The AES Corporation (AES)

ON THE FINANCIAL STATEMENTS

The Board of Directors and Stockholders of The AES Corporation:

We have audited the accompanying consolidated balance sheets of The AES Corporation and its subsidiaries as of December 31, 2009 and December 31, 2008, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2009. Our audits also included the financial statement schedules for each of the two years in the period ended December 31, 2009 listed in the accompanying Index to Item 15(a). These financial statements and schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of The AES Corporation and its subsidiaries at December 31, 2009 and 2008, and the consolidated results of their operations and their cash flows for each of the two years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules for each of the two years in the period ended December 31, 2009, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), The AES Corporation’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2010 expressed an unqualified opinion thereon.

/s/: Ernst & Young LLP

McLean, Virginia

February 25, 2010

145

Table of Contents

ON THE FINANCIAL STATEMENTS

To the Board of Directors and Stockholders of

The AES Corporation

Arlington, VA

We have audited the accompanying consolidated statements of operations, changes in equity, and cash flows of The AES Corporation and subsidiaries (the “Company”) for the year ended December 31, 2007. Our audit also included the 2007 information in the financial statement schedules listed in the index on page S-1. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of The AES Corporation and subsidiaries for the year ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As also discussed in Notes 1, 15, 17 and 21 to the consolidated financial statements, the accompanying 2007 financial statements have been adjusted for the retroactive application of accounting for noncontrolling interests, which was adopted by the Company on January 1, 2009, and for the changes in reportable segments that occurred in 2009.

/s/ Deloitte & Touche LLP

McLean, Virginia

March 14, 2008

(February 25, 2010 as to the Discontinued Operations and Reclassification section of Note 1 and the December 2009 paragraph of Note 21, and the changes in reportable segments described in Note15, September 11, 2009 as to the effects of the adoption of a new accounting standard described in the Noncontrolling Interests section of Note 1, the first paragraph of Note 17, and changes in reportable segments, and February 26, 2009 as to the December 2008 paragraph of Note 21).

146

Table of Contents

THE AES CORPORATION

ON THE FINANCIAL STATEMENTS

To the Board of Directors and Stockholders of

The AES Corporation

Arlington, VA

We have audited the accompanying consolidated balance sheet of The AES Corporation and subsidiaries (the “Company”) as of December 31, 2007 and the related consolidated statements of operations, changes in equity, and cash flows for each of the two years in the period ended December 31, 2007. Our audits also included the 2007 and 2006 information in the financial statement schedule on pages S2 - S6. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of The AES Corporation and subsidiaries as of December 31, 2007 and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, the Company adopted Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” in 2007 and Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” in 2006.

As also discussed in Notes 1, 8, 14, 15 and 17 to the consolidated financial statements, the accompanying 2007 and 2006 financial statements have been adjusted for the retroactive application of Statement of Financial Accounting Standards No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51,” which was adopted by the Company on January 1, 2009, and for the changes in reportable segments that occurred in the first quarter of 2009.

/s/ Deloitte & Touche LLP

McLean, Virginia

March 14, 2008

(September 11, 2009 as to the effects of the adoption of Statement of Financial Accounting Standards No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51” described in the Noncontrolling Interests section of Note 1, Note 14 and Note 17, and the changes in reportable segments described in Notes 8 and 15, and February 26, 2009 as to the Discontinued Operations and Reclassifications section of Note 1 and Note 21)

61

THE AES CORPORATION

(a)   1. Financial Statements.

(a)          1.   Financial Statements.

2.               

2.                

2.