3. Highlights
• Adjusted EBITDA of R$ 505.1 million in 1Q07, 13.3% lower
j ,
than 1Q06
1Q07 • Net Profit of R$ 165.6 million, compared to a net profit of R$
25.1 illi in
25 1 million i 1Q06
• End of contingency with CTEEP regarding CETEMEQ
property. Agreement's total amount of R$ 125.3 million
Agreement s
• Renegotiation of R$ 300 million in CCB’s valid since May,
12th – reduction of average cost from CDI + 1.82% to CDI +
Subsequent 1.20% and maturity extension from 6 to 8 years
Events • 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
y ( )
million relative to FY 2006 earnings
3
4. Consumption Comparison in GWh
Captive Market Evolution (GWh)
7,840
7 840 7,709
7 709
7,418 7,429 7,590 7,503
7,241 7,266 • Excluding all free consumers from previous
periods, the captive market increased 4.4% in
the last 12 months.
2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07
2.7%
2 7%
5.6%
0.5% 9,572
3,181 9,317
3,013
2,560 2,561 7,818 7 859
7,859
-8.2% 14.2%
1,713
1,647 1,512 1,500
1.0%
599 605
Residential Industrial Commercial Public Sector Free Billed Market Total Market
and Others Consumers
1Q06 1Q07 4
NOTE: Charts do not consider own consumption
6. Operating Highlights
Collection Rate -
Loss Evolution (%)
% over Gross Revenue
-4.8% +2.5%
13.5 12.9
12.0 12.8 12.2 101.2
99.0 99.1 98.7
7.0
70 6.4 6.3 97.5
97 5
5.5 5.7
6.5 6.5 6.5 6.5 6.5
2004 2005 2006 1Q06 1Q07
2004 2005 2006 1Q06 1Q07
Technical Losses Com m ercial Losses
Fraud Combat and Clandestine Connections (1Q07) Collection Rate (1Q07)
• Reduction of commercial losses in 0.6 percentage points in Public Sector: 105.2%
the last 12 months Private Sector: 100.9%
• 75 thousand inspections and 7 thousand frauds detected Cuts and Reconnections – monthly average (1Q06 x 1Q07)
• 15.2 thousand clandestine connections regularized Cuts - decrease from 107 thousand to 106 thousand
Reconnections – increase from 70 thousand to 71
thousand
6
7. Investments
R$ million
illi
Investments 1Q07
(R$87.7 million)
404
378
49 19%
330 58 28%
33
6%
3 55 20% 18%
3 19
297
88
9%
17
C us t o m e r S e rv ic e a nd S ys t e m E xpa ns io n
71
M a int e na nc e
2004 2005 2006 1Q 0 7 Lo s s R e c o v e ry
Inf o rm a t io n T e c hno lo gy
C a pe x S e lf F ina nc e d
O t he rs
S e lf F ina nc e d
7
8. Results
R$ million
illi
Gross Revenue Operating Expenses
+3.0% -6.4%
6 4%
2,947.4 -2.9%
2,679.1 2,759.8 2,759.8 +5.0%
1,188.0 1,406.0
1,032.4
1 032 4 1,083.2
, 1,083.2
, 1,364.9
, 1,364.9
1,299.3
1 299 3
941.1 1,042.7 1,034.4 1,042.7
1,646.7 1,676.6
1 676 6 1,759.4
1 759 4 1,676.6
1 676 6
358.2 322.3 371.7 322.3
1Q06 1Q07 4Q06 1Q07 1Q06 1Q07 4Q06 1Q07
Net Revenue Deduction of Operating Revenue Operating Expenses Electricity + Transport
• Increase of 3.0% in relation to 1Q06: • Increase of 10.8% in non-manageable expenses in relation to
• Tariff adjustment of 11.45% applied since July 4th, 2006 1Q06:
• Increase of 2.7% in the total market (captive + free • Increase of R$ 140.0 million in energy purchase, due to the
consumers) readjustments of contracts with Tietê (0.9%) since July,
2006; Itaipu (10.3%) and Auctions (12.1%) since January,
2007
• Reduction of 10.0% in manageable expenses in relation to
1Q06:
• Reduction of 22.5% in Other Expenses and reduction of
53.2% in pension expenses 8
9. EBITDA
R$ million
illi
1Q06 x 1Q07 4Q06 x 1Q07
EBITDA 423.8 391.0 433.1 391.0
RTE 81.3 82.1 83.4 82.1
Pension Fund 60.5 26.7 60.4 26.7
Provision - RTE 16.8 5.3 1.5 5.3
ADJUSTED EBITDA 582.4 505.1 578.4 505.1
ADJUSTED EBITDA
MARGIN 35.4% 30.1%
30 1% 32.9%
32 9% 30.1%
30 1%
Reduction of 13.3% Reduction of 12.7%
9
10. Results
R$ million
illi
Financial Result Net Profit
165.6 165.6
1Q06 1Q07 4Q06 1Q07 +67.2%
+560.1%
+560 1% 99.0
(25.3) (25.3)
(41.5)
-38.9%
-79.2% 25.1
(121.7) 1Q06 1Q07 4Q06 1Q07
Improvement of the financial result due to: • Net Margin of 9.9% in 1Q07
• The decrease of 41.2% in financial expenses: • Finalized in 2006, the recognition in the income
statement of the actuarial liability with the Pension Fund,
• Reduction of the average cost of the debt
which stemmed for a gross annual expense of R$ 486.3
g p $
• Reduction of 68.6% in Swap expenses, due to the million, recurrent between 2002 and 2006.
R$ 152.6 million decrease of foreign currency debt
• Credits of R$ 21.7 million of IPTU recognized in
CETEMEQ
CETEMEQ´s agreement (
t (non-recurrent event)
t t)
10
11. Consolidated Debt
R$ million
illi
Short Term x Long Term Gross Debt – 1Q07
-25.0%
-9 6%
9.6%
IGP-DI
IGP DI
4,830 4,774 50.0%
4,606 4,411 4,606
21% 20% 27% 20%
3,658 Fixed Rate
3,306 3,306
lion
11.5%
R$ mill
Libor
79% 80% 80% CDI/Selic 1.6%
73% 36.8%
• Pension Fund - R$ 2,394 million
4Q06 1Q07 1Q06 1Q07 • Private Creditors - R$ 1,994 million
• BNDES - R$ 218 million
LT ST Net Debt
Debt Highlights – last 12 months Average Cost and Average Life
5.44 5.48 5.46
• Gross Debt: reduction of 3.5% (R$ 168.5 million) 110.00% 104.28% 102.63% 5
101.18% 97.27%
91.61%
• Net Debt: reduction of 25.0% (R$ 1,1 billion) 90.00%
% 4
70.00% 3.81 3.90
3
• Foreign Currency: 1.6% of total
50.00% 2
• Amendment of CCB (R$ 300 million) – May, 2007:
30.00% 1
• Reduction of average cost from CDI + 1.82% to CDI 10.00% 0
+ 1.20% 1Q06 2Q06 3Q06 4Q06 1Q07
• Increase of average life from 3.5 to 5.5 years Avg. Cost - % CDI* p.a. Avg. Life - years 11
CDI index at the end of the period
12. Managerial Cash Flow
R$ million
illi
R$ million 1Q06 2Q06 3Q06 4Q06 1Q07
Initial Cash 492 358 619 767 1,166
Operating Cash Generation 687 653 725 741 634
Investments (
(101)
) ( )
(88) ( )
(75) ( )
(85) ( )
(95)
Net Financial Expenses (194) (85) (176) (91) (187)
Net Amortization (245) (45) (158) (111) (71)
p
Pension Fund Expenses (
(134)
) (
(108)
) ( )
(85) ( )
(55) ( )
(48)
Income Tax (147) (67) (83) - (97)
Free Cash Flow (133) 261 148 399 135
Final Cash 358 619 767 1,166
1 166 1,301
1 301
• Operating Cash Flow: payment of R$ 89.7 million to CTEEP, according to the agreement to end the litigation on the
CETEMEQ property
• Net Financial Expenses: semi-annual payments of interest on the 8th debenture issuance (R$ 63.7 million) and Real-
denominated bonds (R$ 45.3 million)
• Pension Fund Expenses: Lower expenses on the pension fund, due to the renegotiation of the debt contracts with
p p p , g
FCESP
12
13. Conclusion
• Net Profit of R$ 165.6 million in 1Q07, R$ 140.5 million higher than the net profit in
1Q06
• R d ti
Reduction of 25 0% i consolidated net d bt i th l t 12 months
f 25.0% in lid t d t debt in the last th
• Increase of total debt’s average life from 3 7 to 5 5 years
debt s 3.7 5.5
• Ratings increased by S&P in national scale from A- to A
A
• Dividends payment resumed on May 3rd, 2007 - R$ 130.4 million relative to FY 2006
earnings
13
15. Highlights
Hi hli ht Debt Profile
D bt P fil
Operating Performance Cash Flow
Capex Conclusion
Financial Performance
15
16. Highlights – 1Q07
Increase of 15.1% in energy generated
EBITDA of R$ 287.2 million, 4.9% higher than 1Q06
Net Income of R$ 160.5 million, an increase of 5.0% in
1Q07 comparison with 1Q06
Payment of R$ 160.5 million in dividends, which
corresponds to 100% of the net earnings obtained in
p g
Subsequent 1Q07:
- R$ 1.61 per 1,000 common shares
Events
- R$ 1.77 per 1,000 preferred shares
16
17. Energy Balance – 1Q07
Generation – MW average Billed Energy - GWh
4,093
146%
3,557 15 %
315
115%
109% 107% 112% 177
98% 978
625
81%
1,895
1,392 1,363 1,467 1,424 2,755 2,800
1,258
1,040
1 040
2001 2002 2003 2004 2005 2006 1T07 1Q06 1Q07
Generation - MW Average Generation / Assured Energy Eletropaulo MRE CCEE/Losses
Increase of 15.1% in energy generated Eletropaulo t iff – R$ 133 87/MWh
El t l tariff 133.87/MWh
Generation was 45.6% above the assured energy MRE tariff – R$ 7.47/MWh
(1,275 MW) CCEE tariff * – R$ 19.27/MWh
Growth of 61 2% in volume sold to CCEE/MRE
61.2%
* 1Q07 average
17
18. CAPEX
Capex – 1Q07: R$ 10.2 million Capex – 1Q07
The main investments made in 1Q07 refer to capacity p y
restoration, upgrade in equipments and reforestation. 3.1% 18.3%
51.3%
Forecasted Capex - 2007: R$ 75.5 million:
25.6%
R$ 22.4 million: Construction of three small hydropower
1.8%
plants located in the interior of São Paulo State. Together,
they will boast an installed capacity of 8MW.
Equip. Hidroway PCH IT Environment
R$ 36 6 million: Restoration and upgrading of the plants
36.6
R$ 11.7 million: Environment
R$ 4.8 million: SAP Capex – R$ million
75.5
Investment in Small Hydropower Plants
46.5
Acquisition of License to build three small hydropower plants
in the S
State of Rio de Janeiro, with a total installed capacity of
f f 27.5
21.9
52MW and average 28.97MW of assured energy, approved by 12.4 10.2
ANEEL – forecasted investment of R$ 225 million in 2 years.
2003 2004 2005 2006 1T07 2007e
18
19. Expansion Requirement
Requirement: increase installed capacity by at least 15% (400 MW), until December, 2007:
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:
State of São Paulo – no hydro resource available 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:
suspension of the obligation to increase the capacity for 5 years. During this period AES Tietê
would analyze freely any project for investment, regardless of the location
y y yp j , g
after the suspension period, in the case that the restriction continues, a AES Tietê would be
released of this obligation
no amount or new obligation would be paid in compensation
The São Paulo State Government and ANEEL are evaluating the following alternatives:
extension of the term for 2 years
suspension of the obligation of expansion, once the non-feasibility of this execution has been
proven
Neither ANEEL nor the São Paulo State Government have sent a formal reply to AES Tietê with regard
to this issue so far 19
20. Results
R$ million
Net Revenue Costs and Operational Expenses
94 89 89
-5% 85
13 8 5% 8
3% 4% 5 4 8 4
349 360 346 360 5
13 16 10 16
20 17 14 17
24 27 32 27
18 16 16 16
1Q06 1Q07 4Q06 1Q07 1Q06 1Q07 4Q06 1Q07
Power Purchase Royalties Others*
Operational Expenses Provisions Depreciation
1Q07 x 1Q06 1Q07 x 1Q06
Net Revenues in 1Q07 up 3% from 1Q06 : Reduction of 5.3% in costs and operational
expenses mainly due to higher expenses in 1Q06 :
(i) 0.9% price adjustment granted in July06 for the
energy sold under the bilateral contract (i) Recognition of an actuarial loss of R$ 3.3
million.
(ii) Increase of 16.7% in the revenues obtained from
energy marketed through the MRE/CCEE (ii) Increase in R&D expenses due to the
change quotes from 0.25% to 1% and the impact of
(iii) greater volume of energy demanded by
a change in the rules in the accounting criteria.
Eletropaulo in 1Q07
20
*Others: R&D, fiscalization fees, insurance, hydro way and others
21. Results
R$ million
EBITDA
78.4%
78 4% 79.8%
79 8% 80.2%
80 2% 79.8%
79 8%
3%
274
5% 287 287
278
1Q06 1Q07 4Q06 1Q07
1Q07 x 1Q06
Price readjustment of bilateral contract in July, 2006 ( + 0.9% )
16.7% increase obtained from energy marketed through MRE/CCEE
Lower costs and operational expenses
1Q07 x 4Q06
Revenues obtained from energy marketed through MRE/CCEE
R bt i d f k t d th h
Greater volume of energy sold through bilateral contract
21
22. Results
R$ million
Financial Results Net Income
1Q06 1Q07 4Q06 1Q07 43.8% 44.6%
47.7%
44.6%
5% 2%
(23) 24% 153 161 165 161
(29) 16% (29)
(35)
1Q06 1Q07 4Q06 1Q07
Net Income Net Margin
1Q07 x 1Q06 1Q07 x 1Q06
Financial Income: decreased by 6.8% mainly Increase of 0.8 percentage points in the net
due to the decline in average CDI rates from margin.
17.2% in 1Q06 to 12.9% in 1Q07.
Payment of R$ 160.5 million in dividends,
$
Financial Expenses: increase of 8.9% which corresponds to 100% of the net
basically due to an growth of IGP-M from 0.7% earnings obtained in 1Q07.
to 1.1% .
22
23. Debt
Cash availability = R$ 686 million (March, 2007)
in R$ million
Amount Ceditor Maturity Cost Collateral
Montante Vencimento Custo Garantia
1,339.9 Eletrobras May, 2013 IGP-M + 10% p.a. Receivables
11.9 FunCesp III Sep, 2027 IGP-DI + 6% p.a. Receivables
Net Debt – R$ billion
$
3.2x
2.0x
1.4 1.4x
1.3
13 0.7x 0.6x
1.1 0.6x
0.7 0.7 0.7
2002 2003 2004 2005 2006 1Q07
Net Debt Net Debt / EBITDA
23
24. Cash Flow
CASH FLOW - R$ million 1Q06 2Q06 3Q06 4Q06 1Q07
CASH BALANCE - BEGINNING OF PERIOD 797.9 851.7 777.2 673.6 691.0
Operating cash flow 269.8 308.4 289.9 279.6 287.9
Investments ( )
(4.5) ( )
(6.3) ( )
(7.7) (
(23.6)) ( )
(9.7)
Net Financial Expenses (21.2) (17.7) (14.6) (18.8) (16.1)
Net Amortizations (41.4) (43.7) (50.1) (44.8) (46.4)
Income Tax (144.7) (20.2) (15.9) (31.7) (220.1)
q y
Dividends and Interest on Equity ( )
(4.1) (294.9)
( ) (305.3)
( ) (143.4)
( ) -
FREE CASH FLOW 53.8 (74.4) (103.6) 17.4 (4.4)
CASH BALANCE - END OF PERIOD 851.7 777.2 673.6 691.0 686.6
The free cash flow in 1Q07 was negative in R$ 4 million, mainly due to the
payment of R$ 220 million of Income Tax and Social Contribution.
Investments 4Q06 – Payment on acquisition of licenses 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.
24
25. Conclusion
Generation was 46% higher than assured energy
EBITDA of R$ 287 2 million in 1Q07 4 9% higher than the same period in
287.2 1Q07, 4.9%
2006. EBITDA margin of 79.8% compared to 78.4% in 1Q06.
Payment of R$ 160.5 million in dividends, which corresponds to 100% of
g
1T07 net earnings.
AES Tietê has been analyzing new opportunities of investments and
expansion,
expansion aiming at increasing the Company’s results
25
26. 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 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
market,
subject to change.
May 14th, 2007
