btg pactual conference

7/28/2019 BTG Pactual Conference

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Corporate Presentation

April 2013


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Light Holdings

Light S.A.(Holding)

100% 51% 20%100% 100% 100%100% 100%51% 25.5%100%

Light Serviosde EletricidadeS.A.

LightgerS.A.

ItaocaraEnergiaLtda.

AmazniaEnergia S.A.

Light EscoPrestao deServios S.A.

LightcomComercializadorade Energia S.A.

Light Soluesem EletricidadeLtda.

InstitutoLight

AxxiomSolues

TecnolgicasS.A.

CR Zongshen

E-PowerFabricadoradeVeculos S.A.

GuanhesEnergia

S.A.

21.99%

RenovaEnergia

S.A.

Central ElicaFontainha

Ltda.

100%

Central ElicaSo Judas

Tadeu Ltda.

100% 9.77%

NorteEnergia

S.A.

33%

EBL Cia deEficinciaEnergtica

S.A.

Light EnergiaS.A.

Distribution Generation Commercialization andServices Institutional Systems ElectricVehicles

51%

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RankingsAmong the largest players in Brazil

INTEGRATEDNet Revenues 2012 R$ Billion

GENERATION PRIVATE-OWNED COMPANIES

Installed Hydro-generation Capacity (MW) 2012

37,626

24,71422,737

21,467 20,05415,018

18.5

15.0

11.8

8.56.9

6.6

5,560

2,6582,241 2,219

2,012

877

DISTRIBUTIONEnergy Consumption in Concession Area (GWh) - 2012

1 Source: Captive market

2 Source: Companies reports

* Considers the 9 MW of Renovas SHPs*

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Shareholders Structure

CEMIG RME LEPSA BNDESPAR MARKET

FIPLUCE

PARATI

CEMIGFIP

REDENTOR

REDENTOR

ENERGIA

26.06% 13.03% 13.03% 13.46% 34.41%

100%

75% 25%

13.03% 13.03%100%

96.81% 100%

6.41%19.23%

BTGPACTUAL

SANTANDER

VOTORANTIM

BANCO DOBRASIL

28.57%

5.50%

28.57%

5.50%

28.57%

5.50%

14.29%2.74%

MINORITY

3.19% 0.42%

Free Float47,9%

25.64%*

FOREIGN NATIONAL

57.78% 42.22%

Percentage in blue: indirect stake in Light

LightS.A.

(Holding)

Controller Group 52,1%

*12.61% (RME) + 13.03%(LEPSA)

11 Board members: 8 from the controlling

group, 2 independents e 1 employees

nominated

A qualifying quorum of 7 members to

approve relevant proposals such as: M&A

and dividend policy

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Corporate Governance

General Assembly

Fiscal Council

Board of Directors

Auditors

Committee Governance andSustainabilityCommittee

Human

ResourcesCommittee

Finances

Committee ManagementCommittee

Chief ExecutiveOfficer

Chief HR Officer

Chief BusinessOfficer

CorporateManagement

Officer

Chief Legal Officer

Chief Financial

and InvestorRelations Officer

Chief Distribution

Officer

Chief Energy

Officer

Joo B. Zolini Carneiro Jos Humberto Castro Evandro L. Vasconcelos Andreia Ribeiro Junqueira

Fernando Antnio F.Reis Paulo Carvalho Filho Evandro L. Vasconcelos*

Paulo Roberto R. Pinto

ChiefCommunications

Officer

Luiz Otavio Ziza Valadares

LGSXYADR-OTC

Interim*

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Distribution Business

4.1 million clients (serving 10 million people) Energy sales (2012) 23,384 GWh

70% of the consumption of Rio de Janeiro state (Brazils 2nd GDP)

6th largest energy distribution company in Brazil (2011)

LIGHT

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2009 2010 2011 2012

2009 2010 2011 2012

2009

2010

2011

2012

+2.0%

22,932

22,384

24.0C

24.3C

20112010

21,492

23,384

2009

24.5C25.0

C

+2.9%

2012

1Note: To preserve comparability in the market approved by Aneel in the tariff adjustment process, the billed energy of thefree customers Valesul, CSN and CSA were excluded in view o f these customers planned migration to the Basic Network.

TOTAL MARKET (GWh)

Energy ConsumptionDistribution Year

Comercial

29%

Industrial

7%

Free14%

Others15%

Commercial29%

Residential35%

With the consumptionno longer billed bythe change in criteria,the total energyconsumption increasein the concession

area would be 3.0%over 2011.

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Total Market

FREECAPTIVE

RESIDENTIAL INDUSTRIAL COMMERCIAL OTHERS TOTAL

2011 2012

+2.0%

19,87720,05

4

22,932

3,0563,330

23,384

+3.0%

3,417 3,521

3,603

185 191

3,712

+9.1%

6,310 6,856

6,967

657743

7,599

1,731

1,528

3,944

2,213

2,396

3,925

-3.2%

8,418 8,149

ELECTRICITY CONSUMPTION (GWh)TOTAL MARKET YEAR

2011 2012 2011 2012 2011 2012 2011 2012

-0.5%

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Prospects for State of Rio

Investments of R$ 211.5 billion in the State of Rio de Janeiro

Oil

R$ 107.7 bn50.9%

Tourism

R$ 1.8 bn0.9%

OthersR$ 1.9 bn

0.9%

Olimpic FacilitiesR$ 8.6 bn

4.1%

InfrastructureR$ 51.0 bn

24.1%

Transformation IndustryR$ 40.5 bn19.1%

Period 2012-2014

Source: Firjan (Industry Federation of Rio de Janeiro)

Events Schedule

Confederations Cup

World Youth Day

World Cup

Olympics

Paralympics

Jun, 15 to 30/2013

Jul, 23 to 28/2013

Jun, 12 to Jul, 13/2014

Aug, 5 to 21/2016

Sep, 7 to 18/2016

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Economic activity leading to more demand

Rio de Janeiro

Maracan (ND) Porto Maravilha (ND) Morar Carioca (ND) Aeroporto Tom Jobim

(5MW) Estaleiro Inhauma (ND) Atento (2MW) Expanso Nova Amrica

4MW

Petrobras(15MW)

CSN (100MW) Gerdau(30MW)

Usiminas(20MW)

LLX (40MW) Base

Naval(25MW) Hotel Comfort

(3MW)

Gerdau (90MW) Shop. Campo

Grande (3MW) Rolls Royce

(3MW)

Nestl(3MW)

Bio Manguinhos (ND) Hermes (3MW) Votorantin (ND) Ongoing (ND) Bunge (ND)

AMBEV (2MW) GE (6MW) Shop. Metropolitano

RHI(5MW)

Lavazza(3MW)

Ajebras(5MW)

Reluz (ND) Embelleze

(5MW)

MRS(ND)

AMBEV (ND) NeoBus

(10MW)

Coquepar (42MW) Procter & Gamble

(10MW) Alpargatas (ND)

The State of Rio de Janeiro will attract $ 250 billion as investments by 2016

Source: AssociaoBrasileira de Municpios

Centro

TecnolgicoFundo(ND)

Shopping Village Mall(7MW)

Edifcio TishmanSpeyer (5MW)

Expanso Via Parque(2MW)

Casa Granado(3.5MW)

Hospital So Lucas10


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2011 2012

Collection rate by segment

102.5%

YEAR

97.4% 98.0%

96.4%94.3

%

101.0%

98.8%

102.6%

2011 2012

Total Retail LargeClients

PublicSector

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Losses12 months

33.3%

Technical lossesGWh

% Non-technical

losses/ LV Market

% Non-technical

losses /LV Market -

Regulatory

Non-technical lossesGWh

Reflects exclusion of longterm delinquent customers

from the billing system,according to Resolution414 by Aneel.

Sep/11 Dec/11 Jun/12Mar/12 Sep/12Sep/10 Dec/10 Jun/11Mar/11Jun/10 Dec/12

42.2%40.7

%

41.2%

40.4%

43.1%

45.4%

42.4%

42.1%

41.8%

41.6%

41.3%

5,316

2,328 2,349

5,229

7,5827,627 7,665

2,335

5,247 5,615

2,432

8,047

5,457

2,381

7,838

5,330

2,5292,214

6,097

2,197

5,352 5,312

2,231

5,278

2,215

5,326

2,293

7,5498,626

7,544 7,5437,493 7,619

37% Risky Area

63% Non-RiskyArea

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New Technology Program

Technology used in regions in which conventional measures are not

effective

Areas that present high levels of non-technical losses

Light aims to reduce losses through investments in new technologies, integration ofoperational activities, increase of public awareness and institutional partnerships withinterested agents.

Grid shielding projects

Actual grid Shielded grid

Control room

3m

9m

Lowvoltage

Mechanical Meter

Medium

voltage

Display

Lowvoltag

e

Medium

voltage

Centralize

d meter

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2010 2011 2012

New Technology Program

Monitoring, reading, cutting and

reconnection of customers telemetryMCC (Measuring Center Centralized)

Prioritization in areas of high losses andaggressiveness to the network

Technology hindering inappropriateinterference in networks

Meters Installed

(Thousands)

(ITRON) (LANDIS GYR.CAM and ELSTER)

CENTRALIZEDINDIVIDUAL

72

38

11038

38

2010 2011 2012

208

341

170

303

2010 2011 2012

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New Technology ResultsIndividual

Losses (before): 26%

Losses (current): 7%

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New Technology Results

Losses (before): 48%

Losses (current): 14%

Centralized

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Zero Losses AreaArea: Nova Cidade Neighborhood - Nilpolis

FEATURES LV MV TOTAL

Clients 10,083 3 10,086

Network (KM.) 50 23 73

Transformer (QTY.) 107

Power (MVA) 12.9

RESULTS 2010 2011

Collection (R$ MN) 8.9 10.3

Non-technical losses 41.7% 7.4%

Nov/10 Dec/11

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Losses Reduction - Business CaseAn example

300 kWh

100 kWh

REALCONSUMPTION

BILLEDCONSUMPTION

NEW METERINSTALLATIO

N

200 kWh

LOST ENERGY

ENERGY

SAVED100 kWh

BILLED CONSUMPTIONINCREASE

100 kWh

OTHER EFFECTS (BY-PRODUCTS):

CAPEX GOESTO THE RAB

BAD DEBTPROVISIONREDUCTION

OPERATIONALCOSTS

REDUCTION

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Transformation of risky areas

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Tabaj.e Cabr.

Borele Casabranca

Transformation of risky areas

Batan

Cidade deDeus

S. Marta

Mang.e Babil.

Alemo

Formiga

Andara

Macacos

Salgueiro

Cantag.e Pavoz.

64.7 thousand clientsinside pacified

communities with newmeters and network

Santa Marta Before After

Clients 73 1,605

Losses 90% 6%

Delinquency 70% 2%

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GENERATIONBUSINESS


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Installed Capacity868 MW

HPP Santa Branca

56 MW

HPP Ilha dosPombos 187 MW

HPP Fontes Nova132 MW

HPP UndergroundNilo Peanha - 380 MW

HPP Pereira Passos100 MW

SP

RJ

HPP SantaBranca

Paraiba do Sul River

HPP Ilha dosPombos100%

100%

100%100%100%

LajesComplex

51%

SHP Paracambi

13 MW

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Re-pricing of existing energy

Contracted Energy (Regulated) Contracted Energy (Free) HedgeAvailable Energy

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

475

122

53

340

304 282 251 243 238 228 228 228

52

206 228 259 267 272 282 282 282

25 25 25 25 25 25 25 25 25 25

553 539 535 535 535 535 535 535 535 535

Energia contratada (ACR) Energia contratada (ACL) Recursos disponveis para comercializao HedgeAverage sale priceto free market

(R$/MWh)128 135 148 151 155 157 157 157 157 157

Conventional Energy Balance

Assured energy (MW average)

Database january. 2012 Average price to Regulated Market (dec/11): R$ 75/MWh

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Generation Expansion

SHP Lajes Installed Capacity: 17 MW The construction is to be started by the

2nd half of 2012. Operational Start: 2nd half of 2014;

Installation License already issued.

HPP Itaocara

Installed Capacity: 151 MW The construction is to be startedby the end of 2012.

Commercial Operational Start:2nd half of 2015.

Preliminary License alreadyissued.

SP

RJ

Paraiba do Sul River

LajesComplex

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Renova

(1) Share of RR Participaes SA out of the control block

By the middle of 2011, Light signed an investmentagreement of $360 million and the PPA (Power

Purchased Agreement) of 400MW of installed capacityto have 25.9% stake at Renova. This year BNDESPARis becoming a shareholder after a capital increase inRenova. Light keeps a 21.99% stake.

Light21.99%

RRParticipaes

21.99%

Controlling

Shareholders64.6% CS

Light

32.3% CS

0% PS

RR Participaes

32.3% CS

0% PS

Shareholder Structure

December 2012

Location

Wind Farms

Inventory (SHPs)

Basic Projects (SHPs)

Auctions Performance

The biggest winner in the Reserver Energy Auction of 2009

The biggest winner in the Reserver Energy Auction of 2010 2nd largest winner in the Auction A-3 of 2011

Companys Portfolio

41.8 MW of SHPs in operation under the PROINFA contract

294.4 MW of wind energy under construction to start the

operation in Jul/2012

808.3 MW of contracted wind energy to be delivered between2013 until 2017

Pipeline 5.8 GW under development

Projects in the same area providing synergies and scale gains

RR Participaes

21.99%

Light21.99%

RR Participaes (1)8.5%

BNDESPAR12.1%

InfraBrasil

15.2%

Santander

3.0%

FIP Caixa Ambiental

7.1%

FIP Santa Barbara6.1% Others

4.0%

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Renova - Contracts

Contract SitesTerm

(years)Index

OperationStartup

(Estimated)

Installed

Capacity

(MW)

AverageLoad

Factor(%)

EstimatedEnergy(MW

average)

CAPEX

/MWinstalle

d(R$MN)

LoanTariff(R$/M

W)

SHPP 3 20 IGPM

Inoperation

since2008

41.8 61.3 24.2 4.901BNB

Contracted182.06

LER 2009 14 20 IPCAInoperation

sinceJul 2012

293.6 50.8 148.9 (*) 3.996BNDES

Contracted160.65

LER 2010 6 20 IPCASep 2013

162.0 52.7 86.8 (*) 3.878BNDESEligibility

130.76

Y-3 2011 919 yearsand 10months

IPCAMar -2014

212.8 50.5 108.1 (*) 3.245BNDESEligibility

100.91

Y-5 2012 1 20 IPCAJan 2017

22.4 - - - - 90.07

PPA Light 1 10 (E) 20 IPCASep -2015

200.0 50.5(E) 100 (E) 3.245 - -

PPA Light 2 10 (E) 20 IPCA Sep -2016 200.0 50.5 (E) 100 (E) 3.245 - -

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Belo Monte - Overview

51.0% CS0.0% PS

49.0% CS100.0% PS

Amaznia EnergiaParticipaes S.A

Norte Energia S.A

(Belo Monte)

9.77%

74.5% of total stock 25.5% of total stock

Technical data on the concession:

Concession period 35 years

End of concession August 25, 2045

Technical data on the project:

Installed capacity 11,233 MW

Main engine room 11,000 MW

Auxiliary engine room 233 MW

Assured Energy (Average MW) 4,571 MW

Reservoir 516 Km

Flooded area/generation ratio of 0.05 Km/MW

5,000 families affected

Estimated project cost (April 2010) R$ 25.8 billion

Other Informations:

Amaznia Energia will own 9.77% of the enterprise.

Construction works estimated to take 9 years.

Transaction does not affect Light s dividend flow

BNDES loan ensures leverage at low cost on favorable terms.

Tender 30 years, fixed installments. 85% of items

financiable. PSI line.

Amaznia Energias equity in the project estimated at R$ 150 million (Apr.

2010), to be disbursed over 6 years.

Expansion of generation portfolio:

Increases Lights total generation portfolio by 280 MW

Norte Energia S.A. Shareholders Profile

Public secto r49.98%

Others privates30.25%

Amaznia Energia9.77%

Self Prod .10.00%

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1

GuanhesTOTAL CAPEX

R$ MillionPCH

Dores deGuanhes

Senhora doPorto

Jacar Fortuna II Total

Installed Capacity(MW)

14 12 9 9 44

Assured Energy(MWaverage)

8 6.77 5.15 5.11 25.03

ANEEL Authorization 11/22/2002 10/08/2002 10/29/2002 12/21/2001

Operation - Start up Dec/13 Dec/13 Feb/14 Oct/13

Authorization Term 30 years (with renewal for 20 years)

269.2

60.2

57.8

151.2

Equity

Debt

Light Energia

Cemig GT

BNDES

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New Generation Projects

Installed Capacity (MW)

InstalledCapacity

Capacity AfterExpansion

Investments in Renova, Belo Monte and Guanhes. In line with our strategyof growing in the generation business

Considering 51% stake

Considering 21.9% stake

Considering 2.5% stake

+ 59.8%

(+) BeloMonte

(+) SHPParacambi

(+) SHPLajes

(+) HPPItaocara (+) Guanhes(+) Renova

1,505

1374* 9

77

175

280

855

(+) RenovaCurrentCapacity

* 9 MW SHP + 65 MW Wind Farm (since jul/12)

942

22

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RESULTS


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Net Revenue

Industrial6.8%

NET REVENUE (R$MN)

Generation6.3% Distribution

89.6%**

NET REVENUE BY SEGMENT (2012)*

Commercialization4.1%

* Eliminations not considered

** Construction revenue not

considered

NET REVENUE FROM DISTRIBUTION (2012)

Commercial30.1%

Others (Captive)12.6%

Network Use (TUSD)(Free +Concessionaires)9.4%

Residential41.1%

ConstructionRevenueRevenue w/out construction

revenue

4T11 4T12 2011 2012

+19.2

1,815.1

2,162.9

4Q124Q11

199.3

1,577.3

1,963.6

237.8

+9.6%

20122011

6,150.1

6,943.8

669.3794.7

6,944.8

7,613.

1

24.5%

12.9%

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Operating Costs and Expenses

Manageable(distribution): R$1,103.4(18.5%)

Generation andCommercialization: R$

445.1(7.5%)

Non manageable(distribution): R$4,410.8(74.0%)

* Eliminations not considered

** Construction revenue not

considered

DISTRIBUTION MANAGEABLE COSTS (R$MN)COSTS (R$MN)*

2012

279.7

149.1

-46.7%

4Q124Q11 20122011

1,258.9 1,103.4

-12.4%

R$ MN 4Q11 4Q12 Var. 2011 2012 Var.

PMSO 149.6 176.0 17.6% 646.8 692.0 7.0%

Provisions 56,8 250.2 340.8% 299.4 473.1 58.0%

PCLD 35.3 109.4 210.2% 251.3 282.6 12.5%

Contingencies 21.5 140.8 554.9% 48.1 190.5 296.0%

Depreciation 72.3 80.4 11.1% 306.8 293.3 -4.4%

Other operational/revenues expenses

1.0 (357.5) - 6.0 (355.0) -

Total 279.7 149.1 -46.7% 1,258.9 1,103.4 -12.4%32


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EBITDA

CONSOLIDATED EBITDA (R$MN) EBITDA BY SEGMENT*

2012

Generation 23.0%(EBITDA Margin: 76.4%)

Commercialization1.9%

(EBITDA Margin: 9.5%)

Distribution75.2%(EBITDA Margin: 17.4%)

*Eliminations not

considered

Distribuio;

1.127,4;75,59%

Gera22,5

Comercializao;

27,8;1,86%

483.9

323.6

+49.5%

4Q11 4Q12 2011 2012

1,456.2

1,237.8

+17.7%

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EBITDAAjustado -

2T11

Ativos ePassivos

Regulatrios

EBITDA -2T11

ReceitaLquida

Custos NoGerenciveis

CustosGerenciveis

(PMSO)

Provises EBITDA -2T12

Ativos ePassivos

Regulatrios

EBITDAAjustado -

2T12

EBITDA

871,3251,238

794

(706) (75)

3811,456

325 1,782

EBITDA 2011 / 2012(R$ MN)

+ 34.5%

+ 17.7%

(175)

EBITDA2011

EBITDA2012

NetRevenu

e

Non-Managable

Costs

ManagableCosts

(PMSO)

Provisions

RegulatoryAssets andLiabilities


AdjustedEBITDA

2011

AdjustedEBITDA

2012

Otheroperational/

revenues

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LL Ajustado-2011

Ativos epassivos

Regulatrios

2011 EBITDA ResultadoFinanceiro

Impostos Outros 2012 Ativos epassivos

Regulatrios

LL Ajustado-2012

EBITDAAjustado -

2T11

Ativos ePassivos

Regulatrios

EBITDA -2T11

ReceitaLquida

Custos NoGerenciveis

CustosGerenciveis

(PMSO)

Provises EBITDA -2T12

Ativos ePassivos

Regulatrios

EBITDAAjustado -

2T12

Net Income

ADJUESTED NET INCOME2011 / 2012 (R$ MN)

+ 24.0%

399 58342

218

(85)(57)

6 424

215 639

+ 59.9%

2011 2012EBITDA

FinancialResult

Taxes OthersRegulatoryAssets andLiabilities


AdjustedNet Income

2011

AdjustedNet Income

2012

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Dividends

2007 2008 2009 2010 2011 2012

100% 100%

76.3%81.0%

100.0%

86.5%

50%

Minimum Dividend PolicyPayout

1S08 2S08 1S09 2S09 1S10 2S10 1S11 2S11 1S12 2S12 1S13

203

351408

187

432363 351

118182 170

92

87

87

4.2%

8.2%9.9%

1.7%

8.1% 8.1%6.1%

3.4% 3.3%5.4%

2.4%

Dividend Yeld*Dividends

*Based on the closing price the day before the announcement.

Intereston Equity

257

182205

351363

432

187

408

351

203

92

*Based on Net Income of the year. before IFRSadjustments

*

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Indebtedness leverage

Net debt = total debt (excludes pension fund liabilities) cash

Net Debt Net Debt/ EBITDA

InvestmentGrade(brA)

1,580

2008

1,637

2009

1,947

2010

1.1 1.2 1.2

2011

3,383

2.7

Rating(brA + )

Rating(Aa2.br)

Rating(AA-(bra))

Dec/11

2012

2.9

4,273

Net Debt (R$ MM) and Net Debt / EBITDA

37


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set/12 dez/12

20092010

CustoReal

2009 2010 2011 2012

Custo Nominal Custo Real

Indebtedness

3T10

Average Term: 4,2 years

AMORTIZATION SCHEDULE* (R$ MN)

Nominal Cost Real Cost

Dec/12Dec/11

3,383.24,273.1

NET DEBT

2.7 2.9

*ConsideringHedge

* Principal only

COST OF DEBT

US$/Euro0.8%

CDI/Selic72.1%

TJLP

25.1%

201120102009

2.24%

8.21%

5.30%

9.84%

4.87%

11.08%

4.25%

11.03%

2012

Net Debt / EBITDAOthers2.0%

481671

784 886

1,796

2009 2010 2011 2012

2010 2011 2012

Custo Nominal Custo Real

2013 2014 2015 2016 After2017

The pre payment of R$ 375 million in October reduced the cost of debt and extended the amortization schedule

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2008 2009 2010 2011 2012

Investments

2008 2009 2010 2011 9M11 9M12

CAPEX (R$ MN) CAPEX BREAKDOWN(R$ MN)

2012

201020092008

563.8546.7

928.6

700.6

2011 2012

796.8

GenerationProjects

1.9

QualityImproveme

nt122.7

GenerationMaintenanc

e23.7

Others206.8

Develop. ofDistribution System

215.7

LossesCombat

199.8

Investments in Electric Assets(Distribution)

694.1

102.7

453.8

92.9

446.9

116.9

518.8

181.8

774.8

153.8

Commerc./Energy

Eficiency26.1

Desenvol

v.do Sistema

de Distribui

o $215,7

da

os,8

39


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Why invest in Light?

Major upcoming events Integration of favelas Pro-business environment New plants investments Expansion of the existing ones Market growth

EconomicTransformation

in theConcession Area

Progress in the TechnologyProgram

New network and meters in thepacified favelas

Smart metering development Zero Losses Area Program

EnergyLosses

Reduction

Investment in Renova. BeloMonte and Guanhes (total of477 MW)

SHP Lajes under construction. HPP Itaocara

Growth in theGenerationBusiness

New PPAs starting in 2013and 2014

Revenues increase with noaditional costs.

Very active trading subsidiary

Repricing ofExisting Energy

Listed in Novo Mercado ofBovespa;

Board Committees very active Included in the Sustainability

Index (ISE) of Bovespa for thesixth year.

Best-in-ClassCorporate

Governance

Sound Dividend Policy:minimum 50% of net income;

Average payout since 2007:91%

Dividend trackRecord

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Regulatory Framework

The Provisional Measure 579 was enacted on September 11, 2012 and thereafter converted into Law

12,783 providing for electric power concessions, reduction of sector charges and reasonable tariffs which

although these have not directly affected Light, as its concessions will expire only in 2026, resulted in the

following developments:

on January 24, 2013, Resolution issued by Aneel approved an average reduction of 19.63% in Light

SESAs tariffs. For residential consumers (low voltage), the reduction was 18.10%. The measure willhave no impact on the companys result or cash flow since it reflects an equal reduction in costs.

on the same date, the distribution of power plants energy quotas was ratified, which had their

concession renewed:

(i) but lower to the distribution companies contracting needs, thus, causing an involuntary exposure,

and only for Light it accounted for average 156 MW; and

(ii) made distribution companies to start sharing the hydrological risks, which before was only

supported by generation companies

As of October 2012, an adverse hydrological situation was characterized in Brazils electricity sector, the

basis of which is mainly hydric, enforcing the System National Operator to dispatch all the thermal power

plants available in the system, thus significantly rising the costs of distribution companies by increasing

fuel expenditures in availability agreements, increasing System Service Charges due to energy security and

acquisitions on the spot market in order to answer that involuntary exposure.41


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On March 8, 2013, the federal government issued the Decree 7,945 preventing the coverage of non-

manageable costs related to thermal plant dispatch, involuntary exposure and hydrological risk not covered

by the 2013 tariff, as follows:

Eletrobrs will transfer the resources of Energetic Development Accout (CDE) directly to the

concessionaires on the same dates and to the same accounts as the respective monthly transfers of

the Electricity Trading Chamber (CCEE) financial guarantees.

Aneel will publish the monthly dispatches with the amounts to be transferred by Eletrobrs via the

CDE (energy development account).

System Service Charge (ESS) The monthly transfer will be determined by the difference

between the amounts settled in the CCEE and the tariff coverage defined in the last adjustment.

Involuntary Exposure associated with the quotas The monthly CDE transfer will cover the

difference between the difference settlement price (PLD) and the acquisition tariff of the

repositioning amount recognized in Lights last tariff adjustment.

Hydrological Risk -The net monthly amount settled in the CCEE will be transferred directly via the

CDE.

The remaining energy purchase and ESS costs not covered by the decree, including fuel costs of

availability contracts not included on tariffs, will continue going towards the formation of the regulatory

assets and liabilities (CVA) to be determined in Lights November/13 Tariff Revision.

Regulatory Framework

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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 anyresponsibility 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.43


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Contacts

Joo Batista Zolini CarneiroCFO and IRO

Gustavo WerneckIR Manager

+ 55 21 2211 [email protected]

www.light.com.br/ri

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