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LIGHT S.A.

- 05/16/2011 Press Release 2Q10


Release Segmentation Light S.A. is a holding company that controls wholly-owned subsidiaries pertaining to three business segments: electricity distribution (Light SESA), electricity generation (Light Energia) and electricity commercialization/services (Light Esco and Lightcom).

Operating Performance
Distribution
Electric Energy Consumption (GWh)
Total Market (Captive + Free)

Total

energy

consumption

in

Light

SESAs

5,2%

concession area (captive customers + transport of free customers 1) came to 5,498 GWh in 2Q10, a 5.2% year-on-year increase, driven by the performance of both markets, especially the substantial increase in free market consumption.

5,228 609
22,2%

5,498 743

4,619
2,9%

4,755

2Q09

Captive

Free

2Q10

In the first half, total energy consumption was 11,585 GWh, 7.4% higher than in the same 2009 period, mainly fueled by the free market and residential segment, which grew 9.5%, 3.6 p.p. higher than residential segment growth in the Southeast region. According to the Energy Research Corporation (EPE), total consumption in the Southeast and Brazil as a whole increased by 10.7% and 9.9%, respectively, over 1H09. If the consumption of the free clients CSN, Valesul taken and into CSA is
7.0% 1.9% 1,862 1,992 -7.8% 459 423 1.6% 1,477 1,505 822 835 Electric Energy Consumption (GWh) 2st Quarter 2.9%

4,619

4,755

account,

total billed consumption came to 5,948 GWh in 2Q10 and 12,456 GWh in 1H10.
1
Residential

Industrial

Commercial 2Q09 2Q10

Others

Total

To preserve comparability with the market approved by Aneel in the tariff adjustment process, the billed energy of free customers Valesul, CSN and CSA were excluded, in view of these customers planned migration to the core network. Energy consumption by these clients totaled 450 GWh in 2Q10 and 395 GWh in 2Q09.

Captive Market In 2Q10, billed consumption in the captive market grew by 2.9% over 2Q09, especially due to the excellent performance of the residential segment, which soared by 7.0%.

The average temperature in the second quarter of 2010 was 0.7C below the average for the same 2009 period, therefore, the upturn in consumption cannot be explained exclusively by the average temperature. The increase in residential consumption is explained by the improvement in economic conditions in Lights concession area, a reflection of higher income, the expansion in client base and easier access to home appliances. Residential consumption accounted for 41.9% of the captive market in 2Q10. The number of billed residential clients grew by 1.9% to 3.72 million in June 2010, with an average monthly consumption of 178.6 kWh, compared to 170.0 kWh in the same last year period. The commercial segment, which consumed 1,505 GWh, represented 31.7% of captive market consumption, 1.9% above 2Q09. The performance of this segment was affected by migrations to the free market that took place between the two periods; when excluded, commercial consumption would have grown by 4.6%. Only in 2Q10, one client with average monthly consumption of 6 GWh in the period migrated to the free market. Industrial clients, who represent 8.9% of the captive market, consumed 423 GWh, 7.8% below 2Q09, also mainly due to interim migrations to the free market. Excluding these, growth was 7.3%, underlining the industrial segments recovery. Two clients with average monthly consumption of 10 GWh in the period migrated to the free market. The other categories, which accounted for 17.6% of the captive market, grew 1.6% from 2Q09. The rural, government and public service categories, which represented 0.3%, 7.6% and 5.8% of the captive market, respectively, recorded positive performances. In 1H10, the captive markets billed consumption totaled 10,185 GWh, 5.9% higher than in 1H09, mainly due to the substantial increase in residential consumption, which grew by 9.5%. In contrast with other previous periods, the upturn in consumption cannot be explained exclusively by the average temperature, which was virtually identical to the first six months of last year. Consequently, the

increase shows the economic growth of Lights concession area and the rebound in the economic development of Rio de Janeiro. Network Usage
2

Electric Energy Transportation - GWh Free Customers + Concessionaires 33.0% 1,522 1,144 778 535

Billed energy transported to free customers 3 and concessionaires totaled 1,522 GWh in 2Q10, 33.0% up on a year-over-year basis. The substantial 22.2% upturn in billed energy transported to free clients can be explained by the recovery in the activities of major industrial consumers and the migrations of captive-market clients to the free market. If these migrations had been excluded, billed

45.4% 22.2%

609

743

Free

Conc essionaires 2Q09 2Q10

Total

energy transported to free clients would have

increased by 4.3%. In addition to the free market, the flow of energy to concessionaires bordering Lights area grew by 45.4% between the periods due to dispatch by the National Electric System Operator (ONS). In 1H10, network usage totaled 2,999 GWh, 29.1% up year-on-year.

To preserve comparability with the market approved by Aneel in the tariff adjustment process, the billed energy of free customers Valesul, CSN and CSA were excluded, in view of these customers planned migration to the core network. Energy consumption by these clients totaled 450 GWh in 2Q10 and 395 GWh in 2Q09.

Energy Flow

D IS TR IB U TIO N E N ER G ETIC B A LA N CE - G W h
P o sitio n : Jan u a ry - June 2 0 10 P R O IN F A 232.2 CCEAR Energy Balance L ig ht En erg ia (GWh) = Grid Load 163.6 - Energy transported to utilities - Energy transported to free customers* ITA IPU = Own Load R eq u ired E. - Captive market (C C EE ) consumption 2 ,67 (C C EE) Low Voltage Market 5.8 Medium Voltage Market 1 4,0 91 .1 - Losses + Non A U C T IO N S Billed Energy *Including CSN, Valesul and CSA (C C EE ) 7 ,33 6.0 N O R TE FLU (C C EE ) 3 ,15 0.1 O T H ER S (* ) (C C E E) 533.4
(*) Others = Purchase in Spot - Sale in Spot.

R e sid e ntia l 4,407 .9


2Q10 2Q09 8,194 7,537 O w n lo a d 778 535 Lig h t 1,259 931 13 ,9 06.2 6,157 6,071 4,755 4,619 3,067 2,899 1,687 1,720 1,402 1,452

B ille d In d ustria l Var.% y 1H01 1H09 Var.% En erg 87 2.4 8.7% 17,832 16,356 9.0% 1 0,184.7 45.4% 1,599 1,158 38.0% C o m m1,980 l 17.5% ercia 35.3% 2,327 3,207 .0 1.4% 13,906 13,218 5.2% L2.9% + 10,185 o sses 9,621 5.9% O thers 6,656 6,148 8.3% N5.8%ille d on B -1.9% y 3,529 3,473 1.6% 1,697 .4 En erg -3.4% 3,722 3,597 3.5% 3,721.6

Ba sic n etw . losses A d ju stm en t

27 2.0 (87.2 )

Energy Losses Light SESAs total energy losses amounted to 7,513 GWh, or 21.59% of the grid load, in the 12 months ended June 31, 2010, 0.39 p.p. below the end-of-March ratio. As of November of 2009, non-technical losses
21.23% 14.93% 6,929

Light Losses Evolution 12 months 21.50% 15.22% 7,005 21.82% 15.40% 7,269 21.98% 15.56% 7,504 21.59% 15.23% 7,513 Jun-10
42.0% 5,300 Jun-10
76.1 1H10 39,766 1 H10

Jun-09

sep/09

dec/09

Mar-10

GWh Losses % Losses / Grid Load (Own + Trans) Non-technical losses % Grid Load

began to be disclosed for billed energy in the low-voltage market in compliance with the change mandated by ANEEL in its definitive tariff adjustment approved last October. This change is more in line with the concessionaires operations since it is precisely in the low-voltage market where non-technical methodology, 5,300 GWh, losses are found. Following this through June 2010 totaled
Non tecnical losses / Low Voltage market 12 months 41.8% 4,874 42.3% 4,958 42.5% 5,149 42.7% 5,313 Mar-10
0.6% -8.4%

non-technical losses, which in the 12 months representing 42.0% of the low-voltage market

Jun- 09

sep/09

dec/09

"Non Tec nincal Losses (GW)" "Non tec nical Losses % Low Voltage Mkt"

(15.23% of the grid load), fell by 0.7 p.p. from losses in 1Q10. Conventional energy recovery processes, such as the negotiation of amounts owed by customers, where fraud has been detected, resulted in the recovery of 76.1 GWh in 1H10, in line with the same last year period. Fraud regularization programs yielded a total of 39,766 normalized clients in 1H10, 8.4% below 1H09. Conventional energy recovery initiatives were stepped up this quarter, marking the beginning of efforts to catch up following the delays in the loss prevention program caused by outages during the summer. In addition to conventional actions, there was further progress in
1H09 75.7

R eco vered Energ y GW

regards to new technologies through the reinstallation of electronic meters certified by Inmetro. At the close of June, nearly 12,000 meters with billing through remote electronic metering had been reinstalled. In terms of network protection, nearly 57,000 clients were covered in 1H10, in line with our target of reaching 87,000 by yearend.

No rmalized Co st umers

43,398

1H0 9

Collection The 2Q10 collection rate exceeded 100% of the billed total, reaching 101.5%, 1.9 p.p. below crisis, which caused a delay in bill payments at the beginning of 2009, especially in the retail segment. Major and government clients
102.1% 98.9% 101.8% 101.3%
Colletion rate R$ MM Billing Collection Collection Tax 2Q10 2,109 2,141 101.5% 2Q09 1,986 2,054 103.4% 1H10 4,414 4,347 98.5% 1H09 4,162 4,037 97.0%

2Q09, due to the greater concentration of collections in 2Q09 as a result of the economic
Collection Rate per Segment
112.2% 111.7%

continued to record high collection rates, of above 100%.


Retail Large Customers 2Q09 2Q10 Public Sec tor

The collection rate for the past 12 months was 98.1% of total billed consumption, 0.7 p.p. above June 2009 and 0.4 p.p. below March 2010. In 2Q10, Provisions for Past Due Accounts (PPD) totaled R$75.3 million, representing 3.8% of gross billed energy. As a result, and according to the sectors provisioning criteria, provisions related to past due bills of residential clients are constituted 90 days after the due date, this disconnections due to the focus of the
3.5%

Collection rate 12 months moving average 98.5% 98.1% 97.4% 97.2% 97.3%

Jun-09

Sep-10

Dec-10

Mar-10

Jun-10

result can be explained by the following factors: (i) the reduction in the number of
PDD/Gross Revenue (Billed Sales) 3.8% 2.9%

Companys technicians on operating quality as a result of the summer outage problems; (ii) substantial billed energy in the previous quarter, which impacted the provisioning of higher bills in 2Q10; (iii) higher billed energy growth in the retail segment, which has a lower collection rate.
R$ Million PDD

2Q09

1Q10

2Q10

Provisions for Past Due Accounts 2Q10 2Q09 Var 1H10 1H09 75.3 66.5 13.1% 138.8 126.4

Var 9.8%

Operating Quality Ensuring high levels of quality in the supply of electricity is an essential part of establishing a good relationship between the distribution company and its clients. The problems it faced last summer led Light to further intensify its distribution improvement investment plan. In 1H10, the Company invested R$69.2 million in an effort to improve the quality of its electricity supply business and to increase the capacity of its distribution network, that is 40.3% more than the R$49.3 million invested in the same last year period. Among these improvements, it is particularly worth mentioning the replacement of 112.5 km of conventional cable with space cable (medium and low-voltage compact network), compared to 46.8 km in 2Q09. At the end of June, the equivalent length of interruption indicator (DEC), expressed in hours, registered 11.63 hours for the last 12 months, while the equivalent frequency of interruption indicator (FEC), expressed in occurrences, stood at 6.24 times. The first half of the year was characterized by adverse weather conditions, including 1,075 mm of rainfall, 80% more than in the same last year period, and higher-than-normal summer temperatures, which resulted in strong load growth. Most of the service interruptions occurred in areas served by underground networks, which are more complex and therefore take longer to repair, thereby increasing the DEC.
ELC / EFC - 12 Months

ELC EFC
Jun/10*
6,97 6,03 6,24

9,13

11,35 11,63

jun/09

jun/08

ELC Equivalent Length of Interruption per Consumption Unit (hs) EFC Equivalent Frequency of Interruption per Consumption Unit (n.)
* Excludes the effects of the occurrence on the National Interconnected System on 11/10/09

Generation Energy sold on the captive (ACR) and free (ACL) markets totaled 1,007.2 GWh and 103.1 GWh, respectively, in 2Q10, below 0.6% and 14.3%, respectively, from the same 2009 period due to the seasonality of contracts in effect since 2010. The 843.6% increase in the energy volume sold in the spot market in 2Q10 was primarily caused by two factors: (i) the increase in hydroelectric generation within the National Interconnected System, which generated more secondary energy for settlement in the CCEE; and (ii) the booking procedures of the CCEE, which failed to deduct the energy consumed by pumps in 2Q10, totaling 182.1 GWh, which will be reversed in the coming periods, although no specific date has been fixed as yet. First-half sales totaled 3,113.7 GWh, 28.1% up on a year-over-year basis, driven by spot market sales, as explained above.
LIGHT ENERGIA (GWh) Regulated Contracting Environment Sales Free Contracting Environment Sales Spot Sales (CCEE) Total 2Q10 1,007.2 103.1 318.1 1,428.4 2Q09 1,013.6 120.3 33.7 1,167.7 % -0.6% -14.3% 843.6% 22.3% 1H10 2,051.7 188.6 873.4 3,113.7 1H09 2,053.2 206.3 170.8 % -0.1% -8.6% 411.3%

2,430.3 28.1%

Commercialization and Services In 2Q10, Light Esco and Lightcom sold 219.0 GWh directly, increasing 104.1% on year-over-year basis. This increase is a result of the commercialization companys increased availability to resale energy compared to the same 2009 period, as well as the expansion of the sales contract portfolio, including, for example, Owens Illinois, BR Metals and MD Papis. Commercialization activity involved a total of 73 clients. In addition to direct sales, Light Esco also continued to provide consulting services and represent free customers before the CCEE. These activities involved 9 clients and operations totaling 700.8 GWh in 2Q10, including consulting services on behalf of two plants suffering commercial start-up delays since January 2010. Escos 13 ongoing service contracts included three new projects this quarter: (i) the upgrading of the cooling tower for the Santos Dumont Business Center, a client that had previously undertaken another project with Light Esco; (ii) the retrofit of the cooling system for a business center in the south side of Rio de Janeiro city; and (iii) the construction of an aerial network and interconnection with a medium voltage substation for a small hydropower plant which is being built in the interior of Rio de Janeiro state. In 1H10, Light Esco traded 1,849.5 GWh, 159.0% up on 1H09.
Volum e (GW h) Trading Broker Total 2Q10 219.0 700.8 919.8 2 Q09 107.3 262.0 369 .3 Var.% 104.1% 167.5% 14 9.1% 1H10 432.8 1,416.7 1,849 .5 1 H0 9 208.2 505.8 714.0 Var.% 107.9% 180.1% 159 .0 %

Financial Performance

STATEMENT OF CONSOLIDATED INCOME 2Q09 NET OPERATING REVENUE OPERATING EXPENSE Personnel Material Outsourced Services Purchased Energy Depreciation Provisions Others Construction Cost OPERATING RESULT() FINANCIAL RESULT Financial Income Financial Expenses Other Operating Incomes/Expenses RESULT BEFORE TAXES AND INTEREST SOCIAL CONTRIBUTIONS & INCOME TAX NET INCOME EBITDA 1,484,248 (1,296,324) (69,529) (6,465) (63,903) (848,647) (85,746) (85,037) (22,061) (114,936) 187,924 4,183 38,486 (34,303) (2,384) 2Q10 1,512,731 (1,209,563) (64,178) (8,084) (82,507) (804,800) (88,067) (37,138) (13,603) (111,186) 303,168 (32,194) 51,736 (83,930) % 1.9% -6.7% -7.7% 25.0% 29.1% -5.2% 2.7% -56.3% -38.3% -3.3% 61.3% -869.6% 34.4% 144.7% -

Net

189,723

270,974

42.8%

(143,236) 46,487 273,670

(133,322) 137,652 391,235

-6.9% 196.1%

43.0%

Revenue Net revenue totaled R$ 1,512.7 million in 2Q10, 1.9% above 2Q09, mainly due to the positive performance of distribution, generation and commercialization segments, respectively. This increase resulted from: (i) growth in the total energy consumption (free and captive markets), which rose 5.2%, in the distribution segment; (ii) the 28.1% increase in energy sales and adjustment of energy sales contracts in the generation segment; (iii) and trading sales volume increase in 107.9%, in the commercialization segment.

Costs and Expenses

In 2Q10, the costs and expenses declined by 6.7%,compared to 2Q09, driven mainly by decrease of energy purchased and provisions in 5.2% and 56.3%. EBITDA EBITDA totaled R$ 391.2 million in 2Q10, 43.0% above 2Q09. This result can be explained by increase of net revenue in 1.9% and decrease of costs and operating expenses in 6.7%. The EBITDA margin was 27.9% compare to 20.0% in 2Q09. Net Income Light posted a net income of R$ 137.7 million in 2Q10, 196.3% above 2Q09, due to the combination of 43.0% increase in EBITDA and the lower payment of IR / CSSL in 6.9%, despite of decrease in R$ 36.4 million in the financial result. Capital Expenditures The Company invested R$249.0 million in 2Q10, R$98.4 million of which in the development of distribution and
203.9 17.4 1.9 11.8

CAPEX (R$ MM)


22.1%

249.0 43.1 11.7

0.7

transmission networks (new connections, capacity increases and repairs); R$37.4 million in quality improvements efforts; and and
Distribution 2Q09 Administration 2Q10 Generation Commercial. 172.8 193.5

preventive

maintenance

R$50.0 million in network protection,

electronic meters and fraud regularization. Generation investments totaled R$43.1 million, R$34.1 million of which refers to the new generation projects and R$25.9 million of this to the Paracambi SHP project In 2010 Light intends to invest R$706 million to be allocated as follows: R$513 million to distribution, R$117 million to generation (R$84 million of which to new projects) and R$76 million to administration and other businesses.

10

Generation Capacity Expansion Projects 2Q10 was marked by the following events related to projects for expanding Lights generating capacity: Construction of the Paracambi SHP, which began in November of 2009, is

well under way, with the signing of a BNDES financing contract expected in the second half of the year. Construction of New Feeder 1, part of the Lajes SHP water channeling

system, is under way and scheduled for completion in November 2010. The basic engineering project of the Itaocara hydroelectric project is from IBAMA, so that the Company can move ahead with the

currently being analyzed by ANEEL, and the environmental studies are awaiting approval environmental licensing process, which includes the holding of public hearings and the subsequent issue of preliminary and installation licenses, conditions that must be met before the project can be implemented; The two wind energy projects acquired at the beginning of the year, located

in Aracati (CE) and with total installed capacity of 31 MW, were registered with the EPE to take part in the Reserve and Alternative Sources energy auctions to be held on August 25 and 26. In addition to these projects, the Company is considering participating in

several other generation undertakings, aiming to increase its installed generating capacity. Corporate Governance and the Capital Markets On June 30, 2010, the capital stock of Light S.A. comprised 203,934,060 common shares with no par value.

11

The following chart represents Lights shareholding structure on the same date:
Controlling Shareholders 52,13%
CEMIG Companhia Energtica de MG
25,53%

Free Float 47,87%


RME Rio Minas Energia

AGC Andrade Gutierrez Concesses


0,53%

LEPSA LUCE Empreendimentos Participaes S.A.


13,03%

BNDESPAR

EDFI MINORITRIOS

13,03%

22,96 %

24,91 %

LIGHT S.A (Holding)

100% LIGHT Servios de Eletricidade S.A

100% LIGHT Energia S.A.

100% LIGHT ESCO Prestao de Servios S.A.

100% LIGHTGER S.A.

100% ITAOCARA Energia Ltda

100%

100%

100% INSTITUTO LIGHT

51% AXXIOM
Solues Tecnolgicas S.A.

LIGHTCOM LIGHTHIDRO Comercializ. Ltda de Energia S.A.

On April 1, 2010, Light S.A. paid dividends of R$432.3 million relative to the fiscal year 2009, equivalent to R$2.12 per share. The resolution on the payment of dividends was made at the Annual and Extraordinary Shareholders Meeting (AGOE) held from March 22 to March 24, 2010. The Companys Board of Directors meeting held on April 9, 2010: (i) ratified the names of the executive officers of Light S.A. and Light SESA, appointed by the AGOE; (ii) elected Mr. Srgio Alair Barroso as Chairman and Mr. Aldo Floris as ViceChairman of the Board of Directors of Light S.A. and Light S.E.S.A. On June 11, 2010, Light S.A. executed a Private Instrument of Onerous Assignment of Shares and Other Covenants, through which it acquired a total of three million, six hundred and seventy-two thousand (3,672,000) common shares issued by Axxiom Solues Tecnolgicas S.A. (Axxiom), a corporation headquartered in the city of Nova Lima, in the state of Minas Gerais, whose corporate purpose is to provide technology solutions and systems for the operational management of public
BOVESPA (spot market) - LIGT3 Daily Average Number of shares traded (Thousand) Number of Transactions Traded Volume (R$ Million) Quotation per shares: (Closing)* Share Valuing (Quarter) IEE Valuing (Quarter) Ibovespa Valuing (Quarter) *Ajusted by earnings 2Q10 689.08 1,521 $15.0 $21.02 -12.7% -0.6% -13.4% 1Q10 857.17 1,785 $21.8 $24.07 0.5% -0.4% 2.6% 2Q09 286.26 691 $6.9 $24.37 21.5% 22.1% 25.8%

utility concessionaires, including electric power companies. The shares acquired by the Company correspond to fifty-one percent (51%) of Axxioms capital stock. The

12

acquisition price was three million, nine hundred and seventy-five thousand, six hundred and thirty-six reais (R$3,975,636.00). Disclaimer
The information on the Companys operations and its Managements expectations regarding its future performance has not been revised by independent auditors. Forward-looking statements are subject to risks and uncertainties. These statements are based on the 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 those of the Company's Board of Directors and Officers. Reservations 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 may or may not occur. Future results and creation of value to shareholders might significantly differ from those 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.

Light x Ibovespa x IEE Base jan/09 = 100 until 07/30/2010

200 180 160 140 120 100 80 60 40

2009 IEE 59% IBOV 83% LIGT3 34%

2010 IEE IBOV LIGT3

2% -2% -8%

80% Ibovespa 63% IEE

23% Light

R$/share 02/01/09 30/07/10

19,25 22,00

De c0 Ja 8 n0 Fe 9 bM 09 ar -0 Ap 9 rM 09 ay -0 Ju 9 n0 Ju 9 l-0 Au 9 g0 Se 9 p0 O 9 ct -0 No 9 vDe 09 c0 Ja 9 nFe 1 0 b1 M 0 ar -1 Ap 0 rM 10 ay -1 Ju 0 n1 Ju 0 l-1 0

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APPENDIX I

Light in Figures
OPERATING INDICATORS N of Consumers (thousand) N of Employees Average provision tariff - R$/MWh Average provision tariff - R$/MWh (w/out taxes) Average energy purchase cost - R$/MWh Installed generation capacity (MW) Assured Energy (MW) Net Generation (GWh) Load Factor Includes purchase on spot 2Q10 4,028 3,730 408.2 277.6 98.7 855 537 1,301 64.2% 2Q09 3,956 3,734 411.9 282.9 110.2 855 537 1,309 65.7% Var. % 1.8% -0.1% -0.9% -1.9% -10.4% -0.6% -

14

Review report on Quarterly Information


(A free translation of the original report in Portuguese, as filed with the Brazilian Securities and Exchange Commission (CVM), prepared in accordance with the accounting practices adopted in Brazil, rules of the CVM and the International Financial Reporting Standards - IFRS)

To The Board of Directors and Shareholders of Light S.A. Rio de Janeiro - RJ 1. We have reviewed the accounting information included in the individual Quarterly Information - ITR
of Light S.A. (The Company), comprising the balance sheet and statements of operations, of changes in shareholders equity and of cash flows and the consolidated Quarterly Information of this Company and its subsidiaries, comprising the consolidated balance sheet and the consolidated statements of operations, of changes in shareholders equity and of cash flows, both referring to the quarter ended June 30, 2010, which includes the explanatory notes and the performance report, which are the responsibility of its management.

2. Our review was performed in accordance with the review standards established by IBRACON - The
Brazilian Institute of Independent Auditors and the Federal Accounting Council - CFC, which comprised, mainly: (a) inquiry and discussion with the management responsible for the accounting, financial and operational areas of the Company and its subsidiaries, regarding the main criteria adopted in the preparation of the Quarterly Information; and (b) review of the information and subsequent events, which have, or may have, a material effect on the financial and operational position of the Company and its subsidiaries.

3. Based on our review, we are not aware of any material change that should be made to the accounting
information contained in the individual Quarterly Information of Light S.A. referred to above, for them to be in accordance with accounting rules adopted in Brazil, notably the technical pronouncement CPC 21 - Interim Financial Reporting and rules issued by the Brazilian Securities and Exchange Commission - CVM applicable to the preparation of the Quarterly Information.

4. Based on our review we are not aware of any material change that should be made to the accounting
information contained in the consolidated Quarterly Information of Light S.A. and its subsidiaries referred to above, for them to be in accordance with the International Financial Reporting Standards IFRS, notably the standard IAS 34 - Interim Financial Reporting, issued by International Accounting Standards Board (IASB), and rules issued by the Brazilian Securities and Exchange Commission CVM, applicable to the preparation of the Quarterly Information.

5. As mentioned in explanatory note 2, during the year 2009, CVM approved several Pronouncements,
Interpretations and Technical Orientations issued by the Accounting Pronouncements Committee CPC which are effective for 2010, and changed the accounting practices adopted in Brazil. These changes were adopted by the Company and its subsidiaries in the preparation of the individual Quarterly Information of the Company for the quarter ended June 30, 2010 and disclosed in explanatory note 2. The individual Quarterly Information are being restated and, therefore, are different from those originally stated by the Company, including our review report, dated August 4, 2010. The individual Quarterly Information related to the year and period of 2009, presented for comparison purposes, were adjusted to include the changes in accounting practices adopted in Brazil in force for 2010.

6. As mentioned in explanatory note 2, the Company and its subsidiaries started to present from 2010
on, consolidated Quarterly Information in accordance with International Financial Reporting Standards - IFRS, notably the standard IAS 34 - Interim Financial Reporting, issued by the IASB. The consolidated Quarterly Information of the Company and its subsidiaries related to the year and period ended 2009, prepared in accordance with the mentioned International Accounting Standards,

15

are being presented for comparison purposes.

7. Our review was performed to issue a report on the review of the accounting information included in
the individual Quarterly Information of this Company as mentioned in the first paragraph, taken as a whole. The individual and consolidated Statements of Value Added (DVA), required by Brazilian corporate law, are not required by the International Accounting Standards issued by the IASB and are being presented for purposes of additional analysis. This supplementary information has been submitted to the same review procedures applied to the accounting information included in the Quarterly Information of the Company, and based on our review, we are not aware of any material changes that should be made for it to be in accordance with the accounting information included in the Quarterly Information mentioned in the first paragraph, taken as a whole. Rio de Janeiro, May 13, 2011

KPMG Auditores Independentes


CRC SP-014428/O-6 F-RJ Original in Portuguese signed by Vnia Andrade de Souza
Accountant CRC RJ-057497/O-2

16

LIGHT S.A.
BALANCE SHEETS (In thousands of reais)

Notes ASSETS Cash and cash equivalents Marketable Securities Consumers, concessionaires and permissionaires Taxes and contributions Inventories Receivables from swap transactions Receivables from services provided Prepaid expenses Other receivables TOTAL CURRENT ASSETS Consumers, concessionaires and permissionaires Taxes and contributions Deferred taxes Concession financial assets Receivables from swap transactions Escrow deposits Prepaid expenses Other receivables Investments Property, plant and equipment Intangible assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS 6 7 8 9 31 4 5 6 7 31

Parent Company 6/30/2010 12/31/2009 3,787 885 63 2,078 6,813 14,584 774 175 175,913 191,446

6/30/2010

Consolidated 12/31/2009 760,313 68,059 1,355,854 442,668 14,369 4 46,015 2,381 97,250 2,786,913 297,798 40,767 1,115,546 354,784 200,520 1,658 8,725 20,388 1,600,568 3,422,980 7,063,734 9,850,647

11

723,938 5,735 1,252,743 304,514 20,174 75,522 5,018 100,054 2,487,698 282,850

180

152

57,908
987,619 369,973 45 208,280 968 7,865 22,710 1,618,523 3,510,789 7,067,530 9,555,228

11 12 13 14

3,609,401 741 3,610,322 3,617,135

3,513,147 678 3,513,977 3,705,423

The notes are an integral part of the quarterly information

17

LIGHT S.A.
BALANCE SHEETS (In thousands of reais)

Notes LIABILITIES Suppliers Taxes and contributions Loans, financing and financial charges Debentures and financial charges Dividends payable Estimated liabilities Sector charges - Consumer contributions Contingencies Post-employment benefits Other liabilities TOTAL CURRENT LIABILITIES Loans, financing and financial charges Debentures and financial charges Taxes and contributions Deferred taxes Contingencies Post-employment benefits Debts with related parties Other liabilities TOTAL NON-CURRENT LIABILITIES SHAREHOLDERS' EQUITY Capital stock Capital reserves Recognized granted options Treasury shares Profits Reserve Legal reserve Profit retention Proposed additional dividends Equit valuation adjustments Retained earnings/accumulated losses TOTAL SHAREHOLDERS' EQUITY TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 24

Parent Company 6/30/2010 12/31/2009

Consolidated 6/30/2010 12/31/2009

15 7 16 17

18 20 21 22

129 10 128 1,745 2,012 -

6,348 53 143,647 223 1,524 151,795 -

493,791 207,649 230,072 386,713 46,146 120,142 93,590 220,638 1,798,741 1,082,442 835,612 174,013 329,834 633,278 878,159 60 207,966 4,141,364

564,181 285,180 197,150 96,412 143,647 52,374 110,791 95,044 236,028 1,780,807 1,006,204 1,165,759 303,585 301,230 669,353 861,386 208,695 4,516,212

2,225,822 133,999 514,990 506,352 233,960 3,615,123 3,617,135

2,225,822 34,406 (6,361) 133,999 499,188 288,693 518,761 (140,880) 3,553,628 3,705,423

2,225,822 133,999 514,990 506,352 233,960 3,615,123 9,555,228

2,225,822 34,406 (6,361) 133,999 499,188 288,693 518,761 (140,880) 3,553,628 9,850,647

The notes are an integral part of the quarterly information

18

L IG H T S.A . IN C O M E ST A T E M E N T FO R T H E P ER IO D S E N D E D JU N E 3 0

N otes N ET O P E R A T IN G R E V E N U E C O ST O F O PE R A T IO N S G R O S S P R O F IT O P ER A T IN G E X P EN SE S S elling exp enses G en eral and adm inistrativ e exp enses O ther rev enue s/e xp ense s O P ER A T IN G IN C O M E F IN A N C IA L IN C O M E R evenue s E xp enses E Q U IT Y IN T H E E A R N IN G S O F SU B SID IA R IE S IN C O M E B E F O R E IN C O M E T A X A N D S O C IA L C O N T R IB U T IO N C urrent incom e a nd socia l c ontrib ution tax es D eferred incom e an d social co ntrib ution taxes 8 8 30 28 26 28

4/01 /2 01 0 to 6/30 /20 10 (1,34 4) (1,34 4) (1,34 4) 181 183 (2) 13 8,81 5

P a ren t C omp an y 1 /01/2010 to 4/0 1/2 009 to 6/3 0/2 010 6/30 /20 09 (3,5 27 ) (3,5 27 ) (3,5 27 ) 3 70 3 70 3 65,5 88 (1 1,62 5) (1 1,62 5) (1 1,62 5) 50 26 8 (21 8) 58,03 5

1 /01/2 009 to 6 /3 0/20 09 (22 ,4 73 ) (22 ,4 73 ) (22 ,4 73 ) 8 62 1 ,103 (241 ) 262 ,1 57

4 /01 /201 0 to 6/30 /2 01 0 1 ,5 12,7 3 1 (1 ,0 83 ,44 6) 4 29 ,28 5 (1 2 6,117) (9 8,33 9) (3 8,61 7) 10 ,8 39 3 03 ,16 8 (3 2,19 4) 51 ,7 36 (8 3,93 0) -

C on so lid ated 1/0 1/2 010 to 4 /01 /2 0 09 to 6 /30 /2 010 6 /3 0/20 09 3 ,22 1,58 5 (2 ,2 04,91 7) 1 ,01 6,66 8 (32 2,18 3) (18 5,01 2) (14 7,76 6) 10,595 6 94,48 5 (13 0,04 0) 96,166 (22 6,20 6) 1,484 ,2 48 (1,13 0 ,155 ) 35 4 ,0 93 (168 ,5 53 ) (8 6,6 30 ) (7 9,5 39 ) (2 ,3 84) 18 5 ,5 40 4 ,1 83 3 8 ,486 (3 4,3 03 ) -

1/0 1/20 09 to 6/30 /2 00 9 3 ,1 25 ,964 (2,3 04 ,6 30 ) 8 21 ,3 34 (321 ,7 99) (164 ,0 63) (160 ,6 33) 2,8 97 4 99 ,5 35 (24 ,071 ) 79,5 27 (103 ,5 98) -

13 7,65 2 -

3 62,4 31 -

46,46 0 -

240 ,5 46 -

2 70 ,97 4 (6 7,03 8) (6 6,28 4)

5 64,44 5 (11 6,45 4) (8 5,56 0 )

18 9 ,7 23 (7 3,9 53 ) (6 9,3 10 )

4 75 ,4 64 (107 ,5 78) (127 ,3 40)

N ET IN C O M E F O R T H E PE R IO D T he no te s a re a n integ ra l p ar t o f the q ua rterly informa tion

13 7,65 2

3 62,4 31

46,46 0

240 ,5 46

1 37 ,65 2

3 62,43 1

4 6 ,460

2 40 ,5 46

L I G H T S .A . S T A T E M E N T O F C H A N G E S IN S H A R E H O L D E R S ' E Q U IT Y PE R IO D E N D ED JU N E 30 ( I n t h o u sa n d s o f r e a is ) P R O F IT R E S E R V E S PRO PO SED A D D IT I O N A L A D IV ID E N D S 2 8 8 ,6 9 3 (2 8 8 ,6 9 3 ) R E T A IN E D E Q U IT Y E A R N IN G S / V A L U A T I O N (A C C U M U L A T E D ) O T A L T A D JU ST M E N T S L O SSE S 5 1 8 ,7 6 1 ( 1 4 0 ,8 8 0 ) 3 ,5 5 3 ,6 2 8 (1 2 ,4 0 9 ) 5 0 6 ,3 5 2 1 2 ,4 0 9 3 6 2 ,4 3 1 2 3 3 ,9 6 0 ( 1 2 ,2 4 3 ) (2 8 8 ,6 9 3 ) 3 6 2 ,4 3 1 3 ,6 1 5 ,1 2 3

B A L A N C E O N 1 2 /3 1 /0 9 R e a liz a tio n o f e q u ity v a lu a tio n a d j u s tm e n t L o s s a b s o rp tio n a d ju s tm e n t to 1 st tim e a d o p tio n o f I F R S R e c o g n iz e d g r a n te d o p tio n s D e r e c o g n itio n o f tr e a s u r y s h a re s T r a n s fe r o f u n e x e r c is e d o p tio n s T r e a su r y s h a re s D iv id e n d s p a id - p ro fits re s e r v e P a y m e n t o f a d d itio n a l p r o p o s e d d iv id e n d s N e t In c o m e fo r th e p e rio d A llo c a tio n o f n e t in c o m e f o r th e p e rio d : L ega l reserv e P r o p o s e d d iv id e n d s A d d itio n a l p ro p o se d d iv id e n d s P r o fit re te n tio n re s e r v e B A L A N C E O N 6 /3 0 /1 0

C A P ITA L C A P IT A L STO C K R ESER VES 2 ,2 2 5 ,8 2 2 3 4 ,4 0 6 2 ,2 2 5 ,8 2 2 (1 2 ,2 4 3 ) (6 ,3 6 1 ) (1 5 ,8 0 2 ) 0

TR EASU R Y LEG A L SH A R ES R E SE R V E ( 6 ,3 6 1 ) 1 3 3 ,9 9 9 6 ,3 6 1 0 1 3 3 ,9 9 9

R E TA IN ED E A R N IN G S 4 9 9 ,1 8 8 1 5 ,8 0 2 5 1 4 ,9 9 0

T h e n o t e s a r e a n in te g r a l p a r t o f t h e q u a r t e r ly in fo r m a tio n

19

LIGHT S.A. CASH FLOW STATEMENTS FOR THE PERIODS ENDED JUNE 30 ( In thousands of reais )
Parent Company 1/01/2010 to 6/30/2010 1/01/2009 to 6/30/2009 Cash flow tax operating activities
Income from before income tax and social contribution

Consolidated 1/01/2010 to 6/30/2010 1/01/2009 to 6/30/2009 564,445 475,464

362,431

240,546

Adjustments of expenses (revenues) not affecting cash Allowance for doubtful accounts Depreciation and amortization Loss (gain) from the sale of intangible assets / Residual value of derecognized property, plant and equipment Exchange losses (gains) from financial activities Restatement of contingencies Adjustment of receivables to present value Interest expenses on loans Charges and monetary variation on post-employment liabilities Provision for / (Reversal of ) liabilities - contingencies Options granted Equity income (Increase)/reduction in Assets Marketable Securities Consumers, concessionaires and permissionaires Dividends received Taxes and contributions Inventories Services Prepaid expenses Escrow deposits Other Increase/(reduction) in liabilities Suppliers Estimated liabilities Taxes and contributions Sector charges - Consumer Contributions Contingencies Post-employment benefits Other liabilities Interests paid Income tax and social contribution paid Net cash from operating activities Cash flow from investment activities Share acquisition Receivables related to shares Receivables from the sale of property, plant and equipment Acquisition of property, plant and equipment Acquisition of intangible assets Consumer contributions Acquisition of financial assets (concession) Additions to/acquisition of investment Shareholding Net cash used in investment activities Cash flow from financing activities Dividends and interest on equity paid Loans and financing Amortization of loans and financing Net cash used in financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at close of period Changes in cash and cash equivalents

(365,588)

20,043 (262,157)

138,793 173,714 (10,605) (1,272) 22,816 (8,057) 127,897 60,576 542 -

126,708 171,756 (2,788) (58,634) 30,647 (11,419) 142,913 (20,488) 23,543 20,045 -

461,486 (111) 112 (28) 18,134

407,868 (376) 88 (30) 31

62,324 (12,677) 132,132 (5,805) (29,507) (1,947) (7,760) (18,965)

(12,122) (115,556) 227,638 (14,431) 9,206 (3,266) (14,375) 64,545

(6,219) (95) (43) 1,323 471,402

(213) 126 32 144 406,102

(70,390) (6,228) (178,499) 9,351 (59,433) (45,257) (15,634) (97,166) (85,206) 638,182

(17,199) (6,541) (211,687) (15,863) (38,171) (5,555) (41,399) (105,233) (57,489) 540,249

(45,352) 33,115 (37,622) (49,859)

1,530 (36,388) (34,858)

(45,358) 51,749 13,562 (59,679) (228,289) (9,656) (3,976) (281,647)

6,927 (16,987) (195,805) (26,693) (232,558)

(432,340) (432,340) (10,797) 14,584 3,787 (10,797) -

(407,868) (407,868) (36,624) 40,256 3,632 (36,624) -

(432,340) 881,879 (842,449) (392,910) (36,375) 760,313 723,938 (36,375) -

(407,868) 123,940 (56,374) (340,302) (32,611) 548,983 516,372 (32,611) -

The notes are an integral part of the quarterly information

20

TABLE OF CONTENTS 1. OPERATIONS 2. PRESENTATION OF THE QUARTERLY FINANCIAL INFORMATION 3. INITIAL ADOPTION OF IFRS 4. SUMMARY OF ACCOUNTING PRACTICES CASH AND CASH EQUIVALENTS MARKETABLE SECURITIES 5. CONSUMERS, CONCESSIONAIRES AND PERMISSIONAIRES (CLIENTS) 6. TAXES AND CONTRIBUTIONS 7. DEFERRED TAXES 8. CONCESSION FINANCIAL ASSETS 9. OTHER RECEIVABLES 10. INVESTMENTS 11. PROPERTY, PLANT AND EQUIPMENT 12. INTANGIBLE ASSETS 13. SUPPLIERS 14. LOANS, FINANCING AND FINANCIAL CHARGES 15. DEBENTURES AND FINANCIAL CHARGES 16. REGULATORY CHARGES 17. CONTINGENCIES 18. POST-EMPLOYMENT BENEFITS 19. OTHER PAYABLES 20. RELATED-PARTY TRANSACTIONS 21. SHAREHOLDERS EQUITY 22. EARNINGS PER SHARE 23. NET OPERATING REVENUE BREAKDOWN 24. ELECTRIC POWER SUPPLY 25. OPERATING COSTS AND EXPENSES 26. ELECTRIC POWER PURCHASED FOR RESALE FINANCIAL INCOME 27. FINANCIAL INSTRUMENTS 28. INSURANCE 29. INFORMATION BY SEGMENT 30. LONG-TERM INCENTIVE PLAN 31. STATEMENT OF VALUE ADDED 32. SUBSEQUENT EVENTS

21

OPERATIONS Light S.A. is a publicly-held company, organized and domiciled in Rio de Janeiro, Brazil. Its headquarters are located at Avenida Marechal Floriano, Rio de Janeiro. The corporate purpose of Light S.A. is to hold equity interests in other companies, as partner or shareholder, and is involved in the direct or indirect exploitation, as applicable, of electric power services, including electric power generation, transmission, sale and distribution systems, as well as other related services. The Company is listed in the New Market (Novo Mercado) of the So Paulo Stock Exchange (BM&F Bovespa under LIGT3). Light S.A. is a parent company of the following companies: Light Servios de Eletricidade S.A. (Light Sesa) - Publicly-held corporation engaged in the distribution of electric power; Light Energia S.A. - (Light Energia) Closely-held corporation whose main activity is to study, plan, construct, operate and exploit systems of electric power generation, transmission and sales, and related services; Light Esco Prestao de Servios S.A. - (Light Esco) A closely-held company whose purpose is purchase, sale, import and export of energy and advisory services in general in the energy free and regulated markets. Lightcom Comercializadora de Energia S.A. (Lightcom) A closely-held company whose purpose is the purchase, sale, import and export of energy and advisory services in general in the energy free and regulated markets. Itaocara Energia Ltda. - (Itaocara Energia) Company in the pre-operating stage, primarily engaged in the preparation of projects, construction, installation, operation and exploration of plants to generate electrical power. Light Solues em Eletricidade Ltda. former Lighthidro Ltda. (Light Hidro) now has the new corporate name in accordance with new articles of association dated January 27, 2011 and its main purpose to provide services to low voltage clients, including assembly, restoration and maintenance in general. Instituto Light para o Desenvolvimento Urbano e Social (Light Institute) Nonprofit private entity is engaged in participating in social and cultural projects, with interest in the cities economic and social development, affirming the Companys ability to be socially responsible. Light S.A. jointly-control the subsidiaries: Lightger S.A. (Light Ger) - Company in the pre-operating stage that participate in auctions for concession, authorization and permission for new plants. On December 24, 2008,

22

Light Ger obtained the installation license that authorizes the start of implementation works of Paracambi small hydroelectric power plant (PCH). Axxiom Solues Tecnolgicas S.A. (Axxiom) Privately-held company, whose purpose is providing technological solutions and operational management systems to public concessionaires, including electricity, gas, water and sewage companies and other utility companies. Jointly-controlled by Light S.A. (51%) and Companhia Energtica de Minas Gerais CEMIG (49%). Lights interest was acquired in June 2010. Grupo Lights concessions and authorizations:
Concessions / Authorizations Generation, transmission and distribution PCH Paracambi Itaocara Hydroelectric Power Plant Date of Concession / Authorization Jul/1111 Feb/1111 Mar/1111 Maturity Date Jun/1111 Feb/2222 Mar/1111

PRESENTATION OF THE QUARTERLY FINANCIAL INFORMATION Consolidated Quarterly Financial Information The consolidated financial quarterly information was prepared according to the International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) and also according to accounting practices adopted in Brazil (BR GAAP). Individual Quarterly Financial Information The individual quarterly financial information is presented according to the accounting practices adopted in Brazil, in compliance with the provisions of the Corporation Law, and comprise the changes introduced by Laws no. 11,638/07 and 11,941/09, complemented by new pronouncements, interpretations and guidance from CPC, issued in 2009 and 2010, approved by CFC Resolutions, and in accordance with CVM rules. The Company did not calculate comprehensive income, which is the reason why it is not presenting the Comprehensive Income Statement. Quarterly Financial Information 2010 and Financial Statements 2009 Until December 31st, 2009, the Company presented its individual and consolidated financial statements according to the accounting standards adopted in Brazil, which comprised the changes introduced by the Laws no. 11,638/07 and 11,941/09 (Provisional Measure n 449/2008 - MP no. 449/2008), complemented by the pronouncements of the Accounting Pronouncements Committee CPC, approved by resolutions of the Federal Accounting Council CFC and rules of the Securities Commission CVM until December 31, 2008.

23

As established in the CVM Deliberation no. 609/2009 (CPC 37 Initial Adoption of International Accounting Standards), the international Standards were retroactively implemented at January 1st, 2009. Therefore, the financial statements and quarterly financial information originally disclosed were adjusted and are presented according to the international accounting Standards and practices adopted in Brazil. The authorization to conclude this quarterly financial information was given by the Companys Management at May 13, 2011. Basis of measurement The financial statements were prepared based at historical cost, except for the financial instruments measured by fair value through profit and loss; defined benefit actuarial asset, which is recognized as the net total of plan assets, adding the unrecognized past service cost and unrecognized actuarial losses, deducing the unrecognized actuarial gains and the present value of the defined benefit liability; and fixed assets of the generation plants, measured at fair value as deemed cost. Functional currency and presentation currency This individual and consolidated Quarterly Financial Information is stated in Brazilian Reais, which is the Companys functional currency. All financial information presented in Brazilian Reais was rounded to the nearest thousand, except when otherwise indicated. Use of estimates and judgment The preparation of the financial statements according to the IFRS and CPC standards demand the Management to make certain judgments, estimates and premises that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from these estimates. Estimates and premises are continuously reviewed. Reviews regarding accounting estimates are recognized in the period when the estimates are effectively reviewed and in any affected future periods. Information about premises and estimates that may result in adjustments within the next financial year are included in the following Notes: Note 09 Deferred Taxes Note 19 Contingencies Note 20 Post Employment Benefits Note 26 Net operating revenue breakdown Consolidated Group The consolidated financial statements include those of Light S.A., its direct subsidiaries and entities under common control, listed as follows:

24

Interest %

Light Servios de Eletricidade S.A. Light Energia S.A Light Esco Prestao de Servios S.A. Lightcom Comercializadora de Energia S.A Light Hidro Ltda. Instituto Light para o Desenvolvimento Urbano e Social Itaocara Energia Ltda. Lightger S.A. Axxiom Solues Tecnolgicas S.A.

11 1 11 1 11 1 11 1 11 1 11 1 11 1 11 1 1 1

INITIAL ADOPTION OF IFRS The approval of the Laws no. 11,638/07 and 11,941/09 started for publicly-held companies the process of converging with international accounting standards, through issuance, by CPC, and approval by Brazilian accounting regulating bodies, of several accounting pronouncements, interpretations and guidelines, in two steps: the first step, developed and applied in 2008, with the adoption of the technical pronouncements CPC 00 to 14 (the latter revoked since 2010) and the second step, with issuance, in 2009, of the technical pronouncements CPC 15 to 43 (except for CPC 34), with mandatory adoption in 2010, with retroactive effects to 2009 for comparability purposes. The Company published on March 31, 2011, the individual and consolidated financial statements referring to December 31, 2010, which include a detailed description of exemptions adopted and exceptions used, the opening balance sheet on January 1, 2009, the closing balance sheet on December 31, 2009 and the income statement for the year ended December 31, 2009. Said individual financial statements also include effects on income and shareholders equity of the quarters ended on 3/31/2009, 6/30/2009, 9/30/2009, 3/31/2010, 6/30/2010 and 9/30/2010 resulting from full adoption of the rules of 2010. In compliance with CVM Deliberation no. 656, of January 25th, 2011, the Company presents below the effects in the income statement and in shareholders equity, in the quarters ended in 6/30/2009 and 6/30/2010, arising from full adoption of the 2010 standards.

25

Parent Company 6/30/2010 Shareholders Equity Balance before the adoption of the new practices Adjustments and reclassifications: Pre-operational expenses Investment Regulatory assets and liabilities Fair value as deemed cost Equity Method Deferred income tax and social contribution Deferred taxes Other adjustments 3,093,636 Net Income 218,825 6/30/2009 Shareholders Equity 3,113,477 Net Income 289,725 6/30/2010 Shareholders Equity 3,093,636

Consolidated 6/30/2009 Shareholders Equity 3,113,477 Net Income 289,725

Net Income 218,825

521,488 521,488 3,615,124

143,607 143,607 362,432

344,729 344,729 3,458,206

(49,179) (49,179) 240,546

(8,696) 31,792 767,199 (271,657) 2,850 521,488 3,615,124

(330) 236,887 (18,801) (74,149) 143,607 362,432

(7,924) (277,548) 809,416 (180,835) 1,620 344,729 3,458,206

(468) 127,059 (21,376) (35,932) (118,462) (49,179) 240,546

Balance after the adoption of the new practises

SUMMARY OF ACCOUNTING PRACTICES The accounting policies applied are in compliance with policies described in our financial statements in BR GAAP for the year ended December 31, 2010 and have been applied consistently to all periods presented in these financial statements. Several IFRS rules, amendments to rules and interpretations issued by IASB are not yet in force in the year ended in January 1st, 2010, such as: Improvements to IFRS 2010. IFRS 9 Financial Instruments. Prepayment of a minimum fund requirement (Amendment to IFRIC 14). Amendments to IAS 32 Classification of rights issues.

CPC did not issued yet pronouncements equivalent to the IFRSs mentioned above, but there are expectations that it does before the required date to become in force. Anticipated adoption of IFRSs pronouncements is conditioned to previous approval in normative act by CVM Brazilian Securities and Exchange Commission. Since it did not adopt these standards in anticipation, the Company has not yet appraised the potential effects of them in its financial statements. CASH AND CASH EQUIVALENTS
Parent Company 6/30/2010 12/31/2009 Cash Financial investments of immediate liquidity Certificate of deposit (CDB) Total 242 3,545 3,787 2,557 12,027 14,584 Consolidated 6/30/2010 12/31/2009 15,077 708,861 723,938 27,139 733,174 760,313

Parent Company 6/30/2010 31/12/2009 Financial investment: CDB Total Rate CDI Maturity Daily

Consolidated 6/30/2010 31/12/2009

3,545 3,545

12,027 12,027

708,861 708,861

733,174 733,174

Financial investments are represented by transactions purchased from organizations trading in the domestic financial market, at arm-length's terms and rates. These investments are highly liquid, have a daily repurchase commitment by the counterparty

26

financial institution (the repurchase rate is previously agreed upon by the parties), involve low credit exposures, and yield according to the variation of the interbank deposit rate (CDI), without any loss in the earnings if early redeemed. MARKETABLE SECURITIES These papers involve bank deposit certificates (CDB) in the amount of R$5,735 (R$68,059 on December 31, 2009) forming the underlying assets of certain surety bonds pledged in power auctions, and also other proceeds from the sale of assets that were held for re-investment in the electric grid system or have maturities of 3 months or longer. CONSUMERS, CONCESSIONAIRES AND PERMISSIONAIRIES (CLIENTS)
Consolidated 6/30/2010 12/31/2009 CURRENT Billed sales Unbilled sales Debt payment by installments (a) Other accounts receib 1,758,620 231,212 156,800 653 2,147,285 11,409 49,219 60,628 (955,170) 1,252,743 1,678,167 286,170 153,421 2,117,758 1,001 54,946 55,947 (817,851) 1,355,854

Sales within the scope of CCEE Supply and charges related to the use of electric network

(-) Allowance for doubtful accounts (b)

NON-CURRENT Debt payment by installments (a) Other receivables

281,883 967 282,850

297,798 297,798

a) The balances of debt repayment facilities were adjusted to their present value, as applicable, pursuant to Law No. 11,638/07. The present value is determined for each relevant consumer debt renegotiation (debt repayment facilities) based on such interest rate as will reflect the term and risk associated with each individual transaction, on average 1% per month. Balance includes the installment agreements present value, including options of early payment of installments, which if they are exercised ensure payment discounts to clients. During 2010, total discounts that may be exercised is approximately R$36,501 and the discount, if this option is exercised shall be recorded in the income statement, under financial expenses. b) In the second quarter of 2010 bad debts of R$728 were written-off. An allowance for doubtful accounts was set up based on certain premises and in an amount deemed sufficient to meet any asset realization losses, in accordance with the ANEEL guidelines summarized as follows:

27

Customers with significant debts (large accounts): - Outstanding balances of customer accounts are reviewed on a case-by-case basis and per consumer class. In all other instances: - Residential consumers over 90 days past due. - Commercial consumers over 180 days past due. - Industrial, rural, government, public lighting, utility, and other accounts over 360 days past due. Overdue and falling due balances related to electric power billed sales and debt payment by installments are distributed as follows:
Billed sales and renegotiated debts Residential Industrial Commercial Rural Public sector Public lighting Public utility Total - current and non-current Maturing balance 189,305 24,104 120,980 542 35,142 12,968 262,714 645,756 Matured balances Overdue up to Overdue over 90 days 90 days 160,904 14,814 41,010 354 19,821 2,186 1,107 240,195 702,096 149,181 303,098 645 115,288 32,238 8,807 1,311,352 TOTAL 6/30/2010 1,052,305 188,099 465,088 1,541 170,251 47,391 272,628 2,197,303 12/31/2009 1,053,757 216,120 377,087 1,437 160,921 41,045 279,019 2,129,386 Allowance for bad debts 6/30/2010 (680,369) (43,123) (223,772) (552) (4,985) (1,764) (605) (955,170) 12/31/2009 (616,265) (28,986) (167,098) (388) (4,300) (808) (6) (817,851)

TAXES AND CONTRIBUTIONS


Parent Company Assets Liabilities 6/30/2010 12/31/2009 6/30/2010 12/31/2009 CURRENT Tax credits IRPJ and CSLL (a) Prepaid IRPJ/CSLL Other TOTAL 885 885 703 71 774 10 10 53 53

Consolidated Assets 6/30/2010 12/31/2009 CURRENT Tax credits IRPJ and CSLL (a) IRRF (Withholding Income Tax) recoverable IRRF (Withholding Income Tax) payable ICMS recoverable ICMS payable Installment Payments - Law 11,941/09 (b) PIS/COFINS recoverable (d) PIS/COFINS payable Prepaid IRPJ/CSLL Provision for IRPJ/CSLL Other TOTAL NON-CURRENT Installment Payment - PAES Installment Payment - Law 11,941/09 (b) ICMS recoverable (d) TOTAL 79,199 121,613 5,700 65,817 32,185 304,514 102,073 11,522 109,704 6,634 181,364 31,371 442,668 6/30/2010 Liabilities 12/31/2009 2 5,561 21,684 57,420 188,835 11,678 285,180

362 11,716 20,244 48,772 116,914 9,641 207,649

57,908 57,908

40,767 40,767

174,013 174,013

303,585 303,585

28

)a The balance refers to negative balance tax credits recoverable arising from withholdings of cash investments and government agencies in the amount of R$5,737 and prepaid Income Tax and Social Contribution credits for 2008 and 2009 amounting to R$73,462. The variation of the amounts for the quarter is obtained by the adjustment based on the Selic rate in the amount of R$20,099, including new credits in the amount of R$144,766, net of offsets in the year, amounting to R$187,739. )b New REFIS (Tax Recovery Program) - (Law 11,941/09) Light has been making monthly minimum payments of one hundred reais as provided for by laws, plus payment of installments deriving from migration of PAES (Special Installment Payment Program) - Social Security (REFIS II), in the monthly consolidated amount of R$1,752. Considering that the request to partially discontinue writ of mandamus no. 2003.51.01.005514-8, especially concerning the taxation thesis (Cash Basis x Accrual Basis) of the companies LIR and LOI was not accepted by the National Treasury, nor its argument is valid, the Company chose to waive said lawsuit. Therefore, the Company recalculated the earnings abroad by the equity method of accounting from 2002 to 2007 (REFIS period), on the accrual method of accounting, using the accumulated tax loss balance for this period to settle income and social contribution taxes levied on this income. Consequently, the REFIS balance variation in the quarter is due to the exclusion of the amount previously included in the REFIS related to the debit of earnings abroad, in the restated amount of R$133,761, in addition to the amount paid to PAES Social Security previously mentioned. )c Recoverable PIS (Social Contribution Tax on Gross Revenue for Social Integration Program) and COFINS (Social Contribution Tax on Gross Revenue for Social Security Financing) balance refers to contributions retained by public authorities and services rendering. )d The amount of the state VAT (ICMS) recovery on June 30, 2010 includes R$17,118 (R$25,671 on March 31, 2010) of credits deriving from the renegotiations of the CEDAE debt in July and December 2006.

29

DEFERRED TAXES
Consolidated 6/30/2010 12/31/2009 Deferred Deferred Tax Base tax Tax Base tax

ASSETS Incom Tax e Tax Losses Tem porary Differences Social Contribution Negative Base Tem porary Differences Total

947,453 1,944,389

236,863 486,097

1,385,458 1,917,214

346,365 479,304

996,261 1,944,389

89,663 174,995 987,619

1,303,657 1,917,214

117,329 172,549 1,115,546

LIABILITIES Incom Tax e Tem porary Differences Social Contribution Tem porary Differences

Consolidated 6/30/2010 12/31/2009 Deferred Deferred Tax Base tax Tax Base tax

970,101

242,525

885,972

221,493

970,101

87,309

885,972

79,737

Total

329,834

301,230

The recording of tax credits includes the recoverable amount in up to 10 years, as provided for by CVM Rule 371/02 and in the assumptions of that credit cannot be barred, and it is based on a feasibility study approved by the Board of Directors, which shows the balance recovery in up to 4 years.

30

The interim difference taxable basis breakdown is as follows:


Consolidated 6/30/2010 IR ASSETS Allowance for doubtful debtors Provision for profit sharing Provision for labor contingencies Provision for tax contingencies Provision for civil contingencies Impacts resulting from the adoption of the new CPCs Other provisions TOTAL - ASSETS LIABILITIES Deemed cost - Light Energia Other provisions 947,220 15,863 162,160 192,936 251,392 212,195 162,623 1,944,389 CSLL 947,220 15,863 162,160 192,936 251,392 212,195 162,623 1,944,389 IR 808,427 26,223 256,734 163,654 179,490 357,602 125,084 1,917,214 12/31/2009 CSLL 808,427 26,223 256,734 163,654 179,490 357,602 125,084 1,917,214

767,320 202,781 970,101

767,320 202,781 970,101

786,000 99,972 885,972

786,000 99,972 885,972

Reconciliation of effective and nominal rates of the provision for income and social contribution taxes:
Consolidated 6/30/2010 6/30/2009 564,445 475,464 34% 34% (191,911) (161,658) (14,070) (4,415) 31,956 (62,051) (27,604) (1,121) (7,347) 670 517 66 36 (202,014) (234,918) (116,454) (85,560) (202,014) (107,578) (127,340) (234,918)

Earnings before Income and Social Contribution Taxes (LAIR) Combined income and social contribution tax rate Income and social contribution taxes at statutory rates Income and social contribution tax effect on permanent additions and exclusions Income and social contribution tax effect on equity in the earnings of subsidiaries Effect of offshore income and social contribution taxation Deferred tax credits not recognized CVM 371/02 - Light S.A. Tax incentives Others Income tax and social contribution on income Current income tax and social contribution on income Deferred income tax and social contribution on income

CONCESSION FINANCIAL ASSETS Owing to its utility nature, distribution of electric power is governed by certain Utility Concession Agreements and any subsequent amendments thereto, entered into by the Union (Granting Authority - Grantor) and the subsidiary Light Servios de Eletricidade S.A. (Operator). These agreements generally contain provisions governing matters such as follows:

31

Which services the Operator must provide and to whom (i.e. consumer classes) such services must be provided. These concession agreements contain a service level clause or provisions establishing performance standards applicable to utility services, usually addressing quality maintenance and improvement in connection with any services provided to the public. Additionally, the Operator is required, upon expiration of the concession, to return infrastructure assets in the same operating conditions as they were handed over when the agreement was executed. In order to satisfy and meet these obligations, investments are made on an ongoing basis over the term of the concession. Therefore, some assets associated with the concession contract may be replaced a number of times before the concession expires. Once the concession expires, infrastructure assets are "reverted" (i.e. returned) to the granting authority upon payment of certain compensation. Concession prices are fixed through a rate methodology set forth in each concession agreement that is based on a parametric formula (Portions A and B), and includes a review mechanism to ensure that the restated/escalated rates will be sufficient to cover any costs, repay investments made and provide return on the capital invested. Based on the features of the electric power distribution agreement of the subsidiary, management is of the opinion that the requirements for application of Accounting Interpretation ICPC 01 - Concession Contracts, which interpretation provides guidelines addressing how to account for concession of utility services to private operators, have been successfully met in order to reflect the electric power distribution business, comprising: a) An estimated portion of any investments made and not repaid or amortized before the concession expires, net of special obligations classified as financial assets due to their nature as an unqualified right to receive cash or any other financial asset directly from the granting authority. b) A portion remaining after the financial asset was determined, net of any special obligations classified as intangible assets because recovery of the same is contingent upon the utility service being used. The infrastructure handed over or built in connection with the power distribution business, originally represented by power, plant and equipment and other intangible asset items of the subsidiary, is recovered through two distinct cash flows, as follows:

32

a) a portion of the infrastructure is recovered through selling power distribution services to consumers (monthly billing of power consumed/sold) during the term of the concession; and b) another portion is recovered by way of the compensation payable for revertible assets upon expiration of the concession, which compensation will be paid directly by the Granting Authority or any of its agents. Management estimates that the compensation payable for the financial assets will be made based on the not yet amortized portions of investments in revertible concession infrastructure assets, determined at the cost of acquisition/construction, made for the purpose of ensuring stable, continuously improved provision of utility services, net of any special obligations. This compensation has been determined at transition date. Below is a summary of transactions related to the balances of revertible assets (concession assets):
Balance as of December 31, 2009 Additions Write-offs Balance as of June 30, 2010 354,784 15,261 (72) 369,973

OTHER RECEIVABLES
Parent Company 6/30/2010 12/31/2009 CURRENT Advances to suppliers and employees Property rental Public lighting fee Expenditures to refund Subsidy to low-income segment (a) Other amounts receivable - ILP Other Total NON-CURRENT Assets and rights for disposal Other Total 37 2,041 2,078 31 18,634 1,547 20,212 Consolidated 6/30/2010 12/31/2009 16,562 389 40,069 9,064 24,646 9,324 100,054 20,395 425 25,119 10,779 15,256 18,634 6,642 97,250

7,226 639 7,865

7,229 1,496 8,725

33

INVESTMENTS
Parent Company 6/30/2010 12/31/2009 Accounted for under the equity method: Light SESA Light Energia S.A. Light Esco Prestao de Servios S.A. Lightger S.A. (a) LightCom Itaocara Energia (a) Axxiom Solues Tecnolgicas S.A. Light Solues em Eletricidade Ltda (a) Subtotal Other permanent investments SubTotal Total 2,719,381 779,510 35,406 55,095 1,542 14,442 1,941 50 3,607,367 2,034 2,034 3,609,401 2,699,254 747,962 27,825 25,772 11,115 50 3,511,978 1,169 1,169 3,513,147 17,586 17,586 17,586 20,388 20,388 20,388 Consolidated 6/30/2010 12/31/2009

Light S.A.s Board of Directors approved on May 6, 2010 the acquisition of 3,672,000 registered common shares of Axxiom Solues Tecnolgicas S.A., representing 51% of its voting and total capital for the amount of R$3,975, calculating a R$2,034 goodwill, which is supported by a future yield expectation from the projected cash flow study conducted at the purchase. (a) Pre-operational Company INFORMATION ON SUBSIDIARIES AND JOINT VENTURES
6/30/2010 Light SESA Light Energia Light Esco LightCom Light Solues em Eletricidade Ltda (a) Instituto Light Itaocara Energia Light Ger Axxiom S.A. Ownership interest (%) 100 100 100 100 100 100 100 100 51 Paid-up capital 2,082,365 77,422 7,584 50 300 17,294 23,791 3,672 Shareholders' equity 2,719,381 779,510 35,406 1,542 50 14,442 55,095 1,941 Income / loss for the period 325,912 31,548 7,581 542 (172) 177 Total Assets 8,147,626 691,358 58,872 17,166 69 2 141,512 59,678 2,833

12/31/2009 Light SESA Light Energia Light Esco Light Solues em Eletricidade Ltda (a) Instituto Light Itaocara Energia Light Ger

Ownership interest (%) 100 100 100 100 100 100 100

Paid-up capital 2,082,365 77,422 7,584 50 300 17,294 23,791

Shareholders' equity 2,699,254 747,962 27,825 50 11,115 25,772

Dividends receivable (125,510) (26,833) (3,358) -

Dividends received (481,564) (18,074) -

Additional Dividends Paid (169,729) -

Income for the year 541,589 84,763 14,141 (617) 4,406

Total Assets 8,419,932 1,616,010 58,753 69 2 129,530 32,905

34

CHANGES IN INVESTMENTS IN SUBSIDIARIES AND JOINT VENTURES


12/31/2009 Light SESA Light Energia Light Esco LightCom Light Ger Light Solues em Eletricidade Ltda (a) Instituto Light Itaocara Energia Axxiom S.A. 2,699,254 747,962 27,825 25,772 50 11,115 Capital Increase 1,000 29,146 3,500 Sale of interest 1,941 Dividends paid (305,785) Other (1) Equity method 325,912 31,548 7,581 542 177 (172) 6/30/2010 2,719,381 779,510 35,406 1,542 55,095 50 14,442 1,941

PROPERTY, PLANT AND EQUIPMENT


Consolidated 6/30/2010 Accumulated depreciation Net value (1,406,329) (41,171) (34,671) (166,488) (7,256) (1,655,915) (1,655,915) 1,250,498 16,430 12,731 86,757 2,529 1,368,945 140,970 108,608 249,578 1,618,523 12/31/2009 Net value 1,281,715 16,770 15,336 91,141 2,305 1,407,267 112,751 80,550 193,301 1,600,568

Historical cost Generation Transmission Distribution Administration Sales In service Generation Administration In progress Total 2,656,827 57,601 47,402 253,245 9,785 3,024,860 140,970 108,608 249,578 3,274,438

35

The statement below summarizes the changes in property, plant and equipment:
Consolidated Balance as of 12/31/2009 PROPERTY, PLANT AND EQUIPMENT IN SERVICE Cost Land Reservoir, dams and water mains Buildings, works and improvements Machinery and equipment Vehicles Fixtures and furnishings Total Property, Plant and Equipment in Service - Cost (-) Depreciation Reservoir, dams and water mains Buildings, works and improvements Machinery and equipment Vehicles Fixtures and furnishings Total Property, Plant and Equipment in Service - Depreciation PROPERTY, PLANT AND EQUIPMENT IN PROGRESS Reservoir, dams and water mains Buildings, works and improvements Machinery and equipment Vehicles Fixtures and furnishings Studies and frojects Total Property, Plant and Equipment in Progress TOTAL PROPERTY, PLANT AND EQUIPMENT 43,416 29,866 81,300 7,497 14,530 16,692 193,301 1,600,568 26,607 9,121 10,804 1,893 422 7,760 56,607 18,725 (330) (330) (770) 70,023 38,987 92,104 9,390 14,952 24,122 249,578 1,618,523 105,803 1,247,913 271,021 1,240,560 32,497 127,130 3,024,924 2,474 22 576 3,072 (1,331) (1,294) (71) (440) (3,136) 105,803 1,246,582 273,495 1,239,288 32,426 127,266 3,024,860 Additions Write offs Inter-account transfers Balance as of 6/30/2010

(734,988) (147,937) (616,922) (24,857) (92,953) (1,617,657)

(11,511) (3,956) (18,822) (1,722) (4,943) (40,954)

1,330 2 535 70 759 2,696

(745,169) (151,891) (635,209) (26,509) (97,137) (1,655,915)

(i) Subsidiary Light SESA does not hold any Union-owned resources and rights in its assets.

36

INTANGIBLE ASSETS
Consolidated 6/30/2010 Accumulated amortization (3,138,867) (352,261) (3,491,128) (3,491,128) 12/31/2009 Net Value 2,609,252 62,885 2,672,137 755,995 82,657 838,652 3,510,789 Net Value 2,667,560 77,070 2,744,630 489,639 188,711 678,350 3,422,980

Historic cost Intangible Concession right of use Other In Use Concession right of use Other In progress TOTAL INTANGIBLE (1) 5,748,119 415,146 6,163,265 755,995 82,657 838,652 7,001,917

(1) Net of special obligations comprising (i) contributions made by the Union, states, municipalities and consumers, (ii) any unqualified donations (i.e. not subject to any consideration in benefit of the donor), and allowances intended as investments to be made toward concession of the electric power distribution utility. A total amount of R$12,065 (R$41,295 in 2009) was carried over to intangible assets in the first quarter of 2010 by way of interest capitalization and as a contra-entry to the financial income. The infrastructure used by subsidiary Light SESA is associated with the distribution service, and therefore cannot be removed, disposed of, assigned, conveyed, or encumbered as mortgage collateral without the prior written authorization of the Granting Authority, which authorization, if given, is regulated by Resolution ANEEL No. 20/99. It is the responsibility of ANEEL in its capacity as regulatory agency to determine the estimated economic useful lives of each piece of distribution infrastructure assets for pricing purposes, as well as for the purpose of calculating the amount of the relevant compensation payable upon expiration of the concession term. This estimate is revised from time to time, represents the best estimate concerning the assets' useful lives, and is accepted in the market as appropriate for accounting and regulatory purposes. The management of Light SESA is of the opinion that amortization of intangible assets must be consistent with the return expected on each infrastructure asset, via the applicable rates. Thus, intangible assets are amortized over the expected length of such return, limited to the term of the concession. As a result of this amortization method, the total amount of intangible assets will be amortized at all times in a non-linear fashion.

Below is a summary of changes in the intangible assets:

37

Consolidated Balance as of 12/31/2009 In Service Concession right of use gio de rentabilidade futura Other Total Intangible in Service (-) Depreciation Concession right of use Other Total Intangible in Service - Depreciation In Progress Concession right of use Other Total Intangible in Progress TOTAL INTANGIBLE ASSETS (I) 5,691,229 413,090 6,104,319 Additions 77,630 2,056 79,686 Write offs (5,550) (5,550) Inter-account transfers (15,190) (15,190) Balance as of 6/30/2010 5,748,119 415,146 6,163,265

(3,023,643) (336,184) (3,359,827)

(119,448) (16,077) (135,525)

4,224 4,224

(3,138,867) (352,261) (3,491,128)

605,289 73,199 678,488 3,422,980

221,902 12,121 234,023 178,184

(1,326)

(71,196) (2,663) (73,859) (89,049)

755,995 82,657 838,652 3,510,789

SUPPLIERS
Parent Company 6/30/2010 12/31/2009 CURRENT Sales within the scope of CCEE Electric network usage charges System service charges Free energy refund to generation companies (a) Electric power auctions Itaipu binational UTE Norte Fluminense Supplies and services Total 129 129 6,348 6,348 6/30/2010 23,110 48,490 2,281 54,185 120,565 90,636 65,443 404,710 89,081 493,791 Consolidated 12/31/2009 21,813 49,024 7,284 54,185 127,704 90,837 67,688 418,535 145,646 564,181

a) Free Energy Reimbursement to Generation Companies At a meeting held December 15, 2009, the executive board of ANEEL approved the methodology and procedures applicable to determining the balances of Free Energy and Revenue Losses incurred by generation and distribution utility companies following expiration of the Extraordinary Rate Review (RTE) applicable to power supply rates. However, Resolution No. 387 as of December 15, 2009, published January 12, 2010, concluded the process of computing the Revenue Loss and Free Energy closing balances, and also determined the amounts of any reimbursement operators should pay each other, as applicable. Energy supply, grid charge, materials and service balances have an average settlement period of up to 90 days.

38

LOANS, FINANCING AND FINANCIAL CHARGES


Principal Current Non-current 70,113 (36,305) 48,923 (25,533) 5,960 17,879 6,676 6,675 216 542 700 13,552 82,294 781 82,616 3,181 3,181 1,131 80,000 425 456 171,771 185,323 2,315 450,000 268,501 110,924 110,924 55,757 1,707 Consolidated Charges Current Non-current 906 169 407 48 14 1,544 1 30,042 1,437 1,140 1,268 335 2,729 7 246 354 37,559 5,646 44,749 20 20 Total 6/30/2010 12/31/2009 71,019 68,641 (36,305) (35,060) 49,092 47,443 (25,533) (24,597) 24,246 26,364 13,399 16,185 772 852 446 700 1,439 97,390 101,713 3,097 480,042 352,554 115,245 115,373 57,223 82,729 425 2,170 246 354 1,209,458 5,666 1,312,514 3,809 458,381 394,139 59,806 59,811 35,284 82,601 1,812 246 194 1,096,083 5,558 1,203,354

Financing Entity TN - Par Bond TN - Collateral - Par Bond TN - Discount Bond TN - Collateral - Discount Bond TN - C. Bond TN - Debit. Conv. TN - Bib BNDES - Import KFW III , IV, and V - Tranche A/B/C TOTAL FOREIGN CURRENCY Eletrobrs CCB Bradesco BNDES - FINEM BNDES - FINEM direct BNDES - FINEM + 1 BNDES - FINEM direct PSI Working capital - ABN Amaro Working capital- Santander Banco Real BNDES - PROESCO RGR Sundry banking warranties TOTAL DOMESTIC CURRENCY SWAP OVERALL TOTAL

1,000,128 1,082,422

The statement below summarizes the contractual terms and conditions applicable to our Loans as of June 30, 2010:
Principal Amortization Financing Entity TN - Par Bond TN - Cauo - Par Bond TN - Discount Bond TN - Cauo - Discount Bond TN - C. Bond TN - Debit. Conv. TN - Bib KFW III , IV, e V - Tranche A/B/C Date of signature 4/29/1996 4/29/1996 4/29/1996 4/29/1996 4/29/1996 4/29/1996 4/29/1996 3/11/2000 Currency US$ US$ US$ US$ US$ US$ US$ US$ Interest Rate p.a. 6% U$ Treasury Libor + 13/16 U$ Treasury 8% Libor + 7/8 6% Libor + 0.65% Beginning 2024 2024 2024 2024 2004 2004 1999 2003 Payment Lump sum Lump sum Lump sum Lump sum Half-yearly Half-yearly Half-yearly Half-yearly Remaining Installments 1 1 1 1 8 4 7 1 between 2 and 120 6 51 72 72 101 1 58 24 End 2024 2024 2024 2024 2014 2012 2013 2010

UFIR Eletrobrs CCB Bradesco BNDES - FINEM BNDES - FINEM direct BNDES - FINEM + 1 BNDES - FINEM direct PSI Working capital - ABN Amro BNDES - PROESCO Banco Real Sundry 10/18/2007 05/11/2007 11/30/2009 11/30/2009 11/30/2009 8/27/2008 12/12/2008 5/25/2010 CDI TJLP TJLP TJLP CDI TJLP 5% CDI + 0.85% TJLP + 4.3% TJLP + 2.58% TJLP + 1% + 2.58% 4.50% CDI + 0.95% TJLP + 2.5% 16.77% 2012 2009 2011 2011 2011 2009 2009 2010

Monthly and quarterly Yearly Monthly Monthly Monthly Monthly Yearly Monthly Monthly

2013 to 2017 2017 2014 2017 2017 2019 2010 2014 2012

In addition to the collaterals indicated above, loans are guaranteed by receivables in the approximate amount of R$45,656.

39

The principal of long-term loans and financing matures as follows (excluding financial charges), as of June 30, 2010:
Consolidated 1 1 11 /1/11 Foreign Currency 11 ,11 11 ,11 11 ,11 11 ,11 1,11 11 1,11 11

Local Currency 11 11 11 11 11 11 11 11 11 11 11 11 after 1111 TOTAL 1,11 11 22 2 2,22 11 1 1,11 11 1 1,11 11 1 1,11 11 1 1,11 11 1 1,11 1 1,11 ,11 1

Total 1,11 11 11 1 1,11 11 1 1,11 11 1 1,11 11 1 1,11 11 1 1,11 11 1 1,11 1 1,11 ,11 1

In percentage terms, the variation of major foreign currencies and economic ratios in the period, which are used to adjust loans, financing and debentures, was as follows in the periods:
6/30/2010 USD EUR UMBNDES IGP-M CDI SELIC 1.15 (8.44) 0.90 2.83 2.22 2.22 6/30/2009 (15.70) (10.99) (16.31) (0.32) 2.38 2.39

Covenants The funding of CCB Bradesco, the loans with ABN Amro and with BNDES FINEM, classified as current and non-current, requires that the Company maintain certain debt ratios and interest coverage. In the period ended June 30, 2010, the Company and its subsidiaries are in compliance with all required debt covenants.

40

DEBENTURES AND FINANCIAL CHARGES


Consolidated Charges Total Current 6/30/2010 12/31/2009 19 68,221 297,348 365,588 76 835,536 835,612 18,528 2,597 21,125 95 922,285 299,945 1,222,325 8,057 107 955,598 298,409 1,262,171

Financing Entity Debentures 1st Issue Debentures 4th Issue Debentures 5th Issue Debntures 6th Issue LOCAL CURRENCY - TOTAL

Principal Current Non Current

Contractual conditions of debentures on June 30, 2010 are as follows:


Date of Signature 6/30/2005 1/22/2007 6/01/2009 Interest Rate p.a. TJLP + 4% CDI + 1.50% 115% of CDI Principal Amortization Remaining Payment Installments Monthly Quarterly Lump Sum 60 15 1

Financing Entity Debentures 4th Issue Debentures 5th Issue Debentures 6th Issue

Currency TJLP CDI CDI

Beginning 2009 2008 2011

End 2015 2014 2011

Total principal amount is represented net of debentures issue costs, as provided for in CVM Resolution 556/08. These costs are detailed in the table below:
Incurred value 7,446 6,205 2,638 16,289 6/30/2010 Value to be recognized 22 6,243 2,653 8,918 Total Cost 7,468 12,448 5,291 25,207 12/31/2009 Total Cost 1,070 7,468 12,448 5,291 26,277

Issue Debentures 1st Issue Debentures 4th Issue Debentures 5th Issue Debentures 6th Issue TOTAL

41

The portions related to the principal of long-term debentures have the following maturities (excluding financial charges) on June 30, 2010: Local Currency 6/30/2010 2011 2012 2013 2014 2015 TOTAL 34,120 198,241 268,241 335,002 8 835,612

Covenants Classified in the current and non-current, the 5th and 6th Issue of Debentures require the maintenance of indebtedness indexes and coverage of interest rates. In the period ended June 30, 2010, the Company and its subsidiaries complied with all the covenants required. REGULATORY CHARGES CONSUMERS CONTRIBUTION
Consolidated 6/30/2010 12/31/2009 CURRENT Fuel usage account quota CCC Energy development account quota CDE Reversal global reserve quota RGR Incentive Program to Electric Power Alternative Sources PROINFA Charges for capacity and emergency acquisition 15,683 17,182 5,182 8,926 73,169 120,142 4,298 17,173 5,359 10,792 73,169 110,791

CONTINGENCIES Light S.A. and its subsidiaries are party in tax, labor and civil lawsuits and regulatory proceedings in several courts. Management periodically assesses the risks of contingencies related to these proceedings, and based on the legal counsels opinion it records a provision when unfavorable decisions are probable and whose amounts are quantifiable. In addition, the Company does not record assets related to lawsuits with a less-than-probable chance of success, as they are considered uncertain.

42

Provisions for contingencies are as follows:


Consolidated Balance as of December 31, 2009 Additions Restatements Write-offs / payments Write-offs / reversals Balance as of June 30, 2010 Escrow deposits Balance as of June 30, 2010 Labor 163,655 1,562 (2,810) (247) 162,160 Civil 252,149 22,966 7,860 (29,679) (6,479) 246,817 Tax 166,426 11,764 178,190 Other 87,123 36,120 3,193 (26,944) (53,381) 46,111 Total 669,353 60,648 22,817 (59,433) (60,107) 633,278

7,831

24,771

36,513

1,655

70,770

19.1 Labor Contingencies There are approximately 3,591 labor-related legal proceedings in progress (3,680 on December 31, 2009) in which the Company and subsidiaries are the defendants. These labor proceedings mainly involve the following matters: overtime; hazardous work wage premium; equal pay; pain and suffering; subsidiary/joint liability of employees from outsourced companies; difference of 40% fine of FGTS (Government Severance Indemnity Fund for Employees) derived from the adjustment due to understated inflation and overtime. 19.2 Civil Contingencies The Company and its subsidiaries are defendants in approximately 40,190 civil legal proceedings (39,506 on December 31, 2009), of which 16,683 are in the state and federal courts referring to Civil Proceedings (14,947 on December 31, 2009), among which those claims that can be accurately assessed amounting to R$812,060 (R$747,873 on December 31, 2009) and 23,507 are in Special Civil Courts (24,559 on December 31, 2009), with total claims amounting to R$350,482 (R$377,124 on December 31, 2009).
Civil Contingencies Accrued Value (probable loss) 6/30/2010 a) Civil proceedings b) Special civil court c) "Cruzado" Plan Total 114,637 30,115 102,065 246,817 12/31/2009 124,576 29,555 98,018 252,149

a) The Provision for civil proceedings comprises lawsuits in which Light SESA is the defendant and it is probable the claim will result in a loss in the opinion of the respective attorneys. The claims mainly involve alleged moral and property damage as well as consumers challenging the amounts paid.

43

The Company is also party to civil proceedings that Management believes that risk of loss are less than probable, based on the opinion of its legal counsels. Therefore, no provision was established. The amount, currently assessed, represented by these claims is R$543,791 (R$480,060 on December 31, 2009). b) Lawsuits in the Special Civil Court are mostly related to matters regarding consumer relations, such as improper collection, undue power cut, power cut due to delinquency, network problems, various irregularities, bill complaints, meter complaints and problems with ownership transfer. There is a limit of 40 minimum monthly wages for claims under procedural progress at the Special Civil Court. Accruals are based on the moving average of the last 12 months of condemnation amount. c) There are civil actions in which some industrial consumers have challenged, in court, the increases in electric power tariff rates approved in 1986 by the National Department of Water and Electric Power (Cruzado Plan). The provision includes a civil action in the public interest, under phase of calculation of the award. 19.3 Tax Contingencies The provisions established for tax contingencies are as follows:
Tax Contingencies Accrued Value (probable loss) 6/30/2010 PIS/COFINS RGR and CCC INSS tax deficiency notice INSS quarterly ICMS CIDE Other Total 8,561 40,062 21,992 98,367 4,881 4,327 178,190 12/31/2009 8,561 39,291 21,504 88,039 4,792 4,239 166,426

The Company and its subsidiaries are parties to tax, regulatory and legal proceedings in which Management, based on the opinion of its legal counsels, believes the risks of loss are less than probable, and for which no provision was recorded. Currently, the quantifiable amount of these proceedings is R$949,100 (R$1,156,600 on December 31, 2009).

The tax proceedings, deemed as possible loss, had effects in the quarter:

44

(i) ICMS (Aluvale). These are tax foreclosures related to the ICMS deferral in the supply of electric power for the consumer ALUVALE, an electro-intensive industrial consumer. Light SESA included debts related to these tax foreclosures in the tax payment program pursuant to Law 11,941. The amount was paid in one single installment, on demand, by the ICMS taxpayer, namely Companhia Vale S.A, as the acquiring company of ALUVALE. (ii) Compensation note of a negative social contribution balance with COFINS These refer to a compensation note carried out by Light SESA, in which the negative social contribution balance calculated in the 1998 calendar year was used to settle COFINS debits. Lights non-compliance pronouncement was deemed groundless, reason why a voluntary appeal was filed. The amount involved on June 30, 2010 was R$27,900. (iii) ISS Nilpolis These are tax foreclosures related to the collection of ISS by the Municipality of Nilpolis for the provision of services related to energy supply activities. The decision was issued and considered valid to the motions filed by Light SESA. The amount involved on June 30, 2010 was R$8,000. (iv) ITR Lajes and Tocos Reservoirs Refers to the collection of ITR on the concession area of Light SESA in the city of Rio Claro. A decision was issued approving the voluntary appeal to Light SESA in order to cancel the notice of infraction. Said decision was final and unappealable, remaining cancelled the notice of infraction. The amount involved on June 30, 2010 was R$10,700. (v) PIS/COFINS onlending Up to June 30, 2010, 137 suits were filed against Light SESA by commercial clients questioning the PIS and COFINS onlending on the electricity price, claiming the reimbursement of all amounts paid improperly. According to legal counsels, losses are possible, which is why a provision has not been recorded. 19.4 Other Contingencies a) Administrative Regulatory Contingencies The Company has regulatory contingencies occurred or filed in 2Q10, derived from administrative challenges against ANEEL: a.1) Tax Deficiency Notice 007/2010-SFE The notice was drawn up on February 17, 2010, including a fine of R$9,544 as a result of the inspection conducted by the Agency in December 2009 in order to identify and assess the causes of interruptions in the Concessionaires underground distribution system. Light SESA filed its defense on March 5, 2010 requesting the cancelation of non-conformities, and subsidiarily a reduction of fines. Alternatively to the imposition of fines, Light SESA pleaded to convert the fine into the Conduct Adjustment Agreement (TAC). ANEELs Board of Executive Officers denied the TAC execution request and Light SESA filed an appeal

45

against this decision. Currently, we await ANEELs final decision on the appeal lodged and the pleading for TAC. The Company set up a provision for the total fine amount. a.2) Tax Deficiency Notice ANEEL 071/2010-SFF The notice was drawn up on March 17, 2010, including a fine in the amount of R$448 under the allegation that nonconformities were verified in the economic, financial and accounting inspection conducted in the Concessionaire. Light SESA lodged an appeal on April 1, 2010, requesting to convert fines into warning and currently awaits ANEELs decision thereon. ANEEL Dispatch 1665/2010 of June 10, 2010 reduced the fine to R$419. At the moment, a final decision is pending from ANEEL regarding the appeal filed. The Company recorded a provision in the total amount of the fine. a.3) ANEEL Notice of Infraction 013/2010-SFG The notice was drawn up on May 4, 2010, with a R$1,120 fine given that ANEEL has pointed out failures in the black-start process of generating units UHE Fontes Nova, Nilo Peanha and Pereira Passos, in the SIN recovery after disturbance on November 10, 2009. Light Energia filed an appeal against this Notice of Infraction on May 19, 2010 requiring the reduction of fines. SFG maintained the decision and awaits judgment by ANEELs Board of Executive Officers. The Company set up a provision for the total fine amount. a.4) Notice of Infraction 061/2010-SFE The notice was drawn up on May 19, 2010, with a R$5,049 fine due to the non-compliance verified in commercial and technical inspection conducted by ANEEL in May 2009. Light SESA filed an appeal against this Notice of Infraction on June 3, 2010 requesting the cancellation of fines and subsequently its reduction and it awaits ANEELs decision. The Company recorded a provision in the total amount of the fine. a.5) ANEEL Notice of Infraction 082/2010-SFE The notice was drawn up on June 18, 2010, with a R$16,052 fine under the statement that Light SESA had violated DEC and FEC continuity indicators of 65 groups in 2009, and the event of November 10, 2009 (Furnas Blackout) was considered when calculating these indicators. Light SESA filed an appeal against the Notice on July 8, 2010 requiring the reduction of the fines so that the interruption event on November 10, 2009 is not considered for purposes of calculating DEC and FEC indicators. Light SESA recorded a provision of R$4,110, upon its legal counselors opinion that it is probable that ANEEL may reduce the fine due to Light SESAs defense requesting the elimination of the hours when Furnas transmission lines were interrupted, given that it refers to an assumption or fortuitous case/force majeure or third partys event, in both cases it is not Light SESAs responsibilities. b) Environmental Contingencies In February 2010, a settlement between subsidiary Light Energia and the municipality of Barra do Pira and the Public Prosecutor Office was ratified at court, resulting from the public civil action, in which the plaintiff requested the remediation and recovery of several environmental damages caused by the construction of the Santa Ceclia and

46

Santana plants, as an integral part of the transposition system of waters from the Rio Paraba do Sul basin to the Rio Guand basin, feeding the Fontes, Nilo Peanha and Pereira Passos plants. The settlement amount was R$14,200 (to be paid by installments until June 2010), considering that Light Energia had a provision of R$6,000, the difference was accrued in 1Q10. The Company paid the last installment of the agreement on June 1, 2010, and it has no other obligation. After the compliance with liabilities assumed by the municipality (dredging in Pira river), both lawsuits will be shelved. POST-EMPLOYEMENT BENEFITS Light Groups companies sponsor Fundao de Seguridade Social BRASLIGHT, a nonprofit closed pension entity, whose purpose is to provide retirement benefits to the Companys employees and pension benefits to their dependents. BRASLIGHT was incorporated in April 1974 and has four plans - A, B, C and D established in 1975, 1984, 1998 and 2010, respectively, with about 96% of the active participants of the other plans having migrated to plans A and B. Current plans in effect include defined-benefit- (Plans A and B), mixed-benefit- (Plan C), and defined-contribution plans (Plan D). For details on said plans see Note 21 to the financial statements for the year ended December 31, 2010. a) Below is a summary of the Company's liabilities involving pension plan benefits as stated on its balance sheet:
Current Contractual debt with pension fund Other Total 93,334 256 93,590 6/30/2010 Non-current 878,159 878,159 Total 971,493 256 971,749 Current 95,044 95,044 12/31/2009 Non-current 861,386 861,386 Total 956,430 956,430

The statement below summarizes the changes in agreement liabilities in quarters ended June 30, 2010:
Total Consolidated Contractual liabilities on 12/31/2009 Amortization in the period Restatements in the period Transfer to current Contractual liabilities on 6/30/2010 956,430 (46,154) 61,217 971,493 Current 95,044 (46,154) 25,325 19,119 93,334 Non-current 861,386 35,892 (19,119) 878,159

47

21.

OTHER DEBTS
Parent Company 6/30/2010 12/31/2009 Consolidated 6/30/2010 12/31/2009 15,421 3,902 942 1,884 71,895 44,623 51,005 30,966 220,638 8,691 4,293 1,038 2,173 76,012 49,090 51,402 11,622 31,707 236,028

CURRENT Advances from clients Compensation for use of water resources Energy Research Company EPE National Scientific and Technological Development Fund FNDCT Energy Efficiency Program PEE Research and Development Program P&D Public lighting fee Other debits - reimbusements to consumers Other Total NON-CURRENT Provision for success fees Reversal reserve Use of Public Asset - UBP (a) Other Total

1,745 1,745

1,524 1,524

13,275 69,933 122,231 2,527 207,966

13,275 69,933 115,651 9,836 208,695

a) In accordance with Concession Agreement No. 12/2001 dated March 15, 2001, which governs the development of the hydroelectric potential of the Paraba do Sul river in the municipalities of Itaocara and Aperib, subsidiary Itaocara Energia Ltda. shall pay to the Unio, by way of a fee owing to use of a public asset, as of the start-up date (scheduled for 2013) and until the concession expires or while the hydroelectric potential is being exploited, monthly installments equal to 1/12 (one twelfth) of the proposed annual payment of R$2,017, duly escalated against the variation of the IGP-M, or any other index as shall replace the former. The contra-entry to liability escalation is being recognized as an intangible asset during the construction phase, without any impact on the income. Following start-up, the escalation will be recognized directly in the income for the year (see note 21). 22. RELATED-PARTY TRANSACTIONS

Light S.A. has as controlling group the Companhia Energtica de Minas Gerais CEMIG, Andrade Gutierrez Concesses, Luce Empreendimentos e Participaes S.A. and Rio Minas Energia Participaes S.A (RME) company controlled by Equatorial Energia (see Note 23). Interest in operating subsidiaries are outlined in the Note 1. Below, a summary of related-party transactions occurred in the quarters ended June 30, 2009 and 2010:

48

Contracts with the same group Item 1 (Agreement objectives and characteristics) Strategic agreement P urchase agreement of electric power between Light SESA and C EM IG Strategic agreement P urchase agreement of electric power between Light SESA and C EM IG Strategic agreement Sale agreement of electric power between Light Energia and CEM IG Strategic agreement C ollection of distribution system usage charges between Light SESA and CEM IG Strategic agreement C ommitment to the basic electric network usage charges between Light SESA and C EM IG Strategic agreement C ommitment to the basic electric network usage charges between Light Energia and C EM IG Strategic agreement Sale co mmittment of electric power between Light Energia and CEM AR Loans 8 F INEM Loans

R elationship with Light S.A . A ss ets 6/30/201 0 1 2/31 /2009 CEM IG (party of the controlling group) CEM IG (party of the controlling group) CEM IG (party of the controlling group) CEM IG (party of the controlling group) CEM IG (party of the controlling group) CEM IG (party of the controlling group) Equatorial (party o f the controlling group)

Consolidated Liabilities 6/30/201 0 1 2/31 /2009 R evenue 6/30/201 0 6/30/2009 E xpenses 6/30/201 0 6/30/2009

2,170 384

2,326 190 -

5,977 115 2,170 -

8,492 2,248 -

10,187 1,148 59 4,393

10,865 1,021 57 4,321

38,335 651

52,859 -

9,912 6,791 -

13 1,018

13 952

B NDES

B NDES

352,554

394,139

9,011

C redit Facility Loans

B NDES

446

234

1 0

Debentures 1 issue - Non-convertible st Loans

B NDES

2,170

8,057 1,812

13

796 32

1 1

P r Esco and Energy Efficiency P roject Loans Debentures 4th issue - Convertible Loans B NDES

1 2

B NDES

95

107

9,564

37

1 3

C redit facility - Direct Loans

B NDES

115,245

59,806

1,429

1 4

C redit facility - Direct +1 % Loans C redit facility - Direct P SI P ension P lan F undao de Seguridade Social (Social Security Foundation) - B RASLIGHT

B NDES BRA SLIGHT (party of the controlling group)

115,373 57,223 971,749

59,811 35,284 956,430

1,465 406 28,919

11,296

1 5 1 6

* Equatorial Energia S.A.s subsidiary.

49

Below, a summary of agreements executed with related parties:


Relationship with Light S.A. Original amount M aturity date Conditions for or term termination or end Remaining balance 11 / 11 / 11 1 (Agreement objectives and characteristics) Strategic agreement P urchase agreement of electric power between Light SESA and CEM IG CEM IG (party of the controlling group) Date % J an/1111 Dec/2222 11 of remaining balance % J an/1111 Dec/2222 11 of remaining balance Dec/1111 N/A N/A P rice established in the Agreement Conditions

Item

Contracts with the same group

111 ,111

222 ,222 regulated market


P rice established in the

1 1

Strategic agreement P urchase agreement of electric power between Light SESA and CEM IG Strategic agreement Sale agreement of electric power between Light Energia and CEM IG Strategic agreement Collection of distribution system usage charges between Light SESA and CEM IG Strategic agreement Commitment to the basic electric network usage charges between Light SESA and CEM IG Strategic agreement Commitment to the basic electric network usage charges between Light Energia and CEM IG Strategic agreement Sale committment of electric power between Light Energia and CEM AR Loans

CEM IG (party of the controlling group) CEM IG (party of the controlling group) CEM IG (party of the controlling group) CEM IG (party of the controlling group) CEM IG (party of the controlling group) Equatorial (party of the controlling group)

11 ,111

11 ,111 regulated market 11 ,111 regulated market 111 regulated market 1 ,111 regulated market 11
P rice established in the P rice established in the

222 J an/2222 ,222 -

Nov/1111Undetermined

Dec/1111Undetermined

N/A

P rice established in the

Dec/1111Undetermined

N/A

P rice established in the regulated market P rice established in the

11 ,111

J an/1111

Dec/1111

N/A

11 ,111 regulated market


TJ LP +1 % p.a. .1

FINEM Loans

BNDES

Nov/1111

Sep/1111

N/A

111 ,111
BNDES M ar/1111 Apr/1111 N/A

111 ,111
BNDES basket +1 p.a. %

Credit F acility Loans

11 ,111

J an/1111 N/A TJ LP +1 p.a. %

1 1

Debentures 1 issue - Non-convertible st Loans

BNDES

111 ,111

J an/1111

Oct/1111 N/A

1 1

BNDES P r Esco and Energy Efficiency P roject Loans BNDES

111

Dez/1111

1 ,111

TJ LP +1 % p.a. .1

1 1

Debentures 1 issue - Convertible th Loans Credit facility - Direct Loans BNDES

111 ,111

J un/1111

J un/1111

N/A

11

TJ LP +1 p.a. %

1 1

111 ,111

Dec/1111

Apr/1111

N/A

111 ,111

TJ LP +1 % p.a. .11

1 1

Credit facility - Direct +1 % Loans

BNDES

111 ,111

Dec/1111

Apr/1111

N/A

111 ,111

TJ LP +1 +1 % p.a. % .11

1 1

Credit facility - Direct P SI P ension P lan

BNDES

11 ,111

Dec/1111

Sep/1111

N/A

11 ,111

1 % p.a. .1

1 1

Fundao de Seguridade Social (Social Security Foundation) - BRASLIGHT

BRASLIGHT (party of the controlling group)

111 ,111

J un/1111 J un/1111

N/A

111 ,111

IP CA+1 p.a %

* Equatorial Energia S.A.s subsidiary. Related-party transactions have been executed under usual market conditions. MANAGEMENT COMPENSATION Policy regarding compensation of the Board of Directors, Executive Board, Fiscal Council and board committees. Pro-rata share of each component to the aggregate compensation for 2010.

50

Board of Directors Fixed Remuneration: Variable Remuneration: Board of Executive Officers Fixed Remuneration: Variable Remuneration: Outros Fiscal Council Fixed Remuneration: Variable Remuneration:

100% 100% 100% -

Compensation paid by the Company to the Board of Directors, Executive Board, and Fiscal Council in the second quarter of 2010:
Consolidated Board of Directors 22 278 278 278 Board of Executive Offcers 7 92 92 92 1,177 988 189 1,177

2010 Number of members Annual fixed compensation Salary or pro-labore Direct and indirect benefits Compensation for participation in Committee Other Variable compensation Bonus Profit sharing Compensation for attending meetings Commissions Other (ILP) Post-employment benefits Benefits from the assignment of office Share-based compensation Total compensation per body

Fiscal Council 5

Total 34 1,547 1,358 189 1,547

Average annual compensation due to the Board of Directors, Executive Board, and Fiscal Council in second quarter of 2010:
Parent Company Board of Executive Fiscal Council Offcers 5 95 47 71 74 74 74 7 168 126 141

2010 Number of members Highest individual compensation Lowest individual compensation Average individual compensation

Board of Directors 22

Total 34 336 247 286

51

23.

SHAREHOLDERS EQUITY

Capital Stock There are 203,934,060 non-par and book-entry common shares of Light S.A. (203,934,060 on December 31, 2009) as of June 30, 2010 recorded as Capital Stock in the total amount of R$2,225,822 (R$2,225,822 on December 31, 2009), as follows:
SHAREHOLDERS Controlling Group RME Rio Minas Energia Participaes S.A. Andrade Gutierrez Concesses S.A. Companhia Energtica de Minas Gerais S.A. Luce Empreendimentos e Participaes S.A. Other BNDES Participaes S.A. - BNDESPAR Public Treasury shares Overall Total 6/30/2010 Number of Shares 106,304,597 26,576,150 1,081,649 52,070,649 26,576,149 97,629,463 46,823,482 50,805,981 203,934,060 % Interest 52.12 13.03 0.53 25.53 13.03 47.88 22.96 24.92 100 12/31/2009 Number of Shares 106,304,597 26,576,150 26,576,149 26,576,149 26,576,149 97,629,463 49,776,782 47,593,781 258,900 203,934,060 % Interest 52.12 13.03 13.03 13.03 13.03 47.88 24.41 23.34 0.13 100

Light S.A. is authorized to increase its capital up to the limit of 203,965,072 through resolution of the Board of Directors, regardless of amendments to the bylaws. However, this increase is to occur exclusively upon the exercise of the warrants issued, strictly pursuant to the conditions of the warrants (Bylaws, Article 5, paragraph 2). 24. EARNINGS PER SHARE

Pursuant to the requirements of CPC 41 and the IAS 33 (Earnings per Share), the statement below reconciles the year's earnings per share with the amounts used to determine the basic and diluted earnings per share.
Consolidated 6/30/2010 12/31/2009 NUMERATOR Net income for the period (R$) DENOMINATOR Weighted average number of common shares BASIC AND DILUTED EARNINGS PER COMMON SHARE 362,431 203,934,060 1.777 588,804 203,933,966 2.887

There were no significant differences between the basic and diluted earnings per share as of June 30, 2009 2010.

52

25.

NET OPERATING REVENUE BREAKDOWN


2010 Consolidated 2009 1,926,830 10,210 145,459 114,936 6,196 695 2,204,326 (508,127) (97,144) (406) (605,677)

Supply to consumers/distributors (note 29) Leases, rentals and other Revenue from network usage Revenue from consrtruction Revenue from services rendered Taxed service fee Other Revenues GROSS REVENUE Billed supply -ICMS PIS / COFINS Other REVENUE TAXES

2,028,259 11,125 181,379 111,186 14,830 512 2,347,291 (566,673) (134,070) (694) (701,437)

Fuel Consumption Account - CCC Energy Development Account - CDE Global Reveral Reserve - RGR Energy Research Company - EPE National Technological Development Fund - FNDCT Energy Efficiency Program - PEE Research and Development -R&D Other Charges CONSUMER CHARGES TOTAL DEDUCTIONS NET REVENUE

(51,672) (51,546) (16,171) (1,446) (2,893) (6,502) (2,893) (133,123) (834,560) 1,512,731

(30,118) (51,519) (20,100) (1,340) (2,679) (5,966) (2,679) (114,401) (720,078) 1,484,248

53

Consolidated 2010 Supply to consumers/distributors (note 29) Leases, rentals and other Revenue from network usage Revenue from consrtruction Revenue from services rendered Taxed service fee Other Revenues GROSS REVENUE Billed supply -ICMS PIS / COFINS Other REVENUE TAXES 4,323,248 21,897 354,203 222,436 27,401 978 4,950,163 (1,177,719) (276,611) (2,169) (1,456,499) 2009 4,112,371 19,844 291,116 226,605 15,081 1,354 4,666,371 (1,075,675) (225,520) (1,670) (1,302,865)

Fuel Consumption Account - CCC Energy Development Account - CDE Global Reveral Reserve - RGR Energy Research Company - EPE National Technological Development Fund - FNDCT Energy Efficiency Program - PEE Research and Development -R&D Other Charges CONSUMER CHARGES TOTAL DEDUCTIONS NET REVENUE

(105,446) (103,092) (34,116) (3,091) (6,179) (13,976) (6,179) (272,079) (1,728,578) 3,221,585

(67,324) (103,038) (40,199) (2,843) (5,686) (12,766) (5,686) (237,542) (1,540,407) 3,125,964

54

26.

ELECTRIC POWER SUPPLY


Consolidated Number of billed sales 2010 2009 3,719,905 11,565 273,030 11,145 10,219 779 1,314 361 4,028,318 4,028,318 4,028,318
(1) (2)

GWh (1) 2010 1,992 423 1,505 12 362 170 274 17 4,755 4,755 1,110 141 1,251 6,006 2009 1,860 459 1,477 12 352 171 271 17 4,619 4,619 1,134 353 1,487 6,106 2010

R$ 2009 610,268 106,182 466,013 2,264 111,313 25,707 55,388 1,377,135 504,911 (49,962) 1,832,084 80,931 13,815 94,746 1,926,830

4.01 to 6.30 Residential Industrial Commerce, services and other Rural Public sector Public lighting Public utility Own consumption Billed sales ICMS (State VAT) Unbilled sales TOTAL SUPPLY
(3)

3,651,775 12,002 269,417 11,016 10,159 432 1,309 328 3,956,438 3,956,438 3,956,438

665,809 84,702 462,540 2,285 113,219 26,030 55,705 1,410,290 560,773 (51,147) 1,919,916 93,169 15,174 108,343 2,028,259

Electric power auction Short-term energy TOTAL SUPPLY OVERALL TOTAL

Consolidated 11 11 .1 a .1 Residential Industrial Commerce, services and other Rural Public sector Public lighting Public utility Own consumption Billed sales ICMS (State VAT) Unbilled sales TOTAL SUPPLY
(1 )

Number of billed sales 11 11 22 22 2 2,22 ,22 2 1,11 11 11 1 1,11 1,11 11 1,11 11 11 1 11 ,11 11 1 1 1,11 ,11 1 1 1,11 ,11 1 1 1,11 ,11 1

(1 ( 1 ) )

GWh 11 11 11 ,11 11 1 11 ,11 1 1 11 1 11 1 11 1 1 1 1,11 11 1,11 11 11 ,11 11 1 11 ,11 1,11 11

(1 )

R$ 11 11 11 ,11 11 1 11 ,11 1 1 11 1 11 1 11 1 1 1 11 ,11 11 ,11 11 ,11 11 1 11 ,11 1,11 11 11 11 1 1,11 ,11 1 11 1 1,11 11 1 1,11 11 ,11 11 1 1,11 1,11 11 11 1 1,11 1 1,11 ,11 1 1 1,11 ,11 1 (11 ) ,111 1 1,11 ,11 1 11 1 1,11 1,11 11 11 1 1,11 1 1,11 ,11 1 11 11 1 1,11 ,11 1 11 1 1,11 11 1 1,11 11 ,11 11 1 1,11 1,11 11 11 1 1,11 1 1,11 ,11 1 1 1,11 ,11 1 (11 ) ,111 1 1,11 ,11 1 11 1 1,11 1,11 11 11 1 1,11 1 1,11 ,11 1

1 1,11 ,11 1 1,11 11 11 1 1,11 1,11 11 1,11 11 11 1 11 ,11 11 1 1 1,11 ,11 1 1 1,11 ,11 1 1 1,11 ,11 1

Electric power auction Short-term energy TOTAL SUPPLY OVERALL TOTAL

(1 Not revised by the independent auditors ) (1 Number of billed sales in December 1111 and without consumption ) , with (1 Light SESA )

55

27.
4.01 a 6.30

OPERATING COSTS AND EXPENSES


Cost of Service Electric Power Operation (43,164) (6,626) (35,932) (78,849) (111,186) (2,889) (278,646) Selling (3,774) (528) (18,374) (260) (75,258) (145) (98,339) Consolidated Operating Expenses General and Adm (17,240) (930) (28,201) (8,958) 38,120 (21,408) (38,617) Other Operating Revenues (Expenses) 10,839 10,839 2010 2009

Nature of the expense Personnel and management Material Outsourced services Electricity purchased for resale (Note 26) Depreciation and amortization Allowance for doubtful accounts Provision for contingencies Cost of Construction Other Total

(804,800) (804,800)

(64,178) (8,084) (82,507) (804,800) (88,067) (75,258) 38,120 (111,186) (13,603) (1,209,563)

(69,529) (6,465) (63,903) (848,647) (85,746) (66,543) (18,494) (114,936) (24,445) (1,298,708)

1.01 to 6.30

Cost of Service Electric Power Operation (77,733) (13,855) (72,471) (155,561) (222,436) (7,150) (549,206) Selling (7,158) (1,104) (37,059) (512) (138,793) (386) (185,012)

Consolidated Operating Expenses General and Adm (32,697) (1,944) (56,879) (17,641) 131 (38,736) (147,766) Other Operating Revenues (Expenses) 10,595 10,595 2010 2009

Nature of the expense Personnel and management Material Outsourced services Electricity purchased for resale (Note 26) Depreciation and amortization Allowance for doubtful accounts Provision for contingencies Cost of Construction Other Total

(1,655,711) (1,655,711)

(117,588) (16,903) (166,409) (1,655,711) (173,714) (138,793) 131 (222,436) (35,677) (2,527,100)

(138,830) (10,938) (122,708) (1,761,618) (171,756) (126,708) (23,881) (226,605) (43,385) (2,626,429)

28.

ELECTRIC POWER PURCHASED FOR RESALE


Consolidated

4.01 to 6.30 2010 Connection charges Spot market energy Network usage charges Itaipu UTE Norte Fluminense Other contracts and electric power auctions O.N.S. PROINFA ESS -

GWh

(1)

2009 1,404 1,583 3,519 6,506 Consolidated

9 1,345 1,583 3,567 6,504

R$ 2010 (4,546) 3,718 (105,094) (137,982) (198,510) (301,326) (4,895) (26,778) (29,387) (804,800)

2009 (4,822) 13,113 (95,659) (160,790) (239,394) (304,553) (4,227) (23,745) (28,570) (848,647)

1.01 to 6.30 2010 Connection charges Spot market energy Network usage charges Itaipu UTE Norte Fluminense Other contracts and electric power auctions O.N.S. PROINFA ESS

GWh 765 2,676 3,150 7,732 14,323

(1)

2009 568 2,791 3,150 7,292 13,801

R$ 2010 (9,195) (8,080) (210,305) (278,678) (394,815) (629,869) (9,594) (60,616) (54,559) (1,655,711)

2009 (9,574) (53,237) (194,951) (476,191) (343,130) (7,045) (52,912) (28,570) (596,008) (1,761,618)

(1) Not revised by independent auditors

56

29.
4.01 to 6.30

FINANCIAL INCOME
Parent Company 2010 2009 5 175 3 183 (2) (2) 181 261 7 268 (217) (1) (218) 50 Consolidated 2010 22,066 15,281 12,312 (23) 2,100 51,736 3,436 (9) (5,737) (559) (12,284) (28,919) (1,692) (45,072) (2,828) (11,523) 10,377 (4,152) 18,945 (12) (1,057) (189) (2,655) (83,930) (32,194) 2009 29,180 8,285 10,450 (7,196) (2,233) 38,486 5,619 (7,312) (8,722) (2,360) (384) (11,296) (3,317) (43,470) (2,043) (6) 21,895 (2,560) 19,653 (34,303) 4,183

REVENUES Interest and variation on debts paid by installments Restatement of tax credits Income from temporary cash investments Swap operations Other EXPENSES Adjustment at present value of receivables Restatement of tax liabilities Restatement of provision for contingencies Banking expenses Charges and monetary variations with BNDES financing Charges and monetary variations on actuarial liability of Brasilight Interest and charges on loans and financing foreign currency Interest and charges on loans and financing domestic currency Regulatory fines Credit reversal of IR Debenture 4th Issue Interest and fines on taxes Regulatory fines Installment payment - Other fines and interest rates Law 11941 / 09 Monetary variation local currency Exchange variation foreign currency Swap operations Other

NET FINANCIAL RESULT

1.01 to 6.30 REVENUES Interest and variation on debts paid by installments Restatement of tax credits Income from temporary cash investments Swap operations Other EXPENSES Adjustment at present value of receivables Surplus (deficit) adjustment - Braslight Restatement of tax liabilities Restatement of provision for contingencies Banking expenses Charges and monetary variations with BNDES financing Charges and monetary variations on actuarial liability of Brasilight Interest and charges on loans and financing foreign currency Interest and charges on loans and financing domestic currency Encargos sobre passivos regulatrios Credit reversal of IR Debenture 4th Issue Interest and fines on taxes Regulatory fines Installment payment - Other fines and interest rates Law 11941 / 09 Monetary variation local currency Exchange variation foreign currency Swap operations Other

Parent Company 2010 2009 20 343 7 370 370 1,088 15 1,103 (217) (24) (241) 862

Consolidated 2010 41,955 18,073 28,723 32 7,383 96,166 8,057 (6,388) (34) (22,817) (15,338) (24,734) (61,215) (3,972) (87,180) (5,223) (11,523) 9,718 (6,895) 12,447 (10) (3,238) 81 (7,942) (226,206) (130,040) 2009 46,089 14,926 27,858 (8,286) (1,060) 79,527 11,419 (15,589) (30,190) (2,411) (384) (20,488) (7,752) (90,662) (7,133) (7) 42,808 (2,560) 19,351 (103,598) (24,071)

NET FINANCIAL RESULT

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30.

FINANCIAL INSTRUMENTS

Below, we compared book and fair values of financial instruments assets and liabilities:
Parent Company 6/30/2010 12/31/2009 Book value Fair Value Book value Fair Value ASSETS Cash and cash equivalents (note 5 ) Other Receivable (note 11) 3,787 2,078 111,706 3,787 2,078 5,865 14,584 20,212 34,796 14,584 20,212 34,796

LIABILITIES Suppliers (Note 15)

129 129

129 129

6,348 6,348

6,348 6,348

Consolidated 6/30/2010 12/31/2009 Book value Fair Value Book value Fair Value ASSETS Cash and cash equivalents (note 5 ) Marketable Securities (note 6) Consumers, Concessionaires and Permissionaires - Clients (note 7) Swaps Concession financial assets (note 10) Other Receivable (note 11) 723,938 5,735 1,535,593 45 369,973 107,919 2,743,203 723,938 5,735 1,535,593 45 369,973 107,919 2,743,203 760,313 68,059 1,653,652 4 354,784 97,250 2,934,062 760,313 68,059 1,653,652 4 354,784 97,250 2,934,062

LIABILITIES Suppliers (Note 15) Loans and financing (Note 16) Debentures (Note 17) Swaps (Note 16)

493,791 1,267,745 1,201,200 5,666 2,968,402

493,791 1,272,061 1,201,200 5,666 2,972,718

564,181 1,183,003 1,241,675 5,558 2,994,417

564,181 1,195,561 1,241,675 5,558 3,006,975

In compliance with CVM Statement No. 475/2008 and CVM Resolution No. 604/2009, which superseded Resolution No. 566/2008, the description of accounting balances and fair value of financial instruments stated in the balance sheet as of June 30, 2010 and 2009 are identified as follows:

Financial investments
Financial investments in bank deposit certificates are measures at their acquisition cost duly escalated at the balance sheet date, which value is proximate to their Fair value, as determined by the management.

Marketable Securities
Financial investments in bank deposit certificates are measures at their acquisition cost duly escalated at the balance sheet date, which value corresponds to their fair value.

Consumers, utility operators and permit holders (customers)


These are classified as loans and receivables, being recorded at their original

58

values and subject to a provision for losses and adjustments to their present values, where applicable.

Financial concession assets


These are classified as loans and receivables, being recorded at their original values and subject to a provision for losses and adjustments to their present values, where applicable.

Suppliers
Accounts payable to suppliers of materials and services required in the operations of the Company and its subsidiaries, the amounts of which are known or easily determinable, added, where applicable, of relevant charges, escalation and/or exchange costs incurred as of the balance sheet date. These balances are classified as financial liability not measured at fair value and were recognized at their amortized cost, which is not significantly different from their fair value.

Loans, financing and debentures


Loans and financing are measured by the restated amortized cost method. Fair value was calculated at interest rates applicable to instruments with similar nature, maturities and risks, or based on market quotations of these securities. Fair value for BNDES financing are identical to accounting balances, since there are no similar instruments, with comparable maturities and interest rates. In case of debentures, book and market value are identical, as there is no liquid trading market for these debentures as an accurate benchmark in the market calculation. These financial instruments are classified as financial liabilities not measured at the fair value.

Swaps
Swap operations are measured by the fair value. A the determination of fair value used available information in the market and usual pricing methodology: the face value (notional) evaluation for long position (in U.S. dollars) until maturity date and discounted at present value of clean coupon rates, published in bulletins of Securities, Commodities and Futures Exchange BM&F Bovespa. It is worth mentioning that estimated fair value of financial assets and liabilities were determined by means of information available on the market and appropriate valuation methodologies. Nevertheless, meaningful judgment was required when interpreting market data to produce the most appropriate fair value estimate. As a result, estimates used and presented below do not necessarily indicate the amounts that may be realized in current exchange market. a) Financial Instruments by category:

59

Loans and receivables ASSETS Cash and cash equivalents (note 5 ) Marketable Securities (note 6) Consumers, Concessionaires and Permissionaires - Clients (note 7) Swaps Concession financial assets (note 10) Other Receivable (note 11) 242 2,078 2,320

Parent Company 6/30/2010 Fair value though profit and loss 3,545 3,545 Fair value though profit and loss -

Total 3,787 2,078 5,865

Loans and receivables 15,077 1,535,593 369,973 107,919 2,028,562

Consolidated 6/30/2010 Fair value though profit and loss 708,861 5,735 45 714,641 Fair value though profit and loss 5,666 5,666

Total 723,938 5,735 1,535,593 45 369,973 107,919 2,743,203

Amortized cost LIABILITIES Suppliers (Note 15) Loans and financing (Note 16) Debentures (Note 17) Swaps (Note 16) 129 129

Total 129 129

Amortized cost 493,791 1,267,745 1,201,200 2,962,736

Total 493,791 1,267,745 1,201,200 5,666 2,968,402

b) Policy for utilization of derivatives The Company has a policy for utilization of derivative instruments approved by the Board of Directors determining the debt service protection (principal plus interest and commissions) denominated in foreign currency to mature within 24 months, forbidding any utilization for speculative purposes, whether in derivatives or any other risk assets. In line with provisions of this policy, the Company and its subsidiaries do not have futures contracts, options, swaptions, swaps with regret option, flexible options, derivatives embedded in other products, structure operations with derivatives and exotic derivatives. In addition, it is evidenced through the chart above that the single derivative instrument used by the Company and its subsidiaries is the non-cash currency swap (US$ versus CDI), whose Contractual Notional Value corresponds to the amount of foreign currency-denominated debt service to expire within 24 months. c) Risk management and objectives achieved The management of derivative instruments is conducted by means of operating strategies, aiming liquidity, profitability and safety. The control policy consists of permanently inspecting the policy compliance in the utilization of derivatives, as well as to monitor the rates contracted against those used in the market. d) Risk Factors During the normal course of its businesses, the Company and its subsidiaries are exposed to the market risks related to currency variations and interest rates, as evidenced in the chart below: Debt breakdown (excluding financial charges):

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Consolidated 6/30/2010 USD Currency Basket (BNDES) Foreign currency (current and non-current) CDI TJLP Other Local currency (current and non-current) Overall total (current and non-current) R$ 95,846 95,846 1,731,105 581,585 60,409 2,373,099 2,468,945 % 3.9 3.9 70.1 23.6 2.4 96.1 100 12/31/2009 R$ 99,721 444 100,165 1,763,892 521,542 39,079 2,324,513 2,424,678 % 4.1 4.1 72.7 21.5 1.7 95.9 100

On June 30, 2010, according to the chart above, the foreign currency-denominated debt is R$95,846, or 3.88% of total debt. Financial derivative instruments were contracted for the amount of foreign currencydenominated debt service to expire within 24 months, in the swap modality, whose notional value on June 30, 2010 stood at US$21,879, according to the policy for utilization of derivative instruments approved by the Board of Directors. Thus, if we deduct this amount from total foreign currency-denominated debt, the foreign exchange exposure represents 2.29% of total debt. Below we provide a few considerations and analyses on risk factors impacting on business of Grupo Light companies: Currency risk Considering that a portion of Light SESAs loans and financing is denominated in foreign currency, the company uses derivative financial instruments (swap operations) to hedge service associated with these debts (principal plus interest and commissions) to expire within 24 months. Derivative operations resulted in a R$189 loss in 2Q10 (a loss of R$1,134 on December 31, 2009). The net amount of swap operations as of June 30, 2010, considering the fair amount, is a negative R$5,621 (negative by R$5,554 on December 31, 2009), as shown below:
Light's Receivable US$+1 % .11 US$+1 % .11 US$+1 % .11 US$+1 % .11 US$+1 % .11 US$+1 % .11 US$+1 % .11 US$+1 % .11 US$+1 % .11 Light's Payable 11 CDI 1% 11 CDI 1% 11 CDI 1% 11 CDI 1% 11 CDI 1% 11 CDI 1% 11 CDI 1% 11 CDI 1% 11 CDI 1% Notional Fair Value Fair Value Fair Value Value Jun/11 Jun/11 Jun/11 Contracted (R$) Assets (R$) Liabilities (R$) Balance 2 2 22 1 1 11 /2/22 /1/11 1 1 (11 ) (11 ) 1 1 11 1/1/11 /1/11 1 1 11 11 ,11 (1 ) ,111 (1 ) ,111 1 1 11 1/1/11 /1/11 1 1 11 22 2 (111 ) (111 ) 1 1 11 1 1 11 /1/11 /1/11 1 1 (11 ) (11 ) 1 1 11 1 1 11 /1/11 /1/11 11 ,11 (1 ) ,111 (1 ) ,111 1 1 11 1 1 11 /1/11 /1/11 1 1 (1 ) (1 ) 1/1 11 1/1/11 1 /11 1 1 11 11 ,11 (11 ) (11 ) 1 1 11 1 1 11 /1/11 /1/11 1 1 1 1 11 1 1 11 /1/11 /1/11 11 ,11 1 1 1 1 Starting Date Maturity Date Total 1, 1 1 11 1 1 (1 ) ,111 (1 ) ,111

Institution Citibank Citibank Citibank Banco Itau Citibank Banco Itau Banco Itau Citibank Banco Itau

The amount recorded was already measured by its fair value on June 30, 2010. All operations with derivative financial instruments are registered in clearing houses for the

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custody and financial settlement of securities and there is no margin deposited in guarantee. Operations have no initial cost.

Below, the sensitivity analysis for foreign exchange and interest rates fluctuations, showing eventual impacts on financial result of the Company and its subsidiaries. The methodology used in the Probable Scenario was to consider that both foreign exchange and interest rates will maintain the same level verified on June 30, 2010 until the end of 2010, maintaining steady liabilities, derivatives and temporary cash investments verified on June 30, 2010. It is worth highlighting that, as this refers to a sensitivity analysis of the impact on the 2010 financial result, the realized amounts of financial expense and/or revenue until 2Q10 were considered, and charges projection for the next six months over debt balance on June 30, 2010. It is worth mentioning that the behavior of debt and derivatives balances will observe their respective contracts, and the balance of temporary cash investments will fluctuate according to the need or available funds of the Company and its subsidiaries. Risk of Exchange Rate Depreciation:
R$ Scenario (II)

Operation

Risk

Scenario (I): Probable (116.765) (40.428) (26.308) (29.633) (17.530) (943) (366) (1.557) (2.283)

Scenario (III)

FINANCIAL LIABILITIES Par Bond Discount Bond C. Bond Debit. Conv. Bib Bndes - Import Financ. KfW DERIVATIVES Swaps Reference for financial assets and liabilities Financial R$/US$ exchange rate (end of the period)

USD USD USD USD USD Cesta USD USD

(141.441) (49.232) (32.289) (35.751) (20.903) (1.136) (366) (1.764) 7.801

(166.393) (58.149) (38.355) (41.906) (24.301) (1.329) (366) (1.987) 17.884

+25% 1,8015 2,2519

+50% 2,7023

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Risk of Exchange Rate Appreciation:


R$ Scenario (IV)

Operation

Risk

Scenario (I): Probable (116.765) (40.428) (26.308) (29.633) (17.530) (943) (366) (1.557) (2.283)

Scenario(V)

FINANCIAL LIABILITIES Par Bond Discount Bond C. Bond Debit. Conv. Bib Bndes - Import Financ. KfW DERIVATIVES Swaps Reference for financial assets and liabilities Financial R$/US$ exchange rate (end of the period)

USD USD USD USD USD Cesta USD USD

(91.537) (31.397) (20.157) (23.439) (14.109) (750) (366) (1.319) (12.366)

(66.585) (22.480) (14.091) (17.284) (10.711) (557) (366) (1.096) (22.449)

-25% 1,8015 1,3511

-50% 0,9008

With the chart above, it is possible to identify that despite partial hedge against foreign currency-denominated debt (only limited to debt service to expire within 24 months), as R$/US$ quote increases, liabilities financial expense also increases but financial revenues of derivatives also partially offset this negative impact and vice-versa. Thus, cash is hedged thanks to the derivatives policy of the Company and its subsidiaries.

Interest rate risk This risk derives from impact of interest rates fluctuation not only over financial expense associated with loans and financing of subsidiaries, but also over financial revenues deriving from temporary cash investments. The policy for utilization of derivatives approved by the Board of Directors does not comprise the contracting of instruments against such risk. Nevertheless, the Company and its subsidiaries continuously monitor interest rates so that to evaluate eventual need of contracting derivatives to hedge against interest rates volatility risk. See below the sensitivity analysis of interest rate risk, evidencing the effects on scenarios variation results:

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Risk of Interest Rate Increase:


R$ Scenario (II)

Operation

Risk

Scenario (I): Probable 61.949

Scenario (III)

FINANCIAL ASSETS Temporary cash investments FINANCIAL LIABILITIES Debentures 5th issue CCB Bradesco CCB Bco ABN Amro Banking S/A Debentures 4th issue FINEM BNDES 2006-2008 FINEM BNDES 2009-2010 FINEM BNDES 2009-2010 TJLP+1 PROESCO Debentures 6th issue DERIVATIVES Swaps Reference for FINANCIAL ASSETS CDI (% YTD) Reference for FINANCIAL LIABILITIES CDI (% YTD) TJLP (% YTD)

CDI

66.278

70.534

CDI CDI CDI TJLP TJLP TJLP TJLP TJLP CDI

(244.350) (99.262) (46.475) (5.282) (14) (41.635) (9.206) (9.973) (178) (32.325)

(272.977) (110.859) (52.191) (5.614) (15) (45.533) (10.466) (11.240) (199) (36.860)

(301.668) (122.455) (57.907) (5.946) (16) (49.431) (11.727) (12.507) (219) (41.460)

CDI

(2.283)

(2.848) +25% 10,79% +25% 10,79% 6,47%

(3.408) +50% 12,05% +50% 12,05% 6,85%

9,52%

9,52% 6,09%

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Risk of Interest Rate Decrease:


R$ Scenario (IV)

Operation

Risk

Scenario (I): Probable 61,949

Scenario (V)

FINANCIAL ASSETS Temporary cash investments FINANCIAL LIABILITIES Debentures 5th issue CCB Bradesco CCB Bco ABN Amro Banking S/A Debentures 4th issue FINEM BNDES 2006-2008 FINEM BNDES 2009-2010 FINEM BNDES 2009-2010 TJLP+1 PROESCO Debentures 6th issue DERIVATIVES Swaps Reference for FINANCIAL ASSETS CDI (% YTD) Reference for FINANCIAL LIABILITIES CDI (% YTD) TJLP (% YTD)

CDI

57,545

53,063

CDI CDI CDI TJLP TJLP TJLP TJLP TJLP CDI

(244,350) (99,262) (46,475) (5,282) (14) (41,635) (9,206) (9,973) (178) (32,325)

(215,786) (87,668) (40,760) (4,949) (12) (37,737) (7,945) (8,706) (157) (27,852)

(187,285) (76,071) (35,044) (4,617) (11) (33,838) (6,685) (7,439) (137) (23,443)

CDI

(2,283)

(1,710) -25% 8.23% -25% 8.23% 5.70%

(1.131) -50% 6.93% -50% 6.93% 5.31%

9.52%

9.52% 6.09%

Credit risk It refers to the Company eventually suffering losses deriving from default of counterparties or financial institutions depositary of funds or temporary cash investments. To mitigate these risks, the Company uses all collection tools allowed by the regulatory body, such as disconnection for delinquency, debit losses and permanent monitoring and negotiation of outstanding positions. Concerning financial institutions, the Company only carries out operations with low-risk financial institutions classified by rating agencies.

Liquidity risk Liquidity risk relates to the Company's ability to settle its liabilities. In order to determine the Company's ability to satisfactorily meet its financial liabilities, the streams of maturities for funds raised and other liabilities are reported with the Company's statements. Further information on the Company's loans can be found in detail in Note 16. The Company has raised funds through its operations, from financial market transactions and from affiliate companies. These funds are allocated primarily to support its investment plan and in managing its cash for working capital and liability management purposes.

Management of financial investments focuses on short-term instruments in an attempt to achieve maximum liquidity and satisfy our expenditure requirements.

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The Company's cash-generation ability and low volatility concerning receivables and accounts payable over the year provide cash flow stability and thus reduce its liquidity exposure. The realization flow concerning future liabilities as per the relevant terms and conditions is summarized in the statement below:
1 to 3 months 154,625 3 months to 1 year 710,482 Consolidated 1 to 5 years 2,078,704 More than 5 years 228,428 Total

Interest rate instruments Fixed rate Loans, financings and debentures Interest rate instruments Fixed rate Loans, financings and debentures

3,172,239

1,670

32,524

114,016

182,968

331,178

e) Capital Management The Company manages its capital with the purpose of safeguarding its capacity to continuously offer return to shareholders and benefits to other stakeholders, in addition to maintaining the ideal capital structure to reduce costs. In order to maintain or adjust its capital structure, the Company reviews the dividend payment policy, returns capital to shareholders or issues new shares and sells assets to reduce the indebtedness level, for instance. f) Hierarchical Fair Value There are three types of classification levels for the fair value of financial instruments. This hierarchy prioritizes unadjusted prices quoted in an active market for financial assets or liabilities. The classification of hierarchical levels can be presented as follows: Level 1 - Data originating from an active market (unadjusted quoted price) that can be accessed on a daily basis, including at the date of fair value measurement. Level 2 - Different data originating from the active market (unadjusted quoted price) included in Level 1, extracted from a pricing model based on data observable in the market.

Level 3 - Data extracted from a pricing model based on data that are not observable in the market.

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6/30/2010 ASSETS Cash and cash equivalent (note 5) Marketable Securities (note 6) Swaps 723.938 5.735 45 729.718

Consolidated Measurement of Fair Value Identical Similar markets markets Level 1 Level 2 723.938 5.735 45 729.718

Without active market Level 3 -

LIABILITIES Loans and Financings (note 16) Debentures (note 17) Swaps (note 16)

1.267.745 1.201.200 5.666 2.474.611

1.267.745 1.201.200 5.666 2.474.611

No financial instrument classified as Level 1 or 3 was observed in the analysis year, and there was no transfer from one level to another in the same year.

31.

INSURANCE

On June 30, 2010, Light Group had insurance covering its main assets. The assumptions of risks adopted, given their nature, are not included in the scope of a special review, accordingly, they were not audited by independent auditors. Insurance coverage as of June 30, 2010 is considered sufficient by Management, as summarized below:
RISKS Directors & Officers (D&O) Civil and general liabilities Operating risks* Effective Term From To 8/10/2009 9/25/2009 10/31/2009 8/10/2010 9/25/2010 10/31/2010 Amount Insured US$20.000 R$20,000 R$ 3,572,187 Premium US$ 81 R$452 R$1,632

*The Maximum Limit of Indemnification (MLI) stood at R$300,000.

32.

SEGMENT REPORTING

Segment reporting was prepared according to CPC 22 (Segment Information), equivalent to IFRS 8, and is reported in relation to the business of the Company and its subsidiaries, identified based on their management structure and internal management information.

The Company's Management considers the following segments: power distribution, power generation, power trading and others (including the holding). The Company is segmented according to its operation, which has different risks and compensation.

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Segment information on June 30, 2010 and December 31, 2009 are presented below:
Distribution Generation Trading Other Eliminations Consolidated 6/30/2010

Current assets Non-current assets Investments Property, plant and equipment Intangible assets Current liabilities Non-current liabilities Shareholders' equity

2,406,249 2,153,886 16,449 184,848 3,386,194 1,719,045 3,709,200 2,719,381

93,629 1,100 2,002 1,427,747 123,498 127,710 671,218 849,048

63,240 1,009 2,181 4,822 32,537 1,767 36,948

8,251 180 3,231,656 1,106 1,097 2,946 19 3,239,325

(83,671) (240,667) (3,229,578) (83,498) (240,840) (3,229,579)

2,487,698 1,915,508 22,710 1,618,523 3,510,789 1,798,740 4,141,364 3,615,123

Distribution

Generation

Trading

Other

Eliminations

Consolidated 12/31/2009

Current assets Non-current assets Investments Property, plant and equipment Intangible assets Current liabilities Non-current liabilities Shareholders' equity

2,592,400 2,324,417 16,448 180,658 3,306,009 1,632,313 4,088,365 2,699,254

241,920 668 150 1,414,844 116,971 256,089 733,617 784,847

49,947 1,889 2,581 4,336 29,473 1,455 27,825

191,464 68 3,514,356 730 151,750 19 3,553,680

(288,818) (307,244) (3,513,147) (288,818) (307,244) (3,511,978)

2,786,913 2,019,798 20,388 1,600,568 3,422,980 1,780,807 4,516,212 3,553,628

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Segment reporting:
Consolidated Consolidated Distribution OPERATIONAL REVENUE Billed supplies Unbilled supplies Supply - Electric Power Construction revenue Other DEDUCTIONS TO REVENUE Billed sales - ICMS (State VAT) Consumer charges PIS (Tax on Revenues) COFINS (Tax on Revenues) Other NET OPERATIONAL REVENUE OPERATING EXPENSES AND COSTS Personnel Material Outsourced services Energy purchased Depreciation Provisions Construction cost Other Equity in the earnings of subsidiaries FINANCIAL INCOME Financial revenue Financial expenses 4,735,648 4,173,175 (54,957) 10,841 222,436 384,153 (1,693,370) (1,168,052) (264,857) (47,182) (211,981) (1,298) 3,042,278 (2,424,548) (104,117) (10,683) (147,160) (1,647,628) (142,670) (129,337) (222,436) (20,517) (110,775) 110,500 (221,275) Generation 169,307 166,273 3,034 (21,658) (7,222) (2,574) (11,856) (6) 147,649 (78,796) (9,810) (347) (7,104) (7,150) (30,738) (9,325) (14,322) (20,259) 3,929 (24,188) Trading 82,774 56,843 25,931 (13,550) (9,667) (538) (2,480) (865) 69,224 (57,795) (1,536) (5,867) (11,108) (38,319) (306) (659) 624 699 (75) Other (3,527) (2,125) (6) (1,037) (359) 365,720 370 370 Eliminations (37,566) (28,927) (8,639) (37,566) 37,566 37,386 180 (365,720) (19,332) 19,332 6/30/2010 4,950,163 4,173,175 (54,957) 205,030 222,436 404,479 (1,728,578) (1,177,719) (272,079) (50,294) (226,317) (2,169) 3,221,585 (2,527,100) (117,588) (16,903) (166,409) (1,655,711) (173,714) (138,662) (222,436) (35,677) (130,040) 96,166 (226,206) 6/30/2009 Restated 4,666,371 3,954,500 (21,026) 178,897 226,605 327,395 (1,540,407) (1,075,675) (237,542) (42,005) (183,515) (1,670) 3,125,964 (2,626,429) (138,830) (10,938) (122,708) (1,761,618) (171,756) (150,589) (226,605) (43,385) (24,071) 79,527 (103,598)

INCOME BEFORE TAXES Social Contribution Income tax NET INCOME

506,955 (45,187) (135,856) 325,912

48,594 (4,535) (12,506) 31,553

12,053 (1,050) (2,880) 8,123

362,563 362,563

(365,720) (365,720)

564,445 (50,772) (151,242) 362,431

475,464 (62,325) (172,593) 240,546

33.

LONG-TERM INCENTIVE PLAN

On June 30,2010 the subsidiary Light Sesa set up a provision of R$1,059 referring to the vesting period of the long-term incentive plan, in the modality phantom options incurred until the second quarter of 2010 against personnel expenses and a provision amounting to R$2,118 in the year of 2010.

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34. STATEMENT OF VALUE ADDED FOR THE PERIODS ENDED JUNE 30


LIGHT - S.A. STATEMENTS OF VALUE ADDED FOR THE FISCAL YEARS ENDED JUNE 30 ( In thousands of reais )
Parent Company 1/01/2010 to 6/30/2010 Revenues Sales of goods, products and services Other revenues Allowance/reversal of allowance for doubtful accounts Input acquired from third parties Costs of products, goods and services sold Material energy outsourced services other Gross value added Retentions Depreciation, amortization and depletion Net added value produced Added value received in transfers Equity income Financial income Total added value to distribute Distribution of added value Personnel Direct compensation Benefits Government Severance Fund for Employees (FGTS) Other Taxes, fees and contributions Federal State Municipal Third party capital remuneration Interest Rental Other Remuneration of own capital Dividends Retained earnings / accumulated losses for the period (1,400) (1,400) (1,400) (1,400) 365,958 365,588 370 364,558 364,558 2,015 1,850 110 55 110 110 2 2 362,431 362,431 1/01/2009 to 6/30/2009 (847) (847) (847) (847) 263,258 262,155 1,103 262,411 262,411 21,573 21,505 54 14 49 49 243 241 2 240,546 240,546 Consolidated 1/01/2010 to 6/30/2010 4,811,370 4,950,163 (138,793) (2,058,264) (1,655,711) (402,553) 2,753,106 (173,714) (173,714) 2,579,392 96,166 96,166 2,675,558 2,675,558 99,993 76,542 15,180 7,479 792 1,973,715 790,447 1,178,278 4,990 239,419 211,224 16,574 11,621 362,431 362,431 1/01/2009 to 6/30/2009 4,539,663 4,666,371 (126,708) (2,158,460) (1,761,618) (396,842) 2,381,203 (171,756) (171,756) 2,209,447 79,527 79,527 2,288,974 2,288,974 117,771 89,698 17,063 9,862 1,148 1,808,475 728,203 1,076,275 3,997 122,182 101,187 10,178 10,817 240,546 240,546

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35.

SUBSEQUENT EVENTS a) Tariff adjustment

On November 3, 2010, ANEEL approved the definite amount for the Tariff Adjustment of Light SESA. The result ratified by ANEEL considers a Tariff Adjustment of 6.99%, which comprises two components: structural, corresponding to 8.31%; and financial, which will be valid up to October 2011, corresponding to 1.33% negative. Considering the removal of the financial component from Lights current tariffs, corresponding to 4.77%, this proposal represents an average tariff increase to final consumers of 2.20%. b) Option Exercise On October 7, 2010, Enlighted Partness Venture Capital LLC (ENLIGHTED) exercised the put option of its quotas in Luce Investiment Fund (Luce Fund), to the Companhia Energtica de Minas Gerais CEMIG or to third party appointed by it, object of the Option Agreement for the Sale of Shares and other Covenants (Option) entered into on March 24, 2010 between CEMIG and ENLIGHTED. Luce Fund holds 75% of quotas in Luce Brasil Fundo de Investimento em Participaes which in turn holds, through Luce Empreendimentos e Participaes S.A. (LEPSA), 26,576,149 common shares issued by Light S.A., representing 13.03% of its voting capital. The exercise of the Option does not alter the validity of the shareholders agreement in force, entered into on December 30, 2009 and available on the website of the Brazilian Securities and Exchange Commission (CVM). c) Dividends paid At the Extraordinary General Meeting held on April 28, 2011, the payment of dividends was approved based on income determined on December 31, 2010, in the amount of R$350,979, and payment scheduled to May 18, 2011. d) Debentures issue In May 2011, Light SESA completed its 7th issue of simple, non-convertible into shares, unsecured debentures, totaling R$650,000, through public offering with restricted placement efforts, under the terms of CVM Rule 476, under a firm commitment basis. Debentures were issued on May 2, 2011, and funds were included in the cash on May 5, 2011. The remuneration was fixed at 100% of CDI rate + 1.35% annual spread, defined in a bookbuilding process, and interest will be paid in half-yearly installments and final maturity scheduled for May 2, 2016.

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In May 2011, Light Energia concluded its 1st issue of simple, non-convertible into shares, unsecured debentures, totaling R$170,000, through public offering with restricted placement efforts, under the terms of CVM Rule 476, under a firm commitment basis. Debentures were issued on April 10, 2011, and funds were included in the cash on May 12, 2011. The remuneration was fixed at 100% of CDI rate + 1.45% annual spread, and interest will be paid in half-yearly installments and final maturity scheduled to April 10, 2016. e) Redentor Operation At the Extraordinary General Meeting held on April 28, 2011, the overall amount of annual compensation of the Companys Board of Directors and Board of the Executive Officers was approved to R$14,915 to be paid in 2011. f) Redentor Operation The Company announced through a Material Fact published on May 13, 2011 that Parati S.A Participaes em Ativos de Energia Eltrica (Parati), a closely-held company, acquired 58,671,565 common shares, representing 54.08% of the total capital stock of Redentor Energia S.A. (Redentor), an indirect shareholder of the Company. Said shares were held by Fundo de Investimento em Participaes PCP (FIP PCP).

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BOARD OF DIRECTORS MEMBERS Aldo Floris Ana Marta Horta Veloso Djalma Bastos de Morais Raul Belens Jungmann Pinto Firmino Ferreira Sampaio Neto Luiz Carlos Costeira Urquiza Carlos Roberto Teixeira Junger Srgio Alair Barroso Maria Silvia Bastos Marques Carlos Alberto da Cruz Elvio Lima Gaspar FISCAL COUNCIL ALTERNATES Lauro Alberto de Luca Csar Vaz de Melo Fernandes Wilson Borrajo Cid Fernando Henrique Schuffner Neto Carlos Augusto Leone Piani Paulo Roberto Reckziegel Guedes Ricardo Simonsen Luiz Fernando Rolla Almir Jos dos Santos Carmen Lcia Claussen Kanter Joaquim Dias de Castro

MEMBERS Eduardo Grande Bittencourt (Chairman) Isabel da Silva Ramos Kemmelmeier (Member) Marcelo Lignani Siqueira (Member) Victor Adler (Member) Aristteles Luiz Menezes Vasconcellos Drummond (Member)

ALTERNATES Ricardo Genton Peixoto Ronald Gasto Andrade Reis Eduardo Gomes Santos Gabriel Agostini Ari Barcelos da Silva

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BOARD OF EXECUTIVE OFFICERS Jerson Kelman Chief Executive Officer Joo Batista Zolini Carneiro Chief Financial and Investor Relations Officer Evandro Leite Vasconcelos Energy Officer Paulo Carvalho Filho Corporate Management Officer Ana Silvia Corso Matte Personnel and Legal Officer Jos Humberto Castro Distribution Officer Paulo Roberto Ribeiro Pinto New Business and Institutional Officer

CONTROLLERSHIP SUPERINTENDENCE Luciana Maximino Maia Controllership Superintendent CPF 144.021.098-50 CRC-RJ 091476/O-0 Suzanne Lloyd Gasparini Accountant Accounting Manager CPF 081.425.517-56 CRC-RJ 107359-0

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