8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  January 19, 2006

THE AES CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-12291	54-1163725
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)
4300 Wilson Boulevard, Suite 1100, Arlington, Virginia		22203
(Address of principal executive offices)		(zip code)

Registrant’s telephone number, including area code: (703) 522-1315

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

On January 19, 2006, The AES Corporation issued a Media Advisory announcing a financial review teleconference on Friday, January 20, 2006.  On January 19, 2006 the Company posted on its website the Second & Third Quarter 2005 Financial Review and the AES Investor Presentation that will be referenced in investor discussions and during the financial review.  A copy of the Media Advisory, the Second & Third Quarter 2005 Financial Review and the AES Investor Presentation is attached hereto as exhibits 99.1, 99.2 and 99.3.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits

Exhibit No.	Description
99.1	Media Advisory issued by The AES Corporation, dated January 19, 2006, regarding a financial review teleconference scheduled for Friday, January 20, 2006.
99.2	Second & Third Quarter 2005 Financial Review
99.3	AES Investor Presentation

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE AES CORPORATION
	(Registrant)
	By:	/s/ Vincent W. Mathis
		Name:	Vincent W. Mathis
		Title:	Deputy General Counsel
Date: January 19, 2006

3

EX-99.1

Exhibit 99.1

The Global Power Company MEDIA ADVISORY

Media Contact: Robin Pence 703-682-6552

Investor Contact: Scott Cunningham 703-682-6336

AES SCHEDULES SECOND AND THIRD QUARTER FINANCIAL REVIEW

Conference Call January 20, 2006

ARLINGTON, VA., January 19, 2006 – The AES Corporation (NYSE: AES) will hold a conference call on Friday, January 20, 2006 at 10:00 am Eastern Standard Time (EST) to review its second and third quarter 2005 financial results as well as its full 2005 year financial outlook. The call will include prepared remarks and a question and answer session. It will be open to the media and the public in listen-only mode by telephone and Internet broadcast.

Interested parties may listen to the teleconference by dialing 1-800-938-0653 at least ten minutes before the start of the call.  International callers should dial +1-973-935-2408.  Internet access to the conference call will be available at www.aes.com by selecting “News and Events,” then “Calendar of Events.” Presentation materials will be available on the Home page of the website, and also by selecting “News and Events,” and then “Presentations.”

A replay will be accessible by telephone or through the Internet.  A telephonic replay of the call will be available from approximately noon EST on Friday, January 20, 2006.  Please dial 1-877-519-4471.  International callers should dial +1-973-341-3080. The system will ask for a reservation number; please enter 6931428 followed by the pound key (#). The telephonic replay will be available until Friday, February 3, 2006.  A replay will be available on the Internet beginning shortly after the completion of the call.

- more -

About AES

AES is one of the world’s largest global power companies, with 2004 revenues of $9.5 billion.  With operations in 26 countries on five continents, AES provides power to people in more countries around the world than any other company.  Through 123 generation facilities and 14 regulated utilities, AES has the capacity to generate 44,000 megawatts of electricity and provide power to 100 million people worldwide.  Our global workforce of 30,000 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.

###

EX-99.2

Exhibit 99.2

Searchable text section of graphics shown above

AES Corporation

Second and Third Quarter 2005 Financial Review January 19, 2006

[LOGO]

[LOGO] 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 contract 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 the caption “Cautionary Statements and Risk Factors” in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2004, 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.

2Q05 and 3Q05 Financial Review www.aes.com

2

Nine Months Ended September 30, 2005 Highlights

($ Millions except earnings per share and percent)

	Nine Months Ended September 30, 2005
	2005			2004 (1)			Change
Revenues	$	8,113		$	6,940		17	%
Gross Margin	$	2,249		$	2,076		8	%
as % of Sales	27.7		%	29.9		%	(220	) b.p.
Income Before Income Taxes and Minority Interest (IBT&MI)	$	1,047		$	613		71	%
Diluted EPS from Continuing Operations	$	0.68		$	0.36		89	%
Adjusted EPS (2)	$	0.64		$	0.49		31	%
Return on Invested Capital (ROIC) (2)	9.0		%

Revenue Comparison
Period-Over-Period

Volume/Price/Mix	10	%
Currency	7	%
Total	17	%

(1)   Restated.

(2)   Non-GAAP measure.  See page 4 and Appendix.

3

Reconciliation of Adjusted Earnings Per Share

($ Per Share)

	Third Quarter					Second Quarter						First Quarter					Nine Months Ended September 30,
	2005 (2)		2004(3)			2005 (4)			2004(3)			2005 (3) (5)		2004(3) (6)			2005(2) (4) (5)			2004(3) (6)
Adjusted Earnings Per Share (1)	$	0.35	$	0.14		$	0.11		$	0.20		$	0.18	$	0.15		$	0.64		$	0.49
FAS 133 Mark-to-Market Gains/(Losses) (6)	0.01		(0.01		)	(0.01		)	(0.01		)	—		(0.05		)	(0.01		)	(0.07		)
Currency Transaction Gains/(Losses)	0.01		—			0.03			(0.03		)	0.01		(0.02		)	0.05			(0.05		)
Net Asset Gains/(Losses and Impairments)	—		—			—			—			—		—			—			—
Debt Retirement Gains/(Losses)	—		—			—			—			—		(0.01		)	—			(0.01		)
Diluted EPS from Continuing Operations	$	0.37	$	0.13		$	0.13		$	0.16		$	0.19	$	0.07		$	0.68		$	0.36

(1)Adjusted earnings per share (a non-GAAP financial measure), exclude from diluted earnings per share from continuing operations the effects of (i) gains or losses from mark-to-market accounting adjustments related to derivatives, (ii) certain foreign currency transaction gains and losses, (iii) significant impacts from net asset disposals or impairments, and (iv) early retirement of recourse debt.

(2)Includes $0.06 per share benefit related to an Argentina valuation allowance reversal.

(3)Restated.

(4)Includes ($0.06) per share related to Brazilian receivable reserve costs net of a reversal of a business tax reserve.

(5)Includes $0.01 increase in Q1 2005 diluted EPS from continuing operations as restated, due to a tariff increase at our Eletropaulo regulated utility in Brazil that was received in July 2005 and recorded retroactively in the first quarter of 2005 and is reflected in year to date results.

(6)Includes Gener debt restructuring cost of ($0.03) per share.

4

Guidance Elements: Income Statement

Contains Forward Looking Statements

Guidance Element	Updated Guidance (1)	Prior Guidance
Revenue Growth	16 -17%	4%
Gross Margin Change (As % of Revenues)	(75) – (100) b.p.	+50 b.p.
Business Segment Income Before Taxes and Minority Interest (IBT&MI)	$2.0 billion	$2.0 billion
(Excludes Corporate Costs of $650 Million)
Allocated by Segment as a % of Total
•     Regulated Utilities	38%	45%
•     Contract Generation	49%	43%
•     Competitive Supply	13%	12%
Adjusted EPS (2)	$0.83	$0.83
Adjusted EPS Factors (2)	$0.02	$(0.07)
Diluted EPS from Continuing Operations	$0.85	$0.76

(1)   Updated guidance reflects restatement impacts on prior period results.

(2)   Non-GAAP measure. See Appendix.

5

Guidance Elements: Cash Flow

Contains Forward Looking Statements

Guidance Element	Updated Guidance	Prior Guidance
Net Cash From Operating Activities	$1.9 - 2.0 billion	$1.9 - 2.0 billion
Maintenance Capital Expenditures	$600 - 700 million	$700 million
Free Cash Flow (1)	$1.2 - 1.3 billion	$1.2 - 1.3 billion
Subsidiary Distributions (1)	$993 million	$1.0 billion
Parent Debt Repayment (2)	$600 million in	$600 million by
	2005-2006	Early 2006

See Assumptions in Appendix for further information.

(1)           Non-GAAP measure.  See Appendix.

(2)           $254 million in parent debt repaid in 2005.

6

2005 Guidance Elements: Subsidiary Distributions

($ Millions)

2005 Subsidiary Distributions Guidance (Current/Prior) (1)

	North America	Latin America	Asia	Europe, Middle East & Africa	Total
Regulated Utilities	$208/211	$123/120	$—/—	$28/30	$359/361
Contract Generation	234/245	36/50	37/40	158/145	465/480
Competitive Supply	104/101	47/40	18/18	—/—	169/159
Total*	$546/557	$206/210	$55/58	$186/175	$993/1,000

68% of distributions are expected to come from North American Regulated Utilities and Worldwide Contract Generation (prior guidance 69%).

(1)   Non-GAAP measure.

7

Segment Reporting Changes

New Reporting Format		Prior Reporting Format
	Business Segments
Contract Generation		Contract Generation
Competitive Supply		Competitive Supply
Regulated Utilities		Large Utilities
		Growth Distribution

Geographic Segments

North America	Asia	North America	Caribbean
US/Puerto Rico	China	US/Puerto Rico	Colombia
Canada	India	Canada	Dominican Republic
Mexico	Kazakhstan		El Salvador
	Sri Lanka	Europe/Africa	Mexico
Europe/Africa/Middle East		Cameroon	Panama
Cameroon	Latin America	Czech Republic	Venezuela
Czech Republic	Argentina	Hungary
Hungary	Brazil	Netherlands
Netherlands	Chile	Nigeria	Asia
Nigeria	Colombia	Spain	China
Oman	Dominican Republic	Ukraine	India
Pakistan	El Salvador	United Kingdom	Kazakhstan
Qatar	Panama		Oman
Spain	Venezuela		Pakistan
Ukraine		South America	Qatar
United Kingdom		Argentina	Sri Lanka
		Brazil
		Chile

Note: Changes in Bold

8

Second Quarter 2005 Highlights

($ Millions except earnings per share and percent)

	Second Quarter 2005			Second Quarter 2004 (1)			Change
Revenues	$	2,668		$	2,262		18	%
Gross Margin (2)	$	526		$	656		(20	)%
as % of Sales (2)	19.7		%	29.0		%	(930	) b.p.
Income Before Income Taxes and Minority Interest (IBT&MI) (2) (3)	$	186		$	191		(3	) %
Diluted EPS from Continuing Operations (2) (3) (4)	$	0.13		$	0.16		(19	)%
Adjusted EPS (2) (3) (4) (5)	$	0.11		$	0.20		(45	)%
Return on Invested Capital (ROIC) (2) (3) (5)	7.4		%

(1)   Restated.

(2)Includes the impact of a $192 million reserve related to the collectability of certain prior period municipal government receivables at our Brazilian regulated utilities.

(3)Includes the favorable impact of the reversal of a $70 million Brazilian business tax accrual no longer required.

(4)Includes the impact of ($0.06) on diluted earnings per share from continuing operations and adjusted earnings per share as a result of the Brazilian receivables reserve net of the reversal of the business tax accrual.

(5)Non-GAAP measure.  See page 4 and Appendix.

Revenue Comparison

Quarter-Over-Quarter (QOQ)

Volume/Price/Mix	10	%
Currency	8	%
Total	18	%

9

Second Quarter Cash Flow Highlights

($ Millions)

	Second Quarter				Six Months Ended June 30,
	2005		2004 (2)		2005		2004 (2)
Subsidiary-Only
Subsidiary Net Cash from Operating Activities (1)	$	497	$	404	$	1,169	$	933
Consolidated
Net Cash from Operating Activities	$	329	$	212	$	847	$	613
Free Cash Flow (1)	$	183	$	100	$	577	$	379
Parent-Only
Subsidiary Distributions (1)	$	170	$	302	$	365	$	506
Return of Capital from Subsidiaries (1)	$	50	—		$	52	$	3
Recourse Debt Repayment (3)	$	115	$	3	$	115	$	809

(1)Non-GAAP measure. See Appendix.

(2)Restated.

(3)Includes $3 million repaid for notes related to Directors’ and Officers’ Insurance.

10

Second Quarter Segment Highlights Regulated Utilities

($ Millions except as noted)

	Second			Second
	Quarter			Quarter			%
	2005			2004(1)			Change
Revenues	$	1,395		$	1,146		22	%
Gross Margin	$	114		$	278		(59	)%
as % of Sales	8.2		%	24.3		%	(1,610	)b.p.
IBT&MI	$	87		$	116		(25	)%

Revenue Comparison (QOQ)	% Change
Volume/Price/Mix	8	%
Currency (Net)	14	%
Total	22	%

(1)Restated.

Segment Highlights

•Revenues grew as a result of favorable currency effects in Brazil and higher tariffs in Brazil.

•Gross margin decreased as a result of a $192 million reserve related to the collectability of certain prior period municipal government receivables in Brazil.

•IBT&MI includes the impact of the receivables reserve, which was partially offset by the favorable impact of the reversal of a $70 million Brazilian business tax accrual no longer required.

11

Second Quarter Segment Highlights Contract Generation

($ Millions except as noted)

	Second			Second
	Quarter			Quarter			%
	2005			2004(1)			Change
Revenues	$	988		$	868		14	%
Gross Margin	$	353		$	325		9	%
as % of Sales	35.7		%	37.4		%	(170	)b.p.
IBT&MI	$	212		$	199		7	%

Revenue Comparison (QOQ)	% Change
Volume/Price/Mix	12	%
Currency (Net)	2	%
Total	14	%

(1)Restated.

Segment Highlights

•Revenues grew as a result of increased contract pricing in Brazil and Chile, higher dispatch in Chile and at our new Ras Laffan project in Qatar, and favorable currency effects largely in Chile and Brazil.  These positive effects were partially offset by a scheduled contract price reduction in the U.S.

•Gross margin increased primarily as a result of higher revenues.  The decline in gross margin percentage was driven by higher fuel and energy purchase costs in Chile and the scheduled contract price reduction in the U.S.

12

Second Quarter Segment Highlights Competitive Supply

($ Millions except as noted)

	Second			Second
	Quarter			Quarter			%
	2005			2004(1)			Change
Revenues	$	285		$	248		15	%
Gross Margin	$	59		$	53		11	%
as % of Sales	20.7		%	21.4		%	(70	)b.p.
IBT&MI	$	49		$	39		26	%

Revenue Comparison (QOQ)	% Change
Volume/Price/Mix	14	%
Currency (Net)	1	%
Total	15	%

(1)Restated.

Segment Highlights

•Revenues grew as a result of sales of excess emission allowances at our New York plants, partially offset by lower dispatch in New York due to a planned maintenance outage.

•Gross margin increased primarily as a result of the allowance sales and higher prices.  The decline in gross margin percentage occurred as higher fuel prices in Europe and New York partially offset the allowance sales.

13

Third Quarter 2005 Highlights

($ Millions except earnings per share and percent)

	Third			Third
	Quarter			Quarter
	2005			2004 (1)			Change
Revenues	$	2,782		$	2,422		15	%
Gross Margin	$	899		$	736		22	%
as % of Sales	32.3		%	30.4		%	190	b.p.
Income Before Income Taxes and Minority Interest (IBT&MI)	$	484		$	251		93	%
Diluted EPS from Continuing Operations (2)	$	0.37		$	0.13		185	%
Adjusted EPS (2) (3)	$	0.35		$	0.14		150	%
Return on Invested Capital (ROIC) (2) (3)	9.0		%

(1)Restated.

(2)Includes the favorable impact of the reversal of a $41 million tax reserve related to the recovery of net operating losses at two of our subsidiaries in Argentina, resulting in a positive impact of $0.06 on diluted earnings per share from continuing operations and adjusted earnings per share.

(3)Non-GAAP measure.  See page 4 and Appendix.

Revenue Comparison
Quarter-Over-Quarter (QOQ)

Volume/Price/Mix	10	%
Currency	5	%
Total	15	%

14

Third Quarter Cash Flow Highlights

($ Millions)

	Third Quarter				Nine Months Ended September 30,
	2005		2004 (2)		2005		2004 (2)
Subsidiary-Only
Subsidiary Net Cash from Operating Activities (1)	$	728	$	610	$	1,897	$	1,543
Consolidated
Net Cash from Operating Activities	$	619	$	504	$	1,466	$	1,117
Free Cash Flow (1)	$	380	$	375	$	957	$	754
Parent-Only
Subsidiary Distributions (1)	$	274	$	221	$	639	$	727
Return of Capital from Subsidiaries (1)	$	—	$	121	$	52	$	124
Recourse Debt Repayment (3)	$	143	$	—	$	258	$	809

(1)Non-GAAP measure. See Appendix.

(2)Restated.

(3)Includes $4 million repaid for notes related to Directors’ and Officers’ Insurance.

15

Third Quarter/Nine Months Ended 9/30/05 Subsidiary Distributions

($ Millions)

Third Quarter/Nine Months Ended September 30, 2005
Subsidiary Distributions (1)

	North	Latin		Europe, Middle
	America	America	Asia	East & Africa	Total
Regulated Utilities	$55/154	$29/51	—/—	$—/1	$84/206
Contract Generation	$68/179	$—/11	$6/13	$51/121	$125/324
Competitive Supply	$53/87	$12/19	$—/3	—/—	$65/109
Total*	$176/420	$41/81	$6/16	$51/122	$274/639

66% of Third Quarter distributions and 75% of Nine Months Ended September 30, 2005 distributions were from North American Regulated Utilities and Worldwide Contract Generation.

(1)Non-GAAP measure. See Appendix.

16

Third Quarter Segment Highlights Regulated Utilities

($ Millions except as noted)

	Third			Third
	Quarter			Quarter			%
	2005			2004(1)			Change
Revenues	$	1,406		$	1,251		12	%
Gross Margin	$	340		$	301		13	%
as % of Sales	24.2		%	24.1		%	10	b.p.
IBT&MI	$	195		$	168		16	%

Revenue Comparison (QOQ)	% Change
Volume/Price/Mix	(2	)%
Currency (Net)	14	%
Total	12	%

(1)Restated.

Segment Highlights

•Revenues grew as a result of favorable currency effects in Brazil more than offsetting unfavorable currency effects in Venezuela.  Warm weather and recovery relating to environmental investments contributed to higher revenues in the U.S.

•Gross margin increased primarily as a result of higher revenues in Brazil and the U.S., as well as favorable purchased electricity cost comparisons in Brazil.

17

Third Quarter Segment Highlights Contract Generation

($ Millions except as noted)

	Third			Third
	Quarter			Quarter			%
	2005			2004(1)			Change
Revenues	$	1,046		$	906		15	%
Gross Margin	$	453		$	371		22	%
as % of Sales	43.3		%	40.9		%	240	b.p.
IBT&MI	$	348		$	197		77	%

Revenue Comparison (QOQ)	% Change
Volume/Price/Mix	14	%
Currency (Net)	1	%
Total	15	%

(1)Restated.

Segment Highlights

•Revenues grew as a result of increased contract pricing in Brazil and Chile, and favorable currency effects in Chile and Brazil.

•Gross margin and gross margin percentage increased as higher Latin American revenues more than offset increases in fuel prices and other costs, and a scheduled contract price reduction and failure of a utility transmission line serving a plant in the U.S.

18

Third Quarter Segment Highlights Competitive Supply

($ Millions except as noted)

	Third			Third
	Quarter			Quarter			%
	2005			2004(1)			Change
Revenues	$	330		$	265		25	%
Gross Margin	$	106		$	64		66	%
as % of Sales	32.1		%	24.2		%	790	b.p.
IBT&MI	$	86		$	44		95	%

Revenue Comparison (QOQ)	% Change
Volume/Price/Mix	23	%
Currency (Net)	2	%
Total	25	%

(1) Restated.

Segment Highlights

•Revenues grew as a result of increased competitive market prices in Argentina, Panama and New York, as well as higher dispatch in Argentina.

•Gross margin and gross margin percentage increased as higher competitive market prices more than offset increases in fuel prices in New York and Argentina.

19

Appendix

20

Restatement Summary Income Statement Effects 2002-2004

($ Millions)

	Year Ended December 31,
	2004			2003			2002
Income (loss) from continuing operations as previously reported	$	366		$	332		$	(1,646	)
Changes in income (loss) from continuing operations from restatement due to:
(Decrease) in revenues (1)	(23		)	(2		)	(3		)
Decrease in cost of sales (2)	33			25			21
(Increase) in interest expense (3)	(31		)	—			(48		)
(Increase) in goodwill impairment expense (4)	—			—			(97		)
Decrease/(increase) in foreign currency transaction gains/(losses) (5)	(29		)	(31		)	(185		)
(Increase) in income tax expense (6)	(126		)	(7		)	(168		)
Decrease/(increase) in minority interest expense (7)	71			(10		)	55
Other changes affecting income (loss) from continuing operations	(3		)	4			7
Total changes in income (loss) from continuing operations	$	(108	)	$	(21	)	$	(418	)
Income (loss) from continuing operations as restated	$	258		$	311		$	(2,064	)

(1)Revenue was impacted by the deferral of revenue at Eletropaulo and Sul to correctly match the earning of revenue with the expenditures required by the regulator in relation to its energy efficiency program. In addition, revenue was adjusted for the correction of certain acquisition liabilities related to the Cameroonian utility. These liabilities impacted the initial valuation of the “concession asset” which represented excess purchase cost over the fair value of identifiable assets and liabilities. This concession asset is amortized through revenue.

(2)Depreciation expense was impacted by changes in deferred tax balances as of the acquisition date of certain subsidiaries. These deferred tax adjustments in turn affected the amount of excess purchase cost originally allocated to fixed assets, thus impacting subsequent depreciation amounts.

(3)Interest expense was impacted primarily by the correct accounting for changes in inflation on certain Brazilian debt instruments.

(4)Goodwill impairment expense was impacted by the correction of acquisition deferred tax balances, which adjusted the acquired entity’s excess fair value over identifiable assets or liabilities (goodwill). For certain of these subsidiaries, goodwill subsequent to the acquisition was impaired and written off in 2002. Therefore the corrections to the goodwill balances were also written off.

(5)Foreign currency translation gains (losses) were impacted by the correct remeasurement of deferred tax balances at current rates at entities where the U.S. dollar is the functional currency.

(6)Income tax expense was impacted by the creation and subsequent adjustment of deferred tax assets or liabilities related to the foreign currency changes on U.S. dollar denominated debt at certain Brazilian subsidiaries; the recording of an adjustment related to Sul (a dual tax status entity) recognizing the tax impact of potential future foreign income included in the U.S. return; the creation of additional valuation allowances; and the reconciliation of deferred tax balances as a result of reconciling tax return records to related accounting records.

(7)Minority interest (income) expense was impacted by tax and other corrections to minority owned subsidiaries’ earnings.

21

Restatement Summary Income Statement Effects Quarters

($ Millions)

	Quarter Ended
	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
	2005			2004			2004			2004			2004
Income from continuing operations as previously reported	$	133		$	92		$	133		$	67		$	74
Change in income from continuing operations from restatement due to:
Increase/(decrease) in revenues	18			(20		)	(1		)	(1		)	(1		)
Decrease in cost of sales	24			13			6			9			5
(Increase) in interest expense	—			(5		)	(8		)	(10		)	(8		)
Decrease/(increase) in foreign currency transaction gains/(losses)	(19		)	(5		)	(6		)	8			(26		)
Decrease/(increase) in income tax expense	(21		)	(107		)	(50		)	42			(11		)
Decrease/(increase) in minority interest expense	(15		)	59			15			(12		)	9
Other changes affecting income from continuing operations	4			—			(3		)	—			—
Total changes in income from continuing operations	$	(9	)	$	(65	)	$	(47	)	$	36		$	(32	)
Income from continuing operations as restated	$	124		$	27		$	86		$	103		$	42

22

Restatement Summary Earnings per Share Effects 2002-2005

	Quarter Ended										Year Ended
	March 31, 2005				December 31, 2004						December 31, 2003					December 31, 2002
	As Previously				As Previously						As Previously					As Previously
	Reported		As Restated		Reported			As Restated			Reported			As Restated		Reported			As Restated
Adjusted earnings (loss) per share	$	0.17	$	0.18	$	0.73		$	0.58		$	0.56
FAS 133 mark-to-market gains/(losses)	—		—		(0.06		)	(0.06		)	(0.07		)
Currency transaction gains/(losses)	0.03		0.01		(0.02		)	(0.06		)	0.19
Net asset gains/(losses and impairments)	—		—		(0.05		)	(0.05		)	(0.24		)
Debt retirement gains/(losses)	—		—		(0.03		)	(0.01		)	0.12
Diluted earnings (loss) per share from continuing operations	$	0.20	$	0.19	$	0.57		$	0.40		$	0.56		$	0.52	$	(3.06	)	$	(3.83	)

23

Restatement Summary Earnings per Share Effects 2004 Quarters

	Quarter Ended
	December 31, 2004						September 30, 2004						June 30, 2004						March 31, 2004
	As Previously						As Previously						As Previously						As Previously
	Reported			As Restated			Reported			As Restated			Reported			As Restated			Reported			As Restated
Adjusted earnings (loss) per share	$	0.19		$	0.10		$	0.21		$	0.14		$	0.15		$	0.20		$	0.17		$	0.15
FAS 133 mark-to-market gains/(losses)	0.01			0.01			(0.02		)	(0.01		)	(0.01		)	(0.01		)	(0.04		)	(0.05		)
Currency transaction gains/(losses)	(0.01		)	(0.01		)	0.01			—			(0.04		)	(0.03		)	—			(0.02		)
Net asset gains/(losses and impairments)	(0.05		)	(0.05		)	—			—			—			—			—			—
Debt retirement gains/(losses)	—			(0.01		)	—			—			—			—			(0.01		)	(0.01		)
Diluted earnings (loss) per share from continuing operations	$	0.14		$	0.04		$	0.20		$	0.13		$	0.10		$	0.16		$	0.12		$	0.07

24

Restatement Summary Balance Sheet Effects 2003-2005

($ Millions)

Asset Effects

				As of
	March 31,			December 31,			December 31,
	2005			2004			2003
Total assets as previously reported	$	29,663		$	29,732		$	29,787
Changes in assets from restatement due to:
Cash & cash equivalents	(56		)	(127		)	(74		)
Short-term investments	57			127			75
Deferred income taxes – current	95			31			60
Property, plant and equipment, net	(603		)	(611		)	(632		)
Deferred financing costs, net	(169		)	(170		)	(128		)
Goodwill, net	38			41			43
Deferred income taxes – non-current	(58		)	(39		)	18
Other changes in assets, net	(22		)	(61		)	(12		)
Total changes in assets	$	(718	)	$	(809	)	$	(650	)
Total assets as restated	$	28,945		$	28,923		$	29,137

25

($ Millions)

Liabilities and Stockholders’ Equity Effects

				As of
	March 31,			December 31,			December 31,
	2005			2004			2003
Total liabilities and minority interest as previously reported	$	27,915		$	28,087		$	29,242
Changes in liabilities and minority interest from restatement due to:
Deferred income taxes	52			—			(149		)
Other long-term liabilities	109			114			119
Minority interest	(311		)	(326		)	(68		)
Other changes in liabilities, net	87			76			61
Total changes in liabilities and minority interest	$	(63	)	$	(136	)	$	(37	)
Total liabilities and minority interest as restated	$	27,852		$	27,951		$	29,205
Total stockholders’ equity as previously reported	$	1,748		$	1,645		$	545
Changes in stockholders’ equity from restatement due to:
Additional paid-in-capital	86			82			2
Accumulated deficit	(1,011		)	(1,002		)	(908		)
Accumulated other comprehensive loss	270			247			293
Total changes in stockholders’ equity	$	(655	)	$	(673	)	$	(613	)
Total stockholders’ equity as restated	$	1,093		$	972		$	(68	)

26

Sarbanes-Oxley Section 404 Update

	Status of
Material Weakness	Remediation	Remediation Steps
Previously Reported
Income Tax Accounting	Underway	•Expanding internal tax staff and external assistance and providing tax accounting training
		•Implementing rigorous approach to communicate, document and reconcile subsidiary income tax assets and liabilities
		•Continuing to identify and implement additional best practice solutions regarding efficient data collection, integration and controls
		•Implementing additional procedures in the identification and evaluation of non-recurring tax adjustments and in tracking movements in deferred tax accounts recorded by the parent company and its subsidiaries
		•Recording all tax accounting adjustments on the appropriate subsidiaries’ books
Newly Identified
Aggregate of Control Deficiencies at Cameroonian Subsidiary (SONEL)	Underway	•Hired additional accounting personnel at SONEL, including new CFO
		•Implementing controls around preparation and review of financial statements account analyses
		•Utilizing the Company’s internal audit resources to provide remediation assistance and review and evaluate new control procedures
Lack of U.S. GAAP Expertise in Brazilian Businesses	Underway	•Supplemented existing accounting policies with additional guidance related to the proper classification of cash and investments in accordance with SFAS 95 and communicated this to all subsidiaries
		•Hired additional supervisory personnel with US GAAP knowledge at AES subsidiaries who are responsible for reviewing and analyzing the financial results of the businesses in Brazil
		•Providing additional detailed accounting policy and procedures guidance for the identification of and accounting for complex or unusual transactions by the subsidiaries, including specific guidance on the proper application of U.S. GAAP
Consolidation Accounting	Completed	•Collected, reviewed and validated supporting documentation for consolidation adjustments and entries recorded at the parent company
Accounting for Intercompany Loans Denominated in non- Functional Currencies	Underway	•Performed a review of intercompany loans to ensure proper application of SFAS 52 and provided additional guidance to subsidiaries on SFAS 52 requirements related to intercompany loan transactions
		•Implementing additional procedures to ensure documentation and testing of the proper determination of an entity’s functional currency on a periodic basis
Derivative Accounting	Underway	•Performed reassessment of certain fuel and power purchase contracts
		•Provided and will continue to provide training on derivative instruments and embedded derivatives to accounting and non-financial personnel across AES
		•Enhancing risk management policies and procedures related to material purchase or sale contracts
		•Increasing technical accounting staff to support AES subsidiaries on derivative accounting

27

Second Quarter Subsidiary Distributions

($ Millions)

Second Quarter Subsidiary Distributions (1)

	North		Latin				Europe, Middle
	America		America		Asia		East & Africa		Total
Regulated Utilities	$	52	$	—	$	—	$	1	$	53
Contract Generation	$	52	$	11	$	—	$	40	$	103
Competitive Supply	$	6	$	5	$	3	$	—	$	14
Total*	$	110	$	16	$	3	$	41	$	170

91% of Second Quarter distributions were from North American Regulated Utilities and Worldwide Contract Generation.

(1)     Non-GAAP measure. See Appendix.

28

Parent Sources and Uses of Cash

($ Millions)

	First			Second			Third			Nine Months Ended
	Quarter			Quarter			Quarter			September 30,
	2005			2005			2005			2005
Sources
Total Subsidiary Distributions (1)	$	195		$	170		$	274		$	639
Proceeds From Asset Sales, Net	—			1			1			2
Refinancing Proceeds, Net	—			—			—			—
Increased Revolver Commitments	—			—			200			200
Issuance of Common Stock, Net	8			8			4			20
Total Returns of Capital Distributions and Project Financing Proceeds	2			50			—			52
Beginning Liquidity (1)	643			477			379			643
Total Sources	$	848		$	706		$	858		$	1,556
Uses
Repayments of Debt (2)	$	—		$	(115	)	$	(143	)	$	(258	)
Investments in Subsidiaries, Net	(99		)	(20		)	(34		)	(153		)
Cash for Development, Selling, General and Administrative and Taxes	(54		)	(36		)	(33		)	(123		)
Cash Payments for Interest	(78		)	(136		)	(77		)	(291		)
Other	(140		)	(20		)	(135		)	(295		)
Ending Liquidity (1)	(477		)	(379		)	(436		)	(436		)
Total Uses	$	(848	)	$	(706	)	$	(858	)	$	(1,556	)

(1)Non-GAAP financial measure. See Appendix.

(2)Repayments of debt in second quarter 2005 included $112 million for Senior Subordinated Notes and $3 million for Directors & Officers insurance premium financing. Repayments of debt in third quarter 2005 included $142 million for Junior Convertible Debentures and $1 million for Directors and Officers insurance premium financing.

29

Second Quarter Reconciliation of Changes to Debt Balances

($ Millions)

	Debt
	Reconciliation
Parent Debt (Including Letters of Credit) at 12/31/04 (1)	$	5,250
Scheduled Debt Maturities	—
Mandatory Debt Repayments	—
Discretionary Debt Repayments:
Prepayment of Debt	(112		)
Other (2)	130
Parent Debt (Including Letters of Credit) at 6/30/05	$	5,268
Less: Letters of Credit Outstanding at 6/30/05	(235		)
Parent Debt (Excluding Letters of Credit) at 6/30/05	$	5,033

(1)Amounts reflect recourse debt of $5,152 million and $98 million of letters of credit under the parent revolver. Revolver availability at 6/30/05 was $215 million.

(2)Other includes $137 million increase in letters of credit and $10 million decrease due to foreign currency changes.

30

Third Quarter Reconciliation of Changes to Debt Balances

($ Millions)

	Debt
	Reconciliation
Parent Debt (Including Letters of Credit) at 12/31/04 (1)	$	5,250
Scheduled Debt Maturities	—
Mandatory Debt Repayments	—
Discretionary Debt Repayments:
Prepayment of Debt	(254		)
Other (2)	259
Parent Debt (Including Letters of Credit) at 9/30/05	$	5,255
Less: Letters of Credit Outstanding at 9/30/05	(369		)
Parent Debt (Excluding Letters of Credit) at 9/30/05	$	4,886

(1)Amounts reflect recourse debt of $5,152 million and $98 million of letters of credit under the parent revolver. Revolver availability at 9/30/05 was $281 million.

(2)Other includes $271 million increase in letters of credit and $14 million decrease due to foreign currency changes.

31

Second Quarter 2005 Consolidated Cash Flow

($ Millions)

	Subsidiaries			AES Corp (1)			Eliminations			Consolidated
Net Cash from Operating Activities	$	497		$	2		$	(170	)	$	329
Maintenance Capital Expenditures	(140		)	(6		)	—			(146		)
Growth Capital Expenditures	(114		)	—			—			(114		)
Investment in Subsidiaries	—			(22		)	22			—
Returns of Capital from Subsidiaries	—			50			(50		)	—
Net Proceeds from Asset Sales	2			1			—			3
Proceeds from the Sale of Emission Allowances	27			—			—			27
Sale of Short Term Investments, Net of Purchases	33			—			—			33
Cash Paid for Acquisitions	—			—			—			—
Increase in Restricted Cash	(72		)	(2		)	—			(74		)
Decrease in Debt Service Reserves and Other Assets	46			—			—			46
Other	(4		)	1			—			(3		)
Net Cash (for) from Investments	(222		)	22			(28		)	(228		)
Financing Proceeds for Growth Capital Expenditures	60			—			—			60
Financing Proceeds from Other Financings Including Refinancings	470			—			—			470
Equity Proceeds	—			8			—			8
Repayments, Net (Including Refinancings)	(652		)	(124		)	—			(776		)
Payments for Financing Costs	(7		)	(2		)	—			(9		)
Equity Contributions by Parent	22			—			(22		)	—
Distributions to Parent	(170		)	—			170			—
Returns of Capital to Parent	(50		)	—			50			—
Other	(17		)	—			—			(17		)
Net Cash (for) from Financing	(344		)	(118		)	198			(264		)
Increase (Decrease) in Cash & Cash Equivalents	(69		)	(94		)	—			(163		)
Effect of FX	46			(1		)	—			45
Beginning Cash & Cash Equivalents Balance	1,240			259			—			1,499
Ending Cash & Cash Equivalents Balance	1,217			164			—			1,381

(1)Includes activity at qualified holding companies.

Note: Certain amounts have been netted, condensed and rounded for presentation purposes.

32

Third Quarter 2005 Consolidated Cash Flow

($ Millions)

	Subsidiaries			AES Corp (1)			Eliminations			Consolidated
Net Cash from Operating Activities	$	728		$	165		$	(274	)	$	619
Maintenance Capital Expenditures	(235		)	(4		)	—			(239		)
Growth Capital Expenditures	(31		)	—			—			(31		)
Investment in Subsidiaries	—			(34		)	34			—
Returns of Capital from Subsidiaries	—			—			—			—
Net Proceeds from Asset Sales	14			1			—			15
Proceeds from the Sale of Emission Allowances	1			—			—			1
Sale of Short Term Investments, Net of Purchases	(143		)	—			—			(143		)
Cash Paid for Acquisitions	—			—			—			—
Decrease in Restricted Cash	24			—			—			24
Decrease in Debt Service Reserves and Other Assets	15			—			—			15
Other	(5		)	—			—			(5		)
Net Cash (for) from Investments	(360		)	(37		)	34			(363		)
Financing Proceeds for Growth Capital Expenditures	13			—			—			13
Financing Proceeds from Other Financings Including Refinancings	545			—			—			545
Equity Proceeds	—			4			—			4
Repayments, Net (Including Refinancings)	(816		)	(143		)	—			(959		)
Payments for Financing Costs	—			—			—			—
Equity Contributions by Parent	34			—			(34		)	—
Distributions to Parent	(274		)	—			274			—
Returns of Capital to Parent	—			—			—			—
Other	(81		)	—			—			(81		)
Net Cash (for) from Financing	(579		)	(139		)	240			(478		)
Increase (Decrease) in Cash & Cash Equivalents	(211		)	(11		)	—			(222		)
Effect of FX	3			2			—			5
Beginning Cash & Cash Equivalents Balance	1,217			164			—			1,381
Ending Cash & Cash Equivalents Balance	1,009			155			—			1,164

(1)Includes activity at qualified holding companies.

Note: Certain amounts have been netted, condensed and rounded for presentation purposes.

33

Nine Months Ended September 30, 2005 Consolidated Cash Flow

($ Millions)

	Subsidiaries			AES Corp (1)			Eliminations			Consolidated
Net Cash from Operating Activities	$	1,897		$	208		$	(639	)	$	1,466
Maintenance Capital Expenditures	(497		)	(12		)	—			(509		)
Growth Capital Expenditures	(292		)	—			—			(292		)
Investment in Subsidiaries	—			(68		)	68			—
Returns of Capital from Subsidiaries	—			52			(52		)	—
Net Proceeds from Asset Sales	19			2			—			21
Proceeds from the Sale of Emission Allowances	30			—			—			30
Sale of Short Term Investments, Net of Purchases	48			—			—			48
Cash Paid for Acquisitions	—			(85		)	—			(85		)
Decrease in Restricted Cash	17			—			—			17
Decrease in Debt Service Reserves and Other Assets	88			—			—			88
Other	(15		)	—			—			(15		)
Net Cash (for) from Investments	(602		)	(111		)	16			(697		)
Financing Proceeds for Growth Capital Expenditures	165			—			—			165
Financing Proceeds from Other Financings Including Refinancings	1,334			—			—			1,334
Equity Proceeds	—			20			—			20
Repayments, Net (Including Refinancings)	(2,054		)	(252		)	—			(2,306		)
Payments for Financing Costs	(8		)	(2		)	—			(10		)
Equity Contributions by Parent	68			—			(68		)	—
Distributions to Parent	(639		)	—			639			—
Returns of Capital to Parent	(52		)	—			52			—
Other	(121		)	—			—			(121		)
Net Cash (for) from Financing	(1,307		)	(234		)	623			(918		)
Increase (Decrease) in Cash & Cash Equivalents	(12		)	(137		)	—			(149		)
Effect of FX	31			1			—			32
Beginning Cash & Cash Equivalents Balance	990			291			—			1,281
Ending Cash & Cash Equivalents Balance	1,009			155			—			1,164

(1)Includes activity at qualified holding companies.

Note: Certain amounts have been netted, condensed and rounded for presentation purposes.

34

Reconciliation of Subsidiary Distributions and Parent Liquidity

($ Millions)

Second and Third Quarter 2005 Reconciliation

	Quarter Ended																			Six Months Ended						Nine Months Ended
Total subsidiary distributions	Sep. 30,		June 30,			March 31,			Dec. 31,			Sep. 30,			June 30,			Mar. 31,		June 30,			June 30,			Sep. 30,			Sep. 30,
& returns of capital to parent	2005		2005			2005			2004			2004			2004			2004		2005			2004			2005			2004
Subsidiary distributions to parent	$	274	$	170		$	190		$	286		$	209		$	292		$	204	$	360		$	496		$	634		$	705
Net distributions to/(from) QHCs	—		—			5			(9		)	12			10			—		5			10			5			22
Total subsidiary distributions	274		170			195			277			221			302			204		365			506			639			727
Returns of capital distributions to parent	—		37			2			3			110			—			3		39			3			39			113
Net returns of capital distributions to/ (from) QHCs	—		13			—			—			11			—			—		13			—			13			11
Total returns of capital distributions	—		50			2			3			121			—			3		52			3			52			124
Combined distributions & return of capital received	274		220			197			280			342			302			207		417			509			691			851
Less: combined net distributions & returns of capital to/(from) QHCs	—		(13		)	(5		)	9			(23		)	(10		)	—		(18		)	(10		)	(18		)	(33		)
Total subsidiary distributions & returns of capital to parent	$	274	$	207		$	192		$	289		$	319		$	292		$	207	$	399		$	499		$	673		$	818

	Balance as of
	Sep. 30,		June 30,		March 31,		Dec. 31,
Liquidity	2005		2005		2005		2004
Cash at parent	$	146	$	145	$	256	$	287
Availability under revolver	281		215		218		352
Cash at QHCs	9		19		3		4
Ending liquidity	436		379		477		643

See following page for further information.

35

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 demand at our distribution companies and operational performance at our contract generation businesses consistent with historical levels.

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 qualifying holding companies is available to the parent, AES uses the combined measure of subsidiary distributions to parent and qualified holding companies 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.

36

Definitions of Non-GAAP Measures

•Adjusted earnings per share (a non-GAAP financial measure), exclude from diluted earnings per share from continuing operations the effects of (i) gains or losses from mark-to-market accounting adjustments related to derivatives, (ii) certain foreign currency transaction gains and losses, (iii) significant impacts from net asset disposals or impairments, and(iv) early retirement of recourse debt. AES believes that adjusted earnings per share better reflects the underlying business performance of the Company, and are 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, and periodic strategic decisions to dispose of certain assets which may influence results in a given period.

•Free cash flow – Net cash flow from operating activities less maintenance capital expenditures.

•Liquidity – Cash at the parent company plus availability under corporate revolver plus cash at qualifying holding companies (QHCs).

•Maintenance capital expenditures – reflect property additions less growth capital expenditures.

•Return on invested capital (ROIC) – Net operating profit after tax (NOPAT) divided by average capital. NOPAT is defined as income before tax and minority expense plus interest expense less income taxes less tax benefit on interest expense at effective tax rate. Average capital is defined as the average of beginning and ending total debt plus minority interest plus shareholders equity less debt service reserves.

•Subsidiary Distributions – Cash distributions (primarily dividends and interest income) from subsidiary companies to the parent company and qualified holding companies. These cash flows are the source of cash flow to the parent to meet corporate interest, overhead, cash taxes, and discretionary uses such as recourse debt reductions and corporate investments.

37

Reconciliation of Cash Flow Items

Reconciliation of Net Cash from Operating Activities ($ Millions)

			AES Corp &
	Subsidiaries		QHCs (1)		Eliminations			Consolidated
Second Quarter 2005	$	497	$	2	$	(170	)	$	329
Six Months Ended June 30, 2005	$	1,169	$	43	$	(365	)	$	847
Third Quarter 2005	$	728	$	165	$	(274	)	$	619
Nine Months Ended September 30, 2005	$	1,897	$	208	$	(639	)	$	1,466

(1) Includes qualified holding companies.

Reconciliation of Free Cash Flow ($Millions)

		Nine Months Ended								Six Months Ended
	2005	September 30,				Third Quarter				June 30,				Second Quarter
	Guidance	2005		2004		2005		2004		2005		2004		2005		2004
Free Cash Flow	$1,200 to 1,300	$	957	$	754	$	380	$	375	$	577	$	379	$	183	$	100
Maintenance Capital Expenditures	$600 to 700	$	509	$	363	$	239	$	129	$	270	$	234	$	146	$	112
Net Cash Provided by Operating Activities	$1,900 to 2,000	$	1,466	$	1,117	$	619	$	504	$	847	$	613	$	329	$	212

38

Second Quarter Calculation of Return on Invested Capital

($ Millions except percent)

Net Operating Profit After Tax (1)	Third Quarter 2004			Fourth Quarter 2004			First Quarter 2005			Second Quarter 2005			Rolling Twelve Months Second Quarter 2005
IBT&MI	$	251		$	218		$	377		$	186		$	1,032
Reported Interest Expense	478			492			467			475			1,912
Income Tax Expense (2)	372			505			329			291			1,461
Net Operating Profit After Tax	357			205			515			370			1,483
Effective Tax Rate (3)	51		%	71		%	39		%	44		%	50		%
ROIC (4)													7.4		%

	Second		Second
	Quarter		Quarter
Total Capital (5)	2004		2005
Total Debt	$	18,343	$	18,245
Minority Interest	960		1,430
Stockholders’ Equity	1,402		1,228
Debt Service Reserves and Other Deposits	615		634
Total Capital	$	20,090	$	20,269
Average Capital (6)			$	20,180

(1)Net operating profit after tax, a non-GAAP financial measure, is defined as income before tax and minority interest expense (IBT&MI) plus interest expense less income taxes less tax benefit on interest expense at the effective tax rate.

(2)Income tax expense calculated by multiplying the sum of IBT&MI and reported interest expense for the period by the effective tax rate for the period.

(3)Effective tax rate calculated by dividing reported income tax expense for the period by IBT&MI for the period.

(4)Return on invested capital (ROIC), a non-GAAP financial measure, is defined as net operating profit after tax divided by average capital calculated over rolling 12 month basis.

(5)Total capital, a non-GAAP financial measure, is defined as total debt plus minority interest plus stockholders’ equity less debt service reserves.

(6)Average capital is defined as the average of beginning and ending total capital over the last twelve months.

39

Third Quarter Calculation of Return on Invested Capital

($ Millions except percent)

Net Operating Profit After Tax (1)	Fourth Quarter 2004			First Quarter 2005			Second Quarter 2005			Third Quarter 2005			Rolling Twelve Months Third Quarter 2005
IBT&MI	$	218		$	377		$	186		$	484		$	1,265
Reported Interest Expense	492			467			475			450			1,884
Income Tax Expense (2)	505			329			291			276			1,312
Net Operating Profit After Tax	205			515			370			658			1,837
Effective Tax Rate (3)	71		%	39		%	44		%	30		%	42		%
ROIC (4)													9.0		%

	Third		Third
	Quarter		Quarter
Total Capital (5)	2004		2005
Total Debt	$	18,515	$	17,946
Minority Interest	981		1,517
Stockholders’ Equity	1,572		1,421
Debt Service Reserves and Other Deposits	598		653
Total Capital	$	20,470	$	20,231
Average Capital (6)			$	20,351

(1)Net operating profit after tax, a non-GAAP financial measure, is defined as income before tax and minority interest expense (IBT&MI) plus interest expense less income taxes less tax benefit on interest expense at the effective tax rate.

(2)Income tax expense calculated by multiplying the sum of IBT&MI and reported interest expense for the period by the effective tax rate for the period.

(3)Effective tax rate calculated by dividing reported income tax expense for the period by IBT&MI for the period.

(4)Return on invested capital (ROIC), a non-GAAP financial measure, is defined as net operating profit after tax divided by average capital calculated over rolling 12 month basis.

(5)Total capital, a non-GAAP financial measure, is defined as total debt plus minority interest plus stockholders’ equity less debt service reserves.

(6)Average capital is defined as the average of beginning and ending total capital over the last twelve months.

40

EX-99.3

Exhibit 99.3

Searchable text section of graphics shown above

AES Investor Presentation

AES CORPORATION

[GRAPHIC]

January 19, 2006

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 contract 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 the caption “Cautionary Statements and Risk Factors” in the Company’s 2004 Annual Report on Form 10-K/A, 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.

www.aes.com

2

AES is Among the Largest Global Power Companies

[GRAPHIC]

$9.5 billion revenue power generation and distribution business

$1.6 billion net cash from operating activities

Capacity to serve 100 million people in 26 countries

Note: 2004 data.

3

Clear Strategic Focus

Contains Forward Looking Statements

Key Strategy Elements and Projected Financial Metrics 2003-2008

Global
Operational
Excellence Deleveraging
and Credit
Improvement Focused
Growth
Strategies

Double-digit growth in EPS from continuing operations(1)
Gross margin improvement to $3.5 billion
ROIC(2) improvement to 11%

(1)Based on 13-19% per year growth in diluted EPS from continuing operations from $0.56 per share 2003 base (pre-restatement). Implied range of 2008 EPS forecasts of up to $1.34 in 2008 is unchanged based on restated 2003 diluted EPS from continuing operations. See Appendix.

(2)Non-GAAP financial measures. Guidance includes growth projects committed to in 2004 and prior years. See Appendix.

4

Diversified Utilities and Generation Portfolio

2004 Revenue $9.5 billion	2004 Gross Margin $2.8 billion
[CHART]	[CHART]

•Regulated Utilities in 7 countries	•Generation(1)
	78% Revenue from long-term contracts
	22% Revenue from short-term contracts and spot sales

(1)Generation comprises Contract Generation and Competitive Supply segments

5

Generation KPI’s

	Key Peformance Indicator (KPI)
	•Lost time accidents (LTA)
Safety Excellence	•Near misses
Operational Excellence	•Equivalent forced outage rate (EFOR) •Operating cost per megawatt hour •Heat rate •Global sourcing (target spend & sourced savings)
Customer Service Excellence	•Equivalent forced outage rate (EFOR) •Commercial availability

6

KPI Example - Utility Generation Plant EFOR Improvement

IPL (US) and EDC (Venezuela) EFOR
2003-2005YTD(1)

[CHART]

EFOR Improvement

IPL sources of improvement:

•Targeted equipment replacement to improve reliability

•Increased open market power sales

EDC sources of improvement:

•Improved proactive maintenance

•Better outage planning

Results:

•40% improvement at IPL

•76% improvement at EDC

(1)Data through September 30, 2005

7

Utility KPI’s

	Key Performance Indicator (KPI)
	•	Lost time accidents (LTA)
Safety Excellence	•	Near misses
	•	Public safety
	•	Losses rate
Operational Excellence	•	Collections rate
	•	O&M per customer
	•	Overhead per customer
	•	System interruption frequency (SAIFI)
Customer Service Excellence	•	System interruption duration (SAIDI)
	•	Customer satisfaction surveys

8

Utility KPI Example - El Salvador O&M per Customer

El Salvador O&M per Customer

2003-2005YTD(1)

[CHART]

El Salvador O&M Cost Reduction

•Four distribution companies serving almost 1 million customers

Sources of improvement:

•Integrating four distribution companies to gain synergies

•Implemented rigorous work management process to streamline maintenance and improve workforce efficiency

•Feeder level analysis to optimize investments and asset importance

Results: 21% unit O&M cost reduction

(1)Data through September 30, 2005

9

Utility KPI Examples - Argentina Losses

Eden Total Loss Rate

2003-2005YTD(1)

[CHART]

Eden Total Loss Rate Reduction

•Distribution company serving almost 300,000 customers

Sources of improvement:

•Increased proactive contact with customers possibly committing fraud

•100% increase in letters sent to bad debtors

•More aggressive and targeted disconnection effort and use of collection agents

Results: 27% total loss rate reduction

(1)Data through September 30, 2005

10

Financial Strategy Elements

Contains Forward Looking Statements

Target Capital Structure	•	$600 MM 2005-2006 parent debt reduction to achieve BB credit statistics
	•	Optimize return on invested capital
Robust Risk Management	•	Global interest rate, currency, energy cost risk management strategies
	•	Limited recourse project finance structures
Transparent Disclosure	•	Financial analysis and reporting
	•	Sarbanes/Oxley compliance
	•	Proactive investor communications
	•	Corporate values and rigorous code of business conduct and compliance program

11

Limited US Merchant Exposure Hedged With Creditworthy Customers

Contains Forward Looking Statements

AES Eastern Energy Contracting Strategy

Hedge Metrics (2005-6)(1)	Hedge % by Counterparty Credit (2005)(1)
[CHART]	[CHART]

(1)Data as of September 30, 2005

12

Actively Managed Floating Rate Debt Exposure

Contains Forward Looking Statements

AES Debt Profile

AES Fixed vs. Floating Rate Debt

[CHART]

Floating Rate Debt by Currency(2)

				Minority Interest
	Consolidated			Adjusted
US Dollar	45		%	57		%
Brazilian Real	36		%	18		%
Euro	12		%	16		%
Hungarian Forint	3		%	4		%
Venezuelan Bolivar	2		%	3		%
Other currencies	2		%	2		%
	100		%	100		%
Floating rate debt	$	3.7 billion		$	2.5 billion

(1)Including interest rate swaps

(2)Data as of September 30, 2005

13

Measuring Improvement through Gross Margin and Return on Invested Capital

Performance Drivers
Generation	Utilities
New Contracted Capacity	Tariff Process Management
Competitive Supply Dispatch	Demand Growth (non-US)	Revenues
Reduce EFOR	Reduce Commercial Losses	Gross
		Margin
Optimize Operating & Sourcing Costs Fuel Purchase Risk Management		Operating Costs
Overhead Cost Management Currency and Other Risk Management		Below Gross Margin	ROIC
Working Capital and Debt Reduction Asset Utilization		Asset Management

14

Strong Free Cash Flow Growth

Contains Forward Looking Statements

[CHART]

(1)Non-GAAP financial measure. See Appendix.

(2)Based on midpoint of 2005 free cash flow financial guidance ($1,250 million)

15

Disciplined Use of Growing Free Cash Flow

			Contains Forward Looking Statements
		2005-2006	2006-2007 and Beyond
2005 Free Cash Flow(1) Profile		Strategy	Strategy
		Achieve BB/Ba2	Invest for growth
	Parent	credit metrics
	Free Cash Flow $350 MM	Rebuild development pipeline	Alternatives if growth projects don’t develop at adequate returns • investment grade credit • cash dividends • share repurchases
Free Cash
Flow(1)	Optimize Annually
$1,250 MM
		Subsidiary debt reduction
	Subsidiary
	Free Cash	Platform expansion
	Flow
	$900 MM	Dividends (AES and minority owners)

(1)Non-GAAP financial measure based on midpoint of 2005 guidance of $1.2 to $1.3 billion and is reconciled from 2005 guidance for net cash from operating activities of $1.9 to $2.0 billion less maintenance capital expenditures of $700 million. Estimated allocation of this midpoint 2005 free cash flow guidance is $350 million at the parent company and $900 million at subsidiaries.

16

Breadth of AES Capabilities

[GRAPHIC]	[GRAPHIC]	[GRAPHIC]
Distribution	Coal-Fired	Hydroelectric
[GRAPHIC]	[GRAPHIC]	[GRAPHIC]
Wind Power	LNG	Gas-Fired

17

Rebuilding Development Pipeline

Contains Forward Looking Statements

Deep Development Pipeline Supports Sustained Growth

4-6 Years for Greenfield Projects

3-4 Years for Wind Projects

Development Milestones	Market Assessment/ Feasibility Study	Negotiations/ Permits/ RFP	Purchase Agreement	Project Financing	Construction
Current Activity	38 Countries	6 Countries	1 Country	2 Countries	3 Countries
	Central America	Bahamas	Chile	Bulgaria	Chile
Examples of	China	Romania		Panama	Spain
Current	Eastern Europe	El Salvador			US
Portfolio	India	Middle East
Development	Pakistan	US
Activity	South Africa	Vietnam
	US

18

Demonstrated Success With Generation Growth Program

Contains Forward Looking Statements

Cumulative Generation Additions 2003-2006

(% Increase Above 2002 Base)

[CHART]

14 projects in 7 countries representing over 3,400 MW capacity
95%+ long-term contracts

Note: Includes projects under construction

19

Greenfield Example: Bulgaria

Contains Forward Looking Statements

670 MW lignite-fired power plant

•$1.4 billion project cost

•15 year contract with NEK (national utility)

•15 year lignite supply agreement minimizes energy supply risks

•Letter of government support

•€790 million non-recourse financing closed in December with commercial and multilateral banks

•Completing site acquisition and permitting

•Target first quarter 2006 start of construction

•US$300 million+ new revenues expected by 2010

Proposed AES Maritza Plant, Bulgaria
(artist rendition)

[CHART]

20

Platform Expansion Example: Chile

Contains Forward Looking Statements

120 MW San Pedro mixed-fuel power plant

•     $37 million project cost

•      Based on current generation tariff structure

•      Supports peaking, fuel diversification and hydrology risk management strategies

•     Uses diesel and natural gas

•      Expected 2006 start-up

Proposed coal-fired power plants

•      200-250 MW plants at existing Ventanas and Guacolda sites

•      2009 Start-Up

•     Combined capital costs $600 million

•     Participating in Chilean RFP process

Combined platform expansion revenue potential $175 million by 2010

Ventanas Plant, Chile

[GRAPHIC]

21

Rigorous Capital Discipline

		Contains Forward Looking Statements
Strategic Objectives		Capital Allocation Process
Market Knowledge		Project Financial Analysis/Valuation
•      Regional business model •      Leverage existing assets		Independent Review
Execution Skills	Value Creation	Executive Office Approval
•     Leverage operating model •      People excellence		Board of Directors Approval > $25 Million
Risk Management		Project Execution
•      Appropriate hurdle rates
•      Reduce portfolio earnings/cash flow volatility

22

Key Takeaways

		Contains Forward Looking Statements
[GRAPHIC]	•	Global power market offers sizeable growth opportunities
		•      AES well positioned to capitalize on these opportunities
		•      Investment discipline firmly established
[GRAPHIC]	•	Strong AES financial metrics
		•      Margin expansion
		•      ROIC improvement
		•      Growing free cash flow
[GRAPHIC]		•      Improving credit quality
		•      Double digit EPS growth
	•	Incentives aligned with investors
		•      Stock performance (options)
		•      Free cash flow growth (performance units)
		•      Other performance metrics (restricted stock)

23

AES: The power of being global.

[GRAPHIC]

Thank you.

Appendix - Assumptions

Forecasted financial information is based on certain material assumptions.  Such assumptions include, but are not limited to: 1) no unforeseen external events such as wars, depressions, or economic or political disruptions occur; 2) 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; 3) new business opportunities are available to AES in sufficient quantity so that AES can capture its historical market share; 4) no major disruptions or discontinuities occur in GDP, foreign exchange rates, inflation or interest rates during the forecast period; 5) negative factors do not combine to create highly negative low-probability business situations; 6) business-specific risks as described in the Company’s SEC filings do not occur.

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. These benefits will not be fully reflected in the Company’s consolidated financial results.

25

Appendix - Definitions

•Free cash flow – Net cash from operating activities less maintenance capital expenditures. Maintenance capital expenditures reflect property additions less growth capital expenditures.

•Lost Time Accident (LTA) - An incident in which the injured person is kept away from work beyond the day of the incident.

•Near Miss - an incident that occurred but did not result in any injury. In AES, we have expanded this to include unsafe conditions that have been observed.

•O&M – Operation and maintenance.

•Reliability Centered Maintenance (RCM) – An integrated maintenance methodology that optimizes among reactive, interval-based, condition-based, and proactive maintenance practices to take advantage of their respective strengths in order to maximize facility and equipment reliability while minimizing life-cycle costs.

•Return on invested capital (ROIC) - Defined as net operating profit after tax (NOPAT) divided by average capital. NOPAT is defined as income before tax and minority expense plus interest expense less income taxes less tax benefit on interest expense at effective tax rate. Average capital is defined as the average of beginning and ending total debt plus minority interest plus shareholders equity less debt service reserves.

•System Average Interruption Duration Index (SAIDI) – A measure of the cumulative duration of electric service forced and sustained interruptions experienced by customers each year, excluding “force majeure” events. SAIDI is calculated as the total number of customer minutes of sustained interruption divided by the number of customers served.

•System Average Interruption Frequency Index (SAIFI) – A measure of the number of outages per customer per year.  SAIFI is calculated by dividing the total number of customer-sustained interruptions by the number of customers served.

26

Appendix – Summary Financial Information 2002 – September 30, 2005

	Nine Months ending September 30,
	2005		2004		2004		2003		2002
Revenues	$	8,113	$	6,940	$	9,463	$	8,413	$	7,377
Gross margin	2,249		2,076		2,782		2,459		1,968
Income (loss) from continuing operations	453		231		258		311		(2,064		)
Diluted earnings per share from continuing operations	$	0.68	$	0.36	$	0.40	$	0.52	$	(3.83	)
Free cash flow(1)	$	957	$	754	$	1,064	$	1,100	$	774
Maintenance capital expenditures	509		363		507		542		761
Net cash from operating activities	$	1,466	$	1,117	$	1,571	$	1,642	$	1,535

Note: Restated.

(1)Non-GAAP financial measure and is reconciled from net cash from operating activities less maintenance capital expenditures.

27

Appendix – Reconciliation of Adjusted Earnings Per Share

	2005E		2004(2)(3)
Adjusted Earnings Per Share(1)	$	0.83	$	0.58
FAS 133 Mark-to-Market Gains/(Losses)(3)	—		(0.06		)
Currency Transaction Gains/(Losses)	—		(0.06		)
Net Asset Gains/(Losses and Impairments)	—		(0.05		)
Debt Retirement Gains/(Losses)	—		(0.01		)
Total Adjustment Factors	0.02		(0.18		)
Diluted EPS from Continuing Operations	$	0.85	$	0.40
Restatement Impacts (2004)			$	(0.17	)
Diluted EPS from Continuing Operations (before restatement)			$	0.57

(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 currency transaction impacts on the net monetary position related to Brazil, Venezuela, and Argentina, (c) significant asset gains or losses due to disposition transactions and impairments, and (d) early retirement of recourse debt. AES believes that adjusted earnings per share better reflects the underlying business performance of the Company, and are 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, and periodic strategic decisions to dispose of certain assets which may influence results in a given period.  Certain reclassifications have been made to prior-period amounts to conform to the 2004 presentation.

(2)Restated. 2003 adjusted EPS not recalculated.

(3)2004 results include $(0.03) related to Chile debt restructuring costs.

28

Appendix – Return on Invested Capital (ROIC)

	Twelve Months Ending
Net Operating Profit After Tax (1)	September 2005			2004
IBT&MI	$	1,265		$	831
Reported Interest Expense	1,884			1,941
Income Tax Expense (2)	1,312			1,251
Net Operating Profit After Tax	1,837			1,521
Effective Tax Rate (3)	42		%	45		%
ROIC (4)	9.0		%	7.6		%

	September			December			September			December
Total Capital (5)	2005			2004			2004			2003
Total Debt	$	17,946		$	18,588		$	18,515		$	19,638
Minority Interest	1,517			1,279			981			961
Stockholders’Equity	1,421			972			1,572			(68		)
Debt Service Reserves and Other Deposits	(653		)	(737		)	(598		)	(617		)
Total Capital	$	20,231		$	20,102		$	20,470		$	19,914
Average Capital (6)	$	20,351		$	20,008

(1)   Net operating profit after tax,  a non-GAAP financial measure, is defined as income before tax and minority interest expense (IBT&MI) plus interest expense less income taxes less tax benefit on interest expense at the effective tax rate.

(2)   Income tax expense calculated by multiplying the sum of IBT&MI and reported interest expense for the period by the effective tax rate for the period.

(3)   Effective tax rate calculated by dividing reported income tax expense for the period by IBT&MI for the period.

(4)   Return on invested capital (ROIC), a non-GAAP financial measure, is defined as net operating profit after tax divided by average capital calculated over rolling 12 month basis.

(5)   Total capital, a non-GAAP financial measure, is defined as total debt plus minority interest plus shareholders equity less debt service reserves.

(6)   Average capital is defined as the average of beginning and ending total capital over the last twelve months.

29