Brazil

South Korea

France

Germany

Canada

India

Russian

Japan

China

USA

Total

484,8

497,2

573,2

621,0

629,9

922,3

1.036,8

1.145,3

4.206,5

4.325,9

21.325,0

2010 TW/h

World’s Largest Producers

10th POSITION

Source: BP Statistical Review of World Energy June 2011 and National Energy Statement 2011

ELECTRICITY GENERATION

2

(2,2%)

(2,3%)

(2,7%)

(2,9%)

(3,0%)

(4,3%)

(4,9%)

(5,4%)

(19,7%)

(20,3%)

(100%)

3

16.2

40.6

13.421.4

5.1 3.3

74.3

1.3 2.7 5.7 2.7

13.3

Electricity Generation (%) 2009

4

74.0%

6.5%

4.7% 0.4% 6.8% 3.6%

2.7%

1.3%

Biomass

Natural

Gas Oil

Nuclear

Energy

Coal and

Others

Hydraulic Energy

Wind

Power

Production – Brazil 2010

Import

5

1.2 million customers

14,105 employees

22 plants

Installed capacity of 11,000 MW

US$ 9.8 billions in liabilities

US$ 21.6 billions in assets

EBITDA of US$ 518 millions

Debt / EBITDA 19x

79 Customers

1,341 employees

6 plants

Installed capacity of 7,456 MW

US$ 4.2 billions in liabilities

US$ 9.8 billions in assets

EBITDA(LTM) of US$ 1,083.2 millions

Debt / EBITDA 2.1x

CLEAN GENERATION:

100% Hydro – 4th Largest Hydroenergy Generator in Brazil

6

11/05/97

07/16/98

04/14/99

04/01/99

Privatized

Split-up

ELETROBRÁS CESP TRACTEBEL CEMIG PETROBRÁS COPEL AESTIETÊ DUKE ENERGY BR OTHERS

37.1%

6.6% 6.3% 6.0% 5.3%4.0% 2.3%

2.0%

30.4%

7SOURCE: Brazilian Electricity Regulator (ANEEL)

and Companies Peers (2010)

Brazilian Electricity System

NOTE: 1 – MW corresponded to the National Interlinked System – SIN

2 – Brazilian Itaipu belongs to Eletrobrás (Brazil’s stake)

42,081MW 7,455 7,145 6,782 6,061 4,545 2,648 2,307 34,303

8

CESP has six hydroelectric power plants located in the State of São Paulo with total installed

capacity of 7,456 MW and total guaranteed power output of 3,916 average megawatts (MW).

9

POWER PLANTS UNITSINSTALLEDCAPACITY

GUARANTEED POWER OUTPUT(AVERAGE MW)

START OF

OPERATIONS

CONCESSIONMATURITY

DATE

ILHA SOLTEIRA (IS)

JUPIÁ

PORTO PRIMAVERA

PARANÁ RIVER .........

PARAIBUNA

JAGUARI

PARAIBA RIVER ........

T O T A L ...........

14 1,540 1,017 Jan/23/1999 May/21/28

2 85 50 Apr/20/1978 Mar/09/21

2 28 14 May/05/1972 May/20/20

57 7,456 3,916 - -

20 3,444 - Jul/18/1973 Jul/07/15

5 808 - Nov/28/1993 Nov/18/11TRÊS IRMÃOS (TI)

IS/TI COMPLEX ..... 25 4,252 1,949 - -

14 1,551 886 Apr/14/1969 Jul/07/15

53 7,343 3,852 - -

4 113 64 - -

10

SEGMENT

GENERATION

Energy Sector Data by Segment

QUANTITY

Percentage over

Entire Segment

18,277 MW 23% of the installed capacity of

Brazil’s hydroelectric complex

TRANSMISSION 73,000 Km of transmission

lines and stations with

> 230KV voltage.

82% of the SIN – National

Interlinked System

DISTRIBUTION

(from 2015 to 2017)

42 concessionaires 35% of the energy sold in

ACR – Regulated Market System

SOURCE: ANEEL

11

10,615

9,7039,131

7,4556,782

4,545

2,175

Quantities in MW and percentages over total installed capacity of each

generation company whose concession expires in 2015.

86.8%

25.6%

67.0%

0.8%10.0% 5.7% 19.0%

12

FURNAS

CEMIG CEEE COPEL

Others

CHESF

ELETRONORTE

18,277 MW of the Installed Capacity in the Generation Segment

CESP

Note: 64.6% refers to federal government entities (11,773 MW)

14

2003 2004 2005 2006 2007 2008 2009 2010

0.923 0.924 0.917 0.921 0.9210.934 0.928 0.934

0.896

CESP is recognized as an industry benchmark in terms of operating performance, with a higher

availability rates and lower forced outage at its generating units compared to both the standards

mandated by the National Electricity Agency (ANEEL) and the industry average.

0.01200.0106 0.0105

0.0054 0.0059 0.0063

0.0252

0,0000

0,0050

0,0100

0,0150

0,0200

0,0250

0,0300

2005 2006 2007 2008 2009 2010

CESP Ref. ANEEL

15

CESP has been consistently producing energy above the physically guaranteed

level determined by ANEEL.

Energy Production (GWh)

Energy production Guaranteed power output

(Nominal Production: 34,304 = 3,916 MW average)

2002 2003 2004 2005 2006 2007 2008 2009 2010 9M11 3Q11

34,50337,015

34,34036,340

42,89641,203 41,13939,83140,947

30,624

10,069

2,409 2,409

1,663

540 520 350 230 230 230 230

1,392 1,392

1,547

1,5301,338

904 904 897 864 807

590

1.730 1,942

2,666 2,673 2,706 2,763

37%37%37%37%37%37%

2,546

16

63% 63%

37%

44%

14% 14%9% 6% 6% 6% 6%

41%

40%35%

24% 24% 24% 23% 21%

15% 46% 51% 67% 70% 70% 71% 73%

Diversified client portfolio focused mainly on distribution companies, which provide higher stability and

sales visibility. Focus also on free customers, which gives greater flexibility to the Company’s businesses

with a substantial portion of non-contracted energy available for trade as of 2013.

Guaranteed power output (3,916 MW (-) losses until the center of gravity) 3,800 MW average (11/03/2011)

Distributors Free Market Non-contracted

17

146,15

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

97.16 100.35

107.05

132.94 133.91 144.30 155.18 155.18 155.18 155.18

104.42 107.34

118.86

118.45118.51

129.29129.29 130.18 132.56 134.86

Average Prices – R$ / MWh

Average prices of CESP medium and long term contracts

(sep/30/2011)

Distributors Free Market Non-contracted

18

Existing Energy Auctions – Average

Existing Energy Auctions – CESP

New Energy Auctions – CESP

(Botox Energy 100%)

New Energy Auctions – Average (Hydro)

New Energy Auctions – Average (Thermal)

Alternative Energy Source Auctions – (Hydro)

Alternative Energy Sources Auctions – (Thermal)

57.5167.33

75.46

83.13

93.40

62,.0

68.37

77.7083.50

94.91

50,0

60,0

70,0

80,0

90,0

100,0

110,0

120,0

130,0

140,0

150,0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

104.745th Auction – 2007

Existing Energy

124.97

(Botox)

126.77

132.39

116.00

(Botox)

121.81

134.67

134.99

138.85

120.86

128.42

137.44

78.87

(UHE - Sto.

Antonio)71.37

(UHE

Jirau)

98.98

(UHE - Bxo.

Iguaçu)

145.23

(UTE’s

Outras

Fontes)

128.37

129.14

77.97

Belo Monte

58.35

Teles Pires

15

20

Capital Increase R$

3.2 billionsTerm: 10 yearsGrace Period: 5

years (for principal)

To match its cash flow generation with its debtservice, CESP has launched a comprehensivecapital restructuring plan with the following maincomponents:

Privatization of CTEEP – R$1.2 billion

Jul/2006

Public Offering of Preferred Class B Shares

(PNB) – R$ 2.0 billions

Jul/2006

Bonds Operations

(Call + Tender Offer)

US$220 millions = R$488 millions - Aug/2006

US$350 millions = R$750 millions - Jan/2007

FIDC III – R$ 650 millions

Aug/2006

FIDC IV – R$ 1.25 billion

Jun/2007

Funds Involved in the Restructuring - R$ 6.3 billions

1.2

2.0

1.2

0.65

1.25

C

T

E

E

P

P

U

B

L

I

C

O

F

F

E

R

B

O

N

D

S

FIDC

III

F

I

D

C

IV

1,250

21

Average Prices R$/MWh (*)

Invoiced Amount GWh (*)

Gross RevenueBRL million

(*) Energy sold in contracts, excluded Spot Market

Energy - CCEE

2,103

2,398

2,626

2,9873,084

3,319

2,471

862 841

64.7869.06

76.45

84.5787.69

93.66 94.77 96.43

28,970

32,849 32,845 33,15032,760

33,845

24,658

8,694 8,465

22

Evolution of Net Revenue

BRL million

Adjusted EBITDA Margin (%)

Adjusted EBITDA (BRL million)

402 450 490 589 669 696 726

466 490 541602

658 688 700499570

565

657645

757 735473

551588

632681

764

1,840

2,0612,184

2,4802,653

2,905

1,2311,2561,500

1,6261,8491,917

1,494

517 501

66.9

60.9

68.765.6

69.767.4 68.369.1 68.2

2,161

23

Capital InvestmentsBRL million

2005 2006 2007 2008 2009 2010 9M11 3Q11

203 194

144168

84

34 216

37 41

42

42

71

8276

31

240 235

186

210

155

11697

37

2005 2006 2007 2008 2009 2010 9M11 3Q10 3Q11

1,324

1,133

814

721

592510

349

116 101

24

BRL million

Debt Charges + Monetary Variation

(Excluding Exchange Variation)

1,2771,244

1,122

1,6351,523

1,713

1,302

443 444

25

Operating ExpensesBRLmillions Employees

Personnel Expenses

x

Net Revenue (%)

6.6 6.9 7.3 7.2 7.4 7.7 6.98.5

1,284

1,403 1,3691,321

1,284

1,4631,341

26

Operating Revenue 840,527 861,517 -2.4%

Deductions From Operating Revenue (105,225) (104,413) +0.8%

Net Operating Revenue 735,302 757,104 -2.9%

Adjusted EBITDA 501,273 517,067 -3.1%

Adjusted EBITDA Margin 68.2% 68.3% -0.1p.p.

Net Income (Loss) (98,565) 109,764 --------

OPERATING HIGHLIGHTS

Operating Income before financial result 215,418 193,758 -11.2%

28Figures in BRL billions

Evolution by Currency

2005 2006 2007 2008 2009 2010 3Q11

45% 55%

36% 39%35% 37% 32%

55%

45%

64% 61%

65%

63% 68%

6.9 7.0

- 56%

Local Currency

7.5

9.8

4.5

5.3

4.3

8.3x

5.6x

4.8x 4.3x

2.8x2.2x 2.1x

FINANCIAL DEBT / EBITDA (x)

29

30

09/30/2011: R$ 1,376 million

All figures in BRL million

OTHERS R$ 20%

BRADY PLANR$ 218 16%

BONUS R$ 413 30%

BNDES(BRADY) R$ 743 54%

FINANCIAL DEBT

31

09/30/2011: R$ 2,901 million

All figures in BRL million

FIDC R$ 1,22942%

BONUS SERIES 8 R$ 963 33%

ELETROBRAS R$ 199 7%

PN R$ 162 6%

BIB'S R$ 116 4%

BNDES Finame R$ 21 1% Social Security Entity

R$ 211 7%

32

Sep/30/2011: R$ 4,277 million

223

710

875

407

1.329

733

924Dez/2010

4Q11 2012 2013 2014 2015 After 2015

33

1 -

2 -

3 -

4 -

Scale with Low Operating Costs

Low CAPEX Requirements

Low Working Capital Requirements

(less than 5% of net revenues)

Tax Credits Reducing Future Tax Payments

(R$ 2,142 millions)

Several factors enable CESP to generate strong operating cash flow.

35

TOTAL CAPITAL COMMON vs. PREFERRED

Common33%

Preferred Class A

3%

Preferred Class B

64%

Common33%

Preferred67%

36

7.20

-

6.56

-

35.99

0.40

4.21

-

-

95.30 13.76 40.60

37

São Paulo State Finance Dept.

Cia. Metropolitano – METRÔ

Cia. Paulista de Parcerias – CPP

Cia. Saneam.Básico de S.P. – SABESP

SUBTOTAL – STATE OF SÃO PAULO

HSBC Bank PLC London

Eletrobrás S.A.

Santander Invest. in Participations

UBS AG London Branch

Other Shareholders

SUBTOTAL – OTHER SHAREHOLDERS

T O T A L ..........................................

94.08

1.21

0.01

_

_

_

_

-

0.03

0.89

-

3.78

4.70

100.00

100.00

100.00

86.24

100.00

59.40

100.00

09/30/2011

-

82.08

-

-

17.92

13.20

-

5.23

11.89

55.92

8.48

2.05

3.65

7.63

37.59

PREFERRED (PNA + PNB)COMMON

Market5%

State95%

Market86%

State14%

38

39

4.70

100.00

86.24

5.13

8.12

181.28

129.76

226.29

5,039.64

33.33

2.48

64.19

109.17

8.12

210.21

2,761.94

226.29

5,843.99

59.40 194.53 5,395.69 100.00 327.50 8,832.22

R$ million

09/30/2011

40

IEE: 11,6%

CESP6: 9,7%(R$ 31,51)

IBOVESPA: -15,9%

SHARE PRICES EVOLUTION

Source: AE Broadcast

Period from Nov/2010 to Nov/2011

IEE- Electric Power Index

Evolution from 2003 to 2010

41

123456789

10111213141516171819202122232425

jan

/03

mar

/03

mai

/03

jul/

03

set/

03

no

v/0

3ja

n/0

4m

ar/0

4m

ai/0

4ju

l/0

4se

t/0

4n

ov/

04

jan

/05

mar

/05

mai

/05

jul/

05

set/

05

no

v/0

5ja

n/0

6m

ar/0

6m

ai/0

6ju

l/0

6se

t/0

6n

ov/

06

jan

/07

mar

/07

mai

/07

jul/

07

set/

07

no

v/0

7ja

n/0

8m

ar/0

8m

ai/0

8ju

l/0

8se

t/0

8n

ov/

08

jan

/09

mar

/09

mai

/09

jul/

09

set/

09

no

v/0

9ja

n/1

0m

ar/1

0m

ai/1

0ju

l/1

0se

t/1

0n

ov/

10

S&P Local S&P Global Moody´s Global

AAA

AA+AAAA-A+AA-BBB+BBBBBB-BB+BBBB-B+BB-CCC+CCCCCC-CC

CSDDDD

DDD

Prime

High Grade

Upper Medium Grade

Lower Medium Grade

Speculative

Highly Speculative

Insolvency Risk

Substantial Risk

Insolvency Probability

DefaultPre

do

min

an

tly

D

isti

nin

ctly

I

nv

est

me

nt

Gra

de

Sp

ecu

lati

ve

S

pe

cula

tiv

e

Jan

03

Jul

03

Jan

04

Jul

04

Jan

05

Jul

05

Jan

06

Jul

06

Jan

07

Jul

07

Jan

08

Jul

08

Jan

09

Jul

09

Jan

10

Jul

10