##### Table of Contents



As
filed with the Securities and Exchange Commission on March 31, 2010
 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 20-F
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2009
 Commission File Number: 000-53606
 AEI
 exact name of registrant as specified in its charter
 Cayman Islands  jurisdiction of incorporation or organization   Clifton House, 75 Fort Street, P.O. Box 190GT
George Town, Grand Cayman, Cayman Islands  address of principal executive offices
 Maureen J. Ryan
Executive Vice President, General Counsel and Chief Compliance Officer
AEI Services LLC, 700 Milam, Suite 700, Houston, Texas 77002 (713) 345-5200 maureen.ryan@aeienergy.com  name, telephone, e-mail and/or facsimile number and address of company contact person
 Securities registered or to be registered pursuant to Section 12(b) of the Act:
 Securities registered or to be registered pursuant to Section 12(g) of the Act:
 Ordinary shares $0.002 par value  (Title of class)
 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
 The number of outstanding shares of each of the issuers classes of capital or common stock as of
December 31, 2009 was:
  Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act.
 o þ
 If this report is an annual report, indicate by check mark if the registrant is not required to
file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 o þ
 Indicate by checkmark 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.
 þ o
 Indicate by checkmark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
 o þ
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in
Rule 12-b-2 of the Exchange Act. (Check one):
 o o þ
 Indicate by check mark which basis of accounting the registrant has used to prepare the financial
statements included in this filing:
 þ o o
 If this is an annual report, indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
 o þ




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CONTENTS
 PageINTRODUCTION
    
    
    1BUSINESS OF AEI
    
    
    1NON-GAAP FINANCIAL MEASURES
    
    
    2PRESENTATION OF INFORMATION
    
    
    4FORWARD-LOOKING STATEMENTS
    
    
    5GLOSSARY OF TECHNICAL TERMS
    
    
    6GLOSSARY OF DEFINED TERMS
    
    
    7Item 1. Identity of Directors, Senior Management and Advisers
    
    
    12Item 2. Offer Statistics and Expected Timetable
    
    
    12Item 3. Key Information
    
    
    13A. Selected Financial Data
    
    
    13B. Capitalization and Indebtedness
    
    
    17C. Reasons for the Offer and Use of Proceeds
    
    
    18D. Risk Factors
    
    
    18Item 4. Information on the Company
    
    
    31A. History and Development of the Company
    
    
    31B. Business Overview
    
    
    31C. Organizational Structure
    
    
    57D. Property, Plant and Equipment
    
    
    58Item 4A. Unresolved Staff Comments
    
    
    60Item 5. Operating and Financial Review and Prospects
    
    
    61A. Operating Results
    
    
    66B. Liquidity and Capital Resources
    
    
    88C. Research and Development, Patents and Licenses, Etc.
    
    
    95D. Trend Information
    
    
    95E. Off-Balance Sheet Arrangements
    
    
    96F. Tabular Disclosure of Contractual Obligations
    
    
    97Item 6. Directors, Senior Management and Employees
    
    
    98A. Directors and Senior Management
    
    
    98B. Compensation
    
    
    102C. Board Practices
    
    
    102D. Employees
    
    
    106E. Share Ownership
    
    
    106Item 7. Major Shareholders and Related Party Transactions
    
    
    109A. Major Shareholders
    
    
    109B. Related Party Transactions
    
    
    109C. Interests of Experts and Counsel
    
    
    110Item 8. Financial Information
    
    
    111A. Consolidated Statements and Other Financial Information
    
    
    1118.A.7 Legal Proceedings
    
    
    1118.A.8 Dividend Policy
    
    
    111
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PageB. Significant Changes
    
    
    111Item 9. The Offer and Listing
    
    
    112A. Offer and Listing Details
    
    
    112B. Plan of Distribution
    
    
    112C. Markets
    
    
    112D. Selling Shareholders
    
    
    112E. Dilution
    
    
    112F. Expenses of the Issue
    
    
    112Item 10. Additional Information
    
    
    113A. Share Capital
    
    
    113B. Memorandum and Articles of Association
    
    
    113C. Material Contracts
    
    
    113D. Exchange Controls
    
    
    114E. Taxation
    
    
    114F. Dividends and Paying Agents
    
    
    116G. Statement by Experts
    
    
    116H. Documents on Display
    
    
    116I. Subsidiary Information
    
    
    117Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    118Item 12. Description of Securities Other Than Equity Securities
    
    
    120Item 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    121Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    122Item 15. Controls and Procedures
    
    
    123Item 16A. Audit Committee Financial Expert
    
    
    124Item 16B. Code of Business Conduct
    
    
    125Item 16C. Principal Accountant Fees and Services
    
    
    126Item 16D. Exemptions From the Listing Standards for Audit Committees
    
    
    127Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    128Item 16F. Change in Registrants Certifying Accountant
    
    
    129Item 16G. Corporate Governance
    
    
    130Item 17. Financial Statements
    
    
    131Item 18. Financial Statements
    
    
    132Item 19. Exhibits
    
    
    133Unaudited Proportional Financial Metrics
    
    
    A-1Reconciliation of Non-GAAP Measures
    
    
    A-3Exhibit 4.2Exhibit 4.7Exhibit 4.9Exhibit 4.10Exhibit 8.1Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 13.2
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INTRODUCTION
  
 BUSINESS OF AEI
   
    
    Power Distribution: approximately 27,300 GWh sold, 4.9 million electric power
customers, and 121,100 miles of power distribution and transmission lines;
    
    Power Generation:
approximately 9,600 GWh sold, and 2,278 MW of electric power
generation capacity with an additional 300 MW under construction;
    
    Natural Gas Transportation and Services: approximately 3,300 mmcfd average throughput
and 4,900 miles of natural gas and gas liquids transportation pipelines;
    
    Natural Gas Distribution:
approximately 400 mmcfd average sales, 2.5 million natural
gas distribution customers and 21,800 miles of natural gas distribution pipeline networks;
and
    
    Retail Fuel: approximately 4.7 mm gal/day average throughput of liquid fuels, 34.9
mmcfd average sales of compressed natural gas, or CNG, and 1,861 owned and affiliated
gasoline and CNG service stations. Retail Fuel is a non-core business for us and we are
currently exploring strategic alternatives with respect to that business.
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NON-GAAP FINANCIAL MEASURES
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PRESENTATION OF INFORMATION
    
    
    Argentine pesos or AR$ are to the lawful currency of Argentina;
    
    Brazilian real, Brazilian reais or R$ are to the lawful currency of Brazil;
    
    Chilean pesos or CLP are to the lawful currency of Chile;
    
    Chinese renminbi or RMB are to the lawful currency of China;
    
    Colombian pesos or COP are to the lawful currency of Colombia;
    
    Jamaican dollars are to the lawful currency of Jamaica;
    
    Pakistani rupees or PKR are to the lawful currency of Pakistan;
    
    Peruvian nuevos soles are to the lawful currency of Peru;
    
    Polish zlotys or PLN are to the lawful currency of Poland;
    
    New Turkish lira or TRY are to the lawful currency of Turkey; and
    
    Dollars, U.S. dollars, $ or U.S.$ are to the lawful currency of Ecuador, El
Salvador, Panama and the United States.
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FORWARD-LOOKING STATEMENTS
  
    
    Our businesses are in emerging markets. Our results of operations and financial
condition are dependent upon economic conditions in those countries in which we operate,
and any decline in economic conditions could harm our results of operations or financial
condition.
    
    Governments have a high degree of influence in the economies in which we operate. This
influence could harm our result of operations or financial condition.
    
    The uncertainty of the legal and regulatory environment in certain countries in which
we operate, develop or construct infrastructure assets may make it difficult for us to
enforce our rights under agreements relating to our businesses.
    
    Currency exchange rate fluctuations relative to the U.S. dollar in the countries in
which we operate our businesses may adversely impact our results of operations or financial
condition.
    
    Most of our businesses are subject to significant governmental regulations and our
results of operations and financial condition could be adversely affected by changes in the
law or regulatory schemes (including proposed climate change legislation).
    
    The tariffs of most of our business segments are regulated and periodically revised by
regulators. Reductions in tariffs could result in the inability of our businesses to
recover operating costs, including commodity costs and/or investments and maintain current
operating margins.
    
    The operation of our businesses involves significant risks that could adversely affect
our results of operations or financial condition.
    
    Other risk factors set forth in Item 3. Key Information  D. Risk Factors.
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GLOSSARY OF TECHNICAL TERMS
  Bcf/d
    
    Billion cubic feet per dayBOMT
    
    Build, operate, maintain and transfer agreementBOT
    
    Build, operate and transfer agreementCFB
    
    Circulated fluidized bedCNG
    
    Compressed natural gasGWh
    
    Gigawatt hourLNG
    
    Liquefied natural gasLost Time Incident
    
    Any work-related injury or illness that prevents
an employee (or contractor) from returning to work
on his next regularly scheduled work shift; does
not include restricted work cases, medical
treatment cases, or sport injuries that occur on
company premises during employee leisure timeLost Time Incident Rate
    
    Number of Lost Time Incidents multiplied by
200,000 divided by the number of man-hours worked;
generally calculated on an annual and 12-month
rolling basismmcfd
    
    Million cubic feet per dayMW
    
    MegawattMWh
    
    Megawatt hourNGL
    
    Natural gas liquidsPPA
    
    Power purchase agreement
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GLOSSARY OF DEFINED TERMS
  Accroven
    
    Accroven S.R.L., our Venezuelan Natural Gas Transportation and
Services businessAEIL
    
    Ashmore Energy International Limited, a Cayman Islands company formed
by Ashmore that was merged into PEIANEEL
    
    Brazilian National Electric Energy Agency (Agência Nacional de Energia
Elétrica)Amayo
    
    Consorcio Eólico Amayo S.A., one of our Nicaraguan Power Generation
businessesASEP
    
    Panamanian National Authority of Public Services (Autoridad Nacional
de los Servicios Públicos)Ashmore
    
    Ashmore Investment Management LimitedAshmore Funds
    
    Investment funds directly or indirectly managed by AshmoreBahía Blanca
    
    Parque Eólico Bahía Blanca, an Argentine wind project under
development in partnership with PatternBBPL
    
    Bolivia-to-Brazil Pipeline which is comprised of GTB and TBGBLM
    
    Bahía Las Minas Corp., our Panamanian Power Generation business which
we sold on March 14, 2007BMG
    
    Beijing MacroLink Gas Co. Ltd., one of our Chinese Natural Gas
Distribution businessesBNDES
    
    Brazilian Economic Development Bank (Banco Nacional de Desenvolvimento
Econômico e Social)BOTAŞ
    
    Boru Hatlari Ile Petrol Taşima A.Ş., the Turkish government owned
natural gas monopolyCAMMESA
    
    Compañía Administradora del Mercado Mayorista Eléctrico S.A., the
Argentine state-run power pool administratorCálidda
    
    Gas Natural de Lima y Callao S.A., our Peruvian Natural Gas
Distribution businessCBC
    
    Cantonment Board Clifton, a private Pakistani company that buys water
from DCLCDEEE
    
    Dominican Corporation of State Electricity Companies (Corporación
Dominicana de Empresas Eléctricias Estatales), a Dominican Republic
state-run power companyCEEE
    
    Brazilian Chamber of Electric Energy Commercialization (Câmara de
Comercialização de Energia Elétrica)Centragas
    
    Centragas, one of our Colombian Natural Gas Transportation and
Services business
  -7-




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Centrans
    
    Centrans Energy Services Inc., an energy services company that
develops and operates projects in Central America and the CaribbeanChilquinta
    
    Chilquinta Energía S.A. and associated companies, our Power
Distribution business in ChileCNE
    
    Chilean National Energy Commission (Comisión Nacional de Energía)Colombian MME
    
    Colombian Ministry of Mines and EnergyCorinto
    
    Empresa Energética Corinto Ltd., one of our Nicaraguan Power
Generation businessesCREG
    
    Colombian Regulatory Commission for Energy and Gas (Comisión de
Regulación de Energía y Gas)Cuiabá Integrated Project
    
    Integrated project in Bolivia and Brazil consisting of EPE, GOB, GOM
and TBSDelsur
    
    Distribuidora de Electricidad Del Sur, S.A. de C.V., our El
Salvadorian Power Distribution businessDCL
    
    DHA Cogen Limited, our Pakistani Power Generation businessEcopetrol
    
    Ecopetrol S.A., the Colombian state-controlled petroleum companyEDELAR
    
    Empresa Distribuidora de La Rioja S.A., a subsidiary of EMDERSAEDEN
    
    Empresa Distribuidora de Energía Norte S.A., one of our Argentine
Power Distribution businessesEDESA
    
    Empresa Distribuidora de Salta S.A., a subsidiary of EMDERSAEDESAL
    
    Empresa Distribuidora de San Luis S.A., a subsidiary of EMDERSAEEGSA
    
    Empresa Eléctrica de Guatemala S.A., a Guatemalan power distributorEGSSA
    
    EMDERSA Generacíon Salta S.A., a subsidiary of EMDERSAEl Arrayán
    
    Parque Eólico El Arrayán, a Chilean wind project under development in
partnership with PatternElektra
    
    Elektra Noreste, S.A., our Panamanian Power Distribution business and
one of our predecessor companiesElektro
    
    Elektro Eletricidad e Serviços S.A., our Brazilian Power Distribution
businessEmgasud
    
    Emgasud S.A., our Argentine Power Generation, Natural Gas
Transportation and Services and Natural Gas Distribution businessEMDERSA
    
    Empresa Distribuidora Electrica Regional S.A., one of our Argentine
Power Distribution holding companiesENARSA
    
    Energía Argentina S.A., an Argentine state-run power companyEnersud
    
    Enersud Energy S.A., a subsidiary of Emgasud
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ENS
    
    Elektrocieplownia Nowa Sarzyna Sp. z.o.o., our Polish Power Generation
businessEPE
    
    Empresa Produtora de Energia Ltda., one of our Brazilian Power
Generation businesses and part of the Cuiabá Integrated ProjectESED
    
    Empresa de Sistemas Eléctricos Dispersos, a subsidiary of EDESAEton Park
    
    Eton Park Capital Management, L.P., a hedge fund that owns a portion
of AEI common sharesFenix
    
    Fenix Power Peru S.A., our Peruvian company in the advanced stages of
developing a combined-cycle power plant in Chilca, PeruGases de Occidente
    
    Gases de Occidente S.A. E.S.P., one of our Colombian Natural Gas
Distribution businessesGases del Caribe
    
    Gases del Caribe S.A. E.S.P., one of our Colombian Natural Gas
Distribution businessesGBS
    
    Gases de Boyacá y Santander, GBS S.A., one of our Colombian Natural
Gas Distribution businesses and part of PromigasGazel
    
    Gas Natural Comprimido S.A., one of our Colombian Retail Fuel
businesses which is owned by ProenergíaGOB
    
    GasOriente Boliviano Ltda., one of our Bolivian Natural Gas
Transportation and Services businesses and part of the Cuiabá
Integrated ProjectGOM
    
    GasOcidente do Mato Grosso Ltda, one of our Brazilian Natural Gas
Transportation and Services businesses and part of the Cuiabá
Integrated ProjectGTB
    
    Gas Transboliviano S.A., one of our Bolivian Natural Gas
Transportation and Services businesses and part of the
Bolivia-to-Brazil PipelineHuatong
    
    Huatong (Shanghai) Investment Co., Ltd., our Chinese Natural Gas
Distribution businessJaguar
    
    Jaguar Energy Guatemala LLC, our Guatemalan company in the advanced
stages of developing a solid fuel-fired power generation facility in
Puerto Quetzal, GuatemalaJPPC
    
    Jamaica Private Power Company Ltd., our Jamaican Power Generation
businessJPS
    
    Jamaica Public Services Company Limited, a private/public power companyKESC
    
    Karachi Electric Supply Company, a private Pakistani power companyLuoyang
    
    Luoyang Sunshine Cogeneration Co., Ltd., our Chinese Power Generation
businessLuz del Sur
    
    Luz del Sur S.A. A. and associated companies, our Power Distribution
business in PeruMEM
    
    Peruvian Ministry of Energy and Mines
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MENR
    
    Turkish Ministry of Energy and Natural ResourcesMetroGas
    
    MetroGas S.A., an Argentine Natural Gas Distribution businessNPC
    
    National Power Corporation of the PhilippinesOSINERGMIN
    
    Peruvian Supervisory Organization of Investment in Energy and Mining
(Organismo Supervisor de la Inversión en Energía y Mineria)Pattern
    
    Pattern Energy, our partner in the joint development of potential wind
projects in Brazil, Argentina and ChilePDVSA
    
    Petróleos de Venezuela, S.A., the Venezuelan state-owned oil companyPDVSA Gas
    
    A wholly-owned subsidiary of PDVSAPEI
    
    Prisma Energy International, Inc., one of our predecessor companiesPoliwatt
    
    Politwatt Limitada, a wholly owned subsidiary of PQPPQP
    
    Puerto Quetzal Power LLC, our Guatemalan Power Generation businessProenergía
    
    Proenergía Internacional S.A, the holding company of SIE and our
Retail Fuel businessesPromigas
    
    Promigas S.A. ESP, our Colombian company which holds the interests in
our Colombian Natural Gas Transportation and Services and Natural Gas
Distribution businessesPromigas Pipeline
    
    1,297 mile pipeline in Colombia extending along the Atlantic coast
from Ballena to Jobo, which is owned by PromigasPSI
    
    Promigas Servicios Integrados, one of our Colombian Natural Gas
Transportation and Services businessesSan Felipe
    
    Generadora San Felipe Limited Partnership, our Dominican Republic
Power Generation businessSempra
    
    Sempra Energy International, a California corporation that operates
natural gas-fired power plants, pipelines and storage facilities
globally, and our partner in Chilquinta and Luz del SurSES
    
    Synthesis Energy Systems, Inc., an energy and technology company in
which we investedShell
    
    Royal Dutch Shell plc and its affiliatesSIE
    
    Sociedad de Inversiones de Energía S.A., our Colombian holding company
owned by ProenergíaSIGET
    
    El Salvador General Superintendency of Electricity and
Telecommunications (Superintendencia General de Electricidad y
Telecomunicaciones)SSGC
    
    Sui Southern Gas Company Ltd., a distributor of natural gas in PakistanSubic
    
    Subic Power Corp., a Philippine Power Generation business
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Surtigas
    
    Surtigas S.A. E.S.P., one of our Colombian Natural Gas Distribution
businessesTBG
    
    Transportadora Brasileira Gasoduto, one of our Brazilian Natural Gas
Transportation and Services businesses and part of the
Bolivia-to-Brazil PipelineTBS
    
    Transborder Gas Services, one of our Brazilian Natural Gas
Transportation and Services businesses and part of the Cuiabá
Integrated ProjectTerpel
    
    Organización Terpel Inversiones S.A., one of our Colombian Retail Fuel
businesses, which is owned by ProenergíaTETAŞ
    
    Türkiye Elektrik Ticaret ve Taahüt A.S., a Turkish state-run power
companyTGI
    
    Transportadora de Gas del Interior, entity recently privatized by the
Colombian governmentTGS
    
    Transportadora de Gas del Sur S.A., an Argentine Natural Gas
Transportation and Services businessTipitapa
    
    Tipitapa Power Company Ltd., one of our Nicaraguan Power Generation
businessesTongda
    
    Tongda Energy Private Limited, one of our Chinese Natural Gas
Distribution businessesTrakya
    
    Trakya Elektrik Üretim ve Ticaret A.Ş., our Turkish Power Generation
businessTransmetano
    
    Transmetano S.A. ESP, one of our Colombian Natural Gas Transportation
and Services businessesTransoccidente
    
    Transoccidente S.A. ESP, one of our Colombian Natural Gas
Transportation and Services businessesTransoriente
    
    Transoriente S.A. ESP, one of our Colombian Natural Gas Transportation
and Services businessesTransredes
    
    Transredes-Transporte de Hidrocarburos S.A., a Bolivian Natural Gas
Transportation and Services businessVengas
    
    Vengas S.A., a Venezuelan Retail Fuel business, in which we sold our
interest in November 2007 to PDVSAYPFB
    
    Yacimientos Petrolíferos Fiscales Bolivianos, the Bolivian state-owned
energy company
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PART I
 
 Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
   -12-




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Item 3. Key Information
 
 A. Selected Financial Data
   AEI and Elektra
  Elektra Noreste,S.A. (Predecessor)
    
    
    AEI (Successor)For the 275-
    
    
    For the 90-DayDay Period From
    
    
    Period FromJanuary 1,
    
    
    October 3,
    
    
    For the Year Ended
    
    
    For the Year Ended
    
    
    For the Year Ended
    
    
    For the Year Ended2005 to
    
    
    2005 to
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,October 2, 2005
    
    
    December 31, 2005
    
    
    2006(1)
    
    
    2007
    
    
    2008
    
    
    2009Millions of dollars (U.S.) except per share dataStatement of Operations Data:Revenues
    
    $
    200
    
    
    $
    72
    
    
    $
    946
    
    
    $
    3,216
    
    
    $
    9,211
    
    
    $
    8,185Cost of sales
    
    
    140
    
    
    
    53
    
    
    
    566
    
    
    
    1,796
    
    
    
    7,347
    
    
    
    6,238Operating expenses:Operations, maintenance,
general and administrative
expenses
    
    
    22
    
    
    
    7
    
    
    
    193
    
    
    
    630
    
    
    
    894
    
    
    
    863Depreciation and amortization
    
    
    9
    
    
    
    3
    
    
    
    59
    
    
    
    217
    
    
    
    268
    
    
    
    272Taxes other than income
    
    
    1
    
    
    
    
    
    
    
    7
    
    
    
    43
    
    
    
    43
    
    
    
    45Other charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50
    
    
    
    56
    
    
    
    123(Gain) loss on disposition of
assets
    
    
    1
    
    
    
    
    
    
    
    7
    
    
    
    (21
    )
    
    
    (93
    )
    
    
    20Equity income from
unconsolidated affiliates
    
    
    
    
    
    
    
    
    
    
    37
    
    
    
    76
    
    
    
    117
    
    
    
    107Operating income
    
    
    27
    
    
    
    9
    
    
    
    151
    
    
    
    577
    
    
    
    813
    
    
    
    731Interest income
    
    
    1
    
    
    
    
    
    
    
    71
    
    
    
    110
    
    
    
    88
    
    
    
    74Interest expense
    
    
    (6
    )
    
    
    (3
    )
    
    
    (138
    )
    
    
    (306
    )
    
    
    (378
    )
    
    
    (327
    )Foreign currency transactions
gain (loss), net
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    19
    
    
    
    (56
    )
    
    
    9Gain (loss) on early retirement
of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33
    )
    
    
    
    
    
    
    10Other income (expense), net
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    (22
    )
    
    
    9
    
    
    
    70Income before income taxes
    
    
    22
    
    
    
    6
    
    
    
    86
    
    
    
    345
    
    
    
    476
    
    
    
    567Provisions for income tax
    
    
    7
    
    
    
    2
    
    
    
    84
    
    
    
    193
    
    
    
    194
    
    
    
    279Income from continuing
operations
    
    
    15
    
    
    
    4
    
    
    
    2
    
    
    
    152
    
    
    
    282
    
    
    
    288Income from discontinued
operations, net of tax
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    3
    
    
    
    
    
    
    
    Gain from disposal of
discontinued operations,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41
    
    
    
    
    
    
    
    Net income (loss)
    
    
    15
    
    
    
    4
    
    
    
    9
    
    
    
    196
    
    
    
    282
    
    
    
    288Less: Net income (loss) 
noncontrolling interests
    
    
    
    
    
    
    2
    
    
    
    20
    
    
    
    65
    
    
    
    124
    
    
    
    (9
    )Net income attributable to
Elektra Noreste S.A.
shareholders
    
    $
    15Net income (loss)
attributable to AEI shareholders
    
    
    
    
    
    $
    2
    
    
    $
    (11
    )
    
    $
    131
    
    
    $
    158
    
    
    $
    297
  -13-




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##### Table of Contents



Elektra Noreste,S.A. (Predecessor)
    
    
    AEI (Successor)For the 275-
    
    
    For the 90-DayDay Period From
    
    
    Period FromJanuary 1,
    
    
    October 3,
    
    
    For the Year Ended
    
    
    For the Year Ended
    
    
    For the Year Ended
    
    
    For the Year Ended2005 to
    
    
    2005 to
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,October 2, 2005
    
    
    December 31, 2005
    
    
    2006(1)
    
    
    2007
    
    
    2008
    
    
    2009Millions of dollars (U.S.) except per share dataCash Flow Data:Net cash flows provided by
(used in):Operating activities
    
    $
    19
    
    
    $
    12
    
    
    $
    155
    
    
    $
    686
    
    
    $
    508
    
    
    $
    821Investing activities
    
    
    (13
    )
    
    
    (6
    )
    
    
    (1,729
    )
    
    
    (1,151
    )
    
    
    (414
    )
    
    
    (559
    )Financing activities
    
    
    (12
    )
    
    
    (5
    )
    
    
    2,395
    
    
    
    88
    
    
    
    173
    
    
    
    (370
    )Capital expenditures
    
    
    (13
    )
    
    
    (6
    )
    
    
    (76
    )
    
    
    (249
    )
    
    
    (372
    )
    
    
    (441
    )Other Financial Data:Adjusted EBITDA(2)
    
    
    
    
    
    
    
    
    
    
    217
    
    
    
    823
    
    
    
    1,044
    
    
    
    1,146Basic and diluted earnings per
share:Income (loss) from continuing
operations attributable
to AEI shareholders
    
    
    
    
    
    
    
    
    
    
    (0.09
    )
    
    
    0.42
    
    
    
    0.73
    
    
    
    1.27Net income (loss) attributable
to AEI shareholders
    
    
    
    
    
    
    
    
    
    
    (0.05
    )
    
    
    0.63
    
    
    
    0.73
    
    
    
    1.27Weighted average shares
outstanding
    
    
    
    
    
    
    
    
    
    
    202
    
    
    
    209
    
    
    
    218
    
    
    
    234
 AEIAs of
    
    
    As of
    
    
    As of
    
    
    As of
    
    
    As ofDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009Balance Sheet Data:Property, plant and equipment (net)
    
    $
    228
    
    
    $
    2,307
    
    
    $
    3,035
    
    
    $
    3,524
    
    
    $
    4,200Total assets
    
    
    568
    
    
    
    6,134
    
    
    
    7,853
    
    
    
    8,953
    
    
    
    10,225Long-term debt
    
    
    90
    
    
    
    2,390
    
    
    
    2,515
    
    
    
    3,415
    
    
    
    3,105Total debt
    
    
    100
    
    
    
    2,677
    
    
    
    3,264
    
    
    
    3,962
    
    
    
    3,718Net debt(2)
    
    
    91
    
    
    
    1,591
    
    
    
    2,525
    
    
    
    3,094
    
    
    
    2,896Total equity attributable to AEI
    
    
    327
    
    
    
    1,441
    
    
    
    1,858
    
    
    
    1,830
    
    
    
    2,832
 
 (1)
    
    Includes Elektra on a consolidated basis for the entire year and PEI on the equity method
basis from June through August and on a consolidated basis from September to December.(2)
    
    See Non-GAAP Financial Measures.  AEIAs of
    
    
    As of
    
    
    As of
    
    
    As of
    
    
    As ofDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009Total debt
    
    $
    100
    
    
    $
    2,677
    
    
    $
    3,264
    
    
    $
    3,962
    
    
    $
    3,718LessCash and cash equivalents
    
    
    (6
    )
    
    
    (830
    )
    
    
    (516
    )
    
    
    (736
    )
    
    
    (682
    )Current restricted cash
    
    
    
    
    
    
    (117
    )
    
    
    (95
    )
    
    
    (83
    )
    
    
    (77
    )Non-current restricted cash
    
    
    (3
    )
    
    
    (139
    )
    
    
    (128
    )
    
    
    (49
    )
    
    
    (63
    )Net debt
    
    $
    91
    
    
    $
    1,591
    
    
    $
    2,525
    
    
    $
    3,094
    
    
    $
    2,896
  -14-




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##### Table of Contents



Natural GasPower
    
    
    Power
    
    
    Transportation
    
    
    Natural GasDistribution
    
    
    Generation
    
    
    and Services
    
    
    Distribution
    
    
    Retail Fuel
    
    
    Other
    
    
    TotalMillions of dollars (U.S.)Net income (loss)
attributable to AEI
    
    $
    276
    
    
    $
    62
    
    
    $
    48
    
    
    $
    43
    
    
    $
    15
    
    
    $
    (147
    )
    
    $
    297Depreciation and
amortization
    
    
    134
    
    
    
    42
    
    
    
    21
    
    
    
    23
    
    
    
    46
    
    
    
    6
    
    
    
    272Net income (loss)
noncontrolling
interests
    
    $
    14
    
    
    $
    (37
    )
    
    $
    (78
    )
    
    $
    42
    
    
    $
    48
    
    
    $
    2
    
    
    $
    (9
    )Provision for
income taxes
    
    
    117
    
    
    
    60
    
    
    
    31
    
    
    
    30
    
    
    
    40
    
    
    
    1
    
    
    
    279Interest expense
    
    
    93
    
    
    
    57
    
    
    
    41
    
    
    
    17
    
    
    
    52
    
    
    
    67
    
    
    
    327Subtract:Interest income
    
    
    46
    
    
    
    15
    
    
    
    5
    
    
    
    2
    
    
    
    6
    
    
    
    
    
    
    
    74Foreign currency
transaction gain
(loss), net
    
    
    
    
    
    
    5
    
    
    
    3
    
    
    
    2
    
    
    
    9
    
    
    
    (10
    )
    
    
    9Gain (loss) on
disposition of
assets
    
    
    (22
    )
    
    
    
    
    
    
    4
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    (20
    )Gain on early
retirement of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    10Other charges
    
    
    
    
    
    
    (25
    )
    
    
    (96
    )
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    (123
    )Other income
(expense), net
    
    
    42
    
    
    
    24
    
    
    
    2
    
    
    
    
    
    
    
    (1
    )
    
    
    3
    
    
    
    70Adjusted EBITDA
    
    $
    568
    
    
    $
    165
    
    
    $
    145
    
    
    $
    153
    
    
    $
    187
    
    
    $
    (72
    )
    
    $
    1,146
  Natural GasPower
    
    
    Power
    
    
    Transportation
    
    
    Natural GasDistribution
    
    
    Generation
    
    
    and Services
    
    
    Distribution
    
    
    Retail Fuel
    
    
    Other
    
    
    TotalMillions of dollars (U.S.)Net income (loss)
attributable to AEI
    
    $
    209
    
    
    $
    (16
    )
    
    $
    53
    
    
    $
    26
    
    
    $
    17
    
    
    $
    (131
    )
    
    $
    158Depreciation and
amortization
    
    
    138
    
    
    
    24
    
    
    
    21
    
    
    
    18
    
    
    
    61
    
    
    
    6
    
    
    
    268Net income (loss)
noncontrolling
interests
    
    
    12
    
    
    
    (49
    )
    
    
    21
    
    
    
    30
    
    
    
    93
    
    
    
    17
    
    
    
    124Provision for
income taxes
    
    
    110
    
    
    
    43
    
    
    
    25
    
    
    
    28
    
    
    
    21
    
    
    
    (33
    )
    
    
    194Interest expense
    
    
    134
    
    
    
    45
    
    
    
    44
    
    
    
    19
    
    
    
    53
    
    
    
    83
    
    
    
    378Subtract:Interest income
    
    
    54
    
    
    
    14
    
    
    
    6
    
    
    
    2
    
    
    
    9
    
    
    
    3
    
    
    
    88Foreign currency
transaction gain
(loss), net
    
    
    (5
    )
    
    
    (25
    )
    
    
    (1
    )
    
    
    (3
    )
    
    
    (28
    )
    
    
    6
    
    
    
    (56
    )Gain (loss) on
disposition of
assets
    
    
    (19
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    43
    
    
    
    93Other charges
    
    
    
    
    
    
    (44
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12
    )
    
    
    (56
    )Other income
(expense), net
    
    
    (11
    )
    
    
    19
    
    
    
    10
    
    
    
    (1
    )
    
    
    (15
    )
    
    
    7
    
    
    
    9Adjusted EBITDA
    
    $
    584
    
    
    $
    83
    
    
    $
    149
    
    
    $
    123
    
    
    $
    210
    
    
    $
    (105
    )
    
    $
    1,044
  -15-




---



##### Table of Contents



Natural GasPower
    
    
    Power
    
    
    Transportation
    
    
    Natural GasDistribution
    
    
    Generation
    
    
    and Services
    
    
    Distribution
    
    
    Retail Fuel
    
    
    Other
    
    
    TotalMillions of dollars (U.S.)Net income (loss)
attributable to
AEI
    
    $
    227
    
    
    $
    83
    
    
    $
    53
    
    
    $
    22
    
    
    $
    55
    
    
    $
    (309
    )
    
    $
    131Depreciation and
amortization
    
    
    139
    
    
    
    42
    
    
    
    20
    
    
    
    8
    
    
    
    3
    
    
    
    5
    
    
    
    217Net income (loss)
 noncontrolling
interests
    
    
    11
    
    
    
    10
    
    
    
    15
    
    
    
    31
    
    
    
    13
    
    
    
    (15
    )
    
    
    65Provision for income taxes
    
    
    105
    
    
    
    (16
    )
    
    
    29
    
    
    
    20
    
    
    
    12
    
    
    
    43
    
    
    
    193Interest expense
    
    
    90
    
    
    
    41
    
    
    
    42
    
    
    
    14
    
    
    
    12
    
    
    
    107
    
    
    
    306Subtract:Income from
discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    3Gain from disposal of
discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41
    
    
    
    
    
    
    
    41Interest income
    
    
    58
    
    
    
    27
    
    
    
    7
    
    
    
    2
    
    
    
    2
    
    
    
    14
    
    
    
    110Foreign currency
transaction gain (loss),
net
    
    
    3
    
    
    
    19
    
    
    
    (3
    )
    
    
    2
    
    
    
    
    
    
    
    (2
    )
    
    
    19Gain (loss) on
disposition of
assets
    
    
    (10
    )
    
    
    21
    
    
    
    6
    
    
    
    3
    
    
    
    1
    
    
    
    
    
    
    
    21Other charges
    
    
    
    
    
    
    (50
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50
    )Loss on early retirement
of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33
    )
    
    
    (33
    )Other income (expense),
net
    
    
    (2
    )
    
    
    (5
    )
    
    
    6
    
    
    
    (2
    )
    
    
    (2
    )
    
    
    (17
    )
    
    
    (22
    )Adjusted EBITDA
    
    $
    523
    
    
    $
    148
    
    
    $
    143
    
    
    $
    90
    
    
    $
    50
    
    
    $
    (131
    )
    
    $
    823
  Natural GasPower
    
    
    Power
    
    
    Transportation
    
    
    Natural GasDistribution
    
    
    Generation
    
    
    and Services
    
    
    Distribution
    
    
    Retail Fuel
    
    
    Other
    
    
    TotalMillions of dollars (U.S.)Net income (loss)
attributable to
AEI
    
    $
    93
    
    
    $
    18
    
    
    $
    15
    
    
    $
    1
    
    
    $
    2
    
    
    $
    (140
    )
    
    $
    (11
    )Depreciation and
amortization
    
    
    47
    
    
    
    9
    
    
    
    2
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    59Net income
noncontrolling
interests
    
    
    9
    
    
    
    8
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20Provision for
income taxes
    
    
    40
    
    
    
    32
    
    
    
    4
    
    
    
    
    
    
    
    5
    
    
    
    3
    
    
    
    84Interest expense
    
    
    27
    
    
    
    18
    
    
    
    5
    
    
    
    
    
    
    
    2
    
    
    
    86
    
    
    
    138Subtract:Income from
discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    7Interest income
    
    
    20
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    71Foreign currency
transaction
loss, net
    
    
    (4
    )
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )Loss on
disposition of
assets
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )Other income
(expense), net
    
    
    2
    
    
    
    5
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    7Adjusted EBITDA
    
    $
    205
    
    
    $
    70
    
    
    $
    22
    
    
    $
    1
    
    
    $
    3
    
    
    $
    (84
    )
    
    $
    217
  -16-




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##### Table of Contents



PEI
  Prisma Energy International Inc. (Predecessor)For the Year Ended
    
    
    For the 249-Day PeriodDecember 31, 2005
    
    
    Ended September 6, 2006Millions of dollars (U.S.)Statement of Operations Data:Revenues
    
    $
    1,901
    
    
    $
    1,414Cost of sales
    
    
    930
    
    
    
    750Operating expensesOperations, maintenance, general and administrative
    
    
    387
    
    
    
    233Depreciation and amortization
    
    
    101
    
    
    
    63Taxes other than income
    
    
    31
    
    
    
    32Loss on disposition of assets
    
    
    14
    
    
    
    6Equity income from unconsolidated affiliates
    
    
    109
    
    
    
    35Operating income
    
    
    547
    
    
    
    365Interest income from unconsolidated affiliates
    
    
    4
    
    
    
    2Interest income
    
    
    97
    
    
    
    80Interest expense
    
    
    (104
    )
    
    
    (96
    )Foreign currency transaction gain, net
    
    
    95
    
    
    
    17Other income (expense), net
    
    
    71
    
    
    
    26Income before income taxes
    
    
    710
    
    
    
    394Provision for income taxes
    
    
    181
    
    
    
    209Net income
    
    
    529
    
    
    
    185Less: Net income  noncontrolling interests
    
    
    79
    
    
    
    21Net income attributable to PEI shareholders
    
    $
    450
    
    
    $
    164Cash Flow Data:Net cash flows provided by (used in):Operating activities
    
    $
    507
    
    
    $
    448Investing activities
    
    
    186
    
    
    
    (448
    )Financing activities
    
    
    (169
    )
    
    
    (580
    )Capital expenditures
    
    
    (97
    )
    
    
    (72
    )
 Prisma Energy International Inc.(Predecessor)As of December 31, 2005Millions of dollars (U.S.)Balance Sheet Data:Property, plant and equipment (net)
    
    $
    1,629Total Assets
    
    
    4,759Long-term debt
    
    
    748Total debt
    
    
    870Net debt(1)
    
    
    (375
    )Total equity attributable to PEI
    
    
    2,471
 
 (1)
    
    See Non-GAAP Financial Measures.  Prisma Energy International Inc.(Predecessor)As of December 31, 2005Millions of dollars (U.S.)Total debt
    
    $
    870LessCash and cash equivalents
    
    
    (1,046
    )Current restricted cash
    
    
    (150
    )Non-current restricted cash
    
    
    (49
    )Net debt
    
    $
    (375
    )
 
 B. Capitalization and Indebtedness
   -17-




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##### Table of Contents



C. Reasons for the Offer and Use of Proceeds
  
 D. Risk Factors
 Risks Associated with the Countries in which We Operate
 Our businesses are in emerging markets. Our results of operations and financial condition are
dependent upon economic conditions in those countries in which we operate, and any decline in
economic conditions could harm our results of operations or financial condition.
  Governments have a high degree of influence in the economies in which we operate. This influence
could harm our results of operations or financial condition.
  
    
    consumption of electricity and natural gas;
    
    supply of electricity and natural gas;
    
    energy policy;
    
    subsidies and incentives;
    
    regulated returns and associated tariffs;
    
    labor laws;
    
    economic growth;
    
    currency fluctuations;
    
    inflation;
    
    exchange and capital control policies;
    
    interest rates;
    
    liquidity of domestic capital and lending markets;
    
    fiscal policy;
    
    tax laws, including the effect of tax laws on distributions from our subsidiaries;
  -18-




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##### Table of Contents




    
    import/export restrictions; and
    
    other political, social and economic developments in or affecting the country where
each business is based.
   The uncertainty of the legal and regulatory environments in certain countries in which we operate,
develop or construct infrastructure assets may make it difficult for us to enforce our rights under
agreements relating to our businesses.
   
    
    forced renegotiation or modification of concession, supply and sales agreements;
    
    termination of permits or concessions; and
    
    withdrawal or threatened withdrawal of countries from international arbitration
conventions.
 Currency exchange rate fluctuations relative to the U.S. dollar in the countries in which we
operate our businesses may adversely impact our results of operations or financial condition
    -19-




---



##### Table of Contents



Existing and new exchange rate controls and/or restrictions on transfers to foreign investors of
proceeds from their investments and/or measures to control the proceeds that enter into the country
would restrict or impair our ability to receive distributions from our subsidiaries or could affect our ability to access the
international capital markets and adversely affect our results of operations or financial
condition.
  We may be affected by terrorism, border conflict, or civil unrest in the countries in which we
operate, which could affect our assets, our ability to operate and our personnel.
  Inflation in some of the countries in which we operate, along with governmental measures to combat
inflation, may have a significant negative effect on the economies of those countries and, as a
result, on our financial condition or results of operations.
    The Bolivian and Venezuelan governments have nationalized energy industry assets, and our remaining
businesses in Bolivia and Venezuela may also be nationalized.
   -20-




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##### Table of Contents



Lack of transparency, threat of fraud, public sector corruption and other forms of criminal
activity involving government officials increases risk for potential liability under anti-bribery
legislation, including the U.S. Foreign Corrupt Practices Act.
  Risks Relating to the Industries in which We Operate
 Most of our businesses are subject to significant governmental regulations and our results of
operations and financial condition could be adversely affected by changes in the law or regulatory
schemes.
  
    
    changes or terminations of key permits, operating licenses or concessions;
    
    changes in the determination, definition or classification of costs to be included as
controllable or noncontrollable pass-through costs;
    
    changes in the methodology of calculating or the timing of tariff revisions and changes
in the tariffs regulated returns;
    
    changes in the definition of events which may or may not qualify as changes in economic
equilibrium under the terms of concession agreements;
    
    changes in rules governing energy supply and purchase contracts;
    
    changes in subsidies and/or incentives provided by governments;
    
    changes in rules governing dispatch order;
    
    changes in methodology of calculating firm capacity payment charges and frequency of
adjustment of those charges;
    
    changes in market rules for the calculation of energy marginal costs and spot prices;
    
    changes in calculation of transportation/transmission rates; and
    
    other changes in the regulatory determinations under the relevant concessions or
licenses.
  -21-




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##### Table of Contents



The tariffs of most of our business segments are regulated and periodically revised by regulators.
Reductions in tariffs could result in the inability of our businesses to recover operating costs,
including commodity costs, and/or investments and maintain current operating margins.
  Some of our markets may face power rationings, which could lead to a reduction in the level and/or
growth in electricity consumption and sales.
  Many of our businesses operate under concessions granted by the various countries in which we
operate and we are subject to penalties, including termination of the concession agreements, if we
do not comply with the terms of the concession agreements.
  
    
    warning notices;
    
    fines for breaches of concessions based on a percentage of revenues for the year
immediately before the violation date;
    
    temporary suspension from participating in bidding processes for new concessions;
    
    injunctions prohibiting investments in new facilities and equipment;
    
    restrictions to the operations of existing facilities and equipment;
    
    intervention by the authority granting our concession; and
    
    possible termination or non-renewal of our concession.
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Our results of operations or financial condition may be adversely affected if we are unable to
address various operating risks typically faced by companies in the energy business.
  
    
    periodic service disruptions and variations in power quality in our Power Distribution
businesses, which may result in significant revenue loss and potential liabilities to third
parties;
    
    fluctuations or a decline in aggregate customer demand for energy in line with
prevailing economic conditions, which could result in decreased revenues;
    
    equipment or other failures at our facilities causing unplanned outages;
    
    the dependence of our Power Generation facilities on a specified fuel source, including
the quality and transportation of fuel, which could impact the operation of those
facilities;
    
    breakdown or failure of one of our Power Generation or Natural Gas Transportation and
Services facilities may prevent the facility from performing under applicable power sales
agreements or gas transportation agreements which, in certain situations, could result in
termination of the agreement or incurring liability for liquidated damages;
    
    service disruptions in our Natural Gas Transportation and Services and Natural Gas
Distribution businesses, reductions in customer demand or reductions in throughput could
result in reduced revenues from these businesses;
    
    failures and faults in the electricity transmission system or in the electricity
generation facilities of Power Generation companies due to circumstances beyond our
control;
    
    system failure affecting our information technology systems or those of other energy
industry participants, which could result in loss of operational capacities or critical
data;
    
    environmental costs and liabilities arising from our operations, which may be difficult
to quantify and could affect our results of operations;
    
    underground storage tank leaks which could result in a contamination of our gas
facilities;
    
    energy losses, whether arising from technical reasons inherent in the normal operation
of electricity and liquids distribution systems or arising from non-technical reasons (such
as theft, fraud and inaccurate billing), resulting in revenue losses which we are unable to
pass-through to customers; and
    
    injuries to third parties or our employees in connection with our businesses, which may
result in liabilities, higher insurance costs or denial of insurance coverage.
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We are dependent on external parties and other factors for consumables, energy and fuel and our
inability to obtain these materials could adversely affect our financial condition or results of
operations.
  
    
    existing upstream energy reserves need to be available and new reserves developed in
order to efficiently utilize the capacity of our gas and liquids pipelines; any prolonged
interruption in our ability to access upstream reserves would affect our financial
condition or results of operations;
    
    if upstream reserves are depleted, and no new fields or wells are developed, the amount
of natural gas available for consumption will be reduced, and so will the volumes of
liquids and associated gas transported by our pipelines, and the availability of fuel for
our power plants or for resale by our Natural Gas Distribution and Retail Fuel businesses,
which could materially and adversely affect our results of operations or financial
condition;
    
    in the event that our local suppliers become unwilling or unable to supply fuel or
energy to our businesses, we may not have any remedies under our supply contracts, or such
remedies may not be sufficient to offset the potential incremental costs or reduction in
revenues;
    
    service disruptions, stoppages or variations in power quality contracted or transmitted
by third parties to our Power Distribution businesses could cause us to be unable to
distribute power to the end users of electricity. In that case, we would be unable to
receive revenues for power distribution, and may be subject to claims for damages from end
users, fines from regulators and the possible loss of our concessions; and
    
    should a neighboring government decide, for political reasons or otherwise, to curtail
or interrupt the transportation of fuel or energy required by our businesses to operate, an
alternate source for that fuel or energy may not be available, or become available, in
sufficient time to preclude an interruption of our operations. For example, Empresa
Produtora de Energia Ltda., or EPE, our Brazilian Power Generation business, has been
unable to obtain a gas supply due to a lack of supply combined with a sharp increase in
regional demand and has generally not been operational since August 2007.
 Risks Related to Our Businesses
 The operation of our businesses involves significant risks that could adversely affect our results
of operations or financial condition.
  
    
    the inability to obtain or renew required governmental concessions, permits and
approvals;
    
    fuel spillage, seepage or release of hazardous materials;
    
    the unavailability of critical equipment or parts;
    
    the unavailability or interruptions of fuel or energy supply;
    
    work stoppages and labor unrest;
    
    social unrest;
    
    operation and critical equipment failures;
    
    increases in line losses, including technical and commercial losses;
    
    forecasting errors for price and volume projections;
  -24-




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##### Table of Contents




    
    decreases in energy consumption;
    
    severe weather and seasonal variations;
    
    natural disasters or catastrophic events that affect our physical assets or cause
interruptions in our ability to provide our services and products, particularly ones that
cause damage in excess of our insurance policy limits;
    
    injuries to people and damages to property resulting from transportation and handling
of electricity, natural gas, liquid fuels or hazardous materials;
    
    the possibility of material litigation and regulatory proceedings being brought against
us or our businesses;
    
    working capital constraints;
    
    operating cost overruns;
    
    construction and operational delays or unanticipated cost overruns; and
    
    performance of services from subcontractors.
  A failure to attract and retain skilled people could have a material adverse effect on our
operations.
  Our proposed acquisitions and development projects may not be completed or, if completed, may not
perform as expected. Our acquisition and development activities may consume a portion of our
managements focus, increase our leverage, and if not successful, reduce our profitability.
    
    
    acquired businesses may not perform as expected;
    
    we may incur unforeseen obligations or liabilities;
    
    acquired businesses may not generate sufficient cash flow to support the indebtedness
incurred to acquire them or the capital expenditures needed to operate them;
  -25-




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##### Table of Contents




    
    the rate of return from acquired businesses may be lower than anticipated in our
decision to invest our capital to acquire them; or
    
    we may not be able to expand as planned or to integrate the acquired companys
activities and achieve the economies of scale and any expected efficiency gains that often
drive such acquisitions.
  Competition to acquire energy assets is strong and could adversely affect our ability to grow.
  Our businesses are dependent on and we are exposed to credit risks and, in some instances, the
impact of credit concentration, arising out of the creditworthiness of customers who, for some of
our businesses, are limited in number. Therefore, if one of our businesses large customers were
to default on their obligations to us, it could adversely affect our financial condition or results
of operations.
   Our insurance policies may not fully cover damage or we may not be able to obtain insurance against
certain risks, and our results of operations may be adversely affected if we incur losses that are
not fully covered by our insurance policies.
   -26-




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We are strictly liable for any damages resulting from the inadequate rendering of electricity
services by our Power Distribution businesses, and any such liabilities could result in significant
additional costs to us and may adversely affect our financial condition or results of operations.
  Operador Nacional do Sistema
 We make noncontrolling investments in projects which may limit our ability to control the
development, construction, acquisition or operation of such investments and future acquisitions.
 i.e.
 Our businesses may incur substantial costs and liabilities and be exposed to commodity price
volatility, as a result of risks associated with the wholesale electricity markets, which could
have a material adverse effect on our financial condition or results of operations.
  We are subject to risks associated with climate change.
   -27-




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##### Table of Contents



Our equipment, facilities and operations are subject to numerous environmental, health and safety
laws and regulations that are expected to become more stringent in the future, which may result in
increased liabilities, compliance costs and increased capital expenditures.
   Financial Risks
 A downgrade in our credit ratings or that of our subsidiaries or those of the countries in which we
operate could adversely affect our ability to access the capital markets which could increase our
interest costs or adversely affect our financial condition or results of operations.
    We may not be able to raise sufficient capital to fund greenfield development in certain less
developed economies which could change or in some cases adversely affect our growth strategy.
   -28-




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Financial market developments may adversely affect our financial condition, results of operations
or access to capital.
  Risks Associated with our Structure
 We are a holding company and therefore are dependent upon the receipt of funds from our
subsidiaries by way of dividends, fees, interest, loans or otherwise. Failure to receive such
funds could impact our ability to pay our interest and other expenses at the parent company or to
pay dividends.
     -29-




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We are a Cayman Islands company and may not receive the diplomatic and treaty protections that a
U.S. company would receive in some of the countries where we do business, which could adversely
affect our ability to enforce our rights under our concessions and contracts.
  If ownership of our ordinary shares continues to be highly concentrated, it may prevent you and
other minority shareholders from influencing significant corporate decisions and policies.
  Our shareholders may compete with us for investment opportunities which could impair our ability to
consummate transactions.
  The interests of the group of shareholders that control us may be adverse to your interests.
    -30-




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##### Table of Contents



Item 4. Information on the Company
 
 A. History and Development of the Company
 Our Corporate Information
 www.aeienergy.com
 History
  
    
    Stage 1 (completed May 25, 2006) AEIL acquired 24.26% of the voting capital and 49%
of the economic interest in PEI.
    
    Stage 2 (completed September 7, 2006) AEIL acquired the remaining 75.74% of the
voting capital and the remaining 51% economic interest of PEI.
  
 B. Business Overview
   
    
    Power Distribution: approximately 27,300 GWh sold, 4.9 million electric power
customers, and 121,100 miles of power distribution and transmission lines;
    
    Power Generation: approximately 9,600 GWh sold, and 2,278 MW of electric power
generation capacity with an additional 300 MW under construction;
    
    Natural Gas Transportation and Services: approximately 3,300 mmcfd average throughput
and 4,900 miles of natural gas and gas liquids transportation pipelines;
    
    Natural Gas Distribution: approximately 400 mmcfd average sales, 2.5 million natural
gas distribution customers and 21,800 miles of natural gas distribution pipeline networks;
and
  -31-




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##### Table of Contents




    
    Retail Fuel: approximately 4.7 mm gal/day average throughput of liquid fuels, 34.9
mmcfd average sales of compressed natural gas, or CNG, and 1,861 owned and affiliated
gasoline and CNG service stations. Retail Fuel is a non-core business for us and we are
currently exploring strategic alternatives with respect to that business.
   (BAR CHART)
    
    (BAR CHART)Note: Excludes Headquarters and Eliminations
    
    Note: Excludes Headquarters and Eliminations
 Our Strategy
   
    
    apply operational, environmental and health and safety best practices to maximize the
operational performance and increase profitability and free cash flow of our existing
businesses;
    
    develop and maintain strong relationships with local regulators, governments, employees
and communities through active involvement in the regulatory process and the maintenance of
open communication channels;
    
    leverage our management teams and their relationships and market knowledge to optimize
the management of our businesses and identify and execute growth opportunities;
    
    maintain a predictable and flexible capital structure with moderate levels of debt
which allows us to take advantage of growth opportunities and reinvest cash flow to enhance
growth; and
  -32-




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##### Table of Contents




    
    integrate new businesses and share and employ best practices, both financial and
operational, to maximize performance.
 Our Competitive Strengths
  Exclusive focus in emerging markets
  We are focused on being well positioned in our four core segments of the energy infrastructure
industry and within five key emerging market regions
  Predictable and flexible financial profile to support growth
  Demonstrated capability to grow in a disciplined manner
  Operational excellence
   -33-




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##### Table of Contents



Experienced management team with strong local presence
  Our Business Segments
 Power Distribution
    Network
    
    
    
    
    
    
    EnergyCommercial
    
    
    Ownership
    
    
    Operating
    
    
    Length
    
    
    Customers
    
    
    Sold
    
    
    Concession
    
    
    Regulated
    
    
    Next TariffLocation
    
    
    Operations
    
    
    (%)
    
    
    Control
    
    
    (miles)
    
    
    (000s)
    
    
    (GWh)
    
    
    Termination
    
    

Return (1)
    
    
    ReviewAndeanLuz del Sur
    
    Peru
    
    
    1994
    
    
    
    37.97
    %
    
    Joint control
    
    
    11,565
    
    
    
    833
    
    
    
    5,488
    
    
    Indefinite
    (2)
    
    
    12.00
    %
    
    2013 (every 4 years)Chilquinta
    
    Chile
    
    
    1981
    
    
    
    50.00
    %
    
    Joint control
    
    
    5,169
    
    
    
    486
    
    
    
    2,281
    
    
    Indefinite
    (2)
    
    
    10.00
    %
    
    2012 (every 4 years)Southern ConeElektro
    
    Brazil
    
    
    1998
    
    
    
    99.68
    %
    
    Yes
    
    
    66,597
    
    
    
    2,123
    
    
    
    11,036
    
    
    
    2028
    (3)
    
    
    15.08
    %
    
    2011 (every 4 years)EMDERSA
    
    Argentina
    
    
    1993
    
    
    
    77.10
    %
    
    Yes
    
    
    15,885
    
    
    
    509
    
    
    
    2,814
    
    
    
    2010, 2016, 2018
    (4)
    
    
    10.59, 9.54, 12.00
    %%% (5)
    
    Every 5 years(6)EDEN
    
    Argentina
    
    
    1997
    
    
    
    90.00
    %
    
    Yes
    
    
    10,971
    
    
    
    327
    
    
    
    2,237
    
    
    
    2012
    (7)
    
    
    N/A
    
    
    undefinedCentral America/CaribbeanElektra
    
    Panama
    
    
    1998
    
    
    
    51.00
    %
    
    Yes
    
    
    5,605
    
    
    
    348
    
    
    
    2,351
    
    
    
    2013
    (8)
    
    
    10.73
    %
    
    2010 (every 4 years)Delsur
    
    El Salvador
    
    
    1996
    
    
    
    86.41
    %
    
    Yes
    
    
    5,313
    
    
    
    314
    
    
    
    1,141
    
    
    Indefinite
    (9)
    
    
    10.00
    %
    
    2012 (every 5 years)
 
 (1)
    
    Inflation adjusted on regulated asset base before tax.(2)
    
    Terminates only if the company breaches the concession.(3)
    
    Elektros concession is renewable for 30 years.(4)
    
    The current administrative period of the concessions for EDELAR, EDESA, and EDESAL expire in
2010, 2016 and 2018, respectively. The concessions for EDELAR and EDESAL are renewable for
10-year periods through 2090 and 2088, respectively, subject to winning a new bid. The
concession for EDESA is renewable for 15-year periods through 2046, subject to winning a new
bid.(5)
    
    The regulated returns for EDELAR, EDESA and EDESAL are 10.59%, 9.54% and 12.00% respectively.(6)
    
    The expected tariff reviews for EDESA and EDELAR are 2011 and 2013 respectively. The tariff for EDESAL is currently under review.(7)
    
    EDENs concession is renewable for 10-year terms through 2092, subject to winning a new bid.(8)
    
    Elektras concession is renewable for 15 years, subject to winning a new bid.(9)
    
    Terminates only if the company breaches the license.  -34-




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##### Table of Contents



Andean Power Distribution
 Luz del Sur S.A. (Luz del Sur)
   Organismo Supervisor de la Inversión en Energía y
Mineria
 Chilquinta Energía S.A. (Chilquinta)
  Comisión
Nacional de Energía
   -35-




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Southern Cone Power Distribution
 Elektro Eletricidade e Serviços S.A. (Elektro)
  Agência Nacional de Energia Elétrica
    reais
   -36-




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##### Table of Contents



Câmara de Comercialização de Energia Elétrica .
  Empresa Distribuidora Eléctrica Regional S.A. (EMDERSA)
     -37-




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##### Table of Contents



Empresa Distribuidora de Energía Norte S.A. (EDEN)
    Central America/Caribbean Power Distribution
 Elektra Noreste, S.A. (Elektra)
  Autoridad Nacional de los Servicios Públicos
  Distribuidora de Electricidad Del Sur, S.A. de C.V. (Delsur)
   -38-




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##### Table of Contents



Superintendencia General de Electricidad y Telecomunicaciones
  Power Generation
    Long-termEnergy
    
    Capacity
    
    
    
    Fuel SupplyCommercial
    
    Ownership
    
    Operating
    
    Primary
    
    Capacity
    
    Sold
    
    Contracted
    
    PPA
    
    AgreementLocation
    
    Operations
    
    (%)
    
    Control
    
    Fuel
    
    (MW)
    
    (GWh)
    
    (%)
    
    Termination
    
    TerminationSouthern ConeCuiabá  EPE
    
    Brazil
    
    1999
    
    100.00%
    
    Yes
    
    Natural Gas
    
    480
    
    0
    
    0%
    
    N/A
    
    
    N/AEmgasud
    
    Argentina
    
    1991(1)
    
    42.73%
    
    No
    
    Natural Gas
    
    205
    
    234
    
    100%
    
    2011-2012(2)
    
    MonthlyCentral America/CaribbeanPQP
    
    Guatemala
    
    1993
    
    100.00%
    
    Yes
    
    Bunker Fuel
    
    234
    
    1,502
    
    47%
    
    2013
    
    
    2013
    (3)San Felipe
    
    Dominican Rep.
    
    1994
    
    100.00%
    
    Yes
    
    Bunker Fuel
    
    180
    
    762
    
    94%
    
    2015
    
    
    N/ACorinto
    
    Nicaragua
    
    1999
    
    57.67%
    
    Yes
    
    Bunker Fuel
    
    71
    
    510
    
    71%
    
    2014
    
    
    2014
    (4)JPPC
    
    Jamaica
    
    1998
    
    84.42%
    
    Yes
    
    Bunker Fuel
    
    60
    
    438
    
    100%
    
    2018
    
    
    2018Tipitapa
    
    Nicaragua
    
    1999
    
    57.67%
    
    Yes
    
    Bunker Fuel
    
    51
    
    391
    
    100%
    
    2014
    
    
    2014Amayo
    
    Nicaragua
    
    2009
    
    13.42%
    
    No
    
    Wind
    
    40
    
    109
    
    100%
    
    2024
    
    
    N/AChinaLuoyang
    
    China
    
    2006
    
    50.00%
    
    Yes
    
    Coal
    
    270
    
    1,036
    
    0%
    
    Annually
    
    
    N/AEurope/Middle East/North AfricaTrakya
    
    Turkey
    
    1999
    
    90.00%
    
    Yes
    
    Natural Gas
    
    478
    
    3,794
    
    100%
    
    2019
    
    
    2014
    (5)ENS
    
    Poland
    
    2000
    
    100.00%
    
    Yes
    
    Natural Gas
    
    116
    
    755
    
    0%
    
    2010
    
    
    2019DCL
    
    Pakistan
    
    2008
    
    60.23%
    
    Yes
    
    Natural Gas
    
    94
    
    57
    
    76%
    
    2010
    
    
    2038
 
 (1)
    
    Power Generation operations began in 2008.(2)
    
    The majority of Emgasuds PPAs terminate in 2011 or 2012 and provide for an extension of two
additional years.(3)
    
    PQPs fuel supply agreement has an option to extend to 2016.(4)
    
    Corintos fuel supply agreement has an option to extend to 2017.(5)
    
    Trakyas fuel supply agreement provides for an extension to 2019, subject to the availability
of natural gas.  -39-




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##### Table of Contents



Southern Cone Power Generation
 Cuiabá  EPE  Empresa Produtora de Energia Ltda. (EPE)
  Emgasud S.A. (Emgasud)
       -40-




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##### Table of Contents



Central America/Caribbean Power Generation
 Puerto Quetzal Power LLC (PQP)
    Generadora San Felipe Limited Partnership (San Felipe)
  Corporación Dominicana de
Empresas Eléctricias Estatales
  Empresa Energética Corinto Ltd. (Corinto)
   -41-




---



##### Table of Contents



Jamaica Private Power Company Ltd. (JPPC)
    Tipitapa Power Company Ltd. (Tipitapa)
    Consorcio Eólico Amayo S.A. (Amayo)
   -42-




---



##### Table of Contents



China Power Generation
 Luoyang Sunshine Cogeneration Co., Ltd. (Luoyang)
  renminbi
   Europe/Middle East/North Africa Power Generation
 Trakya Elektrik Uretim ve Ticaret A.S. (Trakya)
    -43-




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##### Table of Contents



lira
  Elektrocieplownia Nowa Sarzyna Sp. z.o.o. (ENS)
  zloty
 zlotys
  DHA Cogen Limited (DCL)
   -44-




---



##### Table of Contents



Power Generation Growth
  Jaguar Energy Guatemala LLC (Jaguar)
   -45-




---



##### Table of Contents



Fenix Power Peru S.A. (Fenix)
  Pattern Energy Joint Development
   Natural Gas Transportation and Services
    -46-




---



##### Table of Contents



Network
    
    
    
    Avg.
    
    CapacityCommercial
    
    Ownership
    
    Operating
    
    Length
    
    Capacity
    
    Throughput
    
    Contracted
    
    Concession
    
    Regulated
    
    
    Next TariffLocation
    
    Operations
    
    (%)
    
    Control
    
    (miles)
    
    (mmcfd)
    
    (mmcfd)
    
    (%)
    
    Termination
    
    Return(1)
    
    
    ReviewAndeanPromigas  Promigas Pipeline
    
    Colombia
    
    1974
    
    52.13%
    
    Yes (2)
    
    1,271
    
    545
    
    359
    
    100%
    
    2026
    
    
    12.96-16.94
    %
    
    2010 (every 5 years)Promigas 
Centragas
    
    Colombia
    
    1996
    
    13.03%
    
    Yes (2)
    
    458
    
    200
    
    172
    
    N/A
    
    2011
    
    
    N/A
    
    
    
    N/APromigas  Transmetano
    
    Colombia
    
    1993
    
    50.65%
    
    Yes (2)
    
    93
    
    73
    
    34
    
    92%
    
    2044
    
    
    12.56-16.56
    %
    
    2010 (every 5 years)Promigas  Transoccidente
    
    Colombia
    
    1998
    
    35.89%
    
    Yes (2)
    
    7
    
    69
    
    35
    
    42%
    
    N/A
    
    
    13.04-17.00
    %
    
    2010 (every 5 years)Promigas  GBS
    
    Colombia
    
    1999
    
    49.54%
    
    Yes (2)
    
    196
    
    62
    
    10
    
    N/A
    
    2009
    
    
    N/A
    
    
    
    N/APromigas  Transoriente
    
    Colombia
    
    1994
    
    15.31%
    
    No
    
    98
    
    50
    
    12
    
    30%
    
    2045
    
    
    13.47-17.41
    %
    
    2010 (every 5 years)Promigas  PSI
    
    Colombia
    
    2003
    
    50.52%
    
    Yes (2)
    
    N/A
    
    N/A
    
    313
    
    N/A
    
    N/A
    
    
    N/A
    
    
    
    N/AAccroven
    
    Venezuela
    
    2001
    
    49.25%
    
    Joint control
    
    N/A
    
    800
    
    780
    
    100%
    
    N/A
    
    
    N/A
    
    
    
    N/ASouthern ConeBolivia to Brazil  TBG
    
    Brazil
    
    1999
    
    8.27%
    
    No
    
    1,611
    
    1,063
    
    773
    
    100%
    
    N/A
    
    
    N/A
    
    
    
    N/ABolivia to Brazil  GTB
    
    Bolivia
    
    1999
    
    34.65%
    
    No
    
    346
    
    1,063
    
    785
    
    100%
    
    2037
    
    
    N/A
    
    
    
    N/ACuiabá   GOB
    
    Bolivia
    
    2002
    
    100%
    
    Yes
    
    225
    
    141
    
    N/A
    
    N/A
    
    2039
    
    
    N/A
    
    
    
    N/ACuiabá   GOM
    
    Brazil
    
    2002
    
    100%
    
    Yes
    
    175
    
    120
    
    N/A
    
    N/A
    
    Indefinite
    
    
    N/A
    
    
    
    N/ACuiabá   TBS
    
    Bolivia
    
    1999
    
    100%
    
    Yes
    
    N/A
    
    N/A
    
    N/A
    
    N/A
    
    N/A
    
    
    N/A
    
    
    
    N/AEmgasud
    
    Argentina
    
    1992(3)
    
    42.73%
    
    No
    
    440
    
    32
    
    23(4)
    
    100%
    
    N/A
    
    
    N/A
    
    
    
    N/A
 
 (1)
    
    Inflation adjusted on a regulated asset base before tax.(2)
    
    AEI has operating control through Promigas.(3)
    
    Natural gas transportation operations began in 2007.(4)
    
    Emgasud, through its subsidiary Enersud Energy S.A., or Enersud, also bought and sold to third parties on average 7 mmcfd of natural gas. Andean Natural Gas Transportation and Services
 Promigas S.A., ESP (Promigas)
  Promigas Pipeline
   Comisión de Regulación de Energía y Gas
  -47-




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##### Table of Contents



peso
 Promigas  Centragas (Centragas)
  Promigas  Transmetano S.A. ESP (Transmetano)
   peso
  Promigas  Transoccidente S.A. ESP (Transoccidente)
   -48-




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##### Table of Contents



peso
 Promigas  Gases de Boyacá y Santander, GBS S.A. (GBS)
  Promigas  Transoriente S.A. ESP (Transoriente)
   peso
 Promigas  Promigas Servicios Integrados S.A. (PSI)
  Accroven S.R.L. (Accroven)
   -49-




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##### Table of Contents



Southern Cone Natural Gas Transportation and Services
 Bolivia-to-Brazil Pipeline (BBPL)
  Transportadora Brasileira Gasoduto Bolivia-Brasil S.A. (TBG)
  Agência
Nacional do Petróleo
 Gas Transboliviano S.A. (GTB)
    -50-




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##### Table of Contents



Cuiabá  GasOcidente do Mato Grosso Ltda. (GOM), GasOriente Boliviano Ltda. (GOB) and Transborder
Gas Services Ltd. (TBS)
  Emgasud S.A. (Emgasud)
  Natural Gas Distribution
    Network
    
    
    
    
    
    
    Avg.Commercial
    
    
    Ownership
    
    
    Operating
    
    
    Length
    
    
    Customers
    
    
    Throughput
    
    
    Concession
    
    
    Regulated
    
    
    Next TariffLocation
    
    
    Operations
    
    
    (%)
    
    
    Control
    
    
    (miles)
    
    
    (000s)
    
    
    (mmcfd)
    
    
    Termination
    
    
    Return
    
    
    ReviewAndeanPromigas  Gases del Caribe
    
    Colombia
    
    
    1966
    
    
    
    16.16
    %
    
    No
    
    
    8,845
    
    
    
    986
    
    
    
    114
    
    
    
    2028
    (1)
    
    
    16.06
    %
    
    2011 (every 5 years)Promigas  Gases de Occidente
    
    Colombia
    
    
    1992
    
    
    
    46.87
    %
    
    Yes (2)
    
    
    4,398
    
    
    
    673
    
    
    
    50
    
    
    
    2014, 2047
    (3)
    
    
    16.06
    %
    
    2011 (every 5 years)Promigas  Surtigas
    
    Colombia
    
    
    1968
    
    
    
    51.57
    %
    
    Yes (2)
    
    
    5,083
    
    
    
    466
    
    
    
    48
    
    
    
    2034
    (4)
    
    
    16.06
    %
    
    2011 (every 5 years)Cálidda
    
    Peru
    
    
    2004
    
    
    
    80.85
    %
    
    Yes
    
    
    559
    
    
    
    19
    
    
    
    164
    
    
    
    2033
    (5)
    
    
    12.00
    % (6)
    
    2013 (every 2-4 years)Southern ConeEmgasud
    
    Argentina
    
    
    1992
    
    
    
    42.73
    %
    
    No
    
    
    507
    
    
    
    26
    
    
    
    7
    
    
    
    2027
    
    
    
    N/A
    
    
    
    N/AChinaHuatong  BMG
    
    China
    
    
    1988
    
    
    
    70.00
    %
    
    Yes
    
    
    1,015
    
    
    
    162
    
    
    
    13
    
    
    
    2038-2058
    (7)
    
    
    N/A
    
    
    AnnuallyHuatong  Tongda
    
    China
    
    
    1998
    
    
    
    100.00
    %
    
    Yes
    
    
    1,425
    
    
    
    174
    
    
    
    7
    
    
    
    2038-2058
    (7)
    
    
    N/A
    
    
    Annually
 
 (1)
    
    Gases del Caribes concession is extendable for 20 additional years.(2)
    
    AEI has operating control through its control of Promigas.(3)
    
    Gases de Occidente has an exclusive concession which expires in 2014 and a non-exclusive
concession which expires in 2047.(4)
    
    Surtigas concession is extendable for 20 additional years.(5)
    
    Cáliddas concession is extendable for 60 years in 30-year increments.(6)
    
    Cálidda tariff is currently under review.(7)
    
    Varies by franchise.  -51-




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##### Table of Contents



Andean Natural Gas Distribution
 Promigas
    Promigas  Gases del Caribe S.A. E.S.P. (Gases del Caribe)
    peso
   -52-




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##### Table of Contents



Promigas  Gases de Occidente S.A. E.S.P. (Gases de Occidente)
   peso
  Promigas  Surtigas S.A. E.S.P. (Surtigas)
   peso
  Gas Natural de Lima y Callao S.A. (Cálidda)
   -53-




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##### Table of Contents



Southern Cone Natural Gas Distribution
 Emgasud S.A. (Emgasud)
  China Natural Gas Distribution
 Huatong (Shanghai) Investment Co., Ltd. (Huatong)
    -54-




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##### Table of Contents



Growth of Our Natural Gas Distribution Business
     Retail Fuel
    Commercial
    
    
    Ownership
    
    
    Operating
    
    
    Product
    
    
    Volume
    
    
    Owned
    
    
    AffiliateLocation
    
    
    Operations
    
    
    (%)
    
    
    Control
    
    
    Sold
    
    
    Sold
    
    
    Stations
    
    
    StationsAndeanProenergía  Terpel
    
    Colombia, Chile,
    
    
    1968
    
    
    
    24.40
    %
    
    Yes
    
    Gasoline, Diesel,
    
    4.7 mm gal/day
    
    
    374
    
    
    
    1,241Ecuador, Panama
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jet Fuel,LubricantsProenergía  Gazel
    
    Colombia, Chile,
    
    
    1986
    
    
    
    24.40
    %
    
    Yes
    
    Compressed Natural
    
    34.9 mmcfd
    
    
    246
    
    
    
    N/APeru, Mexico
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gas
 -55-




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##### Table of Contents



Andean Retail Fuel
 Proenergía Internacional S.A. (Proenergía)
   Environmental Considerations
     -56-




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##### Table of Contents



C. Organizational Structure
 Our Segments and Businesses
  Business
    
    Full Legal Name
    
    Region  Country
    
    AEI Ownership %(1)Power DistributionLuz del Sur (2)
    
    Luz del Sur S.A.A.
    
    Andean  Peru
    
    
    37.97
    %Chilquinta
    
    Chilquinta Energía S.A.
    
    Andean  Chile
    
    
    50.00
    %Elektro
    
    Elektro Eletricidade e Serviços S.A.
    
    Southern Cone  Brazil
    
    
    99.68
    %EMDERSA
    
    Empresa Distribuidora Eléctrica Regional S.A.
    
    Southern Cone  Argentina
    
    
    77.10
    %EDEN (3)
    
    Empresa Distribuidora de Energía Norte S.A.
    
    Southern Cone  Argentina
    
    
    90.00
    %Elektra
    
    Elektra Noreste, S.A.
    
    Central America/Caribbean -Panama
    
    
    51.00
    %Delsur
    
    Distribuidora de Electricidad Del Sur, S.A. de C.V.
    
    Central America/Caribbean -El Salvador
    
    
    86.41
    %Power GenerationEPE
    
    Empresa Produtora de Energia Ltda. (Cuiabá Integrated Project)
    
    Southern Cone  Brazil
    
    
    100.00
    %Emgasud
    
    Emgasud S.A.
    
    Southern Cone  Argentina
    
    
    42.73
    %PQP
    
    Puerto Quetzal Power LLC
    
    Central America/Caribbean -Guatemala
    
    
    100.00
    %San Felipe
    
    Generadora San Felipe Limited Partnership
    
    Central America/Caribbean -Dominican Republic
    
    
    100.00
    %Corinto
    
    Empresa Energética Corinto Ltd.
    
    Central America/Caribbean -Nicaragua
    
    
    57.67
    %JPPC
    
    Jamaica Private Power Company Ltd.
    
    Jamaica
    
    
    84.42
    %Tipitapa
    
    Tipitapa Power Company Ltd.
    
    Central America/Caribbean -Nicaragua
    
    
    57.67
    %Amayo
    
    Consorcio Eólico Amayo S.A.
    
    Central America/Caribbean -Nicaragua
    
    
    13.42
    %Luoyang
    
    Luoyang Sunshine Cogeneration Co., Ltd.
    
    China  China
    
    
    50.00
    %Trakya
    
    Trakya Elektrik Uretim ve Ticaret A.S.
    
    Europe/Middle East/North Africa  Turkey
    
    
    90.00
    %ENS
    
    Elektrocieplownia Nowa Sarzyna Sp. Z o.o.
    
    Europe/Middle East/North Africa  Poland
    
    
    100.00
    %DCL
    
    DHA Cogen Limited
    
    Europe/Middle East/North Africa  Pakistan
    
    
    60.23
    %Natural Gas Transportation and ServicesPromigas Pipeline
    
    Promigas Pipeline (Promigas S.A., ESP)
    
    Andean  Colombia
    
    
    52.13
    %Centragas
    
    Centragas (Promigas S.A., ESP)
    
    Andean  Colombia
    
    
    13.03
    %Transmetano
    
    Transmetano S.A. ESP (Promigas S.A., ESP)
    
    Andean  Colombia
    
    
    50.65
    %Transoccidente
    
    Transoccidente S.A. ESP (Promigas S.A., ESP)
    
    Andean  Colombia
    
    
    35.89
    %GBS
    
    Gases de Boyacá y Santander, GBS S.A. (Promigas S.A., ESP)
    
    Andean  Colombia
    
    
    49.54
    %Transoriente
    
    Transoriente S.A. ESP (Promigas S.A., ESP)
    
    Andean  Colombia
    
    
    15.31
    %PSI
    
    Promigas Servicios Integrados S.A. (Promigas S.A., ESP)
    
    Andean  Colombia
    
    
    50.52
    %Accroven
    
    Accroven S.R.L.
    
    Andean  Venezuela
    
    
    49.25
    %TBG
    
    Transportadora Brasileira Gasoduto Bolivia-Brasil S.A.
(Bolivia-to-Brazil Pipeline)
    
    Southern Cone  Brazil
    
    
    8.27
    %GTB
    
    Gas Transboliviano S.A. (Bolivia-to-Brazil Pipeline)
    
    Southern Cone  Bolivia
    
    
    34.65
    %GOB
    
    GasOriente Boliviano Ltda. (Cuiabá Integrated Project)
    
    Southern Cone  Bolivia
    
    
    100.00
    %GOM
    
    GasOcidente do Mato Grosso Ltda. (Cuiabá Integrated Project)
    
    Southern Cone  Brazil
    
    
    100.00
    %TBS
    
    Transborder Gas Services Ltd. (Cuiabá Integrated Project)
    
    Southern Cone  Brazil
    
    
    100.00
    %Emgasud
    
    Emgasud S.A.
    
    Southern Cone  Argentina
    
    
    42.73
    %Natural Gas DistributionGases del Caribe
    
    Gases del Caribe S.A. E.S.P. (Promigas S.A., ESP)
    
    Andean  Colombia
    
    
    16.16
    %
  -57-




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##### Table of Contents



Business
    
    Full Legal Name
    
    Region  Country
    
    AEI Ownership %(1)Gases de Occidente
    
    Gases de Occidente S.A. E.S.P. (Promigas S.A., ESP)
    
    Andean  Colombia
    
    
    46.87
    %Surtigas
    
    Surtigas S.A. E.S.P. (Promigas S.A., ESP)
    
    Andean  Colombia
    
    
    51.57
    %Cálidda
    
    Gas Natural de Lima y Callao S.A.
    
    Andean  Peru
    
    
    80.85
    %Emgasud
    
    Emgasud S.A.
    
    Southern Cone  Argentina
    
    
    42.73
    %Huatong  BMG
    
    Beijing Macrolink Gas Co., Ltd
    
    China  China
    
    
    70.00
    %Huatong  Tongda
    
    Tongda Energy Private Limited
    
    China  China
    
    
    100.00
    %Retail FuelProenergía  Terpel
    
    Organización Terpel Inversiones S.A. (Proenergía Internacional S.A.)
    
    Andean  Colombia, Chile, Ecuador and Panama
    
    
    24.40
    %Proenergía  Gazel
    
    Gas Natural Comprimido S.A. (Proenergía Internacional S.A.)
    
    Andean   Colombia, Chile, Mexico and Peru
    
    
    24.40
    %
 
 (1)
    
    Represents AEIs net interest via direct and indirect ownerships.(2)
    
    In May 2008, we acquired an additional 0.03% of Luz del Sur in a public tender. We currently
own 37.97% of Luz del Sur. Our stake in Luz del Sur is owned indirectly through our 50.00%
ownership of its holding company, Peruvian Opportunity Company SAC, or POC.(3)
    
    We acquired our 90.00% interest in EDEN in 2007. The transaction is subject to local
anti-trust approval. 
 D. Property, Plant and Equipment
  Power Distribution
 Approximate Miles ofPower Distribution andBusiness
    
    Location
    
    Transmission LinesLuz del Sur
    
    Peru
    
    11,565Chilquinta
    
    Chile
    
    5,169Elektro
    
    Brazil
    
    66,597EMDERSA(1)
    
    Argentina
    
    15,885EDEN(1)
    
    Argentina
    
    10,971Elektra
    
    Panama
    
    5,605Delsur
    
    El Salvador
    
    5,313
 
 (1)
    
    Pending local anti-trust
approval. Power Generation
 Generating CapacityBusiness
    
    Power Plant Location
    
    (MW)
    
    Fuel TypeCuiabá  EPE
    
    Brazil
    
    
    480
    
    
    Natural gas and fuel oil(1)Emgasud
    
    Argentina
    
    
    205
    
    
    Natural gas and fuel oilPQP
    
    Guatemala
    
    
    234
    
    
    Bunker fuelSan Felipe
    
    Dominican Republic
    
    
    180
    
    
    Diesel oil/bunker fuelCorinto
    
    Nicaragua
    
    
    71
    
    
    Bunker fuelJPPC
    
    Jamaica
    
    
    60
    
    
    Bunker fuelTipitapa
    
    Nicaragua
    
    
    51
    
    
    Bunker fuelAmayo
    
    Nicaragua
    
    
    40
    
    
    WindLuoyang
    
    China
    
    
    270
    
    
    CoalTrakya
    
    Turkey
    
    
    478
    
    
    Natural gas and fuel oil(2)ENS
    
    Poland
    
    
    116
    
    
    Natural gasDCL
    
    Pakistan
    
    
    94
    
    
    Natural gas
 
 (1)
    
    Upon ANEEL request and based on reimbursement of fuel oil, EPE is able to run its power plant
on a dual fuel basis.(2)
    
    Trakya is able to run its power plant on fuel oil on a backup basis.  -58-




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##### Table of Contents



Natural Gas Transportation and Services
 Business
    
    Location
    
    DescriptionPromigasPromigas Pipeline
    
    Colombia
    
    1,271 miles pipeline system in La Guajira region, to Jobo station in Department of SucreCentragas
    
    Colombia
    
    458 mile pipeline in the Department of SantanderTransmetano
    
    Colombia
    
    93 mile pipeline in the Department of AntioquiaTransoccidente
    
    Colombia
    
    7 mile pipeline in the Department of Valle del CaucaGBS
    
    Colombia
    
    196 mile pipeline in the Departments Boyacá and SantanderTransoriente
    
    Colombia
    
    98 mile pipeline in the Department of SantanderPSI
    
    Colombia
    
    Natural gas drying and compression facility at Ballena stationAccroven
    
    Venezuela
    
    NGL extraction facilities at San Joaquín and Santa Bárbara gas fields and NGL
fractionation, storage and refrigeration facilities in Jose petrochemical complex on
Northeastern coastBBPLTBG
    
    Brazil
    
    1,611 mile pipeline from GTB pipeline at Station Mutún, Bolivia to southeastern BrazilGTB
    
    Bolivia
    
    346 mile pipeline from Station Rio Grande to Station Mutún and connecting to TBG
pipelineCuiabáGOB
    
    Bolivia
    
    225 mile pipeline connecting to GOM pipelineGOM
    
    Brazil
    
    175 mile pipeline in Mato Grosso connecting to GOB pipelineEmgasud
    
    Argentina
    
    440 miles of pipeline in the Patagonia region
 Natural Gas Distribution
 Business
    
    Location
    
    DescriptionPromigasGases del Caribe
    
    Colombia
    
    8,845 miles of mains in Magdalena, Cesar, Atlántico and La GuajiraGases de Occidente
    
    Colombia
    
    4,398 miles of mains in Valle del CaucaSurtigas
    
    Colombia
    
    5,083 miles of mains in Bolívar, Sucre and CórdobaCálidda
    
    Peru
    
    559 miles of mains in Lima and Callao ProvincesEmgasud
    
    Argentina
    
    507 miles of mains in Southeast Buenos AiresBMG
    
    China
    
    1,015 miles of mains in 15 service areasTongda
    
    China
    
    1,425 miles of mains in 10 service areas in Jiangsu Province
 Retail Fuel
 Business
    
    Location
    
    DescriptionSIETerpel
    
    Colombia
    
    1,296 service stations, including 28 supply stationsChile
    
    198 service stationsEcuador
    
    63 service stationsPanama
    
    58 service stationsGazel
    
    Colombia
    
    224 service stationsMexico
    
    3 service stationsPeru
    
    16 service stationsChile
    
    3 service stations
  -59-




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##### Table of Contents



Item 4A. Unresolved Staff Comments
   -60-




---



##### Table of Contents



Item 5. Operating and Financial Review and Prospects
 This discussion should be read together with the Item 3. Key Information  A. Selected
Financial Data, and the consolidated financial statements (including the notes thereto) and PEIs
consolidated financial statements included elsewhere in this annual report. Unless otherwise
indicated, the financial data contained in this annual report has been prepared in accordance with
accounting principles generally accepted in the United States, or U.S. GAAP. See Forward-Looking
Statements and Item 3. Key Information  D. Risk Factors for a discussion of factors that
could cause future financial condition and results of operations to be different from those
discussed below.
 Interests in certain companies are accounted for under the equity method, which means that their
net income or losses are included into consolidated profit and loss accounts in proportion to the
ownership interest that is owned of the relevant company or entity during the respective periods.
See Note 11 to the consolidated financial statements for the year ended December 31 2009.
 Overview
  Critical Accounting Policies and Estimates
  Basis of Presentation
   -61-




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##### Table of Contents



Acquisition Accounting
      Long-Lived Assets
    Goodwill and Indefinite Life Intangible Assets
   -62-




---



##### Table of Contents



Revenue Recognition
     Regulatory Assets and Liabilities
  Income Taxes
    -63-




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##### Table of Contents



Pension and Other Postretirement Obligations
    Foreign Currency
     -64-




---



##### Table of Contents



Contingencies
  Accounting Standards adopted in 2009
  Recent Accounting Standards  to be Adopted
 Revenue Recognition  Multiple-Deliverable Revenue
Arrangements Revenue Recognition.
 Consolidation
 Improving Disclosures About Fair Value Measurements Fair Value Measurements and Disclosures
  -65-




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##### Table of Contents



A. Operating Results
 Results of Operations  Overview
  Revenues
 
    
    Power Distribution revenues are derived primarily from contracts with retail customers
in the residential, industrial and commercial sectors. These revenues are based on
tariffs, reviewed by the applicable regulator on a periodic basis, and recognized upon
delivery. In addition to a reasonable rate of return on regulatory assets and other
amounts, tariffs include a pass-through of nearly all wholesale energy costs included in
our Power Distribution costs of sales. Therefore, Power Distribution revenues are
significantly impacted by wholesale energy costs. Upon each periodic regulatory review,
tariffs are reset to the appropriate level, which might be higher or lower than the current
level, to align the business revenue to the authorized pass-through of costs and the
applicable return on the business asset base. Therefore, revenues for a specific business
may vary substantially from one period to the next if there has been a tariff reset in
between.
    
    Power Generation revenues are generated from the sale of wholesale power under
long-term contracts to large off-takers, which in many circumstances are state-controlled
entities. JPPCs, Trakyas and San Felipes contracts contain decreasing rate schedules,
which results in revenues being deferred due to differences between the amounts billed to
customers and the average revenue stream over the life of the contract.
    
    Natural Gas Transportation and Services revenues are primarily service fees received
based on regulated rates set by a government controlled entity, and the capacity volume
allocated for natural gas transportation in pipelines. Additional revenues are recognized
for other natural gas related services, such as compression or liquefaction. As with the
Power Distribution segment, businesses in this segment are subject to periodic regulatory
review of their tariffs.
    
    Natural Gas Distribution revenues are primarily generated from service and connection
fees received based on regulated rates, set by a government controlled entity, and the
volume of natural gas sold to retail customers in the residential, industrial and
commercial sectors. Similar to the Power Distribution segment, businesses in this segment
are subject to periodic regulatory review of their tariffs.
    
    Retail Fuel revenues represent primarily the distribution and retail sale of gasoline
and CNG. Gasoline prices are normally regulated, whereas CNG prices are normally free of
regulation, but tend to correlate with gasoline prices.
 Costs of sales
   -66-




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##### Table of Contents



Operating expenses
  Foreign Currency
   Exchange rates on December 31,2008
    
    
    2009Period-end exchange rates:Brazilian real
    
    
    2.40
    
    
    
    1.74Colombian peso
    
    
    2,253
    
    
    
    2,043
 Average Exchange Rates for the Twelve Months EndedDecember 31,2007
    
    
    2008
    
    
    2009Average period exchange rates:Brazilian real
    
    
    1.95
    
    
    
    1.83
    
    
    
    1.99Colombian peso
    
    
    2,120
    
    
    
    1,990
    
    
    
    2,172
  AEI Results of Operations
  For the Year Ended December 31,2009
    
    2008
    
    2007Power DistributionChilquinta
    
    Equity Method
    
    Equity Method
    
    Equity Method(1)Delsur
    
    Consolidated
    
    Consolidated
    
    Consolidated(1)EDEN
    
    Consolidated
    
    Consolidated
    
    Consolidated(1)Elektra
    
    Consolidated
    
    Consolidated
    
    ConsolidatedElektro
    
    Consolidated
    
    Consolidated
    
    ConsolidatedEMDERSA
    
    Consolidated(2)
    
    
    
    Luz del Sur
    
    Equity Method
    
    Equity Method
    
    Equity Method(1)Power GenerationAmayo
    
    Equity Method(2)(3)
    
    
    
    Corinto
    
    Consolidated(3)
    
    Consolidated
    
    ConsolidatedCuiabá  EPE
    
    Consolidated(4)
    
    Consolidated
    
    ConsolidatedDCL
    
    Consolidated
    
    Consolidated(5)
    
    ENS
    
    Consolidated
    
    Consolidated
    
    ConsolidatedEmgasud
    
    Equity Method
    
    Equity Method(5)
    
    Fenix
    
    Consolidated
    
    Consolidated(5)
    
    Jaguar
    
    Consolidated
    
    Consolidated
    
    JPPC
    
    Consolidated
    
    Consolidated
    
    Consolidated(1)Luoyang
    
    Consolidated
    
    Consolidated(5)
    
    PQP
    
    Consolidated
    
    Consolidated
    
    ConsolidatedSan Felipe
    
    Consolidated
    
    Consolidated
    
    ConsolidatedSubic
    
    (6)
    
    Equity Method
    
    Equity MethodTipitapa
    
    Consolidated(3)
    
    Consolidated(5)
    
    
  -67-




---



##### Table of Contents



For the Year Ended December 31,2009
    
    2008
    
    2007Trakya
    
    Consolidated(7)
    
    Consolidated
    
    ConsolidatedNatural Gas Transportation and ServicesAccroven
    
    Equity Method
    
    Equity Method
    
    Equity MethodCuiabá  GOB/GOM/TBS
    
    Consolidated(4)
    
    Consolidated
    
    ConsolidatedGTB
    
    Equity Method(8)
    
    Cost Method
    
    Equity MethodPromigas
    
    Consolidated
    
    Consolidated
    
    ConsolidatedTBG
    
    Cost Method(8)
    
    Cost Method
    
    Cost MethodTGS
    
    Cost Method(2)
    
    
    
    Transredes
    
    Cost Method
    
    Cost Method
    
    Equity MethodNatural Gas DistributionBMG
    
    Consolidated
    
    Consolidated
    
    Cost Method(1)Cálidda
    
    Consolidated
    
    Consolidated
    
    Consolidated(1)Promigas
    
    Consolidated
    
    Consolidated
    
    ConsolidatedTongda
    
    Consolidated
    
    Consolidated
    
    Consolidated(1)Retail FuelProenergía
    
    Consolidated(9)
    
    Consolidated
    
    Equity Method
 
 (1)
    
    Our initial interest was purchased during 2007.(2)
    
    Our initial interest was purchased during 2009.(3)
    
    During the first quarter of 2009, as part of the Nicaragua Energy Holdings, or NEH,
transaction, our ownership in Corinto increased from 50% to 57.67% and our ownership in
Tipitapa decreased from 100% to 57.67%. In addition, we own, through its 57.67% interest in
NEH, a 12.72% equity interest in Amayo. See Note 3 to our consolidated financial statements.(4)
    
    On December 18, 2009, we acquired an additional 50% of each of EPE, GOM, GOB and TBS from a
third party. As a result, we currently own 100% of each of EPE, GOM, GOB and TBS. See Note 3
to our consolidated financial statements.(5)
    
    Our initial interest was purchased during 2008.(6)
    
    In February 2009, the 15-year build-to-operate-transfer agreement, or BOT, between Subic
Power Corp., or Subic, and the National Power Corporation of the Philippines, or NPC, expired
on schedule and the plant was turned over to the NPC without additional compensation.(7)
    
    In August 2009, we increased our ownership in Trakya from 59% to 90%. See Note 3 to our
consolidated financial statements.(8)
    
    On December 18, 2009, we acquired an additional 4% of TBG and an additional 17% of GTB from a
third party. As a result, we currently own 8.27% of TBG and 34.65% of GTB. See Note 3 to our
consolidated financial statements.(9)
    
    On January 2, 2008, Promigas contributed its ownership interests in Gazel to SIE in exchange
for additional shares of SIE. As a result of this transaction, Promigas ownership in SIE
increased from 37.19% as of December 31, 2007 to 54% with SIE owning 100% of Gazel. See Note
3 to our consolidated financial statements. Proenergía, a holding company for the retail fuel
operations, was spun-off from Promigas in July 2009.   Year Ended December 31, 2009 Compared to the Year Ended December 31, 2008
   -68-




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##### Table of Contents



Revenues
  For the Years EndedDecember 31,2009
    
    
    2008Millions of dollars (U.S.)AndeanColombia
    
    $
    3,603
    
    
    $
    3,926Chile
    
    
    907
    
    
    
    1,311Other countries
    
    
    248
    
    
    
    219Subtotal
    
    
    4,758
    
    
    
    5,456Southern ConeBrazil
    
    
    1,418
    
    
    
    1,503Argentina
    
    
    173
    
    
    
    122Other countries
    
    
    17
    
    
    
    21Subtotal
    
    
    1,608
    
    
    
    1,646Central America/CaribbeanPanama
    
    
    602
    
    
    
    808El Salvador
    
    
    214
    
    
    
    172Guatemala
    
    
    193
    
    
    
    206Other countries
    
    
    319
    
    
    
    384Subtotal
    
    
    1,328
    
    
    
    1,570Europe/Middle East/North AfricaTurkey
    
    
    357
    
    
    
    416Other countries
    
    
    103
    
    
    
    123Subtotal
    
    
    460
    
    
    
    539China
    
    
    151
    
    
    
    104Other and eliminations
    
    
    (120
    )
    
    
    (104
    )Total
    
    $
    8,185
    
    
    $
    9,211
  For the Years EndedDecember 31,2009
    
    
    2008Millions of dollars (U.S.)Power Distribution
    
    $
    2,151
    
    
    $
    2,217Power Generation
    
    
    1,027
    
    
    
    1,175Natural Gas Transportation and Services
    
    
    197
    
    
    
    202Natural Gas Distribution
    
    
    654
    
    
    
    584Retail Fuel
    
    
    4,245
    
    
    
    5,137Headquarters/Other/Eliminations
    
    
    (89
    )
    
    
    (104
    )Total revenues
    
    $
    8,185
    
    
    $
    9,211
  Power Distribution
    -69-




---



##### Table of Contents



real
 Power Generation
 zloty
 Natural Gas Transportation and Services
  Natural Gas Distribution
 peso
  -70-




---



##### Table of Contents



Retail Fuel
 pesos
 Costs of sales
  For the Years EndedDecember 31,2009
    
    
    2008(Millions of dollars U.S.)Power Distribution
    
    $
    1,312
    
    
    $
    1,374Power Generation
    
    
    753
    
    
    
    984Natural Gas Transportation and Services
    
    
    14
    
    
    
    13Natural Gas Distribution
    
    
    416
    
    
    
    386Retail Fuel
    
    
    3,846
    
    
    
    4,697Headquarters/Other/Eliminations
    
    
    (103
    )
    
    
    (107
    )Total costs of sales
    
    $
    6,238
    
    
    $
    7,347
  Power Distribution
 real
 Power Generation
 zloty
  -71-




---



##### Table of Contents



Natural Gas Transportation and Services
  Natural Gas Distribution
 peso
 Retail Fuel
 pesos
 Gross Margin
  For the Years EndedDecember 31,2009
    
    
    2008Millions of dollars (U.S.)Power Distribution
    
    $
    839
    
    
    $
    843Power Generation
    
    
    274
    
    
    
    191Natural Gas Transportation and Services
    
    
    183
    
    
    
    189Natural Gas Distribution
    
    
    238
    
    
    
    198Retail Fuel
    
    
    399
    
    
    
    440Headquarters/Other/Eliminations
    
    
    14
    
    
    
    3Total gross margin
    
    $
    1,947
    
    
    $
    1,864
  Power Distribution
 real
  -72-




---



##### Table of Contents



Power Generation
 zloty
 Natural Gas Transportation and Services
  Natural Gas Distribution
 peso
 Retail Fuel
 pesos
 Operating Expenses
 Operations, Maintenance and General and Administrative Expenses
  For the Years Ended December 31,2009
    
    
    2008Millions of dollars (U.S.)Power Distribution
    
    $
    329
    
    
    $
    323Power Generation
    
    
    106
    
    
    
    123Natural Gas Transportation and Services
    
    
    61
    
    
    
    62Natural Gas Distribution
    
    
    91
    
    
    
    82Retail Fuel
    
    
    197
    
    
    
    215Headquarters/Other/Eliminations
    
    
    79
    
    
    
    89Total operations, maintenance and general and administrative expenses
    
    $
    863
    
    
    $
    894
  -73-




---



##### Table of Contents



Power Distribution
 real
 Power Generation
  Natural Gas Transportation and Services
  Natural Gas Distribution
 peso
 Retail Fuel
 pesos
  -74-




---



##### Table of Contents



Depreciation and Amortization
  For the Years Ended December 31,2009
    
    
    2008Millions of dollars (U.S.)Power Distribution
    
    $
    134
    
    
    $
    138Power Generation
    
    
    42
    
    
    
    24Natural Gas Transportation and Services
    
    
    21
    
    
    
    21Natural Gas Distribution
    
    
    23
    
    
    
    18Retail Fuel
    
    
    46
    
    
    
    61Headquarters/Other
    
    
    6
    
    
    
    6Total depreciation and amortization expenses
    
    $
    272
    
    
    $
    268
 real
 Other Charges
  (Gain) Loss on Disposition of Assets
  Equity Income from Unconsolidated Affiliates
  For the Years Ended December 31,2009
    
    
    2008Millions of dollars (U.S.)Power Distribution
    
    $
    64
    
    
    $
    68Power Generation
    
    
    3
    
    
    
    12Natural Gas Transportation and Services
    
    
    30
    
    
    
    27Natural Gas Distribution
    
    
    14
    
    
    
    11Retail Fuel
    
    
    2
    
    
    
    1Headquarters/Other/Eliminations
    
    
    (6
    )
    
    
    (2
    )Total equity income from unconsolidated affiliates
    
    $
    107
    
    
    $
    117
  -75-




---



##### Table of Contents



Operating Income
  For the Years Ended December 31,2009
    
    
    2008Millions of dollars (U.S.)Power Distribution
    
    $
    413
    
    
    $
    427Power Generation
    
    
    99
    
    
    
    15Natural Gas Transportation and Services
    
    
    32
    
    
    
    128Natural Gas Distribution
    
    
    128
    
    
    
    104Retail Fuel
    
    
    140
    
    
    
    218Headquarters/Other/Eliminations
    
    
    (81
    )
    
    
    (79
    )Total operating income
    
    $
    731
    
    
    $
    813
  Power Distribution
 real
 Power Generation
   -76-




---



##### Table of Contents



Natural Gas Transportation and Services
  Natural Gas Distribution
  Retail Fuel
  Interest Income
 real
 Interest Expense
 real
 Foreign Currency Transaction Gain (Loss), Net
 peso peso peso real real lira lira
  -77-




---



##### Table of Contents



Gain on Early Retirement of Debt
  Other Income (Expense), net
  Provision for Income Taxes
   Noncontrolling Interests
  For the Years Ended December 31,2009
    
    
    2008Millions of dollars (U.S.)Promigas
    
    $
    58
    
    
    $
    138Proenergía
    
    
    48
    
    
    
    Cuiabá Integrated Project
    
    
    (132
    )
    
    
    (37
    )Trakya
    
    
    17
    
    
    
    2DCL
    
    
    (16
    )
    
    
    (2
    )Elektra
    
    
    10
    
    
    
    8Other
    
    
    6
    
    
    
    15Total net income (loss)  noncontrolling interests
    
    $
    (9
    )
    
    $
    124
   -78-




---



##### Table of Contents



Net Income Attributable to AEI
  Adjusted Net Income Attributable to AEI
  For the Year Ended December 31,2009
    
    
    2008Millions of dollars (U.S.)Net income attributable to AEI
    
    $
    297
    
    
    $
    158EPE  arbitration settlement
    
    
    14
    
    
    
    EPE  lease receivable allowance
    
    
    
    
    
    
    30SES available-for-sale securities impairment
    
    
    2
    
    
    
    12Elektro  prior year social contributions accrual reversal
    
    
    (32
    )
    
    
    DCL  impairment
    
    
    17
    
    
    
    Foreign currency transaction loss, net
    
    
    
    
    
    
    19Gain on early retirement of debt
    
    
    (10
    )
    
    
    Luoyang  net loss attributable to noncontrolling interests recognized by AEI
    
    
    
    
    
    
    13Loss on sale of Metrogas securities
    
    
    
    
    
    
    14Gain on nationalization of Transredes
    
    
    
    
    
    
    (57
    )Gain on SIE/Gazel transaction
    
    
    
    
    
    
    (12
    )Adjusted net income attributable to AEI
    
    $
    288
    
    
    $
    177
  
    
    A charge in the third quarter 2009 of $27 million, or $14 million net of tax and
noncontrolling interests, for the settlement of arbitration related to the social
contributions taxes (PIS and COFINS) collected by EPE in 2007 and prior years
    
    A $44 million charge, or $30 million net of tax and noncontrolling interests, in 2008
related to an allowance for EPEs lease investment receivable balance
    
    Impairment charges of $2 million and $12 million in 2009 and 2008, respectively, on SES
available-for-sale securities to mark to market value
    
    A $32 million net of tax ($49 million gross) accrual reversal recorded by Elektro in
Other income in the second quarter of 2009 for the reversal of a social contribution tax
accrual recorded prior to 2004
    
    A $25 million, or $17 million net of tax and noncontrolling interests, impairment
charge on DCL, including a $5 million impairment of goodwill, in the fourth quarter of 2009
    
    Non-cash foreign currency losses on financial assets and liabilities
    
    Gain of $10 million on the extinguishment of debt from purchases in the second and
third quarter of 2009 of EDENs debt by us
    
    A loss of $13 million at Luoyang in 2008 otherwise attributable to the noncontrolling
shareholders that was required to be recognized by us
    
    Loss of $14 million on the sale of Metrogas available-for-sale securities in the second
quarter of 2008
  -79-




---



##### Table of Contents




    
    Gain of $57 million on the settlement of the nationalization of Transredes in the
second quarter of 2008
    
    Gain of $68 million, or $12 million net of tax and noncontrolling interests, on the
sale of Gazel in exchange for additional ownership interest in SIE in the first quarter of
2008
 Year Ended December 31, 2008 Compared to the Year Ended December 31, 2007
    Revenues
  For the YearsEndedDecember 31,2008
    
    
    2007AndeanColombia
    
    $
    3,926
    
    
    $
    563Chile
    
    
    1,311
    
    
    
    Other countries
    
    
    219
    
    
    
    37Subtotal
    
    
    5,456
    
    
    
    600Southern ConeBrazil
    
    
    1,503
    
    
    
    1,406Argentina
    
    
    122
    
    
    
    52Other countries
    
    
    21
    
    
    
    21Subtotal
    
    
    1,646
    
    
    
    1,479Central America/CaribbeanPanama
    
    
    808
    
    
    
    389El Salvador
    
    
    172
    
    
    
    97Guatemala
    
    
    206
    
    
    
    168Other countries
    
    
    384
    
    
    
    177Subtotal
    
    
    1,570
    
    
    
    831Europe/Middle East/North AfricaTurkey
    
    
    416
    
    
    
    337Other countries
    
    
    123
    
    
    
    93Subtotal
    
    
    539
    
    
    
    430China
    
    
    104
    
    
    
    8Other and eliminations
    
    
    (104
    )
    
    
    (132
    )Total
    
    $
    9,211
    
    
    $
    3,216
  -80-




---



##### Table of Contents



For the Years Ended December 31,2008
    
    
    2007Millions of dollars (U.S.)Power Distribution
    
    $
    2,217
    
    
    $
    1,746Power Generation
    
    
    1,175
    
    
    
    874Natural Gas Transportation and Services
    
    
    202
    
    
    
    199Natural Gas Distribution
    
    
    584
    
    
    
    352Retail Fuel
    
    
    5,137
    
    
    
    160Headquarters/Other/Eliminations
    
    
    (104
    )
    
    
    (115
    )Total revenues
    
    $
    9,211
    
    
    $
    3,216
  Power Distribution
 real
 Power Generation
 zloty
 Natural Gas Transportation and Services
 peso
  -81-




---



##### Table of Contents



Natural Gas Distribution
  Retail Fuel
 peso
 Costs of sales
  For the Years Ended December 31,2008
    
    
    2007Millions of dollars (U.S.)Power Distribution
    
    $
    1,374
    
    
    $
    963Power Generation
    
    
    984
    
    
    
    610Natural Gas Transportation and Services
    
    
    13
    
    
    
    36Natural Gas Distribution
    
    
    386
    
    
    
    224Retail Fuel
    
    
    4,697
    
    
    
    90Headquarters/Other/Eliminations
    
    
    (107
    )
    
    
    (127
    )Total costs of sales
    
    $
    7,347
    
    
    $
    1,796
  Power Distribution
 real
  -82-




---



##### Table of Contents



Power Generation
  Natural Gas Transportation and Services
  Natural Gas Distribution
 peso
 Retail Fuel
  Gross Margin
  For the Years Ended December 31,2008
    
    
    2007Millions of dollars (U.S.)Power Distribution
    
    $
    843
    
    
    $
    783Power Generation
    
    
    191
    
    
    
    264Natural Gas Transportation and Services
    
    
    189
    
    
    
    163Natural Gas Distribution
    
    
    198
    
    
    
    128Retail Fuel
    
    
    440
    
    
    
    70Headquarters/Other/Eliminations
    
    
    3
    
    
    
    12Total gross margin
    
    $
    1,864
    
    
    $
    1,420
   -83-




---



##### Table of Contents



Power Distribution
  Power Generation
  Natural Gas Transportation and Services
 peso
 Natural Gas Distribution
  Retail Fuel
  Operating Expenses
 Operations, Maintenance and General and Administrative Expenses
   -84-




---



##### Table of Contents



For the Years Ended December 31,2008
    
    
    2007Millions of dollars (U.S.)Power Distribution
    
    $
    323
    
    
    $
    241Power Generation
    
    
    123
    
    
    
    118Natural Gas Transportation and Services
    
    
    62
    
    
    
    57Natural Gas Distribution
    
    
    82
    
    
    
    49Retail Fuel
    
    
    215
    
    
    
    33Headquarters/Other/Eliminations
    
    
    89
    
    
    
    132Total operations, maintenance and general and administrative expenses
    
    $
    894
    
    
    $
    630
  Power Distribution
 real
 Power Generation
  Natural Gas Transportation and Services
 peso
 Natural Gas Distribution
   -85-




---



##### Table of Contents



Retail Fuel
  Depreciation and Amortization
  For the Years Ended December 31,2008
    
    
    2007Millions of dollars (U.S.)Power Distribution
    
    $
    138
    
    
    $
    139Power Generation
    
    
    24
    
    
    
    42Natural Gas Transportation and Services
    
    
    21
    
    
    
    20Natural Gas Distribution
    
    
    18
    
    
    
    8Retail Fuel
    
    
    61
    
    
    
    3Headquarters/Other
    
    
    6
    
    
    
    5Total depreciation and amortization expenses
    
    $
    268
    
    
    $
    217
  Other Charges
  (Gain) Loss on Disposition of Assets
   -86-




---



##### Table of Contents



Equity Income from Unconsolidated Affiliates
  For the Years Ended December 31,2008
    
    
    2007Millions of dollars (U.S.)Power Distribution
    
    $
    68
    
    
    $
    2Power Generation
    
    
    12
    
    
    
    11Natural Gas Transportation and Services
    
    
    27
    
    
    
    39Natural Gas Distribution
    
    
    11
    
    
    
    13Retail Fuel
    
    
    1
    
    
    
    11Headquarters/Other/Eliminations
    
    
    (2
    )
    
    
    Total equity income from unconsolidated affiliates
    
    $
    117
    
    
    $
    76
  Operating Income
  For the Years Ended December 31,2008
    
    
    2007Millions of dollars (U.S.)Power Distribution
    
    $
    427
    
    
    $
    373Power Generation
    
    
    15
    
    
    
    77Natural Gas Transportation and Services
    
    
    128
    
    
    
    128Natural Gas Distribution
    
    
    104
    
    
    
    85Retail Fuel
    
    
    218
    
    
    
    49Headquarters/Other/Eliminations
    
    
    (79
    )
    
    
    (135
    )Total operating income
    
    $
    813
    
    
    $
    577
 Interest Income
  Interest Expense
  Foreign Currency Transaction Gain (Loss), Net
 peso real lira lira real
  -87-




---



##### Table of Contents



Loss on Early Retirement of Debt
  Other Income (Expense), net
  Provision for Income Taxes
  Noncontrolling Interests
  Net Income Attributable to AEI
  
 B. Liquidity and Capital Resources
 Overview
   -88-




---



##### Table of Contents




    
    cash generated from our operations received in the form of dividends, capital returns,
interest and principal payments on intercompany loans and shareholder loans from our
businesses;
    
    borrowing under our credit facilities, including a $500 million revolving credit
facility, $218 million of which was drawn as of December 31, 2009;
    
    future debt and subordinated debt offerings;
    
    issuance of additional equity; and
    
    fees from management contracts.
  -89-




---



##### Table of Contents




    
    interest expense;
    
    principal repayments of debt;
    
    acquisitions;
    
    investment in new and existing projects including greenfield development; and
    
    parent company overhead and development costs.
   Capital Expenditures
  Cash Flows for the Years Ended December 31, 2009 and December 31, 2008
 Cash Flows from Operating Activities
   -90-




---



##### Table of Contents



Cash Flows from Investing Activities
 reais
 Cash Flows from Financing Activities
 peso peso peso peso peso peso reais reais
  -91-




---



##### Table of Contents



Cash Flows for the Years Ended December 31, 2008 and December 31, 2007
 Cash Flows from Operating Activities
  Cash Flows from Investing Activities
  Cash Flows from Financing Activities
  Subsidiary Distributions to Parent
   -92-




---



##### Table of Contents



Parent Company Long-term Debt
 Credit Agreement
  Note Purchase Agreement (PIK Notes)
        -93-




---



##### Table of Contents



Subsidiaries Financing Activities
   reais
 pesos
 peso
  Subsidiaries Long-term Debt Schedule
  Currency of
    
    Balance as of
    
    
    
    
    
    
    
    Summary of DistributionBusiness
    
    Borrowing
    
    December 31, 2009
    
    Maturity Profile
    
    Collateral
    
    RestrictionsMillions of
dollars (U.S.)Cálidda
    
    U.S.$
    
    
    27
    
    
    
    2015
    
    
    Security includes
the gas
distribution
concession and
income trust
    
    No restrictions, but must
meet leverage and debt
service coverage ratios,
among others.DCL(1)
    
    Pakistani rupees
    
    
    78
    
    
    
    2010 -2019
    
    
    Charges over fixed
and current assets
    
    Restriction on dividend
distribution:  1 year
period from the Commercial
Operate Date  subject to
satisfaction of the Debt
Service Coverage Ratio
(>=1.5) and the Leverage
Ratio (Debt to Equity
<=75:25, Current
Ratio>=0.75:1) and
Applicable LawDelsur
    
    U.S.$
    
    
    65
    
    
    
    2015
    
    
    Security includes
subsidiary
guarantees and
pledges of shares
    
    No default/must meet
distribution ratios/local
lawsEDEN(2)
    
    U.S.$
    
    
    4
    
    
    
    2013
    
    
    Unsecured
    
    No default/limited to% of
excess cashElektra
    
    U.S.$
    
    
    119
    
    
    
    2018-2021
    
    
    Unsecured
    
    NoneElektro
    
    Brazilian real
    
    
    616
    
    
    
    2010-2021
    
    
    Security includes
pledge of account
receivables cash
flow and cash
collateral
    
     Default under any
Eletrobrás agreement and
certain agreements with
Banco Nacional de
Desenvolvimento Econômico
  -94-




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##### Table of Contents



Currency of
    
    Balance as of
    
    
    
    
    
    
    
    Summary of DistributionBusiness
    
    Borrowing
    
    December 31, 2009
    
    Maturity Profile
    
    Collateral
    
    RestrictionsMillions of
dollars (U.S.)e Social, or BNDES 
Dividends/Shareholder
Interest less than 110% of
the Net ProfitEMDERSA
    
    U.S.$
    
    
    46
    
    
    
    2010
    
    
    EMDERSA guarantee
    
    Debt / EBITDA < 2.25EMDERSA
    
    Argentine peso
    
    
    16
    
    
    
    2010
    
    
    Unsecured
    
    No default / local lawsENS
    
    Polish zloty
    
    
    62
    
    
    
    2010-2018
    
    
    Security includes
mortgage on assets,
assignment of
contracts, pledge
of shares, DSRA,
DSA, insurance
assignments, etc.
    
    No default/must meet
distribution ratios/local
lawsLuoyang
    
    Chinese renminbi
    
    
    119
    
    
    
    2010-2016
    
    
    Security includes
assignment of
rights to
collection of
revenues and pledge
of shares
    
    China Development Bank
approval for dividendsPQP
    
    U.S.$
    
    
    71
    
    
    
    2012-2015
    
    
    Security includes
mortgage on assets,
assignment of
contracts, pledge
of shares etc.
    
    No default/must meet
distribution ratios/local
lawsProenergía(3)
    
    Colombian pesos
    
    
    543
    
    
    
    2010-2016
    
    
    Unsecured
    
    Debt Service Ratio (>=1.3)Proenergía(3)
    
    Chilean pesos
    
    
    19
    
    
    
    2019
    
    
    Security includes
mortgage over
assets
    
    ((Royalty + Dividends) /
(Royalty + Net Income)) <
0.6Proenergía(3)
    
    U.S.$
    
    
    18
    
    
    
    2010-2012
    
    
    Security includes
mortgage over
assets
    
    Dividends must not exceed
30% of Net IncomePromigas(4)
    
    Colombian pesos
    
    
    469
    
    
    
    2011-2024
    
    
    Unsecured
    
    NonePromigas(5)
    
    U.S.$
    
    
    24
    
    
    
    2010-2012
    
    
    Unsecured
    
    NoneTrakya
    
    U.S.$
    
    
    80
    
    
    
    2014
    
    
    Unsecured
    
    No default/must meet
distribution ratios/local
lawsOthers
    
    U.S.$ and Chinese
renminbi
    
    
    52
    
    
    
    2010-2016Total
    
    
    
    
    $2,428
 
 (1)
    
    In June 2009, DCL entered into loan agreements with its senior lenders and Sacoden pursuant
to which the senior lenders and Sacoden made loans to DCL to fund its rehabilitation efforts.
In connection with these loan agreements, DCL and Sacoden entered into a Standstill Agreement
with the senior lenders pursuant to which the parties agreed to refrain from taking legal
action against each other while DCL rehabilitates the plant and negotiates a new PPA. The
Standstill Agreement has now expired. See Note 25 to the consolidated financial statements.(2)
    
    In December 2009, EDEN signed a credit agreement amendment with its lenders and is no longer
in default. See Note 15 to the consolidated financial statements.(3)
    
    In July 2009, Promigas completed the spin-off of Proenergía to the shareholders of Promigas
with the same ownership structure and percentage that existed prior to the spin-off, and we
obtained a 52.13% ownership in Proenergía. Through Proenergía, we own 27.45% of SIE, our
retail fuel operations.(4)
    
    Some of the credit facilities included in this entry may have shorter maturity profiles.(5)
    
    Some of the credit facilities included in this entry may have shorter maturity profiles,
unsecured collateral and no distribution restrictions. 
 C. Research and Development, Patents and Licenses, Etc.
  
 D. Trend Information
  Capital Markets
  -95-




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##### Table of Contents



Macroeconomic Developments in Emerging Markets
 Foreign Currency Changes real real
 Acquisitions and Future Greenfield Development
 Regulatory Developments in Emerging Markets
 Commodity Prices
 
 E. Off-Balance Sheet Arrangements
    -96-




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##### Table of Contents



F. Tabular Disclosure of Contractual Obligations
  Less Than
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 YearsMillions of dollars (U.S.)Debt obligations(a)
    
    $
    3,718
    
    
    $
    613
    
    
    $
    1,047
    
    
    $
    1,193
    
    
    $
    865Interest payments on long-term debt(b)
    
    
    1,140
    
    
    
    231
    
    
    
    341
    
    
    
    234
    
    
    
    334Pension obligations
    
    
    268
    
    
    
    16
    
    
    
    38
    
    
    
    46
    
    
    
    168Operating lease obligations(c)
    
    
    24
    
    
    
    8
    
    
    
    9
    
    
    
    5
    
    
    
    2Capital lease obligations(d)
    
    
    71
    
    
    
    12
    
    
    
    18
    
    
    
    29
    
    
    
    12Power commitments(e)
    
    
    19,432
    
    
    
    1,166
    
    
    
    2,506
    
    
    
    2,255
    
    
    
    13,505Fuel commitments(f)
    
    
    4,912
    
    
    
    1,722
    
    
    
    944
    
    
    
    590
    
    
    
    1,656Transportation commitments(g)
    
    
    1,154
    
    
    
    79
    
    
    
    165
    
    
    
    175
    
    
    
    735Equipment commitments(h)
    
    
    146
    
    
    
    9
    
    
    
    5
    
    
    
    29
    
    
    
    103Other commitments(i)
    
    
    16
    
    
    
    9
    
    
    
    5
    
    
    
    1
    
    
    
    1Total
    
    $
    30,881
    
    
    $
    3,865
    
    
    $
    5,078
    
    
    $
    4,557
    
    
    $
    17,381
 
 (a)
    
    Debt obligations include non-recourse debt and recourse debt presented in our consolidated
financial statements. Non-recourse debt borrowings are not a direct obligation by us, and are
primarily collateralized by the capital stock of the relevant business and in certain cases
the physical assets of, and/or all significant agreements associated with, such businesses.
These non-recourse financings include structured project financings, acquisition financings,
working capital facilities and all other consolidated debt of the businesses. Recourse debt
borrowings are our borrowings.(b)
    
    Interest payments are estimated based on final maturity dates of debt securities outstanding
at December 31, 2009 and do not reflect anticipated future financing, new debt issuances,
early redemptions, or certain interests on liabilities other than debt. Variable rate
interest obligations are estimated based on rates as of December 31, 2009.(c)
    
    Operating lease obligations are the future obligations primarily related to land, office,
office equipment and vehicles in which several of our businesses are the lessees.(d)
    
    Capital lease obligations are the future obligations primarily related to certain pipelines
and equipment in which Promigas and Elektro are the lessees. The leases are all nonrecourse.
As of December 31, 2009 and 2008, the net assets held under capital leases were $85 million
and $42 million, respectively, and imputed interest for these obligations were $20 million and
$14 million, respectively.(e)
    
    Represents take-or-pay and other commitments to purchase power of various quantities from
third parties.(f)
    
    Represents take-or-pay and other commitments to purchase fuel of various quantities from
third parties.(g)
    
    Represents a commitment to purchase gas transportation services from an unconsolidated
affiliate and third parties.(h)
    
    Represents commitments of various duration for parts and maintenance services provided by
third parties, which are expensed during the year of service.(i)
    
    Represents various other purchase commitments with third parties.  -97-




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##### Table of Contents



Item 6. Directors, Senior Management and Employees
 
 A. Directors and Senior Management
  Name
    
    PositionRonald W. Haddock
    
    Non-Executive Chairman of the Board of DirectorsJames A. Hughes
    
    Chief Executive Officer and DirectorEduardo Pawluszek
    
    EVP, Chief Financial OfficerMaureen J. Ryan
    
    EVP, General Counsel and Chief Compliance OfficerEmilio Vicens
    
    EVP, Commercial/OperationsLaura C. Fulton
    
    EVP, AccountingAndrew Parsons
    
    EVP, AdministrationBrian Zatarain
    
    EVP, RiskBrian Stanley
    
    EVP, Operations*Robert Barnes
    
    DirectorPhilippe A. Bodson
    
    DirectorHenri Philippe Reichstul
    
    DirectorRobert E. Wilhelm
    
    DirectorGeorge P. Kay
    
    DirectorWilfried E. Kaffenberger
    
    DirectorJulian Green
    
    Director
 
 *
    
    Retired February 2010 Ronald W. Haddock
 James A. Hughes
 Eduardo Pawluszek
  -98-




---



##### Table of Contents



Maureen J. Ryan
 Emilio A. Vicens
 Laura C. Fulton
 Andrew Parsons
 Brian Zatarain
 Brian Stanley
  -99-




---



##### Table of Contents



Robert Barnes
 Philippe A. Bodson
 Henri Philippe Reichstul
 Robert E. Wilhelm
  -100-




---



##### Table of Contents



George P. Kay
 Wilfried E. Kaffenberger
 Julian Green
 International Management
  Years of Experiencein the EnergyName
    
    Position
    
    
    IndustryAntonio Celia Martínez-Aparicio
    
    CEO of Promigas
    
    
    25Carlos Marcio Ferreira
    
    CEO of Elektro
    
    
    6Pablo Ferrero
    
    EVP, Southern Cone
    
    
    18Roberto Figueroa
    
    EVP, Central America/Caribbean
    
    
    22Jacek Glowacki
    
    VP, AEI Europe
    
    
    28Colin Tam
    
    CEO of AEI Asia
    
    
    37
  -101-




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##### Table of Contents



B. Compensation
 Compensation of Directors and Executive Officers
   
 C. Board Practices
 Duties of Directors
   
    
    overall responsibility for the management of the business of our company;
    
    convening shareholders annual general meetings and reporting its work to shareholders
at such meetings;
    
    issuing authorized but unissued shares and redeeming or purchasing outstanding shares
of our company;
    
    declaring dividends and distributions;
    
    appointing officers and determining the term of office and compensation of officers;
    
    exercising the borrowing powers of our company and mortgaging the property of our
company; and
    
    approving the transfer of shares of our company, including the registering of such
 shares in our share register.
 Terms of Directors and Executive Officers
   -102-




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##### Table of Contents



Qualification
  Board Committees
  Audit Committee
    
    
    selecting, in its sole discretion, independent auditors to audit the books and accounts
of us and our subsidiaries for each fiscal year, reviewing the performance of such
independent auditors and making decisions regarding the replacement or termination of the
independent auditors;
    
    annually reviewing a report prepared by the independent auditors describing such firms
internal quality-control procedures, any material issues raised by the most recent internal
quality control review of such firm and all relationships between the independent auditors
and us, and present its conclusions with respect to such matters to our board;
    
    overseeing the independence of our independent auditors;
    
    establishing clear hiring policies for employees or former employees of the independent
auditors;
    
    reviewing with management and the independent auditors our annual audited financial
statements and periodic financial statements and any major related issues, critical
accounting policies, including financial reporting issues that could have a material impact
on our financial statements, and major issues regarding accounting principles and financial
statements presentations;
    
    resolving disagreements between our independent auditors and our management regarding
financial reporting;
    
    reviewing with the independent auditors any problems or difficulties encountered in the
course of any audit work and managements response;
  -103-




---



##### Table of Contents




    
    reviewing the annual audit plan of our independent auditors and the annual working plan
of our internal auditors;
    
    reviewing our internal audit function, the adequacy and effectiveness of our accounting
and internal control policies and procedures, and managements yearly report assessing the
effectiveness of our internal control over financial reporting;
    
    discussing guidelines and policies governing the process by which our exposure to risk
is assessed and managed, and steps taken to monitor and control such exposure;
    
    preparing the reports required under the rules of the SEC to be included in an annual
proxy statement, as applicable;
    
    establishing procedures for the receipt, retention and treatment of complaints
regarding accounting, internal accounting controls or auditing matters and the
confidential, anonymous submission by our employees of concerns regarding questionable
accounting or auditing matters; and
    
    periodically reviewing with our chief executive officer, chief financial officer,
internal auditors and independent auditors all significant deficiencies and material
weaknesses in the design or operation of internal control over financial reporting that are
reasonably likely to adversely affect our ability to record, process, summarize, and report
financial data and any changes in internal control over financial reporting that occurred
during the most recent fiscal quarter and that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
 Compensation Committee
   
    
    reviewing our executive compensation, incentive-based, equity-based, general
compensation and other employee benefits plans and our goals and objectives with respect to
such plans, and amend or recommend amending such plans or our goals and objectives with
respect to such plans as appropriate;
    
    evaluating annually the performance of our executive officers in light of the goals and
objectives of our executive compensation plans, and determining and approving the
compensation level of such executive officers based on this evaluation, including the
long-term incentive component of their compensation, if any; and
    
    evaluating annually the appropriate level of compensation for board and committee
service by non-employee members of the board of directors.
 Nominating and Corporate Governance Committee
   -104-




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##### Table of Contents




    
    establishing procedures for evaluating the suitability of potential director nominees
and recommending to our board director nominees for election by shareholders or appointment
by our board, as the case may be;
    
    reviewing the suitability for continued service as a director of each member of our
board of directors upon the expiration of the directors term or a significant change in
such directors status;
    
    reviewing annually with our board of directors the composition of the board as a whole
and recommending measures necessary to ensure compliance with the applicable standards;
    
    reviewing and making recommendations with respect to the size of our board of directors
and the frequency and structure of board meetings as proposed by the chairman of our board;
    
    making recommendations to our board regarding the size and composition of each standing
committee of our board;
    
    making recommendations concerning any aspect of the procedures of our board of
directors that the committee considers warranted;
    
    monitoring the functioning of the committees of our board and making recommendations
for any changes that the committee may deem necessary;
    
    reviewing any actual or potential conflict of interest between us and any director
having a personal interest in any matter before the board;
    
    developing and reviewing periodically the corporate governance principles adopted by
our board to ensure compliance with applicable standards and recommending any desirable
change to our board; and
    
    overseeing an annual self-assessment of the board of directors performance, as well as
the performance of each board committee and overseeing the evaluation of our management,
including our chief executive officer.
 Corporate Governance
  Interested Transactions
  Remuneration and Borrowing
   -105-




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##### Table of Contents



Indemnification
   
 D. Employees
  
 E. Share Ownership
 Share Ownership of Directors and Executive Officers
  Ordinary Shares Held by Directors and Executive OfficersOrdinary SharesName
    
    Beneficially Owned
    
    
    Total Options Owned
    
    
    Grand Total Owned
    
    
    PercentDirectors and Executive OfficersRonald W. Haddock(1)
    
    
    1,553,013
    
    
    
    2,792
    
    
    
    1,555,805
    
    
    
    *James A. Hughes(2)
    
    
    6,918
    
    
    
    49,189
    
    
    
    56,107
    
    
    
    *Robert Barnes(3)
    
    
    457
    
    
    
    2,492
    
    
    
    2,949
    
    
    
    *Philippe A. Bodson(4)
    
    
    36,134
    
    
    
    2,492
    
    
    
    38,626
    
    
    
    *George P. Kay
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Henri Philippe Reichstul(5)
    
    
    32,572
    
    
    
    2,193
    
    
    
    34,765
    
    
    
    *Robert E. Wilhelm(6)
    
    
    37,466
    
    
    
    2,792
    
    
    
    40,258
    
    
    
    *Wilfried E. Kaffenberger(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Julian Green(7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Eduardo Pawluszek(8)
    
    
    658
    
    
    
    4,748
    
    
    
    5,406
    
    
    
    *Maureen J. Ryan(9)
    
    
    6,380
    
    
    
    42,888
    
    
    
    49,268
    
    
    
    *Emilio Vicens(10)
    
    
    2,281
    
    
    
    15,346
    
    
    
    17,627
    
    
    
    *Laura C. Fulton(11)
    
    
    849
    
    
    
    6,677
    
    
    
    7,526
    
    
    
    *Andrew Parsons(12)
    
    
    42,472
    
    
    
    15,898
    
    
    
    58,370
    
    
    
    *Brian Zatarain(13)
    
    
    18,927
    
    
    
    11,846
    
    
    
    30,773
    
    
    
    *Brian Stanley(14)
    
    
    80,882
    
    
    
    20,752
    
    
    
    101,634
    
    
    
    *All Directors and Executive Officers as a Group
    
    
    1,819,009
    
    
    
    180,105
    
    
    
    1,999,114
    
    
    
    *
 
 (1)
    
    1,553,013 shares are vested and 3,788 shares are unvested. 2,792 options are vested and
21,731 options are unvested. 1,130 options have an exercise price of $13.60/share and an
expiration date of 9/13/2014. 1,058 options have an exercise price of $16.00/share and an
expiration date of 2/22/2018. 604 options have an exercise price of $13.10/share and an
expiration date of 2/5/2016.(2)
    
    6,918 shares are vested and 100,654 shares are unvested. 49,189 options are vested and
325,291 options are unvested. 12,917 options have an exercise price of $13.60/share and an
expiration date of 9/13/2014. 24,195 options have an exercise price of $16.00/share and an
expiration date of 2/22/2018. 12,077 options have an exercise price of $13.10/share and an
expiration date of 2/5/2016.(3)
    
    457 shares are vested and 3,562 shares are unvested. 2,492 options are vested and 20,361
options are unvested. 1,008 options have an exercise price of $13.60/share and an expiration
date of 9/13/2014. 945 options have an exercise price of $16.00/share and an expiration date
of 2/22/2018. 539 options have an exercise price of $13.10/share and an expiration date of
2/5/2016.(4)
    
    36,134 shares are vested and 3,562 shares are unvested. 2,492 options are vested and 20,361
options are unvested. 1,008 options have an exercise price of $13.60/share and an expiration
date of 9/13/2014. 945 options have an exercise price of $16.00/share and an expiration date
of 2/22/2018. 539 options have an exercise price of $13.10/share and an expiration date of
2/5/2016.  -106-




---



##### Table of Contents



(5)
    
    32,572 shares are vested and 3,337 shares are unvested. 2,193 options are vested and 18,990
options are unvested. 887 options have an exercise price of $13.60/share and an expiration
date of 9/13/2014. 831 options have an exercise price of $16.00/share and an expiration date
of 2/22/2018. 475 options have an exercise price of $13.10/share and an expiration date of
2/5/2016.(6)
    
    37,466 shares are vested and 3,788 shares are unvested. 2,792 options are vested and 21,731
options are unvested. 1,130 options have an exercise price of $13.60/share and an expiration
date of 9/13/2014. 1,058 options have an exercise price of $16.00/share and an expiration
date of 2/22/2018. 604 options have an exercise price of $13.10/share and an expiration date
of 2/5/2016.(7)
    
    1,696 shares are unvested. 8,940 options are unvested.(8)
    
    658 shares are vested and 24,287 shares are unvested. 4,748 options are vested and 55,548
options are unvested. 3,023 options have an exercise price of $16.00/share and an expiration
date of 2/22/2018. 1,725 options have an exercise price of $13.10/share and an expiration
date of 2/5/2016.(9)
    
    6,380 shares are vested and 34,874 shares are unvested. 42,888 options are vested and
128,757 options are unvested. 31,431 options have an exercise price of $11.18/share and an
expiration date of 2/28/2014. 7,258 options have an exercise price of $16.00/share and an
expiration date of 2/22/2018. 4,199 options have an exercise price of 13.10/share and an
expiration date of 2/5/2016.(10)
    
    2,281 shares are vested and 26,295 shares are unvested. 15,346 options are vested and 90,811
options are unvested. 6,458 options have an exercise price of $13.60/share and an expiration
date of 9/13/2014. 6,048 options have an exercise price of $16.00/share and an expiration
date of 2/22/2018. 2,840 options have an exercise price of $13.10/share and an expiration
date of 2/5/2016.(11)
    
    849 shares are vested and 17,318 shares are unvested. 6,677 options are vested and 50,629
options are unvested. 4,620 options have an exercise price of $16.00/share and an expiration
date of 2/22/2018. 2,057 options have an exercise price of $13.10/share and an expiration
date of 2/5/2016.(12)
    
    42,472 shares are vested and 21,245 shares are unvested. 15,898 options are vested and
67,899 options are unvested. 7,250 options have an exercise price of $11.18/share and an
expiration date of 2/28/2014. 6,048 options have an exercise price of $16.00/share and an
expiration date of 2/22/2018. 2,600 options have an exercise price of $13.10/share and an
expiration date of 2/5/2016.(13)
    
    18,927 shares are vested and 16,756 shares are unvested. 11,846 options are vested and
55,458 options are unvested. 5,374 options have an exercise price of $11.18/share and an
expiration date of 2/28/2014. 4,233 options have an exercise price of $16.00/share and an
expiration date of 2/22/2018. 2,239 options have an exercise price of $13.10/share and an
expiration date of 2/5/2016.(14)
    
    1,669 shares vested in
February 2010, and 6,929 shares are vesting upon cessation of
employment for a
total of 80,882 vested shares, 20,752 options are vested and 54,497 options are vesting upon
cessation of employment. 12,315 options have an exercise price of $11.18/share and an expiration date of
2/28/2014. 5,625 options have an exercise price of $16.00/share and an expiration date of
2/22/2018. 2,812 options have an exercise price of $13.10/share and an expiration date of
2/5/2016.*
    
    Owns less than 1.00% based on the total number of outstanding shares of 244,113,499 as of
December 31, 2009 Incentive Plans
 AEI 2007 Incentive Plan
  Options
   -107-




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##### Table of Contents



Restricted Share Grants
  Performance Shares
  Other Awards
  Stock Ownership Plan
  Employment Agreements
   -108-




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##### Table of Contents



Item 7. Major Shareholders and Related Party Transactions
 
 A. Major Shareholders
  Ordinary Shares Held by 5%ShareholdersOrdinary SharesBeneficially OwnedGreater than 5% Shareholders
    
    Number
    
    
    PercentAshmore Cayman SPC No. 3 Limited on behalf of and for the account of AEI Segregated Portfolio
    
    
    20,865,705
    
    
    
    8.55
    %Ashmore Global Special Situations Fund 2 Limited
    
    
    13,169,905
    
    
    
    5.39
    %Ashmore Global Special Situations Fund 3 Limited Partnership
    
    
    23,013,134
    
    
    
    9.43
    %Ashmore Global Special Situations Fund 4 Limited Partnership
    
    
    10,977,303
    
    
    
    4.50
    %Ashmore Global Special Situations Fund 5 Limited Partnership
    
    
    1,000,000
    
    
    
    0.41
    %Ashmore SICAV Emerging Markets Debt Fund
    
    
    4,263,396
    
    
    
    1.75
    %Ashmore Global Opportunities Limited
    
    
    6,237,039
    
    
    
    2.55
    %Asset Holder PCC Limited on behalf of the cell, Ashmore Emerging Markets Liquid
Investment Portfolio
    
    
    45,353,925
    
    
    
    18.58
    %EMDCD Ltd.
    
    
    5,091,645
    
    
    
    2.09
    %Ashmore Emerging Markets Global Investment Portfolio Limited
    
    
    1,435,248
    
    
    
    0.59
    %Ashmore Growing Multi Strategy Fund Limited(1)
    
    
    1,005,938
    
    
    
    0.41
    %Ashmore Emerging Markets Debt and Currency Fund
    
    
    1,233,864
    
    
    
    0.51
    %Total Ashmore Funds
    
    
    133,647,102
    
    
    
    54.75
    %Buckland Investment Pte Ltd.(2)
    
    
    54,588,392
    
    
    
    22.36
    %Sherbrooke, Ltd.(3)
    
    
    13,931,097
    
    
    
    5.71
    %
 
 (1)
    
    In February 2010, Ashmore Growing Multi Strategy Fund Limited transferred 100,000
ordinary shares to Ashmore SICAV Emerging Markets Debt Fund.(2)
    
    Buckland Investment Pte Ltd shares the power to vote and the power to dispose of the
shares with each of GIC Special Investments Pte Ltd and the Government of Singapore Investment
Corporation Pte Ltd., each of which is a Singapore private limited company. No individual has
beneficial ownership over these shares. Voting and investment decisions relating to these
shares are made by the GIC Special Investments Pte Ltd. investment committee, which is
currently comprised of eight members: Teh Kok Peng, Ng Kin Sze, Ang Eng Seng, Kunna Chinniah,
Tay Lim Hock, Eugene Wong, John Tang and Mayukh Mitter.(3)
    
    Eton Park Capital Management, L.P. is the investment manager for Sherbrooke, Ltd.
Eric M. Mindich controls Eton Park Capital Management, L.P. as the managing member of its
general partner, Eton Park Capital Management, L.L.C.  
 B. Related Party Transactions
 Ashmore Management Services Agreement
    -109-




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PIK Notes
   Consulting Agreement
  
 C. Interests of Experts and Counsel
   -110-




---



##### Table of Contents



Item 8. Financial Information
 
 A. Consolidated Statements and Other Financial Information
  
 8.A.7 Legal Proceedings
  
 8.A.8 Dividend Policy
     
 B. Significant Changes
   -111-




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##### Table of Contents



Item 9. The Offer and Listing
 
 A. Offer and Listing Details
 Price History of Stock
  
 B. Plan of Distribution
  
 C. Markets
  
 D. Selling Shareholders
  
 E. Dilution
  
 F. Expenses of the Issue
   -112-




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##### Table of Contents



Item 10. Additional Information
 
 A. Share Capital
  
 B. Memorandum and Articles of Association
  
 C. Material Contracts
  Amended and Restated Credit Agreement,
 AEI 2007 Incentive Plan.
 Concession Contract 187/98,
 Second Amended and Restated Shareholders Agreement
  -113-




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##### Table of Contents



Amended and Restated Registration Rights Agreement
 Form of Indemnification Agreement
 
 D. Exchange Controls
  
 E. Taxation
 The following is a general summary of the material Cayman Islands and U.S. federal income tax
consequences relevant to our ordinary shares. The discussion is based on laws and relevant
interpretations thereof in effect as of the date hereof, all of which are subject to change or
different interpretations, possibly with retroactive effect. The discussion does not address
United States state or local tax laws, or tax laws of jurisdictions other than the Cayman Islands
and the United States.
 Cayman Islands Taxation
    -114-




---



##### Table of Contents




    
    no law which is enacted in the Cayman Islands imposing any tax to be levied on profits
or income or gains or appreciation applies to us or our operations; and
    
    the aforesaid tax or any tax in the nature of estate duty or inheritance tax are not
payable on our ordinary shares, debentures or other obligations.
  United States Federal Income Taxation
 The discussion of U.S. federal income tax matters set forth herein was not intended or written to
be used, and cannot be used by any prospective taxpayer, for the purpose of avoiding tax-related
penalties under U.S. federal, state or local tax law. Each taxpayer should seek advice based on
its particular circumstances from an independent tax advisor.
   Dividends
  Sale or Other Disposition of Ordinary Shares
   -115-




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##### Table of Contents



Passive Foreign Investment Company Rules
   Backup withholding and information reporting requirements
  The above summary is not intended to constitute a complete analysis of all U.S. federal income tax
consequences to a U.S. Holder of acquiring, holding, and disposing of ordinary shares. U.S.
Holders should consult their own tax advisors with respect to the U.S. federal, state, local and
non-U.S. consequences of acquiring, holding and disposing of ordinary shares.
 
 F. Dividends and Paying Agents
  
 G. Statement by Experts
  
 H. Documents on Display
   -116-




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I. Subsidiary Information
   -117-




---



##### Table of Contents



Item 11. Quantitative and Qualitative Disclosures About Market Risk
 Quantitative and Qualitative Analysis of Market Risk
 Overview Regarding Market Risks
  Interest Rate Risks
  Foreign Exchange Rate Risk
 real peso
 real peso real peso
 real
  -118-




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##### Table of Contents



As of December 31, 2009Notional Amount
    
    
    Fair Value(In millions of U.S. Dollars)Foreign Currency Forward ContractsDesignated as Net Investment HedgeSell Brazilian real, buy U.S. dollar
    
    $
    88
    
    
    $
    1Foreign Currency Forward ContractNot Designated as HedgeSell Argentine peso, buy U.S. dollar
    
    
    3
    
    
    
    Sell Brazilian real, buy U.S. dollar
    
    
    10
    
    
    
    
 Commodity Price Risk
   -119-




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##### Table of Contents



Item 12. Description of Securities Other Than Equity Securities
   -120-




---



##### Table of Contents



PART
II
Item 13. Defaults, Dividend Arrearages and Delinquencies
   -121-




---



##### Table of Contents



Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
   -122-




---



##### Table of Contents



Item 15. Controls and Procedures
 Disclosure Controls and Procedures
  Managements Annual Report on Internal Control Over Financial Reporting
   Changes in Internal Control Over Financial Reporting
   -123-




---



##### Table of Contents



Item 16A. Audit Committee Financial Expert
   -124-




---



##### Table of Contents



Item 16B. Code of Business Conduct
 www.aeienergy.com
  -125-




---



##### Table of Contents



Item 16C. Principal Accountant Fees and Services
  December 31,2009
    
    
    2008Millions of dollars (U.S.)Audit fees(a)
    
    $
    9.6
    
    
    $
    13.1Audit-related fees(b)
    
    
    1.8
    
    
    
    0.4Tax Fees(c)
    
    
    0.5
    
    
    
    0.2Other fees(d)
    
    
    0.3
    
    
    
    
 
 (a)
    
    Includes fees for the audit of the Companys annual financial statements, the review of
quarterly financial statements, services in connection with statutory and regulatory filings
or engagements, and comfort letters and consents for financings and filings made with the SEC.(b)
    
    Fees for the review of internal control procedures and due diligence work and consultation in
connection with various business and financing transactions.(c)
    
    Our principal accounting firm does not provide tax consulting and advisory services to AEI or
any of its affiliates.(d)
    
    Includes fees for non-audit services consisting of miscellaneous projects. Approval of Fees 
  -126-




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##### Table of Contents



Item 16D. Exemptions From the Listing Standards for Audit Committees
   -127-




---



##### Table of Contents



Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
   -128-




---



##### Table of Contents



Item 16F. Change in Registrants Certifying Accountant
   -129-




---



##### Table of Contents



Item 16G. Corporate Governance
   -130-




---



##### Table of Contents



Item 17. Financial Statements
   -131-




---



##### Table of Contents



Item 18. Financial Statements
   -132-




---



##### Table of Contents



ITEM 18. FINANCIAL STATEMENTS
 INDEX TO FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    F-2Consolidated Balance Sheets
    
    F-3Consolidated Statements of Operations
    
    F-4Consolidated Statements of Cash Flows
    
    F-5Consolidated Statements of Equity
    
    F-6Notes to the Consolidated Financial Statements
    
    F-7Schedule II Valuation And Qualifying Accounts
    
    F-57
  F-1




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    /s/ DELOITTE & TOUCHE LLP 
  F-2




---



##### Table of Contents



AEI AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 December 31,2009
    
    
    2008(Millions of dollars (U.S.),except share and par value data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    682
    
    
    $
    736Restricted cash
    
    
    77
    
    
    
    83Accounts and notes receivable:Trade (net of allowance of $78 and $69, respectively)
    
    
    932
    
    
    
    863Unconsolidated affiliates
    
    
    16
    
    
    
    11Inventories
    
    
    273
    
    
    
    239Prepaids and other current assets
    
    
    401
    
    
    
    384Total current assets
    
    
    2,381
    
    
    
    2,316Property, plant and equipment, net
    
    
    4,200
    
    
    
    3,524Investments in and notes receivable from unconsolidated affiliates
    
    
    1,177
    
    
    
    907Goodwill
    
    
    663
    
    
    
    614Intangibles, net
    
    
    489
    
    
    
    393Other assets
    
    
    1,315
    
    
    
    1,199Total assets
    
    $
    10,225
    
    
    $
    8,953LIABILITIES AND EQUITYCurrent liabilities:Accounts payable:Trade
    
    $
    608
    
    
    $
    572Unconsolidated affiliates
    
    
    31
    
    
    
    30Current portion of long-term debt, including related party
    
    
    613
    
    
    
    547Accrued and other liabilities
    
    
    862
    
    
    
    594Total current liabilities
    
    
    2,114
    
    
    
    1,743Long-term debt, including related party
    
    
    3,105
    
    
    
    3,415Deferred income taxes
    
    
    168
    
    
    
    199Other liabilities
    
    
    1,393
    
    
    
    1,331Commitments and contingenciesEquity:Common stock, $0.002 par value, 5,000,000,000 shares authorized;
244,113,499 and 224,624,481 shares issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    1,966
    
    
    
    1,754Retained earnings
    
    
    577
    
    
    
    280Accumulated other comprehensive income (loss)
    
    
    289
    
    
    
    (204
    )Total shareholders equity attributable to AEI
    
    
    2,832
    
    
    
    1,830Equity attributable to noncontrolling interests
    
    
    613
    
    
    
    435Total equity
    
    
    3,445
    
    
    
    2,265Total liabilities and equity
    
    $
    10,225
    
    
    $
    8,953
   F-3




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##### Table of Contents



AEI AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Years EndedDecember 31,2009
    
    
    2008
    
    
    2007(Millions of dollars (U.S.),except per share data)Revenues
    
    $
    8,185
    
    
    $
    9,211
    
    
    $
    3,216Costs of sales
    
    
    6,238
    
    
    
    7,347
    
    
    
    1,796Operating expenses:Operations, maintenance, and general and administrative expenses
    
    
    863
    
    
    
    894
    
    
    
    630Depreciation and amortization
    
    
    272
    
    
    
    268
    
    
    
    217Taxes other than income
    
    
    45
    
    
    
    43
    
    
    
    43Other charges
    
    
    123
    
    
    
    56
    
    
    
    50(Gain) loss on disposition of assets
    
    
    20
    
    
    
    (93
    )
    
    
    (21
    )Total operating expenses
    
    
    1,323
    
    
    
    1,168
    
    
    
    919Equity income from unconsolidated affiliates
    
    
    107
    
    
    
    117
    
    
    
    76Operating income
    
    
    731
    
    
    
    813
    
    
    
    577Other income (expense):Interest income
    
    
    74
    
    
    
    88
    
    
    
    110Interest expense
    
    
    (327
    )
    
    
    (378
    )
    
    
    (306
    )Foreign currency transaction gain (loss), net
    
    
    9
    
    
    
    (56
    )
    
    
    19Gain (loss) on early retirement of debt
    
    
    10
    
    
    
    
    
    
    
    (33
    )Other income (expense), net
    
    
    70
    
    
    
    9
    
    
    
    (22
    )Total other expense
    
    
    (164
    )
    
    
    (337
    )
    
    
    (232
    )Income before income taxes
    
    
    567
    
    
    
    476
    
    
    
    345Provision for income taxes
    
    
    279
    
    
    
    194
    
    
    
    193Income from continuing operations
    
    
    288
    
    
    
    282
    
    
    
    152Income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    3Gain from disposal of discontinued operations
    
    
    
    
    
    
    
    
    
    
    41Net income
    
    
    288
    
    
    
    282
    
    
    
    196Less: Net income (loss) attributable to noncontrolling interests
    
    
    (9
    )
    
    
    124
    
    
    
    65Net income attributable to AEI
    
    $
    297
    
    
    $
    158
    
    
    $
    131Basic and diluted earnings per share:Income from continuing operations attributable to AEI
    
    $
    1.27
    
    
    $
    0.73
    
    
    $
    0.42Discontinued operations attributable to AEI
    
    
    
    
    
    
    
    
    
    
    0.21Net income attributable to AEI
    
    $
    1.27
    
    
    $
    0.73
    
    
    $
    0.63Amounts attributable to AEI:Income from continuing operations
    
    $
    297
    
    
    $
    158
    
    
    $
    87Discontinued operations
    
    
    
    
    
    
    
    
    
    
    44Net income
    
    $
    297
    
    
    $
    158
    
    
    $
    131
   F-4




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##### Table of Contents



AEI AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Years EndedDecember 31,2009
    
    
    2008
    
    
    2007(Millions of dollars (U.S.))Cash flows from operating activities:Net income
    
    $
    288
    
    
    $
    282
    
    
    $
    196Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    272
    
    
    
    268
    
    
    
    217Other charges
    
    
    123
    
    
    
    56
    
    
    
    50Deferred revenues
    
    
    58
    
    
    
    55
    
    
    
    120Deferred income taxes
    
    
    69
    
    
    
    11
    
    
    
    106Equity earnings from unconsolidated affiliates
    
    
    (107
    )
    
    
    (117
    )
    
    
    (76
    )Distributions from unconsolidated affiliates
    
    
    53
    
    
    
    67
    
    
    
    28Foreign currency transaction (gain) loss, net
    
    
    (9
    )
    
    
    56
    
    
    
    (19
    )(Gain) loss on disposition of assets
    
    
    20
    
    
    
    (93
    )
    
    
    (21
    )Gain from disposal of discontinued operations
    
    
    
    
    
    
    
    
    
    
    (41
    )(Gain) loss on early retirement of debt
    
    
    (10
    )
    
    
    
    
    
    
    33Changes in operating assets and liabilities, net of translation, acquisitions
dispositions and non-cash items:Trade receivables
    
    
    (48
    )
    
    
    (85
    )
    
    
    (59
    )Accounts payable, trade
    
    
    1
    
    
    
    24
    
    
    
    77Inventories
    
    
    68
    
    
    
    (15
    )
    
    
    (7
    )Prepaids and other current assets
    
    
    1
    
    
    
    4
    
    
    
    (5
    )Regulatory assets and liabilities
    
    
    32
    
    
    
    (32
    )
    
    
    102Other
    
    
    10
    
    
    
    27
    
    
    
    (15
    )Net cash provided by operating activities
    
    
    821
    
    
    
    508
    
    
    
    686Cash flows from investing activities:Proceeds from sale of investments
    
    
    60
    
    
    
    99
    
    
    
    162Capital expenditures
    
    
    (441
    )
    
    
    (372
    )
    
    
    (249
    )Cash paid for acquisitions, exclusive of cash and cash equivalents acquired
    
    
    (171
    )
    
    
    (253
    )
    
    
    (1,111
    )Cash and cash equivalents acquired
    
    
    18
    
    
    
    60
    
    
    
    21Decrease in restricted cash
    
    
    265
    
    
    
    199
    
    
    
    283Increase in restricted cash
    
    
    (256
    )
    
    
    (121
    )
    
    
    (222
    )Contributions to unconsolidated subsidiaries
    
    
    (9
    )
    
    
    
    
    
    
    Other
    
    
    (25
    )
    
    
    (26
    )
    
    
    (35
    )Net cash used in investing activities
    
    
    (559
    )
    
    
    (414
    )
    
    
    (1,151
    )Cash flows from financing activities:Issuance of debt
    
    
    1,692
    
    
    
    1,367
    
    
    
    2,418Repayment of debt
    
    
    (1,883
    )
    
    
    (1,226
    )
    
    
    (2,205
    )Payment of debt issuance costs
    
    
    
    
    
    
    
    
    
    
    (18
    )Proceeds from issuance of common shares
    
    
    
    
    
    
    200
    
    
    
    Dividends paid to noncontrolling interests
    
    
    (71
    )
    
    
    (167
    )
    
    
    (101
    )Purchase of subsidiary shares from noncontrolling interests
    
    
    (90
    )
    
    
    
    
    
    
    Other
    
    
    (18
    )
    
    
    (1
    )
    
    
    (6
    )Net cash (used in) provided by financing activities
    
    
    (370
    )
    
    
    173
    
    
    
    88Effect of exchange rate changes on cash
    
    
    54
    
    
    
    (47
    )
    
    
    63Increase (decrease) in cash and cash equivalents
    
    
    (54
    )
    
    
    220
    
    
    
    (314
    )Cash and cash equivalents, beginning of period
    
    
    736
    
    
    
    516
    
    
    
    830Cash and cash equivalents, end of period
    
    $
    682
    
    
    $
    736
    
    
    $
    516Cash payments for income taxes, net of refunds
    
    $
    174
    
    
    $
    173
    
    
    $
    172Cash payments for interest, net of amounts capitalized
    
    $
    278
    
    
    $
    264
    
    
    $
    246Non-cash exchange of related party debt for common shares
    
    $
    196
    
    
    $
    
    
    
    $
    Non-cash payments for acquisitions
    
    $
    75
    
    
    $
    24
    
    
    $
    
   F-5




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##### Table of Contents



AEI AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF EQUITY
 AEIAccumulatedAdditional
    
    
    Retained
    
    
    OtherCommon
    
    
    Paid-In
    
    
    Earnings
    
    
    Comprehensive
    
    
    NoncontrollingStock
    
    
    Capital
    
    
    (Deficit)
    
    
    Income (Loss)
    
    
    Interests
    
    
    Total Equity(Millions of dollars (U.S.))Balance, January 1, 2007
    
    $
    
    
    
    $
    1,433
    
    
    $
    (9
    )
    
    $
    17
    
    
    $
    357
    
    
    $
    1,798Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    131
    
    
    
    
    
    
    
    65
    
    
    
    196Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    210
    
    
    
    2
    
    
    
    212Amortization of actuarial and investment
loss, net of income tax of $8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    16Changes in fair value of derivatives, net of
settlements, net of income tax of $0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25
    )
    
    
    (2
    )
    
    
    (27
    )Change in fair value of available-for-sale-
securities, net of income tax of $0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    131
    
    
    
    198
    
    
    
    65
    
    
    
    394Contribution of invested capital
    
    
    
    
    
    
    79
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79Compensation under stock incentive plan
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (91
    )
    
    
    (91
    )Changes in ownership
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (40
    )
    
    
    (40
    )Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (3
    )Balance, December 31, 2007
    
    $
    
    
    
    $
    1,521
    
    
    $
    122
    
    
    $
    215
    
    
    $
    288
    
    
    $
    2,146Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    158
    
    
    
    
    
    
    
    124
    
    
    
    282Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (343
    )
    
    
    (43
    )
    
    
    (386
    )Amortization of actuarial and investment
loss, net of income tax of $16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    
    
    
    
    32Changes in fair value of derivatives, net of
settlements, net of income tax of $2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (43
    )
    
    
    
    
    
    
    (43
    )Change in fair value of available-for-sale-
securities, net of income tax of $0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (62
    )
    
    
    
    
    
    
    (62
    )Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    158
    
    
    
    (419
    )
    
    
    81
    
    
    
    (180
    )Issuance of new shares
    
    
    
    
    
    
    223
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    223Compensation under stock incentive plan
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (161
    )
    
    
    (161
    )Changes in ownership
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    229
    
    
    
    229Other
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    1Balance, December 31, 2008
    
    $
    
    
    
    $
    1,754
    
    
    $
    280
    
    
    $
    (204
    )
    
    $
    435
    
    
    $
    2,265Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    297
    
    
    
    
    
    
    
    (9
    )
    
    
    288Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    396
    
    
    
    27
    
    
    
    423Amortization of actuarial and investment
gain, net of income tax of ($2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )Changes in fair value of derivatives, net of
settlements, net of income tax of $0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    
    
    
    
    32Change in fair value of available-for-sale-
securities, net of income tax of $0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    
    
    
    
    69Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    297
    
    
    
    493
    
    
    
    18
    
    
    
    808Issuance of new shares
    
    
    
    
    
    
    279
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    279Compensation under stock incentive plan
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (54
    )
    
    
    (54
    )Changes in ownership
    
    
    
    
    
    
    (100
    )
    
    
    
    
    
    
    
    
    
    
    218
    
    
    
    118Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    (4
    )Gain on PIK note exchanges
    
    
    
    
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28Balance, December 31, 2009
    
    $
    
    
    
    $
    1,966
    
    
    $
    577
    
    
    $
    289
    
    
    $
    613
    
    
    $
    3,445
   F-6




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##### Table of Contents



AEI AND SUBSIDIARIES
 
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 1. DESCRIPTION OF THE COMPANY AND OPERATIONS
   Ownership
    
    Accounting
    
    Location ofCompany Name
    
    Interest (%)
    
    Method
    
    Operations
    
    SegmentAccroven SRL (Accroven)
    
    49.25
    
    Equity Method
    
    Venezuela
    
    Natural gas transportation and servicesBeijing MacroLink Gas Co. Ltd (BMG)(a)(b)
    
    70.00
    
    Consolidated
    
    China
    
    Natural gas distributionGas Natural de Lima y Callao S.A. (Calidda)(b)
    
    80.85
    
    Consolidated
    
    Peru
    
    Natural gas distributionChilquinta Energia S.A. (Chilquinta)(b)(c)
    
    50.00
    
    Equity Method
    
    Chile
    
    Power distributionConsorcio Eólico Amayo S.A. (Amayo)(d)(e)
    
    13.42
    
    Equity Method
    
    Nicaragua
    
    Power generationDHA Cogen Limited (DCL)(b)
    
    60.23
    
    Consolidated
    
    Pakistan
    
    Power generationDistribuidora de Electricidad Del Sur, S.A. de
C.V. (Delsur)(b)
    
    86.41
    
    Consolidated
    
    El Salvador
    
    Power distributionEmpresa Distribuidora de Energia Norte, S.A.
(EDEN)(b)
    
    90.00
    
    Consolidated
    
    Argentina
    
    Power distributionElektra Noreste S.A. (Elektra)
    
    51.00
    
    Consolidated
    
    Panama
    
    Power distributionElektrocieplownia Nowa Sarzyna
Sp. z.o.o. (ENS)
    
    100.00
    
    Consolidated
    
    Poland
    
    Power generationElektro  Eletricidade e Serviços S.A. (Elektro)
    
    99.68
    
    Consolidated
    
    Brazil
    
    Power distributionEmgasud S.A. (Emgasud)(a)(d)(f)
    
    42.73
    
    Equity Method
    
    Argentina
    
    Power generationEmpresa Distribuidora Electrica Regional S.A.
(EMDERSA)(d)(g)
    
    77.10
    
    Consolidated
    
    Argentina
    
    Power distributionEmpresa Energetica Corinto Ltd. (Corinto)(b)(e)
    
    57.67
    
    Consolidated
    
    Nicaragua
    
    Power generationEPE  Empresa Produtora de Energia Ltda.
(EPE)(d)(l)
    
    100.00
    
    Consolidated
    
    Brazil
    
    Power generationFenix Power Peru S.A. (Fenix)(a)
    
    86.05
    
    Consolidated
    
    Peru
    
    Power generationGas Transboliviano S.A. (GTB)(d)(m)
    
    34.65
    
    Equity Method
    
    Bolivia
    
    Natural gas transportation and servicesGasOcidente do Mato Grosso Ltda. (GOM)(d)(l)
    
    100.00
    
    Consolidated
    
    Brazil
    
    Natural gas transportation and servicesGasOriente Boliviano Ltda. (GOB)(d)(l)
    
    100.00
    
    Consolidated
    
    Bolivia
    
    Natural gas transportation and servicesGeneradora San Felipe Limited Partnership
(Generadora San Felipe)(b)(i)
    
    100.00
    
    Consolidated
    
    Dominican Republic
    
    Power generationJaguar Energy Guatemala LLC (Jaguar)(a)
    
    100.00
    
    Consolidated
    
    Guatemala
    
    Power generationJamaica Private Power Company (JPPC)(b)
    
    84.42
    
    Consolidated
    
    Jamaica
    
    Power generationLuoyang Yuneng Sunshine Cogeneration Company
Limited (Luoyang)(a)
    
    50.00
    
    Consolidated
    
    China
    
    Power generationOperadora San Felipe Limited Partnership
(Operadora San Felipe)(b)(i)
    
    100.00
    
    Consolidated
    
    Dominican Republic
    
    Power generationPeruvian Opportunity CompanySAC
(POC)(b)(j)
    
    50.00
    
    Equity Method
    
    Peru
    
    Power distributionPromigas S.A. E.S.P. (Promigas)
    
    52.13
    
    Consolidated
    
    Colombia
    
    Natural gas transportation and services and Natural gas distribution
  F-7




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##### Table of Contents



Ownership
    
    
    
    Location ofCompany Name
    
    Interest (%)
    
    Accounting Method
    
    Operations
    
    SegmentPuerto Quetzal Power LLC (PQP)(b)
    
    100.00
    
    Consolidated
    
    Guatemala
    
    Power generationProEnergía Internacional S.A.
(Proenergía)(a)(k)
    
    52.13
    
    Consolidated
    
    Colombia
    
    Retail FuelTransportadora de Gas del Sur S.A. (TGS)(d)
    
    7.96
    
    Cost Method
    
    Argentina
    
    Natural gas transportation and servicesTipitapa Power Company Ltd (Tipitapa)(a)(e)
    
    57.67
    
    Consolidated
    
    Nicaragua
    
    Power generationTongda Energy Private Limited (Tongda)(b)
    
    100.00
    
    Consolidated
    
    China
    
    Natural gas distributionTrakya Elektrik Uretim ve Ticaret A.S.
(Trakya)(d)
    
    90.00
    
    Consolidated
    
    Turkey
    
    Power generationTransborder Gas Services Ltd. (TBS)(d)(l)
    
    100.00
    
    Consolidated
    
    Brazil, Bolivia
    
    Natural gas transportation and servicesTransportadora Brasileira Gasoduto Bolivia-Brasil
S.A. TBG (TBG)(d)(m)
    
    8.27
    
    Cost Method
    
    Brazil
    
    Natural gas transportation and servicesTransredes-Trasporte de Hidrocarburos S.A.
(Transredes)(h)
    
    1.28
    
    Cost Method
    
    Bolivia
    
    Natural gas transportation and services
 
 (a)
    
    The Companys initial
or additional interest was acquired during 2008 (see Note 3).(b)
    
    The Companys initial or additional interest was acquired during 2007 (see Note 3).(c)
    
    The Company holds a 50% interest in a related service company of Chilquinta, Tecnored S.A.
(Tecnored).(d)
    
    The Companys initial or additional interest was acquired during 2009 (see Note 3).(e)
    
    During the first quarter of 2009, as part of the Nicaragua Energy Holdings (NEH)
transaction, AEIs ownership in Corinto increased from 50% to 57.67% and AEIs ownership in
Tipitapa decreased from 100% to 57.67% (see Note 3). In addition, AEI currently owns, through
its 57.67% interest in NEH, a 13.42% equity interest in Amayo.(f)
    
    In June 2009, the Company increased its ownership interest in Emgasud S.A. from 31.89% to
37%. In October and December of 2009, the Company further increased its ownership to 42.73%
(see Note 3).(g)
    
    In May 2009, the Company made an initial investment in EMDERSA consisting of cash and stock
for a 19.91% ownership. In August, September and October of 2009, the Company acquired
additional ownership interests of EMDERSA totaling 57.2%, which increased its ownership
interest to 77.10%. The Company began to consolidate EMDERSA on September 24, 2009 (see Note
3).(h)
    
    In May 2008, the Companys ownership in Transredes, held through a 50% ownership in the
holding company TR Holdings Ltda. (TR Holdings), decreased from 25% to 0% and the Company
maintains a 1.28% direct ownership interest in Transredes, which is accounted for using the
cost method (see Note 3).(i)
    
    The Company comprises an integrated part of the operation referred to collectively as San
Felipe.(j)
    
    POC holds the interest in the operations referred to as Luz del Sur.(k)
    
    In July 2009, Promigas completed the spin-off of Proenergía to the shareholders of Promigas
with the same ownership structure and percentage that existed prior to the spin-off, and the
Company obtained a 52.13% ownership in Proenergía. Through Proenergía, the Company owns
27.45% of SIE (Sociedad de Inversiones en Energía), our retail fuel operations.(l)
    
    The four companies EPE, GOM, GOB and TBS comprise the integrated project Cuiabá. In
December 2009, the Company acquired the 50% interests of these companies that it previously
did not own. As a result, we currently own 100% of each of EPE, GOM, GOB and TBS (see Note
3).(m)
    
    In May 2008, the Companys indirect ownership in GTB through Transredes decreased from 12.75%
to 0%. The Companys direct and indirect ownership in GTB was 17.65% from May 2008 through
December 2009. In December 2009, the Company acquired an additional 17% of GTB and 4% of TBG.
As a result, we currently own 34.65% of GTB and 8.27% of TBG (see Note 3). 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation 
 Acquisition Accounting
  F-8




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##### Table of Contents



Discontinued Operations
 Cash and Cash Equivalents
 Restricted Cash
 Allowance for Doubtful Accounts
 Inventories
 Regulatory Assets and Liabilities Regulated Operations
 Property, Plant, and Equipment
  Machinery and equipment
    
    10-50 yearsPipelines
    
    25-50 yearsPower generation equipment
    
    18-40 yearsBuildings
    
    20-50 yearsVehicles
    
    4-12 yearsFurniture and fixtures
    
    5-10 yearsOther
    
    3-20 years
  Long-Lived Asset Impairment
  F-9




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##### Table of Contents



Investments in Unconsolidated Affiliates
 Marketable Securities
 Goodwill
 Intangible Assets
 Asset Retirement Obligations
 Deferred Financing Costs
 Revenue Recognition
  F-10




---



##### Table of Contents



Deferred Revenue
  Earnings Per Share
 Income Taxes
 Derivatives
  Pension Benefits
  F-11




---



##### Table of Contents



Stock-Based Compensation
 Environmental Matters
 Foreign Currency
   Revision to Cash Flows
 Use of Estimates
  F-12




---



##### Table of Contents



Accounting Standards Adopted in 2009
 Generally Accepted
Accounting Principles
 Fair Value Measurements and Disclosures
 Business Combinations
 Consolidations
 InvestmentsEquity Method and Joint
Ventures
  Derivatives and Hedging
 Compensation  Retirement Benefits ,
  F-13




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##### Table of Contents



Financial Instruments,
 Fair Value Measurements and Disclosures
 InvestmentsDebt and Equity Securities.
 Subsequent Events
 Measuring Liabilities
at Fair Value Fair Value Measurements and Disclosures
 Consolidation
 Recent Accounting Standards  to be Adopted
 Revenue Recognition  Multiple-Deliverable Revenue
Arrangements Revenue Recognition. Revenue Recognition 
Multiple-Element Arrangements
  F-14




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##### Table of Contents



Consolidation
 Improving Disclosures About Fair Value Measurements Fair Value Measurements and Disclosures
 3. ACQUISITIONS AND DISPOSALS
 Acquisitions
 2009 Acquisitions
 Nicaragua Energy Holdings 
 EMDERSA
  F-15




---



##### Table of Contents



Emgasud
 Trakya 
 TGS
 GTB, TBG and Cuiabá
 2008 Acquisitions
 SIE
  F-16




---



##### Table of Contents



SIEMillions of dollars (U.S.)Current assets
    
    $
    86Property, plant, and equipment, net
    
    
    51Goodwill
    
    
    188Intangibles
    
    
    78Other noncurrent assets
    
    
    11Assets acquired
    
    
    414Current liabilities
    
    
    87Long-term debt
    
    
    66Other long-term liabilities
    
    
    17Liabilities assumed
    
    
    170Noncontrolling interests
    
    
    114Net assets acquired
    
    $
    130
  Unaudited Pro Forma Results of Operations 
 For the Year EndedDecember 31, 2007Millions of dollars (U.S.)Revenues
    
    $
    7,475Cost of sales
    
    
    5,676Operations, maintenance, and general and administrative expenses
    
    
    1,110Operating income
    
    
    821Income before income taxes
    
    
    462Net income  noncontrolling interests
    
    
    145Income from continuing operations attributable to AEI
    
    
    90Basic earnings per share attributable to AEI
    
    $
    0.43
 BMG
 Luoyang
 Jaguar
  F-17




---



##### Table of Contents



Tipitapa
 Fenix
 DCL 
 Promigas
 2007 Acquisitions
 Generadora San Felipe and Operadora San Felipe
 DelSur
 EDEN
  F-18




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##### Table of Contents



Cálidda
 Tongda
 Corinto
 PQP
 JPPC
 Chilquinta and POC
 Dispositions
 Transredes
 BLM
 Discontinued Operations  Vengas
  F-19




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##### Table of Contents



For the Year      EndedDecember 31, 2007Millions of dollars (U.S.)Revenues
    
    $
    64Income from discontinued operations before taxes
    
    
    3Provision for income tax
    
    
    Income from discontinued operations
    
    
    3Gain on sale of discontinued operations
    
    
    41
 Unaudited Pro Forma Results of Operations
  For the Year EndedDecember 31, 2007Millions of dollars (U.S.)Revenues
    
    $
    3,452Cost of sales
    
    
    1,946Operations and maintenance expense
    
    
    974Operating income
    
    
    664Other expense
    
    
    319Income from continuing operations before income taxes
    
    
    286Income from continuing operations
    
    
    85Basic earnings per share
    
    $
    0.41
 Pending Transactions
 Luz del Sur
 Accroven
 NBT Baicheng
 4. OTHER CHARGES
 DCL
  F-20




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##### Table of Contents



SES
 Cuiabá
    5. (GAIN) LOSS ON DISPOSITION OF ASSETS
  For the Years Ended December 31,2009
    
    
    2008
    
    
    2007Millions of dollars (U.S.)Gain on exchange for additional shares of SIE (see Note 3)
    
    $
    
    
    
    $
    (68
    )
    
    $
    Gain on nationalization of Transredes (see Note 3)
    
    
    
    
    
    
    (57
    )
    
    
    Loss on sale of operating equipment
    
    
    20
    
    
    
    18
    
    
    
    10Loss on sale of available-for-sale securities (see Note 13)
    
    
    
    
    
    
    14
    
    
    
    Gain on sale of BLM (see Note 3)
    
    
    
    
    
    
    
    
    
    
    (21
    )Gain on sale of shares of Promigas
    
    
    
    
    
    
    
    
    
    
    (10
    )$
    20
    
    
    $
    (93
    )
    
    $
    (21
    )
  F-21




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##### Table of Contents



6. OTHER INCOME (EXPENSE), NET
  For the Year Ended December 31,2009
    
    
    2008
    
    
    2007Millions of dollars (U.S.)Dividend income
    
    $
    5
    
    
    $
    3
    
    
    $
    3Gain (loss) on derivatives
    
    
    
    
    
    
    (2
    )
    
    
    (13
    )Elektro  social contributions accrual reversal
    
    
    49
    
    
    
    
    
    
    
    Other
    
    
    16
    
    
    
    8
    
    
    
    (12
    )$
    70
    
    
    $
    9
    
    
    $
    (22
    )
 Elektro
  7. CASH AND CASH EQUIVALENTS
  December 31,2009
    
    
    2008Millions of dollars (U.S.)Parent Company
    
    $
    7
    
    
    $
    284Consolidated Holding and Service Companies
    
    
    97
    
    
    
    35Consolidated Operating Companies
    
    
    578
    
    
    
    417Total cash and cash equivalents
    
    $
    682
    
    
    $
    736
    F-22




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##### Table of Contents



December 31,2009
    
    
    2008Millions of dollars (U.S.)Brazilian real
    
    $
    193
    
    
    $
    111Colombian peso
    
    
    160
    
    
    
    96Chinese renminbi
    
    
    37
    
    
    
    15Chilean peso
    
    
    17
    
    
    
    14Argentine peso
    
    
    13
    
    
    
    7Other
    
    
    11
    
    
    
    17Total foreign currency cash and cash equivalents
    
    $
    431
    
    
    $
    260
  December 31,2009
    
    
    2008Millions of dollars (U.S.)Current restricted cash:Restricted due to long-term PPAs
    
    $
    51
    
    
    $
    Collateral and debt reserves for financing agreements (see Note 14)
    
    
    20
    
    
    
    63Collateral for contracts
    
    
    1
    
    
    
    5Other
    
    
    5
    
    
    
    15Total current restricted cash
    
    
    77
    
    
    
    83Noncurrent restricted cash (included in other assets, see Note 13):Amounts in escrow accounts related to taxes
    
    
    31
    
    
    
    24Collateral and debt reserves for financing agreements
    
    
    3
    
    
    
    8Restricted due to long-term PPAs
    
    
    18
    
    
    
    5Collateral for contracts
    
    
    7
    
    
    
    11Other
    
    
    5
    
    
    
    1Total noncurrent restricted cash
    
    
    64
    
    
    
    49Total restricted cash
    
    $
    141
    
    
    $
    132
   8. INVENTORIES
  December 31,2009
    
    
    2008Millions of dollars (U.S.)Materials and spare parts
    
    $
    87
    
    
    $
    141Fuel
    
    
    186
    
    
    
    98Total inventories
    
    $
    273
    
    
    $
    239
  F-23




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##### Table of Contents



9. PREPAIDS AND OTHER CURRENT ASSETS
  December 31,2009
    
    
    2008Millions of dollars (U.S.)Prepayments
    
    $
    35
    
    
    $
    29Regulatory assets
    
    
    97
    
    
    
    25Deferred income taxes
    
    
    47
    
    
    
    71Receivable from YPFB (see Note 3)
    
    
    
    
    
    
    60Taxes other than income
    
    
    36
    
    
    
    36Government subsidy  Delsur
    
    
    15
    
    
    
    20Net investments in direct financing leases (see Notes 3 and 13)
    
    
    
    
    
    
    10Current marketable securities
    
    
    23
    
    
    
    7Other
    
    
    148
    
    
    
    126Total
    
    $
    401
    
    
    $
    384
   10. PROPERTY, PLANT AND EQUIPMENT, NET
  December 31,2009
    
    
    2008Millions of dollars (U.S.)Machinery and equipment
    
    $
    2,562
    
    
    $
    1,888Pipelines
    
    
    785
    
    
    
    777Power generation equipment
    
    
    899
    
    
    
    862Land and buildings
    
    
    487
    
    
    
    378Vehicles
    
    
    46
    
    
    
    29Furniture and fixtures
    
    
    37
    
    
    
    31Other
    
    
    86
    
    
    
    106Construction-in-process
    
    
    304
    
    
    
    209Total
    
    
    5,206
    
    
    
    4,280Less accumulated depreciation and amortization
    
    
    (1,006
    )
    
    
    (756
    )Total property, plant and equipment, net
    
    $
    4,200
    
    
    $
    3,524
     F-24




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##### Table of Contents



For the Years Ended December 31,2009
    
    
    2008
    
    
    2007Millions of dollars (U.S.)Depreciation and amortization of
property, plant and equipment,
including those recorded under
capital leases
    
    $
    249
    
    
    $
    223
    
    
    $
    184Amortization of intangible assets, net
    
    
    23
    
    
    
    45
    
    
    
    33Total
    
    $
    272
    
    
    $
    268
    
    
    $
    217
  11. INVESTMENTS IN AND NOTES RECEIVABLE FROM UNCONSOLIDATED AFFILIATES
  December 31,2009
    
    
    2008Millions of dollars (U.S.)Equity method:Accroven (see Note 3)
    
    $
    41
    
    
    $
    24Amayo (see Note 3)
    
    
    9
    
    
    
    BMGs equity method investments
    
    
    1
    
    
    
    1Chilquinta
    
    
    371
    
    
    
    266EEC Holdings
    
    
    7
    
    
    
    7Emgasud (see Note 3)
    
    
    82
    
    
    
    49GTB (see Note 3)
    
    
    66
    
    
    
    15POC
    
    
    376
    
    
    
    341Promigas equity method investments
    
    
    34
    
    
    
    41Proenergías equity method investments
    
    
    17
    
    
    
    Subic
    
    
    10
    
    
    
    9Tecnored
    
    
    31
    
    
    
    21Total investments  equity method
    
    
    1,045
    
    
    
    774Total investments  cost method (see Notes 3 and 4)
    
    
    80
    
    
    
    13Total investments in unconsolidated affiliates
    
    
    1,125
    
    
    
    787Notes receivable from unconsolidated affiliates:Chilquinta
    
    
    
    
    
    
    98GTB (see Notes 3 and 19)
    
    
    23
    
    
    
    14Emgasud (see Notes 3 and 19)
    
    
    15
    
    
    
    TBG (see Notes 3 and 19)
    
    
    14
    
    
    
    8Total notes receivable from unconsolidated affiliates
    
    
    52
    
    
    
    120Total investments in and notes receivable from unconsolidated affiliates
    
    $
    1,177
    
    
    $
    907
      F-25




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##### Table of Contents



For the Years Ended December 31,2009
    
    
    2008
    
    
    2007Millions of dollars (U.S.)Accroven
    
    $
    18
    
    
    $
    16
    
    
    $
    12Chilquinta
    
    
    23
    
    
    
    32
    
    
    
    1POC
    
    
    38
    
    
    
    32
    
    
    
    1Promigas equity income from investments in unconsolidated affiliates
    
    
    14
    
    
    
    14
    
    
    
    29TR Holdings and GTB
    
    
    9
    
    
    
    8
    
    
    
    23Other
    
    
    5
    
    
    
    15
    
    
    
    10Total
    
    $
    107
    
    
    $
    117
    
    
    $
    76
     December 31,2009
    
    
    2008Millions of dollars (U.S.)Combined Balance Sheet dataCurrent assets
    
    $
    909
    
    
    $
    662Noncurrent assets
    
    
    3,126
    
    
    
    2,126Current liabilities
    
    
    552
    
    
    
    470Noncurrent liabilities
    
    
    1,569
    
    
    
    968
 For the Years Ended December 31,2009
    
    
    2008
    
    
    2007Millions of dollars (U.S.)Combined Income Statement dataRevenues
    
    $
    1,709
    
    
    $
    1,616
    
    
    $
    4,486Cost of sales
    
    
    915
    
    
    
    940
    
    
    
    3,522Net income
    
    
    229
    
    
    
    227
    
    
    
    266
 12. GOODWILL AND INTANGIBLES
  December 31,2009
    
    
    2008Millions of dollars (U.S.)Balance at January 1
    
    $
    614
    
    
    $
    402Acquisitions:New acquisitions (see Note 3)
    
    
    3
    
    
    
    225Acquired goodwill from consolidation of new acquisitions
    
    
    
    
    
    
    35Impairment of goodwill
    
    
    (5
    )
    
    
    Translation adjustments and other
    
    
    51
    
    
    
    (48
    )Balance at December 31
    
    $
    663
    
    
    $
    614
  F-26




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##### Table of Contents



December 31, 2009
    
    
    December 31, 2008Cost
    
    

Accum. Amort.
    
    
    Net
    
    
    Cost
    
    
    Accum. Amort.
    
    
    NetMillions of dollars (U.S.)Amortizable intangibles:Customer relationships
    
    $
    178
    
    
    $
    33
    
    
    $
    145
    
    
    $
    171
    
    
    $
    20
    
    
    $
    151Concession and land use rights
    
    
    233
    
    
    
    15
    
    
    
    218
    
    
    
    152
    
    
    
    8
    
    
    
    144PPAs and contracts
    
    
    63
    
    
    
    51
    
    
    
    12
    
    
    
    64
    
    
    
    43
    
    
    
    21Software costs
    
    
    58
    
    
    
    32
    
    
    
    26
    
    
    
    42
    
    
    
    21
    
    
    
    21Other
    
    
    5
    
    
    
    5
    
    
    
    
    
    
    
    4
    
    
    
    4
    
    
    
    Total amortizable intangibles
    
    $
    537
    
    
    $
    136
    
    
    
    401
    
    
    $
    433
    
    
    $
    96
    
    
    
    337Nonamortizable intangibles:Concession and land use rights
    
    
    
    
    
    
    
    
    
    
    61
    
    
    
    
    
    
    
    
    
    
    
    31Proenergía trademarks
    
    
    
    
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    
    
    
    
    25Total nonamortizable intangibles
    
    
    
    
    
    
    
    
    
    
    88
    
    
    
    
    
    
    
    
    
    
    
    56Total intangibles
    
    
    
    
    
    
    
    
    
    $
    489
    
    
    
    
    
    
    
    
    
    
    $
    393
 Goodwill
 Intangibles
   Millions of dollars (U.S.)2010
    
    $
    362011
    
    
    352012
    
    
    312013
    
    
    262014
    
    
    23Thereafter
    
    
    250Total
    
    $
    401
  F-27




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##### Table of Contents



13. OTHER ASSETS
  December 31,2009
    
    
    2008Millions of dollars (U.S.)Long-term receivables from customers:Corporation Dominicana de Empresas Electricias Estatales (CDEEE) (see Note 25)
    
    $
    200
    
    
    $
    169Promigas customers
    
    
    141
    
    
    
    128Other
    
    
    23
    
    
    
    9364
    
    
    
    306Net investments in direct financing leases
    
    
    
    
    
    
    63Regulatory assets
    
    
    34
    
    
    
    49Deferred income taxes
    
    
    223
    
    
    
    265Investments in debt securities
    
    
    239
    
    
    
    192Restricted cash (Note 7)
    
    
    64
    
    
    
    49Deferred financing costs, net
    
    
    22
    
    
    
    22Other miscellaneous investments
    
    
    54
    
    
    
    7Other deferred charges
    
    
    215
    
    
    
    160Other noncurrent assets
    
    
    100
    
    
    
    86Total
    
    $
    1,315
    
    
    $
    1,199
 Long-Term Receivables from Customers
 pesos
 Net investment in direct financing lease
  December 31, 2008Millions of dollars (U.S.)Total minimum lease payments to be received
    
    $
    440Less amounts representing executory costs
    
    
    (180
    )Total minimum lease receivables
    
    
    260Less allowance for uncollectibles
    
    
    (9
    )Less unearned income
    
    
    (178
    )Less estimated residual value of leased properties
    
    
    Net investments in direct financing leases
    
    
    73Current portion
    
    
    10Long-term portion
    
    $
    63
  F-28




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##### Table of Contents



Investments in debt securities
 For the Years Ended December 31,2009
    
    
    2008
    
    
    2007Millions of dollars (U.S.)Available-for-sale debt securities:Matured debt securities:Fair value at beginning of period
    
    $
    168
    
    
    $
    282
    
    
    $
    268Purchases of additional securities in exchange for AEI common stock
    
    
    
    
    
    
    
    
    
    
    82Purchases of additional securities for cash
    
    
    
    
    
    
    
    
    
    
    5Sale of existing securities
    
    
    
    
    
    
    (38
    )
    
    
    Conversion to equity securities
    
    
    
    
    
    
    
    
    
    
    (74
    )Realized loss on sale of securities
    
    
    
    
    
    
    (14
    )
    
    
    Unrealized net gain (loss) affecting other comprehensive income
    
    
    69
    
    
    
    (62
    )
    
    
    1Fair value at end of period
    
    
    237
    
    
    
    168
    
    
    
    282Corporate debt securities:Fair value at beginning of period
    
    
    
    
    
    
    
    
    
    
    24Unrealized net loss affecting other comprehensive income
    
    
    
    
    
    
    
    
    
    
    (24
    )Fair value at end of period
    
    
    
    
    
    
    
    
    
    
    Total available-for-sale securities, end of period
    
    
    237
    
    
    
    168
    
    
    
    282Held-to-maturity debt securities:Participation in commercial bank loan portfolio
    
    
    
    
    
    
    22
    
    
    
    22Promissory notes
    
    
    2
    
    
    
    2
    
    
    
    2Total held-to-maturity securities
    
    
    2
    
    
    
    24
    
    
    
    24Total
    
    $
    239
    
    
    $
    192
    
    
    $
    306
   14. ACCRUED AND OTHER LIABILITIES
  December 31,2009
    
    
    2008Millions of dollars (U.S.)Employee-related liabilities
    
    $
    70
    
    
    $
    48Income taxes payable
    
    
    25
    
    
    
    Deferred income taxes
    
    
    44
    
    
    
    10Other taxes
    
    
    148
    
    
    
    120Interest
    
    
    37
    
    
    
    42Customer deposits
    
    
    68
    
    
    
    64Dividends payable to noncontrolling interests
    
    
    16
    
    
    
    17Regulatory liabilities
    
    
    65
    
    
    
    35Tax and legal contingencies
    
    
    6
    
    
    
    19Cost Increase Protocol payable  Trakya
    
    
    34
    
    
    
    37Compensation account under long-term PPA (see Note 7)
    
    
    75
    
    
    
    Deferred revenues
    
    
    75
    
    
    
    32Other accrued expenses
    
    
    54
    
    
    
    47Other
    
    
    145
    
    
    
    123Total
    
    $
    862
    
    
    $
    594
 Cost Increase Protocol payable 
  F-29




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##### Table of Contents



15. LONG TERM DEBT
  Variable or
    
    Interest
    
    Final
    
    December 31,Fixed Rate
    
    Rate (%)
    
    Maturity
    
    2009
    
    
    2008Millions of dollars (U.S.), except interest ratesDebt held by Parent Company:Senior credit facility, U.S. dollar
    
    Variable
    
    3.3
    
    2014
    
    $
    893
    
    
    $
    936Revolving credit facility, U.S. dollar
    
    Variable
    
    3.2
    
    2012
    
    
    113
    
    
    
    390Synthetic revolving credit facility, U.S. dollar
    
    Variable
    
    3.2
    
    2012
    
    
    105
    
    
    
    105PIK note, U.S. dollar
    
    Fixed
    
    10.0
    
    2018
    
    
    179
    
    
    
    352Debt held by consolidated subsidiaries:Cálidda, U.S. dollar
    
    Variable
    
    4.2
    
    2015
    
    
    27
    
    
    
    87Cuiabá, U.S. dollar notes
    
    Fixed
    
    5.9
    
    2015  2016
    
    
    
    
    
    
    97DCL, Pakistan rupee
    
    Variable
    
    10.6  15.8
    
    2010  2019
    
    
    78
    
    
    
    77Delsur, U.S. dollar
    
    Variable
    
    6.5
    
    2015
    
    
    65
    
    
    
    73EDEN, U.S. dollar
    
    Variable
    
    3.3
    
    2013
    
    
    4
    
    
    
    37Elektra, U.S. dollar senior notes
    
    Fixed
    
    7.6
    
    2021
    
    
    99
    
    
    
    99Elektra, U.S. dollar debentures
    
    Variable
    
    2.8
    
    2018
    
    
    20
    
    
    
    20Elektra, U.S. dollar revolving credit facility
    
    Variable
    
    4.3  5.5
    
    2010
    
    
    
    
    
    
    25Elektro, Brazilian realdebentures
    
    Variable
    
    9.9  10.3
    
    2011
    
    
    379
    
    
    
    238Elektro, Brazilian realnote
    
    Variable
    
    4.3  14.7
    
    2010  2021
    
    
    237
    
    
    
    132EMDERSA, U.S. dollar debentures
    
    Fixed
    
    10.8
    
    2010
    
    
    46
    
    
    
    EMDERSA, Argentine pesonotes
    
    Fixed
    
    13.7  25.8
    
    2010
    
    
    16
    
    
    
    ENS, Polish zlotyloans
    
    Variable
    
    5.3
    
    2010  2018
    
    
    62
    
    
    
    67Luoyang, Chinese renminbi
    
    Variable
    
    5.9  9.9
    
    2010  2016
    
    
    119
    
    
    
    133PQP, U.S. dollar notes
    
    Variable
    
    2.2  3.2
    
    2012  2015
    
    
    71
    
    
    
    88Proenergía, Colombian pesonotes
    
    Variable
    
    4.0  9.8
    
    2010  2016
    
    
    543
    
    
    
    Proenergía, Chilean pesonotes
    
    Variable
    
    0.7
    
    2019
    
    
    19
    
    
    
    Proenergía, U.S. dollar notes
    
    Variable
    
    2.9  6.0
    
    2010  2012
    
    
    18
    
    
    
    Promigas, Colombian pesodebentures
    
    Variable
    
    7.1  13.7
    
    2011  2019
    
    
    397
    
    
    
    116Promigas, Colombian pesonotes
    
    Variable
    
    8.3  9.6
    
    2010  2024
    
    
    72
    
    
    
    534Promigas, U.S. dollar notes
    
    Variable
    
    3.0  3.9
    
    2010  2012
    
    
    24
    
    
    
    291Trakya, U.S. dollar notes
    
    Variable
    
    4.4
    
    2014
    
    
    80
    
    
    
    Others, U.S. dollar notes and Chinese renminbi
    
    Fixed and Variable
    
    5.3  8.5
    
    2010  2016
    
    
    52
    
    
    
    653,718
    
    
    
    3,962Less current maturities
    
    
    
    
    
    
    
    
    (613
    )
    
    
    (547
    )Total
    
    
    
    
    
    
    
    $
    3,105
    
    
    $
    3,415
    Millions of dollars (U.S.)2010
    
    $
    6132011
    
    
    5972012
    
    
    4502013
    
    
    2362014
    
    
    957Thereafter
    
    
    865Total
    
    $
    3,718
  F-30




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##### Table of Contents



Senior Credit Facility
  PIK Notes
   F-31




---



##### Table of Contents



Cálidda
  DCL  rupees rupees
 rupees
  Delsur
 EDEN
  F-32




---



##### Table of Contents



Elektra
   Elektro  reais reais
 reais reais
 reais
  F-33




---



##### Table of Contents



December 31, 2009CDI
    
    
    8.6
    %IGP-M
    
    
    (0.3
    )%RGR
    
    
    0.0
    %TJLP
    
    
    6.0
    %
 EMDERSA
 ENS  zloty zloty zloty zloty zloty
 Luoyang renminbi renminbi
 renminbi
 PQP
 Proenergía pesos
  F-34




---



##### Table of Contents



peso
 Promigas peso peso
 peso pesos
 peso
  pesos
 Trakya
 16. INCOME TAXES
   Income Tax Provision
 For the Years Ended December 31,2009
    
    
    2008
    
    
    2007Millions of dollars (U.S.)Current:Cayman Islands
    
    $
    
    
    
    $
    
    
    
    $
    Foreign
    
    
    210
    
    
    
    205
    
    
    
    106Total current
    
    
    210
    
    
    
    205
    
    
    
    106Deferred:Cayman Islands
    
    
    
    
    
    
    
    
    
    
    Foreign
    
    
    69
    
    
    
    (11
    )
    
    
    87Total deferred
    
    
    69
    
    
    
    (11
    )
    
    
    87Provision for income taxes
    
    $
    279
    
    
    $
    194
    
    
    $
    193
  F-35




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##### Table of Contents



Effective Tax Rate Reconciliation
 December 31,2009
    
    
    2008
    
    
    2007Statutory tax rate  Cayman Islands
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Foreign tax rate differential
    
    
    39.0
    %
    
    
    36.4
    %
    
    
    42.0
    %Change in valuation allowance
    
    
    10.2
    %
    
    
    4.4
    %
    
    
    14.0
    %Effective tax rate
    
    
    49.2
    %
    
    
    40.8
    %
    
    
    56.0
    %
    For the Years Ended December 31,2009
    
    
    2008
    
    
    2007Millions of dollars (U.S.)Unrecognized tax benefit, January 1
    
    $
    61
    
    
    $
    50
    
    
    $
    51Gross increases, tax positions in prior period
    
    
    1
    
    
    
    4
    
    
    
    5Gross decreases, tax positions in prior period
    
    
    (2
    )
    
    
    
    
    
    
    (12
    )Gross increases, tax positions in current period
    
    
    24
    
    
    
    12
    
    
    
    16Settlements
    
    
    (8
    )
    
    
    
    
    
    
    (1
    )Lapse of statute of limitations
    
    
    (6
    )
    
    
    (5
    )
    
    
    (9
    )Unrecognized tax benefit, December 31
    
    $
    70
    
    
    $
    61
    
    
    $
    50
      F-36




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##### Table of Contents



Jurisdiction
    
    YearsArgentina
    
    2005-presentBolivia
    
    2006-presentBrazil
    
    2005-presentColombia
    
    2007-presentDominican Republic
    
    1998-June 2001 and 2005-presentPanama
    
    2007-presentPhilippines
    
    2006-presentPoland
    
    2005-presentTurkey
    
    2005-present
   December 31,2009
    
    
    2008Millions of dollars (U.S.)Deferred tax assets:Inventory
    
    $
    1
    
    
    $
    7Goodwill
    
    
    3
    
    
    
    23Accrued expenses
    
    
    72
    
    
    
    133Operating losses and tax credit carryforwards
    
    
    248
    
    
    
    216Reserves
    
    
    165
    
    
    
    101Foreign currency and other
    
    
    
    
    
    
    5Valuation allowance
    
    
    (251
    )
    
    
    (193
    )Total deferred tax assets
    
    
    238
    
    
    
    292Deferred tax liabilities:Fixed assets
    
    $
    (122
    )
    
    $
    (158
    )Foreign currency, lease obligation and other
    
    
    (58
    )
    
    
    (7
    )Total deferred tax liabilities
    
    
    (180
    )
    
    
    (165
    )Total deferred tax assets (liabilities)
    
    $
    58
    
    
    $
    127
  CarryforwardNOL
    
    
    Tax CreditMillions of dollars (U.S.)2010
    
    $
    8
    
    
    $
    2011
    
    
    11
    
    
    
    2012
    
    
    24
    
    
    
    22013
    
    
    16
    
    
    
    2014
    
    
    5
    
    
    
    1Thereafter
    
    
    5
    
    
    
    6Total
    
    $
    69
    
    
    $
    9
   F-37




---



##### Table of Contents



17. OTHER LIABILITIES
  December 31,2009
    
    
    2008Millions of dollars (U.S.)Deferred revenue
    
    $
    523
    
    
    $
    437Special obligations
    
    
    261
    
    
    
    192Uncertain tax positions (see Note 16)
    
    
    177
    
    
    
    156Notes payable to unconsolidated affiliates
    
    
    8
    
    
    
    109Tax and legal contingencies (see Note 25)
    
    
    39
    
    
    
    68Unfavorable PPAs (see Note 12)
    
    
    52
    
    
    
    57Taxes payable  San Felipe (see Note 25)
    
    
    72
    
    
    
    66Capital lease obligations
    
    
    44
    
    
    
    48Cost Increase Protocol payable  Trakya (see Note 14)
    
    
    
    
    
    
    25Interest
    
    
    
    
    
    
    22Pension and other postretirement benefits (see Note 24)
    
    
    14
    
    
    
    14Regulatory liabilities
    
    
    84
    
    
    
    25Other
    
    
    119
    
    
    
    112Total
    
    $
    1,393
    
    
    $
    1,331
 Special obligations 
 Capital lease obligations 
  Millions of dollars(U.S.)2010
    
    $
    122011
    
    
    92012
    
    
    92013
    
    
    142014
    
    
    15Thereafter
    
    
    12Future minimum lease payments
    
    
    71Less amount representing interest
    
    
    20Total
    
    $
    51
 18. LEASE ARRANGEMENTS
   Millions of dollars(U.S.)2010
    
    $
    1702011
    
    
    1582012
    
    
    1642013
    
    
    1632014
    
    
    157Thereafter
    
    
    522Total
    
    $
    1,334
  F-38




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##### Table of Contents



Millions of dollars(U.S.)2010
    
    $
    82011
    
    
    52012
    
    
    42013
    
    
    42014
    
    
    1Thereafter
    
    
    2Total
    
    $
    24
 19. FAIR VALUE OF FINANCIAL INSTRUMENTS
  Level 1
 Level 2
 Level 3
  Fair Value Measurement at Reporting Date UsingFinal Quoted Pricesin Active Markets
    
    
    Significant Other
    
    
    SignificantDecember 31,
    
    
    for Identical
    
    
    Observable Inputs
    
    
    Unobservable InputsAssets

    
    2009
    
    
    Assets (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Millions of dollars (U.S.)Available-for-sale securities
    
    $
    237
    
    
    $
    
    
    
    $
    237
    
    
    $
    Derivatives
    
    
    12
    
    
    
    
    
    
    
    12
    
    
    
    Total assets
    
    $
    249
    
    
    $
    
    
    
    $
    249
    
    
    $
    Derivatives
    
    $
    42
    
    
    $
    
    
    
    $
    42
    
    
    $
    Total liabilities
    
    $
    42
    
    
    $
    
    
    
    $
    42
    
    
    $
    
 Available-for-Sale Securities
   F-39




---



##### Table of Contents



Derivatives
 Objectives for Using Derivatives
 Accounting for Derivatives Impact on Financial Statements
 Interest Rate Swaps
  F-40




---



##### Table of Contents



Foreign currency contracts
  Commodity derivatives
  Derivative Assets
    
    
    Derivative LiabilitiesAs of December 31, 2009
    

Balance Sheet Classification
    
    Fair Value
    
    
    Balance Sheet Classification
    
    Fair ValueDerivatives designated as
hedging instrumentsInterest rate swaps
    
    Prepaids and other current assets
    
    $
    
    
    
    Accrued and other current liabilities
    
    $
    7Foreign currency contracts
    
    Prepaids and other current assets
    
    
    
    
    
    Accrued and other current liabilities
    
    
    1Commodity contracts
    
    Prepaids and other current assets
    
    
    1
    
    
    Accrued and other current liabilities
    
    
    Interest rate swaps
    
    Other assets
    
    
    11
    
    
    Other liabilities
    
    
    34Total Derivatives
designated as hedging
instruments
    
    
    
    $
    12
    
    
    
    
    $
    42
 Derivative Assets
    
    
    Derivative LiabilitiesAs of December 31, 2008
    

Balance Sheet Classification
    
    Fair Value
    
    
    Balance Sheet Classification
    
    Fair ValueDerivatives designated as
hedging instrumentsInterest rate swaps
    
    Prepaids and other current assets
    
    $
    
    
    
    Accrued and other current liabilities
    
    $
    1Foreign currency contracts
    
    Prepaids and other current assets
    
    
    1
    
    
    Accrued and other current liabilities
    
    
    Interest rate swaps
    
    Other assets
    
    
    
    
    
    Other liabilities
    
    
    63Total Derivatives
designated as hedging
instruments
    
    
    
    $
    1
    
    
    
    
    $
    64
  F-41




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##### Table of Contents



Gain (Loss)
    
    
    Gain (Loss) Reclassified from
    
    
    Gain (Loss) Recognized inRecognized
    
    
    AOCI into Interest Expense
    
    
    Other Income (Expense)in OCI
    
    
    (Effective Portion)
    
    
    (Ineffective Portion)Interest Rate Swaps:For the Years Ended
December 31,2009
    
    $
    2
    
    
    $
    (30
    )
    
    $
    2008
    
    
    (54
    )
    
    
    (9
    )
    
    
    (2
    )2007
    
    
    (23
    )
    
    
    4
    
    
    
    1Commodity Contracts:For the Years Ended
December 31,2009
    
    $
    
    
    
    $
    (1
    )
    
    $
    
  Gain (Loss) Reclassified fromGain (Loss)
    
    
    AOCI into Foreign Currency
    
    
    Gain (Loss) Recognized inRecognized
    
    
    Transaction Gain (Loss)
    
    
    Other Income (Expense)in OCI
    
    
    (Effective Portion)
    
    
    (Ineffective Portion)Foreign Currency
Contracts:For the Years Ended
December 31,2009
    
    $
    (20
    )
    
    $
    
    
    
    $
    2008
    
    
    (5
    )
    
    
    
    
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    
  Gain (Loss) Recognized inForeign CurrencyTransaction Gain(Loss)Foreign Currency Contracts:For the Years Ended December 31,2009
    
    $
    (10
    )2008
    
    
    62007
    
    
    (14
    )
 Financial Instruments
    F-42




---



##### Table of Contents



December 31,2009
    
    
    2008Carrying Value

    
    
    Fair Value
    
    
    Carrying Value
    
    
    Fair ValueMillions of dollars (U.S.)Assets:Notes receivable from unconsolidated subsidiaries
    
    $
    52
    
    
    $
    47
    
    
    $
    120
    
    
    $
    123Investment in debt securities, including available-for-sale securities
    
    
    239
    
    
    
    239
    
    
    
    192
    
    
    
    192Derivatives
    
    
    12
    
    
    
    12
    
    
    
    1
    
    
    
    1Liabilities:Derivatives
    
    
    42
    
    
    
    42
    
    
    
    64
    
    
    
    64Long-term debt, including current maturities
    
    
    3,718
    
    
    
    3,659
    
    
    
    3,962
    
    
    
    3,753
 Customer Concentration
  20. PER SHARE DATA
  For the Years Ended December 31,2009
    
    
    2008
    
    
    2007Basic earnings per share attributable to AEI:Income from continuing operations attributable to AEI (millions of U.S. dollars)
    
    $
    297
    
    
    $
    158
    
    
    $
    87Average number of common shares outstanding (millions)
    
    
    234
    
    
    
    218
    
    
    
    209Income from continuing operations per share attributable to AEI
    
    $
    1.27
    
    
    $
    0.73
    
    
    $
    0.42Effect of dilutive securities:Stock options (millions of options)
    
    
    
    
    
    
    
    
    
    
    Restricted stock (millions of shares)
    
    
    
    
    
    
    
    
    
    
    1Convertible PIK notes (millions of shares)
    
    
    
    
    
    
    
    
    
    
    Dilutive earnings (loss) per share attributable to AEI
    
    $
    1.27
    
    
    $
    0.73
    
    
    $
    0.42
    F-43




---



##### Table of Contents



21. EQUITY
  December 31,2009
    
    
    2008Millions of dollars (U.S.)Cumulative foreign currency translation
    
    $
    265
    
    
    $
    (131
    )Unrealized derivative losses
    
    
    (36
    )
    
    
    (68
    )Unamortized actuarial and investment gains
    
    
    50
    
    
    
    54Unrealized gain (loss) on available-for-sale securities
    
    
    10
    
    
    
    (59
    )Total
    
    $
    289
    
    
    $
    (204
    )
 real
  For The Years Ended December 31,2009
    
    
    2008
    
    
    2007Millions of dollars (U.S.)Net income attributable to AEI
    
    $
    297
    
    
    $
    158
    
    
    $
    131Transfers to (from) the noncontrolling interestIncrease (decrease) in AEIs paid-in capital for:Purchase 50% of Cuiaba
    
    
    6
    
    
    
    
    
    
    
    Purchase 31% of Trakya
    
    
    (102
    )
    
    
    
    
    
    
    Amayo transaction
    
    
    (4
    )
    
    
    
    
    
    
    Net transfers to the noncontrolling interests
    
    
    (100
    )
    
    
    
    
    
    
    Change from net income attributable to AEI and transfers to the noncontrolling interest
    
    $
    197
    
    
    $
    158
    
    
    $
    131
 22. RELATED-PARTY TRANSACTIONS
   Interest expense to shareholders 
 Interest income from unconsolidated subsidiaries
 23. COMPENSATION PLANS
 Annual Incentive Plans
  F-44




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##### Table of Contents



2007 Equity Incentive Plan
   2009
    
    
    2008
    
    
    2007Weighted Average Fair Value of Grants
    
    $
    3.77
    
    
    $
    5.39
    
    
    $
    4.61Expected Volatility
    
    
    29.22
    %
    
    
    25.37
    %
    
    
    25.00
    %Risk-Free Interest Rate
    
    
    1.55
    %
    
    
    3.20
    %
    
    
    4.00
    %Dividend Yield
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %Expected Life
    
    5.08 Years
    
    6.58 Years
    
    7 Years
    Weighted-
    
    
    AggregateAverage
    
    
    IntrinsicRestricted Stock
    
    Shares
    
    
    Grant Price
    
    
    Value(Millions of(Thousands)
    
    
    
    
    
    dollars (U.S.))Granted during 2007
    
    
    500
    
    
    $
    12.63
    
    
    $
    6Vested during 2007
    
    
    
    
    
    
    
    
    
    
    Granted during 2008
    
    
    238
    
    
    $
    16.03
    
    
    $
    4Vested
during 2008
    
    
    44
    
    
    $
    12.75
    
    
    
    Nonvested, January 1, 2009
    
    
    636
    
    
    $
    13.83
    
    
    $
    9Granted
    
    
    262
    
    
    
    13.10
    
    
    
    3Forfeited
    
    
    (43
    )
    
    
    13.79
    
    
    
    (1
    )Exercised
    
    
    (17
    )
    
    
    13.02
    
    
    
    Vested
    
    
    (74
    )
    
    
    13.30
    
    
    
    (1
    )Nonvested, December 31, 2009
    
    
    764
    
    
    $
    13.62
    
    
    $
    10
    F-45




---



##### Table of Contents



WeightedWeighted
    
    
    AverageAverage
    
    
    Exercise
    
    
    AggregateFair Value
    
    
    Price of
    
    
    IntrinsicStock Options
    
    Options
    
    
    of Grants
    
    
    Grants
    
    
    Value(Millions of(Thousands)
    
    
    
    
    
    
    
    
    dollars (U.S.))Exercised during 2007
    
    
    31
    
    
    $
    4.11
    
    
    $
    11.18
    
    
    $
    Exercised during 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding, January 1, 2009
    
    
    2,729
    
    
    $
    4.97
    
    
    $
    14.09
    
    
    $
    14Granted
    
    
    1,690
    
    
    
    3.77
    
    
    
    13.10
    
    
    
    6Forfeited
    
    
    (238
    )
    
    
    4.57
    
    
    
    13.83
    
    
    
    (1
    )Expired
    
    
    (31
    )
    
    
    4.54
    
    
    
    12.70
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding, December 31, 2009
    
    
    4,150
    
    
    $
    4.51
    
    
    $
    13.71
    
    
    $
    19Exercisable as of December 31, 2009
    
    
    505
    
    
    $
    4.81
    
    
    $
    13.36
    
    
    $
    2
   2004 Stock Incentive Plans
    Weighted-Average
    
    
    AggregateGrant
    
    
    IntrinsicUnits/Shares
    
    
    Price
    
    
    Value(Millions of(Thousands)
    
    
    
    
    
    dollars (U.S.))Total time-based restricted shares vested during 2007
    
    
    586
    
    
    $
    7.99
    
    
    $
    5Total performance-based restricted shares vested during 2007
    
    
    2,179
    
    
    $
    7.99
    
    
    $
    17
 Sales Incentive Plan
  F-46




---



##### Table of Contents



Weighted-Average
    
    
    AggregateGrant
    
    
    IntrinsicUnits/Shares
    
    
    Price
    
    
    Value(Millions of(Thousands)
    
    
    
    
    
    dollars (U.S.))Total restricted shares vested during 2007
    
    
    312
    
    
    $
    7.99
    
    
    $
    2Total restricted shares vested during 2008
    
    
    201
    
    
    $
    7.99
    
    
    $
    2
 24. PENSION AND OTHER POSTRETIREMENT BENEFITS
   Elektro Plans
  Investment Policies and Strategies
  F-47




---



##### Table of Contents



December 31,2009
    
    
    2008Fixed income
    
    
    76.1
    %
    
    
    70.6
    %Equity
    
    
    14.5
    %
    
    
    21.9
    %Real estate
    
    
    4.7
    %
    
    
    4.0
    %Loans to participants
    
    
    4.7
    %
    
    
    3.5
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
  December 31,2009
    
    
    2008Fixed income
    
    
    73.0
    %
    
    
    75.7
    %Equity
    
    
    18.6
    %
    
    
    17.3
    %Real estate
    
    
    5.2
    %
    
    
    3.6
    %Loans to participants
    
    
    3.2
    %
    
    
    3.4
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
  Fair Value Measurement at Reporting Date UsingFinal QuotedPrices in Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantDecember 31,
    
    
    Identical Assets
    
    
    Observable
    
    
    UnobservablePlan assets
    
    2009
    
    
    (Level 1)
    
    
    Inputs (Level 2)
    
    
    Inputs (Level 3)Millions of dollars (U.S.)Fixed income
    
    $
    327
    
    
    $
    327
    
    
    $
    
    
    
    $
    Equity
    
    
    74
    
    
    
    74
    
    
    
    
    
    
    
    Real estate
    
    
    21
    
    
    
    
    
    
    
    21
    
    
    
    Loans to participants
    
    
    11
    
    
    
    
    
    
    
    11
    
    
    
    Total
    
    $
    433
    
    
    $
    401
    
    
    $
    32
    
    
    $
    December 31,2009
    
    
    2008Millions of dollars (U.S.)Projected benefit obligation
    
    $
    332
    
    
    $
    224Accumulated benefit obligation
    
    
    313
    
    
    
    213Fair value of plan assets
    
    
    433
    
    
    
    292Prepaid pension asset
    
    
    101
    
    
    
    68
  F-48




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##### Table of Contents



December 31,2009
    
    
    2008Millions in dollars (U.S.)Change in projected benefit obligation:Benefit obligation, beginning of period
    
    $
    224
    
    
    $
    307Service cost
    
    
    5
    
    
    
    4Interest cost
    
    
    35
    
    
    
    32Actuarial gains (losses)
    
    
    (26
    )
    
    
    32Benefits paid
    
    
    (16
    )
    
    
    (15
    )Effect of foreign exchange rate change
    
    
    74
    
    
    
    (69
    )Change in assumptions
    
    
    36
    
    
    
    (67
    )Benefit obligation  end of period
    
    $
    332
    
    
    $
    224Change in plan assets:Fair value of plan assets, beginning of period
    
    $
    292
    
    
    $
    325Actual return on plan assets
    
    
    55
    
    
    
    72Contributions by employer
    
    
    1
    
    
    
    1Contributions by plan participants
    
    
    1
    
    
    
    1Benefits paid
    
    
    (16
    )
    
    
    (15
    )Effect of foreign exchange rate change
    
    
    100
    
    
    
    (92
    )Fair value of plan assets  end of period
    
    $
    433
    
    
    $
    292Funded status at end of year
    
    $
    101
    
    
    $
    68Amounts recognized on the balance sheet  prepaid pension asset
    
    $
    101
    
    
    $
    68Net amount recognized at end of year
    
    $
    101
    
    
    $
    68
  For the Years Ended December 31,2009
    
    
    2008
    
    
    2007Millions of dollars (U.S.)Service cost
    
    $
    5
    
    
    $
    4
    
    
    $
    3Interest cost
    
    
    35
    
    
    
    32
    
    
    
    31Recognized net actuarial gains
    
    
    (4
    )
    
    
    
    
    
    
    Expected employee contribution
    
    
    (1
    )
    
    
    (2
    )
    
    
    (2
    )Expected return on plan assets for the period
    
    
    (51
    )
    
    
    (38
    )
    
    
    (33
    )Total net periodic pension benefit
    
    $
    (16
    )
    
    $
    (4
    )
    
    $
    (1
    )
  2009
    
    
    2008
    
    
    2007Periodic
    
    
    
    
    
    
    Periodic
    
    
    
    
    
    
    PeriodicBenefit
    
    
    Pension
    
    
    Benefit
    
    
    Pension
    
    
    Benefit
    
    
    PensionObligation
    
    
    Cost
    
    
    Obligation
    
    
    Cost
    
    
    Obligation
    
    
    CostWeighted-average of discount rates
    
    
    11.40
    %
    
    
    12.37
    %
    
    
    12.37
    %
    
    
    12.37
    %
    
    
    10.24
    %
    
    
    10.24
    %Weighted-average rates of compensation increase
    
    
    7.63
    %
    
    
    7.63
    %
    
    
    7.63
    %
    
    
    7.63
    %
    
    
    7.12
    %
    
    
    7.12
    %Weighted-average expected long-term rate of
return on plan assets
    
    
    
    
    
    
    13.29
    %
    
    
    
    
    
    
    13.29
    %
    
    
    
    
    
    
    11.28
    %
   F-49




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##### Table of Contents



Millions ofdollars (U.S.)Expected employer contribution in 2010
    
    $
    2Expected benefit payments:2010
    
    
    162011
    
    
    182012
    
    
    202013
    
    
    222014
    
    
    242015  2018
    
    
    168
 25. COMMITMENTS AND CONTINGENCIES
  2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    TotalMillions of dollars (U.S.)Power commitments(a)
    
    $
    1,166
    
    
    $
    1,234
    
    
    $
    1,272
    
    
    $
    1,197
    
    
    $
    1,058
    
    
    $
    13,505
    
    
    $
    19,432Fuel commitments(b)
    
    
    1,722
    
    
    
    463
    
    
    
    481
    
    
    
    292
    
    
    
    298
    
    
    
    1,656
    
    
    
    4,912Equipment commitments(c)
    
    
    9
    
    
    
    3
    
    
    
    2
    
    
    
    12
    
    
    
    17
    
    
    
    103
    
    
    
    146Transportation commitments(d)
    
    
    79
    
    
    
    81
    
    
    
    84
    
    
    
    86
    
    
    
    89
    
    
    
    735
    
    
    
    1,154Other commitments
    
    
    9
    
    
    
    4
    
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    16Total
    
    $
    2,985
    
    
    $
    1,785
    
    
    $
    1,840
    
    
    $
    1,588
    
    
    $
    1,462
    
    
    $
    16,000
    
    
    $
    25,660
 
 (a)
    
    Represents take-or-pay and other commitments to purchase power of various quantities from
third parties. Power purchases under long-term commitments for the year ended December 31,
2009, 2008 and 2007 totaled $1.07 billion, $716 million and
$917 million, respectively.(b)
    
    Represents take-or-pay and other commitments to purchase fuel of various quantities from
third parties. Fuel purchases under long-term commitments for the year ended December 31,
2009, 2008 and 2007 totaled $539 million, $541 million and $425 million, respectively.(c)
    
    Represents commitments of various duration for parts and maintenance services provided by
third parties, which are expensed during the year of service.(d)
    
    Represents a commitment to purchase gas transportation services from an unconsolidated
affiliate and third parties. Letters of Credit
   F-50




---



##### Table of Contents



Political Matters:
 Turkey
 Poland zloty
 Venezuela Accroven
 Litigation/Arbitration:
    F-51




---



##### Table of Contents



Elektro
        F-52




---



##### Table of Contents



EPE
 San Felipe Limited Partnership
 DCL
    F-53




---



##### Table of Contents



26. SEGMENT AND GEOGRAPHIC INFORMATION
  Power Distribution 
 Power Generation 
 Natural Gas Transportation and Services 
 Natural Gas Distribution 
 Retail Fuel 
 Headquarters and Other 
  F-54




---



##### Table of Contents



Eliminations 
 As of and for the Year
    
    Power
    
    
    Power
    
    
    Nat. Gas.
    
    
    Nat. Gas.
    
    
    Retail
    
    
    Headquarters andEnded December 31, 2009
    
    Dist.
    
    
    Gen.
    
    
    Trans.
    
    
    Dist.
    
    
    Fuel
    
    
    Other
    
    
    Eliminations
    
    
    TotalMillions of dollars (U.S.)Revenues
    
    $
    2,151
    
    
    $
    1,027
    
    
    $
    197
    
    
    $
    654
    
    
    $
    4,245
    
    
    $
    27
    
    
    $
    (116
    )
    
    $
    8,185Equity income from
unconsolidated affiliates
    
    
    64
    
    
    
    3
    
    
    
    30
    
    
    
    14
    
    
    
    2
    
    
    
    (2
    )
    
    
    (4
    )
    
    
    107Operating income
    
    
    413
    
    
    
    99
    
    
    
    32
    
    
    
    128
    
    
    
    140
    
    
    
    (77
    )
    
    
    (4
    )
    
    
    731Interest income
    
    
    46
    
    
    
    15
    
    
    
    5
    
    
    
    2
    
    
    
    6
    
    
    
    1
    
    
    
    (1
    )
    
    
    74Interest expense
    
    
    93
    
    
    
    57
    
    
    
    41
    
    
    
    17
    
    
    
    52
    
    
    
    105
    
    
    
    (38
    )
    
    
    327Depreciation and amortization
    
    
    134
    
    
    
    42
    
    
    
    21
    
    
    
    23
    
    
    
    46
    
    
    
    6
    
    
    
    
    
    
    
    272Capital expenditures
    
    
    189
    
    
    
    19
    
    
    
    31
    
    
    
    103
    
    
    
    87
    
    
    
    12
    
    
    
    
    
    
    
    441Equity method investments in
unconsolidated affiliates
    
    
    778
    
    
    
    108
    
    
    
    118
    
    
    
    24
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    1,045Goodwill
    
    
    55
    
    
    
    45
    
    
    
    26
    
    
    
    160
    
    
    
    362
    
    
    
    15
    
    
    
    
    
    
    
    663Long lived assets
    
    
    3,307
    
    
    
    1,272
    
    
    
    725
    
    
    
    1,008
    
    
    
    992
    
    
    
    3,082
    
    
    
    (2,776
    )
    
    
    7,610Total assets
    
    
    4,447
    
    
    
    2,269
    
    
    
    1,018
    
    
    
    1,410
    
    
    
    1,535
    
    
    
    2,948
    
    
    
    (3,402
    )
    
    
    10,225
 As of and for the Year Ended
    
    Power
    
    
    Power
    
    
    Nat. Gas.
    
    
    Nat. Gas.
    
    
    Retail
    
    
    Headquarters andDecember 31, 2008
    
    Dist.
    
    
    Gen.
    
    
    Trans.
    
    
    Dist.
    
    
    Fuel
    
    
    Other
    
    
    Eliminations
    
    
    TotalMillions of dollars (U.S.)Revenues
    
    $
    2,217
    
    
    $
    1,175
    
    
    $
    202
    
    
    $
    584
    
    
    $
    5,137
    
    
    $
    22
    
    
    $
    (126
    )
    
    $
    9,211Equity income from
unconsolidated affiliates
    
    
    68
    
    
    
    12
    
    
    
    27
    
    
    
    11
    
    
    
    1
    
    
    
    
    
    
    
    (2
    )
    
    
    117Operating income
    
    
    427
    
    
    
    15
    
    
    
    128
    
    
    
    104
    
    
    
    218
    
    
    
    (36
    )
    
    
    (43
    )
    
    
    813Interest income
    
    
    54
    
    
    
    14
    
    
    
    6
    
    
    
    2
    
    
    
    9
    
    
    
    3
    
    
    
    
    
    
    
    88Interest expense
    
    
    134
    
    
    
    45
    
    
    
    44
    
    
    
    19
    
    
    
    53
    
    
    
    136
    
    
    
    (53
    )
    
    
    378Depreciation and amortization
    
    
    138
    
    
    
    24
    
    
    
    21
    
    
    
    18
    
    
    
    61
    
    
    
    6
    
    
    
    
    
    
    
    268Capital expenditures
    
    
    183
    
    
    
    16
    
    
    
    12
    
    
    
    61
    
    
    
    86
    
    
    
    14
    
    
    
    
    
    
    
    372Equity method investments in
unconsolidated affiliates
    
    
    628
    
    
    
    65
    
    
    
    35
    
    
    
    23
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    759Goodwill
    
    
    53
    
    
    
    54
    
    
    
    26
    
    
    
    144
    
    
    
    323
    
    
    
    14
    
    
    
    
    
    
    
    614Long lived assets
    
    
    2,598
    
    
    
    1,300
    
    
    
    701
    
    
    
    832
    
    
    
    841
    
    
    
    2,491
    
    
    
    (2,392
    )
    
    
    6,371Total assets
    
    
    3,304
    
    
    
    1,897
    
    
    
    924
    
    
    
    1,110
    
    
    
    1,323
    
    
    
    3,865
    
    
    
    (3,470
    )
    
    
    8,953
 As of and for the Year Ended
    
    Power
    
    
    Power
    
    
    Nat. Gas.
    
    
    Nat. Gas.
    
    
    Retail
    
    
    Headquarters andDecember 31, 2007
    
    Dist.
    
    
    Gen.
    
    
    Trans.
    
    
    Dist.
    
    
    Fuel
    
    
    Other
    
    
    Eliminations
    
    
    TotalMillions of dollars (U.S.)Revenues
    
    $
    1,746
    
    
    $
    874
    
    
    $
    199
    
    
    $
    352
    
    
    $
    160
    
    
    $
    19
    
    
    $
    (134
    )
    
    $
    3,216Equity income from
unconsolidated affiliates
    
    
    2
    
    
    
    11
    
    
    
    39
    
    
    
    13
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    76Operating income
    
    
    373
    
    
    
    77
    
    
    
    128
    
    
    
    85
    
    
    
    49
    
    
    
    286
    
    
    
    (421
    )
    
    
    577Interest income
    
    
    58
    
    
    
    27
    
    
    
    7
    
    
    
    2
    
    
    
    2
    
    
    
    14
    
    
    
    
    
    
    
    110Interest expense
    
    
    90
    
    
    
    41
    
    
    
    42
    
    
    
    14
    
    
    
    12
    
    
    
    143
    
    
    
    (36
    )
    
    
    306Depreciation and amortization
    
    
    139
    
    
    
    42
    
    
    
    20
    
    
    
    8
    
    
    
    3
    
    
    
    5
    
    
    
    
    
    
    
    217Capital expenditures
    
    
    168
    
    
    
    3
    
    
    
    9
    
    
    
    24
    
    
    
    37
    
    
    
    8
    
    
    
    
    
    
    
    249Equity method investments in
unconsolidated affiliates
    
    
    698
    
    
    
    14
    
    
    
    106
    
    
    
    26
    
    
    
    38
    
    
    
    
    
    
    
    
    
    
    
    882Goodwill
    
    
    53
    
    
    
    33
    
    
    
    27
    
    
    
    117
    
    
    
    158
    
    
    
    14
    
    
    
    
    
    
    
    402Total assets
    
    
    3,732
    
    
    
    1,433
    
    
    
    1,138
    
    
    
    913
    
    
    
    384
    
    
    
    4,170
    
    
    
    (3,917
    )
    
    
    7,853
  F-55




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##### Table of Contents



Revenues
    
    
    Operating IncomeFor the Years Ended December 31,
    
    
    For the Years Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2009
    
    
    2008
    
    
    2007Millions of dollars (U.S.)AndeanColombia
    
    $
    3,603
    
    
    $
    3,926
    
    
    $
    563
    
    
    $
    315
    
    
    $
    371
    
    
    $
    198Chile
    
    
    907
    
    
    
    1,311
    
    
    
    
    
    
    
    71
    
    
    
    68
    
    
    
    Other countries
    
    
    248
    
    
    
    219
    
    
    
    37
    
    
    
    29
    
    
    
    28
    
    
    
    20Subtotal
    
    
    4,758
    
    
    
    5,456
    
    
    
    600
    
    
    
    415
    
    
    
    467
    
    
    
    218Southern ConeBrazil
    
    
    1,418
    
    
    
    1,503
    
    
    
    1,406
    
    
    
    168
    
    
    
    185
    
    
    
    220Argentina
    
    
    173
    
    
    
    122
    
    
    
    52
    
    
    
    29
    
    
    
    14
    
    
    
    8Other countries
    
    
    17
    
    
    
    21
    
    
    
    21
    
    
    
    (27
    )
    
    
    17
    
    
    
    32Subtotal
    
    
    1,608
    
    
    
    1,646
    
    
    
    1,479
    
    
    
    170
    
    
    
    216
    
    
    
    260Central America/CaribbeanPanama
    
    
    602
    
    
    
    808
    
    
    
    389
    
    
    
    44
    
    
    
    44
    
    
    
    57El Salvador
    
    
    214
    
    
    
    172
    
    
    
    97
    
    
    
    12
    
    
    
    12
    
    
    
    8Guatemala
    
    
    193
    
    
    
    206
    
    
    
    168
    
    
    
    36
    
    
    
    23
    
    
    
    42Other countries
    
    
    319
    
    
    
    384
    
    
    
    177
    
    
    
    72
    
    
    
    21
    
    
    
    25Subtotal
    
    
    1,328
    
    
    
    1,570
    
    
    
    831
    
    
    
    164
    
    
    
    100
    
    
    
    132Europe/Middle East/North AfricaTurkey
    
    
    357
    
    
    
    416
    
    
    
    337
    
    
    
    59
    
    
    
    24
    
    
    
    46Other countries
    
    
    103
    
    
    
    123
    
    
    
    93
    
    
    
    (1
    )
    
    
    30
    
    
    
    16Subtotal
    
    
    460
    
    
    
    539
    
    
    
    430
    
    
    
    58
    
    
    
    54
    
    
    
    62China
    
    
    151
    
    
    
    104
    
    
    
    8
    
    
    
    11
    
    
    
    (19
    )
    
    
    (6
    )Other and eliminations
    
    
    (120
    )
    
    
    (104
    )
    
    
    (132
    )
    
    
    (87
    )
    
    
    (5
    )
    
    
    (89
    )Total
    
    $
    8,185
    
    
    $
    9,211
    
    
    $
    3,216
    
    
    $
    731
    
    
    $
    813
    
    
    $
    577
 27. SUBSEQUENT EVENTS
    F-56




---



##### Table of Contents



SCHEDULE II
 VALUATION AND QUALIFYING ACCOUNTS
 Balance at
    
    
    Additions
    
    
    DeductionsBeginning of the
    
    
    Charged to Costs
    
    
    Translation
    
    
    Acquisitions of
    
    
    
    
    
    Balance at the EndMillion of Dollars (U.S.)
    
    Period
    
    
    and Expenses
    
    
    Adjustment
    
    
    Business
    
    
    Amounts Written off
    
    
    of the PeriodAllowance for lease receivables:For the year ended December 31, 2007
    
    $
    
    
    
    $
    40
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    40For the year ended December 31, 2008
    
    
    40
    
    
    
    44
    
    
    
    (3
    )
    
    
    10
    
    
    
    (82
    )(a)
    
    
    9For the year ended December 31, 2009
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9
    )(a)
    
    
    Allowance for accounts receivable:For the year ended December 31, 2007
    
    $
    39
    
    
    $
    9
    
    
    $
    5
    
    
    $
    5
    
    
    $
    (12
    )
    
    $
    46For the year ended December 31, 2008
    
    
    46
    
    
    
    27
    
    
    
    (8
    )
    
    
    31
    
    
    
    (27
    )
    
    
    69For the year ended December 31, 2009
    
    
    69
    
    
    
    18
    
    
    
    8
    
    
    
    1
    
    
    
    (18
    )
    
    
    78
 
 (a)
    
    Due to termination of lease accounting, the lease receivable and associated allowance have
been removed from the Companys consolidated balance sheet and the amounts were recorded at
the net carrying amount in the property, plant and equipment account. (see Note 4).  F-57




---



##### Table of Contents



Item 19. Exhibits
  
    
    should not in all instances be treated as categorical statements of fact, but rather as
a way of allocating the risk to one of the parties if those statements prove to be
inaccurate;
    
    have been qualified by disclosures that were made to the other party in connection with
the negotiation of the applicable agreement, which disclosures are not necessarily
reflected in the agreement;
    
    may apply standards of materiality in a way that is different from what may be viewed
as material to you or other investors; and
    
    were made only as of the date of the applicable agreement or such other date or dates
as may be specified in the agreement and are subject to more recent developments.
 http://www.sec.gov
 Exhibit No.
    
    Description1.1*
    
    Amended and Restated Articles of Association of AEI dated December 20, 2007.1.2*
    
    Amended and Restated Memorandum of Association of AEI dated December 20, 2007.2.1*
    
    Amended and Restated Registration Rights Agreement by and among AEI and certain Investors dated December 29, 2006.4.1**
    
    Amended and Restated Credit Agreement, dated as of June 6, 2008, among AEI,
AEI Finance Holding LLC, various financial institutions as lenders, Credit
Suisse, Cayman Islands Branch, JPMorgan Chase Bank, N.A., Credit Suisse
Securities (USA) LLC and J.P. Morgan Securities, Inc.4.2
    
    AEI 2007 Incentive Plan, as amended and restated on December 14, 2009.4.3*
    
    Concession Contract No. 187/98, dated August 27, 1998, between ANEEL and
Elektro Eletricidade e Servicos S.A., as amended.4.4*
    
    Distribution First Amendment to Concession Contract No. 187/98, dated
December 14, 1999, between ANEEL and Elektro Electricidade e Servicos S.A.4.5*
    
    Distribution Second Amendment to Concession Contract No. 187/98, dated July 12, 2005 between ANEEL and Elektro Electricidade e Servicos S.A.4.6*
    
    Distribution Third Amendment to Concession Contract No. 187/98, dated
December 18, 2007, between ANEEL and Elektro Eletricidade e Servicos S.A.4.7
    
    Distribution Fourth Amendment to Concession Contract No. 187/98, dated March 4, 2010 between ANEEL and Elektro Electricidade e Servicos S.A.4.8*
    
    Second Amended and Restated Shareholders Agreement, dated May 9, 2008, among AEI and the shareholders of AEI identified therein.4.9
    
    Amendment to the Second Amended and Restated Shareholders Agreement, dated as of October 29, 2009.4.10
    
    Form of Indemnification Agreement, dated as of January 1, 2010, by and between AEI and the officer or director of AEI.
  -133-




---



##### Table of Contents



Exhibit No.
    
    Description8.1
    
    List of Subsidiaries of AEI.12.1
    
    Certification of James Hughes, Chief Executive Officer (Principal Executive
Officer) of AEI, pursuant to 15 U.S.C. Section 78(m)(a), as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.12.2
    
    Certification of Eduardo Pawluszek, EVP, Chief Financial Officer (Principal
Financial Officer) of AEI, pursuant to 15 U.S.C. Section 78(m)(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.13.1
    
    Certification of James Hughes, Chief Executive Officer (Principal Executive
Officer) of AEI, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.13.2
    
    Certification of Eduardo Pawluszek, EVP, Chief Financial Officer (Principal
Financial Officer) of AEI, pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Previously filed as an exhibit to the Companys registration statement on Form 20-F (File
No. 000-53606) filed with the SEC on March 27, 2009 and incorporated herein by
reference.**
    
    Previously filed as an exhibit to the Companys annual report on Form 20-F (File No.
000-53606) filed with the SEC on June 17, 2009 and incorporated
herein by reference.  -134-




---



##### Table of Contents



Signatures
   AEIBy:

/s/
James A. HughesName:
    James A. HughesTitle:
    Chief Executive Officer  -135-




---



##### Table of Contents



ANNEX I
 
 Proportional Financial Metrics (1)  As of and for the Year Ended December 31, 2009
Unaudited
 Add Proportional
    
    
    ProportionalDeduct
    
    
    
    
    
    
    Adjusted
    
    
    Share of
    
    
    
    
    
    
    ProportionalNoncontrolling
    
    
    Deduct Equity
    
    
    EBITDA 
    
    
    Adjusted
    
    
    Net Debt
    
    
    Share ofOperating
    
    
    AEI Ownership
    
    
    AEI Consolidated
    
    
    Interest
    
    
    (Income)
    
    
    Equity/Cost
    
    
    EBITDA
    
    
    as of
    
    
    Net DebtBusiness
    
    Segment
    
    
    % at 12/31/09
    
    
    Adjusted EBITDA(2)
    
    
    Share(3)
    
    
    Loss(4)
    
    
    Investments(4)
    
    
    2009
    
    
    12/31/09(5)
    
    
    12/31/09(5)(In millions of $, except for ownership percentages)As of and for the year ended December 31, 2009Delsur
    
    Power Distribution
    
    
    86.41
    %
    
    $
    24
    
    
    $
    (3
    )
    
    $
    
    
    
    $
    
    
    
    $
    21
    
    
    $
    52
    
    
    $
    45EDEN
    
    Power Distribution
    
    
    90.00
    %
    
    
    24
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    22
    
    
    
    (16
    )
    
    
    (14
    )Elektra
    
    Power Distribution
    
    
    51.00
    %
    
    
    54
    
    
    
    (26
    )
    
    
    
    
    
    
    
    
    
    
    28
    
    
    
    113
    
    
    
    58Elektro
    
    Power Distribution
    
    
    99.68
    %
    
    
    392
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    391
    
    
    
    399
    
    
    
    398EMDERSA
    
    Power Distribution
    
    
    77.10
    %
    
    
    11
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    57
    
    
    
    44Chilquinta
    
    Power Distribution
    
    
    50.00
    %
    
    
    15
    
    
    
    
    
    
    
    (15
    )
    
    
    57
    
    
    
    57
    
    
    
    263
    
    
    
    132Luz del Sur
    
    Power Distribution
    
    
    37.97
    %
    
    
    38
    
    
    
    
    
    
    
    (38
    )
    
    
    71
    
    
    
    71
    
    
    
    225
    
    
    
    85Emgasud
    
    Power Generation
    
    
    42.73
    %
    
    
    (2
    )
    
    
    
    
    
    
    2
    
    
    
    8
    
    
    
    8
    
    
    
    134
    
    
    
    57ENS
    
    Power Generation
    
    
    100.00
    %
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    56
    
    
    
    56PQP
    
    Power Generation
    
    
    100.00
    %
    
    
    44
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44
    
    
    
    47
    
    
    
    47San Felipe
    
    Power Generation
    
    
    100.00
    %
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50
    
    
    
    (15
    )
    
    
    (15
    )Trakya
    
    Power Generation
    
    
    90.00
    %
    
    
    75
    
    
    
    (8
    )
    
    
    
    
    
    
    
    
    
    
    67
    
    
    
    (34
    )
    
    
    (31
    )Luoyang
    
    Power Generation
    
    
    50.00
    %
    
    
    6
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    117
    
    
    
    59DCL
    
    Power Generation
    
    
    60.23
    %
    
    
    (3
    )
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    78
    
    
    
    47Accroven
    
    Natural Gas Transportation and Services
    
    
    49.25
    %
    
    
    18
    
    
    
    
    
    
    
    (18
    )
    
    
    36
    
    
    
    36
    
    
    
    134
    
    
    
    66GTB
    
    Natural Gas Transportation and Services
    
    
    34.65
    %(6)
    
    
    8
    
    
    
    
    
    
    
    (8
    )
    
    
    16
    
    
    
    16
    
    
    
    248
    
    
    
    86TBG
    
    Natural Gas Transportation and Services
    
    
    8.27
    %(6)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    13
    
    
    
    196
    
    
    
    16Cuiabá
    
    Natural Gas Transportation and Services
    
    
    100.00
    %(6)
    
    
    (30
    )
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    (15
    )
    
    
    (73
    )
    
    
    (73
    )Promigas Pipeline
    
    Natural Gas Transportation and Services
    
    
    52.13
    %
    
    
    62
    
    
    
    (30
    )
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    288
    
    
    
    150Promigas  Gases de Occidente
    
    Natural Gas Distribution
    
    
    46.87
    %
    
    
    59
    
    
    
    (31
    )
    
    
    
    
    
    
    
    
    
    
    28
    
    
    
    55
    
    
    
    26Promigas  Gases del Caribe
    
    Natural Gas Distribution
    
    
    16.16
    %
    
    
    13
    
    
    
    
    
    
    
    (13
    )
    
    
    13
    
    
    
    13
    
    
    
    153
    
    
    
    25Cálidda
    
    Natural Gas Distribution
    
    
    80.85
    %
    
    
    20
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    8
    
    
    
    6Promigas  Surtigas
    
    Natural Gas Distribution
    
    
    51.58
    %
    
    
    38
    
    
    
    (19
    )
    
    
    
    
    
    
    
    
    
    
    19
    
    
    
    75
    
    
    
    39China
    
    Natural Gas Distribution
    
    
    (7)
    
    
    
    22
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    17
    
    
    
    (11
    )
    
    
    (12
    )Proenergia  SIE
    
    Retail Fuel
    
    
    27.45
    %
    
    
    142
    
    
    
    (103
    )
    
    
    
    
    
    
    
    
    
    
    39
    
    
    
    394
    
    
    
    108Proenergia  GNC
    
    Retail Fuel
    
    
    24.40
    %
    
    
    45
    
    
    
    (34
    )
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    88
    
    
    
    21Other
    
    Various Segments
    
    
    
    
    
    
    49
    
    
    
    (18
    )
    
    
    (9
    )
    
    
    9
    
    
    
    31
    
    
    
    67
    
    
    
    (23
    )SUBTOTAL
(Excluding Headquarters and Other)
    
    
    
    
    
    $
    1,206
    
    
    $
    (273
    )
    
    $
    (99
    )
    
    $
    223
    
    
    $
    1,057
    
    
    
    
    
    
    $
    1,403Headquarters and Other
    
    Headquarters
    
    
    100.00
    %
    
    
    (60
    )
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (68
    )
    
    
    1,275
    
    
    
    1,275TOTAL
    
    
    
    
    
    
    
    
    
    $
    1,146
    
    
    $
    (273
    )
    
    $
    (107
    )
    
    $
    223
    
    
    $
    989
    
    
    
    
    
    
    $
    2,678
 
 (1)
    
    The following table sets forth unaudited proportional metrics by business for AEIs
consolidated and unconsolidated entities. Given that AEI consolidates for accounting purposes
numerous businesses for which AEI does not own 100%, management uses these non-GAAP
proportional metrics, in addition to other GAAP metrics, for internal reporting and analysis
purposes. The data herein is derived from information based in some instances on
reconciliation of local GAAP to US GAAP and AEIs books and records. There can be no
assurance that the US GAAP reconciliation is accurate.(2)
    
    See Non-GAAP Financial Measures for a definition of Adjusted EBITDA. See
Selected Consolidated Financial Data for a reconciliation of net income attributable to AEI
to Adjusted EBITDA.(3)
    
    Represents the noncontrolling interests share of consolidated Adjusted EBITDA
calculated as 100% less the AEI ownership percentage as of December 31, 2009 multiplied by the
2009 Adjusted EBITDA for the business. See Annex II for a detailed reconciliation of the
business net income to Adjusted EBITDA.(4)
    
    Represents the subtraction of equity income (loss) included in the consolidated
Adjusted EBITDA for the business and the addition of the AEIs share of the business Adjusted
EBITDA. See Annex II for a detailed reconciliation of the business net income to Adjusted
EBITDA.(5)
    
    See Non-GAAP Financial Measures for a definition of net debt. See Selected
Consolidated Financial Data for a reconciliation of AEI debt to net debt. The net debt
column represents 100% of net debt for the particular business. This column is multiplied by
AEIs ownership to calculate the proportional column.(6)
    
    Ownership percentages changed in December 2009, however, previous percentages were
used to calculate proportional EBITDA.(7)
    
    Includes Tongda and BMG at ownership percentages of 100% and 70%, respectively.  A-1




---



##### Table of Contents



ANNEX I
 Proportional Financial Metrics (1)  As of and for the year ended December 31, 2008 and 2007
Unaudited
 AddProportional
    
    
    ProportionalAEI Consolidated
    
    
    Deduct
    
    
    Deduct Equity
    
    
    EBITDA 
    
    
    Share of
    
    
    
    
    
    
    ProportionalOperating
    
    
    AEI Ownership
    
    
    Adjusted
    
    
    Noncontrolling
    
    
    (Income)
    
    
    Equity/Cost
    
    
    Adjusted
    
    
    Net Debt as of
    
    
    Share of Net DebtBusiness
    
    Segment
    
    
    % at 12/31/08
    
    
    EBITDA(2)
    
    
    Interest Share(3)
    
    
    Loss(4)
    
    
    Investments(4)
    
    
    EBITDA 2008
    
    
    12-31-2008(5)
    
    
    12-31-2008(5)(In millions of $, except for ownership percentages)As of and for the year ended December 31, 2008Delsur
    
    Power Distribution
    
    
    86.41
    %
    
    $
    23
    
    
    $
    (3
    )
    
    $
    
    
    
    $
    
    
    
    $
    20
    
    
    $
    67
    
    
    $
    58EDEN
    
    Power Distribution
    
    
    90.00
    %
    
    
    18
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    24
    
    
    
    22Elektra
    
    Power Distribution
    
    
    51.00
    %
    
    
    49
    
    
    
    (24
    )
    
    
    
    
    
    
    
    
    
    
    25
    
    
    
    119
    
    
    
    60Elektro
    
    Power Distribution
    
    
    99.68
    %
    
    
    427
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    425
    
    
    
    241
    
    
    
    240Chilquinta
    
    Power Distribution
    
    
    50.00
    %
    
    
    36
    
    
    
    
    
    
    
    (36
    )
    
    
    57
    
    
    
    57
    
    
    
    160
    
    
    
    80Luz del Sur
    
    Power Distribution
    
    
    37.97
    %
    
    
    31
    
    
    
    
    
    
    
    (31
    )
    
    
    67
    
    
    
    67
    
    
    
    211
    
    
    
    80Cuiabá  EPE
    
    Power Generation
    
    
    50.00
    %
    
    
    (46
    )
    
    
    23
    
    
    
    
    
    
    
    
    
    
    
    (23
    )
    
    
    24
    
    
    
    12ENS
    
    Power Generation
    
    
    100.00
    %
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    56
    
    
    
    56PQP
    
    Power Generation
    
    
    100.00
    %
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    70
    
    
    
    70Subic
    
    Power Generation
    
    
    50.00
    %
    
    
    12
    
    
    
    
    
    
    
    (12
    )
    
    
    14
    
    
    
    14
    
    
    
    (10
    )
    
    
    (5
    )Trakya
    
    Power Generation
    
    
    59.00
    %
    
    
    40
    
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    (59
    )
    
    
    (35
    )Accroven
    
    Natural Gas Transportation and Services
    
    
    49.25
    %
    
    
    17
    
    
    
    
    
    
    
    (17
    )
    
    
    40
    
    
    
    40
    
    
    
    138
    
    
    
    68GTB
    
    Natural Gas Transportation and Services
    
    
    17.65
    %
    
    
    1
    
    
    
    
    
    
    
    (1
    )
    
    
    13
    
    
    
    13
    
    
    
    323
    
    
    
    57TBG
    
    Natural Gas Transportation and Services
    
    
    4.21
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    10
    
    
    
    777
    
    
    
    33Cuiabá  GOB
    
    Natural Gas Transportation and Services
    
    
    50.00
    %
    
    
    16
    
    
    
    (8
    )
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    28
    
    
    
    14Cuiabá  GOM
    
    Natural Gas Transportation and Services
    
    
    50.00
    %
    
    
    20
    
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    7
    
    
    
    4Promigas Pipeline
    
    Natural Gas Transportation and Services
    
    
    52.13
    %
    
    
    65
    
    
    
    (31
    )
    
    
    
    
    
    
    
    
    
    
    34
    
    
    
    177
    
    
    
    93Promigas  Gases de Occidente
    
    Natural Gas Distribution
    
    
    46.87
    %
    
    
    48
    
    
    
    (26
    )
    
    
    
    
    
    
    
    
    
    
    22
    
    
    
    61
    
    
    
    29Promigas  Gases del Caribe
    
    Natural Gas Distribution
    
    
    16.16
    %
    
    
    10
    
    
    
    
    
    
    
    (10
    )
    
    
    13
    
    
    
    13
    
    
    
    117
    
    
    
    19Cálidda
    
    Natural Gas Distribution
    
    
    80.85
    %
    
    
    19
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    47
    
    
    
    38Promigas  Surtigas
    
    Natural Gas Distribution
    
    
    52.08
    %
    
    
    38
    
    
    
    (18
    )
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    66
    
    
    
    35Promigas  SIE
    
    Retail Fuel
    
    
    28.13
    %
    
    
    162
    
    
    
    (116
    )
    
    
    
    
    
    
    
    
    
    
    46
    
    
    
    440
    
    
    
    124Promigas  GNC
    
    Retail Fuel
    
    
    24.96
    %
    
    
    48
    
    
    
    (36
    )
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    68
    
    
    
    17Other
    
    Various Segments
    
    
    
    
    
    
    39
    
    
    
    (14
    )
    
    
    (9
    )
    
    
    7
    
    
    
    23
    
    
    
    298
    
    
    
    115SUBTOTAL (Excluding Headquarters and Other)
    
    
    
    
    
    $
    1,134
    
    
    $
    
    (287)
    
    $
    (116
    )
    
    $
    221
    
    
    $
    952
    
    
    
    
    
    
    $
    1,284Headquarters and Other
    
    
    
    
    
    
    100.00
    %
    
    
    (90
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (90
    )
    
    
    1,474
    
    
    
    1,474TOTAL
    
    
    
    
    
    
    
    
    
    $
    1,044
    
    
    $
    (287
    )
    
    $
    (116
    )
    
    $
    221
    
    
    $
    862
    
    
    
    
    
    
    $
    2,758For the year ended December 31, 2007TOTAL
    
    
    
    
    
    
    
    
    
    $
    823
    
    
    $
    (131
    )
    
    $
    (77
    )
    
    $
    247
    
    
    $
    862
 
 (1)
    
    The following table sets forth unaudited proportional metrics by business for AEIs
consolidated and unconsolidated entities. Given that AEI consolidates for accounting purposes
numerous businesses for which AEI does not own 100%, management uses these non-GAAP
proportional metrics, in addition to other GAAP metrics, for internal reporting and analysis
purposes. The data herein is derived from information based in some instances on
reconciliation of local GAAP to US GAAP and AEIs books and records. There can be no
assurance that the US GAAP reconciliation is accurate.(2)
    
    See Non-GAAP Financial Measures for a definition of Adjusted EBITDA. See
Selected Consolidated Financial Data for a reconciliation of net income attributable to AEI
to Adjusted EBITDA.(3)
    
    Represents the noncontrolling interests share of consolidated Adjusted EBITDA
calculated as 100% less the AEI ownership percentage as of December 31, 2008 multiplied by the
2008 Adjusted EBITDA for the business. See Annex II for a detailed reconciliation of the
business net income to Adjusted EBITDA.(4)
    
    Represents the subtraction of equity income (loss) included in the consolidated
Adjusted EBITDA for the business and the addition of the AEIs share of the business Adjusted
EBITDA. See Annex II for a detailed reconciliation of the business net income to Adjusted
EBITDA. For the year ended December 31, 2007 we included the full year of proportional EBITDA
for equity investments acquired during the year. Had we included only the proportional EBITDA
from the date of acquisition, the proportional EBITDA would have been $766 million.(5)
    
    See Non-GAAP Financial Measures for a definition of net debt. See Selected
Consolidated Financial Data for a reconciliation of AEI debt to net debt. The net debt
column represents 100% of net debt for the particular business. This column is multiplied by
AEIs ownership to calculate the proportional column.  A-2




---



##### Table of Contents



ANNEX II
 
 Reconciliation of Non-GAAP Measures (1)  As of and for Year Ended December 31, 2009
Unaudited
 LUZ
    
    
    
    
    
    
    
    
    
    
    SANDELSUR
    
    
    DCL
    
    
    EDEN
    
    
    ELEKTRA
    
    
    ELEKTRO
    
    
    EMDERSA
    
    
    EMGASUD
    
    
    CHILQUINTA
    
    
    DEL SUR
    
    
    ENS
    
    
    PQP
    
    
    FELIPE
    
    
    TRAKYA(In millions of $, except for ownership percentages)EBITDA CALCULATION:Net Income (Loss) Attributable to AEI
    
    $
    1
    
    
    $
    (29
    )
    
    $
    11
    
    
    $
    11
    
    
    $
    208
    
    
    $
    3
    
    
    $
    (6
    )
    
    $
    40
    
    
    $
    75
    
    
    $
    21
    
    
    $
    20
    
    
    $
    58
    
    
    $
    23Add back:Depreciation and amortization
    
    
    12
    
    
    
    5
    
    
    
    3
    
    
    
    15
    
    
    
    102
    
    
    
    2
    
    
    
    11
    
    
    
    20
    
    
    
    28
    
    
    
    1
    
    
    
    8
    
    
    
    (4
    )
    
    
    16Noncontrolling interests
    
    
    1
    
    
    
    (16
    )
    
    
    1
    
    
    
    10
    
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    3
    
    
    
    23
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17Provision (benefit) for income taxes
    
    
    6
    
    
    
    
    
    
    
    4
    
    
    
    10
    
    
    
    97
    
    
    
    
    
    
    
    2
    
    
    
    9
    
    
    
    50
    
    
    
    6
    
    
    
    10
    
    
    
    26
    
    
    
    15Interest expense
    
    
    5
    
    
    
    12
    
    
    
    2
    
    
    
    9
    
    
    
    46
    
    
    
    3
    
    
    
    14
    
    
    
    14
    
    
    
    15
    
    
    
    4
    
    
    
    5
    
    
    
    1
    
    
    
    10EBITDA
    
    
    25
    
    
    
    (28
    )
    
    
    21
    
    
    
    55
    
    
    
    454
    
    
    
    9
    
    
    
    21
    
    
    
    86
    
    
    
    191
    
    
    
    32
    
    
    
    43
    
    
    
    81
    
    
    
    81Subtract:Interest Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    38
    
    
    
    
    
    
    
    1
    
    
    
    9
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    6Foreign currency transaction gain (loss), net
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    3
    
    
    
    (1
    )
    
    
    1
    
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain (loss) on disposition of assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other charges
    
    
    
    
    
    
    (25
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other income (expense), net
    
    
    1
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    42
    
    
    
    (1
    )
    
    
    1
    
    
    
    (20
    )
    
    
    1
    
    
    
    
    
    
    
    (1
    )
    
    
    25
    
    
    
    ADJUSTED EBITDA(2)
    
    $
    24
    
    
    $
    (3
    )
    
    $
    24
    
    
    $
    54
    
    
    $
    392
    
    
    $
    11
    
    
    $
    18
    
    
    $
    113
    
    
    $
    186
    
    
    $
    32
    
    
    $
    44
    
    
    $
    50
    
    
    $
    75AEI Percentage Ownership
    
    
    86.4
    %
    
    
    60.2
    %
    
    
    90.0
    %
    
    
    51.0
    %
    
    
    99.7
    %
    
    
    77.1
    %
    
    
    42.7
    %
    
    
    50.0
    %
    
    
    38.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    90.0
    %Proportional Share  Adjusted EBITDA
    
    $
    21
    
    
    $
    (2
    )
    
    $
    22
    
    
    $
    28
    
    
    $
    391
    
    
    $
    9
    
    
    $
    8
    
    
    $
    57
    
    
    $
    71
    
    
    $
    32
    
    
    $
    44
    
    
    $
    50
    
    
    $
    67NET DEBT CALCULATION:Debt
    
    $
    65
    
    
    $
    79
    
    
    $
    3
    
    
    $
    119
    
    
    $
    617
    
    
    $
    62
    
    
    $
    136
    
    
    $
    267
    
    
    $
    232
    
    
    $
    62
    
    
    $
    71
    
    
    $
    
    
    
    $
    80Less: Cash
    
    
    (10
    )
    
    
    (1
    )
    
    
    (19
    )
    
    
    (6
    )
    
    
    (174
    )
    
    
    (5
    )
    
    
    (2
    )
    
    
    (4
    )
    
    
    (7
    )
    
    
    (3
    )
    
    
    (20
    )
    
    
    (15
    )
    
    
    (114
    )Restricted cash  current
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (4
    )
    
    
    
    
    
    
    Restricted cash  non-current
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (40
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NET DEBT(2)
    
    $
    52
    
    
    $
    78
    
    
    $
    (16
    )
    
    $
    113
    
    
    $
    399
    
    
    $
    57
    
    
    $
    134
    
    
    $
    263
    
    
    $
    225
    
    
    $
    56
    
    
    $
    47
    
    
    $
    (15
    )
    
    $
    (34
    )Proportional Share  NET DEBT
    
    $
    45
    
    
    $
    47
    
    
    $
    (14
    )
    
    $
    58
    
    
    $
    398
    
    
    $
    44
    
    
    $
    57
    
    
    $
    132
    
    
    $
    85
    
    
    $
    56
    
    
    $
    47
    
    
    $
    (15
    )
    
    $
    (31
    )
 
 (1)
    
    The following table sets forth the reconciliation of net income to Adjusted EBITDA
and debt to net debt, and calculation of the unaudited proportional metrics by business for
certain of AEIs consolidated and unconsolidated entities. Given that AEI consolidates for
accounting purposes numerous businesses for which AEI does not own 100%, management uses these
non-GAAP measures and proportional metrics, in addition to other GAAP metrics, for internal
reporting and analysis purposes. The data herein is derived from information based in some
instances on reconciliation of local GAAP to US GAAP and AEIs books and records. There can
be no assurance that the US GAAP reconciliation is accurate.(2)
    
    See Non-GAAP Financial Measures for definitions of Adjusted EBITDA and net debt.
See Selected Consolidated Financial Data for a reconciliation of net income attributable to
AEI to Adjusted EBITDA and debt to net debt.(3)
    
    Ownership percentages changed in December 2009, however, previous ownership
percentages were used to calculate proportional EBITDA.(4)
    
    Includes Tongda and BMG at ownership percentages of 100% and 70%, respectively.  A-3




---



##### Table of Contents



Reconciliation of Non-GAAP Measures (1)  As of and for year ended December 31, 2009 (contd)
Unaudited
 PROMIGAS
    
    
    PROMIGAS
    
    
    PROMIGAS
    
    
    
    
    
    
    PROMIGAS
    
    
    
    
    
    
    PROENERGIA
    
    
    PROENERGIALUOYANG
    
    
    ACCROVEN
    
    
    GTB(3)
    
    
    TBG(3)
    
    
    CUIABA(3)
    
    
    PIPELINE
    
    
    GDO
    
    
    GDC
    
    
    CALIDDA
    
    
    SURTIGAS
    
    
    CHINA(4)
    
    
    SIE
    
    
    GNC(In millions of $, except for ownership percentages)EBITDA CALCULATION:Net Income (Loss)
Attributable to AEI
    
    $
    (6
    )
    
    $
    28
    
    
    $
    37
    
    
    $
    299
    
    
    $
    (36
    )
    
    $
    14
    
    
    $
    14
    
    
    $
    39
    
    
    $
    8
    
    
    $
    7
    
    
    $
    7
    
    
    $
    6
    
    
    $
    9Add back:Depreciation and
amortization
    
    
    7
    
    
    
    23
    
    
    
    18
    
    
    
    55
    
    
    
    11
    
    
    
    14
    
    
    
    4
    
    
    
    4
    
    
    
    7
    
    
    
    3
    
    
    
    9
    
    
    
    35
    
    
    
    11Noncontrolling
interests
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (132
    )
    
    
    10
    
    
    
    18
    
    
    
    3
    
    
    
    
    
    
    
    11
    
    
    
    5
    
    
    
    39
    
    
    
    9Provision (benefit)
for income taxes
    
    
    2
    
    
    
    6
    
    
    
    16
    
    
    
    155
    
    
    
    9
    
    
    
    9
    
    
    
    16
    
    
    
    23
    
    
    
    3
    
    
    
    10
    
    
    
    1
    
    
    
    30
    
    
    
    10Interest expense
    
    
    9
    
    
    
    15
    
    
    
    24
    
    
    
    62
    
    
    
    27
    
    
    
    27
    
    
    
    4
    
    
    
    16
    
    
    
    4
    
    
    
    8
    
    
    
    1
    
    
    
    43
    
    
    
    9EBITDA
    
    
    6
    
    
    
    72
    
    
    
    95
    
    
    
    571
    
    
    
    (121
    )
    
    
    74
    
    
    
    56
    
    
    
    85
    
    
    
    22
    
    
    
    39
    
    
    
    23
    
    
    
    153
    
    
    
    48Subtract:Interest Income
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    3
    
    
    
    3Foreign currency
transaction gain
(loss), net
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    252
    
    
    
    5
    
    
    
    7
    
    
    
    
    
    
    
    (1
    )
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    9
    
    
    
    Gain (loss) on
disposition of
assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (96
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other income
(expense), net
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    ADJUSTED
EBITDA(2)
    
    $
    6
    
    
    $
    74
    
    
    $
    93
    
    
    $
    319
    
    
    $
    (30
    )
    
    $
    62
    
    
    $
    59
    
    
    $
    80
    
    
    $
    20
    
    
    $
    38
    
    
    $
    22
    
    
    $
    142
    
    
    $
    45AEI Percentage
Ownership
    
    
    50.0
    %
    
    
    49.3
    %
    
    
    17.7
    %
    
    
    4.0
    %
    
    
    50.0
    %
    
    
    52.1
    %
    
    
    46.9
    %
    
    
    16.2
    %
    
    
    80.9
    %
    
    
    51.6
    %
    
    
    
    
    
    
    27.5
    %
    
    
    24.4
    %Proportional Share 
Adjusted EBITDA
    
    $
    3
    
    
    $
    36
    
    
    $
    16
    
    
    $
    13
    
    
    $
    (15
    )
    
    $
    32
    
    
    $
    28
    
    
    $
    13
    
    
    $
    16
    
    
    $
    19
    
    
    $
    17
    
    
    $
    39
    
    
    $
    11NET DEBT CALCULATION:Debt
    
    $
    119
    
    
    $
    138
    
    
    $
    273
    
    
    $
    346
    
    
    $
    
    
    
    $
    313
    
    
    $
    78
    
    
    $
    164
    
    
    $
    27
    
    
    $
    90
    
    
    $
    34
    
    
    $
    486
    
    
    $
    96Less: Cash
    
    
    (2
    )
    
    
    (4
    )
    
    
    (25
    )
    
    
    (150
    )
    
    
    (17
    )
    
    
    (25
    )
    
    
    (23
    )
    
    
    (11
    )
    
    
    (16
    )
    
    
    (14
    )
    
    
    (45
    )
    
    
    (92
    )
    
    
    (7
    )Restricted cash 
current
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (49
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restricted cash 
non-current
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (1
    )NET DEBT(2)
    
    $
    117
    
    
    $
    134
    
    
    $
    248
    
    
    $
    196
    
    
    $
    (73
    )
    
    $
    288
    
    
    $
    55
    
    
    $
    153
    
    
    $
    8
    
    
    $
    75
    
    
    $
    (11
    )
    
    $
    394
    
    
    $
    88Proportional Share 
NET DEBT
    
    $
    59
    
    
    $
    66
    
    
    $
    86
    
    
    $
    16
    
    
    $
    (73
    )
    
    $
    150
    
    
    $
    26
    
    
    $
    25
    
    
    $
    6
    
    
    $
    39
    
    
    $
    (12
    )
    
    $
    108
    
    
    $
    21
 
 (1)
    
    The following table sets forth the reconciliation of net income to Adjusted EBITDA
and debt to net debt, and calculation of the unaudited proportional metrics by business for
certain of AEIs consolidated and unconsolidated entities. Given that AEI consolidates for
accounting purposes numerous businesses for which AEI does not own 100%, management uses these
non-GAAP measures and proportional metrics, in addition to other GAAP metrics, for internal
reporting and analysis purposes. The data herein is derived from information based in some
instances on reconciliation of local GAAP to US GAAP and AEIs books and records. There can
be no assurance that the US GAAP reconciliation is accurate.(2)
    
    See Non-GAAP Financial Measures for definitions of Adjusted EBITDA and net debt.
See Selected Consolidated Financial Data for a reconciliation of net income attributable to
AEI to Adjusted EBITDA and debt to net debt.(3)
    
    Ownership percentages changed in December 2009, however, previous ownership
percentages were used to calculate proportional EBITDA.(4)
    
    Includes Tongda and BMG at ownership percentages of 100% and 70%, respectively.  A-4




---



##### Table of Contents



ANNEX II
 Reconciliation of Non-GAAP Measures (1)  As of and for the year ended December 31, 2008
Unaudited
 LUZ
    
    
    CUIABADELSUR
    
    
    EDEN
    
    
    ELEKTRA
    
    
    ELEKTRO
    
    
    CHILQUINTA
    
    
    DEL SUR
    
    
    EPE
    
    
    ENS
    
    
    PQP
    
    
    SUBIC
    
    
    TRAKYA
    
    
    ACCROVEN(In millions of $, except for ownership percentages)EBITDA CALCULATION:Net Income (Loss)
Attributable to AEI
    
    $
    1
    
    
    $
    6
    
    
    $
    10
    
    
    $
    166
    
    
    $
    53
    
    
    $
    63
    
    
    $
    (63
    )
    
    $
    35
    
    
    $
    13
    
    
    $
    17
    
    
    $
    (12
    )
    
    $
    27Add back:Depreciation and
amortization
    
    
    11
    
    
    
    3
    
    
    
    13
    
    
    
    110
    
    
    
    24
    
    
    
    36
    
    
    
    1
    
    
    
    2
    
    
    
    5
    
    
    
    10
    
    
    
    16
    
    
    
    23Noncontrolling interests
    
    
    2
    
    
    
    1
    
    
    
    8
    
    
    
    1
    
    
    
    3
    
    
    
    19
    
    
    
    (47
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Provision (benefit) for
income taxes
    
    
    3
    
    
    
    1
    
    
    
    9
    
    
    
    90
    
    
    
    (25
    )
    
    
    43
    
    
    
    3
    
    
    
    (12
    )
    
    
    5
    
    
    
    2
    
    
    
    25
    
    
    
    16Interest expense
    
    
    7
    
    
    
    4
    
    
    
    9
    
    
    
    72
    
    
    
    22
    
    
    
    17
    
    
    
    5
    
    
    
    6
    
    
    
    7
    
    
    
    
    
    
    
    3
    
    
    
    16Loss from disposal of
discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    EBITDA
    
    
    24
    
    
    
    15
    
    
    
    49
    
    
    
    439
    
    
    
    124
    
    
    
    178
    
    
    
    (101
    )
    
    
    31
    
    
    
    30
    
    
    
    29
    
    
    
    34
    
    
    
    82Subtract:Interest Income
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    45
    
    
    
    10
    
    
    
    1
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    1Foreign currency
transaction gain (loss),
net
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (2
    )
    
    
    (1
    )
    
    
    (1
    )
    
    
    (17
    )
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (7
    )Gain (loss) on
disposition of assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (44
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other income (expense),
net
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    (13
    )
    
    
    1
    
    
    
    2
    
    
    
    3
    
    
    
    
    
    
    
    1
    
    
    
    2
    
    
    
    (1
    )
    
    
    ADJUSTED EBITDA(2)
    
    $
    23
    
    
    $
    18
    
    
    $
    49
    
    
    $
    427
    
    
    $
    114
    
    
    $
    176
    
    
    $
    (46
    )
    
    $
    32
    
    
    $
    29
    
    
    $
    27
    
    
    $
    40
    
    
    $
    81AEI Ownership Percentage
    
    
    86.4
    %
    
    
    90.0
    %
    
    
    51.0
    %
    
    
    99.7
    %
    
    
    50.0
    %
    
    
    38.0
    %
    
    
    50.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    50.0
    %
    
    
    59.0
    %
    
    
    49.3
    %Proportional Share 
Adjusted EBITDA
    
    $
    20
    
    
    $
    16
    
    
    $
    25
    
    
    $
    425
    
    
    $
    57
    
    
    $
    67
    
    
    $
    (23
    )
    
    $
    32
    
    
    $
    29
    
    
    $
    14
    
    
    $
    24
    
    
    $
    40NET DEBT CALCULATION:Debt
    
    $
    73
    
    
    $
    37
    
    
    $
    144
    
    
    $
    370
    
    
    $
    220
    
    
    $
    218
    
    
    $
    42
    
    
    $
    67
    
    
    $
    87
    
    
    $
    1
    
    
    $
    1
    
    
    $
    167Less: Cash
    
    
    (3
    )
    
    
    (13
    )
    
    
    (25
    )
    
    
    (93
    )
    
    
    (4
    )
    
    
    (7
    )
    
    
    (13
    )
    
    
    (8
    )
    
    
    (13
    )
    
    
    (11
    )
    
    
    (60
    )
    
    
    (8
    )Restricted cash  current
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    (56
    )
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    (21
    )Restricted cash 
non-current
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    (29
    )
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NET DEBT(2)
    
    $
    67
    
    
    $
    24
    
    
    $
    119
    
    
    $
    241
    
    
    $
    160
    
    
    $
    211
    
    
    $
    24
    
    
    $
    56
    
    
    $
    70
    
    
    $
    (10
    )
    
    $
    (59
    )
    
    $
    138Proportional Share  NET
DEBT
    
    $
    58
    
    
    $
    22
    
    
    $
    61
    
    
    $
    240
    
    
    $
    80
    
    
    $
    80
    
    
    $
    12
    
    
    $
    56
    
    
    $
    70
    
    
    $
    (5
    )
    
    $
    (35
    )
    
    $
    68
 
 (1)
    
    The following table sets forth the reconciliation of net income to Adjusted EBITDA
and debt to net debt, and calculation of the unaudited proportional metrics by business for
certain of AEIs consolidated and unconsolidated entities. Given that AEI consolidates for
accounting purposes numerous businesses for which AEI does not own 100%, management uses these
non-GAAP measures and proportional metrics, in addition to other GAAP metrics, for internal
reporting and analysis purposes. The data herein is derived from information based in some
instances on reconciliation of local GAAP to US GAAP and AEIs books and records. There can
be no assurance that the US GAAP reconciliation is accurate.(2)
    
    See Non-GAAP Financial Measures for definitions of Adjusted EBITDA and net debt.
See Selected Consolidated Financial Data for a reconciliation of net income attributable to
AEI to Adjusted EBITDA and debt to net debt.  A-5




---



##### Table of Contents



Reconciliation of Non-GAAP Measures (1)  As of and for the year ended December 31, 2008 (contd)
Unaudited
 CUIABA
    
    
    CUIABA
    
    
    PROMIGAS
    
    
    PROMIGAS
    
    
    PROMIGAS
    
    
    
    
    
    
    PROMIGAS
    
    
    PROMIGAS
    
    
    PROMIGASGTB
    
    
    TBG
    
    
    GOB
    
    
    GOM
    
    
    PIPELINE
    
    
    GDO
    
    
    GDC
    
    
    CALIDDA
    
    
    SURTIGAS
    
    
    SIE
    
    
    GNC(In millions of $, except for ownership percentages)EBITDA CALCULATION:Net Income (Loss)
Attributable to AEI
    
    $
    19
    
    
    $
    235
    
    
    $
    3
    
    
    $
    9
    
    
    $
    2
    
    
    $
    8
    
    
    $
    44
    
    
    $
    6
    
    
    $
    7
    
    
    $
    (1
    )
    
    $
    18Add back:Depreciation and
amortization
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    3
    
    
    
    14
    
    
    
    3
    
    
    
    4
    
    
    
    6
    
    
    
    3
    
    
    
    46
    
    
    
    14Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    8
    
    
    
    5
    
    
    
    14
    
    
    
    
    
    
    
    1
    
    
    
    11
    
    
    
    32
    
    
    
    62Provision (benefit) for
income taxes
    
    
    29
    
    
    
    125
    
    
    
    8
    
    
    
    (6
    )
    
    
    16
    
    
    
    17
    
    
    
    22
    
    
    
    2
    
    
    
    10
    
    
    
    17
    
    
    
    4Interest expense
    
    
    31
    
    
    
    
    
    
    
    8
    
    
    
    6
    
    
    
    29
    
    
    
    4
    
    
    
    15
    
    
    
    5
    
    
    
    9
    
    
    
    46
    
    
    
    7Loss from disposal of
discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    EBITDA
    
    
    79
    
    
    
    360
    
    
    
    20
    
    
    
    20
    
    
    
    66
    
    
    
    46
    
    
    
    85
    
    
    
    20
    
    
    
    40
    
    
    
    140
    
    
    
    105Subtract:Interest Income
    
    
    
    
    
    
    111
    
    
    
    
    
    
    
    1
    
    
    
    2
    
    
    
    (1
    )
    
    
    1
    
    
    
    2
    
    
    
    1
    
    
    
    7
    
    
    
    2Foreign currency
transaction gain (loss),
net
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )
    
    
    
    
    
    
    (27
    )
    
    
    Gain (loss) on
disposition of assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68Other charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other income (expense),
net
    
    
    
    
    
    
    2
    
    
    
    4
    
    
    
    (1
    )
    
    
    2
    
    
    
    (1
    )
    
    
    6
    
    
    
    
    
    
    
    1
    
    
    
    (2
    )
    
    
    (13
    )ADJUSTED EBITDA(2)
    
    $
    76
    
    
    $
    247
    
    
    $
    16
    
    
    $
    20
    
    
    $
    65
    
    
    $
    48
    
    
    $
    79
    
    
    $
    19
    
    
    $
    38
    
    
    $
    162
    
    
    $
    48AEI Ownership Percentage
    
    
    17.7
    %
    
    
    4.2
    %
    
    
    50.0
    %
    
    
    50.0
    %
    
    
    52.1
    %
    
    
    48.9
    %
    
    
    16.2
    %
    
    
    80.9
    %
    
    
    52.1
    %
    
    
    28.1
    %
    
    
    25.0
    %Proportional Share 
Adjusted EBITDA
    
    $
    13
    
    
    $
    10
    
    
    $
    8
    
    
    $
    10
    
    
    $
    34
    
    
    $
    22
    
    
    $
    13
    
    
    $
    15
    
    
    $
    20
    
    
    $
    46
    
    
    $
    12NET DEBT CALCULATION:Debt
    
    $
    344
    
    
    $
    918
    
    
    $
    31
    
    
    $
    23
    
    
    $
    212
    
    
    $
    64
    
    
    $
    130
    
    
    $
    86
    
    
    $
    71
    
    
    $
    505
    
    
    $
    78Less: Cash
    
    
    (21
    )
    
    
    (107
    )
    
    
    (3
    )
    
    
    (16
    )
    
    
    (34
    )
    
    
    (4
    )
    
    
    (13
    )
    
    
    (7
    )
    
    
    (5
    )
    
    
    (65
    )
    
    
    (10
    )Restricted cash  current
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32
    )
    
    
    
    
    
    
    
    
    
    
    Restricted cash 
non-current
    
    
    
    
    
    
    (34
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NET DEBT(2)
    
    $
    323
    
    
    $
    777
    
    
    $
    28
    
    
    $
    7
    
    
    $
    178
    
    
    $
    60
    
    
    $
    117
    
    
    $
    47
    
    
    $
    66
    
    
    $
    440
    
    
    $
    68Proportional Share  NET
DEBT
    
    $
    57
    
    
    $
    33
    
    
    $
    14
    
    
    $
    4
    
    
    $
    93
    
    
    $
    29
    
    
    $
    19
    
    
    $
    38
    
    
    $
    34
    
    
    $
    124
    
    
    $
    17
 
 (1)
    
    The following table sets forth the reconciliation of net income to Adjusted EBITDA
and debt to net debt, and calculation of the unaudited proportional metrics by business for
certain of AEIs consolidated and unconsolidated entities. Given that AEI consolidates for
accounting purposes numerous businesses for which AEI does not own 100%, management uses these
non-GAAP measures and proportional metrics, in addition to other GAAP metrics, for internal
reporting and analysis purposes. The data herein is derived from information based in some
instances on reconciliation of local GAAP to US GAAP and AEIs books and records. There can
be no assurance that the US GAAP reconciliation is accurate.(2)
    
    See Non-GAAP Financial Measures for definitions of Adjusted EBITDA and net debt.
See Selected Consolidated Financial Data for a reconciliation of net income attributable to
AEI to Adjusted EBITDA and debt to net debt.  A-6