<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


/X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the quarterly period ended March 31, 2001

/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from ___________ to _____________

                        Commission file number: 333-40478


                               AES RED OAK, L.L.C.
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                                                           <C>
                         DELAWARE                                                   54-1889658
              (State or other jurisdiction of                                    (I.R.S. Employer
              incorporation or organization)                                  Identification Number)
</TABLE>


               1001 NORTH 19TH STREET, ARLINGTON, VIRGINIA 22209,
                             c/o THE AES CORPORATION
                                 (703) 522-1315
             (Registrant's address of principal executive offices,)
              (zip code and telephone number, including area code)


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /


                                 (Page 1 of 19)

<PAGE>

                               AES RED OAK, L.L.C.

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       PAGE NO.
                                                                                                       --------
<S>                   <C>                                                                              <C>
PART I.  FINANCIAL INFORMATION

       Item 1.        Condensed Consolidated Financial Statements  (unaudited)

                           Condensed Consolidated Statements of Operations,
                               Three months ended March 31, 2001, Period from March 15,
                               2000 (inception) through March 31, 2000 and the Period from
                               March 15, 2000 (inception) through March 31, 2001.............................3

                           Condensed Consolidated Balance Sheets
                               March 31, 2001 and December 31, 2000 .........................................4

                           Condensed Consolidated Statements of Changes in Member's Deficit,
                               Period from March 15, 2000 (inception) through March 31, 2001.................5

                           Condensed Consolidated Statements of Cash Flows,
                               Three months ended March 31, 2001, Period of March 15, 2000
                               (inception) through March 31, 2000 and the Period March 15,
                               2000 (inception) through March 31, 2001.......................................6

                           Notes to the Condensed Consolidated Financial Statements..........................7

       Item 2.        Management's Discussion and Analysis of Financial
                           Condition and Results of Operations..............................................12

       Item 3.        Quantitative and Qualitative Disclosures
                           About Market Risk................................................................15

PART II. OTHER INFORMATION

       Item 5.        Other Information.....................................................................16

       Item 6.        Exhibits and Reports on Form 8-K......................................................18

SIGNATURES..................................................................................................19
</TABLE>


                                 (Page 2 of 19)

<PAGE>


PART I. FINANCIAL INFORMATION


ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


                               AES RED OAK, L.L.C.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS,
            THREE MONTHS ENDED MARCH 31, 2001, PERIOD MARCH 15, 2000
             (INCEPTION) THROUGH MARCH 31, 2000 AND THE PERIOD FROM
               MARCH 15, 2000 (INCEPTION) THROUGH MARCH 31, 2001
                             (DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED            MARCH 15, 2000             MARCH 15, 2000
                                                   MARCH 31, 2001           (INCEPTION) THROUGH         (INCEPTION) THROUGH
                                                                               MARCH 31, 2000             MARCH 31, 2001
                                              -------------------------    -----------------------    ------------------------
<S>                                           <C>                          <C>                        <C>
OPERATING EXPENSES
     General administrative costs.........        $         (9)                $       (162)              $       (210)
                                                        -------                     --------                  --------
     Operating Loss.......................                  (9)                        (162)                      (210)

OTHER INCOME/EXPENSE
     Interest income......................                 260                          120                      2,112
     Interest expense.....................                (352)                        (203)                    (2,951)
                                                        -------                     --------                  --------
NET LOSS..................................        $       (101)                $       (245)              $     (1,049)
                                                        =======                     ========                  ========
</TABLE>


            See notes to condensed consolidated financial statements.

                                 (Page 3 of 19)

<PAGE>



                               AES RED OAK, L.L.C.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 2001 AND DECEMBER 31, 2000
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                              AS OF                  AS OF
                                                                                          MARCH 31, 2001       DECEMBER 31, 2000
                                                                                          --------------       -----------------
<S>                                                                                       <C>                  <C>
ASSETS:

  Current Assets:
  Cash                                                                                     $         76         $         15
  Restricted investments-at cost, which approximates market value....................            10,663               21,795
  Receivables........................................................................                68                   21
                                                                                            -----------          -----------
  Total current assets...............................................................            10,807               21,831


  Prepaid construction costs.........................................................           174,813              227,609
  Land                                                                                            4,240                4,240
  Construction in progress...........................................................           181,757              117,033
  Deferred financing costs - net of accumulated amortization of
       $850 and $646, respectively...................................................            17,855               18,059
                                                                                            -----------          -----------
  Total assets.......................................................................      $    389,472         $    388,772
                                                                                            ===========          ===========

  LIABILITIES AND MEMBER'S DEFICIT:

  Current Liabilities:
  Accounts payable....................................................................     $      1,133         $        304
  Accrued liabilities.................................................................               85                   90
  Accrued Interest...................................................................             2,821                2,821
  Payable to affiliate...............................................................             1,496                2,505
                                                                                            -----------          -----------

  Total current liabilities..........................................................             5,535                5,720

  Bonds payable......................................................................           384,000              384,000
                                                                                            -----------          -----------
  Total liabilities..................................................................      $    389,535         $    389,720
                                                                                            -----------          -----------

  Commitments (Notes 4, 5 and 7)                                                                         -                    -

  Member's deficit:
  Common stock, $1 par value-10 shares authorized, none issued or  outstanding.......                 -                    -
  Contributed capital................................................................               986                    -
  Deficit accumulated during the development stage...................................            (1,049)                (948)
                                                                                            ------------         -----------
  Total member's deficit.............................................................               (63)                (948)
                                                                                            -----------          -----------
  Total liabilities and member's deficit.............................................      $    389,472         $    388,772
                                                                                            ===========          ===========
</TABLE>

            See notes to condensed consolidated financial statements.


                                 (Page 4 of 19)

<PAGE>


                               AES RED OAK, L.L.C.
                        (A DEVELOPMENT STAGE ENTERPRISE)

         CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN MEMBER'S DEFICIT
                           PERIOD FROM MARCH 15, 2000
                       (INCEPTION) THROUGH MARCH 31, 2001
                             (DOLLARS IN THOUSANDS)




<TABLE>
<CAPTION>

                                                           COMMON           STOCK           MEMBER'S
                                                           SHARES          AMOUNT           DEFICIT           TOTAL
                                                           ------          ------           -------           -----
<S>                                                        <C>              <C>            <C>              <C>
  BALANCE, MARCH 15, 2000 (inception)................         -               -                -                -
  Net Loss...........................................         -               -             $ (245)          $  (245)
                                                                                           ---------        ---------
  BALANCE, MARCH 31, 2000                                     -               -               (245)             (245)
  Net Loss...........................................         -               -               (703)             (703)
                                                                                           ---------        ---------
  BALANCE, DECEMBER 31, 2000                                  -               -               (948)             (948)
  Contributed Capital................................         -               -                986               986
  Net Loss...........................................         -               -               (101)             (101)
                                                                                           ---------        ---------
  BALANCE, MARCH 31, 2001............................         -               -             $  (63)          $   (63)
                                                                                          ==========        =========
</TABLE>



            See notes to condensed consolidated financial statements.


                                 (Page 5 of 19)


<PAGE>



                               AES RED OAK, L.L.C.
                        (A DEVELOPMENT STAGE ENTERPRISE)

      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS
                ENDED MARCH 31, 2001, PERIOD FROM MARCH 15, 2000
                   (INCEPTION) THROUGH MARCH 31, 2000 AND THE
                     PERIOD FROM MARCH 15, 2000 (INCEPTION)
                             THROUGH MARCH 31, 2001.
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                     MARCH 15, 2000           MARCH 15,2000
                                                           THREE MONTHS ENDED      (INCEPTION) THROUGH      (INCEPTION) THROUGH
                                                             MARCH 31, 2001          MARCH 31, 2000           MARCH 31, 2001
                                                             --------------          --------------           --------------
<S>                                                        <C>                      <C>                     <C>
OPERATING ACTIVITIES:
Net loss..................................................  $            (101)      $            (245)       $          (1,049)
Amortization of deferred financing costs..................                204                      10                      850
Change in:
Accounts Receivable.......................................                  -                     (47)                     (68)
Accounts Payable..........................................                829                     213                    1,133
Accrued Liabilities ......................................                 (5)                      -                       85
Accrued interest .........................................                  -                   1,598                    2,821
Payable to affiliates.....................................             (1,009)                  1,129                    1,496
                                                             -----------------       ----------------         ----------------
Net cash (used in) provided by operating activities.......               (129)                  2,705                    5,268
                                                             -----------------       ----------------         ----------------

INVESTING ACTIVITIES:
Prepaid construction costs................................                  -                (288,573)                (288,573)
Payments for construction in progress.....................            (11,928)                (26,398)                 (67,997)
Payments for land.........................................                  -                  (4,240)                  (4,240)
Change in debt service reserve............................             11,132                 (48,749)                 (10,663)
                                                             -----------------       ----------------         ----------------
Net cash used in investing activities.....................               (796)               (367,960)                (371,473)
                                                             -----------------       -----------------        -----------------

FINANCING ACTIVITIES:
Proceeds from project debt issuance.......................                  -                 384,000                  384,000
Contributed Capital.......................................                986                       -                      986
Payments for deferred financing costs.....................                  -                 (18,719)                 (18,705)
                                                             ----------------        -----------------        -----------------
Net cash provided by financing activities.................                986                 365,281                  366,281
                                                             ----------------        ----------------         ----------------

NET INCREASE IN CASH AND CASH EQUIVALENTS.................                 61                      26                       76

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............                 15                       -                        -
                                                             ----------------        ----------------         ----------------
CASH AND CASH EQUIVALENTS, END OF PERIOD..................  $              76       $              26        $              76
                                                            =================       =================        =================

SUPPLEMENTAL DISCLOSURE OF OTHER ACTIVITES:
Interest paid (net of amount capitalized).................  $             352       $               -        $           2,677
                                                            =================       =================        =================

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITES:
Transfer of prepaid construction costs to
 construction in progress.................................   $         52,796       $               -        $         113,760
                                                            =================       =================        =================
</TABLE>

             See notes condensed consolidated financial statements.

                                 (Page 6 of 19)


<PAGE>


                               AES RED OAK, L.L.C.
                        (A DEVELOPMENT STAGE ENTERPRISE)

    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, THREE MONTHS ENDED
 MARCH 31, 2001, PERIOD FROM MARCH 15, 2000 (INCEPTION) THROUGH MARCH 31, 2000
     AND THE PERIOD FROM MARCH 15, 2000 (INCEPTION) THROUGH MARCH 31, 2001

1.     ORGANIZATION

       AES Red Oak, L.L.C. (the Company) was formed on September 13, 1998, in
       the State of Delaware, to develop, construct, own and operate an
       830-megawatt (MW) gas-fired, combined cycle electric generating facility
       (the facility) in Sayreville, New Jersey. The Company was considered
       dormant until March 15, 2000, at which time it consummated a project
       financing and certain related agreements. The facility, currently under
       construction, will consist of three Westinghouse 501 FD combustion
       turbines, three unfired heat recovery steam generators, and one
       multicylinder steam turbine. The facility will produce and sell
       electricity, as well as provide fuel conversion and ancillary services,
       solely to Williams Energy Marketing and Trading Company (Williams) under
       a power purchase agreement with a term of 20 years that is expected to
       commence on or prior to February 14, 2002, the facility's guaranteed
       completion date under the EPC, as defined below (see notes 4 and 7).

       The Company is in the development stage and is not expected to generate
       any operating revenues until the facility achieves commercial operations.
       As with any new business venture of this size and nature, operation of
       the facility could be affected by many factors. Management of the Company
       believes that the assets of the Company are realizable.

       The Company is a wholly owned subsidiary of AES Red Oak, Inc. (Red Oak),
       which is a wholly-owned subsidiary of The AES Corporation (AES). Red Oak
       has no assets other than its ownership interests in the Company and AES
       Sayreville, L.L.C. Red Oak has no operations and is not expected to have
       any operations. Red Oak's only income will be from distributions it
       receives from the Company and AES Sayreville, L.L.C., once the Company
       achieves commercial operation. The equity that Red Oak is to provide to
       the Company will be provided to Red Oak by AES, which owns all of the
       equity interest of Red Oak. AES files quarterly and annual audited
       reports with the Securities and Exchange Commission under the Securities
       Exchange Act of 1934, which are publicly available. Red Oak's equity
       contribution obligations are required to be supported by either an
       insurance bond or letter of credit. Currently those obligations are
       supported by an insurance bond issued to the collateral agent.

       The Company owns all of the equity interests in AES Red Oak Urban Renewal
       Corporation (URC), which was organized as an urban renewal corporation
       under New Jersey Law. As an urban renewal corporation under New Jersey
       law, portions of the facility can be designated as redevelopment areas in
       order to provide real estate tax and development benefits to the
       facility. URC has no operations outside of its activities in connection
       with the facility.

                                 (Page 7 of 19)

<PAGE>

       On March 15, 2000, the Company issued $384 million in senior secured
       bonds for the purpose of providing financing for the construction of the
       facility and to fund, through the construction period, interest payments
       to the bondholders. In late September 2000, the Company consummated an
       exchange offer whereby the holders of the senior secured bonds exchanged
       their privately placed senior secured bonds for registered senior secured
       bonds.

       In February 2001, the Company reclassified $986,000, a payable to
       affiliate (AES Corporation) to contributed capital. This amount
       represented expenditures paid by the AES Corporation prior to March 15,
       2000.

       Pursuant to an equity subscription agreement (see note 3), Red Oak has
       agreed to contribute up to approximately $55.7 million to the Company to
       fund construction after the bond proceeds have been fully utilized.

2.     BASIS OF PRESENTATION

       In the Company's opinion, all adjustments necessary for a fair
       presentation of the unaudited results of operations for the three months
       ended March 31, 2001, the period from March 15, 2000 (inception) through
       March 31, 2000 and the period from March 15, 2000 (inception) through
       March 31, 2001 are included. All such adjustments are accruals of a
       normal and recurring nature. The results of operations for the three
       months ended March 31, 2001, the period from March 15, 2000 (inception)
       through March 31, 2000 and the period from March 15, 2000 (inception)
       through March 31, 2001, are not necessarily indicative of the results of
       operations to be expected for the full year.

       These financial statements have been prepared in accordance with
       accounting principles generally accepted in the United States of America
       for interim financial information, with the instructions to the Form
       10-Q, and with Regulation S-X. Accordingly, they do not include all of
       the information and footnotes required by accounting principles generally
       accepted in the Unites States of America for complete financial
       statements. Because the accompanying condensed consolidated financial
       statements do not include all of the information and footnotes required
       by accounting principles generally accepted in the United States of
       America, they should be read in conjunction with the audited financial
       statements for the period ended December 31, 2000 and notes thereto
       included in the Company's Form 10-K for the fiscal year ended December
       31, 2000.

3.     EQUITY SUBSCRIPTION AGREEMENT

       The Company, along with Red Oak, has entered into an Equity Subscription
       Agreement, pursuant to which Red Oak has agreed to contribute up to
       approximately $55.7 million to the Company to fund project costs. This
       amount is secured by an acceptable bond issued by Red Oak. Red Oak will
       fund these amounts as they come due upon the earlier of (a) expenditure
       of all funds that have been established for construction or (b) the
       occurrence, and during the continuation of, an event of default, as
       defined under the indenture governing its senior secured bonds. A portion
       of this equity requirement may be made in the form of affiliate debt,
       between Red Oak and the Company, which would be subordinate to the senior
       secured bonds.

4.     POWER PURCHASE AGREEMENT

       The Company and Williams have entered into a power purchase agreement
       (PPA) for the sale of all electric energy and capacity produced by the
       facility, as well as ancillary services and fuel conversion services. The
       term of the PPA is 20 years, commencing on the Commercial Operation

                                 (Page 8 of 19)

<PAGE>

       Date, which is defined in the PPA as the day the initial start up testing
       procedures have been successfully completed and notified to Williams by
       the Company. Payment obligations to the Company are guaranteed by The
       Williams Companies, Inc. Such payment obligations under the guarantee are
       capped at an amount equal to 125% of the sum of the principal amount of
       the senior secured bonds plus the maximum debt service reserve account
       required balance. The Company has provided Williams a guaranty issued by
       AES of specific payment obligations should the facility not achieve
       commercial operation by February 14, 2002, the guaranteed completion date
       under the EPC (see note 5). AES's liability under the guaranty is capped
       at $30 million. The Company has the option, and may be required under
       specific conditions described in the PPA, to replace the guaranty issued
       by AES with a letter of credit issued by a commercial bank. In such case,
       the repayment obligations with respect to drawings under the letter of
       credit are to be a senior debt obligation of the Company.

5.     COMMITMENTS AND CONTINGENCIES

       CONSTRUCTION - The Company entered into an Agreement for Engineering,
       Procurement and Construction Services, dated as of October 15, 1999,
       between the Company and Washington Group International, Inc. (New
       Contractor) (as successor in interest to Raytheon Engineers &
       Constructors, Inc. (Contractor)), as amended (EPC) for the design,
       engineering, procurement and construction of the facility. The Company
       prepaid the EPC in the amount of $288.6 million, representing a
       discounted fixed price. In consideration of the prepayment, the
       Contractor issued in favor of the Company a letter of credit with an
       initial amount of $237.7 million to be reduced over the construction
       period. As of March 31, 2001, the letter of credit has been reduced by
       approximately $113.8 million representing completion of certain
       construction milestones (see note 7).

       On July 7, 2000, Morrison Knudsen Corporation completed its acquisition
       of the Contractor and formed the New Contractor. The New Contractor is
       comprised of Morrison Knudsen Corporation, the Contractor and
       Westinghouse Government Services Group. As a result of this acquisition
       and the formation of the New Contractor, the terms and conditions under
       the EPC and the letter of credit obligation were unchanged.

       On May 14, 2001, the New Contractor announced that it had filed a plan of
       reorganization along with voluntary petitions to restructure under
       Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for
       the District of Nevada in Reno. Under the EPC, a bankruptcy filing by the
       New Contractor constitutes an event of default (see note 7). If it
       becomes necessary to replace the New Contractor, the Company may
       experience significant construction delays that could extend the expected
       commercial operation date beyond February 14, 2002, the guaranteed
       completion date under the EPC.

       MAINTENANCE SERVICES AGREEMENT - The Company has entered into an
       agreement with Siemens Westinghouse Power Corporation (Siemens). Siemens
       will provide the Company with specific combustion turbine maintenance
       services and spare parts for an initial term of between six and sixteen
       years. For the first six years of operation, the Company is committed to
       pay $306 per kilowatt hour of service. The value of this commitment is
       difficult to ascertain at this time due to the unknown operational mode
       Williams will require from the Company.

       WATER SUPPLY - The Company has entered into a contract with the Borough
       of Sayreville (the Borough) by which the Borough will provide untreated
       water to the Company. The contract has a term of 30 years with an option
       to extend for up to four additional five-year terms. The Company

                                 (Page 9 of 19)

<PAGE>

       is contractually committed to a minimum annual payment of $300,000. Based
       on estimated maximum usage, the Company believes that its annual payment
       will not exceed approximately $400,000.

       INTERCONNECTION AGREEMENT - The Company has entered into an
       interconnection agreement with Jersey Central Power & Light Company d/b/a
       GPU Energy (GPU) to transmit the electricity generated by the facility to
       the transmission grid so that it may be sold as prescribed under the
       Company's PPA. The agreement is in effect for the life of the facility,
       yet may be terminated by mutual consent of both GPU and the Company under
       certain circumstances as detailed in the agreement. Costs associated with
       the agreement are based on electricity transmitted via GPU at a variable
       price, the PJM (Pennsylvania/New Jersey/Maryland) Tariff as charged by
       GPU to the Company, which is comprised of both service cost and asset
       recovery cost, as determined by GPU and approved by the Federal Energy
       Regulatory Commission.

       WATER SUPPLY PIPELINE - The Borough will design the Lagoon Water
       Pipeline, Lagoon Pumping Station and Sayreville Interconnection Number 2
       in conformance with standard water system practice. The Company is
       responsible for selection of a contractor and for payment of all costs.
       The pipeline construction has been completed. The construction contract
       for the Pumping Station has not been awarded. The value of the pumping
       station is estimated to be approximately $2.0 million.

6.     DERIVATIVE INSTRUMENTS

       Effective January 1, 2001, the Company adopted SFAS No. 133, "Accounting
       for Derivative Instruments and Hedging Activities", which, as amended,
       establishes accounting and reporting standards for derivative instruments
       and hedging activities.

       The Company will produce and sell electricity, as well as provide fuel
       conversion and ancillary services, solely to Williams under a long term
       Power Purchase Agreement (PPA).

       The Financial Accounting Standards Board reached a tentative conclusion
       in April 2001 that option contracts for the purchase and sale of
       electricity that meet the definition of a derivative under SFAS No. 133
       are not subject to the normal purchases and sales exemption, and as such,
       should be accounted for as derivatives effective July 1, 2001. The
       Company is currently assessing the impact of this tentative conclusion on
       its financial condition and results of operations. The Company does not
       currently believe that the PPA should be accounted for as a derivative.

       The Company has no other contracts that meet the definition of a
       derivative or an embedded derivative under Statement 133.

7.     SUBSEQUENT EVENT

       At the time of issuance of the senior secured bonds, the Company prepaid
       the discounted fixed price of the EPC in accordance with the EPC
       Prepayment Coordination Agreement, dated as of March 14, 2000 between the
       New Contractor and the Company (the "Prepayment Agreement"). In
       consideration of such prepayment, the performance of all the New
       Contractor's obligations under the EPC were secured by a letter of credit
       (the "Prepayment Letter of Credit") in favor of the Collateral Agent with
       an initial stated amount of $237.7 million, such amount to be reduced
       over the construction period as construction milestones were met by the
       new Contractor. As of May 4,

                                 (Page 10 of 19)

<PAGE>

       2001, the stated amount of the letter of credit was $95.8 million.

       Pursuant to the terms of the Prepayment Letter of Credit (see note 5),
       such letter of credit can be drawn upon and the prepayment arrangements
       terminated upon the occurrence of certain bankruptcy related actions with
       respect to the New Contractor which constitute an event of default under
       the EPC. Based on recent correspondence from the New Contractor, the
       Company believed that such an event of default under the EPC had occurred
       and was continuing. As a result, in accordance with the terms of the
       Collateral Agency Agreement, the Company on May 3, 2001 requested the
       Collateral Agent to draw the full available amount of such letter of
       credit and deposit the proceeds of such drawing in the Construction
       Account held by the Collateral Agent. The Collateral Agent made such
       drawing on May 4, 2001 in the amount of $95.8 million. Subsequent to the
       termination of the prepayment arrangements with the New Contractor,
       payments to the New Contractor for achievement of construction milestones
       as specified in the EPC will be made in accordance with the terms of the
       EPC.

       On May 14, 2001, the New Contractor announced that it had filed a plan of
       reorganization along with voluntary petitions to restructure under
       Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for
       the District of Nevada in Reno (Bankruptcy Court).

       The New Contractor is currently continuing construction of the Red Oak
       Project and the Company is carefully monitoring the progress of
       construction at the facility for any work slowdowns or stoppages, neither
       of which has been noted to date.

       Under a guaranty in the Company's favor, effective as of October 15,
       1999, all of the New Contractor's obligations under the EPC are
       irrevocably and unconditionally guaranteed by Raytheon Company. If it
       becomes necessary, the Company will exercise its rights under this
       guaranty.

       Although there can be no guarantees, based upon the Company's current
       assessment of progress at the construction site, and the performance
       guaranty from Raytheon Company, and assuming that the New Contractor
       continues performance under the EPC, the Company currently believes that
       the facility will become commercially operational on or prior to February
       14, 2002, the guaranteed completion date under the EPC.

       Notwithstanding the Company's current belief, if it becomes necessary to
       replace the New Contractor under the EPC, the Company may experience
       significant construction delays. Additionally, the Company may not be
       able to find a replacement contractor on favorable or reasonable terms.
       In the event the commercial operation date of the facility is
       significantly delayed or the Company cannot find a replacement on
       favorable or reasonable terms, the Company may not have financial
       resources sufficient to meet its financial and contractual obligations,
       including the timely payment of principal and interest on the senior
       secured bonds.

       Other than with respect to developments that may have a material impact
       on the Company or its business operations, the Company is under no
       obligation nor does it intend to continuously provide updates of the New
       Contractor's bankruptcy proceedings. However, copies of all pleadings
       filed with the Bankruptcy Court are available from the office of the
       clerk of the Bankruptcy Court.

                                 (Page 11 of 19)

<PAGE>

ITEM 2.         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS

         CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

         Some of the statements in this Form 10-Q, as well as statements made by
         the Company in periodic press releases and other public communications,
         constitute "forward-looking statements" within the meaning of the
         Private Securities Litigation Reform Act of 1995. Certain, but not
         necessarily all, of such forward-looking statements can be identified
         by the use of forward-looking terminology, such as "believes,"
         "estimates," "plans," "projects," "expects," "may," "will," "should,"
         "approximately," or "anticipates" or the negative thereof or other
         variations thereof or comparable terminology, or by discussion of
         strategies, each of which involves risks and uncertainties. The Company
         has based these forward-looking statements on its current expectations
         and projections about future events based upon its knowledge of facts
         as of the date of this Form 10-Q and its assumptions about future
         events.

         All statements other than of historical facts included herein,
         including those regarding market trends, the Company's financial
         position, business strategy, projected plans and objectives of
         management for future operations and the anticipated commercial
         operation date of the facility, are forward-looking statements. Such
         forward-looking statements involve known and unknown risks,
         uncertainties and other factors outside of the Company's control that
         may cause the actual results or performance of the Company to be
         materially different from any future results, performance or
         achievements expressed or implied by the forward-looking statements.
         These risks, uncertainties and other factors include, among others, the
         following:

               o    unexpected construction delays,
               o    unexpected problems relating to the start-up, commissioning
                    and performance of the facility,
               o    the financial condition of third parties on which we depend,
                    including in particular, Washington Group International,
                    Inc.,
               o    continued performance by Washington Group under the EPC
                    contract,
               o    the Company's ability to find a replacement contractor on
                    favorable or reasonable terms, if necessary,
               o    an adequate merchant market after the expiration of the
                    power purchase agreement,
               o    capital shortfalls and access to additional capital on
                    reasonable terms,
               o    inadequate insurance coverage,
               o    unexpected expenses or lower than expected revenues once
                    commercial operations have begun,
               o    environmental and regulatory compliance, and
               o    the additional factors that are unknown to the Company or
                    beyond its control.

         The Company has no obligation to publicly update or revise any
         forward-looking statement, whether as a result of new information,
         future events or otherwise.


                                 (Page 12 of 19)

<PAGE>

         GENERAL

         The Company was formed on September 13, 1998 to develop, construct,
         own, operate and maintain its facility. The Company was dormant until
         March 15, 2000, the date of the sale of the senior secured bonds. The
         Company is in the development stage and has no operating revenues. The
         Company obtained $384.0 million of project financing from the sale its
         senior secured bonds. The total cost of the construction of the
         Company's facility is estimated to be approximately $439.8 million,
         which will be financed by the proceeds from the sale of its senior
         secured bonds and the equity contribution described below. In late
         September 2000, the Company consummated an exchange offer whereby the
         holders of the senior secured bonds exchanged their privately placed
         senior secured bonds for registered senior secured bonds.

         The Company's facility is still under construction and is expected to
         be completed and operational on or prior to February 14, 2002, the
         guaranteed completion date under the EPC contract. The Company cannot
         assure that these expectations will be met. See "Note 7. Subsequent
         Event" of the Notes to Condensed Consolidated Financial Statements and
         "--Cautionary Note Regarding Forward-Looking Statements."

         EQUITY CONTRIBUTIONS

         In February 2001, the Company reclassified $986,000, a payable to
         affiliate ("AES Corporation"), to contributed capital. This amount
         represents expenditures paid by the AES Corporation prior to March 15,
         2000.

         Under the equity subscription agreement, Red Oak is obligated to
         contribute up to approximately $55.7 million to the Company to fund
         project costs. Red Oak's obligation to make the contributions is, and
         will be, supported by an acceptable letter of credit or an acceptable
         bond.

         RESULTS OF OPERATIONS

         As of March 31, 2001 and December 31, 2000, Construction in Progress,
         which includes capitalized facility construction costs, was $181.8
         million and $117.0 million, respectively. For the three months ended
         March 31, 2001 and 2000, capitalized facility construction costs were
         $64.7 million and $26.4 million, respectively. As discussed in greater
         detail below, Construction in Progress also includes the capitalization
         of construction related interest cost incurred on the portion of the
         bond proceeds expended during the construction period. These
         capitalized costs are included as assets on the Balance Sheets.

         The Company prepaid the EPC contract in the amount of $288.6 million
         and in consideration of the prepayment the Contractor issued in favor
         of the Company a letter of credit. As of March 31, 2001, the letter of
         credit has been reduced by approximately $113.8 million, representing
         completion of certain construction milestones resulting in prepaid
         construction costs in the amount of $174.8 million and included as
         assets on the Balance Sheet as of March 31, 2001. The cost of
         purchasing land for construction of the Company's facility has been
         separately identified on the Balance Sheets.

         The Company had the right to draw upon the prepayment letter of credit
         referred to above and terminate the prepayment arrangements upon the
         occurrence of certain bankruptcy related actions with respect
         Washington Group which constituted an event of default under the EPC
         contract. Based on recent correspondence from Washington Group, the
         Company believed that

                                 (Page 13 of 19)

<PAGE>

         such an event of default under the EPC contract had occurred and was
         continuing. As a result, in accordance with the terms of the Collateral
         Agency Agreement, the Company on May 3, 2001 requested the Collateral
         Agent to draw the full available amount of such letter of credit and
         deposit the proceeds of such drawing in the Construction Account held
         by the Collateral Agent. The Collateral Agent made such drawing on May
         4, 2001 in the amount of $95.8 million, the balance of the letter of
         credit on that date. Subsequent to the termination of the prepayment
         arrangements with Washington Group, payments to Washington Group for
         achievement of construction milestones as specified in the EPC contract
         will be made in accordance with the terms of the EPC contract. In
         future periods, payments made to Washington Group under the EPC
         contract will be paid from the Construction Account.

         For the three months ended March 31, 2001, the period from March 15,
         2000 (inception) through March 31, 2000 and the period from March 15,
         2000 (inception) through March 31, 2001, general and administrative
         costs of $9,000, $162,000 and $210,000, respectively, were incurred.
         These costs did not directly relate to construction and are included
         as expenses in the Statement of Operations.

         A portion of the proceeds from the sale of the senior secured bonds
         has not yet been expended on construction and was invested by the
         trustee. For the three months ended March 31, 2001, the period from
         March 15, 2000 (inception) through March 31, 2000 and the period from
         March 15, 2000 (inception) through March 31, 2001, the interest income
         earned on these invested funds was approximately $260,000, $120,000 and
         $2.1 million, respectively, and is included in the Statement of
         Operations.

         As noted above, for the three months ended March 31, 2001, the period
         from March 15, 2000 (inception) through March 31, 2000 and the period
         from March 15, 2000 (inception) through March 31, 2001, the
         construction related interest costs incurred on the portion of the
         bond proceeds expended during the construction period is capitalized
         to Construction in Progress, was approximately $8.1 million,
         $1.4 million and $32.3 million respectively, and is included on the
         Balance Sheets. For the three months March 31, 2001, the period from
         March 15, 2000 (inception) through March 31, 2000 and the period from
         March 15, 2000 (inception) through March 31, 2001, interest cost
         incurred on the bond proceeds not spent on construction of the
         Company's facility was approximately $352,000, $203,000 and
         $3.0 million respectively, and is included as interest expense in the
         Statements of Operations.

         For the three months ended March 31, 2001, the period from March 15,
         2000 (inception) through March 31, 2000 and the period from March 15,
         2000 (inception) through March 31, 2001, non-capitalizable costs plus
         interest cost and less interest income resulted in a net loss of
         approximately $101,000, $245,000 and $1.0 million, respectively. The
         results of operations may not be comparable with the results of
         operations during future periods, especially when the Company's
         facility commences commercial operations.

         LIQUIDITY AND CAPITAL RESOURCES

         The Company believes that the net proceeds from the sale of the senior
         secured bonds, together with the equity contribution, will be
         sufficient to (1) fund the engineering, procurement, construction,
         testing and commissioning of the Company's facility until it is placed
         in commercial operation, (2) pay certain fees and expenses in
         connection with the financing and development of the Company's project
         and (3) pay project costs, including interest on the senior secured
         bonds. After the Company's facility is placed in commercial operation,
         it will depend on revenues under the power purchase agreement, and
         after the power purchase agreement expires, it will depend on revenues
         generated from market sales of electricity.

                                 (Page 14 of 19)

<PAGE>

         In order to provide liquidity in the event of cash flow shortfalls, the
         debt service reserve account will contain an amount equal to the debt
         service reserve account required balance through cash funding, issuance
         of the debt service reserve letter of credit or a combination of the
         two.

         As of March 31, 2001, apart from commitments totaling $541,000 arising
         from the construction of our facility, we have committed to three
         additional capital expenditures totaling $3.2 million. These
         expenditures are for a water pipeline for approximately $678,000, road
         modifications for $537,000 and a water pumping station for an estimated
         $2.0 million. As of March 31, 2001, the road modifications and their
         related expenditures have been completed and paid. We expect to pay the
         remaining balance of the pipeline, approximately $100,000 in May 2001.
         The entire cost of the water pumping station will be paid in fiscal
         year 2001 from equity contributions under the Equity Subscription
         Agreement from The AES Corporation.

         On May 14, 2001, Washington Group announced that it had filed a plan of
         reorganization along with voluntary petitions to restructure under
         Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for
         the District of Nevada in Reno. Washington Group is currently
         continuing construction of the facility and the Company is carefully
         monitoring the progress of construction at the facility for any work
         slowdowns or stoppages, neither of which has been noted to date.
         Although there can be no guarantees, based upon the Company's current
         assessment of progress at the construction site, and the performance
         guaranty from Raytheon Company, and assuming that Washington Group
         continues performance under the EPC contract, the Company currently
         believes that the facility will become commercially operational on or
         prior to February 14, 2002, the guaranteed completion date under the
         EPC contract.

         Notwithstanding the Company's current belief, if it becomes necessary
         to replace Washington Group under the EPC contract, the Company may
         experience significant construction delays. Additionally, the Company
         may not be able to find a replacement contractor on favorable or
         reasonable terms. In the event the commercial operation date of the
         facility is significantly delayed or the Company cannot find a
         replacement on favorable or reasonable terms, the Company may not have
         financial resources sufficient to meet its financial and contractual
         obligations, including the timely payment of principal and interest on
         the senior secured bonds. See "Note 7. Subsequent Event" of the Notes
         to Condensed Consolidated Financial Statements and "--Cautionary Note
         Regarding Forward-Looking Statements."

         BUSINESS STRATEGY AND OUTLOOK

         The Company's overall business strategy is to market and sell all of
         its net capacity, fuel conversion and ancillary services to Williams
         during the 20-year term of the power purchase agreement. After
         expiration of the power purchase agreement, the Company anticipates
         selling its facility's capacity, ancillary services and energy under a
         power purchase agreement or into the PJM power pool market. The Company
         intends to cause its facility to be managed, operated and maintained in
         compliance with the project contracts and all applicable legal
         requirements.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         The Company's market risks are not materially different from those
         market risks described in its annual report on Form 10-K for the fiscal
         year ended December 31, 2000.

                                 (Page 15 of 19)

<PAGE>

                           PART II. OTHER INFORMATION

ITEM 5. OTHER INFORMATION

      At the time of issuance of the senior secured bonds, the Company prepaid
      the discounted fixed price of the EPC contract in accordance with the EPC
      Prepayment Coordination Agreement, dated as of March 14, 2000 between
      Washington Group (as successor in interest to Raytheon Engineers &
      Constructors, Inc.) and the Company (the "Prepayment Agreement"). In
      consideration of such prepayment, the performance of all Washington
      Group's obligations under the EPC contract were secured by a letter of
      credit (the "Prepayment Letter of Credit") in favor of the Collateral
      Agent with an initial stated amount of $237.7 million, such amount to be
      reduced over the construction period as construction milestones were met
      by Washington Group. As of May 4, 2001, the stated amount of the letter of
      credit was $95.8 million.

      Pursuant to the terms of the Prepayment Letter of Credit (see note 5),
      such letter of credit can be drawn upon and the prepayment arrangements
      terminated upon the occurrence of certain bankruptcy related actions with
      respect to Washington Group which constitute an event of default under the
      EPC contract. Based on recent correspondence from Washington Group, the
      Company believed that such an event of default under the EPC contract had
      occurred and was continuing. As a result, in accordance with the terms of
      the Collateral Agency Agreement, the Company on May 3, 2001 requested the
      Collateral Agent to draw the full available amount of such letter of
      credit and deposit the proceeds of such drawing in the Construction
      Account held by the Collateral Agent. The Collateral Agent made such
      drawing on May 4, 2001 in the amount of $95.8 million. Subsequent to the
      termination of the prepayment arrangements with Washington Group, payments
      to the Washington Group for achievement of construction milestones as
      specified in the EPC contract will be made in accordance with the terms of
      the EPC contract.

      On May 14, 2001, Washington Group announced that it had filed a plan of
      reorganization along with voluntary petitions to restructure under Chapter
      11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the
      District of Nevada in Reno (Bankruptcy Court).

      Washington Group is currently continuing construction of the facility and
      the Company is carefully monitoring the progress of construction at the
      facility for any work slowdowns or stoppages, neither of which has been
      noted to date.

      Under a guaranty in the Company's favor, effective as of October 15, 1999,
      all of Washington Group's obligations under the EPC contract are
      irrevocably and unconditionally guaranteed by Raytheon Company. If it
      becomes necessary, the Company will exercise its rights under this
      guaranty.

      Although there can be no guarantees, based upon the Company's current
      assessment of progress at the construction site, and the performance
      guaranty from Raytheon Company, and assuming that Washington Group
      continues performance under the EPC contract, the Company currently
      believes that the facility will become commercially operational on or
      prior to February 14, 2002, the guaranteed completion date under the EPC
      contract.

      Notwithstanding the Company's current belief, if it becomes necessary to
      replace Washington Group under the EPC contract, the Company may
      experience significant construction delays.

                                 (Page 16 of 19)

<PAGE>

      Additionally, the Company may not be able to find a replacement
      contractor on favorable or reasonable terms. In the event the commercial
      operation date of the facility is significantly delayed or the Company
      cannot find a replacement on favorable or reasonable terms, the Company
      may not have financial resources sufficient to meet its financial and
      contractual obligations, including the timely payment of principal and
      interest on the senior secured bonds.

      Other than with respect to developments that may have a material impact on
      the Company or its business operations, the Company is under no obligation
      nor does it intend to continuously provide updates of Washington Group's
      bankruptcy proceedings. However, copies of all pleadings filed with the
      Bankruptcy Court are available from the office of the clerk of the
      Bankruptcy Court.


                                 (Page 17 of 19)


<PAGE>


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K


         a) EXHIBITS


                 NONE




         b) REPORTS ON FORM 8-K.


         The Company did not file any reports on Form 8-K during the quarter
ended March 31, 2001.


                                 (Page 18 of 19)

<PAGE>


                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                            AES RED OAK, L.L.C.



<TABLE>
<S>                                             <C>
Date:  May 15, 2001                             By:  /s/ JOHN RUGGIRELLO
                                                     ---------------------------
                                                     JOHN RUGGIRELLO
                                                     President




Date:  May 15, 2001                             By:  /s/ BARRY SHARP
                                                     ----------------------------------
                                                     BARRY SHARP
                                                     Vice President and Chief Financial
                                                     Officer (and principal accounting
                                                     officer)
</TABLE>

                                 (Page 19 of 19)