THE AES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE QUARTERS ENDED September 30, 2002 AND 2001

Quarter Quarter

Ended Ended

($ in millions, except per share amounts) 9/30/02 9/30/01

REVENUES:

Sales and services $2,138 $1,845

OPERATING COSTS AND EXPENSES:

Cost of sales and services 1,548 1,362

Selling, general and

administrative expenses 12 17

Total operating costs and expenses 1,560 1,379

OPERATING INCOME 578 466

OTHER INCOME AND (EXPENSE):

Interest expense, net (473) (382)

Other expense, net (210) (10)

Equity in earnings (loss)

of affiliates

(before income tax) (20) (23)

Nonrecurring severance and transaction costs - (37)

INCOME (LOSS) BEFORE INCOME TAXES

AND MINORITY INTEREST (125) 14

Income tax benefit (46) (1)

Minority interest expense 20 9

INCOME (LOSS) FROM CONTINUING

OPERATIONS (99) 6

Loss from operations of

discontinued components

(net of income taxes of

$3 and $2, respectively) (215) (3)

NET INCOME (LOSS) $(314) $3

DILUTED EARNINGS PER SHARE:

Income (loss) from continuing operations $(0.18) $0.01

Discontinued operations (0.40) -

Total $(0.58) $0.01

Diluted weighted average

shares outstanding

(in millions) 542 537

THE AES CORPORATION --- Supplemental Schedule

Reconciliation of GAAP Net income (loss) before discontinued

operations to Net income excluding Brazil, Argentina and Venezuela

foreign currency effects, effects of FAS No. 133 and nonrecurring

items.

FOR THE QUARTERS ENDED September 30, 2002 AND 2001

($ in millions, except per share amounts)

Quarter ended Quarter ended

9/30/2002 9/30/2001

Amount Amount Amount Amount

per per

share share

Net income (loss)

before discontinued

operations $(99) $(0.18) $6 $0.01

South America foreign

currency transaction

losses, net(1) 182 0.33 82 0.15

Mark to market losses

from FAS No. 133 (2) 9 0.02 39 0.07

Transaction and

severance costs related

to IPALCO transaction - - 24 0.05

Net income from recurring

operations $92 $0.17 $151 $0.28

Diluted weighted average

shares outstanding

(in millions) 542 542

(1) South America foreign currency transaction losses, net, consist of

the following in 2002: a loss of approximately $203 million after

income tax, or $0.37 per share, from Brazil, and a gain of

approximately $21 million after income tax, or $0.04 per share, from

Venezuela. For 2001, South America foreign currency transaction losses

consist of a loss of approximately $82 million after income tax, or

$0.15 per share, from Brazil.

(2) Mark to market losses from FAS No. 133 consist of the following in

2002: a loss of approximately $22 million after income tax, or $0.04

per share, from interest rate instruments, a gain of approximately $8

million after income tax, or $0.01 per share, from foreign exchange

rate instruments, and a gain of $5 million after income tax, or $0.01

per share, from commodity contracts. For 2001, mark to market losses

from FAS No. 133 consist of the following: a loss of approximately $31

million after income tax, or $0.06 per share, from interest rate

instruments, a gain of approximately $1 million after income tax from

foreign exchange rate instruments, and a loss of approximately $9

million after income tax, or $0.01 per share, from commodity

contracts.

THE AES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS ENDED September 30, 2002 AND 2001

Nine Months Nine Months

Ended Ended

9/30/02 9/30/01

($ in millions, except per share amounts)

REVENUES:

Sales and services $6,498 $5,806

OPERATING COSTS AND EXPENSES:

Cost of sales and services 4,782 4,251

Selling, general and

administrative expenses 68 73

Total operating costs and expenses 4,850 4,324

OPERATING INCOME 1,648 1,482

OTHER INCOME AND (EXPENSE):

Interest expense, net (1,285) (1,025)

Other income (expense), net (276) 21

Equity in earnings of

affiliates (before income tax) 36 126

Loss on sale or write-down of

investments (116) -

Nonrecurring severance and

transaction costs - (131)

INCOME BEFORE INCOME TAXES

AND MINORITY INTEREST 7 473

Income tax provision 42 141

Minority interest (income)

expense (11) 65

INCOME (LOSS) FROM CONTINUING

OPERATIONS (24) 267

Loss from operations of

discontinued components

(net of income taxes of $15

and $18, respectively) (373) (38)

INCOME (LOSS) BEFORE CUMULATIVE

EFFECT OF ACCOUNTING CHANGE (397) 229

Cumulative effect of accounting

change (net of income taxes of $72) (346) -

NET INCOME (LOSS) $(743) $229

DILUTED EARNINGS PER SHARE:

Income (loss) from continuing

operations $(0.04) $0.50

Discontinued operations (0.69) (0.07)

Cumulative effect of

accounting change (0.65) -

Total $(1.38) $0.43

Diluted weighted average

shares outstanding (in millions) 537 538

THE AES CORPORATION --- Supplemental Schedule

Reconciliation of GAAP Net income (loss) before discontinued

operations and accounting change to Net income excluding Brazil,

Argentina and Venezuela foreign currency effects, effects of FAS No.

133 and nonrecurring items.

FOR THE NINE MONTHS ENDED September 30, 2002 AND 2001

($ in millions, except per share amounts)

Nine Months Nine Months

ended ended

9/30/2002 9/30/2001

Amount Amount Amount Amount

per per

share share

Net income (loss) before

discontinued operations

and accounting change $(24) $(0.04) $267 $0.50

South America foreign

currency transaction

losses, net (1) 321 0.59 176 0.32

Mark to market (gains)

losses from FAS

No. 133 (2) (90) (0.16) 29 0.05

Loss on sale or

write-down of

investments (3) 104 0.19 - -

Provision for regulatory

decision in Brazil (4) 99 0.18 - -

Transaction and severance

costs related to

IPALCO transaction - - 85 0.16

Net income from recurring

operations $410 $0.76 $557 $1.03

Diluted weighted average

shares outstanding

(in millions) 544 543

(1) South America foreign currency transaction losses, net, consist of the following in 2002: a loss of approximately $298 million after income tax, or $0.55 per share, from Brazil; a loss of approximately $134 million after income tax, or $0.25 per share, from Argentina; and a gain of approximately $111 million after income tax, or $0.21 per share, from Venezuela. For 2001, South America foreign currency transaction losses, net, consist of the following: a loss of approximately $187 million after income tax, or $0.34 per share, from Brazil, and a gain of approximately $11 million after income tax, or $0.02 per share, from Venezuela.

(2) Mark to market gains from FAS No. 133 consist of the following in 2002: a loss of approximately $29 million after income tax, or $0.06 per share, from interest rate instruments, a gain of approximately $38 million after income tax, or $0.07 per share, from foreign exchange rate instruments, and a gain of $81 million after income tax, or $0.15 per share, from commodity contracts. For 2001, mark to market losses from FAS No. 133 consist of the following: a loss of approximately $66 million after income tax, or $0.12 per share, from interest rate instruments, a gain of approximately $29 million after income tax, or $0.05 per share, from foreign exchange rate instruments, and a gain of approximately $8 million after income tax, or $0.02 per share, from commodity contracts.

(3) Amount consists of a loss of $40 million after income tax, or $0.07 per share, resulting from an impairment charge related to an equity method investment in a Latin American telecommunications company, and a loss of $14 million after income tax, or $0.03 per share, related to the loss on sale of an equity method investment in a Latin American telecommunications company. Additionally, amount includes a loss of $50 million after income tax, or $0.09 per share, related to the loss recognized on the sale of CANTV shares.

(4) The Company has recorded the retroactive regulatory decision by the Brazilian regulator depriving AES Sul of amounts the Company believes it was entitled to receive as a reduction in revenue. Pro forma revenues for the nine months ended September 30, 2002, approximate $6.7 billion.

Business Segment Results

AES's business segments, which include Contract Generation, Large Utilities, Competitive Supply and Growth Distribution generated combined income before income taxes (EBT) of $257 million for the third quarter of 2002 as compared to $359 million during the same period last year. On a geographic basis, EBT for the third quarter of 2002 was generated 71% from North America, 6% from South America, 6% from the Caribbean, 11% from Asia and 6% from Europe and Africa.

Contract Generation

($ in millions) 3Q 3Q Variance

2002 2001

Segment revenues $ 611 $ 590 $ 21

% of total revenues 29% 32% (3)%

Operating margin $ 245 $ 152 $ 93

% of segment revenues 40% 26% 14%

EBT $ 142 $75 $ 67

% of total EBT 55% 21% 34%

Contract Generation consists of our power plants located around the world that have contractually limited their exposure to commodity price risks (primarily electricity prices) for a period of at least five years and for 75% or more of their expected output capacity.

For the third quarter of 2002, Contract Generation revenues were $611 million and represented 29% of total revenues for the quarter, an increase of $21 million over 2001. The most significant contributions continued to be from North and South America, which in aggregate comprised 61% of Contract Generation revenue for the quarter as compared to 63% for the third quarter of 2001. Revenues were enhanced with the addition of recently completed contract generation businesses totaling 1,537 mw (added subsequent to the third quarter of 2001), including Ironwood in Pennsylvania (705 mw natural gas) and Red Oak in New Jersey (832 mw natural gas). Revenues also improved at Warrior Run in Maryland, Shady Point in Oklahoma, Tiszai in Hungary, Ebute in Nigeria, Los Mina in the Dominican Republic and Ecogen in Australia. These improvements were offset by declines at Uruguaiana and Tiete in Brazil, the Gener plants in Chile, Southland and Mendota in California, Lal Pir and Pak Gen in Pakistan and Haripur in Bangladesh.

The operating margin (as a percentage of revenues) for our Contract Generation segment showed significant improvement over the third quarter of 2001 at 40% for the third quarter of 2002 as compared to 26% for the third quarter of 2001. Stronger margins and margin percentages arose during the quarter at most contract generation plants in South America, North America, Europe and Africa, with the most significant improvements at Tiete and Uruguaiana in Brazil (due to the discontinuance of electricity rationing in 2002), Warrior Run, Ironwood and Red Oak in the U.S., Kilroot in Northern Ireland, Tiszai in Hungary and Ebute in Nigeria. These improvements were partially offset by declines at Southland and Mendota in California, Lal Pir and Pak Gen in Pakistan and Haripur in Bangladesh.

As a result, Contract Generation delivered $142 million of EBT (or 55% of the total) for the third quarter of 2002, an increase of 89% over the third quarter of 2001 EBT of $75 million (21% of the total). All geographic regions showed increases in EBT within the contract generation segment except for the Caribbean and Asia.

Competitive Supply

($ in millions) 3Q 3Q Variance

2002 2001

Segment revenues $ 437 $ 513 $ (76)

% of total revenues 20% 28% (8)%

Operating margin $ 98 $ 126 $ (28)

% of segment revenues 22% 25% (3)%

EBT $ 29 $ 83 $ (54)

% of total EBT 11% 23% (12)%

Competitive Supply consists primarily of our power plants selling electricity directly to wholesale customers in competitive markets and as a result the profitability of such plants are generally more sensitive to fluctuations in the market price of electricity, natural gas and coal, in particular. During the third quarter, AES completed the sale of NewEnergy, a competitive retail supply business for approximately $260 million. As a result of the sale, NewEnergy's results are included in the income statement for both 2001 and 2002 periods as a discontinued operation and are therefore excluded from the discussion below.

For the third quarter of 2002, revenues for this segment were $437 million and represented 20% of total revenues for the quarter. The most significant contributions continued to be from the competitive markets of the UK and the U.S. that in aggregate comprised 73% of Competitive Supply revenue for the quarter. Competitive market prices declined year over year in Argentina due to the devaluation of the Peso in January 2002 and prices were also lower in California and the UK compared to 2001 and as a result total revenue for the competitive supply segment decreased 15% from the third quarter of 2001. Certain plants showed offsetting revenue improvements including Tiszapalkonya in Hungary and Chivor in Colombia. Year on year increases associated with new businesses in 2002 included Parana in Argentina (845 mw gas) and Delano in California (50 mw gas).

The operating margin (as a percentage of revenues) for our Competitive Supply segment was 22% in the third quarter of 2002, a decrease from 25% in the third quarter of 2001. Improvements in margin and margin percentages were most significant at San Nicolas in Argentina due to export contracts that include a fixed capacity payment in U.S. Dollars, at Deepwater in Texas, Tiszapalkonya and Borsod in Hungary, and in the Caribbean region at Chivor in Colombia and at Panama. These improvements were offset by lower margins at Alicura in Argentina, the New York plants, Whitefield in New Hampshire, Barry and Drax in the UK, and most significantly by margin reductions at Placerita in California which operated minimally during the third quarter of 2002 due to lower prices in California. Overall, operating margin for competitive supply declined 22% to $98 million for the third quarter of 2002.

As a result of lower competitive prices, primarily in California and the UK, Competitive Supply generated $29 million of EBT (or 11% of the total) for the third quarter of 2002, a decrease from the 2001 third quarter EBT of $83 million.

Large Utilities

($ in millions) 3Q 3Q Variance

2002 2001

Segment revenues $ 781 $ 424 $ 357

% of total revenues 37% 23% 14%

Operating margin $ 200 $ 155 $ 45

% of segment revenues 26% 37% (11)%

EBT $ 87 $ 203 $(116)

% of total EBT 34% 56% (22)%

The Large Utilities segment is comprised of our four large integrated utilities that serve nearly 11 million customers in North America, the Caribbean and South America. Businesses include IPALCO in Indiana, EDC in Venezuela along with CEMIG (an equity affiliate) and Eletropaulo in Brazil. During the second quarter of 2002, AES announced the sale of CILCO, a large utility business serving Central Illinois, for an enterprise value of approximately $1.4 billion. As a result of the pending sale, CILCO's results are included in the income statement for both 2001 and 2002 periods as a discontinued operation and are therefore excluded from the discussion below.

For the third quarter of 2002, revenues for this segment were $781 million and represented 37% of total revenues for the quarter. The significant increase in revenues of 84% resulted primarily from consolidating the results of Eletropaulo (serving Sao Paulo, Brazil) beginning in February 2002 when AES acquired control of that business with a 68% voting interest (increased from 49% prior to that date when Eletropaulo was treated as an equity affiliate). Additional revenues from Eletropaulo of $416 million were aided by a slight increase in revenue at IPALCO and offset by a 31% decrease in revenues at EDC to $138 million primarily due to the devaluation of the Bolivar during 2002.

The operating margin was $200 million for the quarter, an increase of 29% over 2001 due to the consolidation of Eletropaulo and an improvement in the operating margin at IPALCO. These increases were offset by a decline in the operating margin at EDC. As a percentage of sales the operating margin for large utilities was 26%, down from 37% for the third quarter of 2001 because of reductions in margin at EDC resulting in part from the devaluation of the Bolivar as well as lower than average segment margins at Eletropaulo during the third quarter of 2002 because of slower than anticipated recovery of electricity demand from the effects of rationing in Brazil that ended in March 2002.

Large Utilities generated $87 million of EBT (or 34% of the total) for the third quarter of 2002, down from the third quarter EBT for 2001 of $203 million (or 56%). The reduction in third quarter 2002 results primarily from reduced contributions (after associated interest costs) from Eletropaulo and EDC because of the factors discussed above.

Growth Distribution

($ in millions) 3Q 3Q Variance

2002 2001

Segment revenues $ 308 $ 317 $ (9)

% of total revenues 14% 17% (3)%

Operating margin $ 48 $ 49 $ (1)

% of segment revenues 16% 15% 1%

EBT $ -- $ (2) $ 2

% of total EBT --% --% --%

Our Growth Distribution segment, serving over 5 million customers, consists of electricity distribution companies that are generally located in developing countries or regions where the demand for electricity is expected to grow at a rate higher than in more developed regions.

For the third quarter of 2002, revenues were $308 million and represented 14% of total revenues for the quarter. The Caribbean represents the most significant contributor representing 45% of growth distribution revenues, while South America represents 29% and Europe and Africa contributing the remaining 26% for the quarter.

Growth Distribution revenues increased at Ede Este in the Dominican Republic, Kievoblenergo and Rivnooblenergo in Ukraine as well as at Sonel in Cameroon. These increases were offset by significant reductions in Argentina because of the devaluation of the Argentine Peso, reductions at Sul because of the devaluation during the quarter of the Brazilian Real, reductions in revenues at our El Salvador distribution businesses and the change to reflect Cesco in India as an equity affiliate in the third quarter of 2001.

The operating margin was $48 million or 16% of revenues as compared with $49 million and 15% of revenues for the third quarter of 2001. Margins improved at Sul in Brazil, Sonel in Cameroon, Telasi in Georgia, Kievoblenergo and Rivnooblenergo in the Ukraine and Ede Este in the Dominican Republic. Despite the reductions in revenue and operating margin arising from the devaluation of the Argentine Peso during 2002, the margin percentages in the Argentine distribution businesses improved slightly as compared to the third quarter of 2001.

As a result, Growth Distribution was break even for the third quarter of 2002, a slight increase from EBT of $(2) million in the third quarter of 2001.

THE AES CORPORATION --- Supplemental Data

-------2001------- -----2002----

1st 2nd 3rd 4th Year 1st 2nd 3rd

Qtr Qtr Qtr Qtr Qtr Qtr Qtr

GEOGRAPHIC - % of Total

North America

Revenues (5) 26% 26% 32% 24% 27% 22% 22% 27%

Income before Taxes (1) 40% 31% 56% 34% 40% 34% 37% 71%

Caribbean (2)

Revenues (5) 26% 25% 24% 20% 24% 18% 17% 17%

Income before Taxes (1) 17% 29% 14% 30% 22% 13% 9% 6%

South America

Revenues (5) 20% 24% 21% 25% 22% 34% 37% 32%

Income before Taxes (1) 34% 36% 21% 24% 29% 26% 26% 6%

Europe/Africa

Revenues (5) 19% 17% 20% 24% 20% 21% 18% 18%

Income before Taxes (1) 5% (2)% 2% 6% 3% 16% 14% 6%

Asia

Revenues (5) 9% 8% 3% 7% 7% 5% 6% 6%

Income before Taxes (1) 4% 6% 7% 6% 6% 11% 14% 11%

SEGMENTS - % of Total

Contract Generation

Revenues (5) 33% 33% 32% 32% 32% 29% 28% 29%

Operating Margin (3) 39% 37% 32% 49% 40% 39% 43% 41%

Income before Taxes (1) 35% 22% 21% 64% 34% 45% 45% 55%

Competitive Supply

Revenues (5) 27% 23% 28% 24% 26% 21% 19% 20%

Operating Margin (3) 28% 19% 26% 16% 22% 15% 16% 17%

Income before Taxes (1) 17% 4% 23% - 12% 10% 13% 11%

Large Utilities

Revenues (5) 20% 23% 23% 19% 21% 34% 38% 37%

Operating Margin (3) 28% 35% 32% 20% 28% 34% 33% 34%

Income before Taxes (1) 48% 71% 56% 12% 49% 34% 37% 34%

Growth Distribution Businesses

Revenues (5) 20% 21% 17% 25% 21% 16% 15% 14%

Operating Margin (3) 5% 9% 10% 15% 10% 12% 8% 8%

Income before Taxes (1) - 3% - 24% 5% 11% 5% -

FINANCIAL HIGHLIGHTS - ($ in millions, except Total Assets in

billions)

---------------2001------------

1st 2nd 3rd 4th Year

Qtr Qtr Qtr Qtr

Revenues(5) $2,084 $1,877 $1,845 $1,950 $7,756

---------2002-------

1st 2nd 3rd

Qtr Qtr Qtr

Revenues(5) $2,248 $2,272 $2,138

-------2001------- -----2002----

1st 2nd 3rd 4th Year 1st 2nd 3rd

Qtr Qtr Qtr Qtr Qtr Qtr Qtr

Gross Margin Percentage 29% 25% 26% 33% 28% 31% 26% 28%

-------2001-------

1st 2nd 3rd 4th Year

Qtr Qtr Qtr Qtr

Income before Taxes (1) $479 $421 $359 $323 $1,582

-----2002----

1st 2nd 3rd

Qtr Qtr Qtr

Income before Taxes (1) $392 $345 $257

-------2001------- -----2002----

1st 2nd 3rd 4th Year 1st 2nd 3rd

Qtr Qtr Qtr Qtr Qtr Qtr Qtr

Net Income Excluding

Extraordinary and

Other Items (4) $225 $181 $151 $128 $685 $176 $142 $92

Total Assets

(billions) $36 $36 $36 $37 $37 $40 $39 $37

Deprec./Amort. $181 $186 $198 $196 $761 $200 $202 $198

(1) Income before taxes excludes the Corporate and Business

Development segment. The following items are included in the Corporate

and Business Development segment: corporate interest, other corporate

costs, business development expenses, Brazilian affiliates foreign

currency effects, Argentine affiliates foreign currency effects,

Venezuelan affiliates foreign currency effects, effects of FAS No.

133, nonrecurring items, discontinued operations and cumulative effect

of accounting change.

(2) Includes Venezuela and Colombia.

(3) Operating Margin is revenues reduced by cost of sales,

depreciation and amortization and other operating expenses.

(4) Net income excludes Brazilian affiliates foreign currency effects,

Argentine affiliates foreign currency effects, Venezuelan affiliates

foreign currency effects, effects of FAS No. 133, nonrecurring items,

discontinued operations and cumulative effect of accounting change.

(5) Revenues and amounts calculated using revenues for the second

quarter of 2002 exclude the effect of the provision related to the

Brazilian regulatory decision recorded by AES Sul.

THE AES CORPORATION

CONSOLIDATED BALANCE SHEETS

September 30, 2002 AND December 31, 2001

($ in millions) September 30, 2002 December 31, 2001

Assets:

Current assets:

Cash and cash

equivalents, including

restricted cash of

$371 and $357,

respectively $1,346 $1,279

Short term investments 305 215

Accounts receivable, net

of reserves of $352 and $240,

respectively 1,292 1,313

Inventory 503 562

Receivable from affiliates 10 10

Deferred income taxes 338 244

Prepaid expenses and

other assets 948 602

Current assets of

discontinued operations 300 467

Total current assets 5,042 4,692

Property, Plant and Equipment:

Land 697 567

Electric generation

and distribution assets 21,624 20,173

Accumulated depreciation (4,102) (3,177)

Construction in progress 4,683 4,412

Property, plant and

equipment, net 22,902 21,975

Other assets:

Deferred financing costs, net 416 437

Project development costs 68 66

Investment in and advances

to affiliates 1,092 3,100

Debt service reserves and

other deposits 378 472

Goodwill, net 2,040 2,408

Long-term assets of

discontinued operations 2,080 2,752

Other assets 2,548 910

Total other assets 8,622 10,145

Total Assets $36,566 $36,812

Liabilities & Stockholders' Equity

Current liabilities:

Accounts payable $1,085 $736

Accrued interest 443 281

Accrued and other liabilities 1,159 799

Current liabilities of

discontinued operations 553 642

Recourse debt-current portion 1,544 488

Non-recourse debt-current

portion 3,400 1,982

Total current liabilities 8,184 4,928

Long-term liabilities

Recourse debt 4,180 4,913

Non-recourse debt 14,027 13,789

Deferred income taxes 1,650 1,695

Long-term liabilities of

discontinued operations 1,252 1,413

Other long-term liabilities 2,978 2,027

Total long-term liabilities 24,087 23,837

Minority interest, including

discontinued operations

of $41 and $124, respectively 904 1,530

Company obligated convertible

mandatorily redeemable preferred

securities of subsidiary trusts

holding solely junior

subordinated debentures of AES 978 978

Stockholders' equity:

Common stock 5 5

Additional paid-in capital 5,268 5,225

Retained earnings 2,067 2,809

Accumulated other

comprehensive loss (4,927) (2,500)

Total stockholders' equity 2,413 5,539

Total Liabilities and

Stockholders' Equity $36,566 $36,812

THE AES CORPORATION

CAPITAL RESOURCES AND OTHER BALANCE SHEET DATA

($ in billions)

September 30, December 31,

Capitalization: 2002 2001

Recourse debt $5.72 $5.40

Non-recourse debt 17.43 15.77

Total debt 23.15 21.17

Preferred Securities 0.98 0.98

Minority Interest 0.90 1.53

Stockholders' equity 2.41 5.54

Total capitalization $27.44 $29.22

Selected Balance Sheet Data by Geographic Region:

Property, Plant Total Non-recourse

September 30, 2002 & Equipment Assets Debt

North America 29% 22% 25%

Caribbean 22% 18% 18%

South America 18% 25% 32%

Europe/Africa 23% 20% 18%

Asia 8% 7% 7%

Discontinued operations - 6% -

Corporate - 2% -

December 31, 2001

North America 29% 21% 28%

Caribbean 22% 18% 20%

South America 20% 27% 28%

Europe/Africa 23% 18% 19%

Asia 6% 6% 5%

Discontinued operations - 9% -

Corporate - 1% -

Selected Balance Sheet Data by Line of Business:

Property, Plant Total Non-recourse

September 30, 2002 & Equipment Assets Debt

Contract Generation 37% 35% 38%

Competitive Supply 33% 25% 23%

Large Utilities 24% 25% 32%

Growth Distribution Businesses 6% 7% 7%

Discontinued operations - 6% -

Corporate - 2% -

December 31, 2001

Contract Generation 37% 33% 40%

Competitive Supply 34% 25% 25%

Large Utilities 19% 20% 26%

Growth Distribution Businesses 10% 12% 9%

Discontinued operations - 9% -

Corporate - 1% -

The AES Corporation

Historical Parent Operating Cash Flow and Interest Coverage

Information Parent Operating Cash Flow reflects cash payments to the

holding company (the "Parent Company") from its subsidiary operating

businesses (consisting of dividends, consulting and management fees,

tax sharing payments and interest income), less Parent operating

expenses. Parent Operating Cash Flow is measured after payment of

principal and interest on non-recourse debt as well as maintenance

capital expenditures at those businesses. As a result, it represents

the cash flow that is available to service the Parent Company's

liquidity needs, including debt service.

For more detailed information regarding Parent Operating Cash

Flow, see the notes below.

Parent Only Data 12 Months Ended

(Last Four Quarters): September September

30, 30,

(actual $ in millions) 1998 1999 2000 2001 2002 2001

Parent Operating

Cash Flow (1) $360 $403 $871 $1,163 $1,236 $1,160

Parent Interest

Charges (2) $118 $164 $216 $391 $471 $338

Interest Coverage

Ratio (3) 3.05x 2.46x 4.03x 2.97x 2.62x 3.43x

Parent Operating

Cash Flow (1) 360 403 871 1,163 1,236 1,160

less: Development

Costs and

Corporate Taxes (74) (48) (103) (112) (56) (115)

less: Total Interest

Costs (including

SELLs & Trust

Preferred) (150) (198) (415) (563) (545) (433)

Parent Free

Cash Flow (4) $136 $157 $353 $488 $635 $612

Parent Operating Cash Flow by Region:

North America 48% 60% 39% 54% 65% 43%

Caribbean 6% 7% 29% 17% 9% 22%

Asia 1% 6% 4% 8% 12% 6%

South America 25% 8% 17% 12% 4% 20%

Europe 20% 19% 11% 9% 10% 9%

Parent Operating Cash Flow by Line of Business

Contract Generation 67% 67% 44% 39% 59% 36%

Large Utilities 14% 3% 39% 31% 23% 39%

Competitive Supply 13% 24% 12% 28% 15% 22%

Growth Distribution

Businesses 6% 6% 5% 2% 3% 3%

(Quarterly):

(actual $ in millions) Q4 Q1 Q2 Q3 Q3

2001 2002 2002 2002 2001

Parent Operating Cash Flow (1) $390 $331 $263 $252 $335

Parent Interest Charges (2) $120 $116 $105 $130 $112

Interest Coverage Ratio (3) 3.25x 2.85x 2.50x 1.94x 2.99x

Parent Operating Cash Flow (1) 390 331 263 252 335

less: Development Costs and

Corporate Taxes (24) (14) (11) (7) (25)

less: Total Interest Costs

(including SELLs & Trust

Preferred) (115) (136) (140) (154) (112)

Parent Free Cash Flow (4) $251 $181 $112 $91 $198

(Last Four Quarters):

(actual $ in millions) December March June September September

31, 31, 30, 30, 30,

2001 2002 2002 2002 2001

Parent Operating

Cash Flow (1) $1,163 $1,314 $1,319 $1,236 $1,160

Parent Interest

Charges (2) $391 $428 $453 $471 $338

Interest Coverage

Ratio (3) 2.97x 3.07x 2.91x 2.62x 3.43x

Note 1:

(1) Our Parent Operating Cash Flow, formerly titled "Parent EBITDA",

definition may differ from that, or similarly titled measures, used by

other companies. Parent Operating Cash Flow is not a substitute for

cash flows from operating activities as defined by generally accepted

accounting principles, or as an indicator of operating performance or

as a measure of liquidity. Parent Operating Cash Flow includes the

following amounts (determined without duplication) received in cash by

the Parent Company from operating subsidiaries and affiliates less

Parent operating expenses:

(A) Dividends.

(B) Consulting and management fees.

(D) Interest and other distributions paid during the period with

respect to cash and other temporary cash investments.

Parent Operating Cash Flow does not include the following cash

payments made to the Parent Company by its subsidiaries and

affiliates:

(A) Returns of invested capital.

(B) Repayments of debt principal.

issuance of letters of credit for the benefit of subsidiaries or

affiliates.

(2) Parent Interest Charges include interest payments both expensed

and capitalized. It excludes distributions paid for trust preferred

securities. This definition may differ from that, or similarly titled

measures, used by other companies.

(3) Parent Interest Coverage Ratio is defined as the ratio of Parent

Operating Cash Flow for such period to Parent Interest Charges for

such period.

(4) Parent Free Cash Flow is defined as Parent Operating Cash Flow

less development costs, taxes, and Total Interest costs (including

interest on SELLs and trust preferred securities dividends).

The AES Corporation

Forecasted Parent Operating Cash Flow and Liquidity 2002-2003

In the tables below, historical (actual) information is denoted

with an "A" next to the year and forecasted information is denoted

with an "F" next to the year.

Parent Only Data

($ in millions) Q1 Q2 Q3 Q4 YE

2002 A 2002 A 2002 A 2002 F 2002 F

Parent Operating

Cash Flow (1) $331 $263 $252 $224 $1,070

Parent Interest

Charges (2) $116 $105 $130 $107 $458

Interest Coverage

Ratio (3) 2.85x 2.50x 1.94x 2.09x 2.34x

Parent Operating Cash Flow by Region:

North America 58% 46% 66% 65% 59%

Caribbean 4% 20% 2% 3% 7%

Asia 13% 13% 22% 21% 17%

Europe 10% 15% 8% 8% 10%

South America 15% 6% 2% 3% 7%

Parent Operating Cash Flow by Line of Business

Contract Generation 54% 61% 54% 73% 60%

Large Utilities 31% 34% 30% 15% 28%

Competitive Supply 14% 4% 15% 9% 11%

Growth Distribution 1% 1% 1% 3% 1%

Parent Sources & Uses

Q1 Q2 Q3 Q4 YE

($ in millions) 2002 A 2002 A 2002 A 2002 F 2002 F

Sources

Distributions from

Subsidiaries $340 $269 $268 $246 $1,123

less: Corporate Overhead (9) (6) (16) (22) (53)

Parent Operating

Cash Flow (1) 331 263 252 224 1,070

less: Development

Costs and

Corporate Taxes (14) (11) (7) (12) (44)

less: Total Interest

Costs (including

SELLs & Trust Preferred) (136) (140) (154) (134) (564)

Parent Free Cash Flow (4) 181 112 91 78 462

Agreed Asset Sales - - 251 - 251

Additional Asset Sales - - - - -

Project Financing Proceeds - 239 - - 239

Bank Loan Renewals

(net of transaction

costs) (5) - - - 1,570 1,570

Bond Exchange (5) - - - 263 263

Beginning Liquidity 565 285 359 395 565

Total Sources $746 $636 $701 $2,306 $3,350

Uses

Bank Loan Repayments 63 $63 $225 $- $351

Bank Loan Renewals - - - 1,620 1,620

Bond Exchange (5) - - - 263 263

Bond Repayments (5) - - - 188 188

Committed Investments 398 214 81 77 770

Ending Liquidity 285 359 395 158 158

Total Uses $746 $636 $701 $2,306 $3,350

Note 2:

(1) Please see Note 1 for definition.

(2) Please see Note 1 for definition.

(3) Please see Note 1 for definition.

(4) Please see Note 1 for definition.

(5) The forecast includes the following refinancing transaction:

(A) "Bank Loan Renewals (net of transaction costs)" includes

the following: $850 million Variable rate revolving bank loan

due 2003, $425 million Term loan due 2003, $262.5 million EDC

SELLs due 2003 , (pound)52.2 million letter of credit due

2004.

(B) "Bond Exchange" includes $112.5 million of $300 million

8.75% Senior notes due December 2002, and $150 million of $200

million Remarketable or Redeemable Securities (ROARS)

remarketable in June 2003. These calculations assume a 75%

participation rate for the bond exchange and that the December

2002 tendered securities are exchanged for 50% cash and 50%

new secured notes, while the ROARS tendered securities are

exchanged 100% for the new secured notes.

notes due December 2002 repaid ($112.5 million in November

2002, $75 million at maturity in December 2002).