2. Highlights - 2005
• Receiving of the third tranche of the Rationing Loan amounting R$ 243.3 million
(01/11/2005)
1Tri05
• Ratings increased - 06/14/2005 - Fitch (local credit from “BB” to “BB+”)
• Issuance of R$ 474.0 million in bonds denominated in Reais (06/28/2005)
2Tri05 • Completion of Tariff Review 2003 – Additional value of R$ 106.9 million
• Tariff Adjustment – 2.12% (07/04/2005)
• MGSP Provision of R$ 346.4 million
• Payment of AES Tietê PIS/Cofins taxes increase – R$ 43.7 million
3Tri05 • 8th issuance of debentures – R$ 800.0 million (09/27/2005)
• Corporate Sustainability Index (ISE) – 12/01/2005
• Ratings increased - 12/13/2005 - S&P and Fitch (local credit from “BB+” to
“BBB”)
4Tri05 • 9th issuance of debentures – R$ 250.0 million (12/26/2005)
• Loss of R$ 184,4 million in 2005 (extraordinary events)
2
3. Consumption in GWh
In 2005, AES Eletropaulo’s total market grew 3.3%
5.4% 3.3%
-3.2%
36,499
11,25811.863 1.7%
32,668
35,343
-12.6% 31,634
8,670 9,436 9,593
7,580 81.9%
-21.4% 4,865
3,304 2,675
2,598
er
SD
l
l
al
ia
ia
th
ci
r
nt
TU
Market Billed Market Billed
st
O
er
e
du
id
m
with TUSD
es
In
om
R
C
2004 2005 2004 2005
NOTE: Charts do not consider own consumption
3
5. Operating
Loss and Collective Rate - 2005
Loss evolution
13.23% 13.53%
12.91%
7.63% 7.93%
7.31%
2003 2004 2005
Total Commercial
Collective Rate
99.03%
98.48%
97.45%
2003 2004 2005
5
6. Capex 2005
R$ million
Capex - 2005
Customer Service and
153.9
System Expansion
49
Maintenance 33.5
33
Loss Recovery 21.0
Personnel 77.4
32 355 Information Tecnology 39.0
297 300 Others 30.0
186 Total 354.8
Self Financed 48.8
Total Recorded 403.6
2003 2004 2005 2006(e)
Capex Self Financed
6
7. Results 2005
Average Tariff Adjustment of 2.12%
R$ million 2004 2005 2005 X 2004
Completion of Tariff Review 2003 (R$ 106.9 million)
Increase of 3.3% in total market (captive + free consumers)
Net Revenue 7,394.1 8,296.8 12.2%
Reversal of allowances in the amount of R$ 72 million in 2Q05
due to Pis/Pasep statute of limitations
Operating
Expenses (6,340.5) (7,476.4) 17.9% Extraordinary allowances in the amount of R$ 523 million
(MGSP and RTE)
Increase of 4% in energy purchase expenses
EBITDA 1,322.3 1,116.8 15.5% Increase of 32% and 29% in CCC and CDE expenses
respectively
Energy Efficiency Program (PEE) – aditional expense of R$ 54
million
Adjusted EBITDA 1,722.7 1,933.4 12.2%
Margin 23.3% 23.3%
Aditional revenue of R$ 121.8 million in 4Q05 due to alteration
in RTE remuneration rules
Financial Income (504.0) (368.2) 26.9% Reversal of allowances in the amount of R$ 98 million in 2Q05
(Expenses)* due to Pis/Pasep statute of limitations
Extraordinary Items (341.0) (340.9) N.A.
Net of Tax Effects
Net Income (Loss) 5.6 (184.4) N.A.
(*) Considering consolidated results
7
9. Adjusted EBITDA
R$ million
4Q05 results accounted a profit of R$ 19.6 million, versus a loss of R$ 324.1 million in 3Q05 and a profit of R$
17.5 million in 4Q04
3rd quarter 2005 4th quarter 2005
R$ (27.5) EBITDA R$ 290.0 EBITDA
R$ 85.3 RTE R$ 83.6 RTE
Debt Confession IIa Debt Confession IIa
R$ 12.1 R$ 5.7 (CESP Foundation)
(CESP Foundation)
R$ 330.5 Provision - MGSP R$ 176.9 Provision - RTE
R$ 400.3 Adjusted EBITDA R$ 556.2 Adjusted EBITDA
Increase 38.9% 9
10. Impacts on results – 2005
Impact Net of Taxes
Effects (34%)
Provision – Agreement signed with MGSP R$ (228.3) million
Increase PIS/COFINS’s taxes – Agreement with AES Tietê R$ (28.8) million
Extraordinary Items (CVM 371)* R$ (340.1) million
RTE Provision – Recovery term R$ (36.4) million
Change on calculated rules – R&D and Energy Efficiency R$ (53.8) million
Provisions – Other Municipal Governments R$ (46.1) million
Differed Amortization – Debt downpayment R$ (28.9) million
Others R$ (31.5) million
Total Impacts on Eletropaulo’s Results R$ (793.9) million
*2006 will be the last year which Eletropaulo’s results will be affected by the remaining recognition of
extraordinary items of approximately R$340 million – off balance debt with the Pension Fund
10
12. 2005 Debt Issuances
Financial Restructuring
BONDS (June 2005) Downpayments made to banks:
• Principal: R$ 474 million
• 3rd Tranche of Rationing Loan: 76% R$184,472,275
• Tenor: 5 years
• Interest rate: 19.125% p.a. • Bonds: 50% R$237,030,000
• Interest and Amortization:
• semiannual interes, bullet principal • Debentures 8th: 90% R$720,000,000
DEBENTURES 8th issuance (September 2005) • Debentures 9 : 90% R$225,000,000
th
• Principal: R$ 800 million • Cash sweep R$96,437,604
• Tenor: 5 years
Total R$ 1,462,939,879
• Interest rate: CDI +2.90% p.a.
• Interest and Amortization:
• Semiannual interest, Annual Principal Avg Cost and Duration - Total Debt
• Grace period: 23 months
DEBENTURES 9th issuance (December 2005) 105.6%
2.86 years
• Principal: R$ 250 million
100.7%
• Tenor: 8 years 3.69 years
• Interest rate: CDI + 2.5% p.a.
Dec-2004 Dec-2005
• Interest and Amortization:
• Semiannual interest, Annual Principal
• Grace period: 71 months 12
13. Conclusion
• The loss of R$ 184.4 million in 2005 is due mainly to extraordinary events
• Bonds and Debentures issuances in 2005 resulted:
• In the reduction of Total Debt average cost from 105.6% of CDI to 100.7% of CDI
• In the increase of Total Debt average life from 2.86 years to 3.69 years
• In the increase of Eletropaulo’s ratings:
• Local Credit: BB to BBB
• Foreign Credit: B to B+
• Operating Highlights: Loss reduction and better collective rate in 2005
• Perspectives:
• Results:
• 2006: the 2005 allowances won’t be recurrent
• 2007: Eletropaulo’s results won’t be affected by the remaining recognition with
pension fund obligations of approximately R$340 million
• Financial Aspects:
• Substitution of the outstanding private creditors’ debt for new loans with more
attractive terms
• Eletropaulo expects to benefit with the decreasing trend of Selic Rate (42.3% of
total debt is accrued by Selic)
13
