1Q10 Results1Q10 Results

May, 2010

• Ebitda totalized R$370 millions, 3.9% higher than 1Q09

• Cash generation of R$ 572 millions, 113% higher than 1Q09

Operational • Captive and total market consumption 5.2% and 6.7% higher than 1Q09 respectively

• Losses: commercial losses 30 b.p. lower than 1Q09

• Collection rates of 102.5% x 99.8% on 1Q09

1Q10 main highlights

2

Financial

Regulatory

• Cash generation of R$ 572 millions, 113% higher than 1Q09

• Net income of R$157 millions on 1Q10, 6.8% higher than 1Q09

• Eletropaulo's ratings raised to AA + and BB +, national and international scales

respectively, by Standard & Poor's

• On February, 2010, Aneel approved a proposal for the amendment of Concessionaire

Distribution Contract, aiming the neutrality of Parcel A sector charges with financial

effect of R$ 1.9 million

Consumption Evolution - (GWh)1

9,691 10,344

1Q101Q09

+4.4 % +5.5 % +0.7 % +5.2% +6.7%

Consumption

+9.2 % +14.4%

• Market growth due to 153 thousand new clients in residential sector, considerable

new commercial ventures and the positive effects of economic recovery on

industrial and commercial market consumption

3

Free Clients

1,573 1,801

Captive Market

8,118 8,544

Residential Industrial Commercial Public Sector and Others

Total Market

6412,657

1,327

3,494

9,691

645

3,646

1,4492,804

10,344

1 – Own consumption not considered

Collection rate – % over gross revenue Losses – % last 12 months

Operational indicators

98.5

102.599.8101.1

99.5 11.611.5 11.811.5

11.8

• Collection rate and losses reflect the continuous improvement on regularization of

fraud, illegal connections and bad debtors

4

5,3

6

98.5

2009120081 1Q09 1Q10

99.5

2007 20082007 1Q10

5.1

6.5

11.6

5.0

6.5

11.5

Commercial Losses Technical Losses2

2009

5.3

6,5

11.8

6.5

5.0

6.5

11.5

1Q09

6,56.5

5.3

11.8

1 – Collection rate following the new methodology of calculation 2 - Current Technical Losses used retroactively as reference

Operational Indicators

• SAIDI and SAIFI affected by rainfall volume 42% higher than 1st quarter 2009

SAIFI2SAIDI1

11.34 10.92 10.09 7.878.49

8.41

51 – System Average interruption Duration Index 2 – System Average Interruption Frequency Index Source: ANEEL, AES Eletropaulo and ABRADEE

ABRADEE ranking position among the 28 utilities with more than 500 thousand customers

► 2010 SAIDI ANEEL Target: 9.32 horas ► 2010 SAIFI ANEEL Target: 7.39 times

9.208.90

2007 2008

SAIDI (hours) SAIDI Aneel Target

13.50

1Q102009

3o

1Q09

5o

11.86 10.20

2007 2009 1T09

SAIFI (times) SAIFI Aneel Target

1o

1Q10

1o

5.64 5.20 5.46

2008

6.17 6.74

Investments

CAPEX – R$ million Investments 1Q10

Paid by customers

Capex 691

• Investment of R$ 46 million in customer service and system expansion, highlighting

the 45.6 thousand new customers added in the quarter

10%2%

2%

62007 2008

364410

69

433457

47

92

101

9

1Q09

88

98

10

1Q102009

516

478

37

2010(e)

637

54

691

Customer service / System expansion

Paid by the clients

Losses recovery

Maintenance

IT

Other

15%

24%

47%

Gross revenue and operating expenses

Gross Revenue - R$ million

3,274

+12.9 %

• Higher captive consumption (+ 5.2%) and Tariff Readjustment (+14.88%)

contributed to gross revenue growth

Operating Costs and Expenses1 - R$ million

1,747

+17.7 %

7

Deductions to Gross revenueNet Revenue

1Q09 1Q10

1,050

1,850

2,900

1,143

2,131

3,274

+15.2 %

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

+17.5 %

Operating expenses evolution

Operating Expenses – R$ million

• Higher contingency volume and negative effect on ADA and write-offs due to unusual

level registered on 1Q09

17

22

(4)910

81 - Allowance for doubtful accounts

Materials, services and other

1Q101Q09 PersonnelProvisions and Contingencies

ADA1 and write-offs

FCesp

341

22

288

9

341

Variation of Ebitda

Ebitda – R$ milllion

• Ebitda affected by higher captive consumption (+ 5.2%) and lower FCESP expenses

(209)281(10)

(22) (17) (14)4

9

1 - Materials, Services and outros

1Q10Energy Supply and Transm. Charges

Net revenue

Personnel and taxes

Provisions and

Conting

ADA andwrite-offs

Others1FCesp

370

1Q09

356

Financial result and net income

Financial Result - R$ million

1Q09 1Q10

Net Income - R$ million

6.2%

• Net Income positively impacted by Tariff Readjustment and captive market growth

of 5.2%

10

1Q09 1Q10

(38)(34)

-9.6 %1Q09 1Q10

147157

Managerial Cash Flow – R$ million

Cash flow generation

• Operating cash flow generation 113.4% higher as a consequence of market growth

and tariff readjustment

Inicial Cash

Operating Cash Flow

1Q09

1,536

268

2Q09

1,258

426

3Q09

989

779

4Q09

1,143

765

1Q10

1,249

572

11

Operating Cash Flow

Investiments

Net Financial Expenses

Net Amortizations

CESP Foundation

Income Tax

Dividends

Free Cash Flow

Final Cash

268

(104)

(80)

(184)

(58)

(119)

(278)

1,258

-

426

(113)

(23)

(54)

(56)

(83)

(97)

989

(366)

779

(116)

(79)

(35)

(53)

(45)

452

1,143

(297)

765

(148)

(16)

(47)

(57)

(61)

436

1,249

(330)

572

(135)

(81)

(14)

(48)

(73)

221

1,470

-

Debentures Issuance

• R$ 800 million debentures issued to meet bond amortization and part of 2010

investments

- 12th Issuance: R$ 400 million; 4 years; CDI + 1.25% pa; non convertible; CVM 400

- 13th Issuance: R$ 400 million; 10 years; CDI + 1.5% pa; non convertible; CVM 476

Amortization Schedule – Principal1 – R$ million1,919

121 – Including 12th and 13th debentures issuance and bond payment of R$ 474 millions in 2010

Local Currency (ex FCesp) FCESP2

2010 2011 2012 2013 2014 2015 2018-202820172016

524250 276 298 528

223

5665

580

316 341 368

602

302 313

333

417

66 7074

7984 89

224

1,365

554

2 - FCesp = Pension Fund

Debt profile

Net Debt Average Cost and Average Term (Principal)

• Debenture issuance positively contributed to the company average cost and average

term

1.8x1.5x

1.8x1.6x

1.7x

3.2

6.87.1 7.0

6.9

121.8%123.9%

120.5%

7.17.4

13

2007

3.0

2008

2.52.9

1Q10

2.7

1Q092009

3.2

2007

121.8%

2008 1Q10

120.5%

IQ09

110.5%

2009

87.1%

1 – Last 12 months of EBITDA Adjusted 2 - Brazil’s Interbank Interest Rate

PostDebentures

108.7%

Net Debt (R$ billion)

Net Debt / EBITDA Adjusted1 with FCesp CDI2 Average Term - Years Effective Rate

26,06625,677

21,960

Average Daily Volume3 - R$ thousandAES Eletropaulo1 X Ibovespa X IEE

24,538

Capital Market

80

100

120

140

160

180

9.7%

44.7%

72.0%

Last 12 months¹

14

2007 2008 2009

1 – Index: 03/31/09 = 100 2 – index: 12/30/09 = 100 3 – Preferred shares class B

1Q10

IBOV

IEE

ELPL6

60

80

Mar-09 Jun-09 Sep-09 Dec-09 Mar-10

90

100

110

Dec-09 Jan-10 Feb-10 Mar-10

9.2%

-0.4%

2.6%

120 1Q10²

1Q10 resultsThe 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.

.

1Q10 results