COPEL’s consolidated financial statements present, in addition to the figures of the whollyowned subsidiaries (COPEL Geracao e Transmissao, COPEL Distribuiçao and COPEL Telecomunicacoes), those of Compagas, Elejor, UEG Araucaria and Centrais Eolicas do Parana (companies in which COPEL retains a majority stake). From January 2008 on, Domino Holdings started to be partially consolidated (45%).

Operating Income: BRL1,555 million

EBITDA (earnings before interest, taxes, depreciation and amortization): BRL1,851 million. EBITDA in fourth quarter of 2008 was BRL381 million.

Return on net equity: 15.5%.

Total power consumption billed by COPEL to captive customers in 2008 rose by 6.0% over 2007. COPEL Distribuicao’s grid market grew by 5.6%.

Dividends and Interest on Capital:

A proposed distribution of BRL228,0 million as interest on capital and of BRL33,8 million as dividends, amounting to BRL261,8 million for 2008, will be submitted to the General Shareholders’ Meeting, which will take place in April 2009.

Energy Sales:

Power consumption by the captive market billed by COPEL grew 6.0% in 2008. The following variations were recorded in the consumption of the company’s main customer categories: residential: 4.7%, commercial: 6.6%, industrial: 7.8%, and rural: 5.5%.

Hydroelectric Power Plant:

This 361 MW project belongs to Consorcio Energetico Cruzeiro do Sul, a partnership between COPEL (with 51% interest) and Eletrosul (with 49% interest). On March 24, 2008, the Environmental Institute of Parana (IAP) issued the Installation License for the Maua Hydroelectric Power Plant, located on the Tibagi River, in the State of Parana.

On November 17, 2008, the Brazilian Development Bank (BNDES) approved a loan for the Maua Hydroelectric Power Plant.

UEG Araucaria – UEGA:

UEG Araucaria Ltda., a COPEL subsidiary, renewed its agreement with Petrobras to lease the Araucaria thermal power plant for three years starting from January 1, 2009. UEGA will receive fixed monthly payments plus a variable payment when energy supply begins. Petrobras signed a parallel agreement with COPEL Geracao e Transmissao guaranteeing plant operation and maintenance services during the lease period. The agreement may be partially or entirely terminated if UEGA wins energy auctions held by ANEEL.

Extension of plant concessions:

The Brazilian Electric Energy Agency (ANEEL) recommended to the Ministry of Mines and Energy, through Circular 455 of February 3, 2009, the extension of the following COPEL concessions without valuable consideration:

The extension is for 20 years for the first three plants, and 8.5 years for Cavernoso, but COPEL is already requesting a 20-year extension for it.

Split-off and liquidation of COPEL Participacoes:

In 2008, continuing the corporate restructuring process, COPEL obtained ANEEL’s approval for the split-off and liquidation of COPEL Participacoes S.A. and transfer of its assets to Companhia Paranaense de Energia and COPEL Geracao e Transmissao S.A., with the book value being BRL880.2 million and BRL454.5 million, respectively.

Impairment:

Applying the Technical Pronouncement CPC 01 relating to Asset Impairment, the company conducted impairment tests on its cash generating units and its investments in affiliates and subsidiaries, and arrived at the impairment value of BRL18,3 million for Sercomtel Telecomunicacoes S.A. and BRL6,2 million for Sercomtel Celular S.A. With this provision, the investment made in Sercomtel Celular S.A. was fully written off in 2008. For other affiliates and subsidiaries, no need was identified to book provisions for the impairment of the investments made.

Sale of Braspower:

On December 22, 2008, COPEL signed an agreement to transfer its interest in the capital of Braspower International Engineering S.C. The sale price for the 49% interest was BRL1.0 million.

Nova Holanda:

Between 1995 and 2001, COPEL allocated funds to the Regional Incentive Funds, Amazonia Investment Fund (FINAM), and Northeast Investment Fund (FINOR). According to legislation, about BRL14.9 million was invested in Nova Holanda Agropecuaria S.A. and the entire amount was provisioned for losses in the current year, given the history of losses at Nova Holanda Agropecuaria S.A.

Purchase of energy generated from biogas:

On February 3, 2009, COPEL signed the first agreements in Brazil’s electricity sector to purchase energy produced from the biodigestion of organic waste. The tests, which began in 2007, were aimed at reducing the environmental impact and studying the technical and economical feasibility of implementing biodigestors in rural areas. Six agreements have been signed, with total energy potential of up to 524 kW, enough to supply a hundred middle-income houses, which will be supplied by four generators: Sanepar, Cooperativa Lar, Granja Colombari and Star Milk. The agreements are valid till the end of 2012.

Voluntary Redundancy Program

COPEL’s board of executive officer has created two voluntary redundancy programs: one for employees who already receive pensions and the other, which is permanent, for employees who retire through the INSS (National Institute of Social Security).

Moody’s Upgrades COPEL’s Ratings:

On November 26, Moody’s America Latina upgraded the global scale rating of Companhia Paranaense de Energia (COPEL) from ‘Ba2’ to ‘Baa3’ and the national scale rating from ‘Aa2.br’ to ‘Aa1.br’. At the same time, it also upgraded its third debenture issue’s global scale rating from ‘Ba1’ to ‘Baa3’ and confirmed the company’s national scale rating at ‘Aa1.br’.

Restructuring:

In a pioneering move in the energy industry, COPEL will propose a change in the structure of its Executive Board to include an Environment Corporate Citizenship Office to treat environmentrelated issues at the top management level. This change will give the company the technical capacity to meet the demands of a very important area.

Energy Sales

Total energy sales billed by COPEL, including the captive market, supply to free customers by COPEL Geracao e Transmissao and energy supplies by COPEL

Distribuicao to other distributors in the State of Parana, was 21,313 GWh, up by 4.2%. The captive market consumed 19,633 GWh, up by 6.0%, due to several factors, notably:

The growth in income levels and expansion of credit, which stimulated business activity and purchases of consumer electronics; and

The 8.6% growth in industrial production in Parana state in 2008, which was almost 3 times the national average of 3.1%.

COPEL is a Brazil-based company involved in the energy sector.