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 – 2018 – CPFL Energia S.A. Version: 1
Registration data
General information | 1 |
Address | 2 |
Securities |
3 |
Auditor information | 4 |
Share register | 5 |
Investor relations officer | 6 |
Shareholders’ department | 7 |
Registration Form – 2018 – CPFL Energia S.A. Version: 1
1. General information
Company name: |
CPFL ENERGIA S.A. |
Other countries in which the securities can be traded | |
Country |
Date of admission |
United States |
09/29/2004 |
Sector of activity: Date of registration in the current category: |
Holding company (Electric Energy) Holding company Category A 01/01/2010 Operating 05/18/2000 Private Holding 01/23/2017 12/31 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 |
Registration Form – 2018 – CPFL Energia S.A. Version: 1
2. Address
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
Registered Office 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
Registration Form – 2018 – CPFL Energia S.A. Version: 1
3. Securities
Share trading
Trading mkt Stock exchange
Managing entity B3
Start date 09/29/2004
End date
Trading segment New Market
Start date 9/29/2004
End date
Share code CPFE3
Debenture trading
Trading mkt Organized market
Managing entity B3
Start date 05/18/2000
End date
Trading segment Traditional
Start date 05/19/2000
End date
Registration Form – 2018 – CPFL Energia S.A. Version: 1
4. Auditor information
Does the issuer have an auditor? Yes
CVM code: 418-9
Type of auditor: Brazilian firm
Independent auditor: KPMG Auditores Independentes
CNPJ (Corporate Taxpayer ID): 57.755.217/0011-09
Period of service: 03/29/2017
Partner in charge Marcio José dos Santos
Period of service 03/29/2017
CPF (Individual Taxpayer ID) 253.206.858-23
Registration Form – 2018 – CPFL Energia S.A. Version: 1
5. 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, e-mail: aescriturais@bb.com.br
Registration Form – 2018 – CPFL Energia S.A. Version: 1
6. 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:
Registration Form – 2018 – CPFL Energia S.A. Version: 1
7. Shareholders’ department
Contact Sérgio Luis Felice
Date when the officer assumed the position: 13/09/2017
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) 3756-8018, email: slfelice@cpfl.com.br
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - 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 |
6 |
Statement of Comprehensive Income |
7 |
Statement of Cash Flows – Indirect Method |
8 |
Statement of Changes in Equity |
|
01/01/2017 to 12/31/2017 |
10 |
01/01/2016 to 12/31/2016 |
11 |
01/01/2015 to 12/31/2015 |
12 |
Statements of Value Added |
13 |
Consolidated Interim Financial Statements |
|
Statement of Financial Position - Assets |
14 |
Statement of Financial Position - Liabilities and Equity |
16 |
Statement of Income |
19 |
Statement of Comprehensive Income |
20 |
Statement of Cash Flows - Indirect Method |
21 |
Statement of Changes in Equity |
|
01/01/2017 to 12/31/2017 |
23 |
01/01/2016 to 12/31/2016 |
24 |
01/01/2015 to 12/31/2015 |
25 |
Statements of Value Added |
26 |
Management Report |
27 |
Notes to Interim financial statements |
46 |
Reports |
|
Independent Auditor’s Report - Unqualified |
138 |
Management declaration on financial statements |
145 |
Management declaration on independent auditor’s report |
146 |
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Number of Shares (In units) |
Closing Date 12/31/2017 |
Paid-in capital |
|
Common |
1,017,914,746 |
Preferred |
0 |
Total |
1,017,914,746 |
Treasury Stock |
0 |
Common |
0 |
Preferred |
0 |
Total |
0 |
1
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Cash proceeds
Event Board of Directors’ Meeting
Approval 03/26/2018
Proceed Dividend
Beginning of payment
Type of shares ON (common shares)
Class of share
Amount per shares (Reais/share) 0.27525
2
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
(In thousands of Brazilian reais – R$) |
|
|
| |
|
|
|
|
|
Code |
Description |
Current Year 12/31/2017 |
Prior Year 12/31/2016 |
Prior Year 12/31/2015 |
1 |
Total assets |
9,463,648 |
8,908,964 |
8,948,469 |
1.01 |
Current assets |
275,382 |
791,016 |
1,795,763 |
1.01.01 |
Cash and cash equivalents |
6,581 |
64,973 |
424,192 |
1.01.06 |
Taxes recoverable |
63,751 |
82,836 |
72,885 |
1.01.06.01 |
Current taxes recoverable |
63,751 |
82,836 |
72,885 |
1.01.06.01.01 |
Income tax and social contribution to be offset |
17,052 |
53,247 |
44,627 |
1.01.06.01.02 |
Other taxes recoverable |
46,699 |
29,589 |
28,258 |
1.01.08 |
Other current assets |
205,050 |
643,207 |
1,298,686 |
1.01.08.03 |
Other |
205,050 |
643,207 |
1,298,686 |
1.01.08.03.01 |
Other receivables |
243 |
229 |
943 |
1.01.08.03.02 |
Derivatives |
- |
- |
70,153 |
1.01.08.03.04 |
Dividends and interest on capital |
204,807 |
642,978 |
1,227,590 |
1.02 |
Noncurrent assets |
9,188,266 |
8,117,948 |
7,152,706 |
1.02.01 |
Long-term assets |
629,352 |
250,625 |
211,432 |
1.02.01.06 |
Deferred taxes |
145,778 |
171,073 |
140,389 |
1.02.01.06.02 |
Deferred tax assets |
145,778 |
171,073 |
140,389 |
1.02.01.08 |
Receivables from related parties |
127,147 |
52,582 |
2,814 |
1.02.01.08.02 |
Receivables from subsidiaries |
127,147 |
52,582 |
2,814 |
1.02.01.09 |
Other noncurrent assets |
356,427 |
26,970 |
68,229 |
1.02.01.09.04 |
Escrow deposits |
665 |
710 |
630 |
1.02.01.09.07 |
Advance for future capital increase |
350,000 |
- |
52,680 |
1.02.01.09.10 |
Other receivables |
5,762 |
26,260 |
14,919 |
1.02.02 |
Investments |
8,557,673 |
7,866,100 |
6,940,036 |
1.02.02.01 |
Equity interests |
8,557,673 |
7,866,100 |
6,940,036 |
1.02.02.01.02 |
Investments in subsidiaries |
8,557,673 |
7,866,100 |
6,940,036 |
1.02.03 |
Property, plant and equipment |
1,170 |
1,199 |
1,215 |
1.02.03.01 |
Property, plant and equipment - in servce |
1,170 |
1,199 |
1,215 |
1.02.04 |
Intangible assets |
71 |
24 |
23 |
1.02.04.01 |
Other intangible assets |
71 |
24 |
23 |
3
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Individual Financial Statements
Statement of Financial Position – Liabilities and Equity
(In thousands of Brazilian reais – R$) |
|
|
| ||
|
|
|
|
| |
Code |
Description |
Current Year 12/31/2017 |
Prior Year 12/31/2016 |
Prior Year 12/31/2015 | |
2 |
Total liabilities |
9,463,648 |
8,908,964 |
8,948,469 | |
2.01 |
Current liabilities |
303,812 |
255,755 |
1,206,708 | |
2.01.02 |
Trade payables |
1,644 |
3,760 |
1,157 | |
2.01.02.01 |
Domestic suppliers |
1,644 |
3,760 |
1,157 | |
2.01.03 |
Taxes payable |
717 |
454 |
747 | |
2.01.03.01 |
Federal taxes |
717 |
453 |
747 | |
2.01.03.01.02 |
PIS (tax on revenue) |
14 |
15 |
63 | |
2.01.03.01.03 |
COFINS (tax on revenue) |
87 |
90 |
391 | |
2.01.03.01.04 |
Other federal taxes |
616 |
348 |
293 | |
2.01.03.03 |
Municipal taxes |
- |
1 |
- | |
2.01.03.03.01 |
Other municipal taxes |
- |
1 |
- | |
2.01.04 |
Borrowings |
1,938 |
15,334 |
973,252 | |
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 |
1,938 |
15,334 |
- | |
2.01.04.02.02 |
Interests on debentures |
1,938 |
15,334 |
- | |
2.01.05 |
Other liabilities |
299,513 |
236,207 |
231,552 | |
2.01.05.02 |
Others |
299,513 |
236,207 |
231,552 | |
2.01.05.02.01 |
Dividends and interest on capital payable |
281,919 |
218,630 |
212,531 | |
2.01.05.02.04 |
Derivatives |
- |
- |
981 | |
2.01.05.02.07 |
Other liabilities |
17,594 |
17,577 |
18,040 | |
2.02 |
Noncurrent liabilities |
198,308 |
683,188 |
67,565 | |
2.02.01 |
Borrowings |
184,388 |
612,251 |
- | |
2.02.01.02 |
Debentures |
184,388 |
612,251 |
- | |
2.02.01.02.01 |
Debentures |
184,388 |
612,251 |
- | |
2.02.02 |
Other liabilities |
13,320 |
69,929 |
65,930 | |
2.02.02.02 |
Others |
13,320 |
69,929 |
65,930 | |
2.02.02.02.05 |
Provision for equity interest losses |
- |
19,301 |
33,969 | |
4
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
(In thousands of Brazilian reais – R$) |
|
|
| |
|
|
|
|
|
Code |
Description |
Current Year 12/31/2017 |
Prior Year 12/31/2016 |
Prior Year 12/31/2015 |
2.02.02.02.08 |
Other payables |
- |
50,628 |
31,961 |
2.02.04 |
Provisons |
600 |
1,008 |
1,635 |
2.02.04.01 |
Tax, social security, labor and civil provisions |
600 |
1,008 |
1,635 |
2.02.04.01.02 |
Social security and labor provisions |
57 |
467 |
1,209 |
2.02.04.01.04 |
Civil provisions |
543 |
541 |
426 |
2.03 |
Equity |
8,961,528 |
7,970,021 |
7,674,196 |
2.03.01 |
Issued capital |
5,741,284 |
5,741,284 |
5,348,312 |
2.03.02 |
Capital reserves |
468,014 |
468,014 |
468,082 |
2.03.04 |
Earnings reserves |
2,916,736 |
1,995,356 |
1,672,481 |
2.03.04.01 |
Legal reserve |
798,090 |
739,103 |
694,058 |
2.03.04.02 |
Statutory reserve |
2,118,646 |
1,248,433 |
978,423 |
2.03.04.08 |
Additional dividend proposed |
- |
7,820 |
- |
2.03.08 |
Other comprehensive income |
(164,506) |
(234,633) |
185,321 |
2.03.08.01 |
Accumulated comprehensive income |
(164,506) |
(234,633) |
185,321 |
5
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
| |
|
|
|
|
|
Code |
Description |
Current Year |
Prior Year |
Prior Year |
|
|
01/01/2017 to 12/31/2017 |
01/01/2016 to 12/31/2016 |
01/01/2015 to 12/31/2015 |
3.01 |
Revenue from sale of energy and/or services |
1 |
1,713 |
1,157 |
3.03 |
Gross profit |
1 |
1,713 |
1,157 |
3.04 |
Operating income (expenses) |
1,306,995 |
871,501 |
897,040 |
3.04.02 |
General and administrative expenses |
(42,771) |
(50,860) |
(29,911) |
3.04.06 |
Share of profit (loss) of investees |
1,349,766 |
922,361 |
926,951 |
3.05 |
Profit before finance income (costs) and taxes |
1,306,996 |
873,214 |
898,197 |
3.06 |
Finance income (costs) |
(56,471) |
17,184 |
(22,948) |
3.06.01 |
Finance income |
12,983 |
70,878 |
74,854 |
3.06.02 |
Finance costs |
(69,454) |
(53,694) |
(97,802) |
3.07 |
Profit (loss) before taxes on income |
1,250,525 |
890,398 |
875,249 |
3.08 |
Income tax and social contribution |
(70,775) |
10,487 |
(10,309) |
3.08.01 |
Current |
(45,481) |
(20,197) |
(70) |
3.08.02 |
Deferred |
(25,294) |
30,684 |
(10,239) |
3.09 |
Profit (loss) from continuing operations |
1,179,750 |
900,885 |
864,940 |
3.11 |
Profit (loss) for the year |
1,179,750 |
900,885 |
864,940 |
3.99.01.01 |
ON |
1.16000 |
0.89000 |
0.85000 |
3.99.02.01 |
ON |
1.15000 |
0.87000 |
0.83000 |
6
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
| ||
|
|
|
|
| |
|
|
|
|
| |
Code |
Description |
Current Year |
Prior Year |
Prior Year | |
|
|
01/01/2017 to 12/31/2017 |
01/01/2016 to 12/31/2016 |
01/01/2015 to 12/31/2015 | |
4.01 |
Profit for the year |
1,179,750 |
900,885 |
864,940 | |
4.02 |
Other comprehensive income |
96,000 |
(394,176) |
65,548 | |
4.02.01 |
Comprehensive income for the year of subsidiaries |
96,000 |
(394,176) |
65,548 | |
4.03 |
Comprehensive income for the year |
1,275,750 |
506,709 |
930,488 | |
7
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
| |
|
|
|
|
|
Code |
Description |
Current year 01/01/2017 to 12/31/2017 |
Prior Year 01/01/2016 to 12/31/2016 |
Prior Year 01/01/2015 to 12/31/2015 |
6.01 |
Cash flows from operating activities |
1,061,750 |
1,556,255 |
617,661 |
6.01.01 |
Cash generated from operations |
(37,443) |
11,049 |
44,553 |
6.01.01.01 |
Profit for the year, including income tax and social contribution |
1,250,525 |
890,398 |
875,250 |
6.01.01.02 |
Depreciation and amortization |
217 |
193 |
169 |
6.01.01.03 |
Provision for tax, civil and labor risks |
61 |
425 |
1,497 |
6.01.01.04 |
Interest on debts, inflation adjusment and exchange rate changes |
61,520 |
42,395 |
94,588 |
6.01.01.10 |
Share of profit (loss) of investees |
(1,349,766) |
(922,362) |
(926,951) |
6.01.02 |
Changes in assets and liabilities |
1,099,193 |
1,545,206 |
573,108 |
6.01.02.02 |
Taxes recoverable |
65,182 |
3,261 |
(12,350) |
6.01.02.03 |
Escrow deposits |
68 |
(37) |
(48) |
6.01.02.06 |
Dividends and interest on capital received |
1,172,336 |
1,606,073 |
627,014 |
6.01.02.09 |
Other operating assets |
20,485 |
(10,033) |
933 |
6.01.02.10 |
Trade payables |
(2,116) |
2,603 |
366 |
6.01.02.12 |
Tax, civil and labor risks paid |
(466) |
(1,115) |
(674) |
6.01.02.14 |
Income tax and social contribution paid |
(47,438) |
(27,117) |
(2,172) |
6.01.02.16 |
Interest paid on debts |
(71,844) |
(45,470) |
(36,858) |
6.01.02.17 |
Other taxes and social contributions |
263 |
(1,162) |
804 |
6.01.02.19 |
Other operating liabilities |
(37,277) |
18,203 |
(3,907) |
6.02 |
Net cash generated by (used in) investing activities |
(465,175) |
(1,426,698) |
(532,392) |
6.02.01 |
Purchases of property, plant and equipment |
(185) |
(573) |
(535) |
6.02.02 |
Securities, pledges and restricted deposits |
- |
(200) |
- |
6.02.04 |
Purchases of intangible assets |
(51) |
- |
(12) |
6.02.08 |
Intragroup loans |
(72,199) |
(41,405) |
10,845 |
6.02.09 |
Advance for future capital increase |
(383,340) |
(1,384,520) |
(52,680) |
6.02.10 |
Capital increase in existing investment |
(9,400) |
- |
(490,010) |
6.03 |
Net cash generated by (used in) financing activities |
(654,966) |
(488,776) |
(460,853) |
6.03.01 |
Borrowings and debentures raised |
- |
609,060 |
829,997 |
6.03.02 |
Repayment of principal of borrowings and debentures |
(434,000) |
(888,408) |
(1,290,000) |
6.03.03 |
Dividends and interest on capital paid |
(220,966) |
(204,717) |
(850) |
8
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
(In thousands of Brazilian reais – R$) |
|
|
| |
|
|
|
|
|
Code |
Description |
Current year 01/01/2017 to 12/31/2017 |
Prior Year 01/01/2016 to 12/31/2016 |
Prior Year 01/01/2015 to 12/31/2015 |
6.03.06 |
Repayment of derivative instruments |
- |
(4,711) |
- |
6.05 |
Increase (decrease) in cash and cash equivalents |
(58,391) |
(359,219) |
(375,584) |
6.05.01 |
Cash and cash equivalents at the beginning of the year |
64,972 |
424,192 |
799,775 |
6.05.02 |
Cash and cash equivalents at the end of the year |
6,581 |
64,973 |
424,191 |
9
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
| |
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 |
5,741,284 |
468,014 |
1,995,355 |
- |
(234,632) |
7,970,021 | |
5.03 |
Adjusted opening balances |
5,741,284 |
468,014 |
1,995,355 |
- |
(234,632) |
7,970,021 | |
5.04 |
Capital transactions with shareholders |
- |
- |
(7,820) |
(276,423) |
- |
(284,243) | |
5.04.08 |
Prescribed dividend |
- |
- |
- |
3,768 |
- |
3,768 | |
5.04.10 |
Dividend proposal approved |
- |
- |
(7,820) |
(280,191) |
- |
(288,011) | |
5.05 |
Total comprehensive income |
- |
- |
- |
1,179,750 |
96,000 |
1,275,750 | |
5.05.01 |
Profit for the year |
- |
- |
- |
1,179,750 |
- |
1,179,750 | |
5.05.02 |
Other comprehensive income |
- |
- |
- |
- |
96,000 |
96,000 | |
5.06 |
Internal changes in equity |
- |
- |
929,201 |
(903,327) |
(25,874) |
- | |
5.06.01 |
Recognition of reserves |
- |
- |
58,988 |
(58,988) |
- |
- | |
5.06.04 |
Equity on comprehensive income of subsidiaries |
- |
- |
- |
25,874 |
(25,874) |
- | |
5.06.06 |
Changes in statutory reserve in the year |
- |
- |
870,213 |
(870,213) |
- |
- | |
5.07 |
Closing balances |
5,741,284 |
468,014 |
2,916,736 |
- |
(164,506) |
8,961,528 | |
10
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Code |
Description |
Paid-in capital |
Capital reserves, stock options and treasury stock |
Earnings reserves |
Retained earnings/accumulated losses |
Other comprehensive income |
Equity |
5.01 |
Opening balances |
5,348,312 |
468,082 |
1,672,481 |
- |
185,320 |
7,674,195 |
5.03 |
Adjusted opening balances |
5,348,312 |
468,082 |
1,672,481 |
- |
185,320 |
7,674,195 |
5.04 |
Capital transactions with shareholders |
392,972 |
(68) |
(385,152) |
(218,636) |
- |
(210,884) |
5.04.01 |
Capital increase |
392,972 |
- |
(392,972) |
- |
- |
- |
5.04.08 |
Prescribed dividend |
- |
- |
- |
3,144 |
- |
3,144 |
5.04.09 |
Dividend proposal approved |
- |
- |
- |
(213,960) |
- |
(213,960) |
5.04.10 |
Dividend proposed |
- |
- |
7,820 |
(7,820) |
- |
- |
5.04.13 |
Capital increase in subsidiaries with no change in control |
- |
(68) |
- |
- |
- |
(68) |
5.05 |
Total comprehensive income |
- |
- |
- |
900,886 |
(394,175) |
506,710 |
5.05.01 |
Profit for the year |
- |
- |
- |
900,886 |
- |
900,885 |
5.05.02 |
Other comprehensive income |
- |
- |
- |
- |
(394,175) |
(394,175) |
5.06 |
Internal changes in equity |
- |
- |
708,027 |
(682,250) |
(25,778) |
- |
5.06.01 |
Recognition of reserves |
- |
- |
45,044 |
(45,044) |
- |
- |
5.06.04 |
Equity on comprehensive income of subsidiaries |
- |
- |
- |
25,778 |
(25,778) |
- |
5.06.08 |
Changes in statutory reserve in the year |
- |
- |
662,983 |
(662,984) |
- |
- |
5.07 |
Closing balances |
5,741,284 |
468,014 |
1,995,356 |
- |
(234,633) |
7,970,021 |
11
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
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 |
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 |
12
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Individual Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
| |
|
|
|
|
|
Code |
Description |
Current Year 01/01/2017 to 12/31/2017 |
Prior Year 01/01/2016 to 12/31/2016 |
Prior Year 01/01/2015 to 12/31/2015 |
7.01 |
Revenues |
237 |
2,461 |
1,821 |
7.01.01 |
Sales of goods and services |
1 |
1,888 |
1,274 |
7.01.03 |
Revenues related to construction of own assets |
236 |
573 |
547 |
7.02 |
Inputs purchased from thrid parties |
(10,322) |
(13,305) |
(10,322) |
7.02.02 |
Materials, energy, third-party services and others |
(8,425) |
(11,045) |
(7,825) |
7.02.04 |
Others |
(1,897) |
(2,260) |
(2,497) |
7.03 |
Gross value added |
(10,085) |
(10,844) |
(8,501) |
7.04 |
Retentions |
(217) |
(194) |
(169) |
7.04.01 |
Depreciation, amortization and depletion |
(217) |
(194) |
(169) |
7.05 |
Wealth created by the Company |
(10,302) |
(11,038) |
(8,670) |
7.06 |
Wealth received in transfer |
1,391,611 |
998,853 |
1,011,012 |
7.06.01 |
Share of profit (loss) of investees |
1,349,766 |
922,362 |
926,950 |
7.06.02 |
Finance income |
41,845 |
76,491 |
84,062 |
7.07 |
Total wealth for distribution |
1,381,309 |
987,815 |
1,002,342 |
7.08 |
Wealth distributed |
1,381,309 |
987,815 |
1,002,342 |
7.08.01 |
Personnel and charges |
27,248 |
33,168 |
16,938 |
7.08.01.01 |
Salaries and wages |
15,690 |
17,914 |
9,963 |
7.08.01.02 |
Benefits |
10,184 |
13,978 |
5,987 |
7.08.01.03 |
FGTS (Severance Pay Fund) |
1,374 |
1,276 |
988 |
7.08.02 |
Taxes, fees and contributions |
104,770 |
483 |
28,424 |
7.08.02.01 |
Federal |
104,738 |
443 |
28,394 |
7.08.02.02 |
State |
32 |
40 |
30 |
7.08.03 |
Lenders and lessors |
69,541 |
53,279 |
92,040 |
7.08.03.01 |
Interest |
69,311 |
53,229 |
91,918 |
7.08.03.02 |
Rentals |
230 |
50 |
122 |
7.08.04 |
Shareholders |
1,179,750 |
900,885 |
864,940 |
7.08.04.02 |
Dividends |
250,550 |
192,857 |
173,708 |
7.08.04.03 |
Retained earnings / Loss for the year |
929,200 |
708,028 |
691,232 |
13
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
(In thousands of Brazilian reais – R$) |
|
|
| |
|
|
|
|
|
Code |
Description |
Current Year 12/31/2017 |
Prior Year 12/31/2016 |
Prior Year 12/31/2015 |
1 |
Total assets |
41,282,912 |
42,170,992 |
40,532,471 |
1.01 |
Current assets |
9,581,212 |
11,379,187 |
12,508,652 |
1.01.01 |
Cash and cash equivalents |
3,249,642 |
6,164,997 |
5,682,802 |
1.01.02 |
Financial investments |
139 |
449 |
23,633 |
1.01.02.02 |
Financial investments at amortized cost |
139 |
449 |
23,633 |
1.01.02.02.01 |
Held-to-maturity securities |
139 |
449 |
23,633 |
1.01.03 |
Trade receivables |
4,301,283 |
3,765,893 |
3,174,918 |
1.01.03.01 |
Consumers |
4,301,283 |
3,765,893 |
3,174,918 |
1.01.06 |
Taxes recoverable |
395,046 |
403,848 |
475,211 |
1.01.06.01 |
Current taxes recoverable |
395,046 |
403,848 |
475,211 |
1.01.06.01.01 |
Income tax and social contribution to be offset |
88,802 |
143,943 |
- |
1.01.06.01.02 |
Other taxes recoverable |
306,244 |
259,905 |
- |
1.01.08 |
Other current assets |
1,635,102 |
1,044,000 |
3,152,088 |
1.01.08.03 |
Others |
1,635,102 |
1,044,000 |
3,152,088 |
1.01.08.03.01 |
Other receivables |
884,674 |
777,450 |
946,671 |
1.01.08.03.02 |
Derivatives |
444,029 |
163,241 |
627,493 |
1.01.08.03.03 |
Leases |
15,684 |
19,281 |
12,883 |
1.01.08.03.04 |
Dividends and interest on capital |
56,145 |
73,328 |
91,392 |
1.01.08.03.05 |
Concession financial asset |
23,736 |
10,700 |
9,630 |
1.01.08.03.06 |
Sector financial asset |
210,834 |
- |
1,464,019 |
1.02 |
Noncurrent assets |
31,701,700 |
30,791,805 |
28,023,819 |
1.02.01 |
Long-term assets |
10,323,201 |
8,809,442 |
8,392,634 |
1.02.01.03 |
Trade receivables |
236,539 |
203,185 |
128,946 |
1.02.01.03.01 |
Consumers |
236,539 |
203,185 |
128,946 |
1.02.01.06 |
Deferred taxes |
943,199 |
922,858 |
334,886 |
1.02.01.06.02 |
Deferred tax assets |
943,199 |
922,858 |
334,886 |
1.02.01.08 |
Receivables from related parties |
8,612 |
47,632 |
84,265 |
1.02.01.08.03 |
Receivables from owners of the Company |
8,612 |
47,632 |
84,265 |
1.02.01.09 |
Other noncurrent assets |
9,134,851 |
7,635,767 |
7,844,537 |
14
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
(In thousands of Brazilian reais – R$) |
|
|
| |
|
|
|
|
|
Code |
Description |
Current Year 12/31/2017 |
Prior Year 12/31/2016 |
Prior Year 12/31/2015 |
1.02.01.09.03 |
Derivatives |
203,901 |
641,357 |
1,651,260 |
1.02.01.09.04 |
Escrow deposits |
839,990 |
550,072 |
1,227,527 |
1.02.01.09.05 |
Income tax and social contribution to be offset |
61,464 |
65,535 |
167,159 |
1.02.01.09.06 |
Other taxes recoverable |
171,980 |
132,751 |
- |
1.02.01.09.07 |
Leases |
45,290 |
50,541 |
34,504 |
1.02.01.09.08 |
Concession financial asset |
6,545,668 |
5,363,144 |
3,597,474 |
1.02.01.09.09 |
Investments at cost |
116,654 |
116,654 |
116,654 |
1.02.01.09.10 |
Other receivables |
794,902 |
715,713 |
560,014 |
1.02.01.09.11 |
Sector financial asset |
355,002 |
- |
489,945 |
1.02.02 |
Investments |
1,001,550 |
1,493,752 |
1,247,631 |
1.02.02.01 |
Equity interests |
1,001,550 |
1,493,752 |
1,247,631 |
1.02.02.01.04 |
Other equity interests |
- |
1,493,752 |
1,247,631 |
1.02.03 |
Property, plant and equipment |
9,787,125 |
9,712,998 |
9,173,217 |
1.02.03.01 |
PP&E - in service |
9,535,933 |
9,462,696 |
8,499,051 |
1.02.03.03 |
PP&E - in progress |
251,192 |
250,302 |
674,166 |
1.02.04 |
Intangible assets |
10,589,824 |
10,775,613 |
9,210,337 |
1.02.04.01 |
Intangible assets |
10,589,824 |
10,775,613 |
9,210,337 |
15
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
| |
|
|
|
|
|
Code |
Description |
Current Year 12/31/2017 |
Prior Year 12/31/2016 |
Prior Year 12/31/2015 |
2 |
Total liabilities |
41,282,912 |
42,170,992 |
40,532,471 |
2.01 |
Current liabilities |
11,378,688 |
9,018,493 |
9,524,873 |
2.01.01 |
Payroll and related taxes |
116,080 |
131,707 |
79,924 |
2.01.01.02 |
Payroll taxes |
116,080 |
131,707 |
79,924 |
2.01.01.02.01 |
Estimated payroll |
116,080 |
131,707 |
79,924 |
2.01.02 |
Trade payables |
3,296,870 |
2,728,131 |
3,161,210 |
2.01.02.01 |
Domestic suppliers |
3,296,870 |
2,728,131 |
3,161,210 |
2.01.03 |
Taxes payable |
710,303 |
681,544 |
653,342 |
2.01.03.01 |
Federal taxes |
300,748 |
260,607 |
265,126 |
2.01.03.01.01 |
Income tax and social contribution |
81,457 |
57,227 |
43,249 |
2.01.03.01.02 |
PIS (tax on revenue) |
32,486 |
28,759 |
33,199 |
2.01.03.01.03 |
COFINS (tax on revenue) |
141,757 |
126,939 |
159,317 |
2.01.03.01.04 |
Other federal taxes |
45,048 |
47,682 |
29,361 |
2.01.03.02 |
State taxes |
403,512 |
416,102 |
384,151 |
2.01.03.02.01 |
ICMS (state VAT) |
403,492 |
416,096 |
384,151 |
2.01.03.02.02 |
State taxes - other |
20 |
6 |
- |
2.01.03.03 |
Municipal taxes |
6,043 |
4,835 |
4,065 |
2.01.03.03.01 |
Other municipal taxes |
6,043 |
4,835 |
4,065 |
2.01.04 |
Borrowings |
5,292,679 |
3,422,923 |
3,640,314 |
2.01.04.01 |
Borrowings |
3,589,606 |
1,875,648 |
2,949,922 |
2.01.04.01.01 |
In local currency |
1,258,329 |
1,260,527 |
1,287,278 |
2.01.04.01.02 |
In foreign currency |
2,331,277 |
615,121 |
1,662,644 |
2.01.04.02 |
Debentures |
1,703,073 |
1,547,275 |
690,392 |
2.01.04.02.01 |
Debentures |
1,703,073 |
1,547,275 |
690,392 |
2.01.05 |
Other liabilities |
1,962,756 |
2,054,188 |
1,990,083 |
2.01.05.02 |
Others |
1,962,756 |
2,054,188 |
1,990,083 |
2.01.05.02.01 |
Dividends and interest on capital payable |
297,744 |
232,851 |
221,855 |
2.01.05.02.04 |
Derivatives |
10,230 |
6,055 |
981 |
2.01.05.02.05 |
Sector financial liability |
40,111 |
597,515 |
- |
16
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
(In thousands of Brazilian reais – R$) |
|
|
| |
|
|
|
|
|
Code |
Description |
Current Year 12/31/2017 |
Prior Year 12/31/2016 |
Prior Year 12/31/2015 |
2.01.05.02.06 |
Use of public asset |
10,965 |
10,857 |
9,457 |
2.01.05.02.07 |
Other payables |
961,306 |
807,623 |
904,971 |
2.01.05.02.08 |
Regulatory charges |
581,600 |
366,078 |
852,017 |
2.01.05.02.09 |
Post-employment benefit obligation |
60,800 |
33,209 |
802 |
2.02 |
Noncurrent liabilities |
18,717,880 |
22,779,831 |
20,877,460 |
2.02.01 |
Borrowings |
14,875,904 |
18,621,065 |
18,092,904 |
2.02.01.01 |
Borrowings |
7,402,450 |
11,168,393 |
11,712,865 |
2.02.01.01.01 |
In local currency |
4,884,253 |
6,293,533 |
6,438,701 |
2.02.01.01.02 |
In foreign currency |
2,518,197 |
4,874,860 |
5,274,164 |
2.02.01.02 |
Debentures |
7,473,454 |
7,452,672 |
6,380,039 |
2.02.01.02.01 |
Debentures |
7,473,454 |
7,452,672 |
6,380,039 |
2.02.02 |
Other liabilities |
1,631,253 |
2,001,356 |
782,427 |
2.02.02.02 |
Others |
1,631,253 |
2,001,356 |
782,427 |
2.02.02.02.03 |
Trade payables |
128,438 |
129,781 |
633 |
2.02.02.02.04 |
Private pension plan |
880,360 |
1,019,233 |
474,318 |
2.02.02.02.05 |
Derivatives |
84,576 |
112,207 |
33,205 |
2.02.02.02.06 |
Sector financial liability |
8,385 |
317,406 |
- |
2.02.02.02.07 |
Use of public asset |
83,766 |
86,624 |
83,124 |
2.02.02.02.08 |
Other payables |
426,889 |
309,292 |
191,147 |
2.02.02.02.09 |
Federal taxes |
18,839 |
26,813 |
- |
2.02.03 |
Deferred taxes |
1,249,589 |
1,324,134 |
1,432,594 |
2.02.03.01 |
Deferred income tax and social contribution |
1,249,589 |
1,324,134 |
1,432,594 |
2.02.04 |
Provisions |
961,134 |
833,276 |
569,535 |
2.02.04.01 |
Tax, social security, labor and civil provisions |
961,134 |
833,276 |
569,535 |
2.02.04.01.01 |
Tax provisions |
347,291 |
288,389 |
184,362 |
2.02.04.01.02 |
Social security and labor provisions |
224,258 |
222,001 |
171,990 |
2.02.04.01.04 |
Civil provisions |
291,388 |
236,915 |
194,530 |
2.02.04.01.05 |
Others |
98,197 |
85,971 |
18,653 |
2.03 |
Consolidated equity |
11,186,344 |
10,372,668 |
10,130,138 |
17
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
(In thousands of Brazilian reais – R$) |
|
|
| ||
|
|
|
|
| |
Code |
Description |
Current Year 12/31/2017 |
Prior Year 12/31/2016 |
Prior Year 12/31/2015 | |
2.03.01 |
Issued capital |
5,741,284 |
5,741,284 |
5,348,312 | |
2.03.02 |
Capital reserves |
468,014 |
468,015 |
468,082 | |
2.03.04 |
Earnings reserves |
2,916,736 |
1,995,355 |
1,672,481 | |
2.03.04.01 |
Legal reserve |
798,090 |
739,102 |
694,058 | |
2.03.04.02 |
Statutory reserve |
2,118,646 |
1,248,433 |
978,423 | |
2.03.04.08 |
Additional dividend proposed |
- |
7,820 |
- | |
2.03.08 |
Other comprehensive income |
(164,506) |
(234,634) |
185,321 | |
2.03.09 |
Noncontrolling interests |
2,224,816 |
2,402,648 |
2,455,942 | |
18
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
| ||
|
|
|
|
| |
Code |
Description |
Current Year 01/01/2017 to 12/31/2017 |
Prior Year 01/01/2016 to 12/31/2016 |
Prior Year 01/01/2015 to 12/31/2015 | |
3.01 |
Revenue from sale of energy and/or services |
26,744,905 |
19,112,089 |
20,599,212 | |
3.02 |
Cost of sales and/or services |
(21,747,273) |
(14,806,069) |
(16,268,045) | |
3.02.01 |
Cost of electric energy |
(16,901,518) |
(11,200,242) |
(13,311,747) | |
3.02.02 |
Cost of operation |
(2,771,145) |
(2,248,795) |
(1,907,198) | |
3.02.03 |
Cost of services rendered to third parties |
(2,074,610) |
(1,357,032) |
(1,049,100) | |
3.03 |
Gross profit |
4,997,632 |
4,306,020 |
4,331,167 | |
3.04 |
Operating income (expenses) |
(1,663,408) |
(1,471,999) |
(1,468,851) | |
3.04.01 |
Selling expenses |
(590,232) |
(547,251) |
(464,583) | |
3.04.02 |
General and administrative expenses |
(947,072) |
(849,416) |
(863,499) | |
3.04.05 |
Other operating expenses |
(438,494) |
(386,745) |
(357,654) | |
3.04.06 |
Share of profit (loss) of investees |
312,390 |
311,413 |
216,885 | |
3.05 |
Profit before finance income (costs) and taxes |
3,334,224 |
2,834,021 |
2,862,316 | |
3.06 |
Finance income (costs) |
(1,487,554) |
(1,453,474) |
(1,407,863) | |
3.06.01 |
Finance income |
880,314 |
1,200,503 |
1,143,247 | |
3.06.02 |
Finance costs |
(2,367,868) |
(2,653,977) |
(2,551,110) | |
3.07 |
Profit (loss) before taxes on income |
1,846,670 |
1,380,547 |
1,454,453 | |
3.08 |
Income tax and social contribution |
(603,628) |
(501,490) |
(579,176) | |
3.08.01 |
Current |
(540,618) |
(867,198) |
(12,860) | |
3.08.02 |
Deferred |
(63,010) |
365,708 |
(566,316) | |
3.09 |
Profit (loss) from continuing operations |
1,243,042 |
879,057 |
875,277 | |
3.11 |
Consolidated profit (loss) for the year |
1,243,042 |
879,057 |
875,277 | |
3.11.01 |
Attributable to owners of the Company |
1,179,750 |
900,885 |
864,940 | |
3.11.02 |
Attributable to noncontrolling interests |
63,292 |
(21,828) |
10,337 | |
3.99.01.01 |
ON |
1.16000 |
0.89000 |
0.85000 | |
3.99.02.01 |
ON |
1.16000 |
0.87000 |
0.83000 | |
19
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
| |
|
|
|
|
|
Code |
Description |
Current Year 01/01/2017 to 12/31/2017 |
Prior Year 01/01/2016 to 12/31/2016 |
Prior Year 01/01/2015 to 12/31/2015 |
4.01 |
Consolidated profit for the year |
1,243,042 |
879,057 |
875,277 |
4.02 |
Other comprehensive income |
96,000 |
(394,175) |
65,548 |
4.02.03 |
Actuarial gains (losses), net of tax effects |
96,000 |
(394,175) |
65,548 |
4.03 |
Consolidated comprehensive income for the year |
1,339,042 |
484,882 |
940,825 |
4.03.01 |
Attributtable to owners of the Company |
1,275,750 |
506,709 |
930,488 |
4.03.02 |
Attributable to noncontrolling interests |
63,292 |
(21,827) |
10,337 |
20
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Consolidated Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
| ||
|
|
|
|
| |
Code |
Description |
YTD Current Year 01/01/2017 to 12/31/2017 |
YTD Prior Year 01/01/2016 to 12/31/2016 |
YTD Prior Year 01/01/2015 to 12/31/2015 | |
6.01 |
Cash flows from operating activities |
2,034,024 |
4,634,026 |
2,557,974 | |
6.01.01 |
Cash generated from operations |
5,506,768 |
5,015,992 |
4,551,471 | |
6.01.01.01 |
Profit for the year, including income tax and social contribution |
1,846,670 |
1,380,547 |
1,454,454 | |
6.01.01.02 |
Depreciation and amortization |
1,529,052 |
1,291,165 |
1,279,902 | |
6.01.01.03 |
Provision for tax, civil and labor risks |
176,609 |
228,292 |
258,539 | |
6.01.01.04 |
Interest on debts, inflation adjustment and exchange rate changes |
1,863,311 |
2,052,959 |
1,519,819 | |
6.01.01.05 |
Private pension plan |
113,898 |
76,638 |
60,184 | |
6.01.01.06 |
Loss on disposal of noncurrent assets |
132,195 |
83,576 |
16,309 | |
6.01.01.07 |
Deferred taxes - PIS and COFINS |
963 |
(8,579) |
19,138 | |
6.01.01.08 |
Others |
(19,074) |
(1,832) |
(5,824) | |
6.01.01.09 |
Allowance for doubtful debts |
155,097 |
176,349 |
126,879 | |
6.01.01.10 |
Share of profit (loss) of investees |
(312,390) |
(311,414) |
(216,885) | |
6.01.01.11 |
Impairment |
20,437 |
48,291 |
38,956 | |
6.01.02 |
Changes in assets and liabilities |
(3,472,744) |
(381,966) |
(1,993,497) | |
6.01.02.01 |
Consumers, concessionaires and licensees |
(722,406) |
(205,828) |
(1,055,143) | |
6.01.02.02 |
Taxes recoverable |
68,184 |
128,453 |
(62,041) | |
6.01.02.04 |
Escrow deposits |
(248,128) |
756,171 |
22,827 | |
6.01.02.05 |
Sector financial asset |
(425,004) |
2,494,223 |
(858,860) | |
6.01.02.06 |
Dividends and interest on capital received |
730,178 |
83,356 |
24,050 | |
6.01.02.07 |
Receivables - CDE |
(29,354) |
186,052 |
181,141 | |
6.01.02.08 |
Concession financial assets (transmission companies) |
(56,665) |
(55,134) |
(44,244) | |
6.01.02.09 |
Other operating assets |
91,607 |
265,404 |
(82,279) | |
6.01.02.10 |
Trade payables |
565,945 |
(782,963) |
787,063 | |
6.01.02.11 |
Regulatory charges |
215,522 |
(514,935) |
808,223 | |
6.01.02.12 |
Tax, civil and labor risks paid |
(206,788) |
(216,998) |
(247,512) | |
6.01.02.13 |
Payables - CDE |
17,544 |
(70,907) |
19,696 | |
6.01.02.14 |
Income tax and social contribution paid |
(338,175) |
(875,883) |
(276,061) | |
6.01.02.15 |
Sector financial liability |
(1,089,592) |
288,144 |
(23,170) | |
6.01.02.16 |
Interest paid on debts and debentures |
(1,846,453) |
(1,570,985) |
(1,595,649) | |
21
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
(In thousands of Brazilian reais – R$) |
|
|
| ||
|
|
|
|
| |
Code |
Description |
YTD Current Year 01/01/2017 to 12/31/2017 |
YTD Prior Year 01/01/2016 to 12/31/2016 |
YTD Prior Year 01/01/2015 to 12/31/2015 | |
6.01.02.17 |
Other taxes and contributions |
(261,194) |
(63,986) |
412,703 | |
6.01.02.18 |
Other liabilities with private pension plan |
(79,724) |
(77,183) |
(112,172) | |
6.01.02.19 |
Other operating liabilities |
141,759 |
(148,967) |
107,931 | |
6.02 |
Net cash generated by (used in) investing activities |
(2,509,321) |
(3,815,219) |
(1,524,894) | |
6.02.01 |
Purchases of property, plant and equipment |
(685,856) |
(1,026,867) |
(550,003) | |
6.02.02 |
Securities, pledges and restricted deposits |
(93,933) |
(125,517) |
(147,914) | |
6.02.03 |
Gain on sales of interest in joint ventures |
- |
- |
10,454 | |
6.02.04 |
Purchases of intangible assets |
(1,884,577) |
(1,211,082) |
(877,793) | |
6.02.07 |
Sale of noncurrent assets |
26,807 |
- |
10,586 | |
6.02.08 |
Intragroup loans |
36,639 |
44,922 |
29,776 | |
6.02.10 |
Capital increase in existing investee |
91,599 |
- |
- | |
6.02.14 |
Business combination, net of cash acquired |
- |
(1,496,675) |
- | |
6.03 |
Net cash generated by (used in) financing activities |
(2,440,057) |
(336,612) |
292,267 | |
6.03.01 |
Borrowings and debentures raised |
3,398,084 |
3,774,355 |
4,532,167 | |
6.03.02 |
Repayment of principal of borrowings and debentures |
(5,273,261) |
(4,016,693) |
(4,037,685) | |
6.03.03 |
Dividends and interest on capital paid |
(336,934) |
(231,749) |
(5,204) | |
6.03.04 |
Capital increase by noncontrolling interests |
(122,791) |
467 |
7 | |
6.03.05 |
Business combination payment |
(2,514) |
(21,234) |
(61,709) | |
6.03.06 |
Repayment of derivative instruments |
(102,641) |
158,242 |
(135,309) | |
6.05 |
Increase (decrease) in cash and cash equivalents |
(2,915,354) |
482,195 |
1,325,347 | |
6.05.01 |
Cash and cash equivalents at the beginning of the year |
6,164,997 |
5,682,802 |
4,357,455 | |
6.05.02 |
Cash and cash equivalents at the end of the year |
3,249,643 |
6,164,997 |
5,682,802 | |
22
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - 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/accumulated losses |
Other comprehensive income |
Equity |
Noncontrolling interests |
Consolidated equity |
5.01 |
Opening balances |
5,741,284 |
468,014 |
1,995,355 |
- |
(234,632) |
7,970,021 |
2,402,647 |
10,372,668 |
5.03 |
Adjusted opening balances |
5,741,284 |
468,014 |
1,995,355 |
- |
(234,632) |
7,970,021 |
2,402,647 |
10,372,668 |
5.04 |
Capital transactions with shareholders |
- |
- |
(7,820) |
(276,423) |
- |
(284,243) |
(241,011) |
(525,254) |
5.04.01 |
Capital increase |
- |
- |
- |
- |
- |
- |
(122,791) |
(122,791) |
5.04.08 |
Prescribed dividends |
- |
- |
- |
3,768 |
- |
3,768 |
- |
3,768 |
5.04.09 |
Interim dividend |
- |
- |
- |
- |
- |
- |
(7,226) |
(7,226) |
5.04.10 |
Dividend proposal approved |
- |
- |
(7,820) |
(280,191) |
- |
(288,011) |
(110,994) |
(399,005) |
5.05 |
Total comprehensive income |
- |
- |
- |
1,179,750 |
96,000 |
1,275,750 |
63,292 |
1,339,042 |
5.05.01 |
Profit for the year |
- |
- |
- |
1,179,750 |
- |
1,179,750 |
63,292 |
1,243,042 |
5.05.02 |
Other comprehensive income |
- |
- |
- |
- |
96,000 |
96,000 |
- |
96,000 |
5.06 |
Internal changes in equity |
- |
- |
929,201 |
(903,327) |
(25,874) |
- |
(112) |
(112) |
5.06.01 |
Recognition of reserves |
- |
- |
58,988 |
(58,988) |
- |
- |
- |
- |
5.06.05 |
Changes in statutory reserve in the year |
- |
- |
870,213 |
(870,213) |
- |
- |
- |
- |
5.06.06 |
Realization of deemed cost of property, plant and equipment |
- |
- |
- |
39,202 |
(39,202) |
- |
- |
- |
5.06.07 |
Tax on realization of deemed cost |
- |
- |
- |
(13,328) |
13,328 |
- |
- |
- |
5.06.09 |
Other changes in noncontrolling interests |
- |
- |
- |
- |
- |
- |
(112) |
(112) |
5.07 |
Closing balances |
5,741,284 |
468,014 |
2,916,736 |
- |
(164,506) |
8,961,528 |
2,224,816 |
11,186,344 |
23
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - 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/accumulated losses |
Other comprehensive income |
Equity |
Noncontrolling interests |
Consolidated equity |
5.01 |
Opening balances |
5,348,312 |
468,082 |
1,672,481 |
- |
185,320 |
7,674,195 |
2,455,943 |
10,130,138 |
5.03 |
Adjusted opening balances |
5,348,312 |
468,082 |
1,672,481 |
- |
185,320 |
7,674,195 |
2,455,943 |
10,130,138 |
5.04 |
Capital transactions with shareholders |
392,972 |
(68) |
(385,152) |
(218,636) |
- |
(210,884) |
(30,293) |
(241,177) |
5.04.01 |
Capital increase |
392,972 |
- |
(392,972) |
- |
- |
- |
- |
- |
5.04.08 |
Prescribed dividends |
- |
- |
- |
3,144 |
- |
3,144 |
- |
3,144 |
5.04.09 |
Dividend proposed |
- |
- |
7,820 |
(7,820) |
- |
- |
- |
- |
5.04.10 |
Dividend proposal approved |
- |
- |
- |
(213,960) |
- |
(213,960) |
(30,827) |
(244,787) |
5.04.13 |
Capital increase in subsidiaries with no change in control |
- |
(68) |
- |
- |
- |
(68) |
534 |
466 |
5.05 |
Total comprehensive income |
- |
- |
- |
900,885 |
(394,175) |
506,710 |
(21,828) |
484,882 |
5.05.01 |
Profit for the year |
- |
- |
- |
900,885 |
- |
900,885 |
(21,828) |
879,057 |
5.05.02 |
Other comprehensive income |
- |
- |
- |
- |
(394,175) |
(394,175) |
- |
(394,175) |
5.06 |
Internal changes in equity |
- |
- |
708,027 |
(682,249) |
(25,778) |
- |
(1,176) |
(1,176) |
5.06.01 |
Recognition of reserves |
- |
- |
45,044 |
(45,044) |
- |
- |
- |
- |
5.06.05 |
Changes in statutory reserve in the year |
- |
- |
662,983 |
(662,983) |
- |
- |
- |
- |
5.06.06 |
Realization of deemed cost of property, plant and equipment |
- |
- |
- |
39,058 |
(39,058) |
- |
- |
- |
5.06.07 |
Tax on realization of deemed cost |
- |
- |
- |
(13,280) |
13,280 |
- |
- |
- |
5.06.09 |
Other changes in noncontrolling interests |
- |
- |
- |
- |
- |
- |
(1,176) |
(1,176) |
5.07 |
Closing balances |
5,741,284 |
468,014 |
1,995,356 |
- |
(234,633) |
7,970,021 |
2,402,646 |
10,372,667 |
24
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - 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/accumulated losses |
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 | |
25
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Consolidated Interim Financial Statements
(In thousands of Brazilian reais – R$) |
|
|
| ||
|
|
|
|
| |
Code |
Description |
Current Year 01/01/2017 to 12/31/2017 |
Prior Year 01/01/2016 to 12/31/2016 |
Prior Year 01/01/2015 to 12/31/2015 | |
7.01 |
Revenues |
40,687,927 |
31,664,675 |
34,770,704 | |
7.01.01 |
Sales of goods and services |
37,980,073 |
29,430,560 |
33,255,632 | |
7.01.02 |
Other revenues |
2,073,422 |
1,354,022 |
1,046,669 | |
7.01.02.01 |
Revenue from construction of distribution infrastructure |
2,073,422 |
1,354,022 |
1,046,669 | |
7.01.03 |
Revenues related to construction of own assets |
789,529 |
1,056,442 |
595,282 | |
7.01.04 |
Recognition (reversal) of allowance for doubtful debts |
(155,097) |
(176,349) |
(126,879) | |
7.02 |
Inputs purchased from third parties |
(23,119,553) |
(16,150,083) |
(17,590,769) | |
7.02.01 |
Cost of sales and services |
(18,772,477) |
(12,452,018) |
(14,749,957) | |
7.02.02 |
Materials, energy, third-party services and others |
(3,611,796) |
(3,063,363) |
(2,238,817) | |
7.02.04 |
Others |
(735,280) |
(634,702) |
(601,995) | |
7.03 |
Gross value added |
17,568,374 |
15,514,592 |
17,179,935 | |
7.04 |
Retentions |
(1,534,034) |
(1,293,924) |
(1,281,726) | |
7.04.01 |
Depreciation, amortization and depletion |
(1,247,819) |
(1,038,814) |
(979,062) | |
7.04.02 |
Others |
(286,215) |
(255,110) |
(302,664) | |
7.04.02.01 |
Amortization of concession intangible asset |
(286,215) |
(255,110) |
(302,664) | |
7.05 |
Wealth created by the Company |
16,034,340 |
14,220,668 |
15,898,209 | |
7.06 |
Wealth received in transfer |
1,279,056 |
1,609,777 |
1,446,644 | |
7.06.01 |
Share of profit (loss) of investees |
312,391 |
311,414 |
216,885 | |
7.06.02 |
Finance income |
966,665 |
1,298,363 |
1,229,759 | |
7.07 |
Total wealth for distribution |
17,313,396 |
15,830,445 |
17,344,853 | |
7.08 |
Wealth distributed |
17,313,396 |
15,830,445 |
17,344,853 | |
7.08.01 |
Personnel and charges |
1,397,454 |
1,073,119 |
905,103 | |
7.08.01.01 |
Salaries and wages |
813,004 |
660,138 |
562,082 | |
7.08.01.02 |
Benefits |
516,208 |
359,604 |
298,738 | |
7.08.01.03 |
FGTS (Severance Pay Fund) |
68,242 |
53,377 |
44,283 | |
7.08.02 |
Taxes, fees and contributions |
12,181,755 |
11,066,274 |
12,910,440 | |
7.08.02.01 |
Federal |
6,696,508 |
6,109,701 |
8,207,474 | |
7.08.02.02 |
State |
5,460,674 |
4,938,832 |
4,688,978 | |
26
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
(In thousands of Brazilian reais – R$) |
|
|
| ||
|
|
|
|
| |
Code |
Description |
Current Year 01/01/2017 to 12/31/2017 |
Prior Year 01/01/2016 to 12/31/2016 |
Prior Year 01/01/2015 to 12/31/2015 | |
7.08.02.03 |
Municipal |
24,573 |
17,741 |
13,988 | |
7.08.03 |
Lenders and lessors |
2,491,145 |
2,811,995 |
2,654,033 | |
7.08.03.01 |
Interest |
2,418,119 |
2,743,600 |
2,600,948 | |
7.08.03.02 |
Rentals |
73,026 |
68,395 |
53,085 | |
7.08.04 |
Others |
1,243,042 |
879,057 |
875,277 | |
7.08.04.02 |
Dividends |
272,294 |
143,379 |
164,227 | |
7.08.04.03 |
Retained earnings / Loss for the year |
970,748 |
735,678 |
711,050 | |
27
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Management Report
Dear Shareholders,
In compliance with the law and the Bylaws of CPFL Energia S.A. (“CPFL Energia” or “Company”), the Management of the Company 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, 2017. All comparisons herein are made with consolidated figures for fiscal year 2016, except when specified otherwise.
1. Opening remarks
The year 2017 was marked by new prospects and possibilities for the CPFL group, after the conclusion of the acquisition of the controlling interest in the Company by the Chinese State Grid, the largest global player in the electricity sector. Its long-term strategic vision and technological development make a great contribution to CPFL’s next steps. The CPFL group also continued to be very active in this year, promoting improvements in its operations and management, actively participating in the discussions on improving the regulatory framework of the electricity sector and following the unfolding of the political and economic scenarios of Brazil in its markets.
The 2017 results reflected such gains and market conditions in the period. Electricity sales to final consumers (quantity of electricity billed to final consumers) totaled 53,376 GWh, an increase of 14.6%. Disregarding the positive effect of the acquisition of RGE Sul, the increase is of 2.7%. Residential and industrial classes registered growths of 2.6% and 7.1%, respectively, reflecting the low comparison base of 2016 and the resumption of economy activity, while commercial class decreased by 4.5%. Electricity sales to wholesaler’s, through other concessionaires, licensees and authorized reached 16,337 GWh, an increase of 33.3%.
In the financial sphere, CPFL group’s operating cash generation, measured by EBITDA, reached R$ 4,864 million in 2017, an increase of 17.9%, mainly reflecting the contribution from the full consolidation of RGE Sul and improved results from the Conventional Generation, Renewable Generation, Commercialization and Services segments. Consolidated leverage of CPFL Energia, as measured by the ratio of net debt to EBITDA under the criteria to measure our financial covenants, stood at 3.20 at the end of the year, remaining stable in relation to previous year. It is also important to note that the continuous decline in interest rates throughout the year are benefiting the Company, which has around three-fourths of its debt pegged to the CDI interbank rate.
In addition to the corporate movements, the Company presented numerous advances and achievements throughout the year. We promote organizational reviews in order to simplify our processes and structure, aiming at greater focus on business. It is also worth highlighting the creation of Envo, focused on the solar distributed generation market for households, and small commercial clients, the delivery of the Morro Agudo project (transmission), the inauguration of the Pedra Cheirosa wind complex (installed capacity
28
of 48 MW), the heavy investment in the asset base of CPFL Paulista, RGE and RGE Sul distributors, which will undergo the tariff review process in 2018, the ABRADEE award won by CPFL Santa Cruz as the best domestic distributor in its category and by RGE as the best distributor in the Southern region, the integration of RGE Sul, the launch of "CPFL Inova", an open innovation program created by CPFL in partnership with Endeavor Brasil, among others.
It should also be noted that CPFL promoted the merger of the distribution companies CPFL Santa Cruz, CPFL Leste Paulista, CPFL Sul Paulista and CPFL Mococa (together, the “Merged Companies”) into CPFL Jaguari (“Mergee Company”). The grouping of the concessions of the five companies was carried out through the merger of the assets held by the Merged Companies by the Mergee Company on December 31, 2017.
The disposal of the Company's control was completed on January 23, 2017, when State Grid became the controlling shareholder of CPFL Energia, with a 54.64% stake. As a result of the closing of the transaction that resulted in the direct change of control of CPFL Energia and in accordance with applicable regulation, State Grid performed a tender offer for the remaining outstanding common shares of CPFL Energia on November 30, 2017. According to the Material Fact and the Announcement to the Market released on November 30 and December 5, 2017, respectively, as a result of the auction, State Grid acquired 408,357,085 common shares issued by the Company, representing 88.44% of all the shares subject to the Tender Offer and 40.12% of the capital stock of the Company. The common shares were acquired at the price of R$ 27.69, totaling the amount of R$ 11,307,407,683.65. State Grid holds, jointly with ESC Energia, 964,521,902 common shares issued by the Company, raising its jointly interest from 54.64% to 94.75% of the total share capital of the Company.
We continue working on value initiatives for our shareholders and our investment plan (around R$ 10.4 billion for the next 5 years, being R$ 2.1 billion for 2018), with financial discipline, efforts and commitment of our teams and the trust of our new controlling shareholders, reinforcing CPFL's commitment to its long-term development strategy.
Finally, CPFL’s management remains optimistic about the advances of the Brazilian electricity sector and remains confident in its business platform, being more prepared and well positioned to face the challenges of the country.
SHAREHOLDERS’ STRUCTURE (simplified)
CPFL Energia is a holding company that owns stake in other companies:
29
Reference date: 12/31/2017
Notes:
(1) 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) RGE Sul is held by CPFL Energia (76.3893%) and by CPFL Brasil (23.4561%).
2. Comments on the macroeconomic and regulatory scenario
Macroeconomic Scenario
The year 2017 was marked by a favorable external environment, with positive influence for emerging economies, which contributed to improved expectations in our internal environment. Among the highlights are the healthy performance of the U.S. economy, which registered positive results in key activity indicators, with GDP growth of 2.3%(1) in 2017. Stronger performance came from the Eurozone and China – whose 2017 GDP were 2.5%(2) and 6.9%(2), respectively, support the views that the world economy will continue to grow – had positive impacts on the domestic scenario. According to the IMF, the global economy should grow 3.8%(2) in 2018-2019.
After two years of recession and a significant worsening of key economic indicators, 2017 marked the start of the resumption of domestic activity. Driven by strong performance by the automotive, mining and the electronic and IT goods sectors, industrial production grew 2.5%(3) in 2017, surpassing the estimates made at the start of the year. Other highlights include the reduction of excessive inventories and the gradual improvement in the business environment, which was evident from the rebound in business confidence to pre-crisis levels. According to market estimates, industrial production should grow 4.0%(3) in 2018, recovering some of the losses accumulated during the recession.
1 Source: Bureau of Economic Analysis (BEA).
2 Source: International Monetary Fund (IMF).
3 Source: Bulletin Focus (03/02/18).
30
The recovery in industrial activity during 2017 was accompanied by the recovery in the labor market and in domestic consumption. Despite the contribution from the informal sector, employment rate has though 2017 (increase of 2.1%), accompanied by an increase in real wage, which grew 3.2%(4) in 2017. The easing of prices, better unemployment rate (11.8%(5) in December,2017), nonrecurring factors that stimulate economic activity, such as withdrawals from inactive FGTS accounts, which injected R$44 million in the domestic market, positively contributed to the rebound in consumption conditions, which is a fundamental driver of growth of the Brazilian economy.
The positive shock from food supply is another positive highlight as it ensured a sharp decline in the major price indices. In 2017, IPCA and IGP-M stood at 2.9%(5) and -0.5%(6), respectively, below the floor of inflation targets. For 2018, the market projects both indices to remain at the center of the target range, at 3.7% and 4.2%, respectively(5).
In light of the very low inflation, Brazil’s central bank defined a clearly expansionist monetary policy, announcing a series of adjustments to the interest rate during the year. The benchmark Selic rate ended 2017 at 7.0%7. In February/2018 meeting, Copom approved an additional reduction of Selic Rate to 6.75%.It is worth noting that some financial institutions point to the probability of an additional reduction of 25 bps (6.5% during the course of 2018), as a clear signal from the central bank regarding stimulus to the economy.
Lastly, it is worth highlighting that some structural challenges still remain for the coming years, such as the level of idle capacity across industry, the need for productive investments and the push for reforms to make sure that public accounts remain sustainable. The elections in 2018 place on standby some of these issues, such as the debate on structural reforms, and also bring some volatility to economic projections. To sum up, the market is projecting a gradual resumption of growth for the Brazilian economy of 2.9% in 2018(3).
REGULATORY ENVIRONMENT
The main changes to the sector regulations in 2017 in the distribution segment are outlined below:
1) Update of sub-modules 4.4 and 4.4A of the Tariff Regulation Procedures (PRORET) through Normative Resolution 796 of December 12, 2017, which regulates the financial component, among others, of the estimated hydrological risk in tariff processes (adjustment or review) and the monthly determination of the Centralization Account of Dynamic Pricing Funds (CCRBT), which enables the mitigation of cash mismatch for distributors;
4 Source: LCA Consultants.
5 Source: Brazilian Institute of Geography and Statistics (IBGE).
6 Source: Fundação Getúlio Vargas (FGV).
7 Source: Brazilian Central Bank.
31
2) Order 2,705, of August 29, 2017, which determines the recalculation of CVA balance and transfer of Overcontracted Energy, for the accrual period from January 2012 to December 2014, due to the recalculation of the load made by CCEE, which allows for the compensation of variations in the cost of energy purchase incurred by distributors in this period;
3) Creation of sub-module 2.9 of PRORET through Normative Resolution 791 of November 14, 2017, which regulates and establishes eligibility criteria for requests from distribution concessionaires for Extraordinary Tariff Review, which enables greater predictability, transparency and fairness, on the part of ANEEL, in analyzing any claims from this tariff process;
4) Improvement of the Organization Standard 040/2013-ANEEL through Normative Resolution 798 of December 12, 2017, effective from July 2018, which governs the execution, by ANEEL, of Regulatory Impact Analysis (AIR) and its accompanying AIR Report as a way of promoting greater transparency and enhancing the coherence of regulatory acts issued by the regulatory agency;
5) Creation of sub-module 5.1 through Normative Resolution 800 of December 19, 2017, which establishes CDE procedures for preparing the annual budget, procedures for fixing annual quotas, definition of fund transfers from the sector fund to cover the costs of tax benefits on tariffs applicable to users of electricity distribution and transmission services, economic and financial management of the sector fund, as well as reporting and disclosure of information. These procedures provide greater transparency and predictability to distributors regarding the funds to be paid into or received from the CDE sector fund;
ELECTRICITY TARIFFS AND PRICES
Distribution Segment
· Annual Tariff Adjustment (ATA):
The following distribution companies had tariffs adjusted in March 2017:
32
The following distribution companies had tariffs adjusted in April, June and October 2017
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 the indirect subsidiary Campos Novos Energia (Enercan) use a combination of dollar and IGP-M indexes.
3. Operating Performance
ENERGY SALES
In 2017, electricity sales to final consumers (quantity of electricity billed to final consumers) totaled 53,376 GWh, an increase of 14.6% (6,798 GWh) compared to 2016, a reflect of the acquisition of RGE Sul, in October 2016. Disregarding the effect of this acquisition (in November and December 2016, and in 2017), the increase would be of 2.7% (1,219 GWh).
33
It is noteworthy the performance of the residential and industrial segments, which together accounted 63.3% of the electricity sales to final consumers:
· Residential Class: increase of 16.1%, if we consider the acquisition of RGE Sul. Disregarding the effect of this acquisition, we would have an increase of 2.6%, reflecting the low comparison base of 2016 and the resumption of economy activity.
· Commercial Class: increase of 5.2%, if we consider the acquisition of RGE Sul. Disregarding the effect of this acquisition, we would have a reduction of 4.5%, reflecting the lower sales of the distribution companies to the captive market, due to the migration of customers to the free market. This effect was partially offset by the higher sales made by the commercialization companies to free customers.
· Industrial Class: increase of 12.6%, if we consider the acquisition of RGE Sul. Disregarding the effect of this acquisition, we would have an increase of 7.1%, reflecting the higher sales made by the commercialization companies and by the assets of renewable generation (controlled by CPFL Renováveis) to free customers. This effect was partially offset by the lower sales of the distribution companies to the captive market, due to the migration of customers to the free market.
Electricity sales to wholesaler’s, through other concessionaires, licensees and authorized reached 16,337 GWh, which represented an increase of 33.3% (4.085 GWh), mainy due to the increases in sales by the commercialization companies (through bilateral contracts) and licensees, which serve residential consumers.
PERFORMANCE IN THE ELECTRICITY DISTRIBUTION SEGMENT
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.
34
Note: considering the merger of the distribution companies considerando, SAIDI would be 6.13 and SAIFI would be 5.04, in 2017.
PERFORMANCE IN THE ELECTRICITY GENERATION SEGMENT
In 2017, CPFL Energia continued its expansion in the Generation segment, with a 0.8% increase in its installed capacity, from 3,259 MW to 3,283 MW, considering its 51.60% interest in CPFL Renováveis. This increase was driven by the expansion of CPFL Renováveis.
On December 31, 2017, the portfolio of CPFL Renováveis totaled 2,103 MW of installed capacity in operation, comprising 39 SHPPs (423 MW), 45 wind farms (1,309 MW), 8 biomass-powered thermal power plants (370 MW) and 1 solar plant (1 MW). Still under construction is 1 SHPP (29.9 MW), which startup schedule is in 2020.
In June 2017, wind farms of Pedra Cheirosa Complex (Pedra Cheirosa I and II), located in the municipality of Itarema, State of Ceará, started operations on June 27, 2017, with almost a year of anticipation. The installed capacity is of 48.3 MW (enough to supply a city of 120,000 habitants).
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 Revenue
Gross operating revenue was of R$ 40,053 million, representing an increase of 30.1% (R$ 9,269 million), due to: (i) the variation of R$ 3,996 million in the sectoral financial assets and liabilities, from a liability of R$ 2,095 million in 2016 to an asset of R$ 1,901 million in 2017; (ii) the increase of 73.3% (R$ 2,600 million) in the electricity sales to wholesalers; (iii) the increase of 6.9% (R$ 1,648 million) in electricity sales to final consumers; (iv) the increase of 53.1% (R$ 719 million) in the revenue with construction of concession infrastructure; (v) the increase of 7.7% (R$ 287 million) in other operating income; and (vi) the increase of 9.8% (R$ 18 million) in the update of concession’s financial asset.
35
Deductions from operating revenue were of R$ 13,309 million, presenting an increase of 14.0% (R$ 1,636 million). Net operating revenue was of R$ 26,745 million, representing an increase of 39.9% (R$ 7,633 million).
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 | ||
2017 |
2016 | |
Net Income |
1,243,042 |
879,057 |
Depreciation and Amortization |
1,529,052 |
1,291,165 |
Assets Surplus Value Amortization |
579 |
579 |
Financial Income/Loss |
1,487,554 |
1,453,474 |
Social Contribution |
168,728 |
150,859 |
Income Tax |
434,901 |
350,631 |
EBITDA |
4,863,856 |
4,125,766 |
Operating cash flow, as measured by EBITDA, reached R$ 4,864 million, an increase of 17.9% (R$ 738 million), mainly due to the increase of 39.9% (R$ 7,633 million) in net operating revenue. This effect was partially offset by the increases of 50.9% (R$ 5,701 million) in costs with energy purchase and sector charges and of 29.1% (R$ 1,194 million) in operating costs and expenses, including expenses with private pension fund and costs with construction of concession infrastructure.
Net Income
In 2017, net income reached R$ 1,243 million, an increase of 41.4% (R$ 364 million), mainly due to the increase of 17.9% (R$ 738 million) in EBITDA. This effect was partially offset by the increases of 18.4% (R$ 238 million) in depreciation and amortization, of R$ 102 million in Income Tax and Social Contribution and of 2.3% (R$ 34 million) in net financial expenses.
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:
36
Minimum Mandatory Dividend (25%)
The Board of Directors propose the payment of R$ 280 million in dividends to holders of common shares traded on B3 S.A. - Brasil, Bolsa, Balcão (B3). This proposed amount corresponds to R$ 0.275259517 per share, related to the fiscal year of 2017.
Statutory Reserve – Working Capital Reinforcement
For this fiscal year, considering the current macro scenario with an incipient economic recovery, and also considering the uncertainties regarding hydrology, the Company's Management is proposing the allocation of R$ 747 million to the statutory reserve - working capital reinforcement.
Debt
At the close of 2017, gross financial debt (including derivatives) of the Company reached R$ 19,615 million, presenting a decrease of 8.2%. Cash and cash equivalents totaled R$ 3,250 million, a decrease of 47.3%. As such, net financial debt increased 7.7% to R$ 16,366 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.
5. Investments
In 2017, investments of R$ 2,570 million were made in business maintenance and expansion, of which R$ 1,883 million was destined to distribution, R$ 630 million to generation (R$ 621 million to CPFL Renováveis and R$ 9 million to conventional generation) and R$ 58 million to commercialization, services and others. In addition, we invested R$ 46 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’s investments in 2017 include:
Distribution: investments in expansion, maintenance, improvement, automation, modernization and strengthening the electricity system to meet market growth, in
37
operational infrastructure, customer service and research and development programs, among other areas. On December 31, 2017, our distributors had 9.4 million customers, an increase of 0.2 million customers. Our distribution network consisted of 317,720 kilometers of distribution lines (adding 2,182 kilometers of lines), including 457,602 distribution transformers (adding 7,355 transformers). Our nine distribution subsidiaries had 12,504 kilometers of high voltage distribution lines of between 34.5 kV and 138 kV (adding 323 kilometers of lines). On that date, we had 547 transformer substations, from high voltage to medium voltage, for subsequent distribution (adding 16 substations), with total transformer capacity of 21,105 MVA (adding 3,789 MVA);
Generation: In 2017 were invested R$630 million. From this amount, R$ 9 million were invested in Conventional Generation and R$ 621 million invested in Renewable Generation, mainly focused on the Pedra Cheirosa Wind Complex that began operations in June 2017 and the Boa Vista SHPP, which is still under construction.
6. Corporate Governance
The corporate governance model adopted by CPFL Energia and its subsidiaries is based on the principles of transparency, equity, accountability and corporate responsibility.
In 2017, CPFL marked 13 years since being listed on the B3 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 B3 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 members, of which 2 independent members.
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 (Management Processes, Risks and Sustainability, 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.
The Board of Executive Officers is made up of 1 Chief Executive Officer, 1 Deputy Chief of Executive Officer and 6 Vice Presidents, with terms of two years, eligible for reelection, responsible for executing the strategy of CPFL Energia and its subsidiaries as defined by the Board of Directors in line with corporate governance guidelines. To ensure alignment of governance practices, Executive Officers sit on the Boards of Directors of companies that make up the CPFL group and nominate their respective executive officers.
CPFL has a permanent Fiscal Council, 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.
38
The guidelines and documents on corporate governance are available at the Investor Relations website http://www.cpfl.com.br/ir.
7. Capital Markets
The shares of CPFL Energia, which have a free float of 5,25% (up to December 31, 2017), are listed both on the São Paulo Stock Exchange (BM&FBovespa) and the New York Stock Exchange (NYSE). In 2017, CPFL Energia shares deppreciated 23.2% on the BM&FBovespa and 25.7% on the NYSE, closing the year at R$ 19.35 per share and US$ 11.44 per ADR, respectively. The average daily trading volume in 2017 was R$ 48.6 million, of which R$ 35.9 million on the BM&FBovespa and R$ 3.9 million on the NYSE, representing a decrease of 12% over 2016. Number of trades on the BM&FBovespa decreased 55%, from a daily average of 7,049 trades in 2016 to 3,167 in 2017.
8. Sustainability and Corporate Responsibility
We develop initiatives that generate shared value between the company and its stakeholders in order to ensure competitiveness, through excellence in operations, and contribute to better economic, social and environmental conditions in the areas of influence. In line with the strategic plan of the CPFL Group, the commitments and business guidelines for sustainable development must be incorporated into the decision-making process and actions. See the highlights below.
Sustainability Platform: management tool that includes performance indicators and targets related to issues that are important for the sustainability of the CPFL Group, which are defined based on its positioning and strategy for the short, medium and long terms, as well as from the perspective of its key stakeholder groups. Starting 2018, we have incorporated the United Nation’s Sustainable Development Goals (SDG) in the Platform as part of our implementation process.
Sustainability Committee: executive management body responsible for monitoring the Platform, evaluating and recommending the inclusion of sustainability criteria and guidelines in the decision-making process, monitoring trends and critical topics for the sustainable development of the company.
Climate Change: we maintain our strategic focus on low carbon businesses and projects that aim to combat climate change and its effects, such as the internal study on carbon pricing and working together with organizations such as the Global Compact Brazil, the Brazilian Business Council for Sustainable Development (CEBDS), World Business Council for Sustainable Development (WBCSD), Fundação Getúlio Vargas (FGV), Business Initiatives on Climate (IEC), and other initiatives and business groups.
Ethics Management and Development System (SGDE): The SGDE was restructured on 8/31/2016 and was constantly monitored, in all stages, by the Board of Directors through the Management Processes, Risks and Sustainability Committee and the Audit Board, also regarding the flows of ethical records received. The SGDE is currently based on seven elements, which are considered key for the operations of the holding company and its subsidiaries in the ethics management culture. These are:
39
1- Code of Ethical Conduct;
2- Ethics and Business Conduct Committee (COMET);
3- Charter of COMET;
4- External Ethics Channel;
5- Complaints Processing Commission (CPD);
6- Disclosure Plan; and
7- Training.
We can highlight the SGDE initiatives that were implemented, such as: Selo Pró-Ética 2017. The award was given by the Federal Controller General (CGU) to a select group of 23 companies (from among 375 who registered for the awards), who foster the voluntary adoption of integrity measures and are committed to implementing actions designed to prevent, detect and remedy acts of corruption and fraud. Implementation of SGDE at RGE Sul. Workshop on SGDE, covering all direct subsidiaries of the Group. Specific Executive Channels (internal notices) resulting from COMET meetings. Integrity Week which, among other initiatives, featured a lecture by Leandro Karnal, professor at Unicamp, on the topic “Corruption, the actions each of us in our daily lives.” The Committee held eight meetings in 2017 to address topics related to ethics management and to analyze suggestions, complaints and queries received during the period.
Human Resources Management: the company ended 2017 with 13,0088 employees (12,879 in 2016), which represents a turnover rate of 17.67%9 (17.92% in 2016). The Group companies maintained their management and training programs focused on honing skills of strategic importance to the business, leadership succession, boosting productivity and occupational health and safety. Average training hours per employee stood at 75.5210 (79.8 in 2016), higher than the average of 47 hours as per the Sextant Survey 2017 for the Energy Market and 32 hours for the General Market. The company received the Learning & Performance Brasil 2017 award for its Community Electrician Training School project.
Value Network: in 2017, 90 supplier companies participated in the program and three meetings were held, which addressed the following topics: Law on Outsourcing, Workplace Safety and Risk Perception, Strategic Plan and Future Perspectives.
Community relations: (i) Culture – In 2017, the CPFL Institute expanded its operations by widening the CPFL Circuit and integrating CPFL Energia’s social programs. Some of the highlights were the sports initiatives of Energy Circuit, which this year organized running and hiking events in several cities in Rio Grande do Sul, and the inauguration, also in that state, of a community library in Nova Hartz through a partnership between the social department of CPFL Institute and Instituto Ecofuturo, which also featured a free concert by the State Youth Orchestra.
A series of special editions of the Café Filosófico CPFL program were held in venues such as MASP (with Leonardo Padura), Teatro Shopping Iguatemi Campinas (with Mia Couto, Clóvis de Barros Filho and Luiz Felipe Pondé); in partnership with the São Paulo Museum of Modern Art (MAM-SP), the “Paisagem” exhibition was held at the Art Gallery of the CPFL Institute in Campinas, an unprecedented record of the renowned museum’s collection; The nearly 150 events held in Campinas and São Paulo, which included Café Filosófico CPFL, visits to exhibitions, concerts and movie sessions, were visited by over 32,000 people; The CPFL Circuit held 136 events in 96 cities, including free sessions at Cine Solar, Cine Autorama and the São Paulo International Film Festival, as well as sports events such as running, hikes and bike rides, all of which registering a total audience of 50,000. Online audience: online streaming registered a jump from 47,000 to 167,000 viewers, as well as 132,000 followers on Facebook (115 at the end of 2016). We also reached 140,000 subscribers on the Café Filosófico and CPFL Institute pages on YouTube. (ii) Support for Municipal Councils on the Rights of Children and Adolescents (CMDCA) (1% of Income Tax) – In 2017, the Group companies donated R$850,000.00 to the Municipal Fund for Children and Adolescents of 13 municipalities in the concession area. The donation will support the Councils in implementing projects and in a specific training and institutional development program in 2018; (iii) Support to Municipal Councils for the Rights of the Elderly – CMDI (1% of Income Tax) - In 2017, the Group companies donated R$850,000.00 to the Municipal Fund for the Elderly of 2 municipalities to support technology development projects and a program focused on the elderly wing in two hospitals; (v) Volunteer Work – In 2017, 80 volunteer actions were organized in which h around 1,500 volunteers participated. The actions organized in ten cities in the concession area benefitted approximately 5,000 people directly; (v) Support to Pronon - National Program to Support Oncological Services (1% of Income Tax) - in 2017, the Group companies donated R$850,000.00 to support technological development projects at Cancer Hospitals in two municipalities in the concession area. The projects will be rolled out in 2018; (vi) Energy efficiency (0.5% of net operating income) – over R$97.7 million were invested, with about R$54.0 million going to projects targeted at consumers with low purchasing power, which resulted in: (a) the regularization of 3,057 customers; (b) the replacement of 5,746 refrigerators; (c) the replacement of 188,135 light bulbs with more efficient models (LED); (d) the installation of 5,275 solar heaters, 3,500 heat exchangers and 6,438 E-Power electronic controllers to reduce shower consumption, and the execution of educational projects; (e) the educational projects CPFL nas Escolas and the Educational Program on Energy Efficiency in Industries (PEEE), at 32 municipal and state government schools, training 14,032 students, 2,392 teachers in 32 cities at an investment of more than R$4.9 million. Moreover, the following were made more efficient: (f) 39 public buildings, 19 schools, 34 hospitals and 17 charitable institutions, at an investment of over R$5.7 million; (g) bonus residential project that involved the replacement of 7,053 refrigerators and 43,617 LED light bulbs at an investment of over R$12.8 million; (h) 4 municipal energy management projects, at investments of over R$78,900; (i) 3 commercial projects at investments of over R$3.6 million; (i) 3 industrial projects at investments of over R$4.2 million; and (k) public lighting projects that involved replacing 1,618 lamps at an investment of over R$2.0 million. Of this total, R$87.3 million (0.4%) was invested in clients and R$10.4 million (0.1%) was provisioned, in accordance with Federal Law 13,280/2016, to be transferred at an opportune time to PROCEL; (vii) Geekie Project – aims to reduce learning gaps among students and train teachers and regional managers by implementing an online adaptive learning platform. In 2017, 4,600 students from 15 public schools in Botucatu, São Paulo, and 18,000 students from 41 public schools in Caxias do Sul, Rio Grande do Sul, benefitted from the project. The investment amounted to R$2.3 million, which was financed by the Social Subcredit facility of the BNDES; (viii) Tamboro Project – aims to implement new educational methodologies by using an adaptive learning platform based on games. In 2017, 4,200 students from 14 public schools in Sumaré, São Paulo, benefitted, and the project started to be implemented in Santos, SP, where it is expected to benefit 7,600 students from 14
8 Includes RGE Sul
9 Does not include RGE Sul
10 Does not include RGE Sul
40
public schools. The investment amounted to R$1.2 million, which was financed by the Social Subcredit facility of the BNDES; (ix) ToLife Project - Implementation of a system for classifying clinical risk and organizing patient flows at emergency rooms in public hospitals and/or hospitals that serve the National Health System (SUS). In 2017, 6 health care units in Campinas, including the facility at Unicamp, 3 units in Sorocaba and one in Americana, all in São Paulo, benefitted. The investment was R$758,000, which was financed by the Social Subcredit facility of the BNDES; (x) Community Library Project – aims to democratize access to literature and contribute to the effectiveness of Federal Law 12,244/10, which determines that by 2020 all educational institutions in Brazil must have a library. In 2017, construction of three libraries continued in the state of São Paulo (Marília, Bebedouro and Campinas), and two libraries in Igrejinha and Nova Hartz, Rio Grande do Sul. The investment was R$954,000, which was financed by the Social Subcredit facility of the BNDES; and (xi) Electrician School – aims to form a group of trained electricians and mitigate the risks of a labor blackout. It is also a social investment since it offers free training for the job market, while also training future employees in the pre-employment phase. In 2017, we trained 236 new electricians, of whom 72 were hired.
41
Environment management: (i) CPFL Energia’s greenhouse gas emissions 2016 inventory received the gold medal from the Brazilian GHG Protocol Program and all inventory-related information is available at http://registropublicodeemissoes.com.br/participantes/1077; (ii) CPFL Energia stock was also selected, for the 13rd straight year, to the Corporate Sustainability Index (ISE) portfolio of the BM&FBovespa for 2017; and (iii) each Group company implemented projects to mitigate the social and environmental impacts of its projects, with the following worth mention:
Energy Generation – Foz do Chapecó HEP – Integrated Management System (SGI)
In November 2017, FCE received from the British Standards Institution (BSI), the certifying authority, an upgrade recommendation for the company’s ISO 9001 and 14001 certifications. The recommendation came after an audit conducted between November 6 and 16. In the same audit, the maintenance of the company’s OHSAS 18001 certification was recommended. Social and Environmental Management: Some of the 2017 highlights, in the social and environmental domain, were: (i) the release of more than 270,000 fingerlings into the plant reservoir as part of initiatives to repopulate the lake. The environmental license establishes the commitment to release 200,000 fingerlings/year during the period of the Operating License; (ii) the signing of the terms of the agreement with fishermen associations to transfer funds that are being used in the construction of three Fishing Support Points upstream to the plant, in the state of Santa Catarina; (iii) transfer of R$4.5 million through Tax Incentive Laws to sponsor projects that directly serve municipalities affected by the project. Notable among the projects are the construction of Museu dos Balseiros in Chapecó/SC; the maintenance of social inclusion centers for children and youth in Alpestre/RS, with free soccer and martial arts workshops; the sponsorship of theater tours and circus shows to be performed in 2018 at public schools; the project for the construction of an athletics track at the Community University of Chapecó Region (Unochapecó); support to the Brazilian Association of Cancer Patients for the purchase of electrolarynx devices for patients who lost their ability to speak after this type of neoplasm; as well as projects that value traditional dance and music groups from the region and the staging of operas and other cultural shows, all free of charge, promoting the universalization of culture around the plant. Research & Development: In 2017, FCE invested R$8.0 million in its Research & Development Program, with R$3.2 million allocated to the National Scientific and Technological Development Fund (FNDCT) and R$1.6 million allocated to the Ministry of Mines and Energy. Another R$3.2 million were directly invested in projects involving universities, research centers and technology companies. CERAN – throughout 2017 it launched and consolidated its Sustainability and External Social Investments Policy, wherein it sponsored 90 social projects and selected 34 that received investments of R$11.5 million, of which R$1.7 million came from CERAN's project incentive through its own cash and tax incentive laws, and the balance funded by partners and offsets from proponents. It launched the Ethics and Integrity in Business Conduct Program pursuant to Federal Law 12,846/2013. The Company has a certified Integrated Management System at its headquarters and in its plants (Monte Claro, Castro Alves and 14 de Julho), according to ISO standards 9001:2008, ISO 14001:2004 and OHSAS 18001:2007, which at the end of 2017, after third-party audit, were recommended for recertification; in 2017, the Ceran complex was awarded the Eloy Chaves medal for its indicators and its Workplace Safety Policy; Campos Novos HEP (Enercan) - (i) in 2017, it launched the Ethics and Integrity in Business Conduct Program pursuant to Federal Law 12,846/2013, with the target of implementing a hotline for complaints in 2018; (ii) the initiatives supported for regional development in the cultural, social and environmental and economic areas received applications from 78 projects, from which 45 were selected and received R$7.9 million in financial aid, and of that amount R$3.5 million came from ENERCAN through tax incentive laws and own cash, while the balance was funded by partnerships and offsets from proponents; (iii) for the sixth straight year, ENERCAN organized the Conservation Project for Permanent Preservation Areas (PPA) in partnership with residents along the reservoir of the Campos Novos HEP, rewarding the five best initiatives. Currently the program has approximately 45% of the lake’s neighboring residents participating in it. (iv) 2017 was marked by the celebrations of 10 years of commercial operation of the Campos Novos HEP, with the positive results earning the company, for the second time, the title as the best company in Brazil's electricity sector in Valor’s 1000 ranking – the first time was in 2013; (v) in 2017, it published its Greenhouse Gas Emissions Inventory through FGV’s GHG Protocol platform, earning the silver seal; (vi) it released 22,000 fingerlings of native fish species into Campos Novos HEP’s reservoirs, a program that has an in vivo gene bank of migrating species from the Uruguay River basin, where the fingerlings are nurtured for release; Barra Grande HEP (BAESA) - (i) In 2017, the Social and Environmental Responsibility Program received applications from 39 projects, selecting 21 projects, which received financial aid of R$5.4 million, of which 83.7% were funded by partnerships and offsets and are focused on income generation, environment, culture, sports, public safety and social development; (ii) it held the sixth edition of the Program to Encourage Conservation of the Permanent Preservation Area of the Reservoir, which rewards ten (10) residents from the region who developed the best environmental conservation and preservation practices; (iii) BAESA's transparency and correct declaration of greenhouse gas emissions (GHG) earned it the Gold Seal from the GHG Protocol. The Gold Seal is the highest honor conferred by the Program and attests to the transparency of the information provided in BAESA’s 2016 Inventory. In 2017 BAESA also received the renovation of its Carbon Credit Project for another 10 years after an audit and registration with the Verified Carbon Standard (VCS); (iv) published its Sustainability Report in the GRI G4 standard in the essential version through an audit carried out by KPMG; (v) in the environmental area, 2017 marked the end of the three (3) year cycle of the Experimental Program of the release of fingerlings of native species into the reservoir of Barra Grande HEP, with a total of 141,500 fingerlings released into the lake. The program has an in vivo gene bank of migrating species from the Uruguay River basin from where the fingerlings originate.
42
Energy distribution - (i) its Advanced Stations are periodically assessed for environmental risks and legal requirements, and a ranking system and action plan for improvements are prepared; (ii) for environmental emergencies, the distributors have agreements with a specialized company and an environmental insurance. For minor incidents, the Advanced Stations and vehicles equipped with hydraulic devices carry environmental emergency kits for immediate use; (iii) CPFL Paulista, RGE and CPFL Santa Cruz, in partnership with the municipal governments of fifteen cities in their concession areas, expanded the Arborização + Segura Project, which seeks to revitalize urban forestry by replacing trees that pose risks to residents and the power grid with species that require less pruning and coexist better with the grid.
43
9. Independent Auditors
KPMG Auditores Independentes (KPMG) was engaged by CPFL Energia to audit the financial statements of the Company as an independent auditor. In accordance with CVM Instruction 381/03, we inform that in 2017 KPMG provided services not related to external audit, whose aggregate fees were more than 5% of all fees paid for the audit service (corporate, regulatory and SOX).
For the fiscal year ended on December 31, 2017, KPMG provided, in addition to the audit of corporate and regulatory financial statements, review of interim information and SOX audit, the following services:
Nature |
Contract |
Duration | ||
Comfort letter for issue of debentures |
|
12/28/2016 |
|
Fiscal Years from 2017 to 2021 |
Compliance with financial covenants |
|
12/28/2016 |
|
Fiscal Years from 2017 to 2021 |
Previously agreed procedures – Audit of R&D projects |
|
08/18/2016 |
|
24 months |
Other previously agreed procedures |
|
08/03/2017 |
|
Less than 1 year |
Accounting reports for corporate restructurings |
|
09/01/2017 |
|
Less than 1 year |
Tax revision – Bookkeeping and Tax Accounting (ECF) |
|
12/28/2016 |
|
Fiscal Years from 2017 to 2021 |
Other tax compliance services |
|
05/27/2016 and 09/01/2017 |
|
16 and 12 months |
Previously agreed procedures - Tax rectifications of previous years |
|
08/01/2016 |
|
12 months |
Mapping of tax risks for corporate restructurings |
|
08/31/2016 |
|
12 months |
Audit of Sustainability Report of joint venture |
|
2017 |
|
12 months |
Due Diligence |
|
02/23/2016 |
|
20 months |
We contracted a total of R$ 2.508 thousand for the above services, which corresponds to approximately 60% of the fees for external audit of the corporate and regulatory financial statements, revision of interim information and SOX audit for the fiscal year 2017, of the Company and its subsidiaries.
44
The hiring of independent auditors, in accordance with the Bylaws, is recommended by the Audit Board. The Board of Directors deliberates on the selection or removal of independent auditors.
Pursuant to CVM Instruction 381/03, KPMG represented to the Management of CPFL Energia that the provision of the above-mentioned services does not affect the independence and objectivity required for the performance of 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 2017. 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.
45
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
CPFL Energia S.A. |
Statements of financial position at December 31, 2017 and 2016 |
(In thousands of Brazilian reais - R$) |
|
Note |
Parent company |
|
Consolidated | ||||
ASSETS |
|
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 | |||
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
5 |
6,581 |
|
64,973 |
|
3,249,642 |
|
6,164,997 |
Consumers, concessionaires and licensees |
6 |
- |
|
- |
|
4,301,283 |
|
3,765,893 |
Dividends and interest on capital |
12 |
204,807 |
|
642,978 |
|
56,145 |
|
73,328 |
Income tax and social contribution to be offset |
7 |
17,051 |
|
53,246 |
|
88,802 |
|
143,943 |
Other taxes recoverable |
7 |
46,699 |
|
29,589 |
|
306,244 |
|
259,905 |
Derivatives |
33 |
- |
|
- |
|
444,029 |
|
163,241 |
Sector financial asset |
8 |
- |
|
- |
|
210,834 |
|
- |
Concession financial asset |
10 |
- |
|
- |
|
23,736 |
|
10,700 |
Other receivables |
11 |
243 |
|
229 |
|
900,498 |
|
797,181 |
Total current assets |
|
275,382 |
|
791,016 |
|
9,581,212 |
|
11,379,187 |
|
|
|
|
|
|
|
|
|
Noncurrent assets |
|
|
|
|
|
|
|
|
Consumers, concessionaires and licensees |
6 |
- |
|
- |
|
236,539 |
|
203,185 |
Intragroup loans |
30 |
127,147 |
|
52,582 |
|
8,612 |
|
47,631 |
Escrow deposits |
21 |
665 |
|
710 |
|
839,990 |
|
550,072 |
Income tax and social contribution to be offset |
7 |
- |
|
- |
|
61,464 |
|
65,535 |
Other taxes recoverable |
7 |
- |
|
- |
|
171,980 |
|
132,751 |
Sector financial assets |
8 |
- |
|
- |
|
355,003 |
|
- |
Derivatives |
33 |
- |
|
- |
|
203,901 |
|
641,357 |
Deferred tax assets |
9 |
145,779 |
|
171,073 |
|
943,199 |
|
922,858 |
Advances for future capital increases |
12 |
350,000 |
|
- |
|
- |
|
- |
Concession financial asset |
10 |
- |
|
- |
|
6,545,668 |
|
5,363,144 |
Investments at cost |
|
- |
|
- |
|
116,654 |
|
116,654 |
Other receivables |
11 |
5,761 |
|
26,261 |
|
840,192 |
|
766,253 |
Investments |
12 |
8,557,673 |
|
7,866,100 |
|
1,001,550 |
|
1,493,753 |
Property, plant and equipment |
13 |
1,170 |
|
1,199 |
|
9,787,125 |
|
9,712,998 |
Intangible assets |
14 |
71 |
|
24 |
|
10,589,824 |
|
10,775,613 |
Total noncurrent assets |
|
9,188,266 |
|
8,117,948 |
|
31,701,701 |
|
30,791,805 |
|
|
|
|
|
|
|
|
|
Total assets |
|
9,463,648 |
|
8,908,964 |
|
41,282,912 |
|
42,170,992 |
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, 2017 - CPFL Energia S.A.
|
CPFL Energia S.A. |
Statements of financial position at December 31, 2017 and 2016 |
(In thousands of Brazilian reais - R$) |
|
Note |
|
Parent company |
|
Consolidated | ||||
LIABILITIES AND EQUITY |
|
|
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 | |||
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Trade payables |
15 |
|
1,644 |
|
3,760 |
|
3,296,870 |
|
2,728,130 |
Borrowings |
16 |
|
- |
|
- |
|
3,589,607 |
|
1,875,648 |
Debentures |
17 |
|
1,938 |
|
15,334 |
|
1,703,073 |
|
1,547,275 |
Private pension plan |
18 |
|
- |
|
- |
|
60,801 |
|
33,209 |
Regulatory charges |
19 |
|
- |
|
- |
|
581,600 |
|
366,078 |
Income tax and social contribution payable |
20 |
|
- |
|
- |
|
81,457 |
|
57,227 |
Other taxes, fees and contributions |
20 |
|
717 |
|
454 |
|
628,846 |
|
624,317 |
Dividends |
|
|
281,919 |
|
218,630 |
|
297,744 |
|
232,851 |
Estimated payroll |
|
|
- |
|
- |
|
116,080 |
|
131,707 |
Derivatives |
33 |
|
- |
|
- |
|
10,230 |
|
6,055 |
Sector financial liability |
8 |
|
- |
|
- |
|
40,111 |
|
597,515 |
Use of public asset |
|
|
- |
|
- |
|
10,965 |
|
10,857 |
Other payables |
22 |
|
17,594 |
|
17,577 |
|
961,306 |
|
807,623 |
Total current liabilities |
|
|
303,812 |
|
255,755 |
|
11,378,688 |
|
9,018,492 |
|
|
|
|
|
|
|
|
|
|
Noncurrent liabilities |
|
|
|
|
|
|
|
|
|
Trade payables |
15 |
|
- |
|
- |
|
128,438 |
|
129,781 |
Borrowings |
16 |
|
- |
|
- |
|
7,402,450 |
|
11,168,394 |
Debentures |
17 |
|
184,388 |
|
612,251 |
|
7,473,454 |
|
7,452,672 |
Private pension plan |
18 |
|
- |
|
- |
|
880,360 |
|
1,019,233 |
Other taxes, fees and contributions |
20 |
|
- |
|
- |
|
18,839 |
|
26,814 |
Deferred tax liabilities |
9 |
|
- |
|
- |
|
1,249,591 |
|
1,324,134 |
Provision for tax, civil and labor risks |
21 |
|
600 |
|
1,008 |
|
961,134 |
|
833,276 |
Derivatives |
33 |
|
- |
|
- |
|
84,576 |
|
112,207 |
Sector financial liability |
8 |
|
- |
|
- |
|
8,385 |
|
317,406 |
Use of public asset |
|
|
- |
|
- |
|
83,766 |
|
86,624 |
Allowance for investment losses |
12 |
|
- |
|
19,302 |
|
- |
|
- |
Other payables |
22 |
|
13,320 |
|
50,628 |
|
426,889 |
|
309,292 |
Total noncurrent liabilities |
|
|
198,308 |
|
683,189 |
|
18,717,881 |
|
22,779,832 |
|
|
|
|
|
|
|
|
|
|
Equity |
23 |
|
|
|
|
|
|
|
|
Issued capital |
|
|
5,741,284 |
|
5,741,284 |
|
5,741,284 |
|
5,741,284 |
Capital reserves |
|
|
468,014 |
|
468,014 |
|
468,014 |
|
468,014 |
Legal reserve |
|
|
798,090 |
|
739,102 |
|
798,090 |
|
739,102 |
Statutory reserve - concession financial asset |
|
|
826,600 |
|
702,928 |
|
826,600 |
|
702,928 |
Statutory reserve - working capital improvement |
|
|
1,292,046 |
|
545,505 |
|
1,292,046 |
|
545,505 |
Dividend |
|
|
- |
|
7,820 |
|
- |
|
7,820 |
Accumulated comprehensive income |
|
|
(164,506) |
|
(234,633) |
|
(164,506) |
|
(234,633) |
Retained earnings |
|
|
- |
|
- |
|
- |
|
- |
|
|
|
8,961,528 |
|
7,970,020 |
|
8,961,528 |
|
7,970,021 |
Equity attributable to noncontrolling interests |
|
|
- |
|
- |
|
2,224,816 |
|
2,402,648 |
Total equity |
|
|
8,961,528 |
|
7,970,020 |
|
11,186,344 |
|
10,372,668 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
|
9,463,648 |
|
8,908,964 |
|
41,282,912 |
|
42,170,992 |
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, 2017 - CPFL Energia S.A.
|
CPFL Energia S.A. |
Statements of income for the years ended December 31, 2017 and 2016 |
(In thousands of Brazilian reais, except earnings per share) |
|
Note |
Parent company |
|
Consolidated | ||||
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net operating revenue |
25 |
1 |
|
1,713 |
|
26,744,905 |
|
19,112,089 |
Cost of electric energy services |
|
|
|
|
|
|
|
|
Cost of electric energy |
26 |
- |
|
- |
|
(16,901,518) |
|
(11,200,242) |
Cost of operation |
27 |
- |
|
- |
|
(2,771,145) |
|
(2,248,795) |
Cost of services rendered to third parties |
27 |
- |
|
- |
|
(2,074,611) |
|
(1,357,032) |
|
|
|
|
|
|
|
|
|
Gross profit |
|
1 |
|
1,713 |
|
4,997,632 |
|
4,306,020 |
Operating expenses |
27 |
|
|
|
|
|
|
|
Selling expenses |
|
- |
|
- |
|
(590,232) |
|
(547,251) |
General and administrative expenses |
|
(42,771) |
|
(50,860) |
|
(947,072) |
|
(849,416) |
Other operating expenses |
|
- |
|
- |
|
(438,494) |
|
(386,746) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from electric energy services |
|
(42,770) |
|
(49,147) |
|
3,021,834 |
|
2,522,608 |
|
|
|
|
|
|
|
|
|
Equity interests in subsidiaries, associates and joint ventures |
12 |
1,349,766 |
|
922,362 |
|
312,390 |
|
311,414 |
Finance income (costs) |
28 |
|
|
|
|
|
|
|
Finance income |
|
12,983 |
|
70,878 |
|
880,314 |
|
1,200,503 |
Finance costs |
|
(69,454) |
|
(53,694) |
|
(2,367,868) |
|
(2,653,977) |
|
|
(56,471) |
|
17,183 |
|
(1,487,554) |
|
(1,453,474) |
Profit before taxes |
|
1,250,525 |
|
890,398 |
|
1,846,670 |
|
1,380,547 |
Social contribution |
9 |
(16,950) |
|
(1,075) |
|
(168,728) |
|
(150,859) |
Income tax |
9 |
(53,825) |
|
11,562 |
|
(434,901) |
|
(350,631) |
|
|
(70,775) |
|
10,487 |
|
(603,629) |
|
(501,490) |
|
|
|
|
|
|
|
|
|
Profit for the year |
|
1,179,750 |
|
900,885 |
|
1,243,042 |
|
879,057 |
|
|
|
|
|
|
|
|
|
Profit for the year attributable to owners of the Company |
|
|
|
|
|
1,179,750 |
|
900,885 |
Profit (loss) for the year attributable to noncontrolling interests |
|
|
|
|
|
63,292 |
|
(21,828) |
Basic earnings per share attributable to owners of the Company |
24 |
|
|
|
|
1.16 |
|
0.89 |
Diluted earnings per share attributable to owners of the Company |
24 |
|
|
|
|
1.15 |
|
0.87 |
The accompanying notes are an integral part of these financial statements
48
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
CPFL Energia S.A. |
Statements of comprehensive income for the years ended December 31, 2017 and 2016 |
(In thousands of Brazilian reais - R$) |
|
|
Parent company | ||
|
|
2017 |
|
2016 |
Profit for the year |
|
1,179,750 |
|
900,885 |
|
|
|
|
|
Other comprehensive income |
|
|
|
|
Items that will not be reclassified subsequently to profit or loss |
|
|
|
|
Comprehensive income for the year of subsidiaries |
|
96,000 |
|
(394,175) |
|
|
|
|
|
Total comprehensive income for the year - individual |
|
1,275,750 |
|
506,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated | ||
|
|
2017 |
|
2016 |
Profit for the year |
|
1,243,042 |
|
879,057 |
|
|
|
|
|
Other comprehensive income |
|
|
|
|
Items that will not be reclassified subsequently to profit or loss |
|
|
|
|
- Actuarial gains (losses), net of tax effects |
|
96,000 |
|
(394,175) |
|
|
|
|
|
Total comprehensive income for the year |
|
1,339,042 |
|
484,882 |
Attributable to owners of the Company |
|
1,275,750 |
|
506,709 |
Attributable to noncontrolling interests |
|
63,292 |
|
(21,828) |
The accompanying notes are an integral part of these financial statements
49
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
CPFL Energia S.A. |
Statements of changes in shareholders' equity for the year ended December 31, 2017 and 2016 |
(In thousands of Brazilian reais - R$) |
|
Earning reserves |
|
Accumulated comprehensive income |
|
Noncontrolling interests | ||||||||||||||||||||
|
|
|
|
|
|
|
Statutory reserves |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Issued capital |
|
Capital reserve |
Legal reserve |
|
Concession financial asset |
Working capital improvement |
Dividend |
|
Deemed cost |
|
Private pension plan |
Retained earnings |
Total |
|
Accumulated comprehensive income |
|
Other equity components |
|
Total equity | |||||
Balance at December 31, 2015 |
5,348,312 |
|
468,082 |
|
694,058 |
|
585,450 |
|
392,972 |
|
- |
|
457,491 |
|
(272,170) |
|
- |
|
7,674,196 |
|
15,320 |
|
2,440,623 |
|
10,130,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(394,175) |
|
900,885 |
|
506,710 |
|
- |
|
(21,828) |
|
484,882 |
Profit for the year |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
900,885 |
|
900,885 |
|
- |
|
(21,828) |
|
879,057 |
Other comprehensive income - actuarial gains (losses) |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(394,175) |
|
- |
|
(394,175) |
|
- |
|
- |
|
(394,175) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internal changes in equity |
- |
|
- |
|
45,044 |
|
117,478 |
|
545,505 |
|
- |
|
(25,778) |
|
- |
|
(682,249) |
|
- |
|
(1,748) |
|
573 |
|
(1,176) |
Realization of deemed cost of property, plant and equipment |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(39,058) |
|
- |
|
39,058 |
|
- |
|
(2,649) |
|
2,649 |
|
- |
Tax effect on realization of deemed cost |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
13,280 |
|
- |
|
(13,280) |
|
- |
|
901 |
|
(901) |
|
- |
Recognition of legal reserve |
- |
|
- |
|
45,044 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(45,044) |
|
- |
|
- |
|
- |
|
- |
Changes in statutory reserve in the year |
- |
|
- |
|
- |
|
117,478 |
|
545,505 |
|
- |
|
- |
|
- |
|
(662,983) |
|
- |
|
- |
|
- |
|
- |
Other changes in noncontrolling interests |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(1,176) |
|
(1,176) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital transactions with owners |
392,972 |
|
(68) |
|
- |
|
- |
|
(392,972) |
|
7,820 |
|
- |
|
- |
|
(218,636) |
|
(210,884) |
|
- |
|
(30,292) |
|
(241,176) |
Capital increase |
392,972 |
|
- |
|
- |
|
- |
|
(392,972) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
Prescribed dividend |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
3,144 |
|
3,144 |
|
|
- |
|
3,144 | |
Additional dividend proposed |
- |
|
- |
|
- |
|
- |
|
- |
|
7,820 |
|
- |
|
- |
|
(7,820) |
|
- |
|
|
- |
|
- | |
Dividend distributed to noncontrollers |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(30,827) |
|
(30,827) |
Dividend proposal approved |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(213,960) |
|
(213,960) |
|
- |
|
- |
|
(213,960) |
Capital increase in subsidiaries with no change in control |
- |
|
(68) |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(68) |
|
- |
|
535 |
|
467 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2016 |
5,741,284 |
|
468,014 |
|
739,102 |
|
702,928 |
|
545,505 |
|
7,820 |
|
431,713 |
|
(666,346) |
|
- |
|
7,970,021 |
|
13,572 |
|
2,389,076 |
|
10,372,668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
96,000 |
|
1,179,750 |
|
1,275,750 |
|
- |
|
63,292 |
|
1,339,042 |
Profit for the year |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
1,179,750 |
|
1,179,750 |
|
- |
|
63,292 |
|
1,243,042 |
Other comprehensive income - actuarial gains (losses) |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
96,000 |
|
- |
|
96,000 |
|
- |
|
- |
|
96,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Internal changes in equity |
- |
|
- |
|
58,988 |
|
123,673 |
|
746,541 |
|
- |
|
(25,873) |
|
- |
|
(903,327) |
|
- |
|
(1,739) |
|
1,625 |
|
(113) |
Realization of deemed cost of property, plant and equipment |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(39,202) |
|
- |
|
39,202 |
|
- |
|
(2,634) |
|
2,634 |
|
- |
Tax effects on realization of deemed cost |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
13,329 |
|
- |
|
(13,329) |
|
- |
|
896 |
|
(896) |
|
- |
Recognition of legal reserve |
- |
|
- |
|
58,988 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(58,988) |
|
- |
|
- |
|
- |
|
- |
Changes in statutory reserve in the year |
- |
|
- |
|
- |
|
123,673 |
|
746,541 |
|
- |
|
- |
|
- |
|
(870,213) |
|
- |
|
- |
|
- |
|
- |
Other changes in noncontrolling interests |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(113) |
|
(113) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital transactions with owners |
- |
|
- |
|
- |
|
- |
|
- |
|
(7,820) |
|
- |
|
- |
|
(276,423) |
|
(284,243) |
|
- |
|
(241,011) |
|
(525,254) |
Capital increase (decrease) |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(122,791) |
|
(122,791) |
Prescribed dividend |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
3,768 |
|
3,768 |
|
- |
|
- |
|
3,768 |
Interim dividend |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(7,226) |
|
(7,226) |
Additional dividend proposed |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
Dividend proposal approved |
- |
|
- |
|
- |
|
- |
|
- |
|
(7,820) |
|
- |
|
- |
|
(280,191) |
|
(288,011) |
|
- |
|
(110,994) |
|
(399,005) |
Capital increase in subsidiaries with no change in control |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|||||||||||||||||||||||||
Balance at December 31, 2017 |
5,741,284 |
|
468,014 |
|
798,090 |
|
826,600 |
|
1,292,046 |
|
- |
|
405,840 |
|
(570,346) |
|
- |
|
8,961,528 |
|
11,833 |
|
2,212,983 |
|
11,186,344 |
The accompanying notes are an integral part of these financial statements.
50
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
CPFL Energia S.A. |
Statements of cash flow for the years ended December 30, 2017 and 2016 |
(In thousands of Brazilian reais - R$) |
|
|
Parent Company |
|
Consolidated | ||||||||
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 | ||||
|
|
|
|
|
|
|
|
| ||||
Profit before taxes |
|
1,250,525 |
|
890,398 |
|
1,846,670 |
|
1,380,547 | ||||
Adjustment to reconcile profit to cash from operating activities |
|
|
|
|
|
|
|
| ||||
Depreciation and amortization |
|
217 |
|
193 |
|
1,529,052 |
|
1,291,165 | ||||
Provision for tax, civil and labor risks |
|
61 |
|
425 |
|
176,609 |
|
228,292 | ||||
Allowance for doubtful accounts |
|
- |
|
- |
|
155,097 |
|
176,349 | ||||
Interest on debts, inflation adjustment and exchange rate changes |
|
61,520 |
|
42,395 |
|
1,863,311 |
|
2,052,959 | ||||
Pension plan expense (income) |
|
- |
|
- |
|
113,898 |
|
76,638 | ||||
Equity interests in associates and joint ventures |
|
(1,349,766) |
|
(922,362) |
|
(312,390) |
|
(311,414) | ||||
Impairment |
|
- |
|
- |
|
20,437 |
|
48,291 | ||||
Loss (gain) on disposal of noncurrent assets |
|
- |
|
- |
|
132,195 |
|
83,576 | ||||
Deferred taxes (PIS and COFINS) |
|
- |
|
- |
|
963 |
|
(8,579) | ||||
Others |
|
- |
|
- |
|
(19,074) |
|
(1,832) | ||||
|
|
(37,443) |
|
11,049 |
|
5,506,768 |
|
5,015,992 | ||||
Decrease (increase) in operating assets |
|
|
|
|
|
|
|
| ||||
Consumers, concessionaires and licensees |
|
- |
|
- |
|
(722,406) |
|
(205,828) | ||||
Dividend and interest on capital received |
|
1,172,336 |
|
1,606,073 |
|
730,178 |
|
83,356 | ||||
Taxes recoverable |
|
65,182 |
|
3,261 |
|
68,184 |
|
128,453 | ||||
Escrow deposits |
|
68 |
|
(37) |
|
(248,128) |
|
756,171 | ||||
Sector financial asset |
|
- |
|
- |
|
(425,004) |
|
2,494,223 | ||||
Receivables - CDE |
|
- |
|
- |
|
(29,354) |
|
186,052 | ||||
Concession financial assets (transmission companies) |
|
- |
|
- |
|
(56,665) |
|
(55,134) | ||||
Other operating assets |
|
20,485 |
|
(10,033) |
|
91,607 |
|
265,404 | ||||
|
|
|
|
|
|
|
|
| ||||
Increase (decrease) in operating liabilities |
|
|
|
|
|
|
|
| ||||
Trade payables |
|
(2,116) |
|
2,603 |
|
565,945 |
|
(782,963) | ||||
Other taxes and social contributions |
|
263 |
|
(1,162) |
|
(261,194) |
|
(63,986) | ||||
Other liabilities with private pension plan |
|
- |
|
- |
|
(79,724) |
|
(77,183) | ||||
Regulatory charges |
|
- |
|
- |
|
215,522 |
|
(514,935) | ||||
Tax, civil and labor risks paid |
|
(466) |
|
(1,115) |
|
(206,788) |
|
(216,998) | ||||
Sector financial liability |
|
- |
|
- |
|
(1,089,592) |
|
288,144 | ||||
Payables - amounts provided by the CDE |
|
- |
|
- |
|
17,544 |
|
(70,907) | ||||
Other operating liabilities |
|
(37,277) |
|
18,203 |
|
141,759 |
|
(148,967) | ||||
Cash flows provided (used) by operations |
|
1,181,032 |
|
1,628,842 |
|
4,218,652 |
|
7,080,894 | ||||
Interest paid on debts and debentures |
|
(71,844) |
|
(45,470) |
|
(1,846,453) |
|
(1,570,985) | ||||
Income tax and social contribution paid |
|
(47,438) |
|
(27,117) |
|
(338,175) |
|
(875,883) | ||||
Net cash from operating activities |
|
1,061,750 |
|
1,556,255 |
|
2,034,024 |
|
4,634,026 | ||||
|
|
|
|
|
|
|
|
| ||||
Investing activities |
|
|
|
|
|
|
|
| ||||
Price paid in business combination net of cash acquired |
|
- |
|
- |
|
- |
|
(1,496,675) | ||||
Capital reduce (increase) in subsidiaries |
|
(9,400) |
|
- |
|
91,599 |
|
- | ||||
Purchases of property, plant and equipment |
|
(185) |
|
(573) |
|
(685,856) |
|
(1,026,867) | ||||
Securities, pledges and restricted deposits |
|
- |
|
(200) |
|
(93,933) |
|
(125,517) | ||||
Purchases of intangible assets |
|
(51) |
|
- |
|
(1,884,577) |
|
(1,211,082) | ||||
Sale of noncurrent assets |
|
- |
|
- |
|
26,807 |
|
- | ||||
Advances for future capital increases |
|
(383,340) |
|
(1,384,520) |
|
- |
|
- | ||||
Intragroup loans |
|
(72,199) |
|
(41,405) |
|
36,639 |
|
44,922 | ||||
|
|
|
|
|
|
|
|
| ||||
Net cash generated by (used) In investing activities |
|
(465,175) |
|
(1,426,698) |
|
(2,509,321) |
|
(3,815,219) | ||||
|
|
|
|
|
|
|
|
| ||||
Financing activities |
|
|
|
|
|
|
|
| ||||
Capital increase of noncontrolling shareholder |
|
- |
|
- |
|
(122,791) |
|
467 | ||||
Borrowings and debentures raised |
|
- |
|
609,060 |
|
3,398,084 |
|
3,774,355 | ||||
Repayment of principal of borrowings and debentures |
|
(434,000) |
|
(888,408) |
|
(5,273,261) |
|
(4,016,693) | ||||
Repayment of derivatives |
|
- |
|
(4,711) |
|
(102,641) |
|
158,242 | ||||
Dividend and interest on capital paid |
|
(220,966) |
|
(204,717) |
|
(336,934) |
|
(231,749) | ||||
Business combination payment |
|
- |
|
- |
|
(2,514) |
|
(21,234) | ||||
Net cash generated by (used in) financing activities |
|
(654,966) |
|
(488,776) |
|
(2,440,057) |
|
(336,612) | ||||
Net increase (decrease) in cash and cash equivalents |
|
(58,390) |
|
(359,219) |
|
(2,915,354) |
|
482,195 | ||||
Cash and cash equivalents at the beginning of the year |
|
64,973 |
|
424,192 |
|
6,164,997 |
|
5,682,802 | ||||
Cash and cash equivalents at the end of the year |
|
6,581 |
|
64,973 |
|
3,249,642 |
|
6,164,997 | ||||
The accompanying notes are an integral part of these financial statements.
51
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
CPFL Energia S.A. |
Statements of value added for the years ended December 31, 2017 and 2016 |
(In thousands of Brazilian reais - R$) |
|
Parent Company |
|
Consolidated | ||||
|
2017 |
|
2016 |
|
2017 |
|
2016 |
1 - Revenues |
237 |
|
2,461 |
|
40,687,927 |
|
31,664,675 |
1.1 Operating revenues |
1 |
|
1,888 |
|
37,980,073 |
|
29,430,560 |
1.2 Revenue related to the construction of own assets |
236 |
|
573 |
|
789,529 |
|
1,056,442 |
1.3 Revenue from construction of concession infrastructure |
- |
|
- |
|
2,073,423 |
|
1,354,023 |
1.4 Allowance for doubtful accounts |
- |
|
- |
|
(155,097) |
|
(176,349) |
|
|
|
|
|
|
|
|
2 - (-) Inputs |
(10,322) |
|
(13,305) |
|
(23,119,553) |
|
(16,150,083) |
2.1 Electricity purchased for resale |
- |
|
- |
|
(18,772,477) |
|
(12,452,018) |
2.2 Material |
(150) |
|
(625) |
|
(1,895,728) |
|
(1,711,064) |
2.3 Outsourced services |
(8,275) |
|
(10,420) |
|
(1,716,068) |
|
(1,352,299) |
2.4 Others |
(1,897) |
|
(2,260) |
|
(735,280) |
|
(634,701) |
|
|
|
|
|
|
|
|
3 - Gross value added (1+2) |
(10,085) |
|
(10,844) |
|
17,568,374 |
|
15,514,592 |
|
|
|
|
|
|
|
|
4 - Retentions |
(217) |
|
(193) |
|
(1,534,034) |
|
(1,293,924) |
4.1 Depreciation and amortization |
(217) |
|
(193) |
|
(1,247,819) |
|
(1,038,814) |
4.2 Amortization of intangible assets of concession |
- |
|
- |
|
(286,215) |
|
(255,110) |
|
|
|
|
|
|
|
|
5 - Net value added generated (3+4) |
(10,302) |
|
(11,037) |
|
16,034,341 |
|
14,220,668 |
|
|
|
|
|
|
|
|
6 - Value Added received in transfer |
1,391,611 |
|
998,853 |
|
1,279,055 |
|
1,609,777 |
6.1 Financial income |
41,845 |
|
76,491 |
|
966,664 |
|
1,298,363 |
6.2 Interest in subsidiaries, associates and joint ventures |
1,349,766 |
|
922,362 |
|
312,390 |
|
311,414 |
|
|
|
|
|
|
|
|
7 - Value Added to be distributed (5+6) |
1,381,309 |
|
987,815 |
|
17,313,396 |
|
15,830,445 |
|
|
|
|
|
|
|
|
8 - Distribution of value added |
|
|
|
|
|
|
|
8.1 Personnel and charges |
27,247 |
|
33,168 |
|
1,397,454 |
|
1,073,118 |
8.1.1 Direct remuneration |
15,690 |
|
17,914 |
|
813,004 |
|
660,138 |
8.1.2 Benefits |
10,184 |
|
13,978 |
|
516,208 |
|
359,604 |
8.1.3 Government severance indemnity fund for employees - F.G.T.S |
1,374 |
|
1,276 |
|
68,242 |
|
53,376 |
8.2 Taxes, fees and contributions |
104,770 |
|
483 |
|
12,181,755 |
|
11,066,274 |
8.2.1 Federal |
104,738 |
|
443 |
|
6,696,508 |
|
6,109,701 |
8.2.2 Estate |
32 |
|
40 |
|
5,460,674 |
|
4,938,832 |
8.2.3 Municipal |
- |
|
- |
|
24,572 |
|
17,742 |
8.3 Lenders and lessors |
69,541 |
|
53,279 |
|
2,491,145 |
|
2,811,995 |
8.3.1 Interest |
69,311 |
|
53,229 |
|
2,418,119 |
|
2,743,600 |
8.3.2 Rental |
230 |
|
50 |
|
73,026 |
|
68,394 |
8.4 Interest on capital |
1,179,750 |
|
900,885 |
|
1,243,042 |
|
879,057 |
8.4.1 Dividend (including additional proposed) |
250,550 |
|
192,857 |
|
272,294 |
|
143,379 |
8.4.2 Retained earnings |
929,201 |
|
708,027 |
|
970,748 |
|
735,678 |
|
1,381,309 |
|
987,815 |
|
17,313,396 |
|
15,830,445 |
The accompanying notes are an integral part of these financial statements.
52
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
CPFL ENERGIA S.A.
NOTES TO THE FINANCIAL STATEMENTS
AT DECEMBER 31, 2017 AND 2016
(Amounts in thousands of Brazilian reais – R$, unless otherwise stated)
( 1 ) OPERATIONS
CPFL Energia S.A. (“CPFL Energia” or “Company”) is a publicly-held corporation incorporated for the principal purpose of operating as a holding company, with equity interests in other companies primarily engaged in electric energy distribution, generation and commercialization activities in Brazil.
The Company’s registered office is located at Rodovia Engenheiro Miguel Noel Nascentes Burnier, km 2,5, Parque São Quirino - Campinas - SP - Brazil.
The Company has direct and indirect interests in the following subsidiaries and joint:
Energy distribution |
|
Company type |
|
Equity interest |
|
Location (state) |
|
Number of municipalities |
Approximate number of consumers (in thousands) |
Concession period |
End of the concession | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Companhia Paulista de Força e Luz ("CPFL Paulista") |
|
Publicly-held corporation |
|
Direct 100% |
|
Interior of São Paulo |
|
234 |
|
4,389 |
|
30 years |
|
November 2027 |
Companhia Piratininga de Força e Luz ("CPFL Piratininga") |
|
Publicly-held corporation |
|
Direct 100% |
|
Interior and coast of São Paulo |
|
27 |
|
1,720 |
|
30 years |
|
October 2028 |
Rio Grande Energia S.A. ("RGE") |
|
Publicly-held corporation |
|
Direct 100% |
|
Interior of Rio Grande do Sul |
|
255 |
|
1,485 |
|
30 years |
|
November 2027 |
RGE Sul Distribuidora de Energia S.A. ("RGE Sul") |
|
Publicly-held corporation |
|
Indirect 100% |
|
Interior of Rio Grande do Sul |
|
118 |
|
1,336 |
|
30 years |
|
November 2027 |
Companhia Jaguari de Energia ("CPFL Santa Cruz") (e) |
|
Privately-held corporation |
|
Direct 100% |
|
Interior of São Paulo, Paraná and Minas Gerais |
45 |
|
447 |
|
30 years |
|
July 2045 |
|
|
|
|
|
|
|
|
|
|
Installed power (MW) | ||
Energy generation (conventional and renewable sources) |
Company type |
|
Equity interest |
|
Location (state) |
|
Number of plants / type of energy |
Total |
|
CPFL share | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Geração de Energia S.A. ("CPFL Geração") |
|
Publicly-held corporation |
|
Direct 100% |
|
São Paulo and Goiás |
|
3 Hydropower (a) |
|
1295 |
|
678 |
CERAN - Companhia Energética Rio das Antas ("CERAN") |
|
Privately-held corporation |
|
Indirect 65% |
|
Rio Grande do Sul |
|
3 Hydropower |
|
360 |
|
234 |
Foz do Chapecó Energia S.A. ("Foz do Chapecó") |
|
Privately-held corporation |
|
Indirect 51% (d)
|
|
Santa Catarina and Rio Grande do Sul |
1 Hydropower |
|
855 |
|
436 | |
Campos Novos Energia S.A. ("ENERCAN") |
|
Privately-held corporation |
|
Indirect 48.72%
|
|
Santa Catarina |
|
1 Hydropower |
|
880 |
|
429 |
BAESA - Energética Barra Grande S.A. ("BAESA") |
|
Privately-held corporation |
|
Indirect 25.01% |
|
Santa Catarina and Rio Grande do Sul |
1 Hydropower |
|
690 |
|
173 | |
Centrais Elétricas da Paraíba S.A. ("EPASA") |
|
Privately-held corporation |
|
Indirect 53.34% |
|
Paraíba |
|
2 Thermal |
|
342 |
|
182 |
Paulista Lajeado Energia S.A. ("Paulista Lajeado") |
|
Privately-held corporation |
|
Indirect 59.93% (b)
|
|
Tocantins |
|
1 Hydropower |
|
903 |
|
63 |
CPFL Energias Renováveis S.A. ("CPFL Renováveis") |
|
Publicly-held corporation |
|
Indirect 51.60% |
|
(c) |
|
(c) |
|
(c) |
|
(c) |
CPFL Centrais Geradoras Ltda ("CPFL Centrais Geradoras") |
Limited liability company |
|
Direct 100% |
|
São Paulo and Minas Gerais |
6 SHPs |
|
4 |
|
4 |
Energy commercialization |
|
Company type |
|
Core activity |
|
Equity interest | |
CPFL Comercialização Brasil S.A. ("CPFL Brasil") |
|
Privately-held corporation |
|
Energy commercialization |
|
Direct 100% | |
Clion Assessoria e Comercialização de Energia Elétrica Ltda. ("CPFL Meridional") |
|
Limited liability company |
|
Commercialization and provision of energy services |
Indirect 100% | ||
CPFL Comercialização Cone Sul S.A. ("CPFL Cone Sul") |
|
Privately-held corporation |
|
Energy commercialization |
|
Indirect 100% | |
CPFL Planalto Ltda. ("CPFL Planalto") |
|
Limited liability company |
|
Energy commercialization |
|
Direct 100% | |
CPFL Brasil Varejista S.A. ("CPFL Brasil Varejista") |
|
Privately-held corporation |
|
Energy commercialization |
|
Indirect 100% | |
53
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Provision of services |
|
Company type |
|
Core activity |
|
Equity interest | |
CPFL Serviços, Equipamentos, Industria e Comércio S.A. ("CPFL Serviços") |
|
Privately-held corporation |
|
Manufacturing, commercialization, rental and maintenance of electro-mechanical equipment and service provision |
Direct 100% | ||
NECT Serviços Administrativos Ltda ("Nect") |
|
Limited liability company |
|
Provision of administrative services |
|
Direct 100% | |
CPFL Atende Centro de Contatos e Atendimento Ltda. ("CPFL Atende") |
|
Limited liability company |
|
Provision of call center services |
|
Direct 100% | |
CPFL Total Serviços Administrativos Ltda. ("CPFL Total") |
|
Limited liability company |
|
Collection services |
|
Direct 100% | |
CPFL Eficiência Energética S.A ("CPFL Eficiência") |
|
Privately-held corporation |
|
Energy efficiency management |
|
Direct 100% | |
TI Nect Serviços de Informática Ltda. ("Authi") |
|
Limited liability company |
|
Provision of IT services |
|
Direct 100% | |
CPFL GD S.A ("CPFL GD") |
|
Privately-held corporation |
|
Provision of maintenance services for energy generation companies |
Indirect 100% | ||
Others |
|
Company type |
|
Core activity |
|
Equity interest |
CPFL Jaguari de Geração de Energia Ltda ("Jaguari Geração") |
|
Limited liability company |
|
Holding company |
|
Direct 100% |
Chapecoense Geração S.A. ("Chapecoense") |
|
Privately-held corporation |
|
Holding company |
|
Indirect 51% |
Sul Geradora Participações S.A. ("Sul Geradora") |
|
Privately-held corporation |
|
Holding company |
|
Indirect 99.95% |
CPFL Telecom S.A ("CPFL Telecom") |
|
Privately-held corporation |
|
Telecommunication services |
|
Direct 100% |
CPFL Transmissão Piracicaba S.A ("CPFL Transmissão Piracicaba") |
|
Privately-held corporation |
|
Energy transmission services |
|
Indirect 100% |
CPFL Transmissora Morro Agudo S.A ("CPFL Transmissão Morro Agudo") |
|
Privately-held corporation |
|
Energy transmission services |
|
Indirect 100% |
a) CPFL Geração has 51.54% of the assured energy and power of the Serra da Mesa hydropower plant, which concession is owned by Furnas. The plants Carioba and Cariobinha are inactive while they await the position of the Ministry of Mines and Energy on the early termination of their concession and are not included in the table.
b) Paulista Lajeado holds a 7% interest in the installed power of Investco S.A. (5.94% interest in total capital).
c) CPFL Renováveis has operations in the states of São Paulo, Minas Gerais, Mato Grosso, Santa Catarina, Ceará, Rio Grande do Norte, Paraná and Rio Grande do Sul and its main activities are: (i) holding investments in companies of the renewable energy segment; (ii) identification, development, and exploration of generation potentials; and (iii) sale of electric energy. At December 31, 2017, CPFL Renováveis had a portfolio of 112 projects of 2,508.4 MW of installed capacity (2,102.6 MW in operation).
· Hydropower generation: 46 SHP’s (543.2 MW) with 39 SHPs in operation (423 MW) and 7 SHPs under development (120.2 MW);
· Wind power generation: 57 projects (1,594.1 MW) with 45 projects in operation (1,308.5 MW) and 12 projects under construction/development (285.6 MW);
· Biomass power generation: 8 plants in operation (370 MW);
· Solar power generation: 1 solar plant in operation (1.1 MW).
d) The joint venture Chapecoense has as its direct subsidiary Foz do Chapecó and fully consolidates its financial statements.
e) As described in note 12.6.2, on December 31, 2017, approval was given for the merger of the subsidiaries Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia and Companhia Luz e Força de Mococa into Companhia Jaguari de Energia, which adopted the trade name “CPFL Santa Cruz”.
Negative net working capital
As at December 31, 2017, the Company recorded in the financial statements a negative net working capital of R$ 1,797,477. The Company has been working in the plan to reduce the negative net working capital and in January 2018 the subsidiaries raised debentures in the amount of R$ 2,610,000 (note 36). In addition, the Company has history of profits and projection of profitability and cash generation, which supports and makes feasible the renegotiation plan for reduction of the Company’s cost of debt.
54
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 2 ) PRESENTATION OF THE FINANCIAL STATEMENTS
2.1 Basis of preparation
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 and the subsidiaries (“Group”) also follows the guidelines of the Accounting Manual of the Brazilian Electricity Sector and the standards laid down by the Brazilian Electricity Regulatory Agency (Agência Nacional de Energia Elétrica – ANEEL), when these do not conflict with the accounting practices adopted in Brazil and/or International Financial Reporting Standards.
Management states that all material information of the financial statements is disclosed and corresponds to what is used in the Group's management.
The financial statements were approved by Management and authorized for issue on March 12, 2018.
2.2 Basis of measurement
The financial statements has been prepared on the historical cost basis except for the following items recorded in the statements of financial position: i) derivative financial instruments measured at fair value, 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 33 – Financial Instruments.
2.3 Use of estimates and judgments
The preparation of the financial statements requires the Group’s management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
By definition, the accounting estimates are rarely the same as the actual results. Accordingly, the Group’s management review the estimates and assumptions on an ongoing basis, based on previous experience and other relevant factors. Adjustments resulting from revisions to accounting estimates are recognized in the period in which the estimates are revised and applied on a prospective basis.
The main accounts that require the adoption of estimates and assumptions, which are subject to a greater degree of uncertainty and may result in a material adjustment if these estimates and assumptions suffer significant changes in subsequent periods, are:
· Note 6 – Consumers, concessionaires and licensees (Allowance for doubtful accounts: key assumptions regarding recoverable amounts);
· Note 8 – Sector financial asset and liability (certain financial components that can start without prior methodology);
· Note 9 – Deferred tax assets and liabilities (recognition of assets: availability of future taxable profit against which the tax losses can be utilized);
· Note 10 – Concession financial asset (assumptions for fair value measurement, based on significant unobservable inputs);
55
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
· Note 11 – Other receivables (allowance for doubtful accounts: key assumptions regarding recoverable amounts);
· Note 13 – Property, plant and equipment (application of definite useful lives and key assumptions regarding recoverable amounts);
· Note 14 – Intangible assets (key assumptions regarding recoverable amounts);
· Note 18 – Private pension plan (key actuarial assumptions used in the measurement of defined benefit obligations);
· Note 21 – Provision for tax, civil and labor risks and escrow deposits (recognition and measurement: key assumptions on the probability and magnitude of outflow of resources);
· Note 25 – Net operating revenue (assumptions for measurement of unbilled supply and Distribution System Usage Tariff - TUSD ); and
· Note 33 – Financial instruments (assumptions for fair value measurement, based on significant unobservable inputs).
2.4 Functional currency and presentation currency
The Group’s functional currency is the Brazilian Real, and the individual and consolidated financial statements is being presented in thousands of reais. Figures are rounded only after sum-up of the amounts. Consequently, when summed up, the amounts stated in thousands of reais may not tally with the rounded totals.
2.5 Segment information
An operating segment is a component of the Company (i) that engages in operating activities from which it earns revenues and incurs expenses, (ii) whose operating results are regularly reviewed by Management to make decisions about resources to be allocated and assess the segment's performance, and (iii) for which individual financial information is available.
The Group’s officers use reports to make strategic decisions, segmenting the business into: (i) electric energy distribution activities (“Distribution”); (ii) electric energy generation from conventional sources activities (“Generation”); (iii) electric energy generation activities from renewable sources (“Renewables”); (iv) energy commercialization activities (“Commercialization”); (v) service activities (“Services”); and (vi) other activities not listed in the previous items.
The presentation of the operating segments includes items directly attributable to them, as well as any allocations required, including intangible assets, see note 29 for further details.
2.6 Information on equity interests
The Company's equity interests in direct and indirect subsidiaries and joint ventures are described in note 1. Except for (i) the companies ENERCAN, BAESA, Chapecoense and EPASA, which use the equity method of accounting, and (ii) the investment measured at cost by the subsidiary Paulista Lajeado in Investco S.A., all other entities are fully consolidated.
At December 31, 2017 and 2016 the noncontrolling interests in the consolidated balances refer to interests held by third parties in subsidiaries CERAN, Paulista Lajeado and CPFL Renováveis.
2.7 Statement of value added
The Company has prepared the individual and consolidated statements of value added (“DVA”) in conformity with technical pronouncement CPC 09 - Statement of Value Added, which are presented as an integral part of the financial statements in accordance with accounting practices adopted in Brazil and as supplementary information to the financial statements in accordance with IFRS, as this statement is neither provided for nor required by IFRS.
56
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 3 ) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies used in preparing the Company’s individual and consolidated financial statements are set out below. These policies have been consistently applied to all periods presented.
3.1 Cash and cash equivalents
In the statements of cash flows, cash and cash equivalents include negative balances of overdraft accounts that are immediately payable and are an integral part of the Group’s cash management.
Cash and cash equivalents comprise the balances of cash and financial investments with original maturities of three months or less from the contract date, which are subject to an insignificant risk of change in value and are used by the Company in the management of short-term obligations.
3.2 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 of distribution 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 IPCA (Extended Consumer Price Index) to the subsidiaries of the distribution segment. The financial asset of distribution is classified as available-for-sale, with the corresponding cash flow changes entry in an operating income/expense account in the statement of profit or loss for the year (notes 4 and 25).
The financial asset of the transmission companies is classified as loans and receivables, initially measured at its fair value and subsequently at amortized cost using the effective interest method.
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.
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.
3.3 Financial instruments
- Financial assets
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 Group holds the following main financial assets:
57
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
(i) Fair value through profit or loss: these are assets held for trading or designated as such upon initial recognition. The Group manages 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 Group 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 operating revenue for changes in the expectation of cash flow for the concession financial assets from the distribution subsidiaries, while changes in fair value 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
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 Group 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.
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 (assets and liabilities) are described in Note 33.
- 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.
58
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
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.
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, adding the portion of noncontrolling interests 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 interest in associates and joint ventures” 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 amortized in straight-line method.
(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 3.2.
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.
59
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
(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 present 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.
3.6 Impairment
- Financial assets
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 Group 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.
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
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 fair value less costs to sell or (ii) its value in use.
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 (more likely than not) that an outflow of economic benefits will be required to settle the obligation. When applicable, provisions are determined by discounting the expected
60
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
future cash outflows at a rate that reflects current market assessment and the risks specific to the liability. The unwinding of the discount is recognized as finance cost
3.8 Employee benefits
Certain subsidiaries have post-employment benefits and pension plans, recognized under the accrual method in accordance with CPC 33 (R1) / IAS 19 (as revised 2011) “Employee benefits”, 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 Dividend 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 receives the same treatment as dividend and is also stated in changes in equity. The withholding income tax on interest on capital is always recognized as a charge to equity with a balancing item in liabilities upon the proposal for its payment, even if not yet approved, since it meets the criterion of obligation at the time of Management’s proposal.
3.10 Revenue recognition
The operating revenue in the normal course of the subsidiaries’ activities is measured at the fair value of the consideration received or receivable. The operating revenue is recognized when there is convincing evidence that all significant risks and rewards were transferred to the buyer, it is probable that future economic benefits will flow to the entity, the associated costs can be reliably measured, and the amount of the operating revenue can be reliably measured.
The revenue from electric energy distribution is recognized when the energy is supplied. The energy distribution subsidiaries perform the reading of their customers based on a reading routine (calendar and reading route) and invoice monthly the consumption of MWh based on the reading performed for each consumer. As a result, part of the energy distributed during the month is not billed at the end of the month and, consequently, an estimate is developed by Management and recorded as “Unbilled”. This unbilled revenue estimate is calculated using as a base the total volume of energy of each distributor made available in the month and the annualized rate of technical and commercial losses. The revenue from energy generation sales is recognized based on the assured energy and at tariffs specified in the terms of the supply contracts or the current market price, as appropriate. The revenue from energy commercialization is recognized based on bilateral contracts with market agents and properly registered with the Electric Energy Commercialization Chamber – CCEE. No single consumer accounts for 10% or more of the Company’s total revenue.
61
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
The revenue from services provided is recognized when the service is provided, under a service agreement between the parties.
The 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 temporarily nondeductible 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 relating to the benefit of merged intangible, which are amortized on a straight-line basis over 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 annual 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 / 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 Group. 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.
The subsidies received through funds from the Energy Development Account - CDE (notes 25) 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 CPC 07 / IAS 20.
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 and ratification by ANEEL) for: (i) the annual tariff increase; and (ii) every four or five years, according to each concession agreement, the periodic review for purposes of reconciliation of part of Parcel B (controllable costs) and adjustment of Parcel A (non-controllable costs).
62
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
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.
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.
At the acquisition date, other liabilities are recognized at fair value, except for: (i) deferred taxes, (ii) employee benefits, and (iii) equity instruments.
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, added to the portion of noncontrolling interests, 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.
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 noncontrolling 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.
63
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
In the individual (parent company) financial statements, the financial information on subsidiaries and joint ventures is accounted for under the equity method. In the consolidated financial statements, the information on joint ventures 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, CPFL Eficiência Energética 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 12.4.
(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
A number of standards and interpretations have been issued and/or revised by the IASB and the CPC and are effective for accounting periods beginning January 1, 2017.
a) Amendments to IAS 12 / CPC 32 – Recognition of deferred tax assets for unrealized losses
Issued on January 19, 2016, the amendments to IAS 12 / CPC 32 clarify the requirements of recognition of deferred tax assets for unrealized losses on debt instruments and the method to assess whether taxable profits will be available against which the entity can utilize a deductible temporary difference, to address the diversity in practice.
The application of the amendments to IAS 12 / CPC 32 did not have material impacts on the Company’s consolidated financial statements for the year ended December 31, 2017.
b) Amendments to IAS 7 / CPC 03 (R2) – Statement of Cash Flows
Issued on January 29, 2016, the amendments to IAS 7 Disclosure Initiative require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities.
The application of the amendments to IAS 7 / CPC 03 (R2) resulted in changes in the disclosure of the movement of financial assets and liabilities the cash flows of which are classified as financing activity. The changes of these amendments to IAS 7 generated additional disclosure reflected in notes 17 – Borrowings, 18 – Debentures and 33 – Financial Instruments.
c) Annual Improvements to IFRS / 2014 – 2016 Cycle
Annually, the IASB discusses and decides on the proposed improvements to IFRS, as they are raised during the year. On December 8, 2016, the amendments relating to the 2014-2016 Cycle were issued, one of which is effective for annual periods beginning on or after January 1, 2017.
Amendments to IFRS 12 – Disclosure of interests in other entities: clarifies the scope of the standard regarding the interest of entities in other entities that are classified as held for sale or discontinued operations in accordance with IFRS 5.
Considering that the Company does not have interest in other entities that are classified as held for sale or discontinued operations, these amendments did not have effects on the disclosures and amounts recognized in the consolidated financial statements for the year ended December 31, 2017.
3.18 New standards and interpretations not yet adopted
64
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
A number of new standards and amendments to IFRS standards and interpretations have been issued by the IASB but are not yet effective for annual periods beginning on or after December 31, 2017. The Company has not adopted the following new or revised standards:
a) IFRS 9 / CPC 48 – Financial instruments
IFRS 9 / CPC 48 is effective for annual periods beginning on or after January 1, 2018.
This standard establishes new requirements for the classification and measurement of financial assets and financial liabilities. Financial assets will be classified into three categories: (i) measured at fair value through profit or loss; (ii) measured at amortized cost based on the business model in which a financial asset is managed and its contractual cash flow characteristics; and (iii) measured at fair value through other comprehensive income.
For financial liabilities, the main change relates to the requirements already established by IAS 39/ CPC 38 that changes in the fair value of a financial liability designated as at fair value through profit or loss attributable to changes in the credit risk of that liability be presented in other comprehensive income and not in the statement of profit or loss, unless such recognition results in an accounting mismatch in the statement of profit or loss.
Regarding the impairment of financial assets, IFRS 9 requires the expected credit loss model, as opposed to the incurred credit loss model mentioned in IAS 39 / CPC 38. The expected credit loss model requires that the company accounts for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. That is, it is no longer necessary for a credit event to have occurred before credit losses are recognized.
With respect to the changes relating to hedge accounting, IFRS 9 retains the three types of hedge accounting mechanisms in IAS 39, but brings greater flexibility regarding the types of instruments eligible for hedge accounting, specifically broadening the types of instruments that qualify as hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has been renewed and replaced with the principle of an “economic relationship”. Also, the retrospective assessment of hedge effectiveness is no longer required and additional disclosure requirements relating to an entity’s risk management activities have been introduced.
The Company’s distribution subsidiaries have material assets classified as “available for sale”, according to the current requirements of IAS 39 / CPC 38. These assets represent the right to indemnity at the end of the concession period of the distribution subsidiaries. The designation of these instruments as available for sale occurs due to non-classification into the other three categories described in IAS 39 / CPC 38 (loans and receivables, fair value through profit or loss and held to maturity). Management believes that these assets will be classified as measured at fair value through profit or loss according to the new standard and the effects of the subsequent measurement of these assets would be recognized in profit or loss, with no material impacts on the Company’s consolidated financial statements.
The transmission subsidiaries have assets classified as “loans and receivables”, in accordance with the current requirements of IAS 39 / CPC 38. These assets have two components: the right to receive the “Allowed Annual Revenue - RAP” to be received over the concession period and the indemnity at the end of the concession. These instruments are designated as loans and receivables because they are non-derivative financial assets, with fixed or determinable payments that are not quoted in an active market. Management’s opinion is that the asset arising from the receipt of RAP will be classified and measured at amortized cost with the new standard, not causing impacts on the Company’s consolidated financial statements. Regarding the indemnity receivable at the end of the concession, this will correspond to the portion of assets not depreciated over the concession at their new replacement value. Considering that the calculation of the amount to be received will not change during the concession, Management analyzes the possibility of measuring and classifying this portion of the financial asset as at fair value through profit or loss. Currently, Management’s opinion is that the effects of this possible change would be immaterial.
Moreover, as the Group does not apply hedge accounting, Management concluded that there will be no material impact on the information disclosed or amounts recognized in its consolidated financial statements as a result of the amendments to the standard about this topic.
As regards the changes in the calculation of impairment of financial assets, the Company estimates that the impact on the equity for January 1st 2018 will be a decrease in line item “Consumers, concessionaires and licensees” by R$ 70 and R$ 80 million.
65
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Considering that the Group holds certain financial liabilities designated at fair value through profit or loss, Management believes that there will be impacts on its consolidated financial statements since the changes in credit risk currently recognized directly in profit or loss will be recognized in other comprehensive income. For the year ended December 31, 2017, the changes in credit risk recognized in profit or loss represented an expense of R$ 92,138.
b) IFRS 15 / CPC 47 and Clarifications to IFRS 15 – Revenue from contracts with customers
IFRS 15 / CPC 47 establishes a simple model for entities to use in accounting for revenue from contracts with customers and will supersede the current guidance on revenue recognition in IAS 18/CPC 30 (R1) - Revenue, IAS 11/CPC 17 (R1) – Construction Contracts and related interpretations.
This standard establishes that an entity shall recognize revenue to depict the transfer (or promise) of 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 5-step approach to revenue recognition: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue if and when the entity satisfies a performance obligation.
According to the new requirements in IFRS 15, the entity recognizes revenue only when (or as) the performance obligation is satisfied, that is, when the “control” over the goods or services of a certain operation is transferred to the customer. In addition, this standard will establish further details in the disclosures related to contracts with customers.
IFRS 15 is effective for annual periods beginning on or after January 1, 2018. Contracts that begin and end in the same period of comparative presentation, as well as contracts that are completed at the beginning of the oldest period presented will not be restated. The Company analyzed the 5-step approach to the various types of the Group’ revenue and has not identified any material impact of the adoption of this standard on its consolidated financial statements. Therefore, after the appropriate analyses, the conclusion is that the current revenue recognition is in accordance with CPC 47/IFRS 15.
c) IFRS 16 / CPC 06 (R2) - Leases
Issued on January 13, 2016, establishes, in the lessee’s view, a new way to account for leases currently classified as operating leases, which will be accounted for similarly as finance leases. With regard to lessors, it virtually retains the requirements of IAS 17 / CPC 06 (R1), including only some additional disclosure aspects.
IFRS 16 / CPC 06 (R2) will be effective for annual periods beginning on or after January 1, 2019. The Company is assessing the standard and its adoption and preliminarily believes that the main impact will be the recording of lease of properties (under the lessee’s view), but no material impacts from the adoption of this standard are expected.
d) IFRIC 22 – Foreign currency transactions and advance consideration
Issued on December 8, 2016, IFRIC 22 addresses the exchange rate to be used in transactions that involve the consideration paid or received in advance in foreign currency transactions, IFRIC will be effective for annual periods beginning on or after January 1, 2018.
The Group’s foreign currency transactions are currently restricted to debt instruments with international financial institutions, measured at fair value, and to the purchase of electricity from Itaipu. As assets and liabilities measured at fair value are outside the scope of IFRIC and there are no advance payments on operations with Itaipu, Groups’ Management believes that IFRIC 22 will not have material impacts on its consolidated financial statements.
e) Annual Improvements to IFRS / 2014 – 2016 Cycle
Annually, the IASB discusses and decides on the proposed improvements to IFRS, as they are raised during the year. On December 8, 2016, new amendments were issued relating to the 2014-2016 cycle, effective as of January 1, 2018.
66
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Amendments to IFRS 1 – First-time adoption of IFRS: excludes from the standard some exceptions existing for application in the transition period of entities that are first-time adopters of IFRS.
As the Company is not a first-time adopter of IFRS, Management believes that the application of these amendments will not have effect on the disclosures and amounts recognized in its consolidated financial statements. Based on a preliminary assessment, Management believes that the application of these amendments will not have a material impact on the disclosures and amounts recognized in its consolidated financial statements.
( 4 ) FAIR VALUE MEASUREMENT
A number of the Group’s accounting policies and disclosures require the fair value measurement, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the following methods. When applicable, additional information on the assumptions made in the fair value measurement is disclosed in the notes specific to that asset or liability.
Accordingly, the Group measures fair value in accordance with IFRS 13 / CPC 46, which defines the fair value as the price estimate for which an unforced transaction for the sale of the asset or transfer of the liability would occur between market participants under current market conditions at the measurement date.
- Property, plant and equipment and intangible assets
The fair value of property, plant and equipment and intangible assets recognized as a result of a business combination is based on market values. The fair value of these assets is the estimated value for which an asset could be exchanged on the valuation date between knowledgeable interested parties in an unforced transaction between market participants at the measurement date. The fair value of items of property, plant and equipment is based on the market approach and cost approaches using quoted market prices for similar items when available and replacement cost when appropriate.
- Financial instruments
Financial instruments measured at fair value are valued based on quoted prices in an active market, or, if such prices are not available, they are assessed using pricing models, applied individually to each transaction, taking into consideration future payment flows, based on the contractual conditions, discounted to present value at rates obtained from market interest curves, having as a basis, whenever available, information obtained from the websites of B3 S.A. - Brasil, Bolsa, Balcão (“B3”) and “Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais – ANBIMA” (note 33) and also includes the debtor's credit risk rate. The assumptions for fair value calculation are described in note 33.
Financial assets classified as available-for-sale refer to the right to compensation, to be paid by the Federal Government when the distribution concessionaires’ assets are handed over at the end of the concession period. The methodology adopted for fair value measurement of these assets is based on the tariff review process for distributors. This process, conducted every four or five years according to each concessionaire, involves assessing the replacement price of the distribution infrastructure, in accordance with criteria established by the granting authority (“ANEEL”). This valuation basis is used for pricing the tariff, which is adjusted annually up to the next tariff review, based on the parameter of the main inflation indices.
Accordingly, at the time of the tariff review, each distribution concessionaire adjusts the position of the financial asset base for compensation at the amounts ratified by the granting authority and uses the Extended Consumer Price Index (“IPCA”) as the best estimate to adjust the original base to the adjusted value at subsequent dates, in accordance with the tariff review process.
( 5 ) CASH AND CASH EQUIVALENTS
|
Parent company |
|
Consolidated | ||||
|
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 | |||
Bank balances |
508 |
|
426 |
|
365,031 |
|
170,884 |
Short-term financial investments |
6,073 |
|
64,548 |
|
2,884,611 |
|
5,994,112 |
Overnight investment (a) |
42 |
|
64,541 |
|
178,444 |
|
95,034 |
Bank certificates of deposit (b) |
- |
|
- |
|
785,074 |
|
2,357,187 |
Repurchase agreements secured on debentures (b) |
- |
|
- |
|
3,268 |
|
58,616 |
Investment funds (c) |
6,032 |
|
6 |
|
1,917,825 |
|
3,483,274 |
Total |
6,581 |
|
64,973 |
|
3,249,642 |
|
6,164,997 |
a) Bank account balances, which earn daily interest by investment in repurchase agreements secured on Bank Certificate Deposit (CDB) and interest of 15% of the variation in the Interbank Certificate of Deposit (CDI).
67
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
b) Short-term investments in Bank Certificates of Deposit (CDB) and secured debentures with major financial institutions that operate in the Brazilian financial market, with daily liquidity, short term maturity, low credit risk and interest equivalent, on average, to 101.87% of the CDI.
c) Exclusive Fund investments, with daily liquidity and interest equivalent, on average, to 100% of the CDI, subject to floating rates tied to the CDI linked to federal government bonds, CDBs, financial bills and secured debentures of major financial institutions, with low credit risk and short term maturity.
( 6 ) CONSUMERS, CONCESSIONAIRES AND LICENSEES
The consolidated balance includes mainly activities from the supply of electric energy, broken down as follows at December 31, 2017 and 2016:
|
|
Consolidated | ||||||||
|
|
Amounts |
|
Past due |
|
Total | ||||
|
|
coming due |
|
until 90 days |
|
> 90 days |
|
December 31, 2017 |
December 31, 2016 | |
Current |
|
|
|
|
|
|
|
|
|
|
Consumer classes |
|
|
|
|
|
|
|
|
|
|
Residential |
|
602,525 |
|
457,273 |
|
53,805 |
|
1,113,604 |
|
932,380 |
Industrial |
|
322,250 |
|
77,148 |
|
84,232 |
|
483,630 |
|
386,826 |
Commercial |
|
254,605 |
|
86,290 |
|
41,574 |
|
382,470 |
|
317,111 |
Rural |
|
74,136 |
|
18,409 |
|
6,117 |
|
98,663 |
|
97,444 |
Public administration |
|
69,333 |
|
15,638 |
|
3,939 |
|
88,910 |
|
94,348 |
Public lighting |
|
58,475 |
|
6,573 |
|
2,485 |
|
67,533 |
|
73,142 |
Public utilities |
|
87,159 |
|
8,972 |
|
4,713 |
|
100,843 |
|
97,503 |
Billed |
|
1,468,483 |
|
670,303 |
|
196,865 |
|
2,335,653 |
|
1,998,754 |
Unbilled |
|
1,008,486 |
|
- |
|
- |
|
1,008,486 |
|
1,095,188 |
Financing of consumers' debts |
|
169,171 |
|
20,784 |
|
39,885 |
|
229,840 |
|
170,982 |
CCEE transactions |
|
182,128 |
|
229,887 |
|
1,052 |
|
413,067 |
|
289,761 |
Concessionaires and licensees |
|
508,046 |
|
423 |
|
7,950 |
|
516,419 |
|
390,333 |
Others |
|
36,011 |
|
- |
|
- |
|
36,011 |
|
39,974 |
|
|
3,372,325 |
|
921,397 |
|
245,752 |
|
4,539,476 |
|
3,984,991 |
Allowance for doubtful accounts |
|
|
|
|
|
|
|
(238,193) |
|
(219,098) |
Total |
|
|
|
|
|
|
|
4,301,283 |
|
3,765,893 |
|
|
|
|
|
|
|
|
|
|
|
Noncurrent |
|
|
|
|
|
|
|
|
|
|
Financing of consumers' debts |
|
217,944 |
|
- |
|
- |
|
217,944 |
|
198,875 |
Free energy |
|
5,976 |
|
- |
|
- |
|
5,976 |
|
5,436 |
CCEE transactions |
|
41,301 |
|
- |
|
- |
|
41,301 |
|
41,301 |
|
|
265,221 |
|
- |
|
- |
|
265,221 |
|
245,612 |
Allowance for doubtful accounts |
|
|
|
|
|
|
|
(28,683) |
|
(42,427) |
Total |
|
|
|
|
|
|
|
236,539 |
|
203,185 |
|
|
|
|
|
|
|
|
|
|
|
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 Commercialization 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.
68
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Allowance for doubtful accounts
Movements in the Allowance for doubtful accounts are shown below:
|
Consumers, concessionaires and licensees |
|
Other receivables (note 11) |
|
Total |
At of December 31, 2015 |
(159,194) |
|
(14,441) |
|
(173,634) |
Business combination |
(70,636) |
|
(16,187) |
|
(86,823) |
Allowance - reversal (recognition) |
(258,377) |
|
(969) |
|
(259,347) |
Recovery of revenue |
82,393 |
|
605 |
|
82,998 |
Write-off of accrued receivables |
144,289 |
|
3,000 |
|
147,289 |
At of December 31, 2016 |
(261,525) |
|
(27,992) |
|
(289,517) |
Allowance - reversal (recognition) |
(263,668) |
|
(1,437) |
|
(265,107) |
Recovery of revenue |
110,008 |
|
- |
|
110,008 |
Write-off of accrued receivables |
148,309 |
|
52 |
|
148,361 |
At of December 31, 2017 |
(266,876) |
|
(29,379) |
|
(296,255) |
|
|
|
|
|
|
Current |
(238,193) |
|
(29,379) |
|
(267,572) |
Noncurrent |
(28,683) |
|
- |
|
(28,683) |
The allowance for doubtful debts is set up based on the history and probability of default and, specifically for distributors, according to the following criteria:
Class |
Past due over: |
Residential |
90 days |
Commercial |
180 days |
Other classes |
360 days |
Sundry bills |
180 days |
Debts in installments |
90 days. In the event of default in one of the installments, the whole receivable from the customer is subject to impairment. |
69
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 7 ) TAXES RECOVERABLE
|
Parent company |
|
Consolidated | ||||
|
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 | |||
Current |
|
|
|
|
|
|
|
Prepayments of social contribution - CSLL |
227 |
|
5,508 |
|
7,257 |
|
14,141 |
Prepayments of income tax - IRPJ |
1,725 |
|
2,282 |
|
21,887 |
|
35,534 |
Income tax and social contribution to be offset |
15,099 |
|
45,457 |
|
59,658 |
|
94,268 |
Income tax and social contribution to be offset |
17,051 |
|
53,246 |
|
88,802 |
|
143,943 |
|
|
|
|
|
|
|
|
Withholding income tax - IRRF on interest on capital |
43,467 |
|
3,126 |
|
43,841 |
|
3,642 |
Withholding income tax - IRRF |
2,893 |
|
26,150 |
|
103,277 |
|
115,189 |
State VAT - ICMS to be offset |
- |
|
- |
|
104,843 |
|
82,090 |
Social Integration Program - PIS |
56 |
|
52 |
|
8,447 |
|
9,062 |
Contribution for Social Security Funding - COFINS |
283 |
|
262 |
|
37,699 |
|
39,984 |
National Social Security Institute - INSS |
- |
|
- |
|
7,597 |
|
6,374 |
Others |
- |
|
- |
|
541 |
|
3,564 |
Others taxes to be offset |
46,699 |
|
29,589 |
|
306,244 |
|
259,905 |
|
|
|
|
|
|
|
|
Total current |
63,750 |
|
82,836 |
|
395,046 |
|
403,848 |
|
|
|
|
|
|
|
|
Noncurrent |
|
|
|
|
|
|
|
Social contribution to be offset - CSLL |
- |
|
- |
|
58,856 |
|
55,498 |
Income tax to be offset - IRPJ |
- |
|
- |
|
2,608 |
|
10,037 |
Income tax and social contribution to be offset |
- |
|
- |
|
61,464 |
|
65,535 |
|
|
|
|
|
|
|
|
State VAT - ICMS to be offset |
- |
|
- |
|
159,624 |
|
122,415 |
Social Integration Program - PIS |
- |
|
- |
|
1,024 |
|
800 |
Contribution for Social Security Funding - COFINS |
- |
|
- |
|
4,719 |
|
3,687 |
Others |
- |
|
- |
|
6,613 |
|
5,849 |
Others taxes to be offset |
- |
|
- |
|
171,980 |
|
132,751 |
|
|
|
|
|
|
|
|
Total noncurrent |
- |
|
- |
|
233,444 |
|
198,286 |
Withholding income tax - IRRF – Relates mainly to IRRF on financial investments.
Social contribution to be offset – CSLL – In noncurrent, it refers basically to the final unappealable favorable decision in a lawsuit filed by the subsidiary CPFL Paulista. The subsidiary CPFL Paulista is awaiting the authorization for utilization of credit from the Federal Revenue in order to carry out its subsequent offset.
State VAT - ICMS to be offset – In noncurrent, it 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.
( 8 ) SECTOR FINANCIAL ASSET AND LIABILITY
The breakdown of the balances of sector financial asset and liability and the movement for the year are as follows:
70
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
|
|
|
|
|
|
| ||||||||||||
|
At of December 31, 2016 |
|
Operating revenue |
|
Finance income or expense |
Receipt |
|
At of December 31, 2017 | |||||||||||
|
Deferred |
|
Approved |
|
Total |
|
Constitution |
|
Through billing |
Monetary adjustment |
Tariff flag (note 25.4) |
Deferred |
|
Approved |
|
Total | |||
Parcel "A" |
(762,573) |
|
190,369 |
|
(572,203) |
|
1,187,928 |
|
536,269 |
|
(76,726) |
|
(386,242) |
|
924,943 |
|
(235,916) |
|
689,026 |
CVA (*) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CDE (**) |
(342,161) |
|
(70,301) |
|
(412,462) |
|
(405,409) |
|
356,715 |
|
(38,267) |
|
- |
|
(235,901) |
|
(263,520) |
|
(499,422) |
Electric energy cost |
(506,490) |
|
(239,777) |
|
(746,267) |
|
2,018,754 |
|
751,840 |
|
(31,144) |
|
(385,704) |
|
1,625,759 |
|
(18,280) |
|
1,607,479 |
ESS and EER (***) |
(406,568) |
|
(124,411) |
|
(530,979) |
|
(1,003,482) |
|
450,638 |
|
(57,165) |
|
(151) |
|
(974,091) |
|
(167,048) |
|
(1,141,139) |
Proinfa |
3,492 |
|
31,414 |
|
34,906 |
|
(28,048) |
|
(18,829) |
|
(6,600) |
|
- |
|
(610) |
|
(17,961) |
|
(18,572) |
Basic network charges |
27,527 |
|
9,660 |
|
37,187 |
|
1,448 |
|
(35,035) |
|
(376) |
|
- |
|
(20,163) |
|
23,387 |
|
3,224 |
Pass-through from Itaipu |
147,012 |
|
442,911 |
|
589,923 |
|
1,022,892 |
|
(570,453) |
|
43,016 |
|
- |
|
959,518 |
|
125,860 |
|
1,085,378 |
Transmission from Itaipu |
7,646 |
|
7,281 |
|
14,927 |
|
13,992 |
|
(13,705) |
|
394 |
|
- |
|
7,802 |
|
7,806 |
|
15,608 |
Neutrality of sector charges |
142,091 |
|
164,375 |
|
306,466 |
|
89,103 |
|
(258,685) |
|
7,767 |
|
- |
|
32,566 |
|
112,084 |
|
144,651 |
Overcontracting |
164,878 |
|
(30,782) |
|
134,096 |
|
(521,321) |
|
(126,217) |
|
5,648 |
|
(387) |
|
(469,937) |
|
(38,244) |
|
(508,181) |
Other financial components |
(182,958) |
|
(159,759) |
|
(342,717) |
|
(72,877) |
|
249,516 |
|
(5,607) |
|
- |
|
(193,496) |
|
21,812 |
|
(171,685) |
Refunds related to judicial injunctions |
(76,615) |
|
(132,410) |
|
(209,025) |
|
(10,038) |
|
190,291 |
|
805 |
|
- |
|
- |
|
(27,968) |
|
(27,968) |
Others |
(106,343) |
|
(27,349) |
|
(133,692) |
|
(62,839) |
|
59,226 |
|
(6,412) |
|
- |
|
(193,496) |
|
49,780 |
|
(143,717) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
(945,530) |
|
30,612 |
|
(914,918) |
|
1,115,051 |
|
785,786 |
|
(82,333) |
|
(386,242) |
|
731,447 |
|
(214,104) |
|
517,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Current assets |
|
|
|
|
- |
|
|
|
|
|
|
210,834 | |||||||
Noncurrent assets |
|
|
|
|
- |
|
|
|
|
|
|
355,003 | |||||||
Current liabilities |
|
|
|
|
(597,515) |
|
|
|
|
|
|
(40,111) | |||||||
Noncurrent liabilities |
|
|
|
|
(317,406) |
|
|
|
|
|
|
(8,385) | |||||||
|
|
|
|
|
|
|
|
|
|
|
(*) Deferred tariff costs and gains variations from Parcel “A” items
(**) Energy Development Account – CDE
(***) System Service Charge (ESS) and Reserve Energy Charge (EER)
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 sector charges
This refers to the neutrality of the sector 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 concessionaires 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
Refers mainly to: (i) excess demand and excess reactive power that, since the 4th periodic tariff review cycle, became a financial component that will only be amortized upon the approval of the 5th periodic tariff review cycle, for the subsidiaries CPFL Piratininga, and Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia e Companhia Luz e Força de Mococa (grouped in 2017 under the trade name “CPFL Santa Cruz” as mentioned in note 12.6.2); (ii) financial guarantees related to the compensation of the cost of the previous offering of guarantees required from distributors for carrying out commercial transactions among the sector agents, (iii) financial components related to the recalculations of the tariff processes, to neutralize the effects to consumers, and (iv) ABRACE judicial injunction in accordance with Order No. 1.576/2016.
71
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 9 ) DEFERRED TAX ASSETS AND LIABILITIES
9.1 Breakdown of tax assets and liabilities
|
Parent company |
|
Consolidated | ||||
|
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 | |||
Social contribution credit/(debit) |
|
|
|
|
|
|
|
Tax losses carryforwards |
38,216 |
|
42,841 |
|
103,903 |
|
123,389 |
Tax benefit of merged intangible |
- |
|
- |
|
105,065 |
|
86,377 |
Temporarily nondeductible/taxable differences |
(408) |
|
1,125 |
|
(305,677) |
|
(332,750) |
Subtotal |
37,808 |
|
43,966 |
|
(96,708) |
|
(122,984) |
|
|
|
|
|
|
|
|
Income tax credit / (debit) |
|
|
|
|
|
|
|
Tax losses carryforwards |
109,103 |
|
123,980 |
|
303,543 |
|
358,683 |
Tax benefit of merged intangible |
- |
|
- |
|
342,262 |
|
295,987 |
Temporarily nondeductible/taxable differences |
(1,132) |
|
3,126 |
|
(844,948) |
|
(923,383) |
Subtotal |
107,971 |
|
127,106 |
|
(199,141) |
|
(268,713) |
|
|
|
|
|
|
|
|
PIS and COFINS credit/(debit) |
|
|
|
|
|
|
|
Temporarily nondeductible/taxable differences |
- |
|
- |
|
(10,543) |
|
(9,580) |
|
|
|
|
|
|
|
|
Total |
145,779 |
|
171,073 |
|
(306,392) |
|
(401,276) |
|
|
|
|
|
|
| |
Total tax credit |
145,779 |
171,073 |
943,199 |
922,858 | |||
Total tax debit |
- |
- |
(1,249,591) |
(1,324,134) |
9.2 Tax benefit of merged intangible asset
Refers to the tax credit calculated on the intangible assets derived from the acquisition of subsidiaries, as shown in the following table, which were merged and are recognized in accordance with the concepts of CVM Instructions No. 319/1999 and No. 349/2001 and ICPC 09 (R2) - Individual Financial Statements, Separate Financial Statements, Consolidated Financial Statements and Application of the Equity Method. The benefit is being realized in proportion to the tax amortization of the merged intangible assets that originated them as per CPC 27 and CPC 04 (R1) - Clarification of acceptable methods of depreciation and amortization, over the remaining concession period, as shown in note 14.
|
Consolidated | ||||||
|
December 31, 2017 |
|
December 31, 2016 | ||||
|
Social contribution |
Income tax |
|
Social contribution |
Income tax | ||
CPFL Paulista |
45,872 |
|
127,421 |
|
50,497 |
|
140,270 |
CPFL Piratininga |
11,215 |
|
38,491 |
|
12,251 |
|
42,044 |
RGE |
21,513 |
|
88,843 |
|
23,629 |
|
97,584 |
RGE Sul |
26,466 |
|
73,515 |
|
- |
|
- |
CPFL Geração |
- |
|
13,992 |
|
- |
|
16,090 |
Total |
105,065 |
|
342,262 |
|
86,377 |
|
295,987 |
72
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
9.3 Accumulated balances on nondeductible temporary / taxable differences
|
Consolidated | ||||||||||
|
December 31, 2017 |
|
December 31, 2016 | ||||||||
|
Social contribution |
Income tax |
|
PIS/COFINS |
|
Social contribution |
Income tax |
|
PIS/COFINS | ||
Temporarily nondeductible/taxable differences |
|
|
|
|
|
|
|
|
|
|
|
Provision for tax, civil and labor risks |
53,687 |
|
149,130 |
|
- |
|
45,065 |
|
125,182 |
|
- |
Private pension fund |
2,331 |
|
6,476 |
|
- |
|
1,711 |
|
4,753 |
|
- |
Allowance for doubtful accounts |
27,354 |
|
75,985 |
|
- |
|
26,543 |
|
73,729 |
|
- |
Free energy supply |
8,382 |
|
23,284 |
|
- |
|
7,718 |
|
21,440 |
|
- |
Research and development and energy efficiency programs |
21,851 |
|
60,697 |
|
- |
|
17,474 |
|
48,538 |
|
- |
Personnel-related provisions |
4,111 |
|
11,420 |
|
- |
|
3,422 |
|
9,506 |
|
- |
Depreciation rate difference |
5,535 |
|
15,374 |
|
- |
|
6,200 |
|
17,223 |
|
- |
Derivatives |
(48,848) |
|
(135,690) |
|
- |
|
(54,368) |
|
(151,023) |
|
- |
Recognition of concession - adjustment of intangible asset (IFRS/CPC) |
(7,291) |
|
(20,253) |
|
- |
|
(8,355) |
|
(23,208) |
|
- |
Recognition of concession - adjustment of financial asset (IFRS/CPC) |
(117,527) |
|
(324,387) |
|
(7,881) |
|
(104,080) |
|
(287,990) |
|
(6,157) |
Actuarial losses (IFRS/CPC) |
25,716 |
|
71,432 |
|
- |
|
25,390 |
|
70,527 |
|
- |
Financial instruments (IFRS/CPC) |
(5,291) |
|
(14,694) |
|
- |
|
(10,022) |
|
(27,838) |
|
- |
Accelerated depreciation |
(104) |
|
(288) |
|
- |
|
(73) |
|
(204) |
|
- |
Others |
(15,699) |
|
(41,527) |
|
(2,662) |
|
4,491 |
|
12,281 |
|
(3,423) |
Temporarily nondeductible/taxable differences - accumulated comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment - adjustment of deemed cost (IFRS/CPC) |
(51,961) |
|
(144,336) |
|
- |
|
(55,223) |
|
(153,398) |
|
- |
Actuarial losses (IFRS/CPC) |
36,607 |
|
101,687 |
|
- |
|
49,698 |
|
138,051 |
|
- |
Temporarily nondeductible/taxable differences - business combination |
|
|
|
|
|
|
|
|
|
|
|
Deferred taxes - asset: |
|
|
|
|
|
|
|
|
|
|
|
Provision for tax, civil and labor risks |
13,188 |
|
36,635 |
|
|
|
|
|
|
|
|
Fair value of property, plant and equipment (negative value added of assets) |
21,294 |
|
59,150 |
|
- |
|
22,771 |
|
63,252 |
|
- |
Deferred taxes - liability: |
|
|
|
|
|
|
- |
|
- |
|
- |
Fair value of property, plant and equipment (value added of assets) |
(25,811) |
|
(71,699) |
|
|
|
(27,472) |
|
(76,310) |
|
|
Value added derived from determination of deemed cost |
(62,354) |
|
(173,207) |
|
- |
|
(78,443) |
|
(217,897) |
|
- |
Value added of assets received from the former ERSA |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
Intangible asset - exploration right/authorization in indirect subsidiaries acquired |
(184,703) |
|
(513,064) |
|
- |
|
(183,443) |
|
(509,563) |
|
- |
Other temporary differences |
(6,145) |
|
(17,071) |
|
- |
|
(21,754) |
|
(60,435) |
|
- |
Total |
(305,677) |
|
(844,947) |
|
(10,543) |
|
(332,750) |
|
(923,383) |
|
(9,580) |
9.4 Expected recovery
The expected recovery of the deferred tax assets recorded in noncurrent assets derived from temporarily nondeductible / taxable differences and tax benefit of merged intangible assets is based on the average period of realization of each item included in deferred assets, and tax loss carryforwards are based on the projections of future profits, approved by the Board of Directors and reviewed by the Fiscal Council. They are comprised as follows:
|
Parent company |
|
Consolidated |
2018 |
14,892 |
|
262,544 |
2019 |
31,826 |
|
189,889 |
2020 |
52,699 |
|
196,680 |
2021 |
47,984 |
|
158,586 |
2022 |
20 |
|
112,625 |
2023 to 2025 |
61 |
|
325,268 |
2026 to 2028 |
41 |
|
427,653 |
2029 to 2031 |
- |
|
16,756 |
2032 to 2034 |
- |
|
8,603 |
Total |
147,523 |
|
1,698,605 |
|
|
|
|
73
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
9.5 Reconciliation of the income tax and social contribution amounts recognized in the statements of profit or loss for 2017 and 2016:
|
Parent company | ||||||
|
2017 |
|
2016 | ||||
|
Social contribution |
Income tax |
|
Social contribution |
Income tax | ||
Profit before taxes |
1,250,525 |
|
1,250,525 |
|
890,398 |
|
890,398 |
Adjustments to reflect effective rate: |
|
|
|
|
|
|
|
Equity in subsidiaries |
(1,349,766) |
|
(1,349,766) |
|
(922,362) |
|
(922,362) |
Amortization of intangible asset acquired |
(13,528) |
|
- |
|
(13,528) |
|
- |
Interest on capital income |
289,783 |
|
289,783 |
|
20,837 |
|
20,837 |
Other permanent additions (exclusions), net |
11,319 |
|
24,757 |
|
13,672 |
|
21,434 |
Tax base |
188,333 |
|
215,299 |
|
(10,983) |
|
10,307 |
Statutory rate |
9% |
|
25% |
|
9% |
|
25% |
Tax credit/(debit) |
(16,950) |
|
(53,825) |
|
988 |
|
(2,577) |
Recorded (unrecognized) Tax credit, net |
- |
|
- |
|
(2,063) |
|
14,138 |
Total |
(16,950) |
|
(53,825) |
|
(1,075) |
|
11,562 |
|
|
|
|
|
|
|
|
Current |
(10,792) |
|
(34,689) |
|
(4,357) |
|
(15,840) |
Deferred |
(6,158) |
|
(19,136) |
|
3,282 |
|
27,402 |
|
|
|
|
|
|
|
|
|
Consolidated | ||||||
|
2017 |
|
2016 | ||||
|
Social contribution |
Income tax |
|
Social contribution |
Income tax | ||
Profit before taxes |
1,846,670 |
|
1,846,670 |
|
1,380,547 |
|
1,380,547 |
Reconciliation to reflect effective rate: |
|
|
|
|
|
|
|
Equity in subsidiaries |
(312,390) |
|
(312,390) |
|
(311,414) |
|
(311,414) |
Amortization of intangible asset acquired |
48,649 |
|
62,756 |
|
48,649 |
|
62,756 |
Effect of presumed profit system |
(352,101) |
|
(430,296) |
|
(175,110) |
|
(234,827) |
Adjustment of revenue from excess demand and excess reactive power |
134,778 |
|
134,778 |
|
119,272 |
|
119,272 |
Tax incentive - operating profit |
- |
|
(71,340) |
|
- |
|
(112,232) |
Other permanent additions (exclusions), net |
74,015 |
|
82,631 |
|
6,420 |
|
(24,063) |
Tax base |
1,439,621 |
|
1,312,809 |
|
1,068,364 |
|
880,040 |
Statutory rate |
9% |
|
25% |
|
9% |
|
25% |
Tax credit/(debit) |
(129,566) |
|
(328,202) |
|
(96,153) |
|
(220,010) |
Recorded (unrecognized) Tax credit, net |
(39,162) |
|
(106,699) |
|
(54,706) |
|
(130,621) |
Total |
(168,728) |
|
(434,901) |
|
(150,859) |
|
(350,631) |
Current | (153,543) | (387,076) | (244,015) | (623,185) | |||
Deferred | (15,185) | (47,825) | 93,156 | 272,552 |
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 14).
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 expense recorded in the statement of profit or loss in the amount of R$ 63,010 refers to (i) income tax and social contribution losses (R$ 74,626); (ii) tax benefit of the merged goodwill (R$ 35,018) and (iii) temporary differences (revenue of R$ 46,634).
9.6 Deferred income tax and social contribution recognized directly in equity
The deferred income tax and social contribution recognized directly in equity (other comprehensive income) in 2017 and 2016 were as follows:
74
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
|
Consolidated | ||||||
|
|
2017 |
|
2016 | ||||
|
|
Social Contribution |
Income tax |
|
Social Contribution |
Income tax | ||
Actuarial losses (gains) |
|
(166,857) |
|
(166,857) |
|
527,430 |
|
527,430 |
Limits on the asset ceiling |
|
21,399 |
|
21,399 |
|
(8,738) |
|
(8,738) |
Basis of calculation |
|
(145,458) |
|
(145,458) |
|
518,692 |
|
518,692 |
Statutory rate |
|
9% |
|
25% |
|
9% |
|
25% |
Calculated taxes |
|
13,092 |
|
36,365 |
|
(46,682) |
|
(129,673) |
Limitation on recognition (reversal) of tax credits |
|
- |
|
- |
|
13,719 |
|
38,111 |
Taxes recognized in other comprehensive income |
|
13,092 |
|
36,365 |
|
(32,963) |
|
(91,562) |
9.7 Unrecognized tax credits
As of December 31, 2017, the parent company has tax credits on tax loss carryforwards that were not recognized amounting to R$ 86,977 since at present there is no reasonable assurance of the generation of future taxable profits. This amount can be recognized in the future, according to the annual reviews of taxable profit projections.
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, 2017, the main subsidiaries that have such income tax and social contribution credits are CPFL Renováveis (R$ 952,402), RGE Sul (R$ 248,705), Sul Geradora (R$ 72,645), CPFL Telecom (R$ 33,321) and CPFL Jaguari Geração (R$ 2,486). These tax losses can be carried forward indefinitely.
75
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 10 ) CONCESSION FINANCIAL ASSET
|
Distribution |
|
Transmission |
|
Consolidated |
At of 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 |
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
655,456 |
|
50,580 |
|
706,036 |
Adjustment of expected cash flow |
203,452 |
|
- |
|
203,452 |
Adjustment - financial asset measured at amortized cost |
- |
|
16,088 |
|
16,088 |
Cash inputs - RAP |
- |
|
(9,727) |
|
(9,727) |
Disposals |
(25,392) |
|
- |
|
(25,392) |
Business combination |
876,281 |
|
- |
|
876,281 |
|
|
|
|
|
|
At of December 31, 2016 |
5,193,511 |
|
180,333 |
|
5,373,844 |
Current |
- |
|
10,700 |
|
10,700 |
Noncurrent |
5,193,511 |
|
169,633 |
|
5,363,144 |
|
|
|
|
|
|
Additions |
972,254 |
|
46,261 |
|
1,018,515 |
Adjustment of expected cash flow |
212,294 |
|
- |
|
212,294 |
Adjustment - financial asset measured at amortized cost |
- |
|
27,807 |
|
27,807 |
Cash inputs - RAP |
- |
|
(15,677) |
|
(15,677) |
Disposals |
(35,039) |
|
- |
|
(35,039) |
Business combination |
(12,338) |
|
- |
|
(12,338) |
|
|
|
|
|
|
At of December 31, 2017 |
6,330,681 |
|
238,723 |
|
6,569,404 |
Current |
- |
|
23,736 |
|
23,736 |
Noncurrent |
6,330,681 |
|
214,987 |
|
6,545,668 |
The balance refers to the financial asset corresponding to the right established in the concession agreements of the energy distribution (measured at fair value) and transmission (measured at amortized cost) companies to receive cash (i) through compensation at the time assets are handed over to the granting authority at the end of the concession, and (ii) the transmission companies’ right to receive cash over the concession period through allowed annual revenue ("RAP").
For energy distribution companies, according to the current tariff model, the remuneration for this asset is recognized in profit or loss upon billing to consumers and the realization occurs upon receipt of the electric energy bills. Moreover, the difference to adjust the balance to the expected cash flow receipts (new replacement value - “VNR” - note 4) is recognized as a balancing item to the operating income account (note 25) in the statement of profit or loss for the year.
For energy transmission companies, the remuneration for this asset is recognized according to the internal rate of return, which takes into account the investment made, the allowed annual revenue (“RAP”) to be received over the concession period, and the compensation to be received at the time assets are handed over to the granting authority. The adjustment of R$ 27,807 is recognized against other operating revenues and income (R$ 16.088 in 2016).
The balances disclosed in the "Business Combinations" line refer to the complementary amounts related to the acquisition of RGE Sul, which final recognition occurred on September 30, 2017, according to note 12.5.
76
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 11 ) OTHER RECEIVABLES
|
Consolidated | ||||||
|
Current |
|
Noncurrent | ||||
|
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 | |||
Advances - Fundação CESP |
7,851 |
|
7,533 |
|
6,797 |
|
- |
Advances to suppliers |
31,981 |
|
15,787 |
|
- |
|
- |
Pledges, funds and restricted deposits |
159,291 |
|
106,925 |
|
621,489 |
|
533,719 |
Orders in progress |
167,197 |
|
203,344 |
|
5,062 |
|
- |
Services rendered to third parties |
8,530 |
|
9,385 |
|
- |
|
- |
Energy pre-purchase agreements |
- |
|
- |
|
26,260 |
|
27,302 |
Collection agreements |
661 |
|
1,273 |
|
- |
|
- |
Prepaid expenses |
80,599 |
|
65,668 |
|
20,042 |
|
20,942 |
GSF renegotiation |
19,629 |
|
12,722 |
|
17,359 |
|
28,935 |
Receivables - CDE |
242,906 |
|
213,552 |
|
- |
|
- |
Advances to employees |
19,658 |
|
15,940 |
|
- |
|
- |
Leases |
15,684 |
|
19,281 |
|
45,290 |
|
50,541 |
Others |
175,889 |
|
153,764 |
|
97,893 |
|
104,815 |
(-) Allowance for doubtful debts (note 6) |
(29,379) |
|
(27,992) |
|
- |
|
- |
Total |
900,498 |
|
797,181 |
|
840,192 |
|
766,253 |
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 22).
Energy pre-purchase agreements: refer to prepayments made by subsidiaries, which will be settled with energy to be supplied in the future.
GSF Renegotiation: refers to the GSF premium paid in advance by the subsidiaries Ceran, CPFL Jaguari Geração (Paulista Lajeado) and CPFL Renováveis, related to the transfer of the hydrological risks to the Centralizing Account for Tariff Flag Resources (“CCRBT”), amortized as other operating expenses on a straight-line basis.
At 2017, the subsidiaries offset the receivables relating to the CDE account with the payables relating to the Energy Development Account (CDE) (note 22) amounting to R$ 238,510, of which (i) R$ 95,978 based on an injunction obtained in May 2015, and (ii) R$ 142,532 authorized by Order No. 1,576/2016.
( 12 ) INVESTMENTS
|
Parent company |
|
Consolidated | ||||
|
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 | |||
Permanent equity interests - equity method |
|
|
|
|
|
|
|
By equity method of the subsidiary |
7,804,431 |
|
5,811,894 |
|
990,910 |
|
1,482,533 |
Fair value of assets, net |
713,848 |
|
692,632 |
|
10,640 |
|
11,219 |
Advances for future capital increases |
33,340 |
|
1,355,520 |
|
- |
|
- |
Goodwill |
6,054 |
|
6,054 |
|
- |
|
- |
Total |
8,557,673 |
|
7,866,100 |
|
1,001,550 |
|
1,493,753 |
77
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
12
12.1Permanent equity interests – equity method
The main information on investments in direct permanent equity interests is as follows:
|
|
December 31, 2017 |
|
December 31, 2017 |
December 31, 2016 |
2017 |
|
2016 | ||||||||||
Investment |
|
Number of shares (thousand) |
Total assets |
|
Issued capital |
|
Equity |
|
Profit or loss for the year |
Share of equity of investees |
|
Share of profit (loss) of investees | ||||||
CPFL Paulista |
|
880,653 |
|
8,671,518 |
|
923,423 |
|
1,370,403 |
|
280,354 |
|
1,370,403 |
|
1,063,400 |
|
280,354 |
|
255,329 |
CPFL Piratininga |
|
53,096,770 |
|
3,615,098 |
|
240,144 |
|
461,059 |
|
152,080 |
|
461,059 |
|
355,755 |
|
152,080 |
|
68,114 |
CPFL Santa Cruz |
|
- |
|
- |
|
- |
|
- |
|
23,447 |
|
- |
|
140,520 |
|
23,447 |
|
23,797 |
CPFL Leste Paulista |
|
- |
|
- |
|
- |
|
- |
|
9,589 |
|
- |
|
52,853 |
|
9,589 |
|
10,731 |
CPFL Sul Paulista |
|
- |
|
- |
|
- |
|
- |
|
10,545 |
|
- |
|
58,895 |
|
10,545 |
|
8,455 |
CPFL Jaguari |
|
359,058 |
|
1,010,595 |
|
170,396 |
|
340,463 |
|
11,720 |
|
340,463 |
|
30,255 |
|
11,720 |
|
7,988 |
CPFL Mococa |
|
- |
|
- |
|
- |
|
- |
|
6,999 |
|
- |
|
33,824 |
|
6,999 |
|
9,198 |
RGE |
|
1,019,790 |
|
4,311,143 |
|
1,223,350 |
|
1,680,334 |
|
117,700 |
|
1,680,334 |
|
1,614,320 |
|
117,700 |
|
102,647 |
RGE Sul |
|
527,266 |
|
4,436,963 |
|
1,495,084 |
|
1,715,183 |
|
52,422 |
|
1,228,317 |
|
- |
|
57,305 |
|
- |
CPFL Geração |
|
205,492,020 |
|
5,888,381 |
|
1,043,922 |
|
2,354,115 |
|
594,026 |
|
2,354,115 |
|
2,158,384 |
|
594,026 |
|
401,148 |
CPFL Jaguari Geração (*) |
|
40,108 |
|
51,082 |
|
40,108 |
|
50,970 |
|
15,709 |
|
50,970 |
|
45,099 |
|
15,709 |
|
6,655 |
CPFL Brasil |
|
3,000 |
|
1,372,717 |
|
3,000 |
|
96,093 |
|
94,455 |
|
96,093 |
|
109,054 |
|
94,455 |
|
104,235 |
CPFL Planalto (*) |
|
630 |
|
4,406 |
|
630 |
|
3,293 |
|
3,550 |
|
3,293 |
|
2,101 |
|
3,550 |
|
2,476 |
CPFL Serviços |
|
1,577,706 |
|
242,642 |
|
117,968 |
|
105,105 |
|
(12,863) |
|
105,105 |
|
97,968 |
|
(12,863) |
|
(8,175) |
CPFL Atende (*) |
|
13,991 |
|
27,287 |
|
13,991 |
|
19,338 |
|
7,128 |
|
19,338 |
|
17,150 |
|
7,128 |
|
5,833 |
Nect (*) |
|
2,059 |
|
29,934 |
|
2,059 |
|
15,515 |
|
17,392 |
|
15,515 |
|
10,295 |
|
17,392 |
|
13,424 |
CPFL Total (*) |
|
9,005 |
|
23,791 |
|
9,005 |
|
20,624 |
|
20,865 |
|
20,624 |
|
27,570 |
|
20,865 |
|
12,817 |
CPFL Jaguariuna (*) |
|
- |
|
- |
|
- |
|
- |
|
(18,792) |
|
- |
|
1,256,161 |
|
(8,360) |
|
(35,498) |
CPFL Telecom |
|
86,420 |
|
2,230 |
|
86,420 |
|
2,018 |
|
(14,021) |
|
2,018 |
|
(19,302) |
|
(14,021) |
|
(33,333) |
CPFL Centrais Geradoras (*) |
|
16,128 |
|
17,358 |
|
16,128 |
|
16,177 |
|
735 |
|
16,177 |
|
15,459 |
|
735 |
|
(958) |
CPFL Eficiência |
|
48,164 |
|
98,803 |
|
48,164 |
|
55,252 |
|
(2,582) |
|
55,252 |
|
61,543 |
|
(2,582) |
|
5,926 |
Authi (*) |
|
10 |
|
33,672 |
|
10 |
|
18,694 |
|
24,912 |
|
18,694 |
|
16,810 |
|
24,912 |
|
24,264 |
Subtotal - by subsidiary's equity |
|
|
|
|
|
|
|
|
|
|
|
7,837,770 |
|
7,148,112 |
|
1,410,685 |
|
985,074 |
Amortization of fair value adjustment of assets |
|
|
|
|
|
|
|
|
|
|
|
- |
|
- |
|
(60,918) |
|
(62,713) |
Total |
|
|
|
|
|
|
|
|
|
|
|
7,837,770 |
|
7,148,112 |
|
1,349,766 |
|
922,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment |
|
|
|
|
|
|
|
|
|
|
|
7,804,431 |
|
5,811,894 |
|
|
|
|
Advances for future capital increases |
|
|
|
|
|
|
|
|
|
|
|
33,340 |
|
1,355,520 |
|
|
|
|
Allowance for equity investment losses |
|
|
|
|
|
|
|
|
|
|
|
- |
|
(19,302) |
|
|
|
|
(*) number of quotas
Fair value adjustments (value added) of net assets acquired in business combinations are classified in the parent’s statement of profit or loss in the group of Investments. In the parent company’s statement of profit or loss, the amortization of the fair value adjustments (value added) of net assets of R$ 60,918 (R$ 62,713 in 2016) is classified in line item “share of profit (loss) of investees”, in conformity with ICPC 09 (R2).
As at December 31, 2017, the advance for future capital increase recognized in noncurrent assets refers to an advance of R$ 350,000 to subsidiary CPFL Paulista.
The movements, in the parent company, of the balances of investments in subsidiaries for the years of 2017 and 2016 are as follows:
78
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Investment |
|
Investment at of December 31, 2016 |
Capital increase (reduction) / payment of capital |
Share of profit (loss) of investees |
Share of profit (loss) of investees (OCI) |
Dividend and Interest on capital |
Advances for future capital increases |
Corporate restructuring (Note 12.6) |
Investment at of December 31, 2017 | |||||||
CPFL Paulista |
|
1,063,400 |
|
- |
|
280,354 |
|
95,461 |
|
(68,812) |
|
- |
|
- |
|
1,370,403 |
CPFL Piratininga |
|
355,755 |
|
- |
|
152,080 |
|
(1,198) |
|
(45,578) |
|
- |
|
- |
|
461,059 |
Companhia Luz e Força Santa Cruz |
|
140,520 |
|
- |
|
23,447 |
|
- |
|
(15,357) |
|
- |
|
(148,610) |
|
- |
CPFL Leste Paulista |
|
52,853 |
|
- |
|
9,589 |
|
- |
|
(7,002) |
|
- |
|
(55,439) |
|
- |
CPFL Sul Paulista |
|
58,895 |
|
- |
|
10,545 |
|
- |
|
(8,244) |
|
- |
|
(61,195) |
|
- |
Companhia Jaguari de Energia (CPFL Santa Cruz) |
|
30,255 |
|
- |
|
11,720 |
|
- |
|
(2,489) |
|
- |
|
300,978 |
|
340,463 |
CPFL Mococa |
|
33,824 |
|
- |
|
6,999 |
|
- |
|
(5,089) |
|
- |
|
(35,733) |
|
- |
RGE |
|
1,614,320 |
|
- |
|
117,700 |
|
(1,366) |
|
(50,319) |
|
- |
|
- |
|
1,680,334 |
RGE Sul |
|
- |
|
- |
|
57,305 |
|
435 |
|
- |
|
- |
|
1,170,577 |
|
1,228,317 |
CPFL Geração |
|
2,158,384 |
|
- |
|
594,026 |
|
2,536 |
|
(400,831) |
|
- |
|
- |
|
2,354,115 |
CPFL Jaguari Geração |
|
45,099 |
|
- |
|
15,709 |
|
- |
|
(9,837) |
|
- |
|
- |
|
50,970 |
CPFL Brasil |
|
109,054 |
|
- |
|
94,455 |
|
135 |
|
(102,639) |
|
- |
|
(4,911) |
|
96,093 |
CPFL Planalto |
|
2,101 |
|
- |
|
3,550 |
|
- |
|
(2,358) |
|
- |
|
- |
|
3,293 |
CPFL Serviços |
|
97,968 |
|
76,000 |
|
(12,863) |
|
- |
|
- |
|
(56,000) |
|
- |
|
105,105 |
CPFL Atende |
|
17,150 |
|
- |
|
7,128 |
|
- |
|
(4,941) |
|
- |
|
- |
|
19,338 |
Nect |
|
10,295 |
|
- |
|
17,392 |
|
- |
|
(12,172) |
|
- |
|
- |
|
15,515 |
CPFL Total |
|
27,570 |
|
(10,000) |
|
20,865 |
|
- |
|
(17,811) |
|
- |
|
- |
|
20,624 |
CPFL Jaguariuna |
|
1,256,161 |
|
1,299,520 |
|
(8,360) |
|
- |
|
- |
|
(1,299,520) |
|
(1,247,801) |
|
- |
CPFL Telecom |
|
(19,302) |
|
31,000 |
|
(14,021) |
|
- |
|
- |
|
4,340 |
|
- |
|
2,018 |
CPFL Centrais Geradoras |
|
15,459 |
|
- |
|
735 |
|
- |
|
(17) |
|
- |
|
- |
|
16,177 |
CPFL Eficiência |
|
61,543 |
|
- |
|
(2,582) |
|
- |
|
(3,708) |
|
- |
|
- |
|
55,252 |
Authi |
|
16,810 |
|
(2,600) |
|
24,912 |
|
|
|
(20,428) |
|
|
|
|
|
18,694 |
|
|
7,148,112 |
|
1,393,920 |
|
1,410,685 |
|
96,003 |
|
(777,632) |
|
(1,351,180) |
|
(82,135) |
|
7,837,770 |
Investment |
|
Investment at of December 31, 2015 |
Capital increase /payment of capital |
Share of profit (loss) of investees |
Share of profit (loss) of investees (OCI) |
Dividend and Interest on capital |
Advances for future capital increases |
Other |
|
Investment at of December 31, 2016 | ||||||
CPFL Paulista |
|
1,352,393 |
|
- |
|
255,329 |
|
(260,666) |
|
(283,656) |
|
- |
|
- |
|
1,063,400 |
CPFL Piratininga |
|
537,670 |
|
- |
|
68,114 |
|
(109,626) |
|
(140,404) |
|
- |
|
- |
|
355,755 |
CPFL Santa Cruz |
|
131,149 |
|
- |
|
23,797 |
|
- |
|
(14,427) |
|
- |
|
- |
|
140,520 |
CPFL Leste Paulista |
|
46,301 |
|
- |
|
10,731 |
|
- |
|
(4,180) |
|
- |
|
- |
|
52,853 |
CPFL Sul Paulista |
|
55,233 |
|
- |
|
8,455 |
|
- |
|
(4,793) |
|
- |
|
- |
|
58,895 |
CPFL Jaguari |
|
28,521 |
|
- |
|
7,988 |
|
- |
|
(6,253) |
|
- |
|
- |
|
30,255 |
CPFL Mococa |
|
29,205 |
|
- |
|
9,198 |
|
- |
|
(4,580) |
|
- |
|
- |
|
33,824 |
RGE |
|
1,580,807 |
|
- |
|
102,647 |
|
(3,915) |
|
(65,218) |
|
- |
|
- |
|
1,614,320 |
CPFL Geração |
|
2,169,922 |
|
- |
|
401,148 |
|
(9,531) |
|
(403,086) |
|
- |
|
(68) |
|
2,158,384 |
CPFL Jaguari Geração |
|
42,729 |
|
- |
|
6,655 |
|
- |
|
(4,284) |
|
- |
|
- |
|
45,099 |
CPFL Brasil |
|
51,779 |
|
- |
|
104,235 |
|
- |
|
(46,960) |
|
- |
|
- |
|
109,054 |
CPFL Planalto |
|
2,003 |
|
- |
|
2,476 |
|
- |
|
(2,378) |
|
- |
|
- |
|
2,101 |
CPFL Serviços |
|
7,117 |
|
43,026 |
|
(8,175) |
|
- |
|
- |
|
56,000 |
|
- |
|
97,968 |
CPFL Atende |
|
17,373 |
|
- |
|
5,833 |
|
- |
|
(6,056) |
|
- |
|
- |
|
17,150 |
Nect |
|
16,087 |
|
- |
|
13,424 |
|
- |
|
(19,216) |
|
- |
|
- |
|
10,295 |
CPFL Total |
|
19,930 |
|
- |
|
12,817 |
|
- |
|
(5,178) |
|
- |
|
- |
|
27,570 |
CPFL Jaguariuna |
|
2,496 |
|
80 |
|
(35,498) |
|
(10,438) |
|
- |
|
1,299,520 |
|
- |
|
1,256,161 |
CPFL Telecom |
|
(33,969) |
|
19,000 |
|
(33,333) |
|
- |
|
- |
|
29,000 |
|
- |
|
(19,302) |
CPFL Centrais Geradoras |
|
19,972 |
|
- |
|
(958) |
|
- |
|
(3,555) |
|
- |
|
- |
|
15,459 |
CPFL Eficiência |
|
66,038 |
|
- |
|
5,926 |
|
- |
|
(10,421) |
|
- |
|
- |
|
61,543 |
Authi |
|
1,913 |
|
2,600 |
|
24,264 |
|
- |
|
(11,967) |
|
- |
|
- |
|
16,810 |
|
|
6,144,668 |
|
64,706 |
|
985,074 |
|
(394,175) |
|
(1,036,612) |
|
1,384,520 |
|
(68) |
|
7,148,112 |
|
|
December 31, 2017 |
December 31, 2016 |
2017 |
|
2016 | ||
Investments in joint ventures |
|
Share of equity |
|
Share of profit (loss) | ||||
|
|
|
|
|
|
|
|
|
Baesa |
|
187,654 |
|
175,914 |
|
11,849 |
|
9,853 |
Enercan |
|
176,998 |
|
562,701 |
|
85,808 |
|
117,112 |
Chapecoense |
|
385,870 |
|
537,170 |
|
120,651 |
|
117,451 |
EPASA |
|
240,388 |
|
206,749 |
|
94,663 |
|
67,577 |
Fair value adjustments of assets, net |
|
10,640 |
|
11,219 |
|
(579) |
|
(579) |
|
|
1,001,550 |
|
1,493,753 |
|
312,390 |
|
311,414 |
At the Extraordinary General Meeting held on August 2, 2017, the shareholders of the joint venture ENERCAN approved a capital reduction by R$ 188,000 (R$ 91,599 proportional to the Company’s indirect interest), with capital decreasing to R$ 200,787 (R$ 388,787 as at December 31, 2016).
At the Extraordinary General Meeting held on October 25, 2017, the shareholders of subsidiary CERAN approved a capital reduction by R$ 350,875, with fully subscribed and paid-in capital decreasing to R$ 120,000.
79
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
12.2Fair value adjustments and goodwill
Fair value adjustments (value added) refer basically to the right to the concession acquired through business combinations. The goodwill refers basically to acquisitions of investments and is based on projections of future profits.
In the consolidated financial statement, these amounts are classified as Intangible Assets (note 14).
12.3Dividends and interest on capital receivable
At December 31, 2017 and 2016, 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, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 | |||||||||||||||||||||
CPFL Paulista |
49,798 |
- |
- |
|
- |
49,798 |
- | ||||||||||||||||||||
CPFL Piratininga |
- |
72,080 |
- |
|
- |
- |
72,080 | ||||||||||||||||||||
CPFL Sul Paulista (*) |
- |
8,641 |
- |
|
1,986 |
- |
10,627 | ||||||||||||||||||||
Companhia Jaguari de Energia (CPFL Santa Cruz) |
24,918 |
6,115 |
13,960 |
|
- |
38,878 |
6,115 | ||||||||||||||||||||
RGE |
50,319 |
24,672 |
- |
|
- |
50,319 |
24,672 | ||||||||||||||||||||
CPFL Geração |
- |
396,086 |
- |
|
- |
- |
396,086 | ||||||||||||||||||||
CPFL Centrais Geradoras |
17 |
- |
- |
|
- |
17 |
- | ||||||||||||||||||||
CPFL Jaguari Geração |
- |
1,664 |
- |
|
- |
- |
1,664 | ||||||||||||||||||||
CPFL Brasil |
20,748 |
86,020 |
2,361 |
|
1,650 |
23,109 |
87,671 | ||||||||||||||||||||
CPFL Planalto |
888 |
- |
- |
|
- |
888 |
- | ||||||||||||||||||||
CPFL Atende |
1,003 |
1,953 |
620 |
|
554 |
1,623 |
2,507 | ||||||||||||||||||||
Nect |
4,348 |
5,600 |
- |
|
- |
4,348 |
5,600 | ||||||||||||||||||||
CPFL Eficiência Energética |
12,195 |
9,565 |
17,404 |
|
16,325 |
29,599 |
25,891 | ||||||||||||||||||||
AUTHI |
6,228 |
10,064 |
- |
|
- |
6,228 |
10,064 | ||||||||||||||||||||
|
170,461 |
622,459 |
34,344 |
|
20,514 |
204,807 |
642,976 | ||||||||||||||||||||
(*) At December 31, 2017 the companies were group in Companhia Jaguari de Energia (note 12.6.2)
The consolidated balance includes dividends and interest on capital receivable amounting to R$ 56,145 at December 31, 2017 (R$ 73,328 at December 31, 2016) related basically to joint ventures.
After resolutions of the AGMs/EGMs of its subsidiaries, the Company recognized in 2017 R$ 358,891 relating to dividends and interest on capital for 2016. In addition, the subsidiaries declared in 2017 (i) R$ 277,612 relating to interim dividends and interest on capital on the interim results for 2017, and (ii) R$ 280,191 relating to minimum mandatory dividend for 2017.
From the balance of dividends and interest on capital receivable as at December 31, 2016, R$ 12,164 was rectified during 2017.
From the amounts recognized as receivables, R$ 1,172,336 were paid to the Company by subsidiaries in 2017.
12.4Noncontrolling interests and joint ventures
The disclosure of interests in subsidiaries, in accordance with IFRS 12 and CPC 45, is as follows:
80
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
12.4.1 Movements in noncontrolling interests
|
|
CERAN |
|
CPFL Renováveis |
Paulista Lajeado |
Total | |||
At of December 31, 2015 |
|
234,271 |
|
2,148,490 |
|
73,182 |
|
2,455,942 | |
Equity Interests and voting capital |
|
35.00% |
|
48.39% |
|
40.07% |
|
| |
|
|
|
|
|
|
|
|
| |
Profit (loss) attributable to noncontrolling shareholders |
38,621 |
|
(65,311) |
|
4,862 |
|
(21,828) | ||
Dividends |
|
(9,172) |
|
(22,751) |
|
1,096 |
|
(30,827) | |
Other movements |
|
- |
|
535 |
|
(1,176) |
|
(641) | |
At of December 31, 2016 |
|
263,719 |
|
2,060,963 |
|
77,966 |
|
2,402,648 | |
Equity Interests and voting capital |
|
35.00% |
|
48.40% |
|
40.07% |
|
| |
|
|
|
|
|
|
|
|
| |
Profit (loss) attributable to noncontrolling shareholders |
37,949 |
|
13,720 |
|
11,623 |
|
63,292 | ||
Dividends |
|
(92,832) |
|
(16,619) |
|
(8,769) |
|
(118,220) | |
Capital increase (reduction) |
|
(122,806) |
|
15 |
|
- |
|
(122,791) | |
Other movements |
|
- |
|
- |
|
(113) |
|
(113) | |
At of December 31, 2017 |
|
86,031 |
|
2,058,079 |
|
80,707 |
|
2,224,816 | |
Equity Interests and voting capital |
|
35.00% |
|
48.40% |
|
40.07% |
|
| |
12.4.2 Summarized financial information on subsidiaries that have noncontrolling interests
The summarized financial information on subsidiaries that have noncontrolling interests at December 31, 2017 and 2016, is as follows:
|
|
December 31, 2017 |
|
December 31, 2016 | ||||||||
|
|
CERAN |
|
CPFL Renováveis |
Paulista Lajeado |
CERAN |
|
CPFL Renováveis |
Paulista Lajeado | |||
Current assets |
|
110,566 |
|
1,623,645 |
|
48,037 |
|
288,538 |
|
1,398,797 |
|
39,429 |
Cash and cash equivalents |
|
37,043 |
|
950,215 |
|
24,086 |
|
238,241 |
|
908,982 |
|
24,688 |
Noncurrent assets |
|
848,445 |
|
11,232,357 |
|
120,677 |
|
927,948 |
|
11,066,086 |
|
122,991 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
198,624 |
|
1,957,000 |
|
42,525 |
|
121,646 |
|
1,313,466 |
|
9,586 |
Borrowings and debentures |
|
105,844 |
|
1,259,105 |
|
36,453 |
|
60,162 |
|
889,981 |
|
324 |
Other financial liabilities |
|
12,360 |
|
7,258 |
|
264 |
|
20,800 |
|
85,523 |
|
1,056 |
Noncurrent liabilities |
|
514,583 |
|
6,760,025 |
|
258 |
|
341,356 |
|
6,713,610 |
|
36,404 |
Borrowings and debentures |
|
422,166 |
|
5,251,704 |
|
- |
|
254,732 |
|
5,517,890 |
|
36,167 |
Other financial liabilities |
|
83,766 |
|
- |
|
- |
|
86,624 |
|
633 |
|
- |
Equity |
|
245,804 |
|
4,138,977 |
|
125,931 |
|
753,484 |
|
4,437,807 |
|
116,431 |
Equity attributable to owners of the Company |
|
245,804 |
|
4,032,448 |
|
125,931 |
|
753,484 |
|
4,324,589 |
|
116,431 |
Equity attributable to noncontrolling interests |
|
- |
|
106,529 |
|
- |
|
- |
|
113,218 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
2016 | ||||||||
|
|
CERAN |
|
CPFL Renováveis |
Paulista Lajeado |
CERAN |
|
CPFL Renováveis |
Paulista Lajeado | |||
Net operating revenue |
|
321,743 |
|
1,959,084 |
|
38,278 |
|
301,179 |
|
1,646,589 |
|
30,820 |
Operational costs and expenses |
|
(103,671) |
|
(737,472) |
|
(10,566) |
|
(67,242) |
|
(653,459) |
|
(27,404) |
Depreciation and amortization |
|
(45,212) |
|
(617,017) |
|
(4) |
|
(48,082) |
|
(553,169) |
|
(3) |
Interest income |
|
30,489 |
|
126,041 |
|
2,089 |
|
28,232 |
|
112,389 |
|
2,728 |
Interest expense |
|
(40,202) |
|
(648,571) |
|
(4,050) |
|
(36,485) |
|
(591,626) |
|
(1,383) |
Income tax expense |
|
(54,099) |
|
(74,125) |
|
(2,911) |
|
(55,596) |
|
(46,311) |
|
(1,137) |
Profit (loss) for the year |
|
108,427 |
|
19,645 |
|
29,006 |
|
110,345 |
|
(143,706) |
|
12,134 |
Attributable to owners of the Company |
|
108,427 |
|
11,484 |
|
29,006 |
|
110,345 |
|
(151,900) |
|
12,134 |
Attributable to noncontrolling interests |
|
- |
|
8,162 |
|
- |
|
- |
|
8,195 |
|
- |
81
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
12.4.3 Joint ventures
The summarized financial information on joint ventures at December 30, 2017 and 2016, is as follows:
|
|
December 31, 2017 |
|
December 31, 2016 | ||||||||||||
|
|
Enercan |
|
Baesa |
|
Chapecoense |
|
Epasa |
|
Enercan |
|
Baesa |
|
Chapecoense |
|
Epasa |
Current assets |
|
182,843 |
|
124,361 |
|
329,721 |
|
319,222 |
|
405,874 |
|
54,703 |
|
577,296 |
|
257,082 |
Cash and cash equivalents |
|
48,695 |
|
17,873 |
|
116,425 |
|
74,741 |
|
288,956 |
|
18,946 |
|
280,083 |
|
85,709 |
Noncurrent assets |
|
1,101,291 |
|
1,030,904 |
|
2,745,989 |
|
531,527 |
|
1,174,869 |
|
1,117,120 |
|
2,892,371 |
|
562,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
291,010 |
|
121,369 |
|
426,695 |
|
157,343 |
|
196,760 |
|
116,192 |
|
391,402 |
|
172,401 |
Borrowings and debentures |
|
140,090 |
|
63,154 |
|
138,788 |
|
34,299 |
|
87,560 |
|
87,032 |
|
137,753 |
|
35,555 |
Other financial liabilities |
|
4,085 |
|
17,113 |
|
67,897 |
|
993 |
|
7,848 |
|
24,119 |
|
78,372 |
|
62,762 |
Noncurrent liabilities |
|
629,850 |
|
283,456 |
|
1,892,407 |
|
242,765 |
|
229,085 |
|
352,142 |
|
2,024,989 |
|
259,559 |
Borrowings and debentures |
|
510,874 |
|
- |
|
1,172,181 |
|
186,373 |
|
153,020 |
|
63,196 |
|
1,292,239 |
|
218,891 |
Other financial liabilities |
|
25,115 |
|
265,250 |
|
716,986 |
|
- |
|
26,254 |
|
276,600 |
|
730,494 |
|
28,686 |
Equity |
|
363,273 |
|
750,440 |
|
756,608 |
|
450,641 |
|
1,154,897 |
|
703,489 |
|
1,053,275 |
|
387,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
2016 | ||||||||||||
|
|
Enercan |
|
Baesa |
|
Chapecoense |
|
Epasa |
|
Enercan |
|
Baesa |
|
Chapecoense |
|
Epasa |
Net operating revenue |
|
580,430 |
|
412,329 |
|
829,525 |
|
789,402 |
|
564,966 |
|
239,730 |
|
789,732 |
|
548,145 |
Operational costs and expenses |
|
(273,339) |
|
(265,955) |
|
(186,638) |
|
(518,352) |
|
(137,159) |
|
(76,985) |
|
(140,212) |
|
(328,093) |
Depreciation and amortization |
|
(52,773) |
|
(50,621) |
|
(126,811) |
|
(35,640) |
|
(53,888) |
|
(51,429) |
|
(126,770) |
|
(35,075) |
Interest income |
|
32,849 |
|
4,906 |
|
24,639 |
|
6,102 |
|
31,602 |
|
9,115 |
|
35,113 |
|
10,329 |
Interest expense |
|
(31,135) |
|
(27,986) |
|
(183,237) |
|
(26,197) |
|
(36,275) |
|
(23,961) |
|
(125,192) |
|
(23,128) |
Income tax and social contribution expenses |
|
(88,229) |
|
(25,442) |
|
(123,307) |
|
(39,892) |
|
(121,223) |
|
(20,401) |
|
(106,683) |
|
(28,011) |
Profit (loss) for the year |
|
176,113 |
|
47,385 |
|
236,570 |
|
177,458 |
|
240,363 |
|
39,405 |
|
212,294 |
|
126,665 |
Equity Interests and voting capital |
|
48.72% |
|
25.01% |
|
51.00% |
|
53.34% |
|
48.72% |
|
25.01% |
|
51.00% |
|
53.34% |
Even holding more than 50% of the equity interest in Epasa and Chapecoense, the subsidiary CPFL Geração controls these investments jointly with other shareholders. The analysis of the classification of the type of investment is based on the Shareholders' Agreement of each joint venture.
The borrowings from the BNDES obtained by the joint ventures BAESA and Chapecoense establish restrictions on the payment of dividend to subsidiary CPFL Geração above the minimum mandatory dividend of 25% without the prior consent of the BNDES.
12.4.4 Joint operation
Through its wholly-owned subsidiary CPFL Geração, the Company holds part of the assets of the Serra da Mesa hydropower plant, located on the Tocantins River, in Goias State. The concession and the right to operate the hydropower plant are held by Furnas Centrais Elétricas S.A. In order to maintain these assets operating jointly with Furnas (jointly operation), CPFL Geração was assured 51.54% of the installed power of 1,275 MW (657 MW) and the assured energy of mean 671 MW (mean 345.4 MW) until 2028.
12.5 Business combination - Acquisition of AES Sul Distribuidora Gaúcha de Energia S.A. (“AES Sul”)
On June 16, 2016, the Company disclosed in a Material Fact that it had entered into an agreement for the acquisition of 100% of the shares of AES Sul Distribuidora Gaúcha de Energia S.A. (“AES Sul”), currently RGE Sul, through its wholly-owned subsidiary CPFL Jaguariúna Participações Ltda., shares until then held by AES Guaíba II Empreendimentos Ltda. (“seller”), indirect wholly-owned subsidiary of The AES Corporation.
On August 5, 2016, the transaction was approved by CADE (Brazilian antitrust agency) and, on September 9, 2016, authorized by ANEEL (Brazilian Electricity Regulatory Agency).
The acquisition was completed on October 31, 2016 (“acquisition date”), after all the conditions precedent of the transaction were met, date in which the control of RGE Sul was taken over by CPFL Jaguariúna, the ownership of the shares was transferred and the payment was made. This acquisition resulted in a business combination in accordance with CPC 15 (R1) – “Combinação de Negócios” and IFRS 3 (R) – Business Combination since CPFL Jaguariúna started holding the control of RGE Sul.
The consideration initially transferred was R$ 1,698,455, paid in cash, in a lump sum, at the acquisition date. This consideration was subsequently adjusted for changes in working capital and net debt of RGE Sul, occurred in the period between December 31, 2015 and the acquisition date, as per the amendment to the agreement. The final value of the consideration, considering the price adjustment, was R$1,591,839.
RGE Sul is a publicly traded company engaged in providing public electricity distribution services in any forms, and these activities are regulated by ANEEL, linked to the Ministry of Mines and Energy. Additionally, RGE Sul is authorized to participate in programs that aim at other forms of energy, technologies and services, including operation of activities derived directly or indirectly from the use of assets, rights and technologies owned by it.
82
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Its administrative headquarters are located at Avenida São Borja, 2801, Bairro Fazenda São Borja, São Leopoldo, State of Rio Grande do Sul.
RGE Sul holds the concession for operation of its activities for a thirty-year period, up to November 5, 2027, its concession area comprises 118 municipalities of the State of Rio Grande do Sul, located between the metropolitan region of Porto Alegre and the borders with Uruguay and Argentina, serving approximately 1.3 million consumers.
The acquisition of RGE Sul is in line with the Company’s growth strategy, especially in the distribution segment, with potential gains of scale for its operations. The Company also expects to obtain important synergies relating to the concession area of RGE Sul since another important distributor of the Group (RGE) holds concession in the state of Rio Grande do Sul.
Additional information to the acquisition of RGE Sul
a) Consideration
|
|
|
RGE Sul |
Consideration paid, net |
|
October 31, 2016 | |
|
Consideration directly transferred to prior shareholders |
|
1,698,455 |
|
Reimbursements due to adjustments related to agreement clauses |
|
(106,616) |
|
|
|
1,591,839 |
b) Assets acquired and liabilities assumed at the acquisition date
The total amount paid on the transaction was allocated at the acquisition date to the assets acquired and liabilities assumed at fair values, including intangible assets relating to the concession right. Accordingly, as the total amount paid was allocated to assets identified and liabilities assumed, no residual value was allocated as goodwill on this transaction.
The allocation of the amount paid for assets and liabilities acquired was made with amounts provisionally calculated for the financial statements as at December 31, 2016, based on analyses conducted by Management itself at the time these financial statements were prepared. The final fair values presented were pending confirmation until the completion of the economic and financial appraisal report prepared by independent appraiser, completed on October 30, 2017.
As a consequence, certain reclassifications were made to the amounts as at December 31, 2016, relating to the (i) decrease in the fair value of the concession infrastructure’s intangible asset; (ii) completion of the fair value allocation and alignment of the criteria on the provision for tax, civil and labor risks; (iii) increase in the amount of trade receivables; (iv) decrease in the concession’s financial asset; (v) decrease in the intangible asset relating to the operation right, as a consequence of the revision of the assumptions used to determine the value of tangible and intangible assets; and (vi) recording of deferred income tax and social contribution balances on certain adjustments. These reclassifications are within the measurement period, pursuant to CPC 15 / IFRS 3, and were considered immaterial for purposes of restatement of the 2016 financial statements.
83
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
The allocation of the purchase price paid to the fair values of the assets and liabilities acquired is as follows:
|
|
October 31, 2016 |
October 31, 2016 | |
|
|
(preliminary) |
|
(final) |
Current assets |
|
|
|
|
Cash and cash equivalents |
|
95,164 |
|
95,164 |
Consumers, concessionaries and licensees |
|
580,945 |
|
580,945 |
Other current assets |
|
89,548 |
|
89,548 |
|
|
|
|
|
Noncurrent assets |
|
|
|
|
Consumers, concessionaries and licensees |
|
54,111 |
|
79,501 |
Deferred tax assets |
|
204,176 |
|
310,741 |
Concession financial asset |
|
876,281 |
|
863,943 |
Intangible assets - Distribution infrastructure |
|
1,456,472 |
|
1,444,401 |
Intangible acquired in this business combination |
|
413,796 |
|
398,739 |
Other noncurrent assets |
|
147,784 |
|
155,508 |
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Trade payables |
|
479,031 |
|
479,031 |
Debentures and borrowings |
|
24,672 |
|
24,672 |
Taxes, fees and contributions |
|
65,198 |
|
65,198 |
Sector financial liability |
|
29,246 |
|
29,246 |
Regulatory charges |
|
60,787 |
|
60,787 |
Other current liabilities |
|
114,552 |
|
114,552 |
|
|
|
|
|
Noncurrent liabilities |
|
|
|
|
Debentures and borrowings |
|
1,131,949 |
|
1,131,949 |
Sector financial liability |
|
64,939 |
|
64,939 |
Provision for tax, civil and labor risks |
|
223,383 |
|
323,595 |
Other noncurrent liabilities |
|
132,682 |
|
132,682 |
Net assets acquired |
|
1,591,839 |
|
1,591,839 |
|
|
|
|
|
Consideration paid, net |
|
1,591,839 |
|
1,591,839 |
(-) Fair value of identifiable net assets acquired |
|
1,591,839 |
|
1,591,839 |
Goodwill |
|
- |
|
- |
The fair values presented above were finalized are in accordance with the economic and financial appraisal report prepared by the independent expert.
The fair values of the concession’s financial asset and the distribution infrastructure’s intangible asset were calculated based on the independent appraiser’s report, considering the same assumptions adopted at the time of preparation of the report for Periodic Tariff Review purposes (Regulatory Remuneration Basis - “BRR”).
c) Contingent consideration
The share purchase agreement does not contain any clauses relating to the contingent consideration to be paid to the seller.
d) Indemnification assets
The agreement for purchase of 100% of the shares of RGE Sul establishes that CPFL Jaguariúna may be indemnified, up to the limit of 15% of the total amount paid, if any losses are incurred in the future, contingent
84
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
upon the compliance with specific clauses, derived from matters originated in the seller or in any of its subsidiaries established in the share purchase agreement. There are also specific clauses for two lawsuits (regulatory and environmental) in which the seller undertakes to indemnify fully CPFL Jaguariúna in the event of cash outflows relating to these lawsuits, and CPFL Jaguariúna undertakes to pass on to the seller any cash flows relating to these lawsuits that may be received in the future, in order to neutralize any effect on these two matters in particular.
The recognized final fair value of the indemnification asset is R$ 41,974, relating to the environmental lawsuit (see item “e” below). This indemnification asset was recognized in the same amount of the fair value attributed to this contingent liability.
No indemnification asset was recognized for the regulatory lawsuit for which there is a specific indemnification clause since no contingent liability relating to this lawsuit was recognized at the acquisition date.
e) Contingent liabilities recognized
We present below the final contingent liabilities recognized in the amount of R$150,065:
|
|
RGE Sul |
|
|
October 31, 2016 |
Labor lawsuits (i) |
|
11,429 |
Civil lawsuits (i) |
|
83,575 |
Regulatory lawsuits (i) |
|
5,850 |
Environmental lawsuits (ii) |
|
41,974 |
Tax lawsuits (i) |
|
7,236 |
|
|
150,065 |
Provisions recognized in the subsidiary |
|
173,530 |
Provisions for tax, civil and labor risks |
|
323,595 |
i. These amounts represent the fair values of the labor, civil, regulatory and tax lawsuits for which the likelihood of loss attributed at the acquisition date is “possible” or “remote”. Considering that the settlement of these lawsuits depends on third parties, either at the judicial or administrative level, it is not possible to estimate a schedule for the occurrence of any cash outflows associated with these contingent liabilities. No indemnification asset was recognized for these contingent liabilities.
ii. Refers to the fair value attributed to a class action lawsuit for which the likelihood of loss attributed by Management, together with its legal counsel, is “possible” at the acquisition date. This class action lawsuit seeks compensation for environmental damages occurred in a woodworking and pole manufacture unit that was operated, between 1997 and 2005, by RGE Sul together with its associate at that time AES Florestal. Until 1997, this unit was operated by the former concessionaire, Companhia Estadual de Energia Elétrica (CEEE). An indemnification asset in the same amount was recognized at the acquisition date.
f) Receivables acquired
The fair value of the receivables acquired is R$ 660,446. The gross contractual amount of the receivables is R$ 703,672 and based on the independent expert best estimates R$ 43,226 are not expected to be received and represent therefore the portion that is expected to represent an impairment loss.
g) Net cash outflow on the acquisition
85
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Consideration paid, net |
|
1,591,839 |
(-) Cash and cash equivalent balances acquired |
|
(95,164) |
Cash and cash equivalents transferred, net |
|
1,496,675 |
h) Financial information on the acquiree
i. On the net operating revenue and profit of the subsidiary acquired included in the consolidated financial statements in 2017:
Considering that the acquisition date was October 31, 2016, the consolidated financial statement as at December 31, 2017 comprises fully the revenue and the result of RGE Sul for the period. In the consolidated financial statement of 2016, two months are compromised related to the activities of RGE Sul:
|
|
Operational revenue, net |
Profit or loss, net | |
|
|
2016 |
|
2016 |
RGE Sul (from November 1st to December 31, 2016) |
|
522,677 |
|
(27,687) |
ii. Consolidated financial information on the net operating revenue and profit for 2016 had the acquisition occurred on January 1, 2016:
|
|
Operational revenue, net |
Profit or loss, net | |
|
|
Jan to Dec 2016 |
|
Jan to Dec 2016 |
CPFL Energia consolidated |
|
19,112,089 |
|
879,057 |
Pro-forma adjustments (*) |
|
2,853,167 |
|
(146,336) |
Total |
|
21,965,256 |
|
732,721 |
(*) The pro forma adjustments in the net operating revenue consider the addition of the subsidiary’s net operating revenue for the period in which it was not a subsidiary and, consequently, was not consolidated by the Company. The pro forma adjustments to profit for the period consider: (i) addition of the subsidiary’s result for the period in which it was not consolidated by the Company; (ii) inclusion of the amortization of the intangible asset acquired on the business combination and the amortization and disposal of the fair value of the distribution infrastructure’s intangible asset, had the acquisition occurred on January 1, 2016.
12.6 Corporate restructurings
12.6.1 Merger of CPFL Jaguariúna
At the EGM held on December 15, 2017, approval was given for the merger of CPFL Jaguariúna into RGE Sul. Accordingly, the merged company was wound up and RGE Sul became the successor to its assets, rights and obligations.
At the time of the merger, the concepts of CVM Instructions No. 319/99 and 349/01 were applied, which resulted in the recognition of a goodwill rectifying account, generating a tax credit of R$ 99,981 (note 9). To reassess its investments, the Company and CPFL Brasil recognized, proportionally to its investments in RGE Sul, (i) a reassessed concession intangible asset of R$ 148,487 and R$ 45,594 respectively, totaling R$ 194,081, corresponding to the fair value adjustment (value added) of the intangible assets relating to the distribution infrastructure and the right to operate the concession; and (ii) a net adjustment corresponding to the surplus value and decrease in value in the amounts of R$ 66,607 and R$ 20,452, respectively, corresponding to the fair value of the provision for tax, civil and labor risks, decrease in value of consumers, and surplus value of indemnification asset. Both amounts are non-deductible for tax purposes for the Company and for CPFL Brasil.
86
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
12.6.2 Grouping of subsidiaries Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia and Companhia Luz e Força de Mococa
On November 21, 2017, ANEEL through Resolution No. 6,723/2017 authorized the grouping of the power distribution companies Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia, Companhia Luz e Força de Mococa and Companhia Jaguari de Energia, pursuant to Normative Resolution No, 716/2016 of May 3, 2016. Effective as of January 1, 2018, the operations of these subsidiaries are controlled only by Companhia Jaguari de Energia, which adopted the trade name “CPFL Santa Cruz”. This operation was approved by the Extraordinary General Meetings (“EGM”) held on December 31, 2017 at the grouped companies.
87
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 13 ) 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, 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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
- |
|
171 |
|
- |
|
236 |
|
- |
|
- |
|
1,084,612 |
|
1,085,019 |
Disposals |
- |
|
- |
|
(421) |
|
(6,705) |
|
(1,249) |
|
(779) |
|
(26,696) |
|
(35,850) |
Transfers |
8,325 |
|
95,799 |
|
177,902 |
|
1,160,915 |
|
22,467 |
|
456 |
|
(1,465,864) |
|
- |
Reclassification - cost |
(137) |
|
(1,434) |
|
(40,852) |
|
52,205 |
|
12 |
|
(39) |
|
(1,219) |
|
8,536 |
Transfers from/to other assets - cost |
- |
|
3 |
|
- |
|
(5,025) |
|
(167) |
|
(452) |
|
(10,523) |
|
(16,164) |
Depreciation |
(7,632) |
|
(75,659) |
|
(54,035) |
|
(377,529) |
|
(8,888) |
|
(1,676) |
|
- |
|
(525,420) |
Write-off of depreciation |
(7) |
|
1 |
|
62 |
|
4,694 |
|
480 |
|
254 |
|
- |
|
5,484 |
Reclassification - depreciation |
(1,211) |
|
(967) |
|
(5,374) |
|
(1,002) |
|
7 |
|
11 |
|
- |
|
(8,536) |
Transfers from/to other assets - depreciation |
- |
|
3 |
|
(46) |
|
1,374 |
|
150 |
|
91 |
|
- |
|
1,572 |
Impairment |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(5,221) |
|
(5,221) |
Business combination |
- |
|
- |
|
- |
|
2,140 |
|
27,175 |
|
- |
|
1,049 |
|
30,364 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2016 |
176,145 |
|
1,394,162 |
|
1,153,220 |
|
6,655,391 |
|
76,217 |
|
7,562 |
|
250,302 |
|
9,712,998 |
Historical cost |
206,330 |
|
2,060,191 |
|
1,652,934 |
|
9,066,408 |
|
106,920 |
|
21,507 |
|
250,302 |
|
13,364,592 |
Accumulated depreciation |
(30,185) |
|
(666,028) |
|
(499,714) |
|
(2,411,017) |
|
(30,704) |
|
(13,945) |
|
- |
|
(3,651,594) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
- |
|
- |
|
- |
|
772 |
|
2,978 |
|
- |
|
753,137 |
|
756,887 |
Disposals |
(22) |
|
(132) |
|
(140) |
|
(32,336) |
|
(2,248) |
|
(635) |
|
(8,332) |
|
(43,845) |
Transfers |
2,950 |
|
400 |
|
154,737 |
|
574,944 |
|
20,434 |
|
1,484 |
|
(754,948) |
|
- |
Transfers from/to other assets - cost |
(1,893) |
|
6,393 |
|
(154,880) |
|
98,579 |
|
(126) |
|
(330) |
|
11,033 |
|
(41,224) |
Depreciation |
(8,004) |
|
(79,276) |
|
(59,736) |
|
(431,393) |
|
(18,055) |
|
(1,332) |
|
- |
|
(597,795) |
Write-off of depreciation |
2 |
|
124 |
|
120 |
|
9,529 |
|
1,379 |
|
387 |
|
- |
|
11,540 |
Transfers from/to other assets - depreciation |
(683) |
|
(2,413) |
|
1,930 |
|
9,690 |
|
(8) |
|
108 |
|
- |
|
8,624 |
Business combination |
- |
|
- |
|
- |
|
- |
|
(4,800) |
|
- |
|
- |
|
(4,800) |
Impairment |
- |
|
- |
|
(474) |
|
(14,787) |
|
- |
|
- |
|
- |
|
(15,261) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2017 |
168,494 |
|
1,319,257 |
|
1,094,777 |
|
6,870,389 |
|
75,771 |
|
7,245 |
|
251,192 |
|
9,787,125 |
Historical cost |
207,365 |
|
2,066,850 |
|
1,652,178 |
|
9,693,512 |
|
122,540 |
|
22,026 |
|
251,192 |
|
14,015,662 |
Accumulated depreciation |
(38,870) |
|
(747,593) |
|
(557,400) |
|
(2,823,123) |
|
(46,769) |
|
(14,782) |
|
- |
|
(4,228,537) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average depreciation rate 2017 |
3.86% |
|
3.93% |
|
3.69% |
|
4.53% |
|
13.09% |
|
8.31% |
|
|
|
|
Average depreciation rate 2016 |
3.86% |
|
3.69% |
|
3.30% |
|
4.19% |
|
14.31% |
|
10.01% |
|
|
|
|
88
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
The balance of construction in progress, in the consolidated balances, refers mainly to works in progress of operating and/or under development subsidiaries, especially for the projects of CPFL Renováveis, which has construction in progress of R$ 197,305 at December 31, 2017 (R$ 182,181 at December 31, 2016).
In conformity with CPC 20 (R1) and IAS 23, the interest on borrowings taken by subsidiaries to finance the works is capitalized during the construction phase. In the consolidated balances, in the year of 2017 R$ 29,817 were capitalized at the rate of 8.80% p.a. (R$ 54.733, at the rate of 11.70% p.a., in 2016).
In the consolidated balances, the depreciation amounts are recognized in the statement of profit or loss in line item “Depreciation and amortization” (note 27).
At December 31, 2017, the total amount of property, plant and equipment pledged as collateral for borrowings, as mentioned in note 16, is approximately R$ 3,903,380, mainly relating to the subsidiary CPFL Renováveis (R$ 3,841,016).
13.1 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.
In 2016, a provision of R$ 5,221 was recognized in subsidiary CPFL Telecom for the impairment of cash-generating units, for 2017 the recognition of an additional provision was not necessary. In 2017, due to the changes in the Brazilian political, economic and energy scenario, the subsidiary CPFL Renováveis recognized a loss of R$ 15,261 relating to property, plant and equipment of the Bio Baia Formosa and Solar Tanquinho projects. This loss was recognized in the statement of profit or loss in line item “Other operating expenses” (note 27).
Such provisions for impairment were based on the assessment of the cash-generating units comprising fixed assets of those subsidiaries which, separately, are not featured as an operating segment (note 29). Additionally, during 2017 and 2016 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.
The balances disclosed in the "Business Combinations" line refer to the complementary amounts related to the acquisition of RGE Sul, which final recognition occurred on September 30, 2017, according to note 12.5.
( 14 ) INTANGIBLE ASSETS
|
Consolidated | ||||||||||||
|
Goodwill |
|
Concession right |
|
|
| |||||||
|
|
Acquired in business combinations |
Distribution infrastructure - operational |
Distribution infrastructure - in progress |
Public utilities |
|
Other intangible assets |
|
Total | ||||
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 |
|
18,525,004 |
Accumulated amortization |
(37) |
|
(3,086,356) |
|
(6,099,675) |
|
- |
|
(7,097) |
|
(121,500) |
|
(9,314,665) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
- |
|
- |
|
- |
|
1,213,924 |
|
- |
|
10,507 |
|
1,224,431 |
Amortization |
- |
|
(255,110) |
|
(498,891) |
|
- |
|
(1,419) |
|
(12,438) |
|
(767,858) |
Transfer - intangible assets |
- |
|
- |
|
610,032 |
|
(610,032) |
|
- |
|
- |
|
- |
Transfer - financial asset |
- |
|
- |
|
9,452 |
|
(664,908) |
|
- |
|
- |
|
(655,456) |
Disposal and transfer - other assets |
- |
|
(7,283) |
|
(48,346) |
|
- |
|
- |
|
(7,410) |
|
(63,040) |
Business combination |
- |
|
413,796 |
|
1,229,074 |
|
227,398 |
|
- |
|
- |
|
1,870,268 |
Impairment |
- |
|
(40,433) |
|
- |
|
- |
|
- |
|
(2,637) |
|
(43,070) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2016 |
6,115 |
|
4,466,516 |
|
5,550,502 |
|
666,008 |
|
27,324 |
|
59,147 |
|
10,775,613 |
Historical cost |
6,152 |
|
7,602,941 |
|
11,987,109 |
|
666,008 |
|
35,840 |
|
183,138 |
|
20,481,188 |
Accumulated amortization |
(37) |
|
(3,136,425) |
|
(6,436,607) |
|
- |
|
(8,516) |
|
(123,990) |
|
(9,705,576) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
- |
|
- |
|
- |
|
1,898,434 |
|
- |
|
9,344 |
|
1,907,778 |
Amortization |
- |
|
(286,215) |
|
(639,292) |
|
- |
|
(1,419) |
|
(9,390) |
|
(936,318) |
Transfer - intangible assets |
- |
|
- |
|
814,643 |
|
(814,643) |
|
- |
|
- |
|
- |
Transfer - financial asset |
- |
|
- |
|
131 |
|
(972,385) |
|
- |
|
- |
|
(972,254) |
Disposal and transfer - other assets |
- |
|
(16,244) |
|
(91,214) |
|
48,061 |
|
- |
|
1,723 |
|
(57,674) |
Corporate restructuring (Note 12.6.1) |
- |
|
(26,766) |
|
(73,215) |
|
- |
|
- |
|
- |
|
(99,981) |
Impairment |
- |
|
(5,129) |
|
- |
|
- |
|
- |
|
(47) |
|
(5,176) |
Business combination |
- |
|
(15,057) |
|
(7,108) |
|
- |
|
- |
|
- |
|
(22,165) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2017 |
6,115 |
|
4,117,105 |
|
5,554,447 |
|
825,476 |
|
25,904 |
|
60,777 |
|
10,589,824 |
Historical cost |
6,152 |
|
7,558,645 |
|
11,442,528 |
|
825,476 |
|
35,840 |
|
174,407 |
|
20,043,048 |
Accumulated amortization |
(37) |
|
(3,441,540) |
|
(5,888,080) |
|
- |
|
(9,936) |
|
(113,630) |
|
(9,453,223) |
In the consolidated 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
89
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
infrastructure intangible assets, use of public asset and other intangible assets; and (ii) “amortization of concession intangible asset” for amortization of the intangible asset acquired in business combination (note 27).
In conformity with CPC 20 (R1) and IAS 23, the interest on borrowings taken by subsidiaries is capitalized for qualifying intangible assets. In the consolidated, for the year of 2017, R$ 20,726 were capitalized at a rate of 8.17% p.a. (R$ 13,349 at a rate of 7.74% p.a. in 2016).
The balances disclosed in the "Business Combinations" line refer to the complementary amounts related to the acquisition of RGE Sul, which final recognition occurred on September 30, 2017, according to note 12.5.
14.1 Intangible asset acquired in business combinations
The breakdown of the intangible asset related to the right to operate the concessions acquired in business combinations is as follows:
|
December 31, 2017 |
|
|
|
December 31, 2016 |
Annual amortization rate | |||||
|
Historic cost |
|
Accumulated amortization |
Net value |
|
Net value |
|
2017 |
|
2016 | |
Intangible asset - acquired in business combinations |
|
|
|
|
|
|
|
|
|
|
|
Intangible asset acquired, not merged |
|
|
|
|
|
|
|
|
|
|
|
Parent company |
|
|
|
|
|
|
|
|
|
|
|
CPFL Paulista |
304,861 |
|
(207,003) |
|
97,858 |
|
107,843 |
|
3.28% |
|
3.28% |
CPFL Piratininga |
39,065 |
|
(25,040) |
|
14,025 |
|
15,319 |
|
3.31% |
|
3.31% |
RGE |
3,150 |
|
(1,827) |
|
1,323 |
|
1,457 |
|
4.25% |
|
4.24% |
CPFL Geração |
54,555 |
|
(35,488) |
|
19,067 |
|
20,912 |
|
3.38% |
|
3.38% |
CPFL Jaguari Geração |
7,896 |
|
(3,852) |
|
4,044 |
|
4,314 |
|
3.42% |
|
3.41% |
|
409,527 |
|
(273,210) |
|
136,317 |
|
149,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
CPFL Renováveis |
3,717,093 |
|
(898,762) |
|
2,818,331 |
|
2,995,028 |
|
4.75% |
|
5.39% |
RGE Sul (CPFL Jaguariúna) |
- |
|
- |
|
- |
|
99,524 |
|
- |
|
9.09% |
RGE |
618 |
|
(189) |
|
429 |
|
473 |
|
7.12% |
|
7.06% |
|
3,717,711 |
|
(898,951) |
|
2,818,760 |
|
3,095,025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
4,127,238 |
|
(1,172,161) |
|
2,955,077 |
|
3,244,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset acquired and merged – Deductible |
|
|
|
|
|
|
|
|
|
|
|
Subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
RGE |
1,120,266 |
|
(885,969) |
|
234,297 |
|
257,924 |
|
2.11% |
|
2.11% |
RGE Sul |
312,741 |
|
(33,188) |
|
279,553 |
|
307,982 |
|
9.09% |
|
9.09% |
CPFL Geração |
426,450 |
|
(323,463) |
|
102,987 |
|
112,953 |
|
2.34% |
|
2.34% |
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
1,859,457 |
|
(1,242,620) |
|
616,837 |
|
678,859 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible asset acquired and merged – Reassessed |
|
|
|
|
|
|
|
|
|
|
|
Parent company |
|
|
|
|
|
|
|
|
|
|
|
CPFL Paulista |
1,074,026 |
|
(754,666) |
|
319,360 |
|
351,565 |
|
3.00% |
|
3.00% |
CPFL Piratininga |
115,762 |
|
(74,202) |
|
41,560 |
|
45,395 |
|
3.31% |
|
3.31% |
RGE |
310,128 |
|
(184,343) |
|
125,785 |
|
138,469 |
|
4.09% |
|
4.09% |
CPFL Jaguari Geração |
15,275 |
|
(8,377) |
|
6,898 |
|
7,358 |
|
3.01% |
|
3.01% |
Subtotal |
1,515,191 |
|
(1,021,588) |
|
493,603 |
|
542,787 |
|
|
|
|
Subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
RGE Sul |
56,759 |
|
(5,171) |
|
51,588 |
|
- |
|
9.09% |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
7,558,645 |
|
(3,441,540) |
|
4,117,105 |
|
4,466,516 |
|
|
|
|
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 dividend 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
90
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
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 nondeductible intangible asset was recognized for tax purposes.
Effective January 1, 2016, in compliance with the amendments to IAS 16/CPC 27 and IAS 38/CPC 04 (R1), the Group started to adopt prospectively, for all cases, the straight-line method of amortization over the remaining concession period.
14.2 Impairment 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.
In 2016, a provision of R$ 2,637 was recognized in subsidiary CPFL Telecom for the impairment of cash-generating units, in the statement of profit or loss in line item “Other operating expenses” (note 27). In 2017, the subsidiary CPFL Renováveis recognized a loss of R$ 5,176 (R$ 40,433 in 2016), relating to intangible assets acquired in the business combination of the Pedra Cheirosa I and Bio Formosa projects.
Such provisions for impairment were based on the assessment of these cash-generating units formed by the intangible assets of those subsidiaries, which, separately, do not feature an operating segment (note 29). Additionally, during 2017 and 2016 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.
( 15 ) TRADE PAYABLES
|
Consolidated | |||
|
|
December 31, 2017 |
December 31, 2016 | |
Current |
|
|
|
|
System service charges |
|
413 |
|
59,935 |
Energy purchased |
|
2,248,748 |
|
1,868,950 |
Electricity network usage charges |
|
252,170 |
|
121,884 |
Materials and services |
|
650,538 |
|
545,468 |
Free energy |
|
145,002 |
|
131,893 |
Total |
|
3,296,870 |
|
2,728,130 |
|
|
|
|
|
Noncurrent |
|
|
|
|
Energy purchased |
|
128,438 |
|
129,148 |
Materials and services |
|
- |
|
633 |
Total |
|
128,438 |
|
129,781 |
The amounts of electricity supply recorded in noncurrent refer to the sale made by the subsidiary RGE Sul in the period from September 1, 2000 to December 31, 2002, relating to the electricity purchase and sale transactions made on the Electric Energy Commercialization Chamber (CCEE) and adjusted, in 2002 and 2003, based on information and calculations prepared and disclosed by CCEE, the payment of which is suspended due to the judicial injunction obtained by the indirect subsidiary until the judgment of the lawsuit (notes 6 and 22).
91
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 16 ) BORROWINGS
|
|
Consolidated | ||||||||||||||||||||||||||
|
|
December 31, 2016 |
|
|
|
|
|
Interest, inflation adjustment and MTM |
|
|
|
December 31, 2017 |
|
| ||||||||||||||
|
|
Current |
|
Noncurrent |
|
Total |
|
|
|
|
|
|
|
|
|
|
Current |
|
Noncurrent |
|
Total | |||||||
|
|
Interest |
|
Principal |
|
Interest |
|
Principal |
|
|
Raised |
|
Repayment |
|
|
Exchange rates |
|
Interest paid |
|
Interest |
|
Principal |
|
Principal |
| |||
Measured at cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Local currency |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment |
|
17,827 |
|
842,015 |
|
- |
|
4,606,227 |
|
5,466,069 |
|
169,650 |
|
(1,151,289) |
|
440,526 |
|
- |
|
(379,542) |
|
15,564 |
|
647,250 |
|
3,882,601 |
|
4,545,415 |
Rental assets |
|
38 |
|
1,034 |
|
- |
|
3,955 |
|
5,028 |
|
- |
|
(1,038) |
|
377 |
|
- |
|
(373) |
|
13 |
|
1,180 |
|
2,800 |
|
3,993 |
Financial Institutions |
|
89,387 |
|
255,355 |
|
144,709 |
|
1,517,251 |
|
2,006,702 |
|
185,752 |
|
(515,824) |
|
207,812 |
|
- |
|
(343,163) |
|
79,015 |
|
472,928 |
|
989,335 |
|
1,541,278 |
Others |
|
50 |
|
59,756 |
|
- |
|
42,370 |
|
102,176 |
|
27,209 |
|
(58,490) |
|
5,638 |
|
- |
|
(1,793) |
|
32 |
|
46,125 |
|
28,584 |
|
74,741 |
Total at cost |
|
107,303 |
|
1,158,159 |
|
144,709 |
|
6,169,803 |
|
7,579,974 |
|
382,611 |
|
(1,726,640) |
|
654,353 |
|
- |
|
(724,871) |
|
94,624 |
|
1,167,484 |
|
4,903,320 |
|
6,165,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Measured at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Institutions |
|
22,062 |
|
595,101 |
|
- |
|
4,922,463 |
|
5,539,626 |
|
569,260 |
|
(1,315,172) |
|
138,568 |
|
124,311 |
|
(139,596) |
|
21,034 |
|
2,322,261 |
|
2,573,703 |
|
4,916,997 |
Mark to market |
|
- |
|
(1,764) |
|
- |
|
(35,651) |
|
(37,415) |
|
- |
|
- |
|
(21,137) |
|
- |
|
- |
|
- |
|
(11,375) |
|
(47,177) |
|
(58,552) |
Total at fair value |
|
22,062 |
|
593,337 |
|
- |
|
4,886,812 |
|
5,502,211 |
|
569,260 |
|
(1,315,172) |
|
117,431 |
|
124,311 |
|
(139,596) |
|
21,034 |
|
2,310,885 |
|
2,526,526 |
|
4,858,445 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowing costs * |
|
- |
|
(5,213) |
|
- |
|
(32,930) |
|
(38,143) |
|
(6,415) |
|
- |
|
12,742 |
|
- |
|
- |
|
- |
|
(4,420) |
|
(27,396) |
|
(31,816) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
129,364 |
|
1,746,284 |
|
144,709 |
|
11,023,685 |
|
13,044,041 |
|
945,456 |
|
(3,041,812) |
|
784,526 |
|
124,311 |
|
(864,467) |
|
115,658 |
|
3,473,949 |
|
7,402,450 |
|
10,992,057 |
92
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
|
Consolidated |
|
|
|
|
|
| ||
|
|
December 31, 2017 |
December 31, 2016 |
Annual interest |
|
Amortization |
|
Collateral | ||
Measured at amortized cost |
|
|
|
|
|
|
|
|
|
|
Local currency |
|
|
|
|
|
|
|
|
|
|
Investment |
|
|
|
|
|
|
|
|
|
|
CPFL Paulista |
|
|
|
|
|
|
|
|
|
|
FINEM V |
|
2,883 |
|
37,078 |
|
TJLP + 2.12% to 3.3% (c) |
|
72 monthly installments from February 2012 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM V |
|
1,892 |
|
3,638 |
|
Fixed rate 8% (c) |
|
90 monthly installments from August 2011 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM V |
|
23,283 |
|
30,835 |
|
Fixed rate 5.5% (b) |
|
96 monthly installments from February 2013 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VI |
|
101,068 |
|
149,984 |
|
TJLP + 2.06% to 3.08% (e) (f) |
|
72 monthly installments from January 2014 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VI |
|
7,401 |
|
8,907 |
|
Fixed rate 2.5% (a) |
|
114 monthly installments from June 2013 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VI |
|
135,787 |
|
163,404 |
|
Fixed rate 2.5% (a) |
|
96 monthly installments from December 2014 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VII |
|
29,612 |
|
57,798 |
|
Fixed rate 6% (b) |
|
96 monthly installments from April 2016 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VII |
|
32,687 |
|
73,435 |
|
SELIC + 2.62% to 2.66% (h) |
|
72 monthly installments from April 2016 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VII |
|
54,259 |
|
132,622 |
|
TJLP + 2.12% to 2.66% (c) (d) |
|
72 monthly installments from April 2016 |
|
SGBP and CPFL Energia guarantee and receivables |
FINAME |
|
16,904 |
|
25,356 |
|
Fixed rate 4.5% |
|
96 monthly installments from January 2012 |
|
CPFL Energia guarantee |
CPFL Piratininga |
|
|
|
|
|
|
|
|
|
|
FINEM IV |
|
1,553 |
|
19,970 |
|
TJLP + 2.12% to 3.3% (c) |
|
72 monthly installments from February 2012 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM IV |
|
610 |
|
1,173 |
|
Fixed rate 8% (c) |
|
90 monthly installments from August 2011 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM IV |
|
12,108 |
|
16,035 |
|
Fixed rate 5.5% (b) |
|
96 monthly installments from February 2013 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM V |
|
29,540 |
|
43,836 |
|
TJLP + 2.06% to 3.08% (e) (f) |
|
72 monthly installments from January 2014 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM V |
|
1,944 |
|
2,339 |
|
Fixed rate 2.5% (a) |
|
114 monthly installments from June 2013 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM V |
|
33,791 |
|
40,664 |
|
Fixed rate 2.5% (a) |
|
96 monthly installments from December 2014 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VI |
|
37,052 |
|
41,620 |
|
SELIC + 2.62% to 2.66% (h) |
|
72 monthly installments from April 2016 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VI |
|
53,823 |
|
65,778 |
|
TJLP + 2.12% to 2.66% (c) (d) |
|
72 monthly installments from April 2016 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VI |
|
24,308 |
|
28,198 |
|
Fixed rate 6% (b) |
|
96 monthly installments from April 2016 |
|
SGBP and CPFL Energia guarantee and receivables |
FINAME |
|
8,016 |
|
12,023 |
|
Fixed rate 4.5% |
|
96 monthly installments from January 2012 |
|
CPFL Energia guarantee |
RGE Sul |
|
|
|
|
|
|
|
|
|
|
Finep |
|
4,481 |
|
7,757 |
|
TJLP |
|
73 monthly installments from May 2016 |
|
Bank guarantee |
Finep |
|
5,487 |
|
7,562 |
|
Fixed rate 5% |
|
81 monthly installments from September 2013 |
|
Bank guarantee |
RGE |
|
|
|
|
|
|
|
|
|
|
FINEM V |
|
1,745 |
|
22,444 |
|
TJLP + 2.12% to 3.3% (c) |
|
72 monthly installments from February 2012 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM V |
|
8,932 |
|
11,828 |
|
Fixed rate 5.5% (b) |
|
96 monthly installments from February 2013 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VI |
|
53,994 |
|
80,126 |
|
TJLP + 2.06% to 3.08% (e) (f) |
|
72 monthly installments from January 2014 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VI |
|
783 |
|
942 |
|
Fixed rate 2.5% (a) |
|
114 monthly installments from June 2013 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VI |
|
49,930 |
|
60,085 |
|
Fixed rate 2.5% (a) |
|
96 monthly installments from December 2014 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VII |
|
34,001 |
|
39,442 |
|
Fixed rate 6% (b) |
|
96 monthly installments from April 2016 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VII |
|
58,097 |
|
65,261 |
|
SELIC + 2.62% to 2.66% (h) |
|
72 monthly installments from April 2016 |
|
SGBP and CPFL Energia guarantee and receivables |
FINEM VII |
|
66,601 |
|
81,394 |
|
TJLP + 2.12% to 2.66% (d) |
|
72 monthly installments from April 2016 |
|
SGBP and CPFL Energia guarantee and receivables |
FINAME |
|
4,022 |
|
6,033 |
|
Fixed rate 4.5% |
|
96 monthly installments from January 2012 |
|
CPFL Energia guarantee |
FINAME |
|
109 |
|
168 |
|
Fixed rate 10.0% |
|
90 monthly installments from May 2012 |
|
Liens on assets |
FINAME |
|
443 |
|
579 |
|
Fixed rate 10.0% |
|
66 monthly installments from October 2015 |
|
Liens on assets |
Companhia Luz e Força Santa Cruz |
|
|
|
|
|
|
|
|
|
|
FINEM |
|
- |
|
9,094 |
|
Fixed rate 6% |
|
111 monthly installments from April 2015 |
|
CPFL Energia guarantee |
FINEM |
|
- |
|
3,381 |
|
SELIC + 2.19% |
|
72 monthly installments from April 2015 |
|
CPFL Energia guarantee |
FINEM |
|
- |
|
6,062 |
|
TJLP + 2.19% |
|
72 monthly installments from April 2015 |
|
CPFL Energia guarantee |
CPFL Leste Paulista |
|
|
|
|
|
|
|
|
|
|
FINEM |
|
- |
|
3,397 |
|
Fixed rate 6% |
|
111 monthly installments from April 2015 |
|
CPFL Energia guarantee |
FINEM |
|
- |
|
1,239 |
|
SELIC + 2.19% |
|
72 monthly installments from April 2015 |
|
CPFL Energia guarantee |
FINEM |
|
- |
|
2,224 |
|
TJLP + 2.19% |
|
72 monthly installments from April 2015 |
|
CPFL Energia guarantee |
CPFL Sul Paulista |
|
|
|
|
|
|
|
|
|
|
FINEM |
|
- |
|
2,412 |
|
Fixed rate 6% |
|
111 monthly installments from April 2015 |
|
CPFL Energia guarantee |
FINEM |
|
- |
|
1,731 |
|
SELIC + 2.19% |
|
72 monthly installments from April 2015 |
|
CPFL Energia guarantee |
FINEM |
|
- |
|
3,122 |
|
TJLP + 2.19% |
|
72 monthly installments from April 2015 |
|
CPFL Energia guarantee |
Companhia Jaguari de Energia (CPFL Santa Cruz) |
|
|
|
|
|
|
|
|
|
|
CCB - Santander |
|
3,514 |
|
- |
|
TJLP + 2,99% (f) |
|
96 monthly installments from October 2015 |
|
CPFL Energia guarantee |
CCB - Santander |
|
1,215 |
|
- |
|
UMBNDES + 1,99% |
|
96 monthly installments from October 2015 |
|
CPFL Energia guarantee |
CCB - Santander |
|
2,759 |
|
1,464 |
|
TJLP + 3.1% |
|
96 monthly installments from June 2014 |
|
CPFL Energia guarantee |
CCB - Santander |
|
1,077 |
|
572 |
|
UMBNDES + 2.1% |
|
96 monthly installments from June 2014 |
|
CPFL Energia guarantee |
FINEM |
|
15,016 |
|
2,422 |
|
Fixed rate 6% |
|
111 monthly installments from April 2015 |
|
CPFL Energia guarantee |
FINEM |
|
6,424 |
|
1,287 |
|
SELIC + 2.19% |
|
72 monthly installments from April 2015 |
|
CPFL Energia guarantee |
FINAME |
|
12 |
|
- |
|
SELIC + 3,63% |
|
36 monthly installments from December 2018 |
|
CPFL Energia guarantee |
FINEM |
|
10,612 |
|
2,321 |
|
TJLP + 2.19% |
|
72 monthly installments from April 2015 |
|
CPFL Energia guarantee |
FINAME |
|
6,204 |
|
- |
|
TJLP + 3.29% |
|
36 monthly installments from February 2018 |
|
CPFL Energia guarantee |
FINAME |
|
206 |
|
- |
|
TJLP + 3.39% |
|
120 monthly installments from July 2019 |
|
CPFL Energia guarantee |
CPFL Mococa |
|
|
|
|
|
|
|
|
|
|
CCB - Santander |
|
- |
|
1,883 |
|
TJLP + 3.1% |
|
96 monthly installments from June 2014 |
|
CPFL Energia guarantee |
CCB - Santander |
|
- |
|
736 |
|
UMBNDES + 2.1% |
|
96 monthly installments from June 2014 |
|
CPFL Energia guarantee |
CCB - Santander |
|
- |
|
1,413 |
|
UMBNDES +1.99% |
|
96 monthly installments from October 2015 |
|
CPFL Energia guarantee |
CCB - Santander |
|
- |
|
4,081 |
|
TJLP + 2.99% (f) |
|
96 monthly installments from October 2015 |
|
CPFL Energia guarantee |
CPFL Serviços |
|
|
|
|
|
|
|
|
|
|
FINAME |
|
1,086 |
|
1,297 |
|
Fixed rate 2.5% to 5.5% |
|
96 monthly installments from August 2014 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
253 |
|
313 |
|
Fixed rate 6% |
|
72 monthly installments from April 2016 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
472 |
|
668 |
|
Fixed rate 7.7% to 10% |
|
90 monthly installments from December 2012 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
9,534 |
|
11,292 |
|
Fixed rate 2.5% to 5.5% |
|
114 monthly installments from February 2013 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
33 |
|
47 |
|
TJLP + 4.2% |
|
90 monthly installments from November 2012 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
1,839 |
|
2,249 |
|
Fixed rate 6% |
|
90 monthly installments from October 2014 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
88 |
|
101 |
|
Fixed rate 6% |
|
96 monthly installments from July 2016 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
5,039 |
|
5,768 |
|
Fixed rate 6% |
|
114 monthly installments from June 2015 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
514 |
|
762 |
|
TJLP + 2.2% to 3.2% (c) |
|
56 monthly installments from July 2015 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
3,060 |
|
3,870 |
|
Fixed rate 9.5% to 10% (c) |
|
66 monthly installments from October 2015 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
1,276 |
|
1,589 |
|
Fixed rate 6% to 10% (e) |
|
66 monthly installments from August 2016 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
5,216 |
|
5,832 |
|
TJLP + 3.50% (e) |
|
48 monthly installments from June 2017 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
1,201 |
|
2,511 |
|
SELIC + 3.90% |
|
48 monthly installments from June 2017 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
1,251 |
|
- |
|
SELIC + 3.86% |
|
48 monthly installments from August 2017 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
1,262 |
|
1,147 |
|
SELIC + 3.4% |
|
36 monthly installments from August 2017 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
588 |
|
495 |
|
TJLP + 3.74% |
|
36 monthly installments from August 2017 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
2,613 |
|
- |
|
SELIC + 3.58% to 3.72% |
|
36 monthly installments from January 2019 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
8,905 |
|
- |
|
TJLP + 3.25% to 3.38% |
|
36 monthly installments from January 2019 |
|
CPFL Energia guarantee and liens on equipment |
CPFL Telecom |
|
|
|
|
|
|
|
|
|
|
FINAME |
|
- |
|
7,448 |
|
Fixed rate 6.0% (b) |
|
60 monthly installments from December 2016 |
|
CPFL Energia guarantee |
FINEM |
|
- |
|
7,849 |
|
SELIC + 3.12% (h) |
|
60 monthly installments from December 2016 |
|
CPFL Energia guarantee |
FINEM |
|
- |
|
21,342 |
|
TJLP + 2.12% to 3.12% (c) |
|
60 monthly installments from December 2016 |
|
CPFL Energia guarantee |
FINEM |
|
- |
|
470 |
|
TJLP (l) |
|
60 monthly installments from December 2016 |
|
CPFL Energia guarantee |
CPFL Transmissão |
|
|
|
|
|
|
|
|
|
|
FINAME |
|
14,275 |
|
16,871 |
|
Fixed rate 3.0% |
|
96 monthly installments from July 2015 |
|
CPFL Energia guarantee |
CERAN |
|
|
|
|
|
|
|
|
|
|
BNDES |
|
- |
|
266,484 |
|
TJLP + 3.69 to 5% |
|
208 monthly installments from December 2005 |
|
Pledge of shares, credit and concession rights and revenues |
BNDES |
|
- |
|
48,409 |
|
UMBNDES + 5% (1) |
|
208 monthly installments from February 2006 |
|
Pledge of shares, credit and concession rights and revenues |
93
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
CPFL Renováveis |
|
|
|
|
|
|
|
|
|
|
FINEM I |
|
232,310 |
|
262,224 |
|
TJLP + 1.95% |
|
168 monthly installments from October 2009 and July 2011 |
|
(i) Liens of equipment; (ii) Pledge of receivables; (iii) Pledge of shares of SPE and PCH Holding; (iv) Pledge of rights authorized by ANEEL |
FINEM II |
|
18,951 |
|
22,210 |
|
TJLP + 1.90%. |
|
144 monthly installments from June 2011 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Guarantee of CPFL Energia S.A. and Bioenergia S.A. |
FINEM III |
|
460,623 |
|
495,912 |
|
TJLP + 1.72% |
|
192 monthly installments from May 2013 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE; (iv) Guarantee of CPFL Energia and State Grid. |
FINEM V |
|
69,485 |
|
80,362 |
|
TJLP + 2.8% and 3.4% |
|
143 monthly installments from December 2011 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE; (iv) Pledge of rights authorized by ANEEL; (v) Guarantee of CPFL-R. |
FINEM VI |
|
69,619 |
|
74,737 |
|
TJLP + 2.05% |
|
173 to 192 monthly installments from October 2013 and April 2015 |
|
(i) Liens of receivables; (ii) Pledge of shares of SPE; (iii) Pledge of rights authorized by ANEEL; (iv) Guarantee of CPFL Renováveis, CPFL Energia and State Grid. |
FINEM VII |
|
119,234 |
|
138,474 |
|
TJLP + 1.92 % |
|
156 monthly installments from October 2010 to September 2023 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE; (iv) Pledge of rights authorized by ANEEL; (v) Pledge of receivables of operation contracts. |
FINEM IX |
|
17,827 |
|
25,195 |
|
TJLP + 2.15% |
|
120 monthly installments from May 2010 |
|
(i) Mortgage of rural property; (ii) Liens of equipment; (iii) Liens of receivables; (iv) Pledge of shares of SPE; (v) Pledge of rights authorized by ANEEL; (vi) Guarantee of CPFL-R, CPFL Energia and State Grid. |
FINEM X |
|
- |
|
230 |
|
TJLP |
|
84 monthly installments from October 2010 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE; (iv) Pledge of rights authorized by ANEEL; (v) Pledge of receivables of operation contracts. |
FINEM XI |
|
95,016 |
|
105,670 |
|
TJLP + 1.87% to 1.9% |
|
108 to 168 monthly installments from January 2012 and January 2013 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Guarantee of CPFL Energia. |
FINEM XII |
|
297,835 |
|
317,289 |
|
TJLP + 2.18% |
|
192 monthly installments from July 2014 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of receivables of operation contracts; (iv) Pledge of shares of SPE and Eolica Holding; (v) Pledge of rights authorized by ANEEL; (vi) Guarantee of CPFL Renováveis, Eólica Holding S.A, CPFL Energia and State Grid. |
FINEM XIII |
|
298,439 |
|
318,257 |
|
TJLP + 2.02% to 2.18% |
|
192 monthly installments from November 2014 |
|
(i) Pledge of equipment; (ii) Liens of receivables; (iii) Pledge of receivables of operation contracts; (iv) Pledge of shares of SPE; (v) Pledge of rights authorized by ANEEL; (vi) Guarantee of CPFL Renováveis, CPFL Energia and State Grid. |
FINEM XV |
|
23,185 |
|
27,305 |
|
TJLP + 3.44% |
|
139 monthly installments from September 2011 |
|
(i) Pledge of shares of SPE; (ii) Pledge of rights authorized by ANEEL; (iii) Liens of receivables; (iv) Guarantee of CPFL Renováveis, CPFL Energia and State Grid. |
FINEM XVI |
|
4,335 |
|
6,418 |
|
Fixed rate 5.50% |
|
101 monthly installments from September 2011 |
|
(i) Pledge of shares of SPE; (ii) Pledge of rights authorized by ANEEL; (iii) Liens of receivables; (iv) Guarantee of CPFL Renováveis, CPFL Energia and State Grid. |
FINEM XVII |
|
428,205 |
|
460,426 |
|
TJLP + 2.18% |
|
192 monthly installments from January 2013 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of receivables of operation contracts; (iv) Pledge of shares of SPE and DESA Eolicas SA; (v) Pledge of rights authorized by ANEEL; (vi) Guarantee letter. |
FINEM XVIII |
|
9,044 |
|
13,763 |
|
Fixed rate 4.5% |
|
102 monthly installments from June 2011 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Guarantee of CPFL Energia S.A. and Bioenergia S.A. |
FINEM XIX |
|
27,579 |
|
29,559 |
|
TJLP + 2.02% |
|
192 monthly installments from January 2014 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE; (iv) Pledge of rights authorized by ANEEL; (v) Guarantee of CPFL Renováveis, CPFL Energia and State Grid. |
FINEM XX |
|
37,208 |
|
44,650 |
|
Fixed rate 2.5% |
|
108 monthly installments from January 2014 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE; (iv) Pledge of rights authorized by ANEEL; (v) Guarantee of CPFL Renováveis, CPFL Energia and State Grid. |
FINEM XXI |
|
37,583 |
|
40,281 |
|
TJLP + 2.02% |
|
192 monthly installments from January 2014 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE; (iv) Pledge of rights authorized by ANEEL; (v) Guarantee of CPFL Renováveis, CPFL Energia and State Grid. |
FINEM XXII |
|
32,734 |
|
39,281 |
|
Fixed rate 2.5% |
|
108 monthly installments from January 2014 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE; (iv) Pledge of rights authorized by ANEEL; (v) Guarantee of CPFL Renováveis, CPFL Energia and State Grid. |
FINEM XXIII |
|
1,153 |
|
1,729 |
|
Fixed rate 4.5% |
|
102 monthly installments from June 2011 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE; (iv) Pledge of rights authorized by ANEEL; (v) Pledge of receivables of operation contracts. |
FINEM XXIV |
|
82,632 |
|
109,580 |
|
Fixed rate 5.5% |
|
102 to 108 monthly installments from January 2012 to August 2020 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Guarantee of CPFL Energia and State Grid. |
FINEM XXV |
|
83,136 |
|
87,492 |
|
TJLP + 2.18% |
|
192 monthly installments from July 2016 to June 2032 |
|
(i) Pledge of equipment; (ii) Liens of receivables; (iii) Pledge of receivables of operation contracts; (iv) Pledge of shares of SPE; (v) Pledge of rights authorized by ANEEL; (vi) Guarantee of CPFL Renováveis, CPFL Energia and State Grid. |
FINEM XXVI |
|
681,912 |
|
525,011 |
|
TJLP + 2.75% |
|
192 monthly installments from July 2017 to June 2033 |
|
(i) Pledge of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE and T-16; (iv) Pledge of rights authorized by ANEEL; (v) Guarantee of CPFL Renováveis, CPFL Energia and State Grid. |
94
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
FINEM XXVII |
|
67,584 |
|
70,532 |
|
TJLP + 2,02% |
|
162 monthly installments from November 2016 to April 2030 |
|
(i) Pledge of shares of SPE; (ii) Liens of receivables; (iii) Fiduciary Assignment of emerging rights authorized by ANEEL; (iv) Guarantee of CPFL Renováveis, CPFL Energia and State Grid. |
FINEM XXVIII |
|
1,415 |
|
- |
|
TJLP |
|
144 monthly installments from January 2018 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE; (iv) Pledge of rights authorized by ANEEL; (v) Guarantee of CPFL Renováveis, CPFL Energia and State Grid. |
FINAME I |
|
2,387 |
|
2,857 |
|
Fixed rate 2.5% |
|
96 monthly installments from February 2015 |
|
(i) Liens of equipment; (ii) Guarantee of CPFL Renováveis. |
FINEP I |
|
904 |
|
1,397 |
|
Fixed rate 3.5% |
|
61 monthly installments from October 2014 |
|
Guarantee letter. |
FINEP II |
|
9,516 |
|
10,445 |
|
TJLP - 1.0% |
|
85 monthly installments from June 2017 |
|
Guarantee letter. |
FINEP III |
|
4,091 |
|
5,232 |
|
Fixed rate 8% |
|
73 monthly installments from July 2015 |
|
Guarantee letter. |
BNB I |
|
92,926 |
|
100,323 |
|
Fixed rate 9.5% to 10% and compliance bonus of 15% |
168 monthly installments from January 2009 to 2028 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE; (iv) Pledge of rights authorized by ANEEL; (v) Guarantee of SIIF Energies do Brasil. | |
BNB II |
|
151,428 |
|
158,364 |
|
Fixed rate 10% and compliance bonus of 15% to 25% |
222 monthly installments from May 2010 to October 2029 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE; (iv) Pledge of rights authorized by ANEEL; (v) Pledge of receivables of operation contracts; (vi) Guarantee of BVP S.A.; (vii) Guarantee letter. | |
BNB III |
|
27,138 |
|
29,020 |
|
Fixed rate 9.5% and compliance bonus of 25% |
|
228 monthly installments from July 2009 to July 2028 |
|
(i) Liens of equipment; (ii) Pledge of shares of SPE; (iii) Pledge of rights authorized by ANEEL; (iv) Liens of receivables; (v) Guarantee of CPFL Renováveis. |
NIB |
|
57,291 |
|
67,872 |
|
IGPM + 8.63% |
|
50 quarterly installments from June 2011 |
|
(i) Liens of equipment; (ii) Liens of receivables; (iii) Pledge of shares of SPE; (iv) Pledge of rights authorized by ANEEL; (v) Pledge of receivables of operation contracts. |
|
|
|
|
|
|
|
|
|
|
|
Rental assets |
|
|
|
|
|
|
|
|
|
|
CPFL Eficiência |
|
|
|
|
|
|
|
|
|
|
FINAME |
|
2,281 |
|
2,923 |
|
Fixed rate 4.5% to 8.7% |
|
96 monthly installments from March 2012 |
|
CPFL Energia guarantee |
FINAME |
|
81 |
|
99 |
|
Fixed rate 6% |
|
72 monthly installments from October 2016 |
|
CPFL Energia guarantee |
FINAME |
|
171 |
|
234 |
|
TJLP + 2.70% |
|
48 monthly installments from August 2016 |
|
CPFL Energia guarantee |
FINAME |
|
174 |
|
219 |
|
SELIC + 2.70% |
|
48 monthly installments from August 2016 |
|
CPFL Energia guarantee |
FINAME |
|
100 |
|
121 |
|
Fixed rate 9.5% |
|
36 monthly installments from September 2017 |
|
CPFL Energia guarantee |
FINAME |
|
515 |
|
678 |
|
Fixed rate 9.5% (e) |
|
48 monthly installments from February 2017 |
|
CPFL Energia guarantee and liens on equipment |
FINAME |
|
672 |
|
753 |
|
TJLP + 3.50% (e) |
|
48 monthly installments from August 2017 |
|
CPFL Energia guarantee and liens on equipment |
Financial institutions |
|
|
|
|
|
|
|
|
|
|
CPFL Paulista |
|
|
|
|
|
|
|
|
|
|
Banco do Brasil - Working capital |
|
- |
|
380,403 |
|
104.90% of CDI (f) |
|
2 annual installments from July 2017 |
|
CPFL Energia guarantee |
CPFL Piratininga |
|
|
|
|
|
|
|
|
|
|
Banco do Brasil - Working capital |
|
- |
|
66,951 |
|
104.90% of CDI (f) |
|
2 annual installments from July 2017 |
|
CPFL Energia guarantee |
CPFL Santa Cruz |
|
|
|
|
|
|
|
|
|
|
Banco do Brasil - Working capital |
|
- |
|
50,213 |
|
104.90% of CDI (f) |
|
2 annual installments from July 2017 |
|
CPFL Energia guarantee |
Banco IBM - Working capital |
|
- |
|
6,925 |
|
CDI + 0.27% (f) |
|
12 semiannual installments from June 2015 |
|
CPFL Energia guarantee |
CPFL Leste Paulista |
|
|
|
|
|
|
|
|
|
|
Banco IBM - Working capital |
|
- |
|
5,405 |
|
100.0% of CDI |
|
14 semiannual installments from December 2012 |
|
CPFL Energia guarantee |
Banco IBM - Working capital |
|
- |
|
20,955 |
|
CDI + 0.1% |
|
12 semiannual installments from October 2014 |
|
CPFL Energia guarantee |
Banco IBM - Working capital |
|
- |
|
15,658 |
|
CDI + 0.27% |
|
12 semiannual installments from March 2015 |
|
CPFL Energia guarantee |
Banco IBM - Working capital |
|
- |
|
6,993 |
|
CDI + 1.33% (f) |
|
8 semiannual installments from January 2016 |
|
CPFL Energia guarantee |
CPFL Sul Paulista |
|
|
|
|
|
|
|
|
|
|
Banco do Brasil - Working capital |
|
- |
|
31,954 |
|
104.90% of CDI (f) |
|
2 annual installments from July 2017 |
|
CPFL Energia guarantee |
Banco IBM - Working capital |
|
- |
|
7,888 |
|
CDI + 0.27% to 1.33 (f) |
|
12 semiannual installments from June 2015 |
|
CPFL Energia guarantee |
Banco IBM - Working capital |
|
- |
|
6,784 |
|
CDI + 1.27% (g) |
|
8 semiannual installments from February 2017 |
|
CPFL Energia guarantee |
Companhia Jaguari de Energia (CPFL Santa Cruz) |
|
|
|
|
|
|
|
|
|
|
Banco do Brasil - Working capital |
|
95,682 |
|
4,413 |
|
104,90% of CDI (f) |
|
2 annual installments from July 2017 |
|
CPFL Energia guarantee |
Banco IBM - Capital de giro |
|
35,895 |
|
- |
|
CDI + 0,27% (f) |
|
12 semiannual installments from June 2015 |
|
CPFL Energia guarantee |
Banco IBM - Capital de giro |
|
5,180 |
|
- |
|
CDI + 1,33%(f) |
|
8 semiannual installments from January 2016 |
|
CPFL Energia guarantee |
Banco IBM - Working capital |
|
5,652 |
|
- |
|
CDI + 1,27% |
|
8 semiannual installments from February 2017 |
|
CPFL Energia guarantee |
Banco IBM - Working capital |
|
13,111 |
|
10,726 |
|
100,00% of CDI |
|
14 semiannual installments from December 2012 |
|
CPFL Energia guarantee |
Banco IBM - Working capital |
|
25,443 |
|
11,297 |
|
CDI + 0,1% |
|
12 semiannual installments from October 2014 |
|
CPFL Energia guarantee |
CPFL Mococa |
|
|
|
|
|
|
|
|
|
|
Banco do Brasil - Working capital |
|
- |
|
28,911 |
|
104.90% of CDI (f) |
|
2 annual installments from July 2017 |
|
CPFL Energia guarantee |
Banco IBM - Working capital |
|
- |
|
3,481 |
|
100.0% of CDI |
|
14 semiannual installments from December 2012 |
|
CPFL Energia guarantee |
Banco IBM - Working capital |
|
- |
|
13,296 |
|
CDI + 0.27% |
|
12 semiannual installments from March 2015 |
|
CPFL Energia guarantee |
CPFL Serviços |
|
|
|
|
|
|
|
|
|
|
Banco IBM - Working capital |
|
1,279 |
|
3,473 |
|
CDI + 0.10% |
|
11 semiannual installments from June 2013 |
|
CPFL Energia guarantee |
Promissory note |
|
46,941 |
|
- |
|
104% of CDI |
|
1 installment in June 2018 |
|
CPFL Energia guarantee |
CPFL Geração |
|
|
|
|
|
|
|
|
|
|
Banco do Brasil - Working capital |
|
630,309 |
|
641,316 |
|
109.5% of CDI |
|
1 installment in March 2019 |
|
CPFL Energia guarantee |
CPFL Telecom |
|
|
|
|
|
|
|
|
|
|
Banco IBM - Working capital |
|
- |
|
31,449 |
|
CDI + 0.18% |
|
12 semiannual installments from August 2014 |
|
CPFL Energia guarantee |
CPFL Transmissão Morro Agudo |
|
|
|
|
|
|
|
|
|
|
Santander |
|
- |
|
5,031 |
|
CDI + 1.60% (k) |
|
1 installment in March 2017 |
|
CPFL Energia guarantee |
CPFL Renováveis |
|
|
|
|
|
|
|
|
|
|
Bradesco |
|
204,934 |
|
250,363 |
|
CDI + 0.5% |
|
8 annual installments from June 2013 |
|
No collateral |
Safra |
|
194,006 |
|
208,547 |
|
105% of CDI |
|
14 semiannual installments from August 2016 |
|
No collateral |
CCB - BBM |
|
44,095 |
|
44,171 |
|
CDI+3.40% |
|
1 installment in March 2018 |
|
No collateral |
CCB - BBM |
|
26,198 |
|
- |
|
CDI + 1.90% |
|
Charges quarterly with one repayment in maturity |
|
CPFL Renováveis guarantee |
CCB - ABC |
|
- |
|
44,217 |
|
CDI+3.80% |
|
1 installment in December 2017 |
|
No collateral |
CCB - Deustche Bank |
|
46,966 |
|
- |
|
CDI + 1,45% |
|
Charges quarterly with one repayment in maturity |
|
CPFL Renováveis promissory note |
Promissory note - ABC |
|
102,006 |
|
105,883 |
|
CDI+3.80% |
|
4 semiannual installments from February 2017 |
|
No collateral |
Promissory note - BBM |
|
63,582 |
|
- |
|
CDI+1.39% |
|
1 installment in June 2018 |
|
CPFL Renováveis guarantee |
|
|
|
|
|
|
|
|
|
|
|
Others |
|
|
|
|
|
|
|
|
|
|
Eletrobrás |
|
|
|
|
|
|
|
|
|
|
CPFL Paulista |
|
2,410 |
|
2,960 |
|
RGR + 6% to 6.5% |
|
120 monthly installments from January 2013 |
|
Receivables and promissory notes |
RGE |
|
3,988 |
|
5,851 |
|
RGR + 6% |
|
120 monthly installments from May 2008 |
|
Receivables and promissory notes |
RGE Sul |
|
18,970 |
|
25,946 |
|
RGR + 6% |
|
120 monthly installments from December 2008 |
|
Receivables and promissory notes |
CPFL Santa Cruz |
|
- |
|
508 |
|
RGR + 6% |
|
120 monthly installments from January 2007 |
|
Receivables and promissory notes |
CPFL Leste Paulista |
|
- |
|
338 |
|
RGR + 6% |
|
120 monthly installments from February 2008 |
|
Receivables and promissory notes |
CPFL Sul Paulista |
|
- |
|
303 |
|
RGR + 6% |
|
120 monthly installments from August 2007 |
|
Receivables and promissory notes |
CPFL Jaguari |
|
- |
|
9 |
|
RGR + 6% |
|
120 monthly installments from June 2007 |
|
Receivables and promissory notes |
CPFL Mococa |
|
- |
|
122 |
|
RGR + 6% |
|
120 monthly installments from January 2008 |
|
Receivables and promissory notes |
Others |
|
49,372 |
|
66,141 |
|
|
|
|
|
|
Subtotal local currency |
|
6,165,427 |
|
7,579,974 |
|
|
|
|
|
|
95
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Foreign currency |
|
|
|
|
|
|
|
|
|
| ||
Measured at fair value |
|
|
|
|
|
|
|
|
|
| ||
Financial institutions |
|
|
|
|
|
|
|
|
|
| ||
CPFL Paulista |
|
|
|
|
|
|
|
|
|
| ||
Bank of America Merrill Lynch |
|
332,766 |
|
327,503 |
|
US$+Libor 3 months+1.35% (2) (f) |
|
1 installment in October 2018 |
|
CPFL Energia guarantee and promissory notes | ||
Bank of America Merrill Lynch |
|
148,930 |
|
146,703 |
|
US$+Libor 3 months+1.70% (4) |
|
1 installment in September 2018 |
|
CPFL Energia guarantee and promissory notes | ||
Bank of Tokyo-Mitsubishi |
|
165,826 |
|
163,279 |
|
US$ + Libor 3 months + 0.88% (3) (g) |
|
1 installment in February 2020 |
|
CPFL Energia guarantee and promissory notes | ||
Bank of Tokyo-Mitsubishi |
|
124,211 |
|
163,106 |
|
US$+Libor 3 months+0.80% (2) (f) |
|
4 semiannual installments from September 2017 |
|
CPFL Energia guarantee and promissory notes | ||
BNP Paribas |
|
- |
|
68,663 |
|
Euro + 1.6350% (2) |
|
1 installment in January 2018 |
|
CPFL Energia guarantee and promissory notes | ||
HSBC |
|
- |
|
282,808 |
|
US$ + Libor 3 months + 1.30% (2) |
|
1 installment in January 2018 |
|
CPFL Energia guarantee and promissory notes | ||
J.P. Morgan |
|
- |
|
130,522 |
|
US$ + 2.28% to 2.32% (2) |
|
1 installment in December 2017 |
|
CPFL Energia guarantee and promissory notes | ||
J.P. Morgan |
|
- |
|
115,382 |
|
US$ + 2.36% to 2.39% (2) |
|
1 installment in January 2018 |
|
CPFL Energia guarantee and promissory notes | ||
J.P. Morgan |
|
83,783 |
|
82,544 |
|
US$ + 2.74% (2) |
|
1 installment in January 2019 |
|
CPFL Energia guarantee and promissory notes | ||
J.P. Morgan |
|
- |
|
49,311 |
|
US$ + 2.2% (2) |
|
1 installment in February 2018 |
|
CPFL Energia guarantee and promissory notes | ||
Bank of America Merrill Lynch |
|
498,061 |
|
490,334 |
|
US$ + Libor 3 months + 1.40% (2) |
|
1 installment in February 2018 |
|
CPFL Energia guarantee and promissory notes | ||
Mizuho Bank |
|
248,189 |
|
244,484 |
|
US$+Libor 3 months+1.55% (2) (f) |
|
3 semiannual installments from March 2018 |
|
CPFL Energia guarantee and promissory notes | ||
Syndicated transaction (**) - Bank of America Merrill Lynch, Citibank, HSBC and EDC-Export Development Canada |
221,475 |
|
218,104 |
|
US$ + Libor 3 months + 2.7% (3) |
|
5 semiannual installments from May 2019 |
|
CPFL Energia guarantee and promissory notes | |||
|
|
|
|
|
|
|
|
|
|
| ||
CPFL Piratininga |
|
|
|
|
|
|
|
|
|
| ||
BNP Paribas |
|
218,814 |
|
188,822 |
|
Euro + 1.6350% (2) |
|
1 installment in January 2018 |
|
CPFL Energia guarantee and promissory notes | ||
Citibank |
|
207,743 |
|
204,486 |
|
US$ + Libor 3 months + 1.41% (2) |
|
2 annual installments from January 2019 |
|
CPFL Energia guarantee and promissory notes | ||
Citibank |
|
165,740 |
|
163,225 |
|
US$ + Libor 3 months + 1.35% (3) |
|
1 installment in March 2019 |
|
CPFL Energia guarantee and promissory notes | ||
Scotiabank |
|
- |
|
54,235 |
|
US$ + 2.08% (2) |
|
1 installment in August 2017 |
|
CPFL Energia guarantee and promissory notes | ||
Sumitomo |
|
166,346 |
|
163,712 |
|
US$ + Libor 3 months + 1.35% (2) (f) |
|
1 installment in April 2018 |
|
CPFL Energia guarantee and promissory notes | ||
Syndicated transaction (**) - Bank of America Merrill Lynch, Citibank, HSBC and EDC-Export Development Canada |
221,475 |
|
218,104 |
|
US$ + Libor 3 months + 2.7% (3) |
|
5 semiannual installments from May 2019 |
|
CPFL Energia guarantee and promissory notes | |||
RGE |
|
|
|
|
|
|
|
|
|
| ||
Bank of Tokyo-Mitsubishi |
|
59,793 |
|
58,852 |
|
US$ + Libor 3 months + 0.82%(2) |
|
1 installment in April 2018 |
|
CPFL Energia guarantee and promissory notes | ||
Bank of Tokyo-Mitsubishi |
|
271,893 |
|
267,740 |
|
US$ + Libor 3 months + 0.83%(2) |
|
1 installment in May 2018 |
|
CPFL Energia guarantee and promissory notes | ||
Syndicated transaction (**) - Bank of America Merrill Lynch, Citibank, HSBC and EDC-Export Development Canada |
221,475 |
|
218,104 |
|
US$ + Libor 3 months + 2.7% (3) |
|
5 semiannual installments from May 2019 |
|
CPFL Energia guarantee and promissory notes | |||
Bank of Tokyo-Mitsubishi |
|
172,592 |
|
- |
|
US$ + 1,9275% |
|
1 installment in October 2018 |
|
CPFL Energia guarantee and promissory notes | ||
HSBC |
|
- |
|
44,496 |
|
US$ + Libor 3 months + 1.30% (2) |
|
1 installment in October 2017 |
|
CPFL Energia guarantee and promissory notes | ||
J.P. Morgan |
|
- |
|
199,826 |
|
US$ + 2.78% (2) |
|
1 installment in February 2018 |
|
CPFL Energia guarantee and promissory notes | ||
CPFL Santa Cruz |
|
|
|
|
|
|
|
|
|
| ||
Scotiabank |
|
- |
|
16,556 |
|
US$ + 3.37% (3) (g) |
|
1 installment in July 2019 |
|
CPFL Energia guarantee and promissory notes | ||
CPFL Sul Paulista |
|
|
|
|
|
|
|
|
|
| ||
Scotiabank |
|
- |
|
16,556 |
|
US$ + 3.37% (3) (g) |
|
1 installment in July 2019 |
|
CPFL Energia guarantee and promissory notes | ||
CPFL Leste Paulista |
|
|
|
|
|
|
|
|
|
| ||
Scotiabank |
|
- |
|
16,556 |
|
US$ + 3.37% (3) (g) |
|
1 installment in July 2019 |
|
CPFL Energia guarantee and promissory notes | ||
CPFL Jaguari |
|
|
|
|
|
|
|
|
|
| ||
Scotiabank |
|
67,219 |
|
16,556 |
|
US$ + 3.37% (3) (g) |
|
1 installment in July 2019 |
|
CPFL Energia guarantee and promissory notes | ||
CPFL Geração |
|
|
|
|
|
|
|
|
|
| ||
HSBC |
|
- |
|
326,159 |
|
US$+Libor 3 months + 1.30% (2) |
|
1 installment in March 2017 |
|
CPFL Energia guarantee and promissory notes | ||
CCB-China Construction Bank |
|
99,443 |
|
97,946 |
|
US$+Libor 3 months + 1.60% + 1.4% fee (4) |
|
1 installment in June 2019 |
|
CPFL Energia guarantee and promissory notes | ||
Scotiabank |
|
119,314 |
|
117,550 |
|
US$ + 3.37% (4) |
|
1 installment in July 2019 |
|
CPFL Energia guarantee and promissory notes | ||
Citibank |
|
397,328 |
|
391,380 |
|
US$+Libor 3 months + 1.41% (3) |
|
3 annual installments from September 2018 |
|
CPFL Energia guarantee and promissory notes | ||
CCB China |
|
33,120 |
|
32,624 |
|
US$ + 3.37% (3) |
|
1 installment in September 2019 |
|
CPFL Energia guarantee and promissory notes | ||
Scotiabank |
|
165,572 |
|
163,125 |
|
US$ + 3.13% |
|
1 installment in December 2019 |
|
CPFL Energia guarantee | ||
Paulista Lajeado |
|
|
|
|
|
|
|
|
|
| ||
Banco Itaú |
|
36,311 |
|
35,771 |
|
US$ + 3.196% (4) |
|
1 installment in March 2018 |
|
CPFL Energia guarantee and promissory notes | ||
CPFL Brasil |
|
|
|
|
|
|
|
|
|
| ||
Scotiabank |
|
45,161 |
|
44,501 |
|
US$ + 2.779% (3) |
|
1 installment in August 2018 |
|
CPFL Energia guarantee and promissory notes | ||
Scotiabank |
|
11,731 |
|
- |
|
US$ + 2.779% (3) |
|
1 installment in September 2020 |
|
CPFL Energia guarantee and promissory notes | ||
Scotiabank |
|
253,626 |
|
- |
|
US$ + 2.779% (3) |
|
1 installment in September 2020 |
|
CPFL Energia guarantee and promissory notes | ||
Scotiabank |
|
159,060 |
|
- |
|
USD + 2,3073% |
|
1 installment in October 2020 |
|
CPFL Energia guarantee and promissory notes | ||
|
|
|
|
|
|
|
|
|
|
| ||
Mark to market |
|
(58,552) |
|
(37,415) |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
| ||
Total in foreign currency - fair value |
|
4,858,446 |
|
5,502,211 |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
| ||
Borrowing costs (*) |
|
(31,816) |
|
(38,143) |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
| ||
Total - Consolidated |
|
10,992,057 |
|
13,044,041 |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
| ||
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% a 109% of CDI |
|
|
|
|
|
| ||||
(2) 95,20% of CDI |
|
(4) 109,1% a 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 CPC 08/IAS 39, this refers to borrowing costs directly attributable to the issuance of the respective debts, measured at cost.
(**) Syndicated transaction – borrowings in foreign currency, having as counterpart a group of financial institutions.
As segregated in the tables above, in conformity with CPCs 38 and 39 and IASs 32 and 39, the Group classified their debts as (i) other financial liabilities (or measured at amortized cost), and (ii) financial liabilities measured at fair value through profit or loss.
The objective of the classification as financial liabilities of borrowings measured at fair value is to compare the effects of the recognition of income and expenses derived from marking to market of derivatives, debt-related derivatives, in order to obtain more relevant and consistent accounting information. At December 31, 2017, the balance of the borrowings measured at fair value was R$ 4,858,445 (R$ 5,502,211 at December 31, 2016).
Changes in the fair values of these borrowings are recognized in the finance income/cost of the Group. At December 31, 2017, the accumulated gains of R$ 58,552 (R$ 37,415 at December 31, 2016) on marking the
96
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
borrowings to market, offset by the losses of R$ 51,145 (gains of R$ 24,504 at December 31, 2016) of marking to market the derivative financial instruments contracted as a hedge against foreign exchange variations (note 33), resulted in a total net gain of R$ 7,407 (R$ 61,919 at December 31, 2016).
The maturities of the principal of borrowings recorded in noncurrent liabilities are scheduled as follows:
Maturity |
|
Consolidated |
2019 |
|
2,737,432 |
2020 |
|
1,744,143 |
2021 |
|
649,487 |
2022 |
|
453,085 |
2023 |
|
371,895 |
2024 to 2028 |
|
1,155,315 |
2029 to 2033 |
|
338,270 |
Subtotal |
|
7,449,627 |
Mark to market |
|
(47,177) |
Total |
|
7,402,450 |
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 |
Consolidated |
|
| |||||||
|
|
|
|
|
|
% of debt |
|
| ||||
Index |
|
2017 |
|
2016 |
|
December 31, 2017 |
December 31, 2016 | |||||
IGP-M |
|
(0.52) |
|
7.17 |
|
0.52 |
|
0.53 | ||||
TJLP |
|
7.00 |
|
7.50 |
|
31.38 |
|
31.48 | ||||
CDI |
|
6.89 |
|
13.63 |
|
59.49 |
|
56.31 | ||||
Outros |
|
|
|
|
|
8.60 |
|
11.68 | ||||
|
|
|
|
|
|
100.00 |
|
100.00 | ||||
Main additions in the year:
|
|
R$ thousand |
|
|
| |||||||
Company |
|
Bank / Credit issue |
|
Total approved |
|
Released in 2017 |
|
Released net of fundraising costs |
|
Interest |
|
Utilization |
Local currency |
|
|
|
|
|
|
|
|
|
|
|
|
Companhia Luz e Força Santa Cruz, CPFL Leste Paulista, Companhia Jaguari de Energia (CPFL Santa Cruz), CPFL Sul Paulista e CPFL Mococa |
FINAME (a) |
|
6,556 |
|
6,556 |
|
6,556 |
|
Quarterly |
|
Subsidiary's investment plan | |
CPFL Serviços |
|
FINAME (a) |
|
11,286 |
|
11,286 |
|
11,286 |
|
Quarterly |
|
Acquisition of machinery and equipment |
CPFL Serviços |
|
Promissory note |
|
45,000 |
|
45,000 |
|
45,000 |
|
Bullet |
|
Working capital |
CPFL Renováveis |
|
FINEM XXVI |
|
764,109 |
|
146,730 |
|
142,811 |
|
Monthly |
|
Subsidiary's investment plan |
CPFL Renováveis |
|
FINEM XXVII |
|
87,184 |
|
1,699 |
|
1,699 |
|
Monthly |
|
Subsidiary's investment plan |
CPFL Renováveis |
|
FINEM XXVIII |
|
206,000 |
|
1,414 |
|
1,414 |
|
Monthly |
|
Subsidiary's investment plan |
CPFL Renováveis |
|
BBM / promissory note (a) |
|
62,000 |
|
62,000 |
|
61,833 |
|
Bullet |
|
Working capital |
CPFL Renováveis |
|
CCB (a) |
|
11,000 |
|
11,000 |
|
10,794 |
|
Bullet |
|
Working capital |
CPFL Renováveis |
|
CCB (a) |
|
14,000 |
|
14,000 |
|
13,737 |
|
Bullet |
|
Working capital |
CPFL Renováveis |
|
CCB (a) |
|
1,000 |
|
1,000 |
|
981 |
|
Bullet |
|
Working capital |
CPFL Renováveis |
|
CCB (a) |
|
44,000 |
|
44,000 |
|
44,000 |
|
Bullet |
|
Working capital |
CPFL Renováveis |
|
CCB (a) |
|
2,752 |
|
2,752 |
|
2,700 |
|
Bullet |
|
Working capital |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,254,887 |
|
347,437 |
|
342,811 |
|
|
|
|
Foreign currency |
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Brasil |
|
Law 4131 - Scotiabank |
|
400,000 |
|
400,000 |
|
400,000 |
|
Semiannually |
|
Working capital |
RGE |
|
Law 4131 -Bank of Tokyo-Mitsubishi |
|
169,260 |
|
169,260 |
|
169,260 |
|
Quarterly |
|
Working capital |
|
|
|
|
569,260 |
|
569,260 |
|
569,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,824,147 |
|
916,697 |
|
912,071 |
|
|
|
|
(a) There is no restrictive financial covenant.
97
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Prepayment
CPFL Paulista – In 2017, R$ 1,093,611 were settled in advance relating to borrowings from banks J.P.Morgan, Banco do Brasil, Banco Safra, HSBC and BNP Paribas, with original maturities from December 2017 to July 2018.
CPFL Piratininga – In 2017, R$ 68,952 were settled in advance relating to borrowings from Banco do Brasil with original maturities from July 2017 to July 2018.
RGE - In 2017, R$ 200,672 were settled in advance relating to borrowings from bank J.P.Morgan, with original maturities in February 2018.
RESTRICTIVE COVENANTS
(i) BNDES:
Borrowings from the BNDES restrict the subsidiaries CPFL Paulista, CPFL Piratininga, RGE and CPFL Telecom to: i) only paying dividends and interest on capital totaling more than the minimum mandatory dividend required by law after fulfillment of all contractual obligations; (ii) fully complying with the restrictive obligations set out in the agreement; and (iii) maintaining certain financial ratios within pre-established parameters calculated annually, as follows:
CPFL Paulista, CPFL Piratininga and RGE
Maintenance, by these subsidiaries, of the following ratios:
· Net Debt to EBITDA ratio – maximum of 3.5;
· Net Debt divided by the sum of Net Debt and Equity – maximum of 0.90.
For debts to BNDES related to FINEM of these subsidiaries, in 2017 their agreements were amended with the inclusion of new financial covenants, in addition to those previously mentioned, which must be calculated annually in the consolidated financial statements of their parent companies:
(i) Maintenance, by CPFL Energia, of the following ratios:
· Net Debt to EBITDA ratio – maximum of 3.75;
· Equity / (Equity + Net Bank Debts) ratio greater than 0.28.
(ii) Maintenance, by State Grid Brazil Power (SGBP), of the following ratios:
· Equity to Total Assets ratio greater than 0.30 (disregarding the effects of IFRIC 12 / OCPC 01 (R1).
CPFL Renováveis (calculated in indirect subsidiary CPFL Renováveis and its subsidiaries, except when mentioned in each specific item:
FINEM I
· Maintenance of debt service coverage ratio “DSCR” (cash balance for the prior year + cash generation for the current year) / Debt service for the current year at 1.2 times.
· Maintenance of Company Capitalization Ratio greater than or equal to 25%.
As at December 31, 2016, the Company was not compliant with the DSCR for the second half of 2016 and the total amount of the debts of R$ 87,375 was classified in current liabilities, without declaration of early maturity of the debts. After December 31, 2016, the Companies obtained from BNDES a waiver for not calculating the DSCR for the second half of 2016, due this the amount was transfer to noncurrent liabilities in January 2017. Non-compliance with such covenant also did not result in early maturity of the other debts that have specific cross default conditions.
In December 2017, the subsidiary obtained from BNDES the non-declaration of early maturity of the debt for non-compliance with the DSCR in the consolidated financial statements of PCH Holding.
FINEM II and FINEM XVIII
· Restriction on the payment of dividend if a DSCR greater than or equal to 1.0 and a General Indebtedness Ratio less than or equal to 0.8 are not achieved.
FINEM III
· Maintenance of Equity/(Equity + Net Bank Debts) ratio greater than 0.28 calculated in the Company’s annual consolidated financial statements;
· Maintenance of Net Bank Debt to EBITDA ratio less than or equal to 3.75 calculated in the Company’s annual consolidated financial statements.
· Maintenance of Equity to Total Assets ratio greater than 0.3 calculated annually based on the consolidated financial statements of State Grid Brazil Power.
98
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
FINEM V
· Maintenance of Debt Service Coverage Ratio at 1.2 times.
· Maintenance of Company Capitalization Ratio equal to or greater than 30%.
FINEM VI
· Maintenance of DSCR equal to or greater than 1.2 times.
· Maintenance of Company Capitalization Ratio equal to or greater than 25%.
· Maintenance of Equity/(Equity + Net Bank Debts) ratio greater than 0.28 calculated in the Company’s annual consolidated financial statements;
· Maintenance of Net Bank Debt to EBITDA ratio less than or equal to 3.75 calculated in the Company’s annual consolidated financial statements.
· Maintenance of Equity to Total Assets ratio greater than 0.3 calculated annually based on the consolidated financial statements of State Grid Brazil Power.
FINEM VII, FINEM X and FINEM XXIII
· Annual maintenance of Debt Service Coverage Ratio at 1.2 times.
· Payment of dividend limited to Total Liabilities to Ex-Dividend Equity ratio less than 2.33.
FINEM IX, FINEM XIII and FINEM XXV
· Maintenance of DSCR greater than or equal to 1.3.
· Maintenance of Equity/(Equity + Net Bank Debts) greater than 0.28 calculated in the Company’s annual consolidated financial statements;
· Maintenance of Net Bank Debt to EBITDA ratio less than or equal to 3.75 calculated in the Company’s annual consolidated financial statements.
· Maintenance of Equity/Total Assets ratio greater than 0.3 calculated annually based on the consolidated financial statements of State Grid Brazil Power.
FINEM XXVI
· Maintenance of DSCR greater than or equal to 1.3 in subsidiaries beneficiaries of the agreement.
· Annual maintenance of DSCR greater than or equal to 1.3 calculated in the consolidated financial statements of subsidiary Turbina 16.
· If the DSCR is calculated at an amount equal to or greater than 1.3, the beneficiaries will be waived from the obligation to maintain the DSCR of the beneficiaries.
· Maintenance of Equity/(Equity + Net Bank Debts) greater than 0.28 calculated in the Company’s annual consolidated financial statements;
· Maintenance of Net Bank Debt to EBITDA ratio less than or equal to 3.75 calculated in the Company’s annual consolidated financial statements.
· Maintenance of Equity to Total Assets ratio greater than 0.3 calculated annually based on the consolidated financial statements of State Grid Brazil Power.
In December 2017, the subsidiary obtained from BNDES the non-declaration of early maturity of the debt in the event of non-compliance with the DSCR in the consolidated financial statements of Turbina 16.
FINEM XI, FINEM XXIV, FINEM XV and FINEM XVI
· Maintenance of Net Bank Debt to EBITDA ratio less than or equal to 3.75 calculated in the Company’s annual consolidated financial statements.
· Maintenance of Equity/(Equity + Net Bank Debts) ratio greater than 0.28 calculated in the Company’s annual consolidated financial statements;
· Maintenance of Equity to Total Assets ratio greater than 0.3 calculated annually based on the consolidated financial statements of State Grid Brazil Power.
FINEM XII
· Annual maintenance of DSCR in 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. greater than or equal to 1.3, after the beginning of amortization;
· Annual maintenance of consolidated DSCR greater than or equal to 1.3 calculated in the consolidated financial statements of Eólica Holding S.A., after the beginning of amortization;
· Maintenance of Equity/(Equity + Net Bank Debts) greater than 0.28 calculated in the Company’s annual consolidated financial statements;
· Maintenance of Equity to Total Assets ratio greater than 0.3 calculated annually based on the consolidated financial statements of State Grid Brazil Power.
FINEM XVII
99
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
· Annual maintenance of DSCR equal to or greater than 1.2.
· Annual maintenance of consolidated DSCR greater than or equal to 1.3 calculated in the consolidated financial statements of Desa Eóticas;
· If the DSCR is calculated at an amount equal to or greater than 1.3, the beneficiaries will be waived from the obligation to maintain the DSCR.
FINEM XIX and FINEM XX
· Maintenance of DSCR greater than or equal to 1.2.
· Maintenance of Net Debt to EBITDA ratio less than or equal to 4.6 in 2016 and 3.75 from 2017 on, calculated in the consolidated financial statements of CPFL Renováveis;
· Maintenance of Equity / (Equity + Net Debts) ratio greater than or equal to 0.41 from 2014 to 2016 and 0.45 from 2017 on, calculated in the consolidated financial statements of CPFL Renováveis;
· Maintenance of Equity/(Equity + Net Bank Debts) ratio greater than 0.28 calculated in the Company’s annual consolidated financial statements;
· Maintenance of Net Bank Debt to EBITDA ratio less than or equal to 3.75 calculated in the Company’s annual consolidated financial statements.
· Maintenance of Equity to Total Assets ratio greater than 0.3 calculated annually based on the consolidated financial statements of State Grid Brazil Power.
In December 2016, the subsidiary obtained a waiver from BNDES for non-compliance with the Net Debt to EBITDA ratio without declaration of early maturity of the debt for the year ended December 31, 2016.
In December 2017, the subsidiary obtained from BNDES the non-declaration of the early maturity in the event of non-compliance with the DSCR in the consolidated financial statements of Bio Alvorada and authorization for non-compliance with the Net Debt to EBITDA ratio and Equity/(Equity + Net Debt) ratio.
FINEM XXI e FINEM XXII
· Maintenance of DSCR greater than or equal to 1.2.
· Maintenance of Net Debt to EBITDA ratio less than or equal to 4.6 in 2016 and 3.75 from 2017 on, calculated in the consolidated financial statements of CPFL Renováveis;
· Maintenance of Equity / (Equity + Net Debts) ratio greater than or equal to 0.41 from 2013 to 2016 and 0.45 from 2017 on, calculated in the consolidated financial statements of CPFL Renováveis;
· Maintenance of Equity/(Equity + Net Bank Debts) ratio greater than 0.28 calculated in the Company’s annual consolidated financial statements;
· Maintenance of Net Bank Debt to EBITDA ratio less than or equal to 3.75 calculated in the Company’s annual consolidated financial statements.
· Maintenance of Equity to Total Assets ratio greater than 0.3 calculated annually based on the consolidated financial statements of State Grid Brazil Power.
In December 2016 and 2017, the Company obtained a waiver from BNDES for non-compliance with the Net Debt to EBITDA ratio without declaration of early maturity of the debt for the years ended December 31, 2016 and 2017
FINEM XXVII
· Maintenance of DSCR greater than or equal to 1.2.
· Maintenance of the Capitalization Ratio (ICP), defined as Equity to Total Assets ratio greater than or equal to 39.5%.
· Maintenance of Equity/(Equity + Net Bank Debts) ratio greater than 0.28 calculated in the Company’s annual consolidated financial statements;
· Maintenance of Net Bank Debt to EBITDA ratio less than or equal to 3.75 calculated in the Company’s annual consolidated financial statements.
· Maintenance of Equity to Total Assets ratio greater than 0.3 calculated annually based on the consolidated financial statements of State Grid Brazil Power.
In December 2017, the subsidiary obtained from BNDES the non-declaration of early maturity of the debt in the event of non-compliance with the DSCR in the consolidated financial statements of Mata Velha.
FINEM XXVIII
· Maintenance of DSCR greater than or equal to 1.2.
· Maintenance of Net Debt to EBITDA ratio less than or equal to 4.6 in 2016 and 3.75 from 2017 on, calculated in the consolidated financial statements of CPFL Renováveis;
· Maintenance of Equity / (Equity + Net Debts) ratio greater than or equal to 0.41 from 2013 to 2016 and 0.45 from 2017 on, calculated in the consolidated financial statements of CPFL Renováveis;
· Maintenance of Equity/(Equity + Net Bank Debts) ratio greater than 0.28 calculated in the Company’s annual consolidated financial statements;
100
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
· Maintenance of Net Bank Debt to EBITDA ratio less than or equal to 3.75 calculated in the Company’s annual consolidated financial statements.
· Maintenance of Equity to Total Assets ratio greater than 0.3 calculated annually based on the consolidated financial statements of State Grid Brazil Power.
In December 2017, the subsidiary obtained from BNDES the non-declaration of the early maturity of the debt in the event of non-compliance with the DSCR in the consolidated financial statements of Bio Coopcana and Bio Alvorada and authorization for non-compliance with the Net Debt to EBITDA ratio and Equity/(Equity + Net Debt) ratio.
Bradesco
· Maintenance of Net Debt to EBITDA ratio less than 3.50 calculated semiannually based on the semiannual financial statements, consolidating the results of T-15 Energia S.A. with those of the SPEs, in the case of PCH Participações S.A. there is consolidation proportional to T-15’s interest in PCH Participações.
NIB
· Semiannual maintenance of DSCR at 1.3;
· Maintenance of Indebtedness Ratio equal to or less than 70%;
· Maintenance of Financing Term Coverage Ratio greater than or equal to 1.7.
(ii) Foreign currency borrowings - Bank of America Merrill Lynch, J.P Morgan, Citibank, Scotiabank, Banco de Tokyo-Mitsubishi, Santander, Sumitomo, Mizuho, HSBC, BNP Paribas and syndicated transaction (Law 4,131)
The foreign currency borrowings obtained under Law 4,131 are subject to certain covenants, including 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.
The definition of EBITDA for the Company, for covenant calculation purposes, takes into consideration mainly the consolidation of subsidiaries, associates and joint ventures based on the direct or indirect interest held by the Company in those companies (for both EBITDA and assets and liabilities).
Various borrowings of the direct and indirect subsidiaries were subject to early maturity in the event of changes in the Company’s shareholding structure, except if at least one of the following shareholders, Camargo Corrêa and Previ, remained directly or indirectly in the Company’s control block. In view of the change of the Company’s shareholding control in January 2017, the Company negotiated previously with the Group’s creditors that they would not declare the early maturity of such borrowings, which started including State Grid International Development Limited or any entity directly or indirectly controlled by State Grid Corporation of China as exception for not declaring the early maturity of the debt.
Furthermore, failure to comply with the obligations or restrictions mentioned may result in default in relation to other contractual obligations (cross default), depending on each borrowing agreement.
The Group’s management monitors these ratios on a systematic and continuous basis to ensure that the conditions are complied with. In the opinion of the Group’s management, all covenants and financial and non-financial clauses are properly complied, except as mentioned previously in relation to the indirectly-controlled entity CPFL Renováveis, at December 31, 2017.
( 17 ) DEBENTURES
|
Consolidated | |||||||||||
|
|
At December 31, 2016 |
|
Raised |
|
Repayment |
|
Interest, inflation adjustment |
|
Exchange rates |
|
At December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debentures |
|
9,067,520 |
|
2,486,000 |
|
(2,231,451) |
|
913,313 |
|
(981,986) |
|
9,253,396 |
Borrowings costs |
|
(67,575) |
|
(33,371) |
|
- |
|
24,076 |
|
- |
|
(76,870) |
Total |
|
8,999,945 |
|
2,452,629 |
|
(2,231,451) |
|
937,389 |
|
(981,986) |
|
9,176,526 |
101
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
|
Consolidated | ||||||||||||||
|
|
December 31, 2017 |
|
December 31, 2016 | ||||||||||||
|
|
Current interest |
|
Current |
|
Noncurrent |
|
Total |
|
Current interest |
|
Current |
|
Noncurrent |
|
Total |
CPFL Paulista |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6th Issue |
Single series |
- |
|
- |
|
- |
|
- |
|
47,079 |
|
198,000 |
|
462,000 |
|
707,079 |
7th Issue |
Single series |
17,134 |
|
126,250 |
|
378,750 |
|
522,134 |
|
28,913 |
|
- |
|
505,000 |
|
533,913 |
8th Issue |
1st series |
1,669 |
|
- |
|
215,310 |
|
216,980 |
|
- |
|
- |
|
- |
|
- |
8th Issue |
2nd series |
2,925 |
|
- |
|
358,224 |
|
361,149 |
|
- |
|
- |
|
- |
|
- |
8th Issue |
3rd series |
1,161 |
|
- |
|
131,397 |
|
132,558 |
|
- |
|
- |
|
- |
|
- |
|
|
22,890 |
|
126,250 |
|
1,083,681 |
|
1,232,821 |
|
75,992 |
|
198,000 |
|
967,000 |
|
1,240,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Piratininga |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6th Issue |
Single series |
1,950 |
|
- |
|
44,000 |
|
45,950 |
|
7,846 |
|
33,000 |
|
77,000 |
|
117,846 |
7th Issue |
Single series |
7,973 |
|
58,750 |
|
176,250 |
|
242,973 |
|
13,455 |
|
- |
|
235,000 |
|
248,455 |
8th issue |
2nd series |
7,669 |
|
- |
|
246,000 |
|
253,669 |
|
- |
|
- |
|
- |
|
- |
8th issue |
1st series |
1,174 |
|
- |
|
61,125 |
|
62,299 |
|
- |
|
- |
|
- |
|
- |
|
|
18,766 |
|
58,750 |
|
527,375 |
|
604,891 |
|
21,301 |
|
33,000 |
|
312,000 |
|
366,301 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RGE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6th Issue |
Single series |
8,864 |
|
- |
|
200,000 |
|
208,864 |
|
35,666 |
|
150,000 |
|
350,000 |
|
535,666 |
7th Issue |
Single series |
5,768 |
|
42,500 |
|
127,500 |
|
175,768 |
|
9,733 |
|
- |
|
170,000 |
|
179,733 |
8th issue |
2nd series |
7,812 |
|
- |
|
250,000 |
|
257,812 |
|
- |
|
- |
|
- |
|
- |
8th issue |
1st series |
2,573 |
|
- |
|
132,573 |
|
135,146 |
|
- |
|
- |
|
- |
|
- |
|
|
25,017 |
|
42,500 |
|
710,073 |
|
777,590 |
|
45,399 |
|
150,000 |
|
520,000 |
|
715,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Companhia Luz e Força Santa Cruz |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Issue |
Single series |
- |
|
- |
|
- |
|
- |
|
550 |
|
32,500 |
|
32,500 |
|
65,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Companhia Jaguari de Energia (CPFL Santa Cruz) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Issue |
Single series |
135 |
|
32,500 |
|
- |
|
32,635 |
|
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RGE SUL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4th Issue |
Single series |
16,662 |
|
- |
|
1,100,000 |
|
1,116,662 |
|
32,058 |
|
- |
|
1,100,000 |
|
1,132,058 |
6th Issue |
Single series |
312 |
|
- |
|
220,000 |
|
220,312 |
|
- |
|
- |
|
- |
|
- |
|
|
16,974 |
|
- |
|
1,320,000 |
|
1,336,974 |
|
32,058 |
|
- |
|
1,100,000 |
|
1,132,058 |
CPFL Brasil |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3rd Issue |
Single series |
6,059 |
|
- |
|
400,000 |
|
406,059 |
|
11,657 |
|
- |
|
400,000 |
|
411,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Geração |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5th Issue |
Single series |
3,366 |
|
546,000 |
|
- |
|
549,366 |
|
12,969 |
|
546,000 |
|
546,000 |
|
1,104,969 |
6th Issue |
Single series |
13,671 |
|
153,318 |
|
306,682 |
|
473,671 |
|
23,228 |
|
- |
|
460,000 |
|
483,228 |
7th Issue |
Single series |
8,978 |
|
- |
|
635,000 |
|
643,978 |
|
16,379 |
|
- |
|
635,000 |
|
651,379 |
8th Issue |
Single series |
3,401 |
|
- |
|
87,905 |
|
91,306 |
|
3,369 |
|
- |
|
85,520 |
|
88,889 |
9th Issue |
Single series |
550 |
|
- |
|
51,672 |
|
52,221 |
|
524 |
|
- |
|
50,278 |
|
50,802 |
|
|
29,966 |
|
699,318 |
|
1,081,259 |
|
1,810,543 |
|
56,470 |
|
546,000 |
|
1,776,798 |
|
2,379,268 |
Parent company |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5th Issue |
Single series |
2,817 |
|
- |
|
186,000 |
|
188,817 |
|
18,069 |
|
- |
|
620,000 |
|
638,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Renováveis |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Issue - SIIF (*) |
1st to 12th series |
762 |
|
44,968 |
|
449,678 |
|
495,408 |
|
762 |
|
41,938 |
|
461,314 |
|
504,014 |
1st Issue - PCH Holding 2 |
Single series |
260 |
|
8,701 |
|
123,391 |
|
132,352 |
|
644 |
|
8,700 |
|
132,091 |
|
141,435 |
1st Issue - DESA |
Single series |
- |
|
- |
|
- |
|
- |
|
425 |
|
17,500 |
|
- |
|
17,925 |
2nd Issue - DESA |
Single series |
39,857 |
|
43,329 |
|
21,671 |
|
104,857 |
|
29,153 |
|
- |
|
65,000 |
|
94,153 |
1st Issue - Pedra Cheirosa I |
Single series |
1,617 |
|
64,653 |
|
- |
|
66,270 |
|
6,675 |
|
52,200 |
|
- |
|
58,875 |
1st Issue - Pedra Cheirosa II |
Single series |
1,481 |
|
59,203 |
|
- |
|
60,684 |
|
6,114 |
|
47,800 |
|
- |
|
53,914 |
1st Issue - Boa Vista II |
Single series |
- |
|
- |
|
- |
|
- |
|
6,395 |
|
50,000 |
|
- |
|
56,395 |
1st Issue - Renováveis |
Single series |
2,970 |
|
64,500 |
|
258,000 |
|
325,470 |
|
6,160 |
|
43,000 |
|
322,500 |
|
371,660 |
2nd Issue - Renováveis |
Single series |
5,531 |
|
60,000 |
|
210,000 |
|
275,531 |
|
11,486 |
|
30,000 |
|
270,000 |
|
311,486 |
3rd Issue - Renováveis |
Single series |
2,169 |
|
98,657 |
|
197,343 |
|
298,169 |
|
4,444 |
|
- |
|
296,000 |
|
300,444 |
4th Issue - Renováveis |
1st series |
4,534 |
|
- |
|
200,000 |
|
204,534 |
|
7,925 |
|
- |
|
200,000 |
|
207,925 |
5th Issue - Renováveis |
Single series |
9,716 |
|
12,000 |
|
88,000 |
|
109,716 |
|
- |
|
- |
|
- |
|
- |
7th Issue - Renováveis |
Single series |
6,244 |
|
- |
|
253,529 |
|
259,773 |
|
- |
|
- |
|
- |
|
- |
|
|
75,141 |
|
456,011 |
|
1,801,612 |
|
2,332,764 |
|
80,183 |
|
291,138 |
|
1,746,905 |
|
2,118,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CERAN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Issue |
1st series |
181 |
|
106,000 |
|
212,000 |
|
318,181 |
|
- |
|
- |
|
- |
|
- |
1st Issue |
2nd series |
121 |
|
- |
|
212,000 |
|
212,121 |
|
- |
|
- |
|
- |
|
- |
|
|
302 |
|
106,000 |
|
424,000 |
|
530,302 |
|
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowing costs (**) |
|
(7,580) |
|
(8,745) |
|
(60,546) |
|
(76,870) |
|
(7,346) |
|
(8,545) |
|
(51,684) |
|
(67,575) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
190,489 |
|
1,512,584 |
|
7,473,454 |
|
9,176,526 |
|
334,333 |
|
1,242,092 |
|
7,423,518 |
|
8,999,945 |
102
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
|
Quantity issued |
|
Annual remuneration |
Annual effective rate |
|
Amortization conditions |
|
Collateral | ||||||||||
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 | |||||||||
8th Issue |
1st series |
213,804 |
|
IPCA + 4,42% |
|
IPCA + 4,42% |
|
1 installment in September 2022 |
|
CPFL Energia guarantee | |||||||||
8th Issue |
2nd series |
355,718 |
|
IPCA + 4,66% |
|
IPCA + 4,66% |
|
2 annual instalments from September 2023 |
|
CPFL Energia guarantee | |||||||||
8th Issue |
3rd series |
130,478 |
|
IPCA + 5,05% |
|
IPCA + 5,05% |
|
3 annual instalments from September 2025 |
|
CPFL Energia guarantee | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
CPFL Piratininga |
|
|
|
|
|
|
|
|
|
| |||||||||
6th Issue |
Single series |
110 |
|
CDI + 0.8% (2) |
|
CDI + 0.91% |
|
3 annual installments from July 2017 |
|
CPFL Energia guarantee | |||||||||
7th Issue |
Single series |
23,500 |
|
CDI + 0.83% (2) |
|
CDI + 0.89% |
|
4 annual installments from February 2018 |
|
CPFL Energia guarantee | |||||||||
8th issue |
2nd series |
246,000 |
|
109.5% CDI |
|
109.5% CDI |
|
2 annual installments from February 2021 |
|
CPFL Energia guarantee | |||||||||
8th issue |
1st series |
60,000 |
|
IPCA + 5.2901% |
|
IPCA + 5.2901% |
|
2 annual installments from February 2021 |
|
CPFL Energia guarantee | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
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 | |||||||||
8th issue |
2nd series |
250,000 |
|
111.25% CDI |
|
111.25% CDI |
|
2 annual installments from February 2021 |
|
CPFL Energia guarantee | |||||||||
8th issue |
1st series |
130,000 |
|
IPCA+ 5.3473% |
|
IPCA+ 5.3473% |
|
2 annual installments from February 2023 |
|
CPFL Energia guarantee | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
Companhia Luz e Força Santa Cruz |
|
|
|
|
|
|
|
|
|
| |||||||||
1st Issue |
Single series |
650 |
|
CDI + 1.4% |
|
CDI + 1.52% |
|
2 annual instalments from June 2017 |
|
CPFL Energia guarantee | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
Companhia Jaguari de Energia (CPFL Santa Cruz) |
|
|
|
|
|
|
|
|
| ||||||||||
1st Issue |
Single series |
650 |
|
CDI + 1.4% |
|
CDI + 1.52% |
|
2 annual instalments from June 2017 |
|
CPFL Energia guarantee | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
RGE SUL |
|
|
|
|
|
|
|
|
|
| |||||||||
4th Issue |
Single series |
110,000 |
|
114.50% of CDI |
|
114.5% of CDI |
|
2 annual installments from October 2019 |
|
CPFL Energia guarantee | |||||||||
6th Issue |
Single series |
520,000 |
|
CDI + 0,48% |
|
CDI + 0,48% |
|
1 installment in December 2020 |
|
CPFL Energia guarantee | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
CPFL Brasil |
|
|
|
|
|
|
|
|
|
| |||||||||
3rd Issue |
Single series |
40,000 |
|
114.5% of CDI |
|
114.5% of CDI |
|
2 annual installments from October 2019 |
|
CPFL Energia guarantee | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
CPFL Geração |
|
|
|
|
|
|
|
|
|
| |||||||||
5th Issue |
Single series |
10,920 |
|
CDI + 1.4% |
|
CDI + 1.48% |
|
2 annual instalments from June 2017 |
|
CPFL Energia guarantee | |||||||||
6th Issue |
Single series |
46,000 |
|
CDI + 0.75% (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 | |||||||||
9th Issue |
Single series |
50,000 |
|
IPCA+ 5.4764% |
|
IPCA+ 5.4764% |
|
1 installment in October 2021 |
|
CPFL Energia guarantee | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
Parent company |
|
|
|
|
|
|
|
|
|
| |||||||||
5th Issue |
Single series |
62,000 |
|
114.5% of CDI |
|
114.5% of CDI |
|
2 annual installments from October 2019 |
|
No guarantee | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
CPFL Renováveis |
|
|
|
|
|
|
|
|
|
| |||||||||
1st Issue - SIIF (*) |
1st to 12th series |
432,299,666 |
|
TJLP + 1% |
|
TJLP + 3.48% |
|
39 semi-annual installments from 2009 |
|
Liens | |||||||||
1st Issue - PCH Holding 2 |
Single series |
1,581 |
|
CDI + 1.6% |
|
CDI + 2.6% |
|
9 annual installments from June 2015 to 2023 |
|
CPFL Renováveis guarantee | |||||||||
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 + 3.03% |
|
3 semi-annual installments from April de 2018 |
|
Unsecured | |||||||||
1st Issue - Pedra Cheirosa I |
Single series |
5,220 |
|
CDI + 1.90% |
|
CDI + 4.74% |
|
1 installment in March 2018 |
|
CPFL Renováveis guarantee | |||||||||
1st Issue - Pedra Cheirosa II |
Single series |
4,780 |
|
CDI + 1.90% |
|
CDI + 4.76% |
|
1 installment in March 2018 |
|
CPFL Renováveis guarantee | |||||||||
1st Issue - Boa Vista II |
Single series |
5,000 |
|
CDI + 2.85% |
|
CDI + 2.85% |
|
1 installment in September 2017 |
|
CPFL Renováveis guarantee | |||||||||
1st Issue - Renováveis |
Single series |
43,000 |
|
CDI + 1.7% |
|
CDI + 2.60% |
|
9 annual installments from May 2015 |
|
Assignment of dividends of BVP and PCH Holding | |||||||||
2nd Issue - Renováveis |
Single series |
300,000 |
|
114% do CDI |
|
129.39% CDI |
|
5 annual instalments from 2017 |
|
Unsecured | |||||||||
3rd Issue - Renováveis |
Single series |
29,600 |
|
117.25% CDI |
|
135.94% CDI |
|
3 semi-annual installments from April de 2018 |
|
Unsecured | |||||||||
4th Issue - Renováveis |
1st series |
20,000 |
|
126% CDI |
|
140.16% CDI |
|
3 annual installments from September 2019 |
|
CPFL Energia guarantee | |||||||||
5th Issue - Renováveis |
Single series |
100,000,000 |
|
129.5% CDI |
|
144.46% CDI |
|
Semi-annual installments from June 2018 |
|
Liens of 60% of the quotas from Ludesa and contract credits Dobrevê guarantee | |||||||||
7th Issue - Renováveis |
Single series |
250,000 |
|
IPCA + 5.62% |
|
IPCA + 6.14% |
|
1 installment in the end of the contract |
|
CPFL Energia guarantee | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
CERAN |
|
|
|
|
|
|
|
|
|
| |||||||||
1st Issue |
1st series |
318,000 |
|
107,75% CDI |
|
109,82% CDI |
|
3 annual installments from December 2018 |
|
No guarantee | |||||||||
1st Issue |
2nd series |
212,000 |
|
107,75% CDI |
|
109,82% CDI |
|
3 annual installments from December 2021 |
|
No guarantee | |||||||||
|
|
|
|
|
|
|
|
|
|
| |||||||||
The 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 |
|
|
|
|
|
|
|
|
|
| |||||||||
(*) These debentures can be converted into shares and, therefore, are considered in the calculation of the dilutive effect for the earnings per share (note 24)
(**) In accordance with CPC 08/IAS 39 this refers to borrowing costs directly attributable to the issuance of the respective debts.
The maturities of the principal of debentures recognized in noncurrent liabilities are as follows:
103
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Maturity |
|
Consolidated |
2019 |
|
2,549,412 |
2020 |
|
1,907,240 |
2021 |
|
1,061,702 |
2022 |
|
975,082 |
2023 |
|
423,730 |
2024 to 2028 |
|
556,288 |
Total |
|
7,473,454 |
|
|
|
Main additions in the year:
|
|
|
|
|
|
R$ thousand |
| |||||
Company |
|
Issue |
|
Quantity issued |
|
Released in 2017 |
Released net of fundraising costs |
Interest |
|
Utilization | ||
CPFL Piratininga |
|
8th issue |
|
306,000 |
|
306,000 |
|
303,437 |
|
Semiannually |
|
Subsidiary's investment plan, debt refinancing and working capital improvement |
RGE |
|
8th issue |
|
380,000 |
|
380,000 |
|
376,605 |
|
Semiannually |
|
Subsidiary's investment plan, debt refinancing and working capital improvement |
CPFL Paulista |
|
8th issue |
|
700,000 |
|
700,000 |
|
685,463 |
|
Semiannually |
|
Subsidiary's investment plan, debt refinancing and working capital improvement |
RGE Sul |
|
6th issue |
|
520,000 |
|
220,000 |
|
219,887 |
|
Semiannually |
|
Subsidiary's investment plan, debt refinancing and working capital improvement |
CPFL Renováveis - parent company (a) |
|
5th issue |
|
100,000,000 |
|
100,000 |
|
97,072 |
|
Semiannually |
|
Subsidiary's investment plan |
CPFL Renováveis - parent company (a) |
|
7th issue |
|
250,000 |
|
250,000 |
|
243,472 |
|
Semiannually |
|
Subsidiary's investment plan |
CERAN |
|
1st issue |
|
530,000 |
|
530,000 |
|
527,708 |
|
Semiannually |
|
Funds transfer to shareholders |
|
|
|
|
|
|
2,486,000 |
|
2,453,644 |
|
|
|
|
(a) the agreement has no restrictive covenants
Pre-payment
6th issue - CPFL Paulista, CPFL Piratininga and RGE – At 2017, R$ 1,060,538 were paid of the 6th issue of debentures of the subsidiaries CPFL Paulista (R$ 681,279), CPFL Piratininga (R$ 67,610) and RGE (R$ 311,649), whose due date were July 2017 to July 2019.
5th issue of debentures - CPFL Energia – At 2017, R$ 460,194 of the Company’s 5th issue of debentures, with original maturities in October 2019 and 2020, were settled.
RESTRICTIVE COVENANTS
The debenture agreements are subject to certain restrictive covenants, including covenants that require the Company and its subsidiaries to maintain certain financial ratios within pre-established parameters. Moreover, these agreements contain restrictive non-financial covenants, which are complied with as per the last measurement period.
CPFL Energia, CPFL Paulista, CPFL Piratininga, RGE, RGE Sul, CPFL Geração, CPFL Brasil and Companhia Jaguari de Energia (“CPFL Santa Cruz”)
Maintenance, 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;
The definition of EBITDA for the Company, for covenant calculation purposes, takes into consideration mainly the consolidation of subsidiaries, associates and joint ventures based on the direct or indirect interest held by the Company in those companies (for both EBITDA and assets and liabilities).
CPFL Renováveis
The issues of debentures for the year ended December 31, 2017 include clauses that require subsidiary CPFL Renováveis to maintain the following financial ratios:
104
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
1st issue - CPFL Renováveis:
· Operating DSCR greater than or equal to 1.00;
· DSCR greater than or equal to 1.05;
· Net Debt to EBITDA ratio less than or equal to 5.4 in 2016, 4.6 in 2017, 4.0 in 2018 and 2019, and 3.75 from 2020 on;
· EBITDA to Net Finance Cost ratio greater than or equal to 1.75
As at December 31, 2017, the subsidiary obtained approval from debenture holders for not comply with the following ratios:
(i) Operating DSCR relating to the June 2017 calculation, through the General Meeting of Debenture Holders held on June 28, 2017;
(ii) Operating DSCR relating to the December 2017 calculation, through the General Meeting of Debenture Holders held on June 28, 2017;
2nd and 3rd issues - CPFL Renováveis
· Net Debt to EBITDA ratio less than or equal to 5.6 in 2015, 5.4 in 2016, 4.6 in 2017, 4.0 in 2018 and 2019, and 3.75 from 2020 on;
4thissue - CPFL Renováveis
· Maintenance of Net Debt to EBITDA ratio less than or equal to 5.4 for 2016, 4.6 for 2017 and 4.0 from 2018 on.
7thiissue - CPFL Renováveis
· Maintenance of Net Debt to EBITDA ratio verified at the end of each half of the year less than or equal to 3.75, calculated by the Company;
· Maintenance of EBITD to /Net Finance Cost ratio verified at the end of each half of the year greater than or equal to 2.25, calculated by the Company;
1st issue – indirect subsidiary PCH Holding 2
· DSCR of subsidiary Santa Luzia greater than or equal to 1.2 from September 2014;
· Net Debt to EBITDA ratio less than or equal to 5.4 in 2016, 4.6 in 2017, 4.0 in 2018 and 2019, and 3.75 from 2020 on;
2nd issue – Dobrevê Energia S/A (DESA)
· Net Debt to Dividend Received ratio less than or equal to 4.0 in 2016, 3.5 in 2017, and 3.5 in 2018;
CERAN
· Net Debt to EBITDA ratio less than or equal to 3.0, calculated semiannually.
Various borrowings of the direct and indirect subsidiaries and joint ventures were subject to early maturity in the event of changes in the Company’s shareholding structure, except if at least one of the following shareholders, Camargo Corrêa and Previ, remained directly or indirectly in the Company’s control block.
In view of the change of the Company’s shareholding control in January 2017, the Company negotiated previously with the Group’s creditors that they would not declare the early maturity of such debentures, which started including State Grid International Development Limited or any entity directly or indirectly controlled by State Grid Corporation of China as exception for not declaring the early maturity of the debt.
Failure to comply with the restrictions mentioned may result in default in relation to other contractual obligations (cross default), depending on each agreement.
The Group’s management monitors these ratios on a systematic and continuous basis to ensure that the conditions are complied with. In the opinion of the Group’s management, all covenants and clauses are properly complied at December 31, 2017.
(18 ) PRIVATE PENSION PLAN
The subsidiaries sponsor supplementary retirement and pension plans for their employees. The main characteristics of these plans are as follows:
18.1 Characteristics
CPFL Paulista
105
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
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. 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 the subsidiary.
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:
(i) 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. The subsidiary has full responsibility for covering the actuarial deficits of this Plan.
(ii) 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 the subsidiary and the participants.
(iii) 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 the subsidiary. 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 Fundação CEEE. 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.
RGE Sul
106
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Supplementary pension plans for its employees, former employees and related beneficiaries, managed by CEEE. The Single Plan is of the “defined benefit” type and is closed to new participants since February 2011. The Company’s contribution equates the contribution of the benefitted employees, in the proportion of one for one, including regarding the Fundação’s administrative costing plan. Currently the Itauprev plan is in effect, structured in the modality of defined contribution.
Companhia Jaguari de Energia (“CPFL Santa Cruz”)
Until December 31, 2017, the subsidiaries Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia and Companhia Luz e Força de Mococa had a private pension plan named CMSPREV, managed by IHPREV Fundo de Pensão, and subsidiary Companhia Luz e Força Santa Cruz had a benefits plan managed by BB Previdência - Fundo de Pensão from Banco do Brasil, both mostly structured as a defined contribution plan.
After December 31, 2017, with the grouping event mentioned in note 12.6.2, the company’s official plan is the CMSPREV, managed by IHPREV Fundo de Pensão. The same plan was maintained for employees that had the benefits plan managed by BB Previdência - Fundo de Pensão from Banco do Brasil.
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.
18.2 Movements in the defined benefit plans
|
December 31, 2017 | ||||||||||
|
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
|
RGE Sul |
|
Total | |||
Present value of actuarial obligations |
4,615,061 |
|
1,247,462 |
|
110,801 |
|
365,924 |
|
524,293 |
|
6,863,541 |
Fair value of plan's assets |
(3,925,061) |
|
(1,105,738) |
|
(94,378) |
|
(387,322) |
|
(446,670) |
|
(5,959,170) |
Present value of obligations (fair value of assets), net |
690,000 |
|
141,724 |
|
16,424 |
|
(21,399) |
|
77,623 |
|
904,369 |
Effect of asset ceiling |
- |
|
- |
|
- |
|
21,399 |
|
- |
|
21,399 |
Net actuarial liability recognized in the statement of financial position |
690,000 |
|
141,724 |
|
16,424 |
|
- |
|
77,623 |
|
925,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 | ||||||||||
|
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
|
RGE Sul |
|
Total | |||
Present value of actuarial obligations |
4,524,008 |
|
1,202,596 |
|
108,486 |
|
352,879 |
|
480,081 |
|
6,668,050 |
Fair value of plan's assets |
(3,723,563) |
|
(1,062,638) |
|
(89,533) |
|
(347,906) |
|
(405,251) |
|
(5,628,892) |
Net actuarial liability recognized in the statement of financial position |
800,445 |
|
139,958 |
|
18,953 |
|
4,972 |
|
74,830 |
|
1,039,158 |
The movements in the present value of the actuarial obligations and the fair value of the plan’s assets are as follows:
107
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
|
RGE Sul |
|
Total liability | |||
Present value of actuarial obligations at December 31, 2015 |
3,793,259 |
|
961,329 |
|
90,609 |
|
278,985 |
|
- |
|
5,124,182 |
Business combination |
- |
|
- |
|
- |
|
- |
|
474,710 |
|
474,710 |
Gross current service cost |
828 |
|
3,242 |
|
76 |
|
59 |
|
365 |
|
4,570 |
Interest on actuarial obligations |
467,872 |
|
121,158 |
|
11,184 |
|
35,211 |
|
8,469 |
|
643,894 |
Participants' contributions transferred during the year |
59 |
|
2,020 |
|
- |
|
319 |
|
165 |
|
2,563 |
Actuarial loss (gain): effect of changes in demographic assumptions |
- |
|
- |
|
- |
|
3,602 |
|
- |
|
3,602 |
Actuarial loss (gain): effect of changes in financial assumptions |
619,803 |
|
193,652 |
|
14,909 |
|
57,793 |
|
3,613 |
|
889,770 |
Benefits paid during the year |
(357,813) |
|
(78,805) |
|
(8,292) |
|
(23,090) |
|
(7,241) |
|
(475,241) |
Present value of actuarial obligations at December 31, 2016 |
4,524,008 |
|
1,202,596 |
|
108,486 |
|
352,879 |
|
480,081 |
|
6,668,050 |
Gross current service cost |
707 |
|
3,153 |
|
73 |
|
270 |
|
2,153 |
|
6,356 |
Interest on actuarial obligations |
476,613 |
|
127,561 |
|
11,431 |
|
37,395 |
|
50,927 |
|
703,927 |
Participants' contributions transferred during the year |
37 |
|
2,044 |
|
- |
|
302 |
|
990 |
|
3,373 |
Actuarial loss (gain): effect of changes in demographic assumptions |
225 |
|
328 |
|
14 |
|
326 |
|
16,490 |
|
17,383 |
Actuarial loss (gain): effect of changes in financial assumptions |
(6,993) |
|
(3,586) |
|
(372) |
|
(45) |
|
8,153 |
|
(2,843) |
Benefits paid during the year |
(379,536) |
|
(84,634) |
|
(8,831) |
|
(25,203) |
|
(34,501) |
|
(532,705) |
Present value of actuarial obligations at December 31, 2017 |
4,615,061 |
|
1,247,462 |
|
110,801 |
|
365,924 |
|
524,293 |
|
6,863,541 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
|
RGE SUL |
|
Total asset | |||
Fair value of actuarial assets at December 31, 2015 |
(3,355,589) |
|
(951,021) |
|
(80,332) |
|
(287,202) |
|
- |
|
(4,674,144) |
Business combination |
- |
|
- |
|
- |
|
- |
|
(415,621) |
|
(415,621) |
Expected return during the year |
(404,183) |
|
(115,607) |
|
(9,582) |
|
(35,632) |
|
(7,470) |
|
(572,474) |
Participants' contributions transferred during the year |
(59) |
|
(2,020) |
|
- |
|
(319) |
|
(165) |
|
(2,563) |
Sponsors' contributions |
(48,263) |
|
(13,405) |
|
(843) |
|
(9,441) |
|
(1,437) |
|
(73,389) |
Actuarial loss (gain): return on actuarial assets |
(273,282) |
|
(59,390) |
|
(7,068) |
|
(38,403) |
|
12,201 |
|
(365,942) |
Benefits paid during the year |
357,813 |
|
78,805 |
|
8,292 |
|
23,090 |
|
7,241 |
|
475,241 |
Fair value of actuarial assets at December 31, 2016 |
(3,723,563) |
|
(1,062,638) |
|
(89,533) |
|
(347,906) |
|
(405,251) |
|
(5,628,892) |
Expected return during the year |
(392,819) |
|
(113,470) |
|
(9,437) |
|
(37,412) |
|
(43,258) |
|
(596,396) |
Participants' contributions transferred during the year |
(37) |
|
(2,044) |
|
- |
|
(302) |
|
(990) |
|
(3,373) |
Sponsors' contributions |
(50,308) |
|
(17,296) |
|
(753) |
|
(7,296) |
|
(6,169) |
|
(81,822) |
Actuarial loss (gain): return on actuarial assets |
(137,870) |
|
5,076 |
|
(3,486) |
|
(19,610) |
|
(25,503) |
|
(181,393) |
Benefits paid during the year |
379,536 |
|
84,634 |
|
8,831 |
|
25,203 |
|
34,501 |
|
532,705 |
Fair value of actuarial assets at December 31, 2017 |
(3,925,061) |
|
(1,105,738) |
|
(94,378) |
|
(387,322) |
|
(446,670) |
|
(5,959,170) |
18.3Movements in recognized assets and liabilities
The movements in net liability are as follows:
|
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
|
RGE Sul |
|
Total liability | |||
Net actuarial liability at December 31, 2015 |
437,670 |
|
10,308 |
|
10,277 |
|
- |
|
- |
|
458,255 |
Business combination |
- |
|
- |
|
- |
|
- |
|
59,089 |
|
59,089 |
Expenses (income) recognized in the statement of profit or loss |
64,514 |
|
8,791 |
|
1,677 |
|
158 |
|
1,364 |
|
76,505 |
Sponsors' contributions transferred during the year |
(48,263) |
|
(13,405) |
|
(843) |
|
(9,442) |
|
(1,436) |
|
(73,388) |
Actuarial loss (gain): effect of changes in demographic assumptions |
- |
|
- |
|
- |
|
3,602 |
|
- |
|
3,602 |
Actuarial loss (gain): effect of changes in financial assumptions |
619,803 |
|
193,652 |
|
14,909 |
|
57,793 |
|
3,613 |
|
889,770 |
Actuarial loss (gain): return on actuarial assets |
(273,282) |
|
(59,390) |
|
(7,068) |
|
(38,403) |
|
12,201 |
|
(365,942) |
Effect of asset ceiling |
- |
|
- |
|
- |
|
(8,738) |
|
- |
|
(8,738) |
Net actuarial liability at December 31, 2016 |
800,445 |
|
139,958 |
|
18,954 |
|
4,972 |
|
74,830 |
|
1,039,158 |
Other contributions |
12,914 |
|
133 |
|
8 |
|
228 |
|
- |
|
13,284 |
Total liability |
813,359 |
|
140,091 |
|
18,962 |
|
5,200 |
|
74,830 |
|
1,052,442 |
|
|
|
|
|
|
|
|
|
|
|
|
Current |
26,082 |
|
6,437 |
|
460 |
|
228 |
|
|
|
33,209 |
Noncurrent |
787,276 |
|
133,653 |
|
18,502 |
|
4,972 |
|
|
|
1,019,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
|
RGE Sul |
|
Total liability | |||
Net actuarial liability at December 31, 2016 |
800,445 |
|
139,958 |
|
18,954 |
|
4,972 |
|
74,830 |
|
1,039,158 |
Expenses (income) recognized in the statement of profit or loss |
84,501 |
|
17,244 |
|
2,067 |
|
253 |
|
9,822 |
|
113,887 |
Sponsors' contributions transferred during the year |
(50,308) |
|
(17,296) |
|
(753) |
|
(7,296) |
|
(6,169) |
|
(81,822) |
Actuarial loss (gain): effect of changes in demographic assumptions |
225 |
|
328 |
|
14 |
|
326 |
|
16,490 |
|
17,383 |
Actuarial loss (gain): effect of changes in financial assumptions |
(6,993) |
|
(3,586) |
|
(372) |
|
(45) |
|
8,153 |
|
(2,843) |
Actuarial loss (gain): return on actuarial assets |
(137,870) |
|
5,076 |
|
(3,486) |
|
(19,610) |
|
(25,503) |
|
(181,393) |
Effect of asset ceiling |
- |
|
- |
|
- |
|
21,399 |
|
- |
|
21,399 |
Net actuarial liability at December 31, 2017 |
690,000 |
|
141,724 |
|
16,424 |
|
- |
|
77,623 |
|
925,768 |
Other contributions |
14,436 |
|
637 |
|
158 |
|
160 |
|
- |
|
15,391 |
Total liability |
704,436 |
|
142,361 |
|
16,582 |
|
160 |
|
77,623 |
|
941,160 |
|
|
|
|
|
|
|
|
|
|
|
|
Current |
45,606 |
|
14,015 |
|
986 |
|
160 |
|
33 |
|
60,801 |
Noncurrent |
658,829 |
|
128,346 |
|
15,595 |
|
0 |
|
77,589 |
|
880,360 |
18.4 Expected contributions and benefits
The expected contributions to the plans for 2018 are shown below:
108
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Expected contributions |
|
|
2018 |
CPFL Paulista |
86,703 |
CPFL Piratininga |
28,792 |
CPFL Geração |
1,826 |
RGE |
7,495 |
RGE Sul |
6,370 |
Total |
131,186 |
The expected benefits to be paid by the foundations in the next 10 years are shown below:
|
2018 |
2019 |
2020 |
2021 |
2022 to 2027 |
Total |
CPFL Paulista |
374,545 |
387,635 |
399,573 |
410,879 |
2,663,707 |
4,236,339 |
CPFL Piratininga |
84,231 |
88,618 |
92,230 |
96,650 |
667,185 |
1,028,914 |
CPFL Geração |
9,010 |
9,252 |
9,572 |
9,829 |
63,274 |
100,937 |
RGE |
26,223 |
27,396 |
28,545 |
29,487 |
200,079 |
311,730 |
RGE Sul |
34,547 |
36,367 |
38,047 |
39,680 |
274,712 |
423,353 |
Total |
528,556 |
549,268 |
567,967 |
586,525 |
3,868,957 |
6,101,273 |
At December 31, 2017, the average duration of the defined benefit obligation was 9.2 years for CPFL Paulista, 10.8 years for CPFL Piratininga, 9.4 years for CPFL Geração, 10.1 years for RGE and 11.0 years for RGE Sul.
18.5 Recognition of private pension plan income and expense
The actuary’s estimate of the expenses and/or income to be recognized in 2018 and the income/expense recognized in 2017 and 2016 are as follows:
|
2018 estimated | ||||||||||
|
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
|
RGE Sul |
|
Total | |||
Service cost |
835 |
|
4,365 |
|
78 |
|
175 |
|
2,790 |
|
8,243 |
Interest on actuarial obligations |
421,083 |
|
114,628 |
|
10,109 |
|
33,552 |
|
48,218 |
|
627,590 |
Expected return on plan assets |
(359,588) |
|
(102,621) |
|
(8,634) |
|
(35,950) |
|
(41,166) |
|
(547,959) |
Effect of asset ceiling |
- |
|
- |
|
- |
|
2,035 |
|
- |
|
2,035 |
Total income |
62,330 |
|
16,372 |
|
1,553 |
|
(188) |
|
9,842 |
|
89,909 |
|
|
|
|
|
|
|
|
|
|
2017 actual | ||||||||||
|
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
|
RGE Sul |
|
Total | |||
Service cost |
707 |
|
3,153 |
|
73 |
|
270 |
|
2,153 |
|
6,356 |
Interest on actuarial obligations |
476,613 |
|
127,561 |
|
11,431 |
|
37,395 |
|
50,927 |
|
703,927 |
Expected return on plan assets |
(392,819) |
|
(113,470) |
|
(9,437) |
|
(37,412) |
|
(43,258) |
|
(596,396) |
Total income |
84,501 |
|
17,244 |
|
2,067 |
|
253 |
|
9,822 |
|
113,887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 actual | ||||||||||
|
CPFL Paulista |
CPFL Piratininga |
CPFL Geração |
RGE |
|
RGE Sul* |
|
Total | |||
Service cost |
828 |
|
3,242 |
|
76 |
|
59 |
|
365 |
|
4,570 |
Interest on actuarial obligations |
467,872 |
|
121,158 |
|
11,184 |
|
35,211 |
|
8,469 |
|
643,894 |
Expected return on plan assets |
(404,184) |
|
(115,608) |
|
(9,582) |
|
(35,632) |
|
(7,470) |
|
(572,476) |
Effect of asset ceiling |
- |
|
- |
|
- |
|
520 |
|
- |
|
520 |
Total income |
64,514 |
|
8,791 |
|
1,677 |
|
158 |
|
1,364 |
|
76,505 |
|
|
|
|
|
|
|
|
|
| ||
(*) The expenses and income presented for RGE Sul are related to November and December 2016 |
|
|
The main assumptions taken into consideration in the actuarial calculation at the end of the reporting period were as follows:
109
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
|
CPFL Paulista, CPFL Geração and CPFL Piratininga |
RGE |
|
RGE Sul | |||||||
|
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
|
December 31, 2017 |
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominal discount rate for actuarial liabilities: |
|
9.51% p.a. |
|
10.99% p.a. |
|
9.51% p.a. |
|
10.99% p.a. |
|
9.51% p.a. |
|
10.99% p.a. |
Nominal return rate on plan assets: |
|
9.51% p.a. |
|
10.99% p.a. |
|
9.51% p.a. |
|
10.99% p.a. |
|
9.51% p.a. |
|
10.99% p.a. |
Estimated rate of nominal salary increase: |
|
6.08% p.a.** |
|
7.00% p.a. |
|
6.13% p.a. |
|
8.15% p.a. |
|
6.10% a.a. |
|
7.29% p.a. |
Estimated rate of nominal benefits increase: |
|
4.00% p.a. |
|
5.00% p.a. |
|
4.00% p.a. |
|
5.00% p.a. |
|
4.00% p.a. |
|
5.00% p.a. |
Estimated long-term inflation rate (basis for determining the nominal rates above) |
4.00% p.a. |
|
5.00% p.a. |
|
4.00% p.a. |
|
5.00% p.a. |
|
4.00% p.a. |
|
5.00% p.a. | |
General biometric mortality table: |
|
AT-2000 (-10) |
|
AT-2000 (-10) |
|
BREMS sb v.2015 |
|
BREMS sb v.2015 |
|
BREMS sb v.2015 |
|
AT-2000 |
Biometric table for the onset of disability: |
|
Low Light |
|
Low Light |
|
Medium Light |
|
Medium Light |
|
Medium Light |
|
Medium Light |
Expected turnover rate: |
|
ExpR_2012 |
|
ExpR_2012* |
|
Null |
|
Null |
|
Null |
|
Null |
Likelihood of reaching retirement age: |
|
100% when a beneficiary of the plan first becomes eligible |
100% when a beneficiary of the plan first becomes eligible |
100% one year after when a beneficiary of the plan first becomes eligible |
100% one year after when a beneficiary of the plan first becomes eligible |
100% one year after when a beneficiary of the plan first becomes eligible |
100% one year after when a beneficiary of the plan first becomes eligible | |||||
(*) FUNCESP experience, with aggravation of 40% |
|
|
|
|
|
|
|
|
|
|
|
|
(**) Estimated rate of nominal salary increase of 6.39% p.a. for CPFL Piratininga |
|
|
|
|
|
|
|
|
|
|
18.6 Plan assets
The following tables show the allocation (by asset segment) of the assets of the Group CPFL pension plans, at December 31, 2017 and 2016 managed by Fundação CESP and Fundação CEEE. The tables also show the distribution of the guarantee resources established as target for 2018, obtained in light of the macroeconomic scenario in December 2017.
Assets managed by the plans are as follows:
|
|
Assets managed by Fundação CESP |
|
Assets managed by Fundação CEEE | |||||||||||
|
|
CPFL Paulista and CPFL Geração |
CPFL Piratininga |
|
RGE |
|
RGE Sul | ||||||||
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
2016 |
Fixed rate |
|
77% |
|
79% |
|
80% |
|
83% |
|
79% |
|
76% |
|
78% |
74% |
Federal government bonds |
|
53% |
|
60% |
|
49% |
|
56% |
|
64% |
|
61% |
|
65% |
60% |
Corporate bonds (financial institutions) |
|
4% |
|
6% |
|
7% |
|
10% |
|
9% |
|
8% |
|
8% |
8% |
Corporate bonds (non financial institutions) |
|
1% |
|
1% |
|
1% |
|
1% |
|
3% |
|
4% |
|
3% |
4% |
Multimarket funds |
|
2% |
|
1% |
|
2% |
|
1% |
|
2% |
|
3% |
|
1% |
3% |
Other fixed income investments |
|
17% |
|
12% |
|
22% |
|
15% |
|
- |
|
- |
|
- |
- |
Variable income |
|
15% |
|
14% |
|
14% |
|
12% |
|
18% |
|
15% |
|
18% |
16% |
CPFL Energia's shares |
|
- |
|
8% |
|
- |
|
6% |
|
- |
|
- |
|
- |
- |
Investment funds - shares |
|
15% |
|
6% |
|
14% |
|
7% |
|
18% |
|
15% |
|
18% |
16% |
Structured investments |
|
3% |
|
1% |
|
3% |
|
1% |
|
1% |
|
8% |
|
1% |
8% |
Equity funds |
|
- |
|
- |
|
- |
|
- |
|
1% |
|
7% |
|
1% |
7% |
Real estate funds |
|
- |
|
- |
|
- |
|
- |
|
1% |
|
1% |
|
1% |
1% |
Multimarket fund |
|
3% |
|
1% |
|
3% |
|
1% |
|
- |
|
- |
|
- |
- |
Total quoted in an active market |
|
94% |
|
94% |
|
97% |
|
97% |
|
98% |
|
98% |
|
97% |
98% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate |
|
3% |
|
3% |
|
2% |
|
2% |
|
1% |
|
1% |
|
1% |
1% |
Transactions with participants |
|
1% |
|
1% |
|
2% |
|
2% |
|
2% |
|
1% |
|
2% |
2% |
Other investments |
|
1% |
|
1% |
|
- |
|
- |
|
- |
|
- |
|
- |
- |
Escrow deposits and others |
|
1% |
|
1% |
|
- |
|
- |
|
- |
|
- |
|
- |
- |
Total not quoted in an active market |
|
6% |
|
6% |
|
3% |
|
3% |
|
2% |
|
2% |
|
3% |
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$ 417,058 at December 31, 2016.
|
Target for 2018 | ||||||
|
Fundação CESP |
|
Fundação CEEE | ||||
|
CPFL Paulista and CPFL Geração |
CPFL Piratininga |
|
RGE |
|
RGE Sul | |
Fixed income investments |
72.80% |
|
75.41% |
|
80.50% |
|
80.00% |
Variable income investments |
18.67% |
|
17.11% |
|
16.00% |
|
16.00% |
Real estate |
3.18% |
|
1.46% |
|
0.50% |
|
0.50% |
Transactions with participants |
1.32% |
|
1.61% |
|
1.50% |
|
2.00% |
Structured investments |
2.56% |
|
2.70% |
|
1.50% |
|
1.50% |
Investments abroad |
1.47% |
|
1.71% |
|
0.00% |
|
0.00% |
|
100.00% |
|
100.00% |
|
100.00% |
|
100.00% |
The allocation target for 2018 was based on the recommendations for allocation of assets made at the end of 2017 by Fundação CESP and Fundação CEEE, in their Investment Policy. This target may change at any time during 2018, 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. Fundação CESP and Fundação CEEE conduct studies of Asset Liability Management at least once
110
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
a year, for a horizon longer than ten years. The ALM study also represents an important tool for the liquidity risk management of the pension plans since it considers the payment flow of benefits versus the assets considered liquid.
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.
18.7 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 lower (higher) and if general biometric mortality table were to be softened (aggravated) in one year:
|
|
Increase (decrease) |
CPFL Paulista |
|
CPFL Piratininga |
CPFL Geração |
|
RGE |
|
RGE Sul |
|
Total | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominal discount (p.a.)* |
|
-0,25 p.p. |
|
107,820 |
|
34,637 |
|
2,652 |
|
9,433 |
|
14,800 |
|
169,342 |
|
|
+0,25 p.p. |
|
(103,527) |
|
(33,051) |
|
(2,542) |
|
(9,027) |
|
(14,103) |
|
(162,250) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General biometric mortality table** |
|
+1 year |
|
(101,296) |
|
(21,786) |
|
(2,334) |
|
(6,452) |
|
(9,244) |
|
(141,112) |
|
|
-1 year |
|
99,533 |
|
21,195 |
|
2,296 |
|
6,273 |
|
8,990 |
|
138,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* The assumption considered in the actuarial report for the nominal discount rate was 9.51% p.a. for all companies. The projected rates are increased or decreased | ||||||||||||||
by 0.25 p.p. to 9.26% p.a. and 9.76% p.a.. |
|
|
|
|
|
|
|
|
|
|
|
| ||
** The assumption considered in the actuarial report for the mortality table was AT-2000 (-10) for CPFL Paulista, CPFL Piratininga and CPFL Geração; BREMS sb v.2015 | ||||||||||||||
for RGE and RGE Sul. The projections were performed with 1 year of aggravation or softening on the respective mortality tables. |
|
|
|
|
18.8 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 CEEE 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 CEEE’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.
111
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 19 ) REGULATORY CHARGES
|
Consolidated | ||
|
December 31, 2017 |
December 31, 2016 | |
Financial compensation for the use of water resources |
1,256 |
|
1,385 |
Global reversal reserve - RGR |
17,545 |
|
17,469 |
ANEEL inspection fee -TFSEE |
2,061 |
|
2,044 |
Energy development account - CDE |
262,213 |
|
309,117 |
Tariff flags and others |
298,525 |
|
36,064 |
Total |
581,600 |
|
366,078 |
Energy development account – CDE: refers to the (i) annual CDE quota for the year 2017 in the amount of R$ 138,135 (R$ 164,681 at December 31, 2016); (ii) quota intended for the refund of the amount contributed to the CDE account for the period from January 2013 to January 2014 totaling R$ 47,429 (R$ 44,622 at December 31, 2016); and (iii) quota intended for the refund of the amount contributed to the Regulated Contracting Environment (ACR) account for the period from February to December 2014, in the amount of R$ 76,649 (R$ 99,814 at December 31, 2016). In 2017 the subsidiaries matched the payables relating to the CDE account with the receivables relating to the CDE account (note 11) in the amount of R$ 238,510.
Tariff flags and others: refer basically to the amount to be passed on to the Centralizing Account for Tariff Flag Resources (“CCRBT”) ”), the related amount receivable was recognized through the issuance of electricity bills (note 25.4).
( 20 ) TAXES, FEES AND CONTRIBUTIONS
|
Consolidated | ||
|
December 31, 2017 |
December 31, 2016 | |
Current |
|
|
|
IRPJ (corporate income tax) |
59,026 |
|
42,793 |
CSLL (social contribution on net income) |
22,430 |
|
14,434 |
Income tax and social contribution |
81,457 |
|
57,227 |
|
|
|
|
ICMS (State VAT) |
403,492 |
|
416,096 |
PIS (tax on revenue) |
32,486 |
|
28,759 |
COFINS (tax on revenue) |
141,757 |
|
126,939 |
Others |
51,111 |
|
52,522 |
Other taxes, fees and contributions |
628,846 |
|
624,316 |
|
|
|
|
Total current |
710,303 |
|
681,544 |
|
|
|
|
Noncurrent |
|
|
|
PIS (Tax on Revenue) |
18,839 |
|
26,814 |
112
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 21 ) PROVISION FOR TAX, CIVIL AND LABOR RISKS AND ESCROW DEPOSITS
|
Consolidated | ||||||
|
December 31, 2017 |
|
December 31, 2016 | ||||
|
Provision for tax, civil and labor risks |
Escrow Deposits |
Provision for tax, civil and labor risks |
Escrow Deposits | |||
|
|
|
|
|
|
|
|
Labor |
224,258 |
|
122,194 |
|
222,001 |
|
110,147 |
|
|
|
|
|
|
|
|
Civil |
291,388 |
|
97,100 |
|
236,915 |
|
114,214 |
Tax |
|
|
|
|
|
|
|
FINSOCIAL |
33,473 |
|
95,903 |
|
32,372 |
|
90,951 |
Income Tax |
150,020 |
|
382,884 |
|
142,790 |
|
150,439 |
Others |
163,798 |
|
140,289 |
|
113,227 |
|
84,091 |
|
347,291 |
|
619,077 |
|
288,389 |
|
325,481 |
|
|
|
|
|
|
|
|
Others |
98,196 |
|
1,620 |
|
85,971 |
|
229 |
|
|
|
|
|
|
|
|
Total |
961,134 |
|
839,990 |
|
833,276 |
|
550,072 |
The movements in the provision for tax, civil, labor and other risks are shown below:
|
Consolidated | ||||||||||||
|
December 31, 2016 |
Additions |
|
Reversals |
|
Payments |
|
Monetary adjustment |
Business combinations |
December 31, 2017 | |||
Labor |
222,001 |
|
98,267 |
|
(39,052) |
|
(78,056) |
|
26,915 |
|
(5,817) |
|
224,258 |
Civil |
236,915 |
|
108,147 |
|
(38,074) |
|
(115,162) |
|
18,298 |
|
81,264 |
|
291,388 |
Tax |
288,389 |
|
34,005 |
|
(7,188) |
|
(1,055) |
|
20,351 |
|
12,791 |
|
347,291 |
Others |
85,971 |
|
9,883 |
|
(2,508) |
|
(12,514) |
|
5,391 |
|
11,974 |
|
98,196 |
Total |
833,276 |
|
250,302 |
|
(86,822) |
|
(206,788) |
|
70,954 |
|
100,212 |
|
961,134 |
The provision for tax, civil, labor and other risks was based on the assessment of the risks of losing the lawsuits to which the Group is part, where the likelihood of loss is probable in the opinion of the outside legal counselors and the Management of the Group.
The 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 Company's 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$ 147,100 (R$ 139,957 at December 31, 2016) 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.
The line item of “others” refers mainly to lawsuits involving regulatory matters.
Possible losses
113
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
The Group is part to other lawsuits in which Management, supported by its external legal counselors, believes that the chances of a successful outcome are possible, that is, it is more likely than not that there will be no disbursement for these cases due to a solid defensive position in these cases. It is not yet possible to predict the outcome of the courts’ decisions or any other decisions in similar proceedings considered probable or remote.
The claims relating to possible losses at December 31, 2017 and 2016 were as follows:
|
Consolidated |
| |||
|
December 31, 2017 |
December 31, 2016 |
| ||
|
|
|
|
|
|
Labor |
686,538 |
|
668,005 |
|
Work accidents, risk premium for dangerousness at workplace and overtime |
Civil |
1,178,671 |
|
1,004,279 |
|
Personal injury, environmental impacts and overfed tariffs |
Tax |
5,100,151 |
|
4,611,077 |
|
ICMS, FINSOCIAL, PIS and COFINS, and Income tax |
Regulatory |
140,695 |
|
93,827 |
|
Technical, commercial and economic-financial supervisions |
Total |
7,106,055 |
|
6,377,188 |
|
|
Tax – there is a discussion about the deductibility for income tax of the expense recognized in 1997 relating to the commitment assumed in regard to the pension plan of employees of the subsidiary CPFL Paulista with Fundação CESP in the estimated amount of R$ 1,224,660. In January 2016, the subsidiary obtained court decisions that authorized the replacement of the escrow deposits related to these lawsuits with financial guarantees (letter of guarantee and performance bond), for which the withdrawals on behalf of the subsidiary occurred in 2016. There is an appeal by the Office of Attorney-General of the National Treasury in both cases, without suspensive effect, which is pending a decision of the Federal Regional Court. Concurrently, in February 2017, there was a decision for the refund of the amount related to interest incurred on one of the deposits withdrawn. Therefore, the subsidiary made an escrow deposit of R$ 206,874.
Additionally, in August 2016, the subsidiary CPFL Renováveis received a tax infringement notice in the amount of R$ 285,537 relating to the collection of Withholding Income Tax - IRRF on remuneration of capital gain incurred by parties resident and/or domiciled abroad, arising from the transaction of sale of Jantus SL, in December 2011, which the Company’s management, supported by the opinion of its outside legal counselors, classified the likelihood of a favorable outcome as possible.
The subsidiary CPFL Geração, in December 2016, received two tax infringement notices that, summed up, total R$ 316,372 relating to the collection of Corporate Income Tax - IRPJ and Social Contribution on Profit – CSLL relating to calendar year 2011, calculated on the alleged capital gain identified on the acquisition of ERSA Energias Renováveis S.A. and recording of differences from the fair value remeasurement of SMITA Empreendimentos e Participações S.A., company acquired in a downstream merger, which the Company’s management, supported by its outside legal counselors, classified the likelihood of a favorable outcome as possible.
As regards labor contingencies, the Group 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 final decision by the STF, the index currently adopted by the Labor Court (“TR”) remains valid, which has been acknowledged by the TST (Superior Labor Court) in recent decisions. Accordingly, the management of the Group 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. Furthermore, in accordance with Law 13,467, of November 11, 2017, TR is the index for inflation adjustment used by the Labor Court since the date the law became effective.
Based on the opinion of their outside legal counselors, the Group’s management believes that the amounts provided for reflect the current best estimate.
114
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 22 ) OTHER PAYABLES
|
Consolidated | ||||||
|
Current |
|
Noncurrent | ||||
|
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 | |||
Consumers and concessionaires |
93,068 |
|
73,864 |
|
44,473 |
|
44,711 |
Energy efficiency program - PEE |
186,621 |
|
257,622 |
|
110,931 |
|
58,798 |
Research & Development - P&D |
103,308 |
|
75,655 |
|
68,780 |
|
55,272 |
EPE / FNDCT / PROCEL |
15,612 |
|
12,928 |
|
- |
|
- |
Reversion fund |
- |
|
- |
|
17,750 |
|
17,750 |
Advances |
300,214 |
|
163,054 |
|
22,255 |
|
8,029 |
Tariff discounts - CDE |
25,040 |
|
8,891 |
|
- |
|
- |
Provision for socio environmental costs |
16,360 |
|
13,703 |
|
107,814 |
|
61,828 |
Payroll |
20,747 |
|
16,951 |
|
- |
|
- |
Profit sharing |
80,518 |
|
56,215 |
|
16,273 |
|
11,400 |
Collection agreements |
72,483 |
|
69,793 |
|
- |
|
- |
Guarantees |
- |
|
- |
|
5,959 |
|
44,140 |
Business combination |
6,927 |
|
9,492 |
|
- |
|
- |
Others |
40,408 |
|
49,454 |
|
32,654 |
|
7,364 |
Total |
961,306 |
|
807,623 |
|
426,889 |
|
309,292 |
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. The noncurrent asset refers to the sale made by the indirect subsidiary RGE Sul in the period from September 1, 2000 to December 31, 2002 (note 15).
Research & 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 & development and energy efficiency programs. These amounts are subject to adjustment for inflation at the SELIC rate, through the date of their realization.
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.
Tariff discounts – CDE: refer to the difference between the tariff discount granted to consumers and the amounts received via the CDE.
Profit sharing: mainly comprised by:
(i) in accordance with a collective labor agreement, the Group introduced an employee profit-sharing program, based on the achievement of operating and financial targets previously established;
(ii) Long-Term Incentive Program: refers to the Long-Term Incentive Plan for the Group’s Executives, approved by the Board of Directors, which consists in an incentive in financial resources based on salary multiples and that are driven by the company’s results and average performance in the three fiscal years after each concession.
( 23 ) EQUITY
The shareholders’ interest in the Company’s Equity at December 31, 2017 and 2016 is shown below:
115
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
|
Number of shares | ||||||
|
|
December 31, 2017 |
|
December 31, 2016 | ||||
Shareholders |
|
Common shares |
|
Interest % |
|
Common shares |
|
Interest % |
State Grid Brazil Power Participações S.A. |
|
730,435,698 |
|
71.76% |
|
- |
|
0.00% |
Caixa de Previdência dos Funcionários do Banco do Brasil - Previ |
|
- |
|
0.00% |
|
299,787,559 |
|
29.45% |
Camargo Correa S.A. |
|
27,435 |
|
0.00% |
|
5,897,311 |
|
0.58% |
ESC Energia S.A. |
|
234,086,204 |
|
23.00% |
|
234,086,204 |
|
23.00% |
Bonaire Participações S.A. |
|
- |
|
0.00% |
|
1,249,386 |
|
0.12% |
Energia São Paulo FIA |
|
- |
|
0.00% |
|
35,145,643 |
|
3.45% |
Fundação Petrobras de Seguridade Social - Petros |
|
- |
|
0.00% |
|
28,056,260 |
|
2.76% |
Fundação Sistel de Seguridade Social |
|
- |
|
0.00% |
|
37,070,292 |
|
3.64% |
Fundação Sabesp de Seguridade Social - Sabesprev |
|
- |
|
0.00% |
|
696,561 |
|
0.07% |
Fundação CESP |
|
- |
|
0.00% |
|
51,048,952 |
|
5.02% |
BNDES Participações S.A. |
|
- |
|
0.00% |
|
68,592,097 |
|
6.74% |
Antares Holdings Ltda. |
|
- |
|
0.00% |
|
16,967,165 |
|
1.67% |
Brumado Holdings Ltda. |
|
- |
|
0.00% |
|
36,497,075 |
|
3.59% |
Members of the Executive Board |
|
189 |
|
0.00% |
|
34,250 |
|
0.00% |
Other shareholders |
|
53,365,220 |
|
5.24% |
|
202,785,991 |
|
19.92% |
Total |
|
1,017,914,746 |
|
100.00% |
|
1,017,914,746 |
|
100.00% |
23.1 Changes in shareholding structure and Public Offering of Shares
On January 23, 2017, the Company received a correspondence from State Grid Brazil Power Participações S.A.. (“State Grid Brazil”) informing that on that date the Share Purchase Agreement between State Grid Brazil, Camargo Corrêa S.A., Caixa de Previdência dos Funcionários do Banco do Brasil – PREVI, Fundação CESP, Fundação Sistel de Seguridade Social, Fundação Petrobras de Seguridade Social – PETROS, Fundação SABESP de Seguridade Social — SABESPREV, and certain other parties, had been signed.
After finalizing the transaction, State Grid Brazil became the parent company of CPFL Energia with 54.64% (556,164,817 shares, direct or indirect) of the Company’s voting and total capital. With the transaction, State Grid Brazil became the only controlling shareholder of the Company, and the Shareholders’ Agreement dated March 22, 2002 signed among the former shareholders was terminated.
At the Company’s extraordinary general meeting held on March 27, 2017, the following resolutions were made (i) the selection of Credit Suisse (Brasil) S.A. to determine the Company’s economic value; (ii) the cancelation of the Company’s listing with the CVM as category “A”, and its conversion into category “B”; and (iii) withdrawal of the Company from the Listing Segment of Novo Mercado.
State Grid Brazil informed, through Significant Events:
(i) on February 16, 2017, that it would conduct a public offering for acquisition of all the common shares held by the remaining shareholders of the Company (“Public Offering for Acquisition of Shares through Sale of Control”) and, on July 7, 2017, that it had decided to proceed only with the Public Offering for Acquisition of Shares through sale of control of the Company and through indirect sale of control of CPFL Renováveis;
(ii) on October 30 and 31, 2017, that CVM had formally approved all relevant documents and the proceeding with the Public Offering for Acquisition of Shares through Sale of Control and, as a result of the approval, State Grid Brazil published on October 31, 2017 the Public Offering Notice with the related terms and conditions.
In a Significant Event Notice and Communication to the Market on November 30 and December 5, 2017, respectively, the Company informed that it had successfully conducted the public offering auction on the trading system of B3 S.A.– Brasil, Bolsa, Balcão (“Auction”). As a result of the auction, State Grid Brazil acquired 408,357,085 common shares of the Company, representing 88.44% of the total shares object of the Public Offering and 40.12% of the Company’s capital. The common shares were acquired for the price of R$ 27.69, totaling R$ 11,307,408. State Grid Brazil started holding, jointly with ESC Energia S.A., 964,521,902 common shares of the Company, increasing its joint interest from 54.64% to 94.75% of the Company’s total capital.
23.2 Capital reserve
Refers basically to: (i) record arising from the business combination of CPFL Renováveis in the amount of R$ 228,322 in 2011, (ii) effect of the public offering of shares of subsidiary CPFL Renováveis in 2013, 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, amounting to R$ 180,297 in 2014, and (iv) other movements with no change of control amounting to R$87. In accordance with ICPC 09 (R2) and IFRS 10 / CPC 36, these effects were recognized as transactions between shareholders, directly in Equity.
116
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
23.3 Earnings reserve
Comprised of:
(i) Legal reserve, amounting to R$ 798,090;
(ii) Statutory reserve – concession financial asset: distribution subsidiaries recognize in profit or loss the adjustment to the expected cash flow from the concession financial asset, its realization will occur only at the time of the write-off of the concession financial asset arising from disposal or corporate restructuring or at the time of the indemnification (at the end of the concession). As result, the Company recognized a statutory reserve – concession financial asset for these amounts, supported by article 194 of Law 6,404/76, until the financial realization of these amounts. The closing balance as at December 31, 2017 is R$ 826,601 (R$ 702,928 as at December 31, 2016).
23.4 Accumulated comprehensive income
Accumulated comprehensive income is comprised of:
(i) Deemed cost: Refers to the recognition of the fair value adjustment of the deemed cost of the generating plants' property, plant and equipment, of R$ 405,840;
(ii) Private pension plan: the debt balance of R$ 570,346 (net of income taxes) refers to the effects recognized directly in comprehensive income, in accordance with IAS 19 / CPC 33 (R2).
23.5Dividends
At the Board of Directors’ Meeting held on January 5, 2017, approval was given for the declaration of interim dividend for 2016 in the amount of R$ 7,820.
The Company also declared in 2017 R$ 280,191 relating to minimum mandatory dividend, as set forth by Law 6,404/76, and for each share the amount of R$ 0. 275259517 was attributed.
In 2017, the Company paid R$ 220,966 relating to the dividend for 2016.
23.6 Allocation of profit for the year
The Company’s bylaws establish the payment of minimum dividend of 25% of the profit for the year, adjusted as required by law, to the holders of its shares.
The proposal for allocation of profit for the year is shown in the table below:
|
2017 |
Net income for the year - parent company |
1,179,750 |
Realization of comprehensive income |
25,873 |
Prescribed dividends |
3,768 |
Net income considered for allocation |
1,209,391 |
Legal reserve |
(58,988) |
Bylaws reserve - concession financial asset |
(123,673) |
Bylaws reserve - working capital reinforcement |
(746,541) |
Mandatory minimum dividends |
(280,191) |
Proposed additional dividends |
- |
For this year, considering the current macro scenario with the incipient economic recovery and, also considering the uncertainties regarding the hydrology, the Company’s management is proposing the allocation of R$ 746,541 to the statutory reserve - working capital improvement.
117
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 24 ) EARNINGS PER SHARE
Earnings per share – basic and diluted
The calculation of the basic and diluted earnings per share as at December 31, 2017 and 2016 was based on the profit attributable to controlling shareholders and the weighted average number of common shares outstanding during the reporting years. Specifically for the calculation of diluted earnings per share, the dilutive effects of instruments convertible into shares are considered, as shown below:
|
|
2017 |
|
2016 |
|
Numerator |
|
|
|
|
|
Profit attributable to controlling shareholders |
|
1,179,750 |
|
900,885 |
|
Denominator |
|
|
|
|
|
Weighted average number of shares held by shareholders |
|
1,017,914,746 |
|
1,017,914,746 |
(*) |
Earnings per share - basic |
|
1.16 |
|
0.89 |
|
Numerator |
|
|
|
|
|
Profit attributable to controlling shareholders |
|
1,179,750 |
|
900,885 |
|
Dilutive effect of convertible debentures of subsidiary CPFL Renováveis |
(11,966) |
(16,153) |
|||
Profit attributable to controlling shareholders |
|
1,167,784 |
|
884,731 |
|
Denominator |
|
|
|
|
|
Weighted average number of shares held by shareholders |
|
1,017,914,746 |
|
1,017,914,746 |
(*) |
Earnings per share - diluted |
|
1.15 |
|
0.87 |
|
(*)Considers the event that occurred on April 29, 2016, related to the capital increase through issue of 24,900,531 shares as bonus. 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
The dilutive effect of the numerator in the calculation of diluted earnings per share considers the dilutive effects of the debentures convertible into shares issued by subsidiaries of the indirect subsidiary CPFL Renováveis. The effects were calculated based on the assumption that these debentures would be converted into common shares of the subsidiaries at the beginning of each year.
118
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 25 ) NET OPERATING REVENUE
|
Consolidated | ||||||||||
|
Number of Consumers |
|
In GWh |
|
R$ thousand | ||||||
Revenue from Electric Energy Operations |
2017 |
|
2016 (*) |
|
2017 |
|
2016 (*) |
|
2017 |
|
2016 |
Consumer class |
|
|
|
|
|
|
|
|
|
|
|
Residential |
8,330,237 |
|
8,174,700 |
|
19,122 |
|
16,473 |
|
11,663,084 |
|
10,367,415 |
Industrial |
59,825 |
|
61,112 |
|
14,661 |
|
13,022 |
|
5,095,840 |
|
5,281,978 |
Commercial |
545,095 |
|
551,171 |
|
10,220 |
|
9,720 |
|
5,498,867 |
|
5,431,926 |
Rural |
359,106 |
|
355,586 |
|
3,762 |
|
2,474 |
|
1,173,569 |
|
816,684 |
Public administration |
60,639 |
|
61,208 |
|
1,456 |
|
1,271 |
|
787,967 |
|
690,389 |
Public lighting |
11,230 |
|
11,073 |
|
1,964 |
|
1,746 |
|
654,950 |
|
580,229 |
Public services |
9,790 |
|
9,649 |
|
2,157 |
|
1,840 |
|
978,286 |
|
901,662 |
(-) Adjustment of revenues from excess demand and excess reactive power |
- |
|
- |
|
- |
|
- |
|
(65,991) |
|
(72,129) |
Billed |
9,375,922 |
|
9,224,499 |
|
53,342 |
|
46,546 |
|
25,786,572 |
|
23,998,155 |
Own consumption |
- |
|
- |
|
34 |
|
32 |
|
- |
|
- |
Unbilled (net) |
- |
|
- |
|
- |
|
- |
|
(89,575) |
|
50,441 |
(-) Reclassification to Network Usage Charge - TUSD - Captive Consumers |
- |
|
- |
|
- |
|
- |
|
(9,273,840) |
|
(9,055,188) |
Electricity sales to final consumers |
9,375,922 |
|
9,224,499 |
|
53,376 |
|
46,578 |
|
16,423,157 |
|
14,993,408 |
|
|
|
|
|
|
|
|
|
|
|
|
Furnas Centrais Elétricas S.A. |
|
|
|
|
3,026 |
|
3,034 |
|
565,592 |
|
533,855 |
Other concessionaires and licensees |
|
|
|
|
16,337 |
|
12,252 |
|
3,240,571 |
|
2,371,091 |
(-) Reclassification to Network Usage Charge - TUSD - Captive Consumers |
|
|
|
|
- |
|
- |
|
(56,528) |
|
(50,598) |
Spot market energy |
|
|
|
|
8,194 |
|
6,173 |
|
2,340,463 |
|
641,744 |
Electricity sales to wholesalers |
|
|
|
|
27,557 |
|
21,459 |
|
6,090,098 |
|
3,496,092 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue due to Network Usage Charge - TUSD - Captive Consumers |
|
|
|
|
|
|
|
|
9,330,368 |
|
9,105,786 |
Revenue due to Network Usage Charge - TUSD - Free Consumers |
|
|
|
|
|
|
|
|
2,137,566 |
|
2,057,327 |
(-) Adjustment of revenues from excess demand and excess reactive power |
|
|
|
|
|
|
|
|
(21,861) |
|
(17,908) |
Revenue from construction of concession infrastructure |
|
|
|
|
|
|
|
|
2,073,423 |
|
1,354,023 |
Sector financial asset and liability (Note 8) |
|
|
|
|
|
|
|
|
1,900,837 |
|
(2,094,695) |
Concession financial asset - Adjustment of expected cash flow (Note 10) |
|
|
|
|
|
|
|
|
204,443 |
|
186,148 |
Energy development account - CDE - Low-income, Tariff discounts - judicial injunctions ,and other tariff discounts |
|
|
|
|
|
|
|
|
1,419,128 |
|
1,266,027 |
Other revenues and income |
|
|
|
|
|
|
|
|
496,340 |
|
438,377 |
Other operating revenues |
|
|
|
|
|
|
|
|
17,540,244 |
|
12,295,084 |
Total gross operating revenue |
|
|
|
|
|
|
|
|
40,053,498 |
|
30,784,584 |
|
|
|
|
|
|
|
|
|
|
|
|
Deductions from operating revenues |
|
|
|
|
|
|
|
|
|
|
|
ICMS |
|
|
|
|
|
|
|
|
(5,455,718) |
|
(4,935,068) |
PIS |
|
|
|
|
|
|
|
|
(603,050) |
|
(471,836) |
COFINS |
|
|
|
|
|
|
|
|
(2,777,626) |
|
(2,172,777) |
ISS |
|
|
|
|
|
|
|
|
(15,929) |
|
(10,568) |
Global reversal reserve - RGR |
|
|
|
|
|
|
|
|
(2,952) |
|
(4,230) |
Energy development account - CDE |
|
|
|
|
|
|
|
|
(3,185,693) |
|
(3,360,613) |
Research and development and energy efficiency programs |
|
|
|
|
|
|
|
|
(191,997) |
|
(138,583) |
PROINFA |
|
|
|
|
|
|
|
|
(166,743) |
|
(121,800) |
Tariff flags and others |
|
|
|
|
|
|
|
|
(878,460) |
|
(430,077) |
IPI |
|
|
|
|
|
|
|
|
(102) |
|
(195) |
FUST and FUNTEL |
|
|
|
|
|
|
|
|
(19) |
|
(38) |
Others |
|
|
|
|
|
|
|
|
(30,304) |
|
(26,709) |
|
|
|
|
|
|
|
|
|
(13,308,593) |
|
(11,672,495) |
|
|
|
|
|
|
|
|
|
|
|
|
Net operating revenue |
|
|
|
|
|
|
|
|
26,744,905 |
|
19,112,089 |
(*)Information not audited by the independent auditors
25.1 Adjustment of revenues from excess demand and excess reactive power
The tariff regulation procedure (Proret), sub item 2.7 Other revenues, approved by ANEEL Normative Resolution No. 463 of November 22, 2011, determined that revenues of the distribution subsidiaries received as a result of excess demand and excess reactive power, from the contractual tariff review date for the 3rd periodic tariff review, must be accounted for as special obligations, in specific sub-accounts, and will be amortized from the next tariff review. Beginning May 2015 for subsidiary CPFL Piratininga, September 2015 for subsidiary Companhia Jaguari de Energia (CPFL Santa Cruz) and November 2017 for subsidiaries CPFL Paulista and RGE Sul due to the 4th cycle of periodic tariff review, this special obligation started being amortized and the new values from the excess demand and excess reagents started being recognized in sector financial assets and liabilities and will only be amortized when the 5th cycle of periodic tariff review is approved.
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 No. 463, whereby the request for preliminary judicial injunction relief was granted and the order to account for revenues from excess demand and excess reactive power as special obligations was suspended. The suspensive effect required by ANEEL in its interlocutory appeal was granted in June 2012 and the preliminary judicial injunction relief originally granted in favor of ABRADEE was suspended. The distribution subsidiaries are awaiting the court’s decision on the final treatment of these revenues. These amounts are accrued as sector financial liability, under special obligations which are being amortized, presented net in concession intangible asset, in compliance with CPC 25.
119
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
25.2 Periodic tariff review (“RTP”) and Annual tariff adjustment (“RTA”)
|
|
2017 |
|
2016 | ||||||
Subsidiary |
|
Month |
|
RTA |
|
Effect perceived by consumers (a) |
RTA / RTP |
|
Effect perceived by consumers (a) | |
CPFL Paulista |
|
April |
|
-0.80% |
|
-10.50% |
|
9.89% |
|
7.55% |
CPFL Piratininga |
|
October |
|
7.69% |
|
17.28% |
|
-12.54% |
|
-24.21% |
RGE |
|
June |
|
3.57% |
|
5.00% |
|
-1.48% |
|
-7.51% |
RGE Sul |
|
April |
|
-0.20% |
|
-6.43% |
|
3.94% |
|
-0.34% |
Companhia Luz e Força Santa Cruz |
|
March |
|
-1.28% |
|
-8.42% |
|
22.51% |
|
7.15% |
CPFL Leste Paulista |
|
March |
|
0.77% |
|
-4.15% |
|
21.04% |
|
13.32% |
Companhia Jaguari de Energia (CPFL Santa Cruz) |
|
March |
|
2.05% |
|
-2.56% |
|
29.46% |
|
13.25% |
CPFL Sul Paulista |
|
March |
|
1.63% |
|
-10.73% |
|
24.35% |
|
12.82% |
CPFL Mococa |
|
March |
|
1.65% |
|
-3.28% |
|
16.57% |
|
9.02% |
(a) Represents the average effect perceived by the consumer, as a result of the elimination from the tariff base of financial components that had been added in the prior tariff adjustment (information not reviewed by the independent auditors).
As mentioned in note 12.6.2, at December 31, 2017, the EGM approved the grouping of subsidiaries Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia e Companhia Luz and Força de Mococa In accordance with Normative Resolution 716, of May 3, 2016, until the first tariff review of the grouped concessionaire, which will take place in March 2021, ANEEL may apply the procedure that divides over time the variation in the tariffs of the former concessions and the unified tariff. This will occur in the tariff adjustment of March 2018.
25.3 Energy Development Account (CDE) – Low income, other tariff subsidies and tariff discounts - injunctions
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$ 1,419,128 was recognized in 2017 (R$ 1,266,027 in 2016), of which R$ 96,882 for the low-income subsidy (R$ 93,879 in 2016), R$ 1.226.777 for other tariff discounts (R$ 944,742 in 2016) and R$ 95,469 for tariff discounts – injunctions (R$ 227,406 in 2016), against other receivables in line item “Account Receivable – CDE” (note 11) and other payables in line item “Tariff discounts – CDE” (note 22).
25.4 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, segregated at two levels, is set off in costlier conditions. In the latter cases, the tariff increases R$ 1.00, R$ 3.00 and R$ 5.00 (before tax effects), respectively, for each 100 KWh consumed, readjusted by due to a decision issued by the Collegiate Board regarding Public Hearing No. 61/2017, as of November 1, 2017.
In 2017, ANEEL approved the Tariff Flags billed from December 2016 to October 2017. The amount approved in this period was R$ 610,584 (R$ 430,065 in 2016), recognized in line item “Tariff flags and others”. From this amount, R$ 386,242 were used to offset part of the sector financial asset and liability (note 8) and R$ 224,395 were transferred to the centralizing account for tariff flag resources (“CCRBT”). The amount of R$ 298,507, relating to the tariff flag billed in November and December 2017 and not approved, is recognized in regulatory charges (note 19).
25.5 Energy development account (“CDE”)
ANEEL, by means of Ratifying Resolution (“REH”) No. 2,202 of February 7, 2017, amended by REH No. 2,204 of March 7, 2017, established the definitive annual quotas of CDE for the year 2017. These quotas comprise: (i) annual quota of the CDE – USAGE account; and (ii) quota of the CDE – Energy account, related to part of the CDE contributions received by the electric energy distribution concessionaires in the period from January 2013 to January 2014, which should be charged from consumers and passed on to the CDE Account in up to five years from the RTE of 2015. Furthermore, by means of REH No. 2.004 of
120
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
December 15, 2015, ANEEL established another quota intended for the amortization of the ACR Account, whose amount were updated by REH No. 2.231, of April 25, 2017, with payment and transfer to the CDE Account for the tariff period of each subsidiary.
25.6 Adjustment for refunding the Reserve Energy Charge ("EER") of Angra III
ANEEL approved through REH No. 2,214 of March 28, 2017 the republication of the energy tariff – TE and Distribution System Usage Tariff - TUSD for the distribution subsidiaries, with the purpose of refunding the amount forecast for the Reserve Energy Charge (EER) of the energy generation company UTN Almirante Alvaro Alberto - Unit III (Angra III).
The tariffs resulting from this decision were effective in April 2017, however, as the reading period of each consuming unit does not coincide with the calendar month, this reduction occurred in the revenue amounts of April and May 2017, with its impact diluted between the two periods.
The average effect perceived by the consumers was: -15.28% at CPFL Paulista, -6.8% at CPFL Piratininga, -10.89% at RGE, -13.76% at RGE Sul, -13.76% at Companhia Luz e Força Santa Cruz, -14.81% at Companhia Leste Paulista de Energia, -14.71% at Companhia Luz e Força de Mococa, -14.29% at Companhia Sul Paulista de Energia (as mentioned in note 12.6.2, in 2017 the subsidiaries CPFL Santa Cruz, CPFL Jaguari, CPFL Leste Paulista, CPFL Sul Paulista and CPFL Mococa were grouped, and they adopted the name CPFL Santa Cruz), and -16.49% at Companhia Jaguari de Energia (“CPFL Santa Cruz”).
The estimated impact of this adjustment is an average reduction of -12.85% in revenues of distribution subsidiaries in April 2017.
( 26 ) COST OF ELECTRIC ENERGY
|
|
Consolidated | ||||||
|
|
GWh |
|
R$ thousand | ||||
Electricity purchased for resale |
|
2017 |
|
2016 (*) |
|
2017 |
|
2016 |
Itaipu Binacional |
|
11,779 |
|
10,497 |
|
2,350,858 |
|
2,025,780 |
Spot market / PROINFA |
|
3,595 |
|
2,253 |
|
560,153 |
|
269,792 |
Energy purchased through auction in the regulated market and bilateral contracts |
|
62,600 |
|
51,225 |
|
14,269,265 |
|
8,541,677 |
PIS and COFINS credit |
|
- |
|
- |
|
(1,562,779) |
|
(987,997) |
Subtotal |
|
77,974 |
|
63,975 |
|
15,617,498 |
|
9,849,252 |
|
|
|
|
|
|
|
|
|
Electricity network usage charge |
|
|
|
|
|
|
|
|
Basic network charges |
|
|
|
|
|
1,541,629 |
|
834,341 |
Transmission from Itaipu |
|
|
|
|
|
159,896 |
|
53,248 |
Connection charges |
|
|
|
|
|
122,536 |
|
84,927 |
Charges for use of the distribution system |
|
|
|
|
|
39,451 |
|
38,699 |
System service charges - ESS net of CONER pass through |
|
|
|
|
|
(452,978) |
|
362,735 |
Reserve energy charges - EER |
|
|
|
|
|
(303) |
|
106,925 |
PIS and COFINS credit |
|
|
|
|
|
(126,213) |
|
(129,883) |
Subtotal |
|
|
|
|
|
1,284,020 |
|
1,350,990 |
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
16,901,518 |
|
11,200,242 |
(*)Information not audited by the independent auditors
121
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 27 ) OPERATING COSTS AND EXPENSES
|
Parent company | |||
|
Operating expense | |||
|
General and administrative | |||
|
|
2017 |
|
2016 |
Personnel |
|
32,206 |
|
37,845 |
Materials |
|
150 |
|
79 |
Third party services |
|
8,039 |
|
10,404 |
Depreciation and amortization |
|
217 |
|
193 |
Others |
|
2,159 |
|
2,340 |
Leases and rentals |
|
230 |
|
50 |
Publicity and advertising |
|
598 |
|
520 |
Legal, judicial and indemnities |
|
388 |
|
626 |
Donations, contributions and subsidies |
|
15 |
|
- |
Others |
|
928 |
|
1,144 |
Total |
|
42,771 |
|
50,860 |
122
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
Consolidated | ||||||||||||||||||||||
|
Services rendered to third parties |
Operating expenses |
|
|
|
| |||||||||||||||||
|
Operating costs |
|
Sales |
|
|
|
General and administrative |
|
Other |
|
Total | ||||||||||||
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Personnel |
882,150 |
|
686,434 |
|
2 |
|
1 |
|
170,859 |
|
134,864 |
|
324,147 |
|
272,618 |
|
- |
|
- |
|
1,377,158 |
|
1,093,918 |
Private Pension Plans |
113,887 |
|
76,505 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
113,887 |
|
76,505 |
Materials |
222,650 |
|
164,168 |
|
1,061 |
|
1,412 |
|
2,444 |
|
8,191 |
|
23,818 |
|
16,175 |
|
- |
|
- |
|
249,973 |
|
189,946 |
Third party services |
251,549 |
|
271,623 |
|
1,856 |
|
3,416 |
|
186,525 |
|
146,957 |
|
287,221 |
|
229,199 |
|
- |
|
- |
|
727,151 |
|
651,195 |
Depreciation and amortization |
1,143,795 |
|
937,506 |
|
- |
|
- |
|
5,403 |
|
3,602 |
|
93,639 |
|
94,949 |
|
- |
|
- |
|
1,242,837 |
|
1,036,056 |
Costs of infrastructure construction |
- |
|
- |
|
2,071,698 |
|
1,352,214 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
2,071,698 |
|
1,352,214 |
Others |
157,113 |
|
112,560 |
|
(7) |
|
(11) |
|
225,000 |
|
253,638 |
|
218,247 |
|
236,476 |
|
438,494 |
|
386,746 |
|
1,038,847 |
|
989,408 |
Collection fees |
11,710 |
|
- |
|
- |
|
- |
|
68,757 |
|
65,562 |
|
- |
|
- |
|
- |
|
- |
|
80,467 |
|
65,562 |
Allowance for doubtful accounts |
- |
|
- |
|
- |
|
- |
|
155,097 |
|
176,349 |
|
- |
|
- |
|
- |
|
- |
|
155,097 |
|
176,349 |
Leases and rentals |
52,734 |
|
42,163 |
|
- |
|
- |
|
(148) |
|
113 |
|
19,740 |
|
17,109 |
|
- |
|
- |
|
72,326 |
|
59,385 |
Publicity and advertising |
202 |
|
150 |
|
- |
|
- |
|
1 |
|
29 |
|
17,412 |
|
11,659 |
|
- |
|
- |
|
17,615 |
|
11,838 |
Legal, judicial and indemnities |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
188,355 |
|
181,888 |
|
- |
|
- |
|
188,355 |
|
181,888 |
Donations, contributions and subsidies |
88 |
|
54 |
|
- |
|
- |
|
2 |
|
9 |
|
3,924 |
|
2,425 |
|
- |
|
- |
|
4,014 |
|
2,488 |
Gain (loss) on disposal, retirement and other noncurrent assets |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
132,195 |
|
83,575 |
|
132,195 |
|
83,575 |
Amortization of concession intangible asset |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
286,215 |
|
255,110 |
|
286,215 |
|
255,110 |
Amortization of the risk premium paid -GSF |
9,594 |
|
9,594 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
9,594 |
|
9,594 |
Fee for the use of water |
8,656 |
|
12,233 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
8,656 |
|
12,233 |
Impairment |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
20,437 |
|
48,291 |
|
20,437 |
|
48,291 |
Others |
74,130 |
|
48,367 |
|
(7) |
|
(11) |
|
1,291 |
|
11,575 |
|
(11,184) |
|
23,395 |
|
(353) |
|
(231) |
|
63,877 |
|
83,095 |
Total |
2,771,145 |
|
2,248,795 |
|
2,074,611 |
|
1,357,032 |
|
590,232 |
|
547,251 |
|
947,072 |
|
849,416 |
|
438,494 |
|
386,746 |
|
6,821,554 |
|
5,389,240 |
123
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 28 ) FINANCE INCOME (COSTS)
|
Parent company |
|
Consolidated | ||||
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Financial income |
|
|
|
|
|
|
|
Income from financial investments |
5,221 |
|
55,084 |
|
457,255 |
|
667,429 |
Late payment interest and fines |
2 |
|
464 |
|
265,455 |
|
246,045 |
Adjustment for inflation of tax credits |
7,583 |
|
6,698 |
|
19,623 |
|
32,371 |
Adjustment for inflation of escrow deposits |
23 |
|
44 |
|
49,502 |
|
35,228 |
Adjustment for inflation and exchange rate changes |
8 |
|
1 |
|
60,999 |
|
147,849 |
Discount on purchase of ICMS credit |
- |
|
- |
|
16,386 |
|
16,198 |
Adjustments to the sector financial asset (Note 8) |
- |
|
- |
|
- |
|
32,747 |
PIS and COFINS on other finance income |
(1,154) |
|
(3,608) |
|
(48,322) |
|
(63,223) |
PIS and COFINS on interest on capital |
(27,708) |
|
(2,006) |
|
(27,798) |
|
(2,324) |
Others |
29,008 |
|
14,200 |
|
87,214 |
|
88,182 |
Total |
12,983 |
|
70,878 |
|
880,314 |
|
1,200,503 |
|
|
|
|
|
|
|
|
Financial expenses |
|
|
|
|
|
|
|
Interest on debts |
(65,299) |
|
(27,217) |
|
(1,661,060) |
|
(1,811,263) |
Adjustment for inflation and exchange rate changes |
(491) |
|
(25,980) |
|
(540,053) |
|
(703,128) |
(-) Capitalized interest |
- |
|
- |
|
50,543 |
|
68,082 |
Adjustments to the sector financial liability (Note 8) |
- |
|
- |
|
(82,333) |
|
(25,079) |
Use of public asset |
- |
|
- |
|
(8,048) |
|
(14,950) |
Others |
(3,664) |
|
(498) |
|
(126,917) |
|
(167,638) |
Total |
(69,454) |
|
(53,694) |
|
(2,367,868) |
|
(2,653,977) |
Finance expense, net |
(56,471) |
|
17,183 |
|
(1,487,554) |
|
(1,453,474) |
Interests were capitalized at an average rate of 8.54% p.a. in 2017 (10.9% p.a. in 2016) on qualifying assets, in accordance with CPC 20 (R1) and IAS 23.
In line item of adjustment for inflation and exchange rate changes, the expense includes the effects of losses of R$ 235,852 in 2017 (loss of R$ 1,399,988 in 2016) on derivative instruments (note 33).
( 29 ) SEGMENT INFORMATION
The segregation of the Group’s operating segments is based on the internal financial information and management structure and is made by type of business: electric energy distribution, electric energy generation (conventional and renewable sources), electric energy commercialization and services rendered activities.
Profit or loss, assets and liabilities per segment include items directly attributable to the segment, as well as those that can be allocated on a reasonable basis, if applicable. Prices charged between segments are determined based on similar market transactions. Note 1 presents the subsidiaries according to their areas of operation and provides further information on each subsidiary and its business line and segment.
The information segregated by segment is presented below, according to the criteria established by the Group’s officers:
124
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
2017 |
Distribution |
|
Generation (conventional source) |
Generation (renewable source) |
Commercialization |
|
Services |
|
Total |
|
Other (*) |
|
Elimination |
|
Total | ||||
Net operating revenue |
21,068,435 |
|
741,842 |
|
1,489,932 |
|
3,402,804 |
|
40,611 |
|
26,743,625 |
|
1,281 |
|
- |
|
26,744,905 | ||
(-) Intersegment revenues |
8,182 |
|
448,421 |
|
469,152 |
|
11,297 |
|
444,935 |
|
1,381,988 |
|
- |
|
(1,381,988) |
|
- | ||
Cost of electric energy |
(14,146,703) |
|
(147,379) |
|
(348,029) |
|
(3,196,028) |
|
- |
|
(17,838,139) |
|
- |
|
936,621 |
|
(16,901,518) | ||
Operating costs and expenses |
(4,695,480) |
|
(156,340) |
|
(389,443) |
|
(47,296) |
|
(398,188) |
|
(5,686,747) |
|
(51,121) |
|
445,366 |
|
(5,292,502) | ||
Depreciation and amortization |
(763,739) |
|
(123,129) |
|
(617,017) |
|
(3,054) |
|
(19,760) |
|
(1,526,699) |
|
(2,353) |
|
- |
|
(1,529,052) | ||
Income from electric energy service |
1,470,695 |
|
763,415 |
|
604,596 |
|
167,724 |
|
67,598 |
|
3,074,027 |
|
(52,193) |
|
- |
|
3,021,834 | ||
Equity |
- |
|
312,390 |
|
- |
|
- |
|
- |
|
312,390 |
|
- |
|
- |
|
312,390 | ||
Finance income |
597,133 |
|
102,713 |
|
137,746 |
|
19,117 |
|
10,693 |
|
867,402 |
|
12,912 |
|
- |
|
880,314 | ||
Finance expenses |
(1,163,600) |
|
(431,289) |
|
(648,571) |
|
(52,023) |
|
(6,445) |
|
(2,301,929) |
|
(65,939) |
|
- |
|
(2,367,868) | ||
Profit (loss) before taxes |
904,228 |
|
747,229 |
|
93,770 |
|
134,818 |
|
71,846 |
|
1,951,891 |
|
(105,220) |
|
- |
|
1,846,670 | ||
Income tax and social contribution |
(299,510) |
|
(95,688) |
|
(74,125) |
|
(44,527) |
|
(16,994) |
|
(530,845) |
|
(72,784) |
|
- |
|
(603,629) | ||
Profit (loss) for the year |
604,717 |
|
651,541 |
|
19,645 |
|
90,290 |
|
54,852 |
|
1,421,046 |
|
(178,004) |
|
- |
|
1,243,042 | ||
Attributable to owners of the Company |
604,717 |
|
601,969 |
|
3,382 |
|
90,290 |
|
54,852 |
|
1,355,211 |
|
(178,004) |
|
- |
|
1,177,206 | ||
Attributable to noncontrolling interests |
- |
|
49,572 |
|
16,263 |
|
(0) |
|
- |
|
65,835 |
|
- |
|
- |
|
65,836 | ||
Total assets (**) |
22,278,452 |
|
4,287,337 |
|
12,815,017 |
|
931,546 |
|
374,435 |
|
40,686,787 |
|
596,125 |
|
- |
|
41,282,912 | ||
Purchases of PP&E and intangible assets |
1,882,502 |
|
8,973 |
|
621,046 |
|
2,927 |
|
54,149 |
|
2,569,598 |
|
835 |
|
- |
|
2,570,433 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
2016 |
Distribution |
|
Generation (conventional source) |
Generation (renewable source) |
Commercialization |
|
Services |
|
Total |
|
Other (*) |
|
Elimination |
|
Total | ||||
Net operating revenue |
15,017,166 |
|
593,775 |
|
1,334,571 |
|
2,024,350 |
|
81,595 |
|
19,051,456 |
|
60,633 |
|
- |
|
19,112,089 | ||
(-) Intersegment revenues |
22,526 |
|
409,338 |
|
338,357 |
|
62,757 |
|
318,770 |
|
1,151,748 |
|
8,661 |
|
(1,160,410) |
|
- | ||
Cost of electric energy |
(9,747,720) |
|
(98,521) |
|
(272,125) |
|
(1,876,952) |
|
- |
|
(11,995,318) |
|
- |
|
795,075 |
|
(11,200,242) | ||
Operating costs and expenses |
(3,447,081) |
|
(106,364) |
|
(407,673) |
|
(47,548) |
|
(322,131) |
|
(4,330,797) |
|
(132,611) |
|
365,334 |
|
(4,098,074) | ||
Depreciation and amortization |
(591,334) |
|
(126,596) |
|
(553,169) |
|
(3,779) |
|
(12,870) |
|
(1,287,748) |
|
(3,417) |
|
- |
|
(1,291,166) | ||
Income from electric energy service |
1,253,557 |
|
671,631 |
|
439,961 |
|
158,829 |
|
65,363 |
|
2,589,342 |
|
(66,734) |
|
- |
|
2,522,608 | ||
Equity |
- |
|
311,414 |
|
- |
|
- |
|
- |
|
311,414 |
|
- |
|
- |
|
311,414 | ||
Finance income |
781,365 |
|
182,574 |
|
132,653 |
|
31,513 |
|
10,742 |
|
1,138,848 |
|
61,655 |
|
- |
|
1,200,503 | ||
Finance expenses |
(1,331,973) |
|
(562,196) |
|
(667,344) |
|
(24,761) |
|
(5,272) |
|
(2,591,546) |
|
(62,432) |
|
- |
|
(2,653,978) | ||
Profit (loss) before taxes |
702,950 |
|
603,424 |
|
(94,730) |
|
165,581 |
|
70,832 |
|
1,448,057 |
|
(67,510) |
|
- |
|
1,380,547 | ||
Income tax and social contribution |
(295,748) |
|
(98,530) |
|
(46,311) |
|
(53,225) |
|
(17,019) |
|
(510,833) |
|
9,343 |
|
- |
|
(501,490) | ||
Profit (loss) for the year |
407,202 |
|
504,894 |
|
(141,041) |
|
112,357 |
|
53,813 |
|
937,225 |
|
(58,167) |
|
- |
|
879,057 | ||
Attributable to owners of the Company |
407,202 |
|
461,411 |
|
(75,731) |
|
112,357 |
|
53,813 |
|
959,052 |
|
(58,167) |
|
- |
|
900,885 | ||
Attributable to noncontrolling interests |
- |
|
43,483 |
|
(65,311) |
|
(0) |
|
- |
|
(21,828) |
|
- |
|
- |
|
(21,828) | ||
Total assets (**) |
22,887,781 |
|
5,310,924 |
|
12,459,791 |
|
466,021 |
|
345,372 |
|
41,469,889 |
|
701,103 |
|
- |
|
42,170,992 | ||
Purchases of PP&E and intangible assets |
1,200,621 |
|
7,564 |
|
978,896 |
|
3,713 |
|
42,954 |
|
2,233,748 |
|
4,199 |
|
- |
|
2,237,949 | ||
(*) Others – refer basically to assets and transactions which are not related to any of the identified segments.
(**) Intangible assets, net of amortizations, were allocated to their respective segments.
As the Brazilian economic conditions have deteriorated even more during 2017, R$ 20,437 was recognized in subsidiary CPFL Renováveis “generation – renewable source segment” (R$ 40,433 in 2016) relating to the provision for impairment of cash-generating units. In 2016, R$ 7,858 was recognized in subsidiary CPFL Telecom – “others segment”. Such loss was recognized in the statement of profit or loss in line item “Other operating expenses” (note 27).
The amount of the investment in joint ventures accounted for under the equity method, classified in the conventional generation segment, is R$ 1,022,696 (R$ 1,493,753 in 2016).
( 30 ) RELATED PARTY TRANSACTIONS
The Company’s controlling shareholders are as follows:
· State Grid Brazil Power Participações S.A.
Indirect subsidiary of State Grid Corporation of China, a Chinese state-owned company primarily engaged in developing and operating businesses in the electric energy sector.
· ESC Energia S.A.
Subsidiary of State Grid Brazil Power Participações S.A.
The direct and indirect interests in operating subsidiaries are described in note 1.
Controlling shareholders, subsidiaries, associates, joint ventures and entities under common control and that in some way exercise significant influence over the Company and its subsidiaries and associates were considered as related parties.
The main transactions are listed below:
a) 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.
b) 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.
c) Advances – refer to advances for investments in research and development.
125
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
d) Intragroup loans – refer mainly to 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).
To ensure that the trading transactions with related parties are conducted under usual market conditions, the Group set up a “Related Parties Committee”, comprising representatives of the controlling shareholders, of the Company and an independent member, which analyzes the main transactions with related parties.
The subsidiaries CPFL Paulista and CPFL Piratininga renegotiated, for payment on January 2018, the maturity of the electricity bills with the subsidiary Ceran, the original maturities were on November 15 and December 15, 2017.
The total compensation of key management personnel in 2017, in accordance with CVM Decision 560/2008, was R$ 73,670 (R$ 58,132 in 2016). This amount comprises R$ 64,516 (R$ 49,989 in 2016) in respect of short-term benefits, R$ 1,516 (R$ 1,212 in 2016) of post-employment benefits and R$ 7,638 (R$ 6,930 in 2016) for other long-term benefits, and refers to the amount recognized on an accrual basis.
Transactions with entities under common control basically refers to transmission system charge paid by the Company’s subsidiaries to the direct or indirect subsidiaries of State Grid Corporation of China.
Transactions between related parties involving controlling shareholders, entities under common control or significant influence and joint ventures are as follows:
|
Consolidated | ||||||
|
December 31, 2017 |
|
2017 | ||||
|
Asset |
|
Liability |
|
Income |
|
Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advances |
|
|
|
|
|
|
|
BAESA – Energética Barra Grande S.A. |
- |
|
691 |
|
- |
|
- |
Foz do Chapecó Energia S.A. |
- |
|
979 |
|
- |
|
- |
ENERCAN - Campos Novos Energia S.A. |
- |
|
1,212 |
|
- |
|
- |
EPASA - Centrais Elétricas da Paraiba |
- |
|
440 |
|
- |
|
- |
|
|
|
|
|
|
|
|
Energy purchases and sales, and charges |
|
|
|
|
|
|
|
Entities under common control (State Grid Corporation of China' subsidiaries) |
|
|
13,330 |
|
|
|
91,302 |
BAESA – Energética Barra Grande S.A. |
- |
|
13,169 |
|
- |
|
80,362 |
Foz do Chapecó Energia S.A. |
- |
|
37,415 |
|
- |
|
381,193 |
ENERCAN - Campos Novos Energia S.A. |
823 |
|
51,381 |
|
8,763 |
|
281,530 |
EPASA - Centrais Elétricas da Paraiba |
- |
|
19,458 |
|
- |
|
137,376 |
|
|
|
|
|
|
|
|
Intangible assets, property, plant and equipment, materials and services rendered |
|
|
|
|
|
|
|
BAESA – Energética Barra Grande S.A. |
153 |
|
- |
|
1,582 |
|
- |
Foz do Chapecó Energia S.A. |
2 |
|
- |
|
1,726 |
|
- |
ENERCAN - Campos Novos Energia S.A. |
152 |
|
- |
|
1,665 |
|
- |
EPASA - Centrais Elétricas da Paraíba S.A. |
416 |
|
- |
|
(469) |
|
- |
|
|
|
|
|
|
|
|
Intragroup loans |
|
|
|
|
|
|
|
EPASA - Centrais Elétricas da Paraíba S.A. |
- |
|
- |
|
327 |
|
- |
Noncontrolling shareholders of CPFL Renováveis |
8,612 |
|
- |
|
(253) |
|
- |
|
|
|
|
|
|
|
|
Dividends and interest on capital |
|
|
|
|
|
|
|
BAESA – Energética Barra Grande S.A. |
108 |
|
- |
|
- |
|
- |
Chapecoense Geração S.A. |
32,734 |
|
- |
|
- |
|
- |
ENERCAN - Campos Novos Energia S.A. |
21,184 |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
Others |
|
|
|
|
|
|
|
Instituto CPFL |
- |
|
- |
|
- |
|
3,613 |
The comparative information below refers to the period in which the controlling shareholders were those prior to the change of control described in note 23.
126
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
Consolidated | ||||||
|
December 31, 2016 |
|
2016 | ||||
|
Asset |
|
Liability |
|
Income |
|
Expense |
Bank balance and short term investment |
|
|
|
|
|
|
|
Banco do Brasil S.A. |
48,985 |
|
- |
|
4,113 |
|
5 |
|
|
|
|
|
|
|
|
Borrowings (*), debentures and derivatives (*) |
|
|
|
|
|
|
|
Banco do Brasil S.A. |
- |
|
4,257,562 |
|
800 |
|
463,949 |
Banco BNP Paribas Brasil S.A |
5,126 |
|
- |
|
- |
|
67,196 |
|
|
|
|
|
|
|
|
Other financial transactions |
|
|
|
|
|
|
|
Banco do Brasil S.A. |
- |
|
962 |
|
234 |
|
6,408 |
|
|
|
|
|
|
|
|
Advances |
|
|
|
|
|
|
|
BAESA – Energética Barra Grande S.A. |
- |
|
726 |
|
- |
|
- |
Foz do Chapecó Energia S.A. |
- |
|
1,025 |
|
- |
|
- |
ENERCAN - Campos Novos Energia S.A. |
- |
|
1,269 |
|
- |
|
- |
EPASA - Centrais Elétricas da Paraiba |
- |
|
462 |
|
- |
|
- |
|
|
|
|
|
|
|
|
Energy purchases and sales, and charges |
|
|
|
|
|
|
|
AES Tiete S.A. (***) |
- |
|
- |
|
2 |
|
14,498 |
Afluente Transmissão de Energia Elétrica S.A. |
- |
|
53 |
|
- |
|
1,212 |
Aliança Geração de Energia S.A |
- |
|
1,183 |
|
4 |
|
49,944 |
Alpargatas S.A. (***) |
|
|
- |
|
2,954 |
|
- |
Arizona 1 Energia Renovável S.A |
- |
|
- |
|
- |
|
967 |
Baguari I Geração de Energia Elétrica S.A. |
- |
|
6 |
|
- |
|
294 |
BRF Brasil Foods |
- |
|
- |
|
20,190 |
|
- |
Caetite 2 Energia Renovável S.A. |
- |
|
- |
|
- |
|
889 |
Caetité 3 Energia Renovável S.A. |
- |
|
- |
|
- |
|
896 |
Calango 1 Energia Renovável S.A. |
- |
|
- |
|
- |
|
1,073 |
Calango 2 Energia Renovável S.A. |
- |
|
- |
|
- |
|
916 |
Calango 3 Energia Renovável S.A. |
- |
|
- |
|
- |
|
1,072 |
Calango 4 Energia Renovável S.A. |
- |
|
- |
|
- |
|
995 |
Calango 5 Energia Renovável S.A. |
- |
|
- |
|
- |
|
1,054 |
Companhia de Eletricidade do Estado da Bahia – COELBA |
743 |
|
121 |
|
19,296 |
|
121 |
Companhia Energética de Pernambuco - CELPE |
692 |
|
20 |
|
9,829 |
|
250 |
Companhia Energética do Rio Grande do Norte - COSERN |
267 |
|
- |
|
3,128 |
|
- |
Companhia Hidrelétrica Teles Pires S.A. |
- |
|
1,416 |
|
57 |
|
53,710 |
Embraer |
- |
|
- |
|
6,938 |
|
- |
Energética Águas da Pedra S.A. |
- |
|
112 |
|
6 |
|
4,716 |
Estaleiro Atlântico Sul S.A. |
- |
|
- |
|
7,978 |
|
- |
Goiás Sul Geração de Enegia S.A. |
- |
|
- |
|
- |
|
181 |
InterCement Brasil S.A |
- |
|
- |
|
2 |
|
- |
Itapebi Geração de Energia S.A |
- |
|
- |
|
3 |
|
- |
Mel 2 Energia Renovável S.A. |
- |
|
- |
|
- |
|
718 |
NC ENERGIA S.A. |
451 |
|
2 |
|
28,298 |
|
6 |
Norte Energia S.A. |
1 |
|
4,585 |
|
17 |
|
61,240 |
Rio PCH I S.A. |
- |
|
209 |
|
- |
|
8,865 |
Samarco Mineração S.A. |
- |
|
- |
|
2 |
|
- |
Santista Jeanswear S/A |
- |
|
- |
|
13,600 |
|
- |
Santista Work Solution S/A |
- |
|
- |
|
2,224 |
|
- |
SE Narandiba S.A. |
- |
|
2 |
|
- |
|
152 |
Serra do Facão Energia S.A. - SEFAC |
- |
|
557 |
|
- |
|
23,153 |
Termopernambuco S.A. |
- |
|
- |
|
5 |
|
- |
ThyssenKrupp Companhia Siderúrgica do Atlântico |
- |
|
- |
|
25,268 |
|
7,683 |
Tupy |
- |
|
- |
|
- |
|
27,127 |
Vale Energia S.A. |
8,680 |
|
- |
|
102,069 |
|
216 |
BAESA – Energética Barra Grande S.A. |
- |
|
5,642 |
|
- |
|
60,765 |
Foz do Chapecó Energia S.A. |
- |
|
35,018 |
|
215 |
|
358,272 |
ENERCAN - Campos Novos Energia S.A. |
387 |
|
50,526 |
|
3,684 |
|
269,480 |
EPASA - Centrais Elétricas da Paraiba |
- |
|
12,418 |
|
- |
|
91,010 |
|
|
|
|
|
|
|
|
Intangible assets, property, plant and equipment, materials and services rendered |
|
|
|
|
|
| |
Alpargatas S.A. (***) |
168 |
|
- |
|
2,310 |
|
- |
Afluente Transmissão de Energia Elétrica S.A. |
- |
|
- |
|
- |
|
5 |
Banco do Brasil S A |
- |
|
- |
|
- |
|
6 |
Brasil veículos Companhia de Seguros |
- |
|
- |
|
2 |
|
- |
BRF Brasil Foods |
- |
|
- |
|
1,250 |
|
- |
Companhia de Saneamento Básico do Estado de São Paulo - SABESP |
4 |
|
42 |
|
170 |
|
94 |
Concessionária Auto Raposo Tavares S.A. - CART |
- |
|
- |
|
|
|
15 |
Concessionária de Rodovias do Oeste de São Paulo – ViaOeste S.A. |
- |
|
- |
|
- |
|
6 |
Concessionária do Sistema Anhanguera - Bandeirante S.A. |
86 |
|
- |
|
- |
|
10 |
Estaleiro Atlântico Sul S.A. |
- |
|
- |
|
9 |
|
- |
Ferrovia Centro-Atlântica S.A. |
- |
|
- |
|
- |
|
24 |
HM 02 Empreendimento Imobiliário SPE Ltda. |
- |
|
- |
|
45 |
|
- |
Indústrias Romi S.A. |
4 |
|
- |
|
51 |
|
- |
InterCement Brasil S.A |
- |
|
- |
|
43 |
|
- |
Oi Móvel S.A (***) |
- |
|
- |
|
- |
|
302 |
Logum Logística S.A. |
26 |
|
- |
|
730 |
|
- |
NC Energia S.A. |
- |
|
- |
|
17 |
|
- |
Renovias Concessionária S.A. |
- |
|
- |
|
- |
|
17 |
Rodovias Integradas do Oeste S.A. |
- |
|
|
|
- |
|
3 |
SAMM - Sociedade de Atividades em Multimídia Ltda. |
- |
|
- |
|
1,410 |
|
|
Santista Jeanswear S/A |
- |
|
|
|
1 |
|
- |
Tim Celular S.A. (***) |
6 |
|
89 |
|
2,008 |
|
12 |
TOTVS S.A. |
|
|
2 |
|
2 |
|
32 |
Ultrafértil S.A |
- |
|
|
|
14 |
|
- |
Vale Energia S.A. |
- |
|
|
|
331 |
|
- |
Vale S.A. |
- |
|
- |
|
- |
|
11 |
BAESA – Energética Barra Grande S.A. |
56 |
|
|
|
521 |
|
- |
Foz do Chapecó Energia S.A. |
104 |
|
|
|
1,424 |
|
- |
ENERCAN - Campos Novos Energia S.A. |
74 |
|
- |
|
1,826 |
|
- |
EPASA - Centrais Elétricas da Paraíba S.A. |
1,599 |
|
|
|
488 |
|
- |
|
|
|
|
|
|
|
|
Intragroup loans |
|
|
|
|
|
|
|
EPASA - Centrais Elétricas da Paraíba S.A. |
38,078 |
|
- |
|
4,379 |
|
- |
Noncontrolling shareholders of CPFL Renováveis |
9,067 |
|
- |
|
1,039 |
|
- |
|
|
|
|
|
|
|
|
Dividends and interest on capital |
|
|
|
|
|
|
|
BAESA – Energética Barra Grande S.A. |
89 |
|
- |
|
- |
|
- |
Chapecoense Geração S.A. |
29,329 |
|
- |
|
- |
|
- |
ENERCAN - Campos Novos Energia S.A. |
40,983 |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
(*) With mark to market adjustments |
|
|
|
|
|
|
|
(**) Related party until 2015 |
|
|
|
|
|
|
|
(***) Related party before 2016 |
|
|
|
|
|
|
|
127
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 31 ) 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 main insurance policies in the financial statements are:
Description |
|
Type of coverage |
|
December 31, 2017 |
December 31, 2016(*) | |
Concession financial asset / Intangible assets |
Fire, lightning, explosion, machinery breakdown, electrical damage and engineering risk |
7,440,359 |
|
9,679,825 | ||
Transport |
|
National transport |
|
302,364 |
|
416,358 |
Stored materials |
|
Fire, lightning, explosion and robbery |
|
229,496 |
|
232,849 |
Automobiles |
|
Comprehensive cover |
|
16,779 |
|
13,235 |
Civil liability |
|
Electric energy distributors and others |
|
263,000 |
|
200,000 |
Personnel |
|
Group life and personal accidents |
|
694,341 |
|
234,357 |
Others |
|
Operational risks and others |
|
158,340 |
|
281,914 |
Total |
|
|
|
9,104,679 |
|
11,058,537 |
(*) Information not audited by the independent auditors. |
|
|
|
|
For the civil liability insurance of the officers, the insured amount is shared among the companies of the CPFL Energia Group. The premium is paid individually by each company involved, and the revenue is the base for the apportionment criterion.
( 32 ) RISK MANAGEMENT
The Group’s businesses comprise mainly the generation, trading and distribution of electricity. As concessionaire of public services, the activities and/or tariffs of its major subsidiaries are regulated by ANEEL.
Risk management structure
At CPFL Group, the risk management is conducted through a structure that involves the Board of Directors and Supervisory Board, Advisory Committees, Executive Board, Internal Audit and Corporate Risks Management and business areas. This management is regulated by the Corporate Risk Management Policy, which describes the risk management model as well as the attributions of each agent.
The Board of Directors of CPFL Energia is responsible for deciding on the risk limit methodologies recommended by the Executive Board, and for being aware of the exposures and mitigation plans presented in the event these limits are exceeded. This forum is also responsible for being aware of and monitoring any important weaknesses in controls and/or processes, as well as relevant regulatory compliance failures, following up on the plans proposed by the Executive Board to correct them.
The Advisory Committee(s) of the Board of Directors, in its role(s) of technical body(ies), is responsible for becoming aware of (i) the risk monitoring models, (ii) the exposures to risks, and (iii) the control levels (including their effectiveness), supporting the Board of Directors in the performance of its statutory role related to risk management.
The Fiscal Council of CPFL Energia is responsible for, among other things, certifying that Management has means to identify the risks on the preparation and disclosure of the financial statements to which the CPFL Group is exposed as well as for monitoring the effectiveness of the control environment.
The Executive Board of CPFL Energia is responsible for conducting businesses within the risk limits defined, and should take the required measures to avoid that the exposure to risks exceeds such limits and report any excess of the limit to the Board of Directors of CPFL Energia, presenting mitigation actions.
The Internal Audit and Corporate Risks Management is responsible for coordinating the risk management process at CPFL Group, developing and keeping up-to-date Corporate Risk Management methodologies that involve the identification, measurement, monitoring and reporting of risks to which the CPFL Group is exposed.
The business areas have the primary responsibility for the management of the risks inherent to its processes, and should conduct them within the exposure limits defined and implementing mitigation plans for the main exposures.
The main market risk factors that affect the businesses are as follows:
128
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
Foreign exchange risk: This risk derives from the possibility of the Group incurring losses and cash constraints due to fluctuations in exchange rates, increasing the balances of liabilities denominated in foreign currency or decreasing the portion of revenue arising from annual adjustment of part of the tariff based on the fluctuation of the dollar, in power sale agreements of the joint venture ENERCAN. The exposure related to funding in foreign currency is hedged by swap transactions. The exposure related to ENERCAN revenue, proportional to the interest held by the Company, is hedged by financial instruments such as the zero cost collar described in note 33.b.1. The quantification of these risks is presented in note 33. In addition, the subsidiaries are exposed in their operating activities to fluctuations in exchange rates on purchase of electricity from Itaipu. The compensation mechanism - CVA protects the distribution subsidiaries against any economic losses.
Interest rate risk and inflation indexes: This risk arises due to the possibility of the Group incurring losses due to fluctuations in interest rates and in inflation indexes, which would increase the finance costs related to borrowings and debentures. The quantification of this risk is presented in note 33.
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 prices that will value the positions of energy surplus or deficit of its portfolio in the free market, marked against the market price of electricity.
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 storage conditions of the National Interconnected System (“SIN”) permitted the generation of electricity during 2017 without risks of shortage, despite the low storage level in the Northeast subsystem. The improvement of the SIN storage condition, associated to the entry in operation of new hydropower generating units in the North region and the availability of thermopower generation, reduce significantly the probability of load cut load for energy reasons.
Risk of acceleration of debts: the Company has borrowing agreements and debentures with restrictive covenants normally applicable to these types of transactions. 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.
Financial instruments risk management
The Group maintains 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 Group uses Luna and Bloomberg software systems to calculate the mark to market, stress testing and duration of the instruments, and assess the risks to which
129
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
the Group is exposed. Historically, the financial instruments contracted by the Group 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 Group does not enter into transactions involving speculative derivatives.
( 33 ) FINANCIAL INSTRUMENTS
The main financial instruments, at fair value and/or the carrying amount is significantly different of the respective fair value, classified in accordance with the Group’s accounting practices, are:
|
|
Consolidated | ||||||||
|
|
December 31, 2017 | ||||||||
|
Note |
|
Category |
|
Measurement |
Level (*) |
|
Carrying amount |
|
Fair value |
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalent |
5 |
|
(a) |
|
(2) |
Level 1 |
|
2,289,302 |
|
2,289,302 |
Cash and cash equivalent |
5 |
|
(a) |
|
(2) |
Level 2 |
|
960,340 |
|
960,340 |
Derivatives |
33 |
|
(a) |
|
(2) |
Level 2 |
|
595,872 |
|
595,872 |
Derivatives - Zero-cost collar |
33 |
|
(a) |
|
(2) |
Level 3 |
|
52,058 |
|
52,058 |
Concession financial asset - distribution |
10 |
|
(b) |
|
(2) |
Level 3 |
|
6,330,681 |
|
6,330,681 |
|
|
|
|
|
|
|
|
10,228,253 |
|
10,228,253 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
Borrowings - principal and interest |
16 |
|
(c) |
|
(1) |
Level 2 (***) |
|
6,142,583 |
|
5,912,175 |
Borrowings - principal and interest (**) |
16 |
|
(a) |
|
(2) |
Level 2 |
|
4,849,474 |
|
4,849,474 |
Debentures - Principal and interest |
17 |
|
(c) |
|
(1) |
Level 2 (***) |
|
9,176,527 |
|
7,581,432 |
Derivatives |
33 |
|
(a) |
|
(2) |
Level 2 |
|
94,806 |
|
94,806 |
|
|
|
|
|
|
|
|
20,263,390 |
|
18,437,887 |
(*) Refers to the hierarchy for fair value measurement |
|
|
|
|
|
|
|
|
|
|
(**) As a result of the initial designation of this financial liability, the consolidated balances reported a gain of R$ 21.137 in 2017 (a loss of R$ 274.834 in 2016). | ||||||||||
(***) Only for disclosure purposes, in accordance with CPC 40 (R1) / IFRS 7 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Key |
|
|
|
|
|
|
|
|
|
|
Category: |
Measurement: |
|
|
|
|
|
|
|
| |
(a) - Measured at fair value through profit or loss |
(1) - Measured at amortized cost |
|
|
|
|
| ||||
(b) - Available for sale |
(2) - Measured at fair value |
|
|
|
|
|
|
| ||
(c) - Other financial liabilities |
|
|
|
|
|
|
|
|
|
|
The financial instruments for which the carrying amounts approximate the fair values, due to their nature, at the end of the reporting year are:
· Financial assets: (i) consumers, concessionaires and licensees, (ii) leases, (iii) intercompany loans between associates, subsidiaries and parent company, (iv) receivables – CDE, (v) concession financial asset – transmission companies, (vi) pledges, funds and restricted deposits, (vii) services rendered to third parties, (viii) collection agreements and (ix) sector financial asset;
· Financial liabilities: (i) trade payables, (ii) regulatory charges, (iii) use of public asset, (iv) consumers and concessionaires, (v) FNDCT/EPE/PROCEL, (vi) collection agreement, (vii) reversal fund, (viii) payables for business combination, (ix) tariff discounts – CDE and (x) sector financial liability.
In addition, in 2017 there were no transfers between the fair value hierarchy levels.
a) Measurement of financial instruments
As mentioned in note 4, the fair value of a security corresponds to its maturity value (redemption value) adjusted to present value by the discount factor (relating to the maturity date of the security) obtained from the market interest curve, in Brazilian reais.
CPC 40 (R1) and IFRS 7 require the classification into a three-level hierarchy for fair value measurement of financial instruments, based on observable and unobservable inputs related to the measurement of a financial instrument at the measurement date.
CPC 40 (R1) and IFRS 7 also define observable inputs as market data obtained from independent sources and unobservable inputs as those that reflect market assumptions.
The three levels of the fair value hierarchy are:
Level 1: Quoted prices in an active market for identical instruments;
Level 2: Observable inputs other than quoted prices in an active market that are observable for the asset or liability, directly (i.e. as prices) or indirectly (i.e. derived from prices);
Level 3: Instruments whose relevant factors are not observable market inputs.
As the distribution concessionaries classified the respective concession financial assets as available-for-sale, the relevant factors for fair value measurement are not publicly observable. Therefore, the fair value hierarchy classification is level 3. The movements and respective gains (losses) in profit for or loss are R$
130
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
204,443 (R$ 186,148 in 2016) and the main assumptions are described in note 10 and 25.
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 33 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 Group has the policy of using derivatives to hedge against the risks of fluctuations in exchange and interest rates, without any speculative purposes. The Group has currency hedges in a volume compatible with the net exchange exposure, including all assets and liabilities tied to exchange rate changes.
The hedging instruments entered into by the Group are currency or interest rate swaps with no leverage component, margin call requirements or daily or periodic adjustments. Furthermore, in 2015 the subsidiary CPFL Geração contracted a zero-cost collar derivative (see item b.1 below).
As a large part of the derivatives entered into by the subsidiaries have their terms fully aligned with the hedged debts, and in order to obtain more relevant and consistent accounting information through the recognition of income and expenses, these debts were designated for the accounting recognition at fair value (note 16). Other debts that have terms different from the derivatives contracted as a hedge continue to be recognized at amortized cost. Furthermore, the Group did not adopt hedge accounting for transactions with derivative instruments.
At 2017, the Group had the following swap transactions, all traded on the over-the-counter market:
131
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
|
Fair values (carrying amounts) |
|
|
|
|
|
|
|
|
|
| ||||
Company / strategy / counterparts |
|
Assets |
|
Liabilities |
|
Fair value, net |
|
Values at cost, net (3) |
Gain (loss) on mark to market |
Currency / index |
|
Notional | ||||
Derivatives to hedge debts designated at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate hedge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Paulista |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank of Tokyo-Mitsubishi |
|
34,627 |
|
- |
|
34,627 |
|
35,864 |
|
(1,237) |
|
Dollar |
|
Mar 2019 |
|
117,400 |
Bank of America Merrill Lynch |
|
42,466 |
|
- |
|
42,466 |
|
42,830 |
|
(363) |
|
Dollar |
|
Sep 2018 |
|
106,020 |
Bank of America Merrill Lynch |
|
48,135 |
|
- |
|
48,135 |
|
48,802 |
|
(667) |
|
Dollar |
|
Mar 2019 |
|
116,600 |
J.P.Morgan |
|
24,067 |
|
- |
|
24,067 |
|
24,401 |
|
(334) |
|
Dollar |
|
Mar 2019 |
|
58,300 |
J.P.Morgan |
|
13,808 |
|
- |
|
13,808 |
|
13,659 |
|
149 |
|
Dollar |
|
Jan 2019 |
|
67,613 |
Bank of Tokyo-Mitsubishi |
|
14,124 |
|
- |
|
14,124 |
|
22,015 |
|
(7,891) |
|
Dollar |
|
Feb 2020 |
|
142,735 |
Bank of America Merrill Lynch |
|
89,684 |
|
- |
|
89,684 |
|
89,289 |
|
395 |
|
Dollar |
|
Feb 2018 |
|
405,300 |
Bank of America Merrill Lynch |
|
- |
|
(5,236) |
|
(5,236) |
|
(1,653) |
|
(3,583) |
|
Dollar |
|
Oct 2018 |
|
329,500 |
Bradesco |
|
- |
|
(5,163) |
|
(5,163) |
|
(4,068) |
|
(1,095) |
|
Dollar |
|
May 2021 |
|
59,032 |
Bank of America Merrill Lynch |
|
- |
|
(4,805) |
|
(4,805) |
|
(4,055) |
|
(750) |
|
Dollar |
|
May 2021 |
|
59,032 |
Citibank |
|
- |
|
(4,971) |
|
(4,971) |
|
(4,062) |
|
(910) |
|
Dollar |
|
May 2021 |
|
59,032 |
Citibank |
|
- |
|
(4,948) |
|
(4,948) |
|
(4,080) |
|
(868) |
|
Dollar |
|
May 2021 |
|
59,032 |
|
|
266,911 |
|
(25,124) |
|
241,787 |
|
258,941 |
|
(17,154) |
|
|
|
|
|
|
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
CPFL Piratininga |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Citibank |
|
45,457 |
|
- |
|
45,457 |
|
47,966 |
|
(2,509) |
|
Dollar |
|
Mar 2019 |
|
117,250 |
Bradesco |
|
27,046 |
|
- |
|
27,046 |
|
27,257 |
|
(211) |
|
Dollar |
|
Apr 2018 |
|
55,138 |
J.P.Morgan |
|
27,050 |
|
- |
|
27,050 |
|
27,259 |
|
(209) |
|
Dollar |
|
Apr 2018 |
|
55,138 |
Citibank |
|
30,880 |
|
- |
|
30,880 |
|
35,979 |
|
(5,099) |
|
Dollar |
|
Jan 2020 |
|
169,838 |
BNP Paribas |
|
37,212 |
|
- |
|
37,212 |
|
36,649 |
|
563 |
|
Euro |
|
Jan 2018 |
|
175,714 |
Bradesco |
|
- |
|
(5,163) |
|
(5,163) |
|
(4,068) |
|
(1,095) |
|
Dollar |
|
May 2021 |
|
59,032 |
Bank of America Merrill Lynch |
|
- |
|
(4,805) |
|
(4,805) |
|
(4,055) |
|
(750) |
|
Dollar |
|
May 2021 |
|
59,032 |
Citibank |
|
- |
|
(4,971) |
|
(4,971) |
|
(4,062) |
|
(910) |
|
Dollar |
|
May 2021 |
|
59,032 |
Bank of America Merrill Lynch |
|
- |
|
(2,339) |
|
(2,339) |
|
(2,035) |
|
(304) |
|
Dollar |
|
May 2021 |
|
29,516 |
Citibank |
|
- |
|
(2,474) |
|
(2,474) |
|
(2,040) |
|
(434) |
|
Dollar |
|
May 2021 |
|
29,516 |
|
|
167,645 |
|
(19,753) |
|
147,891 |
|
158,850 |
|
(10,959) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RGE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank of Tokyo-Mitsubishi |
|
22,785 |
|
- |
|
22,785 |
|
23,054 |
|
(270) |
|
Dollar |
|
Apr 2018 |
|
36,270 |
Bank of Tokyo-Mitsubishi |
|
101,289 |
|
- |
|
101,289 |
|
102,467 |
|
(1,178) |
|
Dollar |
|
May 2018 |
|
168,346 |
Bank of Tokyo-Mitsubishi |
|
374 |
|
- |
|
374 |
|
1,313 |
|
(939) |
|
Dollar |
|
Oct 2018 |
|
169,260 |
Bradesco |
|
- |
|
(5,163) |
|
(5,163) |
|
(4,068) |
|
(1,095) |
|
Dollar |
|
May 2021 |
|
59,032 |
Bank of America Merrill Lynch |
|
- |
|
(4,805) |
|
(4,805) |
|
(4,055) |
|
(750) |
|
Dollar |
|
May 2021 |
|
59,032 |
Citibank |
|
- |
|
(4,971) |
|
(4,971) |
|
(4,062) |
|
(910) |
|
Dollar |
|
May 2021 |
|
59,032 |
Bank of America Merrill Lynch |
|
- |
|
(4,678) |
|
(4,678) |
|
(4,070) |
|
(609) |
|
Dollar |
|
May 2021 |
|
59,032 |
|
|
124,448 |
|
(19,619) |
|
104,829 |
|
110,579 |
|
(5,750) |
|
|
|
|
|
|
Companhia Jaguari de Energia (CPFL Santa Cruz) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scotiabank |
|
- |
|
(1,167) |
|
(1,167) |
|
(1,327) |
|
160 |
|
Dollar |
|
Jul 2019 |
|
65,936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Paulista Lajeado |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Itaú |
|
598 |
|
- |
|
598 |
|
557 |
|
41 |
|
Dollar |
|
Mar 2018 |
|
35,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Brasil |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scotiabank |
|
- |
|
(1,537) |
|
(1,537) |
|
(1,608) |
|
71 |
|
Dollar |
|
Aug 2018 |
|
45,360 |
Scotiabank |
|
6,243 |
|
- |
|
6,243 |
|
10,610 |
|
(4,367) |
|
Dollar |
|
Sep 2020 |
|
249,989 |
Scotiabank |
|
3,964 |
|
- |
|
3,964 |
|
6,674 |
|
(2,709) |
|
Dollar |
|
Oct 2020 |
|
150,011 |
|
|
10,208 |
|
(1,537) |
|
8,671 |
|
15,676 |
|
(7,005) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Geração |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scotiabank |
|
- |
|
(2,070) |
|
(2,070) |
|
(2,355) |
|
286 |
|
Dollar |
|
Jul 2019 |
|
117,036 |
Votorantim |
|
- |
|
(5,339) |
|
(5,339) |
|
(5,316) |
|
(23) |
|
Dollar |
|
Jun 2019 |
|
104,454 |
Bradesco |
|
- |
|
(103) |
|
(103) |
|
433 |
|
(536) |
|
Dollar |
|
Sep 2019 |
|
32,636 |
Citibank |
|
- |
|
(10,985) |
|
(10,985) |
|
(613) |
|
(10,372) |
|
Dollar |
|
Sep 2020 |
|
397,320 |
Scotiabank |
|
- |
|
(9,110) |
|
(9,110) |
|
(9,278) |
|
167 |
|
Dollar |
|
Dec 2019 |
|
174,525 |
|
|
- |
|
(27,607) |
|
(27,607) |
|
(17,129) |
|
(10,478) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
569,809 |
|
(94,806) |
|
475,004 |
|
526,148 |
|
(51,145) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives to hedge debts not designated at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price index hedge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Geração |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Santander |
|
10,263 |
|
- |
|
10,263 |
|
8,344 |
|
1,919 |
|
IPCA |
|
Apr 2019 |
|
35,235 |
J.P.Morgan |
|
10,263 |
|
- |
|
10,263 |
|
8,344 |
|
1,919 |
|
IPCA |
|
Apr 2019 |
|
35,235 |
|
|
20,525 |
|
- |
|
20,525 |
|
16,688 |
|
3,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate hedge (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Paulista |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.P.Morgan |
|
1,112 |
|
- |
|
1,112 |
|
255 |
|
857 |
|
CDI |
|
Feb 2021 |
|
300,000 |
Votorantim |
|
380 |
|
- |
|
380 |
|
87 |
|
293 |
|
CDI |
|
Feb 2021 |
|
100,000 |
Santander |
|
401 |
|
- |
|
401 |
|
92 |
|
309 |
|
CDI |
|
Feb 2021 |
|
105,000 |
|
|
1,893 |
|
- |
|
1,893 |
|
434 |
|
1,459 |
|
|
|
|
|
|
CPFL Piratininga |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Votorantim |
|
536 |
|
- |
|
536 |
|
122 |
|
414 |
|
CDI |
|
Feb 2021 |
|
135,000 |
Santander |
|
402 |
|
- |
|
402 |
|
91 |
|
310 |
|
CDI |
|
Feb 2021 |
|
100,000 |
|
|
938 |
|
- |
|
938 |
|
213 |
|
724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RGE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Votorantim |
|
620 |
|
- |
|
620 |
|
143 |
|
477 |
|
CDI |
|
Feb 2021 |
|
170,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Geração |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Votorantim |
|
2,088 |
|
- |
|
2,088 |
|
403 |
|
1,685 |
|
CDI |
|
Aug 2020 |
|
460,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal |
|
26,063 |
|
- |
|
26,063 |
|
17,881 |
|
8,182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other derivatives (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPFL Geração |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Itaú |
|
18,126 |
|
- |
|
18,126 |
|
- |
|
18,126 |
|
Dollar |
|
Sep 2020 |
|
19,975 |
Votorantim |
|
14,948 |
|
- |
|
14,948 |
|
- |
|
14,948 |
|
Dollar |
|
Sep 2020 |
|
19,975 |
Santander |
|
18,984 |
|
- |
|
18,984 |
|
- |
|
18,984 |
|
Dollar |
|
Sep 2020 |
|
25,248 |
Subtotal |
|
52,058 |
|
- |
|
52,058 |
|
- |
|
52,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
647,930 |
|
(94,806) |
|
553,124 |
|
544,029 |
|
9,095 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current |
|
444,029 |
|
(10,230) |
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent |
|
203,901 |
|
(84,576) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For further details on terms and information on debts and debentures, see notes 16 and 17 | ||||||||||||||||
(1) The interest rate hedge swaps have half-yearly validity, so the notional value reduces according to the amortization of the debt. | ||||||||||||||||
(2) Due to the characteristics of this derivative (zero-cost collar), the notional amount is presented in U.S. dollar. | ||||||||||||||||
(3)The values at cost are the derivative amount without the respective mark to market, while the notional refers to the contracted accrual. |
133
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
|
Consolidated | ||||||
|
|
At December 31, 2016 |
Interest, inflation adjustment, exchange rate and MTM |
Repayment |
|
At December 31, 2017 | ||
Derivatives |
|
|
|
|
|
|
|
|
To hedge debts designated at fair value |
|
602,476 |
|
(189,466) |
|
113,138 |
|
526,148 |
To hedge debts not designated at fair value |
|
7,181 |
|
(1,175) |
|
11,875 |
|
17,881 |
Other (zero cost collar) |
|
- |
|
22,372 |
|
(22,372) |
|
- |
Mark to market (*) |
|
76,679 |
|
(67,584) |
|
- |
|
9,095 |
|
|
686,336 |
|
(235,853) |
|
102,641 |
|
553,124 |
(*) The effects in profit or loss of 2017 of mark to market adjustments of derivatives are: (i) loss of R$ 75,649 to debts designated at fair value, (ii) gain of R$ 13,722 to debts not designated at fair value and (iii) loss of R$ 5,657 to other derivatives (zero cost collar) | ||||||||
As mentioned above, certain subsidiaries elected to mark to market debts for which they have fully debt-related derivatives instruments (note 16).
The Group has recognized gains and losses on their derivatives. However, as these derivatives are used as a hedging instrument, these gains and losses minimized the impacts of fluctuations in exchange and interest rates on the hedged debts. For the years of 2017 and 2016, the derivatives generated the following impacts on the consolidated profit or loss, recognized in the line item of Finance costs on adjustment for inflation and exchange rate changes:
|
|
|
|
Gain (Loss) | ||
Company |
|
Hedged risk / transaction |
|
2017 |
|
2016 |
CPFL Energia |
|
Exchange variation |
|
- |
|
(76,202) |
CPFL Energia |
|
Mark to market |
|
- |
|
2,319 |
CPFL Paulista |
|
Interest rate variation |
|
304 |
|
(1,423) |
CPFL Paulista |
|
Exchange variation |
|
(89,612) |
|
(802,479) |
CPFL Paulista |
|
Mark to market |
|
(25,410) |
|
118,663 |
CPFL Piratininga |
|
Interest rate variation |
|
175 |
|
(661) |
CPFL Piratininga |
|
Exchange variation |
|
(19,799) |
|
(358,412) |
CPFL Piratininga |
|
Mark to market |
|
(18,999) |
|
48,193 |
RGE |
|
Interest rate variation |
|
115 |
|
(835) |
RGE |
|
Exchange variation |
|
(27,237) |
|
(252,321) |
RGE |
|
Mark to market |
|
(10,679) |
|
48,915 |
CPFL Geração |
|
Interest rate variation |
|
852 |
|
3,161 |
CPFL Geração |
|
Exchange variation |
|
(41,793) |
|
(145,933) |
CPFL Geração |
|
Mark to market |
|
(6,033) |
|
66,425 |
CPFL Santa Cruz |
|
Exchange variation |
|
(947) |
|
(6,986) |
CPFL Santa Cruz |
|
Mark to market |
|
120 |
|
148 |
CPFL Leste Paulista |
|
Exchange variation |
|
(947) |
|
(1,076) |
CPFL Leste Paulista |
|
Mark to market |
|
120 |
|
(80) |
CPFL Sul Paulista |
|
Exchange variation |
|
(947) |
|
(7,577) |
CPFL Sul Paulista |
|
Mark to market |
|
120 |
|
170 |
CPFL Jaguari |
|
Exchange variation |
|
(947) |
|
(10,236) |
CPFL Jaguari |
|
Mark to market |
|
120 |
|
273 |
Paulista Lajeado Energia |
|
Exchange variation |
|
(2,052) |
|
(11,046) |
Paulista Lajeado Energia |
|
Mark to market |
|
66 |
|
1,649 |
CPFL Brasil |
|
Exchange variation |
|
14,567 |
|
(13,857) |
CPFL Brasil |
|
Mark to market |
|
(7,009) |
|
2,383 |
CPFL Serviços |
|
Exchange variation |
|
- |
|
(3,420) |
CPFL Serviços |
|
Mark to market |
|
- |
|
254 |
|
|
|
|
(235,852) |
|
(1,399,988) |
b.1) Zero-cost collar derivative transactions entered into by CPFL Geração
134
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
In 2015, the subsidiary CPFL Geração entered into a transaction involving put options and call options in US$, both having the same institution as counterpart, and that combined are featured as a transaction usually known as zero-cost collar. Entering into this transaction does not have any speculative purpose, inasmuch as it is aimed at minimizing any negative impacts on future revenue of the joint venture ENERCAN, which has electric energy sale agreements with annual adjustment of part of the tariff based on the dollar variation. In addition, according to Management’s view, the scenario in 2015 was favorable to enter into this type of financial instrument, considering the high volatility implicit in dollar options and the fact that there is no initial cost for this type of transaction.
The total amount contracted was US$ 111,817, with due dates between October 1, 2015 and September 30, 2020. At December 31, 2017, the total amount contracted was US$ 65,197, considering the options already settled until this date. The strike prices of the dollar options vary from R$ 4.20 to R$ 4.40 for put options and from R$ 5.40 to R$7.50 for call options.
These options were measured at fair value in a recurring manner, as required by IAS 39/CPC 38. The fair value of the options that are part of this transaction was calculated based on the following assumptions:
Valuation technique(s) and key information |
We used the Black Scholes Option Pricing Model, which aims to obtain the fair price of the options involving the following variables: value of the asset, strike price of the option, interest rate, term and volatility. |
Significant unobservable inputs |
Volatility determined based on the average market pricing calculations, future dollar and other variables applicable to this specific transaction, with average variation of 19.65%. |
Relationship between unobservable inputs and fair value (sensitivity) |
A slight rise in long-term volatility, analyzed separately, would result in an insignificant increase in fair value. If the volatility were 10% higher and all the other variables remained constant, the net carrying amount (asset) would decrease by R$ 477, resulting in a net asset of R$ 51,581. |
The following table reconciles the opening and closing balances of the call and put options for the year ended by December 31,2017, as required by IFRS 13/CPC 46:
|
|
Consolidated | ||||
|
|
Asset |
|
Liability |
|
Net |
At December 31, 2015 |
|
8,820 |
|
(2,440) |
|
6,380 |
Measurement at fair value |
|
65,546 |
|
2,440 |
|
67,986 |
Net cash, received from settlement of flows |
|
(16,651) |
|
- |
|
(16,651) |
At December 31, 2016 |
|
57,715 |
|
- |
|
57,715 |
Measurement at fair value |
|
16,715 |
|
- |
|
16,715 |
Net cash, received from settlement of flows |
|
(22,372) |
|
- |
|
(22,372) |
At December 31, 2017 |
|
52,058 |
|
- |
|
52,058 |
The fair value measurement of these financial instruments was recognized as finance income in the statement of profit or loss for the period, and no effects were recognized in other comprehensive income.
c) Sensitivity analysis
In compliance with CVM Instruction No. 475/2008, the Group performed sensitivity analyses of the main risks to which their financial instruments (including derivatives) are exposed, mainly comprising changes in exchange and interest rates.
When the risk exposure is considered asset, the risk to be taken into account is a reduction in the pegged indexes, due to a consequent negative impact on the Group’s profit or loss. Similarly, if the risk exposure is considered liability, the risk is of an increase in the pegged indexes and the consequent negative effect on the profit or loss. The Group therefore quantify the risks in terms of the net exposure of the variables (dollar, euro, CDI, IGP-M, IPCA, TJLP and SELIC), as shown below:
c.1) Changes in exchange rates
Considering that the net exchange rate exposure at December 31, 2017 is maintained, the simulation of the effects by type of financial instrument for three different scenarios would be:
135
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
|
|
Consolidated | ||||||||
|
|
|
|
|
|
Decrease (increase) | ||||
Instruments |
|
Exposure (a) |
|
Risk |
|
Exchange depreciation (b) |
Currency appreciation of 25% (c) |
Currency appreciation of 50% (c) | ||
Financial liability instruments |
|
(4,641,924) |
|
|
|
(209,785) |
|
1,003,142 |
|
2,216,070 |
Derivatives - Plain Vanilla Swap |
|
4,687,768 |
|
|
|
211,857 |
|
(1,013,050) |
|
(2,237,956) |
|
|
45,844 |
|
drop in the dollar |
|
2,072 |
|
(9,908) |
|
(21,886) |
|
|
|
|
|
|
|
|
|
|
|
Financial liability instruments |
|
(218,814) |
|
|
|
(14,978) |
|
43,470 |
|
101,918 |
Derivatives - Plain Vanilla Swap |
|
219,694 |
|
|
|
15,038 |
|
(43,645) |
|
(102,328) |
|
|
880 |
|
drop in the euro |
|
60 |
|
(175) |
|
(410) |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
46,724 |
|
|
|
2,132 |
|
(10,083) |
|
(22,296) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) | ||||
Instruments |
|
Exposure US$ thousand |
Risk |
|
Currency depreciation (b) |
Currency depreciation of 25% (c) |
Currency depreciation of 50% (c) | |||
Derivatives zero-cost collar |
|
65,197 |
(d) |
raise in the dollar |
|
(56,138) |
|
(80,491) |
|
(104,844) |
(a) The exchange rate considered at 12/31/2017 was R$ 3.31 per US$ 1.00 and R$ 3.97 per € 1.00.
(b) As per the exchange rate curves obtained from information made available by B3 S.A., with the exchange rate being considered at R$ 3.46 and R$ 4.24, and the currency depreciation at 4.52% and 6.85%, for 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 B3 S.A..
(d) Owing to the characteristics of this derivative (zero-cost collar), the notional amount is presented in US$.
Except for the zero-cost collar, as the net exchange exposure of the dollar and euro for the other derivative instruments is an asset, the risk is a drop in the dollar and euro, therefore, the exchange rate is appreciated by 25% and 50% in relation to the probable exchange rate.
c.2) Changes in interest rates
Assuming that: (i) the scenario of net exposure of the financial instruments indexed to floating interest rates at December 31, 2017 is maintained, and (ii) the respective annual indexes accumulated in the last 12 months, for this base date, remain stable (CDI 6.89% p.a.; IGP-M -0.52% p.a.; TJLP 7.00% p.a.; IPCA 2.76% p.a. and SELIC 9.7% p.a.), the effects that would be recognized in the consolidated financial statements for the next 12 months would be a net finance cost of R$ 764,150 (costs of CDI R$ 669,661, TJLP R$ 276,141 and SELIC R$ 36,609, and finance income of IGP-M R$ 298 and IPCA R$ 141,152). In the event of fluctuations in the indexes according to the three scenarios defined, the amount of the net finance cost would be impacted by:
|
|
Consolidated | ||||||||
|
|
Exposure (a) |
|
Risk |
|
Decrease (raise) | ||||
Instruments |
|
|
|
Scenario I (a) |
|
Raising/Drop index by 25% (b) |
Raising/Drop index by 50% (b) | |||
Financial asset instruments |
|
3,770,045 |
|
|
|
(3,016) |
|
61,169 |
|
125,354 |
Financial liability instruments |
|
(8,988,008) |
|
|
|
7,190 |
|
(145,830) |
|
(298,851) |
Derivatives - Plain Vanilla Swap |
|
(4,501,345) |
|
|
|
3,601 |
|
(73,034) |
|
(149,670) |
|
|
(9,719,308) |
|
CDI apprec. |
|
7,775 |
|
(157,695) |
|
(323,167) |
|
|
|
|
|
|
|
|
|
|
|
Financial liability instruments |
|
(57,291) |
|
IGP-M apprec. |
|
(2,286) |
|
(2,783) |
|
(3,280) |
|
|
|
|
|
|
|
|
|
|
|
Financial liability instruments |
|
(3,944,876) |
|
TJLP apprec. |
|
9,862 |
|
(56,708) |
|
(123,277) |
|
|
|
|
|
|
|
|
|
|
|
Financial liability instruments |
|
(1,311,432) |
|
|
|
(14,557) |
|
(1,869) |
|
10,819 |
Derivatives - Plain Vanilla Swap |
|
94,949 |
|
|
|
1,054 |
|
135 |
|
(783) |
Concession financial asset |
|
6,330,681 |
|
|
|
70,271 |
|
9,021 |
|
(52,228) |
|
|
5,114,198 |
|
drop in the IPCA |
|
56,768 |
|
7,287 |
|
(42,192) |
|
|
|
|
|
|
|
|
|
|
|
Sectorial financial assets and liabilities |
|
517,341 |
|
|
|
(14,692) |
|
(23,565) |
|
(32,437) |
Financial liability instruments |
|
(139,926) |
|
|
|
3,974 |
|
6,374 |
|
8,773 |
|
|
377,415 |
|
drop in the SELIC |
|
(10,718) |
|
(17,191) |
|
(23,664) |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
(8,229,862) |
|
|
|
61,401 |
|
(227,090) |
|
(515,580) |
(a) The CDI, IGP-M, TJLP, IPCA and SELIC indexes considered of: 6.81%, 3.47%, 6.75%, 3.87% and 6.86%, respectively, were obtained from information available in the market.
(b) As required by CVM Instruction 475/2008, the percentages of increase or decrease were applied to the indexes in scenario I.
136
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
d) 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, 2017, taking into account principal and future interest, and is based on the undiscounted cash flow, considering the earliest date on which the Group has to settle their respective obligations.
|
|
|
|
Consolidated | ||||||||||||||
December 31, 2017 |
|
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 |
|
15 |
|
|
|
3,524,624 |
|
16,307 |
|
7,418 |
|
- |
|
- |
|
128,438 |
|
3,676,787 |
Borrowings - principal and interest |
|
16 |
|
7,95% p.a. |
|
336,255 |
|
947,051 |
|
2,904,702 |
|
5,267,176 |
|
1,485,520 |
|
2,421,543 |
|
13,362,247 |
Derivatives |
|
33 |
|
|
|
39 |
|
523 |
|
14,160 |
|
32,258 |
|
59,801 |
|
- |
|
106,781 |
Debentures - principal and interest |
|
17 |
|
7,83% p.a. |
|
35,930 |
|
544,995 |
|
1,541,223 |
|
5,378,610 |
|
1,938,783 |
|
1,350,776 |
|
10,790,317 |
Regulatory charges |
|
19 |
|
|
|
581,600 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
581,600 |
Use of public asset |
|
|
|
9,24% p.a. |
|
1,645 |
|
3,305 |
|
14,979 |
|
42,579 |
|
46,788 |
|
149,061 |
|
258,357 |
Others |
|
22 |
|
|
|
106,515 |
|
56,186 |
|
18,212 |
|
- |
|
- |
|
62,223 |
|
243,136 |
Consumers and concessionaires |
|
|
|
|
|
60,298 |
|
25,844 |
|
6,926 |
|
- |
|
- |
|
44,473 |
|
137,541 |
EPE / FNDCT / PROCEL |
|
|
|
|
|
849 |
|
3,226 |
|
11,286 |
|
- |
|
- |
|
- |
|
15,361 |
Collections agreement |
|
|
|
|
|
45,368 |
|
27,116 |
|
- |
|
- |
|
- |
|
- |
|
72,484 |
Reversal fund |
|
|
|
|
|
- |
|
- |
|
- |
|
- |
|
- |
|
17,750 |
|
17,750 |
Total |
|
|
|
|
|
4,586,608 |
|
1,568,367 |
|
4,500,694 |
|
10,720,623 |
|
3,530,892 |
|
4,112,041 |
|
29,019,225 |
e) Credit risk
Cash, cash equivalents and derivatives are held with banks and financial institutions with rating AA-.
The credit risk on operations of Consumers, Concessionaires and Licensees is derived from the exposure to financial losses resulting from non-compliance with financial obligations by the counterparties. Monthly, the risk is monitored and classified according to the current exposure, considering the limit approved by Management.
( 34 ) COMMITMENTS
The Group’s commitments as regards long-term energy purchase agreements and plant construction projects at December 31, 2017, as follows:
|
|
|
|
Consolidated | ||||||||
Commitments at December 31, 2017 |
|
Duration |
|
Less than 1 year |
1-3 years |
|
4-5 years |
|
More than 5 years |
Total | ||
Leasings and rentals |
|
up to 15 years |
|
16,579 |
|
29,440 |
|
25,053 |
|
155,169 |
|
226,241 |
Energy purchase agreements (except Itaipu) |
|
up to 28 years |
|
10,870,752 |
|
18,433,971 |
|
17,250,704 |
|
41,537,486 |
|
88,092,913 |
Energy purchase from Itaipu |
|
up to 28 years |
|
2,281,157 |
|
4,564,825 |
|
4,478,641 |
|
13,133,756 |
|
24,458,379 |
Electricity network usage charge |
|
up to 32 years |
|
2,613,587 |
|
5,758,898 |
|
6,599,478 |
|
17,997,838 |
|
32,969,801 |
GSF renegotiation |
|
up to 30years |
|
26,997 |
|
13,267 |
|
47,284 |
|
276,207 |
|
363,755 |
Power plant and substation construction projects |
|
up to 3 years |
|
97,176 |
|
11,319 |
|
- |
|
- |
|
108,495 |
Trade payables |
|
up to 17 years |
|
102,441 |
|
237,673 |
|
244,851 |
|
1,005,781 |
|
1,590,746 |
|
|
|
|
16,008,689 |
|
29,049,393 |
|
28,646,011 |
|
74,106,237 |
|
147,810,330 |
The power plant construction projects include commitments made basically to construction related to the subsidiaries of the renewable energy segment.
137
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
( 35 ) NON-CASH TRANSACTIONS
|
Parent Company |
|
Consolidated | ||||
|
December 31, 2017 |
December 31, 2016 |
December 31, 2017 |
December 31, 2016 | |||
Transactions resulting from business combinations |
|
|
|
|
|
|
|
Borrowings and debentures |
- |
|
- |
|
- |
|
(1,156,621) |
Concession financial asset |
- |
|
- |
|
(12,338) |
|
876,281 |
Intangible assets |
- |
|
- |
|
(22,165) |
|
1,870,268 |
Property, plant and equipment assets |
- |
|
- |
|
(4,800) |
|
- |
Other net assets |
- |
|
- |
|
- |
|
1,911 |
|
- |
|
- |
|
(39,303) |
|
1,591,839 |
Cash and cash equivalents acquired in business combination |
- |
|
- |
|
- |
|
(95,164) |
Consideration paid in the acquisition |
- |
|
- |
|
(39,303) |
|
1,496,675 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other transactions |
|
|
|
|
|
|
|
Capital increase through earnings reserve |
- |
|
392,272 |
|
- |
|
392,272 |
Capital increase in investees through advances for future capital increase |
1,406,520 |
|
52,680 |
|
- |
|
- |
Capital increase in investees through dividends |
- |
|
12,026 |
|
- |
|
- |
Escrow deposits to property, plant and equipment |
|
|
- |
|
4 |
|
3,418 |
Interest capitalized in property, plant and equipment |
- |
|
- |
|
29,817 |
|
54,733 |
Interest capitalized in concession intangible asset - distribution infrastructures |
- |
|
- |
|
20,726 |
|
13,349 |
Reversal of contingencies against intangible assets |
- |
|
- |
|
- |
|
7,591 |
Repayments of intercompany loans with noncontrolling dividends |
- |
|
- |
|
259 |
|
- |
Provision for socio environmental costs capitalized in property, plant and equipment |
- |
|
- |
|
41,213 |
|
- |
Transfers between property, plant and equipment and other assets |
- |
|
- |
|
32,600 |
|
14,592 |
The balances disclosed in the "Transactions originated from business combination " lines refer to the complementary amounts related to the acquisition of RGE Sul, which final recognition occurred on September 30, 2017, according to note 12.5.
( 36 ) SIGNIFICANT FACT AND EVENTS AFTER THE REPORTING PERIOD
36.1.Issue debentures
In January 2018, subsidiaries issued simple non-convertible debentures with the following conditions and details:
Subsidiary |
|
Issue |
|
Quantity issued |
|
R$ thousand |
|
Maturity |
|
Interest |
|
Utilization |
CPFL Paulista |
|
9th issue – single series |
1,380,000 |
|
1,380,000 |
|
January 2021 |
|
Semiannual |
|
Working capital improvement | |
CPFL Piratininga |
|
9th issue – single series |
215,000 |
|
215,000 |
|
January 2021 |
|
Semiannual |
|
Working capital improvement | |
RGE |
|
9th issue – single series |
220,000 |
|
220,000 |
|
January 2021 |
|
Semiannual |
|
Working capital improvement | |
CPFL Santa Cruz |
|
2nd issue – single series |
190,000 |
|
190,000 |
|
January 2021 |
|
Semiannual |
|
Working capital improvement | |
CPFL Geração |
|
10th issue – single series |
190,000 |
|
190,000 |
|
December 2018 |
Semiannual |
|
Working capital improvement | ||
CPFL Brasil |
|
4th issue – single series |
115,000 |
|
115,000 |
|
January 2019 |
|
Semiannual |
|
Working capital improvement | |
RGE Sul |
|
6th issue – single series |
520,000 (*) |
|
300,000 |
|
December 2020 |
Semiannual |
|
Working capital improvement | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,610,000 |
|
|
|
|
|
|
(*) The debentures were issued in December 2017, and the proceeds were partially released (R$ 220,000 in December 2017 and R$ 300,000 in January 2018)
138
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
KPMG Auditores Independentes
Av. Barão de Itapura, 950 - 6º andar
13020-431 - Campinas/SP - Brasil
Caixa Postal 737 - CEP 13012-970 - Campinas/SP - Brasil
Telefone +55 (19) 2129-8700, Fax +55 (19) 2129-8728
www.kpmg.com.br
Independent auditors’ report on the individual and consolidated financial statements
To the Directors and Shareholders of CPFL Energia S.A.
Campinas - SP
We have audited the individual and consolidated financial statements of CPFL Energia S.A. (the “Company”), identified as the parent company and consolidated, respectively, which comprise the statement of financial position as of December 31, 2017 and the respective statements of income, comprehensive income, changes in shareholder´s equity and cash flows for the year then ended, and the corresponding notes comprising significant accounting policies and other explanatory information.
In our opinion, the aforementioned financial statements present fairly, in all material aspects, the individual and consolidated financial position of CPFL Energia S.A. as of December 31, 2017, and of its operations and 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), as issued by the International Accounting Standards Board (IASB).
We conducted our audit in accordance with Brazilian and International Standards on Auditing. Our responsibilities under those standards are further described in the “Auditors’ responsibilities for the audit of the individual and consolidated financial statements” section of our report. We are independent of the Company and its subsidiaries in accordance with the ethical requirements of Ethics Standards Boards for Accountants and Professional Standard issued by Federal Accounting Council, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the current period. These matters were addressed in the context of our audit of the individual and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
a) Revenue recognition from energy distributed, but not billed
(See notes 3.10 and 25 to the individual and consolidated financial statements)
Not billed revenue recognized by the Company corresponds to the electricity distributed, but not billed to the consumers, and its billing is measured based on the reading cycles that, in some cases, exceed the period of accounting closing. The recognition of the not billed revenue involves specificities that are related to the process, which take into consideration all of the historical data, the systems configuration, as well as Company´s judgments in order to estimate the consumption by consumers. Due to the relevance of the amounts and the judgments involved that can affect the amount of the revenues in the consolidated financial statements and in the amount of the investment recorded under the equity method in the individual financial statements, we considered this matter as significant for our audit.
139
How this matter has been conducted in our audit
We evaluated the design, implementation, and effectiveness of key internal controls related to the determination of the amount of the revenue recognized from energy distributed, but not billed. We involved our information technology specialists to evaluate the systems and the technology environment used in the determination of the balances recorded. We analyzed the key assumptions used by the Company in the development of such estimates, such as the technical and commercial losses index. In addition, we tested the integrity and accuracy of the data used in the calculation of the estimate made by the Company and performed a valuation test of the revenue recognized from energy distributed, but not invoiced, by comparing the amounts recognized by the Company with the the assumptions resulting from our independent auditing tests. We also assessed whether the disclosures in the consolidated financial statements were in accordance with the applicable standards.
Based on the evidence obtained from the procedures summarized above, we consider acceptable the revenue recognition from energy distributed, but not billed, in the context of the consolidated financial statements for year ended December 31, 2017, taken as a whole.
b) Impairment of the non-financial assets
(See notes 3.6, 13 and 14 to the individual and consolidated financial statements)
The Company has amounts of R$ 9,787,125 thousand and R$ 10,589,824 thousand in the consolidated financial statements as of December 31, 2017, related to fixed assets and intangible assets, respectively. The Company analyzes the existence of triggers of loss due to impairment of its cash generating units (“UGCs”) and carries out tests of recoverability of the assets for which indicators have been identified, using the discounted cash flow method, based on certain assumptions. Due to the degree of judgments involved and the impact that any changes in the assumptions might have on the value of such assets in the consolidated financial statements and in the amount of investment recorded under the equity method in the individual financial statements, we considered this matter as significant for our audit work.
How this matter has been conducted in our audit
We evaluated the design, implementation, and effectiveness of the key internal controls related to the preparation and review of the business plan, estimates and tests of impairment made available by the Company. We evaluated the adequacy of the estimate prepared by the Company, the determination of the UGCs and the methodology used to perform the test of impairment. With the assistance of our corporate finance specialists, we evaluated the reasonableness of the key assumptions and technical data used by the Company for conduction of the recoverability test of its assets, such as the discount rate, the energy sales volume and price, the continuity periods of the operation and expenditures for repair of equipment, and compared the sum of the discounted cash flows (value in use) and of the fair value net of selling expenses with the amount recorded in the fixed assets and intangible assets of the Company for determination of the impairment. In addition, we also considered the adequacy of the disclosures in the consolidated financial statements, related to the assumptions and judgments used in the test of the impairment of its assets.
During the course of our audit, we have identified misstatements that would affect the measurement and disclosure of the net realizable value of non-financial assets, which we not recorded by Management, as they were concluded as immaterial. Based on the evidence obtained from the procedures summarized above, we consider that the net realizable value of non- financial assets, as well as the related disclosures, is acceptable in the context of the consolidated financial statements for the year ended December 31, 2017, taken as a whole.
140
c) Impairment of the deferred tax assets
(See notes 3.11 and 9 to the individual and consolidated financial statements)
The individual and consolidated financial statements include the amounts of R$ 145,779 thousand and R$ 943,199 thousand, respectively, related to tax credits over tax loss carryforwards and temporary differences, for which the realization is supported by estimates of future profitability prepared by the Company based on its judgments and supported in its business plan. Due to the uncertainties that are inherent to the process of determining the future taxable income estimates, which support the recognition of the impairment of the tax credits, and the fact that any change in methodologies and assumptions for the determination of estimates that may have a material impact the value of such assets and, consequently, the individual and consolidated financial statements taken as a whole, we considered this matter as significant for our audit.
How this matter has been conducted in our audit
We evaluated the design, implementation and operational effectiveness of the key internal controls related to the preparation and review of the business plan, budget, technical studies and analyses as to the probability of existence of future taxable income. In addition, with the support of our corporate finance specialists, we analyzed the reasonableness and consistency of the data and assumptions and of the methodologies used by the Company, particularly those relative to the projection of future taxable income. This includes the comparison of such assumptions with the data obtained from external sources, as well as the projected economic growth, volume, and price of sales of energy, the continuity of the operations, expenditures with repair of the equipment, the inflation of costs and the discount rates. With the support of our tax specialists, we evaluated the deferred tax calculation in which the current tax rates are applied, as well as the study of the recoverability of the deferred tax assets. We also assessed whether the disclosures made in the individual and consolidated financial statements were in accordance with the applicable standards.
Based on the evidence obtained from the procedures summarized above, we consider that the net realizable value of deferred tax assets is acceptable in the context of the individual and consolidated financial statements related to the fiscal year ended on December 31, 2017, taken as a whole.
d) Acquisition of AES Sul
(See our notes 3.15 and 12.5 to the consolidated financial statements)
During fiscal year of 2016, the Company acquired AES Sul Distribuidora Gaúcha de Energia S.A. for the amount of R$ 1,591 million and reported the preliminary amounts of the fair value allocations of assets and liabilities in the consolidated financial statements as of December 31, 2016. In 2017, the Company retrospectively adjusted the preliminary amounts recognized on the date of acquisition to reflect the new information obtained in relation to facts and circumstances existing on the date of acquisition. The accounting of such acquisition required the use of estimates and judgments by the Company in relation to the accounting treatment, to the determination of the fair value of assets acquired and of the liabilities assumed, to the disclosures of the information related to such transactions, as well as the adequacy of the relevant accounting policies of the acquired company. Consequently, we consider the measurement, accounting, and disclosure of the effects of the mentioned acquisition as main auditing matter.
141
How this matter has been conducted in our audit
We evaluated the design, implementation and operational effectiveness of the key internal controls relative to the identification of assets acquired and liabilities assumed and the final of the purchase price allocation and accounting record of the allocation of the price and disclosure. We evaluated, with the technical support of our specialists in corporate finance, the integrity and accuracy of the calculation models prepared by the Company in the process of identification and final valuation of the assets and liabilities. In addition, with the support of our specialists, we evaluated the final fair value allocations of the fixed assets. We also assessed the adequacy of the disclosures related to the acquisition and to the adjustments of the preliminary amounts recognized on the date of acquisition in the consolidated financial statements.
Based on the audit procedures performed to test the measurement adjustments related to the acquisition of AES Sul prepared by the entity, and on the audit evidence obtained, we considered acceptable the recognition and disclosure of the business combination in the context of the consolidated financial statements for the fiscal year ended on December 31, 2017, taken as a whole.
Statements of Value Added
The individual and consolidated statements of value added (DVA) for the year ended December 31, 2017, prepared under the responsibility of the Company's management, and presented as supplementary information for IFRS purposes, were submitted for the auditing procedures jointly with audit of the Company's financial statements. For the purposes of forming our opinion, we evaluate whether these statements are reconciled with the financial statements and accounting records, as applicable, and if their form and content are in accordance with the criteria as defined in Technical Pronouncement CPC 09 - Statement of Added Value. In our opinion, this statement of value added have been properly prepared, in all material respects, in accordance with the criteria defined in this Technical Pronouncement and is consistent with the individual and consolidated financial statements taken as a whole.
Audit of the corresponding balances related to the comparative year
The corresponding amounts related to the statement of financial position as of December 31, 2016, the statements of income, comprehensive income, changes in shareholder´s equity, cash flows and value added (supplementary information), related to the year then ended, presented for comparative purposes, were audited by other independent auditors who issued an unqualified report dated March 13, 2017.
Management is responsible for the other information, which comprises the Management report.
Our opinion on the individual and consolidated financial statements does not cover the Management report and we do not express any form of assurance conclusion thereon.
In connection with our audit of the individual and consolidated financial statements, our responsibility is to read the Management Report and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this Management Report, we are required to report that fact. We have nothing to report in this regard.
142
Responsibilities of management and those charged with governance for the individual and consolidated 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), as issued by the International Accounting Standards Board (IASB), and for such internal control as management determines is necessary to enable the preparation of the financial statements are free from material misstatement, due to fraud or error.
In preparing the individual and consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditors’ responsibilities for the audit of the individual and consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the individual and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Brazilian and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these individual and consolidated financial statements.
As part of an audit in accordance with Brazilian and International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
· Identify and assess the risks of material misstatement of the individual and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
· Obtain an understanding of internal control relevant to the audit 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.
· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
143
· Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the individual and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the individual and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
· Obtain sufficient appropriate audit evidence regarding the financial information of the group entities or business activities within the Company to express an opinion on the individual and consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit, and therefore, responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter, or, when in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Campinas, March 20, 2018.
KPMG Auditores Independentes
CRC (Regional Accounting Council) 2SP027612/O-4
(Original in Portuguese signed by)
Marcio José dos Santos
Accountant CRC 1SP252906/O-0
144
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - 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 2017 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 20, 2018, 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 22, 2018.
Liu ChengGang
President
Jia Jia
Director
Ricardo Florence dos Santos
Director
145
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
BOARD OF DIRECTORS |
Yuhai Hu
Chairman
Daobiao Chen
Vice Chairman
Yang Qu
Yumeng Zhao
Andre Dorf
Antonio Kandir
Marcelo Amaral Moraes
Directors
EXECUTIVE BOARD |
ANDRE DORF
Chief Executive Officer, holding also the function of Chief Business Development Officer
YUMENG ZHAO
Deputy Chief Executive Officer
GUSTAVO ESTRELLA
Chief Financial and
Investor Relations Officer
GUSTAVO PINTO GACHINEIRO
Chief Institutional Relations Officer
WAGNER LUIZ SCHNEIDER DE FREITAS
Chief Business Planning and Management Officer
LUIS HENRIQUE FERREIRA PINTO
Chief Regulated Operations Officer
KARIN REGINA LUCHESI
Chief Market Operations Officer
ACCOUNTING DIVISION |
SERGIO LUIS FELICE
Accounting Director CT CRC 1SP192767/O-6
146
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
In compliance with the provisions in items V and VI of article 25 of the Brazilian Securities & Exchange Commission (CVM) Instruction No. 480, of December 7, 2009, as amended by CVM Instruction No. 586, of June 8, 2017, the chief executive officers and the officers of CPFL Energia S.A, a publicly traded company, with its registered office at Rodovia Engo Miguel Noel Nascentes Burnier, km 2,5, Parque São Quirino - Campinas - SP - Brasil, enrolled with the National Register of Legal Entities (CNPJ ) under No. 02.429.144/0001-93, hereby stated that:
a) they have reviewed and discussed, and agree with, the opinions expressed in the opinion of KPMG Auditores Independentes on the financial statements of CPFL Energia of December 31, 2017;
b) they have reviewed and discussed, and agree with, the financial statements of CPFL Energia of December 31, 2017;
Campinas, March 20, 2018.
__________________________________ André Dorf Chief Executive Officer, holding also the function of Chief Business Development Officer | |||
__________________________________ Yumeng Zhao Deputy Chief Executive Officer
| |||
Gustavo Pinto Gachineiro Chief Institutional Relations Officer
|
|
Gustavo Estrella Chief Financial and Investor Relations Officer | |
__________________________________ Wagner Luiz Schneider de Freitas Chief Business Planning and Management Officer |
__________________________________ Karin Regina Luchesi Chief Market Operations Officer | ||
|
| ||
__________________________________ Luis Henrique Ferreira Pinto Chief Regulated Operations Officer |
147
(Free Translation of the original in Portuguese)
Standard Financial Statements –DFP – Date: December 31, 2017 - CPFL Energia S.A.
In compliance with the provisions in items V and VI of article 25 of the Brazilian Securities & Exchange Commission (CVM) Instruction No. 480, of December 7, 2009, as amended by CVM Instruction No. 586, of June 8, 2017, the chief executive officers and the officers of CPFL Energia S.A, a publicly traded company, with its registered office at Rodovia Engo Miguel Noel Nascentes Burnier, km 2,5, Parque São Quirino - Campinas - SP - Brasil, enrolled with the National Register of Legal Entities (CNPJ ) under No. 02.429.144/0001-93, hereby stated that:
a) they have reviewed and discussed, and agree with, the opinions expressed in the opinion of KPMG Auditores Independentes on the financial statements of CPFL Energia of December 31, 2017;
b) they have reviewed and discussed, and agree with, the financial statements of CPFL Energia of December 31, 2017;
Campinas, March 20, 2018.
__________________________________ André Dorf Chief Executive Officer, holding also the function of Chief Business Development Officer | |||
__________________________________ Yumeng Zhao Deputy Chief Executive Officer
| |||
Gustavo Pinto Gachineiro Chief Institutional Relations Officer
|
|
Gustavo Estrella Chief Financial and Investor Relations Officer | |
__________________________________ Wagner Luiz Schneider de Freitas Chief Business Planning and Management Officer |
__________________________________ Karin Regina Luchesi Chief Market Operations Officer | ||
|
| ||
__________________________________ Luis Henrique Ferreira Pinto Chief Regulated Operations Officer |
148
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.