August 11, 2005August 11, 2005

2nd quarter 2005 Results2nd quarter 2005 Results

• Market

• Tariff Adjustment

• Financial and Operating

Performance

• Debt Profile

• Operating Performance

• Financial Performance

Conclusion

4

Highlights of the quarterHighlights of the quarter

• Eletropaulo reported a net income of R$ 136.8 million in 2Q05, reversing the loss of R$ 16.7 million posted in 1Q05

• Issue of bonds in the amount of R$ 474 million in the international market

• FITCH Ratings raised the Company's local and foreign credit rating from “B-” to “B”

• Subsequent Event :• Tariff Adjustment of 2.12%, effective as of July 4, 2005

5

Perfil do Mercado Consumidor Perfil do Mercado Consumidor

31,8%

24,8%

26,3%

9,9%7,2%

32,3%

20,8%

26,6%

7,4%

12,9%

40,9%

20,2%

29,5%

1,4%8,0%

41,1%

18,9%

3,5%

30,0%

6,5%

ResidencialIndustrialComercialOutros

TUSD

ResidencialIndustrialComercialOutros

TUSD

Con

sum

ptio

nR

even

ue

2Q04 - GWh 2Q05 - GWh

2Q04 – R$ 2Q05 – R$

6

Comparison of Consumption in GWhComparison of Consumption in GWh

NOTE: Charts do not consider own consumption

*These amounts do not include the fraud recovery agreements of April 2004, which produced an additional revenue of 213,611 MWh

876641680

1.182

2.819

2.1912.331

2.952

1.902

2.434

Residen

tial

Indus

trial

Commerc

ial

Other

TUSD

2Q04* 2Q05

4.7%

-13.2%4.4%

-22.4%

8.217

8.858

9.150

7.968

Market Billed Market Billedwith TUSD

2Q04* 2Q05

84.5%

3.3%

-3.0%

7

Comparison of Consumption 2Q04 x 2Q05Comparison of Consumption 2Q04 x 2Q05in in GWhGWh

Residential Industrial Commercial Other TUSD Total

4,7% 3,3%

84,5%

-22,4%4,4%-13,2%

NOTE: Charts do not consider own consumption

*These amounts do not include the fraud recovery agreements of April 2004, which produced an additional revenue of 213,611 MWh

8

Retention of Potentially Free ConsumersRetention of Potentially Free Consumers

5,6%

13,3%

81,1%

Captive Consumers Free Consumers Pontially Free Consumers

Captives Consumers X Free% total load of concession area in 2004 (35.341GWh)

Net Revenues with TUSD*R$ million

1930

3848

54

78

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05

* TUSD – Tariff for the Use of the Distribution System

9

3,7%6,3% 4,5% 2,5% 3,6% 4,8%

7,5%7,6% 12,1%

11,8% 7,3%1,6%

-4,3%1,7%

16,9%7,1%

-10%

-5%

0%

5%

10%

15%

20%

1999 2000 2001 2002 2003 2004 2005

Parcel B Parcel A PIS/COFINS IGPM

Tariff EvolutionTariff Evolution

Adjustment

2.12%

6.4%

Factor X = 2.43%

18.6%

11.6%

14.3%17.6%

11.1%

13.8%

10

Item – R$ thousand Previous Present Variation

Base of the net remuneration R$5.24 R$ 4.77

Gross basis R 8,275 R$ 9,885

Depreciation R$ 327 R$ 426 R$ 99

TOTAL R$ 42

Remuneration rate 17.07% 17.07%

Remuneration R$ 895 R$ 814 (R$ 81)

Depreciation rate 3.95% 4.31%

Additional O&M costs - R$ 24 R$ 24

Completion of Tariff Review 2003Completion of Tariff Review 2003

• Authorized increase in adjustment rate from 10.95% to 11.65%• R$ 42 million added to the remuneration granted for tariff year 2003-2004

• Restated amounted totals R$ 106.9 million, with an impact on 2Q05 results

• Recovery of resources will take place during tariff year 2005-2006

R$ 42

R$ 106.9

11

2Q04 2Q05

Net Revenue 1,714.6

Operating Expenses (1,463.9)

EBITDA * 317.6

Financial Income(Expenses) **

(155.3)

Extraordinary Items Net of Tax Effects

(85.3)

Net Income (Loss) 8.1 136.8

2,275.5

(1,777.8)

571.6

(77.9)

(85.0)

Results Results –– 2Q04 x 2Q052Q04 x 2Q05

32.7%

21.4%

-0.4%

79.9%

-49.9%

1,597.0%

(*) Without adjustments(**) Considering consolidated results

R$ millionAverage tariff adjustment of 18.6% in 2004Completion of Tariff Adjustment 2003, which produced a R$ 106,9 million revenue in 2Q05Accounting reversion of R$ 72.0 million in 2Q05, related to court disputes of PIS/PASEP payment

Growth in operating revenue, offset by increased operating expenses

24.4% appreciation of the Brazilian Real against the US dollar, producing a positive impact on the currency variation account Reversal of R$ 98.,0 million in 2Q05, relative to court disputes involving the payment of PIS/ PASEP taxes

Operating income increase and net financial expenses reduction

Increase in expenses related to items of Parcel A (Tariff Adjustment of 2004)

Start of accounting deferred CVA of tariff year 2002-2003, as of 3Q04

Beginning of accounting CVA energy in 1Q05

12

1Q05 2Q05

Net Revenue 1,979.6

Operating Expenses (1,769.9)

EBITDA * 282.,7

Financial Revenue(Expenses)**

(105.,0)

(85.,8)

Net Profit (Loss) (16.8) 136.8

2,275.5

(1,777.8)

571.6

(77.9)

(85.0)

Results Results –– 1Q05 x 2Q051Q05 x 2Q05

14.9%

0.4%

-0.9%

102.2%

-25.8%

N.M.

R$ million

(*) Without adjustments(**) Considering consolidated results

Extraordinary Items Net of Tax Effects

Increase in energy consumption of classes: residential (4.1%) commercial (0.6%)Completion of Tariff Adjustment 2003, which produced a R$ 106,9 million revenue in 2Q05Accounting reversion of R$ 72.0 million in 2Q05, related to court disputes of PIS/PASEP payment

Increase in personnel expenses (11.7%) and materials and third-party services (9.1%)Acquisition of a larger volume of energy because of seasonal changes in the following contracts (i) bilateral, with AES Tietê, (ii) Itaipu and (iii) bilateral, with biomass power plants

Increase in operating revenue

24.4% appreciation of the Brazilian Real against the US dollar, producing a positive impact on the currency variation account Reversal of R$ 98.,0 million in 2Q05

Operating revenue increase and net finance expenses reduction

13

EBITDA without adjustments

ADJUSTED EBITDA

Debt Confession IIa

2nd quarter 2005

58.7% Increase

ADJUSTED EBITDA

RTE

R$ 571.6

R$ 15.7

R$ 599.3

R$ 84.0

Adjusted EBITDA Adjusted EBITDA R$ millionR$ million

EBITDA without adjustments

Debt Confession IIa

1st quarter 2005

RTE

R$ 282.7

R$ 12.9

R$ 377.6

R$ 82.0

PIS – accounting reversal

R$ 72.0PIS – accounting reversal

R$ 0

14

186

360-390

144

297

33

32

15

2003 2004 1H05 2005(e)

Capex Self Financed

Total 72

Total Recorded 80

Capex- 2Q05

31

8

Loss Recovery 5

Personnel 18

Others 10

Customer Service and System Expansion

Maintenance

Self Financed 8

Capex in 2Q05 Capex in 2Q05 R$ millionR$ million

15

Consolidated IndebtednessConsolidated IndebtednessR$ millionR$ million

71%

23% 27%

29%

77% 73%

0%

50%

100%

2003 2004 2Q05

ST LT

1.424,51.778,8 1.916,9

762,5

1.102,0 1.097,0

3.090,82.402,7 2.242,5

2003 2004 2Q05

FCESP CVA/RTE Private Creditors

5.278 5.284 5.256 5.278 5.284 5.256

Short Term vs. Long TermShort Term vs. Long Term Debt EvolutionDebt Evolution

16

Hedging StrategyHedging Strategy

0%10%20%30%40%50%60%70%80%90%

100%

2000 2001 2002 2003 2004 2Q05

Local currency Hedged Foreign currencies

41%

41%

18% 14%

61%

25%

42%

4%

54%

3%

35%

62%

17%

83%

100% of foreign currencies debt is

hedged, considering the financial costs

R$3,473 R$4,490 R$5,902 R$5,278 R$5,284

million

12%

88%

R$5,256

17

Amortization ScheduleAmortization ScheduleR$ million R$ million

*Exchange rate on 6/30/2005 US$/R$=2.3504** Amortization of debts with creditors included in the Company’s Debt Profile Adjustment Program, paid on:

01/12/2005 with the third tranche of a loan in the amount of R$ 185 million to cover the losses from the energy rationing period.06/29/2005 of R$ 175.9 million and 07/28/2005 of US$ 25.6 million, with 50% of the resources coming from the issue of bonds

319 289 193

510 493 458

158

627270

300

485

159

102

133101

198

103

83

99

Pre

paym

ent*

*

1H05

2H05

2006

2007

2008

2009

2010

R$ BNDES US$ *

Effective payments

18

Financial StrategyFinancial Strategy

• Bonds issue in 06-28-2005

• Principal: R$ 474,060,000.00

• Term: 5 years

• Interest rate: 19.125% p.a.

• Interest rate and amortization:

• half-yearly interests

• amortization at maturity

D2003

B2005

Ratings Increase

B –2004

• Successful Bonds issue

• Estimates of growth in operating revenues and cash flow

• Expected decrease in debt servicing

• Better outlook for the electric sector

19

20

Secondary Public OfferIn June 2005, a secondary public offer of shares was concluded by a group of minority shareholders, namely Banco Banespa, Banco Santander e Banco Nossa Caixa. The offer represented 45.1% of AES Tietê’s preferred shares and 12.8% of the common shares (28.4% of total capital)

“Platinum List 2004“ – Forbes Magazine AwardAES Tietê was placed 8th in the overall classification of Forbes Brasil Magazine’s Platinum List 2004, which ranks the 200 better Brazilian public companies

“Maiores e Melhores” (The Biggest and the Best) – Exame Magazine AwardAES Tietê was considered by Exame Magazine’s “Maiores e Melhores” annual listing as the company with the best performance in the public service area during 2004

Highlights for the QuarterHighlights for the Quarter

Common Preferred TotalAES Tietê Empreendimentos 61,7% 14,3% 38,9%Energia Paulista 0,0% 18,0% 8,7%AES Tietê Participações 9,6% 0,0% 5,0%Banespa 0,0% 0,0% 0,0%Banco Nossa Caixa 0,0% 0,0% 0,0%Eletrobras 0,0% 16,4% 7,9%Others 28,7% 51,3% 39,6%TOTAL 100,0% 100,0% 100,0%

Shareholders After the Public Offering

21

The Initial Contracts are readjusted on a yearly basis according to the following pre-established formula :

Tariff adjustments in 2005:• February: Bragantina = 12.4%, the new tariff is R$ 65.3 / MWh

Nacional = 12.4%, the new tariff is R$ 69.4 / MWhApril: CPFL = 10.6%, the new tariff is R$ 73.8 / MWhJuly: Eletropaulo = 9.1%, the new tariff is R$ 76.0 / MWh

The Bilateral Contract with Eletropaulo is adjusted in July of each year, according to the IGP-M (general price index - market)

In 2005, the tariff was adjusted in 7.1%, to R$ 132.7 / MWh

Tariff AdjustmentTariff Adjustment

Rate for Tariff Adjustment = VPA + VPB x IGP-MRevenue

22

Energy Balance Energy Balance –– 1H051H05

MRE*

=

Energy Generation x Billed Energyin MWh

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

AES Tietê generated 27.9% over its assured energy

Caconde213,607Euclides301,477

Limoeiro88,836

Ibitinga352,748

Bariri314,.265

Barra Bonita286,067

Água Vermelha3,958,255

Promissão527,559

Nova Avanhandava719,573

Mogi Guaçu20,850

Bandeirante149,.223

Nacional46,447

Bragantina73,453

Elektro232,356

Eletropaulo - CI451,752

Piratininga151,947

CPFL279,373

Eletropaulo - Bilateral4,006,477

TOTAL

6,783,237

BILLED

5,391,027

23

Stored EnergyStored Energy

* Risk aversion curve in the Southeast region - ONS Source: “Operador Nacional do Sistema” – ONS (National System Operator)

Southeast Region Reservoirs

0

20

40

60

80Ja

n

Feb

Mar Ap

r

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

% o

f Max

Sto

red

Ener

gy

2005Risk Aversion Curve* - 2005Risk Aversion Curve* - 2006

24

Income StatementIncome Statement

Net Revenues 9.0%

Operating Costs 2.6%

Ebitda 10.5%

Financial Income(Expenses)

-47.3%

Income before taxes and shareholders

Net Income

Lower variation of the IGP-M index, from 6.8% in 1H04 to 1.7% in 1H05 Increase in financial income, due to a greater cash balance and increased interest rates

Increase in EBITDA Margin from 78.3% in 1H04 to 79.5% in 1H05

Increase in the Financial Compensation for Use of Water Resources and from the operating provisions

Tariff adjustments and de-contracting of 25% of volume from initial contracts, which were transferred to the bilateral contract

1H04in R$ million

537.5

(142.1)

427.4

(75.0)

318.8

210.3 50.0%Net income increase due to better operating and financial performance

1H05

493.3

(138.4)

386.7

(142.4)

212.5

140.3

25

Operating Costs and ExpensesOperating Costs and Expenses

End of the obligation for payment of the Public Asset Tax (UBP) in 2004 InsurancesWaterwaysR&D

14.8

10.4

24.0

23.4

12.5

32.0

16.4

8.5

142.1

End of purchases from ItaipuR$ 7.3 million relative to "Financial Surplus" MAE expense, which was accounted in 1Q04

in R$ million 1H051H04

Increase in the Updated Reference Tariff – TAR (R$ 52,67MW/h )in 1Q05 (TAR x 6.75% x Generated Energy) and in the volume of generated energy

Decrease in connection charges established by AneelTransmission – increase due to greater volume of energy sold under the bilateral contract

Provision for the financial investments that the Company held in Banco Santos

13.5

10.2

18.0

26.2

21.1

31.,8

0

17.6

138.5

Personnel

Third Parties Services

Financial Compensation

Connection and DistributionNetwork Charges

Purchased Power

Depreciation andAmortization

Operating Provisions

Others

Total

26

Financial InvestmentsFinancial Investments

Foreign Bonds - US$ - Aa38%

Private Bonds - A31%

Títulos Estrangeiros -US$ - Aa1 7%

BR Federal Bonds - Ba384%

Rating: Moody´s Rating - Local Curreny (long term)

• Financial investments are distributed as shown in the graphic below:

27

Capital ExpendituresCapital Expenditures

• Capex during the 1H05 amounted to R$ 7.2 million and were destined mainly for equipments modernization and waterway improvement

• Main Capex destination:Bariri - re-equipping and modernization of the Generating Unit 2

Água Vermelha - equipment modernization

Reforestation of boarders – Ibitinga, Bariri, Barra Bonita and Promissão

EquipmentWaterwayEnvironmentalOthers

40%

31%

10%

19%

28

Capital MarketsCapital Markets

• In 1H05, AES Tietê’s common shares (GETI3) appreciated by 10.9% and the preferred shares (GETI4) appreciated by 21.7%, while the Bovespa Index posted a decline of 4.4%.

• During the 1S05, GETI3 presented a daily average volume of R$ 1.5 million, being traded in 98% of Bovespa’s trading sessions. GETI4 posted a daily average volume of R$ 1.3 million, traded in 72% of the trading sessions. When compared to the same period of previous year, the average daily value increased by 33% (GETI3) and 145% (GETI4).

• In July, after the offer expired, Tietê’s shares were traded in all Bovespa trading sessions and the daily average values were R$ 3.7 million (GETI3) and R$ 1.8 million (GETI4).

AES TIETÊ vs IBOVESPA (Base 100 = 30/06/04)

189

212

118

50

100

150

200

250

Jun Jul Aug Aep Oct Nov Dec Jan Feb Mar Apr May Jun

GETI3 GETI4 Ibovespa

End of Secondary Offer

29

DividendsDividends

• On August 9 the Board of Directors approved dividend in the total amount of R$ 199.8 million, representing 95% of the 1st half 2005* net income

Dividend Yield** - % Dividend Payout - %

* Date and basis date of payment to shareholders to be defined by the Management** Based in average market price in 1H051- 1H05 proposed dividends annualized2- Values paid in 2002 related to capital reduction

6,6%

12,3%

10,2%

23,6%

11,4%

13,4%

10,9%

17,4%2002

2003

2004

2005

Common Preferred

1

2

95,0%

95,0%

95,0%

2002

2003

2004

20051

2 N.A.

ConclusionConclusion

• Eletropaulo closed the 2nd quarter with increases of 33% in net revenue and 80% in EBITDA, resulting mainly from the completion of the Tariff Review Process of 2003, which produced an additional revenue of R$ 106.9 million, coupled with the reversal of the amount of R$ 72 million relative to court disputes related to the payment of PIS/COFINS taxes, based on a legal opinion that considers the statute of decadence

• Other positive issues in the 2nd quarter 2005:• FITCH Ratings increased the international evaluation of

the Company’s local and foreign credit from “B-” to “B”

• Issuing of R$ 474 million bonds in the international market

• Positive perspectives for the 3rd quarter 2005:• Completion of the Tariff Adjustment Process

• Exclusion of PIS/COFINS from Parcel B

• AES Tietê ended up the first half of 2005 with highly positive results, highlighting:

• Ebitda of R$ 427.4 million, 10.5% above the 1H04, and Ebitda margin of 79.5%.

• Net profit amounted to R$ 210.3 million, with a 50.0% increase due to the better operating and financial results.

• Net margin increased from 28.4% in 1H04 to 39.1% in 1H05.

• Dividends payment of R$ 199.8 million, related to 1H05 earnings results.

August 11, 2005August 11, 20052nd quarter 2005 Results2nd quarter 2005 Results

All statements contained in this presentation related to the outlook of the Companies’ business, projections of operational and financial results, and potential growth represent mere provisions and were based on managements expectations in relation to the future of the Companies. These expectations are highly dependent of market changes, Brazil’s economic outcome, the energy sector and the international markets behavior, being thus subject to change.