corporate presentation cpfl energia agosto 2016

March, 2013

Corporate

Presentation

August 2016

1

221) On August 12, 2016; 2) Considering proportional consolidation of generation assets (-) Non-recurring effects; 3) Considering CPFL’s stake on each generation project; considering 36 wind turbines of Campo dos Ventos I, III and V wind farms.

Company Overview

Largest integrated private player in the Brazilian electricity sector

Market Cap of R$ 23.2 billion1, listed on BM&FBOVESPA – Novo Mercado and on NYSE (ADR Level III)

In LTM2Q16, EBITDA of R$ 3.7 billion2 and Net Income of R$ 1.1 billion2

Presence concentrated in the most developed regions of Brazil

Leadership in distribution through 8 subsidiaries and a 12.2% market share

3rd largest private generator with 3,189 MW3 of installed capacity, of which 94% from renewable source

Leader in Renewable Energy in Brazil with the largest capacity in operation

One of the most profitable operations of energy Trading and a world-class provider of Value-Added Services

Power Plants

331) Bounded shares, according to the Shareholders Agreement; 2) 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; 3) Adjusted by non-recurring items; does not consider the holding company; 4) Commercialization in the free market and Services.

Company Profile

Lajeado HPP

5.94%

Nect Serviços/Authi

CPFL CentraisGeradoras

DISTRIBUTION 100%

SERVICES100%

RENEWABLES51.61%

65% 48.72% 51%

25.01%

Serra da Mesa HPP

51.54%253.34%

GENERATION100%

TRADING100%

Trading4

170

CPFL Energia – Consolidated3| 3,719

LTM2Q16 Adj. EBITDA Breakdown3 | R$ million Concession’s expiration

2027 2028 2032 2035 2036

CPFL Paulista

CPFL Piratininga

HPP Luis Eduardo

Magalhães

HPP Campos Novos

HPP Foz do Chapecó

RGEHPP Serra da

Mesa2HPP Barra

Grande

19 SHPPs(CPFL

Renováveis)

HPP Castro Alves

HPP Monte Claro

HPP 14 de Julho

2045

CPFL Santa Cruz

CPFL Jaguari

CPFL Sul Paulista

CPFL Leste Paulista

CPFL Mococa

23.0%1 19.3%1 11.0%1

15.1%23.6% 29.4%Free Float

31.9%

Conventional Generation

1,314

Distribution1,73646%

35%

5%

14%Renewable Generation

534

Closing of Transaction

Corporate Structure | Camargo Corrêa - State Grid Transaction

R$ 25.00/ share

23.0%1 19.3%1

23.6% 29.4%

Free Float

31.9%

1) Bounded shares, according to the Shareholders Agreement

Right of first refusal exercise

No movement

Sell together

SharePurchase

Agreement (SPA)

State GridProposal

Duediligence

Proposal extended to Previ

and Bonaire

Proposal to acquire the totality of CPFL Energia’s

bound shares

Acquisition of 234 million shares of the CPFL Energia (23% of total)

Proposal Date:

July 1st, 2016

Current Status

Transaction Requirements:

15.1%

11.0%1

4

Distribution Segment

• 7.8 million customers

• 561 municipalities

• Footprint: most developed regions

• High potential in per capita consumption

• Market size: 56.6 TWh/year

1st Market share: 12.2%

Industrial

Commercial

Residential

Others

1) Source: EPE.5

29% 39%

17%

15%

5 small discos

47%

22%

9%

23%RGE

CPFL Piratininga

2Q16LTM Adj. EBITDA Breakdown

R$ million

CPFL Paulista

Tariff review Sales CAGR by Region1 |

2Q11LTM – 2Q16LTM4th Tariff Review Cycle

CPFL Piratininga Oct-15

CPFL Santa Cruz

Mar-16

CPFL Leste Paulista

CPFL Jaguari

CPFL Sul Paulista

CPFL Mococa

CPFL Paulista Apr-18

RGE Jun-18

2Q16LTM Sales Breakdown

GWh

Market Share RS Class Consumption Breakdown

• Serves the Porto Alegre Metropolitan Area (excluding the state capital): 50% of the market and 60% of costumers

• Presence of Petrochemical Complex of Triunfo

• Strong presence of agricultural production with relevant crops for the domestic market (rice) and external (soybean)

• Relevant municipalities: Canoas, Novo Hamburgo, São Leopoldo, Sapucaia do Suland Uruguaiana (34% of population)

• Net RAB: ~R$ 1.7 bi

• Review Date: April, 2018

• Regulatory EBITDA: R$ 330 million

Regulatory Figures

• Net Revenue: R$ 3,028 million• EBITDA: R$ 259 million• Net Income: R$ - 5 million• Investments: R$ 214 million

Concession Area Sales: 8.9 GWh

Financial Figures (2015)

Transaction

• Acquisition price:R$ 1.7 billion (to be adjusted until the operation closing)

• Debt Assumption: R$ 1.1 billion

• EV = R$ 2.8 billion

• Status: Pending of approval - ANEEL and creditors

AES Sul RGE CEEE

AES Sul CPFL Energia

Residential Industrial Commercial Rural Others

Growth Projects: Distribution | AES Sul Acquisition

5

Before AES SUL

AES SulAfter

da AES SulVariation

(%)

Municipalities (#) 561 118¹ 679 +21

Concession Area (thousand km2) 204 100¹ 304 +49

Distribution Network ( km thousand)

247 65¹ 312 +26

Costumers (million) 7.8 1.3¹ 9.1 +17

Concession Area Sales (GWh) 58 9¹ 67 +16

Market Share (%) 12.4 1.9 14.3 +1.9 p.p.

Presence in the RS Municipalities (%)

53 24 77 +24p.p.

IFDM Municipalities² 42 em 100 5 47 em 100 +12

1) Source: 2015 Regulatory Financial Statements – AES SUL 2) Firjan Municipal Development Index - Ranking based on life quality criteria : i) Employment and income; (ii) Education and (iii) Health

CPFL Energia (Distribution)

Growth Projects: Distribution | AES Sul Acquisition

6

88

Generation Segment

• 3,189 MW of installed capacity

• 1,564 MWavg of physical guarantee

• Long Term Concessions

• Brazil’s largest Portfolio in Alternative Energy

• Renewable Sources: 94%

3rd Market share: 2.2%

Contracting level | %

2Q16 Installed Capacity1 | %

HPP

63%

Wind

Farms

19%

SHPP

7%

Biomass

6%

TPP

6%

Total: 3,168 MW

2016 2017 2018 2019 2020

100% 100% 100% 100% 98%

0.1% 2.3%

Contracted energy Available energy

• Contracted portfolio in the long term with low risk exposure

• Average price: R$ 209/MWh

• Average tenor: 12.8 years

Contract Profile

1998 2004 2005 2007 2007 2008 2008 2010 2010-11

1,275.0 130.0 690.0 880.0 902.5 130.0 100.0 855.0 341.6

671.0 59.0 380.6 377.9 526.6 64.0 50.0 432.0 247.6

51.54% 65.00% 25.01% 48.72% 6.93% 65.00% 65.00% 51.00% 53.34%

657.1 84.5 172.5 428.7 62.5 84.5 65.0 436.1 182.2

345.8 38.4 95.2 184.1 36.5 41.6 32.5 220.3 132.1

1.784 1.4 95.0 32.9 630 5.0 5.0 80.0 -

0.7 92.9 7.3 26.7 1.4 26.0 20.0 10.7 -

2028 2036 2036 2035 2032 2036 2036 2036 2042

Conventional generation | 2,199 MW of installed capacity

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

9

(MW)

CPFL Renováveis (Aug-11) 652

2Q12 25 Free market -

2Q12 70 Reserve auction Revenue(e): R$ 20 million/year

2Q12 155 PROINFA Acquisition price: R$ 1,062 million

3Q12 188 Reserve auction Revenue(e): R$ 115 million/year

4Q12 40 Auction and free market Acquisition price: R$ 111.5 million


4Q12 20 Alt. Sources auction Revenue(e): R$ 112 million/year

3Q13 50 Free market Revenue(e): R$ 22.6 million/year

4Q13 30 Reserve auction Revenue(e): R$ 18.5 million/year


1Q14 14 PROINFA Acquisition price: R$ 103.4 million

1Q14 120 Alt. Sources auction Revenue(e): R$ 76.7 million/year

2Q14 78 Alt. Sources auction Revenue(e): R$ 52.6 million/year

3Q14 278 - Partnership with Dobrevê

2Q15 29 Reserve Auction Revenue(e): R$ 17.9 million/year



Current portfolio 1,918

10

CPFL Renováveis | Track record1

Installed capacity of 1,918 MW

1) Updated until Aug 16,2016 2) Revenue estimated by the terms of the 16th LEN 2013

Commercial Start-up

2016-2020(e)

211 MWof installed capacity

110average-MW

of assured energy

1) Gradual commercial operation from 2Q16; 2) Gradual commercial operation from 1H18; 3) Constant Currency (Jun-16). 4) Until August 16, 2016

Campo dos Ventos and São Benedito Wind Farms

Pedra Cheirosa Wind Farms Boa Vista II SHPP

Commercial Start-up 20161 20182 2020

Installed Capacity 231.0 MW 48.3 MW 26.5 MW

Assured Energy 125.2 average-MW 26.1 average-MW 14.8 average-MW

PPA3 ACL 20 years18th LEN 2014

R$ 138.39/MWh until 2037

21st LEN 2015R$ 228.67/MWh

until 2049

FinancingBNDES

(approved)BNDES

(being structured)BNDES

(being structured)

11

Growth Projects: Generation | Greenfield projects

Commercial start-up of 45 wind turbines

(94.5 MW)4

3 GW pipeline

Foundation: 2006

Offers a wide range of value-added services:

engineering projects for transmission and distribution grids

equipment maintenance and recovery

self-generation grids

collection of utilities’ bills through an established authorized network

1212

Incorporation: 2008

Provision of customer relationship services to utility companies:

call center

face-to-face service

back office

credit recovery

ombudsman

help desk and sales

CPFL Energia – Trading & Services

, of which 342 special

customers (2Q16 vs 2Q15: 85%)

current ~ 2.1 GWavg

current ~ 12.4 GWavg

• New activities: and

2015- 197 transmission contracts

- 12 construction sites2015

- 11.2 million phone calls

- 2.4 million electronic phone calls

CPFL Energia Strategy

13

• Be a benchmark in sustainability

• Maintain the highest levels of Corporate Governance

• People management, promoting workplace safety and respect to diversity

• Be the leader in operating efficiency by investing in technology, automation and innovation

• Act on both institutional and regulatory fronts to ensure sustainability of the sector

• Focus on technical services, through technology and productivity

• Mitigate risks of services by hiring qualified labor and suppliers

• Maximize value in the Free Market and be recognized for its profitability

• Expand the presence in retail through acommercial front and customer energy management

• Add new products to energy Commercialization

• Grow while creating value through acquisitions and new projects

• Be the leader in operating efficiency in the Renewable Energy segment

• Operating Efficiency with Innovation & Technology

• Act in both institutional and regulatory levels

• Strategic Growth

Distribution Generation Renewable Commercialization Services

Dividends: CPFL has presented payout ratio close to 100% since its IPO, reaching the mark of R$ 11.6 billion distributed4

TSR5: -4.5%

14141) Considering proportional consolidation of generation assets (+) Regulatory assets and liabilities (-) Non-recurring effects (-) Construction revenue/cost. Disregard intercompany transactions. 2) Considering Holding’s EBITDA. 3) Including holding result and amortization of merged goodwill. 4) For 2015, a capital increase through stock dividend was approved in AGM; 5)TSR from Jun-11 to Jun-16 = Dividends 4.5% (+) Stock performance -6.9% = -2.4%.

NET REVENUE1 11,413 13,235 13,681 15,724 18,774 17,061 8.4% -9.1%

Distribution 9,794 10,830 10,716 12,011 15,431 13,736 7.0% -11.0%

Generation 1,351 1,964 2,356 3,164 2,787 2,693 14.8% -3.4%

Trading 1,699 2,031 2,023 2,430 2,093 2,183 5.1% 4.3%

EBITDA2 3,649 4,343 3,908 3,901 3,704 3,719 0.4% 0.4%

Distribution 2,351 2,655 2,211 1,985 1,681 1,736 -5.9% 3.3%

Generation 1,060 1,427 1,643 1,680 1,886 1,847 11.8% -2.0%

Trading 278 287 74 263 173 170 -9.4% -2.1%

NET INCOME3 1,503 1,617 1,304 1,162 1,061 1,118 -5.7% 5.4%

Distribution 1,235 1,356 1,047 867 762 804 -8.2% 5.5%

Generation 721 373 419 309 377 340 -13.9% -9.7%

Trading 164 127 52 168 108 95 -10.3% -12.3%

Key Financial Figures | R$ million

2011 2012 2013 2014 2015 LTM2Q16CAGR 2011 –LTM2Q16

LTM2Q16 vs. 2015

TOTAL 54.6 56.7 58.5 60.0 57.6 56.3 0.6% -2.2%

Captive 39.9 40.7 41.1 43.2 41.7 41.2 0.6% -1.3%

TUSD 14.7 16.0 17.3 16.8 15.8 15.1 0.6% -4.5%

Energy Sales - Distribution | TWh

CPFL Energia | Operational and Financial figures

15

Capex(e) 2016-2020 | R$ Million

1) Current investment plan released in 4Q15 Earnings Release on March 21, 2016. 2) Constant currency. Considers 100% interest on CPFL Renováveis and Ceran (IFRS); 3) Considers proportional stake in the generation projects; 4) Disregard investments in Special Obligations (among other items financed by consumers); 5) Conventional + Renewable.

Total:R$ 9,666 million2 (IFRS)R$ 8,704 million3 (Pro-forma)

Distribution4: R$ 7,033 million

Generation5:R$ 2,092 million (IFRS)R$ 1,130 million (Pro-forma)

Commercialization and ServicesR$ 541 million

1,427

2,813

1,9111,640 1,648 1,654

IFRS

Pro

-form

a

1,200

2,0951,719 1,604

1,639 1,647

3,835 3,755 3,971 3,584 3,577 3,764Adjusted EBITDA1,2

R$ Million

Current CVA balance is at the same level of 2014, improving the cash position and positively impacting our financial covenants

Nominal

Real

1) Financial covenants criteria; 2) LTM recurring EBITDA; 3) Adjusted by the proportional consolidation since 2012; 4) Financial debt (-) hedge

Leverage1 l R$ billion

Gross Debt Cost3,4 l LTM Gross Debt Breakdown by

Indexer | 2Q161,4

Adjusted Net Debt1

/Adjusted EBITDA2

CDI

Prefixed

TJLP

Indebtedness | Financial Covenants Management

16

Cash Short-Term 2017 2018 2019 2020 2020+

5,304

2,317

1,198

4,846

3,994

1,637

2,750

Debt Profile | On June 30, 2016

1) Considers Debt Principal, including hedge; 2) Financial covenant criteria; 3) Amortizarion from July-2016 to June-2017

Debt Amortization Schedule1,2 l Jun-16 | R$ million

3

Cash coverage:

2.29x Short termamortization (12M)

Average Tenor: 3.48 years

Short term (12M): 13.8% of total

17

Energy sector in Brazil: business segments

Consumers

1) Source: ANEEL – April, 2016; 2) Source: EPE and CCEE; 3) Source: ONS 4) Source: Ministry of Mines and Energy (MME) – Jun-16; 5) Jun-16

Free Market

Captive Market

80.0 million Consumers4

2,515 Consumers5

114 TWh of billed energy2

80.0 million Consumers4

346 TWh of billed energy2

Transmission

• 104 Companies³

• 131,906 km of transmission lines4

• Eletrobrás: ~52%of total assets

Distribution

• 63 Companies

• 460 TWh of billed energy2

• Top 5: ~45% of the market

Competitive Power Supply

Generation

• 147 GW of installed capacity1

• 81.80% Renewable energy1

• Eletrobrás: ~30.8% of total assets

19

Brazilian electricity matrix

1) Source: 10-year Energy Plan 2024; 2) Others: considers coal, oil, diesel and process gas; 3) Abeeólica.

Brazil’s electricity matrix is predominantly renewable, with hydro installed capacity totaling 68% of the

total supply, while biomass, wind, SHPPs and solar account for 16%. In the next years, it is expected that

other sources will grow, mainly wind and solar, reaching 12% and 3% respectively of total installed

capacity in 2024.

Brazilian Electricity Matrix

133 GW 206 GW

2014 2024

20

Wind Potential: 350GW3

Installed capacity: 3.8GW1%

SHPP Potential: 17.5GW Installed capacity: 5.0GW

29%

Biomass Potential: 17.2GW Installed capacity: 9.3GW

54%

Potential Realized

Potential to be Explored in Brazil

Evolution of Installed Capacity (GW) 2014-20241

21

Smart distribution was a key theme addressed by the Project

"Energy in the City of the Future"

• The smart grid technology will provide increased network monitoring capabilities and greater quality and commercial opportunities

• Smart Grids will boost the amount of information available, which will be used in innovative ways to optimize operations and services

Smart Grid | The Future of Distribution

Vision of the Future of Distribution is directly associated with Smart Grids:

22

Emergency Dispatch

The past:

The future:

System interventionor self-healing

Automatic failure detection Real-time informationfor customers

Intelligent meter

• Reduced unnecessary travel;

• Shorter average service;

• Reduced SAIDI (optimization of possibilities of network maneuvering);

• Greater customer satisfaction (real-time information);

• Optimization of service to nearly 600,000 tickets every year.

Gains

23

Reading and Delivery

Reading Energy bill Delivering the bill Payment

Making the paymentSmart Metering Center and/or automatized

software

Data networkIntelligent meters

Bill via e-mailand/or app

(cons. manag.)

The past:

The future:

• Greater employee safety (reduced travel and exposure to risk)

• Data gathering from load curve and customer consumption profile;

• More sustainable process (reduced use of paper).

Gains

Sustainability at CPFL: Incorporation of strategic guidelines

24

Energy is essential for

the welfare of people

and the development

of society.

We believe that

producing and using

energy in a

sustainable manner

is vital for the future of

humanity.

Vision

To provide

sustainable energy

solutions with

competitiveness and

excellence, acting in a

manner that is

integrated with the

community.

Mission

• Value Creation

Commitment

• Safety and Quality of

Life

• Austerity

• Sustainability

• Trust and Respect

• Overcoming

• Entrepreneurship

Principles

CPFL Energia is the

largest private group in

the Brazilian electricity

sector which, through

innovative strategies

and talented

professionals, offers

sustainable energy

solutions.

Positioning

CPFL Energia built its Sustainability Platform in 2013 in order to define the issues material to its growth strategy and the development of goals and indicators related to each of these issues at each business unit. The Platform consolidation process covered the company as a whole, meaning that sustainability is not just

an element of our principles and values but included in strategic planning.

Sustainability Platform

24

Actions

Raising awarenessabout the strategic relevance of the

Sustainability Platform

Establishing formal sustainability

targets for internal leaderships

Results - 2015

Integrated platform based on the

strategic plan, with 6 themes, 17 leverages, 91 indicators and short

and medium-term goals

Sustainability goals published on CPFL's

website

Officers and managers have

sustainability goals

Recognition

WelfareUntil 1999

Social Responsibility2000 to 2006

Corporate SustainabilityAdded to business from 2007

Level of incorporationof the theme Sustainability

Increasingly more comprehensive concept of responsibility

CPFL Energia | Sustainability

• Component of ISE since its first edition, in 2005

• 35 companies of 16 industries - Market cap of R$ 967 billion

• Component of DJSI Emerging Markets for the fourth consecutive year

• 86 companies achieved the Dow Jones requirements (17 Brazilian, of which 3 are in the power industry)

• Component of MSCI for the second consecutive year

• Formed by companies with the highest ESG standards in their industries

• Transparent reporting of greenhouse gas emissions since 2006

• Best company in Management of Water Resources in Latin America - 2015

• Component of ICO2 since 2016• 31 shares of 29 companies - Market cap of R$ 1.4 trillion

corporate presentation cpfl energia agosto 2016

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