August 12, 2004August 12, 2004

Results of 2nd quarter of 2004Results of 2nd quarter of 2004

• Market

• Finance and OperationalPerformance

• Debt Profile

• Operating Performance

• Financial Performance

Conclusion

3

4

883 877

2.745

2.4242.278

2.902

2.2212.431

Residential Industrial Commercial Other

2Q03 2 Q04

8.330

8.224

8.330

8.438

2 Q032 Q04 w/ out fraud rec.2 Q04

5,7%

-8,4% 7,0%

-0,7%

1,2%

-1,4%

8.330

Comparision of Consumption in GWh

With Fraud Recovery

5

2.745

2.4242.278

883

2.615

2.291

2.819

877

2.798

2.3652.3312.191

Residential Industrial w/out Free

Commercialw/ out Free

Other Industrial w/Free

Commercialw/ Free

2 Q03 2 Q04

2,7%

-9,6% 2,3%

-0,7%

7,0%

3,2%

8.341

8.533

8.224

8.858

Total w/ out Free Total w/ Free

2 Q03 2 Q04

3,8%

-1,4%

Comparision of Comsuption in GWh

Obs: the graphics not consider own consumption

w/ out Fraud Recovery

6

Actual Situation

Migration of 30Consumers

27Consumers renewed

Contracts

Jan- Jun 2004

2,2%

2,6%

% marketBilled in 2003

Total of 55Free Clients 7,9%

Retention of PotenciallyFree Consumer

• Intensification of visits to consumers

• Value adding to the captive supply through:• The selling of “ Interruptive Energy”• Payments of Bills with Credits of ICMS (Merchandise and Service Circulation Tax)• Energy Efficiency Projects• Beneficit Plans (Load Management and Preventive Maintenance)

7

1 Q04 2 Q04

Net Revenue 1.578,8

Operating Expense (1.392,7)

EBITDA * 253,1

Financial Revenue(Expense)**

(86,2)

Extraordinary ItemsNet of Tax Effects

(85,6) -0,3%

Net Profit (Loss) (13,6) 8,1

1.714,6

(1.474,9)

306,6

(144,3)

(85,4)

Results – 2nd Quarter 2004

8,6%

5,9%

21,2%

67,4%

159,2%

7% Growth in Eletropaulo’s billed consumption and loss recoveries in the amount of R$17.8 million

112% Increase in the account of other operating expenses, as a result of PDD growth

Agreements with town halls in the last quarter reduced PDD of that period

Increase in the Net Operating Revenue

6.8% depreciation of Real compared to Dollar in the periodIncrease of the debt in national currency stemming from the conversion of debts in US$ into R$ caused an increase of financial charges in national currency

Increase in the net revenue higher than increase in operating and financial expenses

(*) Without adjustments(**) Consolidated Result Values

In R$ Million

8

R$ 306,6 MM

R$ 23,6 MM

R$ 404 MM

1st Quarter 2004

R$ 253,1 MM

R$ 68,9 MM RTE

R$ 19,3 MM

R$ 341 MM

R$ 74,1 MM RTE

EBITDA Adjust

2nd Quarter 2004

EBITDA (With the effect of Provisions and Debt Confession IIa)

Debt Confession IIa

ADJUSTED EBITDA

EBITDA (With the effect of Provisions and Debt Confession IIa)

Debt Confession IIa

ADJUSTED EBITDA

18,5% Increase

9

39.090 70.028

320.991286.654

360.568

289.041

180.376217.307

289.000

1998 1999 2000 2001 2002 2003 1 Q04 2 Q04 2004 (e)

R$ Mil

Investiments Projects for 2004 – R$ million

Investiments in 2004

22Technical losses, COE, automation and billingSupply Quality

289TOTAL

89 Personnel

13 (Vehicles, IT, furniture and equipmentSpecific Expenses

14 P&D, Energy Efficiency and ERACRegulatory Obligations

14 Recovery of Commercial LossesLosses

26 Safety (improvements to the grid)

8 Modernization of the SystemMaintenance

53 System Expansion

50 Customer ServiceMarket Growth

10

• Eletropaulo received on June 3rd the CVA loan. The amount was used to pay:

CVA LoanR$ 521 MM

Intra-sectorObligationsR$ 312 MM

Net Amount Receveid R$

209MMTranche C

R$ 53,83 MMUS$ 6,01 MM

Tranche B R$ 13,78 MMUS$ 3,16 MM

Tranche AR$ 13,19 MMUS$ 8,69 MM

Tranche D R$ 62,53 MMUS$ 3,4 MM

EffectiveDown Payment

Tranche CR$ 51,16 MMUS$ 5,71 MM

Tranche B R$ 9,26 MM

US$ 2,13 MM

Tranche AR$ 5,18 MM

US$ 3,42 MM

Tranche D R$ 76,85 MMUS$ 4,17 MM

OutstandingDown Payment

Base Down Payment – CVA Loan

The remaining Down Payment will be made with the funds from the 3rd tranche of Rationing

11

1Q04 2 Q04LT ST

R$ 5.228 mm

85%

15% 19%

81%

1.090

CVA

4.522

808

4.420

R$ 5.612 mm

ST X LT Indebtedness

12

78%

22%

5,4% Exchange Exposure

76%

24%

R$

US$

Hedge of 16,3% 20% Exchange Exposure

Hedge of 75,1%

• The maturities of debts in US$ until the end of 2006 are Hedged

Indebtness 2nd Quarter 2004

R$

US$

Consolidated debt - Mar/31/2004(R$5.2 bn, of which R$1.2 bn

denominated in US$)*

Consolidated debt – Jun/30/2004(R$5.6 bn, of which R$1.2 bn

denominated in US$)*

(*) Values converted by the X-rate of the end of each month: Mar/ 2004 – 2,9086 Jun/ 2004 – 3,1075

13

35 30 30 33 30 30

143

30 30 4315 15 15

143

11 11 12 12 12 1231

32

32 32 3312

48

5

66

4

6

33

162

Jan Feb Mar Apr May Jun DownPayment

Jul Aug Sep Oct Nov Dec OutstandingDownpayment

R$ BNDES US$ *

Effective

Maturity of Commercial Pappers

US$ 42,9 million

Provision

2004 Amortization Schedule

R$ Million

(*) Values converted using the X-rate of 3.1075 for the months as of July 2004.

For the effective values, X-rate of the end of each month was used.

14

Ratings

FITCH S&P FITCHAAA AAA AAAAA+ AA+ AA+AA AA AAAA- AA- AA-A+ A+ A+A A AA- A- A-BBB+ BBB+ BBB+BBB BBB BBBBBB- O O O BBB- BBB-BB+ O BB+ BB+BB X X BB BBBB- X BB- BB- O X O XB+ B+ B+ X OB X B B XB- O O B- B- O OCCC+ CCC+ CCC+CCC X CCC CCC XCCC- X CCC- CCC- XCC X CC CC XC O C C ODDD X O O SD DDD O X O XDD X D DD XD X D

2000 2001 2003 2000 2001 20032002 2004

International Scale Local Currency International Scale Foreign Currency

2002 2004

Watch Positive

It is worth mentioning that S&P shall reassess the rating recently attributed to the Company after it completes the assessment of Eletropaulo’s financial projections.

X S&PO Fitch

15

Revision RevisionPrivatization

Annual Adjustment (X Factor = 0 in the first 4 years)

Annual Adjustment (X Factor/=0)

0 1 2 3 4 5 6 7 8 9 100 1 2 3 4 5 6 7 8 9 10Year

18,62%*18,62%*

Average Index Average Index(considering adjustment of 17.91%) (considering adjustment of 18.62%)

High Voltage(2,3 kV or higher)

Baixa Tensão (below of 2,3kV)

FINISH 2006

Consumer Group

24,03% 24,81%

13,96% 15,36%

Tariff Revision

* The index of 17.91% will be applied until Cesp solves its situation of default with the payment of some sector charges

16

1,70%

9,42%

4,12%

3,39%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

1999 2000 2001 2002 2003 2004

Parcel B Parcel A CVA Deferred CVA 2003/2004 IGPM IPCA

Tariff Evolution

50 % CVA 2002-2003

100% CVA 2003-2004

17

X-Factor – Aneel`s Res. n# 055

X (Xe + Xc) xx (IGPM - Xa) ++ Xa

(2,37% + 0,71%)

(9,61% - 1,08%)

1,08%

X 4.43%4.43% IGPM -X 1,051821,05182

18

19

Contracts PortfolioContracts Portfolio

0%

25%

50%

75%

100%

2003 2004 2005 2006

Piratininga

Nacional

Bragantina

Bandeirante

Elektro

CPFL

Eletropaulo - IC

Eletropaulo - BC

20

• The tariffs of initial contracts are adjusted annualy in accordance with the calculation formula provided for in the Concession Contract:

• In February, the contracts of Empresa de Eletricidade Bragantina S.A. (“EEB”) and Companhia Nacional de Energia Elétrica (“CNEE”) wereadjusted by 8.20% on average

• In April, the initial contract with CPFL - Companhia Paulista de Força e Luz was adjusted by 6.15%

• Following event: In July, the Initial and Bilateral contracts with Eletropaulo were adjusted by 6.99% and 9.61%, respectively

• The remaining initial contracts will be adjusted in August (Elektro) and October (Piratininga and Bandeirantes)

Tariff Adjustment Index = VPA + VPB x IGP-MRevenue

Tariff AdjustmentTariff AdjustmentTariff Adjustment

21

EnergyEnergy Balance Balance –– 11stst HalfHalf

TOTAL

6.042.054

MRE

=

Gross Generation x Billed Energyin MWh

AES Tietê generated more than 8% of its assured energy

Caconde234.265Euclides322.063

Limoeiro94.044

Ibitinga382.943

Bariri339.386

Barra Bonita310.318

Água Vermelha3.091.165

Promissão536.181

Nova Avanhandava714.839

Mogi Guaçu16.850

Bandeirante290.732

Nacional69.483

Bragantina110.637

Elektro469.379

Eletropaulo - CI937.696

Piratininga300.516

CPFL555.199

Eletropaulo - Bilateral2.862.758

BILLED

5.596.401

* After deducing own consumption and transmission losses, the difference is addressed to the Energy Reallocation Market - MRE

22

StoredStored EnergyEnergy

10

30

50

70

90

Jan

Fev

Mar

Abr Mai

Jun

Jul

Ago Se

t

Out

Nov

Dez

GW

- m

onth

2000 2001 2002 2003 2004

Source: National System Operator – ONS; July/04

Southeast Reservoirs

23

1st Half 03

Net revenue 41,8%

Operating Expense 37,8%

Ebitda 38,3%

Financial Revenue(Expense)

-12,9%

Result before taxes

Net Profit

Reduction of the financial expenses (IGP-M lower than that of the same period in the previous year)Increase of financial expenses due to the increase of cash

The increase of operating expenses did notabsorb all the increase of the net revenue

Feb/04: “Financial Excess” (R$7,3 thousand)Provision for energy from ItaipuPurchase of energy from DukeFree and short-term energyTransmission and connection charges

347,8 493,3

(100,2) (138,1)

279,7 386,9

(163,5) (142,4)

84,0 212,5

Increase due to the replacement of another25% of the energy contracted throughtbilateral contractsTariff rewiew of three initial contracts

1st Half 04in R$ million 2003

778,8

(184,1)

594,7

(251,7)

246,5

195,4 153%Grow of revenueFinancial expenses lower than that of the 1Q0355,4 140,2

Statements of Results 1st HalfStatements of Results 1Statements of Results 1stst HalfHalf

Conclusion

• Eletropaulo closed the 2nd quarter of 2004 with a net profit of R$8.1 million, as opposed to the loss of R$13 million of the 1st quarter, as a result of the recovery of its billed market

• Eletropaulo has been successful in its program for retention of potentially free consumers, reducing its potential loss.

• Eletropaulo permanently solved its liquidity problem and presently has an indebtedness level sustainable and compatible with its cash generation, besides of strongly reduced its exchange rate exposure to 5.4% of the debt in dollars.

• The profit of R$140 million presented by Tietê represents an increase of 153% in relation to the same period in 2003, confirming our projections of revenue and profitability growth

• The distribution of dividends to Tietê’sshareholders in the amounts R$87.3 million in May, relating to the profit remaining from 2003 and R$66.6 million on August 10, relating to 50% of the profit verified in the first half of 2004, reinforces Tietê’s position as a Company that is committed to the return on its shareholders’ investments.

2512 de agosto de 200412 de agosto de 2004

Resultados do 2º trimestre 2004Resultados do 2º trimestre 2004