Luiz Fernando Leone Vianna - CEO Luiz Eduardo da Veiga Sebastiani - CFO and IRO Marcos Domakoski - Chief Corporate Management Officer Vlademir Santo Daleffe - CEO of Copel Distribuição Sergio Luiz Lamy - CEO of Copel G&T Reinhold Stephanes - CEO of Copel Participações Ricardo Goldani Dosso - Director of Copel Renováveis

Liliana Young - UBS Maria Carolina Carniero - Santander

Good afternoon, thank you for standing-by. Welcome to Companhia Paranaense de Energia Copel's Conference Call to present the earnings for 2014. We would like to inform you that all participants will be in a listen-only mode during the company’s presentation. Afterwards there will be a question-and-answer session, when further instructions will be given. [Operator Instructions]. Before proceeding, let’s us mention that any statements that may be made during this presentation related to Copel’s business outlook, projections and operating and financial goals. They are based on the beliefs and assumptions of the company's management and the information currently available. Forward-looking statements are no guarantee of performance. They involve risks, uncertainties and assumptions because they relate to future events, and therefore depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry conditions and other operating factors might also affect the future results of Copel and these 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 IRO; Mr. Marcos Domakoski, Chief Corporate Management Officer; Mr. Vlademir Santo Daleffe, CDO of Copel Distribuição; Mr. Sergio Luiz Lamy, CEO of Copel G&T; Mr. Reinhold Stephanes, CEO of Copel Participações; and Mr. Ricardo Goldani Dosso, Director of Copel Renováveis. This presentation will be delivered by Copel's management and may be followed at the Company’s Web site at www.copel.com/ir. Now I will give the floor to Mr. Luiz Fernando Vianna, CEO of the Company.

Good afternoon everyone, welcome to our 2014 earnings conference call. Thank you all for joining us today. I highlight that I’m really happy to talk to you today. Let me start by saying how proud I am for being the CEO of this company, where I had a chance to start my career back in 1973 as an intern. I’ve spent most of my life at this company. I have a degree in Business Administration, Electrical Engineering and had several different positions in a rewarding career until I became the first CEO of Copel Geração, an activity between 1999 and 2002, when our generation company ranked amongst the best 100 companies to work at. According to Exame Magazine and also the first state-owned company in Brazil to be included in this important national ranking system. I accepted the invitation by governor [Bento Munhoz] [ph] and came back to Copel taking the challenge to make an even better job. Copel has made large strides over the past four years. Our footprint is spread over 10 States with generation and transmission projects. Our distributor is currently the best in Brazil and also in Latin America in terms of customer service. Our telecom has taken its optical fiber network to every town in Paraná State and thanks to Copel Renováveis we're just beginning to write a new promising chapter in the history of the company. Our mission is to keep on searching for higher efficiency and also profitability to maximize the value of the company. We also keep on searching for better efficiency without losing sight of our renowned quality. However, our challenges are not restricted to running the company to meet these goals. The electrical sector is going through a complex phase due to several factors particularly low rainfall volume which reduced the levels of reservoirs and required continued operations in thermal power plants, which in turn brought huge impact to companies and consumers. Despite the challenging context Copel has achieved excellent results as we can see on Slide number 3 which shows the highlights of the period. In the fourth quarter of 2014, the company’s income totaled R$271 million, an amount 52% higher than in the last quarter of 2013. In our consolidated results for 2014, our income totaled 1.3 billion growing 21% vis-à-vis 2013. The result in Q4 stem from two basic drivers, revenues greater than 1 billion due to the recognition of the net balance of sectoral assets and losses related to the impairment of over 800 million impairment of generation assets primarily from Colíder Plant. Another important fact was the income from Araucária TPP which reached 155 million in Q4 2014. I would also like highlight that the Board of Directors proposed a payout of 623 million as dividend and interest on capital which accounts for 50% of the income achieved in 2014, out of the total amount 381 million was pre-paid in 2014, the 242 million is the outstanding dividend payout required to meet the amount proposed and it will be submitted for approval at the annual shareholders meeting possibly on April 23rd. On the next slide we will focus again on the results and also the economic performance of the company. However, before we get into that let me comment on other important event that recently occurred. Let’s start with new assets as we can see on Slide number 4. We've concluded the construction of another transmission project. In December 2014 we had a start up of Transmission Line Açailândia-Miranda II, it's a project led by Integração Maranhense an SPE in which we hold 49% stake partnering with Elecnor which hold the remaining 51%. With this start up, we added 31 million in annual allowed revenue and reached 240 million in our RAP considering all assets in the segment. The start up of other reported projects like Matrinchã and Guaraciaba is scheduled for the coming months, and we increase our RAP to 375 million in 2015. As to wind generation in December 2014 we had a successful participation in A minus five auctions and created 55 average megawatts for six farms which all together accounts for an installed capacity of 136 megawatts. It’s always important to highlight that the energy was sold for the best price in auction with a minimum negative [indiscernible] of 3 cents only strengthening our commitment to pursue projects that brings good returns to Copel. Thanks for this achievement, our current portfolio of wind power totaled 663 megawatts and starts generating revenues in 2015. The start up of our first complex São Bento Energia with 94 megawatts of installed capacity has already occurred and the construction phase of [Brisa Potiguar] [ph] complex with 184 megawatts of installed capacity is just about to be concluded, the same holds true for [indiscernible] in which we hold a 49% stake. Lastly it's important to comment on the extraordinary tariff revision of Copel Distribuição. As shown on Slide number 5 and now issued a decision regarding the extraordinary tariff adjustment of several distributors. In Copel’s K the agency approved a 36.79% adjustment, which has been fully in effect since March 2, 2015. As you all know, the extraordinary adjustment was necessary to restructure the revenues of distributors regarding number one, the significant increase in cost [with] [ph] charges and energy purchase, and number two, the end of the policy to transfer funds from CDE and ACR account as have been happening for the past two years. Just as a reminder, in 2014 more than R$1.2 billion were transferred to the distribution company in order to offset cost of energy purchase. Coming back to the adjustment of nearly 37% used, more than 22% pertained to the increase in the CDE portion, whereas the remaining 15% related to a review of energy purchase cost, particularly an adjustment of over 46% in Itaipu’s tariff at a high price used in the adjustment auction which took place early this year in January when the distributor purchased 302 average megawatt for approximately R$386 per megawatt per hour in a six month contract. These were the main events of the period. Now I have the pleasure to turn the floor over to our CFO and IR Officer, my friend Luiz Eduardo Sebastiani, who will comment now on the highlights of the period. Most of you already met him. Sebastiani was Copel's CFO and IR Officer that was between February 2013 and March 2014. When the company strengthened its effort to improve the operating efficiency by expanding the policy to cut down costs. At that time the company also began to search for a better capital structure more suitable to our industry’s profile. He comes back after being the Secretary of the State Treasury in 2014. Sebastiani, welcome back.

Thank you very much Luiz Fernando Vianna. We are also going to mention the presence of our business officer and also all the CEOs and our wholly owned subsidiaries. They built Copel with all our employees, our staff, perhaps a little bit more than 8,000 employees and staff at Copel. Once again I wish to thank everyone who is following this conference call. I'm very honored and excited to come back to our Copel. Thanks to the high quality and reliability of its services and the great commitment through its personnel, the company sets the example to Brazil and the people of Paraná is very proud of you. Please rest assure that our commitments remain the same. We're paying keen attention to cost management in order to continuously improve our efficiency. We also pursue good opportunities for growth without losing sight of the company's financial discipline. Copel has made large strides in recent years, but we're confident that we can go the extra mile. With regards to our result as our CEO said, the fourth quarter was strongly affected by non-recurring effects which are listed on Slide number 6. The strongest impact was 1 billion posted in Copel Distribuição revenues related to the net balance of sectoral assets and liabilities. These assets have not been recognized in the balance sheet since the adoption of IFRS, but now they are being posted again after the execution of an amendment to the concession contract. This amendment showed us that the residual amount of CDE and other financial items not recovered through tariffs will be included in the indemnification calculation, should the concession be terminated. After this amendment due to concession contract by means of CVM Resolution 372 of 2014 the recognition of sectoral assets and liabilities has become mandatory. As we can see on the slide, the revenue from sectoral assets was posted in two different lines, as operating revenue and as interest income according to the accounting guidelines approved by CVM. The fourth quarter also had a significant impact on expenses which were impairment past losses at Copel G&T showing a reduction of 807 million in the recoverable amount of generation assets, R$680 million related to the total amount of Colíder plant. The reasons to lower recoverable amounts of generation assets arise from the critical hydrological scenario with recurring lowering of GSF in HPPs and maintenance of difference settlement price at high levels, in Colíder's case more specifically these loses were even higher due to a delay in the start-up of the plant which is now scheduled for April 2016. It is important to say that Copel G&T has already filed for an exclusion of liability with ANEEL and we are monitoring the process very closely. With regards to our consolidated results on Slide number 7, we can see that our operating revenue increased 52% in 2014, virtually reaching R$14 billion. The main drivers for the revenue growth were first, a 31% increase in revenue of sales to final customers basically due to a 24.86% adjustment to tariffs of Copel Distribuição as of June 2014 and to the markets growth over the period in 2014. Second point, 126% growth in the electricity sales to distributors account stemming from number one higher revenues in CCEE due to energy sales from Araucária Thermal Power Plant and number two the energy sold in the spot market by Copel G&T, which eventually benefitted from the high difference settlement price of the period. As to power grid availability which is made up of TUST and TUST revenues there was a 10% rise due to a 4.9% growth in the grid market of Copel Distribuição and the annual adjustment of RAP and the start-up of new [plants] in the transmission segment. Other revenues which consist of construction, telecom, gas and other revenues amounted to approximately R$3 billion growing 57% and this is explained number one, the recognition of the balance of sectoral assets as I mentioned before; number two, by a higher construction revenue appears in account of record of the higher investments in distribution and concession and number three, 17% growth in our telecom revenue which totaled R$165 million in 2014. The next slide number eight, shows a breakdown of our operating costs and expenses in 2014 which totaled R$12.4 billion, and amount 53% higher than the number in 2013. The main reason for the rising costs is the 53% growth in expenses with energy purchased for resale which has already exceeded R$5 billion. This amount includes the compensation of 1.3 billion of CDE and ACR account which were booked along 2014. Cost with charges of the use of the grid went down 5% mainly due to the account reclassification of 233 million regarding the refund of total financial amounts of the reserve energy account according to equation number [478614]. By September surplus amount of the reserve energy account have been posted in the power line, therefore reducing expenses with energy purchase for resale. However, after new instructions by now the refund of the surplus amount eventually decreased cost of charges leading to the reversal in Q4 2014 and also in the full year. As the gas purchase, costs have significantly increased due to operations in Araucária plant to supply the plant. Personnel costs including benefit went down 1% and reflect our effort to control management cost, particularly when compared with the inflation rate of the period therefore show an unnatural growth of 7%. Costs were also strongly affected by the increasing provision due to the 800 million posted as impairment losses in Copel G&T as we said before and also higher provisions for legal claim totaling R$324 million in 2014. Slide number 9, shows our consolidated EBITDA increased 28% in 2014, totaling R$2.3 billion with a margin of 20% over the operating revenue. Copel G&T's cash generation accounted for 37% of the consolidated EBITDA, Copel Distribuição accounts for 35% and Copel Telecom 4%. The other companies of the Group accounted for 24% and the main contribution comes from Araucária TPP. As for the EBITDA margin, Copel G&T closed 2014 at 29%, distribution 29 and telecom 49%. Slide number 10 shows Copel’s consolidated net income which exceeded R$1.3 billion in 2014, therefore 21% higher than 2013. On analyzing the results achieved by our subsidiaries we can see that Copel Distribuição first allows as the previous year closing 2014 with an income of 428 million reflecting the recognition of sectoral assets. Copel G&T in turn closed the period with an income R$682 million an amount 32% lower than the previous year. This drop is explained by the recognition of impairment losses and Copel Telecom's income amounted to 59 million growing 23% vis-à-vis 2013. As we can see our results were strongly affected by non-recurring effect to give an idea of what the company's earnings would have been if such events had never happened with adjusted numbers as you can see on slide 11. In order to adjust the results for Copel Distribution was excluded the net balance of sectoral asset and considered CVA mutations which was the adjustment required to show what the distribution company's results would have been if all costs were positive have been factored in. As the Copel G&T was objective of result that excluding impairment losses of generation assets. If we took all these adjustments into account the consolidated net income would be around R$1.6 billion and EBITDA would amount to R$2.7 billion. These were our highlights and we'd be happy to take your questions now. Thank you very much.

We are opening the Q&A session now. [Operator Instructions]. The first question is from Liliana Young from UBS. Please go ahead.

My question is about the projects that are in progress. You just had an impairment test, could you explain about Colíder for instance and what about [indiscernible] in terms of the return expected?

I'll let Sergio Lamy, CEO of Copel Generation and Transmission to answer your questions. But before that I think it would be interesting to make our, can you go one by one first? About Colíder first.

It is Sergio Lamy speaking from Copel G&T. Liliana, the assumption we use for the Colíder impairment was very conservative, in reality that’s a vision we had by the end of last year when we worked on our assumptions. Like I said it's a very conservative approach only five months of liability exclusions. As you know the delay of Colíder is over one year and we understand all of them have the Copel's exclusion for liability. Today we're more bullish after we submitted our reasons for exclusion of liability at ANEEL and after debating exhaustively all the justifications and reasons, and by the way the first conclusions about ANEEL statements now our expectation is to have a much longer term compared to what we first thought when it comes to exclusion of liability but our expectation is to have ANEEL statement in April based on our last meetings with ANEEL; so we're just waiting for ANEEL’s statement and now we are more optimistic compared to when we worked on our proposal for exclusion of reliability.

What is the return expected for Colíder if we take into account only five months of exclusion of liability.

Internal rate of return will be around 2% which is slightly positive by the way that’s a very conservative assumption like we said before.

Could you give us some color about other large projects like Baixo Iguaçu and others please?

About [indiscernible] our current expectation is that there won’t be a strong impact on the returns originally assumed by project. All the factors considered responsible for the construction of the first factor was the severe hydrological event that we had back in June 2012. It led to a problem and in the stock mark in the work and secondly we had the injunction for the installation license which is the effects of the injunctions are will be put aside. We already have a favorable opinion of the end deal and therefore we believe that all the reasons and drivers that led to this project will be considered exclusion of liability. So we’ll be based on the assumption that the early internal rate of return around 7.4% will be maintained, is that okay with Liliana.

[Operator Instructions] The next question is from Maria Carolina Carniero from Santander. Please go ahead.

I have two questions. The first question is about the distribution concession with [Europe], we heard some news in the media, Minister Braga mentioned negotiations and also possible metrics to be taken into account for [indiscernible] and any burden related to the renewal in agreement or any CapEx to the negotiation as you mean the quality matrix. The media also mentioned an expectation that the agency might make a statement to, so is there any actual news and could you give us an idea of the metrics to be considered for [indiscernible] and Distribuição. And I apologize if the next question has already been answered, I having problems with my connections I couldn’t understand it very well, but what about the impairment that you have just to have a better understanding. Is this related to the delay of the projects and future sales and the GSF might have a negative impact in the project for 2015. So this calculation takes into account horizon in 2015, did I understand it correctly?

Let me think about distribution first, right. Maria Carolina, Liz Fernandez speaking again about distribution and renewal, first of all we would like to say that if we consider Copel Distribuição performance when it comes to older items guided by Aneel and sustainability, liability and also the awards that we’ve had about our performance and our consumer satisfaction, we understand that we have no doubt when it comes to the concession with you or with Copel, I think there’s no doubt about it. Now the burden behind it we still have very little information on it, it might be a possibility, however if there is a burden behind this renewal or these extension the burden should be on consumers because there is no margin at Copel Distribuição or in distributors in general to absorb any kind of burden. I’ll turn it over to the CEO of Copel Distribuição, Vlademir.

Maria Carolina in reality we’re also taken by surprise when we heard this information by the ministers. If you consider this burden CEO potential, -- but the information we have based on the information we have we’re expecting clear information by the ministry but please rest assured there is no risk at Copel of not having a renewal base on the economic sustainability and also based on the quality of services we deliver.

Now the next question is about impairment. Let me please Sergio Luiz Lamy speaking from Copel G&T. Answering your question about the impairment of Colíder plant, our assumption was the following. We consider the whole life cycle of the project the whole concession period. We worked on the revenue and expense flow, we had the schedule for GSF and the results we are delivering come a vision throughout the life of the project.

Just adding if I may, how much was the GSF for 2015 and after 2015 which was the GSF you used.

82.5%, 0.825 in 2015, 0.95 in 2017 and as of 2018 100%.

Carolina may I just highlight something about the same topic about GSF. We've met personally with the ministers and we know that are several proposals from several players and have also made a work group and they have submitted their proposals to the minister last week. On this topic about GSF at the end of the day like we said before we’re very conservative, we are considering based on the assumptions that nothing will be done. And the last time that I talked to the minister a week ago he considered something within 60 days. So we could have a solution to minimize and mitigate the GSF topic in the [Mexico] sector.

[Operator Instructions] The next is from [indiscernible] from Goldman Sachs.

My question is about natural gas. Basically we can see the government buildings signs of interest in the increased supply of natural gas, possibly there will be a special auction for it at the end of the year we also had a private group getting in and with an offer for natural gas LNG. So what are Copel’s ideas about this energy potential? Cold you assume Copel would be involved in auctions for natural gas? And what about exploration and production assets in better like you said your days of results but what about any reduction in gas prices in the domestic market? So strategically do you think it still makes sense to invest in E&P in Brazil for a company such as Copel or would it make more sense to invest in TBT or ENL like the other group did?

We tend to say as a company that one year of challenge is also a year of possibilities, but you need the right financial conditions to do so. We understand that 2015 will bring a lot of opportunities. There will be auctions in the area of solar energy at least in [two] and also in TBTs. We will also have at least two auctions in the first and second half of the year and also A minus 5. When it comes to gas the big question mark is that despite all the new spread in the media we still have some instability of the currency and we’re also considering during our financial exploration. We do have plans to expand our GDP at Araucária and we’re also considering even larger projects too, not only the expansion of TBT. These are our studies up to now but we consider the possibility and also the probability to have something in that area in the second half of the year. There are big chances, but I also ask our director of new business [indiscernible] to talk about our plans.

Copel is working in two directions right now winner of A and B auction in 2015 but unfortunately it is uphold and we have an aspiration for shale gas and also conventional gas in the State of Paraná. Copel is very bullish with the possibility of finding structures for commercial purposes in the State of Paraná. And the second driver is gas import at installation of re-gasification plant along the Coast of Paraná and also to expand our Araucária Plant and maybe have another plant in [indiscernible] Municipality another TPP. And this also is related to an expansion project of the market which is held today Copel gas the domestic market in the State of Paraná with a very interesting potential and it’s what the challenge we had was how to ensure 20 years supply contract and we’re having good negotiation in order to overcome this challenge. Great, what about the project for NGL that was mentioned in Paraná cost? Do you have any schedule when this project might be offered or submitted to an auction? We have a project to expand the TPP and it’s already submitted for recorded for the next auction and Petrobras agreed to have a swap to manage to have access to import the gas maybe we can have a swap by Rio and get from Petrobras as soon as the installation or the TPP Araucária expansion is concluded. And this was to some extent breakdown the re-gasification process and also for gas pipes from Araucária securities, and these would be independent properties. So we’re ready for the next auction in order to expand our Araucária plant.

And how much will the expansion be in the Gulf?

About 200 megawatt.

[Operator Instructions]. There are no further questions from participants. Now I’ll give the floor back to the company’s management for the closing remarks.

First of all I would like to highlight once again how happy I am to be talking to all of you. I think this first stop is just the beginning. I will really like to highlight how willing we’re, will be in contact with you whenever necessary, so we can clarify your questions. We always want to be transparent with the market and this is critical. So this relationship is just as a beginning and we can go even deeper into it. So once again I would like to thank you all for joining us today. This was a great opportunity to share the results achieved and not only that but also to address our outlook for the company and also to address the new challenges in the electric segment. Particularly in 2015 we’ll have many-many challenges, but we’re willing to take this challenge. I repeat like I said before it is a year full of difficulties, but it is also a year full of opportunities and we are pursuing these opportunities. Naturally always searching for good projects and trying to maximize our company's income. In the generation segment, we have low exposure to GSF risk and that's something very positive. And like I said before, we have very strong expectations that even there's low exposure maybe mitigated due to actions by the Ministry of Mines and Energy and the Federal Government. Another reminder is that even if we consider the reduction, we also have Araucária TPP and also help us to balance the account. In transmission we have the many important projects that will be concluded over the year and we plan to add as a result another 130 million to our RAP. In distribution like we said before, we are giving large strides to further improve our result and performance. Consumer satisfaction and the sustainability index achieved will both allow us to have the concession renewals and that's something we expect to maintain. Trying to optimize our costs without losing sight of the quality of our services. For telecom we also have large room for growth, basically that's all we have to say. Thank you very much, enjoy the rest of your day.

Ladies and gentlemen this concludes Copel's conference call on the results for 2014. Thank you.