2. AES Brasil Group
Market Share¹
Discos Gencos
14.6% 3.0%
85.4% 97.0%
7 million clients
6 thousand AES People
2009 Results:
• Ebtida - R$ 3.2 bi
• Net Income - R$ 1.9 bi
Investments 1998-2009:
R$ 5.8 bi after privatization
1 - Source: Abradee (Discos) and Aneel (Gencos) - Data as of December 2008 2
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 76.45% C 71.35%
C 99.99% C 99.00% C 98.25% P 7.38% P 32.34% C 99.99 %
T 99.70% T 99.99% T 99.00% T 98.25% T 34.87% T 52.55% T 99.99 %
AES AES AES AES AES AES AES Eletropaulo
Sul Infoenergy Uruguaiana Com Rio Eletropaulo Tietê Telecom
C = Common Shares
P = Preferred Shares
T = Total
3
4. Shareholding composition
Free Float Others¹
16.1% 19.2% 56.2% 8.5%
24.2% 28.3% 39.5% 8.0%
1 – includes Federal Government and Eletrobrás shares in AES Eletropaulo and AES Tietê, respectively 4
5.
6. AES Eletropaulo overview
Concession Area
Largest electricity distribution company in Latin America
Serving 24 municipalities in the São Paulo Metropolitan area
Concession area with the highest GDP in Brazil:
17.3% of the Brazilian GDP and 50.9% of São Paulo’s state GDP (2007)
46 thousand kilometers of lines
4,526 km2 of concession area
1.1 million electricity poles
4,557 employees
6.0 million of consumption units
Total distributed volume of 41 TWh in 2009
Concession contract valid until 2028
6
7. Ranking for energy distributors
9,000
8,000
7,000 Net Revenue – R$ Million
2008 2009
6,000
5,000
1st 1st 4,000
3,000
2,000
1,000
0
R
C
LI
C
B
C
A
C
C
C
A
EL
C
C
G
EM
EL
A
ES
PF
O
O
M
EL
O
PF
G
EK
N
E
H
PE
EL
PL
EL
ES
L
PE
L
IG
D
T
EL
TR
EI
L
B
A
C
PA
PI
C
A
E
ET
R
R
O
U
A
A
R
LI
N
TI
O
TE
ST
N
P
1,800
IN
A
A
UL
G
A
1,600
1,400 O
1,200
Ebitda – R$ Million
1,000
1st 1st 800
600
400
200
0
LI
B
R
C
A
C
C
EL
C
A
C
C
C
C
EM
A
G
ES
O
PF
EL
M
O
EM
O
EM
G
EK
N
E
H
EL
PL
EL
PE
L
PE
D
IG
A
A
T
EL
TR
EI
B
A
C
L
PA
R
T
A
E
ET
R
O
U
A
R
LI
N
O
TE
ST
P
A
A
UL
7
O
Source: Abradee (Brazilian Association of Energy Distributors); research among 29 energy distributors in Brazil
17. Net income of R$ 622 million in 1H10
Net Income (R$ million) Dividend payout (R$ million)
Dividends Pay-out Yield PNB
106.7%
101.5% 101.6% 100.5%
100.3%
: 14%
CAGR
20.3% 20.4%
14.4%
1,063 1,080
1,027 1,043 10.8%
6.6%
713 622 715 625
302 323
2007 2008 2009 1H09 1H10 2007 2008 2009 1H09 1H10
• 25% of minimum pay-out according to bylaws
• Since 2006, practice of 95% payout on semi-annually basis
17
18. R$ 489 million paid as dividends in 1H10
Managerial Cash Flow (R$ million)
2007 2008 2009 1H10
Inicial Cash 1,166 1,334 1,536 1,249
Operational Cash Generation
Operating Cash Flow 2,488 1,893 1,970 1,156
Investments (407) (374) (378) (250)
Net Financial Expenses (501) (161) (118) (166)
Net Amortizations (182) (94) (136) 251
CESP Foundation (198) (192) (166) (91)
Income Tax (418) (295) (189) (182)
EP Telecom sell - - - 308
Free Cash Flow 783 777 706 804
Dividends (615) (576) (993) (489)
Final Cash 1,334 1,536 1,249 1,786
18
19. Debt profile
Net Debt Amortization Schedule¹ (R$ million)
1.8x 1.8x 1.7x 1,914
1.5x
1.3x
3.2 1,361
3.0
3.0 2.9
2.5
599
342 365 74 416 312
322 301
71 65 69 84 89
79 553
524
39 251 277 296 525
223 332 223
56
39
2007 2008 2009 1H09 1H10 2010 2011 2012 2013 2014 2015 2016 2017 From 2018
to 2028
Net Debt (R$ billion) Local Currency (ex Pension Fund) Pension Fund
Net Debt / EBITDA Adjusted with Pension Fund
• June, 2010:
– Average debt cost in 1H10 was 106% of CDI² per year or 13.9% per year
– Average debt maturity of 7 years
19
1 – Includes 12th and 13th bonds 2 - Brazil’s Interbank Interest Rate
20. Capital market
AES Eletropaulo X Ibovespa X IEE Average Daily Volume (R$ thousand)
Last 12 months1
140 26,066
25,677
25,165
130 21,960
120 18%
110 18%
4%
100
90
80
Jun-09 Sep-09 Dec-09 Mar-09 Jun-10
2007 2008 2009 1H10
ELPL6 IEE IBOV
• Common shares and preferred shares class A and B listed on
BM&FBOVESPA under the tickers ELPL3, ELPL5 and ELPL6.
• ADRs at US OTC Market under the tickers EPUMY and ELPSY.
20
1 – Index: 06/30/2009 = 100
21.
22. AES Tietê overview
Concession Area
• 30 year concession, valid until 2029, renewable for
another 30 years
• 10 hydroelectric plants in the state of São Paulo at Tietê,
Pardo, Grande, and Mogi Guaçu rivers
• 6 small hydro power plants in the state of Minas Gerais
• Installed capacity of 2,657 MW, with physical guarantee1
of 1,280 MW
• 100% of physical guarantee contracted with AES
Eletropaulo until the end of 2015
• 339 employees
1 - Amount of energy allowed to be long term contracted 22
25. Projects - expansion requirement
AES Tietê has been seeking opportunities to increase its installed capacity to comply with the 15%
increase requirement in the State of São Paulo
Concluded
Concluded 6 MW of co-generation through biomass, contracted for 15 years beginning in 2010
(PPA1))
(PPA1
7 MW of hydro generation through SHPPs2 in Jaguari Mirim River
Under
Under
– São José SHPP (4 MW) has an estimated start-up in 1H11
Construction
Construction
– São Joaquim SHPP (3 MW) has an estimated start-up in 1H11
550 MW of thermo generation through natural gas
Under
Under – Location has been defined in Nov/2009
Development
Development
– Environmental licensing process initiated in March 2010
– Technical feasibility study in advanced stage
22 MW of hydro generation through one SHPP, in stage of technical and economic feasibility
studies
1 – Power Purchase Agreement 2 – Small Hydro Power Plants 25
26. Net revenues of R$ 862 million in 1H10
Net Revenues (R$ million)
1H10 Average Prices (R$ / MWh)
AES Eletropaulo 152.00
%
R: 20 MRE 8.51
CAG
1,670 Spot 40.70
1,605
1,449
862
832
2007 2008 2009 1H09 1H10
26
27. Operating costs and expenses
Operating Costs and Expenses1 (R$ million)
R: 5%
CAG
Operational Provisions
410
Other Costs and Expenses2 351
350 3 55
Energy Purchase, Transmission
and Connection Charges, 97 186
109 141 165
and Water Resources 16
57
67
281 239 214 108 103
28
2007 2008 2009 1H09 1H10
1 – Depreciation and amortization not included 2 - Personnel, Material, Third Party Services and Other Costs and Expenses 27
28. Ebitda of R$ 677 million in 1H10
Ebitda (R$ million)
R: 5%
CAG
1,260
1,254
1,099
677
667
2007 2008 2009 1H09 1H10
28
29. Sustainable profitability and dividend payment
Net Income (R$ million) Dividend Payout1 (R$ million)
Dividends Pay-out Yield PN
100 % 100 % 100 % 100 % 100 %
12% 11%
R: 9% 10% 6%
CAG 6%
780 780
692 692
609 609
414 411 414 411
2007 2008 2009 1H09 1H10 2007 2008 2009 1H09 1H10
• 25% of minimum pay-out according to bylaws
• Since 2006, practice of 100% payout on quarterly basis
1 - Gross amount 29
30. R$ 379 million paid as dividends in 1H10
Consolidated Managerial Cash Flow (R$ million)
2007 2008 2009 1H10
Initial Cash 688 638 840 615
Operational Cash Generation 1.120 1.222 1.243 714
Investments (46) (55) (58) (24)
Net Financial Expenses (72) (49) (48) (15)
Net Amortization (197) (194) (224) (95)
Income Tax (247) (66) (309) (361)
Free Cash Flow 558 858 604 218
Dividends and Interest on Equity (608) (656) (829) (379)
Final Cash 638 840 615 455
30
31. Debt
Net Debt (R$ billion) Overlook on 1st Debenture Issuance
0.6x
• R$ 900 million
0.3x 0.3x 0.3x 0.4x
• 5 years term
• CDI + 1.20% a.a.
0.7
• Payment on semiannual basis
0.4 0.4 0.4
0.4
• Fixed amortization on the 3rd, 4th, and 5th years
• Objective: pre-payment of Eletrobras debt
2007 2008 2009 1H09 1H10
Net Debt Net Debt / Ebitda
31
32. Capital Market
AES Tietê X Ibovespa X IEE Daily Avg. Volume - R$ thousand
13,974
12 months1
10,187
140
9,096
130 8,160
+ 18%
120 9,668
+ 18% 8,086
110
5, 531 5,468
100 + 2%
90
80
4,606
Jun-091 Sep-09 Dec-09 Mar-09 Jun-10 3,566 2,692 2,101
GETI4 IEE IBOV
2007 2008 2009 1H10
Preferred Common
• Common shares and preferred shares listed on BM&FBOVESPA
under the tickers GETI3 and GETI4.
• ADRs at US OTC Market under the tickers AESAY and AESYY.
1 – Index: 06/30/09= 100 32
34. Social responsibility
Volunteering Program
Distributing Acting to
Energy of Transform
Good
Specific social mobilization or Opportunities for volunteering in
emergency campaign. social organizations, which are
partners of AES Brazil
Winter clothes, Christmas Co-workers can enroll in
campaign, among others. volunteer activities available at
AES Brazil volunteering portal
since September/09
www.energiadobem.com.br
• Launched in December, 2008;
• Objective: to get the co-workers committed to the transformation of low income communities and development of
non-governmental institutions;
• 1,137 volunteers 34
35. Social responsibility
“Casa da Cultura e Cidadania” Project
• Over 6.7 thousand children, teenagers,
and adults have been benefited
• Own and incentive investments:
approximately R$ 15 million in 2009
• Activities of acting, dancing, circus arts, visual arts, music, gymnastics,
courses of income generation, and education of safe use of electrical
power and the right use of natural resources
• 6 operating units
“Centros Educacionais Infantis Luz e Lápis” - Project
• 300 benefited children between 1 and 6 years old
• Own investments amounting R$ 1.5 million in 2009
• Units: Santo Amaro and Guarapiranga
35
37. Shareholders Agreement
On December 22, 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
Main Highlights
Shareholders can dispose its share at any time, considering the following terms:
• Right of 1st Refusal
- Any party with an intention to dispose its shares, should first provide the other party the right to buy that participation at the
same price offered by a third party
• Tag Along Rights
- In the case of change in Brasiliana’s control, tag along rights are triggered for the following companies (only if AES is no
longer controlling shareholder):
- AES Eletropaulo: Tag along of 100% in its common and preferred B shares and 80% in its preferred A shares
- AES Tietê: Tag along of 80% in its common shares
- AES Elpa: Tag along of 80% in its common shares
• Drag Along Right for Brasiliana
- Once the offering party exercises the Drag Along clause, offered party is obligated to dispose of all its shares at the time, if
the Right of 1st Refusal is not exercised by offered party
37
38. Energy sector agents in Brazil
Ministry of Mines and
Energy (MME)
(Set Guidelines and Policies)
National Council of
Energy Policy (CNPE)
(Formulates Policies)
Electricity Sector Brazilian Electricity
Energy Research
Surveillance Regulatory Agency
Enterprise (EPE)
Committee (CMSE) (ANEEL)
(Monitors energy supply) (Ruling, Inspection & Auditing, (Generation & Transmission
Monitoring, and Mediation) Planning)
Distribution
companies
Electric Energy Transmission System Operator
Commercialization companies (ONS)
Chamber (CCEE)
Generation Generator resources
Pricing and clearing of scheduling and dispatch
energy transactions companies
Trading
companies
38
39. Energy sector in Brazil
(Contracting Environment)
Regulated Market Free Market
Auctions Spot Market PPAs1
Distribution Companies Trading Companies Trading Companies
Free Clients Free Clients
• Main auctions (reverse auctions):
Distribution
– New Energy (A-5): Delivery in 5 years, 15-30 Companies
years regulated PPA
– New Energy (A-3): Delivery in 3 years, 15-30
years regulated PPA
– Existing Energy (A-1): Delivery in 1 year, 5-15
years PPA
39
1 – Power Purchase Agreement
40. Discos regulatory methodology
(Tariff Reset and Readjustment)
Tariff Reset and Readjustment
• Tariff Reset is applied each 3 to 5 years • Parcel A Costs
− AES Eletropaulo: each 4 years (next 2011) − Non-manageable costs that totally
Energy pass- through to the tariff
− AES Sul: each 5 years (next 2011)
Purchase − Losses reduction improve the pass-
− Parcel A: costs pass trough the tariff
Transmission through effectiveness
− Parcel B: costs are set by ANEEL Sector Charges
• Tariff Readjustment: annually Reference • Reference Company:
− Parcel A costs pass trough the tariff Company
– Efficient cost structure, determined by
(PMSO)
− Parcel B cost are adjusted by IGPM +/- X(1) Factor ANEEL (National Electricity Agency)
X WACC Investment
Remuneration
• Remuneration Asset Base:
Remuneration
Asset – Applicable investments used to
Base calculate the Investment Remuneration
X Depreciation Depreciation
(applying WACC) and Depreciation
Regulatory Parcel A - Non-Manageable Costs
Ebitda
(1) X Factor: index that capture productivity gains Parcel B - Manageable Costs 40
41. Expansion requirement of 15%
Increase installed capacity in Sao Paulo State by 15% (400 MW), either in greenfield projects or through long term
purchase agreement with new plants
The obligation was supposed to be accomplished by December 2007, however AES Tietê was not able to comply with this
requirement due to the following restrictions:
– Insufficient remaining hydro resources within the State of São Paulo
– Environmental restrictions
– Insufficiency of gas supply / timing issue
– More restricted regulation on energy sale established by the New Model of Electric Sector (Law # 10,848/2004)
which eliminated the self dealing
• In August 2008, Aneel informed that the issue is not linked to the concession
• Popular law action against Federal Government, Aneel, AES Tietê, and Duke
– Status: Defense filed on first instance in October 2008 by AES Tietê. In December, 2008, the author replied AES
Tietê defense and, since this, both parties are waiting judge movement about the necessity of proves production
• On July 27, 2009, AES Tietê was notified by the State Government Attorney’s Office to present arguments on compliance
with the expansion obligation
– The Company filed a response on July, 29th, which exhausts the procedure for notification. Possible deployment
depends on new manifestation of the Prosecution 41
42. 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.
