ELP Companhia Parana De Energ

1 Considers discontinued operations

In 2023, A new journey began to Copel’s history. Our common shares valued in 43%, while preferred shares grew by 36%, bringing the company to a market value of R$29.8 billion. Throughout the year, we led the company's transformation into a corporation with dispersed capital and no controlling shareholder (“True Corporation”). Completed in August, it reached the largest follow-on and the second largest offer in the Utilities sector in the West in 2023, moving R$5.2 billion. Of these, R$3.2 billion refers to the secondary offer from the State of Paraná and R$2.0 billion to the primary offer, an amount that will be used to pay the grant bonus for the full renewal of the concessions of the three largest hydroelectric plants of Copel (Foz do Areia, Salto Segredo and Salto Caxias), which together add up to 4.2 GW of installed capacity (approximately 60% of the Company's total capacity).

This achievement goes beyond the renewal of these fundamental concessions. As a corporation, with a private legal nature, Copel gains better conditions to operate in the competitive and challenging environment of the electricity sector, with efficiency gains and the real possibility of leveraging investment conditions. We combine Copel's 69-year history of contributions to the national electricity sector with a more competitive, sustainable and innovative future, contributing to the development of Paraná and Brazil. The success of the transformation process into a corporation was aligned with the company's other operations. We achieved an adjusted EBITDA of R$5.8 billion and a net income of R$2.3 billion, an increase of 102% compared to the previous year. In 2023, we made the largest investment in the history of Copel Distribuição with an investment of R$2 billion for the modernization, expansion and automation of Paraná's electrical infrastructure. Thus, at the end of the year we achieved historic efficiency, with adjusted EBITDA exceeding regulatory EBITDA by 28%.

In a challenging year, faced with a scenario of constant low energy prices, Copel Geração e Transmissão managed to achieve the enviable amount of R$3.5 billion in adjusted EBITDA in its continuing operations. For the third consecutive year, Copel Mercado Livre was among the largest traders in the country in terms of energy volume. Faced with the challenge of managing uncontracted energy from Copel GeT and facing another stage in the expansion of the free market starting in 2024, we restructured our trader and invested in digitalization and efficiency, integrating and centralizing Copel's energy planning.

Focused on our sustainable agenda, we completed the acquisition of the Aventura and Santa Rosa & Mundo Novo Wind Complexes, with 260.4 MW of installed capacity, and we are about to complete the divestment in the Araucária Gas Power Plant (UEGA) and consolidate a generator matrix practically 100% renewable. And, in line with the strategy of concentrating our operations in the electricity sector, we continued with the process of selling our shareholding in Compagas.

Expanding the frontiers of innovation, we created a Corporate Venture Capital fund with a commitment to invest R$150 million over 10 years. We have already made our first contributions: at Move, a start-up that works with electric mobility and offers electric charger management solutions.

The constant focus on results and our ability to achieve led Copel to the Morgan Stanley Capital Index (MSCI) seal, an important global reference index for institutional investors. We also ranked for the 18th time in the corporate sustainability ranking (ISE) and in the Efficient Carbon Index (ICO2), both from B3.

Finally, I reinforce that in 2024 we will continue on a journey of operational excellence, in the discipline of capital allocation and execution of our strategic plan. We believe that Copel's integrated operations, with a relevant presence in the Generation, Transmission, Distribution and Trade business, is one of our great competitive differentiators and will allow the Company to continue generating value for all stakeholders.

All of this represents, on the eve of the celebration of the company's 70th anniversary, some of the perennial hallmarks of Copel's operations since its inception: innovation, sustainability, solidity and permanent commitment to the customer.

RESULTS | 4Q23

List of contents

The following analyzes refer to the fourth quarter of 2023 and the year to date, compared to the same period in 2022.

1.1 EBITDA

Adjusted EBITDA from continuing operations (excluding Compagas and UEGA, which are in the process of being sold) and excluding non-recurring items, grew 10.1% in 4Q23 (R$1,482.9 compared to R$1,347.0 million in 4Q22 ) reflecting, above all, the better result of Copel Distribuição (+35.6%). When including the result of discontinued operations, adjusted EBITDA reached R$1,493.6 million, an amount 4.6% higher than the R$1,427.6 million recorded in 4Q22 and, also, when excluding the effects of the equity in earnings of subsidiaries (that is, adjusted EBITDA with all operations and without equity in earnings of subsidiaries) there was an increase of 11.8% (R$1,430.5 million in 4Q23 compared to R$1,279.2 million in 4Q22).

Therefore, the main factors that explain the growth in results in the quarter are, mainly, (i) the 8.0% growth in the billed grid market, (ii) the tariff adjustment in June 2023, with an average effect of 6.32% in Tariffs for the Use of the Distribution System (TUSD), and (iii) the increase of 5.4% (+R$8.1 million) in other operating revenues, mainly because of leases and rentals of equipment and structures and sharing of posts. Also contributing to the result were: (i) Copel GeT's better performance in the purchase and sale of electricity (+R$50.9 million 4Q23 compared to 4Q22), due to the scenario of greater hydrology in 4Q23 (average GSF of 83.8%, compared to 77.6% in 4Q22) and the increase in results from the Aventura and Santa Rosa & Mundo Novo – SRMN Wind Complexes, acquired on January 30, 2023 (+ R$29.1 million in adjusted EBITDA); and (ii) the reversal of provisions in 4Q23 mainly due to the reversal of R$83.0 million in regulatory litigation within the scope of Copel GeT, effect of Aneel Order No. 4,758 of December 5, 2023 which deals with the calculation methodology of the Surplus and Deficit Compensation Mechanism (MCSD)^[1].

These events were partially offset, above all, by (i) lower remuneration on transmission agreement assets, mainly due to the periodic tariff review applied to the agreements and lower inflation in the comparison between periods (IPCA of 1.08% in 4Q23 compared to 1.63% in 4Q22), with a reduction of R$15.9 million in Copel GeT's revenue from use of the main transmission grid and R$85.3 million in equity in earnings of subsidiaries; and (ii) the reduction of R$30.2 million in revenue from wind farms^[2] due to generation diversion in the comparison between periods, essentially due to the operational restriction imposed by the ONS (Constrained-off).

Adjusted Consolidated EBITDA

Obs. Considers descontinued operations.

The non-recurring items that were neutralized to calculate adjusted EBITDA are shown in the following table:

^[1] Due to the renegotiation of the hydrological risk in the ACR in 2016, which extended the validity period for plants with existing energy in the period from 05/24/2023 to 09/17/2023, Copel GeT, understanding that the amounts originally contracted in the auctions must be fully rehired, without subsequent reductions caused by the Surplus and Deficit Return Mechanism – MSCD 4% and monthly, filed a precautionary measure with Aneel, accepted by the agency, to suspend the effects of the MCSD in this process.

^[2] More details in Item 3. Generation and Transmission.

In 4Q23, the following non-recurring items were recorded: (i) the partial reversal of impairment of generation assets in the amount of R$123.7 million, mainly explained by the reversal of R$105.1 million relating to HPP Colíder and R$24.1 million referring to HPP Baixo Iguaçu, due to the reevaluation of calculation assumptions considering a reduction in operating costs and the discount rate (WACC) from 5.71% p.a. to 5.43% p.a. (more details in explanatory note 16.4.1 of the Financial Statements); (ii) the provision for additional litigation in the amount of R$51.1 million, in accordance with the agreement signed to close the arbitration process (more information in Explanatory Note 40.1 of our Financial Statements); (iii) reversal of R$26.4 million due to the review of accounting recognition carried out in 3Q23 which dealt with recording the extension of the concession period for HPP Mauá in intangible assets^[3]; and (iv) R$11.4 million referring to the fair value of energy purchase and sale contracts (mark to market) from Copel Mercado Livre, an amount determined by the difference between the contracted price and the future market price estimated by the Company.

In 2023, adjusted EBITDA from continuing operations (disregarding Compagas and UEGA, which are in the process of being sold) and excluding non-recurring items, reached R$5,693.4 million, growth of 6.5% in relation to R $5,343.6 million recorded in 2022. This result is mainly explained by (i) the better performance of Copel Distribuição with the increase of R$499.2 million in “Parcel B”, essentially due to the increase in the market and tariff adjustments applied in June 2022 (+16.55%) and June 2023 (+6.32%) in tariffs for the use of the distribution system (TUSD); (ii) the increase in the result of wind power generation assets, mainly due to the entry into commercial operation of the Jandaíra Wind Complex (+R$42.7 million in adjusted EBITDA) and the acquisition of the Aventura and SRMN Wind Complexes (+R$109.0 million in adjusted EBITDA); and (iii) the higher result of Copel Mercado Livre (adjusted EBITDA of R$112.6 million in 2023 compared to R$90.3 million in 2022), mainly due to the improvement in energy trading margins. These events were partially offset, especially by the decrease in Elejor's results, due to the lower margin in electricity sales, and by the drop in remuneration on transmission assets of subsidiaries (Costa Oeste, Marumbi and Uirapuru) and jointly controlled ventures, mainly due to the periodic tariff review applied to the agreements and lower inflation when comparing periods (IPCA of 4.62% in 2023 compared to 5.79% in 2022).

^[3] Reversal made due to the fact that the exclusion of liability only shifts the plant's concession period in time, with the extension of the concession period being related to the construction period, i.e., not generating additional revenues correlated to the asset.

Within the scope of transmission assets, item 3.1.1 presents the regulatory accounting of results for the purpose of verifying the IFRS (International Financial Reporting Standards) effect.

1.2 Operating Revenue

Net operating revenue from continuing operations totaled R$5,567.7 million in 4Q23, growth of 5.8% compared to the R$5,264.8 million recorded in 4Q22. This result is mainly a reflection of:

These increases were partially offset by (i) the reduction of R$376.4 million in the result of sectorial financial assets and liabilities (CVA), due to the drop in energy costs; and (ii) the decrease of R$117.4 million in revenue from electricity sales to distributors, essentially a consequence of the 17.8% reduction in the amounts of electricity sold by Copel Mercado Livre through bilateral contracts.

The other variations in operating income were:

In 2023, net operating revenue totaled R$21,479.5 million, an increase of 4.6% compared to the R$20,535.3 million recorded in 2022, with emphasis on the following variations: (i) increase of R$1,173.4 million (+24.3%) in revenue from “Use of the main distribution and transmission grid”; (ii) increase of R$436.1 million (+5.8%) with “electricity sales to final customers”; (iii) increase of R$169.7 million (+7.8%) in construction revenue; (iv) growth of R$99.3 million (+21.5%) in the “other operating revenues” item; (v) reduction of R$705.7 million (-42.1%) in the result of sectorial financial assets and liabilities; and (v) a drop of R$211.6 million (-5.5%) in revenue from “electricity sales to distributors”.

1.3 Operational Costs and Expenses

In 4Q23, operating costs and expenses from continuing operations totaled R$4,445.1 million, a reduction of 6.7% compared to the R$4,765.5 million recorded in 4Q22, mainly due to:

These reductions were partially offset by:

^[4] This is a sentence relating to the removal of the Inspection Fee for the Use or Occupation of the Highway Right-of-Way – TFDER, provided for in State Law no. 17,445/2012

Neutralizing the effects of provisions related to PPD and PLR, there is an increase of 1.1% in the quarterly comparison, despite the effects of ACT 2022/2024 with salary bonus in 4Q23 and salary adjustments of 7.19% in January and 4.51% in October of the current year. Considering the accumulated inflation measured by the National Consumer Price Index – INPC, of 3.71% between 4Q22 and 4Q23, there was a reduction in real terms of 2.5%, due to the reduction of 71 employees in the comparison between periods.

Headcount Evolution

In 2023, total operating costs and expenses reached R$18,092.6 million, a value 4.9% higher than the R$17,254.6 million recorded in 2022, mainly justified by (i) higher expenses with personnel and management, due to (a) the provisioning of R$610.1 million in 2023 referring to the Voluntary Dismissal Program (PDV), as per Notice to the Market 23/23, (b) the increase of R$134.0 million in the amount intended for the payment of performance bonuses (PPD) and profit sharing (PLR), resulting from the Company's best results and performance related to short-term goals, and (c) compensation of R$138.2 million paid in January 2023 regarding the bonus of the additional third of vacation, after a collective agreement signed with employees; and (ii) the increase of R$408.7 million with charge of the main distribution and transmission grid, mainly due to the higher costs of transporting energy on the basic grid. These events were partially offset, especially, by reductions of R$380.7 million in electricity purchased for resale and R$625.3 million in provisions and reversals.

Considering the impact of the provision for the allocation of PIS and Cofins credits in 2022 (R$810.6 million), total operating costs and expenses increased by 0.2% (R$18,092.6 million in 2023 compared to R$18,065.1 million in 2022).

Breakdown of Costs and Expenses

It is worth mentioning that the company, in 2023, changed the method of accounting for the “monetary update on provisions for litigation” item, which was no longer recorded in the provisions and reversals line and began to form part of financial expenses. More information in Explanatory Note 28.1 of our Financial Statements.

1.4 Equity in Earnings of Subsidiaries

The equity result of joint ventures and other Copel associates reduced R$85.3 million compared to that recorded in the same period of the previous year (R$63.1 million, compared to R$148.5 million recorded in 4Q22), due to the lower remuneration on transmission agreement assets, basically explained by the periodic tariff review applied to transmission agreements and the lower inflation (IPCA) in 4Q23 (1.08% compared to 1.63% in 4Q22). More details can be seen in Appendix I.

1.5 Financial Results

In 4Q23, the financial result was a negative R$305.7 million, compared to a negative R$279.7 million recorded in 4Q22.

Financial expenses registered an increase of R$65.8 million, basically due to the growth of R$36.0 million in monetary variation and debt charges due to the greater volume of loans and financing (R$15.0 billion in 4Q23 compared to R$ 12.5 billion in 4Q22) and the greater impact of monetary variation and adjustment to present value on accounts payable linked to the concession (+R$25.1 million), referring to the UBP (Use of Public Asset) of Elejor. Financial expenses were also impacted by the voluntary change in the accounting method for the “monetary update on provisions for litigation” item, which was no longer recorded in the provisions and reversals line and became part of financial expenses. More information in Explanatory Note 28.1 of our Financial Statements.

Financial revenues increased by R$39.9 million, reflecting, above all, the higher income from investments (+R$64.4 million), essentially due to the greater volume of investments coming from cash resources, partially offset due to the drop in the remuneration of sectoral financial assets and liabilities (-R$ 41.7 million) within the distributor.

In the 2023 consolidated, excluding the effect of updating the provision for the allocation of PIS and Cofins credit, the financial result was negative by R$1,205.0 million compared to R$994.6 million recorded in 2022, essentially justified by the growth of R$284.5 million with monetary variation and debt charges, resulting from the greater volume of loans and financing.

1.6 Consolidated Net Income

Copel recorded in 4Q23, considering discontinued operations, net income of R$942.8 million compared to R$623.5 million in 4Q22 (an increase of 51.2%). In addition to the items already mentioned, the reversal of impairment at UEGA in the amount of R$258.6 million contributed to the growth in results, as a result of the signing of the share purchase and sale contract – CCVA, according to Material Fact 20/23.

Also noteworthy is the difference of R$627.7 million in income tax and social contribution, mainly reflecting the recognition of the PIS/COFINS provision in 2022, impacting the result and deferred taxes.

Considering the accumulated result for 2023, the net income recorded, considering discontinued operations, was R$2,327.2 million compared to R$1,149.3 million recorded in 2022.

1.7 Debt

Copel's total consolidated debt, considering the results of continuing operations, totaled R$14,962.3 million on December 31, 2023, a variation of 20.1% in relation to the amount recorded on December 31, 2022, of R$12,454.2 million.

At the end of 2023, the Company's gross debt represented 61.8% of consolidated net equity, which was R$24,191.7 million.

The following table and graphs demonstrate the indebtedness of Copel and its subsidiaries at the end of 2023.

Debt by Subsidiary

Adjusted Net Debt/EBITDA Adjusted

Debt Indexers Average cost: 8.72%

Amortization - R$ million Average term to maturity: 4.0 years

Weighted Average Cost and Average term to maturity

Copel's consolidated debt at the end of 2023, considering the 4th issuance of simple debentures by Compagas in July 2023 in the amount of R$295.0 million, totaled R$15,246.5 million.

2.1 Investment Policy

In March 2021, the Board of Directors approved the Company's Investment Policy. Said Policy was subject to analysis and approval by the Investment and Innovation Committee, which was established by the new Bylaws of March 11, 2021, whose main purpose is to improve discipline in the allocation of capital, being an essential tool for the execution of the strategic guidelines for sustainable growth, generation of value for shareholders and the perpetuity of our energy business.

The Policy establishes the criteria for selecting, prioritizing, evaluating, approving and monitoring investments. Among the various aspects, the Policy segregates investment opportunities into three groups that will be prioritized as follows:

The Investment and Innovation Committee meets ordinarily once a month and extraordinarily whenever necessary, analyzing and issuing recommendations for the Company's investment proposals.

2.2 Investment Program

Investment Programs follow their schedules in each development project. In 2023, the amount realized from the investment program was R$2,252.1 million (99.1% of the forecast), of which R$1,966.5 million was made by Copel Distribuição, R$240.1 million by Copel Geração e Transmissão, R$40.7 million by Copel Serviços and R$4.8 million by Copel Holding and Copel Mercado Livre.

The investments made at Copel Distribuição aim to expand and automate the electrical infrastructure in the concession area, mainly through the “Paraná Trifásico”, Smart Grid and Total Reliability programs (see item 4.2.4). Of the amount allocated in the year, 95.0% was allocated to investments in electrical assets, 4.4% to investments in non-electrical assets and 0.6% to other investments.

¹ Includes "Transformation" Program composed of the Paraná Trifásico, Smart Grid and Total Reliability projects.

² Includes the Facilities Modernization Plan - PMI.

³Includes modernization of COGT (Generation and Transmission Operation Center), HPP GPS Parigot de Souza, SHPs Marumbi and Uirapuru, Jandaíra Wind Complexes and other projects.

⁴ Considers innovation plan within the energy sector and aligned with Copel's investment thesis and ESG practice.

⁵ Does not consider appropriation of own labor, charges and others, as well the acquisition of the Aventura and SRMN Wind Complexes in 2023 and the Grant Bonus for the renewal of the Salto Caxias, Segredo and Foz do Areia HPP concessions, in the amount of R$3.7 billion, scheduled for 2024.

Copel GeT presented an adjusted EBITDA of R$866.0 million considering the result of the discontinued UEGA operation and excluding non-recurring items, an amount 1.2% higher than the R$855.6 million recorded in 4Q22, due to, mainly, (a) the reduction of R$96.2 million with provisions and reversals (on a recurring basis), explained, above all, by the reversal of R$83.0 million in regulatory litigation, in which Aneel accepted, through the Order Aneel No. 4,758 of December 5, 2023, Copel's challenge to the methodology for calculating the Surplus and Deficit Return Mechanism – MCSD^[5]; (b) the best result with the purchase and sale of electrical energy (+R$50.9 million), essentially justified by the reduction of R$48.3 million in acquisition costs for electricity purchased for resale, resulting from the more favorable hydrological scenario in 4Q23, with an average GSF of 83.8%, compared to 77.6% in 4Q22; and (c) addition of R$29.1 million to the result due to the incorporation of the Aventura and Santa Rosa & Mundo Novo Wind Complexes on January 30, 2023.

This result was partially offset by:

^[5] Due to the renegotiation of the hydrological risk in the ACR in 2016, which extended the validity period for plants with existing energy in the period from 05/24/2023 to 09/17/2023, Copel GeT, understanding that the amounts originally contracted in the auctions must be fully rehired, without the subsequent reductions caused by MSCD 4% and monthly, had filed a precautionary measure with the agency.

^[6] Considers the wind farms of Cutia, São Bento, Brisa Potiguar, Bento Miguel and Vilas.

Regarding non-recurring items for continuing operations in 4Q23, the following were recorded: (i) the partial reversal of impairment of generation assets in the amount of R$123.7 million, mainly explained by the reversal of R$105.1 million relating to HPP Colíder and R$24.1 million referring to HPP Baixo Iguaçu, due to the revaluation of the discount rate, after taxes, to 5.43% p.a. (5.71% p.a. in 2022) and better estimates of revenue from the sale of electricity and reduction in operating costs (more details in explanatory note 16.4.1 in the Financial Statements); ii) reversal of R$26.4 million, which had been recorded in intangible assets in 3Q23 relating to the extension of the concession period for HPP Mauá, which had its accounting recognition reviewed. In the case of the discontinued UEGA operation, the reversal of impairment was recorded (R$258.6 million), as a result of the signing of the CCVA share purchase and sale contract (more details in “Other highlights of the period” and Note in Explanatory 39 Copel's financial statements);

Expenses with PMSO, excluding provisions and reversals, increased 5.9%, mainly influenced by:

Neutralizing the effects of provisions relating to PPD and PLR, there is an increase of 5.8% in personnel and management costs in the quarterly comparison, mainly due to the effects of ACT 2022/2024 with salary bonus (+R$ 5.2 million) in 4Q23 and salary adjustments of 7.19% in January and 4.51% in October of this year, despite the reduction of 10 employees. Considering the accumulated inflation measured by the National Consumer Price Index – INPC, of 3.71% between 4Q22 and 4Q23, there was an increase in real terms of 2.0%.

In 2023, Copel GeT recorded EBITDA of R$3,466.6 with continuing operations, a decrease of 1.8% compared to 2022, mainly due to provisions for compensation from the voluntary dismissal program and compensation for the additional third of vacation, partially offset by (a) reversal of the impairment of generation assets, (b) incorporation of new wind farms (Complexo Jandaíra, Aventura and SRMN), (c) the best result with the purchase and sale of electricity in the year, explained by better hydrological conditions. Including discontinued operations and disregarding non-recurring effects, adjusted EBITDA was recorded at R$3,453.3 million, an increase of 0.8%, compared to R$3,424.4 million in the same period of the previous year.

Net income from continuing operations was R$1,634.3 million in 2023, a reduction of 11.8% compared to 2022. This result mainly reflects the negative financial result in R$ 747.4 million in 2023, compared to a negative R$ 636.0 million recorded in 2022, resulting from the increase in debt charges, reflecting the greater amount of debentures, loans and financing, being partially offset by the growth in EBITDA, by the points presented previously. Considering discontinued operations, net income reached R$1,700.5 million, 6.3% higher than in the previous year, essentially due to the reversal of the UEGA impairment.

3.1.1 IFRS effect in the Transmission segment

For the calculation, an adjustment was made considering the effects of the application of CPC47/IFRS15 in the corporate statements in the transmission business.

Copel is present in 10 states, operating in the generation and transmission business.

In the Generation business, Copel GET operates a diversified park of hydroelectric, wind and thermal plants, totaling 6,966.7 MW of installed capacity and 3,156.6 average MW of assure energy. In the Transmission business, Copel owns a total grid of 9,685 Km of transmission lines and 53 basic grid substations, considering the affiliates.

For more information on generation and transmission operational data, see Exhibit IV.

3.2.1 Generation

Copel's generating portfolio is made up of 94% of renewable sources, such as hydro and wind power.

3.2.2 Hydro and Wind Generation

The energy generation of Copel Geração e Transmissão S.A. and its wind farms in 2023 was 25,797 GWh (compared to 24,721 GWh in 2022). The increase is mainly due to the entry into commercial operation of Jandaíra Wind Farm and the acquisition of the Aventura and Santa Rosa & Mundo Novo (SRMN) Wind Complexes.

In the fourth quarter of 2023, Copel Geração e Transmissão's hydro plants (including HPP Foz do Areia and SHP Bela Vista) recorded 5,600 GWh of electricity sold, an increase of 10.7%, mainly due to CCEARs resulting from the renegotiation of the GSF.

For wind farms, the total electricity sold in 4Q23 was 1,159 GWh, an increase of 30.9%, influenced by the acquisition of the Aventura and SRMN Wind Complexes, which became part of the Company's portfolio on January 30, 2023.

3.2.3 Thermal Generation

TPP Araucária

It is a natural gas generation plant with an installed capacity of 484.2 MW that operates in a combined cycle (two gas turbines and one steam turbine) and operates in the modality known as "merchant" in which the plant operates without sales contracts. of electricity, whether in the free (ACL) or regulated (ACR) environment, subject to fluctuations in the Price for Settlement of Differences - PLD. In this modality, the thermoelectric plant is dispatched centrally by the National Electric System Operator (ONS), in situations where the Marginal Cost of Operation (CMO) of the electrical system exceeds its Variable Unit Cost (CVU) approved by ANEEL, or out of order of merit, when requested by the ONS. For TPP Araucária, which is in the process of being disinvested by Copel, there was no dispatch in 4Q23, due to hydrological conditions.

TPP Figueira

Coal-fired generation plant with an installed capacity of 20 MW, achieved after a modernization process that allowed an increase in capacity without the need to increase the volume of coal consumed. TPP Figueira resumed commercial operations on 12/07/2022, by ANEEL order no. 2502/2022. On 10/31/2023, the Company filed a letter with the Ministry of Mines and Energy requesting the withdrawal of the intention to extend the TPP Figueira concession. Concomitantly, in 4Q23 the plant was unavailable due to the obstruction of one of the coal supply lines, causing no generation in 4Q23. On 02/23/2024, Aneel decided to suspend commercial operations, more details in “Other highlights”.

In 2023, generation was 40.1 GWh.

GSF and PLD

3.3 Transmission

Copel has more than 9.6 thousand km of transmission lines in eight Brazilian states, considering its own assets and in partnership with other companies. In addition to building, maintaining and operating an extensive own energy transmission grid, Copel provides services to projects of other concessionaires with the quality of someone who has accumulated more than 60 years of experience in the sector. The Transmission projects are listed in Exhibit IV, including the projects of Copel Geração e Transmissão, SPCs Costa Oeste, Marumbi and Uirapuru Transmissora (100% Copel GeT), as well as the 7 SPCs in which Copel GeT has a stake.

3.3.1 RBSE Reprofiling

The Concession Agreement 060/2001 represents 42.3% of the annual permitted revenue (APR) of Copel GET's transmission business, also considering its affiliates. Below, we describe the flow of receipt of the portion of revenue referring to the Basic Grid - Existing System (RBSE) for the next cycles. It is important to note that this flow may change in the future, as a result of the tariff review processes and/or review of parameters used to compose these revenues by the regulatory agent. The values referring to O&M from the 2023-2024 cycle were readjusted by the IPCA.

Note:

Economic component: future values based on the 2023-2024 cycle (according to REH 3.216/2023 of 06/30/2023)

Financial component: values published in REH 2847/21. Subject to review during the current cycle in view of the controversy in the methodology used to calculate these values by the regulatory agency.

RAP values up to the 2023-2024 cycle taken from the REH of each cycle, with reference to the cycle price (June of the year of publication) RAP values include RB and DIT assets

EBITDA in 4Q23 reached R$599.1 million, growth of 35.6%, due to (i) the 8.0% growth in the billed grid market, mainly due to the high average temperature in the fourth quarter of 2023 (see item 4.2.1); (ii) the tariff adjustment of June 2023, with an average increase of 6.32% in the Tariffs for the Use of the Distribution System (TUSD); and (iii) the increase of 41.6% (+R$43.2 million) in other operating revenues, mainly referring to leases and rentals of equipment and structures and sharing of poles, including fines. In the fourth quarter there were no non-recurring items for adjustment. In the year to date, excluding the non-recurring effects listed below, adjusted EBITDA increased by 24.5%.

Manageable costs, excluding provisions and reversals, increased by 17.8% compared to 4Q22, mainly as a result of: (i) the 24.3% increase in expenses with personnel and management, due to the provision of R$24,6 million for profit sharing (PLR) and performance bonus (PPD) in 4Q23, compared to the reversal of R$17.4 million in PLR in 4Q22, and (ii) the increase of 23.2% (+R$ 33.2 million) with third-party services, mainly caused by higher expenses with maintenance of the electrical system, especially the increase in expenses with emergency situations, due to a higher incidence of storms; partially offset by the 14.0% reduction in other operating costs and expenses, mainly related to the recovery of expenses due to a court decision in favor of Copel DIS on the non-enforceability of the Inspection Fee for the Use or Occupation of the Highway Right-of-Way – TFDE/DER and refund of amounts paid in 2013, in the amount of R$ 24.8 million.

The personnel and management account, excluding the effects of the provision of PDV, PPD and PLR, recorded a reduction of 2.7%, mainly due to the reduction of 54 employees, despite the effects of ACT 2022/2024 with bonus salary (+R$ 12.8 million) in 4Q23 and salary adjustments of 7.19% in January 2023 and 4.51% in October 2023 of the current year. Considering the accumulated inflation measured by the National Consumer Price Index – INPC, of 3.71% between 4Q22 and 4Q23, the personnel and management cost line recorded a reduction in real terms of 6.2%.

The following table presents the main indicators of Copel Distribuição:

In 4Q23, we also highlight:

Copel Distribuição's net income was R$263.3 million in 4Q23 compared to R$324.3 million in 4Q22. In the year, net income was R$569.1 million, result of the better operational performance of Copel Distribuição, highlighted previously, and higher than the accumulated loss in 2022 of R$229.8 million, due to the provision for allocation of PIS and Cofins credits and its update.

4.1.1 Regulatory Efficiency

Copel Distribuição recorded an adjusted EBITDA of R$2,111.9 million in the last 12 months, equivalent to an efficiency of R$461.5 million, 28.0% above regulatory EBITDA.

Note: Regulatory EBITDA is calculated based on the WACC + QRR values published in ANEEL's Technical Notes in Tariff Revision or Adjustment events.

4.2.3 Concession Agreement

In December 2015, the Company signed the fifth amendment to the Public Service Concession Agreement for Electricity Distribution No. 46/1999 of Copel Distribuição SA, which extends the concession until July 7, 2045. Copel Distribuição complied with the conditioning requirements of economic-financial efficiency and quality for the inspection cycle of the initial 5 years. From the sixth year after the conclusion of the contract, failure to comply with the quality criteria for three consecutive years or the economic-financial management criteria for two consecutive years will result in the opening of the expiry process. For the quality criterion of distribution service provision, ANEEL defined the limits of Equivalent Interruption Duration per Consumer Unit - DEC and Equivalent Interruption Frequency per Consumer Unit - FEC for the years 2021 to 2026. For DEC, the result for the last 12 months calculated in December 2023 was 7.86 hours. For the FEC, the result in the same period was 5.21 interruptions.

The economic-financial management efficiency criterion will be measured by the calculation, each calendar year, according to ANEEL Normative Resolution No. 896/2020, by the following inequation:

4.2.4 Investment and Operational Data

Transformation Program (Programa Transformação) - a broad investment plan with the objective of modernizing, auto mating and renovating the distribution grid and private communication grid with standardized technologies to service automation equipment. Among the expected benefits are the strengthening of rural grid to reduce disconnections and guarantee support for the growth of agribusiness in the State of Paraná, the reduction of costs with O&M and commercial services and improvement in the control of DEC and FEC indicators. The program is composed of 3 pillar projects to achieve the objectives:

Copel Distribuição's Transformation Program covers the construction of approximately 25 thousand km of new grid, 15 thousand new automated points and the implementation of smart grid technology in the state of Paraná.

Compact and Protected Grid – deployment of compact grid predominantly in urban areas with a high degree of afforestation in the vicinity of distribution grid and protected grid exclusively in rural areas. Compact grid avoids cutting and pruning trees and improves the quality of supply, as it reduces the number of disconnections. Protected grid also improves the quality and reliability of the system as it avoids interruptions due to contact with vegetation or other objects and bad weather. At the end of 2023, the length of compact and protected grid installed was 27,851 km, compared to 22,366 km in 2022, an increase of 5,485 km, or 24.52%, in twelve months.

Isolated Secondary Grid- investment in low voltage isolated secondary grid (127/220V), which have significant advantages over the conventional overhead grid, such as: improving DEC and FEC indicators; make energy theft difficult; improve environmental conditions; reduce pruning areas; increase security; reduce voltage drop across the grid; increase the useful life of transformers by reducing the number of short circuits in the grid, among others. At the end of 2023, the length of isolated secondary distribution grid installed was 22,827 km, compared to 21,896 km in 2022, an increase of 931 km, or 4.25%, in twelve months.

Losses - refer to the generated electrical energy that passes through transmission lines and distribution grid, but which is not commercialized, either for technical or commercial reasons. Distribution losses can be defined as the difference between the electricity purchased by distributors and that billed to their consumers, being classified as technical and non-technical. Technical Losses are inherent to the electrical energy distribution activity and occur due to its dissipation during the transport process, voltage transformation and measurement due to the laws of physics. Historically, the Company's Technical Losses have maintained percentages close to or below the regulatory target. At the end of 2023, Technical Losses were 2,120 GWh, compared to 2,040 GWh in 2022. Non-Technical Losses, calculated by the difference between total and technical losses, originate mainly from theft (illegal connection, direct grid diversion), fraud (meter tampering or deviations), reading, measurement and billing errors. These losses are largely associated with the concessionaire's management and the socioeconomic characteristics of the concession areas. At the end of September 2023, Non-Technical Losses for the last 12 months were 575 GWh, compared to 614 GWh in the same period of the previous year. In this sense, the Company maintains a Program to Combat Non-Technical Losses that consists of several actions that aim to reduce or maintain the current level of non-technical losses, through the following actions:

At the end of 2023, Non-Technical Losses in the last 12 months were 742 GWh, compared to 661 GWh in the same period of the previous year.

It is worth noting that the targets established for the reasonable tariff for Non-Technical Losses take into account the level of complexity of the distributor's concession area and, according to the Aneel Report on Electricity Losses in Distribution 2023, the complexity index of Copel Distribuição's concession is one of the smallest compared to other dealerships in Brazil.

At the end of 2023, total losses in the last 12 months were 2,862 GWh, compared to 2,701 GWh in the same period of the previous year. In terms of classification, Total Losses were made up of 74.1% Technical Losses and 25.9% Non-Technical Losses.

* The losses reflect the difference between the measured load and the billed market and, with the onset of the Covid-19 Pandemic, the load in 2020 suffered a rapid retraction, but the market did not respond at the same speed, due to the mismatch between the measurement schedule and consumers billing schedule, reducing the volume of losses in this period.

The tariff transfer of the efficient levels of losses is foreseen in the concession contracts and these losses are considered in the costs with the purchase of energy up to the regulatory limit stipulated by ANEEL. Despite the total losses having percentages slightly above the regulatory one, the methodology for regulatory calculation uses the billed market and within this methodology, no loss glosses were calculated for Copel Distribuição in the annual tariff readjustment cycles of 2022 and 2023.

In 4Q23, Copel Mercado Livre presented an adjusted EBITDA of R$9.7 million, an amount 61.3% lower than the R$25.2 million recorded in 4Q22, mainly reflecting a lower margin in electricity sales. In 2023, adjusted EBITDA increased by 24.7%, mainly as a result of the higher annual margin in electricity sales, resulting from purchase contracts signed in previous years, reaching R$112.6 million compared to R$90.3 million from the same period of the previous year.

In the quarter, the adjustment in the periods was the fair value of the electricity purchase and sale contracts (mark to market) - amount determined by the difference between the contracted price and the future market price estimated by the Company - a result, mainly, of carrying out contracts that left the base and the increased sensitivity of default given by the credit risk rate. In 2023, the adjustments were the mark-to-market, the provision of compensation for PDV, recorded in the third quarter, and the compensation for the bonus for the additional third of vacation that occurred in the first quarter.

Manageable costs increased by 37.2% in 4Q23 (+1.9 million), mainly impacted by the increase in insurance expenses (+R$0.6 million) and projects to support social development and sport through tax incentives (+R$ 1.2 million), which have no impact on the result and still contribute to the brand's exposure and positioning strategy.

The personnel and management account, excluding the PLR and PPD effects, recorded a 13.5% reduction in 4Q23, mainly due to the 12.8% reduction in the number of employees, despite the effects of ACT 2022/2024 with salary bonus (+R$ 0.2 million) in 4Q23 and salary adjustments of 7.19% in January 2023 and 4.51% in October 2023 of the current year. Considering the accumulated inflation measured by the National Consumer Price Index – INPC, of 3.71% between the quarters, the personnel and management cost line registered a reduction in real terms of 17.2%. In the year to date, disregarding the effects of PLR and PPD, compensation for PDV and compensation for the bonus of the additional third of vacation, the personnel and management account reduced by 2.7%.

Net income in 4Q23 was R$24.7 million, 50.5% lower than the R$49.9 million in 4Q22 as a result of the reduction in the sales margin. In 2023, Copel Mercado Livre's net income was R$105.6 million compared to R$108.4 million in 2022.

Copel was a pioneer in creating an energy trader and the first to sell energy to free consumers, when this category was created in the country, in 1995. Copel Mercado Livre, created in 2016, is already the largest in the country in terms of energy volume marketed in the free contracting environment, offering more savings and peace of mind for customers from all regions of Brazil.

For a long time known as Copel Energia, Copel Mercado Livre is responsible for trading energy and providing services in the ACL. In December 2023, the Company registered 1,747 customers/contracts, an increase of 3.8% compared to the same period of the previous year. The amount of energy sold reached 22,450 GWh in 2023, a reduction of 9.5% compared to 2022. The graph below shows the evolution of Copel Mercado Livre in terms of the amount of GWh sold and number of final consumers.

Copel was the first company in the industry to produce an Environmental Impact Report for a generation project, and the first energy company in Brazil to become a signatory of the UN Global Compact in 2000. The Company promotes actions to disseminate the UN’s Agenda 2030 and implement the SDGs of the electricity sector. In 2020/2021, Copel participated in the Global Compact Program “SDG Ambition”. Copel joined the “Pact on Water and Energy Resilience” Commitment and received the Federal Government’s Pro Gender and Race Equality Seal. The Company received the Pró-Ética Seal, 2018-2019 and 2020-2021 editions, granted by the Brazillian Comptroller General (CGU) and Instituto ETHOS, for the voluntary adoption of integrity measures, for public recognition of the commitment to implement measures aimed at prevention, detection, and remediation of acts of corruption and fraud.

Environmental

Social

Governance

Priority SDG of the Brazilian Electricity Sector

6.3 Indicators

The indicators may change due to the assurance of the independent external audit.

In relation to the scope 1 GHG indicator (tCO2), the increase recorded is due to the return of commercial operation at UTE Figueira, on 12/07/2022, by ANEEL Order no. 2502/2022, with generation until September 2023. Online With the plan to have a 100% clean generation matrix, in October 2023 the Company filed a letter with the Ministry of Mines and Energy - MME requesting the withdrawal of the intention to extend the TPP Figueira concession. In February 2024, Aneel decided to suspend commercial operations, and the plant will be hibernated. More details in “Other highlights”.

6.4 Ratings, Rankings, and Indexes

Index	Ranking	Reference Year:
ISE B3	15th position	2023
S&P Global	CSA Score 70	2023
CARBON DISCLOSURE PROGRAM (CDP)	A-	2023
ICO2 B3	yes	2023
Sustainalytics	Medium Risk	2023
MSCI	A	2023

Available Cash Flow and Dividends

The Available Cash Flow is defined in the Dividend Policy as: FCD = Cash generated by Operating activities, deducted from the net cash used by investing activities, as follows: (a) Cash generated by Operating Activities: cash generated by operating activities in the fiscal year, before taxes, contributions (IRCS) and financial charges; (b) Net cash used by Investing activities: amount invested in noncurrent assets in the fiscal year. The Table below shows the calculation of FCD as of December 31, 2023:

R$’000

In line with the dividend policy, considering the above DCF and the level of leverage, the Company proposed the total payment of R$1,089.2 million in dividends for the 2023 financial year, of which R$958.0 million in the form of Interest on Equity (JCP) and R$131.2 million in the form of dividends. The Company has already paid R$456.9 million on November 30, 2023, and the remaining R$632.3 million will be paid by June 30, 2024, after deliberation at the Ordinary General Meeting – AGM on 22/04 /2024.

Copel Day 2023 – True Corporation

The Company held Investor Day at its headquarters in Curitiba-PR, on November 22, 2023, and was attended in person by more than 40 analysts, investors and interested parties and more than 400 spectators who watched the live broadcast. The event discussed, among other topics, PMSO planning + Contingency Provision, Investment in Reinforcement and Improvement in Transmission Lines and the Regulatory Remuneration Base. For more information, access the event broadcast and presentation available on our website.

Divestment in UEGA: signing of Share Purchase and Sale Agreement (CCVA)

On December 14, 2023, Copel and Copel GeT signed a CCVA contract for the 81.2% equity interest in TPP Araucária with Âmbar Energia S.A. The signing of the CCVA derives from the acceptance of the binding proposal received by the Company in the value of its participation corporate value (“Enterprise Value”) of R$320.7 million, on the base date of September 30, 2023, with the “Equity Value” being R$290.7 million, considering a net debt of R$30.0 million on the same base date. For more information, visit here.

On February 23, 2024, Petróleo Brasileiro S.A. – Petrobras adhered to the terms and conditions of the CCVA for the sale of 18.8% of its stake, representing the divestment of the entire plant.

Copel becomes part of the MSCI Brazil index

Since December 1, 2023, class B preferred shares (CPLE6) have been included in the Morgan Stanley Capital Index (MSCI) seal. As a result, the shares were heavily traded with index-based funds. MSCI indices are a global reference for institutional investors who use them as a reference to compose the investment portfolio of passive funds around the world. According to MSCI, currently around US$14.9 trillion in assets under investment fund management are managed globally using MSCI indices as a benchmark.

Copel receives the Deal of the Year Award from LatinFinance magazine

On January 25, 2024, the Company received the Subnational Deal of the Year award from LatinFinance magazine, in recognition of the process of transforming COPEL into a corporation with dispersed capital and without a controlling shareholder, which took place in 2023. This achievement reflects the commitment, efficiency and effectiveness of the entire Company in the set of actions for the successful execution of the Public Offering of Shares process.

For more information, visit here.

Closing of the Unit Program

On December 26, 2023, the program was discontinued upon approval at the 209th EGM of December 18, 2023 and resulted in the cancellation of the share deposit certificates (“Units”) (CPLE11) and the consequent delivery of the 5 (five) shares of issued by the Company underlying each Unit in 1 (one) common share (CPLE3) and 4 (four) class “B” preferred shares (CPLE6), preserving the same rights, advantages and restrictions of these shares for the holders of the Units.

For more information, click here.

TPP Figueira: SFT/ANEEL Order - No. 561/2024

On February 23, 2024, Aneel's Technical Inspection Superintendence (SFT), through Order No. 561/2024, authorized the suspension of the commercial operation of the generating unit – UG1 of TPP Figueira. Copel has also formalized with the granting authority the withdrawal of the request to extend the concession of the asset and is awaiting a response from the Ministry of Mines and Energy. The thermoelectric plant with 20 MW of installed power, powered by mineral coal, does not have current energy supply contracts. This claim is another stage in Copel's strategic plan to decarbonize its energy generation portfolio.

Copel remains in ISE B3

The Company will continue to be part of the B3 – Brasil, Bolsa, Balcão Corporate Sustainability Index (ISE) portfolio in 2024. The ISE portfolio evaluation process is organized into 5 dimensions (environment, corporate governance and senior management, human capital, social capital and business model and innovation), and a sixth dimension, referring to climate change, assessed using the CDP-Climate Change score (index produced by the international organization Carbon Disclosure Project, used to evaluate companies in in relation to issues relating to climate change). The ISE is a comparative analysis tool and reflects the return of a portfolio made up of shares from companies with the best performance in ESG (Environmental, Social and Governance) aspects, being a reference for the Company's strategy, providing longevity and sustainability to its businesses.

Copel advanced to A- CDP score

The Company achieved an A- rating from the CDP Disclosure Insight Action, formerly known as the Carbon Disclosure Project. The Company has responded to the CDP since 2010 and in recent years has maintained a B score, increasing its score in the Climate Change program in 2023 to A-. CDP is a global organization that manages the main environmental disclosure platform for strategic climate change management initiatives. With strategic guidelines adhering to ESG precepts, Copel's evolution reflects practices developed such as inventory history, approval of the carbon neutrality plan, investment in a more renewable company, carrying out risk analyzes and development of planning strategic and financial strategies that consider climate change and its articulation with interested parties.

Copel closes 2023 with delivery of 30 transmission and distribution works

During 2023, Copel carried out around 30 works including construction or expansion of substations, transmission and energy distribution lines in Paraná. The projects are part of the company's investment plan in recent years and total R$428 million in improvements. The majority, R$379 million, was invested by the company in 27 works that modernize and reinforce the energy distribution infrastructure. Another R$49 million was allocated to the modernization of three transmission grid projects.

Creation of the Regulatory Assistance Office

Aiming to align with the best market practices, have integrated policies with better control of results, optimize leadership functions and strengthen them for continuous value generation, the Company defined and the Board of Directors (“CAD”) approved the new organizational structure of Copel Holding with the creation of the Regulatory Assistance Office linked directly to the Presidency, contemplating an exclusive structure for even more strategic action in the regulatory sphere with a view to creating value for the Company. Since January 02, 2024, the new officer is engineer Fernando Antônio Gruppelli Junior. Graduated in Electrical Engineering from the Federal Technological University of Paraná (UTFPR), the new director has a master's degree in electrical engineering and industrial information technology from the same institution, an MBA in management from Fundação Dom Cabral, and an MBA in finance, controllership and compliance from Fundação Getúlio Vargas. A career employee since 1997, Director Fernando Gruppelli has worked in the areas of planning, underground networks, research and development, projects and works and management. He has held management positions since 2007 and for the last six years was superintendent of Asset Management and Distribution Finance.

New Officer of Copel Mercado Livre

On December 01, 2023, electrical engineer Kleberson Luiz da Silva is the new general director of Copel Mercado Livre. Working at the Company since 2010, Kleberson was in charge of several areas of energy commercialization in the company and, more recently, the superintendencies of energy commercialization at GeT. He was at Copel Mercado Livre in the Energy Market and Planning department. Graduated in Electrical Engineering with a Master's degree in Technology Development from Lactec, he is a member of the Board of Directors of Simepar and the Supervisory Board of the Electricity Trading Chamber-CCEE. He has been a career employee of Copel since 2010, working as an Electrical Engineer and holding management positions in various areas of commercialization and generation and transmission.

.Disclaimer

The information contained in this press release may contain forward-looking statements that reflect management’s current view and estimates of future economic circumstances, industry conditions, company performance, and financial results. Any statements, expectations, capabilities, plans and assumptions contained in this press release that do not describe historical facts such as statements regarding the declaration or payment of dividends, the direction of future operations, the implementation of relevant operating and financial strategies, the investment program, factors or trends affecting the Company’s financial condition, liquidity or results of operations are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. There is no guarantee that these results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.

Investor Relations

ri@copel.com

Phone: +55 (41) 3331-4011