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Rio de Janeiro,March27,2015 - Eletrobras (Centrais Elétricas Brasileiras S.A.) (BM&FBOVESPA: ELET3 and ELET6 – NYSE: EBR and EBR-B – LATIBEX: XELTO and XELTB), the largest company in the electricity sector in Latin America, parent company of 13 subsidiaries, operating in the generation, transmission and distribution segments, a participation company named Eletropar, and a 50% interest in the social capital of Itaipu Binational Company, announces its results for the period.

Throughout 2014 Eletrobras showed an overall net loss in the amount of R$ 3,031 million as compared to a net loss in the amount of R$ 6,187 million registered in 2013.

The results of the 2014 were crucially influenced mainly due to the new generation and transmission tariffs regarding the assets whose concessions were renewed as per Law 12,783/13 and by certain facts that we hereby highlight:

In a positive way: i) Within the Generation segment, the revenue from supply of electricity increased by 50.9%;(ii) The Personnel expenses decreased by 16.8% (15.7% considering the personnel expenses from CELG, which only affects the costs of 2014) ;(iii)Reversal of provisions related to  Onerous Contracts in the amount of R$ 1,800 million, regarding mainly the reversal of contracts from Jirau (R$ 712 million) and Itaparica (R$ 863 million);(vi)Reversal of provisions related to financial asset in the amount of R$ 792 million from the investments that had renewed concessions, see item I.31; (v) Positive effect regarding the recognition of revenue related to the Variation Compensation Account of items  of the "Amount A" – CVA in the amount of R$ 740 million; (vi) Reversal of provisions for losses on investments in the amount of R$ 314 million ( referring, mainly, on  CEMAT shareholdings).

In a negative way: i) Electric Energy Purchased for future Resale in the amount of R$ 9,913 million, representing an increase of 79.7% (considering CELG D the amount would be R$ 10,425 million and a variation of 89.0%); ii)Expenses regarding provision for compulsory loans of R$ 3,292 million; (iii) Write off on tributary credit tax in the net amount of R $ 1,701 million; and (iv) Negative results accrued from its equity interests in other companies in the amount of R$ 1,217 million, due mainly to the negative results registered in the SPE Madeira Energia S.A.

 

In the fourth quarter of 2014 (4Q14), Eletrobras presented a net loss of R$ 1,174 million, whilst that in the 3Q14 it had shown net loss of R$ 2,738 million and in the fourth quarter of 2013 (4Q13) a net loss of R$ 5,400 million. The result of the 4T14 was influenced by some variables, which we highlight:

-In a positive way: i) In Generation, revenues from sales in the spot market (CCEE) grew 120.0%, and in the distribution, the Supply Revenue increased 189.2% influenced mainly by the consolidation of CELG-D and by the positive effect of the CVA; (ii) Write off on reversal of provision for loss on the financial asset in the amount of R$ 1,199 million; (iii) Reversal of provisions related to  Onerous Contracts of R$ 567 million, see item I.4; and (iv) Reversal of  impairment of R$ 317 million due mainly to the review by ANEEL regarding to the assets that composes the Remuneration Asset Base (RAB) of the distribution companies (R$ 361 million).

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HIGHLIGHTS OF THE CONSOLIDATED RESULTS OF 2014:

 

·         Net Operational Income – NOI in the amount of R$ 30,245 million in 2014 against R$ 23,836 million in 2013;

·         Personnel, Material and Services (PMS) costs in the amount of R$ 5,532 million in 2014 against R$ 6,650 million in 2013 (total expense of R$ 5,609 million in 2014 considering CELG D);

·         Net operating provisions in the amount of R$ 1,862 million in 2014, compared to an amount of R$ 3,258 million in 2013;

·         Write off on tributary and fiscal credit in the net amount of R$ 1,701 million in 2014;

·         Net income due to foreign currency exchange rate variations with a positive result in the amount of R$ 296 million in 2014 and R$ 539 million in 2013;

·          The EBITDA of the Eletrobras Subsidiary Companies summed a total of R$ 3,688 million in 2014 compared to EBITDA summed of R$ 90 million in 2013.

HIGHLIGHTS OF THE CONSOLIDATED RESULTS OF 4Q14:

 

·         Net Operational Income – NOI in the amount of R$ 8,522 million in 4Q14 against R$ 6,589 million in 4Q13, see item I.1.2;

·         Personnel, Material and Services (PMS) costs in the amount of R$ 2,388 million in 4Q14 (R$ 2,594 million considering CELG D expenses) against R$ 2,056 million in 3Q14;

·         Reversal of operating provisions of R$ 107 million in 4Q14, compared to a provision of R$ 1,253 million in 3Q14 (see item I.4);

·         Net income due to foreign currency exchange rate variations with a positive result in the amount of R$ 169 million in 4Q14 and R$ 349 million in 3Q14;

·          The EBITDA of the Eletrobras Subsidiary Companies summed a total of R$ 1,753 million in 4Q14 compared to EBITDA summed of R$ 90 million in 3Q14.

 

The analysis of the items in the Income Statement of each company of Eletrobras System is presented in the Attachment of this Marketletter, after the Financial Statement for each company

 

 

 

 

 

1.    During the General Shareholders Meeting, held on September26^th, 2014 the shareholders approved the acquisition  of the majority of CELG Distribuição S.A. – CELG-D shares. Since then the new company appears in the consolidated financial statements of Eletrobras, because for accountability reasons, the date of effective business indenture coincides with date of the 3Q14 Marketletter.However, the a transfer of ownership of common shares took place in January 2015.

 

2.    To improve its Financial Report the Company reclassified the Statement of Income for the September 2013 period, highlighting its direct operating costs in the chart, therefore showing a gross profit line.

 

3.    On December 31^st2014 Madeira Energia S.A. (MESA), of which Furnas detains a 39% equity interest, showed an excess of liabilities towards its current assets in the amount of R$ 482 million. In order to equalize the situation of its negative current capital, the invested company expects its partners to increase their capital interests in the partnership.A portion of this amount refers to the recognition of the provision for losses incurred in the refundable expenses towards the Consórcio Contrutor Santo Antonio (CCSA).Such receivable was issued on the occasion under which the 2^nd Additive to the Concession Contract signed with ANEEL, based on a chronogram in which the date of the beginning of Commercial Operation of the power generating units by CCSA  was expected to be anticipated for the second time, therefore the parties signed their commitment to the “Terms and Conditions” of the Santo Antonio Hydroelectric Power Plant Development Contract. However aforesaid chronogram was not fully complied, causing the net results of the balance to accrue an amount due to MESA as reimbursement from CCSA.

In order to calculate the amount pertaining this reimbursable expense, CCSA requested the application of Clause 31.1.2.1.1 of the Building Contract, which foresees a contractual limit amount of R$ 122,00/MWh for transfers related to the costs incurred by unforseen energy purchases. Under the circumstances MESA’s staff, at the period ended on December 31^st2014, additional studies, including those pertaining legal aspects, and decided to change its estimates regarding the amount pertaining the asset value. Therefore, within the full value of reimbursable expenses in the amount of R$ 1,435 million, a provision for losses was settled in the amount of R$ 679million, in order to reflect the expected receipt of an amount of R$ 756 million.MESA and CCSA are coming to an understanding with regards to make an agreement pertaining the terms and conditions to settle the matter.

The Board of directors of Furnas at the meeting No. 002/452, recommended Furnas to take the necessary arrangements in the appropriate governance spheres, to preserve the SAESA credits against CCSA, to review the loss in the SPE and, their reflections in Furnas, due to its shareholding in the SPE.

 

 

I. ANALYSIS OF THE CONSOLIDATED RESULTS (R$ million)

 

*Restated

 

 

I.1       FINANCIAL HIGHLIGHTS

 

Main Variations in Results (2014 x 2013)

 

The result of 2014 showed a 51.0% variation when compared to the 2013, whereas a net loss in the amount of R$ 3,031 million was registered in 2014 as compared to a net loss in the amount of R$ 6,187 million in 2013.

Net Operating Income, in the amount of R$ 30,245 million, detailed in Chart I.1.2registered in 2014 a 26.9% increase as compared to 2013, when it was registered an amount of R$ 23,836 million.

»     Generation income registered a 23.3% increase, from R$ 17,240 million in 2013 to R$ 21,256 million in 2014. Such increase was mainly due to electricity sales within the Short Term Market (CCEE) from R$ 2,396 million in 2013 to R$ 3,317 million in 2014. The total energy sold went from260.2TWh in 2013 to 243.5TWh in 2014. Transfers from Itaipu went from a net revenue in the amount of R$ 68 million in 2013 to a net expense in the amount of R$ 98 million in 2014, mainly due to the calculation of monetary adjustments based on the American Commercial and Industrial Goods price, shown in item II.3. Construction revenue showed a decrease of R$ 67.4%, from R$ 737 million in 2013 to R$ 240 million in 2014,and was registered at its equivalent value as cost of construction.

 

»     Transmission income showed a 4.4% increase, from R$ 4,505 million in 2013 to R$ 4,702 million in 2014, influenced by the entry into operation of new projects and the consolidation effects. In 2014, the revenue from construction was R$ 1,786 million, representing a decrease of 0.6% compared to 2013 and was registered at its equivalent value as cost of construction.

»     Distribution income showed a 52.0% increase from R$ 5,433 million in 2013 to R$ 8,022 million in 2014, influenced by the increase in the supply revenues. The supply of electricity registered a 67.2% increase from R$ 4,419 million in 2013 to R$ 7,349 million in 2014. Two other aspects greatly influenced the energy supply item in the distribution segment in 2014. The first refers to the impact related to the Variation Compensation Account "Part A" - CVA. The second concerns the incremental revenue arising from the consolidation CELG D from the 4th quarter of 2014 in the amount of R$ 1,627 million. Excluding the revenue arising from the CVA and the revenue for the CELG D, the supply revenues grew by 7.7%. For more information about the recognition of the CVA and the CELG D consolidation operation, see 03 and 42 of the Financial Statements of Eletrobras 2014 respectively.The volume of electricity sold went from 16.1TWh in 2013 to 17.1TWh in 2014. Construction revenue was registered at its equivalent value as cost of construction presenting a 13.8% decrease, from R$ 1,014 million in 2013 to R$ 873 million in 2014 and was registered at its equivalent value as cost of construction.

-Electricity purchased for future resale registered a 79.7% increase, from R$ 5,515 million in 2013 to R$ 9,913 million in 2014.  This result was mainly due to the purchase of energy within the short term market as result of the Generating Scale factor – GSF¹ during the period, which was partially compensated by the decrease of energy purchased by Amazonas Energia. Including the expenditures of CELG D with purchased of energy, this increase would be 89.0% and the amount of R$ 10,425 million in 2014.

 

-The Fuel for the Production of Electricity line registered a 0.9% decrease. Throughout 2013 it registered a net expense in the amount of R$ 1,492 million, whilst in 2014 it registered a net expense in the amount of R$ 1,480 million due to a reduction of volume of thermal electricity dispatched.

 

-Throughout 2014 the full amount of the Personnel, Material and Service (PMS) line showed a 10.4% decrease from R$ 9,245million in 2013 to R$ 8,279 million in 2014 ( 8.2% including CELG D expenses, only over 2014).  Personnel decreased by 16.8%from R$ 6,650 million in 2013 to R$ 5,532 million, mainly due to the Early Retirement Plan realized in 2013. The Material increased by 3.8% and Third party services also increased by 6.1% (the PMS items presented, respectively, a decrease of 15.7%, an increase of 5.0%  and 11.6% considering CELG D expenses).

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-Operating provisions registered an expense R$ 1,862 million in 2014 as compared to an expense R$ 3,258 million in 2013, influenced mainly by provisions for contingencies in the amount of R$ 3,656 million, of which R$ 2,235 million refer to Compulsory Loan; by the impairment of R$ 149 million and also by the provision for adjustment at market value related to the share interest in CESP in the amount of R$ 111 million in 2014, see item I.4. By the consolidation of CELG D the operating provisions of Eletrobras have been impacted in the amount of R$ 113 million in 2014. The results of the provision were partially compensated by the reversion of the Onerous Contracts in the amount of R$ 1,800 million, see item I.4 and by the provision for financial asset loss in the amount of R$ 792 million (related to reinvestments made in concessions renewed under Law 12.783/2013);provision for losses on investments in the amount of R$ 314 million and reversal of provision to cover doubtful credits in the amount of R$ 269 million regarding, mainly,Cemat and Celtins.

 

-Shareholdings line registered a 784.5% decrease, from a net income in the amount of R$ 178 million in 2013 to a net expense in the amount of R$ 1,217 million in 2014. The variation was due mainly to amounts related to equity investments in affiliated companies and also by the negative results obtained by SPE Madeira Energia S.A (Santo Antonio Hydroelectric Power Plant).

 

-Net Financial Result line registered a net income of R$ 377 million in 2013 as compared to a net income of R$ 695million in 2014, which represents a84.7%positive variation. Highlighting the effects related to a derivative operation related to a Energy sale Contract between Eletronorte and certain Aluminum Companies with a positive effect in the amount of R$ 383 million in the 2014 and a negative effect of R$ 239 million in 2013.

 

Main Variations of Financial Statements (4Q14 x 3Q14)

 

The results of 4Q14registereda 57.1% decrease as compared to 3Q14 recording a net loss of R$ 1,174million in the 4Q14, as compared to a net loss of R$ 2,738 million in 3Q14.

The Net operating income in the amount of R$ 8,522 million, presented, in 4Q14, a 29.3%increase as compared to 3Q14, when was registered the amount of R$ 6,589 million (considering CELG , the amount would have shown an amount of R$ 9,781 million in the 4Q14, representing an increase of 48.4% as compared to the 3Q14).Without considering the income due to the sale of electricity in the spot market (CCEE),  the income on construction, the CVA impact and income from CELG D,  the Net Operating Income would have shown a 7.7% increase, from R$ 5,589 million in 3Q14 million to R$ 6,021 million in 4Q14. In a segmented analysis, we highlight the following aspects:

 

»     The income from Generation showed a 9.9% increase, from R$ 4,894million in 3Q14 to R$ 5,379million in 4Q14. Such increase was due mainly to an increase of electricity sold within the Short Term Electricity Market (CCEE). The volume of energy sold by the Eletrobras Companieswas53TWh in the 3Q14 to 60TWh in the 4Q14. The Construction revenue increased and was registered at its equivalent value as cost of construction.

»     The income from the Transmission Segment registered a 47.9% increase,from R$ 1,031million in 3Q14 to R$ 1,526million in 4Q14, influenced mainly by the increase of the Construction Revenues Line, which was registered at its equivalent value as Cost of Construction, and also by an increase on income from the rate of return adjustment.

»     The income from Distribution Segment registered a 58.8% increase, from R$ 1,499 million in 3Q14 to R$ 2,381 million in 4Q14 (considering the income from CELG D, the total income from the distribution segment would be R$ 4,112 million in the 4Q14 with a variation of 174.3%). The energy supply showed a 64.1% increase from R$ 1,306 million in 3Q14 to R$ 2,143 million in 4Q14 due mainly to the larger volume of energy sold and the CVA effect (considering the income from CELG D, the total income from the distribution segment would be R$ 3,777 million in the 4Q14 with a variation of 189.2%). The amount of energy sold went from 4.3TWh in the 3Q14 to 4.6TWh in the 4Q14. The Construction revenue was registered at its equivalent value as Cost of Construction.

-The Electricity purchased for resale decreased by 1.4%, from R$ 3,315 million in 3Q14 to R$ 3,093 million in 4Q14 (including CELG D, the amount is R$ 3,605 million in the 4Q14 and a variation of 51.0%).

 

-The fuel for electricity production account registered a 32.4% decrease. In 3Q14, there was a net expense of R$ 332 million, while in 4Q14 it was recorded a net expense of R$ 440 million due to a decrease in the CCC reimbursement in accordance with Law 12,111/99 in CGTT and Amazonas Energia.

 

-In 4Q14, the Personnel, Material and Service (PMS) line increased by16.1%, from R$ 2,056 million in 3Q14 toR$ 2,388 million in 4Q14 (including CELG D, the amount would be R$ 2,594 million and a variation of 26.15).Excluding CELG D expenses which affected only the 4Q14, the Personnel line item increased 15.1%, from R$ 1,358 million in 2013 to R$ 1,563 million in 2014, due to larger number of employees who left in this period due to the Early Retirement Program at Eletronuclear, which increased the amount of the indemnities.  The Services line increased by 23.0% from R$ 611 million in 3Q14 to R$ 752 million in 4Q14 and the Materials line decreased by 17.6% from R$ 88 million in 3Q14 to R$ 72 million in 4Q14 (the personnel, material and services presented, respectively, increase of 20.8%, decrease of 13.6% and 43.7% considering the CELG D expenses), see item I.7.

 

-The Operating provisions went from a provision of R$ 1,253 million in 3Q14 to a provision in the amount of R$ 919 million in 4Q14 (including CELG D, the reversal of provision would be R$ 1,033 million in the 4Q14). The operating provision were influenced, mainly due to the provision for contingencies in the amount of R$ 2,036 million, by the provision for losses on fixed assets in the amount of R$ 235 million and by the provision for losses on investments in the amount of R$ 129 million (see item I.4). The provisions were partially compensated by the provision for losses on financial assets in the amount of R$ 1,199 million, the reversal of the Onerous Contracts in the amount of R$ 567 million, by the reversal of impairment in the amount of R$ 317million due to the ANEEL review regarding the assets that compose the Regulatory Asset Base (RAB) of the distribution companies.

 

 

-The shareholdings registered a 29.6% variation resulting from the negative amount of R$ 556 million in 4Q14 as compared to the negative amount of R$ 790 million in 3Q14. This variation was caused mainly due to the negative results registered by SPE Madeira Energia S.A. (Santo Antonio Hydroelectric Power Plant) in the 3Q14 which was the largest effect in the amount of the equity investments in associated companies.

                                       

-The net financial result went from a net income of R$ 46 million, in the 3Q14 to a net income of R$ 783 million in 4Q14, representing a 1,585.8%increase (including CELG D the financial result would be R$ 655 million with an increase of 1,310.3% in 4Q14 compared to the 3Q14). This variation is, mainly, due the increase on financial interest income and by the effects related to a derivative operation related to a Energy sale Contract between Eletronorte and certain Aluminum Companies in the amount of R$ 108 million.

 

 

 

 

 

 

 

 

 

 

I.2 Net Operating Income (NOI)

 

Throughout 2014 the Net Operating Income (NOI) registered a 21.6% increase as compared to 2013, from R$ 23,836 million in 2013 to R$ 28,986 million in 2014. Considering the income from CELG D, NOI had an increase of 26.9% as compared to 2013, from R$ 23,836 million in 2013 to R$ 30,245 million in 2014.

With regards to the 4Q14, the Net Operating Income registered a 29.3%increase as compared to the previous quarter from an amount of R$ 6,589 million to R$ 8,522 million in this 4Q14. In comparison with the 4Q13, the Net Operating Income registered an amount of R$ 5,953 million, therefore a 43.1% growth.Considering the income from CELG D, NOI had an increase of 48.4% as compared to the previous quarter, from R$ 6,589 million to R$ 9,780 million in 4Q14. Considering the 3Q13, the NOI presented an amount of R$ 5,953 million and a 64.3% increase.

 

 

Participation of business in relation to Gross Revenues –2014

 

 

I.2. ENERGY SOLD

 

I.2.1EnergySold in2014 -Generation Companies – TWh

 

In terms of the energy market evolution, the Eletrobras companiesduring 2014, sold 243,5TWh of energy, as compared to260.2 TWh traded in the 2013, representing a 6.4% decrease.

 

 

I.2.2 ENERGY SOLD IN 2014 – DISTRIBUTION COMPANIES – TWH

 

In terms of the energy market evolution, the  Eletrobras Distribution System, during2014, sold 17.1TWh of energy, as compared to 16.1 TWh traded in 2013, representing a 6.3% increase.

 

 

*considers only the regulated market

 

 

I.3OPERATING PROVISIONS

 

 

Provisions for legal liabilities linked to legal proceedings

 

 

 

 

 

I.4  ONEROUS CONTRACTS

 

 

The table considers an increase in the amount of R$ 50 million pertaining the onerous contract of the Amazonas Energia intangibles that does not show in the company results.

 

I.5 CONSOLIDATED EBITDA

 

 

* Onerous contracts + impairment +provision for contingencies + Provision for losses of financial assets + Provision for losses on fixed assets + PCLD + PID

 

I.5.EBITDA of Subsidiaries Companies

 

Throughout the 4Q14 the sum of the EBITDA of the Eletrobras Subsidiary Companies registered a positive amount ofR$ 1,753 million which represents a 261%increase, as compared to the negative EBITDA of R$ 1,088 million registered in the 3Q14. Throughout the 2014 the EBITDA of the Eletrobras Subsidiary Companies summed a total of R$ 3,688 million which represents a 4,198% increase as compared to the negative EBITDA of R$ 90 million in2013.

 

 

 

EBITDA = Net income plus income taxes over profits minus net financial expenses Financial income and depreciation, amortization and depletion, as determined by CVM Instruction 527/12.

p.p = percentage points

* Source: Financial statements for consolidation

 

I.6 NET DEBT

¹ This value corresponds to the amount reimbursed to Eletrobras due to the acquisition and commercialization of all energy resources belong to Brazil, generated by Itaipu Binational, under the Treat signed on 26 April 1973 between Brazil and Paraguay. Excluding this value, net debt at December 31, 2014 would have shown R$ 17.8 billion and net leverage on the same date, would be 31.3%.

 

I.7. PERSONNEL, MATERIAL AND SERVICE

 

 

 

II.Analysis of the Results of the Parent Company -

 

EVOLUTION OF THE RESULTS - R$ MILLION

 

 

II.1.Eletrobras Shareholdings

 

 

Throughout the 2014 the result regarding shareholdings had a negative impact  in Eletrobras overall results in the amount of R$ 49 million, which represents a93.7% variation as compared to the negative amount of R$ 788 million registered in 2013, due mainly to the equity equivalence of the subsidiary companies.

 

 

The recognition of the results obtained by the companies invested by Eletrobras made a negative impact on the 4Q14 results in the amount of R$ 945 million due to the valuation of shareholding investments. This figure represented a22.8% variation when compared to the negative amount of R$ 1,225 million for the 3Q14, mainly due to the result of the equity equivalence of the subsidiaries companies, as shown below:

 

 The analysis of the results of our Subsidiary Companies is in the attachment hereof.

 

II.2.FINANCIAL RESULTS

 

Along the 2014, Financial Results positively impacted the overall results of the Parent Company in the amount of R$ 2,437 million, as compared to the amount of R$ 2,118 million of 2013. This variation is primarily explained by the variation on interest income, commissions and fees and income from financial investments.

Throughout the 4Q14, Financial Results positively impacted the overall results of the Parent Company in the amount of R$ 663 million, as compared to the amount of R$ 462 million in 3Q14. This variation is explained mainly by the variation on interest income, commissions and fees and income from financial investments, as shown in table below:

 

 

The main indexes of the loans and transfer agreements showed the following variations in the period:

 

 

Evolution of the IGP-M Index and the Dollar (%)

 

 

 

II.3.  Sale of electricity of Parent Company

 

a.    ItaipuBinational

 

 

 

 

 

a.1 Financial Asset Itaipu Binacional

 

The balance resulting from the adjustment factor from ItaipuBinational, shown on Financial Asset at the Non-Current Assets amounted to R$ 5,469million on December 31st, 2014, equivalent to US$ 2,059million (December 31^st, 2013– R$ 4,977million, equivalent to US$ 2,125million), of which R$ 1,673million, equivalent to US$630 million shall be transferred to the National Treasury until year 2023 represented by reimbursement obligations, as a result of a credit transaction which took place between the Company and the National Treasury in 1999.Such amounts will be realized through its inclusion in the sales tariff to be practiced until 2023.

 

Commercialization of Eletric Energy– PROINFA

 

Trading electricity within the PROINFA registered a positive net result in the period ended by 2014 in the amount of R$ 72 million (December 31, 2013positive by R$ 43 million), producing no effect on net income of the company.  This value is included under the Reimbursement Obligations. The balance of resellers consumers line registered the amount R$ 573 million ofPROINFA related to the Parent Company (December 31^st, 2013– R$ 661million).

III.Eletrobras Information

Portfolio Of Loans Receivable And Payable

a.      Financing and Loans Granted

Financing and loans granted, with foreign currency exchange rate variation clauses, represent approximately 38% of the total portfolio of the Company (43% on December 31^st, 2013). The remainderthat predict adjustment based on indexes that represent the level of domestic prices in Brazil reach 62% of the portfolio balance (57% onDecember 31^st, 2013).

The market value of these assets are equivalent to their accounting value, since they are industry specific operations and formed, in part, by resources from Sector Funds that don’t have comparable parameters with other loans.

During the year 2014, the existing financing and loans in the subsidiary CGTEE company were taken, if at all, by the Eletrobras, and were made to enable the construction of Candiota III (Phase C) and also to enable energy purchases the Company required in recent years. These features have resulted in a change in the balance of R$ 480 million.

As established in the RES-639/2014, the amount passed on to ELETROSUL in the form of loans/financing are intended to: 1) debtor balance pay out from loans obtained with ordinary resources of Eletrobras; 2) discharge of the dividend balance payable (economic pay out) and 3) implementation of the Investment Plan of 2014.

 

The funds granted to FURNAS in the form of loans are designed to the company's cash needs in order to honor its commitments with the Investment Plan of 2014.

As for the financing granted to Amazonas Energia had finally: 1) part of the debt payment by the BR Distribuidora (R$ 400 million); 2) refinancing of loans obtained with ordinary resources of Eletrobras and pay out the RGR debt service (economic pay out - R$ 405 million), and pay out of the debtor balance (R$ 324 million). It also added several loans for the company's cash deficiency coverage.

The long-term portion of loans and financing granted from regular and Sector Funds, including transfers based on the contractual expected cash flows shall mature in variable amounts as shown below:

 

b.   Financing and Loans  Payable

Debts are guaranteed by the Federal Government and/or by Eletrobras and subject to charges, which averaged along 2014 at 7.56% per annum (5.91% per annum in 2013) with the following debt profile:

 

 

 

 

The long-term loans and financing expressed in millions of Reais, shall mature as follows:

 

RATINGS

 

 

ORGANIZATION CHART OF ELETROBRAS

 

  

 

 

 

 

INVESTIMENTS

R$ Million

 

SOCIAL CAPITAL

Capital Structure

 

As of December31st, 2014 the social capital of Eletrobras had the following composition: