CURRENT SITUATION 9M13

(1)

CURRENT SITUATION

(2)

1. Sector Overview

(3)

3

Source: EPE

ELECTRICITY

CONSUMPTION 2013

Industrial Residential Commercial Others* Total

183 118 79 ₆₈ 448 185 125 84 ₇₁ 464 2012 2013

Brazil Consumption (

TWh)

(+3,5%)

Others*= Rural; Public Service; Public Lighting

Consumption by Category

(4)

4

4º

10 Biggest Producers

(Installed capacity in MW average December 2013)

8,4% 7,8% 7,3% 5,9% 5,8% 5,6% 5,4% 4,9% 3,9% 2,1% 4º

(5)

20 30 40 50 60 70 80 90

Jan Fev Mar Abr Mai Jun Jul Ago Set Out Nov Dez

2011 2012 2013 2014 43,2% 5

LEVEL OF RESERVOIRS

35,2%

Subsystem - Southeast / Midwest

(70% of the country’s storage)

(6)

0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000

Jan Fev Mar Abr Mai Jun Jul Ago Set Out Nov Dez

2011 2012 2013 2014 Média histórica

6

Affluent Natural Energy

–

Southeast / Midwest

Source: ONS

MW average

(7)

7 0 10 20 30 40 50 60 70 80 90 100

Jan Fev Mar Abr Mai Jun Jul Ago Set Out Nov Dez

2000 2001 2002 2003 2004 2005 2006 2007

2008 2009 2010 2011 2012 2013 2014

%

35,2 /feb 2014

33,5 /feb 2001

Stored Energy SE/MW

(% EARmax)

(8)

8 0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 J F M A M J J A S O N D GH_2001 GH_2014 GT_2001 GT_2014 Carga_2001 Carga_2014 MWmed Load_2001 Load_2014

Energy Generation 2001 X 2014 - Brazil

GH – Hydroelectric Generation GT – Thermal Generation

(9)

0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 0% 10% 20% 30% 40% 50% 60% 70% 80% Sudeste

EAR 2013 EAR 2014 ENA 2013 ENA 2014

EAR ENA [MWmed] 9 35,2% 35,0% MLT

EAR X ENA – Southeast / Midwest

EAR – Stored Energy ENA – Affluent Natural Energy MLT – Long Term Historical Average

(10)

10

AVERAGE PLD - R$/MWh

Subsystem Southeast / Midwest

67,31 97,36 135,4 38,73 70,28 29,42 166,69 413,95 214,54 339,75 196,13 344,84 207,62 121,29 163,38 266,16 260,99 331,07 290,72 378,22

2006 2007 2008 2009 2010 2011 2012 Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec Jan

Annual Average _{Monthly Average}

(11)

47,25 60,70 47,97 47,07 _46,27 43,91 44,00 43,87 44,63 45,84 45,86 45,37 _42,42 45,77 _45,45 48,04 47,97 47,03 43,73 _43,00 45,10 45,73 _46,33 47,38 46,89 _45,92 0,97 0,75 1,00 1,02 1,02 _1,00 0,98 1,03 1,03 _1,01 1,03 1,03 1,08 0,00 0,20 0,40 0,60 0,80 1,00 1,20 0 10 20 30 40 50 60 70

dez/12 jan/13 fev/13 mar/13 abr/13 mai/13 jun/13 jul/13 ago/13 set/13 out/13 nov/13 dez/13

Fator MRE

GW (Med) _{Garantia Física} _{Geração Hidráulica} _GSF

ASSURED ENERGY x HYDRAULIC GENERATION

11

Source: CCEE

Dec/2012 - Dec/2013

GW Average

Assured Energy Hydraulic Generation

(12)

Jan Febr Mar April May June July Aug Sep Oct Nov Dec

55,9

54,9 51,2

46,8

45,4 46,2

47,5 48,1

48,4 47,9

47,6 46,8

SEASONALIZATION BRAZIL 2014

12

GW average

Source: CCEE 12 Average 48,8 GW GSF: January estimated GSF 0,94

(13)

2. CESP Overview

(14)

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

capacity of 7,457.3 MW and total guaranteed power output of 3,916 average megawatts (MW).

Três Irmãos Ilha Solteira Jupiá Porto Primavera Paraibuna Jaguari

*

The concession was not renewed and CESP was temporarily designated as responsible for providing the Electric Energy Generation Service.

(15)

15

POWER PLANTS GENERATING

UNITS INSTALLED CAPACITY GUARANTEED POWER OUTPUT (AVERAGE MW) START OF OPERATIONS CONCESSION MATURITY DATE ILHA SOLTEIRA 14 1,540 1,017 Jan/23/1999 May/21/28 2 87 50 Apr/20/1978 Mar/09/21 2 27.6 14 May/05/1972 May/20/20 57 7,457.3 3,916 - - 20 3,444 1,731.5 Jul/18/1973 Jul/07/15 5 807.5 217.5 Nov/28/1993 Nov/18/11 14 1,551.2 886 Apr/14/1969 Jul/07/15 53 7,342.7 3,852 - - 4 114.6 64 - - JUPIÁ PORTO PRIMAVERA PARANÁ RIVER ... PARAIBUNA JAGUARI PARAIBA RIVER ... T O T A L ... TRÊS IRMÃOS *

* CESP was designated as responsible for providing Electric Energy Generation Service to Três Irmãos HPP. CESP will continue to function the plant until a new operator wins the auction.

(16)

2006 2007 2008 2009 2010 2011 2012 2013 0,921 0,921 0,934 0,928 0,934 0,930 0,925 _0,924 0,896 0.896 Source: ONS 16 0,0252 0,0252 0,0106 0,0105 0,0054 0,0059 0,0063 0,0069 0,0095 0,0101 2006 2007 2008 2009 2010 2011 2012 2013 Date : December 2013

(17)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 34,503 37.899 42.896 41.203 41.139 39.831 40.947 41.056 42.353 35.946 17 34,304

Guaranteed Power = 3,916.0 MW average* Nominal Annual Production = 34,304 GWh *including Três Irmãos Power Plant

CESP has been consistently producing energy above the physically guaranteed level

(18)

3. Financial Overview

(19)

32.849 32.845 33.150 38.794 40.724 39.832 41.353 10,303 8,220 62,15 68,81 76,11 79,41 81,40 84,73 92,29 91,50 113.74 19 529 586 712 803 787 827 954 1,287 546 646 721 753 794 803 985 1,068 658 680 786 739 862 841 943 959 659 713 769 789 876 908 937 2,391 2,626 3,379 3,319 3,084 2,987 3,819

Gross Revenue

BRL million Average Prices R$/MWh Invoiced Amount GWh 3,314

(20)

Operational Expenses

Adjusted Financial Expenses

(excluding exchange variation)

EXPENSES

20 2008 2009 2010 2011 2012 9M13 1.635 1.523 1.722 1.771 2.223 1.260 2008 2009 2010 2011 2012 9M13 721 592 466 ₄₄₃ 380 204 R$ million

(21)

Number of Employees

21

* Net effect of admissions in the tender and layoffs.

2009 2010 2011 2012 3T13

1

,

284

1,463

1

,

330

1,283

1,064

+179* -133 -47 -219 **

(22)

EBITDA

(R$ million)

EBITDA Margin (%)

EBITDA

22 2008 2009 2010 2011 2012 9M13 1.294 1.389 1.465 1.701 1.730 2.035 2008 2009 2010 2011 2012 9M13 52,2 52,4 50,4 57,5 51,6 68,9

(23)

2007 2008 2009 2010 2011 2012 9M13

144

168

84

29

23

27

44

42

71

87

106

45

28

Maintenance / Improvement Porto Primavera

129

Capital Investments

186

210

155

116

72

INVESTMENTS

23

72

R$ million

(24)

2005 2006 2007 2008 2009 2010 2011 2012 3Q13 24 Local Currency

FINANCIAL DEBT

Sep/30/2013 R$ 2,956 million 8.1 6.2 4.6 4.3 2.8 2.2 2.1 1.7 1.4 DEBT/EBITDA

Evolution by Currency

55% 7,5 6,9 7,0 5,3 4,5 4,2 3,7 _3,0 -69.38% 45% 9,8 36% 39% 35% 37% 31% 34% 27% 55% 45% _64% _61% 65% _63% _69% 66% 73%

(25)

FINANCIAL DEBT IN FOREIGN CURRENCY

25 OTHERS R$ 2 0% BRADY PLAN R$ 64 8% BNDES R$ 731 92% 09.30.2013: R$ 797 million (27%) ( US$ 357 million )

(26)

FIDC R$ 837 39% BONDS SERIES 8 R$1,090 50% ELETROBRÁS R$ 32 1% BIB’s R$26 1% BNDES Finame R$39 2% Pension Fund R$ 135 6%

FINANCIAL DEBT IN LOCAL CURRENCY

26

(27)

2013 2014 2015 2016 2017 After 2017 57% 72% 92% 64% 42% 4% 43% 28% 8% 36% 58% 96% 902

FINANCIAL DEBT PROFILE

27

Sept/30/2013 R$ 2,956 million

1,069 338 210 235 Local Currency 1,518 488

(28)

28

EBITDA Margin 68.9% 66.1% +2.9p.p

Operational Revenue 3,314,503 2,882,732 +15.0% Net Operations Revenue 2,952,910 2,548,824 +15.9%

EBITDA 2,035,308 1,684,177 +20.8% Net Income 795,212 444,593 +78.9%

FINANCIAL HIGHLIGHTS

Financial Results (317,624 ) (456,612) -30.4% R$ (000) Interest on Capital 196,000 115,000 +70.4%

(29)

CESP 6: +15.6%

SHARE PRICES – CESP 6

Source: AE Broadcast

IEE: - 8.8% 26,250 IBOV: - 15.5% 51,507

Period as from: Dec/31/2012 to Dec/31/2013

R$19.39

R$22.42

Page 29 29

(30)

30

(31)

4. Três Irmãos HPP

(32)

32

Concession Maturity Date November 18 , 2011

Provisional Measure 579 included Três Irmãos September 11, 2012

(Indemnization offered R$1.7 bi )

CESP did not accept the concession renewal December 3, 2012

Meetings with MME / EPE October 2013

(CESP divulges its indemnization amount of R$ 3.8 bi)

New bid foreseen for March 2014

TRÊS IRMÃOS HPP FACTS

CESP Required the Concession Renewal opportunely

Granting Power did not reply

Power from Tres Irmãos was allocated as quotas April 18, 2013 (Granting Power did not offer any indemnization at that time)

CESP is temporarily designated as responsible for the provision of Generation Services (CESP accepts it with GAG of R$ 29.3 million per year)

(33)

Costs of Management of Generation Assets (GAG)

(MME Ordinance No. 125/2013)

Annual : R$ 29.3 million

Annual Generation Revenue (RAG) *

(ANNEL Legal Resolution No. 1.572/2013)

Annual : R$ 71.8 million

Refunded:

Financial Compensation for the use of Water Resources and PIS/COFINS

Monthly: R$ 7.5 million

TRÊS IRMÃOS HPP REVENUE

33

(34)

5. Energy Auction

(35)

ENERGY AUCTION

35

Auction A -1 Date: Dec/17/2013 Energy delivery: Jan/1st/2014

Foreseen demand of the Distribution Market: 6,000 MW average

Total energy traded at auction: 2,571 MW average

Average PLD in December

R$ 291.00

CESP : Sale of 400 MW average (1 year) R$ 191.41

Sale of 98 MW average (18 meses) R$ 165.20

Products

Maximum Price

1 year

R$ 192.00

18 months

R$ 166.00

3 years

R$ 150.00

(36)

6. Q & A

(37)

Investor Relations

http://ri.cesp.com.br

[email protected]

+55 (11) 5613-3626