under 2,500 MW 2,650 MW 2,400 MW
Construction

Alternative Energy
Incremental Wind Generation 2,100 MW 2,100 MW 2,600 MW
Capacity on-line(3)

Greenhouse Gas Offsets 26 Million tonnes/yr 24 Million tonnes/yr 34 Million tonnes/yr

(1)Base case puts AES in the middle of its $1.95-2.25 EPS Guidance range for 2012.
(2)Per AES’s guidance given during Q4 2006 Earnings Call.
(3)Includes 600 MW of projects already announced, including Buffalo Gap 2 (233 MW), Buffalo Gap 3 (170 MW) and GE Mid-West acquisition (186 MW).

AES Corporation 18


» Adjusted EPS(1) Guidance for the Next Five Years
$2.50
$1.75-$2.15
$2.25
$1.55-$1.85
$2.00

$1.75 $1.95-2.25
$1.25-$1.45

$1.50 $1.70-$1.95
$1.12-$1.20
$1.25 $1.45-$1.65

$1.14 $1.20-$1.25
$1.00 Previous Guidance(2)
$1.02
Overlap
$0.75
› Base Case EPS in 2011 is $1.83, as compared to our previous guidance of
Updated Guidance
$1.95. Our updated guidance includes ($0.05) charges primarily due to:
$0.50
1) RGGI compliance related costs and 2) non-cash impact of a contract
2007 Actual
amendment at our Pakistan business, which triggered lease accounting. These
costs were previously not included in our prior guidance.
$0.25

$0.00
2007 2008 2009 2010 2011 2012
(3) (3) (3) (3)
(1)A non-GAAP measure. See Appendix
(2)Per AES’s guidance given during Q4 2006 earnings call. AES Corporation 19
(3)For 2009-2012, Diluted EPS from Continuing Operations and Adjusted EPS for the purposes of this slide are assumed to be the same.


» Adjusted EPS(1) Growth Driven by Four Factors

2.5
$2.25

$1.95 Core Power
2
$ Per Share

Alternative
Energy
1.5
Construction
$1.14 Organic Growth
$1.02
1

0.5

0
2007 2008 2012 Low 2012 High
(2) (2)

(2)For
2012, Diluted EPS from Continuing Operations and Adjusted EPS for the purposes of this slide are assumed to be the same. AES Corporation 20


» Forecast Shows Strong Cash Flow Growth
4.5
$3.3-4.1
4
$2.9-3.6
2.5-3.3
3.5

$2.3-2.9
3 2.1-2.8
1.8-2.6
$2.2-2.5
$ Billions

$2.4 $2.3-2.4
2.5
1.6-2.2
1.4-2.0
2
1.4-1.7 1.2-1.7
1.4-1.6
1.5
1.5 1.1-1.3
1.1 1.0-1.1
1

0.5

0
2007 2008 2009 2010 2011 2012

Free Cash Flow(1)
Net Cash from Subsidiary Distributions
Operating Activities

(1)A non-GAAP financial measure. See Appendix. AES Corporation 21


» Appendix

AES Corporation 22


» Full Year 2007 Segment Highlights
Latin America Generation

Full Year Segment Highlights
2007 2006 % Change › Latin America Generation revenue increased
(Restated)
by $895 million to $3.5 billion, primarily due to
higher contract and spot prices at Gener and
Revenues $3,510 $2,615 34%
Alicura of approximately $443 million and $95
Gross Margin 955 1,052 (9%)
million, respectively. Increased volume and
IBT&MI 667 800 (17%) intercompany sales at Tiete contributed
approximately $130 million as well.

Comparison (% Change) Revenue Gross Margin › Gross margin decreased by $97 million to
$955 million, primarily due to an increase in
costs of approximately $173 million as a result
New Businesses/Projects 3% 1% of gas supply curtailments, drier than normal
hydrology and higher spot prices for purchased
electricity in the Company’s businesses
Total 34% (9%)
located in the Southern Cone region.

million, primarily due to the Uruguaiana
impairment offset by the Gener share sale.

AES Corporation 23


Latin America Utilities

2007 2006 % Change › Latin America Utilities revenue increased by
(Restated)
approximately $493 million in favorable foreign
Revenues $5,172 $4,552 14%
currency translation, as well as increased rates
and volume at our Sul and El Salvador
IBT&MI 612 (163) 475% businesses of approximately $99 million.

› Gross margin decreased by $23 million to
Comparison (% Change) Revenue Gross Margin $865 million, primarily due to reduced tariff
rates at Eletropaulo of $355 million offset by
lower costs, favorable foreign currency
New Businesses/Projects 0% 0% translation of approximately $148 million and
higher volume of $74 million.
Total 14% (3%)
› IBT&MI increased by $775 million to $612
million, primarily due to Brasiliana restructuring
in 2006.

AES Corporation 24


North America Generation

2007 2006 % Change › North America Generation revenue increased
(Restated)
by $240 million to $2.2 billion, primarily due to
the approximately $200 million contributed by
Revenues $2,168 $1,928 12%
the acquisition of the TEG and TEP facilities
and $96 million in higher rate and volume
IBT&MI 536 420 28% sales at Eastern Energy; offset in part by $51
million of marked to market adjustments in
2006 for embedded derivatives at Deepwater
Comparison (% Change) Revenue Gross Margin and lower emission sales of $39 million.
New Businesses/Projects 11% 11% million, primarily due to the acquisition of TEG
and TEP in Mexico, combined with higher
rates and volumes and lower cost at Eastern
Total 12% 15%
Energy; offset by lower emission sales of $39
million.

million, primarily due to the NY Lease
purchase.
AES Corporation 25


North America Utilities

2007 2006 % Change › North America Utilities revenue increased by
(Restated)
increased volume from favorable weather,
Revenues $1,052 $1,032 2%
offset by a slight decrease in tariff rates at IPL.
IBT&MI 196 153 28% › Gross margin increased by $36 million to $313
million, primarily due to increased sales
volume and deferred fuel cost recovery at IPL.
› Consistent with gross margin, IBT&MI
increased by $43 million to $196 million.
Total 2% 13%

AES Corporation 26


Europe & Africa Generation(1)

2007 2006 % Change › Europe & Africa Generation revenue increased
(Restated)
favorable currency translation of approximately
Revenues $975 $852 14%
$77 million and increased rate and volume
sales of approximately $60 million at our
IBT&MI 225 203 11% Kazahstan businesses; offset in part by lower
emission sales in Hungary and at Bohemia of
approximately $28 million.
› Gross margin increased by $28 million,
primarily due to rate and volume increases at
New Businesses/Projects 0% 0% our businesses in Kazakhstan and Kilroot of
$44 million and $13 million, respectively; offset
in part by lower emission sales in Hungary and
Total 14% 11%
at Bohemia.

million, primarily due to the increase in gross
margin.

AES Corporation 27


Europe & Africa Utilities(1)

2007 2006 % Change › Europe & Africa Utilities revenue increased by
(Restated)
$90 million to $660 million, primarily due to
increased tariff rates and volume of
Revenues $660 $570 16%
approximately $57 million in the Ukraine and
approximately $28 million in favorable foreign
IBT&MI 50 85 (41%) currency translation.

› Gross margin decreased by $40 million to $63
Comparison (% Change) Revenue Gross Margin million, primarily due to higher fuel usage and
certain non-fuel operating and maintenance
costs at Sonel.
million, primarily due to the decrease in gross
Total 16% (39%)
margin.

AES Corporation 28


Asia Generation(1)

2007 2006 % Change › Asia Generation Revenue increased by $104
(Restated)
million to $889 million, primarily due to
increased dispatch of approximately $83
Revenues $889 $785 13%
million at Lal Pir and Pak Gen, as well as $30
million of improvement at Kelanitissa due to
IBT&MI 129 127 2% favorable dispatch.

› Gross margin decreased by $8 million to $193
Comparison (% Change) Revenue Gross Margin million, primarily due to decreased volume at
Chigen and higher coal prices in China. Much
of the increase in revenue for Pakistan and
New Businesses/Projects 0% 0% Kelanitissa is offset by higher fuel prices.
Total 13% (4%)
primarily due to asset impairments at Chigen in
2006.

AES Corporation 29
(1)Includes the Middle East.


» Parent Sources and Uses of Cash
Fourth Quarter Full Year Ended
($ Millions)
2007 December 31, 2007
Sources
Total Subsidiary Distributions(1) $343 $1,099
Proceeds from Asset Sales, Net 214 1,003
Refinancing Proceeds, Net 1,974 1,974
Increased Credit Facility Commitments - -
Issuance of Common Stock, Net 21 51
Total Returns of Capital Distributions and Project Financing Proceeds 21 106
Beginning Liquidity(1) 1,515 1,146
Total Sources $4,088 $5,379
Uses
Repayments of Debt ($1,314) ($1,314)
Investments in Subsidiaries, Net (268) (1,120)
Cash for Development, Selling, General and Administrative and Taxes (68) (323)
Cash Payments for Interest (128) (425)
Changes in Letters of Credit and Other, Net (157) (44)
Ending Liquidity(1) (2,153) (2,153)
Total Uses ($4,088) ($5,379)

(1)A non-GAAP financial measure. AES Corporation 30


» Fourth Quarter 2007 & Full Year 2007 Consolidated
Cash Flow
($ Millions)
Fourth Quarter Full Year Ended December 31,
2007 2006 2007 2006
Net Cash Provided by Operating Activities(1)(2) $488 $476 $2,357 $2,351

Capital Expenditures (697) (463) (2,425) (1,460)
Acquisitions - Net of Cash Acquired 1 (6) (315) (19)
Proceeds from the Sales of a Business 301 81 1.136 898
Proceeds from the Sale of Assets 6 14 16 24
Sale/(Purchase) of Short-Term Investments, Net (342) (46) (490) (348)
Decrease (Increase) in Restricted Cash 72 49 (28) (8)
Proceeds from the Sales of Emission Allowances 7 7 17 82
Purchase of Emission Allowances (10) (24) (13) (77)
Decrease in Debt Service Reserves and Other Assets 66 58 122 39
Purchase of Long Term Available for Sale Securities (26) - (49) (52)
Repayment of Affiliate Loan - - 55 -
Other Investing (13) 1 4 14
($635) ($329) ($1,970) ($907)
Net Cash Used in Investing Activities

Repayments/(Borrowings) under the Revolving Credit Facilities, Net ($3) ($32) ($85) $72
Issuance of Recourse Debt 2,000 - 2,000 -
Issuance of Non-Recourse Debt 1,128 1,660 2,297 3,097
Repayments of Recourse Debt (1,315) - (1,315) (150)
Repayments of Non-Recourse Debt (1,116) (2,125) (2,251) (4,059)
Payments of Deferred Financing Costs (61) (22) (97) (86)
Distributions to Minority Interests (128) (125) (699) (335)
Contributions from Minority Interests 4 8 374 125
Issuance of Common Stock 22 19 58 78
Financed Capital Expenditures (8) (5) (35) (52)
Other Financing (5) - (3) (7)
Net Cash Provided by (Used in) Financing Activities $518 ($622) $244 ($1,317)

Total Increase (Decrease) in Cash & Cash Equivalents $371 ($475) $631 $127
Effect of Exchange Rate Changes on Cash 23 49 69 62
Cash & Cash Equivalents, Beginning 1,270 1,784 1,358 1,169

Cash & Cash Equivalents, Ending $1,664 $1,358 $2,058 $1,358

(1)Depreciationand amortization from continuing operations was $249 million for 4Q07 and $217 million for 4Q06. Changes in net working capital were (42) for 4Q07 and 103 for 4Q06.
(2)Depreciationand amortization from continuing operations was $932 million for 2007 and $840 million for 2006. Changes in net working capital were (234) for 2007 and (74) for 2006.
Note: Certain amounts have been netted, condensed and rounded for presentation purposes.
AES Corporation 31


» Reconciliation of Subsidiary Distributions and Parent
Liquidity
($ Millions)

Quarter Ended
Dec. 31, Sept. 30, Jun. 30, Mar. 31,
2007 2007 2007 2007
Total subsidiary distributions $343 $361 $259 $137
Total returns of capital distributions 21 35 34 15
Total subsidiary distributions & returns of $364 $396 $293 $152
capital to Parent

Balance as of
Parent Company Liquidity(1) Dec. 31, Sept. 30, Jun. 30, Mar. 31,
2007 2007 2007 2007
Cash at Parent & QHCs(1)(2) $1,315 $619 $405 $74
Availability under revolver 838 896 973 804
Ending liquidity $2,153 $1,515 $1,378 $878

(1)A non-GAAP financial measure
(2)Qualified Holding Company. See “Assumptions.” AES Corporation 32


» 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 with or better than prior
operating performance, including achievement of planned productivity improvements including benefits of
global sourcing, and in accordance with the provisions of their relevant contracts or concessions; (c) new
business opportunities are available to AES in sufficient quantity to achieve its growth objectives; (d) no
material disruptions or discontinuities occur in GDP, foreign exchange rates, inflation or interest rates during
the forecast period; and (e) material business-specific risks as described in the Company’s SEC filings do not
occur individually or cumulatively. In addition, benefits from global sourcing include avoided costs, reduction
in capital project costs versus budgetary estimates, and projected savings based on assumed spend volume
which may or may not actually be achieved. Also, improvement in certain KPIs such as equivalent forced
outage rate and commercial availability may not improve financial performance at all facilities based on
commercial terms and conditions. These benefits will not be fully reflected in the Company’s consolidated
financial results.

The cash held at qualifying holding companies (QHCs) represents cash sent to subsidiaries of the Company
domiciled outside of the U.S. Such subsidiaries had no contractual restrictions on their ability to send cash to
AES, the Parent Company. Cash at those subsidiaries was used for investment and related activities outside
of the U.S. These investments included equity investments and loans to other foreign subsidiaries as well as
development and general costs and expenses incurred outside the U.S. Since the cash held by these QHCs
is available to the Parent, AES uses the combined measure of subsidiary distributions to Parent and QHCs as
a useful measure of cash available to the Parent to meet its international liquidity needs. AES believes that
unconsolidated parent company liquidity is important to the liquidity position of AES as a parent company
because of the non-recourse nature of most of AES’s indebtedness.

AES Corporation 33


» 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 transactions, (b) foreign currency transaction impacts on the net monetary position related to Brazil and
Argentina, (c) significant asset gains or losses due to disposition transactions and impairments, and (d) costs related to early
retirement of recourse debt. Effective January 1, 2008, the Company has decided to include costs associated with early
retirement of non-recourse debt, in addition to recourse debt. This modification will apply prospectively and is not reflected in
the 2007 results presented in this Form 8-K. AES believes that adjusted earnings per share better reflects the underlying
business performance of the Company, and is considered in the Company’s internal evaluation of financial performance.
Factors in this determination include the variability associated with mark-to-market gains or losses related to certain
derivative transactions, currency gains and losses, periodic strategic decisions to dispose of certain assets which may
influence results in a given period, and the early retirement of corporate debt.
› Free cash flow – Free cash flow (a non-GAAP financial measure) is defined as net cash from operating activities less
maintenance capital expenditures (including environmental capital expenditures). AES believes that free cash flow is a
useful measure for evaluating our financial condition because it represents the amount of cash provided by operations less
maintenance capital expenditures as defined by our businesses, that may be available for investing or for repaying debt.
› Liquidity – Defined as cash at the Parent Company plus availability under corporate revolver plus cash at qualifying holding
companies (QHCs). AES believes that unconsolidated Parent Company liquidity is important to the liquidity position of AES
as a Parent Company because of the non-recourse nature of most of AES’s indebtedness.
› Subsidiary distributions – Subsidiary Distributions should not be construed as an alternative to Net Cash Provided by
Operating Activities which are determined in accordance with GAAP. Subsidiary Distributions are important to the Parent
Company because the Parent Company is a holding company that does not derive any significant direct revenues from its
own activities but instead relies on its subsidiaries’ business activities and the resultant distributions to fund the debt service,
investment and other cash needs of the holding company. The reconciliation of difference between the Subsidiary
Distributions and Net Cash Provided by Operating Activities consists of cash generated from operating activities that is
retained at the subsidiaries for a variety of reasons which are both discretionary and non-discretionary in nature. These
factors include, but are not limited to, retention of cash to fund capital expenditures at the subsidiary, cash retention
associated with non-recourse debt covenant restrictions and related debt service requirements at the subsidiaries, retention
of cash related to sufficiency of local GAAP statutory retained earnings at the subsidiaries, retention of cash for working
capital needs at the subsidiaries, and other similar timing differences between when the cash is generated at the
subsidiaries and when it reaches the Parent Company and related holding companies. AES Corporation 34


» Reconciliation of Cash Flow Items(1)
($ Millions)

Full Year Ended
2007 2006 2007 2006
Capital Expenditures

Maintenance Capital Expenditures $199 $292 $878 $867
Growth Capital Expenditures 506 176 1,582 645
Capital Expenditures $705 $468 $2,460 $1,512

Full Year Ended
2007 2006 2007 2006
Reconciliation of Free Cash Flow

Net Cash from Operating Activities $488 $476 $2,357 $2,351
Less: Maintenance Capital Expenditures 199 292 878 867
Free Cash Flow(2) $289 $184 $1,479 $1,484

(1)Includes EDC, a business AES sold in Q2 2007.
AES Corporation 35
(2)A non-GAAP financial measure.


» Reconciliation of 2006 Adjusted Earnings per Share(1)

1Q06 2Q06 3Q06 4Q06 FY2006
(Restated) (Restated) (Restated) (Restated) (Restated)

Diluted Earnings (Loss) Per Share
$0.51 $0.30 ($0.53) ($0.02) $0.27
from Continuing Operations

FAS 133 Mark to Market
(0.04) (0.02) - - (0.06)
(Gains)/Losses

Currency Transaction
- - 0.01 - 0.01
(Gains)/Losses

Net Asset (Gains)/Losses and
(0.13) - 0.83 - 0.68
Impairments

Debt Retirement (Gains)/Losses 0.04 - - - 0.03

Adjusted Earnings (Loss) Per $0.38 $0.28 $0.31 ($0.02) $0.93
Share(1)

AES Corporation 36


» Reconciliation of 2007 Adjusted Earnings per Share(1)

1Q07 2Q07 3Q07 4Q07 FY2007
(Restated) (Restated) (Restated)

Diluted Earnings Per Share from
$0.17 $0.42 $0.14 - $0.73

FAS 133 Mark to Market
0.02 (0.01) - 0.02 0.03
(Gains)/Losses

Currency Transaction
- (0.01) - - -
(Gains)/Losses

Net Asset (Gains)/Losses and
0.05 0.01 0.03 0.09 0.18
Impairments

Debt Retirement (Gains)/Losses - - - 0.08 0.08

Adjusted Earnings Per Share(1) $0.24 $0.41 $0.17 $0.19 $1.02

AES Corporation 37


» Reconciliation of 2009-2012 Free Cash Flow

Reconciliation of Free Cash Flow 2009 2010 2011 2012
Net Cash from Operating Activities $2.2 to 2.5 $2.3 to 2.9 $2.9 to 3.6 $3.3 to 4.1
Less: Maintenance Capital Expenditures 0.8 0.7 0.8 0.8
Free Cash Flow $1.4 to 1.7 $1.6 to 2.2 $2.1 to 2.8 $2.5 to 3.3

AES Corporation 38


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