3Q12 R lt3Q12 Results
November 2012November, 2012
3Q12 Highlights
Power generation 22% higher than the physical guarantee and 10% higher than 3Q11
Investments of R$ 31 million for the modernization program of Nova Avanhandava (347 MW), ÁguaVermelha (1,396 MW) and Ibitinga (132 MW) power plants
OperationalOperational
( , ) g ( ) p p
In 3Q12, the Company sold 168 MWa through bilateral contracts, with a total portfolio of 259 MWa,of which 227 Mwa were sold in 2012
Bilateral contract price with AES Eletropaulo adjusted from R$ 173.68/MWh to R$ 182.61/MWh
Net revenue of R$ 543 million, an increase of 4.7% compared to 3Q11
Sale of AES Minas SHPP completed on August 31, 2012 with a contribution of R$ 10 million in
FinancialFinancial
Sale of AES Minas SHPP completed on August 31, 2012 with a contribution of R$ 10 million inEbitda
Ebitda reached R$ 423 million, with margin of 78%
Net income of $ 244 million an increase of 7% when compared to 3Q11 Net income of $ 244 million, an increase of 7% when compared to 3Q11
EventsEvents• Dividends distribution in the amount of R$ 253.8 million related to the 3Q12 results - R$ 0.63 per common share and R$ 0.70 per preferred share. Payment will occur on November 22nd, 2012
2
• Award Winner "Best Companies for Shareholders in 2012" by Capital Aberto magazine
MP 579: Context
AES Tietê is not affected by the rules of the MP 579 and has a valid concession until 2029
Aims to reduce tariffs by 20% (Residential: 16.2% and industrial from 20% to 28%), as from February 2013, through:
- Reduction Sector Charges (RGR, CCC and CDE): - 7%
ObjectiveObjective
Possible pressure of higher prices on the free market in the short term
- Renewal of Generation and Transmission concessions: - 13%
O t itiO t iti Possible sale of electricity to generators whose concessions are expiring, to cover contracts set in the free market for the period 2015-2017
OpportunitiesOpportunities
Uncertainty related to the indemnification at the end of the concessionRisksRisks
3
Higher PLD favoring revenue in the spot market
Reservoirs Level inSIN1 PLD2 submarket SE/CO – Monthly Average (R$/MWh)
94%430
65%60%
52%48% 45% 43%
51%
132 138
117 125
193181
118 119
183
280
235
Southeast/ South Northeast North
13 14
28 22 32 68 72
2948
26 12 17
32 23 20 2137 46
4423
5191
jan feb mar apr may jun jul aug sep oct nov dec
2010 2011 2012/Middle‐West
3Q11 3Q12
2010 2011 2012
41- Interconnected National System2- Spot Market Average Price
Generation remains above the physical guarantee even with the reservoirs level reduction
Reservoirs level of AES Tietê’s power plants1 Energy generation (MW average3)
130%
125% 124% 122%
% % %
105%67%
66%
62%
52%
53%
66%
40%
1,665 1,599 1,582 1,438
1,585
22%
CacondeA. Vermelha B. BonitaPromissão(11.0 km 2) (3.6km 2)(8.1 km 2) (0.6 km 2)
2009 2010 2011 3Q11 3Q12
Generation - Mwavg Generation/Physical guarantee3Q11 3Q12
55
62% 45%Average:
1 – As of 09/30/2012
2 – Reservoirs volume3 – Generated energy divided by the amount of hours in the period
Investments in 3Q12 mainly allocated to the modernization of Nova Avanhandava, Água Vermelha,
Investments (R$ million) Investments in 3Q12
Ibitinga and Limoeiro power plants
19
175 90%
15612
82
16746
7042 31
124
4610%
2010 2011 2012(e) 3Q11 3Q12
Investments New SHPPs*
Equipment and Maintenance
6* Small Hydro Power Plants
IT Projects
Higher billed energy in 3Q12 due to an increase in energy sold in ERM1
Billed Energy (GWh)
11 11813,032
+17%
1 4252,182 851
911 201 297 11,118
3 608 3 970+10%
5,034 5,672 3,011 2 887
1,425
110 788 342 172 145 123
3,608 3,970
9M11 9M12 3Q11 3Q12
3,011 2,887
71- ERM – Energy Reallocation Mechanism
AES Eletropaulo Energy Reallocation Mechanism Spot Market Other Bilateral Contracts
Strategy for energy contracting in 2016: composition of client portfolio
Clients portfolio evolution in 2012
client portfolio
• Goals:
- 2011 / 2012: commercial
259
initiatives to expand client
portfolio in the free market
32 84 90
259
- The current portfolio comprises
259 MWa, of which 227 Mwa
Before dec/2011
1Q12 2Q12 3Q12 were sold this year and 87
MWm were sold to 2016
onward.
8
Mwavg
Higher prices in the spot market, larger volume of energy sold in ERM and readjustment in the bilateral contract with AES
Eletropaulo contributed for the net revenue growth
Net revenue (R$ million)
+20% 1,618
+5%399140
821,344
1.265 1.4387 17
14 16
519 543
9M11 9M12 3Q11 3Q12
498 502
9
AES Eletropaulo Spot/Energy Reallocation Mechanism Other bilateral contracts
PMSO lower than inflation in the period
Operational costs and expenses¹ (R$ million)
10 (10) 0,5 2 1 3
113 113 123 113 113 113 116 117 120
Energy Purchased Financ. Comp. For Transmission and 3Q11 3Q12Operating SHPP Personnel, 3Q11 +gyfor Resale Use of Water Res.Connection
3Q12allowances and other expenses
Material and Third-party
services
3Q11 Energy
Purchased
101 – Do not include depreciation and amortization2 – Personnel, Material and Third-party services
Ebitda 4% higher with margin of 78%
Ebitda (R$ million)
78%77%
78% 78%
1,048 1,250
9M11 9M12 3Q11 3Q12
405 423
11
Ebitda Ebtida Margin (%)
Better financial result influenced by lower financial expensep
Financial Result (R$ million)
3Q11 3Q129M11 9M12
-18 -12
-42 -38
-31%
12
-9%
Net income 6.9% higher due to increased spot prices, bilateral contract with AES Eletropaulo readjustment and costs p j
controlNet Income (R$ million)
110%107% 108%
104%
Dividend distribution of R$ 253.8 million related to 3Q12:
7.5% 7.9%3.0% 3.1%
- R$ 0.64 per common share
- R$ 0.70 per preferred share
- Ex-dividends: November 07, 2012582720
- Payment date: November 22, 2012
9M11 9M12 3Q11 3Q12
228 244
13
Q Q
Net Profit
Payout
Yield Preferred Shares
Cash flow reflects higher revenue from spot marketand bilateral contract with AES Eletropaulo
Operating Cash Flow (R$ million) Final Cash Balance (R$ million)
+24% +1%
351435 387 392
3Q11 3Q12 3Q11 3Q12
14
Low leverage with Net debt/Ebitda ratio of 0.3
Net Debt (R$ billion) Debt Amortization Schedule (R$ million)0.7x
0.6x0.3x 0.3x
300 300 3000.57 0.55
2013 2014 2015
Net Debt/Ebitda
3Q11 3Q12
Net Debt
Gross debt/Ebitda of 2.5x
Ebitd /Fi i l f 1 75
3Q11 3Q12
Average Cost (% CDI)1 115% 121%AvarageCostAvarageCost
Gross Debt/Ebitda
CovenantsCovenants Ebitda/Financial expenses of 1.75x Average Term (years) 2.5 1.5
Effective Rate 12.7% 9.7%
151 – Percentage of CDI (Interbank Deposit Certificate)
3Q12 R ltThe statements contained in this document with regard to thebusiness prospects projected operating and financial results
3Q12 Results
business prospects, projected operating and financial results,and growth potential are merely forecasts based on theexpectations of the Company’s Management in relation to itsfuture performance.Such estimates are highly dependent on market behavior andSuch estimates are highly dependent on market behavior andon the conditions affecting Brazil’s macroeconomicperformance as well as the electric sector and internationalmarket, and they are therefore subject to changes.