The AES Corporation (AES) 4 Nov 222022 Q3 Earnings call transcript

Ladies and gentlemen, welcome to the AES Corporation Third Quarter 2022 Financial Review Call. My name is Glenn, and I will be coordinating your call today. [Operator Instructions] I will now hand you over to your host, Susan, to begin. Susan, please go ahead.

Thank you, operator. to quarter welcome call. financial and morning, our XXXX third review Good

presentation. making are press recent along financial be Reconciliations future aes.com. website be these related presentation and results between Today, statements. from most are non-GAAP will Our which and our to information differ release, may factors with found many filed that available materially XX-Q financial discussed on we are forward-looking cause There and statements, can on GAAP website our with the our measures in XX-K the SEC. at

our Joining our and me to this other management morning are Officer; will Financial that, Executive Andres senior Coughlin, over Gluski, turn Steve With of call our President team. Andres. Officer; and members Chief Chief I the

and EPS our of Good $X.XX. review third thank XXXX financial we joining adjusted This EPS quarter adjusted you year-to-date quarter to for call. our third morning, reported bringing morning, $X.XX, everyone,

EPS expect our range With in results through of now guidance growth flow reaffirming in these $X.XX. near results, $X.XX our Coughlin, EPS at Steve shortly. our CFO, we year our to our adjusted detail X% parent We're and to high of target annualized discuss to or XXXX. cash also come the end X% will adjusted for more full financial

commodity that volatile insulated well and from us continues Our movements, protections and interest business demonstrate to rates its have model natural foreign resilience contractual with hedges strong higher currency prices.

U.S. or addition, the of In investment-grade off-takers. is majority business utilities vast our with

the us to into time, current have in flexibility allowed portfolio, At our which same the to upside has environment. X. we Slide Turning capture built

able the to markets have to this direct redirect downside possible high capitalize LNG prices. on and power to upside buy our portfolio international in Hub in less, and actions able results. run past With a priced the been For fluctuations, example, above-average to to plant cheap create our we've diverse in to it limit been that of contracted took prices a we of to both in is European made would year, This in rainfall gas hydro exposure upside portion we gas Panama LNG result hydrology. redirect Panama, commodity has Henry our which meaningful creating our

X. become briefly previous the storage demand Act, for even stand-alone U.S. is Now to Slide it about in our the then, Inflation accelerate greatly or has likely how Reduction apparent spoke But and We U.S. more on since call. to IRA, it renewables the

and due well in growth very the renewables, strong growing leadership interest C&I are our customer our in ownership We extensive positioned and influence through capitalize this demand and pipeline. our on particularly market segment to to our relationship,

where by storage. energy place. market capacity. and to benefits more additional C&I projects, of storage storage storage goals. of see renewables-based that not decarbonization will anticipate also on providing stand-alone enabler intermittency extends low-income influence, for coal demand ownership reach for IRA ITC production IRA as from our renewables across in but U.S., only from credit, also investment credits stake or XX the mining thermal tax XX% result or the We areas years IRA credit, for from in reducing customers a as of energy tax essential generation one leader developers step-up in previously particularly looking the energy the energy grid AES their The largest an meaningful integration. of battery-based but took the or a the includes being and We benefits the ITC, the such or and the tax provides communities energy places Specifically, PTC,

stands than of PJM. XX energy much California the growth pipeline, to U.S. at is gigawatts storage our address the XX of in most hard working and in to is of portfolio. our twice or the our been pipeline as renewables see current it Slide and in you on demand, such of entire and majority attractive The grow size markets pipeline for our have X, can gigawatts this renewables As expected projects. more we Today,

a additional Our in pipeline consists of energy as valuable interconnection for our combination believe I become projects increasingly of pipeline Approximately that We become and scarcer. communities advanced of are credits. described permitting. land, or pipeline projects eligible that have X/X is will our access the previously sites for tax

some large Furthermore, X. Slide X.X in the gigawatts, online our track or due are will gigawatts. of signed last full our year-to-date. panels. additional to of PPAs to to we've Today, is in call discussions gigawatts of gigawatts several primarily projects on But have on very delays largely At advanced at remain time, from to we we renewable expect have within earnings construction which with which XX.X X.X range XXXX. We majority gigawatts. of is to this since solar none to backlog are now an Turning are X.X lack stands our the moved expected year of that next, signed PPAs as contracts come that a late-stage projects customers. by before, due August, program, been There we year late new bring mentioned same these us X.X from of our X.X

Chile, electrolyzers green make hydrogen very large to U.S. in progress the good include renewables. very and also and our the integration We X which continue projects on of

make will you we with confident we have don't specific initiative to more today, any that announcements before share the the are of end this to important we on Although have year.

our on Turning growth at to utilities. U.S. for X update Slide an initiatives

ESP Ohio Ohio regulatory structure. position or modernize regulatory for as significant to to growth to achievement Ohio AES proceedings strong by and make which The traditional map network. for substantial is filed lay investments AES road utility security filing a comprehensive resolve it AES plan outlines electric a foundation outstanding quarter, a its implementing a X, a will This rate new more

of X kind XX utilities approve public Ohio to next the the in expect We ESP months.

across cost competitive. T&D state and see lowest the balance Ohio improve opportunity groups, we remaining reminder, while reliability the has all invest strengthen a As significant and sheet, to customer to AES rates in the

phases is of I wind, of of to Indiana and by December With another and our gas would decarbonization addition natural units its file operated report AES AES and storage. the coal gigawatts the the AES' to of to proposal last to XXXX in resource to last plan milestone X. Indiana turn call battery renewables, solar IRP by in regulator Coughlin. in plans the that, X.X like XXXX The over now up with Steve plan CFO, including Finally, state conversion process includes with remaining the integrated the the of

everyone. third our XXXX XXXX guidance. results good capital Andres, morning, Today, I you, parent Thank discuss will and quarter and allocation

share to adjusted our our Turning are third range $X.XX. and $X.XX full the for high our financial XXXX results we Slide or of expect to now quarter results year to very end quarter XX. I'm beginning strong, on near EPS be to of the that pleased at guidance

by business, Third quarter Andres adjusted EPS was discussed. driven $X.XX our versus year, LNG $X.XX as primarily last

due financial also losses at last nonrecurring and Argentina debt reported Fluence as balances an as in were in that from year, from a a in should Brazil. on increased we AES in year, we had well charges Andes higher partially from higher utilities financial performance. from businesses. contributions see we our by tax I subsidiaries QX rate little U.S. adjusted benefited addition, macroeconomic last ownership we very our These despite parent our onetime increase as higher to XXXX. Relative QX also numbers considerable interest higher in results note benefit as offset not were our to in investment AES In portfolio positive also our higher margins impact stemming volatility,

full example, our largely our is business, highly For of contracted and active well foreign dollarized hedging very along impact the EPS program. $X.XX due adjusted tax year of currency with after forecasted movements to under

exposure revenue protected or interest and of is addition, In XX% our fixed hedging. against for rate by either nearly XX% debt hedged approximately index is inflation of our rate

Turning performance driven pretax next more Slide previously in to just a $XXX expenses impacted XXXX and business Eagle increase to to million at $XXX units Ohio, or drivers by a April from to Including took approximately X our PTC Utilities year-over-year the energy the related on provision entered fuel third slides, pursued expenses for U.S. in Slide was at the March million In $XX and from I'll recognition adjusted onetime was costs. Valley those purchase the outage which into These asset million plant utilities U.S. over XX. XXXX. fuel and the beginning the will cover recovery to PTC we detail AES quarter. of due primarily or settlement and pursue. against deferred a continue SBU, an lower deferred Eagle our SBUs XX. We Valley our at Adjusted of discussed. contribution, I strategic quarter, for PTC, a

lower by addition, in In driven lower availability Puerto was Rico. PTC

quarter the this significant Southland units legacy Our third material a this in energy year, contribution provided although was driver. margin year-over-year not again

increased international to by supply and reflects AES we We in our legacy effort partially MCAC going our and LNG a Southland XXXX. along Authorities expect are may quarter, at from units mostly our commercial market Brazil, sales with and outstanding very Andes both Central be offset was limited extent. forward, a to primarily the PTC beyond pleased process SBU America extend agreements earlier. enabled but our the favorable State into AES by Mexico, launched in gas we America and South built also ownership Regulatory more supply driven third redirect market Argentina. present by as discussed our PTC formally the SBU provision flexibility the Panama Caribbean, at which of California to Higher structure our our the LNG although These were Andes margins required that or higher further commercial Higher at the to conditions, team's

PTC wind in year-over-year prices Finally, benefit was power relatively at higher an net our in flat Bulgaria. from Eurasia, overall with adjusted plant

Now XX. Slide to

contributions the as end of with contribution as year-to-date, expect from will EPS XXX now Andes. of to guidance or result a near increased driven full $X.XX. XXXX Growth including of significant megawatts go primarily year by under the coming come our we ownership year businesses, AES range adjusted in our well from projects online our at high performance new sales, to in roughly of overall to along the LNG accretion from strong of $X.XX As construction be further

in sales the LNG We additional be fourth expect than will the in benefit QX. recognize the quarter, smaller contribution much to but

annualized XXXX, based We utilities. growth energy expected renewables, are X% expected through reaffirming target our on U.S. in storage and to our also X% primarily growth

to Turning Slide XX.

of available As U.S. the Tax eligibility an Andres tax important value portfolio, IRA been credits U.S. long-term incentives and for our have economic and Act Reduction Inflation for part renewables renewables the extended on credits. provides and creation highlighted, expanded these the energy the storage. of clarity

our portfolio, touch on to want incentives of our share renewables contribute larger U.S. I to and As these tax become cash a earnings the way briefly flow.

Our U.S. production of eligible years first typically over wind tax projects credits for are the XX operations.

tax full solar generally typically value tax the years, these we It's begins on associated will invest partners plus recognize cash advantage to for of solar the the in credit tax qualify we storage projects of and as equity partnerships. Our the an that are and attributes. AES. usually renewables, the first these commercial projects they recognized allocated create that X bring majority our important tax operations. These ensure credits, earnings To to monetize investment project tax of within take be for we U.S. called

year. After million million, in by approximately be expect million the commissioning’s, the U.S. projects of projects year project seasonality our Utilities commissioning’s the $XXX fourth our year recognized in in generate tax in million AES these more XXXX in fourth of tax which occur year-over-year year. PTC of next we comparison This new with to new expect by the of approximately end credits earnings credits year, the largely this will remaining from to year monetizing quarter we to $XXX through project earnings adjusted $XXX to new benefit partnerships, our the earnings than full Due these earnings the year-to-go recognized SBU two-thirds XXXX, approximately period, For credits. our from the will quarter. and be the to commission tax late equity will in improving $XXX to

XX. Slide Now to on our plan XXXX parent capital allocation

Sources $XXX of sales of discretionary total including reflect million approximately debt. and million parent of billion cash free $XXX cash, $XXX $X.X flow, million asset of new parent

can see right-hand of use you the side, capital. our On planned

opportunities common for quarter a utilities, represent the as our our billion are going renewables, return the of growth. summary, focus shareholders reflecting subsidiaries largest modernization. are our will to continue plan units. attractive approximately million fleet on nearly share year year. portion of of grid and rate transformation. fund We our these last nearly on U.S. announced executing of $X.X to growth In utilities our the growth. on renewables investments of this capitalize we are which $XXX with AES' continued December U.S. base coupon consists the X% investments investments including dividend, equity our About in to and in This increase in a invest to We our these to businesses portfolio commitment grow on X/X this our in Nearly half

turn sharing over updates the on our forward with In look fourth U.S. to you Andres. more from call. our I'll our XX% to subsidiaries, back call are addition, XX% the planned With quarter goal investments U.S. I XXXX. of AES continuing targeted that, performance our than in our year our approximately to this of strong which contribute future earnings will of for and coming

In EPS XXXX. end target of through to Thank in or XXXX are high you, flow adjusted of our free EPS range we X% for parent expect at Steve. and adjusted $X.XX, and to now the reaffirming our $X.XX cash guidance to summary, annualized our growth come X% near we

LNG Our of to We volatility. the excess customers. demonstrate macroeconomic strong our to from financial signed that will additional Panama portfolio results in to agreements international our resilience business continue redirect

X.X we demand the we growth the XX gigawatts green accelerate in address for our to signed year-to-date, greatly We have the including Inflation increased pipeline we this have stand-alone and gigawatts, full to gigawatts expect energy under and and storage storage demand, hydrogen. in our discussions Act XX U.S. Reduction call and like renewables, To to long-term will more contracts, us in would within With we I open X.X to of questions. that late-stage that, on are several range the expect renewables bring of year for X.X gigawatts.

comes open. Goldman from our question is Insoo, Kim your from Sachs. Instructions] [Operator We first have line Insoo

gave on you've updated. that that the outlooks pipeline also and revised First question U.S. you backlog the on just

upper pretty while especially the XQ IRA for do earnings a this has Given sense how at more of that good you confidence and X% point, you the that 'XX achieve passed, do guidance, it's we to to whether gives see, backlog have a 'XX, that await you the -- end upside you potential growth there to EPS still that is whether through of good range? X%

U.S. very market, among Yes. strong demand, Insoo, in what we're I'd C&I that especially say customers. seeing is especially the

issue having an meet it's of can an clients' permitted different really, projects of So really in I don't our the that think demand demand. It's issue markets.

about growth the we this So is our IRA X%. market. the regarding positive -- to But a our some rates, in we feel X% number. obviously confident adjustments achieving very The to expect

only question those question not of the of really a it's It's projects. So profitability growth. of a

projects let's months we increases. what be say, I'd the of there So or year expect more, somewhat over is to say, scarcity as next, demand

a IRA for going the So incentive pipeline also a ahead Obviously, a for this to I substantial of also green renewables hydrogen, and think who a that's to be has in gotten of and benefit. be mature where the is really a plus the $X have growth have growth and are AES. people of this kilogram going

we're is that So can right seeing But all really -- But more how we're a of as you profitably. favorable, positive. see these the it's saying market it's grow not sure you to much X% things matter just making becomes grow, I now, X%.

there. guidance more await we'll And

segment. LNG. sizable a It on the me pretty for question benefit Second seems at MCAC like

that you an which on, I forward could year level how perspective, can, than next dominate volume of much conditions you EPS details whether and you of And -- see Could think benefit give hydro acknowledging on going much how more so expected. that? driving while year-over-year, benefit just on greater beyond. of or our was will from any basis, much $X.XX if was the

level Assuming current we next and normal could tailwind hydro prices 'XX? that gas, year some and global the provide as think still about of

a have mean, I fulfill dry as year, able contracts need out, thermal be if it's to laid contracts. we the for have to we our we such Yes. LNG that our of example, structured all we that,

redirect a mostly port. in what's you and know, I LNG, to are get into really And you shipments. to cheaper the only wet the you having hydro capacity ship the because but as port year, Europe able if the to buy and are having is those However, have important there that really not very think then bottlenecks

this position think to markets in talks built I shipments. we of advantage flexibility really So about their that those the we move us have suppliers in, relationships with take strategic LNG the allow these to that

forward, there's available. going mean, there's I basically, So a hydrology, in water Nina when La more Panama

of a -- level there's So reservoirs. the also we've -- -- factor the that so what's where

right the plus continue. it's now, really -- the expect between the we to are. Henry say -- spread it's international a I'd So shipping what and We matter prices that of conditions Hub

in we year, Steve the So And positive? Hub, reservoirs? there conditions expect mentioned, additional some conditions given. contracts Is it's the again, have So water the coming the there are Is quarter. spread Henry plus are international next as the -- hydrology the we in fourth in, those regarding and between there? shipping Is really prices?

that So than actual can upside, expect let's tonnage, volume. this this the less would is going was say, of year regarding the in the forward. to We get shipped you counting it. terms we an We're mostly on have And shipped. back not we year next somewhat actual on volume

We have open. our JPMorgan. is question. Richard, your line Richard This from comes from next Sunderland

XXXX currently I cost you broader broader do about Analyst through your in backdrop, of the plan? Day see XXXX standing mean the versus play how these and thinking inflation, outlook through one the inflation opportunity savings

I we do our see international we very question, with that understood control say and that cost in, the to having we're saying savings in costs you're dealing to inflationary I exposure, environment. If in basically inflation that given an right, What accustomed developing? is how we're would the -- environment inflationary

So the gone have gone we've have year. no up. so the that over we've There's far, question cost prices up is has seen the on past of costs mentioned calls renewables EPC gone what as U.S., panel prior up building were there in

basically in this is seeing able projects. we're to we're on margins new However, strong through, our able this -- market, pass maintain we're to

cost million the mean, years. got place a programs past $XXX rate we've in basis, I about XX forward, run for we've Going of cost. had On saving

place. have So we improvement. our It's culture, infrastructure the in part again, continual of

on we're side. not that So particularly concerned

some our of have XX% about form inflation side, pricing the indexation. contracts and businesses On of

So side as we're on that very well. protected well

the So experience. we have

our methodology. have It's of part mindset. We the

see as particular that don't we concern. So a

Steve. is escalation of at This if add tripled side, thermal they've in prices just you I the gone the would also, on look some cases. fuel

before So we're were time And renewables, addition, our renewables, cycle. we although prices more up have right relatively signing inflationary largely increased are then around we're also the that than the they this the benefit firming costs current with competitive in PPA. have up

over you and life of the your So sense very a levelized the good have costs, little is of course. of cost variable what project

market. able this So credits, offset some we in inflationary cost. certainly does then, IRA of of U.S., are bill to of with and build the the the to serve increases in in capital and re-upping course, extension into the expansion And the renewables these additional

been. an helping back effect, down what as would otherwise have off of that's prices opposing they So somewhat bring

up outlook? Steve, impacts any opportunity Is the tax credit other net And No, on IRA. the you appreciate AES basis Curious color that on point to or around certainly foresee? this transferability invest more makes an that impact there. your And could a last picking sense. I to maybe

tax brings of solar. flexibility. Certainly, example, is U.S., lot for transferability. best the what I lot production of of it certainly, be the in like the southwest about an a that is Yes. brings high may optionality, be for for a the credit the And option opportunity mean It as option. we could IRA installation a

a the it say, where transferability, to addition way tax the in attributes. they're of in more that you're of though, So partnership the there's projects structured, monetizing assets liquid There benefit to would still the the partnerships, as when adds liquidity with to the a a to, tax in certainly tax equity to depreciation more when contributed value I attributes you just benefit benefits are monetizing market the that credit to step-up significant some well occurs value a well. the have as these there's as and tax having get

So it optionality, flexibility. add does some

it's we wouldn't down then see AES until good in these And some be so of in that And for I as tax toolkit. expect to able time, to we'll moves credits to our us, the account, for years the have road. our road, own several may utilize down forward look but

Angie, comes Our Angie line open. next Seaport. question is from from your Storozynski

just first, So clarification. one

for the IRA related sure you the how talked just some change from this that So and year accounting different new there ITC some tax contributions not attributes. trying about XXXX. versus carryforward to here been build recognition to for I Stephen, have mean, you the the and the make it's Is of these? I'm somehow

how change. No. to it runway wanted important these now and renewables of and wanted this of to escalate they credits But decade. this well we No, whole to what an do No life of economics IRA into a understand the wanted for see assets certainly, has -- we U.S. extension longer that component a part of cycle time. next We the will Angie. in was, will what understand -- earned. and The We monetized place in return this the get much is means put the having the is been as is over and the people long a, AES tax the people gets

should anyone we expect more So business, of have the share they'll business we the grow as that grow as credits. would

the towards quarter to point we just are part, out we at in other utilities commissioning. fourth the if business projects tax tied thing U.S. and large the renewables credit more the investment quarter, in look projects quarter, we the the credit by that is the The and typically unit, fourth tax for fourth fact is, wanted recognition the the to commissioning driven more skew is

in as lift this we fourth a will last quarter as results did again we quarter we in the a U.S. year result. the year, fourth so will as And see

utilities reasons IRA the the really credit U.S. those was to and then point wanted it of tax out So X SBU. the in I seasonality and the recognition

and that. probably secondly growth X.X had importantly, year. targets. And you It back, if just upside seemingly number. than quarters wondering gigs couple And per of so the to more capacity PPAs have it remember that of of I X.X more you I'm a like there's to against under well any even most seems guys importantly, lost X like tracking you're seems gigs construction. guys

just I'm activity? to again, get with many that is handle if so of hoping And some it reassurance you and there how you're you possibility level can increase like if a -- to that coping projects? how, And logistically,

step-up have great out, you, gigawatts question. under That's we more Angie. have year next. And this in correctly construction. our Thank Yes. than point significant a and Yes, we you between X construction a currently

we've think handled it well. I very

We that have U.S. of the we doubled on amount people the have construction renewables in working in

project them give EPC have sort sight, can staff of a get we working that just how they're next of meaning but they're project, contractors, work strategic the to up. X over with We not so by to years, line able much going been really

we've So well done very there.

we've done has solar managing been due year had panels. good this job which turbulent. delays We've supply, no very very I solar to of panel the think a

we XXXX. have the We solar already for of that need panels most

that with closely the working So we're very inverter. also

good that. So I feel very about

lot the renewables We have of done lot area, outside projects. of a a big

there. experience So we think have I

comfortable. very feel I So

ago. And the started of worried have We about next been this we've a commissioned chain. supply again, year we doubling more roughly than to We what X will year. years

we, think as are I shape as the for And handling anybody So in it. good themselves. results think, I in speak

sort. supplies because We of anything or construction a of a the haven't projects workers had to lack delay lack of any of or

the sort demand Regarding what's well. is growing growing for upside, just very important making They said, growth profitably upside. think, corporations. that I sure incentives renewables. looking we're but I increasing and It provide at IRA think as does our good we're rate I of certainly from has And not the be, will increasing

especially incremental the this rate about question interest last in my that of higher growth, And environment. financing

for from recycling I'm are past of a So capital that, a especially revisiting pretty of the mean of outlays. more I your you assets? again, announcement mean, systematic projects. with hydrogen there the of I capital like comes assuming that aggressive Is existing ahead idea green

it? how So you do finance

to I'd to churn say, What going continue we're capital.

our projects increasing our on invested return a As mature, it's capital. of way

As a contracted U.S. we you projects, to sell who down fully know, dollar once we people finish renewable. renewable want

laid So know plan but out have fully additional options. to are I financed. opportunities, lot forward, to If that, profitable we through going that a say, at XXXX our we is we'll we've would very there have were look of going if

have And grade. the done we We're investment as in a terms more our have lot of of some We of in options. we assets past, turn can quickly sell-downs. our

is Campanella question open. comes Credit line Suisse. Our next your from Nick, from Nick now

minimal regulatory -- changes rate managing last pretty Ohio is consolidated challenges your from update some recognizing I This pretty for the process, has [Fae] the is But the update. through how If just you saw EPS. us case. We Nick quickly some today. outcome Could just Ohio having this again, there. to impact want you're peers to and in going any there? strategy touch on Ohio on there's a rate

would appreciated. color any Just be

is Yes. to. Steve. No, This happy

did being we strategic. for, so you are very We security file saw an sure for X And plan that our very I'm electric ESP recently.

are from outstanding. commission the rate awaiting on that's we still utility the case the So decision

the of stability to before while currently expecting year. rate this We at that staff for years. have is and and for . the we rates need hand is that's there end frozen rates decision have place be charge But whether -- issue the are still look, that We plan are the out new supported came support been broad those. been think XX about in in the the asked for

do clock that what go path is new ticking. what to a to regardless So therefore, of in already case. has was this started chart And this moving we ahead ESP to outcome on decided a and

that of growing expect on resolved really focus to the be second our next utility. the on half we'd said, And by is Andres X. middle to As year ESP

want opportunity We have rates from have get this balance the and place. healthy where There's said, sheet structure for utility significant to to across in a Andres a far want investments, utility. investing is continue the we upgrades and lowest a classes. customer healthy we by to a for a As to all which

that So the the that that ESP be the already can by being But place. it's they ahead in security the we then we'll that in decided -- case and this then still charge X as rates what's to creating X and still in was case have the to and path for middle is that filed already waiting in We there. It's hold out retired, next the be stability decides of path want the to to until going next we'll plan. then give opposed believe that ESP charge the stability and have filed commission year this there. process,

was still our on we as the that and And a goal thinking I here. expect our decision case. year So said, this

Our next comes from line Julien, Julien Dumoulin-Smith. open. question is your

at If and want Congratulations to get plays next can, the some started over just on how to success tax this where credit here. conversation. of the back to the I that dynamics some I out with few try years. of continued pivot to back we itself

a earnings the 'XX reach service, X far transpose was as the to about relative when X in-service? we income versus on prior backlog we are can backlog an well And But bring or is on of to next the considering years? in-service to over talk and outperformed which reconcile try continued back have detail Can i.e., a little bit effectively appreciate expectations? the cadence what offset that solar as progress where to translates updated what all going construction an I how guidance, today talk pivot to So that current just against here clearly, basis. from as that backlog cadence here? may be against as some I you generation is the of also in that the to described then means meet ITC, into to on that earlier try and of construction. embedded the credit? positives PTC fully you about on right, something of the When an

lot questions. a of talk to to good Julien, are there Okay. you,

as I take know lot a Sorry, you will. it

between let we'll So it to let me try Steve and answer -- me myself. frame

the first the somewhat of choose does think say some in on which in us give question new So there. a flexibility terms I of projects. slight I a I'd will XXXX, -- PTC ITC, IRA, This it it's upside is, guess is regarding to start

tend sort backloaded the of the in of the to do cadence, Regarding year. these be somewhat end

that Steve financing the of because structure. this mentioned, just is So had

So QX. going will forward. so be that be it think I continue tends And to to QX,

of that going backlog, and our to as be before have In we XXXX. vast mean mentioned, gigawatts, terms it's of I of is majority we -- end commissioned XX.X the yes,

that there are So projects go that. beyond few a

So as into projects get commissioned, new ones backlog. the come

I think one-thirds it's installed capacity. of our you the what's is installed important, -- capacity, our backlog of think this again, terms in if of current

-- We growth good with. about good feel feel we So rates. who about our contracting the we're

like others if people the our Chile a -- in of So U.S. that it's exporter, but U.S., -- in corporate we're with Codelco, just it's and is copper they internationally overseas well. as we mainly were risk growth mostly is and clients utilities the feel signing as course, in good big as What -- off-takers, investment-grade

your So I tax get I'll think it pass of weeds itself, little Steve some to the a to in of the off other more questions. bit

kind And can, breaking by can. if intra-quarter to by if mind, year XX jump the rather by thing, down year but you cadence don't gig, of we that to just just in, clarify, if not I

per of can the Just -- gigs again, year understand credibly try versus to you I'm and kind trying just older reconcile newer many expectations how expect? to

X say will new contracts, online X year. gigs we're What around are always And be renewable of signing look, going gig from think, of I than some X or gigs year, you X X somewhere then at would next commissioning point, The bringing this you if less together. I is, come about, sort gig.

So the year. be catch-up in will X parallel. is And lines catch-up you the have biggest going the -- then next

months well, between again, our number greater are say, between for of then will commissionings let's the online. the a signings be Now signing XX and and XX lag a if -- PPAs increase, there months bringing about

also business color gigawatts to more said year, our main next -- say, It's growth that Andres so taking year grow. We'll that And X give gigawatts, I for X U.S. that gigawatts. is will look This we as X on Julien, the us. Yes. would next number is solar say and in a the the that then roughly, And I at larger of and average, that share plus in guidance. And would two-thirds of update on then our that that's is that of say, continue solar storage U.S.

So of storage say, U.S. roughly backlog. XX% solar today plus is solar, the

for to the looking that's said, higher We U.S. ITC you we're of it capacity The that's qualified. is say, PTC can't that credits the have factors, at the will returns, continue Southwest so makes elect as and significantly. installation sense typically where high now, the I as, where increase where And

up of additions it's next jump are timing modeling we given become year-over-year. U.S. I level the SBU renewables, grow year. to the an we of also the it's heavily the a is to U.S. of by the consistent business, on fourth is it IRA going big shaped year. an more in issue like that year-over-year to think important for the a is continue of next and get purposes. how the that as is be wanted because credits as And everyone less energy the seasonality way part quarter But towards commissioning business and state of weighted clean how more the monetized important show is understand to year will this to for becoming but of going looks the what given Utilities But

your is from comes We open. question have Citi. line our Ryan from Levine next Ryan,

to follow up wanted some I of on clarifications. ITC the

low and you your anticipated looking forward the adders that then IRA? both any solar you'll are a able you adders move of the be for So as assuming of on are your go-forward you're these portfolio? are specifically, U.S. realize to light projects? you projects projects details you basis, And portion, as income for what mineral current And in you're pursuing seeing of types with what the looking in evolve to

Yes.

energy about talking right? the adders you're content, and domestic for communities the like So things that like Is that.

Correct.

these for I yes, U.S. XX% is of adder. our in So that roughly today energy the think communities pipeline qualify one-third

domestic We've I launched think look leader. forward, consortium. we then move content, buyer solar U.S. are we as our a we at

XXXX. We in that expect first supplies from

content of and be us domestic percentage we So to wage now, apprenticeship our having for don't I then but a already. share. have specific qualified a production projects the are training requirements expect meeting right be And I the XXXX. would fully in material share a and ready to

So beyond. already be level to would I in with part up 'XX the panel our XX% starts content least that's one-third level and to a that some And and supply We're higher as to even project. in perhaps domestic then expect have that with become XX% our at nonissue. XX% that of

equity then to future And around negotiation comments, tax this the to decisions deals? of Or in needs as structure at you'll determine transferability to whether been some or that that feature. to point? not Has analysis utilize transferability the make there determined you're use still looking do how or is or terms partners fully for

on long-term have I say, the lot of us, look, a a the for tax in mean, relationships I leader think we deep side. as -- equity would market, the I

and projects side -- a capabilities that the the the commercial in these us, have the returns. industry on of structuring top on on talent we're we So optimizing for side, tax so very of lot

transferability accelerated option, optimizes also said So fact, of component, tax that depreciation. before, is an an in for as value important is component because of actually depreciation I the not it there us, the returns I'm is convinced, which

step value capital value these once cost up they're projects what higher the of So as than was. is -- and the they're the them of structuring typically built, to

So has monetize liquidity market. the brings there's returns. say, we attributes. us, would AES tax to as liquidity for leader -- a important pay that important it's the to And an transferability, it to more the although we attention I already need

it's there's wouldn't changer, -- So I but at our given say us, game a existing for capabilities. it, we'll significant scale look nothing

We comes Gregg open. from have our from UBS. Orrill Gregg, line question your is last

Congratulations.

there's of year-to-date on there? you could in to there. the year, you LNG next repeatability might have terms need just thoughts the sort that what deliver success for share forward conditions to Regarding of you and or If What about your again? on gives sold you confidence what thoughts the repeat anything

are and we prices said our the say, -- for that what contracts possibility Henry on would fourth a I bit depend is look, spread There's plus that next the there Hub -- quarter, is again, we prices will this year. get And there a into smaller. in between, that of Gregg, Europe. Yes. continuation a on

really that's So the importance.

in good continued reservoirs of and terms in quite hydrology are high. think I Panama, the we hydrology, need

condition. So we're going a in, favorable in

any the than also, is this justify less what case say in be really expect I will spreads it this year would making shipment. And So that volume would we next that year.

an it a be of amount We're very not on counting upside. LNG. So would large

possibility, counting So it's conditions, it like looks the on drivers. we're it. are a not And but those

there's I so see those how moving a can drivers possibility And see you this. think for are and

for we I would year. LNG with to year, for quarter add, -- has of fourth say just done would we've Yes. already And do this for whatever the this

built already of So guidance fourth at -- into upside we've have end commentary the quarter our near the range. or already a the in top smaller -- much we our meeting on

year conducive But upside. -- more as that, the it be could it's whether and volumes additional be Andres talking be we we'd very would already any to contracted and conditions, market next that contract. possible, are we we've So year, think this would what about for said,

you've Does at Or a different still where to top have you you or near reference point? pointing guidance. an earnings serve of 'XX said of think as giving are base? guidance? sort impact or kind end back on up Does a the all you of about Obviously, it this Does how at base year? that some

through X back pointing XXXX, we're to base. committed growth mean be said what X and and I to achieving. the We'd to that's we've different

for rate. not base So our changing year growth it's our

that was my And -- year. yes. Yes. very a It's good

this necessarily at wouldn't said. isn't it's such level But there's a new thing. this I more say recurring Andres I upside, because as think baseline a

We the hand back will now I have line. closing to Susan no on for more remarks. questions further

We thank us today's everybody joining call. on for

to the IR questions answer follow-up will have. team available always, As be you any may

look and will month. you, to the many you day. Financial Thank later We EEI of at have this nice a seeing forward Conference

joining. call. this today's you concludes for gentlemen, and Thank Ladies

lines. your disconnect now may You