Antonio Carlos Vélez Braga - Investor Relations Officer Luiz Fernando Rolla - Chief Institutional Relations and Communication Office Mauro Borges Lemos - Chief Executive Officer Fabiano Maia Pereira - Chief Officer for Finance

Vinicius Canheu - Crédit Suisse Paulo Ferreira - Bradesco Vinicius Tsubone - UBS Antonio Carlos Vélez Braga: Good afternoon to all of you. My name is Antonio Carlos Vélez Braga, Investor Relations Officer of Cemig. We’ll now start the transmission of our webcast and results of Cemig related to the First Quarter 2015 with the presence of Dr. Mauro Borges Lemos, Chief Executive Officer; Dr. Fabiano Maia Pereira, Chief Officer for Finance, Investor Relations and Dr. Luiz Fernando Rolla, Chief Institutional Relations and Communication Officer. This transmission is broadcast maybe follow-up by means of telephone 55-11-21-88-0155 or 55-11-21-88-0188, and also through our Web site. To start-up this presentation, we hand it over to our Chief Institutional Relations and Communication Officer, Dr. Luiz Fernando Rolla.

Good afternoon to all. It's always a renewed pleasure to conduct this video conference with you gentlemen and ladies for disclosing our quarterly results. Some 1.5 months ago we disclosed our last year’s results and this is the first quarter of this current office and administration and I invite you to read the disclaimer because we will touch on very strategic points here, our indicators were rather positive and they do reflect the strategy that has been adopted by current administration. Mauro, our CEO, what would you say, this first quarter of our management?

Good afternoon to all of you. The assessment we make is that in fact our results have been pretty positive, as made very clear from the point of view of net income EBITDA and net profits, our position is very solid and that's what we have to present to you investors. We are highly pleased with these results and my personal commitment and of the entire executive board of Cemig is in the sense that we should pursue consolidate result for this year that will be true to the first good results in 2015. We will discuss the results in detail during our presentation. But to sum up what happened during this first quarter, we had a maximization of our results as a function of our trade policy that has been implemented for some time already and have brought up major results in addition to some very relevant factors happening in the first quarter and that not only impacted the quarter's results but they always bring benefits into the future. One of them the consortium made up by Cemig and Light which won the Itaocara auction which had been dragging for over 10 years and we granted the concession for the next 30 years using these methods. Also the tariff adjustments occurred in April with general impact of 7% on our distribution business, this means transfer of costs that have been incurred over the past 12 months. In addition Aliança, our alliance, is bringing the first results with substantial accounting profit that we will discuss to you in detail in a few moments. That reflects the capacity of the company to restrict itself, to reorganize itself, having viewed as rather complicated project and we could make a very attractive design of this effort to our shareholders, yes, indeed you are, all right. This project we have been pursuing for a long time and now very successfully winning the auction and the competitor that would really go into this project brings a very positive result. We have a buildup of resources for this project. We are very optimistic about these results. I do believe also that this signal, very importantly that Cemig, while this is consortium made up of Cemig and Light which is an associated company to us, that signal that we are back to auction, that's important because as long as these auctions are attractive and made feasible to gain returns to our associates, so the participation in greenfield projects for generation of Cemig is part of our DNA and if it's part of our DNA and if we do that so patently we consider that this is a very important route to be pursued by the Group, we are convinced of that. We are strongly working on the formatting of these auctions, attracting interested investors and Federal Government and the Union of Brazil is interested in attracting such investors. We must work to make these auctions to be solid in bringing undisputable returns to investors and Cemig's associates and shareholders. So this is our commitment and we are strongly pursuing this target, this goal and this auction includes public consultation and audit. On the one hand we are presenting our competence and will be the part of the Group to participate and on the other side the participation on the designing of the format of these auctions, they can become a long-term investment, this is our characteristic but we don't work on short-term speculative power market, what we know and what we do is to enter partnerships for long-term projects and this auction perfectly reflects this idea, the auction good in itself also is a sign that our Board is mobilizing to make our Group evermore competitive into future auctions. We reduced and mitigated substantially the risk involved in the hydroelectric investment and project with investments made in recent years we got to the point that we are familiar with virtually all the aspects of the project and then we managed to reduce the risk in such a way that we'll be able to ensure attractive returns to our shareholders. So this balance of risk and return in Itaocara case was important for the company. Yes, first there was an intense debate in house. We have been discussing this project for over 10 years if I'm not mistaken and we finally arrived at a design under which the return of this project to Cemig reaches two decimal figures and with the participation of the other managers and managing entities. Another important aspect of the first quarter early in April we could see the annual adjustment, common ordinary adjustment of tariff that's just a transfer of costs incurred over the previous 12 months, this has mitigated a lot the risks of our operations, the regulatory body took on costs that were before shouldered by distributors and also future costs had reached a very high threshold and this ensures subsidies to low income consumers and also the purchase of additional power energy by the distributors. The cost of distribution therefore was stable, remained stable without any transfer of cost to consumers not even of inflation, this will get to the benefit of our consumers. Yes indeed this is a concern of ours, a commitment and we believe that in fact we should go for these tariffs that are affordable that can expand the capacity of our consumers to use the energy that's very strong distance you're taking, tariff adjustment included flags and included extraordinary adjustments because we had had non-ordinary aspects that would justify that, but in real fact in the longer run we see affordable tariffs as means to expand our consumer base and to make feasible economic growth of Brazil in contrast with most distributors in Brazil Cemig has cooperated industrial consumers with a heavy weight which we negotiate with both in the free market and regulated market and captive market. So this brings very differentiated portfolio, residential, consumer, commerce and industry consumers. This varied portfolio is one of the most important assets of Cemig and this is important for all consumers and this is the way we work anyway. I believe that we are in fact pretty much concerned with this huge effort we're making to reduce cost and increase productivity in Cemig distribution sector; this is something that we should pursue further into the longer run. Unfortunately, this is not reflected yet in the first quarter, the increases are not 100% reflected in the first quarter but in the upcoming quarters we should see even higher impact on our revenue, positive impact that will also reflect on the results of Cemig distribution most of the costs that made up are CVA are now being transferred through the flags. Another important impact on our results was the recognition in the first quarter of the fair value as our President already mentioned as we had an alliance with valley measured mostly relevant project for Cemig and there is stockholding reorganization is bringing 735 million in accounting impact but it goes far beyond it, yes indeed. The other thing is our main drive to growth in generation; we have high levels of confidence in engineering and if you add to that private vehicle for growth, this brings us extreme robust structure to increase our capacity for generation in Brazil. We have seen already huge increases in development and now with this new vehicle we have all the ingredients for an ever wider participation in the power sector in Brazil for cash generation that's generation of electricity does bring us predictability to our cash flow which is much to the satisfaction of our financial directories in it. Yes, positively in very short-term, we believe that if we already bring satisfactory results and payment of dividend to Cemig, I should remind you that our leverage is almost zero, so our capacity to growth is enormous. Another aspect that should be stressed here is that our partner is not just companion on our voyage, but it's a long-term strategic partners namely Valley, it will be our partner in the growth of our alliance and it's a major consumer of our power. So CVAs that are very much consolidated and brings a lot of insurance also guarantee for performance. These are two partners one look for the other. They get along very well with a long tradition of cooperation, mutual cooperation, and my colleagues here have had many opportunities to talk to them and we are mutually satisfied to see this alliance that in fact both on Valley and significant sites. This is a partnership that came to state that's a perfect scenario Valley wins Cemig wins and all those who invest with us in this new resource will win as well. We have major concern with the sustainability of the company's results not only from the point of view of finance and economy, but also the communities we serve so operating performance carried a standard these are major concerns and constant concerns of Cemig. It's a corporate principle for us to watch for the three aspects of sustainability financial results respect for community views of resources into the future for the new generation and protection of environment. This is corporate principle for us and we have been recognized for that among the communities we work with and we are at par with the companies that have the highest spenders of concern in these aspects. So in this first part, we talked a little bit about our vision, our views on the results and what we should expect having view the wins of the first quarter and now we will provide more figures to view, the figures so far have been very positive, net income have grown 24% reflecting all that environment reflecting the strategy that has been adopted and this allowed for these results, we had seasonal effect and we are going along the same actions as other companies in the sector having view the reduction of risks, seasonal risks and we had this natural hedge by buying energy. This brings stability to our revenues and our future results, this is a guideline we are following up very closely despite the fact that the context was not too favorable, GSF was pretty low in this first period. We believe that efficiency in managing the trade, the commercialization having viewed the hydro prices the adverse hydrology and we adopted this hedge that was built accordingly and it was extremely relevant so that we could cross this dessert so to say 2015 which is extremely hard period for the electrical sector as all investors know, from the point view of hydrology and we could view that as some of these hedges and the commercialization is major highlight in these results and this will happen also in coming quarters. The strategy was very well developed and the results are there, so how we participate very significantly in the Brazilian market. Also the impact coming from the consolidation of Gasmig acquisition almost 100% of Gasmig is ours now, this reflects in the revenues with an additional R$426 million, as a result of incorporation of Gasmig. Operating expenses also grew from 50%, but our slide shows the reason for that that has to do with amount of energy purchased. This has been very high in recent years due to the dispatch of thermal plants the GSF is lower and this purchased electricity compounded through our hedge which is not necessarily a negative value although into a substantially increased the expenses and as a percentage terms as well, but it brought positive effect where aspects are pretty much under control even that Dr. Fabiano and nothing that would be a reason for concern, gas bought for reselling reflects the impact of the acquisition of 5% of Eletrobras, EBITDA showed an increase of some 22% and if our President is willing to explain to what happened to our EBITDA. We had a major performance 2.5 billion and that was an important indicator for the remainder of the year. Yet an increase of 22.3% as compared to the quarter in 2014. This was partially a result of our alliance within the other part comes from the management in commercialization and internal efficiency gain of the company. This still remain with the commitment to improve this result and this will be our pursuit during the rest of the year. One point it means our performance is still very positive in comparison with the remainder of the market, in addition if we add that to the measures we are about to discuss, this performance will be even better into the upcoming quarters. As a consequence of revenues and -- or EBITDA 18% was the consolidated revenue or net income. It's a little lower but it's understandable that last year PLD or spot market had a very expensive price which has now turned in R$88 per megawatt hour in this first quarter. So we have to adjust that considering the gains from Aliança. Still a very positive result, yes one of the best results of this sector in this quarter, again demonstrating our constant pursuit for positive results. And it is good sign for the rest of the year, I have no doubt about it, this result in the first quarter was a very strong focus that our Board had in view and we wanted to achieve and we did achieve this very positive result, we will keep on working strongly to achieve consolidated results comparable with this first quarter, this is the favorite line for Dr. Fabiano that our debt profile consolidated value of R$11.9 billion, some indicators here will be commented on by Dr. Fabiano. As we look at the profile consolidated debt profile of Cemig, we listed as an observation that a good deal of this 2015 debt was rolled over but is not reflected here because debt was started in March. Capital cost of the company, of the debt has increased a little bit over recent months because the long-term interest rate has been increasing but as we see the leverage of the company in itself and we have all indicators under control and that allows us to look ahead with confidence to improve this profile. This will be a pursuit of ours this year and into the next years. It's important highlight also that the debt although it's indexed to PC and IPCA we have CDI and it is IPCA, we have a hedge for it and our index is IPCA. And our debt is determined by the Cemig which is the official interest rate -- and if we consider these two factors we see an advantage for company of a scale such as Cemig GT also in a very positive position some R$6 billion in debt but the relationship between this and EBITDA is very favorable. We are very much concerned Dr. Fabiano to elongate that profile into the next years, it's restructuring of this debt and we are doing that beginning in this 2015. Yeah we are looking at the possibility of reducing the debt volume at GT, Cemig GT, this is already in our pipeline and are also working on potentially that index to inflation. This brings more flexibility to the company and to help us drive even further. Distributors as well as Cemig D despite all the tight conditions in 2014 it is still at a very reasonable position in terms of debt profile, of course not all the hedging mechanism and protection mechanism is reflected here, the tariff flags adopted by the regulatory bodies. So we are still to absorb a little bit of this impact in the second quarter but in any event this performance is rather positive and predictable and with our strategy to restrict the debt we will elongate with stretch that for our distributor division, tariff revision and flags have reduced substantially our perception of risk. The perception of risk from our investors was looking at some risks to the cash flow of the companies from the point of view of investors last year. But with our measures we managed to reduce these risks and even so we adopted further measures for protecting our cash flow, restricting execution of our investment program in the first quarter we curved a few of our investors -- investments rather is not to say that are not going to make those investments we will recover that over the rest of the year. But for the sake of protection of our cash flow we did that. And if you look at the figures for 2015 and the plan and the executed we restricted a little bit I think in the beginning of the year for regulatory tranquility but we did invest some 25% our plans, so if we look at business just the first water it’s well evenly distributed over the year as compared to last year and it’s a little lowering a bit but it has to do with difference between the two years. Last year, our investment program was pretty robust and in comparison with this year it looks like that there has been reduction that actually what happened was that investments in last year was outstanding. But these next slides bring a very positive indicators generation of cash is pretty positive even having due the pretty complicated situation we went through during the first semester as for context of the economy that reflects the hard work of the company over last month, we have kept track of that very closely and this you can see our capacity to generate cash to meet our commitment. We are rolled over some are part of the debt we liquidated matured debt and we still have good cash to go through the rest of the year without any much concern. Also, if you compare as far as step down markets are concerned if we see a very positive evolution by March we saw their negative performance but as tariff extraordinary tariff adjustment and flag the perception of investor improved pretty much and our shares valued pretty much above the average in the sector that Bovespa and for example still being built they did have also a very positive performance in the capital markets. These were the points that we wanted to bring to you. We’re now open for questions-and-answers and we are ready to approach any other points that may have not been looked upon our presentation.

[Operator Instructions]. Vinicius Canheu from Crédit Suisse.

I would like to know if you have any update on the core disputes concerning the three main hydro plants. Apparently there have been no news but we just saw that this has been brought back to the core agenda. Could you anticipate any further developments on that?

What I could advance to you is that as planned we have we have started off our process for negotiating the three plans we defined together with the union -- Brazilian union parameters for such negotiations personally evolved in the negotiation with the federal government and Eduardo appointed by our President to conduct negotiations with Cemig, on the part of Cemig I have been conducting dealings with the Minister personally myself and my perspective on that is very positive, I do believe that there are interests, mutual interests the federal government and state government and Cemig control by of course by the state ministers, there is common interest to get the solution where everybody will win, other things we took on the direction of the company, we have been saying that the market that we can transform this gain which look like it’s all or nothing type of gain to a win-win situation. In that direction we are following in the negotiations with the federal union. As you know negotiations of the scale require time, take time and you really need time to wrap up all the aspects not to leave any room for further litigation so that we can get to position where we’ll be comfortable that decision will be to the benefit that of the company. It’s a complex negotiation and that sense we have defined from the impact of this negotiation that the time variable shouldn’t be the most important variable, one solution this year as everybody knows is exceptionally restricted here as for water resources and this is an external factor that pervades little bit the process of seeking a negotiated solution. We know that we have knowledge that foreign market from beginning we've mentioned that -- and we have no deadline or final date to define the end of negotiations. We believe that the more time -- if we have a little more time, we can arrive at beneficial solution by the second semester this year that will be good for Brazil and for all concerned.

Our next question comes from Paulo Ferreira, Bradesco.

I would like to ask if there is any concern on the part of the company or the market in general as regards to leverage. One the perspective for distributing dividends in 2015 will it be 50% as before or will it be anything below that?

I’ll request our financial officer to reply.

First I would like to make it very clear that the commitment on the part of company remains strong, the statutory dividends are 50% of the profit. What we have done at this moment was just prudential move and last month assembly meeting approved 25% and that we reserve 25% for future dividend and this will be paid as soon as the scenario of uncertainties is overcome. To add a little bit to this, the issue of indebtedness as mentioned our conviction is that our indebtedness level is pretty low. If you look at all the relevant indicators it’s a fact that the distributor going through period of increased indebtedness, due to that happened last year and early this year, but with this new policy of our [translated] costs especially non-convertible costs and this will by the end of the year and improve substantially our performance.

[Operator Instructions]. Our next question comes from Vinicius from UBS.

Perhaps you could give us more colorful description of what’s happened with Allianz? Are you going to focus on more known assets existing assets or what?

Our strategy as we have commented during our presentation is to make it into our vehicle for growth in generation from mid to big Gemini and Greenfield project some of them already defined two turn our alliance into companies that will be much more have much more capacity than the initial 1,200 megawatt. This will enable accelerating this growth and our goal is to grow very strongly into the next five years in five years it will probably become one of the most important generating companies in the country.

[Operator Instructions]. We now close our Q&A session. I would like now to hand over the floor to Dr. Fernando Rolla for his final remarks.

Before I would like to hand it over to our CEO I should remind you that on the 20th annual meeting with analysts in expressing the views, it's a traditional event in the market and for Cemig I extend invitation to all of you if you can’t be present you can follow the event through the telecommunication media we will put at your disposal, we will discuss the strategy of Cemig for the next years. And now for final remarks and to close the meeting our Chief Executive Officer, Mauro Borges Lemos.

I would like to close this session by saying first that we restate firmly our commitment taken when we took office in this new administration. Our shareholders, our investors, our fundamental to us we will seek, consolidated results consistent with what we have already achieved in the first quarter and reaffirming the commitment is important to me and to us, and how do we plan to deliver these results that is always a question that we should revisit first we believe that competence Cemig’s competence as the company involved in generating transmission and distribution of energy involves major gains in operational synergy and then operating at low cost at these three specialized dimensions at Cemig is extremely important. And secondly we are working on a growth strategy of Cemig as a group. We today are a group relevant group we have private vehicles in dimensions that we consider the most significant for our growth involving generations, creating this private vehicle which is Allianz Energy with [Vali] and consolidation of Hanover as company generating renewable energy. Hanover is going to see that this recent operation with a Cemex Group aims at extending capacity to invest. We are not selling any of our assets. We are rather establishing long-term partnership with the leading U.S. company in renewables so that we can have assets for generation in Hanover. We have backlogs with PPAs already structured and auctions already done. We have already guarantee on long-term contracts and we want to speed up investments for cash generation by operating these assets that are now in our backlog. Our pipeline is of high quality and that's what we want to press ahead. Our strategy is to have this financial instrument for speeding up our renewables. We are already a leading company in renewables in Brazil. We will go on with this with the participation of Cemig and Cemig's Group in transmission. Our orientation is that our capacity in engineering should be added to this private vehicle which is tied, which will extend our participation in the transmission market of Brazil. And then operation and maintenance in transmission, we can operate at very low cost. So we must use our competence in engineering to press on with the growth of the factor in Brazil. As far as the distribution is concerned, we have Cemig distributor which holds the largest market of distribution in Brazil. This company is a major asset of ours and together with that we have Light as a private participant and we by that by means of these actions we will take important steps towards growing together, Cemig and Light. These are the instruments we have with a big capacity for synergy and this can be put at a service of further growth. This is commitment of the Board and we should deliver by the end of the year results to the shareholders that's compatible to the size and scale of the company we lead. And as a public utility company we must also deliver affordable quality services. This is a commitment that we are restating at every opportunity and I do it again right now. These are not incomparable profits and returns are not incomparable with the public utility role of Cemig. On the contrary the more we deliver services affordable services, quality services, the more we would be able to grow. One side reinforces the other, quality affordable services means greater returns to our investors. So this strategic view will be reflected in our economic financial projection to be submitted on the 25th during our event. We will be transforming this strategic view into figures but also into results for the future. To wrap up our conference, I would like to thank you all for your attention. I should mention that our investors department, investor relations department are here and Mr. Fabio is here, you probably reserve him, offered questions for him and he is available 24x7 to you and share our strategy for relationship with investors. Thank you.

So the video webcast is now closed. We thank you for your participation and have a nice afternoon.