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1 Institutional February, 2012
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Page 1: Apresentação institucional 3_q11_en_v5

1

InstitutionalFebruary, 2012

Page 2: Apresentação institucional 3_q11_en_v5

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

Page 3: Apresentação institucional 3_q11_en_v5

3

(AES Eletropaulo) (AES Sul)

(AES Eletropaulo)

(AES Eletropaulo)

(AES Brasil)

(AES Tietê)

(AES Tietê)

(AES Eletropaulo)

(AES Tietê)

(AES Tietê)(AES Eletropaulo)

(AES Brasil)

AES Brasil widely recognized in 2009-2011

Quality and safety Management excellence Environmental concern

(AES Tietê) (AES Eletropaulo)

(AES Tietê)

Page 4: Apresentação institucional 3_q11_en_v5

4

AESInfoenergy

AESUruguaiana

AESEletropaulo

AESTietê

AES Corp BNDES

C = Common SharesP = Preferred Shares

T = Total

Shareholding Structure

C 99.99%T 99.99%

C 76.45%P 7.38%T 34.87%

Cia. Brasiliana de Energia

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 99.00%T 99.00%

AES Sul

T 99.70%

Page 5: Apresentação institucional 3_q11_en_v5

5

24.2% 28.3% 39.5% 8.0%

8.5%56.2%19.2%16.1%

Others²Free Float¹ ¹

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, respectively3 -

Base: 09/30/2011. Considers preferred shares for AES Eletropaulo and preferred and common shares for AES Tietê

R$ 8.5 bi

R$ 4.8 bi

Market Cap³

Listed Companies Shareholding Composition

Page 6: Apresentação institucional 3_q11_en_v5

6CEMIG AES BRASIL NEOENERGIA CPFL TRACTEBEL COPEL EDP LIGHT DUKE CESP

2.3 2.2

1.81.6

1.21.0

0.6 0.6

0.20.1

AES Brasil is the second largest group in electric sectorEbitda1 – 2010 (R$ Billion)

Net Income1 – 2010 (R$ Billion)

1 –

excluding Eletrobrás Source: Companies’

financial reports

CEMIG AES BRASIL CPFL NEOENERGIA TRACTEBEL CESP EDP LIGHT COPEL DUKE

4.54.2

3.43.0 2.6

2.0 1.6 1.6 1.5

0.6

Page 7: Apresentação institucional 3_q11_en_v5

71-

Sources: ANEEL –

BIG (January, 2012) and Companies websites 2-

Source: Merrill Lynch3 –

Eletrobrás, totaling 35%

³

AES Tietê is the 2nd largest among

private generation companies and 10th

largest overall

Approximately 78% of country’s

generation installed capacity is state-

owned2

There are three mega hydropower plants

under construction in the North region of

Brazil with 18 GW in installed capacity

Santo Antonio and Jirau (Madeira River): 7 GW

Belo Monte (Xingu River): 11 GW

Total Installed Capacity: 117 GW

Main privately held Companies

³

³

³

³

³

³

AES Tietê is an important player among private energy generators

Generation Installed Capacity (MW) - 20121

TRACTEBEL 6,1%

AES TIETÊ 2,3%

CPFL2,3%

DUKE1,9%

EDP1,6%

NEOENERGIA1,2%

ENDESA0,8%

LIGHT0,8%

CHESF 9%

FURNAS 8%

ELETRONORTE 8%

ITAIPU 6%

ELETRONUCLEAR3%

CGTEE1%

ELETROSUL0,5%

CESP 6%

CEMIG6%

PETROBRÁS 5%

COPEL4%

DEMAIS26%

Page 8: Apresentação institucional 3_q11_en_v5

8

AES Brasil is the largest distribution group in Brazil

Consumption (GWh) - 2010

Consumers – Dec/2010

63 distribution companies in Brazil distributing 419 TWh

AES Brasil is the largest electricity distribution group in Brazil:

AES Eletropaulo: 43 TWh distributed,

representing 10.3% of the Brazilian

market

AES Sul: 9 TWh distributed,

representing 2.2% of the Brazilian

market

Distribution companies’ operations are restricted to their concession areas

Acquisitions must be only performed by the holdings of economic groups

13%

12%

10%

7%6%6%

6%

40%

12%

12%

12%

16%7%7%

5%

30%

AAES Brasil

CPFL Energia

Cemig

Neo Energia

Copel

Light

EDP

Outros

Page 9: Apresentação institucional 3_q11_en_v5

Energy Sector in Brazil

Page 10: Apresentação institucional 3_q11_en_v5

¹

Interconected National System

²

Small Hydro Power Plants Sources: EPE, Aneel, ONS and Merrill Lynch

13 groups controlling 76% of total installed capacity

22% private sector

1,862 power plants

115 GW of installed capacity

73% hydroelectric

17% thermoelectric

5% biomass

4% SHPP

1% Wind

Contracting environment – free and regulated markets

68 companies

68% private sector

High voltage transmission

(>230 kV)

98.648 km in extension

lines (SIN)¹

Regulated public service

with free access

Regulated tariff (annually

adjusted by inflation)

63 companies

415 TWh of energy

distributed in 2010

68 million consumers

67% private sector

Annual tariff adjustment

Tariff reset every four or

five years

Regulated public service

Regulated contracting

environment

Consumption of 105 TWh

(25% of Brazilian total market)

Conventional sources: above 3000 kW

Alternative sources: between 500 kW e 3000 kW

Large consumers can purchase energy directly from generators

Free contracting environment

GenerationTransmissionDistributionFree Clients

Energy Sector in Brazil: business segments

10

Page 11: Apresentação institucional 3_q11_en_v5

Auctions: New Energy and Existing Energy Bilateral contracts (PPAs1)

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

11

Energy sector in Brazil: contracting environment

Generators, Independent Power Producers (IPPs), Trading companies and Auto producers

Free clientsDistribution companies

Generators and Independent Power Producers (IPPs)

Regulated Market Free Market

1 –

Power Purchase Agreement

Page 12: Apresentação institucional 3_q11_en_v5

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

349 369 380 376408

423444

469493

515

12

4.0% p.a.

5.0% p.a.

EPE’s1 Assumptions:

Latest EPE’s estimates considers an economic activity slowdown in Brazil (industrial stagnation and higher inflation).

For the next years, the good performance of domestic market and the perspectives of higher investments are factors indicating that the Brazilian economy will recover the growth path observed before the global crisis.

Brazil will also benefit from the growth of emerging markets, with impact on exports of primary products.

3.6%

Macroeconomic Scenario

Brazilian Consumption Evolution (TWh)

Energy sector in Brazil: demand perspectives

1 -

Source: EPE (Energetic Research Company) / ONS (National System

Operator) –

Second Review –

september/11

2004-2008 2010 2011 2012-2015

3.6 7.2 4.0 5.0

GDP - Annual growth (%)

Page 13: Apresentação institucional 3_q11_en_v5

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

13

Hydro: 67%

SHPP: 4%Natural gas: 7%

Biomass: 5%

Oil: 5%

Nuclear: 2%Coal: 2%Diesel: 1%

Wind: 7%

Steam: 0%

Others: 17%

1-

Source: EPE (Energetic Research Company), Ten-year Energy Plan 2020, May/2011

2 -

Small Hydro Power Plant

2020: 171 GW2011: 115 GW

2

2Annual Growth: 4.5% p.a.

(GDP: 5.0% p.a)

Energy sector in Brazil: supply perspectives

Installed Energy Capacity in Brazil1

Hydro: 73%

SHPP: 4%

Natural gas: 8%

Biomass: 5%

Oil: 3%

Nuclear: 2%

Coal: 2%Diesel: 1%Wind: 1%Steam: 1%

Others: 10%

Page 14: Apresentação institucional 3_q11_en_v5

14

Regulatory Opex

(PMSO)

Investment Remuneration

Depreciation

Energy Purchase

TransmissionSector Charges

Tariff Reset and Readjustment

Tariff Reset is applied each 4 years for AES Eletropaulo −

Base date: Jul/2011−

Parcel A: costs are largely pass trough the tariff−

Parcel B: costs are set by ANEEL

Tariff Readjustment: annually −

Parcel A : costs are largely pass trough the tariff−

Parcel B: cost are adjusted by IGPM +/-

X(1)

Factor

RemunerationAsset Base

X Depreciation

X WACC

Regulatory Ebitda

Parcel A - Non-Manageable Costs

Parcel B - Manageable Costs

Remuneration Asset Base:–

Prudent investments used to calculate the investment remuneration (applying WACC) and depreciation

Regulatory Opex:–

Efficient operating cost determined by ANEEL (National Electricity Agency)

Parcel A Costs−

Non-manageable costs that are largely passed through to the tariff

Incentives to reduces costs

1 –

X Factor: index that captures productivity gains

Energy sector in Brazil: regulatory methodology

Page 15: Apresentação institucional 3_q11_en_v5

15

3rd Cycle of Tariff Reset – X Factor

Energy sector in Brazil: regulatory methodology

X FACTOR = Pd Q T+ +

Distribution productivity

Quality of service Operational expenses trajectory

To capture productivity gains with distribution

To stimulate the improvement

of the service

quality

To implement operational expenses trajectory during

the tariff cycle

Defined at tariff reset, considering the

average productivity of sector adjusted by the

market growth and variation of consumer units of the distributor

since last reset

Defined at each tariff readjustement, according to the

variation of SAIDI and SAIFI and comparative performance of discos

Defined at tariff reset, considering the

expenses established by reference company and

benchmarking methodologies

DEFINITION

OBJECTIVE

APLICATION

Page 16: Apresentação institucional 3_q11_en_v5
Page 17: Apresentação institucional 3_q11_en_v5

17

AES Tietê Overview

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

Generation facilities

1 -

Amount of energy allowed to be long term contracted

Page 18: Apresentação institucional 3_q11_en_v5

Generated energy shows high operational availability

Generated energy (MW avarage1)

1 –

Generated energy divided by the amount of hours * Caconde, Limoeiro, Mogi and SHPPs

Generated energy by power plant (MW avarage1)

18

118%

130% 125%

2008 2009 2010 9M10 9M11

1,512

1,6651,599

1,703

1,550

Generation - Mwavg

129%126%

Generation/Physical guarantee

Page 19: Apresentação institucional 3_q11_en_v5

2008 2009 2010 9M10 9M11

11,138 11,108 11,108 8,578 8,045

1,680 2,331 1,980

1,554 1,535

331 1,150 1,340

1,135 1,188

117 301

215 346

AES Eletropaulo MRE Spot Market Other bilateral contracts2

1

13,148

14,706 14,729

11,483 11,114

-3%

A significant amount of billed energy and net revenues comes from the bilateral contract with

AES EletropauloEnergy Billed (GWh)

1 –

Leap Year

2 –

Energy Reallocation Mechanism

Net Revenues (%)

19

AES Eletropaulo

Other bilateral contracts

Spot Market

MRE

94%

3%2%

1%

Page 20: Apresentação institucional 3_q11_en_v5

2009 2010 2011 (e) 9M10 9M11

43 70

151

46

105 13

12

18

7

14

56

82

169

53

119

Investments New SHPPs*

20

Investments (R$ million) 9M11 Investments

Investments in the modernization of Nova Avanhandava, Ibitinga and Caconde

power plants

*Small Hydro Power Plants

+122%CAGR: 44%

84%

12%4%

Equipment and Modernization

New SHPPs*

IT projects

Page 21: Apresentação institucional 3_q11_en_v5

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

• Next events

• Updates

-

Environmental license obtained on October, 20th 2011 (valid for 5 years)

-

Gas unavailability for A-5 Energy Auction in 2011

-

Obtain installation license-

Participate in A-3 Auction expected to be realized in March 2012

-

Evaluate energy offering in the free market

Page 22: Apresentação institucional 3_q11_en_v5

(54)2008 2009 2010 9M10 9M11

1,309 1,311

9 1,254 1,255 1,320

1,035 1,048

Recurring Non-recurring

22

Ebitda (R$ million)Net Revenue (R$ million)

Financial highlights*

(*) 2009 and 2010 numbers in IFRS

CAGR: 5%

CAGR: 3%

78% 75% 75% 78% 78%

Ebitda margin

+1%+1%

2008 2009 2010 9M10 9M11

1,605 1,670 1,754 1,334 1,344

Page 23: Apresentação institucional 3_q11_en_v5

IFRS Effect

Practice of total net income distribution on quarterly basis*

Net Income and Dividend Pay-out1 (R$ million)

816 784542

31

28

692 706

737

570 582

23

(74)(36)

(78) (40)

-5%+2%

2008 2009 9M10 9M112010

1 –

Gross value(*) 2009 and 2010 numbers in IFRS

Pay -out Yield Pref Recurring Non-recurring

100%110%

117%

12%11% 11%

Page 24: Apresentação institucional 3_q11_en_v5

0.3x 0.3x 0.3x 0.3x 0.4x

2008 2009 2010 9M10 9M11

0.4 0.4 0.4 0.5 0.6

24

Debt profile

Net Debt (R$ billion) Amortization Schedule – Principal (R$ million)

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

1 –

Brazilian Interbank Interest Rate

Net debt / EBITDANet debt

2013 2014 2015

300 300 300

Page 25: Apresentação institucional 3_q11_en_v5

2008 2009 2010 9M11

5,4688,086

9,683 9,458

2,692

2,101

4,2393,370

8,160

10,187

13,922 12,828

Preferred Common

50

70

90

110

Dec-10 Mar-11 Jun-11 Sep-11

AES TIETÊ PF TSR IBOVESPA IEE

+5%+2%-2%

-25%

251 –

Index: 12/30/2010 = 100 2 –

Total Shareholders’

Return

YTD1

Capital Markets

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)

4 –

Index: 09/30/11

Daily Avg. Volume (R$ thousand)AES Tietê X Ibovespa X IEE

2 3

3 –

Electric Energy Index

Page 26: Apresentação institucional 3_q11_en_v5
Page 27: Apresentação institucional 3_q11_en_v5

27

AES Eletropaulo Overview

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

Concession Area

Page 28: Apresentação institucional 3_q11_en_v5

28

Consumption Evolution

Total Market1 (GWh) 9M11 Consumption by Class (%)

36%

14%

18%

26%

6%CAGR: 3%

1 –

Net of own consumption

+5%

Brazil AES Eletropaulo

2636

17

28

43

26

14 9

Residential Commercial Industrial Others

¹

5,000 

10,000 

15,000 

20,000 

25,000 

30,000 

35,000 

40,000 

45,000 

2008 2009 2010 9M10 9M11

33,860 34,436 35,43426,352 27,523

7,383 6,832 7,911

5,846 6,246

41,243 41,26943,345

32,198 33,769

Captive Market Free Clients

Page 29: Apresentação institucional 3_q11_en_v5

-15%

-10%

-5%

0%

5%

10%

15%

Jul-07 May-08 Mar-09 Jan-10 Nov-10 Sep-11

Industrial Production of SP (% 12 months) Industrial (% 12 months)

Economic  recoveryEconomic crisis

Industrial classIndustrial class X industrial production in São Paulo State

Consumption of industrial class by activity – AES Eletropaulo

Industrial consumption is

influenced by manufacturing

industry performance in São Paulo

State

Recent slowdown is influenced

by the decrease of industrial

production in 2011

Moreover, the migration of clients

to other regions of São Paulo State

and of the country negatively

impacts this class

Vehicles, Chemical, Rubber, Plastic and Metal

products 50%

Other industries50%

29

Page 30: Apresentação institucional 3_q11_en_v5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

260

220

192 198 198 206 212 217 220 228 228 235

- 9.7%

Residential classResidential class X Average income in São Paulo Metropolitan Area

* 2 quarters of

delay in relation to consumption

Residential class is influenced by income in São Paulo Metropolitan Area

Maintenance of the income expansion trend in São Paulo Metropolitan Area will sustain growth of residential class

Average annual growth (2003- 2011):

total residential market: 5.5%

y.y.

consumption per consumer: 2.1% y.y.

Consumption per consumer is still 9.7% lower than in the period before the rationing

2,800

3,300

3,800

4,300

4,800

1,000

1,200

1,400

1,600

1,800

1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11

Resi

dent

ial

(GW

h)

Aver

age

Inco

me

R$ -

SP (q

-2*)

Avg Real Income R$ - SP (t-2) Residential (GWh)

30

Consumption per consumer (in kWh) – YTD September

Page 31: Apresentação institucional 3_q11_en_v5

31

Investments amounted R$ 530 million in 9M11

Investments Breakdown (R$ million) Investments 9M11 (R$ million)

CAGR: 13%

+38%

100 

200 

300 

400 

500 

600 

700 

800 

2009 2010 2011(e) 9M10 9M11

478654 715

362513

37

2829

22

16516

682744

383530

Capex Paid by Customers

166

128

125 27

21 16

47

Maitenance

Client Service

System Expansion

Losses Recovery

IT

Paid by the Clients

Others31

Page 32: Apresentação institucional 3_q11_en_v5

32

SAIFI - System Average Interruption Frequency Index SAIDI - System Average Interruption Duration Index

SAIDI & SAIFI

8th5th 7th1st7th 3rd

Sources: ANEEL, AES Eletropaulo and ABRADEE

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

2008 2009 2010 9M10 9M11

5.206.17 5.43 6.06 5.42

SAIFI (times)

8.41 7.87

7.39

SAIFI Aneel Reference

2008 2009 2010 9M10 9M11

9,20 11,86 10,60 11,95 10,30

SAIDI (hours)

10,92 10,09

9,32

SAIDI Aneel Reference

Page 33: Apresentação institucional 3_q11_en_v5

From Jul/10 to Jun/11: 12.45%From Jul/09 to Jun/10: 12.32%

33

Losses (%)

1 –

Current technical losses used retroactively as a reference

Collection Rate (% over Gross Revenues)

Operational Indexes

2008 2009 2010 9M10 9M11

6.5 6.5 6.5 6.5 6.5

5.1 5.3 4.4 4.5 4.1

11.6 11.810.9 11.0 10.6

2008 2009 2010 9M10 9M11

98.5101.1 102.4 100.3 103.0

Technical Losses ¹ Commercial Losses

ANEEL References:

Page 34: Apresentação institucional 3_q11_en_v5

34

Ebitda (R$ million)Net Revenues (R$ million)

CAGR: 9%

Financial Highlights*

CAGR: 15%

(*) 2009 and 2010 numbers in IFRS

+5%

- 8%

1,000 

2,000 

3,000 

4,000 

5,000 

6,000 

7,000 

8,000 

9,000 

10,000 

2008 2009 2010 9M10 9M11

7,530

8,7869,697

7,046 7,371

2008 2009 2010 9M10 9M11

1,607 1,491 1,6481,325 1,326

-197

339

245 332 89

87

426

301 58 1,696 1,775

2,413

1,870 1,716

RecurringRegulatory assets and liabilitiesNon-recurring

Page 35: Apresentação institucional 3_q11_en_v5

351 –

Gross amount

Net Income and Dividend Payout1 (R$ million)

Practice of dividend distributionon semi-annual basis*

(*) 2009 and 2010 numbers in IFRS

-15%

101.5% 93.4%

115.4%

20.3% 20.4%

28.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

Pay-out Yield PN

2008 2009 2010 9M10 9M11

698 622762

583 582

160

236

171 214

329374

350

282 89

1,027 1,156

1,348

1,037 885

Net Income - ex one-off and regulatory assets and liabilities

Regulatory assets and liabilities

One-off

Page 36: Apresentação institucional 3_q11_en_v5

36

Amortization Schedule – Principal (R$ million)

1 –

Brazilian Interbank Interest Rate

2 –

Pension Fund

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

Debt ProfileNet Debt (R$ billion)

²Local Currency (ex FCesp) Fcesp

2008 2009 2010 9M10 9M11

2.5 2.7 2.4 2.6 2.9

Net Debt (R$ billion)

1.5x1.4x

0.9x

Net Debt/Ebitda Adjusted with Fcesp

1.0x 1.2x

2011 2012 2013 2014 2015 2016 2017 2018 2019 -2028

281 301532

226 335 225375

180

80 45

48

5155

5862

847

22

360 346

579

277390

283437

1,047

Page 37: Apresentação institucional 3_q11_en_v5

65

75

85

95

105

115

125

Dec-10 Feb-11 Apr-11 Jun-11 Aug-11

9M11 1

Ibovespa IEE² AES Eletropaulo PN AES Eletropaulo TSR³

+ 2%

- 24 %

- 11%

+ 11%

37

Average Daily Volume (R$ thousand)

Capital MarketsAES Eletropaulo X Ibovespa X IEE

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 Index3 –

Total Shareholders’

Return

4 -

Index: 09/30/11. Calculation includes only preferred shares.

A Ex dividends: 04/30/2011

A

15,000.00

17,000.00

19,000.00

21,000.00

23,000.00

25,000.00

27,000.00

29,000.00

2008 2009 2010 9M11

25,677

21,960

24,496

28,500

B

B Ex dividends: 08/11/2011

Page 38: Apresentação institucional 3_q11_en_v5

Social Responsibility

Page 39: Apresentação institucional 3_q11_en_v5

Commitment with sustainability

Cross-cutting

themes

– Education for sustainability– Stakeholders active participation– Communication, knowledge and information

SUSTAINABLE  ENERGY 

GENERATION

EFFICIENCY IN THE USE OF 

RESOURCESSAFETY

DEVELOPMENT & VALUATION 

OF COWORKERS, SUPPLIERS 

AND  COMMUNITIES

INNOVATION IN PRODUCTS AND SERVICES

... means allocating them in such a manner that balanced and 

perennial results are ensured for all 

stakeholders, abiding by the values practiced by 

the company

... means using economic, social and 

environmental resources in a balanced fashion, preserving the 

present time and ensuring the future

...means knowing, involving in a 

transparent form and positively influencing 

our coworkers, suppliers and 

communities to build a collective agenda that generates value for 

everyone

... means providing  an environment and culture that inspire 

solutions that improve people’s lives, ensuring  quality and excellence in the services rendered 

to the customer.

... means an attitude of protection  of our 

employees, suppliers and  population.

SUSTAINABLE  ENERGY 

GENERATION

EFFICIENCY IN THE USE OF 

RESOURCESSAFETY

DEVELOPMENT & VALUATION 

OF COWORKERS, SUPPLIERS 

AND  COMMUNITIES

INNOVATION IN PRODUCTS AND SERVICES

... means allocating them in such a manner that balanced and 

perennial results are ensured for all 

stakeholders, abiding by the values practiced by 

the company

... means using economic, social and 

environmental resources in a balanced fashion, preserving the 

present time and ensuring the future

...means knowing, involving in a 

transparent form and positively influencing 

our coworkers, suppliers and 

communities to build a collective agenda that generates value for 

everyone

... means providing  an environment and culture that inspire 

solutions that improve people’s lives, ensuring  quality and excellence in the services rendered 

to the customer.

... means an attitude of protection  of our 

employees, suppliers and  population.

39

Page 40: Apresentação institucional 3_q11_en_v5

“AES Eletropaulo nas Escolas” ProjectEducation 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.

“Casa de Cultura e Cidadania” ProjectIt 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.

Social Responsibility: Main Projects

“Centros Educacionais Luz e Lápis” ProjectTwo units in São Paulo attending 320 children from 1 to 5 years old, in social vulnerability.

Children education and development

Development and transformation of communities

Education about Safety and Efficiency in energy consumption

Education, culture 

and sport

40

Page 41: Apresentação institucional 3_q11_en_v5

Women inclusion and income generation

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.

Inclusive 

and

Social Business

Social Responsibility: Main Projects

“Fornecedor Cidadão” ProjectEmpowerment of female electricians to work on energy cutting and reconnection. Project started in 2010 with 41 women.

41

Page 42: Apresentação institucional 3_q11_en_v5

“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

Converting Consumers to ClientsA 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 lamps22 thousand refrigerators and7 thousand showers

for more efficient equipments

Social Responsibility: Main Projects

42

Page 43: Apresentação institucional 3_q11_en_v5

Attachments

Page 44: Apresentação institucional 3_q11_en_v5

44

Costs and Expenses

Costs and operational expenses1 (R$ million)

1 –

Do not include depreciation and amortization 2 -

Personnel, Material, Third Party Services and Other Costs and Expenses

2

Energy Purchase, Transmission  and Connection Charges, and Water Resources 

Other Costs and Expenses

2008 2009 2010 9M10 9M11

239 214 246174 181

112 201187

125 115

351

415 433

299 296

Page 45: Apresentação institucional 3_q11_en_v5

2008 2009 2010 9M10 9M11

485700 647

461 475

329

352 443

308 368

379

254 165

202 67

1,193 1,306

1,255

970 909

Personnel and Payroll Material and Third Party Others

45

Costs and Expenses

Costs and operational expenses1 (R$ million)

1 –

Do not include depreciation and amortization 2 -

Personnel, Material, Third Party Services and Other Costs and Expenses3 –

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

PMS and Other Expenses (R$ million)

32008 2009 2010 9M10 9M11

4,700 5,125 5,4904,036 4,220

1,1931,306

1,255

970 909

5,8936,431

6,745

5,006 5,129

Energy Supply and Transmission Charges PMS² and Others Expenses

Page 46: Apresentação institucional 3_q11_en_v5

Action Plan: R$ 242 million with increase of R$ 122 million in emergency teams

46

Concluded in September 2011

Concluded in November 2011

availability of 353 emergency teams

38% increase in call center positions

(150 positions)

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 and training conclusion of other 304

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 March

increase of 120 emergency teams, totaling 473 teams

Page 47: Apresentação institucional 3_q11_en_v5

47

AES Tiete's expansion obligation

Efforts being made 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

•SHPP São José –

under construction, with 4 MW

of installed capacity, expected to be

operational in 2012

• Thermo-SP - Project of a 550MW gas fired

thermal plant

1999 Jul/09Out/08Ago/08 Set/11Set/10

Privatization Notice established the

obligation to expand the installed capacity in 15%

(400 MW) until 2007, either in greenfield

projects and/or through long term purchase

agreements with new plants

Aneel informed that the issue is not related to the

concession agreement and

must be addressed with the State of São

Paulo

Judicial Notice:

The Company was notified by the State of São Paulo

Attorney's Office to present its understanding on the matter, having filed its response on time, the proceedings were

ended, since no other action was taken by the Attorney's

Office

In response to a Popular Action (filed by

individuals against the Federal Government, Aneel, AES Tietê and Duke), the Company 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)

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.

Nov/11

Lawsuit:

The Company appealed to the

State of Sao Paulo State Court

of Appeals and the injunction was

stayed

2007

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), which forbids bilateral agreements between generators and

distributors

Page 48: Apresentação institucional 3_q11_en_v5

48

Next Steps:

1 -

The auditing

procedure (AP) is expected to

begin by the 1st

half of 2012

2 –

AP is expected to be concluded in at least 6 months

3 -

After AP’s conclusion, a 1st level court

decision will be released

4 -

Appealing to the 2nd

instance court

5 -

Foreclosure starts.

Presentation of guaranty

6 -

Request to withdraw the

guaranty

7 -

Appeals to the 3rd

instance courts

Eletrobras Lawsuit

Nov/86

Stated-owned Eletropaulo

borrowed money from Eletrobras

Dec/88

State-owned Eletropaulo and

Eletrobras disagreed on how

to calculate interest over that loan and a lawsuit

was started

Sep/03

The 2nd

level of court excluded AES Eletropaulo

from the discussion based

on the spin-off agreement

Jun/06

The SCJ decided to send the

Execution Suit back to the 1st

level of court

May/09

Eletrobras requested the 1st

level of court judge to appoint

an expert

Jan/98 Oct/05

Eletrobras and CTEEP appealed

to the Superior Court of Justice

(SCJ)

Dec/10Sep/01

Eletrobras, after winning the

interest calculation

discussion, filed an Execution Suit to collect the due

amount

State-owned Eletropaulo was spun-off into four companies and, according to our understanding based on the

spin-off agreement, the discussion was transferred to

CTEEP

Privatization event . State-

owned Eletropaulo

became AES Eletropaulo

Apr/98

Eletrobras requested the

beginning of the appraisal

procedure, which is under 1st. instance

court analysis

Jul/11

On July 7, the judge determined Eletropaulo and

CTEEP to present their

considerations, which occurred in

August

Page 49: Apresentação institucional 3_q11_en_v5

49

Any party with an intention to dispose its shares should first provide the other party the right to buythat participation at the same price offered by a third party

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

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 shares–

AES Tietê: Tag along of 80% in its common shares–

AES Elpa: Tag along of 80% in its common shares

Shareholders AgreementOn 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 refusal

Drag alongrights

Tag alongrights

Page 50: Apresentação institucional 3_q11_en_v5

50

Brazilian Main Taxes

AES Eletropaulo

Income Tax / Social Contribution:

– 34% over taxable income

ICMS: 22% over Revenue (average rate)

– Residential: 25%

– Industrial and Commercial: 18%

– Public Entities: free

PIS/Cofins:

– 9.25% over Revenue minus Costs

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

minus Costs

Page 51: Apresentação institucional 3_q11_en_v5

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]

[email protected]

+ 55 11 2195 7048


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