2005 ResultsFebruary 17, 2006

2

Highlights Highlights -- 20052005

1Tri05

2Tri05

3Tri05

4Tri05

• Corporate Sustainability Index (ISE) – 12/01/2005

• Ratings increased - 12/13/2005 - S&P and Fitch (local credit from “BB+” to “BBB”)

• 9th issuance of debentures – R$ 250.0 million (12/26/2005)

• Loss of R$ 184,4 million in 2005 (extraordinary events)

• Tariff Adjustment – 2.12% (07/04/2005)

• MGSP Provision of R$ 346.4 million

• Payment of AES Tietê PIS/Cofins taxes increase – R$ 43.7 million

• 8th issuance of debentures – R$ 800.0 million (09/27/2005)

• Ratings increased - 06/14/2005 - Fitch (local credit from “BB” to “BB+”)

• Issuance of R$ 474.0 million in bonds denominated in Reais (06/28/2005)

• Completion of Tariff Review 2003 – Additional value of R$ 106.9 million

• Receiving of the third tranche of the Rationing Loan amounting R$ 243.3 million (01/11/2005)

3

Consumption in GWhConsumption in GWh

NOTE: Charts do not consider own consumption

2,6753,304

9,4368,670

11,258

4,865

2,598

9,593

7,580

11.863

Residen

tial

Industrial

Commercial

Other

TUSD

2004 2005

5.4%

-12.6%1.7%

-21.4%

32,66835,343 36,499

31,634

Market Billed Market Billedwith TUSD

2004 2005

81.9%

3.3%-3.2%

In 2005, AES Eletropaulo’s total market grew 3.3%

4

Energy SupplyEnergy Supply

• Initial Contracts ended in 2006

2004 2005 2006 (e)

Proinfa

Auction

Other bilateral contracts

Bilateral contracts withTietêInitial contracts

Itaipu

2004 2005 2006 (e)

Proinfa

Auction

Other bilateral contracts

Bilateral contracts withTietêInitial contracts

Itaipu32%32% 31%31%

51%51%

19%19%

15%15%

21%21%

2%2%

27%27%

2%2%

GWhGWh

32%32%

29%29%

2%2%

36%36%

1%1%

5

Loss evolution

12.91%13.53%13.23%

7.31%7.93%7.63%

2003 2004 2005

Total Commercial

Collective Rate

99.03%

97.45%98.48%

2003 2004 2005

Operating Operating Loss and Collective Rate Loss and Collective Rate -- 20052005

6

186

297355

300

49

32

33

2003 2004 2005 2006(e)

Capex Self Financed

Total 354.8

Total Recorded 403.6

Capex - 2005

153.9

33.5

Loss Recovery 21.0

Personnel 77.4

Others 30.0

Customer Service and System Expansion

Maintenance

Self Financed 48.8

Capex 2005 Capex 2005 R$ millionR$ million

Information Tecnology 39.0

7

Results 2005Results 2005

Net Revenue

R$ million 2004 2005 2005 X 2004

Operating Expenses

Adjusted EBITDA

Financial Income(Expenses)*

Extraordinary ItemsNet of Tax Effects

Net Income (Loss)

EBITDA

7,394.1

(6,340.5)

1,322.3

1,722.7

(504.0)

(341.0)

5.6

8,296.8

(7,476.4)

1,116.8

1,933.4

(368.2)

(340.9)

(184.4)

12.2%

17.9%

26.9%

N.A.

12.2%

N.A.

15.5%

Margin 23.3% 23.3%

(*) Considering consolidated results

Average Tariff Adjustment of 2.12%Completion of Tariff Review 2003 (R$ 106.9 million)Increase of 3.3% in total market (captive + free consumers)

Reversal of allowances in the amount of R$ 72 million in 2Q05 due to Pis/Pasep statute of limitations

Extraordinary allowances in the amount of R$ 523 million (MGSP and RTE)

Increase of 4% in energy purchase expensesIncrease of 32% and 29% in CCC and CDE expenses

respectivelyEnergy Efficiency Program (PEE) – aditional expense of R$ 54

million

Aditional revenue of R$ 121.8 million in 4Q05 due to alterationin RTE remuneration rules

Reversal of allowances in the amount of R$ 98 million in 2Q05 due to Pis/Pasep statute of limitations

8

EBITDA

Adjusted EBITDA

Debt Confession IIa(CESP Foundation)

2005

Increase 12.2%

Adjusted EBITDA

RTE

R$ 1,116.8

R$ 46.4

R$ 1,933.4

R$ 334.9

Adjusted EBITDA Adjusted EBITDA R$ millionR$ million

EBITDA

Debt Confession IIa(CESP Foundation)

2004

RTE

R$ 1,322.3

R$ 88.2

R$ 1,722.7

R$ 312.1

PIS – Reversal of allowances

R$ (72.0)

Provision - MGSPR$ 330.5

Provision - RTER$ 176.9

9

EBITDA

4th quarter 2005

Increase 38.9%

RTE

R$ 290.0

R$ 5.7

R$ 556.2

R$ 83.6

Adjusted EBITDA Adjusted EBITDA R$ millionR$ million

EBITDA

3rd quarter 2005

RTE

R$ (27.5)

R$ 12.1

R$ 400.3

R$ 85.3

R$ 330.5 Provision - RTER$ 176.9

4Q05 results accounted a profit of R$ 19.6 million, versus a loss of R$ 324.1 million in 3Q05 and a profit of R$ 17.5 million in 4Q04

Debt Confession IIa(CESP Foundation)

Provision - MGSP

Adjusted EBITDA Adjusted EBITDA

Debt Confession IIa(CESP Foundation)

10

R$ (228.3) million

R$ (28.8) million

R$ (340.1) million

R$ (36.4) million

R$ (53.8) million

R$ (46.1) million

R$ (28.9) million

R$ (31.5) million

Impacts on results Impacts on results –– 20052005

Provision – Agreement signed with MGSP

Increase PIS/COFINS’s taxes – Agreement with AES Tietê

Extraordinary Items (CVM 371)*

RTE Provision – Recovery term

Change on calculated rules – R&D and Energy Efficiency

Provisions – Other Municipal Governments

Differed Amortization – Debt downpayment

Others

Total Impacts on Total Impacts on EletropauloEletropaulo’’ss Results Results

Impact Net of Taxes Effects (34%)

*2006 will be the last year which Eletropaulo’s results will be affected by the remaining recognition of extraordinary items of approximately R$340 million – off balance debt with the Pension Fund

R$ (793.9) million

11

ConsolidatedConsolidated IndebtednessIndebtednessR$ millionR$ million

71%

23%

29%

77%

27%

73%

0%

50%

100%

2003 2004 2005

ST LT

1,424.5 1,778.8 2,064.6

762.5

1,102.0 788.2

2,222.52,402.73,090.8

2003 2004 2005

FCESP CVA/RTE Private Creditors

5,278 5,284 5,0755,278 5,284 5,075

ST vs LT Debt Evolution

• Hedge - 85% of foreign currency debt is hedged

0 . 19 %

4 0 . 7 0 %

5 . 9 8 %

10 . 8 4 %

4 2 . 2 9 %

Others – R$

IGP-DI

CDI/Selic

Libor

Fixed

13

12

Avg Cost and Duration - Total Debt

100.7%

105.6%

Dec-2004 Dec-2005

Downpayments made to banks:

• 3rd Tranche of Rationing Loan: 76% R$184,472,275

• Bonds: 50% R$237,030,000

• Debentures 8th: 90% R$720,000,000

• Debentures 9th: 90% R$225,000,000

• Cash sweep R$96,437,604

Total R$ 1,462,939,879

2005 Debt Issuances2005 Debt IssuancesFinancial RestructuringFinancial Restructuring

2.86 years

3.69 years

BONDS (June 2005)

DEBENTURES 8th issuance (September 2005)

DEBENTURES 9th issuance (December 2005)

• Principal: R$ 474 million

• Tenor: 5 years

• Interest rate: 19.125% p.a.

• Interest and Amortization:

• semiannual interes, bullet principal

• Principal: R$ 800 million

• Tenor: 5 years

• Interest rate: CDI +2.90% p.a.

• Interest and Amortization:

• Semiannual interest, Annual Principal

• Grace period: 23 months

• Principal: R$ 250 million

• Tenor: 8 years

• Interest rate: CDI + 2.5% p.a.

• Interest and Amortization:

• Semiannual interest, Annual Principal

• Grace period: 71 months

13

ConclusionConclusion

• The loss of R$ 184.4 million in 2005 is due mainly to extraordinary events

• Bonds and Debentures issuances in 2005 resulted:

• In the reduction of Total Debt average cost from 105.6% of CDI to 100.7% of CDI

• In the increase of Total Debt average life from 2.86 years to 3.69 years

• In the increase of Eletropaulo’s ratings:

• Local Credit: BB to BBB

• Foreign Credit: B to B+

• Operating Highlights: Loss reduction and better collective rate in 2005

• Perspectives:

• Results: • 2006: the 2005 allowances won’t be recurrent

• 2007: Eletropaulo’s results won’t be affected by the remaining recognition with pension fund obligations of approximately R$340 million

• Financial Aspects:

• Substitution of the outstanding private creditors’ debt for new loans with more attractive terms

• Eletropaulo expects to benefit with the decreasing trend of Selic Rate (42.3% of total debt is accrued by Selic)