Rio de Janeiro, March 6, 2015. Consumption grows by 3.0% Quality indicators improve by 33.4% (DEC) and 21.1% (FEC) Total energy consumption grew by 3.0% year-on-year, totaling 6,694 in 4Q14, 2.5% higher than in 4Q13, driven by the growth of 4.9% in the residential segment and 6.0% in the commercial segment. In 2014, net revenue, excluding construction revenue, was R$8,289.9 million, an upturn of 25.6% in relation to 2013. In the quarter, also excluding construction revenue, net revenue totaled R$2,988.6 million, 75.7% above the figure recorded in 4Q13, primarily explained by the recognition of the regulatory asset or liability (CVA) balance in the distributor’s net revenue. Net revenue, excluding construction revenue and the booking of CVA, would have come to R$7,270.0 million in 2014, a 10.1% increase in relation to 2014, and R$1,968.8 million in 4Q14, a 15.7% increase in relation to 4Q13. Consolidated EBITDA 1 closed the year at R$1,809.7 million, moving up by 6.7% over 2013. In 4Q14, consolidated EBITDA was R$933.9 million, up 173.3% from 4Q13, chiefly due to the recognition of CVA balance in Light SESA and equity income gain from the dilution of the generation company’s stake in Renova Energia. Excluding these effects, EBITDA would have totaled R$1,332.4 million in 2014, down 14.1% on the adjusted EBITDA recorded in 2013, and R$288.0 million in 4Q14, a 5.5% decrease in relation to 4Q13. In 2014, net income was R$662.8 million, a 12.9% increase over 2013. In 4Q14, net income totaled R$520.1 million, moving up by 303.2% in relation to 4Q13. Excluding the recognition of CVA balance and equity income gain, net income came to R$299.1 million in 2014, a 39.1% reduction in relation to 2013, and R$45.1 million in 4Q14, a 56.8% decrease from the adjusted income recorded in 4Q13 . Non-technical energy losses in the last 12 months, calculated as a percentage of billed energy in the low-voltage market (ANEEL criterion), posted a reduction of 0.4 p.p. from 3Q14, reaching 40.9% in December 2014. The Operating Quality Indicators DEC (equivalent length of interruption indicator) and FEC (equivalent frequency of interruption indicator) came to 12.25 hours and 1 EBITDA is not a recognized measure under BRGAAP or IFRS. It is used by the Company as an additional measure of performance of its operations, and it should not be considered individually or as an alternative to net income or operating income, as a measure of operating performance, or as an indicator of liquidity. The EBITDA presented is calculated in accordance with CVM Instruction 527/2012 and represents net income +income and social contribution tax + net financial expenses + depreciation and amortization. The reconciliation is shown on Exhibit II. 4Q14 4Q13 Var. % 2014 2013 Var. % Grid Load* 9,886 9,507 4.0% 38,006 36,600 3.8% Billed Energy-Captive M arket 5,453 5,182 5.2% 21,500 20,391 5.4% Consum ption in the concession area 6,694 6,531 2.5% 26,493 25,717 3.0% Transported Energy-TUSD 1,241 1,348 -7.9% 4,993 5,326 -6.3% Sold Energy-Generation 1,119 1,245 -10.1% 4,526 4,888 -7.4% Com m ercializated Energy (Esco) 1,358 1,022 32.8% 5,338 4,155 28.5% 4Q14 4Q13 Var. % 2014 2013 Var. % NetRevenue** 2,989 1,701 75.7% 8,290 6,602 25.6% EBITDA 934 342 173.3% 1,810 1,697 6.7% EBITDA M argin** 31.2% 20.1% 11.2p.p. 21.8% 25.7% -3.9 p.p. NetIncom e 520 129 303.2% 663 587 12.9% NetDebt 6,076 4,025 51.0% 6,076 4,025 51.0% Capex 425 155 173.4% 1,054 845 24.7% * O w n Load + netw ork use ** Does notconsiderconstruction revenue Operational Highlights(GW h) Financial Highlights(R$M N)
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Rio de Janeiro, March 6, 2015.
Consumption grows by 3.0% Quality indicators improve by 33.4% (DEC) and 21.1% (FEC)
Total energy consumption grew by 3.0% year-on-year, totaling 6,694 in 4Q14, 2.5% higher than in 4Q13, driven by the growth of 4.9% in the residential segment and 6.0% in the commercial segment.
In 2014, net revenue, excluding construction revenue, was R$8,289.9 million, an upturn of 25.6% in relation to 2013. In the quarter, also excluding construction revenue, net revenue totaled R$2,988.6 million, 75.7% above the figure recorded in 4Q13, primarily explained by the recognition of the regulatory asset or liability (CVA) balance in the distributor’s net revenue. Net revenue, excluding construction revenue and the booking of CVA, would have come to R$7,270.0 million in 2014, a 10.1% increase in relation to 2014, and R$1,968.8 million in 4Q14, a 15.7% increase in relation to 4Q13.
Consolidated EBITDA1 closed the year at R$1,809.7 million, moving up by 6.7% over 2013. In 4Q14, consolidated EBITDA was R$933.9 million, up 173.3% from 4Q13, chiefly due to the recognition of CVA balance in Light SESA and equity income gain from the dilution of the generation company’s stake in Renova Energia. Excluding these effects, EBITDA would have totaled R$1,332.4 million in 2014, down 14.1% on the adjusted EBITDA recorded in 2013, and R$288.0 million in 4Q14, a 5.5% decrease in relation to 4Q13.
In 2014, net income was R$662.8 million, a 12.9% increase over 2013. In 4Q14, net income totaled R$520.1 million, moving up by 303.2% in relation to 4Q13. Excluding the recognition of CVA balance and equity income gain, net income came to R$299.1 million in 2014, a 39.1% reduction in relation to 2013, and R$45.1 million in 4Q14, a 56.8% decrease from the adjusted income recorded in 4Q13 .
Non-technical energy losses in the last 12 months, calculated as a percentage of billed energy in the low-voltage market (ANEEL criterion), posted a reduction of 0.4 p.p. from 3Q14, reaching 40.9% in December 2014.
The Operating Quality Indicators DEC (equivalent length of interruption indicator) and FEC (equivalent frequency of interruption indicator) came to 12.25 hours and 6.56 times, respectively, an improvement of 33.4% and 21.1% in relation to the same period last year.
Collections totaled 98.6% of billed consumption in 2014, down 2.0 p.p. from 2013. Provisions for Past Due Accounts (PCLD) represented 1.3% of the distribution company’s gross billed energy in 2014.
The Company closed December with net debt of R$6,076.5 million, an increase of 9.6% over September 2014. The net debt/EBITDA ratio stood at 3.70x.
On March 6, 2015, the Board of Directors proposed the distribution of R$157.4 million, R$0.7719 per share, as dividends, referring to the results of fiscal year ended December 31, 2014. This proposal is subject to approval by the Annual Shareholders’ Meeting to be called.
BM&FBOVESPA: LIGT3 Conference Call: IR Contacts:OTC: LGSXY Date: 03/09/2015 Phone: +55 (21) 2211-7392/2828/2660Total shares: 203,934,060 shares Time: 3:00 p.m. Brazil // 2:00 p.m. US ET Fax: +55 (21) 2211-2787Free Float Total: 97,629,475 shares (47.87%) Phone: +55 (11) 2188 0155 // +1 (646) 843 6054 Email: [email protected] Cap (03/05/15): R$ 2.712 milhões Webcast: ri.light.com.br Website: ri.light.com.br
Presentation of 4Q13 results (comparative period)1 EBITDA is not a recognized measure under BRGAAP or IFRS. It is used by the Company as an additional measure of performance of its operations, and it should not be considered individually or as an alternative to net income or operating income, as a measure of operating performance, or as an indicator of liquidity. The EBITDA presented is calculated in accordance with CVM Instruction 527/2012 and represents net income +income and social contribution tax + net financial expenses + depreciation and amortization. The reconciliation is shown on Exhibit II.
4Q14 4Q13 Var. % 2014 2013 Var. %
Grid Load* 9,886 9,507 4.0% 38,006 36,600 3.8%Billed Energy - Captive Market 5,453 5,182 5.2% 21,500 20,391 5.4%Consumption in the concession area 6,694 6,531 2.5% 26,493 25,717 3.0%Transported Energy - TUSD 1,241 1,348 -7.9% 4,993 5,326 -6.3%Sold Energy - Generation 1,119 1,245 -10.1% 4,526 4,888 -7.4%Commercializated Energy (Esco) 1,358 1,022 32.8% 5,338 4,155 28.5%
4Q14 4Q13 Var. % 2014 2013 Var. %
Net Revenue** 2,989 1,701 75.7% 8,290 6,602 25.6%EBITDA 934 342 173.3% 1,810 1,697 6.7%EBITDA Margin** 31.2% 20.1% 11.2 p.p. 21.8% 25.7% -3.9 p.p.Net Income 520 129 303.2% 663 587 12.9%Net Debt 6,076 4,025 51.0% 6,076 4,025 51.0%Capex 425 155 173.4% 1,054 845 24.7%* Own Load + network use** Does not consider construction revenue
Management reassessed the criterion for the presentation of contractual debt amortization with the pension plan in the cash flow statement, which led to a reclassification of the 2013 period for comparison purposes.
For more information, see Exhibit VI of this report.
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Table of Contents1. The Company..........................................................................................................................................4
2.2 Generation......................................................................................................................................142.3 Commercialization and Services......................................................................................................15
3. Financial Performance..........................................................................................................................163.1 Net Revenue....................................................................................................................................16
Consolidated......................................................................................................................................16Distribution........................................................................................................................................17Generation........................................................................................................................................18Commercialization and Services........................................................................................................18
3.2 Costs and Expenses.........................................................................................................................19Consolidated......................................................................................................................................19Distribution........................................................................................................................................19Generation........................................................................................................................................23Commercialization and Services........................................................................................................23
3.3 EBITDA.............................................................................................................................................24Consolidated.................................................................................................................................24Distribution...................................................................................................................................25Generation....................................................................................................................................26Commercialization and Services...................................................................................................26
3.4 Consolidated Financial Result..........................................................................................................273.5 Debt.................................................................................................................................................283.6 Net Income......................................................................................................................................313.7 Investments.....................................................................................................................................33
¹ The subsidiary Light SESA counts revenues and costs, with zero margin, related to services of construction or improvement in infrastructure used in services of electricity distribution.
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In 2014, , excluding revenue from construction and the booking of CVA, net revenue came to R$7,270.0 million in
2014, 10.1% higher than in 2013.
Distribution
Net revenue from distribution totaled R$3,078.7 million in 4Q14, an increase of 63.2% in relation to 4Q13. Excluding
revenue from construction, net revenue came to R$2,772.6 million in 4Q14, 82.2% up on the same period last year.
This result can be explained by: (i) the R$1,019.8 million recognition of CVA balance in the distributor’s net revenue
as of December 20144 (excluding this effect, net revenue grew 15.2% in the quarter); (ii) the 257.2% increase in
unbilled energy, provisioned for in accordance with the billing scale, due to high temperatures in December 2014;
(iii) the average tariff adjustment of 19.23% as of November 7, 2014; (iv) the 2.5% upturn in energy in the quarter.
Revenue from demand surplus and exceeding reactive energy totaled R$13.0 million this quarter and revenue from
the tariff difference related to the special treatment of non-technical losses in the concession area amounted to
R$66.4 million, both of which treated as special obligations. Although they are billed, they have not been included in
net revenue since the last tariff revision in November 2013. The distribution market consists mostly of the
residential and commercial segments, which together accounted for 61.8% of 4Q14 energy consumption and 73.6%
of sales revenue.
4 On December 10, 2014, a fourth amendment was signed to the concession contract for distribution by the subsidiary Light SESA, which ensured the right and duty that the remaining balances of any insufficiency or reimbursement of the tariff at the end of the concession will be added or deducted from the compensation amount, which allowed for the recognition of the balances of these regulatory assets and liabilities.
17
Excluding revenue from construction, net revenue from distribution came to R$7,317.8 million in 2014, an increase
of 24.1% over 2013 explained by: (i) the recognition of CVA balance in the distributor’s net revenue as of December
(excluding this effect, net revenue grew 6.8% in 2014); (ii) the increase in unbilled energy; (iii) the annual tariff
adjustment as of November 7, 2014; (iv) the 3.0% upturn in energy consumption in the year. In 2014, revenue from
surplus demand and excess reactive energy totaled R$50.2 million, while revenue from the tariff difference related to
the special treatment of non-technical losses in the concession area amounted to R$186.5 million.
Generation
Net revenue from generation totaled R$129.2 million in 4Q14, 13.0% lower than the R$148.5 million recorded in
4Q13. This reduction is explained by the decreased availability of energy for sale, in view of a larger deficit in GSF in
relation to the same period in 2013. As a result, 41.4 GWh had to be purchased on the spot market in order to fulfill
the contracts entered into in 4Q14, while in 4Q13 the generator recorded sales, net of purchases, of 113.4 GWh.
The average sale price on the free market, net of taxes, was R$109.2/MWh in 4Q14, 3.2% higher than the
R$106.1/MWh recorded in 4Q13 (weighted by the free and captive markets). After the termination of contracts in
the regulated market in December 2013, the trading company became responsible for the sale to end clients.
In 2014, net revenue from generation totaled R$601.6 million, an upturn of 7.7% over 2013, explained by the higher
availability of energy sold on the spot market in the first quarter of 2014 for an average price of R$658.3/MWh.
Commercialization and Services
Net revenue from commercialization and services stood at R$221.1 million in 4Q14, 62.6% up from 4Q13.
In 4Q14, net revenue from energy resales increased by 76.3% over 4Q13, fueled by the 32.8% year-on-year upturn in
sales volume in 4Q14 versus 4Q13, due to the reallocation of Light Energia’s terminated contracts, as the sale to end
clients started to be performed by the trading company. The average sale price, net of taxes, was R$158.1/MWh in
4Q14, versus R$118.8/MWh in 4Q13.
2014 net revenue totaled 899.2 million, 49.5% higher than in 2013, due to the substantial period increase in energy
sales volume.
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3.2 Costs and Expenses
Consolidated
In the fourth quarter of 2014, operating costs and expenses totaled R$2,611.6 million, 43.5% up year-on-year.
Excluding construction costs, consolidated costs and expenses climbed by 58.5% in relation to 4Q13, mainly due to
the higher volume of energy purchased by the distribution, generation and trading companies.
In 2014, consolidated operating costs and expenses, excluding construction costs, came to R$7,029.6 million, 32.9%
Consolidated EBITDA totaled R$933.9 million in 4Q14, 173.3% above the consolidated EBITDA reported in 4Q13. This
upturn was mainly driven by the distribution and generation segments, with respective increases of 221.0% and
63.7%. The EBITDA margin expanded from 20.1% in 4Q13 to 31.2% in 4Q14.
The 4Q14 EBITDA can be primarily explained by the booking of CVA in the distribution company’s revenue and the
equity income gain of R$143.2 million in the generation company, due to the dilution of Light Energia’s stake in
Renova Energia, from 21.9% to 15.9% of the total capital stock.
Adjusting the 4Q14 EBITDA (i) for the R$502.8 million CVA balance until September 30, 2014, and (ii) the equity
income gain of R$143.2 million, adjusted EBITDA would total R$288.0 million in 4Q14, a decrease of 5.5% in
comparison with the 4Q13 EBITDA of R$304.7 million, also adjusted for (i) CVA, and (ii) the recognition totaling
R$124.8 million related to the New Repositioning Value (VNR) in 2013.
Adjusting the 2014
EBITDA (i) for the
R$334.2 million CVA balance until December 31, 2014, and (ii) the equity income gain of R$143.2 million, adjusted
EBITDA would total R$1332.4 million in 2014, a decrease of 14.1% in comparison with the 2013 EBITDA of R$1.551,1
million, also adjusted for (i) CVA, and (ii) the recognition totaling R$124.8 million related to the New Repositioning
Value (VNR) in 2013.
5 EBITDA is not a recognized measure under BRGAAP or IFRS. It is used by the Company as an additional measure of performance of its operations, and it should not be considered individually or as an alternative to net income or operating income, as a measure of operating performance, or as an indicator of liquidity. The EBITDA presented is calculated in accordance with CVM Instruction 527/2012 and represents net income +income and social contribution tax + net financial expenses + depreciation and amortization. The reconciliation is shown on Exhibit II..
¹ 51% Light² 21.86% da Light / Considera que Renova detém 60% da Chipley, que por sua vez détem 51% da Brasi l PCH³Previsão de geração média de 15 MWm42.49% Light
2051205220502031
**Including the exercise of the option by Cemig GT for an interest of up to 50% in the
2037
20502050
20512038
2048
203220322031
2047
20372051
2032
Current Generation Park
Generation Capacity Expansion Projects
Concession / Authorization Expiration Date
20262045
34
• This project comprises the construction of the Lajes SHP, with an installed generating capacity of 17 MW, in the
old powerhouse of the Fontes Velha power plant, which was decommissioned in 1989. A Special Purpose Entity
(SPE), called Lajes Energia S.A., a closely-held company and wholly-owned subsidiary of Light Energia S.A., was
created to implement, construct, operate, and maintain the SHP. The project will not involve substantial works
related to dams, but the construction of a water main from the valve house and adjustments to the power house. In
addition to generating electric power, the SHP will directly benefit water supply in the Metropolitan Region of Rio de
Janeiro by significantly improving the reliability and operational flexibility of the Lajes Complex.
The basic project has already been approved by Aneel. In June 2013, Aneel altered the public service exploration
regime to independent energy producer. As a result, the SHP obtained a 50% reduction in TUSD and TUST fees. The
E.P.C. (Engineering, Procurement, Construction) contract was signed in August 2014, triggering the beginning of the
field activities. Operational start-up is scheduled for the first half of 2016, given that the project has already been
granted an installation license.
Guanhães Energia
• In February 2012, Light Energia acquired a 51% interest on Guanhães Energia S.A. and Cemig acquired the other
49%. Guanhães is responsible for the implementation and exploration of the following SHPs: Dores de Guanhães (14
MW), Senhora do Porto (12 MW), Fortuna II (9 MW) and Jacaré (9 MW), all of which located on the Guanhães and
Corrente Grande Rivers, in the state of Minas Gerais, with a joint installed capacity of 44 MW.
The project has been impacted by geological and environmental problems which have postponed the start-up date.
Belo Monte Hydroelectric Power Plant
• In October 2011, Amazônia Energia, owned by Light (25.5%) and Cemig (74.5%), acquired 9.77% of Norte Energia,
the consortium responsible for building and operating the Belo Monte Hydroelectric Power Plant. Located on the
Xingu River in the state of Pará, Belo Monte is the largest 100% Brazilian hydro plant and the fourth largest in the
world. It has an installed capacity of 11,233 MW and assured energy of 4,571 MW, sufficient to supply around 18
million homes. The energy generated by the Pimental and Belo Monte sites will supply the National Integrated
System through a 2,100-kilometer transmission Line to be constructed between the states of Para and Minas Gerais.
The concession for the construction of this line is held by a consortium comprising Furnas, State Grid Brazil Holding
and Eletronorte.
In November, Norte Energia concluded the concreting of the columns at the Pimental site. At the Belo Monte site,
the efforts are currently focused on the civil works required for the descent of the turbines’ pre-distributor.
35
In December, the National Water Agency (ANA) issued the Resolution 2,046 allowing the filling of the reservoir in any
month of 2015, provided that the recommendations are observed, an important landmark for the beginning of
generation at the Complementary Power House in November 2015. By December 2014, 70% of the civil works had
been concluded.
Additionally, with respect to the reports in the press in late 2014 pointing to a potential delay in the plant’s entry into
operation, Norte Energia released two official press releases stating that:
i. The generation in the Main Powerhouse of the power plant and Belo Monte, responsible for 97% of all of the
energy from the hydroelectric power plant, will begin in March 2016, which is the date set in the concession
contract;
ii. The Complementary Powerhouse (233MW), at the Pimental site, responsible for 3% of the power generation of
the Belo Monte Hydroelectric Power Plant, will begin operating in November 2015;
iii. The Company is taking and will take all reasonable steps to not be burdened by acts outside of its governance, as
they are a matter of law, which the administration cannot forgo.
iv. Independent of the request made to ANEEL to consider the facts to be without responsibility, Norte Energia has
worked tirelessly to minimize the impact of third parties on the scheduled work, in order to minimize any adverse
effects for the country and its shareholders.
Renova Energia (“Renova”)
• In July 2014, the wind farms which won Energy Reserve Auction 2009 (LER 2009), with 294.4 MW of installed
capacity, began commercial operations. Since then, their energy output has been booked in accordance with the
provisions set forth in the commercial contract entered into between Renova and the Electric Energy
Commercialization Chamber (CCEE). It is worth emphasizing that, pursuant to the contract, since the wind farms had
been ready in June 2012, they had already received the revenue from the amount of energy sold at the auction.
In September 2014, the 1st issue of non-share-convertible debentures, with security interest and an additional
personal guarantee, in two series, for public distribution with restricted placement efforts, by Renova’s indirect
subsidiary, Renova Wind Participações SA, totaling R$146.0 million, was approved. These debentures will
complement long-term financing and will be issued as infrastructure debentures, since the projects were prioritized
by the decrees published by the Ministry of Mines and Energy (MME). The funds will be allocated to the Alto Sertão II
Complex, comprising LER 2010 LEN and A-3 2011, totaling 386.1 MW of installed capacity.
On October 27, 2014, Renova’s Board of Directors held a meeting to approve Renova’s partial capital increase
totaling one billion, five hundred and fifty million, two hundred and sixty-four thousand, nine hundred and eighty-
36
three reais and nineteen centavos (R$1,550,264,983.19) through the issue of eighty-seven million, one hundred and
ninety-six thousand, nine hundred and one (87,196,901) non-par registered common shares, at an issue price of
R$17.7789 per share. As a result, Light Energia’s interest in Renova was reduced from 21.9% to 15.9% of the total
capital stock and from 32.2% to 21.2% of the total common stock, with all shares in the controlling block being
maintained.
On October 31, 2014, Renova Energia, a subsidiary of Light Energia S.A., traded at the 2014 Reserve Energy Auction
(“LER 2014”) 150.4 MW of installed capacity, corresponding to average 42.7 MW wind and solar energy. The
agreements will have 20-year duration, and energy will start to be supplied in October 2017. 43.5 MW of installed
capacity were traded, with 20.9 MW average wind energy to be generated by three wind parks, located in the state
of Bahia, by the average amount of R$138.90/MWh (reference date of October 2014). In addition, 106.9 MW of
installed capacity were traded, with 21.8 MW average solar energy to be generated by four solar parks, also located
in the state of Bahia, by the average amount of R$220.30/MWh (reference date of October 2014).
37
4. Cash Flow
The Company closed 4Q14 with a cash position of R$401.1 million, 26.6% down year-on-year. This quarter, cash from
operating activities fell by 80.2%, chiefly due to the impact from the higher cost of energy purchases of the
distribution and generation companies. In addition, there was redemption of financial investments and new funding
operations for early settlement of debentures, investments and payment of debts and dividends.
5.
Corporate Governance
R$ MN 4Q14 4Q13 2014 2013Cash in the Beginning of the Period (1) 376.2 1,787.3 546.4 230.4
Net Income 520.1 129.0 662.8 587.3 Social Contributions & Income Tax 192.8 16.4 272.3 264.8 Net Income before Social Contributions & Income Tax 713.0 145.4 935.1 852.1 Provision for Delinquency 36.3 43.3 127.5 157.9 Depreciation and Amortization 108.6 98.3 414.8 390.9
Loss (gain) on intangible sales / Residual value of disposals fixed asset 0.9 14.1
11.2 23.3
Losses (gains) on financing exchange activities 99.2 59.1 157.1 138.6 Net Interests and Monetary Variations 161.9 118.8 567.6 407.5 Braslight - 31.0 3.5 122.0 Atualization / provisions reversal 40.3 (29.4) 81.6 26.8 Equity Pikup (142.1) 2.9 (134.6) 5.5 Financial Assets of the Concession (36.4) (141.1) (68.4) (168.8) Parcel A and Other Financial AssetsOthers (46.2) (35.2) (21.6) (81.0) Subtotal (178.7) 307.2 959.7 1,874.9 Working Capital 309.2 195.1 320.8 229.8 Contingencies (28.4) (30.0) (92.7) (88.3) Deferred Taxes 233.6 116.7 216.9 109.5 Braslight (0.2) (7.1) (3.5) (10.4) CDE fund 169.0 303.4 - - Others (45.5) (43.7) (65.1) (205.1) Taxes Paid (35.7) (13.1) (157.4) (101.2) Interest Paid (295.3) (180.4) (593.7) (389.8)
Cash from Operating Activities (2) 128.0 648.0 585.1 1,419.4 Finance Obtained 788.9 9.8 1,992.8 2,444.5 Dividends (364.8) (185.1) (364.8) (259.9) Loans and financing payments (1,084.1) (149.8) (1,389.6) (1,037.4) Contractual debt amortization with the pension plan - (28.3) (1,224.7) (113.1)
Investment Activities (4) 557.0 (1,535.5) 255.9 (2,137.5) Cash in the End of the Period (1+2+3+4) 401.1 546.4 401.1 546.4 Cash Generation (2+3+4) 25.0 (1,240.9) (145.3) 316.1
38
On December 31, 2014, the capital stock of Light S.A. comprised 203,934,060 common shares, 97,629,475 of which
outstanding.
The following chart shows Light’s current shareholding structure:
On October 30, 2014, the Company’s Management elected Oscar Rodríguez Herrero as a sitting member of the Board
of Directors following the resignation of Luiz Carlos da Silva Júnior Cantídio, to complete the remainder of the
Board’s mandate, i.e. until the Annual Shareholder’s Meeting to resolve on the financial statements for the fiscal
year ended December 31, 2015.
39
6. Capital Markets
Light’s shares have been listed in the BM&FBovespa’s Novo Mercado trading segment since July 2005, therefore
adhering to best corporate governance practices and the principles of transparency and equity, in addition to
granting special rights to minority shareholders. Light S.A.’s shares are included in the following indices: Ibovespa,
IGC (Corporate Governance Index), IEE (Electric Power Index), IBrX (Brazil Index), ISE (Corporate Sustainability Index),
ITAG (Special Tag Along Stock Index) and IDIV (Dividend Index). They are also traded on the U.S. over-the-counter
(OTC) market as Level 1 ADRs under the ticker LGSXY.
At the end of December 2014, Light S.A.’s shares (LIGT3) were priced at R$17.02. The Company’s market cap (no. of
shares x share price) closed the quarter at approximately R$3,471 million.
On
November 26, 2014, Light S.A. was included, for the eighth consecutive year, in the portfolio of the Corporate
Sustainability Index (ISE) of BM&FBovespa.
The charts below give a breakdown of the Company’s free float in December 2014.
The chart below shows the performance of Light’s stock from December 30, 2013 to March 5, 2015.
Daily Average 4Q14 4Q13 2014 2013
Number of shares traded (Thousand) 678 830 828 909Number of Transactions 3,548 2,989 3,456 3,168Traded Volume (R$ Million) 13.4 16.8 16.3 17.1Quotation per shares: (Closing)* R$ 17.02 R$ 20.09 R$ 17.02 R$ 20.09Share Valuing -17.7% 19.8% -15.3% 4.0%IEE Valuing -1.6% -2.9% 3.5% -8.8%Ibovespa Valuing -7.6% -1.6% -2.9% -15.5%*Ajusted by earnings.
BM&F BOVESPA (spot market) - LIGT3
40
Dividends
On December 17, 2014, the dividends approved at the Annual Shareholders’ Meeting held on April 24, 2014 were
paid, in the amount of three hundred sixty-four million, eight hundred thirty-eight thousand, thirty-three reais and
reais and fifty-three centavos (R$32,018,793.53) corresponding to the mandatory minimum dividends, and three
hundred thirty-two million, eight hundred nineteen thousand, two hundred thirty-nine reais and eighty-one centavos
(R$332,819,239.81) related to net income for fiscal year 2013. The net amount per share is R$1.789, without the
retention of withholding tax, pursuant to Article 10 of Law 9249/95. Shares have been traded ex-dividends as of April
25, 2014.
On March 6, 2015, the Board of Directors approved the proposal to distribute R$157,422,432.59, R$0.7719 per
share, in dividends, related to the results from the fiscal year ended December 31, 2014. This amount represents a
dividend yield of 5,8% and corresponds to a payout equivalent to the mandatory minimum of 25% of the net income
for the year adjusted for the legal reserve. In accordance with the Company’s Board of Directors criterion, such
distribution is consistent with the lack of predictability of the hydrological situation and the current condition of the
Brazilian electric sector. The proposal will be submitted for approval by the Annual Shareholders’ Meeting.
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Dividends paid, dividend yield and payout
7. Recent Events
On February 5, 2015, the Extraordinary Shareholders’ Meeting and the Board of Directors’ Meeting of
the Company resolved on the election of members for the Board of Directors and Board of Executive Officers of
Light S.A., which are now composed as follows:
Board of DirectorsSitting members Alternate members
Nelson José Hubner Moreira Samy Kopit MoscovitchGiles Carriconde Azevedo César Vaz de Melo FernandesFernando Henrique Schüffner Neto Fabiano Maia PereiraMarcello Lignani Siqueira Eduardo Lima Andrade FerreiraMarco Antônio de Rezende Teixeira Rogério Sobreira BezerraAna Marta Horta Veloso José Augusto Gomes CamposFabiano Macanhan Fontes Carlos Antonio DecezaroOscar Rodríguez Herrero Marcelo Pedreira OliveiraGuilherme Narciso de Lacerda Jálisson Lage MacielSilvio Artur Meira Starling Eduardo Maculan VincentiniCarlos Alberto da Cruz Magno dos Santos Filho
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Board of Executive OfficersPaulo Roberto Ribeiro Pinto Chief Executive OfficerJoão Batista Zolini Carneiro CFO and Investor Relations OfficerAndreia Ribeiro Junqueira e Souza Human Resources OfficerAilton Fernando Dias Corporate Management OfficerLuis Fernando de Almeida Guimarães Energy OfficerCláudio Bernardo Guimarães de Moraes Business Development OfficerRicardo Cesar Costa Rocha Distribution OfficerFernando Antônio Fagundes Reis Legal OfficeLuiz Antônio Rodrigues Elias Communication Officer
At a public meeting held on February 27, the Brazilian Electricity Regulatory Agency (Aneel) approved the extraordinary average tariff increase of 22.48%, for the subsidiary Light SESA, in force as of March 2, 2015. It is worth mentioning that the residential consumers will notice a lower than the average increase, of 21.06%. The Extraordinary Tariff Revision (“RTE”) is envisaged in the distributors’ concession agreements, allowing Aneel to review their tariffs when there is a financial imbalance in the agreements resulting from changes in the concession’s non-manageable costs, such as charges and energy purchase costs. The items taken into consideration for the extraordinary readjustment of 22.48% were as follows: (i) new CDE Quotas (18.19%), and (ii) Itaipu Tariff and other Energy Contracts (4.29%).
At the Board of Directors’ Meeting held on March 6, 2014, the Annual Shareholder’ Meeting was called, to be held on April 10, 2015, to resolve on the following matters: (i) to take the Management’s accounts, to examine, discuss and vote on the financial statements referring to the fiscal year ended December 31, 2014; (ii) to resolve on the allocation of net income for fiscal year 2014; (iii) to elect and install the Fiscal Council’s members; (iv) to establish the overall annual compensation for the Management and Fiscal Council; and (v) the election of members for the Board of Directors.
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8. Disclosure Program
Forward-looking statements
The information on the Company’s operations and its Management’s expectations regarding its future performance has not been
reviewed by the independent auditors.
Statements about future events are subject to risks and uncertainties. These statements are based on beliefs and assumptions of
our Management, and on information currently available to the Company. Statements about future events include information
about our intentions, beliefs or current expectations, as well as of the Company's Board of Directors and Officers. Exceptions
related to statements and information about the future also include information about operating results, likely or presumed, as
well as statements that are preceded by, followed by, or including words such as "believes", "might", "will", "continues",
"expects", "estimates", "intends", "anticipates", or similar expressions. Statements and information about the future are not a
guarantee of performance. They involve risks, uncertainties and assumptions because they refer to future events, thus depending
on circumstances that might or might not occur. Future results and creation of value to shareholders might significantly differ
from the ones expressed or suggested by forward-looking statements. Many of the factors that will determine these results and
values are beyond LIGHT S.A.'s control or forecast capacity.
Selected Consolidated Financial Information6 - R$ million
(*) EBITDA is not a recognized measure under BRGAAP or IFRS. It is used by the Company as an additional measure of performance of its operations, and it should not considered individually or as an alternative to net income or operating income, as a measure of operating performance, or as an indicator of liquidity. The table below presents the reconciliation in accordance with CVM Instruction 527/2012:
4Q14 4Q13 Var.% 2014 2013 Var.%
A Net Operating Revenue 520,1 129,0 303,2% 662,8 587,3 12,9%
B Social Contributions & Income Tax (26,7) (18,5) 44,5% (120,3) (122,0) -1,4%C Deferred Income Tax (166,1) 2,1 - (152,0) (142,8) 6,5%
A - (B + C) EBIT 713,0 145,4 390,4% 935,1 852,1 9,7%
D Depreciation (108,6) (98,3) 10,4% (414,8) (390,9) 6,1%
E Financial Expenses Revenue (112,3) (98,0) 14,6% (459,7) (453,8) 1,3%
6 The consolidated financial statements include Light S.A. and its subsidiaries and affiliates. In these financial statements, the balances of receivables and payables, revenues and expenses between the companies were eliminated.
Consolidated - R$ MN 4Q14 4Q13 Var. % 2,014 2,013 Var. %NET OPERATING REVENUE 3,294.7 2,066.0 59.5% 9,230.4 7,422.3 24.4%
On December 10, 2014, a fourth amendment was signed to the concession contract for distribution by the subsidiary Light SESA, which ensured the right and duty that the remaining balances of any insufficiency or reimbursement of the tariff at the end of the concession will be added or deducted from the compensation amount, which allowed for the recognition of the balances of these regulatory assets and liabilities.
The Management reassessed the criterion for presenting the amortization of the contractual debt with the pension
plan in the cash flow statement. The purpose of this reclassification was to align this presentation criterion with best
corporate practices in the same sector.
The consolidated financial information for the fourth quarter of 2014 is in accordance with the new practice.
However, for comparison purposes, the adjustments are presented below:
Cash Flow - R$ MNPublished
4Q13Adjustments
Reclassified4Q13
Cash in the Beginning of the Period (1) 1,787.3 - 1,787.3 Net Income 129.0 - 129.0 Social Contributions & Income Tax 16.4 - 16.4 Net Income before Social Contributions & Income Tax 145.4 - 145.4 Provision for Delinquency 43.3 - 43.3 Depreciation and Amortization 98.3 - 98.3 Loss (gain) on intangible sales / Residual value of disposals fixed asset 14.1 - 14.1
Investment Activities (4) (1,535.5) - (1,535.5) Cash in the End of the Period (1+2+3+4) 546.4 - 546.4 Cash Generation (2+3+4) (1,240.9) - (1,240.9)
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Cash Flow - R$ MNPublished
2013Adjustments
Reclassified2013
Cash in the Beginning of the Period (1) 230.4 - 230.4 Net Income 587.3 - 587.3 Social Contributions & Income Tax 264.8 - 264.8 Net Income before Social Contributions & Income Tax 852.1 - 852.1 Provision for Delinquency 157.9 - 157.9 Depreciation and Amortization 390.9 - 390.9
Loss (gain) on intangible sales / Residual value of disposals fixed asset
23.3 - 23.3
Losses (gains) on financing exchange activities 138.6 - 138.6 Net Interests and Monetary Variations 407.5 - 407.5 Braslight 122.0 - 122.0 Atualization / provisions reversal 26.8 - 26.8 Equity Pikup 5.5 - 5.5 Financial Assets of the Concession (168.8) - (168.8) Dilution of Renova's Gain - - - Others (81.0) - (81.0) Subtotal 1,874.9 - 1,874.9 Working Capital 229.8 - 229.8 Contingencies (88.3) - (88.3) Deferred Taxes 109.5 - 109.5 Braslight (123.5) 113.1 (10.4) CDE fund - - - Others (205.1) - (205.1) Taxes Paid (101.2) - (101.2) Interest Paid (389.8) - (389.8)
Cash from Operating Activities (2) 1,306.3 113.1 1,419.4 Finance Obtained 2,444.5 - 2,444.5 Dividends (259.9) - (259.9) Loans and financing payments (1,037.4) - (1,037.4) Contractual debt amortization with the pension plan - (113.1) (113.1)