4Q12 Earnings Release
Transcript of 4Q12 Earnings Release
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Rio de Janeiro, March 25, 2013
Consumption grows 5.2% and EBITDA totals
R$484 million in 4Q12 Total energy consumption in 4Q12 was 5.2% higher year-over-year, amounting to 5,965 GWh, driven by the higher
temperature and the 13.5% increase in commercial consumption;
In the quarter, consolidated Net Revenue, excluding construction revenue, came to R$1,963.6 million, 24.5% up on
4Q11. All the Company’s business segments recorded a revenue upturn, led by distribution, which increased by
23.1%;
Consolidated EBITDA1111 amounted to R$483.9 million in 4Q12, 49.5% up on 4Q11. Adjusted by non-recurring effects
and by the regulatory asset (CVA), Adjusted EBITDA amounted to R$493.1 million in the quarter, 38.6% higher year-
over-year, driven by the good performance of the distribution market coupled with the tariff adjustment in
November. EBITDA margin in the quarter stood at 24.6%, compared to 20.5% year-over-year;
Net income in 4Q12 was up 21.3%, totaling R$160.0 million, compared to R$131.9 million year-over-year, as a
result of the better operating performance;
1EBITDA is calculated in accordance with CVM Instruction 527/2012 and means: net income + income tax and social contribution tax + financial
expenses, net + depreciation and amortization.
M&FBOVESPA: LIGT3 Conference Call: RI Contacts:
OTC: LGSXY Date: 03/27/2013
otal Shares: 203,934,060 shares Time: 4 p.m. Brazil // 3 p.m. US ET Fax: +55 (21) 2211-2787
ree Float: 70,175,480 shares (34.41%) Phones: +55 (11) 2188 0200 // +1 (646) 843 6054 E-mail: [email protected]
Market Value (03/22/13): R$ 3,752 milhões Webcast: www.light.com.br Website: www.light.com.br/ri
Phone: +55 (21) 2211-2650/ 2660
4Q12 4Q11 Var. % 2012 2011 Var. %
Grid Load* 9,625 8,716 10.4% 36,409 34,983 4.1%Billed Energy - Captive Market 5,114 4,904 4.3% 20,054 19,877 0.9%
Consumption in the concession area 5,965 5,673 5.2% 23,384 22,932 2.0%Transported Energy - TUSD 851 769 10.8% 3,330 3,056 9.0%Sold Energy - Generation 1,269 1,380 -8.1% 5,373 5,523 -2.7%
Commercializated Energy (Esco) 413 434 -4.8% 1,719 1,620 6.1%
Non-Tecnical Losses 45.4% 40.4% 5 p.p. 45.4% 40.4% 5 p.p.
4Q12 4Q11 Var. % 2012 2011 Var. %
Net Revenue** 1,964 1,577 24.5% 6,944 6,150 12.9%EBITDA 484 324 49.5% 1,456 1,238 17.7%EBITDA Margin** 24.6% 20.5% 4.1 p.p. 21.0% 20.1% 0.9 p.pNet Income 160 132 21.3% 424 342 24.0%
Net Debt*** 4,273 3,383 26.8% 4,273 3,383 26.8%
Capex 269 336 -19.9% 797 929 -14.2%* Captive market + los ses + network use
** Does not consi der construction revenue
*** Financial Debt - Cash
Operational Highlights (GWh)
Financial Highlights (R$ MM)
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The Company closed December 2012 with a net debt of R$4,273.1 million, up 26.3% compared to December 2011.
For the purposes of the covenants the Net Debt/EBITDA ratio stood at 2.9x;
Non-technical energy losses over the last 12 months accounted for 45.4% of billed energy in the low-voltage
market (ANEEL criterion), 5.0 p.p. up on December 2011, strongly impacted by the change in the treatment of clients with long-term default;
On March 25, the Board of Directors approved the distribution of dividends in the amount of R$91,770,327.00, or,
R$0.45 per share, based on profit reserves existing in the balance sheet of December 31, 2012. Such amount,
together with those already decided in the year, corresponds to an 86,5% payout of adjusted net income for the
year and plus payments during the year lead to a dividend yield of 7.68%. The proposal will be submitted to the
approval of the shareholders at an Ordinary General Meeting (OGM) to be called.
4Q11 ResultsResults for 4Q11 were reclassified due to a change in an accounting practice regarding the recording of actuarial
gains or losses related to defined benefit pension schemes, which used to be recognized in the income statement for
the year and now are recognized in shareholders’ equity, in compliance with CVM Deliberation 600/09. This
accounting practice allows for more relevant information to be presented and will be consistent for the next fiscal
years for recording actuarial gains or losses. To comply with CVM Deliberation 592/09, comparative balances were
duly adjusted to reflect the change retrospectively.
The reclassification impacted the following income statement accounts for 4Q11: Financial Expenses (R$47.5 million
decrease); Income Tax/Social Contribution Tax (R$16.1 million increase); and Net Income (R$31.3 million increase).
In addition to the pension scheme-related adjustments, EBITDA amounts for FY 2011 and in 4Q11 were also
reclassified in this release to reflect the impact of CVM Instruction 527/2012, which states that EBITDA should be
calculated based on the net income for the period, plus income taxes, financial expenses net of financial revenue and
depreciation, amortization and depletion.
For further information see ANNEX V.
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Table of Contents 1. The Company ....................................................... ................................................................ ..................... 4
2. Operating Performance .................................................................. .......................................................... 5
2.1 Distribution ..................................................................................................... .................................... 5
Energy Balance ................................................................................................................................. 8
Energy Losses ................................................................................................................................... 9
Communities .................................................................................................................................. 11
Collection ....................................................................................................................................... 12
Operating Quality .......................................................................................................................... 13
2.2 Generation .................................................................................................................... .................... 14
2.3 Commercialization and Services ................................................................... .................................... 14
3. Financial Performance ..................................................................... ....................................................... 15
3.1 Net Revenue ............................................................... ................................................................ ...... 15
Consolidated .................................................................................................................................. 15
Distribution .................................................................................................................................... 16
Generation ..................................................................................................................................... 16
Commercialization and Services.................................................................................................... 17
3.2 Costs and Expenses .......................................................................................................................... 17
Consolidated .................................................................................................................................. 17
Distribution .................................................................................................................................... 18
Generation ..................................................................................................................................... 21
Commercialization and Services.................................................................................................... 22
3.3 EBITDA ........................................................................................... ................................................... 23
Consolidated .................................................................................................................................. 23
Distribution .................................................................................................................................... 25
Generation ..................................................................................................................................... 25
Commercialization and Services.................................................................................................... 25
3.4 Consolidated Financial Results .............................................................................................. ........... 26 3.5 Debt .................................................................................................. ................................................ 28
3.6 Net Income ................................................................................ ....................................................... 30
3.7 Investments ...................................................................................... ................................................ 31
Generation Capacity Expansion Projects ............................................................ .......................... 33
4. Cash Flow ............................................................... ................................................................ ................. 36
5. Corporate Governance ........................................................................................................................... 37
6. Capital Markets ...................................................................................................................................... 39
Dividends........................................................................................................................................ 40 7. Recent Events ......................................................................................................................................... 42
8. Disclosure Program................................................................................................................................. 43
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1. The Company
Light S.A. is a holding company that controls subsidiaries and affiliated companies in three main business segments:
electricity distribution, generation and commercialization/services. In order to increase the transparency of its
results and enable investors to make a better evaluation, Light also presents its results in a segmented form. The
Company’s corporate structure as of December 2012 is shown below:
OPERATING INDICATORS 4Q12 4Q11 Var. %
Nº of Consumers (thousand) 4,030 4,128 -2.4%
Nº of Employees 4,223 4,134 2.2%
Average provision tariff - R$/MWh 464.5 424.8 9.3%
Average provision tariff - R$/MWh (w/out taxes) 323.7 293.4 10.3%
Average energy purchase cost¹ - R$/MWh 134.3 107.1 25.4%
Installed generation capacity (MW) 942 866 8.7%
Assured energy (MW)) 687 685 -
Pumping and internal losses (MW) 87 87 -
Available energy (Average MW) 600 598 -
Net Generation (GWh) 1,157 1,266 -8.6%
Load Factor 63.4% 64.6% -
¹Does not incl ude purchase on spot.
Light S.A.(Holding)
100% 51% 20%100% 100% 100%100% 100%51% 25.5%100%
Light Serviçosde Elet ricidade
S.A.
Lightger
S.A.
Itaocara
EnergiaLtda.
Amazônia
Energia S.A.
Light EscoPrestação deServiços S.A.
LightcomComercializadora
de Energia S.A.
Light Soluçõesem Elet ricidade
Ltda.
Instituto
Light
Axxiom
SoluçõesTecnológicas
S.A.
CR ZongshenE-Power
Fabricadora deVeículos Ltda.
Guanhães
Energia
S.A.
21.99%
Renova
EnergiaS.A.
Central EólicaFontainha
Ltda.
100%
Central EólicaSão Judas
Tadeu Ltda.
100% 9.77%
Norte
EnergiaS.A.
33%
EBL Cia deEficiênciaEnergética
S.A.
Light Energia
S.A.
Distribution Generation Commercialization and Services Institutional Systems ElectricVehicles
51%
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2. Operating Performance
2.1 Distribution
Total energy consumption in Light SESA’s concession area (captive clients + transport of free clients 2) came to 5,965
GWh in 4Q12, 5.2% up on 4Q11, chiefly due to the increase in commercial consumption.
If consumption from free client CSN is taken into account, total consumption came to 6,416 GWh in 4Q12, 6.1%
higher than consumption in 4Q11, which totaled 6,046 GWh.
Residential consumption totaled 2,032 GWh in the quarter, accounting for 34.1% of the total market. During this
period, consumption was primarily impacted by two effects: (i) the termination of clients with long-term default, and
(ii) the reclassification of condominiums from the residential to the commercial segment pursuant to an ANEEL
resolution. Even with such effects, there was a 1.3% increase in residential consumption year-over-year. Excluding
these impacts, residential increase would have been 9.5%.
This change was influenced by higher temperatures in the quarter, primarily in December when temperatures in
excess of 30.0 °C were recorded on 18 days. On December 26, the city of Rio de Janeiro recorded a temperature of
43.2 °C, the highest since measurements by Inmet began, in 1915. In addition, minimum temperatures were also
higher in December, which increased the monthly average by 3.6 °C when compared to the same month in 2011.
2 To preserve comparability with the market approved by ANEEL in the tariff adjustment process, the billed energy of the free
consumer CSN was excluded, in view of this client’s then planned migration to the core network. Energy consumption by CSN
totaled 451 GWh in 4Q12 and 374 GWh in 4Q11.
4Q11 4Q12 4Q11 4Q12 4Q11 4Q12 4Q11 4Q12 4Q11 4Q12
2,006 2,032
452 384
1,587 1,795
860 903
4,904 5,114
558 612
165192
46 47
769851
TOTAL ENERGY CONSUMPTION (GWh)
(CAPTIVE + FREE) - QUARTER
Captive Free
Residential Industrial Commercial Others Total
1,752 1,988
905 9491,010 996
5,6735,965
1.3%
-1.3%
13.5%
4.9%
5.2%
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The number of billed residential clients fell by 3.4% to 3,684,000 in December 2012, with an average monthly
consumption of 183.9 kWh in 4Q12, versus 175.4 kWh in 4Q11.
Industrial consumption amounted to 996 GWh, equivalent to 16.7% of the total market, 1.3% down on the fourth
quarter of 2011. Between 4Q11 and 4Q12, 13 clients, whose consumption totaled 71 GWh, migrated from the
captive to the free market.
Commercial clients consumed 1,988 GWh, 13.5% more than in 4Q11, accounting for 33.3% of the total. Excluding the
reclassification of condominiums, commercial consumption moved up by 8.7%. Another 25 clients joined the free
market in 4Q12, having been recorded under captive clients in 3Q12, resulting in an 18 GWh increase in free market
consumption in the period.
The other consumption segments, which accounted for 15.9% of the total market, posted an upturn of 4.9% over
4Q11, with the rural, government and public utilities categories, which represented 0.2%, 7.0% and 5.5% of the total
market, respectively, recording an increase of 2.8% and 12.0%, and a reduction of 1.3% year-over-year, respectively.
In compliance with ANEEL Resolution 414, Light changed its policy towards clients with long-term default, and began
terminating their contracts. In 2012, approximately 170,000 clients located in areas where traditional collection
initiatives are not effective were suspended. This measure also reduced billed consumption by approximately 229
GWh in the year and was reflected in energy losses, although there was no negative impact on cash generation. If the
consumption that was unbilled due to the change in the policy were included, total consumption would have
increased by 3.0% when compared to 2011.
2011 2012 2011 2012 2011 2012 2011 2012 2011 2012
8,418 8,149
1,731 1,528
6,310 6,8563,417 3,521
19,877 20,054
2,213 2,396
657 743
185 191
3,056 3,330
TOTAL ENERGY CONSUMPTION (GWh)
(CAPTIVE + FREE) - YEAR
Captive Free
Residential Industrial Commercial Others Total
6,967 7,599
3,603 3,7123,944 3,925
22,932 23,384
-3.2%
-0.5%
9.1%
3.0%
2.0%
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Total energy consumption in LIGHT SESA’s concession area (captive clients + transport of free clients3) amounted to
23,384 GWh in 2012, 2.0% up on 2011. Commercial consumption presented the best result, with a 9.1% growth. This
may be explained by the expansion of the commercial and services industries in Rio de Janeiro over the last years
and also by the reclassification of condominiums from the residential to the commercial segment. Excluding this
reclassification, the commercial segment would be up 5.9% year-over-year, as a result of the commercial expansion
in Rio de Janeiro.
If consumption of the free clients CSN and CSA (the latter in 1Q11 only) is taken into account, total consumption
came to 25,003 GWh in 2012, as compared to 24,658 GWh in 2011.
Residential consumption totaled 8,149 GWh in 2012, accounting for a 34.8% share in the total market, 3.2% down on
2011, chiefly due to the impact of the termination of contracts with clients with long-term default and the
reclassification of condominiums from the residential to the commercial segment. Excluding these effects, residential
consumption increased by 2.3%. Average monthly consumption fell from 185.2 kWh in 2011 to 181.3 kWh in 2012.
In 2012, industrial consumption amounted to 3,925 GWh, 0.5% down on 2011. Twelve clients in this segment, whose
consumption totaled 151 GWh in 2012, migrated from the captive to the free market, while one client, with average
monthly consumption of 1.5 GWh, migrated from the free to the captive market in June 2012. The industrial
segment accounted for 16.8% of the total market in 2012.
Commercial clients consumed 7,599 GWh, accounting for 32.5% of the total, with the retail, building services, and
health-related services doing particularly well, with respective increases of 3.7%, 41.4% and 5.5%, and corresponding
shares of 22.5%, 13.0% and 4.1%. Another 25 clients joined the free market in 2012, having been recorded under
captive clients in 2011, resulting in a 34 GWh increase in free market consumption.
3 To preserve comparability with the market approved by ANEEL in the tariff adjustment process, the billed energy of the free
consumers CSN and CSA was excluded, in view of these clients’ then planned migration to the core network. Energy consumption
by these clients totaled 1,619 GWh in 2012 (Only CSN) and 1,725 GWh in 2011 (CSN + CSA).
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Energy Balance
Energy Balance (GWh) 4Q12 4Q11 Var.% 2012 2011 Var.%
= Grid Load 9,625 8,716 10.4% 36,409 34,983 4.1%
- Energy transported to utilities 582 667 -12.8% 2,637 2,901 -9.1%
- Energy transported to free customers* 1,306 1,133 15.3% 5,018 4,664 7.6%
= Own Load 7,737 6,915 11.9% 28,755 27,418 4.9%- Captive market consumption 5,114 4,904 4.3% 20,054 19,877 0.9%
Low Voltage Market 3,351 3,147 6.5% 13,207 12,985 1.7%
Medium Voltage Market 1,763 1,757 0.3% 6,847 6,891 -0.6%
- Losses + Non Billed Energy 2,623 2,011 30.4% 8,701 7,542 15.4%
*Including CSN (in 1Q11) a nd CSA
545.7 8,149.0
CCEAR Billed Industrial
Light Energia Energy 1,528.3
284.5 20,054.0
Commercial28,754.5 6,855.9
Losses + Non Billed5,351.5 Energy Others
29,301.6 8,700.5 3,520.9
16,306.0
6,368.4
445.5
(*) Others = Purchase in Spot - Sale in Spot.
Note: 1) At Light S.A., there is intercompany power purchase/sale elimination
2) Power purchase data as of 01/08/2013 (subject to change)
DISTRIBUTION ENERGETIC BALANCE - GWh
PROINFA
ITAIPU
(CCEE) Required E.
(CCEE)
Residential
Position: January - December 2012
NORTE FLU
(CCEE)
OTHERS(*)
(CCEE)
Own load
Light
Basic netw. Losses 530.10
16.92Adjustment
AUCTIONS
(CCEE)
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Energy Losses
Light SESA’s total energy losses amounted to 8,584 GWh, or 23.6% of the grid load, in the 12 months ended
December 2012, 1.9 p.p. and 0.9 p.p. up on December 2011 and September 2012, respectively.
In the same period, non-technical energy losses totaled 6,007 GWh, accounting for 45.4% of billed energy in the low-
voltage market (ANEEL criterion), (16.5% of the grid load) 2.3 p.p. up when compared to the losses of September
2012.
The increase in non-technical energy losses rate in the low-voltage market was impacted by the high temperatures
recorded during 2012, specially in the fourth quarter, and primarily by the initiative implemented at the beginning of
the year related to the termination of contracts with clients presenting long-term default in areas where traditional
collection initiatives are not effective, pursuant to ANEEL Resolution 414. There was no impact on cash generation,
however.
In regard to the program of new technologies to reduce losses, the pace of installation exceeded expectations for
2012, reaching a total of 341,000 electronic meters installed and 281,000 clients with a protected network in
December.
Dec-11 Mar-12 Jun-12 Sep-12 Dec-12
7,582 7,665 7,838 8,047 8,584
Light Losses Evolution
12 months
Losses (GWh)
21.7% 22.0% 22.3% 22.7% 23.6%
15.0% 15.3% 15.6% 15.8% 16.5%
Losses / Grid Load % Non-Tecnical Losses / Grid Load
Dec-11 Mar-12 Jun-12 Sep-12 Dec-12
5,247 5,316 5,457 5,615 6,007
Non tecnical losses / Low Voltage market
12 months
Losses (GWh)
40.4% 41.2% 42.2% 43.1%45.4%
35.1% 34.7% 34.2% 33.8% 33.3%
Non-Technical Losses % Low Voltage Mkt Regulatory Losses
2011 2012
67,964
53,266
Normalized Costumers
-21.6%
dez-11 dez-12
208
341
Electronic Meters Installed
(thousand units)
63.9%
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Conventional energy recovery processes, such as the negotiation of amounts owed by clients where fraud has been
detected, resulted in the recovery of 125.2 GWh in 2012, 26.0% down on 2011. Fraud regularization programs
yielded a total of 53,266 normalized clients, 21.6% less than in 2011. Despite the decline in both indices, the new
strategy increased incorporated energy by 12.5% to 157.9 GWh, underlining the effectiveness of the regularization
and inspection procedures.
Light has invested in a new approach to prevent losses and default. The Zero Loss Area program (ZLA) began to be
implemented in 2H12. The Company created small areas with 10 to 20 thousand clients and uses a contractor solely
focused on enhancing loss and default indicators.
The project, commercially known as “Light Legal”, is supported by SEBRAE to train partnering microentrepreneurs,
had 13 operating ZLAs at year end and included approximately 200 thousand clients, especially at the Baixada
Fluminense region, the West End (Zona Oeste) and the North End (Zona Norte). The 2013 goal is to reach a total of
30 Light Legal units, including approximately 400 thousand clients.
The ZLAs opened in 2012 have electronic meters and a shielded network. Since the adoption of this equipment, non-
technical losses, which previously accounted for 45% of losses on average, have experienced a reduction of
approximately 20 p.p.
2011 2012
169.3
125.2
Recovered Energy (GW)
-26.0%
2011 2012
140.4
157.9
Energy Incorporation (GW)
12.5%
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Communities
The program to improve energy supply quality and reduce losses in the communities remains one of the Company’s
priorities and has shown good results. Since the beginning of the program, the Company has connected 72,737
clients to the new grid and meters. In 2012, 12,004 refrigerators and 390,575 bulbs were replaced as part of the
energy efficiency program and 192.63 mi of cable were replaced by a stronger and shielded network, thus preventing
energy theft and outages.
Efficient Community Project (Projeto Comunidade Eficiente)
According to an ANEEL decision, at least 0.5% of Net Operating Revenue must be applied in Energy Efficiency
Programs, and 0.3% of Net Revenue must be aimed at low-income consumers.
The goals of the energy efficiency project include social responsibility and citizenship initiatives, the offer of high-
quality energy supply for the communities, the end of illegal electricity consumption, and the reduction in default
levels.
Up to 2012, energy efficiency initiatives benefited more than 400 thousand clients.The project’s advantages involve
the remodeling of electrical installations, the adoption of electric-shower heat-recovery and temperature-controlling
systems, the replacement of incandescent bulbs with compact fluorescent ones, the replacement of high-
consumption refrigerators with more modern and efficient equipment, visits and educational events on the rational
and safe use of electricity, including environmentally-friendly disposal practices. Between 2003 and 2012, the project
donated approximately 1,3 million fluorescent bulbs and 45 thousand refrigerators, contributing to a more efficient
consumption of electricity by consumers.
In 2011, the Company began a pilot project called Light Recycles (Light Recicla) at two eco-points in the Botafogo
district: in the communities of Santa Marta and Humaitá. The project was based on the trade of recyclable materials
for discounts on electricity bills. Thanks to its acceptance, Light Recycles opened six additional eco-points in the
following communities: Chapéu Mangueira, Babilônia, Santa Marta, Chácara do Céu, Rocinha e Cruzada São
Sebastião. This project provides several advantages for the population, such as proper waste disposal, reduction of
trash-collection expenses, and income generation, providing a new way of paying for electricity bills.
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Collection
The 4Q12 collection rate totaled 95.5% of billed
consumption, 1.0 p.p. down year-over-year,
which may be chiefly due to the Large Clients
segment, where collection was impacted by the
billing cycle, with a large concentration of bills
that are due at the end of the month, which will
be collected in the next quarter. Retail collection
in the quarter increased 1.0 p.p., from 92.5% in
4Q11 to 93.5% in 4Q12.
In the year, the collection rate stood at 98.0% of
billed consumption, 0.6 p.p. up on 2011, with the
retail segment doing particularly well up 2.1 p.p.
year-over-year. The Large Clients segment was
down 2.2 p.p. when compared to 2011, impacted
by the billing cycle. The good collection rate
performance is a result of the constant initiatives
from the default-combating program, such as: (i)
the change in the criterion for treating clients
with long-term default in the first half; (ii) more effective
collection campaigns; (iii) the ongoing installation of
electronic meters; and (iv) the 17.3% increase in the
number of disconnections and the 47.2% upturn in the
registration of clients with past due bills year-over-year.
In 2012, provisions for past due accounts (PCLD) totaled
R$282.6 million, accounting for 3.2% of gross billed energy,
R$31.3 million higher than the provisioned amount in 2011,
of R$251.3 million, or 3.0% of the billed energy for that
year. In 4Q12, PCLD totaled R$109.4 million, a R$74.2
million growth year-over-year. Such increase arises from the
extraordinary effect of the adjustment of the estimate for
receiving old balances from large clients, including the governmental segment, in the amount of R$111.7 million.Excluding such effect, PCLD would be equivalent to a R$2.3 million reversal, reflecting the change in the criterion for
Retail Large Costumers Public Sector Total
89.3%
99.9%
111.7%
95.5%92.5%
101.8% 101.2%
96.5%93.5%
96.4%
102.0%
95.5%
Collection Rate per Segment
Quarter
4T10 4T11 4T12
Retail Large Costumers Public Sector Total
94.1%
100.8%
107.1%
97.9%94.3%
101.0% 102.6%
97.4%96.4%98.8%
102.5%
98.0%
Collection Rate per SegmentYear
2010 2011 2012
4T12 4T11 Var. (R$) 2012 2011 Var. (R$)
PCLD 109.4 35.3 74.2 282.6 251.3 31.3
Provisions for Past Due Accounts
3.2%3.3%
3.4%
3.2% 3.2% 3.2% 3.2%3.0%
3.0%
2.9%2.4%
1.9%
3.2%
m a r - 1
0
m a i - 1 0
j u l - 1 0
s e t - 1 0
n o v - 1
0
j a n - 1
1
m a r - 1
1
m a i - 1 1
j u l - 1 1
s e t - 1 1
n o v - 1
1
j a n - 1
2
m a r - 1
2
m a i - 1 2
j u l - 1 2
s e t - 1 2
n o v - 1
2
PCLD/Gross Revenue (Billed Sales)
12 Months
PCLD/RO B Provisionamento não recorrente
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treating clients with long-term default as from March 2012, in addition to default-combating activities throughout
2012. In the year without such an effect, the PCLD represented 1.9% of gross billing of energy.
Operating Quality
Light is fully committed to maintaining the supply of high-quality electricity. In 2012, it invested R$260.6 million to
improve the quality of its supply and increase the capacity of its distribution network. In addition to improving
relations between the distributor and its clients, quality levels will be of major importance in the regulatory model,
given the rules that have already been approved for the 3rd tariff revision cycle. Companies will be encouraged to
improve their quality standards, which will be recognized through the X factor.
In 4Q12, 7.52 miles of low-voltage cable in the distribution network were replaced by multiplex cable, and 20.82
miles of medium-voltage open network cable were replaced with spacer cable. In addition, a total of 404 medium-
voltage circuits were inspected/maintained, 1,156 transformers were replaced and 21,115 trees were pruned. In the
underground distribution network, 8,097 transformer vaults and 15,443 manholes were inspected. In addition, 46
transformers and 64 switches and 925 protectors were maintained.
In 2012, the equivalent length of interruption indicator (DEC), expressed in hours, recorded 18.15 hours, while the
equivalent frequency of interruption indicator (FEC), expressed in occurrences, stood at 8.39 for the same period.
The indicators were impacted by the high temperatures recorded at the end of 2012, which generated an overload in
the system, substantially contributing to the evolution of quality indicators.
DEC
FEC
11.33
5.76
16.73
7.76
18.15
8.39
Dec e Fec - 12 Months
Dec-10 Dec-11 Dec-12
DEC
FEC
19.66
9.26
18.39
8.23
19.98
9.16
DEC e FEC - Without Purge
12 Months
Dec-10 Dec-11 Dec-12
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2.2 Generation
In 4Q12, the energy sold on the captive market (ACR) totaled 1,069.4 GWh, 1.2% down year-over-year due to
contract seasonality and returns from the Mechanism for the Offsetting of Surpluses and Deficits (MSCD), while the
energy sold on the free market (ACL) amounted to 204.7 GWh, up by 18.3% year-over-year due to the higher volume
of energy contracted. In relation to the spot market sales, this quarter was impacted by the poor hydrological
conditions of the system, represented by the low Generation Scaling Factor (GSF) levels observed in October,
November and December, of 96%, 90% and 97%, respectively. Due to these levels, Light Energia was forced to settle
the deficit related to their spot market contracts, which resulted in a 4.9 GWh balance settled at the CCEE this
quarter.
In 2012, a total of 5,372.8 GWh was sold, 2.7% down on 2011. This result was primarily impacted by the spot market
sales due to the poor hydrological conditions during the year, especially in 4Q12. In the captive market (ACR), volume
was 2.0% down due to the returns from the Mechanism for the Offsetting of Surpluses and Deficits (MCSD). Such
returns resulted in the termination of contracts in the captive market (ACR), which impacted the 20.5% sales growth
on the free market (ACL).
2.3 Commercialization and Services
In 4Q12, direct energy sales from Light Esco and LightCom,
from conventional and subsidized sources, totaled 413.3 GWh,
compared to the 434.0 GWh sold over the same period last
year. In 2012, Light Esco traded 1,719.1 GWh, a 6.1% rise in
relation to 2011.
In the services segment, the Company entered into four
contracts in 4Q12: two projects for remodeling chilled water
plants for a large hotel chain and a shopping mall in São Paulo;
one project for integrated services – sale of energy added to the remodeling of a chilled water plant – for a shopping
mall in Rio de Janeiro; and the construction of a 138 kV transmission line for a large domestic mining company.
4Q11 4Q12 2011 2012
434.0 413.3
1,620.2
1,719.1
Volume (GWh)
6.1%
-4.8%
LIGHT ENERGIA (GWh) 4Q12 4Q11 % 2012 2011 %
Regulated Contracting Environment Sales 1,069.4 1,082.0 -1.2% 4,103.0 4,185.7 -2.0%
Free Contracting Environment Sales 204.7 173.0 18.3% 746.6 619.8 20.5%
Spot Sales (CCEE) (4.9) 125.4 - 523.2 717.5 -27.1%Total 1,269.2 1,380.4 -8.1% 5,372.8 5,523.0 -2.7%
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In 2012, 13 service provision projects were carried out, of which seven are still ongoing, including a co-generation
project for a large beverage company and another related to a project for the construction of a solar power plant at
the Maracanã soccer stadium, in addition to four new projects contracted in 2012, to begin in 2013.
3. Financial Performance
3.1 Net Revenue
Consolidated
Consolidated net operating revenue totaled R$2,162.9 million in 4Q12, 19.2% up on 4Q11. Excluding revenue from
construction, which has a neutral effect on net income, consolidated net revenue increased by 24.5% to R$1,963.6
million. All of the Company’s operational segments recorded growth, led by distribution, driven by the increase in
consumption and the tariff adjustment in November, in addition to the commercialization and services segment,impacted by the higher difference settlement prices (PLD) practiced in the period.
Net Revenue (R$ MN) 4Q12 4Q11 Var.% 2012 2011 Var.%
Distribution
Billed consumption 1,497.4 1,280.9 16.9% 5,510.0 5,119.9 7.6%
Non billed energy 92.1 31.0 196.9% 98.9 16.4 503.7%
Network use (TUSD) 145.4 126.2 15.2% 568.9 499.8 13.8%
Short-Term (Spot)¹ 39.5 19.9 98.9% 67.6 45.9 47.2%
Others 20.2 0.1 18743.4% 76.9 30.3 153.7%
Subtotal (a) 1,794.7 1,458.1 23.1% 6,322.3 5,712.3 10.7%
Construction Revenue² 199.3 237.8 -16.2% 669.3 794.6 -15.8%
Subtotal (a') 1,994.0 1,695.9 17.6% 6,991.6 6,506.9 7.4%
Generation
Generation Sale (ACR+ACL) 102.7 86.0 19.4% 364.6 319.6 14.1%Short-Term¹ (0.2) - - 38.5 5.2 643.5%
Others 14.2 4.6 208.3% 37.2 11.0 239.1%
Subtotal (b) 116.7 90.6 28.8% 440.2 335.8 31.1%
Commercialization and Services
Energy Sales 67.1 44.9 49.6% 240.9 166.9 44.3%
Services 20.1 5.4 273.9% 50.3 23.3 115.9%
Subtotal (c) 87.2 50.2 73.6% 291.3 190.2 53.1%- - - -
Others and Eliminations (d) (35.0) (21.6) 61.9% (110.0) (88.1) 24.9%
Total w/out construction revenue (a+b+c+d) 1,963.6 1,577.3 24.5% 6,943.8 6,150.1 12.9%
Total (a'+b+c+d) 2,162.9 1,815.1 19.2% 7,613.1 6,944.8 9.6%
¹ Bal ance of the settlement on the CCEE
² The subsidi ary Light SESA counts revenues and cos ts, with zero margi n, related to services of construction or improvement in
infrastructure used in services of electricity distribution.
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In 2012, all business segments presented a good performance, leading to the 12.9% growth in consolidated net
revenue, excluding the construction revenue, when compared to 2011, totaling R$6,943.8 million.
Distribution
Net Revenue from distribution totaled R$1,994.0 million in 4Q12, 17.6% more than in 4Q11. Excluding revenue from
construction, net revenue from distribution amounted to R$1,794.7 million, up by 23.1% year-over-year.
The improvement was mainly due to the average energy tariff increase of 12.27% for the captive market, as of
November 7, 2012, and the high temperatures during the quarter, primarily in December, resulting in a 5.2% growth
in the total market.
Excluding revenue from construction, net revenue from distribution came to R$6,322.3 million in the year, 10.7% up
on 2011, mainly due to the 2.0% rise in total consumption coupled with the impact of the November 2011 tariff
adjustment of 7.82%.
The distribution market is mostly comprised by the residential and commercial segments, which together accounted
for 71.2% of the revenue with energy sales, while sales in the free market accounted for 9.4%.
Generation
Net revenue from generation totaled R$116.7 million in the quarter, 28.8% more year-over-year, chiefly due to: (a)
an increase in average spot market price, which was seven times higher than the average price in 4Q11 (R$
305.2/MWh in 4Q12 from R$42.4/MWh in 4Q11), coupled with the 18.3% growth in the volume of energy sold on
Residential41%
Industrial7%
Commercial30%
Others
13%
TUSD9%
Net Revenue by Class - R$ MN
2012
2,501
569
768
1,830
411
Residential35%
Industrial
7%
Commercial29%
Others15%
Free Clients14%
Electric Energy Consumption (GWh)
Year
8,149
1,528
6,856
3,521
3,330
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the free market (ACL); and (b) miscellaneous revenue, including the consolidation of Renova Energia’s revenue,
which was impacted by the opening of the wind farm, in July 2012.
Net revenue for 2012 amounted to R$440.2 million, 31.1% up on 2011, primarily due to the higher price and volume
of energy contracts traded on the free market (ACL).
Commercialization and Services
Net revenue from commercialization and services in 4QT12 was 73.6% up on 4Q11, totaling R$87.2 million, chiefly
due to both the increase in energy commercialization revenue as a result of the higher prices in 4Q12, and the
increase in services revenue, which was impacted by the new contracts signed in the quarter, especially two projects
for remodeling chilled water plants and the construction of a 138 kV transmission line for a large domestic mining
company.
In 2012, net revenue totaled R$291.3 million, 53.1% up on the same period last year, mainly due to the 44.3%
increase in energy trading revenue, which was impacted by the higher energy resale price and volume increase. This
revenue growth was also a result of the larger number of projects developed during the year in the services segment.
3.2 Costs and Expenses
Consolidated
In 2Q12, operating costs and expenses totaled R$1,776.4 million, 12.6% up year-over-year.
Excluding construction costs, consolidated costs and expenses rose by 17.7% over 4Q11, mainly led by the costs and
expenses in the distribution segment, strongly driven by non-manageable costs, up 34.1%, and the
commercialization and services segment, with a substantial rise in the volume of energy bought for trading coupled
with higher difference settlement prices (PLD), which resulted in a 50.1% increase in costs from the purchase of
energy from the traders.
Custos e Despesas Operacionais (R$ MN) 4Q12 4Q11 Var.% 2012 2011 Var.%
Distribution (1,676.9) (1,511.4) 10.9% (6,183.5) (5,825.8) 6.1%Distribution w/out Construction Revenue (1,477.5) (1,273.6) 16.0% (5,514.2) (5,031.2) 9.6%
Generation (53.4) (41.0) 30.2% (181.0) (148.7) 21.7%
Commercialization (77.9) (46.8) 66.4% (264.1) (175.1) 50.8%
Others and Eliminations 31.7 21.1 49.9% 114.6 78.1 46.8%
Consolidated w/out Construction Revenue (1,577.1) (1,340.3) 17.7% (5,844.7) (5,276.9) 10.8%Consolidated (1,776.4) (1,578.1) 12.6% (6,514.0) (6,071.6) 7.3%
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In 2012, consolidated costs and expenses, excluding construction costs, totaled R$5,844.7 million, 10.8% more than
in 2011.
Distribution
In 4Q12, distribution costs and expenses moved up by 10.9% over 4Q11. Excluding construction costs, total costs and
expenses grew by 16.0%, mainly due to the 34.1% increase in non-manageable costs and expenses, partially offset by
the 46.7% decline in manageable costs and expenses, which were impacted by non-recurring effects during the
quarter.
In 2012, distribution costs and expenses increased 6.1% over 2011. Excluding construction costs, total costs and
expenses grew by 9.6%, chiefly led by the 16.9% rise in non-manageable costs and expenses.
Non-Manageable Costs and Expenses
In 4Q12, non-manageable costs and expenses came to R$1,328.5
million, 34.1% up on the same period in 2011.
Purchased energy costs increased by 44.3% over 4Q11, mainly due
to the higher difference settlement prices (PLD) in the period,
which resulted in higher expenses in two items: (i) Availability
Contracts, thanks to the thermal plant activation orders from the
National System Operator (ONS) to replenish reservoir levels; and
Costs and Expenses (R$ MN) 4Q12 4Q11 Var.% 2012 2011 Var.%
Non-Manageable Costs and Expenses (1,328.5) (990.8) 34.1% (4,410.8) (3,772.2) 16.9%
Energy Purchase costs (1,133.5) (785.3) 44.3% (3,527.8) (2,976.1) 18.5%
Costs with Charges and Transmission (236.8) (201.5) 17.5% (866.2) (779.0) 11.2%
Others (Mandatory Costs) (4.3) (4.0) 7.2% (16.8) (17.1) -1.5%
Manageable Costs and Expenses (149.1) (279.7) -46.7% (1,103.4) (1,258.9) -12.4%
PMSO (176.0) (149.6) 17.6% (692.0) (646.8) 7.0%
Personnel (61.1) (39.9) 53.1% (256.9) (213.3) 20.5%
Material (4.0) (6.8) -41.5% (17.1) (24.9) -31.2%Outsourced Services (93.6) (94.9) -1.3% (354.2) (361.3) -1.9%
Others (17.3) (8.1) 114.6% (63.7) (47.4) 34.6%
Provisions (250.2) (56.8) 340.8% (473.1) (299.4) 58.0%
Depreciation and Amortization (80.4) (72.3) 11.1% (293.3) (306.8) -4.4%
Other Operacional/Revenues Expenses 357.5 (1.0) - 355.0 (6.0) -
Construction Revenue (199.3) (237.8) -16.2% (669.3) (794.6) -15.8%
Total costs w/out Construction Revenue (1,477.5) (1,273.6) 16.0% (5,514.2) (5,031.2) 9.6%
Total Costs (1,676.9) (1,511.4) 10.9% (6,183.5) (5,825.8) 6.1%
2011 2012
52.4% 51.9%
29.5%27.4%
16.6%16.1%
1.4%
4.7%
Purchased Energy - R$ MMYear
LEILÕES NORTE FLU ITAIPU SPOT
2,976.13,527.8
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(ii) exposure to purchases from the spot market, in light of the
higher temperatures, chiefly in December, when maximum
temperatures exceeded historical averages. In addition, other
contributing factors were: (iii) the 6.5% increase in energy
purchased volume to meet captive market demand; and (iv) the
contract adjustment with UTE Norte Fluminense in November
2012.
Costs with charges and transmission increased by 17.5%, mainly
due to the 102.5% growth in System Service Charges (ESS),
thanks to the higher number of thermal plant dispatches
outside the order of merit, when compared to the same period
in 2011.
Non-manageable costs are transferred to consumers and the increase of such costs above the regulatory level
comprises a regulatory asset (CVA) balance, to be taken into account in the next tariff readjustment, but which are
not recorded in the income statement in accordance with the International Financial Reporting Standards (IFRS).
Such regulatory assets totaled R$132.9 million in 4Q12.
The average purchased energy cost, excluding spot market purchases, amounted to R$118.9/MWh in 2012, 13.9% up
on the R$104.4/MWh recorded in 2011.
Costs and expenses with energy purchases in the year totaled R$3,527.8 million, an 18.5% increase over 2011, chiefly
due to: (i) the upturn in difference settlement prices (PLD), which drove up the cost of thermal plant availability and
spot market purchases; (ii) the readjustments to existing contracts in November 2011 and November 2012; (iii) the
increase in energy purchased volume; and (iv) the exchange variation impacting energy purchase costs from Itaipu
and UTE Norte Fluminense.
Costs with charges climbed by 11.2% between 2011 and 2012, mainly due to the annual PROINFA readjustment, in
accordance with an ANEEL Resolution, and the rise in System Service Charges (ESS), thanks to the activation of
thermal plants, dispatched outside the order of merit.
Manageable Costs and Expenses
In 4Q12, manageable operating costs and expenses, comprising personnel, materials, outsourced services,
provisions, depreciation, other operational revenues/expenses and others, totaled R$149.1 million, 46.7% down on
4Q11. This result was primarily impacted by two factors: (i) the recording – under other operating revenue/expenses
from distribution – of the asset remuneration revenue at the end of the concession, calculated based on the new
repositioned value criterion, defined by the Granting Power through Provisional Measure 579/2012, in the amount of
2011 2012
55.7% 55.8%
21.6% 21.4%
18.3% 18.0%2.6% 2.9%
1.8% 1.8%
Purchased Energy- GWh
Year
LEILÕES NORTE FLU ITAIPU SPOT PROINFA
29,419 29,713
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R$408.2 million; and (ii) non-recurring provisions totaling R$284.5 million in 4Q12. Excluding such amounts,
manageable operating costs and expenses totaled R$272.8 million, 2.5% down on 4Q11.
The following table shows the total provisions in the quarter:
The Company’s PMSO (personnel, materials, services and others) totaled R$176.0 million in the quarter, 17.6% up on
4Q11, due to the expansion on the “personnel” and “others” lines, which presented changes in the amounts of
R$21.1 million and R$9.2 million, respectively.
The 53.1% increase in the “personnel” line is mainly due to: (i) the reversal of the provision related to the Voluntary
Severance Program (PDV); and (ii) the concentration of labor capitalization for investments, both of which took place
in 4Q11, generating R$8.9 million and R$7.4 million differences, respectively, year-over-year. In addition, payroll was
impacted by the 6.0% increase from the annual collective bargaining as of June.
The 114.6% growth in the “others” line was mainly due to: (i) the highest concentration of capitalization in the car
rental and leasing account in 4Q11, generating a R$4.5 million difference; and (ii) credit from lawsuits in 4Q11, in the
amount of R$3.2 million.
The “depreciation and amortization” line rose 11.1% due to the remuneration basis preparation work, thanks to the
intensification of the unitization of property, plant and equipment in 4Q12.
The “other operating revenues/expenses” line totaled R$357.5 million in revenues, compared to a R$1.0 million
expenseregistered in the same period of 2011, mainly due to the combination of three factors: (i) the recording of
the asset remuneration revenue at the end of the concession, calculated based on the new repositioned value
criterion, defined by the Granting Power through Provisional Measure 579/2012, in the amount of R$408.2 million;
(ii) the write-off of property, plant and equipment from the change in the data system, in the amount of R$33.2
million; and (iii) the provision in the amount of R$10.0 million related to the loss expectation from the physical-
accounting reconciliation ordered by ANEEL Resolution 367/2009.
The provisions account recorded a 340.8% rise on 4Q11 due to the non-recurring effect of provisioning in the
amount of R$241.3 million in 4Q12, of which R$129.6 million for contingencies mainly related to labor suits and
Non Recurrign Events R$ Million
Loss expectation from physical-accounting conciliation ordered
by ANEEL Resolution 367/2008R$ 10.0
Write-off of Fixed Assets R$ 33.2
Provisions for Past Due Accounts by the revision of estimates
for receiving old balancesR$ 111.7
Additional provisions for contingencies for civil lawsuits and
labor, and judicial depositsR$ 129.6
Total R$ 284.5
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judicial deposits, and R$111.7 million for provisions for past due accounts (PCLD), related to the extraordinary effect
of the adjustment of the estimate for receiving old balances from large clients, including the governmental segment.
Excluding such amounts, the “provisions” line would have totaled R$8.9 million, 84.3% down on 4Q11.
In 4Q12, PCLD totaled R$109.4 million, a R$74.2 million growth year-over-year. Such increase arises from the
extraordinary effect of the adjustment of the estimate for receiving old balances from large clients. Excluding such
effect, PCLD would be equivalent to a R$2.3 million reversal, reflecting the change in the criterion for treating clients
with long-term default as from March 2012, in addition to default-combating activities throughout 2012.
Manageable costs and expenses totaled R$1,103.4 million in 2012, 12.4% down on 2011. The Company’s PMSO costs
and expenses amounted to R$692.0 million, a 7.0% increase, mainly due to the 20.5% growth in the personnel line.
In 2012, provisions for past due accounts (PCLD) totaled R$282.6 million, accounting for 3.2% of gross billed energy,
R$31.3 million higher than the provisioned amount in 2011, of R$251.3 million, or 3.0% of the billed energy for that
year. Net of the non-recurring effect in 4Q12, PCLD totaled R$170.8 million in 2012, accounting for 1.9% of gross
billed energy revenue.
Generation
In 4Q12, Light Energia’s costs and expenses amounted to R$53.4 million, an increase of 30.2% over 4Q11. Such
performance was due to the rise on the “purchased energy” line, mainly arising from the settlement of the R$4.8million deficit between the contracted and the allocated physical guarantee on the spot market and the purchase of
the energy generated by Paracambi SHP in the amount of R$3.9 million.
Fourth-quarter costs and expenses were broken down as follows: personnel (14.1%), materials and outsourced
services (16.3%), CUSD/CUST – distribution/transmission system usage / Purchased Energy (33.6%), and depreciation
and others (36.0%). PMSO per MWh generated by Light Energia’s plants in the quarter came to R$16.2/MWh, versus
R$15.6/MWh in 4Q11.
In 2012, Light Energia’s costs and expenses came to R$181.0 million, 21.7% more than in 2011, mainly due to the
consolidation of Renova’s costs, which represented R$16.4 million, and energy purchases from the Paracambi SHP
totaling R$10.6 million.
Operating Costs and Expenses (R$ MN) 4Q12 4Q11 Var.% 2012 2011 Var.%Personnel (7.5) (6.7) 11.9% (25.3) (23.8) 6.4%
Material and Outsourced Services (8.7) (7.2) 20.3% (23.4) (19.7) 18.6%
Purchased Energy (CUSD) (17.9) (5.6) 222.9% (42.1) (18.8) 124.1%
Depreciation (16.8) (14.1) 19.1% (63.5) (57.0) 11.4%
Other Operacional/Revenues Expenses 5.0 (0.3) - 6.6 0.1 7435.6%
Others (includes provisions) (7.5) (7.1) 4.9% (33.3) (29.6) 12.7%
Total (53.4) (41.0) 30.2% (181.0) (148.7) 21.7%
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Commercialization and Services
In 4Q12, costs and expenses totaled R$77.9 million, 66.4% higher than in the same period of 2011, chiefly due to
purchased energy costs, which increased by 50.1% as a result of higher spot market prices. Another important factor
was the 635.4% increase on 4Q11 in expenses with materials and outsourced services, mainly due to the
construction of a solar power plant at the Maracanã soccer stadium, in addition to the on-going co-generation
project for a large beverage company.
In 2012, costs and expenses totaled R$264.1 million, 50.8% up on 2011, driven by the increase in spot market prices
in the period and the 13 service provision projects carried out in the year, of which seven are still on-going.
Operating Costs and Expenses (R$ MN) 4Q12 4Q11 Var. % 2012 2011 Var. %
Personnel (2.0) (1.1) 84.4% (6.4) (4.5) 43.2%
Material and Outsourced Services (9.5) (1.3) 635.4% (27.0) (16.3) 65.7%
Purchased Energy (65.9) (43.9) 50.1% (228.3) (152.0) 50.2%
Depreciation (0.1) (0.2) -20.1% (0.7) (0.6) 6.9%
Other Operacional/Revenues Expenses 0.0 - - 0.0 - -
Others (includes provisions) (0.3) (0.3) -33.0% (1.7) (1.7) 1.0%
Total (77.9) (46.8) 66.4% (264.1) (175.1) 50.8%
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3.3 EBITDA4
Consolidated
Consolidated EBITDA in 4Q12 totaled R$483.9 million, 49.5% up year-over-year, while EBITDA5 margin stood at
24.6%. The 54.7% growth of EBITDA from distribution increased this segment’s share of consolidated EBITDA from
79.4% in 4Q11 to 81.8% in 4Q12.
In 4Q12, EBITDA was impacted by the non-recurring (negative) effect of provisions and the non-recurring (positive)
effect of the distribution concession financial assets. Excluding such impacts, EBITDA would have totaled R$360.2
million, an 11.3% growth year-over-year, mainly due to the combination of the excellent performance of
consumption with the tariff readjustment, which drove net revenue from distribution. When adjusted by the
regulatory asset (CVA), that is, regulatory assets and liabilities that should be taken into account during the next tariff
readjustment cycle of distribution, reflecting, therefore, the gross cash generation potential, adjusted EBITDA would
4
EBITDA is calculated in accordance with CVM Instruction 527/2012 and means: net income + income tax and socialcontribution tax + financial expenses, net + depreciation and amortization.5 Revenue from construction was not considered in the calculation of the consolidated and distribution EBITDA margins, due to
the booking of revenues and costs with a zero margin.
Consolidated EBITDA (R$ MN) 4Q12 4Q11 Var.% 2012 2011 Var.%
Distribution 397.6 256.9 54.7% 1,101.4 988.4 11.4%
Generation 78.9 63.7 23.8% 336.4 244.0 37.8%
Commercialization 9.4 3.6 162.5% 27.8 15.7 77.0%
Others and eliminations (1.9) (0.6) 225.1% (9.3) (10.4) -10.6%
Total 483.9 323.6 49.5% 1,456.2 1,237.8 17.7%
EBITDA Margin (%) 24.6% 20.5% - 21.0% 20.1% -
A d j u s t e d
E B I T D A -
4 Q 1 2
R e g u l a t o r y
A s s e t s a n d
L i a b i l i t i e s
E B I T D A -
4 Q 1 2
N e t
R e v e n u e
N o n -
M a n a g a b l e
C o s t s
M a n a g a b l e
C o s t s
( P M S O )
O t h e r
O p e r a c i o n a
l / R e v e n u e s
E x p e n s e s
P r o v i s i o n s
E B I T D A -
4 Q 1 1
R e g u l a t o r y
A s s e t s a n d
L i a b i l i t i e s
A d j u s t e d
E B I T D A -
4 Q 1 1
356 324
484617
32
386 (356)
(41)
366(194) 133
EBITDA and Adjusted EBITDA
4Q12/4Q11- R$ Millions
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have amounted to R$616.8 million in 4Q12, 73.4% up year-over-year. Excluding the impact of non-recurring effects
this quarter, Adjusted EBITDA would have totaled R$493.1 million, 38.6% higher than in 4Q11.
EBITDA for 2012 totaled R$1,456.2 million, 17.7% up on 2011, with EBITDA margin standing at 21.0%. The
commercialization and services and the generation segments presented the biggest evolution in the year, with a
77.0% and 37.8% increase, respectively.
EBITDA in 2012 was chiefly driven by the 12.9% growth in net revenue, excluding revenue from construction, which
presented growth in all of the Company’s operational segments. Excluding the impact of non-recurring effects in this
quarter, EBITDA would have totaled R$1,332.5 million, 7.7% up on 2011, mainly due to the good performance of
consumption, which drove net revenue. When adjusted by the regulatory asset (CVA), that is, regulatory assets and
liabilities that should be taken into account during the next tariff readjustment cycle of distribution, reflecting,
therefore, the gross cash generation potential, adjusted EBITDA would have amounted to R$1,781.6 million in 2012,
34.5% up on 2011. Excluding the impact of non-recurring effects this quarter, Adjusted EBITDA would have totaled
R$1,657.9 million, 25.1% higher than in 2011.
A d j u s t e d
E B I T D A -
4 Q 1 2
R e g u l a t o r y
A s s e t s a n d
L i a b i l i t i e s
E B I T D A -
4 Q 1 2
N e t
R e v e n u e
N o n -
M a n a g e a b l e
C o s t s
M a n a g e a b l e
C o s t s
( P M S O )
O t h e r
O p e r a c i o n a l
/ R e v e n u e s
E x p e n s e s
P r o v i s i o n s
E B I T D A -
4 Q 1 1
R e g u l a t o r y
A s s e t s a n d
L i a b i l i t i e s
A d j u s t e d
E B I T D A -
4 Q 1 1
1,325 1,238 1,456
1,782
87794 (706)
(75) 381
(175) 325
EBITDA and Adjusted EBITDA
2012/2011- R$ Millions
17,7%
34,5%
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Distribution
EBITDA from distribution totaled R$397.6 million in 4Q12, 54.7% up year-over-year. EBITDA6 margin stood at 22.2%,
4.5 p.p. up on 4Q11. This was chiefly due to the 5.2% increase in consumption of the total market coupled with the
tariff readjustment of November, which was partially offset by the higher purchased energy cost – driven by higher
spot market prices – and the thermal plant activation cost.
Part of the purchased energy cost upturn comprises regulatory assets and liabilities (CVA), which are taken into
account for tariff readjustment purposes. If EBITDA from distribution were adjusted based on the CVA, it would
amount to R$530.5 million.
In 2012, EBITDA from distribution totaled R$1,101.4 million, an 11.4% growth when compared to 2011, and EBITDA
margin stood at 17.4%, a 0.1 p.p. increase. This was also driven by the higher net revenue for the year, in light of the2.0% rise in the total market and the positive impact of the 7.82% tariff readjustment of November 2011. Including
CVA, adjusted EBITDA from distribution in 2012 would have amounted to R$1,426.7 million. Net of the non-recurring
effects of this quarter, adjusted EBITDA from distribution totaled R$1,303.0 million, 21.1% up on 2011.
Generation
Light Energia’s EBITDA totaled R$78.9 million in 4Q12, a 23.8% rise year-over-year, chiefly due to: (i) the growth in
the volume of energy sold on the free market (ACL) coupled with a higher average price when compared to 4Q11;
and (ii) the consolidation of Renova Energia’s results, whose EBITDA amounted to R$7.8 million, impacted by the
opening of the wind farm in July of 2012. EBITDA margin stood at 67.6% in 2Q12.
In 2012, EBITDA from generation amounted to R$336.4 million, 37.8% higher than in 2011, and EBITDA margin stood
at 76.4%, a 3.8 p.p. rise in relation to 2011, chiefly due to the combination of higher price and higher volume of
energy sold on the free market (ACL).
Commercialization and Services
EBITDA from commercialization totaled R$9.4 million in 4Q12, equivalent to a 162.5% growth year-over-year. This
growth was driven by the increase in net revenue in the quarter, as a result of the expansion in energy trading
coupled with new contracts signed in the quarter. EBITDA margin stood at 10.8%, up 3.7 p.p. against 4Q11.
In 2012, EBITDA totaled R$27.8 million, 77.0% up on 2011, whereas EBITDA margin stood at 9.5%, an increase of 1.3
p.p. when compared to 2011, chiefly due to the 44.3% increase in energy commercialization revenue.
6 Revenue from construction was not considered in the calculation of the consolidated and distribution EBITDA margins, due
to the booking of revenues and costs with a zero margin.
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3.4 Consolidated Financial Results
The Company’s financial results in the quarter was a negative R$133.4 million, with a 65.1% growth in relation to the
negative financial results of R$80.8 million in 4Q11.
Financial revenue in 4Q12 totaled R$70.8 million, 54.0% up year-over-year, primarily due to the non-recurring effect
of the adjustment for inflation of judicial deposits from lawsuits on the “other financial revenue” line, in the amount
of R$37.2 million.
Financial expenses in 4Q12 was up by 61.1% when compared to 4Q11, totaling R$204.1 million. This was mainly due
to the impact of the adjustment to present value that increased financial expenses, in light of the provisions in 4Q12
in the amount of R$43.5 million, related to conditional discounts provided for in installment contracts of large clients
with Light, and due to the non-recurring effect of the adjustment for inflation of judicial deposits from lawsuits on
the “other financial expenses” line, in the amount of R$35.0 million, partially offset by the retraction of debt charges
totaling R$19.2 million driven by the decrease in interest rates and the replacement of a higher cost debt for a lower
cost debt.
There was also a 14.3% decrease on the “compensation for violation of the DIC and FIC quality standards” line. It’s
important to highlight that there was a reclassification of the financial result of 2011 related to the Brasilight pension
Financial Result * (R$ MN) 4Q12 4Q11 Var. % 2012 2011 Var. %
Financial Revenues 70.8 45.9 54.0% 199.4 174.3 14.4%
Income from financial investments 10.4 9.2 12.9% 47.0 48.4 -2.9%
Monetary and Exchange variation - 5.3 - 2.3 7.2 -68.3%
Net Swap Operations 2.8 2.6 7.6% 14.4 4.0 258.8%
Moratory Increase / Debts Penalty 18.1 16.9 6.9% 77.0 88.5 -13.0%
Others Financial Revenues 39.5 11.9 231.1% 58.8 26.2 124.2%
Despesas Financeiras (204.1) (126.7) 61.1% (695.1) (584.5) 18.9%
Debt Expenses (54.8) (73.9) -25.9% (323.8) (329.2) -1.6%
Monetary and Exchange variation (6.9) 9.5 - (20.3) 3.9 -
Restatement of provision for contingencies (4.6) (3.4) 34.3% (25.6) (25.7) -0.5%
Restatement of R&D/PEE/FNDCT (0.9) (2.0) -54.6% (6.4) (6.6) -2.5%
Interest and fines on taxes - (1.2) - (1.8) (16.7) -89.0%
Installment payment - fines and interest rates Law
11.941/09 (REFIS)(2.8) (4.9) -41.7% (14.8) (24.0) -38.2%
Present value adjustment (42.3) 1.2 - (74.7) (18.0) 315.2%
DIC/FIC Compensation (7.6) (8.9) -14.3% (38.1) (29.8) 27.9%
Other Financial Expenses (Includes IOF) (49.8) (12.5) 297.6% (69.5) (11.6) 500.9%
Braslight (private pension fund) (34.4) (30.5) 12.8% (120.1) (126.9) -5.4%
Charges (15.7) (15.2) 3.1% (62.6) (60.6) 3.3%
Monetary and Exchange Variation (18.8) (15.3) 22.4% (57.5) (66.4) -13.4%Deficit Adjusted - - - - - -
Total (133.4) (80.8) 65.1% (495.7) (410.2) 20.8%
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fund, due to a change in accounting practices. The actuarial liability adjustment resulting from CVM Instruction 600,
which reduced Light’s discount rate from 5.8% to 3.6% in 2012, previously accounted as a financial result, is now
accounted as other comprehensive income in the net worth, without impacting on the contractual debt with the
foundation.
In 2012, the financial result was a negative R$495.7 million, 20.8% up on 2011, when the Company also had a
negative financial result amounting to R$410.2 million.
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3.5 Debt
R$ MN Short Term % Long Term % Total %
Brazilian Currency 532.0 11.4% 3,526.0 75.6% 4,058.0 87.0%
Light SESA 421.6 9.0% 2,507.5 53.7% 2,929.2 62.8%
Debenture 4th Issue 0.0 0.0% 0.0 0.0% 0.0 0.0%
Debenture 5th Issue 92.2 2.0% 112.6 2.4% 204.8 4.4%
Debenture 7th Issue 8.0 0.2% 648.6 13.9% 656.6 14.1%
Debenture 8th Issue 2.7 0.1% 469.6 10.1% 472.2 10.1%
Eletrobrás 0.6 0.0% 4.5 0.1% 5.1 0.1%
CCB Bradesco 80.7 1.7% 300.0 6.4% 380.7 8.2%
Working Capital - Santander 2.1 0.0% 80.0 1.7% 82.1 1.8%
BNDES (CAPEX) 83.9 1.8% 574.0 12.3% 657.9 14.1%
BNDES FINEM 150.3 3.2% 318.3 6.8% 468.5 10.0%
Others 1.2 0.0% 0.0 0.0% 1.2 0.0%Light Energia 25.8 0.6% 661.3 14.2% 687.2 14.7%
Debenture 1st Issue 3.2 0.1% 171.2 3.7% 174.5 3.7%
Debenture 2st Issue 12.5 0.3% 423.4 9.1% 435.9 9.3%
Debenture 3st Issue 0.2 0.0% 29.8 0.6% 30.0 0.6%
BNDES FINEM (CAPEX) 9.9 0.2% 36.8 0.8% 46.7 1.0%
Others 0.0 0.0% - 0.0% 0.0 0.0%
Renova Energia 43.6 0.9% 287.6 6.2% 331.2 7.1%
Renova Debenture 0.0 0.0% 67.2 1.4% 67.2 1.4%
BNDES FINEM (CAPEX) 42.2 0.9% 197.8 4.2% 240.0 5.1%
Banco do Nordeste 1.4 0.0% 22.5 0.5% 23.9 0.5%
Guanhães 33.0 0.7% 0.0 0.0% 33.0 0.7%Guanhães Debenture 33.0 0.7% 0.0 0.0% 33.0 0.7%
Light ESCO 3.6 0.1% 9.6 0.2% 13.2 0.3%
BNDES - PROESCO 3.6 0.1% 9.6 0.2% 13.2 0.3%
Light GER 4.2 0.1% 59.9 1.3% 64.1 1.4%
BNDES - Lightger 4.2 0.1% 59.9 1.3% 64.1 1.4%
Axxiom 0.2 0.0% 0.0 0.0% 0.2 0.0%
Axxiom 0.2 0.0% 0.0 0.0% 0.2 0.0%
Foreing Currency 10.7 0.2% 597.3 0.7% 608.0 13.0%
Light SESA 9.9 0.2% 433.8 9.3% 443.7 9.5%
National Treasury 8.4 0.2% 32.2 0.7% 40.7 0.9%Merril Lynch 0.3 0.0% 102.2 2.2% 102.5 2.2%
BNP 0.7 0.0% 95.0 2.0% 95.8 2.1%
Citibank 0.5 0.0% 204.4 4.4% 204.8 4.4%
Light Energia 0.8 0.0% 163.5 3.5% 164.3 3.5%
Citibank 0.8 0.0% 163.5 3.5% 164.3 3.5%
Gross Debt 542.8 11.6% 4,123.2 88.4% 4,666.0 100.0%
Cash 392.9
Net Debt (a) 4,273.1
Braslight Debt (b) 114.8 939.9 1,054.7
Adjusted Net Debt (a+b) 5,327.8
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The Company’s gross debt on December 31, 2012 totaled
R$4,666.0 million, a 3.1% reduction on September 2012, and
12.1% up year-over-year driven by investments and the
acquisition of interest in other companies. The main funding in
the period was obtained as follows: (i) Light SESA’s 8th debenture
issue, amounting to R$472 million; (ii) Light Energia’s 3rd
debenture issue, amounting to R$30 million; (iii) release of funds
by the Brazilian Development Bank (BNDES), in the amount of
R$490 million, to Light SESA; (iv) capital raising in foreign
currency of R$202 million and R$162 million, respectively, for
Light SESA and Light Energia, through Citibank, for working capital
purposes, both hedged through a Real swap transaction; (v)
Renova’s 2nd issue of debentures totaling R$67 million; and (vi)
Guanhães’s debenture issue in the amount of R$33 million, the
last two issues in amounts proportional to Light’s interest in the
capital of these companies.
Net debt in December 2012 totaled R$4,273.1 million, 18.0% up
on September 2012, mainly due to the cash variation in the
period. In December 2012, the net debt/EBITDA ratio stood at
2.9x. If adjusted for comparability purposes with the debt
covenant indicator, which is 3.0x, the December 2012 ratio comes
to 2.9x, respecting the debt/EBITDA covenant limit. The Company
also has a limit for the EBITDA/Interest rate coverage indicator,
which should be higher than 2.5x. The result for this indicator in
2012 was 4.5x.
The Company’s debt has an average term to maturity of 4.2 years.
The average cost of Real-denominated debt is 8.2% p.a., 0.3 p.p.
down on the end-of-September figure, while the average cost of
foreign-currency debt (US$ + 2.6% p.a.) was 0.4 p.p. down on the
average cost in September 2012. At the end of the year, 13.0% of total debt was denominated in foreign currency
and, considering the FX hedge horizon, only 0.4% of this total was exposed to foreign currency risk, in line with the
last quarter. Light’s hedge policy consists of protecting cash flow falling due within the next 24 months (principal and
interest) through the use of non-cash swap instruments with premier financial institutions.
Dec-11 Sep-12 Dec-12
94.4% 90.8% 87.0%
5.6%
9.2% 13.0%
Debtedness
(Brazil ian Currency x Foreing Currency)
Brazilian Currency Foreign Currency
2013 2014 2015 2016 After2016
481671
784886
1796
Amortization
(R$ MN)
2012 2011
Gross Debt 4,666.0 4,163.9
+ Pension Fund 1,054.7 1,096.1
- Cash 377.6 780.7
= Net Debt (a) 5,343.1 4,479.4
EBITDA 1,456.2 1,243.6
+ Provision 475.2 300.6
- Other Operational Revenues/Expenses 375.6 (5.9)
+ Regulatory Assets and Liabi li ties (CVA) 325.3 87.2
- Financial CVA 14.0 (6.4)
= EBITDA' (b) 1,867.2 1,643.7
2.9 2.7
Covenants Multiple R$ MN
Net Debt / EBITDA' (a/b)
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3.6 Net Income
Light posted Net Income of R$160.0 million in 4Q12, a 21.3% increase when compared to the Net Income of R$131.9
million in 4Q11. This is mainly due to the better operating performance, with a 49.5% EBITDA growth, partially offset
by the higher Income Tax/Social Contribution Tax in light of a R$29.5 million tax benefit from the interest on equity
approved in 4Q11, compared to a R$5.2 million tax benefit from the interest on equity voted in 4Q12.
Excluding the portion of the purchased energy cost upturn offset in the tariff readjustment, through the creation of
regulatory assets and liabilities (CVA) not recorded in the Income Statement, Adjusted Net Income would have
amounted to R$247.7 million, 61.8% up on 4Q11. Excluding the impact of non-recurring effects from this quarter,
Adjusted Net Income would have totaled R$189.2 million, 23.5% higher than in 4Q11.
In 2012, Net Income totaled R$423.9 million, 24.0% higher than in 2011, chiefly driven by the improved operating
performance in the year, with a 2.0% growth in consumption from distribution. All segments had a positive impact
on the improvement of Net Income. Including the CVA, Adjusted Net Income would have totaled R$638.6 million in
2012, 59.9% higher than in 2011. Excluding the impact of non-recurring effects in 4Q12, Adjusted Net Income would
have totaled R$580.1 million, 45.2% higher than in 4Q11.
Adjusted NI4Q11
RegulatoryAssets and
Liabilities
4Q11 EBITDA FinancialResult
Taxes Others 4Q12 RegulatoryAssets and
Liabilities
Adjusted NI4Q12
153132 160
248
21
160
(53)
(68)
(11)
88
Net Income and Adjusted Net Income
4Q11/4Q12 - R$ Million
21.3%
61.8%
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3.7 Investments
In the year 2012, Light invested R$796.8 million, 14.2% less than in 2011.
The distribution segment concentrated the largest volume – R$694.1 million – accounting for 87.1% of the total
investment, 10.4% down on 2011. Among the investments made, R$338.5 million went to the development and
expansion of distribution networks to keep pace with market growth, strengthen the network and improve quality;
and R$199.8 million went to the energy loss project (network protection, electronic meters and fraud regularization).
CAPEX (R$MN) 2012 Partic. % 2011 Partic. % Var %
Distribution 694.1 87.1% 774.8 83.4% -10.4%
Distrib. networks development 338.5 48.8% 384.7 49.6% -12.0%
Losses 199.8 28.8% 184.3 23.8% 8.4%
Others 155.9 22.5% 205.8 26.6% -24.3%
Administration 50.9 6.4% 61.8 6.7% -17.7%
Commercial./ Energy Efficiency 26.1 3.3% 2.1 0.2% 1120.8%Generation 25.7 3.2% 89.8 9.7% -71.4%
Total 796.8 100.0% 928.6 100.0% -14.2%
Adjusted NI2011
RegulatoryAssets and
Liabilities
2011 EBITDA FinancialResult
Taxes Others 2012 RegulatoryAssets and
Liabilities
Adjusted NI2012
399 342424
639
58218
(85)(57)
6
215
Net Income and Adjusted Net Income
2011/2012 - R$ Million
24.0%
59.9%
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Investments in the underground network are recorded under distribution network and quality improvement
investments.
Generation investments totaled R$25.7 million in 2012, R$23.7 million of which went to upgrading and maintaining
existing generating facilities, equivalent to a 71.4% decrease when compared to 2011. This variation may be
explained by the beginning of operations of the Paracambi SHP in May 2012 and the reduction in demanded
investments from the Lajes SHP.
Investments in commercialization and energy efficiency increased from R$2.1 million in 2011 to R$26.1 million in
2012, R$25.4 million of which are related to the co-generation project for a large beverage company.
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Generation Capacity Expansion Projects
One of the pillars of Light's Strategic Plan is to increase the share of the generation business in its results. With this in
mind, the Company has announced several projects to boost installed generating capacity, which currently stands at
942 MW. With the inclusion of the planned expansion projects, generating capacity is expected to increase by 564
MW.
Existing Power Plants
Installed
Capacity
(MW)*
Assured
Energy
(MW)*
Operation
StartAct Date
Concession /
Authorization
Expiration
DateFontes Nova 132 104 1942 jul-96 2026
Nilo Peçanha 380 335 1953 jul-96 2026
Pereira Passos 100 51 1962 jul-96 2026
Ilha dos Pombos 187 115 1924 jul-96 2026
Santa Branca 56 32 1999 jul-96 2026
Elevatórias - (87) - - -
Renova² 74 40 2008 dec-03 2033
SHPP Paracambi¹ 13 10 2012 feb-01 2031
Total 942 600
New Projects
Installed
Capacity
(MW)*
Assured
Energy
(MW)*
Operation
Start
SHPP Lajes¹ 9 8 End of 2013
HTT Itaocara¹ 77 42 1Q15
Belo Monte³ 280 114 feb-15
Guanhães¹ 22 13Dores de Guanhães 7 4 dec-13
Senhora do Pôrto 6 3 jan-14Jacaré 5 3 feb-14
Fortuna II 5 3 oct-13
Renova² 175 41
LER 2010 36 18 sep-13
A-3 2011 47 23 mar-14
A-5 2012 5 N/D jan-17
PPA 88 0 2015/2016
Total 564 218
*Light's Participation
¹ 51% Light² 21,99% Light
³ 2,49% Light
2045
Current Generation Park
Generation Capacity Expansion Projects
Concession / Authorization
Expiration Date
2031
2036
N/a
N/a
2032
20322032
2031
2046
2047
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The fourth quarter of 2012 was marked by the following events related to projects for expanding Light’s generating
capacity:
Lajes SHP
• The basic project remains under analysis by ANEEL. The process of hiring the construction company is expected to
begin this year. Once the construction company is defined, it will be possible to begin the works, with start-up
scheduled for 2015, given that the project has already been granted its installation license. The 17 MW unit will be
installed in the powerhouse of the Fontes Velha hydropower plant. In addition to increasing generating capacity, the
project also brings certain other benefits, such as increasing operational flexibility, upgrading supply of CEDAE’s
water main, controlling the Piraí River’s water level, and improving the quality of the water of the Lajes Reservoir.
Itaocara
• The Itaocara Hydroelectric Development concession dates from February 2001, and it currently belongs to the
syndicate comprising Itaocara Energia S.A. (51%) and Cemig Geração e Transmissão S.A. (49%). Initially planned to
generate 195 MW, the project was reviewed by the syndicate after a request by Ibama, aimed at minimizing its
environmental impact, and the single plant was split into two hydroelectric power plants: Itaocara I, with 145 MW,
and Itaocara II, with 50 MW. After this division, the granting power only formalized the concession of Itaocara I to
the syndicate, with an expected budget of R$750 million. Currently, the UHE Itaocara syndicate is working to obtain
its installation license (IL), to be issued by Ibama, with works expected to begin as of 2013.
Renova Energia (“Renova”)
2009 Reserve Energy Auction (LER):
In July 2012, the Alto Sertão I wind farm complex was inaugurated in Bahia. It is Latin America’s largest complex, with
14 wind farms, 294.4 MW installed capacity and approximately R$1.2 billion in investments. In order to maintain
transparency and allow the monitoring of its wind farms, Renova presented to the market the measured wind
potential assessment of the 14 wind farms that traded energy at the 2009 reserve energy auction (“LER 2009”) and
whose construction were concluded on July 28, 2012. The measured wind potential of the Alto Sertão I wind farm
complex totaled 746 GWh in the first six months since its conclusion, equivalent to 67% of the annual sold energy of
1,113 GWh and to 59% of the annual wind potential of the farms of 1,274 GWh.
2010 LER and 2011 A-3:
In January 2013, Renova began to lay the concrete base of the aerogenerators of the six wind farms that traded
energy on the 2010 LER, within the initial schedule and with delivery planned for September 1st, 2013, as expected by
the Ministry of Mines and Energy (MME).
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During 2012, the Special Purpose Entities owning the nine wind farms that traded energy on the 2011 A-3 entered
into Captive Market Energy Trading Contracts (CCEARs) with the distributors, whose supply terms are for 19 years
and 10 months.
The wind farms from the 2010 LER, together with the wind farms from the 2011 A-3, comprise the Alto Sertão II wind
farm complex, with a 386.10 MW installed capacity, located in Bahia, in the same region where the Company’s Alto
Sertão I wind farm complex is located.
2012 A-5:
Renova traded on the A-5 new energy auction on December 14, 2012, 10.6 average MW to be generated by the São
Salvador wind farm, also located in Bahia.
Thanks to the start-up of the Paracambi SHP, in May 2012, to Renova’s first wind farm, in July 2012, and to Renova’s
operating SHPs, the Company’s installed capacity, when added to Light Energia’s existing capacity, has increased
Light’s generation capacity from 855 MW to 942 MW. The installed capacity is expected to grow by 59.8% over the
next years, reaching a total 1,505 MW of generation.
Light
Energia
Capacity
(+) SHPP
Paracambi
(+) Renova Current
capacity
(+) Lajes (+) Itaocara (+) Renova (+) Belo
Monte
(+)
Guanhães
Capacity
after
expansion
855942
1,505
1374 9 77
175
280 22
Generation Expansion (MW)
59.8%
* 9 MW SHPPs + 65MW wind farm (opened in jul/12)
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4. Cash Flow
In 2012, cash flow was a negative R$394.9 million, versus cash generation of R$258.4 million last year. This result was
affected by the smaller financing activity in the year. Net cash generated by operations in 2012 totaled R$457.0
million, 3.2% lower than in 2011, and before interest rates and taxes it would have amounted to R$893.1 million.
R$ MN 2012 2011
Cash in the Beginning of the Period (1) 772.5 514.1 Net Income 423.9 342.0
Social Contributions & Income Tax (178.2) (121.0)
Net Income before Social Contributions & Income Tax 602.1 463.0
Provision for Delinquency 282.6 251.3
Depreciation and Amortization 358.4 359.9
Loss (gain) on intangible sales / Residual value of disposals fixed
asset13.9 6.2
Losses (gains) on financing exchange activities 21.6 18.0
Net Interests and Monetary Variations 370.5 342.6
Braslight 120.1 126.9 Atualization / provisions reversal 253.0 64.0
Financial Assets of the Concession (408.2) -
Dilution of Renova's Gain (15.9) -
Others 1.3 -
Earning Before Taxes - Cash Basis 1,599.4 1,632.1
Working Capital (271.3) (222.1)
Contingencies (82.8) (100.2)
Deferred Taxes (121.1) (121.0)
Braslight (73.4) (94.5)
Others (157.8) (152.4) Taxes Paid (74.8) (128.9)
Interest Paid (361.3) (341.1)
Cash from Operating Activities (2) 457.0 472.0
Finance Obtained 1,320.9 2,364.5
Dividends (425.1) (469.3)
Loans and financing payments (812.5) (908.6)
Financing Activities (3) 83.3 986.7
Disposal of Assets/Intangible 4.9 1.2
Fixed Assets/Intangible/Financial Assets (963.5) (929.5)
Inflow/Acquisitions on Investment (41.3) (272.0) Dilution of Renova 64.6 -
Investment Activities (4) (935.3) (1,200.3)
Cash in the End of the Period (1+2+3+4) 377.6 772.6
Cash Generation (2+3+4) (394.9) 258.4
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5. Corporate Governance
On December 31, 2012, the capital stock of Light S.A. comprised 203,934,060 common shares, 97,629,463 of which
were outstanding.
The following chart shows Light’s current shareholding structure:
On October 8, 2012, the partial extraordinary amortization of Light SESA’s 5th Debenture Issue was made in the
amount of R$375.0 million. The funds used in the amortization were raised by Light SESA through transactions based
on Law 4,131/62, at an average cost of CDI + 0.97%, and with an average term of 3.8 years, compared to the cost of
CDI + 1.50%, and a remaining average term of 1.0 year for the 5 th Issue. After the prepayment, the balance of the
principal dropped from R$595.2 million to R$220.2 million.
On November 6, 2012, a new Renova’s Shareholder’s Agreement was entered into between BNDES
Participações S.A. – BNDESPAR, Light S.A., Light Energia S.A., RR Participações S.A., Ricardo Lopes Delneri, and
Renato do Amaral Figueiredo, having Renova as the consenting intervening party, pursuant to the terms of the
“Private Agreement for the Subscription of Share Deposit Certificates (Units) Issued by Renova Energia S.A. and
CEMIG RME LEPSA BNDESPAR MARKET
FIP LUCE
PARATI
CEMIGFIP
REDENTOR
REDENTOR
ENERGIA
26.06% 13.03% 13.03% 13.46% 34.41%
100%
75% 25%
13.03% 13.03%100%
96.81% 100%
6.41%19.23%
BTG
PACTUAL
SANTANDER
VOTORANTIM
BANCO DO
BRASIL
28.57%
5.50%
28.57%
5.50%
28.57%
5.50%
14.29%
2.74%
MINORITY
3.19% 0.42%
Free Float 47,9%
25.64%*
FOREIGN NATIONAL
57.78% 42.22%
Percentage in blue: indirect stake in Light
Light S.A.
(Holding)
Controller Group 52,1%
*12.61% (RME) + 13.03%(LEPSA)
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38
Other Covenants” entered into by BNDESPAR, Renova, Light Energia, Light, RR, Ricardo Delneri, and Renato
Amaral, on June 22, 2012, as amended.
Light S.A was selected to be part of Bovespa’s Corporate Sustainability Index (ISE) on November 29, for the sixth
year in a row. The ISE is an index created by the BM&FBovespa in line with the Dow Jones Sustainability Index (DJSI)
from the NYSE, which is aimed at identifying the companies with the best corporate sustainability practices, based on
economic efficiency, environmental balance, social justice and corporate governance. The new index portfolio
comprises 37 companies, which together amount to R$1.07 trillion in market value. This amount accounts for 44.81%
of the total value of the companies with shares traded on the BM&FBovespa on November 29, 2012.
Fitch Ratings and Standard & Poor’s Ratings Services, through its reports issued on December 21 and December
26, 2012, respectively, maintained the corporate ratings in local currency previously attributed to the Company. Fitch
maintained the Company’s and its wholly-owned subsidiaries’ – Light SESA and Light Energia – “AA-(bra)” Long-term
National Rating, with Stable Outlook. At the same time, Fitch maintained the AA-(bra) Long-term National Rating to
the second and third issue of debentures from Light Energia S.A. and to the eighth issue of debentures from Light
SESA. Standard & Poor’s maintained Light SESA’s and its fifth issue of debentures’ br.A+ Brazilian National Scale
rating, with stable outlook.
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39
6. Capital Markets
Light’s shares have been listed in the BM&FBovespa’s Novo Mercado trading segment since July 2005, therefore
adhering to the best corporate governance practices and the principles of transparency and equity, in addition to
granting special rights to minority shareholders. Light S.A.’s shares are included in the following indices: Ibovespa,
IGC (Corporate Governance Index), IEE (Electric Power Index), IBrX (Brazil Index), ISE (Corporate Sustainability Index),
ITAG (Special Tag Along Stock Index) and IDIV (Dividend Index). Light’s shares are also traded on the U.S. over-the-
counter (OTC) market as Level 1ADRs, under the ticker LGSXY.
At the end of December, Light S.A.’s shares (LIGT3) were priced at R$22.32 (adjusted for shareholder payments). The
Company’s market cap (no. of shares x share price) closed the quarter at R$4,552 million.
The charts below give a breakdown of the Company’s free float in December 2012.
Daily Average 4Q12 4Q11 2012 2011
Number of shares traded (Thousand) 576.0 888.4 691.0 824.0
Number of Transactions 2,599 3,109 2,672 2,518
Traded Volume (R$ Million) 12.9 24.1 17.3 22.5
Quotation per shares: (Closing)* R$ 22.32 R$ 26.26 R$ 22.32 R$ 26.26
Share Valuing (Quarter) -1.1% 20.5% -15.0% 24.8%
IEE Valuing (Quarter) -4.3% 17.3% -11.7% 19.7%
Ibovespa Valuing (Quarter) 3.0% 8.5% 7.4% -18.1%
*Ajus ted by earnings .
BM&F BOVESPA (spot market) - LIGT3
Individual17%
National LegalEntities
25%
Foreign58%
Free Float Composition*
* Excluding BNDESPAR's interest
USA63%
Europe21%
Asia11%
America (w/outUSA)3%
Oceania2%
Foreigners
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40
The chart below shows the performance of Light’s stock between January 1st, 2012 and March 22, 2013.
Dividends
Light’s dividend payment policy establishes a minimum payout equivalent to 50% of adjusted net income, calculated
in compliance with article 189 of Brazilian Corporate Law and pursuant to Brazilian accounting practices and the
regulations of the Brazilian Securities and Exchange Commission (CVM).
On December 14, the Board of Directors approved the following:
The distribution of dividends in the gross amount of R$169,877,071.98, equivalent to R$0.8330 per share,
based on the result assessed from January through September 2012. The payment was made on December
27, 2012, with no tax withholding (pursuant to article 10 of Law 9,249/95);
The distribution of interest on equity in the gross amount of R$15,295,054.50, equivalent to R$0.750 per
share, related to fiscal year 2012. The net value per share is equivalent to R$0.06375, already net of 15%
withholding income tax, except for shareholders who are exempt from such taxation. The payment date of
interest on equity will be defined at a later time. Shareholders registered as such on December 17, 2012 will
be entitled to this payment.
On March 25, the Board of Directors approved the proposal to distribute dividends in the amount of
R$91,770,327.00, or R$0.45 per share, relating to revenue reserves existing in the balance sheet of December 31,
D e c - 1 1
J a n - 1
2
F e b - 1
2
M a r - 1 2
A p r - 1 2
M a y - 1
2
J u n - 1
2
J u l - 1 2
A u g - 1
2
S e p - 1
2
O c t - 1 2
N o v - 1
2
D e c - 1
2
J a n - 1
3
F e b - 1
3
M a r - 1 3
Light x Ibovespa x IEEBase jan/12 = 100 until 03/22/2013
-22.9% Light
-2.7% Ibovespa
-18.4% IEE
R$/ação
12/28/12 22.3203/22/13 18.40
2012IBOV 7.4%
IEE -11.7%
LIGT3 -15.0%
2013IBOV -9.4%
IEE -7.6%
LIGT3 -17.6%
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41
2012. Such amount, together with those already decided in the year, is equivalent to a 86,5% payout of adjusted net
income for the year and plus payments during the year lead to a dividend yield of 7.68%. The proposal will be
submitted to the approval of the shareholders at an Ordinary General Meeting (OGM) to be called.
Dividends paid, dividend yield and payout
1S08 2S08 1S09 2S09 1S10 2S10 1S11 2S11 1S12 2S12 1S13
203
351408
187
432363 351
118 182 17092
87
87
4.2%
8.2%9.9%
1.7%
8.1% 8.1%6.1%
3.4% 3.3%5.4%
2.4%
Dividend Yeld*Dividends
*Based on the closing price the day before the announcement.
Interest on Equity
257
182205
351363
432
187
408
351
203
92
2007 2008 2009 2010 2011 2012
100% 100%
76.3%81.0%
100.0%
86.5%
50%
Minimum Dividend PolicyPayout
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42
7. Recent Events
On January 11, 2013, the Brazilian Securities and Exchange Commission (CVM) listed the Company’s subsidiary
Light Energia S.A as a B-category publicly-traded company. The listing request did not include a request for IPO
authorization.
On January 24, 2013, ANEEL approved a tariff readjustment for Light SESA’s consumers, with an average total
effect equivalent to a 19.63% reduction, whereas residential consumers (low-voltage) perceived an 18.10%
decrease. The tariff reduction was due to Law 12,783/2013, which promoted the renewal of energy generation
and transmission concessions up to 2017, in addition to provisional measures 591/2012 and 605/2013. The main
changes that allowed the decrease in bills were the reduction in the energy purchasing cost, through the
allocation of energy quotas from generators that renewed their concessions, the decline in transmission costs
from transmission companies that renewed their concession contracts, and the decrease in industry charges and
the withdrawal of subsidies from the tariff structure.
At the Extraordinary Shareholders’ Meeting (ESM) held on March 6, 2013, as a result of the resignation of Mr.
André Fernandes Berenguer as an effective member of the Board of Directors, Mr. Luiz Carlos da Silva Cantidio
Júnior, a Brazilian business administrator, was elected to replace him for the remainder of the term of office, i.e.,
up to the Annual Shareholders’ Meeting (ASM) that will decide on the accounts of the fiscal year ending
December 31, 2013.
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8. Disclosure Program
Forward-looking Statements
The information on the Company’s operations and its Management’s expectations regarding its future performance was not
reviewed by independent auditors.
Statements about future events are subject to risks and uncertainties. These statements are based on beliefs and assumptions of
our Management, and on information currently available to the Company. Statements about future events include information
about our intentions, beliefs or current expectations, as well as of the Company's Board of Directors and Officers. Exceptions
related to statements and information about the future also include information about operating results, likely or presumed, as
well as statements that are preceded by, followed by, or including words such as "believes", "might", "will", "continues",
"expects", "estimates", "intends", "anticipates", or similar expressions. Statements and information about the future are not a
guarantee of performance. They involve risks, uncertainties and assumptions because they refer to future events, thus depending
on circumstances that might or might not occur. Future results and creation of value to shareholders might significantly differ
from the ones expressed or suggested by forward-looking statements. Many of the factors that will determine these results and
values are beyond LIGHT S.A.'s control or forecast capacity.
Teleconference
Brazil: +55 (11) 2188 0200
EUA: +1(888)700 0802
Other countries: +1 (786) 924-6977
Access code: Light
Schedule
03/27/2013, Wednesday, at 4:00 p.m. (Brazilian Time) and at 3:00 p.m.
(NY Time), with simultaneous translation to English
Access conditions:
Webcast: link on site www.light.com.br/ri (portuguese and english)
Conference Call - Dial number:
Contact e-mail Phone
Gustavo Werneck Souza [email protected] +55 21 2211-2560
Carlos Cotrim Rodrigues Pereira [email protected] +55 21 2211-2828
Marcelle Henriques Pelajo [email protected] +55 21 2211-7392
Fabiana Almeida da Matta [email protected] +55 21 2211-2660
IR Team
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44
ANNEX I
Income Statement per Company - R$ million
LIGHT SESA 4Q12 4Q11 Var. % 2012 2011 Var. %
Net Operating Revenue 1,994.0 1,695.9 17.6% 6,991.6 6,506.9 7.4%
Operating Expense (1,676.9) (1,507.3) 11.3% (6,183.5) (5,825.5) 6.1%
Other Operating Revenuess/Expenses 357.5 (4.1) - 355.0 (6.0) -
Operating Result 317.2 188.6 68.2% 808.1 681.4 18.6%
EBITDA 397.6 256.9 54.7% 1,101.4 988.4 11.4%
Financial Result (105.3) (62.2) 69.3% (406.2) (362.5) 12.1%
Result before taxes and interest 211.9 122.3 73.3% 402.0 319.1 26.0%
Net Income 132.3 126.4 4.6% 289.0 264.2 9.4%
EBITDA Margin* 22.2% 17.6% - 17.4% 17.3% -
* Does not cons ider Construction Revenue
LIGHT ENERGIA 4Q12 4Q11 Var. % 2012 2011 Var. %
Net Operating Revenue 116.5 90.6 28.6% 440.1 335.8 31.1%
Operating Expense (53.4) (41.0) 30.2% (181.0) (148.7) 21.7%
Other Operating Revenuess/Expenses 5.0 (0.3) - 6.6 0.1 7435.6%
Operating Result 63.1 49.6 27.3% 259.1 187.1 38.5%
Equity Pickup (1.0) - - 13.8 - -
EBITDA 78.9 63.7 23.8% 336.4 244.0 37.8%
Financial Result (25.0) (17.1) 46.6% (85.1) (54.9) 55.1%
Result before taxes and interest 37.1 32.6 14.0% 187.7 132.2 42.0%Net Income 26.5 23.3 13.5% 133.7 89.7 49.1%
EBITDA Margin 67.7% 70.3% - 76.4% 72.7% -
COMERCIALIZAÇÃO E SERVIÇOS 4Q12 4Q11 Var. % 2012 2011 Var. %
Net Operating Revenue 87.2 50.2 73.6% 291.3 190.2 53.1%
Operating Expense (77.9) (46.8) 66.4% (264.1) (175.1) 50.8%
Other Operating Revenuess/Expenses 0.0 - - 0.0 - -
Operating Result 9.3 3.4 170.8% 27.1 15.1 79.9%
EBITDA 9.4 3.6 162.5% 27.8 15.7 77.0%
Financial Result (0.1) 4.5 - 0.2 5.5 -96.0%Result before taxes and interest 9.2 7.9 15.9% 27.3 20.6 32.8%
Net Income 6.2 5.2 18.7% 18.5 13.6 36.3%
EBITDA Margin 10.8% 7.1% - 9.5% 8.3% -
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ANNEX II
Consolidated Income Statement
Consolidated - R$ MM 4Q12 4Q11 Var. % 2012 2011 Var. %
NET OPERATING REVENUE 2,162.9 1,815.1 19.2% 7,613.1 6,944.8 9.6%
OPERATING EXPENSE (1,776.4) (1,578.1) 12.6% (6,514.0) (6,071.6) 7.3%
Personnel (71.8) (49.0) 46.6% (293.6) (247.3) 18.7%
Material (8.9) (7.4) 19.3% (25.6) (25.7) -0.4%
Outsourced Services (112.7) (105.4) 6.9% (418.0) (409.2) 2.2%
Purchased Energy (1,366.7) (1,010.5) 35.3% (4,534.2) (3,828.0) 18.4%
Depreciation (97.8) (86.6) 13.0% (358.4) (364.6) -1.7%
Provisions (250.8) (56.6) 342.8% (475.2) (300.6) 58.0%Construction Revenue (199.3) (237.8) -16.2% (669.3) (794.6) -15.8%
Other Operating Revenuess/Expenses 361.4 (4.5) - 375.6 (5.9) -
Others (29.8) (20.3) 46.6% (115.3) (95.6) 20.6%
OPERATING RESULT 386.5 237.0 63.1% 1,099.1 873.2 25.9%
Equity Pickup (0.4) - - (1.3) - -
EBITDA (1) 483.9 323.6 49.5% 1,456.2 1,237.8 17.7%
FINANCIAL RESULT (133.4) (80.8) 65.1% (495.7) (410.2) 20.8%
Financial Income 88.7 45.9 93.1% 230.9 174.3 32.5%Financial Expenses (222.1) (126.7) 75.3% (726.6) (584.5) 24.3%
RESULT BEFORE TAXES AND INTEREST 252.7 156.2 61.7% 602.1 463.0 30.0%
SOCIAL CONTRIBUTIONS & INCOME TAX (24.0) 42.9 - (116.6) (73.0) 59.7%
DEFERRED INCOME TAX (68.7) (67.3) 2.1% (61.6) (48.0) 28.3%
NET INCOME 160.0 131.9 21.3% 423.9 342.0 24.0%
(1) EBITDA as of CVM Instruction 527/2012: Net Income + Social Contributions and Income Taxes + Net Financ ia l Result +
Depreciation/Amortization
(*) The consolidated financial statements include the Light S.A. and its subsidiaries and affiliates. These financial statements were eliminated
from equity consol idated companies, the balances of receivables and payables, revenues a nd expenses between the companies.
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ANNEX III
Consolidated Balance Sheet - R$ million
ASSETS 12/31/2012 12/31/2011
Current 2,338.8 2,681.8
Cash & Cash Equivalents 392.9 780.7
Receivable Accounts 1,446.2 1,383.6
Inventories 30.4 27.4
Recoverable Taxes 210.8 225.5
Prepaid Expenses 2.4 2.2
Other Current Assets 256.1 262.3
Non-current 9,387.8 8,379.4Receivable Accounts 289.6 298.5
Deferred Taxes 830.2 836.4
Prepaid Expenses 0.0 0.3
Others Non-current Assets 1,938.5 1,029.3
Investiments 91.9 54.1
Fixed Assets 2,220.6 1,985.8
Intangible 4,017.1 4,174.9
Total Assets 11,726.6 11,061.1
LIABILITIES 12/31/2012 12/31/2011
Current 2,086.7 1,942.0
Suppliers 861.8 757.2
Fiscal obligations 136.1 124.6
Loans and Financing 391.0 304.6
Debentures 151.8 213.7
Others Obligations 310.8 308.5
Provisions 160.3 159.7
Dividends and interest on equity to be paid 74.8 73.7
Non-current 6,614.2 5,947.3
Loans and Financing 2,200.7 1,853.7Debentures 1,922.5 1,790.1Others Obligations 1,587.6 1,445.3Deferred Taxes 320.2 342.4
Provisions 583.2 515.7
Shareholders' Equity 3,025.7 3,171.8
Realized Joint Stock 2,225.8 2,225.8
Profit Reserves 256.5 341.7
Additional Proposed Dividend 91.8 181.5
Asset Valuation Adjustments 451.6 472.4
Accumulated Profit/Loss of Exercise - -49.5Total Liabilities 11,726.6 11,061.1
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ANNEX IV
Regulatory Assets and Liabilities
R$ Million dec/12 sep/12 Jun-12 Mar-12 dec/11 Sep/11 Jun-11 Mar-11 dec/10
TOTAL ASSET 360.7 262.7 174.4 177.8 185.3 151.2 134.3 149.8 161.6
TOTAL LIABILITIES (10.6) (45.6) (76.0) (155.1) (160.6) (158.6) (256.6) (277.7) (224.0)
TOTAL DIFFERENCE 350.1 217.1 98.4 22.7 24.8 (7.4) (122.2) (127.8) (62.4)
Net difference (period) 132.9 118.7 75.7 (2.1) 32.1 114.9 5.6 (65.4) 78.0
Net difference (accumulated) 251.7 194.5 73.6 - 87.2 55.0 (59.8) - (213.3)
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ANNEX V
In 2012, Light changed its accounting policy regarding the recording of actuarial gains or losses related to the
defined benefit pension schemes. Previously, gains or losses were immediately recognized in the income
statement for the year and are now immediately recognized under other comprehensive income in shareholders’
equity, in accordance with CVM Deliberation 600/09. This accounting practice allows for more relevant
information to be presented and will be consistent for the next fiscal years for recording actuarial gains or losses.
To comply with CVM Deliberation 592/09, comparative balances were duly adjusted to reflect the change
retrospectively. The impact on shareholders’ equity was a R$40.9 million reduction on January 1st, 2011, and a
R$49.5 million decrease on December 31, 2011, versus a R$31.3 million increase in net income in fiscal year 2011.
The Brazilian Securities and Exchange Commission (CVM) issued Instruction 527/12, which deals with the
voluntary disclosure of non-accounting information denominated as EBITDA. This instruction is aimed at
standardizing the disclosure, with a view to improving the level of understanding of this information and ensuring
its comparability between publicly-traded companies. The Instruction sets forth the parameters for EBITDA
calculation and the criteria for its disclosure. EBITDA will be obtained as follows: net income for the period, plus
income taxes, financial expenses net of financial revenue, and depreciation, amortization and depletion.
In light of such adjustments, we are presenting the reclassified results for 4Q2011 and for 2011, so as to maintain
the comparability with the results presented in 2012, as shown in the following tables:
Published Reclassified
4Q11 4Q11
NET OPERATING REVENUE 1,815.1 1,815.1
OPERATING EXPENSE (1,573.6) (1,578.1)
Other Operating Revenue/Expenses - (4.5) (4.5)
OPERATING REVENUE 241.5 237.0
EQUITY PICK-UP - -
EBITDA 328.1 323.6
FINANCIAL RESULT (128.2) 47.5 (80.8)
Other Operating Revenues/Expenses (4.5) 4.5 -
INCOME BEFORE TAXES AND INTEREST 108.8 156.2
SOCIAL CONTRIBUTIONS & INCOME TAX 59.1 (16.1) 42.9
DEFERRED INCOME TAX (67.3) (67.3)
NET INCOME 100.6 131.9
Consolidated Income Statement - R$ Mill ionChange of Accounting
Practice
CVM Instruction
527/2012
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Published Reclassified
2011 2011
NET OPERATING REVENUE 6,944.8 6,944.8
OPERATING EXPENSE (6,065.7) (6,071.6)
Other Operating Revenue/Expenses - (5.9) (5.9)
OPERATING REVENUE 879.1 873.2
EQUITY PICK-UP -
EBITDA 1,243.6 1,237.8
FINANCIAL RESULT (457.7) 47.5 (410.2)
Other Operating Revenues/Expenses (5.9) 5.9 -
INCOME BEFORE TAXES AND INTEREST 415.5 463.0
SOCIAL CONTRIBUTIONS & INCOME TAX (56.9) (16.1) (73.0)
DEFERRED INCOME TAX (48.0) (48.0)
NET INCOME 310.6 342.0
Consolidated Income Statement - R$ MillionCVM Instruction
527/2012
Change of
Accounting Practice