EDP Energias do Brasil reports 2Q14 EBITDA of R$ 430 million

Transcription

1 Earnings Release 2Q14 EDP Energias do Brasil reports 2Q14 EBITDA of R$ 430 million São Paulo, July 30, EDP ENERGIAS DO BRASIL S.A. ( EDP Energias do Brasil or Group ) traded on BM&FBovespa s Novo Mercado (Ticker Symbol: ENBR3), announces its financial results for the second quarter 2014 (2Q14). The information is presented on a consolidated basis in accordance with the accounting practices adopted in Brazil and the International Financial Reporting Standards (IFRS) based on revised financial information. The operating information has not been reviewed by the independent auditors. Total shares 476,415,612 Treasury shares 840,675 Free float (49%) Market Cap (06/30/2014) R$ 5,169 million Conference Call with Webcast on 07/31/2014 Portuguese/English: 3:00 p.m. Connection details: Brazil: +55 (11) (11) USA: +1 (786) Others: +1 (888) Economics (R$ thousand) Indicators 2Q14 2Q13 Chg. 1Q14 Chg. 6M14 6M13 Chg. Net Operating Revenue (1) 1,767,551 1,575, % 2,100, % 3,868,449 3,422, % Non-Manageable Expenditures (1,493,445) (991,524) 50.6% (1,465,242) 1.9% (2,958,687) (2,141,901) 38.1% Gross Margin (1) 274, , % 635, % 909,762 1,280, % Manageable Expenditures (2) (252,002) (257,233) -2.0% (229,255) 9.9% (481,257) (491,057) -2.0% Gain on Asset Sale 408,011 0 n.d % 408,011 0 n.d. EBITDA (3) 430, , % 406, % 836, , % EBITDA adjusted with ACR contributions 557, , % 406, % 964, , % Result from Corporate Participation (21,085) (44,780) -52.9% (13,969) 50.9% (35,054) (106,344) -67.0% Financial Result (48,824) (77,173) -36.7% (87,247) -44.0% (136,071) (136,652) -0.4% Income Tax and Social Contribution (64,634) (58,741) 10.0% (84,138) -23.2% (148,772) (161,214) -7.7% Minority Interest (25,073) (16,858) 48.7% (36,829) -31.9% (61,902) (79,017) -21.7% Net Income 183,622 44, % 99, % 283, , % Net Income adjusted with ACR contributions 267,797 44, % 99, % 367, , % Capex 87,254 78, % 85, % 172, , % Net Debt 2,031,266 1,894, % 2,451, % 2,031,266 1,894, % Market Evolution (GWh) Net Consolidated Revenue: growth of 12.2% in the 3 segments of business: (i) +4.3% in the distribution (ii) +6.1% in the generation (iii) at the commercialization company, %; Non-Manageable Expenditures: an increase of 50.6% as a result of the distributors purchased energy costs - partially offset by transfers from the ACR-Account - as well as the increase in generators costs due to the GSF average of 93.8%; Manageable Expenditures: a reduction of 2.0% against a 6.2% rate of inflation for the period; EBITDA: growth of 31.6% due to the booking of income from the sale of 50% of Jari and Cachoeira Caldeirão HPPs; considering the ACR contribution in May and June, EBITDA increase would have been 70.6%. Net Income: an increase of R$ million, reflecting growth in EBITDA, an increase in financial revenue and a reduction in the effective income tax/social security rate; considering the ACR contribution in May and June, EBITDA increase would have been R$ million. Net Debt/EBITDA: 1.2x as at June 30, 2014; Distributors: funding of R$ million raised in the first half for lengthening the debt profile and reinforcing cash flow; Santo Antônio do Jari HPP: Operating License issued in May (95.4% of work evolution); São Manoel HPP: Signature of the concession agreement; included in the REIDI (Incentive Regime for Infrastructure Development) scheme and 1 st debenture issue for R$ 532 million finalized in July. Total Energy Distributed 6,479 6, % 6, % 13,205 12, % Total Generation Energy Sales (4) 1,912 1, % 2, % 4,130 4, % Total Commercialized Energy 2,872 3, % 3, % 6,330 6, % (1) Excludes construction revenues. (2) Excluding depreciation, amortization and cost of construction. (3) EBITDA = Earnings before interest, taxes, depreciation and amortization. (4) Energy Sales - Generation does not consider the values of Pecém. Main Indicators

2 Contents 1. Events in the Period 3 2. Economic and Financial Performance Net Operating Revenue Deductions from Operating Revenue Operating Expenditures Non-manageable Expenditures Manageable Expenditures Gain from Sale of Investment EBITDA Financial Result Net Income Debt Variation in Fixed Assets Performance by Business Area Generation Distribution Commercialization Capital Markets Share Performance Capital Stock 30 ANNEXES 32

3 1. Events in the Period Signature of the Concession Agreement for Use of Public Property for the Generation of Electric Energy - São Manoel On April 10, 2014, Empresa de Energia São Manoel signed a Concession Agreement for the Use of Public Property for the Generation of Electric Energy with the Ministry of Mines and Energy (MME), regulating the harnessing of the hydroelectric energy potential from the Teles Pires River. The São Manoel HPP will operate as an Independent Power Producer with an installed capacity of 700 MW and a physical guarantee of average MW. EDP Bandeirante s 5 th Simple Debenture Issue for R$ 300 million On April 24, 2014, EDP Bandeirante completed its 5 th debenture issue for R$ 300 million at an annual cost of CDI +1.39% with semi-annual interest payments and amortization in 5 semi-annual installments beginning in April 2017 with final payment in April The issue was negotiated through Banco Safra. Funds will be used for refinancing debt and extending the maturity profile as well as for reinforcing working capital. Annual General Meeting At the Annual General Meeting held on April 29, 2014, approval was given to the allocation of net income for fiscal year 2013 with the distribution of dividends in the amount of R$ million, interest on shareholders equity of R$ 29.2 million and, additionally, the distribution of part of retained earnings, the latter to the debit of the Company s Retained Earnings Reserve, for R$ 30.0 million. Payout will take place before December 31, 2014 with no monetary restatement to holders of the Company s common shares - record date to be the date on which the Annual General Meeting was held. Negotiation of a Credit Agreement via Law 4131 for EDP Escelsa in the amount of R$ 200 million On May 8, EDP Escelsa signed a Credit Agreement for US$ 90.5 million with disbursements for the equivalent in Reais of R$ 200 million at a total annual cost of % of CDI with quarterly payments of interest and annual amortization of principal as from 2016, final due date on May 14, 2018, with no currency exposure. Funds have been used for refinancing short term debt. Conclusion of the sale of a 50% stake in Santo Antônio do Jari and Cachoeira Caldeirão HPPs to CWEI Brasil Negotiations involving the sale of a 50% stake held by EDP Energias do Brasil in Centrais Hídricas Santo Antônio do Jari and Cachoeira Caldeirão to CWEI (Brasil) Participações Ltda., a subsidiary of China Three Gorges Corporation, were concluded on June 27. The total value of the transaction was R$ million, R$ million with respect to the sale of a 50% stake in Santo Antônio do Jari HPP and R$ 0.4 million for the sale of a 50% stake in Cachoeira Caldeirão HPP. 2. Economic and Financial Performance 2.1. Net Operating Revenue 2Q14 Net Revenue Breakdown* Commercialization 29.2% Distribution 54.4% Generation 16.4% * Does not take into account intra-group exclusions of R$ million in 2Q14 and R$ million in 2Q13 and excludes construction revenues of R$ 70.3 million in 2Q14 and R$ 66.7 million in 2Q13. 3

4 In 2Q14, consolidated net operating revenue 1, excluding construction revenue, was R$ 1,767.6 million, 12.2% higher than in 2Q13 (R$ 1,575.7 million). First half revenue amounted to R$ 3,868.4 million, a 13.0% increase on the same period in Commercialization Total commercialized energy volume amounted to 2,872 GWh in 2Q14, 7.7% down on the 3,111 GWh commercialized in 2Q13. This performance reflects a strategy of seasonal weighting, this year concentrated in 1Q14. In 1H14, commercialized energy volumes were 6,330 GWh, 4.8% greater than the 6,041 GWh traded in 1H13; The average energy selling price increased 49.8% in relation to 2Q13 due to the increase in prices on the free market for energy and annual readjustments to long term agreements concluded in previous fiscal years. Generation Energy volume sold in 2Q14 was 1,912 GWh, 3.2% less than the 1,976 GWh in 2Q13. This reduction is due to the greater proportional allocation of assured energy in 1H13 due to the specific seasonal weighting strategy adopted for the year. The accumulated volume sold in the first half was 4,130 GWh, 4.5% less than the 4,326 GWh sold in the same period for the preceding year; The average selling price of generated energy was R$ 173.2/MWh in 2Q14, 9.7% higher than reported in 2Q13 (R$ 157.9/MWh) due to the annual readjustments in current power purchasing agreements and the negotiation of short term agreements; The increase of R$ 2.8 million in revenue from short term energy in 2Q14 reflects the purchase of energy via short duration agreements and settlement through the CCEE (Electricity Energy Trading Board) at PLD price for settlement of differences in the period. In 1H14, revenue increased R$ 10.1 million compared with the same period in Distribution 2 Energy volume distributed by the concessionaires in 2Q14 (captive + USD) amounted to 6,479 GWh, unchanged in relation to the 6,477 GWh distributed in 2Q13 (-1.8% at EDP Bandeirante and +2.7% at EDP Escelsa). In 1H14, distributed volume was 13,205 GWh, an increase of 2.7% compared with the same period in 2013; Gross revenue from energy sales to the captive market reached R$ million in 2Q14, an increase of 14.0% compared with 2Q13 (R$ million). This result is due to the combined effect of a reduction of tariffs following the tariff revision for EDP Escelsa, effective August 07, 2013, and a tariff increase under the annual tariff readjustment for EDP Bandeirante, effective on October 23, For the first half, gross revenue from energy sales totaled R$ 2,782 million, an increase of 1.2% compared with the same period in 2013 (R$ 2,748 million); Gross revenue from the use of the distribution system reached R$ 710 million in 2Q14, a reduction of 9.8% in relation to 2Q13 (R$ 787 million), reflecting the change in the parameters for calculating the TUSD. In 1H14, revenue amounted to R$ 1,474 million, a year-on-year reduction of 11.6%; Revenue from wholesale energy supply in 2Q14 amounted to R$ 24.4 million, an increase of 33.6% compared with 2Q13 (R$ 18.3 million). This growth is due to the increase of 13.4% in consumption and the readjustment of 8.8% in the tariff for EDP Escelsa s concessionaires and permit holders; revenue from wholesale energy supply for the first half of 2014 amounted to R$ 48.0 million, 29.4% more than the same period in 2013 (R$ 37.1 million); EDP Bandeirante s average tariff increased 7.5% in relation to 2Q13 following the annual tariff readjustment effective October 23, 2013, this having an average effect on consumer bills of 5.83%. At EDP Escelsa, the average tariff for 2Q14 decreased by 1.5% in relation to 2Q13 following the tariff revision effective August 07, 2013, this having an average effect on consumer bills of -1.05%. Other Operating Revenue In 2Q14, other operating revenue declined R$ 6.1 million as a result of the reversion of a provision for compensation due to insufficiency of generation of energy contracted by the distributors. Other Operationg Income 2Q14 2Q13 Chg. 6M14 6M13 Chg. Grants 68,391 46, % 116,790 77, % Compensation due to insufficient generation (13,343) 21,957 n.a. 91,616 50, % Leases and rentals 67,418 64, % 135, , % Other Operationg Income (2,466) (6,115) -59.7% 43,920 53, % Total 120, , % 387, , % 1) Takes into account intra-group exclusions. 2) Excludes unbilled items 4

5 In the context of subvention grants, Provisional Measure 605, published on January 23, 2013, increased the scope for use of funds from the Energy Development Account CDE to provide resources to offset tariff discounts and the effect arising from refusal of some energy market players to sign up to the change in government conditions for rolling over generation concession agreements. Under Decree 7891/2013, tariff discounts for subsidizing low income consumers, rural consumers, treatment of water, sewage and sanitation and irrigation cease to be offloaded onto the tariffs of remaining consumers, thus permitting the promised reduction in electricity bills. Each month, ANEEL ratifies the amount of CDE funds for release by Eletrobrás to each distributor for covering the discounts mentioned above. Consequently, R$ 22.8 million in the case of EDP Bandeirante and R$ 45.6 million for EDP Escelsa have been provisioned for 2Q14, positively impacting the Other Operating Income line Deductions from Operating Revenue In 2Q14, deductions from operating revenue amounted to R$ million, 7.4% more than the amounted reported in 2Q13 (R$ million). For the first half of 2014, deductions amounted to R$ 1,372.0 million, 6.6% more than the same period in the preceding year (R$ 1,287.5 million): Net Operating Revenue (R$ thousand) 2Q14 2Q13 Chg. 6M14 6M13 Chg. Captive Customers 1,335,027 1,313, % 2,781,662 2,747, % Residential 553, , % 1,184,547 1,162, % Industrial 300, , % 593, , % Commercial 326, , % 690, , % Rural 42,816 41, % 84,485 89, % Other 111, , % 227, , % (-) Transferred to TUSD - captive customers (1) (522,924) (601,455) -13.1% (1,101,563) (1,256,422) -12.3% Unbilled supplies 4,461 (25,977) n.a. 16,091 (74,615) n.a. Total Retail Supply 816, , % 1,696,190 1,416, % Electric energy 175, , % 383, , % Short term energy 23,137 (9,377) n.a. 54,320 39, % Commercialization 582, , % 1,247, , % Total Wholesale Delivery 781, , % 1,686,122 1,319, % Retail Supply and Wholesale Delivery 1,598,067 1,277, % 3,382,312 2,736, % Usage of the distribution system (TUSD) 708, , % 1,470,759 1,663, % Grants 68,391 46, % 116,790 77, % Compensation due to insufficient generation (13,343) 21,957 n.a. 91,616 50, % Leases and rentals 67,418 64, % 135, , % Construction Revenue 70,293 66, % 139, , % Other Operationg Income (2,466) (6,115) -59.7% 43,920 53, % Sub-total 2,496,482 2,255, % 5,379,888 4,820, % (-) Deductions from Operating Revenue (658,638) (613,494) 7.4% (1,372,004) (1,287,483) 6.6% Net Operating Revenue 1,837,844 1,642, % 4,007,884 3,533, % Operating Revenue excluding construction 1,767,551 1,575, % 3,868,449 3,422, % (1) Pursuant to Aneel rulings, this item refers to the portion billed to captive customers corresponding to the tariff for the use of the distribution system, previously presented as part of Retail Supply and now presented in the Usage of the Distribution System. Increase of 7.4% in the PIS/COFINS and 4.0% in the ICMS sales tax on the back of higher gross operating revenue. In 1H14, the same items increased year-on-year by 9.6% and 4.2%, respectively; CCC (Fuel Consumption Account): extinguishment of the charge pursuant to Law /2013; CDE (Energy Development Account): increase in the monthly charge as from March 2014 based on Ratifying Resolution 1699 of April 2014; RGR (Global Reversion Reserve): in spite of the extinguishment of the charge pursuant to Law /2013, this legislation does not apply to the Pantanal and Energest generation concessions in accordance with Paragraph 3, Article 4 of Law 5.655/1971. The amount shown in 2Q14 therefore reflects the RGR charged to these concessions. 5

6 Deductions from Operating Revenue 2Q14 2Q13 Chg. 6M14 6M13 Chg. R&D (13,395) (12,823) 4.5% (29,484) (27,423) 7.5% CCC 0 0 n.d. 0 (14,033) % CDE (28,874) (16,164) 78.6% (49,274) (32,327) 52.4% RGR (2,419) (1,373) 76.2% (4,838) (973) 397.2% PIS/COFINS (216,687) (201,680) 7.4% (470,002) (428,647) 9.6% ICMS (385,022) (370,357) 4.0% (793,902) (761,889) 4.2% ISS (209) (246) -15.0% (441) (488) -9.6% Proinfa (12,032) (10,851) 10.9% (24,063) (21,703) 10.9% Total (658,638) (613,494) 7.4% (1,372,004) (1,287,483) 6.6% 2.2. Operating Expenditures Operating expenditures, excluding construction, depreciation and amortization costs amounted to R$ 1,745.4 million in 2Q14, 39.8% greater than 2Q13 (R$ 1,248.8 million), reflecting the increase of 50.6% in non-manageable expenses. For the first half of 2014, operational expenses were R$ 3,439.9 million, 30.6% higher than the same period in 2013 (R$ 2,633.0 million). Operating Expenditure Breakdown - 2Q14 Manageable 14% Operating Expenses (R$ million) 1,745 40% 1,249 51% 1,493 Non-Manageable 86% Non-manageable Expenditures -2% Note: the breakdown of operating costs does not include depreciation, amortization and construction costs. Non-manageable expenditures with respect to power purchasing costs, charges for use of the basic electric energy network and the ANEEL inspection fee amounted to R$ 1,493.4 million in 2Q14, 50.6% up on 2Q13 (R$ million). For the first half year as a whole, non-manageable expenditures reached R$ 2,958.7 million, 38.1% greater than the same period in 2013 (R$ 2,141.9 million). 2Q13 Manageable Non-Manageable 2Q14 Non-Manageable Expenditures (R$ thousand) 2Q14 2Q13 Chg. 6M14 6M13 Chg. Electricity purchased for resale (1,391,895) (908,046) 53.3% (2,753,152) (1,969,234) 39.8% Foreign currency - Itaipu (118,871) (124,866) -4.8% (241,823) (238,241) 1.5% National currency (1,273,024) (783,180) 62.5% (2,511,329) (1,730,993) 45.1% Use and connection charge (86,212) (71,044) 21.4% (169,664) (145,766) 16.4% Other (15,338) (12,434) 23.4% (35,871) (26,901) 33.3% Inspection fee (2,572) (3,579) -28.1% (5,149) (7,159) -28.1% Financial compensations (8,503) (8,855) -4.0% (20,853) (19,742) 5.6% Others (4,263) 0 n.a. (9,869) 0 n.a. Total Non-Manageable Expenditures (1,493,445) (991,524) 50.6% (2,958,687) (2,141,901) 38.1% Electricity purchased for resale amounted to R$ 1,391.9 million in 2Q14, 53.3% greater than 2Q13. This increase is due to the involuntary exposure of the distributors and the high price for settlement of differences - PLD (reflecting the increase in the deployment of energy from the thermoelectric plants). In the case of the generators, the higher energy purchase costs was a reflection of the average GSF (Generation Scaling Factor) in the period of 93.8%, as described below. 6

7 PLD Evolution (R$/MWh) Southeast / Centerwest Submarket Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec The cost of electric energy acquired from Itaipu (currency denominated) reported a decrease of R$ 6.0 million, the result of a reduction of 7.9% in the quota for energy acquired from Itaipu in relation to this in spite of an appreciation of 7.8% in the average dollar in 2Q14 (R$ 2.23) compared with 2Q13 (R$ 2.07). With respect to energy purchases in local currency, the following is of note: Distribution The mechanisms available during 2013, more particularly the distribution of old energy quotas and the auctions for acquisition of electric energy from existing generators, has proved insufficient to meet the needs of the distributors in 2014, involuntarily exposing them to the short term market s Price for the Settlement of Differences - PLD. At the same time, the high PLD levels reached is a reflection of the deployment of energy in order of merit from the thermoelectric plants (TPPs). Thermal energy deployment in this fashion represents a higher cost of energy when compared to hydroelectricity. This has a direct impact on the distributors given their portfolio of Power Purchase Agreements in the Regulated Environment, per availability of electricity modality CCEAR-D. In 2Q14, the PLD averaged R$ 682.3/MWh (SE), 173% above the prevailing average of R$ 249.5/MWh in 2Q13. Consequently, on March 13, 2014, the Federal Government through the Ministry of Finance and the Ministry of Mines and Energy announced a package of measures to subsidize distributors cost overruns as well as to reduce the companies exposure to the short term market through the medium of an auction scheduled for April On April 1, 2014, Decree nº charged the Electric Energy Trading Board - CCEE with creating and maintaining a Regulated Contracting Environment Account the so-called ACR-Account, for covering the costs for the February December 2014 period that exceed the tariff cover relative to i) involuntary contractual exposure and ii) thermoelectric deployment under the CCEAR- D. As from February 2014, ANEEL began ratifying the monthly amount of CDE funds to be transferred via the ACR-Account. In parallel, the CCEE negotiated loans with the banks to be transferred to the distributors in amounts ratified by ANEEL. As a quid pro quo, as from 2015, the CCEE will have the right to receive from the CDE the amounts paid in by the distributors for the purpose of repaying the loan. These amounts collected by the distributors for payment of the CDE will take place over a two year period and be proportional to the captive market of each one, restated at the IPCA inflation index. A total amount of R$ 11.2 billion has been made available in the ACR Account for transfer to the distributors, R$ 9.0 billion of which has been used to cover the deficit for 1Q14 and the remaining R$ 2.2 billion to partially cover the deficit for 2Q14. The latter amount has covered the costs for April in part, but still leaving a deficit of R$ million for the sector as a whole in April. On April 29, 2014, the A-0 auction, mentioned above, was held to meet the discos immediate energy needs. A total of 1,471 average MW of contracts per amount of electricity and 575 average MW of contracts per availability of electricity was sold, resulting in a total of 2,046 average MW at an average price of R$ /MWh. While serving to ameliorate the distributors exposure, the auction was insufficient to eliminate the entire sector deficit. In the case of EDP Energias do Brasil, the contractual 7

8 level increased from 99.3% to 99.5% while at EDP Escelsa, this rose from 84.2% to 88.3%. From July onward average exposure is estimated at 101.7% for EDP Bandeirante and 93.5% for EDP Escelsa. Since the above measures have proved insufficient, the distributors remain exposed to the short term market and at the same time, deployment of energy from the thermoelectric plants has remained at a high level. In the case of EDP s distributors, the total amount for April covered by the first loan was R$ million: R$ 47.9 million for EDP Bandeirante and R$ 91.0 million for EDP Escelsa. The available funds were insufficient to cover R$ 27.6 million, of which R$ 9.1 million for EDP Bandeirante and R$ 18.5 million at EDP Escelsa, this booked to the regulatory assets for the period (see page 24). The amount for May totaling R$108.2 million (R$ 9.3 million relates to EDP Bandeirante and R$ 98.9 million to EDP Escelsa) has already been ratified by ANEEL in Official Letter 90 of July 4, The company has provisioned the amount of R$ 33.8 million for the month of June, of which R$ 6.6 million relates to EDP Bandeirante and a further R$ 27.2 million to EDP Escelsa. However, with the lack of resources available in the Account-ACR, so far, the values mentioned above are also recorded in regulatory assets for the period (see page 24). These amounts were appropriated against a credit to the Energy Purchased for Resale item. For the first half year, the distributors have already booked a total of R$ million in the result as cost of Purchase Energy. Of this total, R$ million was mitigated through CDE and ACR-Account, and has already been incorporated in the Company s cash position. Generation R$/thousand 1Q14 2Q14 TOTAL EDP Bandeirante 129,163 74, ,740 EDP Escelsa 284, , ,981 TOTAL 413, , ,721 In 2Q14, energy purchases largely reflect the average GSF of 93.8% for the period and amounting to R$ 64.2 million. During periods when there is excess hydraulic generation in Brazil, the Energy Reallocation Mechanism (MRE) distributes the gains to those generating plants participating in the system - known as secondary energy gains. Conversely, during periods of low rainfall, the corresponding generation deficit is discounted from the plants physical guarantee, triggering a revenue loss. Typically, in periods with a high level of thermoelectric generation, there is a reduction in hydro generation. In 2014, the generation deficit was caused largely by low water levels of reservoirs in the SIN grid system and reflected in the full deployment of all the system s thermoelectric plants. Use and connection charges in 2Q14 were 21.4% higher than 2Q13, a function of the System Service Charge (ESS) paid in June due to the deployment of the thermoelectric plants outside the order of merit and the annual tariff readjustment Manageable Expenditures Manageable expenditures, excluding construction, depreciation and amortization costs amounted to R$ million, a reduction of 2.0% in relation to 2Q13 (R$ million) against 12 month inflation of 6.2% (IGP-M) and 6.5% (IPCA). For the first six months of the year, expenditures were R$ million, also a 2.0% decrease in relation to the same period in

9 Manageable Expenditures (R$ thousand) 2Q14 2Q13 Chg. 6M14 6M13 Chg. Personnel (94,853) (83,171) 14.0% (183,507) (168,654) 8.8% Material (7,811) (7,812) 0.0% (14,680) (14,430) 1.7% Third-party services (89,809) (96,612) -7.0% (179,348) (185,187) -3.2% Provisions (24,772) (45,459) -45.5% (43,995) (76,292) -42.3% Other (34,757) (24,179) 43.7% (59,727) (46,494) 28.5% Total PMTO (252,002) (257,233) -2.0% (481,257) (491,057) -2.0% Infrastructure Construction Costs (70,293) (66,734) 5.3% (139,435) (110,977) 25.6% Depreciation and amortization (86,877) (84,774) 2.5% (171,510) (171,157) 0.2% Total Manageable Expenditures (409,172) (408,741) 0.1% (792,202) (773,191) 2.5% IGP-M (last 12 months)* 6.2% IPC-A (last 12 months)** 6.5% *Source: FGV **Source: IBGE There was an increase of R$ 11.7 million in expenditures with Personnel (+14.0%): (i) Average wage increase of 6.5% in accordance with the Collective Bargaining Agreement (+R$ 7.0 million); (ii) An increase in benefits expenditures (food and meal vouchers, life insurance and medications) due to contractual readjustments (+R$ 1.7 million); (iii) Non-recurring effect in 2Q14 with respect to expenditures with indemnities due to the organizational restructuring in the period resulting in the termination of 58 employees (+R$ 3.5 million). Costs of Materials were unchanged. Reduction of R$ 6.8 million (7.0%) in Third Party Services: (i) (ii) (iii) (iv) Renegotiation of the IT outsourcing contract (-R$ 2.2 million); Expenditure with the refurbishment of EDP Bandeirante s regional office in Mogi das Cruzes (+R$ 1.1 million); Refurbishment and move of the São Paulo head office in 2013 (-R$ 3.6 million); Non-recurring effect in 2Q13 with respect to consultancy services (-R$ 2.3 million). Reduction of R$ 20.7 million (-45.5%) in Provisions: (i) Provision for delinquent customers and customers with court injunctions (+R$ 3.7 million: +R$ 5.8 million for EDP Bandeirante and -R$2.1 million at EDP Escelsa); (ii) Reduction in provision for labor related law suits at the distributors following a favorable ruling (-R$ 2.4 million); (iii) Establishment of a provision for an agreement signed between EDP Escelsa and the SINERGIA/ES labor union in 2013 (class action alleging losses caused by alterations to a jobs and wages plan for the period) (-R$ 21.5 million). Increase of R$ 10.6 million in Others: (i) Impact of the New Replacement Value NRV due to the negative variation in IGP-M (+R$ 15.6 million); (ii) Mismatch in the payment of IPTU (property tax) on a shared property in relation to the payment in 2013, made in the third quarter (+R$1.9 million); (iii) Reduction in indemnifications for damages caused to consumers by faults in the distribution network (-R$ 1.3 million); (iv) Verification of the economic sale value of EDP Escelsa s Manguinhos site (-R$ 2.4 million). Depreciation and Amortization overheads amounted to R$ 86.9 million in 2Q14, an increase of 2.5% in relation to the same period in Gain from Sale of Investment On June 27, the Company notified the market that it had concluded negotiations - announced on December 6, for the sale of its 50% stakes in the CEJA and Cachoeira Caldeirão projects to CWEI Brasil, subsequent to the receiving necessary regulatory approval from ANEEL, the National Development Bank BNDES, the Chinese regulatory authorities and other requirements of a corporate and contractual nature. The total value of the operation was R$ million (cash effect), 9

10 generating a gain for the Company of R$ million, of which, R$ million relates to the sale of the stakes and R$ 205,1 million to the economic value of the remaining investment - both reported in the Balance Sheet item Investments offset against the Income Statement under the Gain from the sale of investment. As from this date, the projects in question have ceased to be controlled by the Company, now being jointly controlled, their results to be registered in the Company s balance sheet in the equity income item EBITDA In 2Q14, EBITDA reached R$ million, an increase of 31.6% in relation to 2Q13 (R$ million). This increase is due to the booking of the sale of 50% of Santo Antônio do Jari and Cachoeira Caldeirão HPPs, as explained above and despite the decline in EBITDA for Generation, Distribution and Commercialization as shown below: Generation: EBITDA reached R$ million in 2Q14, a decline of 18.2% compared with 2Q13 (R$ million), due to the effects of the average GSF of 93.8% and occasioning greater energy purchases in the period. Distribution: EBITDA totaled R$ million negative in 2Q14, a reduction of R$ million in relation to 2Q13 (R$ million), due to the increase in non-manageable expenditures, again reflecting larger energy purchases. Commercialization: EBITDA reached R$ 11.8 million in 2Q14, a reduction of 16.4% in relation to the same period in 2013 (R$ 14.2 million), reflecting the reduction in gross margin of 12.1%. Considering the ACR-Account contribution in May and June, EBITDA of 2Q14 would be R$ million. EBITDA Breakdown - 2Q Distribution Commercialization Generation Gain on Asset Sale *Excludes construction revenue EBITDA Evolution (R$ million) ** ** EBITDA 2Q13 Gross Margin 5 Manageable Expenditures* Gain on asset sale *Excludes depreciation and amortization **Amount refers to the ACR contribution in May and June EBITDA 2Q14 For the first six months of 2014, the Company posted EBITDA of R$ million, a year-on-year improvement of 6.0%. Considering the ACR contributions in May and June, YTD EBITDA would have been R$ million. 10

11 789 EBITDA Evolution YTD (R$ million) ** ** EBITDA 6M13 Gross Margin Manageable Expenditures* Gain on asset sale *Excludes depreciation and amortization *Amount refers to the ACR contribution in May and June EBITDA 6M Financial Result Financial Result (R$ thousand) 2Q14 2Q13 Chg. 6M14 6M13 Chg. Financial Revenue 82,832 39, % 137,979 74, % Revenue from financial investments 26,726 14, % 49,596 18, % Monetary variation 25,631 20, % 53,453 42, % SELIC on taxes and social contribution 23,303 1, % 27,896 3, % Marking to market and present value adjustments 6, % 13,823 5, % Other revenue 411 1, % (6,789) 3,787 n.d. Financial Expenses (130,400) (115,558) 12.8% (271,744) (209,412) 29.8% Monetary variation and Adds (7,302) (15,895) -54.1% (26,756) (32,102) -16.7% Financial charges on debt (121,673) (70,457) 72.7% (243,442) (131,309) 85.4% Post Employment Fringe Benefits (14,500) (12,407) 16.9% (27,680) (24,815) 11.5% Marking to market and present value adjustments (6,181) (2,874) 115.1% (14,445) (7,900) 82.8% Other Expenses 19,256 (13,925) n.d. 40,579 (13,286) n.d. Net Foreign Exchange Result (1,256) (786) 59.8% (2,306) (1,418) 62.6% Total (48,824) (77,172) -36.7% (136,071) (136,651) -0.4% The principal factors resulting in a positive variation of R$ 28.3 million in 2Q14 were: Financial Revenue: an increase of R$ 43.7 million (i) Increase of R$ 12.7 million in revenue from financial investments due to the increase in average balances of cash and cash equivalents (32.9%) and the evolution in the Selic basic interest rate in the last 12 months; (ii) Impact of Selic rate on compensating tax and social contribution charges (+R$ 21.5 million) due to a year-on-year increase in the rate (2Q14 =11.0% versus 2Q13 = 8.0%); (iii) Increase of R$ 5.3 million in other revenues due to the recognition in the Company s books of recovery of past PIS/COFINS tax payments made on financial revenue following a favorable ruling of a law suit. Financial Expenses: an increase of R$ 14.8 million 11

12 (i) Increase in debt servicing charges due to increased outstanding debt and also the average cost of debt in the past 12 months (-R$ 51.2 million); (ii) Increase in Post Employment Fringe Benefit expenses (-R$ 2.1 million) due to the updating of actuarial assumptions. In line with alterations introduced by IAS 19, changes were made to the rate of return on investments: this was modified to be equivalent to a discount rate, negatively impacting return on assets and requiring the sponsors to make a larger contribution to maintain the same level of defined benefit; (iii) Increase of capitalized interest due to the evolution of the work schedule at Santo Antônio do Jari and Cachoeira Caldeirão HPPs, the latter having a more significant impact (+R$ 20.4 million); (iv) Reduction of monetary variation expenses for the use of public property at Peixe Angical HPP due to adjustment for inflation (+R$ 4.4 million); (v) Reduction of expenses for fines and interest on the ICMS sales tax (+R$ 6.0 million); (vi) Reduction of the expense for a provision for depreciation of securities (+R$ 7.7 million) due to the marking to market of shares in Grupo Rede held by EDP, less affected by depreciation in the last 12 months when compared with the same period in Currency Result The currency result for 2Q14 was stable in relation to 2Q13 (+R$ 0.5 million) Net Income Consolidated net income in 2Q14 amounted to R$ million, a year-on-year increase of R$ million due to the booking of the proceeds from the sale of 50% of Santo Antônio do Jari and Cachoeira Caldeirão HPPs. Net Income was also affected by the 36.7% improvement in the financial result, the R$ 8.2 million deterioration in minority interests and the 5.9 million in Income Tax (IT) and Social Contribution (SC) bill for the period. The effective rate of IT/SC, excluding the equity income effect, was 22% compared to 36% in 2Q13. This variation is largely due to the offsetting of the tax loss and the negative base of the social contribution charge at the holding company due to the sale of a corporate stake to CTG, as well as the distributors tax loss in the period. In addition, Net Income reflects the Result from Corporate Stakes, including the booking of the result from Pecém I TPP (-R$ 23.5 million) and EDP Renováveis Brasil (R$ 2.3 million). Considering the ACR-Account contribution in May and June, Net Income of 2Q14 would be R$ million. ** Net margin excludes construction revenue 12

13 Formation of Net Income (R$ million) ** ** Net Income 2Q13 EBITDA Dep & Amort Attributable to noncontrolling shareholders Financial Result Inc. Tax e Soc. Contr. Minority Interest Net Income 2Q14 **Amount refers to the ACR contribution in May and June For the accumulated first six months of 2014, the Company recorded a Net Income of R$ million, R$ million more than in the first six months of Considering the ACR contributions in May and June, Net Income would have been R$ million ** ** Net Income 6M13 EBITDA Dep & Amort Attributable to noncontrolling shareholders Financial Result Inc. Tax e Soc. Contr. **Amount refers to the ACR contribution in May and June Minority Interest Net Income 6M14 3. Debt Consolidated gross debt amounted to R$ 3,593.4 million on June 30, 2014, a 10.2% increase over December 31, 2013 (R$ 3,259.4 million), debt relating to Pecém I TPP and the Santo Antônio do Jari, Cachoeira Caldeirão and São Manoel HPPs being 13

14 excluded for both periods. Of the total gross debt as at June 30, 2014, R$ 88.7 million was currency denominated, fully protected against FX and Libor variation with hedge and swap instruments. ** Note: * Not considering intra-group exclusions of R$ 35.3 million ** Preferred shares of Investco classified as debt 3 Considering R$ 1,562.1 million held in cash and cash equivalents, net debt amounted to R$ 2,031.3 million on June 30, 2014, a decline of 13.0% in relation to December 2013 (R$ 2,335.3 million). The average cost of Group debt was 10.16% p.a. in June 2014 compared with 8.62% p.a. in December 2013 taking into account the capitalization of interest of debt and charges incurred in the past 12 months. The rise in average cost was largely due to the increase in average CDI the Interbank Deposit Rate (9.67% in June 2014 against 8.06% in December 2013). The average duration for consolidated debt as of June 2014 was 2.56 years, an increase in relation to December 2013 (2.45 years). This improvement is due to the settlement of the 1 st debenture issue of Energias do Brasil (holding company) and new funding contracted in the period and described as follows: (a) 3 rd simple debenture Issue of EDP Energias do Brasil (holding company) in the amount of R$ 300 million with final maturity in August 2015; (b) a Rural Credit line to EDP Bandeirante in the amount of R$ 98.6 million with a single maturity in July 2015; (c) the 5 th simple debenture issue for EDP Bandeirante in the amount of R$ 300 million, with final maturity in April 2019; (d) a Rural Credit line to EDP Escelsa for the amount of R$ million with a bullet payment in July 2015; and (e) a Cédula Cambiária to EDP Escelsa in the amount of R$ 200 million, with final maturity in May The combined total of these fresh lines is R$ million. 3 Note: Pursuant to Article 8 of the company s corporate bylaws, Investco s preferred shares enjoy the right, among others, to receive a fixed, cumulative annual dividend of 3% on the value of their respective participation in the capital stock. In the light of this characteristic, the shares were classified as debt instruments in order to satisfy the definition of a financial liability due to the fact that the Company does not have the right to avoid the passing on of cash or another financial asset to another entity as called for under Paragraph 19 of CPC

15 Short term debt on June 30, 2014 represented 30.4% of the Company s gross debt, totaling R$ 1,093.6 million compared to R$ 1,132.1 million in December 2013, a reduction of 3.4%. This reduction is mainly the result of the replacement of EDP Energias do Brasil s (holding company) 1 st debenture issue by the 3 rd debenture issue. Out of total short term debt, million is due from the holding company, R$ million from distribution and R$ million from generation, intra-group operations not being taken into account. Gross Debt by Indexer 06/30/2014 CDI 85% TJLP 10% Fixed Rate 5% * Not considering intra-group exclusions ** 15

16 * Values include principal + charges + results of hedge operations Net Debt/EBITDA ratio at the end of 2Q14 was 1.2X. Net Debt/EBITDA 1.3 x 1.3 x 1.4 x 1.5 x 1.2 x 1,967 2,453 2,335 2,451 2,031 Jun/13 Sep/13 Dec/13 Mar/14 Jun/14 Net Debt Net Debt/EBITDA * Not taking into account the effects of the stakes in Pecém I TPP, and Santo Antonio do Jari, Cachoeira Caldeirão and São Manoel HPPs If EDP Energias do Brasil s 50% stakes in Pecém I TPP, Santo Antonio do Jari, and Cachoeira Caldeirão HPPs and the Company s 66% participation in São Manoel HPP are taken into account, then the net debt/ebitda ratio would be 2.0 times, as shown in the following table. The average term for debt would be 3.48 years and the annual average cost of debt, 9.22%. 06/30/2014 Gross Ner Cash (R$ million) Debt (GD) Debt (ND) EBITDA ND/EBITDA Consolidado 3,593 1,562 2,031 1, UTE Pecém I (50%) 1, , UHE Santo Antonio do Jari (50%) UHE Cachoeira Caldeirão (50%) UHE São Manoel (66%) (1) Total 5,586 1,781 3,805 1, Consolidation criteria: 100%. Transaction continues pending finalization. 4. Variation in Fixed Assets Investments in CAPEX amounted to R$ 87.3 million in 2Q14, 11.3% more than in 2Q13, in both periods discounting investments in Santo Antonio do Jari and Cachoeira Caldeirão HPPs. The amount was distributed among the segments as follows: generation (12%), distribution (84%) and others (4%). Investments in the first half of 2014 amounted to R$ million, a year-on-year increase of 29.7%. 16

17 Capex (R$ thousand) 2Q14 2Q13 % 6M14 6M13 % Distribution 73,293 68, % 145, , % EDP Bandeirante 36,201 29, % 72,234 43, % EDP Escelsa 37,092 39, % 72,846 70, % Generation 10,468 6, % 17,133 14, % Enerpeixe % 502 1, % Energest Consolidated 8,871 4, % 14,688 10, % Lajeado / Investco 1,117 1, % 1,943 2, % Others 3,493 2, % 10,435 3, % Total 87,254 78, % 172, , % Capex - Distribution (R$ thousand) 2Q14 2Q13 % 6M14 6M13 % EDP Bandeirante Total Capex Net of Special Obligations 36,201 29, % 72,234 43, % (+) Special Obligations 22,262 13, % 34,328 27, % Gross Value 58,463 42, % 106,562 71, % (-) Interest Capitalization (1,567) (1,577) -0.6% (3,276) (2,549) 28.5% Gross Value less Interest Cap. 56,896 41, % 103,286 69, % EDP Escelsa Total Capex Net of Special Obligations 37,092 39, % 72,846 70, % (+) Special Obligations 13,100 3, % 20,467 8, % Gross Value 50,192 42, % 93,313 79, % (-) Interest Capitalization (1,433) (532) 169.4% (2,369) (1,136) 108.5% Gross Value less Interest Cap. 48,759 42, % 90,944 78, % Distribution 105,655 83, % 194, , % In the generation segment, investments totaled R$ 10.5 million in 2Q14, 52.5% greater than the same period in 2013, reflecting a growth of 80.8% in Energest Consolidated due to the reorganization and improvements of Mimoso and Mascarenhas HPPs. If 50% of the investment of Santo Antônio do Jari HPP (R$ 24.3 million) and Cachoeira Caldeirão HPP (R$ 41.7 million) is considered, total group investment would have reached R$ million, a 9.6% increase on 2Q13. In the first six months of the year and again considering 50% of the investments in Santo Antônio do Jari (R$ 49.4 million) and Cachoeira Caldeirão (R$ 76.4 million) HPPs, total group investment would have been R$ million, 25.7% higher than the same period in Capex (R$ thousand) 2Q14 2Q13 % 6M14 6M13 % Distribution 73,293 68, % 145, , % Generation 76,517 68, % 142, , % UHE Santo Antonio do Jari 24,343 53, % 49,368 92, % UHE Cachoeira Caldeirão 41,706 7, % 76,356 11, % Others 3,493 2, % 10,435 3, % Total 153, , % 298, , % Investments in the distribution segment were R$ million in 2Q14 (considering special obligations), a year-on-year growth of 26.9%. A total of R$ 58.5 million was invested in EDP Bandeirante and R$ 50.2 million in EDP Escelsa, a growth of 36.9% and 16.9%, respectively. The increase is due to the expansion of the electricity system and market service as described below. Of the total investment in the distribution segment, R$ 71.5 million (65.8%) was dedicated to the expansion of lines, substations and distribution networks for connection of new customers and the installation of metering systems; R$ 21.2 million (19.5%) was expended on improvements to the network and replacement of equipment, obsolete and depreciated meters and the reconductoring of networks at the end of their useful life; R$ 3.6 million (3.3%) was employed in the urban and rural universal 17

18 access programs, providing consumer connections and access to energy services; and R$ 12.4 million (11.4%) was invested in telecommunications, IT and other activities such as infrastructure, commercial projects and combating losses. 5. Performance by Business Area Items in R$ thousand or % 2Q14 2Q13 2Q14 2Q13 2Q14 2Q13 2Q14 2Q13 Net Operating Revenue 1 324, ,655 1,078,572 1,033, , ,199 1,767,551 1,575,689 Non-manageable expenditures (141,020) (90,317) (1,003,989) (680,895) (565,824) (400,272) (1,493,445) (991,524) Manageable expenditures 2 (26,870) (24,300) (199,229) (203,487) (2,148) (1,746) (252,002) (257,233) Depreciation and amortization (34,407) (34,067) (46,625) (45,071) (130) (78) (86,877) (84,774) EBITDA 156, ,038 (124,646) 149,314 11,853 14, , ,932 EBITDA Margin 48.2% 62.5% -11.6% 14.4% 2.0% 3.4% 24.3% 20.7% Net Income before minority interests 46,364 52,118 (119,906) 49,479 6,687 8, ,695 61,464 Minority shareholders (25,073) (16,858) (25,073) (16,858) Proportional Net Income 21,291 35,260 (119,906) 49,479 6,687 8, ,622 44,606 1 Do not include construction revenues. 2 Do not include depreciation, amortization and construction revenues. 3 Consolidated: considers intragroup elimitations. Generation Distribution Commercialization Consolidated 3 Items in R$ thousand or % 6M14 6M13 6M14 6M13 6M14 6M13 6M14 6M13 Net Operating Revenue 1 727, ,903 2,319,630 2,179,512 1,259, ,916 3,868,449 3,422,223 Non-manageable expenditures (270,339) (179,181) (1,938,600) (1,494,620) (1,190,163) (866,507) (2,958,687) (2,141,901) Manageable expenditures 2 (57,692) (54,939) (366,891) (377,809) (7,030) (6,828) (481,257) (491,057) Depreciation and amortization (68,439) (68,126) (91,400) (91,766) (265) (149) (171,510) (171,157) EBITDA 399, ,783 14, ,083 62,524 64, , ,265 EBITDA Margin 54.9% 66.7% 0.6% 14.1% 5.0% 6.9% 21.6% 23.1% Net Income before minority interests 145, ,435 (70,759) 107,864 39,062 41, , ,898 Minority shareholders (61,902) (79,017) (61,902) (79,017) Proportional Net Income 83,695 67,418 (70,759) 107,864 39,062 41, , ,881 1 Do not include construction revenues. 2 Do not include depreciation, amortization and construction revenues. 3 Consolidated: considers intragroup elimitations. Generation Distribution Commercialization Consolidated Generation Items in R$ thousand or % Enerpeixe Consolidated Energest (1) Consolidated Lajeado (2) Consolidated Generation (3) 2Q14 2Q13 2Q14 2Q13 2Q14 2Q13 2Q14 2Q13 Chg. Net Operating Revenue 101,303 99, ,749 84, , , , , % Non-manageable expenditures (35,366) (21,089) (57,668) (34,258) (47,986) (34,970) (141,020) (90,317) 56.1% Manageable expenditures (5,363) (5,270) (11,902) (10,685) (6,481) (6,479) (26,870) (24,300) 10.6% Depreciation and amortization (12,349) (12,351) (5,655) (4,964) (16,396) (16,743) (34,407) (34,067) 1.0% EBITDA 60,574 73,028 33,179 39,395 65,700 80, , , % EBITDA Margin 59.8% 73.5% 32.3% 46.7% 54.7% 66.0% 48.2% 62.5% p.p. Minority shareholders - - (619) (1,072) (7,857) 0 (25,073) (16,858) 48.7% Net Income 36,804 44,192 20,515 22,516 15,631 37,275 21,291 35, % (1) Includes Castelo Energética S.A, Pantanal Ltda, Santa Fé S.A, Costa Rica Ltda, and Energest S.A. with the respective intragroup eliminations. (2) Includes Investco and Lajeado Energia with the respective intragroup eliminations. On 2009 EDP Lajeado Energia also integrated this group. (3) Consolidated Generation includes Enerpeixe, Consolidated Energest, Lajeado Total, Terra Verde, Enercouto, Omega, Enernova and Pecém I TPP consolidated using the equity income method. Consolidated net revenue from generation reached R$ million in 2Q14, 6.1% up on the same quarter in 2013, reflecting the increase of 9.7% in average energy selling prices in spite of the decline of 3.2% in energy sales volume. For the first half of 18

19 the year, the segment reported net revenue of R$ million, an increase of 3.4% when compared with the same period in the preceding year (R$ million). Non-manageable expenditures posted an increase of R$ 50.7 million due to the impact of the average GSF of 93.8% in 2Q14 as explained in section non-manageable expenditures. EBITDA reached R$ million in 2Q14, 18.2% lower than 2Q13 for reasons described above, in addition to the increase of 10.6% in manageable expenditures and reflecting a growth of 11.4% in such expenditures at Energest Consolidated. The segment recorded a Net Income of R$ 21.3 million, a decline of 39.6% compared with 2Q13 and reflecting the fall in EBITDA and the increase of 48.7% of net income attributable to the controlling shareholders. This result was in spite of 47.8% improvement in results from Pecém I TPP (-R$23.5 million in 2Q14 against -R$ 45.0 million in 2Q13). It is worth mentioning that in 2Q13, there was a non-recurring effect with respect to the distribution of the investment reserve in the consolidation of EDP Lajeado, thus reducing net income attributable to the non-controlling shareholders in the period. In 2Q14, the average energy selling price in the generation segment was R$ 173.2/MWh, 9.7% greater than 2Q13 and the result of an increase in the average energy selling price at Enerpeixe (5.8%) and Energest (27.5%) HPPs, despite the decline in average price at Lajeado (-1.4%) The increase at Enerpeixe and Energest HPPs is the result of price readjustments to existing selling agreements as well as the sale of energy in the short term market at higher tariffs. The fall in average prices at Lajeado HPP is due to the existence of short term agreements in 2Q13, a situation not repeated in 2Q14, partially compensating the price readjustments made to the long term agreements in the interim. Energy Sales and Average Price R$ 197 R$ 197 R$ 173 R$ 137 1, Enerpeixe Energest Lajeado Total Energy Sales (GWh) Average Price (R$/MWh) Note: Average Price considers energy volumes of the Power Purchasing Agreements The volume of energy sold in 2Q14 reached 1,912 GWh, a 3.2% reduction in relation to the 1,976 GWh in 2Q13. This reduction is due to the greater allocation of assured energy in 1H13 and reflecting the strategy of seasonal weighting adopted specifically for the year Incoporating the volume of energy sold per availability modality from Pecém I TPP, sales were 2,584 GWh in 2Q14, a reduction of 2.0% in relation to the 2,636 GWh in 2Q13. Acumulated energy volume sold in 1H14 totaled 4,130 GWh, a reduction of 4.5% compared with 4,326 GWh sold in the same period in Including Pecém I TPP, total group volume sold in 1H14 was 5,466 GWh, a reduction of 3.3% in relation to the same period for 2013 (5,651 GWh). The following graph shows the seasonal allocation of consolidated energy sales per quarter since 2012: 19

20 - Installed Generation Capacity EDP Energias do Brasil s total installed generation capacity was 2,195 MW in 2Q14, unchanged from 1Q14 and taking into account the Company s stakes of 45% and 50% in the wind power assets of EDP Renováveis Brasil and in Pecém Port I TPP, respectively. Forecasted installed capacity for 2018 is 2830 MW considering the entry into operation of Santo Antônio do Jarí HPP in 2015, the Baixa do Feijão I, II, III and IV wind farms in 2016, Cachoeira Caldeirão HPP in 2017 and São Manoel HPP and the Aroeira, Jericó, Umuzeiros and Aventura I wind farms in Installed Capacity in MW 2, , Notes: (*) Includes the 45% stake of EDP Energias do Brasil in EDP Renováveis Brasil. (*) Considers the reduction following the sale in 3Q13 of the São João I and II and Coxim power plants with a combined installed capacity of 1.7 MW. (*) The installed capacity ignores the percentage values of stakes in Costa Rica, Lajeado and Enerpeixe HPPs, since the data for these plants is fully consolidated in EDP HPP Santo Antônio EOL Baixa do Feijão do Jari HPP Cachoeira Caldeirão 2017 HPP São Manoel 2018 (*) Takes in to account EDP s proportional participation in Santo Antonio do Jari (50%), Cachoeira Caldeirão (50%) and São Manoel (33%) HPPs. The São Manoel HPP transaction still awaits approval from the regulators as well as completion of other procedures of a corporate nature. EOL Aventura (e) - Status of the Generation Projects PECÉM I THERMOLECTRIC POWER PLANT The second quarter of 2014 was characterized by an improvement in plant performance to 82% in average uptime (GU I: 78% and GU II: 86%). 20

21 - Economic and Financial Performance* Items in R$ thousand or % Pecém 2Q14 2Q13 % 6M14 6M13 % Net Operating Revenue 146, ,500 29% 288, ,269 33% Non-manageable expenditures (92,626) (99,973) -7% (177,918) (240,354) -26% Gross Margin 54,017 13,527 n.a. 110,580 (23,085) n.a. Manageable expenditures (9,241) (9,698) -5% (21,086) (13,982) 51% Compensation for Unavailability (28,511) (35,740) -20% (48,823) (66,562) -27% Depreciation and amortization (16,963) (12,969) 31% (34,741) (20,973) 66% EBITDA 16,266 (31,911) n.a. 40,671 (103,629) n.d. Net Income (23,520) (45,017) -48% (38,542) (107,109) -64% *Values correspond to the EDP Energias do Brasil s 50% stake. Net revenue for 2Q14 was R$ million, the result of: (i) the sum of fixed revenue from GU I and GU II in accordance with the Power Purchase Agreements in the Regulated Environment - CCEAR amounting to R$ 75.7 million; (ii) the variable income from the deployment of energy from GU I and GU II for the total amount of R$ 54.8 million; (iii) the revenue from the power purchasing operation reflecting the revision in the plant s commercial capacity as established under the commercialization rules (explanation below) for the amount of R$ 34.4 million (net revenue of R$ 30.6 million); (iv) the exclusion of taxes (ICMS, PIS and COFINS, P&D and RGR) totaling R$ 18.3 million. Non-manageable expenditures amounted to R$ 92.6 million, the result of: (i) R$ 30.9 million in Purchased Energy for Resale due to the revision of the plant s commercial capacity in accordance with the concession agreement (explanation below); (ii) R$ 54.4 million in costs of raw materials necessary to deploy the plant (coal, diesel, lime, etc.); (iii) R$ 7.3 million in system charges. The commercial capacity is revised annually (in August) as required under the commercialization rules. Each year, the National Systems Operator - ONS calculates the deduction from commercial capacity (FID) in the light of the plant s downtime over a 60- month horizon. If the downtime is greater than that declared in auction, the FID will be less than 1 and there will therefore be a deduction from the physical guarantee, the plant purchasing the difference in energy on the free market. This amount of energy is subsequently settled through the CCEE, neutralizing the effect of the purchase on the plant s results. Manageable expenditures were R$ 54.7 million and impacted by the: (I) increase of R$ 1.4 million in personnel as a result of the capitalization of payroll overheads in 2Q13 when GU II was still not fully operational as well as an increase in temporary labor required for carrying out maintenance work during 2014; (II) increase of R$ 1.5 million in materials required for maintenance work executed in 2014 and the operating of GU II at maximum capacity in 2Q14 in contrast to 2Q13 when the generator unit was being brought into service gradually, only becoming fully operational in 3Q13; (III) increase of R$ 2.9 million in outsourced services due to maintenance carried out in 2014 and the operating of GU II at maximum capacity in 2Q14 in contrast to 2Q13 when the generator unit was being brought into service gradually, only becoming fully operational in 3Q13; (IV) reduction of R$ 13.5 million in the Others line, reflecting the reimbursement for downtime at Units I and II in the amount of R$ 28.5 million compared to R$ 35.7 million in 2Q13. In addition, a positive value of R$ 10.7 million was booked in June relating to the adjustment of the Adomp (Compensation for Downtime/Unavailability Charge) being the difference in the calculation from 720 MW to 700 MW, thus improving the Others line. The entry of the plant into full commercial operations is reflected in the increase of R$ 4.0 million in depreciation and amortization costs. In 2Q13, only Unit I was fully operational. 21

22 The above-mentioned reimbursement (item IV under manageable expenditures) is the difference between verified generation of the generator unit and its authorized power output, discounting forced and scheduled shutdown rates, energy consumption of the TPP itself and basic network losses. On January 24, 2014, Pecém I TPP announced that the Distrito Federal s 15 th District Court had awarded a temporary injunction suspending the calculation of downtime costs on an hourly basis with immediate effect. As a result, the reimbursement calculation was made by the CCEE on an hourly basis albeit using a rolling 60 month average. Pecém I TPP recorded an uptime of 85.16% (baseline month: August 2013), reimbursing the distributors for the difference between the CVU and the PLD for the undelivered energy, the CVU being the unit variable cost of generation in the supply agreement. Pecém I TPP registered an average uptime in 2Q14 of 82%: GU I with an average of 78% and GU II, an average of 86%. 87% 59% 54% 62% 73% 75% 59% 88% 86% 74% 78% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 GUI GUII Nota: the graphic above corresponds to the new calculation method, which as of July 2014 was changed due to the ANEEL's "acceptance" of Energy Pecém's plea regarding the availability calculations on basis of power of 700 MW. The previous methodology considered the basis for calculating the power of 720 MW. In 2Q14, plant EBITDA was a positive R$ 16.3 million compared with R$ 31.9 million negative in 2Q13. Variation in fixed assets was R$ 13.9 million in 2Q14. The financial result for 2Q14 deteriorated in relation to 2Q13 (-R$ 11.6 million) due to (i) interest on BNDES and IDB financing no longer being capitalized following startup of the generator units (in 2Q13, interest was still being capitalized for the second unit, the latter going into operation in May 2013); (ii) the reversal of values booked to Shareholders Equity following the Company s cessation of booking derivatives via hedge accounting; and (iii) interest on intra-group borrowing. Other information on the Pecém I project are available from the website SANTO ANTÔNIO DO JARI HPP By the end of 2Q14, work was 95.4% complete. During the period, the contractor executed the following activities: assembly of generators and turbines for GU I, GU II and GU III, the plant substation, and energizing the connection substation and transmission line. Important environmental-related events/activities were: Issue of Operating License nº on May 14, Execution of fauna recovery activities during the filling of the reservoir. Monitoring campaigns involving physical and biotic environmental programs were continued as were social communication, environmental education and resettlement activities. Excluding the use of public property, environmental licenses, monetary restatement and the earnout (premium on the acquisition of the plant in 2011), investment to date stands at R$ million, that is 82.1% of the total envisaged investment. In 2Q14, the BNDES released further tranches amounting to R$ 85.0 million to be used for work on the project. As of June 30, 2014, a total of R$ million or 85.9%, had been disbursed out of a total of R$ million. 22

23 CACHOEIRA CALDEIRÃO HPP At the end of 2Q14, work on the plant was 22.2% complete. During the period, activities of note were: continuation of concreting work on the machine house and controlled spillway as well as the area for assembling and manufacturing the electro-mechanical equipment. Important environmental-related activities were: Executing activities of social communication, environmental education, physical and socio-economic registration of the affected population, and preparation of evaluation reports of land and amenities. Implementing agreements signed with the municipalities of Ferreira Gomes and Porto Grande, with respect to upgrading public social services with transfer of financial resources. Excluding the use of public property, environmental licenses and monetary restatement, total investments to date are R$ 305,8 million, 25.2% of the total envisaged Distribution Items in R$ thousand or % EDP Bandeirante Net revenue was R$ 1,078.6 million in 2Q14, excluding the impact of construction revenue, an increase of 4.3% in relation to 2Q13. This increase reflects distributed energy volume and the impact of the tariff review at EDP Escelsa and the annual tariff readjustment at EDP Bandeirante. First half revenue was R$ 2,319,6 million, an increase of 6.4% in relation to the same period in 2013 (R$ 2,179.5 million). Non-manageable expenditures increased 47.5%, reflecting the cost of energy purchases due to involuntary exposure and the increase in deployment of energy from the thermoelectric plants, partially offset by contributions from the ACR account. Details of amounts released are mentioned in the explanation of non-manageable expenditures - item Manageable expenditures, excluding the costs of construction, depreciation and amortization, amounted to R$ million, a reduction of 2.1% relative to 2Q13 (R$ million). In the light of the foregoing factors, the segment recorded negative EBITDA of R$ million and Net Income of -R$ million in 2Q14. Considering the ACR contributions in May and June, EBITDA would have been R$ 2.9 million and Net Income R$ million. The distributor segment s EBITDA would be R$ million and Net Income, R$ million if the variation in regulatory assets and liabilities are considered. Adjusted regulatory assets and liabilities (pro-forma and unaudited). EDP Escelsa 2Q14 2Q13 2Q14 2Q13 2Q14 2Q13 Chg. Net Revenue 1 618, , , ,192 1,078,572 1,033, % Non-manageable expenditures (544,045) (453,760) (459,944) (227,135) (1,003,989) (680,895) 47.5% Gross Margin 74, ,744 (178) 219,057 74, , % Manageable expenditures 2 (106,914) (92,836) (92,315) (110,651) (199,229) (203,487) -2.1% Depreciation and amortization (22,130) (21,312) (24,495) (23,759) (46,625) (45,071) 3.4% EBITDA (32,153) 40,908 (92,493) 108,406 (124,646) 149,314 n.a. EBITDA adjusted with ACR contributions (19,107) 40,908 21, ,406 2, , % EBITDA Margin -5.2% 7.0% -20.1% 24.3% -11.6% 14.4% p.p. Net Income (37,684) 3,099 (82,222) 46,380 (119,906) 49,479 n.a. Net Income ajusted with ACR (29,074) 3,099 (6,657) 46,380 (35,731) 49,479 n.a. (1) Net Revenue do not include construction process revenue (2) Manageable expenditures do not include depreciation, amortization and construction costs. Distribution 23

24 2Q14 EDP Bandeirante EDP Escelsa Distribution EBITDA as reported in IFRS (32,153) (92,493) (124,646) Variation of balance of Regulatory Assets and Liabilities 143, , ,399 EBITDA + balance of regulatory Assets and Liabilities 111,585 85, ,753 EDP EDP 2Q14 Distribution Bandeirante Escelsa Profit reported in IFRS (37,684) (82,222) (119,906) Variation of balance of Regulatory Assets and Liabilities 143, , ,399 Monetary adjustment 5,404 10,765 16,169 IR/CS (50,708) (64,065) (114,773) Profit + balance of regulatory Assets and Liabilities 60,750 42, ,889 EDP EDP 6M14 Distribution Bandeirante Escelsa EBITDA as reported in IFRS 34,993 (20,854) 14,139 Const. Regulatory Assets and Liabilities 174, , ,901 EBITDA + balance of regulatory Assets and Liabilities 209, , ,040 EDP EDP 6M14 Distribution Bandeirante Escelsa Profit reported in IFRS (6,074) (64,685) (70,759) Const. Regulatory Assets and Liabilities 174, , ,901 Monetary adjustment of Regulatory Assets and Liabilities 7,091 16,943 24,034 IR/CS (61,840) (58,838) (120,678) Profit + balance of regulatory Assets and Liabilities 113,969 49, ,498 Regulatory Assets and Liabilities (unaudited information and subject to change) Regulatory assets and liabilities are no longer booked to the corporate income statements in line with Accounting Pronouncement Committee (CRC) guidance and the new generally accepted Brazilian accounting standards (IFRS). In 2Q14, Group distributors Regulatory Assets stood at R$ million. The following table shows outstanding balances and variations in regulatory assets and liabilities. These are no longer booked to the accounts in line with the new Brazilian accounting standards (IFRS): Market BANDEIRANTE ESCELSA Regulatory Assets 2Q13 3Q13 4Q13 1Q14 2Q14 2Q13 3Q13 4Q13 1Q14 2Q14 Constitution of CVAs 339, , , , , ,656 55,026 88, , ,334 Amortization of CVAs 37,392-67,921 45,280 22,640 1,216 45,059 31,543 18,022 4,506 Low Income Subsidy Deficit of PLPT Pass through over-contracted energy 13,182 18,571 17,467 50,365 84,460 10,739 2,832 29,560 22, ,025 Subsidies and Others 4,206 14,289 11,010 19,342 57,389 95,218 34,108 27,501 37,094 51,180 Final Balance 394, , , , , , , , , ,045 Regulatory Liabilities 2Q13 3Q13 4Q13 1Q14 2Q14 2Q13 3Q13 4Q13 1Q14 2Q14 Constitution of CVAs (51,518) (89,799) (14,075) (20,896) (81,007) (18,081) (7,758) (46,902) (47,959) (105,722) Amortization of CVAs (10,986) - (32,299) (21,533) (10,767) (16,643) (16,724) (11,706) (6,690) (1,671) Neutrality of Parcel A (2,998) (8,779) (5,390) (6,667) (6,905) (7,018) (6,003) (5,492) (8,337) (8,785) Pass through over-contracted energy (13,068) (23,297) (11,729) (9,168) (29,117) (5,845) (1,901) (1,331) (760) (3,298) Other Regulatory Liabilities (108,840) (112,733) (55,397) (78,782) (51,317) (112,682) (46,632) (12,105) (36,961) (12,538) Final Balance (187,410) (234,608) (118,890) (137,046) (179,113) (160,269) (79,018) (77,536) (100,707) (132,014) Net Total 206,978 20,153 98, , ,522 81,560 58,007 99,979 84, ,031 Impact on the Result for the Quarter 42,768 (186,825) 78,485 32, ,142 (37,148) (23,553) 41,972 (15,374) 188,426 24

25 Energy sold to final clients: increase of 1.3% principally due to the growth in demand from the residential, commercial and rural classes. In 1H14, year-on-year growth was 3.9%; Residential and Commercial: increase of 2.6% and 4.9%, respectively due to a 3.4% growth in the customer base despite fewer average billing days during the quarter (-2.6 days). In 1H14, growth reached 6.2% and 7.6%, respectively in relation to the same period in 2013; Industrial: reduction of 4.1% due to the migration of clients to the free market, falling physical industrial output nationwide for the period from January to May 2014 (-1.6%) compared with the same period for 2013 and fewer average billing days during the quarter (-2.6 days). In 1H14, there was a year-on-year decrease of 1.4% compared with the same period in 2013; Rural: the improvement of 7.7% in 2Q14 is due to the increase of 8.6% in EDP Escela s result for this consumer class, reflecting the resumption in agricultural production following the period of heavy rainfall in the early part of the year; Consolidated energy in transit in the distribution system (UDS), a reduction of 2.5% due to weaker industrial output in Brazil, although migration from ACR to ACL contributed to the quarterly result. For 1H14 as a whole, there was an increase of 0.7%. DISTRIBUTION Units MWh KWh* % % % Residential 2,635,445 1,425, % 2.6% -0.8% Industrial 24, ,265 13, % -4.1% -6.9% Commercial 233, ,588 1, % 4.9% 2.0% Rural 176, , % 7.7% 4.1% Other 25, ,184 5, % -0.7% -5.0% Energy Supplied to Final Customers 3,095,373 3,898, % 1.3% -2.1% Supply 3 158,212 17,579, % 12.1% - Energy in Transit (UDS) 247 2,419,794 3,265, % -2.5% - Own Consumption 230 2,908 4, % -18.4% - Total Distributed Energy 3,095,853 6,479, % 0.0% -3.3% Notes: Customers *Monthly average consumption by client Others = Public entities + Public lighting + Public services Data in R$ refers to Revenue without ICMS tax and RTE. 2Q14 Volume Avg. Consumption Customers Chg. 2Q14/2Q13 Volume Avg. Cons. - Tariff Base Annual Group disco tariff readjustments (IRT) as well as periodic tariff revisions (RTP) take place on specific dates as shown in the following charts: Tariff revisions and tariff adjustments of the distribution companies EDP Bandeirante 2011 Tariff Revision Tariff Readjustment 2013 Extraordinary Tariff Revision 2013 Tariff Readjustment EDP Escelsa 2012 Tariff Readjustment 2013 Extraordinary Tariff Revision 2013 Tariff Revision 1) Tariff revision held on October 23 rd, 2012 Average tariff at EDP Bandeirante Economic index Consumer Effect -1.85% -2.25% 11.45% 7.29% % % 10.36% 5.83% Economic index Consumer Effect 14.29% 11.33% -4.39% % 4.12% -1.05% Average Tariff (R$/MWh) 2Q14 2Q13 Var. % EDP BANDEIRANTE Residential % Industrial % Commercial % Rural % Others % Average - Final Clients % Average Tariff (R$/MWh) 2Q14 2Q13 Var. % EDP ESCELSA Residencial % Industrial % Commercial % Rural % Others % Average - Final Clients % Note: Considers the Revenue without ICMS, RTE, PIS and COFIN 25

26 The 2Q14 average tariff increased 7.5% compared to 2Q13 due to the tariff readjustment of 10.36% (economic index), effective October 23, 2013 (average effect in consumer bills of 5.83%). In addition to the tariff readjustment, consumer classes saw the additional following variations: - Residential: increase of 16% in the low income residential customer base; - Industrial: increase of 11% in active peak hour demand; - Commercial: increase of 53% in demand; - Rural: increase of 24% in peak hour demand; - Others: increase of 47% in demand. Average tariff at EDP Escelsa The average tariff in 2Q14 fell 1.5% relative to 2Q13 due to the tariff revision, effective August 07, 2013, the revision having an average effect on consumer bills of -1.05%. In addition to the tariff revision, consumer classes saw the additional following variations: - Residential: reevaluation of the customer base with reclassification of low income residential customers; - Industrial: increase of 12.58% in demand; 16.63% in peak hour consumption and 44.97% in demand in excess of that contracted; - Commercial: increase of 4.72% in demand; - Rural: reduction of 6.19% in demand; 27.00% in excess demand over contracted demand and 80.3% in excess reactive consumption; - Others: reduction of 45.28% in peak hour consumption in the government class and an increase in demand from the public utility class. - Consolidated Energy Balance 2Q14 - ENERGY BALANCE (MWh) Itaipu + Proinfa Transmission Losses Wholesale Supply 1,080,649 73,617 Required 158,212 Auction Losses from Itaipu 2,911,722 55,627 ( - ) = Others Short Term Sales 1,031,171-54,254 Energy Energy in Transit Short Term Adjustments 7,286,955 2,419,794 27,118 Retail Supply 3,901,078 Losses and Diferences 807,871 Energy in Transit 2,419,794 The distribution system s energy volume requirements totaled 7,287 GWh in 2Q14. Of this total, 57% was allocated to EDP Bandeirante and 43% to EDP Escelsa. Retail supply to final consumers, proprietary consumption and wholesale deliveries accounted for 4,867 GWh and energy in transit distributed to free customers, 2,420 GWh. - Losses Non-technical (commercial) losses rose 0.18 p.p. in the case of EDP Bandeirante and 0.28 p.p. at EDP Escelsa compared to 1Q14, a reflection of unbilled energy due to the programming of meter reading shifts. Technical losses at the distributors remained stable in relation to 1Q14. 26

27 Accumulated losses in last 12 months (GWh or %) Input of Energy in Network (A) Technical (B) Non-technical (C) Total (B + C) Technical (B / A) Non-technical (C / A) Total (B+C / A) EDP Bandeirante EDP Escelsa Sep-13 Dec-13 Mar-14 Jun-14 ANEEL Sep-13 Dec-13 Mar-14 Jun-14 ANEEL 16,857 17,013 17,233 17,189 12,110 12,144 12,286 12, ,746 1,678 1,664 1,688 1,697 1,599 1,625 1, % 5.53% 5.53% 5.52% 4.90% 8.04% 7.81% 7.60% 7.61% 6.70% 4.84% 4.34% 4.12% 4.30% 3.81% 5.96% 5.36% 5.63% 5.91% 3.64% 10.36% 9.86% 9.65% 9.82% 8.71% 14.01% 13.17% 13.23% 13.52% 10.34% Low Tension Accumulated losses in last 12 months (GWh or %) Low Tension Demand (D) Low Tension Commercial Losses (C/D) Total (C /D ) EDP Bandeirante EDP Escelsa Sep-13 Dec-13 Mar-14 Jun-14 ANEEL Sep-13 Dec-13 Mar-14 Jun-14 ANEEL 5,214 5,302 5,439 5,450-4,046 4,090 4,143 4, % 13.92% 13.07% 13.55% 11.83% 17.85% 15.92% 16.68% 17.45% 10.51% 15.64% 13.92% 13.07% 13.55% 11.83% 17.85% 15.92% 16.68% 17.45% 10.51% In 2Q14, the distributors disbursed R$ 11.9 million in programs for combating loses. Of these resources, R$ 8.3 million was dedicated to operational investments (substitution of meters, installation of a special network and telemeasurement) and R$ 3.6 million in manageable expenses (inspections and dismantling of irregular hookups). During the period, the distributors carried out approximately 52.7 thousand inspections, 18.6 thousand obsolete meters were replaced and 1.9 thousand clandestine hookups regularized, resulting in the recovery of about R$ 31.7 million in back revenue. In addition to the revenue recovered, the opportunity cost of not taking any action to inhibit fraud and illegal hookups should also be considered in order to properly evaluate the efficacy of initiatives for controlling the Company s non-technical commercial losses. Distribution Companies dec/12 mar/13 Jun-13 sep/13 dec/13 mar/14 jun/14 CAPEX - Operational investiments (R$ million) OPEX - Manageable Expenses (R$ million) Inspections (thousands) Regularizations (thousands) Dismantling (thousands) Revenue Recovery (R$ milhões) Quality Indicators Both distributors DEC indicators were below ANEEL s regulatory ceiling. EDP Bandeirante s DEC reading was 7.41 hours in 2Q14, a reduction of 1.83 hours (-19.8%) in relation to 2Q13. At EDP Escelsa, DEC registered 9.61 hours in 2Q14, a reduction of 1.07 hours (-10.0%) compared with 2Q13. Both distributors FEC indicators also remained below the regulatory ceiling. EDP Bandeirante recorded a reading of 5.33 times in 2Q14, a reduction of 0.44 times in relation to 2Q13 (-7.6%). EDP Escelsa recorded a FEC reading of 6.10 times in 2Q14, a reduction of 0.30 times compared with 2Q13 (-4.7%). In June 2013, Group distributors introduced a program for improving their DEC performance (Dec Down Program), the objective being to increase the quality of the service, group efficiency and to meet ANEEL s service quality parameters. Both programs involve the upgrading of preventive maintenance, work on improvements, expansion of network automation, maximization of use of resources by field crews, among others. EDP Energias do Brasil will continue efforts to improve its quality indicators through investments in the distribution network so as to enhance the quality of service provided to customers. 27

28 ANEEL Annual Benchmark EDP Bandeirante: DEC 9.05 / FEC: 7.55 EDP Escelsa: DEC: / FEC: 8.11 DEC equivalent duration of interruption per consumer FEC: equivalent duration of interruption per consumer 5.3. Commercialization Items in R$ thousand or % 2Q14 2Q13 Chg. 6M14 6M13 Chg. Net Revenue 579, , % 1,259, , % Non-manageable expenditures (565,824) (400,272) 41.4% (1,190,163) (866,507) 37.4% Gross Margin 14,001 15, % 69,554 71, % Manageable expenditures (2,148) (1,746) 23.0% (7,030) (6,828) 3.0% EBITDA 11,853 14, % 62,524 64, % EBITDA Margin 2.0% 3.4% -1.4 p.p. 5.0% 6.9% -1.9 p.p. Net Income 6,687 8, % 39,062 41, % Commercialized energy volume totaled 2,872 GWh in 2Q14, a decrease of 7.7% compared to 3,111 GWh commercialized in 2Q13. This increase reflects the strategy of concentrating seasonal weighting in 1Q13. In 1H14, volume was 6,330 GWh, 4.8% higher than the 6,041 GWh commercialized in 1H13. In 2Q14, net revenues were R$ million, 39.3% more than for 2Q13 (R$ million). This growth was due to commercialized energy volume and to the increase of 49.8% in the average selling price in the quarter due to spiraling free market prices and the annual readjustment in long term supply agreements signed in previous fiscal years. In 1H14 as a whole, net revenue was R$ 1,259.7 million, an increase of 34.3% over the same period for Non-manageable expenditures increased 41.4% in 2Q14 (R$ million) compared to 2Q13 (R$ million) due to the increase of 52.1% in average purchasing prices. Manageable expenditures grew 23.0% in 2Q14 (R$ 0.4 million) and 3.0% in 1H14 (R$ 0.2 million) in relation to the same periods in 2013 due to an increase in payroll and outsourced service costs. EBITDA reached R$ 11.9 million, 16.4% down on 2Q13 (R$ 14.2 million). In 1H14, EBITDA reached R$ 62.5 million, a year-on-year decline of 3.2%. Net income for the segment was R$ 6.7 million in 2Q14, 19.5% less than 2Q13. The commercialization segment reported a net income of R$ 39.1 million in 1H14, a 5.3% decline in relation to the same period in

29 6. Capital Markets 6.1. Share Performance On June 30, 2014, EDP Energias do Brasil s shares (ENBR3) at market closing were quoted at R$ During the quarter, ENBR3 posted an appreciation of 13.1%, surpassing the performance of the Ibovespa stock index, which closed showing an appreciation of 5.5%, and in line with the Electric Energy stock index (IEE), which ended the quarter 13.3% higher. For the accumulated year to date, ENBR3 reported an appreciation of 2.6%, Ibovespa, 3.2% and IEE 7.2%. As of June 30, 2014, the Company s market capitalization was R$ 5.2 billion compared to R$ 4.6 billion on March 31, 2014, already incorporating into closing prices an adjustment for earnings on the respective dates. EDP Energia s shares were traded on all the days the stock market was open for business during the quarter, totaling million shares negotiated in the period and equivalent to a daily average of 2.2 million shares. Financial volume totaled R$ 1,324.5 million in 2Q14 with a daily average volume of R$ 22.1 million. Note: Prices adjusted for earnings. 29