INTRODUCTION

Existing Operations. The AES Corporation and its subsidiaries and affiliates (collectively "AES" or the "Company") are a global power company committed to serving the world's needs for electricity in a socially responsible way. AES's electricity "generation" business consists of sales to wholesale customers (generally electric utilities, regional electric companies or wholesale commodity markets known as "power pools") for further resale to end users. AES also sells electricity directly to end users such as commercial, industrial, governmental and residential customers through its "distribution" business.
          AES's generation business represented 61% of total revenues in 1999 compared to 59% for 1998. Sales within the generation business are made under long-term contracts from power plants owned by the Company's subsidiaries and affiliates, as well as directly into power pools. The Company owns new plants constructed for such purposes ("greenfield" plants) as well as older power plants acquired through competitively bid privatization initiatives or negotiated acquisitions.
          AES's distribution business represented 39% of total revenues for 1999 compared to 41% for 1998. Electricity sales by AES's distribution businesses, including affiliates, are generally made pursuant to the provisions of long-term electricity sale concessions granted by the appropriate governmental authorities. In certain cases, these distribution companies are "integrated", in that they also own electric power plants for the purpose of generating a portion of the electricity they sell.
          In its generation business, AES now operates and owns (entirely or in part) a diverse portfolio of electric power plants (including those within the integrated distribution companies discussed below) with a total capacity of 36,675 megawatts (MW). Of that total, 33% are fueled by coal or petroleum coke, 18% are fueled by natural gas, 15% are hydroelectric facilities, 4% are fueled by oil, and the remaining 30% are capable of using multiple fossil fuels. Of the total MW, 7,606 (eighteen plants) are located in the United States, 754 (seven plants) are in China, 1,281 (three Plants) are in Hungary, 9,106 (fifty-one plants) are in Brazil, 5,763 (six plants) are in the UK, 885 (six plants) are in Argentina, 7,909 (seven plants) are in Kazakhstan (including 4,000 MW attributable to Ekibastuz which currently has a reliable capacity of approximately 22%), 210 (one plant) are in the Dominican Republic, 110 (one plant) are in Canada, 695 (two plants) are in Pakistan, 405 (one plant) are in the Netherlands, 1,254 (three plants) are in Australia, 420 (one plant) are in India, 277 (four plants) are in Panama.
          AES has majority ownership in three distribution companies in Argentina and individual distribution companies in the United States, Brazil, El Salvador,

Construction and Business Development Activities. AES is also currently in the process of adding approximately 6,646 MW to its operating port- folio through its construction of greenfield plants. These include a 454 MW natural gas-fired plant, a 705 MW natural gas-fired plant, and a 180 MW coal- fired plant in the United States, two natural gas-fired plants totaling 600 MW in Brazil, a 2,100 MW coal- fired plant in China, an 830 MW natural gas-fired Plant, a 123 MW hydroelectric facility in Argentina, a refurbished 360 MW coal-fired plant in England, two natural gas-fired plants totaling 810 MW in Bangladesh and a 484 MW natural gas-fired plant in Mexico.
          As a result, AES's total MW of the 122 power plants in operation or under construction is approximately 43,321 MW and net equity ownership (total MW adjusted for the Company's ownership percent- age) represents approximately 31,751 MW
          Because of the significant complexities associated with building new electric generating plants, construction periods often range from two to five years, depending on the technology and location. AES currently expects that projects now under construction will reach commercial operation and begin to sell electricity at various dates through the year 2004. The timely completion of each plant is generally supported by a guarantee from the plant's construction contractor, although in certain cases, AES has assumed the risk of successfully completing construction. Changes in economic, political, technological, regulatory or logistical circumstances may substantially delay, or in some cases even prevent, completion and commercial operation.
          In addition, a Brazilian subsidiary Eletronet is in the process of constructing a national broadband telecommunications network attached to the existing national transmission grid in Brazil. AES continues to believe that there is significant demand for more efficiently operated electricity generation and distribution businesses. As a result AES is pursuing additional