AES
#I'll ask Tom to talk about the credit improvement for us at DP&L and then we'll come back to the Brazil question.
We continue to pay down debt.
I haven't got the FFO projections offhand, but the next maturity which is with at the DPL parent, not DP&L utility is $130 million next fall and we expect to be able to pay that off with internal cash flow that was contemplated when we left some of it outstanding with the refi we did a year or so ago.
So we continue to see debt paydown.
We will be transitioning the DP&L integrated utility from a fully integrated.
We will be creating a Jennco, basically a sister to the utility that will involve some refinancing at the DP&L level, and that we'll be over the next couple of years, within the next couple of years.
We can follow up with the FFO specifically at DPL and DP&L.
When you're asking about Brazil, are you asking versus 2015 are versus our prior 2016 guidance.
It's approximately $0.05 that is coming from Brazil from the different things that are happening in Brazil.
Again, going back, we had a 5% decrease in demand, which is very strong, this year.
It's reflecting a weakening economy.
The economy in Brazil is actually contracting between 2.5% and 3% this year.
In addition, you had increase in tariffs and you've had these terrible weather conditions in Sul.
That's a part of the things that are affecting demand in Brazil and then you have the effect on the currencies.
I think we would have to really look at the distribution of our portfolio.
And really where we have synergies.
We're not going to do any deals, we've always said, that would just bring money.
There really has to be synergies or something special to it.
Right now we're really focused on completing our projects and those that we mentioned are Southland and Panama, a little desal in Chile.
And some energy storage projects which we think have a great potential not only for the projects themselves, but also to help us with third-party channel sales of our technology.
I would say Mexico is a market that looks attractive given the partner that we have, but we're going to be very disciplined.
We're going to be disciplined going forward, because, obviously, we have to react to the change of circumstances.
We think that we have a lot of embedded growth in what we have already done.
We do not want to be in a situation where we are spending on things that therefore we cannot finance or we have a better opportunity to use that money somewhere else.
Now having said that, if we give guidance out to 2018, but obviously 2019 is going to be even stronger.
And then in 2020, you have Southland coming on.
So we also want to have the opportunity for of these brownfield additions in the [1920s] space, but we're not going to be spending a lot of money chasing them at this stage.
But if there are opportunities that we can keep at a low cost on the back burner, we will be looking at those.
I think there are two things in Brazil.
One is that they are in a recession now.
It is a difficult one; it's going to take a little time for them to work their way out of it, in my opinion.
There's obviously a lot of political confusion, which doesn't help.
But, having said that, in the case of Brazil, this is an economy which has a population in the optimal level.
It is still growing.
There is still a lot of opportunities in Brazil, especially they do have structural reforms.
So I think everybody, if you look at a medium to longer term outlook for Brazil, in the energy sector, will be far more positive than the outlook today, because you're really looking at it.
I think what is important to realize about Brazil, it is not just commodities that's affecting them.
It has really been internal politics and internal decisions.
So, their ability to recover is much greater.
So that's it.
We don't expect great recovery in Brazil in 2016 and maybe even 2017.
But thereafter, the fundamentals of the market look pretty sound.
Morning <UNK>.
In terms of the longer-term guidance, we have some modest share repurchases in there.
I would point out that ---+ I've always said in the past, we do always get the authorizations that we need.
But we have said that we would do this opportunistically.
So we will be very, again, disciplined in our execution of this.
In terms of cash, we have some debt paydown as well into these forecasts to make sure that we're credit neutral or improving our credit over time.
We look at a balance of share repurchase and debt repayment.
It takes time, there's opportunities to complete those.
We'll look at those, but we don't put hypotheticals into our numbers.
It's an allocation of discretionary cash beyond our CapEx as defined between share repurchase and debt payment.
First I want to clarify.
This is up to $1 billion.
We don't have a targeted $1 billion in sales.
So this is up to $1 billion.
It will depend on the opportunities and the use that we have for that cash.
I want to make that perfectly clear.
In terms of our guidance, we do have continued fine-tuning of our portfolio.
We have some consideration for some modest dilution from some of the sales.
Because that may not pan out in the sense it depends what we sell, the timing of what we sell.
But we are being prudent in here that if we sell so.
We will update that in terms of some of these asset sell downs materialize.
And of course and it will vary very much the net effect.
Whether it's exactly what we have embedded or not, will depend on the use of that cash, whether it's debt paydown or share buybacks or it's another project and what's the gestation period of that project
I'm going to pass this one to Bernard.
We're not going to give a breakdown by SBU.
But Bernard can give you a little color about some of the things.
He's looking at the SBU level, but this is everyone.
This is finance; this is IT; this is absolutely everything is being look at in the Company.
When you look at what we have done since 2012, we have seen more opportunity for seeds we moved actively for the SBU.
So we're taking advantage for economies of scales, some process, some monetization.
I'm trying to give you a flavor of four pockets that we're looking more into that quarter.
The first one is intensified our progress in subsidiaries and economies of scale that is very focused on sourcing, coal, spares, inventory and long-term service agreements.
The second part that we have here is centralized our global G&A.
We continue to focus on that.
We have roughly about $480 million as the global G&A ownership-adjusted.
So we have financiers, we have service centers already lower across locations where we operate.
So we're going to lever up those.
We want to continue to have more G&A transactional process, or back-office activity done in those lower cost locations.
The other one is based on estimatization and relegation of what our AES programs, that is actually to improve our profitability for our 35 gigawatts fleet.
That is also including cheap grade and lower our outage or efforts that we have in our fleet.
And the last pocket is really streamline our organization as we rebalance the portfolio.
As we sell down some of our business, as we sell some of our assets, we also were looking for what are the new operations that are coming in for our construction.
We're streamlining our organization in order to be more centralized and more focused on more efficient base on the portfolio that we have.
We thank everybody for joining us on today's call.
We look forward to seeing you at EAI.
In the meantime, if you have any questions, please feel free to call our IR team.
Thank you and have a nice day.
