November 10, 2006November 10, 2006

3rd quarter 2006 Results3rd quarter 2006 Results

Highlights

Market

Tariff Adjustment and Operating Performance

Financial Performance

Debt Profile

Cash Flow

Conclusion

Highlights

Operating Performance

Bilateral Contract

Financial Performance

Capex

Expansion Requirement

Conclusion

Brasiliana Reorganization

3

BrasilianaBrasiliana ReorganizationReorganization

• Reorganization Rationale• Allow dividends’ distribution to controlling shareholders

• Debt Reduction – early liquidation of Brasiliana’s debentures

• Elimination of dollar denominated debt

• Simplification of Corporate Structure

• Elimination of fiscal inefficiencies

• Secondary Offering – AES Transgás

• 15.83 billion class B preferred shares (38% of Eletropaulo’s total capital)

• Pricing: R$ 85.0 / ‘000 shares, implying a total offering size of R$ 1,345 million

• Free Float increased from 18.3% (R$ 729 million) to 56.2% (R$ 2,233 million)

• Eletropaulo’s PNB shares (ELPL6) increased 11.8% since the pricing (09/21/06) until 11/06/06

• The daily average traded volume increased from R$ 6.0 million in the last twelve months prior to

the pricing (09/21/06) to R$ 19.0 after the pricing (until 11/06/06)

4

BrasilianaBrasiliana ReorganizationReorganization

BNDESAES Holdings

Brasil Ltda

Cia. Brasiliana

De Energia

AES InfoenergyAES Uruguaiana

Inc (Cayman)AES ELPA

EletropauloAES Uruguaiana

Empreend. S.A.

AES Tietê S.A.

C 49.99%

P 100.00%

T 53.84%

C 50.001%

P 0.00%

T 46.15%

C 100.00%

T 100.00%

C 98.26%

T 98.26%

C 100.00%

T 100.00%

C 100.00%

T 100.00%

C 71.27%

P 32.23%

T 52.51%

C 77.81%

P 0.00%

T 30.97%

P 7.38%

T 4.44%

C = Common SharesP = Preferred SharesT = Total

• Reduction of Brasiliana’s and holdco’s indebtedness from R$ 2,044.0 million (principal as of 09.30.2006) to R$ 800.0 million

6

HighlightsHighlights

SubsequentEvents

• Ratings increased by Fitch in national scale from “BBB+” to “A”

and in international scale from “B+” to “BB-” (10/05/2006)

• Ratings increased by S&P in national scale from “BBB+” to “A-”

and in international scale from “B+” to “BB-” (11/06/2006)

3Q06

• Adjusted EBITDA of R$ 1,912.4 million in the first 9 months of

2006, 26.0% higher than the first 9 months of 2005

• Net Profit of R$ 274.4 million in the first 9 months of the year,

compared to a loss of R$ 204.1 million in the equivalent period of

2005

• Tariff Adjustment – 11.45% (07/04/2006)

• Increase in the average life of FCESP Debt - cash savings of

approx. R$ 633 million until the end of 2008 (08/31/2006)

7

1,3121,632

592

1,658

613

2,320

1,915

3,0333,195

2,372

Residential Industrial Commercial Public Sectorand Others

FreeConsumers

3Q05 3Q06

7,882 7,790

9,4489,194

Billed Market Total Market

5.3%

-3.5%

-14.8% 26.3%

-1.2%

2.8%

2.2%

Consumption Comparison in Consumption Comparison in GWhGWhCaptive Market Evolution (GWh)

Increase of 4.6% (12 months)

NOTE: Charts do not consider own consumption

7,5197,6067,4337,2807,2567,119 7,033

7,443

4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06

• All free consumers were excluded from previous periods.

8

Free ConsumersFree Consumers

1,6581,654

1,182

641479

750 806964

1,3121,407 1,500

1930

3848 54

78 8495 99 106 111

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06

Free Consumers (GWh) TUSD (R$ million)

Net Revenues with TUSD X Free Consumers’ Consumption

% Total Market (3Q06)

1.9%

18.1%80.0% Captive Consumers

Free Consumers

Potentially Free Consumers

9

3.7%6.3% 4.5% 2.5% 3.6% 4.8%

7.5%7.6% 12.1%

11.8% 7.3%1.6% 9.9%

1.6%1.7%

16.9%

-4.3%

1999 2000 2001 2002 2003 2004 2005 2006

Part B Part A PIS/COFINS IGPM

Tariff EvolutionTariff Evolution

2.1%

18.6%

11.6%14.3%

17.6%

11.1%13.8%

11.5%

RESIDENTIAL 308.0 304.0 - 1.3%INDUSTRIAL 235.7 260.1 + 10.3%COMMERCIAL 283.7 292.3 + 3.0%OTHERS 228.5 236.3 + 3.4%TOTAL 277.1 286.1 + 3.2%

3Q06 Variation %3Q05Average Tariff R$/MWh

10

Operating HighlightsOperating Highlights

Collection Rate -% over Gross RevenueLoss Evolution (%)

7.9 7.3 7.4 6.6

13.5 12.9 13.0 12.2

5.65.65.65.6

2004 2005 9M05 9M06

Technical Losses Commercial Losses

99.298.299.097.5

2004 2005 9M05 9M06

-5.9% +1.0%

Fraud Combat and Clandestine Connections (9M06):

367 thousand inspections and 45 thousand frauds detected

56 thousand clandestine connections regularized

Collection Rate

Public Sector: 106.0%

Private Sector: 98.7%

Cuts and Reconnections – monthly average (9M05 x 9M06)

Cuts - increase from 77 thousand to 117 thousand

Reconnections – increase from 55 thousand to 75 thousand

11

CAPEX 9M06CAPEX 9M06R$ millionR$ million

76 73

32

49

15

404

186

297355

70

346

11 16

33

81 92

217

330

88

2003

2004

2005

1Q06

2Q06

3Q06

2006

(e)

Capex Self Financed

Investments 9M06 (R$ 260.7 million)

16%

6%

12%

12% 15%

39%

Customer Service and SystemExpansion

Maintenance

Loss Recovery

Information Technology

Others

Self Financed

12

ResultsResultsR$ millionR$ million

764.7745.7 737.1

2,930.5

2,184.72,007.12,184.71,977.1

745.72,744.22,741.8

2,930.5

3Q05 3Q06 2Q06 3Q06

Net Revenue Deductions from Operating Revenue

1,143.4

744.8 509.0 348.0 509.0

228.4157.6

188.9228.4

1,145.3

1,055.91,143.4

1,880.82,079.0

1,561.51,880.8

3Q05 3Q06 2Q06 3Q06Operating Expenses Sector Charges Electricity + Transport

Gross Revenue Operating Expenses

• Increases in relation to 2Q06 and 3Q05 are explained by:

• The application of the average tariff adjustment since July 4th, 2006

• Tariff mix and total market increase of 2.8% in relation

to 3Q05

• Increase of 20.4% over 2Q06:

• Increase in provisions for labor and civil contingencies – R$ 120.9 million

• Higher expenses with energy purchase and sector charges (CCC and CDE) due to its readjustments – R$ 291.5 million

• Reduction of 9.5% over 3Q05: • Provision of credits with the Municipal Government of São

Paulo - R$ 346.4 million in 3Q05 – (non-recurring event)

+6.9% +6.8% -9.5%+20.4%

13

9M05 x 9M06

Increase of 26.0%

ADJUSTED EBITDA

EBITDAEBITDAR$ millionR$ million

EBITDA

Pension Fund

3Q05 x 3Q06

RTE

(27.5)

60.4

448.6

85.3

SP Municipal Government

0

Provision - RTE 0

Provision - Contingencies 0

ADJUSTED EBITDA MARGIN 22.7%

383.2

60.5

658.9

80.0

0

14.3

120.9

30.2%

826.8

181.6

1,518.1

251.3

(72.0)

0

0

24.4%

1,330.2

181.6

1,912.4

243.5

0

36.1

120.9

31.0%

Increase of 46.9%

330.5 0 330.5 0

PIS/Pasep taxes’ reversion

14

Consolidated Financial ResultConsolidated Financial ResultR$ millionR$ million

(53.0)

(126.1)

(53.0)

(136.2)

3Q05 3Q06 2Q06 3Q06

The financial result’s improvement is due to:

• The reduction of the total debt’s average cost

• The increase of 21.8% of financial revenues in relation to

2Q06:

• Revenues from cash management in 3Q06 (R$ 12.1

million)

• Receiving of Eletropaulo Telecom’s dividends in 3Q06

(R$ 5.0 million)

• The gains in translation of financial statements of Overseas

II of R$ 5.7 million due to the Real depreciation of 0.5% in

3Q06.

Financial Result

-58.0%-61.1%

(193.4)

(160.4)(153.7)

(130.2)(120.4)

3Q05 4Q05 1Q06 2Q06 3Q06

Net Debt - Total Cost

15

Net ProfitNet ProfitR$ millionR$ million

• Reversal of Accumulated Losses from R$ 257.2 million in 12.31.2005 to Accumulated Earnings of R$ 29.6 million in 09.30.2006

274.4

(204.1)

47.3

201.9

47.3

(324.1)

3Q05 3Q06 2Q06 3Q06 9M05 9M06

-76,6%

16

Consolidated DebtConsolidated DebtR$ millionR$ million

Short Term X Long Term

• Gross Debt: reduction of 9.1% (R$ 479.6 million)

• Net Debt: reduction of 18.1% (R$ 893.7 million)

• Foreign Currency: decreased from 9.7% to 2.1% of total debt

Indebtedness Highlights – last 12 months

Libor2.1%

Fixed Rate11.1%

IGP-DI47.7%

CDI/Selic39.1%

Creditors X Indexes – 3Q06

Gross Debt – R$ 4,800 million

• Pension Fund - R$ 2,288 million

• Private Creditors - R$ 2,033 million

• BNDES - R$ 478 million

5,2804,800 4,8004,877

74% 79% 79%77%

26%21% 21%23% 4,0314,2564,031

4,924

3Q05 3Q06 2Q06 3Q06

R$

mill

ion

LT ST Net Debt

-18.1%

-5.3%

17Cash savings of approximately R$ 633 million until the end of 2008

Amortization ScheduleAmortization SchedulePrincipal Principal -- R$ millionR$ million

Increase in average life of the Pension Fund Debt

Total Debt

23458

213 267 263

729

138 138 111

282144

163 181

181

181 181 181

1,505

356159

112

3685

2626

26

26

21

Pre-payments

9M06

Payments

9M064Q06 2007 2008 2009 2010 2011 2012 2013 2014-22

R$ (w/out FCESP) FCESP BNDES US$

282

106

422 422

200 200 200 200 200

800

282

36144 163 181 181 181 181 181

1,505

Payments

9M06

4Q06 2007 2008 2009 2010 2011 2012 2013 2014-22

FCESP (Pre-renegotiation) FCESP (Post-renegotiation)

18

CDI +6.84%

CDI +2.90% CDI +

2.50% CDI +1.82%

Bonds 8th Debenture 9th Debenture CCB

Consolidated DebtConsolidated DebtR$ millionR$ million

Ratings – Fitch

--17.4%%

--1.6%--1.4%%

Average Cost and Average Life

Interest rates evolution

• Last increase in 10/05/06, reflects:

• Improvement of Indebtedness Profile

• Strong cash generation

• De-leveraging of Parent Company

100.4%100.8%99.7%

101.9%

5.44

3.433.81 3.90

3Q05 1Q06 2Q06 3Q06Avg Cost - %CDI Avg Life - years

National Scale

International Scale

BB

BBB

BBB+

B -

B +

B +

Oct ‘04

Dec ‘05

Jul ‘06

AOct ‘06

BB -

National Scale

International Scale

BB

BBB

BBB+

B -

B +

B +

Oct ‘04

Dec ‘05

Jul ‘06

AOct ‘06

BB -

19

Cash FlowCash FlowR$ millionR$ million

R$ million 1Q06 2Q06 3Q06 9M06

Initial Cash 492 356 617 492

Operating Cash Generation 687 653 725 2.065

Investments (101) (88) (75) (264)

Net Financial Expenses (196) (85) (177) (458)

Net Amortization (245) (45) (158) (448)

Pension Fund Expenses (134) (108) (85) (327)

Income Tax (147) (67) (83) (297)

Free Cash Flow (136) 261 147 272

Final Cash 356 617 764 764

Operating Cash Generation (3Q06)

• Average Tariff Adjustment of 11.45%

• Market increase and tariff mix

Pension Fund Expenses (3Q06)

• Renegotiation of debt contracts

20

ConclusionConclusion

• Reversal of accumulated losses of R$ 257.2 million in Dec/05 to

accumulated earnings of R$ 29.6 million in Sep/06

• 26% increase of Adjusted EBITDA, R$ 1,518.1 million (9M05), compared to

R$ 1,912.4 million (9M06)

• Reduction of 18.1% in consolidated net debt

• Reduction of 2.1% in the average cost of consolidated debt

• Increase of total debt’s average life from 3.4 years to 5.4 years

• Ratings increased by Fitch Ratings and S&P

• Free float increased from 18.3% to 56.2% of the total capital

21

22

HighlightsHighlights –– 9M069M06

1H06

Jan,06: 100% of assured energy is sold through the bilateral contract with Eletropaulo

EBITDA = R$ 543 million

Net Income = R$ 306 million

Dividends: payout of 100% of net income

Subsequent EventsDividend and interest on capital of R$ 143 million to be paid on Nov 30th

3Q06

Jul,06: Readjustment of price of bilateral contract with Eletropaulo in 0.9%

EBITDA: R$ 276 million in the 3Q06 and R$ 819 million in the 9M06

Net Income: R$ 143 million in the 3Q06 and R$ 449 million in the 9M06

23

Energy Balance Energy Balance –– 9M069M06

Energy Generated x Billed Energy in GWh

*After deducing own consumption and transmission losses, the difference is addressed to the Energy Reallocation Mechanism – MREand to the Chamber of Energy Marketing – CCEE..

Caconde284.0

Euclides365.1

Limoeiro104.8

Ibitinga501.7

Bariri427.2

Barra Bonita402.3

Água Vermelha5,912.0

Promissão768.4

Nova Avanhandava1,029.0

Mogi Guaçu23.5

MRE/CCEE*1,506.3

Eletropaulo - Bilateral8,311.5

TOTAL

9,817.8

BILLED

9,817.8

84.7%60.2%

1.1%

2.9%

3.7%

4.1%

4.4%

5.1%

7.8%

10.5%

0.2%

15.3%

24

Generation and ReliabilityGeneration and Reliability

9M06: generation was 18% over the assured energyFailure Index (FI) and Equivalent Availability Factor (EAF) figures exceed the requirements established by the National Eclectic Energy Agency - ANEEL: 2.9% for (FI) and 92.8% for EAFAverage of 7 years of operations without accidents requiring removal of personnel from the worksite

0.7Bariri3.1Euclides da Cunha3.4Caconde4.5Promissão6.0Barra Bonita6.1Limoeiro8.1Água Vermelha8.7Nova Avanhandava11.6Mogi-Guaçu18.2Ibitinga

Period Without Accidents –Years

Plant

1,617 1,619 1,581 1,5021,040

1,258 1,392 1,363 1,467 1,498

118%115%123% 120% 123% 117%

81%98%

109% 107%

1997 1998 1999 2000 2001 2002 2003 2004 2005 9M06

Generation - MW Average Generation / Assured Energy

2.8%

2.2% 2.3% 2.5%

1.6% 1.7%

3.0%

94.9%

97.2% 96.8% 94.2% 96.1%90.9% 92.6%

2000 2001 2002 2003 2004 2005 9M06*

Failure Index Equivalent Availability Factor

*Annualized

25

Bilateral ContractBilateral Contract

Starting in Jan, 06: 1,268 MW (100% assured energy) is sold through the bilateral contract with Eletropaulo

Price adjusted by IGP-M variation in JulyMaturity: December, 2015 Collateral: receivables

Oct, 03: amendment extending its term of effectiveness until Jun,28In Aug, 05 ANEEL published the vetoing to the amendmentEletropaulo has brought a lawsuit against ANEEL’s decision, which is now awaiting judgment on merits by a trial court

Average Revenue Average Revenue –– R$/ R$/ MWhMWh133.9

45.9 48.854.0

73.6

94.4

119.6

2000 2001 2002 2003 2004 2005 BilateralContract

26

899 1,041

362 343

9M05 9M06 3Q05 3Q06

54

3730

56 7120 22

1716

42

35

11 12

18

522 26

80

62

213

71 82

272

9M05 9M06 3Q05 3Q06

ResultsResultsR$ millionR$ million

Greater volume of energy sold through bilateral contract – from 948 MW to 1,248 MW

3Q05: Non-recurring revenue (R$ 50.5 million)reversion of allowance related to PIS/Cofinsof the bilateralRecognition of regulatory asset on PIS/Cofinsof initial contracts

Jul,06: Price readjustment of bilateral contract (0.9%)

Power purchase:Transmission fees – increase of R$ 20.5 million: greater volume of sales through bilateral contractCCEE’s fine – re version of allowance of R$ 3.9 million booked in 4Q05

9M06: allowance of R$ 30.2 million: RTE’s monetary adjustment (R$ 14.8 million) and allowance on PIS / Cofins on the initial contracts (R$ 15.3 million)

Net RevenueNet Revenue Costs and Operational ExpensesCosts and Operational Expenses

Power Purchase

Others*Operational Expenses

Royalties Provisions

*Others: R&D, fiscalization fees, insurance, hydro way and others

16%16% 28%28%

5%5%16%16%

27

ResultsResultsR$ R$ millionmillion

EBITDAEBITDA

734819

307 276

84.7%78.7%81.6% 80.7%

9M05 9M06 3Q05 3Q06

12%12%

1010%%

Greater volume of energy sold through bilateral contract - from 948 MW to 1,268 MW

Jul,06: price readjustment of bilateral contract (0.9%)

3Q05: non-recurring revenue (R$ 50.5 million)Reversion of allowance related to PIS/Cofins on bilateral agreementRecognition of regulatory asset related to PIS/Cofins on initial contracts

28

ResultsResultsR$ R$ millionmillion

(69) (76)

6

(29)

9M05 9M06 3Q05 3Q06

Increase in financial expenses due to IGP-M variation:

3Q05 = –1.6%3Q06 = 1.0%

9M05 = 0.6% 9M06 = 2.3%

Financial ResultsFinancial Results

10%10%

--583%583%

143201

449411 41.9%

45.7%43.1% 55.5%

9M05 9M06 3Q05 3Q06

Net IncomeNet Income

9%9%

29%29%

9M06: net income 9% greater than 9M05

3Q06: lower net income due to impact of non-recurring revenue in 3Q05

29

DebtDebt

Net Debt Net Debt –– R$ billionR$ billion Financial InvestmentsFinancial Investments

Cash availability = R$ 672.3 million (Sep,06)

0.9

1.3

0.7

1.1 1.11.11.4

0.7

0.7x0.9x1.4x

2.0x3.2x3.3x3.0x

0.7x

2000 2001 2002 2003 2004 2005 9M05 9M06Net Debt Net Debt / EBITDA

Federal T Bonds (Ba3)

86%

Prived Bonds (A3)- 1%

Foreign Bonds - US$ - (Aa1)-

6%

Foreign Bonds - US$ - (Aa3) -

7%

R$ million

Creditor Amount Maturity Terms Collateral

Eletrobras 1,381.4 May/13 IGP-M + 10% p.y. ReceivablesFunCesp III 20.5 nov/27 IGP-DI + 6% p.y. Receivables

30

CAPEXCAPEX

Capex – 9M06: R$ 18.8 millionBariri: revamp and modernization of Generating Unit #2 and #3Reforestation

2006 Revised Capex: R$ 30 milliondelay in revamping of Generating Units #2 and #3 of Bariri plant: R$ 5 millionsavings on the acquisition of a transformer to Nova Avanhandava plant: R$ 1.5 millionpostponement of investment on hydroway: R$ 1.5 millionchange on project of splinklers implementation in Ibitinga, Euclides da Cunha and Caconde plants: R$ 1 millionpostponement of investments on reforestation: R$ 2 millionpostponement of investment in IT: R$ 1.1 million

CapexCapex –– 9M069M06CapexCapex –– R$ millionR$ million

18.8

30.027.5

21.9

12.4

30.537.5

17.7

2000 2001 2002 2003 2004 2005 9M06 2006Revised

69.0%

20.7%0.4%

9.8%

Equipment Enviroment Hydroway Others

31

ExpansionExpansion RequirementRequirement

Requirement: increase installed capacity by at least 15% (approximately 400 MW), within a period of eight years, starting from the date of execution of its Concession Contract in December, 1999

Requirement was established by the Privatization Documents and reflected in the “Share Purchase Agreement”

It can be accomplish through:increasing the installed capacity in the State of São Paulo; or energy purchasing from new plants, located in São Paulo, through long term agreements (at least 5 years)

Restriction to increase the capacity:no hydro resource available in the Sate of São Pauloenvironmental restrictions to thermal plants in São Paulogas supply“New Model Law for the Electric Sector” (Law # 10,848/04)

Proposal from AES Tietê to the State Government:Suspension of the obligation to increase the capacity for 5 years. During this period AES Tietê can analyze freely any project for investment, regardless the locationAfter the suspension period, in the case that restriction continue, a AES Tietê will be released of this obligationNo amount of resources and/or obligation will be paid in compensation

The State Government has not yet responded to this proposal.

32

Subsequent EventSubsequent Event

On October 23, AES Tietê entered into an agreement to purchase licenses for the exploitation of hydro potential

This agreement is still subject to the satisfaction of certain precedent conditions and to Aneel’sapproval

After the obtaining the necessary regulatory and corporate approvals, AES Tietê will be entitled to build 3 PCH (small hydroelectric facilities) in the State of Rio de Janeiro

Installed capacity: 52 MW

Assured energy: 28.97 MW Average

Total estimated Capex: R$ 225 million

Estimated term for construction: 2 years

33

ConclusionConclusion

Generation was 18% higher than assured energy

Operational excellence: FR and EAF above ANEEL requirements

EBITDA of R$ 819 million in 9M06 – increase of 11.5% compared with the same period of 2005

Net Income of R$ 449 million in the 9M06 – net margin of 43.1%

Dividends and interest on capital of R$ 143.5 million to be paid in Nov 30th

Payout of 100% of 9M06 net income

November 10, 2006November 10, 2006

The statements contained in this document with regard to the business prospects, projected operating and financial results, and growth potential of AES Eletropaulo are merely forecasts based on the expectations of Company 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 electricity sector and international market, and they are therefore subject to change.

The statements contained in this document with regard to the business prospects, projected operating and financial results, and growth potential of AES Eletropaulo are merely forecasts based on the expectations of Company 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 electricity sector and international market, and they are therefore subject to change.