SOL Energias – energy trading</li></li></ul><li>4<br />Introduction<br />Presentation of Operating and Financial Information<br /><ul><li>The financial information contained herein is presented in consolidated figures, pursuant to Brazilian Corporate Law, based on revised financial information. The consolidated financial information represents: i) 100% of CEMAR’s results, excluding 34.89% related to minority interests, ii) 25% of Geramar’s results and iii) 100% of Equatorial Soluções Results.
The operating information presented herein consolidates 100% of CEMAR’s results and 25% of Geramar’s results.
The following information was not reviewed by the independent auditors: i) non-financial information relating to CEMAR, Light and the PLPT (Programa Luz para Todos - Light for All Program); ii) pro forma information and its comparison with the results presented in the period; and iii) management expectations regarding the future performance of the Companies.</li></li></ul><li>5<br />Agenda<br /><ul><li> Introduction
SOL Energias – energy trading</li></li></ul><li>6<br />Operating Highlights<br /><ul><li>CEMAR’s billed energy volume totaled 1,067.3 GWh in 2Q11, 4.6% more than in 2Q10.
CEMAR’s last-12-month energy losses totaled 21.4% of required energy in 2Q11, 0.8 p.p. less than the 2Q10 ratio.
CEMAR’s last-12-month DEC and FEC indices came to 19.6 hours and 11.5 times, respectively, in 2Q11, 14.9% and 23.0% down on the 2Q10 figures.</li></li></ul><li>7<br />Financial Highlights<br /><ul><li>Net operating revenues (NOR) totaled R$467.3 million in 2Q11, 7.7% up on 2Q10, reflecting a 8.0% increase by CEMAR.
2Q11 adjusted EBITDA came to R$120.3 million, 17.0% lower than the amount reported in 2Q10.
Adjusted Net income totaled R$44.7 million in the quarter, 22.4% down on the adjusted amount reported in the same period last year.
Equatorial’s consolidated investments amounted to R$110.7 million in 2Q11, 14.8% up year-on-year. In CEMAR (excluding direct investments in the Light For All Program), total capex amounted to R$63.8 million, 47.1% growth. Light For All Program investments totaled R$46.8 million.
As announced in our Earnings Release, Ernst & Young was hired as our new independent auditors.
According to the Material Fact published today, Equatorial should invest R$6.0 million into SOL Energias’ equity – an energy trading – to retain 51% of its capital.</li></li></ul><li>8<br />Agenda<br /><ul><li> Introduction
SOL Energias – energy trading</li></li></ul><li>9<br />CEMAR – Electricity Sales Volume<br /><ul><li>CEMAR: 2Q11 energy sales moved up by 4.6%, reaching 1,067.3 GWh.</li></ul>Electricity Consumption per Segment (GWh)<br />Energy Balance (GWh)<br />
10<br />Distribution – Energy Losses in CEMAR<br />
11<br />Distribution – DEC and FEC(Last 12 months)<br /><ul><li>CEMAR: The DEC index improved 14.9% compared with 2Q10 and the FEC index improved 23.0% in the same period.</li></ul>DEC (hours)<br />FEC (times)<br />
SOL Energias – energy trading</li></li></ul><li>Adjusted EBITDA<br />Adjusted EBITDA<br /><ul><li>REFIS: Due to the approval of CEMAR’s accession in REFIS, R$ 3.0 million related to discounts obtained in Equatorial revenue were recognized. Excluding this impact, the Consolidated EBITDA in 2Q11 was 17.0% lower than in 2Q10.</li></ul>13<br />
14<br />Adjusted Net Income<br />Adjusted Net Income<br /><ul><li>REFIS: Due to the approval of CEMAR’s accession in REFIS, Consolidated Net Income was negatively impacted by R$ 0.4 million. Excluding this effect, there was a downturn of 22.4% compared to 2Q10. </li></li></ul><li>15<br />Debt: Schedule of Gross Debt Maturities<br />Consolidated Gross Debt<br />(100% CEMAR + 25% Geramar)<br />
16<br />Net Debt - Consolidated<br />100% CEMAR + 25% Geramar<br />Net Debt (R$MM)(*) and Net Debt/ EBITDA <br />(Last 12 months)<br />Net Debt Reconciliation (R$MM)<br /><ul><li>Net debt proportional to Equatorial stakes (65.11% in CEMAR + 25% in Geramar), reaches R$674.6 million, representing the same 2.1x EBITDA (last 12 months).</li></li></ul><li>17<br />Capex - Equatorial<br /><ul><li>CEMAR: In the 2Q11, total capex reached R$110.7 million, of which R$63.8 million are own capex and R$46.8 million regarding the Light for All Program (PLPT).
Ever since the conclusion of the construction of its plants in 1Q10, Geramar has only maintenance capex.</li></li></ul><li>Agenda<br /><ul><li> Introduction
SOL Energias – energy trading</li></ul>18<br />
SOL Energias – Operation Structure<br /><ul><li>Equatorial may invest R$6.0 million into SOL Energias equity (energy trading and developer of new products and services), thus retaining 51.0% of its total shares.
The amount invested will be used in the energy trading working capital.</li></ul>Executives<br />49%<br />51%<br />19<br />
SOL Energias<br /><ul><li>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)
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).</li></ul>20<br />
SOL Energias<br /><ul><li>Equatorial + SOL Energias:
Huge experience and credibility of the main executive-partners in the energy trading market.
Celerity in the decision and solutions customizing to clients processes, key when operating in a competitive and volatile market.
Reputation and financial solidity of Equatorial Energia supporting SOL’s operations.
Strong background in risk control at Equatorial and its controlling shareholder.
Equatorial’s business diversification into an important and growing segment of the energy sector.
Alignment in the long term interests between the partners.
Synergy between the trading and potential new generation deals in Equatorial.</li></ul>21<br />
SOL Energias<br /><ul><li>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;
24<br />Disclaimer<br /><ul><li>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 intentions or expectations for our clients; this presentation will also be available at our website www.equatorialenergia.com.br/ir and in the IPE system of the Brazilian Securities and Exchange Commission (CVM).
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 advised 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, which refer only to the date on which they were expressed. Hence, the Company has no obligation to update said statements.
This presentation does not constitute any offering, invitation or request of subscription offer or purchase of any marketable securities. And, this statement or any other information herein, does not constitute the basis for any contract or commitment of any kind.</li>