ENGLISH - Release 4Q12 final - Celesc - Investor Relations [PDF]

4Q12 Results

Conference Call in Portuguese

Florianópolis – Santa Catarina, March 27, 2013 – Centrais Elétricas de Santa Catarina SA - Celesc (BM&FBOVESPA: CLSC3, CLSC4; OTC: CEDWY), an electric power utility holding company engaged in the generation, transmission, and distribution of electric energy and distribution of natural gas, announces the results for the fourth quarter (4Q12) and year of 2012. The company’s financial information, except where otherwise stated, are presented in Reais (R$) at December 31, 2012 and were prepared according to the new Brazilian accounting principles resulting from effectively applying the International Financial Reporting Standards (IFRS).

Date: April 4, 2013 Time: 11:00 a.m. (Brasília time) 10:00 a.m. (NY DST) Dial in Conection:

Distributed energy grows by 6.1% and Net Operating Revenue reaches R$4.5 billion in 2012

Phone: 55 11 2188 0155 Password: Celesc Preferred Share Price at 12/31/2012 CLSC4

R$ 27.00/share

Change in 4Q12 CLSC4: -21.5% Ibovespa: 3.0%

Main Highlights: •

Growth of 6.1% in Total Distributed Energy in Celesc Distribuição’s area of concession (+6.7% in 4Q12), reaching 21,205 GWh (5.167 GWh in 4Q12);

•

Consolidated Net Operating Revenue was R$4.5 billion in 2012, 8.4% higher than in 2011. Excluding the effect of Construction Revenue, Consolidated NOR increased by 9.3% in the year (amounting to R$4.2 billion);

•

Consolidated Personnel and Management costs, after deducting nonrecurring expenses, decreased by 0.7% in 2012. For the subsidiary Celesc Distribuição, the reduction was 3.6%.

•

The Company’s result in the year, a R$258.4 million loss (IFRS basis), reflects the significant increase in expenses with Purchases of Electric Energy for Resale in the distribution subsidiary and non-recurring effects such as the PDV (Voluntary Dismissal Program);

•

Investments reached R$148.5 million in 4Q12, a 13.8% reduction in relation to 4Q11. Cumulative year-to-date consolidated investments amounted to R$425.4 million, 10.5% below the same period in 2011;

•

The Company closed-out the tax year with a Net Consolidated Debt of R$189.0 million.

Market Value in 12/31/12 R$ 1.196.7 million US$ 671 million Free Float: 76,1% Other Indicators at 12/31/12 LPA 9M12 (R$/share): $ VPA (R$/share): Cot./VPA:

(6,70)

$49,28 0,5x

For more information, please access the website www.celesc.com.br or contact the Investor Relations Area: Phone: (55-48) 3231-6223 [email protected]

Main Highlights Main highlights Operating Indexes - Celesc Distribuição Celesc Distribuição - Energy Sales (GWh) Celesc Geração - Energy Sales (GWh) SCGÁS - Natural Gas Sales (thousand/m³) Financial Indexes - Consolidated Gross Operating Revenue

Net Revenue Operating Costs and Expenses EBITDA (IFRS) Net income(IFRS + Regulatory Assets / Liabilities - Non-Recurring) Net Income(IFRS) Net income(IFRS + Regulatory Assets / Liabilities - Non-Recurring) Investments

4th Quarter 2011

2012

5,003 127,132 167,683

5,339 109,558 166,262

1,708.1 1,104.5 (1,037.7) 94.9 104.2 78.0 84.2 172.2

1,944.4 1,327.5 (1,629.6) (259.4) (77.4) (137.3) (17.2) 148.5

Accumulated 12 Months % Chg. 6.7 (13.8) (0.8) 13.8 20.2 57.0 (373.4) (174.3) (275.9) (120.4) (13.8)

2011

2012

19,978 573,897 669,620

21,205 475,114 673,626

6,564.4 4,191.4 (3,760.5) 593.0 466.4 323.9 240.4 475.4

7,070.8 4,545.2 (5,052.6) (336.1) 292.7 (258.4) 156.7 425.4

% Chg. 6.1 (17.2) 0.6 7.7 8.4 34.4 (156.7) (37.2) (179.8) (34.8) (10.5)

1

4Q12 Results 1- Overview Centrais Elétricas de Santa Catarina S.A. – CELESC is one of the largest companies in the Brazilian electric sector, mainly in the areas of distribution and generation of electric energy. Structured as a Holding Company in 2006, the Company possesses two wholly-owned subsidiaries - Celesc Geração S.A. and Celesc Distribuição S.A. Additionally it holds a controlling interest in Companhia de Gás de Santa Catarina (SCGÁS – Santa Catarina Gas Company) and is a partner in Dona Francisca Energética S.A. (DFESA), Empresa Catarinense de Transmissão de Energia S.A. (ECTE – Santa Catarina Energy Transmission Co.), Companhia Catarinense de Água e Saneamento (CASAN – Santa Catarina Water and Sanitation Co.) and of Usina Hidrelétrica Cubatão S.A. (Cubatão Hydroelectric Plant) Its major shareholder is the State of Santa Catarina which holds 50.2% of the Company’s common shares, corresponding to 20.2% of the Total Capital.

CELESC’s Shareholder and Corporate Structure (base-date 12/31/2012)

2

4Q12 Results Wholly-Owned Subsidiaries Celesc Distribuição S.A.

The company provides energy to over 2.5 million consuming units located in 262 municipalities in Santa Catarina (92% of the state’s territory) and in Rio Negro, state of Paraná. It is further responsible for the supply of electric energy to four concessionaires and 16 permit-holders that are active in the other 36 Santa Catarina municipalities. As defined in ANEEL Concession Agreement 56, of July 22, 1999, the term for the distribution of electric energy by Celesc D is up to July 7, 2015. The concession covers 92% of the area of Santa Catarina state and the municipality of Rio Negro/PR. Celesc Distribuição is the second largest ICMS taxpayer in Santa Catarina, the seventh largest Brazilian distributor of th electric energy in terms of supply revenue, the seventh in volume of distributed energy and the 10 in terms of consuming units supplied. Average home consumption reaches 198kWh/month, the highest rate in the Southern region and the fifth largest in the country. The Company distributed over 21 thousand GWh in 2012. Gross annual billings are about R$6.8 billion.

3

4Q12 Results Celesc Geração S.A. Celesc Geração S.A. is Celesc Group’s subsidiary engaged in the operation, maintenance and expansion of the company’s generation facilities, currently made up of 12 Small Hydroelectric Plants (SHPs) with a total installed generation capacity of 81.15MW.

Pursuant to Provisionary Measure (MP) 579, the Group filed its request for extending the term of concession under agreement 56/1999 on September 18, 2012 and for the Small Hydroelectric Plants (PCHs) on October 15, 2012. Below the PCHs affected by MP 579 are listed:

Own Generating Plants - Plants 100% from Celesc Geração S.A. reached by MP 579 Installed Guaranteed Concession PLANTS Location Capacity Energy Expiration (MW) (MW) PCH Palmeiras Rio dos Cedros/SC 11/7/2016 24.60 15.13 PCH Bracinho Schroeder/SC 11/7/2016 15.00 8.00 PCH Garcia Angelina/SC 7/7/2015 8.92 7.10 Rio dos Cedros/SC 11/7/2016 8.40 6.75 PCH Cedros PCH Salto Blumenau/SC 11/7/2016 6.28 5.25 Curitibanos/SC 7/9/2017 4.40 4.00 PCH Pery PCH Ivo Silveira Campos Novos/SC 7/7/2015 2.60 1.81 Total - MW 70.20 48.04

PCHs that generate less than 1MW of power and for which the term of concession goes beyond 2017 were not affected by MP 579/2012, as presented below: Own Generating Plants - Plants 100% from Celesc Geração S.A. PLANTS PCH Celso Ramos PCH Caveiras PCH Piraí CGH Rio do Peixe CGH São Lourenço Total - MW

Location Faxinal dos Guedes/SC

Concession Expiration 11/23/2021

Lages/SC

7/10/2018

Joinville/SC

11/7/2016

Videira/SC

(*)

Mafra/SC

(*)

Installed Capacity (MW) 5.40 3.83 0.78 0.52 0.42 10.95

Guaranteed Energy (MW) 3.80 2.77 0.45 0.50 0.20 7.72

(*) Pow er Plants w ith less than 1 MW are exempt from the act of concession.

In recent years, driven by a strategy to increase its own generation capacity, the Company has invested in increasing the power capacity of existing plants and in the formation of partnerships to make projects aimed at the construction of new undertakings feasible, including the diversification of the energy matrix. In October, Public Call Notice 001/2012 was divulged replacing Public Call Notice 001/2008. This new call notice publicly disclosed the Company’s intention of analyzing partnership opportunities in energy generation undertakings that are aligned with its strategic reference regarding mission and business view, without limitation as to their sourcing and location. The company already participates in Specific Purpose Companies that make new undertakings in which Celesc Geração S.A. holds a minority interest, feasible. The table below presents the main features of these undertakings and their respective stage of development:

4

4Q12 Results New Developments - Celesc Geração holds minority stake in operation

Plants

PCH Prata PCH Belmonte PCH Bandeirante

Location

Bandeirante/SC Belmonte/SC Bandeirante/SC

TOTAL

Installed Capacity (MW)

% of Guaranteed Participation Energy Celesc (MW) Geração

3.00 3.60 3.00

1.68 1.84 1.76

9.60

5.28

25.0% 25.0% 25.0%

Equivalent Installed Capacity

Equivalent Guaranteed Date of entry of Energy New Capacity (MW)

0.75 0.75 0.90

0.42 0.46 0.44

2.40

1.32

atio per In O

n

Status

Operation started in August/11 Operation started in May/12 Operation started in September/12

New Developments - Celesc Geração holds minority stake

Plants

PCH Rondinha PCH Painel PCH Campo Belo PCH Xavantina TOTAL

Location

Passos Maia/SC São Joaquim/SC Campo Belo do Sul/SC Xenerê/SC

Installed Capacity (MW) 9.60 9.20 10.00 6.07 34.87

% of Guaranteed Participation Energy Celesc (MW) Geração 6.12 5.52 6.00 3.60 21.24

32.5% 32.5% 30.0% 40.0%

Equivalent Installed Capacity 3.12 2.99 3.00 2.43 11.54

Equivalent Guaranteed Date of entry of Energy New Capacity (MW) 1.99 1.79 1.80 1.44 7.02

Status

August/2013

Construction

2014

Basic Project

2015

Basic Project

2015

Obtaining Funding

Controlled Entity Companhia de Gás de Santa Catarina – SCGÁS SCGÁS is the second largest Brazilian locally piped gas distributor regarding the quantity of municipalities serviced (59). Santa Catarina state possesses the third largest natural gas distribution network (1,002 kilometers) and is the third largest in terms of number of industrial businesses supplied with natural gas (218), in addition to possessing the third largest distribution network for vehicle natural gas (GNV) in the country (136 stations).

Possessing 100% of the concession for exploiting natural gas distribution services throughout Santa Catarina state, the company sells and distributes daily over 1.8 million cubic meters of natural gas to about 4,185 clients. Jointly controlled entity SCGÁS possesses a concession agreement for exploiting natural gas distribution services throughout Santa Catarina state, signed on March 28, 1994 with a 50-year term.

Participation in Other Companies Empresa Catarinense de Transmissão de Energia - ECTE Constituted with the specific purpose of exploiting electric energy transmission lines in the Southern, Southeastern regions and the Santa Catarina coastline, the company is the owner of the SE Transmission Line between Campos Novos and Blumenau, which is 252.5 km. long. The line is responsible for transporting about 20% of the assured energy to supply the demand in Celesc Distribuição S.A.’s area of concession. In December/11, the company acquired in auction 5

4Q12 Results the right to construct the Abdon Batista (525/230kV) and Gaspar (230/138kV) substations, through subsidiary Empresa de Transmissão Serrana S.A. – ETSE. Construction work, forecasted to be concluded in 2014, has begun. The jointly-controlled entity ECTE holds an electric energy transmission concession agreement dated November 1, 2000 with a 30-year term.

Dona Francisca Energética S.A – DFESA An independent electric energy production concessionaire, DFESA owns the Dona Francisca Hydroelectric Plant built on the Jacuí River in Rio Grande do Sul, with an installed capacity of 125MW and 78MW of assured energy. The undertaking was inaugurated in May, 2001. Celesc holds 23.03% of the company’s common shares. The jointly-controlled entity DFESA holds an electric energy transmission concession agreement dated August 28, 2001 with a 35-year term.

Companhia Catarinense de Água e Saneamento – CASAN A mixed government and privately owned, publicly traded company, controlled by the State Government of Santa Catarina, CASAN’s function is to plan, execute, operate and exploit the supply of drinkable water and sanitation services to its area of concession. Currently the company’s services cover practically the entire state of Santa Catarina and service a population of 2.3 million consumers with treated water and 319.000 with the collection, treatment and final disposal of sanitary waste. Celesc holds 15.48% of the Company’s subscribed capital.

Usina Hidrelétrica Cubatão S.A. A specific purpose company constituted for the implementation of the Cubatão Hydroelectric Plant, an undertaking to be constructed in Joinville (SC) with a 50MW installed power capacity. After facing environmental obstacles, the project was entirely revised in 2007. New construction techniques were employed which allowed the licensing process to start anew and presently the project is being analyzed by the appropriate authorities.

2 – Performance by Business Area 2.1 – Celesc Distribuição S.A. 2.1.1 – Operational Performance Santa Catarina electric energy market The supply of energy in the area serviced by Celesc increased by 7.4% compared with the same period of 2011, as shown in the table below. In the year, growth reached 5.9% amounting to 23,048 GWh, while the variation for Brazil was 4.3%. One of the reasons for the increase was the large growth of demand in the retail and services sectors, which contributed significantly to increase consumption in the state of Santa Catarina.

6

4Q12 Results Energy Load (GWh)

Year Brazil (GWh)*

2012 2011 % Chg.

Brazilian South (GWh)

2012 2011 % Chg.

Carga Celesc Distribuição S.A. (GWh)**

2012 2011 % Chg.

4Q12 136.243 129.437 5,3% 23.093 21.828 5,8% 5.850 5.447 7,4%

12 months 531.213 509.222 4,3% 89.594 85.797 4,4% 23.048 21.760 5,9%

Source: ONS / Celesc Distribuição Note (*): Refers to the National Interconnected System – SIN (**): Energy injected into the concessionaire’s distribution system (captive market + free market + losses in distribution).

Electric Energy Balance The amount of energy required by the Company to meet the demand of the captive market and to overcome losses was 18,825 GWh in 2012. The Electricity Trading Board – CCEE registered 71.9% of the supply via Contracts for the Trading of Electricity in a Regulated Environment (CCEAR’s), 24.8% via agreements with Itaipú and 3.3% from other sources.

Energy Balance - 4Q12 (GWh) BILATERAL CONTRACTS - LONG TERM

48

CCEAR

3,581

ITAIPU

1,160

FINAL CONSUMER OWN CONSUMPTION

3,961 4

RESELL

326

5,069 PROINFA

101

DISTRIBUTION LOSSES

599

SETTLED IN THE SHORT TERM1

177

TRANSMISSION LOSSES

813

DISTRIBUTED GENERATION

2

ITAIPU LOSSES

1,843

Notes: (¹) Value subject to eventual re-accounting by the Electricity Trading Board - CCEE. (²): Includes, in addition to losses in distribution, differences arising from the billing calendar.

Distributed Energy In 4Q12 the energy supplied by Celesc Distribuição to the captive market increased by 3.6% compared to the same period of the prior year, reaching 3,9941 GWh (excluding own consumption that represented 3.0 GWh). Regarding the otal market (captive + free), the growth rate was 6.7%, reaching 5,336 GWh. The following table presents figures for distributed energy during the fourth quarter and year of 2012:

7

4Q12 Results 4 th Quarter 2011 2012 % Chg. 3,854 3,994 (3.5) 1,033 1,135 9.9 1,210 1,124 (7.1) 753 820 8.8 271 291 7.5 91 88 (3.4) 127 132 4.5 68 74 8.8 301 330 9.4 1,145 1,341 17.1 4,999 5,336 6.7 3 3 4.8 5,003 5,339 6.7

Consumption per Class In MWh - Total Captive Market Residential Industrial Commercial Rural Public Entities Public Lighting Public Service Co. To Other Utilities Free Market Total (Captive Market + Free Market) Own Consumption Total

Accumulated 12 Months 2011 15,791 4,407 4,853 2,984 1,105 358 502 275 1,308 4,174 19,965 12 19,978

2012 16,157 4,637 4,620 3,268 1,173 374 529 295 1,260 5,036 21,193 13 21,205

% Chg. 2.3 5.2 (4.8) 9.5 6.2 4.6 5.4 7.4 (3.6) 20.6 6.1 2.9 6.1

The graph below helps to illustrate consumption data for the area serviced by Celesc Distribuição, excluding its own consumption Energy Consumption in GWh - Celesc Distribuição 4Q12

6,7% 5,336 3,6%

4,999

3,854 3,994

9,9% 1,033 1,135

17,1%

-7,1% 8,8% 7,5%

1,210 1,124 753

820 271

Residential

Industrial

Commercial

291

Rural

6,3% 587

1,341

624

Other Classes¹

4Q11

1,145

Free Market

Captive Market

Total Market

4Q12

Source: DCL / DPCM / DVME Note: Remaining Classes¹ = Public Authorities + Public Illumination + Public Services + Resale. Does not consider own consumption.

Performance of the Captive Market per Class of Consumer Residential Residential class electric energy consumption totaled 1,135 GWh in 4Q12, 9.9% above the figure registered for the same period in the previous year. During the year the consumption for these customers had an accumulated growth of 5.2% compared to the same period in the prior year. This result is largely explained by a generalized increase in temperatures. According to the Energy Research Company – EPE, in December the increase in consumption for homes both in Santa Catarina and Paraná was expressive, reaching a 14.6% average growth rate. In the same month several locations 8

4Q12 Results registered maximum temperatures up to 5°C above the historic average for the period, which contributed decisively to the expansion of electricity consumption.

Industrial The captive industrial class registered a 7.1% reduction in electric energy consumption in 4Q12 compared with the same period of the previous year. In 2012, the reduction was 4.8%, reaching 4,620 GWh. The migration process of captive consumers to the free market continues to be the main factor that explains the drop in consumption. In the period, 52 consuming units opted to purchase electric energy in the Environment for Freely Contracting – ACL. Commercial In 4Q12, the commercial class totaledd 820 GWh with a 8.8% growth in relation to 4Q11.Rates were maintained at a high level during all quarters in 2012. In the year, consumption grew by 9.5% over 2011, making this class that with the highest growth rate. This strong performance is partially due to climatic temperatures, as mentioned previously, and to a favorable moment in retail commerce. Several sector indices support this result, especially greater activity in the tertiary sector of the economy. In the retail sector, which demand for energy is the highest in its class, the sales volumes up to November increased by 8.4% in the country (PMC/IBGE). Rural Rural class consumption increased by 7.5% in 4Q12 compared with 4Q11.The accumulated consumption has a growth of 6.2% and totaled 1,173GWh.One of the reasons for the increase is related to the addition of slightly over 1,000 consuming units serviced. Other Classes (Public Authorities, Public illumination, Public Service and Resale) In 3Q12 consumption for other classes increased 6.3% compared to 4Q11. In the accumulated of the year, the growth rate was 0.7%. With an participation of 51% in the consumption of Other class, the resale of energy show na increase of 9.4% in the 4Q12 but in the full year dropped by 3.6% The graph below shows the share of participation per consumer class in Celesc Distribuição S.A.’s captive market: Distribution by Consumer Class (MWh) - 4Q12 Other* 16%

Residential 28%

Rural 7%

Commercial 21%

Industrial 28%

Other (*) - Public Authorities + Public Illumination + Public Services

Performance of the Free Market In 4Q12 the amount of energy consumed in this market was 17.1% greater than that verified in the same period of the prior year. In 2012, the growth was 20.6% and reaches 5,036 GWh. When participating in the Environment for Freely Contracting energy (ACL), the consumer assumes responsibility in relation to exposure to energy price variations, however may be supplied according to consumption features. In 2013 the expectation is for this growth to be less accelerated seeing that the Free Market energy price scenarios are unattractive. Additionally, due to Provisionary Measure 579, enacted September 11, 2012, Group A consumers will be granted an average reduction of 20.03% in their energy rate.

9

4Q12 Results Share per Consumer Class in the Free Market

Industrial 90.8%

Commercial 5.6% Rural 0.7% Resale 2.9%

Of the total market serviced by Celesc Distribuição S.A. in the fourth quarter of 2012, the captive market represented 74.9% and free clients represented 25.1%, as shown in the graph below:

Energy Consumption - 4Q12

Free Market 25.1% Captive Market 74.9%

Losses in Distribution According to the last periodic tariff revision for Celesc Distribuição S.A., regulatory losses in distribution were set at 7.40%. Of this total, 6.35% refer to the volume of technical losses and 1.06% to non-technical losses. In the accumulated 12 months year-to-date position up to December, 2012 global losses represented 6.31% of the energy injected into the concessionaire’s distribution system, 6.05% referred to technical losses as defined by PRODIST – Module 7 (2010) and 0.93% corresponded to non-technical losses. The graph below shows the evolution of losses in distribution within the Company’s area of concession:

Losses on Distribution % of Energy sold- last 12 months ANEEL Limit

2ºCRTP

1,38%

7,40%

1,39%

1,27%

0,93%

6,63%

6,11%

6,11%

6,05%

2009

2010

2011

2012

7,73%

Technical Losses

REGULATORY LOSSES established at 6,35% refeers to Technical Losses and 1,06% to NonTechnical

Non-Technical Losses 10

4Q12 Results

System Efficiency Indicators The system efficiency indicators showed improvement in the 2012. The DEC index (average duration of interruptions per consuming unit) for Celesc Distribuição was 16.48 hours, 3.9% below that verified in 2011. In this same period, the index for interruptions per consuming unit (FEC) dropped 0.3%, representing 11.79 interruptions for the year of 2012. Efficiency Indicators (DEC)

DEC (weighted hours)

.

22.75

21.06

19.45

19.53

17.66 16.62

15.20

16.40

14.39

13.56

13.53

17.15

16.48

2006

2007

2008

2009

2010

2011

2012

DECEfficiency

FEC (interruptions per consumer)

18.67

17.68

16.66

15.63

Indicators DEC(FEC) Li mit

15.66

15.15

14.34

13.40

12.15

12.45

10.54

9.79

10.22

11.82

11.79

2006

2007

2008

2009

2010

2011

2012

FEC

FEC Limit

11

4Q12 Results 2.1.2 – Economic and Financial Performance

Main Financial Indicatores (IFRS) - Celesc Distribuição S.A. 4th Quarter

R$ million Gross Operating Revenue Deductions from Gross Revenue Net Revenue Operating Costs and Expenses Electricity Costs (Non-Manageable) Operating Expenses (Manageable) EBITDA EBITDA Margin (%) Profit / Losses Net Net Margin (%)

2011 1,660.0 (597.4) 1,062.7 (1,000.6) (610.5) (390.1) 85.8 0.1 70.8 0.1

Accumulated 12 Months

2012 % Chg. 1,878.0 13.1% (604.5) 1.2% 1,273.5 19.8% (1,456.3) 45.5% (984.2) 61.2% (472.1) 21.0% (145.0) -269.1% (0.1) -29,0 p.p. (4.6) -106.5% (0.0) -16,8 p.p.

2011 6,374 (2,342) 4,032 (3,633) (2,321) (1,312) 542 13.4% 287 7.1%

2012 6,830 (2,481) 4,349 (4,749) (3,127) (1,622) (249) -5.7% (136) -3.1%

% Chg. 7.2% 5.9% 7.9% 30.7% 34.8% 23.7% -145.9% -147.2%

IFRS + Regulatory Assets and Liabilities - Non - Recurring R$ million EBITDA (IFRS +Regulatory Asset s and Liabilit ies - Non-Recurring) Adjusted EBITDA Margin (%)

NET INCOME (IFRS +Regulat ory Asset s and Liabilit ies - Non-Recurring)

4 th Quarter 2011 2012 95.1 (164.7) 8.9%

76.9

Adjusted Net Margin (%) 7.2% *Further details of the adjustments on pages 17 and 18 of this earnings release.

Var. % -273.2%

-12.9%

0.0%

(17.6)

-122.8%

-1.4%

0.0%

Accumulated 12 Months 2011 2012 Var. % -57.0% 415.5 178.5 4.1%

0.0%

203.9

146.3

-28.3%

5.1%

3.4%

0.0%

10.3%

Highlights In the fourth quarter of 2012 Celesc Distribuição’s result continued to be impacted by the increase in operating costs and expenses which grew by 41.0% (R$410.5 million) compared to the same period of the prior year. The main reasons for this increase were related to: (i) Greater expenses in the purchase of energy for resale and respective fringe costs; (ii) non-recurrent expenses associated with the Voluntary Dismissal Plan – PDV which affected the Personnel heading; and (iii) provisions to loss reserves. In addition, the distribution subsidiary was favorably impacted by the new methodology for measuring concession financial assets according to the VNR – New Reposition Value, as per Law 12.783/13. Greater details are presented in the following sections.

12

4Q12 Results GROSS OPERATING REVENUE Gross Operating Revenue - Celesc Distribuição S.A. 4 th Quarter

R$ million Energy supply Energy Sales to distributors Short Term Energy Availibility Energy System (TUSD) Leasing and Rentals Income from Services Other incomes Financial income on assets Indemnified Construction Revenue

2011 1,660.0 1,352.3 26.9 84.6 12.2 1.9 2.3 38.5 141.4

Accumulated 12 Months

2012 % Chg. 1,878.0 13.1% 1,567.4 15.9% 29.0 7.9% 92.0 8.8% 9.8 -19.7% 1.9 1.4% 2.8 23.7% (98.5) -355.6% 123.0 -13.0%

2011 6,373.8 5,405.7 117.6 320.9 35.0 8.5 8.2 138.1 339.7

2012 % Chg. 6,830.1 7.2% 5,809.1 7.5% 111.6 -5.1% 360.6 12.3% 41.1 17.4% 7.1 -16.8% 12.0 46.4% -100.0% 338.1 -0.5%

Gross Operating Revenue – GOR for Celesc Distribuição in 4Q12 amounted to R$1,878.0 million, 13.1% higher than the 1 fourth quarter of 2011. Adjusting out Construction Revenue of R$123.0 million in the quarter, GOR was R$1,755.0 million or 15.6% above the figure registered in 4Q11 (R$1,518.6 million). Year-to-date 2012 GOR was R$6,830.1 million, 7.2% over that verified in the same period in 2011. Excluding Construction Revenue (R$338.1 million), Gross Operating Revenue grew by 7.6% in 2012 to R$6,492.0 million. The main factors in this performance were: (i)

an increase in the order of 3.6% in electric energy consumption for Celesc Distribuição’s captive consumers in 4Q12 (+2,3% year-to-date 2012);

(ii)

an incremental 12.3% in revenue from the TUSD (Tariff for the Use of the Distribution System);

(iii) tariff adjustments conceded by ANEEL to the concessionaire in the period, which had an average +1.19% impact between August 2011 and August 2012 and -0.32% as of August 2012; (iv) revenue of R$150.6 million with Short-Term Energy related to the financial liquidation at the Energy Trading Board (CCEE) of thermal-electric plant availability agreements; (v) financial revenue on negative indemnified assets in 4Q12 of R$98.5 million, due to the adjustment to the New Reposition Value – VNR.

DEDUCTIONS FROM OPERATING REVENUES Deductions from Gross Operating Revenues - Celesc Distribuição S.A. R$ million DEDUÇÕES DA RECEITA OPERACIONAL BRUTA (Value-added Tax on Sales and Services)ICMS PIS/COFINS Global Reversion Reserve - RGR Energy Development Account - CDE Fuel Consumption Account - CCC Research and Development - R&D (0,5% of NOIL) Energy Eficiency Program - PEE (0,5% of NOIL) Othes

4 th Quarter 2011 2012 597.4 604.5 314.0 331.4 97.8 161.9 56.4 7.0 46.3 52.0 70.8 37.8 4.6 5.5 4.6 5.5 2.8 3.4

Accumulated 12 Months % Chg. 1.2% 5.5% 65.6% -87.6% 12.1% -46.5% 19.5% 18.4% 18.1%

2011 2,342.2 1,264.6 555.4 28.2 185.4 261.4 18.0 18.0 11.2

2012 2,481.4 1,334.9 604.5 42.7 207.9 239.2 20.0 20.0 12.3

% Chg. 5.9% 5.6% 8.8% 51.1% 12.1% -8.5% 11.2% 10.9% 9.2%

Deductions to operating revenue grew by 1.2% in 4Q12, amounting to R$604.5 million, which represents 32.2% of Gross Operating Revenue in the period in addition to the increase in PIS/COFINS taxes that accompanied the growth in revenue 1

According to IFRS accounting rules, Construction Revenue is registered for the same amount in operating costs and therefore does not affect the Company’s bottom line result..

13

4Q12 Results (excluding Construction Revenue). The accentuated decrease of 87.6% in the Global Reversal Reserve (RGR) should be highlighted, as well as a 46.5% drop in the amount booked in Fuel Consumption Account (CCC). Year-to-date 2012 revenue deductions grew by 5.9%.

NET OPERATING REVENUE Net Operating Revenue – NOR for Celesc Distribuição S.A. in the fourth quarter of 2012 reached R$ 1,273.5 million, 19.8% higher than 4Q11. Excluding the Construction Revenue, the NOR totaled R$ 1,150.5 million, 24.9% above the income recorded in 4Q11 (R$ 921.3 million). Year-to-date 2012 NOR was R$ 4,348.6 million, 7.9% above the same period in 2011. Without the effects of Construction Revenues (R$ 338.1 million), the Net Operating Revenue in 2012 increased 8.6%, totaling R$ 4,009.9 million.

OPERATING COSTS AND EXPENSES Operating Costs and Expenses - Celesc Distribuição S.A. 4th Quarter

R$ million 2011 OPERATING COSTS AND EXPENSES

2012

Accumulated 12 Months Var. %

2011

2012

Var. %

3,632.5

4,749.3

2,320.7

3,127.1

34.8%

1,000.6

1,456.3

45.5%

610.5

984.2

61.2%

857.3

74.9%

1,775.6

2,344.4

32.0%

34.4%

61.9

236.8

282.5%

6.5%

405.1

447.5

10.5%

Custos com Energia Elétrica - Não-Gerenciáveis Electric energy purchased for resake Electric Energy Trading Chamber Electric grid usage charge Incentive Program for alternatives Sources of Energy (PROINFA) PMSO - Despesas Operacionais Gerenciáveis Personnel and Management Material Third-party costs and services Other expenses Depreciation/ Amortization Construction Costs

490.1 (4.7)

(6.4)

30.7%

105.5

112.3

19.6

21.0

7.0%

78.1

98.5

26.1%

225.0

311.4

38.4%

829.1

1,132.0

36.5%

165.4

192.5

16.4%

562.2

853.7

51.9%

8.4

6.1

-27.8%

29.6

22.7

-23.3%

50.0

50.4

0.8%

176.0

177.0

0.6%

1.2

62.3

5037.8%

61.3

78.6

28.1%

23.7

37.8

59.3%

143.0

152.0

6.3%

141.4

123.0

-13.0%

339.7

338.1

-0.5%

Operating Costs and Expenses for Celesc Distribuição increased 41.0% in 4Q12 and 30.7% year-to-date. The main factors that influence the behavior of operating expenses are: (i) costs with Non-manageable Electric Energy, which will be discussed under a specific topic; (ii)

personnel costs which reflect the provisioning for the Voluntary Dismissal Plan – PDV; and

(iii)

in Other Expenses, the provisions to loss reserves.

Netting out Construction Costs (which have no effect on the bottom-line result), the distribution company’s Operating Costs and Expenses had a 49.9% variation in the quarter and 34.0% in year-to-date 2012. This behavior is primarily a result of an increase in non-manageable electric energy costs.

Electric Energy Costs Costs with electric energy grew by R$373.7 million in 4Q12, which led this heading to vary 61.2% in relation to the same period of 2011. This was caused by (i) expenses with energy purchased for resale in the order of R$857.3 million, as a result of an increase in the Price for Liquidating Differences - PLD and which were further influenced by the dispatching of thermal-electric plants due to the low water level in the country’s reservoirs; and (ii) foreseen adjustments to purchasing contracts. These factors affect the three headings for Energy Costs: energy purchased for own-use, fringe costs and the use of PROINFA. 14

4Q12 Results

The table below shows the mix for tariffs paid by the company in its energy purchases to service its consumer market: Purchadsed Energy Cost by Contracting Mode Average Rate of Energy Purchased by Tyoe (R$/MWh)

4Q11

4Q12*

Chg. Of Price %

Participation % in Participation % in 4Q11 MIX 4Q12 MIX

Average rate of Tariff Adjustment** 2012/13 (R$/MWh)

LEILÃO - CCEAR / Hidro

132.3

142.6

7.8%

54.1%

51.7%

141.7

LEILÃO - CCEAR / Térmica

114.0

243.0

113.1%

20.0%

23.0%

135.3

ITAIPU

94.6

110.7

17.1%

24.8%

24.2%

100.6

CONTRATOS BILATERAIS

211.5

224.8

6.3%

1.2%

1.2%

227.8

OUTROS

-

100.0%

100.0%

Total - (R$/MWh)

116.9

-

-

156.6

-

34.0%

128.6 ** NT 246/2012 Table 13,page. 25 - SRE/ANEEL.

The average purchasing tariff is greater in all hiring modalities, with special mention going to agreements signed with thermal-electric plants which varied 113.1% in relation to the last quarter of 2011.

Fringe Costs for the use of the Electric and Transmission Network Fringe Costs in the Use of the Electric Power and Transmission Network amounted to R$112.3 million in the quarter, an increase of 6.5% when compared to 4Q11. Year-to-date the heading at R$447.5 million grew by 10.5% in relation to the same period in the previous year.

PMSO (Personnel, Material, Services and Other) Celesc Distribuição’s manageable costs totaled R$311.4 million in 4Q12, a 38.4% increase compared with the R$225.0 million registered in 4Q11. For the year-to-date, the increase was in the order of 36.5%, reaching R$1,132.0 million. Below the main factors that affected this result are discussed.

Personnel Total expenses with Personnel increased by 16.4% in 4Q12. The year-to-date figure at R$ 853.7 million grew by 51.8%. Personnel Expenses - Celesc Distribuição R$ million Personnel - Total Personnel and Management Personnel and Management Pension Plan

Actuarial Expense

2011 165.4 126.3

4 th Quarter 2012 Var. % 192,5 172,8

112.6 13.7

39.0

16,4%

Accumulated 12 Months 2011 2012 Var. % 51.9%

36,7%

562.2 483.2

853.7 795.0

64.5%

164,9

46,5%

457.5

769.7

68.2%

7,9

-42.8%

25.7

25.3

-1.5%

19.8

-49.3%

58.7

-25.6%

79.0

The R$311.8 million increase in expenses with Personnel and Management in 2012 is explained by the following extraordinary factors: (i)

(ii)

the provisioning of expenses in the order of R$290.4 million for the Voluntary Dismissal Plan – PDV of which R$245.1 occurred in September as per a Material Fact divulged by the Company and R$45.2 million corresponding to provisions in December. The additional provision was necessary to cover the change in the nominal rate of discount from 10.25% p.a. to 8.68% p.a. which is employed to calculate Net Present Values, in line with the rate used to calculate post-employment benefits offered to Company employees; a labor suit settlement in the amount of R$38.8 million, as per an agreement entered into with the Union of Electric Energy Industry Workers in Concórdia – STIEEC, related to the URP-Concórdia process that has been on-going 15

4Q12 Results since 1990. A contingency provision for this suit of R$44.6 million had been set up and was simultaneously reversed, which impacted Other Expenses favorably. Disregarding the effect of the PDV expenses and the labor suit settlement, Personnel and /Management Costs would have grown by only 1.0% in 4Q12 and would have dropped by 3.6% in year-to-date 2012.

Private Pension and Actuarial Expenses Celesc Distribuição sponsors the Celesc Foundation for Social Security – CELOS, which manages the retirement and the health plan offered to employees. Expenses incurred in contributing regularly to the plans and included in personnel costs under the heading Private Pension totaled R$25.3 million in 2012, a 1.5% drop in the comparison period, precisely in line with what occurred in 2011. Additionally, the Actuarial Expense, recognized in the Financial Statements as per an Actuarial Evaluation for Postemployment Benefits conducted by an independent insurance firm, totaled R$58.7 million in tax year 2012 (a 25.6% reduction in relation to 2011). The preliminary estimate for the net actuarial expense/(revenue) for the tax year to end on 12/31/2013 is set at R$128.4 million, 118.7% greater than that incurred in 2012. The expectation for the increase is basically explained by the reduction in the internal rate of discount for the NPV calculation of contracted obligations, which went from 5.5% p.a. in 2011 to 4.0% p.a. in the 2012 evaluation. The following table shows estimated costs per Benefits Plan.

Benefits Plan

Am ount to be recognized in 2013 (in R$ thousand)

Transitional Plan

43.9

Mixed Plan

45.0

Healthcare Plan

13.8

DVP 2002

2.2

VDP 2012

21.0

Plan annuity

(0.2)

Other Benefits

2.8

Total

128.4

The table below presents the Actuarial Liabilities recognized in 2011 and 2012 and demonstrates the comparative 22.0% increase, mainly explained by the inclusion of obligations for the PDV implemented in 2012: In December 31

R$ Million 2011

2012

Chg %

619.80

1.9%

457.7

680.7

48.7%

Healthcare Plan

351.9

306.4

PDVI 2002

73.3

47.1

Pension Plan

608.00

Other benefits post-employment

PDV 2012 Plan annuity Other Benefits

4.7

288.8 5.4

27.8

33.0

1,065.7

1,300.4

Short Term

115.9

131.0

Long Term

949.8

1,169.5

Total

0

22.0%

16

4Q12 Results

Additionally, it is important to point out that the actuarial calculation, conducted according to the new rules determined by CVM’s Deliberation 695, of December 13, 2012 and The Accounting Board’s Technical Pronouncement CPC 33 (R1), indicates the recognition of R$191.2 million in liabilities as of January 1, 2013, related to unrecognized Gains/Losses which result from the end of the known “rule of corridor”.

Materials Expenses with materials amounted to R$6.1 million in the quarter, a drop of 27.8% (R$2.3 million) compared to 4Q11. The reduction in the year-to-date figure of R$ 22.7 million was 23.3% (R$6.9 million).

Third Parties Services The Company registered an increase with expenses incurred in Third Party Services in the order of R$1.0 million for fullyear 2012, 0.6% higher than the comparative period. In 4Q12 the increase was R$0.4 million (+0.8%).

Other Operating Expenses 4 th Quarter

R$ million 2011 Other Expenses - Total Provision for Doubtfull Accounts Other Provisions (Net)

2012

Accumulated 12 Months % Chg.

1.2

62.3

5037.8%

11.8

63.3

437.5%

(3.9)

(9.5)

2011

2012

% Chg. 28.1%

61.3

78.6

28.4

95.3

235.2% -749.5%

145%

9.9

(64.1)

586.9%

1.1

9.0

725.2%

Leasing and Rentals

0.3

2.4

Inssurance

0.0

0.0

-70.0%

0.1

1.8

1928.7%

1.4

6.7

394.4%

Taxes

0.1

1.5

1044.9%

ANEEL Inspection fee

2.7

2.8

4.6%

9.7

10.9

11.6%

(9.8)

1.9

-118.9%

10.7

19.0

77.2%

Other

Other Operating Expenses amounted to R$78.6 million in 2012, a growth of 28.1% in comparison to the same period in 2011. Net Loss Provisions totaled R$63.3 million in 4Q12, a 437.5% increase in relation to 4Q11. This was due to the provisioning of non-honored payments from large customers who filed for Judicial Recovery (receivership). The year-todate accumulated position is R$95.3 million, 235.2% higher than the period of comparison. Other Net Provisions include the reversal of the reserve set-up for the URP-Concórdia Labor Suit, amounting to R$44.6 million, due to the Judicial Agreement signed in 3Q12. The respective indemnification of R$38.8 million was booked in Personnel costs, as already presented in the disclosure of the last results. Furthermore, the company was successful in other lawsuits and improved its credit registers, which resulted in the reversal of Civil and Regulatory Provisions.

17

4Q12 Results FINANCIAL RESULT Celesc Distribuição S.A. showed a net financial result in 4Q12 of R$ 167.9 million, a significant increase compared to that recorded in 4Q11 (R$ 5.4 million). Income Statement - Celesc Distribuição S.A. Quarter 4Q11 4Q12

In thousand Reais Financial Income Interest Income Monetary Variation Financial Incentive Social Fund Accrued Interest and Arrears on Bills Currency Devaluation on Energy Financial Revenue - VNR Other financial income

Financial Expenses Debt Services Monetary Correction Adjustment of R&D and Energy Efficiency Other expenses

Net Financial Result

% Chg.

7.7 (18.0) 3.9 32.3 1.5 27.4

2.2 -71.6% (30.8) 70.6% 11.5% 4.4 53.7% 49.7 0.3 154.3 81.6% 2.7 182.7 566.1%

(7.7) (0.4) (5.6) (8.4) (22.1) 5.4

(5.7) -26.0% (0.9) 129.9% (4.0) -28.9% (4.3) -48.9% (14.9) -32.7% 167.9 3036.9%

Accumulated 2011 2012

% Chg.

3.6 113.1

16.8 12.2 16.8 56.9 6.1 154.3 6.0 269.2

-28.3% -31.5% 7.7% 19.3% 25.5% 66.6% 137.9%

(31.3) (10.4) (21.7) (46.0) (109.5) 3.6

(24.9) (12.2) (18.7) (13.1) (68.8) 200.3

-20.6% 16.6%

23.5 17.8 15.6 47.7 4.9 -

-14.1% -71.5% -37.1%

5432%

The financial result of the distribution was positively impacted by R$ 154.3 million, due to the advent of MP 579 (converted into Law 12.783/2013), which defined that the financial asset distribution concession is measured by the Value rd of New Reinstatement - VNR, which was approved by ANEEL in the 3 round of rate review, completed in August 2012.

Regulatory Assets and Liabilities Inter-ministry Decree 25, dated January 24, 2001, issued by the Finance and the Mines and Energy State Ministries, established the Compensation Account for items in Portion A – CVA as the account for registering variances in unmanageable costs that occur in periods between tariff readjustments. With the adoption of the IFRS, the Company’s results no longer reflect the deferred CVA amount; however it continues to be accounted to comply with ANEEL’s requirements. The table below demonstrates the balance of Regulatory Assets and Liabilities at the end of the period. Further details can be obtained from the Performance Review contained in the Financial Statements:

Celesc Distribuição S.A. - Accumulated Regulatory Assets and Liabilities R$ million Regulatory Assets Regulatory Liabilities Net Balance

in in in 12/31/2011 03/31/2012 06/31/2012

104.1 (111.5) (7.4)

93.5 (102.7) (9.2)

134.1 (65.4) 68.6

in 09/31/2012

219.2 (58.9) 160.3

in 12/31/2012

234.6 (41.6) 193.0

The balances referred to above are an integral part of the Company’s tariff readjustments and affect IFRS results at the rate the corresponding revenue is billed to consumers. The table below shows the effect of Regulatory Assets and Liabilities on Celesc Distribuição’s results and refers to amounts already considered in the Tariff Cycle 2012/13:

18

4Q12 Results Celesc Distribuição S.A. - Regulatory Assets / Liabilities Effects R$ million

1Q12

2Q12

3Q12

4Q12

12M12

Effect on income without taxes

1.9

(77.9)

(91.6)

(32.8)

(200.4)

Effect on income with taxes

1.2

(51.4)

(60.5)

(21.6)

(132.3)

EBITDA AND ADJUSTED EBITDA EBITDA (IFRS) for Celesc Distribuição S.A. in 4Q12 was a negative R$ 145.0 million while in the year of 2012 recorded the amount of R$ 248.6 million, also negative. However, as mentioned before, non-recurring factors significantly influenced the company's results for the period. The table below presents the EBITDA calculated (ICVM n ° 527/12) and Adjusted EBITDA, considering: (i) the impact of R$ 32.8 million in 4Q12 and R$ 200.4 million in the year, already declared in the determination of Regulatory Assets and Liabilities; (ii) the amount of R$ 14.9 million related to asset retirement in compliance with ANEEL 367 Resolution; (iii) the provisioning for past-due amounts from large consumers that filed for Judicial Recovery of R$ 75.8 million, impacting the results of the comparative period; (iv) costs relating to the provision of Voluntary Dismissal Plan - PDV in the amount of R$ 290.4 million occurred during the year, of which R$ 45.2 million in the last quarter of the year; (v) non-recurring positive effect of R$ 154.3 million, resulting from the valuation of financial assets of concession, pursuant to Law 12.783/13. Celesc Distribuição S.A. / EBITDA IFRS + Regulatory Assets and Liabilities - Non-recurring Effects R$ milllion Profit / Losses (Net) (+) Iincome Tax and Social Contribution (+) ]financial Result (+) Depreciation and Amortization EBITDA (+) Regulatory Assets and Liabilities Effects Recognized (=) EBITDA Adjusted by Regulatory Assets and Liabilities (-) Non-Recurring Effects ANEEL 367 Resolution Judicial Revocery - Large Consumers Voluntary Dismissal Plan Indemnification of residual assets by New Replacement Value - NRV (=) EBITDA Adjusted by Regulatory Assets and Liabilities - Non-recurring Effects

4th Quarter 2011 2012 Chg. % 70.8 (4.6) -106.5% (3.5) (10.3) (5.3) (167.9) 23.7 37.8 85.8 (145.0) -269.1% 9.3 32.8 95.1 (112.3) -218.1% 56.6 45.2 (154.3) 95.1 (164.7) -273.2%

Accumulated 12 months 2011 2012 Chg. % 287.4 (135.7) -147.2% 115.1 (64.7) (3.5) (200.3) 143.0 152.0 542.1 (248.6) -145.9% (144.5) 200.4 397.6 (48.2) -112.1% 14.9 17.9 75.8 290.4 (154.3) 415.5 178.5 -57.0%

If we adjust the Company's results only for the purpose of Regulatory Assets and Liabilities, EBITDA for the quarter would have recorded an R$ 112.3 million loss (down 218.1% in relation to 4Q11). Year-to-date 2012 would have reached negative R$ 48.2 million, representing a reduction of 112.1%. Including the effects of non-recurring events (ANEEL 367 Resolution, Reorganization - Large Consumers, PDV and adjust in VNR), Adjusted EBITDA registers negative R$ 164.7 million in the quarter and the amount of R$ 178.5 million year-to-date 2012 (reduction of 273.2% and 57.0%, respectively, relative to comparative periods).

19

4Q12 Results NET INCOME Celesc Distribuição S.A. registered a loss (IFRS) of R$ 4.6 million in 4Q12, compared to a net profit of R$ 70.8 million in 4Q11. Year-to-date 2012 loss amounted to R$ 135.7 million against a profit of R$ 287.4 million in 2011. The amounts net of Income Taxes and Social Contribution Taxes for the items that affected negatively the Company's quarterly result are: previously registered Regulatory Assets and Liabilities (R$ 21.6 million), Judicial Recovery from Large Consumers (R$ 37.3 million), PDV (R$ 29.9 million) and adjustment in VNR (+ R$ 101.8 million), as per a table below that shows the adjustments to Net Profit reported on an IFRS basis: Celesc Distribuição S.A. / NET INCOME IFRS + Regulatory Assets and Liabilities - Non-recurring Effects R$ milllion Net Income - IFRS Reported (+) Regulatory Assets and Liabilities Effects Recognized (=) Net Income Adjusted by Regulatory Assets and Liabilities (-) Non-Recurring Effects ANEEL 367 Resolution Judicial Revocery - Large Consumers Voluntary Dismissal Plan Indemnification of residual assets by New Replacement Value - NRV (=) Net Income Adjusted by Regulatory Assets and Liabilities - Non-recurring Effects

4 th Quarter 2011 2012 Chg. % 70.8 (4.6) -106.5% 6.1 21.6 -77.9% 76.9 17.0 37.3 29.9 (101.8) 76.9 (17.6) -122.8%

Accumulated 12 months 2011 2012 Chg. % 287.4 (135.7) -147.2% (95.3) 132.3 192.1 (3.4) -101.8% 9.8 11.8 50.0 191.7 (101.8) -28.3% 203.9 146.3

Adjusting the Company's results only for the purpose of Regulatory Assets and Liabilities, net income for the quarter would have been approximately R$ 17.0 million. The year-to-date accumulated amount would be a negative R$ 3.4 million, which represents a reduction of 101.8%. The result adjusted in 4Q12 represents a net loss of R$ 17.6 million, while in the year-to-date accumulated net income reached R$ 146.3 million (28.3% below the same period of 2011).

Debt Celesc Distribuição’s Gross debt reached R$338.1 million at December 31,, 2012, a 1.5% reduction in relation to 3Q11. This variation is mainly explained by the amortization of the Credit Assignments Investment Fund – FIDC debt. Cash equivalents at the end of the third quarter of 2012 were R$ 127.4 million, resulting in a net debt position of R$210.8 million, against a R$ 26.3 million verified at the end of the same period in 2011 Debt - Celesc Distribuição S.A. Financial Debt - 4Q12 (R$ million) Short Term Debt

81.1

Long Term Debt

257.0

Total Debt ( - ) Cash* Net Debt Net Debt / EBITDA 12M Equity Net Debt / Equity Net Debt/ Equity

Debt Profile 24%

338.1 (127.4) 210.8

76%

-16,5x 1,343 0.25

Short Term Debt

Long Term Debt

0,25x

* Cash and Cash equivalents + Marketable Securities

20

4Q12 Results Celesc Distribuição S.A. sponsors the Celesc Foundation for Social Security - CELOS, a closed, complementary pension entity. Taking into consideration the Obligations with Pensions, which added-up to R$ 619.8 million on December 31, 2012 and with other Employee Benefits (Health Plan, PDV, other) in the amount of R$ 680.7 million, the Company's adjusted net debt reached R$ 1.2 billion as demonstrated in the table below:

Adjusted Debt- 4Q12 (R$ milllion)

Total Debt Profile

Short Term Debt

81.1

Long Term Debt

257.0

Total Debt

including Post-Employment Benefits

338.1

Post-employment Benefits Pension Obligations

619.8

Other benefits to employees

680.7

( - ) Net Pension Plan ( - )Cash*

6%

1,029.0

(271.5)

94%

(127.4)

Adjusted Net Debt

1,239.7

Equity

1,343.0

Net Debt / Equity

Dívida Curto Prazo

Dívida Longo Prazo

0.9x

* Cash and Cash equivalents + Marketable Securities

INVESTIMENTS Celesc Distribuição’s investments totaled R$126.2 million in the fourth quarter of 2012, 12.1% below the amount of investments made in the same period in 2011. Investments in 2012 reached R$353.2.0 million. The table below shows the distributing company’s investments, indicating those which make up the Regulatory Assets Base (RAB):

CAPEX - Celesc Distribuição S.A. 4th Quarter

R$ milllion 2011 Investiments Distribuição RAB Non - RAB Depreciation / Amortization Relation CAPEX x Depreciation

2012

Accumulated 12 months Chg. %

2011

2012

Chg. %

143.5

126.2

-12.1%

353.0

353.2

0.1%

141.4

123.0

-13.0%

339.7

338.1

-0.5%

2.1

3.2

49.9%

13.3

15.1

14.0%

23.7 -

37.8 -

59.3%

143.0

152.0

6.3%

6.1

3.3

-44.8%

2.5

2.3

-5.9%

21

4Q12 Results CAPEX Celesc Distribuição (R$MM)

CAPEX Celesc Distribuição (R$MM)

2.1 13.3

141.4 6.1

3.2 339.7

123.03.3

2011

338.1 2.3

2.5 2011

2012

1 RAB

15.1

2012

2 NON - RAB

RAB

Relation CAPEX x Depreciation

NON - RAB

Relation CAPEX x Depreciation

The graph below shows the composition of the investments made during the period CAPEX BREAKDOWN - CELESC DISTRIBUIÇÃO (%)

1.2%

HIGH VOLTAGE

11.7% 28.5% 10.1%

LOW AND MEDIUM VOLTAGE AUTOMATION

2.2% MEASUREMENT

46.4%

MAINTENANCE OTHER

2.1.3 – Regulatory Aspects for Celesc Distribuição S.A. Third Tariff Cycle Periodic Revision ANEEL, within the scope of the Public Executive Board Meeting held on July 31, 2012, ratified Celesc Distribuição’s process for the 3rd Tariff Cycle Periodic Revision (“3rd CRTP”), establishing the rate for repositioning tariffs at +3.99% (economic effect), with an average perceived effect for the consumer of -0,32% as of August 7, 2012. Details of the Tariff Revision process are available at the Nota Técnica nº 246/2012-SRE/ANEEL link, or at www.aneel.gov.br and on the Investor Relations page at www.celesc.com.br/ri.

22

4Q12 Results Provisional Measure 579 / 2012 and Law nº 12.783/13 Celesc Distribuição S.A.’s concession agreement is provisioned to terminate in July, 2015. On September 10, 2012, the Company filed a request for extending the term of concession agreement nbr. 56/1999, ratifying the intentions presented in June to the regulating body – the National Electric Energy Agency (Agência Nacional de Energia Elétrica - ANEEL). Pursuant to Provisionary Measure 579/2012, later converted to Law 12.783/2013 and further regulated by Federal Decree 7.891 of January 23, 2013, the Government revised tariffs on an extraordinary basis as of January 24, with the aim of transferring to consumers the benefits generated by the new legislation. Greater details of the results of the Extraordinary Tariff Revision are available at Resolução Homologatória Nº 1.416, dated January 24, 2013.

2.2 - Celesc Geração 2.2.1 Operating Performance Availability of Facilities In 3Q12 the plants operated by Celesc Geração achieved a 95.0% rate of availability, disregarding programmed interruptions. Taking all programmed interruptions into consideration, global availability during the second quarter of 2012 reached 92.8%. This figure is 0.1 percentage points under the rate of overall availability obtained in the last quarter (3Q12). This was mainly due to a greater quantity of programmed maintenance stops executed during the period of low river affluence.

Production The total volume of energy generated in 4Q12 by Celesc Geração’s plants was 13.8% below that for 4Q11. In the accumulated year-to-date position, generated energy dropped by 17.2% when compared to 2011. In 2012, an average of 54.2 MW was generated, totaling a net production of approximately 475 GWh which resulted a capacity factor of about 67.5%. This is mainly explained by hydrographic conditions (low effluence) throughout the state of Santa Catarina. The low level of the reservoirs forced the complete shut-down of machinery in several occasions.

4th Quarter

Operating Performance (MWh) 2011 Own Generating Plant PCH Palmeiras

2012

Accumulated 12 Months Chg. %

2011

2012

-13.8%

Chg. %

573,897

475,114

-17.2%

127,132

109,558

21,929

27,845

27.0%

159,598

142,680

-10.6%

96,252

73,716

-23.4% -21.8%

PCH Bracinho

22,320

19,541

-12.4%

PCH Garcia

18,728

13,305

-29.0%

71,761

56,147

PCH Cedros

17,378

13,320

-23.4%

67,394

62,136

-7.8%

PCH Salto

12,074

8,431

-30.2%

38,475

27,925

-27.4%

9,587

6,297

-34.3%

41,131

24,976

-39.3%

35,868

34,197

-4.7%

PCH Celso Ramos PCH Pery

9,172

8,584

-6.4%

PCH Caveiras

7,236

4,617

-36.2%

29,379

22,476

-23.5%

22,076

20,435

-7.4%

4,711

4,635

-1.6%

PCH Ivo Silveira

5,644

5,324

-5.7%

PCH Piraí

1,270

1,121

-11.7%

4,017

3,184

-20.8%

3,235

2,608

-19.4%

CGH Rio do Peixe

941

726

-22.9%

CGH São Lourenço

854

449

-47.5%

23

4Q12 Results 2.2.2 – Financial Performance Main Highlights - Celesc Geração S.A. 4th Quarter 2011 2012 14.6 23.4 (1.6) (4.7) 13.0 18.7 (7.5) (136.4)

R$ milllion Gross Operating Revenue Deductions from Gross Operating Revenue Net Revenues Operating Costs and Expenses Energy Costs Operating Expenses EBITDA EBITDA MArgin (%)

60.4% 190.5% 44.1% 1726%

Accumulated 12 months 2011 2012 Chg. % 58.2 83.6 43.6% (6.4) (15.1) 135.7% 51.8 68.5 32.2% (32.3) (171.1) 429.9%

(0.8)

(4.6)

500.7%

(2.9)

(11.3)

(6.7)

(131.8)

1865%

(29.4)

(159.9)

444.5%

6.3

(116.6)

-1944%

26.2

(96.5)

-468.0%

48.8%

-624.0%

-671,4p.p

50.6%

-140.9%

-191,6p.p.

Net Income Net Margin(%)

Chg. %

283.8%

3.8

(79.1)

-2208%

13.8

(70.4)

-609.8%

28.9%

-423.3%

-452,1p.p.

26.6%

-102.8%

-129,4p.p.

Receita Operacional Bruta Gross Operating Revenue - Celesc Geração S.A. R$ million GROSS OPERATING REVENUE Electric Energy Supply Electric Energy Sales to Distributors Electric Energy Trading Chamber (CCEE)

Accumulated 12 Months 2011 2012 Chg. % 14.6 23.4 60.4% 7.1 12.2 71.8% 7.3 11.9 64.2% 0.2 (0.7) -386.7%

Acumulado 12 Meses 2011 2012 Var. % 58.2 83.6 43.6% 27.8 43.4 55.8% 27.9 37.4 33.9% 2.5 2.9 15.4%

Celesc Geração’s Gross Operating Revenue grew by 60.4% in 4Q12 and by 43.6% in the year-to-date position, compared to the full 2011 tax year. This variation is explained as follows: (i) contractual readjustments; (ii) the influence of the increase in the Price for Liquidating Differences - PLD which varied significantly in the comparison periods (the maximum value for the average monthly PLD for the Southern Region in 2011 was R$45.55/MWh in November while, in 2012, the average monthly PLD for this region reached up to R$ 375,54/MWh); (iii) an increase in the value of generated energy as a result of the alteration in the concession regime to Independent Energy Producer - PIE for eight plants belonging to the company’s own installations and which sell their energy under the incentive program with a 50% discount in the TUSD. The table below shows the 2.0% reduction in the volume of billed energy in year-to-date 2012 and which basically reflects the unfavorable hydrographic conditions during most of the period. Energia Sold - Celesc Geração S.A. R$ million

Accumulated 12 Months 2011

2012

Chg. %

Electric Energy Supply

635.6

622.8

-2.0%

Industrial

190.0

289.3

52.3%

Commercial, Services and other Electric Energy Sales to Ditributors Electric Energy Trading Chamber (CCEE)

11.0

15.5

41.3%

373.0

264.8

-29.0%

61.6

53.2

-13.8%

24

4Q12 Results Operating Costs and Expenses R$ milhões OPERATING EXPENSES

4th Quarter 2011 7.5

2012 136.4

Eletric energy purchased for resale + charges Electric grid usage

0.1 0.7

4.1 0.5

Personnel and Management Material Third-Parties Services

3.4 0.1 0.8

3.5 0.3 1.1

Depreciation / Amortization Allowance for doubtfull accounts , net Other provisions, net

0.8 0.9 -

Accumulated 12 Months Chg. % 1726% 7054% -31.5% 2.8% 236.6% 40.8% 45.3%

2011 32.3

2012 171.1

0.1 2.8

9.2 2.1

12.7 0.6 4.1

13.1 0.5 4.4

-17.7%

6.3 2.3 124.5

-12.4%

1.2 0.6 123.8

-37.4% -

6.9 2.7 -

Chg. % 429.9% 7934% -24.6% 2.6% 8.9% -8.8% -

Financial compensation for use of hidric Resources

0.2

0.2

14.1%

1.2

1.1

-9.8%

Other expenses

0.5

1.1

129%

1.2

7.7

537%

-

0.2

-

0.2

0.1

-48.4%

Equity Result

Company management decided to provision the amount of R$123.8 million for Fixed Asset losses which resulted from an Impairment Test conducted on its plants. This provision resulted from the decision to not adhere to the terms of Provisionary Measure – MP 579, later converted into Law 12.783 date January 11, 2013. As a result, Operating Expenses increased significantly in 4Q12 and consequently in the accumulated annual position when compared to the same period in 2011. Disregarding this non-recurrent expense, full-year 2012 Operating Expenses for Celesc Geração grew by 46.4% and the main impact was due to electric energy purchased for resale (+R$9.1 million in relation to 2011) and associated fringe costs which arose as a result of a change in the consumption profile for the Company’s power plants, vis-à-vis the change in the concession regime to PIE – Independent Energy Producer (in June, 2012).

EBITDA AND NET PROFIT/LOSS Celesc Geração results in 4Q12 and year-to-date 2012 were negative mainly as a result of valuation effects from the decision to not adhere to the early concession renewal conditions proposed. EBITDA was a negative R$116.6 million in the quarter and R$96.5 million in the year. Celesc Geração S.A. / EBITDA (CVM Nº 527/2012) R$ million Profit / Losses (Net) (+) Income Tax and Social Contribution (+) Financial Result (+) Depreciation and Amortization EBITDA (-) Non-Recurring Effects Impairment Test SPHs (=) EBITDA Adjusted by Non-recurring Effects

4th Quarter 2011 2012 3.8 (79.1) 1.9 (37.5) (0.2) 0.8 0.2 6.324 (116.4) 123.8 6.3 7.4

Chg. % -2208.2%

-1940.4%

17.8%

Accumulated 12 Months 2011 2012 Chg. % 13.8 (70.4) -609.8% 7.1 (31.7) 2.2 1.5 23.1 (100.6) -535.1%

23.1

123.8 23.3

0.7%

The adjusted Company EBITDA as shown above excludes non-recurring effects related to the provision for Fixed Asset losses indicated in the Impairment Test, which is based on Technical Pronouncements CPC 01 (R1) – Reduction in the Recovery Value of Assets and CPC 27 – Fixed Assets, and on Technical Interpretation ICPC 10 – Interpretation on the Initial Employment of Fixed Assets and of Property for investment of Technical Pronouncements CPC 27, 28, 37 and 43.

25

4Q12 Results Adjusted EBITDA for the Company amounted to R$7.2 million during the last quarter of the year (a 14.6% increase in relation to 4Q11) and R$27.4 million in the accumulated 2012 position, which represents a 4.4% increase. Due to reasons previously mentioned, Celesc Geração registered a Net Loss of R$79.1 million in 4Q12 and R$70.4 million for full-year 2012. However, after adjusting the results for the Impairment Test (net of taxes), the Company would have generated a Net Profit of R$2.6 million in 4Q12 and R$11.4 million in the year. Celesc Geração S.A. / Net Profit / Losses Adjusted 4th Quarter 2011 2012 3.8 (79.1) 81.7 3.8 2.6

R$ million Net Profit / Losses ( IFRS Reported ) (-) Non-Recurring Effects Impairment Test SPHs (=)Net Profit / Losses Adjusted by Non-Recurring Events

Accumulated 12 Months 2011 2012 Chg. % -609.8% 13.8 (70.4) 81.7 13.8 11.4 -17.7%

Chg. % -2208.2%

-29.8%

Investments (CAPEX) Celesc Geração invested R$40.9 million during year of 2012, 35.7% less than in the same period in 2011. Investments in its own generating facilities amounted to R$33.7 million, a 43.1% reduction reflecting the impending end of the construction work to enlarge the Pery Small Hydroelectric Plant and the consequent reduction of investments needed in that plant. Moreover, the lower rate of investment is tied to the enactment of Provisionary Measure 579/2012, which precluded the Company from analyzing and approving projects for adjusting the power output that were in the process of being authorized at ANEEL. On the other hand investments in SPC’s in which the Company holds a minority interest grew 61.6% in 2012, reaching R$7.3 million.

CAPEX - Celesc Geração S.A. th

4 Quarter

R$ milhões 2011 Investiments Geração Own Power Plants Generating Complex Investimentos in SPEs

2011

2012

Chg. %

15.2

17.7%

63.7

40.9

-35.7%

11.0

12.6

15.0%

59.2

33.7

-43.1%

1.9

2.6

33.2%

4.5

7.3

61.6%

CAPEX Celesc Geração (R$MM)

16.0

70.0

14.0

60.0 50.0

10.0 8.0

Accumulated 12 Months Chg. %

12.9

CAPEX Celesc Geração (R$MM)

12.0

2012

12.6 11.0

40.0 30.0

6.0

59.2 33.7

20.0

4.0

10.0

2.0 1.9

2.6

4Q11

4Q12

-

-

Investimentos in SPEs

Own Power Plants Generating Complex

4.5

7.3

2011

2012

Investimentos in SPEs

Own Power Plants Generating Complex

26

4Q12 Results 2.2.3 – Aspectos Regulatórios da Celesc Geração S.A. Independent Power Producer– PIE As of June, 1012 Celesc Geração obtained approval from the Ministry of Mines and Energy – MME, for its request to alter its concession régime. Among the 12 (twelve) power plants that make up its own power generating complex, 8 (eight) are now considered Independent Electric Energy Producers – PIE and can sell incentivized energy in the Environment for Freely Contracting – ACL with a 50% discount on the TUSD – Tariff for Use of The Distribution System. As a result, longterm agreements with A4 group consumers were signed in which they are supplied with incentivized energy with a 50% discount in the TUSD.

Provisional Measure – MP nº 579/12 e Lei nº 12.783/13 On September 11, 2012, the Federal government published Provisionary Measure – MP 579, with the purpose of reducing electric energy costs to consumers. This was later converted into Law 12.783 of January 11, 2013, which covers aspects related to concessions for generating, transmitting and distributing electric energy and the reduction of sector charges aiming at moderating tariffs. On September 14, 2012, Presidential Decree – DP 7.805 was enacted, defining certain operating procedures for the implementation of the measures foreseen in MP 579. The regulations allowed concessionaires which had entered into agreements for generating, transmitting and distributing electric energy and which were to terminate between 2015 and 2017 to pull forward contract renewals and extensions under new conditions specified within: (i) remuneration by a tariff calculated by ANEEL for each hydroelectric plant; (ii) allocation of quotas for physically guaranteeing the hydroelectric plant’s energy and power output for concessionaires of the public electric energy distribution services within the National Interconnected System - SIN, to be defined by ANEEL as per regulations issued by the conceding authority; and (iii) submission to the quality standards for the service, set by ANEEL. Joint Mines and Energy and Finance Ministry Ordinance 578 MME/MF, which defined the tariffs to be initially charged by hydroelectric plants covered by MP 579, based on the GAG – Cost of Managing Generation Assets, was only published on November 1, 2012. On the same date Joint Mines and Energy and Finance Ministry Ordinance 580 MME/MF was enacted, which established the amount to be indemnified for the value invested in reversible assets which had still not been amortized or depreciated. Celesc Geração possesses a total of 7 (seven) Small Hydroelectric Plants affected by MP 579, which together generate an installed capacity of 70.20 MW (corresponding to 86.5% of the total for the Company’s Own Generating Complex): Own generating Plants - Affected by MP Nº 579/12 Plants

Location

Concession Expiration

PCH Palmeiras PCH Bracinho PCH Garcia PCH Cedros PCH Salto PCH Pery

Rio dos Cedros/SC

7/11/2016

Schroeder/SC

7/11/2016

PCH Ivo Silveira Total - MW

Angelina/SC

7/11/2016

Rio dos Cedros/SC

7/11/2016

Blumenau/SC

7/11/2016

Curitibanos/SC

9/7/2017

Campos Novos/SC

7/7/2015

Installed Capacity (MW) 24.60 15.00 8.92 8.40 6.28 4.40 2.60 70.20

Management analyzed the conditions set for extending the term of the concession as well as the potential economic, financial and tax effects on the indemnification amounts and on tariffs, developing several internal studies that were submitted for evaluation to the Company’s bodies of governance. Pursuant to a Market Announcement published on November 23, 2012, the Company’s Board of Directors, being in agreement with the understanding of the Executive Board, decided not to adhere to the terms for early renewal of the concessions for Celesc Geração’s hydroelectric plants, This position was ratified by the Company’s shareholders during the Extraordinary Shareholders Meeting held on November 29, 2012.

27

4Q12 Results The Pery Hydroelectric Plant was excluded from this decision and legal questioning was filed through a Civil Suit with a request for injunction at the Federal Court, with the purpose of discussing the merit involved in the right to extend the concession for the 20-year term, considering that the aforementioned unit is in the final stages of its refurbishment for th increasing capacity and power, as foreseen in Article 26, 7 paragraph of Law 9.247/96. The petition was accepted and the deadline for signing the Amendment Instrument to the Concession Agreement was suspended. The Union appealed this decision with a Bill of Review and request of a stay of action to suspend the decision, which was denied by the th Regional Federal Court for the 4 Region (Porto Alegre). New regulatory circumstances imply the need for evaluating the potential for recovering the assets, seeing that they foresee the granting of concessions that will not be renewed on their respective contractual dates. In this manner, the Company hired independent technical and professional services for conducting Impairment Tests according to CPC01 on Fixed Assets per Cash Generating Unit (own generating complex), which resulted in an adjustment in the order of R$ 123.8 million (provision for losses in fixed assets).

2.3 SCGÁS 2.3.1 Operational Performance The volume of gas sold by SCGÁS during 4Q12 was 166,262thousand cubic meters, a decrease of 0.8% compared to the same period in the prior year. In the full year of 2012, sales volumes reached 673,626 thousand cubic meters, 0.6% over 2011. The highlight goes to the Residential and Commercial segments that registered the greatest growth rate due to the expansion of services to these classes. GAS SALES PER SEGMENT - Volume ( thousand M3) 4 th Quarter Segmento 2011 2012 Chg. % Industrial 131,079 133,499 1.8 Automotivo 31,666 28,100 (11.3) Comercial 1,431 1,437 0.4 Gás Comprimido 3,401 3,096 (9.0) Residencial 107 130 21.7 Total 167,683 166,262 (0.8)

SCGÁS - Volume Comercializado por Segmento 1.9% 0.1% 0.9%

4Q12

Industrial

Accumulated 12 months 2011 2012 Chg. % 529,137 539,618 2.0 121,788 115,162 (5.4) 5,543 5,900 6.4 12,755 12,423 (2.6) 396 522 32.0 669,620 673,626 0.6

SCGÁS - Volume Comercializado por Segmento 2012

1.8% 0.1% 0.9%

Industrial Automotive

Automotive 17.1%

16.9%

80.3%

Commercial

Commercial

Compressed Natural Gas

Compressed Natural Gas

80.1%

The accumulated Margin of Contribution for 2012 was R$105 million, 23.81% under that verified in 2011 (R$ 130.0 3 million), mainly as a result of a drop in the margin of contribution for the industrial segment - on average R$ 0.10/m - and unfavorable exchange fluctuations which caused accumulated losses up to 4Q12 in the order of R$6 million.

28

4Q12 Results 2.3.2. Economic and Financial Performance In the fourth quarter SCGÁS had a net result of R$13.8 million, a significant increase compared to the loss recorded in the same period of 2011 Main Financial Indicators - SCGÁS S.A. R$ million Gross Operating Revenue Deductions from Operating Revenues Net Operating Revenue Operating Costs and Expenses

4 th Quarter 2011 2012 165.5 216.6 (35.9) (43.8) 129.6 172.9 (128.1) (152.3)

Accumulated 12 months 2011 2012 Chg. % 663.6 780.6 17.6 (135.3) (159.3) 17.7 528.3 621.3 17.6 (464.0) (586.0) 26.3

Chg. % 30.9 21.9 33.4 18.9

Costs of Natural Gas

(107.5)

(122.6)

14.1

(358.9)

(483.3)

34.7

Operating Expenses

(20.6)

(29.7)

44.0

(105.1)

(102.8)

(2.2)

EBITDA EBITDA Margin (%) Profit / Losses Net Net MArgin (%)

7.7 5.9% (1.1) -0.8%

27.7 16.0% 13.8 8.0%

261.8

89.2 16.9% 44.0 8.3%

62.4 10.0% 23.6 3.8%

11,1 p.p 7,7 p.p.

(30.1) -7,6 p.p. (46.3) -5,0 p.p.

A 17.6 % growth in Net Operating Revenue was registered for full-year 2012 when compared to 2011 (+33,4% in 4Q12), as a result of rate adjustments which the Company implemented during the period. Such adjustments, however, were not sufficient to fully offset the increase in Natural Gas costs. which varied upwards due to unfavorable exchange rate variations. This negatively impacted the Company’s performance by increasing the Costs for Natural Gas and Related Supplies item by 34.7% in 2012.

Debt The Company has debt outstanding with the National Bank for Social and Economic Development – BNDES with interest set at the Long-Term Interest Rate (TLJP) + 4.0% per annum. The collateral is bills receivable for some clients specified in the agreement. The loan matures on November 15, 2013. At the end of 2012, SCGÁS possessed Net Cash in the amount of R$33.7 million.

SCGás / Debt - 4Q12 (R$ Milhões)

Short Term Debt Long Term Debt Total Debt ( - ) Cash Equivalents Net Debt / ( Net Cash EBITDA (last 12 months) Total Debt / EBITDA 12M Total Debt / EBITDA 12M Equity Total Debt / Equity Total Debt/ Equity

4.2 4.2 (37.9) (33.7) 62 0.07 0,07x 199.8 0.02 0,02x

29

4Q12 Results Investments (CAPEX) Investments made during 2012 totaled R$31.3 million and reflect the accomplishment of construction work (amplification of the constructed network) of 52 km, bringing up the total to 1,009 km.

CAPEX SCGÁS (in R$Thousandl) 70 60

4.5

50 40

1.4 30

54.3

20

29.9 10 -

2011

2012

DISTRIBUTION SYSTEM

OTHERS

30

4Q12 Results 2.4. Remaining Participations

31

4Q12 Results 3. Holding Equity Accounting Result The Equity Accounting Result shows performance per controlled or associated entities: Equity Result 4 th Quarter 2011 2012 Chg. % 70.8 (4.6) (106.5) 3.8 (79.1) (2,207.2) (0.2) 2.2 (1,298.4) 2.1 2.6 23.9 2.6 2.6 0.2 79.0 (76.3) (196.6) -

R$ million Celesc Distribuição Celesc Geração SCGás ECTE DFESA Equity Result

(1.0) 78.0

Other Results Net Income

(61.0) (137.3)

Accumulated 12 months 2011 2012 Chg. % 287.4 (135.7) (147.2) 13.8 (70.4) (609.8) 7.5 3.9 (48.0) 8.2 9.7 17.4 8.0 8.1 2.5 324.9 (184.3) (156.7) (1.0) 323.9

(275.9)

(74.0) (258.4)

(179.8)

Dividends As per the Company’s Administration Proposal, no amounts shall be distributed regarding the 2012 tax year, as a result of a Net Loss in the order of R$ 258.4 million verified in the period. In the last five tax years (prior to 1012), the Company effected pay-outs (as a percentage of net profits) equivalent to 30%, being that Celesc’s By-laws (chapter V, articles 49 to 50) foresee the payment of dividends at the legal minimum rate, which is 25% of the adjusted net profit. The graph below shows historical data regarding pay-outs as well as for the dividend-yield provided to the Company’s shareholders in those periods (relative to preferred shares CLSC4).

Dividend Yeld 35 .00%

30.00%

30.00%

30.00%

30.00%

30.00%

30 .00%

25.00%

25.00%

25 .00%

20 .00%

15 .00%

10 .00%

6.14%

7.69% 4.75%

4.74%

5.00%

5.24%

7.30%

2.78% 0.00%

0.00%

2005

2006

2007

2008 Dividend Yield PN

2009

2010

2011

2012

PAY-OUT

32

4Q12 Results

4. Consolidated Result 2.3.2 –Financial and Economic Performance GROSS OPERATING REVENUE Gross Operating Revenue - Consolidated Accumulated 12 Months 2011 2012 Chg. % 6,564.4 7,071 7.7% 6,373.8 6,830.1 7.2% 58.2 83.6 43.6% 115.4 132.7 15.0% 19.6 24.6 25.3% 0.2 2.0 775.4% (2.9) (2.1) -26.1% -

R$ million Composição da Receita Bruta por Segmento Celesc Distribuição Celesc Geração SCGÁS ECTE Outras Eliminations of the Consolidated Net Operating Revenue Net Margin

4,191.4 7.8%

4,545.2

8.4%

-5.7%

The Gross operating revenue for the Celesc Group in 2012 amounted to R$ 7.1 billion, 7.7% higher than 2011. Disregarding Construction Revenue (R$344.4 million), which is offset by the same amount booked in operating costs and which therefore does not affect the company’s overall result, GOR grew by 8.2% in 2012. Below the composition of Consolidated Operating Revenue per segment is shown:

Gross Revenue Breakdown per Segment - 4Q12 Celesc Geração 1.2%

SCGÁS 1.9% ECTE 0.3%

Celesc Distribuição 96.6%

33

4Q12 Results CONSOLIDATED NET OPERATING REVENUE Net Operating Revenue for Celesc in 2012 was R$ 4.5billion, 8.4 greater than that for the same period in 2011. Disregarding Construction Revenue(R$344.4 million), NOR increased by 9.2% in the comparison period.

Net Operating Revenue

4,545.2

4,191.4

2011

2012

CONSOLIDATED OPERATING COSTS AND EXPENSES In the fourth quarter of 2012, Celesc’s operating costs (which include Energy Costs and Operation Costs) were R$ 1.6 billion, 57.0% higher than 4Q11 mainly impacted by the cost of acquired electric energy, the deactivation of assets pursuant to ANEEL Resolution 367, receiverships filed by large consumers of the distribution subsidiary, provisions to the Voluntary Dismissal Plan – PDV and the recovery (Impairment) testing of generation assets as discussed previously. The amount for full=year 2012 reached R$5.1 billion, 34.4% over that registered in the same period of the prior year. Disregarding the Cost of Construction (which has no effect on the Result), Operating Costs and Expenses grew by 68.3% in the quarter and by 38.0% for 2012.

OPERATING RESULT (RESULT OF THE ACTIVITIES) AND EBITDA The operating result amounted to a negative R$299.6 million in 4Q12, reflecting increases in operating costs and expenses (+57, 0%). For full-year 2012, the loss was R$499.2 million. EBITDA totaled a negative R$259.4 million in the fourth quarter of 2012. Consequently, the EBITDA margin in this period was -19.5%. In the twelve-month accumulated position, EBITDA reached negative R$336.1 million. Adjusted (normalized) EBITDA in 4Q12 was a negative R$77.4 million, 174.3% under 4Q11. Year-to-date adjusted EBITDA reached R$292.7 million, 37.2% under the period in comparison. Non-recurring factors which significantly affected the company results in the period are listed in the table below, which also shows the reconciliation of the EBITDA calculation (ICVM 527/12) and adjusted EBITDA, considering: a)

In Celesc Distribuição subsidiary: (i) The impact of Regulatory Assets and Liabilities on subsidiary Celesc Distribuição; (ii) The adjustments regarding the deactivation of assets in the distributing company, pursuant to ANEEL’s Resolution 367;

34

4Q12 Results

b) c)

(iii) provisions for lack of payments due by large consumers, also effected in the electric energy distribution subsidiary; (iv) provisions to the Voluntary Dismissal Plan – PDV; (v) a positive effect generated by the valuation of concession financial assets, pursuant to Law 12.783/13. In Celesc Geração subsidiary, the adjustment regarding the Impairment Test conducted on its own generating installations; in the controlled entity, the calculation of the Fair Value of its participation in 15.48% of Companhia Catarinense de Águas e Saneamento – CASAN (Santa Catarina Water and Sanitation Company), aligned with Annex III of Instruction 361 of March 5, 2002 issued by the Securities and Exchange Commission – CVM, R$ 77.8 million were recognized in the Company’s financial result being that: (i) R$ 22.1 million in the heading “Other losses in participation sin other companies” so that the investment returns to its historical value; and (ii) a provision for fair value losses, booked under the heading “Provisions for devaluation in participations in other companies”, amounting to R$55.7 million.

EBITDA Consoliddated FRS + Regulatory Assets and Liabilities - Non-Recurring R$ million Profit / Losses (Net) (+) Income Tax and Social Contribution (+) Financial Result (+) Depreciation and Amortization EBITDA (+) Regulatory Assets and Liabilities Effects Recognized (=) EBITDA Adjusted by Regulatory Assets and Liabilities (-) Non-Recurring Effects ANEEL 367 Resolution Judicial Revocery - Large Consumers Voluntary Dismissal Plan Indemnification of residual assets by New Replacement Value - NRV Impairment Test of Assets (=) EBITDA Adjusted by Regulatory Assets and Liabilities - Non-recurring Effects

4th Quarter 2011 2012 Chg. % 78.0 (137.3) -275.9% (1.6) (71.8) (7.1) (90.5) 25.6 40.2 94.874 (259.4) -373.4% 9.3 104.2

32.8 (226.6)

104.2

56.6 45.2 (154.3) 201.7 (77.4)

Accumulated 12 Months 2011 2012 Chg. % 323.9 (258.4) -179.8% 130.2 (112.4) (15.2) (128.4) 154.2 163.1 593.0 (336.1) -156.7%

-317.6%

(144.5) 448.5

200.4 (135.7)

-130.3%

-174.3%

17.9 466.4

14.9 75.8 290.4 (154.3) 201.7 292.7

-37.2%

FINANCIAL RESULT Celesc had a net financial result of R$90.5 million in 4Q12, substantially higher than the R$7.1 million registered in 4Q11. The Net Financial Result in the year was R$128.4 million. The significant variation in the result is due to a positive, R$154.3 million effect from the valuation of financial assets from Celesc Distribuição’s concession, as explained previously.

35

4Q12 Results Financial Results Statement - Consoilidated Quarter 4Q12 4Q11

In thousand Reais Financial Income Interest Income Income on Accounts Receivable Monetary Correction Financial Incentive Fund Social Currency Devaluation on Energy Financial Revenue - VNR Other Financial Revenues

Financial Expenses Debt Charges Monetary Correction Adjustment of R&D and Energy Efficiency Other Expenses

Net Financial Result

9.8 12.1 2.7 3.9 3.9 32.5

(10.2) (1.9) (5.6) (7.7) (25.4) 7.1

3.3 14.0 5.1 4.4 0.3 154.3 3.5 184.8

% Chg. -65.9% 15.2% 85.7% 11.5% -10.5% 469.1%

(5.9) -41.9% (12.2) 534.8% 14.7 -363.4% (90.8) 1081.1% (94.3) 271.6% 90.5

1174.8%

Accumulated 2012 2011 32.0 49.5 18.5 15.6 4.9 11.7 132.2

(34.3) (12.4) (21.7) (48.6) (117.0) 15.2

21.2 57.3 12.4 16.8 6.1 154.3 12.0 280.1

% Chg. -33.6% 15.8% -33.3% 7.7% 25.5% 2.9% 111.9%

(25.4) -25.9% 6.1% (13.1) - -100.0% (113.1) 133.0% (151.7) 29.7% 128.4

743.8%

NET CONSOLIDATED PROFIT Celesc registered a loss (IFRS) of R$137,3 million in 4Q12 compared with a net profit of R$78.0 million in 4Q11. In the 2012 accumulated position, the loss amounted to R$258.4 million in comparison to a R$323.9 million profit in 2011. As previously presented, the Celesc Distribuição subsidiary was negatively impacted during the period by the effects of cost raises for purchased electric energy and other non-recurrent items. The following table presents restated amounts after the mentioned effects are excluded from the consolidated result: NET INCOME IFRS Consolidated + Regulatory Assets and Liabilities - Non-Recurring R$ milhões Net Income - IFRS Reported (+) Regulatory Assets and Liabilities Effects Recognized (=) Net Income Adjusted by Regulatory Assets and Liabilities (-) Non-Recurring Effects ANEEL 367 Resolution Judicial Revocery - Large Consumers Voluntary Dismissal Plan Indemnification of residual assets by New Replacement Value - NRV Impairment Test of Assets (=) Net Income Adjusted by Regulatory Assets and Liabilities - Non-recurring Effects

4th Quarter 2011 2012 Chg. % 78.0 (137.3) -275.9% 6.1 84.2

21.6 (115.7)

84.2

37.3 29.9 (101.8) 133.1 (17.2)

Accumulated 12 Months 2011 2012 Chg. % 323.9 (258.4) -179.8%

-237.4%

(95.3) 228.5

132.3 (126.1)

-155.2%

-120.4%

11.8 240.4

9.8 50.0 191.7 (101.8) 133.1 156.7

-34.8%

0.0%

Adjusting the Company’s results only for the effect of Regulatory Assets and Liabilities, the loss in the quarter would be reduced to about R$115.7 million. The accumulated 2012 result would be a negative R$126.1 million, which represents a decrease of 155.2%. Adjusted Net Profit, including non-recurrent effects, totals R$17.2 million negative in 4Q12, while that for the full year of 2012 reaches R$156.7 million (34.8% lower than that registered for the same period in 2011).

36

4Q12 Results Consolidated Debt Gross consolidated debt at December 31, 2012 was R$ 388.8 million, 4.8% over the amount registered in the same period of 2011. Cash and cash equivalents amounted to R$199.9 million at the end of the third quarter, resulting in a net debt position in the order of R$189.0 million.

Consolidated Debt Debt- 4Q12 (R$ milllion) Short Term Debt

88.2

Long Term Debt

300.7

Total Debt

388.8

( - ) Cash *

(199.9)

Net Debt / (Net Cash)

189.0

EBITDA (last 12 months)

-344.3

Net Debt / EBITDA 12M

-

Equity

1900.8

Total Debt / Equity

0,20x

The Company’s adjusted debt, that is, if the obligations assumed with post-job benefits (CELOS Foundation) are considered, was R$ 1.2 billion on December 31, 2012. Debt + Pension Plan Adjusted Debt- 4Q12 (R$ milllion) Total Debt Post-employment Benefits

388.8 1,029.0

Pension Obligations

619.8

Other benefits to employees

680.7

( - ) Net Pension Plan ( - )Cash* Adjusted Net Debt EBITDA (last 12 months) Adjusted Net Debt / EBITDA 12 months Equity Net Debt / Equity

(271.5) (199.9) 1,217.9 (344.3) -3.5x 1,900.8 0.6x

* Cash and Cash equivalents + Marketable Securities

37

4Q12 Results In the following table is a list of the loans and financing contracts taken down by the companies in the Group: Loans and Financing (R$ '000) - December 2012 Interest Local Currency BNDES Empréstimos Bancários Eletrobrás Finame Debêntures FIDC Celesc I Total

Total Dec/11

Total % Chg. Dec/12

4.0 103.4 151.1 27.7 21.5 63.4 371.1

0.7 119.3 189.3 38.2 41.3 388.8

Short Term - Current

241.3

88.2

Long Term - 1 to 5 years

110.0

258.0

-

19.8

42.6

-

369.4 1.7

127.4 261.5

TJLP + 4.50% 106% CDI 5.00% 5.73% CDI + 1.30% CDI + 0,95%

Long Term - above 5 years

Cash and Marketable Securities Net Debt / (Cash)

(82.4) 15.4 25.3 37.7 92.4 (100.0) 4.8 -

(65.5) -

BNDES (National Bank for Social and Economic Development) This concerns a financing agreement entered into by controlled entity SCGÁS with the BNDES. The loan is guaranteed by collection titles issued against specific clients which are kept in custody. This loan becomes due on November 15, 2013 and the bears interest at the Long-term Interest Rate (TJLP) plus 4% p.a.

Bank Loans On December 3, 2007 Celesc Distribuição took down a loan with Banco do Brasil for the Liquidation of Debits with Celos, at an interest rate of 106% of the interbank certificate of deposit rate - CDI. On April 14, 2011, Celesc Distribuição S.A. signed a Working Capital Financing Agreement with Banco do Brasil with interest set at 10.692% p.a. plus IRP (Savings Remuneration Index). This operation contemplates an amount of R$ 80 million which is due in 18 months with a 12months grace period for payment of principal and interest, in six monthly installments. These agreements are guaranteed by receivables and have been accepted by ANEEL. Additionally, on September 25, 2012 Celesc Distribuição used R$19.8 million of its corporate card limit with Banco do Brasil. This loan bears monthly interest at 0.77% and becomes fully due in November, 2012. During a meeting held on October 17, 2012 the Board of Directors authorized R$110.0 million worth of funds to be raised in the market, paying 7.55% p.a., with a 6 months term and a 12 months grace period. This debt will be secured by duplicate invoices held in custody for an amount equivalent to 100% of the balance outstanding of the operation. This information will be disclosed in the next quarter’s financial statements.

Eletrobrás The amounts taken down are meant, among other purposes, to finance the rural electrification programs and the funds originate from the Global Reversal Fund - RGR and from the Eletrobrás Financing Fund. In general, the agreements for these loans contemplate a 24 months grace period, a 60 months amortization term, interest at a 5% p.a. rate, an administration Fee of 2% p.a., are guaranteed by receivables and have been acknowledged by ANEEL. Finame The loan taken down was for the purchase of machinery and equipment. It features interest rates ranging from 4.5% p.a. to 8.7% p.a. In the event of non-payment, the guarantee is tied to the debtor’s receivables with ANEEL’s concurrence.

38

4Q12 Results Debentures ECTE issued a single series of 75 debentures on March 16, 2011, in the amount of R$ 75 million, for a five-year term as of date of issuance. They are simple, non-convertible (to shares), booked and nominal. The debentures yield 100% (one hundred percent) of the accumulated daily average for the one-day Inter-finance Deposit (DI) rate (an extra over to the group), to which is added a spread of 1.30% per annum based on 252 working days. The per-unit nominal value of the debentures is amortizable starting from the sixth month as of the date of issuance, in monthly and consecutive installments as per the timetable included in the booked deed of sale of the debentures, beginning on September 16, 2011. The current value for the quarter ended September 30, 2012 is R$57.2 million, of which R$ 17.7 million or 30.88% of the total balance outstanding have been proportionately consolidated in the Company.

Credits Receivable Investment Fund (FIDC) The FIDC or "Receivables Fund" is a type of investment fund with assets composed of credit rights. In 2007, Celesc Distribuição S.A. offered as receivables the credit rights regarding future energy consumption for previously selected consuming units, all of which possessed a performing profile. According to accepted Brazilian accounting practices, the FIDC was consolidated and the portion owed, related to quotas purchased by third parties are accordingly booked in liabilities, as debt.

The Group’s Investments The volume of Celesc Group’s investments in the fourth quarter of 2012 was R$148.5 million, 13.8% lower than investments in 4Q11. The distribution subsidiary was responsible for the greater portion of R$126.2 million. Celesc Geração S.A. invested R$15.2 million while the investments for SCGÁS in 4Q12 added up to R$7.1 million. The table below shows the amounts invested in the third quarters of 2011 and 2012 and the amount accumulated in the first nine months: Investments In Thousand Reais Generation Distribution of Energy Distribution of Natural Gas Total

4 th Quarter 2011 2012 12.9 15.2 143.5 126.2 15.7 7.1 172.2 148.5

Accumulated 12 months 2012 2011 40.9 63.7 17.7% 353.2 353.0 -12.1% 31.3 58.8 -54.8% -13.8% 425.4 475.4

Chg. %

Chg. % -35.7% 0.1% -46.8% -10.5%

39

4Q12 Results 5 – Main Challenges

40

4Q12 Results Performance in Capital Markets In the fourth quarter of 2012, Celesc’s preferred shares (CLSC4) closed out the period being quoted at R$27.00, a 21.5% devaluation in relation to the value at the end of September, 2012 (R$34.40). In the accumulated 12-months period the value of preferred shares had an devaluation of 20.1%. The value of common shares (CLSC3) dropped by a greater amount (-58.9%). This depreciation mainly reflects the effects of Provisionary Measure 579/2012 that deals with concessions for generating, transmitting and distributing electric energy and which affected the market value of the majority of the companies in the electric sector. The Electric Energy Index – IEE dropped by 4.3% in 4Q12, as opposed to an increase of 3.0% in the São Paulo State Commodities and Stock Exchange Index (IBOVESPA) during the same period. The graph and table below show the final (on 12/31/2012) quotations and respective percentage variations for CELESC shares and for the main market indicators: CLSC4 Performance versus Bovespa Index and IEE (Base 100 in 12/31/11) 150 CLSC4 IBOVESPA IEE

100

50

Jan-12

Mar-12

Comparative CLSC4, Ibovespa and IEE Closing Price (CLSC4) Average Volume Traded Average Volume Traded CLSC4 - Quarterly Profitability CLSC4 - 12 Months Profitability Market Capitalization Market Capitalization Ibovespa - Quarterly Profitability Ibovespa - Accumulated Profitability IEE - Quarterly Profitability IEE - Accumulated Profitability

May-12

R$/share Thous. shares R$ '000 % % R$ mm US$ mm % % % %

Jul-12

4Q11 33.88 19.3 657.7 (1.6) (21.2) 2,054.1 1,070.9 8.5 (17.3) 17.3 9.1

Sep-12

1Q12 40.55 26.3 959.3 19.7 (5.7) 2,378.5 1,351.4 13.7 (5.9) 8.2 18.0

Nov-12

2Q12 39.80 17.3 712.9 (1.8) 4.3 2,361.2 1,299.4 (15.7) (12.9) 0.4 17.8

3Q12 34.40 24.5 876.8 (32.2) (21.6) 1,297.7 639.7 12.1 16.5 (18.7) 3.5

4Q12 27.00 50.7 1,325.9 (21.5) (20.3) 1,196.7 670.9 3.0 7.4 (4.3) (11.7)

Source: Economatica

41

4Q12 Results

ATTACHMENTS Consolidated Balance Sheet, Income Statement and Cash Flow

CELESC - CENTRAIS ELÉTRICAS DE SANTA CATARINA S.A. BALANCE SHEET Assets

in R$ thousands 12/31/2012

12/31/2011

Current Cash and cash equivalents Marketable Securities Contas a receber

Liabilities and Shareholders´Equity

12/31/2012

12/31/2011

Current 199,865

442,495

38,490

15,062

999,436

858,809

Suppliers Bank Loans and financing Accrued Payroll

721,331

433,503

88,165

241,298

116,471

120,632

95,441

129,800

Inventories

15,993

20,510

Tax and Social Contribution

Recoverable income and Social Contribution Tax

92,432

73,337

Proposed Dividends

580

72,048

-

20,303

Regulatory Charges

123,700

174,941

28,257

41,675

Related Parties

Asset Compensatorium - concession Other credits

Obligation w ith Employees Benefits 1,374,473

1,472,191

Other Liabilities

14,539

18,113

131,391

115,908

48,391

19,177

1,340,009

1,325,420

300,654

129,800

Long Term Liabilities Non Recurring Assets Bank Loans and financing Marketable Securities Related Parties Marketable Securities

134,973

121,430

4,262

64,888

Tax and Social Contribution

41

1,207

Deferred Taxes

122,451

144,142

Regulatory Charges

189,184

147,841

54,981

133,013

2,435,306

1,987,103

14,060

13,697

Deferred Taxes

515,342

408,562

Provision for contigencies

Escrow Deposits

139,910

147,178

Other Liabilities

7,335

4,838

Asset Compensatorium - concession Recoverable Taxes

Other credits

32,533

25,844

Intangible

Investment in Controlled Companies

467,092

616,381

Property, plant and equipment

273,194

370,105

Related Parties Obligation w ith Employees Benefits

-

-

1,169,457

949,795

426,645

489,207

4,239

3,287

2,212,671

1,865,279

3,552,680

3,190,699

1,017,700

1,017,700

Shareholders´Equity 4,078,987

Total Assets

5,453,460

3,893,039

5,365,230

Capital Capital Reserves

316

316

Income Reserves

745,892

1,001,394

Fixed Asset Valuation Adjustment

136,872

139,736

Accumulated Loss

-

-

Additional Dividends at a disposal of ESM

-

15,385

Adjustement for IFRS adoption

-

-

Total of Liabilities and Shareholders´Equity

1,900,780

2,174,531

5,453,460

5,365,230

42

4Q12 Results CELESC DISTRIBUIÇÃO S.A. INCOME STATEMENTS - CONSOLIDATED Gross Operating Revenue Electricity Sales Natural Gas Sales Electricity Supply Short Term Energy Provision of Electricity Netw ork Lease and Rentals Service Income Other Revenues Financial Revenue Construction Revenue Deductions from Operating Revenue Value-Added Tax (ICMS) PIS / COFINS Regulatory Charges (RGR) Energy Development Account (CDE) Fuel Consumption Account (CCC) Research and Development Energetic Efficency Other Expenses Net Operating Revenue Opertating Costs and Expenses Purchases of Electricity for Resale Personnel, Management Actuarial Expenses Materials Third-Party Services Depreciation & Amortization Provision for doubtful accounts Reversal of provision for doubtfull accounts Other Provisions Reversal of other provisions Regulatory Charges Other Expenses Construction cost

Equity Income (R$ thousand) Operating Incom e (Loss) before Financial Incom e Operating Margin (%) EBITDA (R$ thousands) EBITDA Margin (%) Net Financial Incom e Financial Revenues Financial Expenses Incom e before Incom e Tax and Social Contribution Provision for Income Tax Deferred Tax Net Incom e Annual Return on Equity Net Margin (%)

4Q11 1,709,916 1,359,383 28,140 34,377 83,866 12,150 1,891 2,481 43,607 144,021 (605,453) (318,599) (145,119) (12,490) (46,343) (70,768) (4,672) (4,624) (2,838) 1,104,463 (1,035,152) (610,533) (18,271) (134,065) (39,013) (8,561) (52,121) (25,563) (15,586) 2,866 (12,594) 15,907 (3,118) 6,961 (144,021) 2,560 69,311 6.3% 94,874 8.6% 7,100 32,471 (25,371) 76,410 11,121 (9,492) 78,040 3.6% 7.1%

4Q12 1,944,512 1,580,311 35,141 40,220 150,586 91,515 9,861 1,918 2,793 (93,230) 125,397 (617,052) (338,130) (167,507) (7,209) (51,970) (37,829) (5,577) (5,477) (3,353) 1,327,460 (1,627,072) (988,632) (20,848) (184,661) (19,787) (6,418) (54,218) (40,216) (65,847) 1,927 (130,991) 15,508 (2,898) (7,159) (125,397) 2,565 (299,612) -22.6% (259,396) -19.5% 90,506 184,781 (94,274) (209,105) (7,357) 79,173 (137,290) -7.8% -10.3%

Chg % 13.7% 16.3% 24.9% 17.0% 9.1% -18.8% 1.4% 12.6% -313.8% -12.9% 1.9% 6.1% 15.4% -42.3% 12.1% -46.5% 19.4% 18.4% 18.1% 20.2% 0.0% 57.2% 61.9% 14.1% 37.7% -49.3% -25.0% 4.0% 57.3% 322.5% -32.8% 940.1% -2.5% -7.1% -202.8% -12.9% 0.2% -532.3% 0.0% -373.4% 0.0% 1174.8% 469.1% 271.6% 0.0% -373.7% -166.2% -934.1% -275.9%

2011 6,564,437 5,433,543 106,201 148,002 318,119 34,953 8,495 8,420 157,778 348,926 (2,373,023) (1,282,021) (567,828) (29,021) (185,372) (261,355) (18,195) (18,010) (11,221) 4,191,414 (3,752,582) (2,320,806) (61,012) (509,525) (78,990) (30,436) (185,559) (154,169) (76,424) 45,306 (42,850) 32,317 (10,496) (18,965) (348,926) 7,953 438,832 10.5% 593,001 14.1% 15,219 132,177 (116,959) 454,051 (124,043) (6,121) 323,887 14.9% 7.7%

2012 Chg% 7,070,424 7.7% 5,854,383 7.7% 127,108 19.7% 151,855 2.6% 150,586 358,449 12.7% 41,094 17.6% 7,068 -16.8% 12,143 44.2% 23,371 -85.2% -1.3% 344,367 (2,525,210) 6.4% (1,357,841) 5.9% (624,376) 10.0% (43,504) 49.9% (207,878) 12.1% (239,155) -8.5% (20,223) 11.1% (19,976) 10.9% (12,257) 9.2% 4,545,214 8.4% 0.0% (5,044,424) 34.4% (3,136,770) 35.2% (82,153) 34.7% (835,213) 63.9% (58,741) -25.6% (23,429) -23.0% (188,517) 1.6% (163,104) 5.8% (105,341) 37.8% 7,661 -83.1% (179,221) 318.2% 117,592 263.9% (11,539) 9.9% (49,434) 160.7% (344,367) -1.3% 8,149 2.5% (499,210) -213.8% -11.0% 0.0% (336,107) -156.7% -7.4% 0.0% 128,402 743.7% 280,089 111.9% (151,687) 29.7% 0.0% (370,808) -181.7% (18,890) -84.8% 131,332 -2245.5% (258,366) -179.8% -14.7% -5.7%

43

4Q12 Results CELESC D - Cash Flow R$ Thousands

2011

2012

Profit / Loss Non-cash

454,050

(370,810)

283,377 155,700 11,558 (7,953) (41,068) 53,532 32,618 78,990 (117,492) (78,935) 3,416 19,120 (19,428) 53,093 (4,669) (18,337) 60,713 (17,674) (114,791)

546,646 163,421 227,233 (8,149) (154,266) 77,815 1,281 44,582 135,943 58,786 218,738 (227,362) (5,937) 7,268 287,828 (4,161) (35,525) (9,898) 30,166 176,359

619,935 (128,295) (25,888)

394,574 (21,682) (15,441)

465,752 (244,985) (74,387) (348,926) 157,778 16,759 3,791

357,451 (512,411) (187,738) (345,656) 2,063 16,782 2,138

(38,524) (3,205) (104,407) 127,520 (58,432)

(87,670) (3,574) (264,538) 255,897 (75,455)

Net Increase (Reduction) in Cash and Cash Equivalents

182,243

(242,630)

Opening Balance of Cash and Equivalents Closing Balance of Cash and Equivalents

260,252 442,495

442,495 199,865

Non-cash Amortization Gain and Loss of Fixed/Intangible Asset Write-Offs139 Equity Income (note 13) Update Financial assets - VNR Impairment bonds and Marketable Securities Provision for post-employment benefits Interest Exepenses and Monetary and Currency Variations Provisions Provision for Actuarial Liabilities Changes in Assets Indemnity asset of Concession Accounts Receivable Other Assets Scrow Deposits Suppliers Salaries and Social Charges Tax Payables Regulatory Charges Other Liabilities Actuarial Liabilities Cash paid Interest paid Tax and Social Contibution paid Cash Flow from Operating activities Cash Flow from Investm ents Activities Acquisition of Fixed and Intangible Assets Acquisition of Goods for Concession Capital Increase Interest Received Acquistion of Shareholders Participation Related Parties Dividends received

Net Cash Financing Activities Related Parties

Amortization of loans and financing Inflow of Loans Dividends apaid

44

4Q12 Results

Balance Sheet and Income Statement for Celesc Distribuição S. A.

CELESC DISTRIBUIÇÃO S.A. BALANCE SHEET Assets

In R$ thousands 12/31/2012

12/31/2011

Current Assets Cash and cash equivalents

127,357

369,430

16,343

15,062

Accounts Receivable

984,036

844,386

14,748

19,239

Accounts Payable - Suppliers Bank Loans and Financing Accrued Payroll Taxes and Social Contributions

Recoverable Income and Social Contribuition Taxes

88,841

58,228

Regulatory Charges

Others

25,762

38,554

Related Parties

1,257,087

1,344,899

Non-recurring Assets Accounts Receivable Deferred Taxes

410,377

81,064

235,162

114,777

118,920

77,640

100,745

122,685

174,071 18,113 115,908

47,123

83,255

1,286,463

1,256,551

Bank Loans and Financing

257,046

107,929

Deferred Taxes

113,483

66,002

Regulatory Charges

189,184

147,841

Others

Long-Term Liabilities 100,442

121,376

2,390,674

1,943,940

13,995

13,632

Escrow Deposits

520,268

408,099

Related Parties

130,734

140,305

Provision for Contingencies

Other Credits

697,676

130,960

Asset compensatorium - concession Intangible

12/31/2011

14,538

Obligation w ith Employees Benefits

Recoverable Taxes

12/31/2012

Current Liabilities

Marketable securities Inventories

Liabilities and Stockholders' Equity

2,023

1,430

363,953

523,590

3,522,089

3,152,372

Obligation w ith Employees Benefits Others

-

-

1,169,457

949,795

418,112

482,235

2,475

2,475

2,149,757

1,756,277

3,436,220

3,012,828

Stockholders' Equity Capital

Total Assets

4,779,176

4,497,271

1,053,590

1,053,590

Income Reserves

142,058

430,853

Adjustment for IFRS adoption

147,308

Total Liabilities and Stockholders' Equity

-

1,342,956

1,484,443

4,779,176

4,497,271

45

4Q12 Results CELESC DISTRIBUIÇÃO S.A. INCOME STATEMENTS Gross Operating Revenue Electricity Sales Electricity Supply Short Term Energy

In R$ thousand 4Q11

4Q12

1,660,020

1,877,989

1,352,342 26,879

1,567,389 29,000

Chg %

Chg %

2011

2012

13.1%

6,373,810

6,830,058

7.2%

15.9% 7.9%

5,405,716 117,604

5,809,063 111,606

7.5% -5.1%

-

150,586

-

150,586

-

Provision of Electricity Netw ork

84,567

91,996

8.8%

320,947

-

360,580

12.3%

Lease and Rentals

12,164

9,772

-19.7%

35,008

41,094

17.4%

Service Income

1,891

1,918

1.4%

8,495

7,068

-16.8%

Other Revenues

2,258

2,793

23.7%

8,197

12,004

46.4%

Financial Revenue

38,515

(98,451)

-355.6%

138,145

141,404

122,986

-13.0%

339,698

Deductions from Operating Revenue

(597,363)

(604,478)

1.2%

(2,342,189)

(2,481,440)

5.9%

Value-Added Tax (ICMS)

(314,009)

(331,403)

5.5%

(1,264,560)

(1,334,937)

5.6%

PIS / COFINS

(97,800)

(161,925)

65.6%

(511,362)

(604,547)

18.2%

Regulatory Charges (RGR)

(56,357)

(6,996)

-87.6%

(72,300)

(42,666)

-41.0% 12.1%

Construction Revenue

338,057

-100.0% -0.5%

Energy Development Account (CDE)

(46,343)

(51,970)

12.1%

(185,372)

(207,878)

Fuel Consumption Account (CCC)

(70,768)

(37,828)

-46.5%

(261,355)

(239,154)

-8.5%

Research and Development

(4,624)

(5,526)

19.5%

(18,010)

(20,025)

11.2%

Energetic Efficency

(4,624)

(5,477)

18.4%

(18,010)

(19,976)

10.9%

Other Expenses

(2,838)

(3,353)

18.1%

(11,220)

(12,257)

9.2%

Net Operating Revenue

1,062,657

1,273,511

19.8%

4,031,621

4,348,618

7.9%

Electricity Cost

(610,491)

(984,212)

61.2%

(2,320,692)

(3,127,146)

34.8%

Purchases of Electricity for Resale

(485,408)

(850,918)

75.3%

(1,837,490)

(2,581,153)

40.5%

Charges for Netw ork Use

(105,474)

(112,311)

6.5%

(405,122)

(447,532)

10.5%

(19,609)

(20,983)

7.0%

(78,080)

(98,461)

26.1%

Operating Expenses

(390,070)

(472,094)

21.0%

(1,311,909)

(1,622,143)

23.6%

Personnel

(126,343)

(172,763)

36.7%

(483,250)

(794,973)

64.5%

(39,013)

(19,787)

-49.3%

(78,990)

(58,741)

-25.6%

Alternative Energy Sources Incentive Program - PROINFA

Actuarial Expenses Materials

(8,426)

(6,086)

-27.8%

(29,595)

(22,695)

-23.3%

Third-Party Services

(49,976)

(50,400)

0.8%

(176,002)

(177,039)

0.6%

Depreciation & Amortization

(23,694)

(37,750)

59.3%

(143,032)

(152,038)

6.3%

Provision for doubtful accounts

(14,651)

(65,262)

345.5%

(53,724)

(102,999)

2,867

1,927

-32.8%

25,278

Reversal of provision for doubtfull accounts Other Provisions

7,661

91.7% -69.7%

(11,934)

(5,828)

-51.2%

(40,633)

(53,271)

31.1%

Reversal of other provisions

15,808

15,308

-3.2%

30,761

117,392

281.6%

Regulatory Charges

(2,668)

(2,789)

4.5%

(9,743)

(10,872)

11.6%

9,364

(5,678)

-160.6%

(13,281)

(36,511)

174.9%

Other Expenses Construction cost Operating Incom e (Loss) before Financial Incom e Operating Margin (%) EBITDA (R$ thousands) EBITDA Margin (%) Net Financial Incom e

(141,404)

(122,986)

-13.0%

(339,698)

(338,057)

-0.5%

62,096

(182,795)

-394.4%

399,020

(400,671)

-200.4%

5.8% 85,790 8.1%

-14.4%

0.0%

(145,045)

-269.1%

-11.4%

0.0%

9.9% 542,052 13.4%

-9.2%

0.0%

(248,633)

-145.9%

-5.7%

0.0%

5,261

167,855

3090.6%

3,531

200,326

5574.0%

Financial Revenues

27,431

182,710

566.1%

113,138

269,170

137.9%

Financial Expenses

(22,170) -

(14,855) -

-33.0% 0.0%

(109,607) -

(68,844) -

-37.2% 0.0%

Incom e before Incom e Tax and Social Contribution

67,357

(14,940)

-122.2%

402,551

(200,345)

Provision for Income Tax

13,512

-

-100.0%

(107,019)

Deferred Tax

(10,055)

10,340

-202.8%

Net Incom e

70,814

(4,599)

-106.5%

(8,123) 287,409

-149.8%

-

-100.0%

64,686

-896.4%

(135,659)

-147.2%

Annual Return on Equity

3.3%

-0.3%

13.2%

-7.7%

Net Margin (%)

6.7%

-0.4%

7.1%

-3.1%

46

4Q12 Results

Balance Sheet and Income Statement for Celesc Geração S.A.

CELESC GERAÇÃO S.A. BALANCE SHEET Assets

In R$ thousands 12/31/2012

12/31/2011

Current Assets

12/31/2012

12/31/2011

4,196

3,998

Current Liabilities

Cash and cash equivalents

7,514

21,444

Accounts Receivable

6,500

5,641

11

68

Inventories Recoverable Income and Social Contribuition Taxes

Liabilities and Stockholders' Equity

417

Others

-

Accounts Payable - Suppliers Salary and Social Charges Taxes and Social Contributions Regulatory Charges

80

78

14,522

27,231

Related Parties

206

186 1,352

6

2,974

15,809

16,566

70,510

72,389

Long-Term Liabilities

Accounts Receivable Deferred Taxes

65

Investment in controlled companies Property, Plant and Equipment

65

42,106

-

80

-

Escrow Deposits Intangible

20,203

12,437

-

3,786

257,951

351,781

320,405

368,069

Deferred Taxes Provision for Contingencies

Income Reserves Adjustment for IFRS adoption

334,927

395,300

643

-

71,153

72,389

86,962

88,955

112,000

100,000

Stockholders' Equity Capital

Total Assets

7,939

1,304

Others

Non-recurring Assets

117

10,097

Total Liabilities and Stockholders' Equity

(907) 136,872

65,826 140,519

-

-

247965

306345

334,927

395,300

47

4Q12 Results CELESC DISTRIBUIÇÃO S.A. INCOME STATEMENTS

In R$ thousands 4Q11

Gross Operating Revenue

4Q12

Chg %

2011

2012

Chg %

14,593

23,411

60.4%

58,224

83,608

43.6%

Electricity Sales

7,096

12,191

71.8%

27,828

43,359

55.8%

Electricity Supply

7,256

11,912

33.9%

Short Term Energy

241

64.2%

27,927

37,399

(691)

-

2,469

2,850

-

Deductions from Operating Revenue

(1,627)

(4,726)

190.4%

(6,414)

(15,115)

Value-Added Tax (ICMS)

(1,042)

(2,492)

139.2%

(4,087)

(7,404)

81.1%

(513)

(2,158)

320.9%

(2,036)

(7,405)

263.8%

PIS / COFINS Regulatory Charges (RGR) Net Operating Revenue Electricity Cost Purchases of Electricity for Resale Charges for Netw ork Use

(73) 12,966 -

(75) 18,685 -

3.8%

(291)

135.6%

(306)

44.1% 0.0%

51,810 -

68,493 -

5.0% 32.2% 0.0%

(759)

(4,560)

500.7%

(2,942)

(11,290)

283.8%

(57)

(4,078)

7090.8%

(113)

(9,159)

7980.5%

(702)

(481)

-31.5%

(2,828)

(2,131)

-24.7%

Operating Expenses

(6,705)

(131,916)

1867.3%

(29,510)

(159,936)

442.0%

Personnel

(3,404)

(3,500)

2.8%

(12,743)

(13,072)

2.6%

(80)

(272)

240.4%

(639)

(526)

-17.6%

Third-Party Services

(802)

(1,132)

41.1%

(4,053)

(4,416)

8.9%

Depreciation & Amortization

(822)

(1,195)

45.4%

(6,859)

(6,256)

-8.8%

Provision for doubtful accounts (Net)

(935)

(584)

-37.5%

(2,673)

(2,342)

-12.4%

Materials

Other Provisions (Net)

-

144

-

-

(643)

Financial compensation for use of Hidric Resources

(205)

(234)

14.0%

(1,181)

(1,064)

-9.8%

Others

(458)

(124,894)

27183.9%

(1,210)

(131,537)

10769.9%

Equity Income (R$ thousand)

-

(249)

-

(117,790)

-2241.0%

(153)

(79)

-48.7% -630.7%

5,502

Operating Margin (%)

42.4%

-630.4%

0.0%

37.4%

-150.0%

0.0%

EBITDA (R$ thousands) EBITDA Margin (%) Net Financial Incom e Financial Revenues Financial Expenses

6,323 48.8% 180 741 (561)

(116,595) -624.0% 1,156 1,191 (35)

-1943.9% 0.0% 542.0% 60.7% -93.7%

26,217 50.6% 1,528 2,228 (700)

(96,477) -140.9% 689 2,581 (1,892)

-468.0% 0.0% -54.9% 15.8% 170.3%

Incom e before Incom e Tax and Social Contribution

5,682

(116,635)

-2152.8%

20,886

(102,044)

-588.6%

Tax and Social Contibution

Deferred Tax and Social Contributuion Net Incom e Annual Return on Equity

(2,096) 166 3,752 0.2%

(5,041)

(8,956)

(12,321)

42,576

25494.3%

1,874

43,985

2247.0%

(79,100)

-2208.4%

13,804

(70,379)

-609.8%

-4.5%

140.5%

19,358

(102,733)

Operating Incom e (Loss) before Financial Incom e

0.6%

37.6%

-4.0%

48