São Paulo, 07 de março de 2012August 2014

Corporate Presentation

2 Distribution

3 Generation

Competitive Power Supply and Services4

1 Corporate Overview

Agenda

Consolidated financial figures5

2

6 The Electric Sector

2 Distribution

3 Generation

Competitive Power Supply and Services4

1 Corporate Overview

Agenda

Consolidated financial figures5

3

6 The Electric Sector

4

• Largest private player in the Brazilian electricity sector

• Market cap of ≈ R$20 billion1, listed on BM&FBovespa Novo Mercado and on NYSE (ADR Level III)

• LTM 2Q14 Adj. EBITDA2 of R$ 3.9 billion and Adj. Net Income2 of R$ 1.3 billion

• Differentiated Dividend Policy: >50% of net income, semi-annually. Payout ratio of ≈95% since IPO in 2004

• Presence concentrated in the most developed regions of Brazil

• Leadership in Distribution through 8 subsidiaries

• 2nd largest private Generator with an equivalent stake of 3,127 MW of installed capacity, more than 93% from renewable sources

• Leadership in Renewable Energy in Brazil

• 3rd largest player in Competitive Power Supply and a world-class provider of Value-Added Services1) On August 15, 2014; 2) Take into account proportionate consolidation of minorities’ stakes at gencos (+) regulatory assets &

liabilities (-) non-recurring items.

Corporate overview – Highlights

551) Controlling shareholders; 2) Includes the 0.1% stake of Camargo Corrêa S.A.; 3) Includes the 0,2% stake of Petros e Sistel pension funds; 4) 51.54% stake of the availability of power and energy of Serra da Mesa HPP, regarding the Power Purchase Agreement between CPFL Geração and Furnas.

Corporate structure

Free Float

DIS

TR

IBU

TIO

N 100%

100%

100%

100%

100%

100%

100%

100%

65%

25.01%

48.72%

57.13%

51%

GEN

ER

ATIO

N

100%

100%

99,95%

100%

CO

MM

ER

CIA

LIZ

ATIO

N100%

100%

REN

EW

AB

LES

59.93%

Investco5.94%

SER

VIC

ES 100%

100%

100%

58.8%

100%

15.1%3 30.5%

Nect Serviços100%

24.4%2 30.0%

Paulista Lajeado

1

100% CPFL Centrais Geradoras

Serra da Mesa HPP

51.54%4

• Shares listed in differentiated segments:• BM&FBovespa Novo Mercado• NYSE (ADR Level III)

• Compliant with the Sarbanes-Oxley Act

• Board of Directors composed by 7 members:• 1 Independent Member• Advised by 3 Committees

• Self-Assessment for Board of Directors and Fiscal Council

• Enforcement of policies for disclosure of information and for prevention of insider trading by employees

• Dividend Policy:• Minimum of 50% of net income, semi-annually

World-Class Corporate Governance Practices

66

Corporate governance

HPP Foz do Chapecó

HPP Barra Grande

HPP Castro Alves

HPP Monte Claro

HPP 14 de Julho

HPP Campos Novos

HPP Luis Eduardo

Magalhães

CPFL Piratining

a

HPPSerra da Mesa1

CPFLPaulista

RGE

19 SHPPs (CPFL

Renováveis)

1 TPP (Carioba)

CPFL Santa Cruz

CPFL Jaguari

CPFL Sul Paulista

CPFL Leste Paulista

CPFL Mococa

SHPP Rio do Peixe (I/II)

SHPP Macaco Branco

203620352032202820272015 …

CPFL Energia requested Aneel to renew the

expiring concessions

~3%CPFL

Energia's EBITDA

<1% CPFL

Energia's installed capacity

7

CPFL Energia enjoys long term concessions

1) Furnas has the concession for HPP Serra da Mesa. CPFL has the contractual right of 51.54% of the plant’s assured energy, according to the 30-year leasing contract, maturing in 2028.

DistributionGeneration

3rd Tariff Review Cycle

CPFL Piratininga Oct-122

CPFL Santa Cruz

Feb-132

CPFL Leste Paulista

CPFL Jaguari

CPFL Sul Paulista

CPFL Mococa

CPFL Paulista Apr-13

RGE Jun-13

8

CPFL Energia – LTM 2Q14 Adj. EBITDA Breakdown¹ | R$ million

CPFL Santa Cruz

CPFL Leste Paulista

CPFL JaguariCPFL Sul Paulista

CPFL Mococa

1) Adjusted by regulatory assets & liabilities and non-recurring items; does not consider the holding company; 2) 12 months retroactive effect; 3) Commercialization in the free market and Services

50%

22%

8%

20%

8

AlternativeEnergy

450

Conventional

1,260

CPFL Paulista

RGE

CPFL Piratininga

Competitive Supply and Services3

204

Generation1,710

CPFL Energia - Consolidated1 | 3,942

Distribution2,027

74%26%

51%

43%

5%

Generation Segment

Distribution Segment

CPFL Energia | EBITDA breakdown

9

Leadership among private companies in the electric sector,with a diversified portfolio in different businesses related to

Energy

99

COMPETITIVE SUPPLY

• Leadership in commercialization of renewable energy in the free market

• Maximization of profitability, considering new market conditions

GENERATION

• Operational Excellence, presenting the highest margins of the sector

• Expansion of installed capacity in hydro and thermal

• Leadership in renewable sources (> 4 GW by 2020)

DISTRIBUTION

• Market leader, doubling the market share in Brazil

• Operational excellence through innovation and new technologies (smart grid)

SERVICES

• Largest services company in the power sector

• Strong growth of sales

• Synergies with other segments in the Group

CPFL Energia’s ambitions

2 Distribution

3 Generation

Competitive Power Supply and Services4

1 Corporate Overview

Agenda

Consolidated financial figures5

10

6 The Electric Sector

2009 2010 2011 2012 2013 2Q14

6,568.0006,750.000

6,954.0007,176.000

7,386.705 7,497.211

Distribution Segment

• 7.5 million customers

• 569 municipalities

• Footprint: most developed regions

• High potential in per capita consumption

1º1º

Distribution LeaderMarket share: 13% Sales in the Concession Area (TWh)1

Industrial

Commercial

Residential

Others

Sales Breakdown | LTM 2Q14

5.3 5.3

4.3 5.0

6.4 6.4

1) Excluding sales at CCEE; 2) Source: EPE.

Number of Consumers | # Thousands

11

Sales CAGR - by Region2 |LTM 2Q09 – LTM 2Q14

2009 2010 2011 2012 2013 LTM 2Q13

LTM 2Q14

37.3 37.8 39.3 39.9 40.7 41.1 40.9

11.711.0 13.1 14.7 16.0 17.3 16.4

Captive TUSD

52.448.8

56.7 58.5

CAGR 2009-134.6%

54.6

27% 42%

16%15%

+3.5%

59.6

57.6

Brazilian economy and market performance

Real wage bill1 and CPFL’s residential consumption | %YoY growth

2006 2007 2008 2009 2010 2011 2012 2013

5.9 5.9 6.1

3.9

7.3

4.5

6.6

2.9

4.5

6.9 6.86.0

5.2 4.9

6.9

5.9

Real wage bill

Retail sales2 and CPFL’s commercial consumption3 | %YoY growth

2006 2007 2008 2009 2010 2011 2012 2013

6.2

9.7 9.1

5.9

10.9

6.78.5

5.45.5

7.75.6 5.2 6.0 6.6 6.8

3.6

Industrial production2 and CPFL’s industrial consumption3 | %YoY growth

2006 2007 2008 2009 2010 2011 2012 2013

2.86.0

3.1

-7.4

10.5

0.4

-2.7

-3.0

3.36.1

2.9

-6.7

9.3

3.90.7 2

.0

Industrial production

1) Source: IBGE/LCA. 2) Source: IBGE. 3) Take into account changes in billing calendar for free consumers.

Other variables influencing energy consumption

• Population growth• Migration• Credit• Household appliances • Temperature• Rainfalls• Public investments

12

Southeast:CPFL Paulista, CPFL Piratininga, CPFL Santa Cruz,

CPFL Leste Paulista, CPFL Jaguari, CPFL Sul Paulista,

CPFL Mococa

South: RGE

Footprint in the most developed regions of Brazil

131313

Distribution business

• 8 distribution companies;• 13% of market share;• 7.5 million customers;• 569 municipalities;• LTM 2Q14 sales of 59,615 GWh | 04-13 CAGR of

5.4%

Leadership in the distribution segment

2006 20071912

Discos’ Acquisitions | Key dates

1997-2001

Start Up

1

1

1) Acquired by VBC (one of CPFL Paulista’s controlling shareholder at the time) and PSEG in 1997, during the privatization process, and incorporated by CPFL Energia in 2001 (67,03%). In 2006, CPFL Energia acquired the additional stake (32.67%).

Avg. Frequency of Power Outages per Consumer per Year – FEC2013 (# occurrences)

Ele

trop

au

lo

CPFL

Pir

ati

nin

ga

CPFL

Pau

lista

CPFL

Moco

ca

Ele

ktr

o

Coelc

e

CPFL

Lest

e P

au

l...

Ban

deir

an

te

Esc

els

a

Cem

ig

CPFL

Jag

uari

CPFL

Su

l Pau

lista

CPFL

San

ta C

ruz

Celp

e

Lig

ht

Cose

rn

Coelb

a

RG

E

Am

pla

Cele

sc

Cem

ar

CEEE

4.4 4.6 4.7 4.9 5.0 5.1 5.4 5.5 5.8 6.3 6.3 6.7 6.88.3 8.3 8.7 8.9 9.0 9.8 10.610.9

15.8

14

Avg. Length of Power Outages per Consumer per Year - DEC2013 (hours)

Distribution: best-in-class operational efficiency

CPFL

Moco

ca

CPFL

Lest

e P

au

l...

CPFL

San

ta C

ruz

CPFL

Pau

lista

CPFL

Pir

ati

nin

ga

CPFL

Jag

uari

Ele

trop

au

lo

Ban

deir

an

te

Ele

ktr

o

CPFL

Su

l Pau

lista

Coelc

e

Esc

els

a

Cem

ig

Cose

rn

Cele

sc

RG

E

Lig

ht

Cem

ar

Am

pla

Celp

e

Coelb

a

CEEE

4.9 5.9 7.0 7.1 7.4 7.6 8.0 8.1 8.5 9.1 9.1 9.712.513.7

15.517.418.418.920.1

22.022.523.2

Zero-Base Budget

Inefficiencies from past budgets are not carried over to the next periods

Tauron Program

Introduction of the smart grid technology in the distribution network

Corporate Services Center

Implementation of a back-office services provider to increase

operating productivity and efficiency

Corporate Level

• Optimization of inspections (loss prevention), process review, and improvement in assertiveness: reduction of ≈17%

• Metering and delivery of bills - online billing (email), changes in layout/type of paper, alignment of bank fees for all Discos: reduction of ≈11%

Operational Level

Value Initiatives

• Reduction of consulting services and “insourcing” of activities: reduction of ≈47%

• Standardization of outsourced labor: reduction of ≈52%

• Improved management of travel expenses: reduction of ≈18%

• Consumption of paper and office supplies: reduction of ≈66%

15

Cost-cutting Initiatives

Cost-cutting Initiatives Total (2015 x 2011): ≈R$ 320 million

Cost-cutting already performed (2013 x 2011)1: ≈R$ 236 million

1) Constant value of Dec/13.

EBITDA acumulado até setembro: R$ 24 milhões1616

• Automated dispatch + tablets deployed in ~35% of all teams (RGE and CPFL Piratininga)

• 21,000 smart meters already installed as of August-14 (84%) – (Target: 25,000 large consumers)

• Implementation of RF Mesh Telecom Network already concludedEBITDA 2013: R$ 52.4 million

Achievements

Smart metering – Commercial and Industrial Consumers

• Real-time consumption readings

• Analysis of consumer load curve

• Real-time fraud detection

• Real-time power outage detection

Mobile Workforce Management

Optimized logistics for field teams (georeferenced maps)

• Faster power restoration

• Savings with optimized routes

Tablets for real-time communication

• Dynamic dispatch of teams

• Automated routing of teams

• On-line update of field services’ progress

Projeto Tauron – smart grid

Distribution | Key financial figures

Net revenues1 – Adjusted2

EBITDA – Adjusted2 Net income – Adjusted2

2010 2011 2012 2013 LTM 2Q14

9,432 9,794 10,830 10,716

11,203

2010 2011 2012 2013 LTM 2Q14

2,267 2,351 2,655

2,211 2,003

2010 2011 2012 2013 LTM 2Q14

1,309 1,235

1,356

1,047 910

1) Excludes construction revenue; 2) Adjusted by non-recurring items and regulatory assets & liabilities.

CAGR 2010-13

+4.3%

+4.5%

CAGR 2010-13

-0.8% -9.4%

CAGR 2010-13

-7.2% -13.1%

Sales in the Captive Market (TWh)

2010 2011 2012 2013 LTM 2Q14

39.3

39.9

40.741.1

42.3+2.9%

CAGR 2010-13

+1.6%

17

2 Distribution

3 Generation

Competitive Power Supply and Services4

1 Corporate Overview

Agenda

Consolidated financial figures5

18

6 The Electric Sector

• Long Term Concessions

• Brazil’s largest Portfolio in Alternative Energy

• Renewable Sources: 93%

2º2º

2nd Largest Private Generation Company

Market share: 2.4%

Hydro power 60%

Thermal7%

SHPP7%

Wind19%

Biomass7%

Solar0%

Portfolio by source – 2018(e)

33%

Generation Segment

1) Considering 58.8% stake at CPFL Renováveis, since its creation.

Installed Capacity1 (MW) | Estimated growth

CAGR 2000-18e = 19% a.a.

Semesa Baesa

Enercan Ceran

Foz Chapecó

EpasaBaldin

Creation ofCPFL

Renováveis

19

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(e)

2015(e)

2016(e)

2017(e)

2018(e)

2019(e)

- 657 657 657 657 660 747 751 931 1,047 1,055 1,055

-

143

801 812 812 854 915 1,072

1,5881,7041,7372,203

2,6172,9122,9883,1273,1273,2633,2633,293

0

Privatization assets Brownfield

Serra da Mesa

Monte Claro

Barra Grande

CamposNovos Lajeado Castro

Alves 14 de Julho

Foz do Chapecó Epasa

Commercial Startup

1998 2004 2005 2007 2007 2008 2008 2010 2010-11

Installed Capacity(MW)

1,275.0 130.0 690.0 880.0 902.5 130.0 100.0 855.0 341.6

Assured Energy (MWavg)

671.0 59.0 380.6 377.9 526.6 64.0 50.0 432.0 247.6

CPFL Stake 51.54% 65.00% 25.01% 48.72% 6.93% 65.00% 65.00% 51.00% 57.13%

Installed Capacity CPFL (MW)

657.1 84.5 172.5 428.7 62.5 84.5 65.0 436.1 195.2

Assured Energy CPFL (MWavg)

345.8 38.4 95.2 184.1 36.5 41.6 32.5 220.3 141.5

Flooded area (km2)

1.784 1.4 95.0 32.9 630 5.0 5.0 80.0 -

(MW/km2) 0.7 92.9 7.3 26.7 1.4 26.0 20.0 10.7 -

Concession terms 2028 2036 2036 2035 2032 2036 2036 2036 2042

Conventional generation | 2,248 MW1 of installed capacity

CPFL Energia’s power plants – state-of-the-art environmental efficiency

20 1) Equivalent stake, including 37.3 MW of small plants at CPFL Geração and 24.3 MW of SHPPs at CPFL Centrais Geradoras.

CPFL Renováveis | Corporate structure

21

58.8% 37.0%

Free float

16.6%

100%

63.0% 24.6% 0.0%

Small Hydro Biomass Wind

Pre-IPO

Post-IPO

Solar

DESA is one of the main independent renewable energy companies in Brazil,with total contracted capacity of 331 MW

CPFL Renováveis | Partnership with Dobrevê Energia

22

3

2

5

1

4

1) DESA holds 60% of SHPP Ludesa. 2) The PPAs are based on January 2014 (average values when there is more than one PPA). 3) On December 31, 2013, DESA presented a consolidated net debt of R$ 656 million (preliminary value, subject to audit and, therefore, eventual changes) to be added after December 31, 2013 in approximately R$ 200 million.

Commercial Start Up

Installed capacity

Capacity factor

PPA2

R$/MWh

1 SHPP Ludesa(1)

São Domingos (SC) Jul-07 30.0 MW 70.7% 202

2 SHPP FigueirópolisIndiavaí (MT) Nov-10 19.4 MW 64.9% 201

3 SHPP Novo HorizonteCampina Grande (PR)

Jun-11 23.0 MW 45.2% 136

4 Morro dos VentosJoão Câmara (RN) Jul-12 145.2 MW 45.5% 186

4 EurusJoão Câmara (RN) Sep-13 60.0 MW 49.2% 150

4 Morro dos Ventos IIJoão Câmara (RN)

1Q16 29.2 MW 51.8% 124

5 SHPP Mata VelhaUnaí (MG) 2Q16 24.0 MW 52.1% 131Portfolio of Projects in the Partnership

(MW)Operation Construction  Total

CPFL Renováveis 1,416.8 383.5 1,800.3

DESA 277.6 53.2 330.8

CPFL Renováveis After-Partnership 1,694.4 436.7 2,131.1

SHPPWind

Hydro

Wind

Biomass

Solar

CPFL Renováveis | Corporate structure after the joint venture

5.61% 5.49% 7.12% 2.97% 1.93% 1.47%58.84% 9.32%

Market

7.24% 0.00%

4.90% 4.80% 6.22% 2.59% 1.68% 1.29%51.41% 8.14%

Market

6.33% 12.63%(1)

(ARROW)

(ARROW)

(2)

(2)

1) Shareholders’ stake may suffer adjustments arising from the due diligence. 2) Through CPFL Geração.

Pre-operation

Post-operation

23

24

Operating (Jun-14)

Under

construction

End of2018

Under development

Total Portfolio

100% with PPA

1,777

5,544

PossibleProbableHighly Confident

3,767

Small Hydro

• 35 operating: 327MW

• Under construction: -

• Under development: 626MW

Total: 953MW

Biomass

• 8 operating: 370MW

• Under construction: -

• Under development: -

Total: 370MW

• 26 operating: 797MW

• 11 under construction: 282MW

• Under development: 3,141MWTotal: 4,220MW

Wind

• 66 operating: 1,495MW1

• 11 under construction: 282MW

• Under development: 3,767MWTotal: 5,544MW1

Total

1) Including Tanquinho solar power plant – 1MWp of installed capacity

1,495

WindSHPP – Small HydroBiomass

282

2,214

1,077

476

4,220

953

370

797

370327

1,079

370327

CPFL Renováveis | Installed capacity (MW)

Commercial start-up / Acquisition

Installed Capacity (MW)

Assured Energy (MWavg)

PPA Comments

CPFL Renováveis (Aug-11)

652 314

Bio Ipê TPP 2Q12 25 8 Free market -

Bio Pedra TPP 2Q12 70 24Reserve auction (R$170.91/MWh)

Revenue(e): R$ 20 million/year

Bons Ventos Wind Farms 2Q12 158 63 PROINFA (R$ 331.11/MWh)Acquisition price: R$ 1,062 million

Santa Clara Wind Farms 3Q12 188 76Reserve auction (R$ 184.71/MWh)

Revenue(e): R$ 115 million/year

Ester TPP 4Q12 40 11Alt. sources auction (64%) and free market (36%)

Acquisition price: R$ 111.5 million

Tanquinho Solar PP 4Q12 1 1 Free market -

Salto Góes SHPP 4Q12 20 11Alternative sources auction (R$176.71/MWh)

Revenue(e): R$ 112 million/year

TPP Coopcana 3Q13 50 18 Free marketRevenue(e): R$ 22.6 million/year

Campo dos Ventos II Wind Farm

4Q13 30 15Reserve auction (R$ 151,21/MWh)

Revenue(e): R$ 18.5 million/year

TPP Alvorada 4Q13 50 18 Free marketRevenue(e): R$ 22.6 million/year

Rosa dos Ventos Wind Farms 1Q14 14 5 PROINFA (R$ 338.41/MWh)Acquisition price: R$ 103.4 million

Atlântica Wind Farms 1Q14 120 53Alternative sources auction (R$154.81/MWh)

Revenue(e): R$ 76.7 million/year

Macacos I Wind Farms 2Q14 78 38Alternative sources auction (R$161.51/MWh)

Revenue(e): R$ 52.6 million/year

Current portfolio (Jun-14)

1,495 655

1) Constant currency (Dec-13)25

CPFL Renováveis | Track record

CPFL Renováveis | Power plants under construction

Commercial Start-up 2016-2018(e)

282MW

147MWaverage

1) Campo dos Ventos I, III, V; 2) Ventos de São Benedito, Ventos de Santo Dimas, Santa Mônica, Santa Úrsula São Domingos and Ventos de São Martinho; 3) Pedra Cheirosa I and II; 4) Gradual commercial start-up from 2Q16; 5) Gradual commercial start-up from 1H18; 6) Constant Currency (Dec-14); 7) Assured Energy calculated in the P90.

Campo dos Ventos Wind Farms1,4 and São Benedito Wind Farms2,4 Pedra Cheirosa Wind Farms3

Commercial Start-up 20164 20185

Installed Capacity 231.0 MW 51.3 MW

Assured Energy7 120.9 MWaverage 26.1 MWaverage

PPA Free market 20 yearsA-5 Auction

R$ 125.04 MWh6 until 2037

Status Contract to supply wind turbines signed; executive projects in progress

Negotiation of wind turbines supply in progress

26

Conventional and Alternative Energy | Key financial figures

Net Revenues (R$ million) - Adjusted1 EBITDA (R$ million) - Adjusted1

Net Income (R$ million) - Adjusted1

1) Adjusted by proportional consolidation and non-recurring items.

2010 2011 2012 2013 LTM2Q14

1,0471,351

1,9642,303

2,668

CAGR 2010-13 = +33.5%+15.8%

2010 2011 2012 2013 LTM2Q14

750

1,060

1,4271,583

1,693CAGR 2010-13 = +30.7%+6.9%

2010 2011 2012 2013 LTM2Q14

244

721

373 390 407+4.4%

27

CAGR 2010-13 = +21.1%

2013 EBITDA/installed MW

0.57 0.56 0.47 0.44 0.41 0.41 0.41

0.13

2 Distribution

3 Generation

Competitive Power Supply and Services4

1 Corporate Overview

Agenda

Consolidated financial figures5

28

6 The Electric Sector

Competitive power supply| Regulated vs. free market

  Regulated market Free market

Energy supplier No choice - distribution company Free choice

Tariff of the use of distribution system (TUSD) Distribution company Distribution company

Energy prices Regulated by ANEEL Free negotiation

Consumer Capacity Connection date Voltage Energy source

Free > 3,000 kW

after July, 1995 any any

before July, 1995> 69 kV any

< 69 kV incentivized

Special500-3,000 kW - Group A incentivized

units totaling 500 kW - Group A incentivized

29 1) Source: EPE (full year 2013)

Main differences

Advantages

Who can join

Lower prices

Free choice from energy supplier

Better predictability of energy expenses

Customization according to consumer

seasonality

27%

73%

Free Market1

Regulated Market

• 284 free consumers

• Nationwide outreach

• Value-added product portfolio

• Synergy with CPFL Renováveis

Number of Consumers (#) | CPFL Brasil

3º3º Market share: 8%

Portfolio (Free Consumers)

179

52

Inside the concession area

Outside the concession

area

Current: 10.9 GW avgPotential: +7.9 GW avg

Free Market in Brazil¹

211

73

Competitive power supply

30

• CPFL Brasil was the winner of Exame Magazine’s 2013 Best and Largest Companies (category Energy)

• The Company was selected among gencos, discos, transcos and other players in the electric sector throughout Brazil2010 | 2011 | 2013

3rd Largest Player

2008 2009 2010 2011 2012 2013 1Q14

80 74

129 141

231

284 284

CAGR = 30%

1) Jun-14

2Q142008 2009 2010 2011 2012 2013

31

Jun/09 Jun/10 Jun/11 Jun/12 Jun/13 Jun/14

441 465 491 558

613 617

Current: 9.1 GWavgPotential: +1.3 GWavg

Current: 1.8 GWavgPotential: +6.6 GWavg

Competitive advantages of CPFL: market leadership, expertise and synergies with CPFL Renováveis

Source: ANEEL and CCEE

# of competitive customers – larger than 3 MW

# of special customers – from 0.5 to 3 MW

Number of free clients in Brazil

CAGR=6.9% CAGR=43.6%

Competitive power supply | Opportunities

Jun/09 Jun/10 Jun/11 Jun/12 Jun/13 Jun/14

192 221

495

796

1,048 1,164

Transmission networks

Self-generation networks

Distributionnetworks

Recovery of equipment

Services Segment | CPFL Serviços

32

• Foundation: 2006

• Core Business: offers a wide range of value-added services, ranging from engineering projects to maintenance and recovery of equipment. These services are designed to help consumers improve the efficiency, cost and reliability of their electric equipment

• Type of services: construction of transmission and distribution networks; maintenance and recovery of equipment; self-generation networks (cogeneration, energy-efficiency projects and distributed generation arrays – solar energy)

Services Segment | CPFL Total and CPFL Atende

33

• CPFL Total offers collection services with an established authorized network; capacity to collect utility bills, such as water, energy, telephone, and cable TV.

• Capability of cross-sale with other service providers, enabling the collection via energy bills.

• Foundation: 2008

• Core Business: provider of contact center and customer relationship services to other utility companies

• Services: face-to-face attendance, back-office, credit recovery, toll-free customer support, ombudsman, service desk and sales

Net revenues EBITDA Net income

Competitive power supply and Services | Financials1

1) Pro forma34

2010 2011 2012 2013 LTM2Q14

1,909

1,699

2,031 2,031 2,009

2010 2011 2012 2013 LTM2Q14

201

164

127

52

136

2010 2011 2012 2013 LTM2Q14

303278 287

74

204

2 Distribution

3 Generation

Competitive Power Supply and Services4

1 Corporate Overview

Agenda

Consolidated financial figures5

35

6 The Electric Sector

36

20092010201120122013 LTM 2Q1

4

10,53710,92111,41313,235

13,67114,245

CPFL Energia | Key financial figures1

36

Net revenues | R$ million

CAGR 2009-13

6.7%

4.2%

2009 2010 2011 2012 2013 LTM 2Q14

2,702

3,2603,649

4,343

3,848 3,743

EBITDA | R$ million

25.6%

29.8%32.0%32.8%

28.1%26.3%

-2.7%

EBITDA

EBITDA Margin

CAGR 2009-13

9.2%

Net Income | R$ million

Net Income

Net Margin

CAGR 2009-13

0.4%

2009 2010 2011 2012 2013 LTM 2Q14

1,266

1,5261,5031,617

1,2841,167

12.0%14.0%13.2%12.2%

9.4%8.2%

-9.1%

1) Take into account proportionate consolidation of minorities’ stakes at gencos (+) regulatory assets & liabilities (-) construction revenues (-) non-recurring items.

37

CPFL Energia | Key financial figures – Dividends

2S04

1H05

2H05

1H06

2H06

1H07

2H07

1H08

2H08

1H09

2H09

1H10

2H10

1H11

2H11

1H12

2H12

1H13

2H13

140

401498

612722

842719

602 606 572655

774

486

748 758640

456363

568

3.7%

6.5%

9.1% 8.7%9.6%

10.9%9.7%

7.6% 7.3% 7.6% 7.9%8.6%

6.9%6.0%

7.1%6.1%

4.6%3.9%

4.8%

8.29 9.4311.67

15.0214.1315.8717.9918.0516.6915.7716.5118.4420.1822.0521.95

26.3022.9521.1119.80

CPFL has presented payout ration close to 100% since its IPO, reaching the markof R$ 11.2 billion distributed. Declaration of dividend for 2H13: R$ 568 million | 0.59/share

Dividend Yield 1 (LTM) Declared dividends2 (R$ Mi) CPFL average price (R$/ORD)3

1) Considering last two half years’ dividend yield. 2) Refers to declared dividend. Payment in the next half year. 3) Considers share price adjusted for reversal stock split and simultaneous split of shares on June 29, 2011 (not adjusted per dividends).

38

Capex(e) 2014-2018

1,5531,239 1,235

1) Constant currency Dec/13. Take into account 100% interest on CPFL Renováveis and Ceran (IFRS)2) Constant currency Dec/13. Considers the proportional stake in the generation projects 3) Conventional + Renewable

1,8421,505

1,230 1,226

Total:R$ 7,739 million1 (IFRS)R$ 7,213 million2 (Pro-forma)

Distribution: R$ 5,826 million

Generation3:R$ 1,425 million (IFRS)R$ 899 million (Pro-forma)

Commercialization and Services:R$ 488 million

2013 actual (cash flow)

2014 2015 2016 2017 2018

845 8751,316 1,342 1,153 1,140

513 392

390 8019 18

53 144

13683

58 68

845 8751,316 1,342 1,153 1,140

837 603

637129

28 27

53 144

136

8358 68

1,735 1,622

2,089

IFR

SPro

-form

a 1,410 1,410

39

CPFL Energia | Indebtedness and leverage

2011 2012 2013 1Q14 2Q14

10.0

12.6 12.2 12.8 13.2

2.73 2.893.59 3.58 3.45

3,665 4,377 3,399 3,570 3,828

70%

3%

6%

21%

CDI

Prefixed (PSI)

IGP

TJLP

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

1Q

14

2Q

14

9.4%7.9%

9.9%7.3% 7.1%

4.9% 4.4% 4.3%3.0% 2.4% 3.0% 2.9%

17.7%

13.9%13.4%12.1%

13.4%

9.4%10.5%11.1%9.0% 8.4% 9.1% 9.7%

NominalReal

Leverage1,2 | R$ billion

Gross debt cost4,5 | LTM

Adjusted EBITDA3

R$ million

Adjusted net debt/Adjusted EBITDA3

Gross debt breakdown1,5

1) Financial covenants criteria; 2) Pending validation of external auditors; 3) LTM recurring EBITDA; 4) IFRS criteria; 5) Financial debt (+) private pension fund (-) hedge.

40

CPFL Energia | Strong and robust liquidity

Cash Short-term

2015³ 2016 2017 2018 2019 2020+

4,549

3,014

489

1,860

2,724

3,3253,139

2,796

Cash coverage:

1.51x short-term amortization (12M)

1) Considers Debt Principal; 2) Covenants Criteria; 3) Amortization from July/2015.

Average tenor: 3.87 yearsShort-term (12M): 17.4% of total

Debt amortization schedule1,2 | Jun-14 | R$ million

2 Distribution

3 Generation

Competitive Power Supply and Services4

1 Corporate Overview

Agenda

Consolidated financial figures5

41

6 The Electric Sector

Energy sector in Brazil: business segments

Consumers

1) Source: ANEEL – August 18, 2014; 2) Source: EPE and CCEE; 3) Source: ONS and Ministry of Mines and Energy (MME) – January 31, 2014; 4) June, 2014

Free Market

Captive Market

76.1 million consumers

1,781 Consumers4

125 TWh of billed energy2

76.1 million Consumers347 TWh of billed

energy2

Transmission

• 104 Companies³

• 118,105 km of transmission lines³

• Eletrobrás: ~55% of total assets

Distribution

• 63 Companies

• 472 TWh of billed energy2

• Top 5: ~46% of the market

Competitive Power Supply

Generation

• 130 GW of installed capacity1

• 79.9% Renewable energy1

• Eletrobrás: ~31% of total assets

42

Brazilian electricity matrix

1) Source: EPE - National Energy Balance 2013 and 10-year Energy Plan 2013-2022; 2) Others: considers coal, oil, diesel and process gas.

Brazil’s electricity matrix is predominantly renewable, with hydro installed capacity totaling 69% of the total supply, while biomass, wind and SHPPs account for 14%. In

the next years, it is expected that other sources will grow, mainly wind, reaching 10% of total installed capacity in 2022.

Brazilian Electricity Matrix

Hydro 69%

Nuclear2%

SHPP4%

Wind3%

Biomass7%

Natural gas9%

Others7%

129 GW 153 GW 183 GW

2013 2017 2022

Evolution of Installed Capacity (GW) 2013-20221

2

43

Hydro 67%

Nuclear1%

SHPP4%

Wind8%

Biomass6%

Natural gas8%

Others6%

2

Hydro 65%

Nuclear2%

SHPP4%

Wind10%

Biomass8%

Natural gas8%

Others5%

2

2013 2014 2015 2016 2017 2018

Reserve Energy Auction - LER:Discos are not required to declare contracting needs and generation costs are covered through sector

charges

Discos must purchase electric energy to supply their captive market, five years in advance,in public auctions (Regulated Market – ACR)

Discos

Gencos

Mechanics of regulated auctions

A-5 Auction

A-3 Auction

A-1 Auction

• New Energy: Initial supply 5 years after the auction• Term of contract: 15-30 years• Objective: Cover discos market growth and finance new

generation • Energy contract limit: no limit

• “Old” or Existing Energy: Initial supply in the following year• Term of contract: 1-15 years• Objective: Replace old contracts, maintaining the discos’

contracting level • Energy contract limit: 96% to 100% of the Replacement Amount

(MR)

• “New” Energy: Initial supply 3 years after the auction• Term of contract: 15-30 years• Objective: Adjust discos’ contracted energy levels• Energy contract limit: 2% of the load

44

451) 10-year Energy Plan 2013-2022; Installed Capacity : BIG - ANEEL April, 2014 + A-5 Auction; 2) Includes estimates of energy imported from Itaipu HPP, which is not consumed by Paraguay Electric System ; 3) Considers the export of 2/3 of energy produced by the Company.

Unrealized Potential to be Explored in Brazil

Evolution of Brazilian Installed Capacity by Source | GWh

Highly Fragmented Market | Renewables Market Share in Brazil based on contracted energy (26GW)

Wind Potential: 143GW Installed capacity: 2.9GW

2%

SHPP Potential: 17.5GW Installed capacity: 5.0GW

29%

Biomass Potential: 17.2GW¹ Installed capacity: 9.3GW

54%

Potential Realized

3.9% p.a.183

129

Renewables in Brazil are expected to grow at a CAGR of 8.2%, from 19 GW in 2013 to 38 GW in 2022 and still a highly fragmented market

World’s most attractive alternative energy market

RenovaEn-

ergimpQGERBrook-fieldCosanEletrosul

GestampElecnor

Other

8.2%

1.3% 6.9%7.5%

3.6%2.9%2.5%2.4%2.0%1,8%

1,6%67,6%

83

119,013

9

14,065

14

11,83818,701

38,137

Renewables

Other

Natural Gas

Hydro

2022A2013

3CAGR

1.0%

8.2%

2.5%

3.9%²

464646

• Selective high quality project development• Wind projects certified by industry leaders• Backed by high quality equipment suppliers• Long term O&M contracts• Energy generation monitoring and optimization

High Quality Development, Construction and Operation

Complementarity of Sources Mitigating Risks

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecWind (Generation - MWavg)Reservoir Storage

• Reservoir storage at high levels in the first semester while wind energy generation is concentrated in the second semester of the year

CPFL Renováveis benefits from the complementarity of sources

Wind PortfolioAttractive location

due to high wind speeds

SHPP PortfolioExposure to

abundant hydro resources

Installed Capacity1

Total: 1,800 MW

Solar

18%

61%

21%0%

SHPP

Wind

Biomass Solar

Operating:

HydroWind

Biomass

Under Construction:HydroWind SHPP Potential (Southeast and Midwest Regions)

Wind Potential (Northeast and South Regions)

Biomass Portfolio

Proximity to sugarcane production centers

Biomass

Region MW

NE 1,023

CW/SE 506

SO 271

Rese

rvoir

Sto

rag

e

(%)

Win

d G

en

era

tion

MW

Diversified and high quality portfolio, delivering superior performance, mitigating risks, ensuring reliable load factors and providing capacity to grow

with different sources

CPFL Renováveis | High quality and diversified portfolio

1) To be fully operational by 2018

47

Technology Has Shown Great Improvements in Recent Years | Recently developed technology for wind power plants allows greater load factors

Europe United States Brazil (NE)

Area89%

Area95%

Fre

qu

en

cy

Wind Speed (m/s)

Fre

qu

en

cy

Wind Speed (m/s)

Fre

qu

en

cy

Wind Speed (m/s)Ideal Wind Speed

Ideal Wind Speed

Area99%

Ideal Wind Speed

1.500kW

1.800kW80m

3.000kW

100m

70m

750kW50m

30m

300kW

75kW

17m

1980 -1990

1990 -1995

1995 -2000

2000 -2005

2000 -2005

20100

20

40

60

80

100

120

140

160

180

Rotor Diameter (m) Rating (kW)

Alt

ura

(m)

1.500kW

1.800kW80m

3.000kW

100m

70m

750kW50m

30m

300kW

75kW

17m

1980 -1990

1990 -1995

1995 -2000

2000 -2005

2000 -2005

20100

20

40

60

80

100

120

140

160

180

Rotor Diameter (m) Rating (kW)

Alt

ura

(m)

BrazilEurope and EUA

Improved availabilit

y

Greater efficiency

Reduced generation losses

Wind Features in Brazil are the Most Adequate for Power Generation | The average wind in Brazil (Northeast) has a similar intensity with less variability

CPFL Renováveis | Unparalleled wind conditions combined with top technology

Description Sustainability

48

Natural consequence of projects with lower environmental impact

Environmental & Streamlined Implementation

Process

Faster and simpler environmental process

Faster construction cycle

Annual auctions to match growth in energy consumption

Price of energy at the captive market structurally higher than at the free market given regulatory charges

Access to Multiple Sales Channels

Regulated energy auctions and the free market

Long term inflation protected/linked PPA (average 20-30 years)

Special niche in the free market for “special client” (demand between 0.5-3.0MW)

Current special free market of 2.7% (1.6GW) to potential of 9.6% (5.8GW)

Not a sector specific benefit BNDES has been providing support for the

sector for many years

Dedicated Sovereign

Funding Conditions

BNDES Financing Low Cost – average interest rate of 7.0% Long-term funding of 16 years Attractive capital structure

Policies in place since 1996 Not a direct government expenditure/tax break Not applicable for regulated auctions

Discounts on Transmission

Charges Discount of at least 50% (TUST and

TUSD)

Tax regime for small enterprises (annual revenues below R$78 mm), which is not sector specific

REIDI is applicable for all infrastructure projects ICMS/IPI1: discussions on expanding tax

incentives to SHPPs

Favorable Tax Regime and

Fiscal Incentives

“Lucro Presumido” with reduction in the effective tax rate to 5% - 15% from 34%

REIDI (special program of incentives for infrastructure development) - exemption of PIS/COFINS,

Exemption of ICMS (movement tax) and IPI (production tax)

Source: Company ; 1) Tax on revenues

Stable and solid regulatory framework