InstitutionalMay, 2010
2
85.4%
14.6%
97.0%
3.0%
7 million clients6 thousand AES People
AES Brasil Group
Discos
Gencos
Market Share¹2009 results:
R$ 3.2 billion (Ebitda)R$ 1.9 billion (net income)
Investments 1998-2009:
R$ 5.8 billion after privatization
DiscoTrading Co. Telecom
Genco
1 - Source: Abradee (Discos) and Aneel (Gencos) - Data as of December 2008
3
AES EletropauloTelecom
AESTietê
AESEletropaulo
Shareholding structure
C 99.99 %T 99.99 %
C 99.99%T 99.99%
AESCom Rio
C = Common SharesP = Preferred Shares
T = Total
C 76.45%P 7.38%T 34.87%
Cia. Brasiliana de Energia
AES Corp BNDES
C 50.00% - 1 shareP 100%T 53.85%
C 50.00% + 1 shareP 0.00%T 46.15%
C 71.35%P 32.34%T 52.55%
C 98.25%T 98.25%
AESSul
T 99.70%
AESUruguaiana
AESInfoenergy
C 99.00%T 99.00%
4
24.2% 28.3% 39.5%
16.1% 19.2% 56.2%
8.0%
8.5%
Others¹Free Float
Shareholding composition
1 – includes Federal Government and Eletrobrás shares in AES Eletropaulo and AES Tietê, respectively
6
AES Eletropaulo overview
• 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
• 4,491 employees
• 5.9 million of consumption units
• Total distributed volume of 41 TWh in 2009
• Concession contract valid until 2028
Concession Area
São Paulo Metropolitan Area
Regional West
Regional East
Regional South Regional ABC
Regional North
7
Ranking for energy distributors
Net Revenue
2007 2008
Ebitda
1st
2nd
1st
1st
Source: Abradee (Brazilian Association of Energy Distributors); research among 48 energy distributors in Brazil
Net Revenue - R$ million
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
AES
ELET
RO
PAU
LO
CEM
IG
LIG
HT
CPF
L PA
ULI
STA
CO
PEL
CO
ELB
A
CEL
ESC
ELEK
TRO
AMPL
A
CEL
PE
BAN
DEI
RAN
TE
CPF
LPI
RAT
ININ
GA
CO
ELC
E
CEL
G
Ebitda - R$ million
200
400
600
800
1.000
1.200
1.400
1.600
1.800
AES
ELET
RO
PAU
LO
CEM
IG
LIG
HT
CO
ELB
A
CPF
L PA
ULI
STA
CO
PEL
ELEK
TRO
AMPL
A
CEL
PE
CO
ELC
E
AMAZ
ON
AS
CPF
LPI
RAT
ININ
GA
CEM
AR
RG
E
8
1,8011,573
Consumption evolution
Total Market (GWh1) 1Q10 Consumption Share (GWh1)
Free ClientsCaptive market
2007 2008
410
39,93241,243
32,577
7,355
33,860
7,383
34,436
6,832
41,269
2009
8,118
9,691
8,544
10,344
1Q09 1Q10
Free Clients
Commercial
Residential
Others
Industrial
35%14%
18%
27%
6%CAGR: 1%
1 – Net of own consumption
9
Residential (GWh¹) – CAGR 2007-09: 4% Commercial (GWh¹) – CAGR 2007-09: 2%
Industrial (GWh¹) – CAGR 2007-09: -2% Captive Market¹ (GWh¹) – CAGR 2007-09: 2%
Main consumption classes
10,301
2,657
6,559 33,86034,436
6,032
15,015
13,50014,427
6,475 32,577
10,0723,646
3,494 2,804
1,3271,449
8,1188,544
10,752
2007 2008 1Q102009 1Q09 2007 2008 1Q102009 1Q09
2007 2008 1Q102009 1Q09 2007 2008 1Q102009 1Q09
1 – Net of own consumption
10
Consumption
Free Clients
1,573 1,801
Captive Market
8,118 8,544
Residential Industrial Commercial Public Sector and
Others
Total Market
Consumption Evolution (GWh¹)
6412,657
1,3273,494
9,691
645
3,646
1,4492,804
10,344
1Q101Q09
+4.4 % +5.5 % +0.7 % +5.2% +6.7%
1 – Net of own consumption
+9.2 % +14.4%
11
Investments amounted up toR$ 98 million in 1Q10
Investments Breakdown (R$ million) Investments 1Q10
Paid by customers
2007 2008
364410
69
433457
Own resources
47
92
1019
1Q09
88
9810
1Q102009
516
478
37
2010(e)
637
54691
Customer service / System expansion
Paid by the clientsLosses recovery
Maintenance
IT Other
15%
10%
24%
47%
2%2%
12
SAIFI - System Average Interruption Frequency Index SAIDI - System Average Interruption Duration Index
SAIDI & SAIFI
Source: ABRADEE, ANEEL e AES Eletropaulo
ABRADEE ranking position between 28 distributors with over 500 thousand consumers
9.208.90
2007 2008
SAIDI (hours) SAIDI Aneel Target
13.50
1Q10
11.34 10.92
2009
3o
1Q09
► 2010 SAIDI ANEEL Target: 9.32 horas
5o
11.86
10.09
10.20
2007 2009 1T09
SAIFI (times) SAIFI Aneel Target
7.878.49 8.41
1o
1Q10
► 2010 SAIFI ANEEL Target: 7.39 times
1o
5.64 5.20 5.46
2008
6.17 6.74
13
Losses (%)Collection Rate (% over gross revenue)
Operational indexes
• Disconnections and Reconnection – Monthly Average (1Q09 X 1Q10)
– Disconnections: increase from 75 thousand to 92 thousand
– Reconnection: increase from 50 thousand to 77 thousand
• Past due bill credit report (1Q10 monthly average): 131 thousand
• Fraud and Illegal Connections (1Q10)
– 56 thousand inspections e 8 thousand frauds detected
– 16 thousand illegal connections regularized
1.6 p.p. 0.3 p.p.
98.5
20092008 1Q09
102.5
1Q10
99.8101.199.5
2007
5,3
6
20082007 1Q10
5.1
6.5
11.6
5.0
6.5
11.5
Commercial Losses Technical Losses
2009
5.3
6,5
11.8
6.5
5.0
6.5
11.5
1Q09
6,56.5
5.3
11.8
14
Net revenue of R$ 2.1 billion in 1Q10
Net Revenue (R$ million)
2007 2008
7,5297,193
1Q09
1,850
8,050
1Q10
2,131
2009
CAGR: 4%
15
Operating Costs and expenses
Operating Costs and Expenses¹ (R$ million)
‘
PMS² and Other ExpensesEnergy Supply and Transmission Charges
1Q09 1Q10
288
1,197
1,485
341
1,406
1,747
1 - Depreciation not included 2 - Personnel, Material and Services
2007 2008 2009
1,193
4,700
5,893
1,312
5,110
6,4225,537
4,097
1,440
CAGR: 5%
16
Ebitda of R$ 341 million in 1Q10
Ebitda (R$ million)
2007 2008 1Q09
288
1,6961,566
2009
1,573
1Q10
341
CAGR: 0.1%
17
Net Income (R$ million)
34.9%
100.3% 101.5%
3.2%
14.4%20.3%
130
715
1,043
Dividends Pay-out Yield PNB
2007 20082006 2009
Net income of R$ 1,1 billion in 2009
Dividend payout (R$ million)
2007 2008
1,027
713
2009
1,063 1,080
20.4%
101.5%
• 25% of minimum pay-out according to bylaw • Since 2006, practice of 95% payout on semi-annually basis
1Q10
157
1Q09
147
CAGR: 14%
18
R$ 993 million paid as dividends in 2009
Managerial Cash Flow (R$ million)
Initial CashOperational Cash GenerationInvestmentsNet Financial ExpensesNet AmortizationsPension FundIncome Tax
Dividends
Final Cash
- -
Free Cash Flow
2008 2009 1Q101Q09
1.536 1.536 1.2491893 1970 268 572
(374) (378) (104) (135)
(161) (118) (80) (81)
(94) (136) (184) (14)
(192) (166) (58) (48)
(295) (189) (119) (73)777 706 (278) 221
(576) (993)
1.536 1.249 1.258 1.470
1.334
2007
2488
(407)
(501)
(182)
(198)
(418)783
(615)
1.334
1.166
19
524 250 276 298528
223
5665
33366 70
74
7984 89
224554
Local Currency (ex Pension Fund)
Debt profile
1 – Includes 12th and 13th bonds 2 - Brazil’s Interbank Interest Rate
Amortization Schedule¹ (R$ million)
• March, 2010:– Average debt cost in 1Q10 was 121% of CDI² per year or 14.5% per year– Average debt maturity of 7 years
Net Debt
2007
3.0
2008
2.5
1.8x1.5x
1.8x
2.9
1.6x
1Q10
2.7
1Q09
1.7x
2009
3.2
Net Debt (R$ billion)
Net Debt / EBITDA Adjusted with Pension Fund
Pension Fund
2010 2011 2012 2013 2014 2015 From 2018 to 2028
20172016
580
316 341 368602
302
1,919
313417
1,365
20
13,0%
-0,4%2,6%
1Q10
90
100
110
120
Dec-09 Jan-10 Feb-10 Mar-10
AES Eletropaulo PFB
Capital market
AES Eletropaulo X Ibovespa X IEE Average Daily Volume (R$ thousand)
2007 2008
26,066 25,677
2009
21,960
Ibovespa
IEE – Electric Power Index
19,4%
44,7%
72,0%12 month
6080
100120
140160180
Mar-09 Jun-09 Sep-09 Dec-09 Mar-10
1Q10
24,538
22
AES Tietê overview
• 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
• 315 employees
Concession Area
Água Vermelha (1,396 MW)
Nova Avanhandava (347 MW)
Ibitinga (132 MW)
Barra Bonita (141 MW)
Promissão (264 MW)
Bariri (143 MW)
Mogi-Guaçu (7 MW)
Euclides da Cunha (109 MW)
Caconde (80 MW)
Limoeiro (32 MW)
AES Tietê’s Power Plants:
1 - Amount of energy allowed to be long term contracted
Atlantic Ocean
23
Energy Generation (MW average1) Billed Energy (GWh²)
Operational Performance
Generation – MW Avg. Generation / Physical Guarantee
130%
1,543 1,510
121%118%
1,662
2007 2008 2009 1Q09 1Q10
1,979
1,753
137%
155%
1- Generated energy divided by the amount of period hours 2 - Including energy purchased 3 – Considers the difference between the sale and purchase volume
MRE2
AES Eletropaulo Spot Market2
Other Bilateral Contracts
13,421
1,740
11,108
13,148330
1,680
11,138
2007 2008
573
14,523
2,357
955
11,108
2009
103
1Q09
3,705
563335
2,787
19
1Q10
4,164
511
589
3,015
49
24
Investments (R$ million)
Investments
New SHPPs
Investments
2007 2008
8
5159
3943
20
2009
13
57
44
2010 (e)
58
67
1Q10 Investments
75%
2%6%
18%
Equip. and Maint.
Environment IT
New SHPPs
1
81
7
9 8
1Q09 1Q10
9
25
ConcludedConcluded
1 - Small Hydro Power Plants
AES Tietê has been seeking opportunities to increase its installed capacity to comply with the 15% increase requirement in the State of São Paulo
In ProgressIn Progress
Under EvaluationUnder Evaluation
• 6MW of co-generation by biomass contracted for 15 years (initiating in 2010)
• 7 MW of hydropower generation through SHPPs1 in Jaguari Mirim river– SHPP São José (4 MW) is expected to begin the operation in 2H10– SHPP São Joaquim (3 MW) is expected to begin the operation in 2H10
Projects - expansion requirement
• 550 MW of thermo generation through natural gas– Location has been defined in Nov/2009– Initiation of the environmental licensing process, with entry on CETESB in March/2010
• 22 MW of hydro generation through SHPP, in stage of technical and economic feasibility studies
26
Net Revenue (R$ million)
Net revenue of R$ 460 million in 1Q10
2007 2008
1,6051,449
2009
1,670
1Q10 Average Prices (R$ / MWh)
AES Eletropaulo 152.00MRE 8.51Spot 18.20
1Q09
417
1Q10
460
CAGR: 20%
27
Costs and Expenses (R$ million)
Costs and expenses
1Q101Q09
48 48
3027
925
1698
16
Energy Purchase, Transmission and Connection Charges, and Water Resources
Other Costs and Expenses1
Depreciation and Amortization
Operational Provisions
20092008
416475
109 141
239 214
65
55653
1 - Personnel, Material, Third Party Services and Other Costs and Expenses
2007
415
97
281
65
28
CAGR: 5%
28
Ebitda (R$ million)
Ebitda of R$ 378 million in 1Q10
1,254
1,099
2007 2008
1,260
2009 1Q09 1Q10
378342
CAGR: 5%
29
Net Income (R$ million) Dividend Payout1 (R$ million)
1 - Gross amount
100 % 100 %
10% 12%
609692
Dividends Pay-out Yield PN
2007 2008
• 25% of minimum pay-out according to bylaw • Since 2006, practice of 100% payout on quarterly basis
Sustainable profitability and dividend payment
2009
780
11%
100 %
609692
2007 2008 2009
780
215
1Q09
239
1Q10 1Q09 1Q10
215 239
100 % 100 %
CAGR: 9%
30
Consolidated Managerial Cash Flow (R$ million)
R$ 829 million paid as dividends in 2009
Initial CashOperational Cash GenerationInvestmentsNet Financial ExpensesNet AmortizationIncome TaxFree Cash FlowDividends and Interest on EquityFinal Cash
2008 2009 1Q10
615368(8)
(12)(60)
(328)(41)
0574
1Q09
840297(11)(6)
(53)(253)(25)
0814
6381.222
(55)(49)
(194)(66)858
(656)840
8401.243
(58)(48)
(224)(309)
604(829)
615
2007
6881.120
(46)(72)
(197)(247)
558(608)
638
31
Debt
Net Debt / EbitdaNet Debt
1Q102008 2009
0.40.4
0.3x0.3x
1Q09
0.40.3
0.3x0.3x• R$ 900 million
• 5 years term
• CDI + 1.20% a.a.
• Payment on semiannual basis
• Fixed amortization on the 3rd, 4th, and 5th years
• Objective: pre-payment of Eletrobras debt
Net Debt (R$ billion) Overlook on the 1st Debenture Issue
2007
0.7
0.6x
32
Capital market
AES Tietê X Ibovespa X IEE Daily Avg. Volume (R$ thousand)
Last 12 Months
+ 72%
+ 45%
+ 10%
90110130150170190
Mar-09 Jun-09 Sep-09 Dec-09 Mar-10
Preferred Common
2008 2009
2,1012,692
10,1878,160
5,468
8,086
3,952
13,708
9,756
1Q10
Dec-09 Jan-10 Feb -10 Mar-10
1Q10
110
100
90
+ 3%
0%
- 3%AES Tietê PF
Ibovespa
IEE – Eletric Power Index
Social Responsibility andEnvironmental Actions
34
Social responsibility
• 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
Volunteering Program
Acting to Transform
Enterprising in the Community
Distributing Energy of
Good
Specific social mobilization or emergency campaign.
Winter clothes, Christmas campaign, among others.
Opportunities for volunteering in social organizations, which are
partners of AES Brazil
Co-workers can enroll in volunteer activities available at AES Brazil volunteering portal
since September/09www.energiadobem.com.br
Acknowledgement and support of projects for the
development of social organizations.
Volunteers may submit projects to help other
organizations to develop. Launch scheduled for 1half of
2010.
35
• 302 benefited children between 1 and 6 years old
• Own investments amounting R$ 1.5 million in 2009
• Units: Santo Amaro and Guarapiranga
• Over 5.2 thousand children, teenagers,
and adults have been benefited
• Own and incentive investments:
approximately R$ 14 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
“Casa da Cultura e Cidadania” Project
“Centros Educacionais Infantis Luz e Lápis” - Project
Social responsibility
Attachments
37
Shareholders Agreement
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
On December 22, 2003 AES and BNDES signed a Shareholders’ Agreement to regulate their relationship asshareholders of Brasiliana and its controlled companies. The Agreement is available at www.aeseletropaulo.com.br/ri
38
Energy sector agents in Brazil
Ministry of Mines and Energy (MME)
National Council of Energy Policy (CNPE)
Electric Energy Commercialization Chamber (CCEE)Pricing and clearing of
energy transactions
Electricity Sector Surveillance
Committee (CMSE)
Brazilian Electricity Regulatory Agency
(ANEEL)
Energy Research Enterprise (EPE)
Generation companies
Transmission companies
Distribution companies
Trading companies
System Operator (ONS)
Generator resources scheduling and dispatch
(Monitors energy supply) (Ruling, Inspection & Auditing, Monitoring, and Mediation)
(Generation & Transmission Planning)
(Set Guidelines and Policies)
(Formulates Policies)
39
Energy sector in Brazil(Contracting Environment)
Trading Companies
Free Clients
Spot Market
• Main auctions (reverse auctions):
– New Energy (A-5): Delivery in 5 years, 15-30
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
Regulated Market Free Market
Distribution Companies
PPAs1
Trading Companies
Free Clients
Distribution Companies
Auctions
1 – Power Purchase Agreement
40
Tariff Reset and Readjustment
• Tariff Reset is applied each 3 to 5 years − AES Eletropaulo: each 4 years (next 2011)− AES Sul: each 5 years (next 2011)− Parcel A: costs pass trough the tariff− Parcel B: costs are set by ANEEL
• Tariff Readjustment: annually − Parcel A costs pass trough the tariff− Parcel B cost are adjusted by IGPM +/- X(1) Factor
Energy Purchase
TransmissionSector Charges
Investment Remuneration
Depreciation
Reference Company(PMSO)
RemunerationAssetBase
X Depreciation
X WACC
Regulatory Ebitda
Parcel A - Non-Manageable Costs
Parcel B - Manageable Costs
• Remuneration Asset Base:– Applicable investments used to
calculate the Investment Remuneration (applying WACC) and Depreciation
• Reference Company:– Efficient cost structure, determined by
ANEEL (National Electricity Agency)
• Parcel A Costs− Non-manageable costs that totally
pass- through to the tariff− Losses reduction improve the pass-
through effectiveness
(1) X Factor: index that capture productivity gains
Discos regulatory methodology(Tariff Reset and Readjustment)
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
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.
Contacts:[email protected]
+ 55 11 2195 7048