Conference Call

2nd Quarter 2013

Highlights
Consumption grew 2.5% compared to 2Q12, mainly driven by the commercial and industrial segments whch increased by 5.1% and 4.1%, respectively; Collection rate for the first quarter reached 104.2%. 30 bps above the 2Q12; Non-technical losses (LTM) of 44.2%, 70 bps down on march/2013; In 1H13, investments amounted R$ 326.7 million, of this total, R$ 272.8 million went to the distribution segment.

OPERATIONAL

2.6% increase in Net Revenue (without construction revenue) reaching R$ 1,670.9 million in the 2Q13; EBITDA of R$ 277.9 million in 2Q13, 8.9% up, as a consequence of the higher participation of the generation activity. Adjusted by the regulatory assets (CVA), it reaches R$ 397.2 million, 20.1% above 2Q12.

RESULTS

Net Income of R$ 58.2 million in the quarter, an increase of 46.2% over 2Q12. Adjusted by CVA. it reaches R$ 136.9 million, 52.5% above 2Q12.
Net Debt of R$ 4.056.1 million with a multiple for covenants at 2.62x. Aneel announced the preliminary proposal of Light SESAs Tariff Revision, and the details will be discussed in a Public Hearing, with an on-site meeting in the city of Rio de Janeiro, in September, 13.

REGULATORY

Energy Consumption
Distribution Quarter
TOTAL MARKET (GWh)
+2.6% +2.5%

Free 16% 16.0% 5,897

Outros Cativos 15%

Livre

Industrial 6%

5,460

5,669

5,754

Others 15.1%

Industrial 5.8%

22.7C

22.7C

23.5C

23.2C Commercial 29.6% Residential 33.4%

Res

2T10

2T11

2T12

2T13

2Q10 2T10

2Q11 2T11

2Q12 2T12

2Q13 2T13

Comercial 30%

1Note:

To preserve comparability in the market approved by Aneel in the tariff adjustment process. the billed energy of the free customers: Valesul, CSN and CSA were excluded in view of these customers planned migration to the Basic Network.

Energy Consumption
Distribution Half
TOTAL MARKET (GWh)
28,0
+2.0% +3.1%

Ou

t ro sC a ti 1 5 % v os

27,5
27,0 26,5 26,0 25,5

11,585

11,960

11,934

12,303
1S10

Others 14.7%

Free 14.4% Industrial 5.7%

25,0
24,5 24,0

25.5C 25.1C

25.2C

25.1C

23,5
23,0 1S10 1S11 1S12 1S13

1S11the consumption o me With no r c ia l longer billed by the 29% 1S12 change in criteria. the 1S13 total energy consumption increase in the concession area would be 3.4% over 2Q12.

Commercial 29.5%

Residential 35.7%
Re

14

1S10 1S10

1S11 1S11

1S12 1S12

1S13 1S13

s id e nc ial 36%

1Note:

To preserve comparability in the market approved by Aneel in the tariff adjustment process. the billed energy of the free customers: Valesul, CSN and CSA were excluded in view of these customers planned migration to the Basic Network.

Total Market
ELECTRICITY CONSUMPTION (GWh) TOTAL MARKET QUARTER
+2.5%

5,754
+0.1% +5.1%

5,897

837 215

942

1,969

1,972

1,867 182

1,962
+4.1% +0.6%

980 1,685

1.021

4,916 937 48 942 49 893

4,954

1,748

607 373

678 889 342

2T13 2Q13 2T12 2Q12 2T13 2Q13
2T12 2Q12 2T13 2Q13

2T12 2Q12

2T13 2Q13

2T12 2Q12

2T13 2Q13

2T12 2Q12

RESIDENTIAL

COMMERCIAL

INDUSTRIAL

OTHERS

TOTAL

CAPTIVE

FREE

Total Market
ELECTRICITY CONSUMPTION (GWh) TOTAL MARKET HALF
+3.1%

11,934
+1.8% +6.5%

12,303

1,639

1,777

4,317

4,395 3,808

4,055 430
0.2% +2.2%

374

1,941 3,434

1,945

10,295 1,868 98 1,909 103 1,806

10,526

3,625

1,167 774

1,244 1,771 701

1S13 1H13 1S12 1H12 1S13 1H13
1S12 1H12 1S13 1H13

1S12 1H12

1S13 1H13

1S12 1H12

1S13 1H13

1S12 1H12

RESIDENTIAL

COMMERCIAL

INDUSTRIAL

OTHERS

TOTAL

CAPTIVE

FREE

Collection
COLLECTION RATE 12 MONTHS

COLLECTION RATE BY SEGMENT QUARTER

103.9% 104.2%

105.0% 104.5%

100.1%

101.8%

107.4% 108.1%

98.2%

99.5%

Total Total

Retail Varejo
2T12

Large Clients Grandes Clientes

2T13

PublicPblico Sector Poder

Jun/12 mar-12

Jun/13 mar-13

2Q12

2Q13

Collection
COLLECTION RATE 12 MONTHS

COLLECTION RATE BY SEGMENT HALF

99.3%

102.5%

98.0%

102.0%

99.7%

103.4%

104.0% 102.5%

98.2%

99.5%

Total

Total

Retail
1S12

Varejo

Large Clients
1S13

Grandes Clientes

Public Sector

Poder Pblico

Jun/12 mar-12

Jun/13 mar-13

1H12

1H13

Loss Prevention
LOSS (12 MONTHS)
45.4% 42.2% 43.1% 32.9% 44.9% 44.2% 50.4

ENERGY RECOVERY GWh

69.4
+37.6%

7,838 5,457

8,047

8,584

8,647

8,582 1H12 1S12 mar-12

1S12 1H13 mar-13

5,615

6,007

6,029

5,953

INCORPORATION GWh
2,381 Jun/12 2,432 Sep/12 2,577 Dec/12 2,618 Mar/13 2,629 Jun/13 35.3
+1.0%

35.6

jun/ 12

s et /12

dez /12

mar/ 13

jun/ 13

Non-technical losses GWh % Non-technical losses/ LV Market

Technical losses GWh % Non-technical losses / LV Market - Regulatory

1S12 1H12 mar-12

1S12 1H13 mar-13

Losses Control Initiatives

Results until June/13
Zero Losses Area (APZ)
Neighborhood Curicica Realengo Cosmos Sepetiba Caxias 1 e 2 Belford Roxo 1 e 2 Vigrio Geral Caxias 3 Nova Iguau 1 Nova Iguau 2 Nilpolis Nilpolis Convencional Ricardo de Albuquerque Mesquita Cabritos/Tabajaras/Chapu Mangueira/Babilnia Coelho da Rocha Batan Total Client Numbers 13.034 10.141 35.216 18.960 13.907 20.005 16.141 16.768 32.423 20.500 9.923 11.080 24.593 8.759 5.277 17.621 7.151 281.499 Non-Technical Losses / Low Voltage Market * 11,9% 15,8% 20,8% 31,5% 22,9% 29,1% 15,8% 22,9% 31,5% 24,5% 28,5% 14,0% 18,1% 34,0% 11,6% 16,8% 9,5% 22,5% Collection Rate 99,0% 98,1% 105,1% 97,4% 93,7% 94,8% 99,6% 98,7% 97,9% 96,2% 94,1% 96,7% 97,6% 94,8% 96,7% 91,6% 103,5% 98,2%

Favelas
Areas Santa Marta Cidade de Deus 1 Chapu Mangueira Babilnia Cabritos Tabajaras Formiga Batan Borel Losses Collection Conclusion Year Before Current Before Current 2009 2010 2010 2011 2011 2012 2013 95,0% 52,1% 62,7% 62,3% 73,3% 61,8% 60,5% 5,1% 14,5% 8,6% 11,8% 10,8% 8,9% 26,1% 0,2% 23,1% 16,2% 5,4% 1,4% 9,5% 31,4% 1,2% 9,4% 98,3% 96,2% 101,4% 97,1% 96,6% 95,1% 92,6% 91,0% 84,3%

Average losses reduction : 51.8 p.p. Average Collection increase : 80.4 p.p.

* Reflects the results accumulated until jun/13 since the begining of the implementation of each APZ.

Average losses reduction: 26.0 p.p. Average Collection increase: 7.0 p.p.

Net Revenue
NET REVENUE BY SEGMENT (2Q13)*
NET REVENUE (R$MN)
+4.8%

Commercialization
9.5%

Generation
7.4%

3,688.8 299.7
+4.2%

3,864.8 332.8

Distribution
83.1%**

+3.2%

* Eliminations not considered

1,790.1 162.2
+2.6%

,.846.5 175.6 1,670.9 2Q13 2T13

3,389.1

3,532.0

** Construction revenue not considered

NET REVENUE FROM DISTRIBUTION (2Q13)

(Free + Concessionaires) 9.7%

1,627.9
2Q12 2T12

Network Use (TUSD)

1H12 1S12

1H13 1S13

Residential
42.1%

Construction Revenue Revenue w/out construction revenue

Others (Captive)
12.7%

Industrial
5.5%

Commercial
30.0%

Operating Costs and Expenses

COSTS (R$MN)* 2Q13
Non manageable (distribution): R$ 1,036.6
(64.7%)

DISTRIBUTION MANAGEABLE COSTS (R$MN)

+3.0%

655.7
+11.1%

675.5

322.6

358.4

Generation and Commercialization: R$ 207.9

(13.0%)

Manageable (distribution): R$ 358.4

(22.4%)

2Q12 2T12

2Q13 2T13

1H12 1S12

1H13 1S13

* Eliminations not considered ** Construction revenue not considered PMSO

R$ MN

2Q12 169.9 84.0

72.2 11.8

2Q13 202.3 66.6

48.4 18.2

Var. 19.0% -20.7%

-33.0% 54.2%

1H12 337.6 170.5

133.8 36.7

1H13 386.3 111.8

77.4 34.4

Var. 14.4% -34.4%

-42.1% -6.3%

Provisions
PCLD Contingencies

Depreciation Other operational/ revenues expenses Total

67.9 0.8 322.6

83.8 5.7 358.4

23.6% 567.2% 11.1%

143.6 4.1 655.7

164.5 12.9 675.5

14.6% 219.2% 3.0%

EBITDA
; o ui 7% tr ib 2,5 Dis %; 6 ,6 62

CONSOLIDATED EBITDA (R$MN)

-8.0%

EBITDA BY SEGMENT* 2Q13

688.5
+8.9%

633.1

Distribution 62.6%

(EBITDA Margin: 11.7%)

255.1

277.9
5,9 ;3 o % ra 89 Ge 35,

Commercialization 1.5%
(EBITDA Margin: 2.5%)
2T12 2Q12 2T13 2Q13 1S12 1H12 1S13 1H13

Generation 35.9%

(EBITDA Margin: 75.9%)

%;

*Eliminations not considered

Co o; a aliz rci 54% me %; 1, 1,5

EBITDA
EBITDA 2Q12 / 2Q13 (R$ MN)

+ 20.1% +8.9%

76 331 255

43

(33)

(6)

17

0.2 278

119 397

EBITDA Ajustado 2T11 Adjusted

EBITDA 2Q12

Ativos e EBITDA Passivos 2T11 Regulatrios Regulatory EBITDA

Receita Lquida

Assets and Liabilities

2Q12

Net Revenue Manageable Costs (PMSO) operational/ revenues Costs

Custos No Custos Provises EBITDA Ativos e EBITDA Gerenciveis Gerenciveis 2T12 Passivos Ajustado Regulatrios 2T12 Other EBITDA Regulatory Adjusted NonManageable (PMSO) Provisions Equity

Pick-up

2Q13

Assets and Liabilities

EBITDA 2Q13

EBITDA
EBITDA 1H12 / 1H13 (R$ MN)

+ 12.0% -8.0%

74

143

(191) (52) (13) 59 (1)

220 854

762 689

633

EBITDA Ajustado 2T11 Adjusted

EBITDA 1H12

Ativos e EBITDA Passivos 2T11 Regulatrios Regulatory EBITDA

Receita Lquida

Assets and Liabilities

1H12

Net Revenue Manageable Costs (PMSO) operational/ revenues Costs

Custos No Custos Provises EBITDA Ativos e EBITDA Gerenciveis Gerenciveis 2T12 Passivos Ajustado Other Regulatrios 2T12 EBITDA Regulatory Adjusted NonManageable (PMSO) Provisions Equity

Pick-up

1H13

Assets and Liabilities

EBITDA 1H13

Net Income
ADJUSTED NET INCOME 2Q12 / 2Q13 (R$ MN)
Lucro Lquido e Lucro Lquido Ajustado 1T12/1T13 - R$ Milhes

+ 52.5% + 46.2%

79 26 23 (14) 137 (16) 58

Receita Custos No Custos Resultado Gerenciveis Impostos Gerenciveis Financial Taxes Financeiro (PMSO) Result Provises
Outros Others

90

50

40
EBITDA Ativos e EBITDA LL Ajustado Ativos e 2T12 Ajustado 2T11 Adjusted Net Passivos Regulatory 2Q12 2T12 passivos 2T11 Income Regulatrios Assets and Regulatrios
EBITDA Lquida EBITDA

2Q12

Liabilities

EBITDA Ativos e EBITDA 2T13 Ativos e LL Ajustado 2T12 Passivos Ajustado 2Q13 Regulatory Adjusted Net passivos 2T13 Regulatrios 2T12 Assets and Income Regulatrios

Liabilities

2Q13

Net Income
Lucro Lquido e Lucro Lquido Ajustado ADJUSTED NET INCOME 2011/2012 - R$ Milhes
1H12 / 1H13 (R$ MN)

+ 23.6% - 23.9%

49 228 180 (55) 16 16 (20) 137

145

282

EBITDA Ativos e EBITDA LL Ajustado Ativos e 1S12 Ajustado 2T11 Adjusted Net Passivos Regulatory 1H12 2T11 Regulatrios 1S12 passivos Income Assets and

EBITDA Lquida EBITDA

Receita

1H12

Regulatrios Liabilities

Custos No Custos Resultado Gerenciveis Impostos Gerenciveis Financial Taxes (PMSO) Financeiro Result

Outros Others

Provises

EBITDA Ativos e EBITDA 1S13 Ativos e LL Ajustado 2T12 Passivos Ajustado 1H13 Regulatory Adjusted Net Regulatrios 2T12 passivos 1S13 Assets and

Regulatrios Liabilities

Income 1H13

Indebtedness
Custo Real NET DEBT
Without Pension Fund

AMORTIZATION SCHEDULE* (R$ MN) Average Term: 4.2 years

1,007 663 772 799 665 437 442 442 192 347

4,031.4

4,056.1

2.73

2.62

266

20 09

20 10
sto Re9M10 al

3T10

Mar/13 Cu

9M09

Jun/13

2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 2022 2022 After A ps 2013 2022 2022
* Principal only

Net Debt / EBITDA

2010
Custo Nominal

2011

2012 COST OF DEBT

11.08% 4.87%

11.03% Custo Real 4.25%

IPCA 10.1%
8.84% 2.40% CDI 72.4%

U$/Euro 0.5%

TJLP 15.6%
Others 1.5%

8.21% 2.24%

2010 2007
1

Custo Nominal Nominal Cost

2009

2011 2008

2012 2009 Custo Real Real Cost

2010 2011

Jun/13 set/10

*ConsideringHedge

Reclassified to reflect the deconsolidation results of jointly controlled companies.

2012

Investments
CAPEX (R$ MN) CAPEX BREAKDOWN (R$ MN) 1H13
Develop. of Distribution System 175.0

928.6 700.6 563.8 153.8 796.8 102.7

-0.5%

116.9

181.8 774.8 518.8 694.1 26.0

328.4

326.7 53.9 272.8 1H13 Generation 7.1

446.9

302.3 2009 2009 2009 2010 2010 2008 2010 2011 2011 2009 2011 2012 2012 9M11 2010 1H12

Losses Combat 92.6

9M12 2011

9M11

9M12 Energy Eficiency

33.1 Administration 13.7 Others 5.2

Commerc./

Investments in Electric Assets (Distribution)

Tariff Review
Preliminary proposal - Main issues:
1) Remuneration Asset Base: Gross Remuneration Asset Base: R$ 11,451,023,315 Net Remuneration Asset Base : R$ 6,398,174,913 2) Regulatory Non-Technical Losses: Starting point: 31.82% Reduction trend: 1.195 p.p. Work Group comprised of the Aneels technician within thirty days as from August 7, 2013

Next steps:
September, 13 Public Hearing meeting October, 3 Aneel sends new proposal to Light and consumers representatives (estimate) October, 29 Aneels Board Meeting (estimate) November, 7 Tariff Review

Important Notice
This presentation may include declarations that represent forward-looking statements according to Brazilian regulations and international movable values. These declarations are based on certain assumptions and analyses made by the Company in accordance with its experience. the economic environment. market conditions and future events expected. many of which are out of the Companys control. Important factors that can lead to significant differences between the real results and the future declarations of expectations on events or business-oriented results include the Companys strategy. the Brazilian and international economic conditions. technology. financial strategy. developments of the public service industry. hydrological conditions. conditions of the financial market. uncertainty regarding the results of its future operations. plain. goals. expectations and intentions. among others. Because of these factors. the Companys actual results may significantly differ from those indicated or implicit in the declarations of expectations on events or future results. The information and opinions herein do not have to be understood as recommendation to potential investors. and no investment decision must be based on the veracity. the updated or completeness of this information or opinions. None of the Companys assessors or parts related to them or its representatives will have any responsibility for any losses that can elapse from the use or the contents of this presentation. This material includes declarations on future events submitted to risks and uncertainties. which are based on current expectations and projections on future events and trends that can affect the Companys businesses. These declarations include projections of economic growth and demand and supply of energy. in addition to information on competitive position. regulatory environment. potential growth opportunities and other subjects. Various factors can adversely affect the estimates and assumptions on which these declarations are based on.

Contacts
Joo Batista Zolini Carneiro
CFO and IRO

Luiz Felipe Negreiros de S

Superintendent of Finance and Investor Relations +55 21 2211 2814 [email protected]

Gustavo Werneck
IR Manager + 55 21 2211 2560 [email protected]

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