Hello, everyone, and thank you for joining The AES Corporation's Q3 2025 Financial Review Call. My name is Claire and I will be coordinating your call today. I will now hand over to Susan Harcourt, Vice President of Investor Relations from AES to begin. Please go ahead.

Thank you, operator. Good morning, and welcome to our Third Quarter 2025 financial review call. Our press release, presentation and related financial information are available on our website at aes.com. Today, we will be making forward-looking statements. There are many factors that may cause future results to differ materially from these statements, which are disclosed in our most recent 10-K and 10-Q filed with the SEC. Reconciliations between GAAP and non-GAAP financial measures can be found on our website along with the presentation. Joining me this morning are Andres Gluski, our President and Chief Executive Officer; Steve Coughlin, our Chief Financial Officer; Ricardo Falu, our Chief Operating Officer; and other senior members of our management team. With that, I will turn the call over to Andres.

Good morning, everyone, and thank you for joining our third quarter 2025 financial review call. Today, I will address our year-to-date progress on our financial and strategic objectives, and speak to key developments in our renewables and utility businesses. Following my remarks, Steve Coughlin, our CFO, will further discuss our financial performance and outlook. First, I am pleased to reaffirm our full year 2025 guidance and long-term growth rates, including adjusted EBITDA, adjusted EPS, and parent free cash flow. We are executing according to our plan, and we are well positioned going into 2026. We remain fully on track with our credit ratings and have received credit opinions from all 3 major agencies confirming our investment-grade rating with stable outlook, including from Moody's in September. Second, we are confident that we will sign 4 gigawatts of new PPAs this year, as we deliver the energy solutions that our customers need at attractive returns. Year-to-date, we have signed 2.2 gigawatts and expect to sign at least an additional 1.8 gigawatts before the end of the year as we are in advanced negotiations on several large projects. Similarly, we're on schedule to complete 3.2 gigawatts of construction projects this year with 2.9 gigawatts already completed year-to-date. An additional 4.8 gigawatts of our 11.1 gigawatt backlog is under construction and expected to be completed through 2027. We're also repowering the 1.2 gigawatts of natural gas at AES Indiana, which is scheduled to be operational next year. This significant construction program provides clear line of sight to EBITDA growth through our guidance period and beyond. We have seen a 46% increase in our renewables EBITDA year-to-date, driven primarily by the organic growth of new projects coming online and the maturing of our U.S. renewables businesses. By year-end, the installed capacity of our U.S. business will be almost 60% larger than it was just 2 years ago. We are seeing projects with higher returns come online as we benefit from substantial economies of scale in purchasing, construction, and operation. These benefits are particularly evident as the average size of our projects has increased by over 50% over the past 5 years. We're also benefiting from the completion of projects serving data centers that we have signed over the last few years. Of 8.2 gigawatts, 4.2 gigawatts are in operation and 4 gigawatts are in our backlog. Nearly half of these remaining 4 gigawatts are under construction and will be added to our fleet in the next 18 months. Additionally, and leveraging our development capabilities, this quarter, we signed a development transfer agreement, or DTA, with a large data center customer to provide them with powered land for a data center site adjacent to 2 of our power projects. In the past, we have signed DTAs with utility customers to develop and transfer power prices. But this is our first involving the transfer of a data center site. We will provide more details on this powered land solution in the future as we continue completing milestones and are ready to announce it with the customer. Moving to our U.S. utilities, we are focused on our core mission of serving our customers with affordable and reliable power as we address the increased demand that we are seeing in our service territories. Across Indiana and Ohio, we're among the lowest cost providers in each state, a position we expect to maintain following the resolution of our active rate cases.

Thank you, Andres, and good morning, everyone. Today, I will discuss our third quarter results in our 2025 guidance and parent capital allocation. First, turning to adjusted EBITDA on Slide 13. Third quarter adjusted EBITDA was $830 million versus $698 million a year ago. This was driven by significant growth from new renewables projects, rate-based investment at our U.S. utilities, and continued progress on our cost savings program announced on the fourth quarter call. We have already realized the majority of the $150 million in cost savings for this year, and we are on track to achieve a $300 million annual run rate in 2026. These drivers were partially offset by the sale of AES Brazil and the sell-downs of AES Ohio and our Global Insurance business. Turning to Slide 14. Adjusted EPS increased to $0.75 per share versus $0.71 in the prior year. Drivers were similar to adjusted EBITDA, partially offset by higher depreciation and interest expense and lower renewable tax attribute recognition, mainly due to timing. We also benefited from a slightly lower adjusted tax rate.

Thank you, Steve. Before we open the call for questions, I want to reiterate how pleased I am with our execution this year. We remain firmly on track to achieve all of our strategic and financial objectives. And we have made significant progress in growing our renewables business as evidenced by the 46% increase in renewables EBITDA year-to-date. The primary driver of this EBITDA growth is the 3 gigawatts of new capacity completed over the last 12 months. Our construction program provides clear line of sight to continued EBITDA growth through our guidance period and beyond. These results demonstrate the strength and resilience of our strategy and our ability to bring new projects online efficiently and at scale. As a diversified power company, we are well positioned to deliver the technology and solutions our customers need, whether through renewables, our utilities, or our energy infrastructure business. Our safe harbor pipeline, a robust domestic supply chain, and deep customer relationships give us a competitive advantage as we meet the growing demand for reliable, low-cost power.

Thank you for the updates. I noted your comments regarding the 5% to 7% long-term growth in EBITDA, and I feel confident about that outlook through 2027, along with the mention of the $400 million in EBITDA beyond that year. With the asset sales moving forward, are you indicating that you expect to exceed this range looking toward 2027, and then fall more in line with it as we approach 2026? Could you also clarify some of the factors we should take into account regarding this?

Yes, Nick, it's Steve. So we're reaffirming the 5% to 7% through 2027. When we referenced the $400 million in our remarks, we're talking about the fact that we expect to have projects coming online in '27, and projects that are still in construction at the end of '27. And this is primarily from things that are already in the backlog that will be yielding an incremental $400 million of EBITDA beyond 2027 so in '28 and in '29 on an annualized basis. So the capital that we have provided includes the investment and the debt for that, but obviously not the EBITDA since these are projects that would not be completed or at least not full year contributing in 2027. So that was the point there. We're really confident in our 5% to 7% guidance through the period.

I was wondering if you could comment on whether you've seen an acceleration in demand following the treasury guidance a couple of months ago and generally what you're seeing from both the data center industry and their interest level in renewables. And would be curious if you could just maybe put that in context of the slower bookings and contracting activity that it looks like you experienced this past quarter?

Sure. Look, we see very strong interest from our data centers and our corporate customers. I would say that in our case, two things. One is, we've always said this is lumpy. And so we're doing fewer projects, larger projects. So there's no reason to expect that these are going to be evenly distributed among 4 quarters. So we feel confident we'll hit our 4 gigawatts. Now having said that, I think not all gigawatts are made the same or equal. So we're more than focusing on a number of gigawatts. What we're focusing on is the quality of those gigawatts. We have a pipeline of safe harbor projects, and we want to make the most value from those projects.

Look, I wanted to focus first on the utility opportunity. Can you give us a little bit of a sense of how far things are advanced there? I mean you obviously take note of what happened with NiSource here recently. And then separately, we saw the revisions of PJM at DPL here recently.

Thank you, Julien. So I would say, in terms of AES Indiana, we are in advanced negotiations. I think the IRP that we filed last week represents sort of the potential scenarios and the opportunity that we are currently pursuing. We expect to be in a position to announce deals in the next couple of months.

Your slides kind of reaffirm strong data center PPA traction with 1.6 gigawatts kind of signed year-to-date. Can you quantify how contracted ROIC or unlevered returns on recent data center PPAs compared to your legacy book? And how pricing has moved in the last 6 to 12 months?

We have made good progress on the data center deals, having signed a total of 2.2 gigawatts of power purchase agreements so far. We are confident in reaching our goal of at least 4 gigawatts to achieve the overall target of 14 to 17 gigawatts. The returns on these projects are generally at the higher end of our expected range of 12% to 15%, and there is strong demand for these projects.

We see a significant demand for our products, and we believe it won't impact us adversely. The demand is substantial, and I don't anticipate any cannibalization from behind the meter from the hyperscalers.

Our next question comes from Anthony Crowdell from Mizuho.

If I could follow up on Steve's first question. In the fourth quarter, when you provide a roll forward, are you considering extending the outlook to 5 years? Or will the company continue to limit it to 3 years?

I would expect to go to 3 years, again, I think that is sufficiently long-term accounting for things that will change naturally in the world around us. But I think we'll go out to 2028 is what I would want you to expect.

More of a housekeeping question, to be fair. I think you mentioned around 50% growth for the year in the Renewable segment is the expectation here. But it looks like you need closer to 57% for the low end for the renewables EBITDA guidance based on the 4Q '24 comp. So maybe can you comment on the key levers and considerations there?

We thank everybody for joining us on today's call. As always, the IR team will be available to answer any follow-up questions you may have. Thank you, and have a nice day.

This now concludes today's call. Thank you for joining. You may now disconnect your lines.