E R EDP - ENERGIAS DE PORTUGAL C R · 2017-01-23 · current composition, EDP had to undergo 8 privatization phases. Currently, the company is mainly owned by foreign investors. As

THIS REPORT WAS PREPARED BY DANIELA GAMEIRO A MASTERS IN FINANCE STUDENT OF THE NOVA SCHOOL OF BUSINESS AND

ECONOMICS EXCLUSIVELY FOR ACADEMIC PURPOSES THIS REPORT WAS SUPERVISED BY ROSAacuteRIO ANDREacute WHO REVIEWED THE

VALUATION METHODOLOGY AND THE FINANCIAL MODEL (SEE DISCLOSURES AND DISCLAIMERS AT END OF DOCUMENT)

See more information at WWWNOVASBEPT Page 137

MASTERS IN FINANCE

E R

EDP is currently increasing its installed capacity in

green energy sources In Iberia it is expected an increase

of installed capacity in hydro from 3627 MW in 2015 to

7170 MW in 2019 In Brazil we expect an increase of 29

during the same period Additionally EDPR has a plan to

increase its portfolio of wind and solar of approximately 06

GW in the upcoming years

PPACMECrsquos stable gross profit is coming to an

end shifting its operations to the liberalized market It is

expected that the EBITDA of the segment will decrease

from euro674 million to euro118 million in the period 2014-2019

Brazil ndash the drought that the country is going

through is abnormal and we think that the situation will

reverse hence benefiting EDPrsquos new hydro projects

Spain and Portugalrsquos officials are putting every

effort to reduce the tariff deficit in order to end with the

situation in 2020 as it is expected by the European

Commission

Every operating segment has a positive NPV

Company description

EDP is the largest utility company in Portugal and one ofthe largest energy operators in the Iberian market EDPoperates in the electricity and gas market throughgeneration distribution and supply It also owns 775 ofEDP Renewables and 51 of EDP Brazil operationsthrough generation distribution and supply of electricity

EDP - ENERGIAS DE PORTUGAL COMPANY REPORT

UTILITIES SECTOR 3 JUNE 2015

STUDENT DANIELA GAMEIRO danielagameiro2013novasbept

Recommendation HOLD

Price Target FY15 354 euro

Price (as of 29-May-15) 356 euro

Reuters EDPLS Bloomberg EDPPL

52-week range (euro) 304-375

Market Cap (eurom) 12999

Outstanding Shares (m) 3657

Source EDP

Source Bloomberg

2014 2015E 2016F

EBITDA (eurom) 3642 3677 3655

Net Profit (eurom) 1264 1111 1105

Net DebtEquity 148 150 142

Net DebtEBITDA 486 501 490

EPS 035 030 030

PE 1029 1116 1172

Dividend Yield () 520 634 558

Source Company Data and Analystrsquos estimates

Reducing the Carbon Footprint

By becoming Greener and Greener every yearhellip

0

50

100

150

fev-10 out-10 jun-11 fev-12 out-12 jun-13 fev-14 out-14

PSI20 Index

EURO STOXX UTILITIES PRICE

EDP PL Equity

EDP ndash ENERGIAS DE PORTUGAL COMPANY REPORT

PAGE 237

TABLE OF CONTENTS

EDP OVERVIEW 3

COMPANY DESCRIPTION 3

SHAREHOLDERS STRUCTURE 5

BUSINESS FRAMEWORK 6

MACROECONOMIC CONTEXT 6

GLOBAL ENERGY TRENDS 6

REGULATORY CONTEXT 9

VALUATION PRINCIPLES10

ELECTRICITY GENERATION IN IBERIA 13

LONG - TERM CONTRACTED GENERATION14

LIBERALISED GENERATION (EXCLUDING WIND AND SOLAR) 16

ELECTRICITY SUPPLY IN IBERIA21

ELECTRICITY DISTRIBUTION IN IBERIA23

GAS IN IBERIA 26

BRAZILIAN OPERATIONS 28

GENERATION AND SUPPLY 28

DISTRIBUTION32

NON-HYDRO RENEWABLES SECTOR33

FINAL CONCLUSIONS34

SUM-OF-THE-PARTS34

SENSITIVE ANALYSIS34

APPENDIX 35

DISCLOSURES AND DISCLAIMER 37


PAGE 337

Generation

Distribution

Supply

Generation

EDP OVERVIEW

COMPANY DESCRIPTION

EDP ndash Energias de Portugal was created in 1976 after the fusion of thirteen

nationalized companies The privatization process began in the year 1997 when

the company made its IPO and since then EDP has been listed in NYSE

Euronext Lisbon

EDP has established itself as a vertically integrated business which owns

diversified operations in major areas of the energy industry The firm has its

business structured in three main operating divisions Iberia EDP Renewables

and EDP Brazil The core business of the company is mainly based in the Iberian

market where EDP operates in the generation distribution and supply of

electricity and supply and distribution of gas The firm also operates around

the world through EDP Renewables which similarly to EDP is listed in NYSE

Euronext Lisbon EDP owns 775 of this company which operations are tied to

the generation of electricity in 11 different countries through the use of renewable

sources of energy such as the wind and the sun Additionally EDP owns 51 of

EDP Brazil which is listed in the New Market of the Stock Exchange of Satildeo Paulo

The firm has operated in this country since 1996 in the segments of generation

supply and distribution of electricity

As it can be seen in figure 2 a large part of the EBITDA generated by EDP in

1Q2015 (euro1017 million) belongs to the regulated (31) and renewables (31)

segments These units have lower exposure to market risk due to the fact that

they operate under a business environment controlled by regulators but they are

subject to risks tied to possible unfavorable decisions taken by these external

regulating entities On the other hand the liberalized segment is exposed to the

market (having a 10 share of the total EBITDA of the company)

Currently EDP is one of the major European energy operators and is the largest

Portuguese industrial group having had a slow but steady growth over the past

years as it can be seen in figure 3

By looking at five of the most used financial ratios to financially evaluate

companies some conclusions can be taken regarding EDP and its ldquoclosest

peers1rdquo i) EDP can be considered an attractive investment since its ROE is within

15-202 but it still has a ROE 10 percentage points lower than the one presented

by Endesa ii) its ability of using assets to generate earnings measured by the

1More information regarding EDPrsquos peers in Appendix 1

2In general financial analysts consider an ROE in 15-20 range to represent attractive levels of investment quality ndash Source Investopedia

Figure 1 Lines of Business

Figure 2 EBITDA Breakdown () ndash 1Q2015

Source Company Data

15

10

31

31

12

-1

LT Contracted GenerationLiberalised Activities IberiaRegulated Networks IberiaWind amp Solar PowerBrazilOther

Table 1 ndash Operating Data

Financial Year 2014

Installed Capacity (MW) 22469

Electricity Distributed (GWh) 79428

Electricity Generation (GWh) 60220

Gas Distributed (GWh) 53846

Clients connected (th) 9894

Employees 11798

Source Company Data

EDP SA

EDP RenewablesIberia EDP Brazil

Generation

Distribution

Supply

Source Company Data


PAGE 437

ROA is below the equivalent ability of its two most direct peers iii) EDP has the

highest EVEBITDA but also the lowest PE

Regarding leverage EDP has defined as one of its strategic goals for the

business cycle beginning in 2014 and ending in 2017 to undergo a financial

deleveraging process so that it is able to improve credit ratios and mitigate

business risk As it can be seen figure 4 shows a commitment to this objective

Despite the focus in improving its credit metrics EDPrsquos ratings attributed by the

three most important global rating agencies havenrsquot still improved significantly

The main reasons that have led these agencies to be reticent in upgrading EDPrsquos

rating are tied to the current tariff deficit in Iberia3

as well as the economic

recession that has affected Portugal and Spain in the past few years

However due to the latest debt policy which was undertaken by the company

EDP has been recently slightly upgraded into an ldquoInvestment Graderdquo status The

cause for the upgrade was also tied to the stabilization of the tariff deficit the

lower likelihood that more regulatory cuts will be needed and the increasing

diversification of the companyrsquos operations

Most of the EDPrsquos debt (72) is in Euros being the rest denominated in foreign

currency This debt allocation creates a dynamic in which a higher foreign

currency appreciation will reduce part of the euro value of the debt

As part of its strategic plan EDP is also basing a great chunk of its future growth

on CO2-free technologies namely wind and hydro As it can be seen in figure 6

the growth capex is mainly focused on wind and hydro Regarding wind and solar

EDPrsquos expansion is focused in markets with solid profitability and attractive

fundamentals The company is expected to expand its capacity at an average

pace of 500MW per year during the period that begins on 2014 and ends in 2017

In Portugal EDP has an ongoing expansion plan in new hydroelectric capacity

3See section ldquoBusiness Frameworkrdquo for further detail on this subject

Figure 3 - EBITDA (million euros)

Source Bloomberg

0

2000

4000

6000

8000

2010 2011 2012 2013 2014

Endesa Iberdrola EDP

Table 2 Financial Ratios ndash Average 2014


ROE 2294 658 1215

ROA 770 253 245

EBITDA Margin 1617 2289 2240

EVEBITDA 848 874 911

PE na 1329 1193

Source Bloomberg

Figure 5 EDP consolidated debt by

currency () ndash 2014

Source Company data

EUR72

PLN1

USD22

BRL5

Figure 4 Credit Metrics

Source Company Data

60 61 60 59 58

17 15 14 1412 11 9 10

0

50

100

2012 2013 2014 2015 1Q15

Leverage FFONet Debt

Table 3 SampP Rating vs Peers

Company Country Rating

EDP Portugal BBB-

Iberdrola Spain BBB

Endesa Spain BBB

EOn Germany A-

EDF France A+

Centrica UK A-

Enel Italy BBB

Source Bloomberg ndash 2015


PAGE 537

Figure 7 Shareholder Structure

Source EDP (update 21-05-2015)

ChinaThree

Gorges(CTG)21

CapitalGroup

Companies Inc

15

Oppidum7

BlackRock Inc

5

SenforaBV4

Remaining

shareholders48

which includes an investment of euro23 billion in 22 GW of new capacity allocated to

this type of power generating assets

SHAREHOLDERS STRUCTURE4

EDPrsquos share capital is composed by a total of 3656537715 shares with a

nominal value of 1euro each Since its inception the companyrsquos shareholder structure

has changed significantly making a transition from a state-owned company to a

company in which the state only has a minority interest In order to reach its

current composition EDP had to undergo 8 privatization phases

Currently the company is mainly owned by foreign investors As of 31 December

2014 only 14 of the company was owned by Portuguese entities and the main

percentage of its shares (34) belonged to European entities (excluding Iberia)

In the most recent times (from 2014 onwards) the biggest changes in EDPrsquos

shareholder structure were related with the Capital Grouprsquos5

participation

increase from 5 in 2013 to 1510 in May 2015 and the sale of Iberdrolarsquos

666 stake in the company (partnership that existed since 1998) The decision

by Iberdrola to decrease its position in EDP follows its discomfort regarding the

ceiling of 5 of voting rights that penalized it during the decade that preceded the

sale of EDPrsquos 2135 by the Portuguese state to CTG

The purchase by CTG occurred in December 2012 and the transaction amounted

to euro27 billion (euro345 per share) The transaction was made at 536

premium to

its share price Subsequent to the purchase EDPrsquos share price increased in the

following two weeks from euro233 to euro240

Strategic Partnership with China Three Gorges

CTG is the largest clean energy group in China As EDP CTG is focusing its

expansion plan on renewable energies which means that there may exist

synergies between the plans of the two coompanies EDP and CTG entered in a

strategic partnership where i) CTG will invest euro2 billion which will be spent on

acquisitions of minority stakes and investments related with renewable projects ii)

find a Chinese financial institution to give a credit facility of euro2 billion to EDP for up

to 20 years iii) develop new growth opportunities Until the present moment CTG

has already committed euro1 billion to investments in renewable energy undertaken

by EDP These investments are tied to hydro in Brazil (Satildeo Manoel Jari and

Cachoeira- Caldeiratildeo) and wind in Portugal (1st block and 2nd block)

4Remaining shareholders include shareholders with ownership lower than 3 such as Grupo BCP+Fundo Pensotildees do Grupo BCP (244) Sonatrach

(238) Qatar Investment authority (227) EDP (Treasury Stock) (062)5

Capital Group is one of the largest investment management companies worldwide with assets around USD 1 trillion6

Bugge Axel 2011 China Three Gorges buys EDP stake for 27 billion euros Reuters

Figure 6 2015E-2017E Capacity Additions

( new MW)

Source Company Data

WindPPA

LatAm5

Windothers

8

WindPPAUSA36

HydroPortug

al47

HydroPPA

Brazil4

Table 4 CTGrsquos Highlights - 2014

Installed GenerationCapacity - Hydro

463 GW

China hydro capacity 15

Hydro projects underconstruction

28 GW

Moodys rating Aa3

Source Moodyrsquos


PAGE 637

Figure 8 Evolution in Iberia

Source IMF World DataBank

-400

-300

-200

-100

000

100

200

300

Portugal

-200

-100

000

100

200

300

Spain

GDP Growth ()

Population Growth ()

BUSINESS FRAMEWORK

Before providing a segment by segment valuation of EDPrsquos activities we will start

by presenting an analysis of the overall market in which EDP operates In order to

perform this analysis we will focus our interest in the macroeconomic environment

surrounding the company and also on the outlook for specific types of energy

which are tied to the operations of EDP This analysis will provide a general

overview which will allow a better understanding of the assumptions used to value

each of the segments

MACROECONOMIC CONTEXT

In order to better understand the evolution of the demand for the energy produced

by EDP it is necessary to start by evaluating the growth of population and also the

growth of GDP in the countries that are most important for EDPrsquos operations

These countries are respectively Portugal Spain and Brazil The United States of

America (USA) may have an important role

related to the consumption of the energy

produced by EDP Renewables and hence

will also be included on our analysis

As it can be seen in the figures 8 and 9 in the

past three years the GDP growth and the

population growth was low for the countries in

consideration which is tied with the financial

crisis that led to the decrease7

in energy

demand

However for the future we expect that this

trend will change its direction as result of the

expected population growth and economic

growth We expect that this increase will

impact positively the energy demand

produced by EDP

GLOBAL ENERGY TRENDS

In order to fully understand the external forces which will drive the demand for the

main types of energy produced by EDP a brief overview of the issues which may

affect the consumption of each of these types of energy will be given In terms of

7Electricity demand in OECD decreased by 49 on a YoY basis in the 1st quarter of 2009 and 35 in Brazil in the same period (Source IEA)

Figure 9 Evolution in America


000050100150200250300350 Brazil

000100200300400 USA

GDP Growth ()



PAGE 737

Figure 11 Evolution of EUA

Source Bloomberg

0

5

10

15

20

25

30

35

eurot

on

CO

2

EDPrsquos installed capacity the types of energy which have a major relevance for

the company are hydro (34) and non-hydro renewables (36) as can be seen

in figure 10 Although the use of energy through nuclear power by EDP being

residual this type of energy is also relevant to the company due to the fact that it

is used by some of its most important competitors Iberdrola and Endesa In this

sense the outlook for this energy is also going to be provided

RENEWABLES SOURCES

Due to the recent awareness of companies in reducing the CO2 emissions EDP

has been focusing a large percentage of its installed capacity mix in renewables

sources of energy However we think that given the low CO2 prices8 the

producers will have fewer incentives to decrease their emissions and hence slow

down the path of emitting lower values of CO2 advocated by the European Union

The sharp decrease in CO2 prices (figure 11) from the past 7 years are the result

of structural surplus of allowances mainly caused by the decrease in demand as

result of the economic crisis In order to solve this problem the European

Commission expects that carbon prices will increase to euro39tC029in 2020 under

the ldquocost efficientrdquo scenario for meeting the 2020 targets We expect that this

increase in CO2 prices will lead the companies to increase its installed capacity in

renewable sources of energy In this sense we think that the supply of this type of

energy will increase and EDP is no exception since it is now focusing most of its

future growth in hydro and wind as will be explained further in detail in the next

sections

Despite the clear environmental advantage of this type of energy the problem is

that they are highly dependent on weather conditions One cannot be indifferent to

the significant drought that has been affecting Brazil for the past few months

already considered the worst that the country is facing in 84 years The countryrsquos

hydro plants reservoirs levels reached in 2014 the worst index since the 2001rsquo

rationing This scenario negatively impacts the Brazilian electricity sector namely

generators and distributors This scenario has been negatively affecting the EDPrsquos

results as well As it will be thoroughly discussed on the section dedicated to the

valuation of the liberalized activities this draught has a negative effect on the load

factors10

of EDP which will lead to an increase in the production costs of this

energy and penalize EDPrsquos sales However we think that this is a unique

8The CO2 prices are represented by EU Allowances which is carbon credit or pollution permits traded in the EU Emissions Trading Scheme (ETS) Each

EUA represents one ton of CO2 that the holder is allowed to emit9

ldquoCutting Carbon in Europe ndash The 2020 plans and the future of EU ETSrdquo ndash Carbon Trust ndash page 22

10ܨܮ =

ௐ

ெ ௐ lowastଷହlowastଶସ Load factor is a measure of energy efficiency since it measures the percentage of real production over the maximum demand

(peak load) over a period

Figure 10 EDPrsquos Installed Capacity () -

2014

Source Company Data

Hydro34

Coal12

Cogeneration

0

CCGT17

Nuclear

1

Non-hydrorenewables36


PAGE 837

Figure 13 EDPrsquos evolution of Electricity Generation

using CCGT

Source Company Data

0

1000

2000

3000

4000

5000

6000

7000

8000

20072008200920102011201220132014

GW

h

Spain Portugal

Figure 12 Global Coal demand by region

Source World Energy OutlookIEA2014

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2010 2015 2020 2025 2030 2035

MT

oe

EU USA China

India Others World

situation and we think that will not perpetuate hence the effect in EDPrsquos results

are short-term

COAL

The growth in the global demand for coal has been experiencing a deceleration

which has been essentially caused by lower gas prices that were originated by the

revolution of shale gas (explained in detail below) This revolution led to a

decrease in the use of coal in the United States (the second largest consumer in

the world) and originated a surplus of gas in Europe As it can be seen in figure 12

it is forecasted that the demand for coal will continue to decelerate until 2040

After observing the figure it is possible to conclude that the decrease in demand

for coal is also going to exist in Portugal and Spain

The fact that the demand for coal is going to decrease can lead us to conclude

that the energy produced through the use of this source is going to slowly lose

relevance as other sources of power such as gas and renewable energies will

continue to gain importance However this loss of relevance is going to happen

slower than expected in Europe due to the fact that currently the prices of coal

are decreasing (mainly as a result of the decrease in its demand)

NATURAL GAS

Regarding natural gas despite the fact that there are prospects of an increase11

in

its demand at a global level the same cannot be said for Europe The increase in

the production of natural gas that has been observed during the last decade and

which has led to a decrease in its price and consequent increase in popularity is

being caused by the use of new technologies and by continuous drilling in shale12

In Europe the demand for natural gas is not evolving as positively as expected

due the fragile economic situation of this continent and to the growth in the use of

renewable energies As it can be seen in figure 13 the decrease in Europe follows

the same trend of EDPrsquos generation of electricity using combined cycle and

natural gas plants

NUCLEAR

Despite EDPrsquos very low installed capacity in this type of energy (1) this is one of

the energy sources which provide the highest load factors (figure 14) since

nuclear power plants only stop its operations for operating maintenance

11At a global level the demand for natural gas is expected to increase more than 50 in the next few decades according to ldquoWorld Energy Outlookrdquo

International Energy Agency 12th November 201412

Drilling in shale takes advantage of large concentrations of liquid natural gas and crude oil that exist on this rock and which have a higher energy value

compared to dry natural gas


PAGE 937

Figure 15 Crude Oil Futures (USDbbl)

Source Investing

000

2000

4000

6000

8000

10000

12000

14000

16000

fev-

08

ou

t-08

jun

-09

fev-

10

ou

t-10

jun

-11

fev-

12

ou

t-12

jun

-13

fev-

14

ou

t-14

Figure 14 EDPrsquos Load Factors - 2014

Source Company Data

0 20 40 60 80 100

Hydro

Nuclear

Coal

CCGT

Cogeneration

Renewables

Additionally nuclear and hydro energy sources are the ones which have the

lowest generation costs due to the absence of CO2 emissions

One could say that EDP would benefit if it had more investments made in nuclear

power plants however we think that those investments will not happen Firstly

EDP has already committed a substantial amount of funds to the expansion in

hydro power plants and a strategy shift does not look likely Secondly the cost of

producing nuclear energy may be about to rise as regulators are turning their

attention to the possible environmental consequences of producing this type of

energy (such as the ones that resulted from the accident at Fukushima)

OIL

In the most recent times the oil market has been changing due to the volatility that

social and political turmoil in the MENA region has created Recent events in

countries situated in this geographical area have created unstable geopolitical

issues which may at any moment cause the price of the petroleum to rise

However in the most recent months Brent prices have been decreasing13

and

have inclusively reached the levels that were only verified in 2009

It is impossible to forecast if the decrease in Brent prices caused by the decision

of OPEC will persist in the near future However such low prices are definitely

going to stimulate the demand for this source of energy and will probably

decelerate the current shift into cheaper and less polluting sources of energy

(negative effect on the demand natural gas)

REGULATORY CONTEXT

TARIFF DEFICIT

The major regulatory changes that are being made in the energy sector are

related with the electricity tariff deficit14

The gap has been increasing since

demand has remained flatdecreasing (lower revenues) and the tariffs have not

been sufficient to cover the costs (as decided by the governments not to increase

them) In 2013 Spain and Portugal faced a cumulative tariff deficit reaching 3 of

their GDP and the economic crisis contributed to aggravate the situation

13The decrease has happened after OPECrsquos decision (in November of 2014) to sustain a production of 30 million barrels a day despite the oversupply of

this fossil fuel14

Electricity tariff deficit emerged due to consumer tariffs being set below the corresponding costs borne by the energy companies

Figure 16 Evolution of electricity tariff deficit in Spain

Source European Comission

-18

-8

2

12

22 euro Billion

Regulated costs Revenues (primarily access tariffs) Tariff deficit

Figure 17 Evolution of electricity tariff deficit in Portugal


0

05

1

15

2007 2008 2009 2010 2011 2012 2013 est

euro Billion


PAGE 1037

Figure 18 The largest producers of C02

emissions worldwide in 2014 ndash ( of global C02

emission)

Source Statisca

0 5 10 15 20 25

ChinaUSAIndia

RussiaBrazilJapan

IndonesiaGermany

KoreaCanada

Iran

Since EDP has its core business in Portugal and Spain changes in the regulatory

framework will impact EDPrsquos results In fact in recent years the introduction of

several packages and modifications of the revenue model (cuts in remuneration

rate decrease in acceptable costs etc) have impacted the company particularly

in Portugal (as a result of EFAP15

) and Spain (due to large imbalance of the tariff

deficit) We think that this problem will continue to be relevant in the near future

However its impact will decrease as a result of the gradual stabilization of the

macroeconomic environment in Iberia and reduction of the tariff deficit in this area

CO2 Emissions

The governments of several countries have been gaining more awareness16

of the

impacts that the generation of energy from fossil fuels have in the environment

Despite the positive intentions of some governors there are still countries that

refuse to ratify the Kyoto Protocol and refuse to commit to decrease its CO2

emissions On those countries are China EUA and India and this can be

considered a serious problem since these countries are the ones with the highest

percentage of global CO2 emissions as can be seen in figure 18 To add to this

problem there are now countries that once belonged to the Kyoto Protocol which

are leaving now such as Canada which came out very recently Despite the

intention of the countries to achieve the goals proposed and despite the prices

imposed to those countries that pollute it seems this is not being enough to

reduce the pollution generation by CO2 emissions (table 5)

The non-ratification with the established norms and the increase of CO2

emissions will lead to an increase of penalties imposed in the future which will

harm companies and countries that use polluting sources of energy

VALUATION PRINCIPLES

In order to determine the target price of EDPrsquos shares for the year-end of 2015 it

was used the sum-of-the-parts (SOTP) approach which has the ability to

effectively take into account the fact that there exist different levels of risk inherent

to each segment operated by the company Besides the valuation that was

performed to the operating segments which will be described below it was also

considered that there were adjustments relative to the commercial activities that

exist between the subsidiaries of the group (such as sales of one segment of EDP

to other different segment) which had to be eliminated These adjustments were

15EFAP ndash Economic and Financial Assistance Program that was agreed between Portuguese authorities and the European Union and International

Monetary Fund (IMF) in May 201116

For example in September of 2014 the Secretary-General of the United Nations held a summit named ldquoUN Climate Summitrdquo where he invited global

leaders from various Governments corporate businesses and other members of civil society to discuss the measures that can be taken in order to keepglobal temperatures controlled and reduce the value of harmful emissions

Table 5 - Evolution of Co2 emission

(Thousands kt)

2009 2010 Change

China 7692 8287 8

India 1982 2009 1

USA 5312 5433 2

Russia 1574 1741 11

Germany 732 745 2

Brazil 367 420 14

Japan 1101 1171 6

Source The World Bank


PAGE 1137

Figure 19 Cost of equity

Source Analystrsquos estimates

696 694632 631

1094

000

200

400

600

800

1000

1200

LiberalizedPT

RegulatedPT

BrazilianOp

allocated to a segment named ldquoholding and other operating adjustmentsrdquo which

also encompasses the activities of the holding firm (EDP SA)

The valuation method used to value the operating segments was the Discounted

Free Cash Flow (DCF) which takes into consideration the future operating free

cash flows that will be received by the firm and discounts them at an appropriate

discount rate The discount rate used was the weighted average cost of capital

(WACC17

) which reflects the opportunity cost that EDPrsquo bondholders and

shareholders will incur weighted by the proportion of the enterprise value that

each of these groups own The only segment in which this approach was not

used was the segment exclusively tied to renewable energies The value of EDP

Renewables was obtained by directly observing its current market capitalization

Regarding the currency in which all the cash flows are expressed we assumed it

to be the euro For the operations in Brazil the estimates of future cash flows

were initially performed in Brazilian Reals due to the fact that the information

available to be analyzed was all denominated in local currency After performing

the estimates and before discounting the future cash flows obtained we converted

them into euros Future FX rates were estimated by using the relative purchasing

power parity principle18

and IMF estimates (see Appendix 2)

In order to estimate the cost of equity (figure 19) inherent to each segment we

used the capital asset pricing model (CAPM)19

The market risk premium which

was used in the performed computations was the same for all the segments and

corresponds to 52720

(this value was taken from a recent empirical study) For

the risk-free rate which measures the highest return possible to be obtained by

EDPrsquos investors in the absence of default and reinvestment risk we considered

the rate yielded by German 10-year government bonds It is important to mention

that instead of using a spot rate for the yield of these bonds it was used a rate

equal to the average of the values observed in the last 4 years Recently these

bonds have registered the lowest historical yields not so much due to their risk

profile but more because of their relative safety when compared to other

European bonds Fundamentally we believe that the recent sovereign debt crisis

has led investors to lose confidence on economies located on the periphery of

Europe which led to a consequent ldquoflight to qualityrdquo in this case a shift of funds

into German bonds The fact that in the most recent months the ECB has

resorted to the implementation of unconventional monetary policies in order to

17 ܥܥܣ =

ାாlowast ௗݎ lowast (1 minus (ݐ +

ா

ାாlowast ݎ

18RPPP formula in this caseܮܤܧ௧= ൬

ଵାగಳ()

ଵାగುೠ()൰lowast ௧ܮܤܧ ଵ

19Capital Asset Pricing Model ܯܣܥ = ݎ + ߚ lowast ܯ

20Aswath Damodaran - Implied ERP on May 1 2015


PAGE 1237

Figure 20 Segment Beta

Source Analyst estimates

000 050 100

Generation andSupply - Iberia

Regulated -Iberia

BrazilianOperations

address the threat of deflation has also lead to further distortions on the sovereign

debt yields including the yields of German bonds The use of an average rate with

a 4 year timespan mitigates the effect of these two events

The risk free rate used to compute the cost of equity was the same for all of the

companyrsquos segments since all cash flows are denominated in euros However for

the segments that are tied to operations in Brazil we needed to take into

consideration the fact that there exists a difference in inflation which is

considerably higher in this country when compared to Europe In this sense a

country risk premium (CRP) of 28521

was added to the risk free rate of

segments located in Brazil

In order to estimate the betas we calculated an individual beta for each of EDPrsquos

different segments based on the average of the unlevered betas of comparable

firms22

operating in similar conditions The risk free rate chosen for the

regressions that were ran in order to find the unlevered beta of comparable firms

was once again the yield of German 10-year government bonds and the index

used to recreate the global market was the MSCI Europe which effectively

captures a large and middle capitalization representation across 15 stock markets

located in Europe

For the regulated activities of EDP we used comparables that operate essentially

in the distribution and transmission segment as the systematic risk can be

considered similar For the generation and supply segments we took into

consideration comparables in which a large part of the income is generated from

operations related with these two types of activities The variables used to

compute the cost of equity and cost of debt of the segment named ldquoHolding and

other operating segmentsrdquo were the same ones used in the Iberia segment since

this segment is the one where the intracompany commercial activities are more

relevant As it can be seen in figure 20 the regulated beta is the lowest of the

betas calculated probably due to its lower dependence on the economic cycle

and external free market forces

Regarding EDPrsquos target capital structure23

we assumed that in the long-run it

will tend to be equal to the structure used by comparable firms which is 084

Concerning the cost of debt24

corporate ratings given by the major credit

analysts (table 6) were considered in order to help determine the market

expectation of EDPrsquos implied cost of debt EDPrsquos current credit rating yields an

21Aswath Damodaran ndash ldquoCountry Default Spreads and Risk Premiums ndash January 2015

22Comparalable companies in i) liberalized segment in Iberia Enel Centrica EDF EON GDF Suez RWE Endesa Gas Natural e Iberdrola ii) regulated

segment in Iberia Enagas REE REN National Grid Snam Terna iii) Brazilian operations CIA Paranaense CIA Energeacutetica MG CPFL Energia TractebelEnergia CIA Energeacutetica SP23

Measured in market values24ௗݎ = ݕ minus 1)ݔܦ minus )

Table 6 EDPrsquos credit rating

LT Rating Last Update

SampP BB+ 30-01-2015

Moodys Baa3 13-02-3015

Fitch BBB- 19-01-2015

Source Credit agenciesrsquo websites


PAGE 1337

Table 7 Cost of debt

Portugal Spain Brazil

Cost of

debt

614 614 614

Corporate

tax

2950 3000 3400

After-tax

cost of debt

433 430 405


Figure 21 Estimated nominal WACC

(implicit currency ndash EUR)


576 574 541 539

779

000100200300400500600700800900

Figure 22 Electricity Generation in Iberia (GWh)in - 2014

Source Company Data

3

5245

0

10

20

30

40

50

60

PPACMEC

SpecialRegime

OrdinaryRegime

OrdinaryRegime

LT Contracted Generation LiberalisedIberia

equivalent probability of default of 038 and a recovery rate equal to 6220

according to Moodyrsquos25

In order to estimate the implicit yield we used as a risk-

free rate the Portuguese 10 year bond which is currently equal to 25726

for all

the segments and the average of the last 3 years of EDPrsquos 10Y CDS rates which

were added to the risk-free rate Through the use of the implicit yield probability of

default and recovery rate it was possible to compute the cost of debt In order to

compute the after tax cost of debt for the different segments we took into

consideration each countriesrsquo tax rate which is presented in table 7

Regarding the growth rate of the terminal value (g) of each of the computed

cash flows we think that EDP will have different long-term growths across each

region However one common principle which we know about this variable is that

it will have to be anchored between the long term inflation and real GDP growth27

of the country in which the subsidiary operates If the segment is growing at a

perpetuity growth rate lower than the long term inflation than it is going to be

consistently destroying its value and eventually lead the subsidiary into

bankruptcy However if the segment is growing in perpetuity at a pace which is

higher than the real GDP growth of the country it will end up overtaking the

countryrsquos economy in terms of size and value which also isnrsquot minimally realistic

Consequently for the growth rate of operations situated in Iberia it was

considered the Eurozone target inflation which is 2 and for the Brazilian

operations it was considered the long term inflation estimated by IMF equal to

475 (see Appendix 2)

The estimated nominal weighted average cost of capital derived for each segment

through the use of the information depicted above can be consulted on figure 21

ELECTRICITY GENERATION IN IBERIA

The electricity generation segment can be divided into two different parts the

ordinary regime (PRO) and the special regime (PRE) Under the ordinary regime

EDP sells electricity in the free market On the other hand the market tied to the

special regime generation works through bilateral agreements between producers

and last resort suppliers Besides the division in ordinary and special regime the

electricity generation segment is also divided in long term contracted generation

and liberalised generation (figure 22) which will both be extensively analysed in

the following sections

25Sharon Ou February 2011Corporate Default and Recovery Rates - 1920-2010 Moodyrsquos Investors Service

26Bloomberg at 29-05-2015

27 ܦܩ ௪௧ = ൫1 + ܦܩ ௪௧൯lowast (1 + ݐ )൧minus 1

Table 8 EDPrsquos type of regimes ndash 2014

GWh share

Ordinary Regime inIberia

32223 54

Special Regime inIberia

997 2

Total EDPsElectricityGeneration

60220 100

Source Company Data


PAGE 1437

Figure 23

Source Company Data

Figure 25 ndash Gross profit stability assured until

2017 (euro Million)

Source Company Data

0

200

400

600

800

1000

LONG - TERM CONTRACTED GENERATION

During many years the generation of energy was performed under a strict

regulatory framework which was characterized by the existence PPAs28

These

agreements allowed the generation companies to have a steady flow of income

regardless of the volume of electricity which was produced However in the end of

2007 as the process of energy markets liberalisation began to accelerate it was

determined that the use of PPAs should come to an end In order to compensate

the generators the Portuguese Government decided to create a new type of

contract named CMEC mechanism29

(see figure 23)

As the concessions working under this segment end the power plants will be

transferred to the liberalised generation segment As it can be seen in figure 24 in

the past years the installed capacity in this segment has already started

diminishing and in 2027 it will be residual (see more detail regarding the

concession power plants in Appendix 3)

As it has been showed in the description of the compensation schemes 2017 is

the final period in which there is going to be an update of the variables used to

calculate the remuneration generated by them This means that between this year

and 2027 there will not exist any revisions In this sense the remuneration

scheme of this segment is going to be stable between 2017 and 2027 and 2017 is

going to be a crucial year in terms of remuneration determination The base

CMEC has been revised downwards in euro13 million30

changing the annual base

CMEC from euro81 million to euro68 million from 2013 to 2027 as regards to the

Memorandum of Understanding between IMF and the Portuguese authorities

This segment also includes the special regime generation This regime

corresponds to the generation of electricity through biomass mini-hydro and

28PPA ndash Power Purchase Agreement

29CMEC ndash Cost with maintenance of contractual equilibrium

30EDP Investor Day 2012 The decision was made since IMF believed that the market prices used in the contracts were too optimistic and did not reflect

real market conditions

Goal

CMEC Mechanism

NPV of PPA is maintained

2 compensation schemes

Annual GP revisedfrom 2007-2017

Base CMEC=NPVPPAndashNPV Market

GP in mkt gtgtForecasted ne Reality

GP lt Contractrsquosthreshold -gtReimbursmentGP gt Contractrsquosthreshold -gtPayment

In 2007

GP will be stable2007-2017 however

No more adjustments tomkt from 2017 onwards

euro08 billion

To be paid by allconsumers until 2027

In 2017

update of marketforecasts until 2027

Recalculation ofadditional CMEC

until 2027

Figure 24 PPACMEC Evolution of Installed Capacity (MW) from 2007-2027

Source ldquoPPAsCMECs Legislation Packagerdquo Lisbon February 16th 2007

0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31

The regulatory framework which currently exists allows this type

of operators to sell electricity to last recourse suppliers that are obliged to

purchase electricity from them and also to other suppliers in the market As it can

be seen in figure 26 this is not the sub-segment that gives the highest value

however it does not destroy it too Hence we think that it is not in PRE that EDP

will tend to focus its growth

As presented in ldquoEDP Overviewrdquo the EBITDA percentage of this segment was

15 in 1Q2015 but will decrease as the concessions will be transferred to other

segment as will be shown below

VALUATION

As it has already been mentioned in the previous section as the concession

contracts of the power plants operating end they will be sequentially transferred to

the liberalized generation segment However for valuation purposes of the

segment it was assumed that from 2017 onwards all the concessions will be

transferred to the liberalized segment (since there will not exist any additional

revisions of market conditions related to CMEC contracts) Since these

concessions would still be receiving funds related with the CMEC base between

2017 and 2027 these funds were taken into account in the computation of the

segmentrsquos value

The gross profit considered for the CMECPPA sub-segment was the one

presented in figure 24 until 2017 and the base CMEC mentioned above until 2027

From 2017 onwards the regulated generation segment will only be represented

by the special regime In order to estimate the gross profit of this segment we

took into consideration future load factors and installed capacity so that future

Gross ProfitGWh could be estimated Regarding the load factors we believe that

there is not any significant external factor which may lead them to change

31Biomass energy by converting biomass into liquid fuels to produce combustible gases or direct combustion produces heat Cogeneration uses the heat

of motor and power plants to generate electricity

Figure 26 Evolution of some metrics of the LT Contracted Generation segment

Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)

CMECPPA (euroM) PRE (euroM) CMECPPA (GWh) PRE (GWh)

From 2027 onwards only special

regime will belong to this segment


PAGE 1637

Figure 27 ndash Evolution Gross profit with operatingcosts (euroM)


-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200

Gross Profit Operating costs

Figure 28

Price is set

Absorve 1st PRE Production

MIBELIberian Electricity Market

Producers in Iberia sell in the Iberian pool

Total Iberian demand

Total Demand satisfied

YES NO

Energy sold ordered by

marginal cost

Demand = Supply

Price is set

Source Company Data

significantly due to the weight that PRE represents in EDP For Gross ProfitGWh

we estimated them to be inflation updated for the future

Regarding the operating costs32

of the segment since we are estimating them to

be a percentage of the gross profit of the period we assume that they will

decrease from 2017 onwards following the transference of power plants from this

segment to the liberalized one (figure 27)

Regarding the level of capex we estimated it to be essentially related to

maintenance investments which in the future will be lower as the installed

capacity becomes lower (due to the power plants transference) Additionally there

will be disinvestments that correspond to ldquosalesrdquo to the liberalized segment that

can be seen in detail in the segment valuation below

Valuation 1 ndash Long-Term Contracted Generation Analystrsquos estimates

Millions of Euros 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2028 Total EV 3001

NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576

(+) Depreciation 214 203 210 213 174 157 148 120 114 2g Op Value

200

Operating Gross Cash Flow 714 683 657 605 516 510 453 415 115 44 768(-) Capex -96 -59 -35 352 -46 206 -40 1284 -2

Disinvestment Capex 0 0 9 390 0 252 0 1323 0

Maintenance Capex -96 -59 -44 -38 -46 -46 -40 -40 -2

(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0

Operating Free Cash Flow 400 678 550 822 464 627 375 1200 42

LIBERALISED GENERATION (EXCLUDING WIND AND SOLAR)

Out of all of EDPrsquos segments the liberalized generation of electricity in Iberia

excluding wind and solar is the one which has the highest growth in installed

capacity This growth is mainly focused on hydro-related projects and it is going to

result on an installed capacity increase from 7777 MW in 2014 to 13705MW in

2018 in which hydro represents 52 Looking at other segments of EDP it is

possible to conclude that although Brazil has the second highest installed capacity

(2158MW in 2014) it is still not close from reaching the Iberia liberalized

generation installed capacity One of the main ideas behind the focus that is being

given to hydro is to reap the benefits from low dependence on oil prices and also

CO2 emissions as already mentioned in the ldquoBusiness Frameworkrdquo section

In the liberalized market the price which producers receive is equal to a residual

price and not an average market price (see figure 28)

As it can be seen in figure 29 in the past three years variables costs33

have been

decreasing essentially due to decrease in generation costs34

which have

decrease at a rate of 20 a year The major energy source that has led to this

decrease is the hydro generation costs that were euro26MWh followed directly by

32In this report when mentioning operating costs we are referring to supplied and services personnel costs costs with social benefits and other operating

costs (revenues)33

Variable costs include fuel costs CO2 costs hedging results system costs34

Generation costs include fuel costs CO2 emissions and hedging results Hedging results are gains from hedging strategies of EDP


PAGE 1737

Figure 31 - Market shares in the IberianPeninsula ndash Electricity Generation

Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012

low nuclear generation costs at euro48MWh The nuclear and hydro energy sources

are the ones which have the lowest generation costs due to the absence of CO2

emissions These two sources of energy can be considered the most profitable

ones contrary to CCGT and coal which generation costs in 2014 were

euro1067MWh and euro38MWh respectively Hence if there is still demand to be

satisfied in the pool they are the last sources of energy to be called into

Additionally it can be concluded that the average selling price35

of energy has

been regular which means that the gross profit has mainly been influenced by the

generation costs We will put more emphasis to this gross profit component

Although EDP is currently increasing the installed capacity which is using to

produce hydro energy it is vital to analyze the load factor of this source of energy

and compare it to load factor of other types of energy in order to understand the

extent to which this capacity expansion can benefit the company This variable

varies depending on the amount of load and the amount of time that the

generator is operating and it can be used as proxy to measure efficiency and

generation costs

In order to understand how EDPrsquos investment in hydro can benefit the company

(or not) in the near future we think that it is necessary to make a comparison of

load factors with its peers of the Iberian liberalized generation segment In order to

choose those peers we looked for companies with similar relevance and market

share in Iberia The two chosen companies were Endesa and Iberdrola (figure 31)

In the figures that are shown below (figure 32 and 33) it can be observed each

companyrsquos distribution of installed capacity over the different types of energy

sources and also the value of the load factors for each type of energy Only data

from Portugal and Spain electricity generation was taken into consideration both

for EDP and its peers since only the factors from the Iberia area can influence the

generation of electricity of EDP in this area

35Average selling price includes selling price ancillary services and others

Figure 29 ndash Evolution of Gross Profit and its Components (euroMWh)

Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014

Variable Cost Average Price

Electricity Gross Profit Generation Output

Electricity purchases Retail - final clients

Wholesale market

Figure 30 Generation Costs

Source Company Data

0

20

40

60

80

100

2012 2013 2014

CCGT Coal Hydro Nuclear


PAGE 1837

Figure 34 LCoE at 10 discount rate

Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum

Figure 35 Liberalized Generation in Iberia

Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)

LT Contr Gen (euroM)

Lib Iberia (euroM)

As it can be seen in the figure the energy source which has the highest load

factor (independently of the installed capacity) is the energy produced in nuclear

power plants As it was already mentioned this is due to the fact that nuclear

power plants only stop its operations for operating maintenance On the other

hand despite the high percentage of installed capacity of Iberdrola and EDP in

hydro the load factor achieved in 2014 was approximately 25 mainly due to the

dependence of these plants on weather conditions

As already mentioned EDP is focusing its growth in hydro capacity as it is going

to be analyzed below in the valuation part In order to conclude if EDPrsquos plan of

future generation mix is optimal we will make an analysis by looking at the

levelized cost of energy (LCoE)36

which can be used to conclude regarding future

investments (figure 34) One could conclude looking at the results in the figure that

coal gas and nuclear are energy sources that EDP should invest into however

one cannot forget that the estimations are very sensitive to pricesrsquo evolution (fuel

inputs) and its components Hence coal is the energy source that it is more

sensitive to CO2 and oil prices followed by gas Consequently the energy source

that will be optimal to use will vary over time However as it is going to be

explained later we do not think that oil prices will decrease more than what they

have already reached as well as CO2 costs will increase In this perspective we

think that in the future EDPrsquos growth target in hydro technology will impact

positively its results

Finally we can see that the liberalized generation segment is still below LT

contracted generation segmentrsquos EBITDA as well in electricity generation (figure

35) however it can also be seen the effect of transference of assets from one

36LCoE give us the average unit costMWh that results in the ration between the PV of the total costs of a generation plant over the PV of the amount of

electricity that is expected to the power plant to generate over its lifetime

Figure 33 ndash Iberian Load Factors of EDP and its Peers (2014) ndash Percentage

Source Companies Data

0

10

20

30

40

50

60

70

80

90

100

Iberdrola Endesa EDP

Figure 32 Iberian Installed Capacity (MW) of EDP and its Peers (2013 and

2014) ndash IEnergy Source Percentage


0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937

Figure 36 Forecast of Crude Oil prices

Source ldquoCommodity Markets Outlook ndash

World Bank Group ndash January 2015

0

20

40

60

80

100

120

$b

bl

Figure 37 EDPrsquos CCGT energy source

Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh

Load factor Generation cost

CO2 costs Oil price

Figure 38 EDPrsquos Coal energy source

Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price

segment to the other as the electricity generation and EBITDA is increasing in the

liberalized segment and will continue to increase in the future as will be shown

below

VALUATION

In order to make a valuation of EDPrsquos liberalized generation segment we need to

take into consideration the following key drivers load factors generation costs

(euroMWh) market selling price (euroMWh) future capex (both expansion and

maintenance capex) and operating costs

We will start by estimating generation costs since the results of the load factors will

depend on the hierarchy of the various energy sources Firstly we think that hydro

generation costs will only depend on inflation since this energy source is CO2 free

and does not depend on oil prices We considered the target inflation for the

Eurozone ie 2 Regarding nuclear generation costs we assumed not only that

they will increase with inflation but as well as with an additional penalty in the future

following the Fukushima event in 2011 (as it was already mentioned before) It is

very likely that in the near future the Spanish government intends to include

regulatory requirements for nuclear safety which we estimate to negatively affect

the cost of electricity generated from nuclear sources in 737

Regarding coal and CCGT generation costs we think that the factors that will

influence this energy sources are the CO2 prices and oil costs As EC predicts we

expect carbon prices to rise to euro39tCO238

until 2028 as already mentioned

Regarding oil prices we took into consideration the percentage change in the

forecasts of crude oil average spot ($bbl) (see figure 36) As it can be seen in

figures 37 and 38 with the decrease in CO2 costs and oil prices the coalrsquos

generation costs increased slowly and its load factors also increased By contrast

there was a sharp decrease in CCGTrsquos load factors and sharp increase in its

generation costs As we believe that oil and CO2 costs will increase we believe that

this tendency will reverse hence we expect an increase in the load factors of CCGT

and a decrease in the ones of coal compared from the past

It is also necessary not only to look at the value of this variable for different types of

energy sources but also to analyze new investments from other companies from the

sector As it was already seen the energy source which creates a disadvantage for

EDP is the nuclear energy Although this energy has the highest load factor EDP

currently almost does not produce it which means that if in the future its

competitors increase the use of this type of energy they could create a negative

37Source ldquoSpain Power Report ndash Q2 2015rdquo ndash Business Monitor International Page 23

38ldquoCutting Carbon in Europe ndash The 2020 plans and the future of EU ETSrdquo ndash Carbon Trust ndash page 22


PAGE 2037

Table 9 EDPrsquos Hydroelectric structure

Power

plantConstr Start MW

Capex

(euroM)

New hydro power plant

Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370

Repowering of existing hydro plants

Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200

Source info from wwwa-nossa-

energiaedppt

Figure 39 Segmentrsquos evolution


0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh

impact for EDP After analyzing the investment plans of Iberdrola and Endesa for

the following years we have come to the conclusion that neither of this companies

intends to change the current profile of their installed capacity in Iberia Iberdrola

ended the ongoing projects in Spain and will be focusing its future growth in Mexico

namely in the renewable sector Likewise Endesa is now channeling its growth

investments into Latin America

Regarding hydro and nuclear load factors we believe that they will not have a

significant variation in the future In what concerns nuclear energy due its low

generation costs and high priority in the Iberian pool a load factor of 88 similar to

the one which was observed in the past was considered Given the fact that in the

near future there are not relevant climatic changes predicted relatively to the

weather in Iberia for hydro it was considered a load factor of 25 also in line with

what was observed in the past

As already mentioned in the ldquoMacroeconomic Contextrdquo section Spain and Portugal

will experience an increase in its GDP and hence we think that for the Iberia market

selling price increase will be aligned with the target inflation for Eurozone ie 2

The value of capex in the future was determined by taking into consideration the

funds needed to construct new hydro plants plus the repowering and maintenance

needs of older plants EDP recently entered into 5 hydro projects in order to

increase its hydro installed capacity (See table 9)

Taking into consideration information relative to past hydro projects and data taken

from peers we reached an average capex of euro259MW for building new hydro

plants and euro070MW for the repowering of existing ones Additionally we

estimated an average time for concluding the projects of 5 years which results on a

total capex of euro1972 million different from the euro1731 million initially expected by

EDP Since the projects are in its final stage we needed to take into consideration

the money already spent in them which is equal to euro1825 million by 2014 This

means that a residual annual expansion capex of euro74 million is going to be spent in

2015 and 2016 The maintenance capex was calculated by taking into consideration

past costs of installed capacity increases or decreases Additionally in 2018 when

all the assets from the PPACMEC system enter in the liberalized generation

segment we think that EDP will need to make an external maintenance capex in

order to compensate for the seniority of most of the hydroelectric power plants (see

Appendix 3) A hydroelectric power plant can have a useful life between 30 to 75

years39

We assumed that power plants with more than 35 years will be subject to

an extra capex that have the same characteristics of repowering a hydro plant This

means that there is going to exist an annual capex of euro207 million until 2022 From

39EDPrsquos Annual Report


PAGE 2137

2022 onwards we estimate that maintenance capex will meet the annual

depreciation

Finally we estimate the operating costs to increase accordingly to the gross profit

except for personnel costs which are going to be dependent on the number of

employees As the gross profit is somehow dependent on the installed capacity the

operating costs are evolving according to the unitrsquos total installed capacity

Valuation 2 ndash Liberalized Iberia Analystrsquos estimates


NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200

Operating Gross Cash Flow 328 217 249 307 312 357 425 438 652 797 OpValue 1746

(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396

New hydro and repowering -412 -442 -485 -503 -74 -74 0 0 0

Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10

Operating Free Cash Flow -373 -91 -202 -825 124 -96 318 -1191 391

ELECTRICITY SUPPLY IN IBERIA

EDPrsquos segment related with the supply of electricity is divided in two different sub-

-segments last resource supply (LRS) which is regulated and liberalized supply

These operations are made both in Portugal and Spain Figures 40 and 41 show

the market share of the most important electricity supplying companies in Spain

and Portugal respectively As it can be seen in Spain EDP has the fifth largest

market share and in Portugal it is the market leader followed by Endesa and

Iberdrola

In figure 42 it is possible to observe that out of the top 4 Iberian electricity

supplying companies EDP is the one in which the value of electricity supplied

under the regulated regime is higher when compared to the value of electricity

supplied to the liberalized market This can be seen as a direct result of the fact

that in Portugal the liberalization process is in an earlier stage when compared to

Spain However the supply of energy under the LRS regime will not continue after

the end of 2015 which means that in the near future the value of electricity

supplied under this regime will become residual

The fact that the liberalization process is in a different stage in Portugal and Spain

is accurately illustrated by figure 43

Figure 42 Iberian supply of electricity (liberalized vs regulated) amongEDP and its competitors - 2013

Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa

Other Electricity Free Retail

Electricity RegulatedRetail

Figure 41 Market share of electricitysupply ndash Portugal ndash 2014

Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7

Figure 40 Market share of electricitysupply ndash Spain - 2014

Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3

Figure 43 Market Share of electricity supply

Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237

Figure 44 Behavior of electricity sold and of

nordm of clients ndash Portugal

Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014

Volume sold (GWh) Clients (th)


nordm of clients ndash Spain

Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014


Figure 46 Behavior of electricity consumptionwith GDP growth

Source GDP growth (by IMF) Consumptiongrowth(by ldquoSpain Power Report Q2 2015 ndash BMI

-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300

Consumption Net Consumption y-o-y (Electricity)

GDP growth

As it can be observed the market share of EDP in Spain has been fairly stable in

this country for the past 5 years due to the fact that the market is already mature

In contrast in 2010 and 2011 EDPrsquos Portuguese market share suffered a

significant decrease which was caused by the acceleration of the liberalization

process In this country as costumers started to make their transition from the

regulated market to the liberalized one they became much more sensitive to the

price and in many cases opted to change their supplier of electricity

It is interesting to note that the evolution of the number of clients in Spain and

Portugal follows a very similar behavior exhibited by the evolution of volume sold

By observing figures 44 and 45 which shows the evolution of these variables in

the liberalized market it is possible to conclude once again that the supply of

electricity under this regime is considerable more mature in the Spain (less

volatility)

VALUATION

In order to perform the valuation of this segment the following key drivers were

taken into account market share electricity demand growth Gross ProfitMWh

and capex

Regarding the market share electricity supply in Spain has an historic market

share which is close to 10 As it has already been seen the segment in this

country can be considered mature which means that in the future there will not

exist relevant changes on this variable For Portugal although the market share of

EDP has decreased significantly since 2009 we believe that there has been

stabilization around 44 in the past two years which will be maintained in the

future as most of the costumers which wanted to change from EDP to other

operators probably have already done so between 2010 and 2012 (see figure 44)

Concerning electricity demand for the future we can see in figure 46 that the

estimates made for this variable are positively correlated with the GDP growth In

this sense to determine the Portuguese demand for electricity in the future we use

the estimates of GDP growth published by IMF for this country (Appendix 2) We

used these estimates for Portugal due to the fact that it was not possible to find

reliable estimates of electricity demand growth in the future Regarding Spain the

future demand for electricity was taken from a report published by Business

Monitor which analyzes the future electricity consumption in this country

As it has already been mentioned in the future the supply of electricity will be

performed exclusively in the liberalized market where there is price competition

In this sense we think that gross margins as percentage of MWh will be fairly

constant in the future as operators will not have enough bargaining power with

the costumers to increase prices To forecast the gross margins all that was done


PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation

Efficiency factor set

by regulators

Updated each year by aprice cap mechanism

(CPI ndash X)

Allowed Return Controllable costs

Regulated Revenues

Depreciation + OPEXRAB x RoRAB

was to update them to inflation for the future years The gross margins observed

in past periods have been regular and situated around euro12MWh in Portugal and

euro6MWh in Spain

Regarding the Capex we do not expect major investments since this is not a

capital intensive segment and its investments are essentially allocated to devices

used to measure electricity We expect this variable to be represented only by

maintenance capex As it can be seen by the result yielded by the valuation this

segment is the one which has the lowest contribution to EDPrsquos overall value

Valuation 3 ndash Electricity Supply PT Analystrsquos estimates

Millions of Euros 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E Total EV 174

NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200

Operating Gross Cash Flow 29 - 22 18 2 14 22 17 18 19 20 OpValue 045

(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0

Operating Free Cash Flow 33 - 48 - 3 78 9 13 13 6 6



NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1

Operating Free Cash Flow 35 - 82 2 38 5 11 13 12 15

ELECTRICITY DISTRIBUTION IN IBERIA

This segment is responsible for the distribution of electricity under the regulated

market in Portugal and Spain and its impact on EBITDA in 2014 was 19 and 3

respectively In Portugal EDPD40

owns approximately 99 of the electricity

distribution network in the mainland (223523 Km in 2014) and is regulated by

ERSE41

In Spain HC Energiacutea42

owns a network of 23395 Km (data for 2014)

and distributes electricity mainly to Asturias and to a lower length also to Madrid

Valencia Alicante Huesca Zaragoza and Barcelona The regulation of electricity

distribution in this country is performed by CNE43

The remuneration of EDPrsquos distributing activities is dependent on two relevant

factors (see figure 47) The return on the regulatory asset base (RoRAB) is

established by ERSE and CNE and is applied in the assets that EDP employs to

distribute electricity (RAB) The return is established for periods of three years for

Portugal and four years for Spain The most recent regulatory period starts in

2015 and is going to end on 2017 for Portugal and in Spain we are in the middle of

the regulatory period 2013-2016

40EDPD ndash EDP Distribuiccedilatildeo is responsible for electricity distribution in Portugal

41ERSE is responsible for defining the tariffs parameters and prices of electricity while at the same time safeguarding the levels of quality and service

required by DGGE - Direcccedilatildeo Geral de Geoglogia e Energia42

HC Energiacutea is the responsible for the distribution of electricity in the regulated and unregulated market in Spain43

CNE as in the case of ERSE is also responsible for defining the main parameters that rule the distribution activities but in this case for Spain

Figure 47 RAB-based regulatory formula

Source EY Research


PAGE 2437

Figure 48 EDPrsquos controllable operating

costs ndash Electricity Distribution

Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP

Figure 49 Evolution of OPEX

Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM

OPEX controlaacutevel real

OPEX controlaacutevel ERSE

Figure 50 Evolution in Portugal

Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds

Clients Electr Distrib

Figure 51 Evolution in Spain

Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


As can be seen in figure 48 OPEX has been decreasing following the necessity

of both countries to decrease its countryrsquos tariff deficit meaning that they are also

improving in terms of efficiency and productivity In Portugal the company was

able to increase the ratio of electricity distributed per employee (MWh) from

12858 in 2011 to 13144 in 2014 In Spain the same increase was seen (29555

in 2011 to 31214 in 2014) In order to cut the controlled costs of electricity

distribution companies all that the regulator has to do is to define an efficient

factor higher than the CPI Effectively EDPD has been able to reach OPEX very

similar to the ones of published by ERSE (figure 49)

Regarding the growth in the electricity distribution segment we can conclude that

it already reached a significant degree of maturity and as such the customer base

has been somehow stabilizing in the past years and the decrease in the past

years is due to the weak macroeconomic context as can be seen below

Besides the regulated profit EDP has non-regulated operations in this segment

however they represent 1 and 4 of this segment for Portugal and Spain

respectively (table 10)

VALUATION

Although in the previous regulatory period (from 2012 to 2014) the RoRAB for

Portugal was indexed to the 5-year Portuguese CDS so that the disruptions in the

10-year Portuguese bonds caused by the financial crisis could be avoided for the

current regulatory period this is no longer valid The final RoRAB for the new

regulatory period results from a daily average of the 10 year bond yields44

of

Portugal The value of the RoRAB defined is 675 for Portugal Comparing the

RoRAB after tax with our WACC the following differences can be observed (table

44For the year 2015 for example the average is computed between October of 2013 and September of 2014 with a minimum floor at 6 and a maximum

cap at 95

Table 10 ndash Electricity RegulatedGross Profit ndash 2014 (euroM)

PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537

Table 11 Comparison of the ERSE and

Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

Source ERSE and Analystrsquos estimates

11) The major difference between WACCs is in the cost of debt The default

spread assumed for ERSE was an estimation made by Damodaran that takes into

account a theoretical gearing of 55 however we used the average of the past 4

years of EDPrsquos CDS (the same methodology used in the previous regulatory

period) Additionally we considered the effect of probability of default In this

sense we reached a higher WACC after tax compared with the regulator

However as the remuneration rate defined is before tax the RoRAB is higher

than our cost of capital Hence this will lead a fair value of the segment higher

compared to the RAB Despite we do not have consider this hypothesis we think

that ERSE should re-think the way it defines the RoRAB and should apply a

WACC after tax in order to be in accordance with the cost of capital

In Spain the RoRAB is going to be dependent on the 10-year Spanish bond yields

plus a 200 basis point premium which is going to be added between 2014 and

2020 The sum of these two factors is going to yield a value equal to 6545

The estimated RAB for Spain for the period 2013-2016 corresponds to euro830

million46

For Portugal the estimated RAB is euro3013 million and can be consulted

on ERSErsquos report47

As can be seen in the valuation provided below the fair value

is higher than the RAB for both Portugal and Spain

The efficient factor that is going to be applied to Portugal distribution is going to be

equal to 35 in 2015 and 25 in 2016 and 2017 Given the fact that in a report48

published this year by ERSE related with the efficient factor which should be

applied to the electrical energy suppliers it is stated that EDPD has been

increasingly registering costs which are converging to the costs accepted by the

regulator Hence we believe that in the future the efficient factor will decrease to

1 For Spain it was considered an efficient factor of 149

taking into

consideration the information published by CNE The CPI used for the period in

analysis can be seen in the estimates published by the IMF (see Appendix 2)

Since the operations of electricity distribution can be considered a very mature

business there does not exist a major need for investments which means that the

defined Capex is going to be equal to depreciation

45Tthe RoRAB for the previous regulatory period was equal to 8

46We considered as a proxy to RAB the net fixed assets as CNE does not disclose this information

47ldquoProveitos Permitidos e ajustamentos para 2015 das empresas reguladas do sector eleacutetricordquo ndash Dezembro 2014 - ERSE

48ldquoParecer sobre ldquoProposta de Tarifas e Preccedilos para a Energia Eleacutetrica e Outros Serviccedilos em 20 paracircmetros para o periacuteodo de regulaccedilatildeo 2015-2017rdquo -

ERSE49

ldquoInforme 242013 de la CNE sobre la Propuesta de real decreto por el que se establece la metodologiacutea para el caacutelculo de la retribuicioacuten de la actividad

de distrbuicioacuten de energiacutea eleacutectricardquo - CNE

Figure 52 RoRAB around Europe ndashElectricity -2012

() Nominal rate () Real rateSource EY search ERSE CNE

0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637

Figure 53 EDPrsquos coverage in the distribution

segment in Portugal and Spain

Source EDP

Valuation 5 ndash Electricity Distribution PT Analystrsquos estimates


NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5

Operating Free Cash Flow - 158 - 344 - 192 326 250 223 186 185 187

Valuation 6 ndash Electricity Distribution SP Analystrsquos estimates


NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA

The operations of EDP related with gas in Iberia are divided between distribution

which is a completely regulated activity and supply which encompasses regulated

(LRS) and liberalized activities EDP has a relevant presence in the gas sector

through Naturgas in Spain (2nd

largest gas distributor in this country) and through

EDP Gas in Portugal (2nd

largest natural gas distributor in this country)

The remuneration scheme of this segment has a framework that is very similar to

the one which exists in the electricity distribution in which the parameters are

established by ERSE in Portugal and CNE in Spain Due to the high tariff deficit

that for the past years has existed in the Spanish gas sector in 2014 CNE

decided to change the remuneration for the regulated activities50

In Portugal

ERSE published the new regulations for the regulatory period starting in 2013 and

ending in 2016 on June of 2013 Both regulators decided to define a RoRAB for

the current regulatory period equal to 9

In terms of market share it is possible to observe in figure 54 that Gas Natural

Fenosa (which has a core business completely tied to gas) is the market leader in

Iberia followed by Galp EDP Endesa and Iberdrola

Regarding the evolution of EDPrsquos market share in the gas sector both in Portugal

and Spain after observing (figure 55) we can conclude that during the most recent

years it has been stabilizing in both countries This fairly stable behavior for both

Portugal and Spain allied to the fact that the market is now mature has led us to

conclude that EDP is close to reach market share equilibrium in this segment

50The inflation update factor is eliminated from the remuneration allowed revenues are cut and returns are more dependent on demand

Figure 54 Iberian Share of Conventional

Natural Gas Retail (TWh) - 2013

Source Company Data

15 4

7

45

12

17

EndesaIberdrolaEDPGas Natural FenosaGalpOthers


PAGE 2737

Figure 57 Demand evolution for Natural Gas inPortugal

Source PDIRGN 2014-2023 ndash REN ndash Maior2013

0

10

20

30

40

50

60

Figure 56 RoRAB around Europe -Gas -2012


0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()

Figure 58 EDPrsquos Distribution of Gas ndashGross Profit

Source Company Data Analystrsquos estimates

0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION

The key drivers of the segment tied to distribution of gas are the RoRAB RAB

capex and efficient factor Based on the explanations already provided above the

future RoRAB estimated for the operations in Iberia is equal to 9 We estimated

the future RAB for Spain to be the value of the fix assets of the company51

responsible for the gas distribution in this country which is euro1012 million

Regarding Portugal it was assumed that the RAB for the valuation period would

be equal to the one published by ERSE for 2015 which is $44552

million Once

again as the RoRAB is higher than our WACC this will lead to a fair value higher

than the RABs presented above

The efficiency factor for the operations in Spain was set to 153

for the period that

is being valued The efficient factor applied for the distribution of gas in Portugal is

1554

As it was already stated above since this is a mature segment we donrsquot

believe that major investments will occur which means that the future estimated

capex are equal to depreciation

The key drivers which are necessary to value the supply segment are the market

share growth in gas demand gross profitGWh and capex Regarding the market

share we believe that it will remain stable in the future due to the fact that the gas

supply in Iberia is now a mature market in which EDPrsquos market share has been

stabilizing in the past few years as it has been mentioned above

In order to estimate the volume of gas sold in the future for Portugal and Spain it

was necessary to take into consideration the future growth in demand For

Portugal it was assumed that the estimates published by REN (figure 57) which

forecast an annual growth of approximately 2 are accurate For Spain it was

assumed that the growth in demand is going to be equal to the GDP growth

estimated by IMF (see Appendix 2) It was already seen in the electricity supply

segment that energy demand is positively correlated with the country growth

51Naturgas Distribuicioacuten

52ldquoProveitos permitidos e ajustamentos para o ano gaacutes 2014-2015 das empresas reguladas do setor do gaacutes naturalrdquo June 2014 ERSE

53ldquoInforme 242013 de la CNE sobre la propuesta de real decreto por el que se establece la metodologiacutea para el caacutelculo de la retribucioacuten de la actividad de

distribucioacuten de energiacutea eleacutectricardquo September 12 2013 CNE (page 24)54

ldquoParacircmetros de regulaccedilatildeo para o periacuteodo dos anos gaacutes de 2013-2014 a 2015 -2016rdquo June 2013 ERSE

Figure 55 Behavior of EDPrsquos market share in the free market - Gas

Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837

Figure 61 ndash Brazilian Installed Capacity at

2014

SourceldquoBrazil Power Report Q2 2015 ndash BMI

20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables

Figure 59 EDPrsquos Supply of Gas ndash GrossProfit


-

50

100

2013201420152016201720182019

PT SP

(measure by GDP growth) Regarding gross profitGWh we think that the fact that

the segment is already mature will lead to stability in this variable The only action

taken to forecast it was to update it to account for future inflation

As it happened in the electricity supply segment since this is a not a capital

intensive segment the Capex will be in line with previous years

Valuation 7 ndash Gas PT Analystrsquos estimates


NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0

Operating Free Cash Flow - 0 54 8 22 28 30 29 29 30

Valuation 8 ndash Gas SP Analystrsquos estimates


NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0


BRAZILIAN OPERATIONS

This segment represented in 2014 17 of the overall EBITDA Within Brazil the

distribution segment represented 48 of the EDPBrsquos EBITDA while the

generation represented 47 and supply represented 5 In Brazil the

consumption55

of electricity is made through the regulated market and the

liberalized one

GENERATION AND SUPPLY

The electricity generation segment in Brazil is mostly characterized by the

existence of PPAs between generators and distributors and by the intensive use

of hydroelectric sources of power (figure 61)

In this country the generators can participate in a mechanism called MRE56

in

order to assure the compliance of CG ndash figure 62 In order to measure if the total

generation of MRE participants is not below the sum of contracted generation it is

used a variable named generation scaling factor GSF57

If GSF is below 100

55The costumers with consumption lower than 3 MW on average (which normally are residential commercial and industrial consumers) are supplied by

distribution companies (which belong to the regulated market) The consumers with annual demand above 3 MW are supplied by the free market whichrepresents 28 of the electricity sold in Brazil56

MRE ndash Mecanismo de Realocaccedilatildeo de Energia RP ndash real produtcion CG ndash Contracted Generation57

Geraccedilatildeo Hidraacuteulica GWhmGarantia Fiacutesica GWhm

Volume thatgenerators must

supply at the nationalsystem (SIN)

Inflationupdatedevery year

Selling price

PPAaverage life of 15 years

Beginning of the contract is defined

Contracted Generation

Figure 60 Brazilian Generation System

Source Nova Equity Research


PAGE 2937

Figure 63 Behaviour of PDL with GSF

Source Montly MRE Reports for GSF data and CCE for PLD data

000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF

Figure 64 Installed capacity mix of the 4th

largest private Brazilian generators

Source Each company data

0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal

Non-hydro renewables

Cogeneration

Thermal (Biomass)

than the participants become exposed to the spot market - PLD58

because they

have to buy electricity from more expensive fossil-fuelled generators The recent

volatility in the energy purchase price at the spot market results from unfavorable

hydrological issues The recent low production is the result of a huge drought

which is already being considered the worst in 8 decades and that is leading the

PDL to reach abnormal values as it can be seen below

Given the recent PLD high surges ANEEL recently approved new rules to

manage energy prices in the spot markets defining a minimum price of

R$3026MWh and a ceiling of R$38848MWh

In Brazil EDPB is the 4th

largest private operator in generating electricity and is

present in 10 states By observing figure 64 it is possible to conclude that EDPB

follows the pattern of the Brazilian generating segment having most of its installed

capacity concentrated in hydro sources of power

Additionally the company is currently constructing 3 new hydro plants (table 12)

that are going to start its operations between 2015 and 2018 Besides the

investment in hydro plants EDPB has a 50 share of the coal plant located in

Peceacutem with a proportional installed capacity of 360MW

Regarding Brazilian load factors (figure 65) we can conclude that once again the

energy source that provides the higher load factor is the one produced in nuclear

power plants However despite this high load factor we think that Brazil will not

expand its installed capacity in this source mainly due to the accident that

happened at Fukushima in 2011 This accident has led the Brazilian officials to

change59

the plan to increase the countryrsquos nuclear power base

Enertrade is the company responsible for the supply of energy and rendering of

services to the liberalized market The volume supplied has been oscillating along

the years (figure 66)

58The level of exposure of generators to the spot market is reflected by the PLD (Preccedilo Liacutequido das Diferenccedilas) which measures the cost of differences

between generated and contracted energy which have to be settled in the spot market59

In May 2012 the Ministry of Energy announced that increasing the number of nuclear power plants is not part of the 10-year energy plan (2012-2022)being Angra II the only nuclear power station planned to be built during the period in question

Measured by

Then

This only happens if

If

TOTAL RP of MREs participants gt TOTALCG of MREs participants

MREAll generators can participate

RP of some participants lt Its CGAnd

There are participants with RP gt Its CG

Transference of electricity surpluses forthose which CGltRP

GSF=TOTAL RP of MREsparticipantsTOTAL CG of MREs

participants

Figure 62



PAGE 3037

Table 12 Hydroelectric in EDPB

Power plantsProportional

InstalledCapacity (MW)

In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865

Cachoeira-Caldeiratildeo 1095

Satildeo Manoel 231

Source EDPB

Figure 65 Brazilian Load Factors ndash energy

source ()

Source ldquoBrazil Power Report Q2 2015 ndash BMI

79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100

Figure 67 Contracted Generation (GWh)

Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h

EnergestPeixe AngicalLajeado

Figure 66 Gwh Supply - Enertrade

Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION

In order to determinate the value of the generation segment in Brazil we gave

special attention to the following factors selling price of electricity PLD prices

generation costs real production of plants contracted generation generating

scaling factor (GSF) capex and inflation

As regards to the PPAs we took into consideration the selling prices of the

hydroelectric plants already in operation at 2014 and the selling price for the coal

plant in Peceacutem For the new hydroelectric plants we took into consideration the

already published selling prices To determine the future selling prices we updated

the current prices by using the data published by IMF regarding the inflation rate for

Brazil (see Appendix 2)

Regarding the contracted generation volume in the future we used the same values

observed in 2014 for the existing hydroelectric plants If we look for the contracted

generation of the past few years it is possible to see that the values are fairly stable

(figure 67) Concerning the contracted generation volume for the coal plant and for

the new hydro plants we also took in consideration the already contracted

generation The summary of the data above can be viewed below

Table 13 ndash Hydroelectric Data ndash EDPB

Legend

() selling price and contracted generation in 2014

() selling price according to the date of commence activities (Peceacutem - 2015 Jari - 2015 Cachoeira-Caldeiratildeo - 2017

Satildeo Manoel - 2018) The contracted generation was the one assumed at the beginning of the contract)

() data from 2013 For the new hydro plants we considered the average of the already existing ones

Source company data

Regarding generation costs as it was already mentioned in instances where the

GSF is below 100 besides the costs of producing the energy the generators also

have to incur on a cost to buy the contracted generation deficit in the spot markets

Given the fact that in the present moment the GSF is lower than 100 in order to

isolate this effect from the cost of producing electricity it was necessary to use as

reference the data from 2013 which was the last year in which the GSF was higher

than 100 (104) meaning that the generators did not have to purchase energy at

SellingPrice

(R$MWh)

ContractedGeneration

(MWh)

Costs with producigelectricity - R$ mnMWh

()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32

Cachoeira-Caldeiratildeo () 95 1136172 32

Satildeo Manoel () 83 3591600 32


PAGE 3137

spot markets to meet their PPA obligations Fundamentally in this year the

generation costs were only caused by the production of electricity (table 13) For the

future we assumed that hydro costs will increase with Brazilian inflation and for the

coal plant as in the Iberian generation we estimate its costs according to the future

forecast of the oil prices We also need to consider if the GSF will be below or

above 100 in the future As stated above Brazil is facing a huge drought and we

think that this is an abnormal situation Hence we think that the rainfall will

normalize in the future In order to estimate the GSF we took in consideration the

last GSF (2014) and since we believe that the generation will increase we used

estimations from BMI In that sense we computed the future GSF according to the

increase of the future electricity generation in Brazil

As it can be seen (figure 68) there are years where the GSF is below 100 In

those cases we used the average of the future PLD (average between the defined

minimum and ceiling stated above) which is R$209MWh and added it to the

generation cost of the hydroelectric plants to account for the fact that they have to

buy electricity in the sport markets

Regarding capex as it was already mentioned EDPB is currently constructing 3

hydro plants which will lead to an increase of the installed capacity from 2158 MW

in 2014 to 2685 MW in 2018 After making a search to determine the cost of

building these hydroelectric plants we concluded that there does not exist any

evidence which shows that the estimated capex by EDPB for the new plants is not

correct Taking into consideration the investment already made we estimated the

remainder expansion capex as can be seen below For the maintenance capex we

took into consideration past costs and updated them according to the installed

capacity

In order to understand the level of variation of the demand for electricity in Brazil

various forecasts were consulted Most of these forecasts clearly point to an

Figure 68 Forecast for future GSF ndash EDPB Operations

Source Analystrsquos Estimates

080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h

Electricity Generation GSF

Figure 69 Consumption of Electricity in

Brazil (TWh)

CAGR 463 CAGR406

Source ldquoPlano Decenal de Expansatildeo de

Energia 2023rdquo by Empresa de Pesquisa

Energeacuteticardquo


PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts

Updated eachyear by price-cap

mechanism(IGP-M ndash X

Factor)

Figure 71 Evolution of EDPBrsquos Distribution

segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients

increase in this demand Taking into account the estimates from ldquoPlano Decenal de

Expansatildeo de Energia 2023rdquo (PDE 2023) we estimated that the gross profit of the

supply segment will increase by 46 (see figure 69)

Valuation 9 ndash Brazilian Operations - Generation and Supply Analystrsquos estimates


NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION

The distribution companies which operate in this country do it through concession

areas where they are the sole supplier In the case of EDPB its distribution

operations are performed by EDP Bandeirante which serves 28 municipalities of

Satildeo Paulo and EDP Escelsa that covers 78 municipalities in Espiacuterito Santo The

parameters for each concession are defined by ANEEL60

(RAB X Factor61

RoRAB etc)

This is a growing segment in EDP with an average increase of 3 in the clientsrsquo

base in the last years due to its increase in network The electricity distributed has

been increasing approximately at the same rate (figure 71 and 72)

VALUATION

The key value drivers for this segment are the RAB RoRAB controllable and non-

controllable costs and capex We considered the RoRAB to be 80962

ANEEL defines the RAB independently for each concession For EDP Bandeirante

the defined RAB is equal to R$ 1545 million (regulatory period 2012-2015) and for

EDP Escelsa the defined RAB is equal to R$ 1566 million (regulated period 2013-

2016) In order to estimate the RAB for the next regulatory periods we took into

consideration the investments that will be made to increase the network As stated

in PDE63

2023 it is expected that the size of transmission lines in Brazil (measured

in Km) will increase from 112660 km in 2013 to 182477 km in 2023 In this sense

in the next regulatory period of each concession we will consider the increase in the

network and account it in the RAB

In order to estimate the controllable costs we took into consideration the

controllable costs from 2014 (R$593 million) and updated them for the future taking

into consideration the future inflation of Brazil (estimated by IMF) and the X factor

60ANEEL is the Brazilian National Electric Energy Agency responsible for the regulated segment in Brazil

61The x factor estimates potential productivity gains based on energy consumption and market expansion It also reflects the quality of services and the

level of operating expenditures in order to encourage a higher efficiency62

In February 2015 ANEEL proposed a post-tax WACC of 809 to be applied to the distribution of electricity in the upcoming 4th revision cycle63

Plano Decenal de Expansatildeo de Energia 2023rdquo by Empresa de Pesquisa Energeacuteticardquo - Brazil

Figure 70 Regulated revenues in Brazil

Source ANEEL


PAGE 3337

Figure 73 Distribution of Installed

Capacity between the energy sources

(2014)

Source EDPR

Wind

Solar

Figure 74 Comparison of EDPRrsquos load

factors with market - by region (2014)

Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h

Electricity Distributed

Gross Profit

Regarding the X factor we used the average of the X factor estimated for

Bandeirante and Escelsa which is 044 and 233 respectively Regarding

the non-controllable costs we estimated them taking into consideration the cost

per Km which is around 7 R$Km Taking into consideration future investments

in the network we updated the R$Km for the future using the inflation

Regarding the KMrsquos increase we estimated them according to the forecasts

published by EPE64

Once again our WACC is below the remuneration rate leading to the same

conclusion in the Iberian distribution segment

Valuation 10 ndash Brazilian Operations - Distribution Analystrsquos estimates


NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1


NON-HYDRO RENEWABLES SECTOR

EDPR is the company responsible for energy generation through the use of wind

farms and solar plants representing 25 of EDPrsquos EBITDA (2014) It is

considered one of the largest producers of electricity generated by wind energy in

the world and it owns turbines with load factors and profit margins which are

higher than the average comparable equipment operated by other companies in

the same the industry (figure 74) Between 2008 and 2014 this company

experienced a very significant growth having doubled its installed capacity from 4

GW to 8 GW EDPR is present in various countries located in Europe and also in

the United States of America and Brazil (figure 75) The fact that this subsidiary is

present in various countries which have different currencies increases the overall

currency risk of the segment

Since last year EDPR has been affected by negative effects caused by

unfavourable changes in the regulation of its activities in Spain and also by low

market prices offered to acquire the energy that it produces In order to minimize

these effects the subsidiary has devised a plan which will lower its exposure to

European wholesale prices and regulation by shifting a great chunk of its future

growth into the US (see figure 76)

64EPE - Empresa de Pesquisa Energeacutetica


PAGE 3437

Figure 75 EDPRrsquos market share in the different

regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil

As it has been mentioned in section dedicated to the valuation methods used in

this report since we do believe that the market value of EDPR reflects its true

value The companyrsquos market capitalization at the date of 29-05-2015 was

euro5716235 million (euro655 each share)

FINAL CONCLUSIONS

SUM-OF-THE-PARTS

We give a Hold rating and a Price Target of euro354 per share to EDP This

represents a 1 downside from the market price but due to the high dividend

yield the shareholder return is positive in 6 As it can be seen below the major

drivers for our target price are the Iberian liberalized segments EDPB and EDPR

due to the positive prospects expected from the increase in the installed capacity

of these segments The regulated business has the lowest impact due to the

measures that have been made in Iberia to reduce the tariff deficit

SENSITIVE ANALYSIS

In order to understand the impact that changing some inputs can have in the final

target price we performed a sensitive analysis in the inputs that can influence the

most the EDPrsquos value ie perpetuity growth exchange rate weather regulation

and countryrsquos financial situation The results can be seen in Appendix 4 As

expected the higher impact on the EDPrsquos value come from the weather

conditions since as already mentioned EDP has a large hydro installed capacity

However one can conclude that austerity measures can also have a substantial

impact in EDPrsquos value

Figure 76 EDPRrsquos growth plan

Source EDPR

US60

EmergingMarkets

20

Europe

20

Figure 77 SOTP (euro)


1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276

Generationamp Supply -

Iberia

Reg Electr -Iberia

Non-hydroRenewables

Brazilian Op Holding ampOther

OperatingValue

Non-operating

items

EnterpriseValue

Net Debt Minorityinterests

Equity Value


PAGE 3537

APPENDIX

APPENDIX 1 ndash Comparables Analysis

Source Bloomberg Country PE EVEBITDA Dividend Yield () Net DebtEBITDA

Liberalized Iberia

Iberdrola Spain 1329 874 057 076

EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil

CPFL Energia Brazil 1951 959 512 085

Tractebel Energia Brazil 1555 126 66 012

CIA Paranaense Brazil 836 586 915 073

APPENDIX 2 ndash Macroeconomic indicators (Source IMF)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Portugal GDP growth 194 -125 -323 -135 117 145 168 180 184 184

Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105

BrazilGDP growth 753 273 103 228 182 265 300 315 334 351

Inflation 504 664 540 620 592 554 530 515 500 475

APPENDIX 3 ndash Evolution of PPACMECs power plants ndash ending concession date MW transferring at the end of

the concession date and maturity of those power plants (Source EDP)

Ending Concession Year 2009 2010 2012 2013 2015 2017 2020 2022 2024 2027

HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na

Fuel-oilTotal MW 56 710 946

BegOp na na na


PAGE 3637

APPENDIX 4 ndash Sensitive Analysis Results (Source Analystrsquos Estimates)

Factor ChangeNew target

price Difference from

TP15E

Regulation Take off the inflation update factor 322 -9

Weather Reduce load factors in 2 each year 311 -12

Exchange rate- 1 EURBRL 360 1

+ 1 EURBRL 349 -1

Financial - 1 GDP -1 Inflation 342 -3

WACC and g sensitive analysis

APPENDIX 5 - Financial Statements

Millions of Euros 2013 2014 2015E 2016E 2017E 2018E 2019E

Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675

Depreciation and Amortization -1532 -1449 -1460 -1450 -1438 -1426 -1402

EBIT 2085 2193 2217 2205 2240 2222 2272

Net Financial Costs -737 -572 -665 -661 -672 -667 -682

Other Results 34 15 24 25 21 23 23

Profit before income tax 1382 1636 1576 1568 1589 1579 1614

Income tax expense -188 -311 -465 -463 -469 -466 -476

Net profit for the year 1194 1264 1111 1105 1120 1113 1138

Attributable to

Equity holders of EDP 1005 1040 934 929 942 936 956

Non-controlling Interests 188 223 177 176 179 177 181


Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370

Net Financial Debt 17981 17684 18432 17903 17417 17542 17084

Payables 5126 4868 5108 5039 5021 4790 4804

Other Liabilities 5834 5738 5846 5802 5832 5624 5639

Total Liabilities 28941 28290 29386 28744 28269 27956 27527

Total Equity 11529 11969 12259 12642 13044 13429 13843

Total Equity and Liabilities 40470 40259 41645 41386 41313 41384 41370

Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602

Operating Gross CF 3257 3156 3023 3004 3018 2992 3004

Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737

DISCLOSURES AND DISCLAIMER

Research Recommendations

Buy Expected total return (including dividends) of more than 15 over a 12-month

period

Hold Expected total return (including dividends) between 0 and 15 over a 12-month

period

Sell Expected negative total return (including dividends) over a 12-month period

This report was prepared by Daniela Gameiro a student of the NOVA School of Business andEconomics following the Masters in Finance Equity Research ndash Field Lab Work Project exclusivelyfor academic purposes Thus the author which is a Masters in Finance student is the soleresponsible for the information and estimates contained herein and for the opinions expressed whichreflect exclusively hisher own personal judgement This report was supervised by professor RosaacuterioAndreacute (registered with Comissatildeo do Mercado de Valores Mobiliaacuterios as financial analyst) who revisedthe valuation methodology and the financial model All opinions and estimates are subject to changewithout notice NOVA SBE or its faculty accepts no responsibility whatsoever for the content of this report norfor any consequences of its use

The information contained herein has been compiled by students from public sources believed to be reliablebut NOVA SBE or the students make no representation that it is accurate or complete and accept no liabilitywhatsoever for any direct or indirect loss resulting from the use of this report or its content

The author hereby certifies that the views expressed in this report accurately reflect hisher personal opinionabout the subject company and its securities Heshe has not received or been promised any direct or indirectcompensation for expressing the opinions or recommendation included in this report

The author of this report may have a position or otherwise be interested in transactions in securities whichare directly or indirectly the subject of this report

NOVA SBE may have received compensation from the subject company during the last 12 months related toits fund raising program Nevertheless no compensation eventually received by NOVA SBE is in any wayrelated to or dependent on the opinions expressed in this report

The Nova School of Business and Economics though registered with Comissatildeo do Mercado de ValoresMobiliaacuterios does not deal for or otherwise offers any investment or intermediation services to marketcounterparties private or intermediate customers

This report may not be reproduced distributed or published without the explicit previous consent of its authorunless when used by NOVA SBE for academic purposes only At any time NOVA SBE may decide tosuspend this report reproduction or distribution without further notice


PAGE 237

TABLE OF CONTENTS

EDP OVERVIEW 3

COMPANY DESCRIPTION 3

SHAREHOLDERS STRUCTURE 5

BUSINESS FRAMEWORK 6

MACROECONOMIC CONTEXT 6

GLOBAL ENERGY TRENDS 6

REGULATORY CONTEXT 9

VALUATION PRINCIPLES10

ELECTRICITY GENERATION IN IBERIA 13

LONG - TERM CONTRACTED GENERATION14

LIBERALISED GENERATION (EXCLUDING WIND AND SOLAR) 16

ELECTRICITY SUPPLY IN IBERIA21

ELECTRICITY DISTRIBUTION IN IBERIA23

GAS IN IBERIA 26

BRAZILIAN OPERATIONS 28

GENERATION AND SUPPLY 28

DISTRIBUTION32

NON-HYDRO RENEWABLES SECTOR33

FINAL CONCLUSIONS34

SUM-OF-THE-PARTS34

SENSITIVE ANALYSIS34

APPENDIX 35

DISCLOSURES AND DISCLAIMER 37


PAGE 337

Generation

Distribution

Supply

Generation

EDP OVERVIEW

COMPANY DESCRIPTION




Euronext Lisbon

































Source Company Data

15

10

31

31

12

-1



Financial Year 2014






Employees 11798

Source Company Data

EDP SA


Generation

Distribution

Supply

Source Company Data


PAGE 437






























Source Bloomberg

0

2000

4000

6000

8000

2010 2011 2012 2013 2014




ROE 2294 658 1215

ROA 770 253 245



PE na 1329 1193

Source Bloomberg



Source Company data

EUR72

PLN1

USD22

BRL5


Source Company Data

60 61 60 59 58

17 15 14 1412 11 9 10

0

50

100

2012 2013 2014 2015 1Q15




EDP Portugal BBB-

Iberdrola Spain BBB

Endesa Spain BBB

EOn Germany A-

EDF France A+

Centrica UK A-

Enel Italy BBB



PAGE 537



ChinaThree

Gorges(CTG)21

CapitalGroup

Companies Inc

15

Oppidum7

BlackRock Inc

5

SenforaBV4

Remaining

shareholders48














participation








premium to



















( new MW)

Source Company Data

WindPPA

LatAm5

Windothers

8

WindPPAUSA36

HydroPortug

al47

HydroPPA

Brazil4



463 GW



28 GW

Moodys rating Aa3

Source Moodyrsquos


PAGE 637



-400

-300

-200

-100

000

100

200

300

Portugal

-200

-100

000

100

200

300

Spain

GDP Growth ()


BUSINESS FRAMEWORK






















in energy

demand






produced by EDP








000050100150200250300350 Brazil

000100200300400 USA

GDP Growth ()



PAGE 737


Source Bloomberg

0

5

10

15

20

25

30

35

eurot

on

CO

2







RENEWABLES SOURCES















sections










factors10






10ܨܮ =

ௐ




2014

Source Company Data

Hydro34

Coal12

Cogeneration

0

CCGT17

Nuclear

1



PAGE 837


using CCGT

Source Company Data

0

1000

2000

3000

4000

5000

6000

7000

8000

20072008200920102011201220132014

GW

h

Spain Portugal



0

500

1000

1500

2000

2500

3000

3500

4000

4500

2010 2015 2020 2025 2030 2035

MT

oe

EU USA China

India Others World


are short-term

COAL















NATURAL GAS


in









natural gas plants

NUCLEAR









PAGE 937


Source Investing

000

2000

4000

6000

8000

10000

12000

14000

16000

fev-

08

ou

t-08

jun

-09

fev-

10

ou

t-10

jun

-11

fev-

12

ou

t-12

jun

-13

fev-

14

ou

t-14


Source Company Data

0 20 40 60 80 100

Hydro

Nuclear

Coal

CCGT

Cogeneration

Renewables










OIL






and







REGULATORY CONTEXT

TARIFF DEFICIT









this fossil fuel14




-18

-8

2

12

22 euro Billion




0

05

1

15

2007 2008 2009 2010 2011 2012 2013 est

euro Billion


PAGE 1037



emission)

Source Statisca

0 5 10 15 20 25

ChinaUSAIndia

RussiaBrazilJapan

IndonesiaGermany

KoreaCanada

Iran










CO2 Emissions


of the





























(Thousands kt)

2009 2010 Change

China 7692 8287 8

India 1982 2009 1

USA 5312 5433 2

Russia 1574 1741 11

Germany 732 745 2

Brazil 367 420 14

Japan 1101 1171 6



PAGE 1137



696 694632 631

1094

000

200

400

600

800

1000

1200

LiberalizedPT

RegulatedPT

BrazilianOp







(WACC17
































17 ܥܥܣ =


ா

ାாlowast ݎ


ଵାగಳ()





PAGE 1237



000 050 100


Regulated -Iberia

BrazilianOperations














firms22






located in Europe

























SampP BB+ 30-01-2015


Fitch BBB- 19-01-2015



PAGE 1337



Cost of

debt

614 614 614

Corporate

tax

2950 3000 3400

After-tax

cost of debt

433 430 405





576 574 541 539

779

000100200300400500600700800900


Source Company Data

3

5245

0

10

20

30

40

50

60

PPACMEC

SpecialRegime

OrdinaryRegime

OrdinaryRegime






for all



































GWh share


32223 54


997 2


60220 100

Source Company Data


PAGE 1437

Figure 23

Source Company Data


2017 (euro Million)

Source Company Data

0

200

400

600

800

1000




These







(see figure 23)






















Goal

CMEC Mechanism







In 2007



euro08 billion


In 2017



until 2027



0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 337

Generation

Distribution

Supply

Generation

EDP OVERVIEW

COMPANY DESCRIPTION




Euronext Lisbon

































Source Company Data

15

10

31

31

12

-1



Financial Year 2014






Employees 11798

Source Company Data

EDP SA


Generation

Distribution

Supply

Source Company Data


PAGE 437






























Source Bloomberg

0

2000

4000

6000

8000

2010 2011 2012 2013 2014




ROE 2294 658 1215

ROA 770 253 245



PE na 1329 1193

Source Bloomberg



Source Company data

EUR72

PLN1

USD22

BRL5


Source Company Data

60 61 60 59 58

17 15 14 1412 11 9 10

0

50

100

2012 2013 2014 2015 1Q15




EDP Portugal BBB-

Iberdrola Spain BBB

Endesa Spain BBB

EOn Germany A-

EDF France A+

Centrica UK A-

Enel Italy BBB



PAGE 537



ChinaThree

Gorges(CTG)21

CapitalGroup

Companies Inc

15

Oppidum7

BlackRock Inc

5

SenforaBV4

Remaining

shareholders48














participation








premium to



















( new MW)

Source Company Data

WindPPA

LatAm5

Windothers

8

WindPPAUSA36

HydroPortug

al47

HydroPPA

Brazil4



463 GW



28 GW

Moodys rating Aa3

Source Moodyrsquos


PAGE 637



-400

-300

-200

-100

000

100

200

300

Portugal

-200

-100

000

100

200

300

Spain

GDP Growth ()


BUSINESS FRAMEWORK






















in energy

demand






produced by EDP








000050100150200250300350 Brazil

000100200300400 USA

GDP Growth ()



PAGE 737


Source Bloomberg

0

5

10

15

20

25

30

35

eurot

on

CO

2







RENEWABLES SOURCES















sections










factors10






10ܨܮ =

ௐ




2014

Source Company Data

Hydro34

Coal12

Cogeneration

0

CCGT17

Nuclear

1



PAGE 837


using CCGT

Source Company Data

0

1000

2000

3000

4000

5000

6000

7000

8000

20072008200920102011201220132014

GW

h

Spain Portugal



0

500

1000

1500

2000

2500

3000

3500

4000

4500

2010 2015 2020 2025 2030 2035

MT

oe

EU USA China

India Others World


are short-term

COAL















NATURAL GAS


in









natural gas plants

NUCLEAR









PAGE 937


Source Investing

000

2000

4000

6000

8000

10000

12000

14000

16000

fev-

08

ou

t-08

jun

-09

fev-

10

ou

t-10

jun

-11

fev-

12

ou

t-12

jun

-13

fev-

14

ou

t-14


Source Company Data

0 20 40 60 80 100

Hydro

Nuclear

Coal

CCGT

Cogeneration

Renewables










OIL






and







REGULATORY CONTEXT

TARIFF DEFICIT









this fossil fuel14




-18

-8

2

12

22 euro Billion




0

05

1

15

2007 2008 2009 2010 2011 2012 2013 est

euro Billion


PAGE 1037



emission)

Source Statisca

0 5 10 15 20 25

ChinaUSAIndia

RussiaBrazilJapan

IndonesiaGermany

KoreaCanada

Iran










CO2 Emissions


of the





























(Thousands kt)

2009 2010 Change

China 7692 8287 8

India 1982 2009 1

USA 5312 5433 2

Russia 1574 1741 11

Germany 732 745 2

Brazil 367 420 14

Japan 1101 1171 6



PAGE 1137



696 694632 631

1094

000

200

400

600

800

1000

1200

LiberalizedPT

RegulatedPT

BrazilianOp







(WACC17
































17 ܥܥܣ =


ா

ାாlowast ݎ


ଵାగಳ()





PAGE 1237



000 050 100


Regulated -Iberia

BrazilianOperations














firms22






located in Europe

























SampP BB+ 30-01-2015


Fitch BBB- 19-01-2015



PAGE 1337



Cost of

debt

614 614 614

Corporate

tax

2950 3000 3400

After-tax

cost of debt

433 430 405





576 574 541 539

779

000100200300400500600700800900


Source Company Data

3

5245

0

10

20

30

40

50

60

PPACMEC

SpecialRegime

OrdinaryRegime

OrdinaryRegime






for all



































GWh share


32223 54


997 2


60220 100

Source Company Data


PAGE 1437

Figure 23

Source Company Data


2017 (euro Million)

Source Company Data

0

200

400

600

800

1000




These







(see figure 23)






















Goal

CMEC Mechanism







In 2007



euro08 billion


In 2017



until 2027



0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 437






























Source Bloomberg

0

2000

4000

6000

8000

2010 2011 2012 2013 2014




ROE 2294 658 1215

ROA 770 253 245



PE na 1329 1193

Source Bloomberg



Source Company data

EUR72

PLN1

USD22

BRL5


Source Company Data

60 61 60 59 58

17 15 14 1412 11 9 10

0

50

100

2012 2013 2014 2015 1Q15




EDP Portugal BBB-

Iberdrola Spain BBB

Endesa Spain BBB

EOn Germany A-

EDF France A+

Centrica UK A-

Enel Italy BBB



PAGE 537



ChinaThree

Gorges(CTG)21

CapitalGroup

Companies Inc

15

Oppidum7

BlackRock Inc

5

SenforaBV4

Remaining

shareholders48














participation








premium to



















( new MW)

Source Company Data

WindPPA

LatAm5

Windothers

8

WindPPAUSA36

HydroPortug

al47

HydroPPA

Brazil4



463 GW



28 GW

Moodys rating Aa3

Source Moodyrsquos


PAGE 637



-400

-300

-200

-100

000

100

200

300

Portugal

-200

-100

000

100

200

300

Spain

GDP Growth ()


BUSINESS FRAMEWORK






















in energy

demand






produced by EDP








000050100150200250300350 Brazil

000100200300400 USA

GDP Growth ()



PAGE 737


Source Bloomberg

0

5

10

15

20

25

30

35

eurot

on

CO

2







RENEWABLES SOURCES















sections










factors10






10ܨܮ =

ௐ




2014

Source Company Data

Hydro34

Coal12

Cogeneration

0

CCGT17

Nuclear

1



PAGE 837


using CCGT

Source Company Data

0

1000

2000

3000

4000

5000

6000

7000

8000

20072008200920102011201220132014

GW

h

Spain Portugal



0

500

1000

1500

2000

2500

3000

3500

4000

4500

2010 2015 2020 2025 2030 2035

MT

oe

EU USA China

India Others World


are short-term

COAL















NATURAL GAS


in









natural gas plants

NUCLEAR









PAGE 937


Source Investing

000

2000

4000

6000

8000

10000

12000

14000

16000

fev-

08

ou

t-08

jun

-09

fev-

10

ou

t-10

jun

-11

fev-

12

ou

t-12

jun

-13

fev-

14

ou

t-14


Source Company Data

0 20 40 60 80 100

Hydro

Nuclear

Coal

CCGT

Cogeneration

Renewables










OIL






and







REGULATORY CONTEXT

TARIFF DEFICIT









this fossil fuel14




-18

-8

2

12

22 euro Billion




0

05

1

15

2007 2008 2009 2010 2011 2012 2013 est

euro Billion


PAGE 1037



emission)

Source Statisca

0 5 10 15 20 25

ChinaUSAIndia

RussiaBrazilJapan

IndonesiaGermany

KoreaCanada

Iran










CO2 Emissions


of the





























(Thousands kt)

2009 2010 Change

China 7692 8287 8

India 1982 2009 1

USA 5312 5433 2

Russia 1574 1741 11

Germany 732 745 2

Brazil 367 420 14

Japan 1101 1171 6



PAGE 1137



696 694632 631

1094

000

200

400

600

800

1000

1200

LiberalizedPT

RegulatedPT

BrazilianOp







(WACC17
































17 ܥܥܣ =


ா

ାாlowast ݎ


ଵାగಳ()





PAGE 1237



000 050 100


Regulated -Iberia

BrazilianOperations














firms22






located in Europe

























SampP BB+ 30-01-2015


Fitch BBB- 19-01-2015



PAGE 1337



Cost of

debt

614 614 614

Corporate

tax

2950 3000 3400

After-tax

cost of debt

433 430 405





576 574 541 539

779

000100200300400500600700800900


Source Company Data

3

5245

0

10

20

30

40

50

60

PPACMEC

SpecialRegime

OrdinaryRegime

OrdinaryRegime






for all



































GWh share


32223 54


997 2


60220 100

Source Company Data


PAGE 1437

Figure 23

Source Company Data


2017 (euro Million)

Source Company Data

0

200

400

600

800

1000




These







(see figure 23)






















Goal

CMEC Mechanism







In 2007



euro08 billion


In 2017



until 2027



0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 537



ChinaThree

Gorges(CTG)21

CapitalGroup

Companies Inc

15

Oppidum7

BlackRock Inc

5

SenforaBV4

Remaining

shareholders48














participation








premium to



















( new MW)

Source Company Data

WindPPA

LatAm5

Windothers

8

WindPPAUSA36

HydroPortug

al47

HydroPPA

Brazil4



463 GW



28 GW

Moodys rating Aa3

Source Moodyrsquos


PAGE 637



-400

-300

-200

-100

000

100

200

300

Portugal

-200

-100

000

100

200

300

Spain

GDP Growth ()


BUSINESS FRAMEWORK






















in energy

demand






produced by EDP








000050100150200250300350 Brazil

000100200300400 USA

GDP Growth ()



PAGE 737


Source Bloomberg

0

5

10

15

20

25

30

35

eurot

on

CO

2







RENEWABLES SOURCES















sections










factors10






10ܨܮ =

ௐ




2014

Source Company Data

Hydro34

Coal12

Cogeneration

0

CCGT17

Nuclear

1



PAGE 837


using CCGT

Source Company Data

0

1000

2000

3000

4000

5000

6000

7000

8000

20072008200920102011201220132014

GW

h

Spain Portugal



0

500

1000

1500

2000

2500

3000

3500

4000

4500

2010 2015 2020 2025 2030 2035

MT

oe

EU USA China

India Others World


are short-term

COAL















NATURAL GAS


in









natural gas plants

NUCLEAR









PAGE 937


Source Investing

000

2000

4000

6000

8000

10000

12000

14000

16000

fev-

08

ou

t-08

jun

-09

fev-

10

ou

t-10

jun

-11

fev-

12

ou

t-12

jun

-13

fev-

14

ou

t-14


Source Company Data

0 20 40 60 80 100

Hydro

Nuclear

Coal

CCGT

Cogeneration

Renewables










OIL






and







REGULATORY CONTEXT

TARIFF DEFICIT









this fossil fuel14




-18

-8

2

12

22 euro Billion




0

05

1

15

2007 2008 2009 2010 2011 2012 2013 est

euro Billion


PAGE 1037



emission)

Source Statisca

0 5 10 15 20 25

ChinaUSAIndia

RussiaBrazilJapan

IndonesiaGermany

KoreaCanada

Iran










CO2 Emissions


of the





























(Thousands kt)

2009 2010 Change

China 7692 8287 8

India 1982 2009 1

USA 5312 5433 2

Russia 1574 1741 11

Germany 732 745 2

Brazil 367 420 14

Japan 1101 1171 6



PAGE 1137



696 694632 631

1094

000

200

400

600

800

1000

1200

LiberalizedPT

RegulatedPT

BrazilianOp







(WACC17
































17 ܥܥܣ =


ா

ାாlowast ݎ


ଵାగಳ()





PAGE 1237



000 050 100


Regulated -Iberia

BrazilianOperations














firms22






located in Europe

























SampP BB+ 30-01-2015


Fitch BBB- 19-01-2015



PAGE 1337



Cost of

debt

614 614 614

Corporate

tax

2950 3000 3400

After-tax

cost of debt

433 430 405





576 574 541 539

779

000100200300400500600700800900


Source Company Data

3

5245

0

10

20

30

40

50

60

PPACMEC

SpecialRegime

OrdinaryRegime

OrdinaryRegime






for all



































GWh share


32223 54


997 2


60220 100

Source Company Data


PAGE 1437

Figure 23

Source Company Data


2017 (euro Million)

Source Company Data

0

200

400

600

800

1000




These







(see figure 23)






















Goal

CMEC Mechanism







In 2007



euro08 billion


In 2017



until 2027



0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 637



-400

-300

-200

-100

000

100

200

300

Portugal

-200

-100

000

100

200

300

Spain

GDP Growth ()


BUSINESS FRAMEWORK






















in energy

demand






produced by EDP








000050100150200250300350 Brazil

000100200300400 USA

GDP Growth ()



PAGE 737


Source Bloomberg

0

5

10

15

20

25

30

35

eurot

on

CO

2







RENEWABLES SOURCES















sections










factors10






10ܨܮ =

ௐ




2014

Source Company Data

Hydro34

Coal12

Cogeneration

0

CCGT17

Nuclear

1



PAGE 837


using CCGT

Source Company Data

0

1000

2000

3000

4000

5000

6000

7000

8000

20072008200920102011201220132014

GW

h

Spain Portugal



0

500

1000

1500

2000

2500

3000

3500

4000

4500

2010 2015 2020 2025 2030 2035

MT

oe

EU USA China

India Others World


are short-term

COAL















NATURAL GAS


in









natural gas plants

NUCLEAR









PAGE 937


Source Investing

000

2000

4000

6000

8000

10000

12000

14000

16000

fev-

08

ou

t-08

jun

-09

fev-

10

ou

t-10

jun

-11

fev-

12

ou

t-12

jun

-13

fev-

14

ou

t-14


Source Company Data

0 20 40 60 80 100

Hydro

Nuclear

Coal

CCGT

Cogeneration

Renewables










OIL






and







REGULATORY CONTEXT

TARIFF DEFICIT









this fossil fuel14




-18

-8

2

12

22 euro Billion




0

05

1

15

2007 2008 2009 2010 2011 2012 2013 est

euro Billion


PAGE 1037



emission)

Source Statisca

0 5 10 15 20 25

ChinaUSAIndia

RussiaBrazilJapan

IndonesiaGermany

KoreaCanada

Iran










CO2 Emissions


of the





























(Thousands kt)

2009 2010 Change

China 7692 8287 8

India 1982 2009 1

USA 5312 5433 2

Russia 1574 1741 11

Germany 732 745 2

Brazil 367 420 14

Japan 1101 1171 6



PAGE 1137



696 694632 631

1094

000

200

400

600

800

1000

1200

LiberalizedPT

RegulatedPT

BrazilianOp







(WACC17
































17 ܥܥܣ =


ா

ାாlowast ݎ


ଵାగಳ()





PAGE 1237



000 050 100


Regulated -Iberia

BrazilianOperations














firms22






located in Europe

























SampP BB+ 30-01-2015


Fitch BBB- 19-01-2015



PAGE 1337



Cost of

debt

614 614 614

Corporate

tax

2950 3000 3400

After-tax

cost of debt

433 430 405





576 574 541 539

779

000100200300400500600700800900


Source Company Data

3

5245

0

10

20

30

40

50

60

PPACMEC

SpecialRegime

OrdinaryRegime

OrdinaryRegime






for all



































GWh share


32223 54


997 2


60220 100

Source Company Data


PAGE 1437

Figure 23

Source Company Data


2017 (euro Million)

Source Company Data

0

200

400

600

800

1000




These







(see figure 23)






















Goal

CMEC Mechanism







In 2007



euro08 billion


In 2017



until 2027



0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 737


Source Bloomberg

0

5

10

15

20

25

30

35

eurot

on

CO

2







RENEWABLES SOURCES















sections










factors10






10ܨܮ =

ௐ




2014

Source Company Data

Hydro34

Coal12

Cogeneration

0

CCGT17

Nuclear

1



PAGE 837


using CCGT

Source Company Data

0

1000

2000

3000

4000

5000

6000

7000

8000

20072008200920102011201220132014

GW

h

Spain Portugal



0

500

1000

1500

2000

2500

3000

3500

4000

4500

2010 2015 2020 2025 2030 2035

MT

oe

EU USA China

India Others World


are short-term

COAL















NATURAL GAS


in









natural gas plants

NUCLEAR









PAGE 937


Source Investing

000

2000

4000

6000

8000

10000

12000

14000

16000

fev-

08

ou

t-08

jun

-09

fev-

10

ou

t-10

jun

-11

fev-

12

ou

t-12

jun

-13

fev-

14

ou

t-14


Source Company Data

0 20 40 60 80 100

Hydro

Nuclear

Coal

CCGT

Cogeneration

Renewables










OIL






and







REGULATORY CONTEXT

TARIFF DEFICIT









this fossil fuel14




-18

-8

2

12

22 euro Billion




0

05

1

15

2007 2008 2009 2010 2011 2012 2013 est

euro Billion


PAGE 1037



emission)

Source Statisca

0 5 10 15 20 25

ChinaUSAIndia

RussiaBrazilJapan

IndonesiaGermany

KoreaCanada

Iran










CO2 Emissions


of the





























(Thousands kt)

2009 2010 Change

China 7692 8287 8

India 1982 2009 1

USA 5312 5433 2

Russia 1574 1741 11

Germany 732 745 2

Brazil 367 420 14

Japan 1101 1171 6



PAGE 1137



696 694632 631

1094

000

200

400

600

800

1000

1200

LiberalizedPT

RegulatedPT

BrazilianOp







(WACC17
































17 ܥܥܣ =


ா

ାாlowast ݎ


ଵାగಳ()





PAGE 1237



000 050 100


Regulated -Iberia

BrazilianOperations














firms22






located in Europe

























SampP BB+ 30-01-2015


Fitch BBB- 19-01-2015



PAGE 1337



Cost of

debt

614 614 614

Corporate

tax

2950 3000 3400

After-tax

cost of debt

433 430 405





576 574 541 539

779

000100200300400500600700800900


Source Company Data

3

5245

0

10

20

30

40

50

60

PPACMEC

SpecialRegime

OrdinaryRegime

OrdinaryRegime






for all



































GWh share


32223 54


997 2


60220 100

Source Company Data


PAGE 1437

Figure 23

Source Company Data


2017 (euro Million)

Source Company Data

0

200

400

600

800

1000




These







(see figure 23)






















Goal

CMEC Mechanism







In 2007



euro08 billion


In 2017



until 2027



0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 837


using CCGT

Source Company Data

0

1000

2000

3000

4000

5000

6000

7000

8000

20072008200920102011201220132014

GW

h

Spain Portugal



0

500

1000

1500

2000

2500

3000

3500

4000

4500

2010 2015 2020 2025 2030 2035

MT

oe

EU USA China

India Others World


are short-term

COAL















NATURAL GAS


in









natural gas plants

NUCLEAR









PAGE 937


Source Investing

000

2000

4000

6000

8000

10000

12000

14000

16000

fev-

08

ou

t-08

jun

-09

fev-

10

ou

t-10

jun

-11

fev-

12

ou

t-12

jun

-13

fev-

14

ou

t-14


Source Company Data

0 20 40 60 80 100

Hydro

Nuclear

Coal

CCGT

Cogeneration

Renewables










OIL






and







REGULATORY CONTEXT

TARIFF DEFICIT









this fossil fuel14




-18

-8

2

12

22 euro Billion




0

05

1

15

2007 2008 2009 2010 2011 2012 2013 est

euro Billion


PAGE 1037



emission)

Source Statisca

0 5 10 15 20 25

ChinaUSAIndia

RussiaBrazilJapan

IndonesiaGermany

KoreaCanada

Iran










CO2 Emissions


of the





























(Thousands kt)

2009 2010 Change

China 7692 8287 8

India 1982 2009 1

USA 5312 5433 2

Russia 1574 1741 11

Germany 732 745 2

Brazil 367 420 14

Japan 1101 1171 6



PAGE 1137



696 694632 631

1094

000

200

400

600

800

1000

1200

LiberalizedPT

RegulatedPT

BrazilianOp







(WACC17
































17 ܥܥܣ =


ா

ାாlowast ݎ


ଵାగಳ()





PAGE 1237



000 050 100


Regulated -Iberia

BrazilianOperations














firms22






located in Europe

























SampP BB+ 30-01-2015


Fitch BBB- 19-01-2015



PAGE 1337



Cost of

debt

614 614 614

Corporate

tax

2950 3000 3400

After-tax

cost of debt

433 430 405





576 574 541 539

779

000100200300400500600700800900


Source Company Data

3

5245

0

10

20

30

40

50

60

PPACMEC

SpecialRegime

OrdinaryRegime

OrdinaryRegime






for all



































GWh share


32223 54


997 2


60220 100

Source Company Data


PAGE 1437

Figure 23

Source Company Data


2017 (euro Million)

Source Company Data

0

200

400

600

800

1000




These







(see figure 23)






















Goal

CMEC Mechanism







In 2007



euro08 billion


In 2017



until 2027



0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 937


Source Investing

000

2000

4000

6000

8000

10000

12000

14000

16000

fev-

08

ou

t-08

jun

-09

fev-

10

ou

t-10

jun

-11

fev-

12

ou

t-12

jun

-13

fev-

14

ou

t-14


Source Company Data

0 20 40 60 80 100

Hydro

Nuclear

Coal

CCGT

Cogeneration

Renewables










OIL






and







REGULATORY CONTEXT

TARIFF DEFICIT









this fossil fuel14




-18

-8

2

12

22 euro Billion




0

05

1

15

2007 2008 2009 2010 2011 2012 2013 est

euro Billion


PAGE 1037



emission)

Source Statisca

0 5 10 15 20 25

ChinaUSAIndia

RussiaBrazilJapan

IndonesiaGermany

KoreaCanada

Iran










CO2 Emissions


of the





























(Thousands kt)

2009 2010 Change

China 7692 8287 8

India 1982 2009 1

USA 5312 5433 2

Russia 1574 1741 11

Germany 732 745 2

Brazil 367 420 14

Japan 1101 1171 6



PAGE 1137



696 694632 631

1094

000

200

400

600

800

1000

1200

LiberalizedPT

RegulatedPT

BrazilianOp







(WACC17
































17 ܥܥܣ =


ா

ାாlowast ݎ


ଵାగಳ()





PAGE 1237



000 050 100


Regulated -Iberia

BrazilianOperations














firms22






located in Europe

























SampP BB+ 30-01-2015


Fitch BBB- 19-01-2015



PAGE 1337



Cost of

debt

614 614 614

Corporate

tax

2950 3000 3400

After-tax

cost of debt

433 430 405





576 574 541 539

779

000100200300400500600700800900


Source Company Data

3

5245

0

10

20

30

40

50

60

PPACMEC

SpecialRegime

OrdinaryRegime

OrdinaryRegime






for all



































GWh share


32223 54


997 2


60220 100

Source Company Data


PAGE 1437

Figure 23

Source Company Data


2017 (euro Million)

Source Company Data

0

200

400

600

800

1000




These







(see figure 23)






















Goal

CMEC Mechanism







In 2007



euro08 billion


In 2017



until 2027



0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 1037



emission)

Source Statisca

0 5 10 15 20 25

ChinaUSAIndia

RussiaBrazilJapan

IndonesiaGermany

KoreaCanada

Iran










CO2 Emissions


of the





























(Thousands kt)

2009 2010 Change

China 7692 8287 8

India 1982 2009 1

USA 5312 5433 2

Russia 1574 1741 11

Germany 732 745 2

Brazil 367 420 14

Japan 1101 1171 6



PAGE 1137



696 694632 631

1094

000

200

400

600

800

1000

1200

LiberalizedPT

RegulatedPT

BrazilianOp







(WACC17
































17 ܥܥܣ =


ா

ାாlowast ݎ


ଵାగಳ()





PAGE 1237



000 050 100


Regulated -Iberia

BrazilianOperations














firms22






located in Europe

























SampP BB+ 30-01-2015


Fitch BBB- 19-01-2015



PAGE 1337



Cost of

debt

614 614 614

Corporate

tax

2950 3000 3400

After-tax

cost of debt

433 430 405





576 574 541 539

779

000100200300400500600700800900


Source Company Data

3

5245

0

10

20

30

40

50

60

PPACMEC

SpecialRegime

OrdinaryRegime

OrdinaryRegime






for all



































GWh share


32223 54


997 2


60220 100

Source Company Data


PAGE 1437

Figure 23

Source Company Data


2017 (euro Million)

Source Company Data

0

200

400

600

800

1000




These







(see figure 23)






















Goal

CMEC Mechanism







In 2007



euro08 billion


In 2017



until 2027



0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 1137



696 694632 631

1094

000

200

400

600

800

1000

1200

LiberalizedPT

RegulatedPT

BrazilianOp







(WACC17
































17 ܥܥܣ =


ா

ାாlowast ݎ


ଵାగಳ()





PAGE 1237



000 050 100


Regulated -Iberia

BrazilianOperations














firms22






located in Europe

























SampP BB+ 30-01-2015


Fitch BBB- 19-01-2015



PAGE 1337



Cost of

debt

614 614 614

Corporate

tax

2950 3000 3400

After-tax

cost of debt

433 430 405





576 574 541 539

779

000100200300400500600700800900


Source Company Data

3

5245

0

10

20

30

40

50

60

PPACMEC

SpecialRegime

OrdinaryRegime

OrdinaryRegime






for all



































GWh share


32223 54


997 2


60220 100

Source Company Data


PAGE 1437

Figure 23

Source Company Data


2017 (euro Million)

Source Company Data

0

200

400

600

800

1000




These







(see figure 23)






















Goal

CMEC Mechanism







In 2007



euro08 billion


In 2017



until 2027



0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 1237



000 050 100


Regulated -Iberia

BrazilianOperations














firms22






located in Europe

























SampP BB+ 30-01-2015


Fitch BBB- 19-01-2015



PAGE 1337



Cost of

debt

614 614 614

Corporate

tax

2950 3000 3400

After-tax

cost of debt

433 430 405





576 574 541 539

779

000100200300400500600700800900


Source Company Data

3

5245

0

10

20

30

40

50

60

PPACMEC

SpecialRegime

OrdinaryRegime

OrdinaryRegime






for all



































GWh share


32223 54


997 2


60220 100

Source Company Data


PAGE 1437

Figure 23

Source Company Data


2017 (euro Million)

Source Company Data

0

200

400

600

800

1000




These







(see figure 23)






















Goal

CMEC Mechanism







In 2007



euro08 billion


In 2017



until 2027



0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 1337



Cost of

debt

614 614 614

Corporate

tax

2950 3000 3400

After-tax

cost of debt

433 430 405





576 574 541 539

779

000100200300400500600700800900


Source Company Data

3

5245

0

10

20

30

40

50

60

PPACMEC

SpecialRegime

OrdinaryRegime

OrdinaryRegime






for all



































GWh share


32223 54


997 2


60220 100

Source Company Data


PAGE 1437

Figure 23

Source Company Data


2017 (euro Million)

Source Company Data

0

200

400

600

800

1000




These







(see figure 23)






















Goal

CMEC Mechanism







In 2007



euro08 billion


In 2017



until 2027



0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 1437

Figure 23

Source Company Data


2017 (euro Million)

Source Company Data

0

200

400

600

800

1000




These







(see figure 23)






















Goal

CMEC Mechanism







In 2007



euro08 billion


In 2017



until 2027



0

1000

2000

3000

4000

5000

6000

7000Fuel

Coal

Hydro


PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 1537

cogeneration31










VALUATION









segmentrsquos value











Source EDP

0

5000

10000

15000

20000

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014

Ele

ctr

icit

yG

en

era

tio

n(G

Wh

)

Gro

ss

Pro

fit

(euroM

)





PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 1637



-200

-180

-160

-140

-120

-100

-80

-60

-40

-20

0

0

200

400

600

800

1000

1200


Figure 28

Price is set






YES NO


marginal cost

Demand = Supply

Price is set

Source Company Data















NOPLAT 500 481 447 392 342 353 305 295 2 42 WACC 576


200




(-) Change in NWC -188 79 -20 -46 0 -32 0 -199 0
















have been


which have




costs (revenues)33




PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 1737


Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural

Others

2013 2012








of energy has









generation costs














Source Company Data

472 474432

63 631 595

158 157 163

0

20

40

60

2012 2013 2014




Wholesale market


Source Company Data

0

20

40

60

80

100

2012 2013 2014



PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 1837


Source EIA

35 30 30 4565

200

30

60 63 50

140 100

70

0

50

100

150

200

250

Minimum Maximum


Source Company Data

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

20102011201220132014

Ele

ctr

icit

yG

en

(G

Wh

)

EB

ITD

A(euro

M)

LT Contr Gen (GWh)

Lib Iberia (GWh)


Lib Iberia (euroM)






























0

10

20

30

40

50

60

70

80

90

100





0

10

20

30

40

50

60

70

80

90

100


2013 2014 2013 2014 2013 2014

Renewables

Cogeneration

CCGT

Coal

Nuclear

Hydro


PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 1937




0

20

40

60

80

100

120

$b

bl


Source Company Data

0

10

20

30

40

50

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price


Source Company Data

0

10

20

30

40

50

60

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013

euroM

Wh


CO2 costs Oil price



below

VALUATION




































PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 2037


Power


Capex

(euroM)


Baixo

Sabor2008 2014 171 6253

Ribeira

dio

Ermida

2010 2014 81 2133

Foz

Tua2011 2016 252 370


Venda

Nova II2009 2015 746 3225

Salam

onde II2010 2015 207 200


energiaedppt



0

100

200

300

400

500

600

700

800

900

0

5000

10000

15000

20000

25000

30000

EBITDA (euroM) MW

GWh



































years39






PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 2137


depreciation







NOPLAT 92 82 13 88 81 73 145 147 372 445 WACC 576

(+) Depreciation 236 236 236 219 231 284 280 291 280 351 g 200


(-) Capex -488 -502 -508 -1055 -214 -460 -112 -1649 -396


Transference -37 0 0 -526 -111 -354 -80 -1397 0

Maintenance -39 -60 -23 -25 -29 -32 -32 -251 -396

(-) Change in NWC -202 162 -1 -83 -19 -61 -8 -194 -10









Iberdrola












Source EDP

0 10 20 30 40

Endesa

Iberdrola

EDP

Gas Natural Fenosa




Source ERSE

EDPCom46

Endesa

19

Iberdrola

16

Others12

Galp7


Source CEER

Endesa32

Iberdrola

20

Others20

GNF17

EDP8

EON3


Source EDP

0

20

40

60

80

2009 2010 2011 2012 2013 2014

PT SP


PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 2237



Source EDP

0

500

1000

1500

2000

2500

3000

3500

0

5000

10000

15000

20000

20092010 201120122013 2014




Source EDP

0

200

400

600

800

1000

0

5000

10000

15000

20000

25000

200920102011201220132014




-2

-1

-1

0

1

1

2

-200

-100

000

100

200

300


GDP growth













volatility)

VALUATION



and capex























PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 2337

RoRAB=

WACC(pre-tax)

CPI measured by

inflation


by regulators


(CPI ndash X)


Regulated Revenues




euro6MWh in Spain








NOPLAT 28 - 22 17 2 13 19 14 14 14 13 WACC 576

(+) Depreciation 0 0 1 1 1 2 3 4 5 6 g 200


(-) Capex 0 -6 -1 -10 -12 -12 -13 -13 -13

(-) Change in NWC 55 -59 -4 74 0 7 7 0 0




NOPLAT 13 - 4 25 4 15 16 16 16 16 16 WACC 574

(+) Depreciation 1 1 1 1 0 1 1 2 2 2 g 200


(-) Capex 2 5 0 -5 -5 -4 -4 -3 -3

(-) Change in NWC 36 -113 -3 27 -7 -2 -1 -4 -1








ERSE41



















Source EY Research


PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 2437



Source Company Date

4335 4335416

389

1385 136 131 124

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014

euroM

PT SP


Source ERSE EDPD

340

350

360

370

380

390

400

410

420

430

440

2012 2013 2014

euroM




Source Company Data

41000

42000

43000

44000

45000

46000

47000

48000

49000

6020

6040

6060

6080

6100

6120

6140

6160

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds



Source Company Data

635

640

645

650

655

660

665

0

5000

10000

15000

20000

25000

2009 2010 2011 2012 2013 2014

GW

h

Th

ou

san

ds


















VALUATION






of




cap at 95


PT SP

Regulated 1278 156

Non-regulated 8 7

Total 1286 163

Source Company Data


PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 2537


Analystrsquos WACC

ERSE Analyst

Difference

t 3150 2950 -6

DD+E) 55 46 -16

Beta ofCP

093 091 -2

Re (aftertax)

629 632 0

Rf 214 229 7

Defaultspread

2 371 86

PD - 038 -

RR - 6220 -

Rd(beforetax)

441 614 39

Rd (aftertax)

302 413 43

WACCafter tax

449 541 20

WACbeforetax

675

















million46












taking into










ERSE49





0 5 10

Germany()

Poland()

Finland()

CzechRepublic()

France()

Slovakia()

Average

Portugal()

Spain()


PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 2637



Source EDP



NOPLAT 238 308 315 291 302 236 186 182 187 182 WACC 541

(+) Depreciation 248 243 234 234 255 253 253 254 253 253 g 200


(-) Capex -185 -255 -419 -255 -253 -253 -254 -253 -253

(-) Change in NWC -524 -637 -298 24 14 37 4 -2 5




NOPLAT 71 106 69 58 50 49 50 51 51 51 WACC 539

(+) Depreciation 34 31 32 34 35 37 37 37 37 37 g 200


(-) Capex -117 -68 -93 -35 -37 -37 -37 -37 -37

(-) Change in NWC 21 35 3 -22 0 0 0 0 0


GAS IN IBERIA













In Portugal















Source Company Data

15 4

7

45

12

17



PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 2737



0

10

20

30

40

50

60



0 5 10 15

Germany()

Poland()

Finland()

Czechhellip

France()

Slovakia

Greece

Switzerland

Average

Portugal()

Spain()



0

50

100

150

200

250

2013 2014 2015 2016 2017 2018 2019

PT SP

VALUATION








million Once




for the period that


1554






















Source Company Data

0

10

20

30

2008 2009 2010 2011 2012 2013 2014

PT

SP


PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 2837


2014


20 1

66

13Coal

Nuclear

Hydro

Non-hydroRenewables



-

50

100

2013201420152016201720182019

PT SP








NOPLAT 17 30 28 18 22 20 21 21 22 22 WACC 541

(+) Depreciation 30 24 25 25 27 26 25 24 24 23 g 200


(-) Capex -46 -34 -35 -15 -16 -16 -16 -16 -16

(-) Change in NWC -8 35 1 -11 -2 0 0 -1 0




NOPLAT 99 120 109 113 79 87 87 88 89 89 WACC 539

(+) Depreciation 87 76 74 78 82 80 78 77 76 74 g 200


(-) Capex -196 -61 -151 -59 -60 -61 -61 -59 -59

(-) Change in NWC -39 31 -6 -3 3 0 -1 -1 0






consumption55


liberalized one






in




If GSF is below 100








Selling price







PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 2937



000

020

040

060

080

100

120

140

-50

50

150

250

350

450

550

650

jan

-10

ab

r-10

jul-

10

ou

t-10

jan

-11

ab

r-11

jul-

11

ou

t-11

jan

-12

ab

r-12

jul-

12

ou

t-12

jan

-13

ab

r-13

jul-

13

ou

t-13

jan

-14

ab

r-14

jul-

14

ou

t-14

Perc

en

tag

e(

)

R$M

Wh

PLD GSF




0

20

40

60

80

100

120

Tractebel- Brazil

AESTietecirc

CPFLEnergia

EDPBrasil

Hydro

Thermal


Cogeneration

Thermal (Biomass)


because they























change59








Measured by

Then


If







participants

Figure 62



PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 3037




In operation

Lajeado 903

Peixe Angical 499

Energest 396

Peceacutem 360

In construction

Jari 1865


Satildeo Manoel 231

Source EDPB


source ()


79

89

49

36

Coal

Nuclear

Hydro

Non-hydroRenewables

0 50 100


Source EDPB data

0

10000

2010 2011 2012 2013 2014

GW

h



Source EDPB

0

5000

10000

15000

20000

25000

30000

VALUATION


















Legend





Source company data








SellingPrice

(R$MWh)


(MWh)


()

Lajeado () 142 3298000 16

Peixe Angical () 198 2375250 30

Energest () 165 2538688 49

Peceacutem I () 191 2693700 137

Jari () 115 1664400 32




PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 3137

























capacity





080

085

090

095

100

105

110

480000

500000

520000

540000

560000

580000

600000

620000

640000

2014 2015 2016 2017 2018 2019P

erc

en

tag

e(

)

TW

h



Brazil (TWh)

CAGR 463 CAGR406





PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 3237

RoRAB

=

WACC

(post-tax)

Non-Controllable

Costs

Regulated Revenues

RoRAB xRAB

PART A PART B

ControllableCosts



Factor)


segment

Source EDPB

2500

2600

2700

2800

2900

3000

3100

3200

82000

83000

84000

85000

86000

87000

88000

89000

90000

Th

ou

san

ds

KM

Network Clients






NOPLAT 171 194 171 163 122 250 251 264 292 284 WACC 779

(+) Depreciation 66 70 63 75 52 40 43 46 47 48 g 475


(-) Capex -451 397 328 -17 -213 -205 -144 -141 -112

(-) Change in NWC 51 47 -112 9 -33 3 3 3 2


DISTRIBUTION






(RAB X Factor61

RoRAB etc)




VALUATION








in PDE63














Source ANEEL


PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 3337



(2014)

Source EDPR

Wind

Solar



Source EDPR

0

5

10

15

20

25

30

EDPRMarket


segment

Source EDPB

-300

200

700

1200

1700

21500

22500

23500

24500

25500

26500

R$

M

GW

h


Gross Profit







published by EPE64





NOPLAT 193 156 99 123 130 138 143 153 159 162 WACC 779

(+) Depreciation 84 107 85 104 98 94 92 90 89 89 g 475


(-) Capex -147 -135 -129 -113 -104 -107 -110 -112 -115

(-) Change in NWC 13 21 113 83 -103 -1 0 5 -1






















PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 3437


regions - 2014

Source EDPR

0

5

10

15

20

25

30

Ca

na

da

Port

ug

al

Spa

in

Ro

ma

nia

Pola

nd

US

A

Fra

nce

Belg

ium

Ita

ly

Bra

zil





FINAL CONCLUSIONS

SUM-OF-THE-PARTS








SENSITIVE ANALYSIS










Source EDPR

US60

EmergingMarkets

20

Europe

20



1028

354

- 028 1083 - 041 - 504

- 169385

182

253

276


Iberia

Reg Electr -Iberia

Non-hydroRenewables


OperatingValue

Non-operating

items

EnterpriseValue


Equity Value


PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 3537

APPENDIX



Liberalized Iberia


EDF France 1339 474 495 076

EON Germany 1326 488 431 062

RWE Germany 1177 483 349 076

Regulated Iberia

REE Spain 1596 1058 411 064

REN Portugal 1142 758 653 194

Enagas Spain 1385 926 546 073

Brazil





2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


Inflation 139 356 278 044 067 120 147 151 148 150

SpainGDP growth -020 005 -164 -122 087 096 113 117 121 127

Inflation 204 305 244 153 027 084 090 104 102 105


Inflation 504 664 540 620 592 554 530 515 500 475




HydroTotal MW 804 627 132 125 2215 192

BegOp 1958-1995 1951-1964 1974 1987 1956-1994 2005

CoalTotal MW 1180

BegOp na


BegOp na na na


PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 3637




TP15E




+ 1 EURBRL 349 -1





Income Statement

EBITDA 3617 3642 3677 3655 3678 3648 3675


EBIT 2085 2193 2217 2205 2240 2222 2272


Other Results 34 15 24 25 21 23 23




Attributable to




Balance Sheet

Net Fixed Assets 29640 29657 30777 30732 30634 30762 30765

Receivables 8043 7544 8096 7895 7916 7836 7817

Other Assets 2786 3058 2772 2759 2763 2786 2788

Total Assets 40470 40259 41645 41386 41313 41384 41370


Payables 5126 4868 5108 5039 5021 4790 4804



Total Equity 11529 11969 12259 12642 13044 13429 13843


Cash Flow Statement

NOPLAT 1725 1707 1563 1554 1579 1566 1602


Capex -407 -1466 -2580 -1405 -1340 -1554 -1405

Change in NWC -13 439 -568 73 -1 -395 37

Operating FCF 2836 2129 -125 1673 1676 1044 1636

Lib IberiaWACC

4 576 7

g

15 486 337 290

20 554 354 298

25 668 377 309

Reg IberiaWACC

4 541 7

g

15 417 335 293

20 470 354 302

25 558 380 313

BrazilWACC

6 779 9

g

4 433 329 300

5 558 354 314

5 642 366 320


PAGE 3737




period


period










PAGE 3737




period


period









Documents

E R EDP - ENERGIAS DE PORTUGAL C R · 2017-01-23 · current composition, EDP had to undergo 8 privatization phases. Currently, the company is mainly owned by foreign investors. As