Operator:

Good afternoon, ladies and gentlemen. Welcome to the conference call regarding the
earnings of 3Q14 of Light S.A. Today with us are Paulo Roberto Ribeiro Pinto, CEO
and Joao Batista Zolini Carneiro, CFO and Investor Relations Officer. We would like to
inform that all participants will have the presentation available for download on the
website http://www.light.com.br/. We also would like to inform you that all participants
are going to be in listen-only mode during the Company's presentation. We will then
start the Q&A session and further instructions will be provided. Should any participant
need assistance during this call, please press *0 to reach an operator.
Before going on, we would like to let you know that any statements made during this
conference call relative to the company's business outlook, operating and financial
transactions and goals are based on Light's management beliefs and assumptions and
rely on information currently available for the Company.
Forward-looking statements are not a guarantee of performance since they involve
risks, uncertainties and assumptions. They refer to future events, and therefore,
depend on circumstances that may or may not occur. Investors should understand that
general economic conditions, industry conditions and other operating factors could
affect the future results of the company and lead to results that will materially differ
from those in such forward-looking statements.
Now, we are going to turn the call over to Mr. Paulo Pinto to start the presentation.
Please, Mr. Pinto, you may go on.
Paulo Roberto Ribeiro Pinto, Chief Executive Officer:
Good afternoon, everyone. Once again, I would like to thank you all for joining us and
we see that quite a lot of people are following our call. Also, I would like to say that in
addition to Zolini, our Investor Relations and CFO, we have our Energy Director our
Distribution Director, Mr. Rocha, and other company officers that will be able to help us
during the Q&A session about specific points that Dr. Zolini is going to talk about today.
First, I would like to highlight the results that we had this quarter, although compared to
the previous period, we had lower results. Such results were highly influenced by a
year with very low water levels in Brazil, as you all are aware of.
But anyway, when we go and see the Company's numbers in detail, we can see that
operationally Light is presenting very good results showing growth evolution,
specifically in our largest project that is our loss prevention project. This is extremely
challenging project, the issue of losses is part of the history of 40 years of our
Company, where we are not going to be able be to settle that in one or two-year time,
but we have been working very hard on this aspect to substantially reduce our nontechnical losses.
Another important point is the level if you back in the last year, the level of interruption
indicator, and the frequency of interruption indicators. If you remember last year we did
not close the year very well in terms of DEC and FEC. We had a significant impact in
financial expenses because of DIC and FIC, and this year we are having a
performance that is much better than expected of our internal goals, fruit of major
investments that were made and also in a process of network maintenance, which was
quite intensive during the period.

Another important data that is also recurring in our Company are our default levels. The
Company this year is having much lower levels in terms of default rates. The work of
our teams in collection have been hard, and it is bringing very positive results. We just
had a tariff adjustment about a week ago and there was concern because the
readjustment generally comes with an increase in terms of load in Lights operation
area in the whole of Rio de Janeiro, but particularly in Rio, which is very sensitive in
terms of temperature, and we have observed that this is not really jeopardizing us to
meet our expected goals. Also we have to consider our OPEX, which is very much in
line with our plans for the year. in OPEX and CAPEX we have a significant share that is
concentrated to reduce losses with Aneel, which involve investments of around R$2
billion, prices of November for five years, part of that in CAPEX, part of that in OPEX.
So, these are investments that are being maintained. We had a bit of difficulty in the
1H14 because of the mobilization of teams. You know that Rio de Janeiro had very
high demand for this labor because of major events that we had in the city, but in the
2H14, we were able to put together our team, especially third parties that work in the
field, and I am very much optimistic with regard to meeting our CAPEX plans and being
in line with what we have in terms of OPEX for the periods.
This year and the quarter as well have been very difficult and not only for Light. It is
because of the water level. All distributors are having difficulties this year. Basically it is
the economic financial reflection of what the Country is going through. Light started the
year with a deficit of R$12.3 billion, and because of the work and leadership of the
regulatory agency in the process, together with representatives from the Ministry of
Treasury and Mines and Energy, those resources are being refunded. So, the
Company has been able to go back to its normal situation, economically and financially
speaking. It is important to highlight here that R$2.3 billion is basically 2.5x the EBITDA
of the distribution company.
We started the year with very low expectations and now we are probably going to close
the year having all this amount back to us, except for R$200 million that are
incorporated in the CVA, which is part of the tariff readjustment for November. Of
course we are waiting for the evaluation for 2015, but 2014, with regard to tariff
adjustments, we believe that everything is quite well balanced.
Another positive point is with regard to the change to IFRS that will enable the
distribution companies as a whole to be able to consider CVA in their balance sheet
regardless of a financial realization by means of tariff, and that will also leverage our
results for the end of the year.
Although we have always considered CVA in our results, and the market as well, now it
is going to be a definite part of our result. And also this has an impact on our EBITDA.
Still talking about EBITDA, we believe that other distributors have had some issues in
terms of leverage levels. In our case, specifically, our tariff readjustment because of the
decrease of WACC something like R$250 million of reduction, and for the purposes of
evaluation of risks and indebtedness, we have a multiplication of three.
So, we are talking about the loss of EBITDA of R$750,000 and that brought difficulty for
Light to continue with its program, taking into consideration our level of indebtedness.
But in the past quarter, we started negotiating our covenants from 3 to 3.75. This
operation is almost completed. And now with 3.75% we just have to adjust our leverage
levels to this new reality of 3.75. All that basically because of the readjustments that we
had in the tariff in the third cycle, and our objectives in our negotiations with the
regulatory agency is that in the fourth cycle, that is for next year, we can have a review

of this WACC and bring distributors in terms of the generation of EBITDA to a more
reasonable level than we have today.
I am not going to extend myself. I think that now it is important to hear our office Zolini
to give you details about our statements. I am going to be here following the
conference call together with the others in the Q&A session. I just wanted to briefly
address this situation that we are experiencing today, and say that despite the situation
we find ourselves today, government actions, especially from the regulatory agency,
have been very important in the search for a solution regarding the tariff deficit.
And just to close, as for the readjustment, it is important to mention that of the 19
nominal readjustment approved by Aneel, 0.6% remained in Light. That means that all
the rest of the readjustment was to meet residues resulting from the situation of the
sector tariff deficit. As I mentioned before, about R$200 million is a part that was
incorporated in the CVA, and will be incorporated to the tariff in November, 2014.
Now, I am going to turn the call to Zolini.
Joao Batista Zolini Carneiro, Chief of Financial Officer:
Good afternoon, everyone. I would like to start the presentation with the highlights on
page one of the slide presentation deck.
Operating highlights, I would like to draw your attention to the energy consumption that
fell by 1.8% in this quarter over 3Q13, reflecting again the retraction that we had in the
industrial segment of 13%. Later on, in the presentation we are going to see that other
sectors, residential and commercial had positive results and also year-to-date
consumption continues above 3%. As for non-technical losses that the CEO
mentioned, 41.3% in 12 months closed in September 2014, which accounts for a 0.6
p.p. decrease compared to the 12 previous months, June to June.
And if we compare to the months closed in September 2013, a reduction of 2.4 p.p.
Collection rates in the quarter was 102%, again reflecting the receiving of payments in
reinvestment. Provision for bad credit is an indicator that we have been reducing
quarter-on-quarter. Now, it is 1.6% of gross billed energy, DEC and FEC again, as our
CEO mentioned, a substantial improvement, beyond our goals, 35% DEC and 26%
FEC, result of preventative maintenance and investments that we have had in our
network.
Financial highlights, consolidated net revenue grew by 1.5% over 3Q13, with R$1.581
billion. Consolidated EBITDA reached R$183.6 million, below the 3Q13 by 75%, much
because of the costs of purchased energy and water levels in terms of generator
companies.
So, the loss in the 3Q was R$53 million compared to net income of R$321 million in the
same period last year. Again to remind you, in the 3Q13 we had results that were much
impacted by the receiving of R$306 million of investments in the ACR Account Funds
cover for energy costs in previous quarters. Therefore, there is a great difference.
Consolidated net debt, R$5.544 billion, 6% above the previous quarter. Tariff
readjustment also mentioned by our CEO, 19.3% as of November 7th, 2014, so already
including our consumption from this date, and average impact on residential
consumers was 17.76%.

On the next slide, we have the evolution of our energy consumption quarter on quarter.
Considering since 2011 and comparing to the 3Q we had an average growth of 4.7% a
year. Therefore, the decrease of this quarter is a bit outside of our curve. Residential
commercial concentrations with more than 60% in these two segments.
On the following slide we have the growth of the markets accumulated in the 9M, again
3.2% on average of all 9M since 2011, 3.8% a year. Again, share residential
commercial does not change much being much greater than other segments.
On the next page, we have the breakdown of our market per segments. In the quarter a
growth of 2.7% in residential, quarter on quarter, 2% commercial, drop in industrial.
Other segments also with a small reduction that leads to an average reduction of 1.8%.
On the following slide, the same chart regarding the 9M of the year. So again, quite
robust that growth in residential, 8.6%. And I would say that comparatively our loss you
prevention program, if we consider in the whole of the residential segment, it is 4% of
this 8.6%. It is quite significant in the growth of the market. Commercial, a growth of
4.5% in the 9M. Industrial is still showing a reduction of 6.1% and the average is 3.2%,
up to now this year of 2014.
Next slide, collection rates. We see a total growth from 97.9% to 102%, a strong growth
in retail, which our collection main segment, more than 90% of our collection. Large
clients also with very nice rates, 103.4%. Public sector is slightly below, but today we
have very few late bills in terms of the public sector. Provision against bad credits,
quarter on quarter we go from 2% to 1.6%, against 1.9% in the 3Q12. So again, we are
getting better quarter on quarter.
On slide eight we have the breakdown of our tariff readjustment that took effect on
November 7th. The market is already aware of that, but the structural adjustment
reached 14.54%, reflecting the new cost of the purchase of energy transmission and
sector charges. Parcel B accounted for 0.58%, as our CEO mentioned. The accounts
in terms of financial accounts, CVA balance, 7.3% plus 1.31%, accounting for 8.64% in
the composition of the rate as a whole.
So, the tariff readjustment, growth number was 23.18% minus the financial additions
that will be close to 3.95%. So, the net impact for the distributors and consumers,
19.23% on average. To the right, we have the breakdown of this 19.3%, residential, we
call your attention that it is 17.76%. The other classes B2, rural, commercial and public
lighting, 21.7%, 21.5%, 22.65% and the high voltage segment and low voltage, and
others, 19%.
On the next slide, we have our loss prevention program. So, you see we have in
September, 41.3%. The reduction in 12 months is 2.4%. As we mentioned, the number
of meters installed, which is a very important part of our last prevention program
reached 570,000 meters in September 2014, an expressive growth compared to 2013,
and in communities we have a total of 131,000 meters in September 2014.
On the next page, we show our results per APZ, the evolution of each one of the APZs.
We have 26 of the 29 APZs here, 26 in which we already have results calculated. And
you see a substantial decrease in losses and significant increase in collection that goes
from 90 to 98 on average, and loss prevention from 49% to 20% on average. So, the
first levels of 10%, 11%, quite substantial.
On the next slide, going to financial results, net revenues had growth in 9M14
compared to the 9M13 of 10.8%, reproducing the growth of the market and the success

of our loss prevention program and a tariff readjustment that we had last year.
Revenues of distribution accounted for 79.4%, generation, 7.4%, and
commercialization and services, 13.2%, an always growing share.
On the next slide, breakdown of operating costs and expenses. We can see that nonmanageable costs, as it was seen in the tariff readjustment, accounts for 64%.
Manageable parts contribute with only 19.5% and generation and commercialization,
16.2%. Quarter on quarter in costs we see an increase of 4.8%, but in the 9M we had a
decrease in distribution of -0.8%.
In the table below, I highlight the reduction of provisions of bad debt, which reached
R$16 million year-to-date. PMSO, we also see a reduction of 0.5%, and in the 9M a
growth of 0.2, despite the salary readjustments etc. So, that shows our efforts to
reduce costs.
On the next slide, what we call tariff deficits, we show the impact of the items that are
not covered in our tariff, especially due to involuntary exposure and the water levels
risk. So, altogether we have R$1.082 billion in spot market involuntary exposure, and
contracts with thermal plants, R$416 million. Extra costs, we had R$1.781 billion,
reflecting the 2.4% that the CEO talked about, so in 9M we have that number, of which
R$1.556 billion were already received in the ACR account to cover for these
extraordinary costs. So, in September we had a balance of R$224 million, all of that
included in our tariff readjustment to be received in the next 12 months.
On the next slide, we have our EBITDA, again broken down in segments; generation,
commercialization and distribution in the 3Q14, much lower EBITDA, with 74% in
distribution and 26% in generation and commercialization. In the 9M we had a lower
share, 57.7% for the distribution and higher generation that used the surplus of energy
in the beginning of the year, sold at higher prices in the spot market. So, you see a
share of 42% in the in the accumulated EBITDA for 9M.
EBITDA margins for distribution reached 10% in the quarter because of all the
discussion of the cost of energy. Generation had a small margin. We had to purchase
energy in the spot market in the period, but in the 9M the margin was 62% in
generation.
On the next slide, we have the evolution of EBITDA as we usually show with CVA. So,
first in the quarter against quarter our EBITDA in the report went from R$722 million to
R$184 million, but if we were accounting for regulatory assets and liabilities, we would
have a loss of 36%, R$393 million to R$250 million, most of it in regulatory assets and
liabilities, R$67 million. Again, non-manageable costs draw our attention, reaching
R$569 million. If we consider the period of 9M this reduction of EBITDA of 35% in the
reports, and in regulatory considering assets and liabilities, a drop of only 16%, 1.95%
in regulatory assets and liabilities that are being passed on to the tariff. Nonmanageable costs had an impact of R$896 million.
These were the highlights that we had for you and now we are going to open for
questions and answers.
There are a few more slides to go. Just going on, we have net income, again, variation
in the corporate segments of a drop of 69% in 9M, and we consider regulatory assets
and liabilities, a reduction of 34%, going from R$387 million to R$254 million,
accumulated in our CVA regulatory assets and liabilities.

On the next slide, we have indebtedness. The nominal cost of our debt reached
11.27% because of the increase in the Selic interest rates, 77% of our debt in IPCA,
IPCA, 11%, TJLP, BNDES, 10% of the total. The debt profile is quite smooth along the
years and the evolution of our covenants, we reached almost 3x. in 2014 we had the
negotiation with 80% of our debt to increase covenants to 3.75% that was closed in the
quarter, in the month of September, so, 3.39% that we have now is covered by the
negotiation.
The remainder debt that still has covenants below 3.75% will be fully settled until the
end of the year, so we have already called on our debenture holders, one from Light
Energia, the other from Light SESA. And the proposal is to settle this debt in full on
December 12th.
On the next slide, we have our evolution of investments. In the 9M ended in September
2014, we reached R$630 million, against R$482 million in the 9M13, again showing
growth of 30% that reflects our investment in prevention of losses, increase of quality to
we provide good services to the market. And we see that on the chart below.
You see that most of it is to protect the Company against losses and you see the
resources coming from the tariff readjustment approved by Aneel last year, which gave
us an additional to be invested in this program. These were the highlights and now we
are going to go into the Q&A session. Thank you very much.
Pedro Manfredini, Credit Suisse:
Good afternoon, everyone. I have two questions. First with regard to your free energy
commercialization strategy in the generation side of the Company. We see that next
year is a year of uncertainty in terms of thermal generation, GSF, so I believe that part
of the energy that you still have available in the next year is going to be kept as your
water level hedge.
But looking into the future, can you think of selling part of this energy as of 2016? Is it
too early? You are waiting for what is going to happen next year and you will probably
trade this energy in the future?
And my second question is about cash management where the distribution had
substantial increase in terms of tariff readjustment in the 4Q. So, the recomposition in
the purchase of energy will really relief your working capital in the purchase of energy.
But you are expecting the 1Q, 2Q have an increase in receivables, the provision for
bad debt, and you still have to pay the dividends that were announced in the past, in
December. So what is your view in terms of cash management for the 4Q and the
1Q15? Thank you very much.
Paulo Roberto Ribeiro Pinto, Chief Executive Officer:
First of all, the commercialization strategy, I am going to turn it to Evandro, our Energy
Officer.
Evandro Vasconcelos, Chief Energy Officer:
Thanks for your question. Well, you know that in the long term, the market is very well
aware that we keep 5% in our physical guarantee for hedge. In the past two years, we
developed a project where we are going to be spending 100 megawatts a year for the
pumping system of the Company.

We have efficiency and now we have a surplus of energy to sell. Last year we decided
not to sell the surplus and leave this energy available in 2015 for hedge. So, we have
approximately 12% of our energy assured energy for water hedge next year.
In the long term, the idea is to be at the level of 5%. So, next year, we are going to see
past the rain season what the level of reservoirs is going to be like, and we are going to
decide whether we are going to sell the 7% or if we are going to keep them as hedge.
Pedro Manfredini, Credit Suisse:
OK. Thank you very much.
Joao Batista Zolini Carneiro, Chief of Financial Officer:
As for cash management, Pedro you remember that both last year and this year, our
Board of Directors approved to an extraordinary raising of funds for us to cope with
energy costs that were quite significant. So, since last year we raised funds that were
used to settle our debt with Braslight of R$1.1 billion, and the government brought most
of the resources to cover for extraordinary costs.
The same happened this year. We raised another R$1 billion, and as we showed out of
the extraordinary costs, we already received from the government R$1.6 billion. So, the
Company is in quite a comfortable cash position, and that is why we are going to
anticipate the settlement of debentures in December.
I remind you that we had the tariff readjustment as of last Friday of 19.73% on average.
So, we are expecting a much higher collection this quarter and in the month of
December. In January, with the tariff flags, we are going to have an additional of R$50
million a month, if we go to the red flag, so our cash projection is quite comfortable. If
we consider all these items, the readjustments, the flag and also the balance that we
have today.
Pedro Manfredini, Credit Suisse:
Okay. Thank you very much.
Gabriel Brilhante, Safra:
Good afternoon. I have a brief question. It is just with regards to the advancement for
the settlement in debentures. I do not know if I missed that, but what is the total
amount?
Joao Batista Zolini Carneiro, Chief of Financial Officer:
Hi, Gabriel, thanks for your question. The debentures are the seventh issue of Cielo,
R$650 million and the first issuance of Light Energy that is R$170 million, so altogether
R$820 million with some interest that has already been incurred. So, we are thinking
about R$830 million.
Gabriel Brilhante, Safra:
OK. Thank you.

Gustavo Sindereti, Ita:

Good morning, guys, thank you for the call. My question is regarding the technical
losses, I would like to understand why they have been increasing in a position to what
you had been able to achieve on the commercial losses? Thank you.
Ricardo Rocha, Chief of Distribution Officer:
The technical losses are increasing a little because of the loads that we have in low
voltage in residential and commercial customers. Well, I am going to restart the answer
because I was speaking in the wrong channel. So, the small variation that we had with
technical losses is made mostly due to the variation of our loads, especially in our
residential and commercial customers in low voltage.
Renato Gomes, Votorantim:
Good afternoon, everyone. Thanks for taking my question. I would like to understand
the level of the exposure of distribution companies for next year, what are you
expecting in terms of quotas. I would like to understand a bit more about that, and if
you could talk also about the A-1 auction.
Leonardo Morais, Market and Energy Purchase Superintendent:
Thanks for the question. Well, we are working on the A-1, the number is still not closed,
and it is probably something that is going to address our exposure. Exposure next year
will depend a lot on the purchase in the A-1 auction vis-a-vis the public hearing that is
being held about the distribution of focus.
Only after all this is defined, we will know what the exposure is going to be like. Until
then, we are working with a few scenarios, but it is still too premature to give you
numbers.
Evandro Vasconcelos, Chief Energy Officer:
Well, just to add to that, the level of exposure that we will have for next year has to do
with the release of some energy in quota, and that will depend on the policy of the
state-owned companies.
If all the generation is converted in quotas, our level of exposure is going to be very
low. Otherwise, our levels would be around 170-megawatts average. But that will
depend on the conversion into quotas of the generation that is going to be negotiated in
the concession contract.
Renato Gomes, Votorantim:
OK. Thank you very much. In the A-1 auction, do you have already an idea in terms of
surplus of energy for the auction? Do you think you're going to have enough or supply?
Evandro Vasconcelos, Chief Energy Officer:
Well, today in the market, the Brazilian market starts to show a lot more maturity. In the
past sellers of the auction were basically generators and we could map things very
easily. Today there are lots of traders in the market that may join the auction and we do
not know what their policy is going to be.

So, that depends on loss on who is going to be there, what kind of offers we are going
to have? So, today it is lot more difficult to infer what kind of offers you're going to have
in A-1 because of the amounts of traders you have in the market.
Renato Gomes, Votorantim:
OK. Thank you very much.
Bruno Silva, 3G Radar:
Thanks for the call. I would like to know a bit about Itaipu. The rate is going to be
settled for next year, and I would like to know what impact you are going to have in
terms of working capital.
ngela Magalhes Gomes, Regulation Superintendent:
This is an issue that may increase our tariffs in a relevant way. This is going to be
passed in December, but we do not know how we are going to pass on prices. It may
be Eletrobras and the government will have to decide on the impact for application as
of 2015.
The most critical scenario would be a complete passing on of the water levels risks of
the years, which would increase tariff by 50% next year and will demand a relevant
additional cash to Light. Plus we have the tariff flags, we have the additional cash, so
we have to wait a bit. I particularly believe that it is not going to be applied in full for
2015. It is going to be part of it.
Bruno Silva, 3G Radar:
So, it is going to be something along the line of what has happened in the past?
ngela Magalhes Gomes, Regulation Superintendent:
Yes, I think they will have to find a solution at the Eletrobras level, not at the distributors
level. Something that is going to be finance to Eletrobras, but without having the
passing on of prices. But we have to wait.
Bruno Silva:
OK. Thank you.
Domenica Noronha, Tempo Capital:
Just going back to the answer about technical losses, I did not understand that quite
right. You said the variation of the loads in low voltage, but with all the investments that
you have with new clients, I find it strange that technical losses have increased. And
second, as for the new areas of APZ, if you have a schedule of going up to t higher
levels of your table?
Ricardo Rocha, Chief of Distribution Officer:
Thanks for your question. Well, if you take a look at the charts when you go to
residential loads, we have a significant increase in low voltage in residential and

commercial segments. When you compare to 2013 in the 9M, you will have an
increase of 8.6% in residential and 4.6% in commercial.
So, we have a variation of technical losses in terms of the load of the system as a
whole. And this variation of technical losses was because of the increase in the loads,
especially in low voltage, this is what I meant.
Evandro Vasconcelos, Chief Energy Officer:
And just to add to that, in terms of market, and you know that our loads highly depend
on temperature.
We had January, February, March in 2014 that were very, very hot. And therefore, we
had a higher load.
Ricardo Rocha, Chief of Distribution Officer:
And remember that this is according to the load that we have in the system, the
physical load. Then we have a variation.
Domenica Noronha, Tempo Capital:
So then in the compensation, Aneel considers a level of technical losses. Doesn't it
have an impact in your compensation?
ngela Magalhes Gomes, Regulation Superintendent:
This is a risk of the company. The technical loss increases, but the regulatory rules are
flat. And then you have an impact in our results.
Murilo Vicini, JBN:
Hello, good afternoon. Thanks for the information. I would like you to talk a bit about
the regulatory work that you were expecting. If you have any signals from Aneel that it
might go down. Can you talk about that?
Paulo Roberto Ribeiro Pinto, Chief Executive Officer:
I am sorry, we still have to answer Domenica, I do not know if she is still online, and
following her questions we will answer yours. We are going to answer your question,
Domenica. About the APZs that you asked, in October, we had 33 APZs that are in
operation and probably by the end of the year, we are going to get to 37 APZs, that is
according to the previous schedule.
ngela Magalhes Gomes, Regulation Superintendent:
About WACC, our expectation is the provisional WACC that Aneel had as a public
hearing is going to increase, first because it does not make any sense given the fact
that we have much more risk to distribution than in the third cycle. So, it shouldn't be
below 7.5%, which was in the third cycle. And also if we do the math using the
methodology itself, there are issues that have to be reviewed, that should be better
addressed and that would lead to a higher WACC, so we expect it to be around 8%.
This is what we have been talking to Aneel. We already know that 7.16% is indeed
going up, according to the new calculations of the agency, and we are waiting for the
results in the end of November.

Domenica Noronha, Tempo Capital:

OK, thank you.
Vinicius Tisubone, UBS:
Thanks for the question. I would like to know what is the level of GSF that you are
expecting for the 4Q.
Eduardo Lalgaris, Bosano investimentos:
We are working with different scenarios. You have been following the market for a long
time, and in the rainy season in the southeast that is generally from December through
March is showing greater variability. So, maybe in March, the reservoirs are going to be
up 100%, because we have had that in the past, and sometimes they can go to zero.
So, this variability is huge, and we cannot work with a single scenario. So, today we
work with four different scenarios and at each scenario we try to define what actions we
are going to take.
So, we cannot give you a number. Anyone that gives you a number has very few
chances of getting it right, because the standard deviation in the southeast s huge, so
we have to work with, variability is huge and we have to work with different scenarios,
follow the reservoirs along the rainy seasons and make decisions based on that. Any
inference made now has a great uncertainty. So, we prefer not to go there. We are
working with different scenarios.
Vinicius Tisubone, UBS:
OK. Thank you very much.
Eduardo Lalgaris, Bosano investimentos:
Good afternoon, everyone, I have a question for Angela. You mentioned this WACC of
8%, is it going to be first established and then you are going to start talking about
depreciation or the final WACC would be encompassing all the effects?
ngela Magalhes Gomes, Regulation Superintendent:
Well, in fact what we did in the public hearing was exactly that we should handle things
in separate. So, we have the WACC that has to do with investments made with the
capital of the Company and third parties. And then also we have to think about what
the Company should receive because it operates the assets from third parties, 100%
depreciated.
So, this special should be a component that should be separated, which is part of the
deferred revenues of the companies. This is what we proposed that and we are waiting
for Aneels opinion. And Aneel is analyzing the proposal of ONG, and you can get on
the agencys website about the public hearing.
Eduardo Lalgaris, Bosano investimentos:
OK. Thank you very much.

Marcelo Ganen, Oceana:

Good afternoon. My question is about market growth. In the 3Q the industrial market
had a relevant drop of 13% that led to a total drop in the market of 2%. I would like to
know the main reasons for this drop in the industrial market, and how the market is
behaving in the 4Q.
Evandro Vasconcelos, Chief Energy Officer:
We had a reduction in the steel metal industry connected to our network, because
there is a project to migrate to the basic network and a process of internal coal
generation. So, this is a one factor of reduction of consumption, but most of it was a
reduction because of rearrangements in terms of the source of this industrial consumer
of power that increased internal coal generation.
Marcelo Ganen, Oceana:
Are you entitled to any kind of readjustment in Parcel B because of this kind of effect or
is it something that you have to carry until the end of the cycle?
Evandro Vasconcelos, Chief Energy Officer:
It is already part of our tariff. The industrial consumers that would migrate to the
network were already part of the calculation of the tariff, so it is already there, and the
others are not because of the current scenario. This is part of the risk of our business.
It is how it is configured now, next year things can change and increase our load again.
Marcelo Ganen, Oceana:
Okay. Thank you very much.
Operator:
There are no further questions. So, we are going to turn the call over to Mr. Pinto for
his final considerations. Please Mr. Pinto, you may go ahead.
Paulo Roberto Ribeiro Pinto, Chief Executive Officer:
Well, once again I would like to thank you all for joining us. Thanks to those that tried to
clarify their questions on our presentation. The quality of questions was very good,
which shows your interest in our Company.
Once again, I would like to reiterate our focus in the market. Light is a Company that is
a private company in the market, and it is part of our strategy to build value more and
more to our Company in the market. And therefore, transparency, good governance is
something that is very dear to us all.
And we hope to have you back here in the release of our numbers at the end of the
year, last quarter of the year, and we hope to have very good news following our
operating performance, and showing good results. Although we are going through
difficult times in terms of water levels in the Country, we want to make it sure that in
terms of our management, we are going to be working hard to deliver positive results to
investors and shareholders. Once again, thank you very much.

Operator:
Light's conference call is now closed. Please disconnect your lines, and have a good
day.

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