Annual Report - EDP

notes to the consolidated EDP and - Energias company de Portugal, financial S.A. statementsfor the years Notes to ended the Consolidated 31 december and Company 2012 Financial and Statements 2011for the years ended 31 December 2012 and 2011Approval of the "The American Taxpayer Relief Act"On 1 January 2013, the US Congress approved "The American Taxpayer Relief Act" that include an extension of the Production Tax Credit (PTC) for wind, including thepossibility of a 30% Investment Tax Credit (ITC) instead of the PTC. Congress set a new expiration date of 31 December 2013 and changed the qualification criteria(projects can now qualify as long as they are under construction by year-end 2013). The legislation also includes a depreciation bonus on new equipment placed inservice which allows depreciation of a higher percentage of the cost of the project (less 50% of the ITC) in the year that it is placed in service. This bonus depreciationwas 100% in 2011 and 50% for 2012.Conclusion of sale of gas transmission bussiness in SpainOn 15 February 2013, following CMVM´s request, the information released to the market on 20 July 2012 and the obtention of the required authorizations by theregulatory and antitrust authorities, EDP, through its gas sector subsidiary in Spain, Naturgas Energía Grupo,S.A. (“Naturgas”) has completed today the sale of the gastransmission business owned by EDP Group in Spain, to Enagás, S.A. (“Enagás”), the Spanish gas transmission system operator.As a result of the sale of the gas transmission assets of Naturgas, Enagás and the Basque Government, through EVE, will own 90% and 10%, respectively.The agreed transaction price represents an enterprise value of 258 millions of Euros (245 millions of Euros paid by Enagás for 90% of the shares and the entire intra--group debt). The expected consolidated capital gain will be accounted in the fisrt quarter of 2013.Decreases on qualified shareholdingOn 21 February 2013, Parpública – Participações Públicas (SGPS) S.A. (“Parpública”) notified EDP that, on 19 February 2013, it has sold 151,517,000 shares, whichcorrespond to 4,14% of EDP share capital.The decrease of the participation resulted from a private offer via an “acelerated bookbuilding” process, in which Caixa – Banco Investimento, S.A. and MorganStanley & Co. International plc acted as Joint Bookrunners and its corresponding settlement was held on the regulated market “Eurolist by NYSE Euronext Lisbon”.As a result of this transaction, Parpública decreased its qualifying holding from 4.14% to 0% of EDP share capital.Change in the CMEC fixed portionFollowing the measures announced by the Portuguese government to reduce costs associated with energy production, Decree-Law 32/2013 of 26 February providesforesees the reduction of charges that are part of the compensation granted to electricity producers for the early termination of Power Purchase Agreements, allowingthe modification of the calculation of the annuity rate corresponding to the portion of the CMEC fixed costs, and consequently result in a cost savings to the NationalElectricity System. Law 85-A/2013 of 27 February fixes the nominal rate applicable to the fixed portion of CMEC in 4.72% in the period from 1 January 2013 to 31December 2027.50. RECENT ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUEDThe new standards and interpretations that have been issued and are already effective and that the Group has applied on its consolidated financial statements arethe following:IFRS 7 (Amendment) - Financial instruments: Disclosures for transfer transactions of financial assetsThe International Accounting Standards Board (IASB), issued in October 2010, amendments to IFRS 7 – Financial Instruments: Disclosures for transfer transactions offinancial assets, with effective date of mandatory application of 1 July 2011.The amendment to IFRS 7, clarifies the disclosures required to all financial assets that are not derecognised and for any continuing involvement in a transferred asset,existing at the reporting date, irrespective of when the related transfer transaction ocurred.An entity transfers all or part of a financial asset, if, and only if, it either:- transfers the contractual rights to receive the cash flows of that financial asset ; or- retains the contractual rights to receivethe cash flow of that financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients in anarrangement.The entity shall disclose at each reporting date for each class of tranferred financial assets that are not derecognised in their entirety: (i) the nature of transferredassets; (ii) the nature of the risks and rewards between the transferred assets and associated liabilities.For transferred financial assets that are derecognised in their entirety the disclosures includes: (i) the carrying amount of the assets and liabilities that are recognised inthe entity's statement of financial position and represent the entity's continuing involvement in the derecognised financial assets , and the line items in which thecarrying amount of those assets and liabilities are recognised; (ii) the fair value of the assets and liabilities that represent the entity's continuing involvement in thederecognised financial assets; (iii) the amount that best represents the entity's maximum exposure to loss from its continuing involvement in the derecognised financialassets, and information showing how the maximum exposure to loss is determined; and (iv) the undiscounted cash outflows that would or may be required torepurchase derecognised financial assets or other amounts payable to the transference in respect of the transferred assets, indicating the remaining contractualmaturities depending on the company's continuing involvement.248A World Full Of Energy