Welcome and thank you all for standing by. [Operator Instructions] Today's conference is being recorded and if you have objections, please disconnect. I'll be turning the conference call over now to your first speaker for today, Ahmed Pasha. Sir, you may begin.

Thank you, Kelly. Good morning, and welcome to our Second Quarter 2012 Earnings Call. Our earnings 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. Please refer to our SEC filings for a discussion of these factors. Joining me to this morning are Andres Gluski, our President and Chief Executive Officer; Mary Wood, our Interim Chief Financial Officer; and other senior members of our management team. With that, I will now turn the call over to Andres.

Thanks, Ahmed, and good morning, everyone. Thank you for joining our Second Quarter Earnings Call. Let me start by saying that I'm very pleased to announce that Tom O'Flynn will be joining us as our new CFO in September. Tom is a great addition to our management team and brings a strong combination of financial skills, senior corporate experience and extensive knowledge of the energy and infrastructure sectors. I'm looking forward to working with Tom to execute on our plans to deliver long-term value to our shareholders. I would also like to take a moment to thank Mary Wood for doing a great job as Interim CFO over the past 90 days. Once Tom is on board, Mary will resume her prior position in the finance organization as our Controller. Now as you might have seen in our press release, we earned $0.18 of adjusted EPS for the second quarter. And although this is below last year's level, our result, year-to-date, of $0.55 are in line with our commitment to our full year guidance. Mary will walk you through the specific drivers later in this call. Turning to Slide 3. I will provide you with an update on the strategic plan that we laid out late last year to unlock shareholder value. I will then discuss some of the key macro trends affecting the portfolio, as well as recent developments at our more significant businesses. And following Mary's review of our financial results, I will discuss our capital allocation planned for the remainder of the year. Moving to Slide 4. And just as a reminder, our 3 strategic objectives for unlocking shareholder value are: one, optimizing capital allocation; two, growing the profitability of the existing portfolio; and three, narrowing our geographic and business focus by selling nonstrategic assets. We feel…

Thanks, Andres, and good morning, everyone. This morning, beginning on Slide 12, I will cover the following topics: first, our second quarter results and key drivers of proportional gross margin, adjusted earnings per share, cash flow from operations and free cash flow; second, parent liquidity; and finally, our 2012 guidance. As Andres mentioned, we reported $0.18 of adjusted earnings per share for the second quarter and $0.55 for the first half of 2012. With our first half results, we are still in line with our internal expectations for the full year. Later in my remarks, I will walk through what we see as the key drivers of adjusted EPS for the second half of this year and why we believe that full year results will still be in line with our guidance range of $1.22 to $1.30 although at the lower end. Before covering the results in more detail, I would like to provide some perspective on the year-over-year decline in adjusted EPS we experienced this quarter. First, during the second quarter of 2011, Gener in Chile had a strong quarter due to significant spot sales at favorable prices. We did not expect that opportunity to reoccur in 2012 so we projected lower results from this business in the second quarter of this year. Gener also had some planned and unplanned outages at its coal-fired facilities during the second quarter of this year. The lower volume also contributed to the year-over-year trend. All affected plants are back on line and performing in line with our expectation. Second, our quarterly results include an additional and final adjustment to the new tariff for Eletropaulo recently approved by the regulator, which was a tougher outcome than anticipated and required a catch-up accrual. These factors affecting 2 of our more significant businesses explain much…

Thank you, Mary. Now moving to Slide 20, I would like to discuss our plans for capital allocation for the balance of 2012. This year, we expect to generate $1.6 billion of discretionary cash. Year-to-date, we've already allocated 61% to strengthening our balance sheet. We have used another $145 million or 9% towards our joint venture in Turkey and wind projects in the U.K. and Poland to realize the value of recent pipeline acquisitions. We expect to invest an additional $132 million in other growth opportunities during the second half of the year. This leaves us with roughly $350 million of discretionary cash that we have not yet allocated. We will continue to update you on our capital allocation plan as we receive the cash later this year. Turning to Slide 21. In terms of future growth, our construction program remains on schedule. Construction work at our 270-megawatt Campiche project in Chile is progressing well, and it's expected to commence operations in early 2013. The Kribi project, a 216-megawatt power plant in Cameroon, is also expected to come online in 2013. Additionally, the 1,200-megawatt Mong Duong project in Vietnam is scheduled for commercial operations in 2015, and civil and construction works are underway at the site. As a reminder, we have already made the necessary equity contributions and have committed nonrecourse debt financing for all of these construction projects. In terms of future value creation, we will continue to focus on those markets and platforms where we have a significant presence and a compelling competitive advantage. To that end, we're making progress on our advanced development pipelines in Chile, Colombia and the U.S. In Chile, we have the Cochrane project, a 532-megawatt expansion adjacent to our newly commissioned and successful Angamos plant. We're also progressing on Alto Maipo, a 531-megawatt…

[Operator Instructions] Our first question comes from Jon Cohen.

I was just wondering if you could talk a little bit about what you're seeing in the global credit environment and whether or not it's becoming more difficult to finance some of your growth and also refinance some of the amortizations of the project that's coming due.

Yes. I think that in general, we could say that we see tighter financial conditions especially in the project finance area. In our case, it can be, in some markets, an advantage, where we have strong platforms that we can get nonrecourse financing from those platforms. We also have very strong relations with multilaterals, such as the IFC and with bilateral credit agency. So what we're doing now is changing from our project financing model to include more bilateral, multilateral financing and making greater use of the platforms. But really, this is playing to our strength and playing to our strong local presence and our strong relationship with these entities.

Okay. But is the -- so the decision to retain more cash at certain of these subsidiaries, is that in any way related to what you're seeing in the credit markets?

No, no. What -- in the sense that as the subs -- most of our -- a lot of these big subs are investment grade, we see that we don't have any issues with the refinancing. It's basically a decision given that if we have sufficient liquidity at corp, it's much more efficient from a tax perspective not to bring money out of the country, pay a tax and put money back in. So it's basically given that they have very attractive investment opportunities, we're saying that we'd leave some cash in them. In other cases, in some of the other ones, we do have trapped cash, for example, in India, where we have not been able to dividend the money out. So between us and our partner, which is the state government of Orissa, we have about $180 million. So we're going to deploy that in an expansion of the facility. So there is a differentiation.

Okay. And just one last question. If the tax extenders package does not get done, is that $0.02 to $0.03 headwind that you've mentioned before enough to sort of knock you out of the bottom end of that guidance range? Or do you have enough cushion in there to account for that?

We -- this is Mary. We have not built the $0.02 into our guidance although about $0.01 of it is already reflected in our first half results. So it's something that we will have to address although we feel very confident that it will get extended.

Our next question comes from Angie Storozynski.

So I wanted to first talk about the long-term growth earnings guidance, so 7% to 9% in EPS growth of 2012. Do you -- I mean, I haven't heard you really reiterating that target. And do you think it's still achievable given the macroeconomic backdrop that you're facing?

What we are committed to is an 8% to 10% total return over the next 3 years. What we have said is there wouldn't be a straight line growth. And what we see is more challenges in '13. We see a lot of big tailwinds helping us in '14 and '15. So we will manage to that 8% to 10% total return, which, of course, includes our dividend. And, of course, we will update you once we have more information, for example, on what's happening in the various markets. But I think given our portfolio and given the diversity of fuels that we have, one of the things we will come back to you, if need be, is after the settlement of the MRO, for example, in DP&L. But we remain committed to that 8% to 10% total return, which is earnings growth plus dividends.

Okay. Secondly, I was a little bit surprised to see share buybacks during the quarter because I thought that you were not planning to have any share buybacks up until the end of the year. And secondly, it seems like you are becoming a little bit more aggressive with your retail strategy in Ohio. It's also something that I didn't think was a focus. Could you comment on both?

Sure. Regarding the share buybacks, we have said that we would look at share buybacks as one of the uses of our cash and if we felt that there was a compelling valuation that, that would compete with new projects. And in the past, we've said that we would ask for an additional approval to have a bigger program. So we've been very much, I think, executing on what we said we would do. Regarding the retail market in the Midwest, perhaps Andy Vesey can comment on it but that's really part of our strategy of building off our platforms in specific markets.

Yes. This is Andy Vesey. In terms of your question on retail, it's one of the 3 levers we have at Dayton Power & Light, and one has always been to defend our current service territory, the customers there, and also go off system to attract customers. The whole theory behind our retail operations is really the placement of our generation at DP&L. It's the most collaterally efficient way to do that. So our strategy in retail is to continue to gain customers so we could play a strong generation. We have to be aggressive because it's a very intense competitive environment, and it's a game that we're going to play in very hard.

And our next question comes from Ali Agha.

Some little questions, Andres. If I do the math right, based on the share buyback which you have completed so far, I believe there's only about $50 million left in your current authorization. Should we assume that authorization is going to get expanded? Or how should we be thinking about the future buybacks from this level?

You're right, Ali. There's about $48 million left in the authorization. We intend to use that and, again, depending as we see the -- our cash coming in and we see our growth prospects, we'll again evaluate what is the best use of that cash. And as I've said in the past, that hasn't been a restriction for us. In terms of -- if we need to get more approvals, we will. But we will again have a balanced approach to capital allocation. We have growth projects. We've also delevered to strengthen our balance sheet. And we also have declared a dividend. And we have some growth prospects as well. So it's very much of a balanced approach.

Yes. And going back, Andres, to your 8% to 10% target annual return over the next 3 years or so, you take the earnings component of that -- as you pointed out, DPL will be a challenge certainly in '13. There is not much in terms of new projects coming on until '15 when 1,200 megawatts comes on. So when we look at that trajectory, '12 through '15 -- I want to get a sense from you. To me, buyback and debt reduction seem to be the biggest tool available in your arsenal to achieve that. And I'm just wondering how you think about that and how aggressively should we be thinking about that buyback and debt reduction program for you over the next 3 years.

Well, I think if you look at -- as I mentioned, in '14, '15, we have a number of headwinds besides just the new projects. First, we do have some of the investments we're making in the smaller platform expansions, whether it be at Tunhita [ph], whether it be battery storage, whether it be closing a site. Those things will come on much faster than -- will come online in that period. Also, realize that from an earnings perspective, due to the nature of the tax equity financing at our U.S. wind businesses, we have a substantial pickup in '14 and '15 in terms of earnings. So we do have those things coming on. We also expect more, say, demand growth in some of the markets. We know that there are better capacity prices in PJM, which will also be a big pickup. So it's not that we're just going to be relying on share buyback. I also think that we will have full years of the earning -- of the, sorry, cost savings from the programs that we implemented this year and next in terms of becoming more efficient, in terms of SG&A and other factors of cost. Because we are really looking at cost across our portfolio. So in the $65 million that we're talking about, that's really at the parent level. That does not include, for example, the efficiency initiatives on our North American portfolio. That does not include initiatives in Brazil, in other markets. And so we do have -- in a lot of those areas, we are, I'd say, about halfway through some of those programs and we'll plan to accelerate them in the remainder of this year and next.

And one other thing, on the asset sale program, can you just give us an update on what your current thoughts are relative to your original goal? There was some news, as I'm sure you're aware, about you guys talking to the Chinese about the U.S. wind asset sale that seems to have stalled down now. And so just give us a sense of where you are. And again, from a priority perspective, I know in the past you've talked about trying to monetize your renewables portfolio because you're not getting much in terms of equity value for that. Have you continued to believe that? Or what your current thinking is on the asset sales?

We remain committed to our initial program. What we had said at the beginning was that we had a universe of about $2 billion that we were looking at. We've executed about almost 50% of it. And I think we've executed it very well because we sold at good prices and good earnings multiple. Going forward, what we will be looking at is those things that really help us have a more focused portfolio, as well as help us reduce the cost of some of the support services that we have. And there are also businesses from which we think we cannot grow. So you're correct in the sense that we had looked at renewables because they were low on earnings as we said that -- but, for example, if we look at U.S. wind today, we do really have that pickup in '14, '15, that's in terms of our earnings. We also do have our solar joint venture with Riverstone, and we'll be looking together ways of monetizing that over the future. So I wouldn't like to get into give specific cases prior to really having something concrete. But we are not really changing from our original position. I think we're executing well, but we're not going to do fire sales. We're going to make sure that we sell the assets in the right form to maximize price. For example, our China asset, there's one case where we did receive bids for it as one package and we realized we could do much better by selling it apart. And the difference is not trivial, it's like $30 million. So we'll continue to execute, but we're going to do it in a prudent fashion.

Last question, I apologize. Given your commodity currency exposure, every quarter, these are moving targets. And so just given the nature of your business, are you going to be comfortable putting guidance out there because there's going to be movements every quarter? Or are there other offsets that you have at your disposal so we're comfortable that when you put a guidance number out, it's going to be achieved regardless of the currency commodity moves that are inevitable every few months?

Yes. I think that's the reason we give a range. And we don't move the range every quarter with the commodity prices. That's one of the drivers of our performance within that range. Now AES is a portfolio. And so generally, we do have offsets. Sometimes, the stars align a little bit so we -- on a quarter basis. That's why we don't quite frankly give quarterly guidance because of that, but we do give yearly guidance. We are very conscious now of the portfolio exposures to the various commodities, and we are taking steps to try to mitigate that over time. So we -- again, those are good questions. That's why we give yearly guidance and we don't give quarterly guidance. And if you actually look at what we're executing on, we are looking at a 20%-plus increase in our adjusted EPS this year, and we've taken a lot of steps. And yes, we've had some headwinds, but that's to be expected.

Our next question comes from Charles Fishman.

On Eletropaulo, when you indicate the decision from ANEEL is final, in other words, you cannot appeal that subsequent to their final decision.

Yes. I'd like Andy to answer that one.

Yes. Charles, it's Andy Vesey. There are some things that can be done. And we've actually taken the first step, which is to file for an administrative appeal and review. This is a normal process in Brazil after a tap [ph] -- really, to review things of errors or administrative procedural that may have gone wrong. In our administrative filing, which was filed shortly after the case came out, we basically raised 2 key points: One was the removal from the shielded asset -- excuse me, the shielded rate asset base of 2007 to 2011, of these particular cables. We believe that's a procedural and administrative violation to go in and take things out of a shielded asset -- shielded rate asset base, as well as the loss benchmark that Andres had referred to earlier. In Brazil, this loss benchmark is used for over 40% of the distribution businesses and our analysis shows that statistically, the benchmark was an outlier. And therefore, we're appealing both of those. The process for that is if there were to be a change or any benefit that would come out of that, it probably would be applied at the time of the next half adjustment, which would be July 2013 and be retroactive back to July 2011. We have done this in the past and we have had some movement. But given the size of the issues here, I don't want to raise false expectations but we've already taken that action. Finally, at the end of that, should we still be concerned about the outcome, we always have the right, as any Brazilian company would, to appeal it to the Supreme Court. But in Brazil, that could be a process that could take many, many years.

And our next question then comes from Julien Dumoulin-Smith.

Actually, this is Andrew Gay [ph] stepping in for Julien. Given the increase in the G&A savings for 2012, what are you thinking for 2013? You left the guidance unchanged so might there be further savings there? And then how does that play into your 8% to 10% total return target?

That's a good question. The savings that we expect from the more focused strategy and the simplification of our portfolio are substantial. And we expect to achieve at least $65 million this year, at least $100 million by the end of next year. Before we would, say, raise the number, we would really like to have more time and more concrete -- part of that will depend on the number of markets, quite frankly, that we exit in terms of going forward, additional markets that we would exit. So to -- in summary, we expect at least $65 million this year, at least $100 million, and this is a run rate going forwards by the end of next year.

Okay. And then on the Indianapolis RFP, what's the timing on that and how might you get rate recovery on any rate base build and how does that play into any potential future rate cases?

I will ask Andy to answer that one.

Okay. Andrew, this is Andy Vesey. The process is that we're receiving the interest and the competitive bids. It's my understanding that these will be opened in, I think, mid-September, if not late September. We will also be proposing our own, hopefully, cost-competitive option for that. To the degree that we were to be making capital investments, those most likely would be recovered at our next rate case. And prior to that, we would be getting AFUDC treatment. So if we were to be building this project and I want to say the following is that it's a competitive process at this point in time. So there are many opportunities. One, we could build -- somebody else can build or we could buy the capacity. We could buy the energy. There's many ways to go through this. But if we were to build this project, it most likely would wind up going into rates at our next rate case.

Our next question comes from Gregg Orrill.

You touched on the Eletropaulo decision and the fact that at 16% ownership, it's a smaller part of the company's earnings. I was wondering if you could touch on it in the context of the Brazil platform and whether you'd consider selling Eletropaulo.

That's a good question. I mean, we have -- in terms of the large markets where we're present, Brazil is a market with a rapidly growing energy demand and where we had a very substantial footprint. We still have a lot of unlevered capacity -- or leveraged capacity at Tietê, which is a contracted 3,000 megawatts of hydro. When we look at what Eletropaulo -- we do own 16%. We did develop the telecoms outside of Eletropaulo. And we also have the footprint in the south in the business of Sul. So our footprint in Brazil is more than just Eletropaulo. We are one of the players there. And we do have the capacity to grow. And we do have now very good relations with BNDES and can finance new projects. We will do projects, of course, that are good projects. So that's -- we have the capacity for growth, but we're making sure that we grow from good projects. Regarding Eletropaulo, we have in effect been in a process of reducing our position there since 2006. We sold down half of our holdings and we took out the telco. So the important thing for us is Eletropaulo is more -- it had, we felt, more regulatory challenges than our other businesses there. And that given -- we have, I think, given what we could do, we've managed it as well as possible. So right now, what we're focusing on is making sure that we make it as profitable a business as possible within the new guidelines. And this is our second major cost efficiency program that we're doing and that's creating value. We had done one prior to that. So I guess, in a nutshell, we still see Brazil as an interesting market. We still have the critical footprint. And we still have the unused leverage at Tietê, which are the things that we'd be focusing on. Eletropaulo has been challenging, and we've done everything we can to restore profitability of that business.

The next caller is Brian Russo. Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division: Could you just clarify the statement you mentioned earlier on the DPL outlook? You said that '13 results would be worse than expected. Is that your original expectations? Or is that based on the MRO and the ongoing settlement? Just hoping to get some more clarification on that.

Basically, what I was referring to is low natural gas prices and low capacity prices, so looking at today's forward curves for gas and looking at what we know for capacity prices in '13, they're low. So those are 2 factors that are affecting DP&L. And we also, of course, know the switching rates that we've experienced to date. So -- what we wanted to be, as transparent as possible regarding what we see for '13 for DP&L just like we do see a much better capacity prices in '14 and '15 at DP&L. Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division: Okay, understood. And then also, you mentioned a few negative headwinds on 2013, including DPL and the commodity sensitivity throughout the portfolio. Could you talk specifically at some of the positive drivers that you see in 2013?

Sure. So the positive drivers that we have is: first, the cost cuts that we've done this year. The second, the projects that have come online fully. So we do have projects, for example Angamos for the -- in Chile, which, for the first half of the year, were contracted at about 65% or now 90% contracted for the second half of the year. So we'll enjoy the benefit of a full year for that. So on '13, we'll have the full benefit of a lot of the construction projects, which were inaugurated at the end of last year. We also see cost cuts coming in and as well as -- we have Campiche, Kribi, some wind projects coming on as well. So there are a number of positive things coming on for 2013, but we also -- we've always pointed it out that '13, given -- we're coming off a base of a 20% growth in 2012. So given that our projects are lumpy, it's not going to be a similar year to 2012. And we have now the issue of what will the MRO filing look like for 2013 in DP&L. Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division: Okay. We should still expect growth in '13 just not quite at the rate we saw in '12 over '11. Is that accurate?

That's accurate. That's accurate.

In certain markets.

The aggregate, yes.

Yes. Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division: And then one last question, the IPL environmental spend. Can you remind us how much -- how many dollars is to be spent? And then also, when we might expect the next general rate case?

Okay. We don't have an answer to the second one in terms of what we would expect the general rate case. But in terms of the environmental spend, it's around $500 million.

$500 million to $700 million.

Yes. $500 million to $700 million.

And since the -- Brian, this is Andy Vesey -- potentially, we expect probably over 90% of the cost associated with that environmental spend to be covered in the Senate Bill 29. We're going to track a recovery and that expenditure will not drive us any closer to needing to go to a rate case. So it's not -- they're not connected. Brian J. Russo - Ladenburg Thalmann & Co. Inc., Research Division: Understood. And over what time period is the $500 million to $700 million spent?

Well, we have to be compliant by law by April 2015. We're making an extension. So that project will probably start up in earnest, the environmental control project, in the first quarter of next year, with construction probably starting in the third quarter. And we're dealing with our 5 Petersburg plants and Harding 7, and we're going to match the outage schedule going forward to complete it by 2016.

And our next question comes from Angie Storozynski.

[Audio Gap] waiting for a potential settlement, you keep calling it a procedural MRO? I mean, it's based on the other utilities in Ohio. It feels like it's going to be an ESB [ph]. But if you could comment about why it's taking so long. Is it somewhat linked to the other regulatory procedures pending? And also, you mentioned that power prices in Ohio are positively correlated with natural gas prices. But we have seen a pickup in natural gas prices over the last couple of weeks. And yet, Ohio power prices are actually flat to slightly down. And how that ties into your visibility about profitability of the business?

Okay, let's take one at a time. I think, in terms of the timing, there are 26 interveners in the process and there's a wide range of interveners. So that's one thing that's taking some time. Regarding the second, in terms of power prices in Ohio and the relationship to natural gas, what we're saying is that basically, DP&L's fleet is coal for the most part -- and it's scrap coal for the most part. But nonetheless, it's competing with gas on the margin. So that is one of the things that's affecting the profitability of those plants going forward. It's the same case, for example, due to a much lesser extent at IPL in the sense that we do sell into the wholesale market and we do have coal plants which are competing with coal. I don't know if Andy would like to add some color to some of the questions that were asked.

Yes. The only thing that I would -- to the first part about why it's taking so long. I think you probably all are aware that the procedural schedule was put on hold. Today would have been the date that interveners would have had to file testimony, and August 27 was the last date for the evidentiary hearing, which would have signaled the end of the settlement process. By petition of the parties, the schedule has been suspended because -- the fact is everybody is working very hard to bring this to settlement. So I would probably say that there's still a desire by all parties, all 26 parties, some of whom are our competitors, that a settlement be reached and we are still hopeful, as Andres said in his opening remarks, end of the third quarter or early fourth quarter. And I think the suspension of the settlement -- I mean, of the schedule is a signal that, no, there is no new schedule. And the only time a new schedule will be put into place if the parties basically say they cannot get to a settlement. So we're still on the settlement path. I think on the other side, going into 2013, the forward curves with 2013 on average are about $2.50-plus. That's still low for that business given the range of outcomes. We're hopeful as we get into 2014, with the pickup of capacity prices and continuing strengthening of the gas curves, we'll see this business start to take a much more positive trend as we've said in the past calls.

Okay. And my last question, about Gener. What happened exactly in the second quarter, the lower availability of one of the plants? And should we read into any long-term issues with that business from the results from the second quarter?

I'd like Ned to answer that one. But basically, no. We don't have any systemic issues there.

Angie, the -- we had outages at several of our large coal plants that have now been repaired. So we were out where we had budgeted to be in service. As a result of taking the units offline, we also moved forward planned outages for later in the year. So we will have the opportunity to make that up in the volume and depending on what prices look like over the rest of the year. So we anticipate recovery.

And our next question comes from Brian Chin.

I know you guys have changed around the authorizations for share buybacks earlier this year, but can we just get a tally of how much in your share buyback program you've got left? If I remember right, you had upped the number to $680 million earlier this year. I just want to make sure I understand sort of where we're at and how much is left to go.

Under our current authorizations right now, we have $48 million. We had $302 million that we mentioned on our prior call. But as I said, the share buyback is part of our capital allocation process. We will look at, if we have compelling valuations, where we allocate the additional $350 million that we have coming in later this year.

Prior to you doing more share backs, I guess it's safe to assume that we should see another authorization for an uplift provided that, that $48 million isn't all that you want to do, right?

If you want to answer that, Brian, I don't think we would have to -- we would mention it on the next call if we have authorization, an increase in authorization for buybacks. Thank you all very much for participating in this call.

Yes, thanks, everyone, for joining us on today's call. As always, the IR team will be available to answer any questions you may have. Thank you, and have a nice day.

Thank you. And that does conclude today's conference call. You may all disconnect at this time.