September - 2007

1www.cemig.com.brSeptember - 2007

Sustainable GrowthDelivering value to shareholders

The Leading Power Utility in Brazil

2www.cemig.com.br

Disclaimer

Some statements in this presentation are regarded under U.S. Securities law as forward-looking statements, i.e., statements that are subject to risks and uncertainties. Forward-looking statements are forecasts which may differ materially from the final figures and which are not under our control. For further information on the risks and uncertainties as they relate to us, please see our 20-F form for 2006, in particular, item 3 which contains “Basic Information – Risk Factors.”

All figures are expressed in Brazilian GAAP.

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Agenda

• Background

• Strategy Overview

• Business Outlook

• Financial Highlights

• Our Strategy shows Solid Results

• Market Recognition

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• Background






Agenda

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The blend of shareholders provides long term perspective

• Our shareholder diversity provides a worldwide business management vision focused on the sustainability of company activities

• Listed in major stock exchanges•BOVESPA (Brazil)

•Common shares (ON): cmig3•Daily trading volume: R$ 5 million

•Preferred shares (PN): cmig4•Daily trading volume: R$ 60 million

•NYSE (USA)•ADR (preferred shares backed): CIG

•Ratio : 1 ADR=1 preferred share• Daily trading volume: US$ 15 million• Approximately 75 million ADR

outstanding (15% of Total Capital)•ADR (common shares backed): CIG.C

•Ratio : 1 ADR=1 preferred share•LATIBEX (Spain)

•Preferred shares : xcmig4(*) Controlled by international investors

ON44%

PN56%

Total shares486,461 thousand

Common212,622 thousand

Preferred273,839 thousand

International investors68%

Local investors29%

MG and others3%

MG51%

SEB(*)33%

International investors6%

Local investors10%

Shares in Treasury207 thousand

Share nominal value = R$5.00

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Corporate Governance : continuous implementation of best practices

Highlights• Code of ethics;

• 6 BoD members appointed by minority shareholders;

• BoD approves all investments above R$5m

• BoD 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 key role on:

– 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 Directors14 members

Executive BoardConselho Fiscal( Fiscal Council)

5 members

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Sustainability: component of the business

• Social and Environmental responsibility is a commitment in our long-term vision: it guarantees the preservation of our activities and avoids costs for the society through a balanced relationship with the environment.

• Recognition of our actions to ensure sustainability: Inclusion in the Dow Jones Sustainability World Index for the eigth time in a row,

being selected as worldwide leader in the Utilities “Supersector”; Inclusion in the Corporate Sustainability Index of the Sao Paulo Stock Exchange

(Bovespa) for the second year in a row.

• Brazilian Electricity Services Quality Award Cemig Distribuição S.A. won the Quality Award – IASC 2006:

Consumer survey organized by ANEEL – the Federal Electricity Agency;• ISO Certification

Cemig Distribuição S.A. expanded the certification of its operating processes to NBR ISO 9001:2000

More than 80% of workforce operates in compliance with this certification; Certifies the uniformity of procedures, continuous improvement, greater visibility within the Company’s operations and proper attention to client needs and all other interested parties.

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• Background






Agenda

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Our Long Term Strategic Plan addresses sustainable growth

• Broadening of CEMIG's area of activity, focusing on the electric industry– Growth outside current geographical area;– First steps towards international investments; – Within Brazil, expansion in line with regulatory limits and sustainable growth:

• Acting prudently• Adding value

• Addressing shareholders’ long-term interests:– New dividend policy with a 50% payout and extraordinary dividends, every two years, provided

cash availability.– Corporate governance focused on transparency and respect of minority shareholders’ interests.

• Incorporation of our goals and commitments to our bylaws to secure stability of the company's long-term planning

– Capex limited to 40% of EBITDA:• in 2006: 65%.• in 2007: 55%.

– Debt limited to 2x EBITDA:• In years of acquisitions: 2.5 x EBITDA.

– Debt limited to 40% of Total Capitalization:• In years with acquisitions: 50% x Total CAP.

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Expansion:• Acquisition of Light S.A. in 2006, through RME, a company formed in

partnership with private investors:– Over 3.8 million consumers in 31 municipalities in the state of Rio de Janeiro;

– Third largest electricity distributor in Brazil.

• Acquisition of TBE in 2006, a group of five power transmission companies located in the North and South of Brazil, totaling 2,000 km of transmission lines.

• Initial construction of a transmission line in Chile.

• Generation capacity increased by 624 MW over the last 12 months– Baguari power plant construction started – 140 MW.

• Now serving over 10 million customers units.

• Total sales of 56,101 GWh TTM (as of 30-jun 2007).

Strategic Plan Results

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Dividends:– In 2006, we paid dividends totaling R$ 2 billion.

– R$ 1.3 billion will be paid in 2007, representing 80% of 2006’s net income:• Interest on Equity: R$ 169mn (as announced last year);

• Complementary dividend: R$ 716mn;

• Extraordinary dividend: R$ 497mn;

320692

2,070

1,382

2003 2004 2005 2006

Dividends(R$ Million)

31

66

19

2004 2005 2006

Total Return to shareholder(%)

7

14

9

2004 2005 2006

Dividend Yield (%)

Strategic Plan Results

Solid Financial Situation:– Complying with Strategic Plan commitments;

– Return on investment compatible with each business risk;

– Extended debt profile and lower costs.

2,266

2,7993,012

3,718

2004 2005 2006 1H07(TTM)

Ebitda R$ million

1,385

2,0031,719

1,975

2004 2005 2006 1H07(TTM)

Net IncomeR$ million

• TTM = Twelve Trading Month

3,859

4,175

Guidance

2007

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Strategic Plan consolidates Cemig as a world class company

4,078

7,441

9,951

14,335

16,040

18,205

2002 2003 2004 2005 2006 24-Aug-07

Market capitalizationR$ million

Commitment to growth and

adding value, which along

with the Strategic Plan have

resulted in the market’s

recognition.

• Total assets: R$ 24.4 billion

• Stockholders’ equity: R$ 8.4 billion

• Consolidated debt: R$ 7.6 billion

• Consolidated net sales (1H07) : R$ 4.9 billion

13www.cemig.com.br

Company Net profit Ebitda

Cemig Geração/Transmissâo 382,145 784,078 Cemig Distribuição 435,638 817,564 RME (Light) 103,205 188,625 Gasmig 22,562 29,781 Sá Carvalho 11,587 16,237 EATE 7,411 14,263 Capim Branco 14,714 14,950 ENTE 3,909 8,859 Infovias 5,070 27,159 Rosal Energia 7,136 7,707 Cemig PCH 7,680 7,832 Ipatinga 3,415 6,030 Horizontes 3,427 4,497 UTE Barreiro 3,690 4,016 ETPE 1,912 3,728 Transirapé 218 254 ECTE 723 1,584 ERTE 921 1,527 Transudeste 557 941 Transleste 1,125 2,081 Efficientia 432 428 Pai Joaquim 12 (4) Co-generation 166 (15) Trading (21) (15) Cemig Holding Company (96,005) (37,108) Cemig, consolidated 921,629 1,904,999

Net income, by company - 1H2007 - R$ '000

Ebitda

net income

Net Income contribution by business

41%

42%

10% 2% 2% 3%

Cemig Geração/Transmissâo Cemig DistribuiçãoRME (Light SA) GasmigTBE Others

39%

44%

10%

2% 2% 3%

Cemig Geração/Transmissâo Cemig DistribuiçãoRME (Light SA) GasmigTBE Outras

1H07 Consolidated Results

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• Growth reflects solid

fundamentals

• Ebitda in last four quarters:

R$ 3.72 billion

• Consistent with May 2007

guidance and

Long-Term Strategic Plan

• 1H07 performance in line with

financial projections

2927

3033

39,7

32,2

27,1

34,8 33,637,2 39,9

23,4

31,3

40,6

606 535 563 562

871 814686

117

711534

905 908 8681037

1Q04 3Q04 1Q05 3Q05 1Q06 3Q06 1Q07

Consolidated Ebitda margin (%)

Ebitda (R$ million)

Growing Ebitda margin

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Wholesale supply6,403 GWh

To 38 Distributors

Building towards nationwide operations

AM

Power Generation

Power Transmission

Electricity Distribution

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• Investment in Chile:• Charrúa – Nueva Temuco transmission line

220 kV, 190 km• Concession period : 20 years• Partner : Alusa (51%)• Total investment: US$ 63.4

million• Annual revenue: US$ 6.5 million• Financing: 70% of the

investment• Capital injected by Cemig so far: US$ 6 million• Project began: June 2005• Environmental license given: February 2007• Works begin: March 2007• Operational start up : July 2008

• Development of management capacity to operate in regulatory environments of other countries.

Looking ahead to the future...

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• Background






Agenda

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Installed capacity Efective Power(MW) (MW Average)

Largest hydroelectric plants

São Simão 1,710 1,281

Emborcação 1,192 497

Nova Ponte 510 276

Jaguara 424 336

Miranda 408 202

Três Marias 396 239

Volta Grande 380 229

Irapé 360 206

Aimorés 162 84

Light Geração (19.85%) 169 107

Others 841 501

Total hydro-electric 6,552 3,958

Total thermal 184 115

Wind 1 0

Total 6,737 4,073

Plant

• Cemig provides 7% of Brazil’s generation capacity and supplies 19% of Brazil’s free customers market

Cemig`s consolidated generation assets (March/07)

Power Generation: Cemig

19www.cemig.com.br

Current power capacity price close to the marginal cost

• Existing capacity along new scheduled additions will meet the demand up to 2010. Beyond 2011, new power projects will be needed to meet demand growth.

• Natural gas fired thermal power projects will play relevant role in long term power supply:– Natural gas price will have an impact on the energy price trend.

• Small hydro and cogeneration power plants can be a solution for the higher demand/supply imbalance in 2010/2011 due to shorter construction time period.

50556065707580859095

R$/Mwh

2006 2007 2008 2009

Contracted Price

5060708090

100110120130140

R$/MWh

2008 2010 2012

Existing Capacity New Capacity

Source: 05,06,07 ANEEL auctions, EPE’s 10 Y Expansion Plan, PSR Consulting

ContractedExpected

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3,713 3,602 3,6243,254

2,8862,594 2,503

1,586

828620 467

10283 61 631

1,1491,441 1,582

2,499

3,2573,465 3,618

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

MW

-ave

rage

Own resources Realized energy purchase Planned energy purchase Requirements contracted Renewals/New contracts

Reference: April 2007

Our power generation contracts start re-pricing in 2010

• 2010-2012: country's supply-demand balance will be very tight

Average power

generation price(R$/MWh) 92

94

8179

84

89

70

80

90

100

2007 2008 2009 2010 2011 2012

Guidance for2007-2012

Reference = June 2007

• Actual contract prices + forward price trend for the re-contracting. After 2014 all contracts will be re-priced

Power Generation Balance

21www.cemig.com.br

Power Generation: 2007 Auctions

• New Energy Regular Auctions:– July, 26, 2007: A-3 auction, power delivery from 2010, 30 years long contract:

• Only Thermo Power sold at R$ 135/MWh + fuel costs in case of dispatch

– Scheduled for October, 16, 2007: A-5 auction, power delivery from 2012, 30 years long contract:• Price cap: R$ 129/MWh Hydro and R$ 140/MWh Thermo

• New Energy Auction – Madeira River Projects:– Scheduled for October 30, 2007;

– Environmental license issued;

– Santo Antônio: 3,150 MW of installed capacity, start-up in 2012;

– Jirau: 3,000 MW of installed capacity, start-up in 2013.

• Old Energy Auction:– Every year on last working day of November;

– Power delivery from the next year on;

– 8 year long contracts.

22www.cemig.com.br

Business Opportunities: Small Hydros Program

(*) PCH = Small Hydro Power Plant

Àrea reservada para o mapa

• Short-term supply alternative• More than 500 MW qualified • 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

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Approximately 75% of the plants are located in the heavy-industry region known as the Minas Triangle

Generation available from April to September, the dry season for the hydro power plants

* 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

Plants Quantity Generatn. (MWa*) Surplus (MWa*)Existing 26 530 420Expected 59 2046 1755 With Protocol 34 1191 953

Without Protocol** 13 591 591

Other*** 12 264 211

TOTAL 85 2576 2175

Business Opportunities: sugar and ethanol potential in MG

24www.cemig.com.br

• 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.

• Cemig Corporation stands for 5% of Brazil´s transmission capacity;• Sixth largest transmission company.

2003 2004 2005 2006 1H 2007

500-kV lines 2,163 2,163 2,165 2,592 2,592

345-kV lines 1,921 1,942 1,976 1,969 2,003

230-kV lines 745 751 751 803 798

Total 4,829 4,856 4,892 5,364 5,393

Cemig Consolidated - lenght of transmission network, km

Power Transmission: Cemig

(March/07)

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Power Transmission tariff review and auctions

• Allowed return on asset approach (existing assets in 1995):– 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 2008.

• 2007 Transmission line auction – November, 7, 2007 :– transmission lines to be auctioned: 1,930 km;

– estimated investment R$ 1.1 billion.

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Electricity Distribution: Cemig

Cemig - Length of network, km 2004 2005 2006 1º Q 2007

SUB-TRANSMISSION 16,086 16,040 16,788 16,338

161-kV lines 55 55 55 55

138-kV lines 10,504 10,521 11,254 10,807

69-kV lines 4,544 4,481 4,513.0 4,510.0

Lines below 69 kV 983 983 966.0 966.0

DISTRIBUTION 367,437 379,400 402,539 409,231

Overhead distribution network 82,819 83,826 92,083 85,134

Underground urban distribution network 708 759 1,767 759

Overhead distribution network in rural areas 283,910 294,815 308,689 323,338

TOTAL 383,523 395,440 419,327 425,569

• Cemig supplies 10% of Brazil´s captive market• Largest distribution company (by km of lines, number of consumers and

transported energy)

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Electricity Distribution tariff review

• Allowed return on asset approach: – Benchmark WACC: currently 11.26%;

– Tariff review: WACC reduced to 9.95%.

• New Tariff Review methodology:– 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.

• 2007 Reviews– Coelce, Eletropaulo, Escelsa, Celpa, Elektro, Enersul, Bandeirante and CPFL

– Outcome accordingly to the methodology

– Reductions due to ROA and non-controllable costs

• Cemig Distribution Companies tariff reviews:– Cemig Distribuição: April, 2008;

– Light: November, 2008.

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(million Reais)

Business 2005 2006 2Q07 2007Cemig Geração e Transmissão 417 157 97 480

Generation 397 99 87 385 Transmission - basic grid 20 58 10 95

Cemig Distribuição 691 1,229 537 1,131 Sub-transmission 26 83 32 178 Distribution 665 1,146 505 953

Expansion and strengthening of existing network 276 217 157 205 "Light for Everyone" program 291 884 306 609 Others 98 45 42 139

Cemig Holding Company 58 558 4 43 Injection of capital 54 33 2 37 Other 4 1 2 6 In RME: 25% - acquisition of Light - 175 - - Acquisition of TBE transmission companies - 349 - -

Total capital expenditure projects 1,166 1,944 638 1,654

PlannedAchieved

Figures for 2007 estimated under 2007-2011 corporate planning.

Capital Expenditures

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• Background






Agenda

30www.cemig.com.br

3250

3500

3750

4000

4250

4500

4750

5000

2007 2008 2009 2010 2011 2012

Bottom UpperYear Limit Limit

2007 3,859 4,175 2008 3,647 3,971 2009 3,501 3,831 2010 3,769 4,125 2011 4,091 4,499 2012 4,307 4,761

Guidance 2007/2012

Consolidated EBITDA (Constant June 2007 R$ million)

Distribution Tariff Review

1.400

1.500

1.600

1.700

1.800

1.900

2.000

2007 2008

Distribuition Company Generation and Transmission Company

1.400

1.500

1.600

1.700

1.800

1.900

2.000

2007 2008

Upper BottomYear Limit Limit

2007 1,703 1,935 2008 1,425 1,610

Upper BottomYear Limit Limit

2007 1,542 1,611 2008 1,636 1,724

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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.

2006 1H06 1H 07

Cash at the begining of period 1,344 1,344 1,376 Cash from operations 2,101 836 1,441

Net income 1,719 665 922 Depreciation and amortization 672 303 379 Suppliers 125 (89) (154) Deferred tariff adjustment - 178 257 Other adjustments (415) (221) 37

Financing activity (475) (614) (696) Financing obtained 2,266 970 534 Payments of loans and financing (669) (135) (750) Shor term loans - 200 Other (2,072) (1,449) (680)

Investment activity (1,720) (560) (482) Investments outside the concession area (553) (15) (60) Investments in the concession area (1,470) (646) (563) Special obligations - consumer contributions 303 101 142 Other - Deferred - - (1)

Initial cash balance from acquired subsidiaries 125 - - Cash at end of period 1,375 1,006 1,639

Consolidated Cashflow R$ million

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Indicators show superior credit quality

Debt management follows these guidelines:

• Maintain long-term credit quality at levels to guarantee low risk rating

• Reduced FX exposure risk

• Lengthening of debt profile

Conversion of BNDES debentures to a stake in Light, reducing debt by R$ 178 million

Indictor Cemig consolidated Cemig GT Cemig D

Debt R$ 7,612 R$ 3,112 R$ 2,751

Debt in foreign currency R$ 705 (10%) R$ 168 (5%) R$ 384 (14%)

Net debt R$ 5,873 R$ 2,333 R$ 2,203

Ebitda/interest 3.73

Debt/Ebitda 2.11

Net debt/(stockholders' equity + net debt) 41.02%

R$ million

(1) Includes debt of Light S.A., R$ 809 million, and TBE, R$ 159 million

(2) Net debt = (total debt – cash and cash equivalents – regulatory assets (RTE, BNDES) )

(3) As specified in financing contracts with ItaúBBA

(1)

(2)

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Main indexors

Excellent debt management seizes lower interest rate benefits

Consolidated dataOn June 30, 2007

Exposure to CDI and Selic in line with expectations of lower interest rates Average cost of debt: 8.56% p.a. at June 2007 prices, including holdings

CDI/Selic75%

Dollar8%

Urtj2%

Igpm8%

Others1%

RGR/Finel5%

Yen1%

999

590

909798 819

999

477

892

1,129

0

100

200

300

400

500

600

700

800

900

1000

1100

1200

1300

1400

1500

2007 2008 2009 2010 2011 2012 2013 2014 2015 a 2031

R$ million

Average maturity: 4.78 years

Maturities

12.09 11.67

9.15 9.478.56

dez/04 dez/05 dez/06 Mar-07 Jun-07

Average cost (% p.a.)

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More attractive to pension funds

Moody’s rating: 5-notch ‘jump’ reflects high credit quality

Aa.br Very strong credit capacity

A Low credit risk

• Key factors to improving Moody’s rating: – Solid fundamentals and excellent financial management– Robust corporate governance

35www.cemig.com.br

Agenda

• Background






36www.cemig.com.br

Electricity salesGWh

Net revenueR$ million

EbitdaR$ million

DebtR$ million

Consumers Employees

Cemig GT 15,382 1,208 784 3,113 173 2,344

Cemig D 10,177 2,797 818 2,751 6,353,217 8,293

RME (25%) 2,429 689 189 453 3,845,266 4,368

TBE - 33 30 148 - 59

Others 182 193 84 1,147 20 -

Total, consolidated 28,170 4,920 1,905 7,612 10,198,676 15,064

(4)

(3)

(2)

(1) Includes employees of Cemig holding company.

(2) Includes R$ 982 million of FIDC.

(3) Includes 100% of Light.

(4) Net of 257 GWh inter-company transactions.

(3)

(1)

Stockholdings contribute significantly to 1H07 Results

37www.cemig.com.br

• 1H07 net income of R$ 922 million, equivalent to

R$ 1.9 per share

• Ebitda: R$1,908 million

• In 1Q 2005, Net income and Ebitda included R$

591mn of Deferred Tariff Adjustment –

considered non-recurring

• Ebitda in last four quarters totaled: R$ 3.7 billion

1Q07: Net income and Ebitda show sustainable growth

CAGR = Compound annual growth rate

711

1,142

1,685

1,245

1,905

1H03 1H04 1H05 1H06 1H07

EbitdaR$ million

CAGR = 28%1H03 – 1H07

535 557

1,042

665

922

1H03 1H04 1H05 1H06 1H07

Net profitR$ million

CAGR = 15%1H03 – 1H07

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Expansion of consolidated net income

2Q2007

1Q2007

1st half 2007

2Q2006

1st half 2006

Net revenue 2,584 2,336 4,920 1,919 3,953Operational expenses (1,747) (1,647) (3,394) (1,537) (3,011)

Operational profit 837 689 1,526 382 942Ebitda 1,037 868 1,905 534 1,245

Financial revenue (expenses) (56) (67) (123) (146) (171)Non-operational revenue (expenses) (13) (6) (19) (8) (20)Provision for income tax, Social Cont., deferred income tax (183) (204) (387) (72) (255)Reversal of Income on Equity 0 0 0 169 169Minority interests (70) (5) (75) 0 0

Net income 515 407 922 325 665

R$ million

Consolidated Income statement

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

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Consolidated net revenue

1H2007

1H2007

1st half 2007

2Q2006

1st half 2006

Sales to final consumers 3,032 2,788 5,820 2,251 4,587

TUSD 380 350 730 270 587

Subtotal 3,412 3,138 6,550 2,521 5,174

Wholesale electricity sales 277 247 524 196 374

Revenue from use of transmission grid 135 160 295 140 289

Sales of gas 68 64 132 70 139

Other 65 76 141 48 94

Sub total 3,957 3,685 7,642 2,975 6,070

Deductions (1,373) (1,349) (2,722) (1,056) (2,117)

Net revenue 2,584 2,336 4,920 1,919 3,953

Consolidated operational revenuesR$ million

Growth in net revenue reflects business diversification, and positive effects of

acquisitions (RME/Light S.A. and TBE companies)

Cemig Distribution provides 58% of total net revenue

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2Q2007

1Q2007

1st half 20072Q

20061st half 2006

Energy bought 651 600 1,251 467 1,001

Personnel/managers/Board members/employee profit shares 276 260 536 415 653

Depreciation and amortization 200 179 379 152 303

Charges for use of the transmission grid 219 181 400 173 422

Outsourced sergices 153 121 274 116 217

Forluz pension plan - post-retirement benefits 29 31 60 38 75

Materials 21 23 44 21 38

Royalties 34 38 72 33 55

Gas bought for resale 32 30 62 37 76

Operational provisions 52 105 157 38 80

Other expenses 79 79 158 47 91

Total 1,746 1,647 3,393 1,537 3,011

Consolidated operational expenses, R$ million

Growth in operational expenses reflects growing cost of electricity

Cemig Distribuição contributes with 66 % of total costs– Non-controllable costs are 58.11%– Controllable costs (PMSO) are 41.89%

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2Q2007

1Q2007

1st half 20072Q

20061st half 2006

Net revenue 621 587 1,208 570 1,053

Operational expenses (278) (257) (535) (278) (498)

Operational profit 343 330 673 292 555

Ebitda 398 386 784 337 645

Financial revenue (expenses) (174) (69) (243) (158) (237)

Non-operational revenue (expenses) (1) 6 5 - (1) Provision for income tax, Social Cont., …….and deferred income tax (56) (91) (147) (45) (107)

Reversal of Interest on Equity 94 - 94 83 83

Net income 206 176 382 172 293

Income statementR$ million

Cemig Geração e Transmissão

Increasing profitability, growth in sales and strict expense control

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Cemig Distribuição

• In the quarter:– Revenue up 15.65% from previous quarter– Practically no growth in operational expenses – Higher operational profit – Strong Ebitda growth

• In the first half-year:– 3.40% growth in revenue compared to previous half – Strong reduction in expenses– Strong Ebitda growth

2Q2007

1Q2007

1st half 20072Q

20061st half 2006 2006

Net revenue 1,500 1,297 2,797 1,329 2,705 6,314

Operational expenses (1,153) (1,023) (2,176) (1,151) (2,335) (5,408)

Operational profit 347 274 621 178 370 906

Ebitda 448 369 817 271 555 1,273

Financial revenue (expenses) (68) 11 (57) 33 69 7

Non-operational revenue (5) (10) (15) (6) (14) (25)

Provision for income tax, Social Cont. and deferred income tax (93) (95) (188) (71) (147) (300)

Reversal of Interest on Equity 75 - 75 66 66 182

Net income 256 180 436 200 344 770

Income statementR$ million

Growth in sales, with lower operational costs

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Agenda

• Background






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Prêmio Anefac

Transparency Trophy, 2007.

Cemig Chief Distribution and Sales Officer Jose Maria de Macedo chosen as “Energy Highlight” of the year 2006

Prêmio Abrasca 2006

Best Annual Report, for transparency of information.

Included in the DJSI for the 8th year running. Selected as worldwide leader of the Utilities “Supersector”.

Guia Exame – Você S/A 2006

Included in "150 Best Companies to Work For" for 2006, as the best one amongst the large cap companies

“Most Admired Company in Brazil” in “energy suppliers” category.

Prêmio Apimec 2006

Listed Company of the Year Trophy.

Included in Bovespa Corporate Sustainability Index. Best Disco of the

Southern Region

Market Recognition

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E-mail: [email protected]

Phone: (55 31) 3506-5024

Fax: (55 31) 3506-5025

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• RME owns 54% 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%;– figures for people – number of employees, consumers – are informed as

100% of Light and of TBE.

Accounting criteria for Financial Statements consolidation

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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 the thermal plants in the following year.

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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 kW, multiplied by a tariff in R$/kW 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 (kW), 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.

Glossary

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Appendix

• Background




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GDP (2006): US$ 1,067 billion. GDP expected CAGR (5yrs): 4%. Flow of Trade (2006): US$ 229 billion. Inhabitants: 188 million. Area: 8.5 million km2.

Source: Brazilian Institute for Geography and Statistics (IBGE), Brazilian Electricity Regulator (ANEEL), Brazilian Association of Transmission Companies (ABRATEE), Energy Research Company (EPE).

Power Generation Installed Capacity: 97 GW. National Transmission Network: 83,015 km. Total Energy Consumption: 347,371 GWh.

Electric Power

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 Fuels*: US$ 9 billion.* Ethanol, Biodiesel and Alcohol pipeline

Economic Development Acceleration Plan (PAC)

Brazil Outlook

Economics

BRAZIL

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• Land area larger than any European country:– 7% of Brazil’s land area.

• 19.6 million inhabitants.

• Second largest industrial park in Brazil:– Stands for 10% of GNP.

• Located in the most economically developed region of the country:– 78% of the Brazilian consumer market.

• Second largest exporting state: US$ 15.6 billion:– Stands for 11.38% of Brazil´s total exports.

• Major industries: mining, steel, agricultural (including ethanol):– High global demand for these goods.

Minas Gerais State Key Figures

(2006 figures)

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• Power Generation:– Installed Capacity of 6,737 MW;– 57 power plants (mainly hydro);– Fifth-largest generator in Brazil.

• Power Transmission:– 5,400 km transmission grid;– Construction of a 200 km line in Chile– Sixth-largest transmission company in Brazil.

• Electricity Distribution:– 10 million consumers;– Concession area of 570 thousand sq. Km;– 426 thousand km of lines;– The largest distributor in Brazil.

Chile

Brazil

Cemig as The Leading Power Utility in Brazil

(2006 figures)

AM

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Position on august 2007

Transmission Companies

Distribution Companies

Generation Companies

Generation Consortia

Financial Operations

Non-profit

Gas Distribution

Telecomunications

Tradins

Holding

Services

Key

Two companies are not included – Central Hidrelétrica Pai Joaquim S.A. e Central Termelétrica de Cogeração S.A. – since they are in the process of being wound up.

VS = Voting SharesTS = Total Shares

39 Companies

7 Consortia

CIA. ENERGÉTICADE MINAS GERAIS

ConsórcioCapim Branco

Energia21,5%

CEMIGCapim BrancoEnergia S.A.

100%

Rio Minas EnergiaParticipações S.A.

25%

Usina TérmicaIpatinga S.A.

100%

CEMIG PCH S.A.100%

Horizontes Energia S.A.

100%

Sá Carvalho S.A.100%

Rosal Energia S.A.100%

Usina TermelétricaBarreiro S.A.

100%

Light S.A.54,17%

CEMIGDistribuição S.A.

100%

Light Energia S.A.

100%

LIR Energy Ltd.

Light Serviçosde Eletricidade

S.A.100%

Instituto Lightde Desenvolvim.Social e Urbano

100%

Light EscoPrest. Serviços

Ltda.100%

Light OverseasInvestments

Ltd.100%

Lightger Ltda.

100%

ItaocaraEnergia Ltda.

100%

Lighthidro Ltda.

100%

Cia. Translestede Transmissão

25%

Empresa Catarinensede Transmissãode Energia S.A.

7,49%

Empresa Amazonensede Transmissãode Energia S.A.

VS: 25% TS: 15,51%

Empresa Paraensede Transmissãode Energia S.A.

VS: 25% TS: 17,97%

Empresa Nortede Transmissãode Energia S.A.

18,35%

Empresa Regionalde Transmissãode Energia S.A.

18,35%

Cia. Transirapéde Transmissão

24,5%

Cia. Centroeste Minas de Transmissão

51%

Cia. Transudestede Transmissão

24%

Cia. Transchilede Transmissão

49%

Cia. de Gás deMinas Gerais

55,2%

Centro de GestãoEstratégica de

Tecnologia100%

Empresa de Infovias S.A.

100%

Efficientia S.A.100%

CEMIG Trading S.A.100%

WAY TV Belo Horizonte S.A.CV: 49,9% CT: 69,25%

CEMIGGeração e

Transmissão S.A.100%

CEMIG Baguari S.A.100%

Cachoeirão S.ASmall Hydro Plant

49%

FunilHydro PlantConsortium

49%

IgarapavaHydro PlantConsortium

14%

Porto EstrelaHydro PlantConsortium

33,33%

QueimadoHydro PlantConsortium

82,5%

AimorésHydro PlantConsortium

49%

BaguariHydro Plant Consortium

34%

Our focus on electric energy business allows us to spot opportunities in synergic sectors

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Fundamentals of our Long Term Strategic Plan

• Focus on electricity business– Expansion opportunities evaluated using strict profitability criteria.

• Low risk business portfolio– Adequate structural balance of the electric energy business segments:

generation, transmission, and distribution.– Strong presence in all of the segments that create value.

• Financial stability– Clear objectives guarantee sustainability for the long-term:

• Indebtedness• Cash flow• Credit quality

• Higher standards of Corporate Governance and integrity– Incorporation of practices that add value for shareholders.

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Our Long Term Strategic Plan addresses sustainable growth

• Investments focused on power generation, transmission and distribution projects that offer real internal rates of return, where minimum return is above the level projected in the Company’s Long Term Strategic Plan, following legal obligations.

• Maintaining operating revenues and expenses at Cemig Distribuição S.A., and any other subsidiary carrying out electric energy distribution activity, in line with tariff adjustments and rate revisions.

• Acquisitions will lead growth in the short run:– We look for partners that add value through:

• Reducing the need of using equity;• Transparency of the economic-financial evaluation of projects;• Access to financing at low costs.

– Maximization of cash generation:• Surplus cash generation;• Rolling over debt.

– Look for the best opportunities for financial funding:• Continued improvement in our credit risk rating.

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5.771178

164

580 44 6.737

5500

5700

5900

6100

6300

6500

6700

6900

2003 2004 2005 2006 2Q2007 TOTAL

Year Capacity added, MW Total Description

2004 178 5,949 Barreiro, PCH Pai Joaquim, Queimado, Rosal

2005 164 6,113 Aimorés2006 580 6,693 Irapé, RME, Capim Branco I2007 44 6,737 Capim Branco II

4.829

5.393

4.400

4.600

4.800

5.000

5.200

5.400

2003 2T2007

Total transmission lines, km

MW

In the last four years we have added more than

1,000 MW to our generation capacity.

16.185

16.619

15.800

16.000

16.200

16.400

16.600

16.800

2003 2T2007

Sub-transmission lines, km

359.304

414.942

320.000

340.000

360.000

380.000

400.000

420.000

2003 2T2007

Distribution lines, km

12%

3%

17%

Generation capacity

17%

How our assets have developed

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Brazilian power generation capacity

(% of total installed capacity – Dec-2006 )

Chesf10,8%

Furnas9,9%

Eletronorte8,6% Cesp

7,6%

Other17,1%

Cemig7,2%

CPFL2,0%

Itaipu Brasil7,1%

Tractebel6,6%

Light1,0%

El Paso0,5%

Duke2,3%

Aes Tietê2,7%

Copel4,6%

Eletronuclear2,0%

EMAE1,4%

CEEE2,2%

Energias BR1,1%

Endesa3,3%

Neoenergia1,0%

Rede0,8%

Power Generation: Brazil

• 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

• Total capacity of 97,000 MW

Comments

Source: ANEEL

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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.

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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.

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Power Transmission: Brazil

FURNAS21,7%

CTEEP-ISA15,1%

CHESF11,2%

Eletronorte7,1%

Eletrosul6,7%

Other7.3%

ETEO1,1%

STN1,1%

COPEL4,5%

TBE**4,2%

CEEE3,9%

Novatrans3,1%

TSN2,9%

ATE2,3%

Expansion1,2%

CEMIG*5,3%

Itumbiara1,3%

* Includes the 21% stake in TBE;

** Deducting the 21% stake in CEMIG

Brazilian electricity transmission (2006 installed capacity)

Source: ANEEL (TECHNICAL NOTE No. 082/2006 – SRT/ANEEL of Jun-27-2006)

• 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.

• Total capacity of 83,000 km

Comments

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Power Transmission regulation is the oldest and 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.

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Transmission network will be enlarged as new projects of power generation come through

• 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.

• 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;

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AES

Ashmore

Cataguazes

Endesa

EDP

State-owned, Federal

State-owned, Indiv. State

Grupo Rede

GP Investimentos

Neo Energia

VBC

RME (*)

Other

Brazil Numbers (2006)Brazil Numbers (2006)

Companies: 64 Consumer units: 58 million Consumption: 347 TWh Access: 97% Average ELC: 16.2 hours

Companies: 64 Consumer units: 58 million Consumption: 347 TWh Access: 97% Average ELC: 16.2 hours

AM PA

TO

MG

BA

PR

SC

RS

SP

MA

MS

MT

GO

ES

RJ

ACRO

AP

PI PBRN

CE

PE

AL

SE

RR

Source: Aneel, EPE

Main controlling groups in Brazil

(*) Cemig has 13%stake

Electricity Distribution: Brazil

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Electricity Distribution business is the most regulated one

• Allowed return on asset approach:– Benchmark WACC: currently 11.26%;

– 2008 tariff review: WACC reduced to 9.98%.

• Operating expenses: – Full passed through mechanism:

– Energy purchase expenses under certain circumstances.

– Yearly inflation adjusted;

– Tracking account for offsetting estimated expenses.

• Revenues come from:– Charges on D grid use by the access free users;

– Sales to captive users.

• 5 year rate setting review:– 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.

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The 2007 Cemig Distribuiçãoannual rate adjustment

12 month trailing inflation (as measured by IGP-M) 4.26%

Annual adjustment 3.42%

CVA reimbursement 0.48%

Pasep and Cofins taxes 3.26%

Financial adjustment 1.47%

Other adjustments 0.80%

TOTAL 9.43%

Adjustments on previously reimbursed expenses 4.27%

Impact on annual revenue 5.16%

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Opportunities for raising funds to finance expansion due to 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 [IGP-M])

• FIDC (receivables fund)

International Capital Market

• Eurobonds

• Perpetual bonds

Multilateral Agencies

• IFC, JBIC, CAF

• Long Term

• Tax breaks on remittance of interests

Documents

September - 2007