Disclaimer Some statements in this presentation constitute forward-looking

Скачать презентацию Disclaimer Some statements in this presentation constitute forward-looking

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Disclaimer Some statements in this presentation constitute “forward-looking statements” as defined by the American Securities Law, and they are subject to risks and uncertainties. “Forward-looking statements” are projections that may differ from definitive numbers and are not under our control. For a discussion of the risks and uncertainties as they relate to us, please see our 2007 Form 20 F, in particular item 3, which contains “Key Information – Risk Factors. ” All amounts are in accordance with Brazilian GAAP and are in compliance with CVM Instruction 469 of 2008, in accordance with the Law 11. 638 of 2007. 2

Agenda • Summary • Report • Background • Strategy Overview • Business Outlook • Financial Highlights • Our Strategy shows Solid Results • Market Recognition • Appendix – Regulatory Framework 3

Brazilian GDP growth is driven by domestic market Economics BRAZIL § § § § § Largest Latin America economy 8 th largest world economy § GDP (2007): US$ 1. 5 trillion (+5. 4%) GDP expected CAGR (5 yrs): 4% Flow of Trade (2007): US$ 281 billion Inhabitants: 188 million Area: 8. 5 million km 2 Currency(1): Reais (BRL) – US$1 = R$ 2. 17 § Reserves(1): US$ 200 billion Economic Development Acceleration Plan (PAC) § § Federal plan to invest US$ 250 billion in the period of 2007 -2010 Electric Power Generation: US$ 35 billion Electric Power Transmission: US$ 7 billion Renewable Fuel projects(2): US$ 9 billion § Electric Power Industry Power Generation üInstalled Capacity: 102 GW 81% Hydro; 11% Natural Gas 2% Nuclear; . 5% Coal 1% Oil; 5% Others Power Transmission üNational Network: 101, 858 km üPeak Demand in 2007: 62. 7 GWh/h Electricity Distribution üEnergy Consumption: 376, 905 GWh 46% industries and 24% householders ü 99% penetration countrywide üMore than 50% of South America üPeak Demand comparable to UK § Industry Total Revenue(2007): § US$61 Billion (2) Ethanol, Biodiesel and Alcohol pipeline Source: Brazilian Institute for Geography and Statistics (IBGE), Brazilian Electricity Regulator (ANEEL), Brazilian Association of Transmission Companies (ABRATEE), Energy Research Company (EPE). (1) As of October 8, 2008 5

Cemig focuses on sustainable strategic expansion in growing Brazilian and international energy markets Power Industry üLargest electricity distributor Chile Bra üThird largest power generation group zil üThird largest power transmission group Finances RR AP (2 Q 08 – Last 12 month) AM üTotal assets: US$ 14. 9 billion üStockholders’ equity: US$ 5. 9 billion PA MA CE RN PB PI PE AC TO AL RO SE üNet revenue : US$ 6. 7 billion BA MT üEBITDA: US$ 2. 6 billion üNet Income: US$ 1. 2 billion GO DF MG Generation ES MS SP RJ Transmission PR Cemig G Free Clients Distribution SC RS Power purchase 6 4

Long Term Strategic Plan addresses sustainable growth… • Broadening of CEMIG's area of activity, focusing on the electric industry – – Growth within Brazil's geographical area First steps towards international investments Expansion in line with Brazilian regulatory limits and sustainable growth Invest only in the power industry and gas distribution related business • Addressing shareholders’ long-term interests: – Dividend policy: minimum a 50%of net income payout and extraordinary dividends, provided cash availability – Corporate governance focused on transparency and respect of minority shareholders’ interests • Incorporation of our goals and commitments to our bylaws secures stability of the company's long-term planning – Capex limited to 40% of EBITDA: – Debt limited to 2 x EBITDA (2. 5 x with acquisitions) – Debt limited to 40% of Total Capitalization (50% with acquisitions) 7

Investment policy to guarantee sustainable growth… • Pillars of our activity: • Focus on electricity sector and related activities • Profitability: return compatible with each business • Partnerships with strategic investors: corporate governance • Growth through new projects, long-term vision • Opportunities in electricity generation and transmission • Acquisitions, drivers for short-term growth • Investment Criteria Selection: • Investments that add value to our shareholders • Continuous technological and operational improvement • Best management practices • Guarantees to ensure profitability: • Investment only in power generation, transmission and distribution and gas projects that offer rates of return compatible with the risk of each business but higher than the level projected in the Strategic Plan, with the exception of legal obligations. • Operational expenses and revenues of electricity distribution companies, must be kept aligned to the tariff adjustments and reviews. 8

Business portfolio seeks low risk exposure and ensures proper return – most of revenues are inflation protected Cemig Corporate Totals – 1 H 08 Power Generation • 13 companies • Revenue: R$ 1. 198 billion • Net income R$ 424 million • Ebitda: R$ 817 million • Sales Volume 15, 281 GWh o 76% free consumers o 24% distributors §Third largest in Brazil Net Income Gross Revenue 2% 1 % 2% 3% 51% 39% 15% 5% 2% 1% 51% Ebitda 41% 5% Power Transmission • 10 companies • Revenue R$ 185 million • Net Income R$ 60 million • Ebitda R$ 101 milion • 6% market share • Third largest in Brazil 76% Others Holding Co. • 3 companies • Revenue R$ 75 million • Net income R$ 34 million • Ebitda R$ 50 million • Revenue R$ 249 million • Net income (R$ 71) million • Ebitda (R$ 66 million) 2% Electricity Distribution • 2 companies • Revenue R$ 6. 150 billion o 88% captive market o 12% grid usage • Net income R$ 552 million • Ebitda R$ 1. 035 billion • Sales Volume 22, 452 GWh Largest in Brazil (transport) Gas Distribution • 1 company • Revenue R$189 million • Net income R$21 million • Ebitda R$27 million • Sales Volume 450 million m 3 • 4 % market share • Sixth largest in Brazil • Reference: 1 H 08 9

Our power matrix ensures higher operational margins and low environmental impacts Power Generation by Fuel Source Transmission lines 4, 829 10% 5, 313 km 2003 2007 Sub-transmission lines 16, 185 Power Generation 3% 16, 676 km 2003 44 521 2007 Distribution lines 429, 560 164 359, 304 178 6, 678 16% 5, 771 2003 2004 2005 2006 2007 km 2003 MW TOTAL 20% 2007 During last four years +1, 000 MW power generation capacity added and 71, 000 km of power network 10

Financial highlights Net income R$ million Ebitda margin (%) consolidated Ebitda* (R$ million) Dividend pay-out (% of Net income) ( * ) Ebitda of 2003 to 2005 is adjusted to reflect reclassification of account balances in accordance with changes in Plan of Accounts of Aneel (Brazilian electricity regulator). Dividends (R$ Million) Dividend Yield (%) 11

Financial discipline to lower debt cost and reduce FX exposure Main Indices Maturity Schedule Average period: 4. 5 years Consolidated Debt June 30, 2008 R$/million (1) Net Debt = Total Debt – Available – Regulatory Asset (RTE/BNDES) (2) As defined in loans contracts entered into with ItaúBBA Average real cost (%) 12

Results reflect long-term vision v Company's structure oriented towards electricity sector consolidation v Operational excellence aligned with costs reduction v Investment criteria defined by Strategic Plan to add value v Risk management to ensure reliable processes v Corporate governance a corporate value constantly evolving v Financial management to improve credit quality and cost reduction v Sustainability and governance contained in Company’s bylaws v Committed to provide investors’ return on investment 13

CEMIG´s Business Structure 100% Light S. A. 52, 25% Light Overseas Investments Ltd. 100% Usina Térmica Ipatinga S. A. Cia. Transleste de Transmissão Cia. de Gás de Minas Gerais CEMIG PCH S. A. Cia. Transirapé de Transmissão. Efficientia S. A. Consortium AHE Funil 25% CEMIG Geração e Transmissão S. A. Consortium da Usina Hidrelétrica de Aimorés CEMIG Distribuição S. A. Rio Minas Energia Participações S. A. Light Serviços de Eletricidade S. A. 100% CIA. ENERGÉTICA DE MINAS GERAIS Horizontes Energia S. A. Cia. Centroeste Minas de Transmissão Axxiom Soluções Tecnológicas. S. A. 100% Light Energia S. A. 100% 49% Consortium da Usina Hidrelétrica de Igarapava 14, 5% Lightger Ltda. 100% Consortium AHE Porto Estrela 100% Sá Carvalho S. A. 100% Rosal Energia S. A. 100% Consortium AHE Queimado 100% Itaocara Energia Ltda. 100% Instituto Light de Desenvolvim. Social e Urbano 100% 49% 49% 51% Cia. Transudeste de Transmissão CEMIG Trading S. A. Transchile Charrúa Transmisión S. A. Centro de Gestão Estratégica de Tecnologia 100% 24% 49% 100% Empresa de Infovias S. A. CEMIG Capim Branco Energia S. A. Empresa Regional de Transmissão de Energia S. A. CEMIG Serviços S. A. 100% Consortium Capim Branco Energia Empresa Paraense de Transmissão de Energia S. A. 100% Guanhães Energia S. A. 100% Empresa Catarinense de Transmissão de Energia S. A. Usina Termelétrica Barreiro S. A. 100% Hidrelétrica Cachoeirão S. A 55, 2% 24, 5% Lighthidro Ltda. 82, 5% Light Esco Prest. Serviços Ltda. 100% 25% 49% 33, 33% LIR Energy Ltd. 100% 21, 5% Madeira Energia S. A. 18, 35% VS: 25% TS: 18, 83% Empresa Norte de Transmissão de Energia S. A. 10% 100% 7, 49% Key 18, 35% Hidrelétrica Pipoca S. A. Empresa Amazonense de Transmissão de Energia S. A. 49% Baguari Energia. S. A. 43 Companies VS: 25% TS: 16, 63% Transmission companies Distribution companies Generation consortia Financial operations Non-profit Gas distribution 69, 39% Telecommunications 07 Consortia Trading Holding company CEMIG Baguari Energia. S. A. Services 100% VS = Voting Shares TS= Total Shares Note: Two companies – Central Hidrelétrica Pai Joaquim S. A. and Central Termelétrica de Cogeração S. A. – are not included as they are in the process of being wound up. Consortium AHE Baguari Position as of july 2008 34% 15

Strong shareholders base assures liquidity NYSE CIG. C CIG Average Daily Trade (2 nd. Q 2008) Latibex XCMIG ADR Bovespa CMIG 3 CMIG 4 US$ mn Bovespa: RS 60 million NYSE: US$ 33 million (*) Preferred Shares: CMIG 4, CIG, XCEMIG Common Shares: CMIG 3, CIG. C (*) On June 30, 2008 16

Shareholders in 45 countries EUROPA Luxembourg UK Spain Switzerland Ireland Guernsey Virgin Islands North America Canada United States Jersey Holland France Norway Denmark Italy Sweden Germany Belgium Austria Portugal Poland Romania ASIA Brunei China Singapore South Korea Japan Malasia Central America Bermuda Bahamas Cayman Islands Mexico Turks & Caicos Islands South America Argentina Bolivia Brazil Chile Uruguay Middle East Saudi Arabia United Arab Emirates Kuwait Lebanon Oman Syria OCEANIA Australia September/2008 17

The blend of shareholders provides long term perspective § Our shareholder diversity provides a global business management vision focused on sustainability of the company's activities Total Shares ON PN 44% 56% § Listed in major stock exchanges § BOVESPA (Brazil) § NYSE (USA) 51% 33% § LATIBEX (Spain) Total shares 486, 461 thousand Common 212, 622 thousand ON 6% 10% PN 3% Preferred 273, 839 thousand 33% MG 51% SEB(*) 33% Local investors 29% International investors 6% MG and others 3% Local investors 10% Shares in Treasury 207 thousand 64% International investors 68% Share nominal value = R$5. 00 ADR outstanding aproximately 16% of capital 1 ADR = 1 share in Bovespa SEB(*) International investors Local investors MG (*) Controlled by international investors 18

Corporate Governance: implementation of best practices Highlights • • • Code of ethics; 6 Bo. D members appointed by minority shareholders; Bo. D approves all investments above R$5 mn; Bo. D approves nomination of external auditors; Executive Board coordinates external auditor selection process (in compliance with the Brazilian Procurement Legislation for state owned companies); Fiscal Council plays Audit Committee key role, including: – Accounting practices; – Dividend policy; – Prevention of fraud; – Financial statements analysis. SOX compliance: – Sections 302 and 404 Certification; BOVESPA level 1; NYSE listed company practices. Shareholders Board of Directors 14 members Executive Board Conselho Fiscal ( Fiscal Council) 5 members 19

Strategic Plan Results ü Expansion: • Acquisition of Light S. A. in 2006, through RME, a company formed in partnership with private investors, achieved 100% Pay Back in 2008 – Over 3. 8 million consumers in 31 municipalities in the state of Rio de Janeiro; – Third largest electricity distributor in Brazil. • Acquisition of TBE, a group of five power transmission companies located in the North and South of Brazil, totaling 2, 000 km of transmission lines. – 20% stake in 2006 + 20% in 2008 • Acquisition of Lumitrans (40 km, 525 k. V) and STC (195 km, 230 k. V) in 2008 • Construction of a transmission line in Chile. • Generation capacity increased more than 900 MW over the last 12 months – Baguari power plant construction started – 140 MW (34% Cemig); – Small Hydros Program: 91 MW (49% Cemig) – Santo Antönio Power plant 3, 150 MW (10% Cemig) • Generation greenfields – Feasibility studies: more than 4, 000 MW of Hydros, Wind and Gas – Partnership with Light in Hydro Generation: 237 MW, R$856 m in investments (total) 22

Strategic Plan Results ü Dividends: – R$ 1. 3 billion were paid in 2007, representing 80% of 2006 net income: • • • – Interest on Equity: R$ 169 mn ; Complementary dividend: R$ 716 mn; Extraordinary dividend: R$ 497 mn; R$ 434 million paid in June, 08, as the first part of the total R$ 868 million approved by General Shareholders Meeting to be paid in 2008, representing 50% of 2007 net income Dividends Dividend Yield (R$ Million) (%) 23

Strategic Plan Results ü Solid Financial Situation: – Complying with Strategic Plan commitments; – Return on investment compatible with each business risk; – Extended debt profile and lower costs; – Last twelve month Ebitda reaching R$4, 195 mm Ebitda margin (%) Net income R$ million Ebitda (R$million) 24

Performance Indicators Economic Profit (R$ million - Consolidated) üStrategy of growth through acquisitions boost economic profit *Calculated to represent the opportunity cost of the period. Not a reference for economic-financial evaluation calculations. 25

Continuous improvement of our KPI Leverage (%) Debt / (Debt + Stockholders’ equity) Key debt indicators (%) Key performance indicators in line with Long Term Strategic Plan Earnings per share (R$) Dividend payout (%) 26

Basics of our business portfolio • Power generation – More competitive environment • • • Regulated market : long term contracts with distributors sales through public auctions. Un-regulated market : medium term contract with large clients. Contract terms bilaterally negotiated. Power transmission – – • Most successful regulation Stable cash flow: fixed income alike investment Electricity distribution – Strongly regulated • • Operating expenses: Full pass-through mechanism. Yearly adjustment for non controllable costs and inflation. 5 year rate setting review: sharing productivity gains with users Revenues come from grid use and sales to captive market Natural gas distribution – – • Same concession area of Cemig Distribuição Partnership with Petrobrás (Petrobrás 40% and Cemig 55%) Telecommunication backbone services – Synergy: usage of power transmission lines for fiber optics cables • 60% of capacity used by Cemig Group 28

Power Generation: Cemig´s consolidated generation assets (June/08) • Cemig provides 7% of Brazil’s generation capacity and supplies 19% of Brazil’s free customers market 29

The power purchased to meet client´s needs Average MW Cemig GT - Consolidated capacity breakdown Planned purchases Own resources (concessions to be renewed for the 2 nd time) Bilateral purchase contracts / trading Own resources 30

Our power generation contracts start re-pricing in 2010 Cemig GT - Balance of supply and demand Average MW Detailing of requirements Own capacity Guidance for 2008 -2012 Constant prices as of June/08 R$/MWh Planned purchase Uncontracted power Probable renewals of old contracts to free consumers and traders Free Market New Contracts (market share increase) Free Market Sales (old contracts to free consumers and traders) Sales to be decided (concessions to be renewed for 2 nd time) Regulated Market Sales (distributors) Pass-through (operational agreement with self-producers) • Actual contract prices + forward price trend for the re-contracting. • After 2014 all free customer’s contracts will have been re-priced 31

Power Generation Auctions • New Energy Regular Auctions: – 2008 Auctions • Reserve - August – – – 14 th 513 MWAvg from 2012 15 year long contracts Price: R$58/MWh + R$96/MWh (Competitiveness Index > ICE+ Variable Expected Revenue > RVE) • A-3 – September 17 nd – – – • New Energy Special Auctions – Madeira River Projects: – Santo Antônio Power Plant: December 10, 2007: • • 1, 076 MWAvg from 2011 15 year long contracts Average Price: R$128. 42/MWh • A-5 - September, 30 th – – 3, 125 MWAvg from 2011 15 year long thermo contracts and 30 years long for hydro Thermo Price: R$145. 47/MWh Hydro price: R$ 98. 98/MWh • • 3, 150 MW of installed capacity 2, 218 MWAverage of energy > Capacity Factor (CF) of 69%; Price: R$78. 87/MWh (equivalent to R$99/MWh for a traditional 55% CF Hydro Power in Brazil) Winner consortium: – 10% Cemig – 39% Furnas – 20% Equity Fund (Santander-Banif) – 17. 6% Odebrecht – 12. 4% Andrade Gutierrez Start-up schedule: – 140 MW in 2012; 860 MW in 2013; 860 MW in 2014; 860 MW in 2015 and 430 MW in 2016 Installation license granted on 08/12/08 – Jirau: 3, 326 MW of installed capacity: May 19 2008: • Old Energy Auction: – – – Every year on last working day of November; Power delivery from the next year on; 8 year long contracts (can be from 3 to 15 years). • • • start-up in 2013 Winner Consortium: Energia Sustentável leaded by Suez Price: R$ 71. 40/MWh Effective power of 2, 000 Average MW Capacity factor of 60% 32

Power Generation Auctions by Fuel Type A-3 Auction (contracts start 2011) 25% LNG Oil 75% A-5 Auction (contracts start in 2013) 1%4% Hydro 9% LNG 22% Oil Imported Coal 64% Biomass 33

Business Opportunities: Small Hydros Program • • Short-term supply alternative Successful funding format: – 30% Equity • Cemig 49% • Private Investor 51% – 70% Debt • BNDES Current status – 6 plants contracted : 91 MW PCH Cachoeirão 27 MW PCH Pipoca 20 MW PCH Senhora do Porto 12 MW PCH Dores de Guanhães 14 MW PCH Jacaré 9 MW PCH Furtuna II 9 MW – Investments of R$ 380 million Under Negotiation – – Àrea reservada para o mapa 16 Plants 236 MW os installed capacity (*) PCH = Small Hydro Power Plant 34

Business Opportunities: biomass cogeneration Sugar and ethanol potencial in Minas gerais Plants Existing Expected Quantity 26 59 Generatn. (MWa*) Surplus (MWa*) 530 420 2046 1755 With Protocol 34 1191 953 Without Protocol** Other*** 13 12 591 264 591 211 85 2576 2175 TOTAL * Average generation in 6 months of the year ** Data provided to Cemig on consultation access *** Crushing data from 9 mills with no expected startup date Note: Protocol entered into with the State of Minas Gerais ü Approximately 75% of the plants are located in the heavy-industry region known as the Minas Triangle ü Generation available from April to September, the dry season for the hydro power plants 35

Power Transmission: Cemig (June/2008) • Operational Start-up of two transmission lines in 2007: – Itutinga-Juiz de Fora (Transudeste) - 345 kv, 34 km; – Irapé-Araçuaí (Transirapé) - 230 kv, 15 km. • Start-up of Charrúa – Nueva Temuco transmission line in 2008: – 220 k. V, 205 km • With acquisition of the interest held by Brookfield in TBE (still depends of the approval by ANEEL) • • Cemig Corporation will stand for 6% of Brazil´s transmission capacity and will be third largest transmission company. 36

Power Transmission tariff review and auctions • June 27 th auction results: – – – • October 3 rd auction results: – – • Average discount of 37. 62% 356 km (6 lines and 7 substations) to be added to the National Grid among 6 Brazilian States Estimated total investment of R$ 500 million Operational start-up ranging from 16 to 24 months Allowed return on asset approach (existing assets in 1995): – – – • Largest auction organized by Aneel since 1998 Average discount of 20. 18% 3, 000 km (19 lines and 20 substations) to be added to the National Grid among 12 Brazilian States Estimated total investment of R$ 2. 86 billion Operational start-up ranging from 15 to 36 months Cemig´s consortia won a set of 5 lines, with 775 km and 2 substations, operating at 230 k. V, annual revenue of R$ 26 million Benchmark WACC: currently 8. 45%; Tariff review: WACC enlarged to 9. 18%; Asset base review every 10 years (2 cycles) 2007 Tariff Review: – – Due since 2005; New methodology disclosed on March, 09, 2007; Small part of Cemig´s revenue was reviewed. As a result our total transmission revenue was reduced by 3%; Asset base review shall occur in 2009, with effects retroactive to 2005 37

Electricity Distribution: Cemig (June/2008) • • Cemig supplies 10% of Brazil´s captive market Largest distribution company (by km of lines, number of consumers and transported energy) 38

Electricity Distribution tariff review • Allowed return on asset approach: • New Tariff Review methodology: – – – – • Benchmark WACC: was 11. 26%; Tariff review: WACC of 9. 95%. Reference company model disclosed: – Black box opened. Asset base review every 10 years (2 cycles): CEMIG in 2013; Regulatory energy losses and delinquency rate specific for each concession area; Special obligation financed asset depreciation will be granted in the long run; X Factor: excluded the influence of Consumers Satisfaction Index. Cemig Distribution Companies tariff reviews: – Cemig Distribuição: -12, 24% valid from April 8, 2008 forward. • • – Regulatory Ebitda Margin: 21% Losses coverage: sufficient Market Growth: 3. 17% p. a. ( less risk than in 2003) X Factor (Xe) : 0. 84% Light: November, 2008. 39

CAPEX ü New investment program: • Transmission assets expansion (acquisitions)> R$ 500 million • Gasmig expansion (capital contribution) > R$ 94 million Estimated amounts as per company planning for the 2008/2012 cycle. 40

Planned expansion 41

Light for All Program – Phase 2 R$ thousand ü Expansion of the Light for Everyone Program is made possible because of government subsidies. 42

EBITDA Guidance 2008/2012 (Constant as of June 2008 R$ million) Consolidated figures Consolidated including amounts for Holding companies and affiliates Power Generation and Transmission Company Distribution Tariff Review Year 2008 2009 2010 2011 2012 Lower limit 4, 005 3, 844 4, 139 4, 492 4, 730 Electricity Distribution Company Year 2008 2009 Lower limit 1, 725 1, 470 Upper limit 4, 360 4, 207 4, 529 4, 940 5, 228 Year Lower limit Upper limit 2008 1, 745 1, 885 2009 1, 760 1, 900 Holdings Upper limit 1, 875 1, 620 Year 2008 2009 Lower Upper limit 620 720 650 750 43

How we will finance our growth • Our strategy encompasses key elements in financing our expansion – We will seek partners who can add value via: –reduced need for equity; –transparency of the economic/financial projects valuation; –access to low-cost financing. – Maximization of cash management: –Generation of surplus; –Rollover of maturing debt. – Search for the best opportunities to raise funds to finance expansion; – Continual improvement of our credit risk rating. 45

Indicators show superior credit quality ü Debt management meets the following directives: ü Preservation of long-term credit quality at levels sufficient to have a low-risk rating – Rating: Aa 3. br by Moody’s and A+. br by Fitch ü Reduction of exposure to exchange rate risk ü Extension of debt maturity profile Main Indicators R$/million (1) Net Debt = Total Debt – Available – Regulatory Asset (RTE/BNDES) (2) As defined in loans contracts entered into with ItaúBBA 46

Opportunities: financial market high liquidity Bank Loans • Debt rollover • Assignment of receivables Local Capital Market • Debentures are the major funding source (long-term, denominated in Wholesale Prices Index [IGPM]) • FIDC (receivables fund) International Capital Market Multilateral Agencies • Eurobonds • IFC, JBIC, CAF • Perpetual bonds • Long Term • Tax breaks on remittance of interests 47

Agenda • Background • Strategy Overview • Business Outlook • Financial Highlights • Our Strategy shows Solid Results • Market Recognition • Appendix– Regulatory Framework 48

Results of Cemig’s participation in RME (Light acquisition) R$ 174 R$ 67. 6 Aug. 10, 2006 R$ million Sale of Option Rights (*) Dividends Received Acquisition price (CEMIG’s share) Nov. 30, 2007 R$ 26. 5 R$ 82. 7 Mar. 31, 2008 Jun. 20, 2008 (*)The amount related to financial compensation due to Cemig’s renunciation of exercising the option to purchase RME’s partners rights over the Light’s generation assets, that will be paid as shown below: • One partner already paid its part in full in July 2008 • The two other partners will pay the amount in parcels equal to 10% of the dividends distributed to them, and the period for total payment cannot be more than 9 years. The amounts are corrected by CDI + 1% per year. 49

Consolidated net revenue ü Growth in net revenue reflects business diversification, and positive effects of acquisitions (RME/Light S. A. and TBE companies) ü Cemig Distribution provides 58% of total net revenue 50

Operating Expenses ü Cemig Distribuição contributes with 65 % of total costs 51

Evolution of consolidated expenses – 2 nd Quarter 2008 Amounts in R$ million Variation in Operating Expenses Uncontrollable R$ 140 million Controllable R$ -13 million Amounts in R$ million ü Increase in personnel expenses due to fewer transfers to projects under way and voluntary dismissal plan (PPD) ü As of the 2 nd tariff revision of Cemig D (April 8, 2008), new amortization criteria of Special Obligations reduces depreciation. A credit of R$ 88 million is estimated for the 2008 results of Cemig D 52

Expansion of consolidated net income ü Result shows growth consistent with solid fundamentals • Growing productivity in all areas • Continuous improvement in operational margins • Diversification of the risk inherent to each business through integrated structure 53

Cemig Geração e Transmissão ü Increasing profitability, growth in sales and strict expense control 54

Cemig Distribuição ü A operational efficiency program was put in place and full results shall contribute do cost reduction by 2010 55

Cemig Distribution: Expenses Evolution R$ million Variation in Operating Expenses Uncontrollable R$ 46 million Controllable R$ -5 million ü Increase in consolidated expenses due to uncontrollable costs, which are passed through to the tariff R$ million ü Controllable Expenses: • Provision of R$ 28, 4 million due to PPD (Voluntary Dismissal Program) • Post- Retirement expenses increase due to long term interest rates reduction forecast • Reduction in the Depreciation related to new criteria for Special Obligation accounting • Less operational provisions due to reduction in the ones related to bad debt 56

Market Recognition Included in the DJSI for the 9 th year running. Selected as worldwide leader of the Utilities “Supersector”. Prêmio Anefac Transparency Trophy, 2008. Fiat Qualitas Award Best Worldwide Power Supplier Included in Bovespa Corporate Sustainability Index. 58

Investor Relations E-mail: ri@cemig. com. br Phone: (55 31) 3506 -5024 Fax: (55 31) 3506 -5025 59

Accounting criteria for Financial Statements consolidation • RME owns 52, 247% stake on Light and, under the accounting rules, consolidates 100% of the financial statements of its subsidiary; • Cemig owns 25% of RME, and thus consolidates 25% of Light, applying a 11. 5% reduction in the line “Minority interest”. – for the other companies in the group, figures are consolidated in proportion of Cemig’s holding; • In this presentation: – we have maintained the RME information compatible with the financial statements: 25%; – figures for the assets are labeled LIGHT S. A. , and stake adopted is 13, 06%; – figures for people – number of employees, consumers – are informed as 100% of Light and of TBE. 60

Glossary Average outage frequency (FEC): Average number of outages suffered in a given period per consumer, in a given group of consumers. Debt coverage index: Ebitda divided by total financial expenses in the year. This gives a figure for the company’s capacity to pay debt servicing. Deferred Tariff Adjustment (RTD): Every four years Aneel decides on a “periodic” tariff review for each electricity distributor, to adjust the level of annual adjustments to preserve the financial equilibrium of the concession contracts, coverage of efficient operational costs and adequate remuneration of investment. On April 8, 2003, this adjustment for Cemig was set provisionally at 31. 53%, but the final adjustment decided was 44. 41%, and the percentage difference of 12. 88% will be applied to Cemig’s tariffs in “deferred” format: i. e. , as an addition to each of the annual tariff adjustments decided for the years 2004 through 2007, cumulatively. The difference between the adjustment to which Cemig Distribuição is entitled and the tariff in fact charged to consumers has been recognized in Cemig’s financial reporting as a Regulatory Asset. Ebitda: Earnings before interest, tax, depreciation and amortization – a measure of a company’s operational cash flow, providing an indicator of the cash flow generated by a company’s principal business. Ebitda margin: Ebitda/net operating revenue. This provides a view of the company’s cash generation capacity. Hedge: Financial mechanism for protection against fluctuations in prices – e. g. of commodities -, or variables such as interest rates or exchange rates. Hydroelectric power plant: A generating plant that uses the mechanical energy of falling water to operate electricity generators. Manageable costs: Costs that essentially depend on the efficacy of corporate management, such as personnel expenses, materials, outsourced services, etc. – also referred to as controllable costs. Net margin: Net income / Net operating revenue – an indication of a business’s profitability. Outage time per consumer (DEC): Average service outage time per consumer in a given group of consumers over the specified period. The Extraordinary Tariff Recomposition (RTE): This was a tariff adjustment granted by the government in December 2001 to the distributors and generators of the regions where rationing was imposed. It was one of the conditions of the General Accord for the Electricity Sector: an increase of 2. 9% in the tariff of residential consumers (with the exception of Low-Income Residential Consumers), and an increase of 7. 9% for other consumers. Its purpose was to make good the losses suffered by distributors and generators as a result of the reduction of consumption imposed by the government. The duration of the adjustment varies in accordance with the time necessary to recover the loss of each concession holder. The CCC (Fuel Consumption Account): This account was created to accumulate funds to cover the increase in costs associated with greater use of thermal generation plants in the event of drought – since the marginal operating costs of thermal plants are greater than those of hydroelectric plants. All Brazil’s electricity companies are obliged to make an annual contribution to the CCC, calculated on the basis of estimates of the amount of fuel likely to be required by thermal plants in the following year. 61

Glossary The CDE (Energy Development) Account: This is a source of subsidies to make alternative energy sources such as wind and biomass more competitive, and promote universalization of electricity services. It is funded by annual payments made by the concession holders for the use of public assets, and also from penalty payments imposed by Aneel for infringements. The CRC (Results Compensation Account): Before 1993, electricity concession holders in Brazil were given a guarantee of a rate of return on their investment in the assets used in the provision of electricity to clients, and the tariffs charged to clients were uniform over the whole country. Profits generated by the more profitable concession holders were reallocated to the less profitable concession holders, in such a way that the rate of return on assets was equal to the national average for all of the companies. Though the results for the majority of Brazil’s electricity concession holders were deficits, these were posted by the federal government as assets in the “CRC account” of each company. When the CRC Account, and the concept of guaranteed return, were abolished, concession holders that had positive balances in their “CRC accounts” were able to offset these balances against any liabilities owed to the federal government. The CVA – the Offsetting Account for Variations of “Portion A” items: “Portion A” is the list, used in the calculation of the electricity distributors’ annual tariff adjustments, of the utility’s cost items that are not under its own control. The CVA mechanism compensates for changes in the list’s total over the year to the new tariff date. The variation – positive or negative – is passed on in the tariff adjustment. The Global Reversion Reserve (RGR): This is an annual amount included in the costs of concession holders to generate a fund for expansion and improvement of public electricity services. The amounts are paid monthly to Eletrobrás, which is responsible for the management of the resulting fund, and are to be employed in the Procel mechanism. Thermal power plant: A generating plant that converts chemical energy contained in fossil fuels into electricity. Total return to stockholders: Sum of the dividend yield and the percentage appreciation in the stock price. TUSD – Toll for Use of the Distribution System: This is paid by generation companies, and by Free Consumers, for the use of the distribution system belonging to the distribution concession holder to which the generator or Free Consumer is connected, and is revised annually in accordance with inflation and the investments made by the distributor in the previous year for maintenance and expansion of its network. The amount is: the quantity of energy contracted with the distribution concession holder for each link point, in k. W, multiplied by a tariff in R$/k. W set by Aneel. Volt: Unit of the electrical potential at which energy is supplied. Voltage: For the purposes of efficient transport of electrical energy over transmission lines from the generating plant to the consumer, there are various levels of transmission voltage. Similarly, electricity is used by consumers at various different voltage levels. Watt (W): Unit of power required for a device to operate. 1, 000 watts is a kilowatt (k. W), 1 million watt is a Megawatt (MW), and 1 billion watts is a Gigawatt (GW). Watt-hour: Measure of energy (work done by electric power): The kilowatt hour, Megawatt hour, Gigawatt hour and Terawatt hour (KWh, MWh, GWh, TWh) respectively represent 1, 000, 1 million, 1 billion and 1 trillion watt-hours. 62

Agenda • Summary • Report • Background • Strategy Overview • Business Outlook • Financial Highlights • Our Strategy shows Solid Results • Market Recognition • Appendix 63

Generation: 6, 678 average MW Free Customer: 20% of Brazil’s Market Share Retail: Biggest distribution company Transmission: 5, 348 Km Distribution: 457, 019 Km 64 64

Power Generation: Brazilian power generation capacity Comments (% of total installed capacity – Dec-2007 ) • Federal state-owned companies still have the greatest installed capacity • Social and environmental issues are the most critical points for expanding existing capacity • Fair setting of the “price ceiling” at auctions is crucial for the feasibility of new projects Source: ANEEL 65

Power Generators are the most exposed to risks • Regulated market – Concessions granted based on the least price approach. – Power purchase contract: • Auctions organized by a Federal agency: – Final buyer : Electricity Distributors. • New capacity : longer term, no market risk, inflation adjusted; • Existing capacity: shorter term, volume reduction at the distributor discretion, inflation adjusted. • Unregulated market (free market) – Target: large industrial clients, large businesses; – Price freely negotiated: conditions , term, inflation adjustment; – Usually take or pay contracts. 66

Power Generation Price Trend • Price will behave differently according to the nature of the contract to be auctioned by ANEEL: – Existing capacity (so called “old energy”) contracts: • power to be supplied in a year from now; • Term of 8 years; • Imply distributor ‘s forecasted demand risk: – Contractual volume can be reduced. – New capacity (so called “new energy”) contracts: • Power to be supplied in three or five years from now; • Term of 30 years; • No risk on the contractual volume reduction by distributors. 67

Supply–Demand balance in the Brazilian System Structural electricity balance (Assuming: no restrictions on supply of natural gas) Need of new capacity Sources: PMO May 2008, Cemig research. GDP of 4. 2% and market growth of 4. 9% 68

Supply–Demand balance in the Brazilian System Structural electricity balance (surpluses and deficits) (Assuming: no restrictions on supply of natural gas) Sources: PMO May 2008, Cemig research. 69

Brazilian hydroelectric power generation potential Situation as of January 2008, MW State RR Estimated Overall total NORTH AP PA MA CE RN PB PI PE AL TO RO SE BA MT GO NORTHEAST AM MG PR RJ SC RS Amazon region: Estimated capacity to be developed is 63% of the total available CENTERWEST SP SOUTHEAST ES MS SOUTH AC Operation & Construction Source: Eletrobrás (SIPOT). 70

The Madeira River generation complex Located upstream from Porto Velho, capital of the State of Rondônia: Santo Antonio falls Santo Antônio hydroelectric plant General data Installed power 3, 150 MW Firm energy at location 2, 218 MW average Generation units 44 Type of rotors Jirau falls Bulb Main contract events § 01/11/07 – Tender published § 23/11/07 – Bidders registered § 30/11/07 – Guarantees deposited § 10/12/07 – Auction held § 28/05/08 – Concession contract § 01/12/2012 – Startup § 31/05/2043 – End of concession 71 71

Madeira River generation complex I – Single plant alternative – rejected by a close margin RESERVOIR OUTSIDE NATURAL RIVER BANKS SANTONIO PLANT RESERVOIR INSIDE NATURAL RIVER BANKS II – Alternative with two lower-fall plants – SELECTED Alternative dam locations SANTONIO PLANT RESERVOIR INSIDE NATURAL RIVER BANKS m RESERVOIR SLIGHTLY ABOVE NATURAL RIVER BANKS m RESERVOIR INSIDE NATURAL RIVER BANKS m RESERVOIR SLIGHTLY ABOVE NATURAL RIVER BANKS A bulb rotor 72 72

Santo Antônio hydro plant – basic information • Low-fall plant (13. 9 m), average estimated flow 568 m 3/s, lake 271 km 2, resulting in lower ratio between reservoir area and total energy generated than in other Amazon region plants: index of 0. 09 – – Balbina ( 250 MW, 2, 360 km 2 reservoir): Samuel ( 217 MW, 584 km 2 reservoir): Manso ( 210 MW, 387 km 2 reservoir): Tucuruí (4000 MW, 2, 414 km 2 reservoir): index 9. 44 index 2. 69 index 1. 84 index 0. 61 • Low population on banks of Madeira River: 1, 762 people affected , in 415 homes • Management of construction: Furnas and Cemig (being decided) • EPC Group – Construction leaders: • Norberto Odebrecht and Andrade Gutierrez – Manufacturers of rotors and generators: • Alstom, VA Tech Hydro and Voith 73 73

Santo Antônio Hydro Plant: model’s assumptions Scenario Impact on IRR on initial base case – including bringing forward completion date 11. 12% A. Increase in assured energy – 2% (power gain) + 0. 54% Base case rate of return 11. 66% B. Releverage + 0. 84% Target return rate of the investment 12. 50% C. Additional Fiscal Credits + 1. 23% D. Additional increase in assured energy (for each 1% of additional gain, up to 10%) + 0, 19% 74 74

Power Transmission: Brazil (2006 installed capacity) Comments • Infrastructure companies have won the auctions for new lines, particularly Spanish companies. • The format for the expansion of new lines – auction based on the lowest RAP (Annual Permitted Revenue) – has attracted investors. * Includes the 21% stake in TBE; Source: ANEEL (TECHNICAL NOTE No. 082/2006 – SRT/ANEEL of Jun-27 -2006) ** Deducting the 21% stake in CEMIG 75

Power Transmission: Brazil (2007 Annual Permitted Revenue) Comments • Infrastructure companies have won the auctions for new lines, particularly Spanish companies. • The format for the expansion of new lines – auction based on the lowest RAP (Annual Permitted Revenue) – has attracted investors. * Not including Cemig´s stake in TBE. Considering this stake, Cemig is the sixth largest transmission Company in Brazil Source: ANEEL (TECHNICAL NOTE No. 496/2007 – SRT/ANEEL) 76

Transmission regulation is the most successful one • Competition for concession contract: – Cap price approach; – Allowed revenue: the winner bid is the lowest revenue earned from users; – 30 -year long concession. • Stable Cash flow – Guaranteed contracts signed with users: • Receivables pledged as guarantees; • Annual inflation adjustment; • Revenue secured regardless the use of the asset; • Low operating risk: • Penalties are applied only in the case of bad maintenance or poor performance. • Fixed income alike investment. 77

Transmission network expansion • Facilities built before 1995: – Concession will expire on July 8, 2015; – 20 -year extension may be granted at ANEEL discretion; – Allowed return to be reviewed in a near future; • Expansion projects can be carried out in three ways: – New concessions to be granted through auctions: • Projects are selected by the ONS in light of the National Grid needs; • Auctions are organized by ANEEL; • Contracts are standard and term is for 30 years; • Bids are made on annual revenue. – Authorization to build, directly requested by the ANEEL: • In certain cases, ANEEL may request any utility to build a transmission line or a substation of regional impact. – Acquisition of existing facility. 78

Electricity Distribution: Brazil AES RR Ashmore Energy AP Main controlling groups in Brazil MA AM PI PA Energisa (Cat-Leo) CE RN Endesa PB PE AC State-owned, Federal AL TO RO EDP SE BA MT State-owned, Indiv. State Grupo Rede GO Brazil Numbers (2007) MS § § Equatorial Energia MG Companies: 64 Consumer units: 58 million Consumption: 370 TWh Access: 97% of population SP ES RJ PR Neo. Energia CPFL RME (*) SC Other RS Source: Aneel, EPE (*) Cemig has 13%stake 79

Electricity Distribution business is the most regulated one • Allowed return on asset approach: – – • Operating expenses: – – – • Charges on D grid use by the access free users; Sales to captive users. 5 year rate setting review: – • Full passed through mechanism: – Energy purchase expenses under certain circumstances. Yearly inflation adjusted; Tracking account for offsetting estimated expenses. Revenues come from: – – • Benchmark WACC: currently 11. 26%; 2008 tariff review: WACC reduced to 9. 98%. Sharing productivity gains with users. Distributors are supposed to buy power to meet 100% of the forecasted demand, through auctions organized by Federal Agency – ANEEL: – In case a large consumption client (eligible as free consumer) chooses another supplier, distributor are allowed to reduce the contractual volume at the same amount; – If the growth is poor, contractual volume can be reduced by 4% yearly. 80

Tariff Review Process PARAMETERS Remuneration of Capital Income Taxes GROSS WACC 15. 08% Residential Commercial OPEX Rural Net Regulatory Asset Base Public Authorities Public Service Public Illumnination Central and Regional Structures Commercial processes Additional Costs Own Consumption Sector Charges Transport of electricity Purchased Energy + Parcel A Reference Company RC Default O&M processes Industrial Verified Revenue Depreciation Rate 4. 65% Reinstatement Installment Revenue Captive Consumers Accumulated Depreciation – Others REVENUE FROM BILLING TO CONSUMERS REQUIRED REVENUE Parcel B Gross RAB Total Assets Base Special Obligations + Depreciated Assets TUSD Revenue + Other revenues 81 81

Cemig D readjustment and Impact on Tariff Financial Components + CVA R$ 411, 086, 246 IMPACT TO CONSUMERS ANEXO II (Readjustment) Appendix I -12 . 24 % -7. 14% -18 VERIFIED REVENUE R$ 7, 610, 501, 417 . 09 % Appendix II Financial Components + CVA R$ 682, 427, 357 REQUIRED REVENUE Appendix I R$ 6, 262, 213, 329 Anex I: Tariffs billed to consumers, including RTE, CVA and financial components, without taxes. Anex II: Tariffs considered “clean”, base for posterior readjustments posteriores, without taxes (ICMS, Pasep/Cofins) 82 82

Investor Relations ri@cemig. com. br Telefone: (55 -31) 3506 -5024 Fax: (55 -31) 3506 -5025 83

Notes 84

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Notes 86