#1CFE Comisión Federal de ElectricidadⓇ Investor Presentation Results as of June 30, 2018 Conference Call Friday, July 27th, 2018#2CFE Comisión Federal de ElectricidadⓇ Disclaimer The information contained in this presentation (the "information") has been prepared by Comisión Federal de Electricidad ("CFE" or "the company") and may contain forward-looking statements on the future performance of the company, economic, general industry information that reflect CFE's expectations and/or projections. These expectations and/or projections can also be made in oral or written form during this presentation, in the ensuing questions and answers session, during individual discussions, in press releases and statements to the media, and in other kinds of written or recorded materials, as well as in oral statements made by our officers, directors or employees to third parties. These expectations and/or projections may differ substantially from future events. Furthermore, CFE and its officers, directors and employees bear no responsibility or obligation whatsoever regarding the veracity, accuracy or deviation of the information set forth in this presentation versus other information provided, published, or otherwise made available by the company, its officers, directors, and employees, or from any other source, to the general public or to an individual party. The information hereby presented is provided with informative purposes solely, must not be considered part of a binding obligation for CFE to conduct any present, future, or potential transaction of any form or kind, and shall not be deemed as any sort of investment, partnership, association, securities purchase, legal, accounting, financial or economic recommendation whatsoever. No independent third party has revised or provided an opinion on the historical data, value, or performance of the company offered in this presentation. All information speaks only as of its relevant dates, and CFE undertakes no obligation to update or revise any of it, whether as a result of new information, present, potential, or future events, or otherwise. For more relevant information on CFE, the company encourages the access of the Internet sites of Bolsa Mexicana de Valores, S. A. B. de C. V. (www.bmv.com.mx) and Comisión Nacional Bancaria y de Valores (www.cnbv.gob.mx), as well as its own site at www.cfe.mx This presentation is not an offer to sell any securities and is not soliciting an offer to buy any securities.#3CFE Comisión Federal de ElectricidadⓇ CFE Key Highlights in 2Q 2018 2Q 2018 Gross Margin was 14.4 billion pesos. Net Loss in 2Q 2018 was 28.5 billion pesos. Equity reached 574.7 billion pesos. We have increased our customers base to 42.8 million from 42.2 million accounts in December 2017, reaching 98.65% of the Mexican population. In 2Q 2018, average price for kWh was $1.518 MXN, a 9% reduction from the $1.669 MXN per kWh in 2Q 2017. Source: CFE. CFE 3#4CFE Comisión Federal de ElectricidadⓇ CFE Total Assets: MXN 1,531.9 billion CFE at a Glance 2Q 2018 Current Assets: MXN 150 billion Total Revenue: MXN 124.3 billion Equity: MXN 574.7 billion Net Loss: MXN 28.5 billion Generation Capacity: 55,240 MW Transmission Network: 107,422 km Distribution Network: 834,454 km Customer Accounts: 42.8 million Electricity System Generation: 62.6 TWh / Total Electricity Sold (1): 55.5 TWh CFE generates 87% (2) of the electricity in Mexico and provides power to 98.65% of the population. 2Q 2018 Growth vs. 2Q 2017(3) Total Electricity Sold: +2.0% Customer Accounts: +4.9% Subsidy: +6% Sale of fuels to third parties: +MXN 9.9 billion (1) Electricity sold by CFE Basic Supply and CFE Qualified Supply. Includes Independent Power Producers (IPPs). (2) Includes Independent Power Producers (IPPs) (3) Compares Q2 2018 to Q2 2017. Source: CFE and CFE Transmisión 4#5CFE Growing Customer Base Comisión Federal de ElectricidadⓇ Customer Accounts (millions) As of June 30, our customers base is of 42.8 million accounts, an increase of 300,000 accounts from 4Q2017. 34.4 40.8 42.2 42.5 42.8 2010 2016 2017 1Q2018 2Q2018 5 Source: CFE.#6CFE Installed Capacity over the years Comisión Federal de ElectricidadⓇ Installed Capacity (MW) During 2Q2018, our installed capacity remained at 55,240 MW, after the closure during the first quarter of 4 obsolete units at the Cerro Prieto power plant. Source: CFE. 51,611 55,564 55,891 55,240 2010 2016 2017 2Q2018 6#7CFE Comisión Federal de ElectricidadⓇ Diverse Generation Portfolio CFE's Transition Towards Cleaner Generation of Electricity From 2012 to 2018, electricity generated with clean technologies increased by 4%, reaching 21.6% of our total generation in 2Q 2018. 6.9% 2012 0.4% 17.6% 24.2% 31.7% 19.2% 12.6% 2Q 2018 3.2% 15.9% 21.6% 28.2% 18.5% ■ Total Clean Technologies ■Combined Cycle (IPPs)* ■ Combined Cycle (CFE) ■ Coal ■ Conventional Vapor ■ Other Total Clean Generation includes hydroelectric, nuclear, geothermal, wind, and photovoltaic generation. *Independent Power Producers Source: CFE. 7#8CFE Comisión Federal de ElectricidadⓇ Relevant Events & Announcements Transmission Line Auctions CFE: Oaxaca High Voltage Direct Current (HVDC) line of 610km and 3,000MW capacity Five Q&A sessions have taken place, during which potential participants asked over 2,000 questions regarding technical, economic and legal issues. Transparencia Mexicana (anti- corruption NGO) has participated in the process as a Social Witness. CFE expects to receive bidding offers in August and the award and signing of the contract is scheduled for September. SENER*: Baja California and National Grid Interconnection HVDC line of 700km and 1,500MW capacity In total, 109 companies expressed interest and 22 participants have registered. Registration of pre-qualified participants ends on August 3rd. Reception of technical and economic proposals is scheduled for September 14th. Results will be published during the month of September, and the signing of the contract is scheduled for November 16th. CFE is evaluating its participation in this bidding process. *SENER: Secretaría de Energía, or Ministry of Energy. Source: CFE. 8#9CFE Comisión Federal de ElectricidadⓇ Relevant Events & Announcements Fourth Long-Term Auction Products: Capacity, Electricity & Clean Energy Certificates On March 28th, the Fourth Long-Term Auction was announced by the Ministry of Energy (SENER) and the Energy Regulatory Commission (CRE). As of today, CENACE has carried out two Q&A sessions for potential participants. Based on past auction results, CRE is expecting a high participation level. Due to the foregoing, on June 20th, it issued a statement notifying that it would not include a cap price for the products which will be offered. On July 12th, CFE Suministrador de Servicios Básicos delivered its purchase offer to CENACE, which included both price and quantity for each product and regional grid (National Interconnected System, Baja California Interconnected System and Baja California Sur Interconnected System). The offers will be evaluated during October by the CRE. Winning bidders will be announced on November 2nd, and contracts shall be signed by February 15th, 2019. Source: SENER. 6#10CFE Comisión Federal de ElectricidadⓇ 2018-2022 Business Plan on Track Source: CFE. CFE's Business Plan, defines this year as part of a consolidation stage for the transformation of the company. The key steps for 2018 and their progress as of June 30 are as follows: ➤ Continue monitoring the development of gas pipelines to secure their prompt start of operation. CFE has transportation capacity agreements with 25 new gas pipelines, 15 of which are already operating. Use of alternative financing schemes, such as Fibra E, for essential investments and to support the company's financial sustainability. Keep developing a robust capital budgeting process amongst CFE's Subsidiaries, Affiliates and Business Units. Coordinate with the Ministry of Energy (SENER) and the Ministry of Finance (SHCP) to match capital availability with instructed infrastructure investments, as established in PRODESEN. The Business Plan considers 327 billion pesos for investments between 2018 and 2022. Of the 43.5 billion pesos for 2018, 14.1 billion have been allocated. 10#11CFE Comisión Federal de ElectricidadⓇ Financial Highlights Sales Volume (GWh) and Average Prices (MXN$/kWh) 986 1.0% 1.098 2.0% 242.3 102,923 55,450 101,937 54,352 1.69 1.67 1.52 1.48 Total Revenues (MXN$Billion) -24.9 -10.3% 217.4 114.1 10.2 9.0% 124.3 1H 2017 1H 2018 2Q 2017 2Q 2018 1H 2017 1H 2018 2Q 2017 2Q 2018 73.8 -53.2 -72.1% 1H 2017 Gross Margin (MXN$Billion) 20.6 23.8 -9.4 -39.5% 14.4 1H 2018 2Q 2017 2Q 2018 *Adjusted by labor benefits Source: CFE. EBITDA* (MXN$Billion) -27.2 -125% -12.9 -113% 11.5 21.7 -5.4 -1.5 2Q 2017 2Q 2018 1H 2017 1H 2018 11#12CFE Comisión Federal de ElectricidadⓇ Debt Balance as of June 30, 2018: MXN $353 billion pesos 44.7 332.5 Debt Overview* 3.4 353.0 27.5 Outstanding debt as of 12/31/2017 New debt Payments Exchange rate fluctuations Outstanding debt as of 06/30/2018 Debt Maturity Profile, as of June 30, 2018 (Billion pesos) 42.4 MOODY'S Baa1 STABLE STANDARD & POOR'S RAINES SERVICES BBB+ STABLE Fitch Ratings BBB+ STABLE ■Pidirega ■Documented 25.8 22.8 34.7 22 37.1 25 34.0 28.0 24.5 38 21.8 18.5 millali.lian 14 8 19.0 25 10.3 9 21 16.3 11.9 21 15 14 6.0 16 15 11 13 12 12 10 10 9 7 6 7 4 4 4 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029-2033 2034-2038 2039-2043 2044-2048 * Excludes Independent Power Producers (IPP's) Source: CFE. 12#13CFE Comisión Federal de ElectricidadⓇ Hedged Unhedged Debt by Currency Domestic 47.2% Domestic 79.1% Disciplined Financial Risk Management 52.8% Foreign Foreign* 20.9% Debt by Interest Rate Fixed rate 70.5% 76.3% Fixed rate *After hedging, 98.4% of the outstanding debt in foregin currency is denominated in US dollars. Source: CFE. Floating rate 29.5% Floating rate 23.7% 13#14CFE Comisión Federal de ElectricidadⓇ 1 Recent Debt Transactions CEBURES: On May 31, 2018, CFE issued 15.3 billion pesos in Certificados Bursátiles (CEBURES) in three tranches: Maturity Rate Coupon rate Amount (MXN billion) 3 years Floating rate TIIE*+30 bps 4.7 10 years Fixed nominal rate 8.18% 2.6 15 years Fixed real rate UDI +100 bps (4.54%) 8.1 CFE reduced the spread of reference in comparison with the previous transaction Proceeds were used for working capital needs. 2 LOAN CREDIT FACILITY: On April 17, CFE signed a Loan Agreement for MXN 4.5 billion (equivalent to USD 250 million) 3 To finance related Financed Public Works projects (PIDIREGAS) SENIOR UNSECURED BONDS: On June 15, CFE issued a 20 year senior unsecured amortizing bond for USD $150 million. To finance related Financed Public Works projects (PIDIREGAS) TIIE: Equilibrium Interbank Interest Rate. Source: CFE. 14#15CFE Comisión Federal de ElectricidadⓇ FIBRA E Since its inception in February 2018, the Fibra E has completed all the operational functions and the corporate governance activities have been fully carried out. One of the most important events was the first distribution of the Promoted Trust on June 15, and two weeks later, on June 29, CFECapital carried out the first quarterly distribution of CFE's Fibra E. First Distribution Certificate Series Number of Certificates Distribution "A" FCFE18 "B" FCFE18-2 853,195,411 584 284,398,470 145 • The total amount distributed was 728.7 million pesos. . The distribution corresponds to the period between February 12, 2018 and May 31, 2018. • The next distribution will take place in September of this year. Source: CFE| CFECapital http://cfecapital.com.mx/ 15#16USD million USD million CFE Comisión Federal de ElectricidadⓇ For 2018, CFE requires up to an additional USD 964 million for PIDIREGAS projects and working capital needs PIDIREGAS Financing 6,971 (-) Total 566 Maturities and (+) amortizations Outstanding Working Capital Financing This could increase if more STRATEGY infrastructure projects finalize 1,950 during 2018 562 Privilege long-term credit lines with commercial banks, export credit agencies and development banks. international 1,338 Financial needs 2018 10,633 STRATEGY 1,869 > We could access to local or international markets if conditions are convenient to CFE 402* (-) 720 (+) 1,467 Maturities and amortizations Total Outstanding * Taking into account that a revolving credit facility is in the process of being refinanced for USD 1.26 billion, financing needs have been covered. Figures as of June 2018. FX rate 18.60 Financial needs 2018 Source: CFE 16#17CFE Comisión Federal de ElectricidadⓇ Key Financial Results 2Q 2018 + II Total Revenue MXN $124.3 billion Total Costs MXN $152.8 billion Total revenue was MXN $124.3 billion in 2Q 2018, a 9% increase as compared to 2Q 2017. Electricity Sales were MXN $ 85.7 billion, a decrease of 8% from 2Q 2017, attributable to lower tariffs which are established by CRE and will be adjusted in July, compensating the first semester loss during the remainder of the year. Revenue from sale of fuels to third parties amounted to MXN $11.3 billion. The cost of operation reached MXN $132.9 billion, a 15% increase with respect to 2Q 2017, due mainly to higher cost of fuels. Fuel costs were MXN $80.4 billion, an increase of 8% from 2Q 2017 due to higher prices. Net Loss MXN $28.5 billion The net result is a MXN $28.5 billion loss, due to lower energy sales attributable to lower CRE established tariffs in conjunction with higher fuel costs. Source: CFE. Total Assets MXN $1,531.9 billion Total Liabilities MXN $957.2 billion Equity MXN $574.7 billion 17#18CFE Comisión Federal de ElectricidadⓇ Total Revenues 242.3 (MXN $billion) | 10.3% 217.4 39.4 13.0 8.9% 124.3 114.1 12.5 6.5 21.5 23.6 0.3 2.3 13.7 12.9 1.4 21.1 0.3 11.3 1.3 1.2 178.8 158.5 1H 2017 1H 2018 93.0 2Q 2017 85.7 2Q 2018 ■ Energy sales ■ Energy transportation revenue ■Fuel sales to third parties ■Subsidy income Other income Total revenues for 1H 2018 decreased by 10.3% with respect to 1H 2017, mainly due to lower electricity rates Total revenues for 2Q 2018 increased by 8.9% with respect to 2Q 2017, mainly due to higher income from fuel sales to third parties Source: CFE. 18#19CFE Comisión Federal de ElectricidadⓇ 168.5 1.5 8.6 Costs 196.8 1.4 (MXN $billion) | 16.8% 9.1 31.1 16.7 29.7 1.9 137.1 125.5 1H 2017 1H 2018 90.3 10 0.7 1.9 1.2 ■Fuels ■Fuels to third parties Salaries 109.9 21.8% 4.4 0.5 15.0 9.0 13.9 80.4 74.7 2Q 2017 ■Maintenance 2Q 2018 ■Taxes The costs for 1H 2018 increased by 16.8% with respect to 1H 2017 The costs for 2Q 2018 increased by 21.8% with respect to 2Q 2017 Source: CFE. 19#20CFE Comisión Federal de ElectricidadⓇ Net (Loss) Income Evolution (MXN million) 2Q 2018 vs 2Q 2017 (381) Net loss 2Q 2017 2,061 798 7,332 6,505 6,833 1,048 5,671 | 24,956 Subsidy increase Gain from Fuel | sales to third parties Decrease in income from electricity sales Increase from other income Decrease in labor obligation cost Increase in energy costs (excluding third party sales) Salaries and related costs increase Increase in financial cost I 3,987 35,951 2,061 Net income Subsidy increase 1H 2017 Gain from fuel sales to third parties 20,330 1H 2018 vs 1H 2017 9,430 25,396 | | | | Decrease in income from electricity sales Decrease from other income Decrease in labor obligation cost 11,643 1,433 5,266 Increase in other costs (28,458) Net loss 2Q 2018 and expenses 27,577 4,914 Increase in energy costs (excluding third party sales) Salaries and related costs increase Increase in I Increase in financial cost other costs and expenses (39,864) Net Loss 1H 2018 20#21CFE Comisión Federal de ElectricidadⓇ INCOME STATEMENT COMISIÓN FEDERAL DE ELECTRICIDAD UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Millions of Mexican pesos) 2nd Quarter 2018 % 2017, with IFRS effect 2018 VS % 2017 Accumulated jun-18 % jun-17 with IFRS effect % 2018 vs 2017 $124,335 100% $85,655 69% 114,126 92,986 100% 9% Revenues 81% -8% Electricity supply service revenue $217,449 $158,499 $1,162 1% 341 0% 240% Energy transportation revenue $11,318 9% 1,408 1% 704% Fuel sale revenue $13,685 11% $12,515 10% $109,935 88% $80,361 65% $9,002 12,887 11% 6% Subsidy revenue $14,995 12% $4,428 4% 1,153 13,947 6,503 $90,278 74,689 65% 1% 12% 6% 79% 92% Other income, net 22% Costs 8% Energy and fuel supplies 681% Third party energy and fuel supplies 8% Salaries and related costs 100% 73% $1,322 1% $21,068 10% $23,571 11% $12,989 6% $196,823 91% $137,138 63% $16,729 8% $31,126 14% $242,314 $178,830 100% -10% 74% -11% $341 0% 287% $2,267 1% 829% $21,510 9% 10% $39,365 16% -67% $168,539 70% 17% $125,494 52% 9% $1,915 1% 774% $29,693 12% 5% 1,911 2% $506 0% 738 $644 1% (2,161) 1% -2% 132% Maintenance, materials and general services -31% Tax and duties $9,132 4% $8,632 4% 6% $1,412 1% $1,528 1% -8% -130% Wholesale Electrical Market costs (MEM) $1,287 1% $1,277 1% 1% INCOME BEFORE OTHER OPERATING COSTS $14,399 12% 23,848 21% -40% (GROSS MARGIN) $23,935 19% 26,575 23% $2,972 2% 9,476 8% $15,180 12% 14,271 13% $5,783 5% 2,828 2% -10% Other Operating Costs -69% Labor obligation cost 6% Depreciation 104% Other expenses $20,626 $51,395 24% $14,472 7% $29,222 13% $7,701 4% 9% $73,775 30% -72% $54,128 22% -5% $23,902 10% -39% $26,089 11% 12% $4,137 2% 86% ($9,535) -8% (2,727) -2% 250% OPERATING RESULTS -14% $19,647 8% -257% $22,326 18% (2,630) -2% -949% Financing Costs (30,769) $10,987 5% ($16,590) -7% -166% ($4,115) -3% $26,441 21% 10,091 9% -141% Net financial (income) / cost (12,721) -11% -308% Exchange rate (gain) loss ($31,862) -26% (96) 0% 32931% (LOSS) INCOME BEOFRE INCOME TAXES ($3,403) -3% ($28,458) -23% 284 0% Taxes ($381) 0% 7374% NET RESULTS $6,541 $4,446 2% ($41,756) -19% ($1,892) -1% ($39,864) -18% 3% $22,846 9% -71% ($39,437) -16% -111% $36,237 15% -215% $286 $35,951 0% 15% -211% 21 21#22CFE Comisión Federal de Electricidad STATEMENT OF FINANCIAL POSITION COMISIÓN FEDERAL DE ELECTRICIDAD UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Millions of Mexican pesos) Current assets Cash and cash equivalents ASSETS Accounts receivable Taxes receivable Inventory of materials for operation Loans to employees Plants, facilities and equipment Derivative financial instruments Intangible assets Deferred income tax TOTAL ASSETS LIABILITIES June 2018 % December 2017 % 2018 vs 2017 $150,058 10% 37,358 2% 88,192 6% 13,333 1% 11,175 1% $167,213 11% 67,238 4% 82,861 5% 2,471 14,643 1% -10% -44% 6% 0% 440% -24% 11,798 1% 12,339 1% -4% 1,241,693 81% 1,252,938 80% -1% 12,631 1% 16,085 1% -21% 33,789 2% 32,837 2% 3% 81,908 5% 76,868 5% 7% $1,531,876 100% $1,558,280 100% -2% Current liabilities $151,849 10% Current installments of long-term debt and obligations 46,046 3% Other payable and accrued liabilities 103,379 7% $169,723 11% 56,620 4% 107,798 7% -11% -19% -4% Taxes and duties payable Non-current liabilities Long-term debt Long-term employee benefits 2,425 0% 5,305 1% -54% $805,302 53% $786,362 50% +2% $430,433 28% $401,157 26% +7% 357,895 23% 361,780 23% -1% Other long-term liabilities TOTAL LIABILITIES 16,974 1% 23,425 2% -28% $957,151 62% $956,085 61% 0% EQUITY $574,725 38% $602,196 39% -5% Contributions received from the Federal Government 5 0% 5 0% 0% Contributions in kind from the Federal Government Accumulated results Other comprehensive income 95,004 6% 95,004 6% 0% 50,542 3% Non-controlling interest LIABILITIES + EQUITY 414,419 27% 14,755 $1,531,876 1% 100% $1,558,280 90,406 6% 416,780 27% 0 0% 100% -44% -1% 100% -2% 22 22#23CFE Comisión Federal de ElectricidadⓇ Contact information Investor Relations [email protected]