Light : 2016-01-29T12:49:05 Frequently Asked Questions - FAQ

EBITDA means for any period, the Net Income of Light S.A. and its subsidiaries, calculated on a consolidated basis for this period, accrued of, provided that deducted in the calculation of Net Income, without duplicity, the sum of (a) expenses related to taxes over Net Income, (b) Adjusted and Consolidated Expense of Gross Interest, (c) amortization and depreciation expense, (d) extraordinary and non-recurring losses and (e) other operational items which do not typify cash outflow and reduce the Net Income, less, provided that included in the calculation of this Net Income, without duplicity, (i) financial income, (ii) any extraordinary and non-recurring gains, and (iii) other operating revenues increasing the Net Income and not typifying cash inflow;

From time to time, Light discloses so-called non-GAAP financial measures, primarily EBITDA. EBITDA means income before net financial expenses, income and social contribution taxes, depreciation and amortization. EBITDA is not Brazilian or the U.S. GAAP measurement, does not represent cash flows for the periods presented and should not be considered alternatives to net income as an indicator of Light's operating performance or as an alternative to cash flows as an indicator of liquidity. EBITDA does not have a standardized meaning and Light's definition of EBITDA may not be comparable to EBITDA as used by other companies.

Although the EBITDA does not provide, according to the Brazilian Accounting Principles (BR GAAP) or the U.S. Accounting Principles (US GAAP), measures of the operational cash flows, Light management uses EBITDA to measure its operating performance. Additionally, the Company management believes that disclosure of EBITDA can provide useful information to investors, financial analysts and the public in their review of the Company's operating performance and its comparison to the operating performance of other companies in the same industry and other industries.