Subrogación de personal en contratas de

The following table summarizes the relevant effective equity ownership interest and carrying values for the Company’s investments accounted for under the equity method as of December 31, 2009 and 2008.

December 31,

Affiliate Country 2009 2008 2009 2008

Carrying

Value Ownership Interest %

Barry(1) United Kingdom $ — $ — 100 100

Cartagena(1) Spain — — 71 71

CEMIG Brazil — — 10 10

AES Solar Ltd. United States 224 126 50 50 Chigen affiliates China 182 179 27 27

Elsta Netherlands 204 138 50 50

Guacolda Chile 131 81 35 35

Huanghua China 52 36 49 49

IC Ictas Energy Group Turkey 104 94 51 51

InnoVent(1) France 30 37 40 40

OPGC India 208 192 49 49

Trinidad Generation Unlimited(1) Trinidad 16 16 10 60 Other affiliates United States 6 2 — —

Total investments in and advances to affiliates $ 1,157 $ 901

(1) _{Represent VIEs in which we hold a significant variable interest.}

180

Table of Contents

THE AES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) DECEMBER 31, 2009, 2008, AND 2007

AES Barry Ltd.—The Company holds a 100% ownership interest in AES Barry Ltd. (“Barry”), a dormant entity in the United Kingdom that disposed of

its generation and other operating assets. As a result of a debt agreement, no material financial or operating decisions can be made without the banks’ consent, and the Company does not control Barry. As of December 31, 2009 and 2008 other long-term liabilities included $54 million and $49 million, respectively, related to this debt agreement.

Cartagena Energia—The Company owns 71% of Cartagena Energia (“Cartagena”) a 1,219 MW power plant in Cartagena, Spain completed in November

2007. The Company’s initial investment in Cartagena was approximately $29 million. Cartagena was determined to be a VIE and the Company is not the primary beneficiary due to the fact that the sole customer of the plant absorbs the majority of the commodity price risk. In December 2008, the Company’s basis in its investment in Cartagena was reduced to zero and the equity method of accounting was suspended. In June 2009, Cartagena received a cash settlement of $53 million for liquidated damages including legal costs incurred related to the construction delay from December 2005 to November 2006 of the generation plant. Cartagena used the settlement proceeds to repay a portion of the participative loans outstanding to its investors including AES. In June 2009, the Company received its proportionate share of the settlement, $35 million, which was recognized as “net equity in earnings of affiliates” because the distribution was in excess of the Company’s current investment balance of zero and AES does not have an obligation or intent to fund future cash flow requirements of Cartagena. As a result of the new accounting guidance issued in the fourth quarter of 2009 regarding VIEs, the Company believes at this time that upon the January 1, 2010 effective date, Cartagena will no longer be accounted for under the equity method of accounting, and will at that time become a consolidated subsidiary. See further discussion of the new accounting guidance in Item 7.—Management’s Discussion and Analysis of Financial Condition,—Accounting Pronouncements Issued, but not yet Effective and Note 1—General and Summary of Significant Accounting Policies.

CEMIG—The Company, through it’s Brazilian subsidiary, Southern Electric Brasil Participaçơes Ltda. (“SEB”), a VIE, has a 14.8% voting interest in

Companhia Energética de Minas Gerais (“CEMIG”), an integrated utility in Minas Gerais, Brazil. Although our interest in CEMIG is below the 20% threshold for significant influence, AES has significant influence over the operational and financial policies of CEMIG through representation on the board of directors of CEMIG. In 2002, the Company determined there was an other-than-temporary impairment of its investment in CEMIG and wrote it down to fair market value, $155 million. Additionally, AES established a valuation allowance against a deferred tax asset related to the CEMIG investment. The total amount of these charges, net of tax, was $587 million. As a result, the Company’s investment in CEMIG is a $484 million net liability at December 31, 2009 included in the Other Long-Term Liabilities line item on the Consolidated Balance Sheet. The Company has discontinued the application of the equity method in accordance with its accounting policy regarding equity method investments. In November 2009, SEB entered into a share purchase and sale agreement with Andrade Gutierrez Concessơes S.A. and an affiliated company (jointly referred to as, “AG”) for the sale of SEB’s shares in CEMIG. In consideration for SEB’s shares in CEMIG, AG will pay to SEB a total purchase price equal to the sum of (i) $25 million plus (ii) the assumption by AG of SEB’s debt (the “BNDES Loan”) with Banco Nacional de Desenvolvimento Econômico e Social (“BNDES”). The sale is subject to the resolution of all outstanding debts and claims relating to the BNDES Loan and is contingent upon SEB obtaining a full release from any claims of BNDES, the restructuring of the BNDES Loan and the ratification of the settlement by the judicial system of the restructuring of the BNDES Loan assumed by AG and the sale of SEB’s shares in CEMIG to AG.

181

Table of Contents

THE AES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) DECEMBER 31, 2009, 2008, AND 2007

AES Solar Energy Ltd.—In March 2008, the Company formed AES Solar Energy Ltd (“AES Solar”), a joint venture with Riverstone Holdings LLC

(“Riverstone”). AES Solar will develop land-based solar photovoltaic panels that capture sunlight to convert into electricity that feed directly into power grids. AES Solar is accounted for under the equity method of accounting based on the Company’s 50% ownership and significant influence but not control over the joint venture. Under the terms of the agreement, the Company and Riverstone will each provide up to $500 million of capital over the next five years. As of December 31, 2009, AES had invested approximately $247 million in the joint venture.

Guohua AES (Huanghua) Wind Power Co., Ltd—In May 2007, the Company acquired a 49% interest in Guohua AES (Huanghua) Wind

Power Co., Ltd. (“AES Huanghua”), a joint venture that is primarily engaged to develop, construct, own and operate wind projects in China. The project went live in the third quarter of 2009. Also, in the second and third quarter of 2008, the Company acquired a 49% interest in three separate wind projects in China—Guohua AES (“Hulunbeier”) Wind Power Co., Ltd.; Guohua AES (“Chenba’erhu”) Wind Power Co., Ltd.; and Guohua AES (“Xinba’erhu”) Wind Power Co., Ltd. The Company invested approximately $16 million in the aforementioned projects in 2009, bringing the cumulative investment to $50 million.

Trinidad Generation Unlimited—In 2007, the Company began pursuing a development project to construct and operate a 720 MW combined cycle power

plant in Trinidad through its wholly owned subsidiary, Trinidad Generation Unlimited (“TGU.”) In July 2008, a shareholder agreement was executed establishing the Company’s ownership interest in TGU at 60% with the remaining 40% interest held by the Government of Trinidad and Tobago. Although the Company’s ownership in TGU was reduced to 10% in 2009, the Company continues to account for its investment in Trinidad as an equity method investment because AES continues to exercise significant influence through the supermajority vote requirement for any significant future project development activities.

Summarized Financial Information

The following tables summarize financial information of the Company’s 50%-or-less owned affiliates and majority-owned unconsolidated subsidiaries that are accounted for using the equity method.

Years ended December 31, ₂₀₀₉ 50%-or-less Owned Affiliates _{2008 2007 2009} Majority-Owned Unconsolidated Subsidiaries _{2008 2007}

(in millions) (in millions)

Revenue $ 1,229 $ 1,180 $ 988 $ 158 $ 170 $ 145 Gross margin 240 274 255 71 61 57 Net income (loss) 110 83 194 (5) (4) (17)

December 31, 2009 2008 2009 2008

(in millions) (in millions)

Current assets $ 882 $ 734 $ 142 $ 222 Noncurrent assets 3,543 2,626 1,140 1,297 Current liabilities 528 563 153 181 Noncurrent liabilities 1,406 1,264 1,055 1,072 Noncontrolling interests 191 163 24 26 Stockholders’ equity 2,682 1,696 98 292

At December 31, 2009, retained earnings included $156 million related to the undistributed earnings of the Company’s 50%-or-less owned affiliates. Distributions received from these affiliates were $35 million, $50 million and $59 million for the years ended December 31, 2009, 2008 and 2007, respectively.

Refer to Item 1 of this Form 10-K for additional information on these affiliates. 182

Table of Contents

THE AES CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) DECEMBER 31, 2009, 2008, AND 2007