The AES Corporation, including all its subsidiaries and affiliates are collectively referred to herein as “AES”, “the Company”, “us” or “we”.

Restatement of 2002 and 2003 Annual Financial Statements

In connection with the annual audit of our 2004 consolidated financial statements, we determined that our financial statements for the years ended December 31, 2003 and 2002 as previously filed needed to be restated. Based upon management’s review, it has been determined that these errors were inadvertent and unintentional. The errors relate to the following areas:

A. Deferred taxes

During the Company’s 2004 year end closing process, we discovered certain accounting errors under U.S. generally accepted accounting principles related to the recording of deferred taxes associated with Eletropaulo, one of our Brazilian subsidiaries. The reconciliation of income tax accounts with Eletropaulo led to a more comprehensive reconciliation of our consolidated income tax balances with certain of our other foreign subsidiaries. As a result of this process we discovered additional discrepancies between the components of the deferred tax balances computed by certain foreign subsidiaries and those maintained by the Company on a consolidated basis. As a result of this review process, the Company recorded $17 million and $18 million of additional deferred tax expense in 2001 and 2000, respectively, as an adjustment to accumulated deficit as of January 1, 2002, $8 million additional deferred tax expense in 2002 and $10 million in 2003. In addition, certain income tax amounts were reclassified between current tax payable, deferred tax payable and minority interest.

Additionally, we identified an error in the original entry to record deferred taxes related to the minimum pension liability recorded by Eletropaulo and reflected in the Company’s 2002 balance sheet at the time we obtained a controlling interest in that entity and began to consolidate Eletropaulo’s financial statements. To correct this error we recorded a $7 million decrease in the pension liability, a $36 million decrease in accumulated other comprehensive loss and $29 million increase in goodwill impairment expense. The adjustments would have originally been recorded against Eletropaulo’s opening goodwill balance. However, goodwill was written off at the end of 2002 as a result of impairment of Eletropaulo’s goodwill.

B. Minority interest

During the Company’s 2004 year end closing process, we discovered an error in the conversion of the minority interest payable to U.S. dollars related to two of our investments—Eletropaulo and SONEL, our Cameroonian utility subsidiary. The impact of the restatement adjustment is as follows:

· Increase in minority interest payable by $7 million in 2002 and $69 million in 2003

· Increase in accumulated other comprehensive loss by $7 million in 2002 and $69 million in 2003

C. Discontinued operations

As part of the year end closing process, it was discovered that the Company had not written off certain liabilities and the remaining portions of changes in derivative fair value—a component of accumulated other comprehensive loss related to hedge positions, for certain businesses classified as discontinued operations. After analyzing the appropriate timing of these transactions, it was determined that these amounts should have been recorded when the related business was impaired.

The impact off these restatement adjustments resulted in an increase in net loss from operations of discontinued businesses of $13 million in 2002 and $7 million in 2003.

Restatement of 2004 Quarterly Financial Statements

In the first quarter of 2005, the Company completed an evaluation with the Corporate Finance Division of the Securities and Exchange Commission (SEC) of the accounting treatment of our Brazilian debt restructuring transaction completed in the first quarter of 2004. As a result of this evaluation, the Company has adjusted a portion of the equity section of the consolidated balance sheet. There was no net change to shareholders’ equity as a result of this adjustment.

The Company previously recognized as a loss, a pro-rata share of accumulated other comprehensive loss (i.e. currency translation losses and minimum pension liability), related to its investment in Brazil that was diluted through the issuance of shares by AES’s Brazilian holding company to a third party in exchange for the forgiveness of debt. This pro-rata “loss” was recorded in Additional Paid-in Capital (APIC) along with the gain from the issuance of shares, the latter recorded in accordance with our previously established accounting policy pertaining to gains or losses resulting from subsidiary sales of stock as permitted under SEC Staff Accounting Bulletin 51. Recognizing components of accumulated other comprehensive income is delayed until such time as the underlying investment is sold by the parent and such gains or losses would then be recognized in the income statement.

Therefore, the Company has reversed the accumulated other comprehensive loss write-off and given effect to this treatment in the Company’s December 31, 2004 audited balance sheet. The net adjustment resulted in a $855 million increase in accumulated other comprehensive loss and an offsetting $855 million increase in APIC. This adjustment did not affect the Company’s consolidated statements of operations or the consolidated statements of cash flows. See Note 24 for the adjustments to our 2004 quarterly financial information for the effect of the correction of this error as if the adjustment was recorded at March 31, 2004.

ITEM 1. BUSINESS

Overview

The AES Corporation is a global power company with operations in 27 countries on five continents. A Delaware corporation formed in 1981, AES is a holding company that, through its subsidiaries, operates in two principal businesses, generation and utilities. The generation business is comprised of our contract generation and competitive supply segments and the utilities business is comprised of our large utilities and growth distribution segments. The Company’s generating assets include interests in 120 facilities in 25 countries totaling approximately 44 gigawatts of capacity. AES’s electricity distribution networks sell approximately 88,890 gigawatt hours per year.

We believe that the generation and distribution of electricity are essential services required in all industrialized societies. AES is committed to helping meet the world’s need for electricity by supplying power from our existing portfolio, as well as by growing our portfolio through the development and construction of new power plants and through selective acquisitions. AES believes that being a large participant in the global power sector gives us the best chance to accomplish our goals. Some of the benefits of being a large organization are the ability to take advantage of scale and to have the resources to develop the best operating and management practices, which will increase overall Company efficiency and productivity. By maintaining a substantial geographic footprint, the Company is positioned to pursue opportunities in those markets with the most favorable characteristics for new investment, namely those having a large and growing need for power. We target specific countries or major geographic regions as areas of primary focus, and seek to build sufficient knowledge and experience in order to increase our ability to successfully compete, and ultimately grow our businesses, in those targeted markets. We believe that this approach also allows us to more efficiently identify and manage the risks inherent in our business.

AES Operates Two Principal Businesses: Generation and Utilities

We build, acquire, own and operate power generation and electricity distribution facilities worldwide. To enhance operational efficiencies across the company, we are organized along two principal lines of business: generation and utilities. The generation business unit encompasses our contract generation and competitive supply segments. These segments generate and sell electricity and related products to utilities or other wholesale or commercial buyers. Performance drivers for these businesses include plant reliability and fuel and fixed cost management. Growth is largely tied to securing new power purchase agreements and expanding capacity. The contract generation and competitive supply segments contributed 37% and 11% of revenues, respectively, for the year 2004.

The utilities business unit encompasses our large utilities and growth distribution segments. These segments sell electricity to residential, business and municipal customers, typically through integrated transmission and distribution systems. Performance drivers for these businesses include providing reliable service, managing working capital, obtaining tariff adjustments and appropriate regulatory treatment for new investments and, in developing countries, reduction of commercial and technical losses. The large utilities and growth distribution segments contributed 38% and 14% of revenues, respectively for the year 2004. The revenues and earnings growth of both our generation and utility businesses vary with changes in electricity demand.

Operating Segments

See Note 21 to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional financial information about our business segments as well as information about our foreign and domestic operations.

Contract Generation

We own and operate plants that sell electricity and related products to utilities or other wholesale customers under long-term contracts. Our contract generation line of business is comprised of generation facilities that have contractually limited their exposure to commodity price risks, primarily electricity price volatility and frequently volume risk, by entering into power sales agreements of five years or longer for 75% or more of their output capacity. The remaining terms of these agreements range from 1 to 26 years. These facilities also generally enter into long-term agreements for most of their fuel supply requirements, or they may enter into tolling or “pass through” arrangements in which the counter-party directly assumes the risks associated with providing the necessary fuel and then markets the generated power. Through these types of contractual agreements, our contract generation businesses generally produce more predictable cash flows and earnings. The degree of predictability varies from business to business based on the degree to which their exposure is limited by the contracts they have negotiated with their buyers.

Our contract generation segment is comprised of our interests in 70 power generating facilities totaling approximately 24 gigawatts of capacity located in 19 countries. This includes our minority interests in seven power generation facilities totaling over four gigawatts of capacity, and one under construction. Of the more than 22 gigawatts of current operating capacity, 51% is derived from gas-fired facilities, 28% from coal-fired facilities, 13% from hydro facilities, 7% from oil-fired facilities, and less than 1% from biomass facilities.

In most of our contract generating businesses, a single customer contracts for most or all of a particular facility’s generated power. To reduce the resulting counter-party credit risk, we seek to contract with creditworthy customers. We also seek to obtain sovereign government guarantees of the customer’s obligations. However, we do business in many countries with customers who are not investment grade rated. We believe that locating our plants in different geographic areas helps to mitigate the effects of regional economic downturns, thereby offsetting some of the risks associated with operating in less

developed countries. Additionally, in countries in which we own distribution companies, we will seek to contract our generation businesses with the distribution companies that we control.

Certain of our subsidiaries and affiliates (domestic and non-U.S.) are in various stages of developing and constructing new power plants (known as “Greenfield” power plants or “Greenfield”). Some have signed long-term contracts or made similar arrangements for the sale of electricity. During 2004, we completed the construction of the second phase of Ras Laffan, in Qatar, a combined cycle facility for an additional 400 MW of installed capacity. We currently have one power generation facility under construction in Spain, totaling approximately 1,200 MW of capacity. As of December 31, 2004, capitalized costs for this project under construction were approximately $392 million. We currently believe that these costs are recoverable but can provide no assurance that we will complete this project and/or that this project will reach commercial operation.

In the contract generation segment, we face most of our competition prior to the execution of a power sales agreement during the development phase of a project. Our competitors in this business include other independent power producers, equipment manufacturers, as well as various utilities and their affiliates. During the operational phase, we traditionally have faced limited competition in this segment due to the long-term nature of the generation contracts. However, since competitive power markets have been introduced and new market participants have been added, we will encounter increased competition in attracting new customers and maintaining our current customers as our existing contracts expire.

Competitive Supply

AES owns and operates plants that sell electricity to wholesale customers in competitive markets. These plants typically sell into our power pools under short-term (less than one year) contracts or into daily spot markets. Demand can be affected by weather, electricity transmission constraints, fuel prices and competition. This business segment offers more varied sales, earnings, and cash flow.

In contrast to the contract generation segment discussed above, these facilities generally sell less than 75% of their output under long-term contracts. The prices at which these facilities sell electricity under short-term contracts and in the spot electricity markets are unpredictable and can be volatile. In addition, our operational results in this segment are more sensitive to the impact of market fluctuations in the price of natural gas, coal, oil and other fuels. These businesses also have more significant needs for working capital or credit to support their operations than our businesses in the contract generation segment.

Our competitive supply segment is comprised of 29 power generation facilities totaling over 13 gigawatts of capacity located in 8 countries. Of the total 13 gigawatts of current operating capacity, 60% is derived from coal-fired facilities, 7% from gas-fired facilities, 29% from hydro facilities, 2% from oil facilities, 1% from petroleum coke facilities and less than 1% from biomass facilities. In 2004, we completed the refurbishment of the Bayano facility in Panama, which added an additional 12 MW of capacity.

The absence of long-term contracts makes future production volumes uncertain, which in turn makes it difficult to forecast the amount of fuel needed to support those volumes. As a result, competitive supply businesses are exposed to volume risk in connection with their purchases of natural gas, coal and other raw materials. Where appropriate, we have hedged a portion of our financial performance against the effects of fluctuations in energy commodity prices using such strategies as commodity forward contracts, futures, swaps and options.

Although we maintain credit policies with regard to our counterparties, there can be no assurance that ultimately they will be able to fulfill their contractual obligations. Volatility in electricity markets in the United States causes increases in credit risk, a decline in the number and quality of market participants with strong credit ratings, and considerably less liquidity in energy markets.

We compete in this segment with numerous other independent power producers, energy marketers and traders, energy merchants, transmission and distribution providers, and retail energy suppliers. Competitive factors in this segment include reliability, operational cost and third party credit requirements.

Large Utilities

Our large utility segment consists of electric utilities that are of significant size and maintain a monopoly franchise within a defined service area. In most cases our large utilities combine generation, transmission and distribution capabilities. We own and operate three large electric utilities: Indianapolis Power & Light Company (“IPL”) in the U.S.; Eletropaulo Metropolitana Electricidade de São Paulo SA (“Eletropaulo”) in Brazil; and CA La Electricidad de Caracas (“EDC”) in Venezuela. These utilities sell electricity under regulated tariff agreements and each have transmission and distribution capabilities; IPL and EDC also have generation plants. We have a 100% common equity interest in IPL through our ownership of IPALCO Enterprises, Inc. (“IPALCO”), a 32% economic ownership interest in Eletropaulo after the January 2004 restructuring and an 86% common equity interest in EDC. Our large utilities aggregate approximately 6 gigawatts of generation capacity and serve over 6.5 million customers, with annual sales of 59,505 gigawatt hours. Our large utilities are subject to extensive regulation at multiple governmental levels relating to ownership, marketing, delivery and pricing of electricity and gas, with a focus on protecting customers. Large utility revenues result primarily from retail electricity sales to customers under regulated tariff or concession agreements and, to a lesser extent, from contractual agreements of varying lengths and provisions.

IPALCO is a holding company and its principal subsidiary is Indianapolis Power & Light Company (“IPL”). IPL is engaged in generating, transmitting, distributing and selling electric energy to approximately 460,000 customers in the city of Indianapolis and neighboring areas within the state of Indiana. IPL owns and operates four generation facilities. Two generating facilities are primarily coal-fired plants. The third facility has a combination of units that use coal (base load capacity) and natural gas and/or oil (peaking capacity). The fourth facility is a small peaking station that uses gas-fired combustion turbine technology. IPL’s net generation winter capability is 3,370 MW and net summer capability is 3,252 MW. We acquired IPALCO in March 2001.

Eletropaulo has served the São Paulo, Brazil area for over 100 years and, with over five million customers, is the largest electricity distribution company in the Americas in terms of customers. Eletropaulo’s concession contract with the Brazilian National Electric Energy Agency (“ANEEL”), the government agency responsible for regulating the Brazilian electric industry, entitles Eletropaulo to distribute electricity in its service area for 30 years from the date of our acquisition. Eletropaulo’s service territory consists of 24 municipalities in the greater São Paulo metropolitan area and adjacent regions that account for approximately 15% of Brazil’s GDP, covering 5 million customers or 44% of the population in the State of São Paulo, Brazil.

EDC was founded in 1895 and is the largest private-sector electric utility in Venezuela serving approximately one million customers. EDC generates, transmits and distributes electricity to customers in metropolitan Caracas and its surrounding area. EDC’s distribution area covers 5,176 square kilometers. EDC has an installed generating capacity of 2,616 MW.

Historically, energy utilities have operated within specific service territories where they were essentially the sole suppliers of electricity services. As a result, competition was limited to alternative means of energy such as gas and fuel. However, in certain locations, the large utilities business faces increased competition as a result of changes in laws and regulations which allow wholesale and retail services to be provided on a competitive basis. We can provide no assurance that deregulation will not adversely affect our large utilities’ future operations, cash flows and financial condition.

Growth Distribution

Our growth distribution segment is comprised of smaller distribution facilities in developing countries where electricity demand is expected to grow faster than in more developed markets. These facilities serve smaller service areas and generally need substantial infrastructure investments. Electricity sales are made under regulated tariff agreements or under existing regulatory laws and provisions. The conditions of the business environment in a developing nation also provide for significant opportunities to implement operating improvements that may stimulate growth in earnings and cash flow performance. These growth rates may be greater than those typically achievable in our other business segments. Many of these businesses face challenges unique to developing countries including outdated equipment, significant electricity theft-related losses, cultural problems associated with customer safety and non-payment, emerging economies, and potentially less stable governments or regulatory regimes. Distribution facilities included in this segment may include generation, transmission, distribution or related services companies. The results of operations of our growth distribution business are sensitive to changes in economic growth and regulation, abnormal weather conditions affecting each local market, as well as the success of the operational changes that have been implemented.

We derive growth distribution revenues from the distribution and sale of electricity pursuant to the provisions of long-term electricity sale concessions granted by the appropriate governmental authorities, or in some locations, under existing regulatory laws and provisions. One of our distribution facilities, located in Cameroon, SONEL, is “integrated,” in that it also owns transmission lines and electric generation facilities. The facilities currently in this segment have approximately 935 gross MW of generation and serve more than 4.7 million customers with sales of 26,886 gigawatt hours in Argentina, Brazil, Cameroon, Dominican Republic, El Salvador and Ukraine.

The businesses in the growth distribution segment face relatively little direct competition due to significant barriers to entry which are present in these markets. In this segment, we primarily face competition in our efforts to acquire businesses. We compete against a number of other participants, some of which have greater financial resources, have been engaged in growth distribution related businesses for periods longer than we have, and have accumulated more significant portfolios. Relevant competitive factors include financial resources, governmental assistance, and access to non-recourse financing and regulatory restrictions.

Facilities

The following tables present information with respect to the facilities in each of our four business segments. The amounts under “Gross MW” and “Approximate Gigawatt Hours” represent the gross amounts for each facility without regard to our percentage of ownership interest in the facility.

Contract Generation
(As of December 31, 2004)

Generation Facilities	Dominant Fuel	Year of Acquisition or Commencement of Commercial Operations		Geographic Location	Gross MW	AES Equity Interest (Percent, Rounded)
*North America*
Beaver Valley	Coal		1987	USA	125		100
Central Valley—Delano	Biomass		2001	USA	50		100
Central Valley—Mendota	Biomass		2001	USA	25		100
Hawaii	Coal		1992	USA	203		100
Hemphill	Biomass		2001	USA	14		67
Ironwood	Gas		2001	USA	705		100
Kingston	Gas		1997	Canada	110		50
Placerita	Gas		1989	USA	120		100
Red Oak	Gas		2002	USA	832		100
Shady Point	Coal		1991	USA	320		100
Southland—Alamitos	Gas		1998	USA	1,986		100
Southland—Huntington Beach	Gas		1998	USA	904		100
Southland—Redondo Beach	Gas		1998	USA	1,334		100
Thames	Coal		1990	USA	181		100
Warrior Run	Coal		2000	USA	180		100
*Caribbean*
Andres	Gas		2003	Dominican Republic	304		100
Itabo (5 plants)(1)	Coal/Oil		2000	Dominican Republic	586		25
Los Mina	Gas		1997	Dominican Republic	210		100
Mérida III	Gas		2000	Mexico	495		55
Puerto Rico	Coal		2002	USA	454		100
*South America*
Gener—Centrogener (7 plants)(2)	Hydro/ Coal/Oil		2000	Chile	682		99
Gener—Electrica de Santiago (2 plants)(3)	Gas/Oil		2000	Chile	479		89
Gener—Energia Verde (3 plants)(4)	Biomass/ Diesel		2000	Chile	42		99
Gener—Guacolda	Coal		2000	Chile	304		49
Gener—Norgener	Coal		2000	Chile	277		99
Gener—TermoAndes	Gas		2000	Argentina	643		99
Tietê (10 plants)(5)(6)	Hydro		1999	Brazil	2,650		24
Uruguaiana(6)	Gas		2000	Brazil	639		46
*Europe/Africa*
Bohemia	Coal		2001	Czech Republic	140		100
Borsod	Biomass		1996	Hungary	96		100
Ebute	Gas		2001	Nigeria	306		95

Elsta	Gas	1998	Netherlands	630	50
Kilroot	Coal/Oil	1992	UK	520	97
Tisza II	Oil/Gas	1996	Hungary	860	100
*Asia*
Aixi	Coal	1998	China	51	71
Barka	Gas	2003	Oman	427	35
Chengdu	Gas	1997	China	48	35
Cili	Hydro	1994	China	26	51
Hefei	Oil	1997	China	115	70
Jiaozuo	Coal	1997	China	250	70
Kelanitissa	Diesel	2003	Sri Lanka	168	90
Lal Pir	Oil	1997	Pakistan	365	55
OPGC	Coal	1998	India	420	49
Pak Gen	Oil	1998	Pakistan	365	55
Ras Laffan	Gas	2004	Qatar	756	55
Wuhu	Coal	1996	China	250	25
Yangcheng	Coal	2001	China	2,100	25
			Total	22,747

Under Construction

Generation Facilities

Dominant
Fuel

Commencement
of Commercial
Operations

Geographic
Location

Gross
MW

AES Equity Interest (Percent)

Europe/Africa

Cartagena

Gas

2006

Spain

1,200

(1) Itabo plants: Itabo, Santo Domingo, Timbeque, Los Mina, Higuamo

(2) Gener-Centrogener plants: Ventanas, Laguna Verde, Laguna Verde Turbogas, Alfalfal, Maitenes, Queltehues, Volcán

(3) Gener-Electrica de Santiago plants: Nueva Renca, Renca

(4) Gener-Energia Verde plants: Constitución, Laja, San Franciso de Mostazal

(5) Tietê plants: Água Vermelha, Bariri, Barra Bonita, Caconde, Euclides da Cunha, Ibitinga, Limoeiro, Mogi-Guaçu, Nova Avanhandava, Promissão

(6) As a result of the restructuring described above between some of our Brazilian holding companies and BNDES which was completed in January 2004, we have a 46% ownership interest in AES Uruguaiana and a 24% interest in AES Tietê. AES retains control of these entities through the holding company, Brasiliana Energia, S.A.

Competitive Supply
(As of December 31, 2004)

Generation Facilities	Dominant Fuel	Year of Acquisition or Commencement of Commercial Operations		Geographic Location	Gross MW		AES Equity Interest (Percent, Rounded)
*North America*
Cayuga	Coal		1999	USA		306	100
Deepwater	Pet Coke		1986	USA		160	100
Greenidge	Coal		1999	USA		161	100
Somerset	Coal		1999	USA		675	100
Westover	Coal		1999	USA		126	100
*Caribbean*
Bayano	Hydro		1999	Panama		260	49
Chiriqui—Esti	Hydro		2003	Panama		120	49
Chiriqui—La Estrella	Hydro		1999	Panama		42	49
Chiriqui—Los Valles	Hydro		1999	Panama		48	49
Chivor	Hydro		2000	Colombia		1,000	99
Panama	Oil		1999	Panama		43	49
*South America*
Alicura	Hydro		2000	Argentina		1,040	96
Central Dique	Gas		1998	Argentina		68	51
Paraná-GT	Gas		2001	Argentina		845	100
Quebrada de Ullum(1)	Hydro		2004	Argentina		45	0
Rio Juramento—Cabra Corral	Hydro		1995	Argentina		102	98
Rio Juramento—El Tunal	Hydro		1995	Argentina		10	98
San Juan—Sarmiento	Gas		1996	Argentina		33	98
San Juan—Ullum	Hydro		1996	Argentina		45	98
San Nicolás	Coal		1993	Argentina		650	96
*Europe/Africa*
Indian Queens	Oil		1996	UK		140	100
Ottana	Oil		2001	Italy		140	100
Tiszapalkonya	Biomass/Coal		1996	Hungary		125	100
*Asia*
Ekibastuz	Coal		1996	Kazakhstan		4,000	100
Shulbinsk	Hydro		1997	Kazakhstan		702	100 Concession
Sogrinsk CHP	Coal		1997	Kazakhstan		301	100
Ust-Kamenogorsk	Hydro		1997	Kazakhstan		331	100 Concession
Ust-Kamenogorsk CHP	Coal		1997	Kazakhstan		1,356	100
Ust-Kamenogorsk Heat Nets(1)	Coal		1998	Kazakhstan		260	0
				Total		13,134

Distribution Facilities	Year of Acquisition or Commencement of Commercial Operations	Geographic Location		Approximate Number of Customers Served	Approximate Gigawatt Hours		AES Equity Interest (Percent, Rounded)
*Asia*
Eastern Kazakhstan REC(1)	1999		Kazakhstan	280,000		1,411	0
Semipalatinsk REC(1)	1999		Kazakhstan	180,000		1,088	0
				Total		2,499

(1) Although our equity interest in these businesses is zero, we operate these businesses through a management agreement. We previously owned Quebrada de Ullum from 1998 to 2004.

Large Utilities
(As of December 31, 2004)

Generation Facilities

Dominant
Fuel

Year of
Acquisition or
Commencement
of Commercial
Operations

Geographic
Location

Gross
MW

AES Equity
Interest
(Percent,
Rounded)

North America

IPL (4 plants)(1)

Coal/Gas/Oil

2001

USA

3,252

100

Caribbean

EDC (5 plants)(2)

Oil/Gas

2000

Venezuela

2,616

Total

5,868

Distribution Facilities

Year of
Acquisition

Geographic Location

Approximate Number of Customers
Served

Approximate Gigawatt
Hours

AES Equity
Interest
(Percent,
Rounded)

North America

IPL

2001

USA

Delaware	54 1163725
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4300 Wilson Boulevard Arlington, Virginia	22203
(Address of principal executive offices)	(Zip Code)

Title of Each Class		Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share		New York Stock Exchange
4.50% Junior Subordinated Debentures Due 2005		New York Stock Exchange
AES Trust III, $3.375 Trust Convertible Preferred Securities		New York Stock Exchange

PART I
RESTATEMENT OF 2002 AND 2003 ANNUAL FINANCIAL STATEMENTS		3
Deferred Taxes		3
Minority Interest		3
Discontinued Operations		3
RESTATEMENT OF 2004 QUARTERLY FINANCIAL STATEMENTS		4
ITEM 1. BUSINESS		4
Overview		4
Operating Segments		5
Facilities		8
Customers		14
Employees		14
How to Contact AES and Sources of Other Information		14
Executive Officers		14
Regulatory Matters		15
ITEM 2. PROPERTIES		30
ITEM 3. LEGAL PROCEEDINGS		31
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS		37
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS		38
Market Information		38
Holders		38
Dividends		38
ITEM 6. SELECTED FINANCIAL DATA		39
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		40
Executive Summary and Overview		40
Critical Accounting Estimates		46
New Accounting Pronouncements		48
Results of Operations		50
Capital Resource and Liquidity		62
Cautionary Statements and Risk Factors		70
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		73
Overview Regarding Market Risks		73
Interest Rate Risks		73
Foreign Exchange Rate Risk		74
Commodity Price Risk		74
Value at Risk		74
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		76
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		137
ITEM 9A. CONTROLS AND PROCEDURES		137

PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT		141
ITEM 11. EXECUTIVE COMPENSATION		141
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS	141
Security Ownership of Certain Beneficial Owners and Management	141
Security Ownership of Directors and Executive Officers	141
Changes in Control	141
Securities Authorized for Issuance Under Equity Compensation Plans	141
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	142
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES	142
PART IV
ITEM 15. EXHIBITS FINANCIAL STATEMENT SCHEDULES	143
Financial Statements and Exhibits	143
Exhibits	143
Financial Statement Schedules	145
SIGNATURES	146