In 2012, consolidated gross operating revenue came to R$ 3,173.9 million, down 2.9% from the amount of R$ 3,268.7 million in FY 2011.
CTEEP`s revenues originates from the following sources: (i) construction services; (ii) operation and maintenance of electric power transmission lines; (iii) financial income; and (iv) other revenues.

In 2012, the Company`s construction revenues totaled R$ 976.7 million, down 11.5% from 2011. Construction revenues in 2012 had a positive impact from the progress of the IEMadeira works, along with the start of IEGaranhuns; on the other hand, such revenues were negatively affected by the start-up operations of the subsidiaries Pinheiros (substations of Getulina, Mirassol and Piratininga II), along with Serra do Japi, whose works were concluded during the fourth quarter of 2011 and first quarter of 2012 respectively; coupled with the completion of the works related to reinforcement and new connections in the existing assets of CTEEP (Parent Company).

Revenues from maintenance and operation totaled R$ 594.7 million in 2012, representing a 7.1% growth as compared to the R$ 555.1 million attained in 2011. This performance reflects the 4.26% increase in the IGP-M inflation index, which is used to adjust the RAP of the Parent Company`s largest concession contract (059/2001), the 4.98% increase in the IPCA inflation index, which is used to adjust the RAPs of the subsidiaries for the 2012/2013 cycle, as well as the receipt of O&M revenue from the new energized reinforcements carried out during the course of 2012.
In 2012, financial income came to R$ 1,584.8 million, flat in relation to the amount of R$ 1,590.0 million reported in 2011, as a result of the change in the financial flow expected for realization of construction and reversal.

Financial income is recognized when potential future economic benefits are likely to flow to the Company and the amount of revenue can be accurately measured. Interest income is recognized by the linear method, based on the time frame and effective interest rates applicable to the outstanding amount of the principal. The effective interest rate is the one used to discount the expected future amount of receivables for the estimated maturity term of the financial asset in relation to the original net accounting value of the asset in question.

The impact of the readjustment of the RAP is related to the Financial Income, since the future cash inflow is bound to be readjusted, as a result of the new value determined by the regulatory body (ANEEL). Thus, the future cash flow is readjusted considering the new RAP amount, up until the end of the concession period. The new present value of this readjusted flow will consist in the basis for remuneration of the financial assets (accounts receivable) for the next cycle by the same effective interest rate.

The Company`s other revenues relate to leasing to a fixed line telephone company and services concerning maintenance and technical analysis services provided to third parties.

As a result of the factors mentioned above, CTEEP`s consolidated net operating revenue stood at R$ 2,819.0 million in 2012, representing a decrease of 2.8% when compared with the R$ 2,900.8 million registered in the previous year. (GRI 2.8)

Operating Costs and Expenses
GRI EC1

In 2012, operating costs and expenses remained virtually flat in relation with 2011, totaling R$ 1,438.7 million, versus R$ 1,450.4 in the previous year.

The change in the amount of costs and expenses recorded in 2012 mainly reflects the increase in personnel expenses, arising from the collective bargaining agreement, which resulted in a 6.0% increase granted in July 2012, coupled with the increase in headcount; increase in costs and expenses from third-party services, deriving from the ongoing construction works in the subsidiary IEMadeira, whose amount declines proportionally to the change in the construction work revenue; increase in contingency expenses, which were subject to review, due to expectations of loss concerning some legal disputes, coupled with a successful outcome in a labor lawsuit, whose amount of R$ 27.6 million was recognized in 2011o; offset by the decrease in costs of materials, which vary in line with construction revenues, and reflected the start-up operations of the subsidiary Serra do Japi, following the completion of works during the first half of 2012.