Good morning and welcome to the AES Corporation Q1 2021 Financial Review Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I now like to turn the conference over to Ahmed Pasha, Chief Treasurer and Vice President of Investor Relations. Thank you and over to you.

Thank you, Operator. Good morning and welcome to our first quarter 2021 financial review call. Our press release, presentation and related financial information are available on our website at aes.com. Today, we will be making forward-looking statements during the call. There are many factors that may cause future results to differ materially from these statements, which are discussed in our most recent 10-K and 10-Q filed with the SEC. Reconciliations between GAAP and non-GAAP financial measures can also be found on our website along with the presentation. Joining me this morning are Andrés Gluski, our President and Chief Executive Officer; Gustavo Pimenta, our Chief Financial Officer and other senior members of our management team. With that, I will turn the call over to Andrés. Andrés? Andrés Gluski: Good morning, everyone, and thank you for joining our first quarter financial review call. Our first quarter results put us on track to achieve our 2021 guidance and 7% to 9% average annual growth through 2025. Gustavo will provide more color on our financial results later in the call. As we spoke about on our Investor Day in early March, we see a great opportunity for growth. Given the momentum is changes in our sector. And we are very well positioned to capitalize on the shift to low carbon sources of energy. Over the past five years we have transformed our company to be a leader in renewable and we have invested in innovative technologies that will give us a competitive advantage for many years to come. Although it has been less than two months since our Investor Day we had a number of significant achievements to announce, including a landmark deal with Google which I will describe in more detail later. A strategic collaboration to develop new battery technologies between Fluence and…

Thanks Andrés and good morning everyone. As Andrés mentioned, we are off to a good start this year having already achieved significant milestones towards the strategic and financial objectives that we discussed on our Investor Day. We are also encouraged by the continued economic recovery across our markets with demand in line with pre-COVID levels. Turning to our financial results for the quarter. As you can see on Slide 16 adjusted pre-tax contribution or B2C was $247 million for the quarter which was very much in line with our expectations and similar to last year's performance. I'll discuss the key drivers of our first quarter results and outlook for the year in the following slides. Turning to Slide 17 adjusted EPS for the quarter was $0.28 versus $0.29 last year. With adjusted PTC essentially flat. The $0.01 decrease in adjusted EPS was the result of a slightly higher effective tax rate this quarter. In the US and utilities, the Strategic Business Units or SBU, PTC was down $27 million driven primarily by a lower contribution from our legacy units at Southland and higher spend in our clean energy business as we accelerate our development pipeline given the growing market opportunities. There is impacts were partially offset by the benefits from the commencement of PPAs at the Southland energy combined cycle gas turbines or CCGTs. At our South America SBU, B2C was down $31 million mostly driven by lower contributions from AES Andes [ph] formerly known as AES Hamer [ph], due to higher interest expense and lower equity earnings from the Guacolda plant in Chile. These impacts were partially offset by higher generation at the Chivor or hydro plant in Colombia. Lower PTC at our Mexico Central America and the Caribbean or MCC, as we primarily reflects outages at two facilities…

[Operator Instructions] The first question is from the line of Richard Sunderland from JP Morgan. Please go ahead.

Hi, good morning. Thanks for taking my questions. Just wanted to start off on the North agreement and what it could be the Fluence and maybe the energy storage market more broadly and kind of curious on the development front itself is this more sort of iterative development work or further up the installment curve? Andrés Gluski : Yes, that's a great question. This is really a landmark agreement as we move to essentially have strategic relationships with battery manufacturers. So Northvolt is building a new plant in Sweden. And in Poland and we will have one train of the plant in Poland producing batteries for us. So as this market expands and as you have a real growth in demand this assures battery supply for one of our markets. And also I would say Europe, Middle East, Africa and in addition, we will not only have supply of batteries and again dedicated train to us, but we will also be working with Northvolt. So you have the new developments in battery. So in terms as battery technology develops as you have better chemistry, as we say fine-tune our cube stacked design. We will have joint development of additional improve batteries on multiple fronts. So this is a, I think, a very interesting development of getting a little bit more involved, that's a one-step prior to just being the integrator and providing the control softwares.

Got it, thank you for the color. And then, separately, thinking about this Google deal, you would have the ability to replicate that with other C&I customers, I know you mentioned some interest already. And I guess curious alongside that's some aspects around the agreement itself, whether you -- this is about having the right assets and the right location to procure or, you know, about the energy kind of management angle as well. Andrés Gluski: Or, you know, it's both in a sense, so let me take the second part first, explain a little bit what the product is. So the product really -- that the key point is that we're netting on an hourly basis, a, you know, carbon-free energy. So, this is -- you know, most contracts. Prior to this, virtually all, are really netting, you know, to be on a yearly basis could be, et cetera. So you have an excess purchases of renewables during certain hours, but you're actually using non-renewables during other hours, obviously, when you don't have the production of the renewables. This is actually saying, "You know, on an hourly basis, the energy that I'm getting is carbon free." So you ask -- you know the right question it's not just a question of, you know, having overbuild solar or overbuilt wind, it's really how do you manage these different sources of energy, you know, not only to ensure that it's carbon free, but to minimize the cost? So you know, when are you buying -- When are you using wind? When are you using solar? And the real key to make this happen is adding hydro -- small hydros and adding, of course, battery storage? So it's really how do you optimize multiple uses of -- multiple sources of renewable energy to provide the lowest cost guaranteed carbon-free energy netted on an hourly basis? So behind this offer, there's a lot of math, a lot of algorithms, a lot of risk management. And we think that, you know, this is a deal that with Google itself, you know, we had a $1 billion -- I sorry, one gigawatts agreement to the first 500 and we expect it to grow as demand in these data center grows. But, of course, there are other corporate clients that are interested in this. And you know, we've seen interest from. So as people, I would say up their environmental goals, and saying, well, we're going to be net zero carbon emissions on a global scale, and really having an hourly netting. This is really the only product on the market. So, of course, those companies that have the highest environmental standards are interested in this product. So it's a -- we think, a very interesting development, and one that we expect to replicate with multiple clients.

Great. Thank you for the time today.

Thank you. Next question comes from Durgesh Chopra from Evercore ISI. Please go ahead.

Hey. Good morning, team. Thanks for taking my question. Maybe just -- I wanted to start with the 0.21 target. You know, Analyst Day, you guys were targeting three to four gigawatts of PPAs this year. And now it sort of seems like it's 4 [ph]. I just want to make sure I'm understanding that correctly. Is that just because you had a strong start? And now you're expecting 4 instead of 24 [ph] at the Analyst Day? Andrés Gluski: But, yes, I mean, we did three in 2019 and 2020. We're seeing a strong start, you know, not only inside PPAs, but the deals we have in progress. So we feel sufficiently confident to say that, you know, we expect to be at the upper end of our initial guidance range of 3 or 4 [ph]. So we expect to be and four gigawatts of new renewable PPAs signed in 2021.

That's perfect. Thank you for clarifying that, Andrés. Maybe this -- can I get your thoughts on competition. And there's, obviously, there's all a lot of us, sort of domestic players in the market. You're seeing a lot of international competition. Maybe just any thoughts as you sort of compete with these PPAs, what's the competition like and sort of, you know, what's your competitive advantage? Andrés Gluski: All -- we do see, you know, a lot of competition out there in the market. Our strategy has been to offer more value to our clients. So we don't want to just compete for commoditized, you know, thus, far, renewable PPAs. So we have several competitive advantages. And, of course, with our knowledge of energy storage, you know, we have been really a leader in the new applications for energy storage, not only through influence in terms of the new design, but you know, A.I., bidding -- enabled bidding engines, and how do we combine them? So, the Google deal is a perfect example of how we brought together multiple energy sources -- renewable energy sources, and provided a unique product to a very demanding client. So that's our angle. Our angle is really you know, how we bring these things together? How we create more value for the client? And I think very importantly, is that we co-create with our clients. So this was a joint project with Google that, you know, reflects more than a year's work. It's just like what we did in Kauai, what was really sort of the first sort of 24/7 solar energy storage product offering. We co-developed it with the Kauai Island utility cooperative. So that's our unique angle. So again, we see more deals like this Google deal, and more ways of working…

That's great. Thank you for that color, Andrés. Lots of exciting talk. I'll jump back in the queue. Thanks for the time. Andrés Gluski: Thank you.

Thank you. The next question is from the mind of Stephen Byrd from Morgan Stanley. Please go ahead.

Hey, good morning. Andrés Gluski: Good morning, Steve.

Wanted to talk through supply chain stresses. We regularly get questions just throughout the whole renewables value chain about, you know, shortages, cost increases, et cetera, and I respect that sort of the Northvolt agreement is one example of many ways that you've, you know, ensure availability. But, I guess, broadly put across, you know, solar, across the balance of system class stores, et cetera. Are you seeing any stresses on supply chain for you all any impacts from that broadly? Andrés Gluski: No, that's a great question. And as you know, we've been, I think, always very concerned about this. You know, when we talk to, you know, beginning of last year, about COVID at the time, and we said look, you know, we were concerned about supply from Asia, and you know, the possible effects of COVID on the supply chain, even here in the States. So, you know, we've been on top of this. But right now we're not seeing any real supply constraints, whether it be on batteries, whether it be on solar panels, whether we see on wind turbines. However, if you look at the growth plans that are reflected in, for example, the Biden's renewable energy agenda. And you see what utilities are talking about, they're seeing a dramatic increase in demand. And we think that that could be a problem in the future. So we're getting out ahead of this. And, you know, I think, you know, it's not only the physical supplies that, you know, we're talking about. But it could be things like land, for example, you know, how many megawatts of readily available land is there to meet this great need. So right now, we're not seeing it safe. But we're on top of it. And that's what we're making the kind of strategic agreements like Northvolt. You know, expect more, I would say because that, we think, is a key element. And we expect this market to grow very rapidly. And we think you have to be thinking about that now, at all angles, whether it be people, you know, land interconnections? I don't see -- and I think we've spoken about it in the past, you know, energy storage, playing a role in eliminating transmission constraints. So that's an exciting new area that needs to be developed. And really, isn't that. So getting to your answer, we're not seeing it today. We're on top of it. I do expect there to be a pinch if sometime in the future, when I don't know, you know, going to be 12 months could be 18 months. But we're preparing for that possibility.

That's really helpful. And maybe shifting gears to 5B, you know, you've spoken about this before. You laid it out again today. And I'm just curious, your latest thoughts in terms of as you think about the growth of a 5B, whether that this is going to be is there a potential given just how beneficial this approach is that this is something that's similar to other technologies you develop that you can broadly monetize, broadly market and sell? Or is this something more for your own purposes over time? How like -- how broad could this be? And is this another candidate that could be monetized over time? Andrés Gluski: You know I love the question. So you know, we've had -- my counting four unicorns, you know, small companies, in fact with more than $1 billion valuation. I think our secret sauce has been to buy small companies. And then some of them we bought for, you know, $20 million, $30 million, initial investment, and now are worth more than $1 billion. And what's the secret sauce? The secret sauce really is -- one, we give them a platform for massive expansion; two, we work with them to create new applications. So we're not just a client, it's like we are co-developing and creating new uses for this technology. So we allow it to grow fast, we allow it to grow new areas. But equally important, we're able to keep the entrepreneurial spirit of these businesses. So in other words, even though we're a big company, we make a real effort not to smother them, you know, and let them run as much as possible on their own. Now, we made a philosophical decision years ago, that just to use it on our own platform, while that gives…

Really helpful. Thanks so much.

The next question is from the line of David Peters from Wolfe Research. Please go ahead.

Hey, good morning guys. I was just curious on the strategic alliance with Google, are you guys still working on similar agreements and locations beyond Virginia. I guess I'm just wondering how far you expect kind of the scope of that particular dealer Alliance to reach? Andrés Gluski : What I can say is really that we had an initial agreement, which we had talked about that we really the sort of RFP for one gigawatt that has, I would say developed if you willing to the deal that we have announced. We expect to expansion of that energy provided over time as their needs grow and again, we have this unique product that we will offer to then and other clients at this stage in time. So that's all I really can say at this stage of the game.

Okay. And then maybe just on some of the other products you have in the works. Is there been any updates on the hydrogen study in Chile or we're in Vietnam, the LNG and CCGT projects, I guess since Investor Day. Andrés Gluski : Look regarding first the green hydrogen really green ammonia project in Chile. We continue to work with our partner on the feasibility study. So where it goes on and as I said, we'll probably have news before the end of the year one way or the other. So it's really a matter of, can we get the cost down to be competitive with grey or blue hydrogen products. So I'm optimistic, we're working hard, stay tuned. Regarding Vietnam. It's the same thing. We continue to work towards a new LNG terminal, which would be 450 or so Terra BTUs. So, more than double what we have between Panama and the Dominican Republic, and there is an associated 0.2 gig watts of combined cycle gas plants. So not that progress continues on that were part of the government's plan realize at this facility will avoid the construction of many, many coal plants, and I also mentioned that we will be as soon as feasible moving towards, providing green hydrogen, which basically means that it certified that it doesn't, it has less a certain amount of leakage from production to delivery, and we think that's very important to really reap the climate advantages of natural gas versus say other heavy fossil fuels.

Great, thank you for your time.

Thank you. The next question is from the line of Charles Fishman from Morningstar. Please go ahead.

Good morning, Andreas. I wanted to follow up on that Vietnam questions first of all recent strength then crude oil prices help you in the development of that project in Vietnam. I would think. I appreciate there is some coal plants there but it is in a lot of the competition, or at least that you'd be replacing residual fuel for power generation in that region. And yes the strength of the crude oil price help in that? Andrés Gluski : Our RLNG business is really tolling in Central America and the Caribbean. So we get a tolling fee. We're not taking direct commodity risk now of course the bigger the spread between Henry Hub and world oil prices especially WTI, the more tolling will do at the margins in a lot of these take-or-pay agreements. So what we've announced is take or pay. So we're not so directly affect but all things being equal, a bigger spread between natural gas and oil is favorable, will do at the margin, some more. In Vietnam this is a project which is very much needed because they had been relying on offshore gas and that's running out, so this will, it has an immediate demand unlike say Dominican Republic and Panama, where we had to develop to demand [ph]. So you have to bring in gas to feed the existing combined cycles. So I really don't see it as much as directly as oil price gas play. Again at the margin, you could have more industries converter more transportation convert to compressed natural gas or other forms, but not really. These were tolling agreements and in Vietnam, the demand is there, it doesn't have to be created but again, as [indiscernible].

As I recall, the Vietnam project doesn't enter into the 7.9% through 2025 that's really 25 events and beyond correct? Andrés Gluski : That's correct?

Okay, thank you. That's all I have.

Thank you. Ladies and gentlemen, this concludes our question-and-answer session. I would like turn the conference back to Ahmed Pasha for closing comments. Please go ahead.

Thank you everybody for joining us on today's call. As always, the IR team will be available to answer any follow-up questions you may have. Thanks again and have a great day.

Thank you very much, ladies and gentlemen, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Thank you.