CPFL Energia : Apresentação de Resultados_1T19_ingles

1Q19 Results

© CPFL Energia 2019. All rights reserved.

Disclaimer

This presentation may contain statements that represent expectations about future events or results according to Brazilian and international securities regulators. These statements are based on certain assumptions and analyses made by the Company pursuant to its experience and the economic environment, market conditions and expected future events, many of which are beyond the Company's control. Important factors that could lead to significant differences between actual results and expectations about future events or results include the Company's business strategy, Brazilian and international economic conditions, technology, financial strategy, developments in the utilities industry, hydrological conditions, financial market conditions, uncertainty regarding the results of future operations, plans, objectives, expectations and intentions, among others. Considering these factors, the Company's actual results may differ materially from those indicated or implied in forward-looking statements about future events or results.

The information and opinions contained herein should not be construed as a recommendation to potential investors and no investment decision should be based on the truthfulness, timeliness or completeness of such information or opinions. None of the advisors to the company or parties related to them or their representatives shall be liable for any losses that may result from the use or contents of this presentation.

This material includes forward-looking statements subject to risks and uncertainties, which are based on current expectations and projections about future events and trends that may affect the Company's business.

These statements may include projections of economic growth, demand, energy supply, as well as information about its competitive position, the regulatory environment, potential growth opportunities and other matters. Many factors could adversely affect the estimates and assumptions on which these statements are based.

2

1Q19 Highlights

Increase of1.9% in load in the concession area(growths of residential and commercial classes)

EBITDAofR$ 1,531 million, growth of12.1%

Net IncomeofR$ 570 million, growth of36.0%

Net debt ofR$ 14.9 billion and leverage of2.70x Net Debt/EBITDA1

Investments ofR$ 445 million

CPFL Paulista's tariff adjustment, inApr-19:(i) increase of9.63% of the parcel B, from R$ 2,310 million to R$ 2,532 million, and

(ii) average effect of +8.66%to be perceived by the consumers

31) Financial covenants criteria.

1Q19 Highlights | EBITDA1

EBITDA, from R$ 1,366 MM in 1Q18 to

R$ 1,531 MM in 1Q19, increase of 12.1%

EBITDA by Segment | 2018

Commerc., Services & Others

Renewable4%

12%

Conv. Generation

20%Distribution

64%

Commerc., Services & Others| R$ million

+165.3%

Distribution| R$ million

+23.6%

1Q181Q19

Conventional Generation| R$ million

-6.5%

1Q181Q19

Renewable Generation| R$ million

-15.7%

1Q18

1Q19

1Q18

1Q19

41) EBITDA is calculated from the sum of net income, taxes, financial result, depreciation/amortization, as CVM Instruction no. 527/12.

1Q19 Energy Sales

Highlights

Increase in load1in the concession area (+1.9%)

Increase in sales2in the concession area (+3.2%)

Increases inResidential(+8.4%) and Commercial(+5.1%) classes, due to the effect of the temperature, mainly in the months of January and February

Losses:from 8.82%in 1Q18 and 9.03%in 4Q18 to 8.84%in 1Q19

Sales in the concession area| GWh

+3.2%

17,185 17,731

5,201 +2.3%5,323

11,983 +3.5%12,407

1Q181Q19

Free Client Captive

Market Breakdown in	Comparison by Region	Sales by consumption
the concession area |	| Sales in the conc.	segment | GWh
1Q19		area3
17%	32%
17%		+3.7%	+3.2%	17,185	432	(51)	149	16	17,731
34%					+8.4%	-0.9%	+5.1%	+0.5%	+3.2%
		+4.1%	+4.1%
Residential	Industrial	+4.9%	+1.0%	1Q18	Resid.	Indust.	Commerc.	Others	1Q19
Commercial	Others

1)Load net of losses; 2) If excluding the consumption of a large consumer of the steel industry, that migrate to the Basic Network, the sales in the concession area5would be: +3.8%, free client: +4.5%; and industrial class: +1.0%; 3) Region Sales Info (EPE)

Generation | Scenario

NIPS Reservoir Levels | %		Southeast Reservoir Levels | %
ONS projection for	May 6th, 2019	ONS projection for	May 6th, 2019
(current storage):	May 31st, 2019	(current storage):
May 31st, 2019
49.2%
		45.6%

53.9	48.6	50.9	53.9
	44.0		45.1	47.7
		43.1
			39.9	42.6
			32.0
32.4	33.9
30.8		29.4 31.3		29.8
		29.6
20.6			26.6		27.6
		16.8
			1		1
PLD (SE/CW) Evolution	GSF - Projection
				The MRE adjustment factor verified in March was 1.367
				The outlook is that hydraulic generation will be below the physical
				guarantee from May on.

2

61) Period from 1997 to 2018; 2) BE - PLDMay-19

1Q19 Results

Net Revenue	EBITDA	Net Income
	11.8%		12.1%		36.0%
R$ 753 million	R$ 165 million	R$ 151 million
1Q18	1Q19	1Q18	1Q19	1Q18	1Q19
R$ 6,375	R$ 7,127	R$ 1,366	R$ 1,531	R$ 419	R$ 570
million	million	million	million	million	million

Main EffectsKey FactorsObserved	EBITDA:

EBITDA:

Distribution: total var. of +R$ 187 MM

•Market/tariff (+R$ 213 MM)

•PIS/COFINS recoverable (+R$ 34 MM)

•PMSO1(-R$ 78 MM):

ADA(-R$ 42 MM)

Legal and judicial expenses(-R$ 20 MM)

Renewable Generation: total var. of -R$ 36 MM

•PPA seasonal., net of secondary energy(-R$ 28 MM)

•Lower wind farms generation(-R$ 25 MM)

•Start-upof Boa Vista II SHPP - increase of energy available that was settled on the CCEE (+R$ 13 MM)

Commerc., Serv. & Others: total var. of +R$ 35 MM

•Commercialization: margin gain (+R$ 23 MM)

•Services: margin gain (+R$ 13 MM)

Conventional Generation: total var. of -R$ 21 MM

•GSF - BAESA - Compensation agreement related to 2018(-R$ 17 MM)

•EPASA overhaul(-R$ 10 MM)

•Inflation effect over the contracts (+11 MM)

Net Income:

Financial Result: total var. of +R$ 87 MM

•Debt charges2- mainly due to the reduction in the indebtedness (+R$ 56 MM)

•MTM (+R$ 33 MM)

71) Includes Private Pension Fund; 2) Net of income from financial investments, including sectoral financial assets and liabilities.

Indebtedness

Leverage lFinancial covenants criteria | R$ billion

				14.5	16.3	14.9
	13.0	12.2	13.2
	3.49	3,41	3.21
		3.20
Adjusted Net Debt1			3.05
/Adjusted EBITDA2						2.70
	2014	2015	2016	2017	2018	1Q19
Adjusted EBITDA1,2	3,736	3,584	4,117	4,531	5,342	5,481
R$ Million

Gross debt cost3lIFRS | end of period

Nominal

Real

		13.2%	13.5%
10.8%
				6.8%	8.0%	7.5%	7.6%
4.1%	2.3%			4.9%	3.6%
						2.9%
2014	2015	2016	2017	2018		1Q19

Gross debt breakdown by indexer3| IFRS | 1Q19

8	1) LTM EBITDA; 2) Adjusted by the proportional consolidation; 3) Financial debt (-) hedge.

© CPFL Energia 2019. All rights reserved.