2
CPFL Energia – Highlights
• Brazilian’s largest player in distribution and commercializationbusinesses
• 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 theinstalled 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%) inthe 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
2
33
4
• Organic growth and leadership in market-share
• Operational efficiency focus
• Small distribution companies acquisition, strategically located
• Large distribution companies acquisition
• Cooperatives acquisition
• Private networks incorporation
Distribution
Generation
• High EBITDA margin
• Long term concessions
• Projects’ conclusion
• SPP’s repowering, construction and acquisition
• Energy cogeneration through biomass
• Green field projects - Auctions
Commercialization
• Leadership in market-share: 21.3%
• Increasing in Value Added Services (VAS) and new products and services
• New opportunities - clients between 0.5 and 3.0 MW, supplied by cogeneration or SPP’s
• Consistent results
CPFL Energia’s Investment Case join the current portfolio growth with acquisition opportunities
4
55
66
7
Strong growth in the installed capacity and long term concessions in the generation ventures
GENERATION
812
434
854 915 1,072
1,588 1,738 1,7382,174
472 525 571 800 862 862 1,082
2003 2004 2005 2006 20073 2008(e) 2009(e) 2010(e)
Serra da Mesa1
SPP’s CPFL Geração Monte Claro Barra Grande
14 de Julho
Castro Alves Foz do ChapecóCampos Novos
CPFL Sul2 Lajeado
SPP’s CPFL Jaguariúna3
2027 2036 2036 2036 20362035
2028 20362032
2015
Installed Capacity (MW)Assured Energy (MWmedium)Concession Term 48.2%
40.2%
9.4%
7.7%
25.1%
25.5%
(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(3) Among the 9 SPP’s of CPFL Jaguariúna, 6 are in the situation mentioned in note 2
7
8
SPP’s: Greenfield Projects
Partnership to studies and implementation of SPP’s
70 analysed projects and enrollment in ANEEL for 10 projects
• Low Internal Rate of Return• PPA’s already signed with unattractive prices• Impracticable environmental requirements
Feasible in the medium and long
term
Feasible in theshort term
Feasible Projects in the short term (up to 30 months)
GENERATION
Technical studies and enrollment in ANEEL
Installation License and
construction of the SPP’s
Basic projects and
environmental studies
(necessary for the previous
license)
ANEEL and environmental
agencies’approval
OK 2008 2008/2009 24 months
Capacity: 75.6 MW
Estimated investment:
R$ 285 million
60 discarded projects
6
4
8
99
1010
11
CPFL presents sales growth in the concession area and in the free market
33,076 31,23518,289
35,24531,7785,828
3,28811,230
9,5857,26324,117
38,49836,364
46,47541,363
2004 2005 2006 2007 1H08
TUSDCAPTIVE
4,277
8,9519,3347,120
3,209
2004 2005 2006 2007 1H08
Concession Area Sales - GWh Free Market Sales (GWh)27.8%
178.9%
Note: excludes intercompany transactions (consolidation accounting basis), CCEE and generation sales (except to the free market)1) Excluding the effect of acquisition of CPFL Jaguariúna 2) Source: EPE (2Q08)11
Concession Area Sales – GWh – 1H08
2,8%1Southeast2
2,8%3,4%1
Brazil23,5%
6,0%
South2
4,8%
12
Conclusion of the 2nd Periodic Tariff Revision cycle for the Group’s distributors,with CPFL Paulista and RGE’s indexes released in April
R$ million
Note: Nominal values (1) Values for the 1st and 2nd cycle using the same methodology: 2nd cycle – exclude PIS/COFINS and R&D charges (2) With financial components
22%4542316%430371Reintegration Quote
45%1,13210431%1,028783Reference Company
30%2,37817321%2,2061,823Parcel B1
25%4,83228418%4,5473,857Net RAB
28%10,42552821%9,8978,173Gross RAB
TotalAcquisitions (CPFL
Santa Cruz and CPFL Jaguariúna)
CPFL Paulista, CPFL Piratininga
and RGE
CPFL Paulista, CPFL Piratininga
and RGE
2nd Cycle 2007/081st Cycle 20031
12
1313
1414
15
Summary
Capital market performance
Energy market overview
CPFL Energia’s investments
Dividends
15
16
Spreading proposes consolidation opportunities
Distributors (#) 64
2007
61
376.9
Clients (million)
Distributed Energy (TWh)
• Distribution Business:
Market Breakdown
• The 5 largest groups have 50% of market-share
• State-owned companies: 34%
• Private Company: 66%
1) ANEEL – Ref. 2Q07 (Recalculation of CPFL’s participation) – last information available
Distribution Market Share1 %Market Share1 (%)
Brazilian market has 64 distribution’s companies
COPEL 6.8%
CELESC 4.0%
EdB 5.7%
Energisa 3.5%
Ashmore Energy 3.7%
Others 34.8%
CPFL Energia 13.3%
Brasiliana Energia 12.1%
CEMIG Companhia Energética 8.6%
Neoenergia 7.4%
16
17
Generation Companies (#) 1,695
1Q08
108,852Installed Capacity (MW)
• Generation Business:
Market Breakdown
• The 5 largest groups have 50% of the market
• State-owned companies: 70%
• Private Company: 30%
Source: Aneel – last information available Market breakdown: Acende Brasil
Others 35%
Chesf 10%
Furnas 9%
Eletronorte 9%
CESP 7%Itaipu 7%
Cemig 6%
Tractebel 6%
Copel 4%
AES Tietê 3%
Duke 2%
CPFL Energia 2%
Market Share (%)
Brazilian market has 1,695 generation companies. The public sector concentrates 70% of the assets
17
1818
19
May, 2006
32.69%
414
Aug, 2006
11%
9
Oct, 2006
99.9%
203
Apr, 2007
100%
412
AcquiredStake
Investment –Equity
(R$ million)
Asset
CPFL Energia supports investment politics aligned with the Group’s growth strategy
606 627 797
627418
606 6331,133
1,5511,425
2004 2005 2006 2007
Capex Total(1) Acquisitions(2)
Actual Investment (R$ million)
(1) Considers minority shareholder participation’s acquisitions (2) Considers CERFRA Cooperative assets acquisition Note: Hedge not included19
20
CPFL’s estimated Capex
Total Capex (R$ million)
519296 108 22 6
677828
782 815 783
890 837 789
1,1241,196
2008E 2009E 2010E 2011E 2012E
Generation Distribution
391
570515 546 512
285 258 267 269 271
2008E 2009E 2010E 2011E 2012E
Expansion Maintenance
362
225
8117 6
157
7127 5 0,3
2008E 2009E 2010E 2011E 2012E
Debt Equity
CPFL Energia’s investment in the next 5 years: R$ 5 billion
Distribution - R$ million Generation - R$ million
20
2121
2222