2. Disclaimer
This presentation may contain statements that represent expectations about future events or results according to Brazilian
and international securities regulators. These statements are based on certain assumptions and analyses made by the
Company pursuant t it experience and th economic environment, market conditions and expected f t
C t to its i d the i i t k t diti d t d future events, many
t
of which are beyond the Company's control. Important factors that could lead to significant differences between actual
results and expectations about future events or results include the Company's business strategy, Brazilian and international
economic conditions, technology, financial strategy, developments in the utilities industry, hydrological conditions, financial
market conditions uncertainty regarding the results of future operations plans objectives expectations and intentions
conditions, operations, plans, objectives, intentions,
among others. Considering these factors, the Company's actual results may differ materially from those indicated or implied
in forward-looking statements about future events or results.
The information and opinions contained herein should not be construed as a recommendation to potential investors and no
investment decision should be based on the truthfulness, timeliness or completeness of such information or opinions. None
of the advisors to the company or parties related to them or their representatives shall be liable for any losses that may
result from the use or contents of this presentation.
This material includes forward-looking statements subject to risks and uncertainties which are based on current
forward looking uncertainties,
expectations and projections about future events and trends that may affect the Company's business. These statements
may include projections of economic growth, demand, energy supply, as well as information about its competitive position,
the regulatory environment, potential growth opportunities and other matters. Many factors could adversely affect the
est ates a d assu pt o s o
estimates and assumptions on which these statements are based.
c t ese state e ts a e based
2
3. Agenda
Corporate Overview
Operational Efficiency
Growth in the Generation Business
Wide Portfolio of Services
3
4. Corporate overview – Highlights
The largest 2nd largest player in the electric sector in terms of
private player Market Cap (R$ 20 billion in Dec, 2010)
in the Brazilian
R$ 3.2 billion EBITDA and R$ 1.6 billion Net Income1
Electric Sector
Leadership in the distribution business through
8 distributors Energy market is concentrated in the
distributors.
most developed regions of Brazil
Leadership in the commercialization business
2,396 MW generation installed capacity, 91%
renewable sources. 4 biomass plants and 8 wind
farms under construction
Bovespa’s Novo Mercado and NYSE’s ADR Level III
Differentiated Dividend Policy: minimum 50% of the
net income semi-annually. Practices 95%
4 1) LTM (Sep, 10)
5. Brazilian’s largest player in distribution and commercialization businesses
CPFL Energia Market-share
ALIZATION
Distribution CPFL 13%1
Concession Area (captive + TUSD)
COMMERCIA
• 6.7 million customers
Others:
• 568 municipalities 87%
• Sales of 51,589 GWh2
3 major
Market leader players
p y : 34%
Generation CPFL 2%1
Focused mainly in renewables
• 45 power plants operating Others:
ON
2,396
2 396 MW installed capacity
GENERATIO
• 98%
• 12 plants under construction
3 major
3rd private generator players: 28%
Comercialization
DISTRIBUTION
N
CPFL 16%4
Energy free market and Services
• 98 free customers4
• Sales of 12,300 GWh2 Others:
• Services: revenues of R$ 67 million³
$ 84%
D
Market leader 3 major
players: 35%
5 1) Aneel – last available information 2) Set, 10 – LTM. Concession area sales (excludes CCEE) 3) LTM 4) 9M10
6. Best corporate governance practices
Advanced Corporate Governance Practices:
1st Brazilian company
• Shares listed on differentiated segments:
• Bovespa Novo Mercado
• ADR III - NYSE Annual Client Leadership
Award IFC 2008
• Compliance with the Sarbanes-Oxley Act
• Board of Directors made up of 7 members:
• 1 Independent Member
I d d tM b Member of the Companies
• 3 Board Advisory Committees Circle – OCDE/IFC
• Self-Assessment through Fiscal Council
• General Shareholders Meeting Participation Manual
• Securities Information Disclosure and Trading Manual Ranked on the 50 Largest Sustainable Latin
• Dividend Payout Policy: American companies list (2008/2009)
• Minimum dividends of 50% of net income, paid twice a year Ranked on Ibovespa’s Transparency in
Sustainability list of companies (2nd place - 2009)
• Succession Plan
1st Place CPFL Energia was the
Energy Sector – The
company with the highest
Most Sustainable Large
result among the sectors
Companies in Latin
p
America studied (Energy, Mining
t di d (E Mi i
May, 2010 and Oil and Gas)
6
7. Sales and Results – CPFL presents consistent growth
Concession Area Sales (GWh)1 Breakdown | 9M10 Concession Area Sales (GWh)
TUSD CAGR = 6.1% p.y.
Captive Industrial
46%
49.033 48.799 7.8%
46.475
38.498
41.363
11.710 10.978 38.706
15% Commercial
36.364 11.230 35.916
3.288 7.263 9.585
7.966 9.325
25% 14%
35.245 37.323 37.821
33.076 31.778
31.235 27.950 29.381 Others
Residential
2004 2005 2006 2007 2008 2009 9M09 9M10
EBITDA (R$ million)2 Breakdown | 9M10 Reported EBITDA2
CAGR = 10.5% p.y.
Generation
3.345
3 345 R$ 530 million
19.8%
2.789 2.808 2.765 22%
2.419
2.120 2.019 68%
1.681
10%
Commercialization Distribution
Di t ib ti
R$ 244 million R$ 1,661 million
2004 2005 2006 2007 2008 2009 9M09 9M10
1) Excludes intercompany transactions (consolidation accounting basis), CCEE and generation sales (except to the free market). 2009 TUSD adjusted (97 CAT Resolution)
7 2) 2007 and 2008 adjusted by the impact of Law 11,638 and PM 449/08
8. Comparative of global electricity consumption
Electricity consumption | per capita/GDP1
14.000
12.000
000 United
onsumption pe capita (KWh)
)
States
10.000 Australia
8.000 Japain
France
er
Taiwan
T i
Singapure Germany
6.000
South Korea UK
Greece Spain
Brasil Italy Hong Kong
4.000 Venezuela
2014 Portugal
Chile
Brasil
Co
Argentina
2.000 2010
China Mexico
Peru
GDP per
5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 capita (US$)
Brazil 2010 2014 2019 ∆ %
Population (million)2 194.1 200.2 206.6 12.5 6
Electricity consumption (TWh)
y p ( ) 415.9 506.8 633.0 217.1 52
Consumption per capita (MWh/year) 2.1 2.5 3.0 0.9 46
8 1) Source: U.S Energy Information Administration 2) Source: PDE 2019
9. Distribution of dividends in accordance with creation of shareholder value
Declared dividends and Dividend Yield
Dividend Yield2 (last 12 months)
Declared dividends1 (R$ million)
CPFL closing average price (R$/ON)
10,9%
9,1% 9,6% 9,7%
8,7% 7,9% 8,6%
7,6% 7,3% 7,6%
6,5%
842 774
3,7% 722 719 655
612 602 606 5
572
498
401
140
2H04 1H05 2H05 1H06 2H06 1H07 2H07 1H08 2H08 1H09 2H09 1H10
35,99 36,11 36,41
31,74 33,38 31,55 33,02
30,05 28,25
23,33
16,58
16 58 18,85
,
Since its IPO (Sept 2004), CPFL has distributed R$ 7.1 billion
95% of the net income in dividends Dividend Yield: 86.8%
9 1) Refer to declared dividend. Payment in the next half year. 2) Considering last two half-years’ Dividend Yield 3) IPO price per share: R$ 17.22
10. Capex – Investments in the distribution and generation business
Investments by business segment (in R$ million)
Acquisitions Stake Amount R$ Total 1997-2005: R$ 3,2 billion 1.316
2006 2008
2006-2008 acquired million 1.283
Total 2006 2009 R$ 4,4 billion
T l 2006-2009: 4 4 billi
1.167
32,69% 414 1.121
362
11% 9 570
445 502
99,9% 203 793
100% 412 627
606 266
565
Total: R$ 1 billion 512
255
343 922
331 746
294 676 665
193 220 191 527
157 174 32
39 368
218 235 261
157 174 193 188 152
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010-
2014e
avg
Distribution Generation
10
11. Estimated CAPEX of R$ 6 billion for the next 5 years
Total Capex1 – R$ milllion Generation1 – R$ milllon
1.851 Generation Distribution
1.645 794
1.316 684
1.057 1.051
1 051 570
961 957 912
746
290
761
794 936 893
570 684 22 19
290
22 19
2009 2010(e)
2010( ) 2011(e)
2011( ) 2012(e)
2012( ) 2013(e)
2013( ) 2014(e)
2014( ) 2009 2010(e)
2010( ) 2011(e)
2011( ) 2012(e)
2012( ) 2013(e)
2013( ) 2014(e)
2014( )
actual actual
Distribution – R$ million 2010-2014 Capex1:
Expansion
p Maintenance • 42%: Wind
1.057
961 936 • 12%: Foz do Chapecó HPP
893
746 761 • 11%: EPASA (Termonordeste e Termoparaíba TPPs)
586 512 516 497 • 27%: Biomass (Baldin, Bioformosa, Pedra, Buriti and Ipê)
370 445 • 8%: Others
376 470 448 420 396
316
2009 2010(e) 2011(e) 2012(e) 2013(e) 2014(e) 2010 - 2014 (e) Generation: R$ 1.8 billion
actual
2010 - 2014 (e) Distribution: R$ 4.6 billion
88% of RAB
11 1) Without Campo dos Ventos II (wind farm) Note: Constant currency – Dec,09
12. Debt Profile
Adjusted Net Debt1 / EBITDA2 (R$ billion)
Adjusted Net Debt
Adjusted Net Debt / EBITDA 7,21
6,37 ,
6,12 6,42
5,65
5 65
1.87: excluding
Foz do Chapecó
2,30 2,28 HPP, EPASA e
2,10 2,13 Baldin TPPs’
2,01
debts
2008 2009 1Q10 2Q10 3Q10
Real Cost (LTM) 7,1% 4,9% 3,8% 4,4% 5,0%
Debt Breakdown CPFL’s Credit Rating
TJLP
31%
Fitch Rating
CDI Rating AA+ (bra)
62%
IGP
6%
Standard & Rating br AA+
US$
(Natural Hedge) Poor’s (escala nacional)
1%
12 1) Excludes Judicial Deposits of R$ 474million; Includes hedging operations 2) LTM EBITDA
13. Capital market performance
Shares performance1 – 2010 Shares performance1 – 2010 Daily average volume
Bovespa NYSE
CPL
CPFE3 +33,9% +23,1%
+25,7%
32,5
IEE DJ 26,4
+12,0% +10,9%
17,4
DJBr20 15,7
IBOV 3,9%
+1,0% 11,6 15,9
9M09 9M10
NYSE Bovespa
1Q10 2Q10 3Q10 4Q10 1Q10 2Q10 3Q10 4Q10
2010 Latin American Executive Team The Best Companies for Shareholders
in 2010 Rank | Capital Aberto Magazine
CPFL Energia – 3rd place
Market Cap above R$ 15 billion
• Best IR Team – Buy Side and Sell Side 24 companies evaluated
• Best CEO – Buy Side and Sell Side
• Best IRO – Sell Side
1) Closing price in December 30th, 2010 – adjusted per dividends (CPFE3: R$ 41,20/CPL: US$ 76.81)
13 2) Excludes Bradespar’s blocktrade in May 19th, 2009 (R$ 531,2 million)
14. TSR Performance
Total Shareholder Return1 - 2005-2010(e) [% a.a.2]
25%
21%
20% 19%
17% 17% 16%
Average3 = 14
4%
3%
AES Tietê
Ti ê Copel
C l Tractebel
T b l Cemig
C i Light
Li h AES Edp
Ed Eletrobras
El b
Eletropaulo
Note: 2010 dividends estimates from a research report (Itaú) 1) TSR: shareholder TIR – market cap values in Dec, 04 and Dec, 10.
14 2) Values updated by IGP-M 3) Source: Thomson Financial; Economática and Itaú Securities
15. Agenda
Corporate Overview
Operational Efficiency
Growth in the Generation Business
Wide Portfolio of Services
15
16. 16
CPPFL CPFL
4,5
Moc
coca
4,6
Mococa
CP
PFL CPFL Santa
5,1
Paulista
5,5
Cruz
CPFFL CPFL
5,2
Piratini
inga
5,7
Paulista
FEC1 | 2010
DEC1 | 2010
Eletropa
aulo CPFL
5,4
6,9
Piratininga
Coe
elce
5,6
Coelce
7,5
Elek
ktro CPFL Leste
5,7
8,3
Paulista
Li
ight
5,8
Escelsa
9,0
Esc elsa CPFL Sul
6,3
9,2
Paulista
CPFL Santa CPFL
6,5
z
Cruz
9,2
Jaguari
Ce
emig
6,6
Elektro
9,5
Cos
sern
7,0
Eletropaulo
10,6
Bandeira
ante
7,1
Light
Ce
elpe
7,3
73
Copel
CPFL Leste
L
7,7
77
Paulis
sta Bandeirante
11,3 11,5 12,2
CPFL Sul
L
7,8
78
Paulista Cosern
C
CPFL
7,8
78
Jaguari Cemig
Operational Efficiency – Distribution companies
opel
Co
9,5
Celesc
12,7 13,0 13,5
R
RGE
9,7
RGE
14,7
AES Sul Celpe
17,1
Cel
lesc
,
10,1 10,2
AES Sul
17 1 18,0
Coe
elba
11,2
Cemar
Am
mpla
12,7
CEEE
21,5 21,6
Cem
mar
14,0
Ampla
1) DEC-Duration of outages per consumer per year (in hours); FEC-Frequency of outages per consumer per year (number of outages). Excluding power outage effect in Nov, 09.
23,8
CE
EEE
15,0
Coelba
26,6
18. Operational Efficiency – Distribution companies
Delinquency1 (%) | CPFL Energia
3T09 3T10
1,44 1,43
Jan, Mar, May, Jul, Sep, Nov, Jan, Mar, May, Jul, Sep, Nov, Jan, Mar, May, Jul, Sep,
08 08 08 08 08 08 09 09 09 09 09 09 10 10 10 10 10
Program f R d ti
P for Reduction of C
f Commercial L
i l Losses
2007 – 2010
2 million of consumer units (CU) inspected
• 305 thousand CU identified and regularized
• 211 thousand CU with fraud
• 413 thousand measuring equipments replaced
• 37 thousand regularization of illegal connections
18 1) Bills overdue more than 30 days - % of 12 months billings. In 2010 it doesn’t consider: CPFL Leste Paulista, Sul Paulista, Jaguari and Mococac
19. CPFL Energia Group’s Awards
Abradee
Best Electric Energy Distribution Economic-Financial Management:
Company in Brazil: CPFL Paulista – 1999|2000|2008
CPFL Paulista–2000|2003|2006|2008|2009
Paulista 2000|2003|2006|2008|2009 CPFL Piratininga – 2004|2007
RGE – 2010
Management Quality:
Best Electric Energy Distribution CPFL Paulista – 2005|2006|2008|2009
Company in the South Region CPFL Piratininga – 2010
RGE – 2003|2009|2010
Best Social Responsibility:
Operational Management: CPFL Paulista – 2002|2003|2004|2005|2008
CPFL Paulista – 2001|2003|2005|2007|2008 RGE – 2009|2010
RGE – 2010
PNQ® – National Quality Award
Awarded Awarded Finalist
19
20. Agenda
Corporate Overview
Operational Efficiency
Growth in the Generation Business
Wide Portfolio of Services
20
21. Generation – strong growth and energy matrix diversification
Foz do Bioformosa 7 Wind Farms
Chapecó Biomass
Campos Novos
2036 Pedra
Monte Claro 2035
Buriti Biomass
2036 Castro Alves ad
Baldin
Lajeado
L j d Biomass
2036 Biomass
2032
Ipê
14 de Julho EPASA´s TPPs 1 Wind Farm
CPFL Biomass
CPFL Geração 2036
Jaguariúna
SPP´s Barra Grande Diamante SPP
SPP s
SPP´s³
2027 2036 2015
Serra da CPFL Sul2
Mesa1 2,769 2,805
2028 2,396 2,511
1,588 1,704 1,737
1,072
812 854 915
1,252
1 252 ,
1,362 ,
1,387
1,220
1 220
800 862 864
434 472 525 571
2003 2004 2005 2006 2007 2008 2009 2010(e)
2010( ) 2011(e)
2011( ) 2012(e)
2012( ) 2013(e)
2013( )
Concession contract Installed Capacity (MW) Assured Energy (AverageMW)
1) Guarantee of 51.54% of the assured energy until 2028 2) Hydroelectric power projects with less than 1,000 Kw that are not considered concession by the grantor
21 3) From 9 SPPs from CPFL Jaguariúna (today are in the Distribution), 6 are in the situation described in note 2
24. Generation – Termonordeste TPP commercial startup in Dec, 2010 and
Termoparaíba TPP in Jan, 2011
Epasa TPPs – CPFL Stake (51%)
• Installed Capacity: 174.2 MW
• Investment: R$ 310 million
• Capital structure: ~35% equity / 65% debt
• Location: Paraíba
Start of Commercial Start-up:
construction Termonordeste: Dec, 10
Oct, 09 Termoparaíba: Jan, 11
Annual fixed revenue around of R$ 85 million
24
25. Expansion in generation: 4 biomass’ projects under construction
Installed capacity of sugarcane-fired TPPs will reach 230MW until Jun 2012
Biomass projects already represent investments of about R$ 600 million
Installed
60% of TPP Investment (e)
Capacity
Brazilian Baldin
B ldi 45 MW R$ 104 million
illi √ Bio P d
Bi Pedra
sugarcane Bio Buriti 50 MW R$ 135 million
production is Bio Ipê 25 MW R$ 26 million
located in the Bio Formosa 40 MW R$ 127 million R$ 597
countryside million
Bio Pedra 70 MW R$ 205 million
$
of São Paulo1 Total 230 MW R$ 597 million Bio Formosa
R$ 362
million
Commercial start-up Bio I ê
Bi Ipê Investment
Bio Buriti (accumulated) ~700 MW
R$ 265
million 230 MW
√ 160 MW
Baldin
120 MW
R$ 104
million
45 MW
5 Installed Capacity
s a ed Capac y
(accumulated)
Sep Jun Sep Dec Mar Jun Sep Dec Mar Jun 2014
08 08 10 10 11 11 11 11 12 12
25 1) Source: Única
27. Brazilian generation – expansion
Northeast
• Wind potential
North
• Local thermal
• High hydro-
generation (LNG)
eletric potential
available • Nuclear
• Thermal
generation using
Wind potential: 75 GW2
imported coal
Potential used: 5%
Hydro potential: 111 GW1
Potential used: 9%
South Southeast/CO
• Local thermal • Local thermal
generation using generation
domestic coal (biomass, pre-salt
and LNG)
p g
• Developing
Wind potential: 23 GW1 wind potential Biomass potential:
Potential used: 3% 23 GW3
27 1) Source: MME 2) Source: EPE. Consider the energy contracted until 2013 3) Source: COGEN (expected by 2019)
28. Agenda
Corporate Overview
Operational Efficiency
Growth in the Generation Business
Wide Portfolio of Services
28
29. Commercialization - New products and services
Business units
Gross Revenues – R$ Million
400-500
~400%
CPFL
Value-added services
Total 89
CPFL Atende 2009 2014(e)
2014( )
Added-value services – S
dd d l i SVA
• Construction of transmission lines
• Construction of substations
• Recovery of power and distribution transformers
• Recovery of 15 KV equipment and tools
• Generator rental and sales
29
