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Corporate Presentation

Corporate Presentation. July 2013. Light Holdings. 2. Light in numbers. 1 IBGE (2010). Generation. 1. Amazônia Energia Renova Guanhães Energia. 2. 3. SHP Paracambi. 6. 4. HPP Itaocara. Complexo de Lajes. 7. HPP Santa Branca. HPP Ilha dos Pombos. 5. 8. 3.

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Corporate Presentation

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  1. CorporatePresentation July 2013

  2. Light Holdings 2

  3. Light in numbers 1 IBGE (2010) Generation 1 Amazônia EnergiaRenovaGuanhães Energia 2 3 SHP Paracambi 6 4 HPP Itaocara Complexo de Lajes 7 HPP Santa Branca HPP Ilha dos Pombos 5 8 3

  4. RankingsAmongthelargest players in Brazil INTEGRATED² Net Revenues 2012 – R$ Billion DISTRIBUTION¹ Energy Consumption in Concession Area(GWh) - 2012 18.5 37,626 15.0 24,714 11.8 22,737 8.5 21,467 20,054 6.9 15,018 6.6 GENERATION PRIVATE-OWNED COMPANIES² Installed Hydro-generation Capacity (MW)– 2012 5,560 2,658 1 – Source: Captive market 2 – Source: Companies reports * Considers the 9 MW of Renova’s SHPs 2,241 2,219 2,012 877 * 4

  5. Shareholders Structure • 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 5

  6. Corporate Governance General Assembly Fiscal Council Board of Directors Finances Committee Human Resources Committee Auditors Committee Governance and Sustainability Committee Management Committee Chief Executive Officer Paulo Roberto R. Pinto Chief Financial and Investor Relations Officer ChiefDistributionOfficer Chief Energy Officer Chief HR Officer Andreia Ribeiro Junqueira João B. Zolini Carneiro Ricardo Cesar C. Rocha Evandro L. Vasconcelos Chief Legal Officer Corporate Management Officer Chief Business Officer Chief Communications Officer Paulo Carvalho Filho Evandro L. Vasconcelos* Luiz Otavio Ziza Valadares Fernando Antônio F.Reis Interim* LGSXY ADR-OTC 6

  7. EnergyConsumptionDistribution – Quarter TOTAL MARKET (GWh) ¹ Others13% +1.8% Industrial5% +3.7% Free19% 6,407 6,291 6,180 6,087 With the consumption no longer billed by the change in criteria, the total energy consumption increase in the concession area would be 5.3% over 1Q12. Residential35% 28.3ºC 27.8ºC 27.0ºC 26.9ºC Commercial28% 1Q10 1Q11 1Q12 1Q13 1Note: To preserve comparability in themarketapprovedbyAneel in thetariffadjustmentprocess, thebilledenergyofthefreecustomers Valesul, CSN and CSA wereexcluded in viewofthesecustomers’ plannedmigration to theBasic Network. 7

  8. Total Market ELECTRICITY CONSUMPTION (GWh) TOTAL MARKET – QUARTER +3.7% 6,407 6,180 835 +3.2% 801 +7.8% 2,423 2,348 1.877 2,091 1.748 1,939 214 5,572 -3.7% +3.7% 191 5,379 962 927 966 932 53 49 1,877 1,748 561 568 913 882 401 359 1Q12 1Q13 1Q12 1Q13 1Q12 1Q13 1Q12 1Q13 1Q12 1Q13 TOTAL OTHERS RESIDENTIAL COMMERCIAL INDUSTRIAL FREE CAPTIVE 8

  9. Prospects for State of Rio Investments of R$ 211.5 billion in the State of Rio de Janeiro¹ Events Schedule Period 2012-2014 Tourism R$ 1.8 bn 0.9% • ConfederationsCup • World Youth Day • World Cup • Olympics • Paralympics Oil R$ 107.7 bn 50.9% 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 Others R$ 1.9 bn 0.9% Olimpic Facilities R$ 8.6 bn 4.1% Transformation Industry R$ 40.5 bn 19.1% Infrastructure R$ 51.0 bn 24.1% ¹Source: Firjan (Industry Federation of Rio de Janeiro) 9

  10. Collection rate bysegment Quarter COLLECTION RATE 12 MONTHS COLLECTION RATE BY SEGMENT QUARTER 104.7% 99.5% 101.0% 100.2% 100.6% 99.2% 97.7% 97.2% 95.0% 92.0% Mar/12 Mar/13 Total Retail Large Clients Public Sector 1Q12 1Q13 10

  11. Losses Reflects exclusion of long term delinquent customers from the billing system,according to Resolution 414 byAneel. 12 months 45.4% 44.9% 43.1% 42.2% 42.1% 41.8% 41.6% 41.3% 41.2% 40.7% 40.4% 32.9% 8,647 8,584 8,047 7,838 7,619 7,544 7,665 7,543 7,493 7,627 7,582 63% Non-RiskyArea 6,029 5,615 6,007 5,457 5,316 5,330 5,312 5,326 5,247 5,278 5,229 37% RiskyArea 2,432 2,618 2,577 2,349 2,335 2,381 2,328 2,215 2,231 2,214 2,293 Mar/13 Sep/10 Dec/10 Mar/11 Jun/11 Sep/11 Dec/11 Mar/12 Jun/12 Sep/12 Dec/12 Technical losses GWh Non-technical losses GWh % Non-technical losses/ LV Market % Non-technical losses / LV Market - Regulatory 11

  12. NonTechnicalLosses ConcessionAreaLossesMap PARAÍBA VALLEY BAIXADA EAST WEST LITORÂNEA As March / 2013 12

  13. New Technology Program Light aims to reduce losses through investments in new technologies, integration of operational activities, increase of public awareness and institutional partnerships with interested agents. Grid shielding projects • Technology used in regions in which conventional measures are not effective • Areas that present high levels of non-technical losses Control room Actual grid Shielded grid Centralized meter 9 m 3 m Mechanical Meter Display 13

  14. New Technology Program Meters Installed (Thousands) 373 341 79 69 227 30 122 80 294 7 272 197 2 115 • Monitoring, reading, cutting and reconnection of customers telemetry– MCC (Measuring Center Centralized) • Prioritization in areas of high losses and aggressiveness to the network • Technology hindering inappropriate interference in networks 78 2012 May/13 2009 2010 2011 FAVELAS OUT OF FAVELAS 14

  15. Pacified Favelas (UPPs) StateGovernment Light • Present in 15 UPPs, 9 alreadyconcluded • 60,000 consumers • 200,000 peopleachieved • 30 UPPsuntil 2014 • 33 UPPsestablished • 130,000 households • 40 UPPsuntil 2014 PARTNERSHIP Safety, citizenship, and social inclusion 15

  16. Zero LossesArea Project: “Light Legal” (APZ – Zero LossesArea) • Focused in areaswith 10,000 to 20,000 clientswithhighleveloflossesanddelinquency; • Fully-dedicated teamsoftechniciansandcommercialagents; • Small areas to cover, enablinghigherproductivity; • Constant andaccurateresultsmonitoringby Light; • Result-linkedremuneration for servicesprovided; • Fixedremunerationabovemarketandaggressive • variableremuneration; • Police Force support, whennecessary. 16

  17. Losses Control Initiatives Results until March/13 Zero LossesArea (APZ) Favelas Averagelossesreduction : 49.5 p.p. AverageCollectionincrease: 80.4 p.p. Averagelossesreduction: 23.0 p.p. AverageCollectionincrease: 14,5 p.p. 17

  18. Losses Reduction - Business Case An example NEW METER INSTALLATION REAL CONSUMPTION 300 kWh ENERGY SAVED 100 kWh LOST ENERGY 200 kWh BILLED CONSUMPTION INCREASE BILLED CONSUMPTION 100 kWh 100 kWh OTHER EFFECTS (BY-PRODUCTS): BAD DEBT PROVISION REDUCTION OPERATIONAL COSTS REDUCTION CAPEX GOES TO THE RAB 18

  19. GENERATION BUSINESS

  20. Installed Capacity 868 MW 51% 100% SHP Paracambi 13 MW Paraiba do Sul River HPP Ilha dos Pombos187 MW HPP Ilha dos Pombos LajesComplex 100% RJ SP HPP Santa Branca HPP Santa Branca 56 MW 100% 100% 100% HPP Fontes Nova 132 MW HPP Underground NiloPeçanha - 380 MW HPP Pereira Passos 100 MW 20

  21. Re-pricing of existing energy Conventional Energy Balance Assured energy (MW average) 2013 2014 2015 2016 2017 2018 2019 2020 2021 Contracted Energy (Free) ContractedEnergy (Regulated) Hedge Available Energy ¹Database january. 2013 2Average price to RegulatedMarket (dec/12): R$ 88,62/MWh 21

  22. Generation Projects 22

  23. Generation Projects Investments in Renova, Belo Monte andGuanhães in linewithourstrategyofgrowing in thegeneration business InstalledCapacity (MW) + 59.8% 22 1,505 280 175 77 9 74* 942 13 855 Current Capacity (+) SHP Paracambi¹ Installed Capacity (+) SHP Lajes¹ (+) HPP Itaocara¹ CapacityAfterExpansion (+) Belo Monte³ (+) Renova² (+) Renova² (+) Guanhães¹ ¹ Considering 51% stake ² Considering21.99% stake ³ Considering2.49% stake 23 * 9 MW SHP + 65 MW Wind Farm (since jul/12)

  24. RESULTS

  25. Net Revenue NET REVENUE BY SEGMENT (1Q13)* NET REVENUE (R$MN) Commercialization 8.6% Generation7.1% +7.5 Distribution84.0%** 2,040.0 1,898.7 157,3 137,4 * Eliminationsnotconsidered ** Constructionrevenuenotconsidered +6,9% 1,883.1 1,761.3 NET REVENUE FROM DISTRIBUTION (1Q13) 1Q12 1Q13 Network Use (TUSD)(Free + Concessionaires)8.0% Residential 45.1% Others (Captive) 11.7% Construction Revenue Revenue w/out construction revenue Industrial 5.5% Commercial 29.7% 25

  26. OperatingCostsandExpenses DISTRIBUTION MANAGEABLE COSTS (R$MN) COSTS (R$MN)* 1Q13 -4.8% 333.1 317.1 Nonmanageable (distribution):R$ 1,261.2 (70.8%) GenerationandCommercialization:R$ 203.5 (11.4%) 1Q13 1Q12 Manageable (distribution):R$ 317.1 (17.8%) * Eliminationsnotconsidered ** Constructionrevenuenotconsidered 26

  27. EBITDA EBITDA BY SEGMENT* 1Q13 CONSOLIDATED EBITDA (R$MN) 433.4 -18.1% 355.1 Distribution 63.8% (EBITDA Margin: 13.5%) Commercialization2.8% (EBITDA Margin: 5.6%) Generation33.4% (EBITDA Margin: 82.1%) 1Q12 1Q13 *Eliminationsnotconsidered 27

  28. EBITDA EBITDA – 1Q12 / 1Q13(R$ MN) + 5.8% - 18.1% 122 456 101 433 431 42 355 (2) (1) (7) (175) (19) Otheroperational/ revenues EBITDA1Q13 Regulatory Assets and Liabilities Net Revenue Non-Manageable Costs Manageable Costs (PMSO) Provisions Adjusted EBITDA 1Q12 Regulatory Assets and Liabilities EBITDA1Q12 Adjusted EBITDA 1Q13 Equity Pick-up 28

  29. Net Income ADJUESTED NET INCOME 1Q12 / 1Q13 (R$ MN) + 4.8% - 43.8% 67 145 140 139 (1) 79 30 (4) (78) (9) EBITDA Financial Result Taxes Others Adjusted Net Income 1Q12 Regulatory Assets and Liabilities 1Q12 1Q13 Regulatory Assets and Liabilities Adjusted Net Income 1Q13 29

  30. Dividends * *Based on Net Income of the year. before IFRS adjustments 30

  31. Indebtedness AMORTIZATION SCHEDULE* (R$ MN) NET DEBT WithoutPensionFund AverageTerm: 4.7 years 4,031.4 3,991.9 1 982 792 759 616 2.83 394 357 2.73 194 176 42 42 42 Dec/12 Mar/13 Others 2.0% Net Debt / EBITDA for covenants * Principal only COST OF DEBT 11.08% TJLP 24.3% 11.03% 8.21% 7.73% 4.87% 4.25% 2.24% 1.07% US$/Euro 0.4% 2010 2011 Mar/13 2012 CDI/Selic73.3% Nominal Cost Real Cost 31 *ConsideringHedge 1Reclassified to reflect the deconsolidation results of jointly controlled companies.

  32. Investments CAPEX BREAKDOWN(R$ MN) 1Q13 CAPEX (R$ MN) Develop. of Distribution System 51.6 928.6 796.8 153.8 700.6 102.7 Commerc./Energy Eficiency26.1 563.8 181.8 116.9 Losses Combat 44.7 774.8 694.1 +13.9% 518.8 162.7 142.9 446.9 Generation Projects 26.9 11.7 35.8 131.2 127.0 Quality Improvement 13.4 2012 1Q13 1Q12 2010 2011 2009 Generation Maintenance 3.1 Investments in Electric Assets (Distribution) Others 17.2 32

  33. Why invest in Light? Economic Transformation in the Concession Area • Major upcomingevents • Integrationof favelas • Pro-business environment • New plants investments • Expansion of the existing ones • Market growth RepricingofExistingEnergy • New PPAs starting in 2013 and 2014 • Revenues increase with no aditional costs. • Very active trading subsidiary Best-in-ClassCorporateGovernance • Listed in “Novo Mercado” of Bovespa; • Board Committees very active • Included in the Sustainability Index (ISE) of Bovespa for the sixth year. Energy LossesReduction • Progress in theTechnologyProgram • New network andmeters in thepacified favelas • Smartmeteringdevelopment • “Zero LossesArea” Program Growth in theGeneration Business • Investment in Renova, Belo Monte and Guanhães (total of 477 MW) • SHP Lajes under construction. • HPP Itaocara Dividendtrack Record • Sound Dividend Policy: minimum 50% of net income; • Average payout since 2007: 91% 33

  34. 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 SESA’s tariffs. For residential consumers (low voltage), the reduction was 18.10%. The measure will have no impact on the company’s 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 Brazil’s 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. 34

  35. Regulatory Framework • On March 8, 2013, the federal government issued the Decree 7,945 preventing the coverage of part of the non-manageable costs not covered by the 2013 tariff, through the resources transferred from the Energetic Development Accout (CDE) for the following costs: • System Service Charge (ESS) – The monthly transfer will be determined by the amounts settled in the CCEE. • Involuntary Exposure associated with the quotas – The monthly CDE transfer will cover the difference between the difference settlement price (PLD) and the tariff of the repositioning amount recognized in Light’s last tariff adjustment. • Hydrological Risk - The net monthly amount settled in the CCEE will be transferred directly via the CDE. • It is worth mentioning that the amounts approved for Light reflect the methodology approved by Aneel on May 6th, 2013. ENERGY PURCHASE (R$ MN) CHARGES AND TRANSPORT (R$ MN) 1,370.9 314.2 + 31.9% 1,079.9 291.9 -12.8% 362.2 70.4 203.9 818.2 177.9 136.3 144.9 144.9 27.2 215.3 23.5 122.8 267.1 267.1 235.4 79.0 130.9 371.0 371.0 52.8 362.1 52.8 225.7 225.7 46.1 49.5 46.1 70.7 1Q12 CDE transfer 1Q13 1Q12 1Q13without Decree 1Q13 1Q13Without Decree CDE transfer ESS Transport Spot Norte Fluminense Other Charges Itaipu 35 OtherAuctions AvailabilityContracts

  36. 2013 TariffReviewCriticalIssues RemunerationAsset Base Non-TechnicalLosses • R$ 2.7 billion (nominal terms) investedduringthecurrentcycle (2008-2013) • Capitalizationimprovementdrivenbysimulations • Physical-accountingassetsconcilliation • Constant interactionswithAneel staff, including site visits • Intensive training of teams for correct accounting records • Accounting system blocked against input errors • Aimingtheflexibilityoftheregulatorytarget, basedonAneel’sexcepcionalitycriteria: • largegapbetweenactualandregulatoryleveloflosses; • social andeconomicconditionshinderedtheachievementofthetarget; and • there are no comparablepeercompanieswithlowerleveloflosses. 36

  37. 2013 TariffReviewSchedule 37

  38. ImportantNotice 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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 Company’s 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. 38

  39. Contacts João Batista Zolini CarneiroCFO and IRO Luiz Felipe Negreiros de SáSuperintendent of Finance and Investor Relations +55 21 2211 2814 felipe.sa@light.com.br Gustavo WerneckIR Manager + 55 21 2211 2560gustavo.souza@light.com.br www.light.com.br/ri 39

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