19919510 COMMON SHARES EDP – Energias do Brasil SA

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SUMMARY This summary highlights information about our business and our financial and operating information contained elsewhere in this offering memorandum. This summary may not contain all the information that may be important to you, and we urge you to read this entire offering memorandum carefully, including the sections “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes to those statements, included in this offering memorandum, before deciding to invest in our common shares. Overview We are a holding company that, through our diversified portfolio, engages in the generation, distribution, transmission and trading of electric power in the Brazilian market. Our holdings consist of electric power generation projects, such as the Lajeado hydroelectric power plant and the Peixe Angical hydroelectric power plant that, together with other hydroelectric and wind power generation projects, gave us a total installed capacity of 1,741 MW as of March 31, 2011. Our total potential installed capacity is expected to reach 2,151 MW by 2012, through our participation in the Pecém project (a joint venture with MPX to develop a coalpowered thermal power plant now under construction) and other ongoing electric power generation projects such as the development of a Tramandaí wind farm (located in the State of Rio Grande do Sul) along with EDP Renováveis. Our electricity distribution companies, EDP Bandeirante and EDP Escelsa, supply approximately 2.7 million customers, the majority of which are in residential and industrial areas across 98 municipalities, 28 of which are located in the State of São Paulo and 70 located in the State of Espírito Santo (with a total population of approximately 8 million inhabitants). Our distribution concession areas cover a total of 50,885 square kilometers. Our electricity trading company, Enertrade, traded a total of 8,263 GWh of electricity in 2010 and 2,330 GWh of electricity in the three-month period ended March 31, 2011. Our leading positions in the Brazilian electricity market include being (i) the fourth largest private-sector distribution group in Brazil based on electricity sold in 2010 according to EPE – Empresa de Pesquisa Energética; (ii) the fifth largest private-sector generation group in Brazil based on installed capacity as of December 31, 2010 according to ANEEL; and (iii) the third largest private-sector trading group in Brazil based on energy traded in 2010 according to CCEE. 1
Page 1 and 2: CONFIDENTIAL OFFERING MEMORANDUM 19
Page 3 and 4: FORWARD-LOOKING STATEMENTS ........
Page 5 and 6: This document may not be publicly d
Page 7 and 8: Forward-looking statements involve
Page 9: published by official government so
Page 13 and 14: The table below presents the reconc
Page 15 and 16: EDP Bandeirante One of the main pow
Page 17 and 18: Solid Capital Structure, Historic D
Page 19 and 20: Our Corporate Structure The followi
Page 21 and 22: Voting Rights .....................
Page 23 and 24: As of March 31, As of December 31,
Page 25 and 26: RISK FACTORS An investment in our c
Page 27 and 28: the market price of our securities.
Page 29 and 30: Our growth by means of public bids
Page 31 and 32: precedent is beyond our control and
Page 33 and 34: level of contributions we need to m
Page 35 and 36: Events and changes in risk percepti
Page 37 and 38: EXCHANGE RATES The Brazilian foreig
Page 39 and 40: Low Price per Share Average (in rea
Page 41 and 42: The Novo Mercado The Novo Mercado i
Page 43 and 44: CAPITALIZATION The following table
Page 45 and 46: SELECTED FINANCIAL INFORMATION We p
Page 47 and 48: Liabilities As of March 31, As of D
Page 49 and 50: The tables below present a reconcil
Page 51 and 52: The following table sets forth our
Page 53 and 54: Principal Factors Affecting Our Res
Page 55 and 56: Ratings upgraded Brazil to investme
Page 57 and 58: This corporate reorganization consi
Page 59 and 60: Revenue Recognition Although we bil
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We and our subsidiaries do not ente
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The table below sets forth selected
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corrective maintenance of the netwo
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Year ended December 31, 2010 Compar
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Operational expenses Operational ex
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Cash used in investing activities d
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This financing is related to invest
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Investco BNDES The main terms of th
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eleased in August 2010. The total s
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Contractual Commitments The followi
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Financial risk Decisions on financi
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General OVERVIEW OF THE BRAZILIAN E
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Energy production plants operate pu
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for operating the energy system, as
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The distribution tariff comprises t
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equirement that distribution and ge
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Electricity Trading Markets Pursuan
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subsequent to the auction for exist
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X Factor The X Factor is used in an
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• Granting-authority intervention
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Ministry of Mines and Energy (MME)
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purchases the electricity generated
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The licensing process comprises thr
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The following table sets forth our
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Business Segments Generation For th
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Our Strengths We believe that our c
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July 15, 2011. The Santo Antônio d
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Also in 1999, the EDP Group acquire
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On March 22, 2010, the Brazilian In
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In the above chart, with respect to
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Of the total amount of resources al
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EDP Bandeirante In October 2009, AN
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The table below sets forth a brief
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In order to allow the Investco shar
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530 2005 Energy Trading Activities
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The revenue for the use of the dist
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The following table shows the numbe
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such as for waste disposal, we are
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All of our operating licenses are s
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Concessionaire Site State Type of G
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Our generation plants maintain insu
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which we believe the probability of
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in our share capital; (ii) are not
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Audit Committee The audit committee
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The commercial address of our Inves
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Family Relationships As of the date
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Energias de Portugal Investments an
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y the shareholders; (iii) the condi
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Descriptions of Related Party Trans
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DESCRIPTION OF CAPITAL STOCK The fo
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• our securities shall not be tra
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Quorum • bonuses and approval of
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Our fiscal council is a non-permane
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• during the 15-day period prior
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Going Private Process We may become
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Quarterly and Annual Information In
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Retained Profits Reserves Under the
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TAXATION The following summary cont
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Discussion on Low or Nil Tax Jurisd
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For purposes of this summary, a “
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Passive foreign investment company
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PLAN OF DISTRIBUTION Subject to the
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(g) a transfer to any other person
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TRANSFER RESTRICTIONS Because of th
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exemptive relief from the prohibite
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(iii) in a transaction that, in acc
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(ii) where no consideration is or w
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INDEPENDENT ACCOUNTANTS Our unaudit
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A plaintiff (whether or not Brazili
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INDEX TO FINANCIAL STATEMENTS EDP -
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� � QUARTERLY FINANCIAL INFORMA
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Independent Auditors’ Review Repo
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EDP - ENERGIAS DO BRASIL S.A. BALAN
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EDP - ENERGIAS DO BRASIL S.A. STATE
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2 2.1 2.1.1 2.1.2 2.2 Accounting pr
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��
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��
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2.7 Reclassifications in prior peri
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Periodic tariff review of 2010 - Es
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7 Accounts receivable Parent compan
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10 Deferred income and social contr
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11 Related parties ��
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14 Other credits - Assets and Other
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15.2 Direct interest on investments
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Buildings, civil works and improvem
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19.1 Free energy 20 Debentures �
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20.4 20.5 Changes in debentures in
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Eletrobrás ��
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21.3 Additional information on debt
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The change in the loans and financi
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22.3 Energest 22.3.1 22.3.2 Present
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26.1.2 Labor claims 26.1.3 Civil 26
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��
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��
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33.2 Fair value ��
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Financial assets Cash and cash equi
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33.5 33.6 Contractual obligations D
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��
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Net operating revenue 922.837 Elect
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EDP - Energias do Brasil S.A. Indep
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accounting estimates made by Manage
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EDP - ENERGIAS DO BRASIL S.A. BALAN
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F-75 EDP - ENERGIAS DO BRASIL S.A.
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2 Accounting policies 2.1 Basis of
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g) Intangible assets (Note 19) Inta
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u) Income statement Income and expe
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For distribution companies, the bif
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Liabilities and shareholders' equit
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3.2.3 Reconciliation of the parent
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Shareholders' equity Capital: adjus
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6 Cash and cash equivalents Parent
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10.3 IRRF - interest on own capital
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11.1.3 The goodwill fiscal credit d
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12.1 Directors' Fees 12.1.1 Compens
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15.1 Tariff modicity - low income L
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18 Property, plant and equipment Av
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19.1 19.2 Concession right - Other
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21.2 Issuer Escelsa 1st debentures
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22 Loans, financing and debt charge
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22.2 BNDES agreement n°. 88,425 /
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Page 313 and 314:
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23.1 Bandeirante BSPS - Reserves to
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23.2.1 Retirement plans Plan I - Es
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12/31/2010 12/31/2009 12/31/2008 12
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23.3.2 The main assumptions utilize
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25 Regulatory and sector charges Ac
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27.2 Risk of possible loss 27.2.1 C
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Number of shares of controlling sha
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31 Operating expenses Parent compan
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34.2 Fair value Fair value is the a
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Financial assets Cash and cash equi
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34.5 34.6 Contractual obligations D
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Inception CONSOLIDATED USD/EUR noti
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38 38.1 Segment information A busin
Page 341 and 342:
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19919510 COMMON SHARES EDP – Energias do Brasil SA

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