webcast 2 q14 eng

OPERATING AND

FINANCIAL RESULTS

2Q14

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Agenda

► Highlights

► Operating Results

► Introduction

► Financial Results

► Corporate Updates

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► Highlights



► Introduction

Agenda


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Introduction

Presentation of Operating and Financial Information

► The financial information contained herein is presented in consolidated figures, pursuant to Brazilian Corporate Law, based on revised financial information. The consolidated financial information represents: i) 100% of CEMAR’s results, excluding 34.89% related to minority interests before Net Income, resulting in participation of 65.11% ii) 100% of CELPA’s results, excluding 3.82% related to minority interests before Net Income, resulting in participation of 96.18%; and iii) 100% ofEquatorial Soluções’ results, which in turn consolidated 100% of Sol Energias’ results, excluding 49% of minority interest before Net Income.

► The operating information presented herein consolidates 100% of CEMAR’s results and 100% of CELPA’s results.

► The following information was not reviewed by the independent auditors: i) non-financial information relating to CEMAR, Light and the PLPT (Programa Luz para Todos - Light for All Program); ii) pro forma information and its comparison with the results presented in the period; and iii) management expectations regarding the future performance of the Companies.

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► Highlights


► Introduction


Agenda


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Operating Highlights

► CEMAR’s total billed energy volume reached 1,353 GWh in 2Q14, 8.2% higher than in 2Q13. The totalvolume distributed by CELPA (captive and free markets) totaled 1,979 GWh in 2Q14, representinggrowth of 12.5% YoY.

► In CEMAR, energy losses of the last 12 months ending 2Q14 represented 17.8% of the requiredenergy, with a decrease of 0.6 percentage points compared to 18.4% recorded in 1Q14. In CELPA, totallosses ended the year at 34.2% of the required energy, a decrease of 1.2 percentage points comparedto the 34.2% recorded in 1Q14.

► In 2Q14, CEMAR’s DEC and FEC indexes (accumulated over the last 12 months) were 16.1 hours, adecrease of 20.0%, and 10.7 times, a decrease of 1.7%, compared to those observed at the end of2Q13. In CELPA, these same indexes closed the quarter with improvements of 34.4% and 30.7%,respectively.

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► Net operating revenues (NOR) in 2Q14 reached R$1,353 million, 21.2% higher than 2Q13’s NOR.

► In 2Q14, Consolidated Accounting EBITDA was R$73 million, compared to R$64 million in 2Q13. TheRegulatory EBITDA totaled R$242 million in the quarter, an increase of 63.5% over the same quarter lastyear.

► The net result of the quarter was a loss of R$185 million against a loss of R$44 million in the 2Q13. The netresult adjusted by the accrual of net regulatory assets, reached R$ 98 million in the quarter.

► In 2Q14, Equatorial's consolidated investments totaled R$286 million, 84.0% higher than those made in2Q13.

► In August 2014, the ANEEL’s Executives authorized the CELPA to adjust its rates by 34.96% (average effectperceived by consumers), effective from August 7.

► On July 21, 2014, Equatorial’s Extraordinary General Meeting approved the Company’s 4th Stock OptionPlan, under which potential dilution for current shareholders will not exceed 3%.

Financial Highlights

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► Highlights


Agenda

► Introduction



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► CEMAR: 2Q14 energy sales moved up by 8.2%, reaching 1,353 GWh.

Energy Market - CEMAR

Electricity Consumption per Segment (MWh)

Energy Balance (MWh)

CONSUMPTION SEGMENTS * (MWh) 2Q13 1Q14 2Q14 Chg. 1S13 1S14 Chg.

Residential 606,984 662,831 662,570 9.2% 1,214,527 1,325,401 9.1%

Industrial 112,909 120,563 119,030 5.4% 227,021 239,593 5.5%

Commercial 253,536 273,803 283,481 11.8% 502,243 557,284 11.0%

Others 276,432 276,462 287,566 4.0% 542,101 564,028 4.0%

TOTAL 1,249,861 1,333,659 1,352,647 8.2% 2,485,892 2,686,306 8.1%

* Does not include sales to CEPISA and own consumption.

ENERGY BALANCE (MWh) 2Q13 1Q14 2Q14 Chg. 1S13 1S14 Chg.

Required Energy 1,581,813 1,583,219 1,661,796 5.1% 3,108,429 3,245,015 4.4%

Sold Energy (*) 1,251,923 1,335,720 1,354,850 8.2% 2,489,919 2,690,570 8.1%

Losses 329,890 247,500 306,945 -7.0% 618,510 554,445 -10.4%

(*) Considers sale to the segments, own consumption and sales to CEPISA

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Distribution – Energy Losses in CEMAR

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Distribution – DEC and FEC - CEMAR

► CEMAR: In 2Q14, the DEC index decreased 20.0% compared to 2Q13 while the FEC index decreased 1.7% compared to the same quarter last year.

16.1

20.1

2Q13 2Q14

-20.0%

10.710.9

2Q13 2Q14

-1.7%

FEC(times – last 12 months)

DEC(hours – last 12 months)

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► CELPA: Energy demand growth of 12.5% in energy sales in 2Q14 (Captive Market + Free), reaching 1,979 GWh.

Energy Market - CELPA

Electricity Consumption per Segment (MWh)

Energy Balance (MWh)

CONSUMPTION SEGMENTS * (MWh) 2Q13 1Q14 2Q14 Chg. 1S13 1S14 Chg.

Residential 669,518 767,351 811,033 21.1% 1,299,428 1,578,383 21.5%

Industrial 302,887 316,695 326,518 7.8% 589,809 643,214 9.1%

Commercial 402,887 398,720 421,382 4.6% 774,844 820,103 5.8%

Others 300,736 307,361 327,397 8.9% 578,003 634,757 9.8%

TOTAL 1,676,027 1,790,127 1,886,330 12.5% 3,242,084 3,676,457 13.4%

Free Consumers 83,002 90,062 92,915 11.9% 166,859 182,977 9.7%

TOTAL (Captive + Free) 1,759,030 1,880,189 1,979,245 12.5% 3,408,943 3,859,434 13.2%

* Does not include own consumption.

ENERGY BALANCE (MWh) 2Q13 1Q14 2Q14 Chg. 1S13 1S14 Chg.

Energy Sales (Captive + Own Consumption)1,682,452 1,797,659 1,894,709 12.6% 3,254,664 3,692,368 13.4%

Free Market 83,002 90,062 92,915 11.9% 166,859 182,977 9.7%

Total Losses 1,006,070 858,619 906,654 -9.9% 1,962,135 1,765,273 -10.0%

Required Energy 2,771,524 2,746,340 2,894,278 4.4% 5,383,658 5,640,618 4.8%

Own Generation 110,319 106,759 113,355 2.8% 212,951 220,114 3.4%

Energy Purchase (Contracts) 2,661,205 2,639,581 2,780,923 4.5% 5,170,707 5,420,504 4.8%

(*) Includes sales to the segments, own consumption and free market.

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Distribution – Energy Losses in CELPA

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Distribution – DEC and FEC

► CELPA: In 2Q14, the DEC index (LTM) improved 34.4% compared to 2Q13 while the FEC index (LTM) decreased 30.7% compared to the same quarter last year.

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► Highlights


Agenda

► Introduction



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Quarterly Results

Equatorial’s EBITDA

► Adjusting the IFRS EBITDA by the recognition of net regulatory assets and excluding non recurring items, the 2Q14 Adjusted Regulatory EBITDA amounted to R$242 million, a 63% growth.

Consolidated EBITDA (R$ million) 2Q13 1Q14 2Q14 Chg.

CEMAR's EBITDA 121 76 21 -82.6%

CELPA's EBITDA (53) 47 (92) 73.6%

EBITDA (Holding + Others) (4) 21 (2) -50.0%

Accounting EBITDA 64 144 (73) N/A

Net Regulatory Assets / Liabilities CEMAR 37 43 127 243.2%

Net Regulatory Assets / Liabilities CELPA 47 63 232 393.6%

Energy Purchase Adjustment (CELPA and CEMAR) - (19) (33) N/A

Isolated Systems Adjustment (CELPA) - - (11) N/A

Adjusted Regulatory EBITDA 148 231 242 63.5%

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Quarterly Results

Consolidated Net Income

► Adjusting the Consolidated IFRS Net Income by the recognition of net regulatory assets and also by non recurring items in the quarter, the Regulatory Adjusted Net Result amounted to R$ 98 million, a 162% growth.

Consolidated Net Income (R$ million) 2Q13 1Q14 2Q14 Chg.

CEMAR's Net Income 80 30 (14) -117,1%

CELPA's Net Income (161) (31) (189) 17,1%

Net Income (Holding + Others) 37 16 17 -54,1%

Accounting Net Income (44) 15 (185) -160,0%

Net Regulatory Assets / Liabilities CEMAR 25 34 83 234,2%

Net Regulatory Assets / Liabilities CELPA 57 58 237 316,9%

Energy Purchase Adjustment (CELPA and CEMAR) - (14) (27) N/A

Isolated Systems Adjustment (CELPA) - - (9) N/A

Adjusted Regulatory Net Income 37 93 98 162,1%

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Debt: Schedule of Gross Debt Maturities

Consolidated Gross Debt(100% CEMAR + 100% CELPA)

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100% CEMAR + 100% CELPA

Net Debt - Consolidated

Net Debt (R$MM) and Net Debt/ Regulatory EBITDA (Last 12 months)

Net Debt Reconciliation (R$MM)

1,0771,189 1,285

1,0011,109

1.2

1.71.81.71.6

2Q13 3Q13 4Q13 1Q14 2Q14

3,351

880

1,363

1,109

Gross Debt Net

Regulatory

Assets

Cash Net Debt

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65.11% CEMAR + 96.18% CELPA

Net Debt – Pro-rata

Net Debt (R$MM) and Net Debt/ Regulatory EBITDA (Last 12 months)

Net Debt Reconciliation (R$MM)

737

849954

629

815

1.2

1.71.81.71.6

2Q13 3Q13 4Q13 1Q14 2Q14

2,706

815

1,127

763

Gross Debt Net

Regulatory

Assets

Cash Net Debt

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► CEMAR: In 2Q14, total capex reached R$95 million, of which R$70 million are own capex and R$25 million regarding the Light for All Program (PLPT).

► CELPA: In 2Q14, total capex reached R$192 million, of which R$146 million are own capex and R$45 million regarding the Light for All Program (PLPT).

Capex - Equatorial

INVESTIMENTS(R$MM) 2Q13 1Q14 2Q14 Chg. 1S13 1S14 Chg.

CEMAR

Own (*) 54 63 70 28.4% 132 132 0.5%

PLPT 7 16 25 265.4% 12 41 233.3%

Total 61 79 95 55.0% 144 173 20.4%

CELPA

Own (*) 90 99 146 62.2% 174 246 41.5%

PLPT 4 35 45 969.8% 7 80 1068.4%

Total 95 134 192 102.8% 180 326 80.5%

Geramar

Generation 0 0 0 -44.3% 0 0 -42.7%

TOTAL EQUATORIAL 156 213 286 84.0% 325 499 53.8%

(*) Including indirect Light For A ll investments

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► Highlights


Agenda

► Introduction



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Corporate Updates

► CELPA’s Tariff Adjustment:

As of August 7, 2014, ANEEL’s Executives authorized CELPA to readjust its rates (Annual TariffAdjustment). The calculated average impact on consumer was 34.96%, which is composed as follows:

► Approval of the 4th Stock Option Plan: On July 21, 2014, Equatorial’s Extraordinary General Meeting approved the Company’s 4th StockOption Plan, under which potential dilution for current shareholders will not exceed 3%.

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Eduardo HaiamaCFO and IRO

Thomas NewlandsInvestor Relations

Renato ParentoniInvestor Relations

Telephone 1: +0 55 (21) 3206-6635Telephone 2: +0 55 (21) 3217-6607

Email: [email protected]

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

Contacts

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• This presentation may contain forward-looking statements, which are subject to risks and uncertainties, as they were based on theexpectations of Company’s management and on available information. These prospects include statements concerning the Company’scurrent intentions or expectations for our clients; this presentation will also be available at our website www.equatorialenergia.com.br/ir andin the IPE system of the Brazilian Securities and Exchange Commission (CVM).

• Forward-looking statements refer to future events which may or may not occur. Our future financial situation, operating results, market shareand competitive positioning may differ substantially from those expressed or suggested by said forward-looking statements. Many factorsand values that can establish these results are outside Company’s control or expectation. The reader/investor is advised not to completelyrely on the information above.

• The words “believe", “can", “predict", “estimate", “continue", “anticipate", “intend", “forecast" and similar words, are intended to identifyestimates, which refer only to the date on which they were expressed. Hence, the Company has no obligation to update said statements.

• This presentation does not constitute any offering, invitation or request of subscription offer or purchase of any marketable securities. And,this statement or any other information herein, does not constitute the basis for any contract or commitment of any kind.

Disclaimer

webcast 2 q14 eng

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