Transcript
InstitutionalMay, 2013
1
AES Brasil Group
I B il i 1997 In Brazil since 1997 Operational Figures:
- Customers units: 7.7 million
P l ti d 20 2 illi- Population served: 20.2 million
- Distributed Energy: 54.4 TWh
- Generation Capacity: 3.298 MW
Generated Energy : 14 270 GWh- Generated Energy : 14.270 GWh
7.6 thousand AES Brasil People Investments 1997-2012: R$ 14.7 billion Solid corporate governance and Solid corporate governance and
sustainability practices Safety our #1 Value
Service Provider
DiscoGenco
2
AES Brasil widely recognized in 2009-2013
Quality and SafetyManagement Excellence Sustainability
(AES Ti tê)
(AES Tietê)
( S )(AES Sul)
(AES Brasil)
(AES Tietê)
(AES El t l )
(AES Tietê)
(AES Eletropaulo)
(AES Eletropaulo) (AES Tietê)
(AES Tietê)
(AES Eletropaulo)
(AES Brasil)(AES Eletropaulo) (AES Tietê)
(AES Tietê)(AES Eletropaulo)
(2009 - AES Eletropaulo) (AES Eletropaulo)(2011- AES Tietê; 2012 – AES Eletropaulo)(AES Tietê)
(AES Eletropaulo/ Tietê)
3
Mission & visions
Mission
Improving lives and promoting development by providing safeImproving lives and promoting development by providing safe, reliable and sustainable energy solutions
Visions
Be a leader in operational and financial management in the Brazilian energy generation sector and expand installed capacity
Be the best distributors in BrazilBe the best distributors in Brazil
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Sustainability - Corporate Social Responsibility: annual investments of R$ 148 million
“Casa de Cultura e Cidadania” Project - Offers courses and activities in culture and sports. Directly benefits appro imatel 5 6 tho sand children and teenagers and indirectl 292 tho sand people in 7 nits located ithin
Development and transformation of communities
approximately 5.6 thousand children and teenagers and indirectly 292 thousand people in 7 units located within AES Brazil companies’ areas of operation
Children educational development
“Centros Educacionais Luz e Lápis” Project - Two units in São Paulo attending 300 children from 1 to 6 years old in condition of social vulnerability
“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. The actions include
Education on safety and efficiency in energy consumption
thousand teachers and 404 thousand students from 900 public schools. The actions include recreational activities offered in adapted trucks.
Converting consumers to clientsDeveloped for grid connection regularization. Between 2004 and 2012, more than 500
thousand families in low income communities were benefited from better energy supply conditions and social inclusion.
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Shareholding structure
AES Corp BNDES
C 50.00% - 1 shareP 100%T 53.85%
C 50.00% + 1 shareP 0.00%T 46.15%
Cia. Brasiliana de Energia
C 99.99%T 99.99%
C 76.45%P 7.38%T 34.87%
C 71.35%P 32.34%T 52.55%
C 99.99%T 99.99%T 99.70%
AESServiços TC
AESUruguaiana
AESEletropaulo
AESTietêAES Sul
C = Common SharesP = Preferred Shares
T = Total6
AES Tietê and AES Eletropaulo are listed i BM&FBin BM&FBovespa
Others²Free Float¹ ¹ Market Cap³
US$ 0.6 bi8.5%56.2%19.2%16.1%
US$ 3 9 bi24 2% 28 3% 39 5% 8 0% US$ 3.9 bi24.2% 28.3% 39.5% 8.0%
1 - Parent companies, AES Corp and BNDES, have similar voting capital on each of the Companies: approx 35.9% on AES Eletropaulo and 32.9% on AES Tietê 2 - Includes Federal Government and Eletrobrás shares in AES Eletropaulo and AES Tietê, respectively3 - Base: 05/08/2013. Considers preferred shares for AES Eletropaulo and preferred and common shares for AES Tietê 7
AES Brasil among the top five in the electric sector
Ebitda 2012 (R$ billion)Ebitda – 2012 (R$ billion)
3.9 3.63.1
2 6 2 52.6 2.52.1
1.6 1.5 1.30.8 0.7 0.6
-0.3
Net income – 2012 (R$ billion)
CPFL Cemig Tractebel AES Brasil Neoenergia Cesp Copel Light EDP Duke Coelce Equatorial Celesc
( )
3.8
1.6 1.5 1.3 1.1 0.7 0.4 0.4 0.3 0.3 0.1 0.1 -0.3
Source: Companies’ financial reports 8
Cemig CPFL Tractebel Neoenergia AES Brasil Copel Light Coelce EDP Duke Cesp Equatorial Celesc
AES Tietê is the 3rd largest privategenerator in Brazil
Main privately held Companies
generator in BrazilGeneration installed capacity (MW) - 20121
ENDESA Eletronuclear
AES Tietê: 3rd largest among private
AES Tietê2,2%
CPFL2,4% Light
0,8%
S0,8%
DUKE1,7%
Eletronuclear2,8%
CGTEE0,7%
Eletrosul0,5% EDP
1,5%
Neoenergia1,2%
generation companies
Approximately 78% of country’s generationCopel
Petrobrás5%
Tractebel 6%
Demais28,9%
installed capacity is state-owned2
18 GW of hydro capacity under construction:
S t A t i d Ji (M d i Ri ) 7 GWCHESFItaipu
6%
Cemig6%
4%
– Santo Antonio and Jirau (Madeira River): 7 GW
– Belo Monte (Xingu River): 11 GW
CHESF9%
Furnas8%
Eletronorte7%
CESP6%
6%
Sources: ANEEL – Generation Data Source “BIG” (March, 2012) and Companies websites 2- Source: Banks’ reports
Total Installed Capacity: 123 GW
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AES Brasil is among the top 3 largest distribution players in Brazil
C D /2011p y
Consumers – Dec/201113%
12%30%
63 distribution companies in Brazildistributing 430 TWh in 2011
AES Brasil is one of the largest electricity
AAES Brasil
CPFL Energia
12%
12%5% AES Brasil is one of the largest electricity
distribution group in Brazil:Cemig
Neo EnergiaConsumption (GWh) - 201116%7%
7%
5%
Energy distributed
% of the Brazilian
Copel
Light
13%
12%
distributed (TWh)
Brazilian market
AES Eletropaulo 45 10.5
AES Sul 8.6 2.0
AES Eletropaulo is the largest distributioncompany in Brazil in terms of energy
EDP
Outros
11%
52%
distributed
Source: Brazilian Association of Electricity Distributors (ABRADEE), 2011 and EPE (Energetic Research Company)
7%
6%6%6%
10
AES Tietê overview
12 hydroelectric plants in São Paulo 12 hydroelectric plants in São Paulo
30-year concession expiring in 2029
Installed capacity of 2,658 MW, with physical guarantee1
of 1,278 MW average
Physical guarantee contracted with AES Eletropaulo
(11GWh) through Dec 2015(~R$183/MWh/~US$91/MWh(11GWh) through Dec,2015(~R$183/MWh/~US$91/MWh,
annually adjusted by inflation)
369 employees as of March, 2013
Company listed at BM&Fbovespa
Rating: National International
Moody's Aa1 Baa3
1 - Amount of energy allowed to be long term contracted 12
Generated energy shows high operational availability p y
Generated energy (MW avarage1) 1Q13 Generated energy by power plant (MW average1)
Agua Vermelha
N A h d5% 3%
125% 124% 127%130%
102% Nova Avanhandava
Promissão
Ibitinga44%
5%
8%
6%102%
Bariri
Barra Bonita
Euclides da Cunha17%
12%1,599 1,582 1,629 1,753
1,480
2010 2011 2012 1Q12 1Q13
Generation - Mwavg Generation/Physical guaranteeOther Power Plants *
17%
I D b 2012 AES Ti tê th fi t L ti A i t i th PASS 55 tifi ti f th
1 – Generated energy divided by the amount of hours * Caconde, Limoeiro, Mogi and SHPPs 13
In December 2012, AES Tietê was the first Latin American company to receive the PASS-55 certification of the British Standards Institute, for its reliability and sustainability of assets
Hydrological conditions improving and rationing is unlikely
Brazilian reservoir levels1 (%) AES Tietê reservoirs levels (%)
g y
80
90
100 93%
80%
97%91%90%
80%
100% 100%
3846
5562
30
40
50
60
70
Max (%
)
0
10
20
30
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Caconde A. Vermelha B. Bonita Promissão2001 2012 2013Historical Data Since 2001 Apr-12 Apr-13
Thermal capacity available for dispatch: 14 GW vs. 4 GW in 2001
AES Ti tê Q1 13 i t f R$ 115 illi d t h d l i l i k h i
14
AES Tietê Q1 13 impact of R$ 115 million due to hydrological risk sharing
- 2013 estimated impact ranges from R$ 231 million to R$ 441 million
1 – Average reservoir levels of the National System (percent of maximum storage capacity)
System physical guarantee reduction resulted in spot market exposure since September/2012
Allocation of physical guarantee for AES Tietê (MWm) Monthly evolution of the spot price (R$/MWh)
spot market exposure since September/2012
375
16189 77 76 72 280
376
414
340 320
72
-21 -42
-108
-32-85
-31
125
193 181
118 119
183
260
215
108
-30829
4826 12 17 32 23 20 21
37 46
4423 51
118 91
119
jan feb mar apr may jun jul aug sep oct nov dec
2011 2012 2013Secondary energy Physical guarantee reduction
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89% of net revenues and 73% of billed energy came from the bilateral contract with AES
Eletropaulo in 1Q13Net revenues (%)Billed energy (GWh)
615 8%
2% 1%
14,72916,728
15,122
1,980 1,942 3,834 1,340 1,519
1,141 301 554 615 %,
-14%AES Eletropaulo
Bilateral contracts
11,108 11,108 11,138 1 256 600
571 42163
482 89%
4,869 4,182Spot Market
ERM¹
2,879 3,058 1,256 600 42
2010 2011 2012 1Q12 1Q13
AES Eletropaulo ERM Spot Market Bilateral Contracts1
1 – Energy Reallocation Mechanism 16
AES Eletropaulo ERM Spot Market Bilateral Contracts
Investments in power plantsmodernization
Investments (R$ million)
213
2013 major investments in Nova
19
4
175 1392013 major investments in Nova
Avanhandava, Ibitinga and Agua Vermelha
power plants, that represent 71% of AES
Tietê capacity
156135
213
21
Tietê capacity
13%
17 273
2011 2012 2013 (e) 1Q12 1Q13
Investments New SHPPs¹Investments New SHPPs
1- Small Hydro Power Plants 17
Growth projects
“Thermal São Paulo” Project (550 MW)
N t l bi d l th l l t Natural gas combined cycle thermal plant
Previous license granted in Oct, 2011 valid for 5 years
Pending gas supply
Next steps: Obtain installation license
“Thermal Araraquara” Project (579 MW)
Natural gas combined cycle thermal plant
Purchase option acquired in March, 2012
Pending gas supply
Next steps: Obtain installation license Next steps: Obtain installation license
18
Contracting strategy: driven to free market
Clients portfolio evolution in 1Q13
265%Assured Energy (1,278 MW avg)
307New client portfolio
Consolidated portfolio
84
2012 2016 2020
p
1Q12 1Q13MWavg
Strategy post-2015: contract energy in the free market with large unregulated customers
- Currently serving 45 customers (307 MW) with 3-5 year contractsC f S$ S$ / 1 ( f f )- Current prices for delivery in 2016: US$52-US$57/MWh1 (annually adjusted for inflation) – driven by
supply/demand- 143 MWavg sold from 2016 onwards
191 - AES analysis
Financial highlights
Ebitda (R$ million)Net revenue (R$ million)
2 112
1,311 1,466 1,542
423 334
-21%1,754 1,8862,112
540 598
11%
75% 75% 81% 78% 56%
423 334
2010 2011 2012 1Q12 1Q13
540 598
2010 2011 2012 1Q12 1Q13
Ebitda Margin20
Net Revenue
Ebitda
Steady earnings distribution on a quarterly basisquarterly basis
Net income and dividend pay-out (R$ million)
117% 109% 108%
25% of minimum pay-out
11% 11% 10%
25% of minimum pay outaccording to bylaws
Average payout since 2006: 105%
Average dividends since 2006:gR$ 741 million per year
742 706737845 901
-24%
246 186
2010 2011 2012 1Q12 1Q13Q Q
Net Income Yield PN Payout
21
Debt profile
Net debt (R$ billion) Amortization schedule – 1st Debenture Issuance (R$ million)
0.7 0 6 0 6 0 6
1.0
0.3 0.4 0.5
0.6 0.6
0.30.5
0.6
300 300 3000.76
2013 2014 2015
D bt ti ti fl
0.4 0.40.5 0.5
Covenants Average Cost Gross Debt/Adjusted Ebitda <= 2.5
1Q12 1Q13 Average Cost (%CDI)¹ 115% 121%
Average Term (Years) 2 0 0 8
Debt amortization flow2010 2011 2012 1Q12 1Q13Net Debt Net Debt/Adjusted Ebitda Gross Debt/ Adjusted Ebitda
1 – Brazilian Interbank Interest Rate
Covenants Average Cost Net Debt/Adjusted Ebitda <= 3.5
Average Term (Years) 2,0 0,8
Interest Rate 11.3% 9.8%
22
Capital markets
Daily avg volume (R$ thousand)AES Tietê X Ibovespa
703 546 739
1,387
350
400 2005 ‐ May 2013¹
5,269
8,52913,922
20,246
12 584
21,113
250
300
350
182.1%
9,683 9,315
15,84411,717
4,239 3,269
12,584
150
200
66.8%54.3%
69.6%
Shares negotiated (thousand)
,
2010 2011 2012 YTD Mar/12
Preferred Common
50
100
Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12
Market Cap: US$ 3.9 billion / R$ 7.8 billion
BM&FBovespa: GETI3 (common shares) and GETI4 (preferred shares)
3
Ibovespa AES Tietê PN AES Tietê TSR² AES TIetê ON
2 – Total Shareholders’ Return
ADRs negotiated in US OTC Market: AESAY (common shares) and AESYY (preferredshares)
3 – Index: 05/08/2013 231 – Information until 05/08/2013. Index: 12/29/2005 = 100
AES Eletropaulo overview
Largest distribution company in Brazil in terms of energy
Concession area
distribution
Serving 24 municipalities in the São Paulo Metropolitan area
Concession contract expire in 2028p
Concession area with the highest GDP in Brazil (16,8% of
Brazilian GDP¹)
46 thousand kilometers of lines and 6 5 million consumption 46 thousand kilometers of lines and 6.5 million consumption
units in a concession area of 4,526 km2
46 TWh distributed in 2012
6,168 employees as of March, 2013
Company listed at BM&FBovespa
Investment grade: Fitch S&P Moody’s
National AA AA- Aa1
International BBB- BB Baa3251 – Source: IBGE, 2010.
Consumption evolution
159
Total market1 (GWh) Consumption by class1 – 1Q13 (%)
38
23
15
43,345 45,102 45,567
19
31
38 7,911 8,284 7,987
28 37
19 2% 68%
46%35,434 36,817 37,570
1,906 2,092 11,156 11,401
Brasil AES Eletropaulo
Residential Commercial Industrial Others
9,250 9,309
2010 2011 2012 1Q12 1Q13
Captive Market Free Clients Residential Commercial Industrial Others
1 – Net of own consumption 26
State of São Paulo GDP growth 3.3% (5-year average)- Expectation for 2013 3.0%, grows to 3.5% in 2014-2015
Captive Market Free Clients
Industrial class
Industrial class X Industrial production in São Paulo state
Consumption of industrial class by activity1 –AES Eletropaulo
15%
5%
0%
5%
10%
Vehicles, Chemical, Rubber,
Plastics and Metal
Other industries
-15%
-10%
-5%
ul-0
7
ov-0
7
ar-0
8
ul-0
8
ov-0
8
ar-0
9
ul-0
9
ov-0
9
ar-1
0
ul-1
0
ov-1
0
ar-1
1
ul-1
1
ov-1
1
ar-1
2
ul-1
2
ov-1
2
ar-1
3
Economic recoveryEconomic crisis
Metal Products
49%
industries51%
Economic crisis
Ju No Ma Ju No Ma Ju No Ma Ju No Ma Ju No Ma Ju No Ma
Industrial production SP (% 12 months) Industrial (% 12 months)
1 – As of March, 2013. 27
Residential classResidential class X A erage income in São Pa lo Metropolitan AreaResidential class X Average income in São Paulo Metropolitan Area
1
4,300
4,800
2,000 2,100 2,200
l ‐GW
h
Q ‐2*)
Residential Consumption x Real Income ‐ São Paulo (Q‐2*)
2 800
3,300
3,800
1 4001,500 1,600 1,700 1,800 1,900
Resid
entia
Income R$
‐SP
(Q
Residential consumption reflects GDP per capita growth
C ti (i kWh)
2,300
2,800
1,200 1,300 1,400
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2007 2008 2009 2010 2011 2012 2013
Avg Re
al I p p g
Average growth of the residential class (aggregate) in the last 5 years: 4.8%
258
- 8.5%
Consumption per consumer (in kWh)
Rationing
Consumption per residential consumer: average growth of 1.5% in the last 5 years
220
192199
203 207 213
219 223
228 229 234 236
Rationing
192
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1 - Two quarters of delay in relation to consumption 28
Investments focused on grid automation, operational reliability and p y
system expansionInvestments breakdown (R$ million)
22
35 739
831
647
2013 investments plan:
substation repowering, adding 133 MVA 26
647 p g, g
capacity to the system
29.7 km of new transmission lines
maintenance in over 5,200 km of
-21%717
796
621
7
184 145
,
distribution grid
regularization of 75,000 illegal
connections and replacement of 125,000
177 134
7 11
145
2011 2012 2013(e) 1Q12 1Q13
connections and replacement of 125,000
obsolete meters.
29
Own Resources Funded by the clients
SAIDI below regulatory reference and in its lowest level since 2006and in its lowest level since 2006
SAIDI¹ (last 12 months) SAIDI1 (YTD)
9.32 8.68
8.67
8.67
8.49
10.60 10.36 8.35
9.57 8.32
8 6-9%
2010 2011 2012 1Q12 1Q13
3.36 3.06
Jan-Apr 12 Jan-Apr 13
SAIDI (hours) SAIDI Aneel ReferenceABRADEE ranking position among the 28 utilities with more than 500 thousand customers
7th 6th 4th
p p
1 - System Average Interruption Duration IndexSources: ANEEL and AES Eletropaulo
ABRADEE ranking position among the 28 utilities with more than 500 thousand customers
30
SAIFI below regulatory reference
SAIFI¹ (last 12 months) SAIFI1 (YTD)
7.39 6.93 6.87 6.87 6.64
5.46 5.45 4.65 5.09 4.60
-5%
1.76 1.68
Jan-Apr 12 Jan-Apr 132010 2011 2012 1Q12 1Q13 p p3rd
ABRADEE ranking position among the 28 utilities with more than 500 thousand customers
4th
SAIFI Aneel ReferenceSAIFI (times)
3rd
1 - System Average Interruption Duration IndexSources: Aneel and AES Eletropaulo
ABRADEE ranking position among the 28 utilities with more than 500 thousand customers
31
Losses level within regulatory threshold
Regulatory Reference² - Total Losses (last 12 months)Losses (last 12 months)
10.9 10.5 10.4 10.4 10.1
6.5 6.5 6.1 6.4 6.1
10.6 10.3 9 8 9 4
4.4 4.0 4.1 4.0 4.0
9.8 9.4
2010 2011 2012 1Q12 1Q13
Non Technical Losses Technical Losses ¹
2011/2012 2012/2013 2013/2014 2014/2015
1 – In January 2012, the Company improved the assessment of the technical losses. 2 – Values estimated by the Company to make them comparable to the reference for non-technical losses determined by the Aneel 32
Financial highlights
Ebitda (R$ million)Net revenues (R$ million)
339
442 2,413
2,848
5,017 5 405 5 354
739 831 14,714 15,240 15,314
426 933
339 5,017 5,405 5,354
-14%
1,648 1,473
476
179
206
636
298 128
9,697 9,097 9,128
1,362 993 186 145
3,835 3,283
-14%-57%
476 92 122 206 6 128
2010 2011 2012 1Q12 1Q13
Adjusted Ebitda
2,286 2,146
2010 2011 2012 1Q12 1Q13
Net revenue ex-construction revenueNon-recurring¹Regulatory assets and liabilities
Deduction to Gross RevenueConstruction revenues
1 – Non recurring 2011 : Includes sale of AES Eletropaulo Telecom with a R$ 707 million impact on Ebitda. 33
Average payout of 74% p.a. since 2006 Net income and dividend payout1 (R$ million)114.4%
54.4%25.0%
25% of minimum pay-outdi b l
1,572
28.6% 17.1%2.8%
according to bylaws
Average payout since 2006:74% per year
Average dividends since 2006:621
358
365 1,348
Average dividends since 2006:R$ 890 million per year
640 586
350 621
108 97
Yi ld PNAdj t d N t I
(121) (121) (30)
229 218 29
(1)2010 2011 2012 1Q12 1Q13
1 – Gross amount2– Non recurring 2011 :Includes sale of AES Eletropaulo Telecom with a R$ 467 million impact on net income
34
Yield PNPay-out
Adjusted Net Income Non-recurring²Regulatory assets and liabilities
Cost management excellence
PMSO¹ per customer (R$)Efficiency programs and results
Started in 2007 and evolved from cost cutting to
business process transformation
- Strategic sourcing178
207
Strategic sourcing
- Shared services
- Process redesign
- IT tools implementation
2010-2012 cumulative P&L savings of R$ 331 million
Reducing manageable costs estimated at R$ 100
million from 2013 onwards
AES Eletropaulo among the lowest cost operators in
the countryAES Eletropaulo Comparable peers²
351 - Personnel, Material, Third Party Services and Other Costs and Expenses 2 - Eletropaulo peers: CPFL Paulista, Light, Cemig. EDP Bandeirante. Sul Peers: Elektro, RGE, CPFL Piratininga. Eletropaulo metric excludes SIRP (one timer R$29)
y
Debt refinancing conclusion of R$ 1 billion with more flexible covenants
Decrease in debt amortization volume for 2013-15 by R$ 750 million
Increase in the a erage debt mat rit from 6 6 ears to 7 2 earsBenefits Increase in the average debt maturity from 6.6 years to 7.2 years
Debt average costs decrease from CDI+1.29% to CDI+1.27%
More flexible covenantsMore flexible covenants
Debt amortization schedule
B f i After restructuring (as of October, 2012)
R$ 1,063 million R$ 319 million
Before restructuring (as of September, 2012)
302
533
228 337
226
436 321
400
180
589 478
688
323 221 180
2013 2014 2015 2016 2017 2018 2019 2020 - 2028
53 85 180 180
2013 2014 2015 2016 2017 2018 2019 2020 2021 - 2028
3636Market debt in R$ (ex-pension plan debt ) Market debt in R$ (ex-pension plan debt )
Covenants change
FROM
N t d bt / Adj t d Ebitd 3 5
TO
Gross debt / Adjusted Ebitda < 3.5Net debt / Adjusted Ebitda < 3.5
(equivalent to 4.5x Gross Debt / Adjusted Ebitda)Financial Index
If the limit is exceeded in any quarter If the limit is exceeded for two consecutive quarters
Default
Not considered in the calculationConsidered in the calculation
(same as before IFRS adoption)Regulatory assets and liabilities
Total debt recognized in liabilitiesDebt recognized in liabilities excluding the
“corridor” conceptPension plan debt
Considered in the calculation of debt Out of debt calculationCompulsory loans
37
Covenants limits amended due to tariff reset delay and higher energy costs
Amendment of covenants limits completed in March/2013:Net Debt / Adjusted Ebitda:
5 5x in 1Q13;
Accounting impacts due to
tariff reset
Covenants consider Ebitda adjusted by regulatory assets/liabilities
- 5.5x in 1Q13;
- 3.75x in 2Q13;
- 3.5x from 3Q13 onwards
tariff reset postponement Jun/12: tariff reset regulatory liability
final release (R$ 287 million)
Covenants breach is not expected to repeat since:
- no impact on LTM Ebitda after May/13 related to regulatory liabilityHigher
t d bt Higher cost of energy since Sep/12
l d h iti related to regulatory liability (Jul11/Jun2012);
- higher cost of energy funded by CDE or reflected in tariff adjustment
net debt lowered cash position
38
Debt profileNet debt Average cost
6.4 6.7 4.4x
0.9x 0.8x
4.9x
112.2% 109.8%2.4 2 3
3.12 4
3.0
1.1x
1Q12 1Q13
2.4 2.3 2.4
2010 2011 2012 1Q12 1Q13
Net Debt/Adjusted Ebitda <= 3.5x - Q1 13: limit amended to 5.5x
12.0% 11.7%Interest Rate
Average Time - years
% of CDIC
Net Debt (R$ billion) Net Debt/Ebitda Adjusted¹
- Q2 13: limit amended to 3.75x
Adjusted Ebitda/Financial Expenses >= 1.75x
1 – According the new covenants 2 – Brazilian Interbank Interest Rate 3 – Inflation Index 39
Covenants
Debt profileDebt amortization schedule (financial liabilities as of March, 2013)
2,624
677
1611,766
5663788 690
913
50 87 182590 480
690325 221 180
125 133
142 151161
171182
7339 53
5660
6771
123250
368
690562 473
2013 2014 2015 2016 2017 2018 2019 2020 2021 - 2028
Local Currency FCesp (without Corridor) FCesp (Corridor)
40
Due to the ICVM 695, the corridor (accumulated gains and losses) became fully recognized in the
Company balance sheet from January, 2013 on
AES Eletropaulo: challenges
“Criando Filling ofBeginning of
out-of-the-meritPension plan accounting
Starting to receive monthly
Valor” (Creating
Value) project launch
Filling of administrative
appeals at Aneel
thermals dispatch,
affecting discos cash flows
accounting changes
imposed by CVM
Resolution 695
Covenants limits
amendment
yCDE1 funding
to cover higher energy
costs
2013 TariffAdjustment
2010 Dec/12Sep/12 Mar/13Jan/13 Apr/13Jul/12 Jul/13
3rd Tariff Reset Cycle Debt
Sale of real estate property
Extraordinary Tariff Adjustment due to
Expected events: Decision by Aneel regardingReset Cycle
and 2012 Tariff
Adjustment
Debt restructuring(R$ 1 billion)
estate property “Cambuci” (R$
160 million), subject to
Aneel’s approval
Adjustment due to Energy Cost Reduction
Program, with 20% average tariff
d ti
by Aneel regarding administrative appeals and regulatory liabilities start to be returned through tariffs, due to the postponement of the 3rd Tariff Reset Cycle
41
reduction the 3rd Tariff Reset Cycle
1 – CDE: Energy Development Account
Capital marketsDaily avg volume (R$ thousand)AES Eletropaulo X Ibovespa
14,82423,606
19,589
28,254
360
2005 ‐ May 2013¹
14,824
210
260
310
360
24,496 26,897 23,057 22,895
110
160
210 66.8%66.7%
2010 2011 2012 YTD Mar 13
Preferred n Shares negotiated (thousand)10
60
Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12
-69.1%
• Market cap³: US$ 0.6 billion/R$ 1.3 billion• BM&FBOVESPA: ELPL3 (common shares) and ELPL4 (preferred shares)
Ibovespa AES Eletropaulo PN AES Eletropaulo TSR²
1 – Information until 05/08/2013. Index: 12/29/2005 = 1002 – Total Shareholders’ Return 3 – Index: 05/08/2013 42
• ADRs at US OTC Market: EPUMY (preferred shares)
AttachmentAES Sul and AES Uruguaiana Overview
AES Sul overviewOverview and Business Drivers
Overview
Serving 118 Municipalities in the State of Rio Grande do Sul
Concession area: 99,512 km2
1.2 million consumption units
1 308 directed employees 1,308 directed employees
Concession valid until November, 2027
Business drivers
Regional GDP growth 2.5% (5-year average)
- Expectation for 2013 3.6%, grows to 4.3% in 2014-2015
2013 tariff reset concluded in April – in-line with our
expectations
Quality of services: SADI/SAIFI ~30% better than 2009 levels
Consolidation of efficiency programs, leading to operating
costs below regulatory levels (~2%)
Dividend payout of 63% in 2012 2011 clearing of regulatory
restrictions allowed distribution of dividends) 44
AES Sul financial highlights
Net revenues (R$ million) Ebitda (R$ million) Net income (R$ million)Net revenues (R$ million) Ebitda (R$ million) Net income (R$ million)
2 3411,866 2,027
2,341
586 543
-7%
281
490373
137 49
199 246 255
60 61
-64% 2%
2010 2011 2012 1Q12 1Q13 2010 2011 2012 1Q12 1Q13 2010 2011 2012 1Q12 1Q13
45
AES Uruguaiana overview
Overview and Business Drivers
Overview
Independent natural gas-fired thermal power generation Company with
commercial operations achieved in 2000
Authorization expiration in 2027
Installed capacity of 640 MW
Located in the State of Rio Grande do Sul – city of Uruguaiana
Suspended operations in 2008 due to lack of gas supply from YPF in Argentina
(pending arbitration)
Business Drivers
Emergency operation from February 2013 to March 2013 to support reservoir
recovery
Working to return the plant to long-term service
Leveraging on AES Brazil-Argentina relationship
46
AttachmentAttachmentEnergy Sector in Brazil
Energy sector in Brazil: business segments
GenerationTransmissionDistributionFree Clients
13 groups controlling 76% of68 companies 64 companiesCons mption of 14 770 MWa g 13 groups controlling 76% of total installed capacity
22% private sector
2,809 power plants
68 companies
68% private sector
High voltage transmission (>230 kV)
64 companies
448 TWh of energy distributed in 2012
72 million consumers
Consumption of 14.770 MWavg
(26% of Brazilian total market)
Conventional sources: above 3,000 kW
121 GW of installed capacity³
66% hydroelectric
27% thermoelectric
103,362 km in extension lines (SIN¹)
Regulated public service with free access
67% private sector
Annual tariff adjustment
Tariff reset every four or five
Alternative sources: between 500 kW and 3,000 kW
Large consumers can purchase energy directly from generators
3% SHPP²
2% wind
2% nuclear and others
free access
Regulated tariff (annually adjusted by inflation)
years
Regulated public service
Regulated contracting environment
energy directly from generators
Free contracting environment
1 - Interconnected National System, as of 2011
2 - Small Hydro Power Plants
3 - Aneel Fiscalization Report Sources: EPE, Aneel, ONS and Banks’ reports
Contracting environment – free and regulated markets
48
Energy sector in Brazil:contracting environmentg
Generators Independent Power Producers Generators and Independent
Regulated market Free market
Generators, Independent Power Producers (IPPs), Trading companies and Auto producers
Generators and Independent Power Producers (IPPs)
Auctions: New Energy and Existing Energy Bilateral contracts (PPAs1)
Free clientsDistribution companies
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 PPA– New Energy (A-3): Delivery in 3 years, 15-30 years regulated PPA
– Existing Energy (A-1): Delivery in 1 year, 5-15 years regulated PPA
– Extraordinary (A-0): Delivery at the same year, 1-yearr regulated PPA1 – Power Purchase Agreement
49
Electric sector in Brazil: generation market overview
Installed capacity (GW) Growth by source - new auctions (GW)
Total: 25 GW
2
33 37 40 41 41 411 2 4 6 11 17 25121 130 138 144 151 157 163 168 174
182 Thermal5 GW
116 116 116 116 116 116 116 116 116 116
5 14 22 27 33 37 40 41 41 411Hydro10 GW
Wind10 GW
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Current installed capacity Auctioned Upcoming Auctions
~ 3% annual GDP growth over the last 5 years
~ 4% annual demand growth through 2021, implying 60 GW of additional capacity needed (~6 GW/year) – 35 GW
already auctioned
Gas-fired thermal to leverage on the dispatchability benefit and on the hydrology risk
Sources: EPE (Energetic Research Company): Ten-year Energy Plan 2021; AES analysis 50
AttachmentRegulatory Environment
Distribution companies: tariff methodology
Tariff reset and adjustment
• Tariff Reset is applied each 4 years for AES Eletropaulo
Energy Purchase
TransmissionSector Charges
− Next tariff reset: Jul/2015− Parcel A: costs are largely passed through to the tariff− Parcel B: costs are set by ANEEL
• Parcel A Costs− Non-manageable costs that are largely
passed through to the tariff− Incentives to reduces costs
Regulatory Opex
(PMSO)
Sector Charges• Tariff Adjustment: annually − Parcel A : costs are largely passed through to the tariff− Parcel B: cost are adjusted by IGPM +/- X(1) Factor • Regulatory Opex:
Efficient operating cost determined by
Investment Remuneration
R ti
X WACC
• Remuneration Asset Base:
– Efficient operating cost determined by ANEEL (National Electricity Agency)
Depreciation
RemunerationAsset Base
X Depreciation
– Prudent investments used to calculate the investment remuneration (applying WACC) and depreciation
Regulatory Ebitda
Parcel A - Non-Manageable Costs
Parcel B - Manageable Costs1 – X Factor: index that captures productivity gains
52
Distribution companies: tariff methodology
3rd Cycle of tariff reset – X factor
X FACTOR = Pd Q T+ += + +
Distribution Operational expensesDistribution productivity
Quality of service Operational expenses trajectory
Sti l t
DEFINITION
Capture productivity gains
Stimulate improvement of service quality
Implement operational expenses
trajectoryOBJECTIVE
Defined at tariff reset, considers the average productivity of sector adjusted by market
growth and
Defined at each tariff readjustment, considers variation of SAIDI and SAIFI and comparative
Defined at tariff reset, considers reference
company and benchmarking APPLICATION
growth and consumption variation
performance of discos methodologies
53
3rd Cycle of Tariff Reset for AES Eletropaulofor AES Eletropaulo
Gross Regulatory Asset Base: R$ 10,748.8 million
Net Regulatory Asset Base: R$ 4 445 1 millionTariff Review Net Regulatory Asset Base: R$ 4,445.1 million
Parcel B: R$ 2,007.1 million
Non Technical Losses (referenced in the low voltage market): start point at 11.56% and get to 8,56%,by the end of the cycle
Tariff Review
Average effect to be perceived by the consumer: -9.33%
Economical Effect: -5.60%
A ff t t b i d b th 5 51% Average effect to be perceived by the consumer : +5.51%
Economical Effect: +4.45%Tariff Adjustment
T iff R i +
In 17th July Company filed as administrative appeal at Aneel about the Regulatory Asset Base and
Average effect to be perceived by the consumer : -2.26%Tariff Review +Adjustment
Administrative In 17 July, Company filed as administrative appeal at Aneel about the Regulatory Asset Base andthe non-technical losses trajectory. Aneel’s decision expected to be rendered by July, 2013
AdministrativeAppeal
54
Discussions with the Regulator
E l i R$ 1 260 illi f hi ld d Shielded RAB approved in 2003,
ArgumentsDiscussion
Exclusion R$ 1,260 million from shieldedRAB:- Exclusion of cables: R$ 728 million- Reclassification/equipment volume: R$
pp ,reconfirmed in 2007, based on globalconsistency criteriaShielded RAB
533 million
R$ 446 million investments not recognize,related to Minor Components andAdditional Costs (“CA”)
Adequacy of regulatory standards versusactual spending
Investments
Benchmark company is an outlier, previousnumber of 0 49% shall be restored
Changed the benchmark in Public Hearing(regulatory losses reduction from 0 49% toLosses number of 0.49% shall be restored(regulatory losses reduction from 0.49% to1%)
Losses
55
3rd Cycle of Tariff Reset for AES Sulfor AES Sul
Gross Regulatory Asset Base: R$ 2,503.0 milliong y
Net Regulatory Asset Base: R$ 1,488.5 million
Parcel B: R$ 542.2 million
Tariff Review
Non Technical Losses (referenced in the low voltage market): start point at 4.91% will be kept during the entire tariff cycle (no trajectory)
Average effect to be perceived by the consumer: 3.92%
Economical Effect: 4.49%
The Company will file an administrative appeal at Aneel about Regulatory Technical Losses,Administrative that were not adequately calculated by the methodologyappeal
56
Regulatory pressure to lower tariffs…
“Energy Cost Reduction Program” established by Provisional Measure 579 and Law 12.783
Valid for concessions granted before 1995Overview - Valid for concessions granted before 1995
- 20% average reduction in electricity costs, funded by:
- Generation and transmission concessions expiring 2015-2017: -13%
- Lower sector charges: -7%Lower sector charges: 7%
-Minimal impact on AES Brasil businesses – concessions expire between 2027-2029
Extension for 30 years with effects anticipated for 2013:
- Evaluation of assets using new replacement value methodology
Concession renewal will be based on O&M costs, industry charges, fees and network usage
Generation & Transmission Concessions
Extension for 30 years, as per contract
Rules for renewal has not been defined
DistributionConcessions
57
… combined with poor hydrological conditions impacted discos cash position…
Out-of-merit-order: higher EES¹
p p
Low affluence impacting reservoirs level
Thermals dispatch of 12 GW since Sep, 2012
Out of merit order: higher EES
Within the merit order: risingWithin-the-merit-order: rising energy costs
Hydrological risk transferred to
Energy Cost Reduction Program2
Hydrological risk transferred to discos through quotas allocation
Non-renewal of some generation
Exposure to the spot market (~ 2 GWavg)
concessions
Impact on cash position of discos since Sep/2012
1 - ESS (Service System Charges), which pays for the dispatch of thermals that are out-of-merit 2 – Provisional Measure 579 and Law 12.783 58
… resulted in a measure to preserve discos financial stability
C tAfter
y
ComponentDecree #7.945
Energy Purchase
ESS¹ (out-of-the-
Energy Purchase(within-the-merit-order-
thermal-dispatch)Tariff Adjustment
ESS (out of themerit-order thermal
dispatch)
CDE funding via CCEE lHydrological risk¹ CCEE settlement
59
Involuntary Exposure¹
1 – Before Decree # 7.945, such costs would be passed-through via Tariff Adjustment.
Spot price new methodology
Previous Regulation
CNPE Resolution # 3/2013
Transitory regulation From August 2013 onTransitory regulation(April to July, 2013)
From August, 2013 on
Charged fromall market
1
Resolution CNPE #3/2013:
Methodology for adequacy of risk aversionCharged from:
ESSESS agents:1
• Discos• Free cust. • Generators • Traders
Other 50%for:• Agents
with
Methodology for adequacy of risk aversion mechanisms for spot prices formation
- Risk Aversion Curve (“CAR”) of 5 years(starting from Aug/2013)
• Discos• Free cust.
ESS²
ESS
ESS
ESS
with exposure to spot prices
System Service Charges (“ESS”): prorated among all market players (including generators)
Uptrend in spot prices, which should influence
SpotPrice
SpotPrice
SpotPrice
Includes out-of-the-merit-order thermal dispatch
p p p ,prices in energy contracts representing an opportunity to AES Tietê
1 - Proportional to average commercialized energy of the last 12 months.2 - ESS (System Service Charges), which pays for the dispatch of thermals that are out-of-merit 3 – Risk Aversion Curve 60
AttachmentAES Tietê: Expansion ObligationAES Eletropaulo: Eletrobrás Lawsuit
AES Tietê's expansion obligationEfforts being made by the Company to
meet the obligation :
• Long-term energy contracts (biomass)
Privatization Notice established the
obligation to expand the installed capacity in 15% (400 MW) until
2007 either in
Aneel informed that the issue is not related to
the concession agreement and
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
AES Tietê was summoned to answer a
Lawsuit filed by the State of São Paulo, which requested the
fulfillment of the
In March, 19th the Company’s appeal was denied. Thus, on April, 26th AES
Tietê presented “Thermo São Paulo” contracts (biomass)
totaling an average of 10 MW
• SHPP São Joaquim -started operating in
2007, either in greenfield projects and/or through long
term purchase agreements with new
plants
agreement and must be
addressed with the State of São
Paulo
matter, having filed its response on time, the
proceedings were ended, since no other action was
taken by the Attorney's Office
obligation in 24 months.
An injunction was granted in order to have
a project submitted within 60 days.
Thermo São Paulo project as the plan
to fullfill the obligation to
expand the installed capacity.
started operating in July, 2011, with 3 MW of installed capacity
• SHPP São José -1999 Jul/09Oct/08Aug/08 Sep/11Sep/10 Nov/112007 Apr/12 Dec/12started operating in March, 2012, with 4
MW of installed capacity
In response to a Popular Action:
Due to the plaintiffsCompany faces restrictions until
deadline: Lawsuit:In December 6th was joined
to the process a• Thermal SP - Project of a 550MW gas fired
thermo plant
• Thermal Araraquara
pPopular Action
(filed by individuals against the Federal Government, Aneel,
AES Tietê and Duke), the Company
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
deadline:• Insufficiency of hydro resources
• Environmental restrictions• Insufficiency of natural gas
supply N M d l f El t i S t
Lawsuit:
The Company appealed to the
State of Sao Paulo State
Court of
to the process a manifestation of the State of
São Paulo over the Expansion Plan Capacity presented by AES Tietê
Next Steps: Thermal Araraquara- Acquisition of a purchase option
), p ypresents its defense
before the first instance
Instance Court(an appeal has been
filed)
• New Model of Electric Sector (Law # 10,848/2004), which forbids
bilateral agreements between generators and distributors
Appeals and the injunction
was keptshortly, the Company shall be intimated to pronounce
on the manifestation
62
Eletrobrás lawsuit
Stated-owned Eletropaulo borrowed
Eletrobrás and CTEEP appealed to the
Eletrobrás, after winning the interest
calculation discussion, filed an Execution Suit
State-owned Eletropaulo was spun-off into four companies and, according to our understanding based Eletropaulo borrowed
money from Eletrobrás Superior Court of Justice (SCJ)
filed an Execution Suit aiming the collection of the amounts that were
in default
gon the spin-off agreement, the discussion was
transferred to CTEEP
Nov/86 Dec/88 Sep/03 Jun/06Jan/98 Oct/05Sep/01Apr/98 p
The SCJ annulled the d
pp
State-owned Eletropaulo and
Eletrobrás disagreed on how to calculate
interest over that loan
Based on the spin-off protocol, the 2nd
Instance Court excluded AES
El l f h
2nd Instance Court decision and sent the Execution Suit back to the 1st Instance Court, with the determination to identify the amount
Privatization event . State-owned
Eletropaulo became and two lawsuits, which were later merged into
one, were initiated
Eletropaulo from the lawsuit
to be paid and who should be liable for
such payment, which should be done through an appraisal procedure.
AES Eletropaulo
63
Eletrobrás lawsuit
In accordance to the procedure that was
stipulated by 2nd
Instance Court after an appeal from AES
The 1st Instance Court determined
AES Eletropaulo and CTEEP to present
Next Steps:
1 - The appraisal procedure (AP) is expected to begin in the 1st half of
The 1st instance Court dismissed the parties’ requests of
producing evidences and rendered a
The Rio de Janeiro State
Court of Appeals, granted on 15th a
preliminary Eletropaulo,
Eletrobrás requested the 1st Instance
Court to appoint an expert
CTEEP to present their arguments,
which occurred in August
p g2013 and is expected to last over 6
months
2 – AP is not expected to be concluded in a period shorter than 6
months from its beginning
decision stating AES Eletropaulo’s
responsibility for the debt pursuant to the
Spin-Off Protocol
injunction that suspended the effects of the
December 2012 decision
May/09 Dec/10 Jul/11
3 - After AP’s conclusion, a 1st
Instance Court decision will be issued
> In case of an unfavorable decision:
4 – Appeal to the 2nd Instance Court and file an injunction to stay theDec/12 Jan/12 Feb/12y and file an injunction to stay the
execution proceedings
5 – If the injunction is not granted, the execution proceeding can be resumed
and Eletropaulo will have to post a guaranteeEletrobrás requested
th ithd l f th AES Eletropaulo filed an On 21st, AES
Eletrobrás requested the beginning of the appraisal procedure
before the 1st
6 – Eletrobrás can request the seizure of the guarantee
7 - Appeals to the Superior Courts and file an injunction to stay the execution
proceedings
the withdrawal of the judicial deposit made
by state-owned Eletropaulo in 1988, which now amounts
for R$ 95 MM ( f
AES Eletropaulo filed an appeal on Jan 7th arguing that the decision is invalid, because the procedure preceding such
decision should encompass full discovery, pursuant to Superior
Courts determination Also
On 21st, AES Eletropaulo became
aware of the favorable decision
granted by the TJRJ, which fully annulled the firstbefore the 1
Instance Court (principal of the loan taken in 1986), as a
direct consequence of Eletrobrás’ victory on
the merits
Courts determination. Also, the Company requested a
preliminary injunction to stay the execution proceedings until
the ruling of the appeal
annulled the first instance decision
and determined the return of the case to
the 1st instance 64
AttachmentAES Eletropaulo: Pension planp p
Pension plan expenses and disbursements are calculated using different assumptions
ACCOUNTING EXPENSE
CASH DISBURSEMENT
g p
CVM (Brazilian SEC)Regulatory AgencyRegulatory Agency PREVIC (Pension plans regulator)
Difference between interest on actuarial liabilities and assetsDeterminationDetermination Result of the FCesp actuarial valuation
Calculated in accordance to market value (National Treasury Notes/NTN-B)Discount rateDiscount rate
Calculated in accordance to a study performed value (National Treasury Notes/NTN B)
on 12/31/2012: 3.75% p.a.Discount rateDiscount rate by FCesp (Resolution CNPC No. 9): 5.5% p.a.
Company Financial StatementsRecognitionRecognition FCesp Financial Statements
66
Main amendments on accounting rules
Until 12.31.2012 (Res. CVM 600)¹
From 01.01.2013 (Res. CVM 695)(Res. CVM 600) (Res. CVM 695)
Determined by a study of a specialized company (6.79% for 2012)
Expected return on plan assets
Expected return on plan assets
Corresponds to the actuarial liabilities discount rate (3.75% for 2013)
Accrued over the years in the "corridor" (10% excess of actuarial liabilitiesActuarial Gains Actuarial Gains Fully recognized in the Company's balance (10% excess of actuarial liabilities
recognized in the income statement)and lossesand losses sheet (Liabilities and Shareholders‘ Equity)
Amortized over the average future service period of active participants and recognized in income statement
Corridor over 10% of plan liabilities
Corridor over 10% of plan liabilities
There is no impact (fully recognized in the balance sheet of the Company)
1 – Revoked by CVM Resolution 695, on December 13, 2012 67
Impact on the income statement due to changes imposed by CVM
2012R$ million
2013R$ milllion
16 3Service costService cost 29 3Discount rate decreases from 5 5% to 3 75%
g p y
916.6Rate costsRate costs 1,018.1Discount rate decreases from 5.5% to 3.75%
16.3Service costService cost 29.3Discount rate decreases from 5.5% to 3.75%
(788.6)Expected return on plan assets
Expected return on plan assets (696.5)Rate of return decreases from 6.79% to 3.75%
Amortization Amortization 15.3of actuarial
gains and lossesof actuarial
gains and losses-Extinction of the corridor method
159.7Total expenditureTotal expenditure 350.9
Increase on expense shall be reversed through equity in the coming years due a grater expectedp g q y g y g p
profitability of the plan compared to the expected return on plan assets used in the calculation
Average return over the last five years on 16% (above the actuarial target period)68
Cash impacts with the plan
Amendments set forth by CVM 695 has no influence on assumptions and on the calculation
method of the pension plan cash disbursement
2012 2013
Cash disbursementCash disbursement
2012R$ million
2013R$ million
IGP-DI discount rate decreases from +6% to +5.5%,
+4.4%
271.7Cash disbursement before and after CVM 695
Cash disbursement before and after CVM 695 283.6
IGP DI discount rate decreases from 6% to 5.5%, offset by marking securities to market
For 2014 is not expected a significant increase on cash disbursement, since the actuarial
assumptions were maintened
69
AttachmentAttachmentOther subjects
Shareholders agreementOn Dec-2003 AES and BNDES executed a Shareholders’ Agreement to regulate their relationship as shareholders ofBrasiliana and its controlled companies. The Agreement is available at www.aeseletropaulo.com.br/ri,http://ri.aestiete.com.br/ and http://www.aeselpa.com.br/.
Any party with an intention to dispose its shares should first provide the other party the right to buythe corporate interest at the same price offered by a third party
Shareholders can dispose its share at any time, considering the following terms:
Right of 1st refusal the corporate interest at the same price offered by a third 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):
refusal
Tag alongrights companies (only if AES is no longer controlling shareholder):
– AES Eletropaulo: Tag along of 100% on its common and preferred shares– AES Tietê: Tag along of 80% on its common shares– AES Elpa: Tag along of 80% on its common shares
rights
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
Drag alongrights its shares at the time, if the Right of 1 Refusal is not exercised by offered partyg
71
Costs and expenses
Costs and operational expenses1 (R$ million)
570
198 433 419
570
187 174
41
264126%
246 245
372
224 51
41
117
66
2010 2011 2012 1Q12 1Q13Energy Purchase, Transmission,Connection Charges and Water Resources
1 – Do not include depreciation and amortization 2 - Personnel, Material, Third Party Services and Other Costs and Expenses 72
Other Costs and Expenses ²
Energy costs pushed the costs and operating expenses in the 1Q13
Operating costs and expenses¹ (R$ million)
operating expenses in the 1Q13
165
2 8 4 3
282 271 267 264
165
117 117
1Q12 electric energy purchased for resale
operat. Provisions and Other Exp.
personnel, material and third party services
transmission and Conection
financ. comp. for use of wat. resources
1Q13
1 - Not including depreciation and amortization73
Costs and expenses
Costs and operational expenses1 (R$ million) PMS2 and other expenses (R$ million)
1 551
1,551 5,609 5,715
6,927
165 192
2611,255 1,251
1,551
1,255 1,251 443
513
565
15%7%
4,354 4,464 5,376
1,211 1,422 421 450
1,632 1,872 647 546
725
190 211
132 13499 106
421 450
2010 2011 2012 1Q12 1Q13
Energy Supply and Transmission Charges¹
PMS² and Others Expenses
2010 2011 2012 1Q12 1Q13
Personnel and Payroll Material and Third Party Others
1 – Do not include depreciation and amortization 2 - Personnel, Material, Third Party Services and Other Costs and Expenses
PMS² and Others Expenses
74
Manageable PMSO¹ items below the inflation in 1Q13below the inflation in 1Q13
PMS and other expenses¹ – 1Q13 (R$ million)
-1.4%
(65)88
421450
(65)
(60) (3) 1 (3) 69
421356
297 297 294 292 292 292
362
1Q12 FCesp Contingencies, ADA and
Write-Offs
1Q12Manageable
Personal Materials and
Third Party Services
Others 1Q13Manageable
Contingencies, ADA and
Write-Offs
FCesp 1Q13
751 - Personnel, Material, Third Party Services and Other Costs and Expenses
Brazilian main taxes
AES Eletropaulo AES Tietê
• Income Tax / Social Contribution:
– 34% over taxable income
• Income Tax / Social Contribution:
– 34% over taxable income
• ICMS: 22% over Revenue (average rate)
– Residential: 25%
I d t i l d i l 18%
• ICMS (VAT tax)
– deferred tax
– Industrial and commercial: 18%
– Public entities: free
• PIS/Cofins:
• PIS/Cofins (sales tax):
– Eletropaulo´s PPA: 3.65% over Revenue
Other bilateral contracts: 9 25% over Revenue
– 9.25% over revenue minus Costs
– Other bilateral contracts: 9.25% over Revenue
minus Costs
76
Contacts:ri.aeseletropaulo@aes.com
ri.aestiete@aes.com
The statements contained in this document with regard to the business prospects, projected operating and financiallt d th t ti l l f t b d th t ti f th C ’ M t i
+ 55 11 2195 7048
results, and growth potential are merely forecasts based on the expectations of the Company’s Management inrelation to its future performance. Such estimates are highly dependent on market behavior and on the conditionsaffecting Brazil’s macroeconomic performance as well as the electric sector and international market, and they aretherefore subject to changes.
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