2006 Results2006 Results

March 08, 2007March 08, 2007

Highlights

Brasiliana Reorganization

Debt Profile

Cash Flowg

Market Capital Markets

Operating Performance

Financial Performance

Conclusion

HighlightsHighlights

1Q06• Board of Directors has 20% of independent members (new rules of BOVESPA’s Level 2)

HighlightsHighlights

• Issuance of R$ 300.0 million in CCB – early liquidation of the remaining part of therenegotiated debt (05/12/2006)2Q06

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

• Increase in the maturities of FCESP Debt to 2022 - cash savings of approx. R$ 633 milliontil th d f 2008

3Q06until the end of 2008

• Companhia Brasiliana de Energia´s reorganization

• Secondary Offering of Eletropaulo shares - (09/25/2006)• Total offering size: R$ 1 3 billionTotal offering size: R$ 1.3 billion• 15.8 billion class B preferred shares (38% of Eletropaulo´s total capital), with 100% of tagalong• Free-float increased from 18.3% to 56.2%

• Adjusted EBITDA of R$2,490.8 million in 2006, 16.7% higher than 2005

• Net Profit of R$ 373.4 million in 2006, compared to a loss of R$155.5 million in 2005

• Reduction of 19.8% in Net Debt

4Q06

3

• Ratings increased (BB- in international scale and A in national scale)

• Proposed Dividends of R$ 130.4 million (R$ 2.94/’000 common shares and R$ 3.23/’000preferred shares)

Brasiliana ReorganizationBrasiliana ReorganizationBrasiliana ReorganizationBrasiliana Reorganization

• 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

BNDESAES Holdings

Brasil Ltda

C 49 99% C 50 01%

Cia. BrasilianaR$ 800 million

C 49.99%

P 100.00%

T 53.84%

C 50.01%

P 0.00%

T 46.15%

De EnergiaR$ 800 million

C 98.26%C 100.00% C 100.00%C 71.27%

AES Uruguaiana

Inc (Cayman)AES ELPA

C 98.26%

T 98.26%

C 100.00%

T 100.00%

C 100.00%

T 100.00%P 32.23%

T 52.51%

P 7.38%

T 4.44%( y )

C = Common SharesP = Preferred Shares

C 100.00%

T 100.00%

C 77.81%

P 0.00%

T 30.97%

4

AES Infoenergy EletropauloAES Uruguaiana

Empreend. S.A.AES Tietê S.A.

P Preferred SharesT = Total

Consumption Comparison in GWhConsumption Comparison in GWhConsumption Comparison in GWhConsumption Comparison in GWh

Captive Market Evolution (GWh)

7,792• Excluding all free consumers from previousperiods, the captive market increased 5.1% in2006.

,7,4367,3707,3607,221

6,9047,166

7,528

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

4 6%

11,86312,687

31 634

36,49938,183

31 656

6.9% 0.1%

4.6%

3.2%

4 865

9,593

7,580

,

6,527

9,898

6,606

31,634 31,656-12.9%

34.2%

-5.1% 4,865

2,598 2,465

5.1%

5NOTE: Charts do not consider own consumption

Residential Industrial Commercial Public Sectorand Others

FreeConsumers

2005 2006

Billed Market Total Market

Free ConsumersFree ConsumersFree ConsumersFree Consumers

% Total Market (2006)

80.9%18.5%

Captive Consumers

Free Consumers

0.6%

Free Consumers

Potentially Free Consumers

Net Revenue with TUSD X Free Consumers’ Consumption

467 1

4,865

6,527134.4

467.1367.3

2,675

6

2004 2005 2006Free Consumers (GWh) TUSD (R$ million)

Operating HighlightsOperating HighlightsOperating HighlightsOperating Highlights

Collection Rate - % over Gross RevenueLoss Evolution* (%)

97.5 99.0 99.1+0.1%

7.0 6.4 5.5

13.5 12.912.0

-7.1%

5.5

6.5 6.5 6.5

2004 2005 20062004 2005 2006

Technical Losses Commercial Losses

Fraud Combat and Clandestine Connections (2006):

• 443 thousand inspections and 49 thousand frauds detected

Collection Rate (2006)

• Public Sector: 104.2%443 thousand inspections and 49 thousand frauds detected

• 80 thousand clandestine connections regularized• Private Sector: 98.8%

Cuts and Reconnections – monthly average (2005 x 2006)

7

• Cuts – increase from 92 thousand to 116 thousand

• Reconnections – increase from 55 thousand to 74 thousand

* Due to the improvement in the calculation criterion of Technical Losses, the Company altered its value retroactively from 5.6% to 6.5%, however without changing total losses

Investments 2006Investments 2006R$ illiR$ illiR$ millionR$ million

4958330378

404 Investments 2006 (R$ 377.7 million)

32

3358

217 15%

Customer Service and SystemExpansion

36632

319355

297

186

37%8%

15% Expansion

Maintenance

Loss Recovery

2003 2004 2005 2006 2007 (e)14%11%

14%Information Technology

Others

Capex Self Financed

Self Financed

8

ResultsResultsR$ illiR$ illiR$ millionR$ million

Gross Revenue Operating Expenses

-7.6%

4 392 44,712.5

6,903.97,471.3

2 856 9 2 996 6

11,350.811,153.7

+1.8%

724.9805.7

1 137 9

4,392.4

1 105 11,848.8 1,830.3

+4,4% -1.0%2,856.9

8,296.8 8,354.2

2,996.6

2,839.7 2,964.8

+4.4%

1,705.82,033.9

461.7555.3230.8188.4

1,137.91,105.1

4Q05 4Q06 2005 2006Operating Expenses Sector Charges Electricity + Transport

775.2 781.1

2,064.5 2,183.7

4Q05 4Q06 2005 2006Net Revenue Deductions from Operating Revenue p g p g y p

• Increases in relation to 4Q05 and 2005

are explained by:

• Reduction of 7.6% in 2006:• Reduction of 5.8% in energy purchase due to

the change in mix (end of Initial Contracts)

Net Revenue Deductions from Operating Revenue

• The application of the 11.45% average tariff

adjustment since July 4th, 2006

• Total market evolution:

the change in mix (end of Initial Contracts)

• Reduction of 45.0% in Other Expenses due toextraordinary expenses posted in 2005 and2006:

• R$ 451 3 million 2005

9

• 5.6% higher than 4Q05

• 4.6% higher than 2005

• R$ 451.3 million – 2005• R$ 158.6 million – 2006

EBITDAEBITDAR$ illiR$ illi

2005 x 2006

R$ millionR$ million

4Q05 x 4Q06

EBITDA

RTE

290.8

83.6

433.1

83.4

1,121.9

334.9

1,763.4

326.8

Pension Fund 60.3

SP Municipal Government

60.4 241.8 242.0

0 0 330.5 0

0

Provision - RTE 176.9

0

1.5

(72.0)

176.9

0

37.7

PIS/Pasep taxes´ reversion

ADJUSTED EBITDA 611.6

Provision - Contingencies 0

578.4

0

2,134.0

0

2,490.8

120.9

611.6

ADJUSTED EBITDA MARGIN 29.6%

578.4

26.5%

2,134.0

25.7%

2,490.8

29.8%

10

Increase of 16.7%Reduction of 5.4%

Consolidated Financial ResultConsolidated Financial ResultR$ illiR$ illiR$ millionR$ million

4Q05 4Q06 2005 2006

The financial result of 2006 is explained by:Financial Result

(41.5)(42.8)

4Q05 4Q06 2005 2006 • The reduction of 39.0% in financial revenues• Additional revenues of R$ 193.6 million in 2005 due to

the change in RTE balance compensation rules

• The reduction of 25 2% in financial expenses-2.9%

(342.3)(329.6)

• The reduction of 25.2% in financial expensespartially compensated the reduction in revenuesin the financial result

• reduction of debt net total cost

+3.9%

(342.3)( )

Debt – Total Cost (Net) Average Cost and Average Life5 485 44

(120 4)(130.2)

(153.7)(160.4) 104.28%97.27%101.18%

91.61%88.22%

5.485.44

3.903.69 3.81

(104.2)

(120.4) 3.69

11

4Q05 1Q06 2Q06 3Q06 4Q06

CDI index at the end of the period

4Q05 1Q06 2Q06 3Q06 4Q06

Avg Cost - % CDI* p.a. Avg Life - years

Net ProfitNet ProfitR$ illiR$ illiR$ millionR$ million

• The Company proposes distribution of dividends at the maximum amount allowed by theBrazilian Law, after absorbing the accumulated losses up to 2005:

R$ 2 94/’000 common shares• R$ 2.94/’000 common shares• R$ 3.23/’000 preferred shares

373.4

Proposed Dividends 2006 (R$ million)

99.0

+728.3% Accumulated Losses 2005 (262.1)Reversal of expired dividends 3.8

Proposed Dividends 2006 (R$ million)

12.0

4Q05 4Q06 2005 2006

Net Profit 2006 373.4

Net Balance 115.0 Legal Reserve (5%) (5.8)Realization of Revaluation Reserve 21 1

(155.5)

Q Q Realization of Revaluation Reserve 21.1

Dividends 130.4

12

Consolidated DebtConsolidated DebtR$ illiR$ illiR$ millionR$ million

Short Term x Long Term Gross Debt – 2006

9 3%-19.8%

Fixed Rate11 6%

IGP-DI50.0%

21% 20% 20%27%3,658

4,562

3,6584,031

ion

4,800 4,830 4,8305,075

-9.3%

Libor1.6%

11.6%

CDI/Selic36.8%

79% 80% 80%73%

R$ m

ill

• Pension Fund - R$ 2,415 million• Private Creditors - R$ 2,040 million• BNDES - R$ 375 million

3Q06 4Q06 2005 2006

LT ST Net Debt

• Gross Debt: reduction of 4.8% (R$ 245.2 million)

Debt Highlights – 2006 Ratings Evolution – Fitch Ratings

National Scale

BBB

AOct ‘06

National Scale

BBB

AOct ‘06% ( $ )

• Net Debt: reduction of 19.8% (R$ 904.5 million)

• Foreign Currency: decreased from 6.0% to 1.6% of total BB

BBB

BBB+

B +Dec ‘05

Jul ‘06

Oct ‘06

BB -

BB

BBB

BBB+

B +Dec ‘05

Jul ‘06

Oct ‘06

BB -

13

debt

Last Update: 10/05/2006

International ScaleB -

B +Oct ‘04

International ScaleB -

B +Oct ‘04

Amortization ScheduleAmortization ScheduleP i i l 12/31/2006P i i l 12/31/2006 R$ illiR$ illiPrincipal 12/31/2006 Principal 12/31/2006 -- R$ millionR$ million

1,273

917 881

469

153

1,27325

47

628

881

729

378

147 153112

231

153 153

159

25 25346

440 441

291 291 263

234

23

268 263138 138 111

378

212

153 153 153

Pre- Payments 2007 2008 2009 2010 2011 2012 2013 2014-22payments

20062006

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

14* Exchange Rate in 12/31/2006 - US$ 1.00 = R$ 2.1380

Managerial Cash FlowManagerial Cash FlowR$ illiR$ illiR$ millionR$ million

R$ million 1Q06 2Q06 3Q06 4Q06 2006

Initial Cash 492 358 619 767 492

Operating Cash Generation 687 653 725 741 2,806

Investments (101) (88) (75) (85) (349) ( ) ( ) ( ) ( ) ( )

Net Financial Expenses (194) (85) (176) (91) (545)

Net Amortization (245) (45) (158) (111) (559)

Pension Fund Expenses (134) (108) (85) (55) (382) p ( ) ( ) ( ) ( ) ( )

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

Free Cash Flow (133) 261 148 399 675

Final Cash 358 619 767 1 166 1 166Final Cash 358 619 767 1,166 1,166

• Operating Cash Generation – reduction of operating costs and expenses along the year

• Financial Expense – semi-annual payments of interests in 1st and 3rd quarters (bonds and 8th issuance of debentures)

• Net Amortization – Issuance of R$ 300 million in CCB on May and early liquidation of the renegotiated debt in 2004

• Pension Fund Expenses – renegotiation of debt contracts in 3Q06

• Income Tax – Write-off of R$ 369.4 million (provision MGSP) made possible to take the tax benefit

15

Capital MarketsCapital MarketsCapital Markets Capital Markets

ELPL6 (Preferred Class B)

PricePrice VolumeVolumeELPL6 (Preferred Class B)

• Rose 28.2% since 09/21/2006 (pricing)

ELPL5 (Preferred Class A)• Rose 2.5% in 2006

• The daily average traded volume of preferred shares in 2006 is 4.3 times higher than 2005’s

IBOVESPA• Rose 32.7% in 2006

Daily Average Volume - preferred shares (R$ thousand)

18 024 9

ELPL5 x ELPL6 (R$/'000 shares)

114 0118.0122.0

18,024.9

+331.5%86 090.094.098.0

102.0106.0110.0114.0

4,177.570.074.078.082.086.0

31/20

0531

/2006

28/20

0631

/2006

30/20

0631

/2006

30/20

0631

/2006

31/20

0630

/2006

31/20

0630

/2006

31/20

06

16

2005 200612/31 1/3

12/2

8

3/31

4/30

5/31

6/30

7/31

8/31

9/30

10/31

11/30

12/31

ELPL5 ELPL6

ConclusionConclusionConclusionConclusion

• Reversal of accumulated losses of R$ 262.1 million in 2005 to a net profit of R$ 373.4

illi i 2006million in 2006

• Proposed dividends of R$ 130.4 million (R$ 2.94/’000 – common shares and R$

3.23/’000 – preferred shares)3.23/ 000 preferred shares)

• 16.7% increase of Adjusted EBITDA, going from R$ 2,134.0 million in 2005 to R$

2,490.8 million in 2006

• 7.6% reduction in Operating Expenses – lower volume of extraordinary expenses in 2006

• Reduction of 19.8% in consolidated net debt and of R$ 228.3 million in foreign currency

debt

• Increase of total debt’s average life from 3.7 years to 5.5 years

• Ratings increased by Fitch Ratings and S&P

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

17

Earnings Results 2006

March 08, 2007

18

Hi hli ht CHighlights

Operating Performance

Capex

Expansion Requirement

Bilateral Contract Capital Markets

Financial Performance Conclusion

19

HighlightsHighlights -- 20062006Highlights Highlights -- 20062006

1Q06Jan,06: 100% of assured energy is sold through the bilateral contract with Eletropaulo1Q06 contract with Eletropaulo

2Q06Best Public Utility in 2005 according to Exame Magazine’sMelhores e Maiores Ranking

3Q06Jul,06: Readjustment of price of bilateral contract withEletropaulo in 0 9%

$

3Q06 Eletropaulo in 0.9%Dividend payment of R$ 305.5 millions relative to the earningsobtained in 1H06

Dividend and interest on equity of R$ 143 million payment relative to the earnings obtained in 3Q06EBITDA reached R$ 1,096.9 million, 16.8% higher than 2005Net Income of R$ 614.1, an increase of 10.4% in comparison with

4Q06

20

Net Income of R$ 614.1, an increase of 10.4% in comparison with 2005Proposal of R$ 165.2 million of dividends to be paid, relative to 4Q06 results

Energy BalanceEnergy Balance –– 20062006Energy Balance Energy Balance 20062006

Energy Generated x Billed Energy in GWh

Caconde344.6

Euclides463.8

2.8%

3.7%

Limoeiro132.0

Água Vermelha7,498.1 Eletropaulo - Bilateral

11 107 789.0%

60.1%

1.1%

Bariri565.6

Barra Bonita495.2

,

MRE/CCEE*

11,107.7TOTAL

12,474.6

BILLED

12,474.6

4.0%

4.5%

11 0%Ibitinga655.9

565.6

Promissão964 2

MRE/CCEE*1,366.65.3%

7.7%

11.0%

964.2Nova Avanhandava

1,323.5Mogi Guaçu

31 7

10.6%

0.2%

21

31.7

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

Generation and ReliabilityGeneration and ReliabilityGeneration and ReliabilityGeneration and Reliability

In 2006 generation was 12% over the assured energy

Plant Period Without Accidents –Years

Ibiti 18 5gy

Failure Index (FI) and Equivalent Availability Factor (EAF) figures exceed the requirements established by the National Eclectic Energy

Ibitinga 18.5Mogi-Guaçu 11.9Nova Avanhandava 9.0Água Vermelha 8.4

Agency - ANEEL: 2.9 for (FI) and 92.8% for EAF

Average of 7 years of operations without accidents requiring removal of personnel from the worksite

Limoeiro 6.3Barra Bonita 6.3Promissão 4.8Caconde 3.7

worksite Euclides da Cunha 3.3Bariri 1.0

123% 120% 123%

Failure Index x AvailabilityFailure Index x AvailabilityGenerationGeneration

2.82 5

3.0

93.0%92.6%90.9%

96.1%94.2%

96.8%97.2%112%115%

123% 120% 123% 117%

81%98%

109% 107%

2.2 2.32.5

1.6 1.71,617 1,619 1,581 1,502

1,0401,258 1,392 1,363 1,467 1,424

22

2000 2001 2002 2003 2004 2005 2006

Failure Index - FI Equivalent Availability Factor - EAF

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006Generation - MW Average Generation / Assured Energy

Bilateral ContractBilateral ContractBilateral ContractBilateral Contract

Starting in January/2006: 1,268 MW (100% assured energy) is sold through the bilateral contract with Eletropaulobilateral contract with Eletropaulo

Price adjusted by 0.9% in July, based on IGP-M variationMaturity: December, 2015 Collateral: receivablesCollateral: receivables

October/2003: amendment extending its term of effectiveness until June/2028In August/2005 ANEEL published the vetoing to the amendment, consequently Eletropaulo has brought a lawsuit against ANEEL’s decision, which is now awaiting judgment on merits by

Average Revenue Average Revenue –– R$/ MWhR$/ MWh

as b oug t a a su t aga st s dec s o , c s o a a t g judg e t o e ts bya trial court

133.9

73 6

94.4

119.6

45.9 48.8 54.0

73.6

23

2000 2001 2002 2003 2004 2005ContratoBilateral

Results Results R$ millionR$ million

Net RevenueNet Revenue Costs and Operational ExpensesCosts and Operational Expenses1.387

1 2201,387

1 220357345

1.22014%14%

8%8%

1,22014%14%

8%8%8%8%46

4777 3518 38

68

3%3%

132

346321

8%8%

346321

8%8%8%8%

64 67

79 103

6168

23 3219

585

141011 5 8

85

132

--36%36%

2006 x 2005

Power Purchase Others* Operational Expenses

RoyaltiesProvisions Depreciation

2005 20064T05 4T06 2005 20064Q05 4Q06

64 67

2005 2006

23 3216 16

4Q05 4Q06

Volume of energy sold to Eletropaulo 33.8% higher – from 948 MW to 1,268 MW

2006 x 2005Power Purchase: raise of R$ 26.1 million on transmission fees as a greater volume was sold to Eletropaulo

July/2006: Price readjustment of bilateral contract (0.9%)

Others: the percentage of net revenues to be applied to Research & Development was raised from 0.25% to 1% Allowance of R$ 58.3 million in 2005 for the

24

principal and interest on RTE (Special Price Review) compared to R$ 17.7 million for RTE’s monetary adjustment in 2006

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

Results Results R$ millionR$ million

EBITDAEBITDA

1,097

79.1%77.0%

17%17%

80.2%

939

205 278

63.9%

2005 20064Q05 4Q06

36%36%

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

July/2006: price readjustment of bilateral contract (0.9%)

Lower operating allowances

25

Lower operating allowances

Results Results R$ millionR$ million

Financial ResultsFinancial Results Net IncomeNet Income4Q05 4Q06 45 6%45 6%

774Q05 4Q06 2005 2006

614

45,6% 44,3%

10%10%

47,7%45,2%

614

45.6% 44.3%

10%10%

614

10%10%10%10%

47.7%45.2%

(35)

(64)

614556

165145

14%14%614556 614556

165145

14%14%

165145

14%14%14%14%

2006 x 2005: 2006 x 2005:

(111)72%72% Lucro Líquido Margem Líquida

2005 20064T05 4T06Net Income Net margin

2005 20062005 20064Q05 4Q06

Accrual by Selic Interest rates on balance of RTE receivables of R$ 37.0 million in 2005 (4Q05) according to Annel requirement,

d t R$ 17 7 illi i 2006 (R$ 2 9

10% higher net income

Lower margin due to financial resultscompared to R$ 17.7 million in 2006 (R$ 2.9 million in 4Q06) 4Q06 x 4Q05

14% higher net income favored by reduction on costs and operational expenses

26

Debts impacted by IGP-M variation

DebtDebtDebtDebt

Cash availability = R$ 690.3 million (December/2006)

R$ million

Creditor Amount Maturity Terms Collateral

Eletrobras 1,364.8 May/13 IGP-M + 10% p.y. ReceivablesFunCesp III 20.7 Sep/27 IGP-DI + 6% p.y. Receivables

Net Debt Net Debt –– R$ billionR$ billion

2 0x3.2x3.3x3 0x

1.31.1 1.11.1

1.40.6x

1.4x2.0x3.0x

0.7x

0.70.7

27

2000 2001 2002 2003 2004 2005 2006Net Debt Net Debt / EBITDA

CAPEXCAPEXCAPEXCAPEX

Capex – 2006: R$ 46.5 million

Capex estimated - 2007: R$ 75 5 million:

Capex Capex –– 2006200612.5%Capex estimated - 2007: R$ 75.5 million:

R$ 22.4 million: Construction of three small hydropower plants already belonging to the Company and located in the interior of São Paulo State. Together, they will boast an installed capacity

55 4%

2.0%

29 5%

12.5%

of 8MW. The remaining will be basically used to restore the capacity of and upgrade equipment:

Bariri: Completion of the capacity restoration and

55.4%

0.5%

29.5%

Equip. Hidroway PCH Environment IT

Bariri: Completion of the capacity restoration and upgrading of Generating Unit #3Promissão: Capacity restoration and upgrading of Generating Unit #2

Capex Capex –– R$ millionR$ million

Nova Avanhandava: Capacity restoration and upgrading of Generating Unit #1Reforestation 46.5

75.5

Investment in Small Hydropower PlantsAcquisition of License to build three small hydropower plants in the State of Rio de Janeiro with a total installed capacity of

30.5

12.421.9

27.5

28

in the State of Rio de Janeiro, with a total installed capacity of 52 MW and average 28.97 MW of assured energy, still subject to the fulfillment of certain conditions and to ANEEL’s approval – investment estimated in R$ 225 million in 2 years

2002 2003 2004 2005 2006 2007E

Capital MarketsCapital MarketsCapital MarketsCapital Markets

AES Tietê AES Tietê –– Base 100 (dec/05)Base 100 (dec/05) Average dailyAverage dailytrading volume (R$ thousand)trading volume (R$ thousand)

140

120

130

140

133

122124

69%69%

4.196,9

69%69%69%69%

4,196.9

GETI3

90

100

110

1.624,5 1.619,7

1.810,2

1,624.5 1,619.7

1,810.2 GETI3

GETI4

Ibovespa GETI3 GETI4

90dec-05 mar-06 jun-06 sep-06 dec-06 2005 20062005 2006

Remuneration Paid vs. Dividend YieldRemuneration Paid vs. Dividend Yield

R$ 614.1 million 11.4%12.0%

2006

R$ 276 9 million

R$ 539.0 million 13.2%

13.4%

13.2%

2004

2005

29

R$ 276.9 million12.3%

2004

Common Preferred

Expansion RequirementExpansion RequirementExpansion RequirementExpansion Requirement

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, 1999y g

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

It b li h d th hIt can be accomplished 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 Paulo

lgas supply“New Model Law for the Electric Sector” (Law # 10,848/04)

Proposal from AES Tietê to the State Government of São Paulo:S i f th bli ti t i th it f 5 D i thi i d AES Ti têSuspension 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 obligation

30

No amount of resources and/or obligation will be paid in compensation

The State Government has not yet responded to this proposal.

ConclusionConclusionConclusionConclusion

Generation was 12% higher than assured energy

EBITDA of R$ 1.1 billion in 2006, 16.8% higher than 2005. EBITDA i f 9 % d 0% i h imargin of 79.1% compared to 77.0% in the previous year.

Dividends and interest on equity distribution corresponding to 100% of 2006 Net Income, R$ 614.1 million*

31

* R$ 448.9 million paid in advance and R$ 165.2 to be deliberated during the Shareholders’ Meeting scheduled for April 9, 2007

The statements contained in this document with regard to the business prospects, projectedoperating and financial results, and growth potential of AES Eletropaulo are merely forecasts basedon the expectations of Company Management in relation to its future performance. Such estimatesare highly dependent on market behavior and on the conditions affecting Brazil‘s macroeconomicperformance as well as the electricity sector and international market and they are therefore

The statements contained in this document with regard to the business prospects, projectedoperating and financial results, and growth potential of AES Eletropaulo are merely forecasts basedon the expectations of Company Management in relation to its future performance. Such estimatesare highly dependent on market behavior and on the conditions affecting Brazil‘s macroeconomicperformance as well as the electricity sector and international market and they are thereforeperformance as well as the electricity sector and international market, and they are thereforesubject to change.performance as well as the electricity sector and international market, and they are thereforesubject to change.

March 08, 2007March 08, 2007