Light divulga Resultados do 3T07

Transcrição

IR Contacts
Ronnie Vaz Moreira
Vice Chief Executive
Officer and IRO
Ricardo Levy
Financial and IR
Superintendent
Net income for the first half of
2009 reaches R$290 million
EBITDA for the six-month period is R$570 million
Effective free float increases from 7.7% to 22.1% of
capital stock after sale of part of the shares held by
BNDESPar and EDF
Cristina Guedes  Light’s results at the end of 1H09 are the fruit of a combination of
IR Manager
positive and negative effects, among which the most significant are:
Phone: +55 (21) 22112650/ 2660
Fax: +55 (21) 2211-2787
www.light.com.br
E-mail: [email protected]
(i) those resulting from the operating performance (consumption and
collection growth); (ii) those arising from major macroeconomic
shifts (slower economic growth, dollar depreciation); (iii) those
stemming from regulatory impacts (review of tariff and regulatory
EBITDA last November); and (iv) those resulting from corporate
Conference Call
decisions (cash position reduction due to the R$407.9 million
dividend payment in April).
Date: 8/12/2009
Time: 10 A.M. (Brazil)  Disregarding the non-recurring effects of 1H08 and 1H09, net income
9 A.M. (US EST)
for 1H09, discussed below, would have been R$267.2 million and,
Phones:
therefore, 6.2% higher than the result of the same period of 2008.
Brazil:
 Collection in 2Q09 reached 103.4% of gross energy supply billing,
+55 (11) 2188-0188
showing strong recovery compared to 1Q09. During the last 12
USA:
months the collection rate was 97.4% of commercial billing, 0.8 p.p.
+1 (866) 890-2584
Other countries:+1 (646)
843-6045
above the index recorded in March. Cash generation this quarter
Simultaneous
translation into English
of 2Q08.
before the dividend payment was R$192.9 million more than that
 On
July
14,
2009
the
Company
published
the
notice
of
Webcast:
www.light.com.br
commencement of its secondary public distribution of shares
(Portuguese and English)
which 16,079,135 shares were held by BNDESPar and 13,391,345
issued by Light S.A., whereby 29,470,480 shares were placed, of
shares were held by EDF. The total number of shares sold
corresponds to 14.4% of the Company’s capital stock. The offering
price, determined in the bookbuilding process, was R$24.00, for a
total of R$707.3 million. With this operation, the effective free
float of shares has increased from 7.7% to 22.1% of the capital
stock.
35
Operational Highlights (GWh)
Grid Load*
Billed Energy - Captive Market
Consumption in the concession area1
Transported Energy - TUSD1
Sold Energy - Generation
Commercializated Energy (Esco)
Financial Highlights (R$ MM)
Net Revenue
EBITDA
EBITDA Margin
Net Income
Net Debt**
2Q09
7,537
4,619
5,228
1,144
1,163
140
1,273
221
17.3%
121
1,647
2Q08
Var. %
8,021
-6.0%
4,529
2.0%
5,211
0.3%
1,302 -12.1%
1,210
-3.9%
118
18.5%
1,298
334
25.8%
389
1,550
-1.9%
-34.0%
-68.8%
6.3%
1H09
16,356
9,621
10,786
2,323
2,425
252
2,711
570
21.0%
290
1,647
1H08
Var. %
16,737
-2.3%
9,351
2.9%
10,692
0.9%
2,594 -10.4%
2,421
0.2%
250
0.7%
2,613
642
24.6%
492
1,550
3.7%
-11.2%
-41.1%
6.3%
* Captive market + losses + network use
** Financial Debt - Cash
 Light posted consolidated net income of R$121.4 million in 2Q09, compared
to R$388.6 million in 2Q08, which had suffered the effects of a strong provision
reversal in the period. Disregarding the recognition of tax credits this quarter, the
Income Tax/Social Contribution effect resulting from the dollar’s depreciation on
Light SESA’s liabilities with the offshore company LIR in the periods, and the
reversion of the provision for VAT taxes (PIS/COFINS) carried out in 2Q08, net
income would have been R$93.4 million in this quarter, compared to R$142.8
million in 2Q08. Net income for the first half of 2009 was R$289.7 million.
 In the quarter, consolidated net revenue totaled R$1,273.3 million, 1.9%
more than 2Q08. This decrease is mainly the effect of the non-recurring record of
R$29.0 million related to the low-income subsidy in 2Q08. Disregarding this,
revenue for the quarter is in line with 2Q08. In the first half of 2009, net revenue
totaled R$2,710.0 million, a 3.7% increase year-on-year.
 Consolidated EBITDA for the quarter was R$220.6 million, 34.0% below
1Q08, mainly as a result of the reduction in the Company’s regulatory EBITDA due
to the tariff adjustment conducted in November 2008, which is to be expected in
the first year of each tariff cycle, when scale gains are fully passed through to
consumers, and also of the CCEE’s re-recording this quarter of R$25 million in
energy purchase referring to 1Q09. Accumulated EBITDA in 1H09 stood at
R$570.1 million, 11.2% below 1H08.
 The Company closed the quarter with net debt of R$1,647.4 million, up
15.2% compared to the end of March of 2009. This growth is explained mainly by
the decreased cash position due to the April dividend payment in the amount of
R$407.9 million. Our Net debt/EBITDA leverage index was 1.2x at quarter’s
end.1
1
To preserve comparability with the market approved by Aneel in the tariff adjustment process, the billed
energy and demand of free customers Valesul, CSN and CSA were excluded, in view of these customers’
planned migration to the core network. In 2Q09, the energy consumption of these customers totaled 395
GWh and their demand was 2,294 GW, compared to a 722 GWh consumption and 2,919 GW demand in
2Q08.
36
Release Segmentation
Light S.A. is a holding company with wholly-owned subsidiaries that participate in
three business segments: electricity distribution (Light SESA), electricity generation
(Light Energia) and electricity trading/services (Light Esco). To increase the
transparency of its results and enable investors to make a better evaluation, Light
also presents its results by business segment.
2nd Quarter 2008 Results
2Q08 and 1Q08 results were adjusted to reflect the impacts of Law 11,638/07 on
the respective results of the periods, pursuant to CVM Resolution 565/08, as well as
the reclassification of employee profit sharing (PLR) after the income tax line,
thereby no longer being classified as costs and personnel expenses. For further
information, see Appendix V of this release.

Operating Performance
Distribution
Total energy consumption in Light’s concession
2
Electric Energy Consumption (GWh)
Total Market (Captive + Free)
area (captive customers + billed free customers )
in 2Q09 was 5,228 GWh, growing 0.3% when
5,211
compared to the same period in 2008, chiefly due
to the growth in captive market consumption.
0,3%
5,228
609
681
-10,7%
4,619
4,529
2,0%
Total consumption in 1H09 was 10,786 GWh, a
0.9% increase year-on-year driven mainly by the
significant
growth
in
the
residential
2Q08
2Q09
Captive
Free
and
commercial markets due to the high temperatures of the first quarter. According to
the Energetic Research Enterprise (EPE), this performance surpasses that of the
Southeast Region, which decreased by 4.1% year-on-year.
2
To preserve comparability with the market approved by Aneel in the tariff adjustment process, the
billed energy and demand of free customers Valesul, CSN and CSA were excluded, in view of these
customers’ planned migration to the core network. In 2Q09, the energy consumption of these customers
totaled 395 GWh and their demand was 2,294 GW, compared to a 722 GWh consumption and 2,919 GW
demand in 2Q08.
37
Taking into account the energy consumed by free consumers CSN, Valesul and
CSA, consumption in this quarter was 5,623 GWh and 11,652 in 1H09.
Captive Customers
Despite the economic
crisis,
Electric Energy Consumption (GWh)
nd
2
billed
consumption
in
4,529
year-on-year,
consumption
4,619
2,2%
1,7%
1,821
1,862
primarily a result of
higher
2,0%
the
captive market grew
2.0%
Quarter
-0,1%
459
Residential
3,1%
1,452
1,477
797
459
Industrial
in the residential and
Commercial
2Q08
822
Others
Total
2Q09
commercial classes — which together accounted for 72.3% of the captive market —
as
well
as
government
consumption,
included
in
“other.”
The
increased
consumption of these classes was influenced by the higher temperature this year —
0.5º C above the 2Q08 average — despite the lower number of billing days in the
low voltage, 0.8 day.
Consumption in the residential segment, which accounted for 40.3% of the captive
market in the quarter, grew 2.2% over 2Q08. The number of residential customers
rose 1.1% to 3.7 million billed customers with average monthly consumption of
170.0 kWh/month in this quarter, compared to 168.4 kWh/month in the same
period of 2008.
Commercial segment consumption, which represented 32.0% of the captive market
this quarter, grew 1.7% year-on-year.
The captive industrial segment, which represented only 9.9% of the captive
market, was stable in relation to 2Q08 despite the effects of the economic
slowdown on the industry’s operations; heavy industry was the most impacted
segment. This year, a customer from the chemical industry that consumed an
average 10 GWh in 2008 returned from the free to the captive market.
In 1H09, the captive market’s billed consumption totaled 9,621 GWh, 2.9% more
than in 1H08. This growth is primarily a result of the strong performance of the
residential and commercial segments, which recorded billed consumption growth of
4.6% and 2.5%, respectively, compared to 1H08, representing a 250.5 GWh
increase. This performance allowed the growth of captive market in the period, fully
offsetting the 2.0%, or 18.5 GWh, decrease in industrial consumption that was an
effect of the economic slowdown.
38
Network Use3
Billed energy transported to free customers
Electric Energy Transportation - GWh
Free Customers + Utilities
and concessionaires amounted to 1,144
-12.1%
1,302
1,144
-10,7%
681
621
decline was caused by a 10.7% drop in free
customer consumption—in particular in the
-13.7%
609
GWh this quarter, 12.1% below 2Q08. This
steel industry, which was affected by the
535
international economic crisis—in addition to
the return to the captive market of a
Free
Utility
2Q08
Total
2Q09
customer
that
represented
a
monthly
average consumption of approximately 10
GWh in 2008 in 2Q09. The flow of energy supplied to the concessionaires bordering
Light’s area fell 13.7% between the periods. In 1H09, network use totaled 2,323
GWh, 10.5% below the energy transported in 1H08.
The tariff breakdown of free customers is mainly
Billed Demand (GW)
Free Costumers and Utilities
driven by contracted demand; therefore a decline
0.2%
in the volume of transported energy does not
6,062 6,075
significantly affect the revenue originating from
these customers.
6.5%
-9.2%
3,656 3,892
2,406 2,183
Billed
demand
for
free
customers
and
concessionaries corresponded to 6,075 GW this
quarter, unchanged in relation to 2Q08. Free
customer demand this quarter decreased by 9.2%
Free
Utility
2Q08
Total
2Q09
compared to the same period last year, mainly due to the fall in the contracted
demand of a major customer from the steel industry. The 6.5% increase in demand
from concessionaires offset the decrease in free customer demand. In 1H09, free
customer and concessionaire demand totaled 12,217 GW, 2.7% above 1H08 billed
demand.
The amount presented in GW is related to the annual sum of billed demand each
month, considering peak and out of peak periods.
3
To preserve comparability with the market approved by Aneel in the tariff adjustment process, the
billed energy and demand of the free customers Valesul, CSN and CSA were excluded, in view of these
customers’ planned migration to the core network. In 2Q09, the energy consumption of these customers
totaled 395GWh and their demand was 2,294 GW, compared to a 722 GWh consumption and 2,919 GW
demand in 2Q08.
39
Energy Flow
DISTRIBUTION ENERGETIC BALANCE - GWh
Position: january-june 2009
PROINFA
Residential
4,024.5
192.9
CCEAR
Light Energia
164.4
ITAIPU
(CCEE)
2,791.0
Billed
Energy
9,621.1
Own load
Light
13,218.2
Commercial
3,059.2
Required E.
(CCEE)
13,499.9
AUCTIONS
(CCEE)
6,934.3
NORTE FLU
(CCEE)
3,150.1
Industrial
891.8
Differences
Others
1,645.7
3,597.0
Basic netw.
losses
Adjustment
274.1
7.6
OTHERS(*)
(CCEE)
267.1
(*) Others = Purchase in Spot - Sale in Spot.
Energy Balance (GWh)
= Grid Load
+ Energy transported to utilities
+ Energy transported to free customers
= Own Load
+ Captive market consumption
+ Differences
2Q09
7,537
535
931
6,071
4,619
1,452
2Q08
8,021
621
1,416
5,984
4,529
1,454
Var.%
-6.0%
-13.7%
-34.3%
1.5%
2.0%
-0.2%
1H09
16,356
1,158
1,980
13,218
9,621
3,597
1H08
16,737
1,253
2,759
12,725
9,351
3,373
Var.%
-2.3%
-7.6%
-28.2%
3.9%
2.9%
6.6%
*Including CSN, Valesul and CSA
40
Electric Energy Losses
Light’s total losses totaled 6,929 GWh,
Light Losses Evolution
12 months
of 21.3% over the grid load, in the 12
21.23%
representing
14.57%
14.44%
14.36%
14.60%
14.93%
a
0.44
p.p.
increase
compared to the loss index in March of
2008.
Non-technical
losses
reached
Jun-08
4,874 GWh, growing 0.33 p.p. over the
6,929
20.79%
6,885
20.42%
6,743
20.51%
6,808
20.56%
6,791
months that ended in June of 2009,
Sep-08
Dec-08
Mar-09
Jun-09
GWh Losses
% Losses / Grid Load (Own + Transport)
Non-technical losses % Grid Load
grid load. The index was affected by a
decline in consumption of large customers (who did not present non-technical
losses), adversely impacting the grid load, which is the denominator of the index. It
is also worth pointing out that the loss over grid load index suffers the effect of the
grid load reduction.
Conventional energy recovery processes, such as the negotiation of amounts owed
by customers where fraud was detected, caused energy recovered in 1H09 to
increase 51.4% over the same period in the previous year, totaling 75.7 GWh
recovered, despite the 5.3% decrease in the number of customers normalized
between the periods, suggesting that more significant frauds are being prioritized.
Additionally, loss prevention programs generated an energy incorporation of 35.2
Recovered Energy
GWh
75.7
GWh in the first half of the year, a 139.5% increase over
the 14.7 GWh incorporated in the same period last year.
51.4%
In June of 2009, Inmetro approved the electronic meter of
50.0
one
of
Light’s
suppliers,
whose
technology
allows
centralized metering and remote management of reading,
dis- and re-connection processes. This approval is a
1H08
1H09
Energy Incorporation
GWh
35.2
1H08
1H09
fundamental step in the progress of the program for lossprevention based on new technologies. Inmetro’s delay in
approving and the conditions required for the centralized
metering system caused the initial plan to install 100,000
meters to be scaled back to 20,000. As part of the
139.5%
centralized metering system, the Company continues to
14.7
invest in network modernization by protecting 175 km of
the low voltage network in 1H09, with 850 more km to be
protected by year’s end. In 2008, 120 km were replaced.
1H08
1H09
Light believes that its continuous investment in new
41
metering and network protection technologies will result in sustainable loss
reduction.
Collection
Collection in 2Q09 exceeded 100% of
the total billed amount, reaching a
rate of 103.4% partly due to the
collection
of
debts
from
Colletion rate
R$ MM
Billing
Collection
Collection Tax
previous
invoices
related
to
2Q08
1,911
1,925
100.7%
1H09
4,162
4,037
97.0%
the
98.8%
beginning of this year. The retail
segment, with collection levels above
100%,
was
fundamental
to
1H08
3,882
3,833
98.7%
Collection rate
12 months moving average
years and also to the payment of
overdue
2Q09
1,986
2,054
103.4%
97.4%
96.6%
96.5%
the
recovery of this quarter’s global rate.
In addition to retail, the segment of
large customers including public
agencies
also
showed
collection
rates,
reflecting
focused
on
Jun-08
Mar-09
Jun-09
PDD/Gross Revenue (Billed Sales)
high
3.5%
the
success of delinquency-prevention
initiatives
Jun-07
2.9%
2.6%
both
segments. The collection rate of
the
last
12
months,
which
encompasses the economic crisis
2Q08
1Q09
2Q09
that began in September 2008,
was 97.4% of billing, 0.8% above the March index.
The provision for past due accounts (PDD) constituted in 2Q09 was 3.5% of the
gross billed energy or R$66.5 million, a decrease of 0.6 p.p. in relation to 2Q08.
The effect of the economic crisis on 1Q09 collection impacted the 2Q09 PDD, since,
according to the criteria for constituting a provision in the sector, provisions related
to past due accounts from residential
customers should be constituted 90
R$ MM
PDD
1H08
107.6
1H09 Variation
126.4
18.7
days after the due date. In the first six months of 2009, the PDD was R$18.7
million higher than the 1H08 provision, chiefly resulting from the impact of the
crisis on retail collection, primarily in 1Q09.
Operating Quality
42
A series of major investments in increasing the reliability of the distribution system
the Company began making in 2008 started to show effective results this quarter
when quality indicators returned to pre-program levels even with the increase in
the number of scheduled disconnections—necessary due to the investments made
in the network. Thus, disregarding the effect of these disconnections, the
equivalent length of interruptions (DEC) index in the first half of the year was 3.75
compared to 4.96 in 1H08, a 24.4% improvement. The equivalent frequency of
interruptions (FEC) index fell from 3.29 in 1H08 to 2.69 in 1H09, an 18.24% drop.
Investments made since 2008 in important projects like the replacement of the
conventional network with space cable (compressed MT network) and installation of
remotely commanded keys to reduce interruption times, together with a reduction
in planned disconnections, were instrumental to improving our indicators. These
investments include improving electricity supply quality, increasing distribution
network capacity and protecting the network, and amounted to R$60.7 million in
1H09, compared to R$43.9 million in 1H08. The electrical system maintenance plan
began to be monitored by a specific SAP system module, providing better
ELC / EFC the
- 12service
Months continuity.
management and positively impacting
7.81
ELC
9.13
6.03
EFC
6.03
Jun-09
Jun-08
11.35
7.81
Jun-07
ELC – Equivalent Length of Interruption per Consumption Unit (hs)
EFC – Equivalent Frequency of Interruption per Consumption Unit (n.)
Generation
Energy sold on the Regulated (ACR) and Free Contract (ACL) markets in 2Q09 was
1,013.6 GWh and 120.3 GWh, respectively. In the ACR, the volume of energy sold
was 0.8% lower than in the same period in 2008, resulting mainly from the end of
the contract for an 11.88 average MW product of the 2006/08 existing energy
auction held in 2005, resold in the ACL, which resulted in a 24.2% increase over
2Q08. The lower volume of energy sold on the spot market in 2Q09 was mainly
due to the decrease in secondary energy for sale on that market.
In 1H09 a total of 2,425.5 GWh was sold, similar to 1H08 figures.
LIGHT ENERGIA (GWh)
Regulated Contracting Environment Sales
Free Contracting Environment Sales
Spot Sales (CCEE)
Total
2Q09
1,013.6
2Q08
1,021.3
%
-0.8%
1H09
2,053.2
1H08
2,081.2
120.3
28.9
1,162.9
%
-1.3%
96.9
24.2%
206.3
207.8
-0.7%
91.8
-68.5%
166.0
132.4
25.4%
1,210.0
-3.9%
2,425.5
2,421.4
0.2%
43
Trading and Services
In the second quarter of 2009, Light Esco sold 139.7 GWh directly, an 18.5%
increase in trading volume compared to 2Q08. This increase is explained by the
greater availability of energy for resale at the trading company due to the
expansion of its contract portfolio.
In addition to direct sales, Light Esco also continued to provide consulting services
and represent free clients before the CCEE. These activities included operations of
around 262.0 GWh and 8 clients.
In 1H09, Light Esco traded 251.5 GWh, a 0.7% increase in relation to the same
period of 2008. This result reflects the increase in traded energy in 2Q09 when
compared to 2Q08, offsetting the smaller volume of energy traded in 1Q09.
Currently, Light Esco has 55 energy sale customers, 47 of which use the company’s
trading services and 8 of which use its consulting and contract intermediation
(brokerage) services. In June 2008, it had 44 customers.
As to the service activity, Light Esco has been developing major projects for setting
up service drops, substations, cold water centers and energy efficiency projects for
customers such as TV Globo, Fiocruz, and the Academia Brasileira de Letras, among
others.
Volume (GWh)
Trading
Broker
Total
2Q09
139.7
262.0
401.7
2Q08
117.9
401.8
519.7
Var. %
18.5%
-34.8%
-22.7%
1H09
251.5
535.5
787.0
1H08
249.7
723.8
973.5
Var. %
0.7%
-26.0%
-19.2%
44

Financial Performance
Net Revenue
Consolidated
Net operating revenue totaled R$1,273.3 million in 2Q09, 1.9% lower than in 2Q08
primarily as a result of the record in 2Q08 of R$29.0 million referring to the lowincome subsidy. Positive contributions to net revenue in the quarter were the
increases of 9.8% in the generation segment revenue and of 15.1% in the energy
trading operation’s revenue.
Net Revenue (R$ MM)
Distribution
Billed consumption
Non billed energy
Network use (TUSD)
Short-Term (Spot)
Others
Subtotal (a)
2Q09
1,144.3
(47.4)
85.5
7.7
13.5
1,203.5
2Q08
1,142.9
(34.2)
106.1
5.0
15.0
1,234.8
Var. %
0.1%
38.8%
-19.4%
52.8%
-10.5%
-2.5%
1H09
2,387.3
(20.3)
172.6
7.7
26.0
2,573.3
1H08
2,272.9
(41.9)
202.7
6.8
28.2
2,468.8
Var. %
5.0%
-51.5%
-14.9%
12.1%
4.2%
Generation
Generation Sale(ACR+ACL)
Short-Term1
Others
Subtotal (b)
66.8
5.3
1.3
73.4
62.6
3.2
1.1
66.9
6.7%
65.1%
26.0%
9.8%
131.9
10.5
2.7
145.1
139.5
11.0
2.1
152.6
-5.5%
-4.1%
25.2%
-4.9%
Comercialization
Energy Sales
Others
Subtotal (c)
16.6
2.5
19.1
11.7
4.8
16.6
41.6%
-49.1%
15.1%
30.1
6.9
37.0
39.6
6.9
46.5
-23.9%
-1.0%
-20.5%
Others and Eliminations (d)
(22.7)
(20.7)
(44.5)
(54.6)
Total (a+b+c+d)
1,273.3
1,297.6
-1.9%
2,710.9
2,613.3
3.7%
(1) Balance of the settlement on the CCEE
45
Distribution
Net Revenue by Class - Captive
R$ MM - 2Q09
Net distribution revenue was R$1,203.5 million in the
quarter, 2.5% below net revenue in 2Q08. This result
Others
14%
was mainly impacted by the record of R$29.0 million
in
2Q08
referring
to
the
low-income
161
subsidy.
Disregarding this, revenue this quarter would be in
376
C ommercial
33%
the
growth
of
nearly
2.0%
in
106
Industrial
9%
line with that of the same period last year.
Despite
Residential
44%
502
Electric Energy Consumption GWh - Captive
2Q09
captive market consumption, revenue was
affected by the fall in energy and demand
Others
18%
contracted by free and captive customers in
822
1,477
function of the effect of the economic
slowdown on their operations. Residential
C ommercial
32%
and commercial consumption accounted for
1,862
Residential
40%
459
Industrial
10%
77% of captive market revenue.
The distribution company’s net revenue in 1H09 totaled R$2,573.3 million, up 4.2%
year-on-year chiefly because of strong market growth in 1Q09.
It is worth mentioning that, as the market approved by Aneel in the tariff
adjustment process did not take into consideration the energy and demand of CSN,
Valesul and CSA due to their planned migration to the core network, any variation
in the market of these customers will have a neutral effect on the distribution
company’s total revenue. Given the lower than expected consumption of CSN and
Valesul in 1H09, a regulatory asset was formed and distributed among other
revenue lines that fully offsets this reduction.
Generation
Net revenue in the quarter was R$73.4 million, 9.8% higher than in 2Q08. This
increase was mainly due to the adjustment of energy sale contracts for inflation
and the re-contracting of part of the energy from the ACR to the ACL for a higher
price, offsetting the decrease in the volume sold on the spot market.
In 1H09, net revenue was R$145.1 million, 4.9% lower than in 1H08 as a result of
the lower secondary energy sales volume on the Free and Regulated Contract
markets, which together recorded 1.3% decrease.
46
Net revenue in the quarter was R$19.1 million, up 15.1% over 2Q08. This increase
is primarily the result of this quarter’s 18.5% rise in the volume of trading sales
when compared to 2Q08.
In 1H09, net revenue decreased 20.5% in comparison to 1H08 chiefly due to the
larger allocation of energy in the first quarter of 2008, whereas in 2009 this
allocation was bigger in the second quarter. In addition to the effect of the allocated
volume, this quarter’s revenue was also affected by the recorded CCEE average
energy price (spot), which fell 64.9% year-on-year.
Costs and Expenses
Consolidated
Consolidated Operating Costs and Expenses
In the second quarter of 2009, operating costs and expenses were 8.2% higher
than in 2Q08, in particular due to the 13.0% increase in non-manageable
distribution costs and expenses. Another factor that had an impact on costs and
expenses this quarter was the R$10.1 million provision for the Stock Option Plan,
which affected Light S.A.’s personnel account; in 2Q08 the provision was
Operating Costs and
Expenses (R$ MM)
Distribution
Generation
Comercialization
Others and Eliminations
Consolidated
2Q09
(1,092.6)
(31.6)
(15.7)
11.1
(1,128.8)
2Q08
(1,025.1)
(30.2)
(10.2)
21.9
(1,043.5)
(%)
6.6%
4.7%
54.5%
-49.3%
8.2%
1H09
(2,219.7)
(64.7)
(30.9)
22.1
(2,293.1)
1H08
(2,087.0)
(60.9)
(34.8)
52.3
(2,130.4)
Var. %
6.4%
6.1%
-11.2%
-57.8%
7.6%
concentrated in the 4th quarter.
Distribution
In 2Q09, costs and expenses of the energy distribution business grew 6.6% over
2Q08 as shown in the table below. The increase was caused by a 13.0% increase in
non-manageable, pass-through costs and expenses in the tariff in spite of an 8.8%
decline in manageable costs and expenses.
47
Costs and Expenses (R$ MM)
Non-Manageable Costs and Expenses
Energy Purchase costs
Purchased Energy
Formation Energy CVA
Costs with charges
Charges
Formation Charges CVA
Amortization CVA
Others (Mandatory Costs)
Manageable Costs and Expenses
PMSO
Personnel
Material
Outsourced Services
Others
Provisions
Depreciation
Total Costs and Expenses
2Q09
(816.0)
(647.2)
(722.2)
74.9
(124.0)
(125.2)
1.2
(39.3)
(5.5)
(276.6)
(121.7)
(46.2)
(3.0)
(61.9)
(10.6)
(85.0)
(69.9)
(1,092.6)
2Q08
(722.0)
(577.2)
(562.1)
(15.2)
(86.6)
(131.8)
45.1
(52.5)
(5.6)
(303.2)
(117.9)
(43.7)
(3.4)
(61.4)
(9.4)
(111.3)
(73.9)
(1,025.1)
(%)
13.0%
12.1%
28.5%
43.2%
-5.0%
-97.4%
-25.2%
-2.1%
-8.8%
3.2%
5.7%
-11.2%
0.8%
12.9%
-23.6%
-5.5%
6.6%
Var. %
1H08
(1,512.0)
11.8%
(1,212.7)
9.5%
(1,218.2)
19.7%
5.5 2262.9%
(218.7)
24.1%
(275.6)
3.9%
56.9
-73.9%
(70.6)
14.2%
(10.0)
11.2%
(575.0)
-8.0%
(241.0)
-1.1%
(92.2)
1.3%
(7.0)
-2.3%
(119.2)
-3.4%
(22.5)
2.0%
(187.5)
-19.7%
(146.6)
-4.5%
(2,087.0)
6.4%
1H09
(1,690.8)
(1,327.7)
(1,457.7)
130.0
(271.4)
(286.2)
14.9
(80.6)
(11.1)
(528.9)
(238.4)
(93.4)
(6.9)
(115.2)
(22.9)
(150.6)
(140.0)
(2,219.7)
Non-Manageable Costs and Expenses
In the second quarter of this year, non-
Purchased Energy - R$ MM
2nd Quarter
manageable costs were R$816.0 million,
representing a 13.0% growth year-on-year.
Energy
purchase
costs
rose
722
12.1%
3.7%
562
compared to 2Q08. It is important to point
21.7%
out that R$25 million related to energy
33.8%
purchase expenses referring to 1Q09 was
40.8%
recorded this quarter, due to CCEE’s re-
2Q08
recording. Disregarding this amount, energy
AUCTIONS
1.5%
22.3%
33.1%
43.1%
2Q09
NORTE FLU
ITAIPU
SPOT
purchase costs would be 7.8% higher than the amount recorded in 2Q08 due to the
increase in energy costs approved in the latest tariff adjustment.
Expenses
related
to
purchased
Purchased Energy - GWh
2nd Quarter
energy rose 28.5%, chiefly as a
result of : (i) the Itaipu dollar tariff
adjustment by approximately 10%
in January 2009, combined with the
dollar’s
considering
24.3%
the
appreciation
average
rates
between the two quarters, (ii) TPP
Norte Fluminense (Norte Flu) 26.2%
2.3%
1.2%
6,507
6,213
21.6%
23.0%
24.3%
25.5%
48.1%
52.5%
2Q08
2Q09
AUCTIONS
1.6%
NORTE FLU
ITAIPU
PROINFA
SPOT
average price increase reflecting the higher compensatory surcharge for gas (gas
CVA) impacted by the dollar’s appreciation, (iii) the approximately 6.4% increase in
auction contracts in Nov/08 affected by 6.0% inflation in the period (IPCA - Nov07
to Oct/08) and the introduction of new products in the 1st and 2nd thermal (T-15)
48
and hydro (H-30) energy auctions, (iv) the 13% increase in charges, and (v) the
energy purchase in the 2009 adjustment auction (Mar/09 to Dec/09), whose cost
this quarter was R$145.7/MWh.
The average purchased energy cost excluding spot purchases increased 21.5%
from R$90.7/MWh in 2Q08 to R$110.2/MWh in 2Q09.
Charges grew 43.2% in 2Q09 over 2Q08, chiefly due to thermoelectric plant
dispatch in 2008 that resulted in increased System Service Charges (ESS) for
distribution companies.
In 1H09, non-manageable costs and expenses were R$1,690.8 million, increasing
11.8% year-on-year. Energy purchase costs rose 9.5% over 1H08 as the combined
effect of approved increased energy purchase costs and the greater volume of
purchases this year. Charges increased 24.1% between the periods.
Manageable Costs and Expenses
Manageable operating costs and expenses (personnel, materials, outsourced
services, provisions, depreciation and others) totaled R$276.6 million in 2Q09, an
8.8% drop between the periods. This result is explained mainly by lower provisions,
which were 23.6% below 2Q08.
Costs and expenses with staff, equipment, services and others (PMSO) amounted
to R$121.7 million in the quarter, 3.2% above the R$117.9 million recorded in
2Q08. This result was chiefly due to a 5.7% or R$2.5 million increase in personnel
costs and expenses, mainly due to a 5.6% pay raise granted in this year’s collective
bargaining agreement.
This quarter’s provisions (PDD, Provision for Contingencies and Others) fell R$26.3
million chiefly because of provisions constituted in 2Q08 for the low-income subsidy
and an increase in Braslight’s actuarial liabilities in the amounts of R$17.2 million
and R$23.9 million, respectively. We provisioned R$66.5 million for past due
accounts in 2Q09, representing 3.5% of gross billed energy, versus R$47.4 million
or 2.6% of gross billed energy in 2Q08, a reflection of the economic crisis that
decreased retail customers’ ability to pay in the beginning of 2009.
From January to June 2009, manageable operating costs and expenses totaled
R$528.9 million, an 8.0% drop compared to the same period of 2008.
49
Generation
In 2Q09 Light Energia’s costs and expenses were R$31.6 million, 4.7% higher than
in 2Q08, principally due to R$0.8 million increase in other expenses, a reflection of
the higher royalties charged for use of water resources, the 4.3% increase in CUSD
(distribution system use) costs, and the 11.3% rise (R$0.3 million) in expenses
with materials and outsourced services.
Expenses in 2Q09 were as follows: CUSD (use of the distribution system, 34.2%),
personnel (15.5%), materials and third-party services (10.2%), others and
depreciation (40.1%). In 2Q09, the PMSO cost per MWh was R$12.55/MWh, while
in 2Q08 this cost was R$11.54/MWh.
In 1H09, Light Energia’s costs and expenses were R$64.7 million, up 6.1%
compared to 1H08 chiefly due to the 11.8% and 16.0% increases in CUSD and
other expenses, respectively.
Operating Costs and Expenses - R$ MM
Personnel
Material and Outsourced Services
Purchased Energy (CUSD)
Depreciation
Others (includes provisions)
Total
2Q09
(4.9)
(3.2)
(10.8)
(6.1)
(6.6)
(31.6)
2Q08
(4.8)
(2.9)
(10.4)
(6.3)
(5.9)
(30.2)
(%)
2.6%
11.3%
4.3%
-3.1%
12.4%
4.7%
1H09
(8.8)
(6.6)
(23.3)
(12.2)
(13.7)
(64.7)
1H09
(9.5)
(6.2)
(20.9)
(12.6)
(11.8)
(60.9)
Var. %
-6.7%
6.8%
11.8%
-3.2%
16.0%
6.1%
50
In 2Q09, costs and expenses totaled R$15.7 million, 54.5% more than in the same
period in 2008. This increase was mainly because of the 38.5% increase in the
energy purchase cost between the quarters due to the 14.3% increase in the
purchased energy volume to fulfill the trading company’s new contracts, in addition
to the increase in the costs and expenses with materials as a result of expanded
energy service projects.
In 1H09, costs and expenses totaled R$30.9 million, an 11.2% decline compared to
1H08 that resulted mainly from the 47.1% decrease in energy purchase costs in
1Q09, a reflection of the reduction in the spot price amounts in relation to 1Q08.
Operating Costs and Expenses - R$ MM
Personnel
Material and Outsourced Services
Purchased Energy
Depreciation
Others (includes provisions)
Total
2Q09
(0.4)
(2.0)
(13.1)
(0.2)
(0.1)
(15.7)
2Q08
(0.5)
0.1
(9.5)
(0.2)
(0.1)
(10.2)
(%)
-18.5%
38.5%
-26.1%
-2.2%
54.5%
1H09
(0.9)
(4.3)
(25.2)
(0.3)
(0.2)
(30.9)
1H08
(0.9)
(1.0)
(32.3)
(0.4)
(0.1)
(34.8)
Var. %
-1.4%
324.8%
-22.0%
-25.9%
21.6%
-11.2%
EBITDA
Consolidated
Consolidated EBITDA dropped 34.0% year-on-year, totaling R$220.6 million in the
second quarter of 2009. This result is mainly due to the reduction in the distribution
company’s EBITDA, a reflection of the November 2008 tariff review process
combined with the effects of the crisis over the consumption that particularly
affected the demand and consumption of customers from the industrial segment.
The consolidated EBITDA margin fell 8.5 p.p. between the periods from 25.8% in
EBITDA - 2Q09/2Q08 - R$ mn
334
(96)
(25)
EBITDA - 2Q08
Net Revenue
CCEE's rerecording
(20)
26
221
Manageable
Costs (PMSO)
Provisions
EBITDA - 2Q09
2Q08 to 17.3% this quarter.
51
In 1H09, EBITDA stood at R$570.1 million, down
11.2% compared to 1H08. The EBITDA margin for
the six-month period was 21.0%. The share of the
distribution segment EBITDA in the consolidated
EBITDA per segment *
1H09
Distribution
83.3%
EBITDA was 83.3% in 1H09. The generation and
trading segments were responsible for 15.6% and
1.1% of consolidated EBITDA, respectively.
Generation
15.6%
C ommercializati
on
1.1%
*Does not consider eliminations
Consolidated EBITDA- R$ MM
Distribution
Generation
Commercialization
Others and eliminations
Total
EBITDA Margin (%)
2Q09
180.8
47.9
3.5
(11.6)
220.6
17.3%
2Q08
283.6
43.0
6.6
1.1
334.3
25.8%
Var.%
-36.3%
11.4%
-47.1%
-34.0%
-
1H09
493.6
92.6
6.4
(22.5)
570.1
21.0%
1H08
528.4
104.3
12.1
(2.5)
642.3
24.6%
Var.%
-6.6%
-11.2%
-47.2%
797.1%
-11.2%
-
Distribution
The distribution company’s EBITDA in 2Q09 totaled R$180.8 million, 36.3% below
the same period last year. This result may be explained mainly by: (i) the reduction
in the regulatory EBITDA resulting from the latest tariff review, approved in
November of 2008 whereby the scale gains obtained during the first cycle (2003 to
2008) are fully passed through to consumers; (ii) the reduction in consumption and
demand of free customers, which affected the revenue for the quarter, and (iii) the
recording, in this quarter, of R$25 million in energy purchases referring to 1Q09
due to CCEE’s re-recording. As a result, the EBITDA margin in 2Q09 was 15.0%,
7.9 p.p. lower than that of 2Q08.
In 1H09, EBITDA was R$493.6 million, down 6.6% compared to 1H08, with a
19.2% margin. This reduction is chiefly the result of the lower market in the second
quarter and the effect of the tariff review conducted in November 2008.
Generation
Light Energia’s EBITDA grew 11.4% year-on-year, totaling R$47.9 million in 2Q09.
This increase is primarily a result of the 9.8% increase in net revenue due to the
adjustment in the sale price that more than offset the 4.7% rise in expenses. The
EBITDA margin this quarter was 65.2%, 1.0 p.p. higher than in 2Q08.
52
In 1H09, EBITDA was R$92.6 million, contracting 11.2% compared to 1H08 as a
result of the 4.9% decrease in net revenue, resulting from the decision to allocate a
larger volume of energy to the second half, combined with the 6.1% increase in
costs and expenses. The EBITDA margin in the first half of the year was 63.8%,
down 4.5 p.p. compared to 1H08.
EBITDA totaled R$3.5 million this quarter, a decline of 47.1% compared to the
R$6.6 million registered in 2Q08. The reduction in the quarter can be explained by
the decoupling of the cost of materials necessary to the energy service businesses
and the corresponding revenue, as well as the 64.9% drop in the spot price, which
negatively affected the trading operation’s short-term contracts. The EBITDA
margin was 18.3% in the quarter, decreasing 21.5 p.p. year-on-year.
In 1H09, EBITDA was R$6.4 million, 47.2% below that of 1H08 due to the 20.5%
drop in net revenue as a result of both the lower volume traded and the year-onyear decrease in the spot price, despite the 11.2% decrease in costs and expenses.
The EBITDA margin in 1H09 was 17.3%, 8.7 p.p. below the one recorded in 1H08.
53
Consolidated Financial Result
Financial Result - R$ MM
Financial Revenues
Income - financial investments
Monetary and Exchange variation
Swap Operations
Others Financial Revenues
Financial Expenses
Interest over loans and financing
Monetary and Exchange variation
Braslight (private pension fund)
Swap Operations
Others Financial Expenses
Subtotal
PIS/COFINS Provisions Reversal
Total
2Q09
39.3
10.5
9.1
(7.2)
26.9
(50.8)
(47.2)
3.8
(11.3)
(2.6)
6.4
(11.5)
2Q08
95.4
12.5
8.2
74.6
(106.6)
(46.1)
(11.0)
(47.5)
(5.6)
3.6
(11.3)
(%)
-58.8%
-16.7%
10.5%
-63.9%
52.4%
-2.2%
134.7%
76.2%
54.1%
-78.0%
-2.3%
1H09
85.5
27.9
20.9
(8.3)
45.0
(121.8)
(99.1)
(10.1)
(20.5)
(2.6)
10.4
(36.3)
1H08
149.4
25.4
26.6
1.6
95.9
(244.6)
(100.8)
(47.2)
(86.3)
(8.6)
(1.7)
(95.2)
(%)
-42.8%
9.8%
-21.3%
-53.0%
50.2%
1.7%
78.6%
76.3%
70.3%
732.5%
61.9%
-
432.4
-
-
432.4
-
(11.5)
421.1
-
(36.3)
337.1
-
The financial result in the quarter was a negative R$11.5 million, compared to a
positive R$421.1 million in the second quarter of 2008, due to the non-recurring
effect of the reversal of provisions referring to the expansion of the PIS/COFINS
calculation base that had a positive impact of R$432.2 million on that quarter.
Disregarding the effect of that provision reversal, the financial result was in line
with that of the same period of 2008, as a combined result of the 58.8% decrease
in financial revenues offset by the 52.4% decrease in financial expenses.
Financial revenue in the quarter was R$39.3 million, 58.8% below the result
recorded in 2Q08. This decline was mainly due to the monetary restatement of the
recognition of PIS/COFINS credits on sector charges in 2Q08, affecting the other
revenues line, as well as the decrease in interest on energy bills paid in arrears
because of the 29.4% reduction in customer installments.
The quarter’s financial expense of R$50.8 million was 52.4% lower than that of
2Q08, primarily due to: (i) the decreased monetary restatement of Braslight’s4
liabilities as a result of a lower inflation rate, to which the balance of our debt is
indexed. This quarter’s adjustment index was -0.62% compared to 3.74% in 2Q08;
(ii) the smaller update of provisions for contingencies and tax liabilities, with a fall
of approximately R$20 million year-on-year; and (iii) the present value adjustment
of long-term receivables, in other financial expenses.
In 1H09, the financial result was a negative R$36.3 million compared to a positive
R$337.1 million in 1H08, once again impacted by the reversal of provisions
referring to PIS/COFINS. Financial revenue in 1H09 was R$85.5 million, a result
4
Until May 2009 these were adjusted according to the IGP-DI variation (with a one month lag) and
actuarial interest of 6% p.a. Since June 2009, they have been adjusted according to the IPCA (Extended
Consumer Price Index, with a one month lag) as a replacement to the IGP-DI.
54
42.8% lower than that recorded in 1H08, and financial expenses were R$121.8
million, a 50.2% drop compared to the financial expenses recorded in 1H08.
Indebtedness
R$ MM
Brazilian Currency
Debenture 1st Issue
Debenture 4th Issue
BNDES Rationing
Debenture 5th. Issue
CCB Bradesco
ABN Amro
Promissory Notes
Financial operations "Swap"
Others
Foreing Currency
National Treasury
Import Financing
BNDES Import Fin.
Short Term
311.8
16.1
0.0
84.4
63.0
39.2
3.0
101.5
%
14.1%
0.7%
0.0%
3.8%
2.8%
1.8%
0.1%
4.6%
4.6
21.1
16.3
3.6
1.2
0.2%
1.0%
0.7%
0.2%
0.1%
333.0
15.0%
Gross Debt
Cash
Net Debt (a)
Braslight (b)
Net Regulatory Asset (c)
Adjusted Net Debt (a+b-c)
93.5
49.9
Long Term
1,791.4
0.1
351.1
903.8
450.0
80.0
2.3
4.1
92.7
91.9
0.8
1,884.1
912.6
228.7
%
Total
80.8% 2,103.2
16.1
0.0%
0.1
15.8%
435.5
40.8%
966.7
20.3%
489.2
3.6%
83.0
101.5
0.1%
2.3
0.2%
8.7
4.2%
113.8
4.1%
108.3
0.0%
4.3
1.2
%
94.9%
0.7%
0.0%
19.6%
43.6%
22.1%
3.7%
4.6%
0.1%
0.4%
5.1%
4.9%
0.2%
0.1%
85.0% 2,217.0
569.6
1,647.4
1,006.1
278.6
2,374.9
100.0%
The Company’s gross debt on June 30, 2009 was R$2,217.0 million, up 2.3%
compared to the amount on March 31, 2009, as a result of new debt being
contracted in the quarter. Compared to the position on June 30, 2008, the
Company’s gross debt rose 11.3%, corresponding to a variation of R$224.8 million.
This growth is mainly the result of $317.0 million in new debt contracted in the last
12 months, whose primary purpose was
Net Debt (ex-Braslight)
(R$ million)
to finance investment projects.
The R$1,647.4 million
net debt was
15.2% and 6.3% higher than in March
2009
and
June
2008,
1,647
1,550
1,430
respectively,
because of the decrease in the cash
position that was principally due to a
R$407.9 million
dividend
payment
in
Jun-08
Mar-09
Jun-09
April 2009. The net debt/EBITDA ratio rose from 0.9x in March 2009 to 1.2x in June
2009.
Indebtedness
(Brazilian Currency x Foreign)
Our debt position continues to
be
comfortable,
with
an
6.4%
7.1%
5.1%
93.6%
92.9%
94.9%
Jun-08
Mar-09
Jun-09
average term to maturity of 4.1
years
and
reduction
of
the
Brazilian Currency
Foreign Currency
55
average cost of dollar-denominated debt, which was 1.6 p.p. cheaper than in March
2009 and is now at 10.4% p.a. The average cost of foreign currency debt of
US$+5.3% p.a. remained stable when compared to March 2009. At the end of
June, only 5.1% of total debt was denominated in foreign currency. After the effect
of foreign currency hedging operations, our net exposure is only 3.8% of the total.
Our hedge policy consists of protecting the cash flow falling due within the next 24
months (principal and interest) through the use of non-cash swap instruments with
premier financial institutions.
Net income
Light posted net income of R$121.4 million this quarter, down 68.8% compared to
2Q08. This result is due to the non-recurring record of the write-off of provisions
related to the expansion of the PIS/COFINS calculation base in 2Q08, which had a
positive effect of R$285.4 million on net income for that period, compared to the
recognition of non-recurring tax credits, which had a positive impact of R$118.4
million this quarter, partially offset by the negative effect of the exchange rate
variation
on
Light
388.6
SESA’s liabilities with
the offshore company
285.4
142.8
LIR, which increased
income
and
39.6
social
contribution
-34.6%
93.4
118.4
90.4
121.4
Net effect offshore
exchange
rate
variation
Net income
2Q09
taxes
R$90.4
million
this
quarter
and
R$39.6
million
in
2Q08.
Net Income PIS/COFINS - Net effect 2Q08 - Pro
net effect
offshore
forma
exchange
rate
variation
Net income
2Q08 w/out nonrecurring
effects
Net income
effects
Tax credits
Disregarding the non-recurring effects of both quarters, net income for 2Q09 would
be R$93.4 million, 34.6% lower than in 2Q08, as demonstrated in the graph on the
right.
Net income in the first
half
of
2009
R$289.7
million,
compared
to
R$492.1
recorded
was
the
492.1
6,2%
285.4
251.6
267.2
118.4
95.9
289.7
Net income
effects
Net income
effects
Tax credits
Net effect offshore
exchange
rate
variation
Net income
1H09
44.9
million
in
Disregarding
1H08.
the
Net Income PIS/COFINS - Net effect 1H08 - Pro
net effect
offshore
forma
exchange
rate
variation
56
aforementioned non-recurring effects in both periods, net income in 1H09 would be
R$267.2 million, 6.2% higher than in 1H08.
Capital Expenditures
In 1Q09, the Company invested
R$79.9
million
projects,
investment
including
development
networks
in
of
CAPEX (R$ MM)
237.3
the
9.1
distribution
(new
quality
(structural
1.9
11.8
connections,
221.7
172.8
improvements
optimization
and
preventive maintenance), which
absorbed
203.9
17.4
capacity increases and repairs)
and
0.0
6.5
R$52.8
million,
1H08
Distribution
Administration
1H09
Generation
Commercial.
and
loss-prevention initiatives totaling R$19.1 million. In the generation segment,
investments totaled R$4.3 million, chiefly allocated to maintenance of the existing
generation complex.
Investments in fixed assets totaled R$250.6 million in 1H09, which includes the
financial charges originating from the Company’s loans with financial institutions,
the accounting effect of monetary restatement of use of public property from the
Itaocara Plant, provided in the Plant’s concession agreement, and materials in
inventory that have not yet been activated.
Projects for Expansion of the Generation Capacity
The second quarter of 2009 saw the following developments in the projects for
expansion of Light’s generation capacity:

The EPC consortiums’ proposals for the construction of the Paracambi SHPP
were received. These proposals were submitted to the Board of Directors, and the
contracting of the winning consortium, comprised of the companies Orteng
Equipamentos e Sistemas Ltda. and Construtora Quebec Ltda., was approved at the
Board of Directors Meeting of August 7. The project’s total cost is approximately
R$195 million and construction is slated to begin in September, with commercial
operations expected to begin in August of 2011.
57

The Consortium with CEMIG for the construction of the Paracambi SHPP is
being turned into an SPE (Special Purpose Entity), in view of the requirements of
the Brazilian Development Bank (BNDES) to grant Project Finance loans for a
project.

Bids have been requested to choose the company that will build the supply
system for the Lajes SHPP, and construction is expected to start at the beginning of
September.
In addition to these projects, the Company is considering participation in other
generation projects, which together ensure the increase of installed generation
capacity by at least 50%.
Cash Flow
R$ MM
Cash in the Beginning of the Period (1)
Net Income
Provision for Delinquency
Depreciation and Amortization
Net Interests and Monetary Variations
Braslight
Atualization / provisions reversal
Others
Net Income Cash Basis
Working Capital
Regulatories (RTE, CVA e Bubble)
Contingencies
Taxes
Others
Cash from Operating Activities (2)
Dividends Payment
Finance Obtained
Debt Service and Amortization
Financing Activities (3)
Share Participations
Concession Investments
Assets Alienation
Investment Activities (4)
Cash in the End of the Period (1+2+3+4)
Cash Generation (2+3+4)
2Q09
736.3
121.4
66.5
76.1
45.9
11.3
18.4
(54.8)
284.8
37.2
68.7
(34.9)
28.9
(25.7)
359.0
(407.9)
101.3
(91.4)
(398.0)
(128.9)
1.2
(127.7)
569.6
(166.6)
2Q08
394.3
388.6
47.4
80.3
40.6
71.4
(386.9)
200.0
441.4
(86.9)
27.6
(16.8)
(273.1)
103.3
195.5
75.4
(73.1)
2.3
(149.4)
(149.4)
442.6
48.3
1H09
590.1
289.7
126.5
152.4
88.7
20.5
23.5
11.0
712.4
(110.7)
89.4
(52.1)
57.2
(38.6)
657.6
(407.9)
123.9
(161.6)
(445.5)
(239.5)
6.9
(232.6)
569.6
(20.5)
In 2Q09, Light’s cash generation was a negative R$166.6 million, primarily as a
result of the R$407.9 million dividend payment made in April. Cash generation
before the dividend payment was R$241.2 million in the quarter, R$192.9 million
more than that of 2Q08.
This result is chiefly due to the increase in cash generated by operations, mainly
explained by: (i) the decrease in taxes, which had a negative impact in 2Q08 due to
58
the activation of PIS/COFINS credits related to charges, against the positive impact
this quarter resulting from the higher provision for taxes (an effect of the dollar’s
depreciation on Light SESA’s debt with LIR); and (ii) the positive R$37.2 million
working capital, mainly due to this quarter’s high collection index which exceeded
the 100% mark.
In financing activities, the negative result is due to the payment of dividends in
April, whereas in 2Q08 no dividends were paid. The net result of financing obtained
and debt service remained stable year-on-year.
Net cash used in investing activities in the quarter was 13.8% below that of the
same period of 2008. This decrease is explained mainly by the delayed investments
in the loss-prevention program, which should be expedited over the year.
Corporate Governance and the Capital Markets
On June 30, 2009, the capital stock of Light S.A. was comprised of 203,934,060
common shares with no par value. The controlling group, Rio Minas Energia (RME),
retains 52.1% of the capital stock.
Country´s
biggest
individual
electricity
distributor
Andrade Gutierrez
Group´s division that
invests in public
services concession
CEMIG
AGC
Companhia Energ ética
de Minas Gerais
Andrade Gutierrez
Concessões
25%
Brazilian private
investors group
(includes Brasligt)
Holding that
controls
CEMAR.
LUCE
LUCE do Brasil
Fundo de Investimento
em Participações
25%
EQUATORIAL
Equatorial Energia
25%
25%
RME
Rio Minas Energia
Participações S.A.
52.1%
Free Float : 47.9%
33.6%
BNDESPAR
LIGHT S.A.
14.3%
MARKET
On July 14, 2009 the Company published the notice of commencement of its
secondary public distribution of shares issued by Light S.A., whereby 29,470,480
shares were placed, of which 16,079,135 shares were held by BNDESPar and
13,391,345 shares were held by EDF. The total number of shares sold corresponds
59
to 14.4% of the Company’s capital stock. The offering price, determined in the
bookbuilding process, was R$24.00, for a total of R$707.3 million.
With this operation, the effective free float of shares has increased from 7.7% to
22.1% of the capital stock, giving greater liquidity to shares. The table below shows
the Company’s ownership structure before and after the offer.
Shareholders
RME (Controlling Shareholder)
BNDESPar
EDF
Market
Total
june 30th 2009
number of shares
%
106,304,597 52.1%
68,555,918 33.6%
13,391,345
6.6%
15,682,200
7.7%
203,934,060
Post Offering
number of shares
%
106,304,597
52.1%
52,476,783
25.7%
45,152,680
22.1%
203,934,060
The Company's shares have been listed on Bovespa's Novo Mercado since July of
2005, adhering to the best corporate governance practices and the principles of
transparency and equity, in addition to granting special rights to minority
shareholders. Light S.A.’s shares are listed on the Ibovespa, Itag, IGC, IEE, IBrX
and ISE indexes.
Light’s Board of Directors is composed of 11 members, 2 of whom are elected
independently. The following five committees support the Board of Directors:
Finance,
Management,
Audit,
Human
Resources,
and
Governance
and
Sustainability.
The first payment of dividends approved at the Annual and Extraordinary General
Meeting held on March 18, 2009, in the amount of R$2.00 per share, was paid on
April 2, 2009. The second payment, in the amount of R$0.45 per share, is
scheduled for November 27, 2009.
In the Extraordinary General Meeting held on July 9, 2009, Mr. Carlos Roberto
Teixeira Junger was elected to the position of sitting member and Mr. Ricardo
Simonsen to the position of alternate member of the Company’s Board of Directors.
These members will remain in office until the Annual General Meeting that approves
the accounts of the year to end on December 31, 2009.
In the Board of Directors meeting held on July 17, 2009, Mr. Gustavo César de
Alencar was elected to the position of Network Officer for the same term of office as
the Company’s other executive officers elected at the Board of Directors Meeting
60
held on August 10, 2006, with duties and responsibilities in relation to the following
issues: (i) operation and maintenance of the electricity network in any voltage,
except for those of Light Energia; (ii) planning, engineering and expansion of the
distribution system; and (iii) automation, protection and metering systems.
The new duties and responsibilities of the Chief Operations and Customers Officer
are related to: (i) customer service: (ii) billing; (iii) collection; (iv) energy recovery;
(v) services; (vi) energy purchase; (vii) market projection; (viii) sale of energy on
the free market; and (ix) coordination of the operational activities of the company
and its subsidiaries.
BOVESPA (spot market) - LIGT3
Daily Average
Number of shares traded (Million)
Number of Transactions
Traded Volume (R$ Million)
Quotation per lot of 1000 shares:
Share Valuing
IEE Valuing
Ibovespa Valuing
2Q09
286.26
691
$6.9
$26.95
21.5%
22.1%
25.8%
1Q09
240.59
557
$5.8
$22.18
11.9%
9.4%
9.0%
2Q08
222.14
348
$5.5
$19.18
3.7%
13.7%
6.6%
Note: shares quotations are dividends adjusted.
At the end of the quarter, Light’s has appreciated 21.5%, with an average daily
trading volume of R$6.9 million. The IEE (Bovespa’s Electric Power Index) was up
22.1% in the same period, in step with Ibovespa’s 25.8% appreciation. The graph
below shows the performance of Light’s stock since RME took control on August 10,
2006.
Light x Ibovespa x IEE
08/10/06 = 100 until 07/31/09
260
240
R$/share
08/10/06
07/31/09
11.67
24.30
2008
IEE
-12%
IBOV -41%
LIGT3 -14%
2009
IEE
37%
IBOV 46%
LIGT3 23%
220
108% Light
200
180
76% IEE
160
140
47% Ibovespa
120
100
Au
Seg-0
6
O p-0
N ct-06
o
D v-06
ec 6
Ja -0
6
Fen-0
M b-07
a 7
A r-0
M pr-07
a 7
Ju y- 0
n 7
Ju -07
Au l-0
Seg-07
7
O p-0
c
N t-07
o
D v-07
ec 7
Ja -0
7
Fen-0
M b-08
a 8
A r-0
M pr-08
a 8
Ju y- 0
n 8
J -0
Auul-08
Seg-08
8
O p-0
N ct-08
o
D v-08
ec 8
Ja -0
8
Fen-0
M b-09
a 9
A r-0
M pr-09
a 9
Ju y- 0
n 9
Ju -09
l-0
9
80
61
Recent Events

Secondary Offering of Shares: On July 14, 2009 the Company published the
notice of commencement of its secondary public distribution of shares issued by
Light S.A., whereby 29,470,480 shares were placed, corresponding to 14.4% of the
Company’s capital stock. The offering price, determined in the bookbuilding
process, was R$24.00, for a total of R$707.3 million. With this operation, the
effective free float of shares increased to 22.1% of the capital stock.

6th Issue of Debentures: At the end of July 2009, Light SESA concluded its 6th
issue of simple debentures, not convertible into shares. The issued totaled R$300
million, remunerated at 115% of the CDI rate as determined in the bookbuilding
process, compared to the initial expected remuneration of 133% of the CDI rate.
The debentures were issued on June 1, 2009 and will be amortized in a single
installment on June 1, 2011. The purpose of the issue was the early redemption of
Light SESA’s 1st issue of promissory notes in the amount of R$110 million, in
addition to reinforcing the Company’s working capital.

Credit Rating: Light SESA’s corporate credit rating was raised by Standard &
Poor’s to brA+ and was included in Moody’s Latin America credit coverage with an
Aa2.br rating.

ABRADEE Award: Last July, Light SESA won the 2009 ABRADEE Award in the
Performance Evolution category. This award acknowledges the company with the
highest ratio between the total score in the general category in the reference year
and the weighted average of the total score in the general category in the last three
editions of the award nationally. The evaluation criteria are: Customer Evaluation,
Operational Management, Economic-Financial Management, Management Quality
and Social Responsibility. This award shows that Light has grown in every aspect
and in a balanced way, reflecting the Company’s focus on sustainability that
emphasizes both socio-environmental and economic-financial issues.

New Department: At the Board of Directors Meeting held on July 17, 2009,
a new department was created – the Network Department – with duties and
responsibilities over the following issues: (i) operation and maintenance of the
electricity network in any voltage, except for those of Light Energia; (ii) planning,
engineering and expansion of the distribution system; and (iii) automation,
protection and metering systems, which were previously exercised by the Chief
Operations and Customers Officer.

Contracting of EPC for construction of Paracambi PCH: at the Board of
Directors Meeting held on August 7, the contracting of a consortium for
62
construction of the Paracambi PCH was approved. The project’s total cost is
approximately R$195 million and construction is slated to begin in September with
commercial operations expected to begin in August of 2011.
Disclosure Program
Schedule
Teleconference
08/12/2009, wednesday, at 10:00 a.m. (Brasília) and at 9:00 a.m. (Eastern
time), with simultaneous translation to English
Access conditions:
Webcast: link on site www.light.com.br (portuguese and english)
Conference Call - Dial number:
Brazil: (55) 11 - 2188 0188
USA: +1 866 890 2584
Other countries: +1 646 843 6045
Access code: Light
Disclaimer
The information on the Company’s operations and its Management’s expectations regarding its future
performance was not revised by independent auditors.
Forward-looking statements are subject to risks and uncertainties. These statements are based on the
beliefs and assumptions of our Management and on information currently available to the Company.
Statements about future events include information about our intentions, beliefs or current expectations,
as well as those of the Company's Board of Directors and Officers. Reservations related to statements
and information about the future also include information about operating results, likely or presumed, as
well as statements that are preceded by, followed by, or including words such as "believes," "might,"
"will," "continues," "expects," "estimates," "intends," "anticipates," or similar expressions. Statements
and information about the future are not a guarantee of performance. They involve risks, uncertainties
and assumptions because they refer to future events, thus depending on circumstances that may or may
not occur.
Future results and creation of value to shareholders might significantly differ from those
expressed or suggested by forward-looking statements. Many of the factors that will determine these
results and values are beyond LIGHT S.A.'s control or forecast capacity.
63
APPENDIX I
Statement of Income by Company - R$ million
LIGHT SESA
Operating Revenue
Deductions from the operating revenue
Net operating revenue
Operating expense
Operating result
EBITDA
Equity equivalence
Financial Result
Other Operating Incomes
Other Operating Expenses
Result before taxes and interest
Net Income
EBITDA Margin
2Q09
1,981.2
(777.7)
1,203.5
(1,092.6)
110.9
180.8
(16.4)
1.6
(4.3)
91.8
99.4
15.0%
2Q081
1,961.5
(726.7)
1,234.8
(1,025.1)
209.7
283.6
423.9
(0.3)
(5.4)
627.9
361.5
23.0%
1H09
4,223.7
(1,650.4)
2,573.3
(2,219.7)
353.6
493.6
(36.1)
7.7
(5.1)
320.0
254.8
19.2%
1H081
3,932.9
(1,464.1)
2,468.8
(2,087.0)
381.8
528.4
350.1
16.5
(4.3)
744.1
435.6
21.4%
%
1.0%
7.0%
-2.5%
6.6%
-47.1%
-36.3%
-103.9%
-19.9%
-85.4%
-72.5%
-
LIGHT ENERGIA
Operating Revenue
Operating expense
Operating result
EBITDA
Equity equivalence
Financial Result
Net Income
EBITDA Margin
2Q09
83.1
(9.7)
73.4
(31.6)
41.8
47.9
4.7
0.4
46.9
31.4
65.2%
2Q08
76.4
(9.5)
66.9
(30.2)
36.7
43.0
(3.0)
33.7
22.5
64.3%
%
8.8%
1.7%
9.8%
4.7%
13.9%
11.4%
-256.7%
39.0%
39.2%
-
1H09
165.5
(20.4)
145.1
(64.7)
80.5
92.6
(1.4)
0.4
79.4
52.4
63.8%
1H08
174.0
(21.4)
152.6
(60.9)
91.7
104.3
(13.5)
78.2
51.4
68.3%
%
-4.9%
-4.6%
-4.9%
6.1%
-12.3%
-11.2%
-89.6%
1.5%
2.0%
-
LIGHT ESCO
2Q09
2Q08
%
1H09
23.3
20.3
15.2%
45.9
Operating Revenue
(4.3)
(3.7)
15.6%
(8.9)
19.1
16.6
15.1%
37.0
(15.7)
(10.2)
54.5%
(30.9)
Operating expense
3.3
6.4
6.1
Operating result
-47.7%
3.5
6.6
6.4
EBITDA
-47.1%
Equity equivalence
0.2
0.2
0.4
Financial Result
12.5%
3.5
6.6
6.5
-46.7%
2.3
4.2
4.1
Net Income
-46.4%
18.3%
39.8%
17.3%
EBITDA Margin
1
Figures are presented pro forma as explained on exhibit V, where the adjustments are detailed
1H08
55.9
(9.4)
46.5
(34.8)
11.7
12.1
0.4
12.1
7.3
26.1%
%
-17.8%
-4.6%
-20.5%
-11.2%
-47.9%
-47.2%
0.3%
-46.4%
-43.3%
-
%
7.4%
12.7%
4.2%
6.4%
-7.4%
-6.6%
-53.6%
19.3%
-57.0%
-41.5%
-
64
APPENDIX II
Statement of Consolidated Income
Consolidated - R$ MM
OPERATING REVENUE
DEDUCTIONS FROM THE REVENUE
NET OPERATING REVENUE
OPERATING EXPENSE
Personnel
Material
Outsourced Services
Purchased Energy
Depreciation
Provisions
Others
1Q09
2,064.9
(791.6)
1Q08
2,037.5
(739.9)
%
1.3%
7.0%
1H09
4,390.6
(1,679.7)
1H08
4,108.1
%
6.9%
(1,494.8)
12.4%
1,273.3
1,297.6
-1.9%
2,710.9
2,613.3
(1,128.8)
(62.7)
(6.5)
(63.9)
(811.9)
(76.1)
(85.0)
(22.8)
(1,043.5)
(49.9)
(3.6)
(64.4)
(715.6)
(80.3)
(111.3)
(18.5)
8.2%
25.7%
80.6%
-0.7%
13.5%
-5.3%
-23.6%
23.0%
(2,293.1)
(124.8)
(10.9)
(122.7)
(1,683.8)
(152.4)
(150.6)
(47.9)
(2,130.4)
(103.9)
(7.5)
(126.7)
(1,500.8)
(159.4)
(187.5)
(44.7)
3.7%
7.6%
20.0%
46.0%
-3.1%
12.2%
-4.4%
-19.7%
7.2%
OPERATING RESULT(¹)
144.5
254.0
-43.1%
417.7
482.9
-13.5%
EBITDA (²)
220.6
334.3
-34.0%
570.1
642.3
-11.2%
(11.5)
39.3
(50.8)
421.1
95.4
325.7
-102.7%
-58.8%
-115.6%
(36.3)
85.5
(121.8)
337.1
149.4
187.7
-110.8%
-42.8%
-164.9%
-756.0%
-19.9%
8.0
(5.1)
EQUITY EQUIVALENCE
FINANCIAL RESULT
Financial Income
Financial Expenses
1.9
(4.3)
RESULT BEFORE TAXES AND INTEREST
130.6
SOCIAL CONTRIBUTIONS & INCOME TAX
DEFERRED INCOME TAX
PLR
(74.0)
71.7
(6.9)
NET INCOME
121.4
(0.3)
(5.4)
669.5
-80.5%
384.3
(82.8)
(193.8)
(4.3)
-10.6%
58.8%
(107.6)
27.1
(14.1)
388.6
-68.8%
289.7
16.5
(4.3)
832.3
-51.4%
19.3%
-53.8%
(145.8)
-26.2%
(182.3) -114.8%
(12.2)
15.5%
492.1
-41.1%
(¹) Operation Result, Administration vision = Operating Result, accounting norms (Item 1.9.7 of Notice CVM – 01/2007) + financials
(net financial expenses + equity pick-up)
(²) EBITDA = Operating Result, Administration vision + depreciation and amortization. Not reviewable by the external audit
65
APPENDIX III
Consolidated Balance Sheet
Consolidated Balance Sheet - R$ MM
ASSETS
Circulating
Cash & Cash Equivalents
Credits
Inventories
Others
Non Circulating
Realizable in the Long Term
Miscellaneous Credits
Others
Investments
Net Fixed Assets
Intangible
Deferred Charges
Total Assets
LIABILITIES
Circulating
Loans and Financing
Debentures
Suppliers
Taxes, Fees and Contributions
Dividends to pay
Provisions
Others
Non Circulating
Long-Term Liabilities
Loans and Financing
Debentures
Provisions
Others
Outcome of future performance
6/30/2009
2,851.0
569.6
2,102.9
20.0
158.4
3/31/2009
3,332.1
736.3
2,277.0
19.9
298.9
6,347.1
1,906.4
1,449.6
456.8
6,198.8
1,806.2
1,381.7
424.5
18.8
4,150.7
271.2
0.0
18.6
4,097.2
276.8
0.0
9,198.1
9,530.9
6/30/2009
1,738.0
253.9
79.0
469.0
178.1
91.8
162.1
503.9
3/31/2009
2,117.9
115.3
46.0
550.0
145.5
499.6
174.6
586.8
4,346.7
4,346.7
980.3
903.8
1,014.5
1,448.0
4,431.1
4,431.1
1,024.1
920.9
1,010.2
1,475.8
-
-
Net Assets
Realized Joint Stock
Capital Reserve
Legal Reserve
Profits Retention
Accumulated Profit/Loss of Exercise
3,113.5
2,225.8
42.5
103.8
451.7
289.7
2,982.0
2,225.8
32.4
103.8
451.7
168.3
Total Liabilities
9,198.1
9,530.9
66
APPENDIX IV
Regulatory Assets and Liabilities
REGULATORY ASSETS R$ MM
Customers, Concessionaires and Permissionaires
Tariff Readjustment
Despesas Pagas Antecipadamente
CVA
Other Regulatories
Part A
Total
Short Term
6/30/2009 3/31/2009
36.6
52.5
36.6
52.5
84.8
220.9
75.5
146.1
9.3
18.0
56.8
121.5
273.5
Long Term
6/30/2009 3/31/2009
229.7
216.4
229.7
216.4
229.7
216.4
REGULATORY LIABILITIES R$ MM
Regulatory Liabilities
Part A
CVA
Other Regulatories
Total
(71.6)
(16.2)
(49.6)
(5.8)
(71.6)
(105.9)
(94.9)
(11.0)
(105.9)
49.9
167.5
TOTAL
(1.0)
(1.0)
(1.0)
228.7
(1.3)
(1.3)
(1.3)
215.1
Light Figures
OPERATING INDICATORS
Nº of Consumers (thousands)
Nº of Employees
Average distribution tariff - R$/MWh
Average distribution tariff - R$/MWh (w/out taxes)
Average energy purchase cost R$/MWh¹
Generation Capacity (MW)
Assured Energy (MW)
Net Generation (GWh)
Charge Factor
¹ Includes net energy purchase/sell in the spot market
2Q09
3,946
3,734
411.9
282.9
2Q08
3,901
3,812
395.8
268.0
Var. %
1.1%
-2.0%
4.0%
5.6%
110.2
90.3
22.1%
855
855
-
537
1,309
65.7%
537
1,287
66.0%
1.7%
-
67
APPENDIX V
According to CVM Rule 506, 2Q08 and 1Q08 results are being re-presented to
reflect the impacts of Law 11,638/07 for comparability with 2Q09 and 1Q09
information. We are also presenting 2Q08 and 1H08 results with the reclassification
of the costs and expenses referring to the employee profit sharing program (PLR)
after determination of income tax. The reconciliation is as follows:
Light S.A. (R$ million)
Published
2Q08
Operating Revenue
Operating Revenue Deductions
Net Operating Revenue
Operating Expenses
Reclassification
PLR
Adjust
Law 11.638/07
2,037.5
2,037.5
(739.9)
(739.9)
1,297.6
(1,052.8)
Pro Forma
2Q08
1,297.6
4.3
5.0
(1,043.5)
Operating Result
244.7
254.0
EBITDA
327.2
334.3
Financial Result
Revenues
Expenses
Total
95.4
325.7
421.1
95.4
325.7
421.1
Others Operating Revenues
Others Operating Expenses
(0.3)
(5.4)
Result before taxes
660.2
IR/CS + Deferred
(274.8)
PLR - Participations
Net Income
(0.3)
(5.4)
669.5
(1.7)
(4.3)
385.3
(276.5)
(4.3)
388.6
68
Published
1H08
Operating Revenue
Operating Revenue Deductions
Net Operating Revenue
Operating Expenses
Reclassification
PLR
Adjust
Law 11.638/07
Pro Forma
1H08
4,108.1
4,108.1
(1,494.8)
(1,494.8)
2,613.3
2,613.3
(2,146.7)
12.2
4.1
(2,130.4)
Operating Result
466.6
482.9
EBITDA
631.2
642.3
Financial Result
Revenues
Expenses
Total
149.4
187.7
337.1
149.4
187.7
337.1
Others Operating Revenues
Others Operating Expenses
16.5
(4.3)
Result before taxes
816.0
IR/CS + Deferred
(326.6)
PLR - Participations
Net Income
16.5
(4.3)
832.3
(1.4)
(12.2)
489.4
(328.0)
(12.2)
492.1
69
Light S.A.
Report of independent auditors on special
review of the Quarterly Financial
Information (ITR)
Quarter ended June 30, 2009
(A translation of the original report in Portuguese, as filed with the
Brazilian Securities and Exchange Commission (CVM) containing
quarterly information prepared in accordance with the regulations
issued by the CVM)
35
Review Report of Independent Auditors
(A translation of the original report in Portuguese, as filed with the Brazilian Securities and
Exchange Commission (CVM) containing quarterly information prepared in accordance with
the regulations issued by the CVM)
To the
Board of Directors and Shareholder’s of
Light S.A.
Rio de Janeiro - RJ
1. We have reviewed the accounting information included in Quarterly Financial Information ITR - of Light S.A. and the consolidated Quarterly Financial Information of this Company
and its subsidiaries for the quarter ended June 30, 2009, comprising the balance sheet, the
statements of income, of changes in shareholders’ equity and of cash flows, the
performance report, and explanatory notes, prepared under the responsibility of the
Company’s management.
2. Our review was performed in accordance with the review standards established by the
IBRACON - Brazilian Institute of Independent Auditors and the Federal Council of
Accountancy - CFC, which comprised, mainly: (a) inquiries and discussions with the
persons responsible for the Accounting, Financial and Operational areas of the Company
and its subsidiaries, as to the main criteria adopted in the preparation of the Quarterly
Financial Information; and (b) reviewing information and subsequent events that have or
may have material effects on the financial situation and operations of the Company and its
subsidiaries.
3. Based on our review, we are not aware of any material changes that should be made to the
accounting information contained in the Quarterly Financial Information aforementioned
for it to be in accordance with the accounting practices adopted in Brazil and the standards
issued by the Brazilian Securities and Exchange Commission - CVM - applicable to the
preparation of the Quarterly Information.
4. As described in Note 2, as a result of the changes to the accounting practices adopted in
Brazil in 2008, the statements of income and of cash flows for the first quarter ended June
30, 2008, presented for comparison purposes, were adjusted and are being re-presented, as
36
provided for by NPC 12 - Accounting Practices, Changes in Accounting Estimates and
Error Correction, approved by CVM Resolution 506.
5. The financial statements of Fundação de Seguridade Social Braslight for the four-month
period ended April 30, 2009, were examined by other independent auditors whose opinion,
dated June 2, 2009, includes an emphasis paragraph regarding the balance of R$133,520
thousand related to tax credits arising from the Entity’s tax court case which was successful
in obtaining a final and non-appeasable decision, which, according to the Management’s
forecast, will allow them to utilize these credits to offset taxes payable in future years. The
future realization of the credits is subject to the completion of the offset process with the
Federal Tax Authority (Secretaria da Receita Federal), which the Entity suspended in
September 2005. If the Entity does not complete the offset process, they may eventually
record a provision for this asset. This asset, which guarantees the Entity’s actuarial reserves,
was deducted from calculation of the subsidiaries’ actuarial deficit, as required by
Resolution n° 371/00 of the Brazilian Securities and Exchange Commission - CVM.
Consequently, in the event that a provision is recorded for this amount, Company’s liability
may be proportionally adjusted.
6. As mentioned in Note 30, due to the second periodical review of tariffs of the subsidiary
Light Serviços de Eletricidade S.A. as set forth in the concession agreement, the National
Regulatory Electricity Agency - ANEEL temporarily ratified the subsidiary’s tariff
repositioning on 1.96%, to be applied during the period beginning November 7, 2008.
Considering the 2.30% interest on sales, the tariff’s impact reaches 4.27%. Additional
changes that may result from the final review, if any, will be reflected in the equity and
financial position of the Company and its subsidiary in the following periods.
August 7, 2009
KPMG Auditores Independentes
CRC SP-14428/O-6 F-RJ
Vânia Andrade de Souza
Accountant CRC RJ-057497-O-2
37
(A free translation of the original in Portuguese)
FEDERAL PUBLIC SERVICE
BRAZILIAN SECURITIES AND EXCHANGE COMMISSION (CVM)
STANDARDIZED FINANCIAL STATEMENTS (DFP)
COMMERCIAL, INDUSTRY AND OTHER TYPES OF COMPANIES
01987-9
LIGHT S.A.
June 30, 2009
Brazilian Corporation Law
03.378.521/0001-75
11.01 – NOTES TO THE FINANCIAL STATEMENTS
35
01987-9
LIGHT S.A.
June 30, 2009
03.378.521/0001-75
36
01987-9
LIGHT S.A.
June 30, 2009
03.378.521/0001-75
37
01987-9
LIGHT S.A.
June 30, 2009
03.378.521/0001-75
38
01987-9
LIGHT S.A.
June 30, 2009
03.378.521/0001-75
39
01987-9
LIGHT S.A.
June 30, 2009
03.378.521/0001-75
40
01987-9
June 30, 2009
LIGHT S.A.
03.378.521/0001-75
LIGHT - S.A.
CASH FLOW STATEMENTS
(In thousands of reais)
Consolidated
4/1/2009 to
6/30/2009
1/1/2009 to
6/30/2009
4/1/2008 to
6/30/2008
1/1/2008 to
6/30/2008
From operations
Income/(loss) for the year
121.437
289.725
388.604
492.067
66.543
126.708
47.386
105.260
Revenues (expenses) not affecting cash:
Allowance for doubtful accounts
Provision for (reversal of) losses in the recovery of long-term RTE
-
-
-
2.385
9.992
32.470
11.511
23.882
Adjustment of receivables to present value
(5.619)
(11.419)
(9.014)
(6.888)
Depreciation and amortization
76.078
152.420
80.312
159.365
Restatement of regulatory and contingent assets and liabilities
Equity Accounting
Interests and monetary variations - net
Income/loss from write-off of property, plant and equipment
Deferred income tax and social contribution
Charges and monetary variation on post-employment benefits
PIS/COFINS reversal - tax rate increase and expansion of the basis
45.852
88.702
40.562
93.666
2.384
(2.788)
6.584
(9.694)
(71.674)
(27.054)
193.779
182.254
11.296
20.488
-
-
Provision for liabilities - contingent
18.393
23.539
Granted options
10.068
20.045
Other
-
-
47.502
86.299
(432.358)
(432.358)
69.355
86.655
-
-
(471)
(2.853)
(935)
284.750
712.365
441.370
781.958
118.345
(87.675)
(12.859)
(24.118)
(468)
116.118
(333.320)
(161.927)
(9.089)
(19.880)
6.507
(6.167)
(147)
(1.421)
616
(4.055)
(8.751)
(10.167)
1.240
873
(Increase) Reduction in assets
Consumers and resellers
Recoverable Taxes
Services
Inventories
Prepaid Expenses (CVA and other)
Dividends received
-
-
-
-
Regulatory assets (CVA and Bolhas)
123.615
196.952
59.465
79.745
Escrow deposits
(11.988)
(14.375)
5.153
3.103
14.379
67.236
80.814
44.281
225.896
246.788
(192.384)
(68.265)
Suppliers
(38.152)
(27.229)
4.980
(23.296)
Electric power suppliers
(42.842)
10.033
(79.878)
(77.074)
Salaries and social contributions
(14.177)
(6.542)
(18.086)
(9.801)
Taxes and Social Contributions
29.341
(58.904)
60.209
(68.429)
(34.746)
(89.828)
Other
Increase (Reduction) in liabilities
(31.873)
(75.977)
(350)
(23.193)
(6.196)
(13.646)
Contingencies
(22.867)
(37.709)
(21.944)
(33.611)
Post-employment benefits
(23.177)
(46.531)
(21.424)
(41.468)
(4.630)
(21.644)
60.697
84.943
(151.600)
(301.547)
(53.515)
(258.359)
359.046
657.606
195.471
455.334
Offsetting accounts - CVA
Regulatory fees
Other
Cash generated by (used in) operations
Investment activities
Sale of assets
Investments in property, plant and equipment
Advances
Shareholding Investments
Consumer contributions
Cash used in investment activities
1.230
6.927
(130.221)
(242.665)
-
-
(148.179)
-
2.000
(240.320)
-
1.331
3.180
(1.260)
(1.113)
(127.660)
(232.558)
(149.439)
(239.433)
Financing activities
(407.868)
(407.869)
Loans and financings
101.266
123.940
75.400
75.400
Amortization of loans and financings
(91.420)
(161.608)
(73.116)
(135.443)
Net cash generated by (used in) financing activities
(398.022)
(445.537)
2.284
(263.506)
Net cash variation
(166.636)
(20.489)
48.316
(47.605)
736.273
590.126
394.290
490.211
569.637
(166.636)
569.637
(20.489)
442.606
48.316
442.606
(47.605)
Paid dividends
-
(203.463)
Statement of net cash variation
At the beginning of the year
At the end of the year
Cash variation
41
01987-9
LIGHT S.A.
June 30, 2009
03.378.521/0001-75
TABLE OF CONTENTS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
OPERATIONS
PRESENTATION OF THE QUARTERLY INFORMATION
REGULATORY ASSETS AND LIABILITIES
CASH AND CASH EQUIVALENTS
CONSUMERS, CONCESSIONAIRES AND PERMISSIONAIRES (CLIENTS)
TAXES
PREPAID EXPENSES
OTHER RECEIVABLES
INVESTMENTS
PROPERTY, PLANT AND EQUIPMENT
INTANGIBLE ASSETS
SUPPLIERS
LOANS, FINANCING AND FINANCIAL CHARGES
DEBENTURES AND FINANCIAL CHARGES
REGULATORY CHARGES – CONSUMER CONTRIBUTIONS
PROVISION FOR CONTINGENCIES
OTHER PAYABLES
PENSION PLAN AND OTHER EMPLOYEE BENEFITS
RELATED-PARTY TRANSACTIONS
SHAREHOLDERS’ EQUITY
ELECTRIC POWER SUPPLY
OTHER REVENUES
CONSUMER CHARGES (OPERATING REVENUE DEDUCTIONS)
OPERATING COSTS AND EXPENSES
ELECTRICITY PURCHASED FOR RESALE
FINANCIAL INCOME
FINANCIAL INSTRUMENTS
INSURANCE
STATEMENT OF OPERATIONS BY COMPANY
TARIFF REVIEW
LONG-TERM INCENTIVE PLAN
SUBSEQUENT EVENTS
42
01987-9
June 30, 2009
LIGHT S.A.
03.378.521/0001-75
NOTES TO THE QUARTERLY INFORMATION
AS OF JUNE 30, 2009
(Amounts in thousands of Brazilian reais)
1.
OPERATIONS
Light S.A.’s corporate purpose is to hold equity interests in other companies, as partner
or shareholder, and in the direct or indirect exploitation, as applicable, of electric power
services, including electric power generation, transmission, sale and distribution
systems, as well as other related services.
Light S.A. is a parent company of the following companies:
Light Serviços de Eletricidade S.A. (Light SESA) - Publicly-held company engaged in
the distribution of electric power;
Light Energia S.A. - (Light Energia) – Closely-held company whose main activity is
study, plan, construct, operate and exploit electric power generation, transmission and
sales, systems and related services;
Light Esco Prestação de Serviços Ltda. - (Light Esco) – Company whose main activity
is to provide services related to co-generation, projects, management and solutions, such
as improving efficiency and defining energy matrixes and sale of energy on the free
market.
Itaocara Energia Ltda. - (Itaocara Energia) – Pre-operating company, primarily engaged
in the exploitation and production of electric power;
Lightger Ltda. (Light Ger) and Lighthidro Ltda. (Light
Hidro)
–
Pre-operating
companies both to participate in auctions for concession, authorization and permission
for new plants. On December 24, 2008, Light Ger obtained the installation license that
authorizes the start of implementation works of Paracambi small hydroelectric power
plant (PCH); and
Instituto Light para o Desenvolvimento Urbano e Social (Light Institute) – It is engaged
in participating in social and cultural projects, has interest in the cities’ economic and
social development, affirming the Company’s ability to be socially responsible.
Grupo Light’s concessions and authorizations:
Concessions / authorizations
Generation, Transmission and Distribution
Date of concession /
Maturity Date
authorization
July 1996
June 2026
43
01987-9
June 30, 2009
LIGHT S.A.
03.378.521/0001-75
(direct)
Paracambi small hydroelectric power plant
(PCH) (indirect)
Itaocara hydroelectric power plant (indirect)
2.
February 2001
February 2031
March 2001
March 2036
PRESENTATION OF THE QUARTERLY INFORMATION
The individual and consolidated quarterly information including the notes thereto, are
presented in thousands of reais and other currencies, except when otherwise indicated
and were prepared in accordance with the accounting practices adopted in Brazil, which
comprises the Brazilian Corporation Law, Pronouncements and Guidance issued by the
Brazilian Committee on Accounting Pronouncements (“CPC”), rules issued by the
Brazilian Securities and Exchange Commission (“CVM”), and standards established by
Brazilian Electricity Regulatory Agency (“ANEEL”), pursuant to Accounting Manual
for the Electric Power Public Utility, having fully met all concepts introduced by Law
nr. 11,638/07 and Provisional Measure nr. 449/08.
This quarterly information was prepared according to the principles, practices and
criteria consistent with those adopted in the preparation of the annual financial
statements as of December 31, 2008 and the quarterly information as of March 31, 2009.
Thus, this quarterly information should be read jointly with said statements/information.
Given that the Company is comprised primarily of interests in other corporations, the
notes to the quarterly information primarily reflect the accounting practices and
breakdown of its subsidiaries’ accounts.
The consolidated Quarterly Information was prepared pursuant to CVM Rule 247, of
March 27, 1996, which provides, among other subjects, procedures to prepare and
disclose of consolidated financial statements and in line with the accounting practices
adopted in the previous year.
The Quarterly Information as of June 30, 2008 was reclassified, when applicable, for
comparison purposes, as described below:
44
01987-9
June 30, 2009
LIGHT S.A.
03.378.521/0001-75
Income Statement
Period from April 01 to June 30, 2008
Published
Adjustments to Law
11,638/07 and MP449/08
(ii)
2,111
Cost of Goods and/or Services Sold
Personnel
(34,148)
(72,779)
Reclassification PLR
(i)
2,725
-
Operating Expenses/Revenues
Selling expenses
General and administrative expenses
Other operating revenue
Other operating expenses
(66,055)
(129,299)
-
302
1,298
-
2,853
(291)
(5,362)
(291)
(5,362)
-
291
5,362
(192,091)
-
(1,688)
(4,325)
-
Non-operating Revenue
Revenues
Expenses
Deferred Income Tax
Interest/Statutory Contributions
Interest
-
Adjusted
(31,423)
(70,668)
(65,753)
(125,148)
(291)
(5,362)
(193,779)
(4,325)
Income Statement
Period from January 01 to June 30, 2008
Published
Adjustments to Law
11,638/07 and MP449/08
(ii)
5,205
Cost of Goods and/or Services Sold
Personnel
(73,202)
(145,315)
Reclassification PLR
(i)
7,680
-
Operating Expenses/Revenues
Selling expenses
General and administrative expenses
Other operating revenue
Other operating expenses
(145,080)
(212,840)
-
853
3,657
-
(1,107)
16,521
(4,298)
16,521
(4,298)
-
(16,521)
4,298
(180,861)
-
(1,393)
(182,254)
(12,190)
-
(12,190)
Non-operating Revenue
Revenues
Expenses
Deferred Income Tax
Interest/Statutory Contributions
Interest
-
Adjusted
(65,522)
(140,110)
(144,227)
(210,290)
16,521
(4,298)
-
(i) For most appropriate presentation, management and employee profit sharing were
classified as profit sharing result – PLR under income tax.
(ii) In the preparation of the financial statements for year ended December 31, 2008, the
Company and its subsidiaries adopted for the first time the changes in corporate
legislation introduced by Law nr. 11,638/07 and Provisional Measure nr.449/08. The
quarterly information as of June 30, 2008, presented herein, was also adjusted to reflect
changes resulting from the adoption of said laws and CPCs issued in 2008, for the
comparison of the results for the quarters and six-month periods ended in June,
reconciliated as follows:
45
01987-9
June 30, 2009
LIGHT S.A.
03.378.521/0001-75
3.
REGULATORY ASSETS AND LIABILITIES
Consolidated
Current
6/30/2009
3/31/2009
Non-current
6/30/2009
3/31/2009
Assets
Consumers, concessionaries and permissionaires (Note 5)
Tariff Readjustment - TUSD
36,642
36,642
52,507
52,507
Prepaid expenses (Note 7)
Portion "A" - (a)
CVA - (b)
Other regulatories - (c)
84,838
75,536
9,302
220,946
56,837
146,061
18,048
229,665
229,665
-
216,399
216,399
-
TOTAL ASSETS
121,480
273,453
229,665
216,399
Other payables (Note 17)
Portion "A" - (a)
CVA - (b)
Other regulatories - (c)
(71,558)
(16,220)
(49,551)
(5,787)
(105,937)
(94,901)
(11,036)
(977)
(977)
-
(1,343)
(1,343)
-
TOTAL LIABILITIES
(71,558)
(105,937)
(977)
(1,343)
49,922
167,516
TOTAL
a)
-
228,688
-
215,056
Rationing:
The electric power distribution and generation companies revenues (“free energy”) for
the rationing period is being recovered through the “Extraordinary Tariff Recovery RTE”, which agreement only allowed for the billing related to revenue lost of Light
SESA through February 2008. In June 2008, Light SESA wrote off the items related to
the extraordinary tariff recovery, free energy and its respective provisions, which were
not recovered within the 74-month term set forth by ANEEL in the Emergency Program
for Reduction of Electric Power Consumption (PERCEE), in the amount of R$291,448,
with no impact on results of that period.
The Company has lawsuits, both within ANEEL and in the judiciary scopes, seeking the
indemnity of such losses.
46
01987-9
LIGHT S.A.
June 30, 2009
03.378.521/0001-75
Due to the maturity of term for the RTE billing (Loss of Revenue), the Variation in
“Portion A” items (from January 1, 2001 to October 25, 2001) started to be recovered
from March 2008, as approved by ANEEL Directive Release nr. 267/04.
Pursuant to ANEEL’s rules, the additional tariff should remain effective until the end of
the month when the ratified amount would be fully amortized, duly remunerated. In case
of Light, this amortization occurred by mid June 2009, and billing until the end of the
month exceeded the amounts ratified by R$16,220, which will return to consumers upon
the 2009 Tariff Adjustment, also pursuant to ANEEL’s rules. Said amount is recorded in
other debts, under current liabilities.
b) Memorandum account for Portion “A” Items Variation (“CVA”)
Records the variations during the period and the annual tariff adjustment based on the
Central Bank overnight rate (“SELIC”) for: purchase of energy; the tariff for
transportation of electric power from Itaipu; the Fuel Usage Quota (“CCC”); the
Economic Development Account (“CDE”); System service charges (“ESS”); the tariff
for the use of transmission facilities of the basic electric network; and compensation for
the use of water resources (“CFURH”).
The amounts recorded under current (assets and liabilities) refer to amounts already
approved by ANEEL in November 2008, when the tariff review was concluded. The
amounts recorded under non-current represent the formation of CVA to be approved in
the next tariff adjustment (November 2009).
Breakdown of CVA
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c)
Other Regulatory Assets/Liabilities
Finance costs transferred in the second tariff review of subsidiary Light SESA in
accordance with Normative Resolution nr.734 of November 4, 2008, as per chart below:
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4.
CASH AND CASH EQUIVALENTS
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5.
CONSUMERS,
CONCESSIONAIRES
AND
PERMISSIONAIRIES
(CLIENTS)
a) The balances of debt installments are adjusted to present value, when applicable,
pursuant to Law nr. 11,638/07. The calculation of present value is made for each
transaction of consumers’ debts renegotiation (debt payment by installments), based on
the interest rate which reflects the term and risk of each transaction, being about 1%
p.m.
b) In 2Q09, bad debts were written off in the amount of R$102,547 (R$201,516 in
1Q09), amounting to R$304,063 in the six-month period.
The allowance for doubtful accounts was set up in amounts deemed sufficient to cover
eventual losses in the realization of credits and it is in accordance with ANEEL’s
instructions summarized below:
Clients with significant debts (large clients):
- Individual analysis of balance receivable from consumers, by consumption class,
deemed unlikely to be received.
In other cases:
- Residential consumers – past due for more than 90 days;
- Commercial consumers – past due for more than 180 days;
- Industrial and rural consumers, public sector, public lighting, public utilities and other
– past due for more than 360 days
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Overdue and falling due balances related to electric power billed and renegotiated debts
are distributed as follows:
6.
TAXES
a) Refers to negative balance tax credits recoverable arising from refunds from
temporary cash investments and government agencies in the amount of R$2,111 and
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prepaid Income Tax and Social Contribution credits for 2005, 2006, 2007 and 2008
amounting to R$173,380. The variation, for the quarter, of the amounts results of the
monthly adjustment based on the Selic rate in the amount of R$6,058, new credits in the
amount of R$6,082 and compensations in the amount of R$44,096, R$8,960 of
withholding tax and R$35,136 of credits offset in 2008.
b) The tax credits include amounts expected to be recoverable within 10 years, as set
forth in referred CVM Instruction 371/02 and in the assumption of not being barred by
law according to income tax Regulation, for this reason, a provision was recorded for
the non-recovery in the amount of R$118,462. On June 30, such provision was reversed
because of the transactions in the period, which generated a higher utilization of tax
credits.
Deferred taxes have been established based on the assumption of future realization,
taking into account:
(i)
Income tax loss carryforward and negative social contribution basis – these shall
be carried forward indefinitely, but realization is limited to 30% of net income for
each future fiscal year.
(ii) Temporary
differences – these will be realized upon the payment or reversal of the
provisions and/or the actual loss of doubtful accounts.
Deferred tax assets are as follows:
c) Tax Debt Refinancing Program – PAES (REFIS II) – Up to June 30, 2009, Light
SESA has paid 72 installments, out of 120 installments. The installments were
calculated based on the total debt divided by the number of installments, subject to the
“TJLP” (long-term interest rate).
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d) On February 20, 2003, Light SESA filed Writ of Mandamus 2003.51.01.005514-8
requesting an injunction that would release it from the payment of levied income and
social contribution taxes on:
(i) Profits earned by the companies LIR Energy Limited (LIR) and Light Overseas
Investment Limited (LOI) before they are effectively available, in which case
sole paragraph, Article 74 of Provisional Measure 2,158-35, of August 24, 2001
(MP 2,158-35), for the periods from 1996 to 2001, shall not apply;
(ii) Profits earned by the companies LIR and LOI before they are effectively
available, in which case Article 74, caput, of Provisional Measure 2,158-35/01,
for calendar year 2002 and following years shall not apply;
Light SESA obtained an injunction that is still effective, given that the Appeal filed by
Light against the overruling of the writ of mandamus was received with a dual effect
(returnable and suspensive), guaranteed by a definitive decision by the Superior Court of
Justice. With reference to the merits, the Appeal awaits judgment.
Based on this court decision, Light SESA suspended the payment of income and social
contribution taxes levied on taxable income of 2004, 2005, 2006, 2007 and 2008
verified due to addition of the profits earned by companies located abroad to these taxes
calculation basis. The provision on June 30, 2009 is R$298,618 (R$292,710 on March
31, 2009), already including the monetary restatement by Selic rate.
e) The amount of the state VAT (“ICMS”) recovery on June 30, 2009 includes
R$55,173 (R$62,500 on March 31, 2009) of credits deriving from the renegotiations of
the CEDAE debt in July and December 2006.
f) Refers to tax credits to offset derived from the adjustment of PIS and COFINS
calculation bases in the period from February 2004 through April 2008, due to the use of
some segment charges, such as calculation basis deduction from these taxes. In relation
to the period from November 2005 through April 2008, the amount related to credits
assessed is being transferred to consumers and the amount of R$26,993 (R$33,446 on
March 31, 2009) is recorded in Other Payables (see Note 17).
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Reconciliation of effective and nominal income and social contribution taxes rates:
On May 27, 2009, the Law nr. 11,941/09 was approved related to tax debt installment
payment. The Company is analyzing the impacts of this law and preliminary studies
reveal a benefit, in view of the possibility of paying interest rates and tax debts fines
with tax losses.
7.
PREPAID EXPENSES
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8.
OTHER RECEIVABLES
a) Out of the amount recorded, R$6,155 (R$5,710 on March 31, 2009) have already
been authorized by ANEEL, however, they are pending receipt, and R$10,310
(R$11,764 on March 31, 2009) are under ratification phase.
9.
INVESTMENTS
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INFORMATION ON SUBSIDIARIES
CHANGES IN
COMPANIES
INVESTMENTS
IN
SUBSIDIARIES
AND
ASSOCIATED
10. PROPERTY, PLANT AND EQUIPMENT
a) The balance of special obligations derives from the consumer’s financial income,
appropriation of the Federal Government and federal, state and municipal funds to
finance the work necessary to meet the electric power demand.
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Pursuant to ANEEL Regulatory Resolution 234, special obligations linked to
concession shall be amortized at same property, plant and equipment depreciation rates,
using an average rate from the second cycle of periodic tariff review (November 2008).
Thus, annual amortization average rate of special obligations is 3.5% and was
determined taking into account distribution registration units.
(i) There are no assets or rights belonging to the Federal Government in use at the
subsidiary Light SESA.
(ii) Construction in progress includes inventories of materials for projects totaling
R$58,535 as of June 30, 2009 (R$69,437 on March 31, 2009) and a provision for
inventory loss of R$2,599 (R$1,488 on March 31, 2009).
(iii) In 2Q09, part of the expenses with the central management, in the amount of
R$5,671 (R$5,541 in 2Q08), amounting to R$9,692 in 1H09 (R$9,841 in 1H08)
was capitalized in Property, Plant and Equipment recorded by transfer from
operating expenses group - general and administrative expenses.
11. INTANGIBLE ASSETS
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Grupo Light classifies Software as intangible assets, which are amortized at a rate of
20% p.a., and Right-of-Ways, which are not amortized, as represent the right to use
certain areas of land, usually associated with a Transmission and Distribution Line.
12. SUPPLIERS
13. LOANS, FINANCING AND FINANCIAL CHARGES
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In addition to the collaterals indicated above, loans are guaranteed by other collaterals in
the amount of R$33,450, guarantee of Light S.A. and receivables in the approximate
amount of R$48,840.
In May 2009, Light SESA concluded the 1st issuance of promissory notes, in the amount
of R$100,000, in an operation coordinated by Votorantim, Itaú-BBA, Bradesco,
Citibank and BNP. Promissory notes are remunerated at 125% of CDI rate, 1-year
maturity and were redeemed in advance upon the conclusion of the 6th issuance of
simple debentures of Light SESA – see Note 32.
The principal of loans and financing matures as follows (excluding financial charges):
In percentage terms, the variation of major foreign currencies and economic ratios in the
period, which are used to adjust loans, financing and debentures, was as follows in the
periods:
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Covenants
The funding of CCB Bradesco, loans with ABN Amro and BNDES FINEM, classified
as current and non-current requires that the Company maintain certain debt ratios and
interest coverage. In the period ended June 30, 2009, the Company and its subsidiaries
are in compliance with all required debt covenants.
14. DEBENTURES AND FINANCIAL CHARGES
The portions related to the principal of debentures have the following maturities
(excluding financial charges):
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Covenants
Classified in the current and non-current, the 5th Issuance of Debentures requires the
maintenance of indebtedness indicators and coverage of interest rates. In the period
ended June, 2009, the Company and its subsidiaries complied with all the covenants
required.
15. REGULATORY CHARGES – CONSUMER CONTRIBUTIONS
Consolidated
6/30/2009
3/31/2009
CURRENT
Fuel usage quota – CCC
Energy development account quota – CDE
Reversal global reserve quota – RGR
Charges for capacity and emergency acquisition
10,954
17,173
6,699
76,044
110,870
8,811
17,173
6,699
76,044
108,727
16. PROVISION FOR CONTINGENCIES
Light S.A. and its subsidiaries are party in tax, labor and civil lawsuits and regulatory
proceedings in several courts. Management periodically assesses the risks of
contingencies related to these proceedings, and based on the legal counsel’s opinion
records a provision when unfavorable decisions are probable and whose amounts are
quantifiable. In addition, the Company does not record assets related to lawsuits with a
less-than-probable chance of success, as they are considered uncertain.
Provisions for contingencies are as follows:
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16.1 Labor Contingencies
There are 3,863 labor-related legal proceedings in progress (3,971 on March 31, 2009)
in which the Company and subsidiaries are the defendants. These labor proceedings
mainly involve the following matters: overtime; hazardous work wage premium; equal
pay; pain and suffering; subsidiary/joint liability of employees from outsourced
companies; difference of 40% fine of FGTS (Government Severance Indemnity Fund
for Employees) derived from the adjustment due to understated inflation.
We point out that in December 2007, the subsidiary Light SESA was notified to reply to
a public civil action filed by the Public Prosecution Office of Labor of the 1st Region,
contesting on court the fact that the Company engages other companies to provide
services related to its main and ancillary activities. Referred lawsuit was granted relief
on April 4, 2008. A suspensive effect was granted to the Ordinary Appeal lodged by
Light SESA. On March 25, 2009, Light’s Ordinary Appeal was heard and granted by
unanimous vote of the 8th Chamber of the Regional Labor Court. Light filed a review
appeal restricted to standing to sue. Light SESA’s legal counsels believe in a favorable
decision in these actions.
16.2 Civil Contingencies
The Company and its subsidiaries are defendants in approximately 40,220 civil legal
proceedings (39,866 on March 31, 2009), of which 13,375 are in the state and federal
courts (Civil Proceedings), among which those claims that can be accurately assessed
amounting to R$494,646 (R$609,132 on March 31, 2009) and 26,845 are in Special
Civil Courts, with total claims amounting to R$365,314 (R$399,072 on March 31,
2009).
a) The Provision for civil proceedings comprises lawsuits in which Light SESA is the
defendant and it is probable the claim will result in a loss in the opinion of the
respective attorneys. The claims mainly involve alleged moral and property damage
as well as consumers challenging the amounts paid.
The Company is also party to civil proceedings that Management believes that risk of
loss are less than probable, based on the opinion of its legal counsels. Therefore, no
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provision was established. The amount, currently assessed, represented by these
claims is R$330,819 (R$335,856 on March 31, 2009).
Light SESA is also involved in Public and Class Civil Actions, contesting in court
fees, rates and charges, contracts, equipment, “Cruzado Plan”, interest, among others.
Up to June 30, 2009, the Management could not assess the amount involved in each
one of these actions due to their nature, comprehensiveness and need of settlement of
these claims.
On November 18, 2008, the Company, managers and shareholders took cognizance
of a class civil action filed by an individual at the Court of Belo Horizonte, in the
state of Minas Gerais, alleging among others, irregularities in the acquisition of share
control of Light S.A.. The attorneys defending this action deem as remote the chances
of an unfavorable decision.
b) Lawsuits in the Special Civil Court are mostly related to matters regarding consumer
relations, such as improper collection, undue power cut, power cut due to
delinquency, network problems, various irregularities, bill complaints, meter
complaints and problems with ownership transfer. There is a limit of 40 minimum
monthly wages for claims under procedural progress at the Special Civil Court.
Accruals are based on the moving average of the last 12 months of condemnation
amount.
c) There are civil actions in which some industrial consumers have challenged, in court,
the increases in electric power tariff rates approved in 1986 by the National
Department of Water and Electric Power (“Cruzado Plan”).
16.3 Tax Contingencies
The provisions established for tax contingencies are as follows:
a) PIS/COFINS: Light SESA was party of two lawsuits contesting on court the charge of
these contributions, pursuant to Law 9,718/98, as follows:
In the first one, Light SESA challenged in court the changes introduced by said Law
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concerning (i) the increase in their calculation basis and (ii) increase in COFINS rate
from 2% to 3%. In the appeal filed by Light SESA in Supreme Federal Court it was
rendered a final and unappealable decision regarding the increase of calculation basis,
considering an unconstitutionality action of Article 3, paragraph 1, of Law 9,718/98,
with the respective reversal of the provision taking place in the 2nd quarter of 2008, in
the amount of R$432,358, in counterpart to the “financial expenses” item.
In the second one, Light SESA has been challenging the lapse of enforceability of part
of the amounts claimed in the January 31, 2007 Collection Letter issued by the Internal
Revenue Service, as the federal tax authorities did not request payment within the legal
term. A temporary injunction was granted and maintained by the Regional Federal Court
to suspend the charge, and currently the appeals to Higher Courts are pending judgment.
In relation to the merits, the judgment in low court is awaited, and, according to the
Company’s legal counsels, the decision is estimated as a possible loss.
On June 30, 2009, the amount of R$219,652 (R$217,156 on March 31, 2009) related to
the increase in the COFINS rate from 2% to 3% remains provisioned.
b) PIS/COFINS – RGR and CCC: The contingency amount corresponds to the portion
not included in PAES payment in installments regarding the application of the ex-officio
fine, in which Light SESA was not successful in the regulatory cases but had a favorable
court decision, in which the Company awaits the appeal decision of the Federal
Government. This amount also includes the portion corresponding to the increase in the
COFINS rate related to the period of April 1999 to December 2000, which is being
argued in court.
c) INSS – Tax Infringement Notices: In December 1999, the INSS issued tax
infringement notices to the Company on the grounds of joint liability, withholdings on
services rendered by contractors, and levy of the social security contribution on
employee profit sharing. The variation in the amount between June 30, 2009 and March
31, 2009 is due to the adjustment based on the SELIC rate.
d) INSS – Quarterly: Light SESA challenges the constitutionality of Law 7,787/89,
which increased the rate of social security contribution taxes assessed on payroll, noting
that there was a consequent increase in the calculation basis in the period from July to
September 1989. Light SESA was able to offset the social security contribution amounts
payable according to advance protections that was previously granted. Management
recorded provision, for the total amount of the tax infringement notices issued by the
INSS based on the legal counsel’s opinion. The variation in the amount between June
30, 2009 and March 31, 2009 is due to the adjustment based on the SELIC rate.
e) Law nr. 8,200/91: The provision recorded is due to the fully use of the 1991 and 1992
depreciation expenses, and no longer apply the provisions of Law 8,200/91, Article 3,
item I. The lawsuit was accepted by the lower and higher courts, and the appeal filed by
the Federal Government in Supreme Federal Court is pending judgment. The variation
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in the amount between June 30, 2009 and March 31, 2009 is due to the adjustment based
on the SELIC rate.
f) ICMS: The provision recorded is mainly related to litigation on the application of
State Law nr. 3,188/99, which limited the manner of receiving credits from ICMS levied
in the acquisitions of assets allocated to property, plant and equipment, requiring the
receipt in installments, while this limitation was not provided for in the Complementary
Law 87/96. There are other tax infringement notices which have been challenged at the
regulatory and judicial levels. The adjustment of this provision is annually carried out, in
January, by UFIR (Fiscal Reference Unit).
g) Social Contribution: The provision recorded is related to (i) deductibility of interest
on capital paid to shareholders in calendar year 1996 from the CSLL (Social
Contribution on Profit) tax basis, in which the preliminary injunction was granted and a
guarantee was partially granted, and the appeal filed by the Federal Government is
pending judgment; and (ii) lack of addition of the amounts related to the PIS/COFINS
provision to the social contribution calculation basis, the payment of which was
suspended. With the completion of administrative level, a tax foreclosure has been filed
and the Company made a full deposit of litigated amount, as well as it filed a motion to
stay execution. The variation of amount between June 30, 2009 and March 31, 2009
refers to the adjustment by SELIC.
h) Economic Intervention Contribution Credit (“CIDE”): It is the provision related to
CIDE levied on service payments remitted abroad. The low court decision was
unfavorable, and Light SESA awaits the appeal judgment. Since December 2003, the
subsidiary has been paying the amounts due.
The Company and its subsidiaries are also parties to tax, regulatory and legal
proceedings in which Management, based on the opinion of its legal counsels, believes
the risks of loss are possible, and based on that no provision was recorded. Currently,
the quantifiable amount of these proceedings is R$1,152,300 (R$1,128,900 on March
31, 2009).
The main tax proceedings deemed as possible loss or that had effects in the second
quarter of 2009 are pointed out as follows:
(i) IN 86. Light SESA was subjected to a fine by the Internal Revenue Service due to
the fact that the Company did not comply with service of process for the delivery of
electronic files between 2003 through 2005. The challenge was deemed groundless.
Currently, the voluntary appeal lodged by Light is pending judgment. The restated
amount of the fine up to June 30, 2009 is R$232,200 (R$227,700 on March 31, 2009).
(ii) ICMS (Aluvale). These are tax foreclosures related to the ICMS deferral in the
supply of electric power for the consumer ALUVALE, an electro-intensive industrial
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consumer. A motion to stay was filed. Motions to stay were deemed groundless in three
tax foreclosures and Light brought the corresponding appeals. The amount of these tax
foreclosures at June 30, 2009 is R$168,800 (R$168,800 on March 31, 2009).
(iii) IRRF – Disallowance of tax offset. Light was given a decision informing about the
non-ratification to offset IRRF credits over temporary cash investments and IRRF of
electricity bills paid by public authorities, which were offset due to negative balance of
IRPJ in 2002. As a result, Light filed a Motion to Disagree, which is pending judgment.
The amount involved on June 30, 2009 is R$176,100 (R$174,000 on March 31, 2009).
(iv) Other. In addition to the cases mentioned above, there are other judicial and
administrative litigations, deemed as probable losses by the legal counsels, mainly (a)
ICMS on low-income subsidy; (b) transfer of ICMS credit (RHEEM company); (c) PIS,
COFINS, IRPJ and CSLL Voluntary Disclosure; (d) ISS on regulated services; (e) nonratification of the COFINS offset with IRPJ negative balance; (f) no ratification of
COFINS offset with CSLL negative balance – 1999 calendar year; and (g) no
ratification of COFINS offset with CSLL negative balance – 2002 and 2003 calendar
years. The amount involved in these litigations was R$149,400 on June 30, 2009
(R$149,200 on March 31, 2009).
(v) Up to June 30, 2009, Light SESA received 18 lawsuits (7 on March 31, 2009) filed
by business clients challenging PIS and COFINS transferred to electricity bill, pleading
to refund all amounts unduly paid. According to the opinion of its attorneys, the chances
of loss are deemed as possible, and no provision was recorded.
(vi) Light SESA also has several discussions related to the Municipal Real Estate Tax
(IPTU) and the Rural Land Tax (ITR), whose probability of loss is deemed as possible,
according to its attorneys, and for this reason a provision was not recorded. The amount
involved in these proceedings, as of June 30, 2009 is R$302,200 (R$302,200 on March
31, 2009).
Remote Losses
Proceedings deemed as remote losses by the Company’s and subsidiaries’ legal counsels
were not provisioned.
16.4 Other Contingencies
a) Administrative Regulatory Contingencies
The subsidiary Light SESA has regulatory contingencies derived from administrative
challenges against ANEEL:
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a.1) Low Income – The Monitoring Report RF-LIGHT-04/2007-SFE of August 2007
was prepared by ANEEL, between July 2, 2007 and July 13, 2007, challenged the
granting of the social tariff to some consumers in the period and deemed as undue part
of the subsidies ratified and received by Light SESA from Eletrobrás in the amount of
R$266,379. The Company recorded a provision in the amount of R$53,381, to cover the
probable risk of having to refund part of the subsidy already received.
a.2) ANEEL’s Infringement Notice 009/2005 – the notice was issued on March 15, 2005
under the argument that Light SESA had: (i) incorporated the subsidiaries LIR Energy
Limited and Light Overseas Investments without prior consent of ANEEL (R$1,144);
(ii) performed operations with these companies without prior consent of ANEEL –
(R$2,287); and (iii) not complied with ANEEL’s order of cancelling operations and
closing companies’ activities (R$3,431). After appeals had been filed, the fine related to
item (iii) was excluded, and fines associated with items (i) and (ii) were maintained. The
penalty associated to item (ii) was paid, while a writ of mandamus was filed regarding
the fine related to item (i), with court deposit in the amount of R$1,655 (original amount
restated by the SELIC rate up to the deposit date). After decision rendered on November
23, 2007 of refusing writ of mandamus security, the Requests of Clarification were filed,
and consequently rejected by decision rendered on December 17, 2007. Against the
judgment, Light SESA filed an appeal on January 25, 2008, requiring a supersedeas to
that appeal. On September 10, 2008, a decision was rendered to which an appeal was
filed for remanding purposes only. Finally, on September 17, 2008, Bill of Review
2008.0.00.046455-8 was filed, in order to obtain the supersedeas to the appeal, avoiding
the fact that the amounts expended in the lawsuit were verified. The Bill of Review was
distributed to the Federal Superior Court Judge, who still did not issue an opinion on the
request of advance protection. The amount as of June 30, 2009 is R$2,048 (R$2,001 on
March 31, 2009).
b) Environmental Contingencies
The public civil action proposed by the Municipality of Barra do Piraí against Light
SESA, in which the plaintiff requests the remediation and recovery of several
environmental damages caused by the construction of the Santa Cecília and Santana
plants, as an integral part of the transposition system of waters from the Rio Paraíba do
Sul basin to the Rio Guandu basin, feeding the Fontes, Nilo Peçanha and Pereira Passos
plants. Currently, the activity ceased, as the parties are trying to reach an agreement.
There is a collection lawsuit concerning this public civil action which alleges that
certain obligations were not complied with during the construction of the Santa Cecília
e Santana plants, particularly regarding the aggradation and reforestation of the region.
The suggested lawsuit amounts to R$900. The ruling of the lawsuit equally depends on
expert examination and it is not possible to estimate the value of a possible adverse
judgment.
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The sum of historical lawsuit values is approximately R$16,000, and the likelihood of
loss of both actions is possible. Despite this being a possible outcome, as of June 30,
2009, the provision was R$6,000. Due to deverticalization, this provision was recorded
at Light Energia.
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17. OTHER PAYABLES
18. PENSION PLAN AND OTHER EMPLOYEE BENEFITS
Light SESA sponsors Fundação de Seguridade Social – BRASLIGHT, a nonprofit
closed pension entity, whose purpose is to provide retirement benefits to the Company’s
employees and pension benefits to their dependents.
BRASLIGHT was incorporated in April 1974 and has three plans - A, B and C –
established in 1975, 1984 and 1998, respectively, with about 96% of the active
participants of the other plans having migrated to Plan C.
Plans A and B are of the Defined Benefit type and Plan C provides mixed benefit. All
are currently in effect.
On October 2, 2001, the Secretariat for Pension Plans (“SPC”) approved an agreement
for resolving the technical deficit and refinancing unamortized reserves, which are being
amortized in 300 monthly installments beginning July 2001. Up to May 2009, they had
been adjusted based on the IGP-DI (general price index – domestic supply) variation
(with one-month lag) and actuarial interest of 6% per annum. As of June 2009, IPCA
(with one-month lag) replaced IGP-DI as restatement index.
Transactions occurred in the quarters in net actuarial liabilities were the following:
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19. RELATED-PARTY TRANSACTIONS
The Company’s main shareholders are:

Controlling Group - Rio Minas Energia Participações S.A – RME, jointly-owned
subsidiary of Companhia Energética de Minas Gerais – CEMIG, Andrade
Gutierrez Concessões, Luce do Brasil Fundo de Investimento em Participações
and Equatorial Energia.

BNDESPAR
Direct and indirect interests in operating subsidiaries are outlined in the Note 1.
A summary of related-party transactions occurred in the first six-month periods of 2009
and 2008 is presented below:
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* Equatorial Energia S.A.’s subsidiary.
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A summary of agreements executed with related parties is presented below:
* Equatorial Energia S.A.’s subsidiary.
Related-party transactions have been executed under usual market conditions.
Additional information – agreements in progress
Light, in order to potentialize its capacity of developing and implementing new
generation projects and taking into account the recognized capacity in this area of its
shareholder Companhia Energética de Minas Gerais – CEMIG (“Cemig”), Light entered
into Heads of Agreement (“Agreement”) which, among other provisions, establishes that
the parties will jointly prepare business plans for the development and implementation
of energy generation projects (“Generation Projects”). The Agreement also determines
that the parties will execute specific instruments for each of the Generation Projects to
be implemented and the Company’s interest directly or by means of its subsidiaries in
each one of these consortia will be fifty-one percent (51%) and CEMIG’s interest,
directly or by means of its subsidiaries will be forty-nine percent (49%).
Light, which already has in its portfolio projects under development, formalized by
means of its subsidiaries, Lightger Ltda., Itaocara Energia Ltda. and Light Energia S.A.,
three consortium agreements with Cemig Geração e Transmissão S.A. (“Cemig GT”),
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wholly-owned subsidiary of Cemig, aiming the exploration of hydroelectric projects in
the regions of Paracambi, Itaocara and Lajes, respectively.
All private instruments mentioned above were executed by the parties under suspensive
conditions, therefore, their effectiveness relies on obtaining authorizations or
endorsements required by regulatory authorities, including but not limited to ANEEL.
20. SHAREHOLDERS’ EQUITY
a) Capital Stock
The capital of Light S.A is represented by 203,934,060 common shares, without par
value outstanding as of June 30, 2009 recorded as Capital Stock in the total amount of
R$2,225,822 as follows:
At a meeting held on May 8, 2009, the Board of Directors approved the Company’s
capital stock increase, resulting from the exercise of rights inherent to the warrants
occurred on April 3, 2009. The increase was made by means of the issuance of 282
outstanding common shares, without par value.
Light S.A. is authorized to increase its capital up to the limit of 203,965,072 common
shares through resolution of the Board of Directors, regardless of amendments to the
bylaws. However, this increase is to occur exclusively upon the exercise of the warrants
issued, strictly pursuant to the conditions of the warrants (Bylaws, Article 5, paragraph
2).
b)
Capital Reserve
Light S.A., pursuant to CVM Resolution nr. 562 issued on December 17, 2008,
recorded in Shareholders’ Equity, under Capital Reserves, the amount of R$42,504
(R$32,436 on March 31, 2009) related to the stock options granted to few officers,
corresponding to the vesting period already incurred up to June 30, 2009, as per Note
31.
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21. ELECTRIC POWER SUPPLY
Consolidated
04.01 to 06.30
Number of billed sales (1) (2)
2009
2008
GWh (1)
2009
R$
2008
2009
2008
Residential
Industrial
Commerce, services and other
Rural
Public sector
Public lightning
Public utility
Own consumption
Billed sales
ICMS (State VAT)
Unbilled sales
3,651,775
12,002
269,417
11,016
10,159
432
1,309
328
3,956,438
-
3,610,915
12,612
271,501
10,956
9,585
198
1,297
328
3,917,392
-
1,860
459
1,477
12
352
171
271
17
4,619
-
1,821
459
1,452
12
330
171
266
18
4,529
-
610,268
106,182
466,013
2,264
111,313
25,707
55,388
1,377,135
504,911
(49,962)
616,794
100,778
462,521
2,245
84,650
25,502
54,666
1,347,156
483,264
(36,557)
TOTAL SUPPLY (3)
3,956,438
3,917,392
4,619
4,529
1,832,084
1,793,863
1,134
353
1,487
1,118
209
1,327
80,931
13,815
94,746
72,788
8,930
81,718
6,106
5,856
1,926,830
1,875,581
Electric power auction
Short-term energy
TOTAL SUPPLY
OVERALL TOTAL
3,956,438
3,917,392
(1) Not revised by the independent auditors
(2) Number of billed sales in June 2009, with and without consumption
(3) Light SESA
Consolidated
01.01 to 06.30
Number of billed sales (1) (2)
2009
2008
GWh (1)
2009
R$
2008
2009
2008
Residential
Industrial
Commerce, services and other
Rural
Public sector
Public lightning
Public utility
Own consumption
Billed sales
ICMS (State VAT)
Unbilled sales
3,651,775
12,002
269,417
11,016
10,159
432
1,309
328
3,956,438
-
3,610,915
12,612
271,501
10,956
9,585
198
1,297
328
3,917,392
-
4,024
892
3,059
25
712
339
536
34
9,621
-
3,849
910
2,984
24
667
342
539
36
9,351
-
1,328,805
208,486
961,038
4,809
223,146
51,116
108,224
2,885,624
1,068,876
(21,026)
1,251,189
187,571
920,638
4,689
158,512
50,401
105,417
2,678,417
981,721
(44,801)
TOTAL SUPPLY (3)
3,956,438
3,917,392
9,621
9,351
3,933,474
3,615,337
2,259
482
2,741
2,289
249
2,538
159,295
19,602
178,897
166,837
19,507
186,344
12,362
11,889
4,112,371
3,801,681
Electric power auction
Short-term energy
TOTAL SUPPLY
OVERALL TOTAL
3,956,438
3,917,392
(1) Not revised by the independent auditors
(2) Number of billed sales in June 2009, with and without consumption
(3) Light SESA
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22. OTHER REVENUES
23. CONSUMER CHARGES (Operating Revenue Deductions)
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24. OPERATING COSTS AND EXPENSES
04.01 to 06.30
Nature of the expense
Personnel and management
Material
Outsourced services
Electricity purchased for resale (Note 25)
Provision for contingencies
Other
Total
Consolidated
Operating Expenses
Selling
General and Adm
Cost of Service
Electric Power
Operation
(811,854)
(811,854)
(46,045)
(5,299)
(27,984)
(67,177)
(4,274)
(150,779)
(4,851)
(422)
(14,310)
(252)
(66,543)
(252)
(86,630)
Electric Power
(1,683,847)
(1,683,847)
(62,663)
(6,465)
(63,903)
(811,854)
(76,078)
(66,543)
(18,494)
(22,802)
(1,128,802)
Consolidated
Operating Expenses
Cost of Service
01.01 to 06.30
Nature of the expense
Personnel and management
Material
Outsourced services
Electricity purchased for resale (Note 25)
Provision for contingencies
Other
Total
(11,767)
(744)
(21,609)
(8,649)
(18,494)
(18,276)
(79,539)
(Reclassified)
2008
2009
Operation
Selling
(78,634)
(8,966)
(53,439)
(134,587)
(8,973)
(284,599)
General and Adm
(8,284)
(714)
(27,327)
(503)
(126,708)
(527)
(164,063)
(37,838)
(1,258)
(41,942)
(17,330)
(23,881)
(38,384)
(160,633)
(49,853)
(3,579)
(64,358)
(715,575)
(80,312)
(47,384)
(63,936)
(18,540)
(1,043,537)
(Reclassified)
2008
2009
(124,756)
(10,938)
(122,708)
(1,683,847)
(152,420)
(126,708)
(23,881)
(47,884)
(2,293,142)
(103,949)
(7,490)
(126,692)
(1,500,757)
(159,365)
(107,643)
(79,815)
(44,673)
(2,130,384)
25. ELECTRIC POWER PURCHASED FOR RESALE
Consolidated
GWh(1)
04.01 to 06.30
2009
CVA (Recoverable Cost Variation)
Connection charges
Spot market energy
Network usage charges
Itaipu
UTE Norte Fluminense
Other contracts and electric power auctions
National Electric System Operator (O.N.S.)
1,404
1,583
3,519
6,506
R$
2008
144
1,425
1,584
2,992
6,145
2009
36,794
(4,822)
13,113
(95,659)
(160,790)
(239,394)
(356,869)
(4,227)
(811,854)
2008
(22,551)
(3,882)
(47,898)
(86,599)
(121,904)
(189,708)
(240,116)
(2,917)
(715,575)
(1) Not revised by the independet auditors
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Consolidated
GWh(1)
01.01 to 06.30
2009
CVA (Recoverable Cost Variation)
Connection charges
Spot market energy
Network usage charges
Itaipu
UTE Norte Fluminense
Other contracts and electric power auctions
National Electric System Operator (O.N.S.)
568
2,791
3,150
7,292
13,801
R$
2008
588
2,845
3,168
6,338
12,939
2009
64,318
(9,574)
(53,237)
(194,951)
(343,130)
(476,191)
(664,037)
(7,045)
(1,683,847)
2008
(8,202)
(7,764)
(167,910)
(173,102)
(249,485)
(379,501)
(509,791)
(5,002)
(1,500,757)
(1) Not revised by the independet auditors
26. FINANCIAL INCOME
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27. FINANCIAL INSTRUMENTS
Below, we compared book and market values of Companies’ assets and liabilities:
a) Policy for utilization of derivatives
The policy for utilization of derivative instruments approved by the Board of Directors
determines the debt service protection (principal plus interest and commissions)
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denominated in foreign currency to mature within 24 months, forbidding any utilization
for speculative purposes, whether in derivatives or any other risk assets.
In line with provisions of this policy, the Company and its subsidiaries do not have
futures contracts, options, swaptions, swaps with regret option, flexible options,
derivatives embedded in other products, structured operations with derivatives and
“exotic derivatives”. In addition, it is evidenced through the chart above that the single
derivative instrument used by the Company and its subsidiaries is the non-cash currency
swap (US$ versus CDI), whose Contractual Notional Value corresponds to the amount
of foreign currency-denominated debt service to expire within 24 months, in line with
the policy for the utilization of aforementioned derivatives.
b) Risk management and objectives achieved
The management of derivative instruments is conducted by means of operating
strategies, aiming liquidity, profitability and safety. The control policy consists of
permanently inspecting the policy compliance in the utilization of derivatives, as well as
to monitor the rates contracted against those used in the market.
c) Classification and measurement of financial instruments:
Concerning the calculation of market value, below the following considerations:
 Loans and receivables: consumers, concessionaires and permissionaires (clients)
are classified as “held to maturity” and are recorded by their original values, subject
to provision for losses and present value adjustment, when applicable.
 Suppliers: are measured by the “amortized cost method” and therefore, recognized
by their original value.
 Loans and financing: are measured by the “amortized cost method”. Market values
were calculated at interest rates applicable to instruments with similar nature,
maturities and risks, or based on market quotations of these securities. The market
values for BNDES financing are identical to accounting balances, since there are no
similar instruments, with comparable maturities and interest rates. In case of
debentures, book and market values are identical, as there is no liquid trading
market for these debentures as an accurate benchmark in the market calculation.
 Swap operations: are measured at the “market value”. The determination of market
value used available information in the market and usual pricing methodology: the
face value (notional) evaluation for long position (in U.S. dollars) until maturity
date and discounted at present value of clean coupon rates, published in bulletins of
Future and Commodities Exchange – BM&F Bovespa.
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It is worth mentioning that estimated market values of financial assets and liabilities
were determined considering information available on the market and appropriate
valuation methodologies. Nevertheless, meaningful judgment was required when
interpreting market data to produce the most appropriate market value estimate. As a
result, estimates do not necessarily indicate the amounts that may be realized in current
exchange market.
d) Risk Factors
During the normal course of its businesses, the Company and its subsidiaries are
exposed to the market risks related to currency variations and interest rates, as evidenced
in the chart below:
Debt breakdown (excluding financial charges):
On June 30, 2009, according to the chart above, the foreign currency-denominated debt
is R$111,414, or 5.19% of total debt. Nevertheless, if we include financial charges, this
amount increases to R$116,272 (US$59,578, according to U.S. dollar quote of June 30,
2009), or 5.24% of the total debt.
Financial derivative instruments were contracted for the amount of foreign currencydenominated debt service to expire within 24 months, in the swap modality, whose
notional value on June 30, 2009 stood at US$25,909, according to the policy for
utilization of derivative instruments approved by the Board of Directors. Thus, if we
deduct this amount from total foreign currency-denominated debt, the foreign exchange
exposure represents 2.96% of total debt.
Below, we provide a few considerations and analyses on risk factors impacting on
business of Grupo Light companies:
 Foreign exchange risk
Considering that a portion of Light SESA’s loans and financing is denominated in
foreign currency, the Company uses derivative financial instruments (swap operations)
to hedge service associated with these debts (principal plus interest and commissions) to
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expire within 24 months. Derivative operations resulted in an R$9,756 loss in the second
quarter of 2009 (R$8,448 loss in the second quarter of 2008). The net amount of swap
operations as of June 30, 2009 is negative at R$116 (negative R$11,394 in the second
quarter of 2008), as shown below:
The amount recorded is already measured by its fair value on June 30, 2009. All
operations with derivative financial instruments are registered in clearing houses for the
custody and financial settlement of securities and there is no margin deposited in
guarantee. Operations have no initial cost.
The sensitivity analysis for foreign exchange and interest rates fluctuations is presented,
showing eventual impacts on financial result of the Company and its subsidiaries are
presented below.
The methodology used in the “Probable Scenario” was to consider that both foreign
exchange and interest rates will keep the same level verified on June 30, 2009 until the
end of year, maintaining steady liabilities, derivatives and temporary cash investments
verified on June 30, 2009. It is worth highlighting that, as it refers to a sensitivity
analysis of the impact on the 2009 financial result, the following factors were taken into
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consideration: the expenses and/or financial revenues amounts realized in 2Q09 and the
projection of charges for the next six-month period on the debt balance on June 30,
2009. It is worth mentioning that the behavior of debt and derivatives balances will
observe their respective contracts, and the balance of temporary cash investments will
fluctuate according to the need or available funds of the Company and its subsidiaries.
* Loans closed in the second quarter, therefore, these will not change in the stress
scenario.
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Considering the chart above, it is possible to identify that despite partial hedge against
foreign currency-denominated debt (only limited to debt service to expire within 24
months), as R$/US$ exchange rate increases, liabilities financial expense also increases
but financial revenues of derivatives also partially offset this negative impact and viceversa. Thus, cash is hedged due to the derivatives policy of the Company and its
subsidiaries.
 Interest rate risk
This risk derives from impact of interest rates fluctuation not only over financial
expense associated with loans and financing of subsidiaries, but also over financial
revenues deriving from temporary cash investments. The policy for utilization of
derivatives approved by the Board of Directors does not comprise the contracting of
instruments against such risk. Nevertheless, the Company and its subsidiaries
continuously monitor interest rates so that to evaluate eventual need of contracting
derivatives to hedge against interest rates volatility risk.
See below the sensitivity analysis of interest rate risk, evidencing the effects on variation
results in the scenarios:
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 Credit risk
It derives from the Company and its subsidiaries eventually suffering losses deriving
from default of counterparties or financial institutions depositary of funds or financial
investments. To mitigate these risks, the Company and its subsidiaries adopt the
analysis of financial and equity position of its counterparties as practice, as well as the
definition of credit limits and permanent monitoring of outstanding positions.
Concerning financial institutions, the Company and its subsidiaries only carry out
operations with low-risk financial institutions classified by rating agencies.
28. INSURANCE
The Company and its subsidiaries have insurance covering its main assets:
The assumptions of risks adopted, given their nature, are not included in the scope of a
special review; accordingly, they were not reviewed by independent auditors.
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Insurance coverage as of June 30, 2009 is considered sufficient by Management, as
summarized below:
29. STATEMENT OF INCOME BY COMPANY
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30. TARIFF REVIEW
Result of second periodic tariff review of Light SESA:
At a public meeting held on November 4, 2008, ANEEL established, temporarily, the
structural tariff repositioning of Light Serviços de Eletricidade S/A at 1.96%, which
took effect on November 7, 2008. Considering the 2.30% financial additions, the tariff’s
impact was 4.27%. In view of the tariff basis withdraw of a -0.41% financial component
that had been added to the 2007 annual readjustment, the average effect on the tariff to
be acknowledged by the consumers corresponded to 4.70%.
It is worth mentioning that the level of regulatory losses and the calculation of efficient
operating costs (Benchmark Company and Default) are provisional.
ANEEL temporarily established a component Xe of X Factor, to be applied as reducer,
in real terms, of Portion B in the subsequent tariff readjustments, from 2009 to 2012, at
0.00%.
With the conclusion of methodology improvements for the second cycle of tariff
reviews on November 25, 2008, definite amounts of Light’s tariff review process will
be established as per following schedule:
Proposal to make it available on the Internet for document
exchange
Company’s and other agents’ opinion about the proposal
available on the Internet
Process to be resolved at the board of executive officers meeting
As of 8/11/2009
Up to 9/8/2009
10/13/2009
31. LONG-TERM INCENTIVE PLAN
a) Stock Incentive Plan
Light S.A., pursuant to CVM Resolution nr. 562 issued on December 17, 2008,
recorded an increase of R$10,068 in its shareholders’ equity, under capital reserves,
corresponding to the vesting period incurred in the second quarter of 2009, totaling
R$42,504 (R$32,436 on March 31, 2009) referring to stock options granted to few
officers.
b) “Phantom Options” Incentive Plan
The Company accrued the amount of R$1,033 related to the vesting period incurred in
the second quarter of 2009, in counterpart to the item of personnel expenses, totaling an
amount of R$6,412 (R$5,379 on March 31, 2009).
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32. SUBSEQUENT EVENTS
Secondary Offering of Shares
On July 14, 2009, the notice announcing the commencement of Light S.A.’s secondary
offering was published, where 29,470,480 shares were tendered, corresponding to
14.4% of the Company’s capital stock. The offering price established in a bookbuilding
process was twenty-four reais (R$24.00), totaling R$707,292.
Issuance of Debentures
At the end of July 2009, Light SESA concluded its 6th issuance of simple nonconvertible debentures. The issuance amounted R$300,000, remunerated at 115% of
CDI rate, established in a bookbuilding process, compared to the initial expected
remuneration of 133% of CDI rate. The debentures were issued on June 1, 2009 and
were approved by CVM on July 21, 2009, Cash receipt was recorded on July 24, 2009
and they will be amortized in a lump sum on June 1, 2011, mainly destined to redeem in
advance the 1st issuance of Light SESA promissory notes, in the amount of R$100,000,
besides strengthening the Company’s working capital.
Contracting of EPC (Engineering Procurement Construction) to build Paracambi small
hydroelectric power plant (PCH)
At a meeting held on August 7, 2009, the Board of Directors approved to contract a
consortium to build PCH Paracambi. The total cost of this project is approximately
R$195 million and works are expected to start next September, and start-up is
scheduled for August 2011.
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BOARD OF DIRECTORS
MEMBERS
ALTERNATES
SérgioAlair Barroso
Luiz Fernando Rolla
Djalma Bastos de Morais
João Batista Zolini Carneiro
Eduardo Borges de Andrade
João Pedro Amado Andrade
Ricardo Coutinho de Sena
Paulo Roberto Reckziegel Guedes
Carlos Augusto Leone Piani
Ana Marta Horta Veloso
Firmino Ferreira Sampaio Neto
Paulo Jerônimo Bandeira de Mello Pedrosa
Aldo Floris
Lauro Alberto de Luca
Carlos Roberto Teixeira Junger
Ricardo Simonsen
Elvio Lima Gaspar
Joaquim Dias de Castro
Jose Luiz Silva
Carmen Lúcia Claussen Kanter
Ruy Flaks Schneider
Almir José dos Santos
FISCAL COUNCIL
MEMBERS
ALTERNATES
Ari Barcelos da Silva
Eduardo Gomes Santos
Isabel da Silva Ramos Kemmelmeier
Leonardo George de Magalhães
Eduardo Grande Bittencourt
Ricardo Genton Peixoto
Maurício Wanderley Estanislau da Costa
Márcio Cunha Cavour Pereira de Almeida
Aristóteles Luiz Menezes Vasconcellos Drummond
João Procópio Campos Loures Vale
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BOARD OF EXECUTIVE OFFICERS
José Luiz Alquéres
Chief Executive Officer
Ronnie Vaz Moreira
Vice Chief Executive Officer and Investor Relations Officer
Roberto Manoel Guedes Alcoforado
Vice Chief Operations and Clients Officer
Paulo Henrique Siqueira Born
Officer
Ana Silvia Corso Matte
Officer
Luiz Fernando de Almeida Guimarães
Officer
Paulo Roberto Ribeiro Pinto
Officer
CONTROLLERSHIP AND PLANNING SUPERINTENDENCE
Elvira Madruga B Cavalcanti
Luciana Maximino Maia
Controllership and Planning Superintendence
ACCOUNTANT – Accounting Manager
CPF 590.604.504-00
CPF 114.021.098-50
CRC-RJ 091476/O-0
90

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