EDP - Energias do Brasil S.A. Interim Financial Information

Transcription

1 EDP - Energias do Brasil S.A. Interim Financial Information June 30, 2013

2 EDP - ENERGIAS DO BRASIL S.A. STATEMENT OF FINANCIAL POSITIONS AT (In thousands of Reais) Note 12/31/ /31/2012 ASSETS Reclassified Reclassified Current assets Cash and cash equivalents 6 140,060 99,054 1,175, ,375 Accounts receivable 5,806 3,402 5,041 4,530 Consumers and concessionaires ,169,120 1,252,551 Tax and social contribution 8 71,096 84, , ,040 Related parties 10 43,714 10, Dividends receivable , , Inventory ,197 40,579 Pledges and restricted deposits ,163 24,207 Prepaid expenses , Income receivable - - 4,758 6,150 Financial assets available for sale 31 6,932 19,806 6,932 19,806 Other credits ,009 1, , , , ,161 2,874,246 2,278,307 Non-current assets Accounts receivable - 21,301 20,602 18,786 21,324 Indemnifiable financial assets , ,278 Consumers and concessionaires ,563 40,294 Tax and social contribution ,244 55,512 Deferred income tax and social contribution , ,957 Related parties , , , ,232 Advances on future capital increases 211, , Pledges and restricted deposits - 12,426 12, , ,650 Prepaid expenses - - 1,050 - Other credits 11 14,414 14,291 53,840 46, , ,277 1,965,619 1,849,574 Investments 12 4,398,077 4,374, , ,682 Investment property - - 4,127 4,127 Property, plant and equipment 14 8,585 5,004 4,706,093 4,554,328 Intangible assets 15 1,645 1,670 3,379,187 3,424,252 4,408,307 4,381,517 8,780,982 8,691,389 Total assets 5,689,187 5,179,955 13,620,847 12,819,270 See the accompanying notes to the interim accounting information

3 EDP - ENERGIAS DO BRASIL S.A. STATEMENT OF FINANCIAL POSITIONS AT (In thousands of Reais) Note 12/31/ /31/2012 LIABILITIES and SHAREHOLDERS' EQUITY Reclassified Reclassified Current liabilities Suppliers 16 5,306 7, , ,180 Tax and social contribution 8 4,998 23, , ,260 Deferred income tax and social contribution ,436 - Dividends , , , ,472 Debentures , , ,535 Loans, financing and debt charges , ,236 Post-employment benefits ,554 35,517 Estimated employee benefits and social charges 8,203 11,364 49,422 65,011 Regulatory and industry charges , ,108 Use of public property ,161 21,953 Provisions 21 6,138 6,429 54,711 53,548 Other accounts payable 11 4,835 4, , , , ,243 3,485,642 2,611,765 Non-current liabilities Tax and social contribution 8 43,136 43,879 97, ,855 Deferred income tax and social contribution 9-1, , ,253 Debentures , ,674 1,270,281 1,052,633 Loans, financing and debt charges ,316,086 1,331,142 Post-employment benefits , ,332 Related parties Regulatory and industry charges ,882 17,071 Use of public property , ,140 Provisions 21 37,409 31, , ,428 Provision for unsecured liabilities 12 22,660 27,781 1,425 1,455 Reserve for reversals and amortization ,248 17,248 Other accounts payable ,508 15, , ,028 4,096,870 3,875,119 Shareholders' equity Capital stock ,182,716 3,182,716 3,182,716 3,182,716 Capital reserves , , , ,540 Profit reserves ,944 1,194, ,944 1,194,422 Other comprehensive income (48,279) (51,721) (48,279) (51,721) Treasury shares (6,614) (6,614) (6,614) (6,614) Retained earnings 117,222 (17,659) 117,222 (17,659) Shareholders' equity attributed to the owners of equity 4,327,724 4,445,684 4,327,724 4,445,684 Non-controlling interests ,710,611 1,886,702 Total shareholders' equity 4,327,724 4,445,684 6,038,335 6,332,386 Total liabilities and shareholders' equity 5,689,187 5,179,955 13,620,847 12,819, See the accompanying notes to the interim accounting information

4 EDP - ENERGIAS DO BRASIL S.A. STATEMENT OF INCOME Note 04/01/2013 to 01/01/2013 to 04/01/2012 to 06/30/ /01/2012 to 06/30/ /01/2013 to 01/01/2013 to 04/01/2012 to 06/30/ /01/2012 to 06/30/2012 Reclassified Reclassified Reclassified Reclassified Revenue ,642,423 3,533,200 1,460,333 2,972,150 Cost of production for electricity services Electricity services cost Electricity purchased for resale (894,156) (1,941,304) (763,850) (1,406,711) Electricity network utilization charges (84,934) (173,696) (165,614) (334,622) (979,090) (2,115,000) (929,464) (1,741,333) Cost of operations 24 Personnel (51,938) (105,191) (37,750) (89,740) Third-party materials and services (49,438) (98,614) (50,048) (108,643) Depreciation and amortization (69,026) (138,857) (68,517) (133,039) Other operating costs (9,808) (18,651) (8,252) (15,323) (180,210) (361,313) (164,567) (346,745) (1,159,300) (2,476,313) (1,094,031) (2,088,078) Cost of services rendered to third-parties (67,964) (113,747) (21,195) (88,037) Gross margin , , , ,035 Operating income and expenses 24 Sales expenses 9 - (125) (282) (10,083) (35,271) (17,300) (26,750) General and administrative expenses (27,418) (49,634) (22,640) (44,334) (100,540) (190,749) (76,925) (155,148) Depreciation and amortization (1,572) (3,142) (1,554) (3,106) (15,748) (32,300) (16,016) (31,990) Other operating income and expenses (327) (1,961) (1,909) (2,331) (46,630) (66,712) (14,785) (26,674) (29,308) (54,737) (26,228) (50,053) (173,001) (325,032) (125,026) (240,562) Income (loss) before financial income (loss), taxes and ownership interest (29,070) (54,160) (26,087) (49,912) 242, , , ,473 Equity in the earnings of subsidiaries , ,729 68, ,283 (44,780) (106,344) (17,255) (25,570) Financial income 25 10,391 16,692 6,869 14,495 44,013 80,220 46,203 98,605 Financial expenses 25 (27,076) (39,380) (9,164) (12,482) (121,186) (216,872) (104,815) (197,039) Financial result (16,685) (22,688) (2,295) 2,013 (77,173) (136,652) (58,612) (98,434) Income (loss) before income tax 44, ,881 39, , , , , ,469 Income tax and social contribution - current (55,448) (159,596) (47,967) (134,341) Deferred income tax and social contribution (3,293) (1,618) (6,959) (15,588) (58,741) (161,214) (54,926) (149,929) Net result (loss) for the period 44, ,881 39, ,384 61, ,898 89, ,540 Attributable to controlling shareholders 44, ,881 39, ,384 44, ,881 39, ,384 Attributable to non-controlling interests ,858 79,017 49,392 99,156 Income per share attributable to controlling shareholders Basic earnings per share (Reais / Shares) (0) ON Diluted earnings per share (Reais / Shares) ON See the accompanying notes to the interim accounting information

5 EDP - ENERGIAS DO BRASIL S.A. STATEMENTS OF COMPREHENSIVE INCOME (In thousands of Reais) 04/01/2013 to 01/01/2013 to 04/01/2012 to 06/30/ /01/2012 to 06/30/ /01/2013 to 01/01/2013 to 04/01/2012 to 06/30/ /01/2012 to 06/30/2012 Reclassified Reclassified Net result (loss) for the period 44, ,881 39, ,384 61, ,898 89, ,540 Other comprehensive income Actuarial gains and losses - Post-employment benefit plan (10,963) (10,963) 19,521 19,521 (10,963) (10,963) 19,521 19,521 Financial assets available for sale (1,519) (5,612) - (8,319) (1,519) (5,612) - (8,319) Cash flow hedge 9,821 10,826 (15,279) (12,811) 9,821 10,826 (15,279) (12,811) Deferred income tax and social contribution 564 1,956 (1,443) ,956 (1,443) 547 Equity evaluation adjustment (402) (805) Comprehensive income for the period 42, ,283 42, ,322 59, ,105 92, ,478 Attributable to controlling shareholders 42, ,283 42, ,322 42, ,283 42, ,322 Attributable to non-controlling interests ,260 79,822 49,392 99,156 See the accompanying notes to the interim accounting information

6 EDP - ENERGIAS DO BRASIL S.A. STATEMENTS OF CASH FLOW PERIODS ENDED JUNE 30 (In thousands of Reais) Reclassified Reclassified Cash flow from operating activities Income before income and social contribution taxes 134, , , ,469 Adjustments for reconciliation of income with cash from operations Deferred taxes - - 2,436 - Allowance for doubtful accounts and net losses ,271 26,209 Indemnifiable financial assets - Write-off - - 2,091 3,341 Fair value of indemnifiable financial assets - - (12,578) - Depreciation and amortization 3,140 3, , ,029 Net book value of assets and intangible assets written off ,576 16,594 Suppliers - Monetary restatement - Energia Livre - - 2,244 2,739 Debt charges and monetary variations on loans, financing and debentures 27,775 (1,740) 120, ,286 Use of public property - monetary restatement and adjustment to present value ,530 12,951 Provision for post-employment benefit plan ,476 14,307 Provision (reversal) and monetary restatement for civil, tax and labor contingencies 5,549 4,653 54,527 15,465 Reserve for environmental permits - monetary restatement and adjustment to present value - - (476) 919 Adjustment to present value (3,103) (3,866) 7,371 6,685 Income from equity interests (211,729) (230,283) 106,344 25,570 Revenue from Exceeding of Demand and Reactive Energy Surplus ,852 Allowance for investment losses 7,288 8,191 7,288 4,339 Regulatory and industry charges - Provision and monetary restatement ,783 26,149 Pledges and restricted deposits linked to lawsuits - price-level restatement - - (3,650) (4,962) Income and social contribution taxes - monetary restatement - - 1,206 4,343 Monetary (reversal) restatement - contingent consideration - - 1,189 2,170 CDE resources to be refunded - - (103,033) - Other - (442) (4,272) (1,353) (35,787) (37,990) 839, ,102 (Increase) decrease in operating assets Consumers and concessionaires ,970 (73,418) Income and social contribution taxes to offset - - (13,342) (19,226) Inventory - - 1,236 (7,135) Pledges and restricted deposits (213) (1,039) 8,131 10,774 Prepaid expenses (337) 153 (4,013) 1,223 Income receivable - - 1,392 (1,325) Other operating assets 1,007 (1,799) (18,507) (18,514) 457 (2,685) 7,867 (107,621) Increase (decrease) in operating liabilities Suppliers (2,591) (972) (55,055) 9,462 Other tax and social contribution (4,277) (4,357) (37,939) (41,043) Post-employment benefits - - (15,550) (17,623) Estimated employee benefits and social charges (3,160) (2,495) (15,588) (14,956) Regulatory and industry charges - - (46,585) (23,503) Provisions - (19) (23,238) (25,235) Other operating liabilities 110 (657) (1,376) (23,479) (9,918) (8,500) (195,331) (136,377) Cash (invested in) received from operating activities (45,248) (49,175) 651, ,104 Income and social contribution taxes paid - - (118,866) (100,363) Net cash (invested in) received from operating activities (45,248) (49,175) 532, ,741 Cash flow from investment activities Receipt of cash due to insurance indemnity ,555 Disposal (acquisition) of investment (7,013) 5,804 (7,013) 5,604 Dividends received 37, , Capital increase / AFAC in subsidiaries (272,200) (180,643) (83,000) (93,190) Additions in assets, intangible and financial assets, indemnifiable (3,880) (737) (324,094) (191,143) Related parties - - (539) - Cash and cash equivalents - Investment held for sale (6,736) Net cash (invested in) received from investing activities (245,300) 15,642 (414,646) (283,910) Net cash from financing activities Related parties (52,492) 1,267 (28,828) (176) Pledges and restricted deposits - - 4, Capital increase (decrease) Dividends and interest on capital paid (112,363) (174,923) (141,767) (219,345) Funding from Loans, financing and debentures 716,170-1,153, ,482 Repayment of principal of loans, financing and debentures (218,000) - (432,676) (280,526) Debt charges, net of derivatives (1,829) - (58,932) (92,013) Contingent consideration (99,860) Use of public property - - (10,332) (9,908) Net cash (invested in) received from financing activities 331,554 (173,656) 485,769 (380,336) Net decrease (increase) in cash and cash equivalents 41,006 (207,189) 603,874 (146,505) Cash and cash equivalents at the end of the period 140,060 23,033 1,175, ,493 Cash and cash equivalents at the beginning of the period 99, , , ,998 41,006 (207,189) 603,874 (146,505) See the accompanying notes to the interim accounting information

7 EDP - ENERGIAS DO BRASIL S.A. STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY PERIODS ENDED JUNE 30, 2013 and 2012 (In thousands of Reais) Capital Capital Profit Treasury Other comprehensive Retained Total Non- Total stock reserves reserves shares income earnings controlling interests Balances on December 31, ,182,716 95,598 1,507,656 (6,614) (174,342) - 4,605,014 1,942,624 6,547,638 Prior-year adjustments (128,547) 128,547 (19,478) (19,478) - (19,478) Balances at December 31, 2011 (Reclassified) 3,182,716 95,598 1,379,109 (6,614) (45,795) (19,478) 4,585,536 1,942,624 6,528,160 Capital reserves - 49, ,858 (49,858) - Approved additional dividend - General Shareholders' Meeting on 04/10/ (239,249) (239,249) (61,236) (300,485) Net result (loss) for the period , ,384 99, , Other comprehensive income Actuarial gains and losses - Post-employment benefit plan ,521-19,521-19,521 Financial assets available for sale (8,319) - (8,319) - (8,319) Cash flow hedge (12,811) - (12,811) - (12,811) Deferred income tax and social contribution Transfer to profit reserves ,884 - (12,884) Balances on June 30, ,182, ,456 1,152,744 (6,614) (59,741) 162,906 4,577,467 1,930,687 6,508,154 Capital Capital Profit Treasury Other comprehensive Retained Total Non- Total stock reserves reserves shares income earnings controlling interests Balances on December 31, ,182, ,540 1,194,422 (6,614) (51,721) - 4,463,343 1,886,860 6,350,203 Prior-year adjustments (17,659) (17,659) (158) (17,817) Balances at December 31, 2012 (Reclassified) 3,182, ,540 1,194,422 (6,614) (51,721) (17,659) 4,445,684 1,886,702 6,332,386 Capital transaction - - (8,417) (8,417) 1,418 (6,999) Equity evaluation adjustment - (805) (805) Approved additional dividend - General Shareholders' Meeting on April 10, (194,140) (194,140) - (194,140) Distribution of Profit Reserve Annual Shareholders' Meeting held on April 10, (45,686) (45,686) - (45,686) Net result (loss) for the period , ,881 79, ,898 Allocation of net income Dividends and capital decrease attributable to non-controlling interests (257,331) (257,331) Other comprehensive income Actuarial gains and losses - Post-employment benefit plan (10,963) - (10,963) - (10,963) Financial assets available for sale (5,612) - (5,612) - (5,612) Cash flow hedge ,826-10,826-10,826 Deferred income tax and social contribution ,956-1,956-1,956 Transfer to profit reserves - - (7,235) - 7, Balances on June 30, ,182, , ,944 (6,614) (48,279) 117,222 4,327,724 1,710,611 6,038,335 See the accompanying notes to the interim accounting information

8 EDP - ENERGIAS DO BRASIL S.A. STATEMENTS OF ADDED VALUE PERIODS ENDED JUNE 30 (In thousands of Reais) Reclassified Reclassified Generation of value added 640 (2,715) 5,041,895 4,635,296 Net operating income ,709,702 4,434,670 Allowance for doubtful accounts and net losses (4,841) (3,593) (40,112) (29,801) Deferred tax credits Revenue related to the construction of company assets 3, , ,253 Revenue from construction ,426 85,261 Other revenue ,636 33,913 (-) Inputs acquired from third parties (34,281) (22,405) (2,963,681) (2,349,219) Costs of purchased energy - - (2,133,842) (1,537,082) Electricity network utilization charges - - (191,399) (376,465) Electricity network use charges and system service charges - - (347) - Materials (3,598) (1,345) (122,496) (59,063) Third-party services (26,218) (14,418) (285,456) (234,416) Infrastructure construction costs - - (110,977) (83,619) Other operating costs (4,465) (6,642) (119,164) (58,574) Gross added value (33,641) (25,120) 2,078,214 2,286,077 Retentions Depreciation and amortization (3,142) (3,106) (175,215) (172,182) Net added value produced (36,783) (28,226) 1,902,999 2,113,895 Value added received through transfers Financial revenue 16,692 14,495 83,417 98,559 Equity accounting result 211, ,283 (106,344) (25,570) Total added value payable 191, ,552 1,880,072 2,186,884 Distribution of added value Personnel 10,454 16, , ,526 Direct remuneration 8,003 14, ,697 93,735 Benefits 1,621 1,579 27,587 25,819 FGTS 830 1,182 10,226 15,972 Taxes, rates and contributions 2,377 3,076 1,270,199 1,553,146 Federal 1,809 2, , ,343 State , ,035 Municipal ,980 4,768 Third-party capital remuneration 43,926 14, , ,672 Interest 39,380 12, , ,728 Rental 4,546 1,667 8,775 5,944 Remuneration of own capital ,017 99,156 Non-controlling interests ,056 90,303 Founders' shares - - 8,961 8,853 56,757 34,168 1,745,191 2,004,500 Retained earnings 134, , , , , ,552 1,880,072 2,186,884 See the accompanying notes to the interim accounting information

9 Notes to the interim accounting information 1 Operating context EDP - Energias do Brasil S.A. (Company or Energias do Brasil or ), corporation, publicly traded, incorporated on July 24, 2000, headquartered in the municipality of São Paulo, has as its corporate purpose the participation in other corporations as a shareholder or quotaholder, as well as in businesses and enterprises in the electrical power industry in Brazil or overseas, the management of electricity generation, transmission and distribution and the trading of assets in their various forms and types, and the studying, planning, developing and implementing of electricity generation, transmission, distribution and commercialization projects in their various forms and types. The Company has the following interests in subsidiaries, joint ventures and associates: Companies Classification Consolidation Direct Indirect Direct Indirect Center Bandeirante Energia S.A. (EDP Bandeirante) Subsidiary full Espírito Santo Centrais Elétricas S.A. (EDP Escelsa) Subsidiary full Generation Energest S.A. Energest Subsidiary full Costa Rica Energética Ltda. (Costa Rica) Subsidiary full Pantanal Energética Ltda. (Pantanal) Subsidiary full Santa Fé Energia S.A. (Santa Fé) Subsidiary full Lajeado Energia S.A. (Lajeado) Subsidiary full Companhia Energética do Jari - (CEJA) Subsidiary full ECE Participações S.A. (ECE Participações) Subsidiary full Investco S.A. (Investco) Subsidiary full Enerpeixe S.A. (Enerpeixe) Subsidiary full Empresa de Energia Cachoeira Caldeirão S.A. (Cachoeira Subsidiary full Caldeirão) Terra Verde Bioenergia Participações S.A. (Terra Verde) Subsidiary full Porto do Pecém Geração de Energia S.A. (Porto do Pecém) Joint venture by the equity accounting Porto do Pecém Transportadora de Minérios S.A. (Pecém TM) Pecém Operação e Manutenção de Unidades de Geração Elétrica S.A. (Pecém OM) EDP Renováveis Brasil S.A. (EDP Renováveis) Associated company by the equity accounting Central Nacional de Energia Eólica S.A. (Cenaeel) Associated company by the equity accounting by EDP Renováveis Elebrás Projetos S.A. (Elebrás) Associated company by the equity accounting by EDP Renováveis Central Eólica Baixa do Feijão I S.A. (Feijão I) Associated company by the equity accounting by EDP Renováveis Central Eólica Baixa do Feijão II S.A. (Feijão II) Central Eólica Baixa do Feijão III S.A. (Feijão III) Central Eólica Baixa do Feijão IV S.A. (Feijão IV) Central Eólica Aventura S.A. (Aventura) Sales EDP - Comercialização e Serviços de Energia S.A. (EDP Comercializadora) Joint venture Joint venture Associated company Associated company Associated company Associated company Subsidiary by the equity accounting by the equity accounting by the equity accounting by EDP Renováveis by the equity accounting by EDP Renováveis by the equity accounting by EDP Renováveis by the equity accounting by EDP Renováveis % Interest 12/31/ Others Enercouto S.A. (Enercouto) Subsidiary full Escelsa Participações S.A. (Escelsapar) Subsidiary full Resende Engenharia e Assessoria Ltda (Resende) Subsidiary full by the equity accounting by Mabe Construções e Administração de Projetos Ltda Associated company Porto do Pecém full by the equity accounting by Comercializadora de equipamentos y materiais Mabe Ltda Associated company Porto do Pecém Net working capital In the Company s consolidated financial statements, net working capital was negative by R$611,396 on June 30, Net working capital corresponds to the difference between current assets and current liabilities. Management understands that the Company has reasonable liquidity, despite its negative net working capital, and enjoys the proper conditions to comply with its short-term operating obligations in every line of business it operates. For distribution, funds from the CDE, EDP Escelsa tax review to be homologated in August 2013, and the EDP Bandeirante tax adjustment in October 2013 will provide sufficient funds to pay short-term obligations. For generation, companies whose plants are in operation generate, throughout the year, operating funds that are sufficient to pay short-term obligations. In the specific case of Ceja, debentures amounting to R$346,791 and maturing in October 2013 are in the stage of refinance negotiation. 8

10 Notes to the interim accounting information 2 Preparation basis and accounting practices 2.1 Basis of preparation Statement of Conformity Individual interim accounting information has been prepared in accordance with Technical Pronouncement CPC 21 Interim Statements, and the consolidated interim accounting information, in accordance with Technical Pronouncement CPC 21 Interim Statements, and International Accounting Standard (IAS) 34 Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, and presented in conformity with standards issued by the Brazilian Securities and Exchange Commission - CVM applicable to the preparation of Quarterly Information (ITR). The individual interim accounting information presents investments in subsidiaries, joint ventures and associates accounted for using the equity method, in conformity with Brazilian Corporate Law. Therefore, this interim accounting information is not considered to be fully consistent with IFRS, since IFRS requires that these investments be measured in the 's separate interim financial information either at fair value or at cost. Since there is no difference between the consolidated shareholders' equity and consolidated net income attributable to the equity owners of the parent company in the consolidated interim accounting information prepared under IFRS and BR GAAP, and the Parent Company's shareholders' equity and net income in the parent company's individual interim accounting information under BR GAAP, the Company has elected to present the accompanying individual and consolidated interim accounting information as a single set of information, side by side. Direct and indirect subsidiaries are consolidated from their acquisition dates, which correspond to the dates on which the Company obtained control, and they will continue to be consolidated until the date on which this control ceases. The Company's management authorized the completion of the consolidated interim accounting information on July 24, This interim accounting information follows uniform principles, methods and criteria in relation to those adopted on last year s closing date as at December 31, 2012 and, accordingly, should be read together with annual financial statements published on March 5, 2013, except for the revised CPCs that became effective in January 2013 and that introduce some changes in the accounting practices had been adopted until the previous year, as mentioned in note Some notes are not presented, as they have not been changed, to avoid repetition of information already disclosed in annual financial statements as of December 31, Notes in this situation are as follows: Number NE Name of the Note 1.1 Concessions 2.2 Summary of significant accounting policies 5.5 Provision for allowance for doubtful accounts 6 Accounts receivable 10 Inventory 11 Pledges and restricted deposits 16 Investment properties 23 Estimated employee benefits 25 Use of public property 39 Insurance Coverage Measurement basis The individual and consolidated interim accounting information have been prepared under the historical cost convention, except for certain derivative financial instruments measured at fair value, non-derivative financial instruments measured at fair value through profit or loss, and assets available for sale measured at fair value. Functional and presentation currency The individual and consolidated accounting information are being presented in Brazilian Reais, the functional currency of the Company. All accounting information presented in Brazilian Reais has been rounded to the nearest whole number, except as otherwise indicated. 2.2 interim accounting information The consolidated interim accounting information was prepared in accordance with the standards established by CPC 36 (R3) - Statements, approved by CVM Resolution 698/12 covering the Company and its subsidiaries (as described in Note 12.2). The main consolidation practices adopted were as follows: Elimination of the investment of the parent company in the subsidiary companies, Elimination of the balances of accounts between the parent company and the subsidiary companies and of the accounts maintained among these subsidiary companies, Recognition of non-controlling interests in the statement of financial position and in the statement of income, Business combinations have been considered since September 2008, determining the acquisition cost, recognizing and measuring all assumed assets and liabilities, as well as non-controlling interests, recognizing and measuring goodwill for expected future earnings, all measured on acquisition date. If the excess is negative, a gain is recognized in results for the year. 2.3 Presentation of information by segment Information per operating segment is presented consistently with the internal report provided for the operating decision maker. The main operating decision maker, in charge of allocating funds and evaluating performance of operating segments is the Company's Executive Board, in charge of the Group's strategic decision making (Note 30). 2.4 New IFRS and IFRIC (IASB's International Financial Reporting Interpretations Committee) interpretations Some of the standards and amendments to standards and interpretations issued by IASB have not yet become effective for the period ended June 30, 2013, and therefore, they have not been applied in the preparation of this interim financial information. The CPC has not yet issued the respective pronouncements and corresponding amendments to the new and revised IFRS and IFRIC previously presented. These pronouncements and amendments should be edited by the CPC and approved by the CVM prior to their date of compulsory application, due to the commitment of CPC and CVM to keep the standards in force consistent with the updates made by the IASB. 9

11 Notes to the interim accounting information New and revised standards and interpretations already issued by the IASB and not adopted by the Company IFRIC 21 - Taxes IASB issued IFRIC 21: Taxes, an interpretation on tax bookkeeping enforced by governments. The interpretation was developed by the IFRS Interpretations Committee ('Interpretations Committee), the interpretative body of IASB. IFRIC 21 is an interpretation of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. IAS 37 establishes criteria for the recognition of a liability, one of which is that the Company must have a present obligation as a result of a past event (known as the obligation generating event). This interpretation clarifies that the obligation generating event that generates the obligation of paying a fee is the activity that triggers fee payment, as described in pertinent legislation. IFRIC 21 is effective for years starting on or after January 1, IAS 32 - Compensation of financial assets and liabilities Amendments to IAS 32 clarify existing adoption issues concerning requirements for offsetting of assets and liabilities. Specifically, these amendments clarify the meaning of currently has the legal right to offset" and concurrent realization and settlement." The amendments apply to annual periods beginning on or after January 1, 2014, and require retroactive adoption. IAS 36 - Impairment of assets: Disclosure of non-financial assets recoverable amounts IASB published changes to IAS 36 related to the disclosure of non-financial assets recoverable amounts. Changes introduced by IAS 36 require the entity to disclose depreciated assets recoverable value, which is based on fair value less disposal costs. Changes must be applied on a retroactive basis for years starting on or after January 1, Investment Entities (amendments to IFRS 10, IFRS 12 and IAS 27) Changes apply to a particular class of businesses that qualify as investment entities. The IASB uses the term investment entity to refer to an entity which is engaged in investing funds exclusively to obtain capital valuation returns, investment earnings or both. An investment entity should also evaluate its investments performance based on fair value. These entities may include private capital organizations, risk capital organizations, pension funds, sovereign funds and other investment funds. In accordance with IFRS 10 Financial Statements, entities must consolidate all investees over which they have control (that is, all subsidiaries). However, financial statement preparers and users have suggested that the consolidation of investment entities does not result in useful information for investors. In light of this, changes have been made to provide an exception to the consolidation requirements in IFRS 10, and investment entities are now accounted for at fair value through income, instead of being consolidated. Changes have also been made to the disclosure requirements for investment entities. The amendments apply to annual periods beginning on or after January 1, 2014, and require retroactive adoption. IFRS 9 Financial instruments IFRS 9 Financial Instruments addresses the classification, measurement and recognition of financial assets and liabilities. IFRS 9 was issued in November 2009 and revised in October 2010, replacing the portions of IAS 39 relating to the classification and measurement of financial instruments. This standard requires the classification of financial assets, at initial recognition, in two categories: measured at fair value and measured at amortized cost. The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial instruments. For financial liabilities, the main change is that, in cases where the fair value option is adopted, the value resulting from this change in fair value due to the credit risk of the entity itself is recorded in other comprehensive P/L and not in the income statement, except when this results in an accounting mismatch. The standard will be applicable from January 1, New and revised standards and interpretations already issued by the CPC adopted by the Company after January 1, CPC 18 (R2) Investments in associated companies, subsidiaries and jointly controlled ventures (IAS 28) Includes a reference to Joint Ventures. As with the previous version of CPC 18, this standard includes references to Investments in Subsidiaries, which were not included in the IAS 28 version (issued by the IASB), but are needed in Brazil due to the rule contained in Brazilian Corporate Law that in individual financial statements, investments in subsidiaries must be valued using the equity method of accounting. The Company evaluated the impact of the revision of this CPC and there was no significant impact. CPC 19 (R2) Joint Arrangements (IFRS 11) The main changes included compatibilizations of text in order to produce the same accounting effects as the implementation of IFRS 11 - Joint Arrangements, the application of which is mandatory for 2013, and which alters the original Pronouncement primarily regarding the elimination of the option to consolidate the so-called investments in joint ventures and the differentiation between a jointly controlled entity and a joint operations agreement, as defined in the Pronouncement. Beginning in January 2013, the Company no longer consolidates on a proportional basis the jointlyowned enterprises Porto do Pecém, Pecém TM and Pecém OM, and has started to account for these investments using the equity method. CPC 33 (R1) Employee benefits (IAS 19) The revision includes substantial changes to the text of IAS 19. The main modifications of this standard relate to defined benefit plans. The elimination of the corridor method, and the full recognition of actuarial gains and losses only on the date of the financial statements in Other Comprehensive Income have also been introduced, but these practices have been used by the Company and its subsidiaries since the initial adoption of the IFRS in Aside from the full recognition in P/L of past service costs, and the financial expenses/revenue of the benefit plan, which are now recognized at their net value based on the discount rate. The modifications to IAS 19 are effective for annual periods beginning on or after January 1, 2013 and require retroactive adoption. The expected impacts relate to the immediate recognition of past service costs as an expense upon the change of the plan in substitution of the deferral against P/L. As provided for in CPC 23, changes in accounting practices require retrospective application to adjust the results for prior periods, which are presented for comparison with the current period, in order to ensure consistency of accounting practices, as if the accounting practices had been effective from the start of the earliest period presented. Adjustments in this regard are recognized under Accumulated Income or Losses. (i) reduction in the opening statement of financial position as at January 1, 2012 amounting to R$29,484 (R$19,478, net of taxes), in contrast, the amortization of past service costs amounting to R$ 2,757 per year that would occur, in the medium term, for another 14 fiscal years, will not further affect this spending (ii) reduction in Personnel expenses for fiscal year 2012 of R$ 2,757, when presented in comparison with the financial statements for the year ending December 31, During the quarter, the effect amounted to R$

12 Notes to the interim accounting information 3 Joint venture by the equity method 3.1 CPC 36 (R3) financial statements (IFRS 10) This standard requires the parent company to present its consolidated interim accounting information as if it were a single economic entity, replacing the requirements previously contained in IAS 27 and Separate Financial Information, and SIC 12 Consolidation Special Purpose Entities. The details of the changes were set out in IFRS 10. The Company evaluated the impact of the revision of this CPC and there was no significant impact. CPC 44 Combined Financial Statement The purpose of this standard is to provide presentation criteria for combined financial statements that are represented by a single set of financial statements of entities under common control. Combined financial statements are prepared to present accounting information as if different entities under common control were a single entity, using the same procedures that are used for the preparation of consolidated financial statements; the difference is that consolidated financial statements are prepared for the parent company and include its subsidiaries statements and statements of entities in which the parent company assumes most risks and benefits, while combined financial statements do not refer to a parent company but to a group of entities under common control. The Company evaluated the impacts of this CPC and there was no significant impact. CPC 45 Disclosure of Interests in Other Entities (IFRS 12) The details of the changes were set out in IFRS 12. The Company evaluated the impact of the revision of this CPC and there was no significant impact. CPC 46 Measurement at Fair Value (IFRS 13) IFRS 13 introduces a single basis for fair value measurements and the disclosure of this information. The quantitative and qualitative disclosures, based on the three-tier fair value hierarchy currently required for financial instruments, will be extended to include all assets and liabilities. The Company evaluated the impact of the revision of this CPC and there was no significant impact. OCPC 06 Pro Forma Financial Information Pro forma financial statements must illustrate only the effects of a specific transaction that may be objectively measured, such as acquisition, sale, disposal, business spin-off, incorporation or merger. Although the Company presents Pro Forma Financial Statements on a voluntary basis, the Company evaluated impacts of this Guideline and concluded that there were no significant impacts. Interim accounting information The Statement of financial position as at June 30, 2013 and December 31, 2012, the Statements of Income and the Statement of Comprehensive Income for the periods ended June 30, 2013 and 2012 of Porto do Pecém, a joint venture are presented below in summarized form as required by the Technical Pronouncement CPC 45 - Disclosure in Other Entities: Porto do Pecém Assets Current assets Cash and cash equivalents Other current assets Non-current assets Deferred income tax and social contribution Other non-current assets Property, plant and equipment Intangible assets Total assets Statement of financial position 12/31/2012 Liabilities 12/31/2012 Current liabilities 8, Tax and social contribution 24,122 6, , ,338 Loans, financing and debt charges 196, , , ,064 Other current liabilities 311, , , ,408 Non-current liabilities 390, ,910 Loans and financing 2,085,780 2,192,624 18,162 16,516 Other non-current liabilities 320, , , ,426 2,406,776 2,464,000 3,428,304 3,410,324 1,386 1,460 Shareholders' equity 1,188,938 1,222,866 4,128,034 4,158,274 Total liabilities and shareholders' equity 4,128,034 4,158,274 Statement of income 04/01/2013 to 01/01/2013 to 04/01/2012 to 06/30/ /01/2012 to 06/30/2012 Revenue Cost of production for electricity services Depreciation and amortization Operating income and expenses Financial result Income and social contribution taxes - current and deferred Net result (loss) for the period 227, , (276,630) (621,166) - - (25,938) (41,946) (90) (166) (14,192) (20,630) (3,586) (6,868) (46,654) (75,368) (28,152) (38,496) 46, ,354 1,772 2,974 (90,034) (214,218) (30,056) (42,556) Statement of comprehensive income 04/01/2013 to 01/01/2013 to 04/01/2012 to 06/30/ /01/2012 to 06/30/2012 Net result (loss) for the period Other comprehensive income Cash flow hedge Deferred income tax and social contribution Comprehensive income for the period (90,034) (214,218) (30,056) (42,556) - - 7,780 10,826 (270) (12,810) (2,645) (3,681) 92 4,355 (84,899) (207,073) (30,234) (51,011) 11

13 Notes to the interim accounting information 3.2 Provisions for civil, tax and labor contingencies and restricted deposits current and non-current In addition, the financial information summarized above details contingent liabilities: Risk of probable loss On June 30, 2013 and December 31, 2012, there were no contingencies whose risk of loss was classified as probable. Risk of possible loss Civil Proceeding nº Writ of Mandamus with injunction request (issued based on Public Civil Lawsuit No ) before (i) The State of Ceará, (ii) Brazilian Environment Institute (IBAMA) of (iii) State Environment Superintendence of the State of Ceará - SEMACE and (iv) Porto do Pecém Geração de Energia S.A., requiring judicial approval which determines, in sum, that (i) works of implementing the Pecém Energy Facility should be discontinued, in the area of the Industrial Complex, until the failures and omissions pointed out by MPF are resolved by SEMACE, as well as that (ii) SEMACE will issue a renewal of the already granted licenses, or any new environmental license for the project in question, only when said failures and omissions are rectified. Proceeding nº Public civil lawsuits brought by the Federal Public Ministry (MPF), aiming to protect collective rights and interests related to the Anacé Indian community, seeking to avoid expropriation and resettlement of this ethnic group of its traditional land, that is, to protect the possible land rights of Anacé Indians. For that reason, it requested an injunction to cancel the environment licensing of projects developed in the area and the discontinuation of all works. Proceeding nº Public civil lawsuits brought by the Federal Public Ministry (MPF), aiming to protect collective rights and interests related to the Anacé Indian community, seeking to avoid expropriation and resettlement of this ethnic group of its traditional land, that is, to protect the possible land rights of Anacé Indians. For that, it requested an injunction to cancel environment licensing of projects developed in the area and discontinuation of all works Reclassifications of prior periods (a) Changes in practice It brought changes to the Company and accounting practices and, therefore, reclassifications were made for comparison purposes, to comply with changes in accounting practices, and in order to better present amounts previously disclosed. (i) CPC 33 (R1) Employee benefits - the Company recognized past service costs in accordance with the new wording of CPC 33 (R1), established by CVM Resolution no. 695/12, as a counter entry to Deferred income tax and social contribution and Accumulated Income, and (ii) CPC 19 (R2) in accordance with IFRS 11 and CPC 19 (R2) Jointly-owned enterprises were recognized as joint ventures. Initially, this adoption impacted the Company and involved the companies Porto do Pecém, Pecém TM and Pecém OM. (b) Reclassifications Nature of reclassifications is as follows: (i) net presentation of assets and liabilities from taxes on income as required by CPC 32, (ii) net presentation of tax assets and liabilities as required by the Conceptual Framework for Financial Reporting, and (iii) presentation of Construction Revenue and Expense, as required by CPC 17. Statement of financial position CPC 32 Tax on Income Net presentation of current taxes, as required by CPC 32, we reclassified current taxes and social contribution expenses that were recorded in Assets, at the amount of R$1,243, to present tax liabilities on a net basis. According to CPC 33 (R1) Employee benefits, costs of past services referring to equity in subsidiaries were recognized in accordance with the new wording of CPC 33 (R1), established by CVM Resolution no. 695/12, amounting to R$17,659 of Investment accounts as a counter entry to accumulated income (losses). Reclassifications for better classification we also reclassified PIS and COFINS amounting to R$399 and IRRF on capital amounting to R$19,563 to present tax liabilities on a net basis and reclassified from other accounts payable, amounting to R$11, to Post-Employment Benefits. 12

14 Notes to the interim accounting information 12/31/2012 ASSETS Current assets Published CPC 33 (R1) Employee benefits CPC 32 Income tax CPC 19 (R2) - Recognition as Joint Venture Adjusted balance Cash and cash equivalents 572, (1,003) ,375 Consumers and concessionaires 1,352, (99,757) ,252,551 Tax and social contribution 404, (93,819) (17,799) (127,154) 166,040 Related parties Inventory 109, (69,030) ,579 Pledges and restricted deposits 24, (649) ,207 Prepaid expenses (253) Other credits 222, (31,249) ,647 Non-current assets 2,718,661 - (93,819) (219,381) (127,154) 2,278,307 Tax and social contribution 63, (8,258) ,512 Deferred income tax and social contribution 749,871 9, (143,955) ,957 Related parties 69, , ,232 1,926,002 9,041 - (85,469) - 1,849,574 Investments 96, , ,682 Property, plant and equipment 6,259, (1,705,202) ,554,328 Intangible assets 3,424, (730) ,424,252 9,785, (1,093,791) - 8,691,389 Total assets 14,429,843 9,041 (93,819) (1,398,641) (127,154) 12,819,270 12/31/2012 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabiities Published CPC 33 (R1) Employee benefits CPC 32 Income tax CPC 19 (R2) - Recognition as Joint Venture Reclassifications Reclassifications Adjusted balance Suppliers 1,033, (121,262) ,180 Tax and social contribution 502, (93,819) (3,409) (127,154) 278,260 Loans, financing and debt charges 365, (95,970) ,236 Post-employment benefits 35, ,517 Estimated employee benefits and social charges 67, (2,649) ,011 Provisions 56, (2,895) ,548 Other accounts payable 141, (7,200) (11) 133,945 Non-current liabiities 3,066,115 8 (93,819) (233,385) (127,154) 2,611,765 Deferred tax and social contribution 387,391 (138) ,253 Loans, financing and debt charges 2,427, (1,096,312) ,331,142 Post-employment benefits 491,344 26, ,332 Provisions 182, (2,079) ,428 Other accounts payable 82, (66,865) ,562 5,013,525 26,850 - (1,165,256) - 3,875,119 Shareholders equity Retained earnings (losses) - (17,659) (17,659) 4,463,343 (17,659) ,445,684 Non-controlling interests 1,886,860 (158) ,886,702 Total shareholders' equity and non-controlling interests 6,350,203 (17,817) ,332,386 Total liabilities and shareholders' equity 14,429,843 9,041 (93,819) (1,398,641) (127,154) 12,819,270 13

15 Notes to the interim accounting information 4.2 Statement of income CPC 33 (R1) Employee benefits as a result of the recognition of past service costs, an equity effect occurred in the parent company s line item Equity in investees, amounting to R$910 and R$ 455, the impact in the quarter. Published CPC 17 - Construction revenue and cost CPC 33 (R1) Employee benefits CPC 19 (R2) - Recognition as Joint Venture Adjusted balance Revenue 1,524,011 (64,479) - (300) 1,101 1,460,333 Electricity services cost Cost of electricity Quarter of the prior period - 04/01/2012 to 06/30/2012 Electricity purchased for resale (754,754) (9,096) (763,850) Electricity network utilization charges (165,712) (165,614) (920,466) (8,998) (929,464) Cost of operation Other operating costs (8,272) (8,252) (164,587) (164,567) (1,085,053) (8,998) (1,094,031) Cost of services rendered to third-parties (85,674) 64, (21,195) Gross margin 353, (280) (7,897) 345,107 Operating income and expenses General and administrative expenses (79,463) ,847 (2) (76,925) Depreciation and amortization (16,064) (16,016) Other operating income and expenses (14,923) (14,785) (127,750) ,031 - (125,026) Service result 225, ,751 (7,897) 220,081 Equity in the earnings of subsidiaries (2,306) - (5) (14,944) 0.00 (17,255) Financial income 42, (4,460) 7,897 46,203 Financial expenses (123,354) , (104,815) Financial result (80,588) ,079 7,897 (58,612) Income (loss) before income tax 142, ,214 Income tax and social contribution - current (47,967) (47,967) Deferred income tax and social contribution (5,837) 0.00 (236) (886) 0.00 (6,959) (53,804) - (236) (886) - (54,926) Net result (loss) for the period 88, ,288 Published CPC 33 (R1) Employee benefits 01/01/2012 to 06/30/2012 CPC 19 (R2) - Recognition as Joint Venture Reclassifications Reclassifications Adjusted balance Revenue 2,963,467 - (315) 8,998 2,972,150 Electricity services cost Cost of electricity Electricity purchased for resale (1,397,713) - - (8,998) (1,406,711) (1,732,335) - - (8,998) (1,741,333) Cost of operation Other operating costs (15,365) (15,323) (346,787) (346,745) (2,079,122) - 42 (8,998) (2,088,078) Gross margin 796,308 - (273) - 796,035 Operating income and expenses General and administrative expenses (160,245) 1,386 3,718 (7) (155,148) Depreciation and amortization (32,078) (31,990) Other operating income and expenses (26,805) (26,674) (245,878) 1,386 3,930 - (240,562) Service result 550,430 1,386 3, ,473 Equity in the earnings of subsidiaries (4,144) (5) (21,421) - (25,570) Financial income 111,724 - (13,119) - 98,605 Financial expenses (229,409) - 32,370 - (197,039) Financial result (117,685) - 19,251 - (98,434) Income (loss) before income tax 428,601 1,381 1, ,469 Deferred income tax and social contribution (13,629) (472) (1,487) - (15,588) (147,970) (472) (1,487) - (149,929) Net result (loss) for the period 280, ,540 14

16 Notes to the interim accounting information Changes in practice CPC 33 (R1) Employee benefits as a result of recognition of past service costs, some General and Administrative Expenses were written off, with an effect on the Deferred income tax and social contribution. In accordance with IFRS 11 and CPC 19 (R2) Jointly-owned enterprises were recognized as joint ventures. Initially, this adoption affected the Company and involved the companies Porto do Pecém, Pecém TM e Pecém OM. 4.3 Statement of added value Reclassification of PIS and COFINS credits under caption Distribution of added value, from caption Federal Taxes, in the amount of R$389, to Municipal Taxes, in the amount of R$266, and to caption Rents, in the amount of R$123, to conform to CPC 09. CPC 33 (R1) Employee benefits as a result of the recognition of past service costs, an equity effect occurred in the parent company under Equity in investees, amounting to R$910. To comply with CPC 09, we reclassified Revenue relating to the construction of company assets allocated to Generation of added value, amounting to R$ 737, previously reported on a net basis under the following account headings: Input acquired from third parties, amounting to R$650, in Materials and R$ 84 referring to Federal Taxes, under Distribution of added value with a counter entry to Rental. Reclassification of the allowance for doubtful accounts and net losses allocated in Generation of added value, in the amount of R$3,593, and Other expenses, in the amount of R$6, previously presented under caption Sundry, allocated in Inputs acquired from third parties, in the amount of R$3, /01/2012 to 06/30/2012 Published CPC 33 (R1) Employee benefits Adaptation to CPC 09 CPC 19 (R2) - Recognition as Joint Venture Reclassifications Adjusted balance Generation of added value 4,541,105-75,395 (367) 19,163 4,635,296 Net operating income 4,463, (37,500) (367) 8,998 4,434,670 Allowance for doubtful accounts and net losses (26,209) (3,592) (29,801) Revenue related to the construction of company assets , ,253 Revenue from construction 83, , ,261 Other revenue 20, ,757 33,913 (-) Inputs acquired from third parties (2,061,975) - (285,190) 2,317 (4,371) (2,349,219) Costs of purchased energy (1,397,713) 0.00 (130,371) 0.00 (8,998) (1,537,082) Electricity network utilization charges (334,622) 0.00 (41,843) (376,465) Materials (12,588) 0.00 (46,511) (59,063) Third-party services (172,984) 0.00 (62,898) 1, (234,416) Other operating costs (60,449) 0.00 (3,567) 815 4,627 (58,574) Gross added value 2,479,130 - (209,795) 1,950 14,792 2,286,077 Retentions Depreciation and amortization (165,117) 0.00 (7,152) 88 (1) (172,182) Net added value produced 2,314,013 - (216,947) 2,038 14,791 2,113,895 Added value received as transfer Financial income 111, (13,165) ,559 Non-controlling interests (90,304) , Equity accounting result (4,144) (22,342) (25,570) Total added value payable 2,331, (216,947) (11,127) 82,753 2,186,884 Distribution of added value Personnel 134,649 (1,386) 3,305 (1,043) 1 135,526 Direct remuneration 91,138 (88) 3,305 (652) 32 93,735 Benefits 27,475 (1,298) 0.00 (327) (31) 25,819 FGTS 16, (64) ,972 Taxes, rates and contributions 1,770, (220,432) 1,209 1,103 1,553,146 Federal 985, (220,700) 1,238 1, ,343 State 781, (10) 7 781,035 Municipal 4, (19) ,768 Third-party capital remuneration 235, (32,715) 13, ,672 Interest 229, (32,358) 13, ,728 Rents 6, (357) ,944 Remuneration on own capital 13, ,838 99,156 Non-controlling interests ,303 90,303 2,154,280 (914) (216,947) (32,549) 100,630 2,004,500 Retained earnings 177,009 1, ,422 (17,877) 182,384 2,331, (216,947) (11,127) 82,753 2,186,884 CPC 33 (R1) Employee benefits as a result of the recognition of past service costs, an equity effect occurred in the parent company Equity in investees, reflected in the figures. To comply with CPC 09, we reclassified Revenue relating to construction of company assets allocated to Generation of added value, previously reported on a net basis under the following account headings: Inputs acquired from third parties, Reclassification of PIS and COFINS of the heading Inputs acquired from third parties for the Distribution of value added. In accordance with IFRS 11 and CPC 19 (R2) Jointly-owned enterprises were recognized as joint ventures. Initially, this adoption affected the Company and involved the companies Porto do Pecém, Pecém TM e Pecém OM. Construction revenue and expenses: In accordance with Technical Pronouncement CPC 17, Construction revenue and expenses previously recorded on a net basis within Operating Expenses were reclassified to Revenue from construction (Note 23) and Infrastructure construction costs (Note 24). Reclassifications for better classification The group presented above as Reclassifications is comprised of Capitalized interest, ANEEL Official Letter for 2012 closing Contract fine should be accounted for as operating income and Reclassifications between accounts. 15

17 Notes to the interim accounting information 4.4 Statement of cash flow CPC 33 (R1) Employee benefits as a result of the recognition of past service costs, an equity effect occurred in the parent company s line item Equity in investees, amounting to R$910. CPC 32 Taxes on Earnings current taxes and social contributions were offset. Net presentation of Current Taxes resulted in moving R$31,403 between operating assets and liabilities. Reclassification of loan contracts interest and monetary restatements, in the amount of R$3,866, to caption Adjustment to present value in operating activities. Cash flow from operating activities Published CPC 33 (R1) Employee benefits Reclassificati ons - Monetary restatement 01/01/2012 to 06/30/2012 CPC 19 (R2) - Recognition as Joint Venture CPC 32 Income tax Reclassificati ons for a better classifica tion Adjusted balance Income before income and social contribution taxes 428,601 2, ,469 Depreciation and amortization 165, (88) ,029 Net book value of assets and intangible assets written off 16, (17) ,594 Interest and monetary restatements of loan agreements (21) Prepaid expenses 1, (1,498) 0.00 Debt charges and monetary variations on loans, financing and debentures 137, (32,367) , ,286 Provision for post-employment benefit plan 15,693 (1,386) ,307 Income from equity interests 4,144 (915) (1) 22, ,570 Revenue from Exceeding of Demand and Reactive Energy Surplus ,852 3,852 Regulatory and industry charges - Provision and monetary restatement Pledges and restricted deposits linked to lawsuits - price-level restatement Income and social contribution taxes - monetary restatement 15, , ,149 (2,910) 0.00 (2,052) (4,962) 5, (446) (305) 4,343 Other (325) (1,238) (1,353) (Increase) decrease in operating assets 861, ,796 (9,374) , ,102 Consumers and concessionaires (73,419) (73,418) Income and social contribution taxes to offset 32, (16) 3,282 (59,564) 4,083 (19,226) Inventory (32,500) , (7,135) Pledges and restricted deposits 16, ,052 (8,165) 0.00 (10) 10,774 Prepaid expenses ,223 Income receivable (1,325) (1,325) Accounts receivable (33) 0.00 Other operating assets (20,572) , (1) (18,514) (76,382) ,036 23,518 (59,564) 2,771 (107,621) Increase (decrease) in operating liabilities Suppliers 20, (12,560) ,905 9,462 Other tax and social contribution (111,196) ,564 10,328 (41,043) Estimated employee benefits and social charges (14,941) (16) (14,956) Regulatory and industry charges (13,228) 0.00 (10,274) (1) (23,503) Provisions (28,515) , (144) (25,235) Other operating liabilities (36,290) , (23,479) Cash (invested in) received from operating activities (201,676) 0.00 (10,039) 3,684 59,564 12,090 (136,377) 583, (207) 17, , ,104 Income and social contribution taxes paid (96,585) (3,778) (100,363) Net cash (invested in) received from operational activities 486, (207) 17, , ,741 Cash flow from investment activities Capital increase in subsidiaries (6,347) (86,843) (93,190) Additions to Property, plant and equipment and intangible (333,268) , (191,143) Related parties (195) Net cash (invested in) from investing activities (339,192) - (195) 142,234 - (86,757) (283,910) Net cash from financing activities Related parties (579) (176) Pledges and restricted deposits Capital increase (decrease) (1) (86,842) , Funding from Loans, financing and debentures 351, (30,000) ,482 Repayment of Principal on loans, financing, debentures (309,822) , ,495 (280,526) Debt charges, net of derivatives (69,518) (22,495) (92,013) Contingent consideration (96,008) (3,852) (99,860) Use of public property (895) (9,013) (9,908) Net cash (invested in) from financing activities (344,166) (110,041) ,469 (380,336) Net decrease (increase) in cash and cash equivalents (196,526) , (146,505) Cash and cash equivalents at the end of the period 699, (11,849) ,493 Cash and cash equivalents at the beginning of the period 895, (61,870) ,998 (196,526) , (146,505) 16

18 Notes to the interim accounting information 5 Significant events in the first half 5.1 According to CPC 33 (R1) Employee benefits, after due entries were made in Liabilities as a result of CPC 33 (R1), there was a reflex in Cash flow from operating activities, reducing the balance of Provision for post-employment benefit plan. On the other hand, Profit before income tax and social contribution increased. PIS and COFINS credits were reclassified on the net book value of assets and intangible assets written off, in order to allow taxes and social contribution to offset the operating liabilities. In accordance with IFRS 11 and CPC 19 (R2) Jointly-owned enterprises were recognized as joint ventures. Initially, this adoption impacted the Company and involved the companies Porto do Pecém, Pecém TM e Pecém OM. These transactions caused an impact, which is visible in all cash flow groups. Reclassifications made for the purpose of presenting current taxes on a net basis had the effect of reducing operating assets in the account Recoverable tax and social contribution, and increasing operating liabilities in the account Other tax and social contribution and Income tax and social contribution paid. Start of Commercial Operation of the Second generating unit of Pecém I On March 27, 2012, the Brazilian Power Regulatory Agency (ANEEL) approved an amendment to the schedule for the implementation of the thermal power plant Energia Pecém (Energia Pecém or the Development), as well as the supply start date provided for in the Power Trading Agreements in the Regulated Market (CCEAR). By unanimous agreements, the entrance into operation of the two generating units of the Pecém I Thermal Power Plant was postponed to July 23, However, the joint venture Porto do Pecém will not be able to make the two generating units available for business operations, which will oblige it to fulfill its power reserve replacement obligations set forth in the Power Trading Agreements in the Regulated Market (CCEAR) through the acquisition of third parties' electrical power contracts. On July 12, 2012, the joint venture Porto do Pecém Geração de Energia filed a request to ANEEL requesting the benefit of Article 3 of Regulatory Resolution No. 165/05 and the approval of the monthly payment of the lower amount of: (i) the electrical power purchase agreement entered into by the plant to guarantee its sales in the Regulated Trading Environment, and (ii) the power price in the original sales agreement, for Power Trading Agreements in the Regulated Environment (CCEARs) according to availability, such as the cost the consumer would have if the plant were operating. On March 5, 2013, ANEEL, through Decision no. 643, determined that, while Regulatory Resolution no. 165/05 is effective, the lowest value of (i) power value of the contract for ballast recomposition and (ii) the Cost- Benefit Effectiveness Index (ICB) of UTE Pecém I, adjusted pursuant to the terms of Decision no /09-SEM/SRG, must be considered. On November 30, 2012, ANEEL by means of Ruling n 3811 relea sed the 01 generator unit, with 360,137 kw installed capacity, of the Porto do Pecém I thermo electrical plant, to begin commercial operation starting on December 1, 2012, when the energy produced by the generator unit is expected to be available in the National Interconnected System, or S.I.N. (Sistema Interligado Nacional). On May 10, 2013, Porto do Pecém I Thermoelectric Plant received ANEEL s authorization to start the commercial operation of the second generating unit, with installed capacity of 360,137 MW, which started to provide power to the National Interconnected System (SIN) on February 20, 2013 for a test period, being remunerated at the Difference Settlement Price (PLD) for power effectively generated in this period until the Declaration of Commercial Operation (DCO). On May 13, 2013, ANEEL issued Official Letter no. 240/2013-SFG/ANEEL, which established that CCEE should consider the amount of power it is able to provide to the proportional system at 240 MW as the plant s physical guarantee. Accordingly, the Company had to adjust the backing amount that is equivalent to the difference. On May 31, 2013, ANEEL issued Official Letter no. 272/2013-SFG/ANEEL, which established that CCEE should consider the amount of power it is able to provide to the proportional system at 270 MW, beginning as of May 22, 2013, as the plant s physical guarantee. Accordingly, the Company had to adjust the backing amount that is equivalent to the difference. On June 21, 2013, ANEEL issued Official Letter no. 310/2013-SFG/ANEEL, which established that CCEE should consider the amount of power it is able to provide to the proportional system at 330 MW, beginning as of June 12, 2013, as the plant s physical guarantee. Accordingly, the Company had to adjust the backing amount that is equivalent to the difference. On July 4, 2013, ANEEL issued Official Letter no. 335/2013-SFG/ANEEL, which established that CCEE should consider the amount of power it is able to provide to the proportional system at 360 MW, beginning as of June 29, 2013, as the plant s physical guarantee. Accordingly, since June 29, 2013, the Company does not need to adjust the backing amount. 5.2 Return of the indirect subsidiary Couto Magalhães In 2011, 9 years after the granting of the Concession Agreement no. 021/2002, through Official Letter no. 892/2011, IBAMA was informed of the final rejection of the Environment License request. As it is thus impossible to implement the UHE Couto Magalhães economic project, on March 20, 2012, the Company filed a request with MME and ANEEL, in accordance with Administrative Proceeding no / , in progress, claiming: (i) friendly rescission of the Concession Agreement; (ii) return of the guarantee of compliance with obligations of the Concession Agreement, provided for in sub-clause 7a; (iii) resulting lack of collection of UBP amount; and (iv) reimbursement of costs incurred by Plaintiffs for the development of environmental studies. Expenditures already incurred on studies and project will be timely presented for proper refund and, for this reason, assets are still recorded. The amount recorded on June 30, 2013 at Enercouto is R$3,306, of which R$3,211 refers to property, plant and equipment and R$95 to intangible assets. 17

19 Notes to the interim accounting information 5.3 Regulations of the Power Industry The year 2012 was marked by significant changes to the legal and regulatory framework applied to the electric power industry. Highlights are: (i) Law no. 12,767, of December 27, 2012, that governs the extinction of electric power utility concessions and the temporary provision of service under intervention for adequacy of the electric power utility, and (ii) Provisional Act no. 579, of September 11, 2012, which governs generation, transmission and distribution concessions, on reduction of sector charges and on tariff reasonableness. With these introduced measures, federal government sought to discipline conditions for intervention in concessions considered to have unwise management, solve the issue of concessions expiring in the period, and guarantee the reduction of electric power bills to end consumers beginning as of January The average reduction foreseen for all of Brazil was 20.2%, resulting from two areas: Renewal of concessions overdue (13%) and Decrease in Industry charges (7%). Provisional Act no. 579, enacted into Law no. 12,783 on January 11, 2013, established that generation and transmission concessionaires who bid before February 13, 1995 (Article 19 of Law no. 9,074/1995) and whose contracts are expiring from 2015 to 2017, could extend their concessions in advance, provided that they provide full power physical guarantees to the quota regime to be distributed proportionately to each distributor s market. Transmission concessionaires would have their tariff calculated only to cover operating, maintenance, charge and tax costs, as assets related to service provision were already fully amortized. As regards Sector Charges, contributions to the Fuel Consumption Account (CCC) and to the General Handover Reserve (RGR) were no longer charged from consumers, while the contribution to the Energy Development Account (CDE) was reduced, beginning as of January 2013, to 25% of its original value. All eligible Transmission companies adhered to conditions established for advanced concession renewal; however, Generation companies did not do the same, preventing the use of a significant portion of involved energy for the quota system. Accordingly, sources of funds that would permit reaching the goal of reducing electric power bills had to be reviewed. With enactment of Provisional Act no. 605 on January 23, 2013, which increases the usage scope of CDE (Energy Development Account) funds and provides funds to offset discounts applied to tariffs and offset the effect of not adhering to the expansion of electric power generation concessions, through Decree no. 7,891, discounts to the following tariffs: social low income, rural activity, water and sewage treatment, sanitation, and irrigation are no longer funded by other consumers tariffs, permitting the promised reduction. Monthly, Aneel will homologate CDE funds amount to be transferred by Centrais Elétricas Brasileiras S. A. - Eletrobrás to each distributor in order to cover above-mentioned discounts. To define monthly amounts to be transferred during 2013, Aneel used the market considered in the last tariff proceeding and the difference between tariffs with and without discount. Beginning as of 2014, Aneel will define a methodology for the transfer of funds, considering differences between estimated and realized amounts. On January 24, 2013, through Approving Decisions no. 1,415 for EDP Bandeirante and no. 1,442 for EDP Escelsa, ANEEL approved the Extraordinary Tariff Review (RTE) specifically for the adjustment of power costs, transmission costs and industry charges. Once costs not manageable by the company are reduced, supply tariffs were reduced without impact on distributors margin. These effects will be felt by consumers at the end of January The main changes that allowed the reduction of the account were: i) Reduction of power purchase costs deriving from the allocation of power quotas of generating plants with renewed concessions; ii) Reduction in energy transmission; iii) Reduction in industry charges, and iv) Removal of cross subsidies from the tariff structure. According to a decision of the Electric Sector Monitoring Board (CMSE) resulting from unfavorable hydrologic conditions in 2012 and the first months of 2013, the National System Operator (ONS) started to use the available thermic power generation capacity to maintain hydroelectric plants' reservoirs levels. As it refers to a more expensive source for which there is no tariff coverage, distribution concessionaires started to accrue a balance in the Recoverable Portion A Power Cost Adjustments (CVA) Account to transfer it in subsequent tariff proceedings. Due to its magnitude, this transfer would annul the discount promoted by the Federal Government. On March 7, 2013, with views on finding a solution for that threat, an amendment was made to Decree No whose article 4-A, paragraph 4, ordered the Brazilian Electricity Regulatory Agency (ANEEL) to approve the Energy Development Account (CDE) amounts to be passed on by Eletrobrás to cover (i) monthly, the distribution concessionaires exposure in the spot market arising from the placement of quotas of physical guarantee of power and capacity and from the non-adhesion to the extension of electric power generation concessions; and (ii) in tariff processes conducted in the twelve months subsequent to March 8, 2013, the full or partial amount of the positive result of the Compensation Account for Variations in Portion A Items (CVA), arising from the electric power acquisition cost and dispatch expenses in thermoelectrical power plants for energy security purposes. On April 2, 2013, Technical Note No. 83/13 was issued by ANEEL s Economic Regulation Superintendency (SRE), presenting the calculation of the amounts for Eletrobrás to transfer to the Electric Power Trading Chamber (CCEE), using the Energy Development Account (CDE) as a source of funds. The proposed calculation included this transfer to cover the following CCEE accounting costs: i. exposure to hydrological risk on contracts for physical guarantee share; ii. charges for current system services related to operations of plants based on merit by a decision of the CMSE (electrical sector monitoring committee), iii. involuntary exposure related to the fact that some hydroelectric plants have not joined the sharing system, together with the fact that an auction to re-contract reposition amount for 2013 was not held. After conducting the Public Hearing, ANEEL published, on May 7, 2013, its Regulatory Resolution No. 549, regulating the transfer of Energy Development Account (CDE) funds to distribution companies as established in Decree No and added its joint approval to the agency s acts issued until that date. In its article 2, Regulatory Resolution No. 549 specifically dealt with the form of transferring positive balances of energy purchases and System Service Charges, which is the purpose of the Compensation Account for Variations of Portion A Items (CVA), referred to in the Administrative Rule No. 25 of January 24, 2002 issued jointly by the Ministry of Mines and Energy and the Ministry of Finance. The regulation established that ANEEL will publish, in each ordinary tariff review to be conducted until March 7, 2014, the amount of the funds of the Energy Development Account (CDE) to be transferred by Eletrobrás to distribution concessionaires to cover those costs. 18

20 Notes to the interim accounting information That transfer will be due in the cases meeting at least one of the following criteria: I the average tariff effect in the distribution company s tariff review exceeds three percent in the tariff revision and eight percent in the tariff adjustment; II the balance of CVA energy purchase and System Service Charges (ESS) exceeds two percent of the distribution company s economic revenue established in the tariff process. The transfer can be partial if the positive balances of energy purchase CVA and of System Service Charges are greater than the amount required to reach the limits established in items I and II. The amount will be calculated taking into account the balances of energy purchase CVA and System Service Charges recorded until the 5th business day prior to the adjustment or tariff revision, and the transfer of funds from the Energy Development Account (CDE) to the distribution company will be made in a single installment, until the 10th business day counting from the publication of the Approval Resolution of the respective tariff process. EDP Bandeirante s tariff adjustment will take place only on October 23, 2013, since not all of the involved variables have been recognized, and therefore Management s judgment is that it does not have sufficient basis to recognize, in this quarter, an estimate of the Energy Development Account (CDE) refund amount. EDP Escelsa recorded, in the quarter, the estimated refund using Energy Development Account (CDE) funds referring to energy purchase and System Service Charges, amounting to R$33,443. The assumptions used in the calculation took into account the data made available for the tariff process Capital reduction - Lajeado Energia On May 3, 2013, the Extraordinary General Meeting approved the reduction of the capital stock of subsidiary Lajeado Energia, since its capital was considered excessive in relation to the subsidiary s purpose, under the Corporate Law articles 173 and 174, by returning to shareholders, in national currency, based on each shareholder s ownership interest, and the reduction amounted to R$450,000. The capital reduction was to take effect upon ANEEL s approval, which was obtained through Dispatch No of the Economic and Financial Inspection Superintendency (SFF). CNPE Resolution 03/2013 CNPE Resolution No. 03/2013 established guidelines for including risk avoidance mechanisms in computer programs for energy studies and pricing, and changed the procedures used in the calculation and apportionment of the System Service Charges due to energy security (ESS SE) referred to in article 59 of Decree No of July 30, 2004, beginning in March On June 7, 2013, the Regional Federal Court confirmed the injunction that released entities associated with APINE, ABRAGEEL and ABRACEEL from the burdens related to the apportionment of costs of additional dispatches of energy resources from thermo-electrical power plants. For all other market agents, articles 2 and 3 of CNPE Resolution No. 03/2013 remained in effect. The amount under discussion is R$10,304. On July 16, 2013, the Federal Supreme Court rejected União s request for Injunction Suspension and upheld the injunction that released entities associated to APINE, ABRAGEEL and ABRACEEL from the burdens related to the apportionment of costs of additional dispatches of energy resources from thermo-electrical power plants established by Resolution CNPE 03/ Cash and cash equivalents 12/31/ /31/2012 Cash and banks 22,560 62, , ,112 Interest earning bank deposits - fixed income 117,500 37, , ,263 Total 140,060 99,054 1,175, ,375 Highly liquid short-term financial investments are promptly convertible into a known sum of cash and are subject to an insignificant risk of change of value. The Company and its subsidiaries are entitled to request advance redemption of said securities, without penalties or loss of profitability. The s financial investments refer substantially to bank deposit certificates and debentures, remunerated at rates that range between 75.0% and 101.0% of the Interbank Deposit Certificate (CDI) rate. The average rate of the Grupo EDP s application ranges from 75.0% to 101.0%. The calculation of the fair value of financial investments, when applicable, is based on the market quotations for the instrument, or market information that permits this calculation, taking into consideration the projected future rates of similar instruments. The Group's exposure to interest rate risks and a sensitivity analysis of financial assets and liabilities are disclosed in note

21 Notes to the interim accounting information 7 Consumers and concessionaires Overdue Overdue Allowance for Net Net Balances up to for more than doubtful balance on balance on Note Due 90 days 90 days Total accounts 12/31/2012 Current Consumers Billed supply Residential 97, ,154 23, ,391 (23,614) 199, ,539 Industrial 28,481 31,703 45, ,944 (23,227) 82,717 97,545 Commerce, services and other 48,073 30,257 18,510 96,840 (12,287) 84, ,713 Rural 12,846 8,144 4,003 24,993 (335) 24,658 25,236 Government Federal 4, ,957 (35) 4,922 5,595 State 5, ,275 (365) 5,910 7,684 Municipal 9,184 4,312 2,487 15,983 (254) 15,729 21,045 Public lighting 11,639 3,971 2,406 18,016 (236) 17,780 22,272 Public service 10,989 4,365 9,765 25,119 (365) 24,754 14,472 Free customers 74, ,887 (522) 75,365 44,581 Unbilled supply 228, , , ,660 Debt paid in installments 50,940 10,467 51, ,987 (73,571) 39,416 54,958 (+) Adjustment to present value (1,306) (1,306) 0.00 (1,306) (1,458) Other credits 28, , ,062 30, , , , ,376 (134,811) 831, ,083 Concessionaires Electricity supply , , , ,215 Short-term energy , , ,781 75,980 Electricity network utilization charges 4, , ,334 5,885 Other 16, , ,796 14, , , , ,468 Total current 946, , ,256 1,303,931 (134,811) 1,169,120 1,252,551 Non-current Industrial 4, ,960 (3,209) 1,751 1,751 Commerce, services and other (18) Debt paid in installments 60, ,685 (2,318) 58,367 46,921 (-) Adjustment to present value 7.3 (14,684) (14,684) 0.00 (14,684) (13,507) 50, ,979 (5,545) 45,434 35,165 Concessionaires Short-term energy 4, ,968 (4,968) Other 5, ,248 (119) 5,129 5,129 10, ,216 (5,087) 5,129 5,129 Total non-current 61, ,195 (10,632) 50,563 40, Concessionaires Electricity supply Out of the amount shown in the heading Electricity supply we emphasize: (i) EDP Comercializadora carried out sales transactions for the supply of electrical power with jointly-owned Enterprise Porto do Pecém on June 30, 2013, the amount of R$113,629 results from these transactions, (ii) CDE Reimbursement: Presidential Decree no. 7945/13 determines that a portion of the costs associated with the purchase of electrical power from distributors be paid through the Power Development Account (CDE), including insufficient sharing, hydrologic risk and changes in power security. In EDP Bandeirante, the amount to be received as reimbursement of these costs is R$ 22,362 and in EDP, R$27,419, (iii) Short-term transactions (CCEE): During the quarter, EDP Comercializadora conducted electrical power purchase and sale transactions in the ambit of CCEE, resulting amounting to R$ 14, Short-term energy Out of this heading s balance of R$63,781 the amount of R$42,800 belongs to subsidiaries EDP Bandeirante and EDP Escelsa representing energy sales in the ambit of the CCEE. 7.3 Adjustment to present value 7.4 The adjustment to present value, in line with CPC 12, was calculated based on the average remuneration of the investment rate, applied by ANEEL in the tariff reviews of the distributors. This rate is compatible with the nature, term and risks of similar transactions at market conditions. On June 30, 2013, this corresponded to 15.07% per annum of EDP Escelsa and per annum of EDP Bandeirante (15.07% per annum on June 30, 2012), having a negative impact in the distributors in the period of R$ 1,024 (R$ 4,819 negatively on June 30, 2012). Provision for allowance for doubtful accounts The distributors of the subsidiaries Bandeirante and Escelsa, based on Accounting Instruction of the Electricity Sector Accounting Manual, established a provision for doubtful accounts: i) Residential: overdue for more than 90 days; ii) Commercial: overdue for more than 180 days, and iii) Other classes: overdue for more than 360 days. In December 2012, the Distributors carried out a revision of the criteria for calculating the Provision for Doubtful accounts of the debit installments, and started to adopt the following criteria: i) Low voltage costumers: installment past due for over 90 days, a provision is made at the full balance of the installments; ii) Medium and high voltage customers: installment past due for over 60 days, a provision is made at the full balance of the installments; and iii) Government: installment past due for over 60 days, a provision is made at the full balance of the installments, deducting the amounts covered through submission of the funds citation. The Company's exposure to credit risks is disclosed in Note

22 Notes to the interim accounting information 8 Tax and social contribution Assets - to offset Balance on 12/31/2012 Addition Price-level restatement Federal tax offsetting Transfer Balance on Income and social contribution taxes 84,004-2,517 (36,954) - 18,713 68,280 PIS and COFINS Withholding tax on financial investments , ,185 Income tax withheld in interest on equity (1,201) 1,201 - Other (29) 59 Total 84,084 1,377 2,517 (36,954) - 20,072 71,096 Current 84,084 71,096 Total 84,084 71,096 Assets - to offset Income and social contribution taxes ICMS PIS and COFINS PIS AND COFINS - COSIT Withholding tax on financial investments Income tax withheld in interest on equity ISS Other Total Current Non-current Total Balance on 12/31/2012 Addition Price-level restatement Advances / Payments Federal tax offsetting Reclassification Reclassification Transfer Balance on 109, ,594 74,081 (65,985) 2,222 (29,389) 94,354 52,778 16, (10) - (8,912) 60,823 24, , (4) - (255,144) 46,797 2, (366) ,112 6,793 2, ,768 (6,420) 4, (1,201) 1, (1,484) ,324 1,356 - (1) (6,297) (2,852) (2,627) 14, , ,194 3,598 74,639 (74,146) (55) (300,930) 223, , ,608 55,512 67, , ,852 Payable - Liabilities Balance on 12/31/2012 Addition Price-level restatement Payments Tax offsetting Transfer Balance on Income and social contribution taxes (335) PIS and COFINS 18, (18,955) ISS (62) PIS, COFINS and Social Contribution - Onservices rendered by third-parties (820) Income tax withheld at source on third party services (504) Income tax withheld in interest on equity - (1,899) - - (17,664) 19,563 - Tax installment payment - Law 11941/09 42,836 1,103 - (1,837) ,102 REFIS - conversion to income 4, ,750 Other 906 5,860 - (5,656) - - 1,110 Total 67,297 6, (8,879) (36,954) 20,072 48,134 Current 23,418 4,998 Non-current 43,879 43,136 Total 67,297 48,134 Payable - Liabilities Balance on 12/31/2012 Addition Price-level restatement Payments Tax offsetting Reclassification Transfer Balance on Income and social contribution taxes 38, ,772 - (44,820) (335) - (69,886) 83,657 ICMS on rate differential 551 5,225 - (5,196) ICMS 107, ,914 - (789,660) (10) - (8,912) 119,365 PIS and COFINS 47, ,855 - (198,142) (35,159) - (254,562) 31,960 ISS 1,551 7,586 - (7,264) (1,484) PIS, COFINS and Social Contribution - Onservices rendered by third-parties ,048 - (10,320) - 1,186-1,360 Income tax withheld at source on third party services 421 3,133 - (3,355) ,056 Income tax withheld in interest on equity 37,406 (2,230) - (36,745) (30,861) - 32,430 - Tax installment payment - Law 11941/09 102,702 1,103 1,444 (17,712) ,537 REFIS - conversion to income 41, ,890 Other 11,138 50,606 - (44,511) (6,297) (2,247) - 8,689 Total 390,115 1,518,012 2,361 (1,157,725) (74,146) - (300,930) 377,687 Current 278, ,126 Non-current 111,855 97,561 Total 390, ,687 21

23 Notes to the interim accounting information 8.1 Income and social contribution taxes - The recorded amounts refer mostly to tax withholdings at source and respective restatements based on the Selic (Central Bank) rate, for prior periods. That balance is mostly offset with withholding income tax on declared interest on capital. 8.2 PIS and COFINS As a result of the terms of Article 32 of Provisional Measure 66/02, converted into Law 10637/02 and of Normative Instruction 199/02, the electrical distributor EDP Escelsa and EDP Comercializadora, as an agent member of the Power Trading Chamber (CCEE), exercised the option for the special taxation regime of PIS and COFINS on income earned in operations carried out within the sphere of that Institution. The main effects refer to the calculation basis levied on the net positive results and on the continuity of the application of the rate of 0.65% and 3% for PIS and COFINS, respectively. 8.3 ICMS - Assets to offset The subsidiaries EDP Bandeirante and EDP Escelsa had a balance of R$60,707, which includes (i) ICMS (Value Added Tax on Sales and Services) credits arising from the acquisition of assets amounting to R$ 49,394, which, pursuant to paragraph 5 of section 20 of Supplementary Law 87/96 are offset at the rate of 1/48 per month, and (ii) R$ 6,707 referring to the purchase of ICMS credits from third parties to be offset against ICMS due on power sales. This transaction is allowed by the State of São Paulo ICMS Regulation, Decree 54249/09, in article 84 item II. The balance payable to the credit provider in the amount of R$ 428 on June 30, 2013 (R$ 22,042 on December 31, 2012) is shown in Note 11. ICMS - Liabilities payable Subsidiaries EDP Bandeirante and EDP Escelsa presented a balance of R$112,326, referring to state VAT on distribution companies electricity invoices. As foreseen in article 146 of São Paulo State VAT Regulation. 8.4 Tax installment payment - Law 11941/09, REFIS - conversion to income and PAEX In 2009, the Company formally joined the program for the reduction and installment payment of taxes according to Law 11,941/09 of the Federal Revenue Service - "REFIS IV". As of June 30, 2011, the Company, as well as its subsidiaries EDP Bandeirante, EDP Escelsa, Energest and EDP Comercializadora realized the consolidation of the debts included in the installment plan. Out of the consolidated total amount of the debt of R$46,852 as of June 30, 2013, R$42,102 was split into 180 installments, of which 136 installments of R$ 310 remain to be paid, to be restated monthly by the SELIC rate, and for the remaining amount of R$ 4,750 there are judicial deposits in the same amount, which expect appropriation by the Federal government (in accordance with Article 32 of PGFN/RFB administrative ruling No. 06/09), and when that is done this liability will be written off. Out of the consolidated total amount of the debt of R$130,427 as of June 30, 2013, R$ 87,537 was split into installments and will be restated monthly by the SELIC rate and for the remaining R$42,890 there are judicial deposits amounting to R$80,536, which await appropriation by the Federal Government (in accordance with Article 32 of PGFN/RFB administrative ruling No. 06/09), and when that is done, this liability will be written off. Tax installment payment - PAEX In September 2006, subsidiary Lajeado joined the Exceptional Installment Payment (PAEX) program established by Provisional Act 303, of June 29, 2006, which addresses the payment in installments of legal entities' debts with the Federal Revenue Service (SRF), the National Treasury Attorney General (PGFN) and the National Institute of Social Security (INSS), in 130 monthly and successive installments (SRF/PGFN), adjusted for inflation at the long-term interest rate (TJLP) for debts maturing until February 28, 2003, and in 120 monthly and successive installments (IRPJ, CSLL, COFINS, PIS, CPMF, INSS and fine), adjusted for inflation at the SELIC rate for debts maturing from March 1, 2003 to December 31, 2005, recognized or not, enrolled or not in the Government or INSS Debt Register, even if they are challenged in a lawsuit proposed by the taxpayer or during the tax foreclosure stage, or under a previous installment plan, not fully paid, even if canceled for nonpayment. The consolidated debt to be paid in 130 monthly installments, in accordance with the provisions of Article 1 of Provisional Act 303/06 is being paid since September The debt balance bears monthly interest equivalent to TJLP variation. In 2009, PAEX formally joined the program for the reduction and installment payment of taxes according to Law 11,941/09 of the Federal Revenue Service - "REFIS IV". As at June 30, 2011, the Company consolidated the debts included in the installment plan. 9 Deferred income tax and social contribution 9.1 Non-current liabilities 12/31/2012 Description of credits IRPJ CSLL Total Total Temporary differences MTM Rede shares ,908 Total temporary differences ,908 Income from deferred income tax and social contribution ,908 The change in the deferred Income Tax and Social Contribution assets and liabilities for the period was recorded as an offset to the credit in Shareholders' Equity amounting to R$1,

24 Notes to the interim accounting information 9.2 The tax credits detailed below, calculated on tax losses carried forward, the negative social contribution basis and other amounts constituting temporary differences used for reducing the future tax burden, were recognized based on historical taxable profits and on budgets for generating taxable profits for the next periods at the subsidiaries Energest, Lajeado, Porto do Pecém, Enerpeixe, EDP Bandeirante, EDP Escelsa, EDP Comercializadora within a maximum period of 10 years. Non-current assets Non-current liabilities Result 12/31/ /31/ Description of credits IRPJ CSLL Total Total IRPJ CSLL Total Total IRPJ/CSLL IRPJ/CSLL Tax losses 60, ,839 69, (8,336) (4,225) Negative social contribution basis ,488 25,488 28, (3,001) (1,523) Temporary differences Provision for allowance for doubtful accounts 60,839 25,488 86,327 97, (11,337) (5,748) 34,277 12,339 46,616 38,819 (26) (9) (35) (12) 7,820 3,929 Post-employment benefits 21,519 7,747 29,266 25,120 (270) (96) (366) (332) 4,182 1,649 Provision for tax, civil and labor risks 59,584 21,453 81,037 72,722 (1,203) (433) (1,636) (855) 9,096 (3,896) Provision for swap results (4,594) (1,654) (6,248) (3,732) (2,516) (2,657) Provision for inventory losses , (869) (40) MTM Rede shares , Provision for losses with disposal of assets and rights (7,081) (2,548) (9,629) (9,629) 0.00 Total temporary differences 104,299 37, , ,606 (1,499) (538) (2,037) 709 8,084 (1,015) Post-employment benefits - PSAP 10,521 3,787 14,308 14, (217) (2,307) Goodwill incorporated 152,876 55, , , (8,149) (8,295) Temporary differences - RTT Consumers - adjustment to present value 3,998 1,439 5,437 4, ,639 Pre-operating expenses 2, , ,338 (144) Financial charges - Recouponing (918) Loans and financing in foreign currency (94) (830) MTM - Construction in service - Intangible assets ,407 1,587 5,994 9,277 3, Goodwill - CPC 15 (R1) , , , , (1,176) Goodwill amortization/depreciation - CPC 15 (R1) (27,693) (9,970) (37,663) (34,952) 2,711 3,067 Environmental licenses - CPC 25 (180) (66) (246) (294) 1, , (1,609) (1,229) Use of public property - CPC 25 26,846 9,665 36,511 34,629 (7,754) (2,791) (10,545) (10,387) 2,040 1,991 Fair value of indemnifiable financial assets - (28,754) (10,351) (39,105) (34,829) (4,276) 0.00 ICPC 01 (R1) - Financial instruments - CPC 39 1, ,402 2,182 15,226 5,481 20,707 24,429 3, Employee benefits - CPC 33 (R1) 109,737 39, , , (471) Loan costs - CPC 20 (R1) (645) Total temporary differences - RTT 115,893 41, , , , , , ,544 10,001 1,777 Total deferred assets / liabilities 444, , , , ,683 99, , ,253 Income from deferred income tax and social contribution (1,618) (15,588) The change in the deferred Income and Social Contribution tax assets and liabilities consolidated for the year was recorded as an offset to the credit for the year amounting to R$ 1,618 to the credit in Shareholders' Equity amounting to R$5, The taxable credit arising from the Provision for the Pension Plan Deficit (PSAP) The taxable credit arising from the Provision for the Pension Plan Deficit - PSAP of Bandeirante refers to the portion of liabilities related to the benefits exceeding he assets of the Defined benefit pension plans within the Bandeirante subsidiary, the provision for which was effected on December 31, 2001 with a counter entry in Shareholders Equity, deductible on the occasion of the monthly payments, expected to be terminated in

25 Notes to the interim accounting information The goodwill fiscal credit derives from: The amounts were accounted for in accordance with CVM Instructions 319/99 and 349/99, and in accordance with ANEEL s instructions, and used according to the curve between the expectations of future results and the terms of the companies concession. This translates into a future average annual tax credit realization of R$6,003 for the subsidiary Bandeirante up to 2027, R$1,955 for the subsidiary Escelsa up to 2025, and R$ 5,030 for the subsidiary Lajeado up to The tax credits arising from the Provision for the payment of preferred shares In December 2012, the subsidiary Investco reassessed the calculation of deferred income tax and social contribution on gains from the adoption of the CPCs associated with the classification of preferred shares (Class PNA, PNB, and PNC) as financial instruments, in accordance with CPC 39, in such a way as to adapt to the expectations of future realization Tax losses a) the incorporation of the spin off portion of the former parent company Enerpaulo - Energia Paulista Ltda. within the subsidiary EDP Bandeirante during 2002, represented by the goodwill paid by Enerpaulo on the acquisition of shares issued by EDP Bandeirante; b) from the merger that occurred in April 2005 of the spin off portion of the Energias do Brasil with the subsidiary EDP Escelsa, represented by the goodwill paid by the merged companies EDP 2000 Participações Ltda. and EDP Investimentos Ltda. on the acquisition of shares issued by IVEN, which was the parent company of EDP Escelsa at the time, and c) the incorporation of the subsidiaries EDP Lajeado and Tocantins within the subsidiary Lajeado, represented by the goodwill paid by the Company. Under the tax legislation in force, the tax loss and the negative basis of social contribution can be offset with future income, up to the limit of 30% of the taxable income, and are not subject to a statutory limitation period. Projection of future taxable income The forecast future taxable income indicates that the subsidiaries EDP Bandeirante, EDP Escelsa and Lajeado have a calculation basis sufficient to recover the full balance of tax credits. The credits related to PSAP and goodwill, mentioned in Explanatory Notes and 9.2.2, will be realized financially up to 2017 and 2032, respectively, according to the amortization standards of the amounts related to them. The Management of the Company and its subsidiaries prepared a projection of future taxable income on December 31, 2012, also considering its discounting to present value, demonstrating the capacity to realize these tax credits in the periods indicated and, for the subsidiaries EDP Bandeirante, EDP Escelsa, Investco and Enerpeixe, as required by CVM Instruction 371/02, the aforesaid studies were approved by the respective Boards of Directors on February 19, These estimates are reviewed quarterly so that potential changes in the recovery prospects for these credits can be considered in the interim accounting information. Consequently, the estimates may not be realized in the future, in view of the uncertainties inherent in these forecasts. Based on the study, the Company and its subsidiaries are expect to recover the deferred tax credits over the following years: to to 2022 Non-current 126, , ,611 70,748 3,221 55, , ,010 The values contained in the interval from 2021 and 2022 refer to temporary differences that will be realized before the end of the concession. 10 Related parties The balances of assets and liabilities, as well as the transactions of the Company and its subsidiaries with its parent company, key management and other related parties, which influenced the results for the period, in connection with related party transactions, result from transactions performed under normal market conditions presented as follow: 24

26 Notes to the interim accounting information Object of the contract Counterparty Income (expenses) for the 6- Assets Liabilities month period ended June 30 Transaction date Validity period 12/31/ /31/ Other credits Reduction of Lajeado as Special Shareholders Meeting as of 05/03/2013 Lajeado 5/3/2013 Undetermined 251, Related parties Sharing of expenses with corporate managers, approved by ANEEL. Bandeirante through Order 205/13 Sharing of expenses with property rentals, condominium expenses, telecommunications expenses, approved by ANEEL through Order 1598/11, ending on June EDP Bandeirante 7/1/ , , Energest 7/1/ EDP Comercializadora 7/1/ Pantanal 7/1/ Investco 7/1/ Lajeado 7/1/ Santa Fé 7/1/ EDP Escelsa 7/1/ , , EDP Bandeirante 1/1/ /01/2011 to 12/31/ ,164 1,213 Energest 1/1/ /01/2011 to 12/31/ EDP Comercializadora 1/1/ /01/2011 to 12/31/ Enercouto 1/1/ /01/2011 to 12/31/ ECE Participações 1/1/ /01/2011 to 12/31/ Instituto EDP 1/1/ /01/2011 to 12/31/ Pantanal 1/1/ /01/2011 to 12/31/ Investco 1/1/ /01/2011 to 12/31/ Lajeado 1/1/ /01/2011 to 12/31/ CEJA 1/1/ /01/2011 to 12/31/ Evrecy 1/1/ /01/2011 to 12/31/ EDP Escelsa 1/1/ /01/2011 to 12/31/ Distribution of Investment Reserve Extraordinary Shareholders' Meeting May 3, 2013 Lajeado 5/3/2013 Undetermined 49, Loan agreement - 100% of CDI Energest 7/19/ /19/2011 to 07/18/ , Energest 5/15/ /15/2003 to 03/21/ ,827 EDP Comercializadora 11/9/ /09/2009 to 09/06/ , Escelsapar 6/27/ /27/2005 to 11/29/2014 5,207 4, Investco 12/10/ /10/2009 to 11/08/ EDP Bandeirante 1/24/ /24/2013 to 01/31/ Loan agreement - 102% of CDI Loan agreement - 110% of CDI Loan agreement - 105% of CDI Agreement of consulting services Agreement of pass-through of Guarantee on loan Selling of assets Terra Verde 1/1/2010 Undetermined 7,785 7, Pecém OM 12/5/ /05/2011 to 12/31/ Pecém 9/24/2012 9/24/2012 to 12/09/ , , , Cenaeel 12/1/ /01/2012 to 11/30/ (98) Elebrás 12/1/ /01/2012 to 11/30/2013 1, EDP Renováveis EDP Renováveis Espanha 12/1/ /01/2012 to 11/30/ (330) 1/0/ ,277 1, Terra Verde 1/15/ /15/2010 to 01/15/2014 6,647 6, Advances for future capital increase AFAC Terra Verde 12/31/2008 Undetermined 3,100 3, Cachoeria Caldeirão 3/1/2013 Undetermined CEJA 6/1/2012 Undetermined 207, , Resende 1/31/2013 Undetermined Total 478, , ,961 6,065 Current Non-current assets 43,714 10, , , , ,

27 Notes to the interim accounting information Object of the contract Counterparty Income (expenses) for the 6- Assets Liabilities month period ended June 30 Transaction date Validity period 12/31/ /31/ Related parties Agreement of consulting services EDP Renováveis 12/1/ /01/2012 to 11/30/ (330) Cenaeel 12/1/ /01/2012 to 11/30/ (98) Elebrás 12/1/ /01/2012 to 11/30/2013 1, Debt confession recordbetween Instituto EDP and EDP Bandeirante, approved byaneel through Order 3821/11. Instituto EDP 10/1/ /09/ Sharing of expenses with property rentals, condominium expenses, telecommunications expenses, approved by ANEEL through order No. 1598/11. Agreement of environmental consulting services Instituto EDP 1/1/ /01/2011 to 12/31/ EDP Renováveis 1/1/ /01/2011 to 12/31/ Energest 9/29/ /29/2011 to 09/28/ Agreement of pass-through of Guarantee on loan EDP Renováveis Espanha 1,277 1, Loan agreement - 105% of CDI Pecém 9/24/2012 9/24/2012 to 12/09/ , , , Loan agreement - 110% of CDI Pecém OM 12/5/ /05/2011 to 12/31/ Total 163, , , Current Non-current 162, , , ,950 The Agreement for Sharing between related parties is divided into two types: Agreement for the Sharing of Activities and the Allocation of Expenditure and Infrastructure Sharing Agreement: a) Agreement for the Sharing of Activities and the Allocation of Expenditure From January 1, 2011, EDP - Energias do Brasil, the parent company of the Company, is responsible for contracting Agreements for the Sharing of Activities and the Allocation of Expenditure which include the corporate areas activities. This agreement approved by ANEEL Order No 1359/2011, in force until December 7, 2011, which sets forth the distribution of expenses with salaries and payroll taxes of the Holding's corporate managers and employees that create policies and guidelines to be followed by the economic group's companies and the appropriation is made based on the activities carried out for each party through the timesheet. The request for the approval of the 3rd Addendum to the Agreements for Activity Sharing and Expenditure Allocation after December 7, 2011 was not approved by ANEEL, as communicated in Dispatch No. 174 of January 18, On May 22, 2012, Regulatory Resolution ANEEL no. 489 altered Regulatory Resolution 334/08, allowing, following analysis by ANEEL, the extension of the consent already granted for human resources sharing agreements resulting from the segregation of activities established by Law 10848, of 2004, until the new Regulatory Resolution that will govern hiring between related parties in the electricity industry has taken effect. On June 28, 2012, through Decision No. 2149, ANEEL approved the drafts of the 2nd and 3rd Addenda to the Agreement for the Sharing of Activities and the Allocation of Expenditure, entered into between the Company and its Parent Company for the sharing of corporate managers, as requested in document No / , effective through the date established by the new sole paragraph of Section 27 of Regulatory Resolution No. 334/2008, amended by Regulatory Resolution No. 489/12. ANEEL pronounced, through Circular Letter 883/12 dated September 11, 2012, that the concessionaires, licensees and authorized parties interested in the extension of the period of consent granted by ANEEL, must urgently file an expression of interest by October 11, 2012, for which reason the Company requested the adjustment of the Agreement for Sharing of Activities and Allocation of Expenditure on October 10, 2012, so that the agreement only takes effect on July 01, 2012 and for the period from January 01, 2012 to June 30, 2013 is fully assumed by the subsidiary EDP - Energias do Brasil S.A., effective through the date established by the new sole paragraph of Section 27 of Regulatory Resolution 334/08, amended by Regulatory Resolution 489/12, which were approved through ANEEL Ruling 205 of January 25, b) Infrastructure sharing agreements: Expenditures incurred in April and May 2013 was shared in accordance with the infrastructure sharing agreement, approved by ANEEL Dispatch No. 1598/2011, and in effect for 48 months beginning January 1, In June 2013, due to the address change of the head office of EDP Group in São Paulo, amendments were made to the Infrastructure Service Sharing Agreements - setting forth the distribution ofexpenses relating to property rental, condominiums, and telecommunications based on the meter used by each part at the location that is the subject-matter of the agreement. The related-party agreements are in the process of being approved by ANEEL and for this reason the expenditure is being assumed by the parent company. Transactions made with related parties and that are reported as shared expenses and infrastructure with related parties were carried out in the normal course of business, without any incremental profit margin. c) Energy purchase agreements are adjusted on an annual basis, those that are auction agreements are adjusted by the Expanded Consumer Price Index (IPCA), and bilateral agreements are adjusted by the General Market Price Index (IGP-M). The suretyships provided by the shareholder are described in the Note on Guarantees (Note 30.2) 26

28 Notes to the interim accounting information 10.1 Relationship of the Company with each party The counterparties Bandeirante, Cachoeira Caldeirão, EDP Comercializadora, Lajeado, Escelsa, Terra Verde, Escelsapar, Enercouto and CEJA are direct subsidiaries of the Company. The counterparties Pantanal, Investco, Costa Rica, Santa Fé and ECE Participações are the Company's indirect subsidiaries. The counterparties EDP Renováveis, Cenaeel, Elebrás and Instituto EDP are associated companies. The counterparties Pecém OM and Porto do Pecém are joint ventures Management remuneration Compensation policy or practice for the Board of Directors, Board of Officers, and Committees. Proportion of each item of total compensation, referring to the period ended June 30, Board of Directors Fixed Compensation: 100% Board of Officers Fixed Compensation: 59% Variable Compensation: 41% Fiscal Council Fixed Compensation: 100% Total compensation of the Board of Directors and Board of Officers payable by the Company in the first half ended June 30, 2013 (in R$) Board of Directors Statutory Board Fiscal Council Total Number of members 4 (*) 5 (**) 3 (***) 12 Fixed Compensation (in R$): 439,000 1,445,247 38,167 1,922,414 Salary or direct compensation 277,500 1,133,971 31,806 1,443,277 Direct and indirect benefits (i) n/a 67,772 n/a 67,772 Compensation for participation in committees 90,000 n/a n/a 90,000 Social Charges 71, ,504 6, ,365 Variable Compensation (in R$): n/a 1,009,292 n/a 1,009,292 Bonus n/a 788,509 n/a 788,509 Social Charges n/a 220,783 n/a 220,783 Total amount of the remuneration, by body 439,000 2,454,539 38,167 2,931,706 ( n/a ) = Not applicable 2013 (*) Out of the eleven positions of the Board of Directors (8 full members and 3 vacants), only four receive compensation. The annual and overall remuneration of the members of the Board of Directors is up to R$860,000 for the period from April 2013 to March 2014, as approved in the Ordinary General Meeting on April 10, (**) Of the six positions of the Statutory Board, 5 receive compensation, and out of four members, two perform two functions (Director Vice-President for Finance and Investor Relations and Director Vice-President of Management Control). The annual and overall remuneration of the Board of Officers is up to R$5,600,000 for the period from April 2013 to March 2014, as approved in the Ordinary General Meeting on April 10, (*) Out of the three positions of the Fiscal Council, all receive compensation. The annual and overall remuneration of the members of the Board of Directors is up to R$42,409 for the period from April 2012 to March 2013, as approved in the Ordinary General Meeting on April 10, The Fiscal Council was not set up for the period from April 2013 to March 2014 due to the lack of minimum 2% voting quorum established by the Securities Commission (CVM) Instruction No. 324/200 as approved in the Annual Shareholders Meeting held on April 10, The Health Insurance, Dental Care, Drugstore Discount and Social Security and Meal voucher plans were calculated as benefits Maximum, minimum and average individual remuneration of members of the Board of Directors and Board of Officers at the year ended June 30, 2013 (in R$) 2013 Board of Directors Statutory Board Fiscal Council Number of members Amount of the highest individual remuneration 156, ,002 12,722 Amount of the lowest individual remuneration 78, ,795 12,722 Average amount of individual remuneration 109, ,908 12,722 27

29 Notes to the interim accounting information 11 Other credits - Assets and Other accounts payable Liabilities Current Non-current assets Current Non-current assets Note 12/31/ /31/ /31/ /31/2012 Other credits - Assets Advances to employees , Advances to suppliers , Low income subsidy ,872 4, Tariff modicity - low income ,453 18,453 Expenditure to be refunded ,116 10, Energy Efficiency Program Assets for sale ,626 45, Services in progress , , Services rendered to third parties ,569 14, Deactivations and disposals in service ,253 1, Infrastructure sharing ,616 1, Derivative financial instruments ,984 12,594 Other tariff grants , Reimbursement CDE , Capital reduction , Other ,477 14,414 14,291 5,994 7,454 14,416 14,293 Total 252,009 1,789 14,414 14, , ,647 53,840 46,327 Other - Liabilities Advances received - disposal of assets and rights ,806 55, Public lighting contribution ,603 15, Sundry creditors - consumers ,750 11, Payroll ,096 7, Tariff modicity - low income ,250 10,017 10,017 ICMS credit assignments , Interest on compulsory loan Third party collection to be transferred , Amounts payable - Cable TV and Telephone ,945 2, Capital reduction , Tariff Discount Subsidy Advance Energy Development Account , Other ,836 3, ,632 18,134 5,492 5,545 Total 4,835 4, , ,945 15,509 15, Tariff modicity - low income 11.2 In compliance with Notice Term no. 1,091/05 of ARSESP (São Paulo State regulatory agency of sanitation and power), which determines the review of registration criteria for residential consumption units that, due to their characteristics, should be classified as Low Income residential units, EDP Bandeirante recorded in 2008 the amount of R$47,640 referring to amounts to be returned to consumers, as they have been originally billed at undiscounted tariffs. In 2010 the classification basis was adjusted and consequently the initial position changed to R$29,698. The refunds started being made in March 2009, and the balance returnable to consumers as at June 30, 2013 amounts to R$10,784 (R$11,267 on December 31, 2012). Considering that the legislation and regulation of this matter provides for the refunding of part of these amounts through economic subsidies, EDP Bandeirante also recorded the amount receivable. The total amount to be refunded by the company and forwarded in order to receive economic grants amounts to R$18,453. Measures are being made to locate and reimburse inactive customers. Assets for sale Of the total amount of R$ 46,626 on June 30, 2012 (R$ 45,170 on December 31, 2012) R$ 41,685, referring to the balance receivable of EDP Escelsa in relation to the sale of property, according to the Real Estate Purchase & Sale Commitment signed by EDP Escelsa on November 27, 2012 with Campo Participações Imobiliárias S.A., the object of which is the commitment to sell the proportion of 85,300 m² of a property with a total area of 107, m² (Registered with the Real Estate Registry Office in Serra/ES), located at Rodovia BR 101 Norte, 3,450, Planalto de Carapina, Municipality of Serra, State of Espírito Santo. The values proposed from the sale substantially exceeded the book value of the respective assets. The process of disassembly and demobilization should be completed within 180 days after the signing of the foregoing Instrument, which is the period foreseen for carrying out the transfer of the property to the buyer. The gain from the sale of the property at the estimated amount of R$ 50,000 will be recorded on the books at the time of transfer of the risks and benefits of the property to the buyer in accordance with CPC Services in progress Out of the balance of R$ 119,842 (R$ 104,083 as at December 31, 2012), R$ 102,787 as at June 30, 2013 (R$89,418 as at December 31, 2012) is represented by the distributors EDP Bandeirante and EDP Escelsa this balance is composed of expenditures with the ongoing projects of the Energy efficiency and Research and development programs - PEE and Research and Development - R&D, created by ANEEL Resolutions no. 316/08, applied up to October 2012 and amended by Regulatory Resolution 504/12, referring to R&D, and 300/08, referring to PEE, the realization of which will be entered as a debit in Current Liabilities from regulatory and industry charges upon the conclusion of the project (Note 20.1) amounting to R$ 98,844 as at June 30, 2013 (R$85,161 as at December 31, 2012) and from costs of services rendered to third parties and own, including expenses on personnel, material and services, in the execution of the services rendered by the Company, related directly to the object of the concession and that are determined and recorded by means of the system of Orders in Progress amounting to R$3,943 as at June 30, 2013 (R$4,257 as at December 31, 2012). 28

30 Notes to the interim accounting information 11.4 Other tariff grants As provided for in Article 13, item VII, of Law 10438/2002, with wording given by Provisional Act 605/2013 and in compliance with the provisions of Article 3 of Decree 7891/2013, which refers to grants of CDE funds, transferred by Eletrobrás to the Company, related to discounts for rural activity, irrigation, water treatment, sewage and sanitization taken from the tariff structure beginning on January 24, The provisions in Decree No of May 29, 2013, modified the provisions of Decree 7891 of January 23, 2013, and allowed ANEEL to authorize the advance transfer for receiving Energy Development Account (CDE) funds to cover the discounts levied on tariffs and a balance tariff reduction as approved by ANEEL through its Dispatch No of May 29, 2013, referring to the periods of May to November However, in view of Eletrobrás s operating requirements to carry out the transfers due, EDP Escelsa and some other concessionaires were not able to complete the transfer process by June 3, On June 5, 2013, through the Brazilian Association of Electric Power Distribution Companies (ABRADEE) a letter was sent to ANEEL requesting an urgent order for Eletrobrás to proceed with the fund transfers. The balance shown on June 30, 2013 refers to EDP Escelsa amounting to R$ 19,809. The amount to be received by EDP Escelsa, as established in ANEEL s Dispatch No. 1711/2013, is R$ 69,330. Reimbursement CDE On June 30, 2013, of R$83,224 presented in caption Short-Term Power, belongs to the distributors EDP Bandeirante and EDP Escelsa. It refers to amounts to be transferred by Eletrobrás to distributors with current accounts linked to CCEE, with CDE funds pursuant to the terms of Decree 7945/13 and referring to January 2013, as the reimbursement of expenses with: i) exposure to short-term market of hydroelectric plants contracted at the physical guarantee share system of power and power capacity, addressed by paragraph 5, Article 1 of Law 12783/2013, due to insufficient generation allocated in the ambit of the Power Relocation Mechanism - MRE (Hydrologic Risk), ii) exposure in the short-term market of distributors, due to insufficient contract backing in relation to load made, related to the amount of not re- contracted reposition (Involuntary Exposure), and iii) additional costs related to the operation of thermoelectric plants based on merit, resulting from a decision of CMSE (the electrical sector monitoring committee) (ESS Power Security). Capital reduction As mentioned in note 5.4, the Extraordinary Shareholders' Meeting held on May 3, 2013 approved a decrease in capital of subsidiary Lajeado Energia, as it considered it excessive. This reduction, which was subject to ANEEL s approval, amounted to R$450,000 and gave rise to the recognition of R$251,381 in accounts receivable of the and R$18,315 of accounts payable to Tocatins State Government and R$180,315 to Eletrobrás Other creditors and debtors - current and non-current Refers to amounts receivable for the exchange of the Company's shares with Empresa Energética de Mato Grosso do Sul S.A. - Enersul shares which previously belonged to Grupo Rede Energia S.A., amounting to R$ 11,234 (R$11,036 as at December 31, 2012). The Company has contingent liabilities in the amount of R $ 41,463 as shown in note Investments 12.1 Movement of investments in the period % Direct interest Balances on 12/31/2012 Additions Write-offs Equity accounting Dividends/Int erest on own capital Other comprehensive income Provision for losses Transfer to unsecured liability Amortization Balances on 12/31/2012 Investments EDP Bandeirante 779,290 85,000-30,125 - (7,131) , EDP Escelsa 614, ,739 - (107) , Investco Lajeado 636,456 - (251,381) 63,654 (82,421) , Lajeado (Goodwill) 130, (1,350) - (805) , Enercouto 4, (75) , Enerpeixe 785, , , Energest 495, ,105 (71,402) , EDP Comercializadora 60,796 - (68) 41,259 (28,880) , CEJA - 88,300 - (4,599) (13,153) 70, Porto do Pecém 611,433 83,000 - (107,109) - 7, , Pecém TM (27) Pecém OM (64) EDP Renováveis 89, , Resende 9, (10) , Mabe Brasil (25) Other 5,320 - (320) ,000-4,223, ,314 (251,769) 218,374 (182,703) (895) (25) (13,153) - 4,249,916 Concession right EDP Bandeirante 22, (729) 22,230 Enerpeixe 2, (58) 2,708 Lajeado 70, (1,769) 69,001 Porto do Pecém 3, (58) 3,522 Pantanal 8, (295) 8,407 Goodwill 108, (2,909) 105,868 Lajeado Energia 42, ,293 42, ,293 4,374, ,314 (251,769) 218,374 (182,703) (895) (25) (13,153) (2,909) 4,398,077 In accordance with ICPC09, Concession Rights and Goodwill are accounted for as investments in the parent company. 29

31 Notes to the interim accounting information % Direct interest Balances on 12/31/2012 Additions Equity accounting Provision for losses Transfer to unsecured liability Balances on 12/31/2012 Provision for unsecured liability Escelsapar 3, , CEJA 7,017-6,136 - (13,153) Cachoeira Caldeirão Terra Verde 17,691 1,418 (13) (31) - 19, Total 27,781 1,418 6,645 (31) (13,153) 22,660 The increases in the period refer to a capital increase in all subsidiaries. Terra Verde Terra Verde has a provision for unsecured liabilities amounting to R$17,640 (R$16,236 as at December 31, 2012) and at the Company, a provision for investment losses was recorded amounting to R$1,425 (R$1,455 on December 31, 2012). At the Extraordinary General Meeting of Terra Verde, held on September 14, 2010, the Company communicated its interest in definitely discontinuing the implementation of the Terra Verde Project, and for this reason it presented to the meeting a proposal for the dissolution of the company, but Investimento Verde, another shareholder, did not accept the proposal. In view of this fact, on September 20, 2010, the Company filed a lawsuit for company dissolution, Lawsuit No being processed at the 3rd Civil Court of São Paulo. On December 22, 2011, the Company and Investimento Verde entered into an Agreement for Transaction and Other Covenants to suspend and, consequently, settle the lawsuits and other controversies. This transaction involves the amount of R$6,500 thousand, adjusted for inflation on a daily pro rata basis, by the General Market Price Index (IGP-M), to be disbursed by EDP as soon as the conditions precedent have been satisfied. On March 27, 2013, the Company and Investimento Verde Participações Ltda ("Investimento Verde") decided to terminate the Shareholders Agreement executed between the parties on June 17, 2008, generating losses to the Company of R$8,417 recorded in shareholders' equity against Accumulated Income. On the same date, the Company delivered to Investimento Verde the Basic Engineering Project of UTE Terra Verde and, as a result, Investimento Verde declared and guaranteed that the Company no longer has any responsibility for possible inconsistency, inaccuracy, insufficiency or untruthfulness relating to the Basic Project, even those arising from actions, facts or omissions occurring before that date, thus irrevocably and irreversibly waiving any claim and/or right that it might have against the Company or its subsidiary Terra Verde Balances on 12/31/2012 Additions Write-offs Equity accounting Other comprehensiv e income Incorporation Other investments Balances on EDP Energias do Brasil EDP Renováveis 89, ,019 Porto do Pecém 611,433 83, (107,109) 7, ,469 Pecém TM (27) Pecém OM (64) Mabe Brasil (25) Other 5, (320) , Lajeado Negative goodwill - Investco Other (55) Resende Other (520) 0.00 EDP Comercializadora BBCE Other investments Enercouto 1, ,271 Total 708,682 83,014 (375) (106,346) 7,145 (25) (520) 691,575 Enertrade's stake in EDP Comercializadora no Balcão Brasileiro de Comercialização de Energia - BBCE On December 15, 2011, at a Directors' Meeting of the Company, the acquisition of a lot of one thousand shares, amounting to R$ 200, by EDP Comercializadora was approved, which will allow the BBCE to hold a seat on the Board of Directors of the new company. BBCE is a closely-held corporation with share capital of R$12 million (60 lots of 1000 shares) in which all Agents of the Free Contracting Environment (ACL) can invest. On February 28, 2012, EDP Comercializadora made a capital contribution to BBCE which was paid up amounting to R$

32 Notes to the interim accounting information 12.2 Direct interests in investments Shares / Quotas owned by the Company (In thousands) 12/31/2012 % of Company's ownership interest Liabilities (Current and noncurrent) Shareholders' equity (unsecured 12/31/2012 Total assets liability) Revenue Income (loss) for the period Company Ordinary / Quotas Ordinary / Quotas Paid-up capital Voting capital Paid-up capital Voting capital 12/31/ /31/ /31/ /30/ /30/2012 EDP Bandeirante 39,091,735 39,091, ,500,921 2,445,523 1,613,637 1,666, , , ,070 1,271,877 3,099 30,125 EDP Escelsa 5,876 5, ,556,791 2,417,308 1,864,694 1,802, , , ,360 1,018,612 46,380 77,739 Energest 1,000,572 1,000, , , , , , ,611 61, ,641 22,517 50,107 Lajeado 113, , ,769,998 1,681, , ,226 1,012,559 1,501, , ,973 (729) 89,614 CEJA 20,127 20, , , , ,426 70,547 (7,018) (8,017) (10,735) Enerpeixe 499, , ,989,611 2,006, , ,274 1,422,249 1,309,129 99, ,789 44, ,120 Cachoeira Caldeirão , , (128) (84) (129) Enercouto ,736 4, ,736 4, (7) (75) EDP Comercializadora 26,217 26, , , , ,281 73,106 60, , ,916 8,302 41,258 Escelsapar ,355 4,368 7,821 7,441 (3,466) (3,073) (227) (393) Porto do Pécem 475, , ,064,017 2,079,137 1,469,548 1,467, , , , (107,109) (21,278) Pecém TM (27) (116) Pecém OM ,468 1,492 1,163 1, (64) (28) Terra Verde (i) ,886 17,891 (17,642) (17,647) EDP Renováveis 46,893 46, , ,163 36,870 35, , , ,875 (9,207) Evrecy - 21, Mabe Brasil 451, , , (9,200) 0.00 (i) The total is 100 shares.

33 13 Indemnifiable financial assets The subsidiaries Bandeirante and Escelsa have a balance of R$751,901 (R$690,278 as at December 31, 2012) in the non-current from the Concession grantor related to the unconditional right to receive cash at the end of concession, as an indemnity for investments made and not recovered in the rendering of services granted. These financial assets are valued at their fair value, based on the VNR of assets pertaining to the concession issued on the basis of valuation report regulatory compensation - BRR and updated by the IGP-M until the statement of financial position date and that will be reversible to the Concession grantor at the end of the concession. Movements during the period are following: Net amount at 12/31/2012 Transfer of intangible Fair value Write-offs Net amount at Indemnifiable financial assets 690,278 51,136 12,578 (2,091) 751,901 Total 690,278 51,136 12,578 (2,091) 751,901 Non-current assets 690, , , , Property, plant and equipment 12/31/2012 Average depreciation rate % Historical cost Accumulated depreciation Net amount Average depreciation rate % Historical cost Accumulated depreciation Net amount Construction in service Administration Construction in service - tangible (5) (5) 3 Machinery and equipment ,586 (744) ,281 (688) 593 Vehicles ,163 (655) ,281 (611) 670 Furniture and fixtures ,590 (1,117) ,590 (1,076) 514-4,347 (2,521) 1,826 4,160 (2,380) 1,780 14c Total construction in service - 4,347 (2,521) 1,826 4,160 (2,380) 1,780 Construction in service d Administration - 6,759-6,759-3,224-3,224 Total construction in service - 6,759-6,759 3,224-3,224 Total property, plant and equipment 11,106 (2,521) 8,585 7,384 (2,380) 5,004 12/31/2012 Average depreciation rate % Historical cost Accumulated depreciation Net amount Average depreciation rate % Historical cost Accumulated depreciation Net amount Construction in service Generation Land - 169, , , ,090 Reservoirs, dams and water mains ,993,877 (350,069) 1,643, ,993,878 (329,795) 1,664,083 Construction in service - tangible ,547 (182,937) 595, ,741 (174,598) 602,143 Machinery and equipment ,795,380 (406,184) 1,389, ,800,871 (378,668) 1,422,203 Vehicles ,992 (2,955) 1, ,887 (2,987) 900 Furniture and fixtures ,479 (1,362) 1, ,413 (1,274) 1,139-4,743,357 (943,507) 3,799,850 4,746,880 (887,322) 3,859,558 Related system of transmission Land Construction in service - tangible ,475 (3,852) 4, ,475 (3,711) 4,764 Machinery and equipment ,091 (24,757) 59, ,264 (22,702) 52,562-92,567 (28,609) 63,958 83,740 (26,413) 57,327 Administration - Land - 3,638-3,638-3,638-3,638 Construction in service - tangible (46) (43) 121 Machinery and equipment ,035 (2,607) 2, ,645 (2,386) 2,259 Vehicles ,657 (2,037) 1, ,681 (1,825) 1,856 Furniture and fixtures ,308 (2,091) 1, ,282 (2,008) 1,274-15,802 (6,781) 9,021 15,410 (6,262) 9,148 Activities not linked to concession - Land Furniture and fixtures (268) (257) (268) (257) 197 Total construction in service - 4,852,180 (979,165) 3,873,015 4,846,484 (920,254) 3,926,230 Construction in service Center Generation - 833,500 (7,800) 825, ,442 (7,800) 623,642 Administration - 7,377-7,377-4,455-4,455 Total construction in service - 840,878 (7,800) 833, ,898 (7,800) 628,098 Total property, plant and equipment 5,693,058 (986,965) 4,706,093 5,482,382 (928,054) 4,554,328

34 Property, plant and equipment in progress refer basically to investments in UHE Santo Antônio do Jari, amounting to R$ 611,780, investments in UHE Cachoeira Caldeirão amounting to R$ 22,733 and the repowering of UHE s Lajeado, Mascarenhas and Tupirantis totaling R$ 60,044 (R$56,869 on December 31, 2012 refers to UHEs Lajeado, Mascarenhas and Tupirantis). The amount of depreciation of construction in service refers to the provision for asset impairment at the subsidiary Terra Verde, recorded until the end of the period. Movements of the property, plant and equipment during the period are as follow: Net amount Net amount 12/31/2012 Additions Depreciation Write-offs Construction in service Construction in service Machinery and equipment (55) Vehicles (69) (93) 508 Furniture and fixtures (41) a Total fixed assets in service 1,780 - (165) (93) 1,522 14b Total constructions in progress 3,224 3, ,063 Total of Property, plant and equipment 5,004 3,839 (165) (93) 8,585 Net total 5,004 3,839 (165) (93) 8,585 Net amount Transfer to Net amount intangible in 12/31/2012 Additions Capitalized interest service Depreciation Write-offs Reclassification Construction in service Land 172, (8) ,807 Reservoirs, dams and water mains 1,669, (20,273) ,649,115 Construction in service 607, ,807 (8,486) ,353 Machinery and equipment 1,471, ,720 (29,787) ,445,649 Vehicles 2, (390) (93) ,657 Furniture and fixtures 2, (199) (10) ,434 Total fixed assets in service 3,926, ,031 (59,135) (111) - 3,873,015 Total constructions in progress 628, ,114 13,936 (6,006) - (1,829) ,078 Total of Property, plant and equipment 4,554, ,114 13, (59,135) (1,940) 765 4,706,093 During the period, there was no evidence of unrecoverable losses or the occurrence of events or alterations in the circumstances indicating that the book value might not be recoverable Acquisitions - Construction of UHE Santo Antônio do Jari The indirect subsidiary ECE signed an EPC (Engineering Procurement and Construction) contract under the full turnkey model with the consortium made up of the companies, CESBE S.A Engenharia e Empreendimentos, Alstom Brasil Energia and Transporte Ltda e Areva Koblitz S.A. The construction of the Santo Antônio do Jari HPP has progressed according to schedule: The Installation License for the project was issued in June 2011 and the construction began in August 2011 and forecast to be finished by the end of In the year 2012, licenses for specific installation were also issued for: (i) the construction of the 230 kv transmission line (TL) for connection to the Basic Network, and (ii) the implementation of the Project for the Relocation of the village of São Francisco do Iratapuru. The investment corresponding to the Company s share amounted to R$ 172,461 excluding capitalized interest in the project of R$ 11,775. The project's total projected investment could range from R$ 1,270 thousand to R$ 1,410 thousand. Construction UHE Cachoeira Caldeirão On February 15, 2013, the Company was accepted for the auction A-5 which occurred on December 14, 2012 and, on March 8, the result was homologated and adjudicated. Concession Agreement was signed on May 29, 2013 and the Contract for the Purchase and Sale of Electric Power in Regulated Environment (CCEAR) is estimated to be signed on September 2. The investment corresponding to the Company s share amounted to R$ 9,049, excluding capitalized interest in the project of R$ 935. The total estimated investment is R$ 1.1 billion. Repowering - UHE Mascarenhas On February 08, 2013, ANEEL, through Ruling no. 326, published on February 14, 2013, authorized the commercial operation startup of generator unit II, with49.5 MW of installed capacity of UHE Mascarenhas. Generator unit II was inoperative in the period from February 8, 2012 to February 8, 2013 for repowering. With the commercial operation start-up of generator unit II, UHE Mascarenhas, which is located in the municipalities of Baixo Guandu and Aimorés, finalizes the repowering process of its four generator units. The repowering project of the four generator units added 17.5 MW, currently totaling 198 MW of installed capacity.

35 15 Intangible assets 12/31/2012 Average amortization rate % Historical cost Accumulated amortization Net amount Average amortization rate % Historical cost Accumulated amortization Net amount Intangible in service 0.00 Administrative Software ,922 (2,204) ,770 (2,139) ,922 (2,204) 718 2,770 (2,139) 631 Total Intangible in service ,922 (2,204) 718 2,770 (2,139) 631 Constructions in progress Administrative , ,039 Total Intangible in service ,039-1,039 Total Intangible 3,849 (2,204) 1,645 3,809 (2,139) 1,670 12/31/2012 Note Average amortization rate % Historical cost Accumulated amortization Net amount Average amortization rate % Historical cost Accumulated amortization Net amount Intangible in service 0.00 Center 0.00 Concession rights - Infrastructure ,265,159 (2,520,511) 1,744, ,188,378 (2,441,753) 1,746,625 Concession rights - Other ,143 (15,913) 22, ,143 (15,184) 22,959 4,303,302 (2,536,424) 1,766,878 4,226,521 (2,456,937) 1,769,584 Generation 0.00 Software ,078 (3,279) ,080 (3,111) 969 Permanent easement Concession right - Environmental licenses ,854 (2,592) 1, ,854 (2,325) 1,529 Concession right - Use of public property - UBP ,560 (42,671) 128, ,560 (39,864) 131,696 Concession right - Other ,514,871 (274,298) 1,240, ,514,871 (256,878) 1,257,993 1,694,868 (322,840) 1,372,028 1,695,035 (302,178) 1,392,857 Transmission Permanent easement Administration - - Software ,653 (4,810) 1, ,298 (4,511) 1,787 6,653 (4,810) 1,843 6,298 (4,511) 1,787 Total Intangible in service 6,005,099 (2,864,074) 3,141,025 5,927,965 (2,763,626) 3,164,339 Constructions in progress 0.00 Center , , , ,255 Generation , , , ,321 Administration , , , ,044 Total Intangible in service 195, , , ,620 Goodwill in the incorporation of parent company , , , ,511 ( - ) Provision for maintenance of dividends 0.00 (940,511) 0.00 (940,511) 0.00 (940,511) 0.00 (940,511) Amortization of provision for maintenance of dividends , , , ,048 ( - ) Goodwill accumulated amortization 0.00 (80,721) 0.00 (80,721) 0.00 (305,048) 0.00 (305,048) Goodwill Lajeado Energia and Investco , , , ,293 42,293-42,293 42,293-42,293 Total Intangible 6,243,261 (2,864,074) 3,379,187 6,187,878 (2,763,626) 3,424,252 Movements in tangible and intangible assets during the period are demonstrated as follow:

36 Net amount Transfer to Net amount at intangible in at 12/31/2012 Additions service Amortization Intangible in service Software (66) 718 Constructions in progress 1, (153) , (66) 1,645 Reclassificat ion to Net amount at Transfers to construction Transfers to indemnifiable property, plant and Net amount at 12/31/2012 Additions Capitalized interest in service financial Amortization Write-offs equipment Intangible in service Software 2, (469) (3) ,642 Permanent easement Concession right - Environmental licenses Concession rights - Infrastructure Concession right - Use of public property - UBP Concession right - Other , (267) ,262 1,746, ,907 (51,136) (94,396) (9,352) ,744, , (2,806) ,889 1,280, (18,149) ,262,803 Constructions in progress 217, ,980 3,685 (153,289) ,118 (245) 195,869 Goodwill 42, ,293 Total Intangible 3,424, ,980 3,685 (25) (51,136) (116,087) (7,237) (245) 3,379, The Company evaluated the recovery of the carrying amounts of goodwill and intangible assets based on their value in use, based on the discounted cash flow model for each individual cash generating unit, which represents the total tangible and intangible assets. The recoverable amount of subsidiaries' goodwill is evaluated on an annual basis, regardless of impairment indicators. Possible impairment losses are recognized in income. The recoverable amount is determined based on the assets value in use and are calculated using evaluation methodologies, backed by discounted cash flow techniques, considering market conditions, time value, and business risks. A set of assumptions was defined to determine the recoverable amount of the main investments. The cash generating units are: EDP Bandeirante, EDP Escelsa, Energest, EDP Comercializadora, Enerpeixe, Lajeado and Investco; Basis to determine recoverable amount: value in use equity value ; Determination of cash flows: production and consumption volume and estimated tariffs and residual value at the end of the concession; Term used for cash flow: end of the concession; Average BRR restatement rate (Distribution companies), energy sale agreements (generation companies) and operating costs: IGP-M/IPCA assumption: 4.24% p.a.; Discount rate used (net of taxes): average remuneration of investment rate: 8.05% On December 31, 2012, the Company's and its subsidiaries' recovery testing of goodwill and intangible assets did not result in the recognition of losses in intangible assets. In the period, there was no evidence of unrecoverable losses or the occurrence of events or alterations in circumstances indicating that the book value might not be recoverable. Concession rights - Other EDP Bandeirante Lajeado Enerpeixe Porto do Pecém Pantanal ECE Paricipações Investco Total Note Cost Amortization Total 38,143 (15,913) 22, ,533 (53,532) 69,001 3,837 (1,129) 2,708 3,590 (68) 3,522 13,373 (4,966) 8, , , ,264 (214,603) 572,661 1,553,014 (290,211) 1,262,803 Concession rights are measured at investment total acquisition cost less amortization expenses. Amortization occurs in accordance with the concession period Concession right - Business combination As a result of the business combination, in accordance with CPC 15, the difference between the amount paid for the acquired business and market value was recorded. Considering that subsidiary ECE Participações is in the pre-operating stage, this concession right was not amortized until June 30, Goodwill in the incorporation of parent company Refers to the spun-off portion of goodwill incorporated in subsidiaries EDP Bandeirante, EDP Escelsa and Lajeado, deriving from the acquisition of said companies shares, which was accounted for in accordance with CVM Instruction no. 319/99 and no. 349/99 and ICPC 09 and, as determined by ANEEL, is being realized based on the curve of expected future income over the company s concession period. Goodwill - Lajeado Energia and Investco In September 2008, the goodwill amounting to R$42,293 from the business combination, when the Company exchanged the shareholding interest held in Enersul for the shareholding interest held by Rede Energia S.A. in its subsidiaries Lajeado and Investco, and by shareholding interest held by Rede Power do BrasilS.A. in Lajeado and Tocantins Energia S.A. Goodwill is subject to the analysis of annual recovery without tax effects.

37 16 Suppliers Current Current Note 12/31/ /31/2012 Electricity supply , ,658 Energia livre ,184 63,940 Electricity network utilization charges ,833 80,013 CCEE Operations , ,896 Materials and services 5,306 7, , ,673 Total 5,306 7, , , Energia livre The Brazilian Power Regulatory Agency (ANEEL), by means of Regulatory Resolution 387/09, changed the method for amortizing the balances of Loss of Revenue and Energia Livre, in effect since January 2002 and limited to the period established in ANEEL Resolution 1/04. ANEEL Dispatch No. 2517/10, disclosed the amount to be settled between the generation and distribution agents, with restatement at the monthly SELIC Rate. This settlement should have occurred up to September 30, In order to avoid such payments, ABRADEE (Brazilian Association of Electric Power Distributors), representing distributors in Brazil, among them subsidiaries EDP Bandeirante and EDP Escelsa, filed an Injunction for suspension of said action, which was deferred. Recently, however, a decision was issued considering this action extinct, without deciding on the merit, because the elected chosen action was improper (Injunction). However, payments by subsidiaries EDP Bandeirante and EDP Escelsa remain suspended, considering in light of the filing of an Appeal against said decision, to which staying effects were attributed (thus, effects of sentence unfavorable to distributors were suspended). Note that distributing companies filed, in parallel, a lawsuit with the same purpose as the Injunction, but this was also extinct under the argument that another action with the same parties, same claim and same actual and legal bases (lis pendens) already existed. In view of this decision, an Appeal will also be filed with the Federal Regional Court of the 1st Region. Liabilities are being adjusted monthly for inflation at the SELIC rate, and R$ 2,244 (R$ 2,738 on June 30, 2012) was recorded as a counter entry to financial expenses (Note 25).

38 Management s notes to the financial statements 17 Debentures 17.1 Composition of Debentures balance Charges Principal Charges 12/31/2012 Principal Fiduciary Agent Company Quantity of securities Unit value Total amount Issuing date Contract term Purpose Debt cost Payment method Current Non-current Current Non-current assets Total Current Non-current Current Non-current Total Pentágono S/A Distribuidora de Títulos e Valores Mobiliários EDPE 45, ,000 1st issue on August 28, /28/2012 to 02/28/2014 Investments in electricity generation assets 105.0% of CDI Principal and interest in single statement in the end 27, , , , , ,086 (-) Issuance costs EDPE - - (530) Monthly amortization (235) (235) (412) (412) Pentágono S/A Distribuidora de Títulos e Valores Mobiliários EDPE 50, ,000 2nd issue on April 11, /11/2013 to 04/11/2016 General investments by the Company CDI % Half-annual interest and amortization in two equal installments in April 2015 and April , , , (-) Issuance costs EDPE - - (500) Monthly amortization (452) (452) Total 27,544 7, , , ,790-11, , ,674 Charges 12/31/2012 Principal Charges Principal Fiduciary Agent Company Quantity of securities Unit value Total amount Issuing date Contract term Purpose Debt cost Payment method Current Non-current Current Non-current Total Current Non-current Current Non-current Total Pentágono S/A Distribuidora de Títulos e Valores Mobiliários EDP Escelsa 25, ,000 2/7/ /02/2007 to 07/02/2014 Debt extension. Payment of Senior Notes with maturity on 07/15/ % of CDI Annual principal and interest (six-month period) 5, ,325 83, , ,325 83, ,675 (-) Issuance costs EDP Escelsa /1/ Monthly amortization (90) 0.00 (90) (136) (45) (181) SLW Corretora de Valores e Câmbio Ltda. (-) Issuance costs EDP Bandeirante EDP Bandeirante Annual principal and 07/01/2010 to Cash restructuring to the debt payment 39, ,000 1/7/2010 CDI % interest (six-month 16, , ,181 17, , ,080 06/30/2016 and working capital financing period) Monthly amortization (535) (536) (1,071) (535) (805) (1,340) Oliveira Trust Energest 12, ,000 1st issue on August 28, /23/2012 to 04/23/2017 Debt extension, working capital financing and financing of its capital expenses (CAPEX). CDI % Annual principal starting April 2016 and six-month period interest 1, , ,799 1, , ,713 (-) Issuance costs Energest - - (635) Monthly amortization (471) (471) (541) (541) Pentágono S/A Principal and interest in Cachoeira 1st issue on August 03/08/2013 to Distribuidora de Títulos e 16, ,000 Investment in UHE Cachoeira Caldeirão % of CDI single statement in the , , , Caldeirão 28, /08/2014 Valores Mobiliários end Cachoeira (-) Issuance costs - - (1,292) Monthly amortization (1,183) (1,183) Caldeirão Pentágono S/A Principal and interest in 1st issue on August 08/28/2012 to Investments in electricity generation Distribuidora de Títulos e EDPE 45, , % of CDI single statement in the 27, , , , , ,086 28, /28/2014 assets Valores Mobiliários end (-) Issuance costs EDPE - - (530) Monthly amortization (235) (235) (412) (412) Pentágono S/A Distribuidora de Títulos e Valores Mobiliários EDPE 50, ,000 2nd issue on April 11, /11/2013 to 04/11/2016 General investments by the Company CDI % Half-annual interest and amortization in two equal installments in April 2015 and April , , , (-) Issuance costs EDPE - - (500) Monthly amortization (452) (452) Debt extension. Settlement of the Bank Principal and interest in 1st issue on August 10/24/2011 to Oliveira Trust CEJA 300 1, ,000 Credit Notes(CCBs) used in the acquisition 110.5% of CDI single statement in the 46, , ,806 34, , , , /11/2013 of the Jari end (-) Issuance costs CEJA - - (83) Monthly amortization (15) 0.00 (15) (37) 0.00 (37) Total 97,752 11, ,220 1,258,708 2,201,253 52,383 11, ,152 1,041,547 1,488,168 37

39 Management s notes to the financial statements 17.2 Changes in debentures for the period: Net amount at Net amount at Payment of Payment of Accrued Compound Transaction 12/31/2012 Additions principal interest interest interest Transfers costs Current Debentures , , , , , , Non-current 0.00 Debentures 460, , , (460,626) , , , ,698 - (460,626) - 507,246 Net amount at Net amount at Payment of Payment of Accrued Compound Transaction 12/31/2012 Additions principal interest interest interest Transfers costs Current Debentures 435, (21,829) 56, , , , (21,829) 56, , , Non-current 0.00 Debentures 1,052, , , (460,133) ,270,281 1,052, , ,573 - (460,133) - 1,270, Maturity of current and non-current installments: Maturity Parent company Consolidate d Current , , , , ,972 Non-current , , , , , ,246 1,270,281 Total 984,790 2,201,253 Debentures issued by the Company and its subsidiaries are not convertible into shares. The main sections of the agreements that provide for termination are described below. The full sections can be consulted in the prospectuses for each issue. (i) non-compliance by the Issuer with any monetary obligation in the Indenture, not remedied in the period established by the Indenture; (ii) failure to comply with any obligation related to the principal and/or yield not resolved within the stipulated period; (iii) any spin-off, merger, takeover, or any relevant form of corporate reorganization entailing a transfer of the Issuer's share control, as defined in article 116 of Corporate Law, except (i) if said transfer is to another company of the same economic group as the Issuer, or (ii) a prior consent has been obtained from debenture holders holding at least two thirds (2/3) of the debentures outstanding or (iii) in the cases of spin-off, merger or acquisition there is assurance of the right foreseen in Law 6404, article 231, paragraph 1; (iv) Applicable to EDP Bandeirante, EDP Escelsa and Energest: the Issuer did not maintain the financial index of Gross debt/ EBITDA ratio for Energest or Gross debt/ Adjusted EBITDA for distributors below 3.5 on calculation dates, i.e., June 30 and December 31 each year. Annual Debentureholders Meeting of subsidiaries EDP Bandeirante and EDP Escelsa, held on April 30, 2013, approved the change in definition of EBITDA for the calculation of financial indices included in issuance deeds of debentures outstanding in both distributors. Adjusted EBITDA will mean income before financial expenses, taxes, depreciation and amortization adjusted with assets and liabilities of the Parcel A Cost Variation Memorandum Account A (CVA), over contracting and neutrality of industry charges. (v) a petition for self-bankruptcy, (vi) any settlement, liquidation, dissolution or bankruptcy; (vii) the issuer proposing an extra-judicial recovery plan to any creditor or creditor class, irrespective of this having been requested or any judicial ratification having been obtained; (viii) concession loss, provided that this loss does not exceed 10% of the Company s 2nd issuance net revenue, and if this loss may prejudice compliance with other issuances obligations; (ix) notification of a final and unappealable adverse judgment in a lawsuit, at an amount higher than R$ 40,000 in CEJA, R$ 50,000 in Energest and Cachoeira Caldeirão, and R$ 75,000 in Energias do Brasil and Cachoeira Caldeirão as guarantor, provided that such conviction could jeopardize the faithful fulfillment of the obligations; (x) applicable to EDP Bandeirante and EDP Escelsa: accelerated maturity or payment default of any monetary obligation Bandeirante may be subject to, either in the local or the international market, at a unit amount or accumulated amount exceeding R$40,000 that may be proven to impair the faithful fulfillment of obligations assumed by Bandeirante in the Debenture Deed; The first issue of debentures in sub CEJA occurred in October 2011, maturing in October This commitment will be refinanced upon maturity and refinancing work on June 30, 2013 is being analyzed by the Company s management. On June 30, 2013, the Company and the subsidiaries EDP Bandeirante, EDP Escelsa, Energest, CEJA and Cachoeira Caldeirão, were in full compliance with all the restrictive clauses of the covenants in the debenture contracts. 38

40 Notes to the interim accounting information Loans, financing and debt charges Composition of balance of Loans, financing and debt charges Charges 12/31/2012 Principal Charges Principal Company Contracted amount Contracting date Amount released Contract term Purpose Covenants Debt cost Payment method Current Non-current Current Non-current Total Current Non-current Current Non-current Total Foreign currency EIB - European Investment Bank (-) EIB - Transaction cost EDP Bandeirante EUR 45,000 2/17/2012 EUR 15,000 EDP Bandeirante (110) 2/17/2012 (110) Expansion and reinforcement of the electrical network of Bandeirante's distribution area, for maintenance and 02/19/2012 to supply quality improvement and for reducing system Gross debt in relation to 02/17/2018 losses. EBITDA ratio equal or below 3.5 Libor % p.a. 02/19/2012 to 02/17/ Payment at the end of contract and interest (sixmonthly) ,786 44, ,064 40,507 Monthly amortization of transaction cost (84) (84) (93) (93) EIB - European Investment Bank EDP Escelsa EUR 45,000 2/17/2012 EUR 15,000 Local currency EDP Eletrobrás Reluz - ECF 2617/07 Bandeirante 608 4/9/ EDP Eletrobrás Reluz - ECF 2656/07 Bandeirante 3,911 12/12/2007 3,594 EDP Eletrobrás Reluz - ECF 2657/07 Bandeirante 10,036 12/12/2007 9,919 EDP Eletrobrás Reluz - ECF 2658/07 Bandeirante 2,946 12/12/2007 2,449 EDP Eletrobrás Reluz - ECF 2779/09 Bandeirante 3,517 3/18/2010 2,651 EDP Eletrobrás Reluz - ECF 2800/09 Bandeirante 3,392 5/27/2010 2,506 EDP Eletrobrás LPT - ECFS 019/04 Bandeirante 11,523 5/28/2004 9,342 EDP Eletrobrás LPT - ECFS 184/07 Bandeirante 12,359 6/25/ ,015 Expansion and reinforcement of the electrical network of 02/19/2012 to Escelsa's distribution area, for maintenance and supply Gross debt in relation to 02/17/2018 quality improvement and for reducing system losses. EBITDA ratio equal or below 3.5 Libor % p.a. 05/30/2008 to 04/30/2013 Reluz Program - Municipality of Aparecida/SP - 5% p.a % p.a (mgt. fee) 03/30/2009 to 02/28/2014 Reluz Program - Municipality of Taubaté/SP - 5% p.a % p.a (mgt. fee) 05/30/2010 to 04/30/2015 Reluz Program - Municipality of Guarulhos/SP - 5% p.a % p.a (mgt. fee) 03/30/2009 to 02/28/2014 Reluz Program - Municipality of Suzano/SP - 5% p.a % p.a (mgt. fee) 08/30/2012 to 07/30/2017 Reluz Program - Municipality of Guaratinguetá/SP - 5% p.a % p.a (mgt. fee) 07/30/2012 to 07/30/2017 Reluz Program - Municipality of Mogi das Cruzes/SP - 5% p.a % p.a (mgt. fee) 08/30/2006 to 07/30/2016 Luz para Todos (Light for All) Program - 5% p.a. + 1% p.a. (mgt. fee) 11/30/2009 to 10/30/2019 Luz para Todos (Light for All) Program - 5% p.a. + 1% p.a. (mgt. fee) Payment at the end of contract and interest (sixmonthly) ,786 44, ,065 40, ,488 88, ,036 80,922 Monthly principal and interest Monthly principal and interest Monthly principal and interest 21-2,167 1,666 3, ,000 2,667 4,667 Monthly principal and interest Monthly principal and interest ,691 2, ,965 2,516 Monthly principal and interest ,619 2, ,881 2,409 Monthly principal and interest 17-1,154 2,219 3, ,065 2,752 3,817 Monthly principal and interest 42-1,423 7,006 8, ,313 7,663 8,976 Banco do Brasil and Santander - Bank Credit Bill Banco do Brasil - Commercial credit note EDP Bandeirante 102,000 12/5/ ,000 EDP Bandeirante 30,000 6/22/ ,000 06/05/2007 to Gross debt in relation to EBITDA ratio equal or below 12/05/2013 Working capital % of CDI 06/22/2011 to 06/06/2014 Working capital - 100% of CDI Annual principal and interest (six-month period) ,400-20, ,400-20,497 Principal and interest in single statement in the end 5,658-30,000-35,658-4,476-30,000 34,476 BNDES - Banco do Brasil EDP Bandeirante 35,513 12/27/ ,513 07/15/2008 to 06/15/2014 Investment Program in May 2006 Gross debt in relation to EBITDA ratio equal or below % p.a. above TJLP Monthly principal and interest 17-5,937-5, ,937 2,968 8,934 BNDES - Banco Santander EDP Bandeirante 35,513 12/27/ ,513 07/15/2008 to 06/15/2014 Investment Program in May 2006 Gross debt in relation to EBITDA ratio equal or below % p.a. above TJLP Monthly principal and interest 17-5,937-5, ,937 2,968 8,934 BNDES - BB/CALC EDP Bandeirante 153,283 1/29/ ,271 02/17/2010 to 06/17/2019 Programs for investment in electric power generation, distribution and transmission segments. Gross debt in relation to EBITDA ratio equal or below % p.a. and 1.81% to 3.32% p.a. above TJLP Monthly principal and interest ,815 79, , ,864 72,916 93,027 BNDES - BB/CALC EDP Escelsa 164,091 1/29/ ,228 (-) BNDES -CALC - Transaction costs EDP Escelsa (205) 1/29/2009 (205) Eletrobrás Reluz - ECF 2481/05 EDP Escelsa 1,230 9/30/ Eletrobrás Reluz - ECF 2488/05 EDP Escelsa 261 7/12/ Eletrobrás Reluz - ECF 2500/05 EDP Escelsa 380 7/12/ Eletrobrás LPT - ECFS 031/04 EDP Escelsa 30,968 5/21/ ,729 Eletrobrás LPT - ECFS 106/05 EDP Escelsa 50,304 11/20/ ,114 Eletrobrás LPT - ECFS 181/07 EDP Escelsa 75,764 6/25/ ,821 Eletrobrás LPT - ECFS 258/09 EDP Escelsa 56,737 8/28/ ,021 02/17/2010 to Programs for investment in electric power generation, Gross debt in relation to 4.5% p.a. and 1.81% to 3.32% 05/15/2017 distribution and transmission segments. EBITDA ratio equal or below 3.5 p.a. above TJLP 02/17/2010 to 05/15/ /30/2012 to 12/30/2016 Reluz - Program - Municipality of Viana/ES 5% p.a. +1.5% p.a. (mgt. fee) 12/30/2008 to 11/30/2013 Reluz Program - Municipality of Alfredo Chaves/ES - 5% p.a. +1.5% p.a. (mgt. fee) 12/30/2008 to Reluz Program - Municipality of Santa Maria de 11/30/2013 Jetiba/ES - 5% p.a. +1.5% p.a. (mgt. fee) 08/30/2006 to 07/30/2016 Luz para Todos (Light for All) Program - 5% p.a % p.a (mgt. fee) 05/30/2008 to 04/30/2018 Luz para Todos (Light for All) Program - 5% p.a % p.a (mgt. fee) 04/30/2010 to 04/30/2020 Luz para Todos (Light for All) Program - 5% p.a % p.a (mgt. fee) 01/30/2012 to 12/30/2021 Luz para Todos (Light for All) Program - 5% p.a % p.a (mgt. fee) Monthly principal and interest ,331 81, , ,693 88, ,177 Monthly amortization of transaction cost - - (26) (34) (60) - - (30) (45) (75) Monthly principal and interest Monthly principal and interest Monthly principal and interest Monthly principal and interest 37-2,533 4,871 7, ,338 6,040 8,378 Monthly principal and interest 92-4,064 14,381 18, ,752 16,257 20,009 Monthly principal and interest 157-4,907 26,421 31, ,529 28,685 33,214 Monthly principal and interest 73-1,844 12,767 14, ,702 13,617 15,319 Banco do Brasil and Santander - Bank Credit Bill EDP Escelsa 40,400 2/9/ ,400 08/09/2007 to 02/10/2014 Working capital Gross debt in relation to EBITDA ratio equal or below % of CDI Annual principal and interest (six-month period) 224-8,080-8, ,134 8,080 8,080 23,758 11/29/2010 to Gross debt in relation to Principal and interest in single statement at the end Banco do Brasil - Commercial credit note EDP Escelsa 135,000 6/24/ ,000 05/29/2015 Working Capital EBITDA ratio equal or below % of CDI 2,225 34,010 7, , ,235 1,919 30,295 7, , ,714 05/27/2011 to Principal and interest in single statement at the end Banco do Brasil - Commercial credit note EDP Escelsa 45,000 5/27/ ,000 05/9/2014 Working capital - 100% of CDI 8,921-45,000-53, ,000 45,000 (-) Banco do Brasil - Commercial credit note - Transaction costs EDP Escelsa (2,025) 6/24/2010 (2,025) 29/05/ Cost (710) (710) - - (392) (517) (909) 07/15/2008 to Investment Program in expansion, modernization and improvement of the performance of the power distribution Gross debt in relation to Monthly principal and BNDES - Banco do Brasil EDP Escelsa 35,358 12/27/ ,160 06/15/2014 network. EBITDA ratio equal or below % p.a. above TJLP interest 16-5,545-5, ,545 2,773 8,345 07/15/2008 to Investment Program in expansion, modernization and improvement of the performance of the power distribution Gross debt in relation to Monthly principal and BNDES - Banco Santander EDP Escelsa 35,358 12/27/ ,160 06/15/2014 network. EBITDA ratio equal or below % p.a. above TJLP interest 16-5,545-5, ,545 2,773 8,345 10/04/2012 to Payment at the end of contract and interest (sixmonthly) Banco do Brasil - Bank Credit Bill EDP Escelsa 90,000 10/4/ ,000 09/24/2014 Financing for the sale of electricity for agribusiness % of CDI - 4,411-90,000 94,411-1,327-90,000 91,327 (-) Banco do Brasil - Bank Credit Bill - Transaction 10/04/2012 to Monthly amortization of costs EDP Escelsa (1,689) 10/4/2012 (1,689) 09/24/ transaction cost - - (847) (213) (1,060) - - (842) (637) (1,479) 02/13/2013 to Principal and interest in single statement in the end Banco do Brasil - Bank Credit Bill 21/ EDP Escelsa 68,000 2/13/ ,000 02/03/2015 Working capital % and 98.5% of CDI of contract - 1,789-68,000 69, /13/2013 to Monthly amortization of (-) Transaction cost EDP Escelsa 1,273 2/13/2013 1,273 02/03/ transaction cost (1,023) (1,023) Banco do Brasil - Bank Credit Bill Energest 48,000 2/20/ ,000 Credit Note - Banco Alfa Energest 34,000 1/1/ ,000 (-) Transaction cost Energest 210 1/1/ /20/2011 to Deployment of Small Hydroelectric Plant (PCH) of Santa Gross debt in relation to 02/20/2015 Fé. EBITDA ratio equal or below % of CDI 01/01/2013 to 06/10/2013 Working capital - 115% and % of CDI 01/01/2013 a 06/10/ Annual principal and interest (six-month period) 511-9,600 9,600 19, ,600 19,200 29,573 Principal and interest in single statement in the end of contract 77-6,000-6, Monthly amortization of transaction cost

41 Notes to the interim accounting information Charges 12/31/2012 Principal Charges Principal Contracted Non-current Non-current Company amount Contracting date Amount released Contract term Purpose Covenants Debt cost Payment method Current assets Current Total assets Current Non-current Current Non-current Total Principal and interest in the 02/12/2009 a end of contract at the time of renogotiation Santander - CDI Energest 11,864 2/12/ ,864 03/05/2012 Working Capital - 113,50% of CDI Principal and interest in the 02/12/2009 a end of contract at the time of renogotiation Santander - CDI Energest 21,355 2/12/ ,355 03/05/2012 Working Capital - 113,50% of CDI /15/2010 to 4.50% p.a. and 1.92% above Monthly principal and interest BNDES Energest 25,404 11/13/ ,004 05/15/2018 Investment Program - TJLP 25-2,503 9,803 12, ,503 11,055 13,590 Shareholders' equity over total 03/16/2002 to Deployment of hydroelectric plants: Viçosa/ES, São assets higher than or equal to Monthly principal and interest BNDES - BRL Pantanal 55,447 2/18/ ,214 06/16/2012 João/ES and Paraíso/MS. 30%. 4.50% p.a. above TJLP /30/2010 to Monthly principal and interest Eletrobrás Reluz - ECF 1568/97 Costa Rica 5,375 11/4/1997 5,375 05/31/2014 Construction of the Hydroelectric Plant Costa Rica % % p.a. (mgt. fee) i. Rate of coverage of the debt service, greater or equal to /17/2008 to Deployment of the Hydroelectric Power Plant Peixe ii. Restriction for payment of Monthly principal and BNDES Enerpeixe 335,000 5/21/ ,000 01/15/2016 Angelical. dividends. 4.5% p.a. above TJLP interest ,454 89, , , , ,742 i. Rate of coverage of the debt service, greater or equal to /17/2008 to Deployment of the Hydroelectric Power Plant Peixe ii. Restriction for payment of Monthly principal and Banco Itaú Enerpeixe 100,500 5/21/ ,500 01/15/2016 Angelical. dividends. 4.5% p.a. above TJLP interest ,220 27,265 44, ,220 35,875 53,301 i. Rate of coverage of the debt service, greater or equal to /17/2008 to Deployment of the Hydroelectric Power Plant Peixe ii. Restriction for payment of Monthly principal and Bradesco Enerpeixe 83,750 5/21/ ,750 01/15/2016 Angelical. dividends. 4.5% p.a. above TJLP interest ,350 22,721 37, ,350 29,896 44,418 i. Rate of coverage of the debt service, greater or equal to /17/2008 to Deployment of the Hydroelectric Power Plant Peixe ii. Restriction for payment of Monthly principal and Unibanco Enerpeixe 67,000 5/21/ ,000 01/15/2016 Angelical. dividends. 4.5% p.a. above TJLP interest 97-11,480 18,177 29, ,480 23,917 35,535 i. Rate of coverage of the debt service, greater or equal to /17/2008 to Deployment of the Hydroelectric Power Plant Peixe ii. Restriction for payment of Monthly principal and Banco do Brasil Enerpeixe 83,750 5/21/ ,750 01/15/2016 Angelical. dividends. 4.5% p.a. above TJLP interest ,350 22,721 37, ,350 29,896 44,418 BNDES (-) Transaction cost Porto do i. Rate of coverage of the debt service, greater or equal to 1.2. Pecém 705,100 6/10/ ,418 - Implementation of thermoelectric power plant Pecém I. 2.77% p.a. above TJLP Cost Porto do Pecém - 6/10/ Cost i. Rate of coverage of the debt service, greater or equal to 1.2. ii. Rate of coverage of the own capital, greater or equal to 30%. 04/15/2010 to Deployment of Small Hydroelectric Plant (PCH) of Santa iii. Restriction for payment of Monthly principal and interest BNDES - Banco do Brasil Santa Fé 75,633 5/11/ ,633 02/15/2024 Fé/ES. dividends. 1.90% p.a. above TJLP 146-5,679 54,894 60, ,679 57,734 63,589 The adjustment to present value of A, B and C preferred shares, as item 19 of CPC 39 Cumulative receivable shares Investco % p.a. Annual dividends 13,207 27,105-22,556 62,868 7,696 25,379-21,293 54,368 Principal and interest in 12/20/2011 a single statement in the end of contract Banco do Brasil - Cédula de Crédito Bancário Investco 10,000 12/20/ ,000 03/20/2012 Working Capital - 107% of CDI BNDES e outros bancos Investco 300,000 9/21/ ,000 ECE Banco do Brasil - Cédula de Crédito Bancário Participações 360,000 10/26/ ,900 i. Rate of own capital: Shareholders' equity about total assets greater pr equal to 30%. 01/15/2001 a Deployment of the Hydroelectric Power Plant Luis ii. Support minimum cash of R$ 10/15/2012 Eduardo Magalhães - Lajeado 3 million 4.00% p.a. above TJLP 10/26/2011 a 10/13/2013 Implementation of the UHE Jari's construction project % of CDI Monthly principal and interest Principal and interest in single statement in the end of contract i. Rate of coverage of the debt service, greater or equal to 1.20 during the amortization period. ii. Rate of own capital: Shareholders equity over total ECE 12/13/2012 to assets equal or greater than Monthly principal and BNDES Participações 736,807 12/13/ ,000 05/15/2031 Implementation of the UHE Jari's construction project. 25%. 1.86%. above TJLP interest after 06/15/ , , , , ,296 ECE 12/13/2012 to Monthly amortization of (-) BNDES - Transaction costs Participações (1,474) 12/13/2012 (1,474) 05/15/ transaction cost (1,392) (1,392) (1,460) (1,460) 36,446 67, ,312 1,161,283 1,606,356 13,502 68, ,228 1,182,495 1,517,836 Result of swaps VC hedge and EDP debt interest 04/15/2004 a about 97,94% to 118,94% of Banco Citibank Bandeirante rate with BID 11/13/ /15/2012 Hedge against EIB financing. - CDI Three-monthly interest VC hedge and EDP debt interest 04/15/2004 a about 98,00% to 109,70% of Banco JP Morgan Bandeirante rate with BID 3/15/ /15/2012 Hedge against EIB financing. - CDI Three-monthly interest Porto do Citibank Pecém Hedge against EIB financing. - USD 1,8138 MtM Porto do EUR/USD 1,4040; EUR/R$ Pactual Pecém Hedge against EIB financing. - 2,73; USD/R$ 1,9678 MtM VC hedge and EDP debt interest 02/19/2012 to Goldman Sachs Bandeirante rate with BEI 2/9/ /17/2018 Hedge against EIB financing % of CDI Six-monthly interest VC hedge and debt interest 02/19/2012 to Goldman Sachs EDP Escelsa rate with IEB 2/9/ /17/2018 Hedge against EIB financing % of CDI Six-monthly interest , ,608 1, ,620 38,858 67, ,312 1,248,771 1,696,256 16,008 68, ,228 1,262,531 1,600,378 Total Debts are realized at cost and swap results are realized at market prices. 40

42 Management s notes to the financial statements 18.2 Changes in loans and financing for the period: Current Loans and financing Net amount at Monetary and Net amount at Payment of Payment of Interest Interest paid Transaction exchange 12/31/2012 Additions principal interest accrued in Transfers costs variation 269, ,560 (432,653) (36,727) 52,290 (8,583) 220,528 2, , , ,560 (432,653) (36,727) 52,290 (8,583) 220,528 2, ,170 Non-current assets Loans and financing Monetary and Net amount at Interest Interest paid Adjustment to Adjustment to exchange Net amount at 12/31/2012 Additions accrued in Transfers market value present value variation 1,331, ,596 11,933 8,609 (220,528) 650 3,890 6,794 1,316,086 1,331, ,596 11,933 8,609 (220,528) 650 3,890 6,794 1,316, Maturity of current and non-current installments (principal and interest): Maturity Local Foreign Total Current Non-current assets to to to 2032 Type of currency 160,674 2, , , , ,758 2, , , , , , , ,062 70, ,508 49,527 87, , , , , ,621 87, ,976 1,228,598 87,488 1,316,086 Total 1,606,356 89,900 1,696, Post-employment benefits Current Current Non-current assets 12/31/ /31/ /31/2012 BSPS - Reserves to amortize ,075 16, , ,363 Assistance Programs ,464 6,867 Retirement Incentive Aid - AIA ,743 1,742 1,405 1,302 Medical Healthcare and Life Insurance ,639 17, , ,800 Private pension plan Private pension plan - EnerPrev EDP Bandeirante ,554 35, , ,332 Pursuant to CVM Resolution 695/12, post employment benefit liabilities should be accounted for based on the standards contained in CPC 33 (R1). To meet this requirement, the subsidiaries Bandeirante, Escelsa and Energest, hired independent actuaries to conduct an actuarial appraisal of these benefits using the Projected Unit Credit Method. In accordance with CPC 33 (R1) - Employee Benefits, future obligations such as defined benefits assumed by the companies should be recognized in liabilities, net of recognized funds. Current Non-current assets 12/31/ /31/2012 BSPS - Reserves to amortize 16,075 16, , ,363 Assistance Programs ,464 6,867 Private pension plan ,085 16, , ,230 The subsidiary Bandeirante currently maintains retirement and pension supplementation plans for employees and former employees, as follows: 41

43 Management s notes to the financial statements Retirement plans Defined benefit plans and variable contribution plans Benefit Plan PSAP/Bandeirante, which is recorded in the category "Paid-in, Defined benefit and Variable Contribution", started to be managed by EnerPrev as from June 1, Enerprev is a private entity which specializes in complementary private pension plans, and is sponsored by Grupo EDP. Enerprev has the purpose of managing a set of pension plans for the subsidiary Bandeirante's employees and former employees, and the rights and duties of participants and also those of Bandeirante, as provided for in the Regulations of PSAP/Bandeirante. The amount of R$ 164,604 corresponds to the portion of benefits exceeding the plan's assets, which cover 587 employees as at June 30, 2013 The plan has the following characteristics: (i) Settled Complementary Proportional Benefit Plan (BSPS) This corresponds to the employees proportional benefits calculated on the basis of time of service up to March Due to the deficit calculated, the subsidiary Bandeirante has a commitment which is being settled over 240 months from September 1997, based on a percentage of the payroll, subject to revision semiannually to ensure settlement of the balance in the above period. This plan was effective until March 31, 1998 and is a defined benefit type which grants Settled Complementary Proportional Benefits (BSPS) in the form of lifetime income convertible into a pension for plan members registered as at March 31, 1998 in a defined amount proportional to the accumulated years of service up to the said date conditional upon compliance with the regulations. The subsidiary EDP Bandeirante bears total responsibility for covering actuarial shortfalls. (ii) Mixed Benefits Plan DB and DC DB Plan Effective after March 31, A Defined Benefit Plan that grants a lifetime income convertible into a pension proportional to time of service accumulated to March 31, 1998 based on 70% of the monthly average wage over the past 36 months in active employment. In the event of death while the employee is in active service, or disability, the benefits include all of the years of past service (including the accumulated period up to March 31, 1998) and therefore do not include the accumulated period of service after March 31, 1998 alone. The subsidiary EDP Bandeirante and the plan members bear equal responsibility for covering any actuarial shortfalls. DC Plan Implemented in conjunction with the DB Plan, effective after March 31, It is a pension plan that until the time of granting the lifetime income, convertible (or not) into a pension, is a defined contribution plan, not generating any actuarial responsibility on the part of the subsidiary EDP Bandeirante. Only after the act of granting the lifetime income, convertible (or not) into a pension, does the pension plan become a defined benefit one, subjecting EDP Bandeirante to actuarial responsibilities. In accordance with CPC 33 (R1) - Employee Benefits, future obligations such as defined benefits assumed by companies should be recognized in liabilities, net of recognized funds. To meet this requirement, EDP Bandeirante hired independent actuaries to conduct an actuarial appraisal of these benefits using the Projected Unit Credit Method. The actuarial appraisal shows, as at June 30, 2013 that in the case of the defined benefits plans, the present value of the actuarial liabilities net of the fair value of the assets and of unrecognized actuarial losses, shows a deficit, as shown below in the movements during the period of the defined benefit liability recognized in the statement of financial position: Balance as at December 31, ,438 Net expense recognized in the period 6,676 Benefits paid directly by the Company (7,315) Actuarial (gain)/loss 10,805 Balance as at June 30, ,604 Actuarial gains and losses derived from actuarial appraisals are recorded as Other comprehensive income, in the shareholders' equity, and recognized in the period of occurrence. The balance as at June 30, 2013 of actuarial losses, net of Income and social contribution taxes is R$ 80,865 (R$ 73,733 as at December 31, 2012) EDP Escelsa On December 13, 2012, CVM Resolution no. 695, which amended CPC 33 to version (R1), was approved with application beginning as at January 1, Accordingly, at this time past service costs started to be fully recognized in the statement of income during the period in which they occur. EDP Escelsa applied, on a retrospective basis up to 2011, when the event occurred, this change in accounting policy based on CPC 23 - Accounting policies, changes in accounting estimates and errors: Current liabilities Non-current liabilities 12/31/ /31/2012 Retirement Incentive Aid - AIA 1,730 1,730 1,405 1,302 Medical Healthcare and Life Insurance 17,512 17, , ,517 Private pension plan - EnerPrev ,263 19, , ,819 The subsidiary EDP Escelsa currently maintains retirement and pension supplementation plans to employees and former employees and other postemployment benefits, such as medical care, life insurance, Retirement Incentive Aid and other benefits to retirees

44 Management s notes to the financial statements Retirement plans Defined benefit plans and variable contribution plans Plan I - Escelsos structured as a Defined benefit plan, managed by EnerPrev - Previdência Complementar of the Grupo EDP - Energias do Brasil and registered with the National Register of Benefit Plans (CNPB) and in the National Superintendency of Private Pension Plans (PREVIC). The Funding Plan is sustained by contributions of the sponsor and the participants, with the sponsor s contributions proportionate to those of the participants, pursuant to the Benefot Plan Regulations. Plan II - Escelsos structured as a Variable Contribution plan, managed by EnerPrev-Previdência Complementar of the Grupo EDP - Energias do Brasil and registered with the National Register of Benefit Plans (CNPB) of PREVIC. The Funding Plan is sustained by contributions of the sponsor and the participants, with the sponsor s contributions proportionate to those of the participants, pursuant to the Benefot Plan Regulations. The actuarial appraisal as at June 30, 2013 showed that for these pension plans, the fair value of the assets exceeded the present value of the actuarial liabilities as indicated below: 12/31/2012 Present value of total or partly covered liabilities (194,178) (191,146) Fair value of assets 318, ,201 Surplus 124,303 90,055 The surplus in the defined benefit pension plans reduces the risk of an eventual actuarial liability for the subsidiary EDP Escelsa. The subsidiary EDP Escelsa's management did not record this asset as the effective reduction of contributions from the sponsor Escelsa or the reversal of amounts in the future are not assured. As the sponsor company, EDP Escelsa contributes a monthly amount proportional to the contributions of EnerPrev members, in accordance with the conditions established in each benefit plan. EDP Escelsa contributed R$1,485 during the period (R$1,426 on June 30, 2012). This plan has 602 contributors Retirement incentive aid, medical care, life insurance and other benefits to retirees: Defined benefit Retirement Incentive Aid - AIA Benefit to employees hired up to December 31, 1981, payable on termination of the labor contract, irrespective of the reasons for such severance. The AIA guarantees the payment of a benefit, the amount of which is calculated considering, for each employee, the proportion of the period of contribution to the INSS (Brazilian Social Security Service) up to October 31, 1996, the employee s salary and the INSS benefit as at October 31, Medical care, life insurance and other benefits to retirees - Coverage for medical and dental care, medication, life insurance, and in proven cases, existenceof dependents with special needs, corresponding to 50% of the minimum salary of the subsidiary EDP Escelsa. The actuarial evaluation carried out as at December 31, 2012 determined a present obligation for defined benefit plans, as shown below in the movements during the period of the defined benefit liability recognized in the statement of financial position: Balance as at December 31, ,061 Net expense recognized in the period 19,295 Benefits paid directly by the Company (8,839) Actuarial (gain)/loss 162 Balance as at June 30, , Investco Actuarial gains and losses derived from actuarial appraisals are recorded as Other comprehensive income, in shareholders' equity, and recognized in the period of occurrence. The balance as at June 30, 2013 of actuarial losses, net of Income and social contribution taxes is R$ 208,842 (R$ 208,735 as at December 31, 2012). The subsidiary Investco currently maintains retirement and pension supplement plans for employees and former employees and benefits from Medical care, based on Law 9656/ Medical care - Law 9656/98: Defined benefit Current Non-current assets 12/31/ /31/2012 Medical care - Law 9656/98: , Private pension plan - EnerPrev , Pursuant to Law 9656/98, employees who pay a pre-determined monthly contribution for the health care insurance plan are entitled to continue as part of a similar plan, in the event of dismissal or retirement, for a determined period of time, in accordance with legislation relating to health care insurance plans. The subsidiary Investco's current model, signed on April 14, 2005 with Unimed, falls under this legislation. The actuarial evaluation carried out as of June 30, 2013 determined a present obligation for defined benefit plans, as shown in the reconciliation of plan obligations: Balance as at December 31, Net expense recognized in the period 106 Actuarial (gain)/loss (3) Balance as at June 30, ,079 Actuarial gains and losses derived from actuarial appraisals are recorded as Other comprehensive income in shareholders' equity, and recognized in the period in which they occur. The balance as at June 30, 2013 of actuarial losses, net of Income and social contribution taxes is R$ 252 (R$ 254 as at December 31, 2012). 43

45 Management s notes to the financial statements 19.4 Energest The subsidiary Energest currently maintains retirement and pension supplementation plans for employees and former employees and provide other postemployment benefits, such as medical care and other benefits to retirees Complementary retirement pension plans Defined benefit plans and variable contribution plans The subsidiary Energest is the sponsor of the complementary retirement and pension plans, managed by EnerPrev since October 2008, the current managing entity of pension plans so far managed by Fundação Escelsa de Seguridade Social (ESCELSOS), a closed, non profit private pension plan entity responsible for managing a group of pension plans for the Company's employees and former employees, through two benefit plans: Benefit Plan I of the defined benefit type and Benefit Plan II of the variable contribution type, convertible into the defined benefit type upon conversion to lifetime income. The subsidiary Energest is the sponsor of the complementary retirement and pension plans, managed by Fundação Enersul, a closed, non profit private pension plan entity responsible for managing a group of pension plans for the Company s employees and former employees, through two benefit plans: Benefit Plan I of the defined benefit type and Benefit Plan II of the variable contribution type, convertible into the defined benefit type on conversion to lifetime income. The actuarial appraisal as at June 30, 2013 showed that for these pension plans, the fair value of the assets exceeded the present value of the actuarial liabilities as indicated below: 12/31/2012 Present value of total or partly covered liabilities (1,619) (1,516) Fair value of assets 2,921 2,829 Surplus 1,302 1,313 The surplus in the defined benefit pension plans reduces the risk of an eventual actuarial liability for the subsidiary Energest. Energest s management has not recorded this asset due to the uncertainty of an effective reduction in the Sponsor s contributions or of future reimbursement. In its function as sponsor, the subsidiary Energest makes a monthly payment proportional to the members contributions to these plans, as established in each benefit plan. The subsidiary Energest contributed R$ 77 during the period (R$ 93 as at June 30, 2012) Retirement incentive aid, medical care and other benefits to retirees: Defined benefit On December 13, 2012, CVM Resolution no. 695, which amended CPC 33 to version (R1), was approved with application beginning as at January 1, Accordingly, at this time past service costs started to be fully recognized in income during the period in which they occur. Energest applied, on a retrospective basis up to 2010, when the event occurred, this change in accounting policy based on CPC 23 - Accounting policies, changes in accounting estimates and errors: Current Non-current 12/31/ /31/2012 Retirement Incentive Aid - AIA Medical Healthcare and Life Insurance ,703 6,326 Private pension plan - EnerPrev ,703 6,326 Retirement Incentive Aid - AIA Benefit to employees hired up to December 31, 1981, payable on termination of the labor contract, irrespective of the reasons for such severance. The AIA guarantees the payment of a benefit, the amount of which was calculated considering, for each employee, the proportion of the period of contribution to the INSS (Brazilian Social Security Service) up to October 31, 1996, the employee s salary and the INSS benefit as at October 31, Medical care and other benefits to retirees - Medical care, dental care, medicines, and when it is proved that there is a special dependent, a benefit corresponding to 50% of Subsidiary Energest minimum salary. The actuarial evaluation carried out as at December 31, 2012 determined a present obligation for defined benefit plans, as shown in the reconciliation of plan obligations: Balance as at December 31, ,446 Net expense recognized in the period 398 Benefits paid directly by the Company (17) Actuarial (gain)/loss (3) Balance as at June 30, ,824 Actuarial gains and losses derived from actuarial appraisals are recorded as Other comprehensive income, in the shareholders' equity, and recognized in the period of occurrence. The balance as at June 30, 2013 of actuarial losses, net of Income and social contribution taxes is R$ 2,633 (R$ 2,635 as at December 31, 2012) EnerPrev Pension plans of the defined contribution type EnerPrev is a closed, non profit private pension plan entity and was created at the end of 2006 in order to manage the pension plans of companies within Grupo EDP centrally. EnerPrev manages its own benefit plan of the Defined Contribution type recorded in the CNPB - National Register of Benefit Plans at the National Superintendence for Complementary Pension Funds (PREVIC) and the Company and its subsidiaries manage a contracted PGBL (Free Benefit Generating Plan) through Bradesco Vida e Previdência S.A., not generating any actuarial liability for the Company and its subsidiaries. The Funding Plan is sustained by contributions of the sponsor and the participants, with the sponsor s contributions proportionate to those of the participants, pursuant to the Benefot Plan Regulations. As sponsors of these types of plans, Energias do Brasil contributed R$ 421 during the period (R$ 337 as at June 30, 2012) and the companies of Grupo EDP Energias do Brasil contributed R$ 1,874 during the period (R$ 1,298 as at June 30, 2012). This plan has the adhesion of 59 (*) Company employees and 806 (*) subsidiaries' employees. (*) Not reviewed by independent auditors. 44

46 Management s notes to the financial statements 20 Regulatory and industry charges Accounts payable related to charges established in the electricity industry legislation are as follow: Balance on 12/31/2012 Additions Monetary restatement Payments Write-off Balance on Note Share of Global Reversion Reserve - RGR 6,791 2, (4,583) (1,772) 3,181 Quota of Fuel Consumption Account (CCC) 14,033 14, (28,066) Interest on reversal fund (438) Energy Development Account - CDE 20,395 32, (47,335) ,387 Financial Compensation for the Use of Water Resources 7,735 19, (22,638) ,838 Tariff charges (ECE/ EAEEE) 31, (60) ,665 Research and development - R&D ,793 17, (10,968) (5,123) 79,995 Energy Efficiency Program ( PEE ) ,978 9, ,003 Inspection rate - ANEEL 1,206 7, (7,155) ,195 Other charges 2, (2,462) Total 222, , (123,705) (6,895) 196,337 Current 205, ,455 Non-current assets 17,071 5,882 Total 222, , Research and Development ( P&D ) and Energy Efficiency Program ( PEE ) Expenditures on R&D and PEE made by the subsidiaries is calculated under the terms of the industry legislation, of the electrical energy concession contracts and is regulated by ANEEL Normative Resolution nºs 316/08, applied until September 2012 and altered by Resolution nº 504/12, referring to R&D and 300/08, applied until May 2013 and amended by Normative Resolution 556/13, regarding the Energy Efficiency Program. Subsidiaries must apply 1% of the net operating income adjusted in accordance with the criteria defined by ANEEL, recording the liability amount monthly, on an accruals basis. Liabilities are restated monthly by the variations of the SELIC rate up to the month of realization of the expenses, which are allocated under the heading of Services in progress (Note 11.3), and are written off upon the conclusion of the R&D and energy efficiency projects. 21 Provisions Current and non-current Current Non-current Current Non-current Note 12/31/ /31/ /31/ /31/2012 Provision for civil, tax and labor contingencies ,138 6,429 37,409 31,569 12,819 14, , ,024 Environmental licenses ,011 9,768 6,778 9,404 Contingent consideration ,881 29, Total 6,138 6,429 37,409 31,569 54,711 53, , , Provisions for civil, tax and labor contingencies and restricted deposits current and non-current The Company and its subsidiaries are parties to lawsuits and administrative proceedings in several courts and with government bodies arising from the normal course of its operations, involving tax, labor, civil and other issues Risk of probable loss Based on information from its legal advisors and the analysis of pending lawsuits, the management of the Company and its subsidiaries have constituted provisions considered sufficient to cover losses estimated as probable for ongoing lawsuits, as follow: Liabilities Write-offs Judicial deposits Balance on Price-level Balance on Instances 12/31/2012 Additions Reversals restatement 12/31/2012 Labor 1st, 2nd and 3rd 11 1, ,084 1,889 1,882 Other 37,987 4,842 (3,975) 2,609 41, Total 37,998 6,718 (3,975) 2,806 43,547 1,889 1,882 Assets Current 6,429 6,138 Non-current assets 31,569 37,409 Total 37,998 43,547 Liabilities Write-offs Assets Judicial deposits Labor Civil Tax Other Total Current Non-current asse Total Instances Balance on 12/31/2012 Additions Payments Reversals Price-level restatement Balance on 12/31/2012 1st, 2nd and 3rd 63,176 45,326 (9,646) (7,905) 6,313 97,264 27,593 28,334 1st, 2nd, 3rd and Mgt 62,317 6,175 (12,581) (3,437) 4,745 57,219 26,317 27,280 1st, 2nd, 3rd and Mgt 7, (22) 5 7,978 4, ,624 4,842 (968) (3,975) 3,323 54, ,112 56,343 (23,195) (15,339) 14, ,307 57,931 56,609 14,088 12, , , , ,307 45

47 Management s notes to the financial statements Labor EDP Bandeirante Lawsuits have been filed corresponding to the periods after January 1st, 1998 as per the agreement for the partial spin-off of Eletropaulo - Eletricidade de São Paulo S.A. Subsequently, pursuant to the Partial Spin-off Agreement of the EDP Bandeirante on October 1st, 2001, each concessionaire (EDP Bandeirante and Piratininga) is responsible for the liabilities corresponding to the employees allocated to the respective regions taken over by each Company. Responsibility for corporate lawsuits will be taken on according to the percentage proportion of the owners of equity (Bandeirante and Piratininga) as determined in the respective spin-off agreement. The balance provided for as at June 30, 2013 is R$ 20,799 (R$18,676 as at December 31, 2012). EDP Escelsa Among several labor claim lawsuits, we emphasize 28 collective lawsuits, involving several employees who question the changes made in the job and salary plan from 2002 to On June 27, 2013 an agreement was reached in the aforementioned proceedings in the amount of R$ 21,528, pending approval of by the Judge of the 4th Labor Court of Vitória. Due to said agreement, a provision in the amount of R$ 21,528 was formed. Energest, Investco, Escelsapar, Enerpeixe, EDP Escelsa, EDP Bandeirante and EDP - Energias do Brasil Refers to several lawsuits that, in general, relate to overtime payment, salary equalization, joint responsibility involving service providing companies, indemnity for pain and suffering/ property damage, and pension supplements, among others. The balance provided for as at June 30, 2013 is R$ 74,439 (R$ 44,500 as at December 31, 2012) Civil EDP Bandeirante Refers mainly to claims for reimbursement of amounts paid in the form of tariff increases by industrial consumers due to the application of DNAEE Ordinances 38/86 and 45/86 (the Cruzado Plan), in force from March to November of that year. Original values are restated based on the system used by the Judiciary. The balance as at June 30, 2013 is R$ 38,757 (R$ 37,158 as at December 31, 2012). Proceedings brought by White Martins, namely: Lawsuit nº , in progress at the 10th Civil Court of the Central Forum of the Judiciary District of Rio de Janeiro, discussing the existence of impacts resulting from administrative rulings 38/86 and 45/86 of the dissolved DNAEE, on electrical power consumption tariffs for the period from September 2000 onwards. In April 2010, the Company complied with a legal determination of substitution of the letter of guarantee by a judicial deposit amounting to R$60,951 and in June 2011, a complement of judicial deposit was made amounting to R$10,627. The Company submitted various pronouncements and appeals targeting the suspension of the exaction of the amount, and to reverse the determination of the deduction of the percentage of 16.66% on the monthly bills of White Martins, until the release (June 8, 2011), in payment, of the amount of R$60,951 deposited initially, was authorized without the provision of collateral. On June 10, 2011, White Martins obtained this deposit, monetarily restated to R$66,072. Notwithstanding the raising of the aforesaid deposit, the amount of R$10,627 remains on deposit with the court, and there are also appeals pending before the Court of Appeals of Rio de Janeiro and the Superior Court of Justice discussing the matter. The accounting record was presented in order to reduce the judicial deposit against a decrease in the provision made for this contingency. The remaining balance as at June 30, 2013 is R$ 15,265 (R$13,994 as at December 31, 2012). EDP Escelsa Refer mainly to claims for reimbursement of amounts paid in the form of tariff increases by industrial consumers due to the application of DNAEE Ordinances 38/86 and 45/86 (the Cruzado Plan), in force from March to November of that year. Original values are restated based on the system used by the Judiciary. The balance as at June 30, 2013 is R$ 2,409 (R$2,644 as at December 31, 2012). Investco Indemnities The lawsuits of a civil nature - indemnities refer largely to the indemnities claimed by parties that consider themselves affected by the filling of the LajeadoHydroelectric Power Plant reservoir or that intend to increase the indemnities received from the Company on account of the aforesaid filling. Expropriations Refer to civil lawsuits, resulting from indemnification as for expropriation proposed by the company to fill reservoir of UHE Lajeado, in which there is a difference between the amount deposited by the Company and the amount estimated by the expropriated. The balance of judicial deposits as at June 30, 2013 and December 31, 2012 was R$14,305 (R$ 14,209 as at December 31, 2012) and was recorded as the item Construction in service (Note 14) Tax EDP Bandeirante The subsidiary EDP Bandeirante is facing lawsuits related to VAT on electricity bills, which are classified as probable losses. The balance as at June 30, 2013 is R$ 4,285 (R$4,285 as at December 31, 2012). There is also an administrative proceeding involving a requirement relating to the supposed use of undue ICMS credits, originating from the reversal of debt from canceled invoices. The balance as at June 30, 2013 is R$ 222 (R$219 as at December 31, 2012). Escelsa Participações The National Social Security Institute (INSS) issued a notification demanding social security contribution for disregarding the company's classification of certain service providers as independent workers and other legal entities, with the argument that there are employment relationships between the service providers and Escelsa Participações. The provision recorded is R$2,474 (updated through June 30, 2013) and the lawsuit is awaiting a court decision. As at December 31, 2012, this allowance was R$2,446. EDP Escelsa The subsidiary EDP Escelsa is party to litigation regarding claims for service taxes and urban property taxes, which are classified as probable losses, whose provision, updated through June 30, 2013 is R$ 274. As at December 31, 2012, this allowance was R$ 321. This subsidiary is also challenging a fine charged by the Social Security Institute (INSS), for which a reserve of R$723 has been recorded, and the proceeding is pending judgment by the Administrative Council of Tax Appeals (CARF). The provided amounts are restated up to June 30, As at December 31, 2012, this allowance was R$

48 Management s notes to the financial statements Other EDP Energias do Brasil For the Company, the proceedings classified as Other refer mainly to the commitments made as covenants in the exchange process of the control shares of Enersul with the control shares of Investco formerly belonging to Grupo Rede Energia S.A., relative to the lawsuits of various types filed against Enersul, the generating events of which occurred in periods when the control of Enersul was exercised by the Company. The balance on June 30, 2013 is R$ 41,463 (R$37,987 as at December 31, 2012). EDP Bandeirante and EDP Escelsa For the subsidiaries Bandeirante and Escelsa, part of the balance of this account includes notices of infraction published by ANEEL during an inspection proceedings that are in the appeals phase, amounting to R$6, Risk of possible loss There are ongoing labor, civil and tax proceedings, losses on which have been deemed as possible. These items, which are periodically reassessed, not requiring the constitution of provisions in the interim accounting information, are as follows: Labor Civil Tax Other Total Instances 1st, 2nd and 3rd 1st, 2nd, 3rd and Mgt 1st, 2nd, 3rd and Mgt Assets Judicial deposits Assets Judicial deposits 12/31/ /31/ /31/ /31/2012 1, , ,410 7,540 6,117 4,760 4, , ,838 9,458 7,990 83,813 82,689 5,376 5, , ,625 16,949 15,912 18,150 24, ,702 31, , ,919 5,787 5,668 1,182,395 1,184,298 33,947 30,019 Among the main claims where losses are deemed as possible, the highlights are as follow: Labor EDP Escelsa Refers to several lawsuits disputing, among other issues, overtime payments and hazardous work and reintegration. The estimated amount as at June 30, 2013 is R$ 57,018 (R$ 71,689 as at December 31, 2012) Civil EDP Bandeirante EDP Bandeirante is a party in lawsuit nº , in progress at the 7th Civil Court of the Central Forum of the Judiciary District of Rio de Janeiro, filed by White Martins, discussing the existence of impacts resulting from administrative rulings 38/86 and 45/86 of the dissolved DNAEE, on electrical power consumption tariffs for the period from December 1986 to September On September 23, 2011, a sentence unfavorable to the Company was rendered, accepting the request by the plaintiff plus inflation and late interest as at June 1, Bandeirante filed an appeal against this decision, which was partially granted for the purpose of limiting the sentencing of Bandeirante to the validity period of Administrative Ruling no. 153/86 (in force until March 1987). In view of this decision, the Company and White Martins filed motions for clarification that were rejected. Currently, judgments on appeals filed by both parties with the Higher Court of Justice are still awaited. It is important to emphasize that there is an understanding in the higher courts to the effect that the amounts paid are only refundable in the freeze period, a period that is not discussed in this lawsuit, for which reason the degree of risk remained possible. The estimated amount as at June 30, 2013 is R$ 82,924 (R$76,017 as at December 31, 2012). EDP Bandeirante is a party to public civil action No , being processed by the 3rd Civil Court of the Central Judicial District of Belo Horizonte, filed by the Collective Interest Defense Association (ADIC), and claiming indemnity for material damages arising from the tariff adjustment (Parcel A). The Company is awaiting a decision by the Public Prosecution Office on the appeals filed by the Public Attorney's Office against the decision determining that the concessionaires would be excluded as defendants. The estimated amount as at June 30, 2013 is R$ 53,467 (R$48,556 as at December 31, 2012). Investco The lawsuits of a civil nature refer mainly to the compensation claimed by parties that consider themselves affected by the filling of the plant reservoir or that intend to increase compensation received on account of the aforesaid filling, amounting to R$ 93,209 as at June 30, 2013 (R$87,505 as at December 31, 2012). EDP Escelsa The Company is a party to public civil action No , being processed by the 3rd Civil Court of the Central Judicial District of Belo Horizonte, filed by the Collective Interest Defense Association (ADIC), and claiming indemnity for material damages arising from the tariff adjustment (Parcel A). The Company is awaiting a decision by the Public Prosecution Office on the appeals filed by the Public Attorney's Office against the decision determining that the concessionaires would be excluded as defendants. The estimated amount as at June 30, 2013 is R$ 23,798 (R$ 21,608 as at December 31, 2012) Tax EDP Energias do Brasil The Company is a party to administrative discussions related to the Federal Revenue Service not recognizing a corporate income tax (IRPJ) negative balance, determined for the years 1999/2001, originating from a merged company (Magistra Participações S.A.), that totals R$71,779 as at June 30, On December 31, 2012, these lawsuits totaled R$ 70,875. EDP Bandeirante Among the main claims where losses are deemed as possible, the highlight is the discussion at administrative level regarding ICMS credits utilized by EDP Bandeirante in the period from July to December 2003, referring to "Annulment/Return of Sale of electrical Energy" amounting to R$113,901 restated up to June 30, 2013 (R$ 111,498 as at December 31, 2012). EDP Bandeirante has presented its defense and is awaiting judgment. The risk value has substantially increased due to the new adjustment criteria of State Law 13918/2009. The subsidiary also has administrative proceedings relating to the supposed use of undue ICMS credit, originating from the reversal of debt of canceled invoices, amounting to R$ 22,900 through June 30, 2013 (R$ 22,556 as at December 31, 2012). EDP Bandeirante has presented its defense and is awaiting judgment. EDP Bandeirante has other tax contingencies amounting to approximately R$169,189, restated up to June 30, 2013 (R$ 167,977 as at December 31, 2012) referring to the administrative discussion of non-homologated offsets of credits arising from IRPJ, CSLL, PIS and COFINS overpayments in 2001, as a result of the application of COSIT Opinion 26/2002 (taxes on RTE). 47

49 Management s notes to the financial statements EDP Bandeirante filed a lawsuit relating to COFINS for the period 1993 to 1995, in a joinder with AES Eletropaulo. The dispute refers to the right to the future use of the amnesty brought by Provisional Measures nos and , granted to taxpayers that failed to pay taxes as they considered them inappropriate. In the second judgment, the right to amnesty was partially confirmed, excluding the portion concerning the charges of Decree Law The external attorneys sponsoring the lawsuit classified the contingency referring to the charges as a possible loss. On June 30, 2013, the restated amount is R$ 103,165 (R$ 102,485 as at December 31, 2012). The proceedings are currently awaiting the judgment of an Appeal to the Higher Courts. EDP Bandeirante is contesting assessments of the City Hall that requires the payment of a fines for alleged breaches of ancillary obligations related to the installation of electricity poles. The contingency on June 30, 2013 amounts to R$ 31,640 (R$ 21,915 as at December 31, 2012) Other EDP Escelsa The INSS tax authorities issued social security contribution notices on: (i) not considering self-employed and other legal entities, claiming the existence of employment bond between service providers and EDP Escelsa, (ii) the levying of INSS tax on profit sharing and scholarship payments made to employees that are pension plan members. These tax collection notices amount to R$ 7,476 (restated up to June 30, 2013) and are currently awaiting an administrative decision. As at December 31, 2012, this contingency amounted to R$ 7,401. Several Municipal Authorities - EDP Escelsa is discussing in court the collection of ISSQN allegedly levied on services related to the supply of electrical power. Also includes payment demansd on land occupied by posts for the electricity network and public lighting. These lawsuits amount to R$ 9,472 (restated up to June 30, 2013) and are awaiting a decision by the lower court. As at December 31, 2012, this contingency amounted to R$ 9,363. The subsidiary EDP Escelsa also has administrative and court proceedings with regard to tax offsetting issues not ratified by the federal tax authorities, based on credits recognized in court, as well as negative IRPJ and CSLL balances resulting from IRPJ, CSLL, PIS, and COFINS overpayments made in 2001, as a result of applying Opinion COSIT 26/2002 (taxes on RTE) totaling R$ 103,941 as at June 30, As at December 31, 2012, this contingency amounted to R$ 102,670. EDP Comercializadora The subsidiary EDP Comercializadora is discussing in court the levying of ICMS on interstate electrical power sales transactions amounting to R$16,251 (restated up to June 30, 2013) and collateralized by bank guarantees. The proceedings are currently awaiting judgment. The risk value has substantially increased due to the new adjustment criteria of the State of Minas Gerais. As at December 31, 2012, this contingency amounted to R$ 16,165. There are administrative discussions about the collection of IRPJ, CSLL, PIS and COFINS debts referring to 2004/2006, arising from the non accreditation of the offsetting of these tax credits. These proceedings have a value of R$ 13,231 (restated up to June 30, 2013). As at December 31, 2012, this contingency amounted to R$ 13,044. Refer to the contingency described in note Risk of remote loss In addition to this, in the subsidiary companies Bandeirante, Escelsa, Energest, Escelsapar, Investco and Lajeado there are labor, civil and tax related proceedings underway, for which the chances of loss have been estimated as remote, and for these actions the court deposit balances as at June 30, 2013 amount to R$ 26,618 (R$ 29,391 as at December 31, 2012). The subsidiary EDP Bandeirante, through the Energy Trade Association of the State of São Paulo (SindiEnergia) filed two collective injunctions against the Finance Department of the state of São Paulo to obtain a suspension of the effects of Decrees No /10 and 55867/10. Both lawsuits received favorable decisions that have been confirmed until now by the judgment of the appeal in the São Paulo State Court of Justice. Appeals may be filed against said decisions with Higher Courts. The Company and its external advisors classify the case as having a remote likelihood of any unfavorable outcome. The Company and its advisors evaluate the case as remote. On June 30, 2013, according to the terms of the Decrees, the estimated amount is R$ 142,587 (R$ 117,031 on December 31, 2012) Environmental licenses The amount of R$ 17,789 on June 30, 2013 (R$ 19,172 on December 31, 2012) refers mostly to provisions for the costs of providing construction licenses and installing and operating generating power plants, related to the requirements of governmental agencies. These costs are either associated with the Basic Environmental Project or are in addition to it, and their main objectives are reforestation, acquisition and regularization of rural and urban areas, recovery and improvement of roads, electrical and sanitary infrastructures, and the implementation of conservation units. These costs are recognized under the heading of Property, plant and equipment, since they are associated with the Basic Environmental Project, and are therefore treated as power plant costs. The balance of this provision is recognized at the best estimate and monetarily restated based on the general market price index (IGP-M) Contingent consideration As part of the agreement for the acquisition of ECE Participações by CEJA and the transfer of the additional 10% of the concession of the Jari Hydroelectric Power Plant to ECE, contingent consideration amounts were agreed with the former owners. Up to June 30, 2012, CEJA and ECE had paid the amount of R$ 96,011, referring to the extension of the concession agreement, the increase in the plant's capacity, the increase in assured power and approval of the Special Incentive Regime for Infrastructure Development (REIDI). The amounts of R$ 22,718 (CEJA) and R$2,524 (ECE), relating to approval from all the competent Government Authorities and the publication of the fiscal benefit of rate differential due in interstate purchases of machinery, apparatus, equipment, their parts and other materials, as well as imported products without a similar national product (DIFAL), the subject matter of Agreement ICMS no. 53, of July 6, 2001 and R$5,639 (CEJA) relating to the execution by the Company of the CCEAR of 2010 with the respective counterparty relating to 1.99% of the electricity sold at auction 004/2010, remained outstanding. The direct subsidiary ECE Participações is in the pre-operating stage and its increase in deferred income tax and social contribution expenses derives from the reversal of Liabilities and the recognition of Deferred Assets and Pre-operating expenses from 2010 to

50 Management s notes to the financial statements 22 Shareholders' equity 22.1 Capital stock The Company's equity capital is of R$ 3,182,716, represented by 476,415,612 shares, all of which are ordinary registered shares with no par value, with the following main characteristics: Capital stock is exclusively represented by ordinary shares. Each ordinary share will grant the holder the right to one vote on the resolutions of the Company's General Meetings The shares are indivisible in relation to the Company. When the share belongs to more than one person, the rights vested thereupon will be exercised by the joint ownership representative. The issue of beneficiary parts by the Company is prohibited, The Company is authorized to increase the capital by up to the limit of two hundred million (200,000,000) ordinary shares regardless of statutory reforms, by decision of the Board of Directors, which will also be responsible for establishing the terms of the issue, including the price, term and form of its payment; The Company may issue shares, debentures convertible into ordinary shares and subscription bonuses within the limit of the authorized capital, and At the sole discretion of the Board of Directors, it is possible to exclude or reduce the right of preference in the issues of shares, debentures convertible into shares and subscription bonuses, whose placement is performed through sale at a stock exchange or public subscription, under legal terms, and within the limit of the authorized capital. The composition of the capital stock as at June 30, 2013, and December 31, 2012 is shown as follows: Shareholder Number of shares 12/31/2012 % interest Number of shares % interest Controlling shareholder Energias de Portugal Investments and Services, Sociedad Limitada (1) (2) 168,185, ,185, yes Balwerk - Consult. Econômica e Particip., Soc.Unipessoal Ltda. (1) (2) 74,786, ,786, yes Board members and Directors Treasury shares (4) 840, , Others (3) 232,602, ,602, Total 476,415, ,415, (1) Shareholder with more than 5% of the voting shares. (2) Foreign-owned company. (3) There are 232,602,924 outstanding shares out of the total 476,415,612 that is, around 48.81% of the total quantity of shares. (4) Treasury stock does not have equity rights. Calculation of free float: Number of shares 12/31/2012 % interest Number of shares % interest Number of controlling shares 242,971, ,971, Number of treasury shares 840, , Number of shares from Board members and Directors Total of non-outstanding shares 243,812, ,812, Total shares 476,415, ,415, Total free shares 232,602, ,602, The shares of EDP Energias do Brasil are henceforth included in the Bovespa index On January 7, 2013, the Company notified the market that the stock has been included in the Bovespa index with a share of 0.645%. The new portfolio of Ibovespa is henceforth composed of 69 shares. The Bovespa Index ( Ibovespa ) is one of the most important performance indicators of Brazilian stock market quotes. Its importance lies in the fact that Ibovespa portrays the behavior of the instruments traded on the BM&FBOVESPA index of the listed companies that are most representative of the Brazilian economy. 49

51 Management s notes to the financial statements 22.2 Allocation of net income The Company's dividend policy, pursuant to the 120th meeting of the Board of Directors held on March 5, 2008, proposes the payment of a minimum amount equivalent to fifty percent (50%) of the adjusted net income, calculated in conformity with Article 189 and subsequent articles of the Corporation Law, which can be reduced when required by a legal or regulatory provision or when advisable in view of the financial situation and/or future prospects of the Company. The General and Special Shareholders' Meeting held on April 10, 2013 approved the allocation of net income, with payment of dividends of R$ 324,563 referring to 2012, to be paid throughout Of this amount, R$130,422 refers to Interest on capital attributable to dividends decided and approved in the 175th Board of Directors meeting held on December 26, 2012, to be paid without adjustments, and R$194,140 refers to Dividends to be paid with no adjustment to holders of the Company s ordinary shares Dividends Assets Liabilities Liabilities 12/31/ /31/ /31/2012 EDP Bandeirante 34,819 34, EDP Escelsa 38,099 38, Energest 94,570 23, EDP Comercializadora 38,177 9, Enerpeixe , Investco ,613 13,601 Lajeado 72,303 39, Shareholders - Energias do Brasil , , , ,392 Eletrobras ,915 46,382 Governo de Tocantins ,265 2,903 Furnas Centrais Elétricas S.A ,194 Total 277, , , , , , Reserves 12/31/2012 Capital reserves Goodwill in the incorporation of the parent company 35,348 35,348 Result of the disposal of treasury shares 60,250 60,250 Other capital reserves 48,137 48, , ,540 Other comprehensive income Financial assets available for sale ,612 Cash flow hedge (76,831) (83,976) Deferred IRPJ/CSLL 28,552 26,643 (48,279) (51,721) Profit reserves Legal 175, ,940 Profit retention 1,063,863 1,109,549 Approved additional dividend ,140 Other profit reserves (300,859) (285,207) 938,944 1,194,422 Total 1,034,400 1,287, Reserve for profit The reserve for profit has been constituted pursuant to Article 196 of Law 6404/76 in support of the Company's Capital Expenditure Program as set forth in the capital budgets submitted to the Ordinary General Shareholders' Meetings Other comprehensive income The changes in Other comprehensive income in the period are as follows: Balance on 12/31/2012 Gain Losses Provision IRPJ/CSLL Transfer to profit reserves Balance on Note Actuarial gains and losses - Post-employment benefit plan 19-6 (10,969) 3,728 7,235 - Financial assets available for sale 3, (5,612) 1, Cash flow hedge (55,424) 10, (3,681) 0.00 (48,279) (51,721) 10,832 (16,581) 1,956 7,235 (48,279) 22.4 Non-controlling interests The non-controlling interests correspond to the interests that other shareholders hold in our subsidiaries. The balance includes founders shares issued by Lajeado and belonging to Centrais Elétricas Brasileiras S.A. Eletrobrás Founders' shares The subsidiary Lajeado, at the Extraordinary General Meeting of February 15, 2006, approved the change in the Bylaws, creating 53,210,337 nonconvertible, nominative preference shares carrying no voting rights, that will be entitled to receive dividends 10% higher than the sum attributed to each ordinary share, and 10,000 founders shares, with no par value, tradable and foreign to the capital stock, conferring to their bearers right to potential credit against the subsidiary Lajeado, in an amount equivalent to 10% of the annual income determined by the subsidiary Lajeado, in compliance with Law 6404/76. These shares, as well as the founders shares, were fully subscribed and acquired on this date by Eletrobrás. The balance as at June 30, 2013 and December 31, 2012 was R$451,376. The duration of the founders shares is until October 31, 2032, when they will they will be automatically converted into Class A preference shares (Article 14 of the Bylaws) corresponding to 5.084% of the total shares issued by the subsidiary Lajeado (Article 14, Paragraphs 1 and 2 of the Bylaws), if they have not been redeemed. The redemption can occur at any time at the decision of the subsidiary Lajeado until the end of the duration of the founders shares. 50

52 Management s notes to the financial statements 23 Revenues The revenue amounting to R$ 577 (R$ 141 on June 30, 2012) of the parent company refers to agreements on consulting services rendered to EDP Renováveis. Changes in the period MWh (*) R$ 04/01/2013 to 04/01/2012 to 06/30/ /01/2013 to 04/01/2012 to 06/30/2012 Supply (**) Residential 1,390,135 1,340, , ,942 Industrial 995,895 1,054, , ,687 Commercial 858, , , ,863 Rural 189, ,653 36,175 39,580 Government 151, ,146 45,951 48,727 Public lighting 142, ,958 23,878 24,621 Public service 119, ,444 24,227 25,177 Own consumption 3,561 3, (-) Transfer to TUSD - captive customers (473,455) (572,126) Unbilled supply (25,977) (11,988) 3,850,992 3,827, , ,483 Electricity supply 2,109,424 3,100, , ,123 Short-term energy (35,323) 37,705 (9,377) 33,772 Sales , ,170 2,074,101 3,138, , ,065 Total supply 5,925,093 6,965,808 1,112,841 1,028,548 Availability of distribution and transmission system 2,487,764 2,311, , ,102 TUSD - others 2,487,764 2,311, , ,573 TUSD - captive clients , ,127 TUSD - unbilled (2,260) (4,455) TUST (2,143) Revenue from construction ,734 19,140 Other operating income ,139 66,944 Subtotal 8,412,857 9,277,681 1,885,785 1,845,734 (-) Operating income deductions (243,362) (385,401) R & D (12,823) (12,133) Other charges (10,851) (13,767) CCC (81,916) CDE (16,164) (61,184) RGR (1,373) (11,421) PIS/COFINS (201,680) (204,212) ICMS (225) (540) ISS (246) (228) Revenues 8,412,857 9,277,681 1,642,423 1,460,333 (*) Not reviewed by independent auditors. (**) Supply revenue is presented net of ICMS. Changes in the period Nº of consumers (*) MWh (*) R$ 06/30/ /01/2013 to 01/01/2012 to 06/30/ /01/2013 to 01/01/2012 to 06/30/2012 Supply (**) Residential 2,547,825 2,444,428 2,818,420 2,706, , ,685 Industrial 23,506 22,873 1,881,443 2,035, , ,217 Commercial 227, ,927 1,752,172 1,680, , ,685 Rural 170, , , ,048 78,369 73,707 Government 18,886 18, , ,542 93,899 95,636 Public lighting 2,748 2, , ,842 48,136 49,571 Public service 2,498 2, , ,763 50,957 50,940 Own consumption ,322 7, (-) Transfer to TUSD - captive customers (986,739) (1,163,717) Unbilled supply (74,615) (7,141) 2,993,893 2,875,429 7,672,506 7,592,527 1,117,121 1,094,583 Electricity supply 6 8 4,613,017 4,707, , ,390 Short-term energy (444) 189,621 39,864 58,980 Sales , , ,612,573 4,896,974 1,281, ,493 Total supply 2,993,899 2,875,437 12,285,079 12,489,501 2,398,965 2,030,076 Availability of distribution and transmission system ,893,201 4,611,905 1,239,431 1,490,425 TUSD - others ,893,201 4,611, , ,316 TUSD - captive clients ,739 1,163,718 TUSD - unbilled ,182 (1,609) Revenue from construction ,977 83,619 Other operating income , ,418 Subtotal 2,994,135 2,875,613 17,178,280 17,101,406 4,059,202 3,740,538 (-) Operating income deductions (526,002) (768,388) R & D (27,423) (23,785) Other charges (21,703) (27,441) CCC (14,033) (163,833) CDE (32,327) (122,369) RGR (973) (23,611) PIS/COFINS (428,647) (405,806) ICMS (408) (1,099) ISS (488) (444) Revenues 2,994,135 2,875,613 17,178,280 17,101,406 3,533,200 2,972,150 (*) Not reviewed by independent auditors. (**) Supply revenue is presented net of ICMS. 51

53 Management s notes to the financial statements 23.1 Other income In the subsidiaries EDP Bandeirante and EDP Escelsa, there was the inclusion of R$ 50,709 relating to compensation for insufficient generation and R$ 77,427 relating to social tariffs to rural activity, irrigation and water, and sewage and sanitation deducted from the tariff structure from January 24, 2013 with transfer by Eletrobras. 24 Operating expenses Changes in the period 04/01/2013 to 04/01/2012 to 06/30/2012 Sales Operating expenses General and administrative Others Total Total Manageable Personnel, Management and Private pension entity , ,748 9,630 Material Third-party services , ,899 8,912 Depreciation Amortization , ,488 1,465 Allowance for doubtful accounts/net losses (121) Provision for civil, tax and labor contingencies ,248 1,248 2,030 Rents and leases , , Others (9) 2,955 (921) 2,025 2,925 Total (9) 28, ,308 26,228 Accumulated in the period 01/01/2013 to 01/01/2012 to 06/30/2012 Operating expenses General and administrative Sales Others Total Total Manageable Personnel, Management and Private pension entity , ,698 19,756 Material Third-party services , ,080 14,334 Depreciation Amortization , ,976 2,929 Provision for civil, tax and labor contingencies ,743 2,743 2,331 Rents and leases , ,148 1,544 Gains and losses from deactivating and disposing of assets (10) (10) 0.00 Others ,817 (772) 6,045 8,287 Total ,776 1,961 54,737 50,053 Changes in the period Services cost 04/01/2013 to Operating expenses 04/01/2012 to 06/30/2012 Costs of electricity Operation Rendered to third-parties Sales General and administrative Others Total Total Not manageable Electricity purchased for resale Foreign currency - Itaipu 124, , ,073 Local currency 769, , ,777 Electricity network utilization charges 84, , ,614 Inspection rate ,579 3,579 4,005 Financial offsetting ,855 8,855 8, , , , ,021 Manageable Personnel, Management and Private pension entity Material Third-party services Depreciation Amortization Allowance for doubtful accounts/net losses Provision for civil, tax and labor contingencies Rents and leases Gains and losses from deactivating and disposing of assets , , ,171 68, , , ,812 6, , , ,612 84, , , ,028 27, , , ,746 56, , ,115 16, (466) 35,810 35,344 (1,318) , ,851 2, ,701 8,701 8,142 Fair value of indemnifiable financial assets (6,763) (6,763) 0.00 Infrastructure construction costs , ,734 19,140 Others ,629 (29) (32) 11,374 (3,552) 17,390 9, ,210 67,964 10, ,288 34, , ,231 Total 979, ,210 67,964 10, ,288 46,630 1,400,265 1,240,252 52

54 Management s notes to the financial statements Services cost Accumulated in the period 01/01/2013 to Operating expenses 01/01/2012 to 06/30/2012 Costs of electricity Operation Rendered to third-parties Sales General and administrative Others Total Total Not manageable Electricity purchased for resale Foreign currency - Itaipu 238, , ,433 Local currency 1,703, ,703,063 1,200,278 Electricity network utilization charges 173, , ,622 Inspection rate ,159 7,159 7,591 Financial offsetting ,742 19,742 21,188 Cost of raw materials used ,115, ,901 2,141,901 1,770,112 Manageable Personnel, Management and Private pension entity Material Third-party services Depreciation Amortization Allowance for doubtful accounts/net losses Provision for civil, tax and labor contingencies Rents and leases Gains and losses from deactivating and disposing , , , , , , ,430 12, ,603 1, , , , , , ,024 55, , , , , , ,271 26, (466) 41,487 41,021 3, , ,277 5,764 of assets ,147 23,147 (2,023) Fair value of indemnifiable financial assets (12,578) (12,578) - Infrastructure construction costs , ,977 83,619 Others , ,597 (12,245) 27,648 27, , ,747 35, ,049 39, , ,565 Total 2,115, , ,747 35, ,049 66,712 2,915,092 2,416, Financial result Changes in the period Accumulated in the period Changes in the period Accumulated in the period 04/01/2013 to 04/01/2012 to 06/30/ /01/2013 to 01/01/2012 to 06/30/ /01/2013 to 04/01/2012 to 06/30/ /01/2013 to 01/01/2012 to 06/30/2012 Financial income Revenue from financial investments 3,560 1,721 3,679 5,253 14,050 11,534 18,096 23,798 Adjustment to present value - Preferred shares , (987) Monetary variation and monetary addition from sold energy ,828 19,786 41,129 39,253 Monetary variation and monetary addition from purchased energy (1,313) Swap and hed Swap and hedge operations ,042 6,956 6,042 9,927 Monetary restatement of judicial deposits Monetary restatement of judicial deposits - REFIS ,134 1,034 1,730 2,275 Monetary restatement Piratininga netting of accounts Monetary restatement - loan agreements 3,691 1,695 6,722 3,866 4,214 2,746 7,245 6,126 Monetary variations - domestic currency Monetary variations - foreign currency (1,200) SELIC on taxes and social contributions to offset 1,298 1,372 2,517 3,006 1,793 5,282 3,599 8,718 Discounts obtained , Adjustment to present value (987) (941) Remuneration of preferred shares 671 1,740 1,342 1,740 (761) 2, ,064 Contractual fine (-) Capitalized interest (2,602) 0.00 (3,197) 0.00 Other financial revenue ,464 (2,959) 4,010 4,350 10,391 6,869 16,692 14,495 44,013 46,203 80,220 98,605 Financial expenses Monetary variation and monetary addition from purchased energy (2,707) (3,650) (2,707) (3,718) Interest and fines on taxes (11) (100) (193) (185) Debt charges (17,585) (11) (27,647) (11) (73,838) (59,952) (134,690) (119,880) Monetary variations - domestic currency (1,290) (1,285) (2,612) (2,304) (1,864) (1,462) (3,817) (4,544) Monetary variations - foreign currency (2) 0.00 (2) 0.00 (6,810) (4,279) (6,810) (11,425) Monetary restatement of environmental licenses (114) (717) (270) (916) Interest and fines on ICMS (5,970) (646) (5,970) (652) Adjustment to present value - Preferred shares (799) (3,889) (1,582) Swap and hedge operations , Provision and monetary restatement for civil, tax and labor contingencies (121) 0.00 (197) (1) (5,696) (3,412) (11,064) (9,380) SELIC - Free energy (1,188) (1,277) (2,244) (2,738) Provision for devaluation of securities (7,262) (6,933) (7,262) (8,187) (7,262) (6,933) (7,262) (8,187) Monetary restatements - REFIS (610) (853) (1,190) (1,825) (1,733) (3,570) (3,464) (6,919) Mark-to-market - MTM (1,134) 0.00 (650) 259 Adjustment to present value (1,262) (4,961) (1,262) (4,961) Monetary restatement - loan agreements (2,065) (194) (623) 0.00 Monetary restatement for the use of public property (4,052) (9,887) (10,780) (10,592) Adjustment to present value of the use of public property (2,005) 973 (2,750) (2,359) Post-employment benefits (12,407) (6,732) (24,815) (13,462) (-) Capitalized interest ,793 7,034 20,818 13,688 Other financial expenses (206) (82) (470) (154) (6,569) (4,251) (14,430) (9,486) (27,076) (9,164) (39,380) (12,482) (121,186) (104,815) (216,872) (197,039) Total (16,685) (2,295) (22,688) 2,013 (77,173) (58,612) (136,652) (98,434) 53

55 Management s notes to the financial statements 26 Income and social contribution taxes Changes in the period Accumulated in the period Income tax Social contribution Income tax Social contribution 04/01/2013 to 04/01/2012 to 06/30/ /01/2013 to 04/01/2012 to 06/30/ /01/2013 to 01/01/2012 to 06/30/ /01/2013 to 01/01/2012 to 06/30/2012 Profit before income and social contribution taxes 44,606 38,987 44,606 38, , , , ,475 Rate 25% 25% 9% 9% 25% 25% 9% 9% IRPJ and CSLL (Income tax) (11,152) (9,747) (4,015) (3,509) (33,720) (45,369) (12,139) (16,333) Adjustments to reflect effective rate IRPJ and CSLL on permanent additions and exclusions Donations (192) (122) (68) (44) (382) (245) (137) (88) Non-deductible fines (1) (2) 0.00 (1) (3) (2) (1) (1) Non-deductible expenses (34) (24) (12) (9) (53) (41) (19) (15) Bonuses to employees (146) (29) (53) (10) (228) (73) (82) (26) Equity accounting result 22,595 16,843 8,134 6,063 52,932 57,344 19,056 20,644 Unrecognized deferred income and social contribution taxes (11,070) (6,919) (3,987) (2,490) (18,546) (11,614) (6,678) (4,181) IRPJ and CSLL expenses /01/2013 to Changes in the period 04/01/2012 to 06/30/ /01/2013 to 04/01/2012 to 06/30/ /01/2013 to Accumulated in the period Income tax Social contribution Income tax Social contribution 01/01/2012 to 06/30/ /01/2013 to 01/01/2012 to 06/30/2012 Profit before income and social contribution taxes 120, , , , , , , ,519 Rate 25% 25% 9% 9% 25% 25% 9% 9% IRPJ and CSLL (Income tax) (30,051) (41,066) (10,818) (14,784) (93,778) (112,880) (33,760) (40,637) Adjustments to reflect effective rate IRPJ and CSLL on permanent additions and exclusions Donations (318) (316) (113) (110) (635) (449) (227) (158) Non-deductible losses (254) (28) (92) (10) Non-deductible fines (8) (3) (3) (2) (14) (10) (5) (4) Non-deductible expenses (41) (21) (15) (12) (68) (220) (25) (83) Bonuses to employees (340) (84) (123) (30) (594) (275) (214) (97) Equity accounting result (11,194) 1,139 (4,029) 233 (26,585) (1,037) (9,570) (372) Others 0.00 (592) 0.00 (344) (1) (407) 0.00 (146) Unrecognized deferred income and social contribution taxes (12,667) (6,885) (4,561) (2,477) (18,546) (11,614) (6,678) (4,181) (Addition) Reversal of permanent differences (5,121) (6,028) (1,844) (2,176) (7,570) (10,955) (2,724) (3,944) Adjustments in Corporate Income Tax Return (DIPJ) regarding previous year 4,994 1,025 1, ,369 1,022 1, Adjusted deemed profit 1,000 3, ,497 1,905 8, ,022 Additional corporate income tax PAT Rouanet Law FIA (2) SUDENE/ ADA 13,831 11, ,109 24, IRPJ and CSLL expenses (39,485) (37,183) (19,256) (17,743) (110,591) (103,770) (50,623) (46,159) Effective rate 32.85% 22.64% 16.02% 10.80% 29.48% 22.98% 13.50% 10.22% 54

56 Management s notes to the financial statements 27 Income per share The Company's basic earnings per share for the periods presented is calculated by dividing the net income attributable to the holders of Company ordinary shares by the weighted average number of ordinary shares held by the shareholders. During the reporting period, the Company had no liability financial instruments convertible into Company shares, or transactions that had a dilutive or antidilutive effect on the earnings per share of the period. Therefore, the "basic" earnings per share that was calculated for the period equals the "diluted" earnings per share, in accordance with the requirements of CPC 41. The calculation of "basic and diluted" earnings per share is presented in the table below: Net income (loss) for the period attributable to Company s controlling shareholders Weighted average of the number of common shares with controlling shareholders (thousands) Basic and diluted earnings per share (R$/share) , , , , , , , , Financial instruments In compliance with CPCs 38, 39 and 40 (R1) approved by Resolutions CFC no. 1196/09, 1197/09 and 1399/12 and subsequent alterations, the Company performed a valuation of its financial instruments, including the derivatives, when applicable. General considerations The Company has transactions with financial instruments. The management of these instruments is executed by means of operating strategies and internal controls aiming to ensure credit, liquidity, safety and profitability. The contracting of financial instruments with hedging objectives is performed by means of a periodic analysis of the exposure to the financial risks (foreign exchange, interest rate etc.), which is included in regular risk reports to Management. In compliance with the Financial Risk Management Policy of Grupo EDP, and based on periodic analyses consubstantiated by the risk reports, specific strategies are defined for the mitigation of financial risks, which are approved by Management, for the effective operation of the strategy. The control policy consists of permanent monitoring of the conditions contracted versus the conditions in force in the market through operating systems integrated to the SAP platform. The Company does not make investments in derivatives or any other risk assets on a speculative basis. The results obtained with these operations are in line with the policies and strategies defined by Management The administration of the risks associated with these operations is performed through the application of policies and strategies defined by Management and includes the monitoring of levels of exposure of each market risk, forecasting of future cash flow and the establishment of limits of exposure. These policies also determines that the updating of information in operating systems, as well as the confirmation and effective operation of transactions with the counterparts, shall be performed with the appropriate segregation of duties. Fair value Fair value is the amount for which the asset may be exchanged, or a liability settled, between parties that know the business and that have an interest in making the transaction, without undue advantage to any of the parties. The fair value concept addresses several different measurement methods intended to reliably measure this amount. Some mathematical models have been developed for the purpose. To determine the fair value, the Company projects financial instruments cash flow until the end of operations, considering contract standards, including postfixed rates, and using the future (interbank investment average rate) average DI disclosed by BM&FBovespa as the discount rate. Some carrying amounts are equivalent to the fair value because these financial instruments balances are substantially similar to those that would be obtained had they been traded in the market. Financial instrument transactions are presented in the Company's statement of financial position at their carrying amounts, equivalent to their fair values except for certain loans, financings and debt and debenture charges, which in this case are different from their fair value. Financial assets Current assets Cash and cash equivalents Accounts receivable Related parties Pledges and restricted deposits Financial assets available for sale Non-current assets Accounts receivable Related parties Financial liabilities Current liabiities Suppliers Debentures Non-current liabilities Debentures Related parties Fair value Book value 12/31/ /31/ ,060 99, ,060 99,054 5,806 3,402 5,806 3,402 43,714 10,698 43,714 10, ,932 19,806 6,932 19,806 21,301 20,602 21,301 20, , , , , , , , ,555 5,306 7,897 5,306 7, , , , , , , , , , ,339 55

57 Management s notes to the financial statements Financial assets Current assets Cash and cash equivalents Accounts receivable Consumers and concessionaires Related parties Pledges and restricted deposits Income receivable Financial assets available for sale Non-current assets Accounts receivable Indemnifiable financial assets Consumers and concessionaires Related parties Pledges and restricted deposits Other credits - Derivatives Financial liabilities Current liabilities Suppliers Related parties Debentures Loans, financing and debt charges Use of public property Non-current liabilities Debentures Loans and financing Related parties Use of public property Fair value Book value 12/31/ /31/2012 1,175, ,375 1,175, ,375 5,041 4,530 5,041 4,530 1,169,120 1,252,551 1,169,120 1,252, ,163 24,207 8,163 24,207 4,758 6,150 4,758 6,150 6,932 19,806 6,932 19,806 18,786 21,324 18,786 21, , , , ,278 50,563 40,294 50,563 40, , , , ,232 50,920 48,939 50,920 48,939 19,984 12,594 19,984 12,594 3,425,112 2,828,998 3,425,112 2,828, , , , , , , , , , , , ,236 22,161 21,953 22,161 21,953 1,270,281 1,052,633 1,270,281 1,052,633 1,316,394 1,330,346 1,316,086 1,331, , , , ,140 5,014,470 4,263,301 5,013,919 4,264,819 The additional information on the assumptions used for determining the fair values is disclosed below, taking into account their timing and the weighting of each financial instrument. For Cash and cash equivalents, Management applies its risk policies, and the balance represents the cost plus interest, with immediate liquidity. Under Management's policies, investments are consolidated by investee and credit rating in order to allow the evaluation of the concentration and credit risk exposure. That maximum exposure is also measured considering the shareholders' equity of the Financial Institution. Receivables comprise preferred shares of classes A, B and C, and refer to an issue by the subsidiary Investco, with the condition, stated in Article 8 of that subsidiary's bylaws, that shareholders' rights include a fixed cumulative annual dividend of 3% of their respective ownership interest. Due to this characteristic, these shares were classified as receivable financial instruments as they meet the definition of financial assets, since the subsidiary does not have the right to avoid the remittance of cash or other financial asset to another entity, as determined in item 19 of CPC 39. The estimate of fair value considered the conditions above for the payment of dividends. Annual dividend payment was considered until 2033 (end of the concession of the subsidiary Investco) and discounted to present value at the rate of 8.70% p.a. Subsidiaries EDP Bandeirante and EDP Escelsa recognize an amount receivable from the Concession grantor due to the unconditional right of receiving cash at the end of the concession, as provided for in the contract, as indemnity for the construction services carried out and not received as service provisions related to the concession. These financial assets are recorded at the right's present value and are calculated based on the value of assets pertaining to the concession that will be reversible at the end of concession. For Consumers and concessionaires, the present value of consumer debt installments is calculated based on capital remuneration rates regulated by ANEEL on the tariffs of energy distribution companies (investment remuneration average rate). The counter entry of the adjustments to present value of accounts receivable is against the financial income of the Company. The balance of the pledges and restricted deposits' account is presented at fair value, in compliance with the financing agreements with BNDES and a bank consortium, recognized as part of the agreements' guarantees, as specified in Note 18, and the short-term power transactions in CCEE, and in the noncurrent portion refers basically to deposits of subsidiaries Santa Fé, Pantanal and Enerpeixe pegged to BNDES's debt. Rede Energia group shares are recorded as available for sale and marked to market by means of Bovespa quotations (Note 31). Other credits (Liabilities) - Derivatives, are calculated internally using the discounted cash flow method based in market sources disclosed by BM&FBovespa. They are measured at fair value by means of policies adopted by the Company's management to mitigate the risk of exposure to exchange rates and foreign exchange. Evidencing is described in Note 28.6 for Derivative financial instruments. They are composed by cash flow hedges at EDP Escelsa and EDP Bandeirante. The balance in Trade accounts payable is composed mostly of energy supply agreements and network use charges at rates established in the market regulated by ANEEL. Since that balance is continuously changed, no fair value methods are applied to this balance. 56

58 Management s notes to the financial statements Debentures, loans, financing and debt charges are valued using the pricing model individually applied for each transaction, taking into account future payment flows, based on contractual conditions and discounts to present value at rates obtained through market interest rate curves, based, whenever possible, on information obtained from the BM&FBovespa website. Thus, a security's market value corresponds to its value at maturity (redemption value) brought to present value by the discount factor. The related parties account comprises agreements for cost sharing under ANEEL regulation, and loan agreements without conflicting interest, under real market conditions considering only the due amounts without any additions whatsoever. The amount under the heading Use of public property refers to a financial instrument stated at amortized cost with restatement by the general market price index (IGP-M) incurred through the statement of financial position date. The balances of current and long-term liabilities are stated at present value, considering the project's implied 6% rate which represents the average cost of capital at the time the public property use concession agreements were entered into by subsidiaries Enerpeixe and Investco. Classification of financial instruments: Loans and receivables Fair value through profit or loss Held to maturity 12/31/2012 Available for sale Loans and receivables Fair value through profit or loss Held to maturity Available for sale Financial assets Total Total Cash and cash equivalents , , , ,054 Accounts receivable 27, ,107 24, ,004 Pledges and restricted deposits Financial assets available for , ,806 sale 6,932 19,806 Related parties 266, , , , , , , , ,473 99, , , ,555 Financial liabilities Suppliers Debentures Related parties 12/31/2012 Others at amortized cost Total Others at amortized cost Total 5,306 5,306 7,897 7, , , , , , , , , ,339 12/31/2012 Financial assets Cash and cash equivalents Income receivable Accounts receivable Indemnifiable financial assets Consumers and concessionaires Pledges and restricted deposits Financial assets available for sale Related parties Other credits - Derivatives Loans and receivables Fair value through profit or loss Held to maturity Available for sale Total Loans and receivables Fair value through profit or loss Held to maturity Available for sale ,175, ,175, , ,375 17, ,624 6, ,150 57, ,389 25, , , , , ,278 1,286, ,286,873 1,289, Total 1,289, , , , , ,932 6, ,806 19, , ,842 69, , , , , ,594 1,664,728 1,195,233 61, ,833 3,679,862 1,391, ,969 73, ,084 2,758,602 2,758,602 12/31/2012 Financial liabilities Suppliers Debentures Loans, financing and debt charges Related parties Use of public property Others at amortized cost Total Others at amortized cost Total 929, , , ,887 2,201,253 2,201,253 1,488,168 1,488,168 1,729,818 1,729,818 1,600,378 1,600, , ,414 (67,103) (67,103) 267, , , ,093 5,265,485 5,265,485 4,194,423 4,194,423 In 2012, the distributors EDP Bandeirante and EDP Escelsa reclassified the account of indemnifiable financial assets from the loans and receivables category to the available for sale category. This financial instrument represents the right to compensation at the end of the concession period (Note 13). The measurement was made based on the appraisal report of these assets issued by the Concession Grantor. Accordingly the assets were henceforth measured at fair value, while they were previously valued at amortized cost. The main uncertainties regarding this financial instrument are due to the risk of non-recognition of part of these assets by the Concession Grantor and of their respective replacement prices at the end of the concession. Regarding the other subsidiaries, the financial Instruments were not restated in the period. The hierarchy of financial instruments according to their fair value regulates the need for more consistent information, adjusted for the Company's external environment. The Company's instruments fair value measurement requirements are as follow: (a) Level 1 prices agreed on in active markets for identical assets and liabilities, (b) Level 2 - differ from asset and liability prices negotiated in active markets included in Level 1, directly or indirectly, and 57

59 Management s notes to the financial statements (c) Level 3 - for assets and liabilities that are not based on market variables. They are generally obtained internally or from sources not considered as deriving from the market. The methodology applied to classify the Company's financial instruments fair value in levels classified as fair value through profit or loss, held to maturity or available for sale. was based on an individual analysis that searched for similar transactions in the market. Comparison criteria were structured considering terms, amounts, grace period, indices and active markets. The simpler and easier is the access to comparative information, the more active is the market, the more restricted the information, more restricted is the market to measure the instrument. Financial assets Measurement of fair value Identical Similar markets markets Without active market Level 1 Level 2 Level 3 Cash and cash equivalents 140,060 22, , Financial assets available for sale 6,932 6, ,992 29, ,500 - Measurement of fair value Financial assets Identical markets Similar markets Without active market Level 1 Level 2 Level 3 Cash and cash equivalents 1,175, , , Indemnifiable financial assets 751, ,901 Financial assets available for sale 6,932 6, Other credits - Derivatives 19, , Financial liabilities 1,954, , , ,901 Use of public property 39,646 39, ,646 39, Market risk The market risk is presented as the possibility of losses due to the fluctuations of variables that affect market prices and rates. This fluctuation impacts virtually all segments, thus representing financial risks. Loans and financing, and debt charges presented in Note 18 refer to funds raised from IEB, BNDES, Eletrobrás, Banco do Brasil and Banco Santander. Contract standards for financial liabilities acquired by the Company generate risks related to these exposures. As of June 30, 2013, the Company is subject to market risks associated with TJLP, CDI, US dollar and Libor. As TJLP and CDI represent interest rate risks, we took into consideration that the Brazilian economy has a favorable scenario for robust growth and infrastructure investment. Inflation being under control and credit availability are key risk factors to consider when raising funds linked to these indices. It should be considered that in a scenario of inflation growth and increasing SELIC, the cost of these transactions could be higher. Considering the strong currency and that the country s risk is under control, loans denominated in US Dollars and Euros are considered favorable. In addition, the exchange rate risk in foreign currency transactions is considered. In an economy where exchange rate fluctuation is very high, this exposure may be a relevant factor in making a transaction impossible. The Company maintains derivatives used for hedge and swaps to control all exchange and interest rate exposure. Considering that the market rate (or opportunity cost of capital) is defined by external agents, taking into account the risk premium compatible with activities in the industry, and lacking other alternatives or different market hypotheses and/or estimate methodologies with respect to company business and special features of the industry, the market value of this loan package comes close to its book value, as do the remaining assets and liabilities evaluated Sensitivity analysis In the chart below, scenarios for the different indices used by the Company were considered, from interest rate and other indices fluctuation to transactions' maturities. The probable scenario (scenario I) was adopted by the Company, based mainly on macroeconomic assumptions obtained from the Focus report of the Brazilian Central Bank. Scenarios II and III consider a risk increase of 25% and 50%, respectively, and Scenarios IV and V consider a risk reduction of 25% and 50%, respectively. These sensitivity analyses were prepared in accordance with CVM Instruction nº 475/08, and are intended to measure the impact of changes in marketvariables on each financial instrument of the Company. Nevertheless, the settlement of transactions involving these estimates can result in amounts different from those estimated due to the subjectivity inherent in the process used for the preparation of these analyses. Information in the chart demonstrates the impact of each risk variation in the Company's results. 58

60 Management s notes to the financial statements Aging - Probable scenario Scenario (I) Scenario (II) Scenario (III) Scenario (IV) Scenario (V) Transaction Risk Up to 1 year 2 to 5 years Above 5 years Probable Increased risk by 25% Increased risk by 50% Decreased risk by 25% Decreased risk by 50% Financial instruments (assets) CDI 10, ,614 2,654 5,307 (2,654) (5,307) Financial instruments (liabilities) CDI (71,666) (59,609) 0.00 (131,275) (29,741) (58,952) 30,293 61,159 (61,052) (59,609) - (120,661) (27,088) (53,645) 27,640 55,852 Aging - Probable scenario Scenario (I) Scenario (II) Scenario (III) Scenario (IV) Scenario (V) Transaction Risk Up to 1 year 2 to 5 years Above 5 years Probable Increased risk by 25% Increased risk by 50% Decreased risk by 25% Decreased risk by 50% Financial instruments (assets) CDI 53, ,089 13,522 27,046 (13,522) (27,046) Financial instruments (liabilities) CDI (188,468) (156,112) 0.00 (344,580) (75,804) (150,253) 77, ,877 Derivative financial instruments CDI (6,690) (24,566) 0.00 (31,256) (7,486) (14,848) 7,612 15,354 - (141,609) (180,138) - (321,747) (69,768) (138,056) 71, ,186 Transaction Financial instruments (liabilities) TJLP (40,392) (130,493) (64,670) (235,555) (42,324) (84,649) 42,324 84,649 Derivative financial instruments TJLP (4,023) (12,127) (4,832) (20,982) (3,801) (7,602) 3,801 7,602 - (44,415) (142,620) (69,502) (256,537) (46,125) (92,251) 46,125 92,251 Transaction Financial instruments (liabilities) Dólar (27,692) (55,384) 27,692 55, (27,692) (55,384) 27,692 55,384 Transaction Financial instruments (liabilities) Libor - 6M (1,778) (24,744) 0.00 (26,522) (5,396) (10,790) 5,396 10,790 Derivative financial instruments Libor - 6M 1,778 24, ,522 5,396 10,790 (5,396) (10,790) The futures curves of the financial indicators CDI, TJLP, LIBOR and US$ are as projected by the market and are aligned with the expectations of the management of the Company and of its subsidiaries (in the case of the consolidated statement) The indicators had their ranges as shown below: CDI between 7.75% and 8.75%; TJLP of 5.00%; Libor 6M between 0.441% and 4.451%; and US% between and Liquidity risk Liquidity risk relates to the Company's capacity to settle its obligations. In order to determine the Company's financial capacity to meet the commitments assumed, the maturities of funds raised and other obligations are also disclosed. More detailed information about the contracted amounts and those released is presented in Note 18. The Company's management uses only credit lines that allow operating leverage. This premise is reaffirmed by the characteristics of funds effectively raised. Covenants are financial indicators that control the Company's financial health, as required by fund raising contracts. Non-compliance with covenants of loan and financing agreements may result in an immediate disbursement or early maturity of a liability with defined flow and periodicity. The list of each contract's covenants is presented in Note 17. Up to June 30, 2013, all covenants were fully complied with. The Company's most expressive financial assets are presented in captions Cash and cash equivalents (Note 6) and Consumers and concessionaires (Note 7) and Indemnifiable financial assets (Note 13). As at December 31, 2012, the Company has in cash an immediately available amount and cash equivalents, which are immediate-liquidity financial investments promptly convertible into known cash amounts. Consumer and concessionaire balances presented in Note 7 comprise the estimated flow of receivables. For Indemnifiable financial assets, the balance presented corresponds to the amount receivable from the Concession Grantor at the end of the concession and is measured at the new replacement value Credit risk The credit risk is the possibility that the Company does not realize its rights, It is directly related to the accounts cash and cash equivalents, consumers and concessionaires, pledges and committed deposits, among others. In the electrical power industry, the operations carried out are reported to the regulatory agency, which maintains updated information on power volume produced and consumed. Permitting the preparation of plans to guarantee the system operation without interferences or interruptions. Power is traded through auctions and contracts, among other mechanisms, bringing reliability and control on default. The priority of concession agreements for power distribution is to serve the market without excluding the low income population or areas with lower population density. Accepting and serving these new consumers dwelling in the concessionaire's operating area is a standard of the concession agreement. For the distribution of electricity, the financial instrument that may expose the subsidiaries EDP Bandeirante and EDP Escelsa to credit risk is Trade accounts receivable. Accounting standards are based on the regulatory agency's standards and assumptions approved by the Company's management. The diversification of sales of power to this consumer group makes the Companies' receivables less volatile, and the estimated rate of credit default is 10.65%, as shown in Note 7. The main tool used to mitigate the risk of non-realization of financial assets is to suspend power supply to consumers in default. Before the suspension, the Companies make administrative collections, bill notices, etc. The Company offers to consumers several communication channels, including call centers, service stores and the internet. 59

61 Management s notes to the financial statements Short-term investments are also a source of credit risk. The management of these financial assets is through operating strategies based on internal policies and controls, aimed at assuring liquidity, security and profitability. Specific mitigation strategies of the Financial Risk Management Policy of Grupo EDP are periodically conducted based on risk reports. The control policy consists of permanent monitoring of the conditions contracted versus the conditions in force in the market through operating systems integrated to the SAP platform. The Company does not make investments on a speculative basis. The results obtained with these operations are in line with the policies and strategies defined by Management. The Company contracts short-term investments only from financial institutions rated as low risk by rating agencies in order to guarantee better profitability and reliable results. Management understands that the contracted financial investments do not expose the Company to significant risks that might generate material losses in the future Derivative financial instruments A derivative financial instrument is the instrument whose value is influenced by the fluctuation of a financial instrument rate or price, does not require an initial investment, or the initial investment is much lower than those of similar contracts and is always settled at a future date. All swap transactions are conducted by the subsidiaries EDP Bandeirante and EDP Escelsa. As at June 30, 2013, the Company's derivatives are recorded at fair value. Gains and losses arising from the derivatives fluctuations in the period were recorded in results of the subsidiaries and jointly-controlled subsidiaries. Hedge accounting is carried out in shareholders' equity. The derivative instruments qualified as cash flow hedges were so classified in order to provide effective coverage as required in the contracts, and based on subsequent evaluations of their terms. The changes in the fair values of derivative instruments designed as cash flow hedges are recognized directly in Shareholders' equity, proportionally to the stake in the jointly-controlled subsidiary. The fair values of the derivatives held by the subsidiaries EDP Bandeirante and EDP Escelsa are calculated internally by a discounted cash flow method based on market sources disclosed by BM&FBovespa. Derivative financial instruments 12/31/2012 Company SWAPS Total SWAPS Total Asset Libor % p.a. EDP Escelsa 44,063 44,063 40,368 40,368 Libor % p.a. EDP Bandeirante 44,063 44,063 40,368 40,368 88,126 88,126 80,736 80,736 Liability 93.40% of CDI EDP Escelsa 34,875 34,875 34,881 34, % of CDI EDP Bandeirante 34,875 34,875 34,881 34,881 69,750 69,750 69,762 69,762 Total 18,376 18,376 10,974 10,974 Gains and losses from the Company's subsidiaries derivative transactions on June 30, 2013 and December 31, 2012 are: Derivatives intended for protection Derivative financial instruments - Gains and losses 06/30/ /31/2012 Financial Financial Shareholders result result equity Interest and currency risks 6,042 5, Total 6,042 5,360 - The net maturity of derivatives is shown in the table below. Maturity Net derivatives 2013 (1,608) After ,984 Receivable/ (payable) 18,376 In compliance with CVM Instruction 475/08, information on derivative financial instruments should include the motivation for the hedged transaction, the instrument s fair value, the impact on the Company's results for the year and the main characteristics of the contracted instrument. These details are shown in the following table: 60

62 Management s notes to the financial statements Beginning Description Subsidiary Counter-party Maturity Position 12/31/ /31/ /31/ /30/2012 Swap Notional US$/EUR Notional R$/US$ Fair value Effects on income (loss) Banco Libor 6M + 2/9/ , ,071 44,063 40,368 3,825 6,126 Assets EDP Escelsa Goldman 1,275 % p.a. Liabilities Sachs 2/20/ % of CDI 34,875 34, ,004 9,188 5,487 3,021 5,122 Assets Liabilities EDP Bandeirante Banco Goldman Sachs 2/9/2012 Libor 6M + 1,275 % p.a , ,071 44,063 40,368 3,825 6,126 2/20/ % of CDI ,875 34, ,004 9,188 5,487 3,021 5,122 Libor + 4,375 3/19/2004 Assets EDP (96) % p.a. Bandeirante Liabilities Banco Citibank 2/14/ % of CDI (78) (18) Libor + 4,375 12/14/ (36) Assets % p.a. EDP Liabilities Bandeirante Banco Citibank 2/14/ % of CDI (29) (7) Libor + 4,375 4/5/2006 Assets EDP (60) % p.a. Bandeirante Banco JP Liabilities Morgan 2/14/ % of CDI (45) (15) Libor + 4,375 4/5/2006 Assets EDP (49) % p.a. Bandeirante Banco JP Liabilities Morgan 2/14/ % of CDI (31) (18) 28.7 Capital management The purpose of the Group's capital management is to safeguard business continuity of the Group in order to offer returns to shareholders and benefits to other stakeholders, as well as maintaining an optimal capital structure to reduce costs. In order to maintain or adjust its capital structure, the Group may review its dividend payment policy, return capital to shareholders and even issue new shares or sell assets to reduce its indebtedness level Total loans and debentures 17 and 18 3,897,509 3,088,546 Less: Cash and cash equivalents 6 (1,175,249) (571,375) Net debt 2,722,260 2,517,171 Total shareholders' equity 6,038,335 6,332,386 Total capital 8,760,595 8,849,557 Financial leverage index - % Non-cash transactions In accordance with CPC 03 (R2), investing and financing transactions not requiring the use of cash or cash equivalents should not be included in the statement of cash flows. During the reporting year, the subsidiaries' activities that did not involve cash and, consequently, are not included in the statement of cash flows, are as follows: The subsidiaries Companhia Energética do Jari, ECE Participações and Cachoeira Caldeirão performed a capitalization of debt charges amounting to R$ 13,938 in Property, plant and equipment in the half. The subsidiaries EDP Bandeirante and EDP Escelsa capitalized debt charges amounting to R$ 3,685 in Intangible assets. Contractual commitments and guarantees Contractual commitments On June 30, 2013, commitments related to short and long-term financial debts and other long-term liabilities (which are recorded in the interim accounting information) and outstanding obligations from purchases and liabilities from operating rental (not recorded in the interim accounting information), are presented per maturity, as follow: Short and long term financial debts including interests falling due Liabilities with operating leases Purchasing obligations Note Total Up to 1 year Between 1 and 3 years Between 3 and 5 years Above 5 years 17 and , , , , ,039 1, ,305 47,765 16, ,051, , , ,700 - Note Total Up to 1 year Between 1 and 3 years Between 3 and 5 years Above 5 years Short and long term financial debts including interests falling due 17 and 18 5,038,785 1,409,528 1,879, ,563 1,091,702 Loan agreements , , Liabilities with operating leases 67,089 42,926 18, ,425 Purchasing obligations 35,393,660 3,768,433 5,281,814 3,982,438 22,360,975 Use of public property 267,291 22,161 37,609 33, ,019 Contingent consideration 21 30,881 30, Environmental Licenses Dismantling 21 20,952 14,174 6, , ,173 40,979,526 5,288,472 7,383,283 4,674,477 23,633,294 61

63 Management s notes to the financial statements The contractual commitments of the Company and its subsidiaries referred to in the table above are at present value and essentially reflect agreements and commitments necessary to the normal course of the company's operating activities. For the items not appearing in the interim accounting information, the discount rate used was the Company's average cost of capital. Obligations from purchases essentially include responsibilities related to long-term agreements referring to the product and service provision in the scope of the operating activities of the companies of the Group Guarantees Type of guarantee offered 12/31/ /31/2012 Value Value Value Value 46,026 39, , , ,274 73,851 15,892 95, , , ,263,198 1,050, , , ,158,892 1,151, ,858,560 1,572, , , , , ,299 Shareholder's co-signature: A co-signature is a personal guarantee for payment of a security. The co-signatory promises to pay a debt if the debtor does not do so. Once the security has expired, the creditor may charge both debtor and co-signatory. On June 30, 2013, the balance of the and, in full, is related to the life insurance contracts. Blocked deposit: these are deposits in a reserve account in compliance with loan agreements entered into with financial institutions, mostly with BNDES. As at June 30, 2013, the balance, entirely at the parent company level, refers to judicial deposits for tax lawsuits and court actions. The entirety of the balance in the entry relates to loan and financing agreements. Bank letter of guarantee: An agreement whereby a financial institution (the guarantor) warrants compliance with an obligation by its customers (the principals), which may be granted for several types of transactions and especially those related to foreign trade. A letter of guarantee is nothing more than a written ancillary commitment issued by the financial institution. As at June 30, 2013, the balance of the and, in full, relates to loans and financing contracts. Corporate guarantee: A guarantee that ensures satisfaction to a creditor for an obligation assumed by the debtor, if he does not do so. The corporate guarantees were issued by EDP Energias do Brasil and by EDP Eletricidade de Portugal S.A for the Group's subsidiaries. On June 30, 2013, the balance of Liens on shares refers wholly to loan and financing agreements. Receivables in guarantee: Article 28-A in the General Law of Concessions (Law no. 8987/95), which provides for the likelihood of public utilities assigning under a fiduciary arrangement a portion of their operating credits as security in long-term loan agreements - of at least five years - intended for investment in the concession. Public utilities may assign their receivables as guarantees for loans entered into by these concessionaires, under the Securitization of Receivables model, in which a project is secured by future operating revenue arising from the project itself, after becoming operational. On June 30, 2013, the full balance was related to energy sale agreements. Promissory notes: this is a promise to pay, whereby the issuer commits itself directly with the beneficiary to pay the latter a certain sum of money. On June 30, 2013, the full balance refers to loan and financing agreements. Pledge of shares: This is a right that consists of the delivery of shares as a guarantee. On June 30, 2013, the entire balance of Liens on shares refers to loan and financing agreements. The final responsibility for the shares provided as guarantees at subsidiaries Santa Fé, Enerpeixe, Investco and Porto do Pecém rests with EDP - Energias do Brasil in the proportion of its ownership interest. Insurance bond: Guarantee insurance is a type of guarantee for government agencies and private companies, the purpose of which is to guarantee the adequate fulfillment of the obligations set forth in the contract executed by the parties, as described in the policy. For private companies, we find this type of insurance in contracts entered into with third parties, and its purpose is to eliminate or annul the risk of non-compliance by suppliers, service providers etc. On June 30, 2013, the balance, entirely at Parent Company, is related to a warranty of participation in AUCTION 06/2012 (A-5) - Cachoeira Caldeirão. In the consolidated statement, it refers, in its majority, to a builder s warranty. Pledge of Rights: Pledge of emerging rights of the concession of Lajeado, Assis Chateaubriand (Pantanal), and Peixe Anglical (Enerpeixe) hydroelectric power plants, and Francisco Gros (Santa Fé) small hydroelectric power plant, including but not limited to the following items: a) the right to generate electricity, b) the electricity to be generated, and c) guarantees established in energy purchase and sale agreements in a regulated environment. On June 30, 2013, the balance of Liens on shares refers wholly to loan and financing agreements. 31 Financial assets available for sale Refers to the acquisition of 5.63% of preferred shares, corresponding to 3.16% of all the shares of Denerge S.A., a closely held company that holds interests in companies in the electricity industry. In this negotiation, the Company had the option to convert Denerge shares into Rede Energia S.A. preferred shares, within a period of up to two years from September 11, 2008, at the price of a possible public offer. After this period, if the public offering does not take place, the Company should exercise the option to convert the shares within one year at the fixed price of R$5.68 per share. On September 15, 2011, the option for converting was exercised, resulting in the transfer of Denerge shares held by EDP - Energias do Brasil into shares of Rede Energia S.A., with recognition of a mark-to-market loss against income for that year, amounting to R$12,808, with a counter entry in Other comprehensive income. As at June 30, 2013, the change in the balance is of R$5,612, written-off against other comprehensive income, and R$7,262, recognized in income (loss) for the period. 32 Segment information A business segment is an identifiable component of the Group engaged in providing an individual product or service of a group of related products and services, and that is subject to risks and benefits that may be distinguished from other business segments. The Group develops a set of power supply activities, with special emphasis on the generation, distribution, transmission and trading of electrical power. Based on internal reports, the Board of Officers is responsible for evaluating the performance of several segments and deciding on the allocation of funds to each of the identified business segments. 62

64 Management s notes to the financial statements Segment characterization The amounts reported for each business segment are the result of the consolidation of subsidiaries and business units within each segment and the cancellation of intra-segment transactions. The column "Holding" refers to the parent company, and the origin of this income is substantially related to the evaluation of investment in subsidiaries, and jointly- owned companies by the equity accounting method, as required by the accounting practices adopted in Brazil. The income resulting from the application of the equity method is fully eliminated in the column "Elimination". Statement of income Half ended June 30 Center Generation Trading Holding Other Elimination Total Revenue 2,290, , , (398,685) 3,533,200 Cost of production for electricity services Electricity services cost Electricity purchased for resale (1,354,872) (114,770) (859,306) ,644 (1,941,304) Electricity network utilization charges (134,400) (42,858) (7,201) ,763 (173,696) (1,489,272) (157,628) (866,507) ,407 (2,115,000) Cost of operation Personnel (88,093) (14,433) (2,665) (105,191) Third-party materials and services (86,349) (11,103) (1,440) (98,614) Depreciation and amortization (87,391) (51,434) (32) (138,857) Other operating costs (16,800) (1,672) (179) (18,651) (278,633) (78,642) (4,316) (361,313) (1,767,905) (236,270) (870,823) ,685 (2,476,313) Cost of services rendered to third-parties (113,608) - (139) (113,747) Gross margin 408, ,633 66, ,140 Operating income and expenses Sales expenses (37,151) 551 1, (35,271) General and administrative expenses (110,849) (26,368) (3,734) (49,634) (164) 0.00 (190,749) Depreciation and amortization (4,375) (16,692) (117) (3,142) 0.00 (7,974) (32,300) Other operating income and expenses (41,284) (23,467) 0.00 (1,961) (66,712) (193,659) (65,976) (2,522) (54,737) (164) (7,974) (325,032) 2013 Income (loss) before financial income (loss), taxes and ownership interest 215, ,657 64,432 (54,160) (164) (7,974) 618,108 Equity in the earnings of subsidiaries - (107,200) - 211,729 - (210,873) (106,344) Financial income 56,593 10, , (4,812) 80,220 Financial expenses (114,932) (64,470) (2,662) (39,380) (240) 4,812 (216,872) Financial result (58,339) (53,574) (1,811) (22,688) (240) - (136,652) Income (loss) before income tax 156, ,883 62, ,881 (404) (218,847) 375,112 Income tax and social contribution - current (36,752) (101,792) (21,052) (159,596) Deferred income tax and social contribution (12,362) 8,344 (311) ,711 (1,618) (49,114) (93,448) (21,363) - - 2,711 (161,214) Net result (loss) for the year 107, ,435 41, ,881 (404) (216,136) 213,898 Attributable to controlling shareholders 107,864 67,418 41, ,881 (404) (216,136) 134,881 Attributable to non-controlling interests , ,017 Six-month period ended June 30 Center Generation Trading Holding Other Eliminations Total Reclassified Revenue 2,074, , , ,145 (290,958) 2,972,150 Cost of production for electricity services Electricity services cost Electricity purchased for resale (1,133,254) (19,906) (529,343) ,792 (1,406,711) Electricity network utilization charges (294,963) (46,412) (7,680) ,433 (334,622) (1,428,217) (66,318) (537,023) ,225 (1,741,333) Cost of operation Personnel (75,615) (11,998) (1,811) 0.00 (316) 0.00 (89,740) Third-party materials and services (94,817) (12,315) (1,445) 0.00 (549) 483 (108,643) Depreciation and amortization (83,336) (49,675) (28) (133,039) Other operating costs (13,880) (1,121) (216) 0.00 (106) 0.00 (15,323) (267,648) (75,109) (3,500) - (971) 483 (346,745) (1,695,865) (141,427) (540,523) - (971) 290,708 (2,088,078) Cost of services rendered to third-parties (87,285) (423) (258) - (71) - (88,037) Gross margin 291, ,354 32, ,103 (250) 796,035 Operating income and expenses Sales expenses (24,974) (1,062) (432) (282) (26,750) General and administrative expenses (84,330) (23,345) (2,967) (44,334) (172) 0.00 (155,148) Depreciation and amortization (4,394) (24,378) (112) (3,106) (31,990) Other operating income and expenses (2,923) (21,447) (2) (2,331) (26,674) (116,621) (70,232) (3,513) (50,053) (143) - (240,562) Income (loss) before financial income (loss), taxes and ownership interest 175, ,122 29,433 (49,912) 2,960 (250) 555,473 Equity in the earnings of subsidiaries 0.00 (19,896) , (235,957) (25,570) Financial income 69,849 18,757 1,314 14, (6,049) 98,605 Financial expenses (112,910) (76,495) (937) (12,482) (264) 6,049 (197,039) Financial result (43,061) (57,738) 377 2,013 (25) - (98,434) Income (loss) before income tax 132, ,488 29, ,384 2,935 (236,207) 431,469 Income tax and social contribution - current (28,533) (95,097) (10,485) 0.00 (226) 0.00 (134,341) Deferred income tax and social contribution (14,813) (1,047) (15,588) (43,346) (96,144) (10,213) - (226) - (149,929) Net result (loss) for the year 88, ,344 19, ,384 2,709 (236,207) 281,540 Attributable to controlling shareholders 88, ,188 19, ,384 2,709 (236,207) 182,384 Attributable to non-controlling interests , ,

65 Management s notes to the financial statements Statement of financial position Center Generation Trading Holding Other Eliminations Total Current assets 1,652, , , , (678,237) 2,874,246 Non-current assets 1,516, ,185 7, ,673 4,322 (295,153) 1,965,619 Investments , ,398, (3,707,973) 691,575 Investment property 4, ,127 Property, plant and equipment 186 4,229, ,585 3, ,353 4,706,093 Intangible assets 1,884,005 1,326,167 1,109 1,645 6, ,152 3,379,187 Current liabilities 1,615,047 1,511, , ,800 2,206 (670,714) 3,485,642 Non-current liabilities 1,863,285 1,778, ,663 5,716 (162,295) 4,096,870 Total shareholders' equity and non-controlling interests 1,579,380 3,276,622 73,106 4,327,724 6,352 (3,224,849) 6,038,335 12/31/2012 Center Generation Trading Holding Other Eliminations Total Reclassified Current assets 1,495, , , , (258,224) 2,278,307 Non-current assets 1,441, ,373 7, ,277 4,322 (235,356) 1,849,574 Investments , ,374, (3,668,207) 708,682 Investment property 4, ,127 Property, plant and equipment 197 4,073,288 1,181 5,004 3, ,020 4,554,328 Intangible assets 1,921,880 1,331, ,670 5, ,375 3,424,252 Current liabilities 1,596, , , ,243 2,140 (250,169) 2,611,765 Non-current liabilities 1,872,644 1,535, ,028 5,302 (105,408) 3,875,119 Total shareholders' equity and non-controlling interests 1,393,754 3,597,211 60,796 4,445,684 6,756 (3,171,815) 6,332, Subsequent events 33.1 Technical Note No. 297, of July 5, Distributors CNPE Resolution No. 03/2013 established guidelines for including risk avoidance mechanisms in computer programs for energy studies and pricing, and changed the procedures used in the calculation and apportionment of the System Service Charges due to energy security (ESS SE) referred to in article 59 of Decree No of July 30, 2004, beginning in March In June and July 2013, courts accepted ordinary lawsuits filed by electricity generation companies aiming at avoiding, for the petitioners, the effect of the provisions of articles 2 and 3 of CNPE Resolution No. 03/2013, thus preventing inclusion of said petitioners in the apportionment of the costs of additional dispatches by thermo-electrical power plants for energy security reasons (ESS-SE), which are calculated under said resolution No. 03/2013, and keeping in full the system established by CNPE Resolution No. 08/2007. Thus, the settlement of CCEE regarding April period was suspended in order to give effect to existing injunctions, which increases the ESS - SE owed by electricity distribution agents. The additional costs relating to ESS SE, considering the effects of said injunctions assigned to the subsidiaries EDP Bandeirante and EDP Escelsa, concerning the April period totaled R$ 7,560. This amount was reported by the CCEE to ANEEL in July 4, 2013, with subsequent settlement at CCEE on July 11, Management is assessing the possible recording of the obligation payable to CCEE and the consequent right to receive from CDE, with no impact on income (loss) Return of the indirect subsidiary Couto Magalhães Law was enacted on July 10, 2013, which allows generation concessionaires authorized up to March 15, 2004 that did not come into operation until June 30, 2013 to request the termination of their concession contracts within 30 days, and to be assured, as applicable, of the release or refund of guarantees regarding the obligations of the concession contract, failure to pay for the use of public property during the term of the concession contract and reimbursement of costs incurred in preparation of studies or projects that may be approved for future bidding. The companies involved in the consortium Ener-Rede Couto, for complying with the requirement required by Law /2013, will file the ratification of the request for termination of the concession contract of UHE Couto Magalhães with ANEEL, according to the guidelines contained in the MME Ordinance 243/

66 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE Events in the Period Conclusion of the 2 nd debenture issue of R$ 500 million On April 11, 2013, EDP Energias do Brasil concluded the 2 nd simple debenture issue of R$ 500 million. This operation bears interest at the interbank rate (CDI) % p.a with semi-annual payment of interest and principal in two equal installments, the first to mature in April 2015 and the second in April Release of BNDES funds to EDP Escelsa and EDP Bandeirante In 2Q13, the EDP distributors drew down further BNDES funding worth R$ 26.9 million being R$ 7 million to EDP Escelsa and R$ 19.9 million to EDP Bandeirante. This finance carries interest rates varying from the Long Term Interest Rate (TJLP) % p.a. to TJLP % p.a. with monthly interest and principal payments in 72 installments as from July General Debenture Holders Meeting On April 30, 2013, the General Debenture Holders Meetings of EDP Bandeirante and EDP Escelsa approved the alteration in the definition of EBITDA for the purpose of calculating the financial ratios to be included in the debenture issue indentures for the debentures in circulation for both distributors. Adjusted EBITDA will mean the result before interest, taxes, depreciation and amortization, adjusted with the assets and liabilities of the CVA - Account for Cost Variations of "Parcel A "- over-contracting and neutrality of sector charges." Reduction in the Capital of Lajeado Energia On May 3, 2013, the Extraordinary General Meeting of Lajeado approved the reduction in Capital Stock of its controlled company in the amount of R$ 450 million through restitution to the shareholders proportional to their respective stakes in the capital. The reduction in the capital was conditional on ANEEL (the electric energy regulator) approval, received on May 15, 2013 through Order of the Financial and Economic Inspection Department - SFF. Second Pecém I Generator Unit begins commercial operations On May 10, 2013, ANEEL authorized the second generator unit of Pecém I TPP to begin commercial operations. The unit has an installed capacity of 360 MW and began supplying energy on a trial basis to the National Interconnected System (SIN) on February 20, 2013, being remunerated at the Price for Settlement of Differences (PLD) on energy effectively generated in the period until the issue of the Commercial Operation Declaration (DCO).The first generator unit at the plant began commercial operations on December 1, On May 13, 2013, Official ANEEL letter 240/2013-SFG/ANEEL was issued establishing that the CCEE Electric Energy Trading Board should consider energy proportional to 240 MW as the plant s physical guarantee. As a result, the company was obliged to buy in energy to make up the shortfall. Plant operations subsequently built up stability to higher levels and on June 29, 2013, Official ANEEL letter 335/2013-SFG/ANEEL recognized the plants full installed capacity of 360 MW. Since this date the company has dispensed with the need to acquire energy to cover shortfalls. Moody s and Standard & Poor s reiterate Ratings of EDP Energias do Brasil and its controlled companies On June 5, 2013, Moody s published reports in which they announced stability in the ratings of EDP Bandeirante and EDP Escelsa distributors and also the Energest generator at Aa1.br on the national scale and Baa3 on the international scale with a stable outlook. Also on June 5, 2013, Standard & Poor s maintained credit ratings for both group distributors: braa+ for EDP Bandeirante and braa+ and BB+ (international scale) for EDP Escelsa, both with a stable outlook. Payment of Interest on Equity On June 12, 2013, EDP Energias do Brasil announced to the shareholders that it would be paying out interest on equity as from June 17, 2013 in the total amount of R$130,422, with respect to the fiscal year ending December 31, 2012, equivalent to R$ for each common share. This amount was discussed and approved at the 175 th and 181 st Meetings of the Company s Board of Directors held on December 26, 2012 and March 22, 2013, respectively, and ratified by the Annual General Meeting held on April 10,

67 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE Economic and Financial Performance 2.1. Net Operating Revenue 2Q13 N et Revenue Breakdow n* N et Revenue (R$ million)* Commercialization 23.7% % 416 Distribution 58.9% Generation 17.4% 7% 968 1,034-2% *Does not take into account intergroup exclusions of R$ 143 million in 2Q12 and R$ 180 million in 2Q13 and construction revenues of R$ 19.1 million in 2Q12 and R$ 66.7 million in 2Q13. 2Q13 consolidated net operating revenue, excluding construction revenue, was R$ 1,575.7 million, 9.3% higher than 2Q12. For the first half of 2013, net operating revenue, excluding construction revenue, was R$ 3,422.2 million, 18.5% up on the same period for the preceding year. The principal factors involved in determining net revenue in the period were: Commercialization Commercialized energy volume amounted to 3,112.4 GWh in 2Q13, an increase of 15.2% over 2Q12 and reflecting the long-term seasonality strategy. First half 2013 commercialized energy volume amounted to 6,034.2 GWh, an increase of 15.7% in relation to the same period in The average energy selling price practiced by the Group s trading company increased by 19.4% against 2Q12, reflecting the increase in long term sales and higher prices as well as the correction of annual agreements restated for inflation. An increase of 37.5% in the commercialization line in the following table is due to factors already mentioned as well as the portfolio management strategy in which the trading company benefited from the increase in average PLD spot prices in 2Q13. Generation Energy volume sold by group generators in 2Q13 reached 1,971.8 GWh, representing a reduction of 5.1% in relation to the 2,077.2 GWh in 2Q12. This reduction is due to the greater weighting of assured energy in 1Q13 in the light of the seasonality strategy established for First half 2013 energy volume totaled 4,322.4 GWh, an increase of 3.4% in relation to the 4,179.3 GWh sold in the same period of The average generation price was R$ /MWh in 2Q13 (excluding Pecém I TPP), 16.3% higher than reported in 2Q12, due to readjustments to power purchasing agreements for accumulated inflation, as well as the difference in seasonality strategy adopted between periods analyzed. The price was impacted by bilateral agreements of a short-term nature (for the year 2013) with higher agreed prices as part of Energia s seasonality strategy. The reduction of R$ 30.0 million in short term energy is due to less excess energy produced at the generators, reflecting in turn the unfavorable hydrological conditions and deployment of energy from the thermoelectric plants during the period. Distribution Distributed energy volume reached 6,479.9 GWh in 2Q13 with an increase of 3.2% in relation to 2Q12 (+3.5% in the case of EDP Bandeirante and +2.9% with EDP Escelsa). The increase for the first half of 2013 was 3.0%. Revenue from the use of the distribution system was R$ million in 2Q13, a reduction of 20.6% compared with 2Q12 (-24.0% in the case of EDP Bandeirante and -16.0% with EDP Escelsa), reflecting an average reduction of 20% in the electric energy tariffs announced by the federal government under law /2013. Reduction of R$ 13.1 million in short-term energy due to the under-contracting of the distributors, a reflection of the seasonality strategy adopted for the period, the difference involved being made up through the acquisition of energy at PLD spot prices. 66 2Q12 2Q13 Generation Distribution Commercialization

68 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE 13 Reduction of R$ 14.0 million for the Unbilled Retail Supply item due to the average reduction of 20% in electric energy tariffs in the light of the enactment of Federal Government Law /2013 (-R$ 7.5 million in the case of EDP Bandeirante and -R$ 6.5 million for EDP Escelsa). Average reduction of 6.6% in EDP Escelsa s tariff in 2Q13 compared to 2Q12, the impact of the average reduction of 20% in the electric energy tariff, as mentioned above, together with the tariff readjustment in August Average reduction of 11.4% in EDP Bandeirante s tariff in 2Q13 compared to 2Q12, the impact of the average reduction of 20% in the electric energy tariff, as mentioned above, together with the tariff readjustment in October Other Operating Revenues The increase of R$ 59.2 million between compared periods reflects reimbursements to the distributors from CDE funds as well as penalties against the distributors due to delays on the part of thermoelectric power plants. Provisional Measure 605, published on January 23, 2013, increased the scope for the use of funds from the Energy Development Account CDE, providing resources to offset discounts on tariffs and the effect arising from non-adherence to the extension of generation concession agreements. Under Decree 7.891, discounts on tariffs for subsidizing low income consumers, rural activity, treatment of water, sewage and sanitation and irrigation shall therefore cease to be offset against the tariffs for conventional consumers, thus permitting the promised reduction in electricity bills. Each month, ANEEL will ratify the amount of CDE funds for release by Eletrobrás to each distributor for covering the discounts mentioned above. Consequently, R$ 9.1 million in the case of EDP Bandeirante and R$ 29.7 million in the case of EDP Escelsa have been provisioned thus positively impacting the other operating revenues line. Net Operating Revenue (R$ thousand) 2Q13 2Q12 Chg. 6M13 6M12 Chg. Captive Customers 1,042,064 1,125, % 2,178,475 2,265, % Residential 426, , % 906, , % Industrial 241, , % 478, , % Commercial 244, , % 522, , % Rural 36,175 39, % 78,369 73, % Other 94,056 98, % 192, , % (-) Transferred to TUSD - captive customers (1) (473,455) (572,126) -17.2% (986,739) (1,163,717) -15.2% Unbilled supplies (25,977) (11,988) 116.7% (74,615) (7,141) 944.9% Total Retail Supply 542, , % 1,117,121 1,094, % Electric energy 161, , % 338, , % Short term energy (9,377) 33,772 n.a. 39,864 58, % Commercialization 418, , % 903, , % Total Wholesale Delivery 570, , % 1,281, , % Retail Supply and Wholesale Delivery 1,112,841 1,028, % 2,398,965 2,030, % Usage of the distribution system (TUSD) 580, , % 1,239,431 1,490, % Construction Revenue 66,734 19, % 110,977 83, % Other Operationg Income 126,139 66, % 309, , % Sub-total 1,885,785 1,845, % 4,059,202 3,740, % (-) Deductions from Operating Revenue (243,362) (385,401) -36.9% (526,002) (768,388) -31.5% Net Operating Revenue 1,642,423 1,460, % 3,533,200 2,972, % Operating Revenue excluding construction 1,575,689 1,441, % 3,422,223 2,888, % (1) Pursuant to Aneel rulings, this item refers to the portion billed to captive customers corresponding to the tariff for the use of the distribution system, previously presented as part of Retail Supply and now presented in the Usage of the Distribution System. 67

69 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE Deductions from Operating Revenue In 2Q13, deductions from operating revenue amounted to R$ million, a reduction of 36.9% over the same period in This variation reflects the following factors: CCC (Fuel Consumption Account): extinguishment of the charge pursuant to Law /2013; CDE (Energy Development Account): reduction of the charge pursuant to Law /2013; RGR (Global Reversion Reserve): reduction of 88.0% due to the extinguishment of the charge pursuant to Law /2013. The Pantanal and Energest concessions were not included in the above law, the amount shown for the quarter relating to the charges collected from both. Deductions from Operating Revenue 2Q13 2Q12 Chg. 6M13 6M12 Chg. R&D (12,823) (12,133) 5.7% (27,423) (23,785) 15.3% Other charges (10,851) (13,767) -21.2% (21,703) (27,441) -20.9% CCC 0 (81,916) % (14,033) (163,833) -91.4% CDE (16,164) (61,184) -73.6% (32,327) (122,369) -73.6% RGR (1,373) (11,421) -88.0% (973) (23,611) -95.9% PIS/COFINS (201,680) (204,212) -1.2% (428,647) (405,806) 5.6% ICMS (225) (540) -58.3% (408) (1,099) -62.9% ISS (246) (228) 7.9% (488) (444) 9.9% Total (243,362) (385,401) -36.9% (526,002) (768,388) -31.5% 2.2. Operating Expenditures Operating expenditures excluding construction costs, depreciation and amortization amounted to R$ 1,248.8 million in 2Q13, representing an increase of 9.9% as compared with 2Q12. 2Q13 Operat ing Expendit ure Breakdown* Opera t ing Expenses (R$ million) 10% 1,249 1,137 Non- Manageable 79% Manageable 21% 942 5% % Q12 Manageable expenditures 2Q13 Non-manageable expenditures * Note: the breakdown of operating costs does not include depreciation/amortization and construction costs Non-Manageable Expenditures Non-manageable expenditures relate to the purchase of energy, charges for the use of the basic electricity network and ANEEL s inspection fee, the three together increasing 5.3% in 2Q13 to R$ million compared with the same period in For the first six months of 2013, non-manageable expenditures amounted to R$ 2,141.9 million, a year-on-year increase of 21%. Non-Manageable Expenditures (R$ thousand) 2Q13 2Q12 Chg. 6M13 6M12 Chg. Electricity purchased for resale (894,156) (763,850) 17.1% (1,941,304) (1,406,711) 38.0% Foreign currency - Itaipu (124,866) (110,073) 13.4% (238,241) (206,433) 15.4% National currency (769,290) (653,777) 17.7% (1,703,063) (1,200,278) 41.9% Use and connection charge (84,934) (165,614) -48.7% (173,696) (334,622) -48.1% Other (12,434) (12,557) -1.0% (26,901) (28,779) -6.5% Inspection fee (3,579) (4,005) -10.6% (7,159) (7,591) -5.7% Financial compensations (8,855) (8,552) 3.5% (19,742) (21,188) -6.8% Total Non-Manageable Expenditures (991,524) (942,021) 5.3% (2,141,901) (1,770,112) 21.0% 68

70 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE 13 Electric energy purchased for resale amounted to R$ million in 2Q13, a year-on-year increase of 17.1%, the result of increased average prices of purchased energy, restated against the IPCA and IGP-M inflation indexes, and an increase in Price for Settlement of Differences PLD due to less favorable hydrological conditions and greater energy deployment from the thermoelectric power plants, affecting both the distribution segment as well as that of generation and commercialization PLD Evolution (R$/ M Wh) Southeast / Centerw est Submarket Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec PLD PLD2 85.3% 72.5% 63.8% Southeast / Centerwest Reservoir Levels (%) 92.6% 94.4% 93.6% 85.5% 80.8% 67.8% 68.1% 66.3% 46.5% South Northeast North 2Q11 2Q12 2Q13 The amount of energy purchased from Itaipu (currency denominated) recorded an increase of R$ 14.8 million, despite the reduction of volume purchased due to the increase of 6.6% in the average dollar in 2Q13 (R$ 2.12) compared with 2Q12 (R$ 1.98). With respect to energy purchases in local currency, it should be noted: In Distribution As in the case of the final few months of 2012, PLD spot prices continued at a high level in the first six months of 2013, reflecting the energy deployment from the thermal plants during the period. The PLD is calculated using a statistical model developed by the National System Operator (ONS) designed to optimize the operation of generating plants in Brazil, influenced by water levels in plant reservoirs and by the short-term outlook for rainfall. In addition to high costs involved in the deployment of electricity from thermoelectric plants, there was an increase in the cost of the Energy Security Charge (ESS) paid when the thermoelectric plants are deployed off the cost-based order of merit system to ensure energy security. However, this additional cost was mitigated by the release of funds from the Energy Development Account (CDE) following the enactment of decree 7.945/2013, published by the Federal Government. The transfer of resources from the CDE was executed by Eletrobrás, which transferred the funds directly to the distributors. Additionally, the resources were also instrumental in neutralizing the costs associated with the hydrological risk of the physical quota guarantee agreements and to the involuntary exposure to PLD spot prices due to the shortfall in energy quotas supplied to the distributors by ANEEL. In 2Q13, EDP Energias do Brasil s distributors booked a total of R$ million of funds emanating from the CDE. In the case of EDP Escelsa the amount of R$ 69.2 million was booked to 2Q13 in addition to R$ 29.7 million which reflected the adjustment of the amount provisioned in 1Q13. In the case of EDP Bandeirante, the amount of R$ 33.6 million was booked to 2Q13 in addition to a reversal of R$ 10.1 million with respect to an adjustment of an excess in provisioning made in 1Q13. The amounts for 2Q13 are divided as follows: Involuntary exposure to PLD, caused by shortfalls in physical guarantee: R$ 15.5 million at EDP Escelsa and R$ 3.2 million at EDP Bandeirante. Energy Security Charge: R$ 20.9 million in the case of EDP Escelsa and R$ 31.5 million for EDP Bandeirante. Coverage of hydrological risk costs: -R$ 0.6 million at EDP Escelsa and -R$ 1.1 million at EDP Bandeirante. In addition, under Decree 7.945, ANEEL will ratify the annual amounts of funds released from CDE to be passed through by Eletrobrás to cover totally or partially the positive result of the CVA - Account for Cost Variations of Parcel A for distributor tariff processes concluded subsequent to March 8, Normative Resolution 549 of May 7, 2013 states that ANEEL will publish for each ordinary tariff process up to March 7, 2014 the amount of CDE funds to be passed through by Eletrobrás to the distribution concessionaires for covering positive CVA balances. These funds will be due in cases in which at least one of the criteria below applies: I the average tariff effect of the distributor s tariff process is more than three percent in the case of the tariff revision and eight percent in the case of the tariff readjustment; 69

71 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE 13 II the energy purchase CVA balance and ESS is higher than two percent of the economic revenue of the distributor as defined in the tariff process. Consequently, in line with Normative Resolution 549/2013, the amount of R$ 33.4 million has been provisioned to the accounts of EDP Escelsa with respect to the disbursement which will be made 10 days after the periodic tariff revision process, to be incorporated in consumer tariffs from August 7, For the first six months of 2013, the company s results were impacted by R$ million in resources from the CDE, R$ million of which have already been settled thus impacting the company s cash position. The difference is due to the postponement of settlement for the months of May and June. The latter is now scheduled to take place in August In addition, the initiation of supply of three new products also contributed to the increase in costs namely: the Jirau auction, the expansion of Santo Antônio and the 7 th new energy auction, necessary to meet growing market demand. In Generation In 2Q13, power purchasing operations were undertaken to compensate for the greater weighting of energy allocations at the beginning of In addition, the generators acquired short-term energy in the light of the unfavorable hydrological scenario and greater deployment from thermoelectric power plants in the amount of about R$ 2.4 million (see details on page 17). Utilization and connection charges reported a reduction of 48.7% in 2Q13 compared with 2Q12. This was due to the energy tariff reduction package announced by the government and enacted through Law /2013 which also incorporated a reduction in the charge for the use of the transmission and distribution system. Financial compensations increased by 3.5% in 2Q13, reflecting a readjustment in the reference tariff in January 2013, the baseline month for calculating this charge. The 10.6% variation in 2Q13 in the inspection fee was due to an adjustment in the account entry made in 2Q12 and compensated in 3Q12. The Brazilian Association for Independent Energy Producers (APINE), the Brazilian Association for Clean Energy Generation (ABRAGEL) and the Brazilian Association of Energy Traders (ABRACEEL) were granted court injunctions suspending the payment of the Energy Security Service System Charge as required under CNPE Resolution 03. Despite the injunctions, the company has chosen to maintain its provision for the payments of these charges not only for generation but also commercialization. The impact on the quarter s figures with respect to the prorating of the Energy Security Charge was R$ 10.3 million, R$ 9.9 million for generation (R$ 1.9 million Energest, R$ 4.2 million Lajeado, R$ 2.7 million Peixe Angical) and R$ million for commercialization Manageable Expenditures Manageable expenditures, excluding construction costs, depreciation and amortization totaled R$ million, an increase of 32.2% in 2Q13 in relation to 2Q12. These expenditures are related to expenses with personnel, material, third party services, provisions and others (PMSO). Manageable Expenditures (R$ thousand) 2Q13 2Q12 Chg. 6M13 6M12 Chg. Personnel (83,171) (68,383) 21.6% (168,654) (152,272) 10.8% Material (7,812) (6,271) 24.6% (14,430) (12,552) 15.0% Third-party services (96,612) (84,077) 14.9% (185,187) (171,525) 8.0% Provisions (45,459) (15,583) 191.7% (76,292) (29,973) 154.5% Other (24,179) (20,244) 19.4% (46,494) (31,595) 47.2% Total PMTO (257,233) (194,558) 32.2% (491,057) (397,917) 23.4% Infrastructure Construction Costs (66,734) (19,140) 248.7% (110,977) (83,619) 32.7% Depreciation and amortization (84,774) (84,533) 0.3% (171,157) (165,029) 3.7% Total Manageable Expenditures (408,741) (298,231) 37.1% (773,191) (646,565) 19.6% IGP-M (last 12 months)* 6.3% IPC-A (last 12 months)** 6.7% *Source: FGV **Source: IBGE 70

72 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE 13 The key variations in 2Q13 over the same period in 2012 are as follows: An increase of R$ 14.8 million in expenditures in the Personnel (+21.6%) account, the following factors warranting particular mention: (i) An average wage increase of 6.3% in accordance with the collective bargaining agreement (+R$ 3.4 million); the effect of a reduction in outsourced labor and a corresponding addition of 198 employees to the payroll (+R$ 3.2 million); (ii) Greater overtime working by the distributors technical areas (+R$ 2.0 million); (iii) Lower capitalization of personnel expenditures in the period at EDP Escelsa (+R$ 1.4 million); (iv) Greater use made of the corporate healthcare plan (+R$ 0.8 million); (v) Non-recurring effect in 2Q12 with respect to the SAT (Occupational Accident Insurance) credit on court action with respect to the years at EDP Escelsa due to overpayment in previous periods (+R$ 4.0 million). There was an increase of +24.6% in the Materials account due to the purchase of parts and accessories for the service vehicle fleet and materials for conserving and repairing the electrical system. There was an increase of R$ 12.5 million (+14.9%) in the Third Party Services account between the quarters due to: (i) The plan for improving the DEC indicator at EDP Escelsa which reported an increase due to climatic conditions (+R$ 2.0 million); (ii) Readjustments to existing agreements and new IT agreements (+R$ 5.8 million); (iii) Increase in customer service costs due to contractual readjustments and growth in the customer base (+R$ 1.9 million); (iv) The impact of reducing outsourced labor at the Peixe Angical HPP as from May 2012 with a reduction in the number of outsourced service crews (-R$ 0.5 million); (v) Non-recurring effect in 2Q12 with publicity and in-house communication (-R$ 2.0 million); (vi) Non-recurring effect in 2Q13 with respect to higher expenditure on consultancy services (+R$ 2.3 million); (vii) Non-recurring effect involving the remodeling and move of the head office in São Paulo (+R$ 2.6 million). In the Provisions item, there was an increase of R$ 29.9 million in 2Q13 in relation to 2Q12, principally reflecting: (i) The setting aside of a provision for labor actions at EDP Bandeirante due to an unfavorable legal decision (+R$ 9.8 million); (ii) Reversal of the provisioning on a pro-rata basis for CCEE business with respect to the Santa Rita de Cássia HPP in the accounts of EDP Comercializadora (-R$ 2.1 million); (iii) Non-recurring effect of the constitution of a provision for an agreement signed between EDP Escelsa and the Labor Union - SINERGIA/ES with respect to a class action in which the parties allege losses caused through changes in the jobs and wages plan for the period from 2002 to 2006 (+R$ 21.5 million). The increase of R$ 3.9 million in the Others item is principally due to the following factors: (i) The positive effect in relation to the New Replacement Value for distribution assets of -R$ 6.8 million (-R$ 2.3 million in the case of EDP Bandeirante and -R$ 4.5 million at EDP Escelsa); (ii) Indemnities paid for electrical appliances due to a greater number of accidental occurrences as a result of an increase in lightning strikes in the concession areas (+R$ 1.7 million); (iii) Non-recurring effect in 2Q12 with respect to the rebooking of inventory at EDP Energest (+R$ 4.8 million); (iv) Non-recurring effect on the move to new head office premises resulting in the payment of rent (previous and new premises) during remodeling work prior to occupying the new head offices in parallel with rental payments under the previous rent agreement (+R$ 2.0 million). Excluding non recurring effects, the PMTO presented an increase of 10.3% in the first half of The Depreciation and Amortization account amounted to R$ 84.8 million in 2Q13, stable in relation to

73 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE EBITDA In 2Q13, EBITDA reached R$ million, an increase of 7.3% compared with the same period in the preceding year. In Generation, EBITDA totaled R$ million in 2Q13, a reduction of 22.7% in relation to 2Q12, and reflecting the decline of 5.1% in energy volumes in 2Q13 and the increase in non-manageable expenditures in the light of energy purchases due to the seasonality strategy adopted by the company. In Distribution, EBITDA amounted to R$ million in 2Q13, an increase of 91.4% in relation to 2Q12 and the result of an improvement of 58.2% in gross margin due to additional CDE credits, favorably impacting revenue and attenuating energy purchase costs. In Commercialization, EBITDA was R$ 14.2 million in 2Q13, an increase of 400.0% in relation to 2Q12 due to the strategy adopted of long-term agreements and seasonality. EBITDA (R$ million) and EBITDA M argin* (%) 2Q13 EBITDA Breakdown* 21.1% 20.7% Commercialization 4% Distribution 42% Generation 54% 2Q12 *Excludes construction revenue 2Q13 Note: Percentages not include elimination of intragroup segments EBITDA Formation (R$ million) (63) 327 EBITDA 2Q12 Gross Margin Manageable Expenditures* *Excludes depreciation and amortization EBITDA 2Q13 72

74 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE Financial Result Financial Result (R$ thousand) 2Q13 2Q12 Chg. 6M13 6M12 Chg. Financial Revenue 39,171 39, % 74,178 88, % Revenue from financial investments 14,050 11, % 18,096 23, % Monetary variation 20,665 21, % 42,922 41, % SELIC on taxes and social contribution 1,793 5, % 3,599 8, % Marking to market and present value adjustments 2,240 2, % 7,483 6, % Other revenue 423 (818) n.a. 2,078 7, % Financial Expenses (116,692) (100,536) 16.1% (210,062) (185,614) 13.2% Monetary variation and Adds (18,231) (22,892) -20.4% (32,725) (36,069) -9.3% Financial charges on debt (73,838) (59,952) 23.2% (134,690) (119,880) 12.4% Post Employment Fringe Benefits (12,407) (6,732) 84.3% (24,815) (13,462) 84.3% Marking to market and present value adjustments (4,009) (4,787) -16.3% (8,551) (8,643) -1.1% Other Expenses (8,207) (6,173) 33.0% (9,281) (7,560) 22.8% Net Foreign Exchange Result 348 2, % (768) (1,498) -48.7% Total (77,173) (58,612) 31.7% (136,652) (98,434) 38.8% The consolidated net financial result in 2Q13 was a negative R$ 77.2 million, 31.7% more than 2Q12. The financial result was made up of: (i) revenue of R$ 39.2 million in line with 2Q12, (ii) an expense of R$ million, 16.1% greater than 2Q12, and (iii) a net positive foreign exchange result of R$ 0.3 million compared with the also positive R$ 2.7 million recorded for 2Q12. The principal factors resulting in the negative variation of R$ 18.6 million between compared quarters are: Financial Revenue (i) Increase in income on financial investments due to the increase in cash and cash equivalents between the periods under review (R$ 2.5 million); (ii) Reduction in the SELIC-based interest on tax and social charges due to the decline in SELIC rates in 2Q13 (8.0%) relative to 2Q12 (8.5%) (-R$ 3.5 million); Financial Expenses (i) Increase in provisioning expenses and monetary restatement of legal contingencies in the light of the increase in civil, labor and fiscal actions in the period, principally in the case of EDP Escelsa (-R$ 2.3 million); (ii) Lower monetary restatement overheads with respect to the use of public property (+R$ 5.8 million); (iii) Reduction in monetary restatement on financial overheads related to fines and interest on the Brazilian Internal Revenue Service s REFIS program (for the consolidation of debts in favor of the government) (+R$ 1.8 million); (iv) An increase in debt service charges due to the higher outstanding debt balances in the period (-R$ 13.9 million); (v) Increase in Post-Employment Benefit expenses (- R$ 5.7 million) due to the updating of actuarial assumptions. With the introduction of IAS 19, there was a change in the rate of return on investments whereby this was made equivalent to the discount rate, thus negatively impacting the return on assets and making a higher contribution necessary from the pension fund sponsors; (vi) Increase in expenses with interest and a fine on ICMS payments (-R$ 5.3 million). Foreign Exchange Result The Group reported a positive foreign exchange result of R$ 0.3 million, representing a negative variation of R$ 2.3 million in relation to 2Q12. The US dollar ended 2Q13 reporting a 10.02% appreciation in the rate of exchange to the Real of R$ 2.22 compared to R$ 2.02 at the close of 2Q12, thus worsening the foreign exchange result. In addition to foreign exchange devaluation, in 2Q12 the company reported net gains on swap and hedge operations, a fact that was not repeated in 2Q Net Income net income for 2Q13 totaled R$ 44.6 million, 11.8% up on the same period for In addition to the effects cited in the case of EBITDA, profits were also impacted by the effects of the financial results, by minority interests, that had a non-recurring effect in the quarter reflecting the distribution of investment reserve on the consolidation of Lajeado, and by 73

75 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE 13 income tax and social contribution in the period. Net income was also impacted by the increase in the Result from Corporate Participations amounting to R$ 44.8 million as a result of booking the result from Pecém I TPP as equity income in accordance with IFRS 11, CPC 19 (R2). N et Income (R$ million) and N et M argin* (%) % 2.8% 45 2Q12 2Q13 * Net Margin excludes construction revenue Net Income Formation (R$ million) 85 (63) (0.2) 40 (28) 45 (18) ((4) Debt Net Income 2Q12 Gross Margin Manageable Expenditures Dep & Amort Corporate Participation Financial Results Inc. Tax & Soc. Contr. Minority interests Net Income 2Q13 Gross consolidated debt amounted to R$ 3,897.5 million on June 30, 2013, an increase of 8.9% in relation to March 31, 2013 when this same item stood at R$ 3,580.2 million, excluding Pecém I TPP debt. The increase reflects additional funding through the 2 nd Debenture Issue for EDP Energias do Brasil (R$ million) in April On June 30, 2013, of total gross debt, 2.23% was currency denominated and fully hedged, against 2.20% on March 31, 2013, and thus showing the quarter-on-quarter as unchanged. Gross Debt per Compa ny (R$ million)* EDP Bandeirante EDP Escelsa Energest Enerpeixe Investco** Jari Cachoeira Caldeirão Loans Debentures * Not considering intragroup exclusions of R$ 33.6 million ** Preferred shares of Investco classified as debt 1 EDP Holding 1 Note: Pursuant to Article 8 of the company s corporate bylaws, Investco s preferred shares enjoy, among others, the right to receive a fixed, cumulative annual dividend of 3% on the value of their respective participation in the capital stock. In the light of this characteristic, the shares were classified as a debt instrument in order to satisfy the definition of a financial liability due to the fact that the company is unable to avoid the passing on of cash or another financial asset to another entity as called for under paragraph 19 of CPC

76 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE 13 Taking into account cash and cash equivalents of R$ 1,175.2 million, net debt was R$ 2,722.3 million on June 30, 2013, an increase of 3.0% compared with March 2013 (R$ 2,643.7 million). This reflected the increase in debt already mentioned but partially offset by the increase of 25.5% in the balance of cash and cash equivalents compared with March 2013 (R$ million) - resulting from disbursement of the EDP debenture issue and the increase in the distributors cash position as a result of the release of CDE funds. 3,898 1,311 1,175 S.T. 2,586 L.T. Gross Debt Jun (-) Cash and Marketable Securities 2,722 Net Debt Jun The average cost of Group debt remained stable in June 2013 (an annual rate of 8.09%) compared with March 2013 (an annual rate of 8.08%) and taking into account the capitalization of interest on debt and charges incurred in the past 12 months. The average term of consolidated debt increased by 0.03 p.p to 3.13 years in June 2013 compared with 3.10 years on March 31, Short term debt as at June 30, 2013, represented 33.6% of gross company debt and totaling R$ 1,311.1 million compared with R$ 1,403.1 million on March 31, 2013, a reduction of 6.6%. Out of total short term debt, R$ million relates to the holding company, R$ million to distribution and R$ million to generation, not considering intra-group exclusions. Gross Debt by Indexer 06/ 30/ 2013 TJLP 24.0% Short - Long Term Debt/ Total Debt 60.8% 66.4% Fixed Rate 6.0% 39.2% 33.6% CDI 70.0% 3/31/2013 Short Term Long Term Debt Breakdow n (R$ million)* 478 1, EDP Bandeirante EDP Escelsa Energest Enerpeixe Investco Jari EDPE Current Balance * Do not consider eliminations 75

77 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE 13 Debt M at urit y Profile* (R$ m illion) 1,175 1, Cash and Marketable Securities After 2016 * Values include principal +charges + result from hedge operations At the end of 2Q13, the Company reported a Net Debt/EBITDA ratio of 1.8X. N et Debt/ EBITDA 1.1 x 1, x 1, x 1.8 x 1.8 x 2,517 2,644 2,722 Jun/12 Sep/12 Dec/12 Mar/13 Jun/13 Net Debt Net Debt/EBITDA Not taking into account the effects of the stake in Pecém I TPP 4. Investments Investments totaled R$ million in 2Q13, divided as follows: distribution -R$ 68.8 million, generation -R$ million and others -R$ 2.7 million. The increase in the quarter and in the first half of 2013 is due to the investments for the construction of generation projects, nominated Santo Antonio do Jari and Cachoeira Caldeirão HPP s. In the case of the distributors, values incorporate capitalized interest in the amount of R$ 1.6 million at EDP Bandeirante and R$ 532 thousand at EDP Escelsa and deducted from special obligations, being R$ 13.6 million at EDP Bandeirante and R$ 3.2 million at EDP Escelsa. At EDP Bandeirante, the variation of R$ 29.5 million in 2Q13 compared with the same period in 2013 is principally due to the effect of over-contracting revenue in the amount of R$ 18.0 million which was booked to special obligations in June 2012 and relates to the retroactive rebooking of amounts from October 2011 to March The remaining amount relates to network maintenance services and the execution of work on enhancing and expanding the network. At EDP Escelsa, there was an increase of 79.5% in the investments made in 2Q13 in relation to the same period a year earlier and reflecting investments in network maintenance services, the execution of work on enhancing and expanding the network, receipt of funding under the Light for All program and also the increase in the value of special obligations in 2Q12 as a result of the revision of amounts booked previously and adjusted in the period. 76

78 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE 13 Capex Breakdow n - 2Q13 Capex Breakdow n (R$ t housand) 68,843 Generation 64.5% Others 1.3% Distribution 34.2% 21,782 57, , ,685 2Q12 2Q13 Others Generation Distribution EDP Energias do Brasil s second quarter 2013 gross investments in distribution amounted to R$ 85.6 million, an increase of 28.8% in relation to Of this total, R$ 51.7 million (60.4%) was allocated to expanding lines, substations and distribution networks for connecting new customers and the installation of metering systems; R$ 20.4 million (23.8%) went to improving the network and substitution of equipment, obsolete and depreciated meters and reconductoring the power networks at the end of their useful lives; R$ 3.8 million (4.5%) was used for urban and rural universal access programs and the Light for All Program, providing consumer connection and access to energy services; and R$ 9.7 million (11.4%) was invested in telecommunications, IT and other activities such as infrastructure, commercial projects and combating losses. As for the generation segment between compared quarters, investments went largely to the construction of Santo Antônio do Jari HPP (82.5%) and the procurement of equipment for work on Cachoeira Caldeirão (12.3%). The remaining variations are detailed as follows: (i) Lajeado/Investco: the increase of R$ 1.8 million in relation to 2Q12 is due to higher investment in environmental protection in the second quarter; (ii) Energest : the reduction of 39.7% in relation to 2Q12 reflects payment rescheduling; (iii) Others: the increase is due to the acquisition of IT licenses. 77

79 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE 13 Capex (R$ thousand) 2Q13 2Q12 % 6M13 6M12 % Distribution 68,843 21, % 114,662 88, % EDP Bandeirante 29,143 (341) n.a. 43,788 36, % EDP Escelsa 39,700 22, % 70,874 52, % Generation 129,791 57, % 223, , % Enerpeixe % 1,449 1, % Energest 4,907 8, % 10,974 16, % Lajeado / Investco 1,283 (556) n.a. 2,027 (287) n.a. Jari 107,023 49, % 185,883 95, % Cachoeira Caldeirão 15,903 - n.a. 22,733 - n.a. Other 2, % 3,987 1, % Total 201,319 80, % 341, , % Capex - Distribution (R$ thousand) 2Q13 2Q12 % 6M13 6M12 % EDP Bandeirante Total Capex Net of Special Obligations 29,143 (341) n.a. 43,788 36, % (+) Special Obligations 13,560 32, % 27,909 28, % Gross Value 42,703 31, % 71,697 65, % (-) Interest Capitalization (1,577) (1,445) 9.1% (2,549) (2,821) -9.6% Gross Value less Interest Cap. 41,126 30, % 69,148 62, % EDP Escelsa Total Capex Net of Special Obligations 39,700 22, % 70,874 52, % (+) Special Obligations 3,222 12, % 8,328 15, % Gross Value 42,922 34, % 79,202 67, % (-) Interest Capitalization (532) - n.d. (1,136) (1,274) -10.9% Gross Value less Interest Cap. 42,390 34, % 78,066 66, % Distribution 83,516 65, % 147, , % 5. Capital Markets 5.1. Share Performance On June 30, 2013, EDP Energias do Brasil s shares were priced at R$ 11.33, closing 2Q13 reporting a depreciation of 6.5% but exceeding the performance of both Ibovespa (the BOVESPA stock index) and the Electric Energy Stock Index (IEE), which depreciated 15.8% and 8.4%, respectively, over the same period. On June 30, 2013, Group market capitalization was R$ 5.4 billion compared to R$ 5.8 billion on March 31, 2013, considering closing prices adjusted for profit distribution on the respective dates. EDP Energia s shares were traded on all the days the stock market was open for business during the quarter, totaling million shares negotiated and equivalent to a daily average of 2,049.9 thousand shares. Financial volume totaled R$ 1,545.1 million in 2Q13 with a daily average of R$ 24.5 million. EDP Energias do Brasil (EN BR3) % Price on March 31st, 2013 Price on June 30th, 2013 Note: Historical prices adjusted for earnings. Daily Average Volume (R$ million) Q12 3Q12 4Q12 1Q13 2Q13 78

80 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE ENBR3 x Indexes Performance (Base 100: 12/31/2012) IEE = -8.4% ENBR3 = -6.5% IBOV = -15.8% Volume ENBR3 (R$ TSD) 5.2. Capital Stock As at June 30, 2013, EDP Energia do Brasil s capital stock was represented in its totality by 476,415,612 common nominative shares. Of the total number of common shares, 232,602,924 represented the free float in accordance with BM&FBovespa s Novo Mercado Listing Regulations, with a further 840,675 shares held as treasury stock. Shareholder s base* Shareholder s base * 14.9% 2.3% 85.1% 97.7% National International Individual Investors Institutional Investors *Free Float (June 30,2013) The following chart shows the geographic distribution of the shares making up the Group s free float as at June 30, 2013: 14.9% 7.1% 1.8% 1.6% 27.6% 46.9% Asia Latin America North America Europe Oceania Brazil *Shares held in Brazil are not included in Latin America 79

81 PERFORMANCE COMMENTS OF EDP ENERGIAS DO BRASIL S.A. PERIOD JANUARY JUNE Shareholders Remuneration The Annual General Meeting of April 10, 2013 approved the allocation of net income with the distribution of dividends amounting to R$ million and Interest on Equity of R$ million. Additionally, the Meeting agreed to the distribution of a portion of retained earnings to be debited from the company s Retained Earnings Reserve Account in the amount of R$ 45.6 million, relative to the fiscal year Payout will be effected by December 31, 2013 on an unadjusted basis to holders of the Company s common shares as of the record date of the Annual General Meeting. 6. Subsequent Events Rescission of the indirectly controlled Couto Magalhães concession On July 10, 2013, the Federal Government Official Gazette published Law /2013. Among other provisions, this permits generation concessions which have not gone into commercial operation by June 30, 2013 to rescind their concession agreements. The law also assures the restitution to concessionaires of guarantees covering commitments under the concession agreement, non-payment for the use of public property during the term of the agreement and the reimbursement of costs involved with the preparation of studies or projects eventually to be approved in future tender bids. Since it complies with requirements under Law /2013, on July 19, 2013, Enercouto filed with ANEEL for ratification of the rescission of the Couto Magalhães HPP Concession Agreement originally proposed on March 15, The rescission of this concession agreement was contingent to the legal grounds for such action. This material may include forward-looking estimates and statements. These forward-looking estimates and statements are based largely on current forecasts and projections for future events and financial tendencies which affect or could affect our businesses. Many important factors could adversely affect EDP - Energias do Brasil s results, such as the forecasts in our forward-looking estimates and statements. Such factors include among others, the following: (i) the economic, political and demographic business environment in Brazil; (ii) interruptions to electricity supplies; (iii) electricity generation faults due to water shortages and interruptions in the transmission system, technical and operational problems or physical damage to our installations; (iv) changes in electric energy tariffs; (v) potential interruption or disturbance in services of EDP - Energias do Brasil s controlled companies; (vi) inflation, appreciation and depreciation of the Real; (vii) anticipated extinguishment of EDP - Energias do Brasil s controlled companies concessions by the public authority responsible for granting the concession; (vii) increased competition in the Brazilian electricity sector; (viii) the competence of EDP - Energias do Brasil in implementing its capital expenditures plan, including its ability to raise financing when necessary and under reasonable conditions; (ix) changes in consumer demand for electricity; and (x) current and future governmental regulations with respect to the electricity sector. The purpose of the words believe, can, could, seek, estimate, continues, anticipates, intends, expects and other similar words are to identify estimates and projects. The considerations on forward-looking estimates and statements include information pertaining to results and projections, strategy, financing plans, competitive position, sector economic-financial environment, potential growth opportunities, the effect of future regulations and the impact of competition. Such estimates and projections relate only to data in which these were expressed, the Group accepting no liability for publicly updating or revising any of these estimates in the light of new information, future events or any other factors. In view of the risks and uncertainties herein described, the forward-looking estimates and statements contained in this material may not occur. In view of these limitations, shareholders and investors should not make any decision based on the forward-looking estimates, projections and statements contained in this material. 80

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