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____.
Registration Form – 2016 – CPFL Energia S.A. |
Version: 1 |
Registration data
1. General information |
2 |
2. Address |
3 |
3. Securities |
4 |
4. Auditor information |
5 |
5. Share register |
6 |
6. Investor relations officer |
7 |
7. Shareholders’ department |
8 |
1
Registration Form – 2016 – CPFL Energia S.A. |
Version: 1 |
a) General information
Company name: | CPFL ENERGIA S.A. |
Date of adoption of company name: | 08/06/2002 |
Type: | publicly-held Corporation |
Previous company name: | Draft II Participações S.A |
Date of incorporation: | 03/20/1998 |
CNPJ (Corporate Taxpayer ID): | 02.429.144/0001-93 |
CVM code: | 1866-0 |
CVM registration date: | 05/18/2000 |
CVM registration status: | Active |
Status starting date: | 05/18/2000 |
Country: | Brazil |
Country in which the securities | |
are held in custody: | Brazil |
Other countries in which the securities can be traded | |
Country | Date of admission |
United States | 09/29/2004 |
Sector of activity: | Holding company (Electric Energy) |
Description of activity: | Holding company |
Issuer’s category: | Category A |
Date of registration in the current category: | 01/01/2010 |
Issuer’s status: | Operating |
Status starting date: | 05/18/2000 |
Type of ownership control: | Private Holding |
Date of last change in ownership control: | 11/30/2009 |
Date of last change of fiscal year: | |
Month/day of the end of fiscal year: | 12/31 |
Issuer´s web address: | www.cpfl.com.br |
Newspaper or media where issuer discloses its information: |
Newspaper or media |
FU |
Diário Oficial do Estado de São Paulo |
SP |
Valor Econômico |
SP |
www.cpfl.com.br/ri |
SP |
www.portalneo1.net |
SP |
www.valor.com.br/valor-ri |
SP |
2
Registration Form – 2016 – CPFL Energia S.A. |
Version: 1 |
b) Address
Registered Office Address: Rua Gomes de Carvalho, 1510, 14º– Cj 2 Vila Olímpia, São Paulo, SP, Brazil, zip code: 04547-005
Telephone: (019) 3756-6083, Fax: (019) 3756-6089, E-mail: ri@cpfl.com.br
Mail Address: Rodovia Engenheiro Miguel Noel Nascentes Burnier, 1755, Km 2,5, Parque São Quirino, Campinas, SP, Brazil, zip code 13088-140
Telephone (019) 3756-6083, Fax (019) 3756-6089, E-mail: ri@cpfl.com.br
3
Registration Form – 2016 – CPFL Energia S.A. |
Version: 1 |
c) Securities
Share trading
Trading mkt Stock exchange
Managing entity BM&FBOVESPA
Start date 09/29/2004
End date
Trading segment New Market
Start date 9/29/2004
End date
Debenture trading
Trading mkt Organized market
Managing entity CETIP
Start date 05/18/2000
End date
Trading segment Traditional
Start date 05/19/2000
End date
4
Registration Form – 2016 – CPFL Energia S.A. |
Version: 1 |
d) Auditor information
Does the issuer have an auditor? | Yes |
CVM code: | 385-9 |
Type of auditor: | Brazilian firm |
Independent auditor: | Deloitte Touche Tomatsu Auditores Independentes |
CNPJ (Corporate Taxpayer ID): | 49.928.567/0001-11 |
Period of service: | 03/12/2012 |
Partner in charge | Marcelo Magalhães Fernandes |
Period of service | 03/12/2012 |
CPF (Individual Taxpayer ID) | 110.931.498-17 |
5
Registration Form – 2016 – CPFL Energia S.A. |
Version: 1 |
Share register
Does the company have a service provider: | Yes |
Corporate name: | Banco do Brasil |
CNPJ: | 00.000.000/0001-91 |
Period of service: | 01/01/2011 |
Address: |
Rua Lélio Gama, 105 – 38º floor, Gecin, Centro, Rio de Janeiro, RJ, Brazil, zip code: 20031-080, Telephone (021) 38083551, Fax: (021) 38086088, email: aescriturais@bb.com.br
6
Registration Form – 2016 – CPFL Energia S.A. |
Version: 1 |
e) Investor relations officer
Name: | Gustavo Estrella |
Investor Relations Officer | |
CPF/CNPJ: | 037.234.097-09 |
Address: |
Rodovia Engenheiro Miguel Noel Nascentes Burnier, 1755, Km 2,5, Parque São Quirino, Campinas, SP, Brazil, zip code 13088-140
Telephone (019) 3756-6083, Fax (019) 3756-6089, email: gustavoestrella@cpfl.com.br.
Date when the officer assumed the position: 02/27/2013
Date when the officer left the position:
7
Registration Form – 2016 – CPFL Energia S.A. |
Version: 1 |
f) Shareholders’ department
Contact | Eduardo Atsushi Takeiti |
Date when the officer assumed the position: | 12/13/2011 |
Date when the officer left the position: | 10/05/2014 |
Contact | Leandro José Cappa de Oliveira |
Date when the officer assumed the position: | 10/06/2014 |
Date when the officer left the position: |
Address:
Rodovia Engenheiro Miguel Noel Nascentes Burnier, 1755, Km 2,5, Parque São Quirino, Campinas, SP, Brazil, zip code 13088-140
Telephone (019) 3756-6083, Fax (019) 3756-6089, email: eduardot@cpfl.com.br
8
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Table of Contents | |
Company Data | |
Capital Composition | 1 |
Dividends | 2 |
Individual Financial Statements | |
Statement of Financial Position - Assets | 3 |
Statement of Financial Position - Liabilities and Equity | 4 |
Statement of Income | 5 |
Statement of Comprehensive Income | 6 |
Statement of Cash Flows – Indirect Method | 7 |
Statement of Changes in Equity | |
01/01/2015 to 12/31/2015 | 8 |
01/01/2014 to 12/31/2014 | 9 |
01/01/2013 to 12/31/2013 | 10 |
Statement of Value Added | 11 |
Consolidated Financial Statements | |
Statement of Financial Position - Assets | 12 |
Statement of Financial Position - Liabilities and Equity | 13 |
Statement of Income | 14 |
Statement of Comprehensive Income | 15 |
Statement of Cash Flows - Indirect Method | 16 |
Statement of Changes in Equity | |
01/01/2015 to 12/31/2015 | 17 |
01/01/2014 to 12/31/2014 | 18 |
01/01/2013 to 12/31/2013 | 19 |
Statement of Value Added | 20 |
Management Report | 21 |
Notes to the Financial Statements | 41 |
Reports | |
Independent Auditor’s Report - Unqualified | 137 |
Report of the Fiscal Council or Equivalent Body | 139 |
Officers’ Statement on the Financial Statements | 140 |
Officers’ Statement on the Independent Auditor’s Report | 141 |
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Company Data
Number of Shares (In units) |
Last Fiscal Year 12/31/2015 |
Paid-in capital |
|
Common |
993,014,215 |
Preferred |
0 |
Total |
993,014,215 |
Treasury Stock |
0 |
Common |
0 |
Preferred |
0 |
Total |
0 |
1
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Company Data
Event |
Approval |
Description |
Beginning of payment |
Type of share |
Class of share |
Amount per share (Reais/share) |
Board of Directors’ Meeting |
03/16/2016 |
Dividend |
|
ON (Common shares) |
|
0.20687 |
2
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
|
(In thousands of Brazilian reais – R$) |
|
|
|
| |
Code |
Description |
Current Year |
Prior Year |
Prior Year |
||
1 |
Total assets |
8,948,469 |
8,318,287 |
8,389,811 |
||
1.01 |
Current assets |
1,795,763 |
1,792,189 |
1,720,232 |
||
1.01.01 |
Cash and cash equivalents |
424,192 |
799,775 |
990,672 |
||
1.01.06 |
Taxes recoverable |
72,885 |
49,070 |
29,874 |
||
1.01.06.01 |
Current taxes recoverable |
72,885 |
49,070 |
29,874 |
||
1.01.08 |
Other current assets |
1,298,686 |
943,344 |
699,686 |
||
1.01.08.03 |
Others |
1,298,686 |
943,344 |
699,686 |
||
1.01.08.03.01 |
Other receivables |
943 |
977 |
1,984 |
||
1.01.08.03.02 |
Dividends and interest on capital |
1,227,590 |
942,367 |
697,702 |
||
1.01.08.03.03 |
Derivatives |
70,153 |
- |
- |
||
1.02 |
Noncurrent assets |
7,152,706 |
6,526,098 |
6,669,579 |
||
1.02.01 |
Long-term assets |
211,432 |
234,239 |
248,623 |
||
1.02.01.06 |
Deferred taxes |
140,389 |
150,628 |
165,798 |
||
1.02.01.06.02 |
Deferred tax assets |
140,389 |
150,628 |
165,798 |
||
1.02.01.08 |
Receivables from related parties |
2,814 |
12,089 |
8,948 |
||
1.02.01.08.02 |
Receivables from subsidiaries |
2,814 |
12,089 |
8,948 |
||
1.02.01.09 |
Other noncurrent assets |
68,229 |
71,522 |
73,877 |
||
1.02.01.09.03 |
Escrow deposits |
630 |
546 |
91 |
||
1.02.01.09.05 |
Other receivables |
14,919 |
15,819 |
14,389 |
||
1.02.01.09.07 |
Advance for future capital increase |
52,680 |
55,157 |
59,397 |
||
1.02.02 |
Investments |
6,940,036 |
6,290,998 |
6,419,924 |
||
1.02.02.01 |
Equity interests |
6,940,036 |
6,290,998 |
6,419,924 |
||
1.02.02.01.02 |
Investments in subsidiaries |
6,940,036 |
6,290,998 |
6,419,924 |
||
1.02.03 |
Property, plant and equipment |
1,215 |
843 |
1,000 |
||
1.02.04 |
Intangible assets |
23 |
18 |
32 |
||
1.02.04.01 |
Intangible assets |
23 |
18 |
32 |
||
1.02.04.01.02 |
Other intangible assets |
23 |
18 |
32 |
||
3
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
||||||
Code |
Description |
Current Year |
Prior Year |
Prior Year |
||
2 |
Total liabilities |
8,948,469 |
8,318,287 |
8,389,811 |
||
2.01 |
Current liabilities |
1,206,708 |
1,338,488 |
46,245 |
||
2.01.01 |
Payroll and related taxes |
- |
- |
10 |
||
2.01.01.02 |
Payroll taxes |
- |
- |
10 |
||
2.01.01.02.01 |
Estimated payroll |
- |
- |
10 |
||
2.01.02 |
Trade payables |
1,157 |
790 |
1,127 |
||
2.01.02.01 |
Domestic suppliers |
1,157 |
790 |
1,127 |
||
2.01.03 |
Taxes payable |
747 |
1,859 |
359 |
||
2.01.03.01 |
Federal taxes |
747 |
1,859 |
359 |
||
2.01.03.01.01 |
Income tax and social contribution |
- |
1,628 |
12 |
||
2.01.03.01.02 |
PIS (tax on revenue) |
63 |
1 |
- |
||
2.01.03.01.03 |
COFINS (tax on revenue) |
391 |
3 |
47 |
||
2.01.03.01.04 |
Other federal taxes |
293 |
227 |
300 |
||
2.01.04 |
Borrowings |
973,252 |
1,304,406 |
12,438 |
||
2.01.04.01 |
Borrowings |
973,252 |
- |
- |
||
2.01.04.01.01 |
Local currency |
330,164 |
- |
- |
||
2.01.04.01.02 |
Foreign currency |
643,088 |
- |
- |
||
2.01.04.02 |
Debentures |
- |
1,304,406 |
12,438 |
||
2.01.04.02.01 |
Interests on debentures |
- |
15,020 |
12,438 |
||
2.01.04.02.02 |
Debentures |
- |
1,289,386 |
- |
||
2.01.05 |
Other liabilities |
231,552 |
31,433 |
32,311 |
||
2.01.05.02 |
Others |
231,552 |
31,433 |
32,311 |
||
2.01.05.02.01 |
Dividends and interest on capital payable |
212,531 |
13,555 |
15,407 |
||
2.01.05.02.04 |
Derivatives |
981 |
- |
- |
||
2.01.05.02.05 |
Other liabilities |
18,040 |
17,878 |
16,904 |
| |
2.02 |
Noncurrent liabilities |
67,565 |
36,264 |
1,319,667 |
||
2.02.01 |
Borrowings |
- |
- |
1,287,912 |
||
2.02.01.02 |
Debentures |
- |
- |
1,287,912 |
||
2.02.02 |
Other liabilities |
65,930 |
35,539 |
31,495 |
||
2.02.02.02 |
Others |
65,930 |
35,539 |
31,495 |
||
2.02.02.02.04 |
Other payables |
31,961 |
35,539 |
31,495 |
||
2.02.02.02.05 |
Provision for equity interest losses |
33,969 |
- |
- |
||
2.02.04 |
Provisons |
1,635 |
725 |
260 |
||
2.02.04.01 |
Tax, social security, labor and civil provisions |
1,635 |
725 |
260 |
||
2.02.04.01.02 |
Social security and labor provisions |
1,209 |
378 |
97 |
||
2.02.04.01.04 |
Civil provisions |
426 |
347 |
163 |
||
2.03 |
Equity |
7,674,196 |
6,943,535 |
7,023,899 |
||
2.03.01 |
Issued capital |
5,348,312 |
4,793,424 |
4,793,424 |
||
2.03.02 |
Capital reserves |
468,082 |
468,082 |
287,630 |
||
2.03.04 |
Earnings reserves |
1,672,481 |
1,536,136 |
1,545,178 |
||
2.03.04.01 |
Legal reserve |
694,058 |
650,811 |
603,352 |
||
2.03.04.02 |
Statutory reserve |
978,423 |
885,325 |
265,037 |
||
2.03.04.08 |
Additional dividend proposed |
- |
- |
567,802 |
||
2.03.04.10 |
Retained earnings reserve |
- |
- |
108,987 |
||
2.03.08 |
Accumulated comprehensive income |
185,321 |
145,893 |
397,667 |
||
2.03.08.01 |
Accumulated comprehensive income |
185,321 |
145,893 |
397,667 |
||
4
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Individual Financial Statements
|
(In thousands of Brazilian reais – R$) |
|
|
| ||
|
|
|
|
|
|
|
Code |
Description |
Current Year |
Prior Year |
Prior Year |
||
01/01/2015 to |
01/01/2014 to |
01/01/2013 to |
||||
3.01 |
Revenue from sale of energy and/or services |
1,157 |
61 |
1,649 |
||
3.03 |
Gross profit |
1,157 |
61 |
1,649 |
||
3.04 |
Operating income (expenses) |
897,040 |
985,010 |
1,000,153 |
||
3.04.02 |
General and administrative expenses |
(29,911) |
(26,175) |
(22,626) |
||
3.04.06 |
Share of profit (loss) of investees |
926,951 |
1,011,185 |
1,022,779 |
||
3.05 |
Profit before finance income (costs) and taxes |
898,197 |
985,071 |
1,001,802 |
||
3.06 |
Finance income (costs) |
(22,948) |
(25,464) |
(26,860) |
||
3.06.01 |
Finance income |
74,854 |
117,855 |
57,637 |
||
3.06.02 |
Finance costs |
(97,802) |
(143,319) |
(84,497) |
||
3.07 |
Profit (loss) before taxes on income |
875,249 |
959,607 |
974,942 |
||
3.08 |
Income tax and social contribution |
(10,309) |
(10,430) |
(37,523) |
||
3.08.01 |
Current |
(70) |
(23,266) |
(25,910) |
||
3.08.02 |
Deferred |
(10,239) |
12,836 |
(11,613) |
||
3.09 |
Profit (loss) from continuing operations |
864,940 |
949,177 |
937,419 |
||
3.11 |
Profit (loss) for the year |
864,940 |
949,177 |
937,419 |
||
3.99.01.01 |
ON - common shares |
1 |
1 |
1 |
||
3.99.02.01 |
ON - common shares |
1 |
1 |
1 |
||
5
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Individual Financial Statements
|
(In thousands of Brazilian reais – R$) |
|
| |||
Code |
Description |
Current Year |
Prior Year |
Prior Year |
||
01/01/2015 to |
01/01/2014 to |
01/01/2013 to |
||||
4.01 |
Profit for the year |
864,940 |
949,177 |
937,419 |
||
4.02 |
Other comprehensive income |
65,548 |
(225,720) |
460,226 |
||
4.02.01 |
Comprehensive income for the year of subsidiaries |
65,548 |
(225,720) |
460,226 |
||
4.03 |
Comprehensive income for the year |
930,488 |
723,457 |
1,397,645 |
||
6
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Individual Financial Statements
|
(In thousands of Brazilian reais – R$) |
|
|
|
| |
|
Code |
Description |
Current year |
Prior Year |
Prior Year |
|
6.01 |
Cash flows from operating activities |
617,661 |
1,185,901 |
741,536 |
||
6.01.01 |
Cash generated from operations |
44,553 |
91,513 |
33,695 |
||
6.01.01.01 |
Profit for the year, including income tax and social contribution |
875,250 |
959,607 |
974,942 |
||
6.01.01.02 |
Depreciation and amortization |
169 |
173 |
76 |
||
6.01.01.03 |
Provision for tax, civil and labor risks |
1,497 |
640 |
267 |
||
6.01.01.04 |
Interest on debts, inflation adjusment and exchange rate changes |
94,588 |
142,278 |
81,189 |
||
6.01.01.06 |
Share of profit (loss) of investees |
(926,951) |
(1,011,185) |
(1,022,779) |
||
6.01.02 |
Changes in assets and liabilities |
573,108 |
1,094,388 |
707,841 |
||
6.01.02.01 |
Dividends and interest on capital received |
627,014 |
1,248,982 |
792,146 |
||
6.01.02.02 |
Taxes recoverable |
(12,350) |
1,564 |
21,797 |
||
6.01.02.03 |
Escrow deposits |
(48) |
(444) |
12,935 |
||
6.01.02.05 |
Other operating assets |
933 |
(411) |
(1,196) |
||
6.01.02.06 |
Trade payables |
366 |
(336) |
(156) |
||
6.01.02.07 |
Income tax and social contribution paid |
(2,172) |
(21,463) |
(27,551) |
||
6.01.02.08 |
Other taxes and social contributions |
804 |
(389) |
(147) |
||
6.01.02.09 |
Interest paid on debts |
(36,858) |
(138,599) |
(76,561) |
||
6.01.02.10 |
Other operating liabilities |
(3,907) |
5,693 |
(435) |
||
6.01.02.11 |
Tax, civil and labor risks paid |
(674) |
(209) |
(12,991) |
||
6.02 |
Net cash generated by (used in) investing activities |
(532,392) |
(389,988) |
(64,830) |
||
6.02.02 |
Purchases of property, plant and equipment |
(535) |
- |
(345) |
||
6.02.03 |
Securities |
- |
- |
4,710 |
||
6.02.04 |
Purchases of intangible assets |
(12) |
(13) |
- |
||
6.02.06 |
Advance for future capital increase |
(52,680) |
(27,153) |
(59,342) |
||
6.02.07 |
Intragroup loans |
10,845 |
(2,822) |
(8,290) |
||
6.02.08 |
Capital increase in existing investment |
(490,010) |
(360,000) |
(1,563) |
||
6.03 |
Net cash generated by (used in) financing activities |
(460,853) |
(986,810) |
172,131 |
||
6.03.01 |
Repayment of principal of borrowings and debentures |
(1,290,000) |
- |
(299,535) |
||
6.03.02 |
Dividends and interest on capital paid |
(850) |
(986,810) |
(815,514) |
||
6.03.04 |
Borrowings and debentures raised |
829,997 |
- |
1,287,180 |
||
6.05 |
Increase (decrease) in cash and cash equivalents |
(375,584) |
(190,897) |
848,837 |
||
6.05.01 |
Cash and cash equivalents at the beginning of the year |
799,775 |
990,672 |
141,835 |
||
6.05.02 |
Cash and cash equivalents at the end of the year |
424,191 |
799,775 |
990,672 |
||
7
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Individual Financial Statements
|
(In thousands of Brazilian reais – R$) |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Code |
Description |
Paid-in capital |
Capital reserves, |
Earnings reserves |
Retained earnings/accumulated losses |
Other comprehensive income |
Equity |
|
5.01 |
Opening balances |
4,793,424 |
468,082 |
1,536,136 |
- |
145,892 |
6,943,534 |
||
5.03 |
Adjusted opening balances |
4,793,424 |
468,082 |
1,536,136 |
- |
145,892 |
6,943,534 |
||
5.04 |
Capital transactions with shareholders |
554,888 |
- |
(554,888) |
(199,826) |
- |
(199,826) |
||
5.04.01 |
Capital increase |
554,888 |
- |
(554,888) |
- |
- |
- |
||
5.04.08 |
Prescribed dividend |
- |
- |
- |
5,597 |
- |
5,597 |
||
5.04.09 |
Dividend proposal approved |
- |
- |
- |
(205,423) |
- |
(205,423) |
||
5.05 |
Total comprehensive income |
- |
- |
- |
864,940 |
65,548 |
930,488 |
||
5.05.01 |
Profit for the year |
- |
- |
- |
864,940 |
- |
864,940 |
||
5.05.02 |
Other comprehensive income |
- |
- |
- |
- |
65,548 |
65,548 |
||
5.06 |
Internal changes in equity |
- |
- |
691,233 |
(665,114) |
(26,119) |
- |
||
5.06.01 |
Recognition of reserves |
- |
- |
43,247 |
(43,247) |
- |
- |
||
5.06.05 |
Changes in statutory reserve in the year |
- |
- |
647,986 |
(647,986) |
- |
- |
||
5.06.09 |
Equity on comprehensive income of subsidiaries |
- |
- |
- |
26,119 |
(26,119) |
- |
||
5.07 |
Closing balances |
5,348,312 |
468,082 |
1,672,481 |
- |
185,321 |
7,674,196 |
||
8
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Individual Financial Statements
|
(In thousands of Brazilian reais – R$) |
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
Code |
Description |
Paid-in capital |
Capital reserves, stock options and treasury stock |
Earnings reserves |
Retained earnings/accumulated losses |
Other comprehensive income |
Equity |
|
5.01 |
Opening balances |
4,793,424 |
287,630 |
1,545,177 |
- |
397,668 |
7,023,899 |
||
5.03 |
Adjusted opening balances |
4,793,424 |
287,630 |
1,545,177 |
- |
397,668 |
7,023,899 |
||
5.04 |
Capital transactions with shareholders |
- |
180,452 |
(567,802) |
(416,472) |
- |
(803,822) |
||
5.04.08 |
Dividend proposal approved |
- |
- |
(567,802) |
- |
- |
(567,802) |
||
5.04.09 |
Prescribed dividend |
- |
- |
- |
5,723 |
- |
5,723 |
||
5.04.10 |
Interim dividend |
- |
- |
- |
(422,195) |
- |
(422,195) |
||
5.04.11 |
Capital increase in subsidiaries with no change in control |
- |
362 |
- |
- |
- |
362 |
||
5.04.12 |
Gain (loss) in participation with no change in control |
- |
(207) |
- |
- |
- |
(207) |
||
5.04.13 |
Business combination CPFL Renováveis / DESA |
- |
180,297 |
- |
- |
- |
180,297 |
||
5.05 |
Total comprehensive income |
- |
- |
- |
949,177 |
(225,720) |
723,457 |
||
5.05.01 |
Profit for the year |
- |
- |
- |
949,177 |
- |
949,177 |
||
5.05.02 |
Other comprehensive income |
- |
- |
- |
- |
(225,720) |
(225,720) |
||
5.05.02.03 |
Share of comprehensive income of subsidiaries and associates |
- |
- |
- |
- |
(225,720) |
(225,720) |
||
5.06 |
Internal changes in equity |
- |
- |
558,760 |
(532,705) |
(26,055) |
- |
||
5.06.01 |
Recognition of reserves |
- |
- |
47,459 |
(47,459) |
- |
- |
||
5.06.04 |
Changes in statutory reserve in the year |
- |
- |
620,288 |
(620,288) |
- |
- |
||
5.06.05 |
Equity on comprehensive income of subsidiaries |
- |
- |
- |
26,055 |
(26,055) |
- |
||
5.06.08 |
Realization/reversal of earnings retained investment |
- |
- |
(108,987) |
108,987 |
- |
- |
||
5.07 |
Closing balances |
4,793,424 |
468,082 |
1,536,135 |
- |
145,893 |
6,943,534 |
||
9
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
|
||||||
Code |
Description |
Paid-in capital |
Capital reserves, stock options and treasury stock |
Earnings reserves |
Retained earnings/accumulated losses |
Other comprehensive income |
Equity |
||
5.01 |
Opening balances |
4,793,424 |
228,322 |
1,339,286 |
56,293 |
(36,596) |
6,380,729 |
||
5.03 |
Adjusted opening balances |
4,793,424 |
228,322 |
1,339,286 |
56,293 |
(36,596) |
6,380,729 |
||
5.04 |
Capital transactions with shareholders |
- |
59,308 |
111,896 |
(925,679) |
- |
(754,475) |
||
5.04.06 |
Dividends |
- |
- |
567,802 |
(567,802) |
- |
- |
||
5.04.08 |
Prescribed dividends |
- |
- |
- |
5,172 |
- |
5,172 |
||
5.04.09 |
Interim dividends |
- |
- |
- |
(363,049) |
- |
(363,049) |
||
5.04.10 |
Dividend proposal approved |
- |
- |
(455,906) |
- |
- |
(455,906) |
||
5.04.11 |
IPO - CPFL Renonváveis |
- |
59,308 |
- |
- |
- |
59,308 |
||
5.05 |
Total comprehensive income |
- |
- |
- |
937,419 |
460,226 |
1,397,645 |
||
5.05.01 |
Profit for the year |
- |
- |
- |
937,419 |
- |
937,419 |
||
5.05.02 |
Other comprehensive income |
- |
- |
- |
- |
460,226 |
460,226 |
||
5.05.02.03 |
Share of comprehensive income of subsidiaries and associates |
- |
- |
- |
- |
460,226 |
460,226 |
||
5.06 |
Internal changes in equity |
- |
- |
93,995 |
(68,033) |
(25,962) |
- |
||
5.06.01 |
Recognition of reserves |
- |
- |
46,871 |
(46,871) |
- |
- |
||
5.06.04 |
Comprehensive income of the year |
- |
- |
(61,863) |
61,863 |
- |
- |
||
5.06.05 |
Equity on comprehensive income of subsidiaries |
- |
- |
- |
25,962 |
(25,962) |
- |
||
5.06.07 |
Realization/reversal of earnings retained investment |
- |
- |
108,987 |
(108,987) |
- |
- |
||
5.07 |
Closing balances |
4,793,424 |
287,630 |
1,545,177 |
- |
397,668 |
7,023,899 |
||
10
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Individual Financial Statements
|
(In thousands of Brazilian reais – R$) |
|
|
| ||
|
|
|
|
|
|
|
|
Code |
Description |
Current Year |
Prior Year |
Prior Year |
|
7.01 |
Revenues |
1,821 |
81 |
2,162 |
||
7.01.01 |
Sales of goods and services |
1,274 |
78 |
1,817 |
||
7.01.03 |
Revenues related to construction of own assets |
547 |
3 |
345 |
||
7.02 |
Inputs purchased from thrid parties |
(10,322) |
(7,701) |
(8,881) |
||
7.02.02 |
Materials, energy, third-party services and others |
(7,825) |
(5,081) |
(5,690) |
||
7.02.04 |
Others |
(2,497) |
(2,620) |
(3,191) |
||
7.03 |
Gross value added |
(8,501) |
(7,620) |
(6,719) |
||
7.04 |
Retentions |
(169) |
(173) |
(75) |
||
7.04.01 |
Depreciation, amortization and depletion |
(169) |
(173) |
(75) |
||
7.05 |
Wealth created by the Company |
(8,670) |
(7,793) |
(6,794) |
||
7.06 |
Wealth received in transfer |
1,011,012 |
1,141,740 |
1,095,519 |
||
7.06.01 |
Share of profit (loss) of investees |
926,950 |
1,011,185 |
1,022,779 |
||
7.06.02 |
Finance income |
84,062 |
130,555 |
72,740 |
||
7.07 |
Total wealth for distribution |
1,002,342 |
1,133,947 |
1,088,725 |
||
7.08 |
Wealth distributed |
1,002,342 |
1,133,947 |
1,088,725 |
||
7.08.01 |
Personnel and charges |
16,938 |
15,507 |
11,362 |
||
7.08.01.01 |
Salaries and wages |
9,963 |
8,455 |
8,209 |
||
7.08.01.02 |
Benefits |
5,987 |
6,257 |
2,248 |
||
7.08.01.03 |
FGTS (Severance Pay Fund) |
988 |
795 |
905 |
||
7.08.02 |
Taxes, fees and contributions |
28,424 |
25,807 |
55,343 |
||
7.08.02.01 |
Federal |
28,394 |
25,782 |
55,322 |
||
7.08.02.02 |
State |
30 |
25 |
21 |
||
7.08.03 |
Lenders and lessors |
92,040 |
143,456 |
84,601 |
||
7.08.03.01 |
Interest |
91,918 |
143,318 |
84,475 |
||
7.08.03.02 |
Rentals |
122 |
138 |
126 |
||
7.08.04 |
Shareholders |
864,940 |
949,177 |
937,419 |
||
7.08.04.02 |
Dividends |
566,680 |
281,430 |
843,424 |
||
7.08.04.03 |
Retained earnings / Loss for the year |
298,260 |
667,747 |
93,995 |
||
11
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
|
(In thousands of Brazilian reais – R$) |
|
|
|
| |
|
|
|
|
|
|
|
|
Code |
Description |
Current Year |
Prior Year |
Prior Year |
|
1 |
Total assets |
40,532,471 |
35,144,436 |
31,042,796 |
||
1.01 |
Current assets |
12,508,652 |
9,214,704 |
7,264,323 |
||
1.01.01 |
Cash and cash equivalents |
5,682,802 |
4,357,455 |
4,206,422 |
||
1.01.02 |
Financial investments |
23,633 |
5,323 |
24,806 |
||
1.01.02.02 |
Financial investments at amortized cost |
23,633 |
5,323 |
24,806 |
||
1.01.02.02.01 |
Held-to-maturity securities |
23,633 |
5,323 |
24,806 |
||
1.01.03 |
Trade receivables |
3,174,918 |
2,251,124 |
2,007,789 |
||
1.01.03.01 |
Consumers |
3,174,918 |
2,251,124 |
2,007,789 |
||
1.01.04 |
Materials and supplies |
24,129 |
18,506 |
21,625 |
||
1.01.06 |
Taxes recoverable |
475,211 |
329,638 |
262,433 |
||
1.01.06.01 |
Current taxes recoverable |
475,211 |
329,638 |
262,433 |
||
1.01.08 |
Other current assets |
3,127,959 |
2,252,658 |
741,248 |
||
1.01.08.03 |
Others |
3,127,959 |
2,252,658 |
741,248 |
||
1.01.08.03.01 |
Other receivables |
922,542 |
1,011,495 |
673,383 |
||
1.01.08.03.02 |
Derivatives |
627,493 |
23,260 |
1,842 |
||
1.01.08.03.03 |
Leases |
12,883 |
12,395 |
10,758 |
||
1.01.08.03.04 |
Dividends and interest on capital |
91,392 |
54,483 |
55,265 |
||
1.01.08.03.05 |
Concession financial asset |
9,630 |
540,094 |
- |
||
1.01.08.03.06 |
Sector financial asset |
1,464,019 |
610,931 |
- |
||
1.02 |
Noncurrent assets |
28,023,819 |
25,929,732 |
23,778,473 |
||
1.02.01 |
Long-term assets |
8,392,634 |
6,751,305 |
6,280,045 |
||
1.02.01.03 |
Trade receivables |
128,946 |
123,405 |
153,854 |
||
1.02.01.03.01 |
Consumers |
128,946 |
123,405 |
153,854 |
||
1.02.01.06 |
Deferred taxes |
334,886 |
938,496 |
1,168,706 |
||
1.02.01.06.02 |
Deferred tax assets |
334,886 |
938,496 |
1,168,706 |
||
1.02.01.08 |
Receivables from related parties |
84,265 |
100,666 |
86,655 |
||
1.02.01.08.03 |
Receivables from owners of the Company |
84,265 |
100,666 |
86,655 |
||
1.02.01.09 |
Other noncurrent assets |
7,844,537 |
5,588,738 |
4,870,830 |
||
1.02.01.09.03 |
Derivatives |
1,651,260 |
584,917 |
316,648 |
||
1.02.01.09.04 |
Escrow deposits |
1,227,527 |
1,162,477 |
1,143,179 |
||
1.02.01.09.05 |
Taxes recoverable |
167,159 |
144,383 |
173,362 |
||
1.02.01.09.06 |
Leases |
34,504 |
35,169 |
37,817 |
||
1.02.01.09.07 |
Concession financial asset |
3,597,474 |
2,834,522 |
2,787,073 |
||
1.02.01.09.09 |
Investments at cost |
116,654 |
116,654 |
116,654 |
||
1.02.01.09.10 |
Other receivables |
560,014 |
388,828 |
296,097 |
||
1.02.01.09.11 |
Sector financial asset |
489,945 |
321,788 |
- |
||
1.02.02 |
Investments |
1,247,631 |
1,098,769 |
1,032,681 |
||
1.02.02.01 |
Equity interests |
1,247,631 |
1,098,769 |
1,032,681 |
||
1.02.02.01.04 |
Other equity interests |
1,247,631 |
1,098,769 |
1,032,681 |
||
1.02.03 |
Property, plant and equipment |
9,173,217 |
9,149,486 |
7,717,419 |
||
1.02.03.01 |
PP&E - in service |
8,499,051 |
8,761,398 |
6,748,593 |
||
1.02.03.03 |
PP&E - in progress |
674,166 |
388,088 |
968,826 |
||
1.02.04 |
Intangible assets |
9,210,337 |
8,930,172 |
8,748,328 |
||
1.02.04.01 |
Intangible assets |
9,210,337 |
8,930,172 |
8,748,328 |
||
12
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated Financial Statements
|
(In thousands of Brazilian reais – R$) |
|
|
|
| |
|
|
|
|
|
|
|
|
Code |
Description |
Current Year |
Prior Year |
Prior Year |
|
2 |
Total liabilities |
40,532,471 |
35,144,436 |
31,042,796 |
||
2.01 |
Current liabilities |
9,524,873 |
7,417,104 |
4,905,531 |
||
2.01.01 |
Payroll and related taxes |
79,924 |
70,251 |
67,633 |
||
2.01.01.02 |
Payroll taxes |
79,924 |
70,251 |
67,633 |
||
2.01.01.02.01 |
Estimated payroll |
79,924 |
70,251 |
67,633 |
||
2.01.02 |
Trade payables |
3,161,210 |
2,374,147 |
1,884,693 |
||
2.01.02.01 |
Domestic suppliers |
3,161,210 |
2,374,147 |
1,884,693 |
||
2.01.03 |
Taxes payable |
653,342 |
436,267 |
318,063 |
||
2.01.03.01 |
Federal taxes |
265,126 |
166,527 |
196,884 |
||
2.01.03.01.01 |
Income tax and social contribution |
43,249 |
57,547 |
92,431 |
||
2.01.03.01.02 |
PIS (tax on revenue) |
33,199 |
15,096 |
14,256 |
||
2.01.03.01.03 |
COFINS (tax on revenue) |
159,317 |
69,701 |
64,778 |
||
2.01.03.01.04 |
Other federal taxes |
29,361 |
24,183 |
25,419 |
||
2.01.03.02 |
State taxes |
384,151 |
266,493 |
117,905 |
||
2.01.03.02.01 |
ICMS (state VAT) |
384,151 |
266,493 |
117,905 |
||
2.01.03.03 |
Municipal taxes |
4,065 |
3,247 |
3,274 |
||
2.01.03.03.01 |
Other municipal taxes |
4,065 |
3,247 |
3,274 |
||
2.01.04 |
Borrowings |
3,640,314 |
3,526,208 |
1,837,462 |
||
2.01.04.01 |
Borrowings |
2,949,922 |
1,191,025 |
1,640,456 |
||
2.01.04.01.01 |
In local currency |
1,287,278 |
1,047,191 |
1,582,742 |
||
2.01.04.01.02 |
In foreign currency |
1,662,644 |
143,834 |
57,714 |
||
2.01.04.02 |
Debentures |
690,392 |
2,335,183 |
197,006 |
||
2.01.04.02.01 |
Debentures |
458,165 |
2,042,075 |
34,872 |
||
2.01.04.02.02 |
Interest on debentures |
232,227 |
293,108 |
162,134 |
||
2.01.05 |
Other liabilities |
1,990,083 |
1,010,231 |
797,680 |
||
2.01.05.02 |
Others |
1,990,083 |
1,010,231 |
797,680 |
||
2.01.05.02.01 |
Dividends and interest on capital payable |
221,855 |
19,086 |
21,224 |
||
2.01.05.02.04 |
Derivatives |
981 |
38 |
- |
||
2.01.05.02.05 |
Private pension plan |
802 |
85,374 |
76,810 |
||
2.01.05.02.06 |
Regulatory charges |
852,017 |
43,795 |
32,379 |
||
2.01.05.02.07 |
Use of public asset |
9,457 |
4,000 |
3,738 |
||
2.01.05.02.08 |
Other payables |
904,971 |
835,940 |
663,529 |
||
2.01.05.02.09 |
Sector financial liability |
- |
21,998 |
- |
||
2.02 |
Noncurrent liabilities |
20,877,460 |
18,330,004 |
17,338,547 |
||
2.02.01 |
Borrowings |
18,092,904 |
15,623,751 |
15,183,936 |
||
2.02.01.01 |
Borrowings |
11,712,865 |
9,487,351 |
7,589,540 |
||
2.02.01.01.01 |
In local currency |
6,438,701 |
6,192,973 |
5,638,800 |
||
2.02.01.01.02 |
In foreign currency |
5,274,164 |
3,294,378 |
1,950,740 |
||
2.02.01.02 |
Debentures |
6,380,039 |
6,136,400 |
7,594,396 |
||
2.02.01.02.01 |
Debentures |
6,363,553 |
6,136,400 |
7,562,219 |
||
2.02.01.02.02 |
Interest on debentures |
16,486 |
- |
32,177 |
||
2.02.02 |
Other liabilities |
782,427 |
797,093 |
569,469 |
||
2.02.02.02 |
Others |
782,427 |
797,093 |
569,469 |
||
2.02.02.02.03 |
Derivatives |
33,205 |
13,317 |
2,950 |
||
2.02.02.02.04 |
Private pension plan |
474,318 |
518,386 |
350,640 |
||
2.02.02.02.05 |
Taxes, fees and contributions |
- |
- |
32,555 |
||
2.02.02.02.06 |
Use of public asset |
83,124 |
80,992 |
79,438 |
||
2.02.02.02.07 |
Other payables |
191,147 |
183,766 |
103,886 |
||
2.02.02.02.08 |
Trade payables |
633 |
632 |
- |
||
2.02.03 |
Deferred taxes |
1,432,594 |
1,401,009 |
1,117,146 |
||
2.02.03.01 |
Deferred income tax and social contribution |
1,432,594 |
1,401,009 |
1,117,146 |
||
2.02.04 |
Provisions |
569,535 |
508,151 |
467,996 |
||
2.02.04.01 |
Tax, social security, labor and civil provisions |
569,535 |
508,151 |
467,996 |
||
2.02.04.01.01 |
Tax provisions |
184,362 |
171,119 |
174,568 |
||
2.02.04.01.02 |
Social security and labor provisions |
171,990 |
125,641 |
119,707 |
||
2.02.04.01.04 |
Civil provisions |
194,530 |
185,741 |
149,735 |
||
2.02.04.01.05 |
Others |
18,653 |
25,650 |
23,986 |
||
2.03 |
Consolidated equity |
10,130,138 |
9,397,328 |
8,798,718 |
||
2.03.01 |
Issued capital |
5,348,312 |
4,793,424 |
4,793,424 |
||
2.03.02 |
Capital reserves |
468,082 |
468,082 |
287,630 |
||
2.03.04 |
Earnings reserves |
1,672,481 |
1,536,136 |
1,545,177 |
||
2.03.04.01 |
Legal reserve |
694,058 |
650,811 |
603,352 |
||
2.03.04.02 |
Statutory reserve |
978,423 |
885,325 |
265,037 |
||
2.03.04.08 |
Additional dividend proposed |
- |
- |
567,801 |
||
2.03.04.10 |
Retained earnings reserve |
- |
- |
108,987 |
||
2.03.08 |
Other comprehensive income |
185,321 |
145,892 |
397,668 |
||
2.03.09 |
Noncontrolling interests |
2,455,942 |
2,453,794 |
1,774,819 |
||
13
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) |
||||||
Code |
Description |
Current Year |
Prior Year |
Prior Year |
||
3.01 |
Revenue from sale of energy and/or services |
20,205,869 |
17,305,942 |
14,633,856 |
||
3.02 |
Cost of sales and/or services |
(16,268,044) |
(13,261,541) |
(10,673,721) |
||
3.02.01 |
Cost of electric energy |
(13,311,747) |
(10,643,130) |
(8,196,687) |
||
3.02.02 |
Cost of operation |
(1,907,197) |
(1,672,359) |
(1,467,516) |
||
3.02.03 |
Cost of services rendered to third parties |
(1,049,100) |
(946,052) |
(1,009,518) |
||
3.03 |
Gross profit |
3,937,825 |
4,044,401 |
3,960,135 |
||
3.04 |
Operating income (expenses) |
(1,468,851) |
(1,444,643) |
(1,469,492) |
||
3.04.01 |
Selling expenses |
(464,583) |
(402,698) |
(376,597) |
||
3.04.02 |
General and administrative expenses |
(863,499) |
(773,630) |
(928,614) |
||
3.04.05 |
Other operating expenses |
(357,654) |
(327,999) |
(285,149) |
||
3.04.06 |
Share of profit (loss) of investees |
216,885 |
59,684 |
120,868 |
||
3.05 |
Profit before finance income (costs) and taxes |
2,468,974 |
2,599,758 |
2,490,643 |
||
3.06 |
Finance income (costs) |
(1,014,520) |
(1,089,454) |
(971,443) |
||
3.06.01 |
Finance income |
1,558,047 |
890,436 |
699,208 |
||
3.06.02 |
Finance costs |
(2,572,567) |
(1,979,890) |
(1,670,651) |
||
3.07 |
Profit (loss) before taxes on income |
1,454,454 |
1,510,304 |
1,519,200 |
||
3.08 |
Income tax and social contribution |
(579,177) |
(623,861) |
(570,164) |
||
3.08.01 |
Current |
(12,860) |
(466,021) |
(521,981) |
||
3.08.02 |
Deferred |
(566,317) |
(157,840) |
(48,183) |
||
3.09 |
Profit (loss) from continuing operations |
875,277 |
886,443 |
949,036 |
||
3.11 |
Consolidated profit (loss) for the year |
875,277 |
886,443 |
949,036 |
||
3.11.01 |
Attributable to owners of the Company |
864,940 |
949,177 |
937,419 |
||
3.11.02 |
Attributable to noncontrolling interests |
10,337 |
(62,734) |
11,617 |
||
14
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated Financial Statements
|
(In thousands of Brazilian reais – R$) |
|
| |||
Code |
Description |
Current Year |
Prior Year |
Prior Year |
||
4.01 |
Consolidated profit for the year |
875,277 |
886,443 |
949,036 |
||
4.02 |
Other comprehensive income |
65,548 |
(225,719) |
460,226 |
||
4.02.03 |
Actuarial gains (losses), net of tax effects |
65,548 |
(225,719) |
460,226 |
||
4.03 |
Consolidated comprehensive income for the year |
940,825 |
660,724 |
1,409,262 |
||
4.03.01 |
Attributtable to owners of the Company |
930,488 |
723,457 |
1,397,645 |
||
4.03.02 |
Attributable to noncontrolling interests |
10,337 |
(62,733) |
11,617 |
||
15
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) |
||||||
Code |
Description |
YTD Current Year |
YTD Prior Year |
YTD Prior Year |
||
6.01 |
Cash flows from operating activities |
2,557,974 |
1,592,573 |
2,517,546 |
||
6.01.01 |
Cash generated from operations |
4,551,471 |
4,462,978 |
4,226,977 |
||
6.01.01.01 |
Profit for the year, including income tax and social contribution |
1,454,454 |
1,510,304 |
1,519,200 |
||
6.01.01.02 |
Depreciation and amortization |
1,279,902 |
1,159,964 |
1,055,230 |
||
6.01.01.03 |
Provision for tax, civil and labor risks |
258,539 |
191,228 |
316,787 |
||
6.01.01.04 |
Interest on debts, inflation adjustment and exchange rate changes |
1,519,819 |
1,486,061 |
1,294,281 |
||
6.01.01.05 |
Private pension plan |
60,184 |
48,165 |
61,665 |
||
6.01.01.06 |
Loss on disposal of noncurrent assets |
16,309 |
20,726 |
7,248 |
||
6.01.01.07 |
Deferred taxes - PIS and COFINS |
19,138 |
24,946 |
28,328 |
||
6.01.01.08 |
Others |
(5,824) |
(2,431) |
(5,218) |
||
6.01.01.09 |
Allowance for doubtful debts |
126,879 |
83,699 |
70,324 |
||
6.01.01.10 |
Share of profit (loss) of investees |
(216,885) |
(59,684) |
(120,868) |
||
6.01.01.11 |
Impairment |
38,956 |
- |
- |
||
6.01.02 |
Changes in assets and liabilities |
(1,993,497) |
(2,870,405) |
(1,709,431) |
||
6.01.02.01 |
Consumers, concessionaires and licensees |
(1,055,143) |
(265,103) |
129,731 |
||
6.01.02.02 |
Taxes recoverable |
(62,041) |
(134) |
42,176 |
||
6.01.02.03 |
Leases |
- |
- |
1,648 |
||
6.01.02.04 |
Escrow deposits |
22,827 |
65,732 |
101,310 |
||
6.01.02.05 |
Sector financial asset |
(858,860) |
(932,719) |
- |
||
6.01.02.06 |
Receivables - amounts from the Energy Development Account - CDE / CCEE |
181,141 |
(352,379) |
(145,571) |
||
6.01.02.07 |
Other operating assets |
(126,523) |
(41,665) |
(30,725) |
||
6.01.02.08 |
Trade payables |
787,063 |
470,982 |
191,089 |
||
6.01.02.09 |
Income tax and social contribution paid |
(276,061) |
(552,070) |
(559,879) |
||
6.01.02.10 |
Other taxes and social contributions |
412,703 |
193,357 |
(130,405) |
||
6.01.02.11 |
Other liabilities with private pension plan |
(112,172) |
(118,897) |
(85,546) |
||
6.01.02.12 |
Interest paid on debts and debentures |
(1,595,649) |
(1,333,570) |
(1,093,465) |
||
6.01.02.13 |
Regulatory charges |
808,223 |
11,415 |
(78,397) |
||
6.01.02.14 |
Other operating liabilities |
107,931 |
84,467 |
10,820 |
||
6.01.02.15 |
Tax, civil and labor risks paid |
(247,512) |
(188,000) |
(184,070) |
||
6.01.02.16 |
Dividends and interest on capital received |
24,050 |
40,374 |
112,607 |
||
6.01.02.17 |
Sector financial liability |
(23,170) |
21,998 |
- |
||
6.01.02.18 |
Payables - CDE |
19,696 |
25,807 |
9,246 |
||
6.02 |
Net cash generated by (used in) investing activities |
(1,524,894) |
(933,007) |
(1,694,539) |
||
6.02.02 |
Purchases of property, plant and equipment |
(550,003) |
(345,049) |
(882,588) |
||
6.02.03 |
Securities, pledges and restricted deposits |
(147,914) |
(7,839) |
41,392 |
||
6.02.05 |
Purchases of intangible assets |
(877,793) |
(716,818) |
(852,248) |
||
6.02.07 |
Sale of noncurrent assets |
10,586 |
43,024 |
80,945 |
||
6.02.10 |
Others |
- |
- |
(584) |
||
6.02.11 |
Payment of amount for business combination |
10,454 |
- |
- |
||
6.02.12 |
Intragroup loans |
29,776 |
949 |
(81,456) |
||
6.02.13 |
Increase in equity interest in existing investment |
- |
(45,445) |
- |
||
6.02.14 |
Business combination, net of cash acquired |
- |
70,829 |
- |
||
6.02.15 |
Repayment of advances to suppliers |
- |
67,342 |
- |
||
6.03 |
Net cash generated by (used in) financing activities |
292,267 |
(508,533) |
948,381 |
||
6.03.01 |
Borrowings and debentures raised |
4,532,167 |
3,186,384 |
5,958,322 |
||
6.03.02 |
Repayment of principal of borrowings and debentures |
(4,037,685) |
(2,559,771) |
(4,499,451) |
||
6.03.03 |
Dividends and interest on capital paid |
(5,204) |
(1,016,641) |
(838,990) |
||
6.03.04 |
Business combination payment |
(61,709) |
- |
- |
||
6.03.06 |
Repayment of derivative instruments |
(135,309) |
(119,628) |
- |
||
6.03.07 |
IPO of subsidiary |
- |
- |
328,500 |
||
6.03.08 |
Capital increase by noncontrolling interests |
7 |
1,123 |
- |
||
6.05 |
Increase (decrease) in cash and cash equivalents |
1,325,347 |
151,033 |
1,771,388 |
||
6.05.01 |
Cash and cash equivalents at the beginning of the year |
4,357,455 |
4,206,422 |
2,435,034 |
||
6.05.02 |
Cash and cash equivalents at the end of the year |
5,682,802 |
4,357,455 |
4,206,422 |
||
16
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated Financial Statements
|
(In thousands of Brazilian reais – R$) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Code |
Description |
Paid-in capital |
Capital reserves, stock options and treasury stock |
Earnings reserves |
Retained earnings/ |
Other comprehensive income |
Equity |
Noncontrolling interests |
Consolidated equity |
|
5.01 |
Opening balances |
4,793,424 |
468,082 |
1,536,136 |
- |
145,892 |
6,943,534 |
2,453,795 |
9,397,329 |
||
5.03 |
Adjusted opening balances |
4,793,424 |
468,082 |
1,536,136 |
- |
145,892 |
6,943,534 |
2,453,795 |
9,397,329 |
||
5.04 |
Capital transactions with shareholders |
554,888 |
- |
(554,888) |
(199,826) |
- |
(199,826) |
(8,140) |
(207,966) |
||
5.04.01 |
Capital increase |
554,888 |
- |
(554,888) |
- |
- |
- |
- |
- |
||
5.04.08 |
Prescribed dividends |
- |
- |
- |
5,597 |
- |
5,597 |
- |
5,597 |
||
5.04.09 |
Dividend proposal approved |
- |
- |
- |
(205,423) |
- |
(205,423) |
(8,147) |
(213,570) |
||
5.04.10 |
Capital increase in subsidiaries with no change in control |
- |
- |
- |
- |
- |
- |
7 |
7 |
||
5.05 |
Total comprehensive income |
- |
- |
- |
864,940 |
65,548 |
930,488 |
10,337 |
940,825 |
||
5.05.01 |
Profit for the year |
- |
- |
- |
864,940 |
- |
864,940 |
10,337 |
875,277 |
||
5.05.02 |
Other comprehensive income |
- |
- |
- |
- |
65,548 |
65,548 |
- |
65,548 |
||
5.06 |
Internal changes in equity |
- |
- |
691,233 |
(665,114) |
(26,119) |
- |
(50) |
(50) |
||
5.06.01 |
Recognition of reserves |
- |
- |
43,247 |
(43,247) |
- |
- |
- |
- |
||
5.06.05 |
Changes in statutory reserve in the year |
- |
- |
647,986 |
(647,986) |
- |
- |
- |
- |
||
5.06.06 |
Realization of deemed cost of property, plant and equipment |
- |
- |
- |
39,574 |
(39,574) |
- |
- |
- |
||
5.06.07 |
Tax on realization of deemed cost |
- |
- |
- |
(13,455) |
13,455 |
- |
- |
- |
||
5.06.09 |
Other changes in noncontrolling interests |
- |
- |
- |
- |
- |
- |
(50) |
(50) |
||
5.07 |
Closing balances |
5,348,312 |
468,082 |
1,672,481 |
- |
185,321 |
7,674,196 |
2,455,942 |
10,130,138 |
||
17
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) |
|||||||||||
Code |
Description |
Paid-in capital |
Capital |
Earnings reserves |
Retained earnings/ |
Other comprehensive income |
Equity |
Noncontrolling interests |
Consolidated equity |
||
5.01 |
Opening balances |
4,793,424 |
287,630 |
1,545,177 |
- |
397,668 |
7,023,899 |
1,774,818 |
8,798,717 |
||
5.03 |
Adjusted opening balances |
4,793,424 |
287,630 |
1,545,177 |
- |
397,668 |
7,023,899 |
1,774,818 |
8,798,717 |
||
5.04 |
Capital transactions with shareholders |
- |
180,452 |
(567,802) |
(416,472) |
- |
(803,822) |
728,926 |
(74,895) |
||
5.04.08 |
Prescribed dividends |
- |
- |
- |
5,723 |
- |
5,723 |
- |
5,723 |
||
5.04.09 |
Interim dividends |
- |
- |
- |
(422,195) |
- |
(422,195) |
(2,382) |
(424,577) |
||
5.04.10 |
Dividend proposal approved |
- |
- |
(567,802) |
- |
- |
(567,802) |
(27,156) |
(594,958) |
||
5.04.11 |
Redemption of capital reserve of non-controlling shareholders |
- |
- |
- |
- |
- |
- |
(2,189) |
(2,189) |
||
5.04.13 |
Capital increase in subsidiaries with no change in control |
- |
362 |
- |
- |
- |
362 |
760 |
1,123 |
||
5.04.14 |
Gain (loss) in participation with no change in control |
- |
(207) |
- |
- |
- |
(207) |
207 |
- |
||
5.04.15 |
Business combination CPFL Renováveis / DESA |
- |
180,297 |
- |
- |
- |
180,297 |
653,366 |
833,663 |
||
5.04.16 |
Business combination CPFL Renováveis / DESA effect of non-controlling of subsidiary |
- |
- |
- |
- |
- |
- |
106,320 |
106,320 |
||
5.05 |
Total comprehensive income |
- |
- |
- |
949,177 |
(225,720) |
723,457 |
(62,733) |
660,723 |
||
5.05.01 |
Profit for the year |
- |
- |
- |
949,177 |
- |
949,177 |
(62,733) |
886,443 |
||
5.05.02 |
Other comprehensive income |
- |
- |
- |
- |
(225,720) |
(225,720) |
- |
(225,720) |
||
5.05.02.06 |
Other comprehensive income: actuarial gains |
- |
- |
- |
- |
(225,720) |
(225,720) |
- |
(225,720) |
||
5.06 |
Internal changes in equity |
- |
- |
558,760 |
(532,705) |
(26,055) |
- |
(33) |
(33) |
||
5.06.01 |
Recognition of reserves |
- |
- |
47,459 |
(47,459) |
- |
- |
- |
- |
||
5.06.05 |
Changes in statutory reserve in the year |
- |
- |
620,288 |
(620,288) |
- |
- |
- |
- |
||
5.06.06 |
Realization of deemed cost of property, plant and equipment |
- |
- |
- |
39,478 |
(39,478) |
- |
- |
- |
||
5.06.07 |
Tax on realization of deemed cost |
- |
- |
- |
(13,423) |
13,423 |
- |
- |
- |
||
5.06.08 |
Realization/reversal of earnings retained investment |
- |
- |
(108,987) |
108,987 |
- |
- |
- |
- |
||
5.06.09 |
Other changes in non-controlling shareholders |
- |
- |
- |
- |
- |
- |
(33) |
(33) |
||
5.07 |
Closing balances |
4,793,424 |
468,082 |
1,536,135 |
- |
145,893 |
6,943,534 |
2,440,978 |
9,384,512 |
||
18
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) |
|||||||||||
Code |
Description |
Paid in capital |
Capital |
Earnings reserves |
Retained earnings/ |
Other comprehensive income |
Equity |
Noncontrolling interests |
Consolidated equity |
||
5.01 |
Opening balances |
4,793,424 |
228,322 |
1,339,286 |
56,293 |
(36,598) |
6,380,727 |
1,510,401 |
7,891,128 |
||
5.03 |
Adjusted opening balances |
4,793,424 |
228,322 |
1,339,286 |
56,293 |
(36,598) |
6,380,727 |
1,510,401 |
7,891,128 |
||
5.04 |
Capital transactions with shareholders |
- |
59,308 |
111,896 |
(925,679) |
- |
(754,475) |
252,868 |
(501,607) |
||
5.04.06 |
Dividends |
- |
- |
567,802 |
(567,802) |
- |
- |
- |
- |
||
5.04.08 |
Prescribed dividends |
- |
- |
- |
5,172 |
- |
5,172 |
- |
5,172 |
||
5.04.09 |
Interim dividends |
- |
- |
- |
(363,049) |
- |
(363,049) |
(2,301) |
(365,350) |
||
5.04.10 |
Dividend proposal approved |
- |
- |
(455,906) |
- |
- |
(455,906) |
(17,589) |
(473,495) |
||
5.04.11 |
IPO CPFL Renováveis |
- |
59,308 |
- |
- |
- |
59,308 |
269,192 |
328,500 |
||
5.04.12 |
Noncontrolling interests' capital increase in subsidiaries |
- |
- |
- |
- |
- |
- |
3,566 |
3,566 |
||
5.05 |
Total comprehensive income |
- |
- |
- |
937,419 |
460,226 |
1,397,645 |
11,617 |
1,409,262 |
||
5.05.01 |
Profit for the year |
- |
- |
- |
937,419 |
- |
937,419 |
11,617 |
949,036 |
||
5.05.02 |
Other comprehensive income |
- |
- |
- |
- |
460,226 |
460,226 |
- |
460,226 |
||
5.05.02.06 |
Other comprehensive income: actuarial gain |
- |
- |
- |
- |
460,226 |
460,226 |
- |
460,226 |
||
5.06 |
Internal changes in equity |
- |
- |
93,995 |
(68,033) |
(25,962) |
- |
(65) |
(65) |
||
5.06.01 |
Recognition of reserves |
- |
- |
46,871 |
(46,871) |
- |
- |
- |
- |
||
5.06.04 |
Changes in statutory reserve in the year |
- |
- |
(61,863) |
61,863 |
- |
- |
- |
- |
||
5.06.06 |
Realization of deemed cost of fixed assets |
- |
- |
- |
25,962 |
(25,962) |
- |
- |
- |
||
5.06.07 |
Other changes in non-controlling shareholders |
- |
- |
- |
- |
- |
- |
(65) |
(65) |
||
5.06.08 |
Changes in the reserve of retained earnings |
- |
- |
108,987 |
(108,987) |
- |
- |
- |
- |
||
5.07 |
Closing balances |
4,793,424 |
287,630 |
1,545,177 |
- |
397,666 |
7,023,897 |
1,774,821 |
8,798,718 |
||
19
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
| |||
|
|
|
|
|
|
|
|
Code |
Description |
Current Year |
Prior Year |
Prior Year |
|
7.01 |
Revenues |
34,377,361 |
23,057,172 |
20,202,380 |
||
7.01.01 |
Sales of goods and services |
32,862,289 |
21,851,381 |
18,334,968 |
||
7.01.02 |
Other revenues |
1,046,669 |
944,997 |
1,004,399 |
||
7.01.02.01 |
Revenue from construction of distribution infrastructure |
1,046,669 |
944,997 |
1,004,399 |
||
7.01.03 |
Revenues related to construction of own assets |
595,282 |
344,492 |
933,337 |
||
7.01.04 |
Recognition (reversal) of allowance for doubtful debts |
(126,879) |
(83,698) |
(70,324) |
||
7.02 |
Inputs purchased from third parties |
(17,590,769) |
(14,092,481) |
(12,112,642) |
||
7.02.01 |
Cost of sales and services |
(14,749,957) |
(11,780,445) |
(9,125,580) |
||
7.02.02 |
Materials, energy, third-party services and others |
(2,238,817) |
(1,866,059) |
(2,382,950) |
||
7.02.04 |
Others |
(601,995) |
(445,977) |
(604,112) |
||
7.03 |
Gross value added |
16,786,592 |
8,964,691 |
8,089,738 |
||
7.04 |
Retentions |
(1,281,726) |
(1,160,714) |
(1,057,264) |
||
7.04.01 |
Depreciation, amortization and depletion |
(979,062) |
(875,696) |
(760,287) |
||
7.04.02 |
Others |
(302,664) |
(285,018) |
(296,977) |
||
7.04.02.01 |
Amortization of concession intangible asset |
(302,664) |
(285,018) |
(296,977) |
||
7.05 |
Wealth created by the Company |
15,504,866 |
7,803,977 |
7,032,474 |
||
7.06 |
Wealth received in transfer |
1,861,444 |
962,928 |
843,978 |
||
7.06.01 |
Share of profit (loss) of investees |
216,885 |
59,684 |
120,868 |
||
7.06.02 |
Finance income |
1,644,559 |
903,244 |
723,110 |
||
7.07 |
Total wealth for distribution |
17,366,310 |
8,766,905 |
7,876,452 |
||
7.08 |
Wealth distributed |
17,366,310 |
8,766,905 |
7,876,452 |
||
7.08.01 |
Personnel and charges |
905,103 |
814,979 |
748,258 |
||
7.08.01.01 |
Salaries and wages |
562,082 |
500,471 |
460,477 |
||
7.08.01.02 |
Benefits |
298,738 |
275,322 |
251,652 |
||
7.08.01.03 |
FGTS (Severance Pay Fund) |
44,283 |
39,186 |
36,129 |
||
7.08.02 |
Taxes, fees and contributions |
12,910,440 |
5,044,467 |
4,421,938 |
||
7.08.02.01 |
Federal |
8,207,474 |
1,916,922 |
1,625,798 |
||
7.08.02.02 |
State |
4,688,978 |
3,109,743 |
2,782,086 |
||
7.08.02.03 |
Municipal |
13,988 |
17,802 |
14,054 |
||
7.08.03 |
Lenders and lessors |
2,675,490 |
2,021,016 |
1,757,220 |
||
7.08.03.01 |
Interest |
2,622,405 |
1,954,293 |
1,711,922 |
||
7.08.03.02 |
Rentals |
53,085 |
46,929 |
45,298 |
||
7.08.03.03 |
Others |
- |
19,794 |
- |
||
7.08.04 |
Shareholders |
875,277 |
886,443 |
949,036 |
||
7.08.04.02 |
Dividends |
557,200 |
208,673 |
836,452 |
||
7.08.04.03 |
Retained earnings / Loss for the year |
318,077 |
677,770 |
112,584 |
||
20
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Management Report
Dear Shareholders,
In compliance with the law and the Bylaws of the company, the Management of CPFL Energia S.A. (CPFL Energia) hereby submits to you the Management Report and financial statements of the Company, along with the reports of the independent auditor and fiscal council for the fiscal year ended December 31, 2015. All comparisons herein are made with consolidated figures for fiscal year 2014, except when specified otherwise.
1. Opening remarks
The year 2015 proved to be one of the most challenging in CPFL Energia’s history. Nevertheless, if we draw a parallel between the situation faced by the electricity sector at the start of 2015 with the current scenario, the progress made during the course of the year is remarkable.
In the beginning of 2015, the risk of rationing was imminent. With a wet period during which Affluent Natural Energy (ENA) in Brazil’s National Interconnected System (SIN) reached only 71% of the long-term average natural flow (MLT), SIN reservoirs closed April with 35% of their capacity. Recovery of the reservoirs came with an ENA of 113% of MLT during the dry period, combined with load shedding of 1.7% in Brazil in 2015. Now, in early 2016, the Electricity Sector Monitoring Committee (CMSE) calculated the risk of rationing at 0%, which means one less thing that industry players have to worry about.
In the regulatory area, significant progress was made. Energy distributors started the year with the threat of cash imbalances, without being able to rely on funds from the ACR account or the Treasury, which used to subsidize tariffs in the past. However, ANEEL authorized an Extraordinary Tariff Review (RTE), implemented on March 1, 2015, which partially offset the increase in the Parcel A (non-manageable) costs of Distributors. Parcel A was under pressure especially due to the increase in CDE, a sector charge that was significantly hiked at the start of 2015. Another mechanism implemented at the start of the year was dynamic pricing in the form of Tariff Flags, which was a quicker-reaction tool that enabled an additional charge in tariffs to cover the costs of thermal generation and the exposure of distributors to PLD (hydrological risk, ESS and involuntary exposure). Despite all this, the cash gap continued and the CPFL Energia group registered accumulated CVAs of about R$ 1.9 billion at the end of 3Q15, almost equivalent to one year’s cash generation of its energy distributors. In 4Q15, this scenario of accumulation of regulatory assets started being reversed, bringing some relief to the Company's working capital, which closed 2015 with around R$ 1.7 billion in accumulated CVAs.
Though “Tariff Realism”, which allowed readjustments in energy prices, was essential to mitigate cash flow gaps at the distributors, together with the macroeconomic downturn it led to a drop in energy sales, which recorded a consolidated decrease of 4.0% in the year, with 2.0% in residential consumption, 1.0% in commercial consumption and 6.9% in industrial consumption.
The year began with uncertainties surrounding the renewal of distribution concessions, whose terms had not been defined in the Provisional Measure nr. 579/2012, which only dealt with Generation and Transmission projects. During the year, ANEEL addressed the issue by setting the parameters for economic and financial sustainability and quality, which are fundamental to ensure quality customer service. On December 8, 2015, five Distributors that went through this process signed new agreements, which extended their concessions for another 30 years: CPFL Santa Cruz, CPFL Leste Paulista, CPFL Sul Paulista, CPFL Mococa and CPFL Jaguari.
Other important development in 2015 was the conclusion of the Public Hearing nr. 23/2014, which dealt with the Tariff Review methodologies of Distributors. Most of the methodologies were published in 1Q15, such as regulatory WACC and items such as Operating Costs, Other Revenue, Losses, General Procedures and Others. In December, the methodologies for the treatment of Regulatory Remuneration Base were published, thus concluding the process. The first group company to go through the 4th Tariff Review cycle was CPFL Piratininga, whose tariff event occurred on October 23, 2015. The progress achieved with the new conditions enabled CPFL Piratininga to increase by 5.31% its Parcel B (Parcel that remunerates Investment and covers operating costs and Investment costs). The average tariff increase of CPFL Piratininga was 21.11%.
21
Finally, the renegotiation of hydrological risk (GSF) of hydroelectric generators was another positive development for the sector, achieved during 2015 after four rounds of Public Hearing. Apart from the impact of adverse hydrological conditions, hydroelectric generation started decreasing also due to unforeseen factors beyond the control of hydroelectric power plants, such as thermal dispatch outside the merit order and growth in the reserve energy capacity, basically composed of wind power, a non-dispatchable source. These conditions have been negatively affecting the balance sheets of generators since the end of 2013. Plants were then offered the possibility of paying a premium to renegotiate this risk. CPFL Energia chose to renegotiate its eligible agreements in the Regulated Contracting Environment (ACR), under SP100 modality, protecting 100% of GSF until the end of the agreements. Renegotiation of hydrological risk returns to hydroelectric power generators, predictability and stability of cash flows.
Despite the improvements achieved in 2015, we must highlight the need for further progress on regulatory issues in order to create the incentives for the electricity sector to resume investments.
The challenges remain in 2016, given the worsening macroeconomic scenario in Brazil. However, the CPFL Energia group is committed to continuing its strategy of financial discipline and operational excellence in order to ensure long-term business sustainability in all the sectors it operates, while providing quality customer service and generating value for our stakeholders.
OWNERSHIP BREAKDOWN (simplified)
CPFL Energia is a holding company that owns stake in other companies:
22
Reference date: 12/31/2015
(1) Controlling shareholders;
(2) Includes the 0,5% stake of Caixa de Previdência dos Funcionários do Banco do Brasil;
(3) Includes the 0.2% stake of Petros e Sistel pension funds;
(4) Bounded shares, according to the Shareholders Agreement;
(4) 51.54% stake of the availability of power and energy of Serra da Mesa HPP, regarding the Power Purchase Agreement between CPFL Geração and Furnas.
2. Comments on the macroeconomic scenario
MACROECONOMIC SCENARIO
For one more year, global economic activity fell short of expectations. In January 2015, the IMF projected 3.5% growth in the year, a little above the 2014 growth of 3.1%. In December, it pointed to growth of 3.0% in the year, 0.5 p.p. below the initial estimate.
The below par performance was chiefly due to the performance of emerging economies, which should close 2015 with growth of 3.9% (versus 4.5% estimated at the start of the year). Behind this revision is the slowdown in China, which, by reducing its import demand, has affected commodity exporters such as Brazil, its main commercial partner.
Apart from the slowdown in China, the political scenario in a few emerging economies like Brazil, Argentina and Russia equally hampered expectations.
Amidst all the frustration, there were some pleasant surprises, such as the Eurozone, which should end 2015 with growth of 1.8% (compared to the initial forecast of 1.2%) The region’s growth recovery was driven, among others, by the price of oil, which slumped 75% in 18 months, enabling the partial transfer of the decline to the final price of gasoline and other byproducts. This decrease enabled a reduction in industrial costs and a positive impact on the shopping carts of European consumers.
The United States ended the year materializing the expected increase in basic interest rate after seven years between 0% and 0.25%, even though the job market has not given signs of a strong rebound (significant share of precarious work and part-time jobs) and the country is facing the threat of deflation (which tends to worsen with a hike in interest rates).
23
In Brazil, the macroeconomic scenario deteriorated significantly, with consequences on the job market and household consumption. Unemployment rate in December 2015 reached 6.9% of the economically active population (PME/IBGE), reversing the downward trend seen in the last six years. Increased unemployment led to a decline in average productivity and, consequently, in wages, adversely affecting the performance of business and industry. The crisis of confidence lasted throughout the year, not only as a result of economic activity, but mostly because of political instability and uncertainties regarding the fiscal adjustment and its consequences on the economy. Projections show that this scenario should continue in 2016 and so will the negative performance of industrial production, retail sales and wages.
REGULATORY ENVIRONMENT
The year 2015 was marked by the end of Government subsidies for tariffs and the beginning of payment, by consumers, of the loans taken by distributors though the CCEE.
The result was an increase of R$17 billion in the CDE compared to the annual quota of 2014. For the consumers of distribution concessionaires, the tariff impact of the new CDE quota was considered in the Extraordinary Tariff Review of 2015, and was different for consumers in the North/Northeast regions and the South/Southeast/Midwest regions, as well as for consumers of different voltage levels and between the captive and free markets.
Tariff Flags
The tariff flags methodology was launched in 2015 to show consumers the electricity generation conditions in the SIN by charging an additional amount to the Energy Tariff (TE). Different from the provisions of AP 120/2011, application of this methodology was altered to cover not only the costs of energy availability agreements, but also other items subject to changes in the spot market price (PLD). The new methodology also envisages sharing, among all distributors, of costs and revenues from the additional charges related to the tariff flags.
Tariff Review Methodology
In 2015, AP23/14 was concluded, which consolidated the Tariff Review methodology for 4thPTRC, the most significant amendment being the definition of the Regulatory Asset Base, which will partially be established by regulatory standards. The tariff review processes that took place in 2015 have already considered the new methodologies, except RAB, since the new Tariff Regulation Procedures (PRORET) establish a transition period.
Renewal of Concessions
Another important event in 2015 was Public Hearing No. 38 of 2015 (AP038/2015), which discussed extending distribution concessions with the agents and society through a draft Amendment to the Concession Agreement for Public Distribution of Electricity, in accordance with Decree No. 8,461 of June 2, 2015. The Amendment, approved by Dispatch No. 3,540 of October 20, 2015, establishes the obligations of economic and financial sustainability and compliance with quality indicators, under penalty of reversal of the concession, in addition to clauses on corporate governance and full neutrality of Parcel A items. On December 9, 2015, the CPFL Group signed the Amendments related to extension of the concession agreements of CPFL Santa Cruz, CPFL Jaguari, CPFL Mococa, CPFL Leste Paulista and CPFL Sul Paulista.
ABRACE Injunction
The significant increase in the CDE quota in 2015 was disputed in court by several associations. The ABRACE Injunction was effectively foreclosed through Lawsuit No. 26648-39.2015.4.01.3400, requesting the suspension of payment by its members of the controversial portion of the CDE tariff charge and the method of apportionment of the balance amounts in the budget. The injunction led to a tariff increase for other consumers, since there was no reduction in the quota to be paid by the distributors.
24
Generation Segment
In 2015, the main development in the Generation segment was the renegotiation of hydrological risk (GSF), established by Law 13,203/2015 (published in relation to MP 688), which enabled the hydroelectric plants of the CPFL Group to mitigate any negative impacts resulting from the Energy Reallocation Mechanism (MRE) by paying a premium and canceling all and any lawsuit on the matter.
Other important themes discussed in 2015 include: (i) change in the maximum and minimum limits of PLD to R$422.56/MWh and R$30.25/MWh, respectively, (REH 2,002 of December 15, 2015); (ii) restatement of TEIF and TEIP values (MME Decree No. 284/15) that will be used while revising the physical guarantee of HPPs; (iii) postponement of the revision of physical guarantee of hydroelectric plants for 2016, which will take place after the conclusion of studies by the specific working group (MME Decree No. 537/15); (iv) diverse lawsuits filed by hydroelectric agents as a result of the severe impacts on the Energy Reallocation Mechanism (MRE), due to lower energy allocation (GSF) caused by the adverse hydrological scenario, forced the MME to negotiate with agents and associations about Provisional Presidential Decree No. 688, which was later converted into Law No. 13,203/2015, enabling the renegotiation of hydrological risk. (v) concession auction No. 12/2015 relating to the diverse HPPs whose concessions had expired or were nearing expiry, particularly HPPs Jupiá (1,551.2 MW) and Ilha Solteira (3,444 MW); (vi) the numerous lots of transmission auctions for which there were no bids, which forced ANEEL to consider fewer projects per lot and more auctions per year, which was a good sign for investors; (vii) PL 1,917 - Portability and market opening, which basically establishes: (a) renewal of generation concessions for consideration, eliminating the model of ACR quotas, thus bringing in equality between the regulated and free environments; (b) generation auctions, with allocation of the hydrological risk to the generator and participation of trading companies, distributors and consumers; (c) decentralized auctions, through public bidding process, for contracting in the distribution market; (d) gradual opening up of the market to all consumers in the electricity sector; and (e) auctions of contractual remains of the distributor, with gains shared with consumers.
The following regulations are particularly important: (i) Normative Resolution No. 645 of December 19, 2014, published in the Federal Register on January 5, 2015, altering ANEEL's organizational structure. The Offices of Superintendent of Hydropower Management and Studies (SGH), Superintendent of Economic Regulation (SRE), Superintendent of Regulation of Commercial Services (SRC) and Superintendent of Planning and Management (SPG) were eliminated. The Offices of Superintendent of Economic Regulation and Market Studies (SRM) and Superintendent of Tariff Management (SGT) were created. (ii) Law No. 13,097, of January 19, 2015, originating from MP 656/2014, which implements Auctions A-0 and A-2 of existing energy and establishes the characteristics of SHPPs, expanding the limit of potential hydroelectric plants that require no authorization from ANEEL and only need to be registered with the concession granting authority, which is now 3,000 kW (from 1,000 kW earlier); (iii) Decree No. 8,401 of February 4, 2015, which establishes that the Electricity Trading Chamber (CCEE) must create and maintain the Centralized Account for Dynamic Pricing Funds to manage the funds obtained from the application of dynamic pricing implemented by ANEEL; (iv) MME Decree No. 39, which provides the guidelines and the system for carrying out Alternative Source Auctions of 2015 and amends article 9 of MME Decree No. 563 of October 17, 2014; (v) MME Decree No. 40 of February 27, 2015, which amends article 3 of MME Decree No. 653 of December 11, 2014, and also revokes the amendments to article 3, paragraph 2 of MME Decree No. 653 of December 11, 2014, in article 1 of MME Decree No. 12 of January 29, 2015; (vi) Dispatch No. 458 of February 27, 2015, authorizing the National Electricity System Operator (ONS) to sign with any agent authorized to import and/or export electricity, an agreement for use of the transmission system together with the use of
25
transmission facilities aimed at international interconnections, through agreements of at least one day, while forbidding more than one agreement per week; (vii) Dispatch No. 477 of February 27, 2015, establishes the amount of the Electricity Service Inspection Fee (TFSEE) for electricity distribution agents with contractual anniversary in March 2015; (viii) Ratification Resolution No. 1,857 of March 2, 2015 establishes the annual quota amount of the Energy Development Account for 2015; (ix) Ratification Resolution No. 1,858 of March 2, 2015 approves the results of the extraordinary tariff revision of 2015 and determines energy tariffs (TE) and Tariffs for Use of Distribution Systems (TUSD) for electricity distribution concessionaires; (x) Decree No. 69 of March 16, 2015, establishes that ANEEL must hold, directly or indirectly, an Auction for Contracting Reserve Energy, entitled 1st Reserve Energy Auction, in 2015; (xi) Decree No. 70 of March 17, 2015, establishes that ANEEL must hold, directly or indirectly, an Auction for Contracting Reserve Energy, entitled 2nd Reserve Energy Auction, in 2015; (xii) Normative Resolution No. 654 of March 31, 2015 amends ANEEL's Normative Resolution No. 570 of July 23, 2013, which addresses retail electricity trading in the National Interconnected System (SIN); (xiii) Decree No. 119 of April 8, 2015, establishes that ANEEL must hold, directly or indirectly, an Auction for Contracting Reserve Energy, entitled 3rd Reserve Energy Auction, in 2015; (xiv) Normative Resolution No. 658 of April 20, 2015, establishes the obligation to deliver energy under Electricity Trading Agreements in the Regulated Contracting Environment (CCEAR) by availability from the New Energy Auctions, and the criteria for allocating costs arising from the operation of thermal power plants dispatched by merit order, whose Variable Unit Cost (CVU) is higher than the Price for the Settlement of Differences (PLD); and amends article 21, paragraph 4 of Normative Resolution No. 622 of August 19, 2014; (xv) Decree No. 8,437 of April 23, 2015, regulates the provisions of article 7, head paragraph, item XIV, clause “h”, and sole paragraph of Complementary Law No. 140 of December 8, 2011, to establish the types of projects and activities whose environmental licensing will be the responsibility of the Federal Government; (xvi) Dispatch No. 1,252 of April 30, 2015, rejects the request for recognition of waiver from responsibility for the periods of delay in construction work at the Pimental and Belo Monte sites; rejects the request to change the implementation schedule of the Belo Monte Hydroelectric Plant, proposed by Norte Energia S.A.;<0} recognizes and rejects the request for an injunction; and recognizes and rejects, on merit, the request from NESA as the right of petition; (xvii) Dispatch No. 1,249 of May 7, 2015, recognizes and rejects, on merit, the request for reconsideration by Energia Sustentável do Brasil S.A., maintaining the recognition of the waiver from responsibility for the delay in the implementation schedule of the Jirau Hydroelectric Power Plant, and ratifies moving the timetable to August 1, 2013; revokes ANEEL Dispatch No. 3,588 of October 22, 2013, making the decision void and suspending, for a determined period, the enforceability of financial settlement of the CCEAR of said Plant, giving the concessionaire the option to submit a proposed Statement of Commitment to calculate the respective obligations; (xviii) Dispatch No. 1,250 of May 4, 2015, recognizes and rejects, on merit, the request from Santo Antônio Energia S.A. (Saesa) to postpone the start of supply under the Electricity Trading Agreements in the Regulated Contracting Environment of the Santo Antônio Hydroelectric Plant, and recalculate the agreements so as to account for in the Free Contracting Environment the energy supplied during the period prior to the definitive operational startup of the transmission system; (xix) Dispatch No. 1,251 of May 4, 2015 recognizes and rejects, on merit, the request by Santo Antônio Energia S.A. (Saesa) for recognition of causes for waiver of responsibility, given the absence of causal link between the events reported and the capacity to perform the Electricity Trading Agreements in the Regulated Contracting Environment; (xx) Normative Resolution No. 666 of June 29, 2015 regulates the contracting of the use of transmission system in a permanent, flexible, temporary manner, and the reserve capacity, the methods for establishing charges, and revokes article 14 of ANEEL Resolution No. 281 of October 1, 1999, ANEEL Resolution No. 371 of December 29, 1999, ANEEL Normative Resolution No. 399 of April 13, 2010, ANEEL Normative Resolution No. 429 of March 15, 2011, and articles 5 and 6 of ANEEL Normative Resolution No. 422 of July 26, 2011; (xxi) Dispatch No. 1,840 of June 29, 2015 determines that the Electricity Trading Chamber (CCEE) amend the votes and membership contribution module to transfer to retailers the votes of generators with installed capacity equal to or greater than 50 MW not committed to regulated agreements and who choose to be represented by retailers; (xxii) Normative Resolution No. 673 of September 2, 2015,
26
establishes the requirements and procedures to obtain authorization to explore the water potential with characteristics of a Small Hydroelectric Power Plant (SHPP); revokes Chapter VI of ANEEL Resolution No. 395 of December 4, 1998, ANEEL Resolution No. 652 of December 9, 2003, and the contrary provisions established in ANEEL Normative Resolution No. 343 of December 9, 2008; amends ANEEL Normative Resolution No. 395 of 1998 and ANEEL Normative Resolution No. 412 of October 5, 2010; (xxiii) Decree No. 556/2015 of December 29, 2015, recognizes the need to import electricity from Uruguay, as an exception and temporarily, through the Rivera Frequency Converters in the city of Rivera, Uruguay, Santana do Livramento and Jaguarão in the state of Rio Grande do Sul, and future Melo Converter in the city of Melo, Uruguay. (xxiv) Decree No. 555/2015 of December 29, 2015, approves the Ten Year Energy Expansion Plan (PDE 2024), available on the website of the Ministry of Mines and Energy (MME).
Distribution Segment
Significant economic, financial, technical and commercial regulations include the following, by date of publication: (i) REN No. 648/2015 – Approves the revision of Sub-module 2.4 of the Tariff Regulation Procedures (PRORET), which establish the methodology to determine the optimum capital structure and capital cost to be used to calculate the Periodical Tariff Reviews of electricity distribution concessionaires; (ii) REN No. 649/2015 - Approves Sub-module 6.8 of PRORET, related to Dynamic Pricing, and stipulates other measures; (iii) REN No. 650/2015 - Amends Module 7.1 of PRORET, which addresses the General Procedures for the Tariff Structure of Distribution Concessionaires; (iv) REN No. 652/2015 – Approves the revision of Sub-modules 3.1, 8.2 and 10.2 of PRORET, which determine the general procedures, order and conditions for carrying out the Annual Tariff Adjustment (RTA) of public electricity distribution concessionaires and licensees; (v) REN No. 657/2015 - Amends Module 7 of PRORET, which addresses the Tariff Structure of Distribution Concessionaires and stipulates other measures; (vi) REN No. 658/2015 – Establishes the obligation to deliver energy under CCEARs based on availability from New Energy Auctions and the criterion for allocating costs arising from the operation of thermal power plants dispatched by merit order, whose Variable Unit Cost is higher than the Price for the Settlement of Differences; (vii) REN No. 660/2015 - Amends Sub-modules 2.1, 2.2, 2.5, 2.6 and 2.7 of PRORET; (viii) REN No. 664/2015 – Approves the amendment to Modules 1, 6 and 8 of the Procedures for Electricity Distribution in the National Electricity System (PRODIST); (ix) REN No. 670/2015 – Improves Normative Resolution No. 414/2010 regarding approval of private projects and establishment of a construction schedule, and stipulates other measures; (x) REN No. 674/2015 – Approves the revision of the Manual of Control of the Electricity Sector Assets (MCPSE), instituted by Normative Resolution No. 367 of June 2, 2009; (xi) REN No. 683/2015 - Approves the Rules for Electricity Trading applicable to the Accounting and Settlement System (SCL); (xii) REN No. 684/2015 - Establishes the criteria for approval and other conditions for renegotiation of the hydrological risk of hydroelectric generation by agents participating in the Energy Reallocation Mechanism; (xiii) REN No. 685/2015 – Approves the revision of Sub-module 3.1 of PRORET, which establishes the general procedures for the Annual Tariff Adjustment of Distribution Concessionaires; (xiv) REN No. 686/2015 – Approves Sub-module 2.3 of PRORET, which defines the methodology of the Regulatory Remuneration Base of electricity distribution concessionaires; (xv) REN No. 687/2015 – Amends Normative Resolution No. 482 of April 17, 2012, and Modules 1 and 3 of PRODIST; (xvi) REN No. 688/2015 – Approves the revision of Module 5 of PRODIST and amends Normative Resolution No. 506 of September 4, 2012; (xvii) REN No. 689/2015 – Approves the revision of Sub-module 6.8 of PRORET, which addresses Dynamic Pricing; (xviii) REN No. 691/2015 – Regulates the release, by initiative of industry agent, of assets linked to energy generation, transmission and distribution services; (xix) REN No. 693/2015 – Establishes the criteria for applying the mechanism of compensation of electricity surpluses and deficits and the capacity under Electricity Trading Agreements arising from new generation projects; (xx) REN No. 694/2015 – Amends Sub-module 6.8 of PRORET and Normative Resolution No. 547 of April 16, 2013.
27
ELECTRICITY TARIFFS AND PRICES
Distribution Segment
Annual Tariff Adjustments (ATA) in 2015:
CPFL Paulista
Aneel Ratifying Resolution No. 1,871 of April 07, 2015 readjusted electric energy tariffs of CPFL Paulista by 41.45%, being 37.31% related to the Economic Adjustment and 4.14% as financial components outside the Tariff Readjustment. This Tariff Reajustment replaces the ETR, which corresponds to an average effect of 4.67% on consumer billings. The impact of the Parcel A (Energy, Transmission Charges and Sector Charges) in the readjustment was of 36.85% and of the Parcel B was of 0.46%. The calculation took into account the change in the Extraordinary Tariff Review occured in February 2015. The new tariffs came into force on April 08, 2015.
RGE
Aneel Ratifying Resolution No. 1,896 of June 16, 2015 has readjusted electric energy tariffs of RGE by 33.48%, being 24.99% related to the Tariff Readjustment and 8.50% as financial components outside the Tariff Readjustment. This Tariff Reajustment replaces the ETR, which corresponds to an average effect of -3.76 % on consumer billings. The new tariffs came into force on June 19, 2015.
CPFL Santa Cruz, CPFL Leste Paulista, CPFL Jaguari, CPFL Sul Paulista and CPFL Mococa
On February 03, 2015, Aneel approved the indexes of Annual Tariff Adjustments 2015 of the distributors CPFL Santa Cruz, CPFL Leste Paulista, CPFL Jaguari, CPFL Sul Paulista and CPFL Mococa distributors, as shown in the table below:
The new tariffs came into force on February 03, 2015.
2015 Extraordinary Tariff Review (ETR)
On February 27, ANEEL approved, through Resolution No. 1,858 / 2015, the Extraordinary Tariff Review - ETR of electricity distributors contended that such revision, among them the
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distributors CPFL Group. This ETR was necessary to restore the economic and financial balance of these concessionaries to meet the following facts: (i) increase the dollar rate to R$2,80/US$ and the tariff applied to the power purchase agreements with Itaipu HPP in 2015; (ii) increase in power purchase cost of the 2015 Adjustment Auction and 2014 Existing Energy Auction; (iii) significant increase in the CDE quota in 2015; and (iv) exclusion of financial component from the prediction of exposure/overcontracting. For the distributors CPFL Santa Cruz, CPFL Jaguari, CPFL Mococa, CPFL Leste Paulista e CPFL Sul Paulista, ETR was needed to reflect the new CDE quota in 2015, to suit the dollar rate to pay for the energy purchased from Itaipu and to exclude the financial component from the prediction of exposure/overcontracting, because the other items had already been considered in the Annual Tariff Adjustment (ATA), in February 3, 2015. The new tariffs came into force on March 02, 2015.
The extraordinary tariff adjustments are shown, by distributor, in the following table:
On April 07, ANEEL changed, through Resolution No. 1,870 / 2015, the Extraordinary Tariff Review - ETR of the distributors CPFL Leste Paulista, CPFL Sul Paulista, CPFL Jaguari, CPFL Mococa, CPFL Santa Cruz. This correction was necessary to change the value of the monthly quotas of CDE – energy related to ACR, intended for repayment of loans contracted by CCEE in the management of ACR account. The rates resulting from this rectification entered into force on April 8, 2015.
The effect of the restatement of extraordinary tariff revisions in relation to the original ETR approved are shown, by distributor, in the following table:
Periodical Tariff Review Cycle
CPFL Piratininga
On October, the Regulatory Agency (ANEEL) ended the tariff review process of CPFL Piratininga. The change in methodology impacts positively Parcel B. The key factors of the tariff review are the addition of special obligations reward, the WACC increase from 7.50% to 8.09% and the increase of the net RAB (Regulatory Asset Basis). Thus, the Parcel B lifted 5.31% when compared to the old tariff (from R$ 717 Million to R$ 755 Million). About the accumulated Regulatory Assets and Liabilities (CVA), the transfer allowed by ANEEL is estimated in R$ 475 Million. In comparison with the Extraordinary Tariff Review (February, 2015), the averaged effect for consumer billings will be 21.11%, which represents 8.10% of Parcel A, 1.36% of Parcel B and 11.65% of financial components. The impact on high tension consumers billings will be 16.60%. On the other hand, the impact on low tension consumers billings will be 24.81%.
Find below the key topics about the result of CPFL Piratininga 4th TRPC:
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Generation Segment
Electricity sale contracts of generators contain specific adjustment clauses, whose main index is the average annual variation measured by the IGP-M. Contracts signed in the Regulated Contracting Environment (ACR) are indexed to the IPCA, and bilateral contracts signed by Enercan use a combination of dollar and IGP-M indexes.
3. Operating Performance
ENERGY SALES
In 2015, sales to the captive market totaled 41,730 GWh, down 3.3% from 2014, while energy supplied to free clients, billed through the Distribution System Use Tariff (TUSD), fell 5.8% to 15,829 GWh. These reductions reflect the turmoil of the macroeconomic scenario, which has resulted in the drop in industrial production, lower sales volume of retail trade and reducing real income mass. As such, sales in the concession area, made through the distribution segment, decreased by 4.0% to 57,558 GWh.
It is noteworthy the performance of the residential and commercial segments, which together accounted 45.4% of total consumption in the concession area of the Group's distributors:
· Residential and commercial segments: 2.0% and 1.0% decrease, respectively. This performance reflects the changes in the labor market, with the hike of unemployment, the decrease of the volume in real income and the increase in electricity tariffs. These classes were also negatively impacted by milder temperatures.
· Industrial segment: down 6.9%, reflecting weaker performance of the economic activity and the fall of the business confidence in the industry recently and excessive inventories observed in the industry in recent months.
Commercialization and generation sales (excluding related parties) came to 17,033 GWh, up 3.7% due to reduced sales by our Commercialization arm in bilateral contracts. In recent years, CPFL Brasil has been focusing its energy sales efforts on special clients that acquire energy from alternative sources. The number of free and special clients in the portfolio came to 246 in December 2015.
PERFORMANCE IN THE ELECTRICITY DISTRIBUTION SEGMENT
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The Group maintained its strategy of encouraging the dissemination and sharing of best management and operational practices at its distributors in an effort to increase operational efficiency and improve the quality of services provided to clients.
Find below the results posted by distributors in the main indicators that measure quality and reliability of power supply. The Equivalent Duration of Interruptions (SAIDI) measures the average duration, in hours, of interruptions suffered by consumers in the year, while the SAIFI (Equivalent Frequency of Interruptions) measures the average number of interruptions suffered per consumer per year.
PERFORMANCE IN THE ELECTRICITY GENERATION SEGMENT
In 2015, CPFL Energia continued its expansion in the Generation segment, with a 0.1% increase in installed capacity, from 3,127 MW to 3,129 MW, considering its 51.6% interest in CPFL Renováveis. This increase was driven by the expansion of CPFL Renováveis.
On December 31, 2015, the portfolio of CPFL Renováveis totaled 1,802 MW of installed capacity in operation, comprising 38 SHPPs (399 MW), 34 wind farms (1,032 MW), 8 biomass-powered thermal power plants (370 MW) and 1 solar plant (1 MW). Still under construction are 11 wind farms (282 MW) and 2 SHPPs (51 MW), whose startup schedule is: 255 MW in 2016, 51.3 MW in 2018 and 26.5 MW in 2020.
In April 2015, the Morro dos Ventos II wind farm, located in the city of João Câmara (Rio Grande do Norte), started operating with installed capacity of 29.2 MW, eight months ahead of schedule.
4. Economic and Financial Performance
The Management’s comments on economic and financial performance and the operating results should be read together with the financial statements and notes to the financial statements.
Operating Revenues
Net operating revenues, excluding revenue from the construction of concession infrastructure, grew 17.1% (R$2,798 million), reaching a total of R$19,159 million, mainly due to the: (i) 21.6% increase in the Distribution segment (R$2,761 million), driven by tariff adjustments applied during the year and by the increase of the balance of sectoral financial assets; (ii) 28.5% increase in Generation from Renewable Sources (R$280 million), reflecting the commercial start-up of new projects. These effects were partially off-set by the decrease of 20.8% (R$ 150 million) and 4.9% (R$ 92 million) observed in Conventional Generation and Commercialization and Services segments, respectively, mainly due to lower prices in the spot market.
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It is important to note that a portion of sales by these generation projects is made to other CPFL Group companies and the corresponding revenue is eliminated in the consolidated report.
Operating Cash Flow - EBITDA
EBITDA is a non-accounting measurement calculated by Management as the sum of income, taxes, financial income/loss, depreciation and amortization. This measurement serves as an indicator of management performance and is usually monitored by the market. Management complied with the concepts of CVM Instruction 527 of October 4, 2012, while calculating this non-accounting measurement.
Reconciliation of Net Income and EBITDA | ||
|
2015 |
2014 |
Net Income |
875,277 |
886,443 |
Depreciation and Amortization |
1,281,038 |
1,161,145 |
Financial Income/Loss |
1,014,520 |
1,089,454 |
Social contribution |
160,162 |
168,989 |
Income tax |
419,015 |
454,871 |
EBITDA |
3,750,012 |
3,760,903 |
Operating cash flow, as measured by EBITDA, came to R$3,750 million, a decrease of 0.3% (R$ 11 million), mainly due to a 25.1% increase in costs with energy purchase and sector charges (R$ 2,669 million) and by the variation of R$ 14.7% in operating costs, including expenses with private pension fund (R$ 296 million). These effects were off-set by the increase of 17.1% in net revenue, excluding income from construction of concession infrastructure, in the amount of R$ 2,798 million, especially due to the variation in financial sector assets (R$1,596 million), and the increase in equity income (R$ 157 million).
Net Income
In 2015, Net Income came to R$875 million, down 1.3% (R$ 11 million), mainly due to the increase in depreciation and amortization (R$ 120 million), particularly due to the startup of new generation projects of CPFL Renováveis, and the 0.3% decrease in EBITDA (R$ 11 million). These effects were partially offset by a decrease in net financial expenses (R$ 75 million) and income tax and social contribution (R$ 45 million).
Allocation of Net Income from the Fiscal Year
The Company’s Bylaws require the distribution of at least 25% of net income adjusted according to law, as dividends to its shareholders. The proposal for allocation of net income from the fiscal year is shown below:
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Minimum Mandatory Dividend (25%)
The Board of Directors propose the payment of R$ 205 million in dividends to holders of common shares traded on the BM&FBovespa – Bolsa de Valores, Mercadorias e Futuros S.A. (BM&FBOVESPA). This proposed amount corresponds to R$ 0.206868475 per share, related to the year 2015.
Statutory Reserve – Strengthening of Working Capital
For this fiscal year, considering the current adverse economic scenario and the uncertainties regarding market projections for distributors due to energy efficiency campaigns and extraordinary tariff increases occurred during the year 2015, the Company’s Management proposes the allocation of R$ 393 million to the statutory reserve – strengthening of working capital.
Stock Dividend for Shareholders
To strengthen the Company’s capital structure, the Board of Executive Officers meeting held on March 7, 2016, recommended that the Board of Directors propose to the Shareholders Meeting the capitalization of the balance of the statutory reserve – strengthening of working capital, through the issue of new shares to shareholders. This proposal will be submitted for approval by the Extraordinary Shareholders Meeting called for April 29, 2016.
Debt
At the close of 2015, gross financial debt (including derivatives) came to R$19,489 million, up 5.0%. Cash and cash equivalents totaled R$5,863 million, up 30.4%. As such, net debt decreased 2.8% to R$13,806 million.
The increase in financial debt was to support the strategic expansion of the Group’s business, such as financing for greenfield projects conducted by CPFL Renováveis. Furthermore, however, CPFL Energia adopts a pre-funding strategy whereby it anticipates funding of debt that matures in 18 to 24 months.
The nominal cost of debt increased 2.4 percentage points to 12.6% per year due to the hike in the Selic interest rate, while average debt term is 3.61 years.
5. Investments
In 2015, investments of R$ 1,428 million were made in business maintenance and expansion, of which R$ 868 million was directed to distribution, R$ 500 million to generation (R$ 493 million to CPFL Renováveis and R$ 7 million to conventional generation) and R$ 58 million to commercialization and services. In addition, we invested R$ 37 million in the construction of CPFL Transmissão’s transmission lines and, according to the requirements of IFRIC 12, it was recorded as “Financial Asset of Concession” in non current assets. CPFL Energia also recorded R$ 255 million in Special Obligations in the fiscal year, among other items financed by the consumer.
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CPFL Energia’s investments in 2015 include:
6. Corporate Governance
The corporate governance model adopted by CPFL Energia ("CPFL" or "Company") and its subsidiaries is based on the principles of transparency, equity, accountability and corporate responsibility.
In 2015, CPFL marked 11 years since being listed on the BM&FBovespa and the New York Stock Exchange (“NYSE”). With more than 100 years of history in Brazil, the Company’s shares are listed on the Novo Mercado Special Listing Segment of the BM&FBovespa with Level III ADRs, a special segment for companies that comply with corporate governance best practices. All CPFL shares are common shares, entitling all shareholders the right to vote with 100% Tag Along rights guaranteed in case of sale of shareholding control.
CPFL’s Management is composed of the Board of Directors (Board), its decision-making authority, and the Board of Executive Officers, its executive body. The Board is responsible for defining the strategic business direction of the holding company and subsidiaries, and is composed of 7 external members, one of whom an Independent Member, whose term of office is 1 year and who are eligible for reelection.
The Bylaws of the Board establishes the procedures for evaluating the directors, under the leadership of the Chairman, their main duties and rights.
The Board set up three advisory committees (Risk Management Processes, People Management and Related Parties), all coordinated by a director, which support the Board in its decisions and monitor relevant and strategic themes, such as people and risk management, sustainability, the surveillance of internal audits and analysis of transactions with Parties Related to controlling shareholders and handling of incidents recorded through complaint hotlines and ethical conduct channels.
To ensure that best practices permeate all activities of the Board and its relations with the Company while the Board members are focused on their decision-making functions, in 2006 the Company created the Board of Directors Advisory Council, which reports directly and solely to the Chairman of the Board. In 2015, the name was changed to Corporate Governance Advisory.
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This Advisory Council acts as the guardian of best practices to ensure compliance with Governance Guidelines; speed of communication between the Company and its Board members; quality and timeliness of information; integration and evaluation of members of the Board of Directors and the Audit Board; constant improvement of governance processes and institutional relations with government authorities and entities.
In May 2015, the Board of Executive Officers’s structure was reformulate, according to the Governance Guidelines. The Bylaws change, approved by the Board of Directors in April, 29 2015, established a new Vice President position, under the management of the Chief Executive Officer, increasing the number of Vice Presidents from 5 to 6, all of them guided by the Sucession Plan. The Vice Presidents are elected for two years, eligibles for reelection, responsibles for executing the strategy of CPFL and its subsidiaries as defined by the Board of Directors in line with governance guidelines. Thus, CPFL Energia aims to create the basis to consolidate itself as the Brazilian electric sector leader, always aiming the efficient management and looking for opportunities to create sustainable value for all its shareholders.
CPFL has a permanent Audit Board, made up of 5 members, that also exercises the duties of the Audit Committee, in line with Sarbanes-Oxley law (SOX) rulings applicable to foreign companies listed on U.S. stock exchanges.
The guidelines and documents on corporate governance are available at the Investor Relations website http://www.cpfl.com.br/ri.
7. Capital Markets
The shares of CPFL Energia, which currently has a free float of 31.9%, are listed both on the São Paulo Stock Exchange (BM&FBovespa) and the New York Stock Exchange (NYSE). In 2015, CPFL Energia shares depreciated 15.3% on the BM&FBovespa and depreciated 45.3% on the NYSE, closing the year at R$15.18 per share and US$7.42 per ADR, respectively. The average daily trading volume in 2015 was R$38.0 million, of which R$24.3 million on the BM&FBovespa and R$13.7 million on the NYSE, representing an decrease of 0.6% over 2014. Number of trades on the BM&FBovespa increased 8.1%, from a daily average of 5.535 trades in 2014 to 5,984 in 2015.
8. Sustainability and Corporate Responsibility
CPFL Energia rolls out initiatives aimed at generating value for all its stakeholders and to mitigate the impacts of its operations by managing the economic, environmental and social risks associated with its business. Following are the highlights from the year:
Sustainability platform: it is sustainability management tool integrated to the strategic planning of the CPFL Group. It addresses the following: a) Relevant topics for conducting business, defined in consultation with stakeholders; b) Value levers related to the topics; c) Corporate strategic indicators, with performance targets for the short and medium term.
Sustainability Committee: main internal body for sustainability governance, also responsible for monitoring the Platform.
Ethics Management and Development System (SGDE): the revision of the Code of Ethics was concluded at the end of 2015, to align it with the changes that were happening in society and the business environment. The new Code of Ethics was approved by the board of directors and will be implemented in 2016 across the CPFL Energia Group, together with the updated Ethics Management and Development System. In 2015 there were ten Ethics Committee meetings were held, which addressed matters related to the dissemination of ethical guidelines, and also analyzed proposals, suggestions and reports of violation of the Code in force.
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Human Resource Management: the company ended 2015 with 9,584 employees (8,838 in 2014), with turnover of 19.90% (23.40% in 2014). The Group companies maintained their management and training programs, focused on developing strategic business skills, leadership succession, productivity and occupational health and safety. Average training hours per employee stood at 59.6 (78.4 in 2014), above the 2015 Sextant Survey average of 51 hours. Also this year, for the fourteenth consecutive year CPFL Energia was included in the “Best Places to Work in Brazil” ranking published by Guia Você S/A / Exame, scoring improvements in Knowledge Management, Electricians School and Talent Management, with one more batch of professionals with the potential to occupy leadership positions.
Value Network: in 2015, 81 supplier companies participated and 5 bimonthly meetings were held, which addressed the following issues: 2015 objectives of the Value Network, supplier management, strategies for sustainability, challenges of the electricity sector, outsourcing, BRR investment plans for 2015/2016, "Energy in the Cities of the Future" project, electric mobility, solar roofing, innovation and overcoming challenges, with a lecture by Amyr Klink.
Community relations: (i) Culture – important partnerships, such as with CDP (Carbon Disclosure Project) and the municipal government of Campinas, guided debates on the environment and new sources of energy in the country, which were presented at the Contemporary Invention program. These and other meetings were recorded, edited, published on social media and on the website www.cpflcultura.com.br and will also be shown on TV Cultura. In addition to debates, free to the public and transmitted live, the CPFL Cultura Institute also organized free movie sessions in 2015 in honor of renowned directors, such as Spike Jonze, Wes Anderson and Richard Linklater, classical music concerts, and took the CPFL Art and Culture Circuit to the interior region of São Paulo, which included exhibition of Brazilian films, documentaries and sustainability workshops in partnership with the Cinesolar project, a travelling theater powered by solar power; (ii) Program for Revitalization of Philanthropic Hospitals – implemented in 2005, it aims to improve the administrative performance of philanthropic hospitals and improve their services to the community. In 2015, the Program acted on two fronts: continuation of training programs on hospital management, serving 20 hospitals in the regions of Barretos and Marilia; and working together with the Regional Committee of Ribeirão Preto, consisting of Philanthropic Hospitals trained in previous phases of the Program. Investments in 2015 came to R$750,000; (iii) Support to Municipal Councils for the Rights of Children and Adolescents – CMDCA (1% of Income Tax) – In 2015, the Group companies donated R$261,000 to the Municipal Fund for Children and Adolescents. These funds will support the Action Plans resulting from the situational diagnosis carried out in 2015. Of the nine Councils supported in 2014, Ribeirão Claro/PR and São José do Rio Pardo/SP completed the diagnosis and presented consistent action plants and hence the amount available, which is much lower than in previous years, was allocated to these two cities; (iv) Support to Municipal Councils for the Rights of the Elderly – CMDI (1% of Income Tax) – In 2015, a sum of R$261,000 was donated to the Elderly Fund of Veranópolis (Rio Grande do Sul) to support the continuation of diagnosis, stage 2 of the Project "City for All Ages", started in 2015; (v) National Program to Support Oncological Services – PRONON (1% of Income Tax) – in 2015, CPFL donated R$261,000 to the Centro Infantil Boldrini. PRONON’s mission is to raise and channel funds to cancer prevention and combat initiatives; (vi) National Program for Healthcare of the Disabled (PRONAS / PCD) – in 2015, CPFL donated R$261,000 to Specialized Rehabilitation Center SORRI-BAURU; (vii) Volunteering – consolidation of the Semear Program, which has ongoing actions with greater sharing of value. In 2015, there were 72 actions involving approximately 3,000 volunteers. The actions organized in 13 cities of the concession area benefitted approximately 60,000 people. The program saw a few milestones, such as the training module applied in the Leadership Trail and the launch of Semear's social network (V2V – Volunteer to Volunteer). (viii) Energy Efficiency (0.5% of Net Operating Revenue) – more than R$59.8 million were invested, including R$39.3 million on projects targeted at consumers with lower
36
purchasing power, which resulted in the regularization of 1,503 customers, replacement of 8,412 refrigerators, 134,754 light bulbs with more efficient models (LED) and installation of 3,582 solar heaters, 3,500 heat exchangers and 7,376 E-Power electronic controllers to reduce shower consumption. The Company also implemented educational projects, CPFL nas Escolas and the Program for Energy Efficiency Education in Industries (PEEE), at 235 municipal and state government schools, training 23,940 students, 1,039 teachers in 87 cities at an investment of more than R$5.4 million. In addition, 36 public buildings, 39 schools and 13 hospitals here made energy efficient at an investment of over R$7.3 million, in addition to three water supply services and four industries, at a total investment of more than R$2.3 million. (ix) Electrician School – mission is to train a group of skilled electricians and mitigate the risks of a labor blackout. It is also a social investment as it offers free training for the labor market, while also training future employees before hiring them. Until 2015, we had trained 173 new electricians, of whom 112 were hired; and (x) SENAI Apprentice – program created in 2012 and maintained in the same format until 2015. The program trains youth through the SENAI School and at the end of training, those with the best performance in the program are hired for available vacancies. Until 2015, 89 youth had been trained and 41 hired by CPFL. In 2016, CPFL plans to expand its partnership with vocational schools approved by the Ministry of Education and open new batches for electrician training using PRONATEC funds.
Environmental management: (i) CPFL Energia’s 2014 inventory of Greenhouse Gas (GHG) emissions was awarded a gold medal by the Brazilian GHG Protocol Program; (ii) the company’s shares were once again included in the Dow Jones Sustainability Emerging Markets Index. CPFL Energia’s shares were also included, for the eleventh consecutive year, in the Corporate Sustainability Index (ISE) of the BM&FBovespa for 2016; and (iii) each Group company implemented projects to mitigate the social and environmental impacts of its projects, notably:
Energy generation - Foz do Chapecó HPP – (i) In 2015, 148,000 curimbatá and gold fish fry were released into the Uruguay River to repopulate it. The fry were produced at the Fish Farming Station of Águas de Chapecó through a partnership between the company and the Goio-En Institute; (ii) the fishermen associations benefitted by the Fishermen Support Program participated in technical visits to learn new techniques in fish farming and processing. The visits, sponsored by Foz do Chapecó Energia, received technical supervision from SEBRAE and Emater; (iii) The external audit of the certifications for the FCE Integrated Management System (ISO 9001, ISO 14001 and OHSAS 18001) was carried out in November 2015 by certifying authority BSI, which recommended maintenance of the certifications obtained by the company; Companhia Energética Rio das Antas (Ceran) – has an Integrated Management System at its headquarters and its plants (Monte Claro, Castro Alves and 14 de Julho). The System meets the requirements of the ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007 standards, and its certificates are valid through January 2018; Campos Novos HPP (Enercan) – (i) In 2015, ENERCAN supported a number of actions for the region's development in the cultural, social, environmental and economic spheres, supporting 31 projects, generating 500 direct, indirect or temporary jobs, and benefitting over 36,000 people. One of these projects, Environmental Protectors, is implemented in partnership with the Environmental Military Police and trains students to act as multipliers of environmental preservation; (ii) for the fourth consecutive year, ENERCAN implemented the Permanent Preservation Area (PPA) Conservation Project in partnership with people living near the reservoir of the Campos Novos HPP, rewarding the five best initiatives; (iii) in partnership with Epagri, Senar and Agriculture Departments, ENERCAN supported fruit and fish farming projects to contribute to the development of the local economy and provide an alternative for farmers in the region to earn income. In addition to financial support from Enercan, participants receive free courses on cooperativism, associativism, rural property management, entrepreneurship, as well as training on specific skills such as production and handling techniques; Barra Grande HPP (BAESA) – (i) in 2015, the Social and Environmental Responsibility Program supported 40 projects in cities within the area of influence of the Barra Grande HPP. Focused on income generation, environment, culture, sports, public safety and social development, the projects received investments of R$424,000 from the company, and another R$1.2 million from shareholders and local partners; (ii) implementation of the 4th edition of the Program to
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Encourage Conservation of the Permanent Preservation Area of the Reservoir, which recognizes actions by inhabitants of the region to preserve the vegetation. In 2015, ten inhabitants were awarded in a ceremony held during BAESA's 8th Sustainability Week, an event conducted every year to showcase the social and environmental projects implemented in cities within the area of influence of the Barra Grande HPP. (iii) The ISO 14001 and OHSAS 18001 certifications were maintained after an external audit, which verified the effective functioning of the Integrated Management System; (iv) BAESA set up a Community Advisory Council to strengthen dialogue with the community living around the Barra Grande HPP. The goal is for institutions to promote debates to determine the investments in health, education, safety and environmental protection in the cities of the region; (v) BAESA's transparency and correct statement of greenhouse gas emissions (GHG) earned it the Gold Seal of the GHG Protocol. The Gold Seal is the highest honor conferred by the Program and attests to the transparency of information provided in BAESA's 2014 Inventory.
Energy distribution – (i) continuation of the Urban Road Forestation Program, with the donation of seedlings to municipal authorities in the state of São Paulo; (ii) its Advanced Stations are periodically assessed for environmental risks and legal requirements, a ranking system is set and an action plan is drawn up for improvements; (iii) for environmental emergencies, distributors have agreements with a specialized company and have environmental insurance. For minor incidents, Advanced Stations and vehicles equipped with hydraulic devices carry environmental emergency kits for immediate use; (iii) CPFL Paulista launched the Arborização + Segura (Safer Forestation) Project to revitalize urban forestation in partnership with the cities in its concession area.
9. Independent Auditors
Deloitte Touche Tohmatsu Auditores Independentes (Deloitte) was hired by CPFL Energia to provide external audit services for the Company’s financial statements. In accordance with CVM Instruction 381/03, we inform that Deloitte did not provide, in 2015, any services not related to audit, whose fees were more than 5% of all fees received for this service.
In the fiscal year ended December 31, 2015, apart from the audit of financial statements and review of interim information, Deloitte provided the following audit services:
As can be seen, the CPFL Energia did not hire Deloitte to provide non-audit services in fiscal year 2015.
As a policy, CPFL Energia does not hire independent auditors to provide non-audit services. The hiring of independent auditors, in accordance with the Bylaws, is recommended by the Fiscal Council, and the Board of Directors deliberates on the selection or removal of independent auditors.
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The Management of CPFL Energia declares that all the services were provided strictly in accordance with the standards that deal with the independence of independent auditors in audit work and did not represent situations that could affect the independence and objectivity required by Deloitte to carry out external audit services.
10. Acknowledgements
The Management of CPFL Energia thanks its shareholders, customers, suppliers and communities in the areas of operations of its subsidiaries for their trust in the company in 2015. It also thanks, in a special way, its employees for their competence and dedication in meeting the objectives and targets set.
The Management
For more information on the performance of this and other companies of the
CPFL Energia Group, visit www.cpfl.com.br/ir.
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(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Annual Social Report - 2015 / 2014 (*) |
||||||
Company: CPFL Energia S.A. Consolidated |
||||||
1 - Basis for Calculation |
2015 Value (R$ thousand) |
2014 Value (R$ thousand) | ||||
Net Revenues (NR) |
20,205,869 |
17,305,942 | ||||
Operating Result (OR) |
1,454,454 |
1,510,304 | ||||
Gross Payroll (GP) |
782,645 |
684,724 | ||||
2 - Internal Social Indicators |
Value (thousand) |
% of GP |
% of NR |
Value (thousand) |
% of GP |
% of NR |
Food |
72,660 |
9.28% |
0.36% |
61,294 |
8.95% |
0.35% |
Mandatory payroll taxes |
205,699 |
26.28% |
1.02% |
185,320 |
27.06% |
1.07% |
Private pension plan |
42,840 |
5.47% |
0.21% |
38,630 |
5.64% |
0.22% |
Health |
45,960 |
5.87% |
0.23% |
39,364 |
5.75% |
0.23% |
Occupational safety and health |
2,750 |
0.35% |
0.01% |
3,193 |
0.47% |
0.02% |
Education |
2,550 |
0.33% |
0.01% |
2,223 |
0.32% |
0.01% |
Culture |
0 |
0.00% |
0.00% |
0 |
0.00% |
0.00% |
Trainning and professional development |
7,054 |
0.90% |
0.03% |
7,742 |
1.13% |
0.04% |
Day-care / allowance |
1,073 |
0.14% |
0.01% |
969 |
0.14% |
0.01% |
Profit / income sharing |
52,772 |
6.74% |
0.26% |
62,283 |
9.10% |
0.36% |
Others |
7,260 |
0.93% |
0.04% |
6,885 |
1.01% |
0.04% |
Total - internal social indicators |
440,618 |
56.30% |
2.18% |
407,903 |
59.57% |
2.36% |
3 - External Social Indicators |
Value (thousand) |
% of OR |
% of NR |
Value (thousand) |
% of OR |
% of NR |
Education |
7 |
0.00% |
0.00% |
125 |
0.01% |
0.00% |
Culture |
11,123 |
0.76% |
0.06% |
8,723 |
0.58% |
0.05% |
Health and sanitation |
450 |
0.03% |
0.00% |
346 |
0.02% |
0.00% |
Sport |
1,665 |
0.11% |
0.01% |
1,373 |
0.09% |
0.01% |
War on hunger and malnutrition |
0 |
0.00% |
0.00% |
0 |
0.00% |
0.00% |
Others |
9,569 |
0.66% |
0.05% |
6,455 |
0.43% |
0.04% |
Total contributions to society |
22,814 |
1.57% |
0.11% |
17,022 |
1.13% |
0.10% |
Taxes (excluding payroll taxes) |
12,763,719 |
877.56% |
63.17% |
4,911,425 |
325.19% |
28.38% |
Total - external social indicators |
12,786,533 |
879.13% |
63.28% |
4,928,447 |
326.32% |
28.48% |
4 - Environmental Indicators |
Value (thousand) |
% of OR |
% of NR |
Value (thousand) |
% of OR |
% of NR |
Investments relalated to company production / operation |
27,482 |
1.89% |
0.14% |
31,837 |
2.11% |
0.18% |
Investments in external programs and/or projects |
59,895 |
4.12% |
0.30% |
57,625 |
3.82% |
0.33% |
Total environmental investments |
87,377 |
6.01% |
0.43% |
89,462 |
5.92% |
0.52% |
Regarding the establishment of "annual targets" to minimize residues, the consumption in production / operation and increase efficiency in the use of natural resources, the company: |
( ) do not have targets ( ) fulfill from 51 to 75% |
( ) do not have targets ( ) fulfill from 51 to 75% | ||||
5 - Staff Indicators |
|
2015 |
|
|
2014 |
|
Nº of employees at the end of period |
|
9,885 |
|
|
9,136 |
|
Nº of employees hired during the period |
|
2,257 |
|
|
2,405 |
|
Nº of outsourced employees |
|
ND |
|
|
NA |
|
Nº of interns |
|
169 |
|
|
188 |
|
Nº of employees above 45 years age |
|
2,148 |
|
|
2,107 |
|
Nº of women working at the company |
|
2,224 |
|
|
2,146 |
|
% of management position occupied by women |
|
8.77% |
|
|
9.94% |
|
Nº of Afro-Brazilian employees working at the company |
|
1,969 |
|
|
1,684 |
|
% of management position occupied by Afro-Brazilian employees |
|
2.34% |
|
|
1.17% |
|
Nº of employees with disabilities |
|
344 |
|
|
289 |
|
6 - Relevant information regarding the exercise of corporate citizenship |
|
2015 |
|
|
2014 |
|
Ratio of the highest to the lowest compensation at company |
|
17.92 |
|
|
21.03 |
|
Total number of work-related accidents |
|
54 |
|
|
54 |
|
Social and environmental projects developed by the company were decided upon by: |
( ) directors |
(X) directors |
( ) all |
( ) directors |
(X) directors |
( ) all |
Health and safety standards at the workplace were decided upon by: |
( ) directors |
( ) all |
(X) all + Cipa |
( ) directors |
( ) all |
(X) all + Cipa |
Regarding the liberty to join a union, the right to a collective negotiation and the internal representation of the employees, the company: |
( ) does not |
( ) follows the |
(X) motivates |
( ) does not |
( ) follows the |
(X) motivates |
The private pension plan contemplates: |
( ) directors |
( ) directors |
(X) all |
( ) directors |
( ) directors |
(X) all |
The profit / income sharing contemplates: |
( ) directors |
( ) directors |
(X) all |
( ) directors |
( ) directors |
(X) all |
In the selection of suppliers, the same ethical standards and social / environmental responsibilities adopted by the company: |
( ) are not |
( ) are |
(X) are |
( ) are not |
( ) are |
(X) are |
Regarding the participation of employees in voluntary work programs, the company: |
( ) does not |
( ) supports |
(X) organizes |
( ) does not |
( ) supports |
(X) organizes |
Total number of customer complaints and criticisms: |
in the company |
in Procon |
in the Courts |
in the company |
in Procon |
in the Courts |
|
2,025,091 |
1,947 |
6,323 |
1,964,743 |
1,386 |
6,025 |
% of complaints and criticisms attended to or resolved: |
in the company |
in Procon |
in the Courts |
in the company |
in Procon |
in the Courts |
|
100% |
100% |
137.6% |
100% |
100% |
5.8% |
Total value-added to distribute (R$ thousand): |
In 2015 |
17,366,310 |
|
In 2014 |
8,766,905 |
|
Value-Added Distribution (VAD): |
74,3% government 5,2% employees 1,0% shareholders |
57,5% government 9,3% employees 8,7% shareholders | ||||
7 - Other information |
|
|
|
|
| |
Responsible: Sergio Luis Felice, phone: +55 19 3756-8018, slfelice@cpfl.com.br | ||||||
(*) Information not reviewed by the independent auditors |
40
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
CPFL ENERGIA S.A. | |||||||||
Statement of Financial Position as of December 31, 2015 and 2014 | |||||||||
(in thousands of Brazilian reais) | |||||||||
Parent company |
Consolidated | ||||||||
ASSETS |
Note |
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 (*) | ||||
CURRENT ASSETS |
|||||||||
Cash and cash equivalents |
5 |
424,192 |
799,775 |
5,682,802 |
4,357,455 | ||||
Consumers, concessionaires and licensees |
6 |
- |
- |
3,174,918 |
2,251,124 | ||||
Dividends and interest on capital |
13 |
1,227,590 |
942,367 |
91,392 |
54,483 | ||||
Securities |
- |
- |
23,633 |
5,324 | |||||
Taxes recoverable |
7 |
72,885 |
49,071 |
475,211 |
329,638 | ||||
Derivatives |
35 |
70,153 |
- |
627,493 |
23,260 | ||||
Sector financial asset |
8 |
- |
- |
1,464,019 |
610,931 | ||||
Materials and Supplies |
- |
- |
24,129 |
18,505 | |||||
Leases |
10 |
- |
- |
12,883 |
12,396 | ||||
Concession financial asset |
11 |
- |
- |
9,630 |
540,094 | ||||
Other receivables |
12 |
942 |
976 |
922,541 |
1,011,495 | ||||
TOTAL CURRENT ASSETS |
1,795,763 |
1,792,189 |
12,508,652 |
9,214,704 | |||||
NONCURRENT ASSETS |
|||||||||
Consumers, concessionaires and licensees |
6 |
- |
- |
128,946 |
123,405 | ||||
Associates, subsidiaries and parent company |
32 |
2,814 |
12,089 |
84,265 |
100,666 | ||||
Escrow Deposits |
22 |
630 |
546 |
1,227,527 |
1,162,477 | ||||
Taxes recoverable |
7 |
- |
- |
167,159 |
144,383 | ||||
Sector financial assets |
8 |
- |
- |
489,945 |
321,788 | ||||
Derivatives |
35 |
- |
- |
1,651,260 |
584,917 | ||||
Deferred tax assets |
9 |
140,389 |
150,628 |
334,886 |
938,496 | ||||
Advance for future capital increase |
13 |
52,680 |
55,157 |
- |
- | ||||
Leases |
10 |
- |
- |
34,504 |
35,169 | ||||
Concession financial asset |
11 |
- |
- |
3,597,474 |
2,834,522 | ||||
Investments at cost |
- |
- |
116,654 |
116,654 | |||||
Other receivables |
12 |
14,919 |
15,818 |
560,014 |
388,828 | ||||
Investments |
13 |
6,940,036 |
6,290,998 |
1,247,631 |
1,098,769 | ||||
Property, plant and equipment |
14 |
1,215 |
843 |
9,173,217 |
9,149,486 | ||||
Intangible assets |
15 |
24 |
18 |
9,210,338 |
8,930,171 | ||||
TOTAL NONCURRENT ASSETS |
7,152,706 |
6,526,098 |
28,023,819 |
25,929,732 | |||||
TOTAL ASSETS |
8,948,469 |
8,318,287 |
40,532,471 |
35,144,436 |
(*) Balances include the effect presented in note 13.4.
The accompanying notes are an integral part of these financial statements.
41
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
CPFL ENERGIA S.A. | |||||||||
Statement of Financial Position as of December 31, 2015 and 2014 | |||||||||
(in thousands of Brazilian reais) | |||||||||
Parent company |
Consolidated | ||||||||
LIABILITIES AND EQUITY |
Note |
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 (*) | ||||
CURRENT LIABILITIES |
|||||||||
Trade payables |
16 |
1,157 |
791 |
3,161,210 |
2,374,147 | ||||
Interest on debts |
17 |
38,057 |
- |
118,267 |
97,525 | ||||
Interest on debentures |
18 |
- |
15,020 |
232,227 |
293,108 | ||||
Borrowings |
17 |
935,196 |
- |
2,831,654 |
1,093,500 | ||||
Debentures |
18 |
- |
1,289,386 |
458,165 |
2,042,075 | ||||
Private pension plan |
19 |
- |
- |
802 |
85,374 | ||||
Regulatory charges |
20 |
- |
- |
852,017 |
43,795 | ||||
Taxes, fees and contributions |
21 |
747 |
1,859 |
653,342 |
436,267 | ||||
Dividends and interest on capital payable |
25 |
212,531 |
13,555 |
221,855 |
19,086 | ||||
Estimated payroll |
- |
- |
79,924 |
70,252 | |||||
Derivatives |
35 |
981 |
- |
981 |
38 | ||||
Sector financial liability |
8 |
- |
- |
- |
21,998 | ||||
Use of public asset |
23 |
- |
- |
9,457 |
4,000 | ||||
Other payables |
24 |
18,041 |
17,877 |
904,971 |
835,941 | ||||
TOTAL CURRENT LIABILITIES |
1,206,708 |
1,338,488 |
9,524,873 |
7,417,104 | |||||
NONCURRENT LIABILITIES |
|||||||||
Trade payables |
16 |
- |
- |
633 |
633 | ||||
Interest on debts |
17 |
- |
- |
120,659 |
60,717 | ||||
Interest on debentures |
18 |
- |
- |
16,487 |
- | ||||
Borrowings |
17 |
- |
- |
11,592,206 |
9,426,634 | ||||
Debentures |
18 |
- |
- |
6,363,552 |
6,136,400 | ||||
Private pension plan |
19 |
- |
- |
474,318 |
518,386 | ||||
Deferred tax liabilities |
9 |
- |
- |
1,432,594 |
1,401,009 | ||||
Provision for tax, civil and labor risks |
22 |
1,635 |
725 |
569,534 |
508,151 | ||||
Derivatives |
35 |
- |
- |
33,205 |
13,317 | ||||
Use of public asset |
23 |
- |
- |
83,124 |
80,992 | ||||
Provision for equity interest losses |
13 |
33,969 |
- |
- |
- | ||||
Other payables |
24 |
31,961 |
35,540 |
191,148 |
183,766 | ||||
TOTAL NONCURRENT LIABILITIES |
67,565 |
36,264 |
20,877,460 |
18,330,004 | |||||
EQUITY |
25 |
||||||||
Issued capital |
5,348,312 |
4,793,424 |
5,348,312 |
4,793,424 | |||||
Capital reserves |
468,082 |
468,082 |
468,082 |
468,082 | |||||
Legal reserve |
694,058 |
650,811 |
694,058 |
650,811 | |||||
Statutory reserve - concession financial asset |
585,451 |
330,437 |
585,451 |
330,437 | |||||
Statutory reserve - working capital improvement |
392,972 |
554,888 |
392,972 |
554,888 | |||||
Accumulated comprehensive income |
185,321 |
145,893 |
185,321 |
145,893 | |||||
7,674,196 |
6,943,535 |
7,674,196 |
6,943,535 | ||||||
Equity attributable to noncontrolling interests |
- |
- |
2,455,942 |
2,453,794 | |||||
TOTAL EQUITY |
7,674,196 |
6,943,535 |
10,130,138 |
9,397,329 | |||||
TOTAL LIABILITIES AND EQUITY |
8,948,469 |
8,318,287 |
40,532,471 |
35,144,436 |
(*) Balances include the effect presented in note 13.4.
The accompanying notes are an integral part of these financial statements.
42
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
| |||||||||
CPFL ENERGIA S.A. | |||||||||
Statement of income for the years ended on December 31, 2015 and 2014 | |||||||||
(in thousands of Brazilian reais, except for earnings per share) | |||||||||
Parent company |
Consolidated | ||||||||
Note |
2015 |
2014 |
2015 |
2014 | |||||
Net operating revenue |
27 |
1,157 |
61 |
20,205,869 |
17,305,942 | ||||
Cost of electric energy services |
|||||||||
Cost of electric energy |
28 |
- |
- |
(13,311,747) |
(10,643,130) | ||||
Operating cost |
29 |
- |
- |
(1,907,197) |
(1,672,359) | ||||
Services rendered to third parties |
29 |
- |
- |
(1,049,101) |
(946,052) | ||||
|
|
|
| ||||||
Gross operating income |
1,157 |
61 |
3,937,825 |
4,044,401 | |||||
Operating expenses |
29 |
||||||||
Sales expenses |
- |
- |
(464,583) |
(402,698) | |||||
General and administrative expenses |
(29,911) |
(26,175) |
(863,499) |
(773,630) | |||||
Other operating expense |
- |
- |
(357,653) |
(328,000) | |||||
|
|
|
| ||||||
Income from electric energy service |
(28,754) |
(26,114) |
2,252,090 |
2,540,073 | |||||
Equity in subsidiaries |
13 |
926,951 |
1,011,185 |
216,885 |
59,684 | ||||
Finance income (expense) |
30 |
||||||||
Income |
74,854 |
117,855 |
1,558,047 |
890,436 | |||||
Expense |
(97,802) |
(143,319) |
(2,572,567) |
(1,979,890) | |||||
(22,948) |
(25,464) |
(1,014,520) |
(1,089,454) | ||||||
Income before taxes |
875,250 |
959,607 |
1,454,454 |
1,510,304 | |||||
Social contribution |
9 |
(797) |
5,172 |
(160,162) |
(168,989) | ||||
Income tax |
9 |
(9,513) |
(15,602) |
(419,015) |
(454,871) | ||||
(10,309) |
(10,430) |
(579,177) |
(623,860) | ||||||
Net income |
864,940 |
949,177 |
875,277 |
886,443 | |||||
Net income attributable to controlling shareholders |
864,940 |
949,177 | |||||||
Net income/(loss) attributable to noncontrolling shareholders |
10,337 |
(62,733) | |||||||
Earnings per share attributable to controlling shareholders - basic - R$ |
26 |
0.87 |
0.96 |
0.87 |
0.96 | ||||
Earnings per share attributable to controlling shareholders - diluted - R$ |
26 |
0.85 |
0.94 |
0.85 |
0.94 |
The accompanying notes are an integral part of these financial statements.
43
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
| ||||
CPFL Energia S.A. | ||||
Statement of comprehensive income for the years ended on December 31, 2105 and 2014 | ||||
(In thousands of Brazilian reais – R$) | ||||
Parent company | ||||
2015 |
2014 | |||
Net income |
864,940 |
949,177 | ||
Other comprehensive income: |
||||
Items that will not be reclassified subsequently to profit or loss: |
||||
Equity on comprehensive income of subsidiaries |
65,547 |
(225,720) | ||
Comprehensive income of the year - parent company |
930,488 |
723,457 | ||
Consolidated | ||||
2015 |
2014 | |||
Net income |
875,277 |
886,443 | ||
Other comprehensive income: |
||||
Items that will not be reclassified subsequently to profit or loss: |
||||
- Actuarial gain/(loss), net of tax effects |
65,547 |
(225,720) | ||
Comprehensive income of the year - consolidated |
940,825 |
660,724 | ||
Comprehensive income attributable to controlling shareholders |
930,488 |
723,457 | ||
Comprehensive income attributable to non controlling shareholders |
10,337 |
(62,733) |
The accompanying notes are an integral part of these financial statements.
44
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
| |||||||||||||||||||||||||||
CPFL Energia S.A. | |||||||||||||||||||||||||||
Statement of changes in shareholders' equity for the years ended on December 31, 2015 and 2014 | |||||||||||||||||||||||||||
(In thousands of Brazilian reais – R$) | |||||||||||||||||||||||||||
Profit reserves |
Accumulated comprehensive income |
Net equity attributable to noncontrolling shareholders |
|
||||||||||||||||||||||||
|
|
|
Statutory reserve |
|
|
|
|
|
|
|
|||||||||||||||||
Issued capital |
Capital reserves |
Legal reserve |
Reserve of retained earnings for investment |
Concession financial asset |
Working capital improvement |
Dividend |
Deemed Cost |
Post-employment benefit obligation |
Retained earnings |
Total |
Accumulated comprehensive income |
Other equity |
Total Shareholders' equity | ||||||||||||||
Balance at December 31, 2013 |
4,793,424 |
287,630 |
603,352 |
108,987 |
265,036 |
- |
567,802 |
509,666 |
(111,998) |
- |
7,023,899 |
18,490 |
1,756,328 |
8,798,718 | |||||||||||||
Total comprehensive income |
- |
- |
- |
- |
- |
- |
- |
- |
(225,720) |
949,177 |
723,457 |
- |
(62,733) |
660,724 | |||||||||||||
Net income for the year |
- |
- |
- |
- |
- |
- |
- |
- |
- |
949,177 |
949,177 |
- |
(62,733) |
886,443 | |||||||||||||
Other comprehensive income: actuarial gain (loss) |
- |
- |
- |
- |
- |
- |
- |
- |
(225,720) |
- |
(225,720) |
- |
- |
(225,720) | |||||||||||||
Internal changes of shareholders' equity |
- |
- |
47,459 |
- |
65,400 |
554,888 |
(26,055) |
- |
(532,705) |
- |
(1,487) |
1,455 |
(33) | ||||||||||||||
Realization of deemed cost of fixed assets |
- |
- |
- |
- |
- |
- |
- |
(39,478) |
- |
39,478 |
- |
(2,254) |
2,254 |
- | |||||||||||||
Tax on deemed cost realization |
- |
- |
- |
- |
- |
- |
- |
13,422 |
- |
(13,422) |
- |
766 |
(766) |
- | |||||||||||||
Legal reserve |
- |
- |
47,459 |
- |
- |
- |
- |
- |
- |
(47,459) |
- |
- |
- |
- | |||||||||||||
Realization/reversal of earnings retained investment |
- |
- |
- |
(108,987) |
- |
- |
- |
- |
- |
108,987 |
- |
- |
- |
- | |||||||||||||
Changes in statutory reserve for the year |
- |
- |
- |
- |
65,400 |
554,888 |
- |
- |
- |
(620,288) |
- |
- |
- |
- | |||||||||||||
Other changes in non-controlling shareholders |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(33) |
(33) | |||||||||||||
Capital transactions with the shareholders |
- |
180,452 |
- |
- |
- |
- |
- |
- |
- |
(416,472) |
(803,822) |
- |
741,743 |
(62,079) | |||||||||||||
Prescribed dividend |
- |
- |
- |
- |
- |
- |
- |
- |
- |
5,722 |
5,722 |
- |
- |
5,722 | |||||||||||||
Interim dividend |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(422,195) |
(422,195) |
- |
(2,382) |
(424,576) | |||||||||||||
Additional dividend approved |
- |
- |
- |
- |
- |
- |
(567,802) |
- |
- |
- |
(567,802) |
- |
(27,156) |
(594,958) | |||||||||||||
Redemption of capital reserve of non-controlling shareholders |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(2,189) |
(2,189) | |||||||||||||
Capital increase in subsidiaries with no change in control |
- |
362 |
- |
- |
- |
- |
- |
- |
- |
- |
362 |
- |
760 |
1,123 | |||||||||||||
Gain (loss) in participation with no change in control |
- |
(207) |
- |
- |
- |
- |
- |
- |
- |
- |
(207) |
- |
207 |
- | |||||||||||||
Business combination CPFL Renováveis / DESA |
- |
180,297 |
- |
- |
- |
- |
- |
- |
- |
- |
180,297 |
- |
653,366 |
833,663 | |||||||||||||
Business combination CPFL Renováveis / DESA effect of non-controlling of subsidiary (*) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
119,137 |
119,137 | |||||||||||||
Balance at December 31, 2014 (*) |
4,793,424 |
468,082 |
650,811 |
- |
330,437 |
554,888 |
- |
483,610 |
(337,718) |
- |
6,943,535 |
17,003 |
2,436,791 |
9,397,329 | |||||||||||||
Total comprehensive income |
- |
- |
- |
- |
- |
- |
- |
- |
65,547 |
864,940 |
930,488 |
- |
10,337 |
940,825 | |||||||||||||
Net income for the year |
- |
- |
- |
- |
- |
- |
- |
- |
- |
864,940 |
864,940 |
- |
10,337 |
875,277 | |||||||||||||
Other comprehensive income: actuarial gain (loss) |
- |
- |
- |
- |
- |
- |
- |
- |
65,547 |
- |
65,547 |
- |
- |
65,547 | |||||||||||||
Internal changes of shareholders' equity |
- |
- |
43,247 |
- |
255,013 |
392,972 |
- |
(26,119) |
- |
(665,113) |
- |
(1,683) |
1,635 |
(48) | |||||||||||||
Realization of deemed cost of fixed assets |
- |
- |
- |
- |
- |
- |
- |
(39,574) |
- |
39,574 |
- |
(2,550) |
2,550 |
- | |||||||||||||
Tax on deemed cost realization |
- |
- |
- |
- |
- |
- |
- |
13,455 |
- |
(13,455) |
- |
867 |
(867) |
- | |||||||||||||
Legal reserve |
- |
- |
43,247 |
- |
- |
- |
- |
- |
- |
(43,247) |
- |
- |
- |
- | |||||||||||||
Changes in statutory reserve for the year |
- |
- |
- |
- |
255,013 |
392,972 |
- |
- |
- |
(647,985) |
- |
- |
- |
- | |||||||||||||
Other changes in non-controlling shareholders |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(48) |
(48) | |||||||||||||
Capital transactions with the shareholders |
554,888 |
- |
- |
- |
- |
(554,888) |
- |
- |
- |
(199,826) |
(199,826) |
- |
(8,140) |
(207,966) | |||||||||||||
Capital increase |
554,888 |
- |
- |
- |
- |
(554,888) |
- |
- |
- |
- |
- |
- |
- |
- | |||||||||||||
Prescribed dividend |
- |
- |
- |
- |
- |
- |
- |
- |
- |
5,597 |
5,597 |
- |
- |
5,597 | |||||||||||||
Dividend proposal approved |
- |
- |
- |
- |
- |
- |
- |
- |
- |
(205,423) |
(205,423) |
- |
(8,147) |
(213,570) | |||||||||||||
Capital increase in subsidiaries with no change in control |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
7 |
7 | |||||||||||||
Balance at December 31, 2015 |
5,348,312 |
468,082 |
694,058 |
- |
585,451 |
392,972 |
- |
457,491 |
(272,171) |
- |
7,674,196 |
15,320 |
2,440,623 |
10,130,138 | |||||||||||||
(*) Include the effect presented in note 13.4.
The accompanying notes are an integral part of these financial statements.
45
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
| |||||||
CPFL Energia S.A. | |||||||
Statement of cash flow for the years ended on December 31, 2015 and 2014 | |||||||
(In thousands of Brazilian reais – R$) | |||||||
Parent company |
Consolidated | ||||||
December 31, 2015 |
|
December 31, 2014 |
December 31, 2015 |
|
December 31, 2014 | ||
Income, before income tax and social contribution |
875,250 |
959,607 |
1,454,454 |
1,510,304 | |||
Adjustment to reconcile Income to cash provided by operating activities |
|||||||
Depreciation and amortization |
170 |
173 |
1,279,902 |
1,159,964 | |||
Provision for tax, civil and labor risks |
1,497 |
640 |
258,539 |
191,228 | |||
Allowance for doubtful accounts |
- |
- |
126,879 |
83,699 | |||
Interest and monetary adjustment |
94,588 |
142,278 |
1,519,819 |
1,486,061 | |||
Post-employment benefit loss (gain) |
- |
- |
60,184 |
48,165 | |||
Interest in subsidiaries, associates and joint ventures |
(926,951) |
(1,011,185) |
(216,885) |
(59,684) | |||
Impairment |
- |
- |
38,956 |
- | |||
Loss (gain) on the write-off of noncurrent assets |
- |
- |
16,309 |
20,726 | |||
Deferred taxes (PIS and COFINS) |
- |
- |
19,138 |
24,946 | |||
Other |
- |
- |
(5,825) |
(2,431) | |||
44,553 |
91,513 |
4,551,470 |
4,462,977 | ||||
Decrease (increase) in operating assets |
|||||||
Consumers, concessionaires and licensees |
- |
- |
(1,055,143) |
(265,103) | |||
Dividend and interest on equity received |
627,014 |
1,248,982 |
24,050 |
40,374 | |||
Taxes recoverable |
(12,350) |
1,564 |
(62,041) |
(134) | |||
Escrow deposits |
(48) |
(444) |
22,827 |
65,732 | |||
Sector financial asset |
- |
- |
(858,860) |
(932,719) | |||
Resources provided by the Energy Development Account - CDE / CCEE |
- |
- |
181,141 |
(352,379) | |||
Concession financial asset (transmission) |
- |
- |
(44,243) |
(62,299) | |||
Other operating assets |
933 |
(411) |
(82,278) |
20,634 | |||
Increase (decrease) in operating liabilities |
|||||||
Trade payables |
366 |
(336) |
787,063 |
470,982 | |||
Other taxes and social contributions |
804 |
(389) |
412,703 |
193,357 | |||
Other liabilities with post-employment benefit obligation |
- |
- |
(112,172) |
(118,897) | |||
Regulatory charges |
- |
- |
808,223 |
11,415 | |||
Tax, civil and labor risks paid |
(674) |
(209) |
(247,512) |
(188,000) | |||
Sector financial liability |
- |
- |
(23,170) |
21,998 | |||
Resources provided by the CDE - payable |
- |
- |
19,696 |
25,807 | |||
Other operating liabilities |
(3,907) |
5,694 |
107,930 |
84,467 | |||
Cash flows provided by (used in) operations |
656,691 |
1,345,964 |
4,429,684 |
3,478,212 | |||
Interests on borrowings and debentures paid |
(36,858) |
(138,599) |
(1,595,649) |
(1,333,570) | |||
Income tax and social contribution paid |
(2,172) |
(21,463) |
(276,061) |
(552,070) | |||
Net cash provided by (used in) operating activities |
617,661 |
1,185,902 |
2,557,974 |
1,592,572 | |||
Investing activities |
|||||||
Price paid in business combination net of cash acquired |
- |
- |
- |
(68,464) | |||
Cash incorporated in business combination |
- |
- |
- |
139,293 | |||
Capital (increase) decrease in investments |
(490,010) |
(360,000) |
- |
(45,445) | |||
Sale of interest in investees |
- |
- |
10,454 |
- | |||
Additions to property, plant and equipment |
(535) |
- |
(550,003) |
(345,049) | |||
Financial investments, pledges, funds and tied deposits |
- |
- |
(147,914) |
(7,839) | |||
Additions to intangible assets |
(12) |
(13) |
(877,793) |
(716,818) | |||
Sale of noncurrent assets |
- |
- |
10,586 |
43,024 | |||
Advance for future capital increase |
(52,680) |
(27,153) |
- |
- | |||
Loans to subsidiaries and associates |
10,845 |
(2,822) |
29,776 |
949 | |||
Return by the supplier of advances |
- |
- |
- |
67,342 | |||
Net cash flow provided by (used in) investing activities |
(532,392) |
(389,988) |
(1,524,894) |
(933,007) | |||
Financing activities |
|||||||
Capital increase by noncontrolling shareholders |
- |
- |
7 |
1,123 | |||
Borrowings and debentures obtained |
829,997 |
- |
4,532,167 |
3,186,384 | |||
Borrowings and debentures paid |
(1,290,000) |
- |
(4,037,685) |
(2,559,771) | |||
Derivative instruments paid |
- |
- |
(135,309) |
(119,628) | |||
Business combination payment |
- |
- |
(61,709) |
- | |||
Dividend and interest on shareholders’ equity paid |
(850) |
(986,811) |
(5,204) |
(1,016,641) | |||
Net cash flow provided by (used in) financing activities |
(460,853) |
(986,811) |
292,267 |
(508,533) | |||
Increase (decrease) in cash and cash equivalents |
(375,584) |
(190,897) |
1,325,347 |
151,032 | |||
Opening balance of cash and cash equivalents |
799,775 |
990,672 |
4,357,455 |
4,206,422 | |||
Closing balance of cash and cash equivalents |
424,192 |
799,775 |
5,682,802 |
4,357,455 |
The accompanying notes are an integral part of these financial statements.
46
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
| |||||||
CPFL Energia S.A. | |||||||
Added value statements of income for the years ended on December 31, 2015 and 2014 | |||||||
(in thousands of Brazilian Reais) | |||||||
Parent company |
Consolidated | ||||||
2015 |
2014 |
2015 |
2014 | ||||
1. Revenues |
1,821 |
81 |
34,377,361 |
23,057,172 | |||
1.1 Operating revenues |
1,274 |
78 |
32,862,289 |
21,851,381 | |||
1.2 Revenue related to the construction of own assets |
547 |
3 |
595,282 |
344,492 | |||
1.3 Revenue from construction of concession infrastructure |
- |
- |
1,046,669 |
944,997 | |||
1.4 Allowance of doubtful accounts |
- |
- |
(126,879) |
(83,699) | |||
2. (-) Inputs |
(10,322) |
(7,701) |
(17,590,769) |
(14,092,481) | |||
2.1 Electricity purchased for resale |
- |
- |
(14,749,957) |
(11,780,445) | |||
2.2 Material |
(586) |
(21) |
(1,116,288) |
(857,284) | |||
2.3 Outsourced services |
(7,239) |
(5,060) |
(1,122,529) |
(1,008,775) | |||
2.4 Other |
(2,496) |
(2,620) |
(601,995) |
(445,978) | |||
3. Gross added value (1 + 2) |
(8,501) |
(7,620) |
16,786,592 |
8,964,691 | |||
4. Retentions |
(170) |
(173) |
(1,281,726) |
(1,160,713) | |||
4.1 Depreciation and amortization |
(170) |
(173) |
(979,062) |
(875,696) | |||
4.2 Amortization of intangible assets of concession |
- |
- |
(302,665) |
(285,018) | |||
5. Net added value generated (3 + 4) |
(8,670) |
(7,793) |
15,504,865 |
7,803,977 | |||
6. Added value received in transfer |
1,011,013 |
1,141,740 |
1,861,444 |
962,928 | |||
6.1 Financial Income |
84,061 |
130,555 |
1,644,560 |
903,244 | |||
6.2 Interest in subsidiaries, associates and joint ventures |
926,951 |
1,011,185 |
216,885 |
59,684 | |||
7. Added value to be distributed (5 + 6) |
1,002,342 |
1,133,947 |
17,366,310 |
8,766,905 | |||
8. Distribution of added value |
|||||||
8.1 Personnel and charges |
16,939 |
15,507 |
905,102 |
814,979 | |||
8.1.1 Direct remuneration |
9,963 |
8,455 |
562,082 |
500,471 | |||
8.1.2 Benefits |
5,987 |
6,257 |
298,738 |
275,322 | |||
8.1.3 Government severance indemnity fund for employees - F.G.T.S. |
988 |
796 |
44,283 |
39,186 | |||
8.2 Taxes, fees and contributions |
28,424 |
25,807 |
12,910,440 |
5,044,467 | |||
8.2.1 Federal |
28,394 |
25,782 |
8,207,474 |
1,916,922 | |||
8.2.2 Estate |
30 |
24 |
4,688,978 |
3,109,743 | |||
8.2.3 Municipal |
- |
- |
13,988 |
17,802 | |||
8.3 Lenders and lessors |
92,040 |
143,456 |
2,675,490 |
2,021,016 | |||
8.3.1 Interest |
91,918 |
143,318 |
2,622,405 |
1,954,293 | |||
8.3.2 Rental |
121 |
138 |
53,085 |
46,929 | |||
8.3.3 Other |
- |
- |
- |
19,794 | |||
8.4 Interest on capital |
864,940 |
949,177 |
875,277 |
886,443 | |||
8.4.1 Dividend (included additional proposed) |
173,708 |
281,430 |
164,228 |
208,674 | |||
8.4.2 Retained earnings |
691,232 |
667,747 |
711,050 |
677,770 | |||
1,002,342 |
1,133,947 |
17,366,310 |
8,766,905 |
The accompanying notes are an integral part of these financial statements.
47
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
CPFL ENERGIA S.A.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2015 and 2014
(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 Rua Gomes de Carvalho, 1510 - 14º andar - Sala 142 - Vila Olímpia - São Paulo - SP - Brazil.
The Company has direct and indirect interests in the following subsidiaries and joint ventures (information on the concession area, number of consumers, energy production capacity and related data are not audited by the independent auditors):
Energy distribution |
Company Type |
Equity Interest |
Location (State) |
Number of municipalities |
Approximate number of consumers (in thousands) |
Concession term |
End of the concession | |||||||
|
||||||||||||||
Companhia Paulista de Força e Luz ("CPFL Paulista") |
Publicly-quoted corporation |
Direct |
Interior of São Paulo |
234 |
4,218 |
30 years |
November 2027 | |||||||
Companhia Piratininga de Força e Luz ("CPFL Piratininga") |
Publicly-quoted corporation |
Direct |
Interior and coast of São Paulo |
27 |
1,659 |
30 years |
October 2028 | |||||||
Rio Grande Energia S.A. ("RGE") |
Publicly-quoted corporation |
Direct |
Interior of Rio Grande do Sul |
255 |
1,444 |
30 years |
November 2027 | |||||||
Companhia Luz e Força Santa Cruz ("CPFL Santa Cruz") |
Private corporation |
Direct |
Interior of São Paulo and Paraná |
27 |
205 |
30 years |
July 2045 | |||||||
Companhia Leste Paulista de Energia ("CPFL Leste Paulista") |
Private corporation |
Direct |
Interior of São Paulo |
7 |
57 |
30 years |
July 2045 | |||||||
Companhia Jaguari de Energia ("CPFL Jaguari") |
Private corporation |
Direct |
Interior of São Paulo |
2 |
39 |
30 years |
July 2045 | |||||||
Companhia Sul Paulista de Energia ("CPFL Sul Paulista") |
Private corporation |
Direct |
Interior of São Paulo |
5 |
83 |
30 years |
July 2045 | |||||||
Companhia Luz e Força de Mococa ("CPFL Mococa") |
Private corporation |
Direct |
Interior of São Paulo and Minas Gerais |
4 |
46 |
30 years |
July 2045 |
Installed power (MW) | ||||||||||||
Energy generation |
Company Type |
Equity Interest |
Location (State) |
Number of plants / type of energy |
Total |
CPFL participation | ||||||
|
||||||||||||
CPFL Geração de Energia S.A. |
Publicly-quoted corporation |
Direct |
São Paulo and Goiás |
1 Hydropower, 4 SHPs (a) e 1 Thermal |
729 |
729 | ||||||
CERAN - Companhia Energética Rio das Antas |
Private corporation |
Indirect |
Rio Grande do Sul |
3 Hydropower |
360 |
234 | ||||||
Foz do Chapecó Energia S.A. |
Private corporation |
Indirect |
Santa Catarina and |
1 Hydropower |
855 |
436 | ||||||
Campos Novos Energia S.A. |
Private corporation |
Indirect |
Santa Catarina |
1 Hydropower |
880 |
429 | ||||||
BAESA - Energética Barra Grande S.A. |
Publicly-quoted corporation |
Indirect |
Santa Catarina and |
1 Hydropower |
690 |
173 | ||||||
Centrais Elétricas da Paraíba S.A. |
Private corporation |
Indirect |
Paraíba |
2 Thermal |
342 |
182 | ||||||
Paulista Lajeado Energia S.A. |
Private corporation |
Indirect |
Tocantins |
1 Hydropower |
903 |
63 | ||||||
CPFL Energias Renováveis S.A. |
Publicly-quoted corporation |
Indirect |
(c) |
(c) |
(c) |
(c) | ||||||
CPFL Centrais Geradoras Ltda ("CPFL Centrais Geradoras") |
Limited company |
Direct |
São Paulo |
6 MHPs (g) |
4 |
4 |
48
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
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 Basil Varejista") |
Privately-held corporation |
Energy commercialization |
Indirect | |||
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 ESCO") |
Privately-held corporation |
Energy efficiency management |
Direct | |||
TI Nect Serviços de Informática Ltda. ("Authi") (f) |
Limited liability company |
Provision of IT services |
Direct | |||
CPFL GD S.A ("CPFL GD") (h) |
Privately-held corporation |
Provision of services for energy generation companies |
Indirect | |||
Others |
Company type |
Core activity |
Equity interest | |||
CPFL Jaguariúna Participações Ltda ("CPFL Jaguariuna") |
Limited liability company |
Holding company |
Direct | |||
CPFL Jaguari de Geração de Energia Ltda ("Jaguari Geração") |
Limited liability company |
Holding company |
Direct | |||
Chapecoense Geração S.A. ("Chapecoense") (d) |
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 Transmissão") |
Privately-held corporation |
Energy transmission services |
Indirect | |||
CPFL Transmissora Morro Agudo S.A ("CPFL Transmissão Morro Agudo") (e) |
Privately-held corporation |
Energy transmission services |
Indirect |
a) SHP – Small Hydropower Plant.
b) Paulista Lajeado has a 7% share 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 December 31, 2015, CPFL Renováveis had a portfolio of 126 projects with installed capacity of 2,909.2 MW (1,799.3 MW in operation), as follows:
· Hydropower generation: 47 SHP’s (557.7 MW) with 38 SHPs in operation (399 MW) and 9 SHPs under development (158.7 MW);
· Wind power generation: 70 projects (1,980.4 MW) with 34 projects in operation (1,029.2 MW) and 36 projects under construction/development (951.2 MW);
49
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
· 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) In January, approval was granted for establishing CPFL Transmissora Morro Agudo S.A. (“CPFL Transmissão Morro Agudo”), a subsidiary of CPFL Geração. The new subsidiary’s objective is to operate electric energy transmission concessions, including activities of construction, implementation, operation and maintenance of installations for transmission of power from the basic grid of the Brazilian National Interconnected System (“SIN”).
(f) In September 2014, the direct subsidiary, TI Nect Serviços de Informática Ltda. (“Authi”), was established in order to provide information technology services, maintenance of such technology, system upgrading, development and customization of programs and maintenance of computers and peripheral equipment.
(g) MHP – micro hydroelectric plant
(h) In August 2015, the company CPFL GD S.A. was established as a wholly owned subsidiary of CPFL Eficiência Energética S.A. mainly aimed at providing services and general consulting for the electric energy market and selling goods related to central electric energy stations.
As determined in an Order from the Federal Minister of Mines & Energy in November 2015, subsidiaries CPFL Santa Cruz, CPFL Leste Paulista, CPFL Jaguari, CPFL Sul Paulista and CPFL Mococa signed on December 9, 2015 the 5th amendment to concession agreement No. 17/1999-ANEEL, which expired on July 7, 2015. Accordingly, the term of these subsidiaries for engaging in electric energy distribution activities was extended for another 30 years, hence expiring on July 7, 2045. The amendment was formalized in accordance with Law 12,783 of January 11, 2013, of Decree No. 7.805 of September 14, 2012, and Decree No. 8.461 of June 2, 2015, which established the terms and conditions for such extension relating to operational and economic-financial criteria. The new amendment required from the Company’s subsidiaries the compliance with the following criteria: (i) efficiency in relation to the quality of the service performed, (ii) efficiency in terms of economic-financial management, (iii) operational and economic rationality, and (iv) tariff moderation.
The compliance with such indicators will be monitored by the Regulatory Agency - ANEEL, and an administrative proceeding may be filed in the event of non-compliance.
( 2 ) PRESENTATION OF THE FINANCIAL STATEMENTS
2.1 Basis of presentation
The individual (Parent Company) and consolidated financial statements have been prepared in accordance with International Financial Reporting Standards – IFRS, issued by the International Accounting Standard Board – IASB, and accounting practices adopted in Brazil.
Accounting practices adopted in Brazil encompass those included in Brazilian corporate law and the technical pronouncements, guidelines and interpretations issued by the Accounting Pronouncements Committee (Comitê de Pronunciamentos Contábeis - CPC) and approved by the Brazilian Securities Commission (Comissão de Valores Mobiliários – CVM).
The Company 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.
Management states that all material information of the financial statements is disclosed and corresponds to what is used in the Company's management.
The financial statements were approved by Management and authorized for issue on March 7, 2016.
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2.2 Basis of measurement
The financial statements have been prepared on the historical cost basis except for the following items recorded in the statements of income: i) derivative financial instruments measured at fair value, ii) financial instruments measured at fair value through profit or loss, and iii) available-for-sale financial assets measured at fair value. 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 35 – Financial Instruments.
2.3 Use of estimates and judgments
The preparation of financial statements requires the Company’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 Company’s management reviews 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:
· Note 6 – Consumers, concessionaires and licensees;
· Note 8 – Sector financial asset and liability;
· Note 9 – Deferred tax assets and liabilities;
· Note 10 – Leases;
· Note 11 – Concession financial asset;
· Note 12 – Other receivables (Allowance for doubtful debts);
· Note 14 – Property, plant and equipment and impairment;
· Note 15 – Intangible assets and impairment;
· Note 19 – Private pension plan;
· Note 22 – Provision for tax, civil and labor risks and escrow deposits;
· Note 24 – Other payables (Provision for socio environmental costs)
· Note 27 – Net operating revenue;
· Note 28 – Cost of electric energy; and
· Note 35 – Financial instruments.
2.4 Functional currency and presentation currency
The Company’s functional currency is the Brazilian Real, and the individual and consolidated financial statements are 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.
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The Company’s management uses 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.
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 stated at cost by the subsidiary Paulista Lajeado in Investco S.A., all other entities are fully consolidated.
At December 31, 2015 and 2014, the noncontrolling interests recognized in the financial statements refer to the 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 financial statements in accordance with accounting practices adopted in Brazil and as supplementary information to the financial statements in accordance with IFRS, as the statement is neither provided for nor mandatory in accordance with IFRS.
( 3 ) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies used in preparing the Company’s financial statements are set out below. These policies have been consistently applied to all periods presented.
3.1 Concession agreements
ICPC 01 (R1) and IFRIC 12 – Service Concession Arrangements establish general guidelines for the recognition and measurement of obligations and rights related to concession agreements and apply to situations in which the granting authority controls or regulates which services the concessionaire should provide with the infrastructure, to whom the services should be provided and at what price, and controls any significant residual interest in the infrastructure at the end of the concession period.
When these definitions are met, the infrastructure of distribution concessionaires is segregated at the time of construction in accordance with the CPC and IFRS requirements, so that the following are recognized in the financial statements (i) an intangible asset corresponding to the right to operate the concession and collect from the users of public utilities, and (ii) a financial asset corresponding to the unconditional contractual right to receive cash (indemnity) by transferring control of the assets at the end of the concession.
The concession financial asset is measured based on its fair value, determined in accordance with the remuneration base for the concession assets, pursuant to the legislation in force established by the regulatory authority (ANEEL), and takes into consideration changes in the estimated cash flow, mainly based on factors such as new replacement price, and adjustment for (i) IPCA (Extended Consumer Price Index) to the subsidiaries CPFL Paulista, CPFL Piratininga and RGE and (ii) inflation based on the IGP-M (General Market Price Index) to other subsidiaries of the distribution segment. The financial asset is classified as available-for-sale, with the corresponding cash flow changes entry in a finance income or cost account in the statement of profit or loss for the year (Note 4).
The remaining amount is recognized as intangible asset and relates to the right to charge consumers for electric energy distribution services, and is amortized in accordance with the consumption pattern that reflects the estimated economic benefit to the end of the concession.
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Services related to the construction of infrastructure are recognized in accordance with CPC 17 (R1) and IAS 11 – Construction Contracts, against a financial asset corresponding to the amount subject to right to receive cash (indemnity). Residual amounts classified as intangible assets are amortized over the concession period in proportion to a curve that reflects the consumption pattern in relation to the economic benefits.
Considering that (i) the tariff model that does not provide for a profit margin for the infrastructure construction services, (ii) the way in which the subsidiaries manage the constructions by using a high level of outsourcing, and (iii) the fact that there is no provision for profit margin on construction in the Company‘s business plans, Management is of the opinion that the margins on this operation are irrelevant, and therefore no mark-up to the cost is considered in revenue. The construction revenues and costs are therefore presented in the statement of profit or loss for the year in the same amounts.
3.2 Financial instruments
Financial assets are recognized initially on the date that they are originated or on the trade date at which the Company or its subsidiaries become parties to the contractual provisions of the instrument. Derecognition of a financial asset occurs when the contractual rights to the cash flows from the asset expire or when the risks and rewards of ownership of the financial asset are transferred. The Company and its subsidiaries hold the following main financial assets:
(i) Fair value through profit or loss: these are assets held for trading or designated as such upon initial recognition. The Company and its subsidiaries manage such assets and make purchase and sale decisions based on their fair value in accordance with their documented risk management and investment strategy. These financial assets are measured at fair value, and changes therein are recognized in profit or loss for the year.
(ii) Held-to-maturity: these are assets that the Company and its subsidiaries have the positive intent and ability to hold to maturity. Held-to-maturity financial assets are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less any impairment losses.
(iii) Loans and receivables: these are assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less any impairment losses.
(iv) Available-for-sale: these are non-derivative financial assets that are designated as available-for-sale or that are not classified into any of the previous categories. Subsequent to initial recognition, interest calculated using the effective interest method is recognized in the statement of profit or loss as part of the finance income. Changes in fair value of these financial assets are recognized in other comprehensive income. The accumulated result in other comprehensive income is transferred to profit or loss when the asset is realized.
Financial liabilities are initially recognized on the date that they are originated or on the trade date at which the Company or its subsidiaries become a party to the contractual provisions of the instrument. The Company and its subsidiaries have the following main financial liabilities:
(i) Measured at fair value through profit or loss: these are financial liabilities that are: (i) held for short-term trading, (ii) designated at fair value in order to match the effects of recognition of income and expenses to obtain more relevant and consistent accounting information, or (iii) derivatives. These liabilities are measured at fair value and any changes in fair value are subsequently recognized in profit or loss.
(ii) Other financial liabilities (not measured at fair value through profit or loss): these are other financial liabilities not classified into the previous category. They are measured initially at fair value net of any cost attributable to the transaction and subsequently measured at amortized cost using the effective interest rate method.
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
The Company recognizes financial guarantees when these are granted to non-controlled entities or when the financial guarantee is granted at a percentage higher than the Company's interest to cover commitments of joint ventures. Such guarantees are initially measured at fair value, by recognizing (i) a liability corresponding to the risk of non-payment of the debt, which is amortized against finance income simultaneously and in proportion to amortization of the debt, and (ii) an asset equivalent to the right to compensation by the guaranteed party or a prepaid expense under the guarantees, which is amortized by receipt of cash from other shareholders or at the effective interest rate over the term of the guarantee. After initial recognition, guarantees are measured periodically at the higher of the amount determined in accordance with CPC 25 and IAS 37 and the amount initially recognized less accumulated amortization.
Financial assets and liabilities are offset and presented at their net amount when there is a legal right to offset the amounts and the intent to realize the asset and settle the liability simultaneously.
The classifications of financial instruments are described in Note 35.
- Issued Capital
Common shares are classified as equity. Additional costs directly attributable to share issues and share options are recognized as a deduction from equity, net of any tax effects.
3.3 Leases
At the inception of an agreement, one shall determine whether such agreement is or contains a lease. A specific asset is the subject of a lease if fulfillment of the agreement is dependent on the use of that specified asset. An agreement conveys the right to use the asset if the agreement conveys to the lessee the right to control the use of the underlying asset.
Leases in which substantially all the risks and rewards are retained by the lessor are classified as operating leases. Payments/receipts made under operating leases are recognized as expense/revenues in profit or loss on a straight-line basis, over the term of the lease.
Leases that involve not only the right to use assets, but also substantially transfer the risks and rewards to the lessee, are classified as finance leases.
In finance leases in which the Company or its subsidiaries act as lessee, the assets are capitalized to property, plant and equipment at the commencement of the lease against a liability measured at the lower of the leased asset’s fair value and the present value of the minimum future lease payments. Property, plant and equipment are depreciated over the shorter of the estimated useful life of the asset or the lease term.
For finance leases in which the Company or its subsidiaries act as lessors, receivables from lessees are initially recognized based on the fair value of the leased asset.
In both cases, the finance income/cost is recognized in the statement of profit or loss over the term of the lease agreement so as to produce an effective interest rate on the remaining balance of the investment/liability.
3.4 Property, plant and equipment
Items of property, plant and equipment are measured at acquisition, construction or formation cost less accumulated depreciation and, if applicable, accumulated impairment losses. Cost also includes any other costs attributable to bringing the assets to the place and in a condition to operate as intended by Management, the cost of dismantling the items and restoring the site on which they are located and capitalized borrowing costs on qualifying assets.
The replacement cost of items of property, plant and equipment is recognized if it is probable that it will involve economic benefits for the subsidiaries and if the cost can be reliably measured, and the value of the replaced item is written off. Maintenance costs are recognized in profit or loss as they are incurred.
Depreciation is calculated on a straight-line basis, at annual rates of 2% to 20%, taking into consideration the estimated useful life of the assets, as instructed and defined by the Granting Authority.
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Gains and losses on disposal/write-off of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of the asset, and are recognized net within other operating income/expenses.
Assets and facilities used in the regulated activities are tied to these services and may not be removed, disposed of, assigned or pledged in mortgage without the prior and express authorization of the ANEEL. The ANEEL, through Resolution No. 20 of February 3, 1999, amended by Normative Resolution No. 691 of December 8, 2015, releases Public Electric Energy Utility concessionaires from prior authorization for release of assets of no use to the concession, but determines that the proceeds from the disposal be deposited in a restricted bank account for use in the concession.
3.5 Intangible assets
Includes rights related to non-physical assets such as goodwill and concession exploitation rights, software and rights-of-way.
Goodwill that arises on the acquisition of subsidiaries is measured based on the difference between the fair value of the consideration transferred for acquisition of a business and the net fair value of the assets and liabilities of the subsidiary acquired.
Goodwill is subsequently measured at cost less accumulated impairment losses. Goodwill and other intangible assets with indefinite useful lives, if any, are not subject to amortization and are tested annually for impairment.
Negative goodwill is recognized as a gain in the statement of profit or loss in the year of the business acquisition.
In the individual financial statements, fair value adjustments (value added) of net assets acquired in business combinations are included in the carrying amount of the investment and the amortization is classified in the individual statement of income as “equity in subsidiaries” in accordance with ICPC 09 (R2). In the consolidated financial statements, the amount is stated as intangible asset and its amortization is classified in the consolidated statement of profit and loss as “amortization of concession intangible asset” in other operating expense.
Intangible assets corresponding to the right to operate concessions may have three origins, as follows:
(i) Acquisitions through business combinations: the portion arising from business combinations that corresponds to the right to operate the concession is stated as an intangible asset. Such amounts are amortized over the remaining period of the concessions, on a straight-line basis or based on the profit curves projected for the concessionaires, as applicable.
(ii) Investments in infrastructure (application of ICPC01 (R1) and IFRIC 12 – Service Concession Arrangements): under the electric energy distribution concession agreements with the subsidiaries, the recognized intangible asset corresponds to the concessionaires' right to charge the consumers for use of the concession infrastructure. Since the exploration term is defined in the agreement, intangible assets with defined useful lives are amortized over the concession period in proportion to a curve that reflects the consumption pattern in relation to the expected economic benefits. For further information, see note 3.1.
Items comprised in the infrastructure are directly tied to the Company’s electric energy distribution operation and cannot be removed, disposed of, assigned or pledged in mortgage without the prior and express authorization of the ANEEL. The ANEEL, through Resolution No. 20 of February 3, 1999, amended by Normative Resolution No. 691 of December 8, 2015, releases Public Electric Energy Utility concessionaires from prior authorization for release of assets of no use to the concession, but determines that the proceeds from the disposal be deposited in a restricted bank account for use in the concession.
(iii) Use of public asset: certain generation concessions were granted with the condition of payments to the federal government for use of public asset. On the signing date of the respective agreements, the Company’s subsidiaries recognized intangible assets and the corresponding liabilities, at fair value. The intangible assets, capitalized by interest incurred on the obligation until the start-up date, are amortized on a straight-line basis over the remaining period of each concession.
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3.6 Impairment
A financial asset not measured at fair value through profit or loss is reassessed at each reporting date to determine whether there is objective evidence that it is impaired. Impairment can occur after the initial recognition of the asset and have a negative effect on the estimated future cash flows.
The Company and its subsidiaries consider evidence of impairment of receivables and held-to-maturity securities for both specific asset and at a collective level for all significant securities. Receivables and held-to-maturity securities that are not individually significant are collectively assessed for impairment by grouping together the securities with similar risk characteristics.
In assessing collective impairment the Company uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for Management's judgment as to whether the assumptions and current economic and credit conditions are such that the actual losses are likely to be higher or lower than suggested by historical trends.
An impairment loss of a financial asset is recognized as follows:
(i) Amortized cost: as the difference between the carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognized in profit or loss and shown in an allowance account against receivables. When a subsequent event indicates that the amount of impairment loss has decreased, this reduction is reversed as a credit through profit or loss.
(ii) Available-for-sale: as the difference between the acquisition cost, net of any reimbursement and principal repayment and the current fair value, less any impairment loss previously recognized in profit or loss. Losses are recognized in profit or loss.
In the case of financial assets carried at amortized cost and/or debt instruments classified as available-for-sale, if an increase (gain) is identified in subsequent periods, the impairment loss is reversed through profit or loss. However, any subsequent recovery in the fair value of an impaired equity instrument classified as available-for-sale is recognized in other comprehensive income.
Non-financial assets that have indefinite useful lives, such as goodwill, are tested annually for impairment to assess whether the asset's carrying amount does not exceed its recoverable amount. Other assets subject to amortization are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may be impaired.
An impairment loss is recognized if the carrying amount of an asset exceeds its estimated recoverable amount, which is the greater of (i) its value in use or (ii) its fair value less costs to sell.
For impairment tests purposes, Management adopts the asset's value in use. In such cases, the assets (e.g. goodwill, concession intangible asset) are segregated and grouped together at the lowest level that generates identifiable cash inflows (the "cash generating unit", or CGU). If there is an indication of impairment, the loss is recognized in profit or loss. Except in the case of goodwill impairment, which cannot be reversed in the subsequent period, impairment losses are reassessed annually for any possibility of reversals
3.7 Provisions
A provision is recognized if, as a result of a past event, there is a legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. When applicable, provisions are determined by discounting the expected future cash outflows at a rate that reflects current market assessment and the risks specific to the liability.
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3.8 Employee benefits
Certain subsidiaries have post-employment benefits and pension plans, recognized under the accrual method in accordance with CPC 33 (R1) and IAS 19 “Employee benefits” (as revised 2011), and are regarded as Sponsors of these plans. Although the plans have particularities, they have the following characteristics:
(i) Defined contribution plan: a post-employment benefit plan under which the Sponsor pays fixed contributions into a separate entity and will have no liability for the actuarial deficits of the plan. The obligations are recognized as an expense in the statement of profit or loss in the periods during which the services are rendered.
(ii) Defined benefit plan: The net obligation is calculated as the difference between the present value of the actuarial obligation based on assumptions, biometric studies and interest rates in line with market rates, and the fair value of the plan assets as of the reporting date. The actuarial liability is calculated annually by independent actuaries, under the responsibility of Management, using the projected unit credit method. Actuarial gains and losses are recognized in other comprehensive income when they occur. Net interest (income or expense) is calculated by applying the discount rate at the beginning of the period to the net amount of the defined benefit asset or liability. When applicable, the cost of past services is recognized immediately in profit or loss.
If the plan records a surplus and it becomes necessary to recognize an asset, the recognition is limited to the present value of future economic benefits available in the form of reimbursements or future reductions in contributions to the plan.
3.9 Dividends and Interest on capital
Under Brazilian law, the Company is required to distribute a mandatory minimum annual dividend of 25% of profit adjusted in accordance with the Company´s bylaws. In conformity with Brazilian and international accounting standards, CPC 24, IAS 10 and ICPC 08 (R1) a provision may only be made for the minimum mandatory dividend, and dividends declared but not yet approved are only recognized as a liability in the financial statements after approval by the competent body. According to Law 6.404/76, , the amounts paid out to shareholders in excess of the mandatory minimum dividend, will therefore be held in equity, in the “additional dividend proposed” account, as they do not meet the present obligation criteria at the reporting date.
As established in the Company's bylaws and in accordance with current Corporate law, the Board of Directors is responsible for declaring an interim dividend and interest on capital determined in a half-yearly statement of income. An interim dividend and interest on capital declared at the base date of June 30, if any, is only recognized as a liability in the Company's financial statement after the date of the Board of Directors’ decision.
Interest on capital is treated in the same way as dividends and is also stated in changes in equity. Withholding income tax on interest on capital is debited against equity when proposed by Management, as it fulfills the obligation criteria at that time.
3.10 Revenue recognition
Operating revenue in the course of ordinary activities of the subsidiaries is measured at the fair value of the consideration received or receivable. Operating revenue is recognized when persuasive evidence exists that the most significant risks and rewards have been transferred to the buyer, when it is probable that the economic benefits will flow to the entity, the associated costs can be reliably estimated, and the amount of the operating revenue can be reliably measured.
Revenue from electric energy distribution is recognized when the energy is supplied. Unbilled revenue related to the monthly billing cycle is recognized based on the actual amount of energy provided in the month and the annualized loss rate. Revenue from energy generation sales is recognized based on the assured energy and at tariffs specified in the terms of the contract or the current market price, as applicable. Revenue from energy trading is recognized based on bilateral contracts with market agents and duly registered with
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Service revenue is recognized when the service is provided, under a service agreement between the parties.
Revenue from construction contracts is recognized based on the percentage of completion method, and losses, if any, are recognized the statement of profit or loss as incurred.
3.11 Income tax and social contribution
Income tax and social contribution expenses are calculated and recognized in accordance with the legislation in force and comprise current and deferred taxes. Income tax and social contribution are recognized in the statement of profit or loss except to the extent that they relate to items recognized directly in equity or other comprehensive income, when the net amounts of these tax effects are already recognized, and those arising from the initial recognition in business combinations.
Current taxes are the expected taxes payable or receivable/recoverable on the taxable profit or loss. Deferred taxes are recognized for temporary differences between the carrying amounts of assets and liabilities for accounting purposes and the equivalent amounts used for tax purposes and for tax loss carryforwards.
The Company and certain subsidiaries recognize in their financial statements the effects of tax loss carryforwards and deductible temporary differences, based on projections of future taxable profits, approved annually by the Boards of Directors and examined by the Fiscal Council. The subsidiaries also recognized tax credits related to benefits of merged goodwill, which are amortized in proportion to the individual projected profit for the remaining period of each concession agreement.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity.
Deferred income tax and social contribution assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related taxes benefit will be realized.
3.12 Earnings per share
Basic earnings per share are calculated by dividing the profit or loss for the year attributable to the controlling shareholders by the weighted average number of shares outstanding during the year. Diluted earnings per share are calculated by dividing the profit or loss for the year attributable to the controlling shareholders, adjusted by the effects of instruments that potentially would have impacted the profit or loss for the year by the weighted average of the number of shares outstanding, adjusted by the effects of all dilutive potential convertible notes for the reporting periods, in accordance with CPC 41 and IAS 33.
3.13 Government grants – CDE
Government grants are only recognized when it is reasonably certain that these amounts will be received by the Company. They are recognized in profit or loss for the periods in which the Company recognizes as income the discounts granted in relation to the low-income subsidy and other tariff discounts and as expense recovery the costs of hydrological risk, involuntary exposure and Energy System Service charges - ESS.
The subsidies received through funds from the Energy Development Account - CDE (notes 27 and 28) have the main purpose of offsetting discounts granted and expenses already incurred in order to provide immediate financial support to the distribution companies, in accordance with IAS 20 / CPC 07.
3.14 Sector financial asset and liability
According to the tariff pricing mechanism applicable to the distribution companies, the energy tariffs should be set at a price level (price cap) that ensures the economic and financial equilibrium of the concession. Therefore, the concessionaires and licensees are authorized to charge from their consumers (after review
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The distributors' revenue is mainly comprised of the sale of electric energy and for the delivery (transmission) of the electric energy via the distribution infrastructure (network). The distribution concessionaires' revenue is affected by the volume of energy delivered and the tariff. The electric energy tariff is comprised of two parcels which reflect a breakdown of the revenue:
· Parcel A (non-controllable costs): this parcel should be neutral in relation to the entity's performance, i.e., the costs incurred by the distributors, classifiable as Parcel A, is fully passed through the consumer or borne by the Granting Authority ; and
· Parcel B (controllable costs) – comprised of capital expenditure on investments in infrastructure, operational costs and maintenance and remuneration to the providers of capital. It is this parcel that actually affects the entity's performance, since it has no guarantee of tariff neutrality and thus involves an intrinsic business risk.
This tariff pricing mechanism can cause temporal differences arising from the difference between the budgeted costs (Parcel A and other financial components) included in the tariff at the beginning of the tariff period and those actually incurred while it is in effect. This difference constitutes a right of the concessionaire to receive cash when the budgeted costs included in the tariff are lower than those actually incurred, or an obligation to pay if the budgeted costs are higher than those actually incurred.
On November 25, 2014, according to Order No. 4621, ANEEL approved an amendment to the distribution companies´ concession agreements, to include a specific clause that assures the indemnification for outstanding balances (assets or liabilities) of any insufficient collection or reimbursement for the tariffs resulting from termination of the concession for any reason.
On December 10, 2014, the eight distribution subsidiaries signed the amendments to the concession agreements. The amendments include a specific clause that assures the indemnification for outstanding balances (assets or liabilities) of any insufficient collection or reimbursement for the tariffs resulting from termination of the concession for any reason ("Sector financial asset and liability"). These contractual amendments assure from their signing date, the unconditional right (and impose the obligation) to receive (or deliver) cash or another financial instrument. This event (signing the contractual amendments) therefore eliminated any uncertainty as to the realization of the asset and settlement of the liability. Accordingly, the Company and its distribution subsidiaries start to recognize, prospectively, the components of Parcel A and other financial components, such as financial assets and liabilities (note 8), against the line item “sector financial asset and liability” in other operating income (note 27). After the initial recognition, the sector asset and liability balances are mainly adjusted for inflation based on the variation in the SELIC rates, based on their respective nature.
3.15 Business combination
Business combinations are accounted for by applying the acquisition method. The consideration transferred in a business combination is measured at fair value, calculated as the sum of the fair values of the assets transferred by the acquirer, the liabilities incurred at the acquisition date to the former owner of the acquiree and the equity interests issued by the Company and subsidiaries in exchange for control of the acquiree. Costs related to the acquisition are generally recognized in profit or loss, when incurred.
The noncontrolling interests are initially measured either at fair value or at the noncontrolling interests’ proportionate share of the acquiree’s identifiable net assets. The measurement method is chosen on a transaction-by-transaction basis.
The excess of the consideration transferred over the fair value of the identifiable assets (including the concession intangible asset) and net liabilities assumed at the acquisition date are recognized as goodwill. In the event that the fair value of the identifiable assets and net liabilities assumed exceeds the consideration transferred, a bargain purchase is identified and the gain is recognized in the statement of profit or loss at the acquisition date.
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
3.16 Basis of consolidation
(i) Business combinations
The Company measures goodwill as the fair value of the consideration transferred including the recognized amount of any non-controlling interest in the acquiree, less the recognized fair value of the identifiable assets acquired and liabilities assumed, all measured at the acquisition date.
(ii) Subsidiaries and joint ventures
The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Joint ventures are accounted for using the equity method of accounting from the moment joint control is established.
The accounting policies of subsidiaries and joint ventures taken into consideration for purposes of consolidation and/or equity method of accounting, as applicable, are aligned with the Company's accounting policies.
In the individual (parent company) financial statements, the financial information on subsidiaries and joint ventures, as well as on associates, is accounted for under the equity method. In the consolidated financial statements, the information on joint ventures and associates, companies in which the Company has significant influence, is accounted for under the equity method.
The consolidated financial statements include the balances and transactions of the Company and its subsidiaries. The balances and transactions of assets, liabilities, income and expenses have been fully consolidated for the subsidiaries. Prior to consolidation into the Company's financial statements, the financial statements of subsidiaries CPFL Geração, CPFL Brasil, CPFL Jaguari Geração and CPFL Renováveis are fully consolidated into those of their subsidiaries.
Intragroup balances and transactions, and any income and expenses derived from these transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the CPFL Energia interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
In the case of subsidiaries, the portion related to noncontrolling interests is stated in equity and in the statements of profit or loss and comprehensive income in each period presented.
The balances of joint ventures, as well as the Company’s interest in each of them are described in note 13.5.
(iii) Acquisition of noncontrolling interests
Accounted for as transaction among shareholders. Consequently, no gain or goodwill is recognized as a result of such transaction.
3.17 New standards and interpretations adopted
A number of IASB and CPC standards were issued or revised and are mandatory for accounting periods beginning on January 1, 2015:
a) Amendments to IAS 19 (R) – Defined Benefit Plans: Employee Contributions
The amendments to IAS 19 clarify how an entity should account for contributions made by employees or third parties to defined benefit plans. When the formal terms of the plan specify contributions from employees or third parties, the accounting depends on whether the contributions are linked to service:
· If contributions are independent of the number of years of service, this affects the revaluation of the liability or asset associated to the defined benefit.
· If contributions are dependent on service, they reduce the service cost. If the contribution is dependent on the number of years of service, the entity should attribute it to the period of service using the method defined in paragraph 70 of IAS 19 (R). If the contribution amount is not dependent on the number of years of service, the entity can reduce the service cost in the period in which the service is rendered, or reduce the service cost attributing the employee’s period of service, in accordance with paragraph 70 of IAS 19 (R ).
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
These amendments were applied and there was no impact on the disclosures or amounts recognized in the consolidated financial statements for the year ended December 31, 2015.
b) Amendments to IFRSs – Annual Improvements to IFRSs 2010-2012 Cycle and Annual Improvements to IFRSs 2011-2013 Cycle (effective beginning on or after July 1, 2014)
The amendments included in the Annual Improvements to IFRS 2010-2012 Cycle and 2011-2013 Cycle did not have material impact on the disclosures or amounts recognized in the Company’s consolidated financial statements for the year ended December 31, 2015.
3.18 New standards and interpretations not yet adopted:
A number of new IFRS standards and amendments to the standards and interpretations were issued by the IASB and had not yet come into effect for the year ended December 31, 2015. Consequently, the Company has not adopted them:
a) IFRS 9 – Financial Instruments
IFRS 9 is effective for the financial statements of an entity prepared in accordance with IFRS for annual periods beginning on or after January 1, 2018 and earlier application is permitted.
The standard establishes new requirements for classification and measurement of financial assets and liabilities. Financial assets are classified into two categories: (i) measured at fair value at initial recognition; and (ii) measured at amortized cost, based on the business model under which they are held and the characteristics of the contractual cash flows.
With regard to financial liabilities, the main alteration in relation to the requirements already set by IAS 39 requires any change in fair value of a financial liability designated at fair value through profit or loss attributable to changes in the liability's credit risk to be stated in other comprehensive income and not in the statement of profit or loss, unless such recognition results in a mismatching in the statement of profit or loss.
In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model, as opposed to an incurred credit loss under IAS 39/CPC 38. The expected credit loss model requires an entity to 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. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognized.
Regarding the modifications related to hedge accounting, IFRS 9 retains three types of hedge accounting mechanisms currently available in IAS 39. Under IFRS 9, greater flexibility has been introduced to the types of risks components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has been overhauled and replaced with the principle of an “economic relationship”. Retrospective assessment of hedge effectiveness is also no longer required. Enhanced disclosure requirements about an entity’s risk management have also been introduced.
The Company’s distribution subsidiaries have material assets classified as “available-for-sale”, in accordance with 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. The designation of these instruments as available-for-sale occurs due to the non-classification in the other three categories described in IAS 39/CPC 38 (loans and receivables, fair value through profit or loss and held-to-maturity). Management’s preliminary opinion is that, should these assets be classified as measured at fair value through profit or loss according to the new standard, the effects of the subsequent remeasurement of this asset would be recognized in profit or loss for the year. Thus, there will not be material impacts on the Company’s consolidated financial statements.
Moreover, as the Company and its subsidiaries do not apply hedge accounting, Management concluded that there will not be material impact on the information disclosed or amounts recorded in its consolidated financial statements as a result of the amendments to standard. As regards the changes of the calculation of impairment of financial instruments, the Company is assessing the impacts of the adoption in tis consolidated financial statements.
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
b) IFRS 14 - Regulatory deferral accounts
IFRS 14 establishes that rate-regulated entities may continue to recognize regulatory deferral accounts only in connection with their first-time adoption of IFRS, allowing first-time adopters to continue to apply their previous GAAP accounting policies to regulatory assets and liabilities.
IFRS 14 is effective for the first annual financial statements of an entity prepared in accordance with IFRS for annual periods beginning on or after January 1, 2016. Earlier application is permitted.
As the Company and its subsidiaries are not first-time adopters of IFRS, there will be no impacts on their financial statements.
c) IFRS 15 - Revenue from contracts with customers
IFRS 15 provides a single, straightforward model for accounting for contracts with customers, and when it comes into effect, it will supersede the current guide for revenue recognition provided in IAS 18 / CPC 30 (R1) – Revenue and IAS 11 / CPC 17 (R1) - Construction contracts and related interpretations.
The standard establishes that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduces a five-step model for revenue recognition: (1) Identify the contract with the customer; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to the performance obligations in the contract and (5) Recognize revenue when (or as) the entity satisfies a performance obligation.
Under IFRS 15, an entity recognizes revenue when (or as) the entity satisfies a performance obligation, i.e., when the "control" over the goods and services in a certain operation is transferred to the customer, and will establish a greater level of detail in the disclosures.
The standard will be applicable for annual reporting periods beginning on or after 1 January 2018, and its early adoption is permitted. The Company is assessing the potential impacts of the adoption of this new standard and preliminarily assess that they will not be material in its consolidated financial statements.
d) Amendments to IFRS 11/CPC 19 (R2) - Accounting for acquisition of an interest in a joint operation
The amendments to IFRS 11/ provide instructions for accounting for an interest in a joint operation that constitute a "business" under the definition established in IFRS 3 / CPC 15 (R1) – Business combinations.
The amendments established the relevant principles for accounting for a business combination in respect of testing for impairment of an asset to which the goodwill arising from acquisition of the business combination has been allocated. The same requirements should be applied in setting up a joint arrangement if, and only if, a business that existed previously benefits from the joint arrangement in the case of one of the participating parties. A business combination is also required to disclose the relevant information required by IFRS 3 / CPC 15 (R1)and the other business combination standards.
These amendments apply prospectively to annual periods beginning on or after January 1, 2016. Based on a preliminary assessment of the amendments, the Company's management believes that the application of these amendments to IFRS 11, should these transactions materialize, may impact its consolidated financial statement in future periods.
e) Amendments to IAS 16/CPC 27 and IAS 38/CPC 04 (R1) - Clarification of acceptable methods of depreciation and amortization
The amendments to IAS 16/CPC 27 prohibit the use of the revenue based depreciation method for property, plant and equipment items. The amendments to IAS 38/CPC 04 (R1) introduced the rebuttable presumption that revenue is an inappropriate basis for amortizing an intangible asset. Such presumption can be rebuttable only in the two conditions set out:
(i) when the intangible asset is expressed as a measure of revenue; or
(ii) when it can be demonstrated that revenue and the economic benefits of the intangible asset are highly correlated.
These amendments apply prospectively to annual periods beginning on or after January 1, 2016.
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
The Company currently amortizes the concession intangible asset based on the projected income curve of the concessionaires over the remaining period of the concession. These projections are reviewed annually. The balances of the subsidiary CPFL Renováveis are amortized over the remaining period of the exploration rights, by the straight-line method.
In a preliminary analysis, the Company assessed that part of its intangible assets classified into item (i) use the profit curve as amortization method. Considering these amendments, this method will no longer will be permitted, and the Company will amortize these intangible assets prospectively and from 2016 using the straight-line method over the remaining period of the concessions. The preliminary and initial estimate of the impact is R$ 66,931 lower amortization between 2016 and 2020, generating higher profit, estimated at R$ 65,461. This effect will be offset against higher amortization between 2021 and 2036.
f) Amendments to IAS 1/CPC 26 – Disclosure Initiatives
The amendments to IAS 1/CPC26 provide guidance as regards the application of the concept of materiality in practice.
These amendments are effective for annual periods beginning on or after January 1, 2016. Based on a preliminary assessment, the Company’s management does not believe that the application of these amendments to IAS 1/CPC26 will have a material impact on its consolidated financial statements.
g) Amendments to IAS 27 – Equity Method in Separate Financial Statements.
The amendments permit that an entity account for investments in subsidiaries, joint ventures and associates in its separate financial statements using one of the three methods: (i) at cost, (ii) in accordance with IFRS 9/IAS 39 or (iii) using the equity method, as described in IAS 28 – Investments in Associates and Joint Ventures and defines that the same accounting criterion should be applied to each category of investments.
The amendments also define that when a parent company becomes or ceases to be an investment entity, it should account for the change as from the date in which the change occurs.
These amendments are effective retrospectively for annual periods beginning on or after January 1, 2016. The Company estimates that there will not be impacts on its consolidated financial statements since its does not prepare consolidated financial statements.
h) Amendments to IFRS 10 and IAS 28 – Sale or Contribution of Assets between an Investor and its associate or joint venture.
The amendments deal with situations where there is a sale or contribution of assets between an investor and its associate or joint venture. Specifically, gains and losses resulting from loss of control of a subsidiary that does not represent a business in a transaction with an associate or joint venture that is accounted for using the equity method are recognized in the parent company's profit or loss only proportionally to the “unrelated investor’s” interest in this associate or joint venture. Similarly, gains and losses resulting from revaluation of investments retained in some former subsidiary (that has become an associate or joint venture accounted for using the equity method) at fair value are recognized in the profit or loss of the former parent company proportionally to the "unrelated investor’s"' interest in the new associate or joint venture.
These amendments are effective prospectively to annual periods beginning on or after January 1, 2016. The Company’s management believes that the application of these amendments to IFRS 11/CPC 19 (R2), should these transactions occur, may impact its consolidated financial statements in future periods.
i) Amendments to IFRS 10, IFRS 12 and IAS 28 – Investment Entities: Applying the Consolidation Exception.
The amendments to IFRS 10, IFRS 12 and IAS 28 clarify that the relief from preparing consolidated financial statements is applicable to a parent entity that is a subsidiary of an investment entity, even if the investment entity assesses all its subsidiaries at fair value in accordance with IFRS 10. The amendments also clarify that the requirement for an investment entity to consolidate a subsidiary that renders services related to investment activities of the former is applicable only to subsidiaries that are not investment entities.
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
These amendments are effective retrospectively for annual periods beginning on or after January 1, 2016. The Company’s management does not believe that the application of the amendments to IFRS 10, IFRS 12 and IAS 28 will have a material impact on its consolidated financial statements since the Company is not an investment entity and does not have a subsidiary, associate or joint venture that qualifies as an investment entity.
j) Annual Improvements to IFRSs 2012 – 2014 Cycle
j.1) Amendments to IFRS 5 – Non-current Assets held for Sale and Discontinued Operations: Introduce specific guidance in IFRS 5 as to when an entity reclassifies an asset (or disposal group) from "held for sale" to "held for distribution to owners" (or vice versa). The amendments clarify that such change should be considered as a continuity of the original disposal plan and, therefore, the requirements in IFRS 5 in relation to the change of the disposal plan are not applicable. The amendments also clarify the guidance as regards the discontinuance of accounting of assets classified as "held for distribution".
j.2) Amendments to IFRS 7 – Financial Instruments: Disclosures (with amendments reflected in IFRS 1): provide additional guidance to clarify if a service agreement contains a continuing involvement in a transferred asset for purposes of the required disclosures related to assets transferred.
j.3) Amendments to IAS 19 (R) – Employee Benefits: clarify that the rate used for discount of post-retirement benefit obligations should be determined based on the market yield at the end of the reporting period for high quality corporate bonds. The assessment of the coverage of a market for high quality corporate bonds should be at the level of the currency (that is, the same currency in which the benefits will be paid). For currencies for which there is no highly liquidity market for these high quality corporate bonds, the base should be the market yield on government bonds denominated in that currency at the end of the reporting period.
j.4) Amendments to IAS 34 – Interim Financial Statements: require that the information related to paragraph 16A of IAS 34 be included either in the interim financial statements or incorporated by reference in another part of the interim financial report that is available to users under the same terms and at the same time of the interim financial statements.
Based on a preliminary assessment of the amendments, the Company's management believes that the application of these amendments to IFRS 11/CPC 19 (R2), should these transactions materialize, may impact its consolidated financial statement in future periods.
k) IFRS 16 – Leases
Issued on January 13, 2016, establishes, in the lessee’s view, a new form for accounting for leases currently classified as operating leases, which are now recognized similarly to leases classified as finance leases. As regards the lessors, it virtually retains the requirements of IAS 17, including only some additional disclosure aspects.
IFRS 16 is effective for annual periods beginning or on after January 1, 2019, and its early adoption is permitted as long as the entities also early adopt IFRS 15 - Revenues from contracts with customers. The Company is assessing the potential impacts of the adoption of this new standard.
( 4 ) DETERMINATION OF FAIR VALUES
A number of the Company’s accounting policies and disclosures require the determination of fair value, 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, further information on the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
Accordingly, the Company measures fair value in accordance with IFRS 13 / CPC 46, which defines the fair value as the price estimate for an unforced transaction for the sale of the asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions.
- Property, plant and equipment and intangible assets
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
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 on 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 values are valued based on quoted prices in an active market, or, if such prices were not available, assessed using pricing models, applied individually for each transaction, taking into consideration the future payment flows, based on the conditions contracted, discounted to present value at market interest rate curves, based on information obtained, when available, from the BM&FBOVESPA S.A – Bolsa de Valores, Mercadorias e Futuros (“BM&FBOVESPA”) and “Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais – ANBIMA” (note 35) and also includes the debtor's credit rating.
Financial assets classified as available-for-sale refer to the right to compensation, to be paid by the Federal Government regarding the assets of the distribution concessionaires at the end of the concession agreement. The methodology adopted for marking these assets to fair value is based on the tariff review process for distributors. This review, conducted every four or five years according to each concessionaire, involves assessing the replacement price for 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 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”) or the General Market Price Index (“IGP-M”) as the best estimates for adjusting the original base to the fair value at subsequent dates, in accordance with the tariff review process.
( 5 ) CASH AND CASH EQUIVALENTS
Parent company |
Consolidated | ||||||
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 | ||||
Bank balances |
311 |
628 |
148,224 |
177,872 | |||
Short-term financial investments |
423,881 |
799,147 |
5,534,578 |
4,179,583 | |||
Overnight investment (a) |
- |
- |
26,914 |
84,512 | |||
Bank certificates of deposit (b) |
- |
- |
1,255,666 |
557,018 | |||
Repurchase agreements secured on debentures (b) |
- |
- |
433,693 |
15,985 | |||
Investment funds (c) |
423,881 |
799,147 |
3,818,305 |
3,522,069 | |||
Total |
424,192 |
799,775 |
5,682,802 |
4,357,455 |
a) Current account balances, which earn daily interest by investment in repurchase agreements secured on debentures 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 repurchase agreements secured on debentures with major financial institutions that operate in the Brazilian financial market, with daily liquidity, low credit risk and interest equivalent, on average, to 101% of the CDI.
c) Exclusive Fund investments, with daily liquidity and interest equivalent, on average, of 100.9% 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.
( 6 ) CONSUMERS, CONCESSIONAIRES AND LICENSEES
In the consolidated financial statements, the balance derives mainly from the supply of electric energy. The following table shows the breakdown at December 31, 2015 and 2014:
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Consolidated |
|
|
|
||||||
Past due |
Total | ||||||||
Amounts coming due |
until 90 days |
> 90 days |
December 31, 2015 |
December 31, 2014 | |||||
Current |
|||||||||
Consumer classes |
|||||||||
Residential |
340,541 |
394,199 |
59,085 |
793,826 |
469,318 | ||||
Industrial |
207,355 |
99,979 |
58,086 |
365,420 |
171,072 | ||||
Commercial |
156,922 |
84,740 |
21,597 |
263,259 |
148,120 | ||||
Rural |
50,397 |
12,037 |
1,823 |
64,257 |
36,319 | ||||
Public administration |
64,502 |
14,675 |
776 |
79,953 |
47,076 | ||||
Public lighting |
67,366 |
10,045 |
793 |
78,204 |
45,151 | ||||
Public utilities |
72,191 |
8,397 |
117 |
80,706 |
48,777 | ||||
Billed |
959,275 |
624,073 |
142,278 |
1,725,626 |
965,833 | ||||
Unbilled |
881,307 |
- |
- |
881,307 |
705,318 | ||||
Financing of consumers' debts |
149,899 |
24,436 |
22,700 |
197,035 |
103,512 | ||||
CCEE transactions |
163,266 |
5,901 |
394 |
169,561 |
227,986 | ||||
Concessionaires and licensees |
321,468 |
5,711 |
3,927 |
331,105 |
334,403 | ||||
Other |
10,770 |
- |
- |
10,770 |
18,660 | ||||
Total |
2,485,984 |
660,121 |
169,298 |
3,315,403 |
2,355,713 | ||||
Allowance for doubtful debts |
(140,485) |
(104,588) | |||||||
3,174,918 |
2,251,124 | ||||||||
Non current |
|||||||||
Financing of consumers' debts |
101,585 |
- |
- |
101,585 |
96,547 | ||||
Free energy |
4,768 |
- |
- |
4,768 |
4,139 | ||||
CCEE transactions |
41,301 |
- |
- |
41,301 |
41,301 | ||||
Total |
147,654 |
- |
- |
147,654 |
141,988 | ||||
Allowance for doubtful debts |
(18,708) |
(18,583) | |||||||
128,946 |
123,405 |
Financing of Consumers' Debts - Refers to the negotiation of overdue receivables from consumers, principally public administration. Payment of some of these receivables is guaranteed by the debtors, in the case of public entities, by pledging the bank accounts through which their ICMS (VAT) revenue is received. Allowances for doubtful debts are recognized based on the best estimates of the subsidiaries’ Management for unsecured amounts or amounts that are not expected to be collected.
Electric Energy Trading Chamber (CCEE) transactions - The amounts refer to the sale of electric energy on the spot market. The noncurrent amounts mainly comprise: (i) adjustments of entries made by the CCEE in response to certain legal decisions (preliminary orders) in the accounting processes for the period from September 2000 to December 2002; and (ii) provisional accounting entries established by the CCEE. The subsidiaries consider that there is no significant risk on the realization of these assets and consequently no allowance was recognized for these transactions.
Concessionaires and Licensees - Refer basically to receivables for the supply of electric energy to other concessionaires and licensees, mainly by the subsidiaries CPFL Geração, CPFL Brasil and CPFL Renováveis.
Allowance for doubtful debts
Movements in the allowance for doubtful debts are shown below:
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated | |||||
Consumers, concessionaires and licensees |
Other |
Total | |||
At December 31, 2013 |
(133,247) |
(13,152) |
(146,399) | ||
Allowance - recognition (reversal) |
(129,482) |
(3,444) |
(132,925) | ||
Recovery of revenue |
49,363 |
(136) |
49,227 | ||
Write-off of accrued receivables |
90,196 |
1,446 |
91,642 | ||
At December 31, 2014 |
(123,171) |
(15,285) |
(138,456) | ||
Allowance - recognition (reversal) |
(170,131) |
(1,152) |
(171,283) | ||
Recovery of revenue |
44,338 |
67 |
44,405 | ||
Write-off of accrued receivables |
89,770 |
1,930 |
91,700 | ||
At December 31, 2015 |
(159,194) |
(14,441) |
(173,634) | ||
Current |
(140,485) |
(12,460) |
(152,944) | ||
Noncurrent |
(18,708) |
(1,981) |
(20,690) |
( 7 ) TAXES RECOVERABLE
Parent company |
Consolidated | ||||||
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 | ||||
Current |
|||||||
Prepayments of social contribution - CSLL |
- |
- |
35,019 |
21,951 | |||
Prepayments of income tax - IRPJ |
2,171 |
- |
76,920 |
32,030 | |||
Withholding income tax - IRRF on interest on capital |
10,776 |
20,594 |
11,150 |
21,044 | |||
Income tax and social contribution to be offset |
42,456 |
870 |
100,658 |
51,236 | |||
Withholding income tax - IRRF |
16,996 |
21,530 |
125,392 |
88,249 | |||
State VAT - ICMS to be offset |
- |
- |
63,450 |
66,641 | |||
Social Integration Program - PIS |
74 |
1,072 |
8,543 |
7,527 | |||
Contribution for Social Security financing - COFINS |
411 |
5,005 |
40,126 |
38,098 | |||
National Social Security Institute - INSS |
- |
- |
12,660 |
1,846 | |||
Other |
- |
- |
1,292 |
1,015 | |||
Total |
72,885 |
49,071 |
475,211 |
329,638 | |||
Noncurrent |
|||||||
Social contribution to be offset - CSLL |
- |
- |
57,439 |
46,555 | |||
Income tax to be offset - IRPJ |
- |
- |
23,765 |
8,352 | |||
State VAT - ICMS to be offset |
- |
- |
81,584 |
79,223 | |||
Social Integration Program - PIS |
- |
- |
350 |
1,576 | |||
Contribution for Social Security Funding - COFINS |
- |
- |
1,613 |
7,305 | |||
Other |
- |
- |
2,409 |
1,372 | |||
Total |
- |
- |
167,159 |
144,383 | |||
Withholding income tax - IRRF – The balance at December 31, 2015 and 2014 relates mainly to IRRF on financial investments.
Social contribution to be offset – CSLL – In noncurrent, the balance refers basically to the final unappealable favorable decision in a lawsuit filed by the subsidiary CPFL Paulista. The subsidiary CPFL Paulista is awaiting the normal course of permission by the Federal Revenue Service in order to systematically offset the credit.
State VAT - ICMS to be offset – In noncurrent, the balance refers mainly to the credit recorded on purchase of assets that results in the recognition of property, plant and equipment, intangible assets and financial assets.
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( 8 ) SECTOR FINANCIAL ASSETS AND LIABILITIES
The breakdown and changes for the year in the balances of Sector financial asset and liability is as follows:
Consolidated | |||||||||||||
At December 31, 2014 |
Operating revenue |
Finance income or expense |
Receipt |
At December 31, 2015 | |||||||||
Constitution |
Realization |
Monetary adjustment |
Tariff flag |
Resources from CCEE |
|||||||||
Parcel "A" |
|||||||||||||
CVA (*) |
|||||||||||||
CCC (**) |
58 |
2 |
(61) |
- |
- |
- |
- | ||||||
CDE (***) |
53,198 |
517,380 |
(85,775) |
32,430 |
- |
- |
517,232 | ||||||
Electric energy cost |
1,248,165 |
423,879 |
(892,002) |
115,593 |
(827,974) |
(61,571) |
6,091 | ||||||
ESS and EER (****) |
(622,243) |
244,334 |
445,537 |
(65,701) |
(276,136) |
- |
(274,209) | ||||||
Proinfa |
9,249 |
(9,485) |
(5,297) |
(615) |
- |
- |
(6,148) | ||||||
Basic network charges |
154,593 |
47,847 |
(128,988) |
23,021 |
- |
- |
96,474 | ||||||
Pass-through from Itaipu |
(309,727) |
1,420,055 |
171,606 |
38,760 |
- |
- |
1,320,695 | ||||||
Transmission from Itaipu |
4,076 |
14,603 |
(4,234) |
1,025 |
- |
- |
15,469 | ||||||
Neutrality of industry charges |
(12,338) |
176,463 |
16,453 |
9,695 |
- |
- |
190,273 | ||||||
Overcontracting |
597,422 |
146,174 |
(151,648) |
11,568 |
(193,607) |
(265,205) |
144,705 | ||||||
Other financial components |
(211,735) |
95,608 |
64,072 |
(4,563) |
- |
- |
(56,618) | ||||||
Total |
910,720 |
3,076,861 |
(570,337) |
161,213 |
(1,297,717) |
(326,776) |
1,953,964 | ||||||
Current assets |
610,931 |
1,464,019 | |||||||||||
Noncurrent assets |
321,788 |
489,945 | |||||||||||
Current liabilities |
(21,998) |
- |
(*) Deferred tariff costs and gains variations from Parcel “A” items
(**) Fuel consumption account
(***) Energy Development Account – CDE
(****) System Service Charge (ESS) and Reserve Energy Charge (EER)
Receipt via injection from CCEE – The ANEEL disclosed order No. 773 of March 27, 2015, which set the amounts of the resources from the Regulated Contracting Environment (“ACR account”) that were transferred in March 2015 to the subsidiaries relating to the months of November and December 2014.
a) CVA
Refers to the variations of the Parcel A account, in accordance with note 3.14. These amounts are adjusted for inflation based on the SELIC rate and are compensated in the subsequent tariff processes.
b) Neutrality of industry charges
This refers to the neutrality of the industry charges contained in the electric energy tariffs, calculating the monthly differences between the amounts billed relating to such charges and the respective amounts considered at the time the distributors’ tariff was set.
c) Overcontracting
Electric energy distribution concessionaires are required to guarantee 100% of their energy market through contracts approved, registered and ratified by ANEEL. It is also assured to the distribution concessionaries that costs or revenues derived from energy surplus will be passed through the tariffs, limited to 5% of the energy load requirement. These amounts are adjusted for inflation based on SELIC rate and are compensated in the subsequent tariff processes.
d) Other financial components
Refer mainly to (i) exposure to price differences between sub-markets imposed on the distribution agents which enter into Agreements for commercialization of electric energy in the regulated environment – CCEAR; (ii) financial guarantees related to compensation of the cost of the prior raising of guarantees required from the distributors in order to conduct commercial transactions between sector agents; and (iii) financial components granted to offset any tariff process recalculations performed by the ANEEL, to neutralize the effects for consumers.
68
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
( 9 ) DEFERRED TAX ASSETS AND LIABILITIES
9.1 Breakdown of tax credits and debits
Parent company |
Consolidated | ||||||
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 | ||||
Social contribution credit/(debit) |
|||||||
Tax losses carryforwards |
46,602 |
41,133 |
152,200 |
47,564 | |||
Tax benefit of merged goodwill |
- |
- |
93,467 |
107,359 | |||
Deductible temporary differences |
(5,918) |
348 |
(547,066) |
(294,473) | |||
Subtotal |
40,684 |
41,481 |
(301,399) |
(139,550) | |||
Income tax credit / (debit) |
|||||||
Tax losses carryforwards |
116,438 |
108,182 |
417,600 |
126,085 | |||
Tax benefit of merged goodwill |
- |
- |
323,421 |
367,944 | |||
Deductible temporary differences |
(16,733) |
966 |
(1,519,170) |
(819,339) | |||
Subtotal |
99,705 |
109,148 |
(778,150) |
(325,311) | |||
PIS and COFINS credit/(debit) |
|||||||
Deductible temporary differences |
- |
- |
(18,159) |
2,348 | |||
Total |
140,389 |
150,628 |
(1,097,708) |
(462,513) | |||
Total tax credit |
140,389 |
150,628 |
334,886 |
938,496 | |||
Total tax debit |
- |
- |
(1,432,594) |
(1,401,009) |
9.2 Tax benefit of merged goodwill
Refers to the tax credit calculated on the goodwill derived from the acquisition of subsidiaries, as shown in the following table, which had been incorporated and is recognized in accordance with CVM Instructions No. 319/1999 and No. 349/2001 and ICPC 09 (R2) - Individual Interim financial statements, Separate Interim financial statements, Consolidated Interim financial statements and Application of the Equity Method. The benefit is realized proportionally to the tax amortization of the merged goodwill that gave rise to it, in accordance with the projected profit of the subsidiaries during the remaining concessions period, as shown in note 15.
Consolidated | |||||||
December 31, 2015 |
December 31, 2014 | ||||||
Social contribution |
Income tax |
Social contribution |
Income tax | ||||
CPFL Paulista |
55,123 |
153,119 |
61,819 |
171,719 | |||
CPFL Piratininga |
13,286 |
45,597 |
14,691 |
50,417 | |||
RGE |
25,058 |
106,324 |
28,496 |
117,683 | |||
CPFL Santa Cruz |
- |
- |
869 |
2,733 | |||
CPFL Leste Paulista |
- |
- |
387 |
1,184 | |||
CPFL Sul Paulista |
- |
- |
603 |
1,892 | |||
CPFL Jaguari |
- |
- |
312 |
962 | |||
CPFL Mococa |
- |
- |
182 |
554 | |||
CPFL Geração |
- |
18,380 |
- |
20,800 | |||
Total |
93,467 |
323,421 |
107,359 |
367,944 |
69
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
9.3 Accumulated balances on nondeductible temporary differences
Consolidated | |||||||||||
December 31, 2015 |
December 31, 2014 | ||||||||||
Social contribution |
Income tax |
PIS/COFINS |
Social contribution |
Income tax |
PIS/COFINS | ||||||
Deductible temporary differences |
|||||||||||
Provision for tax, civil and labor risks |
33,806 |
93,906 |
- |
29,282 |
81,340 |
- | |||||
Private pension fund |
1,867 |
5,185 |
- |
1,900 |
5,277 |
- | |||||
Allowance for doubtful debts |
15,680 |
43,556 |
- |
12,422 |
34,506 |
- | |||||
Free energy supply |
6,897 |
19,158 |
- |
6,210 |
17,251 |
- | |||||
Research and development and energy efficiency programs |
16,060 |
44,612 |
- |
11,821 |
32,836 |
- | |||||
Personnel-related provisions |
2,578 |
7,161 |
- |
3,303 |
9,176 |
- | |||||
Depreciation rate difference |
6,797 |
18,880 |
- |
7,087 |
19,685 |
- | |||||
Derivatives |
(219,524) |
(609,788) |
- |
- |
- |
- | |||||
Recognition of concession - adjustment of intangible asset (IFRS/CPC) |
(9,031) |
(25,085) |
- |
(1,572) |
(4,368) |
- | |||||
Recognition of concession - adjustment of financial asset (IFRS/CPC) |
(73,241) |
(202,271) |
(18,450) |
(45,322) |
(125,895) |
(2,838) | |||||
Tariff review - provisional |
- |
- |
- |
4,579 |
12,720 |
5,186 | |||||
Actuarial losses (IFRS/CPC) |
26,351 |
73,199 |
- |
26,351 |
73,199 |
- | |||||
Other adjustments (IFRS/CPC) |
(8,950) |
(24,860) |
- |
8,613 |
23,788 |
- | |||||
Accelerated depreciation |
(34) |
(95) |
- |
(19) |
(54) |
- | |||||
Others |
4,236 |
11,054 |
291 |
4,511 |
11,306 |
- | |||||
Nondeductible temporary differences - accumulated comprehensive income: |
|||||||||||
Property, plant and equipment - adjustment of deemed cost (IFRS/CPC) |
(58,484) |
(162,456) |
- |
(61,792) |
(171,643) |
- | |||||
Actuarial losses (IFRS/CPC) |
10,464 |
29,064 |
- |
12,672 |
35,199 |
- | |||||
Deductible temporary differences - Business combination - CPFL Renováveis |
- |
||||||||||
Deferred taxes - asset: |
|||||||||||
Fair value of property, plant and equipment (negative value added of assets) |
24,248 |
67,355 |
- |
25,725 |
71,458 |
- | |||||
Deferred taxes - liability: |
|||||||||||
Value added derived from determination of deemed cost |
(29,132) |
(80,922) |
- |
(30,905) |
(85,847) |
- | |||||
Value added of assets received from the former ERSA |
(86,495) |
(240,264) |
- |
(89,882) |
(249,671) |
- | |||||
Intangible asset - exploration right/authorization in indirect subsidiaries acquired |
(193,927) |
(538,685) |
- |
(204,549) |
(568,192) |
- | |||||
Other temporary differences |
(17,233) |
(47,874) |
- |
(14,907) |
(41,410) |
- | |||||
Total |
(547,066) |
(1,519,170) |
(18,159) |
(294,473) |
(819,339) |
2,348 | |||||
9.4 Expected recovery
The expected recovery of the deferred tax assets recorded in noncurrent assets, derived from (i) nondeductible temporary differences and tax benefit of merged goodwill is based on the average period of realization of each item included in deferred assets, and (ii) tax loss carryforwards, is based on the projections of future profits, approved by the Board of Directors and reviewed by the Fiscal Council. It is comprised as follows:
Expectation of recovery |
Parent company |
Consolidated | |
2016 |
1,991 |
11,729 | |
2017 |
23,975 |
51,653 | |
2018 |
21,889 |
(42,092) | |
2019 |
20,865 |
11,246 | |
2020 |
20,478 |
50,451 | |
2021 to 2023 |
49,291 |
181,552 | |
2024 to 2026 |
1,901 |
108,188 | |
2027 to 2029 |
- |
(37,842) | |
Total |
140,389 |
334,886 |
70
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
9.5 Reconciliation of the income tax and social contribution amounts recognized in the statements of profit or loss for 2015 and 2014:
Parent company | |||||||
2015 |
2014 | ||||||
Social contribution |
Income tax |
Social contribution |
Income tax | ||||
Profit before taxes |
875,250 |
875,250 |
959,607 |
959,607 | |||
Adjustments to reflect the effective rate: |
|||||||
Equity in subsidiaries |
(926,951) |
(926,951) |
(1,011,185) |
(1,011,185) | |||
Amortization of intangible asset acquired |
(23,177) |
- |
(25,180) |
- | |||
Interest on capital |
72,339 |
72,339 |
137,291 |
137,291 | |||
Other permanent additions (exclusions), net |
11,390 |
17,413 |
13,443 |
19,415 | |||
Tax base |
8,851 |
38,050 |
73,977 |
105,129 | |||
Statutory rate |
9% |
25% |
9% |
25% | |||
Tax credit/(debit) |
(797) |
(9,513) |
(6,658) |
(26,282) | |||
Tax credit recorded (not recorded), net |
(0) |
- |
11,830 |
10,680 | |||
Total |
(797) |
(9,513) |
5,172 |
(15,602) | |||
Current |
- |
(70) |
(4,558) |
(18,708) | |||
Deferred |
(797) |
(9,443) |
9,730 |
3,106 | |||
Consolidated | |||||||
2015 |
2014 | ||||||
Social contribution |
Income tax |
Social contribution |
Income tax | ||||
Profit before taxes |
1,454,454 |
1,454,454 |
1,510,304 |
1,510,304 | |||
Adjustments to reflect the effective rate: |
|||||||
Equity in subsidiaries |
(216,885) |
(216,885) |
(59,684) |
(59,684) | |||
Amortization of intangible asset acquired |
84,484 |
108,797 |
93,116 |
119,477 | |||
Tax incentives - PIIT(*) |
- |
- |
(10,914) |
(10,914) | |||
Effect of presumed profit regime |
(186,546) |
(244,541) |
17,467 |
(25,827) | |||
Adjustment of revenue from excess demand and excess reactive power |
117,374 |
117,374 |
102,062 |
102,062 | |||
Tax incentive - operating profit |
- |
(85,760) |
- |
(71,380) | |||
Other permanent additions (exclusions), net |
42,310 |
59,450 |
56,652 |
(1,661) | |||
Tax base |
1,295,192 |
1,192,890 |
1,709,002 |
1,562,375 | |||
Statutory rate |
9% |
25% |
9% |
25% | |||
Tax credit/(debit) |
(116,567) |
(298,223) |
(153,810) |
(390,594) | |||
Tax credit recorded (not recorded), net |
(43,595) |
(120,792) |
(15,179) |
(64,277) | |||
Total |
(160,162) |
(419,015) |
(168,989) |
(454,871) | |||
Current |
(10,916) |
(1,944) |
(135,421) |
(330,600) | |||
Deferred |
(149,246) |
(417,071) |
(33,568) |
(124,272) |
(*) Technologic innovation program
Amortization of intangible asset acquired – Refers to the nondeductible portion of amortization of intangible assets derived from the acquisition of investees. In the parent company, these amounts are classified in the line item of equity in subsidiaries, in conformity with ICPC 09 (R2) (Note 15).
Recognized (unrecognized) tax credit, net - the recognized tax credit refers to the amount of tax credit on tax loss carryforwards recorded as a result of review of projections of future profits. The unrecognized tax credit refers to losses generated for which currently there is no reasonable assurance that sufficient future taxable profits will be generated to absorb them.
The deferred income tax and social contribution recognized directly in equity (other comprehensive income) in 2015 and 2014 were as follows:
71
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated | ||||||||
2015 |
2014 | |||||||
Social Contribution |
Income tax |
Social Contribution |
Income tax | |||||
Actuarial losses (gains) |
(84,635) |
(84,635) |
247,040 |
247,040 | ||||
Limits on the asset ceiling |
7,984 |
7,984 |
- |
- | ||||
Basis of calculation |
(76,651) |
(76,651) |
247,040 |
247,040 | ||||
Statutory rate |
9% |
25% |
9% |
25% | ||||
Calculated taxes |
6,899 |
19,163 |
(22,234) |
(61,760) | ||||
Limitation on recognition (reversal) of tax credits |
(3,959) |
(10,998) |
16,590 |
46,081 | ||||
Taxes recognized in other comprehensive income |
2,940 |
8,165 |
(5,644) |
(15,679) |
9.6 Unrecognized tax credits
At December 31, 2015 the parent company has unrecognized tax loss carryforwards amounting to R$ 99,062 that could be recognized in the future, according to the annual reviews of projections of taxable profits income.
Some subsidiaries have also income tax and social contribution credits on tax loss carryforwards that were not recognized because currently there is no reasonable assurance that sufficient future taxable profits will be generated to absorb them. At December 31, 2015, the main subsidiaries that have such income tax and social contribution credits are CPFL Renováveis (R$ 577,329), Sul Geradora (R$ 72,567), CPFL Telecom (R$ 23,614) and CPFL Jaguari Geração (R$ 1,723). These tax losses can be carried forward indefinitely.
( 10 ) LEASES
The activities of provision services and lease of equipment for self-production of energy are carried out mainly by the subsidiary CPFL Eficiência Energética S.A (note 13) which is the lessor, and the main risks and rewards of ownership of the assets are transferred to the lessees.
The essence of the transaction is to lease self-production equipment in order to serve customers that require higher consumption of electricity in peak hours (when tariffs are higher) and provide maintenance and operation services for such equipment.
The subsidiary constructs the power generation plant at the customer’s facilities. When the equipment enters into service, the customer makes monthly fixed payments and the revenue is recognized during the lease agreement period based on the agreement effective interest rate.
The investments made in these finance lease projects are recognized at the present value of the minimum lease payments and these payments are treated as amortization of the accounts receivable and the operating revenues are recognized in profit or loss for the year at the effective interest rate implicit in the lease over the lease term.
In 2015 these investments resulted in an operational revenue of R$ 11,164 (R$ 10,683 in 2014).
Consolidated |
|||||||
2015 |
2014 |
||||||
Gross investment |
83,854 |
88,969 |
|||||
Unrealized finance income |
(36,466) |
(41,403) |
|||||
Present value of minimum lease payments |
47,388 |
47,566 |
|||||
Current |
12,883 |
12,396 |
|||||
Noncurrent |
34,504 |
35,169 |
|||||
Up to 1 year |
1 to 5 years |
Over 5 years |
Total | ||||
Gross investment |
16,432 |
38,489 |
28,933 |
83,854 | |||
Present value of minimum lease payments |
3,529 |
23,100 |
20,758 |
47,388 |
72
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
At December 31, 2015, there are no (i) unsecured residual values that benefit the lessor; (ii) provision for uncollectible minimum lease payments; or (iii) contingent payments recognized as revenue during the period.
( 11 ) CONCESSION FINANCIAL ASSET
Distribution |
Transmission |
Consolidated | |||
At December 31, 2013 (noncurrent) |
2,771,593 |
15,480 |
2,787,073 | ||
Additions |
435,852 |
59,576 |
495,428 | ||
Spin-off of generation activity in distributors |
(5,542) |
- |
(5,542) | ||
Adjustment of expected cash flow |
104,642 |
- |
104,642 | ||
Adjustment - financial asset measured at amortized cost |
- |
2,723 |
2,723 | ||
Disposals |
(9,708) |
- |
(9,708) | ||
At December 31, 2014 |
3,296,837 |
77,779 |
3,374,616 | ||
Current |
540,094 |
- |
540,094 | ||
Noncurrent |
2,756,744 |
77,779 |
2,834,522 | ||
Additions |
330,062 |
37,469 |
367,531 | ||
Transfers for intangible assets - extended concessions |
(537,198) |
- |
(537,198) | ||
Adjustment of expected cash flow |
414,800 |
- |
414,800 | ||
Adjustment - financial asset measured at amortized cost |
- |
11,400 |
11,400 | ||
Cash inputs - RAP |
- |
(3,257) |
(3,257) | ||
Disposals |
(20,788) |
- |
(20,788) | ||
At December 31, 2015 |
3,483,713 |
123,391 |
3,607,104 | ||
Current |
- |
9,630 |
9,630 | ||
Noncurrent |
3,483,713 |
113,761 |
3,597,474 |
The amount refers to the financial asset corresponding to the right established in the concession agreements of the energy distributors (measured at fair value) and transmitters (measured at amortized cost) to receive cash (i) in the distributor by compensation upon the return of the assets to the granting authority at the end of the concession, and (ii) the transmitter's right to receive cash throughout the concession through allowed annual revenue ("RAP").
For energy distributors, 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. Additionally, the difference to adjust the balance to its expected cash flows is recognized against a finance income and/or cost account in the statement of profit or loss for the year, based on the fair value (new replacement value - “VNR”) (finance income of R$ 414,800 in 2015 and R$ 104,642 in 2014).
The “Transfer to intangible assets” line records the impacts of the extension of the distribution concessions of subsidiaries CPFL Santa Cruz, CPFL Leste Paulista, CPFL Sul Paulista, CPFL Jaguari and CPFL Mococa, which transferred the amount of R$ 537,198 from the concession financial assets to intangible assets (note 15), corresponding to the right to explore the concession from July 2015 through June 2045.
For the energy transmitters, the remuneration for this asset is recognized according to the internal rate of return, which takes into account the investment made and the allowed annual revenue (“RAP”) to be received during the remaining concession period. The adjustment of R$ 11,400 is recognized against other operating income (R$ 2,723 in 2014).
73
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
( 12 ) OTHER RECEIVABLES
Consolidated | ||||||||
Current |
Noncurrent | |||||||
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 | |||||
Advances - Fundação CESP |
10,567 |
11,569 |
- |
- | ||||
Advances to suppliers |
10,666 |
15,934 |
- |
- | ||||
Pledges, funds and restricted deposits |
649 |
8,007 |
433,014 |
290,839 | ||||
Orders in progress |
274,605 |
262,076 |
- |
- | ||||
Services rendered to third parties |
6,987 |
12,787 |
- |
- | ||||
Energy pre-purchase agreements |
- |
515 |
31,375 |
32,119 | ||||
Collection agreements |
90,451 |
73,076 |
- |
- | ||||
Prepaid expenses |
61,602 |
43,185 |
19,579 |
9,630 | ||||
GSF Renegotiation |
8,724 |
- |
29,392 |
- | ||||
Receivables - energy development account - CDE/CCEE |
341,781 |
522,922 |
- |
- | ||||
Receivables - business combination |
- |
- |
13,950 |
13,950 | ||||
Advances to employees |
12,509 |
10,945 |
- |
- | ||||
Allowance for doubtful debts (note 6) |
(12,460) |
(13,304) |
(1,981) |
(1,981) | ||||
Indemnities for claims |
49,937 |
- |
- |
- | ||||
Other |
66,525 |
63,783 |
34,685 |
44,270 | ||||
Total |
922,541 |
1,011,495 |
560,014 |
388,828 |
Pledges, funds and restricted deposits: refer to guarantees offered for transactions conducted in the CCEE and short-term investments required by the subsidiaries’ loans agreements.
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 24).
Energy pre-purchase agreements: refer to prepayments made by subsidiaries, which will be settled with energy to be supplied in the future.
GSF Renegotiation: refer to the right to 2015 GSF reimbursement net of the agreed upon premium of subsidiaries Ceran, CPFL Jaguari Geração (Paulista Lajeado) and CPFL Renováveis, as consideration for the cost of electricity purchased for resale (note 28.2). This amount will be amortized as other operating expenses on a straight-line basis in the results of these subsidiaries between January 2016 and June 2020. (note 28.2).
Collection agreements: refer to (i) agreements between the distributors and municipal governments and companies for collection through the electric energy bills and subsequent pass-through of amounts related to public lighting, newspapers, healthcare, residential insurance, etc.; and (ii) receipts by subsidiary CPFL Total, for subsequent pass-through to customers that use the collection services provided by such subsidiary.
Receivables –Energy Development Account – CDE/CCEE: refer to: (i) low income subsidies totaling R$ 18,190 (R$ 18,549 at December 31, 2014) and (ii) other tariff discounts granted to consumers amounting to R$ 323,591 (R$ 504,373 as of December 31, 2014).
Indemnities for claims: refer to the amounts receivable from insurance companies as indemnities for claims occurred in subsidiaries of CPFL Renováveis.
On May 29, 2015, the distribution subsidiaries obtained preliminary injunctions authorizing non-payment of amounts owed for Energy Development Account (CDE) quotas up to the limit of the balances receivable from Eletrobrás relating to the CDE injection. The subsidiaries carried out matching of accounts of the accounts receivable by way of CDE injection and the CDE accounts payable (note 24) in September 2015, in view of the fact that the Eletrobrás Settlement Receipts in the amount of R$ 814,850 were issued as from September 25, 2015.
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
( 13 ) INVESTMENTS
Parent company |
Consolidated | ||||||
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 | ||||
Permanent equity interests - equity method |
|||||||
By subsidiary's equity |
6,178,637 |
5,420,845 |
1,235,832 |
1,085,835 | |||
Value-added of assets, net |
755,345 |
864,098 |
11,799 |
12,934 | |||
Goodwill |
6,054 |
6,054 |
- |
- | |||
Total |
6,940,036 |
6,290,998 |
1,247,631 |
1,098,769 |
13.1Permanent equity interests – equity method
The main information on investments in direct permanent equity interests is as follows:
December 31, 2015 |
December 31, 2015 |
December 31, 2014 |
2015 |
2014 | |||||||||||||
Investment |
Number of shares (thousand) |
Total assets |
Issued capital |
Equity |
Profit or loss for the year |
Equity interest |
Share of profit (loss) of investees | ||||||||||
CPFL Paulista |
880,653 |
11,163,454 |
880,653 |
1,352,393 |
298,203 |
1,352,393 |
728,213 |
298,203 |
502,719 | ||||||||
CPFL Piratininga |
53,096,770 |
4,235,183 |
178,574 |
537,670 |
211,637 |
537,670 |
479,686 |
211,637 |
187,715 | ||||||||
CPFL Santa Cruz |
371,772 |
475,121 |
71,261 |
131,149 |
12,424 |
131,149 |
132,353 |
12,424 |
49,052 | ||||||||
CPFL Leste Paulista |
892,772 |
158,175 |
27,623 |
46,301 |
13,556 |
46,301 |
38,066 |
13,556 |
7,173 | ||||||||
CPFL Sul Paulista |
454,958 |
204,729 |
25,974 |
55,233 |
16,201 |
55,233 |
44,375 |
16,201 |
11,351 | ||||||||
CPFL Jaguari |
209,294 |
172,258 |
19,357 |
28,521 |
4,852 |
28,521 |
25,627 |
4,852 |
2,027 | ||||||||
CPFL Mococa |
117,199 |
113,068 |
15,251 |
29,205 |
6,679 |
29,205 |
26,260 |
6,679 |
10,248 | ||||||||
RGE |
1,019,790 |
4,903,092 |
1,199,071 |
1,580,807 |
145,804 |
1,580,807 |
1,300,685 |
145,804 |
177,672 | ||||||||
CPFL Geração |
205,487,717 |
5,984,692 |
1,043,922 |
2,169,922 |
240,520 |
2,169,922 |
2,035,286 |
240,520 |
16,499 | ||||||||
CPFL Jaguari Geração (*) |
40,108 |
44,499 |
40,108 |
42,729 |
6,670 |
42,729 |
34,685 |
6,670 |
(4,657) | ||||||||
CPFL Brasil |
2,999 |
731,644 |
2,999 |
51,779 |
81,929 |
51,779 |
65,508 |
81,929 |
136,876 | ||||||||
CPFL Planalto (*) |
630 |
2,573 |
630 |
2,003 |
1,830 |
2,003 |
1,633 |
1,830 |
2,238 | ||||||||
CPFL Serviços |
1,480,835 |
142,360 |
21,096 |
7,117 |
(17,952) |
7,117 |
23,013 |
(17,952) |
5,719 | ||||||||
CPFL Atende (*) |
13,991 |
23,552 |
13,991 |
17,373 |
7,776 |
17,373 |
17,496 |
7,776 |
6,849 | ||||||||
Nect (*) |
2,059 |
28,431 |
2,059 |
16,087 |
18,155 |
16,087 |
9,458 |
18,155 |
10,812 | ||||||||
CPFL Total (*) |
19,005 |
47,088 |
19,005 |
19,930 |
5,836 |
19,930 |
24,417 |
5,836 |
10,327 | ||||||||
CPFL Jaguariuna (*) |
189,770 |
2,674 |
3,076 |
2,496 |
(167) |
2,496 |
2,553 |
(167) |
1 | ||||||||
CPFL Telecom |
36,420 |
58,990 |
36,420 |
(33,969) |
(60,718) |
(33,969) |
(293) |
(60,718) |
(8,339) | ||||||||
CPFL Centrais Geradoras (*) |
16,127 |
21,779 |
16,128 |
19,972 |
4,740 |
19,972 |
22,439 |
4,740 |
4,720 | ||||||||
CPFL ESCO |
48,164 |
95,235 |
48,164 |
66,038 |
35,194 |
66,038 |
409,385 |
35,194 |
1,602 | ||||||||
AUTHI (*) |
10 |
9,672 |
10 |
1,913 |
2,537 |
1,913 |
- |
2,537 |
- | ||||||||
Subtotal - By subsidiary's equity |
6,144,668 |
5,420,845 |
1,035,705 |
1,130,604 | |||||||||||||
Amortization of fair value adjustments of assets |
- |
- |
(108,754) |
(119,419) | |||||||||||||
Total |
6,144,668 |
5,420,845 |
926,951 |
1,011,185 | |||||||||||||
Investment |
6,178,637 |
5,420,845 |
|||||||||||||||
Provision for equity interest losses |
(33,969) |
- |
(*) number of quotas
Fair value adjustments (value added) of net assets acquired in business combinations are classified under Investments in the parent company’s statement of income. The amortization of the fair value adjustments (value added) of net assets of R$ 108,754 (R$ 119,419 in 2014) is classified in the parent company’s statement of profit or loss in line item “equity in subsidiaries”, in conformity with ICPC 09 (R2).
The movements in investments in subsidiaries, in the parent company, in 2015 and 2014 are as follows:
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Investment |
Investment at December 31, 2014 |
Increase / (decrease) / payment of capital |
Share of profit (loss) of investees (Profit or loss) |
Share of profit (loss) of investees (Comprehensive income) |
Dividends and interest on capital |
Corporate restructuring |
Investment at December 31, 2015 | |||||||
CPFL Paulista |
728,213 |
612,493 |
298,203 |
40,879 |
(327,395) |
- |
1,352,393 | |||||||
CPFL Piratininga |
479,686 |
15,511 |
211,637 |
32,263 |
(201,427) |
- |
537,670 | |||||||
CPFL Santa Cruz |
132,353 |
- |
12,424 |
- |
(13,628) |
- |
131,149 | |||||||
CPFL Leste Paulista |
38,066 |
- |
13,556 |
- |
(5,321) |
- |
46,301 | |||||||
CPFL Sul Paulista |
44,375 |
- |
16,201 |
- |
(5,343) |
- |
55,233 | |||||||
CPFL Jaguari |
25,627 |
- |
4,852 |
- |
(1,958) |
- |
28,521 | |||||||
CPFL Mococa |
26,260 |
- |
6,679 |
- |
(3,734) |
- |
29,205 | |||||||
RGE |
1,300,685 |
250,000 |
145,804 |
(940) |
(114,742) |
- |
1,580,807 | |||||||
CPFL Geração |
2,035,286 |
- |
240,520 |
(6,654) |
(103,532) |
4,302 |
2,169,922 | |||||||
CPFL Jaguari Geração |
34,685 |
- |
6,670 |
- |
1,374 |
- |
42,729 | |||||||
CPFL Brasil |
65,508 |
- |
81,929 |
- |
(95,658) |
- |
51,779 | |||||||
CPFL Planalto |
1,633 |
- |
1,830 |
- |
(1,460) |
- |
2,003 | |||||||
CPFL Serviços |
23,013 |
- |
(17,952) |
- |
2,056 |
- |
7,117 | |||||||
CPFL Atende |
17,496 |
- |
7,776 |
- |
(7,899) |
- |
17,373 | |||||||
Nect |
9,458 |
- |
18,155 |
- |
(11,526) |
- |
16,087 | |||||||
CPFL Total |
24,417 |
- |
5,836 |
- |
(10,323) |
- |
19,930 | |||||||
CPFL Jaguariuna |
2,553 |
110 |
(167) |
- |
- |
- |
2,496 | |||||||
CPFL Telecom |
(293) |
27,043 |
(60,718) |
- |
- |
- |
(33,969) | |||||||
CPFL Centrais Geradoras |
22,439 |
- |
4,740 |
- |
(2,905) |
(4,302) |
19,972 | |||||||
CPFL ESCO |
409,385 |
(360,000) |
35,194 |
- |
(18,541) |
- |
66,038 | |||||||
AUTHI |
- |
10 |
2,537 |
- |
(634) |
- |
1,913 | |||||||
5,420,845 |
545,167 |
1,035,705 |
65,547 |
(922,597) |
- |
6,144,668 |
Investment |
Investment as of December 31, 2013 |
Capital increase /payment of capital |
Share of profit (loss) of investees (Profit or loss) |
Share of profit (loss) of investees (Comprehensive income) |
|
Movement of capital in subsidiaries without a change in control |
Dividends and interest on capital |
Corporate restructuring |
Investment as of December 31, 2014 | |||||||
CPFL Paulista |
1,186,113 |
- |
502,719 |
(188,402) |
- |
(772,217) |
- |
728,213 | ||||||||
CPFL Piratininga |
384,609 |
50,000 |
187,715 |
(22,353) |
- |
(120,285) |
- |
479,686 | ||||||||
CPFL Santa Cruz |
100,369 |
- |
49,052 |
- |
- |
(17,068) |
- |
132,353 | ||||||||
CPFL Leste Paulista |
60,578 |
- |
7,173 |
- |
- |
(28,695) |
(989) |
38,066 | ||||||||
CPFL Sul Paulista |
51,432 |
- |
11,351 |
- |
- |
(16,973) |
(1,435) |
44,375 | ||||||||
CPFL Jaguari |
23,261 |
- |
2,027 |
- |
- |
1,251 |
(912) |
25,627 | ||||||||
CPFL Mococa |
34,145 |
- |
10,248 |
- |
- |
(16,014) |
(2,119) |
26,260 | ||||||||
RGE |
1,254,557 |
- |
177,672 |
(15,118) |
- |
(116,426) |
- |
1,300,685 | ||||||||
CPFL Geração |
2,116,833 |
- |
16,499 |
155 |
180,452 |
(278,653) |
- |
2,035,286 | ||||||||
CPFL Jaguari Geração |
48,356 |
- |
(4,657) |
- |
- |
(9,014) |
- |
34,685 | ||||||||
CPFL Brasil |
35,246 |
- |
136,876 |
- |
- |
(106,614) |
- |
65,508 | ||||||||
CPFL Planalto |
(115) |
- |
2,238 |
- |
- |
(490) |
- |
1,633 | ||||||||
CPFL Serviços |
77,078 |
- |
5,719 |
- |
- |
(11,631) |
(48,154) |
23,013 | ||||||||
CPFL Atende |
13,746 |
- |
6,849 |
- |
- |
(3,098) |
- |
17,496 | ||||||||
Nect |
5,999 |
- |
10,812 |
- |
- |
(7,353) |
- |
9,458 | ||||||||
CPFL Total |
20,893 |
- |
10,327 |
- |
- |
(6,803) |
- |
24,417 | ||||||||
CPFL Jaguariuna |
2,512 |
40 |
1 |
- |
- |
- |
- |
2,553 | ||||||||
CPFL Telecom |
(1,311) |
9,357 |
(8,339) |
- |
- |
- |
- |
(293) | ||||||||
CPFL Centrais Geradoras |
16,041 |
- |
4,720 |
- |
- |
(3,776) |
5,454 |
22,439 | ||||||||
CPFL ESCO (a) |
10 |
360,000 |
1,602 |
- |
- |
(380) |
48,154 |
409,385 | ||||||||
5,430,352 |
419,397 |
1,130,604 |
(225,720) |
180,452 |
(1,514,240) |
- |
5,420,845 | |||||||||
(a) Until October 27, 2014 denominated CPFL Participações |
In the consolidated financial statements, the investment balances correspond to the interest in the joint ventures accounted for by the equity method:
Investments in joint ventures |
December 31, 2015 |
December 31, 2014 |
2015 |
2014 | ||||
Share of equity |
Share of profit (loss) | |||||||
Baesa |
166,150 |
163,662 |
2,508 |
10,583 | ||||
Enercan |
473,148 |
415,952 |
74,677 |
49,040 | ||||
Chapecoense |
449,049 |
399,979 |
77,487 |
21,285 | ||||
EPASA |
147,485 |
106,243 |
63,348 |
(20,041) | ||||
Fair value adjustments of assets, net |
11,799 |
12,934 |
(1,136) |
(1,182) | ||||
1,247,631 |
1,098,769 |
216,885 |
59,684 |
13.2Fair value adjustments and goodwill
Fair value adjustments (value added) refer basically to the right to the concession, acquired through business combinations. The goodwill refers mainly to acquisitions of investments and is based on projections of future profits.
In the consolidated financial statements, these amounts are classified as Intangible Assets (note 15).
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
13.3Dividends and interest on capital receivable
At December 31, 2015 and 2014, 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 |
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 | |||||
CPFL Paulista |
612,585 |
755,625 |
52,383 |
10,570 |
664,968 |
766,196 | |||||
CPFL Piratininga |
172,239 |
- |
27,084 |
- |
199,323 |
- | |||||
CPFL Santa Cruz |
19,527 |
14,000 |
7,517 |
- |
27,044 |
14,000 | |||||
CPFL Leste Paulista |
3,220 |
- |
2,102 |
- |
5,321 |
- | |||||
CPFL Sul Paulista |
3,848 |
- |
1,986 |
- |
5,834 |
- | |||||
CPFL Jaguari |
1,152 |
- |
- |
- |
1,152 |
- | |||||
CPFL Mococa |
2,499 |
- |
1,234 |
- |
3,734 |
- | |||||
RGE |
67,815 |
82,117 |
64,073 |
50,077 |
131,887 |
132,194 | |||||
CPFL Geração |
103,532 |
- |
- |
- |
103,532 |
- | |||||
CPFL Centrais Geradoras |
1,185 |
- |
- |
- |
1,185 |
- | |||||
CPFL Jaguari Geração |
1,667 |
4,039 |
- |
- |
1,667 |
4,039 | |||||
CPFL Brasil |
41,176 |
- |
1,601 |
- |
42,777 |
- | |||||
CPFL Planalto |
458 |
- |
- |
- |
458 |
- | |||||
CPFL Serviços |
12,026 |
17,182 |
- |
4,583 |
12,026 |
21,765 | |||||
Nect |
4,539 |
3,793 |
- |
- |
4,539 |
3,793 | |||||
CPFL Total |
5,589 |
- |
- |
- |
5,589 |
- | |||||
AUTHI |
634 |
- |
- |
- |
634 |
- | |||||
CPFL ESCO |
9,565 |
380 |
6,354 |
- |
15,920 |
380 | |||||
1,063,256 |
877,136 |
164,334 |
65,231 |
1,227,590 |
942,367 |
In the consolidated financial statements, the balance of dividends and interest on capital receivable at December 31, 2015 is R$ 91,392 (R$ 54,483 at December 31, 2014) related to joint ventures and associate.
After decisions by the Annual and Extraordinary General Meetings (AGMs/EGMs) of its subsidiaries, in the first half of the year the Company recognized R$ 577,651 as dividends and interest on capital receivable for 2014. The subsidiaries also declared in 2015: (I) interim dividends and interest on capital of R$ 216,104, related to interim income of 2015 and (ii) R$ 127,058 as minimum mandatory dividend receivable related to 2015.
Out of the balance of dividends and interest on capital receivable as at December 31, 2014, the amount of R$ 8,576 was revoked during 2015.
Of the amounts recognized as receivables, R$ 627,014 was paid to the Company by the subsidiaries in 2015.
13.4Business combinations
13.4.1 Acquistion of Dobrevê Energia S.A. - (“DESA”)
In February 2014, the subsidiaries CPFL Renováveis and CPFL Geração signed an association agreement, whereby CPFL Renováveis merged WF2 Holding S.A. (“WF2”), wholly owner of the DESA’s shares on the acquisition date. Arrow - Fundo de Investimentos e Participações (“FIP Arrow”) held all shares of WF2. On October 1, 2014, after all the conditions precedent had been fulfilled, the acquisition was concluded.
The shareholders of both CPFL Renováveis and FIP Arrow approved the Protocol of Merger and the Termination of the Association Agreement at Extraordinary General Meetings with the approvals coming into effect on October 1, 2014. Therefore, on October 1, 2014, FIP Arrow contributed to CPFL Renováveis the net assets of WF2 as a capital increase, in turn CPFL Renováveis issued to FIP Arrow 61,752,782 new common shares, whereby FIP Arrow became a shareholder of CPFL Renováveis, with an interest of 12.27%.
After the capital increase, CPFL Renováveis merged WF2, dissolving that company, and CPFL Renováveis, now holds directly 100% of DESA shares and, consequently, DESA is now a subsidiary of CPFL Renováveis.
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
The exchange ratio for 100% of the shares of WF2 for 12.27% of the shares of CPFL Renováveis (after the issuance of new common shares) was freely negotiated and agreed between the parties and reflects the best valuation of WF2 and CPFL Renováveis.
This association between CPFL Renováveis and DESA resulted in a business combination in accordance with CPC 15 (R) – Business Combination and IFRS 3 (R) – “Business Combination” since CPFL Renováveis now holds the control of WF2 and paid for obtaining the control of such company through the issuance of new shares.
As a result of this issuance of shares, the equity of CPFL Renováveis increased by R$ 833,663, which reflects the fair value of the shares issued by CPFL Renováveis that were transferred to FIP Arrow on the acquisition date and that represents the total price paid. The association was appraised at fair value using the income approach.
As a result of this transaction, the Company, through the subsidiary CPFL Geração, had its interest in CPFL Renováveis reduced from 58.83% to 51.61%, with a gain on equity interest in the amount of R$180,297 which, in accordance with ICPC 09 (R2) and IFRS 10 / CPC 36, was recognized as a capital transaction, that is, transaction with shareholders in the capacity of owners, and accounted for directly in CPFL Energia’s Equity in the capital reserve account, as follows:
Before capital increase |
After capital increase |
||||||||||||||
Shareholders' equity attributable to: |
Number of shares |
Shareholders' equity percentage (1) |
Interest |
Number of shares |
Shareholders' equity percentage (2) |
Interest |
Interest increase | ||||||||
CPFL Energia - controlling shareholder |
259,748,799 |
58.83% |
2,037,289 |
259,748,799 |
51.61% |
2,217,587 |
180,297 | ||||||||
Noncontrolling shareholder |
181,781,079 |
41.17% |
1,425,781 |
243,533,861 |
48.39% |
2,079,146 |
653,366 | ||||||||
441,529,878 |
100% |
3,463,070 |
503,282,660 |
100% |
4,296,733 |
833,663 | |||||||||
(1) |
Interest on September 30, 2014 | ||||||||||||||
(2) |
Interest on October 1, 2014 |
Additional information on the association (acquisition of WF2)
a) Assets acquired and liabilities recognized on the acquisition date
The total amount paid on the transaction (fair value of the shares issued by CPFL Renováveis) was allocated at fair value to the assets acquired and liabilities assumed, including the intangible assets related to the right to operate the authorization, which is amortized over the remaining period of the authorization related to the operation of the wind farms and SHPs acquired. The average term for all projects is estimated at 25 years. Consequently, as the total amount paid was temporarily allocated to identified assets and liabilities, no residual value was allocated to goodwill for this transaction.
The subsidiary's management does not expect the amount allocated as the right to operate the acquisition to be tax-deductible and has therefore recognized deferred income tax and social contribution for the difference between the allocated amount and the tax base of this asset.
Allocation of the amount paid for assets and liabilities acquired was carried out using amounts provisionally calculated for the financial statements for the year ended December 31, 2014, based on analyses conducted by Management at the time such statements were prepared. The fair values presented were still pending confirmation until conclusion of the economic-financial valuation report prepared by an independent appraiser, which was finalized on September 30, 2015.
As a consequence, reclassifications were made in the amounts as at December 31, 2014, relating to: (i) increase in the fair value of property, plant and equipment, and reduction of intangible assets related to exploration rights, as a consequence of the refining of the premises used for determination of the value of the tangible and intangible assets; (ii) conclusion of the allocation of the fair value of the provision for tax, civil and labor risks in the amount of R$ 17,293; and (iii) correlated effects of the matters described in sub-items (i) and (ii) above on the balances of deferred income tax and social contribution and the portion of equity attributable to non-controlling shareholders.
The fair value of the adjusted assets and liabilities, as well as the allocation of the price paid, are as follows:
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
WF2 consolidated (preliminary) |
WF2 consolidated (final) | |||
October 1, 2014 |
October 1, 2014 | |||
Current assets |
||||
Cash and cash equivalents |
139,293 |
139,293 | ||
Other current assets |
32,274 |
32,274 | ||
Noncurrent assets |
||||
Property, plant and equipment |
1,295,476 |
1,569,594 | ||
Intangible assets |
7,937 |
7,937 | ||
Intangible assets - operation right |
784,459 |
555,961 | ||
Other noncurrent assets |
98,264 |
98,264 | ||
Current liabilities |
||||
Borrowings and debentures |
102,996 |
102,996 | ||
Other current liabilities |
106,097 |
106,097 | ||
Noncurrent liabilities |
||||
Borrowings and debentures |
871,987 |
871,987 | ||
Deferred taxes |
280,234 |
295,745 | ||
Other noncurrent liabilities |
56,406 |
73,699 | ||
Net assets acquired |
939,983 |
952,800 | ||
Goodwill on acquisition |
||||
Consideration transferred: |
833,663 |
833,663 | ||
(+) Noncontrolling interests |
106,320 |
119,137 | ||
(-) Fair value of net assets acquired |
939,983 |
952,800 | ||
Goodwill |
- |
- |
Reclassification of the comparative balances
In conformity with the requirements of IFRS 03 – Business Combination and CPC 15 (R1) – Business Combination, the Company reclassified the comparative balances as at December 31, 2014 as if the accounting of such business combination, considering the closing balances, had been completed at the acquisition date. The reclassifications made did not have material effect on the profit for the year ended December 31, 2014, as previously presented. The reclassifications made are summarized as follows:
· Assets:
79
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated | |||||
December 31, 2014 |
Adjustments |
December 31, 2014 (reclassified) | |||
Assets |
|||||
Current |
9,214,704 |
- |
9,214,704 | ||
Noncurrent |
|||||
Other noncurrent assets |
6,751,305 |
- |
6,751,305 | ||
Investments |
1,098,769 |
- |
1,098,769 | ||
Property, plant and equipment |
8,878,064 |
271,422 |
9,149,486 | ||
Intangible assets |
9,155,973 |
(225,802) |
8,930,171 | ||
Total |
35,098,816 |
45,620 |
35,144,436 |
· Liabilities:
Consolidated | |||||
December 31, 2014 |
Adjustments |
December 31, 2014 (reclassified) | |||
Liabilities |
|||||
Current |
7,417,104 |
- |
7,417,104 | ||
Noncurrent |
|||||
Provision for tax, civil and labor risks |
490,858 |
17,293 |
508,151 | ||
Deferred tax liabilities |
1,385,498 |
15,511 |
1,401,009 | ||
Other payables |
16,420,844 |
- |
16,420,844 | ||
Total noncurrent liabilities |
18,297,200 |
32,804 |
18,330,004 | ||
Equity attributable to owners of the Company |
6,943,535 |
- |
6,943,535 | ||
Noncontrolling interests |
2,440,978 |
12,816 |
2,453,794 | ||
Total equity |
9,384,513 |
12,816 |
9,397,329 | ||
Total |
35,098,816 |
45,620 |
35,144,436 |
· Statement of profit or loss for the year:
As mentioned previously in this note, the effects on the profit (loss) for the year ended December 31, 2014 are immaterial for purposes of restatement of the comparative balances. These effects result from the difference between the period for amortization of the exploration rights intangible assets and the period for depreciation of fixed assets, both recorded as expenses in the statement of profit or loss for the year.
b) Net cash inflow on the association
No cash payment was made, considering that the acquisition was made through exchange of shares, there was only the incorporation of the cash of WF2 in the amount of R$139,293.
c) Financial information on net operating revenue and profit of the subsidiary acquired included in the consolidated financial statements in 2014
80
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Net operating revenue |
Net income | |||
2014 |
2014 | |||
Consolidated DESA - from October 1, 2014 to December 31, 2014. |
48,036 |
|
1,880 |
The Company's consolidated financial statements for the year ended December 31, 2014 include 3 (three) months of operations of DESA.
d) Noncontrolling interests
Noncontrolling interests, consisting of the 40% interest held by third parties in Ludesa Energética S.A., WF2's subsidiary, totaling R$ 119,137, was recognized in the consolidated financial statements on the acquisition date, based on its fair value. This interest was appraised at fair value using the income approach method.
13.4.1.1. Combined financial information on net operating revenue and profit (loss) for 2014 if the acquisition had occurred on January 1, 2014.
Net operating revenue |
Net income (loss) | |||
2014 |
2014 | |||
Consolidated CPFL Energia - historical |
17,305,942 |
|
886,443 | |
Consolidated pro forma adjustment (i) |
104,038 |
(46,106) | ||
Total |
17,409,980 |
|
840,337 |
(i) The pro forma adjustments to the net operating revenue took into account the addition of the net operating revenue of subsidiary WF2 for the period in which it were not subsidiary and consequently were not consolidated by the Company.
The pro forma adjustments of the profit take into account: (i) addition of the profit or loss of subsidiary WF2 for the period in which it were not consolidated by the Company; (ii) inclusion of amortization of the operation right, net of tax effects, if the acquisition had occurred on January 1, 2014; (iii) exclusion of the effects of non-recurring consultancy expenses for association with WF2; and (iv) inclusion of the financial effects of the debentures issued by WF2 to acquire DESA’ noncontrolling interests;
13.5 Noncontrolling interests and joint ventures
The disclosure of interests in subsidiaries, in accordance with IFRS 12 and CPC 45, is as follows:
81
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
13.5.1 Movements in noncontrolling interests
CERAN |
CPFL Renováveis |
Paulista Lajeado |
Total | |||||
At December 31, 2013 |
216,331 |
1,480,864 |
77,624 |
1,774,819 | ||||
Equity Interests and voting capital |
35.00% |
41.16% |
40.07% |
|||||
Net equity attributable to noncontrolling shareholders |
13,145 |
(72,782) |
(3,097) |
(62,733) | ||||
Business combination |
- |
759,686 |
- |
759,686 | ||||
Dividends |
(15,022) |
(7,417) |
(7,099) |
(29,538) | ||||
Other movements |
- |
11,560 |
(1) |
11,559 | ||||
At December 31, 2014 |
214,454 |
2,171,911 |
67,427 |
2,453,794 | ||||
Equity Interests and voting capital |
35.00% |
48.39% |
40.07% |
|||||
Net equity attributable to noncontrolling shareholders |
25,990 |
(20,611) |
4,958 |
10,337 | ||||
Dividends |
(6,173) |
(2,818) |
843 |
(8,147) | ||||
Other movements |
- |
7 |
(48) |
(41) | ||||
At December 31, 2015 |
234,271 |
2,148,490 |
73,182 |
2,455,942 | ||||
Equity Interests and voting capital |
35.00% |
48.39% |
40.07% |
13.5.2 Summarized financial information of subsidiaries that have interests of noncontrolling shareholders
Summarized financial information on subsidiaries that have interests of noncontrolling shareholders at December 31, 2015 and 2014 is as follows:
December 31, 2015 |
December 31, 2014 | |||||||||||
|
CERAN |
CPFL Renováveis |
Paulista Lajeado |
CERAN |
CPFL Renováveis |
Paulista Lajeado | ||||||
Current assets |
203,205 |
1,296,420 |
39,916 |
138,684 |
1,166,223 |
13,756 | ||||||
Cash and cash equivalents |
154,845 |
871,503 |
30,907 |
84,201 |
828,411 |
328 | ||||||
Noncurrent assets |
997,049 |
10,607,682 |
126,147 |
1,040,545 |
10,515,273 |
116,751 | ||||||
Current liabilities |
128,920 |
1,174,865 |
16,515 |
129,255 |
1,019,960 |
35,315 | ||||||
Financial liabilities |
101,347 |
929,758 |
6,889 |
108,355 |
786,660 |
9,388 | ||||||
Noncurrent liabilities |
401,988 |
6,425,440 |
40,908 |
437,249 |
6,306,222 |
- | ||||||
Financial liabilities |
401,988 |
5,151,163 |
40,908 |
437,249 |
4,972,544 |
- | ||||||
Equity |
669,346 |
4,303,797 |
108,639 |
612,726 |
4,355,314 |
95,192 | ||||||
Equity attributable to owners of the Company |
669,346 |
4,176,063 |
108,639 |
612,726 |
4,230,497 |
95,192 | ||||||
Equity attributable to noncontrolling interests |
- |
127,734 |
- |
- |
124,816 |
- | ||||||
2015 |
2014 | |||||||||||
CERAN |
CPFL Renováveis |
Paulista Lajeado |
CERAN |
CPFL Renováveis |
Paulista Lajeado | |||||||
Net operating revenue |
281,374 |
1,499,356 |
31,225 |
327,066 |
1,247,627 |
42,771 | ||||||
Depreciation and amortization |
(45,986) |
(540,578) |
(7) |
(50,017) |
(432,267) |
(6) | ||||||
Interest income |
17,532 |
115,639 |
2,243 |
11,604 |
87,131 |
656 | ||||||
Interest expense |
(40,801) |
(551,407) |
(1,206) |
(40,441) |
(418,141) |
- | ||||||
Income tax expense |
(38,381) |
(49,221) |
(2,843) |
(18,880) |
(33,645) |
(2,691) | ||||||
Profit (loss) for the year |
74,256 |
(48,717) |
12,374 |
37,558 |
(167,362) |
(7,728) | ||||||
Attributable to owners of the Company |
74,256 |
(54,447) |
12,374 |
37,558 |
(168,771) |
(7,728) | ||||||
Attributable to noncontrolling interests |
- |
5,730 |
- |
- |
1,410 |
- |
13.5.3 Joint ventures
Summarized financial information on joint ventures at December 31, 2015 and 2014 is as follows:
82
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
December 31, 2015 |
December 31, 2014 | |||||||||||||||
Joint venture |
Enercan |
Baesa |
Chapecoense |
Epasa |
Enercan |
Baesa |
Chapecoense |
Epasa | ||||||||
Current assets |
292,133 |
105,198 |
356,493 |
305,371 |
143,213 |
71,178 |
252,223 |
337,891 | ||||||||
Cash and cash equivalents |
112,387 |
75,097 |
239,192 |
120,307 |
45,329 |
19,178 |
154,554 |
96,588 | ||||||||
Noncurrent assets |
1,253,002 |
1,174,604 |
3,079,957 |
600,413 |
1,238,047 |
1,210,974 |
3,090,190 |
637,190 | ||||||||
Current liabilities |
264,721 |
188,077 |
447,142 |
336,794 |
149,088 |
138,909 |
374,374 |
480,948 | ||||||||
Financial liabilities |
167,845 |
182,215 |
251,683 |
180,190 |
91,723 |
130,122 |
313,222 |
345,657 | ||||||||
Noncurrent liabilities |
309,317 |
427,284 |
2,108,820 |
292,490 |
378,465 |
488,751 |
2,183,767 |
308,168 | ||||||||
Financial liabilities |
265,095 |
415,868 |
2,108,109 |
292,295 |
338,297 |
479,329 |
2,183,155 |
307,622 | ||||||||
Equity |
971,097 |
664,442 |
880,488 |
276,500 |
853,707 |
654,492 |
784,272 |
185,965 | ||||||||
2015 |
2014 | |||||||||||||||
Joint venture |
Enercan |
Baesa |
Chapecoense |
Epasa |
Enercan |
Baesa |
Chapecoense |
Epasa | ||||||||
Net operating revenue |
523,055 |
427,561 |
729,511 |
949,246 |
492,921 |
395,440 |
820,500 |
1,220,511 | ||||||||
Depreciation and amortization |
(53,733) |
(55,342) |
(130,652) |
(32,413) |
(53,674) |
(50,554) |
(130,988) |
(32,339) | ||||||||
Interest income |
15,742 |
8,426 |
28,235 |
11,275 |
14,295 |
6,345 |
26,208 |
2,368 | ||||||||
Interest expense |
(56,049) |
(22,555) |
(132,625) |
(29,778) |
(40,572) |
(32,933) |
(135,463) |
(34,983) | ||||||||
Income tax expense |
(76,795) |
(5,165) |
(76,880) |
(32,869) |
(50,112) |
(20,982) |
(21,751) |
16,862 | ||||||||
Profit (loss) for the year |
153,269 |
10,028 |
151,935 |
118,734 |
100,650 |
42,321 |
41,735 |
(34,271) | ||||||||
Equity Interests and voting capital |
48.72% |
25.01% |
51.00% |
53.34% (*) |
48.72% |
25.01% |
51.00% |
57.13% (*) |
(*) CPFL Energia indirect interest was (i) 52.75% from January 1 to February 28, 2014, (ii) 57.13% from March 01, 2014 to December 31, 2014 (iii) 53.84% from January 1, 2015 to January 31, 2015 and (iv) 53.34% from February 1, 2015.
Although holding more than 50% 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 dividends to subsidiary CPFL Geração above the mandatory minimum dividend of 25% without the prior consent of the BNDES.
13.5.4 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 operation of the hydropower plant belong to Furnas Centrais Elétricas S.A. In order to maintain these assets operating jointly with Furnas (joint 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 (information on energy capacity measures not audited by the independent auditors).
13.6 Capital increase and decrease
13.6.1 Epasa
On January 31, 2014, after carrying out a capital increase, subsidiary CPFL Geração began holding 57.13% of the capital stock of the joint venture EPASA, and the equity interests of certain other shareholders were diluted. According to the Shareholders Agreement in effect, these shareholders were assured the right to repurchase shares in order to re-comprise their stakes by March 1, 2015. This right was partially exercised by Eletricidade do Brasil S/A and OZ&M Incorporação e Participação Ltda. by February 25, 2015, which purchased from subsidiary CPFL Geração 10,704,756 common shares for the amount of R$ 10,454, generating a positive result of R$ 3,391, recorded in line item “Gain on disposal of noncurrent assets” (note 28).
After this corporate operation, the ownership structure of the EPASA joint venture stood as follows:
83
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
From February 25, 2015 |
At December 31, 2014 | ||||||
Shareholder |
Shares |
Interest - % |
Shares |
Interest - % | |||
CPFL Geração de Energia S/A |
150,941,659 |
53.34 |
161,646,415 |
57.13 | |||
Eletricidade do Brasil S/A |
118,100,009 |
41.74 |
107,903,763 |
38.13 | |||
Aruanã Energia S/A |
6,960,800 |
2.46 |
6,960,800 |
2.46 | |||
OZ&M Incorporação, Participação Ltda |
6,959,277 |
2.46 |
6,450,767 |
2.28 | |||
Total |
282,961,745 |
100.00 |
282,961,745 |
100.00 |
13.6.2 CPFL Paulista and RGE
On December 16, 2015, a Board of Directors’ Meeting approved capital increases of R$ 600,000 in CPFL Paulista and R$ 250,000 in RGE made by the parent company CPFL Energia.
13.6.3 CPFL ESCO
On August 26, 2015, a Board of Directors’ Meeting approved a capital reduction of R$ 360,000 in CPFL ESCO, for the parent company CPFL Energia, by cash return to the Company.
13.7Advance for future capital increase
At December 31, 2015 the balances of advance for future capital increase refer to advances to the following subsidiaries: (i) CPFL Serviços (R$ 31,000); (ii) CPFL Telecom (R$ 19,000); and (iii) Authi (R$ 2,600).
84
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
( 14 ) PROPERTY, PLANT AND EQUIPMENT
Consolidated | |||||||||||||||
Land |
Reservoirs, dams and water mains |
Buildings, construction and improvements |
Machinery and equipment |
Vehicles |
Furniture and fittings |
In progress |
Total | ||||||||
At December 31, 2013 |
115,946 |
986,527 |
1,318,394 |
4,291,334 |
22,661 |
13,731 |
968,826 |
7,717,419 | |||||||
Historical cost |
126,820 |
1,375,993 |
1,718,629 |
5,671,053 |
29,928 |
24,277 |
968,826 |
9,915,527 | |||||||
Accumulated depreciation |
(10,874) |
(389,466) |
(400,235) |
(1,379,719) |
(7,267) |
(10,545) |
- |
(2,198,107) | |||||||
Additions |
- |
375 |
372 |
6,739 |
- |
88 |
330,900 |
338,475 | |||||||
Disposals |
(1,772) |
- |
(12,723) |
(14,719) |
(1,804) |
(582) |
(71,760) |
(103,359) | |||||||
Reversal of provision for socio environmental costs |
- |
- |
9,193 |
- |
- |
- |
- |
9,193 | |||||||
Transfers, net |
500 |
(3,674) |
156,986 |
997,610 |
14,862 |
(92) |
(1,166,193) |
- | |||||||
Transfers from/to other assets - cost |
(23) |
163 |
(7,467) |
(5,284) |
- |
(103) |
(3,716) |
(16,430) | |||||||
Depreciation |
(3,981) |
(61,923) |
(54,392) |
(293,464) |
(4,511) |
(2,280) |
- |
(420,551) | |||||||
Write-off of depreciation |
- |
- |
- |
404 |
1,026 |
482 |
- |
1,911 | |||||||
Business combination |
71,646 |
264,146 |
106,682 |
844,162 |
93 |
240 |
330,030 |
1,616,999 | |||||||
Spin-off of generation activity in distributors - cost |
- |
- |
460 |
6,089 |
- |
204 |
- |
6,754 | |||||||
Spin-off of generation activity in distributors - depreciation |
- |
- |
(32) |
(866) |
- |
(28) |
- |
(926) | |||||||
At December 31, 2014 |
182,316 |
1,185,614 |
1,517,475 |
5,832,005 |
32,328 |
11,660 |
388,088 |
9,149,486 | |||||||
Historical cost |
197,393 |
1,637,812 |
1,976,212 |
7,521,804 |
43,081 |
22,462 |
388,088 |
11,786,852 | |||||||
Accumulated depreciation |
(15,077) |
(452,199) |
(458,737) |
(1,689,799) |
(10,753) |
(10,802) |
- |
(2,637,366) | |||||||
Additions |
- |
- |
168 |
512 |
- |
- |
583,538 |
584,216 | |||||||
Disposals |
(1,354) |
(414) |
(4,093) |
(21,773) |
(558) |
(284) |
- |
(28,477) | |||||||
Transfers |
2,338 |
140 |
61,615 |
217,462 |
10,436 |
578 |
(292,569) |
- | |||||||
Reclassification - cost |
(212) |
328,101 |
(499,943) |
172,169 |
22 |
(137) |
- |
- | |||||||
Transfers from/to other assets - cost |
(24) |
2 |
(6,548) |
6,598 |
(1) |
(186) |
630 |
471 | |||||||
Depreciation |
(6,257) |
(68,562) |
(50,716) |
(370,076) |
(6,343) |
(1,926) |
- |
(503,881) | |||||||
Write-off of depreciation |
- |
139 |
204 |
3,572 |
379 |
186 |
- |
4,480 | |||||||
Reclassification - depreciation |
- |
(68,775) |
68,711 |
151 |
- |
(88) |
- |
- | |||||||
Transfers from/to other assets - depreciation |
- |
- |
- |
35 |
- |
- |
- |
35 | |||||||
Impairment |
- |
- |
(10,891) |
(16,565) |
(32) |
(106) |
(5,519) |
(33,112) | |||||||
At December 31, 2015 |
176,807 |
1,376,246 |
1,075,982 |
5,824,089 |
36,230 |
9,696 |
674,166 |
9,173,217 | |||||||
Historical cost |
198,141 |
1,965,641 |
1,516,228 |
7,878,838 |
52,947 |
22,323 |
674,166 |
12,308,285 | |||||||
Accumulated depreciation |
(21,334) |
(589,395) |
(440,246) |
(2,054,749) |
(16,717) |
(12,627) |
- |
(3,135,068) | |||||||
Average depreciation rate 2015 |
3.86% |
3.66% |
3.46% |
4.62% |
14.24% |
10.49% |
|||||||||
Average depreciation rate 2014 |
3.86% |
2.99% |
2.85% |
4.44% |
14.29% |
11.25% |
85
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
In the financial statements, the balance of construction in progress refers mainly to works in progress of the operating subsidiaries and/or those under development, especially for CPFL Renováveis’ projects, which has construction in progress of R$ 612,083 in December 31, 2015.
In 2015, mainly owing to the process of adapting their accounts to the newly defined ANEEL chart of accounts, subsidiaries Ceran and CPFL Renováveis carried out certain reclassifications, mainly involving the accounts “Buildings, civil works and benefits/improvements”, “Machinery and equipment” and “Reservoirs, dams and water pipelines”. These amounts are shown in the lines “Reclassification - cost” and “Reclassification – depreciation” and do not generate material effects on the statement of profit or loss for the year.
In accordance with IAS 23 / CPC 20 (R1), the interest on borrowings taken by subsidiaries to finance the works is capitalized during the construction phase. During 2015, R$ 34,212 was capitalized in the financial statements (R$ 4,236 in 2014) at a rate of 11.16% (8.59% in 2014). For further details on assets under construction and borrowing costs, see note 30.
In the financial statements, depreciation expenses are recognized in the statement of profit or loss in line item “depreciation and amortization” (note 29).
At December 31, 2015, the total amount of property, plant and equipment pledged as collateral for borrowings, as mentioned in note 17, is approximately R$ 3,567,258, mainly relating to the subsidiary CPFL Renováveis (R$ 3,535,263).
14.1 Impairment testing
For all the reporting years the Company assesses whether there are indicators of impairment of its assets that would require an impairment test. The assessment was based on external and internal information sources, taking into account fluctuations in interest rates, changes in market conditions and other factors.
As the deterioration of the Brazilian economy has intensified, at December 31, 2015, an impairment in the amount of R$ 33,112 was recognized due to the assessment of the recoverable amount of the cash-generating units of subsidiaries CPFL Telecom (R$ 31,284) and CPFL Total (R$ 1,828). Such loss was recognized in the statement of profit or loss in line item “Other operating expenses” (note 29).
Such provision for impairment was based on the assessment of the cash-generating units comprising fixed assets of subsidiaries CPFL Telecom and CPFL Total which, separately, are not featured as an operating segment and are allocated in the operating segments of Others and Services, respectively (note 31). Additionally, during 2015 the Company did not change the form of aggregation of the assets for identification of these cash-generating units.
Fair value was measured by using the cost approach, a valuation technique that reflects the amount that would be required at present to replace the service capacity of an asset (normally referred to as the cost of substitution or replacement). A provision for impairment of assets was recognized owing to the unfavorable scenario for the business of these subsidiaries and it was calculated based on their fair values, net of selling expenses.
86
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
( 15 ) INTANGIBLE ASSETS
Consolidated | |||||||||||||
Goodwill |
Concession right |
Other intangible assets |
Total | ||||||||||
Acquired in business combinations |
Distribution infrastructure - operational |
Distribution infrastructure - in progress |
Public utilities |
||||||||||
At December 31, 2013 |
6,115 |
4,312,381 |
3,763,197 |
574,131 |
31,582 |
60,922 |
8,748,328 | ||||||
Historical cost |
6,152 |
6,811,237 |
9,310,710 |
574,131 |
35,840 |
156,023 |
16,894,093 | ||||||
Accumulated amortization |
(37) |
(2,498,856) |
(5,547,513) |
- |
(4,258) |
(95,100) |
(8,145,764) | ||||||
Additions |
- |
- |
- |
709,811 |
- |
18,887 |
728,698 | ||||||
Amortization |
- |
(285,018) |
(440,689) |
- |
(1,419) |
(13,166) |
(740,292) | ||||||
Transfer - intangible assets |
- |
- |
433,440 |
(433,440) |
- |
- |
- | ||||||
Transfer - financial asset |
- |
- |
235 |
(436,087) |
- |
- |
(435,852) | ||||||
Disposal and transfer - other assets |
- |
- |
(21,279) |
159 |
- |
16,357 |
(4,763) | ||||||
Business combination |
- |
630,848 |
- |
- |
- |
3,488 |
634,336 | ||||||
Spin-off of generation activity in distributors |
- |
- |
(299) |
- |
- |
13 |
(286) | ||||||
At December 31, 2014 |
6,115 |
4,658,210 |
3,734,606 |
414,574 |
30,162 |
86,503 |
8,930,171 | ||||||
Historical cost |
6,152 |
7,441,935 |
9,526,355 |
414,574 |
35,840 |
195,577 |
17,620,433 | ||||||
Accumulated amortization |
(37) |
(2,783,725) |
(5,791,748) |
- |
(5,678) |
(109,074) |
(8,690,262) | ||||||
Additions |
- |
- |
- |
879,851 |
- |
9,298 |
889,149 | ||||||
Amortization |
- |
(302,665) |
(460,774) |
- |
(1,419) |
(12,604) |
(777,462) | ||||||
Transfer - intangible assets |
- |
- |
512,912 |
(512,912) |
- |
- |
- | ||||||
Transfer - financial asset |
- |
- |
387 |
(330,449) |
- |
- |
(330,062) | ||||||
Transfers from concession financial asset - extended concessions |
- |
- |
488,635 |
48,563 |
- |
- |
537,198 | ||||||
Disposal and transfer - other assets |
- |
- |
(26,584) |
- |
- |
(6,228) |
(32,813) | ||||||
Impairment losses |
- |
- |
- |
- |
- |
(5,844) |
(5,844) | ||||||
At December 31, 2015 |
6,115 |
4,355,546 |
4,249,182 |
499,627 |
28,743 |
71,125 |
9,210,338 | ||||||
Historical cost |
6,152 |
7,441,902 |
10,348,857 |
499,627 |
35,840 |
192,626 |
18,525,003 | ||||||
Accumulated amortization |
(37) |
(3,086,356) |
(6,099,675) |
- |
(7,097) |
(121,500) |
(9,314,665) |
In the 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 29).
As mentioned in note 11, the subsidiaries CPFL Santa Cruz, CPFL Leste Paulista, CPFL Sul Paulista, CPFL Jaguari and CPFL Mococa made a transfer from concession financial assets to intangible assets in the amount of R$ 537,198, recognized in line item “Extension of concessions – transfer of financial asset”, whose amortization for the period from July to December 2015 was R$ 27,939.
In accordance with IAS 23 / CPC 20 (R1), the interest on borrowings taken by subsidiaries is capitalized for qualifying intangible assets. In the financial statements, in 2015, R$ 11,358 was capitalized (R$ 8,044 in 2014) at a rate of 7.53% p.a. (7.50% p.a. in 2014).
15.1Intangible 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:
87
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated |
|||||||||||
December 31, 2015 |
December 31, 2014 |
Annual amortization rate | |||||||||
Historical cost |
Accumulated amortization |
Net value |
Net value |
2015 |
2014 | ||||||
Intangible asset - acquired in business combinations |
|||||||||||
Intangible asset acquired, not merged |
|||||||||||
Parent company |
|||||||||||
CPFL Paulista |
304,861 |
(187,033) |
117,829 |
132,397 |
4.78% |
5.10% | |||||
CPFL Piratininga |
39,065 |
(22,451) |
16,614 |
18,371 |
4.50% |
4.66% | |||||
RGE |
3,150 |
(1,560) |
1,590 |
1,764 |
5.51% |
5.70% | |||||
CPFL Geração |
54,555 |
(31,798) |
22,757 |
25,509 |
5.04% |
4.88% | |||||
CPFL Santa Cruz |
9 |
(9) |
- |
1 |
15.86% |
16.22% | |||||
CPFL Leste Paulista |
3,333 |
(3,333) |
- |
513 |
15.38% |
17.36% | |||||
CPFL Sul Paulista |
7,288 |
(7,288) |
- |
1,156 |
15.86% |
17.53% | |||||
CPFL Jaguari |
5,213 |
(5,213) |
- |
713 |
13.68% |
19.13% | |||||
CPFL Mococa |
9,110 |
(9,110) |
- |
1,041 |
11.42% |
17.53% | |||||
CPFL Jaguari Geração |
7,896 |
(3,312) |
4,584 |
5,086 |
6.36% |
6.71% | |||||
434,480 |
(271,107) |
163,373 |
186,550 |
||||||||
Subsidiaries |
|||||||||||
CPFL Renováveis |
3,764,809 |
(569,594) |
3,195,215 |
3,352,524 |
5.44% |
4.11% | |||||
Other |
15,096 |
(14,580) |
516 |
921 |
|||||||
3,779,905 |
(584,174) |
3,195,731 |
3,353,444 |
||||||||
Subtotal |
4,214,385 |
(855,281) |
3,359,104 |
3,539,995 |
|||||||
Intangible asset acquired and merged – Deductible |
|||||||||||
Subsidiaries |
|||||||||||
RGE |
1,120,266 |
(838,715) |
281,551 |
301,564 |
1.79% |
1.75% | |||||
CPFL Geração |
426,450 |
(303,531) |
122,919 |
139,103 |
3.80% |
3.89% | |||||
Subtotal |
1,546,716 |
(1,142,246) |
404,470 |
440,667 |
|||||||
Intangible asset acquired and merged – Reassessed |
|||||||||||
Parent company |
|||||||||||
CPFL Paulista |
1,074,026 |
(690,257) |
383,770 |
430,386 |
4.34% |
4.61% | |||||
CPFL Piratininga |
115,762 |
(66,530) |
49,232 |
54,439 |
4.50% |
4.66% | |||||
RGE |
310,128 |
(158,975) |
151,153 |
167,640 |
5.32% |
5.50% | |||||
CPFL Santa Cruz |
61,685 |
(61,685) |
- |
6,054 |
9.81% |
10.03% | |||||
CPFL Leste Paulista |
27,034 |
(27,034) |
- |
2,709 |
10.02% |
14.45% | |||||
CPFL Sul Paulista |
38,168 |
(38,168) |
- |
4,184 |
10.96% |
14.35% | |||||
CPFL Mococa |
15,124 |
(15,124) |
- |
1,266 |
8.37% |
14.05% | |||||
CPFL Jaguari |
23,600 |
(23,600) |
- |
2,195 |
9.30% |
15.33% | |||||
CPFL Jaguari Geração |
15,275 |
(7,457) |
7,818 |
8,675 |
5.61% |
5.91% | |||||
Subtotal |
1,680,801 |
(1,088,829) |
591,972 |
677,548 |
|||||||
Total |
7,441,902 |
(3,086,356) |
4,355,546 |
4,658,210 |
The intangible asset acquired in business combinations is associated to the right to operate the concessions and comprises:
- Intangible asset acquired, not merged
Refers basically to the intangible asset from acquisition of the shares held by noncontrolling interests prior to adoption of CPC 15 and IFRS 3.
- Intangible asset acquired and merged - Deductible
Refers to the intangible asset from the acquisition of subsidiaries that were merged into the respective equity, without application of CVM Instructions No. 319/1999 and No. 349/2001, that is, without segregation of the amount of the tax benefit.
- Intangible asset acquired and merged – Reassessed
In order to comply with ANEEL requirements and avoid the amortization of the intangible asset resulting from the merger of parent company causing a negative impact on dividends paid to noncontrolling interests, the subsidiaries applied the concepts of CVM Instructions No. 319/1999 and No. 349/2001 to the intangible asset. A reserve was therefore recognized to adjust the intangible, against a special goodwill reserve on the merger of equity in each subsidiary, so that the effect of the transaction on the equity reflects the tax benefit of the merged intangible asset. These changes affected the Company's investment in subsidiaries, and in order to adjust this, a non-deductible intangible asset was recognized for tax purposes.
For the balances relating to the subsidiary CPFL Renováveis, the amortization is recognized for the remaining period of the respective operation authorizations, using the straight-line method. For the other
88
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
15.2Impairment test
For all the reporting years, the Company assesses whether there are indicators of impairment of its assets that would require an impairment test. The assessment was based on external and internal information sources, taking into account fluctuations in interest rates, changes in market conditions and other factors.
As the deterioration of the Brazilian economy has intensified, at December 31, 2015, an impairment loss of R$ 5,844 was recognized, related to the assessment of the recoverable amount of the cash-generating units of subsidiaries CPFL Telecom (R$ 1,835) and CPFL Total (R$ 4,009). Such loss was recognized in the statement of profit or loss in line item “Other operating expenses” (note 29).
Such provision for impairment was based on the assessment of these cash-generating units formed by the intangible assets of subsidiaries CPFL Telecom and CPFL Total, which, separately, do not feature an operating segment and are allocated to the operating segments of Others and Services, respectively (note 31). Additionally, during 2015 the Company did not change the form of aggregation of the assets for identification of these cash-generating units.
For fair value measurement the cost approach was used, this is a valuation technique that reflects the amount that would be currently required to replace the service capacity of an asset (normally referred to as cost of substitution or replacement). The recognition of the provision for impairment of assets was due to the unfavorable scenario for the businesses of these subsidiaries and was calculated based on their fair values net of selling expenses.
( 16 ) TRADE PAYABLES
Consolidated | |||
December 31, 2015 |
December 31, 2014 | ||
Current |
|||
System service charges |
203,961 |
- | |
Energy purchased |
2,402,823 |
1,895,742 | |
Electricity network usage charges |
106,940 |
125,860 | |
Materials and services |
331,809 |
250,416 | |
Free energy |
115,676 |
102,129 | |
Total |
3,161,210 |
2,374,147 | |
Noncurrent |
|||
Materials and services |
633 |
633 |
89
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
( 17 ) INTEREST ON DEBTS AND BORROWINGS
Consolidated | ||||||||||||||||
December 31, 2015 |
December 31, 2014 | |||||||||||||||
Interest - Current and Noncurrent |
Principal |
|
Total |
Interest - Current and Noncurrent |
Principal |
|
Total | |||||||||
Current |
Noncurrent |
Current |
Noncurrent |
|||||||||||||
Measured at cost |
||||||||||||||||
Local currency |
||||||||||||||||
Investment |
17,775 |
693,058 |
4,970,715 |
5,681,549 |
10,430 |
617,951 |
4,734,696 |
5,363,077 | ||||||||
Rental assets |
17 |
687 |
3,434 |
4,138 |
14 |
631 |
3,649 |
4,294 | ||||||||
Financial Institutions |
179,656 |
382,411 |
1,350,746 |
1,912,812 |
128,920 |
241,552 |
1,395,644 |
1,766,116 | ||||||||
Others |
764 |
134,960 |
10,002 |
145,726 |
709 |
108,918 |
14,223 |
123,851 | ||||||||
Total at Cost |
198,212 |
1,211,115 |
6,334,897 |
7,744,225 |
140,074 |
969,053 |
6,148,211 |
7,257,338 | ||||||||
Measured at fair value |
||||||||||||||||
Foreign currency |
||||||||||||||||
Financial Institutions |
40,714 |
1,651,199 |
5,560,517 |
7,252,430 |
18,168 |
125,511 |
3,353,468 |
3,497,147 | ||||||||
Mark to Market |
- |
(29,269) |
(282,980) |
(312,249) |
- |
155 |
(56,153) |
(55,998) | ||||||||
Total at fair value |
40,714 |
1,621,930 |
5,277,536 |
6,940,180 |
18,168 |
125,667 |
3,297,315 |
3,441,149 | ||||||||
Borrowing costs |
- |
(1,391) |
(20,227) |
(21,618) |
- |
(1,219) |
(18,891) |
(20,110) | ||||||||
Total |
238,926 |
2,831,654 |
11,592,206 |
14,662,787 |
158,241 |
1,093,500 |
9,426,634 |
10,678,376 |
90
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated |
||||||||||
Measured at amortized cost |
December 31, 2015 |
December 31, 2014 |
Annual interest |
Amortization |
Collateral | |||||
Local currency |
||||||||||
Investment |
||||||||||
CPFL Paulista |
||||||||||
FINEM V |
70,293 |
103,617 |
TJLP + 2.12% to 3.3% (c) |
72 monthly installments from February 2012 |
CPFL Energia guarantee and receivables | |||||
FINEM V |
5,384 |
7,130 |
Fixed rate 8% (c) |
90 monthly installments from August 2011 |
CPFL Energia guarantee and receivables | |||||
FINEM V |
38,386 |
45,937 |
Fixed rate 5.5% (b) |
96 monthly installments from February 2013 |
CPFL Energia guarantee and receivables | |||||
FINEM VI |
197,145 |
245,445 |
TJLP + 2.06% to 3.08% (e) (f) |
72 monthly installments from January 2014 |
CPFL Energia guarantee and receivables | |||||
FINEM VI |
10,412 |
11,917 |
Fixed rate 2.5% (a) |
114 monthly installments from June 2013 |
CPFL Energia guarantee and receivables | |||||
FINEM VI |
191,022 |
218,640 |
Fixed rate 2.5% (a) |
96 monthly installments from December 2014 |
CPFL Energia guarantee and receivables | |||||
FINEM VII |
63,777 |
- |
Fixed rate 6% (b) |
96 monthly installments from April 2016 |
CPFL Energia guarantee and receivables | |||||
FINEM VII |
65,304 |
- |
SELIC + 2.62% to 2.66% (h) |
72 monthly installments from April 2016 |
CPFL Energia guarantee and receivables | |||||
FINEM VII |
130,774 |
- |
TJLP + 2.12% to 2.66% (c) (d) |
72 monthly installments from April 2016 |
CPFL Energia guarantee and receivables | |||||
FINAME |
33,808 |
42,260 |
Fixed rate 4.5% |
96 monthly installments from January 2012 |
CPFL Energia guarantee | |||||
CPFL Piratininga |
|
|||||||||
FINEM IV |
37,859 |
55,807 |
TJLP + 2.12% to 3.3% (c) |
72 monthly installments from February 2012 |
CPFL Energia guarantee and receivables | |||||
FINEM IV |
1,736 |
2,299 |
Fixed rate 8% (c) |
90 monthly installments from August 2011 |
CPFL Energia guarantee and receivables | |||||
FINEM IV |
19,962 |
23,889 |
Fixed rate 5.5% (b) |
96 monthly installments from February 2013 |
CPFL Energia guarantee and receivables | |||||
FINEM V |
57,621 |
71,737 |
TJLP + 2.06% to 3.08% (e) (f) |
72 monthly installments from January 2014 |
CPFL Energia guarantee and receivables | |||||
FINEM V |
2,735 |
3,130 |
Fixed rate 2.5% (a) |
114 monthly installments from June 2013 |
CPFL Energia guarantee and receivables | |||||
FINEM V |
47,536 |
54,409 |
Fixed rate 2.5% (a) |
96 monthly installments from December 2014 |
CPFL Energia guarantee and receivables | |||||
FINEM VI |
39,605 |
- |
SELIC + 2.62% to 2.66% (h) |
72 monthly installments from April 2016 |
CPFL Energia guarantee and receivables | |||||
FINEM VI |
69,054 |
- |
TJLP + 2.12% to 2.66% (c) (d) |
72 monthly installments from April 2016 |
CPFL Energia guarantee and receivables | |||||
FINEM VI |
30,463 |
- |
Fixed rate 6% (b) |
96 monthly installments from April 2016 |
CPFL Energia guarantee and receivables | |||||
FINAME |
16,031 |
20,039 |
Fixed rate 4.5% |
96 monthly installments from January 2012 |
CPFL Energia guarantee | |||||
RGE |
|
|||||||||
FINEM V |
42,549 |
62,721 |
TJLP + 2.12% to 3.3% (c) |
72 monthly installments from February 2012 |
CPFL Energia guarantee and receivables | |||||
FINEM V |
14,725 |
17,622 |
Fixed rate 5.5% (b) |
96 monthly installments from February 2013 |
CPFL Energia guarantee and receivables | |||||
FINEM VI |
105,322 |
131,125 |
TJLP + 2.06% to 3.08% (e) (f) |
72 monthly installments from January 2014 |
CPFL Energia guarantee and receivables | |||||
FINEM VI |
1,102 |
1,261 |
Fixed rate 2.5% (a) |
114 monthly installments from June 2013 |
CPFL Energia guarantee and receivables | |||||
FINEM VI |
70,240 |
80,396 |
Fixed rate 2.5% (a) |
96 monthly installments from December 2014 |
CPFL Energia guarantee and receivables | |||||
FINEM VII |
43,522 |
- |
Fixed rate 6% (b) |
96 monthly installments from April 2016 |
CPFL Energia guarantee and receivables | |||||
FINEM VII |
59,348 |
- |
SELIC + 2.62% to 2.66% (h) |
72 monthly installments from April 2016 |
CPFL Energia guarantee and receivables | |||||
FINEM VII |
76,728 |
- |
TJLP + 2.12% to 2.66% (d) |
72 monthly installments from April 2016 |
CPFL Energia guarantee and receivables | |||||
FINAME |
8,045 |
10,056 |
Fixed rate 4.5% |
96 monthly installments from January 2012 |
CPFL Energia guarantee | |||||
FINAME |
227 |
287 |
Fixed rate 10.0% |
90 monthly installments from May 2012 |
Liens on assets | |||||
FINAME |
715 |
- |
Fixed rate 10.0% |
66 monthly installments from October 2015 |
Liens on assets | |||||
CPFL Santa Cruz |
|
|||||||||
Bank credit note - Unibanco |
- |
929 |
TJLP + 2.9% |
54 monthly installments from December 2010 |
CPFL Energia guarantee and receivables | |||||
FINEM |
10,306 |
11,317 |
Fixed rate 6% |
111 monthly installments from April 2015 |
CPFL Energia guarantee | |||||
FINEM |
3,663 |
3,334 |
SELIC + 2.19% |
72 monthly installments from April 2015 |
CPFL Energia guarantee | |||||
FINEM |
7,382 |
7,596 |
TJLP + 2.19% |
72 monthly installments from April 2015 |
CPFL Energia guarantee | |||||
CPFL Leste Paulista |
|
|||||||||
Bank credit note - Unibanco |
- |
1,286 |
TJLP + 2.9% |
54 monthly installments from June 2011 |
CPFL Energia guarantee and receivables | |||||
FINEM |
3,850 |
2,904 |
Fixed rate 6% |
111 monthly installments from April 2015 |
CPFL Energia guarantee | |||||
FINEM |
1,343 |
1,179 |
SELIC + 2.19% |
72 monthly installments from April 2015 |
CPFL Energia guarantee | |||||
FINEM |
2,709 |
2,685 |
TJLP + 2.19% |
72 monthly installments from April 2015 |
CPFL Energia guarantee | |||||
CPFL Sul Paulista |
|
|||||||||
Bank credit note - Unibanco |
- |
1,393 |
TJLP + 2.9% |
54 monthly installments from June 2011 |
CPFL Energia guarantee and receivables | |||||
FINEM |
2,734 |
1,968 |
Fixed rate 6% |
111 monthly installments from April 2015 |
CPFL Energia guarantee | |||||
FINEM |
1,876 |
1,553 |
SELIC + 2.19% |
72 monthly installments from April 2015 |
CPFL Energia guarantee | |||||
FINEM |
3,803 |
3,545 |
TJLP + 2.19% |
72 monthly installments from April 2015 |
CPFL Energia guarantee | |||||
CPFL Jaguari |
|
|||||||||
Bank credit note - Unibanco |
- |
455 |
TJLP + 2.9% |
54 monthly installments from December 2010 |
CPFL Energia guarantee and receivables | |||||
Bank credit note - Santander |
1,710 |
1,968 |
TJLP + 3.1% |
96 monthly installments from June 2014 |
CPFL Energia guarantee | |||||
Bank credit note - Santander |
808 |
635 |
UMBNDES + 2.1% |
96 monthly installments from June 2014 |
CPFL Energia guarantee | |||||
FINEM |
2,745 |
2,775 |
Fixed rate 6% |
111 monthly installments from April 2015 |
CPFL Energia guarantee | |||||
FINEM |
1,394 |
1,104 |
SELIC + 2.19% |
72 monthly installments from April 2015 |
CPFL Energia guarantee | |||||
FINEM |
2,826 |
2,516 |
TJLP + 2.19% |
72 monthly installments from April 2015 |
CPFL Energia guarantee | |||||
CPFL Mococa |
|
|||||||||
Bank credit note - Unibanco |
- |
608 |
TJLP + 2.9% |
54 monthly installments from January 2011 |
CPFL Energia guarantee and receivables | |||||
Bank credit note - Santander |
2,200 |
2,532 |
TJLP + 3.1% |
96 monthly installments from June 2014 |
CPFL Energia guarantee | |||||
Bank credit note - Santander |
1,039 |
817 |
UMBNDES + 2.1% |
96 monthly installments from June 2014 |
CPFL Energia guarantee | |||||
Bank credit note - Santander |
1,932 |
1,250 |
UMBNDES +1.99% |
96 monthly installments from October 2015 |
CPFL Energia guarantee | |||||
Bank credit note - Santander |
4,619 |
4,335 |
TJLP + 2.99% (f) |
96 monthly installments from October 2015 |
CPFL Energia guarantee | |||||
CPFL Serviços |
|
|||||||||
FINAME |
1,509 |
1,675 |
Fixed rate 2.5% to 5.5% |
96 monthly installments from August 2014 |
CPFL Energia guarantee and liens on equipment | |||||
FINAME |
357 |
357 |
Fixed rate 6% |
72 monthly installments from April 2016 |
CPFL Energia guarantee and liens on equipment | |||||
FINAME |
864 |
1,272 |
Fixed rate 7.7% to 10% |
90 monthly installments from November 2012 |
CPFL Energia guarantee and liens on equipment | |||||
FINAME |
13,049 |
14,806 |
Fixed rate 2.5% to 5.5% |
114 monthly installments from February 2013 |
CPFL Energia guarantee and liens on equipment | |||||
FINAME |
60 |
74 |
TJLP + 4.2% |
90 monthly installments from November 2012 |
CPFL Energia guarantee and liens on equipment | |||||
FINAME |
2,659 |
2,860 |
Fixed rate 6% |
90 monthly installments from October 2014 |
CPFL Energia guarantee and liens on equipment | |||||
FINAME |
108 |
108 |
Fixed rate 6% |
96 monthly installments from June 2016 |
CPFL Energia guarantee and liens on equipment | |||||
FINAME |
6,496 |
6,909 |
Fixed rate 6% |
114 monthly installments from June 2015 |
CPFL Energia guarantee and liens on equipment | |||||
FINAME |
1,002 |
- |
TJLP + 2.2% to 3.2% (c) |
56 monthly installments from July 2015 |
CPFL Energia guarantee and liens on equipment | |||||
FINAME |
4,006 |
- |
Fixed rate 9.5% to 10% (c) |
66 monthly installments from October 2015 |
CPFL Energia guarantee and liens on equipment | |||||
CERAN |
|
|||||||||
BNDES |
312,150 |
360,217 |
TJLP + 3.69% to 5% |
168 monthly installments from December 2005 |
Pledge of shares, credit and concession rights, revenues and CPFL Energia guarantee | |||||
BNDES |
68,993 |
54,604 |
UMBNDES + 5% (1) |
168 monthly installments from February 2006 |
Pledge of shares, credit and concession rights, revenues and CPFL Energia guarantee | |||||
CPFL Transmissão |
|
|||||||||
FINAME |
19,466 |
17,736 |
Fixed rate 3.0% |
96 monthly installments from July 2015 |
CPFL Energia guarantee | |||||
CPFL Telecom |
|
|||||||||
FINAME |
7,610 |
7,588 |
Fixed rate 6.0% (b) |
60 monthly installments from December 2016 |
CPFL Energia guarantee | |||||
FINEM |
7,018 |
6,187 |
SELIC + 3.12% (h) |
60 monthly installments from December 2016 |
CPFL Energia guarantee | |||||
FINEM |
21,544 |
21,349 |
TJLP + 2.12% to 3.12% (c) |
60 monthly installments from December 2016 |
CPFL Energia guarantee |
91
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
CPFL Renováveis |
|
|||||||||
FINEM I |
290,445 |
321,088 |
TJLP + 1.95% |
168 monthly installments from October 2009 |
PCH Holding a joint and several debtor, letters of guarantee | |||||
FINEM II |
25,308 |
28,605 |
TJLP + 1.90%. |
144 monthly installments from June 2011 |
CPFL Energia guarantee, liens on assets and assignment of credit rights | |||||
FINEM III |
528,528 |
565,890 |
TJLP + 1.72% |
192 monthly installments from May 2013 |
CPFL Energia guarantee, pledge of shares, liens on assets, assignment of credit rights | |||||
FINEM V |
90,678 |
101,723 |
TJLP + 2.8% to 3.4% |
143 monthly installments from December 2011 |
PCH Holding 2 and CPFL Renováveis as joint and several debtors. | |||||
FINEM VI |
79,457 |
84,176 |
TJLP + 2.05% |
192 monthly installments from October 2013 |
Pledge of CPFL Renováveis shares, assignment of receivables | |||||
FINEM VII |
156,737 |
176,252 |
TJLP + 1.92 % |
156 monthly installments from October 2010 |
Pledge of shares, assignment of rights, liens on machinery and equipment | |||||
FINEM IX |
32,289 |
39,581 |
TJLP + 2.15% |
120 monthly installments from May 2010 |
Pledge of shares of subsidiary and liens on machinery and equipment | |||||
FINEM X |
528 |
827 |
TJLP |
84 monthly installments from October 2010 |
Pledge of shares, assignment of rights, liens on machinery and equipment | |||||
FINEM XI |
115,676 |
126,670 |
TJLP + 1.87% to 1.9% |
168 monthly installments from January 2012 |
CPFL Energia guarantee, pledge of shares, liens on assets, assignment of credit rights | |||||
FINEM XII |
335,894 |
357,620 |
TJLP + 2.18% |
192 monthly installments from July 2014 |
CPFL Energia guarantee, liens on assets, joint assignment of credit rights, pledge of shares | |||||
FINEM XIII |
296,891 |
315,596 |
TJLP + 2.02% to 2.18% |
192 monthly installments from November 2014 |
Pledge of shares and machinery and equipment of SPE , assignment of rights | |||||
FINEM XIV |
11,599 |
19,707 |
TJLP + 3.50% |
120 monthly installments from June 2007 |
Liens on machinery and equipment , assignment of receivables, pledge of grantor rights - ANEEL, pledge of shares | |||||
FINEM XV |
31,227 |
35,392 |
TJLP + 3.44% |
139 monthly installments from September 2011 |
Assignment of receivables, pledge of grantor rights - ANEEL, pledge of shares | |||||
FINEM XVI |
8,500 |
10,581 |
Fixed rate 5.50% |
101 monthly installments from September 2011 |
Assignment of receivables, pledge of grantor rights - ANEEL, pledge of shares | |||||
FINEM XVII |
490,786 |
525,541 |
TJLP + 2.18% |
192 monthly installments from January 2013 |
Liens on machinery and equipment, assignment of receivables, pledge of grantor rights - ANEEL, pledge of shares and reserve account | |||||
FINEM XVIII |
18,481 |
23,200 |
Fixed rate 4.5% |
102 monthly installments from June 2011 |
CPFL Energia guarantee, liens on assets , assignment of credit rights | |||||
FINEM XIX |
31,381 |
33,488 |
TJLP + 2.02% |
192 monthly installments from January 2014 |
CPFL Energia guarantee, liens on assets, joint assignment of credit rights, pledge of shares | |||||
FINEM XX |
52,091 |
59,533 |
Fixed rate 2.5% |
108 monthly installments from January 2014 |
Pledge of CPFL Renováveis shares, | |||||
FINEM XXI |
42,765 |
45,636 |
TJLP + 2.02% |
192 monthly installments from January 2014 |
CPFL Energia guarantee, liens on assets, joint assignment of credit rights, pledge of shares | |||||
FINEM XXII |
45,828 |
52,375 |
Fixed rate 2.5% |
108 monthly installments from January 2014 |
Pledge of CPFL Renováveis shares, | |||||
FINEM XXIII |
2,305 |
2,882 |
Fixed rate 4.5% |
102 monthly installments from June 2011 |
CPFL Energia guarantee, liens on assets , assignment of credit rights | |||||
FINEM XXIV |
136,528 |
163,476 |
Fixed rate 5.5% |
108 monthly installments from January 2012 |
CPFL Energia guarantee, liens on assets, joint assignment of credit rights | |||||
FINEM XXV |
79,010 |
- |
TJLP + 2.18% |
192 monthly installments from June 2015 |
Pledge of shares and grantor rights, liens on assets and assignment of credit rights | |||||
FINEM XXVI |
270,768 |
- |
TJLP + 2.75% |
192 monthly installments from July 2017 |
Pledge of shares and grantor rights, liens on assets and assignment of credit rights | |||||
FINAME IV |
3,327 |
3,773 |
Fixed rate 2.5% |
96 monthly installments from February 2015 |
Pledge of CPFL Renováveis shares, | |||||
FINEP I |
1,890 |
2,382 |
Fixed rate 3.5% |
61 monthly installments from October 2014 |
Bank guarantee | |||||
FINEP II |
10,383 |
10,366 |
TJLP - 1.00% |
85 monthly installments from June 2017 |
Guarantee | |||||
FINEP III |
6,374 |
6,945 |
TJLP + 3.00% |
73 monthly installments from July 2015 |
Guarantee | |||||
BNB I |
108,835 |
117,516 |
Fixed rate 9.5% to 10% |
168 monthly installments from January 2009 |
Liens | |||||
BNB II |
165,324 |
172,430 |
Fixed rate 10% (J) |
222 monthly installments from May 2010 |
CPFL Energia guarantee | |||||
BNB III |
30,837 |
32,591 |
Fixed rate 9.5% |
228 monthly installments from July 2009 |
Guarantee, liens on assets, assignment of credit rights | |||||
NIB |
72,739 |
74,197 |
IGPM + 8.63% |
50 quarterly installments from June 2011 |
No guarantee | |||||
Bridge BNDES IV |
- |
49,492 |
TJLP + 2.40% |
1 installment in January 2016 |
Guarantee | |||||
Banco do Brasil |
31,014 |
36,739 |
Fixed rate 10.00% |
132 monthly installment from June 2010 |
Shareholders support, pledge of shares and grantor rights, assignment of receivables, performance bond, guarantee and civil liability | |||||
|
||||||||||
CPFL Brasil |
|
|||||||||
FINEP |
1,864 |
2,657 |
Fixed rate 5% |
81 monthly installments from August 2011 |
Receivables | |||||
|
||||||||||
Purchase of assets |
|
|||||||||
CPFL ESCO |
|
|||||||||
FINAME |
3,544 |
4,135 |
Fixed rate 4.5% to 8.7% |
96 monthly installments from March 2012 |
CPFL Energia guarantee and liens on equipment | |||||
FINAME |
117 |
158 |
Fixed rate 6% |
72 monthly installments from October 2016 |
CPFL Energia guarantee | |||||
FINAME |
261 |
- |
TJLP + 2.70% |
48 monthly installments from October 2016 |
CPFL Energia guarantee | |||||
FINAME |
216 |
- |
SELIC + 2.70% |
48 monthly installments from October 2016 |
CPFL Energia guarantee | |||||
Financial institutions |
||||||||||
CPFL Energia |
||||||||||
Santander - Working capital |
331,343 |
- |
86.40% of CDI |
1 installment in January 2016 |
No guarantee | |||||
CPFL Paulista |
||||||||||
Banco do Brasil - Working capital |
- |
105,500 |
107% of CDI |
1 installment in April 2015 |
CPFL Energia guarantee | |||||
Banco do Brasil - Working capital |
- |
73,758 |
98.50% of CDI (f) |
4 annual installments from July 2012 |
CPFL Energia guarantee | |||||
Banco do Brasil - Working capital |
331,549 |
291,036 |
104.90% of CDI (f) |
2 annual installments from July 2017 |
CPFL Energia guarantee | |||||
CPFL Piratininga |
||||||||||
Banco do Brasil - Working capital |
- |
6,784 |
98.50% of CDI (f) |
4 annual installments from July 2012 |
CPFL Energia guarantee | |||||
Banco do Brasil - Working capital |
58,353 |
51,222 |
104.90% of CDI (f) |
2 annual installments from July 2017 |
CPFL Energia guarantee | |||||
RGE |
||||||||||
Banco do Brasil - Working capital |
- |
31,894 |
98.50% of CDI (f) |
4 annual installments from July 2012 |
CPFL Energia guarantee | |||||
CPFL Santa Cruz |
||||||||||
Banco do Brasil - Working capital |
43,764 |
38,417 |
104.90% of CDI (f) |
2 annual installments from July 2017 |
CPFL Energia guarantee | |||||
Banco IBM - Working capital |
7,637 |
8,083 |
CDI + 0.27% (f) |
12 semiannual installments from June 2015 |
CPFL Energia guarantee | |||||
CPFL Leste Paulista |
||||||||||
Banco IBM - Working capital |
6,587 |
7,419 |
100.0% of CDI |
14 semiannual installments from December 2012 |
CPFL Energia guarantee | |||||
Banco IBM - Working capital |
23,790 |
25,666 |
CDI + 0.1% |
12 semiannual installments from October 2014 |
CPFL Energia guarantee | |||||
Banco IBM - Working capital |
17,268 |
7,969 |
CDI + 0.27% |
12 semiannual installments from March 2015 |
CPFL Energia guarantee | |||||
Banco IBM - Working capital |
8,052 |
10,307 |
CDI + 1.33 (f) |
12 semiannual installments from June 2015 |
CPFL Energia guarantee | |||||
CPFL Sul Paulista |
||||||||||
Banco do Brasil - Working capital |
27,850 |
24,447 |
104.90% of CDI (f) |
2 annual installments from July 2017 |
CPFL Energia guarantee | |||||
Banco IBM - Working capital |
8,914 |
4,036 |
CDI + 0.27% to 1.33 (f) |
12 semiannual installments from June 2015 |
CPFL Energia guarantee | |||||
CPFL Jaguari |
||||||||||
Banco do Brasil - Working capital |
3,846 |
3,376 |
104.90% of CDI (f) |
2 annual installments from July 2017 |
CPFL Energia guarantee | |||||
Banco IBM - Working capital |
13,266 |
15,064 |
100.0% of CDI |
14 semiannual installments from December 2012 |
CPFL Energia guarantee | |||||
Banco IBM - Working capital |
12,825 |
13,836 |
CDI + 0.1% |
12 semiannual installments from October 2014 |
CPFL Energia guarantee | |||||
CPFL Mococa |
||||||||||
Banco do Brasil - Working capital |
25,198 |
22,119 |
104.90% of CDI (f) |
2 annual installments from July 2017 |
CPFL Energia guarantee | |||||
Banco IBM - Working capital |
4,305 |
4,888 |
100.0% of CDI |
14 semiannual installments from December 2012 |
CPFL Energia guarantee | |||||
Banco IBM - Working capital |
14,663 |
15,519 |
CDI + 0.27% |
12 semiannual installments from March 2015 |
CPFL Energia guarantee | |||||
CPFL Serviços |
||||||||||
Banco IBM - Working capital |
5,111 |
6,316 |
CDI + 0.10% |
11 semiannual installments from June 2013 |
CPFL Energia guarantee | |||||
CPFL Geração |
||||||||||
Banco do Brasil - Working capital |
642,124 |
637,635 |
109.5% of CDI |
1 installment in March 2019 |
CPFL Energia guarantee | |||||
CPFL Renováveis |
||||||||||
HSBC |
290,679 |
322,336 |
CDI + 0.5% (i) |
8 annual installment from June 2013 |
Pledge of shares | |||||
CPFL Telecom |
||||||||||
Banco IBM - Working capital |
35,689 |
38,489 |
CDI + 0.18% |
12 semiannual installments from August 2014 |
CPFL Energia guarantee | |||||
Others |
||||||||||
Eletrobrás |
||||||||||
CPFL Paulista |
3,931 |
5,414 |
RGR + 6% to 6.5% |
monthly installments from August 2006 |
Receivables and promissory notes | |||||
CPFL Piratininga |
88 |
239 |
RGR + 6% |
monthly installments from August 2006 |
Receivables and promissory notes | |||||
RGE |
7,658 |
9,746 |
RGR + 6% |
monthly installments from August 2006 |
Receivables and promissory notes | |||||
CPFL Santa Cruz |
1,029 |
1,601 |
RGR + 6% |
monthly installments from January 2007 |
Receivables and promissory notes | |||||
CPFL Leste Paulista |
532 |
747 |
RGR + 6% |
monthly installments from February 2008 |
Receivables and promissory notes | |||||
CPFL Sul Paulista |
544 |
808 |
RGR + 6% |
monthly installments from August 2007 |
Receivables and promissory notes | |||||
CPFL Jaguari |
24 |
41 |
RGR + 6% |
monthly installments from June 2007 |
Receivables and promissory notes | |||||
CPFL Mococa |
170 |
222 |
RGR + 6% |
monthly installments from January 2008 |
Receivables and promissory notes | |||||
Others |
131,751 |
105,034 |
||||||||
Subtotal local currency - Cost |
7,744,225 |
7,257,338 |
92
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Foreign Currency |
||||||||||
Measured at fair value |
||||||||||
Financial Institutions |
||||||||||
CPFL Energia |
||||||||||
Santander |
293,660 |
- |
US$ + 1.547% (3) |
1 installment in February 2016 |
No guarantee | |||||
Bradesco |
154,665 |
- |
US$ + 1.72% (2) (f) |
1 installment in June 2016 |
No guarantee | |||||
Santander |
197,044 |
- |
US$ + 1.918% (3) |
1 installment in September 2016 |
No guarantee | |||||
CPFL Paulista |
||||||||||
Bank of America Merrill Lynch |
397,324 |
270,248 |
US$ + 3.69 % (3) |
1 installment in July 2016 |
CPFL Energia guarantee and promissory notes | |||||
Bank of America Merrill Lynch |
- |
399,887 |
US$ + Libor 3 months + 1.48% (3) |
1 installment in July 2016 |
CPFL Energia guarantee and promissory notes | |||||
Bank of America Merrill Lynch |
175,750 |
119,561 |
US$+Libor 3 months+1.70% (4) |
1 installment in September 2018 |
CPFL Energia guarantee and promissory notes | |||||
Bank of Tokyo-Mitsubishi |
195,524 |
- |
US$ + Libor 3 months + 0.88% (3) (g) |
1 installment in February 2020 |
CPFL Energia guarantee and promissory notes | |||||
Bank of Tokyo-Mitsubishi |
195,380 |
132,887 |
US$+Libor 3 months+0.80% (3) (f) |
4 semiannual installments from September 2017 |
CPFL Energia guarantee and promissory notes | |||||
BNP Paribas |
85,991 |
- |
Euro + 1.6350% (3) |
1 installment in January 2018 |
CPFL Energia guarantee and promissory notes | |||||
Citibank |
- |
133,585 |
US$ + Libor 6 months + 1.77% (3) |
1 installment in September 2016 |
CPFL Energia guarantee and promissory notes | |||||
Citibank |
195,502 |
132,962 |
US$+Libor 3 months + 1.35% (4) |
1 installment in March 2019 |
CPFL Energia guarantee and promissory notes | |||||
Citibank |
227,397 |
- |
US$ + Libor 3 months + 1.44% (3) |
1 installment in January 2020 |
CPFL Energia guarantee and promissory notes | |||||
HSBC |
338,504 |
- |
US$ + Libor 3 months + 1.30% (3) |
1 installment in January 2018 |
CPFL Energia guarantee and promissory notes | |||||
J.P. Morgan |
156,381 |
106,383 |
US$ + 2.28% to 2.32% (3) |
1 installment in December 2017 |
CPFL Energia guarantee and promissory notes | |||||
J.P. Morgan |
138,255 |
- |
US$ + 2.36% to 2.39% (3) |
1 installment in January 2018 |
CPFL Energia guarantee and promissory notes | |||||
J.P. Morgan |
98,891 |
- |
US$ + 2.74% (3) |
1 installment in January 2019 |
CPFL Energia guarantee and promissory notes | |||||
J.P. Morgan |
59,080 |
- |
US$ + 2.2% (3) |
1 installment in February 2018 |
CPFL Energia guarantee and promissory notes | |||||
Bank of America Merrill Lynch |
587,094 |
- |
US$ + Libor 3 months + 1.40% (3) |
1 installment in February 2018 |
CPFL Energia guarantee and promissory notes | |||||
Mizuho Bank |
292,895 |
199,235 |
US$+Libor 3 months+1.55% (3) (f) |
3 semiannual installments from March 2018 |
CPFL Energia guarantee and promissory notes | |||||
Morgan Stanley |
196,502 |
133,601 |
US$ + Libor 6 months + 1.75% (3) |
1 installment in September 2016 |
CPFL Energia guarantee and promissory notes | |||||
Scotiabank |
95,502 |
64,958 |
US$ + 3.3125% (3) |
1 installment in July 2016 |
CPFL Energia guarantee and promissory notes | |||||
CPFL Piratininga |
||||||||||
Bank of America Merrill Lynch |
48,964 |
- |
US$ + Libor 3 months + 1.15% (3) |
1 installment in July 2016 |
CPFL Energia guarantee and promissory notes | |||||
Bank of America Merrill Lynch |
97,849 |
- |
US$ + Libor 3 months + 1.15% (3) |
1 installment in August 2016 |
CPFL Energia guarantee and promissory notes | |||||
BNP Paribas |
236,474 |
- |
Euro + 1.6350% (3) |
1 installment in January 2018 |
CPFL Energia guarantee and promissory notes | |||||
Citibank |
244,778 |
- |
US$ + Libor 3 months + 1.41% (3) |
2 annual installments from January 2019 |
CPFL Energia guarantee and promissory notes | |||||
Citibank |
- |
21,401 |
US$ + Libor 6 months + 1.69%(3) |
1 installment in August 2016 |
CPFL Energia guarantee and promissory notes | |||||
Citibank |
- |
167,050 |
US$ + Libor 6 months + 1.14% (3) |
1 installment in January 2017 |
CPFL Energia guarantee and promissory notes | |||||
Citibank |
195,502 |
132,962 |
US$ + Libor 3 months + 1.35% (4) |
1 installment in March 2019 |
CPFL Energia guarantee and promissory notes | |||||
Santander |
177,268 |
120,585 |
US$ + 2.58% (3) |
1 installment in July 2016 |
CPFL Energia guarantee and promissory notes | |||||
Scotiabank |
124,737 |
84,843 |
US$ + 3.3125% (3) |
1 installment in July 2016 |
CPFL Energia guarantee and promissory notes | |||||
Scotiabank |
64,980 |
- |
US$ + 2.08% (3) |
1 installment in August 2017 |
CPFL Energia guarantee and promissory notes | |||||
Sumitomo |
195,938 |
133,259 |
US$ + Libor 3 months + 1.35% (3) (f) |
1 installment in April 2018 |
CPFL Energia guarantee and promissory notes | |||||
RGE |
||||||||||
Bank of Tokyo-Mitsubishi |
70,439 |
47,908 |
US$ + Libor 3 months + 0.82%(3) |
1 installment in April 2018 |
CPFL Energia guarantee and promissory notes | |||||
Bank of Tokyo-Mitsubishi |
320,602 |
218,046 |
US$ + Libor 3 months + 0.83%(3) |
1 installment in May 2018 |
CPFL Energia guarantee and promissory notes | |||||
Citibank |
58,683 |
39,912 |
US$ + Libor 3 months + 1.25%(4) |
2 annual installments from May 2018 |
CPFL Energia guarantee and promissory notes | |||||
Citibank |
274,426 |
186,593 |
US$ + Libor 6 months + 1.45% (3) |
1 installment in April 2017 |
CPFL Energia guarantee and promissory notes | |||||
HSBC |
53,260 |
36,223 |
US$ + Libor 3 months + 1.30% (3) |
1 installment in October 2017 |
CPFL Energia guarantee and promissory notes | |||||
J.P. Morgan |
239,453 |
- |
US$ + 2.78% (3) |
1 installment in February 2018 |
CPFL Energia guarantee and promissory notes | |||||
J.P. Morgan |
139,466 |
- |
US$ + 1.35% (3) |
1 installment in February 2016 |
CPFL Energia guarantee and promissory notes | |||||
J.P. Morgan |
- |
126,126 |
US$ + 2.64% (3) |
1 installment in July 2016 |
CPFL Energia guarantee and promissory notes | |||||
CPFL Santa Cruz |
||||||||||
J.P. Morgan |
- |
25,864 |
US$ + 2.38% (3) |
1 installment in July 2015 |
CPFL Energia guarantee and promissory notes | |||||
Santander |
34,679 |
23,590 |
US$ + 2.544% (3) |
1 installment in June 2016 |
CPFL Energia guarantee and promissory notes | |||||
CPFL Leste Paulista |
||||||||||
Scotiabank |
- |
32,926 |
US$ + 2.695% (3) |
1 installment in July 2015 |
CPFL Energia guarantee and promissory notes | |||||
CPFL Sul Paulista |
||||||||||
J.P. Morgan |
- |
13,578 |
US$ + 2.38% (3) |
1 installment in July 2015 |
CPFL Energia guarantee and promissory notes | |||||
Santander |
38,147 |
25,949 |
US$ + 2.544% (3) |
1 installment in June 2016 |
CPFL Energia guarantee and promissory notes | |||||
Scotiabank |
- |
13,829 |
US$ + 2.695% (3) |
1 installment in July 2015 |
CPFL Energia guarantee and promissory notes | |||||
CPFL Jaguari |
||||||||||
Santander |
53,752 |
36,564 |
US$ + 2.544% (3) |
1 installment in June 2016 |
CPFL Energia guarantee and promissory notes | |||||
Scotiabank |
- |
17,122 |
US$ + 2.695% (3) |
1 installment in July 2015 |
CPFL Energia guarantee and promissory notes | |||||
CPFL Mococa |
||||||||||
Scotiabank |
- |
14,488 |
US$ + 2.695% (3) |
1 installment in July 2015 |
CPFL Energia guarantee and promissory notes | |||||
CPFL Geração |
||||||||||
HSBC |
390,757 |
265,779 |
US$+Libor 3 months + 1.30% (3) |
1 installment in March 2017 |
CPFL Energia guarantee and promissory notes | |||||
CPFL Serviços |
||||||||||
J.P. Morgan |
14,760 |
10,040 |
US$ + 1.75% (3) |
1 installment in October 2016 |
CPFL Energia guarantee and promissory notes | |||||
CPFL Telecom |
||||||||||
Banco Itaú |
- |
9,202 |
US$ + 2.35% (3) |
1 installment in November 2015 |
CPFL Energia guarantee and promissory notes | |||||
Paulista Lajeado |
||||||||||
Banco Itaú |
42,862 |
- |
US$ + 3.196% (4) |
1 installment in March 2018 |
CPFL Energia guarantee and promissory notes | |||||
CPFL Brasil |
||||||||||
Scotiabank |
53,317 |
- |
US$ + 2.779% (3) |
1 installment in August 2018 |
CPFL Energia guarantee and promissory notes | |||||
Mark to market |
(312,249) |
(55,998) |
||||||||
Total Foreign Currency - fair value |
6,940,180 |
3,441,149 |
||||||||
Borrowing costs(*) |
(21,618) |
(20,110) |
||||||||
Total - Consolidated |
14,662,787 |
10,678,376 |
||||||||
The subsidiaries hold swaps converting the operating cost of currency variation to interest rate variation in reais. corresponding to : |
||||||||||
(1) 143.85% of CDI |
(3) 99% to 109% of CDI |
|||||||||
(2) 95,2% of CDI |
(4) 109.1% to 119% of CDI |
|||||||||
Effective rate: |
||||||||||
(a) 30% to 40% of CDI |
(e) 80.1% to 90% of CDI |
(i) CDI + 0.73% |
||||||||
(b) 40.1% to 50% of CDI |
(f) 100.1% to 110% of CDI |
(J) Fixed rate 10.57% |
||||||||
(c) 60.1% to 70% of CDI |
(g) 110.1% to 120% of CDI |
|||||||||
(d) 70.1% to 80% of CDI |
(h) 120.1% to 130% of CDI |
(*) In accordance with IAS 39 / CPC 38, this refers to the fundraising costs attributable to issuance of the respective debts.
In conformity with CPC 38 and 39 and IAS 32 and 39, the Company and its subsidiaries classified their debts as (i) other financial liabilities (or measured at amortized cost), and (ii) financial liabilities measured at fair value through profit and loss.
The objective of classification as financial liabilities of borrowings measured at fair value is to compare the effects of recognition of income and expense derived from marking derivatives to market, tied to the borrowings, in order to obtain more relevant and consistent accounting information. At December 31, 2015, the total balance of the borrowings measured at fair value was R$ 6,940,180 (R$ 3,441,149 at December 31, 2014).
Changes in the fair values of these borrowings are recognized in the finance income/cost of the Company and its subsidiaries. Accumulated gains of R$ 312,249 (R$ 55,998 at December 31, 2014) on marking the borrowings to market, less losses of R$ 184,518 (R$25,382 at December 31, 2014) of marking to market the
93
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
The maturities of the principal of borrowings are scheduled as follows:
Maturity |
Consolidated | |
2017 |
1,892,991 | |
2018 |
4,289,564 | |
2019 |
2,284,535 | |
2020 |
1,067,028 | |
2021 |
490,809 | |
2022 to 2026 |
1,326,076 | |
2027 to 2031 |
505,856 | |
2032 to 2036 |
18,328 | |
Subtotal |
11,875,186 | |
Mark to Market |
(282,980) | |
Total |
11,592,206 |
The main indexes used for adjusting borrowings for inflation and the indebtedness profile in local and foreign currency, already considering the effects of the derivative instruments, are as follows:
Accumulated variation |
% of debt | |||||||
Index |
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 | ||||
IGP-M |
10.54 |
3.69 |
0.50 |
0.69 | ||||
UMBND |
47 |
13.27 |
0.49 |
0.53 | ||||
TJLP |
6.21 |
5 |
27.67 |
36.50 | ||||
CDI |
13.18 |
10.81 |
61.60 |
49.26 | ||||
Others |
9.76 |
13.01 | ||||||
100.00 |
100.00 |
Main borrowings in the year:
94
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
|
|
|
|
| ||||||||
R$ thousand | ||||||||||||
Company |
Bank / credit line |
Total approved |
Released in 2015 |
Released net of fundraising costs |
Interest |
Utilization | ||||||
Local currency: |
||||||||||||
Investment: |
||||||||||||
CPFL Paulista |
FINEM VII |
427,716 |
254,119 |
253,161 |
Quarterly |
Subsidiary's investment plan | ||||||
CPFL Piratininga |
FINEM VI |
194,862 |
135,259 |
134,625 |
Quarterly |
Subsidiary's investment plan | ||||||
RGE |
FINEM VII |
266,790 |
174,518 |
173,789 |
Quarterly |
Subsidiary's investment plan | ||||||
CPFL Santa Cruz |
FINEM (a) |
25,360 |
1,264 |
1,264 |
Quarterly |
Subsidiary's investment plan | ||||||
CPFL Leste Paulista |
FINEM (a) |
13,045 |
1,915 |
1,915 |
Quarterly |
Subsidiary's investment plan | ||||||
CPFL Sul Paulista |
FINEM (a) |
12,280 |
2,187 |
2,187 |
Quarterly |
Subsidiary's investment plan | ||||||
CPFL Jaguari |
FINEM (a) |
10,398 |
1,274 |
1,274 |
Quarterly |
Subsidiary's investment plan | ||||||
CPFL Mococa |
Bank credit note - Santander (a) |
6,119 |
516 |
516 |
Quarterly |
Subsidiary's investment plan | ||||||
RGE |
FINAME (a) |
746 |
746 |
746 |
Quarterly |
Subsidiary's investment plan | ||||||
CPFL Serviços |
FINAME (a) |
6,011 |
5,144 |
5,144 |
Quarterly |
Purchase of vehicles and equipment | ||||||
CPFL Transmissão Piracicaba |
FINAME (a) |
23,824 |
3,020 |
3,020 |
Quarterly |
Purchase of vehicles and equipment | ||||||
CPFL ESCO |
FINAME (a) |
461 |
461 |
461 |
Quarterly |
Acquisition of electrical equipment and vehicles | ||||||
CPFL Renováveis |
FINEM XXV |
84,338 |
75,732 |
75,732 |
Monthly |
Subsidiary's investment plan | ||||||
CPFL Renováveis |
FINEM XXVI |
764,109 |
270,642 |
268,117 |
Monthly |
Subsidiary's investment plan | ||||||
Financial institutions: |
||||||||||||
CPFL Energia |
Working capital - Bank credit note - Santander (a) |
300,000 |
300,000 |
294,383 |
With the principal |
Working capital improvement | ||||||
CPFL Leste Paulista |
Working capital - Bank credit note - Banco IBM (a) |
7,563 |
7,563 |
7,563 |
Semiannual |
Working capital improvement | ||||||
CPFL Sul Paulista |
Working capital - Bank credit note - Banco do Brasil (a) |
4,791 |
4,791 |
4,791 |
Semiannual |
Working capital improvement | ||||||
CPFL Renováveis |
Votorantim - Promissory notes (a) |
50,000 |
50,000 |
50,000 |
With the principal |
Subsidiary's investment plan (SHPs) | ||||||
2,197,667 |
1,288,405 |
1,277,941 |
||||||||||
Foreign currency: |
||||||||||||
Financial institutions: |
||||||||||||
CPFL Energia |
Bank credit notes - Banco Santander (a) |
200,000 |
200,000 |
200,000 |
With the principal |
Extend the debt profile | ||||||
CPFL Energia |
FRN - Banco Santander (a) |
187,750 |
187,750 |
187,750 |
With the principal |
Working capital improvement | ||||||
CPFL Energia |
Working capital - Law 4131 - Bradesco (a) |
149,208 |
149,208 |
147,865 |
With the principal |
Working capital improvement | ||||||
CPFL Paulista |
Working capital - Law 4131 - Bank of Tokyo-Mitsubishi |
142,735 |
142,735 |
141,308 |
Quarterly |
Working capital improvement | ||||||
CPFL Paulista |
Working capital - Law 4131 - BNP Paribas |
63,896 |
63,896 |
63,896 |
Semiannual |
Working capital improvement | ||||||
CPFL Paulista |
Working capital - Law 4131 - Citibank |
156,600 |
156,600 |
156,600 |
Quarterly |
Working capital improvement | ||||||
CPFL Paulista |
Working capital - Law 4131 - HSBC Bank |
227,673 |
227,673 |
227,673 |
Quarterly |
Working capital improvement | ||||||
CPFL Paulista |
Working capital - Law 4131 - JP Morgan |
203,771 |
203,771 |
203,771 |
Semiannual |
Working capital improvement | ||||||
CPFL Paulista |
Working capital - Law 4131 - Bank of America Merrill Lynch |
405,300 |
405,300 |
405,300 |
Quarterly |
Working capital improvement | ||||||
CPFL Piratininga |
Working capital - Law 4131 - BNP Paribas |
175,714 |
175,714 |
175,714 |
Semiannual |
Working capital improvement | ||||||
CPFL Piratininga |
Working capital - Law 4131 - Citibank |
169,837 |
169,837 |
Quarterly |
Working capital improvement | |||||||
169,837 | ||||||||||||
CPFL Piratininga |
Working capital - Law 4131 - Scotiabank |
55,440 |
55,440 |
55,440 |
Semiannual |
Working capital improvement | ||||||
CPFL Piratininga |
Working capital - Law 4131 - Bank of America Merrill Lynch (a) |
124,250 |
124,250 |
124,250 |
Quarterly |
Working capital improvement | ||||||
RGE |
Working capital - Law 4131 - JP Morgan |
171,949 |
171,949 |
171,949 |
Semiannual |
Working capital improvement | ||||||
RGE |
Working capital - Law 4131 - JP Morgan (a) |
100,000 |
100,000 |
100,000 |
Semiannual |
Working capital improvement | ||||||
CPFL Brasil |
Working capital - Law 4131 - Scotiabank |
45,360 |
45,360 |
45,360 |
Semiannual |
Working capital improvement | ||||||
Paulista Lajeado |
Bank credit notes - Banco Itaú (a) |
35,000 |
35,000 |
35,000 |
Semiannual |
Working capital improvement | ||||||
2,614,482 |
2,614,482 |
2,611,712 |
||||||||||
4,812,149 |
3,902,887 |
3,889,653 |
(a) the agreement has no restrictive covenants
Restrictive covenants
BNDES:
95
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Borrowings from the BNDES restrict the subsidiaries CPFL Paulista, CPFL Piratininga, RGE, CERAN and CPFL Telecom to: (i) not paying dividends and interest on capital totaling more than the minimum mandatory dividend laid down by law without after fulfillment of all contractual obligations; (ii) full compliance with the restrictive conditions established in the agreement; and (iii) maintaining certain financial ratios within pre-established parameters, calculated annually:
CPFL Paulista, CPFL Piratininga and RGE
Maintaining, by these subsidiaries, the following ratios:
· Net indebtedness divided by EBITDA – maximum of 3.5;
· Net indebtedness divided by the sum of net indebtedness and Equity – maximum of 0.90.
CPFL Geração
The borrowings from the BNDES raised by the indirect subsidiary CERAN establish:
· Maintaining the debt service coverage ratio at 1.3 during the amortization period;
· Restrictions on the payment of dividends to the subsidiary CPFL Geração above the minimum mandatory dividend of 25% without the prior approval of the BNDES.
CPFL Telecom
Maintaining, by the Company, the following ratios:
· Equity / (Equity + Net Bank Debt) of more than 0.28;
· Net Bank Debt / Adjusted EBITDA of less than 3.75.
CPFL Renováveis (calculated in indirect subsidiary CPFL Renováveis and its subsidiaries, except when mentioned in each specific item):
FINEM I and FINEM VI
· Maintaining the debt service coverage ratio “ICSD” (cash balance for the prior year + cash generation for the current year) / debt service charge for the current year) at 1.2;
· Own capitalization ratio of 25% or more.
In December 2015 and 2014, the subsidiary obtained a waiver from the BNDES for determination of the ICSD for FINEM VI the year ended December 31, 2015 and 2014.
FINEM II and FINEM XVIII
· Restrictions on the payments of dividends if a debt service coverage ratio of 1.0 or more and a general indebtedness ratio of 0.8 or less are not achieved.
FINEM III
· Maintaining Equity/(Equity + Net Bank Debt) ratio of more than 0.28, determined in the Company's annual consolidated financial statements;
· Maintaining a Net Bank Debt/EBITDA ratio of 3.75 or less, determined in the Company's annual consolidated financial statements.
FINEM V
· Maintaining the debt service coverage ratio at 1.2;
· Maintaining the own capitalization ratio at 30% or more.
In December 2014, the subsidiary obtained a waiver from Banco do Brasil for determination of the ICSD for the year ended December 31, 2014.
FINEM VII, FINEM X and FINEM XXIII
· Maintaining the annual debt service coverage ratio at 1.2;
· Distribution of dividends limited to the Total Liabilities/ ex-Dividend Equity ratio of less than 2.33.
96
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
FINEM IX, FINEM XIII and FINEM XXV
· Maintaining the Debt Service Coverage Ratio at 1.3 or more.
FINEM XXVI
· Maintaining the Debt Service Coverage Ratio of the SPEs. at 1.3 or more after amortization starts;
· Maintaining the consolidated Debt Service Coverage Ratio at 1.3, or more, determined in the annual consolidated financial statements of the subsidiary Turbina 16 (“T-16”), after amortization starts.
FINEM XI and FINEM XXIV
· Maintaining a Net Bank Debt/EBITDA ratio of 3.75 or less, determined in the Company's annual consolidated financial statements.
FINEM XII
· Maintaining the Debt Service Coverage Ratio of the indirect subsidiaries Campo dos Ventos II Energias Renováveis S.A., SPE Macacos Energia S.A., SPE Costa Branca Energia S.A., SPE Juremas Energia S.A. and SPE Pedra Preta Energia S.A. at 1.3 or more after amortization starts;
· Maintaining the Consolidated Debt Service Coverage Ratio at 1.3 or more, determined in the consolidated financial statements of Eólica Holding S.A., after amortization starts.
FINEM XIV
· Maintaining the half-yearly equity ratio (ICP), defined by Equity/Total Assets ratio, at 30% or more of the project’s total investment, and a debt service coverage ratio at 1.3 or more during the amortization period;
In June of 2015, the Company obtained from the Brazilian Development Bank (BNDES) waiver of its obligation to calculate the two ratios above in relation to the half ended June 30, 2015.
FINEM XV and FINEM XVI
· Maintaining the quarterly equity ratio (ICP) at 25% or more, defined by the ratio of Equity to Total Assets;
· Maintaining the quarterly debt service coverage ratio at 1.2 or more during the amortization period.
FINEM XVII
· Maintaining the debt service coverage ratio at 1.2 or more during the amortization period;
· Maintaining the annual consolidated debt service coverage ratio at 1.3 or more, determined in the consolidated financial statements of Desa Eólicas S.A.
FINEM XIX, FINEM XX, FINEM XXI and FINEM XXII
· Maintenance of Debt Service Coverage Ratio of 1.2 or more during the effective period of the agreement;
· Maintenance of Net Debt/EBITDA ratio of 6.0 or less in 2014, 5.6 in 2015, 4.6 in 2016 and 3.75 in 2017 and thereafter, determined in the consolidated financial statements of CPFL Renováveis during the effective period of the agreement;
· Maintenance of an Equity/(Equity + Net Debt) ratio of 0.41 or more from 2014 to 2016 and 0.45 in 2017 and thereafter, determined in the consolidated financial statements of CPFL Renováveis, during the effective period of the agreement.
In December 2014, the Company obtained a waiver from the BNDES for calculation of the ICSD and the Net Debt/EBITDA ratio, fulfillment mandatory for the parent company for the year ended December 31, 2014.
In December 2015, the Company obtained waiver from the BNDES involving the latter’s concurrence with non-fulfillment of the ICSD without acceleration of maturity of the debt being declared in relation to the year ended December 31, 2015.
HSBC
97
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
· From 2014, there is the obligation to maintain the Net Debt/ EBITDA ratio of less than 4.50 in June 2014, 4.25 in December 2014, 4.0 in June 2015 and 3.50 in the other half yearly periods until settlement.
NIB
· Maintaining the half-yearly debt service coverage ratio at 1.2;
· Maintaining an indebtedness ratio of 70% or less;
· Maintaining the Financing Term Coverage ratio at 1.7 or more.
Banco do Brasil
· Maintaining the annual debt service coverage ratio at 1.2 or more during the amortization period.
Foreign currency borrowings - Bank of America Merrill Lynch (except for CPFL Piratininga), J.P Morgan (except for RGE*), Citibank, Morgan Stanley, Scotiabank, Bank of Tokyo Mitsubishi, Santander (except for CPFL Energia), Sumitomo, Mizuho, HSBC and BNP Paribas (Law 4,131)
The foreign currency borrowings taken under Law 4,131 are subject to certain restrictive covenants, and include clauses that require the Company to maintain certain financial ratios within pre-established parameters, calculated semiannually.
The ratios required are as follows: (i) Net indebtedness divided by EBITDA – maximum of 3.75 and (ii) EBITDA divided by Finance Income (Costs) – minimum of 2.25.
(*) Loan with balance of R$ 139,466 as at December 31, 2015 and falling due on February 22, 2016.
For purposes of determining covenants, the definition of EBITDA for the Company takes into consideration mainly the consolidation of subsidiaries, associates and joint ventures based on the direct or indirect Company’s interest in those companies (for both EBITDA and assets and liabilities).
Various borrowings of the direct and indirect subsidiaries are subject to acceleration of maturities in the event of changes in the Company’s ownership structure or in the ownership structure of the subsidiaries that result in the loss of the share control or of control over management of the Company by the Company’s current shareholders, unless at least one of the shareholders (Camargo Corrêa and Previ) remains directly or indirectly in the control block.
Furthermore, failure to comply with the obligations or restrictions mentioned can result in default in relation to other contractual obligations (cross default), depending on each borrowing agreement.
The Management of the Company and its subsidiaries monitor these ratios systematically and constantly to ensure that the contractual conditions are complied with. In Management’s opinion, all restrictive covenants and clauses are adequately complied with at December 31, 2015.
98
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
( 18 ) DEBENTURES AND INTERESTS ON DEBENTURES
Consolidated | |||||||||||||||||
December 31, 2015 |
December 31, 2014 | ||||||||||||||||
Issue |
Current and noncurrent interest |
Current |
Noncurrent |
Total |
Current and noncurrent interest |
Current |
Noncurrent |
Total | |||||||||
Parent Company |
|||||||||||||||||
4th Issue |
Single series |
- |
- |
- |
- |
15,020 |
1,290,000 |
- |
1,305,020 | ||||||||
CPFL Paulista |
|||||||||||||||||
6th Issue |
Single series |
47,292 |
- |
660,000 |
707,292 |
38,673 |
- |
660,000 |
698,673 | ||||||||
7th Issue |
Single series |
29,546 |
- |
505,000 |
534,546 |
24,291 |
- |
505,000 |
529,291 | ||||||||
76,838 |
- |
1,165,000 |
1,241,838 |
62,964 |
- |
1,165,000 |
1,227,964 | ||||||||||
CPFL Piratininga |
|||||||||||||||||
3rd Issue |
Single series |
- |
- |
- |
- |
7,571 |
260,000 |
- |
267,571 | ||||||||
6th Issue |
Single series |
7,882 |
- |
110,000 |
117,882 |
6,446 |
- |
110,000 |
116,446 | ||||||||
7th Issue |
Single series |
13,749 |
- |
235,000 |
248,749 |
11,304 |
235,000 |
246,304 | |||||||||
21,631 |
- |
345,000 |
366,631 |
25,320 |
260,000 |
345,000 |
630,320 | ||||||||||
RGE |
|||||||||||||||||
6th Issue |
Single series |
35,828 |
- |
500,000 |
535,828 |
29,298 |
- |
500,000 |
529,298 | ||||||||
7th Issue |
Single series |
9,946 |
- |
170,000 |
179,946 |
8,177 |
- |
170,000 |
178,177 | ||||||||
45,774 |
- |
670,000 |
715,774 |
37,475 |
- |
670,000 |
707,475 | ||||||||||
CPFL Santa Cruz |
|||||||||||||||||
1st Issue |
Single series |
568 |
- |
65,000 |
65,568 |
480 |
- |
65,000 |
65,480 | ||||||||
CPFL Brasil |
|||||||||||||||||
2nd Issue |
Single series |
2,794 |
- |
228,000 |
230,794 |
2,346 |
- |
228,000 |
230,346 | ||||||||
CPFL Geração |
|||||||||||||||||
3rd Issue |
Single series |
- |
- |
- |
- |
7,687 |
264,000 |
- |
271,687 | ||||||||
5th Issue |
Single series |
13,382 |
- |
1,092,000 |
1,105,382 |
11,236 |
- |
1,092,000 |
1,103,236 | ||||||||
6th Issue |
Single series |
23,531 |
- |
460,000 |
483,531 |
19,446 |
- |
460,000 |
479,446 | ||||||||
7th Issue |
Single series |
16,770 |
- |
635,000 |
651,770 |
13,739 |
- |
635,000 |
648,739 | ||||||||
8th Issue |
Single series |
3,153 |
- |
80,024 |
83,177 |
2,903 |
- |
72,390 |
75,293 | ||||||||
56,835 |
- |
2,267,024 |
2,323,859 |
55,012 |
264,000 |
2,259,390 |
2,578,401 | ||||||||||
CPFL Renováveis |
|||||||||||||||||
1st Issue - SIIF (*) |
1st to 12th series |
788 |
38,965 |
467,577 |
507,329 |
798 |
36,640 |
476,329 |
513,767 | ||||||||
1st Issue - PCH Holding 2 |
Single series |
616 |
8,701 |
140,792 |
150,109 |
57,991 |
8,701 |
149,492 |
216,184 | ||||||||
1st Issue - Renováveis |
Single series |
6,579 |
43,000 |
365,500 |
415,079 |
5,795 |
21,500 |
408,500 |
435,795 | ||||||||
2nd Issue - Renováveis |
Single series |
11,894 |
- |
300,000 |
311,894 |
9,603 |
- |
300,000 |
309,603 | ||||||||
3rd Issue - Renováveis |
Single series |
4,589 |
- |
296,000 |
300,589 |
- |
- |
- |
- | ||||||||
1st Issue - WF2 |
Single series |
- |
- |
- |
- |
2,984 |
30,000 |
- |
32,984 | ||||||||
2nd Issue - WF2 |
Single series |
- |
- |
- |
- |
10,582 |
132,000 |
- |
142,582 | ||||||||
1st Issue - DESA |
Single series |
862 |
17,500 |
17,500 |
35,862 |
716 |
- |
35,000 |
35,716 | ||||||||
2nd Issue - DESA |
Single series |
16,487 |
- |
65,000 |
81,487 |
6,022 |
- |
65,000 |
71,022 | ||||||||
1st Issue - T-16 |
Single series |
1,810 |
277,200 |
- |
279,010 |
- |
- |
- |
- | ||||||||
1st Issue - Campos dos Ventos V |
Single series |
374 |
42,000 |
- |
42,374 |
- |
- |
- |
- | ||||||||
1st Issue - Santa Úrsula |
Single series |
275 |
30,800 |
- |
31,075 |
- |
- |
- |
- | ||||||||
44,274 |
458,165 |
1,652,369 |
2,154,808 |
94,491 |
228,841 |
1,434,321 |
1,757,653 | ||||||||||
Borrowing costs (**) |
- |
- |
(28,842) |
(28,842) |
- |
(766) |
(30,311) |
(31,077) | |||||||||
248,714 |
458,165 |
6,363,552 |
7,070,430 |
293,108 |
2,042,075 |
6,136,400 |
8,471,583 |
(*) These debentures can be converted into shares and, therefore, are considered in the calculation of the dilutive effect for earnings per share (note 26)
(**) In accordance with CPC 08/IAS 39, this refers to borrowings costs attributable to issuance of the respective debt instruments.
99
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Issue |
Quantity issued |
Annual Remuneration |
Annual effective rate |
Amortization conditions |
Collateral | |||||
Parent Company |
||||||||||
4th Issue |
Single series |
129.000 |
CDI + 0.40% |
CDI + 0.51% |
1 installment in May 2015 |
Unsecured | ||||
CPFL Paulista |
||||||||||
6th Issue |
Single series |
660 |
CDI + 0.8% (2) |
CDI + 0.87% |
3 annual installments from July 2017 |
CPFL Energia guarantee | ||||
7th Issue |
Single series |
50,500 |
CDI + 0.83% (3) |
CDI + 0.89% |
4 annual installments from February 2018 |
CPFL Energia guarantee | ||||
CPFL Piratininga |
||||||||||
3rd Issue |
Single series |
260 |
107% of CDI |
108.23% of CDI |
1 installment in April 2015 |
CPFL Energia guarantee | ||||
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) |
CDI + 0.89% |
4 annual installments from February 2018 |
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% (3) |
CDI + 0.88% |
4 annual installments from February 2018 |
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 | ||||
CPFL Brasil |
||||||||||
2nd Issue |
Single series |
2,280 |
CDI + 1.4% |
CDI + 1.48% |
2 annual instalments from June 2017 |
CPFL Energia guarantee | ||||
CPFL Geração |
||||||||||
3rd Issue |
Single series |
264 |
107% of CDI |
108.23% of CDI |
1 installment in April 2015 |
CPFL Energia guarantee | ||||
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% (1) |
CDI + 0.75% |
3 annual instalments from August 2018 |
CPFL Energia guarantee | ||||
7th Issue |
Single series |
63,500 |
CDI + 1.06% |
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 | ||||
CPFL Renováveis |
||||||||||
1st Issue - SIIF (*) |
1st to 12th series |
432,299,666 |
TJLP + 1% |
TJLP + 1% + 0.6% |
39 semi-annual installments from 2009 |
Liens | ||||
1st Issue - PCH Holding 2 |
Single series |
1,581 |
CDI + 1.6% |
CDI + 1.8% |
9 annual installments from June 2015 |
CPFL Renováveis guarantee | ||||
1st Issue - Renováveis |
Single series |
43,000 |
CDI + 1.7% |
CDI + 1.82% |
Annual installments from May 2015 |
Assignment of dividends of BVP and PCH Holding | ||||
2nd Issue - Renováveis |
Single series |
300,000 |
114.0% of CDI |
115.43% of CDI |
5 annual instalments from June 2017 |
Unsecured | ||||
3rd Issue - Renováveis |
Single series |
29,600 |
117.25% of CDI |
120.64% of CDI |
1 installment in May 2020 |
Unsecured | ||||
1st Issue - WF2 |
Single series |
12 |
CDI + 1.5% |
CDI + 1.5% |
1 installment in March 2015 |
Unsecured | ||||
2nd Issue - WF2 |
Single series |
20 |
CDI + 2% |
CDI + 2% |
1 installment in November 2015 |
Unsecured | ||||
1st Issue - DESA |
Single series |
20 |
CDI + 1.75% |
CDI + 1.75% |
3 semi-annual installments from May de 2016 |
Unsecured | ||||
2nd Issue - DESA |
Single series |
65 |
CDI + 1.34% |
CDI + 1.34% |
3 semi-annual installments from April de 2018 |
Unsecured | ||||
1st Issue - T-16 |
Single series |
27,720 |
112.75% of CDI |
116.94% of CDI |
1 installment in December 2016 |
CPFL Renováveis guarantee | ||||
1st Issue - Campos dos Ventos V |
Single series |
4,200 |
112.75% of CDI |
116.94% of CDI |
1 installment in December 2016 |
CPFL Renováveis guarantee | ||||
1st Issue - Santa Úrsula |
Single series |
3,080 |
112.75% of CDI |
116.94% of CDI |
1 installment in December 2016 |
CPFL Renováveis guarantee | ||||
The Company and its subsidiaries hold swaps that convert the prefixed component of interest on the operation to interest rate variation in reais, corresponding to: | ||||||||||
(1) 100.15% to 106.9% of CDI | ||||||||||
(2) 107% to 107.9% of CDI | ||||||||||
(3) 108% to 108.1% of CDI |
The maturities of the debentures recognized in noncurrent liabilities are scheduled as follows:
Maturity |
Consolidated | |
2017 |
1,207,228 | |
2018 |
1,765,358 | |
2019 |
1,910,981 | |
2020 |
667,147 | |
2021 |
445,574 | |
2022 to 2026 |
308,680 | |
2027 to 2031 |
58,585 | |
Total |
6,363,552 |
Main borrowings during the year
|
R$ thousand |
|||||||||||
Company |
Issue |
Quantity issued |
Released in 2015 |
Released net of borrowing costs |
Interest |
Utilization | ||||||
CPFL Renováveis - Parent company |
3rd issue - Single series |
29,600 |
296,000 |
293,596 |
Semiannual |
Improvement of the liquidity level and extension of the debt profile | ||||||
CPFL Renováveis - T-16 |
1st issue - Single series |
27,720 |
277,200 |
275,659 |
Semiannual |
Subsidiary's investment plan | ||||||
CPFL Renováveis - Campo dos Ventos V |
1st issue - Single series |
4,200 |
42,000 |
41,757 |
Semiannual |
Subsidiary's investment plan | ||||||
CPFL Renováveis - Santa Úrsula |
1st issue - Single series |
3,080 |
30,800 |
30,618 |
Semiannual |
Subsidiary's investment plan | ||||||
646,000 |
641,629 |
RESTRICTIVE COVENANTS
100
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
The debentures are subject to certain restrictive covenants, which include clauses that require the Company and its subsidiaries to maintain certain financial ratios within pre-established parameters. The main ratios are as follows:
CPFL Paulista (6th and 7th issues), CPFL Piratininga (6th and 7th issues), RGE (6th and 7th issues), CPFL Geração (5th , 6th , 7th and 8th issues), CPFL Brasil and CPFL Santa Cruz
Maintaining, by the Company, of the following ratios:
· Net indebtedness divided by EBITDA – maximum of 3.75;
· EBITDA divided by Finance Income (Costs) - minimum of 2.25;
For purposes of determination of covenants, the definition of EBITDA, in the Company, takes into consideration the consolidation of subsidiaries, associates and joint ventures based on the Company’s interest in those companies (both for EBITDA and assets and liabilities).
CPFL Renováveis
The issues of debentures for the year ended December 31, 2015 contain clauses that require the subsidiary CPFL Renováveis to maintain the following financial ratios:
1st Issue of CPFL Renováveis
· Operating debt service coverage ratio - minimum of 1.00;
· Debt service coverage ratio - minimum of 1.05;
· Net indebtedness divided by EBITDA- maximum of 5.6 in 2015, 5.4 in 2016, 4.6 in 2017, 4.0 in 2018 and 2019 and 3.75 from 2020;
· EBITDA divided by Net finance costs - minimum of 1.75.
The subsidiary obtained approval from the debentureholders for non-compliance with the following:
(i) Debt Service Coverage ratio related to the calculation of June 2015, through the General Meeting of Debentureholders, held on June 30, 2015;
(ii) Debt Service Coverage ratio related to the calculation of December 2015, through the General Meeting of Debentureholders held on December 21, 2015.
2nd Issue CPFL Renováveis
· Maintaining a Net Debt/EBITDA ratio maximum of 5.6 in 2015, 5.4 in 2016, 4.6 in 2017, 4.0 in 2018 and 2019 and 3.75 from 2020.
3rd Issue of CPFL Renováveis
· Net indebtedness divided by EBITDA- maximum of 5.6 in 2015, 5.4 in 2016, 4.6 in 2017, 4.0 in 2018 and 2019 and 3.75 from 2020.
1st issue of the indirect subsidiary PCH Holding 2 S.A:
· Maintaining the Debt Service Coverage ratio of the subsidiary Santa Luzia at 1.2 or more from September 2014.
· Net Debt indebtedness divided by EBITDA maximum of 5.6 in 2015, 5.4 in 2016, 4.6 in 2017, 4.0 in 2018 and 2019 and 3.75 from 2020.
2nd issue – Dobrevê Energia S/A (DESA):
· Maintaining a net debt/dividends ratio of 5.5 or less in 2014, 5.5 in 2015, 4.0 in 2016, 3.5 in 2017 and 3.5 in 2018
1st Issue – T-16 (Turbina 16 Energia):
· Maintenance of consolidated Net Debt/EBITDA ratio at no more than 5.6 for the year 2015.
1st issue – Campos dos Ventos V Energias Renováveis:
101
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
· Maintenance of consolidated Net Debt/EBITDA ratio at no more than 5.6 for the year 2015.
1st issue – Santa Úrsula Energias Renováveis:
· Maintenance of consolidated Net Debt/EBITDA ratio at no more than 5.6 for the year 2015.
Various debentures of subsidiaries and joint ventures are subject to acceleration of maturities in the event of changes in the Company’s ownership structure or in the ownership corporate structure of the subsidiaries that result in the loss of the share control or of control over management of the Company by the Company’s current shareholders, except unless at least one of the shareholders (Camargo Corrêa and Previ) remains directly or indirectly in the Company’s controlling block.
Failure to comply with the restrictions mentioned can result in default in relation to other contractual obligations (cross default), depending on each agreement.
The Management of the Company and its subsidiaries monitor those ratios systematically and constantly for the conditions to be fulfilled. In Management’s opinion, all restrictive covenants and clauses are adequately complied with at December 31, 2015.
( 19 ) PRIVATE PENSION PLAN
The subsidiaries sponsor supplementary retirement and pension plans for their employees. The main characteristics of these plans are as follows:
19.1 Characteristics
CPFL Paulista
The plan currently in force for the employees of the subsidiary CPFL Paulista through Fundação CESP is a Mixed Benefit Plan, with the following characteristics:
(i) Defined Benefit Plan (“BD”) – in force until October 31, 1997 – a defined benefit plan, which grants a Proportional Supplementary Defined Benefit (“BSPS”), in the form of a lifetime income convertible into a pension, to participants enrolled prior to October 31, 1997, the amount being defined in proportion to the accumulated past service time up to that date, based on compliance with the regulatory requirements for granting. The total responsibility for coverage of actuarial deficits of this plan falls to the subsidiary.
(ii) Mixed model, as from November 1, 1997, which covers:
· scheduled retirement, under a variable contribution plan, consisting of a benefit plan, which is a defined contribution plan up to the granting of the income, and does not generate any actuarial liability for the subsidiary CPFL Paulista. The benefit plan only becomes a defined benefit plan, consequently generating actuarial responsibility for the subsidiary, after the granting of a lifetime income, convertible or not into a pension.
Additionally, the subsidiary’s Managers may opt for a Free Benefit Generator Plan – PGBL (defined contribution), operated by either Banco do Brasil or Bradesco.
CPFL Piratininga
As a result of the spin-off of Bandeirante Energia S.A. (subsidiary’s predecessor), the subsidiary CPFL Piratininga assumed the responsibility for the actuarial liabilities of that company’s employees retired and terminated until the date of spin-off, as well as for the obligations relating to the active employees transferred to CPFL Piratininga.
102
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
On April 2, 1998, the Secretariat of Pension Plans – “SPC” approved the restructuring of the retirement plan previously maintained by Bandeirante, creating a "Proportional Supplementary Defined Benefit Plan – BSPS”, and a "Mixed Benefit Plan", with the following characteristics:
a) Defined Benefit Plan (“BD”) - in force until March 31, 1998 – a defined benefit plan, which grants a Proportional Supplementary Defined Benefit (BSPS), in the form of a lifetime income convertible into a pension to participants enrolled until March 31, 1998, in an amount calculated in proportion to the accumulated past service time up to that date, based on compliance with the regulatory requirements for granting. In the event of death while working or the onset of a disability, the benefits incorporate the entire past service time. CPFL Piratininga has full responsibility for covering the actuarial deficits of this Plan.
b) Defined Benefit Plan - in force after March 31, 1998 – defined-benefit type plan, which grants a lifetime income convertible into a pension based on the past service time accumulated after March 31, 1998, based on 70% of the average actual monthly salary for the last 36 months of active service. In the event of death while working or the onset of a disability, the benefits incorporate the entire past service time. The responsibility for covering the actuarial deficits of this Plan is equally divided between CPFL Piratininga and the participants.
c) Variable Contribution Plan – implemented together with the Defined Benefit plan effective after March 31, 1998. This is a defined-benefit type pension plan up to the granting of the income, and generates no actuarial liability for CPFL Piratininga. The pension plan only becomes a Defined Benefit type plan after the granting of the lifetime income, convertible (or not) into a pension, and accordingly starts to generate actuarial liabilities for the subsidiary.
Additionally, the subsidiary’s Managers may opt for a Free Benefit Generator Plan – PGBL (defined contribution), operated by either Banco do Brasil or Bradesco.
RGE
A defined benefit type plan, with a benefit level equal to 100% of the adjusted average of the most recent salaries, less the presumed Social Security benefit, with a Segregated Net Asset managed by ELETROCEEE. Only those whose employment contracts were transferred from CEEE to RGE are entitled to this benefit. A defined benefit private pension plan was set up in January 2006 with Bradesco Vida e Previdência for employees hired from 1997.
CPFL Santa Cruz
The benefits plan of the subsidiary CPFL Santa Cruz, managed by BB Previdência - Fundo de Pensão do Banco do Brasil, is a defined contribution plan.
CPFL Leste Paulista, CPFL Sul Paulista, CPFL Mococa and CPFL Jaguari
In December 2005, the companies joined the CMSPREV private pension plan, managed by IHPREV Pension Fund. The plan is structured as a defined contribution plan.
CPFL Geração
The employees of the subsidiary CPFL Geração participate in the same pension plan as CPFL Paulista.
In addition, managers may opt for a Free Benefit Generator Plan – PGBL (defined contribution), operated by either Banco do Brasil or Bradesco.
103
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
19.2 Movements in the defined benefit plans
December 31, 2015 | ||||||||||
CPFL |
CPFL Piratininga |
CPFL |
RGE |
Total | ||||||
Present value of actuarial obligations |
3,793,259 |
961,329 |
90,609 |
278,985 |
5,124,182 | |||||
Fair value of plan's assets |
(3,355,589) |
(951,021) |
(80,332) |
(287,202) |
(4,674,144) | |||||
Present value of net obligations (fair value of assets) |
437,670 |
10,308 |
10,277 |
(8,217) |
450,038 | |||||
Effect of asset ceiling |
- |
- |
- |
8,217 |
8,217 | |||||
Net actuarial liability recognized in the statement of financial position |
437,670 |
10,308 |
10,277 |
- |
458,255 | |||||
December 31, 2014 | ||||||||||
CPFL |
CPFL Piratininga |
CPFL |
RGE |
Total | ||||||
Present value of actuarial obligations |
3,820,563 |
986,972 |
88,621 |
279,283 |
5,175,439 | |||||
Fair value of plan's assets |
(3,315,422) |
(913,589) |
(85,360) |
(273,019) |
(4,587,390) | |||||
Present value of net obligations recognized in the statement of financial position |
505,140 |
73,383 |
|
3,261 |
|
6,264 |
|
588,048 |
104
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
The movements in the present value of the actuarial obligations and the fair value of the plan’s assets are as follows:
CPFL |
CPFL Piratininga |
CPFL |
RGE |
Total | ||||||
Present value of actuarial obligations at December 31, 2013 |
3,599,853 |
919,441 |
82,167 |
245,371 |
4,846,832 | |||||
Gross current service cost |
1,160 |
3,937 |
152 |
(43) |
5,206 | |||||
Interest on actuarial obligations |
404,925 |
104,090 |
9,250 |
27,748 |
546,013 | |||||
Participants' contributions transferred during the year |
14 |
1,700 |
- |
783 |
2,497 | |||||
Actuarial loss (gain): effect of changes in demographic assumptions |
35,892 |
10,484 |
1,113 |
4,379 |
51,868 | |||||
Actuarial loss (gain): effect of changes in financial assumptions |
89,187 |
16,695 |
3,089 |
19,387 |
128,358 | |||||
Benefits paid during the year |
(310,468) |
(69,375) |
(7,150) |
(18,342) |
(405,335) | |||||
Present value of actuarial obligations at December 31, 2014 |
3,820,563 |
986,972 |
88,621 |
279,283 |
5,175,439 | |||||
Gross current service cost |
1,183 |
3,733 |
160 |
(131) |
4,945 | |||||
Interest on actuarial obligations |
425,465 |
110,425 |
9,944 |
31,490 |
577,324 | |||||
Participants' contributions transferred during the year |
12 |
1,842 |
- |
611 |
2,465 | |||||
Actuarial loss (gain): effect of changes in financial assumptions |
(226) |
(614) |
(12) |
(6) |
(858) | |||||
Actuarial loss (gain): effect of changes in demographic assumptions |
(98,399) |
(70,590) |
(400) |
(11,884) |
(181,273) | |||||
Benefits paid during the year |
(355,339) |
(70,439) |
(7,704) |
(20,378) |
(453,860) | |||||
Present value of actuarial obligations at December 31, 2015 |
3,793,259 |
961,329 |
90,609 |
278,985 |
5,124,182 | |||||
CPFL |
CPFL Piratininga |
CPFL |
RGE |
Total | ||||||
Fair value of actuarial assets at December 31, 2013 |
(3,235,768) |
(874,546) |
(83,309) |
(242,325) |
(4,435,948) | |||||
Expected return during the year |
(365,720) |
(100,048) |
(9,459) |
(27,961) |
(503,188) | |||||
Participants' contributions transferred during the year |
(14) |
(1,700) |
- |
(783) |
(2,497) | |||||
Sponsors' contributions |
(85,024) |
(24,930) |
(1,809) |
(7,421) |
(119,184) | |||||
Actuarial loss (gain) |
60,636 |
18,260 |
2,067 |
(12,871) |
68,092 | |||||
Benefits paid during the year |
310,468 |
69,375 |
7,150 |
18,342 |
405,335 | |||||
Fair value of actuarial assets at December 31, 2014 |
(3,315,422) |
(913,589) |
(85,360) |
(273,019) |
(4,587,390) | |||||
Expected return during the year |
(375,527) |
(105,413) |
(9,691) |
(31,686) |
(522,317) | |||||
Participants' contributions transferred during the year |
(12) |
(1,842) |
- |
(611) |
(2,465) | |||||
Sponsors' contributions |
(81,111) |
(22,936) |
(1,687) |
(7,593) |
(113,327) | |||||
Actuarial loss (gain) |
61,144 |
22,320 |
8,702 |
5,329 |
97,495 | |||||
Benefits paid during the year |
355,339 |
70,439 |
7,704 |
20,378 |
453,860 | |||||
Fair value of actuarial assets at December 31, 2015 |
(3,355,589) |
(951,021) |
(80,332) |
(287,202) |
(4,674,144) |
19.3 Movements in recognized assets and liabilities recognized
The movements in net liability are as follows:
CPFL |
CPFL Piratininga |
CPFL |
RGE |
Total | ||||||
Net actuarial liability at December 31, 2013 |
364,085 |
44,895 |
- |
3,046 |
412,026 | |||||
Expenses (income) recognized in the statement of profit or loss |
40,365 |
7,979 |
77 |
(256) |
48,165 | |||||
Sponsors' contributions transferred during the year |
(85,024) |
(24,930) |
(1,809) |
(7,421) |
(119,184) | |||||
Actuarial loss (gain): effect of changes in demographic assumptions |
35,892 |
10,484 |
1,113 |
4,379 |
51,868 | |||||
Actuarial loss (gain): effect of changes in financial assumptions |
149,823 |
34,955 |
3,880 |
6,515 |
195,173 | |||||
Net actuarial liability at December 31, 2014 |
505,140 |
73,383 |
3,261 |
6,264 |
588,048 | |||||
Other contributions |
15,171 |
456 |
65 |
20 |
15,712 | |||||
520,311 |
73,839 |
3,326 |
6,284 |
603,760 | ||||||
Total liability |
520,311 |
73,839 |
3,326 |
6,284 |
603,760 | |||||
Current |
85,374 | |||||||||
Noncurrent |
518,386 | |||||||||
CPFL |
CPFL Piratininga |
CPFL |
RGE |
Total | ||||||
Net actuarial liability at December 31, 2014 |
505,140 |
73,383 |
3,261 |
6,264 |
588,048 | |||||
Expenses (income) recognized in the statement of profit or loss |
51,121 |
8,745 |
413 |
(95) |
60,184 | |||||
Sponsors' contributions transferred during the year |
(81,111) |
(22,936) |
(1,687) |
(7,593) |
(113,327) | |||||
Actuarial loss (gain): effect of changes in financial assumptions |
(226) |
(614) |
(12) |
(6) |
(858) | |||||
Actuarial loss (gain): effect of changes in demographic assumptions |
(37,254) |
(48,270) |
8,302 |
(6,555) |
(83,777) | |||||
Effect of asset ceiling |
- |
- |
- |
7,984 |
7,984 | |||||
Net actuarial liability at December 31, 2015 |
437,670 |
10,308 |
10,277 |
- |
458,255 | |||||
Other contributions |
16,149 |
526 |
63 |
127 |
16,865 | |||||
Total liability |
453,819 |
10,834 |
10,340 |
127 |
475,120 | |||||
Current |
802 | |||||||||
Noncurrent |
474,318 |
19.4 Expected contributions and benefits
The expected contributions to the plans for 2016 are shown below:
105
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
2016 | |
CPFL Paulista |
62,571 |
CPFL Piratininga |
16,341 |
CPFL Geração |
1,331 |
RGE |
8,345 |
Total |
88,588 |
The subsidiaries negotiated with Fundação Cesp a grace period for payment of the principal of the monthly contributions for the respective plans during the period from September 2015 to August 2017, with resumption of these payments as from September 2017.
The expected benefits to be paid by the Fundação CESP and ELETROCEEE in the next 10 years are shown below:
2016 |
2017 |
2018 |
2019 |
2020 to 2025 |
Total | ||||||
CPFL Paulista |
346,646 |
363,011 |
378,559 |
395,620 |
2,695,839 |
4,179,675 | |||||
CPFL Piratininga |
75,159 |
79,392 |
84,152 |
89,863 |
654,350 |
982,916 | |||||
CPFL Geração |
8,214 |
8,596 |
8,945 |
9,343 |
64,037 |
99,135 | |||||
RGE |
23,026 |
24,697 |
25,965 |
27,382 |
193,557 |
294,627 | |||||
Total |
453,045 |
475,696 |
497,621 |
522,208 |
3,607,783 |
5,556,353 |
At December 31, 2015, the average duration of the defined benefit obligation was 8.3 years for CPFL Paulista, 9.6 years for CPFL Piratininga, 8.4 years for CPFL Geração and 9.1 years for RGE.
19.5 Recognition of private pension plan income and expense
The actuary’s estimate of the expenses and/or income to be recognized in 2016 and the income/expense recognized in 2015 and 2014 is as follows:
2016 Estimated | |||||||||
CPFL |
CPFL Piratininga |
CPFL |
RGE |
Consolidated | |||||
Service cost |
761 |
2,509 |
68 |
16 |
3,354 | ||||
Interest on actuarial obligations |
458,646 |
117,039 |
10,960 |
33,889 |
620,534 | ||||
Expected return on plan assets |
(407,158) |
(116,891) |
(9,742) |
(35,488) |
(569,279) | ||||
Effect of asset ceiling |
- |
- |
- |
1,041 |
1,041 | ||||
Total expense (income) |
52,249 |
2,657 |
1,286 |
(542) |
55,650 | ||||
2015 Actual | |||||||||
CPFL |
CPFL Piratininga |
CPFL |
RGE |
Consolidated | |||||
Service cost |
1,183 |
3,733 |
160 |
(131) |
4,945 | ||||
Interest on actuarial obligations |
425,465 |
110,425 |
9,944 |
31,490 |
577,324 | ||||
Expected return on plan assets |
(375,527) |
(105,413) |
(9,691) |
(31,686) |
(522,317) | ||||
Effect of asset ceiling |
- |
- |
- |
232 |
232 | ||||
Total expense (income) |
51,121 |
8,745 |
413 |
(95) |
60,184 |
The main assumptions taken into consideration in the actuarial calculation at the end of the reporting period were as follows:
106
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
December 31, 2015 |
December 31, 2014 | ||
Nominal discount rate for actuarial liabilities: |
12.67% p.a. |
11.46% p.a. | |
Nominal Return Rate on Assets: |
12.67% p.a. |
11.46% p.a. | |
Estimated Rate of nominal salary increase: |
6.79% p.a. |
8.15% p.a. | |
Estimated Rate of nominal benefits increase: |
0.00% p.a. |
0.00% p.a. | |
Estimated long-term inflation rate (basis for determining the nominal rates above) |
5.00% p.a. |
5.00% p.a. | |
General biometric mortality table: |
AT-2000 (-10) |
AT-2000 (-10) | |
Biometric table for the onset of disability: |
Low light |
Low light | |
Expected turnover rate: |
ExpR_2012** |
ExpR_2012* | |
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 | |
(*) FUNCESP experience |
|||
(**) FUNCESP experience, with aggravation of 40% |
19.6 Plan assets
The following tables show the allocation (by asset segment) of the assets of the CPFL Energia pension plans, at December 31, 2015 and 2014 managed by Fundação CESP and ELETROCEEE. The tables also show the distribution of the guarantee resources established as target for 2016, obtained in light of the macroeconomic scenario in December 2015.
Assets managed by the plans are as follows:
Assets managed by Fundação CESP |
Assets managed by ELETROCEEE | |||||||||||||||||||||||
CPFL Paulista and CPFL Geração |
CPFL Piratininga |
RGE | ||||||||||||||||||||||
Quoted in an active market |
Not quoted in an active market |
Quoted in an active market |
Not quoted in an active market |
Quoted in an active market |
Not quoted in an active market | |||||||||||||||||||
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
2015 |
2014 | |||||||||||||
Fixed rate |
80% |
75% |
- |
- |
84% |
78% |
- |
- |
73% |
61% |
- |
- | ||||||||||||
Federal government bonds |
57% |
65% |
- |
- |
54% |
65% |
- |
- |
56% |
42% |
- |
- | ||||||||||||
Corporate bonds (financial institutions) |
5% |
5% |
- |
- |
10% |
9% |
- |
- |
4% |
5% |
- |
- | ||||||||||||
Corporate bonds (non financial institutions) |
1% |
1% |
- |
- |
1% |
2% |
- |
- |
5% |
8% |
- |
- | ||||||||||||
Multimarket funds |
16% |
2% |
- |
- |
19% |
2% |
- |
- |
8% |
6% |
- |
- | ||||||||||||
Other fixed income investments |
1% |
2% |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- | ||||||||||||
Variable income |
13% |
18% |
- |
- |
12% |
18% |
- |
- |
14% |
24% |
- |
- | ||||||||||||
CPFL Energia's shares |
5% |
6% |
- |
- |
4% |
5% |
- |
- |
- |
- |
- |
- | ||||||||||||
Investment funds - shares |
8% |
12% |
- |
- |
8% |
13% |
- |
- |
14% |
24% |
- |
- | ||||||||||||
Structured investments |
- |
- |
- |
- |
- |
- |
- |
- |
11% |
14% |
- |
- | ||||||||||||
Equity funds |
- |
- |
- |
- |
- |
- |
- |
- |
10% |
12% |
- |
- | ||||||||||||
Real estate funds |
- |
- |
- |
- |
- |
- |
- |
- |
1% |
1% |
- |
- | ||||||||||||
Multimarket fund |
- |
- |
- |
- |
- |
- |
- |
- |
- |
1% |
- |
- | ||||||||||||
Real estate |
- |
- |
4% |
4% |
- |
- |
2% |
2% |
- |
- |
1% |
1% | ||||||||||||
Transactions with participants |
- |
- |
2% |
2% |
- |
- |
2% |
2% |
- |
- |
1% |
1% | ||||||||||||
Other investments |
- |
- |
1% |
1% |
- |
- |
- |
- |
- |
- |
- |
- | ||||||||||||
Escrow deposits and other |
- |
- |
1% |
1% |
- |
- |
- |
- |
- |
- |
- |
- | ||||||||||||
93% |
93% |
7% |
7% |
96% |
96% |
4% |
4% |
98% |
98% |
2% |
2% |
The plan assets do not include any properties occupied or assets used by the Company. The fair value of the shares stated in line item "Shares of CPFL Energia" in the assets managed by Fundação CESP is R$ 245,380 at December 31, 2015 (R$ 288,061 at December 31, 2014).
107
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Target for 2016 | ||||||
Fundação CESP |
Fundação ELETROCEEE | |||||
CPFL Paulista and CPFL Geração |
CPFL Piratininga |
RGE | ||||
Fixed income investments |
81.0% |
83.9% |
81.0% | |||
Variable income investments |
11.2% |
9.8% |
14.0% | |||
Real estate |
3.9% |
1.8% |
1.0% | |||
Transactions with participants |
1.5% |
1.8% |
1.0% | |||
Structured investments |
0.2% |
0.3% |
3.0% | |||
Investments abroad |
2.1% |
2.4% |
0.0% | |||
100.0% |
100.0% |
100.0% |
The allocation target for 2016 was based on the recommendations for allocation of assets made at the end of 2015 by Fundação CESP and ELETROCEEE, in their Investment Policy. This target may change at any time during 2016, in light of changes in the macroeconomic situation or in the return on assets, among other factors.
The asset management aims to maximize the return on investments, while seeking to minimize the risks of an actuarial deficit. Investments are therefore always made bearing in mind the liabilities that have to be honored. One of the main tools used by Fundação CESP to achieve its management objectives is ALM (Asset Liability Management – Joint Management of Assets and Liabilities), performed at least once a year, for a horizon of more than 10 years. This tool also assists in studying the liquidity of the pension plans, taking into consideration the benefit payment flow in relation to liquid assets. ELETROCEEE also uses ALM.
The basis for determining the assumptions of estimated general return on the assets is supported by ALM. The main assumptions are macroeconomic projections for calculating the anticipated long-term profitability, taking into account the current benefit plan portfolios. ALM processes the ideal average long-term allocation of the plans’ assets and the estimated long-term profitability is based on this allocation and on the assumptions of the assets’ profitability.
19.7 Sensitivity analysis
The significant actuarial assumptions for determining the defined benefit obligation are discount rate and mortality. The following sensitivity analyses were based on reasonably possible changes in the assumptions at the end of the reporting period, with the other assumptions remaining constant.
In the presentation of the sensitivity analysis, the present value of the defined benefit obligation was calculated using the projected unit credit method at the end of the reporting period, the same method used to calculate the defined benefit obligation recognized in the statement of income, according to CPC 33 / IFRS 19.
See below the effects on the defined benefit obligation if the discount rate were 0.25 percentage points higher (lower) and if life expectancy were to increase (decrease) in one year for men and women:
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
Total | ||||||
Defined benefit plan obligation |
3,793,259 |
961,329 |
90,609 |
278,985 |
5,124,182 |
Assumptions |
Assumptions report (A) |
Increase / (Decrease) (B) |
Projected (A+B) |
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
Increase (decrease) in total defined benefit plan obligation | ||||||||
Nominal discount (p.a.) |
12.67% |
-0.25% |
12.42% |
79,544 |
23,406 |
1,929 |
6,412 |
111,291 | ||||||||
0.25% |
12.92% |
(76,589) |
(22,423) |
(1,855) |
(6,155) |
(107,022) | ||||||||||
Life expectancy (years) |
AT-2000(-10) |
-1 year |
(63,988) |
(12,079) |
(1,485) |
(3,659) |
(81,211) | |||||||||
+1 year |
62,082 |
11,584 |
1,446 |
3,508 |
78,620 |
108
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
19.8 Investment risk
The major part of the resources of the Company’s benefit plans is invested in the fixed income segment and, within this segment, the greater part of the funds is invested in federal government bonds, indexed to the IGP-M, IPCA and SELIC, which are the indexes for adjustment of the actuarial liabilities of the Company’s plans (defined benefit plans), representing the matching between assets and liabilities.
Management of the Company’s benefit plans is monitored by the Investment and Pension Plan Management Committee, which includes representatives of active and retired employees, as well as members appointed by the Company. Among the duties of the Committee are the analysis and approval of investment recommendations made by Fundação CESP investment managers, which occurs at least quarterly.
In addition to controlling market risks by the unplanned divergence methodology, as required by law, Fundação CESP and Fundação ELETROCEEE uses the following tools to control market risks in the fixed income and variable income segments: VaR, Tracking Risk, Tracking Error and Stress Test.
Fundação CESP's and Fundação ELETROCEEE’s Investment Policy imposes additional restrictions that, along those established by law, define the percentage of diversification for investments in assets issued or underwritten by the same legal entity.
( 20 ) REGULATORY CHARGES
Consolidated | |||
December 31, 2015 |
December 31, 2014 | ||
Fee for the use of water resources |
2,482 |
1,676 | |
Global reversal reserve - RGR |
17,446 |
15,993 | |
ANEEL inspection fee |
1,764 |
1,553 | |
Energy development account - CDE |
526,196 |
24,570 | |
FUST and FUNTEL |
3 |
2 | |
Tariff flags and other |
304,127 |
- | |
Total |
852,017 |
43,795 |
Energy development account – CDE: refer to the (i) annual CDE quota for the year 2015 in the amount of R$ 401,347(R$ 24,570 as at December 31, 2014); (ii) quota intended for CDE injection for the period from January 2013 to January 2014 in the amount of R$ 45,618; and (iii) quota intended for injection into the Regulated Contracting Environment (ACR) account for the period from February to December 2014, in the amount of R$ 79,231. The subsidiaries conducted matching of accounts between the amount of CDE payable and the accounts receivable – CDE injection (note 12) as from September 2015, in view of the fact that the Eletrobrás Settlement Receipts in the amount of R$ 814,850 were issued as from September 25, 2015.
Tariff flags and other: refer basically to the amount to be passed on to the Account Centralizing Tariff Flag Resources (“CCRBT”) (note 27.5).
109
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
( 21 ) TAXES, FEES AND CONTRIBUTIONS
Consolidated | |||
December 31, 2015 |
December 31, 2014 | ||
Current |
|||
ICMS (State VAT) |
384,151 |
266,489 | |
PIS (tax on revenue) |
33,199 |
15,096 | |
COFINS (tax on revenue) |
159,317 |
69,701 | |
IRPJ (corporate income tax) |
30,751 |
35,304 | |
CSLL (social contribution on net income) |
12,498 |
22,242 | |
Others |
33,427 |
27,434 | |
Total |
653,342 |
436,267 |
( 22 ) PROVISION FOR TAX, CIVIL AND LABOR RISKS AND ESCROW DEPOSITS
Consolidated | |||||||
December 31, 2015 |
December 31, 2014 | ||||||
Provision for tax, civil and labor risks |
Escrow Deposits |
Provision for tax, civil and labor risks |
Escrow Deposits | ||||
Labor |
|||||||
Various |
171,989 |
78,345 |
125,641 |
82,857 | |||
Civil |
|||||||
Various |
194,530 |
112,909 |
185,741 |
120,696 | |||
Tax |
|||||||
FINSOCIAL |
29,917 |
84,092 |
27,585 |
77,576 | |||
Income Tax |
138,524 |
886,271 |
120,054 |
829,589 | |||
Other |
15,920 |
63,600 |
23,480 |
51,755 | |||
184,362 |
1,033,964 |
171,119 |
958,920 | ||||
Other |
18,654 |
2,310 |
25,650 |
4 | |||
Total |
569,534 |
1,227,527 |
508,151 |
1,162,477 |
The movements in the provision for tax, civil and labor risks are shown below:
Consolidated | |||||||||||
December 31, 2014 |
Addition |
Reversal |
Payment |
Monetary Restatement |
December 31, 2015 | ||||||
Labor |
125,641 |
202,844 |
(63,330) |
(113,380) |
20,215 |
171,989 | |||||
Civil |
185,741 |
138,947 |
(53,723) |
(117,432) |
40,996 |
194,530 | |||||
Tax |
171,119 |
8,968 |
(2,861) |
(6,099) |
13,234 |
184,362 | |||||
Others |
25,650 |
3,255 |
(1,556) |
(10,601) |
1,905 |
18,654 | |||||
508,151 |
354,015 |
(121,469) |
(247,512) |
76,349 |
569,534 |
110
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
The provision for tax, civil and labor risks was based on the assessment of the risks of losing the lawsuits to which the Company and its subsidiaries are parties, where the likelihood of loss is probable in the opinion of the outside legal counselors and the Management of the Company and its subsidiaries.
The principal pending issues relating to litigation, lawsuits and tax assessments are summarized below:
a. Labor: The main labor lawsuits relate to claims filed by former employees or labor unions for payment of salary adjustments (overtime, salary parity, severance payments and other claims).
b. Civil
Bodily injury - refer mainly to claims for indemnities relating to accidents in the subsidiaries' electrical grids, damage to consumers, vehicle accidents, etc.
Tariff increase - refer to various claims by industrial consumers as a result of tariff increases imposed by DNAEE Administrative Rules 38 and 45, of February 27 and March 4, 1986, when the “Plano Cruzado” economic plan price freeze was in effect.
c. Tax
FINSOCIAL – refers to legal challenges of the subsidiary CPFL Paulista of the rate increase and collection of FINSOCIAL during the period from June 1989 to October 1991.
Income Tax – the provision of R$ 129,907 (R$120,094 at December 31, 2014) recognized by the subsidiary CPFL Piratininga refers to the lawsuit for tax deductibility of CSLL in the determination of corporate income tax - IRPJ.
Other - tax – refer to other lawsuits in progress at the judicial and administrative levels resulting from the subsidiaries' operations, related to tax matters involving INSS, FGTS and SAT.
Possible losses
The Company and its subsidiaries are parties to other lawsuits in which Management, supported by its external legal counselors, believes that the chances of a successful outcome are possible, due to a solid defensive position in these cases. It is not yet possible to predict the outcome of the courts’ decisions or any other decisions in similar proceedings considered probable or remote. The claims relating to possible losses, at December 31, 2015, were as follows: (i) R$ 659,636 labor (R$ 459,303 at December 31, 2014) related mainly to workplace accidents, hazardous duty premium, overtime, etc.; (ii) R$ 697,242 civil (R$ 481,575 at December 31, 2014) related mainly to bodily injury, environmental impacts and tariff increases; and (iii) R$ 3,600,368 tax (R$ 3,216,981 at December 31, 2014), related mainly to ICMS, FINSOCIAL, PIS and COFINS and Income tax, being one of the main claims the deductibility of the expense recognized in 1997 in relation to the commitment assumed for the pension plan of the employees of the subsidiary CPFL Paulista with Fundação CESP in the estimated amount of R$ 1,051,363 and (iv) R$ 71,514 regulatory at December 31, 2015 (R$ 39,739 at December 31, 2014).
The possible regulatory loss includes mainly the collection of the system service charge - ESS, established in the CNPE Resolution 3 of March 6, 2013. The total amount of the risk is R$ 31,282, related mainly to the subsidiaries CPFL Brasil (R$ 7,117), CPFL Renováveis (R$ 12,642), Ceran (R$ 9,819) and CPFL Jaguari Geração (Paulista Lajeado) (R$ 2.024).
As regards labor contingencies, the Company informs that there is discussion about the possibility of changing the inflation adjustment index adopted by the Labor Court. Currently there is a decision of the Federal Supreme Court (STF) that suspends the change taken into effect by the Superior Labor Court (TST), which intended to change the index currently adopted by the Labor Court (“TR”), the IPCA-E. The Supreme Court considered that the TST’s decision entailed an unlawful interpretation and was not compliant with the determination of the effects of prior court decisions, violating its competence to decide on a constitutional matter. In view of such decision, and until there is a new decision by the STF, the index currently adopted by the Labor Court (“TR”) remains valid. Accordingly, the management of the Company and its subsidiaries considers the risk of loss as possible and, as this matter still requires definition by the Courts, it is not possible to reliably estimate the amounts involved.
Escrow deposits – income tax: of the total amount of R$ 886,271, R$ 745,903 (R$ 703,073 at December 31, 2014) refers to the discussion of the deductibility for federal tax purposes of expense recognized in 1997 in respect of the commitment made by the subsidiary CPFL Paulista to Fundação CESP, related to the
111
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Based on the opinion of their external legal advisers, Management of the Company and its subsidiaries consider that the registered amounts represent best estimate.
( 23 ) USE OF PUBLIC ASSET
Consolidated | |||||||
Subsidiary |
December 31, 2015 |
December 31, 2014 |
Number of remaining installments |
Interest rates | |||
CERAN |
92,851 |
84,992 |
243 |
IGP-M + 9.6% p.a. | |||
Current |
9,457 |
4,000 |
|||||
Noncurrent |
83,124 |
80,992 |
( 24 ) OTHER PAYABLES
Consolidated | ||||||||
Current |
Noncurrent | |||||||
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 | |||||
Consumers and concessionaires |
53,959 |
49,710 |
- |
- | ||||
Energy efficiency program - PEE |
295,745 |
267,123 |
35,597 |
13,370 | ||||
Research & Development - P&D |
84,943 |
105,125 |
36,426 |
12,389 | ||||
National scientific and technological development fund - FNDCT |
4,115 |
1,469 |
- |
- | ||||
Energy research company - EPE |
2,065 |
734 |
- |
- | ||||
Reversion fund |
- |
- |
17,750 |
17,750 | ||||
Advances |
141,228 |
85,683 |
10,041 |
23,849 | ||||
Provision for socio environmental costs and asset retirement |
- |
- |
53,378 |
49,938 | ||||
Payroll |
13,136 |
12,232 |
- |
- | ||||
Profit sharing |
49,227 |
55,659 |
5,099 |
7,413 | ||||
Collection agreements |
130,282 |
91,889 |
- |
- | ||||
Guarantees |
- |
- |
28,531 |
31,479 | ||||
Tariff discounts - CDE |
54,749 |
35,053 |
- |
- | ||||
Business combination |
29,935 |
70,419 |
- |
16,152 | ||||
Others |
45,587 |
60,844 |
4,326 |
11,425 | ||||
Total |
904,971 |
835,941 |
191,148 |
183,766 |
Consumers and concessionaires: refer to liabilities with consumers in connection with bills paid twice and adjustments of billing to be offset or returned to consumers as well the participation of consumers in the “Programa de Universalização” program.
Research and Development and Energy Efficiency Programs: the subsidiaries recognized liabilities relating to amounts already billed in tariffs (1% of Net Operating Revenue), but not yet invested in the Research and Development and Energy Efficiency Programs. These amounts are subject to adjustment for inflation at the SELIC rate, through the date of their realization.
112
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
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.
Provision for socio environmental costs and asset retirement: refers mainly to provisions recognized by the indirect subsidiary CPFL Renováveis in relation to socio environmental licenses as a result of events that have already occurred and obligations to remove assets arising from contractual and legal requirements related to leasing of land on which the wind farms are located. Such costs are accrued against property, plant and equipment and will be depreciated over the remaining useful life of the asset.
Profit sharing: mainly comprised by:
(i) in accordance with a collective labor agreement, the Company and its subsidiaries introduced an employee profit-sharing program, based on the achievement of operating and financial targets previously established;
(ii) Long-Term Incentive Program: refer to the Long-Term Incentive Plan for Executives, which involves rewarding the latter with financial resources, based on the behavior of the Company’s shares on the market and expectations for appreciation, as well as the Company’s results, using parametric calculation formulas and granting of Virtual Value Units (UVV). The Plan does not contemplate distributing Company shares to such executives and only uses them for purposes of monitoring the expectations established in the Company’s Long-Term Strategic Plan, likewise approved by the Board of Directors.
The currently effective plan is in effect from 2014 to 2020 and calls for grants relating to 2014, 2015 and 2016. The effective period is thus 6 years, with a grace period of two years for the first conversion of each annual grant. The conversion term for each grant is gradual, in a period of up to 5 years and in 3 conversions (33/33/34%).
The incentive program calls for partial realization, according to the relationship between expected appreciation and that effectively accrued, as per Strategic Plan expectation, there being a minimum expected results trigger, as well as attainment higher than initially projected, limited to 150%.
Tariff discounts – CDE: refer to the difference between the tariff discount granted to consumers and the amounts received via the CDE.
Business acquisition: mainly refer to the amounts recognized by the subsidiary CPFL Renováveis, mainly in relation to the acquisition of noncontrolling interests. This amount is derived from the merger of WF2 (note 13) on October 1, 2014. Before WF2 acquisition by CPFL Renováveis, the acquiree had signed an agreement for the purchase of shares and other covenants from the noncontrolling shareholders of DESA, then holders of 21.14% of the voting and total capital of DESA. Under such agreement, the noncontrolling shareholders undertake to dispose of all their shares at the total amount of R$ 203,000, under the terms and subject to the conditions established in the agreement. The remaining amount of R$ 16,190 outstanding at December 31, 2015 has been paid in five quarterly installments, the last of which paid on January 29, 2016. The amount of each quarterly installment will be adjusted for inflation at the CDI rate, +1.2% a year, calculated on a pro rata basis.
( 25 ) EQUITY
The shareholders’ interest in the Company’s equity at December 31, 2015 and 2014 is shown below:
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Number of shares | ||||||||
December 31, 2015 |
December 31, 2014 | |||||||
Shareholders |
Common shares |
Interest % |
Common shares |
Interest % | ||||
BB Carteira Livre I FIA |
262,698,037 |
26.45 |
288,569,602 |
29.99 | ||||
Caixa de Previdência dos Funcionários do Banco do Brasil - Previ |
29,756,032 |
3.00 |
477,700 |
0.05 | ||||
Camargo Correa S.A. |
26,764 |
0.00 |
837,860 |
0.09 | ||||
ESC Energia S.A. |
234,086,204 |
23.57 |
234,092,930 |
24.33 | ||||
Bonaire Participações S.A. |
1,238,334 |
0.12 |
1,200,000 |
0.12 | ||||
Energia São Paulo FIA |
146,463,379 |
14.75 |
141,929,430 |
14.75 | ||||
Fundação Petrobras de Seguridade Social - Petros |
1,816,119 |
0.18 |
1,759,900 |
0.18 | ||||
Fundação Sistel de Seguridade Social |
- |
- |
19,500 |
0.00 | ||||
BNDES Participações S.A. |
66,914,177 |
6.74 |
64,842,768 |
6.74 | ||||
Antares Holdings Ltda. |
16,552,110 |
1.67 |
16,039,720 |
1.67 | ||||
Brumado Holdings Ltda. |
35,604,273 |
3.59 |
34,502,100 |
3.59 | ||||
Members of the Board of Directors |
- |
- |
800 |
0.00 | ||||
Members of the Executive Board |
105,672 |
0.01 |
102,300 |
0.01 | ||||
Other shareholders |
197,753,114 |
19.91 |
177,899,650 |
18.49 | ||||
Total |
993,014,215 |
100.00 |
962,274,260 |
100.00 |
25.1 Approval of capital increase and bonus in shares to be paid to shareholders – AGM/EGM
At the Extraordinary General Meeting of April 29, 2015, a capital increase at CPFL Energia was approved, in order to strengthen the Company’s capital structure, through the capitalization of the Statutory Reserve for Working Capital Improvement in the amount of R$ 554,888, through the issuance of 30,739,955 common shares, which were distributed to shareholders as share bonus, pursuant to Article 169 of Law 6404/76.
25.2 Capital reserves
Refer basically to: (i) R$ 228,322 related to the CPFL Renováveis business combination in 2011, (ii) effect of the public offer of shares, in 2013, of the subsidiary CPFL Renováveis, as mentioned in note 15.5, amounting to R$ 59,308, as a result of the reduction of the indirect interest in CPFL Renováveis, (iii) effect of the association between CPFL Renováveis and DESA, described in note 13, amounting to R$ 180,297 in 2014, and (iv) other movements with no change of control amounting to R$155. In accordance with ICPC 09 (R2) and IFRS 10 / CPC 36, these effects were recognized as transactions between shareholders, directly in Equity.
25.3 Earnings reserves
Comprised of:
i. Legal reserve, amounting to R$ 694,058;
ii. Statutory reserve – concession financial asset: the distribution subsidiaries recognize in profit or loss the adjustment to the expected cash flow from the concession financial asset, however its financial realization will occur only upon the indemnity (at the end of the concession). As result, the Company recognizes a statutory reserve – concession financial asset for these amounts, supported by article 194 of Law 6404/76, until their financial realization. This statutory reserve amounts to R$ 585,451 at December 31, 2015 (R$ 330,437 at December 31, 2014).
25.4 Accumulated comprehensive income
The accumulated comprehensive income is comprised of:
(i) Deemed cost: refers to the recognition of the fair value adjustments of the deemed cost of the generating plants' property, plant and equipment, of R$ 457,491;
(ii) Private pension plan: The debt balance of R$ 272,171 refers to the effects recognized directly in comprehensive income, in accordance with IAS 19 / CPC 33 (R2).
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
25.5 Dividends
During the year 2015 the Company declared the amount of R$ 205,423 as mandatory minimum dividends, as required by Law No. 6.404/76.
25.6 Allocation of profit for the year
The Company’s bylaws assure shareholders a minimum dividend of 25% of profit for the year, adjusted in accordance with the law.
The proposed allocation of profit for the year is shown below:
R$ thousand | |
Profit for the year - Parent company |
864,940 |
Realization of comprehensive income |
26,119 |
Prescribed dividends |
5,597 |
Profit base for allocation |
896,656 |
Legal reserve |
(43,247) |
Statutory reserve - concession financial asset |
(255,013) |
Statutory reserve - working capital improvement |
(392,972) |
Mandatory dividend |
(205,423) |
For this year, considering the current adverse economic scenario and the uncertainties regarding market projections for distribution companies, owing to energy efficiency campaigns and extraordinary increases in tariffs during 2015, Company Management is proposing allocating R$ 392,972 to the Statutory Reserve for Working capital improvement.
( 26 ) EARNINGS PER SHARE
Earnings per share – basic and diluted
The calculation of the basic and diluted earnings per share at December 31, 2015 and 2014 was based on the profit attributable to controlling shareholders and the weighted average number of common shares outstanding during the reporting years. For diluted earnings per share, the calculation considered the dilutive effects of instruments convertible into shares, as shown below:
2015 |
2014 |
||||
Numerator |
|||||
Profit attributable to controlling shareholders |
864,940 |
949,177 |
|||
Denominator |
|||||
Weighted average number of shares held by shareholders |
993,014,215 |
(**) |
993,014,215 |
(**) | |
Earnings per share - basic |
0.87 |
0.96 |
|||
Numerator |
|||||
Profit attributable to controlling shareholders |
864,940 |
949,177 |
|||
Dilutive effect of convertible debentures of subsidiary CPFL Renováveis (*) |
(19,811) |
(17,265) |
|||
Profit attributable to controlling shareholders |
845,129 |
931,912 |
|||
Denominator |
|||||
Weighted average number of shares held by shareholders |
993,014,215 |
(**) |
993,014,215 |
(**) | |
Earnings per share - diluted |
0.85 |
0.94 |
(*) Proportional to the percentage of the Company’s equity interest in the subsidiary in the respective years.
(**) Considers the event that occurred on April 29, 2015, related to the capital increase through issue of 30,739,955 shares (note 25). In accordance with CPC 41/IAS 33, when there is an increase in the number of shares without an increase in resources, the number of shares is adjusted as if the event had occurred at the beginning of the oldest period presented
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
The dilutive effect of the numerator in the calculation of diluted earnings per share takes into account the dilutive effects of the debentures convertible into shares issued by subsidiaries of the indirect subsidiary CPFL Renováveis. The calculation of the effects was based on the assumption that these debentures would have been converted into common shares of the subsidiaries at the beginning of each year.
The effects calculated in the denominator of indirect subsidiary CPFL Renováveis for calculation of diluted earnings per share resulting from the subsidiary’s share-based payment plan were considered anti-dilutive in 2015 and 2014. For this reason, these effects were not included in the calculation for each of these two years.
( 27 ) NET OPERATING REVENUE
Consolidated | |||||||||||
Number of Consumers (*) |
In GWh (*) |
R$ thousand | |||||||||
Revenue from Electric Energy Operations |
2015 |
2014 |
2015 |
2014 |
2015 |
2014 | |||||
Consumer class |
|||||||||||
Residential |
6,906,580 |
6,732,715 |
16,164 |
16,501 |
9,833,419 |
6,533,590 | |||||
Industrial |
55,586 |
56,920 |
12,748 |
14,144 |
5,526,967 |
3,871,868 | |||||
Commercial |
473,333 |
483,204 |
9,259 |
9,437 |
5,266,432 |
3,471,225 | |||||
Rural |
245,238 |
243,275 |
2,152 |
2,326 |
750,209 |
496,790 | |||||
Public Administration |
51,359 |
50,538 |
1,278 |
1,295 |
674,530 |
476,557 | |||||
Public Lighting |
10,362 |
9,917 |
1,649 |
1,622 |
573,219 |
315,072 | |||||
Public Services |
8,402 |
8,155 |
1,797 |
1,861 |
879,288 |
566,719 | |||||
(-) Transfers of revenues from excess demand and excess reactive power |
- |
- |
- |
- |
(79,362) |
(84,017) | |||||
Billed |
7,750,860 |
7,584,724 |
45,049 |
47,187 |
23,424,701 |
15,647,804 | |||||
Own consumption |
- |
- |
33 |
34 |
- |
- | |||||
Unbilled (net) |
- |
- |
- |
- |
202,726 |
63,142 | |||||
Emergency Charges - ECE/EAEE |
- |
- |
- |
- |
3 |
2 | |||||
(-) Transfers of revenues related to network usage charge of the captive consumers |
- |
- |
- |
- |
(8,118,085) |
(5,464,570) | |||||
Electricity sales to final consumers |
7,750,860 |
7,584,724 |
45,082 |
47,221 |
15,509,345 |
10,246,379 | |||||
Furnas Centrais Elétricas S.A. |
3,026 |
3,026 |
485,846 |
477,775 | |||||||
Other Concessionaires and Licensees |
10,656 |
9,628 |
2,223,339 |
1,690,711 | |||||||
(-) Transfers of revenues related to network usage charge of the captive consumers |
- |
- |
(46,982) |
(0) | |||||||
Spot market energy |
4,289 |
2,334 |
875,002 |
976,377 | |||||||
Electricity sales to wholesalers |
17,971 |
14,988 |
3,537,205 |
3,144,864 | |||||||
Revenue due to network usage charge - TUSD - captive consumers |
8,165,066 |
5,464,570 | |||||||||
Revenue due to network usage charge - TUSD - free consumers |
1,898,138 |
990,815 | |||||||||
(-) Transfers of revenue surplus and excess revenue |
(16,884) |
(18,045) | |||||||||
Revenue from construction of concession infrastructure |
1,046,669 |
944,997 | |||||||||
Sector financial asset and liability (Note 8) |
2,506,524 |
910,720 | |||||||||
Energy development account - CDE - low-income and other tariff discounts |
895,538 |
771,018 | |||||||||
Other revenues and income |
367,356 |
341,061 | |||||||||
Other operating revenues |
14,862,408 |
9,405,136 | |||||||||
Total gross operating revenue |
33,908,958 |
22,796,379 | |||||||||
Deductions from operating revenue |
|||||||||||
ICMS |
(4,686,039) |
(3,106,928) | |||||||||
PIS |
(529,322) |
(335,937) | |||||||||
COFINS |
(2,438,208) |
(1,547,783) | |||||||||
ISS |
(8,204) |
(7,583) | |||||||||
Global reversal reserve - RGR |
(2,529) |
(2,362) | |||||||||
Energy development account - CDE |
(3,970,013) |
(271,577) | |||||||||
Research and development and energy efficiency |
(158,516) |
(117,683) | |||||||||
PROINFA |
(90,910) |
(100,569) | |||||||||
Tariff flags and other |
(1,796,226) |
(2) | |||||||||
IPI |
(100) |
(10) | |||||||||
FUST and FUNTEL |
(24) |
(2) | |||||||||
Other |
(22,997) |
- | |||||||||
|
(13,703,089) |
(5,490,436) | |||||||||
|
|||||||||||
Net operating revenue |
20,205,869 |
17,305,942 | |||||||||
(*) Information not audited by the independent auditors |
27.1 Adjustment of revenues from excess demand and excess reactive power
The tariff regulation procedure (Proret), approved by ANEEL Normative Resolution No. 463 of November 22, 2011, determined that revenues received as a result of excess demand and excess reactive power, from the contractual tariff review date for the 3rd periodic tariff review, should be accounted for as special obligations and would be amortized from the next tariff review. For subsidiary CPFL Piratininga, based on the 4th periodic tariff review cycle, as from May 2015 and for the subsidiaries CPFL Santa Cruz, CPFL Leste Paulista, CPFL Jaguari, CPFL Sul Paulista and CPFL Mococa, as from September 2015, such special obligation began to be amortized and the new amounts resulting from such obligation began to be amortized and the new amounts resulting from capping of demand and excess of reagents began to be appropriated in sector financial assets and liabilities, and they will only be amortized upon ratification of the 5th cycle of periodic tariff revision.
On February 7, 2012, the Brazilian Association of Electric Energy Distributors (Associação Brasileira de Distribuidores de Energia Elétrica - ABRADEE) succeeded in suspending the effects of Resolution 463, whereby the request for preliminary injunction relief was granted and the order to account for revenues from
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
27.2 Extraordinary Tariff Review (“RTE”)
On February 27, 2015, the ANEEL approved the result of the Extraordinary Tariff Revision (RTE) in order to re-establish the tariff coverage for electric energy distributors given the significant increase in the CDE quota for 2015 and the cost of purchasing electric energy (Itaipu tariff and exchange variation, and auctions of existing electric power and adjustment). The tariffs resulting from this RTE were in effect from March 2, 2015 up to the date of the next readjustment or tariff revision for each distributor. With respect to subsidiaries CPFL Leste Paulista, CPFL Sul Paulista, CPFL Jaguari, CPFL Mococa and CPFL Santa Cruz, on April 7, 2015, by means of Ratification Resolution No. 1.870, the ANEEL adjusted the result of the RTE of February 27, in order to change the amount of the monthly CDE quotas – energy relating to the ACR account, intended for amortization of credit operations by the CCEE in management of the ACR account. The tariffs resulting from such adjustment or rectification are in effect as from April 8, 2015 up to the date of the next tariff revision for each distributor.
The average effects for the distributors’ consumers were:
Effect perceived by consumers (*) | ||||||
Subsidiary |
Total |
Group A |
Group B | |||
CPFL Paulista |
32.28% |
40.05% |
27.27% | |||
CPFL Piratininga |
29.78% |
40.49% |
21.47% | |||
RGE |
37.16% |
43.46% |
33.04% | |||
CPFL Santa Cruz |
5.16% |
5.70% |
4.86% | |||
CPFL Leste Paulista |
14.52% |
20.06% |
12.39% | |||
CPFL Jaguari |
16.80% |
18.48% |
13.25% | |||
CPFL Sul Paulista |
17.02% |
32.42% |
9.09% | |||
CPFL Mococa |
11.81% |
18.22% |
9.48% | |||
(*) Information not audited by the independent auditors |
27.3 Periodic tariff review (“RTP”) and Annual tariff adjustment (“RTA”)
2015 |
2014 | |||||||||
Subsidiary |
Month |
RTA / RTP |
Effect perceived by consumers (a) |
RTA / RTP |
Effect perceived by consumers (a) | |||||
CPFL Paulista |
April |
41.45% |
4,67% (b) |
17.18% |
17.23% | |||||
CPFL Piratininga |
October |
56.29% |
21,11% (b) |
19.73% |
22.43% | |||||
RGE |
June |
33.48% |
-3,76% (b) |
21.82% |
22.77% | |||||
CPFL Santa Cruz |
February (c) |
34.68% |
27.96% |
14.86% |
26.00% | |||||
CPFL Leste Paulista |
February (c) |
20.80% |
24.89% |
-7.67% |
-5.32% | |||||
CPFL Jaguari |
February (c) |
38.46% |
45.70% |
-3.73% |
3.70% | |||||
CPFL Sul Paulista |
February (c) |
24.88% |
28.38% |
-5.51% |
0.43% | |||||
CPFL Mococa |
February (c) |
23.34% |
29.28% |
-2.07% |
-9.53% |
(a) Represents the average effect perceived by consumers, as a result of the elimination from the tariff base of financial components that had been added in the prior tariff adjustment (information not audited by the independent auditors).
(b) Consumer perception in comparison to the Extraordinary Tariff Revision (RTE) described in note 27.3.
(c) On February 3, 2016, ANEEL changed the RTA date of these subsidiaries, which will now be held on March 22 (note 38.3).
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
27.4 Energy Development Account - CDE – low income and other tariff discounts
Law 12,783 of January 11, 2013 determined that the amounts related to the low-income subsidy, as well as other tariff discounts shall be fully subsidized by amount from the CDE.
Income of R$ 895,538 was recognized in 2015 (R$ 771,018 in 2014), of which R$ 66,313 for the low-income subsidy (R$ 78,028 in 2014) and R$ 829,225 for other tariff discounts (R$ 692,990 in 2014), against other receivables in line item “Receivables –Energy Development Account – CDE/CCEE” (note 12) and “Payables – CDE” (note 24).
27.5 Tariff flags
The system for application of Tariff Flags was created by means of Normative Resolution No. 547/2013, in effect as from January 1, 2015. Such mechanism can reflect the actual cost of the conditions for generation of electric energy in Brazil, mainly related to thermoelectric generation, energy security ESS, hydrologic risk and involuntary exposure of electric energy distributors. A green flag indicates favorable conditions and the tariff does not rise. A yellow flag indicates less favorable conditions, and the red flag is set off in costlier conditions. In the latter cases, the tariff increases R$ 2.50 and R$ 5.50 (before tax effects), respectively, for each 100 KWh consumed, readjusted by means of Ratification Resolution No. REH 1.859/2015 as from March 1, 2015. In addition, as from September 1, 2015, as per REH 1.945/2015, the red flag tariff was altered to R$ 4.50 for every 100 KWh consumed.
In 2015, the distribution subsidiaries billed their consumers the amount of R$ 1,796,226 in terms of Red Flag, recorded in line item "Tariff flags and others”. Out of this amount, after ratification by the ANEEL, R$ 1,297,717 was used to offset part of the sector’s financial assets (note 8), R$ 194,428 was passed on to the Account Centralizing Tariff Banner Resources (“CCRBT”), created by means of Decree No. 8.401/2015 and administered by the CCEE, and R$ 304,079 continues outstanding, recorded under liabilities – regulatory fees (note 20).
Furthermore, the CCRBT, created by means of Decree No. 8.401/2015 and administered by the CCEE, ratified the amount receivable of R$ 90,794 by subsidiary RGE, received in full by December 31, 2015.
27.6 Energy development account – CDE
By means of Ratification Resolution No. 1.857 of February 27, 2015, the ANEEL established the definitive annual quotas of the CDE for the year 2015. This quota comprises: (i) annual quota of the CDE – Usage account; and (ii) CDE quota – Energy, related to part of the CDE contributions received by the electric energy distribution concessionaires in the period from January 2013 to January 2014 (note 28), which should be paid by consumers and passed on to the CDE in five years as from the 2015 RTE. In addition, by means of Ratification Resolution No. 1.863 of March 31, 2015, the ANEEL established another quota intended for amortization of the ACR account (note 28), with payment and transfer to the CDE for an average period of five years as from the ordinary tariff process (RTA or RTP) for the year 2015.
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
( 28 ) COST OF ELECTRIC ENERGY
Consolidated | ||||||||
GWh (*) |
R$ thousand | |||||||
Electricity Purchased for Resale |
2015 |
2014 |
2015 |
2014 | ||||
Itaipu Binacional |
10,261 |
10,417 |
2,869,481 |
1,383,604 | ||||
Spot market |
2,946 |
5,074 |
724,203 |
3,018,523 | ||||
PROINFA |
1,058 |
1,043 |
256,806 |
264,068 | ||||
Energy purchased through auction in the regulated market and bilateral contracts |
44,342 |
42,345 |
9,192,868 |
8,837,459 | ||||
Energy development account - CDE/CCEE |
- |
- |
- |
(2,340,912) | ||||
PIS and COFINS credit |
- |
- |
(1,196,579) |
(1,005,106) | ||||
Subtotal |
58,607 |
58,879 |
11,846,779 |
10,157,635 | ||||
Electricity network usage charge |
||||||||
Basic network charges |
847,342 |
727,341 | ||||||
Transmission from Itaipu |
51,236 |
37,896 | ||||||
Connection charges |
56,312 |
44,834 | ||||||
Charges for use of the distribution system |
40,332 |
33,147 | ||||||
System service charges - ESS |
555,851 |
(326,248) | ||||||
Reserve energy charges |
54,762 |
10,898 | ||||||
Energy development account - CDE |
- |
(1) | ||||||
PIS and COFINS credit |
(140,868) |
(42,372) | ||||||
Subtotal |
1,464,967 |
485,495 | ||||||
Total |
13,311,747 |
10,643,130 | ||||||
(*) Information not audited by the independent auditors |
28.1 Amounts from CDE/CCEE – Law 12,783/2013, Decrees 7,945/2013, 8,203/2014, 8,221/2014 and Order 3,998/2014.
Due to the unfavorable hydropower conditions from the end of 2012, including the low levels of water reserves at the hydroelectric power plants, the output of the thermal plants was set at the highest level. In view of this and considering the concessionaires’ exposure in the spot market, due largely to allocation of the physical energy and power guarantee quotas and repeal of the plants’ authorization by ANEEL, the distributors’ energy cost increased significantly in 2012, 2013, 2014 and 2015.
As a result of this scenario and as the distribution concessionaires do not have control over these costs, on March 7, 2013, the Brazilian government issued Decree 7,945, amended by Decree 8,203/14 and further by Decree 8,221/14, which made certain changes in the contracting of energy and the objectives of the Energy Development Account - CDE charge:
(i) pass-through of CDE funds to the distribution concessionaires in relation to the exposure in the hydrologic risk, involuntary exposure, ESS – Energy Security, CVA ESS and Energy for the year of 2013 and January 2014; and
(ii) pass-through to the distribution concessionaires of costs related to involuntary exposure and output of the thermoelectric plants through the Electric Energy Commercialization Chamber - CCEE from February 2014 to December 2014. Additionally, Order 3,998 of September 30, 2014 included the hydrological risk of the renewed energy quotas as involuntary exposure, from July 2014.
A total amount of R$ 2,340,912 was recognized in 2014 as a result of these regulations. During the year 2015, no amounts were received by the subsidiaries in relation to this transfer.
The effects of these items were recognized as a reduction of the cost of electric energy under Amounts from CDE/CCEE against other receivables under Receivables – amounts from CDE/CCEE (note 12), in accordance with IAS 20 Accounting for Government Grants and Disclosure of Government Assistance.
In addition to the amounts from CDE, the subsidiaries are receiving, through the CCEE, the financial excess of the Energy Reserve Account - CONER, regulated by REN 613/2014. The amount of R$ 107,827 is recognized in line item "System service charge – ESS" in 2015 (R$ 437,297 in 2014).
The table below shows the summary of the amounts from CDE per distributor controlled by the Company, recognized in 2014:
119
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
2014 | |||||||||
Electricity purchased for resale |
|
Electricity network usage charge |
|
Total | |||||
Involuntary exposure |
Quotas and hydrological risk |
Electricity purchased - regulated market |
ESS |
||||||
CPFL Paulista |
849,901 |
(6,241) |
229,335 |
6 |
1,073,001 | ||||
CPFL Piratininga |
391,476 |
(357) |
354,079 |
2 |
745,200 | ||||
CPFL Santa Cruz |
66,403 |
13 |
20,344 |
- |
86,760 | ||||
CPFL Leste Paulista |
6,580 |
4 |
(4) |
(10) |
6,570 | ||||
CPFL Sul Palista |
6 |
5 |
11 |
- |
22 | ||||
CPFL Jaguari |
(1,539) |
(48) |
2,001 |
- |
414 | ||||
CPFL Mococa |
- |
2 |
- |
- |
2 | ||||
RGE |
428,054 |
(98) |
986 |
3 |
428,945 | ||||
Total |
1,740,881 |
(6,720) |
606,752 |
1 |
2,340,912 |
28.2 Generating Scaling Factor (“GSF”)
The hydroelectric power plants (UHE’s) and some small hydroelectric plants (PCH’s) hooked up to the National Interconnected System (SIN) participate in the Energy Reallocation Mechanism - MRE, which functions as a water risks pool for such plants, since plants generate energy at the command of the National System Operator (ONS) and/or availability of water in the reservoirs. In other words, they have no direct control over the timing and amount of water for generation of energy. Participation in this mechanism is proportional to the Physical Guarantee of each plant, which also constitutes the energy sale contract limit for each plant.
When the group of plants in the MRE generate more energy than the sum of their physical guarantees, denominated Secondary Energy, this excess is settled at the Difference Settlement Price (PLD) and prorated among the participating plants in proportion to their physical guarantees. On the other hand, if the generation of the group of plants is less than the sum of their physical guarantees, there will be a Generating Scaling Factor (“GSF”), with this power deficit also allocated in proportion to the physical guarantee of each plant and thus exposing it to the spot market, with the energy shortfall being valued at the PLD.
In the years from 2005 to 2012, the annual GSF of the MRE was above 100%, thus not burdening the hydroelectric power generators. Beginning in 2013, however, this scenario began to change, and became aggravated in the years 2014 and 2015, when it was below 100% throughout the year.
Renegotiation of the Hydrologic Risk
Law No. 13.203 of December 8, 2015 and ANEEL Normative Resolution No. 684 of December 11, 2015, established the conditions for renegotiation of the hydrologic risk for generation of electric energy for the agents participating in the MRE, with effect beginning 2015, attributing distinct rules for the contracts signed in the Regulated Contracting Environment (“ACR”) and the Free Contracting Environment (“ACL”).
Renegotiation of the hydrologic risk of the portion relating to the ACR came about through transfer of the hydrologic (i.e. supply of water in reservoirs) risk to consumers by means of payment of a risk premium by the hydroelectric power generators of R$ 9.50/MWh up to the end of the contracts for sale of electric power or the end of the concession, whichever period is shorter. Payment of this premium and the GSF transfer will go to the CCRBT.
For the portion of the hydrologic risk relating to the ACL, the risk will be mitigating by the purchase of Reserve Energy, with the rights and obligations associated with this acquisition assumed by the hydroelectric power generators. In this case, the risk premium was equal to the price of R$ 2.10/MWh for the energy reserve intended for its use, which will be contributed to the Reserve Energy Account (CONER).
The generators that adhered to the renegotiation should terminate the lawsuits against the grantor of the concessions, and pay a premium of risk related to the transfer of the GSF risk to CCRBT for 2015.
In December 2015, subsidiaries Ceran, CPFL Jaguari Geração (Paulista Lajeado) and CPFL Renováveis, as well as joint ventures ENERCAN and Chapecoense signed on to the renegotiations of their ACR contracts, and also cancelled their lawsuits. Therefore, the hydrologic risks were transferred to the CCRBT.
120
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
( 29 ) OPERATING COSTS AND EXPENSES
Parent company | |||
Operating Expenses | |||
General | |||
2015 |
2014 | ||
Personnel |
19,816 |
18,142 | |
Materials |
74 |
28 | |
Third party services |
7,209 |
5,050 | |
Depreciation and amortization |
170 |
173 | |
Others |
2,642 |
2,783 | |
Leases and rentals |
121 |
138 | |
Publicity and advertising |
142 |
237 | |
Legal, judicial and indemnities |
1,686 |
865 | |
Donations, contributions and subsidies |
105 |
813 | |
Others |
589 |
729 | |
Total |
29,911 |
26,175 |
121
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated | |||||||||||||||||||||||
|
|
|
Cost of services rendered to third parties |
Operating Expenses |
Total | ||||||||||||||||||
Cost of operation |
Selling |
General and administrative |
Others |
||||||||||||||||||||
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
2015 |
2014 | ||||||||||||
Personnel |
596,021 |
528,056 |
28 |
2 |
123,812 |
110,759 |
219,348 |
213,654 |
- |
- |
939,209 |
852,471 | |||||||||||
Private pension plans |
60,184 |
48,165 |
- |
- |
- |
- |
- |
- |
- |
- |
60,184 |
48,165 | |||||||||||
Materials |
123,853 |
102,959 |
1,008 |
1,286 |
5,249 |
4,658 |
9,825 |
8,925 |
- |
- |
139,935 |
117,827 | |||||||||||
Third party services |
187,080 |
172,422 |
2,777 |
2,511 |
128,022 |
109,264 |
241,115 |
241,826 |
- |
- |
558,994 |
526,022 | |||||||||||
Depreciation and amortization |
870,427 |
767,117 |
- |
- |
21,826 |
32,049 |
84,985 |
75,779 |
- |
- |
977,238 |
874,946 | |||||||||||
Cost of infrastructure construction |
- |
- |
1,045,301 |
942,267 |
- |
- |
- |
- |
- |
- |
1,045,301 |
942,267 | |||||||||||
Others |
69,633 |
53,640 |
(12) |
(13) |
185,673 |
145,968 |
308,226 |
233,446 |
357,653 |
328,000 |
921,173 |
761,041 | |||||||||||
Collection fees |
- |
264 |
- |
- |
56,990 |
54,070 |
- |
- |
- |
- |
56,990 |
54,334 | |||||||||||
Allowance for doubtful debts |
- |
- |
- |
- |
126,879 |
83,699 |
- |
- |
- |
- |
126,879 |
83,699 | |||||||||||
Leases and rentals |
31,687 |
29,331 |
- |
- |
(4) |
- |
16,874 |
15,627 |
- |
- |
48,558 |
44,958 | |||||||||||
Publicity and advertising |
339 |
736 |
- |
- |
34 |
127 |
9,565 |
17,262 |
- |
- |
9,938 |
18,125 | |||||||||||
Legal, judicial and indemnities |
10 |
- |
- |
- |
- |
- |
263,453 |
192,464 |
- |
- |
263,463 |
192,464 | |||||||||||
Donations, contributions and subsidies |
- |
- |
- |
- |
16 |
6,579 |
3,418 |
4,204 |
- |
- |
3,434 |
10,783 | |||||||||||
Inspection fee |
- |
- |
- |
- |
- |
- |
- |
- |
- |
20,894 |
- |
20,894 | |||||||||||
Gain (loss) on disposal, retirement and other noncurrent assets |
- |
- |
- |
- |
- |
- |
- |
- |
16,309 |
20,726 |
16,309 |
20,726 | |||||||||||
Amortization of concession intangible asset |
- |
- |
- |
- |
- |
- |
- |
- |
302,665 |
285,018 |
302,665 |
285,018 | |||||||||||
Financial compensation for use of water resources |
13,768 |
14,835 |
- |
- |
- |
- |
- |
- |
- |
- |
13,768 |
14,835 | |||||||||||
Impairment |
- |
- |
- |
- |
- |
- |
- |
- |
38,956 |
- |
38,956 |
- | |||||||||||
Others |
23,829 |
8,474 |
(12) |
(13) |
1,759 |
1,493 |
14,916 |
3,889 |
(277) |
1,361 |
40,214 |
15,204 | |||||||||||
Total |
1,907,197 |
1,672,359 |
1,049,101 |
946,052 |
464,583 |
402,698 |
863,499 |
773,630 |
357,653 |
328,000 |
4,642,033 |
4,122,739 |
122
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
( 30 ) FINANCE INCOME (EXPENSE)
Parent company |
Consolidated | ||||||
2015 |
2014 |
2015 |
2014 | ||||
Finance Income |
|||||||
Income from financial investments |
72,158 |
116,487 |
472,745 |
430,714 | |||
Late payment interest and fines |
3 |
- |
215,923 |
146,992 | |||
Adjustment for inflation of tax credits |
6,413 |
6,878 |
57,580 |
25,309 | |||
Adjustment for inflation of escrow deposits |
35 |
15 |
84,683 |
74,500 | |||
Adjustment for inflation and exchange rate changes |
- |
- |
121,609 |
49,144 | |||
Adjustment of expected cash flow (note 11) |
- |
- |
414,800 |
104,642 | |||
Discount on purchase of ICMS credit |
- |
- |
13,027 |
17,382 | |||
PIS and COFINS on other finance income |
(2,496) |
0 |
(52,849) |
- | |||
PIS and COFINS on interest on capital |
(6,711) |
(12,699) |
(6,941) |
(12,809) | |||
Adjustments to the concession financial asset (note 8) |
- |
- |
162,786 |
- | |||
Other |
5,451 |
7,175 |
74,685 |
54,563 | |||
Total |
74,854 |
117,855 |
1,558,047 |
890,436 | |||
Finance costs |
|||||||
Interest on debts |
(61,398) |
(143,039) |
(1,725,252) |
(1,542,593) | |||
Adjustment for inflation and exchange rate changes |
(30,332) |
(34) |
(686,575) |
(247,591) | |||
Adjustments to the concession financial liability (note 8) |
- |
- |
(1,573) |
- | |||
(-) Capitalized interest |
- |
- |
45,568 |
12,269 | |||
Use of public asset |
- |
- |
(16,028) |
(10,649) | |||
Others |
(6,072) |
(247) |
(188,707) |
(191,325) | |||
Total |
(97,802) |
(143,319) |
(2,572,567) |
(1,979,890) | |||
Finance expense, net |
(22,948) |
(25,464) |
(1,014,520) |
(1,089,454) |
Interest was capitalized at an average rate of 10.25% p.a. in 2015 (8.12% p.a. in 2014) on qualifying assets, in accordance with CPC 20 (R1) and IAS 23.
In line items of Adjustment for inflation and exchange rate changes, the expense includes the effects of gains of R$ 1,514,439 (R$ 159,653 in 2014) on derivative instruments (note 35).
( 31 ) SEGMENT INFORMATION
The segregation of the Company’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 based on similar market transactions. Note 1 presents the subsidiaries in accordance with their areas of operation and provides further information on each subsidiary and its business area and segment.
The information segregated by segment is presented below, in accordance with the criteria established by the Company’s Management:
123
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
2015 |
Distribution |
Generation (conventional source) |
Generation (renewable source) |
Commerciali-zation |
Services |
Others (*) |
Elimination |
Total | |||||||
Net operating revenue |
16,551,879 |
572,553 |
1,262,297 |
1,716,348 |
55,547 |
47,246 |
- |
20,205,869 | |||||||
(-) Intersegment revenues |
22,318 |
411,038 |
335,979 |
82,544 |
239,088 |
3,136 |
(1,094,101) |
- | |||||||
Income from electric energy service |
1,163,426 |
542,738 |
460,772 |
124,933 |
30,617 |
(70,396) |
- |
2,252,090 | |||||||
Finance income |
1,155,428 |
110,018 |
131,354 |
42,840 |
44,098 |
74,310 |
- |
1,558,047 | |||||||
Finance cost |
(1,278,258) |
(549,286) |
(599,303) |
(38,386) |
(4,858) |
(102,477) |
- |
(2,572,567) | |||||||
Profit (loss) before taxes |
1,040,597 |
320,354 |
(7,176) |
129,386 |
69,857 |
(98,563) |
- |
1,454,454 | |||||||
Income tax and social contribution |
(414,633) |
(37,570) |
(49,222) |
(41,282) |
(18,232) |
(18,239) |
- |
(579,177) | |||||||
Profit (loss) for the year |
625,964 |
282,783 |
(56,398) |
88,104 |
51,625 |
(116,802) |
- |
875,277 | |||||||
Total assets (**) |
22,138,086 |
4,575,230 |
11,868,943 |
714,781 |
317,845 |
917,586 |
- |
40,532,471 | |||||||
Purchases of PP&E and intangible assets |
868,495 |
6,910 |
493,584 |
2,432 |
39,176 |
17,199 |
- |
1,427,796 | |||||||
Depreciation and amortization |
(587,059) |
(131,969) |
(540,578) |
(4,534) |
(12,633) |
(3,128) |
- |
(1,279,902) | |||||||
2014 |
|||||||||||||||
Net operating revenue |
13,658,786 |
722,623 |
982,613 |
1,790,822 |
151,037 |
61 |
- |
17,305,942 | |||||||
(-) Intersegment revenues |
19,668 |
467,761 |
397,630 |
387,788 |
193,483 |
- |
(1,466,329) |
- | |||||||
Income from electric energy service |
1,602,519 |
482,214 |
231,280 |
205,108 |
45,072 |
(26,119) |
- |
2,540,073 | |||||||
Finance income |
552,918 |
84,884 |
98,991 |
29,543 |
6,380 |
117,720 |
- |
890,436 | |||||||
Finance cost |
(849,774) |
(482,671) |
(464,713) |
(29,104) |
(10,221) |
(143,407) |
- |
(1,979,890) | |||||||
Profit (loss) before taxes |
1,305,663 |
144,112 |
(134,442) |
205,547 |
41,230 |
(51,806) |
- |
1,510,304 | |||||||
Income tax and social contribution |
(461,264) |
(36,291) |
(33,645) |
(69,543) |
(12,687) |
(10,430) |
- |
(623,860) | |||||||
Profit (loss) for the year |
844,400 |
107,820 |
(168,087) |
136,003 |
28,543 |
(62,236) |
- |
886,444 | |||||||
Total assets (**) |
16,724,269 |
4,414,196 |
11,647,374 |
507,960 |
828,184 |
1,022,454 |
- |
35,144,436 | |||||||
Purchases of PP&E and intangible assets |
702,386 |
14,419 |
250,803 |
3,531 |
90,707 |
22 |
- |
1,061,868 | |||||||
Depreciation and amortization |
(577,753) |
(136,447) |
(432,267) |
(4,471) |
(8,760) |
(265) |
- |
(1,159,964) |
(*) Others – refer basically to assets and transactions which are not related to any of the identified segments.
(**) Intangible assets, net of amortization, were allocated to their respective segments.
At December 31, 2015 a loss was recognized for impairment of the assets relating to subsidiaries CPFL Telecom and CPFL Total, in the respective amounts of R$ 33,119 and R$ 5,837, presented in “Others” and "Services" segments, respectively.
( 32 ) RELATED_PARTY TRANSACTIONS
The Company’s controlling shareholders are as follows:
· ESC Energia S.A.
Company controlled by the Camargo Corrêa group, with operations in diversified segments, such as construction, cement, footwear, textiles, aluminum and highway concessions, among others.
· Energia São Paulo Fundo de Investimento em Ações
Company controlled by the following pension funds: (a) Fundação CESP, (b) Fundação SISTEL de Seguridade Social, (c) Fundação Petrobras de Seguridade Social - PETROS, and (d) Fundação SABESP de Seguridade Social - SABESPREV.
· Bonaire Participações S.A.
Company controlled by Energia São Paulo Fundo de Investimento em Ações.
· BB Carteira Livre I - Fundo de Investimento em Ações
Fund controlled by PREVI - Caixa de Previdência dos Funcionários do Banco do Brasil.
The direct and indirect interest in operating subsidiaries are described in note 1.
Controlling shareholders, associates companies, joint ventures and entities under common control that in some way exercise significant influence over the Company are considered to be related parties.
The main transactions are listed below:
a) Bank balances and short-term investments – refer mainly to bank balances and short-term investments with financial institutions, as mentioned in note 5. The Company and its subsidiaries also have an Exclusive Investment Fund.
124
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
b) Borrowings and Debentures and Derivatives - refer to borrowings from financial institutions under the conditions described in notes 17 and 18. The Company is also the guarantor of certain borrowings raised by its subsidiaries and joint ventures, as described in notes 17 and 18.
c) Other Financial Transactions – the expense amounts are bank costs, collection and bookkeeping expenses.
d) Purchase and sale of energy and charges - refer basically to energy purchased or sold by distribution, commercialization and generation subsidiaries through short or long-term agreements and tariffs for the use of the distribution system (TUSD). Such transactions, when conducted in the free market, are carried out under conditions considered by the Company as similar to market conditions at the time of the trading, according to internal policies previously established by the Company’s management. When conducted in the regulated market, the prices charged are set through mechanisms established by the regulatory authority.
e) Intangible assets, Property, plant and equipment, Materials and Service – refer to the purchase of equipment, cables and other materials for use in distribution and generation activities and contracting of services such as construction and information technology consultancy.
f) Advances – refer to advances for investments in research and development.
g) Intragroup loans – refer to (i) contracts with the joint venture EPASA, under contractual conditions of 113.5% of the CDI, maturing in January 2017; (ii) contracts with the non-controlling shareholder of the subsidiary CPFL Renováveis, with maturity defined for the date of distribution of earnings of the indirect subsidiary to its shareholders and remuneration of 8% p.a. + IGP-M (General Market Price Index).
Certain subsidiaries have supplementary retirement plan maintained with Fundação CESP and offered to the employees of the subsidiaries. These plans hold investments in Company’s shares (note 19).
To ensure that commercial transactions with related parties are conducted under usual market conditions, the Company set up a “Related Parties Committee”, comprising representatives of the controlling shareholders, responsible for analyzing the main transactions with related parties.
The subsidiaries CPFL Paulista, CPFL Piratininga and CPFL Geração renegotiated with the joint ventures BAESA, Chapecoense and ENERCAN the extension of the original maturities of the energy purchase bills, previously from July to December 2015, to January 2016.
The total compensation of key management personnel in 2015, in accordance with CVM Decision 560/2008, was R$ 43,208 (R$ 44,214 in 2014). This amount comprises R$ 44,061 (R$ 39,928 in 2014) in respect of short-term benefits, R$ 1,087 (R$ 1,043 in 2014) of post-employment benefits and a reversal of provision of R$ 1,940 (provision of R$ 3,243 in 2014) for other long-term benefits, and refers to the amount recognized on an accrual basis.
Transactions between related parties involving controlling shareholders, entities under common control or with significant influence and joint ventures are as follows:
125
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated | |||||||||||||||
ASSETS |
|
LIABILITIES |
|
INCOME |
EXPENSES | ||||||||||
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 |
2015 |
2014 |
2015 |
2014 | ||||||||
Bank balances and short-term investments |
|||||||||||||||
Banco Bradesco S.A.(**) |
4,097,770 |
- |
1 |
- |
351,086 |
- |
312 |
- | |||||||
Banco do Brasil S.A. |
126,036 |
161,832 |
- |
- |
28,466 |
12,126 |
4 |
2 | |||||||
Borrowings, debentures and derivatives (*) |
|||||||||||||||
Banco Bradesco S.A.(**) |
- |
- |
667,335 |
- |
- |
- |
85,505 |
- | |||||||
Banco do Brasil S.A. |
- |
- |
3,727,088 |
4,487,092 |
- |
- |
459,889 |
485,400 | |||||||
BNP Paribas (**) |
58,478 |
- |
322,465 |
- |
- |
- |
8,978 |
- | |||||||
Other financial transactions |
|||||||||||||||
Banco Bradesco S.A.(**) |
1,344 |
- |
1,259 |
- |
166 |
- |
4,174 |
- | |||||||
Banco do Brasil S.A. |
- |
- |
879 |
- |
80 |
- |
5,941 |
6,304 | |||||||
Advances |
|||||||||||||||
BAESA – Energética Barra Grande S.A. |
- |
- |
790 |
826 |
- |
- |
- |
- | |||||||
Foz do Chapecó Energia S.A. |
- |
- |
1,120 |
1,170 |
- |
- |
- |
- | |||||||
ENERCAN - Campos Novos Energia S.A. |
- |
- |
1,377 |
1,436 |
- |
- |
- |
- | |||||||
EPASA - Centrais Elétricas da Paraiba |
- |
- |
503 |
526 |
- |
- |
- |
- | |||||||
Energy purchase and sale and charges |
|||||||||||||||
Afluente Transmissão de Energia Elétrica S.A. |
- |
- |
27 |
40 |
- |
- |
1,426 |
1,342 | |||||||
Aliança Geração de Energia S.A |
- |
- |
1,364 |
- |
1 |
- |
34,063 |
- | |||||||
Arizona 1 Energia Renovável S.A |
- |
- |
- |
- |
- |
- |
883 |
826 | |||||||
Baguari I Geração de Energia Elétrica S.A. |
- |
- |
6 |
5 |
- |
- |
268 |
252 | |||||||
Braskem S.A. |
- |
- |
- |
- |
- |
694 |
- |
- | |||||||
Caetite 2 Energia Renovável S.A. |
- |
- |
- |
- |
- |
- |
810 |
757 | |||||||
Caetité 3 Energia Renovável S.A. |
- |
- |
- |
- |
- |
- |
817 |
765 | |||||||
Calango 1 Energia Renovável S.A. |
- |
- |
- |
- |
- |
- |
977 |
914 | |||||||
Calango 2 Energia Renovável S.A. |
- |
- |
- |
- |
- |
- |
834 |
782 | |||||||
Calango 3 Energia Renovável S.A. |
- |
- |
- |
- |
- |
- |
977 |
914 | |||||||
Calango 4 Energia Renovável S.A. |
- |
- |
- |
- |
- |
- |
907 |
848 | |||||||
Calango 5 Energia Renovável S.A. |
- |
- |
- |
- |
- |
- |
963 |
901 | |||||||
Companhia de Eletricidade do Estado da Bahia – COELBA |
655 |
833 |
- |
- |
14,491 |
12,606 |
46 |
- | |||||||
Companhia Energética de Pernambuco - CELPE |
587 |
920 |
- |
- |
7,062 |
6,304 |
206 |
- | |||||||
Companhia Energética do Rio Grande do Norte - COSERN |
227 |
280 |
- |
- |
2,580 |
2,404 |
- |
1,063 | |||||||
Eldorado Brasil Celulose S.A. |
- |
- |
- |
- |
1,050 |
- |
- | ||||||||
Companhia Hidrelétrica Teles Pires S.A. |
- |
- |
1,548 |
- |
17 |
- |
29,915 |
- | |||||||
ELEB Equipamentos Ltda |
- |
- |
- |
- |
4,036 |
- |
- |
- | |||||||
Embraer |
- |
- |
- |
- |
26,615 |
- |
- |
- | |||||||
Energética Águas da Pedra S.A. |
- |
- |
130 |
117 |
2 |
- |
4,260 |
3,959 | |||||||
Estaleiro Atlântico Sul S.A. |
- |
- |
- |
- |
19,026 |
7,584 |
- |
- | |||||||
Goiás Sul Geração de Enegia S.A. |
- |
- |
- |
- |
- |
- |
166 |
155 | |||||||
InterCement Brasil S.A |
- |
- |
- |
- |
1 |
- |
- |
- | |||||||
Itapebi Geração de Energia S.A |
- |
- |
- |
- |
1 |
- |
- |
- | |||||||
Mel 2 Energia Renovável S.A. |
- |
- |
- |
- |
- |
- |
632 |
617 | |||||||
NC ENERGIA S.A. |
- |
- |
- |
- |
5,336 |
1,837 |
- |
- | |||||||
Norte Energia S.A. |
1 |
- |
- |
- |
1 |
- |
- |
- | |||||||
Rio PCH I S.A. |
- |
- |
242 |
217 |
- |
- |
8,004 |
7,441 | |||||||
Samarco Mineração S.A. |
- |
- |
- |
- |
1 |
- |
- |
- | |||||||
Santista Jeanswear S/A |
- |
- |
- |
- |
4,491 |
- |
- |
- | |||||||
SE Narandiba S.A. |
- |
- |
- |
- |
- |
- |
166 |
142 | |||||||
Serra do Facão Energia S.A. - SEFAC |
- |
- |
576 |
470 |
- |
- |
20,916 |
19,837 | |||||||
Tavex Brasil S.A |
- |
- |
- |
- |
- |
8,087 |
- |
- | |||||||
Termopernambuco S.A. |
- |
- |
- |
- |
3 |
- |
- |
- | |||||||
ThyssenKrupp Companhia Siderúrgica do Atlântico |
- |
- |
- |
188 |
37,238 |
557 |
6,965 |
7,056 | |||||||
Vale Energia S.A. |
7,843 |
7,371 |
- |
- |
92,353 |
87,077 |
- |
- | |||||||
Vale S.A. |
- |
- |
- |
- |
- |
- |
695 |
7,483 | |||||||
BAESA – Energética Barra Grande S.A. |
- |
- |
88,441 |
89,202 |
60,080 |
- |
111,541 |
104,491 | |||||||
Foz do Chapecó Energia S.A. |
- |
1,430 |
142,596 |
172,804 |
4,996 |
16,841 |
330,675 |
318,140 | |||||||
ENERCAN - Campos Novos Energia S.A. |
667 |
583 |
140,496 |
154,678 |
23,283 |
6,702 |
244,102 |
226,595 | |||||||
EPASA - Centrais Elétricas da Paraiba |
- |
- |
19,807 |
28,632 |
15,243 |
24,363 |
168,187 |
214,978 | |||||||
|
|||||||||||||||
Intangible assets, property, plant and equipment, materials and service |
|
||||||||||||||
Banco Bradesco S.A.(**) |
- |
- |
2 |
- |
- |
- |
19 |
- | |||||||
Banco do Brasil S A |
- |
- |
- |
- |
- |
- |
170 |
163 | |||||||
BRASKEM Qpar S.A. |
- |
- |
- |
- |
- |
15 |
- |
- | |||||||
CCDI 29 Empreendimento Imobiliário Ltda |
- |
- |
- |
- |
- |
31,500 |
- |
- | |||||||
Companhia de Saneamento Básico do Estado de São Paulo - SABESP |
65 |
11 |
42 |
35 |
1,034 |
50 |
31 |
4 | |||||||
Companhia Brasileira de Soluções e Serviços CBSS - Alelo (**) |
- |
- |
- |
- |
- |
- |
576 |
- | |||||||
Companhia de Eletricidade do Estado da Bahia – COELBA |
- |
- |
- |
- |
- |
- |
50 |
- | |||||||
Companhia Energética do Rio Grande do Norte - COSERN |
- |
- |
- |
- |
- |
19 |
- |
- | |||||||
Concessionária do Sistema Anhanguera - Bandeirantes S.A. (**) |
- |
- |
- |
- |
- |
- |
9 |
- | |||||||
Estaleiro Atlântico Sul S.A. |
- |
- |
- |
- |
- |
12 |
- |
- | |||||||
Ferrovia Centro-Atlântica S.A. |
- |
- |
- |
- |
- |
- |
22 |
- | |||||||
HM 14 Empreendimento Imobiliário SPE Ltda |
14 |
- |
- |
- |
- |
- |
- |
- | |||||||
HM Engenharia e Construções S.A. |
- |
- |
- |
- |
272 |
24 |
- |
- | |||||||
Indústrias Romi S.A. |
- |
4 |
- |
- |
68 |
45 |
- |
- | |||||||
InterCement Brasil S.A |
- |
- |
- |
- |
26 |
60 |
- |
- | |||||||
Logum Logística S.A. |
- |
- |
- |
- |
55 |
- |
- |
- | |||||||
LUPATECH |
- |
- |
- |
- |
- |
- |
2 |
- | |||||||
Mapfre Seguros Gerais S.A. (**) |
- |
- |
- |
- |
4 |
- |
1 |
- | |||||||
MRS Logística S.A |
- |
119 |
- |
- |
- |
119 |
- |
- | |||||||
Randon |
- |
- |
- |
76 |
- |
- |
- |
76 | |||||||
Rodovias Integradas do Oeste S.A. (**) |
- |
- |
12 |
- |
- |
- |
- |
- | |||||||
Samm - Soc. Atic. Multimídia Ltda (**) |
- |
- |
- |
- |
1,463 |
- |
- |
- | |||||||
Santista Jeanswear S/A (**) |
- |
- |
- |
- |
21 |
- |
- |
- | |||||||
TOTVS S.A. |
- |
- |
3 |
2 |
- |
- |
44 |
70 | |||||||
Ultrafértil S.A |
- |
149 |
- |
- |
868 |
226 |
- |
- | |||||||
Vale Fertilizantes S.A |
39 |
18 |
- |
- |
45 |
36 |
- |
- | |||||||
BAESA – Energética Barra Grande S.A. |
- |
- |
- |
- |
1,354 |
1,465 |
- |
- | |||||||
Foz do Chapecó Energia S.A. |
- |
- |
- |
- |
1,483 |
1,491 |
- |
- | |||||||
ENERCAN - Campos Novos Energia S.A. |
- |
- |
- |
- |
1,354 |
1,465 |
- |
- | |||||||
EPASA - Centrais Elétricas da Paraíba S.A. |
1,104 |
393 |
- |
- |
720 |
715 |
- |
- | |||||||
Intragroup loans |
|||||||||||||||
EPASA - Centrais Elétricas da Paraíba S.A. |
76,586 |
94,385 |
- |
- |
14,123 |
10,629 |
- |
- | |||||||
Noncontrolling shareholder - CPFL Renováveis |
7,680 |
6,281 |
- |
- |
1,475 |
864 |
- |
- | |||||||
Dividends and interest on capital |
|||||||||||||||
BAESA – Energética Barra Grande S.A. |
20 |
96 |
- |
- |
- |
- |
- |
- | |||||||
Chapecoense Geração S.A. |
28,417 |
12,128 |
- |
- |
- |
- |
- |
- | |||||||
ENERCAN - Campos Novos Energia S.A. |
30,905 |
24,816 |
- |
- |
- |
- |
- |
- | |||||||
EPASA - Centrais Elétricas da Paraiba |
29,933 |
14,891 |
- |
- |
- |
- |
- |
- | |||||||
(*) At value cost | |||||||||||||||
(**) Related parties since 2015 |
126
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
( 33 ) INSURANCE
The subsidiaries maintain insurance policies with coverage based on specialized advice and takes into account the nature and degree of risk. The amounts are considered sufficient to cover any significant losses on assets and/or responsibilities. The principal insurance policies in the financial statements are:
Consolidated | |||||
Description |
Type of cover |
2015 |
2014 | ||
Noncurrent assets |
Fire, lightning, explosion, machinery breakdown, electrical damage and engineering risk |
8,634,344 |
6,810,183 | ||
Transport |
National transport |
319,834 |
299,487 | ||
Stored Materials |
Fire, lightning, explosion and robbery |
171,585 |
170,300 | ||
Automobiles |
Comprehensive cover |
6,544 |
4,962 | ||
Civil Liability |
Electric energy distributors |
118,000 |
168,000 | ||
Personnel |
Group life and personal accidents |
202,989 |
193,020 | ||
Others |
Operational risks and others |
323,200 |
279,897 | ||
Total |
9,776,496 |
7,925,850 | |||
Information not audited by the independent auditors. |
( 34 ) RISK MANAGEMENT
The business of the Company and its subsidiaries comprise mainly the generation, commercialization and distribution of electric energy. As public utilities concessionaires, the activities and/or tariffs of its principal subsidiaries are regulated by ANEEL.
Risk management structure
The Board of Directors is responsible for directing the way the business is run, which includes monitoring of business risks, exercised by means of the corporate risk management model used by the Company. The responsibilities of the Executive Board are to develop the mechanisms for measuring the impact of the exposure and probability of its occurrence, overseeing the implementation of risk mitigation actions and informing the Board of Directors. It is assisted in this process by: i) the Executive Risk Management Committee, whose mission is to assist in identifying the main business risks, analyzing measurement of the impact and probability and assessing the mitigation actions taken; ii) the Risk Management and Internal Controls Division, responsible for coordination of the process for risk management, developing and maintaining updated methodologies for Corporate Management of Risks that involve the identification, measurement, monitoring and reporting of risks to which the CPFL Group is exposed.
The risk management policy was established to identify, analyze and address the risks faced by the Company and its subsidiaries, and includes reviewing the model adopted whenever necessary to reflect changes in market conditions and in the Groups’ activities, with a view to developing an environment of disciplined and constructive control.
In its supervisory role, the Company’s Board of Directors also counts on the support of the Management Process and Risks Committee to provide guidance for the Internal Audit, Risk Management and Compliance work. The Internal Audit conducts both periodic and “ad hoc” reviews in order to ensure alignment of the processes to guidelines and strategies set by the shareholders and Management.
The Fiscal Council is responsible for, among other attributions, certifying that Management has means to identify the risks on the preparation and disclosure of the financial statements to which the Company is exposed and for monitoring the effectiveness of the control environment.
The main market risk factors affecting the businesses are as follows:
Exchange rate risk: this risk derives from the possibility of the Company and its subsidiaries incurring losses and cash constraints due to fluctuations in exchange rates, increasing the balances of liabilities denominated in foreign currency and portion of the revenue of the joint venture ENERCAN from electric energy sale agreements with annual restatement of part of the tariff based on variation in the US$. The exposure in relation to raising funds in foreign currency is largely covered by contracting swap transactions,
127
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Interest rate risk: this risk derives from the possibility of the Company and its subsidiaries incurring losses due to fluctuations in interest rates that increase finance costs related to borrowings and debentures. The subsidiaries have tried to increase the number of fixed rate borrowings or borrowings tied to indexes with lower rates and little fluctuation in the short and long term. The quantification of this risk is presented in note 35.
Credit risk: this risk arises from the possibility of the subsidiaries incurring losses resulting from difficulties in collecting amounts billed to customers. This risk is managed by the sales and services segments through norms and guidelines applied in terms of the approval, guarantees required and monitoring of the operations. In the distribution segment, even though it is highly pulverized, the risk is managed through monitoring of defaults, collection measures and cutting off supply. In the generation segment there are contracts under the regulated environment (ACR) and bilateral agreements that call for the posting of guarantees.
Risk of under/overcontracting from distributors: risk inherent to the energy distribution business in the Brazilian market to which the distributors of the CPFL Group and all distributors in the market are exposed. Distributors are prevented from fully passing through the costs of their electric energy purchases in two situations: (i) volume of energy contracted above 105% of the energy demanded by consumers and (ii) level of contracts lower than 100% of such demanded energy. In the first case, the energy contracted above 105% is sold in the CCEE and is not passed through to consumers, that is, in PLD scenarios lower than the purchase price of these contracts, there is a loss for the concession. In the second case, the distributors are required to purchase energy at the PLD amount at the CCEE and do not have guarantees of full pass-through to the consumer tariffs, there is a penalty for insufficiency of contractual guarantee. These situations may be mitigated if the distributors are entitled to exposures or involuntary surpluses.
Market risk of commercialization companies: this risk arises from the possibility of commercialization companies incurring losses due to variations in the spot prices that will value the positions of energy surplus or deficit of its portfolio in the free market.
Risk of energy shortages: the energy sold by subsidiaries is primarily generated by hydropower plants. A prolonged period of low rainfall could result in a reduction in the volume of water in the power plants’ reservoirs, compromising the recovery of their volume, and resulting in losses due to the increase in the cost of purchasing energy or a reduction in revenue due to the introduction of comprehensive electric energy saving programs or other rationing programs, as in 2001.
The conditions for storage of the National Interconnected System (SIN) has improved in recent months, despite the low storage levels in the Northeast sub-system. The improvement in SIN storage conditions, associated with the reduced demand verified in recent months and the availability of thermoelectric power generation, have significantly reduced the likelihood of additional load cuts.
Risk of acceleration of debts: the Company has borrowing agreements and debentures with restrictive covenants normally applicable to these types of transactions, involving compliance with economic and financial ratios. These covenants are monitored and do not restrict the capacity to operate normally, if met at the contractual intervals or if prior agreement is obtained from the creditors for failure to meet.
Regulatory risk: The electric energy supplied tariffs charged to captive consumers by the distribution subsidiaries are set by ANEEL, at intervals established in the concession agreements entered into with the Federal Government and in accordance with the periodic tariff review methodology established for the tariff cycle. Once the methodology has been ratified, ANEEL establishes tariffs to be charged by the distributor to the final consumers. In accordance with Law 8,987/1995, the tariffs set shall ensure the economic and financial equilibrium of the concession agreement at the time of the tariff review, but could result in lower adjustments than expected by the electric energy distributors.
128
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Financial instruments risk management
The Company and its subsidiaries maintain operating and financial policies and strategies to protect the liquidity, safety and profitability of their assets. Accordingly, control and follow-up procedures are in place as regards the transactions and balances of financial instruments, for the purpose of monitoring the risks and current rates in relation to market conditions.
Risk management controls: In order to manage the risks inherent to the financial instruments and to monitor the procedures established by Management, the Company and its subsidiaries use Luna and Bloomberg software systems to calculate the mark to market, stress testing and duration of the instruments, and assess the risks to which the Company and its subsidiaries are exposed. Historically, the financial instruments contracted by the Company and its subsidiaries supported by these tools have produced adequate risk mitigation results. It must be stressed that the Company and its subsidiaries routinely contract derivatives, always with the appropriate levels of approval, only in the event of exposure that Management regards as a risk. The Company and its subsidiaries do not enter into transactions involving speculative derivatives.
( 35 ) FINANCIAL INSTRUMENTS
The main financial instruments, classified in accordance with the group’s accounting practices, are:
Consolidated | |||||||||||||||
December 31, 2015 |
December 31, 2014 | ||||||||||||||
Note |
Category |
Measurement |
Level (*) |
Carrying amount |
|
Fair value |
Carrying amount |
|
Fair value | ||||||
Assets |
|||||||||||||||
Cash and cash equivalents |
5 |
(a) |
(2) |
Level 1 |
4,353,488 |
4,353,488 |
2,593,650 |
2,593,650 | |||||||
Cash and cash equivalents |
5 |
(a) |
(2) |
Level 2 |
1,329,314 |
1,329,314 |
1,763,805 |
1,763,805 | |||||||
Securities |
(a) |
(2) |
Level 1 |
23,633 |
23,633 |
5,324 |
5,324 | ||||||||
Derivatives |
35 |
(a) |
(2) |
Level 2 |
2,269,932 |
2,269,932 |
608,176 |
608,176 | |||||||
Derivatives - Zero-cost collar |
35 |
(a) |
(2) |
Level 3 |
8,820 |
8,820 |
- |
- | |||||||
Concession financial asset - distribution |
11 |
(b) |
(2) |
Level 3 |
3,483,713 |
3,483,713 |
3,296,837 |
3,296,837 | |||||||
11,468,901 |
11,468,901 |
8,267,792 |
8,267,792 | ||||||||||||
Liabilities |
|||||||||||||||
Borrowings - principal and interest |
17 |
(c) |
(1) |
Level 2 (***) |
7,725,978 |
6,499,746 |
7,240,164 |
6,266,957 | |||||||
Borrowings - principal and interest |
17 (**) |
(a) |
(2) |
Level 2 |
6,936,808 |
6,936,808 |
3,438,212 |
3,438,212 | |||||||
Debentures - Principal and interest |
18 |
(c) |
(1) |
Level 2 (***) |
7,070,430 |
6,105,830 |
8,471,583 |
7,997,074 | |||||||
Derivatives |
35 |
(a) |
(2) |
Level 2 |
31,745 |
31,745 |
13,354 |
13,354 | |||||||
Derivatives - Zero-cost collar |
35 |
(a) |
(2) |
Level 3 |
2,440 |
2,440 |
- |
- | |||||||
21,767,402 |
19,576,570 |
19,163,313 |
17,715,598 | ||||||||||||
(*) Refers to the hierarchy for determination of fair value | |||||||||||||||
(**) As a result of the initial designation of this financial liability, the consolidated financial statements reported a gain of R$ 256,251 in 2015 (R$ 100,193 in 2014) | |||||||||||||||
(***) Only for disclosure purposes, according to CPC 40 (R1) / IFRS 7 | |||||||||||||||
Key |
|||||||||||||||
Category: |
Measurement: |
||||||||||||||
(a) - Measured at fair value through profit or loss |
(1) - Measured at amortized cost |
||||||||||||||
(b) - Available for sale |
(2) - Measured at fair value |
||||||||||||||
(c) - Other finance liabilities |
The financial instruments for which the carrying amounts approximate the fair values at the end of the reporting period, due to their nature, are:
· Financial assets: (i) consumers, concessionaires and licensees, (ii) leases, (iii) associates, subsidiaries and parent company, (iv) receivables – amounts from CDE/CCEE, (v) concession financial asset - transmission, (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) Nacional scientific and technological development fund - FNDCT, (vi) energy research company - EPE, (vii) collection agreement, (viii) reversal fund, (ix) payables for business combination, (x) tariff discount CDE and (xi) sector financial liability.
In addition, in 2015 there were no transfers between hierarchical levels of fair value.
a) Valuation 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.
129
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
O CPC 40 (R1) and IFRS 7 requires the classification in a three-level hierarchy for fair value measurement of financial instruments, based on observable and unobservable inputs related to the valuation of a financial instrument at the measurement date.
O CPC 40 (R1) and IFRS 7 also defines observable inputs as market data obtained from independent sources and unobservable inputs that reflects 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: inputs for the instruments that are not based on observable market data.
As the distribution subsidiaries have classified their concession financial asset as available-for-sale, the relevant factors for fair value measurement are not publicly observable. The fair value hierarchy classification is therefore level 3. The changes between years and the respective gains (losses) in profit for the year of R$ 414,800 (R$ 104,642 in 2014), and the main assumptions are described in note 11.
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 35 b.1.
The Company recognizes in “Investments at cost” in the 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 Company and its subsidiaries have the policy of using derivatives to reduce their risks of fluctuations in exchange and interest rates, without any speculative purposes. The Company and its subsidiaries have exchange rate derivatives compatible with the exchange rate risks net exposure, including all the assets and liabilities tied to exchange rate changes.
The derivative instruments entered into by the Company and its subsidiaries are currency or interest rate swaps with no leverage component, margin call requirements or daily or periodical adjustments. Furthermore, in 2015 subsidiary CPFL Geração contracted a zero-cost collar (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 at fair value, for accounting purposes (note 17). Other debts with terms different from the derivatives contracted as a hedge continue to be recognized at amortized cost. Furthermore, the Company and its subsidiaries do not adopt hedge accounting for derivative instruments.
At December 31, 2015, the Company and its subsidiaries had the following swap transactions, all traded on the over-the-counter market:
130
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Fair values (carrying amounts) |
||||||||||||||||
Company / strategy / counterparts |
Assets |
Liabilities |
Fair value, net |
Values at cost, net |
Gain (loss) on marking to market |
Currency / index |
Maturity range |
Notional | ||||||||
Derivatives to hedge debts designated at fair value |
||||||||||||||||
Exchange rate hedge |
||||||||||||||||
CPFL Energia |
||||||||||||||||
Santander |
70,153 |
- |
70,153 |
70,419 |
(266) |
dollar |
February 2016 |
200,000 | ||||||||
Santander |
- |
(402) |
(402) |
1,244 |
(1,646) |
dollar |
September 2016 |
187,750 | ||||||||
Bradesco |
- |
(578) |
(578) |
(172) |
(406) |
dollar |
June 2016 |
149,208 | ||||||||
70,153 |
(981) |
69,172 |
71,492 |
(2,319) |
||||||||||||
CPFL Paulista |
||||||||||||||||
Bank of America Merrill Lynch |
154,501 |
- |
154,501 |
150,005 |
4,496 |
dollar |
July 2016 |
156,700 | ||||||||
Morgan Stanley |
106,718 |
- |
106,718 |
107,938 |
(1,220) |
dollar |
September 2016 |
85,475 | ||||||||
Scotiabank |
42,946 |
- |
42,946 |
43,197 |
(252) |
dollar |
July 2016 |
49,000 | ||||||||
Citibank |
69,132 |
- |
69,132 |
77,079 |
(7,947) |
dollar |
March 2019 |
117,250 | ||||||||
Bank of Tokyo-Mitsubishi |
68,577 |
- |
68,577 |
77,152 |
(8,575) |
dollar |
March 2019 |
117,400 | ||||||||
Bank of America Merrill Lynch |
64,284 |
- |
64,284 |
69,553 |
(5,268) |
dollar |
September 2018 |
106,020 | ||||||||
Bank of America Merrill Lynch |
72,644 |
- |
72,644 |
78,536 |
(5,892) |
dollar |
March 2019 |
116,600 | ||||||||
J.P.Morgan |
36,320 |
- |
36,320 |
39,268 |
(2,948) |
dollar |
March 2019 |
58,300 | ||||||||
J.P.Morgan |
23,296 |
- |
23,296 |
26,278 |
(2,982) |
dollar |
December 2017 |
51,470 | ||||||||
J.P.Morgan |
21,801 |
- |
21,801 |
24,813 |
(3,012) |
dollar |
December 2017 |
53,100 | ||||||||
J.P.Morgan |
9,187 |
- |
9,187 |
10,584 |
(1,398) |
dollar |
January 2018 |
27,121 | ||||||||
HSBC |
19,696 |
- |
19,696 |
22,458 |
(2,763) |
dollar |
January 2018 |
54,214 | ||||||||
HSBC |
73,843 |
- |
73,843 |
82,167 |
(8,324) |
dollar |
January 2018 |
173,459 | ||||||||
J.P.Morgan |
23,500 |
- |
23,500 |
26,501 |
(3,000) |
dollar |
January 2018 |
67,938 | ||||||||
J.P.Morgan |
22,782 |
- |
22,782 |
26,867 |
(4,085) |
dollar |
January 2019 |
67,613 | ||||||||
Citibank |
56,759 |
- |
56,759 |
65,880 |
(9,122) |
dollar |
January 2020 |
156,600 | ||||||||
BNP Paribas |
15,594 |
- |
15,594 |
17,958 |
(2,364) |
euro |
January 2018 |
63,896 | ||||||||
Bank of Tokyo-Mitsubishi |
37,117 |
- |
37,117 |
50,467 |
(13,350) |
dollar |
February 2020 |
142,735 | ||||||||
J.P.Morgan |
13,490 |
- |
13,490 |
15,812 |
(2,323) |
dollar |
February 2018 |
41,100 | ||||||||
Bank of America Merrill Lynch |
155,157 |
- |
155,157 |
174,502 |
(19,345) |
dollar |
February 2018 |
405,300 | ||||||||
Bank of America Merrill Lynch |
63,912 |
- |
63,912 |
60,980 |
2,932 |
dollar |
October 2018 |
329,500 | ||||||||
1,151,256 |
- |
1,151,256 |
1,247,997 |
(96,741) |
||||||||||||
CPFL Piratininga |
||||||||||||||||
Scotiabank |
56,092 |
- |
56,092 |
56,421 |
(329) |
dollar |
July 2016 |
64,000 | ||||||||
Santander |
68,863 |
- |
68,863 |
70,063 |
(1,199) |
dollar |
July 2016 |
100,000 | ||||||||
Citibank |
69,132 |
- |
69,132 |
77,079 |
(7,947) |
dollar |
March 2019 |
117,250 | ||||||||
HSBC |
38,081 |
- |
38,081 |
41,233 |
(3,152) |
dollar |
April 2018 |
55,138 | ||||||||
J.P.Morgan |
38,117 |
- |
38,117 |
41,236 |
(3,119) |
dollar |
April 2018 |
55,138 | ||||||||
Citibank |
60,858 |
- |
60,858 |
70,954 |
(10,096) |
dollar |
January 2020 |
169,838 | ||||||||
BNP Paribas |
42,884 |
- |
42,884 |
49,385 |
(6,501) |
euro |
January 2018 |
175,714 | ||||||||
Bank of America Merrill Lynch |
7,459 |
- |
7,459 |
7,829 |
(370) |
dollar |
July 2016 |
40,000 | ||||||||
Bank of America Merrill Lynch |
10,941 |
- |
10,941 |
11,807 |
(866) |
dollar |
August 2016 |
84,250 | ||||||||
Scotiabank |
4,321 |
- |
4,321 |
6,480 |
(2,160) |
dollar |
August 2017 |
55,440 | ||||||||
396,748 |
- |
396,748 |
432,488 |
(35,740) |
||||||||||||
CPFL Santa Cruz |
||||||||||||||||
Santander |
14,407 |
- |
14,407 |
14,634 |
(227) |
dollar |
June 2016 |
20,000 | ||||||||
CPFL Sul Paulista |
||||||||||||||||
Santander |
15,847 |
- |
15,847 |
16,098 |
(250) |
dollar |
June 2016 |
22,000 | ||||||||
CPFL Jaguari |
||||||||||||||||
Santander |
22,331 |
- |
22,331 |
22,683 |
(353) |
dollar |
June 2016 |
31,000 | ||||||||
CPFL Geração |
||||||||||||||||
HSBC |
149,331 |
- |
149,331 |
157,133 |
(7,803) |
dollar |
March 2017 |
232,520 | ||||||||
RGE |
||||||||||||||||
Citibank |
136,246 |
- |
136,246 |
142,257 |
(6,011) |
dollar |
April 2017 |
128,590 | ||||||||
Bank of Tokyo-Mitsubishi |
29,835 |
- |
29,835 |
33,215 |
(3,380) |
dollar |
April 2018 |
36,270 | ||||||||
Bank of Tokyo-Mitsubishi |
134,314 |
- |
134,314 |
149,757 |
(15,443) |
dollar |
May 2018 |
168,346 | ||||||||
Citibank |
22,352 |
- |
22,352 |
24,856 |
(2,503) |
dollar |
May 2019 |
33,285 | ||||||||
HSBC |
18,077 |
- |
18,077 |
19,689 |
(1,613) |
dollar |
October 2017 |
32,715 | ||||||||
J.P.Morgan |
51,274 |
- |
51,274 |
58,921 |
(7,647) |
dollar |
February 2018 |
171,949 | ||||||||
J.P.Morgan |
28,065 |
- |
28,065 |
28,246 |
(182) |
dollar |
February 2016 |
100,000 | ||||||||
420,162 |
- |
420,162 |
456,941 |
(36,779) |
||||||||||||
CPFL Serviços |
||||||||||||||||
J.P.Morgan |
5,250 |
- |
5,250 |
5,504 |
(254) |
dollar |
October 2016 |
9,000 | ||||||||
CPFL Paulista Lajeado |
||||||||||||||||
Itaú |
4,749 |
- |
4,749 |
6,424 |
(1,675) |
dollar |
March 2018 |
35,000 | ||||||||
CPFL Brasil |
||||||||||||||||
Itaú |
2,989 |
- |
2,989 |
5,367 |
(2,378) |
dollar |
August 2018 |
45,360 | ||||||||
Subtotal |
2,253,222 |
(981) |
2,252,242 |
2,436,760 |
(184,518) |
|||||||||||
Derivatives to hedge debts not designated at fair value |
||||||||||||||||
Exchange rate hedge |
||||||||||||||||
CPFL Geração |
||||||||||||||||
Votorantim |
16,710 |
- |
16,710 |
16,963 |
(254) |
dollar |
December 2016 |
44,282 | ||||||||
Price index hedge |
||||||||||||||||
CPFL Geração |
||||||||||||||||
Santander |
- |
(713) |
(713) |
3,104 |
(3,817) |
IPCA |
April 2019 |
35,235 | ||||||||
J.P.Morgan |
- |
(713) |
(713) |
3,104 |
(3,817) |
IPCA |
April 2019 |
35,235 | ||||||||
- |
(1,427) |
(1,427) |
6,208 |
(7,635) |
||||||||||||
Interest rate hedge (1) |
||||||||||||||||
CPFL Paulista |
||||||||||||||||
Bank of America Merrill Lynch |
- |
(6,931) |
(6,931) |
(827) |
(6,105) |
CDI |
July 2019 |
660,000 | ||||||||
J.P.Morgan |
- |
(3,967) |
(3,967) |
(305) |
(3,662) |
CDI |
February 2021 |
300,000 | ||||||||
Votorantim |
- |
(1,291) |
(1,291) |
(98) |
(1,193) |
CDI |
February 2021 |
100,000 | ||||||||
Santander |
- |
(1,351) |
(1,351) |
(103) |
(1,248) |
CDI |
February 2021 |
105,000 | ||||||||
- |
(13,541) |
(13,541) |
(1,333) |
(12,207) |
||||||||||||
CPFL Piratininga |
||||||||||||||||
J.P.Morgan |
- |
(1,155) |
(1,155) |
(138) |
(1,017) |
CDI |
July 2019 |
110,000 | ||||||||
Votorantim |
- |
(1,667) |
(1,667) |
(124) |
(1,542) |
CDI |
February 2021 |
135,000 | ||||||||
Santander |
- |
(1,219) |
(1,219) |
(90) |
(1,129) |
CDI |
February 2021 |
100,000 | ||||||||
- |
(4,041) |
(4,041) |
(353) |
(3,689) |
||||||||||||
RGE |
||||||||||||||||
HSBC |
- |
(5,251) |
(5,251) |
(626) |
(4,625) |
CDI |
July 2019 |
500,000 | ||||||||
Votorantim |
- |
(2,283) |
(2,283) |
(177) |
(2,106) |
CDI |
February 2021 |
170,000 | ||||||||
- |
(7,534) |
(7,534) |
(803) |
(6,731) |
||||||||||||
CPFL Geração |
||||||||||||||||
Votorantim |
- |
(4,221) |
(4,221) |
(241) |
(3,980) |
CDI |
August 2020 |
460,000 | ||||||||
|
|
|
|
|
||||||||||||
Subtotal |
16,710 |
(30,765) |
(14,055) |
20,441 |
(34,496) |
|||||||||||
Other derivatives (2) |
||||||||||||||||
CPFL Geração |
||||||||||||||||
Itaú |
2,843 |
(1,830) |
1,012 |
- |
1,012 |
dollar |
September 2020 |
34,858 | ||||||||
Votorantim |
1,989 |
(610) |
1,379 |
- |
1,379 |
dollar |
September 2020 |
34,858 | ||||||||
Santander |
3,989 |
- |
3,989 |
- |
3,989 |
dollar |
September 2020 |
42,100 | ||||||||
Subtotal |
8,820 |
(2,440) |
6,380 |
- |
6,380 |
|||||||||||
Total |
2,278,753 |
(34,185) |
2,244,567 |
2,457,201 |
(212,634) |
|||||||||||
Current |
627,493 |
(981) |
||||||||||||||
Noncurrent |
1,651,260 |
(33,205) |
||||||||||||||
For further details on terms and information on debts and debentures, see notes 17 and 18 | ||||||||||||||||
(1) The interest rate hedge swaps have half-yearly validity, so the notional value reduces according to the amortization of the debt. | ||||||||||||||||
(2) The notional for this type of derivative is disclosed in dollar, due its characteristics. |
131
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
As mentioned above, certain subsidiaries opted to mark to market debts for which they have fully tied derivative instruments (note 17).
The Company and its subsidiaries have recognized gains and losses on their derivatives. However, as these derivatives are used as a hedge, these gains and losses minimized the impact of variations in exchange and interest rates on the hedged debts. For the years 2015 and 2014, the derivatives resulted in the following impacts on the result, recognized in the line item of finance costs on adjustment for inflation and exchange rate changes:
Gain (Loss) | |||||
Company |
Hedged risk / transaction |
2015 |
2014 | ||
CPFL Energia |
Exchange variation |
71,492 |
- | ||
CPFL Energia |
Mark to market |
(2,319) |
- | ||
CPFL Paulista |
Interest rate variation |
(2,250) |
1 | ||
CPFL Paulista |
Exchange variation |
843,224 |
96,017 | ||
CPFL Paulista |
Mark to market |
(98,738) |
(21,297) | ||
CPFL Piratininga |
Interest rate variation |
(609) |
51 | ||
CPFL Piratininga |
Exchange variation |
300,652 |
35,808 | ||
CPFL Piratininga |
Mark to market |
(32,431) |
(6,124) | ||
RGE |
Interest rate variation |
(1,321) |
(28) | ||
RGE |
Exchange variation |
291,612 |
37,585 | ||
RGE |
Mark to market |
(29,946) |
(7,170) | ||
CPFL Geração |
Interest rate variation |
2,600 |
303 | ||
CPFL Geração |
Exchange variation |
122,294 |
21,650 | ||
CPFL Geração |
Mark to market |
(7,896) |
(6,221) | ||
CPFL Santa Cruz |
Exchange variation |
9,899 |
2,604 | ||
CPFL Santa Cruz |
Mark to market |
(80) |
(115) | ||
CPFL Leste Paulista |
Exchange variation |
4,596 |
1,453 | ||
CPFL Leste Paulista |
Mark to market |
(76) |
(117) | ||
CPFL Sul Paulista |
Exchange variation |
12,404 |
2,333 | ||
CPFL Sul Paulista |
Mark to market |
(83) |
(163) | ||
CPFL Jaguari |
Exchange variation |
16,616 |
2,146 | ||
CPFL Jaguari |
Mark to market |
(63) |
(160) | ||
CPFL Mococa |
Exchange variation |
2,022 |
427 | ||
CPFL Mococa |
Mark to market |
(33) |
(70) | ||
CPFL Serviços |
Exchange variation |
3,810 |
830 | ||
CPFL Serviços |
Mark to market |
(87) |
(167) | ||
CPFL Telecom |
Exchange variation |
3,204 |
81 | ||
CPFL Telecom |
Mark to market |
6 |
(6) | ||
CPFL Paulista Lajeado |
Exchange variation |
4,626 |
- | ||
CPFL Paulista Lajeado |
Mark to market |
(1,675) |
- | ||
CPFL Brasil |
Exchange variation |
5,367 |
- | ||
CPFL Brasil |
Mark to market |
(2,378) |
- | ||
1,514,439 |
159,653 |
b.1) Zero-cost collar derivative contracted by CPFL Geração
In 2015, subsidiary CPFL Geração contracted US$ denominated put and call options, involving the same financial institution as counterpart, and which on a combined basis are characterized as an operation usually known as zero-cost collar. The contracting of this operation does not involve any kind of speculation, inasmuch as it is aimed at minimizing any negative impacts on future revenues of the joint venture ENERCAN, which has electric energy sale agreements with annual restatement of part of the tariff based on the variation in the US$. In addition, according to Management’s view, the current scenario is favorable for
132
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
The total amount contracted was US$ 111,817, with due dates between October 1, 2015 and September 30, 2020. As at December 31, 2015, the total amount contracted was US$ 107,434, considering the options already settled in the 4th quarter of 2015. The exercise prices of the dollar options vary from R$ 4.20 to R$ 4.40 for the put options and from R$ 5.40 to R$7.50 for the call options.
These options have been measured at fair value in a recurring manner, as required by IAS 39/CPC 38. The fair value of the options that are part of this operation has been calculated based on the following premises:
Valuation technique(s) and key information |
We used the Black Scholes Option Pricing Model, which aims to obtain the fair price of the options involving the following variables: value of the asset, exercise price of the option, interest rate, term and volatility. |
Significant unobservable inputs |
Volatility determined based on the average market pricing calculations, future dollar and other variables applicable to this specific transaction, with average variation of 22.9%. |
Relationship between unobservable inputs and fair value (sensitivity) |
A slight rise in long-term volatility, analyzed on an isolated basis, would result in an insignificant increase in fair value. If the volatility were 10% higher and all the other variables remained constant, the net carrying amount (asset) would decrease by R$ 441, resulting in a net asset of R$ 5,939. |
Measurement of the fair value of these financial instruments, in the amount of R$ 7,902, of which R$ 10,342 refers to the measurement of the asset instruments and R$ 2,440 to the measurement of liability instruments, has been recognized in the statement of profit or loss for the year in line item Finance income, with no recognition of any effects in Other comprehensive income.
The following table reconciles the opening and closing balances of the call and put options for the year ended December 31, 2015, as required by IFRS 13/CPC 46:
Consolidated | |||
Assets |
Liabilities | ||
At December 31, 2014 |
- |
- | |
Marked to market |
10,342 |
(2,440) | |
Net cash recipient by repayment of flows |
(1,522) |
- | |
At December 31, 2015 |
8,820 |
(2,440) |
c) Sensitivity analysis
In compliance with CVM Instruction No. 475/2008, the Company and its subsidiaries performed sensitivity analyses of the main risks to which their financial instruments (including derivatives) are exposed, mainly comprising variations in exchange and interest rates.
If the risk exposure is considered asset, the risk to be taken into account is a reduction in the pegged indexes, resulting in a negative impact on the results of the Company and its subsidiaries. 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 results. The Company and its subsidiaries therefore quantify the risks in terms of the net exposure of the variables (dollar, euro, CDI, IGP-M, IPCA and TJLP), as shown below:
133
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
c.1) Exchange rate variation
Considering the level of net exchange rate exposure at December 31, 2015 is maintained, the simulation of the effects by type of financial instrument for three different scenarios would be:
Consolidated | ||||||||||
Exposure |
Risk |
Increase (decrease) R$ thousand | ||||||||
Instruments |
Currency depreciation (b) |
Currency appreciation / depreciation of 25% (c) |
Currency appreciation / depreciation of 50% (c) | |||||||
Financial liability instruments |
(6,690,487) |
(1,019,131) |
908,274 |
2,835,678 | ||||||
Derivatives - Plain Vanilla Swap |
6,892,745 |
1,049,940 |
(935,731) |
(2,921,403) | ||||||
202,259 |
drop of the dollar |
30,809 |
(27,458) |
(85,725) | ||||||
Financial liability instruments |
(322,465) |
(49,792) |
(142,856) |
(235,920) | ||||||
Derivatives - Plain Vanilla Swap |
316,433 |
48,860 |
140,183 |
231,507 | ||||||
(6,032) |
raise of the euro |
(931) |
(2,672) |
(4,413) | ||||||
Total |
196,227 |
29,878 |
(30,130) |
(90,138) | ||||||
Increase R$ thousand | ||||||||||
Instruments |
Exposure |
Risk |
Currency depreciation (b) |
Currency depreciation of 25% (c) |
Currency depreciation of 50% (c) | |||||
Derivatives - Zero-cost collar |
107,434 |
(d) |
raise of the dollar |
(26,870) |
(65,621) |
(104,373) |
(a) The exchange rates considered as of December 31, 2015 were R$ 3.90 per US$ 1.00 and R$ 4.25 per € 1.00.
(b) As per the exchange curves obtained from information made available by the BM&FBOVESPA, with the exchange rate being considered at R$ 4.50 and R$ 4.91, and exchange depreciation at 15.23% and 15.44%, for the US$ and €, respectively.
(c) As required by CVM Instruction No. 475/2008, the percentage increases in the ratios applied refer to the information made available by the BM&FBOVESPA.
(d) Owing to the characteristics of this derivative (zero-cost collar), the notional amount is presented in US$.
Based on the net exchange exposure in US$ being an asset, the risk is a drop in the dollar and, therefore, the local exchange rate is appreciated by 25% and 50% in relation to the probable exchange rate. Moreover, since the net exchange exposure in € is a liability, the risk is the rise of the Euro and the local exchange rate is depreciated by 25% and 50% in relation to the probable exchange rate.
c.2) Interest rate variation
Assuming that (i) the scenario of net exposure of the financial instruments indexed to variable interest rates at December 31, 2015 is maintained, and (ii) the respective accumulated annual indexes for 2015 remain stable (CDI 13.18% p.a.; IGP-M 10.54% p.a.; TJLP 6.21% p.a.; IPCA 10.67% p.a.), the effects on the Company’s 2016 financial statements would be a net finance cost of R$ 1,279,878 (CDI R$ 986,888, IGP-M R$ 7,667, TJLP R$ 284,521 and IPCA R$ 802). In the event of fluctuations in the indexes in accordance with the three scenarios described below, the effect on net finance cost would as follows:
Consolidated | ||||||||||
Exposure |
Risk |
Increase (decrease) | ||||||||
Instruments |
Scenario I (a) |
Raising index by 25% (b) |
Raising index by 50% (b) | |||||||
Financial asset instruments |
6,160,232 |
161,398 |
404,727 |
648,056 | ||||||
Financial liability instruments |
(8,601,345) |
(225,355) |
(565,108) |
(904,861) | ||||||
Derivatives - Plain Vanilla Swap |
(5,046,654) |
(132,222) |
(331,565) |
(530,908) | ||||||
(7,487,767) |
raise of the CDI |
(196,180) |
(491,946) |
(787,713) | ||||||
Financial liability instruments |
(72,739) |
raise of the IGP-M |
2,204 |
838 |
(527) | |||||
Financial liability instruments |
(4,581,666) |
raise of the TJLP |
(36,195) |
(116,374) |
(196,553) | |||||
Financial liability instruments |
(83,177) |
1,747 |
(35) |
(1,817) | ||||||
Derivatives - Plain Vanilla Swap |
75,662 |
(1,589) |
32 |
1,653 | ||||||
(7,514) |
raise of the IPCA |
158 |
(3) |
(164) | ||||||
Total |
(12,149,686) |
(230,013) |
(607,486) |
(984,958) | ||||||
(a) The CDI, IGP-M, TJLP and IPCA indexes considered of 15,8%, 7,51%, 7%,8,57%, respectively, were obtained from information available in the market. | ||||||||||
(b) In compliance with CVM Instruction 475/08, the percentages of increase in indexes were applied to Scenario I indexes. |
a) Liquidity analysis
The Company manages liquidity risk by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of its financial liabilities. The table below sets out details of the contractual maturities of the financial liabilities as at December 31, 2015, taking into account principal and interest, and
134
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Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Consolidated | ||||||||||||||||||
Note |
Weighted average interest rates |
Less than 1 month |
1-3 months |
3 months to 1 year |
1-3 years |
4-5 years |
More than 5 years |
Total | ||||||||||
Trade payables |
16 |
3,155,024 |
2,826 |
3,361 |
633 |
- |
- |
3,161,842 | ||||||||||
Borrowings - principal and interest |
17 |
12.31% |
595,799 |
780,466 |
2,913,815 |
8,654,047 |
4,015,848 |
3,062,584 |
20,022,560 | |||||||||
Derivatives |
35 |
- |
- |
981 |
- |
21,426 |
11,779 |
34,186 | ||||||||||
Debentures - principal and interest |
18 |
14.82% |
92,770 |
126,496 |
1,201,363 |
5,165,248 |
2,758,553 |
899,343 |
10,243,772 | |||||||||
Regulatory charges |
20 |
852,017 |
- |
- |
- |
- |
- |
852,017 | ||||||||||
Use of public asset |
23 |
15.95% |
788 |
5,270 |
18,965 |
69,172 |
118,313 |
253,232 |
465,741 | |||||||||
Others |
24 |
28,937 |
163,930 |
27,490 |
- |
- |
17,750 |
238,107 | ||||||||||
Consumers and concessionaires |
11,307 |
28,907 |
13,745 |
- |
- |
- |
53,959 | |||||||||||
National scientific and technological development fund - FNDCT |
955 |
3,161 |
- |
- |
- |
- |
4,115 | |||||||||||
Energy research company - EPE |
485 |
1,580 |
- |
- |
- |
- |
2,065 | |||||||||||
Collections agreement |
- |
130,282 |
- |
- |
- |
- |
130,282 | |||||||||||
Reversal fund |
- |
- |
- |
- |
- |
17,750 |
17,750 | |||||||||||
Business combination |
16,190 |
- |
13,745 |
- |
- |
- |
29,935 | |||||||||||
Total |
4,725,334 |
1,078,988 |
4,165,974 |
13,889,100 |
6,914,140 |
4,244,688 |
35,018,225 |
( 36 ) COMMITTMENTS
The Company’s commitments as regards long-term energy purchase agreements and plant construction projects at December 31, 2015, as follows:
Commitments at December 31, 2015 |
Duration |
Less than 1 year |
1-3 years |
4-5 years |
More than 5 years |
Total | ||||||
Energy purchase (except from Itaipu) |
Up to 30 years |
7,905,987 |
14,852,772 |
15,589,876 |
59,267,009 |
97,615,644 | ||||||
Energy purchase from Itaipu |
Up to 30 years |
2,345,613 |
4,714,829 |
5,010,501 |
23,492,838 |
35,563,781 | ||||||
Energy system service charges |
Up to 34 years |
1,062,027 |
2,967,006 |
3,638,288 |
19,717,250 |
27,384,570 | ||||||
GSF renegotiation |
Up to 25 years |
46,016 |
- |
7,166 |
180,995 |
234,177 | ||||||
Power plant construction projects |
Up to 18 years |
961,843 |
298,299 |
71 |
- |
1,260,213 | ||||||
Trade payables |
Up to 31 years |
1,333,362 |
945,660 |
226,395 |
538,416 |
3,043,834 | ||||||
Total |
13,654,849 |
23,778,566 |
24,472,297 |
103,196,508 |
165,102,220 |
The power plant construction projects include commitments made basically to construction related to the subsidiaries of the renewable energy segment.
( 37 ) NON-CASH TRANSACTION
|
Parent Company |
|
Consolidated | ||||
|
December 31, 2015 |
|
December 31, 2014 |
|
December 31, 2015 |
|
December 31, 2014 |
Transactions resulting from business combinations |
|
|
|
|
|
|
|
Borrowings and debentures |
- |
|
- |
|
- |
|
(1,009,877) |
Property, plant and equipment acquired in business combination |
- |
|
- |
|
- |
|
1,616,999 |
Intangible asset acquired in business combination, net of tax effects |
- |
|
- |
|
- |
|
626,399 |
Deferred taxes on business combination |
- |
|
- |
|
- |
|
(305,259) |
Other net assets acquired in business combination |
- |
|
- |
|
- |
|
(23,669) |
|
- |
|
- |
|
- |
|
904,593 |
Consideration paid with acquired cash |
- |
|
- |
|
|
|
(70,930) |
Consideration transferred through share issue |
- |
|
- |
|
- |
|
(833,663) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other transactions |
|
|
|
|
|
|
|
Capital increase with reserve |
554,888 |
|
- |
|
- |
|
- |
Capital increase in investees with advance for future capital increase |
905,167 |
|
59,397 |
|
- |
|
- |
Advance for future capital increase in subsidiaries |
- |
|
28,005 |
|
- |
|
- |
Provision (reversal) for socio environmental costs capitalized in property, plant and equipment |
- |
|
- |
|
- |
|
9,193 |
Interest capitalized in property, plant and equipment |
- |
|
- |
|
34,212 |
|
4,225 |
Interest capitalized in concession intangible asset - distribution infrastructure |
- |
|
- |
|
11,358 |
|
8,044 |
Transfer from concession financial concession and intangible assets to property, plant and equipment as result of spin-off of generation activity in distributors |
- |
|
- |
|
- |
|
5,828 |
Transfer between property, plant and equipment and other assets |
- |
|
- |
|
2,928 |
|
16,430 |
Realization of noncontrolling interests' capital reserve against receivables |
- |
|
- |
|
- |
|
2,189 |
135
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
( 38 ) RELEVANT FACT AND EVENT AFTER THE REPORTING PERIOD
38.1 Borrowings
On January 20, 2016, approval was granted by the Board of Directors of subsidiaries CPFL Paulista, CPFL Piratininga, RGE and CPFL Geração for obtaining funds through foreign currency borrowings (with swap at the CDI rate), rural credits, bank credit notes, issue of debentures, assumption of debts, other working capital operations and/or rolling over of debts and current swaps, with maximum term of five years and amounts of up to the following per subsidiary: (i) CPFL Geração: R$ 1,300,000; (ii) CPFL Paulista: R$ 400,000; (iii) CPFL Piratininga: R$ 350,000 and (iv) RGE: R$ 450,000.
38.2 Approval of Tariff Flags
Orders No. 7 of January 5, 2016 and 265 of February 1, 2016 approved the amounts related to the tariff flags of November and December 2015 as follows:
Subsidiary |
Order No. 7 |
Order No. 265 | ||
CPFL Paulista |
84,813 |
78,667 | ||
CPFL Piratininga |
33,341 |
32,095 | ||
CPFL Santa Cruz |
3,395 |
3,155 | ||
CPFL Leste Paulista |
1,062 |
934 | ||
CPFL Sul Paulista |
1,426 |
1,362 | ||
CPFL Jaguari |
1,854 |
1,703 | ||
CPFL Mococa |
773 |
683 | ||
RGE |
24,237 |
23,642 | ||
150,901 |
142,241 | |||
38.3 Annual Tariff Readjustment – CPFL Santa Cruz, CPFL Leste Paulista, CPFL Sul Paulista, CPFL Jaguari and CPFL Mococa
On February 2, 2016, ANEEL published Ratification Resolution No. 2.017, extending the effective term of the electric energy tariffs of subsidiaries CPFL Santa Cruz, CPFL Leste Paulista, CPFL Sul Paulista, CPFL Jaguari and CPFL Mococa through March 21, 2016, based on renewal of the concession and alteration of the date of its tariff process from February 3 to March 22 of this year.
38.4 Bonuses in shares paid to shareholders
On March 2016, in order to strengthen the Company’s capital structure, the Company’s management recommended to the Board of Directors that it propose to the General Meeting of Shareholders capitalization of the balance of the statutory reserve for reinforcement of working capital, with issue of new shares in favor of the shareholders.
136
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Board of Directors
MURILO CESAR L.S. PASSOS
Chairman
DÉCIO BOTTECHIA JUNIOR
Vice Chairman
ALBRECHT CURT REUTER DOMENECH
FRANCISCO CAPRINO NETO
DELI SOARES PEREIRA
LICIO DA COSTA RAIMUNDO
ANA MARIA ELORRIETA
Directors
Executive Board
WILSON P. FERREIRA JUNIOR
Chief Executive Officer
GUSTAVO ESTRELLA
Chief Financial
and Investor Relations Officer
WAGNER LUIZ SCHNEIDER DE FREITAS
Chief Planning and Business Management Officer
LUIS HENRIQUE FERREIRA PINTO
Chief Regulated Operations Officer
CARLOS DA COSTA PARCIAS JÚNIOR
Chief Business Development Officer
KARIN REGINA LUCHESI
Chief Market Operations Officer
LUIZ EDUARDO FRÓES DO AMARAL OSORIO
Chief Institutional Relations Officer
Accounting Division
SERGIO LUIS FELICE
Accounting Director
CT CRC 1SP192767/O-6
137
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
(Convenience Translation into English from the Original Previously Issued in Portuguese)
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
CPFL Energia S.A.
São Paulo - SP
Introduction
We have audited the accompanying individual and consolidated financial statements of CPFL Energia S.A. (“CPFL Energia” or “Company”), identified as Parent Company and Consolidated, respectively, which comprise the balance sheets as of December 31, 2015 and the related statements of income, comprehensive income, changes in shareholders' equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of the individual and consolidated financial statements in accordance with the accounting practices adopted in Brazil and in accordance with the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB), as well as for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Brazilian and International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement in the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting practices used and the reasonableness of accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the individual and consolidated financial statements referred to above present fairly, in all material respects, the individual and consolidated financial position of CPFL Energia S.A. as of December 31, 2015, its individual and consolidated financial performance and its cash flows for the year then ended in accordance with the accounting practices adopted in Brazil and in accordance with the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB).
138
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Other matters
Statements of value added
We have also audited the individual and consolidated statements of value added (DVA) for the year ended December 31, 2015, prepared under Management's responsibility, the presentation of which is required by the Brazilian Corporate Law for publicly-traded companies, and provided as supplemental information for IFRSs which do not require the presentation of DVA. These statements were subject to the same auditing procedures described above and, in our opinion, are fairly presented, in all material respects, in relation to the financial statements taken as a whole.
The accompanying financial statements have been translated into English for the convenience of readers outside Brazil.
Campinas, March 7, 2016
DELOITTE TOUCHE TOHMATSU |
Marcelo Magalhães Fernandes |
Auditores Independentes |
Engagement Partner |
139
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
The members of the Fiscal Council of CPFL Energia S.A, in the exercise of their legal prerogatives, have reviewed the Management Report and the Financial Statements for 2015 and, in light of the clarifications provided by the Company's Executive Board and the representative of the External Audit and, also, based on the opinion of Deloitte Touche Tohmatsu Auditores Independentes, dated March 7, 2016, are of the opinion that these documents are appropriate to be reviewed and voted on by the Annual General Meeting of Shareholders, to be held on April 29, 2016.
São Paulo, March 16, 2016.
WILLIAM BEZERRA CAVALCANTI FILHO
President
ADALGISO FRAGOSO DE FARIA
Director
MARCELO DE ANDRADE
Director
CARLOS ALBERTO CARDOSO MOREIRA
Director
CELENE CARVALHO DE JESUS
Director
140
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
In accordance to the sections V and VI of article 25 of CVM Instruction 480, of December 07, 2009, the chief executive officer and directors of CPFL Energia S.A., a publicly quoted companion, whose headquarters are located at Gomes de Carvalho street, 1510 - 14º floor- Room 142 - Vila Olímpia - São Paulo - SP – Brasil, CNPJ (Federal Tax ID) 02.429.144/0001-93, have declared:
a) that reviewed, discussed and agree with the auditors’ opinion issued by Deloitte Touche Tohmatsu Auditores Independentes, related to CPFL Energia Financial Statements as of December 31, 2015;
b) that reviewed, discussed and agree with the CPFL Energia Financial Statements as of December 31, 2015.
Campinas, March 7, 2016.
Wilson P. Ferreira Junior
Chief Executive Officer
GUSTAVO ESTRELLA
Chief Financial
and Investor Relations Officer
WAGNER LUIZ SCHNEIDER DE FREITAS
Chief Planning and Business Management Officer
LUIS HENRIQUE FERREIRA PINTO
Chief Regulated Operations Officer
CARLOS DA COSTA PARCIAS JÚNIOR
Chief Business Development Officer
KARIN REGINA LUCHESI
Chief Market Operations Officer
LUIZ EDUARDO FRÓES DO AMARAL OSORIO
Chief Institutional Relations Officer
140
(Free Translation of the original in Portuguese)
Standard Financial Statements – DFP – Date: December 31, 2015 - CPFL Energia S. A
Management declaration on independent auditors’ report
In accordance to the sections V and VI of article 25 of CVM Instruction 480, of December 07, 2009, the chief executive officer and directors of CPFL Energia S.A., a publicly quoted companion, whose headquarters are located at Gomes de Carvalho street, 1510 - 14º floor- Room 142 - Vila Olímpia - São Paulo - SP – Brasil, CNPJ (Federal Tax ID) 02.429.144/0001-93, have declared:
c) that reviewed, discussed and agree with the auditors’ opinion issued by Deloitte Touche Tohmatsu Auditores Independentes, related to CPFL Energia Financial Statements as of December 31, 2015;
d) that reviewed, discussed and agree with the CPFL Energia Financial Statements as of December 31, 2015.
Campinas, March 7, 2016.
Wilson P. Ferreira Junior
Chief Executive Officer
GUSTAVO ESTRELLA
Chief Financial
and Investor Relations Officer
WAGNER LUIZ SCHNEIDER DE FREITAS
Chief Planning and Business Management Officer
LUIS HENRIQUE FERREIRA PINTO
Chief Regulated Operations Officer
CARLOS DA COSTA PARCIAS JÚNIOR
Chief Business Development Officer
KARIN REGINA LUCHESI
Chief Market Operations Officer
LUIZ EDUARDO FRÓES DO AMARAL OSORIO
Chief Institutional Relations Officer
141
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.