Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _______ No ___X____.
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Table of Contents | |
Company Data | |
Capital Composition | 1 |
Individual interim financial statements | |
Statement of Financial Position - Assets | 2 |
Statement of Financial Position - Liabilities and Equity | 3 |
Statement of Income | 4 |
Statement of Comprehensive Income | 5 |
Statement of Cash Flows – Indirect Method | 6 |
Statement of Changes in Equity | |
01/01/2018 to 06/30/2018 | 7 |
01/01/2017 to 06/30/2017 | 8 |
Statements of Value Added | 9 |
Consolidated Interim Financial Statements | |
Statement of Financial Position - Assets | 10 |
Statement of Financial Position - Liabilities and Equity | 11 |
Statement of Income | 13 |
Statement of Comprehensive Income | 14 |
Statement of Cash Flows - Indirect Method | 15 |
Statement of Changes in Equity | |
01/01/2018 to 06/30/2018 | 17 |
01/01/2017 to 06/30/2017 | 18 |
Statements of Value Added | 19 |
Comments on Performance | 20 |
Notes to Interim financial statements | 29 |
Other relevant information | 87 |
Reports | |
Independent Auditor’s Report - Unqualified | 88 |
Management declaration on financial statements | 90 |
Management declaration on independent auditor’s report | 91 |
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Number of Shares (In units) |
Closing Date 06/30/2018 |
Paid-in capital |
|
Common |
1,017,914,746 |
Preferred |
0 |
Total |
1,017,914,746 |
Treasury Stock |
0 |
Common |
0 |
Preferred |
0 |
Total |
0 |
1
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
(In thousands of Brazilian reais - R$) |
|
| |
|
|
|
|
Code |
Description |
Current Year 06/30/2018 |
Previous Year 12/31/2017 |
1 |
Total assets |
9,827,511 |
9,463,648 |
1.01 |
Current assets |
430,729 |
275,382 |
1.01.01 |
Cash and cash equivalents |
13,585 |
6,581 |
1.01.06 |
Taxes recoverable |
64,006 |
63,751 |
1.01.06.01 |
Current taxes recoverable |
64,006 |
63,751 |
1.01.06.01.01 |
Income tax and social contribution to be offset |
16,989 |
17,052 |
1.01.06.01.02 |
Other taxes recoverable |
47,017 |
46,699 |
1.01.07 |
Prepaid expenses |
41 |
46 |
1.01.08 |
Other current assets |
353,097 |
205,004 |
1.01.08.03 |
Other |
353,097 |
205,004 |
1.01.08.03.01 |
Dividends and interest on capital |
352,118 |
204,807 |
1.01.08.03.05 |
Other receivables |
979 |
197 |
1.02 |
Noncurrent assets |
9,396,782 |
9,188,266 |
1.02.01 |
Long-term assets |
153,948 |
629,352 |
1.02.01.07 |
Deferred taxes |
147,855 |
145,778 |
1.02.01.07.01 |
Deferred income tax and social contribution |
147,855 |
145,778 |
1.02.01.08 |
Prepaid expenses |
4 |
- |
1.02.01.09 |
Receivables from related parties |
- |
127,147 |
1.02.01.09.02 |
Receivables from subsidiaries |
- |
127,147 |
1.02.01.10 |
Other noncurrent assets |
6,089 |
356,427 |
1.02.01.10.03 |
Escrow deposits |
777 |
665 |
1.02.01.10.04 |
Advance for future capital increase |
- |
350,000 |
1.02.01.10.12 |
Other receivables |
5,312 |
5,762 |
1.02.02 |
Investments |
9,241,583 |
8,557,673 |
1.02.02.01 |
Equity interests |
9,241,583 |
8,557,673 |
1.02.02.01.02 |
Equity interests in subsidiaries |
8,335,468 |
7,556,123 |
1.02.02.01.03 |
Equity interests in joint ventures |
906,115 |
1,001,550 |
1.02.03 |
Property, plant and equipment |
1,159 |
1,170 |
1.02.03.01 |
Property, plant and equipment - in servce |
974 |
985 |
1.02.03.03 |
Property, plant and equipment - in progress |
185 |
185 |
1.02.04 |
Intangible assets |
92 |
71 |
1.02.04.01 |
Intangible assets |
92 |
71 |
1.02.04.01.03 |
Other intangible assets |
92 |
71 |
2
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Individual Financial Statements
Statement of Financial Position – Liabilities and Equity
(In thousands of Brazilian reais – R$)
Code |
Description |
Current Year 06/30/2018 |
Previous Year 12/31/2017 |
2 |
Total liabilities |
9,827,511 |
9,463,648 |
2.01 |
Current liabilities |
20,948 |
303,812 |
2.01.02 |
Trade payables |
136 |
1,644 |
2.01.02.01 |
Domestic suppliers |
136 |
1,644 |
2.01.03 |
Taxes payable |
458 |
717 |
2.01.03.01 |
Federal taxes |
458 |
717 |
2.01.03.01.02 |
Other taxes |
458 |
717 |
2.01.04 |
Borrowings |
- |
1,938 |
2.01.04.02 |
Debentures |
- |
1,938 |
2.01.05 |
Other liabilities |
20,354 |
299,513 |
2.01.05.02 |
Others |
20,354 |
299,513 |
2.01.05.02.01 |
Dividends and interest on capital payable |
2,825 |
281,919 |
2.01.05.02.09 |
Other liabilities |
17,529 |
17,594 |
2.02 |
Noncurrent liabilities |
10,804 |
198,308 |
2.02.01 |
Borrowings |
- |
184,388 |
2.02.01.02 |
Debentures |
- |
184,388 |
2.02.02 |
Other liabilities |
10,316 |
13,320 |
2.02.02.02 |
Others |
10,316 |
13,320 |
2.02.02.02.10 |
Other liabilities |
10,316 |
13,320 |
2.02.04 |
Provisons |
488 |
600 |
2.02.04.01 |
Tax, social security, labor and civil provisions |
488 |
600 |
2.02.04.01.02 |
Social security and labor provisions |
62 |
57 |
2.02.04.01.04 |
Civil provisions |
426 |
543 |
2.03 |
Equity |
9,795,759 |
8,961,528 |
2.03.01 |
Issued capital |
5,741,284 |
5,741,284 |
2.03.02 |
Capital reserves |
468,018 |
468,014 |
2.03.04 |
Earnings reserves |
2,090,136 |
2,916,736 |
2.03.04.01 |
Legal reserve |
798,090 |
798,090 |
2.03.04.02 |
Statutory reserve |
1,292,046 |
2,118,646 |
2.03.05 |
Retained earnings |
1,656,377 |
- |
2.03.08 |
Other comprehensive income |
(160,056) |
(164,506) |
3
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Individual Financial Statements
(In thousands of Brazilian reais - R$) |
|
|
|||
Code |
Description |
Current Year - Second Quarter |
YTD Current Year |
Previous Year - Second Quarter |
YTD Previous Year |
04/01/2018 to 06/30/2018 |
01/01/2018 to 06/30/2018 |
04/01/2017 to 06/30/2017 |
01/01/2017 to 06/30/2017 | ||
3.04 |
Operating income (expenses) |
453,637 |
895,377 |
153,288 |
407,969 |
3.04.02 |
General and administrative expenses |
(8,405) |
(17,651) |
(6,905) |
(24,071) |
3.04.06 |
Share of profit (loss) of investees |
462,042 |
913,028 |
160,193 |
432,040 |
3.05 |
Profit before finance income (costs) and taxes |
453,637 |
895,377 |
153,288 |
407,969 |
3.06 |
Finance income (costs) |
273 |
2,048 |
(15,828) |
(33,169) |
3.06.01 |
Finance income |
362 |
7,446 |
3,219 |
8,983 |
3.06.02 |
Finance costs |
(89) |
(5,398) |
(19,047) |
(42,152) |
3.07 |
Profit (loss) before taxes on income |
453,910 |
897,425 |
137,460 |
374,800 |
3.08 |
Income tax and social contribution |
1,803 |
2,071 |
6,014 |
14,561 |
3.08.01 |
Current |
- |
(5) |
- |
- |
3.08.02 |
Deferred |
1,803 |
2,076 |
6,014 |
14,561 |
3.09 |
Profit (loss) from continuing operations |
455,713 |
899,496 |
143,474 |
389,361 |
3.11 |
Profit (loss) for the period |
455,713 |
899,496 |
143,474 |
389,361 |
4
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
|||||
Code |
Description |
Current Year - Second Quarter |
YTD Current Year |
Previous Year - Second Quarter |
YTD Previous Year |
04/01/2018 to 06/30/2018 |
01/01/2018 to 06/30/2018 |
04/01/2017 to 06/30/2017 |
01/01/2017 to 06/30/2017 | ||
4.01 |
Profit for the period |
455,714 |
899,497 |
143,475 |
389,360 |
4.02 |
Other comprehensive income |
1,242 |
(16,809) |
- |
- |
4.02.01 |
Comprehensive income for the period of subsidiaries |
1,242 |
(16,809) |
- |
- |
4.03 |
Total comprehensive income for the period |
456,956 |
882,688 |
143,475 |
389,360 |
5
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
|||
Code |
Description |
Current year |
Previous Year |
6.01 |
Net cash from operating activities |
407,642 |
215,969 |
6.01.01 |
Cash generated from operations |
(12,548) |
(16,420) |
6.01.01.01 |
Profit before taxes |
897,426 |
374,800 |
6.01.01.02 |
Depreciation and amortization |
93 |
108 |
6.01.01.03 |
Provision for tax, civil and labor risks |
(12) |
(155) |
6.01.01.05 |
Interest on debts, inflation adjustment and exchange rate changes |
2,973 |
40,867 |
6.01.01.07 |
Share of profit (loss) of investees |
(913,028) |
(432,040) |
6.01.02 |
Changes in assets and liabilities |
424,425 |
277,045 |
6.01.02.02 |
Dividend and interest on capital received |
428,935 |
288,061 |
6.01.02.03 |
Taxes recoverable |
(116) |
(2,883) |
6.01.02.05 |
Escrow deposits |
(106) |
35 |
6.01.02.10 |
Other operating assets |
341 |
18,451 |
6.01.02.11 |
Trade payables |
(1,508) |
(3,185) |
6.01.02.12 |
Other taxes and social contributions |
(264) |
114 |
6.01.02.16 |
Tax, civil and labor risks paid |
(119) |
(211) |
6.01.02.19 |
Other operating liabilities |
(2,738) |
(23,337) |
6.01.03 |
Others |
(4,235) |
(44,656) |
6.01.03.01 |
Interest paid on debts and debentures |
(4,235) |
(44,656) |
6.02 |
Net cash from investing activities |
64,455 |
6,284 |
6.02.01 |
Purchases of property, plant and equipment |
(252) |
(42) |
6.02.02 |
Securities, pledges and restricted deposits |
(500) |
- |
6.02.04 |
Purchases of intangible assets |
(23) |
(4) |
6.02.06 |
Advance for future capital increases |
(62,395) |
(38,950) |
6.02.07 |
Intragroup loans |
127,625 |
45,280 |
6.03 |
Net cash from financing activities |
(465,093) |
(220,906) |
6.03.05 |
Repayment of principal of borrowings and debentures |
(186,000) |
- |
6.03.08 |
Dividend and interest on capital paid |
(279,093) |
(220,906) |
6.05 |
Increase (decrease) in cash and cash equivalents |
7,004 |
1,347 |
6.05.01 |
Cash and cash equivalents at the beginning of the period |
6,581 |
64,973 |
6.05.02 |
Cash and cash equivalents at the end of the period |
13,585 |
66,320 |
6
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
|||||
Code |
Description |
Issued capital |
Capital reserves, |
Earnings reserves |
Retained earnings/accumulated losses |
Other comprehensive income |
Equity |
5.01 |
Opening balances |
5,741,284 |
468,014 |
2,916,736 |
- |
(164,506) |
8,961,528 |
5.03 |
Adjusted opening balances |
5,741,284 |
468,014 |
2,916,736 |
- |
(164,506) |
8,961,528 |
5.05 |
Total comprehensive income |
- |
- |
- |
816,890 |
17,337 |
834,227 |
5.05.01 |
Profit for the period |
- |
- |
- |
899,497 |
- |
899,497 |
5.05.02 |
Other comprehensive income |
- |
- |
- |
(82,607) |
17,337 |
(65,270) |
5.05.02.03 |
Equity on comprehensive income of subsidiaries |
- |
- |
- |
(82,607) |
17,337 |
(65,270) |
5.06 |
Internal changes in equity |
- |
4 |
(826,600) |
839,487 |
(12,887) |
4 |
5.06.06 |
Equity on comprehensive income of subsidiaries |
- |
- |
- |
12,887 |
(12,887) |
- |
5.06.07 |
Changes in statutory reserve in the period |
- |
- |
(826,600) |
826,600 |
- |
- |
5.06.08 |
Other changes |
- |
4 |
- |
- |
- |
4 |
5.07 |
Closing balances |
5,741,284 |
468,018 |
2,090,136 |
1,656,377 |
(160,056) |
9,795,759 |
7
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
|||||||
Código da Conta |
Descrição da Conta |
Issued capital |
Capital reserves, stock options and treasury stock |
Earnings reserves |
Retained earnings/accumulated losses |
Other comprehensive income |
Equity |
5.01 |
Opening balances |
5,741,284 |
468,014 |
1,995,355 |
- |
(234,632) |
7,970,021 |
5.03 |
Adjusted opening balances |
5,741,284 |
468,014 |
1,995,355 |
- |
(234,632) |
7,970,021 |
5.04 |
Capital transactions with owners |
- |
- |
(7,820) |
- |
- |
(7,820) |
5.04.06 |
Dividends |
- |
- |
(7,820) |
- |
- |
(7,820) |
5.05 |
Total comprehensive income |
- |
- |
- |
389,360 |
- |
389,360 |
5.05.01 |
Profit for the period |
- |
- |
- |
389,360 |
- |
389,360 |
5.06 |
Internal changes in equity |
- |
- |
57,938 |
(45,105) |
(12,833) |
- |
5.06.06 |
Equity on comprehensive income of subsidiaries |
- |
- |
- |
12,833 |
(12,833) |
- |
5.06.07 |
Changes in statutory reserve in the period |
- |
- |
57,938 |
(57,938) |
- |
- |
5.07 |
Closing balances |
5,741,284 |
468,014 |
2,045,473 |
344,255 |
(247,465) |
8,351,561 |
8
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
|||
Code |
Description |
Current Year |
Previous Year |
7.01 |
Revenues |
275 |
46 |
7.01.03 |
Revenues related to construction of own assets |
275 |
46 |
7.02 |
Inputs purchased from third parties |
(5,477) |
(4,289) |
7.02.02 |
Materials, energy, third-party services and others |
(5,477) |
(4,289) |
7.03 |
Gross value added |
(5,202) |
(4,243) |
7.04 |
Retentions |
(93) |
(108) |
7.04.01 |
Depreciation and amortization |
(93) |
(108) |
7.05 |
Wealth created by the company |
(5,295) |
(4,351) |
7.06 |
Wealth received in transfer |
920,839 |
441,515 |
7.06.01 |
Share of profit (loss) of investees |
913,028 |
432,040 |
7.06.02 |
Finance income |
7,811 |
9,475 |
7.07 |
Total wealth for distribution |
915,544 |
437,164 |
7.08 |
Wealth distributed |
915,544 |
437,164 |
7.08.01 |
Personnel and charges |
10,446 |
16,768 |
7.08.01.01 |
Salaries and wages |
5,186 |
11,894 |
7.08.01.02 |
Benefits |
4,522 |
3,936 |
7.08.01.03 |
FGTS (Severance Pay Fund) |
738 |
938 |
7.08.02 |
Taxes, fees and contributions |
205 |
(11,187) |
7.08.02.01 |
Federal |
181 |
(11,203) |
7.08.02.02 |
State |
24 |
16 |
7.08.03 |
Lenders and lessors |
5,396 |
42,223 |
7.08.03.01 |
Interest |
5,394 |
42,012 |
7.08.03.02 |
Rentals |
2 |
211 |
7.08.04 |
Shareholders |
899,497 |
389,360 |
7.08.04.03 |
Retained earnings / Loss for the period |
899,497 |
389,360 |
9
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
(In thousands of Brazilian reais – R$)
Code |
Description |
Current Year 06/30/2018 |
Previous Year 12/31/2017 |
1 |
Total assets |
41,708,250 |
41,282,912 |
1.01 |
Current assets |
9,671,893 |
9,581,211 |
1.01.01 |
Cash and cash equivalents |
2,490,235 |
3,249,642 |
1.01.03 |
Trade receivables |
4,545,631 |
4,301,284 |
1.01.03.01 |
Consumers |
4,545,631 |
4,301,284 |
1.01.06 |
Taxes recoverable |
480,967 |
395,046 |
1.01.06.01 |
Current taxes recoverable |
480,967 |
395,046 |
1.01.06.01.01 |
Income tax and social contribution to be offset |
135,278 |
88,802 |
1.01.06.01.02 |
Other taxes recoverable |
345,689 |
306,244 |
1.01.07 |
Prepaid expenses |
287,379 |
343,134 |
1.01.08 |
Other current assets |
1,867,681 |
1,292,105 |
1.01.08.03 |
Others |
1,867,681 |
1,292,105 |
1.01.08.03.01 |
Dividends and interest on capital |
153,187 |
56,145 |
1.01.08.03.02 |
Derivatives |
449,475 |
444,029 |
1.01.08.03.03 |
Concession financial asset |
23,241 |
23,736 |
1.01.08.03.04 |
Sector financial asset |
679,406 |
210,834 |
1.01.08.03.05 |
Other receivables |
562,372 |
557,361 |
1.02 |
Noncurrent assets |
32,036,357 |
31,701,701 |
1.02.01 |
Long-term assets |
11,016,654 |
10,323,201 |
1.02.01.04 |
Trade receivables |
235,146 |
236,539 |
1.02.01.04.01 |
Consumers |
235,146 |
236,539 |
1.02.01.07 |
Deferred taxes |
825,862 |
943,199 |
1.02.01.07.01 |
Deferred income tax and social contribution |
825,862 |
943,199 |
1.02.01.08 |
Prepaid expenses |
20,490 |
20,042 |
1.02.01.10 |
Other noncurrent assets |
9,935,156 |
9,123,421 |
1.02.01.10.03 |
Escrow deposits |
866,057 |
839,990 |
1.02.01.10.05 |
Derivatives |
370,585 |
203,901 |
1.02.01.10.06 |
Concession financial asset |
7,053,027 |
6,545,668 |
1.02.01.10.08 |
Sector financial asset |
414,528 |
355,003 |
1.02.01.10.09 |
Income tax and social contribution to be offset |
66,352 |
61,464 |
1.02.01.10.10 |
Other taxes recoverable |
167,122 |
171,980 |
1.02.01.10.11 |
Investments at cost |
116,654 |
116,654 |
1.02.01.10.12 |
Other receivables |
880,831 |
828,761 |
1.02.02 |
Investments |
906,115 |
1,001,550 |
1.02.02.01 |
Equity interests |
906,115 |
1,001,550 |
1.02.02.01.04 |
Equity interests in joint ventures |
906,115 |
1,001,550 |
1.02.03 |
Property, plant and equipment |
9,612,095 |
9,787,125 |
1.02.03.01 |
Property, plant and equipment - in servce |
9,262,944 |
9,535,933 |
1.02.03.03 |
Property, plant and equipment - in progress |
349,151 |
251,192 |
1.02.04 |
Intangible assets |
10,501,493 |
10,589,825 |
1.02.04.01 |
Intangible assets |
10,501,493 |
10,589,825 |
1.02.04.01.01 |
Rights of concession |
10,428,124 |
10,522,933 |
1.02.04.01.02 |
Goodwill |
6,115 |
6,115 |
1.02.04.01.03 |
Other intangible assets |
67,254 |
60,777 |
10
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Consolidated Financial Statements
11
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
(In thousands of Brazilian reais – R$) |
|||
Code |
Description |
Current Year 06/30/2018 |
Previous Year 12/31/2017 |
2 |
Total liabilities |
41,708,250 |
41,282,912 |
2.01 |
Current liabilities |
9,713,720 |
11,378,687 |
2.01.01 |
Payroll and related taxes |
150,597 |
116,080 |
2.01.01.01 |
Social taxes |
34,975 |
37,741 |
2.01.01.02 |
Payroll taxes |
115,622 |
78,339 |
2.01.02 |
Trade payables |
3,229,917 |
3,296,870 |
2.01.02.01 |
Domestic suppliers |
3,229,917 |
3,296,870 |
2.01.03 |
Taxes payable |
470,760 |
710,303 |
2.01.03.01 |
Federal taxes |
271,678 |
300,768 |
2.01.03.01.01 |
Income tax and social contribution |
67,225 |
81,457 |
2.01.03.01.02 |
Other Taxes |
204,453 |
219,311 |
2.01.03.02 |
State taxes |
193,492 |
403,492 |
2.01.03.03 |
Municipal taxes |
5,590 |
6,043 |
2.01.04 |
Borrowings |
4,396,744 |
5,292,680 |
2.01.04.01 |
Borrowings |
3,011,598 |
3,589,607 |
2.01.04.01.01 |
In local currency |
1,176,187 |
1,258,330 |
2.01.04.01.02 |
In foreign currency |
1,835,411 |
2,331,277 |
2.01.04.02 |
Debentures |
1,385,146 |
1,703,073 |
2.01.05 |
Other liabilities |
1,465,702 |
1,962,754 |
2.01.05.02 |
Others |
1,465,702 |
1,962,754 |
2.01.05.02.01 |
Dividends and interest on capital payable |
37,105 |
297,744 |
2.01.05.02.04 |
Regulatory charges |
286,858 |
581,600 |
2.01.05.02.05 |
Derivatives |
11,314 |
10,230 |
2.01.05.02.06 |
Use of public asset |
11,179 |
10,965 |
2.01.05.02.07 |
Sector financial liability |
394 |
40,111 |
2.01.05.02.08 |
Post-employment benefit obligation |
69,132 |
60,801 |
2.01.05.02.09 |
Other payables |
1,049,720 |
961,303 |
2.02 |
Noncurrent liabilities |
20,053,785 |
18,717,881 |
2.02.01 |
Borrowings |
16,249,194 |
14,875,904 |
2.02.01.01 |
Borrowings |
7,657,213 |
7,402,450 |
2.02.01.01.01 |
In local currency |
4,103,143 |
4,884,253 |
2.02.01.01.02 |
In foreign currency |
3,554,070 |
2,518,197 |
2.02.01.02 |
Debentures |
8,591,981 |
7,473,454 |
2.02.02 |
Other liabilities |
1,578,350 |
1,631,253 |
2.02.02.02 |
Others |
1,578,350 |
1,631,253 |
2.02.02.02.03 |
Trade payables |
135,370 |
128,438 |
2.02.02.02.04 |
Others tax and social contribution |
14,768 |
18,839 |
2.02.02.02.06 |
Derivatives |
1,443 |
84,576 |
2.02.02.02.07 |
Use of public asset |
86,561 |
83,766 |
2.02.02.02.08 |
Sector financial liability |
- |
8,385 |
2.02.02.02.09 |
Post-employment benefit obligation |
870,298 |
880,360 |
2.02.02.02.10 |
Other payables |
469,910 |
426,889 |
2.02.03 |
Deferred taxes |
1,276,832 |
1,249,591 |
2.02.03.01 |
Deferred income tax and social contribution |
1,276,832 |
1,249,591 |
2.02.03.01.01 |
Deferred income tax and social contribution |
1,266,471 |
1,239,048 |
2.02.03.01.02 |
Others deferred taxes |
10,361 |
10,543 |
2.02.04 |
Provisions |
949,409 |
961,133 |
2.02.04.01 |
Tax, social security, labor and civil provisions |
949,409 |
961,133 |
2.02.04.01.01 |
Tax provisions |
373,498 |
347,291 |
2.02.04.01.02 |
Social security and labor provisions |
208,991 |
224,258 |
2.02.04.01.04 |
Civil provisions |
266,681 |
291,388 |
2.02.04.01.05 |
Others provisions |
100,239 |
98,196 |
2.03 |
Consolidated equity |
11,940,745 |
11,186,344 |
2.03.01 |
Issued capital |
5,741,284 |
5,741,284 |
2.03.02 |
Capital reserves |
468,018 |
468,014 |
2.03.04 |
Earnings reserves |
2,090,136 |
2,916,736 |
2.03.04.01 |
Legal reserve |
798,090 |
798,090 |
2.03.04.02 |
Statutory reserve |
1,292,046 |
2,118,646 |
2.03.05 |
Retained earnings |
1,656,377 |
- |
2.03.08 |
Other comprehensive income |
(160,056) |
(164,506) |
2.03.09 |
Noncontrolling interests |
2,144,986 |
2,224,816 |
12
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
13
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) |
|||||
Code |
Description |
Current Year - Second Quarter |
YTD Current Year |
Previous Year - Second Quarter |
YTD Previous Year |
04/01/2018 to 06/30/2018 |
01/01/2018 to 06/30/2018 |
04/01/2017 to 06/30/2017 |
01/01/2017 to 06/30/2017 | ||
3.01 |
Net operating revenue |
6,945,366 |
13,320,021 |
5,962,549 |
11,501,328 |
3.02 |
Cost of electric energy services |
(5,581,208) |
(10,636,223) |
(4,894,310) |
(9,197,014) |
3.03 |
Gross profit |
1,364,158 |
2,683,798 |
1,068,239 |
2,304,314 |
3.04 |
Operating expenses/income |
(408,571) |
(752,264) |
(422,348) |
(839,241) |
3.04.01 |
Selling expenses |
(148,412) |
(277,051) |
(142,565) |
(291,782) |
3.04.02 |
General and administrative expenses |
(236,112) |
(439,987) |
(255,225) |
(516,791) |
3.04.03 |
Impairment reversal |
- |
5,837 |
- |
- |
3.04.05 |
Other operating expenses |
(92,793) |
(195,165) |
(107,526) |
(193,346) |
3.04.06 |
Share of profit (loss) of investees |
68,746 |
154,102 |
82,968 |
162,678 |
3.05 |
Profit before finance income (costs) and taxes |
955,587 |
1,931,534 |
645,891 |
1,465,073 |
3.06 |
Finance income (costs) |
(245,674) |
(553,193) |
(418,167) |
(854,306) |
3.06.01 |
Finance income |
169,078 |
366,230 |
222,632 |
503,343 |
3.06.02 |
Finance costs |
(414,752) |
(919,423) |
(640,799) |
(1,357,649) |
3.07 |
Profit before taxes |
709,913 |
1,378,341 |
227,724 |
610,767 |
3.08 |
Income tax and social contribution |
(259,736) |
(508,760) |
(104,552) |
(255,474) |
3.08.01 |
Current |
(69,373) |
(334,831) |
(33,066) |
(235,587) |
3.08.02 |
Deferred |
(190,363) |
(173,929) |
(71,486) |
(19,887) |
3.09 |
Profit from continuing operations |
450,177 |
869,581 |
123,172 |
355,293 |
3.11 |
Consolidated profit for the period |
450,177 |
869,581 |
123,172 |
355,293 |
3.11.01 |
Attributable to owners of the Company |
455,714 |
899,497 |
143,474 |
389,360 |
3.11.02 |
Attributable to noncontrolling interests |
(5,537) |
(29,916) |
(20,302) |
(34,067) |
3.99 |
Earnings per share - (R$ / share) |
|
|
|
|
3.99.01 |
Basic earnings per share - R$ |
|
|
|
|
3.99.01.01 |
ON |
0.45 |
0.88 |
0.14 |
0.38 |
3.99.02 |
Diluted earnings per share - R$ |
|
|
|
|
3.99.02.01 |
ON |
0.45 |
0.88 |
0.14 |
0.38 |
14
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) |
|||||
Code |
Description |
Current Year - Second Quarter |
YTD Current Year |
Previous Year - Second Quarter |
YTD Previous Year |
04/01/2018 to 06/30/2018 |
01/01/2018 to 06/30/2018 |
04/01/2017 to 06/30/2017 |
01/01/2017 to 06/30/2017 | ||
4.01 |
Consolidated profit for the period |
450,177 |
869,581 |
123,173 |
355,293 |
4.02 |
Other comprehensive income |
1,242 |
(16,808) |
- |
- |
4.02.01 |
Actuarial gains (losses), net of tax effects |
(1,865) |
(3,669) |
- |
- |
4.02.02 |
Credit risk in mark to market of financial liabilities |
3,107 |
(13,139) |
- |
- |
4.03 |
Consolidated comprehensive income for the period |
451,419 |
852,773 |
123,173 |
355,293 |
4.03.01 |
Attributable to owners of the Company |
456,956 |
882,688 |
143,475 |
389,360 |
4.03.02 |
Attributable to noncontrolling interests |
(5,537) |
(29,915) |
(20,302) |
(34,067) |
15
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) |
|||
Code |
Description |
YTD Current Year |
YTD previous year |
6.01 |
Net cash from operating activities |
370,515 |
1,280,545 |
6.01.01 |
Cash generated from operations |
2,782,974 |
2,622,163 |
6.01.01.01 |
Profit before taxes |
1,378,341 |
610,767 |
6.01.01.02 |
Depreciation and amortization |
803,965 |
758,227 |
6.01.01.03 |
Provision for tax, civil and labor risks |
55,305 |
93,064 |
6.01.01.04 |
Allowance for doubtful debts |
68,242 |
86,068 |
6.01.01.05 |
Interest on debts, inflation adjustment and exchange rate changes |
576,458 |
1,108,799 |
6.01.01.06 |
Pension plan expense (income) |
44,955 |
56,944 |
6.01.01.07 |
Share of profit (loss) of investees |
(154,102) |
(162,678) |
6.01.01.08 |
Loss (gain) on disposal of noncurrent assets |
46,573 |
49,275 |
6.01.01.09 |
Deferred taxes (PIS and COFINS) |
(182) |
1,037 |
6.01.01.10 |
Others |
(36,581) |
20,660 |
6.01.02 |
Changes in assets and liabilities |
(1,364,829) |
(147,823) |
6.01.02.01 |
Consumers, concessionaries and licensees |
(370,264) |
(279,388) |
6.01.02.02 |
Dividend and interest on capital received |
152,494 |
184,117 |
6.01.02.03 |
Taxes recoverable |
(57,253) |
(48,491) |
6.01.02.05 |
Escrow deposits |
(8,219) |
(243,817) |
6.01.02.06 |
Sectorial financial asset |
(487,028) |
(25,525) |
6.01.02.07 |
Receivables - CDE |
47,325 |
(21,720) |
6.01.02.08 |
Concession financial assets (transmission companies) |
(3,979) |
(49,349) |
6.01.02.10 |
Other operating assets |
(60,229) |
(71,804) |
6.01.02.11 |
Trade payables |
(60,020) |
62,185 |
6.01.02.12 |
Other taxes and social contributions |
(234,899) |
(88,703) |
6.01.02.13 |
Other liabilities with private pension plan |
(50,354) |
(34,406) |
6.01.02.14 |
Regulatory charges |
(294,742) |
74,136 |
6.01.02.16 |
Tax, civil and labor risks paid |
(92,987) |
(111,294) |
6.01.02.17 |
Sector financial liability |
(69,878) |
315,136 |
6.01.02.18 |
Payables - amounts provided by the CDE |
9,715 |
(744) |
6.01.02.19 |
Other operating liabilities |
215,489 |
191,844 |
6.01.03 |
Others |
(1,047,630) |
(1,193,795) |
6.01.03.01 |
Interest paid on debts and debentures |
(681,214) |
(934,922) |
6.01.03.02 |
Income tax and social contribution paid |
(366,416) |
(258,873) |
6.02 |
Net cash from investing activities |
(914,145) |
(1,381,785) |
6.02.01 |
Purchases of property, plant and equipment |
(129,534) |
(548,625) |
6.02.02 |
Securities, pledges and restricted deposits |
(66,487) |
(81,107) |
6.02.04 |
Purchases of intangible assets |
(718,124) |
(790,940) |
6.02.05 |
Sale of noncurrent assets |
- |
94 |
6.02.07 |
Intragroup loans |
- |
38,793 |
6.03 |
Net cash from financing activities |
(215,777) |
(1,747,667) |
6.03.01 |
Capital increase of noncontrolling shareholder |
15 |
7 |
6.03.04 |
Borrowings and debentures raised |
6,386,698 |
986,988 |
6.03.05 |
Repayment of principal of borrowings and debentures, net of derivatives |
(6,657,657) |
(2,342,145) |
6.03.06 |
Settlement of derivatives |
365,434 |
(148,177) |
6.03.08 |
Dividend and interest on capital paid |
(310,267) |
(241,826) |
6.03.10 |
Payment of business combination |
- |
(2,514) |
6.05 |
Increase (decrease) in cash and cash equivalents |
(759,407) |
(1,848,907) |
6.05.01 |
Cash and cash equivalents at the beginning of the period |
3,249,642 |
6,164,997 |
6.05.02 |
Cash and cash equivalents at the end of the period |
2,490,235 |
4,316,090 |
16
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
6.02 |
Net cash from investing activities |
914,145 |
1,381,785 |
6.02.01 |
Purchases of property, plant and equipment |
129,534 |
548,625 |
6.02.02 |
Securities, pledges and restricted deposits |
66,487 |
81,107 |
6.02.04 |
Purchases of intangible assets |
718,124 |
790,940 |
6.02.05 |
Sale of noncurrent assets |
- |
(94) |
6.02.07 |
Intragroup loans |
- |
(38,793) |
6.03 |
Net cash from financing activities |
215,777 |
1,747,667 |
6.03.01 |
Capital increase of noncontrolling shareholder |
(15) |
(7) |
6.03.04 |
Borrowings and debentures raised |
(6,386,698) |
(986,988) |
6.03.05 |
Repayment of principal of borrowings and debentures, net of derivatives |
6,657,657 |
2,342,145 |
6.03.06 |
Settlement of derivatives |
(365,434) |
148,177 |
6.03.08 |
Dividend and interest on capital paid |
310,267 |
241,826 |
6.03.10 |
Payment of business combination |
- |
2,514 |
6.05 |
Increase (decrease) in cash and cash equivalents |
759,407 |
1,848,907 |
6.05.01 |
Cash and cash equivalents at the beginning of the period |
2,490,235 |
4,316,090 |
6.05.02 |
Cash and cash equivalents at the end of the period |
3,249,642 |
6,164,997 |
17
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) | |||||||||
Code |
Description |
Issued capital |
Capital reserves, stock options and treasury stock |
Earnings reserves |
Retained earnings/accumulated losses |
Other comprehensive income |
Equity |
Noncontrolling interests |
Consolidated equity |
5.01 |
Opening balances |
5,741,284 |
468,014 |
2,916,736 |
- |
(164,506) |
8,961,528 |
2,224,816 |
11,186,344 |
5.03 |
Adjusted opening balances |
5,741,284 |
468,014 |
2,916,736 |
- |
(164,506) |
8,961,528 |
2,224,816 |
11,186,344 |
5.04 |
Capital transactions with owners |
- |
- |
- |
- |
- |
- |
(49,867) |
(49,867) |
5.04.01 |
Capital increase |
- |
- |
- |
- |
- |
- |
15 |
15 |
5.04.06 |
Dividend |
- |
- |
- |
- |
- |
- |
(49,882) |
(49,882) |
5.05 |
Total comprehensive income |
- |
- |
- |
816,890 |
17,337 |
834,227 |
(29,916) |
804,311 |
5.05.01 |
Profit for the period |
- |
- |
- |
899,497 |
- |
899,497 |
(29,916) |
869,581 |
5.05.02 |
Other comprehensive income |
- |
- |
- |
(82,607) |
17,337 |
(65,270) |
- |
(65,270) |
5.05.02.01 |
Financial instruments adjustment |
- |
- |
- |
(82,607) |
21,006 |
(61,601) |
- |
(61,601) |
5.05.02.06 |
Other comprehensive income - actuarial gains (losses) |
- |
- |
- |
- |
(3,669) |
(3,669) |
- |
(3,669) |
5.06 |
Internal changes in equity |
- |
4 |
(826,600) |
839,487 |
(12,887) |
4 |
(47) |
(43) |
5.06.04 |
Realization of deemed cost of property, plant and equipment |
- |
- |
- |
19,526 |
(19,526) |
- |
- |
- |
5.06.05 |
Tax effect on realization of deemed cost |
- |
- |
- |
(6,639) |
6,639 |
- |
- |
- |
5.06.07 |
Changes in statutory reserve in the period |
- |
- |
(826,600) |
826,600 |
- |
- |
- |
- |
5.06.08 |
Other changes |
- |
4 |
- |
- |
- |
4 |
(47) |
(43) |
5.07 |
Closing balances |
5,741,284 |
468,018 |
2,090,136 |
1,656,377 |
(160,056) |
9,795,759 |
2,144,986 |
11,940,745 |
18
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) |
|||||||||
Code |
Description |
Issued capital |
Capital reserves, stock options and treasury stock |
Earnings reserves |
Retained earnings/accumulated losses |
Other comprehensive income |
Equity |
Noncontrolling interests |
Consolidated equity |
5.01 |
Opening balances |
5,741,284 |
468,014 |
1,995,355 |
- |
(234,632) |
7,970,021 |
2,402,647 |
10,372,668 |
5.03 |
Adjusted opening balances |
5,741,284 |
468,014 |
1,995,355 |
- |
(234,632) |
7,970,021 |
2,402,647 |
10,372,668 |
5.04 |
Capital transactions with owners |
- |
- |
(7,820) |
- |
- |
(7,820) |
(9,602) |
(17,422) |
5.04.01 |
Capital increase |
- |
- |
- |
- |
- |
- |
8 |
8 |
5.04.06 |
Dvidend |
- |
- |
(7,820) |
- |
- |
(7,820) |
(9,610) |
(17,430) |
5.05 |
Total comprehensive income |
- |
- |
- |
389,360 |
- |
389,360 |
(34,067) |
355,293 |
5.05.01 |
Profit for the period |
- |
- |
- |
389,360 |
- |
389,360 |
(34,067) |
355,293 |
5.06 |
Internal changes in equity |
- |
- |
57,939 |
(45,105) |
(12,834) |
- |
(33) |
(33) |
5.06.04 |
Realization of deemed cost of property, plant and equipment |
- |
- |
- |
19,445 |
(19,445) |
- |
- |
- |
5.06.05 |
Tax effect on realization of deemed cost |
- |
- |
- |
(6,611) |
6,611 |
- |
- |
- |
5.06.07 |
Changes in statutory reserve in the period |
- |
- |
57,939 |
(57,939) |
- |
- |
- |
- |
5.06.09 |
Other changes in noncontrolling interests |
- |
- |
- |
- |
- |
- |
(33) |
(33) |
5.07 |
Closing balances |
5,741,284 |
468,014 |
2,045,474 |
344,255 |
(247,466) |
8,351,561 |
2,358,945 |
10,710,506 |
19
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Consolidated Interim Financial Statements
(In thousands of Brazilian reais – R$) |
|||
Code |
Description |
Current Year |
Previous Year |
7.01 |
Revenues |
20,220,616 |
18,408,445 |
7.01.01 |
Sales of goods and services |
19,397,799 |
17,008,535 |
7.01.02 |
Other revenues |
740,615 |
878,362 |
7.01.02.01 |
Revenue from construction of concession infrastructure |
740,615 |
878,362 |
7.01.03 |
Revenues related to construction of own assets |
150,444 |
607,616 |
7.01.04 |
Allowance for doubtful debts |
(68,242) |
(86,068) |
7.02 |
Inputs purchased from third parties |
(11,016,283) |
(9,937,126) |
7.02.02 |
Materials, energy, third-party services and others |
(11,022,120) |
(9,937,126) |
7.02.03 |
Impairment reversal |
5,837 |
- |
7.03 |
Gross value added |
9,204,333 |
8,471,319 |
7.04 |
Retentions |
(805,756) |
(760,052) |
7.04.01 |
Depreciation and amortization |
(805,756) |
(760,052) |
7.05 |
Wealth created by the company |
8,398,577 |
7,711,267 |
7.06 |
Wealth received in transfer |
543,566 |
703,305 |
7.06.01 |
Interest in subsidiaries, associates and joint ventures |
154,102 |
162,678 |
7.06.02 |
Others |
389,464 |
540,627 |
7.07 |
Total wealth for disbribution |
8,942,143 |
8,414,572 |
7.08 |
Wealth distributed |
8,942,143 |
8,414,572 |
7.08.01 |
Personnel and charges |
676,975 |
697,891 |
7.08.01.01 |
Salaries and wages |
396,402 |
430,396 |
7.08.01.02 |
Benefits |
246,914 |
232,488 |
7.08.01.03 |
FGTS (Severance Pay Fund) |
33,659 |
35,007 |
7.08.02 |
Taxes, fees and contributions |
6,437,815 |
5,921,459 |
7.08.02.01 |
Federal |
3,496,765 |
3,153,099 |
7.08.02.02 |
State |
2,928,814 |
2,757,380 |
7.08.02.03 |
Municipal |
12,236 |
10,980 |
7.08.03 |
Lenders and lessors |
957,772 |
1,439,929 |
7.08.03.01 |
Interest |
921,289 |
1,399,462 |
7.08.03.02 |
Rentals |
36,483 |
40,467 |
7.08.04 |
Shareholders |
869,581 |
355,293 |
7.08.04.03 |
Retained earnings / Loss for the period |
869,581 |
355,293 |
20
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
COMMENTS ON THE INDIVIDUAL PERFORMANCE
The comments on performance are expressed in thousands of Reais - R$, unless otherwise stated.
Profit or loss analysis
CPFL Energia (Parent)
This quarter, the increase in profit was R$ 312,239 when compared with the same period of the prior year (R$ 455,714 in 2018 and R$ 143,475 in 2017) mainly due to the increase in profit of investees.
Consolidated | ||||||||||||
2nd Quarter |
1st Semester | |||||||||||
2018 |
2017 |
Variation |
2018 |
2017 |
Variation | |||||||
Gross operating revenue |
10,500,917 |
9,156,512 |
14.7% |
20,138,414 |
17,886,897 |
12.6% | ||||||
Electricity sales to final consumers (*) |
6,909,773 |
5,875,500 |
17.6% |
13,657,216 |
12,697,351 |
7.6% | ||||||
Electricity sales to wholesalers (*) |
1,317,495 |
1,454,121 |
-9.4% |
2,315,954 |
2,404,924 |
-3.7% | ||||||
Revenue from concession infrastructure construction |
370,053 |
462,323 |
-20.0% |
740,615 |
878,362 |
-15.7% | ||||||
Other operating revenues (*) |
1,422,896 |
995,250 |
43.0% |
2,570,382 |
2,101,946 |
22.3% | ||||||
Sector financial assets and liabilities |
480,699 |
369,317 |
30.2% |
854,246 |
(195,686) |
-536.5% | ||||||
Deductions from operating revenue |
(3,555,551) |
(3,193,963) |
11.3% |
(6,818,393) |
(6,385,569) |
6.8% | ||||||
Net operating revenue |
6,945,366 |
5,962,549 |
16.5% |
13,320,021 |
11,501,327 |
15.8% | ||||||
Cost of electric energy |
(4,538,036) |
(3,738,517) |
21.4% |
(8,551,758) |
(6,959,171) |
22.9% | ||||||
Electricity purchased for resale |
(3,862,633) |
(3,520,542) |
9.7% |
(7,163,909) |
(6,538,926) |
9.6% | ||||||
Network usage charge |
(675,403) |
(217,974) |
209.9% |
(1,387,849) |
(420,244) |
230.2% | ||||||
Operating costs and expenses |
(1,520,489) |
(1,661,141) |
-8.5% |
(2,990,831) |
(3,239,795) |
-7.7% | ||||||
Personnel |
(352,387) |
(336,678) |
4.7% |
(690,132) |
(669,161) |
3.1% | ||||||
Private pension entity |
(22,477) |
(28,112) |
-20.0% |
(44,955) |
(56,944) |
-21.1% | ||||||
Materials |
(63,357) |
(57,461) |
10.3% |
(125,979) |
(112,557) |
11.9% | ||||||
Third-party services |
(155,721) |
(189,136) |
-17.7% |
(336,653) |
(374,389) |
-10.1% | ||||||
Depreciation and amortization |
(342,494) |
(309,124) |
10.8% |
(661,170) |
(613,447) |
7.8% | ||||||
Amortization of concession intangible asset |
(71,287) |
(72,116) |
-1.1% |
(142,795) |
(144,232) |
-1.0% | ||||||
Cost of concession infrastructure construction |
(370,047) |
(465,666) |
-20.5% |
(740,606) |
(880,293) |
-15.9% | ||||||
Others |
(142,718) |
(202,849) |
-29.6% |
(248,540) |
(388,773) |
-36.1% | ||||||
Income from electric energy services |
886,842 |
562,923 |
57.5% |
1,777,433 |
1,302,395 |
36.5% | ||||||
Finance income (costs) |
(245,674) |
(418,168) |
-41.2% |
(553,193) |
(854,306) |
-35.2% | ||||||
Finance income |
169,078 |
222,632 |
-24.1% |
366,230 |
503,343 |
-27.2% | ||||||
Finance costs |
(414,752) |
(640,799) |
-35.3% |
(919,423) |
(1,357,649) |
-32.3% | ||||||
Share of profit (loss) of investees |
68,746 |
82,968 |
-17.1% |
154,102 |
162,678 |
-5.3% | ||||||
Profit before taxes |
709,913 |
227,724 |
211.7% |
1,378,341 |
610,767 |
125.7% | ||||||
Social contribution |
(69,844) |
(28,289) |
146.9% |
(136,712) |
(68,863) |
98.5% | ||||||
Income tax |
(189,892) |
(76,263) |
149.0% |
(372,047) |
(186,610) |
99.4% | ||||||
Profit for the period |
450,177 |
123,172 |
265.5% |
869,581 |
355,293 |
144.8% | ||||||
Profit for the period attributable to owners of the Company |
455,714 |
143,475 |
217.6% |
899,497 |
389,360 |
131.0% | ||||||
Profit for the perioid attributable to noncontrolling interests |
(5,537) |
(20,302) |
-72.7% |
(29,914) |
(34,067) |
-12.2% | ||||||
EBITDA |
1,369,511 |
1,027,277 |
33.3% |
2,735,789 |
2,223,042 |
23.1% | ||||||
Reconciliation of Profit for the Period and EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the Period |
450,177 |
123,172 |
869,581 |
355,293 |
|
|||||||
Depreciation and amortization |
413,781 |
381,240 |
803,966 |
757,679 |
|
|||||||
Amortization of fair value adjustment of assets |
145 |
145 |
290 |
290 |
|
|||||||
Finance income (costs) |
245,674 |
418,168 |
553,193 |
854,306 |
|
|||||||
Social contribution |
69,844 |
28,289 |
136,712 |
68,863 |
|
|||||||
Income tax |
189,892 |
76,263 |
372,047 |
186,610 |
|
|||||||
EBITDA |
1,369,511 |
1,027,277 |
2,735,789 |
2,223,042 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*) For purposes of presentation of the comments on performance, the reclassification of revenue from network usage charge - TUSD to captive consumer was not made.
21
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Gross operating revenue
Gross operating revenue for the 2nd quarter of 2018 was R$ 10,500,917, an increase of 14.7% (R$ 1,344,405) compared with the same period of the prior year.
The main factors of this variation were:
· Increase of 17.6% (R$ 1,034,273) in the electricity sales to final consumer, justified by the increase in average tariffs of 18.1% (R$ 1,060,183), mainly due to the positive effects of the Annual and Periodics Tariff Adjustments (RTA / RTP);
· Decrease of 9,4 % (R$ 136,626) in the electricity sales to wholesalers, mainly due to:
o Decrease of 48.5% (R$ 294,775) in sale of spot market energy in CCEE (Electric Energy Trading Chamber), basically due to the decrease in energy sold of 65.6% (R$ 398,781), partially offset by an increase in average tariffs of 49.7% (R$ 104,006).
o Increase of 18.7% (R$ 158,149) in other concessionaires, licensees and authorized, due to the increase in energy sold of 12% (R$ 101,372) and 6% in the average price (R$ 56,777);
· Increase of 30.2% (R$ 111,382) in sector financial assets income, due to a higher setting up of an asset (R$ 381,547) partially offset by a lower realization of liabilities (R$270,164).
· Increase of 43% (R$ 27,646) in other operating revenues, due to: increase in (i) TUSD free consumers (R$ 137,626) and (ii) other revenues and income (R$ 127,265), (iii) adjustment in concession financial asset (R$ 106,161) and (iv) contribution CDE (R$ 63,798).
Ø Volume of energy sold by distributors
In the 2nd quarter of 2018, the amount of energy billed to captive consumers in the period, including other licensees presented an increase of 2.3% when compared with the same quarter of the prior year.
The consumption of the residential class represents 43.1% of the total market supplied by the distributor. With the positive performance of income mass, which, in the accumulated of 12 months (until May 2018) recorded an increase of 3.5%, consumption recorded an increase of 5.7% in the 2nd quarter of 2018, in relation to the same period of the prior year.
The commercial class, which represents 19.3% of the total market supplied by the distributor, presented a growth of 0.2% in the 2nd quarter of 2018 in relation to the same period of the prior year. The result reflects partially the client’s migration to the free market and higher temperatures in the 2nd quarter of 2018 compared with the same period last year.
The industrial class, which represents 13% of the total market supplied by distributors, reported a fall of 8.8% in the 2nd quarter of 2018 in relation to the same period of the prior year. Such performance reflects the client’s migration to the free market.
The other consumption classes (rural, public administration, public utilities and licensees) participate with 24.6% of the total market supplied by distributors. Such classes presented a growth of 5.4% in the 2nd quarter of 2018 in relation to the same period of the prior year. This performance reflects the growth in consumption of rural and public utilities classes.
Regarding the amount of energy sold and transported in the concession area, which impacts both the billed supply (captive market) and the TUSD collection (free market), there was an increase of 4.0% when compared with the same period of the prior year. The variation by class presents an increase of 5.7% in the residential class, an increase of 3.7% in the commercial class and an increase of 2.4% in the industrial class. Regarding other classes, there was a growth of 5.3%.
22
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Ø Tariffs
In the 2nd quarter of 2018, energy supply tariffs increased on average 18.1%. This occurred mainly due to the effects of the annual tariff adjustments and periodic tariff review, as follows:
2018 |
2017 | |||||||||
Distributor |
Month |
RTA |
Effect perceived by consumers (a) |
RTA / RTP |
Effect perceived by consumers (a) | |||||
CPFL Paulista |
April (b) |
12.68% |
16.90% |
-0.80% |
-10.50% | |||||
CPFL Piratininga |
October |
(b) |
(b) |
7.69% |
17.28% | |||||
RGE |
June |
21.27% |
20.58% |
3.57% |
5.00% | |||||
RGE Sul |
April (b) |
18.45% |
22.47% |
-0.20% |
-6.43% | |||||
Companhia Força e Luz Santa Cruz |
March |
(c) |
(c) |
-1.28% |
-10.37% | |||||
CPFL Leste Paulista |
March |
(c) |
(c) |
0.76% |
-3.28% | |||||
CPFL Jaguari de Energia (CPFL Santa Cruz) |
March |
5.71% |
(c) |
2.05% |
-8.42% | |||||
CPFL Sul Paulista |
March |
(c) |
(c) |
1.64% |
-4.15% | |||||
CPFL Mococa |
March |
(c) |
(c) |
1.65% |
-2.56% |
(a) Represents the average effect perceived by the consumer, as a result of the elimination from the tariff base of financial components that had been added in the prior tariff adjustment.
(b) The respective adjustments for 2018 have not yet occurred.
(c) As mentioned in note 12.5.2 to the interim financial information, at December 31, 2017, the EGM approved the grouping of subsidiaries Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia e Companhia Luz and Força de Mococa. In accordance with Normative Resolution 716, of May 3, 2016, until the first tariff review of the grouped concessionaire, which will take place in March 2021, ANEEL may apply the procedure that divides over time the variation in the tariffs of the former concessions and the unified tariff. The decision regarding the tariff transition occurred in the tariff adjustment of March 2018.
On March 13, 2018, the Brazilian Electricity Regulatory Agency – ANEEL published Resolution No. 2,376, which set the average annual tariff adjustment of Companhia Jaguari de Energia (“CPFL Santa Cruz”), effective as of March 22, 2018, at 5.71%, 4.41% regarding the economic tariff adjustment and 1.30% regarding relevant financial components. The average effect to be perceived by consumers of the original concessions are:
Consumer perception |
Jaguari |
Mococa |
Leste Paulista |
Sul Paulista |
Santa Cruz | |||||||
21.15% |
3.40% |
7.03% |
7.50% |
5.32% |
Deductions from operating revenue
Deductions from operating revenue in the 2nd quarter of 2018 were R$ 3,555,551, an increase of 11.3% (R$ 361,588) in relation to the same quarter of 2017, which mainly occurred due to:
· Increase of 17.2% (R$ 133,778) in PIS and COFINS, mainly due to the increase in the basis of calculation of these taxes (operating revenue);
· Increase of 16.6% (R$ 213,158) in ICMS, mainly due to the increase in billed supply;Increase of 16.2% (R$ 141,233) in sector charges, mainly due to an increase in Energy Development Account – CDE (R$ 137,629), partially offset by a decrease in tariff flags and others (R$ 128,225).
Cost of electric energy
23
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
The cost of electric energy this quarter amounted to R$ 4,538,036, an increase of 21.4% (R$ 799,519) in relation to the same period of the prior year, mainly justified by:
· Increase of 9.7% (R$ 342,091) in electric energy purchased for resale, due to:
o Increase of 18.4% (R$ 599,569) in average price due to : increase in the PLD and dólar rate (Itaipu);
o Decrease of 7.3% (R$ 257,478) in the amount of energy purchased.
· Increase of 209.9% (R$ 457,429) in the transmission and distribution system usage charges, mainly due to: (i) basic network charges (R$ 327,130) and (ii) system service charge– ESS and reserve energy charge – EER (R$ 128,056).
Operating costs and expenses
Disregarding the cost of construction of the concession infrastructure, operating costs and expenses this quarter amounted to R$ 1,150,442, a decrease of 3.8% (R$ 45,033) compared with the same period of the prior year. This variation is mainly due to:
· Personnel: increase of 4.7% (R$ 15,710), mainly due to the effects of the collective labor agreement;
· Private pension entity: decrease of 20% (R$ 5,635) due to the recognition of the impact of the actuarial report of 2018;
· Materials: increase of 10.3% (R$ 5,896), mainly due to maintenance of lines and networks (R$ 11,240), partially offset by a decrease in uniforms and personal protection equipment (PPE) (R$ 3,178) and fleet maintenance (R$ 2,141);
· Third-party services: decrease of 17.7% (R$ 33,415) mainly due to the decreases: (i) equipment maintenance (R$ 5,554), (ii) PIS/COFINS credits (R$ 7,888) and (iii) insoursing of services (R$ 7,090).
· Depreciation and amortization: increase of 10.8% (R$ 33,370) due to the impact of periodic tariff adjustment in distribution subsidiaries;
· Other expenses: decrease of 29.6 % (R$ 60,131), mainly due to decreases in: (i) legal and compensations (R$ 27,037), (ii) loss in disposals and terminations of non current assets (R$ 13,996), (iii) offset for non-compliance with technical indexes (R$ 9,206), which, as of January 1, 2018 is now classified in Other Revenues.
Finance income (costs)
Net finance result this quarter presented costs of R$ 245,674, compared with R$ 418,168 in the same period of 2017, a decrease in net finance costs of 41.2% (R$ 172,494). Such variation is basically due to:
· Decrease in finance income of 24.1% (R$ 53,553), basically from a decrease in financial investment earnings (R$ 74,852), partially offset by adjustments of the sector financial asset (R$ 13,606);
· Decrease in finance costs of 35.3% (R$ 226,047), mainly due to the charges on debts, adjustments for inflation and exchange rate changes, net of capitalized interest (R$ 211,619), and adjustments of the sector financial liability (R$ 25,357).
24
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Share of profit (loss) of investees
The variation in share of profit (loss) of investees refers to the effect of the share of profit (loss) of joint ventures, as follows:
|
|
2nd Quarter 2018 |
2nd Quarter 2017 | |
Epasa |
|
19,442 |
|
17,805 |
Baesa |
|
(324) |
|
2,355 |
Enercan |
|
20,908 |
|
28,346 |
Chapecoense |
|
28,865 |
|
34,607 |
Amortization of fair value adjustment of asset |
|
(145) |
(145) | |
Total |
|
68,746 |
|
82,968 |
· ENERCAN: Decrease of R$ 7,438 mainly due to increase in financial expenses (R$ 7,735);
· Chapecoense: Decrease of R$ 5,742 mainly due to increase in financial expenses (R$ 4,962);
Social Contribution and Income Tax
Expenses on taxes on profit in the 2nd quarter of 2018 were R$ 259,736, an increase of 148.4% (R$ 155,184) in relation to the one recorded in the same quarter of 2017, which reflects mainly the effects of variation in Profit Before Taxes.
Profit for the Period and EBITDA
Due to the factors described above, the profit for this quarter was R$ 450,177, 265.5% (R$ 327,005) higher than the one of the same period of 2017.
EBITDA (Earnings before the effects of depreciation, amortization, finance income and costs, and income tax and social contribution) for the 2nd quarter of 2018 was R$ 1,369,511, 33.3% (R$ 342,234) higher than the one determined in the same period of 2017.
25
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
COMMENT ON THE PERFORMANCE OF SUBSIDIARIES/ASSOCIATES
Subsidiary/Associate: Companhia Paulista de Força e Luz - CPFL
The subsidiary Companhia Paulista de Força e Luz - CPFL is a publicly-held corporation, and the comment on its performance is included in its Quarterly Information - ITR as of June 30, 2018 filed with the Brazilian Securities and Exchange Commission (CVM).
Subsidiary/Associate: CPFL Geração de Energia S.A.
The subsidiary CPFL Geração de Energia S/A is a publicly-held corporation, and the comments on its individual and consolidated performance is included in its Quarterly Information – ITR as of June 30, 2018 filed with the Brazilian Securities and Exchange Commission (CVM).
Subsidiary/Associate: Companhia Piratininga de Força e Luz
The subsidiary Companhia Piratininga de Força e Luz is a publicly-held corporation, and the comments on its performance is included in its Quarterly Information – ITR as of June 30, 2018 filed with the Brazilian Securities and Exchange Commission (CVM).
Subsidiary/Associate: Rio Grande Energia S.A.
The subsidiary Rio Grande Energia S.A. is a publicly-held corporation, and the comment on its performance is included in its Quarterly Information – ITR as of June 30, 2018 filed with the Brazilian Securities and Exchange Commission (CVM).
Subsidiary/Associate: RGE Sul Distribuidora de Energia S.A.
The subsidiary RGE Sul Distribuidora de Energia S.A is a publicly-held corporation, and the comment on its performance is included in its Quarterly Information – ITR as of June, 30, 2018 filed with the Brazilian Securities and Exchange Commission (CVM).
26
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Subsidiary: CPFL Comercialização Brasil S.A.
Consolidated | |||||||||||
2nd Quarter |
1st Semester | ||||||||||
2018 |
2017 |
Variation |
2018 |
2017 |
Variation | ||||||
Gross operating revenue |
948,985 |
863,075 |
10.0% |
1,754,339 |
1,566,747 |
12.0% | |||||
Electricity sales to final consumers |
474,487 |
464,027 |
2.3% |
934,745 |
900,560 |
3.8% | |||||
Electricity sales to wholesalers |
474,496 |
399,046 |
18.9% |
819,590 |
666,183 |
23.0% | |||||
Other operating revenues |
2 |
2 |
0.0% |
4 |
4 |
0.0% | |||||
Deductions from operating revenue |
(107,110) |
(100,768) |
6.3% |
(203,561) |
(184,897) |
10.1% | |||||
Net operating revenue |
841,875 |
762,308 |
10.4% |
1,550,778 |
1,381,850 |
12.2% | |||||
Cost of electric energy |
(800,396) |
(717,866) |
11.5% |
(1,491,474) |
(1,287,067) |
15.9% | |||||
Electricity purchased for resale |
(800,258) |
(717,853) |
11.5% |
(1,491,307) |
(1,287,029) |
15.9% | |||||
Network usage charge |
(138) |
(13) |
965.2% |
(167) |
(38) |
340.4% | |||||
Operating expenses |
(12,141) |
(11,408) |
6.4% |
(23,752) |
(23,041) |
3.1% | |||||
Personnel |
(9,007) |
(7,545) |
19.4% |
(16,847) |
(15,287) |
10.2% | |||||
Materials |
(45) |
(52) |
-14.8% |
(69) |
(87) |
-20.0% | |||||
Third-party services |
(2,158) |
(1,478) |
46.0% |
(4,314) |
(3,554) |
21.4% | |||||
Depreciation/amortization |
(609) |
(789) |
-22.7% |
(1,221) |
(1,696) |
-28.0% | |||||
Others |
(321) |
(1,544) |
-79.2% |
(1,301) |
(2,417) |
-46.2% | |||||
Income from electric energy services |
29,338 |
33,034 |
-11.2% |
35,552 |
71,743 |
-50.4% | |||||
Finance income (costs) |
(4,836) |
(9,530) |
-49.3% |
(12,200) |
(20,729) |
-41.1% | |||||
Finance income |
7,152 |
5,319 |
34.5% |
17,924 |
12,370 |
44.9% | |||||
Finance costs |
(11,988) |
(14,849) |
-19.3% |
(30,124) |
(33,099) |
-9.0% | |||||
Equity |
5,059 |
(6,783) |
-174.6% |
17,858 |
(6,783) |
-363.3% | |||||
Profit before taxes |
29,561 |
16,721 |
76.8% |
41,210 |
44,231 |
-6.8% | |||||
Social contribution |
(2,411) |
(2,134) |
13.0% |
(2,385) |
(4,657) |
-48.8% | |||||
Income tax |
(6,733) |
(5,913) |
13.9% |
(6,916) |
(12,931) |
-46.5% | |||||
Profit for the period |
20,417 |
8,673 |
135.4% |
31,909 |
26,644 |
19.8% | |||||
EBITDA |
35,236 |
27,040 |
30.3% |
55,152 |
66,656 |
-17.3% | |||||
Reconciliation of Profit for the Period and EBITDA (*) |
|
|
|
|
|
|
|
|
|
|
|
Profit for the Period |
20,417 |
8,673 |
31,909 |
26,644 |
|
||||||
Depreciation and amortization |
609 |
789 |
1,221 |
1,696 |
|
||||||
Finance income (costs) |
4,836 |
9,530 |
12,200 |
20,729 |
|
||||||
Social contribution |
2,411 |
2,134 |
2,385 |
4,657 |
|
||||||
Income tax |
6,733 |
5,913 |
6,916 |
12,931 |
|
||||||
EBITDA |
35,236 |
27,040 |
55,152 |
66,656 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*) information not reviewed by the independent auditors. |
Gross Operating Revenue
The gross operating revenue for the 2nd quarter of 2018 was R$ 948,985, an increase of R$ 85,910 (10,0%) in relation to the same quarter of 2017, mainly explained by: (i) supply of electric energy, basically in the amount sold to industrial and commercial clients and public services, (29,6 GWh - R$ 9,499); (ii) supply of energy mainly in the amount of energy sold (267,8 GWh - R$ 79,744).
Cost of Electric Energy
Cost of electric energy in the 2nd quarter of 2018 was R$ 800,396, an increase of R$ 82,530 (11,5%) in relation to the same quarter of 2017, basically explained by bilateral contracts: increase in purchased volume (215,4 GWh - R$ 84,608).
Finance Income (Expenses)
27
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
The finance result in the 2nd quarter of 2018 was a finance expense of R$ 4,836, a decrease of R$ 44,694 in relation to the same quarter of 2017, mainly due to the decrease in debt expenses of R$4,118.
The share of profit (loss) of investees in the 2nd quarter of 2018 was R$ 5,059, as a result of the share of RGE Sul .
Profit for the Period and EBITDA
The result determined in the 2nd quarter of 2018 was a profit of R$ 20,417, an increase of R$ 11,744 (135.4%) when compared with the same quarter of 2017.
EBITDA (Earnings before finance result, income tax and social contribution and depreciation and amortization) for the 2nd quarter of 2018 was R$ 35,236, an increase of 30.3% when compared with the same quarter of 2017, which was R$ 27,040 .
28
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
NOTES TO FINANCIAL STATEMENTS | ||
SUMMARY | ||
ASSET | 2 | |
LIABILITY AND EQUITY | 3 | |
STATEMENT OF INCOME | 4 | |
STATEMENT OF COMPREHENSIVE INCOME | 5 | |
STATEMENT OF CHANGES IN SHAREHOLDER’ EQUITY | 6 | |
STATEMENT OF CASH FLOW | 7 | |
STATEMENT OF VALUE ADDED | 8 | |
( 1 ) | OPERATIONS | 9 |
( 2 ) | PRESENTATION OF THE INTERIM FINANCIAL STATEMENTS | 11 |
( 3 ) | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 13 |
( 4 ) | FAIR VALUE MEASUREMENT | 14 |
( 5 ) | CASH AND CASH EQUIVALENTS | 15 |
( 6 ) | CONSUMERS, CONCESSIONAIRES AND LICENSEES | 15 |
( 7 ) | TAXES RECOVERABLE | 17 |
( 8 ) | SECTOR FINANCIAL ASSET AND LIABILITY | 18 |
( 9 ) | DEFERRED TAX ASSETS AND LIABILITIES | 18 |
( 10 ) | CONCESSION FINANCIAL ASSET | 21 |
( 11 ) | OTHER RECEIVABLES | 21 |
( 12 ) | INVESTMENTS | 22 |
( 13 ) | PROPERTY, PLANT AND EQUIPMENT | 27 |
( 14 ) | INTANGIBLE ASSETS | 28 |
( 15 ) | TRADE PAYABLES | 29 |
( 16 ) | BORROWINGS | 30 |
( 17 ) | DEBENTURES | 35 |
( 18 ) | PRIVATE PENSION PLAN | 39 |
( 19 ) | REGULATORY CHARGES | 40 |
( 20 ) | TAXES, FEES AND CONTRIBUTIONS | 40 |
( 21 ) | PROVISION FOR TAX, CIVIL AND LABOR RISKS AND ESCROW DEPOSITS | 41 |
( 22 ) | OTHER PAYABLES | 42 |
( 23 ) | EQUITY | 42 |
( 24 ) | EARNINGS PER SHARE | 43 |
( 25 ) | NET OPERATING REVENUE | 43 |
( 26 ) | COST OF ELECTRIC ENERGY | 46 |
( 27 ) | OPERATING COSTS AND EXPENSES | 46 |
( 28 ) | FINANCE INCOME (COSTS) | 48 |
( 29 ) | SEGMENT INFORMATION | 48 |
( 30 ) | RELATED PARTY TRANSACTIONS | 49 |
( 31 ) | RISK MANAGEMENT | 50 |
( 32 ) | FINANCIAL INSTRUMENTS | 51 |
( 33 ) | NON-CASH TRANSACTIONS | 56 |
29
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
| |
CPFL Energia S.A. | |
Statements of financial position at June 30, 2018 and December 31, 2017 | |
(In thousands of Brazilian reais - R$) |
Note |
Parent company |
Consolidated | ||||||
ASSETS |
June 30, 2018 |
December 31, 2017 |
June 30, 2018 |
December 31, 2017 | ||||
Current assets |
||||||||
Cash and cash equivalents |
5 |
13,585 |
6,581 |
2,490,235 |
3,249,642 | |||
Consumers, concessionaires and licensees |
6 |
- |
- |
4,545,631 |
4,301,283 | |||
Dividends and interest on capital |
12 |
352,118 |
204,807 |
153,187 |
56,145 | |||
Income tax and social contribution to be offset |
7 |
16,989 |
17,051 |
135,278 |
88,802 | |||
Other taxes recoverable |
7 |
47,017 |
46,699 |
345,689 |
306,244 | |||
Derivatives |
32 |
- |
- |
449,475 |
444,029 | |||
Sector financial asset |
8 |
- |
- |
679,406 |
210,834 | |||
Concession financial asset |
10 |
- |
- |
23,241 |
23,736 | |||
Other receivables |
11 |
1,020 |
243 |
849,752 |
900,498 | |||
Total current assets |
430,729 |
275,383 |
9,671,894 |
9,581,211 | ||||
Noncurrent assets |
||||||||
Consumers, concessionaires and licensees |
6 |
- |
- |
235,146 |
236,539 | |||
Intragroup loans |
30 |
- |
127,147 |
- |
8,612 | |||
Escrow deposits |
21 |
777 |
665 |
866,057 |
839,990 | |||
Income tax and social contribution to be offset |
7 |
- |
- |
66,352 |
61,464 | |||
Other taxes recoverable |
7 |
- |
- |
167,122 |
171,980 | |||
Sector financial assets |
8 |
- |
- |
414,528 |
355,003 | |||
Derivatives |
32 |
- |
- |
370,585 |
203,901 | |||
Deferred tax assets |
9 |
147,855 |
145,779 |
825,862 |
943,199 | |||
Advances for future capital increases |
- |
350,000 |
- |
- | ||||
Concession financial asset |
10 |
- |
- |
7,053,027 |
6,545,668 | |||
Investments at cost |
- |
- |
116,654 |
116,654 | ||||
Other receivables |
11 |
5,315 |
5,761 |
901,320 |
840,192 | |||
Investments |
12 |
9,241,583 |
8,557,673 |
906,115 |
1,001,550 | |||
Property, plant and equipment |
13 |
1,159 |
1,170 |
9,612,096 |
9,787,125 | |||
Intangible assets |
14 |
92 |
71 |
10,501,494 |
10,589,824 | |||
Total noncurrent assets |
9,396,782 |
9,188,265 |
32,036,357 |
31,701,702 | ||||
Total assets |
9,827,511 |
9,463,648 |
41,708,250 |
41,282,912 |
The accompanying notes are an integral part of these interim financial statements.
30
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
| |||||||||
CPFL Energia S.A. | |||||||||
Statements of financial position at June 30, 2018 and December 31, 2017 | |||||||||
(In thousands of Brazilian reais - R$) | |||||||||
Note |
Parent company |
Consolidated | |||||||
LIABILITIES AND EQUITY |
June 30, 2018 |
December 31, 2017 |
June 30, 2018 |
December 31, 2017 | |||||
Current liabilities |
|||||||||
Trade payables |
15 |
136 |
1,644 |
3,229,917 |
3,296,870 | ||||
Borrowings |
16 |
- |
- |
3,011,598 |
3,589,607 | ||||
Debentures |
17 |
- |
1,938 |
1,385,146 |
1,703,073 | ||||
Private pension plan |
18 |
- |
- |
69,132 |
60,801 | ||||
Regulatory charges |
19 |
- |
- |
286,858 |
581,600 | ||||
Income tax and social contribution payable |
20 |
- |
- |
67,225 |
81,457 | ||||
Other taxes, fees and contributions |
20 |
458 |
717 |
403,535 |
628,846 | ||||
Dividends |
2,825 |
281,919 |
37,105 |
297,744 | |||||
Estimated payroll |
- |
- |
150,597 |
116,080 | |||||
Derivatives |
32 |
- |
- |
11,314 |
10,230 | ||||
Sector financial liability |
8 |
- |
- |
394 |
40,111 | ||||
Use of public asset |
- |
- |
11,179 |
10,965 | |||||
Other payables |
22 |
17,529 |
17,594 |
1,049,723 |
961,306 | ||||
Total current liabilities |
20,948 |
303,812 |
9,713,721 |
11,378,688 | |||||
Noncurrent liabilities |
|||||||||
Trade payables |
15 |
- |
- |
135,370 |
128,438 | ||||
Borrowings |
16 |
- |
- |
7,657,213 |
7,402,450 | ||||
Debentures |
17 |
- |
184,388 |
8,591,981 |
7,473,454 | ||||
Private pension plan |
18 |
- |
- |
870,298 |
880,360 | ||||
Other taxes, fees and contributions |
20 |
- |
- |
14,768 |
18,839 | ||||
Deferred tax liabilities |
9 |
- |
- |
1,276,832 |
1,249,591 | ||||
Provision for tax, civil and labor risks |
21 |
488 |
600 |
949,408 |
961,134 | ||||
Derivatives |
32 |
- |
- |
1,443 |
84,576 | ||||
Sector financial liability |
8 |
- |
- |
- |
8,385 | ||||
Use of public asset |
- |
- |
86,561 |
83,766 | |||||
Other payables |
22 |
10,315 |
13,320 |
469,910 |
426,889 | ||||
Total noncurrent liabilities |
10,803 |
198,308 |
20,053,785 |
18,717,880 | |||||
Equity |
23 |
||||||||
Issued capital |
5,741,284 |
5,741,284 |
5,741,284 |
5,741,284 | |||||
Capital reserves |
468,018 |
468,014 |
468,018 |
468,014 | |||||
Legal reserve |
798,090 |
798,090 |
798,090 |
798,090 | |||||
Statutory reserve - concession financial asset |
- |
826,600 |
- |
826,600 | |||||
Statutory reserve - working capital improvement |
1,292,046 |
1,292,046 |
1,292,046 |
1,292,046 | |||||
Accumulated comprehensive income |
(160,056) |
(164,506) |
(160,056) |
(164,506) | |||||
Retained earnings |
1,656,377 |
- |
1,656,377 |
- | |||||
9,795,759 |
8,961,528 |
9,795,759 |
8,961,528 | ||||||
Equity attributable to noncontrolling interests |
- |
- |
2,144,986 |
2,224,816 | |||||
Total equity |
9,795,759 |
8,961,528 |
11,940,745 |
11,186,344 | |||||
Total liabilities and equity |
9,827,511 |
9,463,648 |
41,708,250 |
41,282,912 |
The accompanying notes are an integral part of these interim financial statements.
31
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
| ||||||||||||||||
CPFL Energia S.A. | ||||||||||||||||
Statements of income for the periods ended June 30, 2018 and 2017 | ||||||||||||||||
(In thousands of Brazilian reais, except earnings per share) | ||||||||||||||||
Note |
Parent company |
Consolidated | ||||||||||||||
2018 |
2017 |
2018 |
2017 | |||||||||||||
2nd quarter |
1st semester |
2nd quarter |
1st semester |
2nd quarter |
1st semester |
2nd quarter |
1st semester | |||||||||
Net operating revenue |
25 |
- |
- |
- |
- |
6,945,366 |
13,320,021 |
5,962,549 |
11,501,327 | |||||||
Cost of electric energy services |
||||||||||||||||
Cost of electric energy |
26 |
- |
- |
- |
- |
(4,538,036) |
(8,551,758) |
(3,738,517) |
(6,959,171) | |||||||
Cost of operation |
27 |
- |
- |
- |
- |
(672,530) |
(1,342,462) |
(689,687) |
(1,356,470) | |||||||
Cost of services rendered to third parties |
27 |
- |
- |
- |
- |
(370,642) |
(742,003) |
(466,106) |
(881,373) | |||||||
|
|
|
|
|
|
|
| |||||||||
Gross profit |
- |
- |
- |
- |
1,364,158 |
2,683,798 |
1,068,239 |
2,304,314 | ||||||||
Operating expenses |
27 |
|||||||||||||||
Selling expenses |
- |
- |
- |
- |
(148,412) |
(277,051) |
(142,565) |
(291,782) | ||||||||
General and administrative expenses |
(8,405) |
(17,651) |
(6,905) |
(24,071) |
(236,112) |
(439,987) |
(255,226) |
(516,790) | ||||||||
Other operating expenses |
- |
- |
- |
- |
(92,794) |
(189,326) |
(107,526) |
(193,346) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from electric energy services |
(8,405) |
(17,651) |
(6,905) |
(24,071) |
886,840 |
1,777,432 |
562,923 |
1,302,395 | ||||||||
Equity interests in subsidiaries, associates and joint ventures |
12 |
462,042 |
913,028 |
160,193 |
432,040 |
68,746 |
154,102 |
82,968 |
162,678 | |||||||
Finance income (costs) |
28 |
|||||||||||||||
Finance income |
362 |
7,446 |
3,219 |
8,983 |
169,078 |
366,230 |
222,632 |
503,343 | ||||||||
Finance costs |
(89) |
(5,398) |
(19,047) |
(42,152) |
(414,752) |
(919,423) |
(640,799) |
(1,357,649) | ||||||||
273 |
2,048 |
(15,828) |
(33,169) |
(245,674) |
(553,193) |
(418,168) |
(854,306) | |||||||||
Profit before taxes |
453,910 |
897,426 |
137,460 |
374,800 |
709,913 |
1,378,341 |
227,724 |
610,767 | ||||||||
Social contribution |
9 |
788 |
1,340 |
1,962 |
5,082 |
(69,844) |
(136,712) |
(28,289) |
(68,863) | |||||||
Income tax |
9 |
1,015 |
731 |
4,052 |
9,479 |
(189,892) |
(372,047) |
(76,263) |
(186,610) | |||||||
1,803 |
2,071 |
6,014 |
14,561 |
(259,736) |
(508,760) |
(104,552) |
(255,474) | |||||||||
Profit for the period |
455,714 |
899,497 |
143,475 |
389,360 |
450,177 |
869,581 |
123,172 |
355,293 | ||||||||
Profit for the period attributable to owners of the Company |
455,714 |
899,497 |
143,475 |
389,360 | ||||||||||||
Profit (loss) for the period attributable to noncontrolling interests |
(5,537) |
(29,915) |
(20,302) |
(34,067) | ||||||||||||
Basic earnings per share attributable to owners of the Company - R$ |
24 |
0.45 |
0.88 |
0.14 |
0.38 | |||||||||||
Diluted earnings per share attributable to owners of the Company - R$ |
24 |
0.45 |
0.88 |
0.14 |
0.38 |
The accompanying notes are an integral part of these interim financial statements
32
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
| ||||||||
CPFL Energia S.A. | ||||||||
Statements of comprehensive income for the periods ended June 30, 2018 and 2017 | ||||||||
(In thousands of Brazilian reais - R$) | ||||||||
Parent company | ||||||||
2018 |
2017 | |||||||
2nd quarter |
1st semester |
2nd quarter |
1st semester | |||||
Profit for the period |
455,714 |
899,497 |
143,475 |
389,360 | ||||
Other comprehensive income |
||||||||
Items that will not be reclassified subsequently to profit or loss |
||||||||
Comprehensive income for the period of subsidiaries |
(1,865) |
(3,669) |
- |
- | ||||
Items that will be reclassified subsequently to profit or loss |
||||||||
Comprehensive income for the period of subsidiaries |
3,107 |
(13,140) |
- |
- | ||||
Total comprehensive income for the period - individual |
456,956 |
882,688 |
143,475 |
389,360 | ||||
Consolidated | ||||||||
2018 |
2017 | |||||||
2nd quarter |
1st semester |
2nd quarter |
1st semester | |||||
Profit for the period |
450,177 |
869,581 |
123,172 |
355,293 | ||||
Other comprehensive income |
||||||||
Items that will not be reclassified subsequently to profit or loss |
||||||||
- Actuarial gains (losses), net of tax effects |
(1,865) |
(3,669) |
- |
- | ||||
Items that will be reclassified subsequently to profit or loss |
||||||||
Comprehensive income for the period of subsidiaries |
3,107 |
(13,140) |
- |
- | ||||
Total comprehensive income for the period |
451,419 |
852,773 |
123,172 |
355,293 | ||||
Attributable to owners of the Company |
456,956 |
882,688 |
143,475 |
389,360 | ||||
Attributable to noncontrolling interests |
(5,537) |
(29,915) |
(20,302) |
(34,067) |
The accompanying notes are an integral part of these interim financial statements
33
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
| |||||||||||||||||||||||||
CPFL Energia S.A. | |||||||||||||||||||||||||
Statements of changes in shareholders' equity for the periods ended June 30, 2018 and 2017 | |||||||||||||||||||||||||
(In thousands of Brazilian reais - R$) | |||||||||||||||||||||||||
Earning reserves |
Accumulated comprehensive income |
Noncontrolling interests |
|
||||||||||||||||||||||
|
|
Statutory reserves |
|
|
|
|
Accumulated comprehensive income |
|
|
||||||||||||||||
Issued capital |
Capital reserve |
Legal reserve |
Concession financial asset |
Working capital improvement |
Dividend |
Deemed cost |
Private pension plan / Credit risk in mark to market |
Retained earnings |
Total |
Other equity components |
|
Total equity | |||||||||||||
Balance at December 31, 2017 |
5,741,284 |
468,014 |
798,090 |
826,600 |
1,292,046 |
- |
405,840 |
(570,346) |
- |
8,961,528 |
11,833 |
2,212,983 |
11,186,344 | ||||||||||||
Total comprehensive income |
- |
- |
- |
- |
- |
- |
- |
17,337 |
816,890 |
834,227 |
- |
(29,915) |
804,312 | ||||||||||||
Profit for the period |
- |
- |
- |
- |
- |
- |
- |
- |
899,497 |
899,497 |
- |
(29,915) |
869,582 | ||||||||||||
Other comprehensive income - credit risk in mark to market |
- |
- |
- |
- |
- |
- |
- |
21,006 |
(34,146) |
(13,140) |
- |
- |
(13,140) | ||||||||||||
Effects of first adoption of IFRS 9 / CPC 48 |
- |
- |
- |
- |
- |
- |
- |
- |
(48,461) |
(48,461) |
- |
- |
(48,461) | ||||||||||||
Other comprehensive income - actuarial gains (losses) |
- |
- |
- |
- |
- |
- |
- |
(3,669) |
- |
(3,669) |
- |
- |
(3,669) | ||||||||||||
Internal changes in equity |
- |
4 |
- |
(826,600) |
- |
- |
(12,887) |
- |
839,487 |
4 |
(889) |
842 |
(43) | ||||||||||||
Realization of deemed cost of property, plant and equipment |
- |
- |
- |
- |
- |
- |
(19,526) |
- |
19,526 |
- |
(1,347) |
1,347 |
- | ||||||||||||
Tax effect on realization of deemed cost |
- |
- |
- |
- |
- |
- |
6,639 |
- |
(6,639) |
- |
458 |
(458) |
- | ||||||||||||
Recognition of legal reserve |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- | ||||||||||||
Changes in statutory reserve in the period |
- |
- |
- |
(826,600) |
- |
- |
- |
- |
826,600 |
- |
- |
- |
- | ||||||||||||
Other changes in noncontrolling interests |
- |
4 |
- |
- |
- |
- |
- |
- |
- |
4 |
- |
(47) |
(43) | ||||||||||||
Capital transactions with owners |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(49,868) |
(49,868) | ||||||||||||
Balance at June 30, 2018 |
5,741,284 |
468,018 |
798,090 |
- |
1,292,046 |
- |
392,952 |
(553,008) |
1,656,377 |
9,795,759 |
10,943 |
2,134,042 |
11,940,745 | ||||||||||||
Earning reserves |
Accumulated comprehensive income |
Noncontrolling interests |
|
||||||||||||||||||||||
|
|
Statutory reserves |
|
|
|
|
Accumulated comprehensive income |
|
|
||||||||||||||||
Issued capital |
Capital reserve |
Legal reserve |
Concession financial asset |
Working capital improvement |
Dividend |
Deemed cost |
Private pension plan |
Retained earnings |
Total |
Other equity components |
|
Total equity | |||||||||||||
Balance at December 31, 2016 |
5,741,284 |
468,014 |
739,102 |
702,928 |
545,505 |
7,820 |
431,713 |
(666,346) |
- |
7,970,021 |
13,572 |
2,389,076 |
10,372,668 | ||||||||||||
Total comprehensive income |
- |
- |
- |
- |
- |
- |
- |
- |
389,360 |
389,360 |
- |
(34,067) |
355,293 | ||||||||||||
Profit for the period |
- |
- |
- |
- |
- |
- |
- |
- |
389,360 |
389,360 |
- |
(34,067) |
355,293 | ||||||||||||
Other comprehensive income - credit risk in mark to market |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- | ||||||||||||
Internal changes in equity |
- |
- |
- |
57,939 |
- |
- |
(12,833) |
- |
(45,106) |
- |
(875) |
842 |
(33) | ||||||||||||
Realization of deemed cost of property, plant and equipment |
- |
- |
- |
- |
- |
- |
(19,444) |
- |
19,444 |
- |
(1,325) |
1,325 |
- | ||||||||||||
Tax effect on realization of deemed cost |
- |
- |
- |
- |
- |
- |
6,611 |
- |
(6,611) |
- |
450 |
(450) |
- | ||||||||||||
Changes in statutory reserve in the period |
- |
- |
- |
57,939 |
- |
- |
- |
- |
(57,939) |
- |
- |
- |
- | ||||||||||||
Other changes in noncontrolling interests |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(33) |
(33) | ||||||||||||
Capital transactions with owners |
- |
- |
- |
- |
- |
(7,820) |
- |
- |
- |
(7,820) |
- |
(9,603) |
(17,423) | ||||||||||||
Capital increase |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
7 |
7 | ||||||||||||
Dividend proposal approved |
- |
- |
- |
- |
- |
(7,820) |
- |
- |
- |
(7,820) |
- |
(9,610) |
(17,430) | ||||||||||||
Balance at June 30, 2017 |
5,741,284 |
468,014 |
739,102 |
760,866 |
545,505 |
- |
418,880 |
(666,346) |
344,254 |
8,351,561 |
12,697 |
2,346,248 |
10,710,506 |
The accompanying notes are an integral part of these interim financial statements.
34
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
| ||||||||
CPFL Energia SA | ||||||||
Statements of cash flow for the periods ended June 30, 2018 and 2017 | ||||||||
(in thousand of Brazilian reais - R$) | ||||||||
Parent Company |
|
Consolidated | ||||||
June 30, 2018 |
June 30, 2017 |
June 30, 2018 |
June 30, 2017 | |||||
Profit before taxes |
897,426 |
374,800 |
1,378,341 |
610,767 | ||||
Adjustment to reconcile profit to cash from operating activities |
||||||||
Depreciation and amortization |
93 |
108 |
803,965 |
758,227 | ||||
Provision for tax, civil and labor risks |
(12) |
(155) |
55,305 |
93,064 | ||||
Allowance for doubtful accounts |
- |
- |
68,242 |
86,068 | ||||
Interest on debts, inflation adjustment and exchange rate changes |
2,973 |
40,867 |
576,458 |
1,108,799 | ||||
Pension plan expense (income) |
- |
- |
44,955 |
56,944 | ||||
Equity interests in associates and joint ventures |
(913,028) |
(432,040) |
(154,102) |
(162,678) | ||||
Reversal of impairment |
- |
- |
(5,837) |
- | ||||
Loss (gain) on disposal of noncurrent assets |
- |
- |
52,410 |
49,275 | ||||
Deferred taxes (PIS and COFINS) |
- |
- |
(182) |
1,037 | ||||
Others |
- |
- |
(36,581) |
20,660 | ||||
(12,549) |
(16,420) |
2,782,973 |
2,622,163 | |||||
Decrease (increase) in operating assets |
||||||||
Consumers, concessionaires and licensees |
- |
- |
(370,264) |
(279,388) | ||||
Dividend and interest on capital received |
428,935 |
288,061 |
152,494 |
184,117 | ||||
Taxes recoverable |
(116) |
(2,883) |
(57,253) |
(48,491) | ||||
Escrow deposits |
(106) |
35 |
(8,219) |
(243,817) | ||||
Sector financial asset |
- |
- |
(487,028) |
(25,525) | ||||
Receivables - CDE |
- |
- |
47,325 |
(21,720) | ||||
Concession financial assets (transmission companies) |
- |
- |
(3,979) |
(49,349) | ||||
Other operating assets |
341 |
18,451 |
(60,229) |
(71,804) | ||||
Increase (decrease) in operating liabilities |
||||||||
Trade payables |
(1,508) |
(3,185) |
(60,020) |
62,185 | ||||
Other taxes and social contributions |
(264) |
114 |
(234,899) |
(88,703) | ||||
Other liabilities with private pension plan |
- |
- |
(50,354) |
(34,406) | ||||
Regulatory charges |
- |
- |
(294,742) |
74,136 | ||||
Tax, civil and labor risks paid |
(119) |
(211) |
(92,987) |
(111,294) | ||||
Sector financial liability |
- |
- |
(69,878) |
315,136 | ||||
Payables - amounts provided by the CDE |
- |
- |
9,715 |
(744) | ||||
Other operating liabilities |
(2,738) |
(23,337) |
215,489 |
191,844 | ||||
Cash flows provided (used) by operations |
411,876 |
260,625 |
1,418,144 |
2,474,339 | ||||
Interest paid on debts and debentures |
(4,235) |
(44,656) |
(681,214) |
(934,922) | ||||
Income tax and social contribution paid |
- |
- |
(366,416) |
(258,873) | ||||
Net cash from operating activities |
407,641 |
215,969 |
370,514 |
1,280,544 | ||||
Investing activities |
||||||||
Purchases of property, plant and equipment |
(252) |
(42) |
(129,534) |
(548,625) | ||||
Securities, pledges and restricted deposits |
(500) |
- |
(66,487) |
(81,107) | ||||
Purchases of intangible assets |
(23) |
(4) |
(718,124) |
(790,940) | ||||
Sale of noncurrent assets |
- |
- |
- |
94 | ||||
Advances for future capital increases |
(62,395) |
(38,950) |
- |
- | ||||
Intragroup loans |
127,625 |
45,280 |
- |
38,793 | ||||
|
|
|
| |||||
Net cash generated by (used) In investing activities |
64,455 |
6,284 |
(914,145) |
(1,381,785) | ||||
Financing activities |
||||||||
Capital increase of noncontrolling shareholder |
- |
- |
15 |
7 | ||||
Borrowings and debentures raised |
- |
- |
6,386,698 |
986,988 | ||||
Repayment of principal of borrowings and debentures |
(186,000) |
- |
(6,657,657) |
(2,342,145) | ||||
Repayment of derivatives |
- |
- |
365,434 |
(148,177) | ||||
Dividend and interest on capital paid |
(279,093) |
(220,906) |
(310,267) |
(241,826) | ||||
Business combination payment |
- |
- |
- |
(2,514) | ||||
Net cash generated by (used in) financing activities |
(465,093) |
(220,906) |
(215,777) |
(1,747,667) | ||||
Net increase (decrease) in cash and cash equivalents |
7,003 |
1,347 |
(759,407) |
(1,848,907) | ||||
Cash and cash equivalents at the beginning of the period |
6,581 |
64,973 |
3,249,642 |
6,164,997 | ||||
Cash and cash equivalents at the end of the period |
13,585 |
66,321 |
2,490,235 |
4,316,090 |
The accompanying notes are an integral part of these interim financial statements.
35
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
| |||||||
CPFL Energia SA | |||||||
Statements of value added for the periods ended June 30, 2018 and 2017 | |||||||
(in thousand of Brazilian reais - R$) | |||||||
Parent Company |
|
Consolidated | |||||
1st semester 2018 |
1st semester 2017 |
1st semester 2018 |
1st semester 2017 | ||||
1 - Revenues |
275 |
46 |
20,220,616 |
18,408,445 | |||
1.1 Operating revenues |
- |
- |
19,397,799 |
17,008,535 | |||
1.2 Revenue related to the construction of own assets |
275 |
46 |
150,444 |
607,616 | |||
1.3 Revenue from construction of concession infrastructure |
- |
- |
740,615 |
878,362 | |||
1.4 Allowance for doubtful accounts |
- |
- |
(68,242) |
(86,068) | |||
2 - (-) Inputs |
(5,477) |
(4,289) |
(11,016,283) |
(9,937,126) | |||
2.1 Electricity purchased for resale |
- |
- |
(9,478,293) |
(7,749,937) | |||
2.2 Material |
(322) |
(66) |
(591,856) |
(1,078,775) | |||
2.3 Outsourced services |
(3,902) |
(3,507) |
(693,424) |
(764,079) | |||
2.4 Others |
(1,253) |
(716) |
(252,710) |
(344,335) | |||
3 - Gross value added (1+2) |
(5,202) |
(4,243) |
9,204,333 |
8,471,319 | |||
4 - Retentions |
(93) |
(108) |
(805,756) |
(760,052) | |||
4.1 Depreciation and amortization |
(93) |
(108) |
(662,961) |
(615,819) | |||
4.2 Amortization of intangible assets of concession |
- |
- |
(142,795) |
(144,232) | |||
5 - Net value added generated (3+4) |
(5,295) |
(4,351) |
8,398,577 |
7,711,267 | |||
6 - Value Added received in transfer |
920,839 |
441,515 |
543,566 |
703,305 | |||
6.1 Financial income |
7,810 |
9,475 |
389,464 |
540,627 | |||
6.2 Interest in subsidiaries, associates and joint ventures |
913,028 |
432,040 |
154,102 |
162,678 | |||
7 - Value Added to be distributed (5+6) |
915,544 |
437,164 |
8,942,143 |
8,414,572 | |||
8 - Distribution of value added |
|||||||
8.1 Personnel and charges |
10,447 |
16,769 |
676,975 |
697,891 | |||
8.1.1 Direct remuneration |
5,187 |
11,894 |
396,402 |
430,397 | |||
8.1.2 Benefits |
4,522 |
3,936 |
246,914 |
232,488 | |||
8.1.3 Government severance indemnity fund for employees - F.G.T.S |
738 |
938 |
33,659 |
35,007 | |||
8.2 Taxes, fees and contributions |
205 |
(11,187) |
6,437,815 |
5,921,459 | |||
8.2.1 Federal |
181 |
(11,203) |
3,496,765 |
3,153,099 | |||
8.2.2 Estate |
24 |
16 |
2,928,814 |
2,757,380 | |||
8.2.3 Municipal |
- |
- |
12,236 |
10,980 | |||
8.3 Lenders and lessors |
5,396 |
42,223 |
957,772 |
1,439,930 | |||
8.3.1 Interest |
5,394 |
42,012 |
921,288 |
1,399,463 | |||
8.3.2 Rental |
2 |
211 |
36,483 |
40,467 | |||
8.4 Interest on capital |
899,497 |
389,360 |
869,581 |
355,293 | |||
8.4.1 Retained earnings |
899,497 |
389,360 |
869,581 |
355,293 | |||
915,544 |
437,164 |
8,942,143 |
8,414,572 |
The accompanying notes are an integral part of these interim financial statements.
36
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
CPFL ENERGIA S.A.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
AT JUNE 30, 2018
(Amounts in thousands of Brazilian reais – R$, unless otherwise stated)
( 1 )OPERATIONS
CPFL Energia S.A. (“CPFL Energia” or “Company”) is a publicly-held corporation incorporated for the principal purpose of operating as a holding company, with equity interests in other companies primarily engaged in electric energy distribution, generation and commercialization activities in Brazil.
The Company’s registered office is located at Rodovia Engenheiro Miguel Noel Nascentes Burnier, km 2,5, Parque São Quirino - Campinas - SP - Brazil.
The Company has direct and indirect interests in the following subsidiaries and joint:
Energy distribution |
Company type |
Equity interest |
Location (state) |
Number of municipalities |
Approximate number of consumers (in thousands) |
Concession period |
End of the concession | |||||||
Companhia Paulista de Força e Luz ("CPFL Paulista") |
Publicly-held corporation |
Direct |
Interior of São Paulo |
234 |
4,441 |
30 years |
November 2027 | |||||||
Companhia Piratininga de Força e Luz ("CPFL Piratininga") |
Publicly-held corporation |
Direct |
Interior and coast of São Paulo |
27 |
1,736 |
30 years |
October 2028 | |||||||
Rio Grande Energia S.A. ("RGE") |
Publicly-held corporation |
Direct |
Interior of Rio Grande do Sul |
255 |
1,499 |
30 years |
November 2027 | |||||||
RGE Sul Distribuidora de Energia S.A. ("RGE Sul") |
Publicly-held corporation |
Indirect |
Interior of Rio Grande do Sul |
118 |
1,351 |
30 years |
November 2027 | |||||||
Companhia Jaguari de Energia ("CPFL Santa Cruz") (e) |
Privately-held corporation |
Direct |
Interior of São Paulo, Paraná and Minas Gerais |
45 |
452 |
30 years |
July 2045 |
Installed power (MW) | ||||||||||||
Energy generation |
Company type |
Equity interest |
Location (state) |
Number of plants / type of energy |
Total |
CPFL share | ||||||
CPFL Geração de Energia S.A. |
Publicly-held corporation |
Direct |
São Paulo and Goiás |
3 Hydropower (a) |
1295 |
678 | ||||||
CERAN - Companhia Energética Rio das Antas |
Privately-held corporation |
Indirect |
Rio Grande do Sul |
3 Hydropower |
360 |
234 | ||||||
Foz do Chapecó Energia S.A. |
Privately-held corporation |
Indirect |
Santa Catarina and |
1 Hydropower |
855 |
436 | ||||||
Campos Novos Energia S.A. |
Privately-held corporation |
Indirect |
Santa Catarina |
1 Hydropower |
880 |
429 | ||||||
BAESA - Energética Barra Grande S.A. |
Privately-held corporation |
Indirect |
Santa Catarina and |
1 Hydropower |
690 |
173 | ||||||
Centrais Elétricas da Paraíba S.A. |
Privately-held corporation |
Indirect |
Paraíba |
2 Thermal |
342 |
182 | ||||||
Paulista Lajeado Energia S.A. |
Privately-held corporation |
Indirect |
Tocantins |
1 Hydropower |
903 |
63 | ||||||
CPFL Energias Renováveis S.A. |
Publicly-held corporation |
Indirect |
(c) |
(c) |
(c) |
(c) | ||||||
CPFL Centrais Geradoras Ltda ("CPFL Centrais Geradoras") |
Limited liability company |
Direct |
São Paulo and Minas Gerais |
6 SHPs |
4 |
4 |
Energy commercialization |
Company type |
Core activity |
Equity interest | |||
CPFL Comercialização Brasil S.A. ("CPFL Brasil") |
Privately-held corporation |
Energy commercialization |
Direct | |||
Clion Assessoria e Comercialização de Energia Elétrica Ltda. |
Limited liability company |
Commercialization and provision of energy services |
Indirect | |||
CPFL Comercialização Cone Sul S.A. ("CPFL Cone Sul") |
Privately-held corporation |
Energy commercialization |
Indirect | |||
CPFL Planalto Ltda. ("CPFL Planalto") |
Limited liability company |
Energy commercialization |
Direct | |||
CPFL Brasil Varejista S.A. ("CPFL Brasil Varejista") |
Privately-held corporation |
Energy commercialization |
Indirect |
37
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Provision of services |
Company type |
Core activity |
Equity interest | |||
CPFL Serviços, Equipamentos, Industria e Comércio S.A. |
Privately-held corporation |
Manufacturing, commercialization, rental and maintenance of electro-mechanical equipment and service provision |
Direct | |||
NECT Serviços Administrativos Ltda ("Nect") |
Limited liability company |
Provision of administrative services |
Direct | |||
CPFL Atende Centro de Contatos e Atendimento Ltda. ("CPFL Atende") |
Limited liability company |
Provision of call center services |
Direct | |||
CPFL Total Serviços Administrativos Ltda. ("CPFL Total") |
Limited liability company |
Collection services |
Direct | |||
CPFL Eficiência Energética S.A ("CPFL Eficiência") |
Privately-held corporation |
Energy efficiency management |
Direct | |||
TI Nect Serviços de Informática Ltda. ("Authi") |
Limited liability company |
Provision of IT services |
Direct | |||
CPFL GD S.A ("CPFL GD") |
Privately-held corporation |
Provision of maintenance services for energy generation companies |
Indirect | |||
Others |
Company type |
Core activity |
Equity interest | |||
CPFL Jaguari de Geração de Energia Ltda ("Jaguari Geração") |
Limited liability company |
Holding company |
Direct | |||
Chapecoense Geração S.A. ("Chapecoense") |
Privately-held corporation |
Holding company |
Indirect | |||
Sul Geradora Participações S.A. ("Sul Geradora") |
Privately-held corporation |
Holding company |
Indirect | |||
CPFL Telecom S.A ("CPFL Telecom") |
Privately-held corporation |
Telecommunication services |
Direct | |||
CPFL Transmissão Piracicaba S.A ("CPFL Piracicaba") |
Privately-held corporation |
Energy transmission services |
Indirect | |||
CPFL Transmissora Morro Agudo S.A ("CPFL Morro Agudo") |
Privately-held corporation |
Energy transmission services |
Indirect |
a) CPFL Geração has 51.54% of the assured energy and power of the Serra da Mesa hydropower plant, which concession is owned by Furnas. The plants Carioba and Cariobinha are inactive while they await the position on the early termination of their concession and are not included in the table.
b) Paulista Lajeado holds a 7% interest in the installed power of Investco S.A. (5.94% interest in total capital).
c) CPFL Renováveis has operations in the states of São Paulo, Minas Gerais, Mato Grosso, Santa Catarina, Ceará, Rio Grande do Norte, Paraná and Rio Grande do Sul and its main activities are: (i) holding investments in companies of the renewable energy segment; (ii) identification, development, and exploration of generation potentials; and (iii) sale of electric energy. At June 30, 2018, CPFL Renováveis had a portfolio of 110 projects of 2,479.9 MW of installed capacity (2,102.6 MW in operation).
· Hydropower generation: 44 SHP’s (514.7 MW) with 39 SHPs in operation (423 MW) and 5SHPs under development (91.7 MW);
· Wind power generation: 57 projects (1,594.1 MW) with 45 projects in operation (1,308.5 MW) and 12 projects under construction/development (285.6 MW);
· Biomass power generation: 8 plants in operation (370 MW);
· Solar power generation: 1 solar plant in operation (1.1 MW).
d) The joint venture Chapecoense has as its direct subsidiary Foz do Chapecó and fully consolidates its financial statements.
e) As described in note 12.5.2, on December 31, 2017, approval was given for the merger of the subsidiaries Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia and Companhia Luz e Força de Mococa into Companhia Jaguari de Energia, which adopted the trade name “CPFL Santa Cruz”.
38
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
As at June 30, 2018, the Company recorded in the interim financial statements a negative net working capital of R$ 41,827. The Company has been monitoring timely the net working capital and your cash generation, as well as the profit projections, which supports and makes feasible the reduction of the net working capital.
( 2 ) PRESENTATION OF THE INTERIM FINANCIAL STATEMENTS
2.1 Basis of preparation
This interim individual (Parent Company) and consolidated financial statement has been prepared and is being presented in accordance with the International Accounting Standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standard Board – IASB, and also based on standards issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of Quarterly Financial Information (ITR), in accordance with Technical Pronouncement CPC 21 (R1) - Interim Financial Reporting.
The Company and the subsidiaries (“Group”) also follows the guidelines of the Accounting Manual of the Brazilian Electricity Sector and the standards laid down by the Brazilian Electricity Regulatory Agency (Agência Nacional de Energia Elétrica – ANEEL), when these do not conflict with the accounting practices adopted in Brazil and/or International Financial Reporting Standards.
The accounting practices and criteria adopted in preparing this individual and consolidated interim financial statements are consistent with those adopted in preparing the financial statements at December 31, 2017, except for the matters described in note 3, and therefore should be read together.
Management states that all material information of the interim financial statements is disclosed and corresponds to what is used in the Group's management.
The interim financial statements were authorized for issue by Management and on August 6, 2018.
2.2 Basis of measurement
The interim financial statements has been prepared on the historical cost basis except for the following items recorded in the statements of financial position: i) derivative financial instruments measured at fair value and ii) financial instruments measured at fair value through profit or loss. The classification of the fair value measurement in the level 1, 2 or 3 categories (depending on the degree of observance of the variables used) is presented in note 32 – Financial Instruments.
2.3 Use of estimates and judgments
The preparation of the interim financial statements requires the Group’s management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
By definition, the accounting estimates are rarely the same as the actual results. Accordingly, the Group’s management review the estimates and assumptions on an ongoing basis, based on previous experience and other relevant factors. Adjustments resulting from revisions to accounting estimates are recognized in the period in which the estimates are revised and applied on a prospective basis.
The main accounts that require the adoption of estimates and assumptions, which are subject to a greater degree of uncertainty and may result in a material adjustment if these estimates and assumptions suffer significant changes in subsequent periods, are:
39
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
· |
Note 6 – Consumers, concessionaires and licensees (Allowance for doubtful accounts: key assumptions regarding to the expected credit loss); | |
· |
Note 8 – Sector financial asset and liability (certain financial components that can start without prior methodology); | |
· |
Note 9 – Deferred tax assets and liabilities (recognition of assets: availability of future taxable profit against which the tax losses can be utilized); | |
· |
Note 10 – Concession financial asset (assumptions for fair value measurement, based on significant unobservable inputs); | |
· |
Note 11 – Other receivables (allowance for doubtful accounts: key assumptions regarding to the expected credit loss); | |
· |
Note 13 – Property, plant and equipment (application of defined useful lives and key assumptions regarding recoverable amounts); | |
· |
Note 14 – Intangible assets (key assumptions regarding recoverable amounts); | |
· |
Note 18 – Private pension plan (key actuarial assumptions used in the measurement of defined benefit obligations); | |
· |
Note 21 – Provision for tax, civil and labor risks and escrow deposits (recognition and measurement: key assumptions on the probability and magnitude of outflow of resources); | |
· |
Note 25 – Net operating revenue (assumptions for measurement of unbilled supply and Distribution System Usage Tariff - TUSD ); and | |
· |
Note 32 – Financial instruments (assumptions for fair value measurement, based on significant unobservable inputs). |
2.4 Functional currency and presentation currency
The Group’s functional currency is the Brazilian Real, and the individual and consolidated interim financial statements is being presented in thousands of reais. Figures are rounded only after sum-up of the amounts. Consequently, when summed up, the amounts stated in thousands of reais may not tally with the rounded totals.
2.5 Segment information
An operating segment is a component of the Company (i) that engages in operating activities from which it earns revenues and incurs expenses, (ii) whose operating results are regularly reviewed by Management to make decisions about resources to be allocated and assess the segment's performance, and (iii) for which individual financial information is available.
The Group’s officers use reports to make strategic decisions, segmenting the business into: (i) electric energy distribution activities (“Distribution”); (ii) electric energy generation from conventional sources activities (“Generation”); (iii) electric energy generation activities from renewable sources (“Renewables”); (iv) energy commercialization activities (“Commercialization”); (v) service activities (“Services”); and (vi) other activities not listed in the previous items.
The presentation of the operating segments includes items directly attributable to them, as well as any allocations required, including intangible assets, see note 29 for further details.
40
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
2.6 Information on equity interests
The Company's equity interests in direct and indirect subsidiaries and joint ventures are described in note 1. Except for (i) the companies ENERCAN, BAESA, Chapecoense and EPASA, which use the equity method of accounting, and (ii) the investment measured at cost by the subsidiary Paulista Lajeado in Investco S.A., all other entities are fully consolidated.
At June 30, 2018 and December 31, 2017 and for the quarters and semesters ended June 30, 2018 and 2017 the noncontrolling interests in the consolidated balances refer to interests held by third parties in subsidiaries CERAN, Paulista Lajeado and CPFL Renováveis.
2.7 Statement of value added
The Company has prepared the individual and consolidated statements of value added (“DVA”) in conformity with technical pronouncement CPC 09 - Statement of Value Added, which are presented as an integral part of the interim financial statements in accordance with accounting practices adopted in Brazil and as supplementary information to the interim financial statements in accordance with IFRS, as this statement is neither provided for nor required by IFRS.
( 3 ) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Except for the matters described below, the main interim financial information of the Group was prepared based on the same accounting policies described in explanatory notes 3.1 to 3.18, disclosed in the financial statements for the year ended December 31, 2017.
The impact from the changes in accounting policies is also expected in the Group’s consolidated financial statements for the year ending December 31, 2018.
Nature and effect of changes arising from the application of new and revised standards
The Group adopted for the first time the CPC 48 / IFRS 9 Financial Instruments and CPC 47 / IFRS 15 Revenue from Contracts with Customers beginning on January 1, 2018, accordingly, the information presented for 2017 was not restated and, therefore, was presented as previously reported in accordance with CPC 38 / IAS 18, CPC 17 / IAS 11, CPC 38, 39, 40 / IAS 32, 39 and IFRS 7 and related interpretations. Several other standards are effective January 1, 2018, however, without material effect on the Group’s interim financial information.
The effect from the initial application of these standards is mainly related to:
· The categories for the classification of financial assets and liabilities, eliminating the categories existing under CPC 38 / IAS 39 of held to maturity, loans and receivables and available for sale;
· Mark to market of financial liabilities, the recognition of the credit risk in other comprehensive income, previously recorded in profit or loss for the period;
· An increase in impairment in the balance of consumers, concessionaires and licensees recognized in financial assets
CPC 48 / IFRS 9 Financial Instruments
CPC 48 / IFRS 9 establishes requirements to recognize and measure financial assets, financial liabilities and some agreements for purchase or sale of nonfinancial items. This standard replaces CPC 38 / IAS 39 Financial Instruments: Recognition and Measurement.
a) Classification and measurement of Financial Assets and Liabilities
CPC 48 / IFRS 9 Financial Instruments maintains most of the requirements existing under CPC 38 / IAS 39 for the classification and measurement of financial liabilities. However, it eliminates the former categories of CPC 38 / IAS 39 for financial assets: held to maturity, loans and receivables and available for sale.
The following accounting policies apply to the subsequent measurement of financial assets:
41
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Financial assets at fair value through profit or loss |
These assets are subsequently measured at fair value. Net gains or losses, including interest or dividend income, are recognized in profit or loss. |
Financial assets at amortized cost |
These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on the derecognition is recognized in profit or loss. |
Debt instruments at fair value through other comprehensive income |
These assets are subsequently measured at fair value. Net gains and losses are recognized in other comprehensive income, except the interest income calculated using the effective interest method, foreign exchange gains and losses and impairment, that are recognized in profit or loss. Other In the moment of the derecognition, the accumulated effect profit or loss in other comprehensive income (loss) is reclassified to profit or loss for the period. |
Equity instruments at fair value through other comprehensive income |
These assets are subsequently measured at fair value. Every are recognized in other comprehensive income (loss) and never will be reclassified in profit or loss, except for dividends, that are recognized as gains in profit or loss (unless the dividend clearly represents a recovery of part of the investment cost). |
As described in note 3.17 to the financial statements for the year ended December 31, 2017, the Company’s distribution subsidiaries had material assets classified as “available for sale”, according to the current requirements of IAS 39 / CPC 38. These assets represent the right to indemnity at the end of the concession period of the distribution subsidiaries. These assets started to be classified as measured at fair value through profit or loss according to the new standard and the effects of the subsequent measurement of these assets are recognized in profit or loss for the year, with no material impacts on the Company’s consolidated financial statements. The classification of financial assets and liabilities is presented according to the note 31 to this interim financial information.
The Group assessed the impacts from the adoption of CPC 48 / IFRS 49 regarding the classification and measurement of concession financial assets, applicable to the electricity transmission subsidiaries, as follows: (i) the financial assets of infrastructure implementation services, until then classified as loans and receivables, are now classified as at amortized cost. This change in classification does not change the measurement of these assets and does not generate impact on the quarterly information; (ii) indemnity financial assets, until then classified as loans and receivables are now measured at fair value through profit or loss, without material impacts identified on the interim financial information.
The adoption of CPC 48 / IFRS 9 had no significant impact on the Group’s accounting policies related to financial liabilities and derivative financial instruments (for derivatives used as hedge instruments). According to note 3.18 to the financial statements for the year ended December 31, 2017, IFRS 9 / CPC 48 determines that the financial liabilities designated as at fair value through profit or loss that have the credit risk as a component of their calculation, to have the effect of changes in this credit risk recorded in other comprehensive income, instead of directly in profit or loss for the year.
The differences in the carrying amounts of financial liabilities arising from the adoption of CPC 48 / IFRS 9 were recognized retrospectively in line item retained earnings on January 1, 2018. The accumulated amount recorded in other comprehensive income due to this change was a loss of R$ 51,736 (R$ 34,146 net of tax effects).
b) Impairment of financial assets
CPC 48 / IFRS 9 requires the expected credit loss model, instead of the “incurred” credit loss model mentioned in IAS 39 / CPC 38. The expected credit loss model requires that the company account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. That is, the credit losses are recognized earlier than under CPC 38 / IAS 39, under which it is no longer necessary for a loss event to have occurred before credit losses are recognized.
42
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
In assessing whether the credit risk of a financial asset has increased significantly since the initial recognition and in estimating the expected credit losses, the Group considers reasonable and supportable information that is significant and available without excessive cost or effort. This includes quantitative and qualitative information and analyses, based on the Group’s historical experience in credit analysis. The provision for losses on financial assets measured at amortized cost is deduced from the gross carrying amount of the assets.
Impairment losses related to consumers, concessionaires and licensees recognized in financial assets and other receivables, including contractual assets, are recorded in profit or loss for the period. As a retrospective result of the adoption of this pronouncement, the Group on January 1, 2018, recorded an additional expense of R$ 73,426, directly in Retained Earnings (R$ 48,461 net of tax effects).
CPC 47 / IFRS 15 Revenue recognition
CPC 47 / IFRS 15 establish that revenue most be recognized net of eventual discounts, rebates, refunds, penalties or similar item. The distribution concessionaries are evaluated by service quality rendered to consumers. The quality of the rendered service compromises the evaluation of electricity supply interruptions. When determined index are not complied, the distribution companies are subject of penalties, currently recognized as operational expense.
With CPC 47 / IFRS 15 adoption, it become a revenue deduction, which is a simple reclassification in the profit or loss, with no effect in the Company’ net profit. From January 1st, 2018, the compensation by not complying of technical index is being recognized as operation revenue, in others revenues, until December 31, 2017 was recognized in other operational expenses. The amount recorded in the 1st semester of 2018 is R$ 29,821 (note 25).
( 4 )FAIR VALUE MEASUREMENT
A number of the Group’s accounting policies and disclosures require the fair value measurement, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the following methods. When applicable, additional information on the assumptions made in the fair value measurement is disclosed in the notes specific to that asset or liability.
Accordingly, the Group measures fair value in accordance with IFRS 13 / CPC 46, which defines the fair value as the price estimate for which an unforced transaction for the sale of the asset or transfer of the liability would occur between market participants under current market conditions at the measurement date.
- Property, plant and equipment and intangible assets
The fair value of property, plant and equipment and intangible assets recognized as a result of a business combination is based on market values. The fair value of these assets is the estimated value for which an asset could be exchanged on the valuation date between knowledgeable interested parties in an unforced transaction between market participants at the measurement date. The fair value of items of property, plant and equipment is based on the market approach and cost approaches using quoted market prices for similar items when available and replacement cost when appropriate.
- Financial instruments
Financial instruments measured at fair value are valued based on quoted prices in an active market, or, if such prices are not available, they are assessed using pricing models, applied individually to each transaction, taking into consideration future payment flows, based on the contractual conditions, discounted to present value at rates obtained from market interest curves, having as a basis, whenever available, information obtained from the websites of B3 S.A. and “Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais – ANBIMA” (note 32) and also includes the debtor's credit risk rate.
43
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
The right to compensation, to be paid by the Federal Government when the distribution concessionaires’ assets are handed over at the end of the concession period are classified as measured at fair value. The methodology adopted for fair value measurement of these assets is based on the tariff review process for distributors. This process, conducted every four or five years according to each concessionaire, involves assessing the replacement price of the distribution infrastructure, in accordance with criteria established by the granting authority (“ANEEL”). This valuation basis is used for pricing the tariff, which is adjusted annually up to the next tariff review, based on the parameter of the main inflation indices.
Accordingly, at the time of the tariff review, each distribution concessionaire adjusts the position of the financial asset base for compensation at the amounts ratified by the granting authority and uses the Extended Consumer Price Index (“IPCA”) as the best estimate to adjust the original base to the adjusted value at subsequent dates, in accordance with the tariff review process.
( 5 )CASH AND CASH EQUIVALENTS
Parent company |
Consolidated | ||||||
June 30, 2018 |
December 31, 2017 |
June 30, 2018 |
December 31, 2017 | ||||
Bank balances |
1,192 |
508 |
157,370 |
365,031 | |||
Short-term financial investments |
12,393 |
6,073 |
2,332,865 |
2,884,611 | |||
Overnight investment (a) |
12,365 |
42 |
15,374 |
178,444 | |||
Bank certificates of deposit (b) |
- |
- |
1,311,476 |
785,074 | |||
Repurchase agreements secured on debentures (b) |
- |
- |
70,735 |
3,268 | |||
Investment funds (c) |
28 |
6,032 |
935,280 |
1,917,825 | |||
Total |
13,585 |
6,581 |
2,490,235 |
3,249,642 |
a) Bank account balances, which earn daily interest by investment in repurchase agreements secured on Bank Certificate Deposit (CDB) and interest of 15% of the variation in the Interbank Certificate of Deposit (CDI).
b) Short-term investments in Bank Certificates of Deposit (CDB) and secured debentures with major financial institutions that operate in the Brazilian financial market, with daily liquidity, short term maturity, low credit risk and interest equivalent, on average, to 100,5% of the CDI.
c) Exclusive Fund investments, with daily liquidity and interest equivalent, on average, to 98% of the CDI, subject to floating rates tied to the CDI linked to federal government bonds, CDBs, financial bills and secured debentures of major financial institutions, with low credit risk and short term maturity.
44
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
( 6 ) CONSUMERS, CONCESSIONAIRES AND LICENSEES
The consolidated balance includes mainly activities from the supply of electric energy, broken down as follows at June 30, 2018 and December 31, 2017:
Consolidated | ||||||||||
Amounts |
Past due |
Total | ||||||||
coming due |
until 90 days |
> 90 days |
June 30, 2018 |
December 31, 2017 | ||||||
Current |
||||||||||
Consumer classes |
||||||||||
Residential |
727,501 |
525,699 |
65,012 |
1,318,212 |
1,113,604 | |||||
Industrial |
271,316 |
82,605 |
77,863 |
431,784 |
483,630 | |||||
Commercial |
265,909 |
88,422 |
40,229 |
394,560 |
382,470 | |||||
Rural |
79,963 |
25,350 |
9,190 |
114,503 |
98,663 | |||||
Public administration |
71,124 |
14,599 |
3,187 |
88,909 |
88,910 | |||||
Public lighting |
60,189 |
4,340 |
9,188 |
73,716 |
67,533 | |||||
Public utilities |
92,219 |
7,994 |
6,470 |
106,683 |
100,843 | |||||
Billed |
1,568,221 |
749,009 |
211,139 |
2,528,367 |
2,335,653 | |||||
Unbilled |
1,025,653 |
- |
- |
1,025,653 |
1,008,486 | |||||
Financing of consumers' debts |
152,048 |
24,489 |
37,918 |
214,454 |
206,937 | |||||
CCEE transactions |
624,992 |
14,866 |
1,037 |
640,895 |
413,067 | |||||
Concessionaires and licensees |
401,080 |
(46) |
8,289 |
409,323 |
539,322 | |||||
Others |
30,420 |
- |
- |
30,416 |
36,011 | |||||
3,802,414 |
788,318 |
258,383 |
4,849,108 |
4,539,476 | ||||||
Allowance for doubtful accounts |
(303,477) |
(238,193) | ||||||||
Total |
4,545,631 |
4,301,283 | ||||||||
Noncurrent |
||||||||||
Financing of consumers' debts |
208,154 |
- |
- |
208,154 |
217,944 | |||||
Free energy |
6,166 |
- |
- |
6,166 |
5,976 | |||||
CCEE transactions |
41,301 |
- |
- |
41,301 |
41,301 | |||||
255,621 |
- |
- |
255,621 |
265,221 | ||||||
Allowance for doubtful accounts |
(20,476) |
(28,683) | ||||||||
Total |
235,146 |
236,539 |
Allowance for doubtful accounts
The allowance for doubtful debts is set up based on the expected loss, based on the history and future probability of default.
Movements in the allowance for doubtful accounts are shown below:
Consumers, concessionaires and licensees |
Other |
Total | |||
As of December 31, 2017 |
(266,876) |
(29,379) |
(296,255) | ||
Allowance - reversal (recognition) |
(111,435) |
700 |
(110,735) | ||
Recovery of revenue |
42,493 |
- |
42,493 | ||
Effects of first adoption of IFRS 9 / CPC 48 |
(72,687) |
(738) |
(73,426) | ||
Write-off of accrued receivables |
84,552 |
(45) |
84,507 | ||
As of June 30, 2018 |
(323,953) |
(29,462) |
(353,415) | ||
Current |
(303,477) |
(29,462) |
(332,939) | ||
Noncurrent |
(20,476) |
- |
(20,476) |
45
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
( 7 ) TAXES RECOVERABLE
Parent company |
Consolidated | ||||||
June 30, 2018 |
December 31, 2017 |
June 30, 2018 |
December 31, 2017 | ||||
Current |
|||||||
Prepayments of social contribution - CSLL |
- |
227 |
10,226 |
7,257 | |||
Prepayments of income tax - IRPJ |
- |
1,725 |
28,561 |
21,887 | |||
Income tax and social contribution to be offset |
16,989 |
15,099 |
96,490 |
59,658 | |||
Income tax and social contribution to be offset |
16,989 |
17,051 |
135,278 |
88,802 | |||
Withholding income tax - IRRF on interest on capital |
43,467 |
43,467 |
43,468 |
43,841 | |||
Withholding income tax - IRRF |
3,168 |
2,893 |
114,857 |
103,277 | |||
State VAT - ICMS to be offset |
- |
- |
111,959 |
104,843 | |||
Social Integration Program - PIS |
63 |
56 |
11,728 |
8,447 | |||
Contribution for Social Security Funding - COFINS |
319 |
283 |
54,730 |
37,699 | |||
Others |
- |
- |
8,947 |
8,137 | |||
Others taxes to be offset |
47,017 |
46,699 |
345,689 |
306,244 | |||
|
|
|
| ||||
Total current |
64,006 |
63,751 |
480,967 |
395,045 | |||
Noncurrent |
|||||||
Social contribution to be offset - CSLL |
- |
- |
60,888 |
58,856 | |||
Income tax to be offset - IRPJ |
- |
- |
5,463 |
2,608 | |||
Income tax and social contribution to be offset |
- |
- |
66,352 |
61,464 | |||
State VAT - ICMS to be offset |
- |
- |
155,872 |
159,624 | |||
Social Integration Program - PIS |
- |
- |
1,047 |
1,024 | |||
Contribution for Social Security Funding - COFINS |
- |
- |
4,826 |
4,719 | |||
Others |
- |
- |
5,377 |
6,613 | |||
Others taxes to be offset |
- |
- |
167,122 |
171,980 | |||
Total noncurrent |
- |
- |
233,474 |
233,444 |
46
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
( 8 ) SECTOR FINANCIAL ASSET AND LIABILITY
The breakdown of the balances of sector financial asset and liability and the movement for the period are as follows:
As of December 31, 2017 |
Operating revenue |
Finance income or expense |
Receipt |
As of June 30, 2018 | |||||||||||||||
Deferred |
Approved |
Total |
Constitution |
Through billing |
Monetary adjustment |
Tariff flag |
Deferred |
Approved |
Total | ||||||||||
Parcel "A" |
924,943 |
(235,916) |
689,026 |
731,178 |
321,684 |
23,199 |
(297,340) |
1,021,108 |
446,639 |
1,467,748 | |||||||||
CVA (*) |
|||||||||||||||||||
CDE (**) |
(235,901) |
(263,520) |
(499,422) |
72,901 |
247,999 |
(9,306) |
- |
(37,052) |
(150,775) |
(187,827) | |||||||||
Electric energy cost |
1,625,759 |
(18,280) |
1,607,479 |
(45,774) |
(58,272) |
39,975 |
(297,340) |
362,539 |
883,528 |
1,246,068 | |||||||||
ESS and EER (***) |
(974,091) |
(167,048) |
(1,141,139) |
(217,663) |
385,742 |
(32,239) |
- |
(265,727) |
(739,572) |
(1,005,299) | |||||||||
Proinfa |
(610) |
(17,961) |
(18,572) |
7,505 |
12,579 |
(95) |
- |
1,776 |
(357) |
1,418 | |||||||||
Basic network charges |
(20,163) |
23,387 |
3,224 |
110,890 |
(12,485) |
606 |
- |
104,877 |
(2,642) |
102,235 | |||||||||
Pass-through from Itaipu |
959,518 |
125,860 |
1,085,378 |
512,640 |
(220,140) |
36,736 |
- |
645,325 |
769,289 |
1,414,614 | |||||||||
Transmission from Itaipu |
7,802 |
7,806 |
15,608 |
18,386 |
(5,872) |
594 |
- |
23,100 |
5,615 |
28,715 | |||||||||
Neutrality of sector charges |
32,566 |
112,084 |
144,651 |
(63,759) |
(75,608) |
(2,181) |
- |
(40,490) |
43,592 |
3,102 | |||||||||
Overcontracting |
(469,937) |
(38,244) |
(508,181) |
336,052 |
47,741 |
(10,891) |
- |
226,760 |
(362,039) |
(135,278) | |||||||||
Other financial components |
(193,496) |
21,812 |
(171,685) |
(223,039) |
24,423 |
(3,905) |
- |
(72,609) |
389,612 |
(374,207) | |||||||||
Total |
731,447 |
(214,104) |
517,341 |
508,139 |
346,107 |
19,294 |
(297,340) |
764,019 |
329,522 |
1,093,541 | |||||||||
Current assets |
210,834 |
679,406 | |||||||||||||||||
Noncurrent assets |
355,003 |
414,528 | |||||||||||||||||
Current liabilities |
(40,111) |
(394) | |||||||||||||||||
Noncurrent liabilities |
(8,385) |
- |
(*) Deferred tariff costs and gains variations from Parcel “A” items
(**) Energy Development Account – CDE
(***) System Service Charge (ESS) and Reserve Energy Charge (EER)
The details of the nature of each sector financial asset and liability are provided in Note 8 to the financial statements at December 31, 2017.
( 9 ) DEFERRED TAX ASSETS AND LIABILITIES
9.1 Breakdown of tax assets and liabilities
Parent company |
Consolidated | ||||||
June 30, 2018 |
December 31, 2017 |
June 30, 2018 |
December 31, 2017 | ||||
Social contribution credit/(debit) |
|||||||
Tax losses carryforwards |
39,812 |
38,216 |
99,567 |
103,903 | |||
Tax benefit of merged intangible |
- |
- |
101,177 |
105,065 | |||
Temporarily nondeductible/taxable differences |
(663) |
(408) |
(331,935) |
(305,677) | |||
Subtotal |
39,150 |
37,808 |
(131,191) |
(96,708) | |||
Income tax credit / (debit) |
|||||||
Tax losses carryforwards |
110,547 |
109,103 |
282,095 |
303,543 | |||
Tax benefit of merged intangible |
- |
- |
328,726 |
342,262 | |||
Temporarily nondeductible/taxable differences |
(1,841) |
(1,132) |
(920,240) |
(844,948) | |||
Subtotal |
108,706 |
107,971 |
(309,418) |
(199,141) | |||
PIS and COFINS credit/(debit) |
|||||||
Temporarily nondeductible/taxable differences |
- |
- |
(10,361) |
(10,543) | |||
Total |
147,855 |
145,779 |
(450,970) |
(306,392) | |||
Total tax credit |
147,855 |
145,779 |
825,862 |
943,199 | |||
Total tax debit |
- |
- |
(1,276,832) |
(1,249,591) |
The expected recovery of the deferred tax assets recorded in noncurrent assets, arising from nondeductible temporary differences, tax benefit of merged intangible and income tax and social contribution losses, the breakdown of which is described in the financial statements at December 31, 2017, is based on the projections of future profits, approved by the Board of Directors and reviewed by the Fiscal Council. To reflect adequately the effective rate of the taxes on profit, deferred tax assets are recognized monthly on any losses for companies that have positive projections, in accordance with such studies.
47
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
9.2 Tax benefit of merged intangible asset
Refers to the tax credit calculated on the intangible assets derived from the acquisition of subsidiaries, as shown in the following table, which were merged and are recognized in accordance with the concepts of CVM Instructions No. 319/1999 and No. 349/2001 and ICPC 09 (R2) - Individual Financial Statements, Separate Financial Statements, Consolidated Interim financial statements and Application of the Equity Method. The benefit is being realized in proportion to the tax amortization of the merged intangible assets that originated them as per CPC 27 and CPC 04 (R1) - Clarification of acceptable methods of depreciation and amortization, over the remaining concession period, as shown in note 14.
Consolidated | |||||||
June 30, 2018 |
December 31, 2017 | ||||||
Social contribution |
Income tax |
Social contribution |
Income tax | ||||
CPFL Paulista |
43,559 |
120,996 |
45,872 |
127,421 | |||
CPFL Piratininga |
10,698 |
36,714 |
11,215 |
38,491 | |||
RGE |
20,455 |
84,473 |
21,513 |
88,843 | |||
RGE Sul |
26,466 |
73,515 |
26,466 |
73,515 | |||
CPFL Geração |
- |
13,027 |
- |
13,992 | |||
Total |
101,177 |
328,726 |
105,065 |
342,262 |
9.3 Accumulated balances on nondeductible temporary / taxable differences
Consolidated | |||||||||||
June 30, 2018 |
December 31, 2017 | ||||||||||
Social contribution |
Income tax |
PIS/COFINS |
Social contribution |
Income tax |
PIS/COFINS | ||||||
Temporarily nondeductible/taxable differences |
|||||||||||
Provision for tax, civil and labor risks |
54,588 |
151,633 |
- |
53,687 |
149,130 |
- | |||||
Private pension fund |
2,614 |
7,261 |
- |
2,331 |
6,476 |
- | |||||
Allowance for doubtful accounts |
32,760 |
91,001 |
- |
27,354 |
75,985 |
- | |||||
Free energy supply |
8,929 |
24,803 |
- |
8,382 |
23,284 |
- | |||||
Research and development and energy efficiency programs |
25,301 |
70,279 |
- |
21,851 |
60,697 |
- | |||||
Personnel-related provisions |
3,929 |
10,913 |
- |
4,111 |
11,420 |
- | |||||
Depreciation rate difference |
(16,159) |
(44,884) |
- |
(13,970) |
(38,806) |
- | |||||
Derivatives |
(74,858) |
(207,938) |
- |
(48,848) |
(135,690) |
- | |||||
Recognition of concession - adjustment of intangible asset (IFRS/CPC) |
(6,847) |
(19,020) |
- |
(7,291) |
(20,253) |
- | |||||
Recognition of concession - adjustment of financial asset (IFRS/CPC) |
(135,810) |
(375,195) |
(7,801) |
(117,527) |
(324,387) |
(7,881) | |||||
Actuarial losses (IFRS/CPC) |
25,864 |
71,845 |
- |
25,716 |
71,432 |
- | |||||
Financial instruments (IFRS/CPC) |
(2,125) |
(5,900) |
- |
(5,291) |
(14,694) |
- | |||||
Accelerated depreciation |
(121) |
(336) |
- |
(104) |
(288) |
- | |||||
Others |
1,750 |
4,604 |
(2,560) |
2,956 |
10,292 |
(2,662) | |||||
Temporarily nondeductible differences - accumulated |
|||||||||||
Property, plant and equipment - adjustment of deemed cost (IFRS/CPC) |
(50,339) |
(139,831) |
- |
(51,961) |
(144,336) |
- | |||||
Actuarial losses (IFRS/CPC) |
36,607 |
101,687 |
- |
36,607 |
101,687 |
- | |||||
Temporarily nondeductible differences - business combination |
|||||||||||
Deferred taxes - asset: |
|||||||||||
Provision for tax, civil and labor risks |
12,876 |
35,767 |
13,188 |
36,635 |
- | ||||||
Fair value of property, plant and equipment (negative value added of assets) |
20,555 |
57,099 |
- |
21,294 |
59,150 |
- | |||||
Deferred taxes - liability: |
|||||||||||
Fair value of property, plant and equipment (value added of assets) |
(25,351) |
(70,420) |
(26,201) |
(72,779) |
- | ||||||
Intangible asset - exploration right/authorization in indirect |
(240,093) |
(666,925) |
- |
(246,669) |
(685,190) |
- | |||||
Other temporary differences |
(6,005) |
(16,683) |
- |
(5,292) |
(14,713) |
- | |||||
Total |
(331,935) |
(920,240) |
(10,361) |
(305,677) |
(844,948) |
(10,543) | |||||
48
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
9.4 Reconciliation of the income tax and social contribution amounts recognized in the statements of profit or loss for the quarters and semesters ended by June 30, 2018 and 2017:
Parent Company |
Consolidated | ||||||||||||||
Social Contribution |
Social Contribution | ||||||||||||||
2018 |
2017 |
2018 |
2017 | ||||||||||||
2nd quarter |
|
1st semester |
2nd quarter |
|
1st semester |
2nd quarter |
|
1st semester |
2nd quarter |
|
1st semester | ||||
Profit before taxes |
453,910 |
897,426 |
137,460 |
374,800 |
709,913 |
1,378,341 |
227,724 |
610,767 | |||||||
Reconciliation to reflect effective rate: |
|||||||||||||||
Equity in subsidiaries |
(462,042) |
(913,028) |
(160,193) |
(432,040) |
(68,746) |
(154,102) |
(82,968) |
(162,678) | |||||||
Amortization of intangible asset acquired |
(3,382) |
(6,764) |
(3,382) |
(6,764) |
12,162 |
24,324 |
12,162 |
24,324 | |||||||
Effect of presumed profit system |
- |
- |
- |
- |
(63,361) |
(105,986) |
(48,031) |
(96,751) | |||||||
Adjustment of revenue from excess demand and excess reactive power |
- |
- |
- |
- |
38,643 |
77,163 |
27,917 |
58,167 | |||||||
Other permanent additions (exclusions), net |
2,758 |
7,480 |
4,318 |
7,540 |
15,234 |
41,418 |
30,444 |
34,439 | |||||||
Tax base |
(8,756) |
(14,886) |
(21,797) |
(56,465) |
643,845 |
1,261,158 |
167,247 |
468,268 | |||||||
Statutory rate |
9% |
9% |
9% |
9% |
9% |
9% |
9% |
9% | |||||||
Tax credit/(debit) |
788 |
1,340 |
1,962 |
5,082 |
(57,946) |
(113,504) |
(15,052) |
(42,144) | |||||||
Tax credit recorded (not recorded), net |
- |
- |
- |
- |
(11,898) |
(23,209) |
(13,237) |
(26,718) | |||||||
Total |
788 |
1,340 |
1,962 |
5,082 |
(69,844) |
(136,712) |
(28,289) |
(68,863) | |||||||
Current |
- |
(1) |
- |
- |
(20,872) |
(93,963) |
(9,802) |
(65,299) | |||||||
Deferred |
788 |
1,341 |
1,962 |
5,082 |
(48,972) |
(42,750) |
(18,487) |
(3,565) | |||||||
Parent Company |
Consolidated | ||||||||||||||
Income Tax |
Income Tax | ||||||||||||||
2018 |
2017 |
2018 |
2017 | ||||||||||||
2nd quarter |
|
1st semester |
2nd quarter |
|
1st semester |
2nd quarter |
|
1st semester |
2nd quarter |
|
1st semester | ||||
Profit before taxes |
453,910 |
897,426 |
137,460 |
374,800 |
709,913 |
1,378,341 |
227,724 |
610,767 | |||||||
Reconciliation to reflect effective rate: |
|||||||||||||||
Equity in subsidiaries |
(462,042) |
(913,028) |
(160,193) |
(432,040) |
(68,746) |
(154,102) |
(82,968) |
(162,678) | |||||||
Amortization of intangible asset acquired |
- |
- |
- |
- |
15,689 |
31,378 |
15,689 |
31,378 | |||||||
Effect of presumed profit system |
- |
- |
- |
- |
(79,796) |
(137,435) |
(65,650) |
(129,273) | |||||||
Adjustment of revenue from excess demand and excess reactive power |
- |
- |
- |
- |
38,643 |
77,163 |
27,917 |
58,167 | |||||||
Tax incentive - operating profit |
- |
- |
- |
- |
(2,924) |
(2,924) |
(360) |
(6,861) | |||||||
Other permanent additions (exclusions), net |
4,070 |
12,679 |
6,523 |
19,325 |
14,640 |
39,766 |
35,640 |
49,034 | |||||||
Tax base |
(4,062) |
(2,923) |
(16,210) |
(37,915) |
627,419 |
1,232,187 |
157,991 |
450,534 | |||||||
Statutory rate |
25% |
25% |
25% |
25% |
25% |
25% |
25% |
25% | |||||||
Tax credit/(debit) |
1,015 |
731 |
4,052 |
9,479 |
(156,855) |
(308,047) |
(39,498) |
(112,634) | |||||||
Recorded (unrecognizad) Tax credit,net |
- |
- |
- |
- |
(33,038) |
(64,000) |
(36,765) |
(73,977) | |||||||
Total |
1,015 |
731 |
4,052 |
9,479 |
(189,892) |
(372,047) |
(76,263) |
(186,610) | |||||||
Current |
- |
(4) |
- |
- |
(48,502) |
(240,868) |
(23,265) |
(170,288) | |||||||
Deferred |
1,015 |
735 |
4,052 |
9,479 |
(141,391) |
(131,179) |
(52,998) |
(16,322) |
( 10 ) CONCESSION FINANCIAL ASSET
Distribution |
Transmission |
Consolidated | |||
As of December 31, 2017 |
6,330,681 |
238,723 |
6,569,404 | ||
Current |
- |
23,736 |
23,736 | ||
Noncurrent |
6,330,681 |
214,987 |
6,545,668 | ||
Additions |
313,559 |
428 |
313,986 | ||
Fair value adjustment |
206,875 |
- |
206,875 | ||
Adjustment - financial asset measured at amortized cost |
- |
15,260 |
15,260 | ||
Cash inputs - RAP |
- |
(11,700) |
(11,700) | ||
Disposals |
(17,557) |
- |
(17,557) | ||
As of June 30, 2018 |
6,833,557 |
242,711 |
7,076,268 | ||
Current |
- |
23,241 |
23,241 | ||
Noncurrent |
6,833,557 |
219,470 |
7,053,027 |
The balance refers to the financial asset corresponding to the right established in the concession agreements of the energy distribution and transmission measured at amortized cost companies to receive cash (i) through compensation at the time assets are handed over to the granting authority at the end of the concession, measured at fair value, and (ii) the transmission companies’ right to receive cash over the concession period through allowed annual revenue ("RAP"), measured at amortized cost.
49
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
For energy distribution companies, according to the current tariff model, the remuneration for this asset is recognized in profit or loss upon billing to consumers and the realization occurs upon receipt of the electric energy bills. Moreover, the difference to adjust the balance to the fair value (new replacement value - “VNR” - note 4) is recognized as a balancing item to the operating income account (note 25) in the statement of profit or loss for the period (R$206,875 at 1st semester of 2018 and R$ 84,057 at 1st semester of 2017).
For energy transmission companies, the remuneration for this asset is recognized according to the internal rate of return, which takes into account the investment made, the allowed annual revenue (“RAP”) to be received over the concession period, and the compensation to be received at the time assets are handed over to the granting authority. The adjustment of R$ 15,260 is recognized against other operating revenues and income (R$ 12,637 at 1st semester of 2017).
( 11 ) OTHER RECEIVABLES
Consolidated | |||||||
Current |
Noncurrent | ||||||
June 30, 2018 |
December 31, 2017 |
June 30, 2018 |
December 31, 2017 | ||||
Advances - Fundação CESP |
5,832 |
7,851 |
6,797 |
6,797 | |||
Advances to suppliers |
16,253 |
31,981 |
- |
- | |||
Pledges, funds and restricted deposits |
166,589 |
159,291 |
699,538 |
621,489 | |||
Orders in progress |
136,939 |
158,707 |
6,003 |
5,062 | |||
Services rendered to third parties |
12,826 |
8,530 |
- |
- | |||
Energy pre-purchase agreements |
- |
- |
27,735 |
26,260 | |||
Prepaid expenses |
79,568 |
80,600 |
20,490 |
20,043 | |||
GSF renegotiation |
12,230 |
19,629 |
11,571 |
17,359 | |||
Receivables - CDE |
195,581 |
242,906 |
- |
- | |||
Advances to employees |
38,171 |
19,658 |
- |
- | |||
Others |
215,223 |
200,724 |
129,186 |
143,183 | |||
(-) Allowance for doubtful debts (note 6) |
(29,462) |
(29,379) |
- |
- | |||
Total |
849,752 |
900,498 |
901,320 |
840,192 |
Orders in progress: encompass costs and revenues related to ongoing decommissioning or disposal of intangible assets and the service costs related to expenditure on projects in progress under the Energy Efficiency and Research and Development programs. Upon the closing of the respective projects, the balances are amortized against the respective liability recognized in Other Payables (note 22).
Receivables – CDE: refer to: (i) low-income subsidies amounting to R$ 12,709 (R$ 15,930 at December 31, 2017), (ii) other tariff discounts granted to consumers amounting to R$ 182,829 (R$ 224,936 at December 31, 2017), and (iii) tariff discounts – court injunctions amounting to R$ 43 (R$ 2,039 at December 31, 2017) – note 25.3.1
At the 1st semester of 2018, the subsidiaries offset the receivables relating to the CDE account with the payables relating to the Energy Development Account (CDE) (note 19) amounting to R$ 2,545 authorized by Order No. 1,576/2016.
50
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
( 12 ) INVESTMENTS
Parent company |
Consolidated | ||||||
June 30, 2018 |
December 31, 2017 |
June 30, 2018 |
December 31, 2017 | ||||
Permanent equity interests - equity method |
|||||||
By equity method of the subsidiary |
8,492,359 |
7,804,431 |
895,765 |
990,910 | |||
Fair value of assets, net |
680,795 |
713,848 |
10,350 |
10,640 | |||
Advances for future capital increases |
62,375 |
33,340 |
- |
- | |||
Goodwill |
6,054 |
6,054 |
- |
- | |||
Total |
9,241,583 |
8,557,673 |
906,115 |
1,001,550 |
12.1 Permanent equity interests – equity method
The main information on investments in direct permanent equity interests is as follows:
June 30, 2018 |
June 30, 2018 |
December 31, 2017 |
1st semester 2018 |
1st semester 2017 | ||||||||||||||
Investment |
Number of shares (thousand) |
Total assets |
Issued capital |
|
Equity |
Profit or loss for the year |
Share of equity of investees |
|
Share of profit (loss) of investees | |||||||||
CPFL Paulista |
880,653 |
9,081,065 |
1,273,423 |
1,880,128 |
303,142 |
1,880,128 |
1,370,403 |
303,142 |
75,593 | |||||||||
CPFL Piratininga |
53,096,770 |
3,630,549 |
240,144 |
522,872 |
104,288 |
522,872 |
461,059 |
104,288 |
61,855 | |||||||||
CPFL Santa Cruz |
- |
- |
- |
- |
- |
- |
- |
- |
15,062 | |||||||||
CPFL Leste Paulista |
- |
- |
- |
- |
- |
- |
- |
- |
4,639 | |||||||||
CPFL Sul Paulista |
- |
- |
- |
- |
- |
- |
- |
- |
4,940 | |||||||||
CPFL Jaguari de Energia (CPFL Santa Cruz) |
359,058 |
1,099,841 |
170,413 |
369,469 |
37,851 |
369,469 |
340,463 |
37,851 |
750 | |||||||||
CPFL Mococa |
- |
- |
- |
- |
- |
- |
- |
- |
3,824 | |||||||||
RGE |
1,019,790 |
4,390,393 |
1,223,350 |
1,789,575 |
122,936 |
1,789,575 |
1,680,334 |
122,936 |
65,701 | |||||||||
RGE Sul |
527,266 |
4,714,252 |
1,495,084 |
1,789,367 |
76,015 |
1,286,770 |
1,228,317 |
59,854 |
- | |||||||||
CPFL Geração |
205,492,020 |
5,961,341 |
1,043,922 |
2,302,844 |
251,805 |
2,302,844 |
2,354,115 |
251,805 |
183,688 | |||||||||
CPFL Jaguari Geração (*) |
40,108 |
53,940 |
40,108 |
53,814 |
5,352 |
53,814 |
50,970 |
5,352 |
4,404 | |||||||||
CPFL Brasil |
3,000 |
1,355,521 |
3,000 |
52,634 |
31,909 |
52,634 |
96,093 |
31,909 |
26,644 | |||||||||
CPFL Planalto (*) |
630 |
2,591 |
630 |
2,384 |
1,754 |
2,384 |
3,293 |
1,754 |
1,706 | |||||||||
CPFL Serviços |
1,564,844 |
223,872 |
105,105 |
136,362 |
(8,643) |
136,362 |
105,105 |
(8,643) |
(8,072) | |||||||||
CPFL Atende (*) |
13,991 |
24,235 |
13,991 |
17,673 |
3,681 |
17,673 |
19,338 |
3,681 |
3,499 | |||||||||
Nect (*) |
2,059 |
22,574 |
2,059 |
12,249 |
9,779 |
12,249 |
15,515 |
9,779 |
8,213 | |||||||||
CPFL Total (*) |
9,005 |
24,020 |
9,005 |
21,103 |
11,420 |
21,103 |
20,624 |
11,420 |
9,923 | |||||||||
CPFL Jaguariuna (*) |
- |
- |
- |
- |
- |
- |
- |
- |
3,526 | |||||||||
CPFL Telecom |
119,780 |
2,240 |
119,780 |
1,944 |
(169) |
1,944 |
2,018 |
(169) |
(14,710) | |||||||||
CPFL Centrais Geradoras (*) |
16,128 |
17,257 |
16,128 |
16,876 |
748 |
16,876 |
16,177 |
748 |
730 | |||||||||
CPFL Eficiência |
48,164 |
113,380 |
48,164 |
74,066 |
(3,586) |
74,066 |
55,252 |
(3,586) |
(449) | |||||||||
Authi (*) |
10 |
30,002 |
10 |
13,971 |
13,961 |
13,971 |
18,694 |
13,961 |
11,931 | |||||||||
Subtotal - by subsidiary's equity |
8,554,734 |
7,837,770 |
946,082 |
463,396 | ||||||||||||||
Amortization of fair value adjustment of assets |
- |
- |
(33,053) |
(31,356) | ||||||||||||||
Total |
8,554,734 |
7,837,770 |
913,028 |
432,040 | ||||||||||||||
Investment |
8,492,359 |
7,804,431 |
||||||||||||||||
Advances for future capital increases |
62,375 |
33,340 |
(*) number of quotas
Fair value adjustments (value added) of net assets acquired in business combinations are classified in the parent’s statement of profit or loss in the group of Investments. In the parent company’s statement of profit or loss, the amortization of the fair value adjustments (value added) of net assets of R$ 33,053 (R$ 31,356 in the 1st semester of 2017) is classified in line item “share of profit (loss) of investees”, in conformity with ICPC 09 (R2).
The movements, in the parent company, of the balances of investments in subsidiaries for the period are as follows:
51
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Investment |
As of December 31, 2017 |
Capital Increase |
Share of profit (loss) of investees |
Share of profit (loss) of investees (OCI) |
Effects of the first adoption of IFRS 9 / CPC 48 |
Dividens / Interest on Capital |
Advances for future capital increases / Others |
As of June 30, 2018 | ||||||||
CPFL Paulista |
1,370,403 |
350,000 |
303,142 |
(6,643) |
(18,453) |
(118,321) |
- |
1,880,128 | ||||||||
CPFL Piratininga |
461,059 |
- |
104,288 |
(2,034) |
(11,996) |
(28,445) |
- |
522,872 | ||||||||
Companhia Jaguari de Energia (CPFL Santa Cruz) |
340,463 |
- |
37,851 |
(396) |
(1,556) |
(6,892) |
- |
369,469 | ||||||||
RGE |
1,680,334 |
- |
122,936 |
(6,546) |
(7,148) |
- |
- |
1,789,575 | ||||||||
RGE Sul |
1,228,317 |
- |
59,854 |
5,720 |
(7,121) |
- |
- |
1,286,770 | ||||||||
CPFL Geração |
2,354,115 |
- |
251,805 |
(4,569) |
- |
(298,512) |
5 |
2,302,844 | ||||||||
CPFL Jaguari Geração |
50,970 |
- |
5,352 |
- |
- |
(2,508) |
- |
53,814 | ||||||||
CPFL Brasil |
96,093 |
- |
31,909 |
(2,341) |
(2,187) |
(70,841) |
- |
52,634 | ||||||||
CPFL Planalto |
3,293 |
- |
1,754 |
- |
- |
(2,663) |
- |
2,384 | ||||||||
CPFL Serviços |
105,105 |
- |
(8,643) |
- |
- |
- |
39,900 |
136,362 | ||||||||
CPFL Atende |
19,338 |
- |
3,681 |
- |
- |
(5,346) |
- |
17,673 | ||||||||
Nect |
15,515 |
- |
9,779 |
- |
- |
(13,044) |
- |
12,249 | ||||||||
CPFL Total |
20,624 |
- |
11,420 |
- |
- |
(10,941) |
- |
21,103 | ||||||||
CPFL Telecom |
2,018 |
33,360 |
(169) |
- |
- |
- |
(33,265) |
1,944 | ||||||||
CPFL Centrais Geradoras |
16,177 |
- |
748 |
- |
- |
(50) |
- |
16,876 | ||||||||
CPFL Eficiência |
55,252 |
- |
(3,586) |
- |
- |
- |
22,400 |
74,066 | ||||||||
Authi |
18,694 |
- |
13,961 |
- |
- |
(18,684) |
- |
13,971 | ||||||||
7,837,770 |
383,360 |
946,082 |
(16,809) |
(48,461) |
(576,247) |
29,040 |
8,554,734 |
In the consolidated, the investment balances refer to interests in joint ventures accounted for using the equity method:
Investments in joint ventures |
June 30, 2018 |
December 31, 2017 |
1st semester 2018 |
1st semester 2017 | ||||
Share of equity |
Share of profit (loss) | |||||||
Baesa |
190,379 |
187,654 |
2,725 |
3,637 | ||||
Enercan |
147,116 |
176,998 |
48,307 |
62,497 | ||||
Chapecoense |
344,695 |
385,870 |
59,654 |
59,996 | ||||
EPASA |
213,574 |
240,388 |
43,706 |
36,838 | ||||
Fair value adjustments of assets, net |
10,350 |
10,640 |
(290) |
(290) | ||||
906,115 |
1,001,550 |
154,102 |
162,678 |
12.2 Fair value adjustments and goodwill
Fair value adjustments (value added) refer basically to the right to the concession acquired through business combinations. The goodwill refers basically to acquisitions of investments and is based on projections of future profits.
In the consolidated interim financial statement, these amounts are classified as Intangible Assets (note 14).
12.3 Dividends and interest on capital receivable
At June 30, 2018 and December 31, 2017, the Company has the following amounts receivable from the subsidiaries below, relating to dividends and interest on capital:
Parent company | |||||||||||
Dividends |
Interest on capital |
Total | |||||||||
Subsidiary |
June 30, 2018 |
December 31, 2017 |
June 30, 2018 |
December 31, 2017 |
June 30, 2018 |
December 31, 2017 | |||||
CPFL Paulista |
68,000 |
49,798 |
95,120 |
- |
163,120 |
49,798 | |||||
CPFL Piratininga |
- |
- |
28,445 |
- |
28,445 |
- | |||||
CPFL Santa Cruz |
- |
24,918 |
6,893 |
13,960 |
6,893 |
38,878 | |||||
RGE |
26,795 |
50,319 |
- |
- |
26,795 |
50,319 | |||||
CPFL Centrais Geradoras |
66 |
17 |
- |
- |
66 |
17 | |||||
CPFL Brasil |
91,091 |
20,748 |
498 |
2,361 |
91,589 |
23,109 | |||||
CPFL Planalto |
- |
888 |
- |
- |
- |
888 | |||||
CPFL Atende |
- |
1,003 |
- |
620 |
- |
1,623 | |||||
Nect Serviços |
- |
4,348 |
- |
- |
- |
4,348 | |||||
CPFL Eficiência |
12,195 |
12,195 |
15,104 |
17,404 |
27,299 |
29,599 | |||||
AUTHI |
7,912 |
6,228 |
- |
- |
7,912 |
6,228 | |||||
206,059 |
170,461 |
146,060 |
34,344 |
352,118 |
204,807 |
The consolidated balance includes dividends and interest on capital receivable amounting to R$ 153,187 at June 30, 2018 and R$ 56,145 at December 31, 2017 related basically to joint ventures.
52
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
12.4 Noncontrolling interests and joint ventures
The disclosure of interests in subsidiaries, in accordance with IFRS 12 and CPC 45, is as follows:
12.4.1 Movements in noncontrolling interests
CERAN |
CPFL Renováveis |
Paulista Lajeado |
Total | |||||
As of December 31, 2017 |
86,031 |
2,058,079 |
80,707 |
2,224,816 | ||||
Equity Interests and voting capital |
35.00% |
48.40% |
40.07% |
|||||
Profit (loss) attributable to noncontrolling shareholders |
16,284 |
(50,408) |
4,209 |
(29,915) | ||||
Dividends |
(35,632) |
(6,011) |
(8,241) |
(49,884) | ||||
Other movements |
- |
(32) |
- |
(32) | ||||
As of June 30, 2018 |
66,683 |
2,001,628 |
76,675 |
2,144,986 | ||||
Equity Interests and voting capital |
35.00% |
48.39% |
40.07% |
12.4.2 Summarized financial information on subsidiaries that have noncontrolling interests
The summarized financial information on subsidiaries that have noncontrolling interests at June 30, 2018 and December 31, 2017 and semesters ended at June 30, 2018 and 2017, is as follows:
June 30, 2018 |
December 31, 2017 | |||||||||||
CERAN |
CPFL Renováveis |
Paulista Lajeado |
CERAN |
CPFL Renováveis |
Paulista Lajeado | |||||||
Current assets |
103,451 |
1,497,796 |
30,528 |
110,566 |
1,623,645 |
48,037 | ||||||
Cash and cash equivalents |
63,173 |
856,583 |
6,021 |
37,043 |
950,215 |
24,086 | ||||||
Noncurrent assets |
822,820 |
11,111,479 |
119,520 |
848,445 |
11,232,357 |
120,677 | ||||||
Current liabilities |
217,429 |
1,837,090 |
32,999 |
198,624 |
1,957,000 |
42,525 | ||||||
Borrowings and debentures |
106,947 |
1,027,584 |
- |
105,844 |
1,259,105 |
36,453 | ||||||
Other financial liabilities |
22,159 |
86,137 |
1,044 |
12,360 |
7,258 |
264 | ||||||
Noncurrent liabilities |
518,317 |
6,748,307 |
265 |
514,583 |
6,760,025 |
258 | ||||||
Borrowings and debentures |
422,347 |
4,962,887 |
- |
422,166 |
5,251,704 |
- | ||||||
Other financial liabilities |
86,561 |
- |
- |
83,766 |
- |
- | ||||||
Equity |
190,525 |
4,023,878 |
116,783 |
245,804 |
4,138,977 |
125,931 | ||||||
Equity attributable to owners of the Company |
190,525 |
3,918,787 |
116,783 |
245,804 |
4,032,448 |
125,931 | ||||||
Equity attributable to noncontrolling interests |
- |
105,091 |
- |
- |
106,529 |
- | ||||||
1st semester 2018 |
1st semester 2017 | |||||||||||
CERAN |
CPFL Renováveis |
Paulista Lajeado |
CERAN |
CPFL Renováveis |
Paulista Lajeado | |||||||
Net operating revenue |
158,770 |
798,584 |
25,702 |
155,257 |
783,006 |
21,981 | ||||||
Operational costs and expenses |
(41,329) |
(315,040) |
(14,162) |
(33,591) |
(323,538) |
(11,542) | ||||||
Depreciation and amortization |
(22,723) |
(312,173) |
(2) |
(22,451) |
(303,694) |
(2) | ||||||
Interest income |
2,906 |
46,855 |
395 |
16,811 |
67,057 |
1,289 | ||||||
Interest expense |
(18,121) |
(231,865) |
(348) |
(19,085) |
(293,456) |
(645) | ||||||
Income tax expense |
(23,951) |
(32,099) |
(1,165) |
(32,201) |
(26,033) |
(1,207) | ||||||
Profit (loss) for the period |
46,525 |
(109,061) |
10,504 |
62,543 |
(126,445) |
8,338 | ||||||
Attributable to owners of the Company |
46,525 |
(113,661) |
10,504 |
62,543 |
(130,120) |
8,338 | ||||||
Attributable to noncontrolling interests |
- |
4,600 |
- |
- |
3,675 |
- |
12.4.3 Joint ventures
The summarized financial information on joint ventures at June 30, 2018 and December 31, 2017 and semesters ended at June 30, 2018 and 2017, is as follows:
53
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
June 30, 2018 |
December 31, 2017 | |||||||||||||||
Enercan |
Baesa |
Chapecoense |
Epasa |
Enercan |
Baesa |
Chapecoense |
Epasa | |||||||||
Current assets |
184,615 |
118,918 |
552,106 |
231,624 |
182,843 |
124,361 |
329,721 |
319,222 | ||||||||
Cash and cash equivalents |
62,511 |
79,736 |
67,140 |
63,968 |
48,695 |
17,873 |
116,425 |
74,741 | ||||||||
Noncurrent assets |
1,071,042 |
1,000,016 |
2,675,106 |
520,468 |
1,101,291 |
1,030,904 |
2,745,989 |
531,527 | ||||||||
Current liabilities |
320,640 |
67,304 |
713,571 |
128,339 |
291,010 |
121,369 |
426,695 |
157,343 | ||||||||
Borrowings and debentures |
140,013 |
19,854 |
138,698 |
34,437 |
140,090 |
63,154 |
138,788 |
34,299 | ||||||||
Other financial liabilities |
25,322 |
41,786 |
80,974 |
39,738 |
4,085 |
17,113 |
67,897 |
993 | ||||||||
Noncurrent liabilities |
633,074 |
290,292 |
1,837,768 |
223,378 |
629,850 |
283,456 |
1,892,407 |
242,765 | ||||||||
Borrowings and debentures |
511,116 |
- |
1,108,755 |
169,176 |
510,874 |
- |
1,172,181 |
186,373 | ||||||||
Other financial liabilities |
25,584 |
270,951 |
725,938 |
7,768 |
25,115 |
265,250 |
716,986 |
- | ||||||||
Equity |
301,943 |
761,338 |
675,873 |
400,375 |
363,273 |
750,440 |
756,608 |
450,641 | ||||||||
1st semester 2018 |
1st semester 2017 | |||||||||||||||
Enercan |
Baesa |
Chapecoense |
Epasa |
Enercan |
Baesa |
Chapecoense |
Epasa | |||||||||
Net operating revenue |
274,645 |
122,121 |
420,699 |
274,596 |
289,599 |
118,719 |
406,442 |
286,848 | ||||||||
Operational costs and expenses |
(76,889) |
(58,445) |
(96,627) |
(155,139) |
(78,545) |
(56,876) |
(82,332) |
(176,561) | ||||||||
Depreciation and amortization |
(25,246) |
(25,358) |
(62,138) |
(17,520) |
(26,424) |
(25,358) |
(63,424) |
(16,296) | ||||||||
Interest income |
2,824 |
2,205 |
7,565 |
2,631 |
23,096 |
2,888 |
16,211 |
4,064 | ||||||||
Interest expense |
(23,834) |
(24,745) |
(94,442) |
(8,756) |
(13,449) |
(8,502) |
(58,385) |
(9,941) | ||||||||
Income tax and social contribution expenses |
(50,522) |
(5,546) |
(60,518) |
(13,822) |
(66,065) |
(7,612) |
(66,182) |
(14,919) | ||||||||
Profit (loss) for the year |
99,146 |
10,898 |
116,968 |
81,933 |
128,270 |
14,546 |
117,638 |
69,057 | ||||||||
Equity Interests and voting capital |
48.72% |
25.01% |
51.00% |
53.34% |
48.72% |
25.01% |
51.00% |
53.34% |
Even holding more than 50% of the equity interest in Epasa and Chapecoense, the subsidiary CPFL Geração controls these investments jointly with other shareholders. The analysis of the classification of the type of investment is based on the Shareholders' Agreement of each joint venture.
The borrowings from the BNDES obtained by the joint ventures ENERCAN, BAESA and Chapecoense establish restrictions on the payment of dividend to subsidiary CPFL Geração above the minimum mandatory dividend of 25% without the prior consent of the BNDES.
12.4.4 Joint operation
Through its wholly-owned subsidiary CPFL Geração, the Company holds part of the assets of the Serra da Mesa hydropower plant, located on the Tocantins River, in Goias State. The concession and the right to operate the hydropower plant are held by Furnas Centrais Elétricas S.A. In order to maintain these assets operating jointly with Furnas (jointly operation), CPFL Geração was assured 51.54% of the installed power of 1,275 MW (657 MW) and the assured energy of mean 671 MW (mean 345.4 MW) until 2028.
12.5 Corporate restructurings in 2017
12.5.1 Merger of CPFL Jaguariúna
At the EGM held on December 15, 2017, approval was given for the merger of CPFL Jaguariúna into RGE Sul. Accordingly, the merged company was wound up and RGE Sul became the successor to its assets, rights and obligations.
At the time of the merger, the concepts of CVM Instructions No. 319/99 and 349/01 were applied, which resulted in the recognition of a goodwill rectifying account, generating a tax credit of R$ 99,981 (note 9). To reassess its investments, the Company and CPFL Brasil recognized, proportionally to its investments in RGE Sul, (i) a reassessed concession intangible asset of R$ 148,487 and R$ 45,594 respectively, totaling R$ 194,081, corresponding to the fair value adjustment (value added) of the intangible assets relating to the distribution infrastructure and the right to operate the concession; and (ii) a net adjustment corresponding to the surplus value and decrease in value in the amounts of R$ 66,607 and R$ 20,452, respectively, corresponding to the fair value of the provision for tax, civil and labor risks, decrease in value of consumers, and surplus value of indemnification asset. Both amounts are non-deductible for tax purposes for the Company and for CPFL Brasil.
12.5.2 Grouping of subsidiaries Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia and Companhia Luz e Força de Mococa
On November 21, 2017, ANEEL through Resolution No. 6,723/2017 authorized the grouping of the power distribution companies Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia and Companhia Luz e Força de Mococa, pursuant to Normative Resolution No, 716/2016 of May 3, 2016. Effective as of January 1, 2018, the operations of these subsidiaries are controlled only by Companhia Jaguari de Energia, which adopted the trade name “CPFL Santa Cruz”. This operation was approved by the Extraordinary General Meetings (“EGM”) held on December 31, 2017 at the grouped companies.
54
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
( 13 ) PROPERTY, PLANT AND EQUIPMENT
Consolidated | |||||||||||||||
Land |
Reservoirs, dams and water mains |
Buildings, construction and improvements |
Machinery and equipment |
Vehicles |
Forniture and fittings |
In progress |
Total | ||||||||
As of December 31, 2017 |
168,494 |
1,319,257 |
1,094,777 |
6,870,389 |
75,771 |
7,245 |
251,192 |
9,787,125 | |||||||
Historical cost |
207,365 |
2,066,850 |
1,652,178 |
9,693,512 |
122,540 |
22,026 |
251,192 |
14,015,662 | |||||||
Accumulated depreciation |
(38,870) |
(747,593) |
(557,400) |
(2,823,123) |
(46,769) |
(14,782) |
- |
(4,228,537) | |||||||
Additions |
- |
- |
- |
- |
- |
- |
144,649 |
144,649 | |||||||
Disposals |
- |
- |
(7,600) |
(8,596) |
(1,604) |
- |
- |
(17,799) | |||||||
Transfers |
- |
3,535 |
13,224 |
15,716 |
8,868 |
623 |
(41,964) |
- | |||||||
Transfers from/to other assets - cost |
(2,755) |
- |
(39,029) |
41,223 |
- |
6 |
(4,725) |
(5,280) | |||||||
Depreciation |
(3,917) |
(39,647) |
(29,876) |
(218,563) |
(9,448) |
(448) |
- |
(301,897) | |||||||
Write-off of depreciation |
- |
- |
- |
3,836 |
802 |
- |
- |
4,638 | |||||||
Impairment reversal |
- |
- |
15 |
645 |
- |
- |
- |
660 | |||||||
As of June 30, 2018 |
161,822 |
1,283,145 |
1,031,510 |
6,704,652 |
74,390 |
7,426 |
349,151 |
9,612,096 | |||||||
Historical cost |
204,610 |
2,070,385 |
1,618,787 |
9,742,501 |
129,805 |
22,655 |
349,151 |
14,137,892 | |||||||
Accumulated depreciation |
(42,788) |
(787,240) |
(587,276) |
(3,037,850) |
(55,415) |
(15,229) |
- |
(4,525,797) | |||||||
Average depreciation rate |
3.86% |
3.92% |
3.77% |
4.57% |
13.40% |
6.47% |
The balance of construction in progress, in the consolidated balances, refers mainly to works in progress of operating and/or under development subsidiaries, especially for the projects of CPFL Renováveis, which has construction in progress of R$ 295,477 at June 30, 2018 (R$ 197,305 at December 31, 2017).
In conformity with CPC 20 (R1) and IAS 23, the interest on borrowings taken by subsidiaries to finance the works is capitalized during the construction phase. In the consolidated balances, in the 1st semester of 2018 R$ 5,082 were capitalized at the rate of 8.38% p.a. (R$ 25,098 , at the rate of 10.05% p.a., in the 1st semester of 2017) note 28.
In the consolidated balances, the depreciation amounts are recognized in the statement of profit or loss in line item “Depreciation and amortization” (note 27).
55
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
56
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
( 14 ) INTANGIBLE ASSETS
Consolidated | |||||||||||||
Goodwill |
Concession right |
Other intangible assets |
Total | ||||||||||
Acquired in business combinations |
Distribution infrastructure - operational |
Distribution infrastructure - in progress |
Public utilities |
||||||||||
As of December 31, 2017 |
6,115 |
4,117,105 |
5,554,447 |
825,476 |
25,904 |
60,777 |
10,589,824 | ||||||
Historical cost |
6,152 |
7,558,645 |
11,442,528 |
825,476 |
35,840 |
174,407 |
20,043,048 | ||||||
Accumulated amortization |
(37) |
(3,441,540) |
(5,888,080) |
- |
(9,936) |
(113,630) |
(9,453,223) | ||||||
Additions |
- |
- |
- |
720,979 |
- |
5,589 |
726,568 | ||||||
Amortization |
- |
(142,795) |
(355,954) |
- |
(710) |
(4,400) |
(503,859) | ||||||
Transfer - intangible assets |
- |
- |
318,064 |
(318,064) |
- |
- |
- | ||||||
Transfer - financial asset |
- |
- |
28,064 |
(341,623) |
- |
- |
(313,559) | ||||||
Disposal and transfer - other assets |
- |
- |
(1,597) |
(6,303) |
- |
5,243 |
(2,657) | ||||||
Impairment reversal |
- |
5,130 |
- |
- |
- |
47 |
5,177 | ||||||
As of June 30, 2018 |
6,115 |
3,979,438 |
5,543,025 |
880,466 |
25,195 |
67,254 |
10,501,494 | ||||||
Historical cost |
6,152 |
7,558,645 |
11,678,069 |
880,466 |
35,840 |
185,409 |
20,344,581 | ||||||
Accumulated amortization |
(37) |
(3,579,207) |
(6,135,044) |
- |
(10,646) |
(118,155) |
(9,843,089) |
In conformity with CPC 20 (R1) and IAS 23, the interest on borrowings taken by subsidiaries is capitalized for qualifying intangible assets. In the consolidated, for the 1st semester of 2018, R$ 7,726 were capitalized at a rate of 7.84% p.a. (R$ 9,061 at a rate of 8.48% p.a. in the 1st semester of 2017).
In the consolidated interim financial statements the amortization of intangible assets is recognized in the statement of profit or loss in the following line items: (i) “depreciation and amortization” for amortization of distribution infrastructure intangible assets, use of public asset and other intangible assets; and (ii) “amortization of concession intangible asset” for amortization of the intangible asset acquired in business combination (note 27).
14.1 Intangible asset acquired in business combinations
The breakdown of the intangible asset related to the right to operate the concessions acquired in business combinations is as follows:
|
June 30, 2018 |
|
December 31, 2017 |
Annual amortization rate | |||||||
|
Historic cost |
|
Accumulated amortization |
Net value |
|
Net value |
|
2018 |
|
2017 | |
Intangible asset - acquired in business combinations |
|
|
|
|
|
|
|
|
|
|
|
Intangible asset acquired, not merged |
|
|
|
|
|
|
|
|
|
|
|
CPFL Paulista |
304,861 |
|
(211,996) |
|
92,866 |
|
97,858 |
|
3.28% |
|
3.28% |
CPFL Piratininga |
39,065 |
|
(25,687) |
|
13,377 |
|
14,025 |
|
3.32% |
|
3.31% |
RGE |
3,768 |
|
(2,104) |
|
1,664 |
|
1,752 |
|
4.70% |
|
4.70% |
CPFL Geração |
54,555 |
|
(36,411) |
|
18,144 |
|
19,067 |
|
3.39% |
|
3.38% |
CPFL Jaguari Geração |
7,896 |
|
(3,986) |
|
3,910 |
|
4,044 |
|
3.41% |
|
3.41% |
CPFL Renováveis |
3,717,093 |
|
(971,826) |
|
2,745,268 |
|
2,818,331 |
|
3.93% |
|
4.16% |
Subtotal |
4,127,239 |
|
(1,252,010) |
|
2,875,228 |
|
2,955,077 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset acquired and merged - Deductible |
|
|
|
|
|
|
|
|
|
|
|
RGE |
1,120,266 |
|
(897,782) |
|
222,484 |
|
234,297 |
|
2.11% |
|
2.11% |
RGE Sul |
312,741 |
|
(47,402) |
|
265,339 |
|
279,553 |
|
9.09% |
|
9.09% |
CPFL Geração |
426,450 |
|
(328,447) |
|
98,003 |
|
102,987 |
|
2.34% |
|
2.34% |
Subtotal |
1,859,457 |
|
(1,273,631) |
|
585,826 |
|
616,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset acquired and merged – Reassessed |
|
|
|
|
|
|
|
|
|
|
|
CPFL Paulista |
1,074,026 |
|
(770,768) |
|
303,259 |
|
319,360 |
|
3.00% |
|
3.00% |
CPFL Piratininga |
115,762 |
|
(76,121) |
|
39,641 |
|
41,560 |
|
3.32% |
|
3.31% |
RGE |
310,128 |
|
(190,685) |
|
119,442 |
|
125,785 |
|
4.09% |
|
4.09% |
CPFL Jaguari Geração |
15,275 |
|
(8,607) |
|
6,668 |
|
6,898 |
|
3.01% |
|
3.01% |
RGE Sul |
56,759 |
|
(7,387) |
|
49,372 |
|
51,588 |
|
7.81% |
|
9.09% |
Subtotal |
1,571,949 |
|
(1,053,567) |
|
518,382 |
|
545,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
7,558,645 |
|
(3,579,207) |
|
3,979,438 |
|
4,117,105 |
|
|
|
|
57
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
( 15 ) TRADE PAYABLES
|
Consolidated | |||
June 30, 2018 |
December 31, 2017 | |||
Current |
||||
System service charges |
2,978 |
413 | ||
Energy purchased |
2,411,899 |
2,248,748 | ||
Electricity network usage charges |
246,254 |
252,170 | ||
Materials and services |
419,175 |
650,538 | ||
Free energy |
149,610 |
145,002 | ||
Total |
3,229,917 |
3,296,870 | ||
Noncurrent |
||||
Energy purchased |
135,370 |
128,438 |
( 16 ) BORROWINGS
The movements in borrowings are as follows:
Consolidated | ||||||||||||||
Raised |
Repayment |
Interest, inflation adjustment and MTM |
Exchange rates |
Interest paid |
||||||||||
December 31, 2017 |
June 30, 2018 | |||||||||||||
Measured at cost |
||||||||||||||
Local currency |
||||||||||||||
Fixed Rate |
900,257 |
160,932 |
(86,229) |
18,938 |
- |
(17,130) |
976,767 | |||||||
Post Fixed Rate |
||||||||||||||
TJLP |
3,449,468 |
90,384 |
(219,774) |
144,895 |
- |
(134,443) |
3,330,533 | |||||||
Selic |
140,099 |
- |
(16,658) |
5,930 |
- |
(1,733) |
127,638 | |||||||
CDI |
1,541,278 |
23,360 |
(786,626) |
53,495 |
- |
(58,452) |
773,054 | |||||||
IGP-M |
57,291 |
- |
(5,117) |
4,788 |
- |
(2,348) |
54,614 | |||||||
UNBNDES |
2,293 |
- |
(233) |
432 |
- |
- |
2,491 | |||||||
Others |
74,741 |
- |
(35,481) |
9,638 |
- |
(9,006) |
39,894 | |||||||
Total at cost |
6,165,427 |
274,676 |
(1,150,118) |
238,116 |
- |
(223,111) |
5,304,991 | |||||||
Borrowing costs * |
(31,816) |
(5,048) |
- |
10,246 |
- |
- |
(26,618) | |||||||
Measured at fair value |
||||||||||||||
Foreign currency |
||||||||||||||
Dollar |
4,698,183 |
1,655,514 |
(2,064,066) |
75,426 |
691,313 |
(71,305) |
4,985,065 | |||||||
Euro |
218,814 |
456,000 |
(215,824) |
424 |
12,155 |
(1,834) |
469,735 | |||||||
Mark to market |
(58,552) |
- |
- |
(5,808) |
- |
- |
(64,360) | |||||||
Total at fair value |
4,858,445 |
2,111,514 |
(2,279,890) |
70,042 |
703,468 |
(73,139) |
5,390,440 | |||||||
Total |
10,992,057 |
2,381,142 |
(3,430,008) |
318,404 |
703,468 |
(296,250) |
10,668,811 | |||||||
Current |
3,589,607 |
3,011,598 | ||||||||||||
Non Current |
7,402,450 |
7,657,213 |
(*) In accordance with CPC 48/IFRS 9, this refers to borrowing costs directly attributable to the issuance of the respective debts.
The detail on borrowings are as follows:
58
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Consolidated |
||||||||||
Category |
Annual interest |
June 30, 2018 |
December 31, 2017 |
Maturity range |
Collateral | |||||
Measured at cost - Local Currency |
||||||||||
Prefixed |
||||||||||
FINEM |
Fixed rate de 2,5% to 8% |
(a) |
482,413 |
546,504 |
2011 to 2024 |
(i) CPFL Energia guarantee (ii) Liens on equipment and receivables (iii) Pledge of shares of SPE, authorized by ANEEL and receivables of operation contracts (iv) guarantee of Bioenergia S.A., CPFL Renováveis, CPFL Energia and State Grid. | ||||
FINAME |
Fixed rate de 2,5% to 10% |
(a) |
60,224 |
71,780 |
2012 to 2025 |
(i) Liens on equipment (ii) Guarantee of CPFL Renováveis(iii) CPFL Energia guarantee (iv) Liens on assets | ||||
FINEP |
Fixed rate de 3,5% to 8% |
8,527 |
10,482 |
2013 to 2021 |
Bank guarantee | |||||
Bank loans |
Fixed rate of 9,5% to 10,14% and discount for timely payment of 15% and 25% |
425,602 |
271,492 |
2009 to 2029 |
(i) Liens on equipment and receivables (ii) Pledge of shares of SPE, authorized by ANEEL and receivables of operation contracts (iii) SIIF Énergies do Brasil and BVP S.A guarantee | |||||
976,767 |
900,257 |
|||||||||
Post-Fixed |
||||||||||
TJLP |
||||||||||
FINEM |
TJLP and TJLP + of 1,72% to 3,4% |
(b) |
3,289,296 |
3,406,017 |
2009 to 2033 |
(i) Bank guarantee (ii) CPFL Energia guarantee (iii) Pledge of receivables, equipment and and assignment of credit and concession rights authorized by ANEEL and shares os SPE (iv) Liens on equipment and receivables (v) guarantee of Bioenergia S.A., CPFL Renováveis, CPFL Energia and State Grid (vi) real estate mortgage | ||||
FINAME |
TJLP + 2,2% to 4,2% |
(b) |
22,283 |
23,181 |
2017 to 2027 |
(i) CPFL Energia guarantee (ii) Liens on equipment and receivables | ||||
FINEP |
TJLP to TJLP -1% |
13,053 |
13,997 |
2016 to 2024 |
Bank guarantee | |||||
Bank loans |
TJLP + 2,99% to 3,1% (1) |
5,902 |
6,273 |
2005 to 2023 |
(i) Pledge of receivables, equipment and and assignment of credit and concession rights (ii) CPFL Energia guarantee | |||||
3,330,533 |
3,449,468 |
|||||||||
SELIC |
||||||||||
FINEM |
SELIC + 2,19% to 2,66% |
(c) |
122,007 |
134,260 |
2015 to 2022 |
(i)SGBP and CPFL Energia guarantee and receivables (ii) CPFL Energia guarantee | ||||
FINAME |
SELIC + 2,70% to 3,90% |
5,631 |
5,840 |
2016 to 2022 |
CPFL Energia guarantee and liens on equipment and receivables | |||||
127,638 |
140,099 |
|||||||||
CDI |
||||||||||
Bank loans |
(i) From 100,00% to 109,50% to CDI |
(c) |
347,447 |
885,715 |
2012 to 2021 |
(i) CPFL Energia and CPFL Renováveis guarantee (ii) CPFL Renováveis promissory note (iii) CPFL Energia guarantee | ||||
Promissory note |
(i) 104% of CDI |
- |
110,523 |
2018 |
CPFL Energia and CPFL Renováveis guarantee | |||||
Bank loans |
(i) 105% do CDI |
326,659 |
443,035 |
2013 to 2024 |
No guarantee | |||||
Promissory note |
CDI + 3,80% |
98,948 |
102,006 |
2017 to 2019 |
No guarantee | |||||
773,054 |
1,541,278 |
|||||||||
IGPM |
||||||||||
Bank loans |
IGPM + 8,63% |
54,614 |
57,291 |
2011 to 2024 |
(i) Liens on equipment and receivables (ii) Pledge of shares of SPE and rights authorized by ANEEL and receivables of operation contracts | |||||
UNBNDES |
||||||||||
Bank loans |
UNBNDES + from 1,99% to 5% |
2,491 |
2,293 |
2006 to 2023 |
CPFL Energia guarantee | |||||
Other |
||||||||||
Other |
39,894 |
74,740 |
2007 to 2023 |
Bank guarantee; assignment of credit rights and promissory notes | ||||||
Total - Local currency |
5,304,991 |
6,165,427 |
||||||||
Borrowing costs (*) |
(26,618) |
(31,816) |
||||||||
Measured at fair value - Foreing Currency |
||||||||||
Dollar |
||||||||||
Bank Loans (Law 4.131) |
US$ + Libor 3 months + from 0,95% to 3% |
2,213,891 |
2,879,241 |
2017 to 2022 |
CPFL Energia guarantee and promissory notes | |||||
Bank Loans (Law 4.131) |
US$ + Libor 3 months + de 0,8% to 2,7% |
(c) |
482,421 |
704,572 |
2017 to 2020 |
CPFL Energia guarantee and promissory notes | ||||
Bank Loans (Law 4.131) |
US$ + de 1,93% to 3,59% |
2,288,754 |
1,114,370 |
2017 to 2021 |
CPFL Energia guarantee and promissory notes | |||||
4,985,065 |
4,698,183 |
|||||||||
Euro |
||||||||||
Bank Loans (Law 4.131) |
Euro + de 0,42% to 0,85% |
469,735 |
218,814 |
2019 to 2021 |
CPFL Energia guarantee and promissory notes | |||||
Mark to market |
(64,360) |
(58,552) |
||||||||
Total in foreign currency |
5,390,440 |
4,858,445 |
||||||||
Total |
10,668,811 |
10,992,057 |
||||||||
(*) In accordance with CPC 48/IFRS 9, this refers to borrowing costs directly attributable to the issuance of the respective debts. |
||||||||||
The subsidiaries hold swaps converting the operating cost of currency variation to interest tax variation in reais. For further information about the considered rates, see note 32. | ||||||||||
Effective rate: |
||||||||||
(a) 30% to 70% of CDI |
(b) 60% to 110% of CDI |
(c) 100% to 130% of CDI |
59
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
As segregated in the tables above, in conformity with CPC 48 and IFRS 9, the Group classified their debts as (i) other financial liabilities (or measured at amortized cost), and (ii) financial liabilities measured at fair value through profit or loss.
The objective of the classification as financial liabilities of borrowings measured at fair value is to compare the effects of the recognition of income and expenses derived from marking to market of derivatives, debt-related derivatives, in order to obtain more relevant and consistent accounting information. At June 30, 2018, the balance of the borrowings measured at fair value was R$ 5,390,440 (R$ 4,858,446 at December 31, 2017).
Changes in the fair values of these borrowings are recognized in the finance income/cost of the Group, except for the component of credit risk calculation, which is recorded in other comprehensive income. At June 30, 2018, the accumulated gains of R$ 64,360 (accumulated gains of R$ 58,552 at December 31, 2017) on marking the borrowings to market, offset by the losses of R$ 48,714 (losses of R$ 51,145 at December 31, 2017) of marking to market the derivative financial instruments contracted as a hedge against foreign exchange variations (note 32), resulted in a total net gain of R$ 15,646 (R$ 7,407 at December 31, 2017).
The maturities of the principal of borrowings recorded in noncurrent liabilities are scheduled as follows:
Maturity |
Consolidated | |
From July 1, 2019 |
1,108,894 | |
2020 |
1,443,125 | |
2021 |
2,528,326 | |
2022 |
553,242 | |
2023 |
377,892 | |
2024 to 2028 |
1,209,354 | |
2029 to 2033 |
414,413 | |
2034 to 2038 |
87,524 | |
2039 to 2043 |
4,071 | |
Subtotal |
7,726,841 | |
Mark to market |
(69,629) | |
Total |
7,657,213 |
Main additions in the period:
R$ thousand |
|
|||||||||
Total approved |
Released in 2018 |
Released net of fundraising costs |
Interest |
Utilization | ||||||
Local Currency |
||||||||||
Prefixed |
||||||||||
Bank Loan |
170,152 |
160,932 |
158,719 |
Montlhy |
Subsidiary's investment plan | |||||
Post Fixed |
||||||||||
CDI |
||||||||||
Bank Loan (a) |
16,000 |
16,000 |
16,000 |
Bullet |
Working Capital | |||||
Bank Loan (a) |
7,360 |
7,360 |
7,360 |
Semiannually |
Working Capital | |||||
TJLP |
||||||||||
FINEM |
144,500 |
90,000 |
88,670 |
Montlhy |
Subsidiary's investment plan | |||||
FINAME (a) |
384 |
384 |
384 |
Quarterly |
Acquisition of machinery and equipment | |||||
Foreing Currency |
||||||||||
Dollar |
||||||||||
Bank Loan (Law 4.131) |
1,655,514 |
1,655,514 |
1,655,514 |
Quarterly |
Working Capital | |||||
Euro |
||||||||||
Bank Loan (Law 4.131) |
456,000 |
456,000 |
456,000 |
Quarterly |
Working Capital | |||||
2,449,909 |
|
2,386,190 |
|
2,382,646 |
||||||
(a) There is no restrictive financial covenant.
60
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Prepayment:
In the first semester of 2018, R$ 1,484,832 were settled in advance relating to borrowings with original maturities from May 2018 to May 2021.
Covenants
Borrowings raised by Group companies require the compliance with certain restrictive financial clauses, under penalty of restriction in the distribution of dividends and/or advance maturity of the related debts. Furthermore, failure to comply with the obligations or restrictions mentioned may result in default in relation to other contractual obligations (cross default), depending on each borrowing agreement. Additionally, borrowings contain non-financial covenants, which are met as per the last calculation period.
For borrowings raised or with funds released in 2018, certain have restrictive clauses related to financial ratios, as follows:
Ratios required for the individual or consolidated financial statements of CPFL Renováveis or its subsidiaries
· Debt Service Coverage Ratio (ICSD) minimum of 1.3.
· Company capitalization ratio minimum of 30%.
Ratios required for the individual or consolidated financial statements of CPFL Energia
· Debt indebtedness divided by EBITDA maximum of 3.75 and
· EBITDA divided by the financial result minimum of 2.25.
For other borrowings, the details of the covenants are presented in the financial statements as of December 31, 2017.
The Group’s management monitors these ratios on a systematic and constant basis, so that all conditions are met. The Group’s management believes that all covenants and financial and non-financial clauses whose indicators are measured semiannually and annually are properly complied with, according to the last calculation period, in other words, June 30, 2018 and December 31, 2017, respectively.
( 17 ) DEBENTURES
The movements in debentures are as follows:
Consolidated | ||||||||||||
As of December 31, 2017 |
Raised |
Repayment |
Interest, inflation adjustment |
Exchange rates |
As of June 30, 2018 | |||||||
Debentures |
9,253,396 |
4,010,000 |
(3,223,452) |
390,800 |
(385,004) |
10,045,741 | ||||||
Borrowings costs |
(76,870) |
(4,457) |
- |
12,712 |
- |
(68,615) | ||||||
Total |
9,176,526 |
4,005,543 |
(3,223,452) |
403,512 |
(385,004) |
9,977,126 | ||||||
Current |
1,703,073 |
1,385,146 | ||||||||||
Non Current |
7,473,454 |
8,591,981 |
The detail on debentures are as follows :
61
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Consolidated | ||||||||||||||||
June 30, 2018 |
December 31, 2017 | |||||||||||||||
Current interest |
Current |
Noncurrent |
Total |
Current interest |
Current |
Noncurrent |
Total | |||||||||
CPFL Paulista |
||||||||||||||||
7th Issue |
Single series |
10,715 |
126,250 |
252,500 |
389,465 |
17,134 |
126,250 |
378,750 |
522,134 | |||||||
8th Issue |
1st series |
2,776 |
- |
220,145 |
222,921 |
1,669 |
- |
215,310 |
216,980 | |||||||
8th Issue |
2nd series |
4,865 |
- |
366,269 |
371,133 |
2,925 |
- |
358,224 |
361,149 | |||||||
8th Issue |
3rd series |
1,931 |
- |
134,348 |
136,279 |
1,161 |
- |
131,397 |
132,558 | |||||||
9th Issue |
Single series |
44,755 |
- |
1,380,000 |
1,424,755 |
- |
- |
- |
- | |||||||
65,042 |
|
126,250 |
2,353,262 |
2,544,554 |
22,890 |
126,250 |
1,083,681 |
1,232,821 | ||||||||
CPFL Piratininga |
||||||||||||||||
6th Issue |
Single series |
1,549 |
- |
44,000 |
45,549 |
1,950 |
- |
44,000 |
45,950 | |||||||
7th Issue |
Single series |
4,986 |
58,750 |
117,500 |
181,236 |
7,973 |
58,750 |
176,250 |
242,973 | |||||||
8th issue |
2nd series |
6,300 |
- |
246,000 |
252,300 |
7,669 |
- |
246,000 |
253,669 | |||||||
8th issue |
1st series |
1,200 |
- |
62,488 |
63,688 |
1,174 |
- |
61,125 |
62,299 | |||||||
9th Issue |
Single series |
6,721 |
- |
215,000 |
221,721 |
- |
- |
- |
- | |||||||
20,756 |
58,750 |
684,988 |
764,494 |
18,766 |
58,750 |
527,375 |
604,891 | |||||||||
RGE |
||||||||||||||||
6th Issue |
Single series |
7,039 |
- |
200,000 |
207,039 |
8,864 |
- |
200,000 |
208,864 | |||||||
7th Issue |
Single series |
3,607 |
42,500 |
85,000 |
131,107 |
5,768 |
42,500 |
127,500 |
175,768 | |||||||
8th issue |
2nd series |
6,417 |
- |
250,000 |
256,417 |
7,812 |
- |
250,000 |
257,812 | |||||||
8th issue |
1st series |
2,631 |
- |
135,530 |
138,160 |
2,573 |
- |
132,573 |
135,146 | |||||||
9th Issue |
Single series |
7,071 |
- |
220,000 |
227,071 |
- |
- |
- |
- | |||||||
26,764 |
42,500 |
890,530 |
959,794 |
25,017 |
42,500 |
710,073 |
777,590 | |||||||||
CPFL Santa Cruz |
||||||||||||||||
1st Issue |
Single series |
- |
- |
- |
- |
135 |
32,500 |
- |
32,635 | |||||||
2nd Issue |
Single series |
5,829 |
- |
190,000 |
195,829 |
- |
- |
- |
- | |||||||
|
|
5,829 |
- |
190,000 |
195,829 |
135 |
32,500 |
- |
32,635 | |||||||
RGE SUL |
||||||||||||||||
4th Issue |
Single series |
321 |
- |
189,730 |
190,051 |
16,662 |
- |
1,100,000 |
1,116,662 | |||||||
6th Issue |
Single series |
827 |
- |
520,000 |
520,827 |
312 |
- |
220,000 |
220,312 | |||||||
1,147 |
- |
709,730 |
710,877 |
16,974 |
- |
1,320,000 |
1,336,974 | |||||||||
CPFL Brasil |
||||||||||||||||
3rd Issue |
Single series |
1,082 |
- |
116,000 |
117,082 |
6,059 |
- |
400,000 |
406,059 | |||||||
4th issue |
Single series |
3,646 |
115,000 |
- |
118,646 |
- |
- |
- |
- | |||||||
|
|
4,728 |
115,000 |
116,000 |
235,728 |
6,059 |
- |
400,000 |
406,059 | |||||||
CPFL Geração |
||||||||||||||||
5th Issue |
Single series |
- |
- |
- |
- |
3,366 |
546,000 |
- |
549,366 | |||||||
6th Issue |
Single series |
11,509 |
153,318 |
306,682 |
471,509 |
13,671 |
153,318 |
306,682 |
473,671 | |||||||
7th Issue |
Single series |
- |
- |
- |
- |
8,978 |
- |
635,000 |
643,978 | |||||||
8th Issue |
Single series |
854 |
89,502 |
- |
90,356 |
3,401 |
- |
87,905 |
91,306 | |||||||
9th Issue |
Single series |
1,981 |
- |
52,832 |
54,813 |
550 |
- |
51,672 |
52,221 | |||||||
10th issue |
Single series |
97 |
190,000 |
- |
190,097 |
- |
- |
- |
- | |||||||
11th issue |
1st series |
1,457 |
- |
700,000 |
701,457 |
- |
- |
- |
- | |||||||
11th issue |
2nd series |
1,481 |
- |
700,000 |
701,481 |
- |
- |
- |
- | |||||||
17,379 |
432,820 |
1,759,514 |
2,209,713 |
29,966 |
699,318 |
1,081,259 |
1,810,543 | |||||||||
Parent company |
||||||||||||||||
5th Issue |
Single series |
- |
- |
- |
- |
2,817 |
- |
186,000 |
188,817 | |||||||
CPFL Renováveis |
||||||||||||||||
1st Issue - SIIF (*) |
1st to 12th series |
749 |
46,453 |
441,300 |
488,502 |
762 |
44,968 |
449,678 |
495,408 | |||||||
1st Issue - PCH Holding 2 |
Single series |
267 |
24,678 |
98,712 |
123,657 |
260 |
8,701 |
123,391 |
132,352 | |||||||
2nd Issue - DESA |
Single series |
810 |
43,336 |
- |
44,146 |
39,857 |
43,329 |
21,671 |
104,857 | |||||||
1st Issue - Pedra Cheirosa I |
Single series |
- |
- |
- |
- |
1,617 |
64,653 |
- |
66,270 | |||||||
1st Issue - Pedra Cheirosa II |
Single series |
- |
- |
- |
- |
1,481 |
59,203 |
- |
60,684 | |||||||
1st Issue - Renováveis |
Single series |
2,269 |
64,500 |
193,500 |
260,269 |
2,970 |
64,500 |
258,000 |
325,470 | |||||||
2nd Issue - Renováveis |
Single series |
3,800 |
60,000 |
150,000 |
213,800 |
5,531 |
60,000 |
210,000 |
275,531 | |||||||
3rd Issue - Renováveis |
Single series |
1,370 |
98,657 |
98,686 |
198,713 |
2,169 |
98,657 |
197,343 |
298,169 | |||||||
4th Issue - Renováveis |
1st series |
4,004 |
- |
200,000 |
204,004 |
4,534 |
- |
200,000 |
204,534 | |||||||
5th Issue - Renováveis |
Single series |
300 |
13,000 |
81,000 |
94,300 |
9,716 |
12,000 |
88,000 |
109,716 | |||||||
7th Issue - Renováveis |
Single series |
6,556 |
- |
259,400 |
265,956 |
6,244 |
- |
253,529 |
259,773 | |||||||
20,125 |
350,624 |
1,522,598 |
1,893,347 |
75,141 |
456,011 |
1,801,612 |
2,332,764 | |||||||||
CERAN |
||||||||||||||||
1st Issue |
1st series |
843 |
106,000 |
212,000 |
318,843 |
181 |
106,000 |
212,000 |
318,181 | |||||||
1st Issue |
2nd series |
562 |
- |
212,000 |
212,562 |
121 |
- |
212,000 |
212,121 | |||||||
1,406 |
106,000 |
424,000 |
531,406 |
302 |
106,000 |
424,000 |
530,302 | |||||||||
Borrowing costs (**) |
- |
(9,974) |
(58,641) |
(68,615) |
(7,580) |
(8,745) |
(60,546) |
(76,870) | ||||||||
163,176 |
1,221,970 |
8,591,981 |
9,977,127 |
190,489 |
1,512,584 |
7,473,454 |
9,176,526 |
62
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Quantity issued |
Annual remuneration |
Annual effective rate |
Amortization conditions |
Collateral | ||||||
CPFL Paulista |
||||||||||
7th Issue |
Single series |
50,500 |
CDI + 0.83% (2) |
CDI + 0.89% |
4 annual installments from February 2018 |
CPFL Energia guarantee | ||||
8th Issue |
1st series |
213,804 |
|
IPCA + 4,42% |
|
IPCA + 4,42% |
|
1 installment in September 2022 |
|
CPFL Energia guarantee |
8th Issue |
2nd series |
355,718 |
|
IPCA + 4,66% |
|
IPCA + 4,66% |
|
2 annual instalments from September 2023 |
|
CPFL Energia guarantee |
8th Issue |
3rd series |
130,478 |
|
IPCA + 5,05% |
|
IPCA + 5,05% |
|
3 annual instalments from September 2025 |
|
CPFL Energia guarantee |
9th Issue |
Single series |
1,380,000 |
|
CDI + 0.48% (2) |
106.0% of CDI |
|
Parcela única em Janeiro de 2021 |
|
CPFL Energia guarantee | |
|
|
|
|
|
|
|
| |||
CPFL Piratininga |
||||||||||
6th Issue |
Single series |
110 |
CDI + 0.8% (2) |
CDI + 0.91% |
3 annual installments from July 2017 |
CPFL Energia guarantee | ||||
7th Issue |
Single series |
23,500 |
CDI + 0.83% (2) (3) |
CDI + 0.89% |
4 annual installments from February 2018 |
CPFL Energia guarantee | ||||
8th issue |
2nd series |
246,000 |
109.5% CDI (2) |
109.5% CDI |
2 annual installments from February 2021 |
CPFL Energia guarantee | ||||
8th issue |
1st series |
60,000 |
IPCA + 5.2901% |
IPCA + 5.2901% |
2 annual installments from February 2021 |
CPFL Energia guarantee | ||||
9th Issue |
Single series |
215,000 |
|
CDI + 0.48% (2) |
|
106.2% of CDI |
|
Parcela única em Janeiro de 2021 |
|
CPFL Energia guarantee |
RGE |
||||||||||
6th Issue |
Single series |
500 |
CDI + 0.8% (2) |
CDI + 0.88% |
3 annual installments from July 2017 |
CPFL Energia guarantee | ||||
7th Issue |
Single series |
17,000 |
CDI + 0.83% (2)(4) |
CDI + 0.88% |
4 annual installments from February 2018 |
CPFL Energia guarantee | ||||
8th issue |
2nd series |
250,000 |
111.25% CDI (2) |
111.25% CDI |
2 annual installments from February 2021 |
CPFL Energia guarantee | ||||
8th issue |
1st series |
130,000 |
IPCA+ 5.3473% |
IPCA+ 5.3473% |
2 annual installments from February 2023 |
CPFL Energia guarantee | ||||
9th Issue |
Single series |
220,000 |
|
CDI + 0,48% (2) |
106.2% of CDI |
|
1 installment in January 2021 |
|
CPFL Energia guarantee | |
CPFL Santa Cruz |
||||||||||
1st Issue |
Single series |
650 |
CDI + 1.4% |
CDI + 1.52% |
2 annual instalments from June 2017 |
CPFL Energia guarantee | ||||
2nd Issue |
Single series |
190,000 |
|
CDI + 0,48% |
106.3% of CDI |
|
1 installment in January 2021 |
|
CPFL Energia guarantee | |
RGE SUL |
||||||||||
4th Issue |
Single series |
110,000 |
114.50% of CDI (2) (5) |
114.5% of CDI |
2 annual installments from October 2019 |
CPFL Energia guarantee | ||||
6th Issue |
Single series |
520,000 |
|
CDI + 0.48% (2) |
|
CDI + 0,48% |
|
1 installment in December 2020 |
|
CPFL Energia guarantee |
|
|
|
|
|
|
|
||||
CPFL Brasil |
||||||||||
3rd Issue |
Single series |
40,000 |
114.5% of CDI |
114.5% of CDI |
2 annual installments from October 2019 |
CPFL Energia guarantee | ||||
4th Issue |
Single series |
115,000 |
|
CDI + 0.27% (2) |
|
106.1% of CDI |
|
1 installment in January 2019 |
|
CPFL Energia guarantee |
CPFL Geração |
||||||||||
5th Issue |
Single series |
10,920 |
CDI + 1.4% |
CDI + 1.48% |
2 annual instalments from June 2017 |
CPFL Energia guarantee | ||||
6th Issue |
Single series |
46,000 |
CDI + 0.75% (2) |
CDI + 0.75% |
3 annual instalments from August 2018 |
CPFL Energia guarantee | ||||
7th Issue |
Single series |
63,500 |
CDI + 1.06% (2) |
CDI + 1.11% |
1 installment in April 2019 |
CPFL Energia guarantee | ||||
8th Issue |
Single series |
1 |
IPCA + 5.86% (1) |
103.33% of CDI |
1 installment in April 2019 |
CPFL Energia guarantee | ||||
9th Issue |
Single series |
50,000 |
IPCA+ 5.4764% |
IPCA+ 5.4764% |
1 installment in October 2021 |
CPFL Energia guarantee | ||||
10th Issue |
Single series |
190,000 |
|
CDI + 0,27% (2) |
|
105,4% of CDI |
|
1 installment in December 2018 |
|
CPFL Energia guarantee |
11th Issue |
1st series |
700,000 |
|
105,75% of CDI |
|
106,75% of CDI |
|
1 installment in May 2021 |
|
CPFL Energia guarantee |
11th Issue |
2nd series |
700,000 |
|
107,50% of CDI |
|
107,82% of CDI |
|
2 annual instalments from May 2022 |
|
CPFL Energia guarantee |
Parent company |
||||||||||
5th Issue |
Single series |
62,500 |
114.5% of CDI |
114.5% of CDI |
2 annual installments from October 2019 |
No guarantee | ||||
CPFL Renováveis |
||||||||||
1st Issue - SIIF |
1st to 12th series |
432,299,666 |
TJLP + 1% |
TJLP + 3.48% |
39 semi-annual installments from 2009 |
Liens | ||||
1st Issue - PCH Holding 2 |
Single series |
1,581 |
CDI + 1.6% |
CDI + 2.6% |
9 annual installments from June 2015 to 2023 |
CPFL Renováveis guarantee | ||||
2nd Issue - DESA |
Single series |
65 |
CDI + 1.34% |
CDI + 3.03% |
3 semi-annual installments from April de 2018 |
Unsecured | ||||
1st Issue - Pedra Cheirosa I |
Single series |
5,220 |
CDI + 1.90% |
CDI + 4.74% |
1 installment in March 2018 |
CPFL Renováveis guarantee | ||||
1st Issue - Pedra Cheirosa II |
Single series |
4,780 |
CDI + 1.90% |
CDI + 4.76% |
1 installment in March 2018 |
CPFL Renováveis guarantee | ||||
1st Issue - Renováveis |
Single series |
43,000 |
CDI + 1.7% |
CDI + 2.60% |
9 annual installments from May 2015 |
Assignment of dividends of BVP and PCH Holding | ||||
2nd Issue - Renováveis |
Single series |
300,000 |
114% do CDI |
129.39% CDI |
5 annual instalments from 2017 |
Unsecured | ||||
3rd Issue - Renováveis |
Single series |
29,600 |
117.25% CDI |
135.94% CDI |
3 semi-annual installments from April de 2018 |
Unsecured | ||||
4th Issue - Renováveis |
1st series |
20,000 |
126% CDI |
140.16% CDI |
3 annual installments from September 2019 |
CPFL Energia guarantee | ||||
5th Issue - Renováveis |
Single series |
100,000,000 |
129.5% CDI |
144.46% CDI |
Semi-annual installments from June 2018 |
Liens of 60% of the quotas from Ludesa | ||||
7th Issue - Renováveis |
Single series |
250,000 |
IPCA + 5.62% |
IPCA + 6.14% |
1 installment in the end of the contract |
CPFL Energia guarantee | ||||
CERAN |
||||||||||
1st Issue |
1st series |
318,000 |
|
107,75% CDI |
|
109,82% of CDI |
|
3 annual installments from December 2018 |
|
No guarantee |
1st Issue |
2nd series |
212,000 |
|
107,75% CDI |
|
109,82% of CDI |
|
3 annual installments from December 2021 |
|
No guarantee |
(1) The subsidiaries entered into swap transactions for swap of the fixed interest component of the transaction to the fluctuation of the interest rate in reais, corresponding to 100.15% of the CDI | ||||||||||
(2) The subsidiaries entered into swap transactions for swap of the fluctuation in interest rate of the transaction to fixed rates between from 6.61% to 7.72% |
||||||||||
(3) The swap of the transaction represents 40.73% of the debt principal |
||||||||||
(4) The swap of the transaction represents 73.63% of the debt principal |
||||||||||
(5) The swap of the transaction represents 70.13% of the debt principal |
63
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
(*) These debentures can be converted into shares and, therefore, are considered in the calculation of the dilutive effect for the earnings per share (note 24)
(**) In accordance with CPC 48/IFRS 9 this refers to borrowing costs directly attributable to the issuance of the respective debts.
The maturities of the principal of debentures recognized in noncurrent liabilities are as follows:
Maturity |
Consolidated | |
From July 1, 2019 |
709,190 | |
2020 |
1,517,654 | |
2021 |
3,677,925 | |
2022 |
1,333,025 | |
2023 |
715,047 | |
2024 to 2028 |
639,140 | |
Total |
8,591,981 |
Main additions in the period:
|
|
|
|
|
|
R$ thousand |
| |||||
Company |
|
Issue |
|
Quantity issued |
|
Released in 2018 |
Released net of fundraising costs |
Interest |
|
Utilization | ||
CPFL Paulista |
|
9th issue |
|
1,380,000 |
|
1,380,000 |
|
1,379,022 |
|
Semiannually |
|
Subsidiary's investment plan, debt refinancing and working capital improvement |
CPFL Piratininga |
|
9th issue |
|
215,000 |
|
215,000 |
|
214,739 |
|
Semiannually |
|
Subsidiary's investment plan, debt refinancing and working capital improvement |
CPFL Brasil |
|
4th issue |
|
115,000 |
|
115,000 |
|
114,848 |
|
Semiannually |
|
Subsidiary's investment plan, debt refinancing and working capital improvement |
CPFL Santa Cruz |
|
2nd issue |
|
190,000 |
|
190,000 |
|
189,737 |
|
Semiannually |
|
Subsidiary's investment plan, debt refinancing and working capital improvement |
RGE |
|
9th issue |
|
220,000 |
|
220,000 |
|
219,733 |
|
Semiannually |
|
Subsidiary's investment plan, debt refinancing and working capital improvement |
RGE Sul |
|
6th issue |
|
520,000 |
|
300,000 |
|
299,677 |
|
Semiannually |
|
Subsidiary's investment plan, debt refinancing and working capital improvement |
CPFL Geração |
|
10th issue |
|
190,000 |
|
190,000 |
|
189,838 |
|
Semiannually |
|
Subsidiary's investment plan, debt refinancing and working capital improvement |
CPFL Geração |
|
11th issue |
|
1,400,000 |
|
1,400,000 |
|
1,397,949 |
|
Semiannually |
|
Prepayment of financial debt and working capital |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,010,000 |
|
4,005,543 |
|
|
|
|
Pre-payment
In the 1st semester of 2018, R$2,015,270 of debenture were paid in advance, whose due dates were from April 2019 to October 2020.
RESTRICTIVE COVENANTS
The debenture agreements are subject to certain restrictive covenants, including covenants that require the Company and its subsidiaries to maintain certain financial ratios within pre-established parameters. Moreover, these agreements contain restrictive non-financial covenants, which are complied with as per the last measurement period.
64
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Debentures issued in 2018 are subject to the following covenants:
· Debt indebtedness divided by EBITDA maximum of 3.75 and
· EBITDA divided by the financial result minimum of 2.25.
The details of the restrictive conditions for other debts are presented in the Financial Statements of December 31, 2017.
The Group’s management monitors these ratios on a systematic and constant basis, so that all conditions are met. The Group’s management believes that all covenants and clauses whose indicators are measured semiannually and annually are properly complied with, according to the last calculation period, in other words, June 30, 2018 and December 31, 2017, respectively.
( 18 ) PRIVATE PENSION PLAN
The subsidiaries have supplementary retirement and pension plans for their employees, the characteristics of which are described in note 18 to the financial statements for the year ended December 31, 2017.
18.1 Movements in the defined benefit plans
The movements in net liability occurred in the period are as follows:
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
RGE Sul |
Total liability | ||||||
Net actuarial liability at December 31, 2017 |
690,000 |
141,724 |
16,424 |
- |
77,623 |
925,771 | |||||
Expenses (income) recognized in the statement of profit or loss |
31,165 |
8,186 |
777 |
(94) |
4,922 |
44,955 | |||||
Sponsors' contributions transferred during the year / period |
(28,646) |
(11,510) |
(420) |
3,575 |
(3,132) |
(40,134) | |||||
Effect of asset ceiling |
- |
- |
- |
(3,480) |
- |
(3,480) | |||||
Net actuarial liability at June, 2018 |
692,519 |
138,400 |
16,781 |
- |
79,413 |
927,112 | |||||
Other contributions |
11,664 |
547 |
73 |
33 |
- |
12,318 | |||||
Total liability |
704,183 |
138,947 |
16,854 |
33 |
79,413 |
939,430 | |||||
Current |
|
|
|
|
|
69,132 | |||||
Noncurrent |
|
|
|
|
|
870,298 |
The income and expenses recognized as cost of the operation are shown below:
1st semester 2018 accomplished | |||||||||||
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
RGE Sul |
Total | ||||||
Service cost |
418 |
2,182 |
40 |
88 |
1,396 |
4,124 | |||||
Interest on actuarial obligations |
210,542 |
57,314 |
5,054 |
16,776 |
24,110 |
313,796 | |||||
Expected return on plan assets |
(179,794) |
(51,310) |
(4,318) |
(17,976) |
(20,584) |
(273,982) | |||||
Effect of asset ceiling |
- |
- |
- |
1,018 |
- |
1,018 | |||||
Total expense (income) |
31,165 |
8,186 |
777 |
(94) |
4,922 |
44,955 | |||||
1st semester 2017 accomplished | |||||||||||
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
RGE Sul |
Total | ||||||
Service cost |
354 |
1,576 |
36 |
136 |
1,077 |
3,179 | |||||
Interest on actuarial obligations |
238,306 |
63,780 |
5,716 |
18,698 |
25,464 |
351,964 | |||||
Expected return on plan assets |
(196,410) |
(56,734) |
(4,718) |
(18,708) |
(21,630) |
(298,200) | |||||
Total expense (income) |
42,251 |
8,622 |
1,034 |
127 |
4,911 |
56,944 |
The main assumptions considered in the actuarial calculation, based on the actuarial reports prepared as of December 31, 2017 and 2016, were as follows:
65
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
CPFL Paulista, CPFL Geração and CPFL Piratininga |
RGE |
RGE Sul | ||||||||||
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 | |||||||
Nominal discount rate for actuarial liabilities: |
9.51% p.a. |
10.99% p.a. |
9.51% p.a. |
10.99% p.a. |
9.51% p.a. |
10.99% p.a. | ||||||
Nominal return rate on plan assets: |
9.51% p.a. |
10.99% p.a. |
9.51% p.a. |
10.99% p.a. |
9.51% p.a. |
10.99% p.a. | ||||||
Estimated rate of nominal salary increase: |
6.08% p.a.** |
7.00% p.a. |
6.13% p.a. |
8.15% p.a. |
6.10% a.a. |
7.29% p.a. | ||||||
Estimated rate of nominal benefits increase: |
4.00% p.a. |
5.00% p.a. |
4.00% p.a. |
5.00% p.a. |
4.00% p.a. |
5.00% p.a. | ||||||
Estimated long-term inflation rate (basis for determining the nominal rates above) |
4.00% p.a. |
5.00% p.a. |
4.00% p.a. |
5.00% p.a. |
4.00% p.a. |
5.00% p.a. | ||||||
General biometric mortality table: |
AT-2000 (-10) |
AT-2000 (-10) |
BREMS sb v.2015 |
BREMS sb v.2015 |
BREMS sb v.2015 |
AT-2000 | ||||||
Biometric table for the onset of disability: |
Low Light |
Low Light |
Medium Light |
Medium Light |
Medium Light |
Medium Light | ||||||
Expected turnover rate: |
ExpR_2012 |
ExpR_2012* |
Null |
Null |
Null |
Null | ||||||
Likelihood of reaching retirement age: |
100% when a beneficiary of the plan first becomes eligible |
100% when a beneficiary of the plan first becomes eligible |
100% one year after when a beneficiary of the plan first becomes eligible |
100% one year after when a beneficiary of the plan first becomes eligible |
100% one year after when a beneficiary of the plan first becomes eligible |
100% one year after when a beneficiary of the plan first becomes eligible | ||||||
(*) FUNCESP experience, with aggravation of 40% |
||||||||||||
(**) Estimated rate of nominal salary increase of 6.39% p.a. for CPFL Piratininga |
( 19 ) REGULATORY CHARGES
Consolidated | |||
June 30, 2018 |
December 31, 2017 | ||
Financial compensation for the use of water resources |
1,180 |
1,256 | |
Global reversal reserve - RGR |
17,312 |
17,545 | |
ANEEL inspection fee -TFSEE |
3,789 |
2,061 | |
Energy development account - CDE |
148,293 |
262,213 | |
Tariff flags and others |
116,285 |
298,525 | |
Total |
286,858 |
581,600 |
Energy development account – CDE: Refers to (i) quota for the return of CDE contribution for the period from January, 2013 to January, 2014 in the amount of R$48,481 (R$47,429 at December 31, 2017) and (ii) quota for the return of Regulated Contracting Environment Account (“ACR account”) contribution for the period from February to December, 2014, in the amount of R$99,813 (R$76,649 at December 31, 2017.) At December 31, 2017, there was also a balance relating to the CDE annual quota for 2017, in the amount of R$138,135. The subsidiaries matched the amounts payable and the amounts receivable – CDE (note 11) of the first semester of 2018, in the amount of R$2,545 (R$182,648 in the first semester of 2017.)
Tariff flags and others – Refer basically to the amount to be passed through to the Centralizing Account of Tariff Flag Resources (“CCRBT”), whose amount receivable was recognized through the issue of electricity bills (note 25.4)
66
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
( 20 ) TAXES, FEES AND CONTRIBUTIONS
Consolidated | ||||
June 30, 2018 |
December 31, 2017 | |||
Current |
||||
IRPJ (corporate income tax) |
48,146 |
59,026 | ||
CSLL (social contribution on net income) |
19,078 |
22,430 | ||
Income tax and social contribution |
67,225 |
81,457 | ||
ICMS (State VAT) |
193,492 |
403,492 | ||
PIS (tax on revenue) |
30,304 |
32,486 | ||
COFINS (tax on revenue) |
140,044 |
141,757 | ||
Others |
39,695 |
51,111 | ||
Other taxes, fees and contributions |
403,535 |
628,846 | ||
Total current |
470,759 |
710,303 | ||
Noncurrent |
||||
ICMS (State VAT) |
756 |
- | ||
PIS (tax on revenue) |
2,524 |
18,839 | ||
COFINS (tax on revenue) |
11,488 |
- | ||
Other taxes, fees and contributions |
14,768 |
18,839 | ||
Total noncurrent |
14,768 |
18,839 |
( 21 ) PROVISION FOR TAX, CIVIL AND LABOR RISKS AND ESCROW DEPOSITS
Consolidated | |||||||
June 30, 2018 |
December 31, 2017 | ||||||
Provision for tax, civil and labor risks |
Escrow Deposits |
Provision for tax, civil and labor risks |
Escrow Deposits | ||||
Labor |
208,991 |
119,732 |
224,258 |
122,194 | |||
Civil |
266,681 |
110,644 |
291,388 |
97,100 | |||
Tax |
|||||||
FINSOCIAL |
34,307 |
97,535 |
33,473 |
95,903 | |||
Income Tax |
152,399 |
391,969 |
150,020 |
382,884 | |||
Others |
186,793 |
146,167 |
163,798 |
140,289 | |||
373,498 |
635,671 |
347,291 |
619,077 | ||||
Others |
100,239 |
9 |
98,196 |
1,620 | |||
Total |
949,408 |
866,057 |
961,134 |
839,990 |
The movements in the provision for tax, civil, labor and other risks are shown below:
67
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Consolidated | |||||||||||
As of December 31, 2017 |
Additions |
Reversals |
Payments |
Monetary adjustment |
As of June 30, 2018 | ||||||
Labor |
224,258 |
21,829 |
(15,481) |
(33,928) |
12,313 |
208,991 | |||||
Civil |
291,388 |
37,610 |
(21,568) |
(50,499) |
9,750 |
266,681 | |||||
Tax |
347,291 |
19,825 |
(994) |
(491) |
7,867 |
373,498 | |||||
Others |
98,196 |
13,465 |
(6,147) |
(8,068) |
2,793 |
100,239 | |||||
Total |
961,134 |
92,729 |
(44,190) |
(92,985) |
32,723 |
949,408 |
The provision for tax, civil, labor and other risks was based on the assessment of the risks of losing the lawsuits to which the Group is part, where the likelihood of loss is probable in the opinion of the outside legal counselors and the Management of the Group.
The details of the nature of the provision for tax, civil, labor and other risks and escrow deposits are presented in the Note 21 of the financial statements at December 31, 2017.
Possible losses
The Group is part to other lawsuits in which Management, supported by its external legal counselors, believes that the chances of a successful outcome are possible, that is, it is more likely than not that there will be no disbursement for these cases due to a solid defensive position in these cases. It is not yet possible to predict the outcome of the courts’ decisions or any other decisions in similar proceedings considered probable or remote.
The claims relating to possible losses at June 30, 2018 and December 31, 2017 were as follows:
Consolidated |
|||||
June 30, 2018 |
December 31, 2017 |
||||
Labor |
830,240 |
686,538 |
Work accidents, risk premium for dangerousness at workplace and overtime | ||
Civil |
1,381,046 |
1,178,671 |
Personal injury, environmental impacts and overfed tariffs | ||
Tax |
5,601,385 |
5,100,151 |
ICMS, FINSOCIAL, PIS and COFINS, and Income tax | ||
Regulatory |
222,359 |
140,695 |
Technical, commercial and economic-financial supervisions | ||
Total |
8,035,030 |
7,106,055 |
Tax – there is a discussion about the deductibility for income tax of the expense recognized in 1997 relating to the commitment assumed in regard to the pension plan of employees of the subsidiary CPFL Paulista with Fundação CESP in the estimated amount of R$ 1,275,051.
With respect to labor contingencies, the Group informs that, as described in note 22 to the financial statements as of December 31, 2017, there is a discussion regarding the possibility of changing the adjustment index adopted by the Labor Court, and the discussion status has not changed since then the rate currently used remains valid.
Based on the opinion of their outside legal counselors, the Group’s management believes that the amounts provided for reflect the current best estimate.
68
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
( 22 ) OTHER PAYABLES
Consolidated | |||||||
Current |
Noncurrent | ||||||
June 30, 2018 |
December 31, 2017 |
June 30, 2018 |
December 31, 2017 | ||||
Consumers and concessionaires |
71,371 |
93,068 |
46,873 |
44,473 | |||
Energy efficiency program - PEE |
159,885 |
186,621 |
114,366 |
110,931 | |||
Research & Development - P&D |
102,808 |
103,308 |
83,981 |
68,780 | |||
EPE / FNDCT / PROCEL |
28,633 |
15,612 |
- |
- | |||
Reversion fund |
1,712 |
- |
15,183 |
17,750 | |||
Advances |
446,850 |
300,214 |
42,810 |
22,255 | |||
Tariff discounts - CDE |
34,755 |
25,040 |
- |
- | |||
Provision for socio environmental costs |
17,139 |
16,360 |
112,028 |
107,814 | |||
Payroll |
13,022 |
20,747 |
- |
- | |||
Profit sharing |
59,776 |
80,518 |
10,104 |
16,273 | |||
Collection agreements |
74,923 |
72,483 |
- |
- | |||
Guarantees |
- |
- |
5,495 |
5,959 | |||
Business combination |
7,230 |
6,927 |
- |
- | |||
Others |
31,619 |
40,408 |
39,069 |
32,654 | |||
Total |
1,049,723 |
961,306 |
469,910 |
426,889 |
Advances: refer mainly to advances from customers in relation to advance billing by the subsidiary CPFL Renováveis, before the energy or service has actually been provided or delivered.
( 23 ) EQUITY
The shareholders’ interest in the Company’s Equity at June 30, 2018 and December 31, 2017 is shown below:
Number of shares | ||||||||
June 30, 2018 |
December 31, 2017 | |||||||
Shareholders |
Common shares |
Interest % |
Common shares |
Interest % | ||||
State Grid Brazil Power Participações S.A. |
730,435,698 |
71.76% |
730,435,698 |
71.76% | ||||
Camargo Correa S.A. |
27,435 |
0.00% |
27,435 |
0.00% | ||||
ESC Energia S.A. |
234,086,204 |
23.00% |
234,086,204 |
23.00% | ||||
Members of the Executive Board |
189 |
0.00% |
189 |
0.00% | ||||
Other shareholders |
53,365,220 |
5.24% |
53,365,220 |
5.24% | ||||
Total |
1,017,914,746 |
100.00% |
1,017,914,746 |
100.00% |
The details of the items included in equity are described in the financial statements for the year ended December 31, 2017.
23.1 – Termination of the statutory reserve of the concession financial asset.
The EGM of April 27, 2018 approved the termination of the statutory reserve of the concession financial asset and the transfer of the respective balance of R$ 826,600 to the Retained Earnings account.
( 24 ) EARNINGS PER SHARE
Earnings per share – basic and diluted
The calculation of the basic and diluted earnings per share for the quarters and semesters ended at June 30, 2018 and 2017 was based on the profit of the period attributable to controlling shareholders and the weighted average number of common shares outstanding period:
69
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
2nd quarter 2018 |
1st semester 2018 |
2nd quarter 2017 |
1st semester 2017 | |||||
Numerator |
||||||||
Profit attributable to controlling shareholders |
||||||||
Denominator |
455,714 |
899,497 |
143,475 |
389,360 | ||||
Weighted average number of shares held by shareholders |
||||||||
1,017,914,746 |
1,017,914,746 |
1,017,914,746 |
1,017,914,746 | |||||
Earnings per share - basic and diluted |
||||||||
0.45 |
0.88 |
0.14 |
0.38 |
For the periods ended June 30, 2018 and 2017, the calculation of earnings per share was not affected by the effects of debentures convertible into shares due to the fact that they presented antidilutive effects.
( 25 ) NET OPERATING REVENUE
Consolidated | |||||||
2018 |
2017 | ||||||
Revenue from Eletric Energy Operations |
2nd quarter |
1st semester |
2nd quarter |
1st semester | |||
Consumer class |
|||||||
Residential |
3,282,393 |
6,399,851 |
2,694,765 |
5,872,153 | |||
Industrial |
1,266,623 |
2,425,972 |
1,259,244 |
2,502,632 | |||
Commercial |
1,479,401 |
2,913,868 |
1,293,443 |
2,819,964 | |||
Rural |
305,874 |
658,275 |
256,233 |
586,001 | |||
Public administration |
222,179 |
415,098 |
199,150 |
399,210 | |||
Public lighting |
184,844 |
338,894 |
158,707 |
313,497 | |||
Public services |
279,087 |
517,413 |
230,687 |
470,532 | |||
(-) Adjustment of revenues from excess demand and excess reactive power |
- |
- |
(20,874) |
(45,153) | |||
Billed |
7,020,401 |
13,669,370 |
6,071,355 |
12,918,836 | |||
Unbilled (net) |
(110,628) |
(12,154) |
(195,855) |
(221,484) | |||
(-) Reclassificacion to Network Usage Charge - TUSD - Captive Consumers |
(2,616,568) |
(5,558,620) |
(2,235,793) |
(4,827,275) | |||
Electricity sales to final consumers |
4,293,205 |
8,098,596 |
3,639,707 |
7,870,076 | |||
Furnas Centrais Elétricas S.A. |
135,778 |
269,864 |
142,641 |
277,241 | |||
Other concessionaires and licensees |
868,434 |
1,566,680 |
703,422 |
1,274,975 | |||
(-) Reclassificacion to Network Usage Charge - TUSD - Captive Consumers |
(24,214) |
(42,068) |
(12,371) |
(24,847) | |||
Spot market energy |
313,283 |
479,410 |
608,058 |
852,708 | |||
Electricity sales to wholesalers |
1,293,281 |
2,273,886 |
1,441,750 |
2,380,077 | |||
Revenue due to Network Usage Charge - TUSD - Captive Consumers |
2,640,782 |
5,600,688 |
2,248,164 |
4,852,122 | |||
Revenue due to Network Usage Charge - TUSD - Free Consumers |
674,921 |
1,254,161 |
537,295 |
1,063,604 | |||
(-) Compensation for non-compliance with technical indicators |
(13,441) |
(29,821) |
- |
- | |||
(-) Adjustment of revenues from excess demand and excess reactive power |
- |
- |
(6,237) |
(13,034) | |||
Revenue from construction of concession infrastructure |
370,053 |
740,615 |
462,323 |
878,362 | |||
Sector financial asset and liability (Note 8) |
480,699 |
854,246 |
369,317 |
(195,686) | |||
Concession financial asset - fair value adjustment (Note 10) |
138,552 |
203,409 |
32,391 |
81,314 | |||
Energy development account - CDE - Low-income, Tariff discounts - judicial injunctions ,and other tariff discounts |
377,748 |
754,489 |
313,950 |
737,924 | |||
Other revenues and income |
245,116 |
388,144 |
117,851 |
232,137 | |||
Other operating revenues |
4,914,430 |
9,765,931 |
4,075,055 |
7,636,744 | |||
Total gross operating revenue |
10,500,917 |
20,138,414 |
9,156,512 |
17,886,897 | |||
Deductions from operating revenues |
|
|
|
| |||
ICMS |
(1,501,034) |
(2,925,304) |
(1,287,876) |
(2,755,202) | |||
PIS |
(162,849) |
(312,534) |
(138,986) |
(274,789) | |||
COFINS |
(750,126) |
(1,439,641) |
(640,211) |
(1,265,701) | |||
ISS |
(4,019) |
(7,547) |
(3,672) |
(6,594) | |||
Global reversal reserve - RGR |
- |
(247) |
(741) |
(1,457) | |||
Energy development account - CDE |
(921,787) |
(1,819,458) |
(784,158) |
(1,614,314) | |||
Research and development and energy efficiency |
(52,320) |
(100,913) |
(43,333) |
(84,434) | |||
PROINFA |
(38,220) |
(73,495) |
(42,862) |
(86,767) | |||
Tariff flags and others |
(116,235) |
(123,331) |
(244,460) |
(281,063) | |||
IPI |
|||||||
|
(3,555,551) |
(6,818,393) |
(3,193,963) |
(6,385,569) | |||
Net operating revenue |
6,945,366 |
13,320,021 |
5,962,549 |
11,501,327 | |||
70
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
2018 |
2017 | ||||||
Revenue from operations with electricity - in GWh |
2nd quarter |
1st semester |
2nd quarter |
1st semester | |||
Consumer class |
|||||||
Residential |
4,787 |
10,078 |
4,590 |
9,718 | |||
Industrial |
3,392 |
6,767 |
3,683 |
7,142 | |||
Commercial |
2,520 |
5,273 |
2,455 |
5,284 | |||
Rural |
778 |
2,015 |
836 |
1,935 | |||
Public administration |
372 |
746 |
400 |
767 | |||
Public lighting |
490 |
994 |
490 |
970 | |||
Public services |
572 |
1,143 |
515 |
1,012 | |||
Billed |
12,911 |
27,016 |
12,969 |
26,829 | |||
Own consumption |
8 |
17 |
8 |
17 | |||
Electricity sales to final consumers |
12,920 |
27,033 |
12,977 |
26,846 | |||
Furnas Centrais Elétricas S.A. |
717 |
1,426 |
754 |
1,501 | |||
Other concessionaires and licensees |
4,286 |
7,856 |
3,803 |
7,020 | |||
Spot market energy |
1,016 |
1,589 |
2,952 |
4,374 | |||
Electricity sales to wholesalers |
6,019 |
10,871 |
7,510 |
12,895 |
Consolidated | ||||
Nº of consumers |
June 30, 2018 |
June 30, 2017 | ||
Consumer class |
||||
Residential |
8,436,616 |
8,240,134 | ||
Industrial |
59,107 |
60,447 | ||
Commercial |
538,250 |
543,888 | ||
Rural |
360,650 |
356,962 | ||
Public Administration |
60,822 |
60,764 | ||
Public Lighting |
11,449 |
11,111 | ||
Public Services |
10,050 |
9,698 | ||
Total |
9,476,944 |
9,283,004 |
25.1 Adjustment of revenues from excess demand and excess reactive power
The tariff regulation procedure (Proret), sub item 2.7 Other revenues, approved by ANEEL Normative Resolution No. 463 of November 22, 2011, determined that revenues of the distribution subsidiaries received as a result of excess demand and excess reactive power, from the contractual tariff review date for the 3rd periodic tariff review, must be accounted for as special obligations, in specific sub-accounts, and will be amortized from the next tariff review. Beginning May 2015 for subsidiary CPFL Piratininga, September 2015 for subsidiary Companhia Jaguari de Energia (CPFL Santa Cruz) and November 2017 for subsidiaries CPFL Paulista and RGE Sul and January 2018 for the subsidiary RGE, due to the 4th cycle of periodic tariff review, this special obligation started being amortized and the new values from the excess demand and excess reagents started being recognized in sector financial assets and liabilities and will only be amortized when the 5th cycle of periodic tariff review is approved.
25.2 Periodic tariff review (“RTP”) and Annual tariff adjustment (“RTA”)
2018 |
2017 | |||||||||
Subsidiary |
Month |
RTA |
Effect perceived by consumers (a) |
RTA / RTP |
Effect perceived by consumers (a) | |||||
CPFL Paulista |
April (b) |
12.68% |
16.90% |
-0.80% |
-10.50% | |||||
CPFL Piratininga |
October |
(b) |
(b) |
7.69% |
17.28% | |||||
RGE |
June |
21.27% |
20.58% |
3.57% |
5.00% | |||||
RGE Sul |
April (b) |
18.45% |
22.47% |
-0.20% |
-6.43% | |||||
Companhia Força e Luz Santa Cruz |
March |
(c) |
(c) |
-1.28% |
-10.37% | |||||
CPFL Leste Paulista |
March |
(c) |
(c) |
0.76% |
-3.28% | |||||
CPFL Jaguari de Energia (CPFL Santa Cruz) |
March |
5.71% |
(c) |
2.05% |
-8.42% | |||||
CPFL Sul Paulista |
March |
(c) |
(c) |
1.64% |
-4.15% | |||||
CPFL Mococa |
March |
(c) |
(c) |
1.65% |
-2.56% |
(a) Represents the average effect perceived by the consumer, as a result of the elimination from the tariff base of financial components that had been added in the prior tariff adjustment.
(b) The respective adjustments for 2018 have not yet occurred.
71
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
(c) As mentioned in note 12.5.2, at March 31, 2018, the EGM approved the grouping of subsidiaries Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia e Companhia Luz and Força de Mococa In accordance with Normative Resolution 716, of May 3, 2016, until the first tariff review of the grouped concessionaire, which will take place in March 2021, ANEEL may apply the procedure that divides over time the variation in the tariffs of the former concessions and the unified tariff. This occurred in the tariff adjustment of March 2018.
On March 13, 2018, the ANEEL published REH No. 2,376, which set the average annual tariff adjustment of Companhia Jaguari de Energia (“CPFL Santa Cruz”), effective as of March 22, 2018, at 5.71%, 4.41% regarding the economic tariff adjustment and 1.30% regarding relevant financial components. The average effect to be perceived by consumers of the original concessions are:
Jaguari |
Mococa |
Leste Paulista |
Sul Paulista |
Santa Cruz | |||||
Effect perceived by consumers |
21.15% |
3.40% |
7.03% |
7.50% |
5.32% |
25.3 Energy Development Account (CDE) – Low income, other tariff subsidies and tariff discounts - injunctions
All details on the CDE contribution are disclosed in notes 25.3 to the financial statements as of December 31, 2017.
In the first semester of 2018, a revenue of R$754,489 was recognized (R$737,924 in the first semester of 2017), considering (i) R$39,882 for low-income subsidy (R$51,793 in the first semester of 2017), (ii) R$693,719 for other tariff discounts (R$609,826 in the first semester of 2017), and (iii) R$20,887 for tariff discounts – CCRBT injunctions and subsidy (R$76,305 in the first semester of 2017); These items were recorded as a balancing item to other receivables in line item Receivables – CDE (note 11) and other payables in line item Tariff discounts – CDE (note 22.)
25.4 Tariff flags
The system of Tariff Flags application is described in note 25.4 to the financial statements as of December 31, 2017.
In the first semester of 2018, ANEEL approved the Tariff Flags billed from November 2017to April 2018. The amount approved in this period was R$366,321. Out of this amount, R$297,340, referring to November and December 2017, were used to offset part of the sector financial asset and liability (note 8) and R$68,981, referring to the January to April 2018 approval, due to Closing Order No. 4,356 of December 22, 2017, were classified as sector financial asset and liability. The amount of R$116,274, with respect to the tariff flag billed for May and June 2018, was not approved and is recorded in regulatory fees (note 17.)
25.5 Energy development account (“CDE”)
ANEEL, by means of Ratifying Resolution (“REH”) No. 2,358 of December 19, 2017, amended by REH No. 2,368 of February 9, 2018, established the definitive annual quotas of CDE for the year 2018. These quotas comprise: (i) annual quota of the CDE – USAGE account; and (ii) quota of the CDE – Energy account, related to part of the CDE contributions received by the electric energy distribution concessionaires in the period from January 2013 to January 2014, which should be charged from consumers and passed on to the CDE Account in up to five years from the RTE of 2015. Furthermore, by means of REH No. 2.004 of December 15, 2015, ANEEL established another quota intended for the amortization of the ACR Account, whose amount were updated by REH No. 2.231, of April 25, 2017, with payment and transfer to the CDE Account for the period of April 2017 to March 2018. The same resolution defined the amounts for the period of April 2018 to March 2020.
72
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
( 26 ) COST OF ELECTRIC ENERGY
Consolidated | ||||||||
2018 |
2017 | |||||||
Electricity Purchased for Resale |
2nd quarter |
1st semester |
2nd quarter |
1st semester | ||||
Itaipu Binacional |
716,374 |
1,274,806 |
610,101 |
1,168,098 | ||||
PROINFA |
82,243 |
168,118 |
72,052 |
142,936 | ||||
Energy purchased through auction in the regulated market and bilateral contracts and spot market |
3,442,156 |
6,417,321 |
3,191,280 |
5,884,091 | ||||
PIS and COFINS credit |
(378,138) |
(696,336) |
(352,889) |
(656,198) | ||||
Subtotal |
3,862,633 |
7,163,909 |
3,520,542 |
6,538,926 | ||||
Electricity Network Usage Charge |
||||||||
Basic network charges |
575,569 |
1,143,009 |
248,439 |
496,314 | ||||
Transmission from Itaipu |
65,463 |
127,654 |
15,645 |
30,538 | ||||
Connection charges |
38,206 |
70,403 |
29,777 |
59,814 | ||||
Charges for use of the distribution system |
11,855 |
21,421 |
10,780 |
22,066 | ||||
System service charges - ESS |
(7,124) |
39,751 |
(65,865) |
(148,528) | ||||
Reserve energy charges - EER |
69,298 |
135,212 |
(17) |
(17) | ||||
PIS and COFINS credit |
(77,865) |
(149,601) |
(20,785) |
(39,942) | ||||
Subtotal |
675,403 |
1,387,849 |
217,974 |
420,244 | ||||
Total |
4,538,036 |
8,551,758 |
3,738,517 |
6,959,171 |
Consolidated | ||||||||
2018 |
2017 | |||||||
Electricity Purchased for Resale - in GWh |
2nd quarter |
1st semester |
2nd quarter |
1st semester | ||||
Itaipu Binacional |
2,765 |
5,504 |
2,926 |
5,834 | ||||
PROINFA |
268 |
524 |
267 |
537 | ||||
Energy purchased through auction in the regulated market and bilateral contracts and spot market |
15,117 |
30,586 |
16,389 |
32,578 | ||||
Total |
18,150 |
36,614 |
19,582 |
38,949 |
73
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
( 27 ) OPERATING COSTS AND EXPENSES
2nd quarter | |||||||||||||||||||||||
|
|
|
|
|
Operating Expenses |
|
| ||||||||||||||||
Operating costs |
Services Rendered to Third Parties |
Sales |
General |
Other |
Total | ||||||||||||||||||
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
2018 |
2017 | ||||||||||||
Personnel |
226,085 |
217,889 |
- |
1 |
42,565 |
43,059 |
83,737 |
75,729 |
- |
- |
352,387 |
336,678 | |||||||||||
Private Pension Plans |
22,477 |
28,112 |
- |
- |
- |
- |
- |
- |
- |
- |
22,477 |
28,112 | |||||||||||
Materials |
53,205 |
50,984 |
162 |
159 |
1,986 |
2,143 |
8,004 |
4,175 |
- |
- |
63,357 |
57,461 | |||||||||||
Third party services |
39,193 |
71,500 |
434 |
280 |
41,756 |
39,759 |
74,338 |
77,597 |
- |
- |
155,721 |
189,136 | |||||||||||
Depreciation and amortization |
319,069 |
283,656 |
- |
- |
1,026 |
1,515 |
22,399 |
23,953 |
- |
- |
342,494 |
309,124 | |||||||||||
Costs of infrastructure construction |
- |
- |
370,047 |
465,666 |
- |
- |
- |
- |
- |
- |
370,047 |
465,666 | |||||||||||
Others |
12,500 |
37,547 |
(2) |
1 |
61,078 |
56,087 |
47,634 |
73,772 |
92,794 |
107,526 |
214,004 |
274,933 | |||||||||||
Collection fees |
- |
3,523 |
- |
- |
20,560 |
17,527 |
- |
- |
- |
- |
20,560 |
21,050 | |||||||||||
Allowance for doubtful accounts |
- |
- |
- |
- |
41,822 |
39,372 |
- |
- |
- |
- |
41,822 |
39,372 | |||||||||||
Leases and rentals |
6,917 |
13,521 |
- |
- |
- |
(189) |
7,757 |
4,722 |
- |
- |
14,674 |
18,054 | |||||||||||
Publicity and advertising |
1 |
126 |
- |
- |
- |
- |
3,936 |
4,629 |
- |
- |
3,937 |
4,755 | |||||||||||
Legal, judicial and indemnities |
- |
- |
- |
- |
- |
- |
31,467 |
58,504 |
- |
- |
31,467 |
58,504 | |||||||||||
Donations, contributions and subsidies |
21 |
29 |
- |
- |
- |
- |
1,040 |
1,430 |
- |
- |
1,061 |
1,459 | |||||||||||
Gain (loss) on disposal, retirement and other noncurrent assets |
- |
- |
- |
- |
- |
- |
- |
- |
21,512 |
35,508 |
21,512 |
35,508 | |||||||||||
Amortization of concession intangible asset |
- |
- |
- |
- |
- |
- |
- |
- |
71,287 |
72,116 |
71,287 |
72,116 | |||||||||||
Amotization of the risk premium paid -GSF |
3,147 |
2,398 |
- |
- |
- |
- |
- |
- |
- |
- |
3,147 |
2,398 | |||||||||||
Fee for the use of water |
2,085 |
2,698 |
- |
- |
- |
- |
- |
- |
- |
- |
2,085 |
2,698 | |||||||||||
Others |
328 |
15,252 |
(2) |
1 |
(1,304) |
(623) |
3,433 |
4,486 |
(5) |
(98) |
2,450 |
19,018 | |||||||||||
Total |
672,530 |
689,687 |
370,642 |
466,106 |
148,412 |
142,565 |
236,112 |
255,226 |
92,794 |
107,526 |
1,520,490 |
1,661,110 | |||||||||||
1st semester | |||||||||||||||||||||||
|
|
|
|
|
Operating Expenses |
|
| ||||||||||||||||
Operating costs |
Services Rendered to Third Parties |
Sales |
General |
Other |
Total | ||||||||||||||||||
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
2018 |
2017 |
2018 |
2017 | ||||||||||||
Personnel |
442,487 |
421,484 |
- |
1 |
83,267 |
85,583 |
164,378 |
162,093 |
- |
- |
690,132 |
669,161 | |||||||||||
Private Pension Plans |
44,955 |
56,944 |
- |
- |
- |
- |
- |
- |
- |
- |
44,955 |
56,944 | |||||||||||
Materials |
110,131 |
99,595 |
353 |
298 |
3,924 |
4,737 |
11,571 |
7,927 |
- |
- |
125,979 |
112,557 | |||||||||||
Third party services |
103,506 |
138,835 |
1,047 |
784 |
79,740 |
83,397 |
152,360 |
151,373 |
- |
- |
336,653 |
374,389 | |||||||||||
Depreciation and amortization |
615,737 |
561,636 |
- |
- |
2,096 |
2,841 |
43,337 |
48,970 |
- |
- |
661,170 |
613,447 | |||||||||||
Costs of infrastructure construction |
- |
- |
740,606 |
880,293 |
- |
- |
- |
- |
- |
- |
740,606 |
880,293 | |||||||||||
Others |
25,646 |
77,976 |
(3) |
(3) |
108,025 |
115,224 |
68,341 |
146,428 |
189,326 |
193,346 |
391,335 |
532,971 | |||||||||||
Collection fees |
- |
5,826 |
- |
- |
40,666 |
34,045 |
- |
- |
- |
- |
40,666 |
39,871 | |||||||||||
Allowance for doubtful accounts |
- |
- |
- |
- |
68,242 |
86,068 |
- |
- |
- |
- |
68,242 |
86,068 | |||||||||||
Leases and rentals |
21,365 |
25,875 |
- |
- |
- |
(161) |
11,104 |
9,357 |
- |
- |
32,469 |
35,071 | |||||||||||
Publicity and advertising |
1 |
127 |
- |
- |
- |
- |
6,202 |
7,513 |
- |
- |
6,203 |
7,640 | |||||||||||
Legal, judicial and indemnities |
- |
- |
- |
- |
- |
- |
43,751 |
113,623 |
- |
- |
43,751 |
113,623 | |||||||||||
Donations, contributions and subsidies |
34 |
53 |
- |
- |
- |
2 |
2,168 |
2,558 |
- |
- |
2,202 |
2,613 | |||||||||||
Gain (loss) on disposal, retirement and other noncurrent assets |
- |
- |
- |
- |
- |
- |
- |
- |
52,410 |
49,275 |
52,410 |
49,275 | |||||||||||
Amortization of concession intangible asset |
- |
- |
- |
- |
- |
- |
- |
- |
142,795 |
144,232 |
142,795 |
144,232 | |||||||||||
Amotization of the risk premium paid -GSF |
5,546 |
4,797 |
- |
- |
- |
- |
- |
- |
- |
- |
5,546 |
4,797 | |||||||||||
Fee for the use of water |
4,278 |
4,963 |
- |
- |
- |
- |
- |
- |
- |
- |
4,278 |
4,963 | |||||||||||
Impairment reversal |
- |
- |
- |
- |
- |
- |
- |
- |
(5,837) |
- |
(5,837) |
- | |||||||||||
Others |
(5,578) |
36,336 |
(3) |
(3) |
(883) |
(4,731) |
5,117 |
13,376 |
(42) |
(161) |
(1,389) |
44,817 | |||||||||||
Total |
1,342,462 |
1,356,470 |
742,003 |
881,373 |
277,051 |
291,782 |
439,987 |
516,790 |
189,326 |
193,346 |
2,990,829 |
3,239,762 |
74
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
( 28 ) FINANCE INCOME (COSTS)
Consolidated | ||||||||
2nd quarter 2018 |
1st semester 2018 |
2nd quarter 2017 |
1st semester 2017 | |||||
Financial income |
||||||||
Income from financial investments |
54,420 |
120,806 |
129,272 |
289,476 | ||||
Late payment interest and fines |
63,410 |
132,933 |
69,401 |
142,835 | ||||
Adjustment for inflation of tax credits |
2,221 |
4,762 |
2,429 |
4,955 | ||||
Adjustment for inflation of escrow deposits |
9,002 |
17,806 |
12,826 |
26,063 | ||||
Adjustment for inflation and exchange rate changes |
6,366 |
29,108 |
(1,129) |
29,278 | ||||
Discount on purchase of ICMS credit |
12,263 |
18,995 |
2,859 |
5,781 | ||||
Adjustments to the sector financial asset (note 8) |
14,711 |
21,815 |
1,105 |
1,105 | ||||
PIS and COFINS on other finance income |
(11,190) |
(22,857) |
(12,549) |
(27,208) | ||||
Others |
17,876 |
42,862 |
18,418 |
31,059 | ||||
Total |
169,078 |
366,230 |
222,632 |
503,343 | ||||
Finance costs |
||||||||
Interest on debts |
(338,288) |
(681,520) |
(442,466) |
(927,761) | ||||
Adjustment for inflation and exchange rate changes |
(43,593) |
(162,725) |
(154,436) |
(338,043) | ||||
(-) Capitalized interest |
6,600 |
12,809 |
10,002 |
34,159 | ||||
Adjustments to the sector financial liability ( note 8) |
2,142 |
(2,521) |
(23,215) |
(50,390) | ||||
Use of public asset |
(4,693) |
(8,495) |
(243) |
(3,630) | ||||
Others |
(36,919) |
(76,971) |
(30,440) |
(71,985) | ||||
Total |
(414,752) |
(919,423) |
(640,799) |
(1,357,649) | ||||
Finance expense, net |
(245,674) |
(553,193) |
(418,168) |
(854,306) |
Interests were capitalized at an average rate of 8.05% p.a. in the 1st semester of 2018 (9.63% p.a. in the 1st semester of 2017) on qualifying assets, in accordance with CPC 20 (R1) and IAS 23.
In line item of adjustment for inflation and exchange rate changes, the expense includes the effects of gains of R$ 622,591 in the 1st semester of 2018 (loss of R$ 98,826 in the 1st semester of 2017) on derivative instruments (note 32).
( 29 ) SEGMENT INFORMATION
The segregation of the Group’s operating segments is based on the internal financial information and management structure and is made by type of business: electric energy distribution, electric energy generation (conventional and renewable sources), electric energy commercialization and services rendered activities.
Profit or loss, assets and liabilities per segment include items directly attributable to the segment, as well as those that can be allocated on a reasonable basis, if applicable. Prices charged between segments are determined based on similar market transactions. Note 1 presents the subsidiaries according to their areas of operation and provides further information on each subsidiary and its business line and segment.
As of 2018, due to the way the Group’s new management monitors the segment results, intangible assets acquired in business combination that were previously allocated to the respective segments started to be presented in the parent company in which it is recorded, in the segment “Others.” In order to keep the comparability, 2017’ information are been disclosed in the same criteria.
The information segregated by segment is presented below, according to the criteria established by the Group’s officers:
75
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
1st semester 2018 |
Distribution |
Generation |
Generation |
Commercialization |
Services |
Total |
Other (*) |
Elimination |
Total | ||||||||
Net operating revenue |
10,838,134 |
325,196 |
576,707 |
1,551,720 |
28,263 |
13,320,020 |
- |
- |
13,320,021 | ||||||||
(-) Intersegment revenues |
3,806 |
226,771 |
221,877 |
1,161 |
211,026 |
664,641 |
- |
(664,641) |
- | ||||||||
Cost of electric energy |
(7,324,255) |
(35,434) |
(152,444) |
(1,491,474) |
- |
(9,003,608) |
- |
451,850 |
(8,551,758) | ||||||||
Operating costs and expenses |
(1,957,792) |
(47,032) |
(162,596) |
(22,718) |
(191,774) |
(2,381,912) |
(17,745) |
212,791 |
(2,186,864) | ||||||||
Depreciation and amortization |
(387,734) |
(60,270) |
(312,173) |
(1,222) |
(11,111) |
(772,510) |
(31,455) |
- |
(803,965) | ||||||||
Income from electric energy service |
1,172,159 |
409,232 |
171,371 |
37,467 |
36,403 |
1,826,632 |
(49,199) |
- |
1,777,432 | ||||||||
Equity |
- |
154,102 |
- |
- |
- |
154,102 |
- |
- |
154,102 | ||||||||
Finance income |
258,664 |
36,609 |
60,012 |
18,037 |
3,221 |
376,544 |
7,471 |
(17,785) |
366,230 | ||||||||
Finance expenses |
(409,983) |
(179,439) |
(308,345) |
(30,130) |
(3,912) |
(931,809) |
(5,399) |
17,785 |
(919,423) | ||||||||
Profit (loss) before taxes |
1,020,839 |
420,505 |
(76,962) |
25,375 |
35,712 |
1,425,469 |
(47,128) |
- |
1,378,341 | ||||||||
Income tax and social contribution |
(376,607) |
(83,454) |
(32,099) |
(9,570) |
(9,100) |
(510,830) |
2,071 |
- |
(508,760) | ||||||||
Profit (loss) for the year |
644,232 |
337,051 |
(109,061) |
15,805 |
26,612 |
914,638 |
(45,057) |
- |
869,581 | ||||||||
Total assets |
22,906,327 |
6,921,247 |
12,609,275 |
1,358,830 |
433,969 |
44,229,647 |
9,467,801 |
(11,989,197) |
41,708,250 | ||||||||
Purchases of PP&E and intangible assets |
712,446 |
3,599 |
104,313 |
1,328 |
25,697 |
847,383 |
275 |
- |
847,658 | ||||||||
1st semester 2017(**) |
Distribution |
Generation |
Generation |
Commercialization |
Services |
Total |
Other (*) |
Elimination |
Total | ||||||||
Net operating revenue |
9,191,030 |
372,470 |
530,684 |
1,379,025 |
26,837 |
11,500,047 |
1,280 |
- |
11,501,327 | ||||||||
(-) Intersegment revenues |
4,542 |
216,643 |
252,322 |
4,832 |
191,613 |
669,952 |
- |
(669,952) |
- | ||||||||
Cost of electric energy |
(5,960,877) |
(50,053) |
(140,620) |
(1,287,067) |
- |
(7,438,617) |
- |
479,447 |
(6,959,171) | ||||||||
Operating costs and expenses |
(2,156,432) |
(98,679) |
(182,918) |
(21,484) |
(178,345) |
(2,637,858) |
(34,729) |
190,506 |
(2,482,082) | ||||||||
Depreciation and amortization |
(349,601) |
(60,197) |
(303,694) |
(1,697) |
(9,250) |
(724,438) |
(33,243) |
- |
(757,679) | ||||||||
Income from electric energy service |
728,661 |
380,185 |
155,775 |
73,610 |
30,856 |
1,369,087 |
(66,692) |
- |
1,302,395 | ||||||||
Equity |
- |
162,678 |
- |
- |
- |
162,678 |
- |
- |
162,678 | ||||||||
Finance income |
340,430 |
64,966 |
71,740 |
12,493 |
4,587 |
494,216 |
15,882 |
(6,755) |
503,343 | ||||||||
Finance expenses |
(687,598) |
(267,948) |
(327,926) |
(33,122) |
(2,736) |
(1,319,330) |
(45,074) |
6,755 |
(1,357,649) | ||||||||
Profit (loss) before taxes |
381,493 |
339,883 |
(100,412) |
52,982 |
32,706 |
706,652 |
(95,884) |
- |
610,767 | ||||||||
Income tax and social contribution |
(157,974) |
(58,682) |
(26,033) |
(17,850) |
(7,660) |
(268,200) |
12,727 |
- |
(255,474) | ||||||||
Profit (loss) for the year |
223,519 |
281,201 |
(126,445) |
35,132 |
25,046 |
438,452 |
(83,157) |
- |
355,293 | ||||||||
Total assets |
22,040,918 |
7,113,427 |
12,856,002 |
1,378,814 |
454,961 |
43,844,122 |
9,103,854 |
(11,665,064) |
41,282,912 | ||||||||
Purchases of PP&E and intangible assets |
787,630 |
1,736 |
521,117 |
1,501 |
26,115 |
1,338,099 |
653 |
- |
1,338,752 |
(*) Others – refer basically to assets and transactions which are not related to any of the identified segments. Of total assets, the amount of R$9,241,583 reffers to the investment of CPFL Energia in the subsidiaries ( R$ 8,557,673 in December 31, 2017).
(**)For total assets, the balances refer to December 31, 2017.
( 30 ) RELATED PARTY TRANSACTIONS
The Company’s controlling shareholders are as follows:
· State Grid Brazil Power Participações S.A.
Indirect subsidiary of State Grid Corporation of China, a Chinese state-owned company primarily engaged in developing and operating businesses in the electric energy sector.
· ESC Energia S.A.
Subsidiary of State Grid Brazil Power Participações S.A.
The direct and indirect interests in operating subsidiaries are described in note 1.
Controlling shareholders, subsidiaries, associates, joint ventures and entities under common control and that in some way exercise significant influence over the Company and its subsidiaries and associates were considered as related parties.
The main transactions are disclosed in note 30 to the financial statements for the year ended December 31, 2017:
To ensure that the trading transactions with related parties are conducted under usual market conditions, the Group set up a “Related Parties Committee”, comprising representatives of the controlling shareholders, of the Company and an independent member, which analyzes the main transactions with related parties.
The total compensation of key management personnel in the 1st semester of 2018, in accordance with CVM Decision 560/2008, was R$ 40,978 (R$ 38,222 in the 1st semester of 2017). This amount comprises R$ 40,052 (R$ 37,517 in the 1st semester of 2017) in respect of short-term benefits and R$ 982 (R$ 579 in the 1st semester of 2017) of post-employment benefits, and a recovery of R$ 56 of expenses related to other long-term benefits ( R$ 26 in the 1st semester) .
Transactions with entities under common control basically refers to transmission system charge paid by the Company’s subsidiaries to the direct or indirect subsidiaries of State Grid Corporation of China.
76
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Transactions involving controlling shareholders, entities under common control or significant influence and joint ventures:
Consolidated | |||||||||||||||
Asset |
Liability |
Income |
Expense | ||||||||||||
June 30, 2018 |
|
December 31, 2017 |
June 30, 2018 |
|
December 31, 2017 |
1st semester 2018 |
1st semester 2017 |
1st semester 2018 |
1st semester 2017 | ||||||
Advances |
|||||||||||||||
BAESA – Energética Barra Grande S.A. |
- |
- |
674 |
691 |
- |
- |
- |
- | |||||||
Foz do Chapecó Energia S.A. |
- |
- |
955 |
979 |
- |
- |
- |
- | |||||||
ENERCAN - Campos Novos Energia S.A. |
- |
- |
1,183 |
1,212 |
- |
- |
- |
- | |||||||
EPASA - Centrais Elétricas da Paraiba |
- |
- |
429 |
440 |
- |
- |
- |
- | |||||||
Energy purchases and sales, and charges |
|||||||||||||||
Entities under common control (State Grid Corporation of China' subsidiaries) |
- |
- |
- |
13,330 |
- |
- |
73,441 |
41,646 | |||||||
BAESA – Energética Barra Grande S.A. |
- |
- |
6,959 |
13,169 |
- |
- |
10,520 |
26,323 | |||||||
Foz do Chapecó Energia S.A. |
- |
38,155 |
37,415 |
- |
- |
217,961 |
187,693 | ||||||||
ENERCAN - Campos Novos Energia S.A. |
816 |
823 |
51,844 |
51,381 |
5,245 |
4,360 |
152,517 |
140,010 | |||||||
EPASA - Centrais Elétricas da Paraiba |
- |
- |
7,985 |
19,458 |
- |
- |
52,062 |
53,447 | |||||||
Intangible assets, property, plant and equipment, materials and services rendered |
|||||||||||||||
BAESA – Energética Barra Grande S.A. |
3 |
153 |
- |
- |
810 |
777 |
- |
- | |||||||
Foz do Chapecó Energia S.A. |
2 |
2 |
- |
- |
887 |
781 |
- |
- | |||||||
ENERCAN - Campos Novos Energia S.A. |
139 |
152 |
- |
- |
8 |
820 |
- |
- | |||||||
EPASA - Centrais Elétricas da Paraíba S.A. |
556 |
416 |
- |
- |
150 |
(619) |
- |
- | |||||||
Intragroup loans |
|||||||||||||||
EPASA - Centrais Elétricas da Paraíba S.A. |
- |
- |
- |
- |
1 |
327 |
- |
- | |||||||
Dividends and interest on capital |
- |
- |
- | ||||||||||||
BAESA – Energética Barra Grande S.A. |
108 |
108 |
- |
- |
- |
- |
- |
- | |||||||
Chapecoense Geração S.A. |
100,829 |
32,734 |
- |
- |
- |
- |
- |
- | |||||||
ENERCAN - Campos Novos Energia S.A. |
50,649 |
21,184 |
- |
- |
- |
- |
- |
- | |||||||
Others |
|||||||||||||||
Instituto CPFL |
- |
- |
92 |
- |
- |
- |
2,638 |
2,137 |
( 31 ) RISK MANAGEMENT
The risk management structure and the main risk factors that affect the Group’s business are disclosed in note 32 to the financial statements for the year ended December 31, 2017.
( 32 ) FINANCIAL INSTRUMENTS
The main financial instruments, at fair value and/or the carrying amount is significantly different of the respective fair value, classified in accordance with the Group’s accounting practices, are:
Consolidated | ||||||||||
June 30, 2018 | ||||||||||
Note |
Category |
Measurement |
Level (*) |
Carrying amount |
|
Fair value | ||||
Assets |
||||||||||
Cash and cash equivalent |
5 |
(a) |
(2) |
Level 1 |
1,072,878 |
1,072,878 | ||||
Cash and cash equivalent |
5 |
(a) |
(2) |
Level 2 |
1,417,357 |
1,417,357 | ||||
Derivatives |
32 |
(a) |
(2) |
Level 2 |
795,396 |
795,396 | ||||
Derivatives - Zero-cost collar |
32 |
(a) |
(2) |
Level 3 |
24,664 |
24,664 | ||||
Concession financial asset - distribution |
10 |
(a) |
(2) |
Level 3 |
6,833,557 |
6,833,557 | ||||
10,143,852 |
10,143,852 | |||||||||
Liabilities |
||||||||||
Borrowings - principal and interest |
16 |
(b) |
(1) |
Level 2 (***) |
5,279,330 |
5,160,739 | ||||
Borrowings - principal and interest (**) |
16 |
(a) |
(2) |
Level 2 |
5,389,481 |
5,389,481 | ||||
Debentures - Principal and interest |
17 |
(b) |
(1) |
Level 2 (***) |
9,977,127 |
9,929,824 | ||||
Derivatives |
32 |
(a) |
(2) |
Level 2 |
12,757 |
12,757 | ||||
20,658,695 |
20,492,801 | |||||||||
(*) Refers to the hierarchy for fair value measurement |
||||||||||
(**) As a result of the initial designation of this financial liability, the consolidated balances reported a gain of R$ 5,808 in the 1st semester of 2018 (a loss of R$ 65,817 in the 1st semester of 2017). | ||||||||||
(***) Only for disclosure purposes, in accordance with CPC 40 (R1) / IFRS 7 |
||||||||||
Key |
||||||||||
Category: |
Measurement: |
|||||||||
(a) - Measured at fair value through profit or loss |
(1) - Measured at amortized cost |
|||||||||
(b) - Other financial liabilities |
(2) - Measured at fair value |
The financial instruments for which the carrying amounts approximate the fair values, due to their nature, at the end of the reporting period are:
77
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
· |
Financial assets: (i) consumers, concessionaires and licensees, (ii) leases, (iii) intercompany loans between associates, subsidiaries and parent company, (iv) receivables – CDE, (v) concession financial asset – transmission companies, (vi) pledges, funds and restricted deposits, (vii) services rendered to third parties, (viii) collection agreements and (ix) sector financial asset; | |
· |
Financial liabilities: (i) trade payables, (ii) regulatory charges, (iii) use of public asset, (iv) consumers and concessionaires, (v) FNDCT/EPE/PROCEL, (vi) collection agreement, (vii) reversal fund, (viii) payables for business combination, (ix) tariff discounts – CDE and (x) sector financial liability. |
In addition, in the 1st semester of 2018 there were no transfers between the fair value hierarchy levels.
a) Measurement of financial instruments
As mentioned in note 4, the fair value of a security corresponds to its maturity value (redemption value) adjusted to present value by the discount factor (relating to the maturity date of the security) obtained from the market interest curve, in Brazilian reais.
CPC 40 (R1) and IFRS 7 require the classification into a three-level hierarchy for fair value measurement of financial instruments, based on observable and unobservable inputs related to the measurement of a financial instrument at the measurement date.
CPC 40 (R1) and IFRS 7 also define observable inputs as market data obtained from independent sources and unobservable inputs as those that reflect market assumptions.
The three levels of the fair value hierarchy are:
Level 1: Quoted prices in an active market for identical instruments;
Level 2: Observable inputs other than quoted prices in an active market that are observable for the asset or liability, directly (i.e. as prices) or indirectly (i.e. derived from prices);
Level 3: Instruments whose relevant factors are not observable market inputs.
As the distribution concessionaries classified the respective concession financial assets as fair value through profit or loss, the relevant factors for fair value measurement are not publicly observable. Therefore, the fair value hierarchy classification is level 3. The movements and respective gains (losses) in profit for or loss at the 1st semester are R$ 206,875 (R$ 84,057 in the 1st semester of 2017) and the main assumptions are described in note 10.
Additionally, the main assumptions used in the fair value measurement of the zero-cost collar derivative, the fair value hierarchy of which is Level 3, are disclosed in note 32 b.1.
The Company recognizes in “Investments at cost” in the interim financial statements the 5.94% interest held by the indirect subsidiary Paulista Lajeado Energia S.A. in the total capital of Investco S.A. (“Investco”), in the form of 28,154,140 common shares and 18,593,070 preferred shares. As Investco’s shares are not traded on the stock exchange and the main objective of its operations is to generate electric energy for commercialization by the shareholders holding the concession, the Company opted to recognize the investment at cost.
b) Derivatives
The Group has the policy of using derivatives to hedge against the risks of fluctuations in exchange and interest rates, without any speculative purposes. The Group has currency hedges in a volume compatible with the net exchange exposure, including all assets and liabilities tied to exchange rate changes.
The hedging instruments entered into by the Group are currency or interest rate swaps with no leverage component, margin call requirements or daily or periodic adjustments. Furthermore, in 2015 the subsidiary CPFL Geração contracted a zero-cost collar derivative (see item b.1 below).
As a large part of the derivatives entered into by the subsidiaries have their terms fully aligned with the hedged debts, and in order to obtain more relevant and consistent accounting information through the recognition of income and expenses, these debts were designated for the accounting recognition at fair value (note 16). Other debts that have terms different from the derivatives contracted as a hedge continue to be recognized at amortized cost. Furthermore, the Group did not adopt hedge accounting for transactions with derivative instruments.
78
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
At June 30, 2018, the Group had the following swap transactions, all traded on the over-the-counter market:
Fair values (carrying amounts) |
||||||||||||||||||
Strategy |
Assets |
Liabilities |
Fair value, net |
Values at cost, net (1) |
Gain (loss) on mark to market |
Currency / debt index |
Currency /swap index |
Maturity range |
Notional | |||||||||
Derivatives to hedge debts designated at fair value |
||||||||||||||||||
Exchange rate hedge |
||||||||||||||||||
Bank Loans - Law 4.131 |
768,169 |
- |
768,169 |
808,998 |
(40,829) |
US$ + of 2.00% to 4.82% |
104% to 116% of CDI |
Aug-18 to Mar-22 |
4,140,121 | |||||||||
Bank Loans - Law 4.131 |
4,869 |
(1,443) |
3,426 |
11,311 |
(7,885) |
EUR + 0.48% to 0.94% |
102% to 106% of CDI |
Apr-19 to Jun-21 |
456,000 | |||||||||
773,038 |
(1,443) |
771,595 |
820,309 |
(48,714) |
||||||||||||||
Derivatives to hedge debts not designated at fair value |
||||||||||||||||||
Price index hedge |
||||||||||||||||||
Debentures |
21,988 |
- |
21,988 |
19,154 |
2,833 |
IPCA + 5.86% |
100% of CDI |
Apr-19 |
70,469 | |||||||||
Interest rate hedge |
||||||||||||||||||
Debentures |
370 |
(3,314) |
(2,944) |
(5,115) |
2,171 |
CDI |
interest of 6.61% to 7.65% |
2019 |
4,964,409 | |||||||||
Bank Loans - Law 4.131 |
- |
(8,000) |
(8,000) |
(6,450) |
(1,550) |
CDI |
interest of 6.91% to 8.02% |
2019 |
3,697,103 | |||||||||
370 |
(11,314) |
(10,944) |
(11,565) |
621 |
||||||||||||||
Other (2): |
||||||||||||||||||
Zero cost collar |
24,664 |
- |
24,664 |
4,568 |
20,096 |
US$ |
(note 32 b.1) |
Jul-18 to Sep-20 |
58,402 | |||||||||
Total |
820,060 |
(12,757) |
807,302 |
832,466 |
(25,164) |
|||||||||||||
Current |
449,475 |
(11,314) |
||||||||||||||||
Noncurrent |
370,585 |
(1,443) |
For further details on terms and information on debts and debentures, see notes 16 and 17
(1)The value at cost are the derivative amount without the respective mark to market, while the notional refers to the balance of the debt and reduces according to the amortization of the debt;
(2) Due to the characteristics of this derivative (zero-cost collar), the notional amount is presented in U.S. dollar.
Consolidated | ||||||||
As of December 31, 2017 |
Interest, inflation adjustment, exchange rate and MTM |
Repayment |
As of June 30, 2018 | |||||
Derivatives |
||||||||
To hedge debts designated at fair value |
526,148 |
648,012 |
(353,851) |
820,309 | ||||
To hedge debts not designated at fair value |
17,881 |
(5,392) |
(4,899) |
7,590 | ||||
Other (zero cost collar) |
- |
11,253 |
(6,685) |
4,568 | ||||
Mark to market (*) |
9,095 |
(34,259) |
- |
(25,164) | ||||
553,124 |
619,614 |
(365,435) |
807,303 | |||||
(*)The effects on the income and comprehensive income of 2018 related to the fair value adjustments (MTM) of the derivatives are: (i) gain of R$ 2,431 for the debts designated at fair value, (ii) a loss of R$ 4,728 for non- designated at fair value and (iii) loss of R$ 31,962 for other derivatives (zero cost collar).
As mentioned above, certain subsidiaries elected to mark to market debts for which they have fully debt-related derivatives instruments (note 16).
The Group has recognized gains and losses on their derivatives. However, as these derivatives are used as a hedging instrument, these gains and losses minimized the impacts of fluctuations in exchange and interest rates on the hedged debts. For the quarters and semesters ended at June 30, 2018 and 2017, the derivatives generated the following impacts on the consolidated profit or loss, recognized in the line item of Finance costs on adjustment for inflation and exchange rate changes and in the consolidated comprehensive income in the credit risk in the market to market.
79
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Gain (Loss) on income |
Gain (Loss) in comprehensive income | |||||||||||
Hedged risk / transaction |
2nd Quarter 2018 |
1st Semester 2018 |
2nd Quarter 2017 |
1st Semester 2017 |
2nd Quarter 2018 |
1st Semester 2018 | ||||||
Interest rate variation |
(8,370) |
(5,392) |
(20) |
(492) |
- |
- | ||||||
Mark to Market |
38,089 |
(4,428) |
2,243 |
5,347 |
(344) |
(380) | ||||||
Exchange variation |
655,532 |
659,264 |
213,265 |
(119,056) |
- |
- | ||||||
Mark to Market |
(79,188) |
(26,853) |
(23,432) |
15,504 |
(2,399) |
(2,371) | ||||||
606,063 |
622,591 |
192,056 |
(98,697) |
(2,743) |
(2,751) | |||||||
b.1) Zero-cost collar derivative transactions entered into by CPFL Geração
In 2015, the subsidiary CPFL Geração entered into a transaction involving put options and call options in US$, both having the same institution as counterpart, and that combined are featured as a transaction usually known as zero-cost collar. Entering into this transaction does not have any speculative purpose, inasmuch as it is aimed at minimizing any negative impacts on future revenue of the joint venture ENERCAN, which has electric energy sale agreements with annual adjustment of part of the tariff based on the dollar variation. In addition, according to Management’s view, the scenario in 2015 was favorable to enter into this type of financial instrument, considering the high volatility implicit in dollar options and the fact that there is no initial cost for this type of transaction.
The total amount contracted was US$ 111,817, with due dates between October 1, 2015 and September 30, 2020. At June 30, 2018, the total amount contracted was US$ 58,402, considering the options already settled until this date. The strike prices of the dollar options vary from R$ 4.20 to R$ 4.40 for put options and from R$ 5.40 to R$7.50 for call options.
These options were measured at fair value in a recurring manner, as required by IFRS 9 /CPC 48. The fair value of the options that are part of this transaction was calculated based on the following assumptions:
Valuation technique(s) and key information |
We used the Black Scholes Option Pricing Model, which aims to obtain the fair price of the options involving the following variables: value of the asset, strike price of the option, interest rate, term and volatility. |
Significant unobservable inputs |
Volatility determined based on the average market pricing calculations, future dollar and other variables applicable to this specific transaction, with average variation of 20.81%. |
Relationship between unobservable inputs and fair value (sensitivity) |
A slight rise in long-term volatility, analyzed separately, would result in an insignificant increase in fair value. If the volatility were 10% higher and all the other variables remained constant, the net carrying amount (asset) would increase by R$ 644, resulting in a net asset of R$ 25,307. |
The following table reconciles the opening and closing balances of the call and put options for the 1st semester of 2018, as required by IFRS 13/CPC 46:
Consolidated | ||||||
Asset |
Liability |
Net | ||||
As of December 31, 2017 |
52,058 |
- |
52,058 | |||
Measurement at fair value |
(20,709) |
- |
(20,709) | |||
Net cash of settlement flows |
(6,685) |
- |
(6,685) | |||
As of June 30, 2018 |
24,664 |
- |
24,664 |
80
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
The fair value measurement of these financial instruments was recognized as finance income (expense) of the period, and no effects were recognized in other comprehensive income.
c) Sensitivity analysis
In compliance with CVM Instruction No. 475/2008, the Group performed sensitivity analyses of the main risks to which their financial instruments (including derivatives) are exposed, mainly comprising changes in exchange and interest rates.
When the risk exposure is considered asset, the risk to be taken into account is a reduction in the pegged indexes, due to a consequent negative impact on the Group’s profit or loss. Similarly, if the risk exposure is considered liability, the risk is of an increase in the pegged indexes and the consequent negative effect on the profit or loss. The Group therefore quantify the risks in terms of the net exposure of the variables (dollar, euro, CDI, IGP-M, IPCA, TJLP and SELIC), as shown below:
c.1) Changes in exchange rates
Considering that the net exchange rate exposure at June 30, 2018 is maintained, the simulation of the effects by type of financial instrument for three different scenarios would be:
Consolidated | ||||||||||
Decrease (increase) in P&L | ||||||||||
Instruments |
Exposure (a) |
Risk |
Exchange appreciation / depreciation (b) |
Currency appreciation / depreciation of 25% (c) |
Currency appreciation / depreciation of 50% (c) | |||||
Financial liability instruments |
(4,923,196) |
(185,779) |
1,091,465 |
2,368,709 | ||||||
Derivatives - Plain Vanilla Swap |
4,992,635 |
188,399 |
(1,106,860) |
(2,402,118) | ||||||
69,439 |
drop in the dollar |
2,620 |
(15,395) |
(33,409) | ||||||
Financial liability instruments |
(469,735) |
(32,545) |
(158,115) |
(283,685) | ||||||
Derivatives - Plain Vanilla Swap |
467,198 |
32,369 |
157,261 |
282,153 | ||||||
(2,537) |
raise in the euro |
(176) |
(854) |
(1,532) | ||||||
Total |
66,902 |
2,444 |
(16,249) |
(34,941) | ||||||
Effects in comprehensive income of the period |
1,385 |
(3,759) |
(8,903) | |||||||
Effects in the income of the period |
1,059 |
(12,490) |
(26,038) | |||||||
Decrease (increase) in P&L - R$ thousand | ||||||||||
Instruments |
Exposure |
Risk |
Exchange depreciation (b) |
Currency depreciation of 25% (c) |
Currency depreciation of 50% (c) | |||||
Derivatives zero-cost collar |
58,402 |
(d) |
raise in the dollar |
(2,223) |
(20,096) |
(37,970) |
(a) The exchange rate considered at 06/30/2018 was R$ 3.86 per US$ 1.00 and R$ 4.50 per €$ 1.00.
(b) As per the exchange rate curves obtained from information made available by B3 S.A., with the exchange rate being considered at R$ 4.00 and 4.82, and the currency depreciation at 3.77% and 6.93% for US$ and €$, respectively at 06/30/2018.
(c) As required by CVM Instruction No. 475/2008, the percentage increases in the ratios applied refer to the information made available by the B3 S.A..
(d) Owing to the characteristics of this derivative (zero-cost collar), the notional amount is presented in US$.
Except for the zero-cost collar, as the net exchange exposure of the dollar for the other derivative instruments is an asset, the risk is a drop in the dollar, therefore, the exchange rate is appreciated by 25% and 50% in relation to the probable exchange rate.
81
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
c.2) Changes in interest rates
Assuming thatthe scenario of net exposure of the financial instruments indexed to floating interest rates at June 30, 2018 is maintained, the net finance cost for the next 12 months for each ofthe three scenarios defined, would be:
Consolidated | ||||||||||||||
Income (expense) in P&L | ||||||||||||||
Instruments |
Exposure |
Risk |
Period rate |
Probable scenario rate (a) |
Probable scenario |
Raising/Drop index by 25% (b) |
Raising/Drop index by 50% (b) | |||||||
Financial asset instruments |
3,305,700 |
247,928 |
309,909 |
371,891 | ||||||||||
Financial liability instruments |
(8,986,987) |
(674,024) |
(842,530) |
(1,011,036) | ||||||||||
Derivatives - Plain Vanilla Swap |
4,153,324 |
311,499 |
389,374 |
467,249 | ||||||||||
(1,527,963) |
CDI apprec. |
7.37% |
7.50% |
(114,597) |
(143,247) |
(171,896) | ||||||||
Financial liability instruments |
(54,614) |
(2,223) |
(2,778) |
(3,334) | ||||||||||
(54,614) |
IGP-M apprec. |
6.92% |
4.07% |
(2,223) |
(2,778) |
(3,334) | ||||||||
Financial liability instruments |
(3,819,035) |
(252,056) |
(315,070) |
(378,084) | ||||||||||
(3,819,035) |
TJLP apprec. |
6.60% |
6.60% |
(252,056) |
(315,070) |
(378,084) | ||||||||
Financial liability instruments |
(1,343,307) |
(65,956) |
(49,467) |
(32,978) | ||||||||||
Derivatives - Plain Vanilla Swap |
93,156 |
4,574 |
3,430 |
2,287 | ||||||||||
Concession financial asset |
7,076,268 |
347,445 |
260,584 |
173,722 | ||||||||||
5,826,117 |
drop in the IPCA |
4.37% |
4.91% |
286,063 |
214,547 |
143,031 | ||||||||
Sectorial financial assets and liabilities |
1,093,541 |
83,109 |
62,332 |
41,555 | ||||||||||
Financial liability instruments |
(127,638) |
(9,700) |
(7,275) |
(4,850) | ||||||||||
965,903 |
drop in the SELIC |
7.18% |
7.60% |
73,409 |
55,057 |
36,705 | ||||||||
Total |
1,390,408 |
(9,404) |
(191,491) |
(373,578) | ||||||||||
Effects in accumulated comprehensive income |
13 |
14 |
15 | |||||||||||
Effects in the income of the period |
(9,417) |
(191,505) |
(373,593) |
(a) The indexes were obtained from information available in the market.
(b) As required by CVM Instruction 475/2008, the percentages of increase were applied to the indexes in the probable scenario.
Additionally, the debts exposed to pre-fixed indexes would generate an expense of R$ 673,940.
( 33 ) NON-CASH TRANSACTIONS
|
Consolidated | ||
|
June 30, 2018 |
June 30, 2017 | |
Other transactions |
|
|
|
Interest capitalized in property, plant and equipment |
5,082 |
|
25,098 |
Interest capitalized in concession intangible asset - distribution infrastructures |
7,726 |
|
9,061 |
Reversal of provision for socio environmental costs capitalized in property, plant and equipment |
1,679 |
|
- |
Transfers between property, plant and equipment and other assets |
5,280 |
|
921 |
82
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Shareholders of CPFL Energia S/A holding more than 5% of the shares of the same type and class, as of June 30, 2018:
Shareholders |
Common shares |
Interest - % | ||
State Grid Brazil Power Participações Ltda. |
20 |
0.00 | ||
ESC Energia S.A. |
234,086,204 |
81.43 | ||
Other shareholders |
53,392,844 |
18.57 | ||
Total |
287,479,068 |
100.00 |
Quantity and characteristic of secutiries held by directly or indirectly Controlling Shareholders, Executive Officers, Board of Directors, Fiscal Council and Free Float, as of June 30, 2018 and December 31,2017:
June 30, 2018 |
December 31, 2017 | |||||||
Shareholders |
Common shares |
Interest - % |
Common shares |
Interest - % | ||||
Controlling shareholders |
964,521,902 |
94.75 |
964,521,902 |
94.75 | ||||
Administrator |
- |
- |
- |
- | ||||
Members of the Executive Officers |
189 |
0.00 |
189 |
0.00 | ||||
Members of the Board of Directors |
- |
- |
- |
- | ||||
Fiscal Council Members |
- |
- |
- |
- | ||||
Other shareholders |
53,392,655 |
5.25 |
53,392,655 |
5.25 | ||||
Total |
1,017,914,746 |
100.00 |
1,017,914,746 |
100.00 | ||||
Outstanding shares - free float |
53,392,655 |
5.25 |
53,392,655 |
5.25 |
SHAREHOLDING STRUCTURE |
2nd quarter of 2018 |
| |||||||||
CPFL ENERGIA S/A |
Per units shares |
Date of last change | |||||||||
# |
1 - SHAREHOLDERS OF THE COMPANY |
CNPJ or CPF |
Quotes/common shares |
% |
% Total |
Preferred shares |
% |
% Total |
TOTAL |
% Total |
|
|
Controlling shareholders |
|
964,521,902 |
94.75% |
100.00% |
- |
0.00% |
0.00% |
964,521,902 |
94.75% |
|
1.1 |
Esc Energia S.A. |
15.146.011/0001-51 |
234,086,204 |
23.00% |
100.00% |
- |
0.00% |
0.00% |
234,086,204 |
23.00% |
January 23, 2017 |
1.2 |
State Grid Brazil Power Participações Ltda. |
26.002.119/0001-97 |
730,435,698 |
71.76% |
100.00% |
- |
0.00% |
0.00% |
730,435,698 |
71.76% |
November 30, 2017 |
|
Noncontrolling shareholders |
|
53,392,844 |
5.25% |
100.00% |
- |
0.00% |
0.00% |
53,392,844 |
5.25% |
|
1.3 |
Board of Directors members |
07.341.926/001-90 |
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
November 30, 2017 |
1.4 |
Executive Office members |
|
189 |
0.00% |
100.00% |
- |
0.00% |
0.00% |
189 |
0.00% |
November 30, 2017 |
1.5 |
Other shareholders |
|
53,392,655 |
5.25% |
100.00% |
- |
0.00% |
0.00% |
53,392,655 |
5.25% |
|
|
Total |
|
1,017,914,746 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
1,017,914,746 |
100.00% |
|
|
2 - Entity: 1.1 Esc Energia S.A. |
CNPJ or CPF |
Quotes/common shares |
% |
% Total |
Preferred shares |
% |
% Total |
TOTAL |
% Total |
|
|
Controlling shareholders |
|
1,042,392,615 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
1,042,392,615 |
100.00% |
|
1.1.1 |
State Grid Brazil Power Participações Ltda. |
26.002.119/0001-97 |
1,042,392,615 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
1,042,392,615 |
100.00% |
January 23, 2017 |
|
Noncontrolling shareholders |
|
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
|
1.1.2 |
Other shareholders |
|
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
|
|
Total |
|
1,042,392,615 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
1,042,392,615 |
100.00% |
|
|
3 - Entity: 1.2 State Grid Brazil Power Participações S.A. |
CNPJ or CPF |
Quotes/common shares |
% |
% Total |
Preferred shares |
% |
% Total |
TOTAL |
% Total |
|
|
Controlling shareholders |
|
14,299,999,999 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
14,299,999,999 |
100.00% |
|
1.2.1 |
International Grid Holdings Limited |
|
14,299,999,999 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
14,299,999,999 |
100.00% |
July 31, 2017 |
|
Noncontrolling shareholders |
|
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
|
1.2.2 |
Top View Grid Investment Limited |
|
1 |
0.00% |
100.00% |
- |
0.00% |
0.00% |
1 |
0.00% |
July 31, 2017 |
1.2.3 |
Other shareholders |
|
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
|
|
Total |
|
14,299,999,999 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
14,299,999,999 |
100.00% |
|
|
4 - Entity: 1.2.1 International Grid Holdings Limited |
CNPJ or CPF |
Quotes/common shares |
% |
% Total |
Preferred shares |
% |
% Total |
TOTAL |
% Total |
|
|
Controlling shareholders |
|
1 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
1 |
100.00% |
|
1.2.1.1 |
State Grid International Development Limited |
|
1 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
1 |
100.00% |
July 31, 2017 |
|
Noncontrolling shareholders |
|
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
|
1.2.1.2 |
Other shareholders |
|
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
|
|
Total |
|
1 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
1 |
100.00% |
|
|
5 - Entity: 1.2.2 Top View Grid Investment Limited |
CNPJ or CPF |
Quotes/common shares |
% |
% Total |
Preferred shares |
% |
% Total |
TOTAL |
% Total |
|
|
Controlling shareholders |
|
1 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
1 |
100.00% |
|
1.2.2.1 |
State Grid International Development Limited |
|
1 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
1 |
100.00% |
July 31, 2017 |
|
Noncontrolling shareholders |
|
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
|
1.2.2.2 |
Other shareholders |
|
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
|
|
Total |
|
1 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
1 |
100.00% |
|
|
6 - Entity: 1.2.1.1 State Grid International Development Limited |
CNPJ or CPF |
Quotes/common shares |
% |
% Total |
Preferred shares |
% |
% Total |
TOTAL |
% Total |
|
|
Controlling shareholders |
|
21,429,327,845 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
21,429,327,845 |
21.32% |
|
1.2.1.1.1 |
State Grid International Development Co., Ltd |
|
21,429,327,845 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
21,429,327,845 |
21.32% |
July 31, 2017 |
|
Noncontrolling shareholders |
|
- |
0.00% |
0.00% |
79,091,019,116 |
100.00% |
100.00% |
79,091,019,116 |
78.68% |
|
1.2.1.1.2 |
State Grid Overseas Investment Ltd |
|
- |
0.00% |
0.00% |
79,091,019,116 |
100.00% |
100.00% |
79,091,019,116 |
78.68% |
July 31, 2017 |
1.2.1.1.3 |
Other shareholders |
|
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
|
|
Total |
|
21,429,327,845 |
100.00% |
21.32% |
79,091,019,116 |
100.00% |
78.68% |
100,520,346,961 |
100.00% |
|
|
7 - Entity: 1.2.1.1.1 State Grid International Development Co., Ltd |
CNPJ or CPF |
Quotes/common shares |
% |
% Total |
Preferred shares |
% |
% Total |
TOTAL |
% Total |
|
|
Controlling shareholders |
|
7,131,288,000 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
7,131,288,000 |
100.00% |
|
1.2.1.1.1.1 |
State Grid Corporation of China |
|
7,131,288,000 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
7,131,288,000 |
100.00% |
July 31, 2017 |
|
Noncontrolling shareholders |
|
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
|
1.2.1.1.1.2 |
Other shareholders |
|
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
|
|
Total |
|
7,131,288,000 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
7,131,288,000 |
100.00% |
|
|
8 - Entity: 1.2.1.1.2 State Grid Overseas Investment Ltd |
CNPJ or CPF |
Quotes/common shares |
% |
% Total |
Preferred shares |
% |
% Total |
TOTAL |
% Total |
|
|
Controlling shareholders |
|
100 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
100 |
100.00% |
|
1.2.1.1.2.1 |
State Grid Corporation of China |
|
100 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
100 |
100.00% |
July 31, 2017 |
|
Noncontrolling shareholders |
|
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
|
1.2.1.1.2.2 |
Other shareholders |
|
- |
0.00% |
0.00% |
- |
0.00% |
0.00% |
- |
0.00% |
|
|
Total |
|
100 |
100.00% |
100.00% |
- |
0.00% |
0.00% |
100 |
100.00% |
|
83
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
The Company is committed to arbitration in the Market Arbitration Chamber, in accordance with the Arbitration Clause in Article 44 of the Company’s By-Laws.
KPMG Auditores Independentes
Av. Coronel Silva Telles, 977 - 10º andar, Cambuí
13024-001 - Campinas/SP – Brasil
Edifício Dahruj Tower
Caixa Postal 737 - CEP 13012-970 - Campinas/SP - Brasil
Telephone +55 (19) 3198-6000, Fax +55 (19) 3198-6205
www.kpmg.com.br
INDEPENDENT AUDITORS’ REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION
(A free translation of the original report in Portuguese, as filed with the Brazilian Securities and Exchange Commission (CVM), prepared in accordance with the accounting practices adopted in Brazil, rules of the CVM and of the International Financial Reporting Standards - IFRS)
To the Shareholders and Board Directors of
CPFL Energia S.A.
Campinas - SP
Introduction
We have reviewed the individual and consolidated, interim financial information, of CPFL Energia S.A. (“the Company”), included in the Quarterly Information Form (ITR), for the quarter ended June 30, 2018, which comprises the statement of financial position as of June 30, 2018 and the respective statements of profit or loss and other comprehensive income for the three and six month periods then ended, and the changes in equity and cash flows for the six month period then ended, comprising the explanatory notes.
Management is responsible for the preparation of the interim financial information in accordance with CPC 21(R1) Technical Pronouncement - Interim Financial Information and International Standard IAS 34 - Interim Financial Reporting, issued by International Accounting Standards Board - IASB, and for presentation of this interim financial information in accordance with the rules issued by Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of the quarterly information - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review.
Scope of review
We conducted our review in accordance with the Brazilian and international standard on interim review (NBC TR 2410 - Revisão de Informações Intermediárias Executada pelo Auditor da Entidade and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. The scope of a review is substantially less than an audit conducted in accordance with auditing standards and, consequently, it does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information referred above is not prepared, in all material respects, in accordance with CPC 21(R1) and the IAS 34, issued by IASB, applicable to the preparation of the Quarterly Information and presented in accordance with the rules issued by Brazilian Securities and Exchange Commission (CVM).
84
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
Other matters - Statements of Value Added
The individual and consolidated interim financial information, related to statements of value added (DVA) for the six month period ended June 30, 2018, prepared under the responsibility of the Company's management, and presented as supplementary information for the purposes of IAS 34, were submitted to the same review procedures followed together with the review of the Company's interim financial information. In order to form our conclusion, we evaluated whether these statements are reconciled to the interim financial information and to the accounting records, as applicable, and whether their form and content are in accordance with the criteria set on Technical Pronouncement CPC 09 - Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that the accompanying statements of value added are not prepared, in all material respects, in accordance with the individual and consolidated interim financial information taken as a whole.
Campinas, August 06, 2018
KPMG Auditores Independentes
CRC 2SP014428/O-6
Original report in Portuguese signed by
Marcio José dos Santos
Accountant CRC 1SP252906/O-0
85
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
In compliance with the provisions in items V and VI of article 25 of the Brazilian Securities & Exchange Commission (CVM) Instruction No. 480, of December 7, 2009, as amended by CVM Instruction No. 586, of June 8, 2017, the chief executive officers and the officers of CPFL Energia S.A, a publicly traded company, with its registered office at Rodovia Engo Miguel Noel Nascentes Burnier, km 2,5, Parque São Quirino - Campinas - SP - Brasil, enrolled with the National Register of Legal Entities (CNPJ ) under No. 02.429.144/0001-93, hereby stated that:
a) they have reviewed and discussed, and agree with, the opinions expressed in the opinion of KPMG Auditores Independentes on the interim financial statements of CPFL Energia of June 30, 2018;
b) they have reviewed and discussed, and agree with, the interim financial statements of CPFL Energia of June 30, 2018;
Campinas, August 6, 2018.
__________________________________ André Dorf Chief Executive Officer, holding also the function of Chief Business Development Officer | |||
__________________________________ Yumeng Zhao Deputy Chief Executive Officer
| |||
Gustavo Pinto Gachineiro Chief Institutional Relations Officer
|
|
Gustavo Estrella Chief Financial and Investor Relations Officer | |
__________________________________ Pan Yuehui Deputy Chief Financial Officer |
__________________________________ Wagner Luiz Schneider de Freitas Chief Business Planning and Management Officer | ||
__________________________________ Karin Regina Luchesi Chief Market Operations Officer |
__________________________________ Luis Henrique Ferreira Pinto Chief Regulated Operations Officer |
86
(Free Translation of the original in Portuguese)
Interim Standard Financial Statements – ITR – Date: June 30, 2018 - CPFL Energia S.A.
In compliance with the provisions in items V and VI of article 25 of the Brazilian Securities & Exchange Commission (CVM) Instruction No. 480, of December 7, 2009, as amended by CVM Instruction No. 586, of June 8, 2017, the chief executive officers and the officers of CPFL Energia S.A, a publicly traded company, with its registered office at Rodovia Engo Miguel Noel Nascentes Burnier, km 2,5, Parque São Quirino - Campinas - SP - Brasil, enrolled with the National Register of Legal Entities (CNPJ ) under No. 02.429.144/0001-93, hereby stated that:
a) they have reviewed and discussed, and agree with, the opinions expressed in the opinion of KPMG Auditores Independentes on the interim financial statements of CPFL Energia of June 30, 2018;
b) they have reviewed and discussed, and agree with, the interim financial statements of CPFL Energia of June 30, 2018;
Campinas, August 6, 2018.
__________________________________ André Dorf Chief Executive Officer, holding also the function of Chief Business Development Officer | |||
__________________________________ Yumeng Zhao Deputy Chief Executive Officer
| |||
Gustavo Pinto Gachineiro Chief Institutional Relations Officer
|
|
Gustavo Estrella Chief Financial and Investor Relations Officer | |
__________________________________ Pan Yuehui Deputy Chief Financial Officer |
__________________________________ Wagner Luiz Schneider de Freitas Chief Business Planning and Management Officer | ||
__________________________________ Karin Regina Luchesi Chief Market Operations Officer |
__________________________________ Luis Henrique Ferreira Pinto Chief Regulated Operations Officer |
CPFL ENERGIA S.A. | ||
|
By: |
/S/ GUSTAVO ESTRELLA
|
Name: Title: |
Gustavo Estrella Chief Financial Officer and Head of Investor Relations |
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or 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.
87