Good morning. My name is Elsa and I will be your conference operator today. At this time I would like to welcome everyone to the AES first quarter 2008 Earnings Call. All lines have been placed on mute to provide any background noise. After the speaker's noise there will be a question-and-session period. (Operator Instructions). It is now my pleasure to turn the floor over to your host, Ahmed Pasha. Sir, you may begin.

Thanks, Elsa. Good morning, everyone, and welcome to our First quarter 2008 earnings conference call. Joining me today are Paul Hanrahan, President and Chief Executive Officer; Victoria Harker, Executive Vice President and Chief Financial Officer; and Andres Gluski, Executive Vice President and Chief Operating Officer. Paul will begin today's discussion by providing a general overview of the quarter. Victoria will provide few more detail and analysis on the quarter results. Following Victoria, Paul will provide an update on some of our growth initiatives. Before we begin this morning's call, I would like to remind you that any statements made herein 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 reserves or events to vary is contained in our filings and in the Investor Section of our website www.aes.com. And now, I would like to turn the call over to Victoria.

Thanks, Ahmed. I am going to go ahead and leave up. Good morning, everybody. We had good first quarter with adjusted EPS of $0.39 per share versus $0.24 per share in Q1 of last year. Our results were ahead of expectations caused by some unexpected factors such in as the Southern Cone in Latin America, where the combined effects of gas and hydrological conditions in Chile and Argentina led to high power prices allowing our portfolio plans throughout the region to capitalize on these conditions. We also adjusted the timing of certain outrages in the region to take advantage of this attractive power prices. We do not foresee, however, the few circumstances will continue throughout the year. However, if these trends continue through the second quarter, we believe there could be some upside to our existing guidance. We'll continue to evaluate throughout the second quarter and update our guidance if and when appropriate. We'll also continue to make some substantial progress in the development of our growth pipeline in the three areas of strategic focus for us, those being core power, renewables and climate solutions. I'll talk about our progress in more detail after Victoria Harker, our CFO covers the financial results. Before turning over to Victoria, I would like to comment and how we think about allocating capital and how we might source this capital. With the number of attractive investment opportunities available around the globe, how we allocate capital and how we fund these investments becomes increasingly important. To some extent having more opportunities in capital is a good way of imposing discipline on us to select the best of the available opportunities. And each investment opportunity has to compete against all uses of capital including potentially paying down debt or returning cash to shareholders to stock buybacks.…

Thanks, Paul and good morning to everyone. As you've heard from Paul already, we had very strong first quarter, generating GAAP earnings of $0.34 a share and adjusted earnings of $0.39 a share with most key financial metric showing significant improvement year-over-year. During the quarter, there were several dynamics in play that caused this. We benefited from strengthening operations across the global portfolio of businesses particularly in generation businesses in both Latin America and in Europe. In addition, our Latin America and European generation segments revenue benefited from both higher spot and contract prices as well as higher volumes due to increased demand in those geographies. And also, not unexpectedly, with so much of our revenue is now generated overseas, FX was a contributor in many locations. All of these trends seem to be moving in the right direction for us. In addition, our portfolio management activities have gained momentum. We're making significant progress in completing the sale of our Northern Kazakhstan businesses and expect this transaction to close later this quarter. Going forward, we will report only the management fee income from these businesses during the term of our three-year contract. We also expect to close the sale of the oil-fired Hefei plant in China in third quarter 2008. Net-net, these four elements drove better than expected results in the quarter, as we continue our focus on execution. Now, to the details of the quarter. Revenue in the first quarter increased by 33% to $4.1 billion. Approximately one-fourth of that growth was attributable to favorable foreign currency rates while the remainder was due primarily to higher tariff, fuel price pass-throughs, and increased volumes in our Latin American, Asian, and European generation businesses. Year-over-year, we also benefited from a full quarter of operations from the TEG and TEP plants in…

Thanks Victoria. I would like to take couple of minutes and just walk through some of the progress we made in the development activities, developing our pipeline, and as I mentioned, we've made some good progress there. In the core power business, we completed the acquisition of the 660 megawatt Masinloc coal-fired power plant in the Phillipines. As we've mentioned in the past, this plant was originally built with much of the infrastructure needed to double the size of the plant in a country that desperately needs core capacity is heavily reliant on oil for generation today. So building a second plant is a very real option for us. It's also worth noting that we were able to fund 60% of the acquisition of this plant with long-term non-recourse debt. So the project finance market has remained robust for us. In Chile, as we've mentioned in the past, we've been developing several power projects. One of these called the Angamos plant is a 520 megawatt coal plan in the Northern grid, where most of the copper production occurs. During the first quarter, we signed a 15-year PPA for 370 megawatts with one of the largest copper producers in Chile. We also had an EPC contract finalized which allowed our business in Chile called Gener to move forward and to start construction last month. This is also in addition to another 270 megawatt project in the Central grid of Chile, which is an expansion of our Ventanas facility, which also began construction in April. Thus, we've moved 1,450 megawatts of generating capacity from the development phase to the construction or operations phases since we last spoke of you. In our renewables businesses, we also had a few accomplishments. In wind, we acquired a 67 megawatt wind farm in California, where we…

(Operator Instructions). Our first question is coming from Lasan Johong with RBC Capital Markets. Please go ahead.

Thank you. Good morning.

Good morning.

First of all, nice quarter. Can you give us an update on what's going on with the right of first refusal at Eletropaulo. I heard you guys said last time June might be the time when you guys said last time in June, might be the time when you guys revisit the market. Is that still on track?

Yeah. I think it's a little bit uncertain but Andres Gluski who is here, Chief Operating Officer. He's been working on this very closely and can give you the latest from Brazil.

Sure. The decision of when the auction or sale will take place as BNDES's, which is our partner Braziliana. So it's the sale of the position in Braziliana which includes Tiete, it also includes Uruguaiana. We think that it will probably take place toward the end of the second quarter beginning of the third. We continue to be interested in exercising our right of first refusal. We have in place local financing. We also have interest from local partners as well. So we feel we're in a very good position. But in terms of the exact timing, this is really up to BNDES.

Okay. Paul, I know you've got a big pipeline working, but probably development projects, but you haven't updated us with kind of like a global picture of how much you have in the pipe, what's in development, what's imminently signable. Can you give us big broad strokes of those kind of pictures?

So I think, I went through that in the last quarter call, and I don't want to go through it all again.

Well, nothing has changed, you say.

Nothing's changed. I mean I think it continues to look good. We're moving the projects forward in Chile with the other progress we're making, and it makes me think it's very achievable. What we will be doing though, we've heard from a number of investors, including you, what people are looking for is more of an update on these various projects. So what we'll be doing going forward, is providing a little bit more detail, maybe to one of the investor conferences we'll have an opportunity to do this, that are coming up. And in our calls, we'll provide more detail on the specifics but since we last updated you, it looks pretty much the same and I think we're on track to hit those targets.

Great. Victoria, when do you expect to go the external testing?

I am sorry, for what?

For the systems and the accounting and everything.

We have remediated all, but two of our material weaknesses. We have the legal entity sensing schedule for the summertime, so essentially next quarter. And we are continuing to work through the contract remediation, which we actually had teed up for testing at the end of this quarter. So we will continue to good progress on that. My expectation is that we will be completed with both by year end.

Both as an internal and external testing by year end?

Yes.

Okay. Paul, do you have any plans to go marketing outside of the one or two conferences you usually do in a year?

Yes. I think now that our financial systems -- I think as you can see, we're getting a little bit better getting our numbers out in time. I think give us more flexibility to go out and talk to people. So it really is our intention for Victoria, me and Ahmed to get out to the various locations and talk to people and give more of an update. Especially, because we have so much in our growth pipeline I think for us to really get credit for all the development that's going on, we're going to need to communicate with people very clearly. And let people know how that progress is going. Because I think that's what people are waiting to see what the stock price is. How we're doing in terms of executing on that development pipeline? And that's what I think we're going to need to as a catalyst to move the stock. So that's why it's going be important for us to get out and talk with people.

Couldn't agree with you more. I think there is only last issue for me, my understanding of the Southern Cone situation is that more or less what you're telling us is last year when this happened. Power prices were not high enough to take advantage of. This year, you did. Going forward there might be some more benefits in the second quarter but you're waiting to monitor it and there might be an adjustment to guidance now. Last time you had given us guidance, it was a spot guidance of $1.14. Previously, it was a range of $1.12 to $1.20. Are we talking about busting through the $1.14 or are we talking about moving up the range from $1.12 to $1.20 to something else.

I will have Andres talk a little bit about the hydrology gas situation in Argentina and Chile, because it's more complicated than what it appeared first. But, I think, what we are seeing right now, is we are not adjusting guidance. And right now we've seen prices start to come down in Argentina and Chile. But they are still higher than we would have expected at this point. We also have some other factors out there, with respect to coal prices, with some of our plants, that aren’t completely hedged, where we have seen movement in coal prices which could have a negative impact on the future. Right now as we are saying, we are not adjusting guidance. By the end of the second quarter, we have a better feel for how it looks for the year. But really, we would be talking with reference to the $14 possibly having some upside

Got it, understood.

Let me have Andres, maybe he could just explain what's happening in Chile and Argentina?

I think to understand the situation in Chile, if it's a very dry year, like this year, it allows us to run more of our plant and take advantage of high spot prices. If it's a mildly dry year, then the prices aren’t high enough to operate them at a less efficient price. So that's was the situation last year. In addition, last year as you know, we had our CPSN plant, unit number 5 out for two crucial months, during the winter months of the Southern Cone. So, obviously we are operating better this year. The conditions are drier in Chile and that's more favorable to us. However, we as winter comes into Southern Cone more of cutoff in gas prices. And spike that we had in prices in the Brazilian and in Chilean markets in the end of the year 2007, beginning of this quarter have normalized. So we expect to go back to a more normal situation in future months.

And I would just like to add to what Andres said. It's more of a generic comment about our business. In many places you are seeing more volatility in power prices, and that's particularly true with different fuels having price volatility. The importance of having high availability, of having good operations is been driven home to us. I think that became clear really over the past few years, and the efforts of Andres, Dave Key and other Regional Presidents to upgrade the availability of plants has been a big focus for us over the last few years. You have seen our maintenance CapEx actually creep up a little bit, but it's all been driven in order to have that flexibility. To be able to operate and run the plants when prices are high. So, it's something we are really focused on and I think in this last quarter you saw our ability to take advantage of that.

That's great. And just one other question on Chile, are there plans to perhaps find a way to bridge the gap between a good hydro year and a very bad hydro year, where in the middle you are kind of caught between a hard place and a rock? Is there plans kind of maybe to find a way to eliminate that spot?

Basically, I think, what's going to change the situation is the number of plants that we are building in Chile. We have a 1000 under construction, most of these are coal and therefore they will bridge the gap in future years and sort of even out our earnings at Gener.

Great. I appreciate it. Thank you.

Lasan just one last comment, this is Victoria, and I referenced it slightly in my comments. Besides commodity prices and Southern Cone performance, we also had at Kazakhstan, which is when the sale completes. It will no longer be part of our earnings going forward, other than the management contract. It did contribute to favorability in the first quarter, so that's the other piece that we're monitoring.

Got it, thank you.

Thanks.

Thank you. Our next question is coming from John Kiani with Deutsche Bank. Please go ahead.

Good morning.

Good morning.

Hi, John.

I have a few questions on capital allocation and portfolio optimization. Based on the high valuations that people are putting on Indian power assets right now, have you thought about IPOing or selling an interest in the 2,500 Megawatt development pipeline that you have in India, especially considering the meaningful value that's tied up in the coal concessions that you have already been awarded?

We talked about internally. I think our view is we probably need to get a little bit further down the road thinking about value creation. I think the amount of money that we have to spend to further those projects isn't that great. I also think its going to be a strong market for a long time to come, just given the potential there. I think we'd like to take it to little bit further stages of development, where we could capture more value by going out and doing something like that, some portfolio management. It's also, I think, an important market for us to build on. Its going to have maybe one of the biggest power markets in the world for independent power producers over the next, say, 10 years. So, we really want to maintain little bit more control over that process, at least in the early stages, but clearly if we saw an opportunity to do something like that, that would be attractive to us. I just think its little bit premature at this point.

Okay. That's helpful. And then, as far wind development is concerned, can you remind me of how many megawatts of wind generation you'll have in service by the end of this year?

Let me have Ned Hall, who is head of the wind business. He is here. Maybe he could just tell you what's going on there and how would be an operation.

That'll be great. And also, what the pipeline is beyond that?

Good morning. This is Ned Hall. We have in construction at Buffalo Gap, 370 Megawatts, and as Paul mentioned, we purchase 67 megawatts. We do some other deals in the works that will potentially add to that but those are the two things that we publicly announced, that it will come online this year. We also have, as we’ve referenced in the past, the pipeline of above 5,000 megawatts, a little more than half of that in the United States, a little more than half of that outside the United States. And consistent with AESs past business development focuses, we are very much trying to grow our pipeline, and our business opportunities outside of United States right now, in the markets where AES has a strong presence.

Okay. So, your development pipeline beyond the end of ’08 is about 5,000 megawatts and what will be the approximate number of megawatts you have in service by the end of this year then?

The total, based on what I just told you, it will be just little over 1,000 megawatts.

Okay. So, 1,000 plus roughly another 5,000 in the pipeline.

Right.

Okay. And then, one last question on capital allocation. Are the senior securities that are callable, I believe either this month or next, the last tranche of debt outstanding that you need to either pay down or refinance before you have flexibility to buyback stock?

We have two tranches. We have the main maturities and then we’ve also got the second leans. And we are looking at both.

And we have the, some bank debt on top of that. So I believe rough numbers are, the second lean is about $700 million, will be over $750 million. And bank debt, maybe something in that same order of magnitude, $950 million. And some of these, what we could do is, you don’t necessarily have to refinance them. There is possibility we could get covenant changes. There are number of different ways you could go out and attack this. But that’s something that Chip Hoagland and his team is trying to think through, what will be the best way to go forward.

Okay. And the second leans are higher coupon from what I understand. So those could also be attractive from a cost perspective as well?

Not necessarily. They are not the highest. So, we will obviously refinance in the descending order of priority in terms of maturities and in terms of cost. But the covenants obviously will be our focus in terms of getting those out.

Okay. So, the second leans and the bank debt. Okay. Thank you.

Thank you. Our next question is coming from Elizabeth Parrella with Merrill Lynch. Please go ahead.

Thank you. And Paul, your comments on capital allocation, certainly do seem somewhat different from how you prioritized things in mid-March in terms of making the removal of these covenants a priority. Whereas before in mid-March you were talking about, don’t necessarily look for us to do a lot of discretionary GAAP repayments, because of the opportunity you have on the growth side. The stock has sort of been in the same range it has been for the past few months, are there other things that have changed or its just the more opportunities maybe to do something on the debt side now, more economically than before, or is it the return prospects you're seeing in you're seeing in the portfolio or maybe the timing, moneys is being laid out the growth; what has changed?

I think, in March, what I was concerned about really was the market ability to get capital. I think things were little uncertain back then, and our desire was not to do anything and use up lot of capital unnecessarily and potentially slowdown our growth. The stock reacted, it created some opportunities, but we didn’t had the flexibility to go do something. I think now our sense is the market is offering floor opportunities. There will probably be windows where we can do something and windows where we can't. The Braziliana transaction has also been pushed out a little bit. So I think we see a little bit more flexibility, but most and in particular it’s the market where I think even we are going to see the things, situations where the market is tight. I think we are going to see windows, where it will open up. We just want to be prepared to react to those windows and to take the steps to remove those because it makes sense to get it done. And our attention is always to do that. But I do think there is a lot of volatility in the markets, but it's offering opportunities to execute when the market is good. So our view is we'll probably find opportunities to do that.

Okay. And then I had a question for you on slide seven. You had a big reduction in parent liquidity this quarter, looks like most of the reasons for that was you had $644 million investments in subsidiary. Can you kind of indicate us what are the bigger pieces of that, $644 million?

Sure. Elizabeth, this is Victoria. Of the 644, I think the biggest drivers were Mountain View and the Brazil wind projects, which we referred to earlier, I think in both in mine and Paul's discussion. We also had the solar JV coming up behind those as well as wind turbines, which we had previously approved an aggregate but now we have pieces of that actually been deployed from a project standpoint and then Nejapa. So of that I think Brazil wind and Mountain View were probably about half of the 644 and all the remaining got you to the rest of the 644.

I'm sorry, Brazil wind?

Nejapa, I'm sorry.

Well, yeah. Brazil wind, what we've got there is we've been developing a project. We've been looking at flipping -- we've made a loan to a project. We may actually convert that to equity. Haven't done that yet, and probably want to get that done before we talk too much more about the project. But it's essentially as Ned mentioned, Brazil is an attractive market force. We see some opportunities. And it maybe a way to get involve in one where we could become the equity in the project and that's the Brazil wind project we're talking about.

Okay. Thank you.

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

Thanks a lot. Congratulations on the quarter. On the wind pipeline of 5,000 megawatts, I was wondering if to any extent whether you could drill down on that, as to where you might have reached certain milestones, whether it's turbines, permits or wind analysis and just to flush it out a little bit better.

Yeah. That's something we are actively talking about how we communicate more clearly and broadly milestones around wind and other opportunities specifically. But what Paul did mention and I can reemphasize is, we have signed a contract -- a PPA in California for an 80 megawatt project that is working its way. It's this past quarter achieved its interconnection agreement, which is increasingly becoming a key milestone for wind projects globally. So, we think that is a real milepost in that development to have achieved that. And that should go into construction and be completed in '09 or at the latest early '10. We also have received all the permits for a 22 megawatt project in Scotland, which is on its surface a smaller project, but the wind is so strong there, it has great economics. The U.K. market remains short renewable energy, so we're very excited about that project and it's the first in a portfolio projects we expect to bring online over the next three or four years there. So, we think it's a good indicator. We also received our permits and are moving and progressing a project in Bulgaria. And we have our portfolio in France, and it continues to go forward too. And we should be receiving permits in the interconnection agreement. We're also very active in the United States just in terms of where the 5,000 megawatts sits in California, Texas PJM and in Europe, the roughly 2,000 megawatts there is spread out amongst the U.K., France, Greece Turkey. We've also started to expand our efforts in China. We announced last year our first effort, a small investment in a 50 megawatt project and we've been working hard with Guohua, the partner in that project as well as other potential partners to expand that business. And I think we anticipate that will be a high growth opportunity especially with the Chinese recently coming out and saying they're going to expand their market to potentially as large as a 100,000 megawatts. So I think you'll see more from us in China as well.

Thanks. One other question. On the Braziliana process, should we be looking for the formal right of first refusal process really to be the one that produces an outcome? Or is there some other set of circumstances that we should look for that it's not just a matter of getting bigger or not. There could be some other sort of restructuring.

Well, I think the first step really is, it's in the hands of our partner, the Development Bank of Brazil, BNDES to decide whether they want to sell their piece or not. And really that starts -- when they pull that trigger that starts the process, a bidding process. Any bidding process that we have the right to come in and exercise our right of first refusal. And I think as part of that right of first refusal, as Andres mentioned, how we would finance that with probably some combination of the AES money, potentially working with a partner and some financing that would go along with that. So that's the right of first refusal really is the process that would allow something like that to happen. I think until BNDES goes forward with some sort of an auction process, if that's what they elect to do, that's really what's going to trigger it. But it's really entirely in their hands as to how they want to go forward with their piece. It's very possible they could elect to keep it. It's very possible they could elect to do other things with it. But right now, they have been moving down a path of some form of an auction.

Okay. Thank you.

Thank you. Our next question is coming from Brian Russo with Ladenburg Thalmann. Please go ahead.

Hi. Good morning.

Good morning.

Could you maybe highlight some of the assets that you would consider sale candidates or portfolio optimization?

I won't go through those specifically because we probably won't want to go forward and announce those. But generically, the way I think about it is, we've been focused on really getting the most out of our assets for several years now. And I think we've taken many of our businesses up to levels that they probably can't get much better. What you then look at is -- look things you can do with restructuring the project itself. I mean, are there contracts that would make sense to buy out, other contracts you can go into, but where we look at an asset and say there's really not a lot more we can do with the asset to improve the performance, either commercially or operationally. And it really doesn't serve any strategic purpose in terms of being able to grow as a platform. I think at those points there maybe other people who are going to be better owners, more efficient owners of that who have lower cost of capital than we would. Whereas I think our best way to deploy capital is to put it into assets that can benefit from operational turnarounds, that can benefit from commercial restructurings, or that are in the development phase, the Greenfield development, going through construction startup. That's really, I think, where we add the most value. So, you probably see us when we see opportunities like that and the market is good, looking to do some things to transact. It's something, you hate to sell anything that you own, but at the same time, in many cases, it's going to be the right decision. So we've been going through a process over the past several months to identify which ones will make sense. You'll probably see us over the next several months, start a process and maybe go through different waves of assets that we might put to the market, not doing it all at ones. But the specifics ones, you just have to wait until when we can finish the process to determine which ones to go forward with.

Okay. Understood. Also the majority of these projects are in the development pipeline and are considered contract generation type projects, therefore the PPAs that you look to sign prior to financing have few pass-throughs?

Yeah. We generally won't enter into long-term PPA unless we've somehow hedged the fuel side of it. That's probably the biggest risk we face. And if we're not going to hedge that, it would be our preference then to probably go merchant. Because then you're relying on the market to effectively provide the hedge.

Okay. And then lastly, maybe just kind of more of a bigger picture, type of color. We read and hear about mine closures in South Africa and copper mine closures in Chile, all due to inefficient power supplies. Maybe you can just comment on those markets and maybe the growth in India and in China, and how AES is positioned to benefit from that?

Well, you're right. South Africa, I think, is a great case. It's a country we like a lot. We'd like to invest. I think as you saw we had won a bid, and unfortunately, as we were going through the process of developing it, we couldn't get comfortable with the legal structure associated with the contract, that we could in fact have an enforceable contract, at the end of the process. And we, therefore, had to drop off, but the South African government is committed to add more capacity. Eskom the utility there is busily in the process of trying to add some capacity, because they are in fact having a cut back in their electricity supply and that has started to hurt some businesses. But that's why, I think its creating opportunities for us. We have other projects that we are developing, as far as South African market. We talked about the projects in Chile, where there is a strong demand for more power. And what's helped us, for example in Chile, is been the experienced people we had with us were a known entity up there. We've been supplying power reliably for years. So, as we go through process, its giving us an edge, just because people know we can deliver, in terms of, developing the power plants, and delivering the electricity and keeping lights on reliably. Particularly important, up in the northern grid of Chile, because they just cannot afford to be without power. So, I think, our expertise in terms of particularly coal fired plants, operating in countries like that has helped us a lot. You see that expanding to places like India, probably less so in China, because in China you have got the five large state owned power generation companies, which, I think, are quite capable. And matter of fact, they've been building a lot of coal fired capacity. That’s one of the reasons why the Hefei plant, oil-fired plant, is being shut down and dismantled and the assets sold, is because with all the coal-fired capacity coming online, there isn’t the need for the peaking oil-fired capacity, which is inefficient and expensive. But I think, in all this places, it's really our experience in operating countries outside the US, which we have been doing for many years, its giving us an edge over some our competitions.

Okay. And given the shortages and the negative impact to some of these local economies, did you get a sense that there is a sense of urgency to maybe accelerate some of these development projects? And given your backend loaded growth nature of your earnings profile, do you think any accelerated projects could lead to accelerated near and intermediate term earnings growth?

No, I wouldn't change our guidance that we gave. Our long-term guidance that we gave just a couple of months ago. But you are right in the sense that the commitment, I think in the part of the governments to make sure they've got reliable power supplies. Not so much is going to expedite the projects, because you still going to have to go through the normal hurdles you do with respect to environmental permitting. But probably enhances the probability that they are going to get done, because there is just a serious desire on the part of all these governments to make sure they've got the power. And that's causing them to lean towards people like AES or companies like AES to provide their power. So, I would say it's probably not going to change the timing of these things, but probably does make it a higher probability that we're going to hit those numbers.

Great. Thank you, very much.

You're welcome.

Thank you. Our next question is coming from Raymond Leung with Goldman Sachs. Please go ahead.

Hi, everybody. Couple of questions. On the parent cash flows or dividends distributions to some subsidiaries, it's tracking about $1.275 billion for the trailing 12. I guess you got it roughly at about $1 billion, $1.1 billion one for 2008. Are you guys still comfortable with that $1 billion $1.1 billion number? And also with your thought process with respect to capital allocation and possibly returning capital to shareholders, how should we think about the parent debt to the subsidiary distribution number? What's the appropriate target for you guys?

On your first question, this is Victoria. I think you are currently comfortable with the guidance relative to the cash. We're obviously looking based on the first quarter's released earnings favorability. Whether there is some flowthrough relative to rest of year and we'll obviously update it as we forward. But, I think, that's a fairly good number. And there is obviously expansion, lot of projects going on at business level, which we will have to weigh relative to whether the return of cash to the parent is approved to be used as a reinvestment in businesses for [PLCF] specifically. On the second question I'm not sure I understood

Well, very simply, I think, the way to think about it is that our, think about BB metrics. What we're trying to maintain is a BB crediting rating. I think, that's kind of our floor. So, if we did sell some assets. In some cases you probably see a combination of debt pay down plus stock buyback, if that's where we decided to put the money. So the intent would be to maintain BB credit characteristics, whatever numbers that comes to it and I think we've got some views on that.

Okay. Right.

Operator, why don't we just take one more question, because I know people have a lot to do. I don't want to have this run much over an hour and then any follow-up questions people can go through Ahmed Pasha or Michael Cranna. But why don’t we take one more question.

Thank you. Our last question is coming from Wei Romualdo with Stone Harbor. Please go a head

You talked about your bank facility, $900 million. Are you referring to those LCs, or do you actually have any cash drawn on those revolvers?

We have about $750 million in the revolver currently.

Okay. Are those just LC's or are they drawn? Whether you have a revolver, $750 million now, revolver, how much has been drawn on that one?

None

Okay. Is that LC outstanding amount?

Yes. It's minimal, about a $100 million

Okay. And then there is an unsecured LC facility, is that fully utilized too?

It is not fully utilized. No.

Okay. So, when you are talking about stock buybacks, are you talking about those revolvers or something else?

Yeah. Chip Hoagland is our treasurer. He can give you just a very quick update on that.

If you are asking about the covenants, the covenants are in the first lien debt, that is the bank covenant, not the unsecured, but the secured revolver for $750 million, it has covenants in there. Currently, there, I think, we have a basket of $85 million for permitted payments. So, we are allowed to make some payments, but they are capped at $85 million, which grows as a percentage of income.

Okay. But there is not much drawn on that. There is nothing drawn on it and there is some LC outstanding on that one?

That’s correct. But we use that for liquidity. Right?

Okay. And there is a 6% convertible that’s maturing this month. Is that going to be repaid with cash?

We are examining our options and it will be repaid in cash shortly, because of the short maturity, but we may refinance it.

Okay. And that is allowed, given the first lien covenant?

Yes. I think it would be a violation of our covenants if it crossed to Paul that we didn't make maturity payments.

Okay. It doesn't count towards your restricted payment basket?

No, it doesn’t.

Okay. And last question I have is, in your press release you mentioned impairment that you took for investment in AgCert. Can you give some background on that? What type of investment you put in that company and what was the rational?

We actually, previously, had a impairment relative to AgCert and we talked about it in the 10-K, as well. The only thing that has changed is that because of where they are from a legal standing perspective and we are the sole secured creditor at this point. We are consolidating their results as they work through their process.

Okay. What was the initial rationale to invest in that company then?

Yes, actually what we did is we formed a joint-venture with them, and essentially in order to do that one of the requirements was we put some investments in equity in that company. We also had some transactions, where we essentially prepaid for some covenant offsets, and that’s all been worked through the examinership process, which we expect to be completed by the end of the second quarter. And we could probably go into more detail. But it was all part of developing our business with AgCert, which by the way continues to look strong. We have projects that are in that joint-venture with them that continue to look strong and we are feeling about that part of the business.

Okay thank you.

Alright thank you.

Okay. This is Ahmed Pasha. I wanted to say thank you very much for everyone for participating today. If you have any follow-up questions, please contact either Michael Cranna or myself in investor relations. For any media inquiries, please contact Robin Pence. Thanks again and have a nice day.

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time and have a wonderful day.