apre 4 t08
TRANSCRIPT
2008 Results
March, 2009
Main highlights in 2008Main highlights in 2008
► 2008– 3.9% growth of captive market– 8.3% increase on Ebitda, totalizing R$ 1,696 million– R$ 1,027 million Net Income, 44.1% above 2007– + 8.01% average Tariff readjustment– Finsocial Final Decision generating R$ 299 million in tax credits– Proposal of R$ 69 million of interest on equity
► Subsequent Events– Agreement with the bankrupt entity of Banco Santos: Payment of R$ 151 million on January
09, with positive R$ 62 million impact. Accounting write-down moment in analysis.
– Agreement with the São Paulo Municipality in the amounting to R$ 344 million, to be paid in four annual installments beginning in July 09. The fulfillment of the agreement is bound to the realization of investments by of São Paulo by Eletropaulo, totaling R $ 172 million
– Dividends’ payment proposal of R$ 615 million in complimentary dividends, to be subjected to the Annual Shareholders Agreement:
• R$ 3.46 per Common share and R$ 3.81 per Preferred share
2
Total market growth of 2.3% in the 4Q08Total market growth of 2.3% in the 4Q08……
1 - Own consumption not considered
+8.6%+8.6% +12.6%+12.6% +10.1%+10.1% +11.0%+11.0% +10.1%+10.1%
4Q084Q07Average Tariff of Sold Energy – R$ / MWh
246205
252229257
228271279 257 277
Residential Industrial Commercial Others Total Market
+6.3%+6.3% +4.5%+4.5% --7.2%7.2% +2.3%+2.3%+5.2%+5.2%+0.4%+0.4% +1.9%+1.9%
Residential Industrial Commercial Public Sector and Others
Total Market
Consumption Evolution - (GWh)1
Captive Market Free Clients
8,381
645
2,5651,675
3,497
10,275
1,894657
1,758
8,756
3,719
1,6812,698
10,513
4Q084Q07
3
... and 3.3% annual growth... and 3.3% annual growth
1 - Own consumption not considered
+6.9%+6.9% +3.9%+3.9% +0.4%+0.4% +3.3%+3.3%+2.3%+2.3%+1.3%+1.3% +1.7%+1.7%
Residential Industrial Commercial Public Sector and Others
Total Market
Consumption Evolution - (GWh)1
Captive Market Free Clients
20082007
7,355
39,932
13,500
6,47510,072
2,530
32,577
41,243
10,3016,559
14,427
33,860
7,3832,573
--2.7%2.7% --3.2%3.2% --3.1%3.1%
20082007Average Tariff of Sold Energy – R$ / MWh
Residential Industrial Commercial Others Total Market
269224
275247
284
217261270 247 267
--5.0%5.0% +0.2%+0.2%
4
5
Stabilization of new billing system CCS over 2008Stabilization of new billing system CCS over 2008
► Cuts and Reconnection – Monthly Average (2007 X 2008)– Cuts: reduction from 112 thousand to 51 thousand
– Reconnection: reduction from 71 thousand to 36 thousand
► Cuts and Reconnection – Monthly Average (3Q08 X 4Q08)– Cuts: increase from 34 thousand to 55 thousand
– Reconnection: increase from 33 thousand to 46 thousand
Collection Rate – % over Gross Revenue
3Q08 4Q08
98.697.4
2008
97.8
2007
99.5
2006
99.1
2005
99.0
+1.2 pp+1.2 pp--1.2 pp1.2 pp
► Bad debtor list – 2nd Semester 2007: 115 thousand
– 1st Semester 2008: 93 thousand
– 2nd Semester 2008: 443 thousand
Electric losses Electric losses
► Fraud and Illegal Connections (2008)
– 435 thousand inspections and 58 thousand frauds detected
– 75 thousand illegal connections regularized
1 - Current Technical Losses used retroactively as reference
Loss Reduction – %
2008200720062005
6.46.4 5.55.5 5.15.1
6.56.5 6.56.5 6.56.5
11.612.9
12.0
5.05.0
6.56.5
11.5
Commercial Losses
Technical Losses1
--1.31.3 pppp
6
1 – Duration of Interruptions 2 – Frequency of Interruptions
Source: Aneel and Eletropaulo
Best FEC of AES Eletropaulo historyBest FEC of AES Eletropaulo history
DEC1 and FEC2
12.3811.81 11.34 10.92
12.57 12.79
8.95 8.68 8.66 8.61 8.49 8.41
6.91 6.835.64 5.20
9.208.907.87
9.088.21
8.94
5.526.41
2003 2004 2005 2006 2007 2008
DEC (hours) FEC (times) DEC Aneel Standard FEC Aneel Standard
7
4747
Investments of R$ 457 million in 2008Investments of R$ 457 million in 2008
Investments – R$ million Investments 2008
2005 2006 2007 2008 2009e
Customer financed
Capex
355355301301
364364410410
49496969
404404378378
433433457457
482482
7777
8080
562562
10%10%
5%5%
12%12%
18%18%
10%10%
45%45%
Customer Service and System Expansion
Customer Financed
Loss Recovery
Maintenance
IT
Others
8
9
3.9% growth of revenue3.9% growth of revenue
► 3.9% growth on captive market during 2008
► 4.5% growth on captive market comparing the 4Q08 x 4Q07
► Positive effect of R$ 201 million in the 4Q07 due to energia livre write-off
Gross Revenue - R$ million
2007 2008 4Q07 4Q08
Deductions from Gross Revenue
Net Revenue
7,1937,193 7,5307,530
1,8321,832 1,9901,990
4,1134,113
1,0111,011 1,1311,131
11,30611,306 11,75111,751
2,8432,843 3,1213,121
4,2214,221
+3.9%+3.9%
+9.8%+9.8%
+4.7%+4.7%
+8.6%+8.6%
► Price per MWhTietê: 2007: R$ 131.98 2008: R$ 149.72Itaipu: 2007: US$ 46.38 2008: US$ 48.02 Auctions: 2007: R$ 67.36 2008: R$ 76.72Total average price: 2007: R$ 95.84 2008: R$ 101.68
1 - Depreciation not included 2 - Personnel, Material and Services
Rising costs of energy purchaseRising costs of energy purchase
Energy Costs and Operating Expenses1 - R$ million
2007 2008 4Q07 4Q08
Energy Supply and Transmission Charges
PMS2 and Other Expenses
4,0974,0974,7004,700
1,0131,013 1,2221,222
1,4401,440
612612 293293
5,5375,5375,8935,893
1,6251,625 1,5151,515
1,1931,193
10
+6.4%+6.4%
--6.8%6.8%
--17.1%17.1%
Better performance of operating expensesBetter performance of operating expenses
2007 Provisions and Contingencies
ADA1 and Write-Off
RTE and Energia Livre
2008
Accumulated 12 Months – R$ million 4Q08 – R$ million
(22)
(160)93(158)
1,193
1,440
Others 2 Provisions and Contingencies
ADA1 and Write-Off
RTE and Energia Livre
(50)(160)(11)
(98)
293
612
Others 24Q07 4Q08
--52.1%52.1%
1 - Allowance for doubtful accounts2 - Personnel, Material, Third Party Services, FCESP, Leasing and Rents, Indemnifications, Losses, Publicity, Banking Fees, IPTU among others
11
► The other expenses and revenues now affect the operational result
► R$ 89 million recorded in 4Q08, referring to Finsocial tax credits
► R$ 44 million in 4Q07, related to substation automation system assets write-off
12
Recovery of Finsocial in 2008Recovery of Finsocial in 2008
Other Revenues and Expenses – R$ million
2007 2008 4Q07 4Q08
(91)(61)
8060► Finsocial (R$ million)
Other Revenues 89
Financial Revenue 210
Total 299
NetRevenue
FINSOCIALProvisionsAnd
Conting.
OthersEnergy Supply and
Transmission Charges
NetRevenue
PIS/ COFINS ¹
FINSOCIALProvisionsAnd
Conting.
OthersEnergy Supply and
Transmission Charges
12 Months Accumulated – R$ million 4Q08 – R$ million
8.3% annual growth of Ebitda8.3% annual growth of Ebitda
1 – Change on PIS/ COFINS taxation system with Tietê on June, 2007
2007 2008
158
4Q07 4Q08
(169)
1,5661,566
555555
358
(51)
9773
89
89
(435)538
(209)
Ebitda
146146
13
1,6961,696
+8.3%+8.3%
+280.4%+280.4%
14
Improvement of financial resultImprovement of financial result
► R$ 210 million of Finsocial monetary adjustment
► R$ 191 million reversal of Cofins - calculation basis enlargement
► R$ 72 million provision of a penalty for the Cofins - taxation increase
► Reduction of 37.1% on financial expenses in 2008
Financial Result – R$ million
► Finsocial (R$ million)
Other Revenues R$ 89
Financial Revenue R$ 210
Total R$ 299
2007 2008 4Q07 4Q08
(104)(145)
231129
Average Term - YearsCDI2
Continuous net debt reductionContinuous net debt reduction
4.4x
Net Debt (R$ billion) Net Debt / Adjusted EBITDA1
Net Debt Average Cost and Average Term (Principal)
2005
4.6
2006
3.7
2007
3.0
2008
2.5
4T07
123.3%
1T08
125.3%
2T08
120.9%
3T08
107.8%
4T08
102.8%
2.1x1.3x 1.2x
6.8 6.67.8 7.7 7.1
1 - Accumulated 12 Months Adjusted EBITDA 2 – Brazil’s Interbank Interest Rate 15
16
Sustainable amortization scheduleSustainable amortization schedule
► 99.3% of total debt in local currency
► 0.7% of total debt in foreign currency (R$ 28 million): 96% protected by hedge
► Debt with FCesp extended from 2022 to 2028, causing the decrease of annual amortization from R$
117 million to R$ 102 million
Amortization Schedule – Principal – R$ million
99
524524250250 250250 250250
5050 125125375375258258
117117
117117 117117 117117
117117117117
1,1621,162
2727
2009 2010 2011 2012 2013 2014 2015 2016-2028
National Currency (ex. FCESP)
FCESP1
Foreign Currency2
1 - FCesp = Pension Fund2 - Exchange rate on 12/31/2008 – US$ 1.00 = R$ 2.3370
17
More than R$ 1.5 billion in cashMore than R$ 1.5 billion in cash
2007 1Q08 2Q08 3Q08 4Q08 2008
1,166 1,334 1,478 1,454 1,373 1,334
2,488 418 497 613 491 2,019
(407) (80) (60) (107) (126) (374)
(501) (101) (41) (107) (37) (285)
(182) (4) (30) (21) (40) (94)
(198) (57) (58) (32) (46) (192)
(418) (33) (114) (68) (80) (295)
(615) (0) (218) (359) - (577)
168 144 (24) (81) 162 201
1,334 1,478 1,454 1,373 1,536 1,536
Managerial Cash Flow1 – R$ million
Initial Cash
Operating Cash Flow
Investments
Net Financial Expenses
Net Amortizations
CESP Foundation
Income Tax
Dividends
Free Cash Flow
Final Cash
► The Company keeps its cash invested on Certificates of Deposit (CDs) and Government Notes, with average profitability of 102.4% of CDI on 2008
► Increase in annual average cash balance:– R$ 1,106 million in 2007 x R$ 1,411 million in 2008
Net Income of 2008 over R$ 1.0 billion
Net Income – R$ million Dividend Payout
2007 2008 4T07 4T08
713
1,027
10
529
2006
34.9%
2007
100.3%
2008
101.5%
3.2%
14.4%20.3%
130 715
1,043
Dividends1 Pay-out Yield2
1 - Includes complementary dividends 2 – Average Price of the Period 3 – Interst on Equity net of taxes18
► Proposed earnings to be submitted to the Ordinary Shareholders Meeting on April 27, 2009
► Proposed Dividends of R$ 615 million- R$ 3.46 per common share and R$ 3.81 per preferred share
- Ex-dividends date: april /28/2009
- Payment:
- 1st installment of R$ 307.5 million on may/14/2009
- 2nd installment of R$ 307.5 million on december/10/2009
► Interest on Equity2: R$ 69 million- R$ 0.39 per common share and R$ 0.43 per preferred
share
- Ex-interest on equity date: december/20/2008
- Payment: may/14/2009
Corporate governanceCorporate governance
2005
4,171
2006 2007 2008
7,508
26,066 25,677
+80.0%+80.0%
+247.2%+247.2%
AES Eletropaulo X Ibovespa X IEE Daily Average Volume3 - R$ thousand
1 - Index –12/29/07 = 100 2- Index – 12/30/08 = 100 3 – Preferred shares Class B
IBOV
IEE
ELPL6
19
-29,9%
2.8%
18.1%
-11.6%
-41,2%50
60
70
80
90
100
110
120
dez-071 fev-08 abr-08 jun-08 ago-08 out-08 dez-08
95
100
105
110
115
120
125
130
dez-082 jan-09 fev-09 mar-09
3.6%
2009
► More than 1 thousand children, teenagers and adults benefited
► Unit location: Vila Guacuri, in São Paulo
► Own and encouraged Investments: about R$ 3 million in 2008
► Activities: theater, dance, music, circus arts, visual arts, artistic gymnastics and courses of income generation
“Casa da Cultura e Cidadania” Project
► 280 benefited children between 1 and 6 years old
► Own investments amounting R$ 1.5 million in 2008
► Units: Santo Amaro and Guarapiranga
“Centros Educacionais Infantis Luz e Lápis” - Project
20
Social Social ResponsibilityResponsibility
Volunteer Project
Distributing “Energia do Bem “
Performing to transform Endeavoring in the community
21
One more year of awardsOne more year of awards
► Maintenance on ISE (Sustainability Index) for 2009 (BM&FBovespa – Nov.08)
► National Quality Award, company recognized as a reference on global management (National Quality Foundation – Oct.08)
– Finalist company category
► Value Creation Prize for Shareholders in the Sector, in the category Eletric Energy (Abrasca - Associação Brasileira das Companhias Abertas – Aug.08)
► Most acknowledged company on sustainability among companies from the public sector (Revista Imprensa – May.08)
2008 Results 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.