institucional 2 q11 novo padrão eng

INSTITUTIONAL

PRESENTATION

July, 2011

2

Agenda

►Financial Performance

►Portfolio Overview

►Value Creation

►Company Profile

3



►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

� Controlled 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$2.1 billion in

2010.

• 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

RS

SC

PR

SP

MG

GO

MT

AC

AM

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MAPA

AP

TO

CE RN

PEAL

SE

MS

RJ

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DF

PB

RS

SC

PR

SP

MG

GO

MT

AC

AM

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PI

MAPA

AP

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CE RN

PEAL

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MS

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PB

May. 2004 Mar. 2006 Apr. 2006 Dec. 2007 Feb. 2008 Apr. 2008 Oct. 2008Abr. 2010

Dec. 2009 Apr. 2010 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 the “Novo Mercado”

Acquisition of 25% of Geramar

FIP PCP sells its indirect stake in

Light

Equatorial’s spin off

Equatorial’s History

6

Ownership Structure – Current

• Total no. of shares:

• Share price*:

• Free float:

• ADTV90:

109,226,672

R$ 11.12

46.3% / R$556 MM

R$ 2.263 MM

*On 08/05/11ADTV90 represents the average volume traded in the past 90 days

EquatorialEnergia

SolenergiaGeramarCEMAR

PCP Latin America Power

53.7%

65.1% 25%

Equatorial Soluções

Minorities

46.3%

100% 51%

7

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 willcreate growth opportunities for Equatorial.

� Geramar thermal plants present an above average rate of return

8

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

Management

• 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

Carlos Piani

Chairman of the Board ofDirectors

Eduardo Haiama

CFO & IRO

Tinn Amado

Regulatory AffairsOfficer

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

• 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).

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

526

810 879999

857

1,358

629

1,148

1,756

1,347

2004 2005 2006 2007 2008 2009 2010 (*) 1S11 (*)

CEMAR Light Geramar

2.346 2.506

36

23

1,799

880

2004 2005 2006 2007 2008 2009 2010 (*) 1S11 (*)

Net Revenue 526 629 810 879 2,346 2,506 1,799 880

EBITDA 85 189 341 379 784 757 510 236 % EBITDA 16% 30% 42% 43% 33% 30% 28% 27%

341379

416

226

287

500

85

470

189

368

2004 2005 2006 2007 2008 2009 2010 (*) 1S11 (*)

CEMAR Light Geramar

784 757

24510

10 236

12

Distributions to Shareholders/Net IncomeR$ million


* 2008 figure includes R$82 million in Capital Reduction

-

108

151

284

197

123

229

119

153

207189

54 51

300

2004 2005 2006 2007 2008 2009 2010

Dividends Net Income

2004 2005 2006 2007 2008 2009 2010

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

CEMAR - 54 108 112 91 58 200

Light - - - 27 111 56 -

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

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

CEMAR (31) 234 116 117 148 129 279

Geramar - - - - - - 6

Light - - - - 130 79 -

2004 2005 2006 2007 2008 2009 2010

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

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

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, 25.0% Geramar and 13.03% Light). Light is no longer consolidated as from 2010.

221 198

402

675

499

77

689

5

2.1

4.0

1.6

0.00.3

0.91.6 1.5

2004 2005 2006 2007 2008 2009 2010 1S11

14


made a longer debt amortization schedule possible…

Debt Amortization Schedule - R$ MM

226

352

123

117

300

1,213

95

105 65

41

Gross Debt Short Term 2012 2013 2014 2015 After 2015

CEMAR

Geramar

Short Term 2012 2013 2014 2015 After 2015 Total

CEMAR 226 95 352 123 117 300 1,213

Geramar 65 - - - - 41 105

Total 291 95 352 123 117 340 1,318

15

Investments

Investments - R$ MM

and a significant increase in investments.

306

394

465

137141

191

399232

419

70

0.2

16

24 107

2004 2005 2006 2007 2008 2009 2010 1S11

CEMAR Light Geramar

2004 2005 2006 2007 2008 2009 2010 1S11

CEMAR 70 232 306 394 465 419 399 191

Light - - - - 137 141 - -Geramar - - - - 24 107 16 0.2

Total 70 232 306 394 626 667 415 191

16

Agenda



►Value Creation

►Company Profile

17

46%

10%

24%

20%

87%

1%

5%7%

Residential Commercial Industrial Others

CEMAR: Highlights

MA

� Distribution company in the State of Maranhão

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

� Billed energy (2010): 4,146 GWh (5th largest in the

Northeast)*

� Annual gross revenues of R$ 2.1 billion in 2010.

Energy Sales (2010)

Clients (2010)

1.8 million

4,146 GWh

*Source: ABRADEE

RS

SC

PR

SP

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PI

MAPA

AP

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CERN

PE

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MS

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DF

PB

RS

SC

PR

SP

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MT

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18

CEMAR: History

CEMAR under control ofEquatorial

1958-Jun. 2000

Aug.2000-Aug.2002

Aug.2002-May2004

May 2004-Present

State owned

CEMAR under PPL Global’scontrol

ANEEL’s intervention

CEMAR under control ofEquatorial

19

CEMAR: Ownership Structure

CEMAR

OthersEquatorial EnergiaEletrobras

65.1% 1.3%33.6%

20

Tariff Review Results

CEMAR 2005 2009

Gross RAB 1,756 2,247

Net RAB 836 1,121

Reference Company 217 265

Regu latory Depreciation 68 102

Regu latory EBITDA 157 271

Regu latory Losses 28.0% 25.6%

Deliquency Rate 0.5% 0.9%

X Factor 1.19% 1.06%

*All values are nominal and in R$ million.

21

CEMAR: Distribution

• 1.8 million clients in 217 municipalities, covering

the whole state of Maranhão (total area 333,000

km²)

• Energy sales reached 2,069 GWh in 1S11, 4.3%

higher than in 1S10.

• In 1S11, energy losses represented 21.4% of

required energy, 0.8 p.p. less than the 22.2%

recorded in 1S10.

• Service quality has been presenting positive

evolution. Since 2003, DEC and FEC indices

have dropped 71.2% and 69.2%, respectively.

• More than 290 thousand clients connected by

the Light for All Program.

2004 2005 2006 2007 2008 2009 2010 (***) 1S11 (***)

Energy Sold GWh 2,593 2,793 2,917 3,223 3,347 3,566 4,146 2,069

Net Revenues R$ MM 495 665 810 879 999 1,148 1,756 857

PMSO R$ MM 127 126 129 126 139 171 245 135

PDA + Contingencies R$ MM 47 20 14 30 32 33 68 22

EBITDA R$ MM 93 189 341 379 415 470 500 226

Net Income R$ MM (31) 359 177 222 227 198 279 121

Dividends R$ MM - 85 165 172 140 58 200 -

Net Debt R$ MM 362 305 291 421 673 768 499 915

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

Clients '000 1,161 1,254 1,349 1,438 1,535 1,688 1,822 1,884

PMSO/Client R$/Client 109 101 95 88 90 101 134 71

EBITDA/Client R$/Client 80 150 253 264 270 278 274 120

DEC (*) Hours/Year/Client 63.4 54.6 42.6 28.7 27.3 23.6 21.8 19.6

FEC (*) Times/Year/Client 39.3 32.9 24.6 19.8 16.8 15.2 14.1 11.5

Total Losses (*) % 29.9% 29.5% 29.8% 28.7% 28.9% 25.2% 22.0% 21.6%

CAPEX R$ MM 45 103 137 199 278 239 197 106

PLPT (**) R$ MM 25 129 169 195 187 180 202 85 (*) Last 12 months

(**) Light For All Program

(***) Values according to IFRS

22

CEMAR: Energy Losses

Total Losses over Required Energy

(last 12 months)

28.7%28.1%

28.9% 28.6% 28.9% 28.5% 28.1%

26.4%

22.2% 22.0%21.6% 21.4%

24.2%

22.2%25.2%

4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11

Total Losses

24.3%

Regulatory Target

(from Aug-10 until Jul-11)

Non-technical Losses over Low-Voltage Market

(last 12 months)

30.4%29.0%

30.6% 29.9% 30.0%28.7%

27.3%

15.7% 15.2% 15.4%

19.5%23.7%

21.5%

15.9%15.7%

4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11

Non-technical Losses

21.5%

Regulatory Target

(from Aug-10 until Jul-11)

23

CEMAR: DEC/FEC 2009 Evolution Comparison

Bet

ter

DEC (hours)

10264

554645

4241

322929

2727

24222121

1715141312

108

CELPACEMAR 2004CEMAR 2005

CELTINSELETROACRE

CEMAR 2006CEPISACERONCEMAT

CEMAR 2007COELBA

CEMAR 2008CEMAR 2009CEMAR 2010

CELGCEAL

CELPECEB

SULGIPECOSERN

CHESPENERSUL

COELCE

FEC (times)

5344

393333

3230

2525

2220

1716

1515

1414

1311

777

6

CELPAELETROACRCEMAR 2004

CELTINSCEMAR 2005

CEPISACERONCHESP

CEMAR 2006CEMAT

CEMAR 2007CEMAR 2008

CELGCEB

CEMAR 2009CEAL

CEMAR 2010SULGIPECOELBA

ENERSULCOSERN

CELPECOELCE

Severity Index

4,591

6473

189

474

599

646

656

693

717

736

959

963

1,069

1,082

1,083

1,123

1,208

1,302

1,372

1,446

1,487

1,540

1,574

1,589

1,843

2,042

2,203

2,489

2,510

2,9183,229

4,010

CPFL PIRATININGAAMAZONASCEBCOELCECEMATCEMAR 2007CELGCEMAR 2008ENERGISA SEELEKTROELETROPAULOCEMIGCEMAR 2005CPFL PAULISTAENERGISA PBRGELIGHTBANDEIRANTECOSERNCELPECEMAR 2009AMPLACOPELCEEECOELBACELESCCELTINSENERSULCEMAR 2004CEMAR 2003ESCELSACELPACEMAR 2006

Frequency Index

20.6

8.7

7.7

7.6

7.6

6.8

6.6

6.2

6.0

5.8

5.8

5.5

5.4

5.3

5.0

4.9

4.5

4.3

4.2

4.2

3.9

3.9

3.1

3.1

2.8

2.6

2.4

1.9

1.8

1.4

1.2

1.1

1.0

19.1

CEMAR 2007CEMAR 2009CEMAR 2008ELEKTROCEMAR 2005CEMAR 2006ELETROPAULOCPFL PIRAT.BANDEIRANTEAMAZONASCOELCECOELBACEEECEMIGCPFL PAUL.CEMAR 2004CELPECELPAAMPLAESCELSALIGHTCOPELENERGISA PBCOSERNCEBRGEENERGISA SEENERSULCELGCEMAR 2003CEPISACELESCCEMATCELTINS

24

CEMAR: Accident Index – Total Workforce 2009

Bet

ter

25

Geramar: Ownership Structure

GNP

Geramar

Ligna

50%

25%

Servtech

EquatorialEnergia

Fundo de Investimento em

Participações Brasil

50%

25%50%

26

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.

SOL Energias – Energy Trader

• Equatorial may invest R$ 6.0 million into SOL Energias equity (energy trading and developer of newproducts and services), thus retaining 51.0% of its total shares.

• The amount invested will be used in the energy trading working capital.

Executives

51% 49%

• Main Executive-Partners: • Paulo Cezar Tavares (former CPFL’s vice-president of Energy Management).• Roberto Wainstok (former CPFL Brasil’s Executive Officer of Energy Purchase and Sales)• Antonio Pinhel (former Neoenergia Energy Market and Commercial Manager)

• Energy Trading Business: • Complex regulation and energy pricing• Potential market:

• Free customers (representing between 25% and 30% of the brazilian energy market), with more than 980 consumers;

• Captive (government auctions);• Fragmented market: more than 90 active tradings.• Intermediation of energy purchase and sale, without physical delivery;• Solutions customizing to supply specific needs from clients (consumers and generators).



PAULO CEZAR TAVARES (SOL’s CEO)

• Pioneer in this market and main responsible by the development of CPFL Brasil – biggest brazilian trading (aprox. R$200 million in annual net income) and NC Energia (energy trading of the Neoenergia Group);

• Professional with a huge experience in energy trading, active since 2001;

• Brief Resumee:

• CPFL Energia: Vice-president of Energy Management (2002-2011)• Abraceel: Board member of the Brazilian Energy Trading Association since 2003.• NC Energia (former GCS Energia): CEO (2001-2002)• Celpe: CEO (1998-2000)• Grupo Eletrobras: several.

30

Agenda



►Value Creation

►Company Profile

31

Financial strength and solid management team with turnaround experience

Growth prospects and consolidation opportunities

Result-oriented management model

High level of

Corporate Governance

Agenda

32

Firmino SampaioCEO

Eduardo HaiamaCFO and IRO

Thomas NewlandsIR Analyst

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

E-mail: [email protected]

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

Contacts

33

► This presentation may contain forward-looking statements, which are subject to risks and uncertainties, as they were based on the expectations of Company’s management and on available information. These prospects include statements 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 or suggested by said forward-looking statements. Many factors and values that can establish these results are outside Company’s control or expectation. The reader/investor is prevented not to completely rely on the information above.

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

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

Disclaimer