2Q10 Results2Q10 Results

August, 2010

Financial• Cash generation of R$ 584 million, 37.1% higher than 2Q09

• Ebitda totalized R$732 million, 114.2% higher than 2Q09

• Net income of R$ 466 million in 2Q10, 200.6% higher than 2Q09

• Disregarding one-off effects:

– Ebitda of R$ 467 million, 36.6% higher than 2Q09

Operational • Higher energy volume compared to 2Q09: captive 4.7% and total market 6.8% growth

• Losses: commercial losses 70 b.p. lower than 2Q09

2

– Net income of R$ 220 million in 2Q10, 42.3% higher than 2Q09

• AES EP Telecom: financial settlement of the quotas held by AES Eletropaulo. Adding R$ 175 million to Company’s net income

• Banco Santos S.A.: judicial lawsuit termination. Positive effect of R$ 70 million in the net income

One-off effects

• Intermediate dividends distribution amounting R$ 626 million referred to 1H10 results: R$ 3.53/ common share e R$ 3.88/ preferred share

Dividends

• Positive tariff readjustment index of 8.00% to 2010/2011 cycle, applicable from July 4, 2010, with an average effect of 1.62% to the consumers

Subsequentevents

Consumption Evolution - (GWh)1 2Q102Q09

• Market growth due to industrial clients recovery and higher consumption in all classes

10,21210,904

+5% +5% +3 % +5% +7%+5 % +17%

3

Free Clients

1,7202,010

Captive Market

8,493 8,894

Residential Industrial Commercial Public Sector and Others

Total Market

660

2,6261,465

3,742

10,212

683

3,917

1,541

2,753

1 – Own consumption not considered

Collection rate – % over Gross Revenues Losses – % last 12 months

101.6103.1

101.1

• Collection rate and losses level reflect the continuous efforts on operational

enhancements

4

5,3

6

98.5

20092008 2Q09

101.6

2Q10

103.1101.1

99.5

20071 20082007 2Q10

5.1

6.5

11.6

5.0

6.5

11.5

Commercial Losses Technical Losses2

2009

5,3

6,5

11.8

6.5

4.8

6.5

11.3

2Q09

6,56.5

5.5

12.0

1 – The previous calculation methodology 2 - Current Technical Losses used retroactively as reference

• 22% higher rainfall volume, comparing 2T10 to 2T09, impacted SAIDI and SAIFI

SAIFI2SAIDI1

7.878.49 8.41

11.34 10.92 10.09

5

2007 2009 2Q09 2Q10

1o

5.64 5.20 5.48

2008

6.17 6.739.208.90

2007 2008

13.39

2Q102009

3o

2Q09

5o

11.86 10.47

1o

1 – System Average interruption Duration Index 2 – System Average Interruption Frequency Index Sources: ANEEL, AES Eletropaulo and ABRADEE

ABRADEE ranking position among the 28 utilities with more than 500 thousand customers

► 2010 SAIDI ANEEL Target: 9.32 hours ► 2010 SAIFI ANEEL Target: 7.39 times

SAIDI (hours) SAIDI Aneel Target SAIFI (times) SAIFI Aneel Target

CAPEX – R$ million 2Q10 Investments

Paid by customers

Capex 691

• R$ 71 million invested in customer service and system expansion highlighting the

R$ 35 million related to 48,500 new customers in the quarter

3%3%

62008

410

457

47

103

112

9

2Q09

125

131

6

2Q102009

516

478

37

2010(e)

637

54

14%

20%

55%

5%

Customer service / System expansion

Paid by the clients

Losses recovery

Maintenance

IT

Other

Gross Revenue - R$ million

• Higher captive consumption (+ 4,7%) and July/2009 Tariff Adjustment were the

main reasons for gross revenue growth

5,8442,353

6,692+15 %

7

Deductions to Gross RevenueNet Revenue

2Q09 2Q10

1,051

1,893

2,9441,210

2,208

3,418+16 %

+16 %

1H09 1H10

2,101

3,743

2,353

4,339+16 %

• Growth of sector charges and provision reduction during the period contributed to

the cost and expenses level

Operating Costs and Expenses1 - R$ million

3,026

667

3,473+15 %

8

PMS² and Other ExpensesEnergy Supply and Transmission Charges

1 - Depreciation not include and other operating income and expenses 2 - Personnel, Material and Services

2Q09 2Q10

367

1,174

1,541 326

1,400

1,726+12 %

-11 %

+19 %

1H09 1H10

655

2,371

667

2,806

+2 %

+18 %

Operating Expenses2 – R$ million

(51)

9

• Reduction of operating expenses due to, primarily, lesser provisions and judicial

lawsuit conclusions expenses

9

Materials, services

and others

2Q10

341

(6)

2Q09

367

PersonnelProvisions and Contingencies

(4)

ADA1 and write-offs

9

FCesp

11

326

1 - Allowance for doubtful accounts 2 – Depreciation not include and other operating income and expenses

Ebitda – R$ million

• Higher consumption, lower expenses with personnel and one-off effects contributed to

Ebitda increase

+58%1,102

10

2Q09 2Q10

+114%

1H09 1H10

+58%

342

732

697

Ebitda – R$ million

(226)315 (11)4

• Higher total consumption (+6.8%) and AES EP Telecom financial settlement contributed

to Ebitda increase

651

265

(14)

11

2Q10

732

2Q09

342

Other1FCesp

(14)

AES EP Telecom

1 - Materials, Services and others

NetRevenue

Energy Supply and Transm. Charges

Provisions and

Conting.

ADA andwrite-offs

Personnel and taxes

(without non recurring items)

Financial Result - R$ million

• Non recurring items related to Banco Santos and increase of financial expenses due to

higher debt balance explain the financial result

71

Financial Result - R$ million

12

2Q09

2Q10

(10)

(48)

37

1H09

1H10

2Q09 2Q10

(10)

(36)- 260%

(48)

1H09

(70)- 46%

1H10

Net Income - R$ million(without non recurring items)

622+106%

Net Income - R$ million

377

+25%

• Net Income positively impacted by 2009 tariff adjustment, 6.8% growth in the total

market consumption, as well as the non recurring items

13

2Q09 2Q10

+201%

155

466

1H09

302

1H10

+106%

2Q09 2Q10

+42%

155

220

1H09

302

1H10

• Proposal of R$ 626 million in dividends

– Ex dividend date: 08/06/2010

– Payment in two equal installments: 09/15/2010 e 12/07/2010

Managerial Cash Flow – R$ million

• Increase of 37% in the operating cash flow reflecting market growth and 2009 tariff

readjustment. Positive effect of AES EP Telecom quotas, bonds settlement and

debentures issuance

Inicial Cash

Operating Cash Flow

2Q09

1,258

426

1Q10

1,249

572

2Q10

1,470

584

14

Operating Cash Flow

Investments

Net Financial Expenses

Net Amortizations

CESP Foundation

Income Tax

Dividends

Free Cash Flow

Final Cash

426

(113)

(23)

(54)

(56)

(83)

97

989

(366)

572

(135)

(81)

(14)

(48)

(73)

221

1,470

-

584

(115)

(85)

265

(43)

(109)

804

1,786

(489)

EP Telecom sell - - 308

Amortization Schedule – Principal – R$ million

1,361

1,914

• Enhanced debt amortization schedule without maturity concentration due to recent

debentures issued

15

Local Currency (ex FCesp) FCESP1

2010 2011 2012 2013 2014 2015 2018-202820172016

524251 277 296 525

223

553

56

1,361

65

39

322 342 365

599

301 312

332

416

71 69

74

7984 89

22339

1 - FCesp = Pension Fund

Net Debt Average Cost and Average Term (Principal)

• Debentures issuances and bond amortization positively contributed with average debt

cost and term

1.8x1.5x

1.8x1.7x

1.3x 6.87.1 7.0 7.1

123.9%

6.9

16

2007

3.0

2008

2.52.9

2Q10

3.0

2Q092009

3.2

CDI² Average Term - Years

2007

121.8%

2008

123.9%

2Q10

106.3%

2Q09

113.4%

2009

87.1%

Net Debt (R$ billion) Net Debt / EBITDA Adjusted1

with FCesp

1 – Last 12 months of EBITDA Adjusted 2 - Brazil’s Interbank Interest Rate

Average Daily Volume3 - R$ thousand

26,06625,677

21,960

AES Eletropaulo1 X Ibovespa X IEE

25,832

80

100

120

140

160

180Last 12 months¹

3.5%

17.8%

18.4%

� 18% growth on the average negotiated volume in 2T10

17

2007 2008 2009

1 – Index: 06/30/2009 = 100 2 – Index: 03/31/2010 = 100 3 – Preferred shares class B (Without dividends adjustments)

2Q10

IBOV

IEE

ELPL6

60

80

Jun-09 Sep-09 Dec-09 Mar-09 Jun-10

70

80

90

Mar-10 Apr-10 May-10 Jun-10

1002Q102

-7.8%

-0.6%

-13.4%

2Q10 resultsThe statements contained in this document with regard to

the business prospects, projected operating and financial

results, and growth potential are merely forecasts based on

the expectations of the Company’s Management in relation

to its future performance.

Such estimates are highly dependent on market behavior

and on the conditions affecting Brazil’s macroeconomic

performance as well as the electric sector and international

market, and they are therefore subject to changes.

2Q10 results