The AES Annual Report 2008

FY2008 Annual Report · The AES

Loading PDF…

If Spine
needs to be
larger than
3/8 inch,
please adjust
file so that all
margins are
maintained;
simply move
indicated
image/text
boxes to left
as needed.
Make sure
that a .375
inch white
border re-
mains at top
and left side
of image.
Thank you!

AES_08ar_CVR_FNLtoPrint.qxp:Layout 1 3/11/09 10:31 AM Page 1

spine

Corporate Ofﬁce
Corporate Ofﬁce
The AES Corporation
The AES Corporation
4300 Wilson Boulevard
4300 Wilson Boulevard
Arlington, VA 22203
Arlington, VA 22203
USA
USA
703-522-1315
703-522-1315

Website
Website
www.aes.com
www.aes.com

Stock Information
Stock Information
Common stock of The AES Corporation
Common stock of The AES Corporation
is traded on the New York Stock Exchange
is traded on the New York Stock Exchange
under the symbol AES.
under the symbol AES.

N
O
I
T
A
M
R
O
F
N

Y
N
A
P
M
O
C

Number of Shareholders
Number of Shareholders
As of December 31, 2008 there were
As of December 31, 2008 there were
approximately 6,142 AES shareholders
approximately 6,142 AES shareholders
of record and 662,761,813 shares of AES
of record and 662,761,813 shares of AES
common stock outstanding.
common stock outstanding.

Transfer Agent
Transfer Agent
The AES Corporation has designated Computershare
The AES Corporation has designated Computershare
Investor Services (“Computershare”) to be its transfer
Investor Services (“Computershare”) to be its transfer
agent for AES common stock.
agent for AES common stock.

Please contact Computershare if you need assistance with
Please contact Computershare if you need assistance with
lost or stolen AES stock certificates directly held by you,
lost or stolen AES stock certificates directly held by you,
address changes, name changes and stock transfers.
address changes, name changes and stock transfers.

BY MAIL AND OVERNIGHT DELIVERY:
BY MAIL AND OVERNIGHT DELIVERY:
Computershare Investor Services
Computershare Investor Services
250 Royall Street
250 Royall Street
Canton, MA 02021
Canton, MA 02021
781-575-2879
781-575-2879
www.computershare.com
www.computershare.com

Independent Auditors
Independent Auditors
Ernst & Young LLP
Ernst & Young LLP

Investor Relations Information
Investor Relations Information
Please visit the Investor Relations section of the
Please visit the Investor Relations section of the
AES website at www.aes.com, or you may contact
AES website at www.aes.com, or you may contact
a member of the AES Investor Relations team:
a member of the AES Investor Relations team:

GENERAL: 703-682-6399 or invest@aes.com
GENERAL: 703-682-6399 or invest@aes.com

Ahmed Pasha, Vice President, Investor Relations: 703-682-6451
Ahmed Pasha, Vice President, Investor Relations: 703-682-6451

Media Inquiries
Media Inquiries
Meghan Dotter, Director, External Communications:
Meghan Dotter, Director, External Communications:
703-682-6670 or media@aes.com
703-682-6670 or media@aes.com

AES Code of Conduct
AES Code of Conduct
AES is committed to demonstrating the highest standards
AES is committed to demonstrating the highest standards
of business ethics in all that we do. To that end, AES has
of business ethics in all that we do. To that end, AES has
adopted a Code of Conduct, which is available at our website.
adopted a Code of Conduct, which is available at our website.

design by Phoenix Creative Group, www.phoenixcreativegroup.com

left: wind
turbines at
AES buffalo
gap (US)

E Printed on 10% post-consumer ﬁber.

T
R
O
P
E
R

L
A
U
N
N
A

2008

If Spine
needs to be
larger than
3/8 inch,
please ad-
just file so
that image
remains .375
inch from
left side of
page. Make
sure to also
adjust page
1 of AR ac-
cordingly so
image ap-
pears to be
seamless.
Thank you!

AES_08ar_CVR_FNLtoPrint.qxp:Layout 1 3/11/09 10:31 AM Page 2

spine

every day, AES
people are guided
by our company’s
core values. each
and every one
of us commits to:

PUT SAFETY FIRST. We will always put safety first—for our people, contractors
and communities.

ACT WITH INTEGRITY. We are honest, trustworthy and dependable. Integrity
is at the core of all we do—how we conduct ourselves and how we interact with
one another and all of our stakeholders.

HONOR COMMITMENTS. We honor our commitments to our customers,
teammates, communities, owners, suppliers and partners, and we want our
businesses, on the whole, to make a positive contribution to society.

STRIVE FOR EXCELLENCE. We strive to be the best in all that we do and to perform
at world-class levels.

HAVE FUN THROUGH WORK. We work because work can be fun, fulﬁlling and exciting.
We enjoy our work and appreciate the fun of being part of a team that is making a
difference. And when it stops being that way, we will change what or how we do things.

S
E
U
L
A
V

AES Executive Officers
Paul Hanrahan—President and CEO

Andrés Gluski—Executive Vice President and COO

Victoria Harker—Executive Vice President and CFO

Ned Hall—Executive Vice President, Regional President for North America
and Chairman, Global Wind Generation and Energy Storage

John McLaren—Executive Vice President and Regional President of Europe, Asia,
Middle East and Africa

Brian Miller—Executive Vice President, General Counsel, Corporate Secretary
and Acting Chief Compliance Officer

Richard Santoroski—Vice President, Global Risk & Commodity Organization

Andrew Vesey—Executive Vice President and Regional President of Latin America

Mark Woodruff—Executive Vice President

AES Board of Directors
Philip A. Odeen (Chairman)
Non-executive Chairman, Convergys Corporation; former Chairman, Avaya Inc,
Reynolds and Reynolds Company, and TRW Inc.; former President and CEO, BDM

Paul Hanrahan
President and CEO, The AES Corporation

Kristina M. Johnson
Senior Vice President and Provost, Johns Hopkins University

John A. Koskinen
Non-executive Chairman, Freddie Mac; former President, the US Soccer Foundation;
former Deputy Mayor and City Administrator, the District of Columbia; former President
and CEO, The Palmieri Company

Philip Lader
Chairman, WPP Group plc; Senior Advisor, Morgan Stanley; former US Ambassador
to the Court of St. James’s

Sandra O. Moose
President, Strategic Advisory Services LLC; Chairperson of the Board of Trustees,
Natixis and Loomis Sayles Funds; former Senior Vice President and Director,
The Boston Consulting Group

John B. Morse
Retired Senior Vice President Finance and CFO Washington Post Company;
former Partner Price Waterhouse (now PricewaterhouseCoopers); and President
of the College Foundation of The University of Virginia.

Charles O. Rossotti
Senior Advisor, The Carlyle Group; former Commissioner, the IRS; former Founder
and Chairman, American Management Systems, Inc.

Sven Sandstrom
Director and Treasurer, the International Union for the Conservation of Nature;
Advisor, African Development Bank and the Global Fund to Fight AIDS, TB and Malaria;
former Managing Director, The World Bank

The AES Corporation is a global

power company with generation and

distribution companies. Through

our portfolio of thermal and renewable

fuel sources—biomass, coal, diesel,

gas, hydropower, solar, wind—
we safely provide affordable
and sustainable energy in

29 countries. We are committed to

operational excellence and to meeting

the world’s changing energy needs.

[1]

left: nightscape
of AES barka (oman)

front cover, left:
turbine rebuild
team members,
AES gener’s
las ventanas power
plant (chile)

front cover, right:
harbor near AES
cartagena (spain)

[2]

Chairman and CEO Letter

to AES Shareholders

As 2008 began, we embarked on our plans to grow in the areas of strategic focus for AES: our core
power, renewable energy and carbon offset businesses. We also wanted to improve the operations
of our existing businesses and manage our portfolio to maximize the long-term value of the company.

As the year progressed, however, the global credit markets deteriorated and the rate of growth in
demand for power slowed. While nobody could have predicted the severity of the crisis, the actions
we took prior to the credit crunch—paying down corporate debt and renegotiating the terms of
remaining bonds to improve cash returns for our investors — strengthened our financial position
before the markets weakened.

We also took early steps to protect liquidity. We reduced our exposure to currency and interest rate
risks, aggressively pursued cost reductions, and most importantly, continued to improve the operations
of our generation and distribution businesses. As a result, we emerged from 2008 in a solid position.

2008 Financial Performance
We achieved our most important financial goals for 2008, despite the difficult environment. Once
again in 2008, our diversified global portfolio helped us achieve our objectives; strong performance
in our Latin American and European generation businesses helped offset relatively weaker results
in Asia. We met our commitments for consolidated operating cash flow of $2.2 billion and consoli-
dated free cash flow1 of $1.4 billion, which were slightly lower than in 2007, at $2.4 billion and
$1.5 billion, respectively. This primarily reflected the sale of Electricidad de Caracas (EDC) in
May 2007 and the re-deployment of sale proceeds and other cash flows into our construction pro-
gram, the driver of our future growth. Our subsidiary distributions2 to AES also met our 2008 cash
flow commitments at $1.1 billion, and were equal to our 2007 distributions.

Our Earnings Per Share (EPS) increased by 150 percent to $1.80 as a result of strong operations and
gains on portfolio management activities. As a reflection of increased market currency turbulence,
however, our Adjusted EPS1 at $0.99, was slightly lower than what we earned in 2007, at $1.01. This
was primarily due to the impacts of non-cash foreign currency transaction losses as worldwide cur-
rency rates experienced tremendous volatility during 2008.

The biggest disappointment last year was our stock price, which declined by approximately 60 per-
cent despite strong operational and financial performance. Although our share price declined in line
with the sector, we have every reason to be optimistic as we look ahead. Our debt maturities are
manageable, our liquidity remains strong, and both our generation and distribution businesses con-
tinue to perform well.

MANAGING OUR PORTFOLIO

1See page 6 for Note 1
2See page 7 for Note 2

Because of the financial and operational strength of our businesses, we were able to sell assets
at beneficial prices throughout the year. For example, in May we sold two of our Kazakhstan

businesses and in November we sold a portion of our stake in one of our Chilean subsidiaries. These
transactions resulted in a net gain of $874 million for the year.

Active portfolio management remains an important part of our business model and the Kazakhstan
sale provides a good example. We identified the opportunity, acquired the asset, improved operations
and then realized the value through its sale.

ADJUSTING OUR GROWTH PLANS

While we believe that well-structured projects will continue to attract financing, during 2008 we rec-
ognized that uncertain economic conditions would likely slow global demand for power for some
period of time. Accordingly, we scaled back on our development plans mid-year in order to preserve
our liquidity. We decided to pursue only a limited number of strategically important development
projects and focus instead on completion of our projects under construction.

We successfully obtained non-recourse financing of approximately $2 billion for six new projects.
More importantly, four of these projects closed in the fourth quarter of 2008—well into the financial
crisis—including a $1 billion financing for a coal-fired project in Chile, $300 million for two wind
generation projects in Bulgaria and Scotland, and $90 million for solar energy projects in Spain.
These projects will increase our thermal and renewable generation portfolio by a total of 1,300 mw.

PRESERVING LIQUIDITY AND REDUCING RISK

In early 2008, we took significant steps to make our debt profile more manageable. We raised $625 million
of unsecured notes and paid down $985 million of corporate debt, which reduced our total recourse debt
by a net $360 million. As a result, we substantially reduced our near-term obligations and extended our
average maturity by more than a year. We also amended existing debt covenants to provide greater finan-
cial flexibility in our use of parent company liquidity3 to repurchase shares.

As the global economic crisis unfolded, we told our investors that we would take steps to preserve our
liquidity, and we did. In the fourth quarter, our parent company liquidity3 grew by $245 million to $1.4 bil-
lion, an increase of 21 percent. By the end of 2008, our parent company liquidity3 was nine times that of
our 2009 parent debt maturities of $154 million.

In addition, the measures we took in recent years to reduce our exposure to currency and interest
rate risks proved to be important in a year of unprecedented volatility. For example, in 2008,
94 percent of our debt was matched to the functional currency of the local business, which was
crucial given the substantial currency devaluations in 2008. In addition, as of year end, 81 percent
of our consolidated debt effectively had fixed interest rates that were hedged against short-term
interest rate movements.

Improving Operations
During the year, we continued to improve the overall operational performance of our generation
and distribution businesses through global sourcing and continuous improvement. We made progress
on our safety record, brought new wind and solar projects online and met an interim development

3See page 7 for Note 3

Revenues

2008

2007

2006

Dollars in Millions

$16,070

$13,516

$11,509

[3]

milestone by achieving simple-cycle operation for our 380 mw gas-fired plant in Jordan. In addition,
our finance team completed the remediation of our final two material weaknesses, making us
Sarbanes-Oxley compliant for the first time in our history.

SAFETY FIRST

There is nothing more important for us at AES than safety. In 2008 we made impressive progress
in our safety record, effectively cutting our accident rate in half. We have now reached Lost Time
Incident levels that are consistent with top quartile performers in the energy sector. We have the
right equipment, systems and procedures in place to continue to improve our safety record.

IMPROVING CUSTOMER SATISFACTION THROUGH OUR DISTRIBUTION BUSINESSES

Customer satisfaction, as measured by independent third parties, improved significantly at our US
utility, Indianapolis Power and Light, in the Ukraine, and in all but one of our nine Latin American
distribution companies.

INCREASING THE CONTRIBUTION FROM OUR GENERATION BUSINESSES

In 2008, we increased the energy generated at our plants while maintaining our availability and
forced outage rates across the company. There was significant improvement in same fleet forced
outages in Latin America, Asia and the Middle East. As a result of continuous improvements
to the two power plants in Mexico that we acquired in 2007, we improved capacity from 230 mw
to 242 mw at each facility.

Expanding Our Renewables Business
As many countries sought greater use of renewable sources of energy in 2008, we were well positioned
to continue to help meet this demand through our growing global platform in wind, solar and
hydropower. We expanded our wind and solar portfolio by 332 mw in 2008, and ended the year with
renewables accounting for 21 percent of our total operating fuel portfolio, at 8,700 mw.

We increased our global wind generation operating capacity to more than 1,200 mw, and had 410 mw
under construction at the end of the year. In the US, we brought 170 mw of wind capacity online.
Globally, we continued to expand in China with a strong local partner and also entered new markets
for our wind business in Bulgaria, France and Scotland.

Additionally, we developed utility-scale solar photovoltaic projects through a joint venture with
Riverstone Holdings LLC. By year end, the joint venture was operating 24 mw of projects through-
out Spain with more than 200 mw of advanced development activities throughout France, Greece,
Italy and Spain. We also continued construction of a 223 mw hydropower facility in Panama and
62 mw of small hydropower facilities in Turkey, all of which will begin operating in 2010.

OFFSETTING GREENHOUSE GAS EMISSIONS

As a further indication of AES’s commitment to renewable power, we acquired a landfill gas project
in El Salvador, which was being modified to convert methane emissions to electricity, dramatically
offsetting the release of greenhouse gas into the atmosphere. Like many companies, our overall

[4]

Gross Margin

2008

2007

2006

Dollars in Millions

$3,707

$3,392

$3,419

success in creating carbon offsets for the Kyoto-regulated markets was somewhat tempered by
procedural delays in getting projects approved and registered, depressed carbon pricing and lack
of certainty surrounding global regulatory regimes.

In the voluntary US market, Greenhouse Gas Services, LLC, our venture with GE Energy Financial
Services, continued to develop high quality, third party verifiable carbon offsets. One of the major
milestones in 2008 was putting a landfill gas project in construction. This project was initiated under
the terms of our agreement with Google to help manage its carbon footprint.

Looking Forward to 2009 and Beyond
Given how well our strong portfolio of businesses performed in a historically difficult year, we are
confident about our prospects for the future. Our goals for 2009 therefore are very straightforward:
to continue the strong performance of our operating businesses and to keep our projects in con-
struction, which will drive future growth, on budget and on schedule.

First, we will continue to improve the performance of our operating businesses. This will not only
increase the value of our portfolio of businesses, but will also increase our internally generated cash
flow, giving us additional financial flexibility.

Second, the projects currently funded and in construction will begin to contribute to the growth in our
cash flow over the next three years. These 25 construction projects will start to come online in 2009
through 2011 and will increase our generating capacity by eight percent, adding 3,400mw. Since more
than 90 percent of these projects are secured by long-term power supply contracts, they will enhance the
overall stability of our cash flows.

Finally, the market continues to offer a wide range of attractive investment options. For us, this
means that the additional cash flows that will result from improved operations, new projects coming
online and portfolio management activities can potentially be applied to superior investment oppor-
tunities. These may include paying down debt, buying AES shares at depressed prices, or investing in

new acquisitions or greenfield businesses.(cid:1)Even in an uncertain environment, we performed well in 2008. We have a global portfolio of healthy

businesses that provide stable sources of cash flow. The steps we have taken to enhance our liquid-
ity, streamline operations and reduce costs have enabled us to maintain a sound financial position in
these turbulent times.

Our ability to meet our financial goals, sell and acquire assets, execute financings, and readily adapt
to changing market dynamics demonstrated the resilience of our business model.

As we look ahead, we believe that our operating businesses, coupled with more than 3,400 mw
of plants in construction and a high quality pipeline of projects in development, will enable us
to continue to help meet the world’s growing demand for sustainable and affordable energy as the
financial markets recover. At AES, that continues to be both our mission and our passion.

Phil Odeen
Chairman of the Board
February 26, 2009

Paul Hanrahan
President and Chief Executive Officer
February 26, 2009

[5][5]

Endnotes

NOTE 1: NON-GAAP FINANCIAL MEASURES RECONCILIATION (UNAUDITED)

Year Ended December 31, 2008

(Dollars in millions, except per share amounts)

Reconciliation of Adjusted Earnings Per Share(1),(2)

Diluted EPS From Continuing Operations

FAS 133 Mark-to-Market (Gains)/Losses

Currency Transaction (Gains)/Losses

Net Asset (Gains)/Losses and Impairments

Debt Retirement (Gains)/Losses

Adjusted Earnings Per Share(1),(2)

Calculation of Maintenance Capital Expenditures for Free Cash Flow(5) Reconciliation Below:

Maintenance Capital Expenditures, excluding environmental

Environmental Capital Expenditures

Growth Capital Expenditures

Total Capital Expenditures

Reconciliation of Free Cash Flow

Net Cash from Operating Activities

Less: Maintenance Capital Expenditures, excluding environmental

Less: Environmental Capital Expenditures

Free Cash Flow(5)

1.80

0.05

0.03

(1.14)(3)

0.25(4)

0.99

673

2,117

$ 2,887

$ 2,165

673

$ 1,395

(1) 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 cur-
rency 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 the early retirement of debt. 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 transaction gains or losses, periodic strategic decisions to dispose

of certain assets which may influence results in a given period, and the early retirement of debt.

(2) Effective January 1, 2008, the Company now includes in its definition of adjusted earnings per share, costs associated with early
retirement of non-recourse debt, in addition to recourse debt. There was no impact to 2007 reported adjusted EPS as a result
of this change.

(3) Amount includes: Net loss on sale of interest in Gener of $31 million or $0.05 in Q4, impairment charges primarily associated
with development projects in North America of $75 million ($33 million net of minority interest and taxes) or $0.05 in Q4 and
an impairment of the Company’s investment in “blue gas” (coal to gas) technology of $10 million or $0.02 in Q4. There is no
tax impact associated with Gener sale. Net gain on Kazakhstan sale of $905 million or $1.31 in Q2, Uruguaiana asset write down
of $36 million ($17 million net of minority interest or $0.02) and South Africa peaker development cost write-off of $31 million
($28 million net of taxes or $0.04) in Q2. There is no tax impact associated with the Kazakhstan sale or Uruguaiana impairment.

(4) Amount includes: $55 million ($34 million net of tax or $0.05) loss on the retirement of Corporate debt, $131 million or $0.19 tax

impact on repatriation of a portion of the Kazakhstan sale proceeds that were used to fund the early retirement of corporate debt,
and $14 million ($9 million net of taxes or $0.01) of debt refinancing at IPALCO in Q2.

(5) 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.

[6]

NOTE 2: SUBSIDIARY DISTRIBUTION DEFINITION

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 sub-

sidiaries’ 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 the 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 discre-

tionary 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.

NOTE 3: PARENT COMPANY LIQUIDITY DEFINITION

Parent Company Liquidity(1)

Cash at Parent & Cash at QHCs(2)

Availability under revolver

Ending liquidity

Balance at Dec. 31, 2008

Balance at Sept. 30, 2008

Actuals (Dollars in millions)

247

1,143

$ 1,390

455

690

$ 1,145

(1) Parent Company Liquidity is defined as cash at the Parent Company plus availability under corporate revolver plus cash at qualify-

ing 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.

(2) The cash held at QHCs represents cash sent to subsidiaries of the company domiciled outside of the US. 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 US. These investments included equity investments and loans to other foreign

[7]

subsidiaries as well as development and general costs and expenses incurred outside the US. 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.

E
C
N
E
L
L
E
C
X
E

above left:
detail of
AES barka (oman)

above right:
team members,
AES-IC içta¸s
(turkey)

At AES, we’re recognized for our
best practices and world class talent.

In 2008, AES earned a number of accolades
from industry peers and the media for

outstanding performance across our
safety and ﬁnancial operations.

2008: an exceptional year

for AES’s finance team

In addition to achieving long-term financing for more than $2 billion for thermal,
wind and solar projects, the finance team began its transition to a regional hubbing
structure, which will improve reporting accuracy while streamlining operations.
Our finance team and CFO, Victoria Harker, were recognized for their work:

(cid:1) Virginia Business magazine’s 2008 CFO of the Year (Public Company) —

Victoria Harker, Executive Vice President and CFO

(cid:1) Project Finance International “Power Deal of the Year” for the Americas,
and Latin Finance “Best Project Finance Deal”—AES Gener, our subsidiary
in Chile, for successfully closing $1 billion in financing during a difficult
credit environment

we put safety first every day and our results
for the year showed it. AES businesses and people around the world were
recognized with important national and industry safety awards.

(cid:1) The Emerald Cross Award from the Colombian Safety Council —

AES Chivor, Colombia

(cid:1) Sri Lanka National Award for Safety—AES Kelanitissa, Sri Lanka

(cid:1) Employer’s Federation of Pakistan “Best Practices in Occupational Safety

and Health Award” —AES Lal Pir, Pakistan

(cid:1) The Royal Society for the Prevention of Accidents Gold Award —

AES Tisza II, Hungary

(cid:1) 2008 Safety Award from local Jintang County government — Chengdu AES

Kaihua Gas Turbine Power, one of the operating plants of AES China

(cid:1) The Chilean Labor Safety Institute (IST) 2008 Best National Safety
Advisors — Safety Deputy Manager, Jose Paredes, of AES Gener, Chile

(cid:1) State of Orissa’s 35th State Safety Award, first prize in the “Lowest

Severity Rate of Accidents” category — Orissa Power Generation Company
(OPGC), India

(cid:1) The 7th Greentech Safety Gold Award from the Greentech Foundation in

New Delhi — OPGC, India

[9]

right: plant
perspective of
AES kilroot (UK)

our Global

Business Portfolio

29 countries/

5 continents: Operations breadth
25,000: Global workforce

132: Number of AES generation facilities
14: Number of AES regulated utilities

amassing annual sales
4,419 MW: Capacity at AES utility businesses
38,381 MW: Capacity at AES generation businesses
76,730 GWh: Electricity sold to AES utility customers

[10]

DIVERSE PORTFOLIO The diversity of our generation portfolio — across fuel source, market, geogra-
phy — helps reduce the risk from changes in commodity prices, weather and regulatory framework.

Megawatts by Fuel Type
21%
Renewables
(hydro, solar,
wind)

33% Gas

41% Coal

2.5% Oil

1.0% Pet Coke

0.5% Biomass

1.0% Diesel

by Region

34%
North
America

26%
Latin
America

27%
Europe, CIS
& Africa

13%
Asia &
Middle
East

CONSTRUCTION PROGRAM Our construction program of more than 3,400 mw will come online
through 2011, and will increase our core power and renewable businesses. More than 90 percent
of the capacity in our construction program is under long-term contracts.

Megawatts Online by Year

by Contract Type

1,253

1,139

1,011

2009

2010

2011

96%
Long-Term

4%
Short-Term

AES_08ar_CVR_FNLtoPrint.qxp:Layout 1 3/11/09 10:31 AM Page 2

spine

every day, AES
people are guided
by our company’s
core values. each
and every one
of us commits to:

PUT SAFETY FIRST. We will always put safety first—for our people, contractors
and communities.

ACT WITH INTEGRITY. We are honest, trustworthy and dependable. Integrity
is at the core of all we do—how we conduct ourselves and how we interact with
one another and all of our stakeholders.

STRIVE FOR EXCELLENCE. We strive to be the best in all that we do and to perform
at world-class levels.

S
E
U
L
A
V

AES Executive Officers
Paul Hanrahan—President and CEO

Andrés Gluski—Executive Vice President and COO

Victoria Harker—Executive Vice President and CFO

Ned Hall—Executive Vice President, Regional President for North America
and Chairman, Global Wind Generation and Energy Storage

John McLaren—Executive Vice President and Regional President of Europe, Asia,
Middle East and Africa

Brian Miller—Executive Vice President, General Counsel, Corporate Secretary
and Acting Chief Compliance Officer

Richard Santoroski—Vice President, Global Risk & Commodity Organization

Andrew Vesey—Executive Vice President and Regional President of Latin America

Mark Woodruff—Executive Vice President

AES Board of Directors
Philip A. Odeen (Chairman)
Non-executive Chairman, Convergys Corporation; former Chairman, Avaya Inc,
Reynolds and Reynolds Company, and TRW Inc.; former President and CEO, BDM

Paul Hanrahan
President and CEO, The AES Corporation

Kristina M. Johnson
Senior Vice President and Provost, Johns Hopkins University

Philip Lader
Chairman, WPP Group plc; Senior Advisor, Morgan Stanley; former US Ambassador
to the Court of St. James’s

Charles O. Rossotti
Senior Advisor, The Carlyle Group; former Commissioner, the IRS; former Founder
and Chairman, American Management Systems, Inc.

AES_08ar_CVR_FNLtoPrint.qxp:Layout 1 3/11/09 10:31 AM Page 1

spine

Corporate Ofﬁce
Corporate Ofﬁce
The AES Corporation
The AES Corporation
4300 Wilson Boulevard
4300 Wilson Boulevard
Arlington, VA 22203
Arlington, VA 22203
USA
USA
703-522-1315
703-522-1315

Website
Website
www.aes.com
www.aes.com

N
O
I
T
A
M
R
O
F
N

Y
N
A
P
M
O
C

Independent Auditors
Independent Auditors
Ernst & Young LLP
Ernst & Young LLP

GENERAL: 703-682-6399 or invest@aes.com
GENERAL: 703-682-6399 or invest@aes.com

Ahmed Pasha, Vice President, Investor Relations: 703-682-6451
Ahmed Pasha, Vice President, Investor Relations: 703-682-6451

Media Inquiries
Media Inquiries
Meghan Dotter, Director, External Communications:
Meghan Dotter, Director, External Communications:
703-682-6670 or media@aes.com
703-682-6670 or media@aes.com

design by Phoenix Creative Group, www.phoenixcreativegroup.com

left: wind
turbines at
AES buffalo
gap (US)

E Printed on 10% post-consumer ﬁber.

T
R
O
P
E
R

L
A
U
N
N
A

2008