19919510 COMMON SHARES EDP – Energias do Brasil SA

of amounts for doubtful accounts. As of March 31, 2011, our overdue accounts receivable totaled R$332
million, R$136 million being past due by more than 90 days. If the creditworthiness of our customers
deteriorates, our business, financial condition and results of operations may be adversely affected.
We may not be able to fully implement our business strategies.
Our ability to implement our business strategies depends on various factors. Our strategy to increase our
presence in generation depends on our ability to: (i) obtain the right to build new generation projects through
public bids conducted according to the New Electricity Law; (ii) conclude the construction of new generation
projects, avoiding extraordinary costs resulting from delays in construction, which exceed our budget,
engineering and environmental issues, issues relating to the underlying property, labor unrest and other
factors, particularly with respect to the Pecém project, scheduled to become operational by January 2012; and
(iii) acquire hydroelectric power generation assets on greenfields or ongoing projects as well as increase our
equity interest in our existing projects.
Our strategy to develop our energy trading activities depends on our ability to (i) to operate in a highly
competitive market and (ii) manage market risks inherent in energy trading. We may not be able to identify
and minimize significant risks, which may affect the results of operation of our energy trading business.
Our strategy with respect to our success in our distribution business depends on our ability to maintain
our investments in operational efficiency. The prices at which we purchase and sell energy vary considerably,
depending, among other things, on demand fluctuations due to economic or other factors, hydrological
conditions and their effect on energy supply; and the availability of energy from new power generation plants.
The acquisition of the Santo Antônio do Jari hydroelectric power plant involves risks, if the conditions
precedent for closing are not met, and if unforeseen events affect the construction, implementation or
operation of the plant.
On June 15, 2011, we executed a Share Purchase Agreement for the acquisition of the total capital stock
of ECE Participações S.A., which owns 90% of the Amapá Energia Consortium. This consortium owns the
right to operate the Santo Antônio do Jari hydroelectric power plant. The Share Purchase Agreement
establishes all terms and conditions, especially the conditions precedent for closing, including ANEEL's
approval of the transaction.
The construction, implementation and operation of the Santo Antônio do Jari hydroelectric power plant is
subject to certain unforeseen events, which may cause delays in the timetable for the operation of the plant
and increase development costs, affecting our cash flow, such as:
• limited number of outsourcing companies for the construction of the plant;
• lack or poor performance of equipment;
• weather interferences;
• work stoppage, strikes and labor disputes;
• social disturbances;
• technical capacity and labor problems;
• unexpected engineering problems; and
• regulatory, tax and environmental issues.
We cannot assure that the above mentioned events may not occur.
Additionally, the closing of the acquisition is subject to the completion of certain conditions precedents,
including the regulatory authorizations such as ANEEL's approval. The compliance with such conditions
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