1. Institutional
March, 2013
1

2. AES Brasil Group
•P
Presence i B il since 1997
in Brazil i
• Operational Figures:
• Consumption units: 7.7 million
54.4
• Distributed Energy: 54 4 TWh
• Installed Capacity: 2,658 MW
• Generated Energy : 14.3 TWh
• 7.4 thousand AES Brasil People
• Investments 1998-2012: R$ 9.4 billion
• Solid corporate governance and sustainable
practices
• Safety as value #1
Disco
Genco
Service Provider
2

3. AES Brasil widely recognized in 2009-2012
 Management Excellence
 Quality and Safety
 Environmental
Concern
(AES Tietê)
(AES Sul)
(AES
( S Eletropaulo)
)
(AES Ti tê)
Tietê)
(AES Brasil)
(AES Tietê)
(AES El t
Eletropaulo)
l )
(AES Eletropaulo)
(AES Tietê)
(AES Brasil)
(AES Eletropaulo)
(AES Tietê)
(AES Tietê)
(AES Eletropaulo)
(AES Eletropaulo/ Tietê)
(AES Tietê)
(2011- AES Tietê; 2012 – AES Eletropaulo)
(AES Eletropaulo)
(AES Eletropaulo)
3

4. Mission & visions
Mission
• Improving lives and promoting development by providing safe
safe,
reliable and sustainable energy solutions
Visions
• Be a leader in operational and financial management in Brazilian
energy generation sector and expand installed capacity
• Be the best distributors in Brazil
4

5. Social responsability: annual investments
of R$ 83 million
Development and transformation of communities
“Casa de Cultura e Cidadania” Project - Offers courses and activities in culture and sports. Directly benefits
approximately 5 6 tho sand
appro imatel 5.6 thousand children and teenagers and indirectly 292 tho sand people in 7 units located within
indirectl
thousand
nits
ithin
AES Brazil companies’ areas of operation
Children educational development
“Centros Educacionais Luz e Lápis” Project - Two units in São Paulo attending 300 children from
1 to 6 years old in condition of social vulnerability
Education on 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. The actions include
recreational activities offered in adapted trucks.
Converting consumers to clients
Developed for grid connection regularization. Since 2004, more than 500 thousand families in
low income communities were benefited from better energy supply conditions and social
inclusion.
5

6. Shareholding structure
BNDES
AES Corp
C 50.00% + 1 share
P 0.00%
T 46.15%
C 50.00% - 1 share
P 100%
T 53.85%
Cia. Brasiliana
de Energia
T 99.70%
AES Sul
C 99.99%
T 99.99%
AES
Serviços TC
C 99.99%
T 99.99%
C 71.35%
P 32.34%
T 52.55%
AES
Uruguaiana
AES
Tietê
C 76.45%
P 7.38%
T 34.87%
AES
Eletropaulo
C = Common Shares
P = Preferred Shares
T = Total
6

7. AES Tietê and AES Eletropaulo are listed
in
i BM&F Bovespa
B
¹
¹ Free Float
Others²
Market Cap³
16.1%
19.2%
56.2%
8.5%
US$ 1.4 bi
24.2%
24 2%
28.3%
28 3%
39.5%
39 5%
8.0%
8 0%
US$ 4 1 bi
4.1
1 - Parent companies, AES Corp and BNDES, have similar voting capital on each of the Companies: approx 35.9% on AES Eletropaulo and 32.9% on AES Tietê
2 - Includes Federal Government and Eletrobrás shares in AES Eletropaulo and AES Tietê, respectively
3 - Base: 12/28/2012. Considers preferred shares for AES Eletropaulo and preferred and common shares for AES Tietê
7

8. AES Brasil is the second largest group in the
electric sector
Ebitda1 – 2011 (R$ Billion)
5.4
4.9
3.8
2.9
2.9
2.0
1.9
1.5
1.2
0.7
07
CEMIG
Net
AES BRASIL
income1
2
CPFL
TRACTEBEL
NEOENERGIA
CESP
COPEL
EDP
LIGHT
0.3
0.3
DUKE
CESP
DUKE
– 2011 (R$ Billion)
(
)
3.0
2.4
1.6
1.6
1.4
1.2
0.5
AES BRASIL2
CEMIG
CPFL
NEOENERGIA
TRACTEBEL
COPEL
1 – excluding Eletrobrás
2 – includes AES Atimus sale (aprox. R$ 1 billion in EBITDA and aprox. R$ 700 million in net income)
LIGHT
0.1
01
EDP
Source: Companies’ financial reports
8

9. Generation installed capacity (MW) - 20121
AES Tietê is the 3rd largest private
generator in Brazil
Main privately held Companies
CPFL
2,4%
AES Tietê
2,2%
Eletronuclear
2,8%
ENDESA
Eletrosul
0,8%
0,5%
CGTEE
DUKE
Light
0,7% EDP
1,7%
0,8%
1,5%
Neoenergia
1,2%
 AES Tietê is the 3rd largest among private
generation companies
 Approximately 78% of country’s generation
country s
installed capacity is state-owned2
Copel
4%
 Three
Petrobrás
5%
Demais
D
i
28,9%
Cemig
6%
mega
hydropower
plants
under
construction in the North region of Brazil with
18 GW in installed capacity
Itaipu
6%
– Santo Antonio and Jirau (Madeira River): 7 GW
Tractebel
6%
CESP
6%
CHESF
9%
Eletronorte
7%
– Belo Monte (Xingu River): 11 GW
Furnas
F
8%
Total Installed Capacity: 123 GW
1- Sources: ANEEL – BIG (March, 2012) and Companies websites
2- Source: Banks’ reports
9

10. AES Brasil is among the top 3 largest
distribution players in Brazil
Consumers – D /2011
C
Dec/2011
13%
• 63
30%
AES
A Brasil
5%
CPFL Energia
16%
7%
Consumption (GWh) - 2011
in
Brazil
• AES Brasil is one of the largest electricity
distribution group in Brazil:
– AES Eletropaulo: 45 TWh distributed,
Cemig
7%
companies
distributing 430 TWh
12%
12%
distribution
Neo Energia
10.5% of the Brazilian market
– AES Sul: 8.6 TWh distributed, 2.0% of
the Brazilian market
13%
Copel
12%
Light
 AES Eletropaulo is the largest electricity
distributor in Latin America in terms of
revenue supply, according to ABRADEE¹
52%
EDP
 Distribution companies’ operations are
11%
Outros
restricted to their concession areas
7%
6%
6%
6%
1 – Brazilian Association of Electricity Distributors
 Acquisitions must only be performed by
the holdings of economic groups
10
10

12. AES Tietê overview
Generation facilities
 12 hydroelectric plants in São Paulo
 30-year concession valid until 2029
 Installed capacity of 2,658 MW, with physical guarantee1
of 1,278 MW average
 Almost all the amount of energy that AES Tietê can sell
is contracted with AES Eletropaulo until the end of 2015
 AES Tietê can invest in generation, its main activity, and
g
,
y,
operate in energy trading
 364 employees as of December, 2012
1 - Amount of energy allowed to be long term contracted
12

13. Generated energy shows high
operational availability
p
y
Generated energy (MW avarage1)
130%
2012 Generated energy by power plant (MW average1)
127%
125%
124%
4%
2%3%
Agua Vermelha
5%
Nova A
N
Avanhandava
h d
5%
Promissão
9%
1,665
1,599
1,582
61%
Ibitinga
Bariri
1,629
11%
Barra Bonita
Euclides da Cunha
2009
2010
Generation - Mwavg
2011
Other Power Plants *
2012
Generation/Physical guarantee
1 – Generated energy divided by the amount of hours
* Caconde, Limoeiro, Mogi and SHPPs
13

14. A significant amount of billed energy and net
revenues comes from the bilateral contract with
AES Eletropaulo
Billed energy (GWh)
Net revenues (%)
89%
16,728
15,112
14,729
14,706
554
301
117
615
1,150
1,340
1,519
2,331
1,980
1,942
11,108
11,108
11,108
1,141
1 141
1,535
8,045
3%
2% 6%
AES Eletropaulo
2009
2010
2011
2012
Other bilateral contracts
AES Eletropaulo
S
Energy Reallocation Mechanism
Spot Market
S
Other Bilateral Contracts
O
C
Spot Market
MRE1 1
ERM
1 – Energy Reallocation Mechanism
14

15. Power plants modernization
investments
Investments (R$ million)
213
175
19
• Main 2012 investments:
o R$ 123.1 million in modernization projects
$
p j
142
and new equipment of the power plants,
3
of special note to Nova Avanhandava,
82
12
Ibitinga, Euclides da Cunha and Limoeiro;
g ,
;
156
o R$ 11,6 million in IT upgrading; and
139
o R$ 4.1 million in the Jaguari Mirim Project
70
(São José SHPP), which started up
operations in March
2010
2011
Investments
* Small Hydro Power Plants
2012
2013 (e)
New SHPPs*
15

16. Strategy for energy contracting in 2016:
p
p
composition of client portfolio
Clients portfolio evolution in 2012
• Goals:
• Goals 2011/2012: commercial
initiatives to expand clients portfolio
in the free market
• The current portfolio comprises 320
259
320
Mwavg, of which 288 MWavg were
sold in 2012
84
90
1Q12
2Q12
• 143 Mwavg were sold to 2016
32
Before
dec/2011
3Q12
4Q12
onward
Mwavg
g
16

17. Financial highlights
Ebitda (R$ million)
Net revenue (R$ million)
2.112
1.670
1.754
1.886
1.255
1.320
1.466
1.542
2011
2012
9
1.309
2009
2010
Net Revenue
2011
2012
1.311
2009 (54) 2010
75%
75%
81%
73%
Recorrente
Ebitda Margin
17

18. Steady earnings distribution on a
quarterly
q arterl basis
Net income and dividend pay-out (R$ million)
117%
110%
109%
11%
706
11%
11%
• Dividends distribution practice:
100% of net income
108%
12%
–
25%
of
minimum
p y
pay-out
according to bylaws
845
737
901
–
106%
15
–
31
Average payout since 2006:
Average dividends since 2006:
R$ 745 million per year
742
706
886
2009 (36)
Pay- out
2010
Yield Pref
2011
Recurring
2012
Non-recurring
18

19. Debt profile
Amortization schedule – principal (R$ million)
Net debt (R$ billion)
0,7
0,7
0,6
0,3x
0,3x
0,3x
0,6
06
0,3x
300
0,4
0,5
 Gross debt/Ebitda of 2.5x

2014
2015
0,5
2009
2010
2011
2012
Net Debt
Net Debt / Ebitda
Gross Debt/Ebitda
Covenants
300
2013 (e)
0,4
300
Ebitda/Financial expenses of 1.75x
Debt amortization flow (R$ million)
2011
 Average Cost (% CDI)1 115%
Average Cost
128%
 Average Term (years)
1.3
 Effective Rate
1 – Brazilian Interbank Interest Rate
2012
2.3
12.1%
9.8%
19

20. Capital markets
Daily avg volume (R$ thousand)
AES Tietê X Ibovespa X IEE
12 months1
739
703
A
120
8%
553
546
19,687
100
-1%
-11%
11%
-11%
-12%
80
60
Dec-11
Feb-12
Apr-12
IEE
Ibovespa
Jun-12
Aug-12
Oct-12
TSR
Dec-12
13,922
10,187
10 187
4,239
8,086
9,683
9,537
2009
2010
2011
5,269
3,397
2,101
14,418
2012
GETI3
Preferred
GETI4
12,584
Common
Shares negotiated (thousand)
A 09/12/2012: The Brazilian Government announced the Energy Reduction Program,
by the PM 579
y
•
Market Cap4: US$ 4.1 billion / R$ 8.5 billion
•
BM&FBovespa: GETI3 (common shares) and GETI4 (preferred shares)
•
ADRs
ADR negotiated i US OTC M k t AESAY (
ti t d in
Market:
(common shares) and AESYY
h
) d
(preferred shares)
1 – Index: 12/29/2011 = 100
2 – Electric Energy Index
3 – Total Shareholders’ Return
4 – Index: 12/28/2012
20

22. 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 and 6.3 million consumption
units in a concession area of 4,526 km2
 45 TWh distributed in 2012
 AES Eletropaulo, as a distribution company, can only invest in
assets within its concession area
 5,872 employees as of December, 2012
22

23. Consumption evolution
Total market1 (GWh)
Consumption by class – 2012 (%)
6.832
34.436
43.345
7.911
35.434
45.102
8.284
17
45.557
7.987
36.817
9
30
43
41.269
15
24
37.570
37
26
2009
2010
Captive Market
2011
2012
Brazil
Free Clients
Residential
1 – Net of own consumption
AES Eletropaulo
Industrial
Commercial
Others
23

24. Industrial class
Industrial class X Industrial production in São Paulo State
15%
10%
5%
0%
•
-5%
Economic crisis
consumption
influenced
Economic recovery
-10%
Industrial
by
is
manufacturing
industry performance in São Paulo
-15%
State
Jul/07 Dec/07 May/08 Oct/08 Mar/09 Aug/09 Jan/10 Jun/10 Nov/10 Apr/11 Sep/11 Feb/12 Jul/12 Dec/12
Industrial Production SP (% 12 months)
Industrial (% 12 months)
Consumption of industrial class by activity1 – AES Eletropaulo
•
Recent slowdown is influenced by
y
the
decrease
of
industrial
production in 2011 and 2012
Other
industries
51%
1 – As of December 2012.
Vehicles,
Chemical,
Rubber,
Plastic and
Metal Products
49%
24

25. Residential class
Residential class X A erage income in São Paulo Metropolitan Area
Average
Pa lo
4,800
4,300
3,800
3,300
Residentia GWh
al ‐
Avg Real
l Income R$ ‐ SP (Q
Q ‐2*)
1
Residential Consumption x Real Income ‐ São Paulo (Q‐2*)
2,200
2,100
2,000
1,900
1,800
1,700
1,600
1,500
1,400
1 400
1,300
1,200

Residential consumption driven
by average income
2,800
2 800

2,300
Paulo
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2007
2008
2009
2010
2011
Income expansion trend in São
Area
will
sustain growth of residential class
2012

Consumption per consumer (i kWh)
C
ti
(in
Consumption per consumer i
C
ti
is
still
8.6%
lower
than
in
the period before the rationing
- 8.6%
258
Metropolitan
Rationing
220
192
199
203 207
223
213 219
228
229 234
236
2009
2010
2012
1 - Two quarters of delay in relation to consumption
2000
2001
2002
2003
2004
2005
2006
2007
2008
2011
25

26. Investments focused on grid automation,
maintenance and system expansion
y
p
Investments breakdown (R$ million)
800
700
739
682
831
35
• Main 2012 investments:
22
647
28
26
 System Expansion and Customer
600
Services - R$ 195.5 million was
500
invested to add 202,000 new clients
400
300
654
717
796
 Loss Recovery - R$ 27 9 million
27.9
621
200
invested,
regularizing
55,400
clandestine connections
100
 Maintenance
0
2010
2011
Own resources
2012
2013(e)
-
R$
213.0
million,
mainly in maintaining the 2,005 km grid
Paid by the clients
26

27. SAIDI below regulatory limits and
in its lowest level since 2006
SAIDI¹ (last 12 months)
SAIDI1 (LTM)
-17%
10.09
11.86
9.32
8.68
10.60
10.36
2009
2010
7th
8.49
8.35
8.23
2012
2011
8th
8.67
jan/13
9.87
8.23
jan/12
jan/13
6th
SAIDI (hours)
SAIDI Aneel Reference
ABRADEE ranking position among the 28 utilities with more than 500 thousand customers
►
1 - System Average Interruption Duration Index
Source: ANEEL and AES Eletropaulo
2012 SAIDI ANEEL Reference: 8.49 hours
27

28. SAIFI remains below the regulatory limit
and still decreasing
SAIFI¹ (last 12 months)
7.87
7.39
SAIFI1 (LTM)
6.93
6.87
6.64
-15%
6.17
5.46
5.45
2009
2010
2011
7th
3rd
4.65
2012
5.37
4.55
jan/13
jan/12
4.55
jan/13
4th
SAIFI (times)
SAIFI Aneel Reference
ABRADEE ranking position among the 28 utilities with more than 500 thousand customers
►
1 - System Average Interruption Duration Index
Source: ANEEL and AES Eletropaulo
2012 SAIFI ANEEL Reference: 6.64 times
28

29. Losses level close to the regulatory
reference for t e 3 d Cyc e o Tariff Reset
e e e ce o the 3rd Cycle of a
eset
Losses (last 12 months)
11.8
11 8
Regulatory Reference² - Total Losses (last 12 months)
10.9
10.5
10.2
5.3
4.4
4.0
6.5
6.5
2010
2011
2012
9.8
9.4
2013/2014
2014/2015
6.1
2009
10.3
4.1
6.5
10.6
Technical Losses ¹
2011/2012
2012/2013
Non Technical Losses
1 – In January 2012, the Company improved the assessment of the technical losses. As a consequence of this improvement, technical losses calculated are in a level of 6.1%.
2 – Values estimated by the Company to make them comparable to the reference for non-technical losses determined by the Aneel
29

30. Financial highlights
Net revenues (R$ million)
Ebitda (R$ million)
2.413
426
9,697
9,836
9 836
9,959
,
2.848
933
1.775
87
197
339
1.491
1.648
442
8,786
1.473
656
179
476
2009
2010
2011
2012
2009
2010
2011
2012
Recurring
Regulatory assets and liabilities
Non-recurring
1 – Non recurring 2011 : Includes sale of AES Eletropaulo Telecom with a R$ 707 million impact on Ebitda
1
30

31. Earnings distribution
on semi-annual basis
Net income and dividend payout1 (R$ million)
N ti
d di id d
t
illi )
101,5%
114,4%
54,4%
25,0%
20,4%
28,6%
17,1%
1.572
0,9%
2.8%
140,0%
120,0%
,
100,0%
80,0%
60,0%
40,0%
20,0%
0,0%
•
Dividends
distribution
distribution above the
practice:
minimum
required
1.348
-
374
236
160
622
762
Average payout
74% per year
–
350
25% of minimum
according to bylaws
–
1.157
Average dividends since 2006:
R$ 890 million per year
p y
652
287
634
108
pay-out
since 2006:
229
(121)
2009
2010
2011
2012
Pay-out³
³
Yield PN
Adjusted Net Income
Regulatory assets and liabilities
One off
1 – Gross amount
2– Non recurring 2011 :Includes sale of AES Eletropaulo Telecom with a R$ 467 million impact on net income
31

32. Efficiency increase to operate
within the regulatory limits
“Criando Valor” (Creating Value) Project
 Aims cost control gains by increasing productivity, optimizing supporting functions and enhancing efficiency in
key processes
 Benefits to be obtained in 2012 will absorb part of tariff reset impacts and pressure on costs
Additional initiatives
 Change of corporate headquarters
Operational
 Optimization of operational bases
 Stores review by increasing of outsourcing
 Organizational restructuring
 30% growth in the productivity of operations teams of the regional north (being implemented for other
regional)
c ease the u be of clients served
automatic channels
 Increase in t e number o c e ts se ed by auto at c c a e s
 Renegotiation of supplies contracts
 Sale of real estate with an estimated value of $ 239 million of which R$ 160 million were already sold
million,
Financial
 Covenants renegotiation and lengthening debt profile
 Reducing manageable costs estimated at R$ 100 million from 2013
32

33. Debt refinancing conclusion of R$ 1 billion
resulting in more flexible covenants
 Decrease in debt amortization volume for 2013-15 by R$ 750 million
Benefits
 Increase in the a erage debt mat rit from 6 6 years to 7 2 years
average
maturity
6.6 ears 7.2 ears
 Debt average costs decrease from CDI+1.29% to CDI+1.27%
 More flexible covenants
Debt amortization schedule
Before restructuring
After restructuring
1.133
875
R$ 513 million
R$ 1,241 million
639
732
50
578
388
275
86
533
302
2013
387
47
228
2014
51
2015
58
280
54
337
2016
Debt in R$ (ex-pension plan debt )
226
2017
383
227
62
436
2018
531
57
53
494
44
321
2019
157
400
2020 2028
Pension plan debt
129
104
53
43
85
2013
2014
589
46
180
2015
384
688
654
654
61
478
323
2016
834
745
2017
Debt in R$ (ex-pension plan debt )
2018
2019
221
180
2020
2021 2028
Pension plan debt
33

34. More flexible covenants and
considering IFRS changes
FROM
TO
Net d bt Adj t d Ebitda 3.5
N t debt / Adjusted Ebitd < 3 5
Financial Index
Gross debt / Adjusted Ebitda < 3.5
Default
If the limit is exceeded in any quarter
Regulatory assets
and liabilities
Not considered in the calculation
(equivalent to 4.5x Gross Debt / Adjusted Ebitda)
If the limit is exceeded for two consecutive
quarters
Considered in the calculation
(concept before IFRS adoption)
Debt recognized in liabilities excluding the
Pension plan debt
Compulsory loans
Total debt recognized in liabilities
Considered in the calculation of debt
“corridor” concept
Out of debt calculation
34

35. Debt profile
Net debt
4.9x
1.5x
2.4
2.3
0.9x
0.9x
3.1
2.5
2010
2011
2.3
2009
2012
2.4
2010
2011
3.1
2012
Net Debt (R$ billion)
Net Debt/Ebitda Adjusted with
Fcesp
Net Debt (R$ billion)
December, 2012:
Indexed by: 70% CDI²; 29% IGP-DI³ and 0.7% others
35
1 – According the new covenants
2 – Brazilian Interbank Interest Rate
3 – Inflation Index

36. Capital markets
Average d il volume (R$ th
A
daily l
thousand)
d)
AES El t
Eletropaulo X Ibovespa X IEE
l
Ib
A
12 months¹
B
120
8%
100
-11%
21,960
24,496
26,897
23,057
2011
2012
80
-44%
44%
60
-54%
40
2009
20
Dec-11
Feb-12
Ibovespa
Apr-12
IEE²
Jun-12
Aug-12
AES Eletropaulo PN
Oct-12
Dec-12
2010
Preferred
AES Eletropaulo TSR³
A Material Fact 04/10/2012: technical notes published by Aneel regarding the calculation
of the preliminar tariff review rate, including the regulatory asset basis .
B Material Fact 07/02/2012 and 07/03/2012: Aneel final terms about tariff review rate,
including the regulatory asset basis and tariff adjustments .
•
Market cap4: US$ 1.4 billion/R$ 2.8 billion
•
BM&FBOVESPA: ELPL3 (common shares) and ELPL4 (preferred shares)
•
ADRs at US OTC Market: EPUMY (preferred shares)
1 – Information until 12/28/2012. Index: 12/29/2011 = 100
3 – Total Shareholder Return
2 – Electric Energy Index
4– Index: 12/28/12. Calculation includes only preferred shares
36

37. Attachment I

38. Distribution Companies: Tariff methodology
Tariff reset and readjustment
• Tariff Reset is applied each 4 years for AES Eletropaulo
− Next tariff reset: Jul/2015
• Parcel A Costs
− Parcel A: costs are largely passed through to the tariff
− Parcel B: costs are set by ANEEL
• Tariff Readjustment: annually
− Parcel A : costs are largely passed through to the tariff
− Parcel B: cost are adjusted by IGPM +/- X(1) Factor
X WACC
Energy
Purchase
Transmission
Sector Charges
Regulatory
Opex
(PMSO)
Investment
Remuneration
Remuneration
R
ti
Asset Base
X Depreciation
Depreciation
Regulatory
Ebitda
1 – X Factor: index that captures productivity gains
− Non-manageable costs that are largely
passed through to the tariff
− Incentives to reduces costs
• Regulatory Opex:
– Efficient operating cost determined by
ANEEL (National Electricity Agency)
• Remuneration Asset Base:
– Prudent investments used to calculate
the investment remuneration (applying
WACC) and depreciation
Parcel A - Non-Manageable Costs
Parcel B - Manageable Costs
38

39. Tariff methodology
3rd Cycle of tariff reset – X factor
X FACTOR
=
Pd
+
Q
+
T
DEFINITION
Distribution
productivity
Quality of service
Operational expenses
trajectory
OBJECTIVE
Capture productivity
gains
Stimulate
Sti l t
improvement of
service quality
Implement
operational expenses
trajectory
APPLICATION
Defined at tariff reset,
considers the average
productivity of sector
adjusted by market
growth and
consumption variation
Defined at each tariff
readjustment, considers
variation of SAIDI and
SAIFI and comparative
performance of discos
Defined at tariff reset,
considers reference
company and
benchmarking
methodologies
39

40. 3rd Cycle of the Tariff Reset
for AES Eletropaulo
 Gross Regulatory Asset Base: R$ 10,748.8 million
Tariff Review
 Net Regulatory Asset Base: R$ 4 445 1 million
4,445.1
 Parcel B: R$ 2,007.1 million
 Non Technical Losses (referenced in the low voltage market): start point at 11.56% and get to 8,56%,
by the end of the cycle
 Average effect to be perceived by the consumer: -9.33%
 Economical Effect: -5.60%
Tariff Adjustment
Tariff R i
T iff Review +
 A
Average effect t b perceived b th consumer : +5.51%
ff t to be
i d by the
5 51%
 Economical Effect: +4.45%
 Average effect to be perceived by the consumer : -2.26%
Adjustment
Administrative
appeal
 In 17th July Company filed a request for reconsideration of the Homologation Resolution No
July,
No.
1,327/2012 about the Regulatory Asset Base and the non-technical losses trajectory
40

41. Discussions with Regulator
Discussion
Arguments
 Shielded RAB was approved by Aneel in 2003

Shielded RAB
Aneel excluded R$ 728 million f
A
l
l d d
illi
from
shielded RAB, due to the decrease in
the amount of cables between the
accounting records and the shielded
RAB, between cycles
RAB b t
l
and was confirmed in 2007, considering a global
consistency criteria
 If the exclusion of the amount of cables is
maintained, an addition of R$ 660 million of
,
$
assets in operation (2003 BRR) should be
considered

Investments

Losses
Aneel did not recognize a R$ 427 million
investment performed in the incremental
period on Minor Components to Main
Equipments (“COM”) and Additional
q p
(
)
Costs (“CA”)
Aneel changed the benchmark company
proposed in the Public Hearing,
modifying
the
regulatory
losses
reduction from 0.49% to 1%
 Adequacy of the regulatory standards applied by
Aneel for the valuation of real costs incurred in
execution of works and recorded in accounting
books
 Benchmark company is an outlier
p y
 Regulatory losses reduction shall be restored to
the previous number of 0.49%
41

42. Energy cost reduction program
 Program created by Provisional Measure 579 (“PM 579”) in 09/12/2012;
 Law Decree 7805 was published on 09/17/2012 and regulates the terms of PM 579;
 On January 14 2013 the PM 579 was converted into Law No 12 783 and sanctioned by President Dilma Rouseff
14, 2013,
No.12.783
 It aims to reduce tariffs by an average of 20% (Residential: 16.2% and industrial 20% to 28%), as from February, 2013,
through:
- Reduction Sector Charges (RGR, CCC and CDE): - 7%
- Renewal Leases Generation and Transmission: - 13%
 New rules are only valid for the concessions granted before 1995, i.e, they are not valid for AES Eletropaulo
(concession expires in 2028) nor for AES Tietê (concession expires in 2029).
42

43. Energy cost reduction program
Generation &
Transmission
 Extension for 30 years with effects anticipated for 2013:
- Assets not depreciated / amortized will be evaluated based on the methodology of the
new replacement value (NRV). Holders of concession will be compensated with such
amount
 Concession renewal will be based on O&M costs, industry charges, fees and network usage
 Energy associated with the renewal of concessions will be fully allocated to the regulated market
 Extension for 30 years
Distribution
 Rules for renewal has not been defined
 Jan, 20 2013: Final resolution of the energy quotas for Discos (ANEEL)
Other terms and
timeline
 Feb, 05 2013: Disco’s extraordinary review of the distribution rates perception for the consumers
(ANEEL)
 Concessions that are not renewed will be auctioned under the same conditions of the renewed
concessions
43

44. Energy cost reduction program
AES Tietê
Opportunities
O
t iti
 Competitive prices in the free market
(~ R$ 100 – R$ 110/MWh)
 Possible pressure of higher prices at
the free market in the short term
AES Eletropaulo
 Marginal benefits in collection and
g
potential decrease in delinquency, since
energy costs will be reduced
 Increase in energy consumption, as a
potential result of the drop in t iff
t ti l
lt f th d
i tariffs
 Exchange rate variation of the energy
price purchased from Itaipu will no longer
be suportted by distribution companies,
but by Eletrobras
Risks
 Investments in modernization to be
recognized by ANEEL at the end of the
concession
 Cash impact between tariff
adjustments of hydrological risks due to
the allocation of energy quotas
44

45. Costs and expenses
Costs and operational expenses1 (R$ million)
570
415
201
433
419
187
174
198
372
214
2009
246
245
2010
2011
2012
Energy Purchase, Transmission and Connection Charges, and Water Resources
Other Costs and Expenses
1
2
1 – Do not include depreciation and amortization 2 - Personnel, Material, Third Party Services and Other Costs and Expenses
45

46. Costs and expenses
Costs and operational expenses1 (R$ million)
PMS2 and other expenses (R$ million)
1,531
8,390
6,431
1,306
6,745
6 745
6,940
,
1,255
1,306
1,255
1,251
165
192
1,251
1,531
,53
254
261
705
700
647
546
443
513
565
2010
2011
2012
6,858
5,125
5,490
5,689
352
2009
2010
2011
Energy Supply and Transmission Charges
2012
PMS² and Others Expenses
1 – Do not include depreciation and amortization
2 - Personnel, Material, Third Party Services and Other Costs and Expenses
2009
Material and Third Party
Personnel and Payroll
Others
46

47. Energy Summary
Energy Supply Balance - 2012 (GWh)
SUPPLY (GWh)
ITAIPU
BILAT. TIETÊ
BILAT. OTHERS
PROINFA
AUCTION (Hidro)
AUCTION (Thermo)
CCEE
BILLING (GWh)
9,911
17,029
11,138
11,815
COMMERCIAL
5,803
INDUSTRIAL
48
1,003
Required
Energy
17,879
43,693
4,434
-720
RESIDENTIAL
2,922 P. SECTOR AND OTHERS
43
OWN CONSUMPTION
941
TRANSMISSION LOSS
5,139
DISTRIBUTION LOSS
The energy supply balance shown above reflects the numbers at the end of 2012, supplied by the Electricity Marketing Chamber (CCEE) in December 2012. The numbers shown in the
explanatory notes to the Financial Statements reflect values estimated by the Company at the time of the preparation of the accounts and which will be readjusted in the following
months when CCEE supplies its final numbers.
47

48. AES Tiete's expansion obligation
Efforts being made
Privatization Notice
established the
obligation to expand the
installed capacity in
15% (400 MW) until
2007,
2007 either in
greenfield projects
and/or through long
term purchase
agreements with new
plants
Judicial Notice:
Aneel informed
that the issue is
not related to
the concession
agreement and
must be
addressed with
the State of São
Paulo
The Company was notified
by the State of São Paulo
Attorney's Office to present
its understanding on the
matter,
matter having filed its
response on time, the
proceedings were ended,
since no other action was
taken by the Attorney's
Office
AES Tietê was
summoned to answer a
Lawsuit filed by the
State of São Paulo,
which requested the
fulfillment of the
obligation in 24 months.
An injunction was
granted in order to have
a project submitted
within 60 days.
19th
In March,
the
Company’s appeal
was denied. Thus,
on April, 26th AES
Tietê presented
“Thermo São Paulo”
Thermo
Paulo
project as the plan
to fullfill the
obligation to
expand the installed
capacity.
by the Company to
meet the obligation :
• Long-term energy
contracts (biomass)
totaling an average of
10 MW
• SHPP São Joaquim
- started operating in
July, 2011, with 3 MW
of installed capacity
1999
2007
Aug/08
Oct/08
Jul/09
Sep/10
Sep/11
Nov/11
Apr/12
Sep/12
• SHPP São José started operating in
March, 2012, with 4
MW of installed
Company faces restrictions until
deadline:
• Insufficiency of hydro resources
• Environmental restrictions
• Insufficiency of natural gas supply
• New Model of Electric Sector (Law #
10,848/2004), hi h forbids bilateral
10 848/2004) which f bid bil t l
agreements between generators and
distributors
In response to a
p
Popular Action (filed
by individuals against
the Federal
Government, Aneel,
AES Tietê and Duke),
the Company p
p y presents
its defense before the
first instance
Popular Action:
Due to the plaintiffs failure
to specify the persons that
should be named as
Defendants, a favorable
decision was rendered by
the first Instance Court
(an appeal has been filed)
Lawsuit:
The Company
appealed to the
State of Sao
Paulo State
Court of
Appeals and
the injunction
was kept
Decision in
the first
appeal level
determined
the state of
São Paulo to
express
about AES
Tietê’s
Expansion
program
capacity
• Thermal SP - Project
of a 550MW gas fired
thermo plant
• Thermal Araraquara
- Acquisition of a
purchase option
48

49. Growth opportunities
“Thermal São Paulo” Project
-
Natural
N t l gas combined cycle th
bi d
l thermal plant, with 550 MW of i t ll d capacity
l l t ith
f installed
it
-
Environmental License was restored after the decision of São Paulo State Court of Justice
-
Next steps: Obtain installation license
“Thermal Araraquara” Project
“Th
lA
”P j t
-
Natural gas combined cycle thermal plant, with 579 MW of installed capacity
-
Purchase option acquired in March, 2012
-
Next steps: Obtain installation license
49

50. Eletrobras lawsuit
State-owned
Eletropaulo was spunoff into four companies
and, according to our
understanding based
g
on the spin-off
agreement, the
discussion was
transferred to CTEEP
Stated-owned
Eletropaulo borrowed
money from Eletrobrás
Nov/86
Dec/88
State-owned
Eletropaulo and
Eletrobrás disagreed on
how to calculate
interest over that loan
and two lawsuits, which
were later merged into
one, were initiated
Jan/98
Eletrobrás, after
winning the interest
calculation discussion,
filed an Execution Suit
aiming the collection of
the amounts that were
in default
Apr/98
p
Privatization event .
State-owned
Eletropaulo became
AES Eletropaulo
Sep/01
p
Eletrobrás and CTEEP
appealed to the
Superior Court of
Justice (SCJ)
Sep/03
p
Based on the spin-off
protocol, the 2nd
Instance Court
excluded AES
Eletropaulo f
El
l from the
h
lawsuit
Oct/05
Jun/06
The SCJ annulled the
d
2nd Instance Court
decision and sent the
Execution Suit back to
the 1st Instance Court,
with the determination
to identify the amount
to be paid and who
should be liable for
such payment, which
should be done through
an appraisal procedure.
50

51. Eletrobras lawsuit
In accordance to the
procedure that was
stipulated by 2nd
Instance Court after
an appeal from AES
Eletropaulo,
Eletrobrás requested
the 1st Instance
Court to appoint an
expert
The 1st Instance
Court determined
AES Eletropaulo and
CTEEP to present
their arguments,
which occurred in
August
The 1st instance
Court dismissed the
parties’ requests of
producing evidences
and rendered a
decision stating AES
Eletropaulo’s
responsibility for the
debt pursuant to the
Spin-Off Protocol
The Rio de
Janeiro State
Court of Appeals,
granted on 15th a
preliminary
injunction that
suspended the
effects of the
December 2012
decision
Next Steps:
1 - The appraisal procedure (AP) is
expected to begin in the 1st half of
2013
2 – AP is not expected to be
concluded in a period shorter than 6
months from its beginning
3 - After AP s conclusion a 1st
AP’s conclusion,
Instance Court decision will be issued
> In case of an unfavorable decision:
May/09
y
Dec/10
Eletrobrás requested
the beginning of the
appraisal procedure
before the 1st
Instance Court
Jul/11
Eletrobrás requested
the ithd
th withdrawal of the
l f th
judicial deposit made
by state-owned
Eletropaulo in 1988,
which now amounts
for R$ 95 MM
(principal of the loan
(
f
taken in 1986), as a
direct consequence of
Eletrobrás’ victory on
the merits
Dec/12
Jan/12
Feb/12
4 – Appeal to the 2nd Instance Court
and file an injunction to stay the
execution proceedings
5 – If the injunction is not granted, the
execution proceeding can be resumed
and Eletropaulo will have to post a
guarantee
AES Eletropaulo filed an
appeal on Jan 7th arguing that
the decision is invalid, because
the procedure preceding such
decision should encompass full
discovery, pursuant to Superior
Courts determination Also,
determination. Also
the Company requested a
preliminary injunction to stay
the execution proceedings until
the ruling of the appeal
On 21st, AES
Eletropaulo became
aware of the
favorable decision
granted by the
TJRJ, which fully
annulled the first
instance decision
and determined the
return of the case to
the 1st instance
6 – Eletrobrás can request the seizure
of the guarantee
7 - Appeals to the Superior Courts and
file an injunction to stay the execution
proceedings
51

52. Shareholders agreement
On Dec-2003 AES and BNDES executed 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,
http://ri.aestiete.com.br/ and http://www.aeselpa.com.br/.
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
Tag along
rights
 In the case of change in Brasiliana’s control, tag along rights are triggered for the following
Drag along
rights
g
 Once the offering party exercises the Drag Along clause, offered party is obligated to dispose of all
the corporate interest at the same price offered by a third party
companies (only if AES is no longer controlling shareholder):
– AES Eletropaulo: Tag along of 100% on its common and preferred shares
– AES Tietê: Tag along of 80% on its common shares
– AES Elpa: Tag along of 80% on its common shares
its shares at the time, if the Right of 1st Refusal is not exercised by offered party
time
52

53. Brazilian main taxes
AES Eletropaulo
AES Tietê
• Income Tax / Social Contribution:
– 34% over taxable income
• ICMS (VAT tax)
– deferred tax
• PIS/Cofins (sales tax):
– Eletropaulo´s PPA: 3.65% over Revenue
– Other bilateral contracts: 9 25% over Revenue
9.25%
minus Costs
• Income Tax / Social Contribution:
– 34% over taxable income
• ICMS: 22% over Revenue (average rate)
– Residential: 25%
– I d t i l and commercial: 18%
Industrial d
i l
– Public entities: free
• PIS/Cofins:
– 9.25% over revenue minus Costs
53

54. AES Sul
Overview
•
•
•
•
•
•
•
Net Revenue – R$ million
2,300
2,100
Ebitda – R$ million
2,341
2,500
Serving 118 Municipalities in the State of Rio Grande do Sul
Concession area: 99,512 km2
1.1 million consumption units
Population Served: 3.6 million'
1,308 directed employees
Next tariff reset: April, 19 2013
Concession valid through November, 2027
Net income – R$ million
490
550
2,027
1,866
373
246
450
1,900
1,700
350
1,500
281
255
2011
2012
199
1,300
250
1,100
900
150
700
500
50
2010
2011
2012
2010
2011
2012
2010
54

55. AES Uruguaiana
g
Overview
•
Natural independent gas-fired thermal power generation Company founded in
2000
•
Located in the State of Rio Grande do Sul – city of Uruguaiana
•
Use of liquefied natural gas (LNG) transported through the Argentine gas
pipeline network
•
Installed capacity 640 MW
•
Two combustion turbines (capacity of 187.5 MW each)
•
One steam turbine (265 MW capacity)
•
Plant hibernated in April 2009 because of interruption on the g supply
p
p
gas pp y
•
Operations restarted in February 2013
•
Ongoing negotiations for longer term operation in combined cycle
55

56. Attachment II
Energy Sector in Brazil

57. Energy sector in Brazil: business segments
Free Clients
Distribution
Transmission
Generation
• 13 groups controlling 76% of
• C
Consumption of 113 TWh
ti
f
• 63 companies
i
• 68 companies
i
(26% of Brazilian total market)
• 430 TWh of energy
• 68% private sector
• Conventional sources: above
distributed in 2011
• High voltage transmission
3,000
3 000 kW
• 70 million consumers
illi
(>230 kV)
(
)
• 67% private sector
• 98,648 km in extension
• Annual tariff adjustment
lines (SIN¹)
• Tariff reset every four or
• Regulated public service
five years
with free access
• 5% biomass
• Regulated public service
• Regulated tariff (annually
• 4% SHPP2
• Regulated contracting
adjusted b inflation)
dj t d by i fl ti )
• 1% Wind
• Alternative sources: between
500 kW and 3,000 kW
g
• Large consumers can
purchase energy directly from
generators
• Free contracting environment
¹ Interconnected National System
² Small Hydro Power Plants
environment
total installed capacity
• 22% private sector
• 1,862 power plants
• 117 GW of installed capacity
• 73% hydroelectric
• 17% thermoelectric
• Contracting environment –
Sources: EPE, Aneel, ONS and Banks’ reports
free and regulated markets
57

58. Energy sector in Brazil:
contracting environment
g
Regulated market
Free market
Generators,
Generators Independent Power Producers
(IPPs), Trading companies and Auto producers
Generators and Independent
Power Producers (IPPs)
Auctions: New Energy
and Existing Energy
Distribution companies
•
Bilateral contracts (PPAs1)
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
58

59. Electric sector in Brazil:
demand and supply balance
Static balance1 – Load x Supply2 (considering reserve energy3)
Static balance - Load x Suppl (MW avg)
e
ly
100,000
100 000
90,000
• Brazilian electric system
80,000
presents a surplus in the
70,000
,
energy
balance
b l
for
f
the
h
60,000
years to come
50,000
40,000
• Expansion
p
30,000
opportunities
pp
since this capacity is not
20,000
yet fully contracted
10,000
-
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Balance (%)
5.9%
7.8%
11.2%
9.6%
8.4%
10.0%
10.6%
8.2%
5.4%
4.2%
Balance
3,528
4,875
7,443
6,684
6,097
7,590
8,404
6,734
4,673
3,770
Reserve
439
1,007
1,509
1,743
1,746
2,959
2,959
2,959
2,959
2,959
Supply
62,912
66,355
72,585
74,492
76,823
80,320
84,428
85,886
87,601
90,409
Load
59,823
62,487
66,651
69,551
72,472
75,689
78,983
82,111
85,887
89,598
1 -Ten-year Energy Plan 2020, May/2011 – EPE
2- Supply based on physical guarantee
3- Energy destined to equalize the differences between the sum of power plants’ physical guarantees and the system’s physical guarantee.
59

60. Generation market overview
Installed capacity (GW)1
Growth by source - new auctions (GW)
141
136
162
166
171
156
148
11
14
19
41
42
42
123
133
13
23
24
28
33
8
38
110
110
110
110
110
110
110
110
110
110
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Total: 22 GW
117
6
Current installed capacity
5
3
2
Auctioned
Thermal2
2.6
Hydro
8.6
Renewables
10.6
Upcoming auctions
• Brazilian installed capacity to grow 4-5% y.o.y (~ 5 GW) over the next 10 years
• Renewable energies will lead the capacity increase with competitive cost vs. other technologies and strong
Government support
• Gas-fired thermal to leverage on the pre-salt discoveries and on the dispatchability benefit
1- Source: EPE (Energetic Research Company), Ten-year Energy Plan 2020, May/2011
2- Amount related to thermal is an estimate of the Company
60

61. 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 f
lt
d
th
t ti l
l forecasts b
t based on th expectations of th C
d
the
t ti
f the Company’s M
’ Management i
t 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.