Management Proposal of the Ordinary Shareholders' Meeting - 04.28.14*

ENEVA S.A.

CNPJ/MF (Taxpayer Registration Number) 04.423.567/0001-21

NIRE (Company Registration Number) 33.3.0028402-8

(Publicly Held Company)

Management Proposal for the Ordinary General Shareholders’ Meeting to

be held on April 28th, 2014, at 11:00 a.m., pursuant to the Call Notice

published on the date hereof.

Dear Shareholders,

The Management of ENEVA S.A. (“Company” or “ENEVA”), in accordance with its

Bylaws and with applicable legislation, in order to serve the interests of the

Company, hereby proposes the following, with respect to the Ordinary General

Shareholders’ Meeting:

(i) Verify the management accounts, examine, discuss and vote on the

financial statements related to the fiscal year ended on December 31st,

2013:

The Company’s Management proposes that the Shareholders analyze and, after

careful consideration, approve the Financial Statements and Management Report,

as approved by the Company’s Board of Directors in the meeting held on March

27th, 2014. The Management also recommends the approval of the management

accounts and the acknowledgement of the Independent Auditors’ Report related to

the fiscal year that ended on December 31st, 2013.

The Financial Statements and the Management Report were published on March

28th, 2014, in the Diário Oficial do Estado do Rio de Janeiro and in the Diário

Mercantil. The mentioned documents, along with the standardized financial

statements form – DFP and the comments of the Management regarding the

Company’s financial status are available on the website of the Brazilian Securities

and Exchange Commission (Comissão de Valores Mobiliários – CVM)

(www.cvm.gov.br), on the BM&FBovespa website (www.bmfbovespa.com.br) and

on ENEVA’s website (http://ri.eneva.com.br/), pursuant to CVM Rule 481/09.

http://www.cvm.gov.br/

http://www.bmfbovespa.com.br/

(ii) Approve the allocation of the income of the fiscal year ended on

December 31st, 2013:

Considering the negative results of the fiscal year, at R$ 942.5 million, it is not

applied any proposition of allocation of the income. In this sense, the presentation

of the Annex 9-1-II pursuant of the CVM Rule 481/09 is not applied.

(iii) Establish the global annual amount of the management compensation:

The Management proposes the approval of an aggregate compensation for the

Company’s Management in the amount of up to R$8.5 million, to be distributed in

accordance with the duties undertaken, the time devoted to the Company and the

professional expertise of each member of the Management. This amount, which will

not necessarily be fully expended, is comprised of approximately R$300.000,00

(three hundred thousand Reais) for payment of the fixed fees of the members of

the Board of Directors and of the Committees related to such governing body. In

addition to the compensation detailed above, the members of the Company’s

Management may exercise and/or receive stock options for subscription of shares

of the Company, pursuant to the Company’s Stock Purchase or Subscription Option

Program, available on the Company’s Investor Relations website

(http://ri.eneva.com.br/) and on the CVM’s website (www.cvm.gov.br). The

proposed remuneration for the Company’s Executive Officers of up to R$8.2 million

comprises fees and benefits.

As instructed by Item 2.4.2.a of the Ofício-Circular/CVM/SEP/Nº01/2014, below lies

the comparison between the amounts approved in the Management Proposal for the

Ordinary General Shareholders’ Meeting held on April 29th, 2013 and payments

actually incurred.

Amounts approved in

the Management

Proposal for the

Ordinary General

Shareholders’ Meeting

held on April 29th, 2013

Payments actually

incurred in the fiscal

year of 2013

Board of

Directors 800,000.00 610,936.54

Executive

Committee 6,200,000.00 44,389,795.86

Total 7,000,000.00 45,000,732.40

The difference between the approved amounts and those actually incurred is mainly

due to stock-based compensation received by the administrators during the fiscal

year of 2013 related to the exercise of stock options of the Shareholder’s Plan and

the Company’s Program, described in Item 13 of Reference Form.

Additionally, we clarify that any differences between the amounts of the

Management compensation scheduled for the fiscal year of 2014 presented in the

Management Proposal and in the Item 13 of the Reference Form are due to the

need of possible adjustments during the fiscal year.

Pursuant to article 12 of CVM Rule 481/09, additional information related to

Management compensation, according to item 13 of the Reference Form, is

attached hereto as Annex III. Such information is also available Company’s website

(http://ri.eneva.com.br/), on the CVM’s website (www.cvm.gov.br), and on

BM&FBovespa’s website (www.bmfbovespa.com.br).




GENERAL CLARIFICATIONS REGARDING PARTICIPATION IN THE

SHAREHOLDERS’ MEETING:

In order to participate in the Meeting, the Shareholders shall be present, in person

or by proxy, at the time and place set forth for the Meeting, pursuant to the Call

Notice, and shall present the following documents:

(a) Individual Shareholders:

(i) Shareholder’s identification document;

(ii) Statement of equity participation issued by the custodian of the

Company’s shares no more than 2 (two) business days prior to the

Shareholders’ Meeting; and,

(iii) In the event the shareholder is represented by a proxy, the

documents listed in item (c) below.

(b) Legal Entity Shareholders:

(i) Identification document of the legal representative or proxy in

attendance;

(ii) Statement of equity participation issued by the custodian of the

Company’s shares no more than 2 (two) business days prior to the

Shareholders’ Meeting;

(iii) Updated Bylaws or Articles of Association, registered with the

relevant authority;

(iv) Document evidencing the powers of representation: minutes of the

meeting in which the legal representative or person who signed the

power-of-attorney was elected, as the case may be;

(v) In the event the shareholder is represented by a proxy, the

documents listed in item (c) below; and,

(vi) In the event the shareholder is an equity fund, the charter and

documents related to its manager listed in item (iv) above.

(c) Shareholders represented by proxy:

In the event the shareholder prefers to be represented by proxy, such shareholder

shall also furnish the following documents:

(i) Notarized Power-of-attorney, issued less than one year from the date

of the Shareholders’ Meeting, as legally required (article 126,

paragraph 1 of Law 6,404/76). The proxy must be a shareholder,

manager of the Company, attorney, financial institution or equity

fund manager representing the investors; and

(ii) Proxy’s identification document;

Note: Proxies granted outside of Brazil shall be notarized by a duly

authorized notary, registered with the Brazilian consulate and translated to

the Portuguese language by a sworn translator.

In order to expedite the organization of the Shareholders’ Meeting, the Company

requests that the above listed documents be delivered at least 2 business days

prior to the Shareholders’ Meeting, by hand delivery, courier or e-mail (in the latter

case, the hard copy must be furnished at the Shareholders’ Meeting) to the

following addresses:

Hard Copies:

Att.: Corporate Governance

Praia do Flamengo, 66, 7th floor

CEP: 22.210-903, Rio de Janeiro – RJ

E-mail:

Please include in the subject line:

Documents Shareholders’ Meeting of ENEVA - April 28th, 2014

E-mail: [email protected]

The Company would like to note that the purpose of the prior delivery of the

documents is to streamline the proceedings related to the Shareholders’ Meeting

and such prior delivery is not a requirement for participation in the Meeting.

Finally, the Company would like to clarify that this Management Proposal, together

with the relevant Call Notice, are available at CVM’s website (www.cvm.gov.br), at

BM&FBOVESPA’s website (www.bmfbovespa.com.br), as well as on the Company’s

Investor Relations (http://ri.eneva.com.br/). Additionally, the documents related to

this Call Notice, including those required by CVM Rule 481/09, are available to the

shareholders’ at the Company’s head office.

Rio de Janeiro, March 27th, 2014.

The Management.

Jørgen Kildahl

Chairman of the Board of Directors

ENEVA S.A.



ANNEX I

ITEM 10 OF THE REFERENCE FORM

10.1 General financial and equity conditions

The information given below has been reviewed by the Company Management, and

their comments are attached.

The figures shown in this section 10 have been extracted from the Company

consolidated financial statements for the years ended December 31, 2012, 2011

and 2010 and the quarterly financial statements – QFS for the quarter ended March

31, 2013.

(a) Management’s comments on the general financial and equity

conditions

The Company Management has the following comments to make on the general

financial and equity conditions of the Company:

In the year 2011, our Company recorded consolidated gross revenue of R$189.9

million, R$42.3 of which from the operation of Serra do Navio thermoelectric plant

and R$148.1 million from the energy trader. The Company recorded a loss of

US$408.5 million for this year, with consolidated cash position (cash and cash

equivalents, marketable securities) at the end of 2011 to R$ 1,380.2 million,

consisting mainly of issuance in June year of R$ 1,377 billion in convertible

debentures. Loans and financings totaled R$ 3.321 million.

In the year 2012, the Company reported a consolidated gross revenue of R$ 54.1

million, which is entirely caused by the Amapari, Comercializadora de Energia e

Itaqui operation. Our Company recorded a loss of R$435.2 million for this year;

however, it recorded consolidated cash and cash equivalents as of December 31,

2012, of R$519.3 million, while securities amounted to R$3.4 million. On

December 31, 2012, loans, financing and debentures totaled R$6,072.4 million,

giving a net debt position of R$4,924.8 million.

In 2013, the Company reported a consolidated at $ 1.600,3 million gross revenue,

this revenue was originated by the operation of subsidiaries Pecém II, Itaqui

Parnaíba Parnaíba and II and Amapari. Our Company recorded loss of R$942.4

million for this year; however, it recorded consolidated cash and cash equivalents of

R$277.6 million. On December 31, 2013, loans, financing and debentures totaled

R$6,210.5 million.

It should be noted that due to the adoption of new accounting practices (IFRS 11),

the Company has ceased to record proportionally the revenue from some investees,

among which is Comercializadora de Energia and Port of Pecém.

The Company’s overall liquidity ratio, measured as the sum of current and non-

current assets over the sum of current and non-current liabilities, was 1.24 as of

December 31, 2011, 1.51 as of December 31, 2012, and 1.36 as of December 31,

2013.

The Management believes that, as explained in Note 1 – Operation Context of the

Financial Statement of December 31, 2013, the Company has sufficient financial

and equity conditions to implement its business plan and meets its current

obligations in the short, medium and long term.

(b) Management’s comments on the capital structure and the possibility

of redemption of shares or quotas

The make-up of our Company’s capital structure is shown below, for the periods

indicated. In the opinion of Management, the current capital structure indicates a

satisfactory relationship between own capital and third party capital.

As of December 31, 2013, our Company’s capital structure was made up of

27% of own capital and 73% of third party capital. On that date, the

consolidated equity of MPX was R$ 2,573 billion while the gross debt plus the

liabilities to third parties totaled US$ 7,115 billion.

As of December 31, 2012, our Company’s capital structure consisted of 34%

of own capital and 66% of third party capital. On that date, the consolidated

equity of ENEVA was R$ 2,701 billion while the gross debt plus the liabilities

to third parties totaled US$5,338.5 billion.

As of December 31, 2011, our Company’s capital structure consisted of 19%

of own capital and 81% of third party capital. On that date, the consolidated

equity of ENEVA was R$ 1,370 billion while the gross debt plus the liabilities

to third parties totaled US$5,753 billion.

i. circumstances in which shares or quotas could be redeemed

Management also notes that our Company has not issued any redeemable shares.

ii. formula for calculating redemption value of shares or quotas

Management also notes that there is no formula for calculation redemption value,

since the Company has not issued any redeemable shares.

(c) Management comments on the Company’s ability to meet financial

commitments assumed

Management believes that our Company is fully able to meet all its financial

commitments, since its major undertakings have been structured as Project

Finance, with approximately 25% of total investments being met from its own

resources, which are disbursed pari passu with external financing. These

undertakings are also linked to Regulated Environment Electricity Sales Contracts

(CCEAR), which allow generation of fixed revenues for 15 and 20 years (provided

the parties comply with their respective contractual obligations).

Our operation is performed through an interest, as a shareholder, in the capital

stock of companies that develop such projects. Some of these projects are

developed in partnership with other agents of the energy sector. Funds for the

projects have been raised basically from the Company’s IPO, held on December 14,

2007, and January 11, 2008, (over-allotment shares), in the total amount of R$2

billion as well as from financing and more recently from the issuance of 21,735,744

debentures convertible into shares, held on June 15, 2011, in the amount of R$1.4

billion. On May 24, 2012, 21,653,300 debentures were converted into 33,255,219

new shares, by virtue of the corporate restructuring process implemented by the

Company in the year 2012. On March 28, 2013 the controlling shareholder of MPX

Energia S.A., Mr. Eike Furken Batista celebrated at E.ON SE an investment

agreement which provides for the following events:

(a) On May 29, 2013 E.ON acquired shares of the Company owned by Eike Batista

representing approximately 24.5% of the share capital of MPX.

(b) At the date of acquisition of the shares of MPX, E.ON and Eike Batista signed a

shareholders' agreement,

which regulated the exercise of voting rights and restrictions on transfers of shares

held by them.

(c) In August 2013, the private capital increase of approximately R$800 million was

completed, with a subscription price fixed at R$ 6.45 per share.

The Company is working towards a partial settlement and long-term rollover in

2013 these short-term debt and capitalize the company to face the investment

needs of potential new projects.

(d) Sources of financing for working capital and investments in non-

current assets

Our reply below under item “f” gives details of sources for financing investments in

non-current assets.

Management believes that the sources of finance used are adequate for our

Company’s debt profile, since projects have been structured on the basis of Project

Finance supplied by development banks at subsidized rates of interest and on

extended repayment terms of up to 14 years.

(e) Sources of financing for working capital and investments in non-

current assets which are intended to be used to cover liquidity shortfalls

TAs stated above, we are arranging to settle part of this short-term finance during

2013, and to replace the rest with long-term debt, so as to provide the

capitalization needed for the company to invest in potential new projects.

(f) Levels of indebtedness and characteristics of the debt

(i) Relevant loan and financing agreements

The following table shows our Company’s consolidated indebtedness with financial

institutions as of December 31, 2013, 2012 and 2011, with the corresponding

interest rates and maturity dates. The amounts are stated in thousands of Reais.

Consolidated

12/31/13

12/31/12

Company Creditor

Currency Interest Rate Maturity Effective

Rate

Transaction

cost

Cost to be

recognized Principal

Interest

Rate Total

Transaction

cost

Cost to be


Interest

Rate Total

Itaqui BNDES (Direct) (a) R$ TJLP+2.78% 6/15/26 2.89% 11,182

9,913

830,630

2,586

823.304

11,182

10,541

898,472

2,772

890,703

Itaqui BNB (b) R$ 10.00% 6/15/26 10.14% 2,892

2,727

201,977

857

200,107

2,892

2,816

202,322

859

200,365

Itaqui BNDES (Indirect) (c) R$ IPCA + TR

BNDES+ 4.8% 6/15/26 4.80% 1,475

1,473

109,302

6,041

113,870

1,475

1,475

111,299

31,378

141,202

Itaqui BNDES (Indirect) (d) R$ TJLP+4.8% 6/15/26 4.94% 2,023

1,953

162,052

632

160,731

2,023

2,000

175,016

669

173,685

Pecém II BNDES (Direct) (e) R$ TJLP+2.18% 6/15/27 7.24% 7,803

6,091

710,327

2,054

706,290

7,803

6,854

695,027

2,002

690,175

Pecém II BNDES (Direct) (f) R$ IPCA+ TR

BNDES + 2.18% 6/15/27 13.51% 1,740

1,294

131,607

42,840

173,153

1,740

1,482

124,439

25,814

148,772

Pecém II BNB (g) R$ 10.00% 1/31/28 10.30% 4,287

3,620

250,000

4,070

250,450

4,164

3,773

235,000

3,826

235,053

Parnaíba I BRADESCO (h) R$ CDI+3.00% 12/18/14 4.49% 4,593

-

48,000

117

48,117

4,593

1,571

60,000

5,634

64,063

Parnaíba I Banco Itaú BBA (i) R$ CDI+3.00% 4/15/15 3.44% 11,516

-

60,670

776

61,446

8,917

4,646

65,000

7,675

68,029

Parnaíba I BNDES (Direct) (j) R$ TJLP+1.88% 6/15/27 2.16% 16,867

16,860

493,444

1,370

477,980

2,998

2,998

495,676

392

493,070

Parnaíba I BNDES (Direct) (k) R$ IPCA + TR

BNDES + 1.88% 7/15/26 2,17% 6,953

6,663

215,988

10,408

219,733

1,236

1,237

204,388

38

203,189

Parnaíba

II Banco Itaú BBA (l) R$ CDI+3.00% 12/30/14 - -

-

200,000

146

200,146

-

-

100,000

8,189

108,189

Parnaíba II

Banco HSBC (m) R$ CDI+3.00% 12/31/13 - -

-

-

-

-

-

-

125,000

10,236

135,236

Parnaíba

II Banco HSBC (m) R$ CDI+3.00% 12/31/13 - -

-

-

-

-

-

-

-

-

-

Parnaíba II

CEF (n) R$ CDI+3.00% 12/30/14 - -

-

280,000

286

280,286

-

-

325,000

21,523

346,523

Parnaíba

II BNDES (o) R$ TJLP+2.40% 6/15/15 - 3,619

3,619

280,700

223

280,923

-

-

325,000

21,523

346,523

ENEVA S/A

Banco Itaú BBA (p) R$ CDI+2.65% 12/16/14 - -

-

105,790

503

106,293

-

-

105,790

368

106,158

ENEVA

S/A

Promissory

Notes - 1st Issue (q) R$ CDI+1.50% 12/15/13 - -

-

-

-

-

-

-

300,000

11,595

311,595

ENEVA

S/A Banco Citibank (r) R$ CDI+2.95% 9/22/14 - -

-

101,250

3,107

104,357

-

-

101,250

2,042

103,292

ENEVA

S/A Banco Citibank (s) US$

LIBOR 3M +

1.26% 9/27/17 - -

-

117,130

20

117,150

-

-

102,175

18

102,193

ENEVA

S/A

Promissory

Notes - 2nd Issue

(t) R$ CDI+1.50% 12/9/13 - -

-

-

-

-

-

-

300,000

1,005

301,005

ENEVA

S/A

Promissory

Notes - 3rd Issue (u) R$ CDI+2.95% 12/25/13 - -

-

-

-

-

-

-

-

-

-

ENEVA S/A

Banco BTG Pactual

(v) R$ CDI+3.75% 12/9/14 - -

-

101,912

792

102,705

-

-

101,912

372

102,284

ENEVA

S/A

Banco BTG

Pactual (w) R$ CDI+3.75% 6/9/15 - -

-

350,000

2,559

352,559

-

-

-

-

-

ENEVA S/A

Banco BTG Pactual

(x) R$ CDI+3.75% 12/9/14 - -

-

370,000

1,196

371,196

-

-

-

-

-

ENEVA

S/A Banco HSBC (y) R$ CDI+2.75% 12/12/14 - -

-

303,825

1,747

305,572

-

-

-

-

-

ENEVA

S/A Banco Citibank (z) R$ CDI+4.00% 11/3/14 - -

-

42,000

879

42,879

-

-

-

-

-

ENEVA

S/A Banco Citibank (aa) R$ CDI+4.00% 12/9/14 - -

-

100,000

792

100,792

-

-

-

-

-

ENEVA

S/A Banco Itaú BBA (bb) R$ CDI+2.65% 12/5/14 - -

-

200,000

1,618

201,618

-

-

-

-

-

ENEVA

S/A Banco Itaú BBA (cc) R$ CDI+2.65% 12/9/14 - -

-

210,000

1,499

211,499

-

-

-

-

-

ENEVA

S/A Banco Santander (dd) R$ CDI+3.25 1/15/15 - -

-

66,667

336

67,003

-

-

-

-

-

Consolidated

12/31/13

12/31/12

Company Creditor

Currency Interest Rate Maturity Effective

Rate

Transaction

cost

Cost to be


Interest

Rate Total

Transaction

cost

Cost to be


Interest

Rate Total

ENEVA

S/A Morgan Stanley (ee) R$ CDI+3.25 1/15/15 - -

-

66,667

336

67,003

-

-

-

-

-

ENEVA

S/A Banco Itaú BBA (ff) R$ CDI+3.25 1/15/15 - -

-

66,667

336

67,003

-

-

-

-

-

71,331

54,213

3,339,202

88,129

6,210,520

49,023

39,393

5,152,766

157,929

5,271,303

Cost to be recognized

Principal

Interest Rate

Total

Cost to be recognized

Principal

Interest Rate

Total

Working

2,606

2,322,842

87,906

2,410,748

6,984

1,716,403

110,555

1,819,974

Noncurrent

51,607

3,853,762

223

3,853,984

32,409

3,111,363

25,852

3,104,806

The table below sets forth the composition of loans of the joint subsidiary Porto do Pecém Geração de Energia S.A. and the indirect subsidiary MPX

Chile Holding Ltda., and Parnaíba IV Geração de Energia S.A., which, as from 2013, by applying the new consolidation rules introduced by the

adoption of IFRS 11, we have no obligation to submit financial statements:

12/31/13

12/31/12

Company Creditor

Currency Interest

Rate Maturity

Effective

Rate

Transaction

cost

Cost to be


Interest

Rate Total

Transaction

cost

Cost to be


Interest

Rate Total

Pecém I

(50%)

BNDES

(Direct) (gg) R$

TJLP +

2.77% 6/15/26

TJLP +

3.09% 8,461

4,844

740,449

2,312

737,918

8,461

5,644

799,685

2,475

796,516

Pecém I

(50%) BID (hh) US$

LIBOR +

3.50% 5/15/26

LIBOR +

4.67% 8,808

5,296

158,142

779

153,625

8,705

6,196

143,974

740

138,518

Pecém I

(50%) BID (ii) US$

LIBOR +

3.00% 5/15/22

LIBOR +

4.16% 8,939

5,375

184,506

791

179,922

8,814

6,001

173,716

782

168,498

Chile (50%) Banco Credit

Suisse (jj) US$ 8,125% 4/15/15 - -

-

10,519

183

10,702

-

-

14,907

267

15,173

Chile (50%) Banco Credit

Suisse (kk) US$ 8,000% 4/15/15 - -

-

7,013

120

7,133

-

-

10,232

175

10,408

Parnaíba IV

(35%)

Banco BTG

Pactual (ll) R$

CDI +

2.28% 1/29/14 - -

-

24,500

1,796

26,296

-

-

-

-

-

Parnaíba III

(35%)

Banco

Bradesco (mm) R$

CDI +

2.53% 1/31/14 - -

-

42,000

493

42,493

-

-

-

-

-

26,208

15,514

1,167,129

6,475

1,158,089

25,980

17,841

1,142,514

4,439

1,129,113

Cost to be


Interest

Rate Total

Cost to be


Interest

Rate Total

Working

2,481

160,876

6,475

164,870

2,609

88,083

4,439

89,913

Noncurrent

13,033

1,006,252

-

993,219

15,231

1,054,432

-

1,039,201

Consolidated

12/31/13 12/31/12

Company Creditor

Currency Interest Rate Maturity Effective Rate Transaction cost

Cost to be


Interest

Rate Total

Transaction

cost

Cost to be


Interest

Rate Total

Itaqui BNDES (Direct) (a) R$ TJLP+2.78% 6/15/26 2.89% 11,182

10,541

898,472

2,772

890,703

11,204

11,087

868,996

3,256

861,165

Itaqui BNB (b) R$ 10.00% 6/15/26 10.14% 2,892

2,816

202,322

859

200,365

2,948

2,917

202,755

861

200,699

Itaqui BNDES (Indirect) (c) R$ IPCA + TR BNDES+ 4.8% 6/15/26 4.94% 1,475

1,475

111,299

31,378

141,202

1,358

1,344

114,470

581

113,707 Itaqui BNDES (Indirect) (d) R$ TJLP+4.8% 6/15/26 4.94% 2,023

2,000

175,016

669

173,685

2,062

2,040

172,279

787

171,026

PecemI BNDES (Direct) (e) R$ TJLP+2.77% 6/15/26 TJLP + 3.11% 8,461

5,644

799,685

2,475

796,516

8,437

6,428

735,867

2,689

732,128

PecemI BID (f) US$ LIBOR+3.5% 5/15/26 LIBOR + 4.52% 8,705

6,196

143,974

740

138,518

8,052

6,265

134,856

717

129,308

PecemI BID (g) US$ LIBOR+3.0% 5/15/22 LIBOR + 4.02% 8,814

6,001

173,716

782

168,498

8,013

6,239

165,073

772

159,606 Colombia Banco Santander (h) US$ LIBOR+2.0% 7/5/12 - -

-

-

-

-

-

-

45,957

639

46,596

PecemII BNDES (Direct) (i) R$ TJLP+2.18% 6/15/27 7.67% 7,803

6,854

695,027

2,002

690,175

7,803

7,316

579,717

2,029

574,430

PecemII BNDES (Direct) (j) R$ IPCA+ TR BNDES + 2.18% 6/15/27 9.63% 1,740

1,482

124,439

25,814

148,772

1,740

1,660

117,886

11,749

127,975

MPX S/A Banco Itaú BBA (k) R$ CDI+2.85% 6/17/13 - -

-

105,790

368

106,158

-

-

105,790

495

106,285

PecemII BNB (l) R$ 10.00% 1/31/28 8.50% 4,164

3,773

235,000

3,826

235,053

4,139

4,007

235,000

3,826

234,819 Colombia Banco de Bogotá (m) COP DTF (TA)+2.23% 7/3/12 - -

-

-

-

-

-

-

44,849

821

45,670

Colombia Banco HSBC (n) US$ LIBOR+2.0% 4/13/12 - -

-

-

-

-

-

-

67,004

8

67,012

Colombia Banco de Bogotá (o) US$ LIBOR+2.0% 6/13/12 - -

-

-

-

-

-

-

46,895

709

47,604

Chile Banco Credit Suisse (p) US$ 8,13% 4/15/15 - -

-

23,023

400

23,423

-

-

28,137

536

28,673 Chile Banco Credit Suisse (q) US$ 8,00% 4/15/15 - -

-

15,349

263

15,612

-

-

18,758

358

19,116

Colombia Banco de Bogotá (r) US$ LIBOR+3.5% 12/19/12 - -

-

-

-

-

-

-

46,895

67

46,962

Colombia Banco HSBC (s) US$ LIBOR+3.5% 6/18/12 - -

-

-

-

-

-

-

28,137

37

28,174

Parnaíba I BRADESCO (t) R$ CDI+3.00% 6/26/13 4.49% 4,593

1,571

60,000

5,634

64,063

-

-

75,000

127

75,127 Parnaíba I Banco Itaú BBA (u) R$ CDI+3.00% 6/26/13 6,22% 8,917

4,646

65,000

7,675

68,029

-

-

125,000

212

125,212

Parnaíba I BNDES (Direct) (v) R$ TJLP+2.80% 3/15/13 - -

-

-

-

-

-

-

242,729

228

242,957

Parnaíba I BNDES (Direct) (w) R$ IPCA + TR BNDES + 2.8% 3/15/13 - -

-

-

-

-

-

-

157,382

118

157,500

Parnaíba I BNDES (Direct) (x) R$ TJLP+1.88% 6/15/27 1,93% 2,998

2,998

495,676

392

493,070

-

-

-

-

-

Parnaíba I BNDES (Direct) (y) R$ IPCA + TR BNDES + 1.88% 7/15/26 1,93% 1,236

1,236

204,388

38

203,190

-

-

-

-

- Parnaíba I Banco Santander (z) R$ CDI+3.00% 6/26/13 - -

-

-

-

-

-

-

-

-

-

Colombia Banco HSBC (aa) US$ LIBOR+2.65% 8/14/12 - -

-

-

-

-

-

-

-

-

-

Parnaíba II Banco Itaú BBA (bb) R$ CDI+3.00% 9/30/13 - -

-

100,000

8,189

108,189

-

-

-

-

-

Parnaíba II Banco HSBC (cc) R$ CDI+3.00% 9/30/13 - -

-

125,000

10,236

135,236

-

-

-

-

- Parnaíba II CEF (dd) R$ CDI+3.00% 11/7/13 - -

-

325,000

21,523

346,523

-

-

-

-

-

MPX S/A Banco BTG Pactual (ee) R$ CDI+1.50% 7/15/13 - -

-

200,000

7,730

207,730

-

-

-

-

-

MPX S/A Banco Santander (ee) R$ CDI+1.50% 7/15/13 - -

-

100,000

3,865

103,865

-

-

-

-

-

MPX S/A Banco Citibank (ff) R$ CDI+1.15% 9/27/13 - -

-

101,250

2,042

103,292

-

-

-

-

- MPX S/A Banco Citibank (gg) US$ LIBOR 3M + 1.26% 9/27/17 - -

-

102,175

18

102,193

-

-

-

-

-

Consolidated

12/31/13 12/31/12

Company Creditor

Currency Interest Rate Maturity Effective Rate Transaction cost

Cost to be


Interest

Rate Total

Transaction

cost

Cost to be


Interest

Rate Total

MPX S/A Banco BTG Pactual (hh) R$ CDI+1.50% 12/9/13 - -

-

100,000

335

100,335

-

-

-

-

-

MPX S/A Banco Morgan Stanley (hh) R$ CDI+1.50% 12/9/13 - -

-

100,000

335

100,335

-

-

-

-

-

MPX S/A Banco Citibank (hh) R$ CDI+1.50% 12/9/13 - -

-

100,000

335

100,335

-

-

-

-

-

MPX S/A Banco BTG Pactual (ii) R$ CDI+1.50% 12/13/13 - -

-

101,912

372

102,284

-

-

-

-

-

75,003

57,233

5,983,516

141,066 6,067,349 55,756 49,303 4,359,432 31,622 4,341,751

Cost to be


Interest

Rate Total

Cost to be


Interest

Rate Total

Working

9,593

1,809,781

115,213

1,915,402

-

1,020,230

10,457

1,030,687

Noncurrent

47,640

4,173,735

25,852

4,151,947

49,303

3,339,202

21,165

3,311,064

12

Below is a summary of our Company’s principal debt agreements:

Itaqui Geração de Energia S.A. (Itaqui)

(a) The Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico e

Social or “BNDES”) released the full amount of the R$784 million long-term

financing for Porto do Itaqui Geração de Energia S.A. thermoelectric plant, in

respect of sub-loans A, B and C, at an agreed annual cost of TJLP + 2.78%. The

financing period is 17 years, with amortization over 14 years and no repayments of

principal until July 2012. Sub-loan D, on the other hand, which is for R$13.6

million and intended for social investments (BNDES Social), pays interest only at

the TJLP rate. The BNDES Social line of credit is for a total period of 9 years, with

amortization over 6 years and no repayments of principal until July 2012. Interest

on these loans is being capitalized during the construction phase. With this the

principal balance on December 31, 2013, was R$ 830.6 million. Interest on these

loans was capitalized during the construction period. This funding has the

traditional package guarantee transactions in the form of Project Finance.

(b) To supplement the BNDES financing, Porto do Itaqui Geração de Energia S.A.

thermoelectric plant has raised a loan from BNB-FNE, for a total of R$203 million.

The final disbursement was made on July 28, 2011, and the loan is now drawn in

full. The BNB loan is for a total period of 17 years, with amortization over 14 years

and no repayments of principal until July 2012. The annual cost is 10%. There is a

15% compliance bonus, thus reducing the cost to 8.5% p.a. This funding has the

traditional package guarantee transactions in the form of Project Finance. The

principal balance on December 31, 2013, was R$ 201.9 million.

(c) R$99 million of the indirect BNDES line of credit, for which Banco Bradesco and

Banco Votorantim are the agents, has been disbursed to the Porto do Itaqui

Geração de Energia S.A. thermoelectric plant, in respect of sub-loans A, B, C, D

and E. This portion of the loan is for a total period of 17 years, with amortization

over 14 years and no payments of capital or interest until July 2012. The agreed

annual cost is IPCA + BNDES Reference Rate + 4.8% during the construction

phase, and IPCA + BNDES Reference Rate + 5.3% when the plant is in operation.

Interest on these loans is being capitalized during the construction phase. With

this the principal balance on December 31, 2013, was R$ 109.3 million. Interest on

these loans was capitalized during the construction period. This funding has the


(d) The full amount of sub-loan F, part of the loan described in (c) above, amounting

to R$141.8 million, has been disbursed to Itaqui. This part of the loan is for a

total period of 17 years, with amortization over 14 years and no payments of

capital or interest until July 2012. The agreed annual cost is TJLP + 4.8% during

the construction phase and TJLP + 5.3% when the plant is in operation. Interest

on these loans is being capitalized during the construction phase. With this the

principal balance on December 31, 2013, was R$ 162.0 million. Interest on these

loans was capitalized during the construction period. This funding has the


Pecém II Geração de Energia S.A. (Pecém II)

(e) By the end of March 2013, Pecém II had drawn down R$615.3 million of the

R$627.3 million provided under sub-loans A, B, C, D and L of the long-term

financing provided by BNDES (in nominal R$, excluding interest during the

construction phase). The sub-loans A, B, C and D are for a total period of 17

years, with amortization over 14 years and no payments of capital or interest until

July 2013. The agreed annual cost is TJLP + 2.18%. Interest on these loans is

being capitalized during the construction phase. With this the principal balance on

December 31, 2013, was R$ 710.3 million. This funding has the traditional package

guarantee transactions in the form of Project Finance.

13

(f) Pecém II has drawn down R$110.1 million, being the full amount of sub-loans E, F,

G, H and I under the long-term BNDES financing agreement mentioned in (i)

above. These sub-loans are for a total period of 17 years, with amortization over

14 years and no payments of capital or interest until July 2014. The agreed annual

cost is IPCA + BNDES Reference Rate + 2.18%. Sub-loan J for R$22 million, which

was part of this line of credit, was transferred to sub-loan A of the preceding item

in April 2012. The principal balance on December 31, 2013, was R$ 131.6 million.

This funding has the traditional package guarantee transactions in the form of

Project Finance.

(g) To supplement the BNDES financing, MPX Pecém II Geração de Energia S.A. has

raised a loan from BNB with FNE funds, for a total of R$250 million, totally drawn.

The BNB loan is for a total period of 17 years, with quarterly interest and

amortization over 14 years. No repayments of principal are due until February

2014, and the annual cost is 10%. There is a 15% compliance bonus, thus

reducing the cost to 8.5% p.a. This funding has the traditional package guarantee

transactions in the form of Project Finance.

Parnaíba Geração de Energia S.A. (Parnaíba I)

(h) (i) On December 276, 2011, the Parnaíba project raised R$75 million by means of

a Bank Credit Note (CCB) issued to Banco Bradesco S/A, having the parent

company as a guarantor. This is a bridge loan to finance the installation of the

Maranhão IV and V thermoelectric plants. Interest is 100% of the CDI rate plus 3%

p.a., with capital and interest being paid in full when the loan matures on June 26,

2013. A further amount of R$75 million was disbursed on February 28, 2012, on

the same conditions as for the earlier disbursement. R$90 million of capital, plus

interest accrued, was paid off on December 28, 2012, when the long-term loan

from BNDES, described in items (j) and (k). On June 26, 2013, the Company

renewed the principal balance of US$ 60 million, paying all interest due to date

through the new maturity on September 24, 2013 and keeping interest rates at

100% of the CDI rate plus 3% per year. On September 24, Parnaíba renegotiated

the terms of the contract changing its maturity to October 24, 2013, and

subsequently to November 24, 2013. On October 31, 2013, a new renegotiation

changed the maturity of the contract to December 18, 2014. Principal and interest

will be paid in 15 monthly installments. The principal balance on December 31,

2013, was R$ 48 million.

(i) On December 27, 2011, Parnaíba raised R$125 million by means of a Bank Credit

Note (CCB) issued to Banco Itaú BBA, against the guarantee of the parent

companies. This is a bridge loan to finance the installation of the Maranhão IV and

V thermoelectric plants. Interest is 100% of the CDI rate plus 3% p.a., with capital

and interest being paid in full when the loan matures on June 26, 2013. R$60

million of capital, plus interest accrued, was paid off on December 2012, when the

long-term loan from BNDES, described in items (j) and (k), was released On June

26, 2013, the Company renewed the principal balance of US$ 65 million, paying all

interest due to date through the new maturity on September 24, 2013 and keeping

interest rates at 100% of CDI plus 3% per year. On this date, a new renegotiation

changed the maturity of the contract to October 24, 2015 and later to April 15,

2015. Principal and interest will be paid in 05 monthly installments, starting on

April 15, 2014. The principal balance on December 31, 2013, was R$ 60.7 million.

(j) Parnaíba I drew down R$495.6 million in December 2012, being sub-loans B and C

of the long-term BNDES financing agreement totaling R$671 million. These sub-

loans will be amortized in 168 monthly installments, together with interest, starting

on July 15, 2013. The agreed cost is TJLP + 1.88% p.a. The principal balance on

December 31, 2013, was R$ 493.4 million.

14

(k) Additionally, Parnaíba I drew down R$204.3 million in December 2012, being the

full amount of sub-loan A of the long-term BNDES financing agreement referred to

in the preceding item. This sub-loan is to be amortized in 13 monthly installments,

together with interest, starting on July 15, 2014. The annual cost agreed is IPCA +

TR BNDES + 1.88%. Interest on these loans is being capitalized during the

construction phase. With this the principal balance on December 31, 2013, was R$

215.9 million. This funding has the traditional package guarantee transactions in

the form of Project Finance.

Parnaíba II Geração de Energia S.A. (Parnaíba II)

(l) On March 30, 2012, the Parnaíba II Geração de Energia S.A. thermoelectric plant

raised R$100 million by means of a Bank Credit Note (CCB) issued to Banco Itaú

BBA, against the guarantee of the parent company. This is a bridge loan to finance

the installation of the Parnaíba II thermoelectric plant. Interest is 100% of the CDI

rate plus 3% p.a., with capital and interest being paid in full when the loan

matures on September 30, 2013. The company renegotiated the contract

changing its maturity to December 30, 2013. Subsequently, it renegotiated the

contract changing its maturity to December 30, 2014 and raised additional funding

of R$ 100 million maturing in December 2014. The principal balance at December

31, 2013, 30 corresponds to R$ 200 million.

(m) On March 30, 2012, the Parnaíba II Geração de Energia S.A. thermoelectric plant

raised R$125 million by means of a Bank Credit Note (CCB) issued to Banco HSBC,

in the amount of R$125 million, against the guarantee of the parent company.

This is a bridge loan to finance the installation of the Parnaíba II thermoelectric

plant. Interest is 100% of the CDI rate plus 3% p.a., with capital and interest

being paid in full when the loan matures on September 30, 2013. UTE Parnaíba II

renegotiated the contract changing its maturity to December 30, 2013. On June 3,

2013, an additional US$ 100 million was disbursed by the bank under the same

conditions of the previous disbursement, but with maturity of principal and interest

on December 31, 2013. The R$ 225 million of the principal was awarded in

December 2013, together with interest accrued to date.

(n) On May 2012, the Parnaíba II Geração de Energia S.A. thermoelectric plant raised

R$325 million under a Bank Credit Notes (CCBs) agreement with Caixa Econômica

Federal, against the guarantee of the parent company. This bridge loan intended

to finance the installation of the thermoelectric plant Maranhão III, was disbursed

in one tranche of US$ 125 million and two of R$ 100 million, on May 8, 2012, May

15, 2012 and May 30, 2012 respectively, and has an annual interest rate of 100%

of the CDI rate plus 3% and an original maturity on November 7, 2013 with

principal and interest paid in the end. At the time of maturity, the company

renegotiated the contract changing its maturity to December 30, 2013. At this date

R$ 45 million were settled, plus accrued interest to the date, and renegotiated with

the remaining value due on December 30, 2014. The principal balance on

December 31, 2013, was R$ 280.0 million.

(o) Parnaíba II received from BNDES a bridge loan in the amount of R$ 280.7 million

at the end of December 2013. These sub-loans will be amortized in a single

installment on June 15, 2015, together with interest. The agreed cost is TJLP +

2.40% p.a.

ENEVA S.A. (ENEVA)

(p) On December 16, 2013, Eneva renegotiated the R$ 105.8 million CCB (Bank Credit

Notes), with Banco Itaú BBA S.A., paying all interest due until that date, extending

the new maturity date to December 16, 2014. The cost corresponds to CDI plus

2.65% per year, with principal and interest paid at the end of the operation.

(q) On July 18, 2012, ENEVA S.A. made the first public distribution of 300 trade

promissory notes, in a single series, with a nominal value of R$1 million each, for a

15

total amount of R$300 million, maturing 360 days after issue and paying interest

at the CDI rate plus 1.5% p.a. The promissory notes were settled in advance June

28, 2013, by the issuance of new promissory notes described in item (u) below.

(r) On September 27, 2012, the parent company Eneva S.A issued at Banco Citibank

SA a CCB (Bank Credit Notes) in the amount of R$ 101,250 maturing on

September 27, 2013. The agreed interest was 100% of CDI plus 1.15% per annum

and will be paid at maturity on September 27, 2013. On this date the ENEVA S/A

renewed this contract changing the maturity to September 22, 2014 and changing

the interest rate to CDI plus 2.95% per annum.

(s) On September 25, 2012, ENEVA S.A. obtained a loan from Citibank N.A. United

States through a Credit Agreement, under Central Bank (BACEN) Resolution 4.131,

for US$50 million (the equivalent of R$101.5 million). Interest on this raising is

fixed at LIBOR + 1.26% p.a., to be paid quarterly. The principal is to be paid half-

yearly, with no capital payments until September 26, 2014, and the loan matures

on September 27, 2017. As a currency hedge for this raising, ENEVA S.A. entered

into a swap operation with Citibank itself. The principal balance at December 31,

2013, was R$ 117 million. See Explanatory Note 18.

(t) On December 13, 2012, ENEVA S.A. made the public distribution of 300 trade

promissory notes, in a single series, with a nominal value of R$1 million each, for a

total amount of R$300 million, maturing 360 days after issue and paying interest

at the CDI rate plus 1.5% p.a. These promissory notes were settled at maturity.

(u) On December 13, 2013, Eneva S/A made the public distribution of 33 trade

promissory notes, in a single series, with a nominal value of R$10 million each, for

a total amount of R$330 million, maturing on December 31, 2013 and paying

interest at the CDI rate plus 2.95% p.a. These promissory notes were settled at

maturity.

(v) On December 13, 2012, ENEVA S.A. issued a Bank Credit Note (CCB) to Banco BTG

Pactual for an amount of R$101.9 million, maturing on December 13, 2013.

Interest, which will be payable on maturity, is at 100% of the CDI rate plus 1.5%

p.a. At the time of maturity, the line was renegotiated to mature on December 9,

2014. Interest will be paid quarterly to the cost of CDI plus 3.75% p.a. The

principal will be paid in full at maturity.

(w) On February 7, 2013, ENEVA S.A. issued a Bank Credit Note (CCB) to Banco BTG

Pactual S.A. in the amount of R$350.0 million, maturing on August 7, 2013.

Interest, which will be payable on maturity, was set at 100% of the CDI rate plus

2.95% p.a. On August 6, 2013, the Company renegotiated the loan maturity to

December 2, 2013. A new rescheduling postponed the debt maturity to June 9,

2015, with interest to be paid quarterly at CDI + 3.75% p.a. and principal payable

at maturity.

(x) Eneva issued a Bank Credit Note (CCB) to Banco BTG Pactual for an amount of

R$100 million on December 9, 2013 and R$ 270 million on December 26, 2013,

both with the principal maturing on December 9, 2014. Interest, to be paid

quarterly, is at 100% of the CDI rate plus 3.75% p.a.

(y) On March 25, 2013, ENEVA S.A. issued a Bank Credit Note (CCB) to HSBC Bank

Brasil S.A. in the amount of R$100 million, maturing on March 25, 2014. Interest,

which will be payable on maturity date, was set at 100% of the CDI rate plus

1.75% p.a. The interest accumulated until December 12, 2013 was paid and a

new maturity was agreed for December 12, 2014. The spread for this new period

will be 2.75% per annum. At the time of renegotiation, the company issued new

CCB in the amount of R$ 203.8 million, due on December 12, 2014. The cost

corresponds to 100% of CDI plus 2.75% per year, with principal and interest paid

at maturity.

16

(z) Eneva contracted with Citibank S.A. a debt of R$ 42 million (as CCB), on November

1, 2013, maturing on November 3, 2014. Interest will be paid quarterly to the cost

of 100% of CDI plus 4.00% p.a., and the principal will be paid at maturity.

(aa) Eneva issued with Banco Citibank SA CCB (Bank Credit Notes) in the amount of R$

100 million on December 9, 2013 maturing on December 9, 2014., The agreed

interest were 100% of CDI plus 4.00% p.a. with payment of principal and interest

at maturity.

(bb) Eneva issued with Itaú BBA BAC (Bank Credit) in the amount of R$ 200 million on

December 5, 2013 maturing on December 5, 2014. The agreed interest was 100%

of CDI plus 2.65% per annum and will be paid at maturity.

(cc) Eneva issued with Itaú BBA CCB (Bank Credit Notes) in the amount of R$ 210

million, on December 9, 2013, maturing on December 9, 2014. The agreed interest

was 100% of CDI plus 2.65% per annum and will be paid at maturity.

(dd) Due to the OGX Maranhão (current Parnaíba Gás Natural) negotiations, Eneva

acquired from Banco Santander a debt of R$66.6 million (as CCB) on November

04, 2013 with maturity on 15 January 2015. The interest will be paid monthly at

the cost of 100% of CDI plus 3.25% p.a. until June 14, 2014, 3,75% p.a. until

September 14, 2014 and 4,25% p.a. until the date of maturity of the CCB. The


(ee) Due to the OGX Maranhão (current Parnaíba Gás Natural) negotiations, Eneva

acquired from Morgan Stanley a debt of R$66.6 million (as CCB) on November 04,

2013 with maturity on 15 January 2015. The interest will be paid monthly at the

cost of 100% of CDI plus 3.25% p.a. until June 14, 2014, 3,75% p.a. until

September 14, 2014 and 4,25% p.a. until the date of maturity of the CCB. The


(ff) Due to the OGX Maranhão (current Parnaíba Gás Natural) negotiations, Eneva

acquired from Itaú BBA a debt of R$66.6 million (as CCB) on November 4, 2013

with maturity on 15 January 2015. The interest will be paid monthly at the cost of

100% of CDI plus 3.25% p.a. until June 14, 2014, 3,75% p.a. until September 14,

2014 and 4,25% p.a. until the date of maturity of the CCB. The principal will be

paid in full at maturity.

Porto do Pecém Geração de Energia S.A. (Pecém I)

(gg) By the end of June 30, 2013, BNDES had released an amount of R$1.40 billion of

the long-term financing for Pecém I. The BNDES financing agreement is for a total

amount of R$1.41 billion (in nominal R$, excluding interest during the construction

phase), for a total period of 17 years, with amortization over 14 years and no

payments of capital or interest until July 2012. The agreed annual cost is TJLP +

2.77%. Interest is to be capitalized during the construction phase. The balances

of principal and interest shown in the above table correspond to 50% of the

original balances, taking into account the 50% share in the company held by EDP

Energias do Brasil S.A. This funding has the traditional package guarantee

transactions in the form of Project Finance.

(hh) (aa) To supplement the direct BNDES loan, Porto do Pecém Geração de Energia

S.A. has raised a direct loan from the Banco Interamericano de Desenvolvimento

(BID) (“A Loan”), amounting to US$147 million. The total disbursed so far is

US$143.78 million (the equivalent of R$316,284 as of December 31, 2012). The

cost of the “A Loan” is LIBOR + 3.5% for a total period of 17 years, with

amortization over 14 years and no repayments of principal until July 2012. The

balances of principal and interest shown in the above table correspond to 50% of

the original balances, taking into account the 50% share in the company held by

EDP Energias do Brasil S.A.

17

(ii) To supplement the direct BNDES loan, Porto do Pecém Geração de Energia S.A.

has raised an indirect loan from the BID (“B Loan”), amounting to US$180 million.

The total disbursed so far is US$176 million (the equivalent of R$369,012 as of

December 31, 2012). The onlending banks are the Banco Comercial Português

Group, Calyon and Caixa Geral de Depósito. The cost of the “B Loan” is LIBOR +

3% for a total period of 13 years, including 10 years of amortization and no

repayments of principal until July 2012. The balances of principal and interest

shown in the above table correspond to 50% of the original balances, taking into

account the 50% share in the company held by EDP Energias do Brasil S.A.

MPX Chile Holding Ltda. (MPX Chile)

(jj) MPX Chile Holding Ltda. entered into a foreign currency loan agreement with Banco

Credit Suisse Bahamas on April 13, 2011, with the guarantee of the parent

company. The loan was raised in US Dollars for a total of US$15 million (the

equivalent of R$21,038 as of December 31, 2012), at a fixed annual interest rate

of 8.13%. Capital and interest are to be paid half-yearly, with no capital payments

until April 15, 2013, and the loan maturing on April 15, 2015. The balances of

principal and interest shown in the above table correspond to 50% of the original

balances.

(kk) MPX Chile Holding Ltda. entered into a foreign currency loan agreement with Banco

Credit Suisse Bahamas on June 29, 2011, with the guarantee of the parent

company. The loan was raised in US Dollars for a total of US$10 million (the

equivalent of R$20,815 as of December 31, 2012), at a fixed annual interest rate

of 8%. Capital and interest are to be paid half-yearly, with no capital payments

until April 15, 2013, and the loan matures on April 15, 2015. The balances of

principal and interest shown in the above table correspond to 50% of the original

balances.

Parnaíba IV Geração de Energia S.A. (Parnaíba IV)

(ll) On April 29, 2013, the Parnaíba IV Project raised R$70 million in a CCB contract

(Bank Credit Note) with Banco BTG Pactual. This bridge loan is to finance the

deployment of natural gas thermal project signed with Kinross Brasil Mineração

S.A. Interest is 100% of the CDI rate plus 2,28% p.a., with capital and interest

being paid in full when the loan matures on September 29, 2014.

Parnaíba III Geração de Energia S.A. (Parnaíba III)

(mm) The Parnaíba III Project received on November 25, 2013 from Banco

Bradesco a bridge loan in the amount of US$ 120 million with an initial maturity

scheduled for January 9, 2014. On this date a new maturity was rescheduled for

January 31, 2014. The cost of the bridge loan corresponds to CDI plus 2.53% per

annum. The principal and interest shall be paid at the end of the operation.

In addition to the above mentioned financing, as from July 2012, the Company disbursed

R$500 million as a result of loan agreements subordinated to transactions with IDB, BNDES

and BNB, of which R$150 million to Porto do Pecém Geração de Energia S.A. and R$350

million to UET Porto do Itaqui Geração de Energia S.A.

In October and December 2012, the Company entered into two loan agreements, in each of

which the Company undertook to make R$667 thousand available to Pecém Operação e

Manutenção de Unidades de Geração Elétrica S.A., at an annual cost of 110% of the CDI,

with maturities currently fixed for September 30 and December 31, 2013, respectively.

Management of the Company states that the total amount of debt of any nature, which as

defined in Circular Letter CVM/SEP/No. 01/2013 is the aggregate total of the Company’s

consolidated Current and Non-Current Liabilities, is not contractually subordinated, except

for the legal subordination arising from the collateral given by the Company to its financial

creditors.

18

As of March 31, 2013, the Company’s total consolidated debt of any nature was R$6,077.4

million. R$3,961.8 million of this was collateralized, with preference, in the case of

collective insolvency proceedings, over the unsecured creditors of the Company, which at

the same date amounted to R$2,115.9 million.

As of December 31, 2012, of the Company’s total consolidated debt of any nature,

amounting to R$6,746.6 million, R$3,898.3 million was collateralized, with preference, in

the case of collective insolvency proceedings, over the unsecured creditors of the Company,

which at the same date amounted to R$2,848.4 million.

The table below shows the financial debt and the non-financial debt and the Company’s

total indebtedness for the periods indicated:

(in thousands of R$) 03/31/2013 12/31/2012

Financial Debt 5,459,825 6,067,349

Non-financial Debt 617,949 679,256

Total Indebtedness 6,077,774 6,746,605

For more information on the Company’s indebtedness, see item 3.7 of this Reference Form.

(ii) Other long-term relationships with financial institutions

Our Company and its subsidiaries have no long-term relationships with financial

institutions, other than those already described in item 10.1(f)(i) of this Reference Form.

(iii) Degree of subordination between debts

The long-term financing agreements entered into by our Company’s subsidiaries and

described above are for the most part structured as Project Finance and are collateralized.

The undertakings that have been financed are subject to the usual market obligations not

to issue guarantees of any kind for transactions with other creditors, without the same

guarantees being offers to the lenders, except with the prior express authorization of the

latter, other than encumbrances allowed in terms of the corresponding agreements.

Furthermore, the financing agreements entered into by one undertaking are in no way

subordinated to debts contracted in respect of the other undertakings.

(iv) Any restrictions imposed on the Company, in particular regarding

borrowing limits and the raising of new debt, dividend distribution, asset disposal,

the issue of new securities or the transfer of control of the Company

As a way of monitoring the financial condition of the Company and its subsidiaries by

lenders involved in financial contracts, some of them include specific financial covenants

clauses.

The financing agreements for the projects Porto do Pecém Geração de Energia S.A., Pecém

II Geração de Energia S.A., Itaqui Geração de Energia S.A. e Parnaíba Geração de Energia

S.A. contain specifications indexes (coverage ratio of debt service - operating cash flow

divided by the annual debt service) minimum intended to measure the ability to pay

interest expense to EBITDA ("earnings before interest, taxes, depreciation and

amortization").

On December 31, 2013 all financial covenants under the contracts were met.

Some financing agreements also contain clauses with non-financial covenants, usual

market and summarized below, which in December 31, 2013 are fully met.

i. Obligation to submit periodic financial statements to lenders;

19

ii. Right of creditors to undertake inspections and visits their premises;

iii. Obligation to keep up to date with respect to tax, labor and social security

obligations;

iv. Obligation to maintain existing material contracts for its operations;

v. Comply with environmental legislation and maintain the necessary licenses for their

operations;

vi. Contractual restrictions on related party transactions and dispositions of assets

outside the ordinary course of business, i.e., any related transaction or disposition of

assets that are proven to provide significant change in the economic capacity of the

Company's shares;

vii. Restrictions on the direct or indirect change of control in the control group and the

Company's material change in the corporate purpose and the incorporation of

debtors, since not approved by creditors; and

viii. Hiring of additional debt on projects with project finance and guarantees share since

not approved by the creditors of the respective projects.

No cases of non-compliance with financial covenants clauses were identified and

nonfinancial until December 31, 2013.

(g) Limits on use of financing previously contracted

The table below shows the financing contracted by the Company and its subsidiaries, as

well as the total disbursed as of December 31, 2013:

R$ million Disbursed % Disbursed Total

Pecém I 1,958 99.1% 1,976

Itaqui 1,239 99.9% 1,241

Pecém II 975 98.8% 987

Parnaíba I 700 78.9% 888

Total 4,872 95.6% 5,092

Disbursed amounts as of December 31, 2013

Porto do Pecém Geração de Energia S.A (Pecém I)

The company has a Financing Agreement upon Opening of Credit entered into with BNDES,

which provides for financing of R$1.4 billion (in nominal R$, excluding interest during the

construction phase), divided into sub-loans A, B, C and D, for a total period of 17 years,

with amortization over 14 years and no payments of capital or interest until July 2012. The

agreed annual cost is TJLP + 2.77%. Interest is to be capitalized during the construction

phase. As of December 31, 2013, a total of R$1.393 billion had been disbursed. The

undertaking also has a financing agreement with the Inter-American Development Bank

(“IBD”), providing for an A Loan for a total of USD147 million and a B Loan for a total of

USD180 million. The “A Loan” is for a total period of 17 years, with amortization over 14

years and no repayments of principal until July 2012. As of December 31, 2013, US$117

million had been disbursed on October 30, 2009, US$22.68 million on September 2, 2010

and US$4.05 million on February 2, 2011, at an annual cost of LIBOR + 3.5%. The “B

Loan” is for a total period of 13 years, including 10 years of amortization and no

20

repayments of principal until July 2012. As of December 31, 2013, US$143 million had

been disbursed on October 30, 2009, US$27.72 million on September 2, 2010 and US$4.95

million on February 2, 2011, at an annual cost of LIBOR + 3%.

Porto do Itaqui Geração de Energia S.A. (Itaqui)

The company has a Financing Agreement upon Opening of Direct Credit entered into with

BNDES, which provides for a loan of R$797 million. The agreed annual cost is TJLP +

2.78%, with part of the line being for social investments (BNDES Social) for an amount of

R$10 million and paying the TJLP rate only. The “BNDES Social” line is for a total period of

9 years, including 6 years of amortization and no repayments of principal until July 2012.

The financing period for the remaining amount is 17 years, with amortization over 14 years

and no capital repayments until July 2012. Interest on these loans is to be capitalized

during the construction phase. As of December 31, 2013, a total of R$795 million had been

disbursed. As a supplement to the direct BNDES line of credit, the Porto do Itaqui

thermoelectric plant has an indirect line of BNDES credit on-lent by Banco Bradesco S/A

and Banco Votorantim S/A, for a total of R$241 million. This portion of the loan is for a

total period of 17 years, with amortization over 14 years and no payments of capital or

interest until July 2012. The agreed annual cost for sub-loans A, B, C, D and E is IPCA +

Reference Rate + 4.80% during the construction phase and UMIPCA + Reference Rate +

5.30% when the plant is in operation. The agreed annual cost for sub-loan F is IPCA +

4.80% during the construction phase and IPCA + 5.30% during the operational phase.

Interest on these loans is to be capitalized during the construction phase. As of December

31, 2013, the totality of the loan had been disbursed. In addition to the direct and indirect

BNDES financing, the Porto do Itaqui Geração de Energia S.A. thermoelectric plant has a

loan from BNB-FNE, for a total amount of R$203 million. The BNB loan is for a total period

of 17 years, with amortization over 14 years and no repayments of principal until July

2012. The annual cost is 10%. The conditions of the financing include a 15% compliance

bonus, thus reducing the cost to 8.5% p.a. As of December 31, 2013, a total of R$203

million had been disbursed.

Pecém II Geração de Energia SA (Pecém II)

The company has a long-term Financing Agreement upon Opening of Credit entered into

with BNDES, which provides for a loan totaling R$737.39 million (in nominal R$, excluding

interest during the construction phase), divided into sub-loans A, B, C, D, E, F, G, H, I, J

and L. These sub-loans, amounting to an aggregate amount of R$627.2 million, are for a

total period of 17 years, with amortization over 14 years and no payments of capital or

interest until July 2013. The agreed annual cost is TJLP + 2.18%. Part of the line, the

equivalent of R$2 million, is for social investments (BNDES Social) and pays the TJLP rate

only. The “BNDES Social” line is for a total period of 9 years, with amortization over 6

years and no repayments until July 2013. These sub-loans, amounting to an aggregate

amount of R$110.1 million, are for a total period of 17 years, with amortization over 14

years and no payments of capital or interest until June 2014. The annual cost agreed is

IPCA + TR BNDES + 2.18%. As of December 31, 2013, a total of R$725 million had been

disbursed. As a supplement to the BNDES financing, MPX Pecém II Geração de Energia

S.A. has raised a loan from BNB with FNE funds, for a total amount of R$250 million (in

nominal R$), for a period of 17 years with quarterly interest payments and amortization

over 14 years. No payments of principal will be made until February 2014, and the annual

cost is 10%. The conditions of the financing include a 15% compliance bonus, thus

reducing the cost to 8.5% p.a. As of December 31, 2013, the loan totaling R$250 million

had been disbursed.

UTE Parnaíba Geração de Energia S.A. (Parnaíba I)

This plant has funds arising from Bank Credit Notes issued to Banco Itaú BBA, Banco

Bradesco and Banco Santander, in the amounts of R$125.0 million, R$150.0 million and

R$150.0 million respectively. The cost of such bills corresponds to 100% of CDI plus 3.0%

21

per year, with maturity on June 26, 2013. These amounts were partially settled by the

release of funds of the long-term Financing Agreement entered into with BNDES. Only the

CCB of R$150 million issued to Banco Santander was fully settled.

The Parnaíba Geração de Energia S.A. thermoelectric plant has a long-term Financing

Agreement through Opening of Credit with BNDES, signed on December 18, 2012, in the

amount of R$887,516 million, subdivided into sub-loans A, B, C and D.

The Parnaíba Geração de Energia S.A. thermoelectric plant was released R$495.6 million of

the R$671 million provided under sub-loans B and C of the long-term financing agreement

entered with BNDES. These sub-loans will be amortized in 168 monthly installments,

together with interest, starting on July 15, 2013. The agreed cost is TJLP + 1.88% p.a.

This financing also includes sub-loan D, directed toward social investments (BNDES Social)

in the amount of R$12.2 million, which has not yet been disbursed and is only subject to

TJLP cost. Additionally, Parnaíba Geração de Energia S.A. thermoelectric plant was released

R$204.3 million of the total sub-loan A of the aforesaid long-term financing agreement

entered with BNDES. This sub-loan will be repaid in 13 monthly installments, the first

installment being due, together with interest, on July 15, 2014. The annual cost agreed is

IPCA + TR BNDES + 1.88%.

The total amount of R$700 million disbursed in December 2012 for the long-term financing

agreement entered into with BNDES, with respect to Sub-loans A, B and C, was used to

settle: (i) the entire short-term financing granted by BNDES of R$400 million; (ii) the entire

CCB of R$150 million issued to Banco Santander; (iii) R$90 million of the total R$150

million of CCBs issued to Banco Bradesco; and (iv) R$60 million of the total R$125 million

of the CCB issued to Banco Itaú BBA. Funds from the balance to be disbursed by BNDES

will be used to settle the amount of the current short-term debt.

To guarantee the financing granted through sub-loans A, B and C, bank guarantees were

issued in the total amount of R$700 million, of which R$310 million were disbursed by

Banco Itaú BBA S/A, R$240 million were disbursed by Banco Bradesco S/A and R$150

million were disbursed by Banco Santander (Brasil) S/A.

(h) Significant changes in financial statements items:

The following information expresses the opinions of our Management.

Our summary financial statements for the years ended December 31, 2012, 2011 and

2010, were extracted from our consolidated financial statements, which were prepared

under the responsibility of our management and according to the IFRS and the accounting

practices adopted in Brazil, both in force on December 31, 2012.

The Company’s Management understands that the Company adopted all rules, revisions of

rules and interpretations issued by IASB and then in effect, and applicable to the financial

statements as of December 31, 2013, 2012 and 2011.

The consolidated financial statements included the financial statements of our Company

and of the business in which the Company has share control, directly or indirectly, and

whose fiscal years coincide with ours and whose accounting practices are uniform.

As from January 1, 2013, the Company adopted IFRS 10 and IFRS 11, whose accounting

policy is as follows:

IFRS 10 establishes one single model that is applicable to all entities, including

special purpose entities. The changes introduced by IRFS 10 required significant

judgment from Management to determine which entities are controlled, and, thus,

which entities must be consolidated by a parent company, compared to the

requirements provided for in IAS 27.

IFRS 11 eliminated the option to record joint ventures (ECC) based on proportional

consolidation. In turn, ECCs that may correspond to the definition of “joint venture”

were recorded based on equity pick-up.

22

The adoption of IFRS 10 and IFRS 11 was made retroactively regarding the quarterly

financial statements for the period ended December 31, 2012.

In compliance with IFRS 11, the investments made in the joint ventures: Porto do Pecém

Geração de Energia S.A., Porto do Pecém Transportadora de Minérios S.A., OGMP

Transporte Aéreo Ltda., Pecém Operação e Manutenção de Unidades de Geração S.A.,

MABE Construção e Administração de Projetos Ltda., MPX Chile Holding Ltda., Seival

Participações S.A., UTE MPX Sul Energia Ltda., Parnaíba Participações S.A., UTE Porto do

Açú Energia S.A., Porto do Açú II Energia S.A. and MPX E.ON Participações S.A. were

assessed at the equity method in the individual and consolidated quarterly statements for

the three-months ended March 31, 2013 and 2012.

Comparison of our consolidated income in the three-month periods ended March

31, 2013 and March 31, 2012.

The statements of income for the three month-period ended March 31, 2013 and 2012

consider the accounting practices adopted as from January 1, 2013, which were adjusted

retroactively in the statement of income of the three-month period ended December 31,

2012.

(In thousands of Reais) Consolidated

2013

AV 2012 AV Var13/12

(Presenting again)

Revenue of goods and/or services sold 1,438,831

100%

48,786

100%

2849%

Cost of goods and/or services sold (1,507,047)

-105%

(50,949)

-104%

2858%

Gross result (68,216)

-5%

(2,163)

-4%

3054%

Operating revenue/expenses (358,957)

-25%

(404,708)

-830%

-11%

General and administrative (167,261)

-12%

(231,026)

-474%

-28%

Personnel and administrators (79,762)

-6%

(111,440)

-228%

-28%

Other expenses (12,323)

-1%

(12,411)

-25%

-1%

Third Party Services (64,803)

-5%

(92,139)

-189%

-30%

Depreciation and Amortization (3,125)

0%

(2,788)

-6%

12%

Leasing and rents (7,248)

-1%

(12,248)

-25%

-41%

0%

0%

0%

Other operational revenues 4,424

0%

1,208

2%

266%

Other operational expenses (43,108)

-3%

(16,787)

-34%

157%

Unsecured Liabilities (7,717)

-1%

(14,671)

-30%

-47%

Losses on disposal of assets (7,231)

-1%

(879)

-2%

723%

Provision for loss on investment (23)

0%

(1,237)

-3%

-98%

Loss for the period BCC (24,617)

-2%

-

0%

0%

Others (3,520)

0%

-

0%

0%

Equity income (153,012)

-11%

(158,103)

-324%

-3%

0%

0%

0%

Income before net financial revenues (expenses) and taxes (427,173)

-30%

(406,871)

-834%

5%

0%

0%

0%

Financial result (506,096)

-35%

(90,459)

-185%

459%

Financial revenues 88,513

6%

(249,822)

-512%

-135%

Positive Exchange Rate 15,346

1%

25,086

51%

-39%

Debenture Fair Value (479)

0%

62,482

128%

-101%

Financial Application 63,707

4%

76,599

157%

-17%

23

Derivatives 2,728

0%

(422,684)

-866%

-101%

Other financial revenues 7,211

1%

8,695

18%

-17%

Financial expenses (594,609)

-41%

159,363

327%

-473%

Negative Exchange Rate (33,745)

-2%

(16,479)

-34%

105%

Derivatives (3,339)

0%

398,638

817%

-101%

Debenture interest rate/costs (786)

0%

(130,863)

-268%

-99%

Debenture Fair Value -

0%

-

0%

0%

Debt Charges (364,832)

-25%

(47,248)

-97%

672%

Financial Consultancy (123,093) -9% - 0% 0%

Other financial expenses (68,814)

-5%

(44,685)

-92%

54%

0%

0%

0%

Results before income taxes (933,269)

-65%

(497,330)

-1019%

88%

0%

0%

0%

Income tax and social contribution - current (11,152)

-1%

62,876

129%

-118%

Current (3,744)

0%

(1,921)

-4%

95%

Deferred (7,408)

-1%

64,797

133%

-111%

0%

0%

0%

Net Profit of Fiscal Year (944,421)

-66%

(434,454)

-891%

117%

-

0%

-

0%

0%

Loss of Fiscal Year (944,421)

-66%

(434,454)

-891%

117%

-

0%

-

0%

0%

Attributable to controlling shareholders (942,455)

-66%

(435,202)

-892%

117%

Interest of Non-controlling shareholders (1,966)

0%

748

2%

-363%

Net Operational Revenue

The Company’s net operating revenues went from R$48.7 million in the period ended

December 31, 2012 to R$1,438.8 million in the period ended December 31, 2013,

representing an increase of 2,849%. The Company’s Management believes that this

variation was primarily due to the fact that Parnaíba I and Itaqui thermoelectric plants’

projects intensified their business operations in the first quarter of 2013, which increased

the sales of energy of the Company and its subsidiaries by 158% against the same period

in the year 2012. Consolidated net revenues consists principally of revenue from Energy

Trading Contracts in the Regulated Environment (CCEAR) Itaqui, Pecém I and II and

Parnaíba by an independent producer contract on the open market Parnaíba II.

Itaqui: Net revenue impacted by the revision of the criteria to be applied for

compensation in case of delay in the commencement of commercial operation of the

plant, approved by ANEEL in December 2013. Previously, the criteria for reimbursement

provided that the reimbursement was based on the plant’s cost-benefit index (ICB),

i.e., the estimated cost of the plant to the National Integrated System (SIN) at the time

of the auction in which the plant sold energy. The new methodology determines the

criteria for reimbursement is based on the cost effective index ("online") from the plant

to the SIN (ICB Online), if it were available. The decision was retroactive to the

commencement date of CCEAR on December 20, 2012, resulting in an additional

revenue of R$ 17.2 million during 4Q13.

Pecém II: The plant received approval to begin commercial operation on October 18,

2013. Net revenue in 4Q13, totaling R$ 146.6 million was positively impacted by the

adoption of the new criteria for reimbursement ICB Online (US$ 6.1 million) and the

injunction granted Pecém II the right to receive a fixed income from September 2013

until the date of commencement of commercial operations (US$ 31 million). In August

2013, the board of ANEEL determined the postponement of the start of the Trading

24

Agreements in the Regulated Electricity (CCEARs) of Pecém II until the beginning of

commercial operation of the substation and transmission line, which took place in

October. As the plant was ready for operation on July 1, 2013, the Company filed an

injunction against Aneel, requesting that the fixed charges were paid starting from July.

In September, an injunction from the Federal Court ruled that Pecém II had the right to

receive fixed income from the date of the injunction until the date of commercial

operation. The company is awaiting a court decision on their right to receive fixed

income for the months of July and August 2013, worth R$ 48 million.

Parnaíba I: The plant received approval to begin commercial operation in partially

February 1, 2013 (1 turbine) and totally on February 17, 2013 (2nd turbine). Net

revenue in 4Q13, totaling R$ 239 million.

Parnaíba II: Net revenue totaled R$ 9.1 million related to a contract on the open

market for November and December 2013.

Cost of goods and/or services sold

The cost of goods and/or services sold went from R$50.9 million in the period ended

December 31, 2012 to R$1,507 million in the period ended December 31, 2013,

representing an increase of 2.858%. The Company’s Management believes that this

variation was basically due to the following reasons:

Electrical energy purchased for resale

In the period ended on December 31, 2013, we recorded an increase in the purchase of

electrical energy for resale by the subsidiaries Itaqui, Pecém II and Parnaíba II, which

represented an increase of R$252,7 million in the cost of goods and/or services sold. The

increase in the purchase of electrical energy is due to the fulfillment of the obligations of

energy supply that the Company and its subsidiaries have vis-à-vis regulatory bodies in the

scope of CCEAR contracts, which require that the Company and its subsidiaries supply

electrical energy in a given period through its Itaqui, Pecém II and Parnaíba II

undertakings. Due to the delay in starting the power generation operations of such

undertakings, the Company was forced to purchase electrical energy on the market to

honor its electrical energy supply commitments.

Fuel for generation of electrical energy

In the period ended on December 31, 2013, we recorded an increase in the consumption of

coal and natural gas by the aforesaid subsidiaries amounting to R$556.2 million in which

increased the cost of goods and/or services sold against the same period of 2012.

Gross loss

The Company’s gross loss went up from R$2.2 million in the period ended on December 31,

2012 to R$68.2 million in the period ended on December 31, 2013, representing an

increase of 3054%. Management understands this increase occurred mainly as a result of

the factors described above.

Operating revenues (expenses)

General and administrative expenses

General and administrative expenses went from R$231 million in the period ended on

December 31, 2012 to R$167 million in the period ended on December 31, 2013,

representing a decrease by 28%. The Company’s Management believes that this

reduction was mainly due to the reduction of stock options expenses that resulted,

mainly, from the shorter number of open options and the decrease of stock prices

compared to 2012, smaller provision of bonus compared to the period in 2012, average

wage increase of 8% after the completion of the annual collective negotiation process

and labor costs related to dismissals.

25

Equity Pick-up

Equity pick-up went from an expense of R$158 million in the period ended on

December 31, 2012 to an expense of R$153 million in the period ended on December

31, 2013, which represents a decrease of 3%.

Net Financial Result

Net financial result went from R$90.5 million in expenses in the period ended on

December 31, 2012 to R$506.1 million in expenses in the period ended on December

31, 2013, representing an increase of 460%. The increase was affected, mainly, by the

growth of expenses with debt service charges in the Parent Company, Itaqui, Pecém II

and Parnaíba II. With the end of the grace periods of long term financings in Itaqui,

Pecém II and Parnaíba II, the debt interests, which so far were mostly capitalized,

started to cause an impact in the results. The growth of charges in the Parent Company

is justified by the debt increase due to the contribution need in the subsidiaries to buy

energy facing the delay to begin the commercial operation in the plants and to cover

unavailability costs.

The net financial result was also affected by the increase in other financial expenses,

arising from taxes on financial operations and structuring charges related to the

holding’s debt refinancing, completed on December, 2013.

Income tax and social contribution – deferred

The amounts regarding income tax and social contribution went from R$64.8 million of

revenue in the period ended on December 31, 2012 to R$7.4 million in the period ended on

December 31, 2013, representing a decrease of 111%. The Company’s Management

believes that this variation was mainly due to a decrease in the Parent Company’s deferred

taxes amounting to R$114 million.

Loss for the year

The Company’s loss for the year rose from R$435.2 million in the period ended on

December 31, 2012, to R$942.5 million in the period ended on December 31, 2013, an

increase of 117%. The Company Management is of the opinion that this increase was due

largely to the factors mentioned above.

Comparison of our consolidated income in the financial years ended December 31,

2012 and December 31, 2011.

The statements of income for the financial years ended December 31, 2012 and 2011,

presented below, were prepared and are presented in accordance with the accounting

practices in force on December 31, 2013. The variations in the 2012 and 2011 financial

statements, both represented, are explained below. However, with the application of the

IFRS 11, starting January 1st 2013, the investiments in the subsidiaries together with Porto

do Pecém Geração de Energia S.A., Porto do Pecém Transportadora de Minérios S.A., OGMP



Participações S.A., Sul Geração de Energia Ltda., Parnaíba Participações S.A., UTE Porto do

Açú Energia S.A., Açú II Geração de Energia S.A. and Eneva E.ON Participações S.A. are

evaluated by equity pick-up in individual and consolidated financial statements. Previously,

these investments were consolidated proportionally.

2012 AV 2011 AV Var12/11

(Resubmitted)

(Resubmitted)

Revenues for assets and/or services sale

48.786

100%

167.873

100%

-71%


(50.949)

-104%

(162.214)

-97%

-69%

26

Gross balance

(2.163)

-4%

5.659

3%

-138%

Operating expenses/revenues

(404.708)

-830%

(371.999)

-222%

9%

General and Administrative

(231.026)

-474%

(270.414)

-161%

-15%

Staff and Managers

(111.440)

-228%

(146.349)

-87%

-24%

Other expenses

(12.411)

-25%

(16.751)

-10%

-26%

Third-party expenses

(92.139)

-189%

(90.323)

-54%

2%

Depreciation and Amortization

(2.788)

-6%

(3.289)

-2%

-15%

Leases and Rents

(12.248)

-25%

(13.703)

-8%

-11%

0%

0%

0%

Other operational revenues

1.208

2%

1.128

1%

7%

Other operational expenses

(16.787)

-34%

(37.060)

-22%

-55%

Unsecured obligations

(14.671)

-30%

-

0%

0%

Losses in disposal of assets

(879)

-2%

(120)

0%

631%

Provision for loss in Investment

(1.237)

-3%

(36.940)

-22%

-97%

Decreas in CCC Benefit

-

0%

-

0%

0%

Others

-

0%

0%

0%

Equity pick-up balance

(158.103)

-324%

(65.653)

-39%

141%

0%

0%

0%

Result before the financial result and tax rates on profit

(406.871)

-834%

(366.340)

-218%

11%

0%

0%

0%

Financial Result

(90.459)

-185%

(154.808)

-92%

-42%

Financial Revenues

(249.822)

-512%

441.799

263%

-157%

Positive Exchange Variation

25.086

51%

5.401

3%

364%

Debenture Fair Value

62.482

128%

-

0%

Aplicação Financeira

76.599

157%

97.305

58%

-21%

Derivative financial instruments

(422.684)

-866%

333.098

198%

-227%

Other financial revenues

8.695

18%

5.995

4%

45%

Financial Expenses

159.363

327%

(596.607)

-355%

-127%

Negative Exchange Variation

(16.479)

-34%

(17.376)

-10%

-5%


398.638

817%

(383.611)

-229%

-204%

Debenture Interests/Costs

(130.863)

-268%

(53.875)

-32%

143%

Debenture Fair Value

-

0%

(62.003)

-37%

-100%

Debt Charges

(47.248)

-97%

(3.865)

-2%

1123%

Other financial expenses

(44.685)

-92%

(75.878)

-45%

-41%

0%

0%

0%

Result before the tax rates on profit

(497.330)

-1019%

(521.148)

-310%

-5%

0%

0%

0%

Income Tax and Social Contribution on Profit

62.876

129%

119.286

71%

-47%

Current

(1.921)

-4%

(4.867)

-3%

-61%

Deferred

64.797

133%

124.152

74%

-48%

0%

0%

0%

Year Net Profit

(434.454)

-891%

(401.862)

-239%

8%

-

0%

-

0%

0%

Year Losses

(434.454)

-891%

(401.862)

-239%

8%

-

0%

-

0%

0%

27

Assigned to controlling stockholders

(435.202)

-892%

(408.553)

-243%

7%

Assigned to non-controlling stockholders

748

2%

6.691

4%

-89%

Net operating revenues

The Company’s net operating revenues increased from R$167.8 million in the fiscal year

ended December 31, 2011 to R$48.8 million in the fiscal year ended December 31, 2012,

representing a decrease of 71%. The Company’s Management believes that this variation

was mainly in order to meet IFRS 11 the investments in subsidiraries together with Porto

do Pecém Geração de Energia S.A, Proto do Pecém Transportadora de Minérios S.A., OGMP


MABE Construção e Holding Ltda., Seival Participações S.A., Sul Geração de Energia Ltda.,

Parnaíba Participações S.A., UTE Porto do Açú Energia S.A., Açú II Geração de Energia

S.A., and Eneva Participações S.A., that starting on January 1st 2013, will be evaluated by

equity pick-up in individual and consolidates financial statements. Previously, these

investments were consolidated proportionally.


The cost of goods and/or services sold increased from R$162.2 million in the fiscal year

ended December 31, 2011 to R$50.9 million in the fiscal year ended December 31, 2012,

representing a decrease of 69%. The increase in the purchase of electrical energy is due to

the fulfillment of the obligations of energy supply that the subsidiaries have vis-à-vis

regulatory bodies, under CCEAR agreements, which require the supply of electrical energy

in a given period through its Itaqui and Energia Pecém undertakings. Due to the delay in

starting the power generation operations of such undertakings, the Company was forced to

purchase electrical energy on the market to honor its electrical energy supply

commitments.

Gross Profit (Loss)

The gross profit (loss) of the Company went from gross profit of R$4.5 million for the year

ended December 31, 2011, to gross loss of R$106.6 million for the year ended December

31, 2012, a negative variation of R$111.1 million. Management considers that this decrease

occurred principally as a result of the factors described above.

Operating revenues (expenses)

Other operating expenses

Other operating expenses went from R$37.1 million in the fiscal year ended December

31, 2011 to R$2.2 million in the fiscal year ended December 31, 2012, representing an

decrease of 94%. Management considers that this variation occurred mainly in the light

of the reduction due to the spin-off of CCX and provision for investment loss in 2011.

Equity Pick-up

Equity pick-up went from an expense of R$27.7 million in the three-month period

ended March 31, 2011 to an expense of R$34.2 million in the three-month period

ended March 31, 2012, which represents an increase of 24%. Management

understands this increased occurred mainly due to the result recorded by the

subsidiary Parnaíba Gás Natural (formerly OGX Maranhão).

Net financial revenues (expenses)

Financial revenues

Financial revenues increased from R$106.3 million in the fiscal year ended December

28

31, 2011 to R$157.8 million in the fiscal year ended December 31, 2012, representing

an increase of 48%. Management considers that this occurred mainly in the light of the

portion of the gain on the fair value of debentures.

Financial expenses

Financial expenses increased from R$197.3 million in the fiscal year ended December

31, 2011 to R$232.0 million in the fiscal year ended December 31, 2012, representing

an increase of 18%. Management believes that this variation occurred basically due to

the payment of a premium on the early conversion of the debentures. This transaction

led to an expense of R$75 million being debited in the books.


The values of derivatives financial instruments went from an expense of R$62.2 million

in the fiscal year ended December 31, 2011 to an expense of R$37.7 million in the

fiscal year ended December 31, 2012, representing a decrease of 39%. Management

considers that this variation occurred mainly in the light of changes in mark to market

– MTM of derivatives.

Exchange variation, net

The amounts regarding net exchange variation went from an expense of R$49.1 million

in the fiscal year ended December 31, 2011 to an expense of R$15.5 million in the

fiscal year ended December 31, 2012, representing a decrease of 68%. Management

believes that this variation occurred mainly due to the effect of the transactions in

foreign currency of CCX. As a result of the partial spin-off of the Company with the

transfer of the shareholding then owned by the Company in MPX Áustria to CCX Carvão

da Colômbia, the Company failed to register in its income the operations of CCX,

protecting the Company against exchange variations of CCX’s operations.

Income tax and social contribution – deferred

The amounts regarding deferred income tax and social contribution went from R$142.5

million in the fiscal year ended December 31, 2011 to R$116.9 million in the fiscal year

ended December 31, 2012, representing a decrease of 18%. Management believes that this

variation occurred mainly due to the increase in tax debts arising from temporary

difference, mainly, revenues from exchange variation over loans.

Comparison of the Main Consolidated Balance Sheet Accounts in December 31,


The balance sheets consolidated on December 31, 2013 and December 31, 2012 consider

the accounting practices adopted as from January 1, 2013, which were adjusted

retroactively in the balance sheet consolidated on December 31, 2012 for comparability

purposes.

Consolidated Balance Sheets

Consolidated

(Resubmitted)

2013

AV

2012

AV

VAR13/12

Total Assets 9.689.212

100%

8.039.595

100%

21%

Cash and cash equivalents 277.582

3%

519.277

6%

-47%

Marketable Securities -

3.441

0%

-100%

29

Accounts receivable 294.396

3%

21.345

0%

1279%

Subsidies receivable – Fuel Consumption Account 30.802

0%

17.561

0%

75%

Inventories 78.376

1%

142.687

2%

-45%

Prepaid expenses 9.825

0%

19.351

0%

-49%

Recoverable taxes 47.651

0%

37.410

0%

27%

Gains on derivatives 4.171

0%

3.018

0%

38%

Miscellaneous advances 5.001

0%

1.783

0%

180%

Linked deposits 38

0%

35

0%

7%

Dividends receivable -

-

Other credits -

-

Current 747.842

8%

765.908

10%

-2%

Prepaid expenses 2.905

0%

8.494

0%

-66%

Linked deposits 118.606

1%

135.648

2%

-13%

Subsidies receivable – Fuel Consumption Account -

0%

24.617

0%

-100%

Recoverable taxes 14.614

0%

24.034

0%

-39%

Deferred Income Tax and Social Contribution 302.327

3%

305.548

4%

-1%

Loans with subsidiaries and grouped subsidiaries 191.968

2%

134.926

2%

42%

Accounts receivable with other linked persons 218.680

2%

1.134

0%

19176%

Accounts receivable with subsidiaries and grouped subsidiaries 117.372

1%

6.793

0%

1628%

Advance for Future Capital Increase with subsidiaries and group subsidiaries 150

0%

12.425

0%

-99%

Embedded derivatives 0

0%

479

0%

-100%

Other credits 60

0%

-

0%

0%

Non-current 966.682

10%

654.098

8%

48%

Investment 941.853

10%

833.955

10%

13%

Fixed Assets 6.819.454

70%

5.570.399

69%

22%

Intangble Assets 213.381

2%

215.236

3%

-1%

Consolidated

(Resubmitted)

2013

AV

2012

AV

VAR13/12

Total Obligations 9.689.212

100%

8.039.596

100%

21%

Suppliers 331.216

3%

115.261

1%

187%

Loans e financings 2.408.142

25%

1.819.974

23%

32%

Debits with subsidiaries -

0%

-

0%

0%

Debits with Parent Company -

0%

26.783

0%

-100%

30

Debits with other related parts -

0%

3.989

0%

-100%

Debentures 112

0%

111

0%

1%

Taxes and contributions payble 45.934

0%

7.241

0%

534%

Social and Labor Obligations 16.770

0%

9.863

0%

70%

Losses in opreations with derivatives -

0%

22.951

0%

-100%

Contractual reserve 84.789

1%

77.374

1%

10%

Profit sharing 8.148

0%

20.633

0%

-61%

Dividends payable -

0%

1.960

0%

-100%

Other liabilites 83.748

1%

3.325

0%

2419%

Current 2.978.859

31%

2.109.465

26%

41%

Loans e financings 3.802.378

39%

3.104.806

39%

22%

Debits with other related parts 307.720

3%

430

0%

71386%

Debentures 5.239

0%

4.954

0%

6%

Embedded derivatives -

0%

-

0%

0%

Losses in opreations with derivatives -

0%

94.797

1%

-100%

Provision for unsecured obligations 9.286

0%

19.840

0%

-53%

Deferred Income Tax and Social Contribution 9.591

0%

2.048

0%

368%

Provision for decomissioning 2.266

0%

2.118

0%

7%

Other provisions -

0%

-

0%

0%

Non-current 4.136.480

43%

3.228.993

40%

28%

Liquid Assets

Share Capital 4.532.313

47%

3.731.734

46%

21%

Capital reserve 350.514

4%

321.904

4%

9%

Equity valuation adjustments (53.284)

-1%

(119.067)

-1%

-55%

Accumulated losses (2.379.303)

-25%

(1.384.971)

-17%

72%

Liquid assets attributable to controlling stockholders 2.450.240

25%

2.549.600

32%

-4%

Participation of non-controlling stockholders 123.633

1%

151.538

2%

-18%

Total liquid asstes 2.573.873

27%

2.701.139

34%

-5%

Current assets

Our current assets went from R$765.9 million on December 31, 2012 to R$747.8 million on

December 31, 2013, representing a decrease of 2%. Management believes that this

increase was due mainly to the following reasons:

Cash and cash equivalents

Cash and cash equivalents went from R$519.3 million on December 31, 2012 to

R$277.6 million on December 31, 2013, representing a decrease of 31%. The

31

Company’s Management believes that this variation was mainly due to capital

expenditure (CAPEX), mainly in Parnaíba I TPP, Parnaíba II TTP and Porto do Itaqui,

which was partially offset by fundraising through long-term loans.

Accounts receivable

Accounts receivable went from R$21.3 million on December 31, 2012 to R$294 million

on December 31, 2013, representing an increase of 1279%. The Company’s

Management believes that this increase was mainly due to the fact that Parnaíba I,

Parnaíba II and Parnaíba III and Itaqui intensified their commercial operations, the

beginning of operations of Pecém II, resulting in an increase in energy sales of the

Company and its subsidiaries in relation to the same period in the year 2012.

Inventories

The value of inventories went from R$142.7 million on December 31, 2012 to R$78.4

million on December 31, 2013, representing a decrease of 45%. The Company’s

Management believes that this variation was mainly due to the use of coal in electricity

generation process, mainly by Porto de Itaqui plant.

Taxes recoverable

Accounts receivable went from R$37.4 million on December 31, 2012 to R$47.6 million

on December 31, 2013, representing an increase of 27%. The Company’s Management

believes that this variation was mainly due to an increase in deferred tax assets

relating to prepayment of income tax, social contribution, PIS and COFINS, mainly

relating to Porto de Itaqui project.

Non-current assets

Our non-current assets (non-current + investment + fixed + intangible) went from

R$7,237.7 million on December 31, 2012 to R$8.941,4 million on December 31, 2013,

representing an increase of 6%. Management believes that this variation was mainly due to

the following reasons:

Loans with affiliates

Loans with affiliates increased from R$134.9 million on December 31, 2012 to R$191.9

million on December 31, 2013, representing an increase of 17%. The Company’s

Management believes that such variation was mainly due the creation by the Company

and E.ON of the joint venture Eneva E.ON Participações S.A. in May 2012, the

Company ceased to consolidate, totally and proportionally, its equity interests in the

following companies: UTE Sul, Porto do Açú, MPX Chile, Porto do Açú II, Seival

Participações, MPX Comercializadora de Energia, Eneva Solar e Eneva Comercializadora

de Combustível, which were transferred to such joint venture. As a result of

adjustment to the rule mentioned above, the balances related to loans with subsidiaries

were not eliminated, as above mentioned.

Accounts Receivable from other linked persons

The values referring to accounts receivable went from R$1.1 million on December 31,

2012 to R$218.7 million on December 31, 2013, representing an increase of 19176%.

This variation was mainly due to the loan given to PGN (R$204 million) for payment of

financial costs.

Accounts receivable with subsidiaries and grouped subsidiaries

The values referring to accounts receivable went from R$6.8 million on December 31,


This variation was mainly due to the payment of coal from Pecém I.

32

Fixed Assets

The values referring to fixed assets went from R$5,570.4 million on December 31,

2012 to R$6,819.4 million on December 31, 2013, representing an increase of 22%.

The Company’s Management believes that this increase was mainly due to capital

expenditure (CAPEX) in the construction of Thermal Power Plants - TPP Parnaíba I,

Parnaíba II and Parnaíba III.

Current obligations

Our current obligations went from R$2,109.5 million on December 31, 2012 to R$978.8

million on December 31, 2013, representing an increase of 187%. Management believes

that this variation was mainly due to the following reasons:

Suppliers

The amounts regarding suppliers went from R$115.3 million on December 31, 2012 to

R$331.2 million on December 31, 2013, representing an increase of 187%.

Management believes that this increase was mainly due to expenses with suppliers

designated to capital expenditure (CAPEX) in the construction of TPPs, especially Porto

de Itaqui, Parnaíba I TPP and Parnaíba II TPP.

Loans and financing

The amounts regarding loans and financing went from R$1,820.0 million on December

31, 2012 to R$2,408 million on December 31, 2013, representing an increase of 32%.

Management believes that this increase was mainly due to an increase in short term

loans primarily taken by the Company.

Taxes and contributions payable

Tax and contributions payable increased from R$7.2 million on December 31, 2012 to

R$39.745.9 million on December 31, 2013, representing an increase of 534%. The

Company’ Management believes that such increase was mainly due to PIS and COFINS

incurred on revenues generated from Porto de Itaqui and Parnaíba I TPP.

Other obligations

The value referring to other obligations went from R$43.3 million on December 31,


Management believes that this increase was mainly due to unavailability costs arising

from Itaqui, Parnaíba I and Pecém II thermal plants shutdown.

Non-current Obligations

Our non-current obligations went from R$3,229.0 million on December 31, 2012 to

R$4,136.5 million on December 31, 2013, representing an increase of 1%. The Company

‘Management believes that such variation was due to the fact that debts with other related

parties increased from R$0.4 million on December 31, 2012 to R$4307.7 million on

December 31, 2013, representing an increase of 71386%. The Company’s Management

believes that this variation was mainly due to Itaqui’s energy purchase obligation to Eneva

Comercializadora de Energia.

Comparison of the Main Consolidated Balance Sheet Accounts in December 31,


The consolidated balance sheets as of December 31, 2012 and 2011 consider the

accounting practices implemented on January 1st, 2013 wich were retroactively adjusted in

the consolidated equity pick-up of December 31, 2012 for comparing.

33

Consolidated Balance Sheets

Consolidated

(Resubmitted)

(Resubmitted)

2012

AV

2011 AV

VAR12/11

Total Assets

8.039.595

100%

7.123.369 100%

13%


519.277

6%

1.380.151 19%

-62%

Securities

3.441

0%

9.437 0%

-64%

Accounts receivable

21.345

0%

21.480 0%

-1%

Grants receivable – CCC

17.561

0%

4.828 0%

264%

Inventories

142.687

2%

58.190 1%

145%

Prepaid expenses

19.351

0%

13.272 0%

46%

Taxes recoverable

37.410

0%

35.126 0%

7%

Derivative gains

3.018

0%

36.445 1%

-92%

Miscellaneous advances

1.783

0%

8.416 0%

-79%

Restricted deposits

35

0%

61.844 1%

-100%

Dividends receivable

-

- -

Other credits

-

38 0

-100%

Current

765.908

10%

1.629.227 23%

-53%

Prepaid expenses

8.494

0%

1.964 0%

333%

Restricted deposits

135.648

2%

54.148 1%

151%

Grants receivable – CCC

24.617

0%

24.617 0%

0%

Taxes recoverable

24.034

0%

82.689 1%

-71%

Deferred income tax and social contribution

305.548

4%

248.862 3%

23%

Loans with subsidiaries and grouped subsidiaries

134.926

2%

680 0%

19735%

Accounts receivable with other related persons

1.134

0%

8.436 0%

-87%

Accounts receivable with subsidiaries and grouped subsidiaries

6.793

0%

- 0%

0%

Advance for Future Capital Increase with subsidiaries and group

subsidiaries

12.425

0%

- 0%

0%

Embedded derivatives

479

0%

411.121 6%

-100%

Other credits

-

0%

- 0%

0%

Non-current

654.098

8%

832.515 12%

-21%

Investments

833.955

10%

431.695 6%

93%

Fixed

5.570.399

69%

3.962.979 56%

41%

Intangible

215.236

3%

266.954 4%

-19%

34

Consolidated

(Resubmitted)

(Resubmitted)

2012

AV

2011 AV

VAR12/11

Total Obligations

8.039.596

100%

7.123.369 100%

13%

Suppliers

115.261

1%

154.476 2%

-25%

Loans e financings

1.819.974

23%

994.608 14%

83%

Debits with subsidiaries

-

0%

- 0%

0%

Debits with Parent Company

26.783

0%

- 0%

0%

Debits with other related parts

3.989

0%

3.697 0%

8%

Debentures

111

0%

30.463 0%

-100%

Taxes and contributions payble

7.241

0%

17.939 0%

-60%

Social and Labor Obligations

9.863

0%

16.246 0%

-39%

Losses in opreations with derivatives

22.951

0%

27.580 0%

-17%

Contractual reserve

77.374

1%

127.965 2%

-40%

Profit sharing

20.633

0%

19.177 0%

8%

Dividends payable

1.960

0%

2.269 0%

-14%

Other liabilites

3.325

0%

48.603 1%

-93%

0%

Current

2.109.465

26%

1.443.021 20%

46%

Loans e financings

3.104.806

39%

2.326.101 33%

33%

Debits with other related parts

430

0%

- 0%

0%

Debentures

4.954

0%

1.403.152 20%

-100%


-

0%

62.003 1%

-100%

Losses in opreations with derivatives

94.797

1%

502.723 7%

-81%

Provision for unsecured obligations

19.840

0%

- 0%

0%

Deferred Income Tax and Social Contribution

2.048

0%

13.239 0%

-85%

Provision for decomissioning

2.118

0%

1.946 0%

9%

Other provisions

-

0%

1.026 0%

-100%

Non-current

3.228.993

40%

4.310.190 61%

-25%

Liquid Assets

Share Capital

3.731.734

46%

2.042.014 29%

83%

Capital reserve

321.904

4%

274.625 4%

17%

Equity valuation adjustments

(119.067)

-1%

(71.670) -1%

66%

Accumulated losses

(1.384.971)

-17%

(970.897) -14%

43%

Liquid assets attributable to controlling stockholders

2.549.600

32%

1.274.072 18%

100%

Participation of non-controlling stockholders

151.538

2%

96.086 1%

58%

35

Total liquid asstes

2.701.139

34%

1.370.158 19%

97%

Current assets

Current assets went from R$1,629.2 million on December 31, 2011 to R$765.9 million on

December 31, 2012, representing a decrease of 53%. Management believes that this

variation was primarily due to the following factors:


The amounts regarding cash and cash equivalents went from R$1,380.1 million on

December 31, 2011 to R$519.3 million on December 31, 2012, representing a

decrease of 62%. Management considers that this variation occurred mainly due to

expenses from CAPEX investments which were partially offset by funding, via

capitalization through the issue of common shares.

Inventories

Inventories increased from R$52.2 million on December 31, 2011 to R$142.7 million

on December 31, 2012, representing a decrease of 145%. Management believes

that this increase occurred, mainly due to the purchase of supplies for electricity

generation, especially coal.

Restricted deposits

Restricted deposits went from R$61.8 million on December 31, 2011, to R$0.35

million on December 31, 2012, representing a decrease of 100%. Management

believes that this decrease occurred mainly due to the release of deposits linked to

the BNDES loan after capital investments in Energia Pecém.

Non-current assets

Non-current assets (non-current + investment + fixed + intangible) increased from

R$5,494.1 million on December 31, 2011, to R$7.273,7 million on December 31, 2012,

representing an increase of 93%. Management believes that this increase was primarily due

to the following factors:

Restricted deposits

Restricted deposits increased from R$54.1 million on December 31, 2011, to

R$135.6 million on December 31, 2012, representing an increase of 151%.

Management believes that this increase occurred, mainly, (i) by the release of the

guarantees with Banco Bradesco to buy energy on the open market for Itaqui; and

(ii) by hiring new loan guarantees with Citibank by ENEVA .

Taxes recoverable

Taxes recoverable went from R$42.7 million on December 31, 2011, to R$24 million

on December 31, 2012, representing a decrease by 71%. Management considers

that this decrease occurred mainly due to the offset of tax credits regarding the

prepayment of income tax, social contribution and taxes withheld.

Income tax and social contribution - deferred

The amounts regarding deferred income tax and social contribution increased from

R$248.9 million on December 31, 2011, to R$305.5 million on December 31, 2012,

representing an increase of 23%. Management considers that this variation occurred

mainly due to the increase in tax credits (tax losses and temporary differences) on

investments in Pecém II and Itaqui.

36

Fixed Assets

The amount fixed assets increased from R$3,962.9 million on December 31, 2011,

to R$5,570.4 million on December 31, 2012, representing an increase of 41%.

Management believes that this variation occurred mainly due to CAPEX Investments

for construction of Thermal Power Plants (Usinas Termelétricas de Energia or UTEs).

Current obligations

Current obligations increased from R$1,443 million on December 31, 2011, to R$2,109.5

million on December 31, 2012, representing an increase of 46%. Management believes that

this variation was primarily due to the following factors:

Loans and financing

Loans and financing increased from R$994.6 million on December 31, 2011 to

R$1,819.9 million on December 31, 2012, representing an increase of 63%.

Management believes that this increase was mainly due to (i) the increase in short-

term loans taken by ENEVA ; and (ii) investments in Parnaíba I and UTE Parnaíba II.

Debentures

The amount of debentures went from R$30.5 million on in December 31, 2011, to

R$0.1 million on in December 31, 2012. Management believes that this decrease

was mainly due to the conversion of almost all the debentures issued into shares in

ENEVA .

Contractual reserve

Contractual reserves went from R$127.9 million on December 31, 2011, to R$77.3

million on December 31, 2012, representing a decrease of 40%. Management

considers that this variation was mainly due to the release of the contractual reserve

to MABE (EPC) by Itaqui.

Other obligations

The amounts referring to other obligations went from R$48.6 million on December

31, 2010, to R$3.3 million on December 31, 2011, representing a reduction of 93%.

Management considers that this variation was mainly due to the reduction in VAT

obligation as result of the spin-off of a portion of ENEVA ’s capital regarding the

investments made in MPX Colombia.

Non-current obligations

Non-current obligations went from R$4,310.2 million on December 31, 2011, to R$3,228.9

million on December 31, 2012, representing a decrease of 25%. Management believes that

this decrease was primarily due mainly to the following factors:

Loans and financing

Loans and financing increased from R$2,326.1 million on December 31, 2011, to

R$3,104.8 million on December 31, 2012, representing an increase of 33%.

Management believes that this increase was mainly due to the release of long-term

credit lines for Pecém II, by BNDES and BNB; and for Itaqui, by BNDES and BNB.

Debentures

The amount of debentures increased from R$1,403.1 million on in December 31,

2011, to R$5,0 million on in December 31, 2012. Management believes that this

variation was mainly due to the conversion of almost all the debentures issued into

37

shares in ENEVA .


The variation in embedded derivatives occurred due to the conversion of almost all

of the debentures into shares of ENEVA .

Shareholder’s equity

The amounts regarding consolidated shareholder’s equity went from R$1,370.1

million on December 31, 2011, to R$2,701.1 million on December 31, 2012,

representing an increase of 97%. Management believes that this increase was

mainly due to (i) the capital increase through issue of common shares; (ii) the

capital increase through the conversion of debentures; (iii) the reduction of capital

with the spin-off of MPX Colombia; and (iv) the loss recorded in the financial year

ended December 31, 2012.

38

10.2 – Management’s comments on operating and financial result

The financial information included in this Reference Form, except when stated otherwise,

refers to the Company’s consolidated financial statements.

(a) Company’s operating results

(i) Description of any relevant revenue components

The Company’s Management understands that the basis for its revenues and, consequently,

for its operations, in the years ended December 31, 2012 and 2011, refers to the gross

operating revenue from the sale of energy that totaled R$600.3 million, R$54.1 million and

R$189.9 million, respectively.

(ii) Factors that substantially affected the operating results

According to the Company’s Management, the facts that substantially affected their

operating results may be summarized as follows:

Year ended 2013: The Company assessed a loss of R$942.4 million. The primary factor

that substantially affected this result was that the Company and its subsidiaries received

proper authorizations from ANEEL to start electricity generation, but since the projects for

which such authorizations were granted were not completed, the Company and its

subsidiaries were required to purchase electricity from third parties to comply with their

energy supply agreements, resulting in a material loss.

Year ended 2012: The Company assessed a loss of R$434.5 million. The primary factors

that substantially affected this result are the following: (i) appropriation of interest incurred

and costs of bonds in the amount of R$130.9 million; (ii) negative result of R$37.7 million

from non-speculative derivatives operations; and (iii) impact on operating costs of coal

plants, due to change in the commencement of commercial operations.

Year ended 2011: The Company recorded a loss of R$408.5 million. The primary factors

that substantially affected this result are the following: (i) measurement of the fair value of

derivatives included in the issue of debentures of the Company made in June 2011,

resulting in a loss of R$62.0 million; (ii) appropriation of interest incurred on debentures in

the amount of R$50.8 million; and (iii) negative result of R$62.2 million from non-

speculative hedge transactions.

(b) Variations in revenues attributable to adjustments to prices, exchange

rates, inflation, changes in volumes and introduction of new products and services

The Company’s Management understands that the Company’s revenue is not directly

impacted by variations in prices, exchange rates and inflation and was not affected in the

last three years for changes in volumes and introduction of new products and services.

(c) Impact of inflation, variation in prices of the primary inputs and products,

exchange and interest rates in the Company’s operating and financial result

In the year ended December 31, 2013, 2012 and 2011, the consolidate net financial result

totaled expenses of R$506.1 million, R$90.5 million and R$154.8 million, respectively,

especially due to interest on loans and financings, the record of hedge positions and open

mark-to-market positions.

39

10.3 – Events with actual and expected relevant effects on the financial

statements

(a) Inclusion or disposal of operational segment

The Company Management makes its decisions based on four business segments, which ar

subject to risks and compensations managed by centralized decision, namely: energy

generation, energy commercialization, supplies and corporate.

As its enterprises progress, the Management intends to revalue possible business

segmentations to provide the market with real and qualitative information.

Operational Portfolio

ENEVA’s Operation Portfolio consists of the units Itaqui Geração de Energia S.A.,

Porto do Pecém Geração de Energia S.A., Pecém II Geração de Energia S.A.,

Parnaíba I Geração de Energia Ltda., Parnaíba III Geração de Energia S.A., Parnaíba

IV Geração de Energia S.A., Tauá Geração de Energia Ltda. and Amapari Energia

S.A.

Itaqui, a steamcoal termal plant, is located near Porto de Itaqui, in the State of

Maranhão, and its energy generation capacity is of 360 MW with an energy selling

contract signed from 2012.

The pulverized coal thermal plants Porto do Pecém Geração de Energia S.A., in

partnership with EDP – Energias do Brasil S.A. and Pecém II Geração de Energia

S.A. are located in the region of Porto do Pecém, in the State of Ceará, and have

energy generation capacities of 720 MW and 360 Mw, respectively.

Also in the region of Ceará, the solar energy generating company Tauá is located,

which has environmental licencing approved for a 5MW energy generation capacity,

with a 1MW unit already implemented and operating.

Amapari, Produtor Independente de Energia (PIE) in partnership with Eletronorte –

Centrais Elétricas do Norte do Brasil S.A., in the isolated system, has a

thermoelectric plant that generates energy from diesel, located in the Serra do Navio

Municipality, in the State of Amapá, with an installed capacity of 23 MW.

Complexo Parnaíba, a complex of thermal generation moved by natural gas is

strategically located in the PN-T-68 block of Parnaíba Basin, in the State of

Maranhão. The project consists of 4 (four) thermal plants, 3(three) of them already

operational and they all together will have capacity of 3,722 MW.

Greenfiel Projects

ENEVA’s Greenfield Projects consist of Proto do Açu Energia S.A., Açu III Geração de

Energia Ltda., Sul Geração de Energia S.A. and Seival Sul Mineração Ltda termal

plants.

Açu is a greenfield generation Project licensed in Brazil’s South-East region, with 5.4

GW. ENEVA has installation license, issued by the Instituto Estadual do ambiente do

Estado do Rio de Janeiro (INEA), for 2,100 MW, using imported mineral coal as fuel.

In addition, it has preliminar permit to build a natural gas termal plan with capacity

of 3,330 MW. Both projects are located near the Campos dos Goytacazes’s sub-

station and the Campos Basin natural gas exploratory blocks.

Seiva Sul mine, located in the Candiota Municipality, in the State of Rio Grande do

Sul, has proved reserves of 152 tonnes of mineral coal. In this same area, Sul and

Seival thermoelectric projects will be built, plant that will have an installed capacity

pf 727 MW and 600 MW, respectively, and from the integration with Seivel Sul mine,

they will be a guaranteed fuel supply for 30 years.

Complexos Eólicos Ventos, with projected capacity of up to 600 MW and addition

40

600 MW expansion plan, totaling 1200 MW, are located in the North-East region of

Brazil.

(b) Establishment, acquisition or disposal of equity interest

(i) On March 1, 2012, CCX Brasil Participações S.A. was incorporated, with the

corporate purpose of holding equity interest in other business and non-business

companies, in Brazil or abroad. On May 24, 2012, the Board of Directors of ENEVA

approved a partial spin-off which resulted in the incorporation of CCX Carvão da

Colômbia (Colombia Coal). The purpose of this transaction was to spin off ENEVA‘s

mining assets located in Colombia.

(ii) ENEVA Participações S.A. (formerly MPX E.ON Participações S.A.), established on

March 20, 2012, has the business purpose of holding shares in other business and

non-business companies, in Brazil or abroad. On May 24, 2012, ENEVA S.A.

contributed R$67.9 million in the capital of ENEVA Participações, via the partial

transfer of its investment portfolio with shareholdings in the subsidiaries MPX Chile

Holding Ltda., Parnaíba Participações S.A., Sul Geração de Energia Ltda. (TEP MPX

Sul Energia Ltda.’s new company name), TEP Porto do Açu Energia S.A. and Açu II

Geração de Energia S.A. (formerly TEP Porto do Açu II Energia S.A.) On the same

date, ENEVA S.A. contributed R$62.0 million as premium in the subscription of new

shares. On December 12, 2012 ENEVA increased capital stock of MPX EON

Participações by R$19.3 million, via the transfer of 50% of its shares in the

subsidiary Seival Participações.

(iii) On November 8, 2012 Tauá II Geração de Energia Ltda. (MPX Tauá II Energia Solar

Ltda.’s new company name) was established, with the business purpose of

implementing and exploring electrical energy projects via solar power use, including

the generation and trading of electric power and availability of a generation back-up.

(iv) On May 11, 2012 Parnaíba V Geração de Energia S.A (TEP Parnaíba V Geração de

Energia S.A.’s new company name) was established, with the business purpose of

developing, building and operating the thermal energy project units from natural

gas, and the trading of natural gas.

(v) On May 12, 2012 Parnaíba Geração e Comercialização de Energia S.A. was

established, with the business purpose of trading, importing and exporting electrical

energy, as well as the participation in the capital stock of other companies.

(vi) On June 20th, 2012 MPX Investimentos S.A. was established, with the business

purpose of holding equity interest in other business and non-business companies, as

shareholder, in Brazil or abroad.

(vii) On September 10, 2012 ENEVA Investimentos S.A. (MPX Desenvolvimentos S.A.’s

new company name) was established, with the business purpose of developing and

implementing coal gasification projects for the production of industrial gases and its

liquid and gaseous byproducts, utilizing commercial technologies. On December 31,

2012 this subsidiary is reported as uncovered liability.

(viii) On March 1, 2012 UTE Parnaíba III Geração de Energia S.A. was established with the

business purpose of developing, constructing and operating projects in thermal

energy generation from natural gas, and the trading of natural gas, as well as the

holding equity interests in other companies, whether simple or business companies,

whose business purposes are similar to the Company´s. On October 8, 2012 its

corporate name was changed to Parnaíba Participações S.A.

(ix) On September 10, 2012, ENEVA Participações S.A., a joint venture between ENEVA

and DD Brazil Holdings S.A. acquired 100% of Complexos Eólicos Ventos, with

projected capacity of up to 600 MW and expansion plans for additional 600 MW,

totaling 1200 MW, located in the North-East region of Brazil

41

(x) On March 27, 2013, the acquisition of 100% of Mabe Contrução e Administração de

Projetos Ltda.’s stocks was completed, a consortium formed by Maire Tecnimont S.A.

and EfacecGroup. The acquisition was made in conjunction and in equal proportions

between ENEVA and EDP – Energias do Brasil S.A. and refers to the management of

Pecém, Itaqui and Pecém II thermoelectric plants constructions works. ENEVA and

EDP have agreed that Pecém II and Itaqui, endevours fully controlled by ENEVA, will

continue to be exclusively managed by ENEVA

(xi) On April 5, 2013, the acquisition of TEP MC2 Nova Venécia’s entire share capital was

completed by ENEVA, ENEVA Participações S.A. (MPX E.ON PArticipações S.A.’s new

company name) and Petra Energia S.A. On November 15, 2013, the company’s

company name was changed to Parnaíba III Geração de Energia S.A.

(c) Unusual events or operations

The Company management informs that there was not any unusual Company related event

or activities during the periods ended December 31, 2013, 2012 and 2011, which may have

caused, or is expected to cause any relevant effect on the financial statements or returns of

the Company.

10.4 – Significant changes in accounting practices – Qualifications and Emphases

in the Auditor´s report

The Company Management has the following comments to make on changes in accounting

practices and emphases in the report of the independent auditors:

(a) Significant changes in accounting practices

The consolidated financial statements for the year ended December 31, 2010 were the first

presented in accordance with the IFRS. The Company applied the accounting policies

defined to all periods presented, which includes the balance sheet at the transition date,

defined as January 1, 2009.

To adjust the financial statements to the IFRS requirements and to the pronouncements,

interpretations and guidelines issued by CPC, the Company made the relevant mandatory

changes required and certain optional exemptions in relation to full retrospective

application, as follows:

Optional exemptions

• Business Combination Exemption – The Company applied the business combination

described in IFRS 1 and CPC 37 and thus did not restate the business combinations that

occurred before January 1, 2009, the transition date.

• Deemed Cost Exemption – The Company opted not to use deemed cost in the valuation

of its fixed assets, since this item, as presented pursuant to the previous accounting

practices (BR GAAP in force in 2009), already materially met the main requirements for

the recognition, valuation and presentation of CPC 27 (IAS 16), and mainly because

substantial portions of the Company’s assets are under construction, and were

purchased recently.

Mandatory changes

• Interest of non-controlling shareholders is now part of shareholders’ equity, separated in

a specific line, as per CPC 26 and IAS 1.

• Cumulative Translation Adjustments – The Company set to zero the cumulative

translation adjustments of previous years to the transition date of January 1, 2009. This

change was applied to all subsidiaries abroad.

42

• The Company recognized Stock Options granted by the Controlling Shareholder, as per

CPC 10 and ICPC 05, for BRGAAP purposes, and IFRS 2 (Share-based payment) and

IFRIC 11, for IFRS purposes.

• For BRGAAP purposes, Law No. 11941/09 extinguished the deferred asset, allowing the

maintenance of the balance accrued until December 31, 2008, which can be amortized

over up to 10 years, subject to impairment test. This is being adopted by the Company

in the individual financial statements pursuant to the provisions of CPC 43. In

accordance with the IFRS, pre-operational revenues and expenditures should be

recorded in income for the year when incurred. With the adoption of IFRS.

• The Company valued its fixed assets based on CPC 27, ICPC 10, and IAS 16, not

identifying relevant effects as to the assessment of the useful life, residual values and

componentization of the assets. As it understands that its fixed assets are recorded at

values that are very close to their fair value, and given that they mostly comprise fixed

assets in progress and properties recently purchased, it did not use deemed cost.

• The net effects of exchange variation on the principal of loans were reclassified from

fixed assets to accumulated losses in the consolidated balance sheet on the date of

initial adoption (January 1, 2009) and in income for the year ended December 31, 2009,

as per CPC 20 and IAS 23.

All IFRS standards and interpretations for financial instruments in force were adopted by

the Company in 2010. The main applicable ones are as follows:

• Amendment to IFRS 7 (Financial Instruments: Disclosure): The purpose of this

amendment is primarily to improve disclosure requirements. This increases the

requirements for the disclosure of fair value measurement, liquidity risk, market risk,

credit risk and any other significant risk.

• Amendment to IFRS 7 relating to Fair Value Hierarchy: This amendment establishes the

division of fair value hierarchy relating to financial instruments. The hierarchy gives

priority to unadjusted quoted prices in active markets for the financial asset or liability,

which are classified as Level 1. Fair Value of financial instrument may be classified in

three different levels, as set forth below:

. Level 1: Data from active market (unadjusted traded price), so that they can be accessed

on a daily basis, including on the day of fair value measurement.

. Level 2: Data from active market (unadjusted traded price) other than that included in

Level 1, derived from pricing model based on observable market data.

. Level 3: Data derived from pricing model based on unobservable market data.

• Amendment to CPC 38 and IAS 39 (Financial Instruments)

In such pronouncement, the procedures to identify derivative instruments embedded in

contracts were highlighted, aiming at timely recognition, control and appropriate

accounting treatment to be used, and which should be applicable to the Company and its

subsidiaries.

Agreements with possible clauses of embedded derivative instruments or securities were

analyzed in order to mitigate potential host contracts. If found, there is guidance regarding

possible effectiveness testing and methodology for calculation of fair value.

The Company and its subsidiaries do not hold outstanding agreements with embedded

derivatives.

In addition to the points described above, the Company has adjusted its financial

statements for disclosure purposes, and now presents the following information:

• Consolidated statement of comprehensive income, as required by CPC 26 and IAS 1

• Earnings (losses) per share, as required in CPC 41 and IAS 33 (Earnings per share).

43

• Expenses by nature, as required in CPC 26 and IAS 1 (Presentation of Financial

Statements).

• Information by segment, as required in CPC 22 and IFRS 8 (Operating Segments).

The consolidated financial statements for the year ended December 31, 2011, prepared

under the IFRS, did not suffer any effects of changes in the accounting practices.

There were no changes in the accounting practices used by the Company and its

subsidiaries during the years ended December 31, 2012 and 2011. The accounting

practices adopted by the Company and its subsidiaries are consistent with those utilized

abroad.

Except for the adoption of IFRS 10 and 11, whose accounting policy is described below,

information has been prepared based on the same accounting practices used to prepare the

Financial Statements as of December 31, 2012. Therefore, this information should be read

together with the Financial Statements as of December 31, 2012

IFRS 10 establishes a single control model which applies to all entities, including special

purpose entities. The changes introduced by IFRS 10 required that Management exercise a

significant judgment to determine which entities are controlled, and hence, required to be

consolidated by a controlling company, comparatively to the requisites that were part of

IAS 27.

IFRS 11 eliminates the option of accounting for joint ventures (ECC) based on proportional

consolidation. Instead, the ECCs which fit the definition of joint arrangements should be

recorded based on the equity method.

The changes in accounting policies influenced the individual and consolidated financial

statements, requiring the restatement of the comparative numbers. The main adjustments

made and the impacts on the financial statements relative to the presented periods are

demonstrated below:

In compliance with IFRS 11, investments in jointly-controlled subsidiaries Porto do Pecém

Geração de Energia S.A., Porto do Pecém Transportadora de Minérios S.A., OGMP



Participações S.A., UTE MPX Sul Energia Ltda., Parnaíba Participações S.A., UTE Porto do

Açú Energia S.A., Porto do Açú II Energia S.A. and MPX E.ON Participações S.A. are

evaluated by the equity method in the individual and consolidated financial statements.

Before, these investments were consolidated proportionally.

(b) Significant effects of changes in accounting practices

As of January 1, 2013, the Company adopted new accounting rules for compliance with the

international accounting standards. As a result of the change in accounting practices, the

Company no longer consolidates in its financial information all investees over which the

Company, individually, has no controlling power, namely, Porto do Pecém Geração de

Energia S.A., Porto do Pecém Transportadora de Minérios S.A., OGMP Transporte Aéreo

Ltda., Pecém Operação e Manutenção de Unidades de Geração S.A., MABE Construção e

Administração de Projetos Ltda., MPX Chile Holding Ltda., Seival Participações S.A., UTE

MPX Sul Energia Ltda., Parnaíba Participações S.A., UTE Porto do Açú Energia S.A., Porto

do Açú II Energia S.A. and MPX E.ON Participações S.A.

In addition, the Company began to recognize recognizes income from the above-mentioned

companies at the equity method. Thus, the Company’s income account at the equity

method gained relevance in the context of income of the Company as a whole, which would

not occur at the previously adopted accounting practices.

Below is the table showing the amendments made to the comparative balances restated in

the financial statements as of December 31, 2012:

Consolidated 12/31/2012

44

Originally disclosed Adjustments Restated

(in R$ thousands)

Assets

Current Assets

Cash and cash equivalents 590,469 (71,192) 519,277

Securities 3,441 - 3,441 Accounts receivable 152,114 (130,769) 21,345

Subsidies receivable – Fuel Consumption account 17,561 - 17,561

Inventories 211,718 (69,031) 142,687

Prepaid expenses 40,462 (21,111) 19,351 Tax recoverable 57,438 (20,028) 37,410

Earnings on Derivatives 3,018 - 3,018

Miscellaneous advances 20,267 (18,484) 1,783

Restricted deposits 4,237 (4,202) 35 Other credits 3 (3) -

1,100,728 (334,820) 765,908

Non-current assets

Prepaid expenses 8,705 (211) 8,494 Restricted deposits 137,717 (2,069) 135,648

Subsidies receivable – Fuel Consumption account 24,617 - 24,617

Tax recoverable 34,709 (10,675) 24,034

Income and social contribution taxes - deferred 456,123 (150,575) 305,548 Loans to affiliates 359 134,567 134,926

Accounts receivable from other related persons 8,575 (7,441) 1,134

Accounts receivable from affiliates 3,732 3,061 6,793

Advance for future capital increase in affiliates - 12,425 12,425 Embedded derivatives 479 - 479

675,016 (20,918) 654,098

Investments 62,956 770,999 833,955

Property, plant and equipment 7,362,815 (1,792,416) 5,570,399

Intangible assets 249,665 (34,429) 215,236

9,451,180 (1,411,584) 8,039,596

45



(in R$ thousands)

Liabilities

Current Liabilities

Suppliers 228,638 (113,377) 115,261

Loans and Financing 1,915,402 (95,428) 1,819,974 Owing to affiliates - 26,783 26,783

Owing to parent company 3,407 (3,407) -

Owing to other related parties 19,057 (15,068) 3,989

Debentures 111 - 111 Taxes and contributions payable 11,375 (4,134) 7,241

Social and labor liabilities 12,980 (3,117) 9,863

Losses on derivatives transactions 39,506 (16,555) 22,951

Contractual reserve 133,935 (56,561) 77,374 Profit sharing 23,900 (3,267) 20,633

Dividends payable 1,960 - 1,960

Other obligations 16,888 (13,563) 3,325

2,407,159 (297,694) 2,109,465

Non-current liabilities

Loans and financing 4,151,947 (1,047,141) 3,104,806

Debts with other related parties 215 215 430

Debentures 4,954 - 4,954 Losses on derivatives transactions 166,992 (72,195) 94,797

Provision for uncovered liabilities - 19,840 19,840

Income and social contribution taxes - deferred 10,431 (8,383) 2,048

Provision for decommissioning 4,197 (2,079) 2,118

Other provisions 710 (710) -

4,339,446 (1,110,453) 3,228,993

Shareholders’ equity

Capital stock 3,731,734 - 3,731,734

Capital Reserve 321,904 - 321,904 Adjustments to equity valuation (119,067) - (119,067)

Accumulated loss (1,384,971) - (1,384,971)

Shareholders’ equity attributable to controlling shareholders 2,549,600 - 2,549,600

Participation of non-controlling shareholders 154,975 (3,437) 151,538

Total shareholders’ equity 2,704,575 (3,437) 2,701,138

9,451,180 (1,411,584) 8,039,596

46

Statement of income



(in R$ thousands)

Revenues from sale of goods and/or services 490.940 -(442.154) 48.78675,669 Cost of goods and/or services sold (597.554) 546.605 (50.949)

Gross income (106.614) 104.451 (2.163)

Operating expenses/revenues (314.937) (89.771) (404.708)

General and administrative (280.284) 49.258 (231.026)

Personnel and managers (134.188) 22.748 (111.440)

Other expenses (20.860) 48.449 (12.411) Third party services (107.473) 15.334 (92.139)

Depreciation and amortization (3.976) 1.188 (2.788)

Leases and rentals (13.787) 1.539 (12.248)

Other operating revenues 1.823 (615) 1.208

Other operating expenses (2.241) (14.546) (16.787)

Unsecured liabilities 0 (14.671) (14.671)

Losses on disposal of assets (895) 16 (879)

Provision for losses in Investments (1.346) 16 (1.237) Equity pick-up (34.235) (123.868) (158.103)

-

Income before financial income and taxes (421.551) (14.680) (406.871)

-

Financial income (127.540) 37.087 (90.453)

Financial revenues 165.179 (415.102) 249.823

Positive Currency Variation 74.258 (49.172) 25.086

Fair Value of Debentures 62.482 -0 62.482

Financial Investments 85.136 (8.537) 76.599

Derivative Financial Instruments 66.739 (355.945) (422.684) Other Financial Revenues 10.142 (1.448) 8.694

Financial expenses (292.819) 452.189 (159.370)

Negative Currency Variations (89.793) 73.314 (16.479)

Derivative Financial Instruments (110,598) 124,005 13,407

Interest/Costs of Debentures (130.863) 0 (130.863) Fair Value of Debentures 0 0 0

Other financial Expenses (101.181) 9.255 (91.926)

Income before income taxes (549.091) 51.762 (497.324)

Income and Social Contribution Taxes on Earnings 114.638 (51.762) 62.876

Current (2.289) -368 (1.921)

Deferred 116.927 (52.130) 64.797

Consolidated Net Income for the Period (434.453) 5 (434.448)

Loss for the year (434.453) - (434.448)

Attributed to Partners of the Parent Company (435.201) -0 (435.201)

Attributed to Non-Controlling Partners (749) -5 (754)

Profit / Loss per Share - - -

Basic and diluted loss per share (in R$) (0.7513) (0.8705) (1.6218)

(c) Qualifications and emphases in the auditor´s report

In compliance with the standards contained in article 25 of CVM Instruction No. 480, of

December 7, 2009, as amended, Management declares that it has reviewed, discussed and

agreed with the opinions stated in the independent Auditor´s report, regarding the

Financial Statements (Parent Company and Consolidated) for the period ended December

31, 2011, 2012 and 2013.

(2011)

Emphasis

As described in note 3, the individual financial statements were prepared according to the

accounting practices adopted in Brazil. In the case of ENEVA S.A. these practices differ

from the IFRS applicable to separate financial statements only as regards valuation of

investments in subsidiaries, affiliates and joint ventures by the equity method, whilst for

the purposes of the IFRS they would be valued at cost or fair value; and as regards

maintenance of the deferred asset balance existing as of December 31 2008. Our opinion is

not qualified as a result of this matter.

As mentioned in note 1, the subsidiaries Porto do Pecém Geração de Energia S.A., MPX

Energia Pecém I Geração de Energia S.A., UTE Porto do Itaqui Geração de Energia S.A.,

UTE Porto do Açú Energia S.A., Seival Sul Mineração Ltda., UTE MPX Sul Energia Ltda., MPX

Viena GmbH, MPX Àustria GmbH, MPX Colômbia S.A., Porto do Pecém Transportadora de

47

Minérios S.A., MPX Comercializadora de Combustíveis Ltda., Termopantanal Ltda., Nova-

Sistemas de Energia Ltda., UTE Parnaíba Geração de Energia S.A., Pecém Operação e

Manutenção de Unidades de Geração Elétrica S.A., Kebiny S.A., CGX Castilla Generación de

Energia Ltda., Usina Termelétrica Seival Ltda. and UTE Parnaíba II Geração de Energia S.A.

are in pre-operating phase. The recovery of values recorded in non-current assets depend

on the success of future operations of the Company and its subsidiaries, affiliated and joint

ventures, and these depend on financial support of the shareholders and/or third party

funds until their operations are profitable. Management’s plans for the Company and its

subsidiaries related to operating activities are described in notes 1 and 13.

The Company’s management agrees with the auditor’s emphasis and reiterates its

understanding that the projects described in these financial statements are profitable and

will remunerate the shareholders for the investments made.

(2012)

Emphasis

As described in note 3, the individual financial statements were prepared according to the

accounting practices adopted in Brazil. In the case of ENEVA S.A. these practices differ

from the IFRS applicable to separate financial statements only as regards valuation of

investments in subsidiaries, affiliates and joint ventures by the equity method, whilst for

the purposes of the IFRS they would be valued at cost or fair value; and as regards

maintenance of the deferred asset balance existing as of December 31 2008, which is being

amortized. Our opinion is not qualified as a result of this matter.

A relevant part of the Company, its subsidiaries and joint ventures are in pre-operating

phase, and the business continuity and recovery of values recorded in non-current assets

depend on the success of future operations, as well as the shareholder´s financial support

and/or third party funds until operations are profitable. Management’s plans related to the

operating activities are described in notes 1 and 12. The financial statements were

prepared considering the regular business continuity of the Company, as well as of its

affiliates and joint ventures. Our opinion is not qualified as a result of this matter.

The Company’s management agrees with the auditor’s emphasis and reiterates its


will remunerate the shareholders for the investments made.

(2013)

Emphasis

Application of the equity equivalence method and maintenance of deferred assets

As described in Note 3, the financial statements have been prepared in accordance with

accounting practices adopted in Brazil. Geneva Preview In the case of SA, these practices

differ from IFRS applicable to the separate financial statements only as regards the

valuation of investments in subsidiaries, associates and jointly controlled by the equity

method, since under IFRS would cost or fair value, and to maintain the balance of deferred

assets existing as of December 2008, which is being amortized 31. Our opinion is not

qualified in respect of this matter.

Operational Continuity

We call attention to Note 1 to the financial statements, which describes that the Company

recorded in December 31, 2013 accumulated losses of R$ 2,379,303,000 and showed

excess liabilities over current assets in the parent and consolidated financial statements the

amounts of R$ 1,438,768 thousand and R$ 2,231,017 thousand, respectively. This

situation, among others described in Note 1, raises significant uncertainty about its

continued operation, which depend on the success of current operations and future as well

as the financial support of shareholders and/or renegotiations stretching of loans with third

parties. The financial statements do not include any adjustments due to these

uncertainties. Our opinion is not qualified in respect of this matter.

48

The Company's management agrees with the emphasis of the auditor and reiterates its


that will remunerate shareholders for investments.

Additionally, the Company is evaluating potential measures to strengthen the capital

structure and create the foundations necessary to allow a significant reduction of its

leverage.

10.5 – Management´s comments on Critical Accounting Policies

The Company’s management clarifies that the critical accounting polices applied by the

Company are described below.

Use of estimates and judgments.

Preparation of individual and consolidated financial statements in accordance with IFRS and

CPC standards requires Management to make judgments, estimates and assumptions that

affect the application of accounting policies and the reported values of assets, liabilities,

income and expenses. Actual future results may differ from these estimates.

The accounting estimates and judgments are revised on a continuous basis and are based

on historical experience and other factors, including expectations of future events

considered reasonable under the circumstances.

Based on assumptions, the Company prepares estimates in relation to the future. By

definition, the resulting accounting estimates will rarely be equal to the respective actual

results. The estimates and assumptions that present a significant risk, with the probability

of causing relevant adjustments of the accounting values of assets and liabilities fot the

upcoming fiscal year are contemplated below. The information on assumptions and

estimates that may result in adjustments within the next financial year are included below:

Impairment of non-current assets

The Company tests for eventual impairment of fixed assets, intangible assets and deferred

income tax and social contribution in accordance with the accounting principles described in

note 4.5.10. The recoverable values of Cash Generating Units (UGCs) were determined

based on calculations of value in use, made using assumptions and estimates formed based

on, mainly, studies of the regulated electric energy commercialization market. These

assumptions and estimates were discussed with the operational managers and were revised

and approved by the Company management.

(b) Fair value of derivatives and options (remunerations based on shares)

The fair value of financial instruments that are not negotiated in active markets is

determined by the use of assessment techniques. The Company uses its judgment to select

various methods and define assumptions that are based mainly on the market conditions

existing on the balance sheet issuance date. The Group uses proprietary methodology to

calculate the fait value of derivatives and granted options, instruments that are not

negotiated in active markets.

Summary of the main accounting policies

The main accounting policies applied in the preparation of these financial statements are

defined below. These policies were applied in a consistent manner in the presented

exercises, unless indicated otherwise.

1- Consolidation

The consolidated financial statements include the financial statements of the parent

company, of those companies where the Company has a controlling interest (directly and

indirectly) and of the Exclusive Funds, as detailed below:

Controlling Interest

49

12/31/2013

12/31/2012

Directly Controlled Companies (consolidated)

Pecém II Geração de Energia S.A.

100.00%

99.70%

Itaqui Geração de Energia S.A.

100.00%

100.00%

Amapari Energia S.A.

51.00%

51.00%

Seival Sul Mineração Ltda.

70.00%

70.00% Termopantanal Participações Ltda.

66.67%

66.67%

Parnaíba Geração de Energia S.A.

70.00%

70.00%

Parnaíba II Geração de Energia S.A. 100.00% 100.00%

Parnaíba V Geração de Energia S.A. 99.99% 99.99% Parnaíba Geração e Comercialização de Energia S.A. 70.00%

ENEVA Investimentos S.A. 99.99% 99.99%

ENEVA Desenvolvimento S.A. 99.99% 99.99%

Tauá II Geração de Energia Ltda. 100.00% 100.00% Fundos exclusivos:

Fundo de Investimento em Cotas de Fundos de Investimento Multimercado Crédito Privado MPX 63 100.00% 100.00%

Fundo de Investimento Multimercado Crédito Privado MPX 100.00% 100.00%

Coligadas/Controladas em conjunto (avaliadas por equivalência)

Parnaíba Gás Natural S.A.

33.33%

33.33%

UTE Porto do Açu Energia S.A. 50.00% 50.00%

Sul Geração de Energia Ltda. 50.00% 50.00%

MPX Chile Holding Ltda. 50.00% 50.00% Porto do Pecém Geração de Energia S.A. 50.00% 50.00%

Porto do Pecém Transportadora de Minérios S.A. 50.00% 50.00%

OGMP Transporte Aéreo Ltda. 50.00% 50.00%

Pecém Operação e Manutenção de Unidades de Geração S.A. 50.00% 50.00% Seival Participações S.A. 50.00% 50.00%

ENEVA Participações S.A. 50.00% 50.00%

Açu II Geração de Energia Ltda. 50.00% 50.00%

MABE Construção e Administração de Projeto 50.00% - Parnaíba Participações S.A. 50.00% 50.00%

The following accounting policies are applied in the preparation of the consolidated financial

statements.

(a) Subsidiaries

Subsidiaries are all the entities (including structured entities) in which the Company has

control. The Company controls an entity when it is exposed ou has the right to variable

returns resulting from its involvement with the entity and has the capacity to interfere in

these returns due to the power it exerts over the entity. Subsidiaries are totally

consolidated on the date on which control is transferred to the Company. Consolidation is

interrupted on the date on which the Company no longer detains control.

The Company uses the acquisition method to record the business combinations. The

transferred consideration includes the fair value of the assets and liabilities resulting from a

contingent consideration contract, when applicable. Costs related to the acquisition are

recorded in the fiscal year’s results as they occur. The purchased identifiable assets and the

assumed contingent liabilities in a business combination are initially stated by their fair

values on the date of the acquisition. The Company recognizes the non-controlling interest

in the acquired company, both by its fair value as well as by the proportional part of the

non-controlled interest in the fair value of the net assets of the acquired company.

The surplus: (i) of the transferred consideration; (ii) of the value of the participation on

minority shareholders in the acquired company; and (iii) of the fair value on the date of

acquisition of any prior equity interest in the acquired company, in relation to the fair value

of the Group’s interest in the net purchased identifiable assets is recorded as goodwill.

When the total transferred consideration, the recognized interest of non-controllers and the

measurement of the interest held before is less than the fair value of the net assets of the

acquired subsidiary, the difference is recognized directly in the income statement of the

fiscal year.

Transactions, balances and unrealized earnings in transactions between companies bound

to the Company are eliminated. The unrealized losses are also eliminated unless the

operation provides proof of an impairment of the transferred asset. The accounting policies

of subsidiaries are modified when necessary in order to ensure consistency with the policies

adopted by the Company.

(b) Transactions with non-controlling interests

50

The Company treats transactions with non-controlling interests as transactions with the

owners of Company assets. For the purchases of non-controlling interests, the difference

between any consideration paid and the acquired part of the accounting value of the

subsidiary’s net assets is recorded in shareholders’ equity. The earnings or losses on

disposals for non-controlling interests are also recorded directly in shareholders’ equity, in

the account “Equity Valuation Adjustments”.

(c) Loss of control in subsidiaries

When the Company loses control, any interest in the entity is restated to its fair value, with

the change in accounting value being recognized in the income statement. The fair value is

the accounting value for subsequent recording of the interest held in an affiliated company,

a joint venture or a financial asset. Furthermore, any values previously recognized in other

comprehensive results relative to said entity are recorded as if the Company had directly

disposed of the related assets or liabilities. This may mean that the values previously

recognized in other comprehensive results are reclassified to the result.

(d) Affiliated Companies and Joint Ventures

Affiliated companies are entities over which the Company has significant influence but not

control, generally by means of a 20% to 50% interest of the voting rights. Joint ventures

are all those entities over which the Company has joint control with one or more third

parties. The investments in joint ventures are classified as joint operations or joint ventures

depending on the contractual rights and obligations of each investor.

Joint operations are recorded in the financial statements in order to represent the

Company’s contractual rights and obligations. In this way, the assets, liabilities, revenues

and expenses related to its interest in joint operations are recorded individually in the

financial statements.

The investments in affiliates and joint ventures are recorded using the equity method and

are initially recognized at their cost value. The Company’s investment in affiliates and joint

ventures includes the premium identified in the acquisition, net of any losses due to

accumulated impairment.

The Company’s participation in the profits or losses of its affiliates and joint ventures is

recognized in the income statement and the participation in changes of reserves is

recognized in the Company’s reserves. When the Company’s participation in the losses of

an affiliate or joint venture is equal to or greater than the accounting value of the

investment, including any other receivables, the Company does not recognize the additional

losses unless it has incurred in obligations or made payments in name of the affiliated

company or joint venture.

The unrealized earnings from operations between the Company and its affiliates and joint

ventures are eliminated in the proportion of the Company’s interest. Unrealized losses are

also eliminated unless the operation provides evidence of an impairment of the transferred

asset. The accounting policies of the affiliated companies are changed, when necessary, in

order to ensure consistency with the policies adopted by the Company.

If the interest in the affiliated company is reduced, but significant influence is still held, only

a proportional part of the values previously recognized in other comprehensive results will

be reclassified to the income statement, when appropriate.

The diluted earnings and losses occurred in affiliated company interests are recognized in

the income statement.

2. Presentation of Segment Information

The information by operational segments is presented consistently with the internal report

supplied to the main operational decision maker. The main operational decision maker,

responsible for allocating resources and evaluating the performance of the segments, is the

Board of Directors, also responsible for strategic decisions of the Company.

3. Foreign Currency Conversion

51

(a) Functional Currency and presentation currency

The items included in the financial statements of each of the companies connected to the

Company are stated using the currency of the main economic environment in which the

company operates (functional currency). The individual and consolidated financial

statements are presented in R$, which is the Company’s functional currency as well as its

presentation currency. The functional currency of the MPX Chile Holding Ltda joint venture

is the Chilean Peso, due to its business plan, economic environment and, mainly, due to its

operational costs. The monetary assets and liabilities stated in foreign currencies have been

converted to Reais using the exchange rate of the balance sheet closing date.

(b) Transactions and balances

The operations in foreign currencies are converted to functional currency using the

exchange rates in effect on the dates of the transactions or on the dates of the valuation,

when the items are restated. The exchange rate earnings and losses resulting from the

settlement of these transactions and from the conversion using the exchange rates of the

end of the fiscal year, relative to monetary assets and liabilities in foreign currencies, are

recognized in the income statement, except when qualified as hedge accounting and,

therefore, deferred in equity as cash flow hedge operations and net investment hedge

operations.

The exchange earnings and losses related to loans, cash and cash equivalents are

presented in the income statement as financial revenue or expense.

The exchange rate variations of non-monetary financial assets and liabilities, such as

investments in shares classified as stated at fair value through income, are recognized in

the income statement as part of the earning or loss of fair value. The exchange rate

variations of non-monetary financial assets, for example, investments in shares classified

as available for sale, are included in the account “Equity Valuation Adjustments”.

(c) Companies with different functional currencies

The results and financial position of MPX Chile Holding Ltda (not a hyper-inflationary

economy currency), whose functional currency is different from the presentation currency,

are converted to the presentation currency, as follows:

(i) the assets and liabilities of each presented balance sheet are converted using the

exchange rate of the balance sheet closing date.

(ii) The revenues and expenses of each income statement are converted using the

average exchange rates (unless this average is not a reasonable approximation of

the cumulative effect of the rates in effect on the dates of the operations and, in this

case, the revenues and expenses are converted using the exchange rates of the

dates of the operations.

(iii) All resulting exchange rate differences are recognized as a separate component in

shareholders’ equity in the account “Equity Valuation Adjustments”.

In the consolidation, the exchange rate differences resulting from the conversion of the net

investment in foreign operations and from loans and other foreign currency instruments

designated as hedge of these investments are recognized in shareholders’ equity. When an

operation abroad is partially disposed of or sold, the differences in exchange recorded in

equity are recognized in the income statement as part of earnings ou part of the sale.

Premiums and fair value adjustments, resulting from the acquisition of an entity abroad are

treated as assets and liabilities of the foreign entity and are converted using the closing

date exchange rate.

4. Cash and Cash Equivalents

Cash and cash equivalents include cash, bank deposits and other short-term, high-liquidity

investments, with original maturities of up to three months, and having insignificant risk of

52

change of value, with the presented balance net of balances of accounts guaranteed in the

cash flow statement.

5. Financial Assets

5.1 Classification

The Company initially classifies its financial assets under the following categories: stated at

fair value through income and loans and receivables. The classification depends on the use

for which the financial assets were acquired.

(a) Financial assets at fair value through income

Financial assets at fair value through income are financial assets held for negotiation. A

financial asset is classified in this category if it was acquired, mainly, for purposes of short-

term sale. The assets in this category are classified as current assets. Derivatives are also

categorized as held for negotiation, unless they have been designated hedge instruments.

(b) Loans and Receivables

Loans and receivables are non-derivative financial assets, with fixed or determinable

payment, which are not sold in an active market. They are presented as current assets with

the exception of those having maturity dates greater than 12 months after the date of

issuance of the balance sheet (these as classified as noncurrent assets).

5.2 Acknowledgement and measurement

The purchases and sales of financial assets are normally acknowledged on the date of the

negotiation. Investments are initially recognized at their fair value, accrued by the costs of

the transaction for all financial assets not classified at fair value through income. Financial

assets at fair value through income are initially recognized at fair value and the costs of the

transaction are debited to the income statement. Financial assets are written off when the

rights to receive cash flows have matured or have been transferred; in this last case, as

long as the Company has significantly transferred all the risks and benefits of ownership of

the property. Loans and receivables are recorded at amortized cost, using the effective tax

rate method.

The earnings and/or losses resulting from variations in the fair value of financial assets

stated at fair value through income are presented in the income statement under “Financial

Revenue or Expense” during the period in which they occurred.

The foreign exchange variations of monetary instruments are recognized in the income

statement. The foreign exchange variations of non-monetary instruments are recognized in

shareholders’ equity. The variations in fair value of monetary and non-monetary

instruments, classified as available for sale, are recognized in shareholders’ equity.

The interest of securities available for sale, calculated using the effective tax rate method,

are recognized in the income statement as part of other revenues.

5.3 Compensation of financial instruments

Financial assets and liabilities are compensated and the net value is presented in the

balance sheet when there is a legal right to compensate the recognized values and there

exists the intention to liquidate them on a net basis or to realize the asset and liquidate the

liability at the same time.

5.4 Impairment of financial assets

(a) Assets are stated at amortized cost.

The Company evaluates, on the date of each balance sheet, if there is objective evidence

that a financial asset or group of financial assets is deteriorated. A financial asset or group

of financial assets is deteriorated and the losses due to impairment are incurred only if

there is objective evidence of impairment as a result of one or more events that occurred

after the initial acknowledgement of the assets (a “loss event”) and that loss event (or loss

53

events) has an impact on the estimated future cash flows of the financial asset ou group of

financial assets that can be reliably estimated.

The criteria that the Company uses to determine if there is objective evidence of a loss due

to impairment include:

(i) relevant financial difficulty of issuer or debtor;

(ii) breach of contract, such as default or delay in the payment of interest or principal;

(iii) the Company, for economic or legal reasons relative to the financial difficulty of the

borrower, extends to the borrower a concession that the borrower would not

normally consider;

(iv) it becomes probable that the borrower will declare bankruptcy or other type of

financial reorganization;

(v) disappearance of an active market for that kind of financial asset due to the financial

difficulties;

(vi) observable data indicating that there is a measurable reduction in the future cash

flows estimated based on a portfolio of financial assets as from the initial

acknowledgement of those assets, although the reduction may not yet be identified

with the individual financial assets in the portfolio, including:

Adverse changes in the payment situation of the loan borrowers in the portfolio;

National or local economic conditions that correlate with the defaults of the portfolio assets.

The amount of loses due to impairment is measured as the difference between the

accounting value of the assets and the present value of the estimated future cash flows

(excluding the losses of future credit that were not incurred) discounted by the financial

assets’ original interest rate. The book value of the asset is reduced and the value of the

loss is recognized in the income statement. If a loan or investment held until maturity has a

variable interest rate, the discount rate is used to measure a loss due to impairment is the

current effective interest rate determined according to the contract. Using a practical

method, the Company can measure the impairment based on the fair value of an

instrument using an observable market price.

If, during a subsequent period, the value of the loss due to impairment is reduced and the

reduction can be objectively related to an event that occurred after the impairment being

recognized (such as an improvement in the classification of the borrower’s credit), the

reversal of this loss recognized previously will be recognized in the income statement.

5.5 Derivative financial instruments and hedge activities

Initially, derivatives are recognized at fair value on the date on which a derivative contract

is executed and are subsequently restated at their fair value. The method to recognize the

resulting gain or loss depends on the fact of the derivative being designated or not as a

hedge instrument in the cases of adoption of hedge accounting. If this is the case, the

method depends on the nature of the item that is being protected by hedging. The

Company adopts hedge accounting and designates certain derivatives as hedge of o specific

risk associated to a recognized asset or liability or a highly probable foreseen operation

(cash flow hedge); or

The Company documents, at the beginning of the operation, the relationship between the

hedge instruments and the items protected by hedge operations, as well as the objectives

of the risk management and the strategy for the realization of various hedge operations.

The Company also documents its assessment, at both the beginning of the hedge and

continuously, that the derivatives used in the hedge operations are “highly effective” in the

compensation of fair value variations or of the cash flows of the items protected by hedge

operations.

The fair values of the derivative instruments used to hedge operations are disclosed in Note

18. The total fair value of a hedge derivative is classified as a noncurrent asset or liability

54

when the remaining maturity of the hedge-protected item is greater than 12 months, and,

when classified as a current asset or liability, when the remaining maturity of the hedge-

protected item is less than 12 months. The negotiation derivatives are classified as current

assets or liabilities.

(a) Cash flow hedge

The effective part of the fair value variations of derivatives designated and qualified as cash

flow hedge is recognized in shareholders’ equity, in the account “Equity Valuation

Adjustments”. The earnings or losses related to the non-effective part are immediately

recognized in the income statement as “Financial Revenue or Expense”.

The accumulated values in equity are realized in the income statement in the periods in

which the item protected by hedge affects the result (for instance, when a sale protected

by hedge occurs). The earning or loss related to the effective part of the interest rate

swaps that protects the loans with variable rates is recognized in the income statement as

“Financial Revenue or Expense”. The earnings or losses related to the non-effective part is

recognized in the income statement as “Financial Revenue or Expense”.

When a hedge instrument reaches maturity or is sold, or when a hedge no longer satisfies

the hedge accounting criteria, all the accumulated earnings or losses that exist in equity at

that moment remain in equity and are recognized in the result when the operation is

recognized in the income statement. When not more than one operation is expected to

occur, the accumulated earnings or loss that had been presented in equity are immediately

recognized in the income statement as “ Financial Revenue or Expense”.

(b) Derivatives stated at fair value through income

Certain derivative instruments do not qualify for hedge accounting. The variations in fair

value of any of these derivative instruments are immediately recognized in the income

statement as “ Financial Revenue or Expense”.

5.6 Client Receivables

Accounts receivable from clients correspond to the values to be received from the sale of

electric energy during the normal course of Company activities. If the term for receipt is

equivalent to one year or less, accounts receivable are classified as current assets. If not,

they are presented as noncurrent assets.

Accounts receivable from clients are, initially, recognized at fair value and, subsequently,

stated at amortized cost using the effective tax rate method minus the provision for

doubtful receivables (PDD or impairment).

5.7 Inventories

Inventories are stated at cost or net realization value, whichever is smaller. The method

used to assess inventories is the weighted moving average method. The net value of

realization is the sales price estimated during the normal course of business, minus the

estimated costs for conclusion and the estimated costs required to close the sale.

5.8 Intangible assets

(a) Goodwill

Goodwill is represented by the positive difference between the amount paid and/or to be

paid for the acquisition of a business and the net amount of fair value of the assets and

liabilities of the acquired subsidiary. The goodwill in the acquisitions of subsidiaries is

recorded as an ‘Intangible Asset’ in the consolidated financial statements. In the case of

recording negative goodwill, the amount is recorded as a gain in the result of the period on

the date of acquisition. Goodwill is tested annually to verify losses (impairment). Goodwill is

recorded at its fair value minus the amortization expenses and the accumulated losses due

to impairment. The term for goodwill amortization is the plant’s authorization period.

Losses due to impairment recognized on goodwill are not reverted. The earnings and losses

55

from the disposal of an entity include the book value of the goodwill related to the disposed

of entity.

Goodwill is allocated to the Cash Generating Units (UGCs) for impairment test purposes.

The allocation is made to the Cash Generating Units or to the Cash Generating Unit Groups

that should be benefitted by the business combination from which the goodwill originated,

and are identified according to the operational segment.

(b) Other intangible assets

Intangible assets include the assets acquired from third parties and that have a finite life

cycle, are stated at total acquisition cost, minus the accumulated amortization and losses

due to reduction of the recoverable value, when applicable. Other intangible assets are

represented mainly by the concession of electric power generation contracts acquired from

third parties.

5.9 Fixed Assets

5.10 Impairment of Non Financial Assets

Assets that have an undefined useful life, such as goowill, are not subject to amortization

and are tested annually to identify the eventual need for reduction to the recoverable value

(impairment). Assets that are subject to amortization are revised to verify for impairment

whenever events or changes in circumstances indicate that the book value exceeds its

recoverable value. Loss due to impairment is recognized when the book value exceeds,its

recoverable value, which represents the largest value between the fair value minus its

selling costs and its in use value. For impairment evaluation purposes, assets are grouped

at the lowest levels for which there exist separately identifiable cash flows (Cash

Generating Units – UGCs). Non-financial assets, excluding goodwill, that have been

adjusted due to impairment, are subsequently for analysis of a possible reversal of the

impairment on the date of the balance sheet.

5.11 Accounts payable to suppliers

Accounts payable to suppliers are obligations to pay for goods or services that have been

acquired in the ordinary course of business, are classified as current liabilities if payment is

due within a period of one year. Otherwise, the accounts payable are presented as non-

current liabilities. They are initially recognized at fair value and subsequently measured at

cost amortized cost using the method of effective interest rate.

5.12 Loans

Borrowings are initially recognized at fair value, net of costs incurred in transaction and are

subsequently stated at amortized cost. Any difference between the proceeds (net of

transaction costs) and the total amount payable is recognized in the income statement

during the period in which the loans are outstanding, using the method of effective interest

rate.

Loans are classified as current liabilities unless the Company has an unconditional right to

defer settlement of the liability for at least 12 months after the balance sheet date.

The costs of general and specific loans that are directly attributable to the acquisition,

construction or production of a qualifying asset, which is an asset that necessarily requires

a substantial period of time to get ready for its intended use or sale, are capitalized as part

the cost of the asset when it is probable that they will result in future economic benefits to

the entity and that such costs can be measured reliably. Other borrowing costs are

recognized as expenses in the period they are incurred.

5.13 Provisions

Provisions are recognized when: (i) the Company has a present legal or (constructive

obligation) as a result of past events obligation, (ii) it is probable that an outflow of

resources will be required to settle the obligation, and (iii) the amount can be reliably

estimated. The provisions do not include future operating losses.

56

When there are a number of similar obligations, the likelihood of settling them is

determined taking into account the class of obligations as a whole. A provision is

recognized even if the likelihood of an outflow with respect to any one item included in the

same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required

to settle the obligation using a rate before tax effects, which reflects current market

assessments of the value of money in time and the risks specific to the obligation. The

increase in the provision due to the passage of time is recognized as interest expense.

5.14 Income tax and social contribution current and deferred

The income tax and social contribution expenses for the period consist of current and

deferred taxes. Taxes on income are recognized in the income statement, except to the

extent that they relate to recognized directly in equity or other comprehensive income

items. In this case, the tax is also recognized in equity or other comprehensive income.

The burden of current and deferred income and social contribution tax is calculated based

on the enacted or substantively enacted at the date of the balance in the countries where

the Company's entities operate and generate taxable income. Management periodically

evaluates positions taken by the Company in the calculation of income taxes with respect to

situations in which applicable tax regulation is subject to interpretation, and establishes

provisions whenever appropriate on the basis of amounts expected to be paid to the tax

authorities.

Income tax and social contribution are presented net by the contributor in liabilities when

amounts payable or asset when the advance amounts paid exceed the total amount due at

the reporting date.

Income tax and social contribution taxes are recognized using the liability method, on

temporary differences arising between the tax bases of assets and liabilities and their

carrying amounts in the financial statements. However, the deferred income tax and social

contribution are not accounted for if it results from the initial recognition of an asset or

liability in a transaction other than a business combination, which, at the time of the

transaction, affects neither the accounting income nor taxable profit (tax loss).

Income tax and social contribution assets are recognized only to the extent of the likelihood

that future taxable profit will be available against which the temporary differences can be

utilized.

The deferred income taxes are recognized on temporary differences arising from

investments in subsidiaries, except where the timing of the reversal of the temporary

difference is controlled by the Company and it is probable that the temporary difference will

not be reversed in the foreseeable future.

The deferred income taxes and liabilities are presented net in the balance sheet when there

is a legal right and intention to offset them upon the calculation of current taxes, generally

related to the same legal entity and the same taxation authority. Accordingly, assets and

liabilities in different entities or different countries, generally deferred taxes are presented

separately, and not the net.

5.15 Benefits for employees

(a) Remuneration based on shares

The Company operates a number of compensation plans based on shares, settled with

shares, under which the entity receives services from employees as consideration for equity

instruments (options) of the Company. The fair value of the employee’s services received in

exchange for the grant of options is recognized as an expense. The total amount to be

recognized is determined by reference to the fair value of the options granted, excluding

the impact of any vesting conditions based on service and performance that are not in the

market (for example, profitability and sales growth targets and continued employment for a

specific period of time). The vesting conditions that are not in the market are included in

57

assumptions about the number of options that will vest. The total value of the expense is

recognized over the period in which the right is acquired, during which specific vesting

conditions must be met. At the balance sheet date, the entity revises its estimates of the

number of options that will vest based on the vesting conditions that are not in the market.

It recognizes the impact of the revision of original estimates, if any, in the income

statement, with a corresponding adjustment to equity.

The proceeds received, free of any directly attributable transaction costs are credited to

share capital (nominal value) when the options are exercised.

(b) Profit sharing

The Company recognizes a liability and an expense for profit sharing based on a

methodology that takes into consideration the profit attributable to the Company's

shareholders after certain adjustments. The Company recognizes a provision when

contractually obliged or where there is a past practice that has created a constructive

obligation.

5.16 Capital

The common and preferred shares are classified as equity.

The incremental costs directly attributable to the issue of new shares or options are shown

in equity as a deduction of the amount raised, free of taxes.

5.17 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of

electric energy in the ordinary course of the Company’s business. The revenue is shown

free of taxes, returns, rebates and discounts as well as eliminating sales within the Group.

The Company recognizes revenue when the amount of revenue can be reliably measured, it

is probable that future economic benefits will flow to the entity and specific criteria have

been met for each of the Company's activities as described below. The Company bases its

estimates on historic results, taking into consideration the type of client, type of transaction

the specifications of each sale.

(a) Sale of energy

Revenue from the sale of electricity is recognized as equivalent to the amount of energy

transferred to the customer and by estimating measurement to measure the energy

delivered but not yet considered by the previous year-end measurements. Revenues

derived from electricity supply contracts, with fixed monthly installment and variable

payment required according to the National System Operator demand - ONS.

(b) Financial income

Interest income is recognized on the accrual basis,

using the method of effective interest rate. When a loss (impairment) is identified in

relation to accounts receivable, the Company reduces the carrying amount to its

recoverable amount, being the estimated future cash flow discounted at the original

effective interest rate of the instrument. Subsequently, as time passes, the interest is

added to accounts receivables against the financial income. This financial income is

calculated at the same effective interest rate used to determine the recoverable amount,

i.e., the original rate of the instrument.

5.18 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by

the lessor are classified as operating leases. Payments made under operating leases (net of

any incentives received from the lessor) are recognized in the income statement on a linear

basis over the lease term.

58

10.6 - Internal controls related to the preparation of financial statements – Level

of efficiency and deficiency and recommendations included in the auditor’s report

(a) Level of efficiency of such controls indicating occasional imperfections and

measures adopted to correct them

The Company’s Management believes in the efficiency of internal procedures and controls

adopted to ensure the quality, accuracy and reliability of the Company’s financial

statements. For this reason, the Company’s financial statements properly show the result

from its operations and its equity and financial condition as of the respective dates.

Additionally, Management did not identify any types of imperfections that may compromise

the Company’s financial statements.

(b) Deficiencies and recommendations on internal controls set forth in the

independent auditor’s report

The Officers believe that the reports on internal controls issued by the Company's

independent auditors with respect to the years ended in December 31, 2013, 2012 and

2011 do not report significant deficiencies to the adequacy of our financial statements in

accordance with accounting practices adopted in Brazil and IFRS .

Our practice to meet and promptly amend any deficiencies identified by auditors during the

normal process of work, whether failures of processes or systems. Remember that the

scope of the audit of financial statements is not provided for the specific auditing and

reporting on the effectiveness of internal controls.

However, in the context of the audit of our financial statements, our independent auditors

have considered our systems of internal controls in the scope laid down in the applicable

auditing standards in Brazil, whose purpose is related to the planning of the audit

procedures.

10.7 - Management’s comments on the use of proceeds from public offerings and

deviations, if any

(a) How proceeds from the public offering were used

The Company Management states that, in June 15, 2011, the Company issued 21,735,744

debentures, at R$63.00 each, totaling R$1.376 billion. In the years ended December 31,

2011, 2012, and in the current year, the proceeds from the issuance of debentures were

used to:

reinforce the Company’s cash; and

support the contributions required for investments in the development of the

Company’s ventures

(b) Material deviations between the effective use of proceeds and proposals

disclosed in the memorandums of the respective distribution

Management informs that, in the past three years and in the current year, there were no

deviations between the use of proceeds and proposals set forth in the memorandums.

(c) In the event of deviations, reasons for such deviations

Management informs that, in the past three years and in the current year, there were no

deviations between the use of proceeds and proposals set forth in the memorandums.

10.8 - Management’s comments on off-balance sheet items

59

(a) Off-balance-sheet items directly or indirectly held by the issuer (off-balance

sheet items)

Management informs that the Company holds no off-balance sheet items.

i. Lease and operational lease of assets and liabilities

This is not applicable given that the Company has no off-balance sheet items.

ii. Written-off receivables portfolios on which the Company maintains risks and

responsibilities, and the relevant liabilities.


iii. Agreements on future purchase and sale of products and services


iv. Building agreements whose work has not been completed


v. Agreements on future financing receivables


(b) Other off-balance sheet items

Management informs that there are no other off-balance sheet items.

10.9 – Management’s comments on relevant off-balance sheet items

(a) As such items change or may change revenues, expenses, operating income,

financial expenses or other items recorded in the issuer’s financial statements


(b) Nature and purpose of operation


(c) Nature and amount of obligations assumed and rights generated in favor of the

issuer due to the transaction


10.10 - Management’s comments on business plan

(a) Investments

(i) Quantitative and qualitative description of current and future investments

The Company's Directors report that the Company currently has in its portfolio a project

under construction, Parnaíba II. There are no plans for new investments in the short term.

Parnaíba II

The investments made and planned can be summarized in the tables below:

Operational Capex Performed (1) (2) (in thousands of R$)

2010 2011 2012 2013 2014E TOTAL

0 22,082 455,764 684,047 361,000 1,522,893

(1) Including taxes and contingencies.

(2) Not including interest during construction and reserve account for the debt service.

60

Disbursement Curve (%) and Total Estimated Capex (1) (2) (3) (in thousands of R$)

2010A 2011A 2012A 2013E 2014E TOTAL

0.00% 1.45% 29.93% 44.92% 23.70% 1,522,893

(1) Expected values in nominal terms.

(2) Contingencies budgeted and not used will be transferred to the budget of the following

year.

(3) Includes investments for 100% of the project.

(ii) Sources of investment financing

Parnaíba II

The Company Management states that in the fourth quarter of 2013, the maturity short-

term debt (bridge loan) contracted with Itaú BBA, CEF and BNDES was postponed. This

contracting aims to cover the financial obligations of the venture, in accordance with the

shareholder’s leveraging expectation, until the closing of the long-term debt scheduled for

the third quarter of 2014. The following table summarizes the conditions and stage of the

debt contracted as of December 31, 2013:

Amount Maturity Cost

BNDES R$280.7 MM 06/15/2015 TJLP + 2.4% p.a.

Itau BBA R$200.0 MM 12/30/2014 CDI + 3% p.a.

CEF R$280.0 MM 12/30/2014 CDI + 3% p.a.

Total R$760.7 MM

(iii) Material current and expected divestiture

The Company Management states that no capital divestiture has been made for the last

three financial years ended December 31, 2013, 2012 and 2011, as well as there is no

capital divestiture in progress.

(b) Provided that it has already been disclosed, indicate the acquisition of plants,

equipment, patents and other assets that may significantly influence the Company’s

production capacity

N/A

(c) New products and services

N/A

(i) Description of current research studies already disclosed

The Company seeks to develop all its projects in a sustainable manner, aiming at maximum

energy efficiency at low costs and, while preserving the environment. Thus, the Company

continually devotes to the acquisition, research and development of clean technologies and

environmentally-sustainable projects. In the R&D field, the Company develops several

projects, some of them are being negotiated and contracted, and others are being

implemented.

(ii) Total amount spent by the issuer on research for development of new products and

services

In each of the financial years ended December 31, 2011, 2012 and 2013, the Company

invested R$0.4 million, R$0.1 million, and R$4.8 million respectively in research and

development of new technologies.

(iii) Projects in progress already disclosed

61

An agreement was entered into with COPPE-UFRJ to create a Center for Research in Energy

Generation. The primary purposes of the new center will be the conduction of research and

technological development in energy generation and qualification and training of people in

the sector, and the construction of laboratories to physically support the analyses and

studies planned is also expected. COPPE-UFRJ is also a partner of the Company and of the

University of Tsingua, in China, for joint studies of control and storage of CO2, among

others.

(iv) Total amount spent by the issuer on developing new products or services

The Company did not incur expenses relating to developing new products or services.

10.11 - Other factors with significant influence

The Company Management states that there are no other factors that significantly

influenced the Company’s operating performance and that have not been identified or

commented in the other items of this section “10”.

62

ANNEX II

ITEM 13 OF THE REFERENCE FORM

(Additional information related to the proposed compensation of the management)

13.1 - Description of compensation policy or practice, including non-statutory

board members

(a) Objectives of compensation policy or practice

Our compensation strategy is in line with the market’s best practices and designed to

ensure our competitiveness in relation to our key rivals and majors operating in Brazil. The

main objective is to reward professionals for their performance ensuring the company

evolves as per the strategic planning we have defined and in alignment with short-,

medium- and long-term shareholder returns. We thus encourage improved management

and attract, motivate and retain highly qualified executives, aligning their interests with

those of shareholders

(b) compensation - breakdown

(i) description of components of compensation and their objectives

Management’s compensation policy consists of (i) a fixed component, the maximum

amount being set annually by general meetings (administrators) and by the Executive

Board (non-statutory board), which depending on the case, it may include direct or indirect

benefits; (ii) a variable component; and (iii) a share based component - stock options - to

purchase or subscribe our shares (“Stock Options”). Each body will have compensation

broken down as described in the items below.

All these components of compensation are intended to enhance teams’ performance, attract

highly qualified professionals for our management, and retain them.

Board of Directors

Fixed Compensation

As of May 2012, as decided by the 2012 annual general meeting, members of the board of

directors have been entitled to fixed monthly compensation (fees) with the purpose of

recognizing and reflecting the value of the position internally and externally. From the Fiscal

Year of 2013, it was deliberated that the Board of Directors would be eligible only for Fixed

Compensation and Long-Term Variable Compensation based on company shares.

Variable Compensation

Short Term

Until April 2012, the short-term remuneration of the Board of Directors was paid upon

attendance of board meetings.

Long term - Compensation based on company shares

Share-based compensation through options to buy or subscribe company shares, which

may be granted in two ways:

(i) Through the “Shareholder Plan”, i.e. options granted by the Co-controlling

Shareholder Eike Fuhrken Batista with its own shares, therefore not involving any

issue of new shares and consequently not causing dilution of other shareholders’

equity. These options are granted in favor of certain members of the executive

board and board of directors of the company. With the change of control of the

Company during the financial year of 2013, new grants of options of the Shareholder

Plan were suspended and the current beneficiaries are serving periods of finalization

of contracts still in effect.

63

(ii) Through annual stock option plans (“Company Plans”), under the “program

granting options to buy or subscribe the company’s common shares”, the latest

amendment and consolidation of which was voted at the general meeting held on

January 26, 2012 (“Program”).

The Company’s Program and the Shareholder’s Plan aim at stimulating Managers, key

employees and staff to conduct our business successfully, encouraging an entrepreneurial

and results-oriented culture, and aligning Management’s interests with those of our

shareholders.

For more information, see item 13.4 of the Reference Form.

Statutory and Non-Statutory Officers

Fixed Compensation

Statutory and Non-statutory Management’s fixed monthly compensation is determined in

accordance with the responsibilities of each position and in line with best market practices.

When appropriate, this compensation may be supplemented by direct or indirect benefits as

follows: medical assistance, dental assistance, life insurance, supplementary life insurance,

meal voucher and food voucher. Fixed compensation is intended to compensate

directors/officers for their work in accordance with their activity and seniority.

Variable Compensation

Short Term

Statutory and Non-Statutory Management’s short-term variable compensation consists of

an annual amount based on the extent to which company targets are reached. Its aim is to

provide compensation for results reached by statutory and non-statutory management in

accordance with their performance and returns earned for our company.

Long term - Compensation based on company shares

Share-based compensation through options to buy or subscribe company shares (“Stock

Options”), which may be granted in two manners: by the Shareholder or Company Plan in

the scope of our company stock option plan as described above.

The Company’s Program and the Shareholder’s Plan aim at stimulating Managers, key

employees and staff to conduct our business successfully, encouraging an entrepreneurial

and results-oriented culture, and aligning Management’s interests with those of our

shareholders.


Fiscal Council

Fixed Compensation

Our fiscal council is not permanent, therefore fiscal council members, when installed, will

receive fixed monthly payments (fees) equivalent to 10% of the average assigned to

management pursuant to Law 6404/76.

Audit Committee

Fixed Compensation

Audit Committee member compensation consists of a fixed monthly amount (fee) that

reflects responsibilities assumed, time devoted to company business and the professional

competence of its members. It is intended to compensate the results achieved according to

their performance and the return for the Company.

64

(ii) what is each component’s proportion of total compensation

Each component’s proportion of total compensation in FY 201 was as follows:

Board of

Directors

Statutory

Management

Audit

Committee

Fiscal Council

Fixed Compensation

Salary or withdrawal 81.5% 7.4% 100% 0%

Benefits 0.0% 0.3% 0% 0%

Others 7.9% 1.7% 0% 0%

Variable Compensation 0.0% 0.9% 0% 0%

Compensation based on company

shares

Shareholder Plan 5.1% 89.7% 0% 0%

Company Program 5.5% 0.0% 0% 0%

Total 100.0% 100.0% 100% 0%

(iii) methodology used for calculation and adjustment of each component of

compensation

Management compensation is benchmarked against market practices, taking into account

the practices used by peer companies with similar size and characteristics, as well as

internal references, which are analyzed on a regular basis. In the case of the statutory

board, it is also based on merit and international competitiveness.

There is no specific methodology for adjustment each of the components of compensation.

(iv) reasons for composition of compensation

The composition of compensation aims to reflect the responsibility involved in each

position, while maintaining competitiveness in the market. We aim to encourage improved

management, and to attract and retain managers while aligning their interests with those

of shareholders’ by sharing risks in long-term incentives Various components of

remuneration are practiced for the Statutory Board using various components of

remuneration and fixing the greater portion of compensation through stock-based

compensation (grant of Options under the Shareholder Plan). On the other hand, for the

members of the Board, the use of components of varying remuneration is practiced and

fixing the greater portion of compensation occurs through fixed remuneration as shown in

the table above.

(c) Key performance indicators taken into account to determine each

component of compensation

To determine fixed and variable compensation for executive board members, we uses

market surveys as benchmarks, as well as merit and the extent to which company targets

are met. Compensation of members of the board of directors and committees is also based

on market parameters. Performance is not monitored by indicators. In relation to share-

based compensation (stock options), management compensation reflects the performance

and evolution of the value of our company’s shares.

(d) How compensation is structured to reflect the evolution of performance

indicators

Compensation is determined from market surveys to define amounts and takes into

account responsibilities, time spent on duties, competence and professional reputation.

65

Share-based compensation for our company’s management is directly linked to share price,

which in turn reflects our company’s performance.

(e) How compensation policy or practice aligns with issuer’s short-, medium-

and long-term interests

Fixed and variable compensation together with share-based compensation aim to

encourage better management, and to attract and retain managers, seeking gains through

commitment to short and medium-term results.

In addition, stock options give beneficiaries an opportunity to become company

shareholders and encourage them to work to optimizing all aspects that may add to the

company’s value on a long-term sustainable basis.

(f) Existence of compensation supported by directly or indirectly controlled

subsidiaries

The stock option plan granted by the co-controlling shareholder Eike Furken Batista in favor

of certain members of management (“Shareholder Plan”), as mentioned above, grants

stock options issued by ENEVA. With the change of control of the Company during the

financial year of 2013, new grants of options of the Shareholder Plan were suspended and

the current beneficiaries are serving periods of finalization of contracts still in effect, as

mentioned previously.


(g) Existence of any compensation or benefit related to the occurrence of

certain corporate events, such as transfer of control of the issuer

Not applicable, since there is no component of management compensation related to

corporate events.

13.2 - Total compensation of the board of directors, statutory officers and fiscal

council

Total compensation stipulated for the current fiscal year (2014) – Annual Amounts

Board of Directors

Statutory Officers

Fiscal Council Total

No. of members 2.0 2.1 0.0 4.08

Annual Fixed Compensation

Salary or withdrawal 240,000.00 3,337,093.02 0.00 3,577,093.02

Direct and indirect benefits

0.00 95,014.64 0.00 95,014.64

Attending committees 0.00 0.00 0.00 0.00

Others 0.00 673,575.61 0.00 673,575.61

Description of other fixed compensation

items

No payment of INSS (social

security)

Payments to

INSS/FGTS

0.00 0.00

Variable

compensation

Bonus 0.00 0.00 0.00 0.00

Profit sharing 0.00 3,774,995.37 0.00 0.00

Share in meetings 0.00 0.00 0.00 0.00

Commissions 0.00 0.00 0.00 0.00

66

Others 0.00 0.00 0.00 0.00

Description of other variable compensation

items

0.00 0.00 0.00

0.00

Post-employment 0.00 0.00 0.00 0.00

Leaving position 0.00 0.00 0.00 0.00

Based on shares 0.00 0.00 0.00 0.00

Note

Forecast annual data for fiscal year

2014. The number of members was determined as specified by CVM Notice SEP/#01/2014.

Forecast annual data for fiscal year 2014. The number of members was determined as

specified by CVM Notice SEP/#01/2014.

There is no estimate yet of installation of Fiscal Council for fiscal year 2014. The number of members was

determined as specified by CVM Notice

SEP/#01/2014.

-

Total compensation 240,000.00 7,880,678.65 0.00 8,120,678.65

Total compensation in period ended 12/31/2012 - Annual Amounts

Board of Directors

Statutory Officers


No. of members 9.3 3.3 0.0 12.51


Salary or withdrawal 497,820.37 3,295,934.69 0.00 3,793,755.06

Direct and indirect benefits

0.00 139,205.04 0.00 139,205.04

Attending committees 47,999.98 0.00 0.00 47,999.98

Others 0.00 732,798.40 0.00 732,798.40

Description of other fixed compensation items


security)

Payments to

INSS/FGTS 0.00 0.00

Variable compensation

Bonus 0.00 0.00 0.00 0.00

Profit sharing 0.00 397,290.00 0.00 397,290.00

Share in meetings 0.00 0.00 0.00 0.00

Commissions 0.00 0.00 0.00 0.00

Others 0.00 0.00 0.00 0.00

Description of other variable compensation items

0.00 0.00 0.00 0.00



Based on shares 65,116.19 39,824,567.73 - 39,889,683.92

Note

Taking the total number of options exercised in 2013, under both the Shareholder Plan

and the Company

Taking the total number of options exercised in 2013, under both the

Shareholder Plan

The Fiscal Council has not been installed for the fiscal year 2013. The number of

members was

-

67


Board of

Directors

Statutory

Officers Fiscal Council Total

Plan. The number of members was determined as


and the Company Plan. The number of members was

determined as specified by CVM Notice SEP/#01/2014.

determined as specified by CVM Notice

SEP/#01/2014.

Total compensation 610,936.54 44,389,795.86 0.00 45,000,732.40


Board of Directors

Statutory Officers


No. of members 11.50 5.00 3.00 19.50


Salary or withdrawal 355,000.00 4,180,276.66 89,402.00 4,624,678.66

Direct and indirect benefits 0.00

177,096.06 0.00

177,096.06


Others 0.00 834,473.39 0.00 834,473.39



security)

Payments to INSS (social

security)


security)

-

Variable

compensation

Bonus 0.00 0.00 0.00 0.00

Profit sharing 0.00 0.00 0.00 0.00

Share in meetings 195,000.00 - - 195,000.00

Commissions 0.00 0.00 0.00 0.00

Others 0.00 0.00 0.00 0.00

Description of other

variable compensation items

No payment of

INSS (social security)

- - -



Based on shares 6,216,161.54 18,672,647.84 - 24,888,809.37

Note Taking the total

number of options exercised in 2012, under

both the Shareholder Plan and the Company Plan. The number of members was determined as

Taking the total

number of options exercised in 2012, under

both the Shareholder Plan and the Company Plan. The number of members was determined as

The number of

members was determined as specified by CVM

Notice SEP/#01/2014.

-

68


specified by CVM Notice

SEP/#01/2014.

specified by CVM Notice

SEP/#01/2014.

Total compensation 6,931,161.54 23,864,493.95 89,402.00 30,885,057.48


Board of Directors

Statutory Officers


No. of members 8.92 5.00 3.00 16.92


Salary or withdrawal 0.00 3,807,761.82 69,748.00 3,877,509.82

Direct and indirect benefits 0.00

173,292.35 0.00

173,292.35


Others 0.00 761,552.43 0.00 761,552.43



security)

Payments to INSS (social

security)


security)

Variable compensation

Bonus 0.00 0.00 0.00 0.00

Profit sharing 0.00 0.00 0.00 0.00

Share in meetings 395,000.00 0.00 0.00 395,000.00

Commissions 0.00 0.00 0.00 0.00

Others 0.00 0.00 0.00 0.00

Description of other variable compensation items

N/A



Based on shares 9,378,841.05 27,500,757.20 0.00 36,879,598.25

Note Taking the total number of options exercised

in the fiscal year of 2011 under both the

Shareholder Plan and the Company Plan. The number of members was determined as specified by CVM Notice SEP/#01/2014.

Taking the total number of options exercised

in the fiscal year of 2011 under both the

Shareholder Plan and the Company Plan.

The number of members was determined as specified by CVM Notice SEP/#01/2014.

The number of members was determined as


Total compensation 9,893,841.05 32,243,363.80 69,748.00 42,206,952.85

70

13.3 - Variable compensation of the board of directors, statutory officers, and

fiscal council

The payment of variable remuneration is scheduled only for the Statutory Officers related

to the current fiscal year (2014), as shown in the following table.

Variable compensation estimated for the current fiscal year (2014)

Board of Directors

Statutory Officers

Fiscal Council

Total

No. of members - 02 - 02

Bonus

Minimum amount estimated in compensation plan

- - - -

Maximum amount estimated in compensation plan

- - - -

Amount established in the compensation plan if the goals are achieved

- - - -

Profit sharing

Minimum amount estimated in compensation plan

- 2,642,496.76 - 2,642,496.76


- 4,907,493.98 - 4,907,493.98

Amount established in the

compensation plan if the goals are achieved

- 3,774,995.37 - 3,774,995.37

Variable compensation in period ended 12/31/2013 - Annual Amounts

Board of Directors

Statutory Officers

Fiscal Council

Total

No. of members - 1 - 1

Bonus

Minimum amount estimated in

compensation plan - - - -

Maximum amount estimated in

compensation plan - - - -


- - - -

Profit sharing

Minimum amount estimated in

compensation plan - 287,000.00 - 287,000.00


- 533,000.00 - 533,000.00


- 410,000.00 - 410,000.00

Amount recognized in Income for

the year - 397,290.00 - 397,290.00

There was no variable compensation related to bonuses or participation in results in the last

two fiscal years for members of the board of directors, statutory officers or fiscal council.

13.4 - Share-based compensation for the board of directors and statutory officers

71

(a) General terms and conditions

Stock options granted by the co-controlling shareholder Eike Fuhrken Batista

(“Shareholder Plan”)

The co-controlling shareholder Eike Batista Fuhrken granted in favor of certain members of

management of the Company, options to purchase shares held issued by the ENEVA. The

stock options granted to these professionals may be exercised in the proportion of 10% or

20% on each anniversary of their grant dates for periods of up to 10 years, as stated in the

corresponding individual grant contracts. Shares acquired by exercising these options are

subject to certain restrictions, including a ban on sale of such shares within 36 months of

signing the respective contracts. Also note that these options refer to acquisition of shares

held by the co-controlling shareholder, so if they are exercised they will not require new

shares to be issued and therefore will not result in dilution of the equity of other company

shareholders. With the change of control of the Company during the financial year of 2013,

new grants of options of the Shareholder Plan were suspended and the current beneficiaries

are serving periods of finalization of contracts still in effect, , as mentioned previously.

Company Program to subscribe or purchase ENEVA shares (“Company Program”):

The Extraordinary General Meeting held on November 26, 2007 approved a stock option

program consisting of grant of options to purchase or subscribe ENEVA common shares for

members of the board of directors, senior managers and other Company employees, as

well as those of other companies belonging to the ENEVA Group. This program was altered

and consolidated at general meetings held on September 28, 2010, April 26, 2011 and

January 26, 2012.

The latest consolidation of this program determines general guidelines to be considered by

our company’s management for options to purchase or subscribe our company’s common

shares granted to members of the Board of Directors, executive board and employees, as

well as those of other companies belonging to the Group ENEVA. These guidelines state

that:

(iii) the total number of shares allocated to the program may not exceed 2% of the total

number of shares issued by our company, not including authorized capital;

(iv) share value will be determined based on the market value of our shares calculated

as the simple average of their price over the 20 most recent trading sessions,

counted as of the date - inclusive- of the participant’s appointment, in all cases

taking the daily average price at close of trading (“Share Value”).

(v) the price for subscribing or buying shares will be calculated based on the percentage

of share value stated in the Option Agreement and will never be less than 40% or

more than 100% of said value (“Subscription Price”); and

(vi) the responsibility for administering the program was delegated to the board of

directors

Therefore, the board of directors shall:

(vii) decide issues of shares under the program (art. 168, § 1, “b” of the Law of

Corporations);

(viii) within the parameters of the program, define periodic plans (referred to in this

Reference Form as “Company Plans”);

(ix) proceed to make any alterations in relation to Company Plans currently in place;

(x) take any other steps required to manage the Company Program, as long as they do

not lead to its being altered; and

(xi) propose alterations to the Company Program to be submitted to the approval of

extraordinary general meetings.

72

The board of directors shall also decide on the opportunity and convenience of

implementing said periodic plans in each year of the program’s duration, or not doing so. If

implemented, plans must at least state: (a) their duration; (b) the maximum number of

options that may be granted under each plan; and (c) whether or not the trading of shares

acquired by the exercise of the options will be blocked, and the period stipulated for this

blocking.

On the recommendation of its president, the board of directors shall opportunely discuss

and decide: (a) proposed participants for each Plan; (b) the respective quantities of stock

options; (c) subscription or purchase prices; and (d) other conditions for acquiring the right

to exercise the options.

(b) Principal objectives of the plan

Both the Shareholder Plan and the Company Program have the following objectives: (i)

align management and shareholder interest, encourage continuous improvement of

management to boost our enterprise value and that of companies under our direct or

indirect control; and (ii) attract, motivate and retain highly qualified executives to our staff

and increase the attractiveness of the Company and ENEVA Group companies.

(c) State how the plan contributes to these objectives

Both the Shareholder Plan and the Company Program enable their beneficiaries to become

our company’s shareholders, thus encouraging them to work to optimize all aspects that

may add to the value of our company on a sustainable basis.

(d) How does the plan mesh with the issuer’s compensation policy

The Company’s compensation policy seeks to encourage the professional growth of its

managers, employees and service providers, and value their individual merit. In this sense,

the Stock Option Program is in line with the Company’s compensation policy as it allows its

managers, employees and service providers to measure their variable compensation in

accordance with their personal performance through the granting of stock options based on

that merit.

(e) How does the plan align the interests of the issuer’s management with

issuer short- medium- and long-term interests

The EBX and Company Plans stipulate the exercise of options in annual proportions for a

period of up to ten years, depending on the plan. Therefore, management’s gains are

linked to the performance of our shares until the last period for exercising options, thus

boosting management’s commitment to our company’s short-, medium- and long-term

performance.

(f) Maximum number of shares covered

Under the Company Program, beneficiaries may be granted options to purchase shares up

to the limit of 2% of the total number of shares issued by our company, computing in this

calculation all options already granted but not yet exercised.

The maximum number of shares that may be covered by the Controlling Shareholder Plan

is determined by the Controlling Shareholder itself, and does not follow a pre-established

criterion, since such plan does not involve issuing new shares and therefore will not cause

dilution of shares of other company shareholders.

(g) Maximum number of options to be granted

Under the Company Program, beneficiaries may be granted options to purchase shares up

to the limit of 2% of the total number of shares issued by our company, computing in this

calculation all options already granted but not yet exercised.

73

The maximum number of shares that may be covered by the Co-controlling Shareholder

Eike Fuhrken Batista (“Shareholder Plan”) is determined by the Co-controlling Shareholder,

and does not follow a pre-established criterion, since such plan does not involve issuing

new shares and therefore will not cause dilution of shares of other company shareholders.

(h) Conditions for acquiring shares

Once a member of management has been granted options under the Controlling

Shareholder Plan or Company Program, he or she shall: (i) remain with the company until

the date on which each portion of options vests, saving exceptions stipulated in paragraph

16 of the Program; (ii) state their wish to exercise portions within the maximum period

stipulated in the contract; and (iii) pay the exercise price set for the shares

(i) Criteria for determining acquisition or exercise price

Under the Company Program, the option exercise price will be determined based on market

value of the shares calculated by the simple average of the price of the Company’s shares

in the latest 20 trading days as of the share grant date for a given employees of the

company, in all cases taking closing prices of each trading session. The purchase or

exercise price of each share will never be less than 40% or more than 100% of the market

value of the shares. Prices may also be updated by IPCA inflation as announced by IBGE.

Under the Shareholder Plan, purchase price or exercise is determined at the discretion of

the Co-controlling Shareholder Eike Furken Batista.

(j) Criteria for determining exercise period

In the Company program, the maximum period for option exercise is stated in the

respective stock option contracts. This period shall not exceed one year as of period of

maturity of the last portion of options granted under the respective option contract.

(k) Means of payment

Subscription or purchase of stock options granted under the Program and Plan, as

applicable, must be paid cash from the beneficiary’s own funds. The same criteria apply to

stock options granted by our co-controlling shareholder Eike Furken Batista in favor of

executives.

For options granted under the Company Program, exceptionally, the Company’s board of

management may authorize Participants to pay a minimum portion equivalent to 10% of

total subscription price at the time of purchase, with the remaining 90% to be paid within

thirty days of the date of the first payment.

(I) Restrictions on transfer of shares

The Shareholder Plan does not allow trading in shares it has granted for 36 months as of

signing contracts.

Under the Company Plans, some contracts stipulate restriction on trading shares within

three years of signing the contract.

(m) Criteria and events that may lead to suspension, amendment or termination

of the plan

The occurrence of factors that cause severe alterations in the economic outlook and

compromise the Company’s financial condition may lead to modification or termination of

the Program, including in relation to plans already in place and stock options already

granted but not yet exercised. However, note that it is the incumbency of extraordinary

general meetings to approve, alter, suspend or terminate the Company’s Stock Option Plan.

74

(n) Effects of manager’s leaving issuer on rights stipulated in share-based

compensation plan

In the Company Program, dismissal cases will be treated as follows:

Dismissal for cause or upon request: (a) unvested options will be cancelled; and (b) vested

options, which were not exercised yet, may no longer be exercised e and will be equally

cancelled.

Dismissal without cause: (a) unvested options will be cancelled; and (b) vested options,

which were not exercised yet, may be exercised, provided that the conditions set forth in

the respective Stock Options Agreement are complied with, and it is hereby agreed that the

maximum term for exercise the options may be anticipated in this case, according to the

resolution of the competent agency or as set forth in the respective Stock Options

Agreement.

Dismissal for retirement for length of service or age: (a) unvested options will be cancelled;

and (b) vested option, which were not exercised yet, may be exercised within 90 days

counted from the date of approval by the National Social Security Institute (“INSS”) of the

request for retirement for length of service or age.

Permanent disability retirement: (a) unvested options will be cancelled upon termination of

the employment agreement due to the granting of permanent disability retirement, and the

Company may establish otherwise in specific cases; and (b) vested options, which were not

exercised yet, may be exercised by the disabled participant or his/her legal representative

(curator) by presenting to the Company the respective proof of granting of permanent

disability retirement issued by the INSS and respective termination of employment

agreement within 180 days counted from the date of approval by the INSS of the request

for permanent disability retirement.

Dismissal for the Participant’s death: (a) unvested options will be cancelled after the

Participant’s death, and the Company may establish otherwise in specific cases; and (b)

vested options, which were not exercised yet, may be exercised by the administrator, as

duly defined in the regular probate proceeding, by presenting to the Company the

respective administrator’s commitment agreement, as appointed by the competent court,

within 180 days counted from the appointment of the administrator by the court, or, in the

event of extrajudicial probate proceeding by the office of the notary public, it is hereby

agreed that, if the probate proceeding is not initiated within six months counted from the

date of death, the vested options will be also cancelled automatically.

With respect to the Shareholder Plan, the dismissal of the manager implies the loss of

unvested options.

13.5 - Holdings in shares, units or other convertible securities held by

management and fiscal council members - by body

ENEVA

shares

MMX

shares

MMX

debentures

OG Par

shares

OSX

Shares

CCX

Shares

Board of

Directors 155,155 277,500 137,885 139,100 50 34,305

Executive Board

485,700 1 0 1 0 0

Fiscal Council - - - - - -

75

Share-based compensation for the board of directors and statutory officers

Company’s stock option plan:

Share-based compensation estimated for the current financial year (2014)

Board of Directors Statutory Officers

Number of members - -

Grant of stock options

Grant date - -

Quantity of stock options granted - -

Final vesting date for options - -

Final date for exercising options - -

Transfer restriction period - -

Weighted average price for period:

(a) Options outstanding at beginning of year - -

(b) Options forfeited during the period - -

(c) Options exercised during the period - -

(d) Options expired during the period - -

Fair value of options on grant date(1) - -

Potential dilution if all options granted were to be exercised

- -

(1) The calculation of the fair value of options takes into account the total number of shares

included in the Company’s Stock Options Plan that may be subscribed or acquired in the

proportion of 20% per year and in the event of full option exercise.

Share-based compensation – financial year ended 12/31/2012




Grant date - -










Fair value of options on grant date(1) - -

Potential dilution if all options granted were to be - -

76



exercised



Number of members 04 -


Grant date 11/26/2007 -

Quantity of stock options granted 528,000 -

Final vesting date for options Options will be

exercised in the

proportion of 20% on each of the first five

grant-date anniversaries of the

public offering held on

December 13, 2007

-

Final date for exercising options 1 year after maturing -

Transfer restriction period none -


(a) Options outstanding at beginning of year 1.01 -




Fair value of options on grant date(1) R$16.03 -


0.02% -








Grant date 11/26/2007 -

Quantity of stock options granted 528,000 -

Final vesting date for options Options will be exercised in the

proportion of 20% on each of the first five

grant-date anniversaries of the

public offering held on

-

77



December 13, 2007

Final date for exercising options 1 year after maturing -

Transfer restriction period none -


(a) Options outstanding at beginning of year 0.96 -


(c) Options exercised during the period 0.96 -


Fair value of options on grant date(1) R$16.03 -

Potential dilution if all options granted were to be

exercised 0.02% -




Plan for Granting Stock Options by Co-controlling Shareholder Eike Furken Batista


Share-based compensation estimated for the current financial year (2014)




Grant date - -










Fair value of options on grant date - -


- -


Board of Directors Board of Directors Statutory Officers

Number of members 01 01 05

78



Grant date 04/28/2008 04/28/2008 04/28/2008

Quantity of stock options granted 2,885,400 1,295,940 17,312,640


proportion of 10%

on each of the first five grant-

date anniversaries of the public

offering held on December 13 of

each year

Options will be exercised in the

proportion of 20% on each of the first

five grant-date anniversaries of

the public offering held on December 13 of each year

Options will be

exercised in the proportion of

10% on December 13 of

each year

Final date for exercising options 1 year after maturing

1 year after maturing


Transfer restriction period None None None


(a) Options outstanding at beginning of year

R$ 0.01 R$ 0.01 R$ 0.01

(b) Options forfeited during the period

- - -

(c) Options exercised during the period

R$ 0.01 R$ 0.01 R$ 0.01

(d) Options expired during the

period - - -

Fair value of options on grant date R$15.83 R$15.83 R$15.83


None None None


1.1 Board of Directors




Grant date 04/28/2008 04/28/2008 04/28/2008



proportion of 10%

on December 13 of each year


proportion of 20%

on December 13 of each year


proportion of

10% on December 13 of

each year






(a) Options outstanding at R$0.01 R$0.01 R$0.01

79


beginning of year

(b) Options forfeited during the period

- - -


R$0.01 R$0.01 R$0.01

(d) Options expired during the

period

- - -


Potential dilution if all options granted were to be exercised None None None


Board of Directors Board of Directors Statutory Officers



Grant date 04/28/2008 04/28/2008 04/28/2008



proportion of 10% on December 13

of each year


proportion of 20% on December 13 of

each year


proportion of 10% on

December 13 of each year






(a) Options outstanding at beginning of year

R$0.01 R$0.01 R$0.01

(b) Options forfeited during the

period

- - -


R$0.01 R$0.01 R$0.01

(d) Options expired during the period

- - -


Potential dilution if all options granted were to be exercised None None None

80

13.7 - Details of outstanding options held by the board of directors and statutory

officers

Company’s stock option plan

Outstanding options at the year ended 12/31/2013


No. of members - -

Options yet to vest

Quantity - -

Vesting date - -



Weighted average price for period - -

Fair value of options on last day of period - -

Options vested - -

Quantity - -








Outstanding options at the year ended 12/31/2013


No. of members - 1

Options yet to vest

Quantity - 1,290,621

Vesting date

-

Options will be exercised in the proportion of 10% on December 13 of each

year

Final date for exercising options - 12.13.2017


Weighted average price for period - R$ 0.01

Fair value of options on last day of period

- R$ 2.92

Options vested

Quantity - 322,655

Final date for exercising options - 13.12.2014

81


Weighted average price for period - R$ 0.01


- R$ 2.92


- R$ 4,710,765.92

13.8 - Options exercised and shares delivered in relation to share-based

compensation for the board of directors and statutory officers

Company’s stock option plan:

Options exercised - Period ended 12/31/2012



Options vested

Number of shares - -

Weighted average price for period

- -

Difference between exercise price and share price for options exercised

- -

Shares delivered

Number of shares - -


- -




Options vested

Number of shares 0 -


R$0.00 -


R$0.00 -

Shares delivered

Number of shares 0 0


- -

82




Options vested

Number of shares 35,140 -


R$3.52 -

Difference between exercise price and share price for

options exercised

R$1,510,317.20 -

Shares delivered


Weighted average price for

period - -





Number of members 01 05

Options vested

Number of shares 636,092 3,816,612

Weighted average price for period R$ 0.01 R$ 0.01


R$ 6,354,559.08 R$ 38,127,953.88

Shares delivered






Options vested

Number of shares 547,740 1,731,240



R$ 6,101,823.60 R$ 19,286,013.60

Shares delivered



83


Board of Directors

Statutory Officers


Options vested ENEVA ENEVA MMX LLX

Number of shares 182,580 577,080 10,640 10,640


R$ 0.01 R$ 0.01 R$ 0.01 R$ 0.01

Difference between exercise

price and share price for options exercised

R$ 8,488,144.20 R$

26,828,449.20 R$ 70,862.40

R$ 35,750.40

Shares delivered

Number of shares 0 0 0 0


R$ 0.00 R$ 0.00 R$ 0.00 R$ 0.00

13. 9 - Information required to understand figures disclosed in items 13.6 to 13.8

- Pricing method for shares and options

(a) Pricing model

Company’s Program

To determine the fair value of the stock options program, the Merton (1973) model, a

variant of the Black & Scholes (1973) model, which takes into account dividend payment,

was used.



To determine the fair value of the stock options program of the Shareholders Plan, the

Black & Scholes model was used.

(b) Data and assumptions used in the pricing model, including the weighted

average price of shares, exercise price, expected volatility, term of the option,

expected dividends and risk-free interest rate

Company’s Program

(i) Determination of expected volatility

The limited historical series of quotes of ENEVA shares on the stock exchange does not

guarantee a reliable projection of future volatility of prices from past data. Therefore, the

Electric Power Index-IEE, the first sector index released by BM&FBOVESPA in August 1996,

was used as a proxy. The sector indexes are designed to provide a segmented view of the

stock market behavior. The definition of time window to estimate expected future volatility

(that is, the extent of the historical data series examined) was also maintained as equal to

the T term of the option to which it will be applied in the pricing.

84

(ii) Expected Dividend Rate

ENEVA has not distributed any amounts as dividends or interest on shareholders’ equity

since its incorporation. Therefore, the hypothesis that dividends will not be paid during the

effectiveness of the stock options program was upheld.

(iii) Risk-Free Rate

Reference rates were used for adjustments of SWAP agreements with IPCA coupon,

disclosed by BM&FBOVESPA.

(iv) Program Abandonment Rate

There has been no record of abandonment by the executive officers participating in the

incentive program since its establishment.



(i) Determination of expected volatility

To calculate share volatility, in those cases where there was no historical series of share

price, an approximation through average beta of similar companies was used and applied to

the Bovespa index.

The definition of time window to estimate expected future volatility (that is, the extent of

the historical data series examined) was also maintained as equal to the T term of the

option to which it will be applied in the pricing.

(ii) Expected Dividend Rate

As of the granting date, there was no estimated payment of dividends or interest on

shareholders’ equity. For this reason, the hypothesis that no dividends will be paid during

the effectiveness of the Shareholder Plan was taken into consideration.

(iii) Risk-Free Rate

The risk-free interest rate was determined based on market projections.

(iv) Program Abandonment Rate

There has been no record of abandonment by the executive officers participating in the

incentive program since its establishment.

(c) Method and assumptions used to incorporate the effects expected from

early exercise

Company’s Program

The Company’s Program 1 sets forth that options granted under the Plan may be exercised

as follows: (i) 20% per year, at the end of years 1 to 5, counted from the execution of the

corresponding Stock Options Agreement, according to the terms and conditions established

by the Board of Directors and the terms and conditions set forth in the Stock Options

Agreements.

Options granted under the terms of the other Company’s Plans may be exercised as

follows: (i) 10% per year, at the end of years 1 to 4; (ii) 20% per year, at the end of years

5 to 7, counted from execution of the corresponding Stock Options Agreement, according to

the terms and conditions established by the Board of Directors and under the terms and

conditions set forth in the Stock Options Agreements.

85



Options granted under the terms of the Plan may be exercised as follows: (i) 10% per year,

at the end of years 1 to 10, counted from the date of ENEVA’s initial public offering,

December 13, 2007, according to the terms and conditions set forth in the respective Stock

Options Agreements.

For each of the Plans referred to above, the Company determined a period of time in which

the beneficiary may exercise the option. This period is one year, counted from the date of

maturity of the option. The Beneficiary may not exercise the option before this period.

(d) Determination of expected volatility

CIt is calculated using continuous returns of historical quotation of ENEV3 stock.

(e) If any other characteristic of the option has been incorporated into the

measurement of its fair value

All characteristics of the option were mentioned in the previous items of this Reference

Form.

13.10 - Information on pension plans provided to members of the board of

directors and statutory officers

The Company does not provide a pension plan to its managers.

13.11 Maximum, minimum and average compensation of the board of directors,

statutory board and fiscal council

Annual amounts

Board of Directors Statutory Officers Fiscal Council

12/31/2013 12/31/2012 12/31/2011 12/31/2013 12/31/2012 12/31/2011 12/31/2013 12/31/2012 12/31/2011

No. of

members 9.3 11.5 8.9 3.3 5.0 5.0 0.0 3.0 3.0

Amount of greatest

compensation

(Reais)

96,000 3,112,108 4,567,588 15,933,138 7,629,279 10,447,472 0,00 29,801 23,249

Amount of

lowest

compensation (Reais)

31,324 70,000 151,623 991,666 4,011,041 5,403,587 0,00 29,801 23,249

Average

amount of

compensation

(Reais)

65,692 602,710 1,111,668 13,451,453 4,772,899 6,448,673 0,00 29,801 23,249

13.12 - Compensation and indemnification mechanisms for management in the

event of removal from office or retirement

The Company has no contractual arrangements, insurance policies or other instruments for

structuring compensation or indemnification mechanisms for the managers in the event of

removal from office or retirement.

86

13.13 - Percentage of total compensation held by management and members of

the fiscal council who are parties related to the controlling shareholders

2011 2012 2013

Board of Directors 91% 91% 71%

Statutory Officers 32% 0% 0%

Fiscal Council - - -

13.14 - Compensation of management and members of the fiscal council, grouped

by body, received for any reason other than the office they hold

There was no compensation payment to the Board of Directors or Executive Board

members for any reason other than the position they hold.

13.15 - Compensation of management and members of the fiscal council

recognized in income of controlling shareholders, whether direct or indirect,

companies under common control and subsidiaries of the issuer

MMX/LLX/ OGX/EBX/OSX (1)

MMX/LLX/ OGX/OSX/CCX/EBX (1)

MMX/LLX/ OGX/OSX/CCX/EBX (1)

2011 2012 2013

Board of Directors 4,693,307 3,798,624 2,333,631

Executive Board - - -

Fiscal Council - - -

Others - - -

(1) MMX Mineração e Metálicos S.A.

LLX Logística S.A.

OGX Petróleo e Gás Participações S.A.

OSX Brasil S.A.

EBX Investimentos Ltda.

CCX Carvão da Colômbia S.A.

13.16 - Other relevant information

Clarifications about item 13.2 of the Reference Form

The Company wishes to clarify that in notes no. 15 to the Financial Statements of 2013 and

2012, respectively, the salary line refers to the sum total of commissions, direct and

indirect benefits and social security contributions of the executive officers and directors of

the Company and its subsidiaries. The difference between what is shown in this Reference

Form and in the financial statements of the Company arises because the financial

statements present the values assigned to the statutory and non-statutory managers of the

Company and its subsidiaries, while item 13.2 of this Reference Form requires the

submission of information concerning the Statutory Board only, as shown in the following

table:

Board of Directors

Statutory Officers

Fiscal Council

Total Reference Form

Other Directors of the Company and its subsidiaries

Total Financial Statements

( A ) ( B ) ( C ) ( A ) + ( B ) + ( C ) ( D ) ( A ) + ( B ) + ( C ) + ( D )

87

2011 515,000 4,742,607 69,748 5,327,355 5,152,819 10,480,173

2012 715,000 5,191,846 89,402 5,996,248 3,702,157 9,698,405

2013 545,820 4,565,228 0.00 5,111,048 4,338,255 9,449,304

In the case of share-based compensation, it is important to point out that the accounting

practices adopted in Brazil and the IFRS, notably CPC 10 (R1) – Share-based compensation

(equivalent to IFRS 2), paragraph 12, require the stock option granted to employees, board

members and executives to be shown at fair value, as disclosed by the Company in note

no. 22 to its 2012 financial statements, and in note no. 22, Share-based payment plan, to

the 2011 financial statements. In this note we showed two tables: the first containing the

accumulated position showing the fair value of all options not yet exercised by the

participants, and the second, showing the effect on income (expense) of the fair value of

the options ascertained for the period disclosed.

Also in the financial statements for 2013 and 2012 we presented information regarding the

accumulated position under liabilities, respectively in notes no. 15 – Related parties, item d.

This notwithstanding, the Company agrees to inform in future disclosures, in the note on

related parties, that the balances shown refer to the accumulated liability position of the

fair values calculated on the options granted.

Management Proposal of the Ordinary Shareholders' Meeting - 04.28.14*

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Transcript of Management Proposal of the Ordinary Shareholders' Meeting - 04.28.14*