Welcome and thank you for standing by. At this time, all participants are in the listen-only mode until the question-and-answer session of today’s conference. (Operator Instructions) I’d now like to turn the call over to Mr. Paul Hanrahan. Thank you. You may begin.

Okay thanks, thanks operator. Ahmed, why don’t you open up the call?

Thank you, Paul. Thank you and welcome to AES Corporation’s second quarter earnings call. We appreciate you being with us this morning. Joining me today, are Paul Hanrahan, our President and CEO; Victoria Harker, our Chief Financial Officer; Andres Gluski, our Chief Operating Officer, and other senior members of our management. Before we begin our presentation, let me you remind you that our comments today will include forwarding-looking statements, which are subject to certain risks and uncertainties. For a complete discussion of these risks, we encourage you to read our documents on file with the SEC. Our presentation is being webcast and slides are available on our website, which you can access at www.aes.com under Investor Relations. With that, I would like to turn the call over to Paul Hanrahan, our President and CEO.

Okay, thanks Ahmed, and good morning to all of you joining us for our call today. This morning, I would like to focus my comments in three areas. First, the performance for the quarter; second, an update on our construction program; and third, an update on our growth opportunities and a discussion about our general approach to capital allocation, which I want to be sure we continue to communicate to investors on a regular basis. First, our operating performance for the quarter, in line with our performance last quarter, our focus on operations resulted in improvements in nearly all of our financial metrics. For example, our proportional gross margin increased 19% while proportional operating cash flow also increased 14%. These improvements were reflected in our adjusted earnings per share of $0.23 despite a $0.04 impact of a higher share count associated with raising capital to invest in value accretive opportunities. This quarter, we benefited from stronger economic growth and increased demand for electrical power in Asia and parts of Latin America such as Brazil. This was partially offset, however. In the US, we saw moderate demand growth and lower pricing and dark spreads for the merchant portion of our generating plea. Now, I will turn the call over to Victoria to provide a more detailed review of our financial performance, and I will talk about the construction and development, which will be driving our future earnings growth. Victoria.

Thanks Paul and good morning everyone. As you have already heard, the second quarter of 2010 continues to reflect the favorable operating results and higher demand in several key markets. Proportional gross margin improved quarter-over-quarter on higher volume and rates in Latin America and Asia, as well as favorable foreign exchange primarily in Brazil. This growth in gross margin translated into higher proportional operating cash flow, which increased by 14% compared to the second quarter of 2009. Adjusted EPS of $0.23 while down a penny compared to the same quarter last year is actually relatively strong reflecting the strength of business operations, particularly in light of this quarter’s higher share account and higher effective tax rate, as well as a fact that there was a $0.05 one-time gain in the same quarter of 2009 due to a construction claim settlement that contributed to earnings then. Now, let’s discuss results for the second quarter in greater detail. From a macroeconomic perspective, our trends this quarter are similar to what we saw in first quarter. Volume growth continued unabated in key markets in Asia and Latin America. For example, demand in the Philippines as well as Brazil continued their upward trajectory with 12% and 5% year-over-year improvements respectively, with GDP growth driving both power demand and new construction starts in these markets. Volume also increased in Columbia due to higher water inflows at [Tubos] Reservoir, while Panama experienced higher dispatch volumes as water conservation measures there eased during the same period. In addition, higher prices due to the final tariff settlement in July 2009 continued to increase earnings at our Latin American utility. Our generation plants and other geographies also benefited from higher prices due to factors such as system-wise supply constraints in the Philippines and Panama and the dry season in…

Okay, thanks Victoria. Now, what I would like to do is before talking about development, turn to the progress we are making on our construction program. We are making good progress with construction. In the second quarter, we completed two win projects with combined capacity of just under 100 megawatts in China. Both of these projects in which we owned 49% stakes were completed on time and on budget. That leaves approximately 1900 megawatts in aggregate in construction. Of this amount, 1676 megawatts is expected to come online through 2011, in line with our previous estimates. We expect 793 megawatts to come online before the end of this year including the 670-megawatt Maritsa East coal plant in Bulgaria. This plant has already achieved full load operation on the first unit generating over 330 megawatts. We have successfully fired the second unit on oil with current schedule for both units projecting to be completed by year-end. We also have another 883 megawatts of capacity in aggregate projected to come online during 2011. This includes our 520-megawatt Angamos coal plant in the mining region in the north of Chile. While we successfully hydro tested the boilers and are on schedule to fire coal in the coming months, it will meet our commitment of finishing the project during the second half of 2011. Additionally, our 220-megawatt Changuinola hydroelectric project in Panama has completed approximately 80% of the tunneling required for the powerhouse, hydro testing of the turbines has been completed and progress continues with construction of the dam. We expect the Changuinola project to be completed by the first half of 2011 as scheduled. I am also pleased to report that we have reached a significant milestone in resuming construction of our 270 megawatt Campiche coal plant in Chile. As you recall, construction…

(Operator Instructions) Lasan Johong, your line is now open.

Thank you. Paul, Vietnam is now headed down the road of nuclear development and it sounds like lot more other countries are going to join the fray. (a) Does this have an effect on Mong Duong in anyway and (b) are you rethinking potentially your strategy for nuclear development, particularly if it’s small scale and in countries like Vietnam?

Yes, in terms of looking at nuclear capacity, this would not affect Mong Duong, Mong Duong has got a PPA, which will be our standard long-term contract with pricing already set. In Vietnam, it really does need a lot of capacity. They are already short of capacity. They are seeing high growth in their economy, as they continue to pick up as a country, which has got low cost manufacturing capacity, they are growing quite rapidly. I think in terms of, are getting into nuclear, we’ve decided not to move in that direction. We just don’t see enough opportunities for that to justify the investment we have to put in place to build up that capability. So, I think we are interested in our core power business, gas and coal plants; renewal business, wind and solar. I think there are plenty of opportunities that we see around the world just to be focusing on those opportunities, but we don’t seek getting into nuclear. I think the other part is, just a development, the length of time it takes to develop nuclear and to construct nuclear clearly makes it tough to justify putting a lot of money into those projects for us, but thanks for the question.

It makes sense. Could you give us also an economy trend in Latin America and Asia, are you seeing the trend going up, flat or down?

I think we’ve seen really strong growth in Asia and Latin America, and I think Eletropaulo has been seeing growth rates in the 5% percent range of their demand growth 6%, which has been corrected. In Asia, we are seeing, in Philippines I believe the number is over 10%, I think it’s 12% in terms of their electricity demand growth. So, throughout Asia, we are continuing to see high growth rates as the domestic demand, domestic conception of those countries continues to pick up. So, I think in terms of trending, we think that’s a good sign in something we are focused on, because that really is the market where we invest lot of time and money and what we think we are going to see really interesting opportunities over the next 5 to 10 years.

Great. Any update on the Braziliana sale?

Hi Lasan. Really, there is no update in terms of the Braziliana sale. The NDS has not indicated anything in terms of moving forward to the auction, which had been suspended about a year ago.

Okay.

I will just reiterate though, that we have a right of first refusal for any auction that might take place, if and when the BNDES, the Development Bank of Brazil decides to sell its interest, and that’s one of the reasons why we think having the liquidity that we have at the parent company is really important. I mean what we are finding is having liquidity to be able to transact, really does allow us to be selective about where we put our capital, where we see good opportunities and again I point to the Ballylumford case, where we could move quickly, we had the local knowledge, we think that really did give us a leg up on our competition and allow us to execute that transaction very quickly.

Last question for Victoria. I’m not sure why you had to take a write-off when CIC and AES came to an agreement that it would no longer invest at this time into the wind project pipeline for AES, what was that write-off about?

It wasn’t just the CIC transaction, it’s actually the accumulation of a number of couple of different transactions where we had been looking at, all of which required us to put together historical financial statement, so it was the cost involved, it was getting ready for potential transaction and required external three-year prior historical audited financial, which of course we are going to continue to keep current now. But since we have no current transaction to justify keeping those costs hung up, we had to go ahead and trigger that and take the right down in period.

Let me just comment on that, because I think it’s important. We still look at wind as the business that we might eventually go out and do an IPL. We took all the steps necessary to get it ready to go and as Victoria, mentioned it’s going to remain ready to go. In terms of accounting though, because we didn’t have a transaction out there where we could take it public or sell it right away. We decided to just go ahead and write that off, which is the appropriate accounting treatment. But in terms of the investment we made, we will be ready to go, if and when the market comes back, where it would be an attractive opportunities. I talked about portfolio management, I could see us doing more things like that where we could take some of our assets and take them public as a way to do portfolio management, but it’s going to depend on the markets. Our solar business would be for example another one, but we in Riverstone will continue to look at the opportunities to monetize that asset, potentially monetize a part of that business because we are seeing tremendous growth, we are seeing a lot of good projects there. We will look for ways that we can do some portfolio management down the road. So, doing this kind of accounting, something we wanted to do we have it ready to do, but it’s more of the accounting treatment. I should also comment on the CIC. I know I’ve got a lot of questions, when I was on the road is to why didn’t CIC proceed with the investment in the wind business? I think, I was out there meeting with them and I think there were a number of issues going on…

Paul, I lied, there is one follow-up question. You just surprised me with this comment of potentially IPOing a bunch of subsidiaries to project management or to manage your portfolio, but that also implies on escalating G&A cost at the parent company. Are you scaled up for that, are you prepared for that. Is there enough people that you can bring on to make that actually work in a fluid manner?

Thank you for asking that question. I think Victoria is pulling back here a little bit. The answer to that is I mean very simply, we built up a big infrastructure, our G&A costs are high. The advantage we have with that though is we are really geared up to do a lot with respect to financial statements, financial reporting. So, as I see it, if we can do some things like IPOs, we should be able to do that very cost effectively. I do feel like those and in terms of G&A, this is going to be a major effort for us in the second half of the year, is becoming leaner. We had to go through a period of time where we had restatements; we had to build up the infrastructure. We now need to get to the point where we can do this more efficiently and I think we are now at a great point to do that. This could be a combination of having the capabilities available to us where we could do more, and also starting to skinny it down a little bit. If we don’t wind up doing IPOs, we probably have the ability to tighten down a little bit more, even more on that G&A cost.

Thank you.

Yeah.

Brian Russo, your line is now open. Brian Russo - Ladenburg Thalmann & Co.: Yes, hi. Good morning.

Good morning Brian Russo - Ladenburg Thalmann & Co.: Just to touch on the IPO discussion, was the IPO you were considering with CIC just you’re US wind assets or your entire global portfolio?

Well it would have been for the entire global wind portfolio or the majority of it anyway. There is some places where, like Chile where we might have to leave that with our Chilean business, but they were going to buy into the global portfolio for wind and the intent was we both looked at it as if the IPO market ever became attractive, we would always want to have the option to go do that. I think that’s true with, if you took any collection of our assets, if we saw an opportunity to do an IPO down the road where we had the critical mass, where the markets offered attractive pricing, it might be a way to take advantage of either local markets or particular markets for types of assets that would allow us to raise more capital cheaply than we might at the parent. If you look at where our parent stock is today, it’s painfully obvious that there are better places to raise capital than in the US markets for the kind of assets we have, and that’s something that’s going on the back of our minds about, our strategy going forward is to how we raise capital as we continue to grow in particular areas. Brian Russo - Ladenburg Thalmann & Co.: Already great, and just a reminder, I think that original wind agreement with CIC was they were going to pay $570 million for 35% stake of your entire portfolio?

Yes, that’s right. Brian Russo - Ladenburg Thalmann & Co.: Okay and then in terms of 2011 drivers, I know you haven’t updated your 2011 guidance in quite a while, but it looks like this Northern Ireland acquisition you meant some near-term accretion. Can you just give us some kind of background on the 1246 megawatt, is all that operational or is that lot of that needs refurbishment and so forth?

Well, Victoria talked about drivers for 2011. Let me start with the Ballylumford plant, I don’t remember the exact numbers but it’s about 500 megawatts of peaking capacity, 560 or so. It’s got a peaking plant, which will come off line in 2015, so that we expect that would be shut down. The other piece of that which is roughly 600 something megawatt is a combined cycle plant which would continue operating and is contracted through 2018, so that would be the piece that we continue operating, we think has the long-term potential, but the peak would be shut down. In terms of the value from that plant, earnings accretion from that unit is probably in the range of about $0.04 per share coming from Ballylumford in 2011, that’s partly because it’s front loaded. And if we talk about our hurdle rate as being 15% and this exceeded that hurdle rate for us. And again I think it’s because we have a plant not too far away, we know the market, we can operate it probably more efficiently by sharing resources, having some share procurement between the facilities, but given that we know the market and we can move quickly because we have liquidity, we think it enables us to get an attractive deal on that asset. Maybe Victoria you could talk a little bit about how we are thinking about the 2011, we are not going to give guidance right now, but we can just give you some thinking about it.

Alright and we have not updated yet in part, we are still looking at sort of post the CIC transaction and the dilutions there as well as some of the actions we’ve taken over the last quarter. So, in terms of debt pay down, we had originally been about a $1.20, so we are just post those two sets of transactions we are sort of in a $1.07 to $1.10 range. Some of these new acquisitions add back to that, and then we are also looking at some of the macroeconomic drivers relative to New York and the commodity prices. But that range I think is probably where we are looking right now, we are not through our budget cycle and we would look to update it, I think probably in the November end of your time frame. Brian Russo - Ladenburg Thalmann & Co.: Okay and then just on Eastern Energy, what type of margin contribution is that provide into AES in 2010, I mean with gas prices where they are, is this generating any meaningful amount of cash and what kind of utilization rates do you have on that, and then so it seems like in ‘11 there is very little downside there and more upside?

Edward Hall, our head of North America and also heads our wind business and he is closest to that, he could comment.

Yes, I think you stated it accurately. We did get a dividend out the first half of this year, a million dollars and going forward we have hedged through the end of this year about 85% of the economic value now given the current operating profile with gas hedges. There had been heat rate expansion in the market recently, so those are coming in above budget at this point, we are about 16% ahead of budget. So, we are pretty good shape for this year, but the $20 million is all we expect to get out and next year we are not hedged, and looking it forward, we are not anticipating a dividend. But, so the $20 million would be the difference between this year and next year.

And we had previously -- I think when we issued our guidance for this year. We had cited the fact that we had taken that out. So anything that would be upside to the guidance that had been previously provided.

Yes, I think Brian. This is Ahmed. I think that in terms of earnings if that is your question, I think probably the margins we are accepting this year because of the lower hedging pricing as compared to ’09 is a $18 million less contribution as compared to 2009, which is roughly $20 million to $30 million this year, and in ’11 I think it’s even neutral if not negative, given that we have not hedged anything in ’11. Brian Russo - Ladenburg Thalmann & Co.: Okay, great, and then just lastly, on your buy back program, what kind of confidence can you give us regarding your ability or desire to complete that before it expires by year end. If I recall you had a previous 400 million share buy back, I think in ’08 maybe or early ’09 and you completed less than half. Any thoughts on that?

Yes. It’s hard to predict, because a lots going to depend on what the stock price does. We are not committed to spending $500 million at any price. We think we want to get a meaningful discount to the implicit value, so we are not eager to go out there and just put the money in to buying the stock, unless we can get it at good prices, and we’ll continue to evaluate what that price is as we go forward, we and the Board will. We started this program when the stock was underlying. Its jumped up a little bit. As you can see we didn’t buy very much back, and we had some restrictions because of the earnings. Once we had a certain knowledge we were restricted as to what we could actually go do, but we’ll continue to evaluate that depending on how the stock price moves. Obviously we don’t want to be chasing all the way up, because we do see some good opportunities for investments and acquisitions, and we won’t want to loose the ability to do that also, but we are going to balance that. When the stock is attractively priced, we’ll do that, but we’ll do it at levels that enable us to get that benefit. But that’s okay, we and the Board will continue to evaluate what’s the right limit price to do that. And just in 2009, the reason we stopped there, and I think its relevant, was that we started to get business back -- I’m sorry, its actually 2008 I believe we did this. August 2008, when we saw our price dropping and we thought, well this is great, we are getting stock at a fantastic price, but then when the world was falling apart for us and everybody else, we started to get concerned about liquidity and we just held back, and that’s why when we looked at the CIC transaction, we begin to realize that if you got liquidity, if you’ve got cash, there’s a lot you can do and you could take advantage things. Quite frankly, if we hadn’t raised the money from CIC, we would not have been able to buy back stock at prices that were just under $10. That wasn’t our intention at the time, but at the same time its important to have the flexibility, the financial flexibility to go do things for value accreted for shareholders. So, there we didn’t stop because we didn’t like the price, we stopped because we were worried about liquidity. We are beyond that point now and I think we’ve got the financial flexibility to do many things. Brian Russo - Ladenburg Thalmann & Co.: Great. Thank you very much.

You are welcome.

Ali Agha, your line is now open.

Thank you. Good morning.

Good morning Ali.

Good morning. One, first off Victoria, I just wanted to clarify a couple of numbers from the quarter and from your prepared remarks, making sure that I heard those correctly. I thought you had mentioned that FX was a positive in the quarter, but in that slide, waterfall slide, I believe slide 6, I did not see that other than the FX transaction losses that you broke out. What was the FX impact in the quarter for you?

About $0.03 impact.

Positive?

Yes.

Okay, and then on the tax rate question, I guess two parts, one is that 47% or 48% tax rate you alluded to, is that the same tax rate we should think about when we think about adjusted earnings that move around, and then the other part, I think you mentioned something about a potential level of earnings hit. It wasn’t quite clear. Could you just elaborate a little more on that issue?

Sure, and to answer your first point relative to the 48%, that was the common -- that’s where the effective tax rate was. It was a combination of the semi gain and the transactional gain that we recognized in the quarter, as well as the lack of that legislation having been enacted. The 48% on an adjusted basis would still be sort of at the mid 35%, 36%. What I was referring to in terms of just the legislative piece of this alone, which would be recurring in nature obviously if not extended, which would have had an $0.11 impact on EPS for full year, we’ve had enough operating benefits, that we’ve offset some portion of that through the year so far. I was flagging the fact that obviously the legislation still has not been enacted if we fight that, I think in our MG&A both quarters now, and so we will continue to look for offsetting opportunities as the years goes on, but it has been an underlying assumption going into this year, that that would have been reenacted and that it was at about $0.11 full year impact. So that’s just context for those moving parts. If we do not get it for example, though we would be higher than we would have projected on an effective tax rate, probably in the closer to the mid 30s than the low 30s on a percentage basis, and all of that of course is non-cash impacting.

Right, but to be clear, right now you are booking income with the assumption that the law does not change?

Correct.

Okay.

That has already come out, that we are not expecting an extension of which would have gotten us to the lower tax rate.

Yes, I think to me, very simply the way to think about is, everything we reported to-date is reflecting the fact that the legislation has not been extended. If it were not to be extended, then it’s probably a $0.06 hit relative to our guidance. The net impact we think we’d end up. So that’s -- if you are think about it, that’s the potential exposure to the company.

But that said, as we did with the first half of this year, we are assessing opportunities to offset that $0.06, so just for clarity, we wanted to pinpoint the fact that that’s driving the tax rate, however we are looking at other offsetting opportunities to make sure that we can hit the guidance we previously announced.

Right, and the $0.06 gain from some of it Victoria, to be clear, that is included in adjusted earnings, correct?

Yes, yes.

Okay. And then finally Paul, coming back to you, when you look at your development project pipeline in your appendix, the three big projects, and you alluded to Vietnam, I believe India and perhaps there is another one in Chile, that require the largest amount of equity and presumably have the largest impact to your bottom line. Are all scheduled to come online 2014, 15 and beyond the time period, and the bulk of your construction program as you pointed out gets completed next year. When you are looking at other opportunities out there, are there opportunities of similar magnitude and have similar bottom line implications that could potentially come in between the 11 and 15 time period?

Yes, I think you look at those as being primarily acquisitions, which they are going to be kind of lumpy and difficult to predict, but acquisitions are the kinds of things that you could get that in a matter of may be six months. You also have the renewables which are a big focus force and wind projects typically from the time you close, to pre align, that’s may be year, and then you talk about solar projects which might be less than a year. As I mentioned, these are the small projects, there are a lot of them going on, but when you start to add up the total numbers, it gets to be a meaningful number. So I do see the renewables contributing to the growth here also, in addition to acquisitions we may do, but acquisitions are probably the bulk of the -- if we are talking about anything meaningful, those would be probably a bigger ticket items that would be coming online.

Right. Other than BNDS, which may or may not utilize next year, are there other sort of privatizations or other such actions that are sort of bottled up that you could point us to, that may also be an opportunity for you?

Well, BNDS would be one. It’s hard to go out there and talk about it. Many of these conversations are confidential. I think one place, which I could mention that we do see some opportunities, would be the privatization of generation plants in Turkey. We’ll be seeing some things come online there. I think the other thing is we are seeing -- generally there are private equity players that have taken our funds that have picked up some assets and are now beginning to look at ways to monetize those. We’ll be just hanging around looking for opportunities like that, but you got to find the right value proportion, and if we could find that, we’d look across those, but they are just difficult to predict in advance, and once you start working on them, you generally can’t say much about them. I think the only other one would be, which I mentioned is the Campiche project, which is it’s pushed out a little bit, but that’s one that we were very concerned about. I think the good news there is we can reinitiate construction on that plant, which is partly built and that’s coming online. I think we’re seeing Ahmed, 2012. So 2012 we’ll get a little bit growth in that one also. But the M&A ones are just tough to predict and tough to communicate or telegraph in advance.

Understood. Thank you.

Gregg Orrill, your line is now open.

Thanks. I was wondering if you could talk a little bit more about capital return to shareholder as a regular idea. Whether it’s on your thought process on the dividend or in the event that you do complete the buyback this year. How would you think about that heading into next year.

Lee Cooper must have been talking to you. On the dividend question really is, would we see dividend in future. I think as we said in the past, we don’t think it make sense to be paying a dividend today, because we do have some growth opportunities. I think if you go out a couple of years though, I think we start to generate a lot of cash and whether or not we’ll see enough value accretive opportunities to deploy that cash, I think it’s very possibly that you could see or start to look at dividend as a meaningful way to do that. Right now our current free cash flow is about $400 million, and that’s the cash we have on hand after paying interest to all the corporate charges, but our objective is to really start to build that up, so it’s a meaningful amount and gives us plenty of cushion. Once we get to number that, where we feel more comfortable, I know it’s something that we at the Board level had been talking about, so I don’t think we are there today. We will clearly be at a point where we could do something like that in couple or three years and the real question is, at what point in time would we actually want to go do that. So we’ll keep looking at that and we are open to it, but it’s really our focus is to generate more current free cash flow, so we got the ability to comfortably put out a dividend that’s meaningful.

One of the things that mechanically we’ve also done and Gregg just to tell you about it, relative to the revolvers we went and renegotiated the terms of that. We were now allowed to from a basket transaction that will allow the cap to grow as apparent free cash flow grows as well. So it does give us the capability to get some of those projects online, apparent cash flow is growing. It also raises the capital to the amount you could actually be paying out under whether the stock buyback or a dividend distribution.

Yes. Thank you.

Your welcome. Why don’t we see and maybe taken one more question and then we could end this up, so we could get back to the day.

I show no questions at this time.

Okay. Well, then it’s perfect.

Well, thank you all again in attending this morning. If you have any questions, please feel free to call either Ms. Michael or myself. Thank you and have a nice day.