2nd Annual Brazil Opportunities Conference - J.P. Morgan*
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2nd Annual Brazil Opportunities Conference - J.P. Morgan*

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  • 1. 1
  • 2. Summary Energy market overview CPFL Energia – Highlights and Results 2
  • 3. Brazilian market has 64 distribution’s companies Market Share1 (%) Distribution Business – 2007 CPFL Energia 13% Distributors (#) 64 Brasiliana Energia 12% Clients (million) 61 Cemig 9% Distributed Energy (TWh) Neoenergia 8% 376.9 Copel 7% EdB 6% Market Breakdown Celesc 5% • The 5 largest groups have 50% of market-share Ashmore Energy 4% • State-owned companies: 34% Energisa 2% • Private Company: 66% Others 35% Spreading proposes consolidation opportunities 33 1) ANEEL – Ref. 1Q08 annualized (Recalculation of CPFL’s participation)
  • 4. Brazilian market has 1,695 hydroelectric plants. The public sector concentrates 70% of the assets Market Share (%) Generation Business – 1Q08 Chesf 10% Hydroelectric plants (#) 1,695 Furnas 9% Eletronorte 9% Installed Capacity (MW) 108,852 Cesp 7% Itaipu 7% Cemig 6% Market Breakdown Tractebel 6% Copel 4% • The 6 largest groups have 50% Petrobrás 4% of the market AES Tietê 3% • State-owned companies: 70% Duke 2% • Private Company: 30% CPFL Energia 2% Others 31% 4th largest private generation company in Brazil 44 Source: Aneel – last information available Market breakdown: Acende Brasil
  • 5. Summary Energy market overview CPFL Energia – Highlights and Results 5
  • 6. CPFL Energia – Highlights • Brazilian’s largest player in distribution and commercialization businesses • Energy market is concentrated in the most developed regions of Brazil (South/Southeast) • CPFL is listed in the Novo Mercado in Bovespa and ADR level III in NYSE • Differentiated Dividend Policy: payment of 50% of the net income on a semi-annual basis • 100% hydraulic generation portfolio, with a strong growth in the installed capacity in the last few years • Long term generation and distribution concessions • 5 distribution companies’ acquisition, 9 SPP’s and RGE’s stake (33%), Foz do Chapecó HPP’s stake (11%) and Lajeado HPP’s stake (7%) in the last 2 years, with a R$ 1.1 billion investment • First company in the Brazilian electric sector to negotiate carbon credits, through a run-of-stream HPP • Constitution of CPFL Bioenergia, for investments in energy generation from biomass 6
  • 7. CPFL Energia – Corporate Structure Free Float 25.7%¹ 31.1% 12.7% 30.5% 100% 100% 100% C O 100% 100% 100% M D M I 99.95% G 65% 100% E S E R T 99.99% 100% N 25.01% C R E I I 96.56% 100% R 48.72% A B A L U 90.15% 89.81% T 51% I T I Z I 87.80% O 100% A 100% O N T 90.15% N 89.75% I 59.93% Paulista Lajeado O N 5.91% Investco 7 As of March 31th, 2009 ¹ Includes 0.1% from Camargo Corrêa S/A company shares
  • 8. CPFL Energia’s Investment Case join the current portfolio growth with acquisition opportunities • Operational efficiency focus • Small distribution companies acquisition, strategically located Distribution • Large distribution companies acquisition • Cooperatives acquisition • Private networks incorporation • Projects’ conclusion • SPP’s repowering, construction and acquisition Generation • Energy cogeneration through biomass • Green field projects - Auctions • Increasing in Value Added Services (VAS) and new products and services Commercialization • New opportunities - clients between 0.5 and 3.0 MW, supplied by cogeneration or SPP’s 8
  • 9. Focus on capturing synergies and optimization of levels of Group delinquencies DISTRIBUTION Delinquency1 – (%) Consolidated Delinquency Recovery² – R$ million 4Q07 4Q08 Amount sent to SPC (in R$) Amount recovered (in R$) 9 1) Receivables past due > 30 days - % of total Revenues – outstanding as at December 31 2008 2) Excluding CPFL Jaguariúna
  • 10. Strong growth in the installed capacity and long term concessions in the generation ventures GENERATION Installed Capacity (MW) 1% 26,7 Assured Energy (MWmedium) 9.3% 2,202 % Concession Term 48.2 1,737 1,738 1,588 % 26,9 1,072 7.6% 812 854 915 40.2 % 861 862 1,093 800 434 472 525 571 2003 2004 2005 2006 20073 2008(e) 2009(e) 2010(e) SPP’s CPFL Geração Monte Claro Barra Grande Campos Novos Castro Alves Foz do Chapecó 2027 2036 2036 2035 2036 2036 Serra da Mesa1 CPFL Sul2 Lajeado 14 de Julho 2028 2032 2036 SPP’s CPFL Jaguariúna3 2015 (1) CPFL has the right of 51.54% of the Assured Energy until 2028 (2) Hydroelectric projects with installed capacity <= 1,000 kW are not eligible to concession 10 (3) Among the 9 SPP’s of CPFL Jaguariúna, 6 are in the situation mentioned in note 2 Note: Includes expected two SPP’s repowering in 2009
  • 11. GENERATION 11
  • 12. GENERATION 12
  • 13. CPFL Energia is alert to the opportunities of business involving sugar cane biomass GENERATION Business Model COMMERCIALIZATION • High pressure boilers CPFL invests in the • Condensing turbines Energy purchased from biomass source to sell generation-related • Back pressure turbines in the free market machinery… • Substation and transmission …and receives the exceed energy, for a Energy supply certain period contract Baldin Project – CPFL Bioenergia’s 1st project • Contract signed: Aug 2008 Amount: over R$ 500 million Sold • Construction of a sugar cane 100% CPFL Contract period: 2009 to 2023 bagasse-fired thermoelectric Investment: generation plant R$ 98 million • Location: Pirassununga – SP % of bioelectricity energy purchased in • Expected operations: April 2010 CPFL Brazil contracts 13% CPFL will have the right to 25 MW of energy exported 10% during harvest season: 112 GWh/year Current After the contract 13
  • 14. COMMERCIALIZATION 14
  • 15. CPFL presents sales growth in the concession area and in the free market Concession Area Sales – GWh1 Free Market Sales (GWh)1 34.8% TUSD 49,033 177.5% CAPTIVE 46,475 41,363 36,364 38,498 11,710 11,230 3,288 7,263 9,585 9,334 8,951 8,904 7,120 33,076 35,245 37,323 3,209 31,235 31,778 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Concession Area Sales – GWh – 2008 1) Excludes intercompany transactions (consolidation accounting basis), CCEE and generation sales (except to the free market) 15 2) Source: EPE
  • 16. 16
  • 17. CPFL Energia – 4Q08 and 2008 Results Net Revenue – R$ billion 2008 vs 2007 3,1% (+) Growth of 4.6 in total energy sales in 2008 9.410 9.706 (–) Average reduction of 11% in distribution tariffs in view of periodic tariff review -4,0% (+) Castro Alves HPP commercial operations start-up of on Feb 29th, 2008 and 14 de Julho HPP on Dec 25th, 2008 2.628 2.522 (+) Increase of 74% in revenues from VAS and CPFL Total 4T07 4T08 2007 2008 EBITDA – R$ billion Net Income – R$ billion -16,1% -22,2% 3.345 1.641 -10,5% 2.808 -9,3% 1.276 781 699 370 336 4T07 4T08 2007 2008 4T07 4T08 2007 2008 17 Reported values. Numbers already incorporate the impact of Law 11,638/07 and PM 449/08
  • 18. 18 18
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  • 20. Debt indexation Capex already signed up with BNDES CPFL Energia Ratings Local scale 20 20
  • 21. CPFL Energia supports investment politics aligned with the Group’s growth strategy Actual Investment (R$ million) 1,425 1,551 418 627 606 633 1,133 606 627 797 2004 2005 2006 2007 Capex Total(1) Acquisitions(2) May, 2006 Aug, 2006 Oct, 2006 Apr, 2007 Asset Acquired 32.69% 11% 99.9% 100% Stake Investment – Equity 414 9 203 412 (R$ million) 21 (1) Considers minority shareholder participation’s acquisitions (2) Considers CERFRA Cooperative assets acquisition Note: Hedge not included
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