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  • 1. 1Q13 Results May, 2013
  • 2. 1Q13 Highlights Operational  Decrease of 13% in SAIDI and 10% in SAIFI compared to 1Q12  10 1% t t l l 10.1% total losses i th l t 12 months, d in the last th down 0 3% compared t th same period l t year 0.3% d to the i d last  2.2% increase in energy consumption, totaling 11,401 GWh Financial  Gross revenues of R$ 3,283 million, a 14% decrease compared to 1Q12  Manageable PMSO down 3.4% compared to 1Q12, versus IGP-M 8.0% in the same period  Adjusted EBITDA of R$ 209 million, 35% higher than in 1Q12  Reported EBITDA totaled R$ 128 million, 60% lower than 1Q12  Cash generation of R$ 385 million in 1Q13, 27% higher than in 1Q12  Completion of the renegotiation process of debt covenants to amend its limits for the 1Q13 and 2Q13 to 5.5x and 3.75x, respectively SocioS i environmental  87 times reduction in the frequency rate of accidents involving contractors  Promoting safe access to the use of electricity, guiding more than 14,000 families to avoid accidents with the power grid, seeking development and enhancement of communities  Efficient use of energy resources: through reduction of 4 668 MWh in energy demand from our customers 4,668 2
  • 3. Regulatory events Law No. 12,783  20% average tariff reduction of AES Eletropaulo from January 24, 2013, due to the Energy Cost Reduction Program  Involuntary exposure to spot market of 4%, generated by the non-allocation of energy quotas due to non-renewal of the concessions of some generators y p p , Decree No 7 945  CDE transfer of funds to distributors from January 2013 to neutralize exposure at the spot market, No. 7,945 hydrological risk and additional cost of thermal power plants  R$ 317 million was recorded in income as a reversal of expenses with Parcel A, with a receipt of R$ 134 million in April and R$ 148 million in May  In 2012 the financial impact due to the thermal dispatch for thermal security system totaled R $ 118 million, which will be credited to the Company in the tariff adjustment in July Administrative appeals  Results should be released by the end of June and applied in the tariff adjustment in July  Shielded RAB: claim for reversal of the exclusion of R$ 728 million related to the amount of cables and R$ 533 . million related to accounts reclassification and adjustments in the number of equipments  Incremental Regulatory Asset Base: claim for inclusion of R$ 442 million related to smaller components and workforce capitalization . 3
  • 4. Consumption growth due to better performance at residential and total commercial class¹ Consumption evolution² (GWh) +3.8% -2.7% -2.0% +0.3% +0.7% +9.7% +2.2% 11,156 11,401 9,250 9,309 4,106 4,262 3,043 2,981 1,395 1,357 1 395 1 357 Residential Industrial 1,906 1 906 2,092 707 Commercial 709 Public Sector and Others Captive Market Free Clientes Total Market Consumption evolution with the free market allocated in the respective consumer classes (GWh)2 +3.8% -3.1% +5.2% -0.3% +2.2% 11,156 11,401 4,106 4,262 2,654 2,571 3,353 3,528 1,043 1,040 1 043 1 040 Residential 1 - Captive and free commercial clients Industrial Commercial 1Q12 1Q13 Public Sector and Others Total Market 2 – Own consumption not considered 4
  • 5. Best SAIDI since 2006 and better performance than the regulatory limits SAIDI¹ (last 12 months) SAIDI1 (YTD) -13% 8.67 8 67 9.32 10.60 -9% 9% 8.49 8 49 8.67 8.68 10.36 8.35 9.57 8.29 3.36 2010 2011 2012 1Q12 1Q13 SAIDI (hours) 1 - System Average Interruption Duration Index Sources: ANEEL and AES Eletropaulo 3.06 Jan-Apr 12 Jan-Apr 13 SAIDI Aneel Reference 5
  • 6. SAIFI better than regulatory limits SAIFI¹ (last 12 months) SAIFI1 (YTD) 7.39 6.93 6.87 6.87 6.64 -10% 10% -5% 5.46 2010 5.45 2011 4.65 5.09 2012 1Q12 4.60 1.76 1Q13 SAIFI (times) 1 - System Average Interruption Frequency Index Sources: ANEEL and AES Eletropaulo 1.68 Jan-Apr 12 Jan-Apr 13 SAIFI Aneel Reference 6
  • 7. Losses level within the regulatory reference for the 3rd Cycle of Tariff Reset Losses (last 12 months) 10.9 6.5 Regulatory Reference² - Total Losses (last 12 months) 10.5 10.4 10.4 10.1 6.5 6.1 6.4 6.1 10.6 4.4 4.0 4.1 4.0 2011 2012 1Q12 1Q13 9.8 98 9.4 2011/2012 2012/2013 2013/2014 2014/2015 4.0 2010 10.3 10 3 Non Technical Losses Technical Losses¹ 1 – In January 2012, the Company improved the assessment of the technical losses, making it more precise. 2 – Values estimated by the Company to make them comparable with the reference for non-technical losses of the low voltage market determined by the Aneel . 7
  • 8. Investments focused on system expansion, maintenance and quality of client services Investments (R$ million) Investments (R$ million) 1Q13 R$ 145 million 831 5 35 739 22 36 29 647 26 3 11 717 796 9 -21% 53 621 184 7 177 2011 2012 2013(e) 1Q12 145 11 134 1Q13 Client Service System Expansion Losses Recovery Own Resources Paid by the clients Operational Reliability¹ IT Paid by the Clients 1 – Maintenance capex is the investment s made for the grid modernizationand improvement in quality of service Others 8
  • 9. Gross revenues reflects the tariff reduction impact due to the Law No. 12,783/2013 p Gross Revenues (R$ million) 3,835 -14% 186 3,283 145 1,362 -27% 993 2,286 1Q12 -6% 2,146 1Q13 Net revenue ex-construction revenue Deduction to Gross Revenue Construction revenues 9
  • 10. Energy balance – expected to 2013 (GWh) Recognition of a provision for the CDE transfer of funds represented a decrease of 17% in Parcel A Parcel A (R$ million) 1,858 , ITAIPU 22% BILAT. AES TIETÊ 25% PROINFA 2% AUCTION (hydro) Provision for the CDE transfer of funds 217 15% Exposure 11 319 1,541 31% AUCTION (th (thermal) l) -17% 4% R$ 317 million on the provision of transfer of funds from CDE, being: - R$ 100 million – exposure in the short term (R$ 29 million) and h d l i l risks arising f illi ) d hydrological i k i i from th the allocation of quotas (R$ 71 million) - R$ 217 million – thermal plants dispatch 11 103 100 1.523 1,428 1Q13 excluding transfer funds from CDE Energy Supply 1Q13 Transmission Charges CFURH 10
  • 11. Operating Costs and Expenses ¹ (R$ million) Parcel A on the same level because of lower costs due to Law 12,783/2013 and the transfer of funds from CDE +1% 1,957 1,986 421 444 1,535 1,541 1Q12 1Q13 Energy Supply and Transmission Charges PMS² and Others Expenses 1 - Depreciation and other operating income and expenses are not included 2 - Personnel, Material and Services 11
  • 12. PMSO manageable by the Company below the inflation over the period PMS and other expenses (R$ million) -3.4% 88 ( ) (65) (60) (3) 1 69 (8) 444 421 356 356 297 1Q12 FCesp 297 Contingencies, 1Q12 ADA and Manageable Write-Offs 294 287 Others Materials and Third Party Services Personal 287 287 1Q13 Contingencies, Manageable ADA and Write-Offs FCesp 1Q13 12
  • 13. EBITDA decrease primarily reflects the reset and adjustment of tariff on Parcel B j Ebitda (R$ million) (194) 41 298 Market, review and adjustment in Parcel B 1 – PMSO: Personnel, Materials, Third Part Services and Others. 6 122 104 1Q12 (23) Other revenues and expenses 122 128 PMSO¹ Parcel A 1Q13 13
  • 14. Net income variation reflects tariff reset Net Income (R$ million) 97 283 699 18 137 (121) (132) 18 11 (228) (30) (121) -1 (65) 1Q12 1Q13 Adjusted Net Income Tracking Account for the Parcel A items Tariff review postponement effect 14
  • 15. Higher cash generation due to reduced expenses in Parcel A and PMSO Cash flow (R$ million) CASH FLOW - R$ Million INITIAL CASH 1Q12 1Q13 1,390 814 304 385 (191) (213) Net Financial Expenses (22) (5) Net Amortization N A i i 591 (8) Pension Fund Expenses (56) (55) Income Tax (62) (7) Disposal of assets Di l f t - Operational Cash Generation Investments FREE CASH Dividends FINAL CASH 8 564 105 (9) (0) 1,946 919 15
  • 16. Covenants: improvement in the indicators will be noticed from 2Q13 Covenants Dívida Líquida 5.5x  Amendment of the covenants limits: 4.4x Net Debt / Adjusted EBITDA: 3.5x 1.1x - 5.5x in 1Q13; - 3 75 in 2Q13 3.75x 2Q13; - 3.5 x from 3Q13 onwards 3.0 2.4 - Adjusted Ebitda/Financial Expense >1.75x 1Q12 1Q13 Net Debt (R$ billion) Net Debt/Ebitda Adjusted¹ Covenants N t D bt/Ebitd Adjusted¹ C t Net Debt/Ebitda Adj t d¹ Cost of debt Improvement of indicators will be noticed from 2Q13 due to the end of the negative effect of d h d f h i ff f 1Q12 1Q13 the provision of the negative effects of the  Arerage cost (% CDI)2 112% 110% postponement of tariff reset in the adjusted  Avarege term (years) 6.4 6.7  Effective rate 12.0% EBITDA in 1H12 11.7% 16
  • 17. 1Q13 Results The statements contained in this document with regard to the business prospects, projected operating and fi b i t j t d ti d financial results, i l lt and growth potential are merely forecasts based on the expectations of the Company’s Management in relation to its future performance. Such estimates are highly dependent on market behavior and on the conditions affecting Brazil’s macroeconomic performance as well as the electric sector and international market, and they are therefore subject to changes.