Quarterly Results Call 2Q14 ? Presentation

2Q14 Earnings Release August 14, 2014

2

2Q14 Highlights

Impact of Pecém II deconsolidation as of Jun 1, 2014

Energy sales: 24% growth as a result of increased commercial capacity and

improved operation of coal plants;

EBITDA: stronger EBITDA resulting mainly from

• Improved operational performance of the coal plants, with consequent

reduction of operating cost per MWh and unavailability penalties;

• Reduced HoldCo overhead

MAIN INDICATORS

(R$ million) 2Q14 2Q13 % 1H14 1H13 %

Net Operating Revenue 489.3 395.1 23.8% 1,076.1 591.2 82.0%

Operating Costs (439.6) (418.3) 5.1% (934.4) (730,9) 27.8%

Operating Expenses (18.1) (42.0) -56.8% (54.9) (81,0) -32.2%

EBITDA 79.3 (38.6) N. A. 183.2 (176.2) N. A.

Net Income (112.3) (233.2) -51.9% (184.2) (484.2) -62.0%

Net Debt 4,900.7 5,899 -16.9% 4,900.7 5,899.0 -16.9%

Total Generation Energy Sales (GWh) 2,075 1,672 24% 4,323 2,380 82%

Capitalization and asset disposal

• 1st Phase of the private capital increase concluded with R$174MM

raised;

• Sale of 50% of Pecém II to E.ON amounting to ~R$400MM

Proposal presented to Aneel to adjust Parnaíba II PPAs:

negotiations ongoing

Highlights

3

Parnaíba II PPAs Adjustment Balanced solution sought with Aneel to preserve PPAs

Proposal presented to Aneel to adjust Parnaíba II PPAs comprises:

o Completion of the construction of Parnaíba II until Dec, 2014;

o Postponement of PPA’s start date to Jul, 2016, or to Plant’s COD, whichever occurs first;

o Penalty amounting to approx. R$310MM, paid for in installments over the term of Plant’s PPAs, through the reduction in annual fixed

revenues; and

o Renewal of execution guarantees of R$60MM until July 2016

ENEVA proposed to Aneel to run a gas optimization of the Parnaíba Thermoelectric Complex by temporally substituting Parnaíba

III and 2 gas turbines from Parnaíba I by generation from Parnaíba II, as soon as it becomes available

Additionally, ENEVA commits to close the cycle of Parnaíba I in up to 5 years, subject to certain conditions precedent, including:

o Sale of energy in the regulated market through an auction process; and

o Availability of long-term financing for the project.

169 MW

7 MW

18 MW

169 MW

169 MW

169 MW

169 MW

18 MW

18 MW

169 MW

169 MW

181 MW

Parnaíba I Parnaíba II Parnaíba III Parnaíba IV

GSUB GSUB

4

EBITDA Development

Consolidated EBITDA (R$MM)

EBITDA of R$79.3MM, resulting mainly from:

o Full quarter operations of Pecém II, partially captured by

consolidated EBITDA on 2Q14;

o Improved operational performance of Itaqui, with

resulting decrease in unavailability costs

o Stable performance of Parnaíba I

o Reduced operating expenses in the HoldCo

Better results driven by improved operational performance of coal

power plants, larger commercial capacity and reduced HoldCo overhead

-38.6

94.2

-0.3

24.0

79.3

EBITDA 2Q13 Δ Net Operating

Revenues

Δ Operating Costs Δ Operating

Expenses

EBITDA 2Q14

5

Costs & Expenses

2Q14 operating costs impacted by:

o Reduced fuel costs resulting from the deconsolidation of Pecém

II in Jun 2014;

o Reduction in Parnaíba I lease cost, according to its gas supply

agreement

Operating Costs 1Q14 2Q14 2Q14/ 1Q14

Operating Costs1 (R$ million) 446.8 392.7 -12.1%

Gross Energy Generated (GWh) 2,715 2,370 -12.7%

Operating Costs per Gross Energy Generated (R$/MWh)

164.6 165.7 0.6%

Operating Costs¹

Holding Operating Expenses1

Significant HoldCo. expenses reduction of 47.0% compared

to 1Q14, impacted by:

o Headcount reduction, despite dismissal costs;

HoldCo expenses reduction plan in course

NOTES: 1) Does not include Depreciation & Amortization; 2) Does not include Stock Options; 3) Personnel at ENEVA and ENEVA Par. holdings

Holding Expenses (R$ million)

1Q14 2Q14 2Q14/ 1Q14

ENEVA1,2 24.3 12.9 -47.0%

ENEVA Participações1 (50%) 4.5 7.5 68.5%

Headcount3 163 153 -6.1%

ENEVA 113 109 -3.5%

ENEVA Participações 50 44 -6.1%

Operating Costs

6

Operational Performance (Itaqui)

EBITDA (R$MM)

Availability Variable Revenue X Variable Cost (R$/MWh)

Sources: ONS & Company

Higher unavailability offset lower operating costs

1Q14 2Q14 2Q14/ 1Q14


Gross Energy Generated (GWh) 583 462 -20.7%


207.7 249.9 20.3%

NOTE: 1) Does not include Depreciation & Amortization.

63%

83% 84% 87%

75%

62%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Availability reduction in 2Q14 due to mainly fan equipment and emissions control systems

36.1

-22.1

5.5 0.6

20.1


Revenues

Δ Operating

Costs

Δ Operating

Expenses

EBITDA 2Q14

261

232

144 159

128 149

112

141

108 103 115 121 126 129 118 127 124

107 106 103 102 102 100 104 108 107 113 116 119 120 112 108 106 103

Variable Cost Gross Variable Revenue

7

Operational Performance (Parnaíba I)

EBITDA (R$MM)



OBS: Dispatch margin captured by Parnaíba Gás Natural

Operating costs per MWh followed Henry Hub prices decrease and reflected lower unavailability

costs

NOTE: 1) Does not include Depreciation & Amortization.

Operating Costs

1Q14 2Q14 2Q14/ 1Q14


Gross Energy Generated (GWh) 1,411 1,412 -


157.2 139.3 -11.4%

N.A.

91% 97% 96% 99% 98%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

44.8

-20.6 25.3

0.7

50.3


Revenues

Δ Operating

Costs

Δ Operating

Expenses

EBITDA 2Q14

77 74 65 75 80 68 77 78 74 79 90

77 79 77 83 73 70

80 82 94 99 100 96 93 99 95 92

104 121

152 134 124 125 120


Operating Costs

8

Operational Performance (Pecém I)

Availability

NOTES: 1) Figures consider 100% of Pecém I; 2) Does not include Depreciation & Amortization; 3) 1Q14 unavailability figure considers ONS review (previously 71%).

Variable Revenue X Variable Cost (R$/MWh)

Lower Operating Costs per MWh mainly offset by higher fuel and unavailability costs


1Q14 2Q14 2Q14/ 1Q14

Operating Costs2 (R$ million) 230.2 256.3 11.3%

Gross Energy Generated (GWh) 1,014 1,186 17.0%


227.1 216.1 -4.8%

EBITDA1 (R$MM)

72%

41%

66%

51%

83%3 77%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

48.8

9.6

-26.1

0.3

32.5


Revenues

Δ Operating

Costs

Δ Operating

Expenses

EBITDA 2Q14

71% 151

127 118

136 154

117

139 138

109 119

107

134

106

107 110

95 93

108

111 105 104 100 99 99 97 102 105 106 110 114

117

118 110

105 102

100


9

Operational Performance (Pecém II)

Variable Revenue X Variable Cost (R$/MWh) Availability


EBITDA negatively impacted by higher outsourced services and unavailability costs

EBITDA¹ (R$MM) Operating Costs

1Q14 2Q14 2Q14/ 1Q14

Operating Costs² (R$ million) 99.4 105.4 6.0%

Gross Energy Generated (GWh) 720.8 736.7 2.2%


137.9 143.1 3.8%

N.A. N.A. N.A.

85% 97% 96%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

46.3

-7.1

-6.0 0.3

33.5


Revenues

Δ Operating

Costs

Δ Operating

Expenses

EBITDA 2Q14

NOTES: 1) Figures consider 100% of Pecém II; 2) Does not include Depreciation & Amortization.

92 99 111

99 106 101 101 88

99

114 118 122 125 125 118 113 111 108


Operating Costs

10

Operational Performance (Parnaíba III)

NOTES: 1) Figures consider 100% of Parnaíba III; 2) Does not include Depreciation & Amortization.



OBS: Dispatch margin captured by Parnaíba Gás Natural

Operational dispatch adjustment impacted Operating Costs

1Q14 2Q14 2Q14/ 1Q14

Operating Costs2 (R$ million) 61.9 65.1 5.3%

Gross Energy Generated (GWh) 344 266 -22.9%


179.6 245.1 36.5%

EBITDA1 (R$MM)

N.A. N.A. N.A.

100% 99%

77%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

14.4 -19.6

-3.3 0.04

-8.4


Revenues

Δ Operating

Costs

Δ Operating

Expenses

EBITDA 2Q14

75 71 69 69 61 73

58 66

161 161 161 161 161 161 161 161


11

Consolidated Cash Position R$220MM raised to cover immediate working capital and CAPEX needs. Additional funds will be

raised in 2nd Capital Increase

83.9

579 507

94.7 120

100

4

128

62.5

87.7

Cash and Cash

Equivalents

(1Q14)

Revenues Operating Costs

and Expenses

CAPEX Capital Increase Debt Raised Intercompany

Loan

Debt Service Others Cash and Cash

Equivalents

(2Q14)

NOTE: Consolidated Cash and Cash Equivalents (1Q14) net of Pecém II’s Cash and Cash Equivalents.

Consolidated Debt (2Q14) 2Q14 Consolidated Debt position net of Pecém II debt

Consolidated Debt (R$MM)

Total Gross Debt R$5,092MM

Consolidated Gross Debt Profile (R$MM)

R$1,053.5MM out of the total debt balance of short-term debt is

allocated in the projects, as follows:

o R$179.9MM: Current portion of the long-term debts of Itaqui and

Parnaíba I;

o R$78.1MM: Bridge loans to Parnaíba I. The outstanding balance will

be paid-off in installments, which started in October, 2013;

o R$795.5MM: Bridge loans to Parnaíba II, which should be paid-off

with the disbursement of the long-term financing packages.

On May 12, 2014 agreed on a debt transaction comprising in:

o Push-down of R$600-700MM to projects by end of 2H14;

o 5-year maturity extension of remaining HoldCo. debt, with 3 years of

grace period, in parallel of push-down transaction;

o Additional R$100MM raised in 2Q14 as a bridge to a LT financing for

Pecém II, which will be paid-off with disbursement of R$150MM

Pecém II LT financing

-15.7% (net debt)

Gross Short-Term Debt R$3,145MM

Consolidated Short-Term Debt (R$MM)

3,145 62%

1,947 38%

Short Term Long Term

2,091 66%

1,054 34%

Hold Co. Project Related5,933

5,004

278

88

4Q13 2Q14

Net Debt Cash and Cash Equivalents

6,221

5,092

12

Main Takeaways

13

Transition from pre-operational to operational status

Continuous improvement of operational fleet by implementing identified action plan

Financial Restructuring

o Phase I of the Capital Increase concluded, with R$174 million raised

o Partial sale of Pecém II to E.ON concluded in July, for approx. R$400 million

o Holdco restructuring underway. Cost reduction already achieved

o Preparation for Phase II of the Capital Increase on its way

Parnaíba II: ENEVA presented a revised proposal to Aneel to adjust power supply obligations of the

Parnaíba II CCGT

o Marks boundaries for Parnaíba II challenge

o Provides flexibility in management of entire Parnaíba Complex under high dispatch scenario

o Grants option to resume growth

Ongoing work with PGN to optimize natural gas production considering the high dispatch scenario in Brazil

and with regulatory team to analyze impacts on coal contracts

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Quarterly Results Call 2Q14 ? Presentation