2. Index
I. Concession
II. Overview
III. Operational Performance
IV. Financial Performance
V. Conclusion
2
3. Concession
Concession 30 years, assures the right of operating the assets, but not their property
Agreement:
Assets: 10 hydroelectric power plants
Location: Rivers Tietê, Grande, Pardo and Mogi Guaçu, located in the State of São Paulo
Operation historical: Power plants started up operation between 1958 and 1997
Installed Capacity: 2,651 MW
UHE Água Vermelha
Rio Grande
Capacity sold under 100% of assured energy Fernandópolis
long-term contracts (1,275 MW Average)
65km
Votuporanga
95km
SP
Rio Pardo
(PPAs): UHE Nova Avanhandava
Buritama
11km Mococa
UHE Limoeiro 23km
UHE Euclides da Cunha
UHE Promissão Caconde 3km
MS Promissão
38km
Ibitinga
UHE Ibitinga
25km
S.J. do Rio Pardo
Limoeiro: 28km
UHE Caconde
E.Cunha: 14km
MG
Bariri
11km Rio Mogi Guaçu
UHE Bariri AM Mogi Guaçu
Bauru
S. Paulo: 340km
B. Bonita: 100km
Bariri:50km
Barra Bonita
4km Mogi Guaçu
3km
RJ
Rio Paraíba do Sul
UHE Barra Bonita
Rio Tietê
São Paulo
Rio
Parapanema
Rio
Itataré
PR Atlantic
SP
Ocean
3
4. Historical
Secondary Public Offering (Jun)
• Secondary Public Offering was
concluded by a group of minority
shareholders (28.4% of total capital)
New Model for Energy Sector (Jul)
•Federal Government issued new law
for the Electric Energy Sector - the
“New Model”
AES Restructuring (Dec)
• Brasiliana was incorporated to
hold, direct or indirect, the control of
Eletropaulo, Tietê and Uruguaiana
Energia Paulista (Aug)
•Energia Paulista acquired 9.6% of
Tietê’s capital in a public offering
Tietê Privatization (Oct)
• AES Tietê Empreendimentos acquired
Tietê’s control (38% of total capital)
• AES Tietê Participações acquired
another 5% of Tietê’s capital from
former employees
1999 2001 2003 2004 2005
4
6. Assured Energy
During the last 20 years, AES Tietê has generated, in average, 18% above the
Assured Energy
The Assured Energy was expected to be revised in 2004, but this revision was
postponed to 2014 by the Ministry of Mines and Energy
Generation – MW Average
2,000
123% 120% 123%
117% 120%
109% 107%
1,500 98%
81%
1,275
1,000
500
0
1997 1998 1999 2000 2001 2002 2003 2004 9M05
Generation – MW Average Generation/Assured Energy
6
7. Reliability
Failure Index and Equivalent Availability Average of 7.2 years with no LTA (Lost
Factor much better than the maximum Time Accident)
ratios established by Aneel due to the
preventive maintenance program
Failure Index x Equivalent Availability Factor Period without Accidents
97.2% 96.8% 96.1%
94.2% 93.8% Period without
90.9% Power plant
3.0% accidents - Years
2.8%
2.5% Ibitinga 17.4
2.2% 2.3%
MogiGuaçu 10.8
Bariri 9.4
1.1% Nova Avanhandava 7.9
Água Vermelha 7.3
Limoeiro 5.3
Barra Bonita 5.2
2000 2001 2002 2003 2004 9M05 Promissão 3.7
Caconde 2.6
Failure Index Equivalent Availability Factor Euclides da Cunha 2.3
7
8. Stored Energy
The energy storage levels in the Southeast region are comfortable in comparison of
the risk aversion curve
Historical Risk-Aversion Curve
80
% of Max Stored Energy
80
% of Max Stored Energy
60 60
40 40
20 20
0 0
Nov
Oct
Apr
Jun
Aug
Jul
Sept
May
Dec
Mar
Jan
Feb
Nov
Oct
Jul
Dec
Jan
Feb
Jun
Aug
Apr
May
Sept
Mar
2005
2005 2004 2003 Risk-aversion curve - 2005
2002 2001 2000 Risk-aversion curve - 2006
Source: Operador Nacional do Sistema – Nov/05 Source: Operador Nacional do Sistema – Nov/05
Supply x Demand – GW Average
63.9 64.2 64.2
60.4 61.7 60.4 60.8
58.5
54.5 56.6
53.4 56.5
52.8
55.4 54.2 56.5 57.4 56.5 56.5
50.8 51.6
46.3 48.6 47.1 50.4 49.3
2005* 2006* 2007* 2008* 2009* 2010* 2011* 2005* 2006* 2007* 2008* 2009* 2010*
Demand Supply Demand Supply
*Forecast - Source: Apine *Forecast - Source: IBP – Instituto Brasileiro do Petróleo
8
9. Energy Balance – 9M05
Caconde 3.1%
305.2 5.1% CPFL
Euclides 4.2% Energy Generation x Billed Energy 421.0
410.2 in MWh 2.7% Bandeirante
Limoeiro 1.2% 222.6
119.8
4.4% Elektro
Água Vermelha 59.5% 360.8
5,870.1
Barra Bonita 4.1% 1.3% Bragantina
TOTAL BILLED 110.4
399.6
Bariri 4.5% 9,864.5 8,231.3 0.9% Nacional
442.3 71.6
Ibitinga 5.0%
1,633.3* 2.7% Piratininga
492.4
218.1
Promissão 7.8%
764.6 8.3% Eletropaulo - CI
Nova Avanhandava 10.5%
MRE / CCEE 686.1
1,031.4 Eletropaulo - Bilateral
74.6%
Mogi Guaçu 0.3% Tietê generated 19.5% above its 6,140.7
27.9 assured energy
*After deducting own consumption and transmission losses, the difference is directed to the Energy Reallocation Mechanism – MRE
and Chamber of Energy Marketing – CCEE.
9
11. Tariff Adjustment
The Initial Contracts are readjusted annually according to the following pre-
established formula:
Tariff Readjustment Ratio = VPA + VPB x IGP-M
Revenue
The Bilateral Contract with Eletropaulo is adjusted each July according to the IGP-M
(general price index - market) variation
Average Tariff – R$/ MWh
Month of % of Tariff after adjustment 140
Company
Adjustment adjustment (R$ / MWh) 119.2
120
Initial Contracts
Bragantina February 12,4% 65,30 100 94.4
Nacional February 12,4% 69,42
80 73.6
CPFL April 10,6% 73,76
AES Eletropaulo July 9,0% 75,99 60 54.0
Elektro August 5,3% 61,68
Bandeirante October 1,4% 72,77 40
Piratininga October 1,5% 72,81 20
Bilateral 2002 2003 2004 9M05
AES Eletropaulo July 7,1% 132,73
11
12. Income Statement
in R$ million 9M04 9M05
Initial Contracts were adjusted in 8.1%, in average
Increase from 4,0 GWh to 6.1 GWh of energy sold
Net Revenue 740.9 899.4 21.4% through the bilateral contract
R$ 50.5 mi reversal of the provision regarding
Pis/Cofins rate increase on the bilateral and initial
contracts
5.8% Increase in the Financial Compensation for Use of
Operating Expenses (201.6) (213.3)
Water Resources in 29.5%
Operating provisions – R$ 18.3 mi
Ebitda 587.0 734.1 25.1%
Ebitda Margin 79.2% 81.6%
Lower IGP-M index (10.3% in 9M04 versus 0.2% in
Financial Expenses (221.1) (68.9) - 68.8% 9M05) impact on the Eletrobras Debt
Increase in financial income due to a greater cash
balance and increased interest rates
Net Income 209.9 411.1
95.8% Net income increase due to better operating and
Net Margin 28.3% 45.7%
financial performance
12
13. Costs and Expenses
in R$ million 9M04 9M05
21.0 23.7 12.9% 8.25% in payroll increase resulting from the collective
Personnel
bargain
Outsourced Services 15.5 16.8
Increase of Reference Tariff – TAR, to R$ 52,67MW/h in
1Q05 (TAR x 6.75% x Generated Energy) Increase in the
Financial Compensation 27.0 34.9 29.3% volume of energy generated
34.0 37.9 11.5% Decrease in connection charges established by Aneel
Connection and Distrib. Increase in transmission costs due to greater volume of
Network Charges energy sold under the bilateral contract
Purchased Power 29.8 18.1 - 39.3% End of energy purchase from Itaipu
R$ 7.3 million relative to "Financial Surplus" MAE expense,
which was accounted in 1Q04
Depreciation and
47.7 48.0
Amortization
Provision for loss of financial investments held at Banco
Operating Provisions 0 18.3 n.a Santos ( R$16.9 mi recorded in 1Q05)
End of the obligation of payment of the Public Asset Tax
Others 26.8 15.5 - 42.0% (UBP) in 2004
Insurance
Total Waterway
201.6 213.3
R&D
13
15. Capital Expenditures
Capex 9M05: R$ 13.9 million for equipments modernization, enviromental and
waterway improvement
Main Capex destination:
Bariri - re-equipping and modernization of the Generating Unit 2
Reforestation of boarders – Ibitinga, Bariri, Barra Bonita and Promissão
Improvement of the waterway
Capex – R$ million Capex – 9M05
37.5
30.5 8%
25.0
21.9 14%
17.7
12.4 13.9
57%
2000 2001 2002 2003 2004 9M05 2005 21%
Forecast
Revised Equipment
Waterway
Environmental
Others
15
17. Dividends
On September 27, payment of dividends was made in the amount of R$ 199.8 million,
representing a pay-out of 95.0% on net income for the first half of 2005.
Dividend Yield* - % Dividend Payout - %
11.0%
20051 2005 1 R$ 199.8 million 95.0%
10.5%
13.4%
2004 2004 R$ 276.9 million 95.0%
12.3%
11.4%
2003 2003 R$ 185.6 million 95.0%
6.6%
2 23.6%
2002
17.4%
2002 2 NA
voting non-voting
* Based on average quotation for the period
1- Annualized dividends proposed during 1H05
2- Values distributed in 2002 refer to capital reduction
17
18. Stock Market
In the last 12 months GETI4 (non-voting) shares rose 89.8%, while the GETI3 (voting) shares
appreciated by 65.5% and the Bovespa Index rose 29.7% in the same period.
After the secondary public offer:
GETI4 – average daily trading volume increased 562% (R$ 336 thousand in 3Q04 to R$ 2.223
million in 3Q05)
GETI3 – average daily trading volume increased 103% (R$ 959 thousand in 3Q04, to R$ 1.949
million in 3Q05)
AES Tietê vs. Ibovespa - Oct/04 a Oct/05
(Base 100 = 10/29/04)
Secondary
Offering
190 190
170
166
150
130 130
110
90
O c t- 0 4 J a n -0 5 A pr-0 5 J u l- 0 5 O c t- 0 5
GETI3 GETI4 Ibovespa
18
19. Capital Markets
Current Market Capitalization – R$ 4.5 billion (as 30th of November, 2005)
6,000
R$ 546 million R$ 2.1 billion
5,000 Cesp spin-off – New Model Law was
Tietê was R$ 1.4 billion published
created Brasiliana was
4,000 created as part of
AES and BNDES
R$ 846 million
agreement
AES acquired
3,000 Tietê at
Privatization
Auction
2,000
R$ 3.6 billion
Secondary Offering
1,000 Santander/Banespa
e Nossa Caixa sold
their interest in Tietê
-
Jun-99
Jun-00
Jun-01
Jun-02
Jun-03
Jun-04
Jun-05
Dec-99
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
19
20. Conclusion
AES Tietê ended up the 9M05 with highly positive results, highlighting:
Ebitda of R$ 734.1 million, 25.1% above the 9M04, and Ebitda margin of 81.6%.
Net profit amounted to R$ 411.1 million, with a 95.8% increase due to the better
operating, financial results and the reversion of Pis/Cofins provision.
Net margin increased from 28.3% in 9M4 to 45.7% in 9M05.
20
21. December, 2005
Representations contained herein relating to perspective of Company business,
projections of operating and financial income, as well as those relating potential
growth of the Company constitute mere projections and were based on Management
expectations in regard to the future of the Company. Those expectations are highly
dependent on market changes, overall economic performance of Brazil, in the
Segment, International Markets, being thus subject to change.
21
