Good morning. My name is Elsa, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the AES Fourth Quarter and Full Year 2007 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. If you’d like to pose a question during this time, please press * then the number 1 on your telephone keypad. If you would like to withdraw your question, press the # key. Thank you. It is now my pleasure to turn the call over to your host, Mr. Ahmed Pasha, Vice President of Investor Relations. Sir, you may begin today’s conference.

Thank you. Good morning and welcome to AES Corporation’s Fourth Quarter and Year-End Earnings Call. Joining me today are our principal speakers Paul Hanrahan, President and Chief Executive Officer, Victoria Harker, Executive Vice President and Chief Financial Officer, and Andrés Gluski - Executive Vice President and Chief Operating Officer. Paul is joining us by phone due to travel. Victoria will provide an overview of our results and discussion of our outlook for 2008, followed by Paul, who will provide an update on our business development and our long-term forecast. Presentation that accompanies our financial review together with earnings press release and our 2007 10-K which were filed this morning is available on our website at www.aes.com. Let me remind you that our comments will include forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995. Any statements made here about future operating results or other future events are forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from such forward-looking statements. Our discussion of factors that could cause actual events or events to vary is contained in our filings and in the investor section of our website. Now I would like to turn the call over to Victoria.

Thanks Ahmed, and good morning everyone. As you've seen from our press release by now, 2007 was a very good year for AES, one in which we achieved record revenues, solid profits, and strong cash flow generation from our businesses. 2007 revenues were up 17% compared to 2006 and eclipsed the $13-billion mark for the first time ever. Consolidated operating cash flow and free cash flow were particularly strong at $2.4 billion and $1.5 billion respectively, resoundingly beating our expectations. We generated adjusted earnings per share of $1.02, which includes a 7-cent one-time tax charge related to a change in Mexican tax law which was referenced in our March 2, 2008, 8-K filing. We were also pleased with gross margin for the year, which totaled more than $3.4 billion despite severe gas curtailments and low hydrology in the Southern Cone. Our businesses in Chile and Argentina were particularly hard hit facing increased fuel costs and reduced volumes available throughout the second half of the year. We were able to dampen their overall financial impact to AES through improved operations in our existing North American and European businesses along with contributions from several new businesses which came online in 2007. In addition to the performance of existing operations, we also had a very good year with respect to the completion of a number of important transactions. As you know, we went to market in October 2007 with a planned debt offering of $500 million which was immediately up-sized to $2 billion to meet tremendous demand. This transaction added flexibility to our capital structure allowing us to use $1.4 billion to refinance secure debit with unsecured debt at lower interest rate, extended maturities, and locking in more favorable terms and conditions. We also sold a 10% interest in Gener, our generation business…

In India for example, you’ve got a 9% GDP growth rate in recent years. The Government of India estimates that there needs to be infrastructure investment at $350 billion over the next 5 to 7 years, and power demand is expected to grow by over 7% per year. The current projected needs are 80,000 MW in the next 5 years through 2012, and this represents approximately 60% of the current installed capacity of 135,000 MW. The Government of India has recognized that meeting demand for electricity is a potential bottleneck for growth of the economy. As a result they have put key incentives in place which include the allocation of coal mine reserves to potential power plant developers and they’ve made policy decisions including tax breaks and priority purchases of renewable power which have helped draw investments into that sector. In Chile, another country where we have been putting a lot of effort, we’ve seen annual GDP of 4% per year and annual demand growth in electricity is expected to grow at 6% per year, and additionally there is a need for security supply reasons to replace the existing natural-gas-fired capacity. The recent gas cut-offs from Argentina and the subsequent actions by the regulator which included the increasing of note prices by 45% in 2007, which Victoria referenced, have confirmed our view that there is near-term opportunity to add new capacity, particularly non-gas-fired capacity. Historically, the high marginal energy cost in the SIC which is the central grid in Chile and the SING which is the northern grid have been key indicators of the shortage of efficient generation capacity. In the central grid, the average marginal cost during 2007 was US $170 per MW hour compared to US $46 per MW hour in 2006, and this again reaffirms our view…

Thank you. The floor is now open for questions. If you do have a question, please press * followed by 1 on your telephone keypad at this time. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound key. Once again, that is * followed by 1 for any questions at this time. One moment while we poll for questions. Our first question is coming from Elizabeth Parrella with Merrill Lynch. Please go ahead. Elizabeth Parrella – Merrill Lynch: Thank you. Just to clarify, wanted to follow up something you said Paul. With respect to your base case growth assumptions, the 2000 MW that is currently under construction on core power type projects doesn’t count toward the 6500 MW, that’s correct – what counts is in terms of what you announced recently – is the Philippines acquisition and potentially South Africa if that actually goes to closing?

That’s correct. Elizabeth Parrella – Merrill Lynch: Okay, and with respect to the billion dollars that’ll be coming in from Kazakhstan – it sounds like what you’re indicating is you are going to take a conservative view on holding on to cash. It sounds like it is not likely or that we shouldn’t really be assuming that you go out and try to call the remaining senior secure debt that’s callable this spring.

Probably not. I think what we’re going do though is we are just going to continually evaluate the projects we have in front of us and the near-term investment needs, and how much liquidity we want to keep on hand to meet those needs. I think if we see a great opportunity, it could make sense to call some or all of those, but I wouldn’t put that in as our base case, but we’re always going to maintain that flexibility to do that if it looks like it’s the best use of funds at the time. Elizabeth Parrella – Merrill Lynch: Okay, alright. I think that would be it for now. Thank you.

Sure.

Thank you. Our next question is coming from Lasan Johong with RBC Capital Markets. Please go ahead.

Good morning. Just following up on Elizabeth’s question. You have over $2 billion in cash at year end ’07. You’ve got another billion at least coming in from Kazakhstan, and you’ve got probably something close to a billion and change, I believe, foreign free cash flow minimum. That’s quite a chunk of change to have on your balance sheet. What exactly would you be spending it on over the next several years, if you didn’t pay down debt? It doesn’t seem like you could effectively or efficiently use all that cash.

Lasan, this is Victoria. Just to clarify, the $2 billion is not all cash. It’s a billion in cash and a billion in credit facilities we have available to us.

Okay, but it’s still a lot of money.

Yes (laughs…), but in general we are currently looking at a pipeline that will effectively use large portions of that depending on what types of acquisitions, both in terms of greenfield opportunities as well as the new lines of business that we’re going into with wind and its capital requirements as well.

So, am I to assume that all the cash that you plan to generate should be earmarked for growth projects and not for any kind of debt repayments going forward?

I think as Paul said we obviously will continue to assess our options, particularly as we move into 2008. Given market volatility at this point, we want to make sure that we’ve got available cash and financing opportunities before we consider more optional debt paydown.

Then, can we assume that new equity issues are unlikely going forward for at least a couple of years?

I think we’ll have to continue to monitor the market and see what the opportunities look like. I’m not sure we want to close out any options right now.

Okay, and then in the Southern Cone, the gas shortage is starting to get really ugly over there. What kind of impact are you assessing for that in the 2008 guidance? Andrés Gluski: This is Andrés Gluski. We are assuming a continuation of the gas shortages in the Southern Cone, which basically affect Chile, to a lesser extent Argentina, and the Uruguaiana which have been impaired. We are assuming a continuation. However, the hydrology conditions are better at this moment than they were last year.

Okay, so the impact I think last year was 8 cents, so you expect that to be something less than that this year? Andrés Gluski: Again, basically we are saying that the situation would be similar to last year. Hydrology is better, and we’ve had the first two months of the year.

Organic growth rate – in the past, AES talked about organic growth rate being about 5% to 6% compound annual. Is that still true? Should we shift our focus slightly differently?

I would say and up to that amount. I think we are currently seeing closer to 4%.

Okay, thanks very much.

Thank you. Our next question is coming from Gregg Orrill of Lehman Brothers. Please go ahead.

Thanks a lot. I had two questions. The first one was on the status of the Brasiliana restructuring, sort of the right of first refusal on the purchase there, and then secondary on the ‘09 guidance. You provided a sectoral analysis there. The updated year was below your prior range, and I just talked around a few things including REGI and rising A&G costs, etc. I was wondering if you could just try to provide the same analysis for ’09? Andrés Gluski: Let’s talk about the Brasiliana auction. As you know, our partner BNDES is going through the process of bidding, having bids for its stake in Brasiliana. Currently, the process has been postponed. The indication from BNDES is that it would take place sometime in June. Situation remains the same—we have the first right of refusal. We are keeping our options open. We have local lines of credit in place, and we are also exploring possibilities with partners to exercise our first right of refusal.

In terms of the ’09 question that you had, a number of these factors Paul already referenced, but I’ll just give you the view of the lineup in terms of what we are seeing on the drivers. The cost of delay in the projects which are obviously impacting from a timing perspective more than anything else, given it pushes out past ’12 results as well, is about 5 cents. We also had as Paul referenced the lower sales in climate solutions in ’09—that was another 5 cents, and then the Pacgen lease, a New York lease buyouts were another 2 cents, and the REGI cost compliances Paul also referenced was about 3 cents which is an ongoing 3 cents per year from a cost mitigation standpoint, so those are the significant drivers of EPS relative to ’09.

Thank you.

Our next question is coming from B Brian J. Russo with Ladenburg Thalmann. Please go ahead.

Good morning. Most of my questions have been asked and answered. Just wondering what is the income tax rate assumed in the 2008 and beyond guidance.

It’s effectively about the same range from the low to mid 30s.

Thank you. Our last question is coming from [__________] of Deutsche Bank. Please go ahead. Unknown Analyst – Deutsche Bank: Good morning. The wind business appears to be growing pretty meaningfully in scale and in pipeline. It looks like your new target as you mentioned is not 2600 MW, and Paul I believe you also talked about 5000 MW in the pipeline, some of which of might overlap with the 2600, but do you have any interest in spinning or IPO’ing that business to highlight the value and fund future growth once the market stabilizes?

It’s a good question. I believe the previous question was what do you do with all that money. A big chunk of it is going into wind. What we’re finding in wind is that we are having to put the money down to buy the turbines well advance of starting construction, so it’s using up a fair amount of capital. So I think in the sense of portfolio management, looking to find other ways to finance that, that would not be 100% on us on us, would be an attractive way to do it, but only if we could see there is lower cost of capital out there to help us do that, or we can bring in somebody with some additional skills that could accomplish some other objectives, but something like an IPO and spinning it off to other parties who might be willing to provide capital and essentially a form of promote would be attractive to us, not so much to highlight the value but rather as a way to finance the investments to make sure we’ve got adequate capital, because I don’t want to put too much into buying the equipment because it’s not the most efficient way to do it. Over time, we could finance that out through tax equity in the US or other debt financings, but in the interim we are sort of stuck with a lot capital being put into that business. Unknown Analyst – Deutsche Bank: Okay, that’s helpful. On a separate topic. It sounds like for now you are not looking out taking out the $750 million of senior secured notes; you are going to continually evaluate that on an ongoing basis. My question is that that tranche of debt is what really stands in the way from a covenant perspective between you all being able to do some type of a stock buyback—you know I understand that your growth pipeline is very robust, but I’m trying to understand your interest in taking some of the excess cash from the sale and some of the free cash flow that’s generated and looking at buybacks instead of some of the greenfield investments. With the stock at $16 and change, effectively where it was in the beginning of 2006 over two years ago, I’m trying to understand why your stock isn’t also a very compelling investment opportunity with some of your cash flow.

That’s the tricky part. That really is the problem we’re facing in terms of thinking where do we put the cash, because the stock represents a great buyback opportunity, we think, but we also have other opportunities, and do we have enough to finance all of that, and that’s the tradeoff we are trying to make. We are thinking about it; we are constantly looking at it. If it weren’t for the fact we have to go and pay off those notes, it would be an easier decision, but having to put that much capital to paying down debt – clearly it starts to use up a lot of capital – and do we really want to really slow down our growth rate in order to achieve that? That’s the tradeoff we are trying to evaluate, so I don’t have all the answer to it, but it’s something we’re continually trying to balance, and as we see good growth opportunities, and what we don’t want to have to do is go out and buy back stock and then have to go out and reissue equity as a way to continue to grow the company, so that’s a tradeoff we’re looking at. Unknown Analyst – Deutsche Bank: Okay. As far as additional asset sales are concerned, you touched on that a little bit Paul. Are these assets that you are looking at sort of like Kazakhstan where the multiple in the private market or to another party is substantially greater than the multiple that your stock is trading at? Those are the types of things that you’ve identified in your portfolio that you might be interested in monetizing?

Well, we think about it more along the lines of looking at the cash flows coming from the business—the DCF value. What’s the value of the business to us, and what would somebody else be willing to pay, and I think particularly where we have gotten operations to a point where we can’t really do a whole lot more to increase the value of the asset or where we look at the market and say holding this asset doesn’t particularly give us any insights or advantages to expanding our growth pipeline. Those are the kinds of things we look at trading out of. Not so much looking at the multiples as much as it is the whole value has had. If somebody is willing to pay something that might be 20% higher than that, and no strategic value, those are the ones that will be easier for us to trade out of, but where there is some significant value in holding them, for example in Chile, we don’t want to leave the Chilean market because there are a lot of good growth opportunities there. We might trade out of bits and pieces of it over time, but we still want to maintain a controlled position there. Kazakhstan, we still like the market, but there was an opportunity to maintain our position in the market without having to hold all those assets. That’s another way we looked at trading out of a couple of those assets in order to get some capital and keep growing the company. Unknown Analyst – Deutsche Bank: Okay. Thank you very much.

Okay. At this time, I’d like to turn the floor back over to Ahmed Pasha for any final remarks.

Thank you, and I want to say thank you very much everyone for participating today. If you have any followup questions, please do not hesitate to contact either Michael Cranna or myself in Investor Relations. Any media enquiries should be directed to Robin Pence. Thanks very much, and have a nice day!

Thank you. That concludes our teleconference. You may disconnect your lines at this time and have a wonderful day!