São Paulo, 07 de março de 2012 Abril 2015

5th Utilities Day - Itau BBA

Wilson Ferreira Jr

CEO

2

Agenda

2

1

Regulatory Scenario

3 2014 Results

Hydrological Scenario

2

Agenda

3

1

3

Regulatory Scenario

2014 Results

Hydrological Scenario

20.6 23.2

30.1

35.6

50.1

40.0

75.7

30.6 37.8

42.6 42.9

0

20

40

60

80

100

Jan Feb Mar Abr May Jun Jul Aug Sep Oct Nov Dec

2002

2012

2013

2014

2015/ONSforecast

Reservoir Levels

NIPS Reservoir Levels | %

Apr 07 (atual): 32.2%

22.4

4

Natural Inflow Energy (ENA)

Natural Inflow Energy (ENA) | SE/CW | GW average

ENA in 2014 and 2015 | % LTA

2014 Jan Feb Mar Apr¹

SE/CW 68% 39% 59% 78% 88%

South 144% 215% 140% 115% 115%

NIPS 82% 54% 61% 73% 86%

10

20

30

40

50

60

70

Nov-1

2

Dec-

12

Jan-1

3

Feb-1

3

Mar-

13

Apr-

13

May-1

3

Jun-1

3

Jul-13

Aug-1

3

Sep-1

3

Oct

-13

Nov-1

3

Dec-

13

Jan-1

4

Feb-1

4

Mar-

14

Apr-

14

May-1

4

Jun-1

4

Jul-14

Aug-1

4

Sep-1

4

Oct

-14

Nov-1

4

Dec-

14

Jan-1

5

Feb-1

5

Mar-

15

Apr-

15

ENA SE/CW LTA

5 1) ONS Forecast for April (RV1).

Rainfall | January to March 2015

Source: ONS

Precipitation Anomalies (deviations from the average)

ENA in January-15 | SE/CW | % LTA ENA in February-15 | SE/CW | % LTA ENA in March-15 | SE/CW | % LTA

59%

0%

20%

40%

60%

80%

1 2 3 4 5 6 7 8 910

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

77%

0%

20%

40%

60%

80%

1 2 3 4 5 6 7 8 910

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

6

Jan 01 and 31. 2015 | mm Feb 01 and 28. 2015 | mm Mar 01 and 31. 2015 | mm

39%

0%

20%

40%

60%

80%

1 2 3 4 5 6 7 8 910

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

“Steady load” scenario (~2014) represents a deviation of -3.0% (or -2.0 GWm) if compared to ONS

forecast (PEN 2015)

+2.7% -2.8% -4.4% -4.5% -5.0% -4.5% -3.9% -3.0% -1.8% -2.2% -1.4%

Deviation:

ONS (PEN 2015)

x “Steady Load”

2015 Outlook

2015 NIPS Load GWavg %

2014 65.1

ONS (PEN 2015) 67.3 3.3%

“Steady Load” 65.3 0.2%

67.8

69.9 69.9

67.6

65.8 65.0 65.1

66.5 67.1

67.9 67.7 67.2

65.0

63.4

69.6

67.5 66.7

64.6

62.8

61.8 62.1

63.9

65.0

66.7 66.3 66.3

69.6

68.1 67.0

58

60

62

64

66

68

70

72

Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

[GW

avg]

ONS (PEN 2015) ONS (PMO apr/15) Steady load Real/Est ONS

-4.0%

7

35.6%

20.6% 23.2%

30.1%

0%

10%

20%

30%

40%

Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15

"Steady load" scenario Actual/Estim. ONS Minimum (ONS)

15.0%

2015 Outlook | Scenarios for reservoir levels¹

Deterioration of the economic scenario and tariff hikes may naturally reduce consumption

Historical Average (1997-2014): 42.4%

Historical Average (1997-2014): 74.7% ENA April:

86%

Wet season Período seco Dry season

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

10

5%

11

5%

89

%

90

%

10

4%

13

6%

92

%

11

8%

89

%

10

7%

97

%

NIPS

104%

ENA needed (Apr-Nov)

84%

Probability Lower ENA²

20%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

11

3%

10

5%

10

2%

92

%

10

7%

13

5%

96

%

11

1%

10

2%

11

0%

80

%

SE/CW

105%

ENA for the dry Season3 – 2004 to 2014 | % LTA

8 1) Considers the generation of TPP Uruguaiana since Feb-2015. 2) Probability considers the historical series. 3) May to November of each year.

Entry into operation of new installed capacity More clearance for energy balance in the coming years

9

Entry into operation of new installed capacity in 2015 and 2016

7.6

8.4

9.2

12.0

13.8

72.5

75.5

78.7

83.7

87.8

65.0 67.1

69.5

71.7

74.0

2015 2016 2017 2018 2019

Excess Supply Demand

Assured Energy (MW average)

Plants 2015 2016

Jirau 1,278 366

Santo Antonio 611 120

Teles Pires 233 698

Santo Antonio do Jari 211 0

Ferreira Gomes 140 0

Other HPPs 64 177

Other sources 564 1,051

Reserve energy 424 571

Total 3,525 2,983

NIPS Energy balance – Mar-15 | GW average

2

Agenda

10

1

3

Regulatory Scenario

2014 Results

Hydrological Scenario

Recent advances in the sector ETR and Tariff Flags

11

Extraordinary Tariff Review (ETR)

(costs already incurred and/or defined)

Repositioning of items with greater distance from the tariff coverage:

CDE quota: increase of R $ 1.7 billion in 2014 to US $ 22.6 billion in 2015

Cost of Power Purchase:

Itaipu: +46% for the distributors S / SE / CW ¹

18th Adjustment Auction: High purchase cost (R$ 387.07/MWh)

Availability agreements in green flag

"Tariff Flags"

(actual costs)

Considers costs of thermal generation and exposure to PLD (hydrological risk, ESS and involuntary exposure)

Implementation rules:

Green flag: CVU < R$ 200.00/MWh (no additional)

Yellow Flag: 200.00 R$/MWh ≤ CVU< R$ 388.48/MWh (increase of R$ 25/MWh)

Red flag: CVU > R$388.48/MWh (increase of R$ 55/MWh)

1) Tariff considers exchange rate of R$2.80/US$

ACR Account Loans

3rd tranche:

R$ 3.4 billion

54 months

CDI + 3.15%

Lengthening of previous debts

1st tranche: from CDI + 1,9% to CDI + 2,525%

2nd tranche: from CDI + 2,35% to CDI + 2,9%

Impact of ETR and Tariff Flags in Brazil | in %

Tariff before ETR and Flags

Extraordinary Tariff Review (ETR)

Tariff Flags

17.0 bi

Thermal and exposure to PLD

15.6%

6.2 bi

Energy Purchase

5.7%

19.3 bi

CDE Quota

17.7%

+39.0%

Tariff after ETR and Flags

A point to keep in mind GSF calculation needs improvement

12

Lowering of ceiling PLD

from R$ 823/MWh to R$ 388/MWh

PhysicalGuarantee

Actualgeneration

100

83

Characterization of the financial impact of GSF for hydroelectric generators1 | MWaverage

-16.8 MWa

Amount of energy to be

acquired

Valuation of GSF at market

price

PLD Financial impact on HPPs

What should be corrected in the GSF calculation?

Impact from generation of Reserve Energy: should be valued at the cost of such generation (instead of PLD)

Impact of Out of Merit Dispatch: should be removed from the cost of hydroelectric generator

Adopt limitation due to structural changes in energy matrix

1) Take into account a scenario of steady load in NIPS, if compared to 2014.

2

Agenda

13

1

3

Regulatory Scenario

2014 Results

Hydrological Scenario

2014 Results

14

6.0% R$ 214 million

Net Income EBITDA Net Income¹

IFRS

2014 R$ 886 million

2013 R$ 949

million

2014 R$ 3,761 million

2013 R$ 3,547

million

2014 R$ 16,361 million

2013 R$ 13,629

million

20.0% R$ 2,731 million

-6.6% R$ 63 million

-11.2% R$ 146 million

2014 R$ 1,159 million

2013 R$ 1,304

million

2014 R$ 3,916 million

2013 R$3,908

million

2014 R$ 15,687 million

2013 R$ 13,681

million

14.7% R$ 2,005 million

IFRS

0.2% R$ 8 million

– amendment to the discos’ concession agreements, including a clause to ensure that the balance remaining of rights, not collected through tariffs by the end of the concession, should be indemnified

– Accounting of sectorial financial assets and liabilities (old regulatory assets and liabilities2)

Accounting figures in 2014

EBITDA

Net Income

Proportionate Consolidation of Generation + Sectorial

Financial Assets & Liabilities + Non recurring items

1) Excludes Revenue from Construction. 2) Differences between estimated power purchase costs and sector charges contemplated in tariffs and the actual costs incurred in the period and that will be passed on to consumers on the date of the annual tariff readjustment of each distributor.

Allocation of the Results and Stock Bonus Proposal

15

Stock bonus proposed is of 3.194510783%, in the ratio of 0.03194510783 new share, of the same type, for each share

Total number of shares that make up the capital stock would go from 962,274,260 to 993,014,215, with the issuance of 30,739,955 shares, to be distributed to shareholders under Article 169 of Law 6,404/76

Subscribed and paid in capital stock would go from R$ 4,793,424,356.62 to R$ 5,348,311,955.07

Constitution of statutory reserve - strengthening of working capital in the amount of R$ 555 million

Proposal of reversal of statutory reserve - strengthening of working capital and increase of capital through stock bonus

Interim dividend of R$ 422 million (already paid) equivalent to 44.5% of net income of the fiscal year

Capital Increase and Stock Bonus