INVESTOR RELATIONS Newsletter | Year II | N

O
7
Light releases results for 2Q14
Total energy consumption in the second quarter of
2014 increased 3.0% when compared with the same
quarter last year, reaching 6,495 GWh. This result was
mainly inuenced by the growth in consumption in
the residential and commercial segments, which grew
8.0% and 2.8%, respectively.
Consolidated net revenue for the quarter, exclu-
ding revenue from construction, totaled R$1,601.5
million, an increase of 1.4% when compared with
the second quarter of 2013.
Consolidated EBITDA for the quarter, which amoun-
ted to R$239.3 million, dropped 13.9% from the 2nd
quarter of 2013, mainly due to the higher energy pur-
chases by the distributor in the portion not covered
by the transfer of the CDE whose future pass-through
to tariffs is guaranteed by the regulations. Adjusted for
the regulatory asset (CVA), EBITDA totaled R$359.7
million for the period, a decrease of 9.4% in relation
to the same quarter in 2013.
Net income for the quarter totaled R$15.3 million, a
decrease of 73.8%, due to the increase in the non-ma-
nageable costs with energy purchases incurred by the
distributor. Adjusted for the CVA, net income totaled
R$94.7 million, a decrease of 30.8% in comparison
with the 2nd quarter of 2013.
Non-technical losses over the last 12 months, calcu-
lated based on billed energy in the low-voltage market
(ANEEL criteria), dropped 0.5 p.p. in relation to the
previous quarter, reaching 41.9% in June 2014.
Collections for the quarter totaled 103.5% of billed
consumption, a 0.7 p.p. drop year-on-year. Provisions
for Past Due Accounts (PCLD) represented 1.7% of gross
billed energy, totaling R$36.1 million, an improvement
of 0.8 p.p. in relation to the 2nd quarter of 2013.
Capex
Light invested 357.8 million in the rst half of
2014, a growth of 9.5% in comparison with the
same period in 2013.
The distribution segment concentrated the highest
volume, R$332.2 million, a growth of 21.8% in re-
lation to the rst half of 2013. This total included: (i)
R$154.8 million for the development and expansion
of distribution networks in order to keep pace with
market growth, strengthen the network and improve
quality, including the underground network; (ii) R$119.7
million for the energy loss project (network protection,
electronic meters, and fraud regularization); and (iii)
R$36.4 million for specic investments related to the
World Cup and Olympic Games.
Commercialization and energy efciency Investments
fell from R$33.1 million in 1H13 to R$5.0 million in
1H14, due to the conclusion of a major co-generation
project in April of this year.
International speaker talks about smart grids
at investor meeting
The 7th Annual Light and Investors Meeting took place on June 9, organized by
the Investor Relations area, in partnership with the Association of Capital Market
Investment Analysts and Professionals (APIMEC). The event was attended by share-
holders, investors, market analysts and representatives from the Company, and
featured a special lecture by Michael Wiebe, a smart grid consultant.
Chief Financial and Investor Relations Ofcer Joo Bastista Zolini Carneiro began
the panel discussion with
a presentation of the rst
quarter of 2014 operating
and nancial results.
Afterwards, Lights Com-
mercial Superintendent,
Marco Vilela, talked about
the structure of the Project
to Combat Losses and its
results, mainly citing the
creation of the Zero Loss
Areas (APZs), in 2012. Since
the introduction of the
APZs, non-technical loss-
es, fell by 30 percentage
points, going from 50% to
20% in June 2014. The Superintendent also cited Electronic Metering. The Company
currently has more than 500,000 Electronic Measurers installed.
The results from the Generation, Marketing and Services, and New Business De-
velopment area were presented by the Energy Ofcer, Evandro Vasconcelos, who
talked about the expansion of generation and highlighted the importance of the
energy marketing strategy for the Company.
Lights Communications Manager, Jordana Garcia, presented Lights communi-
cations plan. And the Regulation Superintendent, ngela Magalhes, highlighted
the main issues to be discussed during the 4th Periodic Rate Adjustment Cycle.
The panel also included Personnel Ofcer Andreia Junqueira and Business Man-
agement Ofcer Paulo Carvalho.
At the end of the meeting, the IR area presented its guidance, with the Compa-
The CFO/IRO, Joo Zolini,
receives from the hand of
the president of the Rio
de Janeiro Capital Market
Investment Professionals and
Analysts Assossiation, the
APIMEC stamp due to another
year of partnership.
nys projections until 2017, featuring data about the Market, OPEX, Provision for
Doubtful Accounts (PDD), EBITDA, Investments and Net Debt.
The network
of the future
Smart grid consultant
Michael Wiebe, who has
more than 15 years of
experience developing
projects in the United
States, Canada, Australia
and the Middle East, ac-
cepted Lights invitation
and presented the lecture Smart Grids: the network of the future.
According to Wiebe, customers around the world have new expectations in
relation to the supply of
electricity. Smart grids al-
low for a complete mod-
ernization of the distri-
bution network in order
to serve them better.
He cited Lights pio-
neering use of the smart
grid system to improve
customer satisfaction, re-
duce non-technical losses
and improve manage-
ment, billing systems and
operational processes.
Wiebe presented tech-
nical information about
the smart grids, discussing the benets for energy concessionaires and citing the
billions involved in projects of this size. According to Wiebe, Light is among the
ten largest smart grid investors in the world at the moment. - Pedro Batista (3G Radar)
Michael Wiebe,
a smart grids
consultant, gives
a lecture on this
subject.
Its always good to maintain this tradition
of presenting guidance every year,
with a longer-term view, to provide
the Companys long-term outlook.
It was also interesting to see the result
of the most recent rate adjustment
and the investments classied as
special obligations, compared with the
Companys cash ow, as well as the
details about the implementation of the
smart grid and the details about the
Companys CAPEX. This helps us to be
more condent in our analysis of Light.
- Henrique Peretti (JP Morgan)
- Michael Wiebe, smart grid consultant
With the presentation of the smart grid,
Light tried to show what investors most
often consider and evaluate in relation
to Light, which is the issue of losses.
The Companys professionals are extremely
competent. It was very good, positive,
with some news regarding Light.
I could see that Light has been
able to deal with the problem of non-
technical losses, which is going to turn
it into a nancially healthier company.
And thats good for everyone, including
its employees. By combatting losses,
the Company can grow and employ
more people. I was very impressed
with the event, particularly the
participation of the audience, which
was interested not only in what I had
to say about smart grids, but also about
Lights progress.
And speaking of smart grids
Smart grids are being discussed now more than
ever. This is because smart grids are revolutionizing
the distribution and consumption of electricity. Since
2003, Light has been dedicated to this issue, as this
new technology is going to improve the provision of
service and customer satisfaction.
Light will be the rst company in Latin America to
have three smart grid components: intelligent devic-
es, including electronic meters; a mesh network, to
automatically recongure the network in the event of
partial failures through a process known as self-healing;
and a software system to support the decision-making
process, known as business intelligence.
Electronic metering was initially introduced to Lights
large customers segment (Industrial and Commer-
cial). In 2009, the Company expanded the process
to residential customers. As of July 2014, there were
a total of 484,000 telemetered clients, 449,000 of
whom were being billed. The difference is due to the
time period between installation, and verication of
wether everything is functioning properly, in order to
begin billing.
Since 2011, the Company has also had a mesh
network for intelligent automated devices. Beginning
this year, it is going to expand the concept to all elec-
tronic meters.
Process automation and improvement
A smart grid network is automated. In the case of
Lights energy distribution, the data are trafcked be-
tween devices installed in the eld and at the conces-
sionaire through a communication network composed,
for example, of electronic meters and the hub (see
infographic). Afterwards, these data are evaluated by
the Metering Control Center (CCM).
The goal of automation is to minimize the need for
human intervention in the operating processes, allow for
the remote operation of equipment and take action more
rapidly. This scenario has a direct impact on improving
the quality of the energy supply (DEC and FEC), avoiding
unnecessary work and increasing the operational ef-
ciency of the concessionaire, which is able to remotely
perform readings, connections and disconnections.
The most visible part of this evolution is currently in
the large-scale use of electronic energy meters that will
allow, over the short term, new tariff arrangements
and new consumer behaviors. Telecommunications,
sensory equipment, information and computing sys-
tems, combined with existing infrastructure, have
come to constitute an increasingly powerful arsenal
that can make a difference, explains Light smart grid
consultant Ricardo Loss.
Smart grid technology also brings other benets to
customers, such as the future possibility of obtaining
information related to their energy consumption via
website, smartphone and/or social networks. For large
customers, who use special meters, this information
Distance monitoring
will be available on the meter itself. If they want, these
customers can send the information to a computer
using an outgoing meter signal. This technology is
not yet available for residential customers.
Light is in the process of contracting a communi-
cations network that will allow for the integration
of the metering and automation systems, bringing
greater operational efciency and the possibility of
implementing the full concept of a smart grid. The
installation of this network will allow a signicant
increase in the number of electronic meters, which are
equipped with alarms and energy scales, providing a
better targeting in the detection of irregularities. The
Company expects to reach 40% telemetered custom-
ers by 2018, mainly in the East, West and Baixada
regions, as well as the pacied communities, where
the rate of non-technical loss is high.
The Concentrator
concentrates the reading
of all electronic
measuring boxes within
a certain region and
sends it to the Measuring
Control Center through
Lights smart grid.
This information
is retransmitted through
Lights smart grid to the
Measuring Control Center.
The monitoring and detection
of any kind of irregularities
is performed by the Measuring Control
Center, located at Lights headquarters.
This consumption is registered
by the electronic meter.
The digital display stays
in the clients house and shows
the energy consumption
for monitoring purposes.
This electronic newsletter is destined to Lights investors. Creation and text: Quadratta Comunicao e Design.
This publication is a joint realization between the Finance and Investor Relations Superintendence, the Investor
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DEC/FEC indicators positive
for the second quarter of 2014
As a result of the initiatives implemented by the action plan that began in July 2013,
Light has shown improvements in the performance of two important indicators: the
System Average Interruption Duration Index (DEC) and the System Average Interruption
Frequency Index (FEC).
The moving average of the DEC for the last 12 months, expressed in hours, amounted
to 13.80 in the second quarter of 2014, representing a reduction of 32.65% in relation to
the same period last year. The moving average of the FEC, expressed in number of occur-
rences, was 7.03, down 22.32% from the second quarter of 2013.
Light Distribution Superintendent Dalmer Souza attributes the strong performance of
these indicators to the following four pillars. The rst is the change in the organizational
structure of Distribution Management, which took place in May 2013. We created the
Regional Manager position and outlined regions with specic goals. Each manager is
responsible for monitoring a particular area, Souza explained.
The second pillar is the creation of the Special Project, denominated P1, anchored in
Lights PMO, to understand the performance of the indicators throughout the year. Added
to this is the third pillar, which is the management and daily monitoring of the Companys
indicators, identifying the causes of possible network failures and informing the regional
ofces so that they can directly respond with agility to address them, he added.
Finally, Superintendent Souza cited the fourth and nal pillar supporting these positive
developments, which is focused on customer satisfaction: sharing responsibility down to
the operational level at Light. The workforce is more committed and motivated. Every-
one, including Field Technicians, is responsible for the performance of the indicators. But
its also worth mentioning the investments, the technical training of the professionals,
the greater interaction between the areas of operation, the planning of services and the
creation of the Crisis Plan, Souza pointed out.
Other actions can also be associated with the positive results, including the increase in
tree pruning and preventive maintenance services on the grid.
ACTIONS TO IMPROVE THE DEC/FEC INDICATORS
July 2013 to June 2014
I. Aerial distribution network:
- 970 inspections / acts of maintenance
on medium voltage circuits;
- 3,353 transformers replaced;
- 132,667 trees pruned.
II. Underground distribution network:
- 22,754 transformer vault inspections;
- 58,145 manhole inspections;
- Maintenance on 177 transformers, 177 keys
and 1,226 protectors.
* Resubmitted values referring to 2Q14.
DEC FEC
July 13
June 14
9.05
20.49
13.80
7.03
June 14
*
*
July 13