The Itaipu Treaty, in its Annex C, defines the financial basis of the Company and its commitments to economic and financial balance. Strategic Objective 2, of the Strategic Plan, ensures this commitment in the operationalization of its corporate actions and in the implementation of the Binational Sustainability Policy.

The applied accounting practices follow a rigid pattern of transparency control by the two partner countries.

Receipts are derived from the provision of electricity services to Eletrobras and Ande, which contract the available installed power, promoting greater predictability of revenues and reducing risks arising from hydrological crises that interfere with the generation of energy.

According to definition of Annex C, the tariff (defined in Itaipu as the unit cost of the electricity service) charged must be sufficient to cover all service costs, and therefore there is no profit.

As established in Annex A of the Treaty, the reference currency adopted by Itaipu is the US dollar. Costs and operating revenues are calculated and accounted for in US dollars, but amounts are received/paid in reais or in Guarani, so exchange rate variations have an impact on management.

[201-1] Value Added Statement (in thousands of USD)*

Revenue
	Generation of value added 31|12|2017 31|12|2016 Hired power 3.291.012 3.291.012 Remuneration per energy granting 329.392 368.455 Royalties and reimbursement of additional energy connected to the hired power 120.110 152.032 Miscellaneous income (expenses) (10.811) 53 Subtotal 3.729.703 3.811.552
(-) Input purchased from third parties
	Materiais 17.798 16.135 Outsourced services 128.037 94.056 Other operational expenses 225.740 90.648 Subtotal 371.575 200.839 Gross value added 3.358.128 3.610.713
(+) V.A. Received in transfer
	Financial revenue 60.584 67.270 Subtotal 60.584 67.270 Value added to be distributed 3.418.712 3.677.983

Work remuneration
	Distribution of Value Added Remuneração direta 261.118 264.089 Employee benefits 145.736 131.184 Former employees benefits1 136.458 281.184 Labor indemnity2 65.485 65.102 FGTS [Government Severance Indemnity Fund] 6.056 5.317 Subtotal 614.853 746.876
Government remuneration
	INSS [Social Security National Institute] and IPS 33.862 30.318 Royalties 519.066 534.732 Remuneration per energy granting 329.392 368.455 Subtotal 882.320 933.505
Third party capital remuneration
	Burden of debt 628.126 719.360 Currency variations 24.850 15.772 Other financial expenses 183 4.590 Subtotal 653.159 739.722
Own capital remuneration
	Capital earnings 48.460 46.716 Reimbursement of administration and supervision expenses 39.930 41.134 Subtotal 88.390 87.850 Income for the financial period3 1.179.990 1.170.030 Distributed value added 1.179.990 1.170.030