Financial Position and Liabilities - As of December 31, 2024, the company has no outstanding indebtedness denominated in foreign currencies and does not have substantial revenues in foreign currencies [1052]. - The company has net liabilities exposed to interest rate fluctuations amounting to R$374 million as of December 31, 2024 [1061]. - The company has a net exposure to inflation of R$2,565 million as of December 31, 2024, with significant liabilities indexed to inflation [1065]. - The company’s cash equivalents and marketable securities total R$4,524 million, while liabilities amount to R$4,898 million, indicating a net liability exposure [1061]. - Total financial obligations amount to 22,300 million reais, with principal payments of 19,374 million reais and interest payments of 1,528 million reais [1074]. - Loans and debentures account for 18,646 million reais, with principal payments of 16,000 million reais and interest payments of 2,646 million reais over various time frames [1074]. - The pension plan deficit (FORLUZ) totals 695 million reais, with principal payments of 570 million reais and interest payments of 125 million reais [1074]. - Supplier obligations total 2,926 million reais, primarily consisting of 2,761 million reais in principal payments [1074]. - Future obligations include 5,672 million reais due in 1 to 5 years and 6,124 million reais due over 5 years [1074]. - The company has a total of 2,464 million reais in principal payments due within 3 months to 1 year [1074]. - The company has 5,354 million reais in principal payments due within 1 to 5 years for loans and debentures [1074]. - The company has a total of 2,298 million reais in interest payments due over 1 to 5 years [1074]. - Interest payments on loans and debentures are projected at 706 million reais for 3 months to 1 year and 2,217 million reais for 1 to 5 years [1074]. - Fixed rate obligations include 2,926 million reais to suppliers, with no interest payments reported [1074]. Risk Management - The company anticipates a probable scenario relief of R$16 million and an adverse scenario increase of R$10 million in exposed liabilities due to foreign exchange fluctuations [1054]. - The company manages liquidity risk by projecting monthly cash flow balances over a 12-month period and daily liquidity over 180 days [1070]. - The company’s financial strategy includes investing in private credit investment funds and bank CDs to ensure liquidity while seeking profitability [1071]. - Any reduction in the company's ratings could lead to higher financing costs and more stringent covenants, impacting operational flexibility [1073]. Interest Rates and Projections - In a probable scenario, the company estimates the Selic rate to be 9.15% and the TJLP rate to be 7.94% by December 31, 2025 [1062]. - The company reported a net cash inflow of R$443 million from hedging transactions related to US$381.1 million of outstanding debt, with a positive result of R$521 million from these transactions [1059].

Foreign Exchange and Interest Rate Risk - The company reported a net liability exposure of R$2,097 million under the base scenario for foreign exchange rate risk, which could increase to R$2,598 million in an adverse scenario [1121]. - The net effect of exchange rate fluctuations is projected to be a loss of R$60 million in a probable scenario and R$501 million in an adverse scenario [1121]. - The company has total assets exposed to interest rate fluctuations amounting to R$3,737 million, while liabilities total R$3,508 million, resulting in net assets exposed of R$229 million [1135]. Concession Financial Assets - The company’s concession financial assets related to distribution infrastructure increased from R$1,407 million in 2022 to R$1,920 million in 2023 [1136]. - The concession grant fee, indexed to IPCA, rose from R$2,950 million in 2022 to R$3,031 million in 2023 [1136]. - The company’s total net assets exposed to inflation decreased from R$1,069 million in 2022 to R$182 million in 2023 [1136]. Investment and Risk Management - The company has established a cash investment policy focusing on private credit investment funds and bank CDs, aiming for profitability while managing credit risk [1137]. Governance and Compliance - The company’s audit committee operates under the Sarbanes-Oxley Act and has pre-approval policies for all audit and non-audit services provided by external auditors [1143]. - The company’s disclosure controls and procedures were evaluated as effective by the Executive Board as of December 31, 2023 [1139]. - The company’s code of ethics was revised in 2022 to enhance clarity regarding ethical principles and rules of conduct [1141].

Foreign Currency Exposure - As of December 31, 2022, R$3,975 million, or 37.57% of the company's outstanding indebtedness, was denominated in foreign currencies, entirely in U.S. dollars[1017]. - In a 'probable' scenario, the company may find relief of R$97 million from foreign exchange fluctuations, while in an 'adverse' scenario, exposed liabilities could increase by R$637 million[1019]. - The company uses derivative financial instruments to hedge against foreign exchange risks, with a notional amount of US$750 million in contracts[1023]. Inflation Exposure - The company has a net exposure to inflation of R$1,069 million as of December 31, 2022, with total assets indexed to inflation at R$4,357 million and liabilities at R$5,426 million[1028]. Interest Rate Exposure - The company’s net assets exposed to interest rate fluctuations are R$2,142 million, with a probable scenario indicating a net effect of R$268 million from interest rate changes[1027]. - The company estimates that in a probable scenario, the Selic rate will be 12.50% and the TJLP rate will be 7.20% on December 31, 2023[1026]. Liquidity Management - The total cash equivalents and marketable securities amount to R$3,223 million, with cash equivalents at R$1,345 million and marketable securities at R$1,878 million[1025]. - The company has a total liquidity risk management strategy that includes monitoring cash flow projections monthly over a 12-month period[1032]. - The company has sufficient cash flow to cover its operating activities and manages liquidity risk through a structured investment policy[1031]. Financial Obligations - The company’s total financial obligations, including loans and debentures, amount to R$16,875 million, with R$12,892 million due within five years[1036].

Financial Statements and Reporting - The consolidated financial statements are presented in millions of Reais, with all amounts rounded to the nearest million[422]. - The Company’s Audit Committee authorized the issuance of the consolidated financial statements as of December 31, 2021, and 2020, and for the years ended December 31, 2021, 2020, and 2019[420]. - The Company intends to adopt new and amended accounting standards and interpretations when they become effective, as disclosed in the consolidated financial statements[425]. - Management uses various estimates and judgments that significantly affect the amounts recognized in the consolidated financial statements, including provisions for expected credit losses and deferred income taxes[428]. - The Company’s actual results may differ materially from those anticipated in forward-looking statements due to various risks and uncertainties[418]. Revenue Recognition - The Company recognizes revenue from energy transmission concession contracts when performance obligations are satisfied, with the Annual Permitted Revenue (RAP) being a key component of this revenue[439]. - Revenues from energy supply are recognized when delivery occurs, with unbilled supply estimated based on contracted volume and historical data showing minimal differences between estimated and actual revenues[462][463]. - Revenue from the use of distribution systems (TUSD) increased by 14.10% year-on-year, reaching R$3,448 million in 2021, driven by a 10.27% rise in energy transported[496]. - Revenue from transactions in energy on the CCEE surged by 651.30% year-on-year to R$1,157 million in 2021, attributed to excess energy compared to deficit positions in 2020[498]. - Revenue from gas supply rose by 72.55% to R$3,470 million in 2021, reflecting increased sales volume in the wholesale market, particularly in the thermal and industrial segments[498]. Financial Performance - Total revenues from energy sales reached R$26,665 million in 2021, a 15.5% increase from R$23,009 million in 2020[474]. - Net revenues increased by 33.37% from R$25,228 million in 2020 to R$33,646 million in 2021[489]. - Total revenue from energy sold to final customers was R$26,651 million, a 15.78% increase from R$23,018 million in 2020[490]. - The company reported a net loss of R$892 million in 2021 due to exposure to foreign exchange rate changes[484]. - Operating costs and expenses increased by 31.75% to R$28,236 million in 2021, with energy purchase for resale accounting for R$16,101 million, a 32.95% increase from 2020[501]. Tariff Adjustments - Average rate for industrial customers decreased to R$322.41 per MWh in 2021 from R$327.62 in 2020, while residential rates increased to R$994.43 from R$899.31[474]. - Average annual tariff adjustment for CEMIG D was 1.28% in 2021, compared to 0.00% in 2020 and 8.73% in 2019[477]. - The annual tariff adjustment effective from May 25, 2021, resulted in an average increase of 1.28% on customer tariffs[491]. Investments and Capital Expenditures - CEMIG plans to allocate approximately R$3,679 million for capital investments in 2022, primarily for the expansion of its distribution system[570]. - CEMIG invested approximately R$27.6 million in research and development (R&D) projects[568]. - The company has planned capital injections of R$122 million into subsidiaries to meet specific capital needs[570]. Debt and Financing - Total loans and financings amounted to R$9,899 million as of December 31, 2021, down from R$11,364 million in 2020[558]. - The company repurchased US$500 million of its Eurobonds, reducing the principal of this debt to US$1.0 billion, maturing in 2024[563]. - The total amount of debt in foreign currency was R$5,601 million, a decrease from R$7,825 million in 2020[558]. - The company’s total debentures reached R$5,705 million, a decrease from R$7,106 million in the previous year[558]. Employee and Management Information - Total remuneration for key personnel in 2021 was R$28 million, a slight increase from R$27 million in 2020 and R$25 million in 2019[595]. - The Executive Board consists of seven members, elected for a two-year term, with the current term expiring at the Annual General Meeting in April 2024[589]. - The company had 190 management-level employees as of December 31, 2021, compared to 179 in 2020 and 185 in 2019[608]. - The 2021-2023 Collective Work Agreements included an economic benefits adjustment of 11.08% to compensate for inflation, effective from November 1, 2021[610]. Governance and Compliance - The Audit Committee is composed of four independent members, providing oversight on financial statements and internal controls[601]. - The company is currently facing civil actions involving allegations of administrative impropriety related to past business purchases[584]. - The board includes members with significant academic and professional qualifications, enhancing its governance capabilities[581]. Operational Performance - The total volume of energy sold by CEMIG in 2021 increased by 1.46% compared to 2020, reaching 54,087 GWh[493]. - Energy consumption by industrial customers rose by 28.51% in 2021 compared to 2020, reflecting new contracts for sales to free clients[494]. - The total volume of energy sold to final customers was 43,229 GWh in 2021, compared to 38,390 GWh in 2020, marking an increase of 12.5%[474].

Financial Reporting and Accounting Standards - The consolidated financial statements have been prepared in accordance with IFRS and presented in millions of Reais[322]. - The company reported significant estimates and judgments affecting the financial statements, including adjustments for loss on doubtful accounts and deferred income tax[327]. - The company intends to adopt new and amended accounting standards when they become effective, as disclosed in the financial statements[331]. - The Company assesses impairment of financial assets using historical trends and management's judgment, adjusting for current economic conditions[346]. - Deferred tax assets and liabilities are recognized for temporary differences, with a review at the reporting date to ensure realization is probable[353]. - The liability for retirement benefit pension plan obligations is recorded as the greater of the amortization amount or the present value of actuarial obligations, adjusted for unrecognized gains and losses[347]. Revenue Recognition - The Annual Permitted Revenue (RAP) is recognized when the performance obligation is satisfied, with revenues from energy transmission concession contracts recorded accordingly[338]. - Revenue from energy sales is recognized based on actual consumption during each 30-day billing period at specified rates, with adjustments for peak demand[359]. - Revenues from gas sales are recorded upon delivery, with unbilled amounts estimated based on contracted supply and historical accuracy[359]. - Revenue from the Tariff for Use of the Distribution System (TUSD) increased by 11.02% year-on-year, reaching R$3,022 million in 2020[398]. - CEMIG recognized a revenue of R$455 million from tariff adjustments in 2020, significantly higher than R$58 million in 2019, primarily due to increased energy costs[399]. Financial Performance - Total revenues for the year ended December 31, 2020, were R$23,018 million, a decrease of 4.31% compared to R$24,052 million in 2019[369]. - Net revenues decreased by 1.02% from R$25,486 million in 2019 to R$25,228 million in 2020[386]. - Revenue from energy sales to final customers was R$23,018 million in 2020, a decrease of 4.30% compared to R$24,052 million in 2019[389]. - The total volume of energy sold by CEMIG decreased by 1.52% in 2020 compared to 2019, with residential consumption increasing by 4.20%[392]. - CEMIG D's total energy sales to other concessionaires increased by 16.68% compared to 2019[396]. Operating Costs and Expenses - Operating costs and expenses decreased by 4.64% to R$21,432 million in 2020, down from R$22,475 million in 2019[413]. - Charges for the use of the national grid rose by 22.58% to R$1,748 million in 2020, compared to R$1,426 million in 2019, due to annual adjustments[418]. - Operating provisions decreased by 82.38% to R$423 million in 2020, down from R$2,401 million in 2019, mainly due to reassessment of legal provisions[419]. Cash Flow and Financing - Cash and cash equivalents increased to R$1,680 million as of December 31, 2020, up from R$536 million in 2019, primarily due to net cash generated from operating activities of R$8,607 million in 2020 compared to R$2,036 million in 2019[460]. - The company used net cash of R$5,076 million in investing activities in 2020, significantly higher than R$1,188 million in 2019, reflecting increased investments in marketable securities[461]. - Total indebtedness as of December 31, 2020, was R$15,020 million, comprising R$2,059 million in current debt and R$12,961 million in non-current debt, an increase from R$14,777 million in 2019[463]. - The company’s total loans and financings as of December 31, 2020, included R$7,825 million in foreign currency debt, reflecting a strategic approach to managing currency exposure[463]. Governance and Management - The Board of Directors of CEMIG comprises nine members, with a structure that ensures representation from minority shareholders and employees[484]. - The Executive Board consists of seven Executive Officers, elected for a two-year term, with the possibility of re-election for a maximum of three consecutive terms[492]. - The Fiscal Council is composed of five members, with a majority elected by the controlling shareholder, ensuring independent oversight of financial statements[499]. - The company has established a healthcare plan applicable to Executive Officers, aligning benefits with those of other employees[498]. Employee and Labor Relations - As of December 31, 2020, CEMIG had a total of 5,254 employees, a decrease from 5,596 in 2019 and 6,083 in 2018[506]. - In 2020, CEMIG distributed 4.3% of its profits to employees, compared to 4% in 2019 and a potential maximum of 7.5% based on exceeding budget targets[511]. - Total employee benefits paid in 2020 amounted to R$183 million, including R$100 million for pension contributions and R$83 million for assistance benefits[513]. Impact of Covid-19 - The company suspended energy supply interruptions for low-income residential customers during the Covid-19 pandemic[378]. - CEMIG D received a total of R$1,404 million from the "Covid-Account" to support its cash flow during the pandemic[381]. - The industrial sector's energy consumption decreased by 14.40% in 2020 due to the impact of the Covid-19 pandemic[394]. Future Outlook and Investments - CEMIG plans to allocate approximately R$2,347 million for capital investments in 2021, primarily for the expansion of its distribution system[477]. - The total purchase of energy from various sources is projected to be R$187,418 million from 2021 to 2026, with the highest annual purchase in 2025 at R$9,571 million[480].

Financial Performance - Total net operating revenue for the year ended December 31, 2019, was $6,317 million, an increase from $5,985 million in 2018[23] - Energy sales to final customers amounted to $5,985 million, contributing significantly to the total revenue[23] - Operating costs and expenses totaled $5,593 million for the year ended December 31, 2019, compared to $5,593 million in 2018[23] - The company reported a share of profit from affiliates and jointly-controlled entities of $31 million for the year ended December 31, 2019[23] - Revenue from wholesale supply to other concession holders was $716 million, showing a decrease from $990 million in the previous year[23] - Construction revenue reached $299 million, reflecting a stable performance compared to previous years[23] - The company recognized $355 million in recovery of PIS/Pasep and Cofins taxes credits over ICMS[23] - Total deductions from revenue were $3,069 million, which is consistent with the previous year's figures[23] - Net income for the year was $778 million, a decrease of 75% compared to $3,128 million in the previous year[25] - Comprehensive income for the year was $516 million, a decrease from $2,073 million in the previous year[25] - Basic earnings per common share were $0.53, down from $2.14 in the previous year[25] - The diluted dividends per share for common stock were US$0.13 in 2019, down from US$0.15 in 2018, representing a decline of 13.3%[30] Assets and Liabilities - Total assets amounted to $12,422 million, down from $49,926 million year-over-year[27] - Total current liabilities were $1,968 million, a reduction from $7,913 million in the prior year[27] - Non-current loans, financing, and debentures totaled $2,993 million, down from $12,030 million year-over-year[27] - Total loans, financing, and debentures amounted to R$14,777 million as of December 31, 2019, reflecting a 0.03% increase from R$14,772 million in 2018 and a 2.63% increase from R$14,398 million in 2017[61] - 38.77% of the company's existing loans, totaling R$5,729 million, are due within the next three years, indicating a significant liquidity risk[61] - CEMIG has approximately R$ 10.7 billion of outstanding debt with financial covenant restrictions[51] Regulatory and Compliance Issues - The company adopted IFRS 16, impacting the recognition of lease liabilities and right-of-use assets starting January 1, 2019[18] - The financial statements for the year ended December 31, 2019, are not directly comparable to prior years due to the adoption of IFRS 9 and IFRS 15[19] - CEMIG is subject to penalties of up to 2.0% of revenues for non-compliance with concession agreements[44] - The Brazilian Federal Government has discretionary authority over new concessions and renewals, which could adversely affect CEMIG's operations[47] - Changes in Brazilian tax law could increase CEMIG's tax burden, affecting profitability[48] - The company is subject to various regulatory frameworks, including the Brazilian energy sector laws and the Anticorruption Law, which increases its exposure to compliance risks[113][115] Operational Challenges - The company is closely monitoring the impacts of the Covid-19 pandemic on its operations and financial condition, with potential long-term effects on liquidity and revenue[37] - The company has not yet determined the full extent of potential delays or impacts on its business due to the pandemic, indicating uncertainty in future performance[37] - The company faces risks related to the completion of construction projects, which may incur unexpected costs and delays[73] - The company's operational performance is highly dependent on the availability and quality of its equipment, with potential penalties for service disruptions[58] - The company is engaged in discussions with regulators to ensure adequate liquidity and compliance with contracts in the energy sector supply chain[35] Market and Economic Conditions - The average exchange rate for 2019 was R$3.9440 per US$1.00, compared to R$3.6513 in 2018, indicating a depreciation of the Brazilian Real[33] - The energy demand measured by the Brazilian Interconnected Power Grid (SIN) decreased by 18.3% since March 2020, impacting the company's revenue[35] - Adverse hydrological conditions in Brazil could lead to rationing of water and energy, significantly impacting the company's operations and financial results[90] - The company faces a potential deficit of approximately R$ 8.24 billion in the short-term market due to injunctions preventing full charging of hydrological risk[90] - Political and economic instability in Brazil could lead to increased volatility in the securities market, affecting Gasmig's access to international financial markets[164] Environmental and Social Risks - The risk of dam failures poses significant potential economic, social, and environmental repercussions for the company[81] - The company is subject to various environmental regulations that may impose additional costs and operational restrictions[84] - Changes in environmental regulations could delay project implementation and increase expansion costs, adversely affecting financial results[133] Investment and Divestment Activities - The divestment program initiated in 2017 aims for R$8,046 million in asset sales, with R$2,071 million already sold, but external factors may hinder future sales[62] - CEMIG's subsidiary Renova sold its equity interest in the Alto Sertão II Wind Farm Complex for R$1.15 billion, with potential earn-out provisions of up to R$100 million[211] - CEMIG initiated the sale of its entire equity interest in Light S.A., which was 52.12% at the time, with a significant reduction in its holding to 22.58% after a public offering[215] Internal Control and Governance - CEMIG's internal control over financial reporting was deemed ineffective for the years 2016 to 2019, which may adversely affect its financial condition[116][117] - The company has implemented measures to strengthen internal controls and compliance following identified irregularities in Renova[102] - CEMIG's management has identified material weaknesses in internal controls, raising concerns about accurate financial reporting in the future[117]

Financial Performance - Total net operating revenue for 2018 was $5,738 million, an increase from $5,004 million in 2017, representing a growth of approximately 14.6%[32] - Energy sales to final customers reached $5,639 million in 2018, compared to $5,004 million in 2017, indicating a year-over-year increase of about 12.7%[32] - Revenue from wholesale supply to other concession holders decreased to $771 million in 2018 from $990 million in 2017, reflecting a decline of approximately 25.5%[32] - The company reported a net income of $448 million for 2018, up from $1,742 million in 2017, which is a decrease of about 74.2%[33] - Basic earnings per common share for 2018 were $0.30, down from $1.17 in 2017, indicating a decline of approximately 74.4%[33] - Operating costs and expenses totaled $5,004 million in 2018, an increase from $19,420 million in 2017, which is a decrease of about 74.2%[32] - The company experienced a finance expense of $133 million in 2018, compared to $518 million in 2017, showing a reduction of approximately 74.3%[32] - The share of loss from associates and joint ventures was $27 million in 2018, down from a profit of $104 million in 2017, indicating a significant change[32] - The company reported a comprehensive income of $329 million for 2018, compared to $1,279 million in 2017, reflecting a decrease of approximately 74.2%[33] Assets and Liabilities - Total assets increased to $59,855 million in 2018, up from $42,240 million in 2017, representing a 41.8% growth[34] - Total current assets decreased to $27,796 million in 2018 from $8,537 million in 2017, a decline of 68.5%[34] - Total liabilities rose to $59,855 million in 2018, compared to $42,240 million in 2017, marking a 41.8% increase[34] - Current loans financing and debentures decreased to $2,198 million in 2018 from $2,371 million in 2017, a reduction of 7.3%[34] - Total equity increased to $15,939 million in 2018, up from $14,330 million in 2017, reflecting an increase of 11.2%[34] - The total current liabilities decreased to $23,394 million in 2018 from $8,663 million in 2017, a decline of 73.1%[34] Dividends - Dividends per share for common shares increased to R$0.59 in 2018 from R$0.03 in 2017, a significant increase of 1,867%[35] - Dividends per ADS for common shares rose to US$0.15 in 2018 from US$0.01 in 2017, an increase of 1,400%[35] - The company reported a total of 487,614,144 basic common shares outstanding in 2018, unchanged from 2017[35] Regulatory and Compliance Issues - CEMIG GT's compliance with concession agreements is critical, as non-compliance could lead to penalties or revocation of concessions by ANEEL[66] - CEMIG has approximately R$11.0 billion of outstanding debt with financial covenant restrictions, and any breach could have severe negative consequences[82] - The company is subject to extensive governmental regulations that could materially affect its business and financial condition[72] - Non-compliance with annual targets for service quality could limit dividend distributions or require capital injections[71] - The company faces risks related to operational disruptions that could adversely affect its financial condition and results of operations[90] Operational Challenges - The total past-due receivables owed by customers was approximately R$1,381 million, representing 6.20% of consolidated net revenue in 2018, up from 4.78% in 2017[109] - CEMIG's Total Losses Index as of December 31, 2018, was 12.82%, with technical losses at 8.77% and non-technical losses at 4.05%, which was above the regulatory target of 11.75%[111] - A provision for doubtful receivables was recorded at R$751 million in 2018, an increase from R$568 million in 2017[109] - The company faces risks related to the construction and expansion of facilities, which may lead to increased costs and lower profitability than expected[106] - Regulatory challenges and environmental demands could impose additional costs and delays on the company's projects[118] Environmental and Market Conditions - Brazil's energy supply is heavily reliant on hydroelectric plants, which are affected by climatic conditions, leading to potential adverse impacts on the company's operations and financial condition[128] - Adverse hydrological conditions in the Brazilian southeast have caused drought and water scarcity, particularly in São Paulo, Minas Gerais, and Rio de Janeiro, which could worsen during the dry season from April to September[128] - The Energy Reallocation Mechanism (MRE) aims to mitigate the impact of variability in hydroelectric generation, but it does not eliminate risks, especially during extreme hydrological shortages[131] - The MRE can reduce assured energy levels by 20% or more in years of poor rainfall, leading to negative exposure in the short-term market[144] Legal and Investigative Matters - CEMIG holds an 11.69% indirect minority stake in Norte Energia S.A., with estimated losses of R$183 million recorded in its consolidated financial statements for the year ended December 31, 2015, due to alleged illegal acts by service providers[153][154] - CEMIG has an indirect stake of 36.23% in Renova, which is under investigation for capital injections by controlling stockholders[156] - An internal investigation by Renova found deficiencies in internal controls, but no evidence supporting allegations has been uncovered so far[157] - CEMIG is also under investigation regarding investments in Guanhães Energia S.A. and MESA, with no current determination on the outcomes[158] - The company hired an independent firm to analyze internal procedures related to these investments, with no effects recorded in consolidated financial statements[159] Governance and Risk Management - CEMIG's internal controls over financial reporting were deemed ineffective for the years ending December 31, 2016, 2017, and 2018, indicating material weaknesses[186] - The company faces risks related to potential fraud and corruption, which could adversely affect its business and reputation[165] - CEMIG's governance and compliance processes may not fully prevent regulatory penalties or damages to its reputation[178] - Cybersecurity threats pose risks of operational interruptions and potential leaks of confidential information, which could lead to financial losses[188] - The company has provisions for legal risks totaling R$641 million as of December 31, 2018, for actions assessed as "probable" losses[210] Economic Environment - Inflation rates in Brazil were recorded at 3.75% in 2018, 2.95% in 2017, and 6.29% in 2016, indicating historical volatility in the economic environment[198] - The company is exposed to fluctuations in domestic interest rates and inflation, which can affect financial expenses and overall financial results[200] Future Outlook - Future outlook includes a focus on expanding energy distribution systems and enhancing operational efficiencies to drive revenue growth[32]