São Paulo, February 12^th 2007 – CPFL Energia S.A. (Bovespa: CPFE3 and NYSE: CPL), announces the 4Q06 results. The following financial and operational information except when otherwise specified, is presented in a consolidated form and in accordance with Company Legislation. Comparisons are relative to 4Q05 unless otherwise stated.

4Q06 Highlights

• Net income of R$ 345 million in 4Q06 and R$ 1,404 million in 2006;
• Gross revenue of R$ 3.3 billion, an increase of 13.4%;
• Net revenue of R$ 2.4 billion, growth of 16.2%;
• EBITDA⁽¹⁾ of R$ 684 million, an increase of 40.0%;
• Growth of 5.6% in total energy sales, 10.6% in energy sales within the concession;
• Elevation of the free float from 17.86% to 27.08%;
• An increase of 145.8% in daily median trading volume during 2006, reaching R$ 17.3 million, and the consequent listing on the IBrX 50 of BOVESPA;
• Emission of CPFL Paulista debentures (R$ 640 million, 7-year terms and remuneration of 104.4% of CDI);
• Acquisition by CPFL Energia of 99,99% stock of Santa Cruz (October 2006);

(1) EBITDA is calculated as net income before taxes, financial expenses, income, depreciation, amortization and pension fund contributions plus adjustments for extraordinary items and non-recurring transactions.

Teleconference in Portuguese with Simultaneous Translation in English (Bilingual Q&A)

• Tuesday, February 13^th 2007 – 15:00 (SP), 12:00 (US-ET)

Portuguese: (11) 2101-4848
          English: (1-973) 935-8757

• Password: CPFL or 8391596

• Webcast: http://ri.cpfl.com.br

1) Company Structure

CPFL Energia is a holding company with stock participations, whose results depend directly on the results of the controlled companies, the principal of which are: CPFL Paulista (100%), CPFL Piratininga (100%), CPFL Geração (100%) e CPFL Brasil (100%).

Note: (1) market included 0.01% of others.

1.1) Stockholding Alteration

Acquisition of Companhia Luz e Força Santa Cruz

On October 2^nd 2006, CPFL Energia acquired 99.99% of the Companhia Luz e Força Santa Cruz. Santa Cruz is a public service concessionaire for the distribution of electric power operating in 24 municipalities in São Paulo State and 3 in the State of Paraná. The concession occupies an area of 11,849.5 km², serving more than 161 thousand consumers, with a national market share of 0.3% . This acquisition raises CPFL Energia’s market share to 12.7% ..

In 2005 Santa Cruz sold 746 GWh, of power, generating net revenue of R$ 154 million, EBITDA of R$ 30 million and net income R$ 14 million. In the first half-year of 2006 net revenue reached R$ 91 million, EBITDA R$ 18 million and net income reached R$ 10 million.

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This R$ 203 million acquisition is aligned with the CPFL Energia strategy which foresees successive steps towards the consolidation of the power distribution sector in the country and will permit an adequate return on the current business portfolio for the CPFL Group. The following are the financial indicators implicit in this acquisition: considering indicators for 2005 for the two companies, we obtain indexes EV/EBITDA and P/VPA of 7.1x and 2.4x for Santa Cruz, against 8.7x and 2.8x for CPFL Energia, respectively.

Besides the acquisition of Santa Cruz, in 2006 CPFL Energia also acquired 32.7% of RGE (R$ 383 million) and 11% of the Foz do Chapecó hydroelectric facility (R$ 9 million), which commits CPFL to an additional investment of R$ 230 million. With these acquisitions CPFL will have invested R$ 825 million.

2) STOCK MARKET PERFORMANCE – 2006

With the conclusion of the shareholding reorganization of VBC Energia S.A. in December 2006 and the resultant exit of Bradespar from the controlling block, CPFL Energia attained 27.08% “free float”.

In 2006, CPFL shares appreciated 16.0% on BOVESPA and 28.6% on the NYSE, closing the year quoted at R$ 30.00 and US$ 41.38, respectively

Since the IPO, the return on investment was 99.3% on BOVESPA and 127.7% on the NYSE.

The daily average trading volume in 2006 was R$ 17.3 million; R$ 9.1 million on BOVESPA and R$ 8.1 million on the NYSE. Compared to the daily average in 2005, this represents an increase of 145.8% .

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3) DIVIDENDS AND INTEREST ON CAPITAL INVESTED

The board proposed the distribution of R$ 1,334 million, or R$ 2.78 per share, in dividends, the equivalent of the net income balance for the year, less the legal reserve of 5%.

Taking into account the R$ 612 million paid in 1H06, the amount to be paid will be R$ 722 million, or R$ 1.50 per share.

The annual dividend yield for 2006, calculated from the median price of the shares over the period (R$ 29.15) is 9.6% . When calculated from the closing price (R$ 30.00), the annual dividend yield is 9.8% .

This amount is well above the CPFL Energia “dividend policy” which states that income distribution in the form of dividends and/or interest on own capital (JCP), should be at minimum 50% of adjusted net income distributed half-yearly.

4) ENERGY SALES

4.1) Total Energy Sales

In 4Q06, sales of energy from the CPFL Group through the distribution and commercialization segments totaled 10,723 GWh, an increase of 5.6% . This increase is largely due to the acquisition of 32.7% of RGE, without which, the growth would have been 0.2% .

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Sales to the captive market totaled 8,326 GWh, equivalent to a 5.9% increase. This increase is also due to a large extent to the purchase of RGE, without which there would have been a reduction of 1.1% .

In 4Q06 sales to the free market were 2,397 GWh, an increase of 4.8% . This increase can be attributed to the winning over of captive customers by the group commercializing sector that migrated to the free market and also to the increase in consumption from CPFL Brasil base customers.

4.2) Captive Market

The captive market saw the evolution of the following classes: industrial, residential and commercial, although this evolution was also influenced by the acquisition of 32.7% of RGE:

• Industrial class: a reduction of 2.3%, due mainly to the migration of customers to the free market.
• Residential and commercial classes: increases of 10.1% and 10.7%, respectively, due to the real increase in earnings, stimulated by low inflation and the increase in the minimum salary, coupled with the acceleration of domestic appliance sales driven by the ease of credit.

Discounting the effect of the RGE purchase, the industrial class suffered a reduction of 9.5% and the residential and commercial classes showed gains of 4.5% and 5.5%, respectively.

4.3) Sales by consumer class⁽¹⁾

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5) ECONOMIC-FINANCIAL PERFORMANCE

5.1) Operating revenue

Gross operating revenue in 4Q06 reached R$ 3,280 million, representing growth of 13.4%, while net operating revenue showed growth of 16.2% (R$ 334 million).

The main contributing factors to this growth in net revenue were:

In 2006, gross operating revenue reached R$ 12,227 million, representing growth of 12.1% .

5.2) Cost of electric power

The cost of power, comprising of the purchase cost plus charges for the use of the system totaled R$ 1,149 million in 4Q06, an increase of 16.0% (R$ 158 million):

• The cost of purchased power in 4Q06 was R$ 954 million, an increase of 18.9% (R$ 152 million). The main contributing factors to this increase are:

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• Charges for the use of the transmission and distribution system reached R$ 194 million in 4Q06, an increase of 3.4% (R$ 6 million)

5.3) Operating Costs

Operating costs in 4Q06 were R$ 641 million registering a reduction of 5.0% (R$ 34 million). The main causes for this decrease are:

(i) PMSO: The main variations in this item were caused by the following factors:

Note: PMSO – consider personnel, materials, outsourced services and others.

(ii) Fuel Consumption Account (CCC) and Energy Development Account (CDE): expenses incurred with CCC and CDE increased 28.4% and 22.5% respectively (R$ 50 million). It should be emphasized that these costs are non-manageable, as they are charges defined by ANEEL.

Private Pension Fund expenditure which fell by 108.9% (R$ 24 million) also contributed to the reduction in operating costs. This item, which represented an expense R$ 22 million in 4Q05 turned into a R$ 2 million revenue in 4Q06. This variation is basically due to the Actuarial Report Revision.

5.4) EBITDA

Based on the factors described above, CPFL Energia EBITDA in 4Q06 was R$ 684 million, registering an increase of 40.0% (R$ 195 million).

For the year 2006, EBITDA was R$ 2,789 million, registering an increase of 31.6% (R$ 669 million).

5.5) Financial Result

Although the financial result in 4Q06 was negative by R$ 119 million, it was an improvement of 16.1% on the negative result of R$ 141 million of 4Q05. An explanation for this lies in the following:

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(ii) Financial Expenses: reduction of 33.7% (R$ 118 million), falling from R$ 350 million in 4Q05 to R$ 232 million in 4Q06, due mainly to:

5.6) Net Income

Net Income in 4Q06, was R$ 345 million, a reduction of 9.3% (R$ 35 million).

For the year 2006, net income was R$ 1,404 million, an increase of 37.5% (R$ 383 million).

6) Debt

CPFL Energia debt stood at R$ 5,168 million in 4Q06, an increase of 3.8%, compared to the previous year. Although the debt has increased in nominal terms, its cost has fallen from 13.9% p.a. in 4Q05 to 13.4% p.a. in 4Q06, due to the fall in the CDI (18.2% to 15.2%) and the TJLP (9.8% to 7.9%) during the period, partially offset by the rise of the IGP-M/IGP-DI (1.2% to 3.8%) .

The debt increase stems mainly from the net effect of the incorporation of the debt installment of RGE after the stock acquisition of 32.7%, in the amount of R$ 224 million.

The following factors also contributed to the fluctuation of debt:

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In summary of the above, one can observe the change in profile of financial debt, demonstrated by the increase in debt linked to CDI (27% to 41%) and TJLP (28% to 31%), and by the reduction in debt linked to IGP-M/IGP-DI (39% to 22%).

It should be emphasized that R$ 4,252 million, or 82.3% of the CPFL Energia debt is considered long term and R$ 916 million, or 17.7% of the total is considered short term.

In 4Q06, the adjusted net debt increased 19.4% as calculated from the total debt (the sum of loans, financing, derivatives and pension fund debt), excluding regulatory assets / CVA and cash receivables, reaching a total of R$ 4.416 million. This variation is a result of the increase of R$ 141 million in total debt and the reduction of R$ 178 million and R$ 399 million in the items, regulatory assets/liabilities and receivables respectively. Importantly, the ratio debt//EBITDA fell to 1.6x.

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7) INVESTMENTS

In 4Q06, Investments of R$ 241 million were made in maintenance and business expansion, of which R$ 168 million was channeled to distribution, R$ 2 million to commercialization and R$ 70 million to generation.

Among CPFL Energia’s main investments, we highlight the following:

• Distribution: Investments were made in the expansion of the electricity system to accompany consumer market growth, which included 52,670 new connections. Investments were also made in the maintenance and improvements of the electrical system for operational infrastructure, operational support systems, and programs for research and development.
• Commercializing: Improvements in the systems of portfolio and risk management.
• Generation: Investments were channeled mainly to the construction projects – Ceran Complex and the Campos Novos hydroelectric facility.

Over the year 2006, R$ 797 million was invested in the maintenance and expansion of business, of which R$ 527 million was for distribution, R$ 4 million for commercialization and R$ 266 million for generation.

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8) CASH FLOW

The table below shows the evolution of cash during 2005 and 2006, although the accompanying comments refer solely to the cash flow situation in 2006:

At the year’s closing, the cash balance reached R$ 540 million, the equivalent of a reduction of 20.4% (R$ 138 million) relative to the starting balance.

Besides the cash generated by company activities, highlighted below are other factors which contributed to the cash flow variation:

The evolution of cash flow was partially influenced by the sale of stockholdings in Companhia de Gás de São Paulo (Comgás).

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9) PERFORMANCE OF THE BUSINESS SEGMENTS

9.1) Distribution

Operating Revenue

In 4Q06, gross revenue was R$ 3,020 million, an increase of 13.6% (R$ 363 million). Net operating revenue showed growth of 16.2% (R$ 303 million).

The main contributing factors towards growth in net revenue were:

Electric Power Costs

The total costs related to electric power, comprised of the purchase of electric power and charges for the use of the system, in 4Q06 were R$ 1,134 million, an increase of 17.3%:

• The cost of purchased power in 4Q06 was R$ 942 million, which represents an increase of 20.7% (R$ 162 million). The main contributing factors for this increase are:

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• Charges for the use of the transmission and distribution system reached R$ 192 million in 4Q06, an increase of 2.9% (R$ 6 million)

Operating Costs

Operating costs in 4Q06 were R$ 593 million, a reduction of 7.3% (R$ 46 million). The principal causes of this reduction were:

(i) PMSO: The main variations in this item were due to the following factors:

(ii) Fuel Consumption Account (CCC) and Energy Development Account (CDE): expenses incurred with CCC and CDE increased 28.4% and 22.5% respectively (R$ 50 million). It should be emphasized that these costs are non-manageable, as they are charges defined by ANEEL.

Private Pension Fund expenditure which fell by 108.8% (R$ 24 million) also contributed to the reduction in operating costs. This item, which in 4Q05 represented an expenditure of R$ 22 million, in 4Q06 turned into R$ 2 million revenue. This variation is basically due to the Actuarial Report Revision.

EBITDA

Based on the factors described above, EBITDA in 4Q06, was R$ 501 million, registering an increase of 42.0% (R$ 148 million).

Financial Result

In 4Q06, the financial result was negative by R$ 122 million, representing a fall of 45.8% relative to the already negative result of R$ 84 million in 4Q05. The items that help explain this variation are:

(i) Financial Revenue: reduction of 44.7% (R$ 82 million), falling from R$ 183 million in 4Q05 to R$ 101 million in 4Q06, mostly due to:

(ii) Financial Costs: reduction of 16.3% (R$ 44 million), dropping from R$ 267 million in 4Q05 to R$ 224 million in 4Q06, mainly due to:

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Net Income

Net income in 4Q06, was R$ 267 million, an increase of 4.7% (R$ 12 million).

IRT of CPFL Piratininga

On October 23^rd 2006, the electricity tariffs of CPFL Piratininga were readjusted on average by 10.79% . This readjustment was applied in a differentiated form to each class of consumer. For small scale residential and commercial customers connected to low voltage (less than 2.3 kV), the average rate was 6.96% . For high voltage consumers, which include medium and large industries, the average readjustment was 14.08% . The readjustment is valid for the entire CPFL Piratininga market of 1.3 million customers.

9.2) Commercialization

Operating Revenue

In 4Q06, gross revenue was R$ 476 million, an increase of 17.0% (R$ 69 million). This increase is owed basically to the 4.8% increase in sales volume.

EBITDA

In 4Q06, EBITDA was R$ 63 million, an increase of 2.6% (R$ 2 million).

Net Income

Net income in 4Q06, was R$ 41 million, a reduction of 0.4% (R$ 0.2 million).

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9.3) Generation

Operating Revenue

In 4Q06, gross revenue was R$ 144 million, an increase of 23.9% (R$ 28 million). This increase is mainly due to the start-up of commercial operations of the Barra Grande hydroelectric plant (BAESA) in November 2005, which contributed with R$ 31 millions and 118 GWh.

Cost of Electric Power Service

The cost of electric power service in 4Q06 was R$ 6 million, an increase of 104.7% (R$ 3 million). This rise is due mainly to the acquisitions made by Ceran (R$ 2 million) and start of The BAESA operations which contributed R$ 1 million.

Operating Costs

Operating costs in 4Q06 reached R$ 27 million, an increase of 13.2% (R$ 3 million). This rise is basically due to the variations in the PMSO: (i) Increase of 73.3% (R$ 2 million) on personnel costs from the Baesa operational start-up; (ii) Increase of 13.4% (R$ 1 million) on outsourced service spending; and (iii) reduction of 26.2% (R$ 1 million) on expenditure on other operating costs.

EBITDA

Based on the factors described above, EBITDA, in 4Q06, reached R$ 120 million, rising 38.1% (R$ 33 million).

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Financial Result

In 4Q06, the financial result was R$ 35 million negative, representing an increase of 7.2% (R$ 2 million), due mainly to the reduction of 64.8% (R$ 9 million) in financial revenue, resulting from the fall in income from financial investments, offset by the reduction in the cost of debt (R$ 7 million), due to the amortizations made in the period.

Net Income

Net Income in 4Q06, was R$ 48 million, an increase of 58.8% (R$ 18 million).

Status of Generation Projects

Campos Novos Hydroelectric Facility

CPFL Energia informed the market on February 5^th 2007, that the Campos Novos hydroelectric facility received authorization from ANEEL for the commercial operation of its first turbine, which will supply 91% (342 median MW) of the plant’s secured power. By April 2007 the remaining turbines should be in operation. The filling of the reservoir was concluded on January 31^st 2007.

CPFL’S participation in the undertaking is 48.72%, which represents an installed capacity of 428.8 MW and secured power of 184.1 median MW.

Foz do Chapecó Hydroelectric Facility

CPFL Energia also informed the market that in December 2006, work on the Foz do Chapecó hydroelectric facility had started.

CPFL’S participation in the undertaking is 51%, which represents an installed capacity of 436.1 MW and secured power of 220.3 median MW. Commercial operation is forecast for 2010.

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Investor Relations

Tel.: (55) (19) 3756-6083

Fax: (55) (19) 3756-6089

E-mail:ri@cpfl.com.br

Site: http://ri.cpfl.com.br

CPFL Energia is the largest publicly-held group in the Brazilian electric sector, active in the distribution, commercialization and generation of electric power. CPFL is the only company in the Brazilian electric sector to simultaneously trade shares on the Novo Mercado – Bovespa and on the New York Stock Exchange with ADR’s level III. The company strategy is focused on operational efficiency and synergical business growth with financial discipline, social responsibility and differentiated corporate governance.

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Statement of Assets
(R$ thousands)

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Statement of Liabilities
(R$ thousands)

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Income Statement
(R$ thousands)

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Income Statement – Consolidated (Pro-forma)
(R$ thousands)

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Income Statement
(R$ thousands)

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This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.