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

Thank you, Operator. Good morning and welcome to our second 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 second quarter financial review call. Today I will discuss our progress today on a number of key strategic objectives. Before turning the call over to our CFO, Gustavo Pimenta, to discuss our financial results in more detail. We had an excellent second quarter with a 24% increase in adjusted EPS from the second quarter of 2020. And a record 1.8 gigawatts of renewables under long-term contracts added to our backlog, bringing our total to 8.5 gigawatts. We remain on track to achieve 7% to 9% average annual growth in adjusted EPS and parent-free cash flow through 2025. I will give more color on our accomplishments while covering the following three themes shown on slide four. One, the growth and transformation of our U.S. utilities; two, our rapidly growing renewables business; and three, our strategic advantage from innovation. As you may recall, during our Investor Day in March, we outlined our plan to invest $2.3 billion to transform our two U.S. utilities, AES Ohio and…

Thank you, Andrés and good morning everyone. As Andrés mentioned, we are making excellent progress this year. Having already achieved significant milestones on our strategic and financial objectives. We are pleased to see the continued economic recovery across our markets driven by the reopening of local economies. In Latin America, many of our clients continue to benefit from records steel, copper and soybean prices, resulting in a significant improvement in electricity demand across our businesses. This also reflect in our day sales outstanding, which remain at a historically low levels. Turning to our financial results for the second quarter on Slide 17. Adjusted EPS was up 24% to $0.31, primarily reflecting execution on our growth plan, demand recovery at our U.S. utilities and parent interest savings. This positive drivers were partially offset by lower contributions from Chile and Brazil, and a slightly higher adjusted tax rate. Turning to Slide 18, adjusted pre-tax contribution or PTC was $303 million for the quarter, an increase of $65 million versus the second quarter of 2020. I will discuss the key drivers of our second quarter results in more detail beginning on Slide 19. In the U.S. and utilities strategic business units or SBU, PTC was up $71 million, driven primarily by the demand recovery that our utilities, higher contributions for about one gigawatts of new renewable assets and the commencement of power purchase agreements or PPAs at Southland Energy in California. Turning to Slide 20, we are very encouraged to see material recovery consistent demand at our U.S. utilities. For Q2 on a weather normalized basis, demand at AES Ohio is up 9% and demand at AES Indiana is up 4%. The net combined volume in Ohio and Indiana is largely back to 2019 pre-COVID levels. This recovery is mainly driven by higher…

We will now begin the question-and-answer session. [Operator Instructions] And the first question comes from Julien Dumoulin Smith from Bank of America.

Congratulations on developments year-to-date. I am very curious on the latest on the battery business and some of the strategic angles you're thinking about here. Can you talk about what's evolved around Fluence given the latest comments here? And then also at the same time, can you comment a little bit on the storage availability, I know you all have been making or taking some preemptive actions to ensure continued supply availability. But if you can comment on the latest backdrop would very much appreciated. Andrés Gluski: Sure. Well, good morning, Julien. There's not too much I can comment other than the statement in our press release. In the past, I've talked about it that ensuring supply was very important to us and we have mentioned the strategic arrangement with Northvolt for European supply. So as I said in the call today, overall we feel very good about being able to have access to the equipment we need for our growth program, but I really can't comment much more on Fluence at this time.

Julien, are you there?

Julien, your line is still open. The next question comes from Angie Storozynski from Evercore ISI.

So I'm just wondering, what is the reason for this acceleration in the renewable power generation that we're seeing year-to-date? Is it just because you're increasingly focused on C&I customers? Hence the higher than expected backlog year-to-date? Andrés Gluski: Hi, Angie. That's a great question. I would say yes, as you can see, where we're focusing a lot on C&I. We have come up with innovative products, like the around the clock, carbon free energy. So as we mentioned in my speech, we have 1.5 gigawatts of new contracts just coming from similar products, to the one that we had announced with Google. So certainly, that is a big driver. The other thing of course, is we have a good pipeline of potential projects. So we're just finding that we're working very well with our clients, we have many repeat clients in terms of signing on new deals. So this second quarter was particularly strong in the U.S. And we see that as the most rapidly growing market. We're very well placed. So we feel good about it, we feel good about the product offerings that we have -- we feel good about our customer relations, and we feel good about our supply chain.

Okay. And secondly, I mean, it seems like you guys are starting to do projects, which I mean, you don't typically pursue like repowering of the wind farms in New York State, or the acquisition of renewable assets in Indiana from NextEra. I mean, is it just because, those are opportunistic deals that offer highest returns and those are not that traditional ground mount solar installations that you would physically pursue? Andrés Gluski: Look, we're focused on satisfying our customers' needs, in this particular case, yes, Indiana. So if there was a better project in MISO that we need to put together to meet our transition towards more renewables. We will take it. So in many of our deals, we use a lot of required additionality. So we're building most of them. But there's no problem with acquiring somebody else's project to get the optimal mix from a risk. And also, I'd say production capability. So first, that's something that's inherent in our product offering. So we're really trying to solve the client's need. It's much less about sort of RFPs and busbar PPAs, that's what we're going after. In the case of New York, look, look, we don't have a lot of wind assets of ourselves. Other people have done a lot of wind assets repowering. We think this is an idea that the time has come with the technology. So we're doing some repowering on our old wind farms. But we saw this is a great opportunity in New York to repower. And again, this comes back to the idea that we want a mix of assets; wind, solar, energy storage, in some cases, even small hydro's to be able to deliver those sort of round the clock renewables. So think of it that way that, we're solving for what the customer wants. And we'll put the package of sources, whether we build them or we buy somebody else's project to satisfy that.

Yes, very good. Again, an incredible start of the year. Thank you.

And the next question comes from Durgesh Chopra from Evercore ISI.

Andrés, I appreciate you can't say much about points, but maybe I'm just kind of curious on the timing of the announcement here. So QIA sort of made their investment late last year. Are you seeing more growth opportunity, just walk us through some of your thought process and why now versus wait a couple of years, just anything along those lines? Andrés Gluski: Honestly, I can't comment much on it. What I can refer you to what I've said in the past. And with QIA, I would say it's just not a financial investor. It's a strategic investment, which has investments in other very important companies, which can help this business. So I'll have to limit my comments to that, and I'm sorry.

Okay. We'll leave that. Maybe just shifting gears to Chile. The last time, I remember there were some legislations on early retirements, you guys have kind of retired your coal plants. Can you talk about your exposure there as a percentage of the company as a whole, post the announcement of these coal retirements? And do you see any risks to margins and cash flow there in July? Andrés Gluski: Look, overall, Chile is maybe like 15%. Remember that's AES Andes includes Colombia and includes 100%, renewable hydro in Colombia. AES Andes has done a remarkable transformation in terms of being a primarily coal -- contracted coal generator into by 2025, having very little coal. And a lot of green blend and extent, so this really gave us an in, was the ability to modify those contracts. So that a large proportion, if not, the majority of the energy would come from new contracted renewables, and you keep the coal for capacity. So this is, again, quite a remarkable transformation. So the last thing I would say is, regarding the potential legislation that's been -- I think, it's really, Chile is a serious country, they're really looking at how the grid can maintain its reliability with the retirement of these coal plants. So what we said is, look, we are willing to retire these plants, as soon as 2025 is really to give the grid operator the opportunity to have -- to ensure a reliable grid, we can shut them down sooner from our perspective. So I don't see, everything that we're doing is in our forecast, I'll pass it to Gustavo to make some more comments.

Yes. I guess I think the one thing that I would add is, after they announced retirement, the latest one that we've done, we are left with just two facilities for green blend and extend and retirement. So it's about 800 megawatt left and everything else has been announced. We've been able to implement green blend and an extent. So it's a substantially smaller share of where we were in there a couple years ago.

Got it. Sounds like a small portion of EBITDA cashflow, earnings, whatever comes from [July] [ph] post these retirements. Okay, thanks, guys. Great execution in the backlog and congratulations on getting [indiscernible] on the Board here.

[Operator Instructions] The next question comes from Biju Perincheril with Susquehanna.

Hi, good morning. Thanks for taking my question. Andrés, you touched on some of the supply chain concerns, I was wondering if you could talk a little bit about, how you might be impacted from the Hoshin, WRO, and maybe some of the steps you're taking to mitigate that impact? Andrés Gluski: Yes, great question. Look, some of you, who follow us for a while, we're always very paranoid about our supply chain. That's why I think it was January of '20 -- February of 2020. We were talking about supply chain issues with COVID and how we're going to get ahead of it. So here, we've also been on top of this, they're obviously in the past year, there were supply chain issues with, imports, what was going to be the tariff on panels from China. And then, what was going to be the tariff, for example, on aluminum. So, could you manufacture locally? So we've been on top of this issue. So today, I'd say all of our solar panels coming into the states are not coming in from China, they're coming in from Malaysia. We do buy some U.S. panels as well, which are non-polysilicon. We're also working with top-notch -- only top-notch panel manufacturers, first tier and getting certificate so that none of the polysilicon comes from Hoshin, they could be associated in any way with forced labor. So that's where we are. This is a developing story. In the past what we've been able to do with the tariffs for example is to move panels that were coming to the stage, for example to Chile, and vice versa, to optimize the supply chain, so which quite frankly worked out very well. So if you look at what we're doing. We are certainly in solar, one of the top five, I would say in the country, in terms of new solar development. So we're very well positioned. We're on top of that. We have longstanding agreements and our suppliers are doing everything possible. I think I could add that in the future, we're going to -- we're making sure that the polysilicon would come from alternative sources like Germany or Korea. So that's in the works. But this does take a transition. So we're on top of that. And stay tuned, because, while we feel very good about our certification and all the rest it's a question of where does that polysilicon arrive? Can you prove it? So again, we are having as extensive affidavits from our suppliers as anybody on this matter.

This concludes our question-and-answer session. I would like to turn the conference back over to Ahmed Pasha for any closing.

Thanks 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 and have a nice day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.