4Q14. Net Income increases 25.2% in Q14 Highlights

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1 Net Income increases 25.2% in 2014 São Paulo, March 05, 2015 Alupar Investimento S.A. (BM&FBovespa: ALUP11), discloses today its 4Q14 results. The quarterly information (ITR) and standardized financial statements (DFP) are presented in accordance with the accounting practices adopted in Brazil, in compliance with the provisions of Brazilian Corporate Law, International Financial Reporting Standards (IFRS) and the standards issued by the Accounting Pronouncements Committee (CPC). 4Q14 Conference Calls: March 06 English 3:00 p.m. (Brasília) 1:00 p.m. (US EST) Phone: +1 (412) Code: Alupar Replay: +1 (412) Code: Portuguese 2:00 p.m. (Brasília) 12:00 p.m. (US EST) Phone: +55 (11) Code: Alupar Replay: +55 (11) Code: Alupar IR Contact José Luiz de Godoy Pereira IRO Luiz Coimbra IR Coordinator Kassia Orsi Amendola IR Analyst Tel.: +55 (011) Q14 Highlights Corporate Result (IFRS): In 2014, Alupar posted Net Income of R$362.8 million, 25.2% higher than the R$289.9 million recorded in Fourth-quarter Net Income totaled R$114.6 million, 68.6% more than the R$68.0 million recorded in 4Q13. EBITDA came to R$1,088.9 million in 2014, 8.8% higher than the R$1,001.1 million posted in In 4Q14, EBITDA amounted to R$301.6 million, a 20.9% improvement over the R$249.3 million recorded in 4Q13. Adjusted Net Revenue came to R$1,343.5 million in 2013, 11.4% up on the R$1,206.4 million recorded in In 4Q14, Adjusted Net Revenue totaled R$392.4 million, 22.2% more than the R$321.1 million recorded in 4Q13. Regulatory Result: In 2014, Alupar posted Net income of R$287.7 million, 35.5% higher than the R$212.4 million recorded in Fourth-quarter Net income totaled R$114.0 million, 109.8% more than the R$54.3 million recorded in 4Q13. EBITDA came to R$1,055.6 million in 2014, 16.1% higher than the R$909.1 million posted in In 4Q14, EBITDA amounted to R$303.8 million, a 29.7% improvement over the R$234.2 million recorded in 4Q13. Net Revenue came to R$1,297.8 million in 2014, 16.8% up on the R$1,111.1 million recorded in In 4Q14, Net Revenue totaled R$388.1 million, 32.7% more than the R$292.3 million recorded in 4Q13. Authorization for the commercial start-up of the Ferreira Gomes HPP s 84-MW second generation unit ( GU2 ), totaling, jointly with GU1, assured energy of average-mw, anticipating by 73 days the commercial start-up in relation to the date estimated in the Concession Agreement, February Alupar s withdrawal from the SINOP HPP, through the sale to Usina Termelétrica Norte Fluminense S.A. of all the shares held in Companhia Energética SINOP S.A. Live webcast: Price on 03/05/2015 ALUP11: R$17.81 Total no. of UNITS¹: 208,300,600 Market Cap: R$3.710 billion (1) Equivalent Units Sale of the interest in the Fortim Complex to Furnas Centrais Elétricas S.A., comprising the companies Energia dos Ventos V, VI, VII, VIII and IX. The sale of the interest was formalized by a contract of celebration to purchase and sale the shares on the date of December 23, 2014, which is subject to a condition precedent effectiveness of obtaining prior approval by the Department of Coordination and Control of State Companies -DEST. Concluded the acquisition of the equity interest of each of the companies of the Aracati Complex, composed by Energias dos Ventos I, II, III, IV and X. The shares were acquired by the amount of R$ 47,451, With the conclusion the company holds 99.99% of the equity interest of each of the companies of the Aracati Complex. 1 33

2 Key Consolidated Indicators Key Indicators "CORPORATE LAW (IFRS)" R$ MM Var.% 4Q14 4Q13 Var.% Adjusted Net Revenue 1, , % % EBITDA (CVM 527) 1, , % % Adjusted EBITDA Margin 81.0% 83.0% (2.0 p.p) 76.9% 77.7% (0.8 p.p) Financial Results (242.6) (182.2) 33.1% (74.5) (44.9) 65.7% Consolidated Net Income % % Subsidiaries' Minority Interest % (17.8%) Net Income Alupar % % Earnings per UNIT (R$)* % % Net Debt** 3, , % 3, , % Net Debt / Ebitda*** Key Indicators "REGULATORY" R$ MM Var.% 4Q14 4Q13 Var.% Net Revenue 1, , % % EBITDA (CVM 527) 1, % % Adjusted EBITDA Margin 81.3% 81.8% (0.5 p.p) 78.3% 80.1% (1.8 p.p) Financial Results (242.6) (182.2) 33.1% (74.5) (44.9) 65.7% Consolidated Net Income % % Subsidiaries' Minority Interest % (27.3%) Net Income Alupar % % Earnings per UNIT (R$)* % % Net Debt** 3, , % 3, , % Net Debt / Ebitda*** * Net Income / Units Equivalents (208,300,600) ** Including Securities under Non Current Assets ***Annualized EBITDA Notes: 1) Adjusted concept in the corporate law numbers: According to IFRS (ICPC 01 and IFRIC12), investments (Capex) by transmission companies must be recognized as revenue and cost. However, since we are dealing with investments and, in Alupar s case, since there is no effect on the Company s result (revenue and cost being equal, giving a zero margin), for analytical reasons we have disregarded this effect when analyzing the Company s revenues. The three main effects are figures relating to Adjusted Net Revenue (Net Revenue less Infrastructure Revenue, or Capex), Adjusted Operating Costs (same as the Revenue concept), and Adjusted EBITDA Margin (EBITDA divided by Adjusted Net Revenue). 2) Regulatory concept: This refers to the figures in the regulatory financial statements of our subsidiaries, whose main difference is the non-application of ICPC 01 (IFRIC 12). ICPC 01 has a material impact on our transmission segment companies with the creation of the Financial Assets account and the elimination of the Fixed Assets account in the balance sheet and several changes in the presentation of Revenue in the Statement of Income. 3) GSF: The Generation Scaling Factor (GSF) can be regarded as a percentage of energy that all participants in the MRE (Energy Reallocation Mechanism) generate in relation to the MRE s total guaranteed power (or assured energy) output in a given month. When the GSF is lower than 100%, MRE participants are generating less energy than their total guaranteed output. This deficit, usually due to hydrological risk, results in an exposure, which is apportioned in accordance with the guaranteed output of each participant. As a result, each generator is required to purchase the missing MWh to cover their exposure and comply with their respective contracted energy supply at the Difference Settlement Price (PLD) determined by the Electricity Trading Board (CCEE). When the system is operating normally under typical hydrological conditions, this effect is not expected to be of sufficient importance as to deserve a special mention in the Company s results. However, the recent unfavorable hydrological scenario, especially in 4Q14, resulted in a higher GSF-related cost. 2 33

3 Overview Alupar Investimento S.A. is a privately-held Brazilian holding company operating in the electricity transmission and generation segments, whose corporate purpose is to construct and operate infrastructure projects related to the energy sector in Brazil and other selected Latin American countries with economic, institutional and regulatory stability. Alupar is one of the largest companies in the Brazilian transmission segment in terms of Annual Permitted Revenue (RAP) and the largest one under private national control. The Company s ownership structure is shown below: Alupar seeks to maximize shareholder returns through moderate financial leverage and a debt profile compatible with the lowrisk nature of its business, high revenue predictability and the strong operating cash flow typical of the electricity transmission and generation segments. Alupar s corporate credit ratings reflect this solid capital structure and predictable strong cash flow: AA+ (bra) from Fitch Ratings for national scale. Fully committed to creating value for its shareholders and society as a whole, Alupar is a socially responsible company with substantial technical ability and strong financial discipline, enabling it to continue growing in a sustainable manner through the development of generation and transmission system projects. 3 33

4 Transmission Alupar retains an interest in 21 transmission system concessions, with a term of 30 years and a total extension of 5,703 km of transmission lines, 5,503 km of which in Brazil and 200 km in Chile. In Brazil, it is part of 20 such concessions, 18 of which operational and two are in the implementation phase, scheduled for commercial start-up in The main features of Alupar s transmission assets are shown below: Company Concession Term Beginning of Line RAP / RBNI RAP / RBNI RAP / RBNI Beginning End Operations Expansion (Cycle ) (Cycle ) (Cycle ) Index ETEP 06/12/ /12/ /25/ km R$ 72.8 R$ 77.4 R$ 83.4 IGP-M ENTE 12/11/ /11/ /12/ km R$ R$ R$ IGP-M ERTE 12/11/ /11/ /15/ km R$ 37.6 R$ 39.9 R$ 43.0 IGP-M EATE 06/12/ /12/ /10/ km R$ R$ R$ IGP-M ECTE 11/01/ /01/ /26/ km R$ 70.6 R$ 75.0 R$ 80.9 IGP-M STN 02/18/ /18/ /01/ km R$ R$ R$ IGP-M Transleste 02/18/ /18/ /18/ km R$ 30.3 R$ 32.2 R$ 34.7 IGP-M Transudeste 03/04/ /04/ /23/ km R$ 18.7 R$ 20.0 R$ 21.5 IGP-M Transirapé 03/15/ /15/ /23/ km R$ 16.8 R$ 23.3 R$ 25.2 IGP-M STC 04/27/ /27/ /08/ km R$ 30.1 R$ 32.0 R$ 34.0 IPCA Lumitrans 02/18/ /18/ /03/ km R$ 19.8 R$ 21.0 R$ 22.7 IGP-M ETES 04/20/ /20/ /12/ km R$ 11.1 R$ 11.9 R$ 12.1 IPCA EBTE 10/16/ /16/ /11/ km R$ 33.1 R$ 36.7 R$ 39.0 IPCA TME 11/19/ /19/ /22/ km R$ 33.4 R$ 35.6 R$ 37.8 IPCA ESDE 11/19/ /19/ /22/2014 Substation R$ 10.5 R$ 10.8 R$ 11.5 IPCA ETEM 07/12/ /12/ /16/ km R$ 10.0 R$ 10.7 R$ 11.4 IPCA ETVG 12/23/ /23/ /23/2012 Substation R$ 3.4 R$ 3.6 R$ 3.8 IPCA TNE 01/25/ /25/2042 Pre-Oper. 715 km R$ R$ R$ IPCA ETSE 05/10/ /10/ /01/2014 Substation R$ 14.8 R$ 15.8 R$ 16.8 IPCA Transchile 06/16/2005 Perpetual 01/21/ km R$ 15.2 R$ 15.8 R$ 18.3 CPI-USA ELTE 09/05/ /05/2044 Pre-Oper. Substation+38km - R$ 28.9 R$ 28.9 IPCA TOTAL 5,703 km R$ 1,175.6 R$ 1,284.4 R$ 1,379.2 *US$ = 2.60 See below the evolution of the Company s transmission lines km: 4 33

5 Generation Alupar is currently involved in generating electricity by means of HPPs (hydroelectric power plants) SHPPs (small hydroelectric power plants) and wind farms in Brazil, Colombia and Peru. Its total asset portfolio has an installed capacity of MW in operation and MW under construction. The Company is also prospecting and developing generation projects totaling more than 3,000 MW. The main features of Alupar s generation assets are shown below: Concession Beginning of Voting Total Installed Assured Beginning End Operations Capital Capital Capacity - MW Beginning Queluz Apr/04 Apr/34 Aug/ % 55.00% Lavrinhas Apr/04 Apr/34 Sep/ % 55.00% Foz do Rio Claro Aug/06 Aug/41 Aug/ % 50.01% São José - Ijuí Aug/06 Aug/41 Mar/ % 50.01% Ferreira Gomes Nov/10 Nov/45 Nov/ % % Energia dos Ventos Dec/11 Dec/46 Pre-Oper % 99.99% Morro Azul (Risaralda) Jan/09 Perpetual Pre-Oper % 99.89% Verde 08 Nov/12 Nov/42 Pre-Oper % 99.90% La Virgen Oct/05 Perpetual Pre-Oper % 65.00% Água Limpa - - Pre-Oper % % TOTAL Below we present the evolution of the Company s generating capacity: 800 Expansão Generation da Capacity Capacidade Evolution de Geração (MW) (MW) * Ijuí Queluz Lavrinhas 2011 Ferreira Gomes * HPP Foz do Rio Claro 2014 Ferreira Gomes 2015 Morro Azul Energia dos Ventos La Virgen 2016 Verde 8 Água Limpa

6 Combined Performance Analysis Transmission Segment The figures below reflect the combined results (100%) of all the transmission subsidiaries in which Alupar holds an interest, as presented in Note 37 to the 2014 financial statements, under Information by Segment. Due to the matters already addressed regarding differences between Regulatory and Corporate Law figures (see the Notes on page 2 of this report), the analysis of the transmission segment focuses on the Regulatory performance, except for the comments on revenue and income in the Corporate Law income statement.. Key Indicators "CORPORATE LAW (IFRS)" R$ MM Var.% 4Q14 4Q13 Var.% Adjusted Net Revenue 1, , % % Adjusted Operating Costs* (87.0) (91.3) (4.7%) (23.4) (35.8) (34.7%) Depreciation / Amortization (7.1) (5.8) 22.4% (1.9) (1.6) 21.1% Operating Expenses (42.0) (39.2) 7.3% (14.5) (13.3) 8.8% EBITDA (CVM 527) 1, % % Adjusted Ebitda Margin 88.8% 88.3% 0.5 p.p 87.0% 83.1% 3.9 p.p Financial Results (164.0) (119.3) 37.4% (54.5) (31.2) 74.8% Net Income % (5.5%) Net Debt** 2, , % 2, , % Net Debt / EBITDA*** Key Indicators "REGULATORY" R$ MM Var.% 4Q14 4Q13 Var.% Net Revenue 1, % % Operating Costs (83.5) (75.6) 10.5% (22.0) (20.0) 10.0% Depreciation / Amortization (119.0) (112.7) 5.6% (30.8) (28.5) 8.1% Operating Expenses (42.0) (39.1) 7.4% (14.4) (13.3) 8.6% EBITDA (CVM 527) % % Ebitda Margin 88.2% 88.5% (0.3 p.p) 86.7% 87.1% (0.4 p.p) Financial Results (164.0) (119.3) 37.4% (54.5) (31.2) 74.8% Net Income % (6.5%) Net Debt** 2, , % 2, , % Net Debt / EBITDA*** *Adjusted Operating Costs: excluding infrastructure costs ** Including Securities under Non-Current Assets *** Annualized EBITDA 6 33

7 Transmission - Combined Performance Analysis Regulatory Net Revenue Net revenue totaled R$1,062.6 million in 2014, 6.8% higher than the R$995.3 million recorded in 2013, due to (i) the increase in Annual Permitted Revenue (RAP), pursuant to resolution 1,756, of June 24, 2014, which established increases of 6.37% and 7.84% for contracts indexed to the IPCA consumer price index and the IGP-M general price index, respectively. For further information, see the table in the Transmission section (page 4); and (ii) the full operational start-up of the ESDE transmission unit (1Q14), with a positive variation of R$5.7 million. Cost of Services The cost of services came to R$79.1 million in 2014, 11.2% more than the R$71.1 million recorded in 2013, chiefly due to (i) the operational start-up of ESDE, with an impact of R$1.1 million; (ii) consulting, maintenance, environment and access recovery and line conservation services of the TME, EBTE and Lumitrans transmission lines, with an impact of R$2.9 million; (iii) maintenance in the Blumenau substation, ECTE, with an impact of R$0.9 million; and (iv) inflationary adjustments. Operating Expenses Operating expenses amounted to R$44.3 million in 2014, 13.4% higher than the R$39.1 million recorded in 2013, chiefly due to (i) the R$2.3 million increase in depreciation/amortization, as a result of the account reclassification (Costs/Expenses) in the EATE transmission company; and (ii) the R$2.7 million upturn in the personnel and management line, chiefly due to the salary increase in accordance with the collective bargaining agreements. 7 33

8 EBITDA and EBITDA Margin EBITDA came to R$937.1 million in 2014, 6.4% up on the R$880.6 million recorded in 2013, chiefly due to the revenue upturn, fueled mostly by the RAP increase, as mentioned in the Net Revenue section. The EBITDA margin reached 88.2%, versus 88.5% in

9 Net Income Net income totaled R$582.9 million in 2014, 5.9% higher than the R$550.6 million recorded in In addition to the factors mentioned above, net income was impacted by (a) the increase of R$44.6 million in the financial result, led by (i) the increase in the average interbank CDI rate, from 8.02% in 2013 to 10.77% in 2014 and (ii) the debentures issued by the transmission companies EATE, ETEP, ENTE, STN and Transleste, totaling R$632.0 million, in August 2014, with remuneration equivalent to % of the average interbank CDI rate; and (b) the reduction of R$26.7 million in corporate income and social contribution taxes, chiefly due to the change in the tax regime to presumed income at ETEP and ECTE as of 2014, with an impact of (-) R$26.3 million. In 4Q14, corporate income and social contribution taxes decreased by R$3.6 million, chiefly due to the reduction in the taxable base as a result of the payment of interest on equity at EATE (R$24.3 million) and ENTE (R$11.1 million) in 4Q13, which was non-recurring in 4Q14. The chart below gives a breakdown of net income: 9 33

10 Transmission - Combined Income and Revenue Analysis Corporate Law (IFRS) With the adoption of IFRS, the Revenue for Provision (RAP PV) was replaced by 3 new revenue categories: Infrastructure Revenue, Power Transmission Revenue (O&M) and Revenue from Remuneration of the Concession Asset. Infrastructure Revenue Transmission Revenue Asset Remuneration Investment volume (CAPEX) in the transmission companies Revenue that remunerates the operational and maintenance costs of the transmission assets The remuneration rate of a given transmission asset multiplied by the balance of its financial asset Consequently, transmission company balance sheets now contain a Financial Asset account, whose transactions are set forth according to the following example: Financial Asset on December 31, Infrastructure Revenue from 01/01/2014 to 12/31/ Financial Asset Remuneration from 01/01/2014 to 12/31/ O&M Revenue from 01/01/2014 to 12/31/ RAP from 01/01/2014 to 12/31/ Residual Value received from 01/01/2014 to 12/31/2014 = Financial Asset on December 31, 2014 Note on residual value: if there is an inflow of funds related to possible indemnification resulting from the termination of the concession, this amount will also reduce the Financial Assets. In Alupar s case, its subsidiaries concessions have exceptionally long terms, the first of which maturing in November

11 Adjusted Net Revenue Adjusted net revenue moved up by 3.3%, mainly as a result of the increase of R$49.4 million in revenue from financial asset remuneration, in turn due to investments in the projects under implementation, which expanded the financial asset base and contributed to a positive variation in this line. Net Income Net income totaled R$781.4 million in 2014, 7.6% higher than the R$726.2 million recorded in In addition to the factors mentioned above, net income was impacted by (a) the reduction in corporate income and social contribution taxes, chiefly due (i) the R$53.5 million decline in deferred corporate income and social contribution taxes at EATE, as a result of the recalculation of the average rate from 34% to 25%, due to the tax benefit obtained for ten years; (ii) the change in the tax regime to presumed income at ETEP and ECTE as of 2014, with an impact of (-) R$62.0 million, R$25.3 million of which in current corporate income and social contribution taxes and R$36.7 million in deferred corporate income and social contribution taxes, due to the recalculation of the average rate from 34% to 15.85%, which led to a reversal of the provision and; (iii) a reversal of the provision for deferred corporate income and social contribution taxes at EBTE in 1Q13, as a result of the change in the tax regime to presumed income in 2013, with an impact of (+) R$28.0 million; and (b) the increase of R$44.6 million in the financial result, due to (i) the increase in the average interbank CDI rate, from 8.02% in 2013 to 10.77% in 2014; (ii) the debentures issued by EATE, ETEP, ENTE, STN and Transleste totaling R$632.0 million, in August 2014, with remuneration equivalent to % of the average interbank CDI rate

12 Operating Indicators Transmission Alupar s transmission companies recorded a consistent operating performance throughout 2014, maintaining physical availability of above 99.6%. VP shows the impact of unavailability on the company s results The line s physical availability is an operational indicator that demonstrates the percentage of hours the line was available during a given period. Project in Progress: Transmission Companies being Implemented Extension (km) RAP (R$ MM) Estimated Investment (R$ MM) Investment Made (R$ MM) Estimated Start-up (Regulatory) Estimated Start-up (Management) TNE* ,100.0** ELTE * Total investment. This project is 51% owned by Alupar and 49% by Eletronorte. ** Initial investment in the amount of R$ in September 2011, updated by the IPCA consumer price index. TNE: This project has suffered a justifiable and documented change in its implantation schedule, due to delays in the environmental licensing process, especially in relation to the indigenous matters. With the finalization of the indigenous aspect study in February 2014, TNE s environmental licensing schedule was resumed. This way, in March 2014, the Environmental Impact Study (EIA) and Environmental Impact Report (RIMA) were duly filed with IBAMA. In April 2014, the agency accepted the document and opened within 45 days to request public hearings, which was held in the period of June 7, to June 11, IBAMA has received no obstacles of the agencies involved in the licensing process, except FUNAI. We expect operational start-up in the first semester of Despite the fact that TNE will begin its operations after the date specified by the regulatory authority, we do not expect any relevant adverse impact on the project s profitability, given management s strong cash flow management efforts, adjusting project disbursement flows in relation to the original schedule. This system will connect the state of Roraima to the National Interconnected System (SIN), via the Lechuga substation, in the state of Amazonas, with an extension of around km of 500 kv line in a double circuit, with two substations; Equador substation 500 kv, to be installed in the city of Rorainópolis (RR) and Boa Vista substation 500/230 kv 800 MVA, in the city of Boa Vista (RR). The Boa Vista substation is partially energized, being the start-up scheduled to March 2015, generating a revenue equivalent to 4% of the project s total RAP (Annual Permitted Revenue). ELTE (Lot C): This company holds a concession for electricity transmission from 345/138 kv Domênico Rangoni and 230/88kV Manoel da Nobrega substations, with 38 km of transmission line. The project will be connected to the National Interconnected System (SIN) and will strengthen the distribution networks, in addition to meeting the increased demand for electricity from Santos region, comprising nine districts (Bertioga, Cubatão, Guarujá, Itanhaém, Mongaguá, Peruíbe, Praia Grande, Santos and São Vicente). The term of implementation is 36 months as of September 2014, signature date of the concession contract

13 Generation - Combined Performance Analysis Corporate Law (IFRS) The figures below reflect the combined results (100%) of all the generation subsidiaries in which Alupar holds an interest, as presented in Note 37 to the 2014 financial statements, under Information by Segment. Unlike in the transmission segment, the adoption of ICPC 01 has had no material effects on the corporate figures vis-à-vis the regulatory figures. Thus, the regulatory and corporate performance analyses are basically the same. Key Indicators "CORPORATE LAW (IFRS)" R$ MM Var.% 4Q14 4Q13 Var.% Net Revenue % % Operating costs (35.9) (27.4) 30.7% (12.6) (4.2) 201.4% Depreciation / Amortization (35.6) (33.4) 6.4% (10.7) (8.4) 28.1% Energy Purchase (65.7) (28.3) 132.1% (24.6) (3.6) - Operating Expenses (19.1) (12.9) 48.7% (6.8) (4.1) 64.2% EBITDA (CVM 527) % % Ebitda Margin 58.3% 62.2% (3.9 p.p) 65.9% 76.0% (10.1 p.p) Financial Result (41.4) (45.6) (9.0%) (10.9) (11.1) (2.3%) Net Income / Loss % % Net Debt* 1, , % 1, , % Net Debt / EBITDA** * Includes Securities under Non-Current Assets **Annualized EBITDA 13 33

14 Net Revenue Net revenue totaled R$288.9 million in 2014, 59.4% higher than the R$181.3 million recorded in 2013, due to (i) the seasonalization strategy in 1Q14, with a positive impact of R$34.3 million; and (ii) the commercial start-up of the first and second generation units of the Ferreira Gomes HPP, both with 84 MW of installed capacity, anticipating, by 56 and 73 days, respectively, the estimated commercial start-up dates in the concession agreements, being remunerated by the Difference Settlement Price - PLD (North Submarket) on the energy actually generated in the period, with a positive impact of R$87.7 million. Gross revenue from generation companies is broken down below: Invoiced Average Gross Revenue Energy (GWh) Price (R$/MWh) (R$ million) 1. Long Term - Revenues of Bilateral Contracts ACR (Long Term Contract) ACL (Short Term Contract) SPOT / Others CCEE SPOT / Others CCEE (Seasonalization) SPOT / Others CCEE (Ferreira Gomes Settlement) SWAP TAXES (ICMS) 3.5 TOTAL Cost of Services The cost of services came to R$136.7 million in 2014, R$47.6 million up on the R$89.1 million recorded in 2013, as a result of: (a) the increase in energy purchases, from R$28.3 million in 2013 to R$65.7 million in 2014, due to (i) energy purchases totaling R$17.1 million, as a result of the seasonalization operation in 1Q14, with the cost of R$7.3 million recorded in 4Q14; (ii) the purchase of 7 average-mw in 2Q14 that totaled R$23.4 million, with the purpose of reducing the impact of the GSF on the Company s result, R$10.1 million of which recorded in 4Q14; (iii) SWAP operation in the SHPPs, impact of R$1.5 million; (iv) exposure to the GSF, totaling R$25.7 million, R$8.3 million of which recorded in 4Q14; and (v) PIS/COFINS credit that totaled R$2.0 million, being R$1.0 million registered in 4Q14; and (b) the R$7.8 million increase in the electric grid usage charge - CUST, due to the operational start-up of the Ferreira Gomes HPP, with an impact of R$5.8 million; and (c) the R$1.8 million upturn in depreciation/amortization following the operational start-up of the Ferreira Gomes HPP

15 Operating Expenses Operating expenses totaled R$19.5 million in 2014, R$6.6 million higher than the R$12.9 million recorded in 2013, due to (a) the increase of R$4.1 million in general and administrative expenses, following the implementation of the La Virgen and Risaralda HPPs and the Aracati wind farm complex, totaling R$7.1 million in 2014, versus R$1.7 million in 2013 (it is worth mentioning that G&A expenses fell by R$1.7 million in the operational plants, thanks to the Company s ongoing efforts to increase profitability in the generation segment); and (b) the upturn of R$2.6 million in personnel and management, chiefly due to the implementation of the La Virgen and Risaralda HPPs, with an impact of R$2.4 million. EBITDA and EBITDA Margin In 2014, EBITDA came to R$168.3 million, 49.3% higher than the R$112.7 million recorded in 2013, while the EBITDA margin stood at 58.3%, versus 62.2% in The upturn in EBITDA was chiefly due to the R$110.8 million increase in gross revenue, in turn a result of (i) the seasonalization strategy and (ii) the early operational start-up of the Ferreira Gomes HPP. Fourth-quarter EBITDA grew by 126.4% from R$37.6 million in 4Q13 to R$85.0 million, chiefly due to the early start-up of the Ferreira Gomes HPP, which generated revenue of R$87.7 million in the period. EBITDA Composition 2014 (R$ MM) (3.1) (8.4) (37.4) (4.1) (2.5) EBITDA 2013 Gross Revenue Deductions Operating Costs Energy Purchased for Resale General and Administrative Personnel and Management Other Revenues / Expenses EBITDA

16 Net Income In 2014, the generation segment recorded net income of R$82.2 million, 184.0% higher than the R$29.0 million recorded in Net Income Composition 4Q14 (R$ MM) 47.5 (2.3) 0.3 (1.1) Operating Indicators Net Income 4Q13 EBITDA Depreciation / Amortization Financial Result Income Tax and Net Income 4Q14 Social Contribution Availability below 100% was the result of stoppages for annual preventive maintenance of the equipment and contractual maintenance scheduled with the supplier. In terms of generated energy, the four hydroelectric power plants combined generated less energy than the assured energy, chiefly due to unfavorable water inflows at the Foz do Rio Claro HPP and the Queluz and Lavrinhas SHPs, only the São José HPP (Ijuí), in the South region, recorded a favorable water inflow in 4Q

17 Project in Progress: Generation Companies Installed Capacity (MW) Assured Energy (MW) Estimated Investments (R$ MM) Investments Completed (R$ MM) Estimated Startup (Regulatory) Energia dos Ventos Estimated Start-up (Management) Risaralda N/A 2016 Verde Água Limpa La Virgen N/A 2016 Energia dos Ventos: Energia dos Ventos is a cluster established to implement ten wind farms in the municipalities of Aracati and Fortim in Ceará, resulting from the sale of MW in the 07/2011 auction held in December 2011 by ANEEL. However, in October 2014, Alupar won the bid for the sale of the interests held by Furnas in the Aracati Complex, comprising five wind farms, Energia dos Ventos I, II, III, IV and X. In March 2015, Alupar had concluded the acquisition of the equity interest of each of the companies of the Aracati Complex, with the conclusion the company holds 99.99% of the equity interest of each of the companies. Additionally, the sale of the interest in the Fortim Complex to Furnas was formalized by a contract of celebration to purchase and sale the shares on the date of December 23, 2014, which is subject to a condition precedent effectiveness of obtaining prior approval by the Department of Coordination and Control of State Companies - DEST. The Aracati Complex project is on schedule. Regarding environmental licensing, the installation license (IL) of the Pitombeira substation was granted in September 2014, as well as the preliminary license (PL) of the five wind farms. The installation licenses will be granted in line with the project s original schedule, in 1Q15. Regarding the works, the main agreements have already been entered into. SS&B is the contractor responsible for constructing the wind farms' works and the access ways; Siner is responsible for the substation construction works and electromechanical assembly; Toshiba and ABB are responsible for supplying the transformers and yard equipment and WEG is responsible for supplying the wind turbines. The project is expected to be concluded within the term established by ANEEL. Risaralda: Risaralda is an SPE established in October 2011 to develop and implement three SHPPs in Colombia, with a total installed capacity of 28 MW. In February 2014, we began construction of Morro Azul SHPP, with an installed capacity of 20.2 MW, and project improvements for Guática I and II are currently under study. The commercial start-up of the Morro Azul SHP is scheduled for 1H16. In 4Q14, the power house excavation was concluded, the intake tunnel works moved ahead and excavation is now 24% complete, and the river is being diverted. Verde 08: Verde 08 is an SPE constituted to develop and implement the Verde 08 SHPP, located in the municipality of Santa Helena de Goiás, in the state of Goiás, with an installed capacity of 30.0 MW and assured energy of 18.7 MW. The ANEEL 06/2013 auction sold 70% of the energy for 30 years, to be delivered as of January 2018 at R$130.00/MWh, adjusted throughout the concession by the IPCA consumer price index. Água Limpa: Água Limpa is an SPE constituted to develop and implement Água Limpa SHPP, located in the municipality of Antônio Dias, in the state of Minas Gerais, with an installed capacity of 23.0 MW and assured energy of 11.9 MW. The ANEEL 20/2013 auction sold 50% of the energy for 30 years, to be delivered as of May 2018 at R$138.00/MWh, adjusted throughout the concession by the IPCA consumer price index. La Virgen: La Virgen is an SPE constituted to implement La Virgen HPP, with an installed capacity of 64.0 MW and assured energy of 40.4 MW, located in the province of Chanchamayo, Peru, to be developed in accordance with Generation Concession Contract of October 7, 2005 and Transmission Concession Contract of June 11, 2008, entered into with the Ministry of Mines and Energy. In 4Q14, there was further progress with the intake tunnel works, the surface construction works, and the manufacturing of the generation island, while the environmental and archaeological monitoring services continued

18 Analysis of Consolidated Results IFRS Net Operating Revenue Alupar and its subsidiaries recorded adjusted net revenue of R$1,343.5 million in 2014, 11.4% up on the R$1,206.4 million recorded in Adopting IFRS criteria, 2014 net revenue came to R$1,474.1 million, 14.2% more than the R$1,290.8 million reported in However, adjusted net revenue grew less than net revenue solely due to the fact that, in accordance with IFRS standards, the entire volume of investments (Capex) by our transmission companies is recognized as revenue. Because it is an investment and has no effect on the Company s result (the same revenue amount being excluded in Cost infrastructure costs), we have disregarded this effect for analytical purposes, as detailed below: Adjusted Net Income (R$ MM) Var. % 4Q14 4Q13 Var. % Energy Transmission Revenue (6.3%) (33.9%) Infrastructure Revenue % % Remuneration of Concession Assets 1, % % Energy Supply % % Gross Revenue - IFRS 1, , % % Deductions % % Net Income - IFRS 1, , % % Exclusion of Infrastructure Revenue % % Adjusted Gross Revenue 1, , % % Adjusted Net Revenue 1, , % % The 11.4% upturn in adjusted net revenue in 2014 was due to: the 55.2% increase in energy supply revenue, which totaled R$311.5 million in 2014, versus R$200.7 million in 2013, in turn a result of (i) the early operational startup of the Ferreira Gomes HPP and (ii) the seasonalization strategy. For further information, please the see Generation Segment section. Net revenue under IFRS totaled R$1,474.1 million in 2014, 14.2% up on the R$1,290.8 million recorded in In addition to the above factors, this variation was due to the R$46.1 million increase in infrastructure revenue. For more details on changes in infrastructure revenue (Capex), see the Investments section below

19 Cost of Services Operating costs closed 2014 at R$345.8 million, 33.7% higher than the R$258.7 million reported in 2013, due to (i) the increase of R$37.4 million in the cost of energy purchased for resale, as explained previously in the Generation Segment section and (ii) the upturn of R$46.1 million in infrastructure costs. For more details on changes in infrastructure costs (Capex), see the Investments section below. The 2014 cash cost, excluding infrastructure costs (investments) and depreciation / amortization was equivalent to 13.4 % of adjusted net revenue, versus 11.6 % in Cost of Services Operating Expenses Operating expenses totaled R$78.0 million in 2014, 17.3% up on the R$66.5 million reported in This variation was mainly due to: Cost of Services R$ (MM) Var. % 4Q14 4Q13 Var. % Cost of Services Rendered (5.0%) (33.8%) Energy Purchased for Resale % Charges of Electric Grid - CUST % 7.1 (0.2) - Hydro Resources CFURH (1.6%) (39.9%) ANEEL Inspection Rate - TFSEE (9.3%) Infrastructure Cost % % Depreciation / Amortization % % Total % % Operating Expenses Operating Expenses R$ (MM) Var. % 4Q14 4Q13 Var. % General and Administrative % (14.7%) Personnel and Management % % Equity Equivalence (26.8) (20.4) 31.6% (8.0) (6.8) 17.3% Others Depreciation / Amortization Total % % (i) the increase of R$4.9 million in general and administrative expenses, R$4.1 million of which in the generation segment, as explained previously in the Generation Segment section and (ii) the upturn of R$7.7 million in the others line, chiefly due to the capital premium generated by the subscription of 31,811,311 new shares of the subsidiary La Virgen. This share subscription generated a capital premium, which was paid by the holding company and Alupar Peru, in the amount of R$1.8 million and R$9.2 million, respectively, recorded under other expenses. This capital premium is envisaged in the investment agreement, which states that for each capital increase to be held at La Virgen, up to the limit of US$35.0 million, the holding company and Alupar Peru will contribute an amount equivalent to 75% of the capital increase, but will be entitled to 65% of the shares to be issued. The investment agreement also establishes that, in capital increases between US$35.0 million and US$37.5 million, the holding company and Alupar Peru are responsible for contributing 70% of the total and will be entitled to 65% of the shares to be issued. For further information, see note 2.4 of the financial statements

20 EBITDA In 2014, EBIDA totaled R$1,088.9 million, 8.8% higher than the R$1,001.1 million reported in 2013, while the adjusted EBITDA margin, excluding infrastructure revenue, reached 81.0%, versus 83.0% in The EBITDA increase in 2014 was chiefly due to the early start-up of the Ferreira Gomes HPP and the seasonalization strategy, which together generated revenue of R$121.9 million in The 2.0 p.p. decline in the EBITDA margin was mainly a result of energy purchases, as detailed in the Generation Segment section. EBITDA (R$ MM) Var. % 4Q14 4Q13 Var. % Adjusted Gross Revenue 1, , % % Deductions % % Adjusted Net Revenue % % Operating Costs (114.2) (111.4) 2.5% (33.0) (38.6) (14.3%) Energy Purchase (65.7) (28.3) 132.1% (24.6) (3.6) - Operating Expenses (101.6) (86.0) 18.1% (41.2) (36.4) 13.0% Equity Equivalence % % EBITDA 1, , % % EBITDA Margin 81.0% 83.0% (2.0 p.p) 76.9% 77.7% (0.8 p.p) The chart below gives a breakdown of EBITDA: 20 33

21 Financial Result In 2014, the financial result totaled R$242.6 million, 33.1% up on the 2013 figure of R$182.2 million. This variation was chiefly due to the R$64.9 million increase in financial expenses, as a result of (i) the upturn in the average interbank CDI rate, which moved up from 8.02% in 2013 to 10.77% in 2014 and is applied to 42.0% of the Company s consolidated debt; and (ii) the debentures issued by the transmission companies EATE, ETEP, ENTE, STN and Transleste, totaling R$632.0 million, in August, 2014, with remuneration equivalent to % of the average interbank CDI rate

22 Net Income Net income stood at R$362.8 million in 2014, 25.2% higher than the R$289.9 million recorded in In addition to the previously mentioned factors, this positive variation was the result of (a) the increase of R$87.8 million in EBITDA, caused mainly by (i) the early startup of the Ferreira Gomes HPP, and (ii) the seasonalization strategy adopted in 1Q14, as explained in the Generation Segment section; and (b) the reduction in corporate income and social contribution taxes, chiefly due to (i) the decline of R$53.5 million in deferred corporate income and social contribution taxes at EATE, as a result of the tax benefit obtained for ten years; (ii) the change in the tax regime to presumed income at ETEP and ECTE as of 2014, with an impact of (-) R$62 million; and (iii) a reversal of the provision for deferred corporate income and social contribution taxes at EBTE in 1Q13, as a result of the change in the tax regime to presumed income in 2013, with an impact of (+) R$28.0 million, as detailed in the Transmission Segment section. Dividends On September 15, 2014, the Company s Board of Directors approved the distribution of interim dividends totaling R$99,984, from the profit reserves in the balance sheet dated December 31, 2013, properly ratified by the shareholders at the Extraordinary General Meeting held on October 2, Additionally on March 5, 2015, the Board of Directors recommended the distribution of R$ 249,960, of the profit of the fiscal year ended on December 31, 2014, to be approved at the Annual General Meeting to be held on April 15, Therefore, considering the distribution of dividends deliberate at the Company s Board of Directors on September 15, 2014 (which were not imputed to the minimum mandatory dividend for the fiscal year ended December 31, 2014) and the recommendation of the Board of Directors for distribution of dividends, amounting R$ 249,960, of profit for the year ended on December 31, Thus total shareholder payments will reach R$350.0 million, equivalent to R$1.68 per Unit. Dividends History (R$ million) and Payout Ratio (%) % 101.6% % % % 25.0% 25.0% %

23 Investments Investments in our companies totaled R$417.2 million in 2014, R$130.6 million of which in transmission, R$277.5 million in generation and R$9.1 million in new business development, versus R$582.7 million in 2013, R$84.5 million of which in transmission, R$491.4 million in generation and R$6.8 million in new business development. The investment upturn reflects the implementation of the plants Ferreira Gomes, La Virgen, Morro Azul and the Abdon Batista and Gaspar substations, managed by ETSE, as well as the reinforcements in the Irapé and Araçuaí substations, managed by Transirapé, as detailed below: Investments (R$ MM) Q14 4Q13 Transmission ESDE ETSE ENTE Transirapé Others Generation Ferreira Gomes Others Holding Total

24 Indebtedness Holding Company: The holding company s net debt closed 2014 at R$298.9 million, R$260.6 million more than the R$38.3 million recorded in December This variation was chiefly due to the decline of R$320.6 million in cash and cash equivalents, which totaled R$324.0 million in December 2014 versus R$644.6 million at the close of 2013, mainly as a result of the payment of dividends and investments in Ferreira Gomes and Energia dos Ventos. Total Debt Dec/14 Total Debt Dec/ Gross Debt Cash and Equivalents Net Debt 38.3 Gross Debt Cash and Equivalents Net Debt The holding company s gross debt closed 2014 at R$622.9 million, 8.8% less the R$682.9 million recorded in December Of the company s total gross debt, 93.6% is composed of debenture issues, 40% of which indexed to the CDI interbank rate and 60% to the IPCA consumer price index, with an extended maturity profile 30% due after For more information on the holding company s indebtedness, please see Notes 22 Loans and Financing and 23 Debentures of the 2014 financial statements. The chart below shows the holding company s debt profile: Controlling Debt Profile Dec/14 Controlling Debt Profile Dec/13 77% 23% 81% 19% Short Term Long Term Short Term Long Term 24 33

25 Consolidated: The gross debt of Alupar and its subsidiaries closed December 2014 at R$3,977.0 million, 21.1%, or R$693.9 million, higher than the R$3,283.1 million recorded in December 2013, while net debt stood at R$3,350.8 million, 39.3%, or R$944.9 million, more than the R$2,405.9 million reported at the close of Total Debt Dec/ Total Debt Dec/ , , , ,405.9 Gross Debt Cash and Equivalents Net Debt Gross Debt Cash and Equivalents Net Debt Short-term debt closed 2014 at R$541.1 million, 24.7% less the R$718.9 million recorded in December Consolidated Debt Profile Dec/14 Consolidated Debt Profile Dec/13 86% 14% 78% 22% Short Term Long Term Short Term Long Term Of the 22% of short-term debt, 24% or R$ million refers to bridge loan. Consolidated cash and cash equivalents closed 2014 at R$626.2 million, R$251.0 million down on the R$877.2 million recorded at the end of Of total consolidated debt, R$622.9 million refers to the holding company, as detailed above; R$3,291.1 million is allocated to the operational companies, with payment flows compatible with their respective cash flows; and R$63.0 million refers to projects under implementation, R$36.1 million of which to the Morro Azul SHP (Risaralda) and R$26.9 million to Alupar Peru for the implementation of the La Virgen HPP. Of total debt, R$1,689.7 million is for infrastructure projects (project finance) with development banks, indexed to the TJLP long-term interest rate. In December 2014, debenture issues corresponded to R$2,220.9 million, or 55.8% of total debt, R$582.8 million of which issued by the holding company and R$1,638.1 million by the subsidiaries EATE, ECTE, ENTE, ETEP, STN, Ferreira Gomes, Transirapé, Transleste and Transudeste. Only R$66.3 million, or 1.7% of the total, is denominated in foreign currency, R$3.3 million of which refers to financing in currency baskets from development banks and R$63.0 million for the implementation of generation projects in Peru and Colombia

26 Alupar s consolidated debt profile is highly extended, compatible with the low-risk nature of its business, and high revenue predictability and strong operating cash flow typical of the electricity transmission and generation segments

27 Capital Market Alupar was listed on the São Paulo Stock Exchange - BM&FBOVESPA on April 23, Its UNITS are traded under the ticker ALUP11 and each UNIT comprises one common share and two preferred shares. Alupar s UNITS were traded in all trading sections since its listing, with average daily traded volume of R$3.8 million. On March 05, 2015; Alupar s market cap was R$3.710 billion. Upcoming Events 4Q14 Results Conference Call Date: March 06, 2015 English 3:00 p.m. (Brasília) 1:00 p.m. (US EST) Phone: +1 (412) Code: Alupar Replay: +1 (412) Code: Portuguese 2:00 p.m. (Brasília) 12:00 p.m. (US EST) Phone: +55 (11) Code: Alupar Replay: +55 (11) Code: Alupar 27 33

28 APPENDIX 1 REGULATORY ASSET Controlling Consolidated 12/31/ /31/ /31/ /31/2013 CURRENT 453, , ,869 1,048,545 Cash and Cash Equivalents 114, , , ,054 Short-Term Investments 209, , , ,923 Marketable Securities ,127 3,336 Trade Accounts Receivable , ,818 Receivables from related parties Dividends to be received 43,185 31,397 4,299 - Interest on Equity - 1, Income tax and social contribution compensable 33,785 27,146 41,274 32,833 Other Taxes Recoverable 93-5,498 5,270 Advance for Suppliers ,429 9,469 Inventories ,604 Prepaid Expenses , Assets held for sale 45,521-45,521 - Other Assets 7,089 7,053 43,511 36,385 NON CURRENT 2,184,397 2,140,340 6,279,915 5,795,274 Trade Accounts Receivable ,632 21,167 Receivables from related parties - 4, Adavances for Future Capital Increases 205, , ,419 Marketable Securities ,573 73,899 Income tax and social contribution compensable - - 3,681 4,741 Taxes Recoverable ,743 28,084 Deferred Income and Social Contribution Taxes - - 1,269 1,269 Advance for Suppliers - - 2,394 2,426 Inventories Collaterals and Judicial Deposits 1,991 1,864 7,300 10,062 Other Assets ,047 3,176 Investments in associates and controlled jointly 187, , , ,516 Investments in controlled companies 1,694,085 1,609, Property to investiments 9,274 9,093 9,274 9,093 Fixed assets 4,351 1,275 5,721,386 5,310,595 Intangibles Assets 81,583 79, , ,827 TOTAL ASSET 2,638,230 2,852,076 7,269,784 6,843,

29 LIABILITIES Controlling Consolidated 12/31/ /31/ /31/ /31/2013 CURRENT 327, ,776 1,093,591 1,174,651 Loans and Financing 11,867 9, , ,677 Debentures 133, , , ,178 Suppliers 2,464 2,622 82,622 68,742 Salaries, vacation pay and social charges 1,061 1,354 11,152 10,732 Income and social contribution payable ,470 73,738 Other payable taxes ,152 18,871 Provision for assets built up ,056 22,504 Dividends payable 172, , , ,434 Environmental liability accrual ,465 25,872 Regulatory charges payable ,907 36,609 Provision for litigation Advances from customers ,527 Other liabilities 6,729 6,359 30,538 17,677 NON CURRENT 479, ,621 3,564,079 2,675,078 Loans and Financing 28,259 31,748 1,585,930 1,547,409 Debentures 449, ,073 1,849,705 1,016,816 Suppliers Advance for future capital increase - - 5,779 39,066 Taxes payable Deferred income and social contribution taxes - - 7,090 8,351 Provision for litigation 1,927 1,800 2,739 2,224 Advances from customers , Environmental liability accrual - - 9,292 13,650 Regulatory charges payable Provision for assets built up ,693 11,968 Other liabilities ,688 34,343 EQUITY 1,830,698 2,018,679 1,830,698 2,018,679 Capital Subscribed and Paid 1,625,227 1,625,227 1,625,227 1,625,227 (-) Expenses on Issue of Shares (34,569) (34,569) (34,569) (34,569) Capital Reserve 14,397 16,190 14,397 16,190 Income Reserves 132, , , ,279 Retained Earnings 77, ,265 77, ,265 Other Comprehensive Income 15,934 5,287 15,934 5,287 Non-controlling interest , ,411 Equity + non-controlling interest 1,830,698 2,018,679 2,612,114 2,994,090 TOTAL LIABILITIES AND EQUITY 2,638,230 2,852,076 7,269,784 6,843,