QUARTERLY FINANCIAL INFORMATION

Transcription

1 QUARTERLY FINANCIAL INFORMATION September 30, 2009

2 BALANCE SHEETS (Amounts expressed in thousands of Reais) Parent Company Consolidated ASSETS Note 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Current Cash and cash equivalents 4 22, , , ,397 Consumers and concessionaires 5 880, ,773 Income and social contribution taxes 8 69,387 68, , ,521 Deferred income and social contribution taxes 9 125, ,825 Related parties 10 Dividends , ,198 Inventories 10,180 7,283 Collaterals and committed deposits 11 2,168 2,080 68,387 11,837 Prepaid expenses 6 4,324 2,594 Account for compensation in variation of installment "A" costs 7 152,098 32,083 Other credits 13 7,287 7, , , , ,465 2,221,456 1,919,021 Noncurrent Long-term assets Accounts receivable Consumers and concessionaires 5 104, ,771 Income and social contribution taxes 8 28,198 28,852 Deferred income and social contribution taxes 9 418, ,751 Related parties , ,286 Advances for future capital increase 12 68, ,932 2,630 21,929 Collaterals and committed deposits 11 5,122 5, , ,470 Prepaid expenses 6 14,771 6,052 Account for compensation in variation of installment "A" 7 23, ,803 Other credits 13 11,934 11,341 55,064 57, , , , ,129 Permanent Investments 14 3,325,891 3,063,152 64,025 41,996 Tangible fixed assets 15 1,663 1,644 6,236,215 6,147,811 Intangible fixed assets , ,023 1,298,416 1,316,836 3,786,520 3,544,819 7,598,656 7,506,643 Total 4,324,535 4,209,965 10,627,382 10,395,793 See the accompanying notes to the quarterly financial information and indepedent accountants review report 2

3 BALANCE SHEETS (Amounts expressed in thousands of Reais) Parent Company Consolidated LIABILITIES Note 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Current Suppliers 17 6,058 6, , ,111 Financial charges on debt 19 5,140 5,476 22,426 16,961 Income and social contribution taxes , , ,501 Deferred income and social contribution taxes 9 Dividends 25 1,311 2,626 62,153 74,008 Debentures , ,919 Loans and financings , ,000 1,025,397 1,039,176 Post-employment benefits 20 31,543 31,562 Account for compensation in variation of installment "A" costs 7 61,776 39,484 Tariff repayment ,189 Estimated employee benefits and social charges 21 3,868 3,785 50,736 42,728 Regulatory and sector charges , ,557 Provisions for contingencies 23 3,780 4,262 Other accounts payable 13 8,451 11, , , , ,795 2,696,692 2,573,587 Noncurrent Long-term liabilities Suppliers 17 Financial charges on debt 19 Income and social contribution taxes 8 35,678 36,476 Deferred income and social contribution taxes 9 21,661 9,821 Debentures , ,541 Loans and financings 19 1,220,510 1,257,399 Post-employment benefits , ,274 Account for compensation in variation of installment "A" 7 69,055 59,893 Related parties 10 6,933 6,862 Estimated employee benefts and social charges 22 16,609 18,444 Advances for future capital increase 12 Provisions for contingencies 23 80,676 67, , ,845 Provisions for unsecured liabilities ,832 3,244 Reversal and amortization reserve 17,248 17,248 Other accounts payable ,739 39,081 91,815 77,424 2,303,467 2,297,022 Minority interest 1,664,278 1,672,673 Shareholders' equity 24 Capital 3,182,716 3,182,716 3,182,716 3,182,716 Capital reserves 35,348 35,348 35,348 35,348 Profit reserves 693, , , ,299 Treasury shares (372,450) (372,450) (372,450) (372,450) Retained earnings 448, , , ,876 3,957,780 3,847,746 3,962,945 3,852,511 Advances for future capital increase Total 4,324,535 4,209,965 10,627,382 10,395,793 See the accompanying notes to the quarterly financial information and indepedent accountants review report 3

4 STATEMENTS OF INCOME PERIOD OF NINE-MONTH ENDED SEPTEMBER 30, 2009 AND 2008 Operating revenues Parent Company Restated Consolidated Restated Note Electricity supplied and billed 1,832,139 2,057,915 Electricity supplied to be billed 722, ,752 Avaliability of the distribution and transmission system 2,458,296 2,777,898 Other operating revenues 118, ,468 Deduction from operating revenues 5,131,229 5,328,033 CCC and CDE quota (268,659) (279,893) Research and development (30,982) (36,312) Global reversal reserve quota (31,852) (33,421) Emergency capacity charges 2 2 Taxes and contributions on revenue (1,383,802) (1,486,522) (1,715,293) (1,836,146) Net operating revenues 26 3,415,936 3,491,887 Electricity service cost Electricity cost Electricity purchased for resale (1,397,787) (1,444,075) Electricity netw ork use charges (387,710) (334,829) Operating costs 27 (1,785,497) (1,778,904) Personnel (108,189) (124,697) Materials and third-party services (127,059) (161,919) Depreciation and amortization (183,542) (207,393) Other operating costs (20,251) (30,713) 27 (439,041) (524,722) (2,224,538) (2,303,626) Service cost rendered to third parties 27 (4,504) (4,119) Gross operating profit 1,186,894 1,184,142 Operating expenses Selling (58,148) (67,748) General and administrative (45,107) (28,462) (202,506) (214,565) Depreciation and amortization (15,372) (141,413) (35,352) (163,286) Other operating expenses (12,283) (2,883) (61,029) (51,816) 27 (72,762) (172,758) (357,035) (497,415) Service income (72,762) (172,758) 829, ,727 Income from equity interest 415, ,598 (209) - Financial revenues 90,991 19, , ,432 Financial expenses (29,414) (7,927) (255,545) (292,244) Financial result 28 61,577 11,546 (74,202) (118,812) Operating profit 404, , , ,915 Other revenues 46,226 48,739 6,995 Other expenses (1,938) 749 (19,994) (15,585) Other result 44, ,745 (8,590) Income before income tax and social contribution , , , ,325 Current income and social contribution taxes (81) (199,722) (142,846) Deferred income and social contribution taxes (31,987) (64,925) (81) (231,709) (207,771) Net income before reversal of interest on equity 448, , , ,554 Reversal of interest on equity Net income before minority interest 448, , , ,554 Minority interest (93,204) (62,352) Founders shares (9,299) (798) Net income for the period 448, , , ,404 Net income per thousand shares - R$ See the accompanying notes to the quarterly financial information and independent accountants review report 4

5 EDP - ENERGIAS DO BRASIL S.A. STATEMENTS OF CHANGES IN SHAREHOLDER S EQUITY PERIOD OF NINE-MONTH ENDED ON SEPTEMBER 30, 2009 AND DECEMBER 31, 2008 Capital Capital Profit Treasury Retained Advances for future Note nº reserves reserves shares earnings capital increase Total Balances on January 1, ,182,716 35, ,551 (24,290) (18,066) 3,892,259 Prior year adjustments Acquisition own shares (504,404) (504,404) Cancellation treasury shares (156,244) 156,244 Net income for the year 388, ,329 Profit allocation Legal reserve 18,513 (18,513) Profit retention reserve 114,479 (114,479) Interim dividends (103,061) Proposed dividends (134,210) (134,210) Balances on December 31, ,182,716 35, ,299 (372,450) 3,538,913 Acquisition own shares Cancellation treasury shares (29,954) (29,954) Net income for nine-month period 448, ,821 Balances on September 30, ,182,716 35, ,299 (372,450) (29,954) 448,821 3,957,780 5

6 STATEMENT OF CASH FLOWS PERIOD OF NINE-MONTH ENDED SEPTEMBER 30, 2009 AND 2008 Parent company Consolidated Operating activities Restated Restated Net income for the period Minority interest Expenses (revenues) not affecting cash and cash equivalents Consumers and concessionaires Deferred taxes and social contributions, net Depreciation and amortization Residual value of assets and rights of permanent assets w ritten-off Prepaid expenses (5.855) (10.084) Suppliers 113 Loans, financings and debt charges Post employment benefits - CVM no. 371 (7.663) Provisions for contingencies Tariff deferral (16.245) Tariff restitution - adjustment of ratified value Founders' shares Equity interest ( ) ( ) 209 Investment loss Write-off/provison for loss - tangible and intangible fixed assets / investment (46.225) (46.172) Provision for unsecured liabilities (1.512) (1.154) (1.512) (1.154) Regulatory and sector charges Collaterals and restricted deposits (3.191) (1.561) Other (2.218) (32.800) (13.048) Assets (increase) decrease Consumers and concessionaires ( ) ( ) Recoverable taxes and social contributions Inventories (3.746) (2.270) Collaterals and restricted deposits (2.266) (394) (45.741) (36.435) Prepaid expenses Other credits (4.858) (49.544) (8.501) (16.474) (49.693) ( ) Liabilities (decrease) increase Suppliers (7.035) (2.877) Current taxes and social contributions (15.500) (7.821) (30.186) Deferred taxes and social contributions (2.450) Estimated liabilities (350) (2.715) (5) Provisions for contingencies (12.562) (2.668) Other liabilities 348 (14.786) (44.510) (50.979) (22.537) (25.322) (35.669) (79.471) Cash generated from (used in) operating activities (53.397) (88.063) Investment activities Treasury shares ( ) ( ) Write-off the investment (64.252) (64.578) Barter of subsidiaries, net of cash AFAC s ( ) (24.286) Capital increase subsidiaries (23.957) Additions to investment (384) (371) ( ) ( ) Received to permanent assets w ritten-off Additions to deferred charges 1 (220) Dividends received Obligation linked to concession Cash generated from (used in) investment activities ( ) ( ) Financing activities Related parties (20.413) Dividends paid ( ) ( ) ( ) ( ) Loans, financings and debentures - inflow s Loans, financings and debt charges - payments (27.309) ( ) ( ) Cash generated from (used in) financing activities ( ) ( ) ( ) ( ) (Decrease) / increase in cash and cash equivalents (56.984) (70.684) (94.829) Cash and cash equivalents at the end of the year Cash and cash equivalents at the beginning of the year (56.984) (70.684) (94.829) See the accompanying notes to the financial statements 6

7 1 - Operational context EDP - Energias do Brasil S.A. ( Company, Energias do Brasil or Parent Company ), a public held company incorporated on July 24, 2000, has as its corporate purposes the participation in other corporations as a shareholder or quota holder, as well as in businesses and enterprises in the electricity industry in Brazil or overseas; to manage electricity distribution, generation, transmission and commercialization assets in their various forms and types; to study, plan, develop and implement electricity distribution, generation, transmission and commercialization projects in their various forms and types. Direct and indirect participation are as follow: % Participation 9/30/2009 6/30/2009 Company Consolidation method Direct Indirect Direct Indirect Distribution Bandeirante Energia S.A. (Bandeirante) full Espírito Santo Centrais Elétricas S.A. (Escelsa) full Generation Energest S.A. (Energest) full Castelo Energética S.A. (CESA) full Costa Rica Energética Ltda. (Costa Rica) full Pantanal Energética Ltda. (Pantanal) full Santa Fé Energia S.A. (Santa Fé) full EDP Lajeado Energia S.A. (EDP Lajeado) full Lajeado Energia S.A. (Lajeado) Tocantins Energia S.A. (Tocantins) full on 9/1/ full on 9/1/ Ipueiras Energia S.A. (Ipueiras) full on 9/1/ Investco S.A. (Investco) proportional untill 8/31/2008 and full on 9/1/ Enerpeixe S.A. (Enerpeixe) full Enernova S.A. (Enernova) full Terra Verde Bioenergia Participações S.A. (Terra Verde) full EDP Renováveis Brasil S.A. (EDP Renováveis) not consolidated Porto do Pecém Geração de Energia S.A. (Porto do Pecém) proportional on 10/14/ Central Nacional da Energia Eólica S.A. (Cenaeel) not consolidated Trading Enertrade - Comercializadora de Energia S.A. (Enertrade) full Transmission Evrecy Participações Ltda. (Evrecy) full Others Enercouto S.A. (Enercouto) full Escelsa Participações S.A. (Escelsapar) full Sale of ESC 90 Telecomunicações Ltda. On June 30, 2009, the Company concluded the sale of all the quotas of ESC 90 Telecomunicações Ltda. ("ESC 90") in its ownership, to Net Serviços de Comunicação S.A., as established in the Contract of Sale of Corporate Shares executed with NET Serviços de Comunicação S.A., the signing of which was the subject matter of a Public Announcement disclosed by the Company on August 29, The conclusion of the Operation was dependent upon obtaining of prior approval from the Brazilian Telecommunications Agency - ANATEL, which was granted without any restrictions on June 8, 2009 and published in the Official Federal Gazette in the edition of June 19, 2009, in Section 1, page 57. The total amount of the Operation contracted on the base date of April 30, 2008 (for 100% of the capital stock) was R$94,624. Considering that the Operation involved the recovery of credits held by the Company against ESC 90, and the reversal of provisions previously recognized, it brought about a positive effect on the Company's net income in the amount of R$120,989, recorded in the accounts of Financial Income in the amount of R$74,764 and Other operating income in the amount of R$46,225. 7

8 The contract provided for a clause of price-level restatement and of adjustments in the amount of the operation that was subject to settlement this quarter in the amount of R$3,891. The operation completed is within the strategic planning defined by the Company of concentrating its activity in the electricity generation, distribution and marketing segments, with the sale of assets not related to its core business Partial spin-off of Castelo Energética S.A. ("CESA") with partial conversion of the transmission assets and startup of operations of Evrecy Participações Ltda. ("Evrecy"). On June 1, 2009, through an Extraordinary General Meeting, the shareholders of the indirect subsidiary CESA approved to partially spin-off the aforesaid Company, as a result of the transfer of the transmission concession regulated by Transmission Concession Contract nº 020/2008, of the Brazilian Electricity Regulatory Agency - ANEEL, from CESA to Evrecy, subject matter of Authorizative Resolution nº 1823, of March 3, 2009, of ANEEL, in order to generate greater operating, financial, administrative and economic efficiency of the companies. CESA and Evrecy are companies directly controlled by the subsidiary Energest S.A. The spun-off assets of CESA absorbed by Evrecy and valued on the base date of April 30, 2009, amounted to the total sum of R$21,462, as detailed in the corresponding appraisal report. 2 - Presentation of the quarterly financial information The quarterly information - ITR, which conclusion was authorized by the Board of Directors (the Management) as on October 23, 2009, is presented with values expressed in thousands of reais, unless otherwise indicated, and prepared in accordance with accounting practices adopted in Brazil, based on the provisions contained in Corporation law, in the Pronouncements, Guidelines and Interpretations issued by the Committee of Accounting Pronouncements, on the rules established by the Securities Commission - CVM and specific legislation issued by the Brazilian Electricity Regulatory Agency - ANEEL. These practices are consistent with those adopted in the previous quarterly information reports and the financial statements as at December 31, 2008, published on March 6, The Company and its subsidiaries, in addition to the procedures adopted in the preparation of the financial statements as of and for the year ended December 31, 2008, started to qualify certain financial instruments for the application of hedge accounting, which have the following accounting guidelines: a) Derivative financial instruments and hedge accounting Derivative financial instruments are recognized on trade dates and at fair values. Subsequently, the fair values of derivative financial instruments are revalued on a regular basis, and the gains and losses resulting from this revaluation are recorded in net income for the period, except for cash flow hedge derivatives. The recognition of variations of fair values of hedge derivatives, in net income for the period, depends on the nature of the covered risks and on the hedge model used. Hedge accounting The Company and its subsidiaries use financial instruments to hedge interest rate, foreign exchange variation and financing risks. The derivatives that do not qualify as hedge are recorded for trading instruments. The hedge derivatives are recorded at fair value and gains or losses are recognized according to the hedge accounting model adopted, as follows: i) there is formal documentation of the hedge at inception date of the relationship; ii) the hedge is expected to be highly effective; iii) the hedge effectiveness can be measured reliably; iv) the hedge is evaluated on a continual basis and effectively determined as being highly effective throughout the financing period; and v) in relation to the hedge of an anticipated transaction, this must be highly probable and must present exposure to cash flow variations that could ultimately affect the result. 8

9 Cash flow hedge The effective portion of variations of fair value of designated derivatives that qualify as cash flow hedge is recognized in shareholders' equity in item other comprehensive income. The gains or losses of the ineffective portion of cash flow hedge derivatives are recognized in net income for the period, at the time the ineffectiveness occurs. The amounts accumulated in shareholders' equity passes through net income in the periods in which the hedged item affects the statement of income. However, when the predicted transaction that is hedged results in the recognition of a non-financial asset or liability, gains or losses recorded in shareholders' equity are recognized by counter entry of the initial cost of the asset or liability. When a hedge instrument expires or is sold, or when the hedge relation fails to fulfill the criteria for hedge accounting, any accumulated gain or loss recorded in shareholders' equity up to that date is kept in shareholders' equity until the foreseen transaction is recognized in net income. When the transaction is not expected to take place, the accumulated gain or loss recorded in shareholders' equity is immediately recognized in net income for the period. Effectiveness For a hedge relation to be classified as such, its effectiveness should be demonstrated. Therefore the Company and subsidiaries carry out prospective tests on the start date of the hedge relation and on each balance sheet date, perform tests prospectively and retroactively in order to demonstrate its effectiveness and showing that variations in fair value of the hedged item are offset by variations in fair value of the hedge instrument, with respect to the hedged risk. Any ineffectiveness determined is recognized in net income as soon as it occurs. The Company and its subsidiaries adopted for the first time the changes in the corporation law introduced by Law n 11638, approved on December 28, 2007, with t he respective modifications introduced by Provisional Measure nº 449, of December 3, 2008 with transition date on January 1, 2007, converted into Law of May 27, Laws 11638/07 and 11941/09 modify Law nº 6404/76 in aspects relating to the preparation and disclosure of the financial statements. The adjustments relating to the initial adoption of Law nº 11638/07 and 11941/09 are detailed in Note As a result of the exchange of the previous subsidiary Enersul with assets of Grupo Rede, the statements of income and of cash flows and the notes to the quarterly financial statements, contained in the Quarterly Information - ITR of September 30, 2009 and 2008, include the balances and transactions by the full consolidation method of the previous subsidiary Enersul, up to August 31, 2008, of the new subsidiaries Tocantins Energia and Lajeado Energia as of September 1, 2008 and, for the subsidiary Investco, up to August 31, 2008 by the proportionate consolidation method and, as of September 1, 2008, by the full consolidation method. The shared subsidiary Porto do Pecém is being consolidated by the proportional method as from October 14, Reclassifications and prior-period adjustments For purposes of disclosing the comparative quarterly financial information, the Company and its subsidiaries complied with CVM Resolution nº 506, of June 19, 2006, considering the retrospective effects of the modifications of aforesaid legislation, consequently restating the quarterly financial information of previous periods presented herein Adjustments from the adoption of Laws 11638/07 and 11941/09 We present below the reconciliation of the result of September 30, 2009 and 2008 and shareholders' equity on September 30 and June 30, 2009, considering the effects of Laws 11638/07 and 11,941/09. 9

10 Parent company Period of nine-month ended on 30/09/ /09/2008 Income for the period Adjustments of the effects of the initial adoption of Law /07 and /09 Equity result (1.313) (18.617) Net income without the effects of Law /07 (Adjusted net result) Total of net adjustments from the adoption of Law /07 and /09 (1.313) (18.617) 30/09/ /06/2009 Shareholders equity Adjustments on transition date recognized on Retained earnings (losses) Other comprehensive income Difference betw een the net result for the year and adjusted result (1.313) (1.481) Shareholders equity, without the effects of Law /07 and / Consolidated Period of nine-month ended on 30/09/ /09/2008 Income for the period Adjustments of the effects of the initial adoption of Law /07 and /09 Financial instruments at fair value through profit and loss (956) (3.019) Cost of intangible assets and amortization of intangible assets (318) (975) Adjustment to present value of accounts receivable (715) (2.295) Income of donation and subsidy - (14.466) Temporary and permanent differences on income and social contribution taxes Net income without the effects of Law /07 (Adjusted net result) Total of net adjustments from the adoption of Law /07 and /09 (1.313) (18.617) 30/09/ /06/2009 Shareholders equity Adjustments on transition date recognized on Retained earnings (losses) Other comprehensive income Difference betw een the net result for the year and adjusted result (1.313) (1.481) Shareholders equity, without the effects of Law /07 and / The tax impacts of the adjustments resulting from the initial adoption of Laws 11638/07 and 11941/09, when applicable, were entered in the shareholders' equity accounts in which aforesaid adjustments were recorded, in contra account to deferred tax assets or liabilities. In view of the adoption of the Transitory Tax Regime, confirmed as of the submission of the income statements. 10

11 2.1.2 Other reclassifications The following reclassifications, for purposes of comparability, were made in the amounts previously presented in the consolidated information of September 30, 2008: PIS/COFINS credit - as of 2009, the Companies altered the accounting procedure of deductible credits of the PIS and COFINS calculation bases, determined under the terms of Laws 10637/02 and 10833/03, previously recorded in the group of Deductions from Revenue, and for comparative purposes they performed the reclassifications in the respective items of the statement of income of the previous period, the effects of which are shown below: Reclassification PIS/Cofins - Period nine-month ended September 30th, 2008 Enertrade EDP Lajeado Energest Bandeirante Escelsa Enersul Consolidated Operating revenues Taxes and contributions on revenue 17,302 1, ,152 18,610 10,502 77,099 Electricity cost Electricity purchased for resale (17,009) (48) (558) (22,026) (15,341) (9,209) (64,191) Electricity netw ork use change (293) (333) (98) (6,054) (3,268) (1,292) (11,338) Rent expenses Other operating costs - (1,496) - (72) (1) (1) (1,570) Total Consolidated quarterly financial information The quarterly financial information was prepared in accordance with the rules established by CVM Instruction 247, of March 27, 1996 and subsequent amendments, covering EDP - Energias do Brasil S.A., its subsidiaries (as described in note 1). The accounting criteria adopted in their/its determination were applied uniformly among the various Companies of the group. The reconciliation of net income for the 9-month period ended September 30, 2009 and of shareholders' equity on September 30, 2009 is shown below: 9/30/2009 Shareholders' equity Net income Parent company 3,957, ,821 AFAC Enercouto provision (*) 5,165 1,160 Consolidated 3,962, ,981 (*) Refers to allowance for loss of the future advance for capital increase at Enercouto Investments in subsidiary under joint ownership Porto do Pecém The balance sheet of September 30, 2009, of the joint subsidiary in pre-operating phase Porto do Pecém, is presented below: Summary of Balance sheet on September 30, 2009 Summary of Income statement ninemonth ended September 30, 2009 Assets Liabilities Current 9,478 Current 626,680 Operating expenses (14,154) Noncurrent 122,810 Noncurrent 148,794 Net financial result (27,098) Tangible 1,063,646 Shareholders' equity 420,460 Income tax 14,026 Total 1,195,934 Total 1,195,934 Total (27,226) 11

12 3 - Regulatory assets and liabilities A summary of the consolidated regulatory assets and liabilities contained in the Balance Sheet is presented as follows: Consolidated Current Noncurrent Note 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Consumers and concessionaires 6 Light for All Program 35,363 2,584 Other regulatory assets 30,292 10,557 12,346 40,134 Other credits 14 Loss of revenue - low income 69,963 65,452 Other 680 1,089 Account for compensation in variation of Installment "A" costs 8 Installment A 4,127 CVA - assets 152,098 27,956 23, ,803 Total regulatory assets 288, ,765 35, ,937 Suppliers 18 Free energy (5,343) (5,343) Account for compensation in variation of Installment "A" costs 8 Installment A (39,526) (22,208) (-) CVA - liabilities (22,250) (17,276) (69,055) (59,893) Tariff return Tariff return - BRR 2003 (48,189) Other accounts payable 14 Revenue gains - low income (25,328) (29,946) Other regulatory liabilities (111) (1,460) (13,455) Total regulatory liabilities (140,747) (76,233) (69,055) (73,348) Total regulatory assets (-) liabilities 147,649 35,532 (33,250) 111, Composition of the Extraordinary Tariff Rearrangement - RTE ratified by ANEEL, representative of Installment A Items Ratification Instrument Consolidated Accumulated compensation Amount amortized Balance to amortize Number Amount ratified 9/30/2009 6/30/2009 Installment A Resolutions n.ºs 480/02, 481/02 and 01/04 99, ,298 (314,528) (39,526) (18,081) RTE - Extraordinary tariff adjustment refers to the amounts applicable to each electricity distribution concessionaire, through extraordinary tariff readjustment of 2.9% applicable to residential consumers (excepting those with a low income), rural consumers and street lighting and of 7.9% for the other consumers, which was aimed to neutralize the effects of loss of income at the distributors and to reimburse costs with free energy supplied at the generators, during the Emergency Program for Reducing Electricity Consumption - PERCEE, which was effective in the period between June 2001 and February 2002 and, to offset deficits of unmanageable tariff costs that comprise installment "A" at the distributors, occurring between January 1 and October 25, As a result of the expiry of the maximum period for the refunding of the sums ratified by ANEEL, corresponding to the installments of Loss of revenue and of Free energy, on March 31, 2007 and based on ANEEL's Regulatory Resolution nº 1, of January 12, 2004, republished on June 1, 2004, the amortization of the ratified amount corresponding to Installment "A", without a limit of continuity for its full reimbursement. The Company has consulted the ANEEL with regard to the PIS and COFINS deductibility or nondeductibility in the amounts amortizable as Installment A, and awaits a response from the authority. The RTE has no longer been collected since the tariff adjustment of October The balance to be refunded to consumers on September 30, 2009, including PIS and COFINS, is R$39,526. The refund date is to be set by the ANEEL. For subsidiary Bandeirante, the refund in the amount of R$26,025 was established on the tariff adjustment of October 20,

13 3.2 Periodic tariff revision 2007 Tariff Review subsidiary Bandeirante At a Public Ordinary Meeting of the Board held on October 6, 2009, the ANEEL ratified in a final decision, through Ratification Resolution no. 889 of October 6, 2009, the second periodic tariff revision of subsidiary Bandeirante (period from October 2007 to October 2011), pursuant to the methodology set forth by Normative Resolution 338/2008 (note 32) Tariff Revision subsidiary Escelsa The Brazilian Electricity Regulatory Agency - ANEEL, at the Public Ordinary Meeting of the Board held on July 28, 2009, ratified in a final decision the fourth periodic tariff revision of subsidiary Escelsa (period from August 2007 to August 2010), pursuant to the methodology set forth by Normative Resolution 338/2008. The main changes introduced by the ANEEL after the provisory decisions made in 2007 and 2008 are: (i) Reference Company goes down from R$221 million to R$210 million. The ANEEL had disclosed on 05/12/2009, as a result of Public Inquiry no. 035/2009, an amount of R$202 million for the Reference Company. (ii) Component Xe of Factor X, index used to compute the annual tariff adjustments, is reduced from 1.45% to 0.00%; (iii) Percentage of Unrecoverable Revenue Losses increased from 0.50% to 0.60% of the gross revenues (taxes included). These changes retroact to August 7, 2007, and the amounts of the Gross and Net Regulatory Base are maintained. The ANEEL has also resolved on administrative proceedings previously filed by subsidiary Escelsa, in view of Ratification Resolution 528/2007 and Ratification Resolution 686/2008, referring to provisions related to the Tariff Structure, the Supply Revenue, and adjustments in the calculation of the deficit of the Luz para Todos Program. All effects computed, the tariff adjustment now approved by the ANEEL is -6.44%, replacing the provisory amount of -6.92% established in August The net financial result, included in the annual tariff adjustment of subsidiary Escelsa was R$2,000. The tariffs of subsidiary Escelsa ratified on the annual adjustment of August 7, 2009 included the following effects: (i) introduction of the difference between the new percentage of -6.44% and the provisory percentage of % determined in August 2007, as mentioned earlier; and (ii) the annual readjustment index for the period from August 7, 2009 to August 6, All effects computed, the tariff adjustment approved by the ANEEL is -6.44%, replacing the provisory amount of -6.92% established in August Thus, subsidiary Escelsa recorded, in this quarter, the amount of R$15,595, as debit to the result for the period under Operating Revenue as a counterentry to Current Liabilities under Tariff Refund, referring to the period from August 2007 to July The balance to be refunded on September 30, 2009 is R$12,

14 4 - Cash and cash equivalents Parent Company Consolidated 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Cash and banks 12,242 61, , ,199 Interest earning bank deposits - fixed income funds 10,217 41, , ,553 Total 22, , , ,752 Highly liquid short-term financial investments are promptly convertible into a known sum of cash. These financial investments refer substantially to bank deposit certificates and fixed income funds, remunerated at rates that range between 98.5% and 104.1% of the Interbank Deposit Certificate (CDI). 5 - Consumers and concessionaires Current Consumers Billed to finals consumers Billed supply Balances Overdue Overdue Allow ance Net Net falling up to 90 for more than for doubtful balance on balance on due days 90 days Total accounts 9/30/2009 6/30/2009 Residential 93,564 95,044 19, ,654 (31,300) 176, ,367 Industrial 30,549 14,880 14,038 59,467 (9,097) 50,370 46,917 Commerce, Services and Other 32,635 25,084 15,857 73,576 (13,100) 60,476 65,686 Rural 10,673 6,791 2,231 19,695 (148) 19,547 18,099 Public power Federal 4, ,292 (100) 5,192 4,705 State 4,752 1, ,000 (150) 6,850 5,956 M unicipal 4,702 3,364 4,077 12,143 (1,112) 11,031 9,989 Public lighting 6,720 2,927 6,283 15,930 (490) 15,440 14,506 Public service 5, ,637 10,661 (399) 10,262 7,713 Free customers 4,900 4,900 4,900 8,316 Unbilled supply 213, , , ,941 Debt paid in installments 49,766 11,615 26,832 88,213 (38,411) 49,802 58,252 Collection fo classification process 1,646 1,646 1, Other credits 28,576 28,576 28,576 27,971 Regulatory assets Other regulatory assets 64,156 64,156 64,156 10, , ,611 93, ,494 (94,307) 718, ,419 Concessionaires Supply - conventional 215, ,899 (76,691) 139, ,401 Short-term energy 3,364 3,364 3,364 7,097 Electric power network use charges 8,404 8,404 8,404 8,032 Regulatory assets 1,499 1,499 1,499 2,449 Other 10,057 10,057 10,057 9, , ,223 (76,691) 162, ,354 Total current 795, ,611 93,476 1,051,717 (170,998) 880, ,773 Noncurrent Consumers Billed supply Industrial 6,929 6,929 6,929 16,154 Commerce, Services and Other Public Power M unicipal Debt paid in installments 69,372 69,372 69,372 66,074 ( - ) Present value adjustment (15,694) (15,694) (15,694) (15,599) Other credits Consolidated Other regulatory assets 12,346 12,346 12,346 40,134 73,010 73,010 73, ,820 Concessionaires Short-term energy 12,202 12,202 (509) 11,693 11,782 Other 20,168 20,168 20,168 20,169 32,370 32,370 (509) 31,861 31,951 Total noncurrent 105, ,380 (509) 104, ,771 The allowance for doubtful debts - PCLD, is considered sufficient to cover eventual losses in the realization of these assets by Management of the Company and its subsidiaries. 14

15 5.1 Short-term energy Refers mainly to the transactions of sale of energy, realized in the sphere of the Electric Energy Trading Chamber - CCEE. Part of the values of the assets of the distributor subsidiaries is subject to modification depending on the decision of lawsuits in progress, filed by companies from the sector, relating to the interpretation of rules of the market in force. 5.2 Concessionaires- others The amounts of R$20,168 (R$20,168 on June 30, 2009) in noncurrent assets and of R$18,953 (R$19,329 on June 30, 2009) in current and noncurrent liabilities (Note 13), refer to sums receivable and payable, respectively, between the subsidiary Bandeirante and Companhia Piratininga de Força e Luz ( Piratininga ), as a result of the partial spin-off of Bandeirante carried out on October 1, 2001, pursuant to the terms established in the spin-off protocol. There are no disagreements between the parties regarding the balances currently recorded, receivable and payable, which should be settled in a timely manner Concessionaires Conventional Supply Includes amounts billed by the subsidiary Enertrade against Ampla Energia e Serviços S.A. - AMPLA, matured and to mature, totaling R$95,852 (R$69,124 on June 30, 2009), from which the amount of R$76,172 (R$69,124 on June 30, 2009) is being disputed between the parties due to a divergence between the price contracted by AMPLA with Enertrade and the value authorized by ANEEL for pass-through to AMPLA s final consumers. With respect to this dispute, Enertrade obtained a court injunction suspending the effects of ANEEL s ruling, which did not recognize the price contracted by AMPLA, also understanding that the contract had already been tacitly approved by ANEEL, according to Article 1, subsections 3 and 4 of ANEEL Resolution 22/1999. In non-compliance to this injunction, AMPLA has been paid the invoices issued by Enertrade, on a partial basis, corresponding to part of the contracted tariff, which according to ANEEL, would be the amount of the possible pass-through by AMPLA to its final consumers. The subsidiary Enertrade recorded allowance for doubtful accounts, corresponding to the amount under discussion, recorded in the statement of income for the nine-months period ended in September 30,2009 in selling expenses, in the sum of R$10,366 (R$10,598 in 2008) Adjustments to present value The adjustment to present value, regulated by CPC Pronouncement 12, was calculated with a basis on the regulatory WACC rate, applied by ANEEL in the tariff reviews of the distributors. This rate is compatible with the nature, term and risks of similar transactions under market conditions and, on September 30, 2009, corresponded to 15.07% per annum (15.07% per annum on June 30, 2009), having a positive impact on the consolidated result for the year before the effects of taxes of R$715 (R$2,295 positive on September 30, 2008) and having a negative impact on consolidated shareholders' equity of R$14,048 on September 30, 2009 (R$15,290 on June 30, 2009). 6 - Prepaid expenses Consolidated Current Noncurrent 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Advance of hedge operations coverage 13,553 4,980 Insurance premium 3,652 1,239 1,218 1,072 Other 672 1,355 Total 4,324 2,594 14,771 6,052 15

16 7 - Account for compensation in variation of Installment A costs CVA Bandeirante Consolidated Current Noncurrent Current Noncurrent 9/30/2009 6/30/2009 9/30/2009 6/30/2009 9/30/2009 6/30/2009 9/30/2009 6/30/2009 From 1/1/2001 to 10/25/ ,025 22,208 From 9/24/2006 to 9/23/2007 2,209 3,579 From 9/24/2007 to 9/23/2008 9,171 23, ,713 8,621 From 9/24/2008 to 3/31/ ,909 67,891 2,130 28,099 23,006 From 9/24/2009 to 9/30/ ,601 8,254 Escelsa Assets 91,080 25,386 10,601 68,571 31,868 34,408 36,353 23,006 From 1/1/2001 to 10/25/2001 4,127 13,501 From 7/8/2006 to 7/7/ From 7/8/2007 to 7/7/ ,752 3,203 Liabilities From 7/8/2007 to 7/7/ ,584 76,232 10,936 1,378 36,887 From 7/8/2007 to 9/30/ ,858 5,471 32,702 61,018 6,697 12,858 76,232 29,908 5,076 32,702 36,887 Total 152,098 32,083 23, ,803 61,776 39,484 69,055 59,893 The electricity distribution contracts establish, in the composition of tariffs practiced by the concessionaires, values for each item of exogenous costs, booked to operating expenses, components of the variable denominated Installment A, of the Tariff Readjustment Index - IRT, demonstrated as follows: Pass-through tariff of electricity from Itaipu Binacional; Transportation tariff of electricity from Itaipu Binacional; Collection quota to the Fuel Consumption Account - CCC; Tariff for use of the electricity transmission facilities of the basic grid; Charges for Services Systems - ESS; Purchased electricity; Reversal Global Reserve Quota - RGR; Electricity services inspection fee; Connection charges; Energy Development Account - CDE; Energy Purchase Agreement in the Regulated Market - CCEAR; and Incentive Program for Alternative Sources of Electricity - PROINFA. The records for offsetting of positive or negative differences between the amounts paid of each item and the respective amounts of coverage considered in the electric energy tariffs, are executed according to the accrual basis of accounting, in Assets and/or Liabilities, with contra entries in income according to their nature. Changes in CVA for the quarter are shown as follow: Ítem Balance in 6/30/2009 Appropriation Monetary restatement Amortization Balance in 9/30/2009 Installment "A" (18,081) - (909) (20,536) (39,526) CVA 95,590 10,013 1,662 (23,013) 84,252 77,509 10, (43,549) 44,726 Installment A : from January 1 to October 25, amounts corresponding to RTE - Extraordinary Tariff Adjustment mentioned in note 3. 16

17 8 - Income and social contribution taxes Parent Company Consolidated Current Current Noncurrent 9/30/ /30/2009 9/30/ /30/2009 9/30/ /30/2009 Recoverable - Assets Income and social contribution taxes - current 66,829 65, , ,996 ICMS ,982 28,940 28,198 28,852 PIS and COFINS ,266 27,400 63,261 Other 2,460 2,320 4,774 5,805 Total 69,387 68, , ,521 28,198 28,852 Payable - Liabilities Income tax and social contribution - current 197, ,668 17,581 17,795 ICMS 126, ,227 PIS and COFINS 64,481 60,877 15,813 16,370 ISS 200 Income tax w ithheld in interest on equity 9 4, ,483 Other ,005 10,246 2,284 2,311 Total 112 4, , ,501 35,678 36, Taxation of operations in the Electric Energy Trading Chamber - CCEE As a result of the terms of article 32 of Provisional Measure nº. 66, of August 29, 2002, converted into Law nº , of December 30, 2002 and of Normative Instruction nº. 199, of September 12, 2002, electric energy distributors, as agents members of the Electric Energy Trading Chamber - CCEE, exercised the option for the special taxation regime of PIS and of 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. 8.2 PIS and COFINS The balances of PIS and COFINS assets and liabilities, on September 30, 2009, consider the recording by subsidiaries Bandeirante and Escelsa of extempore credits, in the amount of R$63,261 (R$58,380 on June 30, 2009), resulting from the interpretation provided by the Internal Revenue Service in Answer to Inquiry COSIT 27/2008, corresponding to the credits calculated on expenditures with materials applied or consumed in the electricity supply activity and in the activity of depreciation charges of machinery, equipment and other fixed assets, to be offset with debits of these contributions. In accordance with ANEEL Technical Note 115/2005, the subsidiaries recognized in current liabilities, in Other liabilities,, an equal sum to be returned to the consumers, since said credits will influence the effective rate to be charged in the future (Note 13). 9 - Deferred income and social contribution taxes Assets The tax credits detailed below, calculated on tax losses carry-forward, 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 fiscal periods at the subsidiaries Bandeirante, Escelsa, Enertrade, Energest, EDP - Lajeado and Pantanal, within a maximum period of 10 years. Consolidated Current Noncurrent 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Income tax on tax losses carry-forw ard 18,464 26, , ,510 Negative bases of social contribution 14,183 14,315 43,048 46,268 Income and social contribution taxes on other temporary 81,013 68,329 58,985 72,203 Income and social contribution taxes on provision for pension 3,210 3,168 23,854 23,896 Income and social contribution taxes on incorporated tax credit - 8,053 7, , ,264 Income and social contribution taxes on other temporary ,457 26,610 Total 125, , , ,751 17

18 Based on the technical studies of the projections of taxable income, computed in accordance with the provisions of CVM Resolution 273, of August 20, 1998, the recovery of noncurrent tax credits is estimated in the following years: to to 2019 Noncurrent 217,403 79,411 38,664 41,901 29,315 10,581 1, ,750 On December 31, 2008, the Managements of the Companies prepared projections of future taxable income, also considering its discounts at the present value, demonstrating the capacity of realization of these tax credits in the periods indicated, and, for the subsidiaries Bandeirante and Escelsa, and former subsidiary Enersul, as required by CVM Instruction n.º 371, of June 27, 2002, the aforesaid studies were approved by the respective Boards of Directors. These estimates are periodically reviewed in order to allow the Company to record in its financial statements an eventual alteration in the budget for recovery of these credits on a timely basis The taxable credit arising from the Provision for the Pension Plan Deficit - PSAP, refers to the portion of liabilities related to benefits exceeding assets relative to the defined benefit pension plans at the Bandeirante subsidiary, the provision for which was effected on December 31, 2001 with a counterparty in Shareholders Equity, deductible on the occasion of the monthly payments, expected to be terminated in The installment regarding the calculation of surplus to the legal limit of deduction equivalent to 20% in relation to the payroll of base salaries only the portion of funding of the active participants The tax credit from goodwill derives: a) in the year 2002, at the subsidiary Bandeirante, as a result of the incorporation of the portion spun off from the former controlling company Enerpaulo - Energia Paulista Ltda., represented by the goodwill paid by Enerpaulo on the acquisition of shares issued by Bandeirante. b) at the subsidiary Escelsa, from the merger that occurred in April 2005, of the spun-off portion of the parent company EDP Energias do Brasil S.A., represented by the goodwill paid by the merged companies EDP 2000 Participações Ltda. and EDP Investimentos Ltda. upon the acquisition of shares issued by IVEN, which was parent company of Escelsa at the time. The amounts were accounted for according to CVM Instructions 319/99 and 349/99, and in accordance with ANEEL s instructions, and are being amortized according to the curve between the expectation of future results and the term of the Companies concession. This translates into a future average annual tax credit realization of R$6,063 to Bandeirante up to 2027, R$1,942 to Escelsa up to The forecasted future taxable income indicates that the subsidiaries Bandeirante and Escelsa have a calculation base sufficient to recover the full balance of tax credits in the period as demonstrated. However, the credits up to September 30, 2009 related to PSAP and goodwill, mentioned in Explanatory Notes and 9.1.2, will be realized financially up to 2017 and 2027, respectively, according to the amortization rules of the amounts related to them. 9.2 Liabilities Consolidated 9/30/2009 6/30/2009 Income tax 15,927 7,221 Social contribution 5,734 2,600 Total 21,661 9,821 Noncurrent 21,661 9,821 Total 21,661 9,821 18

19 10 - Related parties IN addition to the amounts receivable as dividends from its subsidiaries and associated companies, presented in note 25, and the amounts of advances for future capital increases disclosed in Note 12, the other balances of assets and liabilities, as well as the transactions that influenced net income for the period, result from transactions performed under normal market conditions for the respective types of operation. Parent Company Assets Liabilites Income period Consolidated Income period 9/30/2009 6/30/2009 9/30/2009 6/30/ Related parties Bandeirante CESA 86,433 85, ,585 3,632 - Energest 59,485 58, , Enersul Enertrade ESC ,261 8,261 Escelsa Escelsapar 2,864 2, Porto do Pecem Tocantins Energia 24,702-6,594 6, , ,286 6,933 6,862 4,871 12,036 8,261 The balances with the subsidiaries Bandeirante, Escelsa and Enertrade refer to the sharing of expenses with personnel, material and outsourced services, approved by ANEEL through Order 2194, of July 13, 2007 and, with the other companies, refer basically to financial loans. The remuneration of the key management staff in the nine-month period ended September 30, 2009, as required by CVM Resolution nº 560, of December 11, 2008, attained the sum of R$3,028, an amount comprised only of short-term benefits, without the costs of contract rescissions. Those present at the Ordinary General Meeting held on April 8, 2009, approved the annual and overall remuneration of the members of the Board of Directors, of its Committees and of the Senior Management of up to R$4,560 for the period from April 2009 to March Collaterals and committed deposits Parent Company Consolidated Current Noncurrent Current Noncurrent Note 9/30/2009 6/30/2009 9/30/2009 6/30/2009 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Judicial deposits 23 2,168 2,080 5,122 5,122 2,168 2, , ,196 Collaterals and committed deposits 66,219 9,757 14,537 15,274 Total 2,168 2,080 5,122 5,122 68,387 11, , , Advances for future capital increases Parent Company Consolidated Assets Assets 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Energest 35,040 35,040 Enernova 30,977 28, ESC Terra Verde 1,900 1,200 1,900 1,200 EDP - Energias do Brasil S.A. 62,942 EDP Renovaveis 20,679 Total 68, ,932 2,630 21,929 19

20 13 - Other receivables - Assets and Other accounts payable - Liabilities Parent Company Consolidated Current Noncurrent Current Noncurrent Other credits - Assets 9/30/2009 6/30/2009 9/30/2009 6/30/2009 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Advances to employees ,399 4,778 Advances to suppliers 6, ,071 4,537 Credit receivable - customers Loss of revenue - Low income 69,963 65,452 Expenditure to refund ,585 9,065 Energy efficiency program 2,963 2,645 2,126 2,586 RGR to offset Assets available for sale 1,066 7, Deactivation in progress 5,443 3,384 Services in progress ,865 43,773 Services rendered to third-parties 13,423 9,546 9,286 9,286 Charges and consignments on payroll 357 2,026 Deactivation and sales 4,035 5,905 Infrastructure shared 141 1,138 Advance UTE Resende e Norte capixaba 6,844 6,844 6,844 6,844 NDF - Nondeliverable forward contracts 724 2,665 Assignment of Credit - Tangará Energia S.A. 2,307 2,226 18,989 19,410 Assignment of Credit - Caiuá Distribuição de Energia S.A. 3,626 3,626 4,801 4,648 Other regulatory assets 680 1,089 Other 6,776 5,090 4,497 8,775 14,253 12,210 11,942 Total 7,287 7,926 11,934 11, , ,708 55,064 57,465 Other accounts payable - Liability Received advances - Assets sale 9,288 9,988 Public lighting contribution 11,405 9,224 Amounts payable to Piratininga ,953 18,953 Amounts payable - Provision Fafen Energia 6,243 9,084 6,243 9,084 Other credits - consumers 15,175 17,947 Other credits - concessionaries 4,543 3,511 Payroll 1,864 2,602 Others regulatory liabilities 1,436 13,455 Gain of revenue - Low income 25,328 29,946 ICMS credit assignment 1, Interest on compulsory loan 396 2,896 Collect from third-parties to pass-through 2,499 6,977 Accrual - Cable TV and Telephone 2,363 2,294 Tariff return - COSIT 27 63,261 58,380 Financial settlement at CCEE Capital reduction 23,828 Others 2,208 2, ,654 14,282 5,958 6,673 Total 8,451 11, , ,318 48,739 39, Tariff modicity - low income Law 10438, of April 26, 2002, set the instructions to be applied in the inclusion in residential subclass classified as low income, of the unit with consume less than 80KWh per month, with the Instrument nº. 4336, of August 15, 2002, which extended the determinations of this law to consumers with 80 to 220 KWh of consume per month. The subsidiary Bandeirante is involved in an inspection process by the São Paulo State Sanitation and Energy Regulatory Agency - ARSESP, with a Notification having been drawn up in which the Regulatory Agency determined the review of registration criteria of customers classified in the low income tariff category. Consequently, overcharged tariffs are being refunded, and liability in the amount of R$47,640 was recorded in this account on December 31, 2008, of which the amount of R$22,312 was refunded to consumers from January to September 2009 and the amount of R$7,203 will be refunded as of October, 2009 to reclassified consumers that are still active in the registration. The remaining balance will be R$18,125, available to inactive consumers. Considering that the legislation and regulations of this subject matter provide for the reimbursement of these amounts through the subsidy mechanism, the same sum was recorded in contra account, in assets. 20

21 Credit Assignment - Tangará Energia S.A. It is related to the renegotiation balance of the Credit Assignment contract made by and between the subsidiary Lajeado Energia S.A. and Tangará Energia S.A., a company from Grupo Rede, on August 31, 2004, approved by ANEEL through Directive Releases nºs 467/2000-SFF/ANEEL and 1706/2004- SFF/ANEEL, with the following conditions: Payment term: 120 months Grace period: 18 months End: February 29, 2016 Remuneration: 100% of CDI Value contract: R$18,199 This operation, before the swap of assets of Enersul and Investco, Lajeado Energia, Tocantins and Ipueiras, between the Company and Grupo Rede, was characteristic of a loan among the companies of Grupo Rede Credit Assignment - Caiuá Distribuição de Energia S.A. It is related to the consolidation and negotiation of the Credit Assignment contract made by and between the subsidiary Lajeado Energia S.A. and Caiuá Distribuição de Energia S.A., company of Grupo Rede, on December 31, 2006, approved by ANEEL through order nº 181-SFF/ANEEL of January 29, 2007, with the following conditions: Payment term: 86 months Grace period: 24 months End: February 29, 2016 Remuneration: 100% of the CDI plus 2% per annum of interest Value contract: R$23,532 This operation, before the swap of assets of Enersul and Investco, Lajeado Energia, Tocantins and Ipueiras, between the Company and Grupo Rede, was characteristic of a loan among the companies of Grupo Rede Investments Changes in the investments in the quarter: Parent Company Investments Balances on 6/30/2009 Additions Equity pick-up Dividends Reversion of dividends Capital reduction Other Investments Balances on 9/30/2009 Bandeirante 752,864 62,981 (25,000) - 790,845 Escelsa 727,504 32, ,492 Enersul - - Investco 48, ,271 EDP Lajeado 165,989 5, ,880 Lajeado Energia 240,833 11,344 33, ,060 Tocantins Energia 79,330 1,771 (24,702) (17,247) 39,152 Enerpeixe 663,448 16, ,883 Energest 228,365 24, ,425 Enertrade 41,214 9,006-50,220 Enernova - Escelsapar - Enercouto - Porto do Pecém 79, ,942 (13,718) (9,675) - 210,231 Total 3,027, , ,538 (25,000) (9,675) (24,702) 16,636 3,290,459 Negative Goodwill Negative Goodwill Escelsa (2,388) - (2,388) Total (2,388) (2,388) Other Investments Adto. Futura compra de ações Denerge 37,500-37,500 Other Total 37, ,820 Total 3,063, , ,538 (25,000) (9,675) (24,702) 16,636 3,325,891 21

22 Investment Enernova Consolidated Balances on 6/30/2009 Additions Equity pick-up Capital increase Balances on 9/30/2009 EDP Renováveis 245 (453) 22,256 22,048 Negative Goodwill EDP Energias do Brasil S.A. Escelsa (2,388) (2,388) EDP Lajeado Investco (544) (544) Total (2,932) (2,932) Other Investments EDP Energias do Brasil S.A. Denerge 37,500 37,500 Other Bandeirante Other Escelsa Other 4,632 4,632 EDP Lajeado Advances to buy shares Other Enercouto Other 1,271 1,271 Total 44, ,909 Total 41, (453) 22,256 64, The Other investments item, in the amount of R$ 37,500, is related to the acquisition of 5.63% of preference shares, corresponding to 3.16% of all the shares of Denerge S.A., a privately-held company that holds interest in companies of the Brazilian electricity sector. In the scope of this transaction, Energias do Brasil will have the option to convert these shares of Denerge into preference shares of Rede Energia S.A., in a period of up to two years, at the price of a potential public offering or at the unit price of R$ 5.68 if the public offering does not take place. 22

23 Direct interest from the investments Company EDP Energias do Brasil 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Bandeirante 790, , Escelsa 760, , Energest 252, , Enertrade 50,220 41, EDP Lajeado 171, , Enerpeixe 679, , Enernova Tocantins Energia 39,152 79, Lajeado Energia 286, , Investco (I) 49,271 48, Escelsapar (II) Enercouto (III) Porto do Pécem 210,231 79, Other investment 37,820 37,820 Negative goodw ill (2,388) (2,388) Energest 3,325,891 3,063,152 Castelo Energética 66,235 62, Pantanal Energética 57,538 49, Evrecy 23,615 22, Costa Rica 9,156 8, Santa Fé 86,991 84, EDP Lajeado 243, ,011 Investco (I) 252, , Other Investment Negative goodw ill (544) (544) Tocantins Energia 252, ,143 Lajeado Energia 76, , Ipueiras Lajeado Energia 76, ,757 Investco (I) 420, , Enernova Direct interest Investments 420, ,044 EDP Renováveis 22, , Other Other investment 5,313 5,313 Elimination (4,282,763) (4,024,669) (4,277,450) (4,019,356) Total Consolidated 64,025 41,996 % of participation (I) Investco changed from proportional consolidated to full consolidated since September, 2008 (note 1.1) (II) Escelsapar has a provision for negative equity in the amount of R$ 2,322 (R$2,271 in June, 2009) (III) Enercouto has a provision for negative equity in the amount of R$ 458 (R$418 in June, 2009) (V) Enernova has a provision for negative equity in the amount of R$ 1,052 (R$555 in June, 2009) 23

24 15 - Property, plant and equipment Average annual depreciation rates % Historical Cost 06/30/2009 Accumulated Depreciation Net Value Net Value Fixed assets in service - tangible Management Buildings, civil works and improvements (2) 6 6 Machinery and equipment (433) Vehicles (642) Furniture and fixtures ,574 (675) Total fixed assets in service ,227 (1,752) 1,475 1,554 Construction in progress Management Total construction in progress Total 3,415 (1,752) 1,663 1,644 Average annual depreciation rates % Historical Cost Parent Company 09/30/2009 Consolidated 9/30/ /30/2009 Accumulated Depreciation Net Value Net Value Fixed assets in service - tangible Distribution Land 49,202-49,202 49,202 Buildings, civil w orks and improvements ,904 (59,453) 39,451 40,391 Machinery and equipment ,618,467 (1,662,005) 1,956,462 1,915,074 Vehicles ,728 (14,265) 5,463 5,536 Furniture and fixtures ,083 (4,802) 1,281 1,389 3,792,384 (1,740,525) 2,051,859 2,011,592 Generation Land 133, , ,318 Reservoirs, dams and mains ,730,408 (194,204) 1,536,204 1,461,317 Buildings, civil w orks and improvements ,987 (121,731) 571, ,781 Machinery and equipment ,414,098 (224,088) 1,190,010 1,161,912 Vehicles ,141 (1,904) 1,237 1,353 Furniture and fixtures ,058 (287) ,975,210 (542,214) 3,432,996 3,312,414 Transmission Buildings, civil w orks and improvements (170) Machinery and equipment ,352 (19,870) 59,482 59,083 79,864 (20,040) 59,824 59,430 Commercialization Land Buildings, civil w orks and improvements ,791 (2,357) 1,434 1,471 Machinery and equipment ,834 (2,454) 1,380 1,438 Vehicles - 1,606 (1,263) Furniture and fixtures (765) ,235 (6,839) 3,396 3,542 Management Land Buildings, civil w orks and improvements ,656 (9,209) 4,447 4,525 Machinery and equipment ,056 (57,587) 35,469 34,598 Vehicles ,673 (16,278) 12,395 13,408 Furniture and fixtures ,715 (7,603) 6,112 6, ,013 (90,677) 59,336 59,496 Activities not linked to concession Land Machinery and equipment 17 (17) - - Furniture and fixtures (156) (173) Total fixed assets in service 8,008,378 (2,400,468) 5,607,910 5,446,983 Tangible in progress Distribution 266, , ,839 Generation 745, , ,396 Transmission Commercialization Management (4,295) - (4,295) (3,479) Total tangible in progress 1,007,392-1,007,392 1,079,056 Activities linked to concession 2.33 (408,562) 29,475 (379,087) (378,228) Total tangible 8,607,208 (2,370,993) 6,236,215 6,147,811 24

25 Changes in the property, plant and equipment during the quarter are demonstrated as follow: Net Book Value on Parent Company Net Book Value on Tangible 6/30/2009 Acquisitions Depreciation 9/30/2009 Fixed assets in service - tangible Buildings, civil w orks and improvements 6 6 Machinery and equipment 373 (21) 352 Vehicles 237 (19) 218 Furniture and fixtures 938 (39) 899 1,554 (79) 1,475 Fixed assets in progress-tangible Tangible and intangible 1, (79) 1,663 Consolidated Net Book Value on Transfer to fixed assets Net Book Value on Tangible 6/30/2009 Acquisitions in service Depreciation Write-offs 9/30/2009 Fixed assets in service - tangible Land 179,742 4, ,942 Reservoirs, dams and mains 1,461,317 83,397 (8,510) 1,536,204 Buildings, civil w orks and improvements 604,515 17,212 (4,797) 616,930 Machinery and equipment 3,172, ,319 (46,961) (5,660) 3,242,803 Furniture and fixtures 20, (1,798) (59) 19,438 Vehicles 8, (407) 8,593 5,446, ,119 (62,473) (5,719) 5,607,910 Fixed assets in progress-tangible 1,079, ,906 (229,041) (2,529) 1,007,392 Total Tangible 6,526, , (62,473) (8,248) 6,615,302 (-) Obligation linked to concession Consumer s contribution (257,329) (4,520) 2, (258,493) Participation from Union, States and Municipal districts (47,476) (43) (47,064) Donations and subsides (73,423) (1,260) (73,530) (378,228) (5,823) 4, (379,087) Net total 6,147, , (58,376) (7,381) 6,236, Fixed assets related to concessions According to Articles 63 and 64 of Decree nº of February 26, 1957, the assets and installations used in generation, transmission, distribution, including commercialization of electricity, are related to these services and cannot be disposed, sold, assigned or mortgaged without prior and formal authorization of the Regulatory Agency. ANEEL Resolution nº 20 of February 3, 1999, regulates the removal of fixed assets from the Electricity Public Utility Service concessions, granting prior authorization to separate fixed assets not of use to the concession, when available for sale, determining that the amount from the sale should be deposited in a specific bank account for reinvestment in the concession Assets and rights used per subsidiary The assets of the Federal Government under the management of the subsidiary Escelsa constitute plots of land and old buildings that are no longer in use, due to the practically impossibility of their usage, therefore unproductive, and their values are recorded in the Extra-equity System Capitalization of expenses with central administration The sum of R$12,421 (R$4,760 on September 30, 2008) accounted for against net financial results, in Operating expenses - General and administrative expenses, was incorporated to Property, Plan and Equipment in the nine-month period ended September 30, 2009, as capitalization of portions of expenditures with central administration. 25

26 16 - Intangible assets Average annual amortization rates % Historical Cost Parent Company 9/30/ /30/2009 Accumulated amortization Net Value Net Value Intangible in service Administration Softw are ,012 (1,789) Total intangible in service 2,012 (1,789) Intangible in progress Administration Total intangible in progress Acquisition investment - Goodw ill Enersul e Pantanal 0 13,373 (2,753) 10,620 10,767 Bandeirante 0 38,143 (10,447) 27,696 28,060 Enerpeixe 0 3,837 (693) 3,144 3,173 Lajeado Energia e Investco 0 433,917 (20,657) 413, ,837 Porto do Pecém 3,590-3,590 3, ,860 (34,550) 458, ,427 Total intangible 495,305 (36,339) 458, ,023 26

27 Average annual amortization rates % Historical Cost 9/30/2009 Consolidated 06/30/2009 Accumulated amortization Net Value Net Value Intangible in service Distribution Softw are ,859 (30,418) 7,441 8,380 Permanent easement 12,700 (2) 12,698 12,702 Generation 50,559 (30,420) 20,139 21,082 Softw are ,980 (1,080) 1,900 1,957 Permanent easement Transmission 3,450 (1,080) 2,370 2,268 Permanent easement Commercialization Softw are ,844 (52,922) 922 1,012 Administration 53,844 (52,922) 922 1,012 Softw are ,950 (77,481) 54,469 58,586 Other ,885 (77,481) 55,404 59,521 Total intangible in service 240,864 (161,903) 78,961 84,009 Intangible in progress Distribution 1,820-1,820 1,633 Generation Commercialization 3,824-3,824 3,556 Administration 98,430-98,430 87,521 Total intangible in progress 104, ,444 93,239 Activities not linked to concession Goodw ill in the merger of parent company 418, , ,275 (-) Provision for dividends maintenance (418,460) - (418,460) (424,275) Acquisition investment - Goodw ill Enersul e Pantanal - 13,373 (2,753) 10,620 10,767 Bandeirante - 38,143 (10,447) 27,696 28,060 Enerpeixe - 3,837 (693) 3,144 3,173 Lajeado Energia e Investco - 1,173,076 (103,115) 1,069,961 1,093,998 Porto do Pécem 3,590-3,590 3,590 1,232,019 (117,008) 1,115,011 1,139,588 Total intangible 1,577,327 (278,911) 1,298,416 1,316,836 Changes in intangible assets during the quarter are the follow: Parent Company Net Book Value on Transfer to fixed Net Book Value on 6/30/2009 Acquisitions assets in service Amortization Reclassification 9/30/2009 Intangible in service (31) 223 Intangible in progress (5) 433 Goodwill 479,427 (4,480) (16,637) 458, , (4,511) (16,637) 458,966 Net Book Value on Consolidated Net Book Value on Transfer to fixed 6/30/2009 Acquisitions assets in service Amortization Write-offs Reclassification 9/30/2009 Intangible in service 84,009-1,220 (6,267) (1) - 78,961 Intangible in progress 93,239 12,503 (1,297) - (1) - 104,444 Goodwill 1,139, (7,940) - (16,637) 1,115,011 Total Intangível 1,316,836 12,503 (77) (14,207) (2) (16,637) 1,298,416 27

28 Permanent right of way means rights of passage to transmission lines associated with distribution in the concession area of the subsidiaries Bandeirante and Escelsa, and in private urban and rural areas, comprised of indemnities in favor of the property owners. As they are permanent (undefined useful life), they are not amortized. Software is represented by rights of use of intellectual property, comprised of acquisitions of the licenses and other expenditures with services supplementary to the use of the software. The economic grounds of goodwill consists of the expectation of future profitability, based on concession right, is amortized over the remaining period of the respective concessions, the recoverability test of which, carried out in the previous year at the value in use, was executed in accordance with CPC 1, not indicating loss of value to be recognized Suppliers Parent Company Consolidated Current Current 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Electricity supply 214, ,592 Free energy 5,343 5,343 CCEE (purchase of short-term energy) 13,939 17,450 Electricity netw ork utilization charges 57,419 49,342 System service charges 37 2,583 Other regulatory liabilities Material and services 6,058 6, , ,777 Total 6,058 6, , ,111 28

29 18 - Debentures Consolidated 09/30/ /30/2009 Company Current Noncurrent Current Noncurrent 3rd Issuers Bandeirante 84,479 83,333 89,125 83,333 1st Issuers Escelsa 93,363 88,000 89,317 88,000 2nd Issuers Escelsa 5, ,000 13, ,000 1st Issuers Investco 40,255 64,653 38,002 64,653 Issuers costs (1,440) (2,137) (1,440) (2,445) Total 222, , , ,541 Date Issuance characteristics Issuer Issuance Liquidation Frequency Series Amount of securities Compensation Amount Bandeirante 3/1/2006 4/7/2006 3rd Single 25, % of CDI 250,000 Escelsa 6/1/2006 7/5/2006 1st Single 26, % of CDI 264,000 Escelsa 7/2/2007 7/10/2007 2nd Single 25, % do CDI 250,000 Investco 11/1/2001 3/1/2002 1st Single 25, % per year 264, Issuers Bandeirante and Escelsa On January 30, 2006, the Board of Directors of Bandeirante and Escelsa approved the contracting of longterm finance lines, represented by the issue of debentures, being the third of Bandeirante and the first of Escelsa. All debentures issued are simple, book-entry nominative type, in a single series, for public subscription, with no guarantees (unsecured), non-convertible, with no roll-over clause option, with a nominal unit value of R$10,000.00, effective for 5 (five) years, semi-annual payments of interest and a grace period of 3 (three) years for the amortization of principal. Final maturity dates are as follow: Bandeirante: on March 1, 2011, with equal and consecutive annual amortizations on March 1, 2009, 2010, Escelsa: on June 1, 2011, with equal and consecutive annual amortizations on June 1, 2009, 2010 and The nominal value of the debentures shall be remunerated according to the interest rates mentioned above and applied to the accumulated average daily Interbank Deposit rate - DIs, over extra group, expressed as an annual percentage, based on 252 business day year, calculated and published daily by the Clearing House for the Custody and Financial Settlement of Securities - CETIP (DI Rates) calculated exponentially and accumulatively pro rata temporis for the business days incurred. The remunerations corresponding to the capitalization periods are due semi-annually, commencing on September 1, 2006, and December 2, 2006, for Bandeirantes and Escelsa, respectively, and the last coinciding with the final amortization dates. The contracts include rescission clauses in the following situations: (i) Non-compliance by the issuer with any monetary obligation in the Indenture, not remedied in 1 (one) business day as from the date of non-performance; (ii) Non-compliance by the issuer with the Covenants (Gross debt in relation to EBITDA and EBITDA of the period (+) cash in the beginning of the period (+) credit lines contracted but not utilized at the end of the period (+) increase in the debt amount which has been released during the period in relation to gross financing expenses of the period (+) debt amount settled/to be settled during the period (-) financing 29

30 income related to monetary restatement and monetary increase of the energy sold during the period (-) financing income related to hedge and swap operations of the period, which have been complied with to date); (iii) Petition for bankruptcy by third parties against the issuer and not duly remedied within the legal term; (iv) Petition for self-bankruptcy on the part of the issuer; (v) Settlement, dissolution or bankruptcy of the issuer or its direct controlling company; (vi) If the issuer proposes an extra-judicial recovery plan to any creditor or creditor class, irrespective of having been requested or judicial ratification obtained; or if the issuer files a request for judicial recovery irrespective of the approval of the recovery processing or its concession by the appropriate judge; and (vii) Cancellation of the electricity distribution concession Issuer - Escelsa On June 14, 2007, the Board of Directors of Escelsa approved the contracting of long-term finance lines, represented by the second issue of debentures. On July 2, 2007 the second debentures issuing were promoted. Those debentures are simple, book-entry nominative type, in a single series, for public subscription, with no guarantees (unsecured), non-convertible. The debentures of this issue are not subject to scheduled repricing. The debentures issued totaled 25,000, with a nominal unit value is R$ 10, integrally subscripted in a total amount of R$250,000, effective for 7 (seven) years, semi-annual payments of interest and a grace period of 5 (five) years for the amortization of principal. Final maturity date is on July 2, 2014, being the first amortization of 33.33% on June 2, 2012, the second amortization of 33.33% on July 2, 2013 and the third, of 33.34% on July 2, The issuing was concluded on July 10, As remuneration on the par value of the debentures, compensation interest will be levied and will correspond to 105% of the accumulation of the daily average rates of the overnight Interbank Deposits - DIs, "over extra group", expressed in the form of a percentage per year, base 252 business days, calculated and divulged on a daily basis by the Clearing House for the Custody and Financial Settlement of Securities - CETIP (DI rates) calculated exponentially and cumulatively pro rata temporis by business days lapsed. The remuneration corresponding to the capitalization periods will be due and paid semi-annually, with the first maturity on December 2, 2007 and the last on July 2, The funds obtained in the distribution were set aside in full for the payment of the senior notes issued by the issuer on July 15, 1997, with final maturity on July 15, The contract contains clauses establishing termination in the same situations already described in Note 18.1 for the first issue Issuer - Investco In February 2002, CVM registered the first issue of 25,000 non-convertible debentures at a nominal unit value of R$10, with a maturity of 120 months as from the issuing date (November 1, 2001), restated as from the issuing date at the General Market Price Index (IGP-M). The annual pre-fixed rate of remuneration is 12.8% p.a, applied on the outstanding balance of the restated nominal unit value. These debentures carry a joint guarantee from Empresa de Eletricidade Vale Paranapanema S.A. and EDP - Energias de Portugal. Financial settlement took place on March 1, 2002 for a total amount of R$ 264,791. On December 16, 2002, the third Addendum to the Indenture for these debentures was issued including the amendment to item and sub-item of Clause IV of the Indenture. As a result of these alterations, the interest due on November 1, 2002 was capitalized to the debentures nominal value with amortization from November 1, 2003 to November 1, 2011 at an annual rate of 11.11% p.a. In a meeting of the Board of Directors held on October 16, 2006 those present decided on the use of IGP-M - General Market Price Index to restate the debentures and they will be entitled to the payment of pre-fixed compensation interest at the rate of 10.5% per annum, to take effect in the next validity period of the remuneration, as of November 1, These funds were invested in fixed assets and working capital for completing the construction of the Luis Eduardo Magalhães Hydroelectric Electricity Plant (UHE Lajeado). 30

31 The amounts are consolidated at Energias do Brasil, up to August 31, 2008 in proportion to its percentage of indirect interest heretofore held, of % and as of September 1, 2008, fully consolidated in the sphere of the description presented in note On September 30, 2009, the subsidiaries are in full compliance with all the restrictive clauses of the covenants provided in the debenture contracts Maturity of non-current installments: Year Value , , , , ,075 Total 483, Changes in debentures in the quarter are shown as follow: Consolidated Current Noncurrent Principal Balances on June 30, , ,986 Charges and inflation adjustment 15,916 Amortization (22,626) Balances on September 30, , ,986 Costs of transation Balances on June 30, 2009 (1,440) (2,445) Amortization 308 Transfer to current (308) 308 Balances on September 30, 2009 (1,440) (2,137) Balances net on September 30, , , Loans, financing and debt charges 9/30/2009 Current Parent Company 6/30/2009 Noncurrent Charges Principal Charges Principal Local currency Bank credit paper 5, ,000 5, ,000 Total 5, ,000 5, ,000 31

32 Charges 9/30/2009 Principal Consolidated Charges 6/30/2009 Principal Current Current Noncurrent Current Current Noncurrent Foreign currency BID - Interamerican Development Bank bandeirante ,526 17, ,651 22,151 Unibanco bandeirante (1,438) (2,157) (1,438) (2,397) BNDES energest BNDES cesa BNDES pantanal Citibank pecém 140, , ,546 16, ,462 21,293 Local currency Eletrobrás bandeirante 45 2,518 12,940 2,371 13,591 Bank credit paper bandeirante 2,958 20,400 81, ,400 81,600 Interest on the fund for reversal bandeirante BNDES FINAME bandeirante 6 1, , BNDES - Banco do Brasil bandeirante 105 5,937 22, ,937 23,745 BNDES - Banco Santander bandeirante 105 5,937 22, ,937 23,745 HSBC - Notas Promissórias bandeirante 7, ,000 1, ,000 Eletrobrás escelsa 91 10,554 82, ,181 85,182 Bank credit paper escelsa 501 8,080 32,320 1,678 8,080 32,320 BNDES escelsa ,463 41, ,461 45,452 Bank credit paper energest ,000 1,806 48,000 BNDES energest 34 4, ,387 1,099 Santander - CDI energest , ,355 BNDES cesa 49 4,188 7, ,189 8,379 Santander - CDI cesa 63 11, ,864 BNDES pantanal 43 3,787 6, ,788 7,575 Eletrobrás costa rica , ,851 BNDES enerpeixe 1,491 56, ,084 1,549 56, ,196 Banco Itau enerpeixe ,220 91, ,220 96,145 Bradesco enerpeixe ,350 76, ,350 80,121 Unibanco enerpeixe ,480 61, ,480 64,097 Banco do Brasil enerpeixe ,351 76, ,350 80,119 Unibanco sfen ,820 62, ,611 62,402 Banco da Amazônia investco 455 8,586 2, ,452 4,438 BNDES investco , ,269 (35) 44, ,103 Fundação Enersul investco Citibank pecém 96, ,000 Bank credit paper energias 5, ,000 5, ,000 22, ,278 1,141,135 16, ,337 1,197,550 Sw aps Results BID - Interamerican Development Bank bandeirante 10,573 12,903 9,377 12,729 Citibank pecém 50,145 25,827 10,573 63,048 9,377 38,556 Total 22,426 1,025,397 1,220,510 16,961 1,039,176 1,257, Additional information on debt service of EDP Energias do Brasil. Credit Bill - Contract executed in October 2008, in the amount of R$250,000, with Banco Bradesco S.A. Interest will be levied on the amount of the loan at the rate of 132% of the CDI, capitalized daily and payable quarterly between January and December 2009, principal falling due in a single installment in December This operation establishes as guarantee the pledge of 13,110,225 shares issued thereby Additional information on debt service of Bandeirante BID Interamerican Development Bank External loan contract with the participation of Brazilian, Portuguese and Spanish banks, signed on March 5, 2004, amounting to US$100 million, drawn during the fiscal year 2004 with a two-year grace period before amortizations of principal and with final maturity in up to 8 years, being: (i) Tranche A - US$38.9 million, with principal due quarterly from May 15, 2006 to February 15, 2012, remunerated at interest calculated at annual LIBOR plus 4.375% annually, maturing quarterly as from May 15, 2004; and (ii) Tranche B - US$61.1 million with principal due quarterly from May 15, 2006 to February 15, 2009, remunerated at interest calculated at annual LIBOR plus 4.0%, maturing quarterly as from May 15, 2004.Transaction settled on February 15, This financing is allocated to investment projects and is guaranteed by the Company s electricity supply receivables, with the establishment of covenants (total debt in relation to total debt plus shareholders equity, total debt in relation to EBITDA and debt service coverage index, among other non-financial covenants), 32

33 fully complied with to the present time. Eventual non-compliance may result in anticipation of settlement of the contract, either partially or in full. Exchange swap operations with hedge characteristic were executed for this loan with Banco J.P. Morgan S.A., on March 15, 2004 and Banco Citibank S.A., on November 13, 2003, for exchange of original charges of the financing at BID, for remuneration based on the interval of % to 109.7% of the CDI and % to % of the CDI, respectively, maturing on the same dates of the financing agreement. Promissory Notes On May 7, 2009, the Board of Directors of Bandeirante approved the contracting of a short-term facility, materialized by the issuance of a Promissory Note. The promissory notes were issued in certificated form and will be deposited at Banco Bradesco S/A. The remuneration corresponds to the accumulated variation of the average daily rates of the overnight interbank deposits (DI), calculated and published daily by CETIP, capitalized from a spread corresponding to 1.30% per annum. The remuneration plus the amount of principal will be settled on May 30, 2010 in a single installment. The value of each Note corresponds to R$1,000, and 230 notes were issued in the total amount of R$230,000. Eletrobrás (i) Reluz Program a) Contract signed on April 9, Funds released in the amount of R$61 and R$547, on June 11, 2007 and August 29, 2007, respectively. The restated debt balance carried an interest rate of 5% annually and a management fee of 1.5% annually, both maturing monthly as from July 30, The outstanding debt balance shall be paid in 60 equal monthly and consecutive installments, the first maturing on May 30, 2008 and the last one on April 30, The loan is guaranteed by promissory notes and an assignment on company revenues. b) Contract signed on December 12, Resources released in the amount of R$391 on June 18, The debt balance carries an interest rate of 5% annually, which will be capitalized up to February 28 at a rate of 5% annually and a management fee of 1.5% annually, paid monthly. The outstanding debt balance shall be paid in 60 equal monthly and consecutive installments, the first maturing on March 30, 2009 and the last one on February 28, The loan is guaranteed by promissory notes and an assignment on company revenues. c) Contract signed on December 12, Resources released in the amount of R$295 on June 18, The debt balance carries an interest rate of 5% annually, which will be capitalized up to February 20, 2009 and a management fee of 1.5% annually, paid monthly. The outstanding debt balance shall be paid in 60 equal monthly and consecutive installments, the first maturing on March 30, 2009 and the last one on February 28, The loan is guaranteed by promissory notes and an assignment on company revenues. d) Contract signed on December 12, Resources released in the amount of R$1,004 on February 17, The debt balance carries an interest rate of 5% annually, which will be capitalized up to February 20, 2009 and a management fee of 1.5% annually, paid monthly. The outstanding debt balance shall be paid in 60 equal monthly and consecutive installments, the first maturing on March 30, 2009 and the last one on February 28, The loan is guaranteed by promissory notes and an assignment on company revenues. e) Contract signed on December 12, Resources released in the amount of R$3,203 on February 17, The debt balance carries an interest rate of 5% annually, which will be capitalized up to February 20, 2009 and a management fee of 1.5% annually, paid monthly. The outstanding debt balance shall be paid in 60 equal monthly and consecutive installments, the first maturing on March 30, 2009 and the last one on February 28, The loan is guaranteed by promissory notes and an assignment on company revenues. f) Contract signed on December 12, Resources released in the amount of R$2,154 on February 17, The debt balance carries an interest rate of 5% annually, which will be capitalized up to February 20, 2009 and a management fee of 1.5% annually, paid monthly. The outstanding debt balance shall be paid in 60 equal monthly and consecutive installments, the first maturing on March 30, 2009 and the 33

34 last one on February 28, The loan is guaranteed by promissory notes and an assignment on company revenues. (ii) Luz para Todos ( Light for All ) Program a) Contract signed on May 28, Line of credit amounting to R$ 11,523, in the form of finance and R$1,773 in the form of a subsidy. Funds released in the amount of R$7,080 as financing and R$1,089, in the form of a subsidy. The restated debt balance carried an interest rate of 5% annually and a management fee of 1% annually, both maturing monthly as from July 30, The outstanding debt balance shall be paid in 120 equal monthly and consecutive installments, the first maturing on August 30, 2006 and the last one on July 30, On the non-disbursed balance there is a credit reserve commission of 1%, maturing on the 30th of each month, up to the termination of the credit. The loan is guaranteed by promissory notes and an assignment on company revenues. b) Contract signed on June 25, Credit line in the amount of R$12,359. Funds released in the amount of R$3,708. The restated debt balance carried an interest rate of 5% annually and a management fee of 1% annually, both maturing monthly as from October 30, The outstanding debt balance shall be paid in 120 equal monthly and consecutive installments, the first maturing on October 30, 2009 and the last one on September 30, On the non-disbursed balance there is a credit reserve commission of 1%, maturing on the 30th of each month, up to the termination of the credit. The loan is guaranteed by promissory notes and an assignment on company revenues. Bank Credit Certificates Agreements signed on December 5, 2006 worth a total of R$102,000, being R$ 51,000 signed with the Banco do Brasil S.A. and R$ 51,000 with Banco Santander Banespa S.A.. The principal value of the loan carries an interest rate of 105% of CDI, capitalized daily. Principal payable in five annual installments, the first due on December 5, 2009 and the last on December 5, 2013 with semi-annual payments of interest as from June 5, 2007 to December 5, This operation carries a covenant of gross debt/ebitda at a ratio not exceeding 3.5. The company is in compliance to the present time. Contractual conditions are identical in the case of both institutions. BNDES agreement n / Agent Banco do Brasil - Signed in December 2007, for the deployment of an Investment Program from May 2006 to December 2007, being the first release in February 2008, in the amount of R$16,146 and the second release on May 2008, in the amount o R$19,367, with funds from BNDES (Finem/Finame) through Banco do Brasil, amortizable in 72 monthly installments, with the first falling due on July 15, 2008 and the last one on June 15, 2014 with interest of 3.3% per annum, indexed to TJLP. Guarantee, assignment of revenues equivalent to 130% of the amount of the highest financing installment. This operation establishes covenant of the Gross Financial Debt / EBITDA relation, at a rate no higher than 3.5, fulfilled up to now. BNDES agreement n / Agent Banco Santander - Signed in December 2007, for the deployment of an Investment Program from May 2006 to December 2007, being the first release in February 2008, in the amount of R$16,146 and the second release on May 2008, in the amount o R$19,367, with funds from BNDES (Finem/Finame) through Banco Santander, amortizable in 72 monthly installments, with the first falling due on July 15, 2008 and the last one on June 15, 2014 with interest of 3.3% per annum, indexed to TJLP. Guarantee, assignment of revenues equivalent to 130% of the amount of the highest financing installment. This operation establishes covenant of the Gross Financial Debt / EBITDA relation, at a rate no higher than 3.5, fulfilled up to now. 34

35 Result of the swaps These financial operations are assessed at the fair value, as described in note JP Morgan Swap Operation Hedge operation with Banco JP Morgan with a swap of Euro monetary variation where the Company pays 73.6% of CDI at the liability point and the Bank pays 100% of foreign exchange variation at the asset point, signed on March 15, 2004 for 12,720 thousand due on January 2, On July 11, 2005, this operation was renegotiated at a reduced percentage of CDI of 59.8%. Transaction settled in January Hedge operations with Banco JP Morgan with a swap of US Dollar variation, where the Company pays 71.6% of CDI at the liability leg and the Bank pays 100% of foreign exchange variation at the asset leg, signed on July 28, 2004 in the amount of US$ 586 thousand with final maturity on January 2, Transaction settled in January Citibank Swap Operation Hedge operations with Citibank with a swap of US Dollar monetary variation where the Company pays 79.94% of CDI at the liability leg and the Bank pays 100% of the foreign exchange variation at the asset leg, signed on November 13, 2003 for US$ 490 thousand with final maturity on January 29, Transaction settled in January Additional information on debt service of Escelsa BNDES (Domestic currency) Agreement signed in August 2006 with on lending of funds through Banco ALFA for the investment program in substations and electricity transmission and distribution. In fiscal year 2006, funds amounting to R$17,320 were obtained. The principal amount carries an annual interest rate of 4.8% + TJLP (the long term interest rate), payable monthly as from October 15, 2006, jointly with principal payments and a final maturity on September 15, The agreed guarantee represents a percentage of the monthly receivables from electricity services corresponding to the minimum amount of 130% of the principal installments and debt charges. BNDES agreement n / Agent Banco do Brasil - Signed in December 2007, loan intended for the deployment of a Program for Investments in expansion, modernization and improvement of the performance of the electricity distribution network, being the first release of money in January 2008, in the amount of R$27,054, and the second release in May 2008, in the amount of R$6,106, with funds from BNDES (Finem/Finame) through Banco do Brasil, amortizable in 72 monthly installments, with the first falling due on July 15, 2008 and the last on June 15, 2014 and interest of 3.3% per annum, indexed to TJLP. Guarantee, assignment of revenues equivalent to 130% of the amount of the highest financing installment. This operation establishes covenant of the Gross Financial Debt / EBITDA relation, at a rate no higher than 3.5, fulfilled up to now. BNDES agreement n / Agent Banco Santander - Signed in December 2007, loan intended for the deployment of a Program for Investments in expansion, modernization and improvement of the performance of the electricity distribution network, being the first release of money in January 2008, in the amount of R$27,054, and the second release in May 2008, in the amount of R$6,106, with funds from BNDES (Finem/Finame) through Banco do Brasil, amortizable in 72 monthly installments, with the first falling due on July 15, 2008 and the last on June 15, 2014 and interest of 3.3% per annum, indexed to TJLP. Guarantee, assignment of revenues equivalent to 130% of the amount of the highest financing installment. This operation establishes covenant of the Gross Financial Debt / EBITDA relation, at a rate no higher than 3.5, fulfilled up to now. Bank Credit Certificates Agreements signed in February 2007 worth a total of R$40,400, being R$ 20,200 signed with the Banco do Brasil S.A. and R$ 20,200 with Banco Santander Banespa S.A.. The principal value of the loan carries an interest rate of 105% of CDI, capitalized daily. Principal payable in five annual installments, the first due on February 9, 2010 and the last on February 10, 2014 with semi-annual payments of interest as from August 9, 2007 to February 10, This operation carries a covenant of gross debt/ebitda at a ratio not exceeding 3.5. The company is in compliance to the present time. Contractual conditions are identical for both institutions. 35

36 Eletrobrás (i) Luz para Todos ( Light for All ) Program 1st stage - Program instituted by Decree 4,873 of November 11, 2003, under the coordination of the Ministry of Mines and Energy and implemented by Eletrobrás. Contract signed on May 21, 2004, whereas funds in the amount of R$10,720 were released in 2004, of R$7,147 in 2005, of R$4,788 in 2006, and of R$3,095 in 2008, totaling R$25,750. The principal amount carries an interest rate of 5% annually and a management fee of 1% annually, both maturing monthly as from October 30, The principal is payable monthly as from August 30, 2006 to July 30, 2016.The loan is guaranteed by promissory notes and an assignment on company revenues. (ii) Luz para Todos ( Light for All ) Program 2nd stage - Program instituted by Decree 4,873 of November 11, 2003, under the coordination of the Ministry of Mines and Energy and implemented by Eletrobrás. Contract signed on November 20, Resources released in the amount of R$40,631 in The principal amount carries an interest rate of 5% annually and a management fee of 1% annually, both maturing monthly as from April 30, The principal is payable monthly as from May 30, 2008 to April 30, 2018.The loan is guaranteed by promissory notes and an assignment on company revenues. (iii) Luz para Todos ( Light for All ) Program 3rd stage - Program instituted by Decree 4,873 of November 11, 2003, under the coordination of the Ministry of Mines and Energy and implemented by Eletrobrás. Contract signed on June 25, Resources released in the amount of R$25,760 in The principal amount carries an interest rate of 5% annually and a management fee of 1% annually, both maturing monthly as from April 30, The principal is payable monthly as from April 30, 2010 to March 30, 2020, guaranteed by promissory notes and an assignment on company revenues. (iv) Reluz Program Various agreements signed with Eletrobrás with respect to the Conservation and Energy Efficiency Projects Financing Program for the Municipalities of Vila Velha, Serra, Ibiraçu, Aracruz, João Neiva, Alfredo Chaves, and Santa Maria de Jetibá for the contracted amount of R$17,960. Resources were released in the amount of R$14,085. The agreements carry an annual interest rate of 5% p.a. and an annual management fee of 1.5% p.a. on the outstanding debt balance, capitalized monthly during the grace period. The installments of the principal will fall due monthly as of the end of the grace period. Maturity of the first installment on July 30, 2002 and the last on November 30, The loan is guaranteed by promissory notes and an assignment on company revenues. (v) Reluz I Program - Contract ECF-181/2007 executed with Eletrobrás, relating to the Energy Conservation and Efficiency Project Financing Program, in the amount of R$85,866, with the 1st amortization maturing on March 30, 2010 and the last on March 30, Contract ECF-2488/2007 executed with Eletrobrás, relating to the Energy Conservation and Efficiency Project Financing Program, in the amount of R$214, with the 1st amortization maturing on October 11, 2007 and the last on December 2, Contract ECF-2500/2007 executed with Eletrobrás, relating to the Energy Conservation and Efficiency Project Financing Program, in the amount of R$294, with the 1st amortization maturing on October 11, 2008 and the last on December 2, The agreements carry an annual interest rate of 5% p.a. and an annual management fee of 1.5% p.a. on the outstanding debt balance, capitalized monthly during the grace period. The installments of the principal will fall due monthly as of the end of the grace period. The loan is guaranteed by promissory notes and an assignment on company revenues Additional information on debt service of Enerpeixe The balance of loans and financing reflects original financing from the BNDES of R$ 670,000, authorized by the Board of Directors of the BNDES, number 691/2003 of November 10, 2003 and contracted on May 21, 2004, being R$ 335,000 directly and R$ 335,000 through financial institutions as follows: Direct installment Sub-credit BNDES Itaú BBA Indirect installment Banco do Brasil Bradesco Unibanco Indirect total Total "A" 26,184 7,855 6,546 6,546 5,237 26,184 52,368 "B" 235,671 70,701 58,917 58,917 47, , ,340 "C" 7,314 2,195 1,829 1,829 1,463 7,316 14,630 "D" 65,831 19,749 16,458 16,458 13,166 65, , , ,500 83,750 83,750 67, , ,000 The major loan conditions are as follow: 36

37 (ii) Amortization: a) For the sub-credits "A" and "C", 12 monthly and successive installments, with the first falling due on March 15, 2007 and the last on February 15, 2008, already settled; b) For the sub-credits "B" and "D", 95 monthly and successive installments, with the first falling due on March 15, 2008 and the last on January 15, (ii) Charges: a) For the subcredits "A" and "C", readjusted 3-month floating rate based on the weighted average costs of all the rates and expenses incurred by the BNDES in raising funding in foreign currency plus 4.5% annually, during the period in which the guarantee granted by the indirect parent company EDP - Energias de Portugal S.A. is in full force and effect; b) For the subcredits "B" and "D", TLJP the Long Term Interest Rate plus 4.5% annually during the period in which the guarantee granted by EDP - Energias de Portugal S.A. is in full force and effect; and c) The abovementioned spreads can be 6% annually as from the effective date of the guarantee of the direct parent company EDP - Energias do Brasil S.A., in place of the guarantee of EDP - Energias de Portugal S.A., which may occur as from January 2008 only upon request from the Company and EDP - Energias do Brasil S.A.. This rate can be reduced to 5% per annum, if EDP - Energias do Brasil S.A. presents a minimum price-earnings ratio of 38% and Enerpeixe presents a rate of coverage of the debt service of 1.3. (iii) Guarantees and obligations: a) Lien on shares corresponding to 60% of the capital stock of the beneficiary held by EDP - Energias do Brasil S.A.; b) Lien on emerging rights of the concession, including among others: The beneficiary s credit rights resulting from the sale of energy generated by UHE Peixe Angical for Bandeirante Energia S.A., Espírito Santo Centrais Elétricas S.A. - ESCELSA, Empresa Energética de Mato Grosso do Sul S.A. - ENERSUL and Centrais Elétricas Matogrossenses S.A. CEMAT; The guarantees included in the Purchase and Sale of Energy Agreement - CCVEs. c) Maintenance in a financial reserve account of a value equivalent to at least three months of installments of amortization of principal, interest and charges as well as three months payment of the O&M Contract (Operation and Maintenance Contract), during the amortization phase; and d) Letter of guarantee of EDP - Energias de Portugal, governed by Portuguese laws. The restrictive clauses of these contracts are in full compliance on September 30, Additional Information on debt service of Investco BNDES (i) Financing Agreement through the opening of a credit line signed with the BNDES, with the guarantee of Investco s shareholders and its controllers on September 21, 2000 in the total amount of R$180,000, with an annual interest rate of 4% above the TJLP, payable quarterly on January 15, April 15, July 15 and October 15 of each year in the period between October 15, 2000 and October 15, 2002, and monthly as from November 15, The loan is being amortized in 120 monthly and consecutive installments according to the Increasing Amortization System (Price Table) as from November 15,

38 (ii) Credit Agreement Contract through onlending contracted with the BNDES signed with Banco Itaú, Bradesco, BBA Creditanstalt and Banco ABC, with the guarantee of Investco s shareholders and its controllers on September 21, 2000 for the amount of R$120,000, with an annual rate of interest of 4% over the TJLP, payable quarterly during the grace period. Following a grace period of 24 months, installments of principal are being amortized in 120 monthly and consecutive installments as from November 15, Part of Investco S.A. s common shares were given in guarantee together with a promissory note and an assignment of contractual rights. Banco da Amazônia - BASA (i) (ii) Financing agreement signed on September 30, 1999, amortized monthly in 72 installments, between November 10, 2003 and October 10, 2009, in the total amount of R$50,000, with interest of 11.5% per annum, payable monthly. During the grace period, only the amount corresponding to 50% of these charges is payable and the remaining 50% capitalized and incorporated in the outstanding balance, to be paid with the amortization of the principal installments. According to an addendum signed in December 2007, there was a lien of machinery and equipment and a bank guarantee from Unibanco S.A. in the amount of R$ 18,937 as guarantee for this financing. Financing agreement signed on December 28, 2000, 10 for the total amount of R$44,300, to be amortized in 84 months, including a 36-month grace period, the first installment of principal maturing February 10, 2004 and the last on January 10, 2011 with an annual interest rate of 11.5%, payable monthly. During the grace period, 50% of these charges are payable, and the remaining 50% capitalized and incorporated in the outstanding debt balance, to be paid with the amortization of the principal installments. According to the addendum signed in December 2007, collateral in the form of equipment in guarantee and a bank guarantee from Unibanco S.A. were given, in the amount of R$ 18,937. Safra Leasing Safra Leasing S.A. - A commercial lease was signed on March 10, 2008 in the amount of R$198. The amortization period of this contract is 36 months. The financial charges are variation of the CDI % annually. The payment of the first installment occurred on April 14, 2008 and the last installment has its maturity scheduled for March 14, 2011, the asset leased by the Company was a microbus for exclusive use by the employees of the Plant Additional information on debt service of CESA and Pantanal Energética Ltda. BNDES Contract signed in February 2002 by CESA for the construction of three Small Hydroelectric Power Plants PCH s - Viçosa and São João in the state of Espírito Santo and Paraiso in the state of Mato Grosso do Sul. In fiscal year 2002, funding amounting to R$ 39,280 in 2004, R$ 17,565 and R$5,635 in 2007 were released. Interest is levied on the amount of principal at the rate of 4.5% per annum plus variation of TJLP, enforceable monthly, together with the installments of the principal with final maturity on July 15, The guarantees are: (i) assignment of receivables resulting from authorizations granted by ANEEL, either from the extinguishment of the authorizations, purchase and sale of electricity and the right to generate electricity from its PCHs; and, (ii) the pledging of common nominative shares comprising the total stake of Energest S.A in the Company. In the context of transfer of the concession of PCH Paraíso from CESA to Pantanal, the balances of this financing corresponding to PCH Paraíso, as well as the respective conditions established in the contract, were transferred to Pantanal. Res Agreement for onlending of loan in foreign currency nº signed on March 14, 2008, by CESA, with Banco Santander S/A in the amount of USD 5,892, equivalent to R$10,000, for the period of 335 days with final maturity on February 12, 2009, at the rate of 4.81% per annum. The amortization and the interest will be paid in a single installment upon the final maturity of the agreement. Guarantee, surety in promissory note in foreign currency. Transaction settled in February An exchange swap operation was performed for this loan with hedge characteristic, with Banco Santander S/A, on March 14, 2008, for exchange of original charges of the financing with the same bank by the remuneration of % of CDI. Transaction settled in February Onlending of Funds Obtained in Reais Abroad - contract with Banco Santander S.A., nº , signed on February 12, 2009, by CESA S.A. in the amount of R$11,864, for the period of 60 days with final maturity on April 13, 2009, at the rate of % of CDI. The amortization and the interest will be paid in a single installment upon the final maturity of the agreement. Guarantee, surety in promissory note and EDP - 38

39 Energias do Brasil S/A as Intervening Guarantor. Through a rider to the contract, on April 13, 2009 this operation had its settlement term extended to June 12, 2009, maintaining all the other clauses and conditions of the original contract ratified. On June 12 this operation had its maturity date renegotiated to September 10, 2009, maintaining all the other clauses and conditions of the original contract. On September 10, 2009, this operation had its maturity date renegotiated to March 10, 2010, maintaining all the other clauses and conditions of the original contract Additional information on debt service of Energest BNDES Contract signed in October 2001 with the pass through of funds from, Itaú (leader), Alfa and Sudameris banks, to finance investments for the installation of the fourth turbine at UHE Mascarenhas. In fiscal year 2001, funds amounting to R$24,102 were obtained. Interest is levied on the amount of principal at the rate of 3.5% per annum, plus variation of TJLP (national currency) and of 3.5% per annum plus the variation of UMBNDES (foreign currency), enforceable monthly, together with the installments of the principal with final maturity on October 15, The guarantee is an assignment on revenues from electricity services provided in the amount equivalent to at least 1.4 (one decimal point four) times the value of the largest installment due from the beneficiary. This operation establishes covenant of the relation EBITDA/ Gross financing expenses, which has been complied with to date. Res Agreement for onlending in foreign currency nº signed on March 14, 2008, with Banco Santander S/A in the amount of USD 10,606, equivalent to R$18,000, for the period of 335 days with final maturity on February 12, 2009, at the rate of 4.81% per annum. The amortization and the interest will be paid in a single installment upon the final maturity of the agreement. Guarantee, surety in promissory note in foreign currency. Transaction settled in February An exchange swap operation was performed for this loan with hedge characteristic, with Banco Santander S/A, on March 14, 2008, for exchange of original charges of the financing with the same bank by the remuneration of % of CDI. Transaction settled in February Onlending of Funds Obtained in Reais Abroad - contract with Banco Santander S.A., nº , signed on February 12, 2009, by Energest S.A. in the amount of R$21,355, for the period of 60 days with final maturity on April 13, 2009, at the rate of % of CDI. Amortization and interest will be paid in a lump sum upon expiration of the agreement. Guarantee, surety in promissory note and EDP - Energias do Brasil S/A as Intervening Guarantor. Through a rider to the contract, on April 13, 2009 this operation had its settlement term extended to June 12, 2009, maintaining all the other clauses and conditions of the original contract ratified. On June 12 this operation had its maturity date renegotiated to September 10, 2009, maintaining all the other clauses and conditions of the original contract. On September 10, 2009, this operation had its maturity date renegotiated to March 10, 2010, maintaining all the other clauses and conditions of the original contract. Bank Credit Certificates Agreement signed in February 2008 worth a total of R$48,000, signed with the Banco do Brasil S.A. The principal value of the loan carries an interest rate of 106.6% of CDI, capitalized daily. Principal payable in five annual installments, the first due on February 20, 2011 and the last on February 20, 2015 with semi-annual payments of interest as from August 20, 2008 to February 20, This operation carries a covenant of gross debt/ebitda at a ratio not exceeding Additional information on debt service of Costa Rica Eletrobrás-Financing ECF-1,568/97 - Contract signed by Enersul, on November 4, 1997, in the amount of R$5,375, for financing of the construction of the Hydroelectric Plant of Costa Rica, with resources from the Investment Fund of Eletrobrás - FINEL, with interest of 6.5% per annum, ending on May 31, 2014, amortization in 180 monthly, equal and successive installments, with guarantee in revenue and promissory note. Contract repassed to Costa Rica Energética, through the Private Contract for Commitment of Debtor Release Additional information on debt service of Santa Fé Energia S/A BNDES - Agreement signed in May 2009, with onlending of funds through Banco do Brasil. Funds in the amount of R$64,000 were released on May 29, Interest is levied on the amount of principal at the rate of 1.9% per annum plus variation of TJLP, enforceable monthly, as from October 15, 2010, together with the 39

40 installments of the principal with final maturity on February 15, The negotiated guarantee establishes the lien on shares of the beneficiary at 100% in favor of the Financial Agent. This operation establishes a covenant of the Debt Service Coverage Index (ICSD) of at least 1.2 times, complied with thus far Additional information on debt service of subsidiary under joint ownership Porto do Pecém Working Capital - Bridge loan agreement for the Pecém project, executed on January 31, 2008 with a bank syndicate the coordinator of which is Banco Citibank in national currency, in the amount of R$192,000, maturing on April 30, 2009, with incidence of CDI interest plus 0.75% per annum capitalized daily and paid monthly, principal with settlement in a single installment on April 30, The sums of R$24,000 and R$168,000, respectively, were drawn on January 31, 2008 and April 8, Guarantee survey of the shareholders, each one accountable for 50% of the total amount. On April 30 this operation had its settlement period extended until July 29, 2009, and its remuneration altered to CDI rate plus 3.00% per annum, keeping all the other clauses and conditions of the original contract ratified. On September 30, 2009, there was another rider to the contract postponing this operation s maturity date to November 30, 2009, keeping the remuneration rates and the other provisions of the agreement unchanged. Working Capital - Bridge loan agreement for the Pecém project executed on February 26, 2008 with a bank syndicate the coordinator bank of which is Banco Citibank in foreign currency, in the amount of US$158 million maturing on April 30, 2009, with incidence of MONTHLY LIBOR interest plus 0.75% per annum and paid monthly, principal with settlement in a single installment on April 30, The amounts of R$219,682 and R$31,838, respectively, were drawn on March 4, 2008 and April 8, Guarantee survey of the shareholders, each one accountable for 50% of the total amount. On April 30, 2009, this operation, through a rider to the contract, had its settlement period extended until July 29, 2009, and its remuneration altered to MONTHLY LIBOR plus 3.00% per year, keeping all the other clauses and conditions of the original contract ratified. On September 30, 2009, there was another rider to the contract postponing this operation s maturity date to November 30, 2009, keeping the remuneration rates and the other provisions of the agreement unchanged. Distribution of the financing by bank: Financial institution Local currency Foreign currency Banco Espirito Santo 11,520 US$ 9,480,000 WestLB 11,520 US$ 9,480,000 Banco Comercial Português 42,240 US$ 34,760,000 Banco do Brasil 42,240 US$ 34,760,000 Banco Citibank 42,240 US$ 34,760,000 ING 42,240 US$ 34,760,000 Total 192,000 US$ 158,000,000 Long-term Financing In July, EDP ENERGIAS DO BRASIL executed the long-term financing agreements with the Inter-American Development Bank ("IDB") and with the National Bank for Economic and Social Development ("BNDES") for the implementation of UTE Porto do Pecém I. The financing agreement with BNDES establishes a loan in the amount of R$1.4 billion (in nominal R$, excluding interest during construction), with a total period of 17 years, consisting of 14 years of amortization and grace period for payment of interest and principal up to July The contracted cost is of TJLP plus a spread of 2.77% per annum. The interest will be capitalized during the construction phase. The financing agreement executed with BID includes a direct loan (A Loan) of US$147 million, with total period of 17 years and start of amortization of principal in 2012, as well as a loan with participation of commercial banks (B Loan) of US$180 million, with total period of 13 years and start of amortization of principal in 2012 as well. The initial rates of the A Loan and B Loan are Libor bps and Libor bps, respectively, with step ups throughout the period. Said long-term loan in US$, in turn, has already been subject to the contracting both of exchange hedge and of an interest rate swap (from Libor to fixed rate). The consortium of B-lenders is comprised of the banks Millenium BCP, Caixa Geral de Depósitos and Calyon. 40

41 Result of the swaps Hedge operation with Banco Citibank of NDFs (Non Deliverable Forwards), executed on October 17, 2007, in the total amount of US$ 406,736,000, with maturities between January 2009 and October 2012, with the contracted initial parity of R$/US$ 1,8138. Hedge operation with Banco Citibank and UBS Pactual of NDFs (Non Deliverable Forwards), executed on June 30, 2009, in the total amount of EUR 26,059,929.27, with maturities between June 2009 and January 2012, with the contracted initial parity of EUR/US$ Hedge operation with Banco Citibank and UBS Pactual of NDFs (Non Deliverable Forwards), executed on June 30, 2009, in the total amount of EUR 10,134,416.94, with maturities between June 2009 and January 2012, with the contracted initial parity of EUR/R$ Hedge operation with Banco Citibank and UBS Pactual of NDFs (Non Deliverable Forwards), executed on June 30, 2009, in the total amount of US$ 106,592,330.70, with maturities between June 2009 and January 2012, with the contracted initial parity of US$/R$ Swap operation at Banco Citibank, contracted on October 16, 2007, in the amount of US$ 334,181,000, starting on April 2, 2012 with final maturity on October 1, 2024, where the Company pays variation of the US$ plus 5.82% per annum in the short position and the Bank in the long position pays 100% of LIBOR. Swap operation at Banco Citibank, contracted on October 16, 2007, in the amount of US$ 334,181,000, starting on April 2, 2012 with final maturity on October 1, 2021, where the Company pays variation of the US$ plus 5.79% per annum in the short position and the Bank in the long position pays 100% of LIBOR. The conditions for hedge accounting were fulfilled for these operations with derivatives designed for protection of risk and currency of the financings in foreign currency for the UTE Porto do Pecém project Maturity of current and non-current installments (principal and charges): Parent Company Currency Maturity Local Total Current , ,140 Total 255, ,140 41

42 Consolidated Currency Maturity Local Foreign Total Current 436, , , ,436 16, , , ,290 1,047,823 Noncurrent ,750 7,522 83, ,185 22, , ,708 25, , , , , , , , ,100 24, ,145 12,145 After ,795 24,570 65,365 1,141,135 79,375 1,220,510 Total 2,026, ,665 2,268, Post-employment benefits Bandeirante Current Consolidated Noncurrent 9/30/2009 6/30/2009 9/30/2009 6/30/2009 BSPS - Reserves to amortize 21,003 21,003 58,501 59,859 Assistance Programs 6,705 6,724 Escelsa Retirement Incentive Aid - AIA 2,875 2,890 Health Care and Life Insurance 3,835 3,835 40,524 40,525 31,543 31, , , Bandeirante The company is one of the sponsor of FUNDACÃO CESP, a not for profit, multi-sponsored, closed private pension plan entity responsible for managing a group of pension plans on behalf of the company s employees and ex-employees through the Complementary Benefits Plan BSPS and the Mixed Benefits Plan with 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 The corresponding deficit corresponding to the portion of benefits exceeding the plan s assets is being settled in 240 months as 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 to plan members registered as at March 31, 1998 in a defined amount proportional to accumulated years of service up to the said date conditional upon compliance with the regulations. The company bears total responsibility for covering actuarial shortfalls. (ii) Mixed Benefit Plan BD and CD 42

43 BD Plan Effective after March 31, 1998 Defined Benefit Plan that grants a lifetime income convertible into a pension. The company and plan members bear equal responsibility for covering the actuarial shortfalls. CD Plan Implemented in conjunction with the BD 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 Company. Only after the act of granting of the lifetime income, convertible or not into a pension, does the pension plan become a defined benefit one, subjecting the company to actuarial responsibility. The actuarial appraisal shows as at December 31, 2008 that in the case of the defined benefits plan the present value of the actuarial liabilities net of the fair value of the assets and of unrecognized actuarial losses, shows a deficit as indicated below: Present value of defined benefit obligation (422,199) Assets at fair value 312,153 (110,046) Unrecognized actuarial loss 25,365 Defined benefit liability (84,681) As sponsor, Bandeirante contributed R$4,501 (R$4,369 on June 30, 2009) in the quarter to settle installments of the adjusted reserves agreement related to the Settled Complementary Proportional Benefits Plan (BSPS) as well as the monthly funding of current plans Escelsa The Company has the following liabilities with post-employment benefits: (i) Sponsorship of the complementary retirement and pension plans; (ii) Other post employment benefits made up of healthcare plan, life insurance and Retirement Incentive Aid AIA Retirement plans The company is the sponsor of EnerPrev - Previdência Complementar of Grupo EDP Energias do Brasil, a closed, not for profit private pension plan entity responsible for managing a group of pension plans on behalf of the employees and former employees, through three benefit plans, as follows: (a) Benefit Plan I of the Defined Benefit type; (b) Benefit Plan II of the Defined Contribution type, convertible into the defined benefit type on conversion to lifetime income; The actuarial appraisal performed as of December 31, 2008 showed that for these pension plans, the fair value of the assets exceeded the present value of the actuarial liabilities as indicated below: Present value of defined benefit obligation (120,453) Assets at fair value 187,553 67,100 Unrecognized actuarial loss 16,109 Defined benefit assets 83,209 The surplus presented in the defined benefit pension plans reduces the risk of an eventual actuarial liability for the Company. The company s management has not recorded this asset due to the uncertainty of an effective reduction in the Sponsor s contributions or of future reimbursement. 43

44 Plan I DB and Plan II DC The amount of R$94 was debited from income in the quarter for the funding of these Plans. In its function as sponsor, Escelsa makes a monthly payment proportional to EnerPrev members contributions as established in each benefits plan. During the quarter, Escelsa contributed R$736 (R$766 in 2008) Other post employment benefits According to the same actuarial appraisal mentioned in Note , the following obligations with other post-employment benefits were assessed: Medical Healthcare and Life Insurance Coverage for medical and dental care, medications, life insurance, and in proven cases, existence of dependents with special needs, corresponding to 50% of the Company s minimum salary; 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 payment of a benefit, the amount of which was calculated considering for each employee, the proportionality 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, The actuarial appraisal of December 31, 2008, showed that in the healthcare, life insurance and retirement incentive aid (AIA) plans, the present value of the actuarial liabilities, net of unrecognized loss, amounts to R$2,875, recorded in Current and Noncurrent Liabilities with the following breakdown: 9/30/2009 6/30/2009 Present value of defined benefit obligation (57,410) (57,410) Unrecognized actuarial loss 10,176 10,160 Total (47,234) (47,250) Current 3,835 3,835 Noncurrent 43,399 43, Energest The Company is the sponsor of the Retirement Plans managed by EnerPrev, responsible for managing the pension plans on behalf of the employees and former employees, through two benefit plans: Benefit Plan I of the defined benefit type and Benefit Plan II of the defined contribution type, convertible into the defined benefit type on conversion to lifetime income. The actuarial appraisal realized as at December 31, 2008 showed that ithe fair value of the assets exceeded the present value of the actuarial liabilities as indicated below: Present value of defined benefit obligation (241) Assets at fair value Unrecognized actuarial loss 99 Defined benefit assets 227 The surplus in the defined benefit pension plans reduces the risk of an eventual actuarial liability for the Company. The company s management has not recorded this asset due to the uncertainty of an effective reduction in the Sponsor s contributions or of future reimbursement. 44

45 In its function as sponsor, Energest makes a monthly payment proportional to EnerPrev members contributions as established in each benefits plan. During the quarter, Energest contributed R$239 (R$65 in 2008) EnerPrev - Pension plans of the defined contribution type EnerPrev was created to manage the supplementary pension plans of Grupo Energias do Brasil in a centralized manner. EnerPrev manages its own plan and a private plan through Bradesco Vida e Previdência S.A. consisting of benefits of the Defined Contribution type, not generating any actuarial responsibility on the part of the Sponsors. In the capacity of sponsors of this type of plan, the Companies from Grupo Energias do Brasil contributed in the quarter the sum of R$785 in the year (R$269 in 2008) Estimated personnel liabilities Parent Company Consolidated 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Payroll 3,360 3,312 42,383 35,479 PIS / COFINS 58 IR / CSLL 36 INSS and FGTS ,259 7,249 Total 3,868 3,785 50,736 42,728 The payroll item includes basically a provision for vacation, 13th salary, and its respective social charges, as well as the provision for profit sharing for the period Regulatory and sector charges Accounts payable related to charges established in the electricity sector legislation are as follow: Current Noncurrent 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Global reversal reserve quota - RGR 3,200 3,106 Fuel consumption account - CCC 17,455 10,485 Energy development account - CDE 16,442 16,442 Financial compensation for the use of w ater resources 2,475 4,764 Tariff charges (ECE/ EAEEE) 32,112 32,320 Research and Development 34,711 32,140 13,604 10,348 Energy efficiency program 51,653 51,876 3,005 8,096 Use of public asset - UBP - Granting rights 1,471 1,471 Inspection fee - ANEEL Total 160, ,557 16,609 18, Use of Public Asset - UBP - Granting Rights The subsidiaries Enerpeixe and Investco, as retribution for the grant conceded thereto for exploration of the hydroelectric potentials of the Peixe Angical and Lajeado plants, respectively, will generate for the Federal Government over the lifetime of the concession contracts and while they are exploring them, monthly installments equivalent to one twelfth (1/12) of the annual sum defined in the concession contracts, restated annually with a basis on the annual variation of IGP-M calculated by Fundação Getúlio Vargas (or another index that takes its place) in the months of October for Enerpeixe and December for Investco. The obligation is recognized monthly, having Other operating expenses and Financial expenses as contra entries. 45

46 The contractual commitments are as follows: Consolidated Nominal value current until Present value 9/30/2009 6/30/2009 9/30/2009 6/30/2009 UHE Lajeado 70,396 71,360 38,390 38,739 UHE Peixe Angical 373, , , , , , , ,597 The calculation of the present value was performed considering the discount rate of 10% per annum, compatible with the estimated long-term rate, not being related to the expectation of return of the project and projection of IGP-M. These commitments restated up to September 30, 2009, are distributed as follows: Consolidated Nominal value Present value ,441 4, ,360 19, ,551 14, ,551 13, ,551 12,988 after , , , ,532 Investco and Enerpeixe paid the Granting Power the sums of R$964 and R$3,449, respectively, in the year, with R$2,038 of principal and R$2,375 of restatement, recorded in net income for the period Provisions for contingencies and deposits related to lawsuits current and non-current The Company and its subsidiaries are parties to legal actions and administrative proceedings in several courts and with government bodies arising from the normal course of operations, involving tax, labor, civil and other issues. Based on information from its legal advisors and the analysis of pending lawsuits, managements of the Company and its subsidiaries have constituted provisions considered sufficient to cover losses estimated as probable for ongoing legal actions as follows: Balance on Liabilities Parent Company Balance on Assets Judicial deposit (Note 12) 6/30/2009 Additions 9/30/2009 9/30/2009 6/30/2009 Labor 2,566 2,478 Civil 12,283 12,283 Tax 67,248 1,145 68,393 4,724 4,724 Total 67,248 13,428 80,676 7,290 7,202 Current 2,168 2,080 Noncurrent 67,248 80,676 5,122 5,122 Total 67,248 80,676 7,290 7,202 46

47 Liabilities Consolidated Balance on Write-offs Balance on Judicial deposit (note 12) 6/30/2009 Additions Payments Reversal 9/30/2009 9/30/2009 6/30/2009 Labor 43,409 7,321 (3,770) (1,467) 45,493 40,713 40,497 Civil 61,227 13,529 (376) (1,694) 72,686 16,202 15,801 Tax 171,471 2,513 (1) (164) 173,819 90,198 89,978 Total 276,107 23,363 (4,147) (3,325) 291, , ,276 Assets Current 4,262 3,780 2,168 2,080 Noncurrent 271, , , ,196 Total 276, , , , Labor Bandeirante Law suits filed corresponding to the periods after January 1, 1998 as per the agreement for the partial spinoff of Eletropaulo - Eletricidade de São Paulo S.A. Subsequently, pursuant to the Partial Spin-off Agreement of Bandeirante on October 1, 2001, each concessionaire (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 suits will be taken on according to the percentage proportion of the controllers (Bandeirante and Piratininga) as determined in the respective spin-off agreement. Several suits question among other matters, overtime payments, hazardous work claims and reinstatement premiums. The balance provided for on September 30, 2009 amounts to R$18,137 (R$16,609 on June 30, 2009) Escelsa, Energest, Cesa, EDP Lajeado, and Escelsapar Several lawsuits questioning, among other issues, overtime payments, hazardous work and reinstatement premiums. The balance provided for at September 30, 2009 is R$27,356 (R$26,800 on June 30, 2009) Civil Bandeirante 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 of February 27, 1986 and 45 of March 4, the Cruzado Plan, in force from March to November of that year. Original values are restated based on the system practiced by the Judiciary. The balance provided for on September 30, 2009 amounts to R$40,413 (R$41,319 on June 30, 2009). Also include claims for moral and material damages Enertrade Lawsuit filed by Enertrade, questioning the constitutionality of payments relating to the Energy Development Account CDE. The balance provided for at September 30, 2009 is R$3,589 (R$3,589 on June 30, 2009) Fiscal Bandeirante (i) COFINS - The Company is judicially challenging changes in the legislation relating to COFINS, the result of the enactment of Law 9,718 of November 27, On July 1, 1999, the Company obtained a preliminary injunction permitting payment of this tax up to December 1999 according to the previous legislation, that is, 2% on the billings, retroactive to February 1, The balance provided for relates to the additional 1% on September 30, 2009 amounting to R$57,695 (R$57,187 on June 30, 2009). The Company holds R$17,079 47

48 on September 30, 2009 (R$16,893 on June 30, 2009) as judicial deposit in escrow account as a provision for this lawsuit. (ii) Challenge of the nondeductibility of the Social Contribution tax on net income for determining the amount of income tax payable for fiscal years 2001 and The provision on September 30, 2009 is R$9,112 (R$9,012 on June 30, 2009). For this lawsuit, the Company holds a judicial deposit equivalent to the respective provision Escelsa (i) Notices issued by the INSS requiring payment of contributions related to continuous service providers considered to be on the same footing as normal employees with labor contracts. The balance provided for at September 30, 2009 is R$12,258 (R$12,048 on June 30, 2009). (ii) The Company is judicially challenging the constitutionality of the application of Work Accidents Insurance SAT. The balance provided for at September 30, 2009 is R$9,226 (R$9,090 on June 30, 2009). (iii) Notice of tax assessment requiring payment of the difference of Social Contribution on Net Income (CSLL). the alleging being that the company did not include in its calculation base as taxable net income reported for fiscal year 1995 and the months of January to April 1996, expenses related to depreciation, amortization or cost of assets written off, corresponding to the difference, in 1990, between the Consumer Price Index - IPC and the National Treasury Bond BTNF. The balance provided for at September 30, 2009 is R$8,901(R$8,770 on June 30, 2009) EDP - Energias do Brasil The Company judicially questioned the levying of PIS and COFINS on income from interest on shareholders equity JCP for fiscal years 2005, 2006, 2007 and 2008, obtaining a preliminary injunction suspending its payment. The balance provided for on September 30, 2009, monetarily restated, is R$68,393 (R$67,248 on June 30, 2009) Risk of possible loss Additionally, there are ongoing labor, civil and tax proceedings, the loss of which has been deemed as possible. These items are periodically reassessed, not requiring constitution of provisions in the financial statements and are as follow: Consolidated 9/30/2009 6/30/2009 Labor 45,949 46,522 Civil 108, ,922 Tax 110, ,440 Total 264, ,884 Among the main claims where losses are deemed as possible, the highlights are as follow: Bandeirante Among the main claims where losses are deemed as possible, the highlight is the discussion in the administrative sphere regarding ICMS credits utilized by the company in the period from July 2003 to December 2003, referring to amounts of "Annulment/Return of Sale of Electric Energy" in the amount of R$58,170. The Company has presented defense and is awaiting judgment Escelsa Income tax The Internal Revenue Service is claiming payment of income tax on net income between December 1995 and April 1996 through Tax Assessment Notice FM This questions the correctness of the Company s procedure in deducing from its taxable base charges for depreciation, amortization or costs of goods written off relative to the value of the difference in 1990 between the IPC and the BTNF. The amount at risk in this case, on September 30,2009, is estimated at R$21,246 (R$21,142 June 30, 2009); 48

49 INSS Following an INSS inspection, notices were issued for collecting social security tax with respect to the exclusion self-employed and or other corporate entities with the argument that there exists an employment relationship between service providers and Escelsa. These notices total R$14,212 on September 30,2009 (R$14,142 on June 30, 2009); Municipal taxes various municipalities Law suit claiming ISSQN for the period from January 1991 to August 1995, allegedly on services involving the issue of a second counterpart of billings, warning notices, among others. Also includes payment demand on land occupied by posts for the electricity network and public lighting. These proceedings amount to R$7,889 on September 30,2009 (R$7,870 on June 30, 2009); and Civil - Tariff raise- Ordinary lawsuit proceeding nº , relating to the escalation of electricity tariff, authorized by DNAEE Rulings nºs 38 and 45 of February 27 and March 4, These proceedings amount to R$10,636 (R$11,210 on June 30, 2009) Investco The lawsuits of a civil nature refer largely 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, in the amount of R$68,311 on September 30,2009 (R$70,742 on June 30, 2009) Shareholders equity Capital The composition of the capital as of September 30, 2009, June 30, 2009 and September 30, 2008, is shown as follows: 9/30/2009 6/30/2009 9/30/2008 Amount % Amount % Amount % Controlling Shareholders of shares interest of shares interest of shares interest Shareholder Energias de Portugal Investments and Services, Sociedad Limitada (1) (2) 38,234, ,234, ,234, yes Balwerk - Consult. Econômica e Particip., Soc.Unipessoal Ltda. (1) (2) 24,928, ,928, ,545, yes EDP - Energias de Portugal, S.A. (1) (2) 39,739, ,739, ,739, yes Herald Securities INC. (2) 1,383, yes Treasury shares (3) 15,780, ,780, ,211, Others (4) 40,122, ,122, ,903, Total 158,805, ,805, ,016, (1) Shareholder with more than 5% of the voting shares. (2) Foreign-owned company. (3) On December 18, 2007 the Board of Directors approved, for a period of 365 days, the purchase of 6,211,426 shares of the Company to be held in treasury with subsequent sale and/or cancellation without reduction of the capital. In a meeting held on April 15, 2008, the Board of Directors approved the finalization of the program for acquisition of shares issued by the actual Company on this date, which resulted in the repurchase of the total 6,211,378 common shares, equivalent to 99.99% of the ceiling permitted for aforesaid acquisition, at the cost of R$156,244, which remained in treasury up to their cancellation, together with the 22 common shares in treasury prior to the start of aforesaid program, decided on at a Meeting of the Board of Directors held on October 3, According to CVM Instruction nº 10/80, altered by CVM Instruction CVM nº 268/97, the free float on April 15, 2008, closing date of the Program, was 62,114,489 common shares, i.e., only shares held by the controlling shareholder were deducted from the total amount of shares issued by the Company. In line with the concept of Outstanding Shares defined by the Listing Regulation of the New Market of Bovespa, it was informed that the quantity of outstanding shares on April 15, 2008, under this concept, was 49

50 55,903,053 common shares, with the deduction from the total quantity of shares issued by the Company of those held by the controlling shareholder, managers and those held in treasury. (4)On October 3, 2008 the Board of Directors approved, for a period of 365 days, the purchase of 5,590,306 shares of the Company to be held in treasury with subsequent sale and/or cancellation without reduction of the capital stock, having acquired up to March 31, 2009, a total of 2,670,000 shares, at a total cost of R$60,164. (5) The term for exercising the right to withdrawal of shareholders of the Company, ended on October 13, 2008, with the exercise of the respective right, the Company acquired 13,110,225 shares, corresponding to the sum of R$312,286, the financial settlement of which occurred on October 27, 2008, held in treasury up to this date. Description Treasury share acquired (per unit) Net value paid for shares Unit cost per share (in reais) Minimum Maximum Average Market value as of 9/30/2009 (*) 2nd program 2,670,000 60, ,964 Right to withdrawal 13,110, , ,819 15,780, , ,783 (*) Unit price R$29.20 per share, by closing price on September 30th, Treasury stock does not have equity rights. (6) There are 40,122,847 Free Float outstanding shares out of the total 158,805,204 shares issued, that is, around 25.26% of the total quantity of shares. There are 17 shares in the possession of the Board of Directors. The Fiscal Council has not been formed since the Initial Public Offer of July 13, Calculation of free float: 9/30/2009 6/30/2009 9/30/2008 Amount % Amount % Amount % of shares interest of shares interest of shares interest Amount of shares - controlling shareholders 102,902, ,902, ,902, Amount of shares - treasury shares 15,780, ,780, ,211, Amount of shares - board members and officers Total non-outstanding shares 118,682, ,682, ,113,542 Total shares 158,805, ,805, ,016,604 Total outstanding shares 40,122, ,122, ,903, Profit allocation The Company's dividend policy, pursuant to the 120th meeting of the Board of Directors held on March 5, 2008, establishes the payment of a minimum amount equivalent to fifty percent (50%) of the adjusted net income, calculated in conformity with articles 189 and following articles of Corporation Law, which can be reduced when thus required by a legal or regulatory provision or, when recommendable in view of the financial situation and/or future prospects of the Company. The amount of interest on shareholders equity paid or credited, individually to the shareholders as remuneration on capital may be imputed as part of the total dividend payments for the year for all legal purposes and pursuant to the terms of Law 9249 of December 26, 1995 and subsequent regulations. On December 23, 2008, the Board of Directors of the Company approved the credit of interest on shareholders' equity, in the gross amount of R$103,061, attributable to the dividends to be distributed by the Company on a payment date to be decided on, which were recorded in financial expenses, as required by tax legislation. For the purposes of these financial statements, this interest was reclassified to shareholders' equity pursuant to CVM Resolution 207/96. On April 8, 2009, the Ordinary General Meeting of shareholders approved the allocation of net income and the distribution of dividends referring to the year 2008, which were paid on June 5,

51 Reserves Reserve for profit retention has been constituted pursuant to Article 196 of Law 6404/76 in support of the Company s Capital Expenditures Program as set forth in the capital budgets submitted to the Ordinary General Shareholders Meetings Dividends assets and liabilities Parent Company Consolidated Assets Liabilities Liabilities 9/30/2009 6/30/2009 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Bandeirante Escelsa 106, ,644 Energest 45,019 45,019 EDP Lajeado 9,701 9,701 Investco 4,336 4,336 26,236 26,236 Lajeado 11,440 27,498 Shareholder's - EDP Energias 1,311 2,626 1,311 2,626 Eletrobrás 34,606 44,607 Silea Participações Ltda. 539 Total 177, ,198 1,311 2,626 62,153 74,008 51

52 26 - Net operating revenue Consolidated nine-month period ended Numbers of consumers (*) MWh (*) R$ 9/30/2009 9/30/2008 9/30/2009 9/30/2008 9/30/2009 9/30/2008 Electricity supply Residential 2,235,918 2,194,431 3,509,114 3,285,848 1,406,107 1,506,904 Industrial 20,705 19,906 2,838,865 3,087, ,197 1,002,114 Commerce, services and other activities 188, ,909 2,056,505 1,963, , ,598 Rural 153, , , ,328 89, ,395 Public 16,960 16, , , , ,770 Public lighting 1,864 1, , ,001 82, ,730 Public service 2,247 1, , ,376 82,886 94,472 Ow n consumption ,240 9,589 Total billed supply 2,620,765 2,564,050 9,922,525 9,849,346 3,466,678 3,910,983 (-) Extraordinary tariff adjustment (net of ICMS) Residential 129 Industrial 369 Commerce, services and other activities 215 Rural 18 Public pow er 5 Public lighting 6 Public service 30 Ow n consumption 1,160 1,932 (-) ICMS Residential (317,695) (321,832) Industrial (176,328) (197,208) Commerce, services and other activities (161,147) (177,700) Rural (3,557) (13,099) Public pow er (19,977) (26,375) Public lighting (17,254) (20,608) Public service (17,855) (19,471) (713,813) (776,293) Total billed supply net of RTE and ICMS 2,752,865 3,136,622 Unbilled supply 23,544 28,587 Unbilled supply - tariff deferral Energy supply to free clients 308, ,982 (-) ICMS regarding energy supply to free clients (50,366) (70,420) Tariff return (48,189) Pis and Cofins from generators 7,569 Other regulatory revenues (16,815) (16,961) Loss (gain) of revenue - low income 16,853 45,498 Tariff adjustment Electricity supply , ,160 32,212 24,631 Trading supply 317, ,076 Other supply 1, , ,045 ECE and EAEEE (14) (112) (-) ICMS on ECE and EAEEE 3 (4) 3,708,534 3,825,513 Transfer to use tariff of distribution and transmission system - captive costumers (1,918,090) (2,268,563) (-) ICMS on transfer to use tariff of distribution and transmission system - captive costumers 399, ,988 Total billed energy supply 2,189,888 1,986,938 Distribution and transmission system availability Use tariff of distribution and transmission ,273,359 6,647, , ,280 (-) ICMS on use tariff of distribution and transmission system - others (123,252) (100,757) Use tariff of distribution and transmission 1,918,090 2,268,563 (-) ICMS on use tariff of distribution and transmission (399,444) (429,988) Connection charge 55 1,935,600 2,247,153 Other operating revenues Short-term energy 28, ,744 Charged services and other 89,650 40, , ,468 4,243,801 4,380,559 (-) Deduction from revenue Efficiency energy and Research and development programs (30,982) (36,312) CCC quota (142,406) (125,722) CDE quota (126,253) (154,171) RGR (31,852) (33,421) PIS/COFINS (495,578) (538,337) ICMS (530) (403) ECE and EAEEE - transfer to CBEE 2 2 ISS (266) (308) (827,865) (888,672) Total 2,620,876 2,564,155 15,534,643 16,803,863 3,415,936 3,491,887 * Not review ed by independent auditors 52

53 27 - Operating expenses Parent Company 9 month-period ended 9/30/2009 9/30/2008 Operanting Expenses G&A Other Total Total Manageable Personnel, Management and Private pension entities 16,493 16,493 10,994 Material Third-party services 18,580 18,580 14,831 Depreciation and amortization 15,372 15, ,413 Provision for contingencies 12,283 12,283 Rent and leasing 1,880 1,880 1,810 Other 7,839 7,839 3,338 60,479 12,283 72, ,758 Total 60,479 12,283 72, ,758 Service Cost Consolidated 9 month-period ended 9/30/2009 Operanting Expenses 9/30/2008 With Rendered Electricity Operating to 3rd-party Selling G&A Others Total Total Non manageable Reclassified Electricity purchased for resale Itaipu 354, , ,613 Auction 510, , ,568 PROINFA 72,029 72,029 42,883 Short-term energy - CCEE 59,046 59, ,409 Other suppliers 593, , ,483 Net effect of CVA (14,900) (14,900) 144,448 Electricity network utilization charges Use and connection charge 376, , ,383 System service charge 17,067 17,067 76,877 Net effect of CVA 33,250 33,250 (67,522) Energy efficiency program PIS/Cofins (216,318) (216,318) (218,238) Inspection fee 9,011 9,011 10,678 Granting rights 6,114 6,114 5,229 Financial compensations 20,327 20,327 13,936 1,785,497 35,724 1,821,221 1,809,026 Manageable Personnel, Management and Private pension entities 108, , , ,998 Material 14,206 2,048 2,482 18,736 27,696 Third-party services 112,853 1, , , ,011 Depreciation and amortization 183,542 35, , ,679 Provision for doubtful accounts/net losses 55,988 55,988 52,071 Provision for contingencies 21,563 21,563 18,276 Rent and leasing 864 5,855 6,719 15,620 PIS/Cofins (4,802) Other 19, ,051 21,878 3,742 47,247 42, ,041 4,504 58, ,858 25, , ,134 Total 1,785, ,041 4,504 58, ,858 61,029 2,586,077 2,805,160 53

54 28 - Financial result nine-month period ended Parent Company Consolidated 9/30/2009 9/30/2008 9/30/2009 9/30/2008 Financial income Revenue from financial investments 2,334 4,012 20,931 48,800 PIS and COFINS on financial revenues (26) Monetary variation and moratory addition from sold energy 56,027 74,131 Monetary restatements from regulatory assets 7,277 16,538 Monetary variations - domestic currency 959 1,051 Monetary variations - foreign currency 299 SELIC on taxes and social contributions to offset 2,259 9,000 SELIC on COFINS (base broadening) 3,994 3,512 4,527 6,767 Present value adjustment 715 2,295 Other financial revenues 84,663 11,949 88,674 14,551 90,991 19, , ,432 Financial expense Monetary variation and moratory addition from purchased energy (130) Interest expense on debt (25,363) (484) (206,287) (227,928) Monetary variations - domestic currency (1,496) (7,234) Monetary variations - foreign currency (1) (2) 12,383 (5,300) Interest expense on tax contingence provision (3,997) (7,267) (7,895) (12,795) Swap and hedge operations (24) (28,100) (8,667) Monetary restatements of regulatory liabilities (347) (4,777) CPMF (82) (1,014) Make to market 900 3,019 Other financial expenses (53) (68) (24,703) (27,418) (29,414) (7,927) (255,545) (292,244) Total 61,577 11,546 (74,202) (118,812) 29 - Income and social contribution taxes Parent Company nine-month period ended Income tax Social contribution Income before income tax and social contribution 448, , , ,135 Rate 25% 25% 9% 9% Income tax and social contribution (112,205) (72,034) (40,394) (25,932) Adjustments according effective rate Permanent addition and exclusion in income tax and social contribution Donation (16) (44) (5) (16) Undeductible losses Undeductible fines (1) Undeductible expenses (24) (53) (9) (19) Bonus to management (568) 172 (205) 62 Equity accounting 104, ,576 37,563 40,527 Others Others Unrecognized income tax and social contribution deferred 8,458 (41,016) 3,050 (14,766) Prior social year adjustment - Income tax and social contribution (60) (22) Tax incentive 18 Income tax and social contribution expenses (59) (22) 54

55 Consolidated nine-month period ended Income tax Social contribution 9/30/2009 9/30/2008 9/30/2009 9/30/2008 Income before income tax and social contribution 784, , , ,325 Rate 25% 25% 9% 9% Income tax and social contribution (196,048) (139,831) (70,577) (50,339) Adjustments according effective rate Permanent addition and exclusion in income tax and social contribution Donation (564) (942) (202) (340) Undeductible losses (287) (804) (104) (290) Undeductible fines (19) (21) (6) (7) Undeductible expenses 16 (97) 5 (35) Bonus to management (484) (155) (175) (56) Founder shares 2, Other (1,088) 650 (415) 235 Other Unrecognized income tax and social contribution deferred 4,758 (43,186) 1,718 (15,406) Prior social year adjustment - Income tax and social contribution (11) 7,055 (4) 2,538 Presumed taxable income adjustment 7,132 5,670 2,567 2,049 Tax incentive 18,991 25,541 Income tax and social contribution expenses (165,279) (146,120) (66,430) (61,651) 30 - Insurance coverage The Company and its subsidiaries hold insurance contracts with coverage by the management to be determined by specialist guidance, bearing in mind the nature and level of risk, for amounts deemed sufficient to cover eventual significant losses on their assets and liabilities. Given their characteristics, the risk assumptions adopted are not within the scope of a review of quarterly information and consequently have not to be reviewed by our independent auditors. The mains amounts at risk with insurance coverage are: Consolidated 9/30/2009 Substations 662,718 Power Plants 867,511 Stockrooms 32,029 Buildings and contents (own) 25,466 Buildings and contents (third party) 26,122 Civil liability 25,059 Transports (materials) 5,000 Transportation (vehicles) 3,000 Personal accident insurance 144, Financial instruments In compliance with CVM Resolution nº 566, of December 17, 2008, and CVM Instruction nº 475, of December 17, 2008, the Company and its subsidiaries performed a valuation of their financial instruments, including the derivatives General considerations The Company and its subsidiaries maintain operations with financial instruments. The administration of these instruments is executed by means of operating strategies and internal controls aiming to ensure liquidity, safety and profitability. The contracting of financial instruments with hedge objectives is performed by means of a periodic analysis of the exposure to the financial risks (foreign exchange, interest rate etc.), which is reported regularly through risk reports made available to Management. In compliance with the Financial Risk Management Policy of Grupo Energias do Brasil, and with a basis on periodic analyses 55

56 consubstantiated by the risk reports, specific strategies are defined for the mitigation of financial risks, which are approved by the corporate bodies of the company, for approval and effective operation of aforesaid strategy. The control policy consists of permanent monitoring of the conditions contracted versus conditions in force in the market through operating systems integrated to the SAP platform. The Company and its subsidiaries do not perform 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 Company Management. The administration of the risks associated with these operations is performed through the application of policies and strategies defined by Management and include the monitoring of levels of exposure of each market risk, forecast of future cash flows and establishment of limits of exposure. This policy 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. Management believes that with a basis on statistical risk analysis tools and on the characteristics of mapped exposures and of the instruments contracted for mitigation of risks, on September 30, 2009, 2009, the results of derivative operations will be substantially offset by corresponding variations in the hedged item. In this manner, Management understands that the contracted derivative instrument operations do not expose the Company and its subsidiaries to significant risks that might generate material losses originating from exchange variance, interest or any other forms of variation Operating risks Credit risk The financial instrument capable of exposing mainly the subsidiaries Bandeirante and Escelsa to the credit risk, is represented by accounts receivable from consumers that, however, is attenuated by the sale to a spread out customer base and by the possibility of a cut in the supply of electricity of the consumers at default. Additionally, the actions promoted by some companies in the sector with respect to the interpretation of the market rules prevailing from June 2001 to February 2002 during the period the electricity rationing program with respect to the receivables generated from the sale, purchase of energy and system service charges executed through the Electric Energy Trading Chamber (CCEE) are still sub judice and therefore subject to change Risk of accelerated maturity The Company and certain subsidiaries have, as described in notes 18 and 19, debentures, and loan and financing agreements with restrictive clauses that in general, require the maintenance of economic/financial indexes at given levels (financial covenants) and of other conditions. Non-compliance with these restrictions may imply accelerated maturity of the debts Risk of electric power shortage The Brazilian energy matrix is predominantly hydric and a prolonged drought would reduce the volume of water in the reservoirs of the hydroelectric plants, which could cause reduction of revenues due to unavailability of electric energy, an increase in the purchase cost of energy in the short term market and the increase of System Charges as a result of the dispatch of the thermoelectric plants. In an extreme situation, like the one that occurred in Brazil in the year 2001, a rationing program could be adopted that would imply reduction of Market value of the financial instruments The main financial instruments are described below: Funds available, financial investments, accounts receivable, accounts payable and pledges and restricted deposits - these are presented at their book value that is equivalent to their market value. Regulatory assets and liabilities - these are presented at their amortizable cost that is equivalent to their recoverable value. 56

57 Loans and financing in national currency with BNDES and ELETROBRAS - these are classified as financial liabilities not measured at market value, are recorded at the amortized cost, and correspond to loans with specific purposes for financing of investments in electric energy distribution and generation, indexed at TJLP - Long-term Interest Rate and prefixed rates. Loans and financing in national currency at Banco do Brasil, Santander, Banco da Amazônia and Bradesco - these are classified as financial liabilities and are recorded at amortized cost. The market value is determined calculating the future flows of the operation based on the contract pre-fixed rate and bringing these flows to present value, using the future DI rate of BM&F. Loans and financing in foreign currency with BID - these are classified as financial liabilities and are initially measured, on the transaction date, by the exchange rate of the functional currency and translated at closing rate in the balance sheet, and the exchange impacts are recorded in financial income and expenses. Debentures in national currency - these are recorded at the amortized cost and are classified as financial liabilities not measured at market value, as they are debt issues in the capital market with definition in the debenture deed in a specific clause of Accelerated Maturity which if the event occurs, will be performed at their unamortized unit par value, plus remuneration due up to the date of the effective payment calculated pro rata. Derivative financial instruments - these are operations aimed to provide protection against exchange variations in borrowings performed in foreign currency on a non-speculative basis and recorded at market value (fair value hedge). The market value is determined calculating the future flows (assets and liabilities) of the operation through the currency curves of BM&F and contractual rates, and bringing these flows to present value, using the future DI rate of BM&F. Parent company Fair value Accounting value 9/30/2009 6/30/2009 9/30/2009 6/30/2009 Cash e cash equivalents 22, ,104 22, ,104 Loans, financing in local currency - Bradesco 256, , , ,476 Consolidated Fair value Accounting value 09/30/ /30/ /30/ /30/2009 Loans, financing in local currency - BNDES e ELETROBRÁS 1,088,604 1,238,799 1,198,678 1,395,492 Loans, financing in local currency - Banco do Brasil, Santader, Bradesco, Citibank e Safra 594, , , ,163 Debentures in local currency 721, , , ,460 Commercial paper in loca currency 239, , , ,587 Loans, financing in foreign currency 170, , , ,361 Financial instruments derivatives - Assets em US$ 745, , , ,371 - Assets em EUR 44,190 36,232 44,190 36,232 - Liability em US$ 832, , , ,583 - Liability em EUR 44,246 36,727 44,246 36, Sensitivity analyses Scenarios of rates and foreign currencies were considered in the tables below, with the respective impacts on the results of the Company and its subsidiaries, with the applicable exposures of oscillations in the exchange rate of foreign currencies, of interest rates and other indexes, up to the due dates of these transactions. The probable scenario was determined based on the business plan of the Company and its subsidiaries approved by Management, in which the adopted assumptions took into consideration the macroeconomic assumptions obtained from the Focus report of the Central Bank, and also consider the outstanding balances on September 30, Scenarios II and III represent 25% and 50% of deterioration, respectively, and scenarios IV and V with 25% and 50% of appreciation, respectively. Sensitivity analyses presented below refers to the balances of operations with financial instruments at the balance sheet date. 57

58 Parent company 9/30/2009 Financial instruments Risk Probable Scenario II Scenario III Scenario IV Scenario V Financial assets Financial investments CDI 1,315 1,626 1, Financial liability Bank credit paper CDI 15,740 19,512 23,224 11,906 9,964 Reference for financial assets Rate increase by 25% 50% 25% 50% CDI % 9.80% 12.25% 14.70% 7.35% 4.90% Reference for financial liability Rate increase by 25% 50% 25% 50% CDI % 9.80% 12.25% 14.70% 7.35% 4.90% Financial assets Consolidated 9/30/2009 Financial instruments Risk Probable Scenario II Scenario III Scenario IV Scenario V Financial investments CDI 16,128 19,953 23,702 12,224 8,238 Related Securities CDI 7,172 8,872 10,540 5,436 3,663 Financial liability Bank credit paper CDI 56,067 69,659 83,094 42,310 35,369 Debentures CDI 129, , ,056 97,594 65,448 Debentures IGP-M 3,372 4,214 6,316 2,530 1,687 Promissory Notes in Local Currency CDI 17,326 21,079 24,807 13,546 11,645 BNDES TJLP 201, , , , ,050 BID USD 2,134 2,667 3,200 1,600 1,067 Derivatives Swap - Liability Leg - BID CDI 7,547 9,334 11,086 5,722 3,857 Swap - Liability Leg - NDF USD (27,589) 67, ,692 (126,153) (231,782) Swap - Liability Leg - NDF EUR (1,059) 2,520 5,839 (4,181) (7,565) Swap - Liability Leg - (i) Libor (11,842) (7,386) (1,253) (14,145) (13,620) Swap - Liability Leg - (ii) Libor (12,727) (7,973) (1,254) (15,037) (14,262) Reference for financial assets rate incresed by 25% 50% 25% 50% CDI % 9.80% 12.25% 14.70% 7.35% 4.90% Reference for financial liability rate incresed by 25% 50% 25% 50% CDI % 9.80% 16.00% 19.20% 7.35% 4.90% TJLP% 6.00% 7.50% 9.00% 4.50% 3.00% IGP-M 3.20% 4.00% 4.80% 2.40% 1.60% US$/R$ LIBOR % % % % % These sensitivity analyses were prepared in accordance with CVM Instruction nº 475/2008, and are intended to measure the impact of changes in the market variables on each financial instrument of Energias do Brasil and of its subsidiaries. Nevertheless, the settlement of transactions involving these estimates can result in amounts different from those estimated due to the subjectivity that is contained in the process used in the preparation of these analyses Derivative financial instruments With the intention of mitigating the exposure of all its debts in foreign currency to the oscillations of the exchange rate and interest rates, some companies from Grupo EDP - Energias do Brasil have hedge operations on September 30, 2009 that are presented in note 19. The book value corresponds to the market value of these operations, which on September 30, 2009, is R$73,621 (R$47,933 on June 30, 2009), whose effects of gain or loss in net income for the nine-month periods are presented in the table from note 28 (financial result), in the swap and hedge operations account. 58

59 The table below presents all the derivative financial instrument operations contracted with financial institutions (note 19), as well as the respective fair values calculated by the Management of the Company and its subsidiaries: Consolidated Nocional USD/EUR Nocional R$/USD Fair value Impacts in Income Description Subsidiary Bank Initial Maturity Position 09/30/09 06/30/09 09/30/09 06/30/09 09/30/09 06/30/09 09/30/09 09/30/08 Swap Asset USD + 4,81% p.a. - - (411) 3,070 Energest S/A Banco Santander S/A 3/14/2008 2/12/ Liabity 111,90% of CDI , (779) 1,876 Asset USD + 4,81% p.a. - - (249) 1,706 Castelo Energética S/A Banco Santander S/A 3/14/2008 2/12/ Liabity 111,90% of CDI (433) 1,043 Asset Libor + 4,00 % p.a. - - (60) 626 Bandeirante Energia S/A Banco Citibank 3/19/2004 2/13/ Liabity 97,94% of CDI , (168) (1,792) Asset Libor + 4,375 % p.a. 11,857 14,478 (3,036) 2,097 Bandeirante Energia S/A Banco Citibank 3/19/2004 2/14/2012 6,485 7,133 18,894 20,782 Liabity 104,69% of CDI 23,412 25,688 2,063 3,985 (11,555) (11,210) (5,099) (1,888) Asset Libor + 4,00 % p.a. - - (22) 250 Bandeirante Energia S/A Banco Citibank 12/14/2004 2/13/ Liabity 118,94% of CDI (66) (692) Asset Libor + 4,375 % p.a. 4,452 5,436 (1,171) 786 Bandeirante Energia S/A Banco Citibank 12/14/2004 2/14/2012 2,432 2,675 6,736 7,409 Liabity 118,94% of CDI 7,985 8, ,453 (3,533) (3,345) (1,952) (667) Asset Libor + 4,00 % p.a. - - (37) 416 Bandeirante Energia S/A Banco JP Morgan 4/5/2006 2/13/ Liabity 106,30% of CDI , (106) (1,064) Asset Libor + 4,375 % p.a. 7,473 9,150 (1,977) 1,310 Bandeirante Energia S/A Banco JP Morgan 4/5/2006 2/14/2012 4,053 4,458 11,693 12,861 Liabity 109,70% of CDI 12,755 14,022 1,177 2,101 (5,282) (4,872) (3,154) (791) Asset Libor + 4,375 % p.a. 5,978 7,320 (1,628) 1,048 Bandeirante Energia S/A Banco JP Morgan 4/5/2006 2/14/2012 3,242 3,567 8,441 9,287 Liabity 109,50% of CDI 9,084 9, ,444 (3,106) (2,679) (2,466) (396) Asset Libor + 4,00 % p.a. - - (29) 333 Bandeirante Energia S/A Banco JP Morgan 4/5/2006 2/13/ Liabity 98,00% of CDI (75) (645) Asset USD Bandeirante Energia S/A Banco JP Morgan 7/28/2004 1/2/ Liabity 71,60% of CDI (1) (87) Asset EURO Bandeirante Energia S/A Banco JP Morgan 7/11/2005 1/2/ Liabity 59,80% of CDI (1) (118) Asset USD - - (6) (18) Bandeirante Energia S/A Banco Citibank 2/11/2005 1/28/ Liabity 79,94% of CDI (13) (403) Asset Var. USD + Libor 159, ,863 Porto do Pecém Banco Citibank 4/2/ /1/ ,240 93, , ,088 Liabity Var. USD + 5,79% p.a. 171, ,757 2,291 (12,727) (12,894) (2,291) - Asset Var. USD + Libor 119, ,917 Porto do Pecém Banco Citibank 4/2/ /1/ ,261 73, , ,719 Liabity Var. USD + 5,82% p.a. 131, ,545 1,726 (11,843) (12,628) (1,726) - Asset 100% Libor 8,859 Porto do Pecém Banco Citibank 11/16/ /16/ , ,576 - Liabity 100% USD + 2,0895% p.a. 11,554 3,658 (2,695) (3,658) - - NDF Purchased USD 427, ,206 Porto do Pecém (i) Banco Citibank 10/17/ /16/ , , , ,355 Sold R$ 463, ,792 4,776 (36,504) 3,414 (4,776) - Purchased EUR 30,844 18,116 Porto do Pecém Banco Citibank 6/30/2009 1/16/ ,649 13,030 17,828 18,298 Sold R$ 29,841 18, ,003 (248) (240) - Purchased EUR 273 Porto do Pecém HSBC 7/1/ /16/ Sold R$ (20) (4) - - Purchased EUR 13,073 Porto do Pecém BTG Pactual 6/30/2009 1/16/2012 4,821-14,259 - Sold R$ 14, (1,040) (192) - - (i) Derivative financial instrument according to hedge accounting, as from April 1, The estimate of the fair value of the derivative financial instruments was prepared with a basis on models of future cash flows discounted to present value, compared to similar transactions contracted on dates near to the closing of the periods, and comparisons with average market parameters of the operations through the interest curves of BM&F Bovespa, using the future DI rate of BM&F Bovespa. 59

60 Maturity of derivative financial instruments as of September 30, 2009: Swap Maturity Net 2010 (3,071) (26,908) after 2012 (21,137) Receivable/(payable) (50,740) During the quarter, certain financial instruments of the subsidiary under joint ownership Porto do Pecém were qualified for cash flow hedge accounting, due to the effectiveness of the hedge. The amounts presented express the proportional amounts at 50% which corresponds to the share used in the proportional consolidation of the investment. The hedge operation qualified for the accounting of coverage is constituted by the purchase of an NDF in the amount of US$327,000,000, maturing on October 1, 2012, whose purpose is to cover the payment of debt in dollars with the BID, which has not been disbursed yet. The changes in the fair value of the derivative hedge instrument designated as cash flow hedge are recognized directly in shareholders' equity in a reserve for unrealized gain/losses as the hedge is considered effective, the corresponding asset or liability has not yet been contracted, and the hedge operations that do not fulfill the previous conditions are recognized in the income statement at fair value. Statement of the classification of derivative financial instruments, designated for hedge accounting: Assets Consolidated Cash Flow Hedge 9/30/2009 6/30/2009 USD 153, ,711 Liabilities R$ 167, ,062 R$ Total (13,330) 1,650 Impacts of the gains and losses of hedge accounting in the quarter: Hedge accounting Net income Consolidated 9/30/2009 6/30/2009 Shareholders equity Net income Shareholders equity Risk of Exchange rate (13,330) (54,306) 4,630 (30,724) 60

61 Exchange rate and interest rate risks A portion of the loans in local currency contracted by Group companies, presented in Note 19, is jointly financed with Eletrobrás and BNDES national agencies. Considering that the market rate (or opportunity cost of capital) is defined by these Agents, taking into account the risk premium compatible with activities in the sector, and lacking other alternatives or different market hypotheses and/or estimate methodologies with respect to group company business and special features of the sector, the market value of this internal loan package comes close to its book value, as do the remaining assets and liabilities evaluated. For financial transactions in foreign currency, the risk derives from the possibility of incurring losses and cash restrictions on account of fluctuations in the exchange rates, increasing the balances of liabilities denominated in foreign currency. The exposure relating to borrowings in foreign currency by some subsidiaries is covered by financial hedge operations, which made it possible to exchange the original risks of the transaction for the cost relating to the variation of the CDI. In addition, the distributor subsidiaries are exposed, in their operating activities, to exchange variance in the purchase of electric energy from Itaipu. The compensation mechanism - CVA protects the distributor subsidiaries against potential losses. Aforesaid operations are recorded on the accrual basis of accounting and according to the conditions of the contracted instrument Subsequent event 32.1 BNDES releases R$700 million of long-term financing of Porto Pecém The BNDES released, on October 14, 2009, R$700 million of the long-term financing of TPP Porto do Pecém I. The amount released will allow for the paying off of the bridge investment in Brazilian reais, and will also cover the disbursements for the implementation of the entrepreneurship in the next 3 months. The financing agreement with BNDES establishes a loan in the amount of R$1.4 billion (in nominal R$, excluding interest during construction), with a total period of 17 years, consisting of 14 years of amortization and grace period for payment of interest and principal up to July The contracted cost is of TJLP % per annum. The interest will be capitalized during the construction phase Secondary public distribution of treasury common shares issued by the Company On October 16, 2009, the Company filed a request for the prior analysis of the registration of a secondary public distribution of treasury shares issued by the Company ("Offer") with the Brazilian Association of Investment Banks ANBID. This request will be processed according to the simplified proceeding provided for CVM Rule no. 471, of August 8, 2008, and the ANBID s Regulation and Best Practices Code on Agreement-Related Activities. The Offer will be made in the non-organized over-the-counter market in Brazil, and it will be subject to approval by the CVM, pursuant to CVM Rule no. 400, of December 29, The offer will include placement efforts in the United States of America, exclusively for qualified institutional investors as defined in Rule 144A of the 1933 Securities Act of the United States of America and further amendments ( Securities Act ), and for investors living in countries except the United States of America and Brazil, pursuant to Regulation S of the Securities Act, which invest in Brazil pursuant to the investment mechanisms set forth by Law 4,131, of September 3, 1962, by the Brazilian Monetary Council Resolution no. 2,689, of January 26, 2000, and CVM Rule no. 325, of January 27, 2000, as amended, according to the law applicable in the country of domicile of each foreign investor. The price for the acquisition of Shares will be set after the completion of the bookbuilding proceeding, pursuant to article 23, paragraphs 1 and 44 of CVM Rule no. 400, based on (i) the quotation of the Shares on the São Paulo Stock, Commodities and Futures Exchange - BM&FBOVESPA; and (ii) the indications of interest, according to the quality of demand (per volume and price), collected during the bookbuilding. The effective value of the Offer will be set according to market conditions at the time of the pricing process. 61

62 The Offer will be subject to the favorable conditions of the local and international capital markets. A notice to the market will be timely disclosed, pursuant to Article 53 of CVM Rule no. 400, containing information on: (i) the other characteristics of the Offer; (ii) the places where the preliminary prospect can be obtained; (iii) the estimated dates and places for the disclosure of the Offer; and (iv) the conditions, the procedure and the bookbuilding period. The Offer will be started after the CVM has issued the due registration periodic tariff revision and 2009 tariff adjustment of subsidiary Bandeirante 2007 periodic tariff revision At a Public Ordinary Meeting of the Board held on October 6, 2009, the ANEEL ratified in a final decision, through Ratification Resolution no. 889 of October 6, 2009, the second periodic tariff revision of subsidiary Bandeirante (period from October 2007 to October 2011), pursuant to the methodology set forth by Normative Resolution 338/2008. The main changes introduced by the ANEEL after the provisory decisions made in 2007 and 2008 are: (i) Reference Company goes down from R$263 million to R$247 million. The ANEEL had disclosed on 07/13/2009, as a result of Public Inquiry no. 047/2009, an amount of R$235 million for the Reference Company. (ii) Component Xe of Factor X, index used to compute the annual tariff adjustments, is increased from 0.74% to 1.01%; (iii) Percentage of Unrecoverable Revenue Losses increased from 0.50% to 0.60% of the gross revenues (taxes included). These changes retroact to October 23, 2007, and the amounts of the Gross and Net Regulatory Remuneration Bases are maintained. All effects computed, the tariff adjustment approved by the ANEEL is -9.79%, replacing the provisory amount of -8.80% established in October Thus, subsidiary Bandeirante recorded, in this quarter, the amount of R$35,194, as debit to the result for the period under Operating Revenue as a counterentry to Current Liabilities under Tariff Refund, referring to the period from October 2007 to September tariff adjustment The Brazilian Electricity Regulatory Agency - ANEEL, at a public meeting of the board held on October 20, 2009, approved the average annual tariff adjustment of 5.46%, to be applied to the tariffs of subsidiary Bandeirante, as of October 23, 2009; of which 3.11% refers to the economic annual tariff adjustment, and 2.35% refers to the applicable financial components, which, computed the effect of the financial items discounted from the base of 4.44%, correspond to an average effect of 1.02% to be perceived by captive consumers. The ANEEL has informed that high and low voltage consumers will have different average adjustment rates, according to the table below: In the process of the annual tariff adjustment provided for in the Concession Agreement, the ANEEL considers the variation in costs companies experiment during the previous 12 months. The calculation formula includes manageable costs, on which the IGP-M adjusted by the Factor X is levied, and non- 62

63 manageable costs, such as energy purchased from generators, Fuel Consumption Account (CCC), Reversal Global Reserve (RGR), inspection rates and transmission charges, in addition to financial adjustments recognized by the ANEEL on the Memorandum Account of the Variation of Items of Installment A (CVA), and other instruments. In the composition of the adjustment, applied in 2009 for subsidiary Bandeirante, the highlights include the purchase of energy, Installment B and financial adjustments, according to the chart below: * Corresponds especially to the balance of the Account of the Variation of Items of Installment A (CVA) and other financial items set forth by the regulation, including the adjustments resulting from the completion of the process of the 2 nd Periodic Tariff Revision of subsidiary Bandeirante, reported on October 6, Summary of the differences between Brazilian GAAP and IFRS The consolidated financial statements have been prepared in accordance with the Brazilian generally accepted accounting practices ( Brazilian GAAP ), which differ in certain significant aspects from the International Financial Reporting Standards ( IFRS ). EDP Energias do Brasil S.A. is a subsidiary of EDP Energias de Portugal S.A. whose financial statements are prepared in accordance with IFRS, as endorsed by the European Union ( EU ). IFRS comprise accounting standards issued by the International Accounting Standards Board ( IASB ) and interpretations issued by the International Financial Reporting Interpretations Committee ( IFRIC ) and their predecessor bodies. The IFRS as endorsed by the EU and applied by the Parent Company differ from IFRS as issued by IASB mainly due to the implementation of IFRIC 12 Service Concession Arrangement (which was endorsed to be applied in fiscal year 2010) and the Fair Value Option as foreseen in IAS 39 Financial Instruments: Recognition and Measurement. The Company in order to apply IFRS on a consistent manner in relation to its Parent Company adopted the IFRS as endorsed by the EU. As already disclosed in Note 2.1.1, due to the adoption of Law nº /07 the consolidated financial statements of the Company and its subsidiaries, as of and for the quarter ended September 30 th, 2008, are presented for comparison purposes. Additionally, some reconciling differences between Brazilian GAAP and IFRS, previously reported in the notes to September 30 th, 2008 financial statements, are no longer applicable as they have been incorporated into the financial statements prepared in accordance with accounting practices adopted in Brazil. The reconciliation of the equity and the effect on the profit for the quarters ended September 30 th, 2009 and 2008 and year ended December 31 st, 2008 is presented below: 63

64 In accordance with Brazilian GAAP IFRS Adjustments Restated 9/30/ /31/2008 9/30/2008 Note Equity Net profit Equity Net profit Equity Net profit Intangible assets 33.1 (29.476) (31.909) (18.358) (35.376) (19.163) Pension and other retirement benefits 33.2 (12.521) (30.961) Regulatory assets 33.3 ( ) ( ) ( ) Regulatory liabilities (32.360) (60.632) Special obligations (1.185) Concession right - UBP 33.5 (75.125) (5.409) (69.716) (26.280) (48.553) (5.117) Start-up costs and exchange rate differences 33.6 (15.543) (16.263) (15.190) 289 Administration and other general overhead costs 33.7 (16.788) (12.421) (4.367) (5.880) - - Adjustments to present value 33.8 (11.123) - - Fair value of equity instruments 33.9 (8.451) (8.451) Fair value of swap contracts (9.480) Reversal of dividends proposed Tax benefits - ADA Reclassification of preferred shares to liabilities - Investco ( ) Reversal of negative goodwill - Escelsa Purchase of minority interests on corporate reorganization (63.507) (63.507) (63.507) - Written put options minority interests ( ) - Acquisition of Lajeado Energia, Investco and Tocantins (30.334) (30.334) (30.334) - Acquisition related-costs Amortization of concession right - Lajeado Energia and Investco (11.948) (173) (11.775) (11.775) - - Goodwill on Lajeado Energia and Investco Depreciation of revaluation of Investco PP&E (16.184) (12.252) (3.932) (3.932) - - Minority interests (8.508) Net effect of deferred taxes on GAAP differences (2.108) (34.884) (52.863) (79.980) ( ) In accordance with IFRS Intangible assets Under Brazilian GAAP, some start-up costs, research and development expenses and other deferred costs of intangible assets are capitalized and amortized over their useful lives. Under IFRS, in accordance with the criteria established in IAS 38 Intangible Assets, such costs are expensed in the period they are incurred, except if it is probable that the expected future economic benefits will flow to the Companies and if those benefits can be reliably measured Pension and other retirement benefits Some the EDP Brazil Group companies attribute post-retirement plans to their employees under defined benefit plans and defined contribution plans. In some cases the EDP companies also provide medical care during the period of retirement and of early retirement, through supplementary benefits to those provided by the National Institute of Social Security. Measurement and recognition of the liability with healthcare benefits are similar to the measurement and recognition of the pension liability for the defined benefit plans. The difference between Brazilian GAAP and IFRS regarding post-retirement benefits measurement and recognition is explained below and refers to a different methodology in recording unrecognized actuarial gains and losses and limits of the assets ceiling. Under Brazilian GAAP, unrecognized actuarial gains and losses are recorded / amortized under the corridor method. The corridor method determines that the net cumulative actuarial gains and losses at the end of the previous reporting period that amount to up to 10 percent of the greater of the projected benefit obligation and the value of plan assets are not recognized or amortized as part of the net pension cost for the year. The amount of the unrecognized actuarial net gains or losses that exceeds the referred 10 percent is amortized over the average remaining service period of the employees. Under IFRS, the unrecognized actuarial gains and losses are recorded in full in equity as permitted by IAS 19 Employee Benefits and limits of the assets ceiling in accordance with item

65 Regulatory assets and liabilities Under Brazilian GAAP, when the regulator establishes a criteria of allocating income or expense to future years, a regulatory asset or liability is booked in the financial statements, which otherwise would be recognized as profit or loss for the year. In accordance with IFRS, regulatory assets and liabilities, which do not meet the criteria established in conceptual framework, are not recognized Special obligations Under Brazilian GAAP, the Company presents special obligations, representing consumers contributions to the cost of expanding power electric supply systems, as a reduction to property, plant and equipment. These obligations were not subject to amortization over the applicable useful lives of the underlying assets. The special obligations are now subject to amortization after the second periodic tariff reset of the distributor subsidiaries. Under IFRS, contributions received from consumers are considered reimbursement of construction costs and are credited against the cost of the related fixed assets. For IFRS reconciliation purposes, the depreciation is adjusted for the effects of the amortization of special obligations using the same depreciation rates applicable to the corresponding class of property, plant and equipment acquired with such consumers contributions against income. Therefore, there will be a difference in the period of the special obligations amortization between Brazilian GAAP and IFRS, considering that, for IFRS purposes, the special obligation started being amortized since the concession creation, and for Brazilian GAAP purposes, the special obligation has been amortized as from the second periodic tariff reset (since August and October 2007 for Escelsa and Bandeirante, respectively). For asset contributions received after the second periodic tariff reset there will be no difference between Brazilian GAAP and IFRS and for assets contributed until that date there will be no residual cost value and unamortized balance of the special obligation at the end of the concession. Before the determination that special obligations should be amortized for Brazilian GAAP purposes, this reconciled item was considered a permanent difference, and therefore there was no deferred tax impact. Since the determination of the amortization special obligations amortization for Brazilian GAAP purposes, this reconciled item became a temporary difference and, therefore, subjected to deferred taxes calculation. The ANEEL Regulatory Resolution, which established the amortization of special obligations, confirmed the tax impacts related to the amortization of special obligations Concession right - UBP The subsidiaries Enerpeixe and Investco, in return for the grant conceded for the exploitation of the Peixe Angical and Lajeado hydroelectric power plants, respectively, have been paying for the Federal Government over the term of the contracts and while they are exploitation them, monthly installments equivalent to one twelfth (1/12) of the annual amount defined in the contracts, corrected annually with a basis on the annual variation of IGP-M calculated by Getúlio Vargas Foundation FGV (or another index that takes its place) in the months of October for Enerpeixe and December for Investco. Under Brazilian GAAP, these contributions are expensed monthly regarding the amount of installments in the income statement while they occur over the term of the contracts. Under IFRS, according to IAS 37 Provisions, Contingent Liabilities and Contingent Assets the total fair value of the obligation up to the end of the concession agreements were accrued and capitalized under IAS 38 Intangible Assets. This intangible asset has been amortized over the term of the contracts and the liability has been amortized in proportion to the performance of the payments. The Intangible asset, net of amortization was increased by R$ and current and noncurrent liabilities were increased by R$ as of September 30 th, Therefore, the net adjustment was equivalent to R$ as of September 30 th, Start-up costs and exchange rate differences Under Brazilian GAAP, the Group capitalized start-up costs and gains and losses related to net foreign exchange differences resulting from loans contracted to fund capital expenditures related to the construction of Enerpeixe and Pecém, denominated in foreign currencies. 65

66 However, under IFRS, in accordance IAS 16 Property, Plant and Equipment definitions, start-up costs are expensed in the period they are incurred, except if it is probable that the expected future economic benefits will flow to the Companies and if those benefits can be reliably measured. In accordance with IAS 23 Borrowing costs definitions, foreign exchange differences are considered as income or expense in the period they are incurred. Therefore, both start-up costs and exchange rate differences were reversed for IFRS purposes Administration and other general overhead costs Under Brazilian GAAP, the Group capitalizes 10 (ten) percent of the expenditures with central administration, with a basis on the direct costs of personnel and outsourced services allocated to capital working in progress. However, under IFRS, in accordance with IAS 16 Property, Plant and Equipment, administration and other general overhead costs are expensed as incurred Adjustments at present value Under Brazilian GAAP, in accordance with CPC 12 - Adjustments at present value and CPC 13 - Initial adoption of Law nº 11,638/07 and of Provisional Measure nº 449/08, subsidiaries recognized adjustments at present value of some accounting receivables in Shareholders equity as prior year adjustments of Law nº11,638/07. However, under IFRS, according IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, this adjustment was recognized in profit and loss in the year of adoption of this accounting criteria. In subsequent periods there will not be accounting practice difference Fair value of equity instruments Under Brazilian GAAP, equity instruments with less than 20% are recognized by original cost and can be reduced by impairment. However, under IFRS, these equity instruments are recognized at fair value Fair value of swap contracts Under Brazilian GAAP, any differential to be paid or received under these contracts is recorded as an asset or liability with a corresponding adjustment to interest expense in the Income statement on accrual basis. The fair value of these contracts is not recognized in the financial statements. Under IFRS, the Company accounts for its derivative contracts in accordance with IAS 39 Financial Instruments Recognition and Measurement which establishes that all derivative instruments are recorded on the Balance sheet as either an asset or liability and measured at fair value. In September 2008, these swap contracts were classified as fair value hedges, changes in fair value are recognized in Income statement Reversal of proposed dividends Under Brazilian GAAP, at each balance sheet date, the board of directors is required to propose a dividend distribution from earnings and accrue for this in the financial statements of the Company. Since this proposal needs to be approved and might be modified at the annual shareholders meeting, for IFRS reconciliation purposes, the excess of the minimum dividends required by Brazilian Corporate Law of 25% of adjusted net income was not considered as declared at the balance sheet date as they had not been approved as at that date and were therefore reversed Tax benefit - ADA The subsidiary Enerpeixe obtained from Amazonia Development Agency ( ADA ), the right to reduce by 75% the income tax rate and non-reimbursable surcharges, calculated based on the exploration, for a period of 10 years as from the fiscal year. Under Brazilian GAAP, for subsidiary Enerpeixe the tax benefit - ADA was recognized in capital reserve till December 31 st, For consolidated proposes, ADA was recognized in equity equivalent under Income statement by the owner percentage of the subsidiary. Since January 1 st, 2008, this benefit has been recognized in Noncurrent liability and for consolidated proposes, this transaction has not been recognized as equity equivalent by the Company. 66

67 Under IFRS, according to IAS 20 Accounting for Government Grants and Disclosure of Government Assistance,, ADA is recognized in the Income statement Reclassification of preferred shares to liabilities - Investco Based on the By-Laws of Investco, preferred shares classes A, B and C at fair value of R$ earn a cumulative fixed annual dividend equivalent to 3% of their amount subscribed as capital and are classified within equity under Brazilian GAAP. The fair value measurement considered the estimate of future cash flows at present value of the remuneration of the instrument described above. In accordance with IAS 32 Financial Instruments: Presentation and Disclosure, such shares are considered a financial liability and, consequently, reclassified from equity to liabilities at fair value Reversal of negative goodwill - Escelsa In accordance with IFRS 3 Business Combinations, negative goodwill is recognized directly in the Income statement in the period in which the business combination occurs Purchase of minority interests on corporate reorganization In 2005, Energias do Brasil implemented a corporate reorganization in order to comply with the New Electricity Law, which required the restructuring of operations. Under the New Electricity Law, companies and concessionaires that distribute electricity through the interconnected system are restricted from performing various activities, including engaging in generation activities, transmission activities and the sale of electricity to free consumers. Similarly, concessionaires and companies authorized to perform generation or transmission operating in the interconnected system is prohibited to associate with or become the related parties of companies that distribute electricity in the interconnected system. Companies and concessionaires engaged in these restricted activities must have restructured their activities and be in compliance as from September This corporate reorganization included the following transactions, among others: merging IVEN into Energias do Brasil; and making Escelsa and Bandeirante wholly-owned subsidiaries of Energias do Brasil by transferring the shares issued by such companies to Energias do Brasil. As a result of this corporate reorganization, minority shareholders of Bandeirante, Escelsa and IVEN, that did not exercise their withdrawal rights, received shares of Energias do Brasil in exchange for their shares in these companies. Under Brazilian GAAP, such minority interests acquired were recorded at book value and did not generate goodwill. Under IFRS, the Company applied the purchase accounting method in accordance with IFRS 3 Business Combinations. IFRS 3 requires the tangible and intangible assets acquired and liabilities assumed in a business combination to be recorded at fair value on the acquisition date. The excess of the purchase price over the fair value of the net identifiable assets acquired, if any, is recorded as goodwill. This includes allocation of fair value for minority interest against equity. 67

68 The purchase price allocation in accordance with IFRS 3 determined in 2005 year is as follows: Bandeirante Escelsa Total Current assets 702, ,001 Noncurrent assets 476, ,233 Property, plant and equipment 1,801,597 1,626,254 Investments ,117 Total assets acquired 2,981,960 2,913,605 Current liabilities 794, ,130 Long term liabilities 939,371 1,753,986 Liabilities assumed 1,733,494 2,318,116 Net assets (liabilities) acquired (assumed) 1,248, ,489 Interest acquired 3.50% 87.47% Net assets acquired 43, ,874 Total cost of acquisition 43, ,874 Goodwill recorded under IFRS - - Fair value of net assets 43, ,874 Book value under Brazilian GAAP 24, ,600 Adjustment to IFRS 19,219 (82,726) (63,507) Acquisition of Lajeado Energia and Investco In September 2008, Energias do Brasil exchanged the total equity interest held in the company Enersul for equity interests held by Rede Energia S.A. in the companies Lajeado Energia S.A. ( Lajeado Energia ) and Investco S.A. ( Investco ), as well as by equity interests held by Rede Power do Brasil S.A. in the companies Lajeado Energia and Tocantins Energia S.A. ( Tocantins ). Under IFRS 3 Business Combinations this transaction was recognized through the purchase method of accounting. The cost of an acquired entity is allocated to net assets acquired, including identifiable intangible assets, liabilities and contingents liabilities assumed based on their estimated fair values as at the acquisition date. 68

69 The following table demonstrates the purchase price allocation in accordance with IFRS 3: Investco Lajeado Energia Tocantins Total Current assets Noncurrent assets Property, plant and equipment Intangible assets Investments Total assets acquired Current liabilities Long term liabilities Liabilities assumed Net assets (liabilities) acquired (assumed) Exclusions: Founder's shares - ( ) Elimination of investments - ( ) ( ) Total exclusions - ( ) ( ) Net assets Interest acquired 24,35% 53,69% 50,88% Net assets acquired Acquisition cost under Brazilian GAAP IFRS adjustments (30.334) Acquisition related-costs Price of preferred shares of Invevstco (financial Instrument) acquired (8.700) Total cost of acquisition under IFRS Goodwill recorded under IFRS (42.293) Additionally, the allocation of the costs associated with this transaction created differences in the values of assets, liabilities and contingent liabilities under IFRS when compared to Brazilian GAAP, and consequently the depreciation of fixed assets and the amortization of intangibles are also different in IFRS when compared to Brazilian GAAP. In August 2009, the final valuation report was registered, reducing the goodwill in R$ when compared with previous report. Main changes where in the valuation of Property, plant and equipment and in fair value of Intangible Assets Minority interests This reconciled item refers to the minority interest portion on the adjustments included in the equity and Income statement reconciliation for certain subsidiaries Net effect of deferred taxes on GAAP differences In accordance with the accounting policy of Energias do Brasil, the income tax charge is determined considering the taxable income in accordance with the applicable legal framework and the tax rate approved or substantially approved in Brazil. Deferred taxes are determined in accordance with liability method based on the balance sheet, considering temporary differences between the accounting and tax amounts of assets and liabilities, by the use of the tax rate approved or substantially approved as at the balance sheet date in Brazil, and that are expected to be applicable when the above aforementioned differences are reversed. Therefore, the deferred tax adjustments performed under IFRS are related to the impact of the adjustments aforementioned above, whenever in accordance with IAS 12 Income Taxes, there are temporary differences between accounting practices and tax regulations that result in deferred taxes asset or liability. 69

70 Statement of changes in shareholder s equity under IFRS Opening balance on January 1st, 2008 as restated Net profit Dividends proposed of prior year ( ) Treasury shares ( ) Others Balance on September 30th, 2008 as restated Net profit Dividends proposed of prior year - Pension benefit adjustments (73.331) Deferred tax on pension benefit adjustments Reclassification of preferred shares to liabilities - Investco Treasury shares ( ) Written put option - minority interests - Others (3.678) Legal dividends - 25% of net profit (87.937) Balance on December 31st, Net profit Dividends proposed of prior year ( ) Pension benefit adjustment Deferred tax on pension benefit adjustment (6.568) Reclassification of preferred shares to liabilities - Investco (6.342) Balance on September 30th, Additional disclosures required by IFRS IFRS 5 Noncurrent assets held for sale and discontinued operations In June 2008, Energias do Brasil, Rede Energia S.A. and Rede Power do Brasil S.A. entered into a Commitment for the Exchange of Shares and Other Agreements in relation to the transaction (Note 2) which the subject matter was the exchange of assets, from Energias do Brasil the total equity interest held in the company Enersul and from Rede Energia S.A., of the equity interests in the companies Lajeado Energia S.A. (Lajeado Energia) and Investco S.A. (Investco), as well as by Rede Power do Brasil S.A., of the respective equity interests in the companies Lajeado Energia and Tocantins Energia S.A. (Tocantins). The Company is presenting a single amount of the income statement comprising the post-tax profit from discontinued operations, and disclosed in the notes related to revenue, expenses, and the pre-tax profit from discontinued operations; income tax on profit from discontinued operations. 70

71 Segment reporting A business segment is a distinguishable component of the Group that is engaged in providing products or services or a group of related products or services that is subject to risks and returns that are different from those of other business segments. 9/30/2009 Generation Distribution Trading Others Consolidation adjustments Total activities Net revenues (4) ( ) Electricity costs (87.190) ( ) ( ) ( ) Other operating costs ( ) ( ) (4.089) ( ) Services rendered to third parties - (4.505) (4.505) ( ) ( ) ( ) ( ) Gross margin (4) Operating expenses Selling expenses (163) (56.177) (10.435) (2.950) - (69.725) General and administrative expenses ( ) ( ) (5.367) (42.396) - ( ) Depreciation and amortization expenses (11.113) (8.710) (156) (15.372) (12.425) (47.776) Other expenses (29.789) (18.374) - (12.486) - (60.649) ( ) ( ) (15.958) (73.204) (12.425) ( ) Gross operating results (73.208) (12.425) Equity method ( ) (269) Financial results ( ) (14.175) ( ) Operating results ( ) Non-operating results (922) (6.905) Profit before tax ( ) Income tax expense (97.409) (89.048) (12.776) (494) - ( ) Deferred taxes (64.250) (35.011) (80.147) ( ) (9.258) ( ) Profit before interest on own capital and minority interests ( ) Reversal of interest on own capital Minority interests (82.866) (82.866) Profit for the period (IFRS) ( ) Other information: Current assets ( ) Noncurrent assets ( ) Investments ( ) Property, plant and equipment Intangible assets Current liabilities ( ) Noncurrent liabilities ( ) Shareholders equity and minority interest (IFRS) ( )

72 9/30/2008 Generation Distribution Trading Others Consolidation adjustments Total continuing activities Discontinued activities Total activities Net revenues (4) ( ) Electricity costs (67.943) ( ) ( ) ( ) ( ) ( ) Other operating costs ( ) ( ) (2.775) ( ) ( ) ( ) Services rendered to third parties - (3.547) (3.547) (572) (4.119) ( ) ( ) ( ) ( ) ( ) ( ) Gross margin (4) Operating expenses Selling expenses (380) (40.681) (10.658) (1.182) - (52.901) (16.113) (69.014) General and administrative expenses (19.568) ( ) (6.009) (30.348) - ( ) (29.865) ( ) Depreciation and amortization expenses (6.635) (4.670) (205) ( ) - ( ) (10.252) ( ) Other expenses (15.560) (13.440) - (1.346) - (30.346) (12.588) (42.934) (42.143) ( ) (16.872) ( ) - ( ) (68.818) ( ) Gross operating results ( ) Equity method ( ) (0) - (0) Financial results (91.067) (44.070) ( ) (13.762) ( ) Operating results ( ) Non-operating results (9.829) (5.580) (1.298) (6.878) Profit before tax ( ) Income tax expense (57.467) (44.058) (17.417) (84) - ( ) (24.196) ( ) Deferred taxes (89.970) (25.118) - ( ) (8.716) ( ) (53.295) ( ) (13.975) (25.202) - ( ) (32.912) ( ) Profit before interest on own capital and minority interests ( ) Reversal of interest on own capital Minority interests (62.924) (62.924) - (62.924) Founders share Profit for the period (IFRS) ( ) Other information: Current assets ( ) Noncurrent assets ( ) Investments ( ) Property, plant and equipment Intangible assets Current liabilities ( ) Noncurrent liabilities ( ) Shareholders equity and minority interest (IFRS) ( ) Earnings per share Under Brazilian GAAP, net income per share is calculated on the number of shares outstanding at the balance sheet date. In these consolidated financial statements, information is disclosed per lot of one thousand shares. Under IFRS, the Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic and diluted EPS are calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Restated 9/30/ /31/2008 9/30/2008 Basic and diluted earnings per thousand of shares (IFRS) R$ 3.274, , ,56 Earnings per thousand of shares under Brazilian GAAP R$ 3.145, , , New standards and interpretations not yet adopted The International Financial Reporting Committee (IFRIC) issued on November 2006, IFRIC 12 Service Concession Arrangements, applicable for accounting periods beginning as of or after January 1st, 2008 and the EU endorsed this interpretation on March 2009, for periods beginning on or after June 1st, In accordance with IFRIC 12, infrastructure within the scope of this Interpretation shall not be recognized as property, plant and equipment of the operator because the contractual service arrangement does not convey the right to control the use of the public service infrastructure to the operator. The operator has access to operate the infrastructure to provide the public service on behalf of the grantor in accordance with the terms specified in the contract. IFRIC 12 sets out general principles on recognizing and measuring the obligations and related rights in service concession arrangements. The Company is evaluating these general principles to be adopted for the year beginning on January 1, As required by IFRS endorsed by European Union. 72

73 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, Events in the Period Aneel approves the result of EDP Escelsa s tariff review Aneel irrevocably ratified the fourth periodic tariff review for EDP Escelsa (period from August 2007 to August 2010). The main changes in relation to what had been established in 2007 and 2008 on a preliminary basis are: (i) the Reference Company value was modified from R$221 million to R$210 million; (ii) the component Xe of the X Factor was amended from 1.45% to 0.00%; and (iii) the percentage of irrecoverable revenue losses was changed from 0.50% to 0.60% of gross sales (including taxes). Aneel approves EDP Escelsa tariff readjustment index At a public audience held on August 4 th, 2009, Aneel (the National Electric Energy Agency) approved the report proposing an average increase in the tariffs of EDP Escelsa of 15.12% for the period from August 7 th, 2009 to August 6 th, 2010, covering all consumer classes (residential, industrial, commercial, rural, etc). Factoring in the adjustments already incorporated into the tariffs of EDP Escelsa, in addition to recoveries for previous periods, the average effective tariff increase will be 10.01%. Contract between Enertrade and Ampla reinstated Despite final arbitration canceling the contract with Ampla from March 19 th, 2009 on, following a court ruling in September, this arrangement was reinstated, retroactive to April The reinstatement of the contract with Ampla generated additional sales for Enertrade of R$26 million 3Q09. 73

74 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, Consolidated Financial and Economic Performance 2.1. Consolidated revenue Net Operational Revenue (R$ thousand) 3Q09 3Q08 Chg. Retail supply Residential 368, , % Industrial 255, , % Commercial 195, , % Rural 31,254 42, % Other 80,816 96, % (-) Transferred to TUSD - captive customers (1) (515,180) (612,945) -16.0% Unbilled supplies (31,483) 63,805 n.a. Total retail supply 385, , % Wholesale delivery Electric energy 11,306 7, % Short-term energy 6,323 21, % Commercialization (retail and wholesale) 214, , % Generation 136,831 60, % Total wholesale delivery 368, , % Retail supply and wholesale delivery 753, , % Usage of the distribution system (TUSD) 666, , % TUSD - other 151, , % TUSD - captive customers (1) 515, , % Other operational revenues 50,177 (6,816) n.a. Sub-total 1,470,375 1,440, % (-) Deductions from operating revenue (287,217) (285,430) 0.6% Net operating revenue 1,183,158 1,155, % (1) Pursuant to Aneel rulings, this item covers the portion billed to final customers corresponding to the use of the distribution system, previously fully shown as part of Retail Supply and now presented in the Usage of the Distribution System. In 3Q09, consolidated net operating revenue posted a year on year growth of 2.4% totaling R$1,183.2 million. The main factors impacting the trend in net operating revenue were: In generation Growth of 30.2% in energy volume sold due to the consolidation of volumes of Lajeado Energia, Investco and the start of whole sale energy delivery from the Santa Fé SHP; A 3.2% increase in average prices following readjustments to energy sales contracts. In distribution Elimination of Enersul from Group consolidated figures; 74

75 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, 2009 Growth of 1.1% in energy volume sold to final customers in 3Q09 (taking into account volumes for Escelsa (+4.5%) and Bandeirante (- 0.8%) in the respective quarters); Negative impact of Bandeirante s tariff review: -R$35 million in the Tariff Reimbursement item; Higher average energy prices in place due to the tariff readjustments at Escelsa and Bandeirante applied as from August 2009 and October 2008, respectively. In commercialization: Another record quarter for commercialization of energy with a growth of 36.4% compared with 3Q08 (see page 20 for more details); Enertrade s average energy sales price posted a slight reduction of 1.9% due to depressed spot market values which influence sales prices. Revenue from the tariff for the use of the distribution system - other (TUSD - other) amounted to R$151.0 million, or 4.5% higher than reported in 3Q08. The value for TUSD revenue other, for Bandeirante and Escelsa alone, reported a year on year increase of 13.9% despite a reduction of 13.0% in Group distributors energy transit volumes. The greater portion of revenue from free customers (approximately twothirds) refers to contracting for use of the network (capacity in MW). In the case of these customers, the distributor also collects sector charges (CCC Fuel Consumption Account, CDE Energy Development Account, Proinfa - Incentive Programs for Alternative Energy Sources, etc). These are passed through to other entities and are calculated on the basis of energy consumption in MWh Operating expenditures (non-manageable and manageable expenditures, including depreciation and amortization) Operating expenditures amounted to R$890.9 million in 3Q09, equivalent to an increase of 0.8% compared with 3Q08. Operating Expenditures (R$ thousand) 3Q09 3Q08 Chg. Total Expenditures (890,891) (883,901) 0.8% 75

76 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, Non-manageable expenditures Operating Expenditures (R$ thousand) 3Q09 3Q08 Chg. Non-manageable Expenditures Electricity purchased for resale (548,529) (545,396) 0.6% Electricity network utilization charges (156,603) (122,847) 27.5% PIS/Cofins 76,971 69, % Other (9,116) (8,938) 2.0% Total non-manageable Expenditures (637,277) (607,602) 4.9% Non-manageable expenditures are related largely to the purchase of energy, charges for use of the basic network and the Aneel inspection fee. In 3Q09, these items together increased 4.9% compared with the same period last year. Electricity purchased to resell totaled R$548.5 million, an increase of 0.6% between the comparative periods, a result of: (i) increase in energy acquired from Itaipu (+R$3.7 million), due to the average appreciation of the US dollar of 8% in the period (average foreign exchange rate of R$1.71 in 3Q08 against R$1.85 in 3Q09), in addition to the 9% tariff restatement in US$ and a reduction in contracted volumes of 2%; (ii) increase in purchases via energy auctions (+R$15.9 million); (iii) growth in energy purchased from Proinfa (+R$9.0 million); (iv) reduction in spot market energy (-R$16.8 million); (iv) increase in energy purchased from other suppliers (+R$27.1 million); (v) net effect of CVA - Parcel A Tracking Account (-R$35.8 million). The following tables show details of expenditures with energy purchased for resale and charges for the use of the basic network: Electricity Purchased for Resale (R$ thousand) 3Q09 3Q08 Chg. Itaipu (105,932) (102,248) 3.6% Auction (185,941) (170,040) 9.4% PROINFA (22,883) (13,876) 64.9% Short-term energy - CCEE (16,968) (33,771) -49.8% Other suppliers (210,302) (183,164) 14.8% Net effect of CVA (6,503) (42,297) -84.6% Total (548,529) (545,396) 0.6% Electricity Network Utilization Charges (R$ thousand) 3Q09 3Q08 Chg. Use and connection charge (137,366) (125,645) 9.3% System service charge 313 (22,197) n.a. Net effect of CVA (19,550) 24,995 n.a. Total (156,603) (122,847) 27.5% 76

77 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, 2009 The charges for the use of the basic electricity network reported growth of 27.5% in 3Q09 when set against 3Q08, totaling R$156.6 million Manageable expenditures Operating Expenditures (R$ thousand) 3Q09 3Q08 Chg. Manageable Expenditures Personnel (54,129) (74,776) -27.6% Material (6,015) (8,252) -27.1% Third-party services (68,076) (75,865) -10.3% Provisions and contingencies (36,916) (17,363) 112.6% Other (16,409) (20,797) -21.1% (181,545) (197,053) -7.9% Depreciation and amortization (72,069) (79,246) -9.1% Total Manageable Expenditures (253,614) (276,299) -8.2% IGP-M (12 months) % Manageable expenditures, excluding depreciation and amortization, reported a reduction of 7.9% in 3Q09 compared with 3Q08. A more detailed analysis of changes in the accounts for manageable expenditures is shown below: Reduction in the personnel expenditures account of R$20.6 million, some events deserving particular mention: (i) compared with 3Q08, there was a reduction in payroll overheads thanks to the Vencer Program (-R$4.4 million); (ii) in distribution activities (network project), we successfully improved the processes, resulting in a greater transfer of this expenditure to fixed assets (-R$7.1 million); (iii) changes in the methodology for profit sharing (PLR/Bonus) for recent hires provisioning on a monthly basis (+R$2.3 million); (iv) reduction due to the divestment of Enersul (-R$11.0 million). The materials account reported a decrease of R$2.2 million in the comparative periods, principally due to two factors: (i) reduction due to the divestment of Enersul (-R$1.9 million); (ii) lower expenditures with conservation and maintenance of the electricity system (-R$0.3 million). The third party services account posted a reduction of R$7.8 million, principally a reflection of the following: (i) reduction in all account items due to the divestment of Enersul (-R$14.4 million); (ii) increase in support activities: IT, call centers, litigation, conservation and repairs to the distribution networks (+R$4.5 million) (iii) increased expenditures with telecommunications and meter reading/billing (+R$2.1 million). 77

78 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, 2009 The Group posted an increase of R$19.6 million in the figures for provisions and contingencies, the key items being: (i) as a result of a court ruling we reinstated the contract between Enertrade and Ampla, again constituting a provision for doubtful debts (PDD) covering the differential between the contractual tariff and the value previously paid by this customer (+R$7.4 million); (ii) constitution of a provision for probable losses of Enersul s contingencies in accordance with the asset swap contract (+R$12.3 million). There was a reduction of R$4.4 million in the other account: (i) settlement of incomes and rents executed in September 2008 relating to eliminations involving Lajeado following the asset swap (-R$7.1 million). (ii) growth in the other account publicity and advertising expenses for announcing the new EDP brand (+ R$3.3 million). The depreciation and amortization account reached R$72.1 million in 3Q09, recording a negative variation of 9.1% compared with the same period in The reduction largely reflects the divestment of Enersul EBITDA EBITDA Breakdown Business Unit 3Q09 * 3.4% EBITDA Breakdown Business Unit 3Q08 * 2.9% 35.1% 48.9% 47.7% 62.0% Generation Distribution Commercialization Generation Distribution Commercialization * percentages exclude intra-group transactions In 3Q09, EBITDA reached R$364.3 million, a 3.9% increase in relation to the same period in the preceding year. EBITDA for the generation segment totaled R$187.3 million in 3Q09, a growth of 47.0% against 3Q08, largely the result of the consolidation of Lajeado into the Company s portfolio following the asset swap operation. 78

79 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, 2009 EBITDA for the distribution segment, including EDP Escelsa and EDP Bandeirante, totaled R$192.0 million in 3Q09, a slight reduction of 1.4% in relation to 3Q08. This reflects: i) tariff reimbursements following the irrevocable ratifications of the tariff reviews at both distributors; and (ii) the adjustment in the CVA - Parcel A Tracking Account subsequent to the readjustment at EDP Escelsa in the quarter almost totally offset by the reduction of 5.2% in manageable expenditures and improved market conditions. EBITDA for the commercialization segment totaled R$13.2 million, a growth of 25.0% in relation to 3Q08, due to the increase in commercialized energy volumes and improved energy sales margins, in turn a reflection principally of Enertrade s participation in CCEE s (Electricity Energy Trading Board) 9 th adjustment auction and the reinstatement of the Ampla contract Financial result Financial Result (R$ thousand) 3Q09 3Q08 Chg. Financial Revenue 33,601 50, % Financial Expense (74,226) (98,721) -24.8% Net Foreign Exchange Result (18,306) (6,203) 195.1% Foreign exchange gains (loss) 3,130 (17,341) n.a. Net result from swap and hedge operations (21,436) 11,138 n.a. Total (58,931) (54,110) 8.9% In 3Q09, the net consolidated financial result was negative, totaling R$58.9 million, as compared with the negative value of R$54.1 million in 3Q08. Both financial revenue (-33.9%) and also financial expenses (-24.8%) reported reductions due to the decline in the Selic basic rate of interest. The net foreign exchange result reflects the appreciation of the Real against the US dollar. 79

80 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, Net Income Net Income (R$ thousand) 3Q09 3Q08 Chg. (R$) Chg. (%) Net Income before minority interests 156, ,817 15, % Minority interests (36,773) (20,330) (16,443) 80.9% Reported Net Income 120, ,487 (1,377) -1.1% Consolidated net income for 3Q09 totaled R$120.1 million, a slight reduction of R$1.4 million in relation to 3Q08. During the quarter, the net income figure incorporates the increase in minority interests following the asset swap and other impacts highlighted above. 3. Debt Gross consolidated debt amounted to R$2,974 million on September 30 th, 2009, 2% down on the outstanding for the end of June Of this reduction, 40% is a reflection of the currency variation on US dollar denominated debt (Bridge Loan to Pecém and an IDB line of credit to Bandeirante) and 53%, the partial amortization of a project finance package granted to Enerpeixe. Net debt, adjusted for cash and banks/investments in marketable securities and for the net balance in regulatory assets, totaled R$2,403 million on September 30 th, 2009, equivalent to the value reported on June 30 th, Trend in Net Debt (R$million) 2,974 Short-Term (457) (114) 2,403 2,402 1,270 Long-Term 1,704 Gross Debt Sep.09 (-) Cash and (-) Regulatory Marktable Securities Assets and Liabilities Net Debt Sep.09 Net Debt Jun.09 80

81 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, 2009 Regulatory Assets and Liabilities (R$ thousand) 09/30/09 Customers and concessionaries 78,001 Expenses prepaid (PIS/Cofins/Net CVA) 44,726 Other credits 70,643 Total Assets 193,370 Suppliers (5,343) Tariff refund (48,189) Other payable aaccounts (25,439) Total Liabilities (78,971) Net Total 114,399 Gross Debt Breakdown (09/30/2009) 3.6% 4.8% 4.0% 36.6% US$ % CDI TJLP Fixed Rate IGP-M 51.0% Of the total gross debt at the end of September 2009, 5.6% was foreign currency denominated, 15.1% of which protected against foreign currency variation using hedge mechanisms and translating into a net exposure of 4.8%. It is worth noting that the unhedged portion of currency exposure largely relates to the US dollar-denominated tranche of the bridge loan for Pecém I. The natural mitigating factor in this case is that repayment is linked to a long-term credit line in US dollars signed with the IDB the Inter-American Development Bank on July 9 th, This long-term loan in turn has already been hedged against both foreign exchange and also interest rate risks (the latter through a Libor versus fixed interest rate swap). The average annual cost of Group debt was 10.2%. Net Debt / EBITDA * 1.4 x 1.8 x 1.8 x 1.8 x 1.8 x The net debt/ebitda ratio at the end of 3Q09 was 1.8 times, indicative of the Company s comfortable leverage. Sep/08 Dec/08 Mar/09 Jun/09 Sep/09 * EBITDA of the last 12 months 81

82 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, 2009 Debt Maturity Schedule * (R$ million) ** Cash and Marktable Securities (Sep/09) After 2012 * Values include principal + interest + results from hedge operations ** Treasury stock priced as of September 30 th, Short-Term Debt Breakdown (R$ million) 461 * Cash & 1 Bridge 2 Loan Marketable Credit Porto do Distribution Generation Securities Line 2009 Pecém (Sep/09) * Treasury stock priced as of September 30 th, 2009 Maturing debt in 2009 totals R$622 million, R$236 million of which represents the Pecém I bridge loan. Settlement of this will be made by drawing a long-term financing agreed with the BNDES and IDB (project finance of which R$700 million of the BNDES line has already been disbursed). A further maturity relates to a credit line raised by the holding company, EDP Energias do Brasil in October 2008 (R$255 million - for partial settlement of exercised withdrawal rights - maturing in December of this year). The remaining maturities represent amortization of long-term debt held on the books of the affiliates operating in the generation and distribution segments. 82

83 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, Capital Expenditures In 3Q09, EDP Energias do Brasil s capital expenditures amounted to R$172.4 million, 17.8% higher than for the same period in These investments were distributed between generation (49%) and distribution (50%). The larger part of the investment budget in generation was allocated to the work on Pecém I. In the case of Santa Fé SHP, the advance made to suppliers in 2Q09 was written off. Investments in the distribution segment in 3Q09 totaled R$86.0 million, largely allocated to improving Group distribution networks. Investments* (R$ million) 3Q09 3Q08 Chg. Distribution % Bandeirante % Escelsa % Enersul n.a. Generation % Enerpeixe % Energest % EDP Lajeado % Santa Fé (16.9) (3.8) 344.7% Pecém n.a. Other 1.2 (1.7) n.a. Total % * Includes capitalization of interest Investments - Distribution (R$ million) 3Q09 3Q08 Chg. Bandeirante Gross Value % (-) Donations and Subventions (3.0) (12.3) -75.3% Net Value % Escelsa Gross Value % (-) Donations and Subventions (2.8) (1.0) 178.4% Net Value % Enersul Gross Value n.a. (-) Donations and Subventions 0.0 (0.7) n.a. Net Value n.a. 83

84 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, Operating Performance by Business Unit Items in R$ thousand or % Generation Distribution Commercialization Consolidated* 3Q09 3Q08 3Q09 3Q08 3Q09 3Q08 3Q09 3Q08 Net Operating Revenue 248, , , , , ,419 1,183,158 1,155,269 Non-manageable expenditures (38,603) (31,852) (541,648) (566,963) (198,788) (153,069) (637,277) (607,602) Manageable expenditures (22,309) (19,921) (121,218) (157,940) (10,574) (6,814) (181,545) (197,053) Depreciation and amortization (26,608) (20,928) (40,792) (54,435) (52) (72) (72,069) (79,246) EBITDA 187, , , ,173 13,171 10, , ,614 EBITDA Margin 75.5% 71.1% 22.5% 23.7% 5.9% 6.2% 30.8% 30.3% Net Income 85,298 53,617 95,969 91,171 9,006 6, , ,487 * Consolidated: includes the companies of EDP Energias do Brasil group and intercompany business Generation Items in R$ th or % Generation Enerpeixe Energest (1) Lajeado Total (2) Total Generation 3Q09 3Q08 3Q09 3Q08 3Q09 3Q08 3Q09 3Q08 Net Revenue 79,280 76,137 58,327 46, ,601 56, , ,224 Non-manageable expenditures (13,091) (16,678) (8,545) (5,209) (16,967) (9,965) (38,603) (31,852) Manageable expenditures (4,753) (4,619) (10,613) (9,264) (6,943) (6,038) (22,309) (19,921) Depreciation and amortization (10,704) (11,200) (3,618) (3,039) (12,286) (6,689) (26,608) (20,928) EBITDA 61,436 54,840 39,169 32,456 86,691 40, , ,451 EBITDA Margin 77.5% 72.0% 67.2% 69.2% 78.4% 71.5% 75.5% 71.1% Net Income 27,391 21,965 24,059 16,556 33,848 15,096 85,298 53,617 (1) Consolidated (2) Includes Investco, EDP Lajeado and Lajeado Energia with the respective stakes and intra-group elimination. Energy volume sold by Group plants in 3Q09 reached 2,060 GWh, a growth of 30.2% in relation to the 1,582 GWh sold in 3Q08. This increase reflects the consolidation of energy sales volume of Lajeado Energia and Investco (+397 GWh) and initial energy deliveries from Santa Fé SHP (+34 GWh) - since June 2009, operating at full capacity. In 3Q09, the average generation price was 3.2% higher than 3Q08, the result of readjustments in energy contracts. The table bellow presents the energy volume sold and average sales price in 3Q09: Generation Enerpeixe Energest Lajeado Total Total 3Q09 3Q08 % 3Q09 3Q08 % 3Q09 3Q08 % 3Q09 3Q08 % Energy Sold (MWh) 587, , % 588, , % 883, , % 2,059,776 1,581, % Average Price (R$/MWh)* % % % % * Average price of energy sold = revenues from energy supply / volume of energy sold from generation business - Expansion in Generation Capacity Work on the Pecém I plant began in early July The plant is scheduled to go into commercial operations before January 2012, when the commitment for energy delivery to the Regulated Market begins. 84

85 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, 2009 Repowering work on the Mascarenhas (17.5 MW) and Suíça (2.3 MW) hydroelectric power plants (HPPs) and the Rio Bonito SHP (5.22 MW) began in The additional capacity at Suiça HPP and Rio Bonito SHP is expected to become operational in 2009 and at Mascarenhas HPP, in The following graph shows the growth in the Group s generation capacity over the next few years considering only projects where work is already in progress. With start-up of commercial operations at Pecém I, total installed capacity will amount to 2,116 MW by * ** and 2010 Expect Start-up ,043 1, , Peixe 4th Engine São 2007 Additional Cenaeel Santa Angical Mascarenhas João Capacity Fé 2009 HPP SHP Lajeado SHP Projects concluded since the IPO Projects in course * Corresponds to EDP Energias do Brasil s 45% stake in EDP Renováveis Brasil ** Mascarenhas, Suíça, Rio Bonito Repowering Pecém TPP 2011 EDP Energias do Brasil continues to pursue a strategy of expansion in the generation segment through a selective approach of delivering profitable long-term growth and value creation Distribution Distribution Items in R$ th or % Bandeirante Escelsa Enersul Total Distribution 3Q09 3Q08 3Q09 3Q08 3Q09 3Q08 3Q09 3Q08 Net Revenue 508, , , , , , ,076 Non-manageable expenditures (328,278) (314,799) (213,370) (176,347) - (75,817) (541,648) (566,963) Manageable expenditures (62,388) (70,769) (58,830) (57,155) - (30,016) (121,218) (157,940) Depreciation and amortization (19,938) (22,122) (20,854) (20,534) - (11,779) (40,792) (54,435) EBITDA 117, ,595 74,108 76,091-30, , ,173 EBITDA Margin 23.2% 23.5% 21.4% 24.6% % 22.5% 23.7% Net Income 62,981 57,930 32,988 26,537-6,704 95,969 91,171 The following table shows the number of customers and energy volume by consumer class and concessionaire for the EDP Bandeirante and EDP Escelsa distributors as well as changes in relation to the preceding year. For more details, see Attachment XI (page 36). 85

86 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, 2009 Market Evolution Volume (MWh) Chg. Customers (unit) Chg. 3Q09 3Q08 3Q09/ 3Q09/ 3Q09 3Q08 3Q08 3Q08 DISTRIBUTION Residential 1,158,449 1,068, % 2,235,918 2,194, % Industrial 1,010,514 1,076, % 20,705 19, % Commercial 650, , % 188, , % Rural 162, , % 153, , % Other 345, , % 21,071 20, % Energy Supplied to Final Customers 3,326,809 3,291, % 2,620,504 2,563, % Conventional supply 107, , % % Supply 4, Energy in transit (UDS) 2,015,048 2,315, % % Own consumption 3,684 3, % % Total Energy Distributed 5,457,669 5,721, % 2,620,878 2,564, % Note: Other = Public entities + Public lighting + Public services UDS: Usage of the Distribution System Industrial 23% Commercial 12% Bandeirante - 3Q09 Rural 1% Other 6% Consumption per Class (MWh) Energy in Transit 35% Commercial 12% Industrial 12% Rural 7% Escelsa - 3Q09 Other 7% Energy in Transit 38% Residential 23% Supply + Own Consump. 0% Residential 19% Supply + Own Consump. 5% Final Customer Market Energy sold to final customers: the reduction in industrial class volume was offset principally by growth in residential and commercial volumes, thus neutralizing the impact on total volume. Residential: volume grew 8.4% compared with 3Q08 due to the increased customer base (+1.9%) and the 6.4% rise in per capita consumption at the Group distributors (average kwh/month). o The Federal Government s policy of tax breaks was particularly important, notably through the reduction of the IPI excise tax and interest rates, which contributed to increased demand for consumer goods. 86

87 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, 2009 Industrial: volume recorded a fall of 6.2% in 3Q09 compared with the same period in 2008, reflecting weaker output from the industries impacted by the world crisis. When comparing the 3Q09 versus the 2Q09, the industrial consumption presented growth of 4.3%. o Escelsa reported a recovery in the principal segments of the industrial class as indicated by the consumption of the largest customers in the chemicals (+6.8%, against -32.2% in 2Q09), ornamental stone (-3.7% against -17.8% in 2Q09) and metallurgy (-16.2% against -37,7% in 2Q09) industries. o At Bandeirante the high comparative base in 3Q08 resulted in lower growth rates in 3Q09. This scenario was common to the entire industrial sector in the state of São Paulo, according to a survey of activity undertaken by FIESP (the Federation of Industries of the State of São Paulo). o There are some signs of recovery in the metallurgical segment, exemplified by a request to increase demand at a customer which had only recently negotiated a reduction in energy supply. A recovery is ongoing at Bandeirante in the most representative segments, principally those end customers comprising the automotive chain (plastics, rubber, glass, leather and textiles). o This evidence of recovery in energy consumption in the industrial sector is important due to the positive signal it sends in relation to economic activity. Rural: registered a decline of 7.8% in 3Q09. o At Bandeirante, the migration of rural electrification cooperatives to so-called permissionaires resulted on this decline. Excluding this movement, the rural class would have grown by 0.6%. Free Customer Market Volume of energy in transit: reported a fall of 13% in 3Q09 compared with 3Q08, principally impacted by the reduction in free customer consumption due to the international crisis. It should be pointed out that the larger part of revenues from free customers (approximately 2/3) is obtained from the contracting of the use of the network (capacity in MW). In the case of these customers, the distributor also collects the appropriate sector charges (CCC, CDE, Proinfa, etc), which are then passed through to other entities and calculated on the basis of energy consumption in MWh. In the preceding quarter, the free customer market recorded a decline of 24.9%. Due to the world financial crisis, some companies have requested a reduction in their demand contracts with concessionaires, these requests being subject to a six month grace period before coming into effect in accordance with current regulations. 87

88 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, 2009 Bandeirante: in the event that reductions were effective, they would represent 8.5% of total billed demand from free customers although the full value will only be effective as from January 2010, since the decreases are made on a staggered basis. However, the scenario is beginning to improve with some requests now being received for increased demand and cancellation of previous requests for reductions, thus restricting the potential impact to 4.8% of total demand billed to free customers. Escelsa: reported a decrease of 15.6% in 3Q09 in relation to 3Q08, due by and large to the fall in consumption by major exporters in the mining and steel segments where output saw a decline due to the crisis. Nevertheless, this reduction is less than for the first two quarters of the year, when the company recorded a decline of 45.7% on 1Q09 and 38.2% on 2Q09, indicative of a recovery in activity at the customer base. This more positive trend in consumption to date has reduced the potential for customer requests for cuts in contracted demand. At the end of the second quarter of this year, the disco had received requests for a 21% cut in contractual demand from free customers as from November 2009 and 24% in January The reduction in demand as from November has since declined to 1.9%, and, indeed, now with some requests for additional demand as from January Tariff Base Annual tariff readjustments for the discos as well as periodic tariff reviews take place on specific dates as shown below: Distributor Readjustment Periodic Review Bandeirante October 23 rd Every four years as from 2003, the next being in 2011 Escelsa August 7 th Every three years as from 1998, the next being in Distributor Readjustment Review 1 Bandeirante +5.46% -9.79% Escelsa % -6.44% 1 Final ratification of the 2007 Tariff Reviews On August 4 th, 2009, Aneel ratified the average readjustment in the tariffs of EDP Escelsa at 15.12% for the period August 7 th, 2009 to August 6 th, 2010, covering all consumer classes. Factoring all financial adjustments already included in EDP Escelsa s tariffs, associated to the tariff recoveries for previous periods, the average readjustment in electricity energy tariffs will be 10.01%. On October 6 th, 2009, Aneel irrevocably ratified the second periodic tariff review for EDP Bandeirante (period from October 2007-October 2011). 88

89 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, 2009 Details of the changes ratified can be found on page 22, in the section Subsequent Events. On October 20 th, 2009, Aneel ratified the average tariff readjustment for EDP Bandeirante at 5.46% for the period from October 23 rd, 2009 to October 22 nd, 2010, covering all consumer classes. Taking into account financial adjustments already included in the tariffs of EDP Bandeirante, associated to tariff recoveries for previous periods, the average readjustment in electricity tariffs will be 1.02%. Details of the changes ratified can be found on page 23, in the section Subsequent Events. The following table shows the average tariff by class and distributor for the period: Average Tariff (R$/MWh) 3Q09 3Q08 Chg. BANDEIRANTE Residential % Industrial % Commercial % Rural % Other % Average - Final Customer % ESCELSA Residential % Industrial % Commercial % Rural % Other % Average - Final Customer % Revenue less ICMS tax, RTE and PIS/Cofins. - Consolidated energy balance Energy volume demanded by the distribution system comprising EDP - Energias do Brasil s concessionaires amounted to 6,280 GWh in 3 Q09. Of this total, 60% was allocated to Bandeirante and 40% to Escelsa. Retail supply, consumption for own use and wholesale delivery accounted for 3,443 GWh, while energy in transit, delivered to free customers, was 2,015 GWh. 3Q09 - ENERGY BALANCE (MWh) Itaipu Transmission Losses Wholesale Delivery 1,128,415 92,198 Required 112,128 Auction Losses from Itaipu Retail Supply 2,103,573 26,554 3,330,493 ( - ) = Energy Others Short Term Sales Losses and Diferences 1,246,850 95, ,270 Energy in Transit Short Term Adjustments 6,279,938 Energy in Transit 2,015, ,015,048 89

90 PERFORMANCE COMMENTS TO THE QUARTERLY FINANCIAL INFORMATION SEPTEMBER 30, Losses Total losses and differences in the distribution of electricity, expressed as an average percentage of the total demand for energy, in the period reported stability in relation to June 2009 (see right hand graph). Electricity Losses average of the last 12 months 12.2% 12.0% 12.5% 12.4% 12.4% 5.6% 5.4% 5.8% 5.7% 5.9% 6.6% 6.6% 6.7% 6.7% 6.5% Sep 2008 Dec 2008 Mar 2009 Jun 2009 Sep 2009 Technical Commercial Commercial Losses average of the last 12 months 5.5% 5.8% 5.9% 5.9% 5.5% 5.8% 5.9% 5.2% Bandeirante Escelsa Dec/08 Mar/09 Jun/09 Sep/09 GWh or % Bandeirante Escelsa 1Q09 2Q09 3Q09 ANEEL 1Q09 2Q09 3Q09 ANEEL Input of Energy in Network (A) 15,054 14,848 14,715-9,758 9,352 9,185 - Technical (B) Commercial (C) Total (B + C) 1,650 1,584 1,612 1,558 1,450 1,418 1,354 1,198 Technical (B / A) 5.19% 5.13% 5.09% 4.97% 9.07% 9.26% 8.83% 7.20% Commercial (C / A) 5.77% 5.54% 5.86% 5.42% 5.79% 5.91% 5.92% 5.05% Total (B+C / A) 10.96% 10.67% 10.96% 10.39% 14.86% 15.17% 14.75% 12.25% Commercial losses at Bandeirante reported an increase of 0.3 p.p. while Escelsa remained practically at the same level relative to June At both distributors, there was a decline in physical volume of technical losses as well as in percentage terms, this in spite of the reduction in energy distributed to final industrial customers. 90