#12Q19 RESULTS Rio de Janeiro August 06, 2019 IBOVESPA Indice IBRX Indice de Energia EE Índice de Ações com Governança Corporativa Diferenciada IGC Indice Dividendos BM&FROVESPA IDIV Índice de Ações com Tag Along Diferenciado ITAG Indice Brasil Amplo BM&FBOVESPA IBRA taesa Índice Valor BM&FBOVESPA IVBX 2 Indice Smalice SMLL#2Legal notice The individual and consolidated financial statements were prepared in accordance with accounting practices adopted in Brazil, comprising the Brazilian Corporation Law, Statements, Guidance and Interpretations issued by Accountant Statements Committee ("CPC") and the rules of the Brazilian Securities Exchange Commission (CVM), combined with specific legislation issued by Electricity Regulatory Agency - ANEEL. ANEEL, as a regulatory agency, has the power to regulate concessions. Results will be presented in both formats, IFRS format and the regulatory format to allow comparison with other years. Note that Regulatory results will not be audited. Taesa's dividend declaration is performed based on the reviewed IFRS results. Statements in this document related to business perspectives, projections on operating and financial income, and those related to Taesa's growth perspective are merely projections and, as such, are based solely on Executive Board' expectations about business future. These expectations depend substantially on changes in market conditions, on Brazilian economy performance, and on industry and international market performance; therefore, subject to unannounced changes. EBITDA is net income before taxes, net financial expenses, and depreciation, amortization and income expenses. EBITDA is not recognized by accounting practices adopted in Brazil or in IFRS, does not represent cash flow for presented periods, and should not be considered as alternative net income. Presented EBITDA is used by Taesa to measure its own performance. Taesa understands that some financial investors and analysts use EBITDA as an operating performance index. "Net Debt" is not recognized by accounting practices adopted in Brazil nor by IFRS, and does not represent cash flow for presented periods. Presented Net Debt is used by Taesa to measure its own performance. Taesa understands that some investors and financial analysts use Net Debt as an indication of its financial performance. Presented managerial results are the sum of Taesa consolidated income with equity in its partially-owned subsidiaries and associated companies. The purpose of this information is to permit better understanding of Taesa business. taesa 2#32Q19 Highlights Photo by Alessandro César de Sousa Berredo IFRS ■ Net Income recorded R$ 307.4 million in 2Q19, 11.3% y.o.y increase (+R$ 31.3 million), mainly due to: (i) Higher inflation rates in 2Q19 affecting the monetary restatement revenues (+R$ 10.2 million) and the equity method (+R$ 19.9 million); (ii) Increase of O&M revenues in R$ 6.5 million as a result of 2018-2019 cycle readjustment; (iii) Improvement of R$ 8.2 million in the Variable Portion; (iv) Lower operating costs and expenses (ex-constrution) in R$ 3.8 million; (v) Gain of R$ 9.8 million on the acquisitions of Brasnorte and Transmineiras; (vi) Higher net financial expenses in R$ 16.9 million, resulted from the debt issuances between the periods. ■ 92.6% q.o.q increase of the net income (+R$ 147.8 million) due to the recovery of the inflation indexes between the compared periods. • Adjusted net income of R$ 384.9 million in 6M19, ex-effects of CPC 47 adoption. After legal and tax incentive reserves, 6M19 distributed earnings reached R$ 345.5 million (R$ 1.00/Unit and payout of 89.8%), as follows: (i) Payment of R$ 96.7 million (R$ 0.28 / Unit) on 05/28/19, based on interim statements of March 31, 2019, divided in (i) interim dividends of R$ 18.9 million (R$ 0.05/ Unit), and (ii) interest on equity of R$ 77.9 million (R$ 0.23 / Unit); and (ii) Distribution of R$ 248.7 million (R$ 0.72 / Unit) approved by the Board of Directors on 08/05/19, based on interim statements of June 30, 2019, divided in: (i) interim dividends of R$ 180.0 million (R$ 0.52 / Unit), and (ii) interest on equity of R$ 68.7 million (R$ 0.20 / Unit); to be paid on 08/19/19 based on the shareholding position of 08/08/19. taesa 3#42Q19 Highlights Regulatory ■ In the end of 2Q19, the cash balance closed at R$ 2,195.3 million (+82.8% q.o.q) and net debt of R$ 2,495.5 million (+5.3% q.o.q). Net Debt / EBITDA was 1.8x at the end of 2Q19, slightly above that recorded in 1Q19 (1.7x). ■ 6th issuance of Taesa's debentures in R$ 1.06 billion in May 2019: (i) 1st series of R$ 850 million at 108% of CDI for 7 years and (ii) 2nd series of R$ 210 million at IPCA + 5.50% for 25 years (green bonds). ■ Net Revenues of 360.2 million in 2Q19, down 13.0% y.o.y, mainly due to the 50% cut in the Annual Permitted Revenues (RAP) of some concessions in the 2017-2018 and 2018- 2019 cycles. ■ Operating costs and expenses totaled R$ 50.8 million, a 3.5% y.o.y reduction, mainly as a result of lower personal expenses in R$ 2.0 million and a reduction of sponsorship expenses. ■ EBITDA totaled R$ 309.4 million in 2Q19, 14.4% y.o.y reduction. EBITDA margin was 85.9% (-1.4 pp). Availability rate of transmission lines of 99.89% and Variable Portion (PV) of -R$ 2.3 million in 1H19, and the latter presents a 84.6% y.o.y reduction (-R$ 12.7 million) and represents 0.3% of Taesa's consolidated RAP. ■ Progress of brownfield and greenfield projects: (i) Completion of acquisition of Eletrobras' stakes on ETAU, Brasnorte and Transmineiras with an addition of R$ 52.6 million to Taesa's total RAP. Brasnorte is now consolidated in Taesa's results. (ii) Instalation licenses issued to Aimorés, Paraguaçu, Janaúba and some installations of Ivaí. After those licenses, the Company can now start the execution of the projects works. Foto de Alessandro César de Sousa Berredo taesa 4#5Macroeconomic Impact on IFRS Revenues IGP-M accumulated (quarter) 1.27 % 1.8% (+0.05pp) 3.10 2.60 1.72 1.92 1.19 -1.28 2017 IGP-M: -0.86% -2.00 IPCA: 2.80% IPCA accumulated (quarter) 1.01 1.05 0.86 0.70 0.71 % 0.20 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Monetary 61.6 Restatement Revenues: R$ million 2.65 2018 IGP-M: 9.68% IPCA: 4.05% -0.20 6M19 IGP-M: 2.45% IPCA: 2.37% 104.7% (+0.74 pp) 1.50 1.46 0.90 0.72 3Q18 4Q18 1Q19 2Q19 For the purpose of the monetary restatement of the contractual asset, one-month gap inflation is used. 9.9% (+10.2 mn) 103.9 105.3 114.1 68.9 68.7 46.5 2017 -43.8 (23.2 mn) -2.4 2018 347.2 mn 6M19 111.8 mn -87.5 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 taesa 5#6IFRS Net Income (in R$ mn) 3.8 13.0 1.6 276.2 10.2 +11.3% (+31.3) 9.8 19.9 16.9 307.4 307.2 7.0 0.2 2Q18 Net Income* Δ Monetary A Construction Restatement Margin A EBITDA Addicional Effects A Depreciation Gain on acquisitions Δ Equity Method A Net Financial Results A Taxes 2Q19 Net Income Participation of 2Q19 Net non-controlling Income shareholders** (Participation * The Company performed adjustments and reclassifications of the balances as of June 30, 2018 in order to present such figures for the purposes of comparison with the Interim Financial Information as of June 30, 2019, due to the adoption of CPC 47. ** Brasnorte Main Impacts: Higher inflation rates reflected in: • • Monetary Restatement of the Contractual Asset Revenues, and • Equity Method R$ 6.5 million increase of O&M revenues and R$ 8.2 million improvement of Variable Portion Gain from the a bargain purchased of interests in Brasnorte, Transleste and Transudeste and reassessment of Brasnorte's value in Taesa's balance sheet after the acquisition of the asset control total net impact of R$ 9.8 million - • Higher net financial expenses due to new funding of controlling shareholders) taesa 6#7Projects under Construction EXTENSION / LOCATION PARTNERSHIP CONCESSION START PREVIOUS INSTALLATION LICENSE LICENSE ANEEL DEADLINE 82 km Mariana 100% Taesa Minas Gerais May 2014 ✓ May/16 √ Dec/18 (1) December 2019 Miracema 90 km Tocantins 100% Taesa June ✓ Oct/17 ✓ Apr/18 December 2019 SUDAM tax benefit 2016 25% Taesa EDTE³ 168 km Bahia 50% ENTE December 2016 ✓ Jun/18 December 2019 Jan/19 25% Apollo 12 236 km 50% Taesa ESTE Minas Gerais and Espírito Santo 50% Alupar (100% EATE-TBE) February 2017 ✓ Jan/19 February 2022 Janaúba 542 km Bahia and Minas 100% Taesa February 2017 ✓ Sep/18 Gerais Aimorés 208 km Minas Gerais 50% Taesa 50% ISA Cteep February 2017 ✓ Oct/18 Paraguaçu 338 km Bahia and Minas Gerais 50% Taesa 50% ISA Cteep February 2017 ✓ Oct/18 Ivaí 600 km Paraná 50% Taesa 50% ISA Cteep August 2017 ✓ Apr/19 ✓ ✓ Jul/19 Apr/19 ✓ May/19 (2) February 2022 February 2022 February 2022 August 2022 SUDENE tax benefit SUDENE tax benefit SUDENE tax benefit Sant'Ana 591 km Rio Grande do Sul March 100% Taesa 2019 (1) Conclusion time estimated by the Company (2) Several facilities already obtained the installation license, but some other facilities are still in the process of issuing it. March 2023 taesa 7#8Investor Relations email: [email protected] telephone: +55 21 2212-6060 www.taesa.com.br/ir taesa