7/27/2019 Light Newsletter IR - Year I - N

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INVESTOR RELATIONS Bi-monthly Newsletter Year I N. 1

3rd TARIFF REVISIONCYCLE

n August 6th, the Brazilian ElectricityRegulatory Agency (ANEEL) disclosed the

preliminary proposal for the Third Tariff Revisionto be applied in November. ANEEL proposes areduction of 3.28% in residential consumer billsand an average reduction of 6.70% for the high-voltage market. For medium-voltage consumers,the regulatory agency proposes an adjustmentof - 1.48%.

Regarding the Regulatory Assets Base (RAB),the preliminary proposal establishes a GrossRAB of R$11.5 billion and a Net RAB of R$6.4billion. These amounts already include theeffects of the inspection of Asset Under Service,conducted in last April. The Asset AppraisalReport includes the amounts of SmallerComponents (COM) and Additional Costs (CA)defined by ANEEL.

In relation to non-technical energy losses, thestart point in this preliminary proposal for theregulatory target of non-technical energy lossesover the low-voltage market is 31.82%,reflecting the direct application of themethodology defined in the Technical Note. Thereduction speed in the loss curve was calculatedin the preliminary proposal at 1.195 p.p. per

annum, lower than the speed of the previouscycle, which was 1.79 p.p. per annum. The finaltarget for the 3rd cycle would be 25.81%.

The preliminary proposal does not include the

evaluation of ANEELs technical area on therequest for treatment of non-technical energylosses submitted by Light SESA. The executiveboard of ANEEL recommended the creation of awork group made up of Agency experts, in orderto evaluate in situ the real complexity of theconcession and the efforts being made by Light

SESA to combat losses in order to present adiagnosis and recommendation for how tohandle, from a regulatory perspective, theconcessionaire's non-technical energy losses. In

August, a commission composed of six ANEEL

technicians, which was accompanied by Lighttechnicians, visited sites such as Complexo doAlemo, Vigrio Geral, Cosmos and Rio dasPedras, among other communities, to learn moreabout the field work developed by teamsdedicated to combating energy losses.

APZ: ONE YEAR OF SUCCESS

he projectreas de Perda Zero (APZ ZeroLost Areas) is celebrating its first year of

implementation with great success. APZ hasreached 20 units and 318,000 clients in the

Baixada Fluminense, Zona Oeste and Zona Norteareas of the city of Rio de Janeiro. Withinvestments in network protection, installation ofelectronic meters and well-trained workforce,losses fell on average by 26 p.p., from 48% to23%, since the beginning of the project.

The union of the Centralized MeasurementSystems technology and daily operation of ourdedicated teams is key to the success of APZ.Since its implementation in August of 2012, theproject has recorded an average increase of 7percentage points in the collection rate. We wantto reach 30 units and 400,000 clients by the end of2013, which will represent approximately 10%

of all clients of Light, explained MarcoVilela, Ligh ts commercial superintendent.

The project focuses on small clients and areas

with high loss and default ratios. The well-trained teams perform tasks related to electricityprovision services, including negotiations forpayment in installments of clients past due bills.To further expand the programs initiatives, onSeptember 5th, Light and Sebrae signed aprotocol of intentions.

The professionals participating in the APZproject present themselves in the Companysuniform and act as consultants for evaluating theentire electricity network, giving tips for savingenergy, updating clients registrations, verifyingmeters, fixing electricity connections andeliminating illegal connections.

LIGHT DISCLOSED

2ND

QUARTERRESULTSThe union of the

Centralized MeasurementSystems technology and

daily operation of ourdedicated teams is key to thesuccess ofAPZ.Marco Vilela.

FUNCTIONAL TOOLS ARE IR

WEBSITE HIGHLIGHTS

n 2Q13, net income totaled R$58.2million, 46.2% more than in 2Q12, mainly

driven by the operating performance of thedistribution and generation segments and thereduction in net financial expenses.Considering the regulatory assets and liabilities(CVA) of the distribution company, not includedin the statement of income, adjusted netincome totaled R$136.9 million; 52.5% up on2Q12.

In 2Q13, total energy consumption rose by2.5% in relation to the same period last year,mainly driven by the 5.1% increase incommercial consumption and the 4.1% rise inindustrial consumption.

Consolidated net revenue in the first half of2013 was R$1,671 million; 2.6% up the sameperiod in 2012. Consolidated EBITDA (incomebefore interests, taxes, depreciation andamortization) was R$277.9 million in 2Q13,8.9% up year over year. Adjusted for theregulatory asset (CVA), 2Q13 adjusted EBITDAstood at R$397.2 million in 2Q13, 20.1% upfrom 2Q12.

Collections performed well in 2Q13, reaching

104.2% of billed consumption, 0.3 p.p. up year-on-year, chiefly due to the ongoing defaultcombat program.

Non-technical energy losses in the last 12months totaled 5,953 GWh, representing44.2% of billed energy in the low-voltagemarket (ANEELs calculation methodology), 1.2p.p. down on December 2012.

iming at facil itating investors access Lightnformation, the IR website, ri.l ight.com.br,

offers an agile browsing, including clarificationsabout the company and the market. Among thetools available, we point out the InvestmentSimulator, the Excel spreadsheets containingdetailed data about the operation and the financialperformance, besides a Regulation sectionincluding information about tariff adjustments andrevisions. In addition, you can follow our InvestorRelations Webpage at main social networks, suchas Facebook and Twitter.

With the Investment Simulator, you can calculatethe return on investment made in the companyshares during a certain period in the past. Any

proceeds and other benefits deriving from holdingthe company shares are converted into afractionary amount of shares by the closing priceon the day immediately preceding the benefit.

The Excel spreadsheets offer an even moredetailed database, updated on a quarterly basis,including information additional to the earningsrelease.

In 2012, the website won the GreatestImprovement IR Website award in Latin Americapromoted by IR Global Rankings. The ratingsystem is based on an extensive technicalresearch on IR websites, where 285 companiesparticipate in the region.

The website makes available Light strategicinformation for our financial analysts, thus, allowinga better communication with them. This awardreiterates we are in the right track, affirms

Gustavo Werneck, Light Investor RelationsManager.

INVESTMENTS

Light invested R$326.7 million in the first half of2013, in line with the 1H12 figure. Thedistribution segment absorbed the largestportion, R$272.8 million, which was allocated toinitiatives aiming to strengthen the network and

improve quality, and to loss combat initiatives(network protection, fraud regularization, etc).

Commercialization and energy efficiencyInvestments increased from R$2.7 million in2Q12 to R$33.1 million in 2Q13, due to the co-generation project with a major beveragecompany.

For more details, access our earnings releaseon our website ri.light.com.br.

This electronic newsletter is intended forLights investors. The bimonthly publication is a joint effort of the Superintendence of Finance and Investor

Relations and the Investor Relations Department, with the coordination of Lights Superintendence of Corporate Communication.Suggestions and questions

can be forwarded to ri@light.com.br . If you no longer wish to receive this newsletter, please contactri@light.com.br.

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