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Fact Sheet 1Q14 Corporate Profile CPFL Energia is a publicly held holding company made up of companies in the distribution, generation and sales of electric power and value-added services segments. It is the largest privately-owned group in the Brazilian electric industry. With more than 100 years of history behind it and a strategic orientation aligned with society’s expectations, the Group is grounded in sound ethical principles that reflect its commitment to excellence and corporate sustainability. Its companies

are considered benchmarks of management, quality and operational efficiency. Following its Initial Public Offer (IPO) in September 2004, CPFL Energia became the first private sector company in Brazil to simultaneously trade its shares on Bovespa’s Novo Mercado (New Market) and the New York Stock Exchange (ADR Level III), which requires implementation of the highest standards of corporate governance.

Shareholders Structure (Date: 03/31/2014):

Notes: (1) 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.


COMMERCIALIZATION

Operations

1

HPP Luis Eduardo Magalhães

2

HPP Serra da Mesa

3

HPP Foz do Chapecó

4

HPP Campos Novos

5

HPP Barra Grande

6

7

8

9

10

11

12

Nect Serviços

Ceran Complex HPP Monte Claro HPP Castro Alves HPP 14 de Julho 9 SHPs 7 (SP), 2 (MG)

DISTRIBUTION

GENERATION

CPFL Geração

3 TPPs – Fuel Oil 2 (PB), 1 (SP)

35 SHPs 17 (SP), 8 (MG), 1 (MT), 5 (SC), 4(RS) 37 Wind Farms 12 (CE), 21 (RN) and 4 (RS) 8 Biomass 5 (SP), 1 (RN), 1 (MG) and 1 (PR) 1 Solar Plant (SP)

Dividends On May 08, 2014, dividends for the 2H13 were paid to holders of common shares traded on the BM&FBovespa – Bolsa de Valores, Mercadorias e Futuros S.A. (BM&FBOVESPA). The total declared amount was R$ 568 million, corresponding to R$ 0.590062200 per share. Adding the amount of R$ 363 million, related to the 1H13 (paid in October 2013), the total declared amount for the full year of 2013 was R$ 931 million, corresponding to R$ 0.967344326 per share. CPFL Energia has presented a payout ratio close to 95% since its IPO, respecting the constitution of the legal reserve of 5%. The 2H13 dividend yield, calculated on the average of the closing quotations in the period (R$ 19.80 per share) is 3.0% (4.8% in the last 12 months).

2

Dividends and Dividend Yield Dividend Yield 1 (last 12 months)

3.7%

6.5%

401

9.1%

498

8.7%

612

Declared Dividends 2 (R$ million) 9.6% 10.9% 722

842

9.7% 719

7.6% 602

7.3% 606

Average Closing Price3 CPFE3 (R$/ON) 7.6% 572

7.9% 655

8.6%

6.9% 6.0%

7.1%

748

758

774 486

6.1%

4.6%

456

140

2H04

1H05

2H05

1H06 15.02

8.29

9.43

11.67

2H06

14.13

1H07 15.87

2H07 17.99

1H08 18.05

2H08 16.69

1H09

2H09

15.77 16.51

1H10 2H10

1H11 2H11

20.18

22.05 21.95

18.44

3.9%

640

568

363

1H12 2H12 1H13 26.30 22.78 21.11

CPFL has distributed dividends around the entire net income since its IPO, reaching the mark of R$ 11.2 billion distributed. Declaration of dividend of 2H13: R$ 568 million | 0.59/share 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).

4.8%

2H13 19.80


Market Vendas totais de energia - GWh1 Sales by 1Consumer Class – 1Q14 Vendas totais de energia - GWh +4.1% Sales by Consumer Class – 1Q14

Note: Take into account +4.1% 15,000 CPFL’s stake in each 48514,408 15,000 conventional 485 generation +18.9% 408 asset. 1) Disregard CCEE 3,161 CPFL Renováveis2 3,586 -11.9% and sales to related parties. 3,161 CPFL Renováveis2 2) Take into account 58.8% Commercialization/ of CPFL Renováveis. 3) Take 3 Commercialization/ Conventional Generation +9.0% into account provision Conventional Generation3 +9.0% adjustment of -13 GWh in 10,414 11,355 Captive Market 1Q13. 11,355 10,414 Captive Market (Distribution) (Distribution) 1Q13 1Q14 1Q13 1Q14 14,408 408 +18.9% 3,586 -11.9%

28.8% Residential

(+1.6 p.p.) 28.8% Residential (+1.6 p.p.) 16.2% Commercial (+0.5 p.p.) 16.2% Commercial (+0.5 p.p.) 26.8% (-1.4 TUSD p.p.) 26.8% (-1.4 TUSD p.p.) 13.9% Industrial (-1.3 p.p.) 13.9% Industrial (-1.3 p.p.) 14.3% Others (+0.6 p.p.) 14.3% Others (+0.6 p.p.)

.

Financial Performance Net Revenue1 (R$ million) +6.2%

+8.2% 3,739

3,517

3,457

IFRS

EBITDA2 (R$ million) +0.5%

3,734

1,081

1,055 -25.4%

.

Net Income (R$ million)

1,086 405

787

Adjusted Income Statement3

Note: In parentheses, the variation in percentage points from 1Q13 to 1Q14.

429

-57.0%

-7.9%

396

174

1Q13

1Q14

1Q13

1Q14

1Q13

1Q14

1Q13

1Q14

1Q13

1Q14

1Q13

1Q14

Note: 1) Disregard construction revenues; 2) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization (3) Adjusted figures consider the regulatory assets and liabilities and exclude the non-recurring items, in addition to Generation and CPFL Renováveis Proportional Consolidation.

Adjusted Net Debt 10.0

12.6

12.2 10.0

Adjusted Net Debt 12.6 12.8

12.2

12.8

Net Debt (R$ billion)1

2.73

2.89

3.59 2.73

2.89 3.58

2011 2011

2012

2013

2012 1Q14

Adjusted Net 3.58 3.59 Debt/Adjusted EBITDA2 2013

Gross Debt 1) Financial covenants criteria. 2) LTM EBITDA (covenants criteria) Net Debt 7% Prefixed (R$ billion)1

Gross Debt Breakdown 1Q141 Breakdown 1Q141 3% IGP

7% Prefixed 3% IGP

1) Financial debt (+) private pension fund (-) hedge (considering IFRS criteria).

Adjusted Net Debt/Adjusted EBITDA2

1Q14

22% TJLP

68% CDI

22% TJLP 68% CDI

Stock market performance CPFE3 (R$) 1 In 03/31/2014

Maximum - 52 weeks Minimum - 52 weeks Total Stocks2 Mkt Cap - R$ billion Mkt Cap - US$ billion Exchange - PTAX Sale 1) With earnings adjustment 2) Date: Mar/2014

CPL (US$) 1

18.03 16.33 22.42 22.33 14.95 12.85 962,274,260 17.9 7.9 2.2630

Shares performance 1Q14 BM&FBovespa

NYSE

Source: Economatica

(with earnings adjustment)

-2.6%

-5.4%

-2.1%

CPFE3

IEE

IBOV

-0.4%

-0.3%

DJBr20

DJIA

1.1%

CPL

3


t Diretrizes de Governança Corporativa aplicáveis à CPFL Energia;

n

tCódigo de Ética e de Conduta Empresarial; t Política de Gestão Corporativa de Riscos e Norma de Avaliação de Controles Internos aprovadas pelo Conselho de Administração;

CorporateGovernance

P p

tPolíticas de Dividendos e de Negociação de Valores Mobiliários;

t3FMatório Anual em consenso com as diretrizes da Global Reporting Initiative (GRI); decontrols Administração CPFL Energia is recognized for its pioneering actions tConselho Internal of composto por sete membros, sendo um conselheiro and constant improvements to its governance independente; the Board of Directors, systems, based on the principles of transparency, fairness, accountability and corporate responsibility. The Company has been a member of the “Company Circle” since its creation in 2005, an organization that brings together corporations from a number of Latin American countries that demonstrate leadership in adopting the best corporate governance practices: Listing on the market segments that require the highest corporate governance practices — Novo Mercado of the BM&FBovespa and Level III ADRs of the NYSE; Certification of internal controls by the managers (CEO and CFO) and the independent auditors, pursuant to the Sarbanes Oxley Act (SOX); Board of Directors with seven members, one being independent; Fiscal Council with responsibilities of an Audit Committee, in compliance with SOX rules; Three Board of Directors Advisory Committees: Personnel Management, Related Parties and Management Procedures; Plan of Succession for the Board of Executive Officers and the CPFL Group’s main executives; Code of Ethics and Corporate Conduct; Corporate Governance Guidelines applicable to CPFL Energia and its subsidiaries; Dividends and Securities Trading Policies; Corporate Risk Management Policy and Standard Assessment of Internal Controls, approved by the Board of Directors;

the Fiscal Council and tConselho Fiscal com atribuições de Comitê de Auditoria em atendimento às regras da SOX; the Committees;

t TrêsAnnual ComitêsReport de Assessoramento ao Conselho de Administração (Gestão de Pessoas, Partes in accordance with the guidelines the Global Relacionadas e Processos deofGestão);

Reporting Initiative (GRI); t Autoavaliação anual dos membros do Conselho de Administração e do Conselho Fiscal; Whistle-blowing channels for receiving complaints and/or allegations concerning financial information and Code of Ethics violations (SOX); INVESTOR RELATIONS t Plano de Sucessão da Diretoria Executiva e dos principais Annual Self-Evaluation of the members of the Board executivos do Grupo CPFL;CPFL Energia of Directors and the Fiscal Council; Rodovia Engenheiro Board of Directors independentes ; members certified by the Brazilian Miguel Noel Nascentes Institute of Corporate Governance (IBGC); Burnier, 1.755, Km 2,5 tCanais de denúnciaofpara recebimento de reclamações e/ou denúncias relativas a Dissemination a General Shareholders’ Meetings CEP 13.088-900 | Participation Manual, with the possibility of designating Campinas, São Paulo proxieswithoutcosttorepresenttheminorityshareholders; t Listagem nos segmentos de mercado que requerem práticas mais avançadas de Tel: (19) 3756-6083 Corporate Governance Portal offering full access of governança (Novoof Mercado e ADRs nível III); Fax: (19) 3756-6089 informationcorporativa to the members the Board of Governors and Fiscal Council. www.cpfl.com.br/ir t de 30,7%; Anticorruption Policy applicable to CPFL Energia ri@cpfl.com.br t Manual para participação em Assembleias; and subsidiaries that signed the Code of Ethics; Integrated Reporting Pilot Program, which the t Portal de Governança; Company participates.

C

'

I I

.

P

1

P p

A

t Regras de funcionamento do Conselho de Administração, Comitês e Conselho Fiscal estabelecidas em Regimento Interno.

Rating AA+

Sustainability and *OGPSNBm{FTTPCSFBTBm{FT Corporate Responsibility 31/03/2011 The decisions taken by CPFL Energia in its businesses, operations and relaCPinto FE3 (R$) tionships are guided by a wide-ranging and systemic point of view that takes account economic, social and Preenvironmental ço por açãovariables as a whole. 46,39

Máxima semanas 46,39 It is the Company’s understanding that–in52 order to be sustainable and to guarantee, simultaneously, theMínima permanence of its businesses and the generation of 34,84 – 52 semanas value for stakeholders, the balance between these three factors must be pursued and based on ethics and transparency. Valor de mercado - R$ bilhões Visit the www.cpfl.com.br/energias-sustentaveis website and discover CPFL Energia’s Sustainability Platform, tool we use to monitor our Valora management de mercado - US$ bilhões progress. Número de ações2 Taxa de conversão3 1Sem ajuste por proventos

4

5

2Data base: 31/mar/2011

22,3 31,7

Perf

CPL (US$) 87,41 87,41 57,31

Bove

481.137.130 1,6287

N


CPFL FactSheet 1Q14