Good morning, ladies and gentlemen and thank you waiting. At this time, we would like to welcome everyone to Pampa Energia and Edenor's joint first quarter '16 results conference call. We would like to inform you that this event is being recorded and all participants will be in a listen-only mode during both company's presentation. After the company's remarks are completed, there will be a question-and-answer session. At that time, further instructions will be given. [Operator Instructions] Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Pampa Energia and Edenor's management and on information currently available to both companies. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Pampa Energia and Edenor and could cause results to differ materially from those expressed in such forward-looking statements. Now I would like to turn the conference call over to Mr. Leandro Montero, CFO of Edenor. Mr. Montero, you may begin your conference.

Thank you very much. Good morning, everyone and thanks for joining us on this joint conference call of Pampa Energia and Edenor. As we usually do, I first Leandro Montero, will be presenting for Edenor first and then for this quarter, Lida Wang will be sent for Pampa Energia. First, we will focus on the main events that lately took place and then briefly review the results of the first quarter of 2016. As you know, you can always call any member of our team for more details on the results of the period or any doubts you might have. On April 16, this year, the Regulator issued a note number 12151 establishing that all final penalties imposed by the ENRE after this date must be valued according to the kilowatt hour values in effect off of the last date of the semester or period during which the even given rise to the penalty accrued including any increases or assessment applicable to our remuneration of such date. In addition fines and penalties set forth within the preview of the note will have interest from the last day of the semester and with the even giving rise to the penalty accrued until the date they are paid by us. Because of this note, the company accounted for an assessment of approximately AR$250 million regarding the penalties of the last semester, which is the September 2015, February 2016 period, and in addition registered the amount of AR$129 million to reflect a good interest according to the note terms. Then by means of Resolution number 31 of the ENRE issued on March 28, we started to compensate this small residential customer who had been affected by the power outage occurred during the period between February 12 and February 18 this year. The amount…

Thank you, Leandro and good morning, everyone. Lots of developments have happened since our last call on March. As you may now consequently after the approvals obtained from Pampa and Petrobras Brazil, Board of Directors, last week we signed the SBA contract acquiring to controlling 67.2% stake of Petrobras Argentina for a base price of $892 million. The base price is subject to agreed adjustments, likely no material until the closing. As we signed the SBA contract, we deposit 20% of the base price in Escrow account being the remaining to be paid at the closing. Let me give you a quick glimpse of Petrobras Argentina. Petrobras Argentina [indiscernible] Argentina with a daily production of 28,000 barrels of oil and seven million cubic meters of gas, 60% gas and 40% oil currently. They also participate in refining and distribution business with our refinery install capacity of 30,000 barrels per day, plus a retail network of 260 gas stations across the country. In Petrochemicals segment, Petrobras Argentina operates two plants being the only national integrity producer of styrene, synthetic rubber, polystyrene and BOPS. In gas and energy segment, Petrobras Argentina controlled almost 1200 megawatts of the power generation capacity through two thermal gas fired power plants and one hydro plant, increasing Pampa capacity by more than 50% with premium quality asset. Petrobras Argentina also holds the other 25.5% of TGS, the largest gas transportation company and one of the leading natural gas liquids producer of Argentina. Last first quarter 2016, Petrobras posted a AR$2.4 billion of EBITDA and a net income of AR$931 million. To test this ticket Pampa was formed with a combination of own cash of up to $220 million, up to $250 million from the sale of TGS is completed prior to the closing and I'll explain later…

Ladies and gentlemen the floor is now open for questions. [Operator Instructions] Our first question comes from Frank McGinnis from Bank of America Merrill Lynch. Please go ahead with your question.

Hello, good day. Two questions if I could. One is just related to how you are managing the portfolio that you are acquiring with Petrobras Argentina? You are bringing in Petrobras into Rio Neuquen as well as YPF and then you're also YPF is going to take one of the others Aguada de la Arena, I was wondering if the YPF this is as I understand an exchange to the financing, but it appears that you might by that back or pay back to financing and maintain those stakes. I was wondering if that is your intention. And secondly related to that, would -- are you thinking of possibly adjusting a portfolio in other ways and selling other pieces to other participants in the market in Argentina?

Hey Frank, Leandro Montero here, begin by the end trying to remember all your questions, no, we are not planning at this moment to sell any additional part of the EMP portfolio. Regarding YPF, they will be operating Rio Neuquen. The idea is to keep one third Petrobras Brazil, one third YPF as an operator and one third will remain with ourselves. You mentioned to return the fund and keep the assets, I don’t know why you had a doubt, but that’s not the case. We plan to divest those assets to YPF as informed in the past few days.

Okay. Okay. Great. That’s very clear now. I just didn't read the Press Release that was the -- left me with a question related to that. Then if I could just have one more just in terms of generation capacity and capacity utilization, with all the changes going on in the market with potential changes in pricing and regulatory rules, I was just wondering how you're thinking about the generation business in terms of potential upside, in terms of both pricing as well as the ability to have a greater capacity utilization?

Okay. If you think, I'm sure as I mentioned, we will be increasing our capacity by more than 50% by adding [Canelma] which is state-of-the-art combined cycle and of 160 megawatts of capacity and we will be adding in also in Canelma of 860 megawatt of capacity where the project to add the steam turbine and closed cycle and convert that in a 240 megawatt combined cycle. It's already there and it's something that we will like to do as soon as possible. Although there is something that we need to negotiate with the Secretary of Energy, Petrobras has also made $80 million in grades, generally more than $80 million in grades that Petrobras has not utilized. We here in Pampa, we did use them and was part of the grades that we used to build the new 100 megawatt gas turbine that we had recently inaugurated in Loma. So that is where what concerns on the thermal plant in Petrobras, we're also going to be adding this 285 megawatt hydro plant [indiscernible] and the other plant that we have for our -- to increase our thermal capacity in Pampa, we will be participating in this billing process that will be taking place next week. We think we will be a placing something between 150 around 150 megawatts of thermal capacity and it has been announced we're also planning to be to participate in the renewable bidding that does not have a date, but we expect that bidding to take place in the next two or three months and for that auction we have already secured two facilities to our wind farms. So, that’s what we're expecting in terms of new generation of new project in generation capacity and regarding the regulatory environment we still have not much -- we don't have a clear view of what the government is going to do to accommodate what we call the old energy capacity. I've seen that something that this new government will focus after finishing in internal tariff region that they're planning to do this year on distribution and transmission and so we expect that a new regulatory framework for the end of the year or early next year, but that’s -- again that’s our guess, our assumption.

Okay. Great. Thank you very much. Very helpful.

Our next question comes from Walter Chiarvesio from Santander Bank. Please go ahead with your question.

Hi, yes hi good morning everyone. Thank you for taking the call. I have a few questions more focused on the distribution segment in Edenor. So the first one is the volume of residual has been quite resistant or quite strong even despite that the rates to the consumer has been increased. What is your view about it? How do you think that will perform in the upcoming quarters given that we will have the full impact of the tariff increases and I guess in the second quarter? The second question I’d like to ask is regarding the penalties imposed by the ENRE, if you can explain a little bit more how is that or what do you expect in the future about it, if the level that we saw in the first quarter is also expected for the upcoming quarters? And third question would be regarding the Resolution 55 by the ENRE and if you can develop a little bit on how this resolution determines the calculations of the asset base to determine the tariff. I understand that you have some freedom to propose some methodology. And the last one I saw a capital work increase receivables in Edenor I guess that is related to the increase of tariff, but my question is, is that just business as usual or you show some increase in delinquency or something related to the rate increases that we saw in the first quarter. That’s all my questions at the moment. Thank you.

Okay. Good morning, Walter. Well just to start with the first question, as you mentioned we have not seen any change in the behavior of our customers relating to the energy consumption. In fact during March we had a decrease a deep decrease in the residential consumption of around 20%, but this was because of the weather conditions and because it was in comparison with very high consumption period, which was March 2015. In fact all our customers have been receiving the new builds with full impact of the new tariff since April 1 and we didn’t see a change in the behavior. In fact during April, the average demand for Edenor increased 5.5% in comparison to the same month last year. So we don’t see any change in the behavior may be because increasing the tariff is still not as high as we as think or since the average build for our residential customer is between AR$80 and AR$300 per month that if you compare this with any other service or like cable or gas maybe it’s even lower. So we didn’t see any change. And then in relation to the penalties, during the quarter the Regulator issued this note, the 120/151 which was an instruction for the Regulator in order to set how they were going to establish the amount of the penalties to be imposed since February or since April. In that note they establish that new kilowatt per hour price should be taken to account in order to both the penalty taking into account the price of the kilowatt hour in the last day of the semester that was being punished. You know that penalties and fines are imposed every semester. So what we did was to assess the amount of the penalties for the semester…

Okay. Thank you very much.

You're welcome.

Our next question comes from Santiago Wesenack from Raymond James. Please go ahead with your question.

Hello everyone and thanks for taking the questions. Just three quick ones if I may. The first one on the Petrobras acquisition, if you can give any guideline if there is -- if you can give any guideline on the future dates, when should we expect anything on the closing side maybe and what's still missing to get the actual closing of the operation? Then the second question on the generation side well this quarter you had technical issues as Lida mentioned on the steam turbine both in [indiscernible], is there any news, any positive news for the second quarter? And also in terms of the gas supply from CAMMESA taken into consideration that we're now into one month and half after the closing of the first quarter, how is the gas flow coming from CAMMESA? And the last one for Leandro Edenor at the Edenor side, if we reclassify revenues, last year revenues under Resolution 32, was to the revenue line we saw this quarter, a decline in terms of EBITDA margins, mainly driven by distribution and distribution and electricity purchases going higher or growing higher than your revenues. What should we expect for second quarter, third quarter and the rest of the year? Thank you.

Okay. Regarding the timeline for the closing of the transaction, we expect closing to happen within the next 90 days and we need to fulfill all the condition prices basically a preference right of partners in some areas in the -- EMP areas in North Basin and in Endosa. Some lender consents, small issues and they refinance of Petrobras Argentina $300 million bond that we expect that to happen in the next six year or 90 days. Once those condition presences are fulfilled, we will go to the closing of the order transaction. The second question…

The second question was about CP, first quarter not performing so well compared to last year. Well in terawatt we just finished a major overhaul that this quarter it didn’t responded as we expected to, but the second quarter actually a little bit just brightly acted as closing the first quarter we started to work on this to reconnect and we expect the second quarter to do better than Güémez the thing that is not available it's not something discussions to us. Remember that gas is provided by CAMMESA but the old capacity generators and there wasn’t any gas available in the north part in Argentina. So, we always collected the cost because we're available and we are not collecting the generator the variable cost from that. Third question is going to be addressed by Leandro.

Good morning, Santiago. Well, yes your precision is correct because in 2015 in the first quarter 2015, we recorded an additional revenue because of one of the Resolution 32 effect, which was the recognition in revenues of the salary long we had received in 2014. That’s why the first quarter 2015 is impacted by AR$464 million regarding this long. If you see our last year EBITDA, this quarter is similar to the quarter last year, just taking out this special effect that was recognized in 2015. So we think that for the upcoming quarters, the EBITDA will remain similar to the EBITDA this quarter, taken out the one-time effect of the increasing penalties and final penalties line.

Okay. Great. Thank you very much.

Welcome.

[Operator Instructions] And ladies and gentlemen at this time it's showing no additional questions. This will conclude the question-and-answer session. I’d like to turn the floor back over to Mr. Montero and Ms. Wang for any closing remarks.

Okay. Thank you very much for attending this conference call. Have a nice day.

Thank you.