Light : 2015-06-17T17:55:41 1Q15 Earnings Release

Rio de Janeiro, May 8, 2015.

Non-Technical Losses fall by 1.0 p.p., reaching 39.88%

Consolidated EBITDA grows 9.2%

Consolidated

ü Consolidated net revenue, excluding construction revenue, totaled R$2,972.7 million in 1Q15, 40.3% up on 1Q14, primarily due to the tariff recognition of costs with energy purchases, which were deducted from non-manageable expenses through transfers from Regulated Contracting Environment Account (ACR Account) in 1Q14.

ü Consolidated EBITDA[1]came to R$494.4 million in 1Q15, 9.2% and 13.7% more than reported EBITDA and adjusted EBITDA in 1Q14, respectively, primarily due to the 17.8% and 129.7% increases in the distribution segment and the in the commercialization and service segment, respectively.

ü Net income came to R$128.5 million in 1Q15, 28.8% down on 1Q14, chiefly due to the worsening of 125.9% in the financial result, due to the increase in the basic interest rate.

ü The Company closed March 2015 with net debt of R$6,298.8 million,3.7% up on December 2014. Leverage, measured by the net debt/EBITDA ratio stood at 3.74x, for the purpose of the covenants.

Distribution

ü Total energy consumption grew by 0.6%over 1Q14to 7,422 GWh, due to the increases of 2.0% and 3.7% in the residential and commercial segments, respectively, partially offset by the 5.3% reduction in the industrial segment.

ü Non-technical energy losses in the last 12 months, calculated as a percentage of billed energy in the low-voltage market (ANEEL criterion), posted a reduction of 1.0 p.p.over 4Q14, closing March 2015 at 39.88%.

ü The operational quality indicators DEC (equivalent length of interruption indicator) and FEC (equivalent frequency of interruption indicator) came to13.20 hours and 6.70 times, respectively, respective improvements of 15.1% and 11.8% over the same period last year.

ü Collectionstotaled 90.0%of total billed consumption in 1Q15, 4.6 p.p. down on 1Q14, explained by the mathematical effect due to the tariff increase. Provisions for past due accounts (PCLD)represented 1.2% of the distributor's gross billed energy in1Q15.

ü Net revenue, excluding construction revenue, came to R$2,698.8 million in 1Q15, 54.5% up on 1Q14, primarily due to the tariff recognition of costs with energy purchases, which were deducted from non-manageable expenses through transfers from the ACR Account in 1Q14.

ü EBITDA1amounted to R$300.2 million in 1Q15, 17.8% and 26.9% more than reported EBITDA and adjusted EBITDA in 1Q14, respectively, chiefly due to reversals of civil and tax lawsuits totaling R$40 million.

ü Net income totaled R$38.1 million, 48.4% down on 1Q14, essentially due to the worsening of 150.9% in the financial result.

ü The distribution company closed March with net debt of R$5,383.1 million, 4.3% up on December 2014.

Generation

ü Total sales, net of energy purchases, came to 1,302.6 GWh in 1Q15, 2.9% up from 1Q14.

ü Net revenuetotaled R$187.2 million, 11.4% down on 1Q14, chiefly due to the reduction in spot market energy prices as a result of the revision of its maximum limit.

ü EBITDA1amounted to R$162.2 million in 1Q15, 11.3% down on the same period last year.

ü Net income stood atR$71.1 million in 1Q15, 26.0% less than in 1Q14, chiefly due to the worsening of 59.2% in the financial result.

ü The generation company closed March 2015 with net debt of R$920.9 million, 1.8% more than in December 2014.

Commercialization and Services

ü Light Com and Light Esco's direct energy commercialization related to conventional and subsidized sources totaled 1,341.9 GWh, very close to the 1,338.0 GWh sold in the same period last year.

ü Net revenue came to R$229.4 million in 1Q15, 22.0% lower than in 1Q14.

ü EBITDA1stood at R$40.2 million in 1Q15, 129.7% up year-on-year.

ü Net incometotaled R$27.3 million in 1Q15, 117.9% more than in 1Q14.

Table of Contents

1. Light S.A.4

2.1 Distribution.5

Energy Losses.7

Collection.10

Operating Quality.12

2.2 Generation.12

2.3 Commercialization and Services.13

3. Financial Performance.14

3.1 Net Revenue.14

Consolidated.14

Distribution.15

Generation.16

Commercialization and Services.16

3.2 Costs and Expenses.17

Consolidated.17

Distribution.17

Generation.20

Commercialization and Services.20

3.3 EBITDA..21

Consolidated.21

Distribution.22

Generation.22

Commercialization and Services.22

3.4 Consolidated Financial Result23

3.5 Debt24

3.6 Net Income.26

3.7 Investments.27

Generation Capacity Expansion Projects.28

4. Cash Flow..31

6. Capital Markets.33

7. Recent Events.36

8. Disclosure Program..38

EXHIBIT I39

EXHIBITII40

EXHIBIT III41

EXHIBIT IV.42

EXHIBIT V.43

1. Light S.A.

Light S.A. is a holding company that controls subsidiaries and affiliated companies in three main business segments: energy distribution, generation and commercialization/services. In order to increase the transparency of its results and provide investors with a better basis for evaluation, Light also presents its results by business segment. The Company's corporate structure on March 31, 2015 is shown below:

2. Operating Performance

Total energy consumption in Light SESA's concession area (captive clients + transport of free clients) came to 7,422 GWh in 1Q15, 0.6% up on the same period in 2014, due to the 2.0% and 3.7% increases in the residential and commercial segments, while industrial consumption continues to fall. It is worth noting that this 0.6% increase is due to the particularly high basis of comparison from 1Q14, when consumption recorded growth of 7.8%.

In the residential segment, consumption reached 2,806 GWh in the quarter, 2.0% up from 1Q14 and accounting for 37.8% of the total market. In January 2015, daily temperatures were higher than in the same month last year, pushing up residential consumption due to the intense use of air conditioning. In February and March, however, there were no positive temperature impacts on residential consumption and the average temperature for the quarter was0.4ºC below 1Q14. Residential consumption averaged 240.8 kWh/month in 1Q15.

Commercial clients consumed 2,351 GWh in the quarter, representing 31.7% of the total, 3.7% up on 1Q14 and recording a year-on-year increase in each of the three months. The migration of clients from the captive to the free market accounted for 14 GWh in 1Q15.

Industrial consumption totaled 1,259 GWh in the quarter, equivalent to 17.0% of the total market and 5.3% down from the same period last year, due to the retraction of certain industries, including metallurgy, chemicals, rubber, plastics and non-metallic minerals.

The other consumption segments, which accounted for 13.6% of the total market, recorded a decrease of 1.8% in relation to the first quarter of 2014. The rural and public utility categories reported respective increases of 3.9% and 1.8%, while the government category posted a reduction of 6.1%.

Energy Balance

In the last 12 months, non-technical energy losses totaled 5,818 GWh, accounting for 39.88% of billed energy in the low-voltage market (ANEEL criterion), 1.0 p.p. less than in the 12 months ended December 2014. In comparison with the 12 months ended March 2014, when non-technical energy losses totaled 42.37% of the low-voltage market, there was a reduction of 2.5 p.p.

In the last 12 months, technical energy losses totaled 2,883 GWh, accounting for 7.6% of grid load, 0.1 p.p. less than in the 12 months ended December 2014. In comparison with the 12 months ended March 2014, there was a increase of 0.2 p.p., when technical losses totaled 7,4% of grid load.

Light SESA's total energy losses amounted to 8,701 GWh, or 23.0% of the grid load in the 12 months through March 2015.

In order to continue reducing non-technical energy losses, Light is investing in initiatives that include conventional fraud inspection procedures, the upgrading of network and measurement systems, and the Zero Loss Area program (APZ). These initiatives include:

· Consumer unit regularizations: The Company conducted 14,824 regularization procedures in the low, medium and high-voltage segments in the first quarter of 2015, 2.3% up on the 14,495 reported in the same period in 2014. Energy incorporation totaled 46.5 GWh in 1Q15, 37% up from the 33.9 GWh recorded in 1Q14. Recovered energy totaled 39.2 GWh in the period, 4.0% more than the 37.7 GWh posted in 1Q14.

· Installation of remote electronic metering devices: SMC (centralized metering system) devices are installed in areas with high loss rates, with or without the support of Pacifying Police Units (UPPs). The UPPs give Light more room for maneuver in regard to combating default or energy theft. In UPP areas, 5.4 GWh were incorporated, whereas in areas outside the sphere of the UPP, 12.7 GHw were incorporated. As a result, the Company closed March 2015 with 655 thousand installed electronic meters.

· In 2014, the Company signed a contract with Landy+Gyr Equipamentos de Medição Ltda. for the supply of approximately 1 million meters for the upcoming 5 years, for the total amount of R$ 750 million, to be used in the Smart Grid Project.

· Currently, the Project is in the implementation phase of the communication network, providing the installation of equipment in substations, and of radios in poles in various sites within the concession area. In addition, the implantation of the new information technology environment (development and adaptation of systems and hardware installation) is also taking place, which will be integrated to technical and commercial systems.

· Zero Loss Areas: In August 2012, the Company created the APZ Project, based on a combination of electronic metering and a shielded network, supported by dedicated teams of technicians and commercial relations personnel with clearly defined targets, whose compensation is tied to improving loss and default indicators in their respective areas. A typical APZ has around 17,000 clients. The project, known commercially as 'Light Legal', which receives support from SEBRAE in regard to the training of partnering micro-entrepreneurs, currently has 37 operational APZs and 661 thousand clients in the Baixada Fluminense region and the city's south, west and north sides.

In 1Q15, 2,713 electronic metering devices were installed in communities and APZs in place for more than 12 months, reaching an average 32.0 p.p. reduction in non-technical energy losses over the grid load and an average collection rate increase of 7.0 p.p. since the beginning of the project. The table below shows the accumulated results until March of the 26 APZs where the results have already been determined:

The results of APZ 'Nova Iguaçu 3' have already been determined, however it has been in operation for less than 12 months. This APZ has been showing an average reduction of 19.0 p.p in non-technical energy losses over the grid load, and an averageincrease of 3.0 p.p. in its collection rate, as shown in the table below:

Complementing the 27 areas where the results have already been determined, the table below shows the 10 APZs in the implementation phase, without recorded results, totaling 37 operating areas. The number of clients still with no results is approximately 155 thousand.

The 1Q15 collection rate stood at 90.0% of billed consumption, 4.6 p.p. lower than in the same period last year, primarily due to distortion of the indicator, due to division of collection in the quarter by the period billing revenue (mathematical effect), the latter being influenced by: (i) the beginning of tariff flags in January 2015; (ii) the adjustment in the tariff flags values in March 2015; and (iii) the extraordinary tariff revision, with an average increase of 22.48% in March 2015.

In 1Q15, provisions for past due accounts (PCLD) totaled R$24.2 million, representing 0.7% of gross billed energy[2], R$1.2 million less than the R$25.3 million provisioned in 1Q14. In the 12 months ended March 2015, PCLD accounted for 1.2% of gross billed energy, a decrease of 0.5 p.p. compared to 1.7% in the 12 months ended March 2014.

In 1Q15, in the overhead distribution network, 109 medium-voltage distribution circuits went through inspection/maintenance, 980 transformers were replaced and 29,210 trees were pruned. In the underground distribution network, 4,805 transformer vaults and 10,843 manholes were inspected, in addition to the maintenance of 51 transformers, 18 switches and 290 protectors.

In the last 12 months, the moving average of the equivalent length of interruption indicator (DEC), expressed in time, registered 13.20 hours, 15.11% down on the same period last year, while that of the equivalent frequency of interruption indicator (FEC), expressed in occurrences, stood at 6.70 times, a drop of 11.84% over 1Q15.

Light Energia sold 1,302.6 GWh in 1Q15, net of energy purchases, 2.9% up year-on-year.

After the termination of contracts in the regulated market in December 2013, the trading company became responsible for sales to end clients, concentrating Light Energia's current agreements in the free market (ACL).

In the first quarter of 2015, energy traded in the free market was 1.0% more than in the same period in 2014.

Net spot sales came to 160.0 GWh in 1Q15, 19.0% up on the total sales net of purchases of 134.5 GWh recorded in 1Q14. This result was due to the seasonality of the agreements in this period compared to 1Q14, increasing the difference between verified energy volumes and contracted energy volumes.

The GSF (Generation Scaling Factor) in January, February and March 2015 came to 80.64%, 78.60% and 78.26%, respectively, versus 96.32%, 98.29% and 93.79% in the same months in 2014. The average GSF in 1Q15 was 79.17%, 16.97 p.p. lower than the 96.14% registered in 1Q14.

In the first quarter of 2015, direct energy sales by Light Com and Light Esco from conventional and subsidized sources totaled 1,341.9 GWh, almost in line with the 1,338.0 GWh recorded in the same period last year.

In 1Q15, Light Com sold 19.5 GWh on the captive market (ACR), as a result of the 18th Adjustment Auction held on January 15, 2015, with contracts lasting from January 1, 2015 to March 31, 2015.

Two water-cooling center retrofit projects in Rio de Janeiro were initiated in 1Q15, one in an important hospital belonging to one of Brazil's largest hospital networks, and the other in a major shopping mall, whose energy will be sold by Light ESCO in the free market, both located in Rio de Janeiro. Four projects were also concluded in the quarter: two related to increasing air conditioning energy efficiency in shopping malls in São Paulo and Rio de Janeiro; one comprising the upgrading of the air conditioning system in a commercial building and the conclusion of the construction of a 138 kV transmission line for a large Brazilian mining company.

3. Financial Performance

Consolidated net operating revenue totaled 3,161.7 million in 1Q15, 38.5% more than in 1Q14. Excluding revenue from construction, which has a neutral effect on net income, consolidated net revenue increased 40.3%, amounting to R$2,972.7 million in 1Q15.

The distribution segment recorded an upturn of 51.2%, while the generation and commercialization/services segments recorded respective decreases of 11.4% and 22.0%.

Net revenue from distribution totaled R$2,887.8 million in 1Q15, 51.2% up on 1Q14. Excluding revenue from construction, net revenue came to R$2,698.8 million in 1Q15, 54.5% more than in the same period last year.

As it is envisaged in the distributors` concession agreements, in the case of an economical/financial imbalance in these contracts resulted from changes in the non-manageable costs, distribution companies may request an Extraordinary Tariff Revision. Therefore, on February 27, Aneel approved an average tariff increase of 22.48% for Light SESA, in force since March 2, 2015. It is worth mentioning that residential consumers perceived an increase of 21.06, lower than the average. The items that triggered this readjustment were (i) new CDE quotas (18.19%), and (ii) Itaipu tariff and other energy contracts (4.29%).

Due to adverse hydrological conditions, the tariff flags system was introduced in January 2015 to cover expenses incurred by energy distribution companies, arising from: involuntary exposure to the spot market, thermal power acquisition linked to the Availabilities Contract for Sale of Electricity in the Regulated Environment (CCEAR-D), hydrological risks (quotas and Itaipu) and expenses related to thermal generation with fuel costs higher than the difference settlement price (PLD). The proceeds from these flags will go to the Tariff Flag Proceeds Centralization Account (CCRBT), created by ANEEL Resolution 649/2015. Distributors' transfers to this account, and vice-versa, will be carried out based on the net result between billed revenue and coverable costs, such as expenses with thermal plants, service system charges (ESS) and involuntary exposure, among others.

The 51.2% upturn in the distribution company's revenue was chiefly due to thetariff recognition of costs with energy purchases, which were deducted from non-manageable expenses through transfers from the ACR Account in 1Q14. Tariff recognition in 1Q15 included: (i) transfer of the ACR Account in the amount of R$545.0 million, referring to liquidations in the spot market from November and December 2014 (Order 773, March 27, 2015)[3]; (ii) R$168,7 million from the tariff flags billed in Light SESA's concession area; (iii) the receipt of R$88.4 million from the CCRBT (related to the months of January and February); and (iv) average tariff increases of 19.23% as of November 7, 2014 (annual increase), and 22.48% as of March 2, 2015 (Extraordinary Tariff Revision).

Revenue from surplus demand and exceeding reactive power totaled R$17.6 million this quarter and revenue from the tariff difference related to the special treatment of non-technical losses in the concession area amounted to R$64.6 million, both of which treated as special obligations. Although they are billed, they have not been included in net revenue since the last tariff revision in November 2013. The distribution market consists mostly of the residential and captive commercial segments, which together accounted for 66.2% of energy consumption and 77.5% of sales revenue.

Net revenue from generation totaled R$187.2 million in 1Q15, 11.4% lower than the R$211.2 million recorded in the same period in 2014. Despite the increase in the volume of energy sold, the reduction in net revenue from generation is explained by the decrease in the average sale price, from R$658.3/MWh in 1Q14 to R$388.5/MWh in 1Q15, due to the new maximum PLD limit established by ANEEL, in accordance with Resolution 1832/2014. The average sale price in the free market, net of taxes, was R$117.9/MWh in 1Q15, 2.3% higher than the R$115.2/MWh recorded in 1Q14. After the termination of contracts in the regulated market in December2013, the trading company became responsible for the sale to end clients.

Net revenue from commercialization and services stood at R$229.4 million in 1Q15, 22.0% down from 1T14.

In 1Q15, net revenue from energy resale decreased 22.4% over 1Q14, due to the reduction in the average sale price, net of taxes, from R$213.5/MWh in 1Q14 to R$165.2/MWh in 1Q15, as a result of the new maximum PLD limit established by ANEEL.

In the first quarter of 2015, operating costs and expenses totaled R$2,766.6 million, 43.7% up year-on-year. Excluding construction costs, consolidated costs and expenses climbed by 46.3% over 1Q14, mainly due to higher expenses with energy purchased by the distributor, in addition to a significant increase in costs with charges and transmission.

In 1Q15, distribution costs and expenses moved up by 54.2% over the same period in 2014. Excluding construction costs, total costs and expenses grew by 58.2%.

Non-Manageable Costs and Expenses

In 1Q15, non-manageable costs and expenses came to R$2,165.7 million, 76.5% higher than in the same period in 2014, chiefly due to the tariff recognition of costs with energy purchases in 1Q15 revenue. In 1Q14, these costs were deducted from non-manageable expenses through transfers from the CDE and the ACR Account.

The increase in purchased energy costs was a reflection of: (i) higher costs associated with hydrological risk resulting from quotas, due to larger GSF deficit and the inclusion, as of January 2015, of the hydrological risk related to Itaipu in the current month; (ii) contracting in Auction A-1 (December 2014), Auction A-0 (April 2014), and in the Adjustment Auction (January 2015); (iii) annual contractual adjustments; (iv) the appreciation of the dollar, which was reflected in the expenses related to Itaipu; and (v) expenses with availability contracts related to thermal generation.

Costs with charges and transmission climbed by 61.6% in 1Q15, mainly due to: (i) the 204.1% increase in expenses with the system service charge (ESS) related to thermal generation with fuel costs higher than the PLD; and (ii) the 42.1% increase in energy transmission expenses as a result of higher volumes contracted within the basic network, together with the increase in the network usage charge.

The average purchased energy cost, excluding spot market purchases, amounted to R$184.6/MWh in 1Q15, 29.7% more than the R$142.3/MWh recorded in 1Q14. Including spot market purchases, the average purchased energy cost came to R$220.8/MWh in 1Q15, higher than the 1Q14 average of R$256.4/MWh. The following table gives a breakdown of non-manageable costs:

Manageable Costs and Expenses

In 1Q15, manageable operating costs and expenses, comprising personnel, materials, outsourced services, provisions, depreciation, other operating revenue/expenses and others, totaled R$330.1 million, 5.8% down from 1Q14.

Costs and expenses from personnel, materials, outsourced services and others (PMSO) totaled R$210.9 million in 1Q15, 12.3% more than in the same period in 2014, mainly due to the 20.3% and 17.0% increases in the personnel line and outsourced services line, respectively.

The 20.3% increase in personnel was mainly due to: (i) the collective bargaining agreement as of June 2014; (ii) the rescission of three executive officers who were deposed from their positions in 1Q15; and (iii) the lower volume of labor capitalization in investment projects in the quarter.

The 17.0% upturn in outsourced services was primarily due to: (i) higher expenses with advisory services to improve operating processes and the chances of a favorable outcome of lawsuits, totaling approximately R$5.1 million; (ii) expansion of the Zero Loss Area (APZ) program, totaling approximately R$4 million; (iii) contractual adjustments.

The provisions line came to R$10.3 million in 1Q15, 84.3% less than in 1Q14, chiefly due to the reversal of civil and tax lawsuits amounting to R$40 million.

The depreciation and amortization line increased by 13.8% over 1Q14, due to the increase in the asset base subject to depreciation in 1Q15 over 1Q14.

Light Energia's 1Q15 costs and expenses amounted to R$30.2 million, 21.4% below the 1Q14 figure, due to the 87.0% decline in 'Others', as a result of the change in the booking of the Financial Compensation due to the use of Hydric Resources (CFURH in the Portuguese acronym), which was deemed as an expense in 1Q14, and, in 1Q15, started to be booked as a reduction to the revenue, in accordance with the 2015 Electricity Sector Accounting Manual.

In 1Q15, costs and expenses were broken down as follows: personnel (21.5%), materials and outsourced services (13.6%), CUSD/CUST/purchased energy (15.6%), and depreciation and others (49.3%). PMSO per MWh generated by Light Energia's plants in the quarter came to R$9.8/MWh, 31.9% down on the R$14.4/MWh recorded in 1Q14, due to the impact of the change in the booking of CFURH. Without taking this effect into account , PMSO per MWh would have been of R$ 14.3/MWh in 1Q15, in line with 1Q14.

Costs and expenses totaled R$190.6 million in 1Q15, 31.1% less than in the same period in 2014, as a result of a reversal in the materials and outsourced services line, and the 28.4% reduction in costs from energy purchased for resale, due to the reduction in the maximum PLD limit.

Consolidated EBITDA totaled R$494.4 million in 1Q15, 9.2% and 13.7% above reported and adjusted EBITDA in 1Q14, respectively, mainly driven by the distribution and commercialization/services segments, with respective increases of 17.8% and 129.7%. The EBITDA margin narrowed from 21.4% in 1Q14 to 16.6% in 1Q15.

This 1Q15 EBITDA can primarily be explained by reversals of civil and tax lawsuits in the amount of R$40 million.

The distribution company's EBITDA totaled R$300.2 million in 1Q15, 17.8% up year-on-year, mainly due to reversals of civil and tax lawsuits in the amount of R$40 million.

In 1Q15, Light Energia's EBITDA totaled R$162.2 million, 11.3% down from the same quarter in 2014, due to the 36.2% decline in revenue from the spot market, as a result of the lower average sale price of energy in this market.

EBITDA from commercialization and services totaled R$40.2 million in 1Q15, 129.7% up on 1Q14, driven by the 28.4% decline in the cost of energy purchased for resale, as a result of the lower PLD price in 1Q15.

The 1Q15 financial result was a negative R$178.0 million, a 125.9% decrease over the negative R$78.8 million reported in the first quarter of 2014.

Financial revenue totaled R$323.9 million, 233.9% above the figure reported in the same period last year, mainly due to the variation in the swap result, which generated a revenue of R$222.0 million in 1Q15, versus an expense of R$47.3 million in 1Q14, as a result of the impact of the appreciation of the dollar and the variation in the CDI on the short leg of the swap.

First-quarter financial expenses came to R$501.8 million, 185.4% higher than in 1Q14, primarily explained by: (i) the significant increase in the foreign exchange variation line, due to the strong devaluation of the Real against the Dollar, whose effect was partially offset by the swap result, and (ii) the 22.3% increase in debt charges due to the period increase in the CDI, given that 71.4% of Light's debt is linked to this index.

The Company's gross debt on March 31, 2015 came toR$7,109.4 million, 8.0% up on December 2014 and 17.5%, or R$527.1 million, up year-on-year, due to period funding, as follows: (i) the disbursement of R$475.0 million from BNDES in the last 12 months; (ii) the disbursement of FINEP resources totaling R$136.0 million, at 4% p.a.; (iii) Light SESA's 10th debenture issue, totaling R$750.0 million, with Banco do Brasil, Itaú, and Bradesco, at 115% of the CDI, in May 2014; (iv) a foreign-currency loan of R$156 million from BNP Paribas to Light Energia, hedged by a Real swap transaction; (v) a foreign-currency loan of R$51 million from Bank Tokyo-Mitsubishi to Light SESA, hedged by a Real swap transaction; (vi) a foreign-currency loan of R$200 million from Banco Itaú, of which R$68 million to Light SESA and R$132 million to Light Energia, hedged by a Real swap transaction; and (vii) a foreign-currency loan of R$120 million from Banco Santander to Light SESA, hedged by a Real swap transaction. These funds were used for investments and, especially, working capital needs.

The net debt/EBITDA ratio moved up from 3.70 in December 2014 to 3.74x in March 2015, while the EBITDA/interest expense ratio stood at 2,67x in March 2015. The Company has covenants for these indicators of 3.75x and 2.5x, respectively, although non-compliance is only deemed to occur if the limits determined for the indicators are not respected for two consecutive or four alternate quarters.

The Company's debt has an average term to maturity of 4.2 years and the average cost of Real-denominated debt was 11.9% p.a. In the end of 1Q15, 26.3% of total debt was denominated in foreign currency, but, considering the FX hedge result, only 0.65% of this total was exposed to foreign currency risk. Light's FX hedge policy consists of protecting cash flow from foreign-currency-denominated debt falling due within the next 24 months (principal and interest) through the use of non-cash swap instruments with renowned financial institutions. Funding via Central Bank Resolution 4131, from Merrill Lynch, BNP, Citibank, Bank Tokyo-Mitsubishi, Santander and Itaú, was contracted with swaps for the entire term of the debt.

Light reported net income of R$128.5 million in 1Q15, 28.8% down on the R$180.5 million recorded in 1Q14. This result was mainly due to the125.9% deterioration in the financial result.

Light invested R$170.6 million in 1Q15, 2.8% less than in 1Q14, due to the reduction of the Company's 2015 investment plan.

The distribution segment accounted for most of this result, totaling R$159.4 million (representing 93.5% of the total), 0.7% up on 1Q14. Of this total: (i) R$86.6 million went to the development and expansion of distribution networks in order to keep pace with market growth, strengthen the network and improve quality, including R$6.9 million for specific investments in the World Cup and the Olympic Games; (ii) R$72.1 million went to the energy loss project (network protection, electronic meters, and fraud regularization).

Investments in generation grew 42.9%, chiefly due to the beginning of the Lajes SHPP works.

One of the pillars of Light's Strategic Plan is to increase the share of energy generation in its results. With this in mind, the Company has announced several projects to boost installed generating capacity, which now totals 990 MW. With the incorporation of the scheduled expansion projects, the position on March 31, 2015 was as follows:

The first quarter of 2015 was marked by the following events related to projects for expanding Light's generating capacity:

Lajes SHPP

• This project comprises the construction of the Lajes SHPP, with an installed generating capacity of 17 MW, located in the old HPP Fontes Velha, which was deactivated in 1989. A Special Purpose Entity (SPE), called Lajes Energia S.A., a closely-held company and wholly-owned subsidiary of Light Energia S.A., was created to implement, construct, operate, and maintain the SHPP. The project will not involve substantial works related to dams, including the construction of a water main from the valve house and adjustments to the power house. In addition to generating electric power, the SHPP will directly benefit water supply in the Metropolitan Region of Rio de Janeiro by significantly improving the reliability and operational flexibility of the Lajes Complex.

The basic project has already been approved by ANEEL. In June 2013, ANEEL altered the public service exploration regime to independent energy producer. As a result, the SHPP obtained a 50% reduction in TUSD and TUST fees. The E.P.C. (Engineering, Procurement, Construction) contract was signed in August2014.

With the beginning of the field works, the following activities were concluded: (i) implementation of the construction site; (ii) disassembly of power house units 7 and 8; (iii) disassembly of units 7 and 8 volutes; (iv) removal of the unit 7 and 8 pressure tunnel from the plant's basement stretch; (v) disassembly and removal of unit 7 and 8 sluice gates; (vi) removal of the tilting sluice gates, wagons and drive cylinders of units 1 to 6; (vii) cleaning (blasting) of the CEDAE channel; (viii) disassembly and removal of the 6kV substation isolation transformers.

Operational start-up is scheduled for the first half of 2016, given that the project has already been granted an installation license.

Guanhães Energia

In February 2012, Light Energia acquired a 51% interest in Guanhães Energia S.A. and Cemig acquired the other 49%. Guanhães is responsible for the implementation and exploration of the following SHPPs: Dores de Guanhães (14 MW), Senhora do Porto (12 MW), Fortuna II (9 MW) and Jacaré (9 MW), all of which are located on the Guanhães and Corrente Grande Rivers, in the state of Minas Gerais, with a joint installed capacity of 44 MW.

The project has been impacted by geological and environmental problems which have postponed the start-up date.

Belo Monte

In October 2011, Amazônia Energia, owned by Light (25.5%) and Cemig (74.5%), acquired 9.77% of Norte Energia, the consortium responsible for building and operating the Belo Monte Hydroelectric Power Plant. Located on the Xingu River in the state of Pará, Belo Monte is the largest 100% Brazilian hydro plant and the fourth largest in the world. It has an installed capacity of 11,233 MW and assured energy of 4,571 MW, sufficient to supply around 18 million homes. The energy generated by the Pimental and Belo Monte sites will supply the National Integrated System through a 2,100-kilometer transmission Line to be constructed between the states of Para and Minas Gerais. The concession for the construction of this line is held by a consortium comprising Furnas, State Grid Brazil Holding and Eletronorte.

In the first months of 2015, Norte Energia concluded the concreting of the left side dividing wall and concluded assembling 50% of the segmented sluice gates of the Pimental site spillway, while on the Belo Monte site, the pressure test of the generating unit (GU) 1 spiral case was concluded and its concreting initiated - an important step for the subsequent assembly of the turbine and the generator. Also in the main power house, the GU 4 pre-distributor was installed and assembly of the GU 2 spiral case was concluded. By the close of March 2015, 75% of the works had been completed.

The main event at the beginning of year was the request for the project's Operating License, which authorizes the filling of the reservoirs for operational start-up. The license is granted by IBAMA and subject to an inspection that certifies that all requirements have been met.

Renova Energia ('Renova')

On March 4, 2015, four out of a total of nine wind farms, which sold energy at the LEN A-3 2011 auction, began commercial operations. The nine farms remain linked and the contract will begin within 30 days after start-up of the transmission line. Between March 4, 2015 (beginning of commercial operations) and the date of the beginning of the contract, the farms, according to the technical note issued by ANEEL, will received for energy effectively generated based on the price established in the contract

The Company closed 1Q15 with a cash position of R$641.3 million, 7.7% down year-on-year. In 1Q15, the working capital gain, together with the booking of the CVA since 4Q14 and the reduction in the CDE subsidy, contributed to the 89.7% year-on-year improvement in cash flow from operating activities.

5. Corporate Governance

On March 31, 2015, the capital stock of Light S.A. comprised 203,934,060 common shares, 78,488,667 of which are outstanding.

The following chart shows Light's current shareholding structure:

On February 5, 2015, an Extraordinary Shareholders' Meeting and Board of Directors' Meeting resolved on the election of members of the Board of Directorsof Light S.A., which now comprises: (i) sitting members: Nelson José Hubner Moreira, Giles Carriconde Azevedo, Fernando Henrique Schüffner Neto, Marcello Lignani Siqueira, Marco Antônio de Rezende Teixeira, Ana Marta Horta Veloso, Fabiano Macanhan Fontes, Oscar Rodríguez Herrero, Guilherme Narciso de Lacerda, Silvio Artur Meira Starling and Carlos Alberto da Cruz; (ii) alternate members: Samy Kopit Moscovitch, César Vaz de Melo Fernandes, Fabiano Maia Pereira, Eduardo Lima Andrade Ferreira, Rogério Sobreira Bezerra, José Augusto Gomes Campos, Carlos Antonio Decezaro, Marcelo Pedreira Oliveira, Jálisson Lage Maciel, Eduardo Maculan Vincentini and Magno dos Santos Filho.

The Board of Directors unanimously approved the election of Board member Nelson José Hubner Moreira as Chairman of the Board, with a term of office until the first Board meeting to be held after the Annual Shareholders' Meeting of 2016. The Board of Directors unanimously dismissed the Corporate Management Officer, Paulo Carvalho Filho, and the Communications Officer, Luiz Otávio Ziza Mota Valadares, on the same date. In view of their dismissal and the dismissal of the Energy Officer and Business Development Officer on January 21, 2015, the Board of Directors unanimously elected, for the remaining term of office, to be concluded on August 7, 2015, the following executive officers: (i) Ailton Fernando Dias as Corporate Management Officer; (ii) Luís Fernando de Almeida Guimarães as Energy Officer; (iii) Luiz Antônio Rodrigues Elias as Communications Officer; (iv) and Cláudio Bernardo Guimarães de Moraes as Business Development Officer.

Light's shares have been listed in the BM&FBovespa's Novo Mercado trading segment since July 2005, therefore adhering to best corporate governance practices and the principles of transparency and equity, in addition to granting special rights to minority shareholders. Light S.A.'s shares are included in the following indices: Ibovespa, IGC (Corporate Governance Index), IEE (Electric Power Index), IBrX (Brazil Index), ISE (Corporate Sustainability Index), ITAG (Special Tag Along Stock Index) and IDIV (Dividend Index). They are also traded on the U.S. over-the-counter (OTC) market as Level 1 ADRs under the ticker LGSXY.

At the end of March 2015, Light S.A.'s shares (LIGT3) were priced at R$14.40. The Company's market cap (no. of shares x share price) closed the quarter at approximately R$2,937 million.

The charts below give a breakdown of the Company's free float in March2015:

The chart below shows the performance of Light's stock from December 30, 2013 to May 7, 2015.

Dividends

On April 10, 2015, the Annual and Extraordinary Shareholders' Meetings approved the Board of Directors' proposal to distribute dividends of R$157,422,432.59, equivalent to R$0.7719 per share, related to the results from the fiscal year ended December 31, 2014. This amount represents a dividend yield of 5.8% and corresponds to a payout equivalent tothe mandatory minimum of 25% of net income for the year, adjusted for the legal reserve. According to the Company's Board of Directors' criteria, this payment is compatible with the absence of predictability in regard to the hydrological situation and the current condition of Brazil's electricity sector.

Shares have been traded ex-dividends as of April 13, 2014.

Dividends paid, dividend yield and payout

ü The Annual and Extraordinary Shareholders' Meeting held on April 10, 2015, resolved on the following matters: (i) allocation of net income for the fiscal year ended December 31, 2014; (ii) establishment of the overall annual compensation for the Management and the Fiscal Council; (iii) installation of the Fiscal Council and the election of 5 sitting and alternate members; (iv) reorganization of the members of the Board of Directors;

ü In a letter dated April 9, 2015, Luiz Antônio Rodrigues Elias, elected to the position of Communications Officer of Light S.A. and Light S.E.S.A. on February 5, 2015, declared that, due to reasons beyond his control, he could not take up the post to which he had been elected. Paulo Roberto Ribeiro Pinto, the Company's CEO, declared that he has been cumulatively acting as Communication Officer of Light S.A. and Light S.E.S.A.

ü At the Board of Directors' Meetings on April 17, 2015 and April 29, 2015, Board members Fabiano Macanhan Fontes, Carlos Antônio Decezaro, Eduardo Lima Andrade Ferreira and Fabiano Maia Pereira resigned from their positions. An Extraordinary Shareholders' Meeting to be held on May 18, 2015 was called to resolve on the change in the Board of Directors' composition.

ü On April 30, 2015, the Consortium UHE Itaocara, comprising the subsidiary Itaocara Energia Ltda., with a 51% interest, and Cemig Geração e Transmissão S.A., with the remaining 49%, was declared the winner of the A-5 Auction held by ANEEL, related to the Itaocara I hydroelectric power plant. The project will be built in the Paraíba do Sul River and will have an installed capacity of 150.0 MW, and assured energy of 93.4 MW average. The UHE Itaocara Consortium destined 95.5% of its assured energy to the Regulated Contracting Environment, at a selling price of R$ 154.99/MWh, with the Power Purchase Agreement starting in January 2020, and a supply period of 30 years. Operations are believed to start in the second quarter of 2018, and the total estimated investment is of R$ 1 billion.

ü On May 7, 2015, the Company disclosed a material fact informing that Renova Energia ('the Company' or 'Renova') executed a Securities Contribution Agreement with SE Emerging Markets Yield, Inc. ('TerraForm Global') and SunEdison Inc. ('SunEdison'), whereby the Company will contribute determined operating assets of Renova to the capital of TerraForm Global. The Agreement, subject to precedent conditions, including TerraForm Global's IPO, obtaining consent from third parties and regulatory approvals, including CADE, Aneel and Eletrobrás, stablishes that Renova will contribute the assets relating to the projects of, Salvador and Bahia, totaling 336.2 MW of installed capacity,f for the total value of R$1,613,000,000.00, subject to the adjustments envisaged in the Agreement, and Renova will have the right to choose, at its sole discretion, if such amount will be payed by Terraform Global in cash or in Terraform Global´ shares. In this date, a memorandum of understandings between Renova Energia, Terrafrom Global and SunEdison was also executed, whereby the Company will have a period to evaluate and negotiate the contribution of other operating and non-operating assets and projects for future development of the Company, as well as rights and obligations that the Company deems appropriate to manage the potential long-term relationship between Renova, TerraForm Global and SunEdison.

ü Also on May 7, 2015, the Company announced to the market that it is holding preliminary discussions regarding the possible sale of the 15.87% stake held by Light Energy in Renova Energia. Light Energia clarifies that any final agreement on the terms and conditions of this potential operation is inexistent so far, as well as any commitment that binds Light Energia to carry out the operation.

Forward-looking statements

The information on the Company's operations and its Management's expectations regarding its future performance has not been reviewed by the independent auditors.

Statements about future events are subject to risks and uncertainties. These statements are based on beliefs and assumptions of our Management, and on information currently available to the Company. Statements about future events include information about our intentions, beliefs or current expectations, as well as of the Company's Board of Directors and Officers. Exceptions related to statements and information about the future also include information about operating results, likely or presumed, as well as statements that are preceded by, followed by, or including words such as 'believes', 'might', 'will', 'continues', 'expects', 'estimates', 'intends', 'anticipates', or similar expressions. Statements and information about the future are not a guarantee of performance. They involve risks, uncertainties and assumptions because they refer to future events, thus depending on circumstances that might or might not occur. Future results and creation of value to shareholders might significantly differ from the ones expressed or suggested by forward-looking statements. Many of the factors that will determine these results and values are beyond LIGHT S.A.'s control or forecast capacity.

Selected Financial Information - R$ million

Selected Consolidated Financial Information[5]- R$ million

(*) EBITDA is not a recognized measure under BRGAAP or IFRS. It is used by the Company as an additional measure of performance of its operations, and it should not considered individually or as an alternative to net income or operating income, as a measure of operating performance, or as an indicator of liquidity. The table below presents the reconciliation in accordance with CVM Instruction 527/2012:

Consolidated Balance Sheet - R$ million

Regulatory Assets and Liabilities

[1]On December 10, 2014, the Company executed the fourth amendment to the energy distribution concession agreement, which ensured the right and the duty that the remaining balances of eventual insufficiencies or refunds through the tariff at the end of the concession will be added or excluded from the indemnification, permitting recognition of the balances of these regulatory assets and liabilities.

Complementary Information - Consolidated Financial Information on a Proportional Interest Basis

This information is complementary and is exclusively for comparative purposes, since it is not in accordance with Brazilian accounting practices.