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CPFL Energia1Q05 and full year 2004 ResultsWilson Ferreira Junior – CEOJosé Antonio Filippo - CFO Vitor Fagá de Almeida – Investors Relations

May, 2005

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A History of Success

1997 1998 2000 2001 2002 2003

Privatization of CPFL Paulista

Acquisition of Bandeirante Energia

Acquisition of RGE

Spin-off of Bandeirante; creation of Piratininga

Acquisition of SEMESA

Creation of CPFL Energia (holding)

Partnerships in three Generation projects

Creation of CPFL Brasil(commercialization company)

Since 1997, we have been acquiring, integrating and consolidating companies

Spin-off of CPFL Paulista; creation of CPFL Geração

Partnership in Ceran Complexauction

2004

CPFL Energia IPO

EBITDA growth of 556% in 7 yearsEBITDA growth of 556% in 7 years

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Organizational Structure

94,94% 100% 97,01%

Distribution GenerationCommercialization

97,41%

67,07%

40,00%

100%

100%

25,01%

65,00%

48,72%

6 HPP under construction - Monte Claro starts its commercial operations in Dec,2004

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Highlights CPFL Energia

R$ 9.5 billion gross revenues and R$ 1.7 billion EBITDA in 2004 (R$ 507 million in 1Q05)

Well-established operations leading the distribution and commercialization markets

Successful history of acquisitions, restructuring and consolidation

High Corporate Governance Standards

Private Company Leader in Energy Sector

Market leader, with a 19% market share

Outstanding performance in capturing free customers

Development of value added services

Success in Commercialization

Business

High growth on installed capacity

Generate energy totally contracted with distributors of the Group

EBITDA Margin above 90%

Strong growth In the Generation

Business

The largest distribution platform, with a 12.2% market share

Operating in a high consumption regions

Benchmark in operating efficiency

Efficient Distribution Operation in a

high growth area

Commercialization GenerationDistribution

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Best Corporate Governance and IR Practices

37.69% 13.62%33.04% 5.09% 10.56%

MarketShareholders

Free-Float

Common shares with 100% tag along rights – equal rights to shareholders

Current Free Float of 15.65%, to be increased to 25% by 2007

One Class of Shares and liquidity increase

IR Commitment

Sarbanes-Oxley Act Compliance – NYSE (Level III ADR)

Commitment to Novo Mercado – BOVESPA Rules (Level III)

Annual Report in compliance with the Global Reporting Initiative

Alignment with the Best Market Practices

Minimum dividend payout of 50% adjusted net profit, paid in semiannual basis

Benchmark in Dividend Policy

Best Equity Deal 2004

Targeting main indexes: Dow Jones ADR 20 Titan (Mar,2005)

Close to research analysts: 11 institutions already covering CPFL and 6 more under process

Presence in main the investors conferences

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CPFL ENERGIA

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CPFL Energia – 2004 and 1Q05 Highlights

CPFL Energia was consolidated as a market leader

Net income of R$ 279 million in 2004 and R$ 166 million in

1Q05.

EBITDA of R$ 1.7 Billion in 2004 and R$ 507 million in 1Q05.

Total energy sales increase of 4.9% in 2004 and 4.3% in 1Q05.

Financial Debt profile improvement

Start up of Monte Claro Hydroelectric Plant commercial

operations

Planned investments of R$ 2.6 billion on business expansion

and maintenance until 2008

1 With schedule adjustment

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R$ 9.5 billion Gross Revenues in 2004 an 18% increase compare to 2003

Sales (GWh) Gross Revenues (R$ million)

34.945 36.647

8.700 9.070

2003 2004 1Q04 1Q05

2.5002.189

9.5498.082

2003 2004 1Q04 1Q05

4.9%

4.3%

18%

14%

Sales increase of 4.3%

5.1%, 8.7% and 2.3% consumption increase

rate in the residential, commercial and

industrial segments, respectively

Increase number of customers of 3.3%

Increase in energy sold to free customers by

CPFL Brazil

Gross revenue increase of 14%

4.3% increase in energy sold

Increase in energy tariff of Paulista, RGE and

Piratininga

TUSD revenue increase of 171%

Start up of Monte Claro HPP operation

Inflation adjustment in generation contracts

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Net income of R$ 279 million in 2004

507420

1.6811.541

2003 2004 1Q04 1Q05

Net Income (R$ million)

EBITDA (R$ million)

166

(12)

279

(297)

2003 2004 1Q05 1Q05

194%

21%

9%

1485%

EBITDA increase of 21%

Gross revenue increase of 14%

Efficient management on operations

Increasing generation participation in the

business portfolio

Increase net income of 1485%

Financial expenses reduction of 14%

Reduction of goodwill amortization cost

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304376

122

1.4481.635

Net revenue

R$ Million

EBITDA

Net Income

1Q04 1Q05

+15%

81 91 178 256

46 5774 81

26 3917 24

1530

1765

166

420507

+21%

+1485%

+13%

+24%

+613%

+44%

+25%

+26%

+12%

+10%

+44%

(12)(24)

All business units have positively contributed to the consolidated net income

DistributionCommercializationGeneration

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279

154125

1ºS 04 2ºS 04 2004

Net Income R$ million265

140125

1ºS 04 2ºS 04 2004

Dividends R$ million

Dividend per share

1ºS04¹ – R$ 0.30

2ºS04 – R$ 0.31

2004 – R$ 0.61

Dividend payment higher than the minimum payment of 50% as established by the company policy

Dividend Yield

2004E² - 3.2%

¹ - Consider the dividend paid, divided by the number of shares before the IPO issued

² - Dividend paid in the 1ºS plus the dividend of the 2ºS divided by the share price on 03/21/05

Dividend payout of 95% of 2004 net income

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5 , 5 6 , 0

2 0 0 3 1 Q 0 5

9%

Debt profile

1 9 , 6 3 %1 5 , 5 5 %

2 0 0 3 1 Q 0 5

Debt cost

-21%

Average Maturity(years)

Adjusted debt excluding RTE

Debt Breakdown by Index Type1Q05

C D I3 0 %

D ó l a r5 % T J L P

2 5 %

IGP40%

2003

C D I4 6 %

D ó l a r4 % T J L P

1 9 %

IGP31%

Financial debt management resulted in reduction of cost, maturity and interest rate exposure reducing the oscillation risk

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Capital structure

3,73,84,4

6,3

2,3 2,1

4,9

2,9

2002 2003 2004 1Q05

Adjusted Net Debt *Net Debt/EBITDA

Ideal leverage parameters:Net debt / EBITDA = 2.5Debt / Equity ratio 65% / 35%

Respecting the minimum limit on distribution business 50% / 50%

1Q05 Capital structureDebt 55% / Equity 45%Net debt / EBITDA = 2.1

CPFL Energia seeks capital structure in order to minimize WACC and maximize shareholder value

Solid debt reduction(R$ billions)

Adjusted net debt = total debt + Pension funds – regulatory assets / CVA – cash and cash equivalentsEBITDA = last 12 months

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Capex is adequate with the Group financial reality

By 2008 CPFL Energia will invest around R$ 2.6 billions

559626

681723

2005E 2006E 2007E 2008E

TOTAL CAPEX (R$ millions)

In the 1Q05 the Group invested R$ 147 millionsand generated EBITDA of R$ 507 millions

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Business Highlights

Distribution

Operating center - Campinas

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376304

1.2951.235

2003 2004 1Q04 1Q05

2.3222.082

9.0677.763

2003 2004 1Q04 1Q05

122

(24)

323

(41)

2003 2004 1Q04 1Q05

Distribution –Business results

Gross Revenue (R$ million)

EBITDA (R$ million)

Net Income (R$ million)

5%888%

24%

613%

11%

17%

Comparing 1Q05 to 1Q04:

Energy sales¹ increase of 7.3%

Charges for the usage of the energy distribution

system (TUSD) increase of 171%

Financial expenses reduction of 35%

Goodwill amortization cost reduction

17% increase in the gross revenue from 2003 to 2004

ADJ¹ = excludes from1Q04 basis the effect of the free customers migration in 1Q05

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Business Highlights

Commercialization

Energy Trading Desk - Campinas

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Commercialization – 2004 and 1Q05 Results

Gross Revenue (R$ million) EBITDA (R$ million)

Net Income (R$ million)

296189

893

336

2003 2004 1Q04 1Q05

57%

5746

152

71

2003 2004 1Q04 1Q05

25%

3931

102

51

26%

1Q04 1Q05

Increase in energy sales of 133%

Gross revenue increase of 57%

CPFL Brasil supply energy to 62 free customers

20 of those outside the distribution companies’ concession area

CPFL Brasil has a strong and reliable brand which allows differentiation

Sales of value added service growing significantly

Highlights

2003 2004

166%114%

100%

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Commercialization – Results of 1Q05

1.052

495

1Q04 1Q05

113%

Energy sold to Free customers (GWh)

Energy sold toBilateral contracts¹ (GWh)

304

86

1Q04 1Q05

252%

Highlights

Operating in buying and selling energy to distributors through long term regulated contracts

CPFL Brasil has competitive prices due to the purchase of big energy volume

12 new free customers in the 1Q05

7 customers outside the distribution companies’ concession area

¹ Excluding intercompany transactions and bilateral with less than 3 months

1.356

581

1Q04 1Q05

133%

Energy soldfree customers + bilateral¹

(GWh)

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Business Highlights

Generation

Barra Grande HPP

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Gereneration – 2004 and 1Q05 Results

New projects will increase installed power capacity by 2.5x with the addition of 1,177 MW – 56% to be delivered by January, 2006

Highlights

All generated energy contracted in self –dealing basis

Energy supply contracts indexed to IGP-M

EBITDA margin of aprox. 90%

Inflation adjustment in generation contracts

Gross Revenue (R$ million) EBITDA (R$ million)

10187

331291

2003 2004 1Q04 1Q05

16%8174

282251

2003 2004 1Q04 1Q05

10%

14% 12%

2417

71

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Net Income (R$ million)

41%

1Q04 1Q052003 2004

2267%

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CPFL Energia launched Monte ClaroHydroelectric Plant in RS State

Built in less than 3 years;

High technology employed;

- Turbine and generator;

- Digital Control and Supervision System

Excellent installed power output by flooded area ratio – with low environmental impact level - 93 MW/Km²

5.1 MW/KM² average of the new energy projects¹

14 MW/Km² average of the public projects bided between 2000 and 2002²

Construction concluded 14 months ahead of Aneel´s concession agreement timetable;

Proving the planning and administrative experience on generating projects implementation

Inauguration of Monte Claro:

¹ New generation projects to be auctioned by Aneel

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Business Outlook

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Business Outlook – Generation

BarraGrande

Campos Novos

Castro Alves Foz do Chapecó

Monte Claro 14 de Julho

1 9 9 0

1 6 4 71 4 9 8

9 5 48 9 7

2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8

CAGR (03-08): 22.0%

To add value through the continuous increase in operating efficiency and the conclusion of ongoing generation projects

PPA’s OK OK OK OK OK OK

EnvironmentalLicenses

OK OK OK OK OK OK

Financing OK OK OK OK OKTerms

released by BNDES

Current Stage Concluded 93% 89% 13% 4% 2005

New projects will increase the Group installed power capacity by 2.5x

Power capacity addition of 1,177 MW – 56% to be delivered by January, 2006

• Barra Grande: 173 MW (Oct/05)

• Campos Novos: 429 MW (Jan/06)

• Group will present a 22% CAGR in installed power capacity from 2004 to 2008

Installed capacity (MW Average)

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Business Outlook - Commercialization

Working closely to free customers

Free customers represented 12% of the Brazilian market in 2004 - 50% growth forecasted for 2005.

Strong and reliable brand for capturing free customers

Competitive prices due to high energy volumes purchase

The largest buyer from several suppliers

High growth on sales of value added services with adequate margins

CPFL Brasil has the largest supplier of energy substations

High free customer retention in CPFL group and growth in the market

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Business Outlook – Distribution

Technical and commercial indicators are reference in the

sector

1,5% reduction loss is the CPFL target for the next 2 years

Losses reduction add more than R$ 100 million

EBITDA/year to CPFL results

Low investment required by the universalization program

Adding value through maximizing the distribution business operational efficiency

Benchmark in Technical and Commercial Losses

Proven experience in acquisition, restructuring and integration

― Piratininga acquisition

Search for opportunities in the industry’s consolidation

― players leaving the industry;

― players with high operational synergies.

Distribution expansion

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CPFL Energia1Q05 and full year 2004 ResultsWilson Ferreira Junior – CEOJosé Antonio Filippo - CFO Vitor Fagá de Almeida – Investors Relations

May, 2005