Eletropaulo reported financial results for the second quarter of 2004. Net revenue increased 8.6% compared to the first quarter, while EBITDA grew 21.2%. Higher operating costs were due to increased power distribution agreement payments. Debt levels rose as the company took on more local currency debt. Tariffs were adjusted in the quarter for some customer classes. Overall consumption increased 7% despite fraudulent recovery reductions.

1. Results of 2nd quarter of 2004
August 12, 2004

2. • Market • Operating Performance
• Finance and Operational • Financial Performance
Performance
• Debt Profile
Conclusion

3. 3

4. Comparision of Consumption in GWh
With Fraud Recovery
5,7%
2.902 8.438
-8,4% 7,0%
2.745
1,2%
2.424 2.431
2.221 2.278 8.330
8.330 8.330
-1,4%
-0,7% 8.224
883 877
Residential Industrial Commercial Other 2 Q03
2 Q04 w/ out fraud rec.
2Q03 2 Q04 2 Q04
4

5. Comparision of Comsuption in GWh
w/ out Fraud Recovery
2,7% 7,0% 3,8%
8.858
2.819 2.798
2.745 -9,6% 2,3% 3,2%
2.615
2.424
2.365
2.278 2.331 2.291
2.191
-1,4% 8.533
8.341
-0,7% 8.224
883 877
Residential Industrial w/ Commercial Other Industrial w/ Commercial Total w/ out Free Total w/ Free
out Free w/ out Free Free w/ Free
2 Q03 2 Q04 2 Q03 2 Q04
Obs: the graphics not consider own consumption
5

6. Retention of Potencially
Free Consumer
• Intensification of visits to consumers
• Value adding to the captive supply through:
• The selling of “ Interruptive Energy”
• Payments of Bills with Credits of ICMS (Merchandise and Service Circulation Tax)
• Energy Efficiency Projects
• Beneficit Plans (Load Management and Preventive Maintenance)
Actual Situation
% market
Jan- Jun 2004
Billed in 2003
Migration of 30
2,2%
Consumers
27
Consumers renewed 2,6%
Contracts
Total of 55
7,9%
Free Clients
6

7. Results – 2nd Quarter 2004
In R$ Million 1 Q04 2 Q04
7% Growth in Eletropaulo’s billed consumption
and loss recoveries in the amount of R$17.8
Net Revenue 1.578,8 1.714,6 8,6% million
112% Increase in the account of other operating
expenses, as a result of PDD growth
Agreements with town halls in the last
Operating Expense (1.392,7) (1.474,9) 5,9% quarter reduced PDD of that period
EBITDA * 253,1 306,6 21,2% Increase in the Net Operating Revenue
Financial Revenue (86,2) (144,3) 67,4% 6.8% depreciation of Real compared to Dollar in
the period
(Expense)** Increase of the debt in national currency
stemming from the conversion of debts in US$
into R$ caused an increase of financial charges
Extraordinary Items (85,6) (85,4) -0,3% in national currency
Net of Tax Effects
Net Profit (Loss) (13,6) 8,1 159,2% Increase in the net revenue higher than increase
in operating and financial expenses
(*) Without adjustments
(**) Consolidated Result Values
7

8. EBITDA Adjust
1st Quarter 2004 2nd Quarter 2004
EBITDA EBITDA
R$ 253,1 MM (With the effect of Provisions R$ 306,6 MM (With the effect of Provisions
and Debt Confession IIa) and Debt Confession IIa)
RTE RTE
R$ 68,9 MM R$ 74,1 MM
R$ 19,3 MM Debt Confession IIa R$ 23,6 MM Debt Confession IIa
ADJUSTED EBITDA
R$ 341 MM ADJUSTED EBITDA
R$ 404 MM
18,5% Increase
8

9. Investiments in 2004
R$ Mil 360.568
320.991
286.654 289.041 289.000
217.307
180.376
39.090 70.028
1998 1999 2000 2001 2002 2003 1 Q04 2 Q04 2004 (e)
Investiments Projects for 2004 – R$ million
Customer Service 50
Market Growth
System Expansion 53
Modernization of the System 8
Maintenance
Safety (improvements to the grid) 26
Technical losses, COE, automation and
Supply Quality billing 22
Losses Recovery of Commercial Losses 14
Regulatory Obligations P&D, Energy Efficiency and ERAC 14
Specific Expenses (Vehicles, IT, furniture and equipment 13
Personnel 89
TOTAL 289
9

10. Base Down Payment – CVA Loan
• Eletropaulo received on June 3rd the CVA loan. The amount was used to pay:
Effective Outstanding
Down Payment Down Payment
Tranche A Tranche A
R$ 13,19 MM R$ 5,18 MM
US$ 8,69 MM US$ 3,42 MM
CVA Loan
R$ 521 MM
Tranche B Tranche B
R$ 13,78 MM R$ 9,26 MM
Net Amount US$ 3,16 MM US$ 2,13 MM
Receveid R$
209MM
Tranche C Tranche C
Intra-sector R$ 53,83 MM R$ 51,16 MM
Obligations US$ 6,01 MM US$ 5,71 MM
R$ 312 MM
Tranche D Tranche D
R$ 62,53 MM R$ 76,85 MM
US$ 3,4 MM US$ 4,17 MM
The remaining Down Payment will be made with the funds from the 3rd tranche of Rationing
10

11. ST X LT Indebtedness
R$ 5.612 mm
R$ 5.228 mm
1.090
15% 808 19%
4.420 4.522
85% 81%
1Q04 2 Q04
LT ST CVA
11

12. Indebtness 2nd Quarter 2004
• The maturities of debts in US$ until the end of 2006 are Hedged
Consolidated debt - Mar/31/2004 Consolidated debt – Jun/30/2004
(R$5.2 bn, of which R$1.2 bn (R$5.6 bn, of which R$1.2 bn
denominated in US$)* denominated in US$)*
76% 78%
R$ R$
22%
US$ US$
24%
20% Exchange 5,4% Exchange
Hedge of 16,3% Hedge of 75,1% Exposure
Exposure
(*) Values converted by the X-rate of the end of each month:
Mar/ 2004 – 2,9086
Jun/ 2004 – 3,1075
12

13. 2004 Amortization Schedule
R$ Million
Effective Provision
Maturity of
Commercial Pappers
66
US$ 42,9 million 48
162
6
143 143
5 33 32
4
11 31
11 12 12 12 12 12 32 32 33
35 33 43
30 30 30 30 30 30
15 15 15
Jan Feb Mar Apr May Jun Down Jul Aug Sep Oct Nov Dec Outstanding
Payment Downpayment
R$ BNDES US$ *
(*) Values converted using the X-rate of 3.1075 for the months as of July 2004.
For the effective values, X-rate of the end of each month was used.
13

14. Ratings
FITCH International Scale Local Currency S&P FITCH International Scale Foreign Currency
AAA AAA AAA
AA+ AA+ AA+
AA AA AA
AA- AA- AA-
A+ A+ A+
A A A
A- A- A-
BBB+ BBB+ BBB+
BBB BBB BBB
BBB- O O O BBB- BBB-
BB+ O BB+ BB+
BB X X BB BB
BB- X BB- BB- O XO X
B+ B+ B+ X O
B X B B X
B- O O B- B- O O
CCC+ CCC+ CCC+
CCC X CCC CCC X
CCC- X CCC- CCC- X
CC X CC CC X
C O C C O
DDD XO O SD DDD O X O X
DD X D DD X
D X D
2000 2001 2002 2003 2004 2000 2001 2002 2003 2004
X S&P
O Fitch Watch Positive
It is worth mentioning that S&P shall reassess the rating recently attributed to the
Company after it completes the assessment of Eletropaulo’s financial projections.
14

15. Tariff Revision
Privatization Revision Revision
Year 0 1 2 3 4 5 6 7 8 9 10
Annual Adjustment Annual Adjustment
(X Factor = 0 in the first 4 years) (X Factor/=0)
18,62%*
Average Index Average Index
Consumer Group
(considering adjustment of 17.91%) (considering adjustment of 18.62%)
High Voltage
24,03% 24,81%
(2,3 kV or higher)
Baixa Tensão
13,96% 15,36%
(below of 2,3kV)
FINISH 2006
* The index of 17.91% will be applied until Cesp solves its situation of default with the payment of some sector charges
15

16. Tariff Evolution
20%
18%
3,39% 100% CVA
16% 2003-2004
14% 50 % CVA
4,12%
2002-2003
12%
10%
8%
9,42%
6%
4%
2%
1,70%
0%
1999 2000 2001 2002 2003 2004
Parcel B Parcel A CVA Deferred CVA 2003/2004 IGPM IPCA
16

17. X-Factor – Aneel`s Res. n# 055
X (Xe + Xc) x (IGPM - Xa) + Xa
1,08%
(2,37% + 0,71%)
(9,61% - 1,08%)
X 4.43% IGPM -X 1,05182
17

18. 18

19. Contracts Portfolio
100%
Piratininga
75% Nacional
Bragantina
Bandeirante
50%
Elektro
CPFL
25% Eletropaulo - IC
Eletropaulo - BC
0%
2003 2004 2005 2006
19

20. Tariff Adjustment
• The tariffs of initial contracts are adjusted annualy in accordance with the
calculation formula provided for in the Concession Contract:
Tariff Adjustment Index = VPA + VPB x IGP-M
Revenue
• In February, the contracts of Empresa de Eletricidade Bragantina S.A.
(“EEB”) and Companhia Nacional de Energia Elétrica (“CNEE”) were
adjusted by 8.20% on average
• In April, the initial contract with CPFL - Companhia Paulista de Força e Luz
was adjusted by 6.15%
• Following event: In July, the Initial and Bilateral contracts with Eletropaulo
were adjusted by 6.99% and 9.61%, respectively
• The remaining initial contracts will be adjusted in August (Elektro) and
October (Piratininga and Bandeirantes)
20

21. Energy Balance – 1st Half
Caconde
234.265 CPFL
Gross Generation x Billed Energy 555.199
Euclides
in MWh
322.063 Bandeirante
Limoeiro 290.732
94.044
Eletropaulo - CI
Água Vermelha 937.696
3.091.165
Barra Bonita TOTAL BILLED Elektro
310.318 469.379
6.042.054 5.596.401
Bariri Bragantina
=
339.386 110.637
Ibitinga
Nacional
382.943
69.483
Promissão
536.181 Piratininga
MRE 300.516
Nova Avanhandava
714.839 Eletropaulo - Bilateral
AES Tietê generated more than 8% of
Mogi Guaçu its assured energy 2.862.758
16.850
* After deducing own consumption and transmission losses, the difference is addressed to the Energy Reallocation Market - MRE
21

22. Stored Energy
Southeast Reservoirs
90
70
GW - month
50
30
10
Nov
Out
Fev
Jul
Jan
Jun
Ago
Dez
Abr
Mai
Set
Mar
2000 2001 2002 2003 2004
Source: National System Operator – ONS; July/04
22

23. Statements of Results 1st Half
in R$ million 2003 1st Half 03 1st Half 04 Increase due to the replacement of another
25% of the energy contracted throught
bilateral contracts
Net revenue 778,8 347,8 493,3 41,8% Tariff rewiew of three initial contracts
Feb/04: “Financial Excess” (R$7,3 thousand)
Provision for energy from Itaipu
Operating Expense (184,1) (100,2) (138,1) 37,8% Purchase of energy from Duke
Free and short-term energy
Transmission and connection charges
Ebitda 594,7 279,7 386,9 38,3% The increase of operating expenses did not
absorb all the increase of the net revenue
Reduction of the financial expenses (IGP-M
Financial Revenue (251,7) (163,5) (142,4) -12,9% lower than that of the same period in the
(Expense) previous year)
Increase of financial expenses due to the
increase of cash
Result before taxes
246,5 84,0 212,5
Grow of revenue
Net Profit 195,4 55,4 140,2 153% Financial expenses lower than that of the 1Q03
23

24. Conclusion
• Eletropaulo closed the 2nd quarter of • The profit of R$140 million presented by
2004 with a net profit of R$8.1 million, as Tietê represents an increase of 153% in
opposed to the loss of R$13 million of the relation to the same period in 2003,
1st quarter, as a result of the recovery of confirming our projections of revenue
its billed market and profitability growth
• Eletropaulo has been successful in its • The distribution of dividends to Tietê’s
program for retention of potentially free shareholders in the amounts R$87.3
consumers, reducing its potential loss. million in May, relating to the profit
remaining from 2003 and R$66.6 million
on August 10, relating to 50% of the profit
• Eletropaulo permanently solved its
verified in the first half of 2004, reinforces
liquidity problem and presently has an
Tietê’s position as a Company that is
indebtedness level sustainable and
committed to the return on its
compatible with its cash generation,
shareholders’ investments.
besides of strongly reduced its exchange
rate exposure to 5.4% of the debt in
dollars.

25. Resultados do 2º trimestre 2004
12 de agosto de 2004
25