Rio de Janeiro, November 8, 2017

Transcription

1 RESULTS

2 Rio de Janeiro, November 8, 2017 Transmissora Aliança de Energia Elétrica S.A. ("Taesa" or "Company ); BM&FBovespa: TAEE11), one of the largest Brazilian electric power transmission concessionaires, announces its results for the third quarter of 2017 today. The consolidated interim financial information was prepared according to the accounting practices adopted in Brazil ( BRGAAP ) and International Financial Reporting Standards ( IFRS ) issued by the International Accounting Standards Board - IASB, defined herein as Regulatory and IFRS Result, respectively. The presentation of those pieces of information is in compliance with Brazilian Securities Commission standards applicable to the preparation of Quarterly Information - ITR. The Regulatory Result presented below was also prepared based on the current framework of the Electricity Sector Accounting Manual, issued by the Brazilian Electricity Regulatory Agency (ANEEL), where all investments made in the construction of transmission lines are recorded as property, plant and equipment and the effects resulting from the application of ICPC 01 (R1) (IFRIC 12) are eliminated, including the tax impacts (deferred corporate income social contribution taxes and deferred PIS and COFINS) recognized on temporary differences arising from the application of this interpretation. It is important to mention that the Regulatory Result is not audited. To facilitate the understanding of the information presented in this document, the terms associated with the words Regulatory and IFRS follow the same principles and framework defined above for the Regulatory and IFRS Result, respectively. In line with accounting standards, Taesa does not proportionally consolidate the jointly-controlled and associated companies. Accordingly, income (loss) of ETAU, Brasnorte, Aimorés, Paraguaçu, ERB1 and of the TBE group are accounted under the equity method in both the IFRS and the Regulatory Result. Taesa's dividend declaration is performed based on the IFRS Result reviewed by the auditor. Conference Call in English November 9, 2017 Thursday Brasília 2:00 p.m. Nova York 11:00 a.m. Tel: or Dial in: Password: Taesa Marco Antônio Resende Faria Marcus Pereira Aucélio Cristiano Prado Grangeiro IR Contact CEO CFO and DRI IR Manager investor.relations@taesa.com.br Telephone

3 Consistent performance and solid cash generation from operations Taesa continues to present a solid and consistent operating performance during In the first nine months of 2017, the availability rate of Taesa s transmission lines was 99.99% and the Variable Portion (PV) totaled R$ 9.3 million (a discount equivalent to 0.7% of the Company s consolidated RAP), presenting a reduction of 58.2% compared to the PV recorded in the same period of In addition, the Company has maintained a strong cash generation, as a result of the financial discipline and focus on operational efficiency. Taesa s cash position recorded more than R$ 1 billion at the end of September Consequently, net debt amounted to R$ 2.4 billion and the Net Debt to EBITDA ratio fell to 1.6x at the end of this quarter, confirming the speed at which the Company is able to deleverage. Net income under IFRS for totaled R$ 97.3 million, a reduction of 55.3% compared to 3Q16, basically due to the still significant difference of the macroeconomic indexes, IGP-M and IPCA, recorded between the periods. In, the IGP-M presented accumulated deflation of 1.28% and the IPCA accumulated 0.20% of inflation. In the same period of 2016, the accumulated IGP-M was 2.02% and IPCA was 1.32%. It is important to point out that, even with this annual decrease, it was possible to observe a sequential improvement of 35.1% of net income as result of higher inflation, mainly of IGP-M, in the past months. In the 3rd quarter of 2017, the Company s Regulatory EBITDA totaled R$ million, 8.4% lower than in the same period of The Regulatory EBITDA margin was 86.9% in the quarter and 88.6% in the accumulated for the year. The reduction in the RAP of two concessions that have attained the 16th year of operation (TSN and ETEO) and some nonrecurring costs were the main reasons for the reduction in the period. Excluding these one-off events, the EBITDA margin would reach 88.0% this quarter. In October, Taesa issued R$ million in debentures, where R$ 255 million at IPCA % for a period of 7 years to fund the projects of Mariana and Miracema, one of the best conditions attained by a debenture of infrastructure in this market. Thereby, the Company is able to contribute the equity of the projects through this financing at the holding company at a lower cost, leveraging the returns of both of them. It is important to highlight that the Company currently has 7 projects under construction, acquired through greenfield auctions, which represent more than R$ 4.6 billion in investments and a total of R$ 825 million in Permitted Annual Revenues. Finally, the Company distributed, on August 31, R$ 69.9 million as dividends and interest on equity based on the results for the second quarter of 2017, in addition to the total amount of R$ million paid in May of this year based on the results for the fourth quarter of 2016 and first quarter of Keys Figures Consolidated R$ mn 3Q16 Chg. % 9M17 9M16 Chg. % Net Revenues Reg % 1, , % EBITDA Reg % 1, , % EBITDA Margin Reg. 86.9% 90.6% -3.7 pp 88.6% 89.4% -0.8 pp Net Revenues IFRS % , % Net Income IFRS % % Net Debt BS 2, , % 2, , % Consolidated and Associated Concessions R$ mn 3Q16 Chg. % 9M17 9M16 Chg. % Net Revenues Reg % 1, , % EBITDA Reg % 1, , % EBITDA Margin Reg. 87.6% 90.6% -3.0 pp 89.1% 95.7% -6.5 pp 3

4 4 1. Overview 1.1 Corporate Structure 2. Financial 2.1 Operational Performance RAP Cycle Net Revenues IFRS Costs, Expenses, Depreciation and Amortization IFRS EBITDA / EBITDA Margin IFRS Regulatory Net Revenues Regulatory Costs, Expenses, Depreciation and Amortization Regulatory EBITDA / EBITDA Margin Equity Method Net Financial Taxes Net Income Dividends and Interest on Equity Indebtedness Financial Statements Breakdown of the IFRS Revenues Financial Asset Income Statement (IFRS and Regulatory) EBITDA Reconciliation Taesa Balance Sheet TBE Balance Sheet Cash Flow 29

5 Corporate Structure The 34 transmission concessions/interest held by Taesa are segregated into: (i) 10 concessions making up the holding company (TSN, NVT, ETEO, GTESA, PATESA, Munirah, NTE, STE, ATE and ATE II), (ii) 5 full investees (ATE III, São Gotardo, Mariana, Miracema and Janaúba) and (iii) 19 shareholdings (ETAU, Brasnorte, Aimorés, Paraguaçu, ERB1 and TBE). TBE is a group of 14 shareholdings CEMIG ISA Brasil* Free Float 31.5% 14.9% 53.6% * ISA Investimentos e Participações do Brasil S.A. TBE 100% 100% 100% 100% 100% 52.6% 38.7% 50% 50% 50% 49.9% ATE III São Gotardo Mariana Miracema Janaúba ETAU Brasnorte Paraguaçu Aimorés ERB1 TBE Full Consolidation Equity in Net Income of Subsidiaries Corporate Structure of TBE* *TBE is the "trade name" representing a group of 14 concessions. TBE 50% 50% 50% 19% 22% 49% EATE ETEP ENTE ECTE ERTE (10) EBTE 100% 19% 100% 62% STC (1) ESDE (8) STC (1) ETSE (9) 80% Lumitrans (2) 38% ERTE (10) 10% Transleste (3) 10% 10% 18% 51% Transudeste (4) Transirapé (5) ERTE (10) EBTE (7) (1) EATE: 62%, ENTE 19%; Total Taesa: 40% (2) EATE (80%); Total Taesa: 40% (3) EATE (10%); Total Taesa: 5% (4) EATE (10%); Total Taesa: 5% (5) EATE (10%); Total Taesa: 5% (6) Total Taesa: 50% (7) Total Taesa: 74% (8) Total Taesa: 50% (9) Total Taesa: 19% (10) Total Taesa: 50% 100% ESTE (6) under construction 5

6 6 Operational Performance With a consistent operating performance over the years, Taesa presented, in the period from January to September 2017, a consolidated average availability rate of 99.99%, according to the chart below, which presents Taesa's consolidated performance, therefore, not considering ETAU, Brasnorte and TBE. Ø 99.98% 99.97% 99.98% 99.97% 99.98% 99.96% 99.99% M17 Line availability rate is a time measure, and is strictly an operating indicator. The calculation: number of hours during which the line was available divided by the number of hours contained in 1 year (8,760 hours), measured by stretches of 100km. (Line Extension x hours available)/100 (Line Extension x 8,670 hours)/100 x 100 The indicator that shows the impact of transmission line unavailability in the Company's income statement is the variable portion (PV). Due to the variable behavior of PV on the short term, the best way to understand the Company's performance is to analyze the annual PV value divided by the RAP, as shown in the chart below. Ø 1.0% 1.2% 1.0% 1.4% 1.3% 0.5% 0.7% M17 The PV of R$ 1.7 million in was mainly due to: (i) Emergency shutdown of Fixed Series Capacitor (INCL7-01) at Itacaiúnas substation, due to problems in Phase A damping resistor (ATE III); (ii) Emergency shutdown of the Assis- Taquaruçu line reactor RE4, at Assis substation, due to low level oil and Buchholz relay actuation (ETEO); (iii) Scheduled shutdown of Gurupi-Miracema line for internal inspection of circuit breaker MCDJ7-16 Phase B, due to internal failure suspect occurred on May 14 th 2017 (Novatrans); and (iv) Automatic shutdown of Serra da Mesa-Gurupi line, due to the occurrence of burning in the region (Novatrans).

7 RAP Cycle On June 27, 2017, ANEEL published Ratifying Resolution REH 2.258/17 that established the Annual Permitted Income (RAP) of the transmission concessions for the cycle, becoming effective as of July 1, The concessions adjusted by IGP-M (Category II) have been monetarily restated by approximately 1.6%, and the concessions adjusted by IPCA (Category III) have been monetarily restated byapproximately 3.6%. RAP (R$ mn) Cycle Cycle IGP-M adjustment 11.1% 1.6% Novatrans TSN² Munirah GTESA PATESA ETAU¹ ETEO NTE STE² ATE I ATE II² EATE¹ ETEP¹ ENTE¹ ECTE¹ ERTE¹ Lumitrans¹ Transleste¹ Transirapé¹² Transudeste¹ Subtotal 2, ,110.3 IPCA Adjustment 9.3% 3.6% ATE III São Gotardo³ Mariana Miracema Janaúba Aimorés Paraguaçu Brasnorte¹²³ STC EBTE¹²³ ESDE¹³ ETSE¹³ ESTE ERB Subtotal Total 2,818 2,846 ¹ Value of RAP proportional to the interest of Taesa in July 2017 ² Including reinforcement projects ³ Added PIS/COFINS 4 Under construction 5 Category II concession with IPCA adjustment Considering the controlled concessions, jointly-controlled and associated companies 1, the total RAP (operational and under construction) of Taesa for the cycle is R$ 2,846 million, of which 60% at the holding company level. Since 7 concessions are still under construction (Mariana, Miracema, Janaúba, Paraguaçu, Aimorés, ESTE and ERB1), Taesa's operating RAP for the cycle was R$ 2,304 million. The RAP adjustment for the cycle was different from the inflation rate in the following concessions: (i) Novatrans considered a RAP reduction of 50% in part of its functions and a reinforcement start-up; (ii) TSN, EATE and ETEP considered a 50%-reduction of RAP for all its functions; (iii) EATE also considered a tariff review in a reinforcement; (iv) ETEO and ECTE presented a full 50%-RAP reduction after the partial reduction presented in the previous cycle ( ); (v) PATESA, ETAU and Transirapé started reinforcement operations; (vi) ETSE considered a tariff review in May 2018; (vii) STC had an early start-up of reinforcements in July 2016 (scheduled for November 2016) and the tariff review effect. The ERB1 concession was acquired (50% stake) in the transmission auction nº 005/2016, dated April 24, The published RAP amounts for ATE III, São Gotardo, Mariana, Miracema, Janaúba, Aimorés, Paraguaçu, Brasnorte, EBTE, STC, ESDE, ETSE, ESTE and ERB1 concessions should be grossed up of PIS/COFINS taxes. Cat 3 RAP per Category 22% 79% Cat 2

8 8 Reduction of 50% in RAP Technical Note nº 183/2017-SGT/ANEEL, dated 06/22/2017, approved by the REH nº 2.258, dated 06/27/2017, established the annual permitted income ( RAP ) related to transmission facilities under the responsibility of concessionaires for the cycle. The transmission concession contracts auctioned between 1999 and 2006 (Category II) provide for a 50% reduction in RAP (Basic Network) as of the 16th year of commercial operation of the facilities. Considering that the concession contracts include facilities whose associated RAP portion will be reduced by 50% on different dates throughout the cycle, an equivalent RAP was calculated to be received by the concessionaires over this cycle, considering the pro-rata of the full RAP amount from 7/1/2017 until the end of the 15th year of the facilities commercial operation, and the pro rata of the reduced RAP amount (50% of the full RAP amount) from the starting date of the 16th year of the facilities commercial operation until 6/30/2018. For the and cycles, six concessions reached or will reach the 16th year of operation: Novatrans: 6 transmission functions (representing 16.3% of Novatrans RAP) will reach the 16th year of operation on 6/3/2018. In the cycle, the other transmission functions of Novatrans will reach the 16th year of operation: 7 functions (19.4% of RAP) on 12/8/2018; 8 functions (19.1% of RAP) on 12/23/2018, and 18 functions (45.2% of RAP) on 4/8/2019. TSN: 47 transmission functions (representing 93.7% of TSN's RAP) will reach the 16th year of operation on 3/4/2018; 2 functions (4.2% of RAP) on 4/5/2018; 4 functions (0.7% of RAP) on 5/22/2018; and 8 functions (1.4% of RAP) on 6/3/2018. EATE: 5 transmission functions (representing 19.4% of EATE s RAP) will reach the 16th year of operation on 2/1/2018; 10 functions (46.5% of the RAP) on 2/20/2018; and 7 functions (34.1% of RAP) on 3/10/2018. ETEO: 13 transmission functions (representing 100% ofeteo s RAP) reached the 16th year ofoperation on 10/19/2016. ETEP: 4 transmission functions (representing 100% of ETEP s RAP) reached the 16th year of operation on 8/25/2017. ECTE: 3 transmission functions (representing 70.4% of the ECTE s RAP) reached the 16th year of operation on 3/9/2017; and 4 functions (29.6% of RAP) on 3/26/2017.

9 Net Revenues under IFRS Net Revenues under IFRS for totaled R$ million, down 41.1% in relation to 3Q16. As seen in the previous quarter, the lower inflation rates recorded in compared to 3Q16 were the major factor for this decline. Given the predictability of the inflation adjustment on the Company's revenues, stated by the concession agreement, Taesa recognizes these effects monthly. Thus, the effect of inflation is diluted throughout the months of the year, based on the IGP-M or IPCA inflation indexes recorded in the previous month. The indexes used for the monetary restatement of the third quarter of 2017 were: IGP-M of -0.66%, -0.72% and 0.10%, and IPCA of -0.23%, 0.24% and 0.19% for the months of June, July and August 2017, respectively. In the third quarter of 2016, the IGP-M recorded 1.68%, 0.18% and 0.15%, and the IPCA 0.35%, 0.52% and 0.45% in the respective months. R$ mn Consolidated Consolidated and Associated Concessions IFRS Net Revenues 3Q16 Chg. % 3Q16 Chg. % Operation and Maintenance % % Remuneration of Financial Asset % % Financial Asset - Monetary Restatement (43.8) (65.1) Construction % % Total IFRS Revenues % % Variable Portion (PV) (1.7) (1.9) -7.3% (3.9) (1.3) 192.8% Other Revenues (4.1) (0.2) Total Gross Revenues % % PIS/COFINS (9.5) (19.8) -52.0% (11.3) (24.9) -54.7% Service Tax (ISS) (0.04) (0.02) 54.2% (0.04) (0.02) 54.2% Industry Charges (19.8) (21.0) -5.5% (24.3) (26.1) -6.8% Deductions (29.4) (40.8) -28.0% (35.6) (51.0) -30.1% Total Net Revenues % % 9 The annual variation and the breakdown of Taesa's net revenues mainly reflects the following aspects: O&M Revenues: 1.7% y.o.y increase due to the inflation adjustment in the cycle (IGP-M of 1.6% and IPCA of 3.6%). Remuneration of the Financial Asset: Calculated by multiplying the internal rate of return (IRR) by the financial asset. The 14.8% annual decrease is mainly due to the amortization of the financial asset and the negative monetary restatement of the financial asset recorded between May and August 2017 both factors reduce the financial asset position. Monetary Restatement of the Financial Asset: Based on the monthly inflation adjustment. As seen in 2Q17, the variation between and 3Q16 is due to the still significant difference between the figures of the macroeconomic indexes recorded in these two quarters, mainly for the IGP-M. In 2017, between June and August (basis for the monetary restatement), the accumulated IGP-M was -1.28% and the IPCA was 0.20%. In the same period of 2016, accumulated IGP-M was 2.02% and IPCA 1.32%. Construction Revenues: The negative annual variation of R$ 3.7 million is mainly due to construction costs related to improvements and reinforcements in 3Q16 for the Novatrans, ETEO, NTE and Patesa concessions, generating consequently construction revenues in that quarter. Revenues for came mainly from the constructions in Mariana, Miracema and Janaúba. Variable Portion (PV): Annual decrease of 7.3% due to the improvement of Taesa s operational performance. Other Revenues: The annual decrease is due to the 2014 tariffs review of reinforcements in the TSN concession, which was applied only in 2016 based on Technical Note No. 196/2016-SGT/ANEEL, whose adjustments, dating back to 2014, were made in two installments, one in the cycle (4Q16) and the other in the cycle (). Deductions: 28.0% y.o.y decrease mainly due to the reduction in PIS/COFINS taxes following the reduction in gross revenues under IFRS (taxes vary according to each concession see page 16).

10 10 Costs, Expenses, Depreciation and Amortization under IFRS Costs, Expenses and D&A added up to R$ 81.2 million in, 20.5% up year-on-year, as a result of some one-off effects. The changes in costs and expenses under IFRS, in the annual comparison, were mainly due to the following events: (i) 22.1% increase in the "Personnel" line due to the capitalization of personnel costs in the first half of 2016 in maintenance, reinforcement and improvement projects, recorded in 3Q16, to the payroll adjustment pursuant to the collective bargaining agreement, and also to the contract termination of 3 executives under statutory-bargaining regime to hire under the pure statutory regime; (ii) costs related to the 4 th issuance of debentures and higher expenses with other third party services (surveillance, easement lines strips and travelling); and (iii) increase in Other Costs due to the cost reallocation of indemnification of transmission lines strips to construction costs, occurred in 3Q16, and to higher costs related to tax incentive laws (Rouanet Law, Sports Incentive Law and others). In the Material costs, the drop in construction costs was offset by the increase in O&M costs. Costs and expenses under IFRS of TBE, ETAU and Brasnorte represented in the quarter R$ 9.9 million (-20.6% vs 3Q16), R$ 1.1 million (-68.1% vs 3Q16), and R$ 0.5 million (-41.2% vs 3Q16), respectively. R$ mn Consolidated Consolidated and Associated Concessions IFRS Costs, Expenses and D&A 3Q16 Chg. % 3Q16 Chg. % Personnel (31.7) (25.9) 22.1% (36.0) (30.3) 19.0% Material (26.5) (26.4) 0.4% (27.9) (32.2) -13.6% Third Party Services (14.3) (13.1) 8.7% (19.3) (18.7) 2.9% Others (7.8) (1.2) 535.9% (8.7) (2.3) 273.9% Total (80.3) (66.7) 20.3% (91.8) (83.6) 9.9% Depreciation and Amortization (0.9) (0.7) 34.4% (1.2) (0.9) 33.7% Total (81.2) (67.4) 20.5% (93.0) (84.5) 10.1% EBITDA / EBITDA margin under IFRS EBITDA under IFRS in totaled R$ million with EBITDA margin of 62.6%. The annual decrease in the EBITDA under IFRS is mainly due to the difference in the macroeconomic indexes, both IGP-M and IPCA, recorded between 3Q16 and, which affected the revenues from the Monetary Restatement of the Financial Asset, as described in the section Net Revenues under IFRS (page 9). EBITDA under IFRS for TBE was R$ 15.1 million (-81.1% vs. 3Q16), ETAU R$ 1.2 million (-65.3% vs. 3Q16) and Brasnorte R$ 1.3 million (- 53.9% vs. 3Q16). EBITDA under IFRS is not a measure to reflect the Company's operating cash generation, since the IFRS standards creates a deviation between P&L and Cash Flow. R$ mn Consolidated Consolidated and Associated Concessions IFRS EBITDA 3Q16 Chg. % 3Q16 Chg. % Net Revenues % % Costs and Expenses (80.3) (66.7) 20.3% (91.8) (83.6) 9.9% EBITDA % % EBITDA margin 62.6% 81.7% pp 62.4% 82.1% pp

11 Regulatory Net Revenues Regulatory Net Revenues in added up to R$ million, 4.5% lower than in 3Q16. The Regulatory Net Revenues is not affected by the recognition of the inflationary effects described in the section Net Revenues under IFRS (page 9), since this recognition is an accounting definition under IFRS on the monetary restatement of the financial asset that, thus, influences Net Revenues under IFRS. The negative variation in the RAP is mainly due to the 50% RAP reduction for the TSN concession, which reached the 16 th year of operation in the cycle, and also as a reflex of the 50% drop in ETEO s RAP for the cycle, whose impact on the RAP was partially reduced by the inflation readjustment of the cycle. In addition, the Other Revenues line was impacted by the tariffs review of TSN reinforcements, as previously mentioned. These effects were the main reasons for the 4.5% y.o.y reduction in the Regulatory Net Revenues. R$ mn Consolidated Consolidated and Associated Concessions Regulatory Net Revenues 3Q16 Chg. % 3Q16 Chg. % RAP Concessions % % PV (1.7) (1.9) -7.3% (3.9) (1.3) 192.8% Service Revenues % % Other Revenues (4.1) (0.2) Total Gross Revenues % % PIS/Cofins (20.3) (22.6) -10.0% (25.2) (28.0) -10.1% Service Tax (0.04) (0.02) 54.2% (0.04) (0.02) 54.2% Consumer's Fee (19.8) (21.0) -5.5% (24.3) (26.1) -6.8% Deductions (40.2) (43.6) -7.8% (49.6) (54.1) -8.4% Total Net Revenues % % Regulatory Costs, Expenses, Depreciation and Amortization Costs, Expenses and D&A totaled R$ million in, 11.2% higher when compared to 3Q16. The differences between the Regulatory and IFRS, in the Costs, Expenses and D&A, are observed in material expenses and in depreciation and amortization. The IFRS Result accounts for the investment in the construction of new assets, reinforcements and improvements as material expenses, at the same time that it capitalizes construction revenues in the financial asset. The Regulatory Result depreciates investments in property, plant and equipment (fixed assets). As explained before, the changes in costs between and 3Q16 are mainly explained by the following events: (i) 22.1% increase in the "Personnel" line due to the capitalization of personnel costs in the first half of 2016 in maintenance, reinforcement and improvement projects, recorded in 3Q16, to the payroll adjustment pursuant to the collective bargaining agreement, and also to the contract termination of 3 executives under statutory-bargaining regime to hire under the pure statutory regime; (ii) costs related to the 4 th issuance of debentures and higher expenses with other third party services (surveillance, easement lines strips and travelling); (iii) increase in Other Costs due to the cost reallocation of indemnification of transmission lines strips to construction costs, occurred in 3Q16, and to higher costs related to tax incentive laws (Rouanet Law, Sports Incentive Law and others); and (iv) decrease in depreciation and amortization, mainly due to write-offs in property, plant and equipment during R$ mn Consolidated Consolidated and Associated Concessions Regulatory Costs, Expenses and D&A 3Q16 Chg. % 3Q16 Chg. % Personnel (31.7) (25.9) 22.1% (36.0) (30.3) 19.0% Material (0.7) (0.7) -2.5% (1.0) (1.0) -5.3% Third Party Services (14.3) (13.1) 8.7% (19.3) (18.7) 2.9% Others (7.8) (1.2) 535.9% (8.7) (2.3) 273.8% Total (54.5) (41.0) 32.8% (64.9) (52.3) 24.1% Depreciation and Amortization (47.2) (50.4) -6.4% (58.5) (61.6) -5.0% Total (101.7) (91.5) 11.2% (123.4) (113.9) 8.3%

12 Regulatory EBITDA/ EBITDA margin The Regulatory EBITDA added up to R$ million, 8.4% lower than that recorded in 3Q16, and an EBITDA margin of 86.9%. In the third quarter of 2017, Regulatory EBITDA was 8.4% lower when compared to the same period of 2016, due to the reduction in the RAP of 2 concessions and to the one-off effects in the operational costs and expenses, as explained on the previous page. As a result, EBITDA margin reached 86.9% in, a decrease of 3.7 pp over 3Q16. Excluding the one-off effects (adjustment of TSN s reinforcement tariffs review, capitalization of personnel costs in projects recorded in 3Q16, contract termination of 3 executives to hire under the pure statutory regime, costs of the 4 th issuance of debentures, cost reallocation of the indemnification of transmission lines strips in 3Q16), the Regulatory EBITDA margin would reach 88.0% in this quarter with a decrease of 1.4 pp over 3Q16. Note that in power transmission sector, Regulatory EBITDA is an key operational and financial performance indicator, due to its adherence to the Company's effective operating cash flow. Breakdown of Regulatory EBITDA The table below shows how the Regulatory EBITDA would be, considering all the concessions of the Taesa group proportionally. It is important to note that the consolidated earnings under Brazilian GAAP does not include the jointlycontrolled and associated companies (ETAU, Brasnorte and TBE). Amounts in R$ mn Consolidated Consolidated and Associated Concessions Regulatory EBITDA 3Q16 Chg. % 3Q16 Chg. % Net Revenues % % Costs and Expenses (54.5) (41.0) 32.8% (64.9) (52.3) 24.1% EBITDA % % EBITDA margin 86.9% 90.6% -3.7 pp 87.6% 90.6% -3.0 pp Taesa EBITDA: R$ mn Margin: 86.9% Net Revenues R$ mn Opex R$ 54.5 mn EBITDA R$ mn Margin: 87.6% ETAU (52.56%) EBITDA: R$ 4.8 mn Margin: 85.7% Brasnorte (38.66%) EBITDA: R$ 1.8 mn Margin: 77.3% Net Revenues R$ 5.6 mn Opex R$ 0.8 mn Net Revenues R$ 2.3 mn Opex R$ 0.5 mn 12 TBE (49.99%) EBITDA: R$ 87.9 mn Margin: 90.6% Net Revenues R$ 97.1 mn Opex R$ 9.2 mn

13 13 Equity Method under IFRS The Equity Method under IFRS in totaled R$ 14.7 million, down 73% compared to 3Q16, reflecting lower inflation rates. The 72.8% variation in income (loss) under IFRS of jointly-controlled and associated companies in the comparison between the third quarter of 2017 and the same period of 2016 was mainly due to the lower macroeconomic indexes that monetarily restated the financial asset (IGP-M and IPCA recorded -1.28% and 0.20% in, respectively, and 2.02% and 1.32% in 3Q16, respectively). The accumulated indexes for the third quarter refer to the months of June, July and August of the year. R$ mn IFRS Equity Method 3Q16 Chg. % ETAU % Brasnorte % TBE % Aimorés (0.2) - - Paraguaçu (0.3) - - ERB1 (0.2) - - Total Equity Method % Regulatory Equity Method The Regulatory Equity Method in added up to R$ 44.6 million, 10.0% above the 3Q16. The Regulatory Equity Method was 10.0% lower compared to the same period in 2016, mainly due to the decrease in RAP in Taesa and TBE concessions, the reversal of R$ 1.1 million in the PV line for ENTE (TBE) in 2016, and the results from Aimorés, Paraguaçu and ERB1 concessions. The difference between Taesa s equity method and the sum of the results of ETAU, Brasnorte, Aimorés, Paraguaçu, ERB1 and TBE is due to the amortization of the goodwill arising from the allocation of the price paid in the acquisition of TBE. R$ mn Regulatory Equity method 3Q16 Chg. % ETAU % Brasnorte % TBE % Aimorés (0.3) - - Paraguaçu (0.3) - - ERB1 (0.2) - - Result of Associated Companies % Amortization of goodwill - TBE Total Equity Method %

14 14 Net Financial Net financial expenses totaled R$ 47.4 million in, 49.0% lower than in 3Q16. R$ mn Consolidated Consolidated and Associated Concessions Net Financial Expenses 3Q16 Chg. % 3Q16 Chg. % Financial Revenues % % Revenues from financial investments % % Financial Expenses (67.6) (108.8) -37.8% (80.7) (132.7) -39.2% Interest expenses (59.2) (83.7) -29.2% (71.2) (102.9) -30.8% Monetary and exchange variations (8.2) (24.6) -66.6% (9.2) (28.4) -67.6% fair value adjustment % % Other financial expenses/revenues (2.3) (2.3) -1.1% (2.4) (3.2) -24.9% Total (47.4) (93.0) -49.0% (58.1) (114.6) -49.3% The positive variation of 27.9% in financial revenues in the annual comparison is due to the greater accumulation of cash during 2017 as a result of lower volume of dividend distribution and lower debt amortization of principal and interest in the period, making the average cash position of higher when compared to the period of The 29.2% annual decrease in interest is mainly explained by the reduction in gross debt (in December 2016, the 2nd and 4th issuances of debentures were amortized) and by the fall in IPCA and CDI indexes. The 66.6% y.o.y decrease in monetary and foreign exchange variations occurred due to the fall in the IPCA index between the periods compared. The increase in the adjustment to fair value was due to the mark-to-market variation of the 4131 debt.

15 15 Taxes The reduction in income and social contribution taxes under IFRS in the comparison between the third quarter of 2017 and the same period of 2016 is due to the reduction in the Company's net income. Following the decrease in net income, the SUDAM/SUDENE tax benefit presented a negative variation in the annual comparison, totaling R$ 2.1 million in. In addition, in 2016 the tax benefit included the use of the ATE II benefit, which is in the process of renewal for Furthermore, the result was also impacted by the payment of interest on equity (JCP) in the amount of R$ 69.2 million, which generated a tax benefit of R$ 23.5 million in the quarter. The SUDAM/SUDENE tax benefit is calculated based on the net income under IFRS of each concession. These benefits are tax incentives granted by the Superintendency of Development for the Amazon (SUDAM) and the Superintendency of Development of the Northeast (SUDENE) in activities directly related to production in the region, and they reduce 75% of income tax due to exploration of transmission concessions. R$ mn IFRS Regulatory Reconciliation of income tax 3Q16 Chg. % 3Q16 Chg. % Pretax Profit % % IRPJ ans CSLL rate of 34% (34.4) (87.8) -60.9% (106.3) (102.6) 3.5% Equity method % % SUDAM/SUDENE % % Interest on Equity Paid/Received % % Other 0.1 (0.1) % % IRPJ and CSLL recognized in profit (3.7) (40.8) -90.9% (64.1) (56.9) 12.7% Effective Rate 3.7% 15.8% pp 20.5% 18.9% 1.7 pp Effective Rate - IFRS Effective Rate - Regulatory Equity Method Fiscal Benefit IOE Paid/Received Other Effective Rate 34% 34% 34% 34% 8% 6% 6% 6% 5% 2% 6% 5% 5% 1% 7% 7% 12% 0% 0% 1% 21% 14% 15% 10% 9M16 9M17 9M16 9M17

16 16 The table below shows the tax regime of each concession, and indicates those that have a tax benefit, the benefit end date and the PIS and COFINS rate of each concession. According to the Law 12,973, in July 2015 there was a change at the presumption base to 32% for assets within the Lucro Presumido fiscal regimen. Concession Tax regime Tax benefit % area End PIS COFINS TSN Real Sudene 84% % 3.00% NVT Real Sudam 73% % 3.00% GTESA Real Sudene 100% % 3.00% PATESA Real Sudene 100% % 3.00% Munirah Real Sudene 84% % 3.00% ETEO Real % 3.00% NTE Real SUSPENDED % 3.00% STE Real % 3.00% ATE I Real % 3.00% ATE II Real Being Renewed % 7.60% ATE III Real Sudam 100% % 7.60% São Gotardo "Presumido" % 3.00% Mariana "Presumido" % 3.00% Miracema "Presumido" % 3.00% Janaúba Real % 7.60% Aimorés "Presumido" % 3.00% Paraguaçu "Presumido" % 3.00% ETAU Real % 3.00% BRASNORTE Real Sudam 100% % 7.60% EATE Real Sudam 100% % 3.00% ENTE Real Sudam 100% % 3.00% ECTE Real % 3.00% ETEP Real Sudam 100% % 3.00% ERTE "Presumido" % 3.00% LUMITRANS "Presumido" % 3.00% EBTE Real Sudam 100% % 7.60% ESDE "Presumido" % 7.60% STC "Presumido" % 3.00% ETSE "Presumido" % 3.00% ESTE Real % 3.00% ERB1 "Presumido" 0.65% 3.00%

17 17 Net income Net Income IFRS added up to R$ 97.3 million, 55.3% lower compared to 3Q16. The equity method is added to the comparisons, reflecting the accounting standard. x 3Q16: IFRS in Summary % (-120.2) Q16 Net Income Δ Net Revenues Δ Costs, Expenses and D&A Δ Equity Method Δ Net Financial Result Δ Taxes Net Income Net Income: IFRS x Regulatory The table below presents Net Income, comparing IFRS results to regulatory results % (-151.1) Regulatory Net Income Δ Net Revenues Δ Costs, Expenses and D&A Δ Equity Method Δ Taxes IFRS Net Income

18 18 Dividends and Interest on Equity On August 31, 2017, Taesa distributed R$ 69.9 million as interim dividends and interest on equity (JCP) related to the second quarter of This amount was divided into (i) interim dividends of R$ 675 thousand (approx. R$ /Unit) and (ii) interest on equity of R$ 69.2 million (approx. R$ /Unit). The approval occurred at the Board of Director s meeting held on August 11, and shares began trading as ex-dividends and interest on equity as of August % 95% 95% 95% 95% 95% 87% 88% 91% 94% 91% 91% Extra (*) M17 Payout IFRS Net Income (R$ mn) Dividends and JCP (R$ mn) * Reserve under IFRS

19 19 Indebtedness The Company's Gross Debt added up to R$ 3,503 million and Cash Balance of R$ 1,064 million, resulting in a Net Debt of R$ 2,439 million. R$ mn Net Debt % Outst. Debt 2Q17 % Outst. Debt Chg.% Short Term 1, % 1, % 5.7% TJLP % % 1.0% Fixed Coupon 9 0.3% 9 0.3% 0.0% CDI % % 3.2% IPCA % % 37.9% Long Term 2, % 2, % -0.1% TJLP % % -7.7% Fixed Coupon % % -5.3% CDI % % -2.5% IPCA 2, % 2, % 0.4% Total Debt¹ 3,503 3, % (-) Cash and Cash Equivalents² (1,064) (720) 47.8% (=) Net Debt¹ 2,439 2, % 1 - Gross and net debt include the balance of derivative financial instruments. 2 - The amount of cash and cash equivalents is the sum of Cash and cash equivalents and Securities lines. The net debt variation between and 2Q17 was mainly due to operating cash generation in the period and also to the net effect of R$ 44.9 million related to the dividends and interest on equity received by the jointly-controlled subsidiaries and associated companies versus the dividends and interest on equity paid by the Company. Consolidating proportionally the jointly-controlled subsidiaries and associated companies, total gross debt would be R$ 4,047 million, and cash balance would total R$ 1,180 million, considering the following amounts: (i) TBE debt in the amount of R$ million and cash/investments of R$ million; (ii) ETAU debt in the amount of R$ 15.2 million cash/investments of R$ 6.9 million; and (iii) Brasnorte cash/investments in the amount of R$ 2.2 million. Considering the proportional net debt of jointly-controlled subsidiaries and associated companies, the net debt to EBITDA ratio stood at 1.6x in, 24.5% lower than the ratio of 2.1x recorded in 3Q16. Debt per Company (R$ MLN) Capital structure Taesa (Book Value) Company Gross debt (R$ thousand) Cash and Cash Equivalents (R$ thousand) Net debt (In thousand of reais) TAESA 3,503 1,064 2,439 Brasnorte (38.7%) ETAU (52.6%) TBE (49.99%) TOTAL 4,047 1,180 2,867 Net debt 61% 39% Shareholders' equity

20 The debt of Taesa, jointly-controlled and associated companies is detailed in the table below, proportionally. Company Creditor Index Taesa 2nd Debentures 3rd Debentures Principal (R$ / 000) Interest (R$ / 000) Cost Issue Rating Maturity Amort Coupons per Year CDI 122,497 3,838 CDI + 1.6% Aa1.br Dec Annual 1 CDI 72,497 2,271 CDI + 1.6% Aa2.br Dec Annual 1 CDI 664,930 78,410 CDI +0.8% Br.AAA Oct Bullet 1 IPCA 1,090,188 50,332 IPCA % Br.AAA Oct Annual 1 IPCA 965,004 46,850 IPCA % Br.AAA Oct Annual 1 SWAP - CITIBANK* CDI 350,000 6, % CDI - Sep Bullet 1 FINAME Fixed Coupon % - Aug Monthly FINAME TJLP TJLP + 4.2% - Aug Monthly 12 FINAME Fixed % - Jul Monthly 12 FINAME Fixed 13, % - Dec Monthly 12 FINAME Fixed % - Aug Monthly 12 FINAME Fixed 21, % - Jun Monthly 12 SGT FINAME Fixed 12, % - Dec Monthly 12 BNDES BoC BoC + 4% - Jan Monthly 12 TJLP 1,037 4 TJLP + 4% - Jan Monthly 12 ETAU 1st Debentures CDI 5, % CDI - Dec Bullet 1 BNDES Selic 3, SELIC + 3,76% - Aug Monthly 12 BNDES TJLP 3,164 5 TJLP + 5,20% - Aug Monthly 12 FINAME Fixed 1, % - Jan Monthly 12 2nd Debentures CDI 14, CDI % Aaa.br Oct Semiannual 2 3rd Debentures CDI 62, CDI % - Mar Quarterly 4 4rd Debentures CDI 56, % CDI - Aug Quarterly 4 EATE 5th Debentures - 1st CDI 62, % CDI - Sep Monthly 12 5th Debentures - 2nd CDI 26, % CDI - Sep Monthly 12 6ª Debêntures CDI 34, % CDI - Sep Monthly 12 EBTE BNDES TJLP 64, TJLP % - May Monthly 12 Fixed 4, % - Nov Monthly 12 2nd Debentures CDI 3, CDI % Aa2.br Oct Semiannual 2 ECTE 3rd Debentures CDI 12, CDI % - May Quarterly 4 4rd Debentures CDI 14, ,75% CDI - Sep Monthly 12 2nd Debentures CDI 87,460 1, % CDI - Aug Quarterly 4 ENTE 3rd Debentures - 1st CDI 13, % CDI - Sep Quarterly 4 3rd Debentures - 2nd CDI 5, % CDI - Sep Quarterly 4 ETEP 2nd Debentures CDI 24, % CDI - Aug Quarterly 4 ESDE BNDES TJLP 7, TJLP % - Apr Monthly 12 Fixed 3, % - Sep Monthly 12 ETSE BNDES TJLP 6, TJLP % - Nov Monthly 12 BNDES Fixed 5, % - Nov Monthly 12 BDMG Fixed % - Mar Monthly 12 TRANSLESTE BNB Fixed % - Mar Monthly 12 1st Debentures CDI 1, % CDI - Aug Quarterly 4 2nd Debentures CDI 1, % CDI - Sep Monthly 12 BDMG Fixed % - Jul Monthly 12 BDMG Fixed % - Jan Monthly 12 BDMG Fixed % + TJLP - Apr Monthly 12 TRANSIRAPÉ BDMG Fixed % + TJLP - Oct Monthly 12 1st Debentures CDI CDI % - Nov Semiannual 2 2nd Debentures CDI 1, ,75% CDI - Sep Mensal 12 Mutuo CDI % + TJLP - Nov Bullet 1 BNDES Fixed % - Apr Monthly 12 TRANSUDESTE 1st Debentures CDI CDI % - Nov Semiannual 2 2nd Debentures CDI 2, ,75% CDI - Sep Monthly 12 Total 3,853, ,582 *The debt was denominated in USD indexed to the Libor but, since it has a swap for CDI, the final value of the debt with the swap balance was considered.

21 21 Breakdown of the Revenues under IFRS Remuneration of the Financial Asset is the result of the return rate multiplied by the Financial Asset balance. Monetary Restatement of the Financial Asset is the monthly recognition of inflationary effects. In the Income Statement (P&L), the Remuneration of the Financial Asset, the Monetary Restatement of the Financial Asset and the Construction Revenues are accounted as revenues, as shown in the table below. O&M Revenues are annually adjusted by inflation (IGPM or IPCA), similarly to RAP. The Variable Portion (PV) is the penalty due to the unavailability of the lines (see details on page 6). R$ mn Concession Financial Asset Income FA - Monetary adjustment Construction O&M PV NVT 39.9 (10.1) (0.0) 27.9 (1.3) TSN 16.9 (5.0) (0.1) 51.7 (0.1) MUN 2.4 (0.8) GTE 0.7 (0.2) PAT 2.2 (1.0) ETE 8.4 (3.7) (0.2) ETA 1.0 (0.9) (0.0) BRA (0.1) NTE 12.9 (3.3) (0.6) STE 7.3 (2.9) (0.1) ATE 15.0 (6.7) ATE II 19.9 (10.2) (0.1) 14.9 (0.1) ATE III (0.8) SÃO GOTARDO (0.0) EATE 14.3 (9.6) (0.5) EBTE (0.1) ECTE 1.1 (0.8) ENTE 8.9 (6.6) (1.5) ERTE 1.9 (1.6) (0.0) ETEP 2.8 (2.0) Lumitrans 0.9 (0.8) STC ESDE ETSE ESTE MARIANA MIRACEMA Janaúba ERB Total (65.1) (3.9) The consolidated amount is the sum of each concession weighted by Taesa's interest

22 22 Financial Asset Financial Asset 2Q17 Financial Asset Income Mon. Adj. of Financial Asset O&M Revs Const. Revs RAP Financial Asset Concession Financial Asset 3T17 (R$ mn) Annual Rate Monthly O&M (R$ mn) cycle '17-18 RAP Concessions³ (R$ mn) Cycle '17-18 End RAP reduction Concessions NVT 1, % Dec-30 Jun-18 TSN % Dec-30 Jun-18 TSN Reinforcement % Dec-30 No MUN % Feb-34 Oct-20 GTE % Jan-32 Aug-18 PAT % Dec-32 Sep-19 ETE % May-30 Oct-16 ETA % Dec-32 Apr-20 BRA¹ % Mar-38 No BRA¹ Reinforcement 5 5.7% Mar-38 No NTE % Jan-32 Jan-19 STE % Dec-32 Jul-19 ATE I % Feb-34 Dec-20 ATE II % Mar-35 Jan-22 ATE III¹ % Apr-36 Mar-23 ATE III¹ Reinforcement % Apr-36 No Sâo Gotardo¹ % Sep-42 No EATE % Jun-31 Mar-18 EBTE¹ % Oct-38 No ECTE % Nov-30 Mar-17 ENTE % Dec-32 Feb-20 ERTE % Dec-32 Sep-19 ETEP % Jun-31 Aug-17 Lumitrans % Feb-34 Oct-22 STC¹ % Apr-36 Nov-22 ESDE¹ % Nov-39 No ETSE¹ % May-42 No Transleste 8 5.2% Feb-34 Dec-20 Transirapé 8 4.4% Mar-35 Feb-22 Transudeste 5 5.0% Mar-35 May-22 ESTE % Feb-47 No Mariana¹ ² % May-44 No Miracema² % Jun-46 No Janaúba % Feb-47 No Aimorés % Feb-47 No Paraguaçu % Feb-47 No ERB % Aug-47 No Total 8, ,846 ¹ The RAPs must be grossed up of PIS/COFINS ² under construction ³ The Financial Asset RAP does not consider the basic transmission grid at the border ou basic frontier transmission grid

23 23 Income Statement R$ 000 IFRS Regulatory Income Statement 3Q16 Chg. % 3Q16 Chg. % GROSS OPERATING REVENUES Service revenues , , % Operation and Maintenance 139, , % - - Remuneration of Financial Asset 137, , % - - Financial Asset - Monetary Restatement (43,794) 86, % - - Construction 16,166 19, % - - Other Revenues (4,093) 1,439 - (4,093) 1,439 - Variable Portion (1,733) (1,870) -7.3% (1,733) (1,870) -7.3% TOTAL GROSS REVENUES 244, , % 457, , % PIS/COFINS (9,504) (19,810) -52.0% (20,333) (22,593) -10.0% Service Tax (37) (24) 54.2% (37) (24) 54.2% RGR, P&D, TFSEE, CDE and PROINFA (19,834) (20,986) -5.5% (19,834) (20,986) -5.5% Gross Revenue deductions (29,375) (40,820) -28.0% (40,204) (43,603) -7.8% NET REVENUES 214, , % 417, , % COSTS AND OPERATING EXPENSES (81,221) (67,421) 20.5% (101,670) (91,453) 11.2% Personnel (31,654) (25,930) 22.1% (31,654) (25,930) 22.1% Material (26,530) (26,429) 0.4% (710) (728) -2.5% Third party services (14,273) (13,127) 8.7% (14,273) (13,127) 8.7% Depreciation and amortization (949) (706) 34.4% (47,218) (50,439) -6.4% Other operating expenses (7,815) (1,229) 535.9% (7,815) (1,229) 535.9% Costs and Expenses (80,272) (66,715) 20.3% (54,452) (41,014) 32.8% GROSS PROFIT 133, , % 315, , % Equity method 14,735 54, % 44,590 49, % Revenues from financial investments 20,216 15, % 20,216 15, % Financial Expenses (67,600) (108,770) -37.9% (67,600) (108,769) -37.8% Financial Revenues (Expenses) (47,384) (92,961) -49.0% (47,384) (92,960) -49.0% NET INCOME BEFORE INCOME TAXES 101, , % 312, , % Income taxes and social contribution (3,704) (40,800) -90.9% (64,128) (56,924) 12.7% NET INCOME BEFORE IOE 97, , % 248, , % NET INCOME 97, , % 248, , % EBITDA 134, , % 362, , % EBITDA Margin 62.6% 81.7% pp 86.9% 90.6% -3.7 pp

24 24 Income Statement under IFRS R$ 000 IFRS TAESA ETAU Brasnorte TBE Aimorés Paraguaçu GROSS OPERATING REVENUES Service revenues Operation and Maintenance Financial Asset Income Financial Asset - Monetary adjustment (43.794) (929) 164 (20.497) - - Construction and indemnity Variable Portion and Other Revenues (4.093) (1.733) (19) (118) (2.066) - - TOTAL GROSS REVENUES Pis/Cofins (9.504) (91) (162) (1.523) (9) (15) Service Tax (37) RGR, P&D, TFSEE, CDE and PROINFA (19.834) (223) (106) (4.146) - - Revenue deductions (29.375) (314) (268) (5.669) (9) (15) - - NET REVENUES COSTS AND OPERATING EXPENSES (81.221) (1.097) (522) (10.176) (336) (410) Personnel (31.654) (9) (299) (4.087) (179) (203) Material (26.530) (305) (17) (1.003) (82) (130) Third party services (14.273) (777) (171) (4.037) (64) (65) Depreciation and amortization (949) - - (238) - - Other operating expenses (7.815) (6) (35) (811) (11) (12) Costs and Expenses (80.272) (1.097) (522) (9.938) (336) (410) - - GROSS PROFIT (245) (269) Equity method NET FINANCIAL EXPENSES - - Revenues from financial investments Financial expenses (67.600) (364) (19) (12.705) - (1) Borrowings and financing (254) - (1.796) - - Monetary variation and Exchange Gains / Losses (942) - - Financial instrument (18.218) Debentures (58.060) (132) - (9.850) - - Other financial expenses (2.254) 22 (19) (118) - (1) Financial Revenues (Expenses) (47.384) (201) 23 (10.552) - (1) - - NET INCOME BEFORE INCOME TAXES (245) (270) Income taxes and social contribution (3.704) (335) (232) (3) (3) NET INCOME (248) (273) EBITDA (245) (269) EBITDA Margin 62,6% 52,1% 71,0% 60,4% -269,2% -190,8%

25 25 Regulatory Income Statement R$ 000 Regulatory TAESA ETAU Brasnorte TBE Aimorés Paraguaçu GROSS OPERATING REVENUES Service revenues Other Revenues (4.093) Variable Portion (1.733) (19) (118) (2.066) - - TOTAL GROSS REVENUES Pis/Cofins (20.333) (220) (223) (4.437) - - Service Tax (37) RGR, P&D, TFSEE, CDE and PROINFA (19.834) (223) (106) (4.146) - - Revenue deductions (40.204) (443) (329) (8.582) - - NET REVENUES COSTS AND OPERATING EXPENSES ( ) (1.355) (1.165) (19.225) (254) (280) Personnel (31.654) (9) (299) (4.087) (179) (203) Material (710) (5) (13) (229) - - Third party services (14.273) (777) (171) (4.037) (64) (65) Depreciation and amortization (47.218) (558) (648) (10.060) - - Other operating expenses (7.815) (6) (34) (812) (11) (12) Costs and Expenses (54.452) (797) (517) (9.165) (254) (280) GROSS PROFIT (254) (280) Equity method NET FINANCIAL EXPENSES Revenues from financial investments Financial expenses (67.600) (364) (19) (12.795) - (1) Borrowings and financing (254) - (1.796) - - Monetary and Exchange Variation (942) - - Financial instrument (18.218) Debentures (58.060) (132) - (9.850) - - Other financial expenses (2.254) 22 (19) (207) - (1) Financial Revenues (Expenses) (47.384) (201) 23 (10.642) - (1) NET INCOME BEFORE INCOME TAXES (254) (281) Income taxes and social contribution (64.128) (1.367) (177) (12.326) - - NET INCOME (254) (281) EBITDA (254) (280) EBITDA Margin 86,9% 85,7% 77,3% 90,6% 0% 0% The difference between the equity method of Taesa and the sum of the results of ETAU, Brasnorte and TBE is due to the amortization of the goodwill arising from the allocation of the price paid in the acquisition of TBE.