The Aes Corporation · NYSE:AES
The Aes — AES — Investor Day (May 2006)
115 slides from The Aes's investor day presentation, May 10, 2006
Slide 1: Emission Allowance Strategy: Selling to our Hedges
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Slide 2: Eastern Energy Business Sensitivities
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Slide 3: North America East Strategy Initiatives
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Slide 4: North America East Growth Opportunities
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Slide 5: North America Competitive Supply Financial Overview
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Slide 6: North America West Business Review
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Slide 7: North America West Generation Portfolio
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Slide 8: North America West Business Portfolio
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Slide 9: North America West Business Portfolio
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Slide 10: North America West Customers
AES History in Asia 1992-1995 1992 Entered India 1993 Founded AES Chigen 1994 Closed first power projectin China 1996-1997 Closed the existing six other power projects in China, resulting in aggregate of 2.842MW installed capacity www.aes.com 1996 Chigen issued $180 MM Notes due 2006 ‘Won greenfield
Slide 11: North America West Revenue Model
China Generation Market Characteristics Contains Forward Looking Statements Big market 508GW installed capacity = High growth: 9% p.a. GDP growth in.2005 = Country rating: A- Do not directly translate into robust investment opportunities for foreign investors = Generation market dominated by state-o
Slide 12: North America West Contract Maturity Profile
China Generation Market Characteristics Contains Forward Looking Statements Tightly controlled tanif setting Contract enforcement a challenge "= Industry undergoing structural and regulatory changes. = More stringent environmental atic ‘Opportinities in renewable and + Government encourages non powe
Slide 13: North America West Fuel Supply
India Generation Market Characteristics Contains Forward Looking Statements = Big market: 124GW installed capacity = High growth: 7-8% p.a. GDP x> growth from 2006-2010 = Negative reserve margin estimated at 12% < Significant power demand = However, has not resulted in significant capacity additions
Slide 14: North America West Major Initiatives
India Generation Market Characteristics Contains Forward Looking Statements = Weak credit of utilities and overreaching regulations are utities slowly emerging legacy hurdles as aresult of open access promise = World's 4" largest wind capacity (4,430mv) = Retums and regulations are reasonable * Acti
Slide 15: North America West Generation KPIs
AES Portfolio in Asia Coal oil Gas Hydro China China China China Yangcheng, Shanxi Hefei Chengdu, Sichuan il, Hunan = 2,100MW + 11M = SoM = 26MW + 25% AES Owned = TO%AESOwned = 35%AESOwned + 51% AES Owned Jiaozuo, Henan satanke = 250MW Kelanitissa = TO%AES Owned —« 1ggMWDiesel Wuhu = 90% AES Owned +
Slide 16: North America West Safety Performance
Asia Generation Revenues Consolidated Revenue ($145 MM) China Sri Lanka 58% 42% Consolidated Revenue by Customer ($145 MM) Aluminum Mill 27% State-owned utilities 73% For the year ended December 31, 2005 www.aes.com Combined Revenue ") ($720 MM) ‘Sri Lanka India 13% 9% China 78% ©) Combined revenue
Slide 17: North America West Emissions Performance
Asia Generation Portfolio Contracted with Full or Partial Fuel Cost Pass Through www at et m. Contract Generation Portfolio India + Mine mouth plant with long-term linkage granted + Fuel cost passed through under PPA ‘Sri Lanka = Fuel supply agreement guaranteed by government = Fuel cost passed thro
Slide 18: North America West Reliability Performance
Asia Generation KPIs Environmental Excellence Operational Excellence www.aes.com Key Performance Indicator (KPI) Lost time accident rate (LTAs) Days and man-hours since last LTA Near miss reporting SO, emissions NO, emissions Opacity Net plant heat rate Equivalent availability factor (EAF) Equivalen
Slide 19: North America West Non-Fuel O&M
Asia Generation Safety Performance Lost Time Accidents Getting Better | ‘Safety Highlights * All but one plant have more than a year without an LTA Cili: 4,271 days without an LTA Chenoa 3,299 days without an LTA, Jiaozuo: 545 days without an LTA OPGC: over 6.5 MM man- hours without an LTA
Slide 20: AES Southland Operational Improvement
Asia Generation Heat Rate Performance OPGC & Jiaozuo Heat Rate (Btu/kWh) acre Getting Better | 11,500 / 8 10.836 11,000 0 \ 10,889 10,756 10,500 2003 2004 2008 —Jiaozu0 —OPGC www.aes.com Kelanitissa Heat Rate (Btu/kWh) 7,900 Getting Better | 7,962 7,800 7,821 7,725 7,700 2003 2004 2005
Slide 21: AES Merida III Reliability Improvement
Asia Generation KPI Focus OPGC Jiaozuo Equivalent Availability Factor $45 90% 100% $30 80% ™ SA, ra $15 | 70% 90% $0 60% 85% 1999 2001 2003 = 2005 2002 2003 2004 2005 1006 lm Receivables (SMM) — Capacity Factor (%) www.aes.com
Slide 22: North America West Scenario Planning
Asia Generation Portfolio Financing China India Sri Lanka = $30 MM Renminbi & US Dollar non-recourse loans outstanding at project level = Final maturity by 2009 = $175 MM US Dollar bonds due 2010 at Chigen holding Dita as of December 31,2005 www.aes.com $17 MM Rupee non- recourse project loans outst
Slide 23: North America West Growth Opportunities
Chigen Bond Financing Outstanding Uss175 MM Interest rate 8.25% pa. Maturity profile Due June 2010, bullet payment Credit rating S&P: B#/Stable; Moody's: B1 Chigen Bond Price Movement $108 $102 $96 $90 10/03 5/04 12/04 7/05 2106 www.aes.com
Slide 24: North America Contract Generation Financial Overview
Asia Generation Financial Overview (USS Million) 2003 2004 2005 Revenue $118 $120 $145 Gross Margin $29 $25 $33 Income Before Tax & Minority Interest $50 $31 $59 Distributions to AES Corporation $123 $32 $37 ‘Note: Information is presented on an AES basis and is unaudited. Certain intercompany trans
Slide 25: AES History in Asia
Growth Strategies www.aes.com Contains Forward Looking Statements Acquisition of restructuring provincial and local power companies Integrated coal mine and power plant Non-power, such as gas distribution, water & waste treatment Renewable, clean coal technology and CDM Seek joint venture partnershi
Slide 26: China Generation Market Characteristics
Reserve gin f a, India and ASEAN Countries Jina 20% to 35% ME Peak Demand (GW) Installed Capacity (GW) % Reserve Margin. SriLanka 34% Source: 1A and AES estimates Bas not drawn to scale: China, Indi and Si Lanka Indonesia 4% www.aes.com
Slide 27: China Generation Market Characteristics
ASEAN Generation Market Characteristics ‘Sovereign rating GDP growth 05 Electricity demand growth Opportunities Competition New PPAs Procurement process Political climate Data fom EA www.aes.com 45% Immediate acquisitions ‘Fpnvatization (medium term for new: capacities) 67% Urgent need for new Capac
Slide 28: India Generation Market Characteristics
Greenfield: Mong Duong, Vietnam 1,200MW BOT greenfield coal-fired negotiated opportunity MOU signed in December 2005 90% joint venture with Vinacomin, the state-owned coal monopoly Non-recourse project finance from multilateral banks based on wel established precedence Us Dollar long-term PPA and FS
Slide 29: India Generation Market Characteristics
Platform Expansion : OPGC, India Contains Forward Looking Statements Proposed OPGC Expansion 500 to 1,000MW coal-fired OPGC expansion = Shared facilities built = No new AES equity investment = Financed by trapped cash and local (Rupee) non-recourse loans = Mine mouth resutting in competitive electri
Slide 30: AES Portfolio in Asia
AES Kazakhstan Business Review Dale Perry Vice President AES CORPORATION May 9, 2006
Slide 31: Asia Generation Revenues
AES Kazakhstan Strategic Overview Contains Forward Looking Statements AES Goals AES 2008 Target AES Kazakhstan Role Financial Goals = Revenue Growth - Above Average * Gross Margin Growth $3.5 Billion Above Average * Earnings Per Share Growth 13-19% per Year Above Average * ROIC Improvement’) 11% Abo
Slide 32: Asia Generation Portfolio Contracted with Fuel Cost Pass Through
Kazakhstan Highlight 3334 $x Kazakhstan ata Glance ~) 5 ry Kazakhstan Terige (KZT) 4 (KZT) = 0.007472,(USD) US $7,800 69% ‘mejor deposits of petroleum, natural gas, coal, iron ore, Tranganese, chrome ore, nickel, cobalt, copper Tmolyodenurn, lead, zinc, Daunits, gold, uranmum Astana Largest City Alm
Slide 33: Asia Generation KPIs
Kazakhstan Electricity Demand Growth Contains Forward Looking Statements 80 “HII ill 40 199219941996 19982000 20022004 2008E © 2008E ©2010 l= Nominal GDP —_ Generation (TWh) Recent correlation between electricity demand and GDP growth expected to continue Source: Company infomation wwww.aes.com
Slide 34: Asia Generation Safety Performance
Kazakhstan Electricity Market Characteristics Generation ae 18,200MW installed capacity (approximate) = 67% Coal = 41% Other thermal = 22% Hydroelectric 50% private sector ownership (approximate) AES is largest private sector generator www .aes.com Transmission Distribution Commercial Base Three reg
Slide 35: Asia Generation Heat Rate Performance
Overview of AES Kazakhstan Power Assets Ekibastuz Gres 4,000MW (coal) Maikuben mine Shulbinsk Sogrinsk CHP 702MW (hydro) 301MW (coal) ” Northern, Central and Eastern Western System Southern Distribution Businesses Under Management Kyrgyzstan Ust-Kamenogorsk Eastemn Kazakhstan REC = 331MW (hydro) = 2
Slide 36: Asia Generation KPI Focus
Kazakhstan Generation Market Profile 2005 Generation (MWh) Market Share (%)'” 3 AES ‘ AES 29% =a FF AES Ekibastuz 18% AES UK HPP 4% AES Shulba HPP 4% — AES UK & Sogra CHPs 3% Imports and Other 20% Aksu GRES 22% KarGRES 10% Bukhtarma HPP 7% GRES-2 12% Total Installed Capacity = 18,200MW © Excluding W
Slide 37: Asia Generation Portfolio Financing
Kazakhstan Electricity Market History Contains Forward Looking Statements rt 2001-2005 2006 and future Electricity sector Creation of a regulatory body Creation of the Wholesale Reserve marains drop, with functions as a single to formelectrcity market and Electricity Power Poot some load shedding se
Slide 38: Chigen Bond Financing
Kazakhstan Electricity Market Operation Model KEGOC Bilateral trades monthly, yearly, multiyear Tansmission & Dispatch) ‘System Operator Balanced schedules submitted to KEGOC N a Hot, cold reserve pool are Wholesale nominated day ahead into -——> Eneray = Regulation agreement is in place for all gene
Slide 39: Asia Generation Financial Overview
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Slide 40: Growth Strategies
Tight Russian Reserve Margins Expected by 2009 Ekibastutz Target Markets European _ North Russia Caucasus Equilibrium energy price (USS/MWh) $16 $16 Required capacity payment (USS/KW-year) 80 103 Total wholesale price (USSIMWVh) Cost of new entry (USS/MWh) 27 29 ‘Wholesale price discount to cost of
Slide 41: Reserve Margins in China, India and ASEAN Countries
Potential AES Ekibastuz Price and Demand Scenario Offers Attractive Growth Prospects Contains Forward Looking Statements AES Ekibastuz Repowering Investment and Potential Timeline at Assumed Power Prices ‘S00MW SOOMW) a 1) [soomvy| | 2) 300MWw T (Units 3 - 7) | g = = 61 a | 30 2004 2005 2006E 2007E
Slide 42: ASEAN Generation Market Characteristics
AES Kazakhstan Financial Overview (S Millions) 2003 2004 2005 Revenue $103 $137 $158 Gross Margin $25 $36 $40 Income Before Tax & Minority Interest $21 $30 $33 Distributions to AES Corporation $29 $8 $18 Note: Information is presented on an AES basis and is unaudited. Certain intercompany transactio
Slide 43: Greenfield: Mong Duong, Vietnam
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Slide 44: Platform Expansion: OPGC, India
Safety is a Top Priority at AES Kazakhstan LTA 30 Getting Better | TW aie 2001 2002-2003 «2004 ©2005 2005 Safety Activity Formed Safety Steering Committees Commenced ISO certification Commenced Risk Assessment Training Continued public safety educational campaign Launched NEBOSH Training www.aes.com
Slide 45: AES Kazakhstan Business Review
Growth Opportunities Contains Forward Looking Statements = 4,800MW at low incremental capital cost = Economics well below greenfield investment = Low cost mine-mouth coal source Ekibastuz Rehabilitation = Additional low-cost capacity available Maikuben Mine Expansion i = Leverage remaining 15 year c
Slide 46: AES Kazakhstan Strategic Overview
2006 AES Investor Conference Series AES CORPORATION May 9, 2006
Slide 47: Kazakhstan Highlight
AES North America Business Review AES CORPORATION David Gee President of North America May 9, 2006
Slide 48: Kazakhstan Electricity Demand Growth
North America Business History Early PURPA Acquisitions Greenfield Gas Safety Beaver Valley Southland Merida Operations Deepwater Eastern Ironwood People Energy Placerita Red Oak Growth IPL Thames Late PURPA US Biomass Greenfield Shady Point Warrior Run Hawaii Puerto Rico www.aes.com
Slide 49: Kazakhstan Electricity Market Characteristics
North America Strategic Overview ‘Contains Forward Looking Statements AES Goals AES 2008 Target North America Role Financial Goals = Revenue Growth - Average * Gross Margin Growth $3.5 Billion Average + Eamings per Share Growth 13-19% per Year Average * ROIC Improvement (") 11% Average * Cash Flow G
Slide 50: Overview of AES Kazakhstan Power Assets
North America Overview 2005 North America 2005 North America as % of AES Revenues by Segment 100% 20% seal 34% 60% 40% 46% 20% a 0% Cosa Masin SUNS mRegulated Utilities Pletnbutlons) m= Contract Generation M North America @™ Rest of World m Competitive Supply © Non-GAAP financial measure. See Append
Slide 51: Kazakhstan Generation Market Profile
North America’s Forward Capacity Profile Contains Forward Looking Statements 12,879 12,863 12,691 12,691 12,241 py “~ fb =| %of 80% Total Gl Capacity °°% (MW) 40% . | | | 0% 2006E 2007E 2008E 2009E 2010E mIPL Contract Generation ™Hedged Competitive Supply ™Unhedged Competitive Supply Note: Assumes S
Slide 52: Kazakhstan Electricity Market History
North America Priorities Safety First = Leading, lagging indicators and programs ™ Daily #1 priority = Plant-specific performance indicators = ar eel + North America Operating Network * Sourcing Excellence = Fuel flexibility = Overall: commercial availability, NFOM/kw People Development )\. |= Attra
Slide 53: Kazakhstan Electricity Market Operation Model
IPALCO Busin: Revi AES CORPORATION us “Ann Murtow President and CEO, IPALCO and IPL May 9, 2006
Slide 54: Kazakh wholesale power prices among the lowest
IPALCO Strategic Overview Contains Forward Looking Statements AES Goals AES 2008 Target IPALCO Role Financial Goals * Revenue Growth - Below Average * Gross Margin Growth $3.5 Billion Below Average * Eamings per Share Growth 13-19% per Year Below Average * ROIC Improvement (") 11% Below Average * Ca
Slide 55: Tight Russian Reserve Margins
IPALCO History 1881 — Indianapolis Brush Electnic Light & Power Co, (IBELP) is, first Indianapolis electric utility 4931 —First 132kV loop around city completed & Harding Street plant begins commercial operations 1940 ~ IPL IPO is first large US investor owned utility to list on the New York Stock E
Slide 56: Potential AES Ekibastuz Price and Demand
IPALCO Service Area and Facilities Petersburg — = 1,722MW Coal = 8MW Oil Harding Street & Georgetown MORRIS STREET, ARLINGTON AND = 653MW Coal CUSTOMER SERVICE CENTER = 158MW Oil = 283MW Gas HARDING STREET = 202MW Oil & Gas 4-—__ & GEORGETOWN 5 Eagle Valley ¢ é a DESMAN Gil PETERSBURG \ 5 = 8iMWOil
Slide 57: AES Kazakhstan Financial Overview
IPALCO Electricity Demand Growth 10% Growth (QoQ) . = Hhitt..t | 6% J! adadtael af 2000 ia 20h 2008 2004 2005 A% 6% m= Energy demand —GDP IPL’s service territory energy demand and national GDP growth rates maintain a basic correlation. Source: IPL. www.aes.com
Slide 58: IPALCO Fuel Sourcing Strategy
IPALCO Fuel Sourcing Strategy Sourced From Generation Transportation Method Distance Key Suppliers Fuel Flexibility (sulfur, BTU) Coal Ilinois Basin (mainly Indiana) 99% Rail; Truck < 100 miles Black Beauty Coal Company (Peabody), Triad Mining (James River Coal), Solar ‘Sources, and Sunrise Coal, LL
Slide 59: Safety is a Top Priority at AES Kazakhstan
IPALCO Customer Base Billed Consumption (GWh) 2005 maui Wholesale & Other 7% Electricity Sales Trend (GWh) Commercial & a Resicontel Industrial 13% oo 16.256 16,184 «15,707 16,205» 16,276 ROSS UIE eyogey puIe OTE Large Commercial & Industrial 47% Revenues: 2005 ao a g TO a0 Wholesale £.0ther 9% 2001
Slide 60: Growth Opportunities
Indiana Regulatory Framework ' = Fuel Adjustment Regulatory Bodies Rate Settin, 9 we 9 Clause Retail tariffs are determined at Rates are determined through Fuel costs and fuel portion of the state level a formal public hearing power purchases are passed ” = d based on the through = IURC- Indiana Uti
Slide 61: 2006 AES Investor Conference Series
The Midwest Independent System Operator Contains Forward Looking Statements MISO Day 1 MISO Day 2 Recovery Issues 27172002 - MISO becomes operational and addresses: * Security Coordination * Long-term Regional Planning = Transmission Scheduling and Tariff Administration * Market Monitoring & ‘Admini
Slide 62: AES North America Business Review
IPALCO Utility and Generation KPIs Key Performance Indicator (KP!) * OSHA recordable incident rate SEMI GL ONSe = Lost time accidents (LTAs) = Equivalent forced outage rate (EFOR) = Short term opacity performance Operational Excellence = System interruption duration (SAIDI) = System interruption fre
Slide 63: North America Business History
Implementing KPIs at IPL IPL target: taneous operating excellence in seven key areas versus other US electric utility performance through its “Be the Best” (BTB) philosophy ‘om
Slide 64: North America Strategic Overview
IPALCO Safety Performance Scorecard OSHA Recordable : ay Incident Rate Hie hele 59% Improvement 79% Improvement Getting Benter | Getting Berer J 7 5.02 3.60 1.00 059 0.14 @ 272 204 10 021 2 0s 0 00 -_ 2002 ©2003 «2004 2005 2002 «2003 «2004 «2005 IPL’s top priority is safety in the workplace as demon
Slide 65: North America Overview
IPALCO Generation Performance Scorecard ‘Short Term Opacity Re Exceedances 6296 Improvement 8396 Improvement GettingBenter J Getting Berer J 107 1200 12% 57 a6 46 40 800 232 296 163 4% im 400 0% 0 2002 2003 2004 2005 2002 2003 2004 2005 Note: 2002 opacity exceedance figure includes soot blowing exce
Slide 66: North America's Forward Capacity Profile
IPALCO Service Reliability vs. Indiana Peers SAIFI SAIDI Getting Berer | Getting Berer J 2.0% 400 19% ee s fe 1% -— E200 _ t t fi t " BR, , &§ a@ we & 2002 2003 2004 2005 2002 2008 2004 2005 IPL —*- Indiana Average —+— Highest Indiana rate ‘Source: IURC 2005 Rellabilty Report. IPL has consistently o
Slide 67: North America Priorities
IPALCO Customer Service Performance Scorecard Customer Satisfaction Average Speed of Answer 5% Improvement Consistent Performance GetingBetter J 20.0% 89.0% 70" 925 57 96 4% 88% 7 § 40 24% o 2002 2003 2004 2005 2002 2003 2004 2008 IPL offers the most competitive retail residential rates in Indiana a
Slide 68: IPALCO Business Review
IPALCO Environmental Investments Contains Forward Looking Statements Projected Capital Spending Through 2008 ($ Millions) Total pons. 2005 «2006E 9 2007E 2008E 2008E) Mult-Pollutant Plan $27 S115 $48 $B STH NOx SIP Call $a 80 808080 Total Environmental Capex “966 S15 48 S8 ST Maintenance & Other Cap
Slide 69: IPALCO Strategic Overview
IPALCO Capital Structure Objectives Contains Forward Looking Statements Si ees Target Debt to Capital Ratio 50 to 55% Credit Rating Objectives \") Investment Grade = S8P/Fitch BBB- * Moody's Baa3 Interest Coverage Ratio (") > 28 times Funds from Operations to Total Debt ‘") 12 to 20% Fixed to Floati
Slide 70: IPALCO History
IPALCO Amortization Schedule and Interest Rate Breakdown Contains Forward Looking Statements Interest Rate Breakdown of Consolidated Co. Amortization Schedule December 31, 2005 700 600 IPL Variable 500 5% g 400 PALCO S oe 50% IPLFixed 300 45% 200 i) — 2008E = 2010E = 2012E+ SIPALCO mIPL PL Variable
Slide 71: IPALCO Service Area and Facilities
IPALCO Credit Rating Trends 2001 2002 2003 2004 2005 ANAS BBB+/Baat BBB/Baa2 BBB-/Baa3- BB+/Bat BB/Ba2 BB-/Ba3 B+/B1 B/B2 B83 Fitch Hissp's [ll Moody's Fitch upgraded IPALCO in October 2005 citing, among other factors, “low business risk associated with IPL’s utility operations’, “ring-fencing mecha
Slide 72: IPALCO Electricity Demand Growth
IPALCO Financial Overview (S Millions) 2003 2004 = 2005 Revenue $832 $884 $951 Gross Margin $282 $304 $305, Income Before Tax & Minority Interest $175 $194 $189 Distributions to AES Corporation $176 $177 $208 ‘Note: Information presented on an AES basis. Certain intercompany transactions may not be
Slide 73: IPALCO Fuel Sourcing Strategy
IPALCO Strategic Issues Strategic Issues Long Term Fuel ‘Supply Strategic Supply Plan Contains Forward Looking Statements Achieve more flexible fuel mix and supplier diversity Continued fuel cost recovery through Fuel Adjustment Clause Value and treatment of emission credits related to coal ‘sulfur
Slide 74: IPALCO Customer Base
North America East Business Review AES CORPORATION Dan Rothaupt Vice President, North America East
Slide 75: Indiana Regulatory Framework
North America East Business Portfolio Contract Generation 100% 100% Beaver Valley Thames Pennsylvania | Connecticut Pulverized Coal || CFB Coal (125MM) (208M) 1985 1990 Competitive Supply 100% AES Eastem Energy New York Pulverized Coal (1,268MW) 1999 www.aes.com
Slide 76: The Midwest Independent System Operator
North America East Business Portfolio Contract Generation 100% 67% 100% 100% 100% | Warrior Run Hemphill Ironwood Red Oak Puerto Rico Maryland New Hampshire | | Pennsylvania New Jersey CFB Coal Biomass cocT cCGT CFB Coal (205M) (16M) (71OMW) (632M) (454M) 2000 2001 2001 2002 2002 www.aes.com
Slide 77: IPALCO Utility and Generation KPIs
North America East Revenue Model Revenue by Customer Type (2005) Eastem Energy Contracts with hedged regulated utilities 31% 46% Eastern Energy Long-term Unhedged contracts with 12% 2005 Revenues Williams * 88% contracted or hedged 11% + 12% unhedged (spot sales) www.aes.com
Slide 78: Implementing KPIs at IPL
North America East Revenue Model Beaver Valley Contract Generation 2016) vest Penn Power Hemphill 2006 Public Service of NH Ironwood 2021) Williams Energy Trading . Puerto Rico Ruedto:Bleo 2027) Power Authority Red Oak BOA Wiliams Eneray Trading Thames BOIS] Connecticut Light and Power Potomac Warri
Slide 79: IPALCO Safety Performance Scorecard
North America East Contract Maturity Profile Contains Forward Looking Statements Gross MW Contracted or Hedged 3,500 Contract Generation Th = co | I ] | 1 Competitive Supply 2,500 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Competitive Supply hedge amounts as of March 31, 2006 www.aes.com
Slide 80: IPALCO Generation Performance Scorecard
North America East Fuel Sourcing Strategy Sourced From Transportation Method Key Suppliers aes.com Other North America Eastern Energy Coal eee Natural Gas Norther Appalachian Northern Appalachian Williams (tolling (Pennsyivania, West, (Maryland) agreement) Virginia) Rail Barge/Truck Pipeline (CSX an
Slide 81: IPALCO Service Reliability vs. Indiana Peers
North America East Generation KPIs Contains Forward Looking Statements Provide Clean, Reliable, Affordable Energy Key Performance Indicator (KPI) * — Leading indicators ~ Identifying and reporting near misses ~ Safety walks * Lagging Indicators ~ OSHA metrics (recordables, Lost Work Day Case, DART r
Slide 82: IPALCO Customer Service
North America East Safety Performance OSHA Recordable Incident Rate Recordable incident rate is Getting Better | improving as a result of: = Implementation of proactive safety activitic — Near miss identification = Safety walks = Additional awareness and emphasis put on safety from all levels of the
Slide 83: IPALCO Environmental Investments
North America East Emissions Performance Contains Forward Looking Statements Eastern Energy's Emissions Rate Ennrcamenolencconia (lbsimmbtu) improvements include: 12 = Past Improvements 7 Getting Better | = 1999: SCR installed at / Somerset = 2001: SCR installed on one unit at Cayuga = Ongoing scrub
Slide 84: IPALCO Capital Structure Objectives
North America East Financial Availability Financial Availability Factor = Financial availability factor (FAF) is stable = Five plants had FAF greater than 95.1% 94.9% 95.1% 97% in 2005 = Ongoing FAF improvement efforts include: 90% = Attacking identified reliability issues 85% = Formation of knowled
Slide 85: IPALCO Amortization Schedule and Interest Rate Breakdown
North America East Operations Cost Non-Fuel O&M Cost $/kw-yr in 2002 dollars S80: Getting Better | = Recent increase due to $4097 major outages in conjunction $40 SLTa with operational reliability $33.15 g31.57 activity spending $30 * Global Sourcing efforts being expanded further $20 * Other cost i
Slide 86: IPALCO Credit Rating Trends
Red Oak — Operational Improvement = Applied problem solving tools to plant trips and aborted starts — Root cause analysis — Logic reviews = Measured start reliability and 100% Cer 98.40% equivalent start ratio to focus team 95.96% efforts = Improved preventative / predictive maintenance practices th
Slide 87: IPALCO Financial Overview
Warrior Run Operational Improvement or Financial Availability 95% = Adopted root cause analysis 90% = Applied corrective and 35% preventative practices = Expanded outage scope to 30% address reliability risks oe a sei = Conducted reliability risk Ml Added scheduled outage time to repair generator is
Slide 88: IPALCO Strategic Issues
Optimizing Eastern Energy Dispatch decisions Coal transportation Outage coordination Control Hedging technology Allowance term capex ; purchase and (credit & oy Seuee p) sales credit capability aan - J Full Coal quality “os and costs accounting www.aes.com
Slide 89: North America East Business Review
Optimizing Eastern Energy AES Eastern Energy www.aes.com
Slide 90: North America East Business Portfolio
Limited Merchant Exposure Hedged With Credit-Worthy Customers Contains Forward Looking Statements AES Eastern Energy Contracting Strategy Hedge Metrics (1) Hedge % by Counterparty Credit (2006) ") 100% tom ge % by party (2006) 2 sow 7% z 60% 50% 3 3 4% Unrated g 40% 24% BBB+ & 20% Z 0% 2006 2007 200
Slide 91: North America East Business Portfolio
Slide 92: North America East Revenue Model
Slide 93: North America East Revenue Model
Slide 94: North America East Contract Maturity Profile
Slide 95: North America East Fuel Sourcing Strategy
Slide 96: North America East Generation KPIs
Slide 97: North America East Safety Performance
Slide 98: North America East Emissions Performance
Slide 99: North America East Financial Availability
Slide 100: North America East Operations Cost
Slide 101: Red Oak — Operational Improvement
Slide 102: Warrior Run Operational Improvement
Slide 103: Optimizing Eastern Energy
Slide 104: Optimizing Eastern Energy
Slide 105: Limited Merchant Exposure Hedged With Credit-Worthy Customers
Slide 106: Emission Allowance Strategy: Selling to our Hedges
Slide 107: Eastern Energy Business Sensitivities
Slide 108: North America East Strategy Initiatives
Slide 109: North America East Growth Opportunities
Slide 110: North America Competitive Supply Financial Overview
Slide 111: North America West Business Review
Slide 112: North America West Generation Portfolio
Slide 113: Slide 113
Slide 114: Slide 114
Slide 115: Searchable text section of graphics shown above
Searchable text section of graphics shown above 2006 AES Investor Conference Series AES CORPORATION Scott Cunningham Vice President, Investor Relations [GRAPHIC] May 9, 2006 Safe Harbor Disclosure Certain statements in the following presentation regarding AES’s business operations may constitute “fo