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Apresentação institucional 3_q11_en_v5

AES Brasil Group is a large energy company in Brazil comprised of four companies in the sectors of energy generation and distribution. It has been operating in Brazil since 1997, and has invested $6.9 billion from 1998-2010. It employs over 7,400 people and has good corporate governance and sustainability practices. A significant portion of AES Tietê's billed energy and net revenues comes from its long-term bilateral contract to supply energy to AES Eletropaulo, Brazil's largest electricity distribution company.

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Institutional February, 2012 1
AES Brasil Group • Presence in Brazil since 1997 • Comprised of four companies in the sectors of energy generation and distribution • 7.4 thousand AES Brasil People • Investments 1998-2010: R$ 6.9 billion • Good corporate governance practices • Sustainable practices in businesses • Safety as a main value • Strong cash generation capacity • 25% of minimum pay-out according to bylaws • Differentiated practice of dividend distribution since 2006: – AES Tietê: 100% of net income on quarterly basis – AES Eletropaulo: distribution above the minimum required (25% of net income) on semi-annual basis 2
AES Brasil widely recognized in 2009-2011  Management excellence  Quality and safety  Environmental concern (AES Eletropaulo) (AES Tietê) (AES Tietê) (AES Eletropaulo) (AES Sul) (AES Brasil) (AES Eletropaulo) (AES Eletropaulo) (AES Tietê) (AES Brasil) (AES Tietê) (AES Tietê) (AES Tietê) (AES Eletropaulo) (AES Eletropaulo) 3
Shareholding Structure AES Corp BNDES C 50.00% + 1 share C 50.00% - 1 share P 0.00% P 100% T 46.15% T 53.85% Cia. Brasiliana de Energia C 71.35% C 76.45% C 99.99% C 99.00% P 32.34% P 7.38% T 99.70% T 99.99% T 99.00% T 52.55% T 34.87% AES AES AES AES AES Sul Infoenergy Uruguaiana Tietê Eletropaulo C = Common Shares P = Preferred Shares T = Total 4
Listed Companies Shareholding Composition ¹ ¹ Free Float Others² Market Cap³ 16.1% 19.2% 56.2% 8.5% R$ 4.8 bi 24.2% 28.3% 39.5% 8.0% R$ 8.5 bi 1 - Parent companies, AES Corp and BNDES, have equal voting capital on the Companies: 38.2% on AES Eletropaulo and 35.7% on AES Tietê 2 - Includes Federal Government and Eletrobrás shares in AES Eletropaulo and AES Tietê, respectively 3 - Base: 09/30/2011. Considers preferred shares for AES Eletropaulo and preferred and common shares for AES Tietê 5
AES Brasil is the second largest group in Ebitda1 – 2010 (R$ Billion) electric sector 4.5 4.2 3.4 3.0 2.6 2.0 1.6 1.6 1.5 0.6 CEMIG AES BRASIL CPFL NEOENERGIA TRACTEBEL CESP EDP LIGHT COPEL DUKE 1 Net Income – 2010 (R$ Billion) 2.3 2.2 1.8 1.6 1.2 1.0 0.6 0.6 0.2 0.1 CEMIG AES BRASIL NEOENERGIA CPFL TRACTEBEL COPEL EDP LIGHT DUKE CESP 6 1 – excluding Eletrobrás Source: Companies’ financial reports
AES Tietê is an important player among private Generation Installed Capacity (MW) - 2012 1 energy generators Main privately held Companies AES TIETÊ CPFL DUKE  AES Tietê is the 2nd largest among EDP 2,3% 2,3% 1,9% 1,6% TRACTEBEL NEOENERGIA private generation companies and 10th 6,1% 1,2% ENDESA 0,8% largest overall LIGHT 0,8%  Approximately 78% of country’s generation installed capacity is state- DEMAIS CHESF ³ 26% 9% owned2 FURNAS ³  There are three mega hydropower plants 8% ELETRONORTE ³ under construction in the North region of 8% COPEL ITAIPU ³ Brazil with 18 GW in installed capacity 4% 6% PETROBRÁS ELETRONUCLEAR ³ – Santo Antonio and Jirau (Madeira River): 7 GW 5% CEMIG CESP 3% 6% 6% CGTEE ³ – Belo Monte (Xingu River): 11 GW 1% ELETROSUL³ 0,5% 1- Sources: ANEEL – BIG (January, 2012) and Companies websites 2- Source: Merrill Lynch 7 Total Installed Capacity: 117 GW 3 – Eletrobrás, totaling 35%
AES Brasil is the largest distribution group in Brazil Consumption (GWh) - 2010 13% • 63 distribution companies in Brazil distributing 419 TWh 12% 40% A Brasil AES • AES Brasil is the largest electricity CPFL Energia distribution group in Brazil: 10% – AES Eletropaulo: 43 TWh distributed, Cemig representing 10.3% of the Brazilian 7% 6% 6% 6% market Neo Energia Consumers – Dec/2010 – AES Sul: 9 TWh distributed, 12% Copel representing 2.2% of the Brazilian market 30% Light 12%  Distribution companies’ operations are EDP restricted to their concession areas 12% Outros  Acquisitions must be only performed by 5% the holdings of economic groups 7% 7% 16% 8
Energy Sector in Brazil
Energy Sector in Brazil: business segments Free Clients Distribution Transmission Generation • Consumption of 105 TWh • 63 companies • 68 companies • 13 groups controlling 76% of (25% of Brazilian total market) • 415 TWh of energy • 68% private sector total installed capacity • Conventional sources: distributed in 2010 • 22% private sector • High voltage transmission above 3000 kW • 1,862 power plants • 68 million consumers (>230 kV) • Alternative sources: • 115 GW of installed capacity • 67% private sector • 98.648 km in extension between 500 kW e 3000 kW • 73% hydroelectric • Annual tariff adjustment lines (SIN)¹ • Large consumers can • 17% thermoelectric • Tariff reset every four or • Regulated public service purchase energy directly five years with free access • 5% biomass from generators • Regulated public service • Regulated tariff (annually • 4% SHPP • Free contracting • Regulated contracting adjusted by inflation) environment • 1% Wind environment ¹ Interconected National System • Contracting environment – free and regulated markets 10 ² Small Hydro Power Plants Sources: EPE, Aneel, ONS and Merrill Lynch
Energy sector in Brazil: contracting environment Regulated Market Free Market Generators, Independent Power Producers Generators and Independent (IPPs), Trading companies and Auto producers Power Producers (IPPs) Auctions: New Energy Bilateral contracts (PPAs1) and Existing Energy Distribution companies Free clients • Main auctions (reverse auctions): – New Energy (A-5): Delivery in 5 years, 15-30 years regulated PPA1 – New Energy (A-3): Delivery in 3 years, 15-30 years regulated PPA1 – Existing Energy (A-1): Delivery in 1 year, 5-15 years regulated PPA1 1 – Power Purchase Agreement 11
Energy sector in Brazil: demand perspectives Macroeconomic Scenario GDP - Annual growth (%) EPE’s1 Assumptions: 2004-2008 2010 2011 2012-2015 • Latest EPE’s estimates considers an 3.6 7.2 4.0 5.0 economic activity slowdown in Brazil (industrial stagnation and higher inflation). Brazilian Consumption Evolution (TWh) 5.0% p.a. • For the next years, the good performance of domestic market and the perspectives 3.6% 515 4.0% p.a. 493 of higher investments are factors 469 indicating that the Brazilian economy will 444 423 recover the growth path observed before 408 380 376 the global crisis. 369 349 • Brazil will also benefit from the growth of emerging markets, with impact on exports of primary products. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 12 1 - Source: EPE (Energetic Research Company) / ONS (National System Operator) – Second Review – september/11
Energy sector in Brazil: supply perspectives Installed Energy Capacity in Brazil1  Total installed capacity is expected to reach 171 GW by 2020  Brazilian energy matrix will present higher diversification, but in the next 10 years hydropower plants will continue to prevail 2011: 115 GW 2020: 171 GW th: 4.5% p.a. Annual Grow 2 SHPP: 4% .a) (GDP: 5.0% p Natural gas: 7% 2 SHPP: 4% Biomass: 5% Natural gas: 8% Biomass: 5% Oil: 5% Oil: 3% Nuclear: 2% Nuclear: 2% Others: 17% Coal: 2% Hydro: 67% Diesel: 1% Others: 10% Hydro: 73% Coal: 2% Diesel: 1% Wind: 7% Wind: 1% Steam: 1% Steam: 0% 1- Source: EPE (Energetic Research Company), Ten-year Energy Plan 2020, May/2011 2 - Small Hydro Power Plant 13
Energy sector in Brazil: regulatory methodology Tariff Reset and Readjustment • Tariff Reset is applied each 4 years for AES Eletropaulo − Base date: Jul/2011 • Parcel A Costs − Parcel A: costs are largely pass trough the tariff Energy − Non-manageable costs that are largely Purchase passed through to the tariff − Parcel B: costs are set by ANEEL Transmission − Incentives to reduces costs Sector Charges • Tariff Readjustment: annually − Parcel A : costs are largely pass trough the tariff Regulatory − Parcel B: cost are adjusted by IGPM +/- X(1) Factor Opex • Regulatory Opex: (PMSO) – Efficient operating cost determined by ANEEL (National Electricity Agency) X WACC Investment Remuneration • Remuneration Asset Base: Remuneration Asset Base – Prudent investments used to calculate the investment remuneration (applying X Depreciation Depreciation WACC) and depreciation Regulatory Parcel A - Non-Manageable Costs Ebitda Parcel B - Manageable Costs 14 1 – X Factor: index that captures productivity gains
Energy sector in Brazil: regulatory methodology 3rd Cycle of Tariff Reset – X Factor X FACTOR Pd Q T = + + Distribution Operational expenses DEFINITION Quality of service productivity trajectory To capture To stimulate the To implement operational OBJECTIVE productivity gains improvement of the expenses trajectory during with distribution service quality the tariff cycle Defined at tariff reset, considering the Defined at each tariff Defined at tariff reset, average productivity of readjustement, considering the sector adjusted by the according to the expenses established by APLICATION market growth and variation of SAIDI and reference company and variation of consumer SAIFI and comparative benchmarking units of the distributor performance of discos methodologies 15 since last reset
AES Tietê Overview Generation facilities  17 hydroelectric plants within the states of São Paulo and Minas Gerais  30-year concession valid until 2029; renewable for another 30 years  Installed capacity of 2,659 MW, with physical guarantee1 of 1,280 MW average  Almost all the amount of energy that AES Tietê can sell in the long term is contracted to AES Eletropaulo until the end of 2015  AES Tietê can invest in generation, its main activity, and operate in energy trading  343 employees 17 1 - Amount of energy allowed to be long term contracted
Generated energy shows high operational availability Generated energy (MW avarage1) Generated energy by power plant (MW avarage1) 130% 125% 129% 126% 118% 1,665 1,703 1,599 1,512 1,550 2008 2009 2010 9M10 9M11 Generation - Mwavg Generation/Physical guarantee 1 – Generated energy divided by the amount of hours * Caconde, Limoeiro, Mogi and SHPPs 18
A significant amount of billed energy and net revenues comes from the bilateral contract with AES Eletropaulo Energy Billed (GWh) Net Revenues (%) 14,706 14,729 117 301 -3% 94% 13,148 1,150 1,340 11,483 331 11,114 2,331 215 1,680 1,980 346 1,135 1,188 1,554 1,535 11,138 11,108 11,108 8,578 8,045 1% 3% 2% AES Eletropaulo 1 2008 2009 2010 9M10 9M11 2 Other bilateral contracts AES Eletropaulo MRE Spot Market Other bilateral contracts Spot Market 1 – Leap Year 2 – Energy Reallocation Mechanism MRE 19
Investments in the modernization of Nova Avanhandava, Ibitinga and Caconde power plants Investments (R$ million) 9M11 Investments 84% % 169 44 R: C AG 18 +122% 119 14 82 53 4% 12% 56 12 151 13 7 105 70 43 46 Equipment and Modernization 2009 2010 2011 (e) 9M10 9M11 New SHPPs* Investments New SHPPs* IT projects *Small Hydro Power Plants 20
Growth opportunities Perspectives • Project features - Combined cycle using natural gas - Estimated investment of R$ 1.1 billion - Natural gas consumption: 2.5 million m3/day - 550 MW of installed capacity • Updates - Environmental license obtained on October, 20th 2011 (valid for 5 years) - Gas unavailability for A-5 Energy Auction in 2011 • Next events - Obtain installation license - Participate in A-3 Auction expected to be realized in March 2012 - Evaluate energy offering in the free market 21
Financial highlights* Net Revenue (R$ million) Ebitda (R$ million) CAGR: 5% CAGR: 3% +1% +1% 1,254 1,255 1,320 1,035 1,048 9 1,605 1,670 1,754 1,334 1,344 1,309 1,311 (54) 2008 2009 2010 9M10 9M11 2008 2009 2010 9M10 9M11 78% 75% 75% 78% 78% Recurring Non-recurring Ebitda margin (*) 2009 and 2010 numbers in IFRS 22
Practice of total net income distribution on quarterly basis* Net Income and Dividend Pay-out1 (R$ million) 117% 110% 100% 12% 11% 11% 737 706 692 31 +2% 570 -5% 582 816 784 28 542 (74) (78) (40) (36) 2008 2009 2010 9M10 9M11 Pay -out Yield Pref Recurring Non-recurring IFRS Effect 1 – Gross value 23 (*) 2009 and 2010 numbers in IFRS
Debt profile Net Debt (R$ billion) Amortization Schedule – Principal (R$ million) 0.3x 0.3x 0.3x 0.4x 0.3x 300 300 300 0.6 0.4 0.4 0.4 0.5 2008 2009 2010 9M10 9M11 2013 2014 2015 Net debt Net debt / EBITDA • September, 2011: – Average debt cost in 9M11 was 115% of CDI1 p.a. or 15% p.a. – Average debt maturity of 2.8 years – Net debt: R$ 0.6 billion – Net debt/EBITDA: 0.4x 24 1 – Brazilian Interbank Interest Rate
Capital Markets AES Tietê X Ibovespa X IEE Daily Avg. Volume (R$ thousand) 13,922 12,828 YTD1 110 +5% 10,187 4,239 3,370 +2% 8,160 -2% 2,101 90 2,692 -25% 9,683 9,458 70 8,086 5,468 50 Dec-10 Mar-11 Jun-11 Sep-11 2008 2009 2010 9M11 3 AES TIETÊ PF TSR2 IBOVESPA IEE Preferred Common • Market Cap4: R$ 8.5 billion • BM&FBovespa: GETI3 (common shares) and GETI4 (preferred shares) • ADRs negotiated in US OTC Market: AESAY (common shares) and AESYY (preferred shares) 1 – Index: 12/30/2010 = 100 2 – Total Shareholders’ Return 3 – Electric Energy Index 4 – Index: 09/30/11 25
AES Eletropaulo Overview Concession Area  Largest electricity distribution company in Latin America  Serving 24 municipalities in the São Paulo Metropolitan area  Concession contract valid until 2028; renewable for another 30 years  Concession area with the highest GDP in Brazil  45 thousand kilometers of lines, 1.2 million electricity poles and 6.1 million consumption units in a concession area of 4,526 km2  Total distributed volume of 43 TWh in 2010  AES Eletropaulo, as a distribution company, can only invest in assets within its concession area  5,647 employees 27
Consumption Evolution Total Market1 (GWh) 9M11 Consumption by Class (%) CAGR: 3% 6% 14 9 14% 43,345 45,000  41,243 41,269 36% 26 40,000  7,911 +5% 7,383 6,832 33,769 35,000  32,198 18% 43 30,000  5,846 6,246 26% 28 25,000  20,000  33,860 34,436 35,434 17 15,000  27,523 26,352 10,000  36 5,000  26 0  2008 2009 2010 9M10 9M11 Brazil AES Eletropaulo ¹ Captive Market Free Clients Residential Commercial Industrial Others 28 1 – Net of own consumption
Industrial class Industrial class X industrial production in São Paulo State 15% 10% 5% • Industrial consumption is 0% influenced by manufacturing -5% industry performance in São Paulo -10% Economic crisis Economic  recovery State -15% Jul-07 May-08 Mar-09 Jan-10 Nov-10 Sep-11 • Recent slowdown is influenced Industrial Production of SP (% 12 months) Industrial (% 12 months) by the decrease of industrial Consumption of industrial class by activity – AES Eletropaulo production in 2011 • Moreover, the migration of clients to other regions of São Paulo State Vehicles, and of the country negatively Chemical, Rubber, Other industries Plastic and Metal 50% products impacts this class 50% 29
Residential class Residential class X Average income in São Paulo Metropolitan Area 1,800 4,800 • Residential class is influenced by Average Income R$ - SP (q-2*) income in São Paulo Metropolitan Residential (GWh) 1,600 4,300 Area 1,400 3,800 • Maintenance of the income expansion trend in São Paulo 1,200 3,300 Metropolitan Area will sustain growth of residential class 1,000 2,800 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 • Average annual growth (2003- Avg Real Income R$ - SP (t-2) Residential (GWh) 2011): Consumption per consumer (in kWh) – YTD September – total residential market: 5.5% y.y. - 9.7% 260 – consumption per consumer: 2.1% y.y. 235 228 228 220 217 220  Consumption per consumer is 212 206 198 198 still 9.7% lower than in 192 the period before the rationing * 2 quarters of delay in relation to consumption 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 30
Investments amounted R$ 530 million in 9M11 Investments Breakdown (R$ million) Investments 9M11 (R$ million) 3% :1 166 GR CA 744 800  682 29 128 700  47 28 +38% 600  516 530 16 383 16 21 500  37 27 125 400  22 715 654 300  478 513 200  362 Maitenance 100  Client Service 0  System Expansion 2009 2010 2011(e) 9M10 9M11 Losses Recovery Capex Paid by Customers IT Paid by the Clients Others 31
SAIDI & SAIFI SAIDI - System Average Interruption Duration Index SAIFI - System Average Interruption Frequency Index 8.41 7.87 7.39 10,92 10,09 9,32 9,20 11,86 10,60 10,30 11,95 6.17 5.43 6.06 5.42 5.20 2008 2009 2010 9M10 9M11 2008 2009 2010 9M10 9M11 5th 8th 7th 1st 7th 3rd SAIDI (hours) SAIDI Aneel Reference SAIFI (times) SAIFI Aneel Reference ABRADEE ranking position among the 28 utilities with more than 500 thousand customers ► 2011 SAIDI ANEEL Reference: 8.68 hours ► 2011 SAIFI ANEEL Reference: 6.93 times 32 Sources: ANEEL, AES Eletropaulo and ABRADEE
Operational Indexes Losses (%) Collection Rate (% over Gross Revenues) 11.6 11.8 11.0 102.4 103.0 10.9 10.6 101.1 100.3 98.5 5.1 5.3 4.4 4.5 4.1 6.5 6.5 6.5 6.5 6.5 2008 2009 2010 9M10 9M11 2008 2009 2010 9M10 9M11 Technical Losses ¹ Commercial Losses ANEEL References: From Jul/09 to Jun/10: 12.32% From Jul/10 to Jun/11: 12.45% 33 1 – Current technical losses used retroactively as a reference
Financial Highlights* Net Revenues (R$ million) Ebitda (R$ million) 5 % R: 1 9% CAG 2,413 R: CAG 9,697 - 8% 10,000  8,786 426 +5% 1,775 1,870 9,000  7,530 1,696 1,716 7,046 7,371 87 339 8,000  - 89 301 58 197 7,000  245 332 6,000  5,000  4,000  1,607 1,491 1,648 3,000  1,325 1,326 2,000  1,000  0  2008 2009 2010 9M10 9M11 2008 2009 2010 9M10 9M11 Recurring Regulatory assets and liabilities Non-recurring 34 (*) 2009 and 2010 numbers in IFRS
Practice of dividend distribution on semi-annual basis* Net Income and Dividend Payout1 (R$ million) 115.4% 120.0% 35.0% 101.5% 93.4% 28.6% 100.0% 30.0% 20.4% 25.0% 80.0% 20.3% 1,348 20.0% 60.0% -15% 15.0% 40.0% 1,156 1,027 350 10.0% 1,037 20.0% 5.0% 374 885 0.0% 329 236 282 0.0% 89 160 171 214 698 762 622 583 582 2008 2009 2010 9M10 9M11 Pay-out Yield PN Net Income - ex one-off and regulatory assets and liabilities Regulatory assets and liabilities (*) 2009 and 2010 numbers in IFRS 35 1 – Gross amount One-off
Debt Profile Net Debt (R$ billion) Amortization Schedule – Principal (R$ million) 1.5x 1.4x 1.2x 0.9x 1.0x 1,047 579 2.9 48 847 2.5 2.7 2.4 2.6 360 390 437 346 62 277 55 283 80 45 532 51 58 22 281 301 335 375 226 225 180 2008 2009 2010 9M10 9M11 2011 2012 2013 2014 2015 2016 2017 2018 2019 - 2028 Net Debt/Ebitda Adjusted with Fcesp Local Currency (ex FCesp) Fcesp² Net Debt (R$ billion) • September, 2011: – Average debt cost in 3Q11 was 112% of CDI1 or 12.6% p.a. – Average debt maturity of 6.9 years – Net debt: R$ 2.9 billion – Net debt/EBITDA of 1.2x adjusted with Pension Fund 36 1 – Brazilian Interbank Interest Rate 2 – Pension Fund
Capital Markets AES Eletropaulo X Ibovespa X IEE Average Daily Volume (R$ thousand) 9M11 1 28,500 A 29,000.00 125 25,677 B 27,000.00 24,496 115 + 11% 25,000.00 105 21,960 + 2% 23,000.00 95 21,000.00 85 - 11% 19,000.00 75 - 24 % 17,000.00 65 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 15,000.00 2008 2009 2010 9M11 Ibovespa IEE² AES Eletropaulo PN AES Eletropaulo TSR³ A Ex dividends: 04/30/2011 B Ex dividends: 08/11/2011 • Market cap4: R$ 4.8 billion • BM&FBOVESPA: ELPL3 (common shares) and ELPL4 (preferred shares) • ADRs at US OTC Market: EPUMY (preferred shares) 1 – Index: 12/30/2010 = 100 2 – Electric Energy Index 37 3 – Total Shareholders’ Return 4 - Index: 09/30/11. Calculation includes only preferred shares.
Social Responsibility
Commitment with sustainability DEVELOPMENT & VALUATION  INNOVATION IN PRODUCTS  SUSTAINABLE  ENERGY  EFFICIENCY IN THE USE OF  SAFETY OF COWORKERS, SUPPLIERS  GENERATION RESOURCES AND SERVICES AND  COMMUNITIES ... means using  ... means allocating  ... means an attitude of  ...means knowing,  ... means providing  an  economic, social and  them in such a manner  protection  of our  involving in a  environment and  environmental  that balanced and  employees, suppliers  transparent form and  culture that inspire  resources in a balanced  perennial results are  and  population. positively influencing  solutions that improve  fashion, preserving the  ensured for all  our coworkers,  people’s lives, ensuring   present time and  stakeholders, abiding by  suppliers and  quality and excellence  ensuring the future the values practiced by  communities to build a  in the services rendered  the company collective agenda that  to the customer. generates value for  everyone – Education for sustainability Cross-cutting – Stakeholders active participation themes – Communication, knowledge and information 39
Social Responsibility: Main Projects Development and transformation of communities Education, culture  “Casa de Cultura e Cidadania” Project and sport It offers courses and activities in culture and sport for 5.2 thousand children and teenagers in 7 units of AES Brazil. In two AES Eletropaulo’s units the project benefits 1.6 thousand people in low-income communities. Children education and development “Centros Educacionais Luz e Lápis” Project Two units in São Paulo attending 320 children from 1 to 5 years old, in social vulnerability. Education about Safety and Efficiency in energy consumption “AES Eletropaulo nas Escolas” Project Education about safe and efficient use of energy to 4.5 thousand teachers and 404 thousand students from 900 public schools, between 2010 and 2011. The actions include recreational activities offered in adapted trucks. 40
Social Responsibility: Main Projects Inclusive  Women inclusion and income generation and Social Business “Fornecedor Cidadão” Project Empowerment of female electricians to work on energy cutting and reconnection. Project started in 2010 with 41 women. Social inclusion and income generation “Empreender com energia” Project In partnership with the “Aliança Empreendedora” Institution, community residents of Vl. Guacuri neighborhood – SP are empowered to entrepreneurship, in groups or individually, in order to improve their income and life quality. Starting in 2010, the project now has two productive groups and 19 individual entrepreneurs. 41
Social Responsibility: Main Projects Converting Consumers to Clients A project developed to work on electrical network regularization. Since 2004, more than 437 thousand families in low income communities were benefited from better energy supply conditions and social inclusion. The project has already substituted: 880 thousand lamps 22 thousand refrigerators and 7 thousand showers for more efficient equipments “Energia do Bem” Project Active participation of employees to transform low income communities and to work on institutions development. Starting in 2008, the program counts on the participation of 12% of AES Eletropaulo employees, in activities like winter clothes campaigns and support in several activities institutions. www.energiadobem.com.br 42
Attachments
Costs and Expenses Costs and operational expenses1 (R$ million) 433 415 351 187 299 296 201 112 125 115 239 246 214 174 181 2008 2009 2010 9M10 9M11 Energy Purchase, Transmission  and Connection Charges, and Water Resources  Other Costs and Expenses 2 1 – Do not include depreciation and amortization 2 - Personnel, Material, Third Party Services and Other Costs and Expenses 44
Costs and Expenses Costs and operational expenses1 (R$ million) PMS and Other Expenses (R$ million) 1,306 1,255 1,193 6,745 254 165 6,431 5,893 970 909 1,255 379 1,306 5,006 5,129 1,193 352 443 202 67 970 909 329 368 308 5,125 5,490 4,700 700 4,036 4,220 647 485 461 475 3 2008 2009 2010 9M10 9M11 2008 2009 2010 9M10 9M11 Energy Supply and Transmission Charges PMS² and Others Expenses Personnel and Payroll Material and Third Party Others 1 – Do not include depreciation and amortization 2 - Personnel, Material, Third Party Services and Other Costs and Expenses 3 – In 2009 expenses with Pension Fund increased due to inflation rate (IGP-M) increase and reversal of R$ 63 million in 4Q08 caused by actuarial liability adjustment 45
Action Plan: R$ 242 million with increase of R$ 122 million in emergency teams  availability of 353 emergency teams Concluded in  38% increase in call center positions (150 positions) September 2011  doubling of SMS receipt capacity to 100 thousand / day  training of 276 maintenance and construction electricians  hiring of 30 additional pruning electricians  training of 240 electricians for emergency attendances in powered grid  beginning of 276 maintenance and construction electricians activities Concluded in and training conclusion of other 304 November 2011  300 additional stand by positions in call center for emergency situations  increase of call center service capacity by 27 times from 2 thousand to 54 thousand calls/hours December to  increase of 120 emergency teams, totaling 473 teams March 46
AES Tiete's expansion obligation Privatization Notice Judicial Notice: Aneel informed AES Tietê was summoned to Efforts being made by the established the The Company was notified by that the issue is answer a Lawsuit filed by the obligation to expand the the State of São Paulo Company to meet the not related to the State of São Paulo, which installed capacity in 15% Attorney's Office to present its concession requested the fulfillment of the obligation : (400 MW) until 2007, understanding on the matter, agreement and obligation in 24 months. either in greenfield having filed its response on must be • Long-term energy projects and/or through time, the proceedings were An injunction was granted in addressed with long term purchase ended, since no other action order to have a project contracts (biomass) the State of São agreements with new submitted within 60 days. Paulo was taken by the Attorney's totaling an average of 10 plants Office MW •SHPP São Joaquim - started operating in July, 1999 2007 2011, with 3 MW of Ago/08 Out/08 Jul/09 Set/10 Set/11 Nov/11 installed capacity •SHPP São José – under construction, with 4 MW Company faces restrictions until of installed capacity, Popular Action: deadline: In response to a Popular Lawsuit: expected to be Due to the plaintiffs failure • Insufficiency of hydro resources Action (filed by to specify the persons that The Company operational in 2012 individuals against the should be named as appealed to the • Environmental restrictions Federal Government, Defendants, a favorable State of Sao • Thermo-SP - Project of • Insufficiency of natural gas supply Aneel, AES Tietê and Paulo State Court decision was rendered by a 550MW gas fired • New Model of Electric Sector (Law # Duke), the Company the first Instance Court of Appeals and 10,848/2004), which forbids bilateral presents its defense the injunction was thermal plant (an appeal has been filed) agreements between generators and before the first instance stayed distributors 47
Eletrobras Lawsuit State-owned Eletropaulo was Next Steps: spun-off into four Eletrobras, after On July 7, the companies and, winning the judge determined 1 - The according to our Eletrobras and Eletrobras auditing Stated-owned interest Eletropaulo and understanding CTEEP appealed requested the 1st procedure (AP) Eletropaulo calculation CTEEP to based on the to the Superior level of court is expected to borrowed money discussion, filed present their spin-off Court of Justice judge to appoint begin by the 1st from Eletrobras an Execution Suit considerations, agreement, the (SCJ) an expert half of 2012 to collect the due which occurred in discussion was amount August 2 – AP is transferred to expected to be CTEEP concluded in at least 6 months 3 - After AP’s conclusion, a 1st level court Nov/86 Dec/88 Jan/98 Apr/98 Sep/01 Sep/03 Oct/05 Jun/06 May/09 Dec/10 Jul/11 decision will be released 4 - Appealing to the 2nd instance court 5 - Foreclosure starts. State-owned Presentation of The 2nd level of Eletrobras guaranty Eletropaulo and Privatization requested the court excluded The SCJ decided Eletrobras event . State- beginning of the 6 - Request to AES Eletropaulo to send the disagreed on how owned appraisal withdraw the from the Execution Suit to calculate Eletropaulo procedure, which is guaranty discussion based back to the 1st interest over that became AES under 1st. instance on the spin-off level of court 7 - Appeals to loan and a lawsuit Eletropaulo court analysis agreement the 3rd instance was started courts 48
Shareholders Agreement On Dec 2003 AES and BNDES signed a Shareholders’ Agreement to regulate their relationship as shareholders of Brasiliana and its controlled companies. The Agreement is available at www.aeseletropaulo.com.br/ri Shareholders can dispose its share at any time, considering the following terms: Right of 1st  Any party with an intention to dispose its shares should first provide the other party the right to buy refusal that participation at the same price offered by a third party Tag along  In the case of change in Brasiliana’s control, tag along rights are triggered for the following rights companies (only if AES is no longer controlling shareholder): – AES Eletropaulo: Tag along of 100% in its common and preferred shares – AES Tietê: Tag along of 80% in its common shares – AES Elpa: Tag along of 80% in its common shares Drag along  Once the offering party exercises the Drag Along clause, offered party is obligated to dispose of all rights its shares at the time, if the Right of 1st Refusal is not exercised by offered party 49
Brazilian Main Taxes AES Tietê AES Eletropaulo • Income Tax / Social Contribution: • Income Tax / Social Contribution: – 34% over taxable income – 34% over taxable income • ICMS (VAT tax) • ICMS: 22% over Revenue (average rate) – deferred tax – Residential: 25% • PIS/Cofins (sales tax): – Industrial and Commercial: 18% – Eletropaulo´s PPA: 3.65% over Revenue – Public Entities: free – Other bilateral contracts: 9.25% over Revenue • PIS/Cofins: minus Costs – 9.25% over Revenue minus Costs 50
Contacts: ri.aeseletropaulo@aes.com ri.aestiete@aes.com + 55 11 2195 7048 The statements contained in this document with regard to the business prospects, projected operating and financial results, 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.

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Apresentação institucional 3_q11_en_v5

  • 1.
  • 2.
    AES Brasil Group •Presence in Brazil since 1997 • Comprised of four companies in the sectors of energy generation and distribution • 7.4 thousand AES Brasil People • Investments 1998-2010: R$ 6.9 billion • Good corporate governance practices • Sustainable practices in businesses • Safety as a main value • Strong cash generation capacity • 25% of minimum pay-out according to bylaws • Differentiated practice of dividend distribution since 2006: – AES Tietê: 100% of net income on quarterly basis – AES Eletropaulo: distribution above the minimum required (25% of net income) on semi-annual basis 2
  • 3.
    AES Brasil widelyrecognized in 2009-2011  Management excellence  Quality and safety  Environmental concern (AES Eletropaulo) (AES Tietê) (AES Tietê) (AES Eletropaulo) (AES Sul) (AES Brasil) (AES Eletropaulo) (AES Eletropaulo) (AES Tietê) (AES Brasil) (AES Tietê) (AES Tietê) (AES Tietê) (AES Eletropaulo) (AES Eletropaulo) 3
  • 4.
    Shareholding Structure AES Corp BNDES C 50.00% + 1 share C 50.00% - 1 share P 0.00% P 100% T 46.15% T 53.85% Cia. Brasiliana de Energia C 71.35% C 76.45% C 99.99% C 99.00% P 32.34% P 7.38% T 99.70% T 99.99% T 99.00% T 52.55% T 34.87% AES AES AES AES AES Sul Infoenergy Uruguaiana Tietê Eletropaulo C = Common Shares P = Preferred Shares T = Total 4
  • 5.
    Listed Companies ShareholdingComposition ¹ ¹ Free Float Others² Market Cap³ 16.1% 19.2% 56.2% 8.5% R$ 4.8 bi 24.2% 28.3% 39.5% 8.0% R$ 8.5 bi 1 - Parent companies, AES Corp and BNDES, have equal voting capital on the Companies: 38.2% on AES Eletropaulo and 35.7% on AES Tietê 2 - Includes Federal Government and Eletrobrás shares in AES Eletropaulo and AES Tietê, respectively 3 - Base: 09/30/2011. Considers preferred shares for AES Eletropaulo and preferred and common shares for AES Tietê 5
  • 6.
    AES Brasil isthe second largest group in Ebitda1 – 2010 (R$ Billion) electric sector 4.5 4.2 3.4 3.0 2.6 2.0 1.6 1.6 1.5 0.6 CEMIG AES BRASIL CPFL NEOENERGIA TRACTEBEL CESP EDP LIGHT COPEL DUKE 1 Net Income – 2010 (R$ Billion) 2.3 2.2 1.8 1.6 1.2 1.0 0.6 0.6 0.2 0.1 CEMIG AES BRASIL NEOENERGIA CPFL TRACTEBEL COPEL EDP LIGHT DUKE CESP 6 1 – excluding Eletrobrás Source: Companies’ financial reports
  • 7.
    AES Tietê isan important player among private Generation Installed Capacity (MW) - 2012 1 energy generators Main privately held Companies AES TIETÊ CPFL DUKE  AES Tietê is the 2nd largest among EDP 2,3% 2,3% 1,9% 1,6% TRACTEBEL NEOENERGIA private generation companies and 10th 6,1% 1,2% ENDESA 0,8% largest overall LIGHT 0,8%  Approximately 78% of country’s generation installed capacity is state- DEMAIS CHESF ³ 26% 9% owned2 FURNAS ³  There are three mega hydropower plants 8% ELETRONORTE ³ under construction in the North region of 8% COPEL ITAIPU ³ Brazil with 18 GW in installed capacity 4% 6% PETROBRÁS ELETRONUCLEAR ³ – Santo Antonio and Jirau (Madeira River): 7 GW 5% CEMIG CESP 3% 6% 6% CGTEE ³ – Belo Monte (Xingu River): 11 GW 1% ELETROSUL³ 0,5% 1- Sources: ANEEL – BIG (January, 2012) and Companies websites 2- Source: Merrill Lynch 7 Total Installed Capacity: 117 GW 3 – Eletrobrás, totaling 35%
  • 8.
    AES Brasil isthe largest distribution group in Brazil Consumption (GWh) - 2010 13% • 63 distribution companies in Brazil distributing 419 TWh 12% 40% A Brasil AES • AES Brasil is the largest electricity CPFL Energia distribution group in Brazil: 10% – AES Eletropaulo: 43 TWh distributed, Cemig representing 10.3% of the Brazilian 7% 6% 6% 6% market Neo Energia Consumers – Dec/2010 – AES Sul: 9 TWh distributed, 12% Copel representing 2.2% of the Brazilian market 30% Light 12%  Distribution companies’ operations are EDP restricted to their concession areas 12% Outros  Acquisitions must be only performed by 5% the holdings of economic groups 7% 7% 16% 8
  • 9.
  • 10.
    Energy Sector inBrazil: business segments Free Clients Distribution Transmission Generation • Consumption of 105 TWh • 63 companies • 68 companies • 13 groups controlling 76% of (25% of Brazilian total market) • 415 TWh of energy • 68% private sector total installed capacity • Conventional sources: distributed in 2010 • 22% private sector • High voltage transmission above 3000 kW • 1,862 power plants • 68 million consumers (>230 kV) • Alternative sources: • 115 GW of installed capacity • 67% private sector • 98.648 km in extension between 500 kW e 3000 kW • 73% hydroelectric • Annual tariff adjustment lines (SIN)¹ • Large consumers can • 17% thermoelectric • Tariff reset every four or • Regulated public service purchase energy directly five years with free access • 5% biomass from generators • Regulated public service • Regulated tariff (annually • 4% SHPP • Free contracting • Regulated contracting adjusted by inflation) environment • 1% Wind environment ¹ Interconected National System • Contracting environment – free and regulated markets 10 ² Small Hydro Power Plants Sources: EPE, Aneel, ONS and Merrill Lynch
  • 11.
    Energy sector inBrazil: contracting environment Regulated Market Free Market Generators, Independent Power Producers Generators and Independent (IPPs), Trading companies and Auto producers Power Producers (IPPs) Auctions: New Energy Bilateral contracts (PPAs1) and Existing Energy Distribution companies Free clients • Main auctions (reverse auctions): – New Energy (A-5): Delivery in 5 years, 15-30 years regulated PPA1 – New Energy (A-3): Delivery in 3 years, 15-30 years regulated PPA1 – Existing Energy (A-1): Delivery in 1 year, 5-15 years regulated PPA1 1 – Power Purchase Agreement 11
  • 12.
    Energy sector inBrazil: demand perspectives Macroeconomic Scenario GDP - Annual growth (%) EPE’s1 Assumptions: 2004-2008 2010 2011 2012-2015 • Latest EPE’s estimates considers an 3.6 7.2 4.0 5.0 economic activity slowdown in Brazil (industrial stagnation and higher inflation). Brazilian Consumption Evolution (TWh) 5.0% p.a. • For the next years, the good performance of domestic market and the perspectives 3.6% 515 4.0% p.a. 493 of higher investments are factors 469 indicating that the Brazilian economy will 444 423 recover the growth path observed before 408 380 376 the global crisis. 369 349 • Brazil will also benefit from the growth of emerging markets, with impact on exports of primary products. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 12 1 - Source: EPE (Energetic Research Company) / ONS (National System Operator) – Second Review – september/11
  • 13.
    Energy sector inBrazil: supply perspectives Installed Energy Capacity in Brazil1  Total installed capacity is expected to reach 171 GW by 2020  Brazilian energy matrix will present higher diversification, but in the next 10 years hydropower plants will continue to prevail 2011: 115 GW 2020: 171 GW th: 4.5% p.a. Annual Grow 2 SHPP: 4% .a) (GDP: 5.0% p Natural gas: 7% 2 SHPP: 4% Biomass: 5% Natural gas: 8% Biomass: 5% Oil: 5% Oil: 3% Nuclear: 2% Nuclear: 2% Others: 17% Coal: 2% Hydro: 67% Diesel: 1% Others: 10% Hydro: 73% Coal: 2% Diesel: 1% Wind: 7% Wind: 1% Steam: 1% Steam: 0% 1- Source: EPE (Energetic Research Company), Ten-year Energy Plan 2020, May/2011 2 - Small Hydro Power Plant 13
  • 14.
    Energy sector inBrazil: regulatory methodology Tariff Reset and Readjustment • Tariff Reset is applied each 4 years for AES Eletropaulo − Base date: Jul/2011 • Parcel A Costs − Parcel A: costs are largely pass trough the tariff Energy − Non-manageable costs that are largely Purchase passed through to the tariff − Parcel B: costs are set by ANEEL Transmission − Incentives to reduces costs Sector Charges • Tariff Readjustment: annually − Parcel A : costs are largely pass trough the tariff Regulatory − Parcel B: cost are adjusted by IGPM +/- X(1) Factor Opex • Regulatory Opex: (PMSO) – Efficient operating cost determined by ANEEL (National Electricity Agency) X WACC Investment Remuneration • Remuneration Asset Base: Remuneration Asset Base – Prudent investments used to calculate the investment remuneration (applying X Depreciation Depreciation WACC) and depreciation Regulatory Parcel A - Non-Manageable Costs Ebitda Parcel B - Manageable Costs 14 1 – X Factor: index that captures productivity gains
  • 15.
    Energy sector inBrazil: regulatory methodology 3rd Cycle of Tariff Reset – X Factor X FACTOR Pd Q T = + + Distribution Operational expenses DEFINITION Quality of service productivity trajectory To capture To stimulate the To implement operational OBJECTIVE productivity gains improvement of the expenses trajectory during with distribution service quality the tariff cycle Defined at tariff reset, considering the Defined at each tariff Defined at tariff reset, average productivity of readjustement, considering the sector adjusted by the according to the expenses established by APLICATION market growth and variation of SAIDI and reference company and variation of consumer SAIFI and comparative benchmarking units of the distributor performance of discos methodologies 15 since last reset
  • 17.
    AES Tietê Overview Generationfacilities  17 hydroelectric plants within the states of São Paulo and Minas Gerais  30-year concession valid until 2029; renewable for another 30 years  Installed capacity of 2,659 MW, with physical guarantee1 of 1,280 MW average  Almost all the amount of energy that AES Tietê can sell in the long term is contracted to AES Eletropaulo until the end of 2015  AES Tietê can invest in generation, its main activity, and operate in energy trading  343 employees 17 1 - Amount of energy allowed to be long term contracted
  • 18.
    Generated energy showshigh operational availability Generated energy (MW avarage1) Generated energy by power plant (MW avarage1) 130% 125% 129% 126% 118% 1,665 1,703 1,599 1,512 1,550 2008 2009 2010 9M10 9M11 Generation - Mwavg Generation/Physical guarantee 1 – Generated energy divided by the amount of hours * Caconde, Limoeiro, Mogi and SHPPs 18
  • 19.
    A significant amountof billed energy and net revenues comes from the bilateral contract with AES Eletropaulo Energy Billed (GWh) Net Revenues (%) 14,706 14,729 117 301 -3% 94% 13,148 1,150 1,340 11,483 331 11,114 2,331 215 1,680 1,980 346 1,135 1,188 1,554 1,535 11,138 11,108 11,108 8,578 8,045 1% 3% 2% AES Eletropaulo 1 2008 2009 2010 9M10 9M11 2 Other bilateral contracts AES Eletropaulo MRE Spot Market Other bilateral contracts Spot Market 1 – Leap Year 2 – Energy Reallocation Mechanism MRE 19
  • 20.
    Investments in themodernization of Nova Avanhandava, Ibitinga and Caconde power plants Investments (R$ million) 9M11 Investments 84% % 169 44 R: C AG 18 +122% 119 14 82 53 4% 12% 56 12 151 13 7 105 70 43 46 Equipment and Modernization 2009 2010 2011 (e) 9M10 9M11 New SHPPs* Investments New SHPPs* IT projects *Small Hydro Power Plants 20
  • 21.
    Growth opportunities Perspectives •Project features - Combined cycle using natural gas - Estimated investment of R$ 1.1 billion - Natural gas consumption: 2.5 million m3/day - 550 MW of installed capacity • Updates - Environmental license obtained on October, 20th 2011 (valid for 5 years) - Gas unavailability for A-5 Energy Auction in 2011 • Next events - Obtain installation license - Participate in A-3 Auction expected to be realized in March 2012 - Evaluate energy offering in the free market 21
  • 22.
    Financial highlights* NetRevenue (R$ million) Ebitda (R$ million) CAGR: 5% CAGR: 3% +1% +1% 1,254 1,255 1,320 1,035 1,048 9 1,605 1,670 1,754 1,334 1,344 1,309 1,311 (54) 2008 2009 2010 9M10 9M11 2008 2009 2010 9M10 9M11 78% 75% 75% 78% 78% Recurring Non-recurring Ebitda margin (*) 2009 and 2010 numbers in IFRS 22
  • 23.
    Practice of totalnet income distribution on quarterly basis* Net Income and Dividend Pay-out1 (R$ million) 117% 110% 100% 12% 11% 11% 737 706 692 31 +2% 570 -5% 582 816 784 28 542 (74) (78) (40) (36) 2008 2009 2010 9M10 9M11 Pay -out Yield Pref Recurring Non-recurring IFRS Effect 1 – Gross value 23 (*) 2009 and 2010 numbers in IFRS
  • 24.
    Debt profile NetDebt (R$ billion) Amortization Schedule – Principal (R$ million) 0.3x 0.3x 0.3x 0.4x 0.3x 300 300 300 0.6 0.4 0.4 0.4 0.5 2008 2009 2010 9M10 9M11 2013 2014 2015 Net debt Net debt / EBITDA • September, 2011: – Average debt cost in 9M11 was 115% of CDI1 p.a. or 15% p.a. – Average debt maturity of 2.8 years – Net debt: R$ 0.6 billion – Net debt/EBITDA: 0.4x 24 1 – Brazilian Interbank Interest Rate
  • 25.
    Capital Markets AES Tietê X Ibovespa X IEE Daily Avg. Volume (R$ thousand) 13,922 12,828 YTD1 110 +5% 10,187 4,239 3,370 +2% 8,160 -2% 2,101 90 2,692 -25% 9,683 9,458 70 8,086 5,468 50 Dec-10 Mar-11 Jun-11 Sep-11 2008 2009 2010 9M11 3 AES TIETÊ PF TSR2 IBOVESPA IEE Preferred Common • Market Cap4: R$ 8.5 billion • BM&FBovespa: GETI3 (common shares) and GETI4 (preferred shares) • ADRs negotiated in US OTC Market: AESAY (common shares) and AESYY (preferred shares) 1 – Index: 12/30/2010 = 100 2 – Total Shareholders’ Return 3 – Electric Energy Index 4 – Index: 09/30/11 25
  • 27.
    AES Eletropaulo Overview ConcessionArea  Largest electricity distribution company in Latin America  Serving 24 municipalities in the São Paulo Metropolitan area  Concession contract valid until 2028; renewable for another 30 years  Concession area with the highest GDP in Brazil  45 thousand kilometers of lines, 1.2 million electricity poles and 6.1 million consumption units in a concession area of 4,526 km2  Total distributed volume of 43 TWh in 2010  AES Eletropaulo, as a distribution company, can only invest in assets within its concession area  5,647 employees 27
  • 28.
    Consumption Evolution Total Market1(GWh) 9M11 Consumption by Class (%) CAGR: 3% 6% 14 9 14% 43,345 45,000  41,243 41,269 36% 26 40,000  7,911 +5% 7,383 6,832 33,769 35,000  32,198 18% 43 30,000  5,846 6,246 26% 28 25,000  20,000  33,860 34,436 35,434 17 15,000  27,523 26,352 10,000  36 5,000  26 0  2008 2009 2010 9M10 9M11 Brazil AES Eletropaulo ¹ Captive Market Free Clients Residential Commercial Industrial Others 28 1 – Net of own consumption
  • 29.
    Industrial class Industrialclass X industrial production in São Paulo State 15% 10% 5% • Industrial consumption is 0% influenced by manufacturing -5% industry performance in São Paulo -10% Economic crisis Economic  recovery State -15% Jul-07 May-08 Mar-09 Jan-10 Nov-10 Sep-11 • Recent slowdown is influenced Industrial Production of SP (% 12 months) Industrial (% 12 months) by the decrease of industrial Consumption of industrial class by activity – AES Eletropaulo production in 2011 • Moreover, the migration of clients to other regions of São Paulo State Vehicles, and of the country negatively Chemical, Rubber, Other industries Plastic and Metal 50% products impacts this class 50% 29
  • 30.
    Residential class Residential classX Average income in São Paulo Metropolitan Area 1,800 4,800 • Residential class is influenced by Average Income R$ - SP (q-2*) income in São Paulo Metropolitan Residential (GWh) 1,600 4,300 Area 1,400 3,800 • Maintenance of the income expansion trend in São Paulo 1,200 3,300 Metropolitan Area will sustain growth of residential class 1,000 2,800 1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 • Average annual growth (2003- Avg Real Income R$ - SP (t-2) Residential (GWh) 2011): Consumption per consumer (in kWh) – YTD September – total residential market: 5.5% y.y. - 9.7% 260 – consumption per consumer: 2.1% y.y. 235 228 228 220 217 220  Consumption per consumer is 212 206 198 198 still 9.7% lower than in 192 the period before the rationing * 2 quarters of delay in relation to consumption 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 30
  • 31.
    Investments amounted R$ 530 million in 9M11 Investments Breakdown (R$ million) Investments 9M11 (R$ million) 3% :1 166 GR CA 744 800  682 29 128 700  47 28 +38% 600  516 530 16 383 16 21 500  37 27 125 400  22 715 654 300  478 513 200  362 Maitenance 100  Client Service 0  System Expansion 2009 2010 2011(e) 9M10 9M11 Losses Recovery Capex Paid by Customers IT Paid by the Clients Others 31
  • 32.
    SAIDI & SAIFI SAIDI - System Average Interruption Duration Index SAIFI - System Average Interruption Frequency Index 8.41 7.87 7.39 10,92 10,09 9,32 9,20 11,86 10,60 10,30 11,95 6.17 5.43 6.06 5.42 5.20 2008 2009 2010 9M10 9M11 2008 2009 2010 9M10 9M11 5th 8th 7th 1st 7th 3rd SAIDI (hours) SAIDI Aneel Reference SAIFI (times) SAIFI Aneel Reference ABRADEE ranking position among the 28 utilities with more than 500 thousand customers ► 2011 SAIDI ANEEL Reference: 8.68 hours ► 2011 SAIFI ANEEL Reference: 6.93 times 32 Sources: ANEEL, AES Eletropaulo and ABRADEE
  • 33.
    Operational Indexes Losses (%) Collection Rate (% over Gross Revenues) 11.6 11.8 11.0 102.4 103.0 10.9 10.6 101.1 100.3 98.5 5.1 5.3 4.4 4.5 4.1 6.5 6.5 6.5 6.5 6.5 2008 2009 2010 9M10 9M11 2008 2009 2010 9M10 9M11 Technical Losses ¹ Commercial Losses ANEEL References: From Jul/09 to Jun/10: 12.32% From Jul/10 to Jun/11: 12.45% 33 1 – Current technical losses used retroactively as a reference
  • 34.
    Financial Highlights* Net Revenues (R$ million) Ebitda (R$ million) 5 % R: 1 9% CAG 2,413 R: CAG 9,697 - 8% 10,000  8,786 426 +5% 1,775 1,870 9,000  7,530 1,696 1,716 7,046 7,371 87 339 8,000  - 89 301 58 197 7,000  245 332 6,000  5,000  4,000  1,607 1,491 1,648 3,000  1,325 1,326 2,000  1,000  0  2008 2009 2010 9M10 9M11 2008 2009 2010 9M10 9M11 Recurring Regulatory assets and liabilities Non-recurring 34 (*) 2009 and 2010 numbers in IFRS
  • 35.
    Practice of dividenddistribution on semi-annual basis* Net Income and Dividend Payout1 (R$ million) 115.4% 120.0% 35.0% 101.5% 93.4% 28.6% 100.0% 30.0% 20.4% 25.0% 80.0% 20.3% 1,348 20.0% 60.0% -15% 15.0% 40.0% 1,156 1,027 350 10.0% 1,037 20.0% 5.0% 374 885 0.0% 329 236 282 0.0% 89 160 171 214 698 762 622 583 582 2008 2009 2010 9M10 9M11 Pay-out Yield PN Net Income - ex one-off and regulatory assets and liabilities Regulatory assets and liabilities (*) 2009 and 2010 numbers in IFRS 35 1 – Gross amount One-off
  • 36.
    Debt Profile Net Debt(R$ billion) Amortization Schedule – Principal (R$ million) 1.5x 1.4x 1.2x 0.9x 1.0x 1,047 579 2.9 48 847 2.5 2.7 2.4 2.6 360 390 437 346 62 277 55 283 80 45 532 51 58 22 281 301 335 375 226 225 180 2008 2009 2010 9M10 9M11 2011 2012 2013 2014 2015 2016 2017 2018 2019 - 2028 Net Debt/Ebitda Adjusted with Fcesp Local Currency (ex FCesp) Fcesp² Net Debt (R$ billion) • September, 2011: – Average debt cost in 3Q11 was 112% of CDI1 or 12.6% p.a. – Average debt maturity of 6.9 years – Net debt: R$ 2.9 billion – Net debt/EBITDA of 1.2x adjusted with Pension Fund 36 1 – Brazilian Interbank Interest Rate 2 – Pension Fund
  • 37.
    Capital Markets AES EletropauloX Ibovespa X IEE Average Daily Volume (R$ thousand) 9M11 1 28,500 A 29,000.00 125 25,677 B 27,000.00 24,496 115 + 11% 25,000.00 105 21,960 + 2% 23,000.00 95 21,000.00 85 - 11% 19,000.00 75 - 24 % 17,000.00 65 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 15,000.00 2008 2009 2010 9M11 Ibovespa IEE² AES Eletropaulo PN AES Eletropaulo TSR³ A Ex dividends: 04/30/2011 B Ex dividends: 08/11/2011 • Market cap4: R$ 4.8 billion • BM&FBOVESPA: ELPL3 (common shares) and ELPL4 (preferred shares) • ADRs at US OTC Market: EPUMY (preferred shares) 1 – Index: 12/30/2010 = 100 2 – Electric Energy Index 37 3 – Total Shareholders’ Return 4 - Index: 09/30/11. Calculation includes only preferred shares.
  • 38.
  • 39.
    Commitment with sustainability DEVELOPMENT & VALUATION  INNOVATION IN PRODUCTS  SUSTAINABLE  ENERGY  EFFICIENCY IN THE USE OF  SAFETY OF COWORKERS, SUPPLIERS  GENERATION RESOURCES AND SERVICES AND  COMMUNITIES ... means using  ... means allocating  ... means an attitude of  ...means knowing,  ... means providing  an  economic, social and  them in such a manner  protection  of our  involving in a  environment and  environmental  that balanced and  employees, suppliers  transparent form and  culture that inspire  resources in a balanced  perennial results are  and  population. positively influencing  solutions that improve  fashion, preserving the  ensured for all  our coworkers,  people’s lives, ensuring   present time and  stakeholders, abiding by  suppliers and  quality and excellence  ensuring the future the values practiced by  communities to build a  in the services rendered  the company collective agenda that  to the customer. generates value for  everyone – Education for sustainability Cross-cutting – Stakeholders active participation themes – Communication, knowledge and information 39
  • 40.
    Social Responsibility: MainProjects Development and transformation of communities Education, culture  “Casa de Cultura e Cidadania” Project and sport It offers courses and activities in culture and sport for 5.2 thousand children and teenagers in 7 units of AES Brazil. In two AES Eletropaulo’s units the project benefits 1.6 thousand people in low-income communities. Children education and development “Centros Educacionais Luz e Lápis” Project Two units in São Paulo attending 320 children from 1 to 5 years old, in social vulnerability. Education about Safety and Efficiency in energy consumption “AES Eletropaulo nas Escolas” Project Education about safe and efficient use of energy to 4.5 thousand teachers and 404 thousand students from 900 public schools, between 2010 and 2011. The actions include recreational activities offered in adapted trucks. 40
  • 41.
    Social Responsibility: MainProjects Inclusive  Women inclusion and income generation and Social Business “Fornecedor Cidadão” Project Empowerment of female electricians to work on energy cutting and reconnection. Project started in 2010 with 41 women. Social inclusion and income generation “Empreender com energia” Project In partnership with the “Aliança Empreendedora” Institution, community residents of Vl. Guacuri neighborhood – SP are empowered to entrepreneurship, in groups or individually, in order to improve their income and life quality. Starting in 2010, the project now has two productive groups and 19 individual entrepreneurs. 41
  • 42.
    Social Responsibility: MainProjects Converting Consumers to Clients A project developed to work on electrical network regularization. Since 2004, more than 437 thousand families in low income communities were benefited from better energy supply conditions and social inclusion. The project has already substituted: 880 thousand lamps 22 thousand refrigerators and 7 thousand showers for more efficient equipments “Energia do Bem” Project Active participation of employees to transform low income communities and to work on institutions development. Starting in 2008, the program counts on the participation of 12% of AES Eletropaulo employees, in activities like winter clothes campaigns and support in several activities institutions. www.energiadobem.com.br 42
  • 43.
  • 44.
    Costs and Expenses Costsand operational expenses1 (R$ million) 433 415 351 187 299 296 201 112 125 115 239 246 214 174 181 2008 2009 2010 9M10 9M11 Energy Purchase, Transmission  and Connection Charges, and Water Resources  Other Costs and Expenses 2 1 – Do not include depreciation and amortization 2 - Personnel, Material, Third Party Services and Other Costs and Expenses 44
  • 45.
    Costs and Expenses Costs and operational expenses1 (R$ million) PMS and Other Expenses (R$ million) 1,306 1,255 1,193 6,745 254 165 6,431 5,893 970 909 1,255 379 1,306 5,006 5,129 1,193 352 443 202 67 970 909 329 368 308 5,125 5,490 4,700 700 4,036 4,220 647 485 461 475 3 2008 2009 2010 9M10 9M11 2008 2009 2010 9M10 9M11 Energy Supply and Transmission Charges PMS² and Others Expenses Personnel and Payroll Material and Third Party Others 1 – Do not include depreciation and amortization 2 - Personnel, Material, Third Party Services and Other Costs and Expenses 3 – In 2009 expenses with Pension Fund increased due to inflation rate (IGP-M) increase and reversal of R$ 63 million in 4Q08 caused by actuarial liability adjustment 45
  • 46.
    Action Plan: R$242 million with increase of R$ 122 million in emergency teams  availability of 353 emergency teams Concluded in  38% increase in call center positions (150 positions) September 2011  doubling of SMS receipt capacity to 100 thousand / day  training of 276 maintenance and construction electricians  hiring of 30 additional pruning electricians  training of 240 electricians for emergency attendances in powered grid  beginning of 276 maintenance and construction electricians activities Concluded in and training conclusion of other 304 November 2011  300 additional stand by positions in call center for emergency situations  increase of call center service capacity by 27 times from 2 thousand to 54 thousand calls/hours December to  increase of 120 emergency teams, totaling 473 teams March 46
  • 47.
    AES Tiete's expansionobligation Privatization Notice Judicial Notice: Aneel informed AES Tietê was summoned to Efforts being made by the established the The Company was notified by that the issue is answer a Lawsuit filed by the obligation to expand the the State of São Paulo Company to meet the not related to the State of São Paulo, which installed capacity in 15% Attorney's Office to present its concession requested the fulfillment of the obligation : (400 MW) until 2007, understanding on the matter, agreement and obligation in 24 months. either in greenfield having filed its response on must be • Long-term energy projects and/or through time, the proceedings were An injunction was granted in addressed with long term purchase ended, since no other action order to have a project contracts (biomass) the State of São agreements with new submitted within 60 days. Paulo was taken by the Attorney's totaling an average of 10 plants Office MW •SHPP São Joaquim - started operating in July, 1999 2007 2011, with 3 MW of Ago/08 Out/08 Jul/09 Set/10 Set/11 Nov/11 installed capacity •SHPP São José – under construction, with 4 MW Company faces restrictions until of installed capacity, Popular Action: deadline: In response to a Popular Lawsuit: expected to be Due to the plaintiffs failure • Insufficiency of hydro resources Action (filed by to specify the persons that The Company operational in 2012 individuals against the should be named as appealed to the • Environmental restrictions Federal Government, Defendants, a favorable State of Sao • Thermo-SP - Project of • Insufficiency of natural gas supply Aneel, AES Tietê and Paulo State Court decision was rendered by a 550MW gas fired • New Model of Electric Sector (Law # Duke), the Company the first Instance Court of Appeals and 10,848/2004), which forbids bilateral presents its defense the injunction was thermal plant (an appeal has been filed) agreements between generators and before the first instance stayed distributors 47
  • 48.
    Eletrobras Lawsuit State-owned Eletropaulo was Next Steps: spun-off into four Eletrobras, after On July 7, the companies and, winning the judge determined 1 - The according to our Eletrobras and Eletrobras auditing Stated-owned interest Eletropaulo and understanding CTEEP appealed requested the 1st procedure (AP) Eletropaulo calculation CTEEP to based on the to the Superior level of court is expected to borrowed money discussion, filed present their spin-off Court of Justice judge to appoint begin by the 1st from Eletrobras an Execution Suit considerations, agreement, the (SCJ) an expert half of 2012 to collect the due which occurred in discussion was amount August 2 – AP is transferred to expected to be CTEEP concluded in at least 6 months 3 - After AP’s conclusion, a 1st level court Nov/86 Dec/88 Jan/98 Apr/98 Sep/01 Sep/03 Oct/05 Jun/06 May/09 Dec/10 Jul/11 decision will be released 4 - Appealing to the 2nd instance court 5 - Foreclosure starts. State-owned Presentation of The 2nd level of Eletrobras guaranty Eletropaulo and Privatization requested the court excluded The SCJ decided Eletrobras event . State- beginning of the 6 - Request to AES Eletropaulo to send the disagreed on how owned appraisal withdraw the from the Execution Suit to calculate Eletropaulo procedure, which is guaranty discussion based back to the 1st interest over that became AES under 1st. instance on the spin-off level of court 7 - Appeals to loan and a lawsuit Eletropaulo court analysis agreement the 3rd instance was started courts 48
  • 49.
    Shareholders Agreement On Dec2003 AES and BNDES signed a Shareholders’ Agreement to regulate their relationship as shareholders of Brasiliana and its controlled companies. The Agreement is available at www.aeseletropaulo.com.br/ri Shareholders can dispose its share at any time, considering the following terms: Right of 1st  Any party with an intention to dispose its shares should first provide the other party the right to buy refusal that participation at the same price offered by a third party Tag along  In the case of change in Brasiliana’s control, tag along rights are triggered for the following rights companies (only if AES is no longer controlling shareholder): – AES Eletropaulo: Tag along of 100% in its common and preferred shares – AES Tietê: Tag along of 80% in its common shares – AES Elpa: Tag along of 80% in its common shares Drag along  Once the offering party exercises the Drag Along clause, offered party is obligated to dispose of all rights its shares at the time, if the Right of 1st Refusal is not exercised by offered party 49
  • 50.
    Brazilian Main Taxes AES Tietê AES Eletropaulo • Income Tax / Social Contribution: • Income Tax / Social Contribution: – 34% over taxable income – 34% over taxable income • ICMS (VAT tax) • ICMS: 22% over Revenue (average rate) – deferred tax – Residential: 25% • PIS/Cofins (sales tax): – Industrial and Commercial: 18% – Eletropaulo´s PPA: 3.65% over Revenue – Public Entities: free – Other bilateral contracts: 9.25% over Revenue • PIS/Cofins: minus Costs – 9.25% over Revenue minus Costs 50
  • 51.
    Contacts: ri.aeseletropaulo@aes.com ri.aestiete@aes.com + 55 11 2195 7048 The statements contained in this document with regard to the business prospects, projected operating and financial results, 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.