institucional 3 q13 novo padrão eng-final

INSTITUTIONAL

PRESENTATION

November, 2013

2

Agenda

►Financial Performance

►Portfolio Overview

►Value Creation

►Company Profile

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►Value Creation

►Company Profile

Agenda

4

Equatorial Overview

� Holding company with investments in the energy sector, focused on distribution and

generation

� Differentiated experience in operating and financial restructuring of companies in the

Brazilian energy sector

� Sponsored by PCP Fund, investment vehicle owned by former partners of Banco Pactual

and managed by Vinci Partners.

� Current investments:

• Distribution company in the State of

Maranhão

• 2nd largest distribution company in

the Northeast of Brazil, in terms of

concession area*

• 4th largest distribution company in

the Northeast of Brazil, in terms of

billed energy*

• Annual gross revenues of R$3.0

billion in 2012.

• Company responsible for

implementing and operating the

Tocantinópolis and Nova Olinda

thermoelectric plants in the State of

Maranhão

• Fuel: high-viscosity heavy oil.

• Joint installed capacity of 331 MW

• 240 MW of energy sold at the A-3

auction in 2007.

• Start-up: January 2010

*Source: ABRADEE

• Electricity trading company and

developer of new products and

services

• Broker the purchase and sale

of energy without physical delivery

• Custom of solutions to

satisfy consumers’ specific

needs (consumers and

generators)

• Experienced executives and well-

recognized in the trading market

PA MA

CELPA

• Distribution company in the

State of Pará.

• Annual gross revenues of R$3.3

billion in 2012.

Aug. 2011

Equatorial acquires 51% of

Sol Energias,

energy trader

CEMAR’s acquistion

PCP Fund acquires a controlling stake of

Equatorial

Equatorial’s IPO

Control concentratedin PCP Fund

Incorporation of a controlling stake of

Light

Equatorial migrates to“Novo Mercado”

Acquisition of 25% of Geramar

FIP PCP sells its indirect stake in

Light

Equatorial’s Spin Off

Equatorial’s History

May. 2004 Mar. 2006 Abr. 2008 Out. 2008 Abr. 2010 Ago. 2011Apr. 2006 Dec. 2007 Feb. 2008 Abr. 2008 Oct. 2008 Dec. 2009 Apr. 2010 Aug. 2011 Feb. 2012

Equatorial acquires 50% of

Vila Velha

Termoelétricas, a

pre-operationalcompany

Nov. 2012

Equatorial acquires 63.1% of

CELPA, energy

distributorcompany

Dec. 2012

Equatorial’s Follow On

6

Ownership Structure – Current

• Total no. of shares:

• Share price**:

• Free float:

• ADTV90:

198,447,352

R$ 22.85

77.1% / R$3,494 MM

R$ 16.433 MM

**On 30/09/13ADTV90 represents the average volume traded in the past 90 days

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Corporate Strategy

CEMAR � Increased returns through outstanding financial andoperating performance

Consolidation ofdistributors in Brazil and

Latin America

� Acquistion of full or shared control

� Added value through financial and operational restructuring, synergygains and loss reduction

Geramar and otherinvestments in generation

� Brazil’s investment needs in generation over the next few years will creategrowth opportunities for Equatorial.

� Geramar thermal plants present an above average rate of return

Celpa � Increased returns through operational and financial turnaround strategy

Felipe Borges

Officer

• Officer of Equatorial since January 2013.

• Previously worked (2009-2012) at Banco Original Bank as Chief Legal Officer. From 1999 to 2011 worked at law offices such as Ulhôa Canto Advogados, from 2004 to 2007 at Mattos Filho Advogados and, from 2001 to 2003, at Velloza Advogados performing multiple functions.

• Degree in Law at University of São Paulo (USP) and Master’s degree in Tax Law at PUC-SP since 2007.

Management

Management is composed by professionals with substantial experience in the financial, operational and regulatory areas

Carlos Piani

Chairman of the

Board of Directors

• CEO of Equatorial from March, 2007 until April, 2010. CFO of CEMAR (2004-2006) and CEO of CEMAR (2007-2010). Currently, he is a partner of Vinci Partners.

• Worked for 6 years at Banco Pactual in the Principal Investments and Corporate Finance divisions

• Degree in Computer Science at PUC-RJ and in Business Administration at IBMEC. CFA chartered by CFA Institute in 2003. Concluded the Owner andPresident Management Program of Harvard Business School in 2008

Firmino Sampaio

CEO

• CEO of Eletrobrás (1996-2001), CEO and CFO of COELBA (1984-1996)

• Former member of the boards of directors of Furnas, Itaipu Binacional, CHESF, Eletrosul, Gerasul, CEMIG, ENERSUL, CEMAT and Light

• Degree in Economics at the Federal University of Bahia and postgraduate degree in Industrial Planning at SUDENE/IPEA/FGV

Eduardo Haiama

CFO & IRO

Tinn Amado

Regulatory AffairsOfficer

• CFO and IRO of Equatorial since 2008. IRO of CEMAR since 2008.

• Between 2004 and 2008, Mr. Haiama worked at Banco UBS Pactual on the equities’ research team as senior analyst of the utilities segment.

• Degree in Electric Engineering at USP – University of São Paulo (Escola Politécnica) and MBA at Duke University. CFA chartered by CFA Institute in 2004

• Regulatory Affairs Officer of Equatorial since April 2008 and of CEMAR since August 2006

• Consulting partner of Amado Consultoria, providing advisory services in economic regulation, also worked at ANEEL for 3 years as an analyst for the Distribution Service Regulation Department

• Degree in Electrical Engineering at the Federal University of Itajubá (UNIFEI) and a Master’s degree in Regulation and Protection of Fair Trading at Brasília University (UnB)

Ana Marta Horta Veloso

Officer

• Officer of Equatorial since November 2008.

• Worked as an executive at Banco UBS Pactual S.A., from 2006 untill 2008 . Before joining Pactual, she worked for 12 years at the Brazilian Development

Bank (BNDES), where she held several executive positions, mostly in the capital market area.

• Degree in Economics at the Federal University of Minas Gerais (UFMG) and Master’s degree in Industrial Economics at the Federal University of Rio de Janeiro (UFRJ).

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Vinci Partners

PRIVATE EQUITY PUBLIC EQUITIES MULTIMARKET

• In 2001, Banco Pactual created a Principal Investment Unit to manage the partnership’s excess capital and diversify its investments;

• In 2006, with the sale of Banco Pactual to UBS, part of the proceeds from the sale was reinvested in the Principal Investment Unit, which was renamed PCP;

• In 2009, with the sale of Pactual to BTG, Vinci Partners was created, an independent asset management, composed by Pactual’s ex-partners;

• Today, Vinci has almost US$ 3.0 billion under management (75% own capital), investing in Private Equity, Public Equities and Multimarket Funds.

History

PCP Fund

LONG TERM MEDIUM TERM SHORT TERM

10

Agenda



►Value Creation

►Company Profile

11

Since 2004, Equatorial has been presenting an excellent financial performance.

Net Operating RevenuesR$ million

EBITDA (R$ million)

Financial Performance

(*) As from 2010, all values are according to IFRS(**) In 2012, CELPA’s consolidation started as from November.

2004 2005 2006 2007 2008 2009 2010 (*) 2011 2012 9M13

Net Revenue 526 629 810 879 2,346 2,506 1,799 1,981 2,987 3,386

EBITDA 85 189 341 379 784 757 510 504 567 455

% EBITDA 16% 30% 42% 43% 33% 30% 28% 25% 19% 13%

12

Distributions to Shareholders/Net IncomeR$ million


* 2008 figure includes R$82 million in Capital Reduction

2004 2005 2006 2007 2008 2009 2010 2011 2012

Payout 0% 24% 90% 99% 95% 25% 104% 32% 24%

Dividend Yield N/A N/A 10% 13% 27% 3% 18% 4% 2%

2004 2005 2006 2007 2008 2009 2010 2011 2012 9M13

Consolidated Dividends (R$ MM) - 54 108 151 284 51 197 50 37 -

CEMAR - 54 108 112 91 58 200 94 76 -

Light - - - 27 111 56 - - - -

Capital Reduction (holding) - - - - 82 - - - - -

Net Income (R$ MM) 123 229 119 153 300 207 189 160 141 131

CEMAR (31) 234 116 117 148 129 279 248 385 155

Celpa - - - - - - - - (160) (53)

Geramar - - - - - - 6 11 18 -

Equatorial Soluções - - - - - - - - 3 3

Light - - - - 130 79 - - - -

The Consolidated div idends incorporate 100% of CEMAR

13

Consolidated Net Debt and Net Debt/EBITDA (*)R$ million / Times

Improved operating performance and financial restructuring led to a significant reduction in leverage,


(*) Consolidated (65.1% CEMAR, 96.2% Celpa). Light is no longer consolidated as from 2010.

Geramar’s debt is no longer consolidated as from 2013.

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made a longer debt amortization schedule possible…

Debt Amortization Schedule - R$ MM

Short Term 2014 2015 2016 2017 2018 After 2018 Total

CEMAR 170 51 434 180 161 189 382 1,567

Celpa 385 1 8 7 7 - 1,122 1,530

Total 555 52 442 187 168 189 1,504 3,097

15

Investments

Investments - R$ MM

and a significant increase in investments.

2004 2005 2006 2007 2008 2009 2010 2011 2012 9M13

CEMAR 70 232 306 394 465 419 399 497 619 212

Celpa - - - - - - - - 42 273

Light - - - - 137 141 - - - -

Geramar - - - - 24 107 16 0.4 0.4 0.1

Total 70 232 306 394 626 667 415 497 661 485

16

Agenda



►Value Creation

►Company Profile

17

CEMAR: Highlights

MA

� Distribution company in the State of Maranhão

� 2.1 million clients (4th largest in the Northeast region)*

� Billed energy (3Q13): 1,362 GWh

� Annual gross revenues of R$ 3.0 billion in 2012.

Energy Sales (3Q13)

Clients (9M13)2.1 million

1,362 GWh

*Source: ABRADEE

RS

SC

PR

SP

MG

GO

MT

AC

AM

RR

ROBA

PI

MAPA

AP

TO

CERN

PE

ALSE

MS

RJ

ES

DF

PB

RS

SC

PR

SP

MG

GO

MT

AC

AM

RR

ROBA

PI

MAPA

AP

TO

CERN

PE

ALSE

MS

RJ

ES

DF

PB

48.4%

22.2%

20.0%

9.4%

Residential Industrial

Commercial Others

89.1%

4.2%6.3%

0.4%


Commercial Others

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CEMAR: History

CEMAR under control of Equatorial

1958-Jun. 2000

Aug.2000-Aug.2002

Aug.2002-May 2004

May 2004-Present

State owned

CEMAR under PPL Global’scontrol

ANEEL’s intervention

CEMAR under control of Equatorial

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CEMAR: Ownership Structure

CEMAR

OthersEquatorial EnergiaEletrobras

65.1% 1.3%33.6%

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Tariff Review Results

*All values are nominal and in R$ million.

CEMAR 2005 2009 2013

Gross RAB 1,756 2,247 3,309

Net RAB 836 1,121 2,069

Operating Costs 218 278 428

Regulatory Depreciation 68 102 125

Regulatory EBITDA 157 271 216

CAIMI - - 45

Regulatory Losses (1 year) 28.0% 25.6% 19.6%

Deliquency Rate 0.5% 0.9% 0.94%

X Factor (ex-ante) 1.19% 1.06% 2.76%

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CEMAR: Distribution

2004 2005 2006 2007 2008 2009 2010 (***) 2011 (***) 2012 9M13

Energy Sold GWh 2,593 2,793 2,917 3,223 3,347 3,566 4,146 4,379 4,804 3,848

Net Revenues R$ MM 495 665 810 879 999 1,148 1,756 1,912 2,348 1,433

PMSO R$ MM 127 126 129 126 139 171 245 291 321 261

PDA + Contingencies R$ MM 47 20 14 30 32 33 68 46 69 48

Net Income R$ MM (31) 359 177 222 227 198 279 248 385 155

Dividends R$ MM - 85 165 172 140 58 200 94 76 0

Net Debt / EBITDA times 3.9 1.6 0.8 1.1 1.6 1.6 1.5 1.9 2.1 1.6

Clients '000 1,161 1,254 1,349 1,438 1,535 1,688 1,822 1,939 2,037 2,109

PMSO/Client R$/Client 109 101 95 88 90 101 134 150 158 124

DEC (*) Hours/Year/Client 63.4 54.6 42.6 28.7 27.3 23.6 21.8 21.4 21.7 19.2

FEC (*) Times/Year/Client 39.3 32.9 24.6 19.8 16.8 15.2 14.1 11.6 11.0 10.6

Total Losses (*) % 29.9% 29.5% 29.8% 28.7% 28.9% 25.2% 22.0% 21.0% 20.7% 20.3%

CAPEX R$ MM 45 103 137 199 278 239 197 322 441 194

PLPT (**) R$ MM 25 129 169 195 187 180 202 175 178 18

(*) Last 12 months

(**) Light For All Program

(***) Values according to IFRS

• 2.1 million clients in 217 municipalities, covering

the whole state of Maranhão (total area 333,000

km²)

• Energy sales reached 3,848 GWh in 9M13, 9.0%

higher than in 9MQ12.

• In 3Q12, energy losses from the last 12 months

represented 20.3% of required energy, 0.5 p.p.

less than the 20.8% recorded in 3Q12.

• Service quality has been presenting positive

evolution. Since 2004, DEC and FEC indices

have dropped 69.7% and 73.0%, respectively.

• More than 323 thousand clients connected by

the Light for All Program.

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CEMAR: Energy Losses

The non-technical losses index on the low-voltage market increased in the quarter due to the revision of the technical losses index of the Company. Note that this does not impact the percentage of total losses.

23

Celpa: Highlights

� Distribution company in the State of Pará

� 2.0 million clients

� Billed energy (3Q13): 1,857 GWh

� Annual gross revenues of R$ 3.3 billion in 2012.

Energy Sales (3Q13)

Clients (9M13)2.0 million

1,857 GWh

RS

SC

PR

SP

MG

GO

MT

AC

AM

RR

ROBA

PI

MAPA

AP

TO

CERN

PE

ALSE

MS

RJ

ES

DF

PB

RS

SC

PR

SP

MG

GO

MT

AC

AM

RR

ROBA

PI

MAPA

AP

TO

CERN

PE

ALSE

MS

RJ

ES

DF

PB

PA

PA 39.6%

17.5%

23.7%

19.2%


Commercial Others

85.2%

7.0%

7.6%

0.2%


Commercial Others

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Celpa: History

Celpa under Equatorial’scontrol

1962-Jul.1998Jul.1998-Oct.2012

Nov.2012-Present

State owned

Celpa under Grupo Rede’scontrol

Celpa’s Judicial Recovery Filing

Feb. 2012

25

Celpa: Ownership Structure

CELPA

OthersEquatorial

Energia

3.8%96.2%

26

Tariff Review Results

All values are nominal and in R$ million.

CELPA 2011

Gross RAB 2,338

Net RAB 1,472

Operating Costs (starting point) 429

Operating Costs (upper limit) 352

Regulatory Depreciation 95

Regulatory EBITDA 253

Deliquency Rate (% GOR) 1.0%

X Factor (ex-ante) 2.42%

Regulatory Losses* 41.55% - 34.00%

* Non-technical ov er low -v oltage market

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• 2.0 million clients in 144 municipalities, covering the whole state of

Pará (total area 1,247,955 km²)

• Energy sales reached 5,266 GWh in 9M13, 6.5% higher than

9M12’s figures.

• In 3Q13, energy losses from the last 12 months represented 36.5%

of required energy, 0.8 p.p. less than the 35.7% recorded in 3Q12.

• In 3Q13, DEC and FEC for Celpa (accumulated over the last 12 mo

nths) were 82.7 hours, down 19.2%, and 41.7 times, a 18.7%

decrease when compared to indices observed at the end of 3Q12.

• More than 335 thousand clients connected through the Light for All

Program.

CELPA: Distribution

2011 2012 9M13

Energy Sold GWh 6,288 6,383 5,266

Net Revenues R$ MM 2,434 2,350 1,760

Manageable Costs (*) R$ MM 525 1,069 442

Non-Manageable Costs R$ MM 965 1,233 1,194

EBITDA R$ MM 256 (355) 90

Net Income R$ MM (391) (697) (118)

Net Debt R$ MM 1,552 1,219 825

Net Debt / EBITDA times 6.1 N/A 9.2

Clients '000 1,836 1,931 1,989

EBITDA/Client R$/Cliente 139 N/A 45

DEC (**) Hours/Year/Clients 99.7 101.6 82.7

FEC (**) Hours/Year/Clients 55.9 50.9 41.7

Total Losses (**) % 31.6% 35.0% 36.5%

CAPEX R$ MM 487 433 251

PLPT (***) R$ MM 165 46 23

(*) Includes Construction Costs/Rev enues

(**) Last 12 months

(***) Light For All Program

All v alues are in accordance w ith IFRS

28

Celpa: Energy Losses

29

CEMAR: DEC/FEC 2012 Evolution Comparison

Better

10266

6455

4239

36343431

292726

2422222120201917171413

8

CELPAELETROACRECEMAR 2004CEMAR 2005CEMAR 2006

CELTINSCELG

CEPISACEMATCERON

CEMAR 2007CEMAR 2008

CEALCEMAR 2009CEMAR 2010CEMAR 2012CEMAR 2011

CEBCOELBACELPE

SULGIPECHESP

COSERNENERSULCOELCE

DEC (hours)

5551

3933

312626

25242423

2020

1817

151413

1211

9888

5

ELETROACRECELPA

CEMAR 2004CEMAR 2005

CHESPCEPISACERON

CEMAR 2006CEMATCELG

CELTINSCEAL

CEMAR 2007CEB

CEMAR 2008CEMAR 2009CEMAR 2010

SULGIPECEMAR 2011CEMAR 2012

COELBAENERSUL

CELPECOSERNCOELCE

FEC (times)

30

Geramar: Ownership Structure

GNP

Geramar

Ligna

50%

25%

Servtech

Equatorial

Energia

Fundo de

Investimento em

Participações Brasil

50%

25%50%

31

Geramar: Highlights

• Two thermoelectric power plants fueled by high-viscosity heavy oil.

• Location: Miranda do Norte, Maranhão.

• Joint installed capacity of 331 MW.

• 240 MW of energy sold at the A-3 auction in 2007.

• Total fixed annual revenue (for both plants) of R$ 136 million* (in R$ of 2007), during 15 years.*Revenues adjusted by inflation (IPCA)

• Start-up: January of 2010

• Total CAPEX: R$ 550 million.

• Equatorial’s share of CAPEX (25%): R$137 million. Equity = approximately R$45 million.

32

Agenda



►Value Creation

►Company Profile

33

Financial strength and solid management team with turnaround experience

Growth prospects and consolidation opportunities

Result-oriented management model

High level of

Corporate Governance

Agenda

34

Firmino SampaioCEO

Eduardo HaiamaCFO and IRO

Thomas NewlandsInvestor Relations

Phone 1: 55 21 3206-6635Phone 2: 55 21 3206-6607

E-mail: [email protected]

Website: http://www.equatorialenergia.com.br/ir

Contacts

35

► This presentation may contain forward-looking statements, which are subject to risks and uncertainties, as theywere based on the expectations of Company’s management and on available information. These prospects includestatements concerning the Company’s current intensions or expectations for our clients.

► Forward-looking statements refer to future events which may or may not occur. Our future financial situation,operating results, market share and competitive positioning may differ substantially from those expressed orsuggested by said forward-looking statements. Many factors and values that can establish these results areoutside Company’s control or expectation. The reader/investor is prevented not to completely rely on theinformation above.

► The words “believe", “can", “predict", “estimate", “continue", “anticipate", “intend", “forecast" and similar words, areintended to identify estimates. Such estimates refer only to the date in which they were expressed, therefore theCompany has no obligation to update said statements.

► This presentation does not consist of offering, invitation or request of subscription offer or purchase of anymarketable securities. And, this statement or any other information herein, does not consist of a contract base orcommitment of any kind.

Disclaimer

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