Apresentação institucional 4_q11_en_cvm
51
1 Institutional March, 2012
Transcript of Apresentação institucional 4_q11_en_cvm
1
Institutional
March, 2012
2
AES Brasil Group
• Presence in Brazil since 1997
• Comprised of four companies in the sectors of
energy generation and distribution
• 7.4 thousand AES Brasil People
• Investments 1998-2011: R$ 8.1 billion
• Good corporate governance practices
• Sustainable practices in businesses
• Safety as a main value
• Strong cash generation capacity
• 25% of minimum pay-out according to bylaws
• Differentiated practice of dividend distribution
since 2006:
– AES Tietê: 100% of net income on quarterly
basis
– AES Eletropaulo: distribution above the
minimum required (25% of net income) on
semi-annual basis
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(AES Eletropaulo) (AES Sul)
(AES Eletropaulo)
(AES Eletropaulo)
(AES Brasil)
(AES Tietê)
(AES Tietê)
(AES Eletropaulo)
(AES Tietê)
(AES Tietê) (AES Eletropaulo)
(AES Brasil)
AES Brasil widely recognized in 2009-2011
Quality and safety Management excellence Environmental concern
(AES Tietê) (AES Eletropaulo)
(AES Tietê)
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AES
Infoenergy
AES
Uruguaiana
AES
Eletropaulo
AES
Tietê
AES Corp BNDES
C = Common Shares
P = Preferred Shares
T = Total
Shareholding Structure
C 99.99%
T 99.99%
C 76.45%
P 7.38%
T 34.87%
Cia. Brasiliana
de Energia
C 50.00% - 1 share
P 100%
T 53.85%
C 50.00% + 1 share
P 0.00%
T 46.15%
C 71.35%
P 32.34%
T 52.55%
C 99.00%
T 99.00%
AES Sul
T 99.70%
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24.2% 28.3% 39.5% 8.0%
8.5% 56.2% 19.2% 16.1%
Others² Free Float ¹ ¹
1 - Parent companies, AES Corp and BNDES, have similar voting capital on each of the Companies: approx 38.2% on AES Eletropaulo and 35.7% on
AES Tietê
2 - Includes Federal Government and Eletrobrás shares in AES Eletropaulo and AES Tietê, respectively
3 - Base: 09/30/2011. Considers preferred shares for AES Eletropaulo and preferred and common shares for AES Tietê
R$ 8.5 bi
R$ 4.8 bi
Market Cap³
Listed Companies Shareholding Composition
6 CEMIG AES BRASIL NEOENERGIA CPFL TRACTEBEL COPEL EDP LIGHT DUKE CESP
2.3 2.2
1.8
1.6
1.2
1.0
0.6 0.6
0.20.1
AES Brasil is the second largest group in
electric sector Ebitda1 – 2010 (R$ Billion)
Net Income1 – 2010 (R$ Billion)
1 – excluding Eletrobrás Source: Companies’ financial reports
CEMIG AES BRASIL CPFL NEOENERGIA TRACTEBEL CESP EDP LIGHT COPEL DUKE
4.54.2
3.43.0
2.6
2.01.6
1.61.5
0.6
TRACTEBEL 6,1%
AES TIETÊ 2,3%
CPFL2,4%
DUKE1,9%
EDP1,6%
NEOENERGIA1,2%
ENDESA0,8%
LIGHT0,8%
CHESF 9%
FURNAS 8%
ELETRONORTE 8%
ITAIPU 6%
ELETRONUCLEAR3%
CGTEE1%
ELETROSUL0,4%
CESP 6%
CEMIG6%
PETROBRÁS 5%
COPEL4%
DEMAIS27%
7 1- Sources: ANEEL – BIG (March, 2012) and Companies websites 2- Source: Merrill Lynch
3 – Eletrobrás, totaling 35%
³
AES Tietê is the 3rd largest among private
generation companies and 10th largest
overall
Approximately 78% of country’s
generation installed capacity is state-
owned2
There are three mega hydropower plants
under construction in the North region of
Brazil with 18 GW in installed capacity
– Santo Antonio and Jirau (Madeira River): 7 GW
– Belo Monte (Xingu River): 11 GW
Total Installed Capacity: 117 GW
Main privately held Companies
³
³
³
³
³
³
AES Tietê is an important player among private
energy generators Generation Installed Capacity (MW) - 20121
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AES Brasil is the largest distribution group
in Brazil Consumption (GWh) - 2010
Consumers – Dec/2010
• 63 distribution companies in Brazil
distributing 419 TWh
• AES Brasil is the largest electricity
distribution group in Brazil:
– AES Eletropaulo: 43 TWh distributed,
representing 10.3% of the Brazilian
market
– AES Sul: 9 TWh distributed,
representing 2.2% of the Brazilian
market
Distribution companies’ operations are
restricted to their concession areas
Acquisitions must be only performed by
the holdings of economic groups
13%
12%
10%
7%
6%6%
6%
40%
12%
12%
12%
16%7%
7%
5%
30%
AES Brasil
CPFL Energia
CEMIG
Neoenergia
Copel
Light
EDP
Outros
AES Brasil
CPFL Energia
Cemig
Neo Energia
Copel
Light
EDP
Outros
Energy Sector in Brazil
¹ Interconected National System
² Small Hydro Power Plants Sources: EPE, Aneel, ONS and Merrill Lynch
• 13 groups controlling 76% of
total installed capacity
• 22% private sector
• 1,862 power plants
• 117 GW of installed capacity
• 73% hydroelectric
• 17% thermoelectric
• 5% biomass
• 4% SHPP2
• 1% Wind
• Contracting environment –
free and regulated markets
• 68 companies
• 68% private sector
• High voltage transmission
(>230 kV)
• 98.648 km in extension
lines (SIN¹)
• Regulated public service
with free access
• Regulated tariff (annually
adjusted by inflation)
• 63 companies
• 430 TWh of energy
distributed in 2011
• 70 million consumers
• 67% private sector
• Annual tariff adjustment
• Tariff reset every four or
five years
• Regulated public service
• Regulated contracting
environment
• Consumption of 113 TWh
(26% of Brazilian total market)
• Conventional sources:
above 3000 kW
• Alternative sources:
between 500 kW e 3000 kW
• Large consumers can
purchase energy directly
from generators
• Free contracting
environment
Generation Transmission Distribution Free Clients
Energy Sector in Brazil: business segments
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Auctions: New Energy
and Existing Energy Bilateral contracts (PPAs1)
• Main auctions (reverse auctions):
– New Energy (A-5): Delivery in 5 years, 15-30 years regulated PPA1
– New Energy (A-3): Delivery in 3 years, 15-30 years regulated PPA1
– Existing Energy (A-1): Delivery in 1 year, 5-15 years regulated PPA1
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Energy sector in Brazil:
contracting environment
Generators, Independent Power Producers
(IPPs), Trading companies and Auto producers
Free clients Distribution companies
Generators and Independent
Power Producers (IPPs)
Regulated Market Free Market
1 – Power Purchase Agreement
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
349369
380 376
408423
444469
493515
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4.0% p.a.
5.0% p.a.
EPE’s1 Assumptions:
• Latest EPE’s estimates considers an
economic activity slowdown in Brazil
(industrial stagnation and higher
inflation).
• For the next years, the good performance
of domestic market and the perspectives
of higher investments are factors
indicating that the Brazilian economy will
recover the growth path observed before
the global crisis.
• Brazil will also benefit from the growth of
emerging markets, with impact on
exports of primary products.
3.6%
Macroeconomic Scenario
Brazilian Consumption Evolution (TWh)
Energy sector in Brazil:
demand perspectives
1 - Source: EPE (Energetic Research Company) / ONS (National System Operator) – Second Review – september/11
2004-2008 2010 2011 2012-2015
3.6 7.2 4.0 5.0
GDP - Annual growth (%)
Total installed capacity is expected to reach 171 GW by 2020
Brazilian energy matrix will present higher diversification, but in the next 10 years hydropower plants will
continue to prevail
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Hydro: 67%
SHPP: 4%Natural gas: 7%
Biomass: 5%
Oil: 5%
Nuclear: 2%Coal: 2%Diesel: 1%
Wind: 7%
Steam: 0%
Others: 17%
1- Source: EPE (Energetic Research Company), Ten-year Energy Plan 2020, May/2011 2 - Small Hydro Power Plant
2020: 171 GW 2011: 115 GW
2
2
Energy sector in Brazil:
supply perspectives Installed Energy Capacity in Brazil1
Hydro: 73%
SHPP: 4%
Natural gas: 8%
Biomass: 5%
Oil: 3%
Nuclear: 2%
Coal: 2%Diesel: 1%Wind: 1%Steam: 1%
Others: 10%
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Regulatory
Opex
(PMSO)
Investment
Remuneration
Depreciation
Energy
Purchase
Transmission
Sector Charges
Tariff Reset and Readjustment
• Tariff Reset is applied each 4 years for AES Eletropaulo
− Base date: Jul/2011
− Parcel A: costs are largely passed through to the tariff
− Parcel B: costs are set by ANEEL
• Tariff Readjustment: annually
− Parcel A : costs are largely passed through to the tariff
− Parcel B: cost are adjusted by IGPM +/- X(1) Factor
Remuneration
Asset Base
X Depreciation
X WACC
Regulatory
Ebitda
Parcel A - Non-Manageable Costs
Parcel B - Manageable Costs
• Remuneration Asset Base:
– Prudent investments used to calculate
the investment remuneration (applying
WACC) and depreciation
• Regulatory Opex:
– Efficient operating cost determined by
ANEEL (National Electricity Agency)
• Parcel A Costs
− Non-manageable costs that are largely
passed through to the tariff
− Incentives to reduces costs
1 – X Factor: index that captures productivity gains
Energy sector in Brazil:
regulatory methodology
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3rd Cycle of Tariff Reset – X Factor
Energy sector in Brazil:
regulatory methodology
X FACTOR
= Pd
Q
T
+ +
Distribution
productivity Quality of service
Operational expenses
trajectory
To capture
productivity gains
with distribution
To stimulate the
improvement of the
service quality
To implement operational
expenses trajectory during
the tariff cycle
Defined at tariff reset,
considering the
average productivity of
sector adjusted by the
market growth and
variation of consumer
units of the distributor
since last reset
Defined at each tariff
readjustement,
according to the
variation of SAIDI and
SAIFI and comparative
performance of discos
Defined at tariff reset,
considering the
expenses established by
reference company and
benchmarking
methodologies
DEFINITION
OBJECTIVE
APLICATION
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AES Tietê Overview
17 hydroelectric plants operating within the states of
São Paulo and Minas Gerais
30-year concession valid until 2029; renewable for
another 30 years
Installed capacity of 2,659 MW, with physical guarantee1
of 1,280 MW average
Almost all the amount of energy that AES Tietê can sell
in the long term is contracted to AES Eletropaulo until
the end of 2015
AES Tietê can invest in generation, its main activity, and
operate in energy trading
355 employees
Generation facilities
1 - Amount of energy allowed to be long term contracted
Generated energy shows high
operational availability
Generated energy (MW avarage1)
1 – Generated energy divided by the amount of hours * Caconde, Limoeiro, Mogi and SHPPs
Generated energy by power plant (MW avarage1)
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118%
130%
125%124%
Generation/Physical guarantee
2008 2009 2010 2011
1,512
1,665
1,599 1,582
Generation - Mw avg
58%
6%
5%
3%
6%
8%
10%4% Água Vermelha
Bariri
Barra Bonita
Euclides da Cunha
Ibitinga
Nova Avanhandava
Promissão
Other Power Plants*
94%
3%2%1%
A significant amount of billed energy and net
revenues comes from the bilateral contract with
AES Eletropaulo
Energy Billed (GWh)
1 – Leap Year 2 – Energy Reallocation Mechanism
Net Revenues (%)
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2008 2009 2010 9M10 9M11
11,138 11,108 11,108
8,578 8,045
1,680 2,331 1,980
1,554 1,535
331 1,150 1,340
1,135 1,188
117 301
215 346
AES Eletropaulo MRE Spot Market Other bilateral contracts2
2008 2009 2010 2011
11,138 11,108 11,108 11,108
1,680 2,331 1,980 1,942
331 1,150 1,340 1,519
117 301 55413,148 14,706 14,729 15,122
1
94%
3%2%
1%
AES Eletropaulo
Other bilateral contracts
Spot Market
MRE
2008 2009 2010 2011 2012(e)
39 4370
156174
20 13
12
19
59 56
82
175
Investments New SHPPs*
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Investments (R$ million) 2011 Investments
Investments in the modernization of Nova
Avanhandava, Ibitinga and Caconde
power plants
*Small Hydro Power Plants
85%
11%4%
Equipment and Modernization
New SHPPs*
IT Projects
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Growth opportunities
Perspectives
• Project features
- Combined cycle using natural gas
- Estimated investment of R$ 1.1 billion
- Natural gas consumption: 2.5 million m3/day
- 550 MW of installed capacity
• Next events
• Updates
- Environmental license obtained on October, 20th 2011
(valid for 5 years)
- Gas unavailability for A-5 in 2011 and A-3 Energy
Auction in 2012
- Get the installation license
- Obtain gas supply in order to:
- Participate in the next auctions; or
- Evaluate energy offering in the free market
2008 2009 2010 2011
1,605 1,6701,754
1,886
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Ebitda (R$ million) Net Revenue (R$ million)
Financial highlights*
(*) 2009 and 2010 numbers in IFRS
78% 75% 75% 78%
Ebitda Margin
2008 2009 2010 9M10 9M11
1,309 1,311
9
1,254 1,255 1,320 1,035 1,048
Recurring Non-recurring
(54)
2008 2009 2010 2011
1,309 1,311
9
1,254
1,255 1,320
1,466
Recurring Non-Recurring
Practice of total net income distribution on
quarterly basis*
Net Income and Dividend Pay-out1 (R$ million)
23
IFRS Effect
1 – Gross value
(*) 2009 and 2010 numbers in IFRS
Pay - out Yield Pref Recurring Non - recurring
12%11% 11%
2010
12% 11% 11% 11%
(36)(74) (78)
2008 2009 2010 2011
692 816 784 845
31
706 737
100%110%
117%109%
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Debt profile
Net Debt (R$ billion) Amortization Schedule – Principal (R$ million)
• December, 2011:
– Average debt cost in 2011 was 115% of CDI1 p.a. or 15% p.a.
– Average debt maturity of 2.6 years
– Net debt: R$ 0.5 billion
– Net debt/EBITDA: 0.3x
1 – Brazilian Interbank Interest Rate
2013 2014 2015
300 300 300
0.3x 0.3x 0.3x 0.3x
Net Debt / EBITDA
2008 2009 2010 2011
0.4 0.4 0.40.5
Dívida Líquida
25 1 – Index: 12/30/2010 = 100 2 – Total Shareholders’ Return
Capital Markets
• Market Cap4: R$ 8.5 billion
• BM&FBovespa: GETI3 (common shares) and GETI4 (preferred shares)
• ADRs negotiated in US OTC Market: AESAY (common shares) and AESYY
(preferred shares)
4 – Index: 12/31/11
Daily Avg. Volume (R$ thousand) AES Tietê X Ibovespa X IEE
3 – Electric Energy Index
60
80
100
120
140
Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11
20111
+24%+19%
+12%+10%
-19%
60
80
100
120
140
set/11 out/11 nov/11 dez/11
4T112
+19%+17%+14%+11%+8%
60
80
100
120
140
dez/10 fev/11 abr/11 jun/11 ago/11 out/11 dez/11
20111
IEE IBOVESPA GETI4 TSR GETI33
60
80
100
120
140
dez/10 fev/11 abr/11 jun/11 ago/11 out/11 dez/11
20111
IEE IBOVESPA GETI4 TSR GETI32 3 4
2008 2009 2010 2011
5,4688,086
9,683 9,537
2,692
2,101
4,239 3,3978,160
10,187
13,922 12,933
Common Série2
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AES Eletropaulo overview
Largest electricity distribution company in Latin America
Serving 24 municipalities in the São Paulo Metropolitan area
Concession contract valid until 2028; renewable for another 30
years
Concession area with the highest GDP in Brazil
45 thousand kilometers of lines and 6.3 million consumption
units in a concession area of 4,526 km2
Total distributed volume of 45 TWh in 2011
AES Eletropaulo, as a distribution company, can only invest in
assets within its concession area
5,668 employees
Concession Area
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Consumption evolution
Total Market1 (GWh) 2011 Consumption by Class (%)
36%
14%
18%
26%
6%
1 – Net of own consumption
2008 2009 2010 2011
33,860 34,436 35,434 36,817
7,383 6,8327,911
8,284
41,243 41,26943,345
45,102
Captive Market Free Clients
Brazil AES Eletropaulo
2636
17
28
43
26
14 9
Residential Commercial Industrial Others
-15%
-10%
-5%
0%
5%
10%
15%
Jul/07 Aug/08 Sep/09 Oct/10 Nov/11
Industrial Production of SP (% 12 months) Industrial (% 12 months)
Economic recovery Economic crisis
Industrial class
Industrial class X industrial production in São Paulo State
Consumption of industrial class by activity – AES Eletropaulo
• Industrial consumption is
influenced by manufacturing
industry performance in São Paulo
State
• Recent slowdown is influenced by
the decrease of industrial
production in 2011
• Moreover, the migration of clients
to other regions of São Paulo State
and of the country negatively
impacts this class Vehicles,
Chemical, Rubber, Plastic and Metal
products 50%
Other industries50%
29
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
258
220
192 199 203 207
213 219 223 228 229 234
- 9.4%
Residential class
Residential class X Average income in São Paulo Metropolitan Area
* 2 quarters of delay in relation to consumption
• Residential class is influenced by
income in São Paulo Metropolitan
Area
• Maintenance of the income
expansion trend in São Paulo
Metropolitan Area will sustain
growth of residential class
• Average annual growth (2003-
2011):
– total residential market: 5.5%
y.y.
– consumption per consumer:
2.1% y.y.
Consumption per consumer is
still 9.4% lower than in
the period before the rationing
30
Consumption per consumer (in kWh)
2,800
3,300
3,800
4,300
4,800
1,000
1,200
1,400
1,600
1,800
1Q06 3Q06 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11
Resid
en
tial
(GW
h)
Avera
ge I
nco
me R
$ -
SP
(q
-2*)
Avg Real Income R$ - SP q-2) Residential (GWh)
31
2008 2009 2010 2011 2012(e)
410478
654717
79447
37
2822
46
457516
682739
841
Capex Paid by Customers
Investments amounted
R$ 739 million in 2011
Investments Breakdown (R$ million) Investments 2011 (R$ million)
31
227
172
189 35
39
22
55
Maintenance
Client Service
System Expansion
Losses Recovery
IT
Paid by the Clients
Others
2008 2009 2010 2011
9.20 11.86 10.60
10.36
SAIDI (hours)
2008 2009 2010 2011
5.20 6.17 5.43 5.45
SAIFI (times)
8.41 7.87
7.39
6.93
SAIFI Aneel Reference
10.92 10.09
9.32 8.68
SAIDI Aneel Reference
32
SAIFI - System Average Interruption Frequency Index SAIDI - System Average Interruption Duration Index
SAIDI & SAIFI
8th 5th 7th 1st 7th 3rd
Sources: ANEEL, AES Eletropaulo and ABRADEE
ABRADEE ranking position among the 28 utilities with more than 500 thousand customers
► 2012 SAIDI ANEEL Reference: 8.67 hours ► 20112 SAIFI ANEEL Reference: 6.87 times
6th 4th
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Losses (%)
1 – Current technical losses used retroactively as a reference
Collection Rate (% over Gross Revenues)
Operational Indexes
From Jul/10 to Jun/11: 12.45% From Jul/09 to Jun/10: 12.32%
ANEEL References:
2008 2009 2010 2011
98.5101.1
102.4 102.1
2008 2009 2010 2011
6.5 6.5 6.5 6.5
5.1 5.3 4.4 4.0
11.6 11.810.9 10.5
Technical Losses¹ Commercial Losses
34
Ebitda (R$ million) Net Revenues (R$ million)
Financial Highlights*
(*) 2009 and 2010 numbers in IFRS
2008 2009 2010 2011
7,530
8,7869,697 9,836
2008 2009 2010 2011
1,607 1,4911,648 1,542
-197
339 372 89
87
426 933
1,696 1,775
2,413 2,848
Recurring
Regulatory assets and liabilities
Non-recurring
2008 2009 2010 2011
698 622761 680
160
236 241
329374
350 6521,027
1,156
1,348 1,572
Net Income - Ex-one offs, regulatory assets and liabilities
Regulatory assets and liabilities
One-offs
101.5% 93.4% 100.0%
54.4%
20.3% 20.4% 28.6%15.8%
Pay-out Yield PN
35 (*) 2009 and 2010 numbers in IFRS 1 – Gross amount
Net Income and Dividend Payout1 (R$ million)
Practice of dividend distribution
on semi-annual basis*
2012 2013 2014 2015 2016 2017 2018 2019 2020 -2028
281 299
527
223332
222
373
179
94 43
46
50
53
57
61
65
762
375 342
574
272
385
279
434
65
941
Local Currency (ex FCesp) Fcesp
36
Amortization Schedule – Principal (R$ million)
1 – Brazilian Interbank Interest Rate 2 – Pension Fund
• December, 2011:
– Average debt cost in 2011 was 110% of CDI1 or 12.1% p.a.
– Average debt maturity of 6.7 years
– Net debt: R$ 2.3 billion
– Net debt/EBITDA of 0.8x adjusted with Pension Fund
Debt Profile
Net Debt (R$ billion)
²
2H11 2012 2013 2014 2015 2016 2017 2018 2019 -2028
200 281 301
531
225335
225375
180
4467 46
49
5256
60
64
867
244
347 347
580
278391
285
439
1,047
Local Currency (ex FCesp) Fcesp
2.4x2.0x
1.6x1.3x
Gross Debt/Ebitda Adjusted with Fcesp
2008 2009 2010 2011
2.5
2.7
2.4 2.3
Net Debt (R$ billion)
1.5x1.4x
0.9x0.8x
Net Debt/Ebitda Adjusted with Fcesp
37
Average Daily Volume (R$ thousand)
Capital Markets AES Eletropaulo X Ibovespa X IEE
• Market cap4: U$ 3.6 billion
• BM&FBOVESPA: ELPL3 (common shares) and ELPL4 (preferred shares)
• ADRs at US OTC Market: EPUMY (preferred shares)
1 – Index: 12/29/2011 = 100 2 – Electric Energy Index
3 – Total Shareholders’ Return 4 - Index: 02/29/12. Calculation includes only preferred shares.
95
100
105
110
115
120
125
Dec-11 Jan-12 Feb-12
YTD 1
Ibovespa IEE² AES Eletropaulo PN AES Eletropaulo TSR³
+ 8%
+20%
+ 7%
+ 6%
2009 2010 2011 YTD Feb/12
21,960
24,496
26,897 26,044
Sustainability and
Social Responsibility
39
Commitment with sustainability
Our Commitment with Sustainability
We act as a transformer agent understanding, meeting and anticipating our customers electric power needs with safe and
innovative solutions for the economic, environmental and social development of the communities in which we are present.
Commitment with sustainability
Transversal
Themes
40
To learn more access: www.aesbrasilsustentabilidade.com.br
TRANSVERSAL THEMES
Education for sustainability Stakeholders active
participation
Communication Knowledge Information
EFFICIENCY IN THE USE OF
RESOURCES
... means allocating them in such a manner
that balanced and perennial results are
ensured for all stakeholders, abiding by the values practiced by
the company
SAFETY
... means an attitude of protection of our
coworkers, suppliers and of the population.
INNOVATION IN PRODUCTS
AND SERVICES
... means providing an environment and
culture that inspire solutions that improve people’s life, ensuring quality and excellence
in the services rendered to the customer.
SUSTAINABLE ENERGY
GENERATION
... means using economic, social and
environmental resources in a balanced fashion, preserving the
present time and ensuring the future
DEVELOPMENT & VALUATION
OF COWORKERS, SUPPLIERS
AND COMMUNITIES
...means knowing, involving in a
transparent form and positively influencing
our coworkers, suppliers and
communities to build a collective agenda that
generates value for everyone
“Casa de Cultura e Cidadania” Project
Offers activities in culture and sports, courses, workshops and
lectures. Directly benefits approximately 5.6 thousand children
and teenagers and, indirectly, 290 thousand people in 7 units
located within AES Brazil companies’ area of operation.
Social Responsibility: Main Projects
“Centros Educacionais Luz e Lápis” Project
Two units in São Paulo attending 320 children from 1 to 6 years old, in social
vulnerability.
Children education and development
Development and transformation of communities
Education, culture
and sport
41
Converting Consumers to Clients
A project developed to work on electrical network regularization.
Since 2004, more than 500 thousand families in low income
communities were benefited from better energy supply conditions
and social inclusion.
Social Responsibility: Main Projects
42
“AES Eletropaulo nas Escolas” Project
Education about safe and efficient use of energy to 4.5 thousand teachers and 404 thousand
students from 900 public schools, between 2010 and 2011. The actions include recreational
activities offered in adapted trucks.
Education about Safety and Efficiency in energy consumption
Attachments
44
Costs and Expenses
Costs and operational expenses1 (R$ million)
1 – Do not include depreciation and amortization 2 - Personnel, Material, Third Party Services and Other Costs and Expenses
2008 2009 2010 2011
239 214 246 245
112201
187 174
351
415433 420
Energy Purchase, Transmission and Connection Charges, and Water Resources
Other Costs and Expenses2
45
Costs and Expenses
Costs and operational expenses1 (R$ million)
1 – Do not include depreciation and amortization
2 - Personnel, Material, Third Party Services and Other Costs and Expenses
PMS2 and Other Expenses (R$ million)
2008 2009 2010 2011
4,700 5,125 5,490 5,689
1,1931,306
1,255 1,2725,8936,431
6,7456,961
Energy Supply and Transmission Charges
PMS² and Others Expenses
2008 2009 2010 2011
485
700 647 622
329
352 443 513
379
254 165138
1,193
1,306 1,255 1,272
Personnel and Payroll Material and Third Party Others
Action Plan: R$ 242 million in 2011-2012
46
Concluded in
2011
increase of 212 emergency teams, totalizing 353 teams trained to
perform attendances in powered grid
hiring and training of 580 maintanance and construction electricians
hiring of 30 additional prunning electricians
38% increase in call center positions (150 positions)
doubling of SMS receipt capacity to 100 thousand / day
increase of call center service capacity by 27 times from 2 thousand to
54 thousand calls / hour
300 additional stand-by positions in call center for emergency
situations
increase of 120 emergency teams, totaling 473 teams December/11
to March/12
47
AES Tiete's expansion obligation
Efforts being made
by the Company to
meet the obligation :
• Long-term energy
contracts (biomass)
totaling an average of
10 MW
• SHPP São Joaquim
- started operating in
July, 2011, with 3 MW
of installed capacity
• SHPP São José –
under construction,
with 4 MW of installed
capacity, expected to
be operational in 1H12
• Thermo-SP - Project
of a 550MW gas fired
thermal plant
1999 Jul/09 Oct/08 Aug/08 Sep/11 Sep/10
Privatization Notice
established the
obligation to expand the
installed capacity in
15% (400 MW) until
2007, either in
greenfield projects
and/or through long
term purchase
agreements with new
plants
Aneel informed
that the issue is
not related to
the concession
agreement and
must be
addressed with
the State of São
Paulo
Judicial Notice:
The Company was notified
by the State of São Paulo
Attorney's Office to present
its understanding on the
matter, having filed its
response on time, the
proceedings were ended,
since no other action was
taken by the Attorney's
Office
In response to a Popular
Action (filed by
individuals against the
Federal Government,
Aneel, AES Tietê and
Duke), the Company
presents its defense
before the first instance
Popular Action:
Due to the plaintiffs failure
to specify the persons that
should be named as
Defendants, a favorable
decision was rendered by
the first Instance Court
(an appeal has been filed)
AES Tietê was
summoned to answer a
Lawsuit filed by the
State of São Paulo,
which requested the
fulfillment of the
obligation in 24 months.
An injunction was
granted in order to have
a project submitted
within 60 days.
Nov/11 2007
Company faces restrictions until
deadline:
• Insufficiency of hydro resources
• Environmental restrictions
• Insufficiency of natural gas supply
• New Model of Electric Sector (Law #
10,848/2004), which forbids bilateral
agreements between generators and
distributors
Feb/12
Lawsuit:
The Company
appealed to the
State of Sao
Paulo State Court
of Appeals and
the injunction was
stayed
São Paulo State
Supreme Court
rejected AES Tietê’s
appeal. The
grounds for the
denial and the
contents of the
decision have not
yet been disclosed.
48
Next Steps:
1 - The auditing
procedure (AP)
is expected to
begin by the 1st
half of 2012
2 – AP is
expected to be
concluded in at
least 6 months
3 - After AP’s
conclusion, a
1st level court
decision will be
released
4 - Appealing to
the 2nd instance
court
5 - Foreclosure
starts.
Presentation of
guaranty
6 - Request to
withdraw the
guaranty
7 - Appeals to
the 3rd instance
courts
Eletrobras Lawsuit
Nov/86
Stated-owned
Eletropaulo
borrowed money
from Eletrobras
Dec/88
State-owned
Eletropaulo and
Eletrobras
disagreed on how
to calculate
interest over that
loan and a lawsuit
was started
Sep/03
The 2nd level of
court excluded
AES Eletropaulo
from the
discussion based
on the spin-off
agreement
Jun/06
The SCJ decided
to send the
Execution Suit
back to the 1st
level of court
May/09
Eletrobras
requested the 1st
level of court
judge to appoint
an expert
Jan/98 Oct/05
Eletrobras and
CTEEP appealed
to the Superior
Court of Justice
(SCJ)
Dec/10 Sep/01
Eletrobras, after
winning the
interest
calculation
discussion, filed
an Execution Suit
to collect the due
amount
State-owned
Eletropaulo was
spun-off into four
companies and,
according to our
understanding
based on the
spin-off
agreement, the
discussion was
transferred to
CTEEP
Privatization
event . State-
owned
Eletropaulo
became AES
Eletropaulo
Apr/98
Eletrobras
requested the
beginning of the
appraisal
procedure, which is
under 1st. instance
court analysis
Jul/11
On July 7, the
judge determined
Eletropaulo and
CTEEP to present
their
considerations,
which occurred in
August
49
Any party with an intention to dispose its shares should first provide the other party the right to buy
that participation at the same price offered by a third party
Once the offering party exercises the Drag Along clause, offered party is obligated to dispose of all
its shares at the time, if the Right of 1st Refusal is not exercised by offered party
In the case of change in Brasiliana’s control, tag along rights are triggered for the following
companies (only if AES is no longer controlling shareholder):
– AES Eletropaulo: Tag along of 100% in its common and preferred shares
– AES Tietê: Tag along of 80% in its common shares
– AES Elpa: Tag along of 80% in its common shares
Shareholders Agreement
On Dec 2003 AES and BNDES signed a Shareholders’ Agreement to regulate their relationship as shareholders of
Brasiliana and its controlled companies. The Agreement is available at www.aeseletropaulo.com.br/ri
Shareholders can dispose its share at any time, considering the following terms:
Right of 1st
refusal
Drag along
rights
Tag along
rights
50
Brazilian Main Taxes
AES Eletropaulo
• Income Tax / Social Contribution:
– 34% over taxable income
• ICMS: 22% over Revenue (average rate)
– Residential: 25%
– Industrial and Commercial: 18%
– Public Entities: free
• PIS/Cofins:
– 9.25% over Revenue minus Costs
AES Tietê
• Income Tax / Social Contribution:
– 34% over taxable income
• ICMS (VAT tax)
– deferred tax
• PIS/Cofins (sales tax):
– Eletropaulo s PPA: 3.65% over Revenue
– Other bilateral contracts: 9.25% over Revenue
minus Costs
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.
Contacts:
+ 55 11 2195 7048
