2Q11 Results

August, 2011

2

2Q11 Highlights

FinancialFinancial • Ebitda amounted R$ 525.2 million, 4.2% higher than 2Q10, disregarding one-off effect of financial liquidation of AES Eletropaulo Telecom sale to Brasiliana in Jun/10

• Financial result 64.3% higher than 2Q10 excluding one-off effect of the end of litigation concerning the agreement with Banco Santos in 2Q10

• Net Income of R$ 255.4 million, 6.1% increase compared to 2Q10, disregarding one-off effects mentioned above

OperationalOperational • Higher energy consumption: captive market 2.7% and free market 4.9%

• Losses: reduction of 0.7 p.p. when compared to 2Q10

• SAIDI was reduced by 17% and SAIFI by 14% in the last 12 months (June basis)

• Investments with own resources of R$ 153.6 million, 23.3% higher than 2Q10

RegulatoryRegulatory • According to ratifying resolution 1174, AES Eletropaulo tariff reset was postponed from July 4th

2011 due to 3rd cycle undefined methodology

DividendsDividends • Interim dividends distribution totaling R$ 291 million, representing 50% of 1H11 results, in the amounts of R$ 1.64 per common share and R$ 1.80 per preferred share

31 – Own consumption not considered

Market growth driven by the performance of residential and commercial clients

Consumption Evolution (GWh)¹

Residential Industrial Commercial Public Sector and Others

Captive Market Free Clientes Total Market

3,917

1,541

2,753

683

8,894

2,010

10,904

4,053

1,513

2,879

694

9,138

2,109

11,246

2Q10 2Q11

+3.5% -1.8% +4.6% +1.6% +2.7% +4.9% +3.1%

4

Losses - (%)

1 – Current technical losses used retroactively as a reference

Losses and collection rate levels reflect the continuous efforts for internal processes improvements

Collection Rate (% over Gross Revenues)

2008 2009 2010 2Q10 2Q11

6.5 6.5 6.5 6.5 6.5

5.1 5.3 4.4 4.8 4.1

11.6 11.810.9 11.3 10.6

Technical Losses¹ Commercial Losses

2008 2009 2010 2Q10 2Q11

98.5101.1 102.4 101.6 102.2

5

SAIDI level reflects Company’s continuous investments. Excluding the effect of the cyclone, the

SAIDI would be 9.87 hours

SAIDI – System Average Interruption Duration Index

Source: ANEEL and AES Eletropaulo

8.909.20

11.9012.45 12.74 12.66 12.72 12.39 12.22 12.09 11.79 11.65

11.2510.84 10.60

10.13 10.309.91 9.90 9.88

10.40

16.0816.63

18.70 19.00 19.00 19.00 19.00

20.00

22.00

21.00 21.00 21.00 21.00

18.00 18.00

19.00 19.00

18.00 18.00 18.00

11.34 10.92

10.099.32 9.32 9.32 9.32 9.32 9.32 9.32 9.32 9.32 9.32 9.32 9.32

8.68 8.68 8.68 8.68 8.68 8.68

AES Eletropaulo Brazil Aneel Reference - AES Eletropaulo

6

Pruning plan contributed to the good performance of SAIFI

Source: ANEEL and AES Eletropaulo

SAIFI – System Average Interruption Frequency Index

5.655.20

6.17 6.34 6.41 6.29 6.29 6.16 6.12 6.12 5.96 5.855.61 5.52 5.42 5.29

5.57 5.44 5.51 5.51 5.48

11.7211.34

11.7412.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00

11.00 11.00 11.00 11.00 11.00 11.00 11.00

8.49 8.41

7.877.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39 7.39

6.93 6.93 6.93 6.93 6.93 6.93

AES Eletropaulo Brazil Aneel Reference - AES Eletropaulo

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Extra tropical Cyclone - June 7 to 9 Action Plan: R$ 120 million

¹ Equipment purchase and increase in maintenance and construction teams

Action Plan 2011 – 2012: Action Details

• 2011: R$ 39 million as operational expenses and R$ 36 million as investments

• Expand capacity on clients attendance:– increase 38% call center positions (150 positions)– contract 300 positions for call center in stand by condition – automated attendance increase from 2 thousand call / hour to 50 thousand call hour– double SMS capacity to 100 thousand day

• Deployment of mobile agency and field actions to receive indemnifications requests

• Increase on pruning, maintenance and construction teams (580 electricians)

Preventivemaintenance¹

Customer Attendance

Tree trimming

Other process improvements

42

35

7

26

9

68

43

7

2

InvestmentsOperational expenses

8

CAPEX (R$ million)

Increasing capex: R$ 159 million in 2Q11, 21% higher than 2Q10

2Q11 Investments (R$ million)

0 

100 

200 

300 

400 

500 

600 

700 

800 

2009 2010 2011(e) 2Q10 2Q11

478654

759

125 154

37

28

26

6 5

516

682

784

131 159

Capex Paid by Customers

+21%

51

41

34 11

5 5

11

Maitenance

Client Service

System Expansion

Losses Recovery

IT

Paid by the Clients

Others

9

Gross Revenue (R$ million)

Revenues increased 5% due to residential and commercial classes expansion (+3.5% and +4.6%)

and tariff readjustment (+1,6%)

+5%

+7%

1H10 1H11 2Q10 2Q11

4,344 4,490

2,193 2,231

240 324

131 160

2,406 2,651

1,234 1,342

6,990 7,466

3,558 3,732

Net revenue ex-construction revenue

Construction revenues

Deduction to gross revenue

10

Energy purchase cost kept at the same level benefited by exchange rate impact

Operating Costs and Expenses ¹ (R$ million)

1 - Depreciation and other operating income and expenses are not included 2 - Personnel, Material and Services

+3%

+3%

1H10 1H11 2Q10 2Q11

2,644 2,700

1,321 1,341

670 710

329 363

3,315 3,410

1,650 1,704

Energy Supply and Transmission ChargesPMS² and Others Expenses

11

PMS and Other Expenses (R$ million)

Increase on operating expenses impacted by non- recurring items aiming at operational improvements

¹ ADA, write-off, provisions for contingencies, losses and agreements and others operational expenses.

2Q10 Personnel and payroll

FCesp Others SAIDI andSAIFI

improv.

One-off:consulting, IT proj. and

public lighting

2Q11

329 329 336 336 336 346 363

21 (14) 3 7

16

¹

12

Ebitda (R$ million)

Market growth and lower expenses with pension fund positively contributed to Ebitda

2Q10 One-off: Eletropaulo

Telecom sale liquidation

2Q10ex

one-off

Net Revenues En. purchaseand trans.

usagerate exp.

Salary adjustment

Fcesp SAIDI/ SAIFI, IT, consulting

and public light.

Others¹ 2Q11

770

504 504 504 551 529 529 520 520 525

(265)

66 (20) (21) 14 (23) 5

¹ Others: ADA, provisions for conitingencies, losses and agreements and other operational revenues/expenses.

13

Financial Results (R$ million)

Financial results positively impacted by exchange rate (Itaipu) and higher investments income

Financial Results (R$ million) – ex one-offs1

¹ One-off regarding the receipt of Banco Santos bankruptcy agreement in 2Q10.

(60)

(11) (10)

(28)

+82% +64%

(11) (10)

78

46

1H10 1H11 2Q10 2Q11

1H10 1H11 2Q10 2Q11

14

1H10 1H11 2Q10 2Q11

346 376

194 185

117 162

47 70

245

245

709

537 486

255

2Q11 recurring net income in line with the same period of the previous year

Net Income (R$ million)

- 5%+9%

0 Q 0 QNet Income - ex one-off and regulatory assets and liabilitiesRegulatory assets and liabilitiesOne-off

Net Income ‐ June 30, 2011 537.3 Realization of equity valuation adjustments 44.7

Legal reserve ‐Distribution basis 582.0

Distribution basis proposal 291.0 

R$ 1.64 per common share and R$ 1.80 per preferred share

Dividends 1H11 (R$ Million)

Ex-dividends date: 08/11/11; Payment date: 09/22/11

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Operational cash generation reflects market and collection rate growth

Operational Cash Generation (R$ million) Final Cash Balance (R$ million)

2Q10 2Q11

584654

2Q10 2Q11

1,786

1,043

+12%-42%

16

7.1 6.8

Average term - Years

2Q10 2Q11

106.4% 108.9%

% of CDI²

Average Cost and Average Term (Principal)Net Debt

Net debt increase reflects reduction in cash balance

1

1 - EBITDA Adjusted in last 12 months 2 – Brazil’s Interbank Interest Rate

13.0% 13.6%Efective rate

0.9x

1.3x

Net Debt/Ebitda Adjusted with Fcesp

2Q10 2Q11

2.4 3.0

Net Debt (R$ billion)

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.

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2Q11 Results