Download - Apre 2 t07
1st HALF 2007
3
Corporate StructureCorporate Structure
BNDESBNDES AES Holdings AES Holdings Brasil LtdaBrasil Ltda
Cia. Brasilianade Energia
AES UruguaianaAES UruguaianaInc (Cayman)Inc (Cayman) AES ELPAAES ELPA
AES Infoenergy EletropauloAES UruguaianaEmpreend. S.A. AES Tietê S.A.
C = Common SharesP = Preferred SharesT = Total
C 49.99%P 100.00%T 53.84%
C 50.01%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%
4
Eletropaulo OverviewEletropaulo Overview
Summary Operating and Financial DataSummary Operating and Financial Data
Concession AreaConcession Area
(1) Includes free customers.(2) Adjusted EBITDA = EBITDA plus pension expense plus one-time charges plus RTE amortization.
Present in 24 municipalities that make up Greater São Paulo, including the capital
42,359 Km of overhead and underground Sub-transmission lines
Distribution Installed Capacity –12,867 MVA
Directly employs about 4,336 people
Largest electricity distribution company in Latin America in terms of revenues
5.6 million of customers
Last four-year net revenue compound average growth rate (CAGR) – 6.78%
Total Assets of R$ 12.9 billion
R$ million 2005 2006 1H07
Total Energy (GWh)(1) 36,499 38,183 19,637
Net Revenue 8,321 8,354 3,490
Adjusted EBITDA (2) 2,145 2,491 1,294
Adjusted EBITDA Margin (2) 25.8% 29.8% 37.1%
Net Profit (155) 373 506
5
Adjusted EBITDA of R$ 1,294.3 million, 3.2% higher than 1H06
Net Profit of R$ 505.5 million, 122.7% higher than 1H06
End of contingency with CTEEP regarding CETEMEQ property (02/16/2007) -
Agreement's total amount of R$ 125.3 million
Rating increase by S&P (04/16/2007) – National Scale from A- to A, keeping the
international rating scale in BB-
Dividends Payment (05/03/2007) – Distribution of R$ 130.4 million relative to FY
2006 earnings
Renegotiation of R$ 300 million in CCBs (05/12/2007):
– average cost from CDI + 1.82% to CDI + 1.20%
– maturity extension from 6 to 8 years
Pis and Cofins (06/30/2007) – Change in Tiete's taxation system for energy purchase
to cumulative (3.65%) applied to the amounts of energy contracted by Eletropaulo since
July, 2004 – reimbursement of R$ 192.8 million to Eletropaulo
Asset Revaluation (06/30/2007): Increase of R$ 1,537.2 million in total fixed assets
ANEEL authorized Eletropaulo a tariff review average index of -8.43%, applicable to the
Company’s tariff as from July 4th, 2007
Approved in 08/10/2007 the intermediary dividends distribution relative to 1H07, no valor
de R$ 487.8 million
1H071H07
Subsequent EventsSubsequent Events
HighlightsHighlights
6
LIGHT 5.2%
Aes Eletropaulo9.1%
CEMIG5.7%
COPEL5.4%CPFL
5.3%
COELBA3.0%
ELEKTRO2.8%
Bandeirantes2.3%
RGE1.8%
AES Sul2.0%Piratininga
2.2%CELPE2.3%
Aes Eletropaulo8.4
CEMIG6.3
COPEL5.2 CPFL
4.6
LIGHT3.9
COELBA2.7
ELEKTRO2.6
RGE1.4
AES Sul1.6 Piratininga
2.0 CELPE
2.0 Bandeirantes
2.1
32.7
2.735.4
31.6
4.9
36.5
31.7
6.5
38.2
16.0
3.6
19.6
2004 2005 2006 1H07Captive Market Free Consumers
MarketMarketConsumption Evolution and Market Share (12 largest)Consumption Evolution and Market Share (12 largest)
Consumption Consumption -- TWhTWh R$ BillionR$ Billion
Total Billed Energy in BrazilTotal Billed Energy in Brazil2006 2006 –– 347,371 GWh347,371 GWh
15.379,315.054,7
15.741,116.035,8
2H05 1H06 2H06 1H07
Captive Market Evolution (GWh)Captive Market Evolution (GWh)Excluding all free consumers from previous periodsExcluding all free consumers from previous periods
7
6,222
3,310
4,993
1,218
3,153
15,742
18,895
6,548
3,146
5,101
1,250
3,591
16,045
19,637
Residential Industrial Commercial Public Sector andOthers
Free Clients Captive Market Total Market
1H06 1H07
MarketMarketConsumption Comparison in GWhConsumption Comparison in GWh
+5.2%+5.2%
--4.9%4.9%
+2.6%+2.6%
+13.9%+13.9%
+1.9%+1.9%
+2.2%+2.2%
+3.9%+3.9%
80.2%80.2%
18.7%18.7%
1.1%
Captive Consumers
Free Clients
Potentially Free Clients
% Total Market (2Q07)% Total Market (2Q07)
NOTE: Charts do not consider own consumption
8
1H07 1H07 –– Energy SupplyEnergy Supply
Eletropaulo Energy SupplyEletropaulo Energy Supply
Contracting strategy: – 100% to 103% of total demand
2.4%2.4%0.6%0.6%
96.0%96.0%HydroHydro
GasBiomass
0%
20%
40%
60%
80%
100%
2004 2005 2006 1H07
Proinfa (Alternative Sources)
Auctions
Others Bilateral Contracts
Bilateral Contract with Tietê
Initial Contracts
Itaipu
1.0%1.0% Others
9
6.49
7.04 6.42 5.50 5.67 5.69
6.496.496.496.49
11.9912.9113.53
12.16 12.18
2004 2005 2006 1H06 1H07
Technical Losses Commercial Losses
99.0499.1099.0097.50 99.70
2004 2005 2006 1H06 1H07
Operating HighlightsOperating Highlights
Fraud and Clandestine Connections (1H07)
– 150.0 thousand inspections and 14.0 thousand frauds detected
– 35.0 thousand clandestine connections regularized
Collection Rate (1H07)
– Public Sector: 102.9%
– Private Sector: 99.5%
Cuts and Reconnections – monthly average (2Q06 x 2Q07)
– Cuts - decrease from 106,000 to 118,000
– Reconnections – increase from 70,000 to 71,000
+0.16%+0.16% +0.67%+0.67%
Loss Evolution (%)Loss Evolution (%) Collection Rate: Collection Rate: % over Gross Revenue% over Gross Revenue
10
DEC e FEC current levels are lower than Aneel limits
No penalties in any of 58 electric clusters in 2006 and 1H07
1H07: Storms in Summer and on atypical months (April and May)
2H07 actions:
– Speed-up maintenance plan for total implementation before Summer
– Reinforce strategy on emergency attendance
DEC DEC andand FECFEC
(*) Average of ANEEL Standard established for each one from the 58 clusters
Source: ANEEL, Eletropaulo and INPE
6.91
6.83
5.52
5.80
8.49
7.87
9.08
8.21
8.94
6.41
12.3811.81 11.34
12.57 12.79
8.958.68 8.66 8.61 8.49
2003 2004 2005 2006 1H07
DEC (hours) FEC (times) DEC Aneel Standard* FEC Aneel Standard*
Nov/05 up to Mar/06
Nov/06 up to Mar/07
DEC: Cuts Duration
FEC: Cuts Frequency
11
InvestmentsInvestments
33
58
297355
319
165
28
49378
193
330
404
2004 2005 2006 1H07
Capex Self - Financed
R$ millionR$ million1H07: R$ 193.2 million1H07: R$ 193.2 million
18%
10%
7%
15% 14%
36%
Custumer Service and System Expansion
Information Technology
Sefl - Financed
Maintenance
Loss Recovery
Others
12
Tariff Reset 2007Tariff Reset 200722ndnd CycleCycle
ANEEL authorized a tariff review index of -8.43%, applicable to the tariff as from July 4th, 2007:
PART A 5,428.99
PART B 2,089.02 Remuneration 708.59
Reference Company 852.50 Bad Debts 49.45
Depreciaciation 478.48 Other Revenues (42.62)
Requeried Revenue 7,475.39
Verified Revenue 8,118.40
Req. Revenue / Ver. Revenue -7.92%
Financial Effects (38.44) Financial Effects -0.51%
Total Tariff Reset -8.43%
NET RAB: NET RAB: 4,700.204,700.20
GROSS RAB: GROSS RAB: 11,101.6211,101.62
WACC (preWACC (pre--tax): tax): 15.08%15.08%
Depreciation Rate: Depreciation Rate: 4.31%4.31%
R$ million
X Factor = 2.42%X Factor = 2.42%
13
3.6% 1.7%4.8%
1.6%
8.0%
-6.2%-4.3% -2.2%
9.9%
1.6%16.9%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
2003 2004 2005 2006 2007
Part B Part A PIS/COFINS IGPM
EletropauloEletropaulo’’s Tariff Evolutions Tariff Evolution
2.1%
18.6%
11.6% 11.5%
RESIDENTIAL 307.3 301.1 -2.0%
INDUSTRIAL 240.5 257.4 7.0%
COMMERCIAL 278.7 286.0 2.6%
OTHERS 229.2 234.0 2.1%
TOTAL 278.1 282.5 1.6%
Average Tariff R$/MWh 1H06 1H07
Variation%
-8.4%
14
3,357 3,490
1,710 1,814
2,0362,233
1,004 1,150
5,393 5,723
2,714 2,964
1H06 1H07 2Q06 2Q07
Net Revenue Deduction of Operating Revenue
664 747306 425
1,3861,565
664703
514342
295
2,564 2,654
1,264 1,289161
1H06 1H07 2Q06 2Q07
Operating Expenses Energy Purchase Transport
ResultsResults
Increase in the total market (captive + free consumers):
– 1H07 x 1H06: 3.9%
– 2Q07 x 2Q06: 5.1%
Tariff adjustment of 11.45% applied since July 4th, 2006
Revaluation process of judicial deposits concluded in 06/30/2007: increase of R$ 67.9 million on operating expenses
Energy Purchase Expense (2Q07 x 2Q06):– Despite the reversal of R$ 178.2 million expenses in 2Q07, due to
the change in taxation system (PIS and Cofins) the expense increased R$ 39.1 million mainly explained by the:
– Reversal of R$ 145.4 million on extraordinary expenses in 2Q06;
– Increase of R$ 72.2 million in energy purchase from Itaipu, Auctions and Proinfa in 2Q07
+6.1%
+9.2% +1.9%
Gross RevenueGross RevenueR$ millionR$ million
Operating ExpensesOperating ExpensesR$ millionR$ million
+3.5%
15
EBITDAEBITDA
R$ million 1H06 X 1H07 2Q06 X 2Q07
EBITDA 947,1 996,2 523,3 605,2
RTE 163,5 162,5 82,2 80,2
Pension Fund 121,1 53,4 60,6 26,7
Provision - RTE 21,9 14,5 5,0 9,2
Judicial Deposits 0,0 67,9 0,0 67,9
Adjusted EBITDA 1.253,5 1.294,3 671,2 789,2
Adjusted EBITDA Margin 37,3% 37,1% 39,3% 43,5%
Increase +3.2% Increase +17.6%
16
227.0
505.5
201.9
340.0
6.8%14.5% 11.8%
18.7%
1H06 1H07 2Q06 2Q07
Net Profit Net Margin(247.8)
9.0
(126.1)
34.41H06 1H07 2Q06 2Q07
Improvement of the financial result due to:– The increase in financial income:
Monetary Variation of R$ 70.6 million related to the accrual of judicial deposits (non-recurring event)
– The decrease of financial expenses:Reduction of R$ 441.6 million on gross debt and a lower average cost (15.4% p.y. in Jun/06 to 12.6% p.y. in Jun/07)
Real Appreciation of 11.0% on last 12 months applied to Overseas II liability of the US$ 580.0 million
Intermediary dividends relative to the
accumulated earnings of 1H07, in the value
of R$ 487.8 million:
– R$ 11.00/’000 Voting Shares
– R$ 12.10/’000 Non-Voting Shares
Ex-Dividends date: 08/27/2007
Dividends Payment date: 09/03/2007
Financial ResultFinancial ResultR$ millionR$ million
Net ProfitNet ProfitR$ millionR$ million
ResultsResults
+122.7% +68.3%
17
Consolidated DebtConsolidated Debt
Gross Debt: reduction of 9.1% (R$ 441.6 million)
Net Debt: reduction of 30.0% (R$ 1.3 billion)
Foreign Currency: 1.3% of total (Hedge of 99.7%)
Amendment of CCB (R$ 300 million) – May, 2007:
– Reduction of average cost from CDI + 1.82% to CDI + 1.20%
– Increase of average life from 3.5 to 5.5 years
Pension Fund: R$ 2,373 millionPrivate Creditors: R$ 2,007 millionBNDES: R$ 55 million
Short Term x Long TermShort Term x Long TermR$ millionR$ million Gross Debt Gross Debt –– 1H071H07
Debt Highlights Debt Highlights –– last 12 monthslast 12 months Average Cost and Average LifeAverage Cost and Average Life
4,606 4,435 4,4354,877
- 9.9%-30.0%
79% 80% 80%73%
21% 20% 20%27%
2,979
4,256
2,9793,606
1Q07 2Q07 1H06 1H07
R$
mill
ion
LP CP Dívida Líquida
79% 80% 80%73%
21% 20% 20%27%
105.30%102.63%104.28%97.27%101.18%5.505.465.48
3.90
5.44
%
%
%
%
%
%
2Q06 3Q06 4Q06 1Q07 2Q070
1
2
3
4
5
Avg. Cost - % CDI* p.y. Avg. Life - years
Libor1.3%
Fixed Rate11.8%
IGP-DI53.5%
CDI/Selic33.4%
*CDI index at the end of the period
18
Managerial Cash FlowManagerial Cash Flow
Operating Cash Flow: increase in the net revenue billed as a result of the 5.9% rise in power consumption over 1Q07
Financial Expenses: semi-annual payments of interest on 9th debenture issuance (R$ 18.2 million) and CCB (R$ 21.1 million)
Dividends: payment of R$ 130.0 million on May 3rd, 2007 relative to FY 2006
R$ million 2Q06 3Q06 4Q06 1Q07 2Q07
Initial Cash 358 619 767 1,166 1,301 Operating Cash Generation 653 725 741 634 738 Investments (88) (75) (85) (95) (94) Net Financial Expenses (85) (176) (91) (187) (130) Net Amortization (45) (158) (111) (71) (83) Pension Fund Expenses (108) (85) (55) (48) (48) Income Tax (67) (83) - (97) (99) Dividends - - - - (130) Free Cash Flow 261 148 399 135 155 Final Cash 619 767 1,166 1,301 1,457
19
Daily Average Volume - preferred shares (R$ thousand)
20,510.7
4,177.5
18,024.9
2005 2006 1H07
Corporate GovernanceCorporate Governance
Corporate Governance Level 2– Since December 13th, 2004
– Class A Preferred Shares (ELPL5): tag along of 80%
– Class B Preferred Shares (ELPL6): tag along of 100%
– 20% of Independent Board Members
Sustainability – Listed on ISE since December 1st, 2005
– Sustainability Report based on GRI standards for the first time
+331.5%
+13.8%
85
90
95
100
105
110
115
120
125
130
Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07
ELPL6 ELPL5 Ibovespa IEE
Eletropaulo x Ibovespa x IEEIndex 100 = 12/28/06
+27.0%
+22.3%
+16.4%
+14.2%
'
20
ManagementManagement““SeguranSeguranççaa SempreSempre””
Frequency and Seriousness RateFrequency and Seriousness Rate Since Oct/06 the Company adopted BBS (Behavior Based on Safety), program that aims to a security behavior change
COGE Foundation Award 2006: Safety and Health Management
Safety and Health Management System (OHSAS –18001)
Safety Committees
801
21744
1,715
17
5.65
3.03
4.12
2.912.80
2003 2004 2005 2006 1S07
Seriousness Rate* Frequency Rate*
* NRB Criteria (Brazilian Legislation)
FrequencyFrequency RateRateNNºº. Accidents x 1,000,000 . Accidents x 1,000,000
Hours / manHours / man
SeriousnessSeriousness RateRate(Lost Days+ Debited Days) x 1,000,000 (Lost Days+ Debited Days) x 1,000,000
Hours / manHours / man
21
Management Management Social ProgramsSocial Programs
Eletropaulo na Comunidade Project (5th Edition in 2006)– 30 events in public schools – total of 120 thousand participants
“Circo das Artes” and “Creches Luz e Lápis”– Social-cultural development of 650 children and teenagers
Reading Rooms– 50 reading rooms installed, giving to the poorest communities access
to culture. File of 1,000 books.
“O Consumidor é Show” (*)– Free shows to 50 thousand people and 3 ton. of food collected
Volunteer - Campaigns– “Agasalho” – collected 40 thousand clothes.
– Easter - 650 chocolate eggs
– Christmas: 615 kits
(*) With proceeds of Rouanet’s Law nº 8,313/91
22
Management Management EnvironmentEnvironment
Scope extension of Management Environment System (SGA) and the Certification ISO14001:2004 (182 to 188 certified sites)
Environment License for new projects or repair. The process of environment license to the current infra-structure has already began.
PROJETO POMAR: Partnership with State Department for the Environment
Urbane Arborization: urbane arborization guide, cutting trees program, 2 R&Ds projects (R$ 630 thousand) related to arborization management and leftovers. Technology Innovation: trees registry with GPS and “palm pilots”.
GRI (Global Reporting Initiative): elaboration and publication in 2006– Sustainability Report with environment indicators
World Wide Fund for Nature (WWF) agreement renewed – Funding and Publicity for Amazon’s protection
23
ConclusionConclusion
Net Profit of R$ 505.5 million in 1H07, 122.7% higher than the net profit in 1H06
Reduction of 30.0% in consolidated net debt in the last 12 months
Increase of total debt’s average life from 3.7 to 5.5 years
Rating increased by S&P in national scale from A- to A
Collection Rate of 99.7%
R$ 487.8 million of dividends relative to 1H07 earnings to be distributed on September 3rd, 2007
25
Tietê OverviewTietê Overview
Summary Operating and Financial DataSummary Operating and Financial Data
Concession AreaConcession Area30 year concession expires in 2029
10 hydro plants on the rivers Tietê,
Pardo and Mogi Guaçu
Installed Capacity of 2.651 MW, 18% of
the energy generated in the State of
São Paulo
100% of assured energy is sold under
long-term contract PPA with
Eletropaulo through December 2015
Price adjusted annually for inflation
(IGP-M)
Payout of 100% of the net income
reported in 2006
Oceano Atlântico
R$ million 2005 2006 1H07
Generated Energy (GWh) 12,852 12,475 7,091
Net Revenues 1,220 1,387 740
EBITDA 939 1,097 520
EBITDA Margin 77.0% 79.1% 70.2%
Net Income 556 614 303
26
Tietê represents 2.5% of Brazil’s Total Installed Capacity and also is the 9th
largest private generator company in Brazil.
The 10 largest generator companies represent 62.3% (65,941 MW) of the total installed capacity in Brazil (105,927 MW).
BrazilBrazil10 largest Generator Companies 10 largest Generator Companies -- 20062006
Fonte: ANEEL; Gasnet.
Generation in BrazilGeneration in Brazil2006 – 403,6 TWh R$ BillionR$ Billion
AES Tietê
CHESF
Furnas
CESP
Itaipú
Cemig - GT
Tractebel
Copel - GER
Eletronorte
Duke
14.0%
8.1%13.0%
8.1%
2.6%
2.5%
13.6%12.1%
23.0%
3.1%
2.1%
4.6%
9.5%
8.1%
8.5%
18.7%
12.0%11.3%
20.1%
4.9%
27
HighlightsHighlights
On April 10th, Aneel, approved the acquisition of Licenses to build three small hydropower plants in the state of Rio de Janeiro
On August 10th, the Board of Directors authorized the payment of R$ 142.1 million in dividends, which correspond to 100% of 2Q07 net earnings:
– R$ 1.42 per 1,000 common shares– R$ 1.56 per 1,000 preferred shares
1H071H07
Subsequent EventsSubsequent Events
PIS/Cofins – Positive impact of R$ 49.2 million on Net Income in 2Q07
Increase on transmission expense (TUSDgeneration) – Negative effect of R$ 61.1 million on Net Income in 2Q07
Ebitda of R$ 519.8 million in 1H07, 4.2% lower than 1H06
Net Income of R$ 302.5 million in 1H07, reduction of 1.0% compared to 1H06
28
Generation Generation –– MW averageMW average Billed Energy Billed Energy -- GWhGWh
Energy Balance Energy Balance –– 1H071H07
Increase of 15.3% in energy generated (1H07 x 1H06)
Generation was 28.7% above the assured energy
(1,275 MW average)
Growth of 22.5% in volume sold to CCEE/MRE (1H07
x 1H06)
Eletropaulo tariff:July/2006 to May/2007 - R$ 133.87/MWh
Since June/2007 – R$ 127.03/MWh
MRE tariff – R$ 7.47/MWh
CCEE tariff* – R$ 44.05/MWh
* Average 1H07
1,040 1,258
1,392 1,363 1,467 1,424
1,642
80.7% 97.6% 109.2% 106.9% 115.1% 111.7% 128.7%
2001 2002 2003 2004 2005 2006 1S07
Generation - MW Average Generation / Assured Energy
914
738
5,587 5,557
961
177
7,239 6,749
1H06 1H07
Eletropaulo MRE CCEE/Losses
+7.3%
29
ReliabilityReliability
Failure Index (FI) and Equivalent
Availability Factor (EAF) figures exceed
the requirements established by the
National Ecectic Energy Agency – ANEEL:
2.9% for (FI) and 92.0% for EAF
Average of 8.3 years operating without
accidents that require removal of
personnel from the worksite
Failure Index x AvailabilityFailure Index x Availability Period without Period without AccidentsAccidents
Plant Period WithoutAccidents - Years
Ibitinga 19.5MogiGuaçu 12.9Nova Avanhandava 10.0 Água Vermelha 9.4Limoeiro 7.3Barra Bonita 7.3Promissão 5.8Caconde 4.7Euclides da Cunha 4.3Bariri 2.0
2.2
3.0
2.5
1.6 1.7
0.8
2.3
92.5%93.0%92.6%90.9%
96.1%94.2%96.8%
2001 2002 2003 2004 2005 2006 1H07
Failure Index (FI) Equivalent Availability Factor
30
1H071H07
CapexCapex
Capex – 1H07: R$ 21.7 million
– Restoration and upgrade in equipments – R$ 12.0 million
– Environment (reforestation) – R$ 5.0 million
– Small Hydropower Plants – R$ 3.5 million
– Others (SAP, Hidroway etc.) – R$ 1.2 million
Forecasted Capex - 2007: R$ 75.5 million
– R$ 22.4 million: Construction of three small hydropower plants
located in the interior of São Paulo State. Together, they will
boast na installed capacity of 8MW.
– R$ 36.6 million: Restoration and upgrading of the plants
– R$ 11.7 million: Environment
– R$ 4.8 million: SAP
Investment in Small Hydropower Plants
– Acquisition of License to build three small hydropower plants in
the State of Rio de Janeiro, with a total installed capacity of 52
MW and average 28.97 MW of assured energy, approved by
ANEEL – forecasted investments of R$ 225 million in 2 years,
from which R$ 15.3 million were already invested.
R$ millionR$ million
12.421.9
27.5
46.5
21.7
75.5
2003 2004 2005 2006 1H07 2007e
16.2% 2.4%
3.0% 22.9%
55.5%
Equip.
Hidroway
PCH
IT
Environment
31
Expansion RequirementExpansion Requirement
Requirement: increase installed capacity by at least 15% (400 MW), until December 2007:
– Increasing the installed capacity in São Paulo State; or – Purchasing energy from new plants, located in São Paulo, through long term agreements
(at least 5 years)
Restrictions to increase the capacity:– State of São Paulo – no hydro resource and environmental restrictions to thermal plants – Gas supply– “New Model of the Electric Sector” (Law # 10,848/04)
Proposal from AES Tietê to the State Government of São Paulo:– To be supported by a specialized consulting company to produce a report in 12 months
regarding technical, financial, regulatory and environmental aspects, of the generation capacity expansion possibilities in the State of São Paulo and in compliance with the “New Model of the Electric Sector”
Neither ANEEL nor the São Paulo State Government have sent a formal reply to AES Tietê with regard to this issue so far
32
+70.8%+70.8%
+33.2%+33.2%
34 33 16 16
8245
4416
74 175
36132
1H06 1H07 2Q06 2Q07
190
253
96
164380.7
348.8
740.4 698.0
1H06 1H07 2Q06 2Q07
ResultsResults
+6.1%+6.1%
+9.1%+9.1%
Net Revenues in 1H07 up 6% from 1H06:
(i) 0.9% price adjustment granted in July06 for the energy sold under the bilateral contract
(ii) Higher energy volume sold to Eletropaulo and to CCEE / MRE in 1Q07.
(iii) Positive impact of R$ 28.5 million due to PIS/Cofins taxation system.
Increase of 33.2% in costs and operational expenses mainly due to extraordinary items occurred in 1H07:
(i) Power Purchase – R$ 92.5 million extraordinary expense due to the increase of the transmission charge (TUSDgeneration) – Ratifying Resolution 497/07
Net RevenuesNet RevenuesR$ millionR$ million
Costs and Operational ExpensesCosts and Operational ExpensesR$ millionR$ million
Power Purchase and sector charges
Operational ExpensesDepreciation
33
ResultsResults
EBITDAEBITDAR$ millionR$ million
--4,2%4,2%
--13,5%13,5%
EBITDA Margin
542.5519.8
268.8232.6
77.1%
61.1%
70.2%77.7%
1H06 1H07 2Q06 2Q07
34
(47.1)
(18.9)(23.7)
10.1
1H06 1H07 2Q06 2Q07
142.1 152.6
302.5 305.5
1H06 1H07 2Q06 2Q07
ResultsResults
Positive impact in 2Q07, explained by the accounting of inflation gains on PIS/Cofins tax credits, which totaled R$ 36.6 million
IGP-M reduction of 50.0% (2Q07 x 2Q06)
Payment of R$ 142.1 million in dividends, which correspond to 100% of the net earnings obtained in 2Q07
– R$ 1.42 per 1,000 common shares– R$ 1.56 per 1,000 preferred shares
Ex-Dividends: August 27, 2007 Payment: September 3, 2007
Financial ResultsFinancial ResultsR$ millionR$ million
Net IncomeNet IncomeR$ millionR$ million
--6.9%6.9%
43.8% 40.9%
37.3%43.8%--1.0%1.0%
Net Margin
--59.9%59.9%
35
Net DebtNet DebtR$ MillionR$ Million
DebtDebt
Cash availability = R$ 578 million (June, 2007)– Marketable securities with durations lower than 90 days– Average profitability around 100% of CDI
R$ million
1,4061,254
1,096
661682676
0.7x 0.6x 0.7x 1.4x
2.0x
3.2x
2002 2003 2004 2005 2006 1S07
Net DebtNet Debt / EBITDA
VencimentoAmount Creditor Maturity Cost Collateral
1,305.2 Eletrobras May, 2013 IGP-M + 10% p.a. Receivables
4.9 FunCesp III Sep, 2027 IGP-M + 6% p.a. Receivables
36
Cash FlowCash Flow
2Q07 free cash flow was negative of R$ 112.3 million, mainly due to payments of R$ 165.1 million and R$ 160.5 million corresponding to dividends on the 4Q06 and 1Q07 net income respectively.
R$ million 2Q06 3Q06 4Q06 1Q07 2Q07
Initial Cash 852 777 674 691 687
Operating Cash Flow 308 290 280 288 308
Investments (6) (8) (24) (10) (12)
Net Financial Expenses (18) (15) (19) (16) (18)
Net Amortization (44) (50) (45) (46) (48)
Income Tax (20) (16) (32) (220) (17)
Dividends and Interest on Equity (295) (305) (143) - (325)
Free Cash Flow (74) (104) 17 (4) (112)
Final Cash 777 674 691 687 574
37
GETI4
GETI3
Capital MarketsCapital Markets
Tietê x Ibovespa x IEE Tietê x Ibovespa x IEE -- Index 100 = June, 2006Index 100 = June, 2006
Daily Average VolumeDaily Average Volume(R$ thousand)(R$ thousand) Dividend YieldDividend Yield
100%
96.9%
95.0%
Sustainability– Sustainability Report based on
GRI standards for the first time.
64.0%
72.4%
3,441
5,930
9,726
48.5%
90
100
110
120
130
140
150
160
170
jun/06 sep/06 dec/06 mar/07 jun/07
57.6%
44.1%44.2%
13.,2%
11.4%
13.4%
13.2%
12.0%
12.3%2004
2005
2006
GETI3 GETI4 Ibovespa IEE
PayoutPayout
1,698
1,8134,232
5,714
1,6284,012
2005 2006 1H07
38
“Generating Citizenship” Project– Involves the selection and support of cultural, educational
and/or human development projects which benefit communities in the interior of the Estate of São Paulo
Music for the Environment Project– 9 free outdoor concerts held in different cities. – Total public of 18 thousand people and collection of 2.3
tons of goods donated to several institutions
Reading Rooms Project– 25 Reading Rooms with approximately one thousand
books
Guri Project– Sponsorship of 5 units. More than 700 children from low
income families. Opportunity to learn how to play musical instruments and to sing in a coral
ManagementManagementSocial ProgramsSocial Programs
39
ManagementManagementEnvironmentEnvironment
Global Connections– Alignment of the Company’s initiatives to International agreements and summits– Actions from AES Brazil adopted as “Best Practice” actions for AES Corp– Positive repercussion towards Environmental Authorities and NGOs that work in this
field.
Carbon Credits– Evaluation of ongoing projects
Flora Program– Produced 1 million saplings in the Promissão Plantnursery and donated them to rural communities, producers, municipal governments and NGOs
Fishery Management Project– Bred and released 2.5 million young fishinto 10 reservoirs
40
ConclusionConclusion
Generation was 29% higher than assured energy in 1S07
Net Income of R$ 302.5 million in 1H07, reduction of 1.0% compared to 1H06. Net margin of 40.9% compared to 43.8% in 1H06
– The reduction on net income is mainly due to the increase of R$ 92.5 million in transmission expenses (TUSDgeneration) - extraordinary event
Payment of R$ 302.6 million in dividends, which corresponds to 100% of 1H07* net earnings
AES Tietê has been analyzing new opportunities of investments and expansion, aiming at increasing the Company’s results
* R$ 160.5 million refer to 1Q07 net earnings distributed in June 06, 2007 and R$ 142.1 million refer to 2Q07 net earnings that will be paid on September 03, 2007
The statements contained in this document with regard to the busThe statements contained in this document with regard to the business prospects, iness prospects, projected operating and financial results, and growth potential projected operating and financial results, and growth potential are merely forecasts based are merely forecasts based on the expectations of Company Management in relation to its futon the expectations of Company Management in relation to its future performance. Such ure performance. Such estimates are highly dependent on market behavior and on the conestimates are highly dependent on market behavior and on the conditions affecting ditions affecting BrazilBrazil‘‘s macroeconomic performance as well as the electricity sector ans macroeconomic performance as well as the electricity sector and international d international market, and they are therefore subject to change.market, and they are therefore subject to change.
42
ELETROPAULO METROPOLITANA ELETROPAULO METROPOLITANA ELETRICIDADE DE SÃO PAULO S.A.ELETRICIDADE DE SÃO PAULO S.A. AESAES TIETÊ S.A.TIETÊ S.A.