institucional 1 q14 novo padrão eng-final

INSTITUTIONAL

PRESENTATION

May, 2014

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$2.5

billion in 2013.

• 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$3.4

billion in 2013.

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

5

6

Ownership Structure – Current

• Total no. of shares:

• Share price**:

• Free float:

• ADTV90:

198,447,352

R$ 20.36

77.1% / R$3,114 MM

R$ 17.415 MM

**On 03/31/14ADTV90 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 and President Management Program ofHarvard 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).

Luis Otávio Laydner

Officer

Augusto Miranda

Officer

• Officer of Equatorial since May 2013.

• Previously worked (2010-2013) as a partner at Vinci Partners. From 2000 to 2009 he worked in the areas of analysis of companies and private equity of Banco Pactual (subsequently UBS Pactual), and between 1992-1999 served in the Planning and Finance Department of Esso Brasileira de Petróleo Ltda.

• Officer of Equatorial since May 2013.

• Experienced executive with over 20 years in the electricity sector.

• Currently is CEMAR’Cs EO since April 2010. From 2007 to 2010 he was Vice President of Operations and previously was Engeneering Director at CEMAR since July 2004. Before joining CEMAR, he held various positions in management of power system maintenance in COELBA.

• Is an electrical engineer graduated from the Federal University of Bahia, specialized in Maintenance Management promoted by Eletrobras in partnership with PUC/RJ and the Federal School of Engineering Itajubá/MG and an MBA in Management of Electric Energy Companies at FGV/SP.

9

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 2013 1Q14

Net Revenue 526 629 810 879 2.346 2.506 1.799 1.981 2.987 4.715 1.325

EBITDA 85 189 341 379 784 757 510 504 567 586 144

% EBITDA 16% 30% 42% 43% 33% 30% 28% 25% 19% 12% 11%

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 2013

Consolidated Dividends (R$ MM) - 54 108 151 284 51 197 50 37 18

CEMAR - 54 108 112 91 58 200 94 76 38

Light - - - 27 111 56 - - - -

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

Net Income (R$ MM) 123 229 119 153 300 207 189 160 141 69

CEMAR (31) 234 116 117 148 129 279 248 385 192

Celpa - - - - - - - - (160) (229)

Geramar - - - - - - 6 11 18 -

Equatorial Soluções - - - - - - - - 3 7

Light - - - - 130 79 - - - -

The Consolidated div idends incorporate 100% of CEMAR

2004 2005 2006 2007 2008* 2009 2010 2011 2012 2013

Payout 0% 24% 90% 99% 95% 25% 104% 32% 26% 26%

Div idend Yield N/A N/A 10% 13% 27% 3% 18% 4% 2% 0%

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.

14


made a longer debt amortization schedule possible…

Debt Amortization Schedule - R$ MM

Curto Prazo 2015 2016 2017 2018 Após 2018 Total

CEMAR 180 435 204 185 214 456 1,674

Celpa 107 285 11 10 8 1,071 1,492

Total 287 720 215 195 222 1,527 3,166

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Investments

Investments - R$ MM

and a significant increase in investments.

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1T14

CEMAR 70 232 306 394 465 419 399 497 619 325 79

Celpa - - - - - - - - 42 421 132

Light - - - - 137 141 - - - - -

Geramar - - - - 24 107 16 0.4 0.4 0.1 0.0

Total 70 232 306 394 626 667 415 497 661 746 211

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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 (1Q14): 1,334 GWh

� Annual gross revenues of R$ 2.5 billion in 2013.

Energy Sales (1Q14)

Clients (1Q14)2.1 million

1,334 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

89.0%

4.1%6.5%

0.4%

Residential Industrial

Commercial Others

49.7%

20.7%

20.5%

0.9%


Commercial Others

18

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

19

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 157 271 341

CAIMI - - 45

Regulatory Losses (12-month) 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 2013 1Q14

Energy Sold GWh 2,593 2,793 2,917 3,223 3,347 3,566 4,146 4,379 4,804 5,288 1,336

Net Revenues R$ MM 495 665 810 879 999 1,148 1,756 1,912 2,348 1,969 490

PMSO R$ MM 127 126 129 126 139 171 245 291 321 367 83

PDA + Contingencies R$ MM 47 20 14 30 32 33 68 46 69 59 6

Accounting Ebitda R$ MM 93 189 341 379 415 470 500 482 533 494 76

Regulatory EBITDA R$ MM 93 189 341 379 415 470 500 470 496 560 119

Net Income R$ MM (31) 359 177 222 227 198 279 248 385 192 15

Dividends R$ MM - 85 165 172 140 58 200 94 76 38 -

Net Debt R$ MM 362 305 291 421 673 768 759 898 1,102 870 857

Net Debt / Reg. EBITDA times 3.9 1.6 0.8 1.1 1.6 1.6 1.5 1.9 2.2 1.6 7.2

Clients '000 1,161 1,254 1,349 1,438 1,535 1,688 1,822 1,939 2,037 2,126 2,150

PMSO/Client R$/Client 109 101 95 88 90 101 134 150 158 173 39

EBITDA/Client R$/Client 80 150 253 264 270 278 274 249 262 232 35

DEC (*) Hours/Year/Client 63.4 54.6 42.6 28.7 27.3 23.6 21.8 21.4 21.7 18.9 16.1

FEC (*) Times/Year/Client 39.3 32.9 24.6 19.8 16.8 15.2 14.1 11.6 11.0 10.9 10.5

Total Losses (*) % 29.9% 29.5% 29.8% 28.7% 28.9% 25.2% 22.0% 21.0% 20.7% 19.2% 18.4%

CAPEX R$ MM 45 103 137 199 278 239 197 322 441 296 63

PLPT (**) R$ MM 25 129 169 195 187 180 202 175 178 29 16

(*) Last 12 months

(**) Light For All Program

(***) Values according to IFRS

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CEMAR: Energy Losses

23

Celpa: Highlights

� Distribution company in the State of Pará

� 2.0 million clients

� Billed energy (1Q14): 1,880 GWh

� Annual gross revenues of R$ 3.4 billion in 2013.

Energy Sales (1Q14)

Clients (1Q14)2.0 million

1,880 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

42.9%

17.7%

22.3%

17.2%


Commercial Others

85.6%

6.7%7.5%

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

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Celpa: Ownership Structure

EquatorialEnergia

CELPA - Centrais

Elétricas do Pará S.A.

96.4% VC

96.2% TC

Minorities

(free float)

3.6% VC

3.8% TC

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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 1,798 GWh in 1Q14, 7.9% higher than

1Q13’s figures.

• In 1Q14, energy losses from the last 12 months represented 34.2%

of required energy, 1.7 p.p. lower than the 35.9% recorded in 1Q13.

• In 1Q14, DEC and FEC for Celpa (accumulated over the last 12 mo

nths) were 64.8 hours, down 31.1%, and 34.9 times, a 26.9%

decrease when compared to indices observed at the end of 1Q13.

• More than 348 thousand clients connected through the Light for All

Program.

CELPA: Distribution

2011 2012 2013 1Q14

Energy Sold GWh 6,288 6,383 7,250 1,798

Net Revenues R$ MM 2,434 2,350 2,495 705

Manageable Costs (*) R$ MM 525 1,069 769 152

Non-Manageable Costs R$ MM 965 1,233 1,049 512

Accounting EBITDA R$ MM 256 (369) 113 47

Regulatory EBITDA R$ MM 283 (344) 113 110

Net Income R$ MM (391) (697) (229) (31)

Net Debt R$ MM 1,552 1,219 961 835

Net Debt / Regulatory EBITDA times 1.0 N/A 5.0 7.6

Clients '000 1,836 1,931 2,031 2,074

EBITDA / Clients R$ / Clients 139 N/A 56 23

DEC (**) Horas / Ano / Cons. 99.7 101.6 73.5 64.8

FEC (**) Vezes / Ano / Cons. 55.9 50.9 38.0 34.9

Total Losses (**) % 31.6% 35.0% 35.5% 34.2%

CAPEX R$ MM 487 433 361 99

PLPT (***) R$ MM 165 46 61 33

(*) 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

1027372

6455

42403939

313030292827

2423222222211918

1412129

CELPA 2012CELPA 2013

ELETROACRECEMAR 2004CEMAR 2005CEMAR 2006

CELGCERONCELTINS

CEALCEMATCEPISA

CEMAR 2007CHESP

CEMAR 2008CEMAR 2009

COELBACELPE

CEMAR 2010CEMAR 2012CEMAR 2011CEMAR 2013

CEBCOSERNENERSULSULGIPECOELCE

DEC (hours)

5147

3938

373332

2625

2323

20181716161514

121111

99988

5

CELPA 2012ELETROACRECEMAR 2004CELPA 2013

CHESPCEMAR 2005

CERONCELG

CEMAR 2006CEMATCEPISA

CEMAR 2007CELTINS

CEMAR 2008CEALCEB

CEMAR 2009CEMAR 2010CEMAR 2011CEMAR 2012CEMAR 2013

SULGIPECOELBACOSERNCELPE

ENERSULCOELCE

FEC (times)

29

CEMAR and CELPA: DEC/FEC 2013 Evolution Comparison

BETTER

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

Eduardo HaiamaCFO and IRO

Thomas NewlandsInvestor Relations

Renato ParentoniInvestor Relations

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

E-mail: [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 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