Good afternoon and thank you for waiting. Welcome to Companhia Paranaense de Energia Copel Conference Call to present the second quarter of 2016 results. We would like to inform you that all participants will be in a listen-only mode during the Company’s presentation. Afterwards, we will have a question-and-answer, when further instructions will be given. [Operator Instructions] Before proceeding, we would like to clarify that forward-looking statements that might be made during the call related to Copel’s business perspectives, operating and financial projections and targets are beliefs and assumptions of the Company’s management as well as information currently available. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties, and assumptions as they refer to future events and therefore will depend on circumstances that may or may not occur. General economic conditions, industry conditions, and other operating factors may affect the future performance of Copel and may lead to results that differ materially from those expressed in such forward-looking statements. Today with us, we have Mr. Luiz Fernando Leone Vianna, CEO of the Company; Mr. Luiz Eduardo da Veiga Sebastiani, CFO and Investor Relations Officer; Mr. Jonel Nazareno Iurk, Business Development Officer; Mr. Sergio Luiz Lamy, President of Copel GeT; Mr. Ricardo Goldani Dosso, President of Copel Renováveis; and Mr. Francisco Cesar Farah, CFO of Copel Telecom. The presentation that will be made by Copel’s management may be accompanied at the Company’s website, www.copel.com/invesor relations. Now, we would like to give the floor to Mr. Luiz Fernando Vianna, CEO of the Company.

Good afternoon and welcome to our conference call about the results of the second quarter of 2016. 2016 has been a very intense year, so far we are crossing. We are having medical, economic, social and even sports events, which gives us a sensation that a lot is changing. As far as Copel is concerned, 2016 is also a very intense year. Challenges are overcome every day and with a lot of work and results, we have been achieving our objectives and improving our Company. One of the objectives was reached at the beginning of the fourth tariff review cycle of Copel Distribuição. We worked with much dedication in the last two years to improve the quality of the services delivered and we carried out a robust investment program in the last four years and practically doubled the size of our distribution company, which now has an asset base of R$4.9 billion. All of these investments, besides giving us a higher return to our shareholders, is perceived by our customers through the recognition of Copel's service quality. In 2016, Copel Distribuição was voted for the third consecutive year as the best energy distribution company in Brazil in the opinion of customers. This was the fifth time in the last six years that we won this award and this makes us very proud because it concerns the quality of our service, which is delivered to a customer that is very demanding. At the beginning of the fourth cycle also brought about a very interesting aspect to our customers charge by Copel distribution dropped on average 13% being the residential class, which represents the most in the captive markets had a reduction of 14.3%. This reduction, besides representing savings for our customers is positive also for Copel because it should encourage a rebound in consumption and reduce delinquency factors that have been affecting the distribution company results in the last few quarters. In the segment of transmission, the Ministry of Mines and Energy brought news about the RBSE indemnification, which are the transmission assets existing in May 2000 by means of ordinance 120 of this year, the ministry established the inclusion of the RBSE in the regulatory asset base. A restatement of the value of assets since 2012 and payments of indemnity by means of the RAP as of 2007 tariff process. With that, the company based on the ANEEL tariff regulation procedures, we calculated the cash flow estimates for these assets, and this had a positive effect of R$978 million in the operating revenue of the second quarter. And it is important to stress that this calculation was made based on the best estimates of our management, once ANEEL has not yet ratified the final results of the evaluation report of Copel's assets. The fourth slide shows that 2016 has been very intense in the evolution of many projects that we are either building directly or by means of participation. As you can see on Slide number 4, we started operation of the Bateias - Curitiba Norte transmission line and the Curitiba North substation, a project that operates in 230 KV required R$69 million in investments and adds about R$8 million to the Copel GeT RAP. Still in Copel GeT, we received the environmental license for the beginning of the construction of the fourth and last stretch of the Araraquara - Taubaté II line, and we expect this line to start up in April 2017 when it will be adding R$27 million to the Copel GeT RAP. With relation to the transmission SPEs on July 29, Matrinchã SPE obtained operating license - operational license, which allows the commercial operation of the project made up of over 1,000 kilometers of transmission lines and two substations, adding a RAP of R$61 million to Copel. And it's important to see that in the lines, we will have 100% of the energy of the TL Bateias plant, we distributed SPE Guaraciaba which will also distribute energy from the TL Bateias region has already been tested and now only the license for operations is still waiting to start commercial operations. And lastly, the Paranaíba SPE, which concluded the construction of 967 kilometers of transmission line, which will help in the interconnection of the Northeast region with the Southeast and should start commercial operations in the next two weeks. Jointly, these three projects Matrinchã, Guaraciaba and Paranaíba represent an additional R$132 million to Copel's RAP. And now, it's a great honor for me to give the floor over to Sebastiani, our CFO, and he will be talking about the results of the period.

Thank you very much, Mr. Vianna, our CEO, and other officers of the company who are present here in this room. And thank you very much for your interest. Good afternoon to our investors and analysts. And once again, I thank you for participating in our call. Before talking about the results, I would like to say that we concluded successfully the long-term financing for the Brisa Potiguar Wind Farm which is in operation in Rio Grande do Norte by means of an important partnership with BNDES. We finished R$300 million debentures private issue, which were totally subscribed by the development bank [across] the sections of many challenges and was pioneer in the Brazilian electric sector. The conclusion of this operation opened the path so that we may obtain with the BNDES long-term financing for other projects that we are building such as the [indiscernible] transmission lines and the wind farm of Cutia. And about the results, as you can see on Slide number 5, we had important event that we recorded in the second quarter of 2016. Starting with the RBSE, as already mentioned by our CEO, we recorded extraordinary revenues of R$978 million in this line of availability, referring to the remeasurement of our shared value of the transmission assets according to the Ministry of Mines and Energy. On the positive side, we had R$211 million in provision for litigation and the main one is R$193 million from a victory that we obtained in a claim that demanded a payment of the Cofins and its respective interest and fine related to August 1995 to December 1996. On the other hand, we recorded R$147 million in provisions, that’s mainly by R$80 million referring to administrative and labor litigation and R$61 million related to allowance for doubtful account, especially in the distribution company. Going to Slide 6, we present the details of our operating revenue that had a reduction of 6% in the second quarter of 2016, being close to R$3.7 billion. And the main reason for this drop was the 40% reduction in revenue from sale to other utilities due to the non-operation of our Araucária thermal power plant in the quarter. The variation that we see in revenue was impacted by the lower results from financial assets and liabilities negative at R$727 million due to the amortization of R$398 million due to the recovery by tariff of the deferrals realized in 2013 and 2014 and also the lower cost with the purchase of energy vis-à-vis the tariff coverage. On the other hand, revenue from the use of the power grid grew by 273%, which can be explained by the remeasurement of the transmission assets referring to the RBSE, as I've mentioned before. Revenue from sale to end customers increased by 4% due to the adjustments applied to the tariffs of Copel Distribuição over the last year. Nevertheless, these adjustments were negative affected by charges in the drop in the captive market of Copel Distribuição and the free market of Copel GeT. The other operating items composed by telecom revenue, gas distribution and others grew by 7%, showing mainly the 20% increase in the telecom revenue, which comes from the increase in our client base. On the next Slide, we give the details of the operating cost and expenses lower than R$2.4 billion in the second quarter of 2016, 34% lower on a year-on-year basis. And this is driven majorly by a 41% slump in the purchase of energy driven by the end of existing energy contracts that were replaced by energy contracts coming from the quota system clearly cheaper, and the reduction in the Itaipu tariff as well. On the other hand, we see that we had a 9% growth in the charges for the use of the grid coming from the higher expenditures with Reserve Energy manageable costs went up 13% in the second quarter of this year, driven by higher expenditures with payroll and third-party services due to inflation that reached about 10% in the period with increase in other costs such as leases, and rents, and the discontinuation and sale of assets. The provisions and reserves line was positive by R$64 million which can be explained by the recording of the reversible R$193 million in provision for fiscal litigation related to Copel as we have already mentioned. And this was offset by the recording of provisions for administrative and labor litigation and credits for doubtful accounts, mainly in the distribution company. Slide number 8 shows that EBITDA was 212% higher to the one posted in the same period last year amounting to R$1.5 billion and with a margin of 41% over the operating revenue. Growth can be explained by the remeasurement of assets related to the RBSE, which allowed for an increase of R$978 million in the period. Cash generation of Copel GeT accounted for 91% of the consolidated EBITDA. Copel Telecom, 2% and the other companies in the group accounted for 7%. And the main contribution came from Elejor. Copel Distribuição closed the second quarter of 2016 with a negative EBITDA of R$169 million vis-à-vis a positive results of R$196 million in the same period in 2015. The result was once again impacted by the drop in the market and by the recording of provisions especially for doubtful accounts that were R$43 million higher than the tariff coverage in the period. On Slide 9, we present the consolidated net income of Copel, R$997 million in the second quarter of 2016, 230% higher on a year-on-year basis. Analyzing the results of subsidiaries, we can see that Copel GeT closed the period with a net income of R$839 million compared to Copel Distribuição loss of R$64 million and Copel Telecom positive R$15 million. These were highlights. And now we would like to open for questions from you.

Thank you. [Operator Instructions] Our first question comes from Mrs. Carolina Carneiro from Santander. You may proceed.

Good afternoon, everyone. I have two questions. The first one had to do with the posting of the RBSE, the recording of the RBSE that you have in the second quarter. I would like to know if you can give us more details about that, which were the hypothesis that you had to reach this amount that you mentioned in revenues in order to post this amount? And do you have any expectations regarding when ANEEL will manifest itself about this register and open a public hearing maybe about this theme? And the second question has to do with energy from generation. In your Banco do you have energy available and anything you about the negotiation of new contract for the synergy?

I would like to ask Adriano to answer your first question because he's in charge of our accounting.

Carolina, good afternoon. Regarding the accounting for of the RBSE, it was the most relevant event in our quarter. And I can say in a few words, after we have ordinance 120 in April 2016, we have debated this very extensively with agents of the sector and with our auditors, and the technical people in Copel does not have the totally ratified by ANEEL yet. So we took all the assets that were in operation in May 2000 and the same list of assets that we sent to ANEEL when we submitted. We estimated new replacement revenue for these assets. So we think the methodology of ANEEL we estimated what would be the new replacement value. According to this methodology, we reached almost R$1 billion that we recognized in our revenue. Together with that, we had the ordinary share supplying the methodology of ordinance of 120 with the regulatory SEC, [decelerates] of ANEEL itself. So applying both methodologies, our value was very much compliant with this amount. So what we are expecting is the manifestation in the part of ANEEL and we were there quite a few times at ANEEL in order to mitigate the interest that we still had. And our expectation is that in the second - the next quarter, we will have this issue solved, and we expect these amounts to be confirmed regarding this indemnification. Thank you very much.

I would like to ask Sergio Lamy, who is the President of our [indiscernible] company to answer.

Carolina, good afternoon. With relation to the renegotiation of new contracts, we - at the end of last year and beginning of this year, we monitored the behavior of the price curve. And as we saw some time that the price of energy was going up, then we started with a new commercialization strategy already in the first quarter of this year. We started to sell energy in many different auctions and limited value, the limited amounts because with this perspective that is what is really going on, we wanted to optimize our average price. I do not have the amount here, but it was a significant amount showed since the beginning of this year until the last auction that was held in August. But what I can tell you is that we have already about 75%, 80% contract for the energy that we produced and for 18 already 60% - around 60%. So this commercial strategy will continue. We are having auctions in a limited quantity. And in many auctions, we continue with the same strategy for the second half of 2016.

What about price or price range for these contracts?

The most recent contracts for conventional energy for 2017 are around R$160 per megawatt hour; for 2018, R$150 for effective energy, R$185 for 2016 and over R$200 per megawatt hour for 2017 on. Thank you.

[Operator Instructions] Mr. Vinicius Canheu from Credit Suisse.

Good afternoon. I have a question about distribution. For several quarters, we see very high provisions in distribution. I remember I have asked this in other conference calls, and you said that you still have many workers that were participating in the redundancy programs, the labor redundancy program. And now we see the level of provisioning and distribution that continues to be very high, but mainly because of doubtful accounts. So could you give more details why you still have such a high level of provisions and when you would expect this level to go down?

Adriano will be answering your questions.

Good afternoon, Vinicius. Regarding your question, this is one of the issues in our control cockpit because this is of concern to us. And with the support of our executive committee, we hired a company from outside to review all the processes. All these suits, all these claims, and we add up all of these contingencies, the amount is quite excessive. So we're starting this in the third quarter, and we expect to be able to have a very positive results from this effort. I would say that for the second half of the year, we already expect to give you some good news in this regard.

So the monetary restatement value is mostly concentrated in this figure that we see in your operating results and also the financial results, is this what you mean?

Yes. That is correct. Copel historically has always restated contingencies in the operating results so you are right in your statement.

[Operator Instructions] [Indiscernible] from UBS.

Good afternoon. I would like to know about your reversal of the provision for litigation regarding the COFINS tax. I think I read something saying that this discussion was in the hands of COFINS and that you expect more discussions about that regarding interest, et cetera.

Good afternoon, [Maria]. With relation to the COFINS provision, today, there was an article published because we have two large suits in the administrative instance of IRS. One has to do with 1996, 1997, 1995 and 1996, which is being evaluated by COFINS, but the second one that we had was referring to 1998 to 2001. Essentially, it has to do with the collection or not of COFINS on electricity charges. So we have already been successful in the second case, and there is no appeal possible in the part of the IRS, so we were able to totally reverse this 190-something million and also remove this possibility. So from 1998 to 2001, the issue is closed. So this is a reversal that we put in our balance sheet and COFINS evaluated the other period and the absence of it is the same, and we expect to have good news to impart to you.

What would be the amount of this other period, which is already provisioned?

1995 and 1996 provision of R$45 million for the specific claim.

Thank you.

[Operator Instructions] As there are no more questions, I would like to turn the floor back to the Company for the closing remarks.

We would like to reiterate the fact that this is an unprecedented year in all aspects. We understand that as of the third quarter, we will be seeing a higher degree of stability, some new definitions, and we are placing a bet on the new management of the Ministry of Mines and Energy already giving a very good contribution to the country and to the power sector of Brazil. And with better communications between the agent and the ministry and we already see this coming back. And of course, if you wish to ask other questions or if you have any doubts after we close this call, we remain at your disposal. And of course, we expect to see you all in our next conference call, and we expect to have good news to convey to you. Once again, thank you very much for your presence, and I wish you all very good weekend.

Copel's conference call is closed. We thank you for participating and wish you all a very good afternoon.