Marcos Lutz - CEO Marcelo Martins - CFO and IR Officer Guilherme Machado - IR Manager.

Gustavo Allevato - Banco Santander Josephine Shea - Hartford Investment.

Good morning ladies and gentlemen. At this time, we would like to welcome everyone to Cosan's 2014 Results Conference Call. Today with us we have Mr. Marcos Lutz, CEO; Mr. Marcelo Martins, CFO and Investor Relations Officer; and Mr. Guilherme Machado, Investor Relations Manager.

We would like to inform you that this event is recorded and all participants will be in a listen-only mode during the company's presentation. After Cosan's remarks, there will be a question-and-answer session for industry analysts. At that time, further instructions will be given.

[Operator Instructions] The audio and slideshow of this presentation are available through live webcast at ir.cosan.com.br. The slides can also be downloaded from the webcast platform. Before proceeding let me mention that forward-looking statements will be made under the Safe Harbor of the Securities Litigation Reform Act of 1996.

Forward-looking statements are based on the beliefs and assumptions of Cosan's management, and on information currently available to the Company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future.

Investors should understand that general economic conditions, industry conditions and other operating factors could also results to differ materially from those expressed in such forward-looking statements. Now, I will turn the conference over to Mr. Martins. Sir, you may now begin your conference..

Good morning. I would like to start the call today just explaining how we're going to structure the presentation. As a function of the spin-off of the logistics business that took place in October of 2014, we will now - from now on present the results of Cosan S.A. and Cosan Logística separately.

For future calls we're going to keep doing that and we should also add a short presentation for Cosan Limited as well. Comgás will continue to have its conference call done separately which was the case this time again as we had it yesterday.

I would like to start presentation where the comparison between the guidance and the actual 2014 numbers for the different business lines.

We were very much inline with the guidance we provided to the market with only one exception which was the EBITDA for Cosan Lubrificantes which was R$103 in comparison with a range of 110 and 140 presented in the guidance.

We have also decided not to present at this point in time the results for the Raízen Energia for sugar and ethanol business for one simple reason. We have here the guidance for the crop year which will end in this month of March.

So as soon as we have the results for the crop year for Raízen, we will present the performance of the business and compare with guidance provided to the market previously. Other than that, I think it's - I would highlight the EBITDA for Cosan consolidated which was R$4,047 million.

The EBITDA for - you know these type of challenges we have this year in connection with the lack of transportation provided by ALL ended up having an EBITDA of R$304 million and I think on the R$2.1 billion of EBITDA and Comgás R$1.435 billion of EBITDA. And now moving to the presentation of the different businesses starting with Cosan Logística.

We had a 21% increase in the elevation volume in comparison with 2013. We have made substantial investments in Comgás, in that volume increase was expected as far as the growth plan - the ramp up of the business and we had also new contracts signed in 2014 as we had also projected.

The net revenues were very much inline with last year as the function mainly of the present in the transportation and the revenues coming from the transportation business as just explained which also had a negative impact on EBITDA, which ended the year at R$322 million in comparison with R$358 million in 2013.

In terms of the net debt of the company, we closed 2014, with a net debt position of roughly R$700 million, we raised R$110.3 million of new debt from the NDS, financed the expansion of the business and we had at the end of the fiscal year, a cash position of R$86.5 million that resulted in the leverage of 2.2 times net debt to EBITDA of Cosan Logística.

We announced the approval of the transaction of the merger between Rumo and ALL by the Brazilian Antitrust Authority, CADE on 11 of February. This time we have been working with the last agency that would have to prove - the transaction which is impact and we're expecting net approval to take place in a next couple of weeks.

We have also announced the appointment of the new management of the company wants approval by the Board of Directors of ALL, which should happen soon, I would say probably in next couple of week's, so this is the timeframe for the merger to be implemented as well.

To highlight, Julio Fontana was appointed as the CEO, José Cezario as the CFO, José Alberto as the Chief Legal Officer, Daniel Rockenbach as VP Operations for the Northern Network and the Sao Paulo Networks, and Darlan De David, VP of Operations for the other network which is the Southern and Western network. Now moving to Cosan S.A. Cosan S.A.

encompasses Raízen Combustíveis, Energia, Comgás, Lubrificantes and Radar and other businesses which is basically the corporate structure within Cosan. This business on a pro forma consolidated basis had an 11% increase in the net revenue and a 4% increase in EBITDA. The EBITDA resulted in R$3.763, and the net income 16% higher than that of 2013.

We are basically adjusting the net income for -- in 2014 to reflect the last quarter of Rumo, which was not included in the Cosan S.A. number because it had already been spun off. But it is included in the net income for the year 2013.

So, when we make that adjustments, we get R$304 million of net income, which represents the 16% increase compared to 2013.

When we take into consideration the additional devaluation impact or the currency devaluation impact we had during the year of 2014, which was of roughly R$64 million, R$65 million, we're going to get you a pro forma net income, if you will, of R$370 million, which would represent a 41% increase in comparison over the 2013.

Now, moving to the different business -- different businesses under Cosan S.A. starting with Raízen Combustíveis. There's another debit year for Raízen Combustíveis. We had an 8% increase in the volume sold, reaching R$25.028 billion for year 2014.

And net revenue increase of 15% reaching almost R$56 billion and EBITDA increase of 12% getting to R$2.15 billion for the year 2014.

That improvement in the performance of the company was a result of not only a better mix of product sold, which include weak dollar reaching 27% of the total volume sold in the station, but also the higher volume and a better average price in comparison with the year 2013, which had a positive impact on the margin in comparison over the last year.

For Raízen Energia, we had a reduction in the sugarcane crushed for climate reasons as we explained before, finishing the year at 57 million tons, a reduction in the sugar production, there was a slight increase in the ethanol production. And 4% increase in the volume of energy of power sold through co-generation of the mills.

But the biggest impact on the co-gen business was the much better price we attained during the year of 2014 in comparison with 2013. The ATR also increased and we ended the year at 134 -- sorry, the TSR in comparison with 131 for 2013.

In terms of the performance of the business stock is last quarter; we're not including the year-end results here, because we're going to do it at the end of the crop year which is may be March. We had a 24% increase in net revenues and a 53% increase in EBITDA during this quarter.

We had higher sales of sugar and ethanol, and a better result in the co-generation business. It is also important to highlight that at the end of the third quarter for the Energia business or fourth quarter for Cosan, we had unusually higher levels of inventories of both sugar and ethanol.

You should expect that level of inventories to go down over the last quarter of the fiscal year, which is this quarter now. And that had an impact and could be -- and cost of -- I'm sorry, in the leverage of the company as a result of these very high levels of inventory. So, talking little bit about the hedge.

We were at the end of the year at 2.7 million tons hedged sugar -- volume of sugar hedged, and roughly one million tons for the next crop year at an average price of 17.83 cents per pound for this crop season that starts now in April and 17.2 cents for -- I'm sorry, the 2.83 cents for the last crop season which is ends now, and 17.2 cents for the next one at an exchange rate of 2.4 cents for last year and 2.71 cents.

We look at this -- at the price of sugar in reis, so what we're seeing is an adjustment in the price in relation to what's happening with the exchange rate. But overall, we're seeing an increase in the price in reis in comparison with what we had last year. And we have advanced our hedge since we disclosed these numbers in 20 -- in December of 2014.

So, we should expect, at this point in time, a much higher hedge for the sugar export. And in context, we had a volume flat, very much in line with last year. And increase in net revenues of 1% as a function of the adjustment and the tax provided by the other regulators.

17% -- sorry, 7% increase in EBITDA, reaching R$1.435 billion with the margin of 22.5%. In terms of the contribution margin, the most relevant business continues to be the industrial segment with 62% followed by the residential segment with 25%.

Now moving to lubricants business, even though we had an increase of 1% and the volume slowed and positive growth or 4% growth in the net revenues reaching R$1.6 billion, we had a negative impact on EBITDA as a function of the increase in the cost of the company, and the fact that we were not able to pass that cost increase on to the prices in the market.

We should expect a better performance for this business in the year 2016. But as I explained before, this is not a business line that missed the guidance for the year 2014.

For later, we have a higher number of property sold in 2014, which caused a positive impact in EBITDA and in the Marco -- I'm sorry, in the net revenue of the company at reaching to R$158 million, and the negative impact in EBITDA, mainly as a function of the increase in the cost and expenses related to the sale of those properties that I've just mentioned.

The net debt position of Cosan S.A. is R$11.3 billion, 80% of this debt is long-term. We have decided to hedge the crop, we've been hedging -- we hedged crop and we quickly moving to hedge quarterly or semi-annual basis as we continue to try to refinance that debt.

But we thought that it would be appropriate to have the debt we did at the end of last year. Same thing for the debt of Raízen, debt matures after three years. We believe that the debt that matures in the first three years is automatically hedged by the sale of sugar in the export market.

So, overall, we had a leverage of 2.5 times EBITDA, which is what we call is the financial debt leverage. And we have also roughly R$2 billion of other financial obligations that are not included in this leverage ratio.

We had for this specific quarter, a continued impact in terms of the devaluation of the reis on the performance of - mainly of Raízen but again, as we hedged the debt maturing after two years that is at a very good level, you should expect an impact to be reduced from now on.

I would like to end my presentation, just going through the guidance for the 2015 fiscal year. We have, for Cosan S.A., a projected net revenue between R$42 billion and R$45 billion. It’s a firm EBITDA from R$4 billion and R$4.3 billion.

For Raízen Combustíveis EBITDA between R$2.3 billion and R$2.5 billion, which is essentially higher than this year, which was a very good year, was a record year for this business. And for Comgás we have projected EBITDA between R$1.5 billion to R$1.7 billion, which is also especially higher than this year.

When you look at the CapEx line, we're projecting for Raízen Combustíveis a CapEx pretty much in line with last year, just want to explain that for 2014.

We have not included the acquisition of the network in Brazil, which accounted for roughly R$200 million, but when you take that into consideration and see that there was an actual projected reduction in CapEx of roughly R$200 million. For Comgás we are projecting the CapEx to be between R$500 and R$560 million for the year 2015.

For the Lubricants business, we’re projecting EBITDA recovery and even that should reach R$102 to R$150 million and for Raízen and EBITDA between R$130 and R$140 million. We will reach Raizen Energia in our preliminary guidance for the crop year starting in April of 2015.

The projected volume of sugarcane crushed between 57 million and 60 million tons.

The volume of sugar could use between 4.3 and 4.4 and ethanol served between 1.9 billion and 2.1 billion liters with the volume of energy served between 2.1 million and 2.2 million megawatt hours and an EBITDA of between R$2.6 and R$2.8 billion with CapEx around R$1.6 between - I’m sorry, between R$1.6 billion and R$1.8 billion.

So when you look at the guidance you see that the numbers projected for 2015 are substantially better than 2014 and its going to be a challenging year for Brazil overall and most companies in this country.

We are very confident based on what we are seeing in the market up to now in this first quarter of the year that we’re going to reach those numbers and it should be another good year for all the businesses.

We are also expecting higher cash flow generation especially in Raízen for the year 2015 and we also think it’s attainable considering the overall market conditions and the reductions in the CapEx and the other improvements we are planning for the operations of mainly Raízen Energia but Raízen Combustíveis.

With that I would like to turn it back to you for your questions and Marcos and I will be here to answer that. Thank you..

[Operator Instructions] Our first question comes from Gustavo Allevato, Banco Santander..

Good morning guys and thanks for questions. I have one question regarding your spin-off of the gas distribution business. If you guys could provide an update on the spin-off, I hope, thank you..

Gustavo, we will start operating I mean in April as we announced to the market as if that business was already separated. But we are not going to do it up until we are able to refinance the prep, because we have already promised to the market that that debt should be contributed to the gas distribution business.

So whenever we think that conditions are adequate for us to refinance that debt, we basically move that part of the debt of the company to the gas distribution business and implement the spin off.

I can tell you when it’s going to happen, we believe that if market conditions improve, we should do it in the second half of 2015 but we have to see how market conditions will keep evolving over time to see if we’re going to get there..

Okay. Thank you..

Our next question comes from Josephine Shea with Hartford Investment..

Good morning.

Could you perhaps give a little bit more color around hedging, to understand that correctly that on an annual basis you hedge the interest and maybe also principal of whatever debt is maturing?.

It's both principal and interest for the prep and also for the debt in Raízen that matures after three years..

And also all U.S.

dollar coupon payment of the total of Holdco?.

Yes..

Okay. And could you potentially give a little color around what the foreign exchange the reis decline has on your financials, maybe like how much capital expenditure is actually U.S.

dollar? Maybe cost of goods sold, revenues their multiple transmission mechanisms of the reis, could you give some color where is the upside and where it is a potential benefit, thanks?.

The upside is substantially higher than the downside.

On the cost side, fertilizer is the main item for Raízen Energia here and honestly I think in comparison with the overall profit of the company, it's fairly small and if you will -- I think yes, diesel which is the raw material for the production of lubricants, which should have a negative impact as it had for the business.

What you saw this year in 2014 is a very good reflection of what sort of impact the FX devaluation could have on the business. I think the lubricants I think is the business that is the most exposed and overall in terms of cost, we shouldn’t be very concerned because there is no relevant impact coming from that devaluation..

And then the last question potential electricity rationing and/or water rationing is there an impact? Should we be concerned or how will you deal with it going forward?.

Water rationing has an impact on Comgas and on the revenues of the company because we used gas in Brazil for water heating mainly and for cooking. So whenever there is water rationing, people are going to either use last water released -- the usage of water and that should have an impact.

If you look at what happened last year in the peak of the rationing basically took place in the last quarter and some in the beginning of 2015 as well, but you will notice that the impact was not very relevant. So this is basically where the bulk of the impact will be basically felt.

It's in Comgas and my team is telling me here that it was roughly 6% of the impact on the residential revenue. So we have a 6% reduction in terms of volume in the residential market segment..

Great. Thank you..

Our next question comes from [indiscernible] with Brasil Plural..

Hello. Good morning. Thanks for the questions. I have two questions concerning ALL and Rumo merger.

First of all, I would like to know if there is any specific date for the customers to report the consolidated balance sheet and if you couldn’t state us about an idea, which is going to be the recurring maintenance cash collateral about additional provisions or change that could be relevant for us that would be great, that is the first question.

And the second question concerning ALL's rate concession renewals, if they take too long to be accrued, [indiscernible] investments of the expansions brand before the renewal is granted and if this is the case, do we think that these investments could be included in the investment amount that will be required in exchange for the concession renewals, that's it.

Thank you..

Well on the investments and the concession, let me just give you a flavor on that. We do have an 18-month plan that is actually starting now, that is to be done no matter what happens on the regulator side, okay.

So this is basically putting together a management system putting together different approach in terms of procedures and then the areas revising the weekly order operating manuals of the various systems on the rail operation, which I think that's correcting some maintenance backlog that is critical at this point.

I think like that, we will be done on the next -- on the 18 months that comes no matter what. This in our view will bring good results anyhow and they're -- look they're not - I mean they’re not a bulk of the investment for sure. This is a number that fits into current budget and I think that's fine.

We do expect to have in those 18 months the renewal granted somehow. And that discussion will be based on level of service, size, growth and capacity and things like that. So if I could this with less money, this will be granted anyway. So the number in terms of reis is not what the regulator wants.

The regulator wants to really have the service provided at the right level of [obviously] reliability. We have the proper growth of capacity with the systems in place to avoid minimum level of accidents and things like that.

So, our very operational KPIs that will be based in the discussion of removing the concession remembering that the current concession already provides on the current contract that we do have the right to once remove the contract for another 30 years.

And we also remembering you that Rumo -- line is already 90 year concession - nine zero, so we’re talking about the rest okay. So having said that, going to your first question, yes there is a recurring CapEx on a real operation of this size. Now our view is on the range of Raízen, little less probably like 800.

And so this is probably what we will see on the long run on these operation, okay..

Just to answer your first question, you should expect us to start basically releasing earning for the combined entities in the second quarter of 2015, which basically means next quarter..

Okay, that's great. Thank you very much..

[Operator Instructions] This concludes the question-and-answer session for investors and analyst. Sir you may now proceed..

Okay, thank you very much. And we'll be in touch with you again as soon as we have news from ALL or in the next conference call. Thank you..

This concludes Cosan's audio conference for today. Thank you for your participation..