6-K 1 elpitr1q09_6k.htm QUARTERLY INFORMATION - ITR Provided by MZ Technologies
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
 
For the month of July, 2009

Commission File Number 1-14668
 

 
COMPANHIA PARANAENSE DE ENERGIA
(Exact name of registrant as specified in its charter)
 

Energy Company of Paraná
(Translation of Registrant's name into English)
 

Rua Coronel Dulcídio, 800
80420-170 Curitiba, Paraná
Federative Republic of Brazil
(5541) 3222-2027
(Address of principal executive offices)
 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. 

Form 20-F ___X___ Form 40-F _______

 Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  

Yes _______ No ___X____



Companhia Paranaense de Energia - COPEL
CNPJ/MF 76.483.817/0001-20
State Taxpayer Number 10146326-50
Public Company - CVM 1431-1
www.copel.com       copel@copel.com

Rua Coronel Dulcídio, 800, Batel - Curitiba - PR
CEP 80420-170

 

QUARTERLY INFORMATION

ITR

 

 

March 2009



TABLE OF CONTENTS
FINANCIAL STATEMENTS       3  
    Balance Sheet - Assets     3    
    Balance Sheet - Liabilities     4    
    Statement of Operations     5    
    Statement of Changes in Shareholders’ Equity     6    
    Statement of Cash Flows     7    
NOTES TO THE QUARTERLY INFORMATION       9  
1     Operations     9    
2     Presentation of the Quarterly Information     10    
3     Cash in Hand and Cash Equivalents     11    
4     Consumers and Distributors     12    
5     Provision for Doubtful Accounts     13    
6     CRC Transferred to the Government of the State of Paraná     13    
7     Taxes and Social Contribution     15    
8     Deferred Regulatory Assets and Liabilities - CVA     18    
9     Other Regulatory Assets and Liabilities     20    
10     Guarantees and Escrow Deposits     22    
11     Other Receivables     23    
12     Judicial Deposits     23    
13     Receivables from Related Parties     24    
14     Investments     26    
15     Property, Plant, and Equipment     31    
16     Intangible assets     36    
17     Loans and Financing     38    
18     Debentures     45    
19     Suppliers     49    
20     Payroll, Social Charges, and Accruals     50    
21     Post-Employment Benefits     50    
22     Regulatory Charges     52    
23     Research and Development and Energy Efficiency     52    
24     Other Accounts Payable     53    
25     Provisions for Contingencies     53    
26     Shareholders’ Equity     56    
27     Gross Revenues from Sales and/or Services     58    
28     Deductions from Gross Revenues     59    
29     Operating Costs and Expenses     59    
30     Interest Income (Expenses)   64    
31     Electric Energy Trading Chamber (CCEE)   64    
32     Financial Instruments     66    
33     Related-Party Transactions     70    
34     Financial Statements by Subsidiary     72    
35     Statement of Operations Broken Down by Company     75    
36     Statement of Added Value     76    
37     Subsequent Event     77    
COMMENTS ON THE PERFORMANCE OF THE COMPANY IN THE QUARTER       78  
1     Distribution     78    
2     Management     81    
3     Investor Relations     81    
4     Rates     82    
5     Economic and Financial Performance     84    
OTHER INFORMATION DEEMED MATERIAL BY THE COMPANY (1)     86  
SENIOR MANAGEMENT AND COMMITTEES       88  
INDEPENDENT AUDITOR REPORT ON THE REVIEW OF THE QUARTERLY INFORMATION       89  


Table of Contents

FINANCIAL STATEMENTS

Balance Sheet - Assets

As of March 31, 2009 and December 31, 2008
(In thousands of
reais)

 
CODE  DESCRIPTION  N. 
no.
 
Parent Company  Consolidated 
 
      31/03/2009  31/12/2008  31/03/2009  31/12/2008 
 
1  TOTAL ASSETS    9,851,177  9,774,440  13,188,444  13,253,626 
1.01  CURRENT ASSETS    988,919  1,131,965  3,539,576  3,573,153 
1.01.01  Cash in hand and cash equivalents  324,586  318,455  1,594,217  1,813,576 
1.01.02  Receivables    664,333  813,510  1,873,210  1,695,317 
1.01.02.01  Customers    -  -  993,164  984,572 
1.01.02.01.01  Customers and distributors  1,044,176  1,032,952 
1.01.02.01.02  Provision for doubtful accounts  (60,724) (56,284)
1.01.02.01.03  Telecommunications services, net    9,712  7,904 
1.01.02.02  Other Receivables    664,333  813,510  880,046  710,745 
1.01.02.02.01  Dividends receivable  13  479,725  719,061  5,247  5,247 
1.01.02.02.02  Service in progress    59,626  64,765 
1.01.02.02.03  CRC transferred to State Government  47,782  47,133 
1.01.02.02.04  Taxes and social contribution  82,725  94,009  231,546  257,339 
1.01.02.02.05  Deferred regulatory assets - CVA  188,303  111,098 
1.01.02.02.06  Other regulatory assets  27,570  31,511 
1.01.02.02.07  Bonds and securities    71,358  71,358 
1.01.02.02.08  Collaterals and escrow deposits  10  30,522  436  174,565  150,794 
1.01.02.02.09  Other receivables  11  74,049  42,858 
1.01.03  Inventories    -  -  72,149  64,260 
1.02  NONCURRENT ASSETS    8,862,258  8,642,475  9,648,868  9,680,473 
1.02.01  Long-Term Receivables    1,100,023  1,149,094  1,997,234  2,117,741 
1.02.01.01  Sundry Receivables    150,203  219,801  1,997,234  2,117,741 
1.02.01.01.01  Customers and distributors  71,632  82,176 
1.02.01.01.02  Provision for doubtful accounts  (191) (246)
1.02.01.01.03  Telecommunications services    2,827  3,211 
1.02.01.01.04  CRC transferred to State Government  1,248,554  1,272,770 
1.02.01.01.05  Taxes and social contribution  122,175  121,338  458,496  462,609 
1.02.01.01.06  Deferred regulatory assets - CVA  51,790  53,494 
1.02.01.01.07  Other regulatory assets  5,786  11,085 
1.02.01.01.08  Bonds and securities    69,063  69,063 
1.02.01.01.09  Collaterals and escrow deposits  10  37,515  37,868 
1.02.01.01.10  Judicial deposits  12  26,270  26,268  109,116  113,497 
1.02.01.01.11  Other Receivables  11  1,758  3,132  11,709  12,214 
1.02.01.02  Receivables from Related Parties  13  949,820  929,293  -  - 
1.02.01.02.01  From subsidiaries    949,820  929,293 
1.02.02  Permanent Assets    7,762,235  7,493,381  7,651,634  7,562,732 
1.02.02.01  Investments  14  7,741,872  7,472,829  404,689  395,938 
1.02.02.01.01  Equity in investees    96,179  94,873  385,303  376,397 
1.02.02.01.03  Equity in subsidiaries    7,631,331  7,363,594 
1.02.02.01.04  Other investments    14,362  14,362  19,386  19,541 
1.02.02.02  Property, Plant, and Equipment  15  -  -  7,120,704  7,048,675 
1.02.02.03  Intangible Assets  16  20,363  20,552  126,241  118,119 
             
The accompanying notes are an integral part of these quarterly financial statements. 

3


Table of Contents

Balance Sheet – Liabilities

As of March 31, 2009 and December 31, 2008
(In thousands of
reais)

 
CODE  DESCRIPTION  N. 
no.
 
Parent Company  Consolidated 
 
      31/03/2009  31/12/2008  31/03/2009  31/12/2008 
 
2  TOTAL LIABILITIES    9,851,177  9,774,440  13,188,444  13,253,626 
2.01  CURRENT LIABILITIES    295,421  492,232  1,684,825  1,963,494 
2.01.01  Loans and financing  17  13,822  24,896  80,415  98,461 
2.01.02  Debentures  18  5,770  169,233  38,823  195,000 
2.01.03  Suppliers  19  464  564  542,241  497,832 
2.01.04  Taxes, fees, and contributions  35,914  57,993  310,755  407,072 
2.01.05  Dividends payable    239,264  239,265  248,686  245,166 
2.01.06  Payroll, social charges, and accruals  20  162  243  169,468  159,388 
2.01.08  Other    25  38  294,437  360,575 
2.01.08.01  Post-employment benefits  21  19  34  20,919  22,066 
2.01.08.02  Deferred regulatory liabilities - CVA  12,977  28,327 
2.01.08.03  Other regulatory liabilities  21,071  26,192 
2.01.08.04  Regulatory charges  22  33,248  43,123 
2.01.08.05  R & D and Energy Efficiency  23  100,262  126,484 
2.01.08.06  Other accounts payable  24  105,960  114,383 
2.02  NONCURRENT LIABILITIES    1,230,598  1,229,121  2,938,620  2,997,478 
2.02.01  Noncurrent liabilities    1,230,598  1,229,121  2,938,620  2,997,478 
2.02.01.01  Loans and financing  17  414,163  414,959  743,892  769,056 
2.02.01.02  Debentures  18  600,000  600,000  794,617  802,116 
2.02.01.03  Provisions for contingencies  25  216,435  214,162  592,225  593,365 
2.02.01.06  Other    -  -  807,886  832,941 
2.02.01.06.01  Suppliers  19  209,352  214,157 
2.02.01.06.02  Taxes and social contributions  27,388  29,528 
2.02.01.06.03  Post-employment benefits  21  398,864  425,879 
2.02.01.06.04  Deferred regulatory liabilities - CVA  2,373 
2.02.01.06.05  Other regulatory liabilities  3,868  7,257 
2.02.01.06.06  R & D and Energy Efficiency  23  83,943  72,079 
2.02.01.06.07  Deferred revenues    74,994  74,994 
2.02.01.06.08  Other payables  24  9,477  6,674 
2.03  NON-CONTROLLING SHAREHOLDERS' INTERESTS    -  -  239,841  239,567 
2.04  SHAREHOLDERS' EQUITY    8,325,158  8,053,087  8,325,158  8,053,087 
2.04.01  Paid-in stock capital  26  4,460,000  4,460,000  4,460,000  4,460,000 
2.04.02  Capital Reserves    838,340  838,340  838,340  838,340 
2.04.04  Income Reserves    2,754,747  2,754,747  2,754,747  2,754,747 
2.04.04.01  Legal reserves    377,590  377,590  377,590  377,590 
2.04.04.02  Retained earnings    2,377,157  2,377,157  2,377,157  2,377,157 
2.04.05  Accrued Earnings    272,071  -  272,071  - 
             
The accompanying notes are an integral part of these quarterly financial statements.

4


Table of Contents

Statement of Operations

For the quarters ended on March 31, 2009 and 2008
(In thousands of
reais)

 
CODE  DESCRIPTION  N. 
no.
 
Parent Company  Consolidated 
 
      31/03/2009  31/03/2008  31/03/2009  31/03/2008 
3  STATEMENT OF OPERATIONS           
3.01  GROSS REVENUES FROM SALES AND/OR SERVICES  27  -  -  2,077,541  1,989,579 
3.01.01  Electricity sales to final customers    752,679  718,669 
3.01.02  Electricity sales to distributors    334,583  316,616 
3.01.03  Use of the power grid    869,601  850,237 
3.01.04  Telecommunications revenues    23,615  17,594 
3.01.05  Distribution of piped gas    62,293  59,491 
3.01.06  Other operating revenues    34,770  26,972 
3.02  DEDUCTIONS FROM GROSS REVENUES  28  -  -  (720,912) (675,021)
3.03  NET REVENUES FROM SALES AND/OR SERVICES    -  -  1,356,629  1,314,558 
3.04  COST OF SALES AND/OR SERVICES  29  -  -  (880,299) (866,699)
3.04.01  Electricity purchased for resale    (429,340) (443,499)
3.04.02  Charges for the use of the power grid    (122,701) (105,767)
3.04.03  Personnel and management    (129,868) (105,970)
3.04.04  Pension and healthcare plans    3,562  (16,103)
3.04.05  Materials and supplies    (11,810) (9,934)
3.04.06  Raw materials and supplies for electricity generation    (5,693) (5,013)
3.04.07  Natural gas and supplies for the gas business    (37,666) (31,791)
3.04.08  Third-party services    (48,210) (45,440)
3.04.09  Depreciation and amortization    (91,704) (95,907)
3.04.10  Other costs    (6,869) (7,275)
3.05  RESULT OF OPERATIONS    -  476,330  447,859 
3.06  OTHER INCOME (EXPENSES)   270,569  249,835  (63,085) (58,883)
3.06.01  From sales  29  (10,973) (15,126)
3.06.02  General and administrative revenues (expenses) 29  (2,466) (2,230) (64,955) (53,884)
3.06.03  Interest income (expenses) 30  509  (13,597) 32,538  34,090 
3.06.03.01  Interest income    31,297  17,585  87,771  106,603 
3.06.03.02  Interest expenses    (30,788) (31,182) (55,233) (72,513)
3.06.05  Other Operating Expenses  29  (2,450) (872) (30,869) (36,213)
3.06.05.01  Other revenues (expenses), net    (2,450) (872) (30,869) (36,213)
3.06.06  Equity in results of investees  14  274,976  266,534  11,174  12,250 
3.07  OPERATING INCOME (LOSSES)   270,569  249,835  413,245  388,976 
3.09  INCOME (LOSSES) BEFORE TAXES/EQ. INVESTMENTS    270,569  249,835  413,245  388,976 
3.10  PROVISION FOR INCOME TAX AND SOCIAL CONT.  -  -  (106,298) (122,909)
3.11  DEFERRED INCOME TAX  1,502  5,677  (31,081) (6,475)
3.14  NON-CONTROLLING SHAREHOLDERS INTERESTS    -  -  (3,795) (4,080)
3.15  NET INCOME FOR THE PERIOD    272,071  255,512  272,071  255,512 
 
  NET INCOME PER SHARE - in reais    0.9942  0.9337     
 
The accompanying notes are an integral part of these quarterly financial statements.

5


Table of Contents

Statement of Changes in Shareholders’ Equity

For the year ended on December 31, 2008 and for the quarter ended on March 31, 2009

(In thousands of reais)

             
  Stock  Capital  Legal  Retained  Accrued   
  capital  reserves  reserve  earnings  earnings  Total 
             
Balance as of December 31, 2007  4,460,000  838,340  323,653  1,614,184  -  7,236,177 
             
 Net income for the year  1,078,744  1,078,744 
 Allocation proposed to the GSM:             
     Legal reserve  53,937  (53,937)
     Interest on capital  (228,000) (228,000)
     Dividends  (33,834) (33,834)
     Investment reserve  762,973  (762,973)
             
Balance as of December 31, 2008  4,460,000  838,340  377,590  2,377,157  -  8,053,087 
             
 Net income for the quarter  272,071  272,071 
             
Balance as of March 31, 2009  4,460,000  838,340  377,590  2,377,157  272,071  8,325,158 
             
The accompanying notes are an integral part of these quarterly financial statements.

6


Table of Contents

Statement of Cash Flows

For the periods ended on March 31, 2009 and 2008

(In thousands of reais)

  Note  Parent Company  Consolidated 
         
    2009  2008  2009  2008 
 
Cash flows from operating activities           
 Net income for the quarter    272,071  255,512  272,071  255,512 
 
 Adjustments to reconcile the net income for the quarter with the           
 generation of cash by operating activities:           
     Provision for doubtful accounts  4,382  7,424 
     Depreciation  15.c  96,793  100,923 
     Amortization of intangible assets - concession  16.e  189  958  958 
     Amortization of intangible assets - goodwill  16.e  1,202 
     Amortization of intangible assets - other  16.e  882  933 
     Unrealized monetary and exchange variations, net  8,585  18,075  18,231  9,130 
     Equity in results of investees  14.b  (274,976) (266,534) (11,174) (12,250)
     Deferred income tax and social contribution  (1,502) (5,677) 31,081  6,475 
     Variations in regulatory assets and liabilities (CVA), net  8.b  (87,695) (43,287)
     Variations in other regulatory assets and liabilities, net  896  (6,516)
     Accruals for long-term liabilities  25  2,273  874  5,155  7,420 
     Write-off of property, plant, and equipment, net  3,509  2,326 
     Write-off of intangible assets, net  202  66 
     Non-controlling shareholders' interests  (3,795) 4,080 
 
 Increase (decrease) in assets         
     Customers and distributors    2,151  5,470 
     Telecommunications services    (1,424) 371 
     Dividends and interest on capital received    245,290  120,000  2,289  5,931 
     Construction in progress    5,139  987 
     CRC transferred to State Government  6.b  32,742  30,012 
     Taxes and social contribution    11,949  9,590  18,654  19,135 
     Collaterals and escrow deposits    (30,000) 2,366  (20,983) 47,459 
     Inventories    (7,889) 5,396 
     Judicial deposits    (2) 1,397  (3,008)
     Other    1,375  (146) (30,622) 8,044 
 
 Increase (decrease) in liabilities         
     Loans and financing - interest paid    (22,983) (18,715) (43,487) (37,322)
     Debentures - interest paid    (50,483) (49,403) (56,262) (56,034)
     Suppliers    (100) (265) 44,409  87,866 
     Taxes and social contribution    (22,079) (12,182) (118,286) (97,164)
     Payroll and labor accruals    (81) (37) 10,080  (9,840)
     Post-employment benefits    (15) (14) (28,162) (858)
     Regulatory charges    (9,875) 839 
     R & D and Energy Efficiency    (18,240) 3,047 
     Other    (10,097) (6,956)
     Non-controlling shareholders' interests    4,069  (4,508)
 
           
Net cash generated by operating activities    139,512  53,451  107,099  333,263 
           
(next page)          

7


Table of Contents

(continued)          
 
  Note  Parent Company  Consolidated 
 
    2009  2008  2009  2008 
Cash flows from investing activities           
 Payments of loans to related parties  176,027 
 Acquisition of control in Dominó Holdings - net of acquired cash  14.d  (108,962)
 Additions to interests in other companies and other investments  (21) (67,000) (21) (3,333)
 Additions to property, plant, and equipment:  15.c  (180,932) (122,564)
 Additions to intangible assets  16.e  (10,164) (1,176)
 Customer contributions  15.c  11,830  13,156 
 Sale of property, plant, and equipment  1,550  4,497 
           
           
Net cash generated (used) by investing activities    (21) 109,027  (177,737) (218,382)
           
 
Cash flows from financing activities           
 Payment of the principal amounts of loans and financing  (15,361) (16,712)
 Payment of the principal amounts of debentures  (133,360) (133,320) (133,360) (133,320)
           
           
Net cash used by financing activities    (133,360) (133,320) (148,721) (150,032)
           
 
           
Total effects on cash and cash equivalents    6,131  29,158  (219,359) (35,151)
           
 
 Cash and cash equivalents at the beginning of the period  318,455  56,186  1,813,576  1,540,871 
 Cash and cash equivalents at the beginning of the period  324,586  85,344  1,594,217  1,505,720 
           
           
Variation in cash and cash equivalents    6,131  29,158  (219,359) (35,151)
           
The accompanying notes are an integral part of these quarterly financial statements.

Supplemental information about cash flows                 
 
 Business acquisitions                 
 Assets acquired    -   -     116,713 
 Liabilities acquired    -   -     (6,487)
         
 
 Acquisition price    -   -     110,226 
 Cash and cash equivalents acquired    -   -     (1,264)
         
 
 Acquisition price, net of cash and cash equivalents acquired    -   -     108,962 

8


Table of Contents

NOTES TO THE QUARTERLY INFORMATION

As of March 31, 2009

(In thousands of reais, except where otherwise indicated)

1 Operations

Companhia Paranaense de Energia - COPEL (COPEL, the Company or the Parent Company) is a public company with shares traded on Corporate Governance Level 1 of BOVESPA’s Special Listings and on stock exchanges in the United States of America and Spain. COPEL is a mixed capital company, controlled by the Government of the State of Paraná, engaged, through its subsidiaries, in researching, studying, planning, building, and exploiting the production, transformation, transportation, distribution, and sale of energy, in any form, but particularly electric energy. These activities are regulated by the National Electric Energy Agency - ANEEL, which reports to the Ministry of Mines and Energy - MME. Additionally, COPEL takes part in consortiums, private enterprises, or mixed capital companies in order to operate mostly in the areas of energy, telecommunications, natural gas, and water supply and sanitation.

COPEL’s wholly-owned subsidiaries are: COPEL Geração e Transmissão S.A., COPEL Distribuição S.A., and COPEL Telecomunicações S.A.

COPEL Geração e Transmissão has a 51% stake in Consórcio Energético Cruzeiro do Sul, an independent power producer which won the concession for the Mauá Hydroelectric Power Plant (Note 15).

The other companies controlled by COPEL are: Companhia Paranaense de Gás – Compagas, Elejor – Centrais Elétricas do Rio Jordão S.A., COPEL Empreendimentos Ltda., UEG Araucária Ltda., Centrais Eólicas do Paraná, and Dominó Holdings S.A., controlled jointly with the other shareholders (Note 14.d).

On December 28, 2006, UEG Araucária signed an agreement with Petróleo Brasileiro S.A. - Petrobras, leasing the Araucária Thermal Power Plant in return for monthly payments, over a period of one year, extended until December 31, 2008. On March 4, 2009, the lease was renewed, for another three years, as of January 1, 2009, subject to partial or total termination should UEG Araucária successfully participate at ANEEL-sponsored power auctions.

9


Table of Contents

2 Presentation of the Quarterly Information

Authorization for the completion of this quarterly report was granted at Meeting of the Board of Officers held on May 11, 2009.

The quarterly data featured in this report are in accordance with the provisions of the Brazilian Corporate Law, as amended by Law no. 11,638/2007 and by Provisional Measure no. 449/2008, with the accounting practices adopted in Brazil, with the specific legislation enacted by ANEEL, and with the regulations of the Brazilian Securities and Exchange Commission (CVM).

COPEL has consolidated the financial statements of its wholly-owned subsidiaries and of the subsidiaries listed in Note 1.

Expenditures in connection with Consórcio Cruzeiro do Sul are recorded as property, plant, and equipment in progress, proportionally to COPEL’s share in the consortium, pursuant to the Accounting Manual for Electric Energy Utilities.

The Parent Company’s investments in the shareholders’ equities of subsidiaries, as well as the assets, liabilities, revenues, costs, and expenses arising from intercompany operations, have been eliminated upon consolidation, and the non controlling interests are shown separately, so that the consolidated financial statements effectively represent the balances of transactions with third parties.

All subsidiaries follow the accounting practices adopted by COPEL, and the accounting practices adopted in the preparation of this quarterly report are consistent with those adopted in the financial statements as of December 31, 2008.

The dates of the financial statements of investees, which have been used for the calculation of the results of equity in these companies and for consolidation purposes, coincide with those of the Parent Company.

The balance sheets and the statements of income of the wholly-owned subsidiaries and other subsidiaries are featured in Note 34, and their statements of income are featured in Note 35, reclassified for the purpose of ensuring consistency with the account classification adopted by COPEL.

10


Table of Contents

For purposes of comparison, the following reclassifications have been made:

 
       
Original account    Reclassified account    Consolidated 
 
        31.12.2008 
Noncurrent assets    Noncurrent assets     
   Investments (a)      Property, plant, and equipment    56,517 
 

a) Consórcio Energético Cruzeiro do Sul, pursuant to ANEEL Ruling 3467, 18.09.2008 (Note 15.e).

 
         
Original account    Reclassified account    Consolidated 
 
        31.03.2008 
Equity in results of investees    Other income (expenses)    
   Amortization of goodwill (a)      Other revenues (expenses), net    (2,160)
 
Non-operating income (expenses)   Other income (expenses)    
   Non-operating income (expenses) (b)      Other revenues (expenses), net    (860)
 

a) Reclassification of goodwill pursuant to Technical Pronouncement CPC 04;
b)Pursuant to Law no. 11,638/07 and Provisional Measure 449/08.

We have not identified any adjustments which could have an impact on the Company’s income and on its shareholders’ equity as of March 31, 2008.

3 Cash in Hand and Cash Equivalents

 
                 
        Parent Company        Consolidated 
 
    31.03.2009    31.12.2008    31.03.2009    31.12.2008 
Cash and banks    512    2,196    43,224    88,161 
Short-term investments                 
   Federal banks    324,074    316,259    1,548,336    1,720,936 
   Private banks        2,657    4,479 
    324,074    316,259    1,550,993    1,725,415 
 
    324,586    318,455    1,594,217    1,813,576 
 

Most of the financial investments of the Company and of its subsidiaries have been made in official financial institutions, comprising mostly fixed income securities tied to federal bonds, bearing an average yield of 100% the Interbank Deposit Certificate rate. These investments are recorded at fair value and may be redeemed at any time, with no loss of any accrued earnings.

11


Table of Contents

4 Consumers and Distributors

 
        Not yet 
due 
  Overdue for 
up to 90 days 
  Overdue for 
over 90 days 
  Consolidated 
Total 
 
                    31.03.2009    31.12.2008 
Consumers                         
   Residential        93,279    78,821    4,685    176,785    164,189 
   Industrial        108,836    25,210    36,325    170,371    155,920 
   Commercial        68,664    24,253    8,408    101,325    93,828 
   Rural        14,308    6,176    220    20,704    18,575 
   Government agencies        15,797    9,795    2,689    28,281    24,948 
   Public lighting        12,397    232    174    12,803    14,341 
   Public services        11,430    417    702    12,549    12,286 
   Unbilled        153,304        153,304    151,659 
   Installment receivables - current        81,823    3,763    10,561    96,147    91,614 
   Installment receivables - noncurrent    68,147        68,147    78,123 
   Low income customer rates        17,026        17,026    28,800 
   Penalties on overdue bills        3,647    3,844    2,373    9,864    9,101 
   State Government-"Luz Fraterna" Program    2,023    6,488    4,532    13,043    7,500 
   Decrease in the rate charged                         
   for use of the distribution system        1,318        1,318    2,635 
   Gas supply        20,602    700    1,715    23,017    22,450 
   Other receivables        13,576    1,867    1,432    16,875    14,621 
   Other receivables - noncurrent        3,379        3,379    3,732 
        689,556    161,566    73,816    924,938    894,322 
Distributors                         
   Electricity sales                         
   Electricity sales - CCEE (Note 31)       8,449      105    8,554    9,931 
   Energy auction        120,449        120,449    96,074 
   Bilateral contracts        12,282        12,282    59,853 
   Reimbursement to generation companies    535    21      556    571 
   Reimbursement to gen. companies - NC    106        106    321 
   Contracts with small utilities        14,028        14,028    14,173 
   Short-term sales            123    123    126 
        155,849    21    228    156,098    181,049 
   Charges for use of the power grid                     
   Power grid        12,162    960    2,284    15,406    16,246 
   Basic Network and connection grid        19,096    38    232    19,366    23,511 
        31,258    998    2,516    34,772    39,757 
 
        876,663    162,585    76,560    1,115,808    1,115,128 
 
31.03.2009    Current    805,031    162,585    76,560    1,044,176     
    Noncurrent    71,632    -    -    71,632     
 
31.12.2008    Current    821,363    147,530    64,059        1,032,952 
    Noncurrent    82,176    -    -        82,176 
 

12


Table of Contents

5 Provision for Doubtful Accounts

COPEL’s senior management has considered the following amounts as sufficient to cover potential losses on the realization of receivables:

 
    Consolidated    Additions / 
(reversals)
  Consolidated 
 
        31.12.2008        31.03.2009 
Consumers and distributors                 
   Residential        5,544    2,280    7,824 
   Industrial        40,735    923    41,658 
   Commercial        8,506    1,021    9,527 
   Rural        177      186 
   Government agencies        947    48    995 
   Public lighting        169    (23)   146 
   Public services          185    185 
   Concession and permission holders        206    (3)   203 
   Concession and permission holders - noncurrent        246    (55)   191 
 
        56,530    4,385    60,915 
 
    Current    56,284    4,440    60,724 
    Noncurrent    246    (55)   191 
 

The applied criteria, in addition to taking into account management’s experience as far as the record of actual losses, also comply with the parameters recommended by ANEEL.

6 CRC Transferred to the Government of the State of Paraná

By means of a fourth amendment dated January 21, 2005, the Company again renegotiated with the Government of Paraná the outstanding CRC (Account for Compensation of Income and Losses) balance as of December 31, 2004, in the amount of R$ 1,197,404, to be paid in 244 installments under the Price amortization system, restated according to the IGP-DI inflation index plus interest of 6.65% p.a., with the first installment due on January 30, 2005 and the others due in subsequent and consecutive months.

The State Government has been in compliance with the payments of the renegotiated installments according to the terms of the fourth amendment to the CRC agreement. Amortizations are secured by resources from dividends.

13


Table of Contents

a) Maturity of long-term installments

 
       
        Consolidated 
 
    31.03.2009    31.12.2008 
2010    37,642    50,268 
2011    53,103    53,611 
2012    56,634    57,176 
2013    60,401    60,979 
2014    64,418    65,034 
2015    68,702    69,359 
2016    73,271    73,972 
2017    78,144    78,892 
2018    83,341    84,138 
2019    88,883    89,734 
2020    94,794    95,702 
2021    101,099    102,066 
2022    107,822    108,854 
After 2022    280,300    282,985 
 
    1,248,554    1,272,770 
 

b) Changes in the CRC balance

 
    Current    Noncurrent    Consolidated 
Balances     assets    assets    Total 
 
As of December 31, 2007    40,509    1,209,853    1,250,362 
   Interest    20,128      20,128 
   Monetary variation    63    25,111    25,174 
   Transfers    10,698    (10,698)  
   Amortization    (30,012)     (30,012)
As of March 31, 2008    41,386    1,224,266    1,265,652 
   Interest    59,411      59,411 
   Monetary variation    1,223    83,653    84,876 
   Transfers    35,149    (35,149)  
   Amortization    (90,036)     (90,036)
As of December 31, 2008    47,133    1,272,770    1,319,903 
   Interest    21,242      21,242 
   Monetary variation    (73)   (11,994)   (12,067)
   Transfers    12,222    (12,222)  
   Amortization    (32,742)     (32,742)
As of March 31, 2009    47,782    1,248,554    1,296,336 
 

14


Table of Contents

7 Taxes and Social Contribution

 
                 
        Parent Company        Consolidated 
 
    31.03.2009    31.12.2008    31.03.2009    31.12.2008 
Current assets                 
   Deferred IRPJ/CSLL (a)   3,792    3,127    38,903    40,183 
   IRPJ/CSLL to be offset (b)   78,933    90,882    169,234    189,135 
   ICMS (VAT) to be offset        22,557    26,863 
   Other taxes to be offset        852    1,158 
    82,725    94,009    231,546    257,339 
Noncurrent assets                 
   Deferred IRPJ/CSLL (a)   122,175    121,338    390,169    400,141 
   ICMS (VAT) to be offset        68,327    62,468 
    122,175    121,338    458,496    462,609 
Current liabilities                 
   Deferred IRPJ/CSLL (a)       70,641    48,630 
   IRPJ/CSLL payable        35,982    115,476 
   ICMS (VAT) payable        138,513    132,380 
   PIS/Pasep and Cofins payable      14,706    24,611    38,353 
   REFIS Installments (c)   35,068    35,068    35,068    35,068 
   Income tax withheld on interest on capital      7,378      30,791 
   Other taxes    846    841    5,940    6,374 
    35,914    57,993    310,755    407,072 
Noncurrent liabilities                 
   Deferred IRPJ/CSLL (a)       26,728    28,910 
   ICMS (VAT) payable        660    618 
    -    -    27,388    29,528 
 
IRPF = Corporate income tax 
CSLL = Social contribution on net income 

c) Deferred income tax and social contribution

The Company records deferred income tax, calculated at the rate of 15%, plus an additional rate of 10%, and deferred social contribution, at the rate of 9%.

Taxes levied on the pension and healthcare plans are being realized according to the actuarial assessment conducted annually by an independent actuary, pursuant to the rules set forth in CVM Instruction no. 371/2000. Deferred taxes on all other provisions will be realized as judicial rulings are issued and regulatory assets are realized.

Under current tax legislation, tax losses and negative bases for social contributions may be offset against future income, up to the limit of 30% of the taxable income for each year, and do not lapse.

15


Table of Contents

Deferred income tax and social contribution credits have been recorded as follows:

 
                 
        Parent Company        Consolidated 
 
    31.03.2009    31.12.2008    31.03.2009    31.12.2008 
Current assets                 
   Pension and healthcare plans        4,395    4,405 
   Tax losses    3,660    3,073    3,659    3,073 
   Passive CVA        3,088    9,631 
   Temporary additions    132    54    27,761    23,074 
    3,792    3,127    38,903    40,183 
Noncurrent assets                 
   Pension and healthcare plans        135,366    144,552 
   Tax losses and negative tax basis    3,487    3,487    13,283    13,283 
   Temporary additions:         
       Provisions for contingencies    95,162    94,389    177,285    181,711 
       Provision for doubtful accounts    1,839    1,839    24,457    22,959 
       FINAN provision    4,563    4,563    4,563    4,563 
       Provisions for regulatory liabilities        8,938    7,062 
       Provision for effects of network charges        6,923    6,923 
       Amortization of goodwill    17,124    17,060    19,354    19,088 
    122,175    121,338    390,169    400,141 
(-) Current liabilities                 
   Active CVA        60,688    34,438 
   Surplus power        536    928 
   Temporary exclusions        9,417    13,264 
    -    -    70,641    48,630 
(-) Noncurrent liabilities                 
   Temporary exclusions                 
       Active CVA        16,489    17,068 
       TUSD, aquiculture, and irrigation rates        29    32 
       Regulatory assets        1,950    3,982 
       Gas supply        8,260    7,828 
    -    -    26,728    28,910 
 
    125,967    124,465    331,703    362,784 
 

The Company’s Board of Directors and Fiscal Council have approved the technical study prepared by the Chief Finance, Investor Relations, and Corporate Partnerships Office on future profitability projections, discounted at present value, which points out to the realization of deferred taxes. According to the estimate of future taxable income, the realization of deferred taxes is broken down below:

 
    Parent Company    Consolidated 
   
    Estimated    Actual    Estimated    Estimated    Actual    Estimated 
    realizable    realized    realizable    realizable    realized    realizable 
    amount    amount    amount    amount    amount    amount 
 
2009    6,173    54      66,942    13,715   
2010        14,850        33,915 
2011        4,876        25,709 
2012        3,053        31,380 
2013        3,053        42,176 
2014            3,265            25,790 
2015 to 2017        1,839        36,038 
Until 2019        95,031        136,695 
 
    6,173    54    125,967    66,942    13,715    331,703 
 

16


Table of Contents

Projected future income will be revised by management upon the approval of the financial statements for fiscal year 2009, in April 2010.

d) Income tax and social contribution paid in advance

Amounts recorded as corporate income tax (IRPJ) and social contribution on net income (CSLL) paid in advance refer to corporate tax return credits and amounts withheld.

e) Tax recovery program - REFIS

On December 16, 2000, COPEL signed up for the Tax Recovery Program (REFIS), established by Law no. 9,964, dated April 10, 2000, in order to pay in 60 monthly and equal installments an outstanding debt to the National Social Security Institute (INSS) in the consolidated amount of R$ 82,540, retroactive to March 1, 2000.

In September 2003, the Company, based on a legal opinion, set up a provision for the tax installments which hadn't been amortized until then. This provision, restated as of September 30, 2006, amounted to R$ 73,844, net, which corresponded to the restated balance of its REFIS account, taking into account amortizations and interest charges (the Long-Term Interest Rate or TJLP).

On August 31, 2006, COPEL filed for withdrawal from REFIS, only so it could sign up for the new tax installment plan established by Provisional Measure no. 303/2006, called Special Installment Plan or PAEX. By doing so, COPEL can now take advantage of the benefits of this plan by paying off the outstanding debt in six installments, with an 80% discount off the penalties and a 30% discount off the interest due. The Company’s application was completed on September 14, 2006.

The new installment plan includes only the remaining debt to INSS which was included in REFIS, i.e., net of payments already made, resulting in the amount, according to the INSS' initial calculation, of R$ 37,782, restated according to the SELIC interest rate, to be paid in six installments. These installments have already been paid.

Nevertheless, the INSS has already indicated it plans to “restore” the interest charges that were waived under REFIS I, in the amount of R$ 38,600 (as of September 2006). For purposes of provisioning, this amount has been restated and lowered 30%, pursuant to the benefit afforded under article 9 of Provisional Measure 303/96. However, as of the date of this report, the INSS has not made a decision on how to calculate the entire debt, and the collection of the corresponding credits remains suspended. Thus, the INSS has not offered any guarantees that their calculations are final, claiming that "final consolidation" of the debt has not been concluded yet.

Accordingly, in light of these circumstances, the Company maintained the provision in the amount of R$ 35,068 to cover the new INSS claim under PAEX.

17


Table of Contents

f) Conciliation of the provision for income tax and social contribution

The conciliation of the provision for income tax (IRPJ) and social contribution (CSLL), calculated at the applicable rates, with the amounts recorded in the statement of operations is shown below:

 
                 
        Parent Company        Consolidated 
 
    31.03.2009    31.03.2008    31.03.2009    31.03.2008 
Income before IRPJ and CSLL    270,569    249,835    413,245    388,976 
   IRPJ and CSLL (34%)   (91,993)   (84,944)   (140,503)   (132,252)
Tax effects on:                 
   Dividends    782      782    426 
   Equity in results of investees    92,713    90,621    3,021    4,928 
   Present value adjustment - Compagas        (219)   (197)
   Nondeductible expenses          (510)  
   Tax incentives        225    407 
   Other        (175)   (2,696)
   Current IRPJ and CSLL    -    -    (106,298)   (122,909)
   Deferred IRPJ and CSLL    1,502    5,677    (31,081)   (6,475)
 
IRPJ = Corporate income tax 
CSLL = Social contribution on net income 

8 Deferred Regulatory Assets and Liabilities - CVA

The Account for Compensation of “Portion A” Variations (CVA) records variations of the following Portion A cost items, as approved at the time of the annual rate reviews and as actually disbursed by companies during the year: Purchase of Power (Bilateral Contracts, Itaipu, and Auctions), Power Transport Costs (Transport of Power from Itaipu and Basic Network Charges), and Power Sector Charges – Fuel Consumption Account (CCC) quota; Energy Development Account (CDE) quota; System Service Charges (ESS); and Program of Incentives for Alternative Energy Sources (Proinfa) quotas.

ANEEL has ordered COPEL Distribuição to apply, as of June 24, 2008, an average provisional reduction of 3.35% to its rates for sales to final customers, pursuant to Resolution no. 663, dated June 23, 2008. Out of this percentage, - 7.17% correspond to the annual rate review, and 3.82% to financial components outside the range of the annual rate review. CVA is part of the latter group, amounting to R$ 74,440, and is made up of two installments: CVA being processed for rate year 2007-2008, in the amount of R$ 50,103, and CVA balance from the previous year to be offset, in the amount of R$ 24,337.

COPEL expects that the amounts classified as long-term assets will be recovered in up to two years.

18


Table of Contents

a) Breakdown of CVA balances

 
        Current        Noncurrent 
Consolidated        assets        assets 
 
    31.03.2009    31.12.2008    31.03.2009    31.12.2008 
Recoverable CVA variations, 2008 tariff adjustment                 
   Fuel Consumption Account - CCC    8,983    17,966     
   Use of transmission installations (Basic Network)   7,954    15,908     
   Electricity purchased for resale (Itaipu)   5,805    11,611     
   Charges for system services - ESS    4,566    9,133     
   Energy Development Account - CDE    85    169     
   Incentives to Alternative Energy Sources - PROINFA    1,409    2,817     
    28,802    57,604    -    - 
Recoverable CVA variations, 2009 tariff adjustment                 
   Fuel Consumption Account - CCC    18,636    8,512    6,212    8,512 
   Use of transmission installations (Basic Network)   27,337    12,412    9,112    12,412 
   Electricity purchased for resale (Itaipu)   57,063    16,588    19,021    16,588 
   Charges for system services - ESS    32,319    13,121    10,773    13,121 
   Energy Development Account - CDE    4,729    204    1,576    204 
   Incentives to Alternative Energy Sources - PROINFA    11,058      3,686   
   Electricity purchased for resale (CVA Energy)   6,386    1,881    752    1,881 
   Transmission of electricity purchased from Itaipu    1,973    776    658    776 
    159,501    53,494    51,790    53,494 
 
    188,303    111,098    51,790    53,494 
 
 
 
 
        Current        Noncurrent 
Consolidated        liabilities        liabilities 
 
    31.03.2009    31.12.2008    31.03.2009    31.12.2008 
CVA variations subject to offsetting, 2008 tariff adjustment                 
   Electricity purchased for resale (CVA Energy)   12,863    25,727     
   Transmission of electricity purchased from Itaipu    114    227     
    12,977    25,954    -    - 
CVA variations subject to offsetting, 2009 tariff adjustment                 
   Incentives to alternative sources (PROINFA)     2,373      2,373 
    -    2,373    -    2,373 
 
    12,977    28,327    -    2,373 
 

19


Table of Contents

b) Changes in the CVA

 
                         
    Balance    Deferral    Amortization    Restatement    Transfers    Balance 
 
    31.12.2008                    31.03.2009 
Assets                         
   Fuel Consumption Account - CCC    34,990    7,079    (9,195)   957      33,831 
   Use of transmission installations (Basic Network)   40,732    10,708    (8,307)   1,270      44,403 
   Electricity purchased for resale (Itaipu)   44,787    41,408    (6,193)   1,887      81,889 
   Charges for system services - ESS    35,375    15,526    (4,913)   1,670      47,658 
   Energy Development Account - CDE    577    5,819    (141)   135      6,390 
   Incentives to Alternative Sources - PROINFA    2,817    14,688    (1,533)   181      16,153 
   Electricity purchased for resale (CVA Energy)   3,762    3,280      96      7,138 
   Transmission of electricity purchased from Itaipu    1,552    1,020      59      2,631 
    164,592    99,528    (30,282)   6,255    -    240,093 
Current    111,098    67,683    (30,282)   4,722    35,082    188,303 
Noncurrent    53,494    31,845    -    1,533    (35,082)   51,790 
Liabilities                         
   Incentives to Alternative Sources - PROINFA    4,746    (4,711)     (35)    
   Electricity purchased for resale (CVA Energy)   25,727      (13,607)   743      12,863 
   Transmission of electricity purchased from Itaipu    227      (130)   17      114 
    30,700    (4,711)   (13,737)   725    -    12,977 
Current    28,327    (2,748)   (13,737)   740    395    12,977 
Noncurrent    2,373    (1,963)   -    (15)   (395)   - 
 

9 Other Regulatory Assets and Liabilities

Consolidated balances are shown below:

 
    Assets    Liabilities 
   
 
    current    noncurrent    total    current    noncurrent    total 
 
                        31.03.2009 
Copel Distribuição                         
Basic Network review adjustment (a)   11,817    3,044    14,861    14,511    3,628    18,139 
Contracted energy shortfall - CIEN contract (b)   15,753    2,742    18,495       
Other          721    240    961 
    27,570    5,786    33,356    15,232    3,868    19,100 
Copel Geração e Transmissão                         
Basic Network review adjustment (a)         5,839      5,839 
 
    27,570    5,786    33,356    21,071    3,868    24,939 
 
 
 
 
    Assets    Liabilities 
   
 
    current    noncurrent    total    current    noncurrent    total 
 
                        31.12.2008 
Copel Distribuição                         
Basic Network review adjustment (a)   11,458    6,088    17,546    14,511    7,255    21,766 
Contracted energy shortfall - CIEN contract (b)   20,053    4,997    25,050       
Other             
    31,511    11,085    42,596    14,513    7,257    21,770 
Copel Geração e Transmissão                         
Basic Network review adjustment (a)         11,679      11,679 
 
    31,511    11,085    42,596    26,192    7,257    33,449 
 

20


Table of Contents

a) Adjustment installments – transmission charges

The concession agreements signed by the transmission utilities contain a clause which sets the date of July 1, 2005 as the date of the first periodic review of annual allowed revenues. The rate review was concluded and its results were approved on July 1, 2007, applicable retroactively to July 1, 2005. Thus, it became necessary to calculate the retroactive discrepancy for the period from 2005 to 2007, which has been treated as a “review adjustment share”.

This balance, which has been accrued by transmission utilities, has been offset over 24 months, starting July 2007.

ANEEL has calculated the discrepancy corresponding to the “connection point review adjustments” for all distribution utilities, resulting in a balance of R$ 22,915 to be paid by COPEL Distribuição to COPEL Transmissão. As far as the “basic network review adjustments", the application of COPEL Distribuição's participation percentage to the total adjustment installments resulted in the amount of R$ 29,020 to be collected from the remaining transmission utilities which underwent the rate review process.

Out of the amounts that are being settled with the transmission utilities, R$ 10,739, which correspond to the “connection point review adjustments”, and R$ 14,511, which correspond to the “basic network review adjustments”, have been taken into account in COPEL Distribuição’s June 2008 rate review, and the remainder will be taken into account in the June 2009 rate review. The Company expects that the amounts classified as long-term will be recovered within two years.

b) Contracted energy shortfall – CIEN Contract

The amount of R$ 30,112 refers to an advance for the coverage of COPEL's uncovered power demand, which had to be supplied through spot market transactions from January through April 2008, due to the termination of the agreement with Companhia de Interconexão Energética – CIEN, authorized under MME Ordinance no. 294/2006. This amount was tentatively taken into account in COPEL Distribuição’s June 2008 rate review. Out of this amount, R$ 22,584 have been amortized as of March 2009, and R$ 7,528 shall be amortized over the following three months. The discrepancies resulting from the review of the advanced amounts total R$ 10,967, which shall be included in the 2009 rate review.

21


Table of Contents

10 Guarantees and Escrow Deposits

 
                 
        Parent Company        Consolidated 
 
    31.03.2009    31.12.2008    31.03.2009    31.12.2008 
Current assets                 
   Escrow deposits    30,522    436    174,565    150,794 
 
Noncurrent assets                 
   Collateral under STN agreement (Note 17.b)       37,515    37,868 
  -    -    37,515    37,868 
 

There is a sum of R$ 22,227 invested in Unibanco S.A., restated as of March 31, 2009 (R$ 19,730 as of December 31, 2008), yielding 100,5% of the variation of the DI rate, in a reserve account set up to secure a debt to BNDESPAR, in connection with the issue of ELEJOR debentures, pursuant to a Private Agreement on Revenue Attachment and Other Covenants.

There are R$ 55,980, restated as of March 31, 2009 (R$ 54,403 as of December 31, 2008), invested in Banco do Brasil, yielding 100% of the variation of the DI rate, in a reserve account set up to secure to ANEEL the construction of the Mauá Power Plant by COPEL Geração e Transmissão.

There are R$ 30,000 invested in Banco do Brasil in a CD yielding 100.2% of the Interbank Deposit rate, to secure a lawsuit to which the Parent Company is a party.

The remaining deposits meet the requirements of the Electric Energy Trading Chamber (CCEE) and are tied to the operations conducted at power auctions, CCEE settlements, and ANEEL auctions.

22


Table of Contents

11 Other Receivables

 
         
        Consolidated 
 
    31.03.2009    31.12.2008 
Current assets         
   Advance payments to employees    21,836    8,264 
   Advance payments    16,543    9,305 
   Lease of the Araucária Thermal Power Plant    10,357    7,474 
   Advance payments to suppliers    7,316    5,187 
   Decommissioning in progress    4,756    4,795 
   Installment plan for Onda Provedor de Serviços    4,348    4,348 
   Services to third-parties    4,133    1,347 
   Recoverable salaries of transferred employees    3,769    3,819 
   Compulsory loans    1,838    1,806 
   Sale of property and rights    1,779    1,872 
   Provision for doubtful accounts    (9,545)   (9,531)
   Other receivables    6,919    4,172 
    74,049    42,858 
Noncurrent assets         
   Sale of property and rights    4,701    4,788 
   Compulsory loans    3,624    3,561 
   Advance payments to suppliers    3,327    2,435 
   Advance payments    57    57 
   Other receivables      1,373 
    11,709    12,214 
 

The provision for doubtful accounts refers to the balance of installments owed by Onda Provedor de Serviços, whose realization is unlikely, and to an unrealizable amount mostly comprising wages of loaned employees.

12 Judicial Deposits

The balances of judicial deposits are shown below:

 
Consolidated    Total 
judicial deposits 
  Deduction of 
contingencies 
  Noncurrent 
assets 
  Noncurrent 
assets 
 
            31.03.2009    31.12.2008 
Labor claims    89,088    (27,793)   61,295    58,637 
                 
Civil                 
   Easements    5,706      5,706    10,660 
   Civil claims    21,010    (7,327)   13,683    14,846 
   Customers' tariff litigation    1,813    (877)   936    1,835 
    28,529    (8,204)   20,325    27,341 
                 
Tax claims    53,652    (27,004)   26,648    26,671 
                 
Other    848    -    848    848 
 
    172,117    (63,001)   109,116    113,497 
 

23


Table of Contents

 
Parent Company    Total 
judicial deposits 
  Deduction of 
contingencies 
  Noncurrent 
assets 
  Noncurrent 
assets 
 
            31.03.2009    31.12.2008 
Tax claims    52,659    (27,004)   25,655    25,653 
                 
Other    615      615    615 
 
    53,274    (27,004)   26,270    26,268 
 

Escrow deposits have been classified under Provisions for Contingencies and are detailed in Note 25.

13 Receivables from Related Parties

 
        Parent Company        Consolidated 
 
    31.03.2009    31.12.2008    31.03.2009    31.12.2008 
Subsidiaries                 
   Copel Geração e Transmissão                 
       Dividends receivable    369,617    562,618     
    369,617    562,618    -    - 
   Copel Distribuição                 
       Dividends receivable    91,100    141,100     
       Transferred financing - STN (a)   94,714    94,006     
       Loan agreement (b)   610,613    597,227     
    796,427    832,333    -    - 
   Copel Telecomunicações                 
       Dividends receivable    3,655    3,655     
    3,655    3,655    -    - 
   Compagas                 
       Dividends receivable    9,180    5,515     
    9,180    5,515    -    - 
   Elejor                 
       Loan agreement    244,493    238,060     
       Dividends receivable    936    936     
    245,429    238,996    -    - 
   Dominó Holdings                 
       Dividends receivable    5,237    5,237     
    5,237    5,237    -    - 
    1,429,545    1,648,354    -    - 
Investees                 
   Sanepar                 
       Dividends receivable    -    -    5,247    5,247 
    -    -    5,247    5,247 
 
    1,429,545    1,648,354    5,247    5,247 
 
Current assets - Dividends receivable    479,725    719,061    5,247    5,247 
Noncurrent assets    949,820    929,293    -    - 
 

24


Table of Contents

a) Transferred financing - STN

The Company transferred existing loans and financing to its wholly-owned subsidiaries at the time of their constitution in 2001. Nevertheless, since the agreements for transfer to the respective subsidiaries have not been formalized before the financial institutions, these amounts are also recorded under the Parent Company.

The balances of these loans and financing are transferred with the same interest and charges agreed by the Parent Company and are shown separately as receivables from the wholly-owned subsidiaries, and as loans and financing liabilities owed by the subsidiaries, in the amount of R$ 94,714 (R$ 94,006 as of 31 December, 2008) (Note 17.b).

b) Loan Agreement – COPEL Distribuição

On February 27, 2007, ANEEL approved the loan agreement signed by COPEL (lender) and COPEL Distribuição (borrower), in the amount of R$ 1,100,000. This loan has a five-year term, bearing interest corresponding to 104% of the DI rate, and its funds were used in the expenditure program for the concession and in the payment of debentures transferred to COPEL Distribuição, which were due on March 1, 2007.

25


Table of Contents

14 Investments

a) Main information about COPEL’s investees and subsidiaries

 
    Shares or quotas 
held by COPEL 
  COPEL's 
stake 
  Paid-in 
stock 
  Shareholders' 
  Net 
income 
           
    Common    Preferred    Quotas    %    capital    equity (2)   (losses) (2)
 
Investees                            31.03.2009 
Sanepar    51,797,823    12,949,456      34.75    374,268    832,073    21,872 
Sercomtel - Telecom.    9,018,088    4,661,913      45.00    246,896    147,333    (739)
Foz do Chopim        8,227,542    35.77    23,000    46,639    6,859 
Dona Francisca    153,381,798        23.03    66,600    50,987    6,122 
Sercomtel Celular    9,018,029    4,661,972      45.00    36,540      (2,970)
Dois Saltos Empreend. (1)       300,000    30.00    1,000    1,000   
Copel Amec (1)       48,000    48.00    100    315   
Carbocampel (1)   127,400        49.00    260    (153)   (12)
Escoelectric Ltda. (1)       3,220,000    40.00    6,532    (2,359)  
 
Subsidiaries                             
Copel Geração e Transm.    3,400,378,051        100.00    3,400,378    3,779,807    150,846 
Copel Distribuição    2,171,927,626        100.00    2,171,928    3,143,046    100,761 
Copel Telecomunicações    194,754,542        100.00    194,755    209,570    5,646 
Compagas    5,712,000    11,424,000      51.00    111,140    168,776    5,760 
Elejor    42,209,920        70.00    69,450    83,635    5,242 
Copel Empreendimentos (1)       397,983,311    100.00    397,983    404,082    (379)
UEG Araucária        565,951,934    80.00    707,440    660,254    (872)
Centrais Eólicas (1)       3,061,000    100.00    3,061    8,785    108 
Dominó Holdings    113,367,832        45.00    251,929    653,340    16,128 
 
   (1) Unaudited by independent auditors 
   (2) Shareholders' equity and net income adjusted to COPEL's accounting practices 

26


Table of Contents

b) Changes to the investments in investees and subsidiaries

 
Parent Company    Balance as of 
31.12.2008 
  Equity 
pick-up 
  AFCI    Proposed 
dividends 
and IOC 
  Balance as of 
31.03.2009 
 
Investees                     
   Sercomtel S.A. - Telecomunicações    84,886    (285)       84,601 
   Sercomtel Telecom. - Impairment (e)   (18,301)         (18,301)
   Foz do Chopim Energética Ltda.    16,519    2,453      (2,289)   16,683 
   Dona Francisca Energética S.A.    10,332    1,410        11,742 
   Dois Saltos Empreend. Geração Ener. Eletr. Ltda.    300          300 
   Copel Amec S/C Ltda.    149          151 
   Escoelectric Ltda.    (1,027)         (1,027)
   Escoelectric Ltda. - Afac    1,025          1,025 
   Carbocampel S.A.    (69)   (6)       (75)
   Carbocampel - Afac    1,059      21      1,080 
   Sercomtel Celular S.A.    6,195          6,195 
   Sercomtel Celular - Impairment (e)   (6,195)         (6,195)
    94,873    3,574    21    (2,289)   96,179 
Subsidiaries                     
   Copel Geração e Transmissão S.A.    3,628,961    150,846        3,779,807 
   Copel Distribuição S.A.    3,042,285    100,761        3,143,046 
   Copel Telecomunicações S.A.    203,924    5,646        209,570 
   Dominó Holdings S.A. (d)   286,745    7,258        294,003 
   (-) Negative goodwill - Dominó Holdings (d)   (74,402)         (74,402)
   UEG Araucária Ltda.    132,225    (174)       132,051 
   Cia. Paranaense de Gás - Compagas    86,803    2,938      (3,665)   86,076 
   Elejor - Centrais Elétricas do Rio Jordão S.A.    54,450    4,095        58,545 
   Centrais Eólicas do Paraná Ltda.    2,603    32        2,635 
    7,363,594    271,402    -    (3,665)   7,631,331 
Other investments                     
   Amazon Investment Fund - FINAM (c)   30,012          30,012 
   FINAM - Nova Holanda (c)   14,868          14,868 
   Northeast Investment Fund - FINOR (c)   9,870          9,870 
   FINAM - Investco (c)   7,903          7,903 
   Other tax incentives    2,315          2,315 
   Provision for losses - FINAM/FINOR (c)   (35,835)         (35,835)
   Provision for losses - Nova Holanda (c)   (14,868)         (14,868)
   Other investments    97          97 
    14,362    -    -    -    14,362 
 
    7,472,829    274,976    21    (5,954)   7,741,872 
 
   AFCI - advance for future capital increase 

27


Table of Contents

 
Parent Company    Balance as of 
31.12.2007 
  Equity 
pick-up 
  AFCI    Balance as of 
31.03.2008 
 
Subsidiaries                 
   Copel Geração e Transmissão    3,144,442    135,188      3,279,630 
   Copel Transmissão         
   Copel Distribuição    2,663,911    113,825      2,777,736 
   Copel Telecomunicações    193,735    1,177      194,912 
   Copel Participações    1,226,802    16,344    67,000    1,310,146 
    7,228,890    266,534    67,000    7,562,424 
Other investments                 
   Amazon Investment Fund - FINAM (c)   30,012        30,012 
   FINAM - Nova Holanda (c)   14,868        14,868 
   Northeast Investment Fund - FINOR (c)   9,870        9,870 
   FINAM - Investco (c)   7,903        7,903 
   Other tax incentives    2,315        2,315 
   Provision for losses - FINAM/FINOR (c)   (26,801)       (26,801)
   Other investments         
    38,174    -    -    38,174 
 
    7,267,064    266,534    67,000    7,600,598 
 
   AFCI - advance for future capital increase                 

 
Consolidated    Balance as of 
31.12.2008 
  Equity 
pick-up 
  AFCI    Dividends    Transfers to/from 
construction 
in progress 
  Balance as of 
31.03.2009 
 
Investees                         
   Sercomtel Telecom.    84,886    (285)         84,601 
   Sercomtel Telecom. - Impairment (e)   (18,301)           (18,301)
   Foz do Chopim    16,519    2,453      (2,289)     16,683 
   Dona Francisca    10,332    1,410          11,742 
   Dois Saltos Empreend.    300            300 
   Copel Amec    149            151 
   Escoelectric    (1,027)           (1,027)
   Escoelectric - AFCI    1,025            1,025 
   Carbocampel    (69)   (6)         (75)
   Carbocampel - AFCI    1,059      21        1,080 
   Sercomtel Celular    6,195            6,195 
   Sercomtel Celular - Impairment (e)   (6,195)           (6,195)
   Sanepar    281,524    7,600          289,124 
    376,397    11,174    21    (2,289)   -    385,303 
Other investments                         
   Amazon Investment Fund - FINAM (c)   30,012            30,012 
   FINAM - Nova Holanda (c)   14,868            14,868 
   Northeast Investment Fund - FINOR (c)   9,870            9,870 
   FINAM - Investco (c)   7,903            7,903 
   Other tax incentives    2,315            2,315 
   Provision for losses - FINAM/FINOR (c)   (35,835)           (35,835)
   Provision for losses - Nova Holanda (c)   (14,868)           (14,868)
   Assets assigned for future use    3,821            3,826 
   Other investments    1,455          (160)   1,295 
    19,541    -    -    -    (155)   19,386 
 
    395,938    11,174    21    (2,289)   (155)   404,689 
 
   AFCI - advance for future capital increase 

28


Table of Contents

 
Consolidated    Balance as of 
31.12.2007 
  Equity 
pick-up 
  Additions 
& AFCI 
  Dividends    Other    Balance as of 
31.03.2008 
 
Investees                           
   Dominó Holdings (d)   90,155          (90,155) (1)  
   Sanepar      9,354            264,539  (1)   273,893 
   Sercomtel Telecomunicações    82,153    880            83,033 
   Foz do Chopim    16,353    2,236      (1,252)       17,337 
   Sercomtel Celular    8,759    (1,506)           7,253 
   Dona Francisca    5,931    973            6,904 
   Copel Amec    140              142 
   Carbocampel    (56)   (3)           (59)
   Carbocampel - AFCI    1,059              1,059 
   Escoelectric    (1,390)   552            (838)
   Escoelectric - AFCI    1,025              1,025 
   Braspower - AFCI    176              176 
   UEG Araucária      (238)       238     
    204,305    12,250    -    (1,252)   174,622      389,925 
Other investments                           
   Amazon Investment Fund - FINAM (c)   30,012              30,012 
   FINAM - Nova Holanda (c)   14,868              14,868 
   Northeast Investment Fund - FINOR (c)   9,870              9,870 
   FINAM - Investco (c)   7,903              7,903 
   Other tax incentives    2,315              2,315 
   Provision for losses - FINAM/FINOR (c)   (26,801)             (26,801)
   Assets assigned for future use    4,588              4,588 
   Other investments    1,508      46          1,554 
   Other               
    44,263    -    48    -    -      44,311 
 
    248,568    12,250    48    (1,252)   174,622      434,236 
 
   (1) Inclusion of Dominó Holdings in the consolidation of financial statements. 
   AFCI - advance for future capital increase 

c) Tax Incentives

In 2008, COPEL recalculated the market value of its investments in FINAM and FINOR, based on their average prices on the São Paulo Stock Exchange (BOVESPA). Based on the FINAM prices on December 29, 2008, and on the FINOR prices on December 22, 2008, the Company recorded an addition to the provision for the devaluation of these investments in the amount of R$ 9,034, thus raising the total balance to R$ 35,835. As for the Nova Holanda investment, COPEL recorded in 2008 a provision for its devaluation in the amount of R$ 14,868, due to the successive losses Nova Holanda has suffered over the years. The total effect of these provisions on the 2008 income, recorded in the fourth quarter, was R$ 23,902.

d) Dominó Holdings

On January 14, 2008, COPEL became the holder of 45% of the share capital of Dominó Holdings S.A., by acquiring a 30% interest held by Sanedo Participações Ltda. for R$ 110,226, with an approximate discount of R$ 74,402, based on the expected future profitability of the company. Upon consolidation of the balance sheets, this discount was reclassified to Deferred Revenues, under Long-Term Liabilities.

29


Table of Contents

With this acquisition, COPEL acquired control of the company in cooperation with the remaining shareholders. Dominó Holdings has been consolidated into COPEL’s balance sheets proportionally to the Company’s interest in it.

The main items of assets, liabilities, and the statement of operations of Dominó Holdings, as well as the corresponding consolidated shares, are shown below:

 
Dominó Holdings S.A.    Balances as of 31.03.2009 
   
    Full amounts    Revaluation 
reserve (1)
  Adjusted balance    COPEL's stake 
(45%)
 
                 
ASSETS    711,763    (46,740)   665,023    299,260 
Current assets    14,742      14,742    6,633 
Noncurrent assets    697,021    (46,740)   650,281    292,627 
 
LIABILITIES    711,763    (46,740)   665,023    299,260 
Current liabilities    11,676      11,676    5,253 
Noncurrent liabilities         
Shareholders' equity    700,080    (46,740)   653,340    294,003 
                 
STATEMENT OF OPERATIONS                 
Operating expenses    (860)     (860)   (387)
Interest income (expenses)   100      100    45 
Equity in results of investees    16,228    660    16,888    7,600 
Provision for income tax and social contribution         
Net income for the period    15,468    660    16,128    7,258 
 
(1) Balances have been adjusted due to accounting practices not adopted by the Parent Company 

e) Asset impairment

The conclusion in December 2008 of impairment tests on COPEL’s assets, based, when applicable, on the same assumptions mentioned in the Property, Plant, and Equipment note (Note 15.d), indicated, with an adequate level of certainty, that a part of the assets in Sercomtel Telecomunicações S/A (R$ 18,301) and Sercomtel Celular S/A (R$ 6,195) were valued above their recoverable amount, thus requiring the accrual of corresponding losses due to impossibility of recovering these amounts through future profits by these companies. These losses were recorded in the fourth quarter of 2008.

No need to record provisions for devaluation of investments was identified in 2008 for the remaining assets of the Company.

30


Table of Contents

15 Property, Plant, and Equipment

 
        Accumulated    Consolidated        Accumulated    Consolidated 
    Cost    depreciation    net value    Cost    depreciation    net value 
 
            31.03.2009            31.12.2008 
In service (a)                        
 Copel Geração e Transmissão    5,263,719    (2,105,557)   3,158,162    5,250,080    (2,070,575)   3,179,505 
 Copel Distribuição    4,934,910    (2,332,213)   2,602,697    4,816,165    (2,288,653)   2,527,512 
 Copel Telecomunicações    359,323    (212,959)   146,364    358,300    (206,587)   151,713 
 Compagas    161,159    (44,385)   116,774    159,486    (42,324)   117,162 
 Elejor    606,775    (50,785)   555,990    606,737    (46,689)   560,048 
 UEG Araucária    641,806    (115,939)   525,867    641,682    (107,978)   533,704 
 Centrais Eólicas do Paraná    4,129    (2,476)   1,653    4,129    (2,424)   1,705 
 Dominó Holdings             
    11,971,822    (4,864,314)   7,107,508    11,836,580    (4,765,230)   7,071,350 
Construction in progress                         
 Copel Geração e Transmissão    379,731      379,731    350,721      350,721 
 Copel Distribuição    469,867      469,867    470,643      470,643 
 Copel Telecomunicações    32,756      32,756    29,874      29,874 
 Compagas    39,637      39,637    33,671      33,671 
 Elejor    8,292      8,292    8,292      8,292 
 UEG Araucária    968      968    881      881 
    931,251    -    931,251    894,082    -    894,082 
    12,903,073    (4,864,314)   8,038,759    12,730,662    (4,765,230)   7,965,432 
Special liabilities (b)                        
 Copel Geração e Transmissão    (187)     (187)   (187)     (187)
 Copel Distribuição    (948,508)   30,640    (917,868)   (936,678)   20,108    (916,570)
    (948,695)   30,640    (918,055)   (936,865)   20,108    (916,757)
 
    11,954,378    (4,833,674)   7,120,704    11,793,797    (4,745,122)   7,048,675 
 

Under Articles 63 and 64 of Decree no. 41,019, dated February 26, 1957, the assets and facilities used mostly in the generation, transmission, distribution, and sale of power are attached to these services and cannot be withdrawn, sold, assigned, or mortgaged without the prior written consent of the regulatory agency. ANEEL Resolution no. 20/1999 regulates the release of assets from the concessions of the Public Electric Energy Utilities, granting prior authorization to the release of assets that are deemed useless to the concession, when intended for sale, provided that the proceeds from such transaction be deposited in a special bank account assigned to investment in the concession.

Financial charges and interest on loans from third-parties for investments in construction in progress have been recorded through transfers to Property, Plant, and Equipment in Progress, for a total of R$ 606 in 2009 (Note 17).

31


Table of Contents

a) Property, plant, and equipment in service

 
        Accumulated    Consolidated        Accumulated    Consolidated 
    Cost    depreciation    net value    Cost    depreciation    net value 
 
            31.03.2009            31.12.2008 
Machinery and equipment    7,995,678    (3,330,172)   4,665,506    7,874,370    (3,258,316)   4,616,054 
Reservoirs, dams, and water mains    2,871,224    (1,086,444)   1,784,780    2,869,541    (1,069,984)   1,799,557 
Buildings    714,671    (326,152)   388,519    710,019    (320,950)   389,069 
Land    123,201      123,201    121,357      121,357 
Gas pipelines    115,899    (28,469)   87,430    115,738    (27,504)   88,234 
Vehicles    132,440    (81,601)   50,839    127,128    (77,327)   49,801 
Furniture and implements    18,709    (11,476)   7,233    18,427    (11,149)   7,278 
 
    11,971,822    (4,864,314)   7,107,508    11,836,580    (4,765,230)   7,071,350 
 

b) Special liabilities

Special liabilities comprise customers’ contributions, Federal Government budget grants, federal, State, and municipal funds, and special credits assigned to the investments in facilities tied to a concession. Special liabilities are not onerous liabilities and are not credits owned by shareholders. The scheduled date for settlement of these liabilities was the concession expiration date.

ANEEL, by means of Regulatory Resolution no. 234/2006, dated October 31, 2006, established the guidelines, the applicable methodologies, and the initial procedures for the conduction of the second cycle of the periodic rate review involving the Brazilian power distribution utilities, changing the characteristics of these liabilities. Both the outstanding balance and new additions have been amortized as of July 1, 2008, pursuant to ANEEL Ruling no. 3,073/06 and Circular Letter no. 1,314/07. This amortization is calculated based on the same average depreciation rate of the corresponding assets.

For purposes of calculating the compensation for the assets linked to the concession and transferable to the Federal Government, on the concession expiration date the remaining balance of special liabilities, if any, will be deducted from the residual value of the assets, both assessed according to criteria set by ANEEL.

The change in the characteristics of these liabilities results from the new rate-setting mechanism introduced by this new Regulatory Resolution, which establishes that the depreciation of assets acquired with funds from Special Liabilities will no longer be included in the B Portion of the companies’ revenues.

32


Table of Contents

c) Changes in property, plant, and equipment

 
        Construction    Special     
Balances    In service    in progress    liabilities    Consolidated 
 
As of December 31, 2007    6,973,238    725,895    (857,192)   6,841,941 
   Expenditure program      122,170      122,170 
   Reclass. of additions to Cons. Cruzeiro do Sul      394      394 
   Transfer to P.,P.,&E. in service    115,000    (115,000)    
   Depreciation quotas    (100,923)       (100,923)
   Write-offs    (6,598)   (225)     (6,823)
   Customer contributions        (13,156)   (13,156)
   Transfers between P.,P.,&E. and intangible assets      (601)       (595)
   Transfers of assets assigned for future use    (45)       (45)
   Supplemental provisions for contingencies      (3,700)     (3,700)
As of March 31, 2008    6,980,678    728,933    (870,348)   6,839,263 
   Expenditure program      525,476      525,476 
   Reclass. of additions to Cons. Cruzeiro do Sul      49,673      49,673 
   Transfer to P.,P.,&E. in service    422,430    (422,430)    
   Depreciation quotas    (314,497)     20,108    (294,389)
   Write-offs    (17,259)   (1,780)     (19,039)
   Customer contributions        (66,517)   (66,517)
   Transfers between P.,P.,&E. and intangible assets    (1)   (2,563)     (2,564)
   Transfers of assets assigned for future use    (1)       (1)
   Supplemental provisions for contingencies      16,773      16,773 
As of December 31, 2008    7,071,350    894,082    (916,757)   7,048,675 
   Expenditure program      180,717      180,717 
   Transfer to P.,P.,&E. in service    150,076    (150,076)    
   Depreciation quotas in the statement of operations    (107,325)     10,532    (96,793)
   Capitalized depreciation quotas    (2,435)   2,435     
   Write-offs    (4,158)   (686)       (4,844)
   Customer contributions        (11,830)   (11,830)
   Reclass. of additions to Cons. Cruzeiro do Sul      160      160 
   Transfers of assets assigned for future use      (5)     (5)
   Supplemental provisions for contingencies      4,624      4,624 
As of March 31, 2009    7,107,508    931,251    (918,055)   7,120,704 
 

d) Asset impairment

The Company has a policy of periodically evaluating and monitoring the projected future performance of its assets. Accordingly, and in light of Technical Ruling CPC 01 – Writing Assets down to their Recoverable Value, whenever there is clear evidence that the Company has assets recorded at unrecoverable values or whenever events or changes in circumstances indicate that the book value of an asset may not be recoverable in the future the Company must immediately account for such discrepancies by means of a provision for losses.

The main principles underpinning the conclusions of COPEL’s impairment tests are listed below:

1) Lowest level of cash generating unit: held concessions are analyzed individually;

2) Recoverable Value: use value, or an amount equivalent to the discounted cash flows (before taxes) resulting from the continuous use of an asset until the end of its useful life;

33


Table of Contents

3) Assessment of use value: based on future cash flows in constant currency, converted to current value according to a real discount rate, before income taxes.

The respective cash flows are estimated based on actual operational results, on the Company's annual corporate budget, as approved by the Board of Directors, on the resulting multi-year budget, and on future trends in the power sector.

As for the time frame for the analysis, the Company takes into account the expiration date of each concession.

As for market growth, COPEL’s projections are consistent with historical data and the Brazilian economy's growth prospects.

The respective cash flows are discounted at average discount rates, obtained through a methodology commonly employed on the market and supported by the regulatory agency, taking into account the weighed average cost of capital (WACC).

Management believes it has a contractually guaranteed right to compensation for the assets tied to concessions upon their expiration, and it accepts, for the time being and until further regulation is issued on this matter, that such compensation be valued according to the book value of the respective assets. Thus, the principle of valuation of residual assets upon expiration of concessions has been established as the book value of these assets.

In light of the principles discussed above, COPEL has not identified the need to set aside a provision for impairment of its assets.

e) Consórcio Energético Cruzeiro do Sul (1)

Consórcio Energético Cruzeiro do Sul, an independent power producer owned by COPEL Geração e Transmissão (with a 51% interest) and by Eletrosul Centrais Elétricas S.A. (49%), won, on October 10, 2006, at the ANEEL Auction of Power from New Projects 004/2006, the rights to the 35-year concession of the Mauá Hydroelectric Power Plant.

This project is included in the Federal Government’s Growth Acceleration Program (PAC) and will comprise a main powerhouse rated 350 MW and a secondary powerhouse rated 11 MW, for a total of 361 MW of installed capacity, which is enough to supply approximately one million people. The facility will take advantage of the hydroelectric potential discovered in the middle section of the Tibagi River, between the towns of Telêmaco Borba and Ortigueira, in mideastern Paraná. The plant’s reservoir will have a perimeter of 80 km and a surface of 83.8 km2. The dam will have a length of 745 m and a maximum height of 85 m and will be built with roller-compacted concrete and a clay-filled embankment. The dam’s total solid volume will be around 630,000 m3.

34


Table of Contents

Total estimated expenditures amount to approximately R$ 1,000,000 as of October 2006, of which 51% (R$ 510,000) will be invested by COPEL Geração e Transmissão, while the remaining 49% (R$ 490,000) will be invested by Eletrosul.

On November 17, 2008, the board of Banco Nacional de Desenvolvimento Econômico e Social – BNDES approved the financing for the Mauá Hydroelectric Power Plant. The financed amount corresponds to approximately 70% of COPEL's total expenditures in connection with the Mauá Power Plant.

The power from the Mauá Power Plant was sold at an ANEEL auction at the final rate of R$ 112.96/MWh, restated according to the IPCA inflation index starting on November 1, 2006. The company sold 192 average MW, for supply starting in January 2011. The assured power of the project, established in its concession agreement, was 197.7 average MW, after full motorization, and the maximum reference rate set in the auction notice was R$ 116.00/MWh.

Work began in May 2007 with the procurement of the basic project and the beginning of the executive project for the facility and its associated transmission system, the preparation of technical specifications, calculation records, designs, and other documents regarding the different structures within the facility, additional geological surveys, and topography services. The basic project has been concluded and approved by ANEEL. The project’s Environmental Impact Study and Environmental Impact Report have been disclosed at a public hearing and approved by the licensing authority, resulting in the issue of Installation License no. 6,496/2008. The service order for the beginning of the construction of the Mauá Hydroelectric Power Plant was signed on July 21, 2008, and commercial generation is scheduled for 2011.

The construction site has been set up, with area cleanup, terrain leveling, landfill compaction, and construction of industrial and administrative facilities and personnel quarters. The following tasks have also been concluded: excavation of ordinary soil and exposed rock in the river diversion structure; excavation of ordinary soil around the opening of the intake tunnel, the rock quarry, the load chamber, the powerhouse, and the tailrace channel. The following tasks are currently being carried out: excavation of exposed rock in the load chamber, the powerhouse, and the tailrace channel, and excavation of underground rock in the river diversion tunnels, intake tunnels, and access tunnels to the penstocks.

Total expenses already owed to suppliers of equipment and services amounted to R$ 598.000 as of March 31, 2009 (51% owed by COPEL and 49% owed by Eletrosul).

35


Table of Contents

As of January 2009, in compliance with ANEEL Ruling no. 3,467, dated September 18, 2008, expenditures in this project have been recorded under Property, Plant, and Equipment, proportionally to the Company’s stake, pursuant to the Electric Energy Public Service Accounting Manual. In March 2009, COPEL Geração e Transmissão’s balance under Property, Plant, and Equipment related to this project was R$ 87,193.

(1) Technical information unaudited by the independent auditors.

16 Intangible assets

 
    Rights of use    Concession   Accumulated                        Consolidated 
    of software    and goodwill    amortization        Easements   R & D    Other        Net value 
 
                                31.03.2009    31.12.2008 
In service 
                                   
   Assets with estimated useful lives                                     
   Copel Geração e Transmissão    11,892      (8,901)   (1)   11,166        14,157    13,679 
   Copel Distribuição    30,037      (25,059)   (1)   20,713        25,691    25,556 
   Copel Telecomunicações    4,066      (3,256)   (1)         810    973 
   Compagas    3,455      (1,548)   (1)         1,907    1,997 
   Elejor              101        101    101 
   UEG Araucária    90      (69)   (1)         21    23 
   Dominó Holdings                     
   Concession - Elejor (a)     22,626    (2,263)             20,363    20,552 
   Concession - Copel Empreend. (b)     53,954    (5,278)             48,676    49,262 
   Concession - Sanepar (d)     10,942    (7,478)             3,464    3,647 
    49,541    87,522    (53,852)       31,980    -    -    115,191    115,791 
   Assets with no estimated useful lives                                     
   Copel Geração e Transmissão                  30    30    30 
   Copel Distribuição                  103    103    103 
   Compagas                  20    20    20 
   Goodwill - Sercomtel Telecom. (c)     42,289    (42,289)              
   Goodwill - Sercomtel Celular (c)     5,814    (5,814)              
    -    48,103    (48,103)       -      153    153    153 
    49,541    135,625    (101,955)       31,980    -    153    115,344    115,944 
In progress 
                                   
   Copel Geração e Transmissão    90            288        378    249 
   Copel Distribuição    476            749    9,132      10,357    1,764 
   Copel Telecomunicações    135                  135    135 
   Elejor              27        27    27 
    701    -    -        1,064    9,132    -    10,897    2,175 
 
                                126,241    118,119 
 
 (1) Annual amortization rate: 20% 

a) Concession - ELEJOR

The acquisition of the shares held by Triunfo Participações S.A., in December 2003, resulted in total goodwill of R$ 22,626, which corresponded to a balance of R$ 20,363 as of March 31, 2009, under the Parent Company. The linear amortization of goodwill was economically determined by the expected income from the commercial operation of the concession, which expires in October 2036, and its effect on the statement of operations as of March 31, 2009 was R$ 189 (R$ 189 as of March 31, 2008).

36


Table of Contents

b) Concession - COPEL Empreendimentos

The acquisition on May 31, 2006 of COPEL Empreendimentos, which was previously known as El Paso Empreendimentos e Participações Ltda. and which held a 60% interest in UEG Araucária Ltda., resulted in net final goodwill of R$ 53,954, with a balance of R$ 48,676 as of March 31, 2009. The linear amortization of goodwill was economically determined by the expected income from the commercial operation of the concession, which expires in December 2029, and its effect on the statement of operations as of March 31, 2009 was R$ 586 (R$ 586 as of March 31, 2008).

c) Goodwill - Sercomtel

The investments in Sercomtel S.A. Telecomunicações and in Sercomtel Celular S.A. include goodwill on acquisition (R$ 42,289 and R$ 5,814), which have been fully amortized at the annual rate of 10%, with a charge to income of R$ 1,202 (R$ 1,057 + R$ 145) as of March 31, 2008. The payment of goodwill was determined by the expected future profitability, resulting from the assessment of the return on investment based on discounted cash flows.

d) Concession - Sanepar

In 1998, the acquisition by Dominó Holdings S.A. of an interest in SANEPAR resulted in goodwill of R$ 24,316, with a balance of R$ 7,700 as of March 31, 2009. This balance, proportionally to COPEL's stake (45%), corresponds to r$ 3,464, and has been amortized over 15 years as of 1999, at the rate of R$ 61 a month, with a charge to income of R$ 183 as of March 31, 2009 (R$ 183 as of March 31, 2008).

37


Table of Contents

e) Changes in intangible assets

 
Balances    In service    In progress    Consolidated 
 
As of December 31, 2007    112,888    3,603    116,491 
   Consolidation of Dominó Holdings - SANEPAR concession    4,378      4,378 
   Expenditure program      1,176    1,176 
   Capitalizations    606    (606)  
   Amortization quotas - concession    (958)     (958)
   Amortization quotas - goodwill    (1,202)     (1,202)
   Amortization quotas - other intangible assets    (933)     (933)
   Write-offs    (66)     (66)
   Transfer between intangible assets and P.,P.,&E.    (6)   601    595 
As of March 31, 2008    114,707    4,774    119,481 
   Expenditure program      2,862    2,862 
   Capitalizations    8,024    (8,024)  
   Amortization quotas - concession    (2,871)     (2,871)
   Amortization quotas - goodwill    (589)     (589)
   Amortization quotas - other intangible assets    (2,878)     (2,878)
   Write-offs    (450)     (450)
   Transfer between intangible assets and P.,P.,&E.      2,563    2,564 
As of December 31, 2008    115,944    2,175    118,119 
   Expenditure program      10,164    10,164 
   Capitalizations    1,495    (1,495)  
   Amortization quotas - concession    (958)       (958)
   Amortization quotas - other intangible assets    (882)     (882)
   Capitalized amortization quotas    (53)   53   
   Write-offs    (202)     (202)
As of March 31, 2009    115,344    10,897    126,241 
 

17 Loans and Financing

The breakdown of the consolidated and of the Company’s loans and financing balances is featured below:

 
Consolidated                Current        Noncurrent 
                liabilities        liabilities 
 
        Accrued    31.03.2009    31.12.2008    31.03.2009    31.12.2008 
    Principal amount    interest    Total    Total         
Foreign currency                         
   IDB (a)   23,512    401    23,913    25,938    22,715    36,552 
   National Treasury (b)   7,496    2,655    10,151    8,647    84,563    85,359 
   Banco do Brasil (c)   2,888    18    2,906    6,517     
   Eletrobrás (d)           36    36 
    33,903    3,075    36,978    41,109    107,314    121,947 
Local currency (reais )                        
   Banco do Brasil (c)   158    3,675    3,833    16,410    330,317    330,389 
   Eletrobrás (d)   33,069    12    33,081    34,411    265,889    275,207 
   Eletrobrás - Elejor (e)           26,598    26,092 
   BNDES - Compagas (f)   6,517      6,517    6,526    11,463    13,111 
   Finep (g)           2,311    2,310 
    39,744    3,693    43,437    57,352    636,578    647,109 
 
    73,647    6,768    80,415    98,461    743,892    769,056 
 

38


Table of Contents

 
Parent Company                Current        Noncurrent 
                liabilities        liabilities 
 
        Accrued    31.03.2009    31.12.2008    31.03.2009    31.12.2008 
    Principal amount    interest    Total    Total         
Foreign currency                         
   National Treasury (b)   7,496    2,655    10,151    8,647    84,563    85,359 
                       
Local currency (reais )                        
   Banco do Brasil (c)     3,671    3,671    16,249    329,600    329,600 
 
    7,496    6,326    13,822    24,896    414,163    414,959 
 

Maturity of long-term installments

 
    Foreign    Local         
    currency    currency        Consolidated 
 
            31.03.2009    31.12.2008 
2010    17,937    15,880    33,817    73,988 
2011    17,938    54,406    72,344    68,064 
2012    4,844    47,951    52,795    50,069 
2013    3,108    47,891    50,999    48,257 
2014    1,558    377,336    378,894    376,151 
2015      47,120    47,120    44,368 
2016      28,089    28,089    26,767 
2017      6,550    6,550    6,719 
2018      5,760    5,760    5,975 
2019      3,371    3,371    3,726 
2020      2,218    2,218    2,456 
2021         
After 2022    61,929      61,929    62,511 
 
    107,314    636,578    743,892    769,056 
 

39


Table of Contents

Changes in loans and financing

 
        Foreign currency        Local currency    Consolidated 
    Current    Noncurrent    Current    Noncurrent    Total 
 
As of December 31, 2007    30,498    118,282    62,186    716,986    927,952 
   Capitalized interest          2,749    2,749 
   Interest    2,054      15,780    595    18,429 
   Monetary and exchange variation    929    1,316    84    3,397    5,726 
   Transfers    11,078    (11,078)   12,039    (12,039)  
   Repayments    (12,397)     (41,637)     (54,034)
As of March 31, 2008    32,162    108,520    48,452    711,688    900,822 
   Funds raised          34,818    34,818 
   Capitalized interest          9,313    9,313 
   Interest    5,273      53,608    2,186    61,067 
   Interest transferred to P.,P.,&E.        (1,470)     (1,470)
   Monetary and exchange variation    11,492    29,726    92    10,627    51,937 
   Transfers    16,299    (16,299)   121,523    (121,523)  
   Repayments    (24,117)     (164,853)     (188,970)
As of December 31, 2008    41,109    121,947    57,352    647,109    867,517 
   Capitalized interest          748    748 
   Interest    2,215      17,250    422    19,887 
   Interest transferred to P.,P.,&E. (Note 15)       (606)     (606)
   Monetary and exchange variation    (699)   (2,996)   (49)   (647)   (4,391)
   Transfers    11,637    (11,637)   11,054    (11,054)  
   Repayments    (17,284)     (41,564)     (58,848)
As of March 31, 2009    36,978    107,314    43,437    636,578    824,307 
 

a) Inter-American Development Bank - IDB

Loan for the Segredo Hydroelectric Power Plant and for the Jordão River Diversion Project, received on 15 January 1991, in the amount of US$ 135,000. This debt is amortized semi-annually, with final maturity in January 2011. Interest is calculated according to the IDB funding rate, which in the first quarter of 2009 was 4,21% p.a. The agreement features provisions providing for termination in the following cases:

1) Default by the debtor on any other obligation set forth in the agreement or agreements signed with the bank for financing of the project;

2) Withdrawal or suspension of the Federal Republic of Brazil as a member of the IDB;

3) Default by the guarantor, if any, of any obligation set forth in the guaranty agreement;

4) Ratio between current assets and total short-term commercial and bank financing, except for the current share of long-term indebtedness and dividends to be reinvested, lower than 1.2; and

5) Ratio between long-term indebtedness and shareholders’ equity exceeding 0.9.

40


Table of Contents

This agreement is guaranteed by the Federal Government and by mortgage and fiduciary guarantees.

b) Department of the National Treasury - STN

The restructuring of medium and long-term debt, signed on May 20, 1998, in connection with the financing received under Law no. 4,131/62, is shown below:

 
Bond type    Term 
(years)
  Final 
maturity 
  Grace period 
(years)
  Consolidated 
 
                31.03.2009    31.12.2008 
   Par Bond    30    15.04.2024    30    37,513    37,296 
   Capitalization Bond    20    15.04.2014    10    17,694    17,507 
   Debt Conversion Bond    18    15.04.2012    10    12,465    12,368 
   Discount Bond    30    15.04.2024    30    26,095    25,896 
   New Money Bonds    15    15.04.2009      470    466 
   Flirb    15    15.04.2009      477    473 
 
                94,714    94,006 
 

The annual interest rates and repayments are as follows:

 
         
Bond type    Annual interest rates (%)   Payments 
 
   Par Bond    6.0    single 
   Capitalization Bond    8.0    semi-annual 
   Debt Conversion Bond    Six-month LIBOR + 0.8750    semi-annual 
   Discount Bond    Six-month LIBOR + 0.8125    single 
   New Money Bonds    Six-month LIBOR + 0.8750    semi-annual 
   Flirb    Six-month LIBOR + 0.8125    semi-annual 
 

As collateral for this agreement, the Company assigned and transferred to the Federal Government, conditioned to the non-payment of any financing installment, the credits that are made to the Company’s centralized revenues account, up to a limit sufficient to cover the payment of installments and other charges payable upon each maturity. For the Discount and Par Bonds, there are collateral deposits of R$ 15,316 and R$ 22,199 as of March 31, 2009 (R$ 15,460 and R$ 22,408 as of December 31, 2008), respectively, recorded under guarantees and escrow deposits, in noncurrent assets (Note 10).

c) Banco do Brasil S.A.

The Company has the following contracts with Banco do Brasil:

1) Agreements denominated in Japanese yen for the gas-insulated substation at Salto Caxias, repayable in 20 semi-annual installments, starting on March 7, 2000, bearing interest of 2.8% p.a. and a 3.8% p.a. brokerage commission. This debt is secured by COPEL’s revenues;

41


Table of Contents

2) Private Credit Assignment Agreement with the Federal Government, through Banco do Brasil S.A., signed on March 30, 1994, repayable in 240 monthly installments based on the Price amortization system starting on April 1, 1994, monthly restated by the TJLP (Central Bank’s Long-Term Interest Rate) and IGP-M plus interest of 5.098% p.a. and secured by COPEL’s revenues.; and

3) The following Parent Company credit notes:

 
Credit notes    Issue 
date 
  Maturity    Interest due 
semi-annually 
  Principal 
amount 
  Interest    Total 
 
 Commercial no. 330.600.129    31.01.2007    31.01.2014    106.5% of average CDI rate    29,000    552    29,552 
 Industrial no. 330.600.132    28.02.2007    28.02.2014    106.2% of average CDI rate    231,000    2,269    233,269 
 Industrial no. 330.600.151    31.07.2007    31.07.2014    106.5% of average CDI rate    18,000    342    18,342 
 Industrial no. 330.600.156    28.08.2007    28.08.2014    106.5% of average CDI rate    14,348    141    14,489 
 Industrial no. 330.600.157    31.08.2007    31.08.2014    106.5% of average CDI rate    37,252    367    37,619 
 
                329,600    3,671    333,271 
 

As a guarantee, Banco do Brasil has been authorized to deduct any amounts credited, on any grounds, to the Company's deposit account to cover, in part or in full, the outstanding balance due under the line of credit. It has also been irrevocably authorized, regardless of prior notice, to offset the bank’s receivable, which corresponds to the outstanding balance due under the line of credit, with any credits the Company has or accrues at Banco do Brasil.

d) Eletrobrás – Centrais Elétricas Brasileiras S.A.

Loans originated from the Eletrobrás Financing Fund (FINEL) and from the Global Reversal Reserve (RGR) for the expansion of the generation, transmission, and distribution systems. Repayments started in February 1999, and the last payment is due in August 2021. Interest of 5.0% to 8.0% p.a. and principal are repaid monthly, adjusted by the FINEL and Federal Reference Unit (UFIR) rates.

Contract ECFS – 142/2006, was signed on May 11, 2006 by COPEL Distribuição and Eletrobrás, in the amount of R$ 74,340, for use in the “Luz para Todos” rural electrification program. Out of the total amount, R$ 42,480 came from RGR funds, and R$ 31,860 were economic subsidies from CDE (Energy Development Account) funds. This loan has a grace period of 24 months and bears interest of 5% p.a. plus a commission of 1% p.a. It is repayable in 120 equal monthly installments, with final maturity on September 30, 2018. As of March 2009, COPEL had withdrawn R$ 52,028, of which R$ 29,736 came from RGR funds.

42


Table of Contents

Contract ECFS – 206/2007, was signed on March 3, 2008 by COPEL Distribuição and Eletrobrás, in the amount of R$ 126,431, for use in the “Luz para Todos” rural electrification program. Out of the total amount, R$ 108,369 came from RGR funds, and R$ 18,061 were economic subsidies from CDE (Energy Development Account) funds. This loan has a grace period of 24 months and bears interest of 5% p.a. plus a commission of 1% p.a. It is repayable in 120 equal monthly installments, with final maturity on August 30, 2020. On July 28, 2008, COPEL withdrew R$ 37,929, of which R$ 32,511 came from RGR funds and R$ 5,418 from CDE funds.

These loans are secured by the revenues of COPEL’s subsidiaries, pursuant to a mandate issued by public act, and by the issue of promissory notes in the same number of outstanding installments.

e) Eletrobrás - Elejor

For purposes of presentation of the consolidated financial statements, the value of the shares to be redeemed by ELEJOR has been reclassified from minority interest to loans and financing, under long-term liabilities.

The 59,000,000 preferred shares in Elejor held by Eletrobrás, in the amount of R$ 59,900, shall be reacquired by the issuer (Elejor) in 32 consecutive quarterly installments, each in the amount of 1,871,875 shares, starting in the 24th month from the beginning of commercial operation of the project, which took place after the last generating unit entered operation on August 31, 2006.

The paid in amounts are restated according to the IGP-M index, pro rata temporis, between the date the shares were paid in and the actual payment date, plus interest of 12% p.a..

In August 2007, nine installments were bought back in advance by Elejor, for R$ 20,385, plus financial charges of R$ 18,725, for a total of R$ 39,110.

In December 2008, 29,035,700 shares were bought back by Elejor, for R$ 35,133, plus financial charges of R$ 54,867, for a total of R$ 90,000.

As of March 2009, the outstanding balance comprised a principal amount of R$ 9,217 plus R$ 17,381 in charges.

f) BNDES - Compagas

The BNDES balance includes four agreements signed by Compagas on December 14, 2001, repayable in 99 monthly installments, with interest of 4% p.a.. Two of these agreements were signed for the purchase of machinery and equipment, subject to the TJLP rate (limited to 6% p.a.), and two were signed for construction, facilities, and services, subject to the BNDES monetary unit (UMBND) rate.

43


Table of Contents

This financing is secured by Compagas’ gas supply receivables, which shall be deposited exclusively in a checking account at Banco Itaú S.A.

g) Financiadora de Estudos e Projetos - FINEP

1) Loan agreement no. 02070791-00, signed on November 28, 2007 to partially cover expenses incurred in the preparation of the "Generation Research and Development Project for 2007".

The total credit, in the amount of R$ 5,078, will be made available in six installments. The first one, in the amount of R$ 1,464, was withdrawn in April 2008, and the remaining ones will be deposited every 90 days, to the extent there is financial and budget availability. A share of 1% of the funds will be allocated to cover inspection and supervision expenses. The principal amount of this debt will be subject to equalized interest of 6,37% p.a., due on the 15th day of each month, including the months of the grace period. The outstanding balance will be paid to FINEP in 49 monthly and successive installments, the first one due on December 15, 2010, and the last one on December 15, 2014. COPEL Geração e Transmissão has committed to pay a share of the project preparation costs, with its own resources, in the minimum amount of R$ 564.

To secure the contract, COPEL Geração e Transmissão has authorized Banco do Brasil to withhold the amounts due to FINEP from the checking account in which its monthly revenues are deposited. In the event of breach of contract, COPEL shall lose the benefit of interest equalization.

2) Loan agreement no. 02070790-00, signed on November 28, 2007 to partially cover expenses incurred in the preparation of the "Transmission Research and Development Project for 2007".

The total credit, in the amount of R$ 3,535, will be made available in six installments. The first one, in the amount of R$ 844, was withdrawn in October 2008, and the remaining ones will be deposited every 90 days, to the extent there is financial and budget availability. A share of 1% of the funds will be allocated to cover inspection and supervision expenses. The principal amount of this debt will be subject to equalized interest of 6.13 % p.a., due on the 15th day of each month, including the months of the grace period. The outstanding balance will be paid to FINEP in 49 monthly and successive installments, the first one due on December 15, 2010, and the last one on December 15, 2014. COPEL Geração e Transmissão has committed to pay a share of the project preparation costs, with its own resources, in the minimum amount of R$ 393.

44


Table of Contents

To secure the contract, COPEL Geração e Transmissão has authorized Banco do Brasil to withhold the amounts due to FINEP from the checking account in which its monthly revenues are deposited. In the event of breach of contract, COPEL shall lose the benefit of interest equalization.

18 Debentures

The balance of debentures is broken down below:

 
  Current 
liabilities 
Noncurrent 
liabilities 
 
    Accrued  31.03.2009  31.12.2008  31.03.2009  31.12.2008 
  Principal amount  Interest  Total  Total     
Parent Company (a) 5,770  5,770  169,233  600,000  600,000 
Elejor (b) 30,476  2,577  33,053  25,767  194,617  202,116 
 
  30,476  8,347  38,823  195,000  794,617  802,116 
 

Maturity of long-term installments

 
     
    Consolidated 
 
  31.03.2009  31.12.2008 
2010  28,858  36,455 
2011  638,478  638,454 
2012  38,478  38,454 
2013  38,478  38,454 
2014  35,430  35,409 
2015  13,296  13,290 
2016  1,599  1,600 
 
  794,617  802,116 
 

Changes in the balances of debentures

 
  Current  Noncurrent  Consolidated 
Balances  liabilities  liabilities  Total 
 
As of December 31, 2007  171,827  1,002,674  1,174,501 
   Interest  28,152  28,152 
   Monetary variation  162  162 
   Transfers  133,360  (133,360)
   Repayments  (189,354) (189,354)
As of March 31, 2008  143,985  869,476  1,013,461 
   Interest  92,873  92,873 
   Monetary variation  476  484 
   Transfers  67,836  (67,836)
   Repayments  (109,702) (109,702)
As of December 31, 2008  195,000  802,116  997,116 
   Interest  25,812  25,812 
   Monetary variation  11  123  134 
   Transfers  7,622  (7,622)
   Repayments  (189,622) (189,622)
As of March 31, 2009  38,823  794,617  833,440 
 

45


Table of Contents

a) Debentures - Parent Company

1) Fourth Issue of Debentures

A single series of 60,000 debentures makes up the fourth issue of simple debentures conducted by the Parent Company on September 1, 2006, in the amount of R$ 600,000, and concluded on October 6, 2006, with full subscription in the total amount of R$ 607,899, with a five-year term from issue date and final maturity on September 1, 2011. These are simple, nominative debentures, non-convertible into stock, issued in book-entry form, and unsecured.

These securities yield interest on their face value of 104% of the average one-day Interfinance Deposit (DI - over) rates, extra-group, expressed in an annual percentage rate based on 252 business days, calculated and published daily by CETIP (the “DI rate”) in exponential and cumulative pro rata temporis manner according to the number of business days elapsed. Interest corresponding to the capitalization period is due and paid semi-annually, with the first due date on March 1, 2007 and the last on September 1, 2011. There will be no renegotiation of these debentures.

The resources obtained with the issue of these debentures were used to optimize the Company’s debt profile, by means of payment of its financial obligations, and to reinforce its cash flow. The resources from this issue were used to settle 1/3 of the principal amount of the Company's 3rd issue of debentures, due on February 1, 2007, and the principal amount of the Company’s 2nd issue of debentures, due on March 1, 2007.

2) Third Issue of Debentures

A single series of 40,000 debentures makes up the third issue of simple debentures, concluded on May 9, 2005, fully subscribed for R$ 400,000, with a four-year term. Final maturity is scheduled for 2009, with the first repayment (1/3) being scheduled for January 1, 2007, the second repayment (1/3) for February 1, 2008, and the third one (1/3) for February 1, 2009.

These are simple, nominative debentures, non-convertible into stock, issued in book-entry form, and secured by real estate. The funds were used to pay off securities issued on the international market (Euronotes) by the Company on May 2, 1997 and due on May 2, 2005, in the amount of US$ 150,000.

The pledged security is COPEL Geração e Transmissão’s bank account in Banco do Brasil S.A., in which all resources earned by it in connection with power sales agreements, both current and future, will be deposited.

46


Table of Contents

These securities yield interest on their face value (minus previously amortized amounts) of 115% of the average one-day Interfinance Deposit rates, extra-group, expressed in an annual percentage rate based on 252 business days, calculated and published daily by CETIP (the “DI rate”) in exponential and cumulative pro rata temporis manner according to the number of business days elapsed. Interest corresponding to the capitalization periods is due and paid semi-annually, with the first due date on August 1, 2005 and the last on February 1, 2009. There will be no renegotiation of these debentures.

The debentures feature provisions setting forth accelerated maturity in certain conditions. This issue was fully settled upon maturity, on February 1, 2009.

b) Debentures - Elejor

The contract for Elejor’s first issue of debentures was signed with BNDESPAR, with COPEL intervening as “Guarantor Shareholder”.

These funds were raised to be employed in the following:

1) 
Investments in the Fundão-Santa Clara Power Complex, on the Jordão River, in the State of Paraná;
 
2) 
Investments in two small hydropower plants, the Santa Clara I SHP and the Fundão SHP;
 
3) 
Payment of 50% of the amounts borrowed between July 1, 2004 and September 30, 2004 under the loan agreement signed on April 7, 2004 with the Guarantor Shareholder;
 
4) 
Full payment of the funds loaned by the Guarantor Shareholder from October 1, 2004 until the date the first debentures were paid in;
 
5) 
Payment of operating expenses inherent to the issuer's business, including the purchase of power to meet supply obligations; and
 
6) 
Financing of the social and environmental programs in connection with the investments in the Fundão-Santa Clara Power Complex.

One thousand debentures were issued in book-entry form, without the issue of guarantees or certificates. They were issued in two series, the first one comprising 660 debentures, and the second one, 340. Both of them are nominative, convertible into common shares and into class C preferred shares, at the discretion of the debenture holders.

The total amount of this issue was R$ 255,626. The debentures had a face value of R$ 256 on the issue date, February 15, 2005, and this value is restated according to the variation of the long term interest rate (TJLP).

47


Table of Contents

The final maturity of the first series is scheduled for February 15, 2015. After the grace period for the principal amount of 48 months from the issue date, amortization will take place in 24 quarterly installments pursuant to the agreement. The first amortization payment is due on May 15, 2009.

The final maturity of the second series is scheduled for February 15, 2016. After the grace period for the principal amount of 60 months from the issue date, amortization will take place in 24 quarterly installments pursuant to the agreement. The first amortization payment is due on May 15, 2010.

The first and second series yield interest based on the variation of TJLP, plus a 4% p.a. spread on the outstanding balance of each series. Interest on the first series is due annually, in the first twelve months from the issue date, and quarterly thereafter. The first payment was due on February 15, 2006, and the last one, on February 15, 2015. Interest on the second series is due annually, in the first 24 months from the issue date, and quarterly thereafter. The first payment was due on May 15, 2007, and the last one, on February 15, 2016.

In December 2008, R$ 42,621 were paid in advance, plus financial charges of R$ 2,379, for a total of R$ 45,000.

The agreement contains the following guarantees:

1) 
Letter of guarantee signed by COPEL pledging an unsecured guarantee and taking main responsibility for payment to debenture holders;
 
2) 
Lien on rights resulting from the concession agreement: pursuant to the terms and provisions of the private agreements for lien on revenues and other covenants between the issuer, the fiduciary agent, and the depositary bank, an irrevocable lien was constituted, with due authorization by ANEEL; and
 
3) 
Lien on revenues and reserve of funds for payment: pursuant to the agreement between the issuer, the fiduciary agent, and the depositary bank, a centralizing account and a reserve account were constituted and shall be in effect until final settlement of all obligations under this agreement.

The debentures feature provisions setting forth accelerated maturity in certain conditions.

48


Table of Contents

19 Suppliers

 
     
    Consolidated 
 
  31.03.2009  31.12.2008 
Charges for the use of the power grid     
   Use of the Basic Network  57,004  57,096 
   Energy transmission  4,112  4,182 
   Use of connections  264  265 
  61,380  61,543 
Electricity suppliers     
   Eletrobrás (Itaipu) 105,757  100,040 
   Furnas Centrais Elétricas S.A.  33,186  32,757 
   Companhia Hidro Elétrica do São Francisco - Chesf  32,529  32,108 
   Utilities - CCEE (Note 31) 40,258  27,976 
   Companhia Energética de São Paulo - Cesp  12,158  11,488 
   Rio Pedrinho Energética S.A. and Consórcio Salto Natal Energética S.A.  10,443  10,234 
   Centrais Elétricas do Norte do Brasil S.A. - Eletronorte  10,763  10,316 
   Itiquira Energética S.A.  10,449  9,247 
   Dona Francisca Energética S.A.  5,128  5,128 
   Companhia Energética de Minas Gerais - Cemig  6,183  4,660 
   Other suppliers  31,859  18,415 
  298,713  262,369 
Materials and services     
   Petróleo Brasileiro S.A. - Petrobras - gas purchase by Compagas (Note 32.c) 29,413  36,775 
   Petróleo Brasileiro S.A. - Petrobras - renegotiation (a) 11,019 
   Petróleo Brasileiro S.A. - Petrobras - renegotiation - noncurrent (a) 209,352  214,157 
   Other suppliers  141,716  137,145 
  391,500  388,077 
 
  751,593  711,989 
 
Current  542,241  497,832 
Noncurrent  209,352  214,157 
 

a) Petróleo Brasileiro S.A. - Petrobras

On March 6, 2006, COPEL signed an agreement with Petrobras to settle the pending issues regarding the gas purchase agreement for the Araucária Thermal Power Plant. This settlement comprised the signature of an Out-of-Court Agreement, under which COPEL Generation, with COPEL as guarantor, acknowledged a R$ 150,000 debt to Petrobras, as grantor of Compagas’ credits to COPEL Generation, which shall be paid in 60 monthly installments restated by the Selic rate, starting in January 2010.

On May 30, 2006, COPEL Generation signed a Mutual Release Agreement with Compagas under which both companies fully and irrevocably release each other from all obligations and rights under the Natural Gas Purchase and Sale Agreement signed by them on May 30, 2000 and terminated on May 31, 2005, renouncing any claims against each other, on any grounds, as of the date of the Out of Court Settlement and Confession of Indebtedness signed by them and by Petrobras, with the participation of COPEL. The debt acknowledged by COPEL Generation remains.

49


Table of Contents

20 Payroll, Social Charges, and Accruals

 
     
    Consolidated 
 
  31.03.2009  31.12.2008 
Payroll     
   Profit sharing  65,816  65,816 
   Taxes and social contributions  18,374  26,659 
   Payroll, net  206  103 
   Assignments to third-parties  25 
  84,421  92,583 
Labor accruals     
   Paid vacation and annual bonus ("13th salary") 51,449  50,909 
   Social charges on paid vacation and annual bonus ("13th salary") 17,247  15,896 
   Profit sharing  16,351 
  85,047  66,805 
 
  169,468  159,388 
 

21 Post-Employment Benefits

a) Pension Plan

The Company and its subsidiaries sponsor retirement and pension plans (Pension Plans I, II, and III) and a medical and dental care plan (Healthcare Plan) to both current and retired employees and their dependents.

Pension Plans I and II are defined benefit plans, while Plan III is a defined contribution plan.

The cost shares borne by the plans’ sponsors are recorded according to an actuarial assessment prepared annually by independent actuaries pursuant to the rules of CVM Ruling no. 371/2000. The actuarial and financial assumptions, for purposes of actuarial assessment, are discussed with the independent actuaries and approved by the sponsors’ senior management.

The flow of payment of contributions under Plans I and II, as of July 2007, was guaranteed under an agreement called “Private Agreement for Adjustment of Mathematical Reserves for the Basic and Supplemental Pension Plans”, signed on January 20, 1999. Based on legal opinions by external and internal legal experts who reviewed specific clauses of this agreement and concluded that the corresponding liabilities had expired, the Company notified the senior management of Fundação COPEL de Previdência e Assistência Social, on July 27, 2007, that no contribution payments would be made under that agreement as of August 2007.

50


Table of Contents

In September 2007, Fundação COPEL disputed COPEL's interpretation, which led to a joint request for review and ruling by the State Department of Supplemental Pension Plans (SPC). After the submission of requested clarifications and the conduction of an actuarial audit recommended by the SPC, in October 2008 the SPC requested further clarifications about the report and the opinion of the consulting company in charge of the audit, which had been submitted by the COPEL Foundation in July 2008.

The outcome of this issue will not affect the amounts which have already been recorded as an actuarial liability pursuant to CVM Instruction no. 371/2000. In fact, it will only affect the cash flow of the payment of contributions between COPEL and the COPEL Foundation.

b) Healthcare Plan

The Company and its subsidiaries allocate resources for the coverage of healthcare expenses incurred by their employees and their dependents, within rules, limits, and conditions set in specific regulations. Coverage includes periodic medical exams and is extended to all retirees and pensioners for life.

c) Balance sheet and statement of operations

The consolidated and recognized amounts in the balance sheet, under Post-Employment Benefits, are summarized below:

 
  Pension  Healthcare    Consolidated 
  plan  plan    Total 
 
      31.03.2009  31.12.2008 
Pension plan - Plans I and II (DB) 64,770  347,020  411,790  438,834 
Pension plan - Plan III (DC) - employees  7,993  7,993  9,111 
 
  72,763  347,020  419,783  447,945 
 
    Current  20,919  22,066 
    Noncurrent  398,864  425,879 
 

The consolidated amounts recognized in the statement of operations are shown below:

 
     
    Consolidated 
 
  31.03.2009  31.03.2008 
Pension plan - periodic post-employment cost  (30,666) (6,898)
Pension plan (DC) 13,171  11,822 
Healthcare plan - post-employment  6,669  10,379 
Healthcare plan contributions  6,965  6,620 
  (3,861) 21,923 
(-) Transfers to construction in progress  (1,658) (1,518)
 
  (5,519) 20,405 
 

51


Table of Contents

The annual estimated cost for 2009, calculated by an independent actuary, resulted in income due to the actuarial gains which are being amortized and whose amounts exceed the regular periodic cost of the plans.

22 Regulatory Charges

 
     
    Consolidated 
 
  31.03.2009  31.12.2008 
Fuel Consumption Account - CCC  9,142  22,174 
Energy Development Account - CDE  17,818  14,904 
Global Reversal Reserve - RGR  6,288  6,045 
 
  33,248  43,123 
 

23 Research and Development and Energy Efficiency

The balances of COPEL’s provisions for R&D and EEP are broken down below:

 
Applied and used -  Payable  Balance to be  Balance as of  Balance as of 
projects in progress  amount  used in projects  31.03.2009  31.12.2008 
 
Research and Development - R&D           
   FNDCT  2,415  2,415  18,649 
   MME  1,226  1,226  9,345 
   R&D  16,020  73,103  89,123  85,596 
  16,020  3,641  73,103  92,764  113,590 
Energy Efficiency Program - EEP  12,564  -  78,877  91,441  84,973 
 
  28,584  3,641  151,980  184,205  198,563 
 
      Current  100,262  126,484 
      Noncurrent  83,943  72,079 
 

Changes in the balances of R&D and EEP

 
          Consolidated 
Balances  FNDCT  MME  R&D  EEP  Total 
 
As of December 31, 2007  20,157  10,287  75,893  78,943  185,280 
   Additions  3,389  1,696  3,389  4,491  12,965 
   SELIC interest rate  1,585  1,299  2,884 
   Payments  (3,885) (2,133) (6,018)
   Concluded projects  (13) (3,887) (3,900)
As of March 31, 2008  19,661  9,850  80,854  80,846  191,211 
   Additions  10,722  5,361  10,722  13,847  40,652 
   SELIC interest rate  6,233  5,405  11,638 
   Payments  (11,734) (5,866) (17,600)
   Concluded projects  (12,213) (15,125) (27,338)
As of December 31, 2008  18,649  9,345  85,596  84,973  198,563 
   Additions  3,540  1,771  3,540  4,629  13,480 
   SELIC interest rate  2,001  1,881  3,882 
   Payments  (19,774) (9,890) (29,664)
   Concluded projects  (2,014) (42) (2,056)
As of March 31, 2009  2,415  1,226  89,123  91,441  184,205 
 

52


Table of Contents

24 Other Accounts Payable

 
     
    Consolidated 
 
  31.03.2009  31.12.2008 
Current liabilities     
   Concession charge - ANEEL grant  39,019  38,649 
   Reimbursement of customer contributions  17,683  18,037 
   Collected public lighting charge  17,591  18,669 
   Compensation for use of water resources  9,643  17,601 
   Participation in consortia  4,833  4,833 
   Pledged collaterals  3,461  1,723 
   Insurance companies - premiums due  3,181  3,181 
   Reparations to the Apucaraninha Indian community  2,528  2,498 
   Other liabilities  8,021  9,192 
  105,960  114,383 
Noncurrent liabilities     
   Advance payments from customers  4,405  1,665 
   Reparations to the Apucaraninha Indian community  5,057  4,995 
   Other liabilities  15  14 
  9,477  6,674 
 

25 Provisions for Contingencies

The Company is a party to several lawsuits filed before different courts. COPEL’s senior management, based on the opinion of its legal counsel, has kept a provision for contingencies in connection with lawsuits which are likely to result in losses.

The balances of the Company’s provisions for contingencies, net of escrow deposits, are shown below:

 
Consolidated    Judicial  Net  Net 
  Contingencies  deposits  provision  provision 
 
      31.03.2009  31.12.2008 
Labor  129,183  (27,793) 101,390  104,354 
Regulatory  36,893  -  36,893  36,851 
Civil:         
   Suppliers (a) 52,777  52,777  52,209 
   Civil and administrative claims  30,178  (7,327) 22,851  23,213 
   Easements (b) 15,359  15,359  15,615 
   Condemnation and property claims (b) 118,998  118,998  119,645 
   Customers  5,292  (877) 4,415  4,571 
   Environmental claims  10  10 
  222,614  (8,204) 214,410  215,253 
Tax:         
   Cofins tax (c) 180,628  180,628  178,753 
   Other taxes  85,908  (27,004) 58,904  58,154 
  266,536  (27,004) 239,532  236,907 
 
  655,226  (63,001) 592,225  593,365 
 

53


Table of Contents

 
Parent Company    Judicial  Net  Net 
  Contingencies  deposits  provision  provision 
 
      31.03.2009  31.12.2008 
Regulatory claims  9,249  -  9,249  9,249 
Civil claims  442  -  442  434 
Tax claims:         
   Cofins tax (c) 180,628  180,628  178,753 
   Other taxes  53,120  (27,004) 26,116  25,726 
  233,748  (27,004) 206,744  204,479 
 
  243,439  (27,004) 216,435  214,162 
 

Changes in provisions for contingencies

 
Consolidated  Provision    Additions (rev.) (Payments) Provision 
  balance  Additions  to P.,P.,&E.  reversals  balance 
 
  31.12.2008        31.03.2009 
Labor  129,699  760  -  (1,276) 129,183 
Regulatory  36,851  33  -  9  36,893 
Civil:           
   Suppliers  52,209  568  52,777 
   Easements  15,615  5,271  (5,527) 15,359 
   Civil and administrative claims  29,987  1,128  (937) 30,178 
   Customers  5,465  31  (204) 5,292 
   Condemnations  119,645  (647) 118,998 
   Environmental claims  10  10 
  222,921  1,737  4,624  (6,668) 222,614 
Tax:           
   Cofins tax  178,753  1,875  180,628 
   Other taxes  85,158  750  85,908 
  263,911  2,625  -  -  266,536 
 
  653,382  5,155  4,624  (7,935) 655,226 
 

 
Parent Company  Provision    Provision 
  balance  Additions  balance 
 
  31.12.2008    31.03.2009 
Regulatory claims  9,249  -  9,249 
Civil claims  434  8  442 
Tax:       
   Cofins tax  178,753  1,875  180,628 
   Other taxes  52,729  391  53,120 
  231,482  2,266  233,748 
 
  241,165  2,274  243,439 
 

The breakdown of the types of lawsuits in which COPEL is involved as of March 31, 2009 is consistent with the one featured in the Company's financial statements as of December 31, 2008.

54


Table of Contents

The amount tied to cases classified as possible losses, estimated by the Company and its subsidiaries as of March 31, 2009, reached R$ 1.796.181, of which R$ 104,585 correspond to labor claims; R$ 1,093,728 to regulatory claims; R$ 154,307 to civil claims; and R$ 443,561 to tax claims. It is important to point out that COPEL has a good chance of success in the lawsuit it filed to dispute the effects of ANEEL Ruling no. 288/2002, based on the opinion of its legal counsel, as discussed in Note 31 herein, under the title “Electric Energy Trading Chamber (CCEE)”.

a) Rio Pedrinho Energética S.A. and Consórcio Salto Natal Energética S.A.

COPEL Distribuição is disputing in court the validity of the terms and conditions of the power purchase and sale agreements signed with Rio Pedrinho Energética S.A. and Consórcio Salto Natal Energética S.A., based on the argument that they grant benefits to the selling companies that hurt the public interest. At the same time, both companies, after having rescinded the agreements, filed for arbitration before the Arbitration Chamber of Fundação Getúlio Vargas, which sentenced COPEL to the payment of contractual penalties for having caused the rescission of the agreement. COPEL has filed for a court order making the arbitration ruling void.

Management, based on the opinion of its legal counsel that it is likely to lose this case, on the available information, and on the current stage of the lawsuits, decided to set aside a provision for contingencies in the original amount of the debt, restated according to the original contractual terms, which amounted to R$ 52,777 as of March 31, 2009.

b) Easements, condemnation, and real estate

COPEL’s real estate claims comprise mostly cases of condemnation and easements, in which compensation is always mandatory pursuant to the Federal Constitution, which requires that the Federal Government pay just compensation, in cash, prior to condemnation of private property or to the imposition of restrictions on the use of property without transfer of title. Lawsuits are usually filed when parties fail to agree on the amount of compensation due.

Ivaí Engenharia de Obras S.A.

In a lawsuit filed by Ivaí Engenharia de Obras S.A., COPEL was sentenced to the payment of R$ 180,917 as compensation for a supposed economic-financial imbalance under Contract D-01, concerning construction work for the Jordão River diversion project. COPEL appealed this decision and was partially successful, avoiding the application of the SELIC interest rate on top of the penalty interest. COPEL will continue to dispute this claim in court, through all means legally available.

The Company set aside a provision for contingencies in the amount of R$ 109,245, in light of the evaluation conducted by its Chief Legal Office, which estimates that a loss is probable.

55


Table of Contents

c) COFINS tax

COPEL did not collect COFINS tax on revenues from power sales based on a final ruling by the 4th District Federal Court, dated August 18, 1998, which granted the Company immunity pursuant to the Federal Constitution. A special lawsuit requesting annulment of this ruling, filed in August 2000, was rejected on grounds that the right of the Federal Government to take legal action had lapsed. The Federal Government’s special appeal was rejected by the Superior Court of Justice. Thus, COPEL reversed the provision it had set aside, based on the opinion by its counsel that the possibility that the Company might be required to disburse any amounts in connection with the COFINS tax was remote. At the end of 2007, however, the Superior Court of Justice, against all forecasts, ruled in favor of an appeal for clarification by the Federal Government, judging that the Government's right to take legal action had not lapsed, and sent the lawsuit back to the 4th District Federal Court for trial. Even though this ruling is not final yet, since COPEL has appealed it, the Company’s counsel believes the risk of loss is no longer remote, but rather probable. Thus, COPEL set aside a provision corresponding to the restated principal amount plus charges, which totals R$ 180,628, already having excluded tax credits which have already lapsed.

26 ShareholdersEquity

a) Share capital

As of March 31, 2009, COPEL’s paid in stock capital, represented by shares with no par value, was R$ 4.460.000. The different classes of shares and main shareholders are detailed below:

 
In number of shares 
 
Shareholders  Common    Class A preferred  Class B preferred  Total   
 
     %     %     %     % 
State of Paraná  85,028,598  58.63  13,639  0.01  85,042,237  31.08 
BNDESPAR  38,298,775  26.41  27,282,006  21.28  65,580,781  23.96 
Eletrobrás  1,530,774  1.06  1,530,774  0.56 
Free float:                 
       Bovespa (1) 15,064,910  10.38  127,387  32.16  73,352,142  57.20  88,544,439  32.36 
       NYSE (2) 4,552,811  3.14    27,424,480  21.39  31,977,291  11.68 
       Latibex (3) 115,867  0.09  115,867  0.04 
Municipalities  178,393  0.12  12,797  3.23  1,914  193,104  0.07 
Other shareholders  376,819  0.26  255,879  64.61  38,184  0.03  670,882  0.25 
 
  145,031,080  100.00  396,063  100.00  128,228,232  100.00  273,655,375  100.00 
 

(1) 
São Paulo Stock Exchange
(2) 
New York Stock Exchange
(3) 
The Market for Latin-American Securities in Euros, linked to the Madrid Stock Exchange

Each share entitles its holder to one vote in the general shareholders’ meetings. Preferred shares, which do not carry voting rights, are divided into classes A and B.

56


Table of Contents

Class “A” preferred shares enjoy priority in the reimbursement of capital and in the right to non-cumulative annual dividends of 10%, calculated proportionately to the capital represented by the shares of this class.

Class “B” preferred shares enjoy priority in the reimbursement of capital and the right to the distribution of minimum dividends, calculated as 25% of adjusted net income, pursuant to the corporate legislation and to the Company’s by-laws, calculated proportionately to the capital represented by the shares of this class. Class “B” shareholders have priority only over the common shareholders in the distribution of mandatory dividends, which shall only be paid out of the remaining net income after the payment of priority dividends to class “A” shareholders.

According to Article 17 and following paragraphs of Federal Law 6,404/76, dividends paid to preferred shares must be at least 10% higher than those paid to common shares.

57


Table of Contents

27 Gross Revenues from Sales and/or Services

 
     
    Consolidated 
 
  31.03.2009  31.03.2008 
Electricity sales to final customers     
   Residential  253,861  232,199 
   Industrial  241,112  249,297 
   Commercial, services, and other activities  166,953  153,143 
   Rural  35,438  32,743 
   Government agencies  20,662  19,453 
   Public lighting  17,508  16,195 
   Public services  16,202  15,639 
   Installment for Adjustment of Network Charges  943 
  752,679  718,669 
Electricity sales to distributors     
   Agreements for Power Trade on the Regulated Market - CCEAR (auction) 267,129  195,658 
   Bilateral contracts  34,064  110,000 
   Electric Energy Trading Chamber - CCEE  21,273  (3,355)
   Contracts with small utilities  12,117  14,313 
  334,583  316,616 
Availability of the power grid     
   Rate for the use of the distribution system (TUSD)    
       Residential  277,751  263,605 
       Industrial  266,642  282,762 
       Commercial, services, and other activities  185,251  171,560 
       Rural  39,646  37,161 
       Government agencies  23,096  22,066 
       Public lighting  19,585  18,382 
       Public services  18,120  17,756 
   Basic Network and basic interface network  36,001  33,238 
   Connection grid  534  325 
   Installment for Adjustment of Basic Network charges  2,975  3,382 
  869,601  850,237 
     
Revenues from telecommunications  23,615  17,594 
     
Piped gas distribution  62,293  59,491 
Other operating revenues     
   Leases and rents  24,306  19,196 
   Revenues from services  7,737  5,545 
   Charged services  2,253  2,002 
   Other revenues  474  229 
  34,770  26,972 
 
  2,077,541  1,989,579 
 

58


Table of Contents

28 Deductions from Gross Revenues

 
     
    Consolidated 
 
  31.03.2009  31.03.2008 
Taxes and social contributions on revenues     
   VAT (ICMS) 403,749  386,960 
   COFINS  160,809  155,385 
   PASEP  34,911  33,745 
   ISSQN  409  421 
  599,878  576,511 
Regulatory charges     
   Energy Development Account - CDE  47,864  47,344 
   Fuel Consumption Account - CCC  40,800  24,115 
   Global Reversal Reserve - RGR  18,834  14,025 
   Research and development and energy efficiency - R&D and EEP  13,480  12,965 
   Other  56  61 
  121,034  98,510 
     
 
  720,912  675,021 
 

29 Operating Costs and Expenses

The breakdown of consolidated costs and expenses as of March 31, 2009 is shown below:

 
  Costs of    General and  Other revenues   
Nature of costs and expenses  goods and/or  Sales  administ.  (expenses),  Consolidated 
  services  expenses  expenses  net  Total 
 
          31.03.2009 
Electricity purchased for resale (a) (429,340) (429,340)
Charges for use of power grid (b) (122,701) (122,701)
Personnel and management (c) (129,868) (958) (35,901)   (166,727)
Pension and healthcare plans (Note 21) 3,562  (54) 2,011  5,519 
Materials and supplies (d) (11,810) (691) (1,370) (13,871)
Raw materials and supplies for power generation  (5,693) (5,693)
Natural gas and supplies for gas business  (37,666) (37,666)
Third-party services (e) (48,210) (6,029) (12,077) (66,316)
Depreciation and amortization  (91,704) (3) (5,969) (957) (98,633)
Provisions and reversals (f) (4,396) (5,155) (9,551)
Other costs and expenses (g) (6,869) 1,158  (11,649) (24,757) (42,117)
 
  (880,299) (10,973) (64,955) (30,869) (987,096)
 

59


Table of Contents

The breakdown of consolidated costs and expenses as of March 31, 2008 is shown below:

 
  Costs of    General and  Other revenues   
Nature of costs and expenses  goods and/or  Sales  administ.  (expenses),  Consolidated 
  services  expenses  expenses  net  Total 
 
          31.03.2008 
Energia elétrica comprada para revenda (a) (443,499) (443,499)
Encargos de uso da rede elétrica (b) (105,767) (105,767)
Pessoal e administradores (c) (105,970) (692) (25,039)   (131,701)
Planos previdenciário e assistencial (NE nº 21) (16,103) (85) (4,217) (20,405)
Material (d) (9,934) (809) (903) (11,646)
Matéria-prima e insumos para produção de energia elétrica  (5,013) (5,013)
Gás natural e insumos para operação de gás  (31,791) (31,791)
Serviços de terceiros (e) (45,440) (5,546) (10,825) (61,811)
Depreciação e amortização  (95,907) (3) (5,946) (2,160) (104,016)
Provisões e reversões (f) (9,367) (7,420) (16,787)
Outros custos e despesas (g) (7,275) 1,376  (6,954) (26,633) (39,486)
 
  (866,699) (15,126) (53,884) (36,213) (971,922)
 

The Parent Company’s expenses as of March 31, 2009 are broken down below:

 
  General and  Other revenues  Parent 
Nature of costs and expenses  administrative  (expenses),  Company 
  expenses  net  Total 
 
      31.03.2009 
 Management (c) (1,430) (1,430)
 Healthcare plan  (40) (40)
 Materials and supplies  (4) (4)
 Third-party services (e) (600) (600)
 Depreciation and amortization  (189) (189)
 Provisions and reversals (f) (2,274) (2,274)
 Other expenses  (392) 13  (379)
 
  (2,466) (2,450) (4,916)
 

The Parent Company’s expenses as of March 31, 2008 are broken down below:

 
  General and  Other revenues  Parent 
Nature of costs and expenses  administrative  (expenses),  Company 
  expenses  net  Total 
 
      31.03.2008 
 Management (c) (1,099) (1,099)
 Healthcare plan  (19) (19)
 Materials and supplies  (2) (2)
 Third-party services (e) (742) (742)
 Provisions and reversals (f) (873) (873)
 Other expenses  (368) (367)
 
  (2,230) (872) (3,102)
 

60


Table of Contents

a) Electricity purchased for resale

 
     
    Consolidated 
 
  31.03.2009  31.03.2008 
Eletrobrás - Centrais Elétricas Brasileiras S.A. (Itaipu) 121,795  122,390 
Furnas Centrais Elétricas S.A. - auction  76,215  71,409 
Companhia Hidro Elétrica do São Francisco - Chesf - auction  72,615  68,339 
Electric Energy Trading Chamber - CCEE  57,807  81,842 
Itiquira Energética S.A.  27,832  25,933 
Companhia Energética de São Paulo - Cesp - auction  27,579  25,663 
Centrais Elétricas do Norte do Brasil S. A. - Eletronorte - auction  23,913  22,651 
Dona Francisca Energética S.A.  14,895  13,413 
Companhia Energética de Minas Gerais - Cemig - auction  12,349  10,509 
Cia. Estadual de Geração e Transmissão de Energia Elétrica S.A. - CEEE - auction  8,405  7,930 
Program for incentive to alternative energy sources - PROINFA  6,845  11,757 
Electricity purchased for resale - Deferred regulatory liabilities (CVA) (16,192) (13,693)
(-) Pasep/Cofins tax on electricity purchased for resale  (49,389) (42,317)
Other utilities - auction  44,671  37,673 
 
  429,340  443,499 
 

b) Charges for the use of the power grid

 
     
    Consolidated 
 
  31.03.2009  31.03.2008 
Furnas Centrais Elétricas S.A.  29,217  26,850 
Cia. Transmissora de Energia Elétrica Paulista - Cteep  15,619  14,508 
Companhia Hidro Elétrica do São Francisco - Chesf  14,455  13,462 
Eletrosul Centrais Elétricas S.A.  10,509  9,329 
Centrais Elétricas do Norte do Brasil S. A. - Eletronorte  10,487  9,688 
Companhia Energética de Minas Gerais - Cemig  5,234  4,866 
Novatrans Energia S.A.  4,841  4,512 
TSN Transmissora Nordeste Sudeste de Energia S.A.  4,832  4,444 
Cia. Estadual de Geração e Transmissão de Energia Elétrica S.A. - CEEE  4,234  3,900 
National System Operator - NOS  4,078  4,463 
Empresa Amazonense de Transmissão de Energia - Eate  4,030  3,682 
System service charges - ESS  2,633  21,240 
Empresa Norte de Transmissão de Energia S.A. - Ente  2,065  1,914 
ATE II Transmissora de Energia S.A.  2,027  1,922 
Itumbiara Transmissora de Energia Ltda  1,959  1,841 
Expansion Transmissora de Energia Elétrica S.A.  1,878  1,745 
Empresa Transmissora de Energia Oeste Ltda - Eteo  1,655  1,535 
STN Sistema de Transmissão Nordeste S.A  1,653  1,535 
NTE Nordeste Transmissora de Energi S.A  1,461  1,336 
ATE Transmissora Energia S.A  1,359  1,260 
Integração Transmissão Energia - INTESA  1,157 
ATE III Transmissora de Energia S.A  1,083 
Arthemis Transmissora de Energia S.A  884  810 
(-) Pasep/Cofins taxes on charges for the use of the power grid  (15,103) (14,275)
Deferred regulatory assets/liabilities – use of the power grid  (2,787) (24,294)
Other utilities  13,241  9,494 
 
  122,701  105,767 
 

61


Table of Contents

c) Personnel and management

 
         
    Parent Company    Consolidated 
 
  31.03.2009  31.03.2008  31.03.2009  31.03.2008 
Personnel         
   Wages and salaries  111,667  98,253 
   Social charges on payroll  39,624  34,732 
  -  -  151,291  132,985 
   Provision for profit sharing  16,454 
   Meal assistance and education allowance  13,453  11,945 
   Labor indemnifications (reversal) 1,156  (554)
  182,354  144,376 
   (-) Transfers to construction in progress  (17,766) (14,472)
  -  -  164,588  129,904 
Management         
   Wages and salaries  1,149  878  1,862  1,500 
   Social charges on payroll  281  221  322  335 
  1,430  1,099  2,184  1,835 
   (-) Transfers to construction in progress  (45) (38)
  1,430  1,099  2,139  1,797 
 
  1,430  1,099  166,727  131,701 
 

As of September 2008, Company management decided to set aside a monthly provision for its employees’ profit sharing. The amount is estimated pursuant to the criteria and conditions agreed on by COPEL and the employees’ committee for the profit sharing negotiation. The amount for the period from January through March 2008 would have been approximately R$ 16.000.

d) Materials and Supplies

 
     
    Consolidated 
 
  31.03.2009  31.03.2008 
Fuel and vehicle parts  5,036  4,652 
Materials for use in the electric system  3,494  3,427 
Office supplies  1,384  973 
Cafeteria supplies  1,175  1,141 
Information technology equipment and supplies  520  75 
Materials for use in civil construction  513  587 
Safety supplies  372  390 
Other materials and supplies  1,377  401 
 
  13,871  11,646 
 

62


Table of Contents

e) Services from third-parties

 
         
    Parent Company    Consolidated 
 
  31.03.2009  31.03.2008  31.03.2009  31.03.2008 
Power grid maintenance  16,612  13,175 
Postal services  6,187  5,593 
Technical, scientific, and administrative consulting  43  72  5,966  4,818 
Authorized and registered agents  5,106  4,891 
Administrative support services  3,920  3,488 
Data processing and transmission  3,887  3,881 
Security  3,284  3,093 
Telephone services  2,515  3,655 
Travel  (54) 26  2,359  2,097 
Meter reading and bill delivery  2,164  1,839 
Services in "green areas"  1,502  1,504 
Civil maintenance services  1,272  1,308 
Maintenance of easement areas  1,265  1,219 
Vehicle maintenance and repairs  951  866 
Customer service  892  1,183 
Telephone operator  732  630 
Freight services  694  613 
Access to satellite communications  692  1,336 
Auditing  333  567  607  798 
Personnel training  570  650 
Other services  278  77  5,139  5,174 
 
  600  742  66,316  61,811 
 

f) Provisions and reversals

 
         
    Parent Company    Consolidated 
 
  31.03.2009  31.03.2008  31.03.2009  31.03.2008 
Provision for doubtful accounts (PDA)        
   PDA - customers and distributors (Note 5) 4,385  7,424 
   PDA - third-party services and other receivables  11  1,943 
  -  -  4,396  9,367 
Provision (reversal) for contingencies         
   Labor  760  6,583 
   Regulatory  33  (2,066)
   Civil and administrative law  380  1,128  3,942 
   Suppliers  568  237 
   Environmental  10  (163)
   Customers  31  (1,599)
   Cofins tax  1,875  1,875 
   Other taxes  391  493  750  486 
  2,274  873  5,155  7,420 
 
  2,274  873  9,551  16,787 
 

63


Table of Contents

g) Other operating costs and expenses

 
     
    Consolidated 
 
  31.03.2009  31.03.2008 
Compensation for the use of water resources  16,890  21,313 
Concession charge - ANEEL grant  9,863  10,327 
Damages and reparations  3,984  674 
Taxes  3,918  3,851 
Losses in the disposal and sale of assets  3,888  2,552 
ANEEL Inspection Fee  3,811  4,447 
Leases and rents  3,716  2,897 
Own power consumption  1,488  1,482 
Insurance  1,411  1,617 
Advertising  849  915 
Donations - Rouanet Law and children's and teenagers' rights fund - FIA  342  250 
Cost and expense recovery  (10,659) (12,186)
General costs and expenses  2,616  1,347 
 
  42,117  39,486 
 

30 Interest Income (Expenses)

 
         
    Parent Company    Consolidated 
 
  31.03.2009  31.03.2008  31.03.2009  31.03.2008 
Interest income         
   Income from financial investments  8,984  2,516  50,123  38,442 
   Income from CRC transferred to State Gov. (Note 6.b) 21,242  20,128 
   Penalties on overdue bills  17,495  15,339 
   Interest on deferred regulatory assets (CVA) 6,159  2,196 
   Fines  2,518  2,470 
   Interest on taxes paid in advance  950  331  1,475  1,530 
   Interest and commissions on loan agreements  21,342  14,171 
   Monetary variation of CRC transferred to State Government (Note 6.b) (12,067) 25,174 
   Other interest income  21  567  826  1,324 
  31,297  17,585  87,771  106,603 
(-) Interest expenses         
   Interest on loans and financing  30,787  31,117  45,326  49,489 
   Interest on R&D and EEP  3,882  2,884 
   IOF tax  64  2,467  2,105 
   Monetary and exchange variations  2,246  10,960 
   Monetary variations on deferred regulatory liabilities (CVA) 629  3,376 
   Other interest expense  683  3,699 
  30,788  31,182  55,233  72,513 
 
  509  (13,597) 32,538  34,090 
 

31 Electric Energy Trading Chamber (CCEE)

MAE has ceased its operations, and as a consequence its activities, assets, and liabilities were absorbed on November 12, 2004 by the Electric Energy Trading Chamber (CCEE), a private corporate entity subject to ANEEL regulation and inspection.

64


Table of Contents

COPEL has not recognized as actual and final the data concerning the sale of electric energy by COPEL Distribuição on the Wholesale Energy Market (MAE), currently CCEE, in 2000, 2001, and the first quarter of 2002. These figures were calculated according to criteria and amounts that take into account decisions by the Regulatory Agency which have been challenged by the Company both administratively and judicially.

The Company's claim is substantially based on the fact that it conducted power sale transactions, which should not serve as basis for calculations made by the regulatory agency, only to fulfill contractual obligations to customers on the southeastern market. The estimated amount of discrepancies in calculation was approximately R$ 1.084.000 (restated as of March 31, 2009), which has not been recognized by the Company as a supplier liability.

Based on the opinion of its legal counsel, management considers it possible that the final rulings in these lawsuits will be favorable to the Company.

a) CIEN Contract Renegotiation(1)

To make up for the supply under the terminated agreement with CIEN, COPEL has participated in all power sale mechanisms under the applicable legislation, pursuant to MME Ordinance no. 294/2006. The shortage of offer by power generators at the auctions of power from existing facilities (A-1) in 2007 and 2008, however, has not allowed COPEL to fully make up for the lost supply under the CIEN contract, and the Company is still 188 average MW short of fully covering its demand.

In 2008, COPEL sought to make up for the CIEN supply through auctions of power from new facilities. It acquired 141 average MW at the Jirau Hydroelectric Power Plant auction, 51 average MW at the 2008 A-3 auction, and 316 average MW at the 2008 A-5 auction, which, together and according to the respective delivery schedules, will be enough to meet its growing demand and make up for the CIEN supply.

To supplement its power supply for the next few years, until delivery of power from those new projects begins, COPEL has continued to participate in existing power purchase mechanisms, such as the Mechanism for the Offsetting of Surpluses and Deficits, adjustment auctions, and A-1 auctions. For 2009, COPEL acquired 144.5 average MW at the 9th adjustment auction.

65


Table of Contents

b) Current transactions at CCEE(1)

 
  Copel           
  Geração e  Copel    UEG     
  Transmissão  Distribuição  Elejor  Araucária    Consolidated 
 
          31.03.2009  31.12.2008 
Current assets (Note 4)            
   Until December 2008  642  14  105  761  9,931 
   From January through March 2009  7,767  26  7,793 
  8,409  14  26  105  8,554  9,931 
Current liabilities (Note 19)            
   Until December 2008  27,976 
   From January through March 2009  4,988  34,712  558  40,258 
  4,988  34,712  558  -  40,258  27,976 
 

c) Changes in the CCEE balances (1)

 
         
  Balances  Payments  Additions  Balances 
 
  31.12.2008      31.03.2009 
Current assets         
   Until December 2008  9,931  (8,824) (346) 761 
   From January through March 2009  (13,291) 21,084  7,793 
  9,931  (22,115) 20,738  8,554 
(-) Current liabilities         
   Until December 2008  27,976  (32,584) 4,608 
   From January through March 2009  (16,323) 56,581  40,258 
  27,976  (48,907) 61,189  40,258 
 
Net total  (18,045) 26,792  (40,451) (31,704)
 

(1) Information unaudited by the independent auditors.

32 Financial Instruments

a) Overview

The use of financial instruments by the Company is restricted to Cash in Hand and Cash Equivalents, Bonds and Securities, Customers and Distributors, Accounts Receivable from government agencies, CRC Transferred to State Government, Loans and Financing, Debentures, and Suppliers.

66


Table of Contents

b) Market Value of Financial Instruments

The market values of the Company’s main financial instruments as of March 31, 2009, which are close to their carrying values, are shown below:

 
Financial instruments       
Consolidated  Market value    Book value 
 
  31.03.2009  31.03.2009  31.12.2008 
   Cash and cash equivalents  1,594,217  1,594,217  1,813,576 
   Accounts receivable from government agencies  168,673  168,673  171,345 
   CRC transferred to State Government  1,296,336  1,296,336  1,319,903 
   Bonds and securities  73,646  71,358  69,063 
   Loans and financing  824,307  824,307  867,517 
   Debentures  811,266  833,440  997,116 
   Eletrobrás (Itaipu) 105,757  105,757  100,040 
   Petrobras (Compagas) 36,775  29,413  36,775 
 

The market value of the Company’s debentures was calculated according to the Unit Price quote on March 31, 2009, obtained from the National Association of the Financial Market Institutions (ANDIMA).

c) Risk Factors

1) Credit risk

The Company’s credit risk comprises the possibility of losses due to non-payment of power bills. This risk is closely tied to factors that are either internal or external to COPEL. To minimize this risk, the Company focuses on the management of receivables, detecting customer segments which are most likely not to pay their bills, suspending power supply, and implementing specific collection policies, tied to real estate or personal securities whenever possible.

Doubtful accounts are properly covered by provisions to offset potential losses in their realization.

2) Foreign currency risk

This risk comprises the possibility of losses due to fluctuations in exchange rates, which may reduce assets or increase liabilities denominated in foreign currencies.

Most of the financial investments of the Company and of its subsidiaries classified as Cash in Hand and Cash Equivalents comprise fixed-income securities tied to federal bonds. The Company’s foreign currency indebtedness is not significant and it is not exposed to foreign exchange derivatives. The Company monitors all relevant exchange rates.

The effect of the exchange rate variation resulting from the power purchase agreement with Eletrobrás (Itaipu) is recorded under the account for compensation of Portion A as invoices are paid and it is passed on to customers in COPEL Distribuição's annual rate reviews.

67


Table of Contents

The exchange rate variation resulting from the purchase of gas from Petrobras by Compagas has a direct impact on the Company's results. Compagas continually negotiates with its customers, trying whenever possible to pass these costs on to them.

The Company’s exposure to foreign currency risk is shown below:

 
      Net 
Foreign currency  Assets  Liabilities  exposure 
 
      31.03.2009 
   Collaterals and escrow deposits  37,515  37,515 
   Loans and financing  (144,292) (144,292)
   Suppliers       
       Eletrobrás (Itaipu) (105,757) (105,757)
       Petrobras (Compagas) (29,413) (29,413)
 
  37,515  (279,462) (241,947)
 

3) Interest rate risk

This risk comprises the possibility of losses due to fluctuations in interest rates, which may increase the financial expenses in connection with liabilities on the market.

The Company has not engaged in transactions with derivatives to cover this risk, but it has continued to monitor interest rates, in order to assess the potential need for such transactions as a way of protecting against interest rate risks.

4) Accelerated maturity risk

This risk results from the potential breach of restrictive contract provisions, such as those contained in the loan, financing, and debenture agreements of the Company, which usually require that certain economic and financial indicators, which are calculated and analyzed periodically for compliance, be kept at determined levels (financial covenants).

5) Power shortage risk

This risk results from the possibility of periods with low levels of rainfall, since Brazil relies heavily on hydroelectric sources, which depend on the water levels in their reservoirs to operate.

A long period of drought may reduce the water levels in power plant reservoirs and result in losses due to reduced revenues if a new rationing program is implemented.

This risk is calculated by the National Power System Operator (ONS), which does not anticipate the need for any rationing programs in the next two years(1), as reported in its Power Operation Plan, published annually at www.ons.org.br.

(1) Information unaudited by the independent auditors.

68


Table of Contents

6) Risk of non-renewal of concessions

COPEL holds concessions for power generation, transmission, and distribution services, with the expectation that they will be renewed by the Ministry of Mines and Energy (MME) with the support of ANEEL. If the extension of these concessions is not approved by the regulatory authority or even if it occurs at additional costs to the Company ("costly concession"), current profitability and activity levels may be affected.

The Company has already applied for extension by ANEEL of the power plant concessions expiring in 2009, 2010, and 2011: Governor Ney Aminthas de Barros Braga (Segredo), Governor José Richa (Salto Caxias), Jordão River Diversion Small Hydropower Project, and Cavernoso Small Hydropower Project. ANEEL, under Ruling no. 455, dated February 3, 2009, has recommended to the Ministry of Mines and Energy the extension of the concessions, pursuant to the following terms:

     
Concession agreement no. 045/1999  Extension  Final expiration 
     
Power Plants     
   Governador Ney Braga (Segredo) 20 years 2029 
   Governador José Richa (Salto Caxias) 20 years 2030 
   Jordão River Diversion Project  20 years 2029 
   Cavernoso  8.5 years  2019 
     

COPEL has disputed ANEEL’s recommendation that the Cavernoso concession be extended for only 8.5 years, since it believes it should be extended for 20 years as its other concessions. The Ministry of Mines and Energy is reviewing COPEL’s claim and ANEEL’s recommendation, but it has not ruled on the matter yet.

7) Financial Instruments - Derivatives

Pursuant to CVM Ruling no. 550, dated October 17, 2008, COPEL reviewed its transactions and did not identify any derivative instruments.

69


Table of Contents

33 Related-Party Transactions

The main balances of related party transactions in COPEL’s balance sheet are:

       
Related party   Nature of operation    Consolidated 
       
    31.03.2009  31.12.2008 
Current assets       
Sanepar  Customers and distributors  8,672  8,672 
Government of the State of Paraná  Customers and distributors  64,285  47,174 
  Telecommunications services  4,373  4,520 
  Recoverable Rate Deficit - CRC (Note 6) 47,782  47,133 
  ICMS (VAT) paid in advance (Note 7) 22,557  26,863 
Petrobras  Lease of the Araucária TPP  10,357  7,474 
  Customers and distributors - gas  2,023  949 
  Advance payments to suppliers  1,825  761 
       
Noncurrent assets       
Sanepar  Customers and distributors  6,504  8,672 
Government of the State of Paraná  Customers and distributors  20,061  26,976 
  Telecommunications services  2,827  3,122 
  Recoverable Rate Deficit - CRC (Note 6) 1,248,554  1,272,770 
  ICMS (VAT) paid in advance (Note 7) 68,327  62,468 
Petrobras  Advance payments to suppliers  3,327  2,435 
       
Current liabilities       
BNDES  Financing for gas pipeline network (Note 17.f) 6,517  6,526 
BNDESPAR  Debentures (Note 18.b) 33,053  25,767 
Dona Francisca Energética  Electricity purchase (Note 19) 5,128  5,128 
Eletrobrás  Financing (Note 17.d) 33,089  34,418 
Eletrobrás (Itaipu) Electricity purchase (Note 19) 105,757  100,040 
Government of the State of Paraná  ICMS (VAT) due (Note 7) 138,513  132,380 
Petrobras  Purchase of gas for resale (Note 19) 29,413  36,775 
  Gas for power generation - renegotiation (N. 19) 11,019 
       
Noncurrent liabilities       
BNDES  Financing for gas pipeline network (Note 17.f) 11,463  13,111 
BNDESPAR  Debentures (Note 18.b) 194,617  202,116 
Eletrobrás  Financing (Note 17.d) 265,925  275,243 
Eletrobrás  Elejor redeemable shares (Note 17.e) 26,598  26,092 
Government of the State of Paraná  ICMS (VAT) due (Note 7) 660  618 
Petrobras  Gas for power generation - renegotiation (N. 19) 209,352  214,157 

70


Table of Contents

The main balances of related party transactions in COPEL’s statement of operations are:

       
Related party  Nature of operation    Consolidated 
       
    31.03.2009  31.03.2008 
Gross revenues from sales and/or services       
Sanepar  Sale of electricity  31,090  30,477 
Government of the State of Paraná  Sale of electricity  21,946  22,431 
  Telecommunications revenue  2,338  1,500 
Petrobras  Lease of the Araucária Thermal Power Plant  10,357  7,153 
  Sale of electricity  2,652  2,620 
  Distribution of piped gas  1,790  1,704 
  Gas transport services  1,870  612 
 
Electricity purchased for resale       
Dona Francisca Energética  Purchase of electricity (Note 29.a) 14,895  13,413 
Eletrobrás (Itaipu) Purchase of electricity (Note 29.a) 121,795  122,390 
 
Natural gas and supplies for the gas business     
Petrobras  Natural gas purchased for resale  37,648  29,157 
 
Management       
Officers and directors  Wages, social charges, pension and healthcare     
  plan contributions  2,224  1,854 
 
Other operating expenses       
Fundação Copel  Rent of facilities  1,885  1,654 
 
Interest income       
Government of the State of Paraná  Income from CRC (Note 30) 9,175  45,302 
  Income from renegotiated bills  1,679  2,094 
 
Interest expenses       
  Interest on financing for gas pipeline     
BNDES 
    network (Note 17.f)
422  595 
BNDESPAR  Interest on Elejor debentures (Note 18.b) 5,561  6,733 
Eletrobrás  Interest on financing (Note 17.d) 5,209  7,415 
  Interest on Elejor redeemable shares (Note 17.e) 506  5,031 
Petrobras  Interest on gas contract renegotiation (Note 19.a) 6,213  4,961 
       

The balances of transactions between the Company and its subsidiaries are shown in Note 13.

BNDES - BNDESPAR holds 26.41% of the Company’s common shares and has the right to appoint two members of the Board of Directors. BNDESPAR is a wholly-owned subsidiary of BNDES, with which the Company has financing agreements, described in Note 17.

Dona Francisca Energética S.A. - The Company became guarantor of the loans signed by its indirect affiliate Dona Francisca Energética S.A. with the National Economic and Social Development Bank (BNDES) (joint debtor), and with Bradesco (joint debtor). As of March 31, 2009, the outstanding debt was R$ 38,777 and R$ 22,499, respectively.

Eletrobrás – Eletrobrás holds 1.06% of the Company’s common shares; COPEL, in turn, has obtained financing from Eletrobrás, described in Note 17.

The amounts resulting from operating activities involving related parties are billed at the rates approved by the regulatory agency.

71


Table of Contents

34 Financial Statements by Subsidiary

Shown below are the balance sheets and the statements of income as of March 31, 2009, reclassified for purposes of ensuring consistency with the account classification adopted by COPEL, of subsidiaries: COPEL Geração e Transmissão (GET), COPEL Distribuição (DIS), COPEL Telecomunicações (TEL), Compagas (COM), Elejor (ELE), UEG Araucária (UEG), and other (COPEL Empreendimentos, Centrais Eólicas, and Dominó Holdings). In order to allow the analysis of the statement of operations according to the nature of the expenses, the operating costs and expenses are presented in aggregate form.

               
ASSETS  GET  DIS  TEL  COM  ELE  UEG  Other 
31.03.2009               
               
 
TOTAL ASSETS  5,189,757  5,570,766  248,284  252,500  631,754  668,397  712,146 
CURRENT ASSETS  1,075,909  1,647,867  55,700  65,931  67,095  141,541  21,714 
Cash and cash equivalents  745,044  287,280  33,752  38,415  29,724  119,689  15,727 
Customers and distributors, net  197,543  790,158  23,017  14,704  59 
Telecommunications services, net  12,671 
Dividends receivable  5,247 
Construction in progress  11,843  47,783 
CRC transferred to State Government  47,782 
Taxes and social contributions  7,244  128,610  1,587  1,093  9,632  655 
Deferred regulatory assets (CVA) 188,303 
NONCURRENT ASSETS  4,113,848  3,922,899  192,584  186,569  564,659  526,856  690,432 
Long-Term Receivables  100,718  1,729,573  12,519  28,229  249  -  37 
Customers and distributors, net  (85) 71,526  24,294 
Telecommunications services  2,827 
CRC transferred to State Government  1,248,554 
Taxes and social contributions  82,417  244,024  9,444  436 
Deferred regulatory assets (CVA) 51,790 
Other regulatory assets  5,786 
Collaterals and escrow deposits  37,515 
Judicial deposits  16,505  65,692  248  115  249  37 
Advance payments to suppliers  3,327 
Other receivables  1,881  4,686  57 
Investments  412,183  2,479  -  2  -  -  685,276 
Property, plant, and equipment  3,537,706  2,154,696  179,120  156,411  564,282  526,835  1,654 
Intangible assets  63,241  36,151  945  1,927  128  21  3,465 
               

72


Table of Contents

               
LIABILITIES  GET   DIS  TEL  COM  ELE  UEG  Other 
31.03.2009               
               
              - 
TOTAL LIABILITIES  5,189,757  5,570,766  248,284  252,500  631,754  668,397  712,146 
CURRENT LIABILITIES  641,163  1,111,866  20,936  58,577  82,411  4,430  5,272 
Loans and financing  55,685  14,542  6,517 
Debentures  33,053 
Suppliers  69,865  470,308  4,616  31,371  4,969  3,000 
Taxes and social contributions  45,376  223,876  2,404  1,140  1,552  468  25 
Dividends due  369,617  91,100  3,655  18,000  1,538  5,237 
Payroll and labor provisions  41,921  116,621  9,143  1,461  125  33 
Post-employment benefits  5,558  14,393  949 
Deferred regulatory liabilities (CVA) 12,977 
Other regulatory liabilities  5,840  15,231 
Regulatory charges  3,791  29,457 
R & D and Energy Efficiency  18,502  79,021  1,818  921 
Concession charge - ANEEL grant  39,019 
Other accounts payable  25,008  44,340  169  88  337 
NONCURRENT LIABILITIES  768,787  1,315,854  17,778  25,147  465,708  3,713  4 
Loans and financing  224,825  151,406  11,463  26,598 
Debentures  194,617 
Provisions for contingencies  179,673  191,050  1,719  291  3,053 
Subsidiaries and investees  610,613  244,493 
Suppliers  233,646 
Taxes and social contribution  18,468  8,260  660 
Post-employment benefits  118,181  263,896  16,059  728 
Other regulatory liabilities  3,868 
R & D and Energy Efficiency  7,405  76,538 
Other accounts payable  5,057  15  4,405 
SHAREHOLDERS' EQUITY  3,779,807  3,143,046  209,570  168,776  83,635  660,254  706,870 
Stock capital  3,400,378  2,171,928  194,755  111,140  69,450  707,440  514,412 
Capital reserves  1,134  39,618 
Income reserves  228,583  870,357  9,169  51,876  7,809  178,993 
Accrued income (losses) 150,846  100,761  5,646  5,760  5,242  (47,186) (26,153)

73


Table of Contents

               
STATEMENT OF OPERATIONS  GET   DIS  TEL  COM  ELE  UEG  Other 
31.03.2009               
               
 
OPERATING REVENUES  450,088  1,577,132  32,455  64,807  42,991  10,357  241 
Electricity sales to final customers  39,638  714,133 
Electricity sales to distributors  344,553  12,224  42,991  241 
Charges for the use of the power grid  59,050  833,339 
Telecommunications revenues  32,455 
Distribution of piped gas  62,937 
Leases and rents  265  13,984  10,357 
Other operating revenues  6,582  3,452  1,870 
DEDUCTIONS FROM OPERATING REVENUES  (65,562) (633,426) (5,345) (13,492) (2,055) (958) (74)
NET OPERATING REVENUES  384,526  943,706  27,110  51,315  40,936  9,399  167 
OPERATING COSTS AND EXPENSES  (173,659) (809,485) (19,839) (43,930) (21,689) (13,667) (495)
Electricity purchased for resale  (23,634) (470,255) (877)
Charges for the use of the power grid  (43,359) (94,935) (3,544) (3,652)
Personnel and management  (39,240) (115,624) (7,789) (2,143) (407) (87) (7)
Pension and healthcare plans  6,730  (1,057) 89  (203)
Materials and supplies  (2,391) (10,716) (574) (90) (81) (15)
Raw materials and supplies - generation  (5,879) (458)
Natural gas and supplies - gas business  (37,666)
Third-party services  (15,773) (54,773) (2,128) (984) (1,867) (1,412) (204)
Depreciation and amortization  (35,557) (40,573) (7,820) (2,201) (4,096) (7,963) (234)
Provisions (reversals) for contingencies  3,033  (9,455) (848) (7)
Concession charge - ANEEL grant  (9,863)
Other operating costs and expenses  (17,589) (12,097) (769) (636) (954) (80) (50)
OPERATING INCOME BEFORE FINANCIAL               
RESULTS & EQ. IN RESULTS OF INVESTEES  210,867  134,221  7,271  7,385  19,247  (4,268) (328)
Interest income (expenses) 18,081  19,017  1,235  1,391  (11,320) 3,396  283 
Equity in results of investees  (303) 7,076 
INCOME (LOSSES) BEFORE INCOME TAX               
AND SOCIAL CONTRIBUTION  228,645  153,238  8,506  8,776  7,927  (872) 7,031 
Provision for IRPJ and CSLL  (70,519) (27,140) (3,111) (2,799) (2,685) (44)
Deferred IRPJ and CSLL  (7,280) (25,337) 251  (217)
INCOME (LOSSES) FOR THE PERIOD  150,846  100,761  5,646  5,760  5,242  (872) 6,987 
               
IRPJ = Corporate income tax               
CSLL = Social contribution on net income               

74


Table of Contents

35 Statement of Operations Broken Down by Company

In order to allow the analysis of the statement of operations according to the nature of the expenses, the operating costs and expenses are presented in aggregate form for the three-month period ended on March 31, 2009, not taking into account the results of equity in the Parent Company’s subsidiaries.

                     
STATEMENT OF OPERATIONS                Parent  Subtractions and   
  GET   DIS  TEL  COM  ELE  UEG Other Company noncontrolling   Consolidated
31.03.2009                  interests   
                     
OPERATING REVENUES  450,088  1,577,132  32,455  64,807  42,991  10,357  241  -  (100,530) 2,077,541 
Electricity sales to final customers  39,638  714,133  (1,092) 752,679 
Electricity sales to distributors  344,553  12,224  42,991  241  (65,426) 334,583 
Charges for the use of the power grid  59,050  833,339  (22,788) 869,601 
Telecommunications revenues  32,455  (8,840) 23,615 
Distribution of piped gas  62,937  (644) 62,293 
Leases and rents  265  13,984  10,357  (300) 24,306 
Other operating revenues  6,582  3,452  1,870  (1,440) 10,464 
DEDUCTIONS FROM OPERATING REVENUES  (65,562) (633,426) (5,345) (13,492) (2,055) (958) (74) -  -  (720,912)
NET OPERATING REVENUES  384,526  943,706  27,110  51,315  40,936  9,399  167  -  (100,530) 1,356,629 
OPERATING COSTS AND EXPENSES  (173,659) (809,485) (19,839) (43,930) (21,689) (13,667) (495) (4,916) 100,584  (987,096)
Electricity purchased for resale  (23,634) (470,255) (877) 65,426  (429,340)
Charges for the use of the power grid  (43,359) (94,935) (3,544) (3,652) 22,789  (122,701)
Personnel and management  (39,240) (115,624) (7,789) (2,143) (407) (87) (7) (1,430) (166,727)
Pension and healthcare plans  6,730  (1,057) 89  (203) (40) 5,519 
Materials and supplies  (2,391) (10,716) (574) (90) (81) (15) (4) (13,871)
Raw materials and supplies - generation  (5,879) (458) 644  (5,693)
Natural gas and supplies - gas business  (37,666) (37,666)
Third-party services  (15,773) (54,773) (2,128) (984) (1,867) (1,412) (204) (600) 11,425  (66,316)
Depreciation and amortization  (35,557) (40,573) (7,820) (2,201) (4,096) (7,963) (234) (189) (98,633)
Provisions and reversals  3,033  (9,455) (848) (7) (2,274) (9,551)
Concession charge - ANEEL grant  (9,863) (9,863)
Compensation for use of water resources  (16,288) (602) (16,890)
Other operating costs and expenses  (1,301) (12,097) (769) (636) (352) (80) (50) (379) 300  (15,364)
OPERATING INCOME BEFORE FINANCIAL                     
RESULTS & EQ. IN RESULTS OF INVESTEES  210,867  134,221  7,271  7,385  19,247  (4,268) (328) (4,916) 54  369,533 
Interest income (expenses) 18,081  19,017  1,235  1,391  (11,320) 3,396  283  509  (54) 32,538 
Equity in results of investees  7,600  3,574  11,174 
INCOME (LOSSES) BEFORE INCOME TAX                     
AND SOCIAL CONTRIBUTION  228,948  153,238  8,506  8,776  7,927  (872) 7,555  (833) -  413,245 
Provision for IRPJ and CSLL  (70,519) (27,140) (3,111) (2,799) (2,685) (44) (106,298)
Deferred IRPJ and CSLL  (7,280) (25,337) 251  (217) 1,502  (31,081)
Non-controlling shareholders' interests  (3,795) (3,795)
INCOME (LOSSES) FOR THE PERIOD  151,149  100,761  5,646  5,760  5,242  (872) 7,511  669  (3,795) 272,071 
                     

75


Table of Contents

36 Statement of Added Value

For the quarters ended on March 31, 2009 and March 31, 2008:

     
    Consolidated 
     
  31.03.2009  31.03.2008 
 
Revenues     
   Electricity sales, services, and other revenues  2,077,541  1,989,579 
   Provision for doubtful accounts  (4,396) (9,367)
   Other operating revenues (expenses) (3,472) (734)
Total  2,069,673  1,979,478 
 
( - ) Supplies acquired from third-parties     
   Electricity purchased for resale  478,729  485,817 
   Charges for the use of the power grid ( - ) ESS  135,171  98,802 
   Materials, supplies, and services from third-parties  88,425  80,093 
   Natural gas and supplies for the gas business  48,111  35,181 
   Emergency capacity charges and PROINFA  56  61 
   Other  15,431  13,538 
Total  765,923  713,492 
 
( = ) GROSS ADDED VALUE  1,303,750  1,265,986 
 
( - ) Depreciation and amortization  98,633  104,016 
 
( = ) NET ADDED VALUE  1,205,117  1,161,970 
 
( + ) Transferred Added Value     
   Interest income  87,771  106,603 
   Equity pick-up in results of investees  11,174  12,250 
Total  98,945  118,853 
 
ADDED VALUE TO DISTRIBUTE  1,304,062  1,280,823 
     
(next page)    

76


Table of Contents

(continued)        
         
      Consolidated 
       
  31.03.2009  %  31.03.2008  % 
DISTRIBUTION OF ADDED VALUE:         
 
Personnel         
   Salaries and wages  113,632    99,753   
   Pension and healthcare plans  (5,519)   20,405   
   Meal assistance and education allowance  13,453    11,945   
   Social charges - FGTS  9,624    8,539   
   Labor indemnifications (reversals) 1,156    (554)  
   Profit sharing  16,351     
   Transfer to construction in progress  (17,811)   (14,510)  
Total  130,886  10.0  125,578  9.8 
 
Government         
   Federal  439,328    432,348   
   State  400,642    389,440   
   Municipal  858    1,296   
Total  840,828  64.5  823,084  64.2 
 
Financing agents         
   Interest and penalties  52,766    69,672   
   Leases and rents  3,716    2,897   
Total  56,482  4.3  72,569  5.7 
 
Shareholders         
   Non-controlling shareholders' interests  3,795    4,080   
   Interest on capital     
   Proposed dividends     
   Retained earnings  272,071    255,512   
Total  275,866  21.2  259,592  20.3 
 
  1,304,062    1,280,823   
         
The acompanying notes are an integral part of these quarterly financial statements

37 Subsequent Event

Program for the renewal of COPEL’s workforce

On April 13, 2009, COPEL’s management decided that the employees who receive retirement benefits from INSS (the National Social Security Institute) will be withdrawn from the Company in a planned manner, pursuant to a withdrawal and replacement schedule to be concluded within 30 days, and that the employees who hereafter voluntarily file for retirement benefits from INSS and do not join the PIA (Programa de Incentivo à Aposentadoria or Retirement Encouragement Program) will be dismissed from the Company without cause.

Approximately 700 employees are in this situation. At this point, the Company has not been able to estimate the costs to be incurred due to several different variables which need to be established for the calculation. This estimate should be concluded in the second quarter of 2009.

77


Table of Contents

COMMENTS ON THE PERFORMANCE OF THE COMPANY IN THE QUARTER

(In thousands of reais, except where otherwise indicated)

1 Distribution

Customer connections – In March 2009, COPEL supplied 3,549,256(1) customers (3,460,386(1) in March 2008), with an increase of 88,870(1) customers (2.6%) over the past 12 months.

Compact-design distribution lines – COPEL has continued to implement compact-design distribution lines in urban areas with a high concentration of trees surrounding the distribution grids. This technology helps to preserve the environment, as trees in the vicinity of power grids do not need to be cut off or severely trimmed, and to improve the quality of power supply by reducing the number of unplanned outages. The total length of urban compact-design distribution lines in operation as of March 2009 was 1,681 km(1) (1,397 km(1) as of March 2008), with an increase of 314 km(1) (23.0%) over the past 12 months.

Secondary Isolated Lines – COPEL has also invested in low-voltage (127/220 V) secondary isolated lines, which offer such significant advantages over regular overhead lines as:

- improvement in DEC and FEC distribution performance indicators;

- defense against illegal connections;

- improved environmental conditions and reduced tree areas subject to trimming;

- improved safety;

- reduced voltage drops throughout the grid; and

- increased transformer useful life due to the reduction of short-circuits, among other advantages.

The total length of secondary isolated lines in operation as of March 2009 was 3,988 km(1) (2,851 km(1) as of March 2008), with an increase of 1,137 km(1) (39.9%) over the past 12 months.

Market breakdown The generation of energy by COPEL from January through March 2009 was 3,944.2 GWh(1) (5,069.0 GWh(1) in the same period of 2008). The Company purchased 3,685.7 GWh(1) from CCEAR (auction) (against 3,492.9 GWh(1) in the same period of 2008) and 1,319.6 GWh(1) from Itaipu (against 1,353.2 GWh(1) in the same period of 2008), as shown in the flowchart below:

78


Table of Contents


Power sales by customer category (MWh) Power sales by COPEL from January through March 2009, including free customers and other utilities within Paraná, are broken down by customer category on the following table:

       
Category(1)     In MWh 
       
  Jan - Mar 2009  Jan - Mar 2008  Variation 
   Residential  1,414,107  1,345,598  5.1% 
   Industrial  1,550,756  1,603,106  -3.3% 
   Commercial  1,067,551  1,001,344  6.6% 
   Rural  450,461  428,993  5.0% 
   Other  488,583  464,946  5.1% 
Total for captive customers  4,971,458  4,843,987  2.6% 
   Free customers - Copel Geração e Transmissão  269,613  304,339  -11.4% 
Total supply to final customers  5,241,071  5,148,326  1.8% 
   Other utilities in the State of Paraná  121,704  120,898  0.7% 
Total  5,362,775  5,269,224  1.8% 
       

79


Table of Contents

Power sales within COPEL Distribuição’s captive market amounted to 4,971.5 GWh from January through March 2009, with 2.6% growth compared to same period last year. Total power sales by COPEL, which includes supply to captive and free customers and supply to other distribution utilities within Paraná, reached 5,362.8 GWh, with 1.8% growth. This performance was due mostly to the high temperatures recorded throughout the Company’s concession area, even though the industrial segment did suffer the effects of the global economic crisis in the months of January and February.

Captive market – The breakdown of COPEL Distribuição’s captive market shows that residential customers consumed 1,414.1 GWh, with 5.1% growth and a 28.4% share of the market. Average consumption by residential customer was 168.3 kWh a month, with 2.6% growth. In March 2009, COPEL supplied power to 2,800,788 residential customers.

Industrial customers consumed 1,550.8 GWh and accounted for 31.2% of consumption by captive customers, with a 3.3% drop in consumption. In March 2009, COPEL supplied power to 63,850 industrial customers, a figure 8.1% higher than the one recorded in March 2008.

Commercial customers consumed 1,067.6 GWh and accounted for 21.5% of consumption by captive customers, with 6.6% growth. In March 2009, COPEL supplied power to 295,530 commercial customers.

Rural customers consumed 450.5 GWh and accounted for 9.1% of consumption by captive customers, with 5.0% growth. In March 2009, COPEL supplied power to 341,699 rural customers.

The other consumption categories (public agencies, public lighting, public services, and own consumption) consumed 488.6 GWh and accounted for 9.8% of consumption by captive customers, with 5.1% growth. In March 2009, COPEL supplied power to 47,375 customers in these categories.

Free customers - Power consumption by free customers supplied by COPEL Geração e Transmissão fell 11.4% due to the expiration of certain agreements.

Number of customers The number of customers billed by COPEL in March 2009 was 3,549,256, representing growth of 2.6% over the same month of 2008.

80


Table of Contents

 
       
Category      Customers(1)
 
  March 2009  March 2008  Variation 
   Residential  2,800,788  2,733,727  2.5% 
   Industrial  63,850  59,039  8.1% 
   Commercial  295,530  288,031  2.6% 
   Rural  341,699  334,324  2.2% 
   Other  47,375  45,250  4.7% 
Total for captive customers  3,549,242  3,460,371  2.6% 
   Free customers - Copel Geração e Transmissão  14  15  -6.7% 
Total  3,549,256  3,460,386  2.6% 
 

2 Management

Workforce COPEL’s workforce at the end of the first quarter of 2009 amounted to 8,376(1) employees assigned to the Company’s wholly-owned subsidiaries and 112(1) employees assigned to the companies controlled by COPEL Participações, as follows:

 
     
    Employees (1)
 
  March 2009  March 2008 
Wholly-owned subsidiaries     
   Copel Geração e Transmissão  1,564  1,499 
   Copel Distribuição  6,464  6,434 
   Copel Telecomunicações  348  333 
   Copel Participações (a) 29 
  8,376  8,295 
Companies controlled by COPEL Participações     
   Compagas  103  82 
   Elejor (Santa Clara)
   UEG Araucária 
  112  91 
 
(a) Copel Participações was dissolved on December 1, 2008, and all of its employees were transferred to COPEL Geração e Transmissão. 

3 Investor Relations

From January through March 2009, COPEL’s common shares (ON - code CPLE3) and class B preferred shares (PNB - code CPLE6) were traded on 89% and 100%, respectively, of the São Paulo Stock Exchange (BOVESPA) trading sessions.

COPEL’s free floating shares accounted for 45.0% of the Company’s stock capital. COPEL’s market value, based on the BOVESPA stock prices at the end of March 2009, was approximately R$ 6,086,000. Out of the 65 securities that make up the Ibovespa index, COPEL’s class B shares ranked 36th, accounting for 0.60% of the portfolio, with a Beta index of 0.60.

COPEL also accounts for 5.86% of the IEE (Electric Energy Index) portfolio.

81


Table of Contents

As reported by BOVESPA, the closing price of COPEL’s common shares on the last trading day of the period was R$ 20.60 (a negative variation of 6.36%), and class B preferred shares were traded at R$ 24.10 (a negative variation of 0.42%) . From January through March 2009, the Ibovespa index increased 8.99% .

On the New York Stock Exchange (NYSE), COPEL’s class B preferred shares, represented by American Depositary Shares (ADSs), are traded at Level 3, under the code ELP. As reported by NYSE, COPEL’s ADSs were traded on 100% of the trading sessions and had a closing price of US$ 10.43 at the end of the period (a negative variation of 1.04%) . Over this period, the Dow Jones index fell 13.30% .

On LATIBEX (The Euro Market for Latin-American Securities), linked to the Madrid Stock Exchange, COPEL’s Class B preferred shares are traded under the symbol XCOP. As reported by LATIBEX, COPEL’s XCOPs were traded on 98% of the trading sessions and had a closing price of 7.78 euros at the end of the period (a 3.73% variation). From January through March 2009, the Latibex index increased 16.64% .

 
         
Stock performance(1) - January - March 2009  Common Shares  Preferred Class B Shares 
 
  Total  Daily average  Total  Daily average 
Bovespa         
   Trades  807  15  85,003  1,393 
   Number of shares  3,033,200  56,170  38,099,400  624,580 
   Volume (in thousands of reais) 62,713  1,161  854,326  14,005 
   Trading sessions  54  89%  61  100% 
Nyse         
   Number of shares  750,100  46,881  21,101,029  345,919 
   Volume (in thousands of dollars) 6,913  432  207,746  3,406 
   Trading sessions  16  26%  61  100% 
Latibex         
   Number of shares  119,678  1,995 
   Volume (in thousands of euros) 895  15 
   Trading sessions  60  98% 
 

4 Rates

The average rate for sales to final customers in March 2009 reached R$ 206.34/MWh (1), representing a 1.63% increase compared with the rate effective in March 2008.

Average rates for sales to final customers are shown below:

82


Table of Contents

 
       
Average rates to final customers (a)     R$/MWh (1)
 
  March 2009  March 2008  Variation 
   Residential  257.49  252.08  2.1% 
   Industrial (b) 176.79  176.41  0.2% 
   Commercial  225.18  220.75  2.0% 
   Rural  151.21  148.74  1.7% 
   Others  173.00  170.53  1.4% 
 
Total for sales to final customers  206.34  203.04  1.6% 
 

Notes:
(a) Net of ICMS (VAT)
(b) Does not include free customers

Under Resolution no. 663, dated June 23, 2008, ANEEL approved new rates for bulk sales by COPEL to COCEL, with an 11.64% average reduction compared to the previous period.

Under Resolution no. 608, dated January 29, 2008, ANEEL approved new rates for bulk sales by COPEL to Companhia Força e Luz do Oeste - CFLO, with a 3.22% average increase over previous rates. Resolution no. 759, dated January 21, 2009, extended these rates until June 28, 2009.

The main rates for power purchased by COPEL are shown below:

 
       
Rates for electricity purchases      R$/MWh (1)
 
  March 2009  March 2008  Variation 
   Itaipu  116.41  80.27  45.0% 
   Cien  84.54 
   Auction - CCEAR 2005-2012  67.39  63.82  5.6% 
   Auction - CCEAR 2006-2013  78.92  74.75  5.6% 
   Auction - CCEAR 2007-2014  89.26  84.37  5.8% 
   Auction - CCEAR 2007-2014 (A-1) 112.56  104.74  7.5% 
   Auction - CCEAR 2008-2015  94.86  89.84  5.6% 
   Auction - CCEAR 2008-H30  118.74  112.42  5.6% 
   Auction - CCEAR 2008-T15 (a) 146.60  138.86  5.6% 
 
   Note: 
   (a) Average auction price restated according to the IPCA inflation index. 

The main rates for power sold by COPEL to distributors are shown below:

 
       
Rates for sale to distributors(1)     R$/MWh (1)
 
  March 2009  March 2008  Variation 
   Auction - CCEAR 2005-2012  67.62  63.96  5.7% 
   Auction - CCEAR 2006-2013  79.38  75.14  5.6% 
   Auction - CCEAR 2007-2014  88.96  84.06  5.8% 
   Auction - CCEAR 2008-2015  94.27  89.15  5.7% 
   Auction - CCEAR 2009-2016  107.96 
   Utilities within Paraná  122.26  121.37  0.7% 
 

83


Table of Contents

5 Economic and Financial Performance

Revenues (Note 27)

As of March 2009, net operating revenues reached R$ 1,356,629, an amount 3.2% greater than the R$ 1,314,558 recorded from as of March 2008.

This increase resulted mostly from the following factors:

(i) a 4.7% increase in revenues from sales to final customers, which reflects only actual sales revenues, not including revenues from the use of the distribution system (TUSD), due to the expansion of the Company’s total market demand (1.8% until March 2009);

(ii) a 5.7% increase in revenues from sales to distributors, mostly on account of the revenues from auction transactions and from the Electric Energy Trading Chamber (CCEE).

(iii) a 34.1% increase in COPEL Telecomunicações’ revenues due to service to new customers and added services to existing ones; and

(iv) a 4.7% increase in revenues from sales of gas due to increased distribution of gas to third-parties and to the rate increase passed on to customers during the period.

Operating Costs and Expenses (Note 29)

At the end of March 2009, operating costs and expenses amounted to R$ 987,096, representing an increase of 1.6% over the R$ 971,922 recorded in the same period of 2008. The main variations were:

A 3.2% reduction in power purchased for resale due mostly to: (i) a R$ 24,035 reduction in power purchased from CCEE; (ii) a R$ 7,072 increase in PIS/PASEP and COFINS tax credits on power purchased for resale; (iii) an offsetting increase in power purchased at auctions in the amount of R$ 18,682.

A 16.0% increase in charges for the use of the power grid, due mostly to the effects of the Basic Network and Itaipu Transport CVA, in the amount of R$ 21,507, and to the increase in the Basic Network quota.

A 26.6% increase in personnel expenses – which amounted to R$ 166,727 as of March 2009 – compared to the same period last year. This increase was due basically to the 7.5% wage increase applied as of October 2008, to the provision for profit sharing, to the addition of 81 employees to the workforce compared to March 2008, and to the resulting increase in social charges and provisions for annual bonus and paid vacation.

84


Table of Contents

The 19.1% increase in materials compared to the same period of 2008 was due mostly to higher purchases of computer equipment, office supplies, and fuel and vehicle parts.

The 7.3% increase in third-party services was due mostly to higher expenses with power grid maintenance, technical and scientific consulting, and mail services.

The reduction in provisions and reversals was due to the lower impact of the provision for doubtful accounts in 2009 in the amount of R$ 4,396 (R$ 9,367 in the same period of 2008) and of provisions for contingencies in the amount of R$ 5,155 (R$ 7,420 in 2008).

Adjusted EBITDA (1)

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached R$ 468,166 in March 2009, a figure 4.8% higher than the one recorded in the same period of last year (R$ 446,652), as shown below:

 
     
Calculation of EBITDA    Consolidated 
 
  March 2009  March 2008 
   Net income for the period  272,071  255,512 
   Deferred IRPJ and CSLL  31,081  6,475 
   Provision for IRPJ and CSLL  106,298  122,909 
   Equity in results of investees  (11,174) (12,250)
   Interest expenses (income), net  (32,538) (34,090)
   Non-controlling shareholders' interests  3,795  4,080 
   EBIT  369,533  342,636 
   Depreciation and amortizaion  98,633  104,016 
   Adjusted EBITDA  468,166  446,652 
   Net Operating Revenues - NOR  1,356,629  1,314,558 
 
   EBITDA Margin%(1) 34.5%  34.0% 
 

(1) EBITDA ÷ NOR
IRPJ= Corporate Income Tax
CSLL= Social Contribution on Net Income

Net income

From January through March 2009, COPEL recorded net income of R$ 272,071, corresponding to R$ 0.9942 per share.

(1) Information unaudited by the independent auditors.

85


Table of Contents

OTHER INFORMATION DEEMED MATERIAL BY THE COMPANY (1)

In compliance with the provisions of the BOVESPA’s Regulation of Level 1 Special Corporate Governance Practices, we provide below a list of the shareholders who hold more than 5% of any type of Company stock, the consolidated shareholding situation of the controlling parties and senior management, and COPEL’s free-float:

COMPANHIA PARANAENSE DE ENERGIA - COPEL  As of 31/03/2008 
(In shares)
SHAREHOLDING POSITION OF THE HOLDERS OF MORE THAN 5% OF EACH CLASS OF STOCK (ENTITIES AND INDIVIDUALS)
SHAREHOLDERS  Common Shares  Class A Preferred 
Shares 
 Class B Preferred 
Shares
 
Total 
Shares  %  Shares  %  Shares  %  Shares  % 
CONTROLLING 
SHAREHOLDER 
STATE OF PARANÁ  85,028,598  58.63  13,639  0.01  85,042,237  31.08 
BNDES PARTICIPAÇÕES S.A. - BNDESPAR  38,298,775  26.41  27,282,006  21.28  65,580,781  23.96 
TREASURY STOCK 
OTHER SHAREHOLDERS  21,703,707  14.96  398,342  100.00  100,930,308  78.71  123,032,357  44.96 
TOTAL  145,031,080  100.00  398,342  100.00  128,225,953  100.00  273,655,375  100.00 

Obs.: BNDES Participações S.A. - BNDESPAR is a public company, wholly-owned by Banco Nacional de Desenvolvimento Social - BNDES, which is 100.0% owned by the Federal Government. Its' Shareholders' Agreement with the State of Paraná remains in effect.

COMPANHIA PARANAENSE DE ENERGIA - COPEL  As of 31/03/2009 
(In shares)
SHAREHOLDING POSITION OF THE HOLDERS OF MORE THAN 5% OF EACH CLASS OF STOCK (ENTITIES AND INDIVIDUALS)
SHAREHOLDERS  Ações Ordinárias  Ações Preferenciais 
Classe “A” 
Ações Preferenciais 
Classe “B” 
Total 
Quantidade  %  Quantidade  %  Quantidade   %  Quantidade  % 
CONTROLLING 
SHAREHOLDER 
STATE OF PARANÁ  85,028,598  58.63  13,639  0.01  85,042,237  31.08 
BNDES PARTICIPAÇÕES S.A. - BNDESPAR  38,298,775  26.41  27,282,006  21.28  65,580,781  23.96 
TREASURY STOCK 
OTHER SHAREHOLDERS  21,703,707  14.96  396,063  100.00  100,932,587  78.71  123,032,357  44.96 
TOTAL  145,031,080  100.00  396,063  100.00  128,228,232  100.00  273,655,375  100.00 

Obs.: BNDES Participações S.A. - BNDESPAR is a public company, wholly-owned by Banco Nacional de Desenvolvimento Social - BNDES, which is 100.0% owned by the Federal Government. Its' Shareholders' Agreement with the State of Paraná remains in effect.

86


Table of Contents

COMPANHIA PARANAENSE DE ENERGIA - COPEL  As of 31/03/2008 
(In shares)
CONSOLIDATED SHAREHOLDING POSITION OF THE MAJORITY SHAREHOLDERS AND SENIOR MANAGEMENT OF THE COMPANY AND FREE- FLOATING STOCK
SHAREHOLDERS  Common Shares  Class A Preferred 
Shares 
Class B Preferred 
Shares 
Total 
Shares     %  Shares  %  Shares  %  Shares  % 
CONTROLLING SHAREHOLDER  123,327,373  85.04  27,295,645  21.29  150,623,018  55.04 
SENIOR MANAGEMEN  BOARD OF DIRECTORS  0.00  0.00 
BOARD OF OFFICERS  102  0.00  102  0.00 
FISCAL COUNCIL 
TREASURY STOCK 
OTHER SHAREHOLDERS  21,703,596  14.96  398,342  100.00  100,930,308  78.71  123,032,246  44.96 
TOTAL  145,031,080  100.00  398,342  100.00  128,225,953  100.00  273,655,375  100.00 
FREE-FLOAT  21,703,596  14.96  398,342  100.00  100,930,308  78.71  123,032,246  44.96 

COMPANHIA PARANAENSE DE ENERGIA - COPEL  As of 31/03/2009 
(In shares)
CONSOLIDATED SHAREHOLDING POSITION OF THE MAJORITY SHAREHOLDERS AND SENIOR MANAGEMENT OF THE COMPANY AND FREE- FLOATING STOCK
SHAREHOLDERS  Common Shares  Class A Preferred 
Shares 
Class B Preferred 
Shares 
Total 
Shares     %  Shares  %  Shares  %  Shares  % 
CONTROLLING SHAREHOLDER  123,327,373  85.04  27,295,645  21.29  150,623,018  55.04 
SENIOR MANAGEMEN  BOARD OF DIRECTORS  0.00  0.00 
BOARD OF OFFICERS  102  0.00  102  0.00 
FISCAL COUNCIL 
TREASURY STOCK 
OTHER SHAREHOLDERS  21,703,596  14.96  396,063  100.00  100,932,587  78.71  123,032,246  44.96 
TOTAL  145,031,080  100.00  396,063  100.00  128,228,232  100.00  273,655,375  100.00 
FREE-FLOAT  21,703,596  14.96  396,063  100.00  100,932,587  78.71  123,032,246  44.96 

(1) Information unaudited by the independent auditors.

87


Table of Contents

SENIOR MANAGEMENT AND COMMITTEES

 
BOARD OF DIRECTORS 
 
Chairman   JOÃO BONIFÁCIO CABRAL JÚNIOR 
Executive Secretary   RUBENS GHILARDI 
Members   JORGE MICHEL LEPELTIER 
   LAURITA COSTA ROSA 
   LUIZ ANTONIO RODRIGUES ELIAS 
   MUNIR KARAM 
   NELSON FONTES SIFFERT FILHO 
   NILTON CAMARGO COSTA 
  ROGÉRIO DE PAULA QUADROS 
   
AUDIT COMMITTEE 
   
Chairwoman   LAURITA COSTA ROSA 
Members   JORGE MICHEL LEPELTIER 
   ROGÉRIO DE PAULA QUADROS 
   
FISCAL COUNCIL 
   
Chairman   OSMAR ALFREDO KOHLER 
Members   ALEXANDRE LUIZ OLIVEIRA DE TOLEDO 
   HERON ARZUA 
   MÁRCIO LUCIANO MANCINI 
   WILSON PORTES 
   
BOARD OF OFFICERS 
   
Chief Executive Officer   RUBENS GHILARDI 
Chief Finance, Investor Relations, and Corporate Partnerships Officer   PAULO ROBERTO TROMPCZYNSKI 
Chief Engineering Officer   LUIZ ANTONIO ROSSAFA 
Chief Management Officer   ANTONIO RYCHETA ARTEN 
Chief Power Distribution Officer   RONALD THADEU RAVEDUTTI 
Chief Power Generation and Transmission and Telecommunications Officer   RAUL MUNHOZ NETO 
Chief Legal Officer   ZUUDI SAKAKIHARA 
Chief Environmental and Corporate Citizenship Officer   MARLENE ZANNIN 

For information about Investor Relations, please contact: ri@copel.com - Phone: +55 (41) 3222-2027/ +55 (41) 3331-4359 Fax: +55 (41) 3331-2849

88


Table of Contents


INDEPENDENT AUDITOR REPORT ON THE REVIEW OF THE QUARTERLY INFORMATION

To the
Shareholders, Directors, and Officers of
Companhia Paranaense de Energia – COPEL
Curitiba – PR

1. We have reviewed the financial information (parent company and consolidated) contained in the Quarterly Information Report (ITR) of Companhia Paranaense de Energia – COPEL and its subsidiaries for the quarter ended on March 31, 2009, comprising the balance sheets, the statements of income, the statements of changes in shareholders’ equity, cash flows and added value, the performance report, and the accompanying notes, prepared under the responsibility of the management of the Company.

2. Our review was carried out in compliance with the specific standards set forth by the Institute of Independent Auditors of Brazil (IBRACON), in conjunction with the Federal Accounting Council (CFC), and basically comprised: (a) inquiries of and discussions with the senior managers responsible for the accounting, financial, and operating areas of the Company and its subsidiaries, with regard to the main criteria adopted in the preparation of the quarterly information; and (b) a review of the information and of the subsequent events which have, or may have, significant effects on the financial position and operations of the Company and its subsidiaries.

3. Based on our special review, we are not aware of any material modifications that should be made to the quarterly information contained in the quarterly report discussed in paragraph 1 so as to make it compliant with the accounting practices adopted in Brazil, consistent with the regulations of the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of quarterly reports.

4. As mentioned in note 2, due to changes in the accounting practices adopted in Brazil during 2008, the statements of income, of changes in shareholders’ equity, of cash flows, and of added value for the quarter ended on March 31, 2008, presented for purposes of comparison, have been reclassified and are being republished. We have not identified any adjustments which could have an impact on the Company’s income and on its shareholders’ equity as of March 31, 2008.

Curitiba, May 11, 2009.

DELOITTE TOUCHE TOHMATSU  Iara Pasian 
   
Independent Auditors  Accountant 
   
CRC n.º 2 SP-011.609/O-8 F-PR  CRC n.º 1 SP 121.517/O-3 S/PR 

89


 
SIGNATURE
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: July 14, 2009

 
COMPANHIA PARANAENSE DE ENERGIA – COPEL
By:
/S/  Rubens Ghilardi

 
Rubens Ghilardi
CEO
 

 

 
FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.