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____.
Campinas, November 13, 2017 – CPFL Energia S.A. (B3: CPFE3 and NYSE: CPL), announces its 3Q17 results. The financial and operational information herein, unless otherwise indicated, is presented on a consolidated basis and is in accordance with the applicable legislation. Comparisons are relative to 3Q16, unless otherwise stated.
CPFL ENERGIA ANNOUNCES ITS 3Q17 RESULTS
Indicators (R$ Million) |
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Sales within the Concession Area - GWh |
15,933 |
13,454 |
18.4% |
48,748 |
41,504 |
17.5% |
Captive Market |
10,770 |
9,549 |
12.8% |
33,894 |
30,240 |
12.1% |
Free Client |
5,162 |
3,905 |
32.2% |
14,854 |
11,264 |
31.9% |
Gross Operating Revenue |
11,073 |
7,377 |
50.1% |
28,960 |
22,189 |
30.5% |
Net Operating Revenue |
7,784 |
4,783 |
62.7% |
19,285 |
13,600 |
41.8% |
EBITDA(1) |
1,275 |
1,120 |
13.8% |
3,498 |
3,121 |
12.1% |
Net Income |
390 |
269 |
44.9% |
745 |
742 |
0.5% |
Investments(2) |
544 |
636 |
-14.4% |
1,923 |
1,595 |
20.6% |
|
|
|
|
|
|
|
Notes:
(1) EBITDA is calculated from the sum of net income, taxes, financial result, depreciation/amortization, as CVM Instruction no. 527/12. See the calculation in item 4.6 of this report;
(2) Includes investment related to the construction of transmission lines of CPFL Transmissão Morro Agudo and, according to the requirements of IFRIC 12, it was recorded as “Financial Asset of Concession” (in non-current assets). Does not include special obligations.
3Q17 HIGHLIGHTS
• Increase in load in the concession area (+4.2%);
• Reduction in the contracted demand: -0.9% Off Peak and -1.3% Peak (Sep-17 x Sep-16);
• Increases of 62.7% in Net Operating Revenue and of 13.8% in EBITDA;
• Investments of R$ 544 million;
• Pro forma net debt of R$ 13.7 billion and leverage of 3.24x pro forma Net Debt/EBITDA;
• CPFL Piratininga tariff adjustment, in Out-17, with an average effect of +17.28% to be perceived by the consumers;
• Current status of State Grid transaction: Tag Along Tender Offer registered by CVM; auction will occur on Nov 30, according to the Notice released on Oct 31;
• Launch of CPFL Inova, an open innovation program created by CPFL Energia in partnership with Endeavor Brasil.
Conference Call with Simultaneous Translation into English (Bilingual Q&A) · Thursday, November 23, 2017 – 11:00 a.m. (Brasília), 08:00 a.m. (ET) ( Portuguese: 55-11-3193-1001 or 55-11-2820-4001 (Brazil) ( English: 1-888-700-0802 (USA) and 1-786-924-6977 (Other Countries) |
Investor Relations Department 55-19-3756-6083 www.cpfl.com.br/ir |
INDEX
1) MESSAGE FROM THE CEO | 4 |
2) ENERGY SALES | 5 |
2.1) Sales within the Distributors’ Concession Area | 5 |
2.1.1) Sales by Segment – Concession Area | 6 |
2.1.2) Sales to the Captive Market | 6 |
2.1.3) Free Clients | 7 |
2.2) Contracted Demand (% - high voltage) | 8 |
2.3) Generation Installed Capacity | 8 |
3) INFORMATION ON INTEREST IN COMPANIES AND CRITERIA OF FINANCIAL STATEMENTS | |
CONSOLIDATION | 9 |
3.1) Consolidation of CPFL Renováveis Financial Statements | 11 |
3.2) Consolidation of RGE Sul Financial Statements | 11 |
3.3) Economic-Financial Performance Presentation | 11 |
4) ECONOMIC-FINANCIAL PERFORMANCE | 12 |
4.1) Opening of economic-financial performance by business segment | 12 |
4.2) Reclassification of the Concession Financial Asset | 13 |
4.3) Sectoral Financial Assets and Liabilities | 13 |
4.4) Operating Revenue | 14 |
4.5) Cost of Electric Energy | 14 |
4.6) Operating Costs and Expenses | 16 |
4.7) EBITDA | 18 |
4.8) Financial Result | 19 |
4.9) Net Income | 21 |
5) INDEBTEDNESS | 22 |
5.1) Debt (IFRS) | 22 |
5.2) Debt in Financial Covenants Criteria | 23 |
5.2.1) Debt Amortization Schedule in Financial Covenants Criteria | 23 |
5.2.2) Indexation and Debt Cost in Financial Covenants Criteria | 24 |
5.3) Net Debt in Financial Covenants Criteria and Leverage | 25 |
6) INVESTMENTS | 26 |
6.1) Capital Expenditures | 26 |
6.2) Projected Capital Expenditures | 26 |
7) STOCK MARKETS | 27 |
7.1) Stock Performance | 27 |
7.2) Daily Average Volume | 28 |
8) CORPORATE GOVERNANCE | 28 |
9) SHAREHOLDERS STRUCTURE | 29 |
9.1) State Grid Transaction | 30 |
10) PERFORMANCE OF THE BUSINESS SEGMENTS | 31 |
10.1) Distribution Segment | 31 |
10.1.1) Economic-Financial Performance | 31 |
10.1.1.1) Reclassification of the Adjustments to the Concession´s Financial Asset | 31 |
10.1.1.2) Sectoral Financial Assets and Liabilities | 31 |
11.1.1.3) Operating Revenue | 32 |
10.1.1.4) Cost of Electric Energy | 33 |
10.1.1.5) Operating Costs and Expenses | 35 |
10.1.1.6) EBITDA | 37 |
10.1.1.7) Financial Result | 37 |
Página 2 de 65
10.1.1.8) Net Income | 39 |
10.1.2) Tariff events | 40 |
10.1.3) Operating Performance of Distribution | 41 |
10.2) Commercialization and Services Segments | 43 |
10.2.1) Commercialization Segment | 43 |
10.2.2) Services Segment | 43 |
10.3) Conventional Generation Segment | 44 |
10.3.1) Economic-Financial Performance | 44 |
10.3.1.1) Operating Revenue | 44 |
10.3.1.2) Cost of Electric Power | 44 |
10.3.1.3) Operating Costs and Expenses | 45 |
10.3.1.4) Equity Income | 46 |
10.3.1.5) EBITDA | 47 |
10.3.1.6) Financial Result | 47 |
10.3.1.7) Net Income | 48 |
10.4) CPFL Renováveis | 48 |
10.4.1) Economic-Financial Performance | 48 |
10.4.1.1) Variations in the Income Statement of CPFL Renováveis | 48 |
10.4.1.2) Operating Revenue | 48 |
10.4.1.3) Cost of Electric Power | 49 |
10.4.1.4) Operating Costs and Expenses | 49 |
10.4.1.5) EBITDA | 50 |
10.4.1.6) Financial Result | 50 |
10.4.1.7) Net Income | 51 |
10.4.2) Status of Generation Projects – 100% Participation | 51 |
11) ATTACHMENTS | 52 |
11.1) Statement of Assets – CPFL Energia | 52 |
11.2) Statement of Liabilities – CPFL Energia | 53 |
11.3) Income Statement – CPFL Energia | 54 |
11.4) Cash Flow – CPFL Energia | 55 |
11.5) Income Statement – Conventional Generation Segment | 56 |
11.6) Income Statement – CPFL Renováveis | 57 |
11.7) Income Statement – Distribution Segment | 58 |
11.8) Income Statement – Distribution Segment (without RGE Sul) | 59 |
11.9) Income Statement – Distribution Segment | 60 |
11.10) Sales within the Concession Area by Distributor (In GWh) | 63 |
11.11) Sales to the Captive Market by Distributor (in GWh) | 64 |
11.12) Reconciliation of Net Debt/EBITDA Pro Forma ratio of CPFL Energia for purposes of financial | |
covenants calculation | 65 |
Página 3 de 65
The CPFL group continued to be very active in the third quarter of 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.
Third quarter results reflected such gains and market conditions in the period. The distribution segment registered a significant increase in energy sales (+4.2%), disregarding the positive effect of the acquisition of RGE Sul. Residential, industrial and commercial classes registered growth of 4.4%, 2.8% and 1.0%, respectively, reflecting the low comparison base of 2016 and the resumption of economy activity. The acquisition of RGE Sul, consolidated since November 2016, added 2,045 GWh to sales volumes in 3Q17.
CPFL group’s operating cash generation, measured by EBITDA, reached R$ 1,275 million in 3Q17, an increase of 13.8%, 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 3.24 at the end of the quarter, remaining stable in relation to previous quarters. 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.
The Company presented advances and achievements throughout the quarter. We continue to promote organizational reviews in order to simplify our processes and structure, always aiming at greater focus on business. It is worth highlighting the heavy investment in the asset base of CPFL Paulista, RGE and RGE Sul distributors, which will undergo the tariff review process in 2018.
In addition, we launched the "CPFL Inova" program on October 19, when Innovation Day was celebrated. The initiative is an open innovation program created by CPFL Energia in partnership with Endeavor Brasil, a global NGO to foster entrepreneurship. The project will last seven months and aims to accelerate up to 12 companies that offer solutions applicable to the energy and infrastructure sector.
Regarding the process of selling the control of CPFL Energia, we had an outcome in relation to the Mandatory Tender Offer of the Company. On October 26, the CVM formally approved all relevant documents and the continuity of the Mandatory Tender Offer resulting from the direct transfer of control. On October 31, the Company released a Material Fact informing the publication, on that date, of the Form of Notice of the Offer. The auction will take place on November 30.
We continue working on value initiatives for our shareholders and our investment plan (around R$ 2.8 billion for 2017 and over R$ 10 billion for the next 5 years), 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.
Andre Dorf
CEO of CPFL Energia
Página 4 de 65
Sales within the Concession Area - GWh | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Captive Market |
10,770 |
9,549 |
12.8% |
33,894 |
30,240 |
12.1% |
Free Client |
5,162 |
3,905 |
32.2% |
14,854 |
11,264 |
31.9% |
Total |
15,933 |
13,454 |
18.4% |
48,748 |
41,504 |
17.5% |
Sales within the Concession Area (without RGE Sul) - GWh | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Captive Market |
9,260 |
9,549 |
-3.0% |
28,704 |
30,240 |
-5.1% |
Free Client |
4,628 |
3,905 |
18.5% |
13,317 |
11,264 |
18.2% |
Total |
13,888 |
13,454 |
3.2% |
42,021 |
41,504 |
1.2% |
Note: RGE Sul was consolidated in November 2016. For more information, see item 3.2 of this report.
In 3Q17, sales within the concession area, achieved by the distribution segment, totaled 15,933 GWh, an increase of 18.4%, mainly due to the acquisition of RGE Sul. Disregarding the effect of this acquisition, sales within the concession area would have totaled 13,888 GWh, an increase of 3.2%.
Sales to the captive market totaled 10,770 GWh in 3Q17, an increase of 12.8%, mainly due to the acquisition of RGE Sul; disregarding the effect of this acquisition, sales to the captive market would have totaled 9,260 GWh, a reduction of 3.0%, still reflecting migration of customers to the free market. The quantity of energy, in GWh, which corresponds to the consumption of free clients in the concession area of group’s distributors, billed through the Tariff for the Usage of the Distribution System (TUSD), reached 5,162 GWh in 3Q17, an increase of 32.2%, mainly due to the acquisition of RGE Sul; disregarding the effect of this acquisition, the quantity of energy billed through TUSD would have reached 4,628 GWh, an increase of 18.5%.
Sales within the Concession Area - GWh | ||||||||
|
3Q17 |
3Q16 |
Var. |
Part. |
9M17 |
9M16 |
Var. |
Part. |
Residential |
4,538 |
3,755 |
20.8% |
28.5% |
14,256 |
12,023 |
18.6% |
29.2% |
Industrial |
6,221 |
5,338 |
16.5% |
39.0% |
18,030 |
15,802 |
14.1% |
37.0% |
Commercial |
2,478 |
2,171 |
14.1% |
15.6% |
8,102 |
7,173 |
13.0% |
16.6% |
Others |
2,696 |
2,189 |
23.2% |
16.9% |
8,360 |
6,506 |
28.5% |
17.1% |
Total |
15,933 |
13,454 |
18.4% |
100.0% |
48,748 |
41,504 |
17.5% |
100.0% |
Sales within the Concession Area (without RGE Sul) - GWh | ||||||||
|
3Q17 |
3Q16 |
Var. |
Part. |
9M17 |
9M16 |
Var. |
Part. |
Residential |
3,921 |
3,755 |
4.4% |
28.2% |
12,227 |
12,023 |
1.7% |
29.1% |
Industrial |
5,487 |
5,338 |
2.8% |
39.5% |
15,908 |
15,802 |
0.7% |
37.9% |
Commercial |
2,194 |
2,171 |
1.0% |
15.8% |
7,143 |
7,173 |
-0.4% |
17.0% |
Others |
2,287 |
2,189 |
4.5% |
16.5% |
6,742 |
6,506 |
3.6% |
16.0% |
Total |
13,888 |
13,454 |
3.2% |
100.0% |
42,021 |
41,504 |
1.2% |
100.0% |
Note: The tables with sales within the concession area by distributor are attached to this report in item 11.10.
Página 5 de 65
Noteworthy in 3Q17, in the concession area:
· |
Residential and commercial classes (28.5% and 15.6% of total sales, respectively):increases of 20.8% and 14.1%, respectively, influenced by the acquisition of RGE Sul. Disregarding the effect of this acquisition, we would have increases of 4.4% and 1.0%, respectively. Highlight in the residential class for the CPC growth (Consumption per Consumer - kWh/CU/month), by 2.2%, a 2.0% increase in the volume of consumer units, a higher number of days in the billing cycle, by 0.8%, and milder temperatures this year, by -0.6%; |
· |
Industrial class (39.0% of total sales): increase of 16.5%, influenced by the acquisition of RGE Sul. Disregarding the effect of this acquisition, we would have an increase of 2.8%, reflecting the performance of the main industrial activities in the concession area of CPFL Energia, which show the second consecutive growth in the margin. |
Note: in parentheses, the variation in percentage points from 3Q16 to 3Q17.
Sales to the Captive Market - GWh | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Residential |
4,538 |
3,755 |
20.8% |
14,256 |
12,023 |
18.6% |
Industrial |
1,631 |
1,738 |
-6.1% |
4,939 |
5,415 |
-8.8% |
Commercial |
1,988 |
1,922 |
3.4% |
6,584 |
6,447 |
2.1% |
Others |
2,613 |
2,134 |
22.4% |
8,116 |
6,355 |
27.7% |
Total |
10,770 |
9,549 |
12.8% |
33,894 |
30,240 |
12.1% |
Página 6 de 65
Sales to the Captive Market (without RGE Sul) - GWh | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Residential |
3,921 |
3,755 |
4.4% |
12,227 |
12,023 |
1.7% |
Industrial |
1,396 |
1,738 |
-19.6% |
4,241 |
5,415 |
-21.7% |
Commercial |
1,739 |
1,922 |
-9.6% |
5,735 |
6,447 |
-11.0% |
Others |
2,205 |
2,134 |
3.3% |
6,501 |
6,355 |
2.3% |
Total |
9,260 |
9,549 |
-3.0% |
28,704 |
30,240 |
-5.1% |
Note: The tables with captive market sales by distributor are attached to this report in item 11.11.
The increase of 12.8% (1.221 GWh) in sales to the captive market, from 9,549 GWh in 3Q16 to 10,770 GWh in 3Q17, was influenced by the acquisition of RGE Sul. Disregarding the effect of this acquisition, the sales to the captive market would have totaled 9,260 GWh in 3Q17, representing a reduction of 3.0%, mainly due to the performance of the industrial (-19.6%) and commercial (-9.6%) classes, reflecting the migration of customers to the free market, as explained in item 2.1.
Free Client - GWh | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Industrial |
4,590 |
3,601 |
27.5% |
13,092 |
10,387 |
26.0% |
Commercial |
489 |
249 |
96.6% |
1,518 |
726 |
109.1% |
Others |
83 |
55 |
50.8% |
244 |
151 |
61.6% |
Total |
5,162 |
3,905 |
32.2% |
14,854 |
11,264 |
31.9% |
Free Client (without RGE Sul) - GWh | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Industrial |
4,090 |
3,601 |
13.6% |
11,667 |
10,387 |
12.3% |
Commercial |
455 |
249 |
83.0% |
1,409 |
726 |
94.0% |
Others |
82 |
55 |
48.6% |
241 |
151 |
59.6% |
Total |
4,628 |
3,905 |
18.5% |
13,317 |
11,264 |
18.2% |
Free Client by Distributor - GWh | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
CPFL Paulista |
2,421 |
2,067 |
17.1% |
6,950 |
5,910 |
17.6% |
CPFL Piratininga |
1,478 |
1,232 |
20.0% |
4,274 |
3,652 |
17.0% |
RGE |
596 |
523 |
13.9% |
1,725 |
1,455 |
18.6% |
CPFL Santa Cruz |
35 |
16 |
118.2% |
93 |
41 |
125.6% |
CPFL Jaguari |
48 |
24 |
99.2% |
135 |
76 |
78.9% |
CPFL Mococa |
10 |
7 |
46.1% |
27 |
21 |
25.5% |
CPFL Leste Paulista |
15 |
14 |
7.3% |
44 |
42 |
6.2% |
CPFL Sul Paulista |
25 |
22 |
15.0% |
69 |
68 |
2.0% |
RGE Sul (*) |
534 |
- |
- |
1,538 |
- |
- |
Total |
5,162 |
3,905 |
32.2% |
14,854 |
11,264 |
31.9% |
Note: (*) Considers the quantity of energy billed through the TUSD from 3Q17 and 9M17.
Página 7 de 65
Contracted Demand Evolution | % compared to the same month of the previous year
2.3) Generation Installed Capacity
In 3Q17, the installed capacity of generation of CPFL Energia, considering the proportional stake in each project, reached 3,167 MW, representing an expansion of 2.5% compared to 3Q16. This increase is due to the commercial start-up of Campo do Ventos, São Benedito and Pedra Cheirosa Wind Complexes.
Generation Installed Capacity | MW
Note: Take into account CPFL Energia’s 51.61% stake in CPFL Renováveis.
Página 8 de 65
The interests directly or indirectly held by CPFL Energia in its subsidiaries and jointly-owned entities are described below. Except for: (i) the jointly-owned entities ENERCAN, BAESA, Foz do Chapecó and EPASA, that, as from January 1, 2013 are no longer proportionally consolidated in the Company’s financial statements, being their assets, liabilities and results accounted for using the equity method of accounting, and (ii) the investment in Investco S.A. recorded at cost by the subsidiary Paulista Lajeado, the other units are fully consolidated.
As of September 30, 2017 and 2016, the participation of non-controlling interests stated in the consolidated statements refers to the third-party interests in the subsidiaries CERAN, Paulista Lajeado and CPFL Renováveis. Since November 1st, 2016 CPFL Energia is considering the full consolidation of RGE Sul.
Energy distribution |
Company Type |
Equity Interest |
Location (State) |
Number of municipalities |
Approximate number of consumers |
Concession term |
End of the concession |
Companhia Paulista de Força e Luz ("CPFL Paulista") |
Publicly-quoted corporation |
Direct |
Interior of São Paulo |
234 |
4,366 |
30 years |
November 2027 |
Companhia Piratininga de Força e Luz ("CPFL Piratininga") |
Publicly-quoted corporation |
Direct |
Interior and coast of São Paulo |
27 |
1,710 |
30 years |
October 2028 |
Rio Grande Energia S.A. ("RGE") |
Publicly-quoted corporation |
Direct |
Interior of Rio Grande do Sul |
255 |
1,477 |
30 years |
November 2027 |
RGE Sul Distribuidora de Energia S.A. ("RGE Sul") |
Publicly-quoted corporation |
Indirect |
Interior of Rio Grande do Sul |
118 |
1,333 |
30 years |
November 2027 |
Companhia Luz e Força Santa Cruz ("CPFL Santa Cruz") |
Private corporation |
Direct |
Interior of São Paulo and Paraná |
27 |
212 |
30 years |
July 2045 |
Companhia Leste Paulista de Energia ("CPFL Leste Paulista") |
Private corporation |
Direct |
Interior of São Paulo |
7 |
58 |
30 years |
July 2045 |
Companhia Jaguari de Energia ("CPFL Jaguari") |
Private corporation |
Direct |
Interior of São Paulo |
2 |
41 |
30 years |
July 2045 |
Companhia Sul Paulista de Energia ("CPFL Sul Paulista") |
Private corporation |
Direct |
Interior of São Paulo |
5 |
86 |
30 years |
July 2045 |
Companhia Luz e Força de Mococa ("CPFL Mococa") |
Private corporation |
Direct |
Interior of São Paulo and Minas Gerais |
4 |
47 |
30 years |
July 2045 |
Energy generation (conventional and renewable sources) |
Company Type |
Equity Interest |
Location (State) |
Number of plants / type of energy |
Installed capacity | |
Total |
CPFL participation | |||||
CPFL Geração de Energia S.A. ("CPFL Geração") |
Publicly-quoted corporation |
Direct |
São Paulo and Goiás |
1 Hydroelectric, 3 SHPPs (a) |
1,295 |
678 |
CERAN - Companhia Energética Rio das Antas ("CERAN") |
Private corporation |
Indirect |
Rio Grande do Sul |
3 Hydroelectric |
360 |
234 |
Foz do Chapecó Energia S.A. ("Foz do Chapecó") (b) |
Private corporation |
Indirect |
Santa Catarina and |
1 Hydroelectric |
855 |
436 |
Campos Novos Energia S.A. ("ENERCAN") |
Private corporation |
Indirect |
Santa Catarina |
1 Hydroelectric |
880 |
429 |
BAESA - Energética Barra Grande S.A. ("BAESA") |
Publicly-quoted corporation |
Indirect |
Santa Catarina and |
1 Hydroelectric |
690 |
173 |
Centrais Elétricas da Paraíba S.A. ("EPASA") |
Private corporation |
Indirect |
Paraíba |
2 Thermoelectric |
342 |
182 |
Paulista Lajeado Energia S.A. ("Paulista Lajeado") |
Private corporation |
Indirect |
Tocantins |
1 Hydroelectric |
903 |
63 |
CPFL Energias Renováveis S.A. ("CPFL Renováveis") |
Publicly-quoted corporation |
Indirect |
See chapter 10.4.2 |
See chapter 10.4.2 |
See chapter 10.4.2 |
See chapter 10.4.2 |
CPFL Centrais Geradoras Ltda. ("CPFL Centrais Geradoras") |
Limited company |
Direct |
São Paulo |
6 MHPPs (d) |
4 |
4 |
Notes:
(a) SHPP – Small Hydroelectric Power Plant;
(b) The joint venture Chapecoense fully consolidates the interim financial statements of its direct subsidiary, Foz de Chapecó;
(c) Paulista Lajeado has a 7% participation in the installed power of Investco S.A. (5.94% share of its capital);
(d) MHPP – Micro Hydroelectric Power Plant;
Página 9 de 65
Energy commercialization |
Company Type |
Core activity |
Equity Interest |
CPFL Comercialização Brasil S.A. ("CPFL Brasil") |
Private corporation |
Energy commercialization |
Direct |
Clion Assessoria e Comercialização de Energia Elétrica Ltda. ("CPFL Meridional") |
Limited company |
Commercialization and provision of energy services |
Indirect |
CPFL Comercialização Cone Sul S.A. ("CPFL Cone Sul") |
Private corporation |
Energy commercialization |
Indirect |
CPFL Planalto Ltda. ("CPFL Planalto") |
Limited company |
Energy commercialization |
Direct |
CPFL Brasil Varejista S.A. ("CPFL Brasil Varejista") |
Private corporation |
Energy commercialization |
Indirect |
Services |
Company Type |
Core activity |
Equity Interest |
CPFL Serviços, Equipamentos, Industria e Comércio S.A. ("CPFL Serviços") |
Private corporation |
Manufacturing, commercialization, rental and maintenance of electro-mechanical equipment and service provision |
Direct |
NECT Serviços Administrativos Ltda. ("Nect") |
Limited company |
Provision of administrative services |
Direct |
CPFL Atende Centro de Contatos e Atendimento Ltda. ("CPFL Atende") |
Limited company |
Provision of telephone answering services |
Direct |
CPFL Total Serviços Administrativos Ltda. ("CPFL Total") |
Limited company |
Billing and collection services |
Direct |
CPFL Eficiência Energética S.A. ("CPFL ESCO") |
Private corporation |
Management in Energy Efficiency |
Direct |
TI Nect Serviços de Informática Ltda. ("Authi") (e) |
Limited company |
IT services |
Direct |
CPFL GD S.A. ("CPFL GD") (f) |
Private corporation |
Electric energy generation services |
Indirect |
(e) In September, 2014 the direct subsidiary TI Nect Serviços de Informática Ltda. (“Authi”), was set up with the objective of providing informatics, information technology maintenance, system update, program development and customization and computer and peripheral equipment maintenance services;
(f) The main objective of CPFL GD S.A., incorporated in August 2015 and fully controlled by CPFL Eficiência Energética S.A., is the provision of general consultancy services in the electric energy market and commercialization of assets related to the electric energy generation plants;
Página 10 de 65
Others |
Company Type |
Core activity |
Equity Interest |
CPFL Jaguariúna Participações Ltda. ("CPFL Jaguariúna") |
Limited company |
Venture capital company |
Direct |
CPFL Jaguari de Geração de Energia Ltda. ("Jaguari Geração") |
Limited company |
Venture capital company |
Direct |
Chapecoense Geração S.A. ("Chapecoense") |
Private corporation |
Venture capital company |
Indirect |
Sul Geradora Participações S.A. ("Sul Geradora") |
Private corporation |
Venture capital company |
Indirect |
CPFL Telecom S.A. ("CPFL Telecom") |
Private corporation |
Telecommunication services |
Direct |
CPFL Transmissão Piracicaba S.A. ("CPFL Transmissão Piracicaba") |
Private corporation |
Electric energy transmission services |
Indirect |
CPFL Transmissão Morro Agudo S.A. ("CPFL Transmissão Morro Agudo") (g) |
Private corporation |
Electric energy transmission services |
Indirect |
(g) The incorporation of CPFL Transmissora Morro Agudo S.A., subsidiary of CPFL Geração, was approved in January 2015, with the objective of building and operating electric energy transmission concessions, including construction, implementation, operation and maintenance of transmission facilities of the basic network of the Interlinked National System (“SIN”).
3.1) Consolidation of CPFL Renováveis Financial Statements
On September 30, 2017, CPFL Energia indirectly held 51.61% of CPFL Renováveis, through its subsidiary CPFL Geração.
CPFL Renováveis has been fully consolidated (100%, line by line), in CPFL Energia’s financial statements since August 1, 2011, and the interest held by the non-controlling shareholders has been mentioned bellow the net income line (in the Financial Statements), as “Non-Controlling Shareholders’ Interest”, and in the Shareholders Equity (in the Balance Sheet) in the line with the same name.
3.2) Consolidation of RGE Sul Financial Statements
On September 30, 2017, CPFL Energia indirectly held 100% of RGE Sul, through its subsidiary CPFL Jaguariúna. RGE Sul has been fully consolidated (100%, line by line), in CPFL Energia’s financial statements since November 1st, 2016.
In the analysis presented in this report, we consider the impact of the inclusion of RGE Sul as an isolated item.
3.3) Economic-Financial Performance Presentation
In accordance with U.S. SEC (Securities and Exchange Commission) guidelines and pursuant to items 100(a) and (b) of Regulation G, with the disclosure of 4Q16/2016 results, in order to avoid the disclosure of non-GAAP measures, we no longer disclose the economic-financial performance considering the proportional consolidation of the generation projects and the adjustment of the numbers for non-recurring items, focusing the disclosure in the IFRS criterion. Only in chapter 5, of Indebtedness, we continue presenting the information in the financial covenants criterion, considering that the proper reconciliation with the numbers in the IFRS criterion are presented in item 11.12 of this report.
Página 11 de 65
Consolidated Income Statement - CPFL ENERGIA (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Gross Operating Revenue |
11,073 |
7,377 |
50.1% |
28,960 |
22,189 |
30.5% |
Net Operating Revenue |
7,784 |
4,783 |
62.7% |
19,285 |
13,600 |
41.8% |
Cost of Electric Power |
(5,246) |
(2,771) |
89.4% |
(12,205) |
(7,963) |
53.3% |
Operating Costs & Expenses |
(1,738) |
(1,277) |
36.1% |
(4,978) |
(3,654) |
36.2% |
EBIT |
800 |
735 |
8.8% |
2,102 |
1,983 |
6.0% |
EBITDA1 |
1,275 |
1,120 |
13.8% |
3,498 |
3,121 |
12.1% |
Financial Income (Expense) |
(343) |
(417) |
-17.6% |
(1,198) |
(1,000) |
19.8% |
Income Before Taxes |
546 |
387 |
41.3% |
1,157 |
1,185 |
-2.3% |
Net Income |
390 |
269 |
44.9% |
745 |
742 |
0.5% |
Note: (1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization, according to CVM Instruction no. 527/12. See the calculation in item 4.6 of this report.
Income Statement by business segment - CPFL Energia (R$ million) | ||||||||||||||||
|
|
Distribution |
|
Conventional Generation |
|
Renewable Generation |
|
Commerciali-zation |
|
Services |
|
Others |
|
Eliminations |
|
Total |
3Q17 | ||||||||||||||||
Net operating revenue |
6,140 |
293 |
597 |
986 |
130 |
14 |
(376) |
7,784 | ||||||||
Operating costs and expenses |
|
(5,652) |
|
(73) |
|
(189) |
|
(944) |
|
(110) |
|
(8) |
|
376 |
|
(6,600) |
Depreciation e amortization |
(190) |
(31) |
(158) |
(1) |
(5) |
(0) |
- |
(385) | ||||||||
Income from electric energy service |
|
299 |
|
189 |
|
250 |
|
41 |
|
15 |
|
5 |
|
- |
|
800 |
Equity accounting |
- |
90 |
- |
- |
- |
- |
- |
90 | ||||||||
EBITDA |
|
488 |
|
310 |
|
408 |
|
42 |
|
21 |
|
6 |
|
- |
|
1,274 |
Financial result |
(130) |
(64) |
(120) |
(9) |
0 |
(20) |
- |
(343) | ||||||||
Income (loss) before taxes |
168 |
215 |
130 |
32 |
16 |
(15) |
- |
546 | ||||||||
Income tax and social contribution |
(77) |
(41) |
(24) |
(12) |
(3) |
1 |
- |
(156) | ||||||||
Net income (loss) |
|
91 |
|
175 |
|
106 |
|
21 |
|
13 |
|
(14) |
|
- |
|
390 |
3Q16 (Resubmitted) | ||||||||||||||||
Net operating revenue |
3,613 |
257 |
508 |
561 |
118 |
30 |
(303) |
4,783 | ||||||||
Operating costs and expenses |
|
(3,182) |
|
(46) |
|
(163) |
|
(505) |
|
(94) |
|
(45) |
|
303 |
|
(3,731) |
Depreciation e amortization |
(142) |
(31) |
(138) |
(1) |
(4) |
(1) |
- |
(317) | ||||||||
Income from electric energy service |
|
289 |
|
180 |
|
206 |
|
54 |
|
21 |
|
(16) |
|
- |
|
735 |
Equity accounting |
- |
69 |
- |
- |
- |
- |
- |
69 | ||||||||
EBITDA |
|
431 |
|
280 |
|
345 |
|
55 |
|
24 |
|
(15) |
|
- |
|
1,120 |
Financial result |
(194) |
(113) |
(132) |
5 |
2 |
15 |
- |
(417) | ||||||||
Income (loss) before taxes |
95 |
135 |
75 |
59 |
22 |
(1) |
- |
387 | ||||||||
Income tax and social contribution |
(44) |
(22) |
(23) |
(20) |
(5) |
(4) |
- |
(117) | ||||||||
Net income (loss) |
|
52 |
|
113 |
|
52 |
|
39 |
|
18 |
|
(4) |
|
- |
|
269 |
Variation | ||||||||||||||||
Net operating revenue |
69.9% |
14.2% |
17.6% |
75.9% |
10.2% |
-54.9% |
23.9% |
62.7% | ||||||||
Operating costs and expenses |
|
77.6% |
|
60.1% |
|
16.3% |
|
86.8% |
|
16.8% |
|
-82.8% |
|
23.9% |
|
76.9% |
Depreciation e amortization |
33.6% |
-0.1% |
14.0% |
-25.1% |
44.6% |
-50.7% |
- |
21.5% | ||||||||
Income from electric energy service |
|
3.3% |
|
5.0% |
|
21.1% |
|
-23.9% |
|
-25.2% |
|
- |
|
- |
|
8.8% |
Equity accounting |
- |
30.8% |
- |
- |
- |
- |
- |
30.8% | ||||||||
EBITDA |
|
13.3% |
|
10.8% |
|
18.2% |
|
-23.9% |
|
-15.0% |
|
- |
|
- |
|
13.8% |
Financial result |
-32.7% |
-44.0% |
-8.7% |
- |
-73.1% |
- |
- |
-17.6% | ||||||||
Income (loss) before taxes |
76.1% |
59.1% |
73.6% |
-45.8% |
-28.8% |
2400.8% |
- |
41.3% | ||||||||
Income tax and social contribution |
76.2% |
83.1% |
4.5% |
-41.8% |
-34.5% |
- |
- |
33.0% | ||||||||
Net income (loss) |
|
76.0% |
|
54.4% |
|
104.2% |
|
-47.8% |
|
-27.3% |
|
246.8% |
|
- |
|
44.9% |
Note: an analysis of the economic-financial performance by business segment is presented in chapter 10.
Página 12 de 65
Income Statement by business segment - CPFL Energia (R$ million) | ||||||||||||||||
|
|
Distribution |
|
Conventional Generation |
|
Renewable Generation |
|
Commerciali-zation |
|
Services |
|
Others |
|
Eliminations |
|
Total |
9M17 | ||||||||||||||||
Net operating revenue |
15,343 |
830 |
1,416 |
2,370 |
353 |
68 |
(1,095) |
19,285 | ||||||||
Operating costs and expenses |
|
(13,777) |
|
(179) |
|
(549) |
|
(2,252) |
|
(293) |
|
(86) |
|
1,095 |
|
(16,041) |
Depreciation e amortization |
(569) |
(92) |
(462) |
(2) |
(14) |
(2) |
- |
(1,142) | ||||||||
Income from electric energy service |
|
997 |
|
559 |
|
406 |
|
115 |
|
46 |
|
(21) |
|
- |
|
2,102 |
Equity accounting |
- |
253 |
- |
- |
- |
- |
- |
253 | ||||||||
EBITDA |
|
1,566 |
|
904 |
|
867 |
|
117 |
|
61 |
|
(19) |
|
- |
|
3,497 |
Financial result |
(478) |
(266) |
(376) |
(30) |
2 |
(50) |
- |
(1,198) | ||||||||
Income (loss) before taxes |
520 |
546 |
29 |
85 |
49 |
(71) |
- |
1,157 | ||||||||
Income tax and social contribution |
(235) |
(97) |
(50) |
(29) |
(11) |
11 |
- |
(412) | ||||||||
Net income (loss) |
|
284 |
|
449 |
|
(21) |
|
56 |
|
38 |
|
(60) |
|
- |
|
745 |
9M16 (Resubmitted) | ||||||||||||||||
Net operating revenue |
10,708 |
740 |
1,164 |
1,478 |
298 |
49 |
(837) |
13,600 | ||||||||
Operating costs and expenses |
|
(9,235) |
|
(146) |
|
(440) |
|
(1,374) |
|
(237) |
|
(85) |
|
837 |
|
(10,680) |
Depreciation e amortization |
(422) |
(93) |
(407) |
(3) |
(10) |
(3) |
- |
(937) | ||||||||
Income from electric energy service |
|
1,051 |
|
501 |
|
317 |
|
101 |
|
51 |
|
(38) |
|
- |
|
1,983 |
Equity accounting |
- |
201 |
- |
- |
- |
- |
- |
201 | ||||||||
EBITDA |
|
1,473 |
|
795 |
|
724 |
|
104 |
|
61 |
|
(35) |
|
- |
|
3,121 |
Financial result |
(350) |
(284) |
(394) |
14 |
3 |
10 |
- |
(1,000) | ||||||||
Income (loss) before taxes |
701 |
418 |
(77) |
115 |
54 |
(28) |
- |
1,185 | ||||||||
Income tax and social contribution |
(274) |
(74) |
(40) |
(36) |
(13) |
(5) |
- |
(443) | ||||||||
Net income (loss) |
|
427 |
|
344 |
|
(117) |
|
79 |
|
41 |
|
(33) |
|
- |
|
742 |
Variation | ||||||||||||||||
Net operating revenue |
43.3% |
12.1% |
21.6% |
60.4% |
18.5% |
37.5% |
30.9% |
41.8% | ||||||||
Operating costs and expenses |
|
49.2% |
|
22.3% |
|
24.6% |
|
63.9% |
|
23.5% |
|
2.1% |
|
30.9% |
|
50.2% |
Depreciation e amortization |
35.1% |
-0.7% |
13.5% |
-16.3% |
44.8% |
-9.4% |
- |
22.0% | ||||||||
Income from electric energy service |
|
-5.1% |
|
11.5% |
|
28.0% |
|
14.0% |
|
-9.3% |
|
-44.6% |
|
- |
|
6.0% |
Equity accounting |
- |
25.8% |
- |
- |
- |
- |
- |
25.8% | ||||||||
EBITDA |
|
6.4% |
|
13.7% |
|
19.8% |
|
13.1% |
|
-0.5% |
|
-47.1% |
|
- |
|
12.1% |
Financial result |
36.5% |
-6.3% |
-4.4% |
- |
-25.2% |
- |
- |
19.8% | ||||||||
Income (loss) before taxes |
-25.9% |
30.5% |
- |
-26.0% |
-10.2% |
158.2% |
- |
-2.3% | ||||||||
Income tax and social contribution |
-14.2% |
30.6% |
25.6% |
-18.5% |
-17.5% |
- |
- |
-7.0% | ||||||||
Net income (loss) |
|
-33.5% |
|
30.4% |
|
-82.3% |
|
-29.4% |
|
-7.9% |
|
85.2% |
|
- |
|
0.5% |
Note: an analysis of the economic-financial performance by business segment is presented in chapter 10.
The Company and its electric energy distribution subsidiaries, aiming at the better presentation of their operational and financial performance, concluded that the adjustment of expectation of the cash flow of the indemnable financial asset of the concession of each distributor, originally presented under financial revenue item, in financial result, should be more adequately classified in the operating revenues group, together with other revenues related to its activity. This allocation reflects more accurately the business model of electric energy distribution and provides a better presentation regarding its performance.
Pursuant to CPC 23 / IAS 8 - Accounting Policies, Changes in Estimates and Error Rectification, the CPFL Energia and its Subsidiaries changed their accounting policy previously adopted by an accounting policy that better reflects the performance of the Company's and its subsidiaries' businesses and, therefore, reclassified retrospectively into their income statements for 3Q16.
In 3Q17, it was accounted the total sectoral financial assets in the amount of R$ 1,245 million, compared to the total sectoral financial liabilities in the amount of R$ 558 million in 3Q16, a variation of R$ 1,803 million.
On September 30, 2017, the balance of these sectoral financial assets and liabilities was negative in R$ 107 million, compared to a negative balance of R$ 1,254 million on June 30, 2017 and a negative balance of R$ 435 million on September 30, 2016.
As established by the applicable regulation, any sectoral financial assets or liabilities shall be included in the tariffs of the distributors in their respective annual tariff events.
Página 13 de 65
In 3Q17, gross operating revenue reached R$ 11,073 million, representing an increase of 50.1% (R$ 3,696 million). Deductions from the gross operating revenue was of R$ 3,289 million in 3Q17, representing an increase of 26.8% (R$ 695 million). Net operating revenue reached R$ 7,784 million in 3Q17, registering an increase of 62.7% (R$ 3,001 million).
The main factors that affected the net operating revenue were:
· Increase of revenues in the Distribution segment, in the amount of R$ 2,527 million, mainly due to the acquisition of RGE Sul (for more details, see item 10.1.1.2);
· Increase of revenues in the Commercialization segment, in the amount of R$ 425 million;
· Increase of revenues in CPFL Renováveis, in the amount of R$ 89 million;
· Increase of revenues in the Conventional Generation segment, in the amount of R$ 36 million;
· Increase of revenues in the Services segment, in the amount of R$ 12 million;
Partially offset by:
· Reduction of R$ 73 million, due to the eliminations;
· Increase of revenues in Others, in the amount of R$ 17 million.
Cost of Electric Energy (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Cost of Electric Power Purchased for Resale |
||||||
Energy from Itaipu Binacional |
596 |
462 |
28.8% |
1,764 |
1,513 |
16.6% |
Energy Purchased in the Spot Market/PROINFA |
114 |
80 |
42.2% |
316 |
170 |
86.1% |
Energy Purchased through Auction in the Regulated Environment and Bilateral Contracts |
4,541 |
2,169 |
109.4% |
10,366 |
5,960 |
73.9% |
PIS and COFINS Tax Credit |
(478) |
(246) |
94.4% |
(1,134) |
(698) |
62.5% |
Total |
4,773 |
2,466 |
93.6% |
11,312 |
6,945 |
62.9% |
|
|
|
|
|||
Charges for the Use of the Transmission and Distribution System |
|
|
|
|
||
Basic Network Charges |
492 |
198 |
147.8% |
988 |
602 |
64.1% |
Itaipu Transmission Charges |
66 |
13 |
395.7% |
97 |
39 |
149.7% |
Connection Charges |
31 |
22 |
39.8% |
91 |
57 |
57.9% |
Charges for the Use of the Distribution System |
8 |
9 |
-19.0% |
30 |
28 |
5.0% |
System Service Usage Charges - ESS |
(76) |
85 |
- |
(224) |
282 |
- |
Reserve Energy Charges - EER |
(0) |
6 |
- |
(0) |
107 |
- |
PIS and COFINS Tax Credit |
(47) |
(29) |
65.4% |
(87) |
(97) |
-10.3% |
Total |
473 |
305 |
55.3% |
894 |
1,018 |
-12.2% |
|
|
|
|
|||
Cost of Electric Energy |
5,246 |
2,771 |
89.4% |
12,205 |
7,963 |
53.3% |
Página 14 de 65
Cost of Electric Energy (without RGE Sul) (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Cost of Electric Power Purchased for Resale |
||||||
Energy from Itaipu Binacional |
497 |
462 |
7.4% |
1,469 |
1,513 |
-2.9% |
Energy Purchased in the Spot Market/PROINFA |
108 |
80 |
34.2% |
266 |
170 |
56.6% |
Energy Purchased through Auction in the Regulated Environment and Bilateral Contracts |
3,979 |
2,169 |
83.4% |
9,074 |
5,960 |
52.2% |
PIS and COFINS Tax Credit |
(418) |
(246) |
69.8% |
(986) |
(698) |
41.3% |
Total |
4,165 |
2,466 |
68.9% |
9,823 |
6,945 |
41.4% |
|
|
|
|
|||
Charges for the Use of the Transmission and Distribution System |
|
|
|
|
||
Basic Network Charges |
403 |
198 |
103.3% |
816 |
602 |
35.5% |
Itaipu Transmission Charges |
55 |
13 |
313.3% |
81 |
39 |
108.1% |
Connection Charges |
21 |
22 |
-5.0% |
62 |
57 |
7.8% |
Charges for the Use of the Distribution System |
8 |
9 |
-19.0% |
30 |
28 |
5.0% |
System Service Usage Charges - ESS |
(76) |
85 |
- |
(224) |
282 |
- |
Reserve Energy Charges - EER |
13 |
6 |
132.0% |
32 |
107 |
-70.2% |
PIS and COFINS Tax Credit |
(37) |
(29) |
30.6% |
(67) |
(97) |
-31.0% |
Total |
387 |
305 |
27.0% |
728 |
1,018 |
-28.4% |
|
|
|
|
|||
Cost of Electric Energy |
4,552 |
2,771 |
64.3% |
10,552 |
7,963 |
32.5% |
In the analysis presented in this report, we consider the impact of the inclusion of RGE Sul as an isolated item.
In 3Q17, the cost of electric energy, comprising the purchase of electricity for resale and charges for the use of the distribution and transmission system, amounted to R$ 5,246 million, registering an increase of 89.4% (R$ 2,476 million).
The factors that explain these variations follow below:
· |
The cost of electric power purchased for resale reached R$ 4,773 million in 3Q17, an increase of 93.6% (R$ 2.307 million), due to the following factors: |
(i) Impact of the inclusion of RGE Sul in our consolidation in 3Q17. The total cost of electric power purchased for resale in relation to RGE Sul (which was not included in our consolidation in 3Q16) totaled R$ 607 million for 3Q17; | |
(ii) Increase of 83.4% (R$ 1,810 million) in the cost of energy purchased through auction in the regulated environment and bilateral contracts, due to the increases of 65.9% in the average purchase price (R$ 275.23/MWh in 3Q17 vs. R$ 165.91/MWh in 3Q16) and of 10.6% (1,383 GWh) in the volume of purchased energy; | |
(iii) Increase of 7.4% (R$ 34 million) in the cost of energy from Itaipu, due to the increase of 10.8% in the average purchase price (R$ 200.53/MWh in 3Q17 vs. R$ 180.93/MWh in 3Q16), partially offset by the reduction of 3.1% (79 GWh) in the volume of purchased energy; | |
(iv) Increase of 34.2% (R$ 27 million) in the amount of energy purchased in the spot market/PROINFA cost; | |
Partially offset by: | |
· |
Charges for the use of the transmission and distribution system reached R$ 473 million in 3Q17, an increase of 55.3% (R$ 169 million), due to the following factors: |
(i) Impact of the inclusion of RGE Sul in our consolidation in 3Q17. The total charges for the use of the transmission and distribution system in relation to RGE Sul (which was not included in our consolidation in 3Q16) totaled R$ 86 million for 3Q17; | |
(ii) Increase of 103.3% (R$ 205 million) in the basic network charges; |
Página 15 de 65
(iii) Increase of 313.3% (R$ 42 million) in Itaipu transmission charges; | |
(iv) Increase of 132.0% (R$ 7 million) in Reserve Energy Charges – EER; | |
Partially offset by: | |
(v) Variation of R$ 160 million in the System Service Usage Charges – ESS, from an expense of R$ 85 million in 3Q16 to a revenue of R$ 76 million in 3Q17; | |
(vi) Increase of 30.6% (R$ 9 million) in PIS and COFINS tax credits (cost reducer), generated from the charges; | |
(vii) Increase of R$ 3 million in charges for connection and usage of the distribution system. |
In the analysis presented in this report, we consider the impact of the inclusion of RGE Sul as an isolated item.
Operating costs and expenses reached R$ 1,738 million in 3Q17, compared to R$ 1,277 million in 3Q16, an increase of 36.1% (R$ 461 million), due to the following factors:
PMSO
The PMSO item reached R$ 726 million in 3Q17, compared to R$ 613 million in 3Q16, an increase of 18.5% (R$ 113 million).
Página 16 de 65
Reported PMSO (R$ million) | ||||||||
|
3Q17 |
3Q16 |
Variation |
9M17 |
9M16 |
Variação | ||
|
R$ MM |
% |
R$ MM |
% | ||||
Reported PMSO |
|
|
|
|
|
|
|
|
Personnel |
(329) |
(261) |
(68) |
26.0% |
(998) |
(773) |
(225) |
29.1% |
Material |
(69) |
(65) |
(5) |
7.2% |
(182) |
(144) |
(38) |
26.6% |
Outsourced Services |
(174) |
(157) |
(17) |
11.0% |
(548) |
(463) |
(85) |
18.3% |
Other Operating Costs/Expenses |
(154) |
(131) |
(23) |
17.8% |
(543) |
(470) |
(73) |
15.6% |
Allowance for doubtful accounts |
(33) |
(34) |
1 |
-3.9% |
(119) |
(130) |
11 |
-8.6% |
Legal, judicial and indemnities expenses |
(14) |
(29) |
15 |
-51.9% |
(128) |
(138) |
11 |
-7.6% |
Others |
(107) |
(67) |
(40) |
59.1% |
(296) |
(201) |
(95) |
47.1% |
Total Reported PMSO |
(726) |
(613) |
(113) |
18.5% |
(2,271) |
(1,850) |
(421) |
22.8% |
|
|
|
|
|
|
|
|
|
PMSO RGE Sul |
|
|
|
|
|
|
|
|
Personnel |
(36) |
|
|
|
(117) |
|
|
|
Material |
(7) |
|
|
|
(23) |
|
|
|
Outsourced Services |
(31) |
|
|
|
(93) |
|
|
|
Other Operating Costs/Expenses |
(4) |
|
|
|
(60) |
|
|
|
Allowance for doubtful accounts |
(8) |
|
|
|
(22) |
|
|
|
Legal, judicial and indemnities expenses |
30 |
|
|
|
6 |
|
|
|
Others |
(26) |
|
|
|
(44) |
|
|
|
Total PMSO RGE Sul |
(78) |
|
|
|
(294) |
|
|
|
|
|
|
|
|
|
|
|
|
PMSO (-) RGE Sul |
|
|
|
|
|
|
|
|
Personnel |
(293) |
(261) |
(32) |
12.3% |
(881) |
(773) |
(108) |
13.9% |
Material |
(62) |
(65) |
3 |
-4.0% |
(159) |
(144) |
(15) |
10.5% |
Outsourced Services |
(143) |
(157) |
14 |
-8.7% |
(455) |
(463) |
8 |
-1.8% |
Other Operating Costs/Expenses |
(150) |
(131) |
(19) |
14.8% |
(482) |
(470) |
(13) |
2.8% |
Allowance for doubtful accounts |
(25) |
(34) |
9 |
-26.1% |
(97) |
(130) |
33 |
-25.5% |
Legal, judicial and indemnities expenses |
(44) |
(29) |
(14) |
49.2% |
(134) |
(138) |
4 |
-3.2% |
Others |
(81) |
(67) |
(14) |
20.7% |
(252) |
(201) |
(51) |
25.1% |
Total PMSO (-) RGE Sul |
(648) |
(613) |
(35) |
5.7% |
(1,978) |
(1,850) |
(128) |
6.9% |
(i) Personnel - increase of 26.0% (R$ 68 million), mainly due to:
ü Acquisition of RGE Sul (R$ 36 million);
ü Increase in the Services segment business, due to business expansion of CPFL Serviços, CPFL Atende, Nect, CPFL Total, Authi and CPFL Eficiência (R$ 22 million);
ü Collective bargaining agreement – wages and benefits (R$ 13 million);
Partially offset by:
ü Other effects (R$ 3 million);
Página 17 de 65
(ii) Material – increase of 7.2% (R$ 5 million), mainly due to:
ü Acquisition of RGE Sul (R$ 7 million);
Partially offset by:
ü Other effects (R$ 2 million);
(iii) Out-sourced services - increase of 11.0% (R$ 17 million), mainly due to:
ü Acquisition of RGE Sul (R$ 31 million);
Partially offset by:
ü Maintenance of machinery and equipment (R$ 7 million);
ü Transport-related services (R$ 6 million);
ü Other effects (R$ 1 million);
(iv) Other operational costs/expenses - increase of 17.8% (R$ 23 million), mainly due to increase in the expenses in:
ü Acquisition of RGE Sul (R$ 4 million);
ü Increase of loss on disposal, retirement and other noncurrent assets (R$ 15 million);
ü Increase of 49.2% in legal and judicial expenses (R$ 14 million);
ü Other effects (R$ 1 million);
Partially offset by:
ü Reduction of 26.1% in allowance for doubtful account (R$ 9 million).
Other operating costs and expenses
Other operating costs and expenses reached R$ 1,012 million in 3Q17, compared to R$ 664 million in 3Q16, registering an increase of 52.3% (R$ 347 million), due to the following factors:
· Acquisition of RGE Sul (R$ 149 million);
· Increase of 50.2% (R$ 163 million) in Costs of Building the Infrastructure item;
· Increase of 10.0% (R$ 2 million) in Private Pension Fund item, due to the registration of the impacts of the 2017 actuarial report;
· Increase of 12.7% (R$ 32 million) in Depreciation and Amortization item;
· Increase of 1.2% (R$ 1 million) in Amortization of Intangible of Concession Asset item.
In 3Q17, EBITDA reached R$ 1,275 million, registering an increase of 13.8% (R$ 154 million).
EBITDA is calculated according to CVM Instruction no. 527/12 and showed in the table below:
Página 18 de 65
EBITDA and Net Income conciliation (R$ million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Net Income |
390 |
269 |
44.9% |
745 |
742 |
0.5% |
De preciation and Amortization |
385 |
317 |
1,143 |
937 |
||
Financial Result |
343 |
417 |
1,198 |
1,000 |
||
Income Tax / Social Contribution |
156 |
117 |
412 |
443 |
||
EBITDA |
1,275 |
1,120 |
13.8% |
3,498 |
3,121 |
12.1% |
In the analysis presented in this report, we consider the impact of the inclusion of RGE Sul as an isolated item. However, the impacts caused by the acquisition of RGE Sul in CPFL Energia’s results (due to the reduction in Cash and increase in Indebtedness for acquisition funding, among others) were not excluded in our analyzes.
In 3Q17, net financial expense was of R$ 343 million, a reduction of 17.6% (R$ 73 million) compared to the net financial expense of R$ 417 million reported in 3Q16.
Financial Result (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Revenues |
||||||
Income from Financial Investments |
94 |
187 |
-49.6% |
384 |
485 |
-20.9% |
Additions and Late Payment Fines |
61 |
58 |
4.8% |
204 |
175 |
16.4% |
Fiscal Credits Update |
10 |
10 |
3.5% |
15 |
27 |
-45.3% |
Judicial Deposits Update |
14 |
9 |
49.1% |
40 |
27 |
48.7% |
Monetary and Foreign Exchange Updates |
21 |
30 |
- |
50 |
132 |
-61.9% |
Discount on Purchase of ICMS Credit |
4 |
2 |
93.6% |
9 |
13 |
-31.0% |
Sectoral Financial Assets Update |
(1) |
(6) |
-81.4% |
- |
51 |
-100.0% |
PIS and COFINS - over Other Financial Revenues |
(10) |
(23) |
-55.8% |
(37) |
(45) |
-17.0% |
PIS and COFINS over Interest on Own Capital |
(2) |
(0) |
11006.8% |
(2) |
(1) |
36.1% |
Others |
15 |
20 |
-23.2% |
46 |
69 |
-32.8% |
Total |
206 |
286 |
-28.2% |
709 |
932 |
-24.0% |
|
|
|
|
|||
Expenses |
|
|
|
|
||
Debt Charges |
(393) |
(448) |
-12.1% |
(1,321) |
(1,316) |
0.4% |
Monetary and Foreign Exchange Updates |
(98) |
(227) |
-56.6% |
(436) |
(515) |
-15.3% |
(-) Capitalized Interest |
8 |
18 |
-56.4% |
42 |
52 |
-19.5% |
Sectoral Financial Liabilities Update |
(30) |
(1) |
2950.6% |
(81) |
(17) |
368.1% |
Use of Public Asset |
(1) |
(4) |
-75.0% |
(5) |
(12) |
-62.6% |
Others |
(34) |
(42) |
-19.7% |
(106) |
(124) |
-14.5% |
Total |
(549) |
(703) |
-21.9% |
(1,907) |
(1,932) |
-1.3% |
|
|
|
|
|||
Financial Result |
(343) |
(417) |
-17.6% |
(1,198) |
(1,000) |
19.8% |
Página 19 de 65
Financial Result (without RGE Sul) (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Revenues |
||||||
Income from Financial Investments |
91 |
187 |
-51.2% |
371 |
485 |
-23.5% |
Additions and Late Payment Fines |
49 |
58 |
-15.1% |
161 |
175 |
-7.9% |
Fiscal Credits Update |
10 |
10 |
3.5% |
15 |
27 |
-45.3% |
Judicial Deposits Update |
13 |
9 |
40.6% |
38 |
27 |
40.0% |
Monetary and Foreign Exchange Updates |
21 |
30 |
- |
50 |
132 |
-62.2% |
Discount on Purchase of ICMS Credit |
4 |
2 |
93.6% |
9 |
13 |
-31.0% |
Sectoral Financial Assets Update |
(1) |
(6) |
-81.4% |
- |
51 |
-100.0% |
PIS and COFINS - over Other Financial Revenues |
(10) |
(23) |
-55.8% |
(37) |
(45) |
-17.0% |
PIS and COFINS over Interest on Own Capital |
(2) |
(0) |
11006.8% |
(2) |
(1) |
36.1% |
Others |
14 |
20 |
-28.2% |
42 |
69 |
-39.0% |
Total |
190 |
286 |
-33.7% |
647 |
932 |
-30.6% |
|
|
|
|
|||
Expenses |
|
|
|
|
||
Debt Charges |
(362) |
(448) |
-19.2% |
(1,212) |
(1,316) |
-7.9% |
Monetary and Foreign Exchange Updates |
(89) |
(227) |
-60.9% |
(419) |
(515) |
-18.7% |
(-) Capitalized Interest |
7 |
18 |
-60.6% |
40 |
52 |
-24.2% |
Sectoral Financial Liabilities Update |
(25) |
(1) |
2402.7% |
(62) |
(17) |
262.0% |
Use of Public Asset |
(1) |
(4) |
-75.0% |
(5) |
(12) |
-62.6% |
Others |
(27) |
(42) |
-36.2% |
(92) |
(124) |
-25.5% |
Total |
(496) |
(703) |
-29.5% |
(1,751) |
(1,932) |
-9.4% |
|
|
|
|
|||
Financial Result |
(306) |
(417) |
-26.5% |
(1,104) |
(1,000) |
10.4% |
The items explaining these variations in Financial Result are as follows:
· Financial Revenues: reduction of 28.2% (R$ 81 million), from R$ 286 million in 3Q16 to R$ 206 million in 3Q17, mainly due to the following factors:
(i) Reduction of 51.2% (R$ 96 million) in the income from financial investments, due to the reductions in the CDI interbank rate and in the average balance of investments; | |
(ii) Reduction of 15.1% (R$ 9 million) in additions and late payment fines; | |
(iii) Reduction of 28.2% (R$ 8 million) in the monetary and foreign exchange updates, due to the reductions: (a) of R$ 13 million in revenues from fines, interest and monetary adjustment relating to installment payments made by consumers; and (b) of R$ 10 million in the update of the balance of tariff subsidies, as determined by ANEEL; partially offset by the increases: (c) of R$ 13 million in the gain with the zero-cost collar derivative1; and (d) of R$ 2 million in other monetary and foreign exchange updates; | |
(iv) Reduction of 28.2% (R$ 6 million) in other financial revenues; | |
(v) Increase of R$ 2 million in PIS and COFINS over Interest on Own Capital (revenue reducer); | |
Partially offset by: | |
(vi) Impact of the inclusion of RGE Sul in our consolidation in 3Q17. The total financial revenue in relation to RGE Sul (which was not included in our consolidation in 3Q16) totaled R$ 16 million for 3Q17; | |
(vii) Reduction of 55.8% (R$ 13 million) in PIS and COFINS over Other Financial Revenue (revenue reducer); |
1 In 2015, subsidiary CPFL Geração contracted US$ denominated put and call options, involving the same financial institution as counterpart, and which on a combined basis are characterized as an operation usually known as zero-cost collar. The contracting of this operation does not involve any kind of speculation, inasmuch as it is aimed at minimizing any negative impacts on future revenues of the joint venture ENERCAN, which has electric energy sale agreements with annual restatement of part of the tariff based on the variation in the US$. In addition, according to Management’s view, the scenario was favorable for contracting this type of financial instrument, considering the high volatility implicit in dollar options and the fact that there was no initial cost for same.
Página 20 de 65
(viii) Reduction of 81.4% (R$ 5 million) in sectoral financial assets update (revenue reducer); | |
(ix) Increase of 40.6% (R$ 4 million) in judicial deposits update; | |
(x) Reduction of 93.6% (R$ 2 million) in discount on the acquisition of ICMS credit. |
· Financial Expenses: reduction of 21.9% (R$ 154 million), from R$ 703 million in 3Q16 to R$ 549 million in 3Q17, mainly due to the following factors:
(i) Reduction of 60.9% (R$ 138 million) in the monetary and foreign exchange updates, due to: (a) the reduction of debt charges in foreign currency, with swap to CDI interbank rate (R$ 87 million); (b) the mark-to-market positive effect for financial operations under Law 4,131 – non-cash effect (R$ 43 million); (a) the effect of Itaipu’s exchange variation (R$ 9 million); | |
(ii) Reduction of 19.2% (R$ 86 million) of debt charges in local currency, due to the reduction in the CDI interbank rate; | |
(iii) Reduction of 36.2% (R$ 15 million) in other financial expenses; | |
(iv) Reduction of 75.0% (R$ 3 million) in the financial expenses with the Use of Public Asset (UBP); | |
Partially offset by: | |
(v) Impact of the inclusion of RGE Sul in our consolidation in 3Q17. The total financial expense in relation to RGE Sul (which was not included in our consolidation in 3Q16) totaled R$ 53 million for 3Q17; | |
(vi) Increase of R$ 24 million in sectoral financial liabilities update; | |
(vii) Reduction of 60.6% (R$ 11 million) in capitalized interest (expense reducer). |
In 3Q17, net income was R$ 390 million, registering an increase of 44.9% (R$ 121 million) if compared to the net income of R$ 269 million observed in 3Q16.
Página 21 de 65
1) Do not consider mark-to-market effects and borrowing costs.
Indexation after Hedge1 – 3Q16 vs. 3Q17
3Q16
3Q17
1) For debt linked to foreign currency (24% of total in 3Q17), swaps are contracted, which convert indexing for CDI;
Página 22 de 65
Net Debt and Leverage in IFRS
IFRS - R$ Million |
3Q17 |
3Q16 |
Var. % |
Financial Debt (including hedge) |
(19,291) |
(18,766) |
2.8% |
(+) Available Funds |
3,832 |
5,345 |
-28.3% |
(=) Net Debt |
(15,459) |
(13,422) |
15.2% |
5.2) Debt in Financial Covenants Criteria
CPFL Energia has always adopted a solid and conservative financial policy. Thus, the Company has used since 2011, a prefunding strategy, in other words, forecasts the cash needs for the next 24 months and anticipates market access on more favorable terms of liquidity and cost. Thus, at the beginning of 2017, CPFL Energia had worked in 2018 and 2019 prefunding.
Debt Amortization Schedule in Financial Covenants Criteria (Sep-17)1
1) Consider only the principal debt of R$ 16,974 million. In order to reach the value of debt in the covenants criteria of R$ 17,138, it is excluded accrued interests of R$ 404 million of the period and included other adjustments in the amount of R$ 240 million;
2) Short-term (Oct-17 – Sep-18) = R$ 4,704 million.
The cash position at the end of 3Q17 had a coverage ratio of 0.86x the amortizations of the next 12 months, enough to honor all amortization commitments until the end of 1H18. The average amortization term, calculated by this schedule, is 2.55 years.
Página 23 de 65
Indexation1 After Hedge2 in Financial Covenants Criteria – 3Q16 vs. 3Q17
3Q16
3Q17
1) Considering proportional consolidation of CPFL Renováveis, CERAN, BAESA, ENERCAN, Foz do Chapecó and EPASA;
2) For debt linked to foreign currency (24% of total), swaps are contracted, which convert the indexation to CDI.
Página 24 de 65
Gross Debt Cost1 in Financial Covenants Criteria – LTM
1) Adjusted by the proportional consolidation since 2012; Financial debt (+) private pension fund (-) hedge;
2) As of 2Q17, CPFL Energia started to calculate gross debt cost considering end of period rates, to better reflect the variations on interest rates.
In 3Q17, Proforma Net Debt totaled R$ 13,731 million, an increase of 20.0% compared to net debt position at the end of 3Q16 in the amount of R$ 11,439 million.
The increase in Net Debt in 3Q17 was mainly due to the acquisition of RGE Sul, which was consolidated in November 2016.
Covenant Criteria (*) - R$ Million |
3Q17 |
3Q16 |
Var. |
Financial Debt (including hedge)1 |
(17,138) |
(16,685) |
2.7% |
(+) Available Funds |
3,407 |
5,246 |
-35.1% |
(=) Net Debt |
(13,731) |
(11,439) |
20.0% |
EBITDA Proforma ² |
4,235 |
3,725 |
13.7% |
Net Debt / EBITDA |
3.24x |
3.07x |
-0.17x |
1) Considering proportional consolidation of CPFL Renováveis, CERAN, BAESA, ENERCAN, Foz do Chapecó and EPASA;
2) EBITDA Proforma in the covenants criteria: adjusted according to equivalent participation of CPFL Energia in each of its subsidiaries, with the inclusion of regulatory assets and liabilities and the historical EBITDA of newly acquired projects.
In line with the criteria for calculation of financial covenants of loan agreements with financial institutions, net debt is adjusted according to the equivalent stake of CPFL Energia in each of its subsidiaries. Also, include in the calculation of EBITDA Proforma the effects of historic EBITDA of newly acquired projects. Considering that, Proforma Net Debt totaled R$ 13,731 million and EBITDA Proforma in the last 12 months reached R$ 4,235 million, the ratio Proforma Net Debt / EBITDA at the end of 3Q17 reached 3.24x.
Página 25 de 65
Investments (R$ Million) | ||||||
Segment |
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Distribution |
477 |
280 |
70.2% |
1,264 |
709 |
78.3% |
Generation - Conventional |
1 |
8 |
-81.6% |
3 |
12 |
-72.7% |
Generation - Renewable |
45 |
315 |
-85.9% |
566 |
802 |
-29.5% |
Commercialization |
1 |
0 |
20.3% |
2 |
2 |
-15.7% |
Services and Others1 |
15 |
6 |
139.2% |
42 |
34 |
22.4% |
Subtotal |
538 |
610 |
-11.8% |
1,877 |
1,560 |
20.3% |
Transmission |
6 |
26 |
-77.0% |
46 |
35 |
30.6% |
Total |
544 |
636 |
-14.4% |
1,923 |
1,595 |
20.6% |
Special Obligations |
57 |
42 |
35.0% |
179 |
152 |
17.3% |
Note:
1) Others – basically refer to assets and transactions that are not related to the listed segments.
In 3Q17, R$ 538 million were invested, a decrease of 11.8% if compared to 3Q16. In addition, there was an investment of R$ 6 million in the quarter related to the transmission lines construction of CPFL Transmissão Morro Agudo, which, according to the requirements of IFRIC 12, was recorded as “Financial Asset of Concession” (non-current assets). CPFL Energia also accounted for R$ 57 million in Special Obligations in the quarter, among other items financed by the consumer.
We highlight investments made by CPFL Energia in each segment:
(i) Distribution:
a. Expansion and strengthening of the electric system;
b. Electricity system maintenance and improvements;
c. Operational infrastructure;
d. Upgrade of management and operational support systems;
e. Customer help services;
f. Research and development programs.
(ii) Generation:
a. Pedra Cheirosa Wind Complex;
b. SHPP Boa Vista II.
6.2) Projected Capital Expenditures
On April 28, 2017, CPFL Energia’s Board of Directors approved Board of Executive Officers’ proposal for 2017 Annual Budget and 2018/2021 Multiannual Plan for the Company, which was previously discussed by the Budget and Corporate Finance Commission. Projections already include expected investments for RGE Sul.
Página 26 de 65
Projected Capital Expenditures (R$ million)1
Notes:
1) Constant currency;
2) Disregard investments in Special Obligations on Distribution segment (among other items financed by consumers);
3) Conventional + Renewable.
7.1) Stock Performance
CPFL Energia is listed on both the B3 (Novo Mercado) and the New York Stock Exchange (NYSE) (ADR Level III), segments with the highest levels of corporate governance.
B3 |
NYSE | ||||||
Date |
CPFE3 (R$) |
IEE |
IBOV |
Date |
CPL (US$) |
DJBr20 |
Dow Jones |
09/30/2016 |
R$ 23.98 |
36,307 |
58,367 |
09/30/2016 |
$ 14.80 |
18,185 |
18,308 |
06/30/2017 |
R$ 26.51 |
38,095 |
62,899 |
06/30/2017 |
$ 15.95 |
19,138 |
21,350 |
09/30/2017 |
R$ 27.22 |
41,306 |
74,294 |
09/30/2017 |
$ 17.16 |
23,149 |
22,405 |
QoQ |
2.7% |
8.4% |
18.1% |
QoQ |
7.6% |
21.0% |
4.9% |
YoY |
13.5% |
13.8% |
27.3% |
YoY |
15.9% |
27.3% |
22.4% |
On September 30, 2017 the price shares closed at R$ 27.22 per share on the B3 and US$ 17.16 per ADR on the NYSE, which represented an appreciation in the quarter of 2.7% and 7.6%, respectively. In the last 12 months, the shares appreciated 13.5% on B3 and the ADR appreciated 15.9% on the NYSE.
Página 27 de 65
The daily trading volume in 3Q17 averaged R$ 36.4 million, of which R$ 28.0 million on the B3 and R$ 8.4 million on the NYSE, representing a decrease of 38.5% compared to 3Q16. The number of trades on the B3 decreased by 58.3%, from a daily average of 5,566, in 3Q16, to 2,323, in 3Q17.
Note: Considers the sum of the average daily volume on the B3 and NYSE.
8) 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 2016, CPFL marked 12 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.
Página 28 de 65
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. At the Ordinary and Extraordinary General Meetings held on April 28, 2017, 3 acting members and 3 deputy members were elected.
The guidelines and documents on corporate governance are available at the Investor Relations website http://www.cpfl.com.br/ir.
CPFL Energia is a holding company that owns stake in other companies. State Grid Corporation of China (SGCC) controls CPFL Energia through its subsidiaries State Grid International Development Co., Ltd, State Grid International Development Limited (SGID), International Grid Holdings Limited, State Grid Brazil Power Participações S.A. (SGBP) and ESC Energia S.A.:
Reference date: 09/30/2017
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) CPFL Energia holds a stake in RGE Sul through the CPFL Jaguariúna.
Página 29 de 65
As a complement to the Material Facts released on September 2nd, 22nd, 23rd and 28th, 2016, November 23rd, 2016, December 13th, 2016, and January 23rd, 2017, February 16th and 23rd, 2017, June 13th, 2017, , July 7th, and October 30th, 2017, CPFL Energia announced to its shareholders and to the market in general that, on October 31st, that the company received from its controlling shareholder, State Grid Brazil Power Participações S.A. (“State Grid Brazil”), a letter informing about the Approval of the Mandatory Tender Offer Resulting from Transfer of Control.
On October 26th, 2017, the CVM formally approved all relevant documents and the continuity of the Mandatory Tender Offer resulting from the direct transfer of control of CPFL Energia (the “Offer”), pursuant to article 254-A of Law 6,404, dated as of December 15th, 1976, article 29 of CVM Instruction 361, dated as of March 5th, 2002, the Novo Mercado Listing Rules of B3 S.A. – Brasil, Bolsa, Balcão (“B3” and “Novo Mercado”) and CPFL Energia’s bylaws.
As a result of such approval, in accordance with article 11 of the CVM Instruction 361/02, State Grid Brazil published on October 31st, 2017 in the newspaper “Valor Econômico” the Form of Notice of the Offer (“Form of Notice”), with its applicable detailed terms and conditions in Portuguese.
State Grid Brazil also published in the October 31st, 2017 edition of the “The Wall Street Journal” an announcement in English regarding the Offer.
In addition to the printed and online disclosures described above, the Form of Notice is available at the following addresses and websites:
CPFL Energia S.A.
Rodovia Engenheiro Miguel Noel Nascentes Burnier, km 2,5, parte, Parque São Quirino
CEP 13088-140 – Campinas, SP
http://cpfl.riweb.com.br/
COMISSÃO DE VALORES MOBILIÁRIOS - CVM
Rua Cincinato Braga, nº 340, 2nd floor / Rua Sete de Setembro, nº 111, 2nd floor
CEP 01333-010 – São Paulo, SP / CEP 20159-900 – Rio de Janeiro, RJ
www.cvm.gov.br
Banco Santander (Brasil) S.A.
Avenida Presidente Juscelino Kubitschek, nº 2.041 and 2.235 (Bloco A), 24th floor
CEP 04543-011 – São Paulo, SP
https://www.santander.com.br/br/pessoa-juridica/corporate-finance/ofertas-em-andamento
Bank of America Merrill Lynch Banco Múltiplo S.A.
Avenida Brigadeiro Faria Lima, nº 3.400, 18th floor
CEP 04538-132 - São Paulo, SP
http://www.merrilllynch-brasil.com.br/
B3 S.A. – Brasil, Bolsa Balcão
Praça Antonio Prado, nº 48, 2th floor - Directory of Operations
CEP 01010-901 – São Paulo, SP
www.b3.com.br
U.S. Securities and Exchange Commission
100 F Street, NE
Room 1580
Washington, DC 20549 (Unofficial English Translation Only)
www.sec.gov
Página 30 de 65
Consolidated Income Statement - Distribution (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Gross Operating Revenue |
9,256 |
6,087 |
52.1% |
24,589 |
18,985 |
29.5% |
Net Operating Revenue |
6,140 |
3,613 |
69.9% |
15,343 |
10,708 |
43.3% |
Cost of Electric Power |
(4,427) |
(2,390) |
85.2% |
(10,395) |
(6,941) |
49.8% |
Operating Costs & Expenses |
(1,415) |
(934) |
51.4% |
(3,951) |
(2,716) |
45.5% |
EBIT |
299 |
289 |
3.3% |
997 |
1,051 |
-5.1% |
EBITDA(1) |
488 |
431 |
13.3% |
1,566 |
1,473 |
6.4% |
Financial Income (Expense) |
(130) |
(194) |
-32.6% |
(478) |
(350) |
36.5% |
Income Before Taxes |
168 |
96 |
76.1% |
520 |
701 |
-25.9% |
Net Income |
91 |
52 |
75.9% |
284 |
427 |
-33.5% |
Notes:
(2) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization, as CVM Instruction no. 527/12;
(3) The distributors’ financial performance tables are attached to this report in item 11.12.
The distribution subsidiaries, aiming at the better presentation of their operational and financial performance, concluded that the adjustment of expectation of the cash flow of the indemnable financial asset of the concession of each distributor, originally presented under financial revenue item, in financial result, should be more adequately classified in the operating revenues group, together with other revenues related to its activity. This allocation reflects more accurately the business model of electric energy distribution and provides a better presentation regarding its performance.
Pursuant to CPC 23 / IAS 8 - Accounting Policies, Changes in Estimates and Error Rectification, by the end of 2016, the CPFL Energia and its Subsidiaries changed their accounting policy previously adopted by an accounting policy that better reflects the performance of the Company's and its subsidiaries' businesses and, therefore, accounting the adjustments to the concession financial asset in Operating Revenues.
In 3Q17, total sectoral financial assets accounted for R$ 1,245 million, a variation of R$ 1,803 million if compared to 3Q16, when sectoral financial liabilities amounted to R$ 558 million.
On September 30, 2017, the balance of sectoral financial assets and liabilities was negative in R$ 107 million, compared to a negative balance of R$ 1,254 million on June 30, 2017 and a negative balance of R$ 435 million on September 30, 2016.
As established by the applicable regulation, any sectoral financial assets or liabilities shall be included in the tariffs of the distributors in their respective annual tariff events.
Página 31 de 65
In the analysis presented in this report, we consider the impact of the inclusion of RGE Sul as an isolated item.
Operating Revenue (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Gross Operating Revenue |
||||||
Revenue with Energy Sales (Captive + TUSD) |
6,203 |
5,648 |
9.8% |
19,170 |
18,375 |
4.3% |
Short-term Electric Energy |
780 |
158 |
394.5% |
1,529 |
258 |
493.5% |
Revenue from Building the Infrastructure of the Concession |
597 |
299 |
99.5% |
1,434 |
782 |
83.3% |
Sectoral Financial Assets and Liabilities |
1,245 |
(558) |
- |
1,049 |
(1,752) |
- |
CDE Resources - Low-income and Other Tariff Subsidies |
334 |
430 |
-22.4% |
1,072 |
925 |
15.8% |
Adjustments to the Concession's Financial Asset |
10 |
45 |
-77.1% |
92 |
197 |
-53.6% |
Other Revenues and Income |
86 |
64 |
34.4% |
243 |
200 |
21.3% |
Total |
9,256 |
6,087 |
52.1% |
24,589 |
18,985 |
29.5% |
|
|
|
|
|||
Deductions from the Gross Operating Revenue |
|
|
|
|
||
ICMS Tax |
(1,247) |
(1,086) |
14.8% |
(3,957) |
(3,573) |
10.7% |
PIS and COFINS Taxes |
(780) |
(532) |
46.7% |
(2,124) |
(1,671) |
27.1% |
CDE Sector Charge |
(785) |
(789) |
-0.5% |
(2,399) |
(2,466) |
-2.7% |
R&D and Energy Efficiency Program |
(55) |
(33) |
68.8% |
(138) |
(97) |
41.8% |
PROINFA |
(41) |
(31) |
34.8% |
(128) |
(80) |
60.9% |
Tariff Flags and Others |
(203) |
(0) |
160880.2% |
(484) |
(377) |
28.3% |
Others |
(5) |
(4) |
21.3% |
(16) |
(13) |
19.0% |
Total |
(3,116) |
(2,474) |
25.9% |
(9,246) |
(8,278) |
11.7% |
|
|
|
|
|||
Net Operating Revenue |
6,140 |
3,613 |
69.9% |
15,343 |
10,708 |
43.3% |
Operating Revenue (without RGE Sul) (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Gross Operating Revenue |
||||||
Revenue with Energy Sales (Captive + TUSD) |
5,288 |
5,648 |
-6.4% |
16,087 |
18,375 |
-12.4% |
Short-term Electric Energy |
633 |
158 |
301.0% |
1,259 |
258 |
388.6% |
Revenue from Building the Infrastructure of the Concession |
485 |
299 |
62.1% |
1,134 |
782 |
44.9% |
Sectoral Financial Assets and Liabilities |
1,056 |
(558) |
- |
954 |
(1,752) |
- |
CDE Resources - Low-income and Other Tariff Subsidies |
273 |
430 |
-36.5% |
837 |
925 |
-9.5% |
Adjustments to the Concession's Financial Asset |
7 |
45 |
-84.2% |
78 |
197 |
-60.7% |
Other Revenues and Income |
74 |
64 |
15.1% |
207 |
200 |
3.2% |
Total |
7,815 |
6,087 |
28.4% |
20,555 |
18,985 |
8.3% |
|
|
|
|
|||
Deductions from the Gross Operating Revenue |
|
|
|
|
||
ICMS Tax |
(1,012) |
(1,086) |
-6.8% |
(3,169) |
(3,573) |
-11.3% |
PIS and COFINS Taxes |
(677) |
(532) |
27.3% |
(1,793) |
(1,671) |
7.3% |
CDE Sector Charge |
(674) |
(789) |
-14.5% |
(2,060) |
(2,466) |
-16.5% |
R&D and Energy Efficiency Program |
(47) |
(33) |
43.2% |
(116) |
(97) |
19.8% |
PROINFA |
(38) |
(31) |
22.3% |
(115) |
(80) |
44.0% |
Tariff Flags and Others |
(176) |
(0) |
139734.1% |
(418) |
(377) |
10.9% |
Others |
(5) |
(4) |
3.6% |
(14) |
(13) |
1.7% |
Total |
(2,628) |
(2,474) |
6.2% |
(7,685) |
(8,278) |
-7.2% |
|
|
|
|
|||
Net Operating Revenue |
5,187 |
3,613 |
43.6% |
12,870 |
10,708 |
20.2% |
In 3Q17, gross operating revenue amounted to R$ 9,256 million, an increase of 52.1% (R$ 3,168 million), due to the following factors:
· Acquisition of RGE Sul (R$ 1,446 million);
· Variation of R$ 1,614 million) in the Sectoral Financial Assets/Liabilities, from a sectoral financial liability of R$ 558 million in 3Q16 to a sectoral financial asset of R$ 1,056 million in 3Q17;
· Increase of 301.0% (R$ 475 million) in Short-term Electric Energy;
· Increase of 62.1% (R$ 186 million) in revenue from building the infrastructure of the concession;
Página 32 de 65
· |
Increase of 15.1% (R$ 10 million) in Other Revenues and Income; |
Partially offset by:
· |
Reduction of 6.4% (R$ 360 million) in the revenue with energy sales (captive + free clients), due to: (i) the negative average tariff adjustment in the distribution companies for the period between 3Q16 and 3Q17 (highlight for the average reductions of 24.21% in CPFL Piratininga in October 2016 and of 10.50% in CPFL Paulista in April 2017); partially offset by (ii) the increase of 3,2% in the sales volume within the concession area, disregarding the volumes of RGE Sul; and (iii) the adoption of the yellow tariff flag in July and September 2017 and of the red tariff flag (level 1) in the month of August 2017, compared to green tariff flag applied in the months of July, August and September 2016; |
· |
Reduction of 36.5% (R$ 157 million) in tariff subsidies (CDE resources), mainly discounts in TUSD (for special consumers) and low-income subsidies, in addition to discounts granted to consumers that obtained an injunction to disoblige the payment of specific components of CDE; |
· |
Reduction of 84.2% (R$ 38 million) in the adjustments to the Concession´s Financial Asset, due to: (i) lower inflation (IPCA of 0.59% in 3Q17 and of 1.04% in 3Q16); and (ii) the reduction in concession’s financial asset observed in the distributors which have gone through the concession renewal process at the end of 2015 (CPFL Santa Cruz, CPFL Leste Paulista, CPFL Sul Paulista, CPFL Jaguari, and CPFL Mococa)2. |
Deductions from the gross operating revenue were R$ 3,116 million in 3Q17, representing an increase of 25.9% (R$ 642 million), due to the following factors:
· |
Acquisition of RGE Sul (R$ 488 million); |
· |
Increase of R$ 176 million in tariff flags approved by the CCEE; |
· |
Increase of 27.3% in PIS and COFINS taxes (R$ 145 million); |
· |
Increase of 43.2% in the R&D and Energy Efficiency Program (R$ 14 million); |
· |
Increase of 22.3% in the PROINFA (R$ 7 million); |
Partially offset by the following factors:
· |
Reduction of 14.5% in the CDE sector charge (R$ 114 million), due to the adoption of CDE System Usage quotas in lower amount than 2016, partially offset by the increase in CDE Energy quotas and in the CDE charges in order to cover ACR Account loans; |
· |
Reduction of 6.8% in ICMS tax (R$ 74 million). |
Net operating revenue reached R$ 6,140 million in 3Q17, representing an increase of 69.9% (R$ 2,527 million).
In the analysis presented in this report, we consider the impact of the inclusion of RGE Sul as an isolated item.
2 In order to calculate the split between the intangible asset and concession’s financial asset, it must be considered the useful life of assets. The portion of the useful life that will occur by the end of the concession is classified as an intangible asset and the residual value is classified as concession’s financial asset, referring to the compensation that the distributor will receive when the assets are reversed to the Grantor.
Página 33 de 65
Cost of Electric Energy (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Cost of Electric Power Purchased for Resale |
||||||
Energy from Itaipu Binacional |
596 |
462 |
28.8% |
1,764 |
1,513 |
16.6% |
Energy Purchased in the Spot Market/PROINFA |
89 |
64 |
39.5% |
243 |
141 |
72.5% |
Energy Purchased through Auction in the Regulated Environment and Bilateral Contracts |
3,690 |
1,797 |
105.3% |
8,532 |
4,942 |
72.7% |
PIS and COFINS Tax Credit |
(403) |
(215) |
87.7% |
(972) |
(610) |
59.3% |
Total |
3,971 |
2,108 |
88.4% |
9,567 |
5,985 |
59.8% |
|
|
|
|
|||
Charges for the Use of the Transmission and Distribution System |
|
|
|
|
||
Basic Network Charges |
472 |
179 |
163.5% |
928 |
548 |
69.2% |
Itaipu Transmission Charges |
66 |
13 |
395.8% |
97 |
39 |
149.7% |
Connection Charges |
28 |
19 |
50.9% |
82 |
52 |
59.7% |
Charges for the Use of the Distribution System |
12 |
8 |
41.4% |
32 |
25 |
30.0% |
System Service Usage Charges - ESS |
(76) |
85 |
- |
(224) |
282 |
- |
Reserve Energy Charges - EER |
- |
6 |
-100.0% |
- |
107 |
-100.0% |
PIS and COFINS Tax Credit |
(48) |
(29) |
66.0% |
(88) |
(97) |
-9.9% |
Total |
455 |
281 |
61.9% |
828 |
955 |
-13.4% |
|
|
|
|
|||
Cost of Electric Energy |
4,427 |
2,390 |
85.2% |
10,395 |
6,941 |
49.8% |
Cost of Electric Energy (without RGE Sul) (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Cost of Electric Power Purchased for Resale |
||||||
Energy from Itaipu Binacional |
497 |
462 |
7.4% |
1,469 |
1,513 |
-2.9% |
Energy Purchased in the Spot Market/PROINFA |
82 |
64 |
29.5% |
193 |
141 |
36.9% |
Energy Purchased through Auction in the Regulated Environment and Bilateral Contracts |
3,128 |
1,797 |
74.0% |
7,240 |
4,942 |
46.5% |
PIS and COFINS Tax Credit |
(343) |
(215) |
59.6% |
(823) |
(610) |
35.0% |
Total |
3,364 |
2,108 |
59.6% |
8,079 |
5,985 |
35.0% |
|
|
|
|
|||
Charges for the Use of the Transmission and Distribution System |
|
|
|
|
||
Basic Network Charges |
384 |
179 |
114.2% |
756 |
548 |
37.8% |
Itaipu Transmission Charges |
55 |
13 |
313.3% |
81 |
39 |
108.1% |
Connection Charges |
18 |
19 |
-1.8% |
54 |
52 |
4.0% |
Charges for the Use of the Distribution System |
12 |
8 |
41.4% |
32 |
25 |
30.0% |
System Service Usage Charges - ESS |
(76) |
85 |
- |
(224) |
282 |
- |
Reserve Energy Charges - EER |
13 |
6 |
133.5% |
32 |
107 |
-70.2% |
PIS and COFINS Tax Credit |
(38) |
(29) |
31.2% |
(68) |
(97) |
-30.6% |
Total |
369 |
281 |
31.2% |
662 |
955 |
-30.6% |
|
|
|
|
|||
Cost of Electric Energy |
3,733 |
2,390 |
56.2% |
8,741 |
6,941 |
25.9% |
The cost of electric energy, comprising the purchase of electricity for resale and charges for the use of the distribution and transmission system, amounted to R$ 4,427 million in 3Q17, representing an increase of 85.2% (R$ 2,037 million):
· The cost of electric power purchased for resale was R$ 3,971 million in 3Q17, representing an increase of 88.4% (R$ 1,863 million), due to the following factors:
(i) Acquisition of RGE Sul (R$ 607 million); | |
(ii) Increase of 74.0% (R$ 1,331 million) in the cost of energy purchased in the regulated environment and bilateral contracts, due to the increase of 85.4% in the average purchase price (from R$ 181.57/MWh in 3Q16 to R$ 336.67/MWh in 3Q17), partially offset by the reduction of 6.1% (608 GWh) in the volume of purchased energy; | |
(iii) Increase of 7.4% (R$ 34 million) in the cost of energy from Itaipu, due to the increase of 10.8% in the average purchase price (from R$ 180.93/MWh in 3Q16 to R$ 200.53/MWh in 3Q17), partially offset by the reduction of 3.1% (79 GWh) in the volume of purchased energy; | |
(iv) Increase of R$ 19 million in the cost of energy purchased in the short term and Proinfa, mainly due to the higher average PLD (from R$ 116.01/MWh in 3Q16 to R$ 436.20/MWh in 3Q17, in the Southeast/Midwest submarket, and from R$ 112.05/MWh in 3Q16 to R$ 436.20/MWh in 3Q17, in the South submarket), despite the reduction in the average purchase price of Proinfa (from R$ 308.22/MWh in 3Q16 to R$ 246.10/MWh in 3Q17); |
Página 34 de 65
Partially offset by:
(v) Increase of 59.6% (R$ 128 million) in PIS and Cofins tax credit (cost reducer), generated from the energy purchase.
· Charges for the use of the transmission and distribution system reached R$ 455 million in 3Q17, representing an increase of 61.9% (R$ 174 million), due to the following factors:
(i) Acquisition of RGE Sul (R$ 86 million);
(ii) Increase of 114.2% (R$ 205 million) in charges for basic network;
(iii) Increase of 313.3% (R$ 42 million) in the Itaipu transmission charges;
(iv) Increase of 133.5% (R$ 7 million) in the Energy Reserve Charges – EER;
(v) Increase of 41.4% (R$ 3 million) in the usage of the distribution system charges;
Partially offset by:
(vi) Variation of R$ 160 million in the System Service Usage Charges – ESS, from an expense of R$ 85 million in 3Q16 to a revenue of R$ 76 million in 3Q17;
(vii) Increase of 31.2% (R$ 9 million) in PIS and Cofins tax credit (cost reducer), generated from the charges.
10.1.1.5) Operating Costs and Expenses
In the analysis presented in this report, we consider the impact of the inclusion of RGE Sul as an isolated item.
Operating costs and expenses reached R$ 1,145 million in 3Q17, compared to R$ 934 million in 3Q16, an increase of 51.4% (R$ 481 million), due to the following factors:
PMSO
PMSO reached R$ 600 million in 3Q17, an increase of 27.8% (R$ 130 million), compared to R$ 470 million in 3Q16. Disregarding the acquisition of RGE Sul, PMSO would increase 11.2% (R$ 52 million).
Página 35 de 65
Reported PMSO (R$ million) | ||||||||
|
3Q17 |
3Q16 |
Variation |
9M17 |
9M16 |
Variação | ||
|
R$ MM |
% |
R$ MM |
% | ||||
Reported PMSO |
|
|
|
|
|
|
|
|
Personnel |
(215) |
(167) |
(48) |
28.7% |
(669) |
(508) |
(161) |
31.6% |
Material |
(43) |
(33) |
(11) |
33.0% |
(124) |
(90) |
(34) |
37.6% |
Outsourced Services |
(212) |
(164) |
(48) |
29.3% |
(618) |
(467) |
(151) |
32.3% |
Other Operating Costs/Expenses |
(130) |
(106) |
(24) |
22.2% |
(453) |
(396) |
(57) |
14.4% |
Allowance for doubtful accounts |
(33) |
(33) |
(1) |
2.4% |
(119) |
(127) |
7 |
-5.8% |
Legal, judicial and indemnities expenses |
(19) |
(29) |
9 |
-32.1% |
(120) |
(126) |
6 |
-4.7% |
Others |
(77) |
(45) |
(32) |
71.0% |
(213) |
(143) |
(70) |
49.2% |
Total Reported PMSO |
(600) |
(470) |
(130) |
27.8% |
(1,864) |
(1,462) |
(403) |
27.5% |
|
|
|
|
|
|
|
|
|
PMSO RGE Sul |
|
|
|
|
|
|
|
|
Personnel |
(36) |
|
|
|
(117) |
|
|
|
Material |
(7) |
|
|
|
(23) |
|
|
|
Outsourced Services |
(31) |
|
|
|
(93) |
|
|
|
Other Operating Costs/Expenses |
(4) |
|
|
|
(60) |
|
|
|
Allowance for doubtful accounts |
(8) |
|
|
|
(22) |
|
|
|
Legal, judicial and indemnities expenses |
30 |
|
|
|
6 |
|
|
|
Others |
(26) |
|
|
|
(44) |
|
|
|
Total PMSO RGE Sul |
(78) |
|
|
|
(294) |
|
|
|
|
|
|
|
|
|
|
|
|
PMSO (-) RGE Sul |
|
|
|
|
|
|
|
|
Personnel |
(179) |
(167) |
(12) |
7.2% |
(552) |
(508) |
(43) |
8.5% |
Material |
(36) |
(33) |
(4) |
10.8% |
(101) |
(90) |
(11) |
12.0% |
Outsourced Services |
(181) |
(164) |
(17) |
10.5% |
(525) |
(467) |
(58) |
12.4% |
Other Operating Costs/Expenses |
(126) |
(106) |
(20) |
18.6% |
(393) |
(396) |
3 |
-0.7% |
Allowance for doubtful accounts |
(26) |
(33) |
7 |
-20.9% |
(97) |
(127) |
29 |
-23.2% |
Legal, judicial and indemnities expenses |
(49) |
(29) |
(20) |
70.9% |
(127) |
(126) |
(0) |
0.2% |
Others |
(51) |
(45) |
(6) |
13.8% |
(169) |
(143) |
(26) |
18.3% |
Total PMSO (-) RGE Sul |
(522) |
(470) |
(52) |
11.2% |
(1,571) |
(1,462) |
(109) |
7.5% |
Personnel – increase of 28.7% (R$ 48 million), mainly due to the acquisition of RGE Sul (R$ 36 million), of the collective bargaining agreement effects (R$ 7 million) and others (R$ 5 million);
Material – increase of 33.0% (R$ 11 million), mainly due to the acquisition of RGE Sul (R$ 7 million), the replacement of material to the maintenance of lines and grid (R$ 2 million) and others (R$ 2 million);
Outsourced services – increase of 29.3% (R$ 48 million), mainly due to the following items: acquisition of RGE Sul (R$ 31 million), lines, grid and substations maintenance service (R$ 4 million), hardware/software maintenance (R$ 3 million), tree pruning (R$ 3 million), meter reading and use (R$ 2 million), machinery and equipment maintenance (R$ 2 million), collection actions (R$ 1 million), outsourced services (R$ 1 million) and Call Center (R$ 1 million);
Other operating costs/expenses – increase of 22.2% (R$ 24 million), mainly due to the following factors: acquisition of RGE Sul (R$ 4 million), legal and judicial expenses (R$ 20 million) and other expenses (R$ 7 million). These effects were partially offset by the reduction in the allowance for doubtful accounts (R$ 7 million).
Página 36 de 65
Other operating costs and expenses
Other operating costs and expenses reached R$ 814 million in 3Q17, compared to R$ 464 million in 3Q16, registering an increase of 75.4% (R$ 350 million), with the variations below:
(i) Acquisition of RGE Sul (R$ 149 million); | |
(ii) Increase of 62.1% (R$ 186 million) in cost of building the concession´s infrastructure. This item, which reached R$ 485 million in 3Q17, does not affect results, since it has its counterpart in “operating revenue”; | |
(iii) Increase of 21.6% (R$ 26 million) in Depreciation and Amortization item; | |
(iv) Increase of 10.2% (R$ 2 million) in Private Pension Fund item, due to the registration of the impacts of the 2017 actuarial report; | |
Parcialmente compensados por: | |
(v) Reduction of 89.9% (R$ 14 million) in Amortization of Acquisition Goodwillitem. |
EBITDA totaled R$ 488 million in 3Q17, registering an increase of 13.3% (R$ 57 million).
Conciliation of Net Income and EBITDA (R$ million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Net income |
91 |
52 |
75.9% |
284 |
427 |
-33.5% |
Depreciation and Amortization |
190 |
142 |
|
569 |
422 |
|
Financial Results |
130 |
194 |
|
478 |
350 |
|
Income Tax /Social Contribution |
77 |
44 |
|
235 |
274 |
|
EBITDA |
488 |
431 |
13.3% |
1,566 |
1,473 |
6.4% |
10.1.1.7) Financial Result
In the analysis presented in this report, we consider the impact of the inclusion of RGE Sul as an isolated item. However, the impacts caused by the acquisition of RGE Sul in CPFL Energia’s results (due to the reduction in Cash and increase in Indebtedness for acquisition funding, among others) were not excluded in our analyzes.
In 3Q17, the net financial result recorded a net financial expense of R$ 130 million, a reduction of 32.6% (R$ 63 million).
Página 37 de 65
Financial Result (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Revenues |
||||||
Income from Financial Investments |
41 |
103 |
-59.8% |
189 |
274 |
-30.9% |
Additions and Late Payment Fines |
60 |
56 |
7.8% |
201 |
169 |
18.5% |
Fiscal Credits Update |
5 |
6 |
-12.5% |
7 |
17 |
-60.5% |
Judicial Deposits Update |
14 |
9 |
51.1% |
39 |
26 |
52.3% |
Monetary and Foreign Exchange Updates |
8 |
27 |
-68.9% |
26 |
68 |
-61.2% |
Discount on Purchase of ICMS Credit |
4 |
2 |
93.5% |
9 |
13 |
-31.0% |
Sectoral Financial Assets Update |
(1) |
(6) |
-81.4% |
- |
51 |
-100.0% |
PIS and COFINS - over Other Financial Revenues |
(7) |
(18) |
-59.3% |
(28) |
(33) |
-15.5% |
Others |
9 |
7 |
29.4% |
29 |
32 |
-9.5% |
Total |
132 |
184 |
-28.5% |
472 |
617 |
-23.4% |
|
|
|
|
|||
Expenses |
|
|
|
|
||
Debt Charges |
(144) |
(169) |
-14.8% |
(492) |
(503) |
-2.1% |
Monetary and Foreign Exchange Updates |
(73) |
(178) |
-58.9% |
(322) |
(383) |
-16.0% |
(-) Capitalized Interest |
5 |
3 |
59.7% |
14 |
9 |
63.1% |
Sectoral Financial Liabilities Update |
(30) |
(1) |
2951.3% |
(81) |
(17) |
368.1% |
Others |
(20) |
(33) |
-39.7% |
(69) |
(72) |
-3.7% |
Total |
(262) |
(378) |
-30.6% |
(950) |
(966) |
-1.7% |
|
|
|
|
|||
Financial Result |
(130) |
(194) |
-32.7% |
(478) |
(350) |
36.5% |
Financial Result (without RGE Sul) (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Revenues |
||||||
Income from Financial Investments |
38 |
103 |
-62.7% |
176 |
274 |
-35.6% |
Additions and Late Payment Fines |
48 |
56 |
-13.0% |
158 |
169 |
-6.7% |
Fiscal Credits Update |
5 |
6 |
-12.5% |
7 |
17 |
-60.5% |
Judicial Deposits Update |
13 |
9 |
42.3% |
37 |
26 |
43.2% |
Monetary and Foreign Exchange Updates |
9 |
27 |
-67.3% |
26 |
68 |
-61.7% |
Discount on Purchase of ICMS Credit |
4 |
2 |
93.5% |
9 |
13 |
-31.0% |
Sectoral Financial Assets Update |
(1) |
(6) |
-81.4% |
- |
51 |
-100.0% |
PIS and COFINS - over Other Financial Revenues |
(7) |
(18) |
- |
(28) |
(33) |
-15.5% |
Others |
8 |
7 |
15.2% |
24 |
32 |
-23.0% |
Total |
116 |
184 |
-37.1% |
410 |
617 |
-33.5% |
|
|
|
|
|||
Expenses |
|
|
|
|
||
Debt Charges |
(112) |
(169) |
-33.6% |
(384) |
(503) |
-23.7% |
Monetary and Foreign Exchange Updates |
(64) |
(178) |
-64.2% |
(304) |
(383) |
-20.6% |
(-) Capitalized Interest |
5 |
3 |
36.7% |
12 |
9 |
35.3% |
Sectoral Financial Liabilities Update |
(25) |
(1) |
2403.3% |
(62) |
(17) |
262.0% |
Others |
(13) |
(33) |
-60.9% |
(56) |
(72) |
-22.6% |
Total |
(209) |
(378) |
-44.6% |
(794) |
(966) |
-17.8% |
|
|
|
|
|||
Financial Result |
(93) |
(194) |
-51.8% |
(384) |
(350) |
9.8% |
The items explaining these changes are as follows:
· Financial Revenue: reduction of 28.5% (R$ 52 million), from R$ 184 million in 3Q16 to R$ 132 million in 3Q17, mainly due to the following factors:
(i) Reduction of 62.7% (R$ 64 million) in the income from financial investments, due to the lower average balance of investments and the fall of CDI interbank rate;
(ii) Reduction of 67.3% (R$ 18 million) in adjustments for inflation and exchange rate changes, due to the reduction of R$ 13 million in revenues from fines, interest and monetary adjustment relating to installment payments made by consumers and the reduction of R$ 10 million in the adjustment of the balance of tariff subsidies, as determined by Aneel; partially offset by the increase of R$ 5 million in other adjustments for inflation and exchange rate changes;
Página 38 de 65
(iii) Reduction of 13.0% (R$ 7 million) in late payment interest and fines; | |
(iv) Reduction of 12.5% (R$ 1 million) in fiscal credits update; | |
Partially offset by: | |
(v) Acquisition of RGE Sul (R$ 16 million); | |
(vi) Reduction of 59.3% (R$ 11 million) in PIS and Cofins on financial revenues (revenue reducer); | |
(vii) Reduction of 81.4% (R$ 5 million) in sectoral financial assets update (revenue reducer); | |
(viii) Increase of 42.3% (R$ 4 million) in adjustments for inflation of escrow deposits; | |
(ix) Increase of 93.5% (R$ 2 million) in the discount on purchase of ICMS credit; | |
(x) Increase of 15.2% (R$ 1 million) in other financial revenues. |
· Financial Expense: reduction of 30.6% (R$ 116 million), from R$ 378 million in 3Q16 to R$ 262 million in 3Q17, mainly due to the following factors:
(i) Reduction of 64.2% (R$ 115 million) in adjustments for inflation and exchange rate changes, due to: (a) the reduction of debt charges in foreign currency, with swap to CDI interbank rate (R$ 69 million); (b) the mark-to-market positive effect for financial operations under Law 4,131 – non-cash effect (R$ 37 million); and (c) the effect of exchange variation in Itaipu invoices (R$ 9 million); | |
(ii) Reduction of 33.6% (R$ 57 million) in interest on debt in local currency; | |
(iii) Reduction of 60.9% (R$ 20 million) in other financial expenses; | |
(iv) Increase of 36.7% (R$ 1 million) in capitalized interest (expense reducer); | |
Partially offset by: | |
(v) Acquisition of RGE Sul (R$ 53 million); | |
(vi) Increase of R$ 24 million in the sectoral financial liabilities update. |
In 3Q17, a Net Income of R$ 91 million was registered, an increase of 75.9% (R$ 39 million) if compared to the Net Income of R$ 52 million observed in 3Q16.
Página 39 de 65
Reference dates
Tariff Process Dates | |
Disco |
Date |
CPFL Santa Cruz |
March 22nd* |
CPFL Leste Paulista |
March 22nd* |
CPFL Jaguari |
March 22nd* |
CPFL Sul Paulista |
March 22nd* |
CPFL Mococa |
March 22nd* |
CPFL Paulista |
April 8th |
RGE Sul |
April 19th |
RGE |
June 19th |
CPFL Piratininga |
October 23rd |
Tariff Revision | |||
Distributor |
Periodicity |
Next Revision |
Cycle |
CPFL Paulista |
Every 5 years |
April 2018 |
4th PTRC |
RGE Sul |
Every 5 years |
April 2018 |
4th PTRC |
RGE |
Every 5 years |
June 2018 |
4th PTRC |
CPFL Piratininga |
Every 4 years |
October 2019 |
5th PTRC |
CPFL Santa Cruz |
Every 5 years |
March 2021* |
5th PTRC |
CPF Leste Paulista |
Every 5 years |
March 2021* |
5th PTRC |
CPFL Jaguari |
Every 5 years |
March 2021* |
5th PTRC |
CPFL Sul Paulista |
Every 5 years |
March 2021* |
5th PTRC |
CPFL Mococa |
Every 5 years |
March 2021* |
5th PTRC |
* In the Public Hearing 038/2015, held by Aneel, the revision dates have been changed to March 22. The date previously used for the adjustments of these distributors was February 3.
Annual tariff adjustments occurred in March 2017
|
CPFL Santa Cruz |
CPFL Leste Paulista |
CPFL Jaguari |
CPFL Sul Paulista |
CPFL Mococa |
Ratifying Resolution |
2,211 |
2,210 |
2,213 |
2,209 |
2,212 |
Adjustment |
-1.28% |
0.77% |
2.05% |
1.63% |
1.65% |
Parcel A |
0.88% |
1.26% |
3.26% |
0.44% |
2.78% |
Parcel B |
0.48% |
1.92% |
0.62% |
0.53% |
0.67% |
Financial Components |
-2.65% |
-2.41% |
-1.83% |
0.66% |
-1.80% |
Effect on consumer billings |
-10.37% |
-3.28% |
-8.41% |
-4.15% |
-2.56% |
Date of entry into force |
3/22/2017 |
3/22/2017 |
3/22/2017 |
3/22/2017 |
3/22/2017 |
Página 40 de 65
Annual tariff adjustments occurred in April, June and October 2017
|
CPFL Paulista |
RGE Sul |
RGE |
Piratininga |
Ratifying Resolution |
2,217 |
2,218 |
2,252 |
2,314 |
Adjustment |
-0.80% |
-0.20% |
3.57% |
7.69% |
Parcel A |
1.37% |
2.32% |
2.17% |
6.78% |
Parcel B |
0.76% |
0.63% |
0.20% |
-0.45% |
Financial Components |
-2.93% |
-3.15% |
1.21% |
1.37% |
Effect on consumer billings |
-10.50% |
-6.43% |
5.00% |
17.28% |
Date of entry into force |
4/8/2017 |
4/19/2017 |
6/19/2017 |
10/23/2017 |
10.1.3) Operating Performance of Distribution
SAIDI and SAIFI
Below we are presenting the results achieved by the distribution companies with regard to the main indicators that measure the quality and reliability of their supply of electric energy. The SAIDI (System Average Interruption Duration Index) measures the average duration, in hours, of interruption per consumer per year. The SAIFI (System Average Interruption Frequency Index) measures the average number of interruptions per consumer per year.
SAIDI and SAIFI Indexes1 | ||||||||||||||||
Distributor |
SAIDI (hours) |
SAIFI (interruptions) | ||||||||||||||
2013 |
2014 |
2015 |
2016 |
1Q17 |
2Q17 |
3Q17 |
ANEEL1 |
2013 |
2014 |
2015 |
2016 |
1Q17 |
2Q17 |
3Q17 |
ANEEL1 | |
CPFL Paulista |
7.14 |
6.93 |
7.76 |
7.62 |
7.33 |
7.23 |
7.37 |
7.50 |
4.73 |
4.88 |
4.89 |
5.00 |
4.89 |
4.94 |
5.10 |
6.53 |
CPFL Piratininga |
7.44 |
6.98 |
7.24 |
6.97 |
8.82 |
7.45 |
7.22 |
6.93 |
4.58 |
4.19 |
4.31 |
3.80 |
4.28 |
4.56 |
4.52 |
6.04 |
RGE |
17.35 |
18.77 |
15.98 |
14.44 |
14.43 |
13.88 |
14.42 |
12.15 |
9.04 |
9.14 |
8.33 |
7.56 |
7.82 |
7.57 |
7.85 |
9.10 |
RGE Sul |
14.07 |
17.75 |
19.11 |
19.45 |
17.34 |
16.24 |
16.34 |
11.38 |
7.39 |
8.87 |
8.42 |
9.41 |
8.84 |
8.36 |
8.23 |
9.10 |
CPFL Santa Cruz |
6.97 |
6.74 |
8.46 |
5.65 |
5.38 |
5.23 |
5.09 |
9.25 |
6.82 |
5.29 |
6.34 |
4.09 |
3.79 |
3.88 |
3.76 |
8.76 |
CPFL Jaguari |
5.92 |
5.41 |
6.93 |
7.10 |
7.81 |
7.26 |
6.33 |
8.00 |
5.43 |
4.32 |
4.61 |
6.13 |
7.34 |
6.95 |
5.47 |
8.00 |
CPFL Mococa |
4.86 |
6.88 |
7.04 |
10.56 |
10.30 |
9.73 |
6.07 |
10.19 |
4.93 |
7.31 |
5.92 |
6.63 |
6.33 |
6.04 |
6.02 |
8.79 |
CPFL Leste Paulista |
7.58 |
8.48 |
7.92 |
8.01 |
8.19 |
8.44 |
8.02 |
9.79 |
6.33 |
6.30 |
5.67 |
5.73 |
5.69 |
6.45 |
6.20 |
8.49 |
CPFL Sul Paulista |
9.08 |
9.69 |
11.51 |
15.20 |
12.62 |
11.11 |
10.05 |
10.45 |
6.71 |
7.03 |
9.47 |
11.76 |
9.98 |
9.50 |
8.92 |
8.72 |
1) Regulatory Agency (ANEEL) Limit – 2017.
In 2016, CPFL Piratininga and CPFL Mococa were impacted by energy disconnections originated from the Transmission company (External Supply), in a volume higher than the historical, but in recent periods the SAIDI indicator is showing an improving trend of results.
RGE Sul’s and CPFL Sul Paulista’s SAIDIs registered an improvement in 3Q17 indicators, when compared to 2016 demonstrating the effectiveness of maintenance and improvement works, and also because, in 9M17, we have more favorable weather conditions than in 2016, when we were still suffering the effects of what was considered the strongest El Niño of the last 15 years.
The SAIFI indicator was kept below regulatory limits in all companies (except CPFL Sul Paulista, but with a tendency to enter the target until the end of 2017), reflecting the effectiveness of the maintenance performed and the constant investments in improvements and modernization carried out by CPFL.
Página 41 de 65
Losses
Find below the performance of CPFL distribution companies throughout the last quarters:
12M Accumulated Losses1 |
Technical Losses |
Non-Technical Losses |
Total Losses | ||||||||||||
4Q16 |
1Q17 |
2Q17 |
3Q17 |
ANEEL2 |
4Q16 |
1Q17 |
2Q17 |
3Q17 |
ANEEL2 |
4Q16 |
1Q17 |
2Q17 |
3Q17 |
ANEEL2 | |
CPFL Energia |
6.30% |
6.31% |
6.34% |
6.36% |
6.39% |
3.00% |
2.92% |
2.64% |
2.81% |
1.81% |
9.31% |
9.23% |
8.97% |
9.16% |
8.20% |
CPFL Paulista |
6.22% |
6.17% |
6.21% |
6.18% |
6.32% |
3.36% |
3.49% |
3.24% |
3.35% |
1.98% |
9.58% |
9.66% |
9.45% |
9.53% |
8.30% |
CPFL Piratininga |
5.14% |
5.31% |
5.37% |
5.45% |
5.52% |
2.16% |
2.20% |
2.07% |
2.08% |
1.45% |
7.30% |
7.52% |
7.44% |
7.53% |
6.97% |
RGE |
7.32% |
7.37% |
7.39% |
7.44% |
7.28% |
2.72% |
2.50% |
1.77% |
1.91% |
1.81% |
10.04% |
9.87% |
9.16% |
9.35% |
9.09% |
RGE Sul |
6.83% |
6.70% |
6.66% |
6.73% |
6.75% |
3.85% |
3.02% |
3.00% |
3.59% |
2.20% |
10.67% |
9.72% |
9.67% |
10.33% |
8.95% |
CPFL Santa Cruz |
8.65% |
8.68% |
9.07% |
8.97% |
7.76% |
1.17% |
1.31% |
0.21% |
0.93% |
0.51% |
9.82% |
9.98% |
9.28% |
9.90% |
8.27% |
CPFL Jaguari |
3.40% |
3.39% |
3.47% |
3.54% |
4.28% |
1.23% |
1.01% |
0.16% |
0.29% |
0.41% |
4.63% |
4.40% |
3.64% |
3.83% |
4.69% |
CPFL Mococa |
7.50% |
7.34% |
7.42% |
7.65% |
8.17% |
2.80% |
3.18% |
3.04% |
3.08% |
0.57% |
10.29% |
10.52% |
10.46% |
10.73% |
8.74% |
CPFL Leste Paulista |
8.39% |
8.39% |
8.34% |
8.16% |
7.99% |
2.49% |
2.18% |
1.69% |
1.46% |
0.82% |
10.88% |
10.57% |
10.03% |
9.62% |
8.81% |
CPFL Sul Paulista |
8.35% |
8.25% |
8.24% |
8.25% |
5.94% |
1.74% |
1.97% |
1.62% |
1.81% |
0.22% |
10.08% |
10.22% |
9.86% |
10.05% |
6.16% |
1) The figures above were adequate to a better comparison with the regulatory losses trajectory defined by the Regulatory Agency (ANEEL). In CPFL Piratininga, RGE and RGE Sul, high-voltage customers were disregarded.
2) Regulatory targets for losses are defined in the periodic tariff revision (RTP) process. CPFL Paulista, RGE and RGE Sul are on the 3rd PTRC and other distributors are in 4th PTRC.
The consolidated losses index of CPFL Energia, already considering RGE Sul in the historical series, was of 9.16% in 3Q17, compared to 8.98% in 3Q16, an increase of 0.18 p.p. Disregarding RGE Sul, the consolidated losses index of CPFL Energia would be of 8.98% in 3Q17, compared to 8.84% in 3Q16, an increase of 0.14 p.p.
Find below how was performance of losses in low voltage market:
12-month Accumulated Losses - LV1 |
Non-technical Losses / LV | ||||
4Q16 |
1Q17 |
2Q17 |
3Q17 |
ANEEL2 | |
CPFL Paulista |
7.91% |
8.23% |
7.65% |
7.93% |
4.61% |
CPFL Piratininga |
6.10% |
6.21% |
5.85% |
5.89% |
3.90% |
RGE |
6.71% |
6.18% |
4.36% |
4.73% |
4.41% |
RGE Sul |
9.23% |
7.15% |
7.11% |
8.54% |
4.91% |
CPFL Santa Cruz |
2.36% |
2.64% |
0.42% |
1.88% |
0.98% |
CPFL Jaguari |
4.93% |
4.10% |
0.66% |
1.17% |
1.60% |
CPFL Mococa |
4.94% |
5.64% |
5.42% |
5.52% |
0.98% |
CPFL Leste Paulista |
4.48% |
3.96% |
3.07% |
2.65% |
1.46% |
CPFL Sul Paulista |
3.76% |
4.27% |
3.48% |
3.89% |
0.46% |
1) Regulatory targets for losses are defined in the periodic tariff revision (RTP) process. CPFL Paulista, RGE and RGE Sul are on the 3rd PTRC and other distributors are in 4th PTRC.
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Consolidated Income Statement - Commercialization (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Net Operating Revenue |
986 |
561 |
75.9% |
1,478 |
2,370 |
-37.6% |
EBITDA(1) |
42 |
55 |
-23.9% |
104 |
117 |
-11.6% |
Net Income |
26 |
39 |
-34.3% |
73 |
61 |
20.0% |
Note:
(1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization.
Operating Revenue
In 3Q17, net operating revenue reached R$ 986 million, representing an increase of 75.9% (R$ 425 million).
EBTIDA
In 3Q17, EBITDA totaled R$ 42 million, compared to R$ 55 million in 3Q16, a decrease of 23.9% (R$ 13 million).
Net Income
In 3Q17, net income amounted to R$ 26 million, compared to R$ 39 million in 3Q16, a decrease of 34.3% (R$ 13 million).
10.2.2) Services Segment
Consolidated Income Statement - Services (R$ Million) | ||||||
|
3Q17 |
3Q16 |
Var. |
9M17 |
9M16 |
Var. |
Net Operating Revenue |
164 |
118 |
38.9% |
387 |
298 |
29.9% |
EBITDA(1) |
21 |
24 |
-15.0% |
61 |
61 |
-0.5% |
Net Income |
13 |
18 |
-28.0% |
38 |
41 |
-7.2% |
Note:
(1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization.
Operating Revenue
In 3Q17, net operating revenue reached R$ 164 million, representing an increase of 38.9% (R$ 46 million).
EBITDA
In 3Q17, EBITDA totaled R$ 21 million, compared to R$ 24 million in 3Q16, a decrease of 15%.
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Net Income
In 3Q17, net income amounted to R$ 13 million, compared to R$ 18 million in 3Q16, a decrease of 28.0% (R$ 5 million).
Nota:
(1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization.
In 3Q17, Gross Operating Revenue reached R$ 322 million, an increase of 13.9% (R$ 39 million) in relation to 3Q16.
The variation in the gross operating revenue is mainly due to the following factors:
Net Operating Revenue reached R$ 293 million, registering an increase of 14.2% (R$ 36 million) in relation to 3Q16.
In 3Q17, the cost of electric power reached R$ 49 million, an increase of 113.0% (R$ 26 million), when compared to the same period of the previous year, due mainly to the following factors:
· Increase of 153.0% (R$ 25 million) in the cost with Electric Energy Purchased for Resale, mainly due to the following factors:
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(i) Increase of R$ 21 million in the energy costs from the plants of Rio das Antas Complex (Ceran), due to the increase in the volume of energy purchased in 150%, together with an increase in price of purchased energy (higher average PLD);
(ii) In CPFL Geração, increase in the cost of energy from Barra Grande HPP (Baesa) (R$ 9 million) due to the increase in the energy purchase average price in 60%.
· Increase of 13.0% in the cost with Charges for the Use of the Transmission and Distribution System (R$ 1 million).
In 3Q17, operating costs and expenses reached R$ 56 million, compared to R$ 54 million in 3Q16, an increase of 3.1% (R$ 2 million), due to the variations in:
(i) PMSO item, that reached R$ 24 million in 3Q17, compared to R$ 22 million in 3Q16, registering an increase of 7.6% (R$ 2 million). The table below lists the main variation in PMSO:
PMSO (R$ million) | ||||||
|
3Q17 |
3Q16 |
Variation |
9M17 |
9M16 |
Variation |
|
% |
% | ||||
PMSO |
|
|
|
|
|
|
Personnel |
(8.7) |
(8.0) |
8.1% |
(28.6) |
(27.2) |
4.9% |
Material |
(2.5) |
(0.7) |
272.3% |
(3.7) |
(2.1) |
76.6% |
Outsourced Services |
(4.7) |
(4.7) |
0.4% |
(19.6) |
(14.9) |
31.5% |
Other Operating Costs/Expenses |
(8.3) |
(9.1) |
-8.6% |
(26.9) |
(31.2) |
-13.7% |
GSF Risk Premium |
(1.8) |
(4.1) |
-56.3% |
(5.4) |
(5.4) |
- |
Others |
(6.5) |
(4.9) |
31.6% |
(21.5) |
(25.8) |
-16.5% |
Total PMSO |
(24.1) |
(22.4) |
7.6% |
(78.8) |
(75.4) |
4.5% |
This variation is explained mainly by the following factors:
i. Increase of 8.1% (R$ 1 million) in Personnel expenses, mainly due to Collective labor agreement – wages and benefits;
ii. Increase of R$ 2 million in expenses with Material in the controlled company Ceran, due to an increase in expenses with material for plant maintenance;
Partially offset by:
iii. Reduction of 8.6% (R$ 1 million) in Other Operating Costs/Expenses.
(ii) Maintenance of Depreciation and Amortization.
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Equity Income (R$ Million) | ||||||||
3Q17 | 3Q16 | Var. R$ | Var. % | 9M17 | 9M16 | Var. R$ | Var. % | |
Projects | ||||||||
Barra Grande HPP | 9 | 0 | 8 | 100.0% | 12 | 8 | 4 | 46.6% |
Campos Novos HPP | 26 | 31 | (5) | -15.1% | 89 | 84 | 5 | 5.7% |
Foz do Chapecó HPP | 34 | 27 | 7 | 27.8% | 94 | 65 | 29 | 45.1% |
Epasa TPP | 21 | 11 | 10 | 91.2% | 58 | 44 | 14 | 31.4% |
Total | 90 | 69 | 21 | 30.8% | 253 | 201 | 52 | 25.8% |
In 3Q17, Equity Income result reached R$ 90 million, compared to R$ 69 million in 3Q16, an increase of 30.8% (R$ 21 million).
Equity Income (R$ Million) | ||||||||
BAESA | 3Q17 | 3Q16 | Var. R$ | Var. % | 9M17 | 9M16 | Var. R$ | Var. % |
Net Revenue | 31 | 13 | 18 | 135.2% | 61 | 45 | 15 | 33.5% |
Operating Costs / Expenses | (14) | (6) | (9) | 143.2% | (29) | (13) | (16) | 128.6% |
Deprec. / Amortization | (3) | (3) | 0 | -0.2% | (10) | (10) | 0 | -2.0% |
Net Financial Result | (1) | (1) | 0 | -41.5% | (3) | (4) | 1 | -31.5% |
Income Tax | (5) | (0) | (5) | 4024.3% | (7) | (4) | (2) | 54.8% |
Net Income | 9 | 0 | 8 | 4922.9% | 12 | 8 | 4 | 46.6% |
Equity Income (R$ Million) | ||||||||
ENERCAN | 3Q17 | 3Q16 | Var. R$ | Var. % | 9M17 | 9M16 | Var. R$ | Var. % |
Net Revenue | 71 | 69 | 2 | 2.2% | 212 | 204 | 7 | 3.6% |
Operating Costs / Expenses | (27) | (15) | (12) | 79.0% | (65) | (51) | (15) | 28.8% |
Deprec. / Amortization | (6) | (7) | 0 | -2.0% | (19) | (20) | 0 | -1.9% |
Net Financial Result | (1) | (4) | 3 | -63.7% | (8) | (13) | 5 | -40.0% |
Income Tax | (14) | (16) | 2 | -13.4% | (46) | (43) | (3) | 5.9% |
Net Income | 26 | 31 | (5) | -15.1% | 89 | 84 | 5 | 5.7% |
Equity Income (R$ Million) | ||||||||
FOZ DO CHAPECO | 3Q17 | 3Q16 | Var. R$ | Var. % | 9M17 | 9M16 | Var. R$ | Var. % |
Net Revenue | 106 | 104 | 2 | 2.0% | 313 | 296 | 18 | 6.0% |
Operating Costs / Expenses | (20) | (22) | 2 | -7.5% | (62) | (60) | (2) | 3.1% |
Deprec. / Amortization | (16) | (16) | 0 | -1.0% | (49) | (49) | 0 | -0.9% |
Net Financial Result | (15) | (16) | 1 | -7.8% | (44) | (48) | 4 | -7.9% |
Income Tax | (18) | (13) | (4) | 33.1% | (51) | (33) | (18) | 56.3% |
Net Income | 34 | 27 | 7 | 27.8% | 94 | 65 | 29 | 45.1% |
Equity Income (R$ Million) | ||||||||
EPASA | 3Q17 | 3Q16 | Var. R$ | Var. % | 9M17 | 9M16 | Var. R$ | Var. % |
Net Revenue | 130 | 51 | 79 | 154.9% | 283 | 196 | 87 | 44.5% |
Operating Costs / Expenses | (97) | (30) | (67) | 224.8% | (191) | (118) | (73) | 62.3% |
Deprec. / Amortization | (4) | (4) | 0 | -0.1% | (13) | (13) | 0 | -0.5% |
Net Financial Result | (3) | (3) | 0 | -13.8% | (8) | (10) | 2 | -17.4% |
Income Tax | (5) | (3) | (3) | 93.4% | (13) | (11) | (2) | 16.8% |
Net Income | 21 | 11 | 10 | 91.2% | 58 | 44 | 14 | 31.4% |
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In 3Q17, EBITDA was of R$ 310 million, compared to R$ 280 million in 3Q16, an increase of 10.8% (R$ 30 million).
Conciliation of Net Income and EBITDA (R$ million) | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Net Income | 175 | 113 | 54.4% | 449 | 344 | 30.4% |
Depreciation and Amortization | 31 | 31 | 92 | 93 | ||
Financial Result | 64 | 113 | 266 | 284 | ||
Income Tax /Social Contribution | 41 | 22 | 97 | 74 | ||
EBITDA | 310 | 280 | 10.8% | 904 | 795 | 13.7% |
Financial Result (Adjusted - R$ Million) | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Revenues | ||||||
Income from Financial Investments | 11 | 30 | -61.8% | 67 | 62 | 7.1% |
Fiscal Credits Update | 0 | 1 | -58.8% | 0 | 3 | -82.1% |
Monetary and Foreign Exchange Updates | 12 | 2 | 716.1% | 23 | 62 | -62.2% |
PIS and COFINS - over Other Financial Revenues | (1) | (2) | -59.4% | (3) | (3) | -2.4% |
Others | 2 | 4 | -58.6% | 2 | 8 | -74.2% |
Total | 25 | 35 | -28.0% | 89 | 132 | -32.0% |
Expenses | ||||||
Debt Charges | (76) | (124) | -38.6% | (288) | (357) | -19.3% |
Monetary and Foreign Exchange Updates | (11) | (20) | -43.4% | (60) | (37) | 62.0% |
Use of Public Asset | (1) | (4) | -75.0% | (5) | (12) | -62.6% |
Others | (1) | (1) | -36.8% | (3) | (9) | -68.3% |
Total | (89) | (149) | -40.2% | (355) | (415) | -14.4% |
Financial Result | (64) | (113) | -44.0% | (266) | (284) | -6.3% |
In 3Q17, the financial result was a net expense of R$ 64 million, representing a decrease of 44.0% (R$ 50 million), compared to net financial expenses of R$ 113 million registered in 3Q16.
· Financial Revenues moved from R$ 35 million in 3Q16 to R$ 25 million in 3Q17, a decrease of 28.0% (R$ 10 million), due to:
ü Decrease of 61.8% (R$ 19 million) in income from financial investments;
ü Reduction of 58.6% (R$ 3 million) in other effects (R$ 3 million);
ü Increase of R$ 11 million in monetary and foreign exchange updates, from a revenue of R$ 2 million in 3Q16 to a revenue of R$ 12 million in 3Q17, due to the gain with the zero-cost collar derivative3;
3 In 2015, subsidiary CPFL Geração contracted US$ denominated put and call options, involving the same financial institution as counterpart, and which on a combined basis are characterized as an operation usually known as zero-cost collar. The contracting of this operation does not involve any kind of speculation, inasmuch as it is aimed at minimizing any negative impacts on future revenues of the joint venture ENERCAN, which has electric energy sale agreements with annual restatement of part of the tariff based on the variation in the US$. In addition, according to Management’s view, the scenario was favorable for contracting this type of financial instrument, considering the high volatility implicit in dollar options and the fact that there was no initial cost for same.
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· Financial Expenses moved from R$ 149 million in 3Q16 to R$ 89 million in 3Q17, a decrease of 40.2% (R$ 60 million), due to:
ü Reduction of 38.6% (R$ 48 million) in debt charges, mainly due to the reduction in the CDI interbank rate;
ü Reduction of 43.4% (R$ 9 million) in monetary and foreign exchange updates;
ü Reduction of 75.0% (R$ 3 million) in expenses of the Use of Public Asset (UBP).
In 3Q17, net income was of R$ 175 million, compared to a net income of R$ 113 million in 3Q16, an increase of 54.4%.
Consolidated Income Statement - CPFL Renováveis (100% Participation - R$ Million) | ||||||
3Q17 | 3Q16 | Var. % | 9M17 | 9M16 | Var. % | |
Gross Operating Revenue | 631 | 539 | 17.1% | 1,504 | 1,233 | 22.0% |
Net Operating Revenue | 597 | 508 | 17.6% | 1,416 | 1,169 | 21.1% |
Cost of Electric Pow er | (82) | (59) | 38.4% | (219) | (143) | 53.3% |
Operating Costs & Expenses | (265) | (242) | 9.6% | (791) | (704) | 12.3% |
EBIT | 250 | 206 | 21.1% | 406 | 322 | 26.0% |
EBITDA (1) | 408 | 345 | 18.2% | 867 | 729 | 19.0% |
Financial Income (Expense) | (120) | (132) | -8.7% | (376) | (394) | -4.4% |
Income Before Taxes | 130 | 75 | 73.6% | 29 | (72) | 0.0% |
Net Income | 106 | 52 | 104.2% | (21) | (112) | -81.5% |
Note: | ||||||
(1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization. |
In 3Q17, CPFL registered an EBITDA 18.2% higher compared to 3Q16. The variations in the Income Statement are mainly due to the factors below:
· Commercial start-up of Pedra Cheirosa Complex wind farms in June 2017 (48.3 MW);
· Commercial start-up of Campo dos Ventos and São Benedito Complexes wind farms, gradually, over 2016 (231.0 MW);
· Seasonalization of the energy sales contracts and the energy sales strategy in the Compensation Mechanism of Surpluses and Deficits (MCSD).
Gross Operating Revenue reached R$ 631 million in 3Q17, representing an increase of 17.1% (R$ 92 million).
Net Operating Revenue reached R$ 597 million in 3Q17, representing an increase of 17.6% (R$ 89 million). This increase is mainly due to the following factors:
Página 48 de 65
Wind Source (R$ 74 million):
(i) Commercial start-up of the Campo dos Ventos, São Benedito and Pedra Cheirosa wind complexes, partially offset by the lower volume of energy generated mainly in the farms of Ceará;
(ii) Positive effect in 3Q17 of the new energy decontracting auction through MCSD, since the free market contract price was higher than the contract price in the regulated market for the eight wind farms that participated in this auction. In addition, the energy surplus of some of these farms in 3Q17 was settled to PLD.
Biomass Source (R$ 9 million):
(iii) As from 1Q17, biomass revenue (excluding plants with an energy sale agreement in the regulated market – Bio Pedra, Bio Ester and Bio Formosa) started being recognized based on the seasonal adjustment of the physical guarantee of agreements, while a portion of biomass generation in 2016 was recognized based on generation.
In 3Q17, Cost of Electric Power was of R$ 82 million, representing an increase of 38.4% (R$ 23 million). This increase is due to the following factors:
· Increase of 61.3% in the cost with Electric Energy Purchased for Resale, mainly due to the purchase of energy to meet the exposure in the spot market and hedge;
· Acknowledgment of contractual indemnity and one-year and four-year verifications of energy sales contracts that occurred in 2016 but didn’t occurred in 2017.
In 3Q17, Operating Costs and Expenses reached R$ 265 million, representing an increase of 9.6% (R$ 23 million). The main factors were:
· PMSO item, which reached R$ 107 million, an increase of 3.7% (R$ 4 million).
The table below shows a summary of the main variations in PMSO:
PMSO (R$ million) | ||||||||
3Q17 | 3Q16 | Variation | 9M17 | 9M16 | Variation | |||
R$ MM | % | R$ MM | % | |||||
Reported PMSO | ||||||||
Personnel | (26) | (23) | (3) | 14.7% | (72) | (64) | (8) | 12.6% |
Material | (9) | (2) | (7) | 306.8% | (17) | (7) | (10) | 140.6% |
Outsourced Services | (46) | (47) | 1 | -2.6% | (147) | (133) | (14) | 10.6% |
Other Operating Costs/Expenses | (26) | (31) | 5 | (0.2) | (94) | (94) | (0) | 0.2% |
GSF Risk Premium | (1) | (1) | 1 | - | (1) | (1) | - | - |
Others | (25) | (30) | 5 | -15.5% | (93) | (93) | (0) | 0.2% |
Total PMSO | (107) | (104) | (4) | 3.7% | (329.7) | (297.6) | (32) | 10.8% |
This variation is explained mainly by the following factors:
(i) Personnel: Increase of 14.7% (R$ 3 million), as a result of the higher number of employees. In 3Q17, 45 ex-employees from Suzlon were hired to continue O&M operations of wind turbines of Ceará’s wind farms.
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In 3Q17, EBITDA was of R$ 408 million, compared to R$ 345 million in 3Q16, an increase of 18.2% (R$ 63 million). These results are basically due to the higher net revenue resulting mainly from the start-up of new assets and the seasonalization of energy sales contracts, the strategy to sell energy in the MCSD and the maintenance of generation costs. This result was partially offset by the write-off of accounts receivable from Suzlon and the write-off of assets from biomass totaling R$ 8 million in 3Q17.
Conciliation of Net Income and EBITDA (R$ million) | |||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | ||
Net income | 106 | 52 | 104.2% | (21) | (112) | -81.5% | |
Amortization | 158 | 138 | 462 | 407 | |||
Financial Results | 120 | 132 | 376 | 394 | |||
Income Tax /Social Contribution | 24 | 23 | 50 | 40 | |||
EBITDA | 408 | 345 | 18.2% | 867 | 729 | 19.0% |
Financial Result (Adjusted - R$ Million) | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Revenues | ||||||
Income from Financial Investments | 33 | 26 | 23.2% | 100 | 82 | 22.1% |
Late payment interest and fines | 0 | 1 | -89.8% | 1 | 3 | -67.4% |
Judicial Deposits Update | 0 | 0 | 8.1% | 0 | 1 | -41.8% |
Monetary and Foreign Exchange Updates | 0 | 1 | -87.7% | 0 | 2 | -77.3% |
PIS and COFINS - over Other Financial Revenues | (1) | (1) | -15.4% | (4) | (4) | -6.2% |
Others | 3 | 6 | -44.1% | 10 | 15 | -36.0% |
Total | 35 | 33 | 5.2% | 107 | 98 | 9.4% |
Expenses | ||||||
Debt Charges | -7.8% | -0.7% | ||||
(139) | (151) | (432) | (436) | |||
Monetary and Foreign Exchange Updates | (17) | (22) | -24.9% | (53) | (63) | -15.7% |
(-) Capitalized Interest | 28 | 44 | -36.3% | 28 | 44 | -36.3% |
Others | (2) | (7) | -65.7% | (26) | (37) | -29.7% |
Total | (130) | (137) | -4.5% | (483) | (491) | -1.6% |
Financial Result | (95) | (103) | -7.7% | (376) | (394) | -4.4% |
In 3Q17, net Financial Result was an expense of R$ 95 million, representing a decrease of 7.7% (R$ 8 million) compared to 3Q16.
The main factor that affected the financial revenue (increase of R$ 3 million) was:
(i) Higher average cash balance in the period (R$ 1,562 million in 3Q17 vs. R$ 953 million in 3Q16), partially offset by the lower interest rate (CDI Interbank Rate).
The main factor that affected the financial expense (decrease of R$ 7 million) was:
(ii) The accelerated growth in the Company's assets portfolio is naturally associated with long-term debt, which, as new capacity comes into operation or the acquisitions are consolidated in CPFL Renováveis, increase its financial expenses, affecting its net results. On the other hand, the growth of the portfolio also provides an increase in the generation of operational cash and value for the Companies.
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In 3Q17, Net Income was of R$ 106 million, compared to a Net Income of R$ 52 million in 3Q16, an increase of 104.2% (R$ 54 million), due to the higher net revenue in the period, partially offset by the higher energy generation cost due basically to the higher operating portfolio and the write-offs in the period as already mentioned.
On the date of this report, the portfolio of projects of CPFL Renováveis (100% participation) totaled 2,103 MW of operating installed capacity and 30 MW of capacity under construction. The operational power plants comprises 39 Small Hydroelectric Power Plants – SHPPs (423 MW), 45 wind farms (1,309 MW), 8 biomass thermoelectric power plants (370 MW) and 1 solar power plant (1 MW). Still under construction there is 1 SHPP (30 MW).
Additionally, CPFL Renováveis owns wind, solar and SHPP projects under development totaling 2,224 MW, representing a total portfolio of 2,564 MW.
The table below illustrates the overall portfolio of assets (100% participation) in operation, construction and development, and its installed capacity on this date:
CPFL Renováveis - Portfolio (100% participation) | |||||
In MW | SHPP | Biomass | Wind | Solar | Total |
Operating | 423 | 370 | 1,309 | 1 | 2,103 |
Under construction | 30 | - | - | - | 30 |
Under development | 242 | - | 1,982 | 340 | 2,564 |
Total | 695 | 370 | 3,291 | 341 | 4,697 |
Boa Vista II SHPP
The Boa Vista II SHPP, project located in the State of Minas Gerais, is scheduled to start operating in 1Q20. The installed capacity is of 29.9 MW and the physical guarantee is of 14.8 average-MW. Energy was sold through a long-term contract in the 2015 A-5 new energy auction (price: R$ 233.59/MWh – September 2017).
Página 51 de 65
(R$ thousands)
Consolidated | |||
ASSETS | 09/30/2017 | 12/31/2016 | 09/30/2016 |
CURRENT | |||
Cash and Cash Equivalents | 3,832,155 | 6,164,997 | 5,344,665 |
Consumers, Concessionaries and Licensees | 4,644,672 | 3,765,893 | 3,540,804 |
Dividend and Interest on Equity | 106,237 | 73,328 | 13,424 |
Recoverable Taxes | 372,859 | 403,848 | 376,849 |
Derivatives | 389,732 | 163,241 | 111,761 |
Sectoral Financial Assets | 5,449 | - | 239,341 |
Concession Financial Assets | 11,437 | 10,700 | 10,563 |
Other Credits | 935,255 | 797,181 | 727,358 |
TOTAL CURRENT | 10,297,796 | 11,379,187 | 10,364,766 |
NON-CURRENT | |||
Consumers, Concessionaries and Licensees | 242,650 | 203,185 | 141,040 |
Affiliates, Subsidiaries and Parent Company | 9,157 | 47,631 | 46,292 |
Judicial Deposits | 837,526 | 550,072 | 499,126 |
Recoverable Taxes | 232,379 | 198,286 | 166,102 |
Sectoral Financial Assets | 348,157 | - | - |
Derivatives | 261,942 | 641,357 | 664,538 |
Deferred Taxes | 979,110 | 922,858 | 578,360 |
Concession Financial Assets | 6,287,650 | 5,363,144 | 4,222,894 |
Investments at Cost | 116,654 | 116,654 | 116,654 |
Other Credits | 809,785 | 766,253 | 686,187 |
Investments | 1,042,445 | 1,493,753 | 1,440,262 |
Property, Plant and Equipment | 9,841,148 | 9,712,998 | 9,663,465 |
Intangible | 10,487,077 | 10,775,613 | 8,963,014 |
TOTAL NON-CURRENT | 31,495,681 | 30,791,805 | 27,187,935 |
TOTAL ASSETS | 41,793,477 | 42,170,992 | 37,552,701 |
Página 52 de 65
(R$ thousands)
Consolidated | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | 09/30/2017 | 12/31/2016 | 09/30/2016 |
CURRENT | |||
Suppliers | 4,148,059 | 2,728,130 | 1,943,658 |
Loans and Financing | 3,767,294 | 1,875,648 | 1,531,693 |
Debentures | 1,610,575 | 1,547,275 | 1,506,497 |
Employee Pension Plans | 80,091 | 33,209 | 8,946 |
Regulatory Charges | 452,279 | 366,078 | 284,841 |
Taxes, Fees and Contributions | 698,712 | 681,544 | 671,486 |
Dividend and Interest on Equity | 5,418 | 232,851 | 8,211 |
Accrued Liabilities | 171,492 | 131,707 | 133,527 |
Derivatives | 4,464 | 6,055 | 4,548 |
Sectoral Financial Liabilities | 384,115 | 597,515 | 317,091 |
Public Utilities | 11,936 | 10,857 | 9,941 |
Other Accounts Payable | 973,025 | 807,623 | 737,258 |
TOTAL CURRENT | 12,307,461 | 9,018,492 | 7,157,697 |
NON-CURRENT | |||
Suppliers | 126,394 | 129,781 | 633 |
Loans and Financing | 8,006,258 | 11,168,394 | 11,238,437 |
Debentures | 6,436,820 | 7,452,672 | 5,132,289 |
Employee Pension Plans | 1,014,736 | 1,019,233 | 857,031 |
Taxes, Fees and Contributions | 21,107 | 26,814 | - |
Deferred Taxes | 1,267,570 | 1,324,134 | 1,345,092 |
Reserve for Tax, Civil and Labor Risks | 948,448 | 833,276 | 613,267 |
Derivatives | 117,130 | 112,207 | 129,299 |
Sectoral Financial Liabilities | 76,902 | 317,406 | 357,164 |
Public Utilities | 82,153 | 86,624 | 87,666 |
Other Accounts Payable | 293,538 | 309,292 | 180,457 |
TOTAL NON-CURRENT | 18,391,056 | 22,779,832 | 19,941,335 |
SHAREHOLDERS' EQUITY | |||
Capital | 5,741,284 | 5,741,284 | 5,741,284 |
Capital Reserve | 468,014 | 468,014 | 468,302 |
Legal Reserve | 739,102 | 739,102 | 694,058 |
Statutory Reserve - Concession Financial Assets | 760,976 | 702,928 | 724,308 |
Statutory Reserve - Strengthening of Working Capital | 545,505 | 545,505 | - |
Dividend | - | 7,820 | - |
Other Comprehensive Income | (253,927) | (234,633) | (238,407) |
Retained Earnings | 684,579 | - | 644,988 |
8,685,534 | 7,970,021 | 8,034,534 | |
Non-Controlling Shareholders' Interest | 2,409,425 | 2,402,648 | 2,419,136 |
TOTAL SHAREHOLDERS' EQUITY | 11,094,960 | 10,372,668 | 10,453,670 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 41,793,477 | 42,170,992 | 37,552,701 |
Página 53 de 65
(R$ thousands)
Consolidated | ||||||
3Q17 | 3Q16 | Variation | 9M17 | 9M16 | Variation | |
OPERATING REVENUES | ||||||
Electricity Sales to Final Customers | 6,110,261 | 5,474,412 | 11.6% | 18,807,612 | 17,782,476 | 5.8% |
Electricity Sales to Distributors | 2,117,043 | 1,012,962 | 109.0% | 4,521,967 | 2,401,179 | 88.3% |
Revenue from building the infrastructure | 602,337 | 325,100 | 85.3% | 1,480,699 | 816,950 | 81.2% |
Update of concession's financial asset | 10,399 | 45,439 | -77.1% | 91,713 | 197,461 | -53.6% |
Sectorial financial assets and liabilities | 1,244,970 | (558,007) | - | 1,049,284 | (1,752,239) | - |
Other Operating Revenues | 988,179 | 1,077,085 | -8.3% | 3,008,810 | 2,743,209 | 9.7% |
11,073,189 | 7,376,991 | 50.1% | 28,960,086 | 22,189,035 | 30.5% | |
DEDUCTIONS FROM OPERATING REVENUES | (3,289,243) | (2,594,177) | 26.8% | (9,674,812) | (8,588,728) | 12.6% |
NET OPERATING REVENUES | 7,783,946 | 4,782,814 | 62.7% | 19,285,274 | 13,600,307 | 41.8% |
COST OF ELECTRIC ENERGY SERVICES | ||||||
Electricity Purchased for Resale | (4,772,758) | (2,465,707) | 93.6% | (11,311,684) | (6,945,260) | 62.9% |
Electricity Network Usage Charges | (473,326) | (304,806) | 55.3% | (893,571) | (1,017,820) | -12.2% |
(5,246,084) | (2,770,513) | 89.4% | (12,205,255) | (7,963,080) | 53.3% | |
OPERATING COSTS AND EXPENSES | ||||||
Personnel | (329,180) | (261,189) | 26.0% | (998,342) | (773,357) | 29.1% |
Material | (69,451) | (64,765) | 7.2% | (182,008) | (143,821) | 26.6% |
Outsourced Services | (173,821) | (156,531) | 11.0% | (548,210) | (463,318) | 18.3% |
Other Operating Costs/Expenses | (153,834) | (130,619) | 17.8% | (542,572) | (469,521) | 15.6% |
Allowance for Doubtful Accounts | (32,818) | (34,161) | -3.9% | (118,885) | (130,026) | -8.6% |
Legal and judicial expenses | (14,077) | (29,258) | -51.9% | (127,700) | (138,227) | -7.6% |
Others | (106,940) | (67,201) | 59.1% | (295,987) | (201,268) | 47.1% |
Cost of building the infrastructure | (598,698) | (324,154) | 84.7% | (1,478,990) | (815,681) | 81.3% |
Employee Pension Plans | (28,483) | (23,658) | 20.4% | (85,426) | (51,483) | 65.9% |
Depreciation and Amortization | (313,328) | (254,202) | 23.3% | (926,776) | (750,297) | 23.5% |
Amortization of Concession's Intangible | (71,293) | (62,365) | 14.3% | (215,526) | (186,272) | 15.7% |
(1,738,088) | (1,277,483) | 36.1% | (4,977,850) | (3,653,749) | 36.2% | |
EBITDA1 | 1,274,571 | 1,120,356 | 13.8% | 3,497,613 | 3,121,425 | 12.1% |
INCOME FROM ELECTRIC ENERGY SERVICE | 799,774 | 734,818 | 8.8% | 2,102,168 | 1,983,477 | 6.0% |
FINANCIAL REVENUES (EXPENSES) | ||||||
Financial Revenues | 205,553 | 286,311 | -28.2% | 708,896 | 932,155 | -24.0% |
Financial Expenses | (548,953) | (703,203) | -21.9% | (1,906,602) | (1,932,031) | -1.3% |
(343,400) | (416,892) | -17.6% | (1,197,706) | (999,876) | 19.8% | |
EQUITY ACCOUNTING | ||||||
Equity Accounting | 90,176 | 68,971 | 30.7% | 253,143 | 201,379 | 25.7% |
Assets Surplus Value Amortization | (145) | (145) | 0.0% | (435) | (435) | 0.0% |
90,031 | 68,826 | 30.8% | 252,709 | 200,944 | 25.8% | |
INCOME BEFORE TAXES ON INCOME | 546,404 | 386,752 | 41.3% | 1,157,171 | 1,184,545 | -2.3% |
Social Contribution | (44,521) | (35,448) | 25.6% | (113,385) | (125,116) | -9.4% |
Income Tax | (111,686) | (82,031) | 36.1% | (298,296) | (317,575) | -6.1% |
NET INCOME | 390,198 | 269,272 | 44.9% | 745,490 | 741,854 | 0.5% |
Controlling Shareholders' Interest | 331,813 | 231,566 | 43.3% | 721,173 | 762,725 | -5.4% |
Non-Controlling Shareholders' Interest | 58,385 | 37,707 | 54.8% | 24,318 | (20,871) | - |
Note: (1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization, according to CVM Instruction no. 527/12. |
Página 54 de 65
(R$ thousands)
Consolidated | |||
3Q17 | Last 12M | ||
Beginning Balance | 4,316,090 | 5,344,665 | |
Net Income Before Taxes | 546,404 | 1,353,173 | |
Depreciation and Amortization | 384,075 | 1,496,898 | |
Interest on Debts and Monetary and Foreign Exchange Restatements | 538,437 | 2,253,232 | |
Consumers, Concessionaries and Licensees | (756,662) | (734,282) | |
Sectoral Financial Assets | (235,259) | 59,032 | |
Accounts Receivable - Resources Provided by the CDE/CCEE | 4,651 | 67,527 | |
Suppliers | 1,357,951 | 1,854,725 | |
Sectoral Financial Liabilities | (942,645) | (587,222) | |
Accounts Payable - CDE | 6,591 | (27,551) | |
Interest on Debts and Debentures Paid | (426,555) | (1,702,513) | |
Income Tax and Social Contribution Paid | (108,116) | (555,333) | |
Others | 451,358 | 499,883 | |
273,826 | 2,624,396 | ||
Total Operating Activities | 820,230 | 3,977,569 | |
Investment Activities | |||
Value Paid in Business Combination, Net of the Acquired Cash | - | (1,496,675) | |
Acquisition of Property, Plant and Equipment, and Intangibles | (537,306) | (2,555,134) | |
Others | 101,538 | 47,892 | |
Total Investment Activities | (435,768) | (4,003,917) | |
Financing Activities | |||
Loans and Debentures | 558,579 | 3,029,485 | |
Principal Amortization of Loans and Debentures, Net of Derivatives | (1,419,112) | (4,257,484) | |
Dividend and Interest on Equity Paid | (7,877) | (253,407) | |
Others | 13 | (4,756) | |
Total Financing Activities | (868,397) | (1,486,162) | |
Cash Flow Generation | (483,935) | (1,512,510) | |
Ending Balance - 09/30/2017 | 3,832,155 | 3,832,155 |
Página 55 de 65
Conventional Generation | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
OPERATING REVENUE | ||||||
Eletricity Sales to Distributors | 295,019 | 278,203 | 6.0% | 870,522 | 807,409 | 7.8% |
Other Operating Revenues | 27,166 | 4,737 | 473.5% | 41,341 | 8,239 | 401.8% |
322,185 | 282,940 | 13.9% | 911,862 | 815,648 | 11.8% | |
DEDUCTIONS FROM OPERATING REVENUE | (29,116) | (26,270) | 10.8% | (81,639) | (75,262) | 8.5% |
NET OPERATING REVENUE | 293,069 | 256,669 | 14.2% | 830,223 | 740,387 | 12.1% |
COST OF ELETRIC ENERGY SERVICES | ||||||
Eletricity Purchased for Resale | (41,873) | (16,540) | 153.2% | (78,761) | (51,788) | 52.1% |
Eletricity Network Usage Charges | (6,748) | (6,283) | 7.4% | (19,912) | (17,962) | 10.9% |
(48,621) | (22,823) | 113.0% | (98,674) | (69,751) | 41.5% | |
OPERATING COSTS AND EXPENSES | ||||||
Personnel | (8,686) | (8,038) | 8.1% | (28,578) | (27,239) | 4.9% |
Material | (2,480) | (666) | 272.3% | (3,742) | (2,119) | 76.6% |
Outsourced Services | (4,694) | (4,676) | 0.4% | (19,550) | (14,871) | 31.5% |
Other Operating Costs/Expenses | (8,278) | (9,059) | -8.6% | (26,924) | (31,181) | -13.7% |
Employee Pension Plans | (517) | (517) | 0.0% | (1,550) | (1,160) | 33.6% |
Depreciation and Amortization | (28,378) | (28,400) | -0.1% | (84,869) | (85,516) | -0.8% |
Amortization of Concession's Intangible | (2,492) | (2,492) | 0.0% | (7,475) | (7,475) | 0.0% |
(55,524) | (53,847) | 3.1% | (172,688) | (169,561) | 1.8% | |
EBITDA | 309,969 | 279,861 | 10.8% | 904,348 | 795,445 | 13.7% |
EBIT | 188,925 | 179,999 | 5.0% | 558,861 | 501,075 | 11.5% |
FINANCIAL INCOME (EXPENSE) | ||||||
Financial Income | 25,259 | 35,093 | -28.0% | 89,450 | 131,604 | -32.0% |
Financial Expenses | (88,780) | (148,514) | -40.2% | (355,279) | (415,278) | -14.4% |
(63,521) | (113,421) | -44.0% | (265,829) | (283,674) | -6.3% | |
EQUITY ACCOUNTING | ||||||
Equity Accounting | 90,175 | 68,971 | 30.7% | 253,143 | 201,379 | 25.7% |
Assets Surplus Value Amortization | (145) | (145) | 0.0% | (435) | (435) | 0.0% |
90,031 | 68,826 | 30.8% | 252,709 | 200,944 | 25.8% | |
INCOME BEFORE TAXES ON INCOME | 215,434 | 135,404 | 59.1% | 545,741 | 418,345 | 30.5% |
Social Contribution | (10,892) | (5,871) | 85.5% | (25,744) | (19,702) | 30.7% |
Income Tax | (29,773) | (16,333) | 82.3% | (71,178) | (54,487) | 30.6% |
NET INCOME (LOSS) | 174,768 | 113,200 | 54.4% | 448,818 | 344,156 | 30.4% |
Página 56 de 65
Consolidated (100% Participation) | ||||||||
3Q17 | 3Q16 | Var. | Var. % | 9M17 | 9M16 | Var. | Var. % | |
OPERATING REVENUES | ||||||||
Eletricity Sales to Final Consumers | 5,534 | 22,934 | (17,400) | -75.9% | 35,358 | 68,410 | (33,052) | -48.3% |
Eletricity Sales to Distributors | 624,623 | 513,531 | 111,092 | 21.6% | 1,464,220 | 1,153,072 | 311,148 | 27.0% |
Other Operating Revenues | 956 | 2,700 | (1,744) | -64.6% | 4,392 | 11,445 | (7,053) | -61.6% |
631,113 | 539,165 | 91,948 | 17.1% | 1,503,969 | 1,232,927 | 271,043 | 22.0% | |
DEDUCTIONS FROM OPERATING REVENUES | (34,055) | (31,560) | (2,496) | 7.9% | (88,182) | (63,967) | (24,215) | 37.9% |
NET OPERATING REVENUES | 597,057 | 507,605 | 89,452 | 17.6% | 1,415,787 | 1,168,959 | 246,827 | 21.1% |
COST OF ELETRIC ENERGY SERVICES | ||||||||
Eletricity Purchased for Resale | (58,512) | (36,276) | (22,235) | 61.3% | (148,164) | (81,784) | (66,380) | 81.2% |
Eletricity Netw ork Usage Charges | (23,296) | (22,834) | (461) | 2.0% | (70,700) | (60,988) | (9,712) | 15.9% |
(81,808) | (59,111) | (22,697) | 38.4% | (218,864) | (142,772) | (76,092) | 53.3% | |
OPERATING COSTS AND EXPENSES | ||||||||
Personnel | (25,925) | (22,600) | (3,324) | 14.7% | (71,863) | (63,811) | (8,052) | 12.6% |
Material | (2,524) | (1,148) | (1,376) | 119.9% | (16,715) | (6,948) | (9,768) | 140.6% |
Outsourced Services | (54,582) | (43,428) | (11,153) | 25.7% | (147,087) | (132,996) | (14,091) | 10.6% |
Other Operating Costs/Expenses | (42,270) | (36,726) | (5,545) | 15.1% | (93,999) | (93,849) | (150) | 0.2% |
Depreciation and Amortization | (114,236) | (97,029) | (17,207) | 17.7% | (345,223) | (292,670) | (52,553) | 18.0% |
Amortization of Concession's Intangible | (38,625) | (37,932) | (692) | 1.8% | (116,307) | (114,010) | (2,297) | 2.0% |
(275,265) | (237,139) | (38,126) | 16.1% | (791,194) | (704,283) | (86,911) | 12.3% | |
EBITDA (1) | 407,791 | 344,895 | 62,896 | 18.2% | 867,259 | 728,584 | 138,675 | 19.0% |
EBIT | 249,955 | 206,474 | 43,481 | 21.1% | 405,729 | 321,905 | 83,825 | 26.0% |
FINANCIAL INCOME (EXPENSE) | ||||||||
Financial Income | 35,217 | 33,487 | 1,730 | 5.2% | 106,957 | 97,742 | 9,215 | 9.4% |
Financial Expenses | (155,432) | (165,223) | 9,791 | -5.9% | (483,358) | (491,636) | 8,278 | -1.7% |
(120,215) | (131,736) | 11,521 | -8.7% | (376,401) | (393,895) | 17,494 | -4.4% | |
INCOME BEFORE TAXES ON INCOME | 129,740 | 74,738 | 55,002 | 73.6% | 29,328 | (71,990) | 101,318 | -140.7% |
Social Contribution | (9,240) | (10,347) | 1,107 | -10.7% | (18,390) | (17,345) | (1,045) | 6.0% |
Income Tax | (14,771) | (12,620) | (2,151) | 17.0% | (31,654) | (22,493) | (9,162) | 40.7% |
NET INCOME | 105,729 | 51,772 | 53,957 | 104.2% | (20,716) | (111,827) | 91,112 | -81.5% |
Página 57 de 65
Consolidated | ||||||
3Q17 | 3Q16 | Variation | 9M17 | 9M16 | Variation | |
OPERATING REVENUE | ||||||
Electricity Sales to Final Customers | 5,607,720 | 5,056,216 | 10.9% | 17,374,687 | 16,664,433 | 4.3% |
Electricity Sales to Distributors | 856,716 | 217,629 | 293.7% | 1,743,980 | 458,873 | 280.1% |
Revenue from building the infrastructure | 596,755 | 299,165 | 99.5% | 1,433,943 | 782,162 | 83.3% |
Adjustments to the concession´s financial asset | 10,399 | 45,439 | -77.1% | 91,713 | 197,461 | -53.6% |
Sectoral financial assets and liabilities | 1,244,970 | (558,007) | - | 1,049,284 | (1,752,239) | - |
Other Operating Revenues | 939,068 | 1,026,504 | -8.5% | 2,895,483 | 2,634,439 | 9.9% |
9,255,628 | 6,086,946 | 52.1% | 24,589,090 | 18,985,129 | 29.5% | |
DEDUCTIONS FROM OPERATING REVENUE | (3,115,715) | (2,474,009) | 25.9% | (9,245,722) | (8,277,624) | 11.7% |
NET OPERATING REVENUE | 6,139,913 | 3,612,937 | 69.9% | 15,343,368 | 10,707,505 | 43.3% |
COST OF ELECTRIC ENERGY SERVICES | ||||||
Electricity Purchased for Resale | (3,971,264) | (2,108,341) | 88.4% | (9,567,184) | (5,985,341) | 59.8% |
Electricity Network Usage Charges | (455,297) | (281,266) | 61.9% | (827,600) | (955,223) | -13.4% |
(4,426,561) | (2,389,607) | 85.2% | (10,394,784) | (6,940,564) | 49.8% | |
OPERATING COSTS AND EXPENSES | ||||||
Personnel | (215,344) | (167,303) | 28.7% | (668,968) | (508,292) | 31.6% |
Material | (43,344) | (32,585) | 33.0% | (123,980) | (90,090) | 37.6% |
Outsourced Services | (211,655) | (163,632) | 29.3% | (618,187) | (467,273) | 32.3% |
Other Operating Costs/Expenses | (130,064) | (106,427) | 22.2% | (453,144) | (395,992) | 14.4% |
Allowance for Doubtful Accounts | (33,301) | (32,534) | 2.4% | (119,392) | (126,696) | -5.8% |
Legal and Judicial Expenses | (19,478) | (28,698) | -32.1% | (120,396) | (126,276) | -4.7% |
Others | (77,285) | (45,196) | 71.0% | (213,356) | (143,020) | 49.2% |
Cost of building the infrastructure | (596,755) | (299,165) | 99.5% | (1,433,943) | (782,162) | 83.3% |
Employee Pension Plans | (27,966) | (23,141) | 20.8% | (83,876) | (50,323) | 66.7% |
Depreciation and Amortization | (163,336) | (120,964) | 35.0% | (468,780) | (358,680) | 30.7% |
Amortization of Concession's Intangible | (14,067) | (5,918) | 137.7% | (44,710) | (17,753) | 151.8% |
Amortization of goodwill derived from acquisition | (12,254) | (15,035) | -18.5% | (55,837) | (45,104) | 23.8% |
(1,414,784) | (934,170) | 51.4% | (3,951,424) | (2,715,668) | 45.5% | |
EBITDA (IFRS)(1) | 488,225 | 431,076 | 13.3% | 1,566,486 | 1,472,809 | 6.4% |
EBIT | 298,568 | 289,160 | 3.3% | 997,160 | 1,051,273 | -5.1% |
FINANCIAL INCOME (EXPENSE) | ||||||
Financial Income | 131,887 | 184,370 | -28.5% | 472,228 | 616,666 | -23.4% |
Financial Expenses | (262,318) | (378,026) | -30.6% | (949,827) | (966,444) | -1.7% |
Interest on Equity | ||||||
(130,431) | (193,656) | -32.6% | (477,599) | (349,777) | 36.5% | |
INCOME BEFORE TAXES ON INCOME | 168,137 | 95,504 | 76.1% | 519,560 | 701,496 | -25.9% |
Social Contribution | (20,910) | (12,318) | 69.7% | (62,718) | (74,891) | -16.3% |
Income Tax | (56,455) | (31,594) | 78.7% | (172,622) | (199,480) | -13.5% |
Net Income (IFRS) | 90,772 | 51,591 | 75.9% | 284,221 | 427,124 | -33.5% |
Note: (1) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization, as CVM Instruction no. 527/12. |
Página 58 de 65
(R$ thousands)
Consolidated (without RGE Sul) | ||||||
3Q17 | 3Q16 | Variation | 9M17 | 9M16 | Variation | |
OPERATING REVENUE | ||||||
Electricity Sales to Final Customers | 4,743,469 | 5,056,216 | -6.2% | 14,483,259 | 16,664,433 | -13.1% |
Electricity Sales to Distributors | 706,051 | 217,629 | 224.4% | 1,460,119 | 458,873 | 218.2% |
Revenue from building the infrastructure | 485,090 | 299,165 | 62.1% | 1,133,596 | 782,162 | 44.9% |
Adjustments to the concession´s financial asset | 7,195 | 45,439 | -84.2% | 77,578 | 197,461 | -60.7% |
Sectoral financial assets and liabilities | 1,055,555 | (558,007) | - | 953,823 | (1,752,239) | - |
Other Operating Revenues | 812,317 | 1,026,504 | -20.9% | 2,449,404 | 2,634,439 | -7.0% |
7,809,678 | 6,086,946 | 28.3% | 20,557,779 | 18,985,129 | 8.3% | |
DEDUCTIONS FROM OPERATING REVENUE | (2,627,910) | (2,474,009) | 6.2% | (7,684,839) | (8,277,624) | -7.2% |
NET OPERATING REVENUE | 5,181,767 | 3,612,937 | 43.4% | 12,872,940 | 10,707,505 | 20.2% |
COST OF ELECTRIC ENERGY SERVICES | ||||||
Electricity Purchased for Resale | (3,363,898) | (2,108,341) | 59.6% | (8,078,953) | (5,985,341) | 35.0% |
Electricity Network Usage Charges | (368,992) | (281,266) | 31.2% | (662,470) | (955,223) | -30.6% |
(3,732,890) | (2,389,607) | 56.2% | (8,741,422) | (6,940,564) | 25.9% | |
OPERATING COSTS AND EXPENSES | ||||||
Personnel | (179,366) | (167,303) | 7.2% | (551,708) | (508,292) | 8.5% |
Material | (36,096) | (32,585) | 10.8% | (100,942) | (90,090) | 12.0% |
Outsourced Services | (180,735) | (163,632) | 10.5% | (525,033) | (467,273) | 12.4% |
Other Operating Costs/Expenses | (126,222) | (106,427) | 18.6% | (393,025) | (395,992) | -0.7% |
Allowance for Doubtful Accounts | (25,744) | (32,534) | -20.9% | (97,315) | (126,696) | -23.2% |
Legal and Judicial Expenses | (49,041) | (28,698) | 70.9% | (126,539) | (126,276) | 0.2% |
Others | (51,437) | (45,196) | 13.8% | (169,171) | (143,020) | 18.3% |
Cost of building the infrastructure | (485,090) | (299,165) | 62.1% | (1,133,596) | (782,162) | 44.9% |
Employee Pension Plans | (25,499) | (23,141) | 10.2% | (76,498) | (50,323) | 52.0% |
Depreciation and Amortization | (147,141) | (120,964) | 21.6% | (401,733) | (358,680) | 12.0% |
Amortization of Concession's Intangible | (5,918) | (5,918) | 0.0% | (17,753) | (17,753) | 0.0% |
Amortization of goodwill derived from acquisition | (1,520) | (15,035) | -89.9% | (24,421) | (45,104) | -45.9% |
(1,187,586) | (934,170) | 27.1% | (3,224,709) | (2,715,668) | 18.7% | |
EBITDA(1) | 415,871 | 431,076 | -3.5% | 1,350,716 | 1,472,809 | -8.3% |
EBIT | 261,292 | 289,160 | -9.6% | 906,808 | 1,051,273 | -13.7% |
FINANCIAL INCOME (EXPENSE) | ||||||
Financial Income | 116,055 | 184,370 | -37.1% | 409,906 | 616,666 | -33.5% |
Financial Expenses | (209,373) | (378,026) | -44.6% | (793,984) | (966,444) | -17.8% |
Interest on Equity | ||||||
(93,318) | (193,656) | -51.8% | (384,078) | (349,777) | 9.8% | |
INCOME BEFORE TAXES ON INCOME | 167,975 | 95,504 | 75.9% | 522,730 | 701,496 | -25.5% |
Social Contribution | (17,691) | (12,318) | 43.6% | (58,047) | (74,891) | -22.5% |
Income Tax | (47,486) | (31,594) | 50.3% | (159,591) | (199,480) | -20.0% |
Net Income | 102,797 | 51,591 | 99.3% | 305,092 | 427,124 | -28.6% |
Note: (1) EBITDA is calculated from the sum of net income, taxes, financial result and depreciation/amortization, as CVM Instruction no. 527/12. |
Página 59 de 65
(R$ thousands)
Summary of Income Statement by Distribution Company (R$ Thousands) | ||||||
CPFL PAULISTA | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Gross Operating Revenue | 4,136,870 | 3,135,238 | 31.9% | 10,766,617 | 9,812,205 | 9.7% |
Net Operating Revenue | 2,772,410 | 1,859,113 | 49.1% | 6,745,874 | 5,556,540 | 21.4% |
Cost of Electric Power | (2,034,871) | (1,255,263) | 62.1% | (4,702,400) | (3,679,409) | 27.8% |
Operating Costs & Expenses | (619,707) | (460,609) | 34.5% | (1,652,704) | (1,341,159) | 23.2% |
EBIT | 117,832 | 143,242 | -17.7% | 390,769 | 535,972 | -27.1% |
EBITDA(1) | 178,287 | 197,205 | -9.6% | 564,955 | 695,544 | -18.8% |
Financial Income (Expense) | (45,808) | (110,611) | -58.6% | (184,717) | (161,016) | 14.7% |
Income Before Taxes | 72,025 | 32,631 | 120.7% | 206,052 | 374,957 | -45.0% |
Net Income | 42,664 | 17,278 | 146.9% | 118,256 | 235,118 | -49.7% |
CPFL PIRATININGA | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Gross Operating Revenue | 1,756,570 | 1,389,336 | 26.4% | 4,637,887 | 4,382,355 | 5.8% |
Net Operating Revenue | 1,162,416 | 797,071 | 45.8% | 2,899,796 | 2,364,473 | 22.6% |
Cost of Electric Power | (894,263) | (553,388) | 61.6% | (2,086,446) | (1,612,643) | 29.4% |
Operating Costs & Expenses | (202,389) | (179,594) | 12.7% | (581,694) | (506,317) | 14.9% |
EBIT | 65,764 | 64,089 | 2.6% | 231,655 | 245,513 | -5.6% |
EBITDA(1) | 89,825 | 87,260 | 2.9% | 303,678 | 314,617 | -3.5% |
Financial Income (Expense) | (24,247) | (38,380) | -36.8% | (89,976) | (63,504) | 41.7% |
Income Before Taxes | 41,518 | 25,709 | 61.5% | 141,680 | 182,009 | -22.2% |
Net Income | 26,053 | 15,178 | 71.7% | 87,908 | 112,604 | -21.9% |
RGE | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Gross Operating Revenue | 1,487,270 | 1,217,718 | 22.1% | 4,005,395 | 3,739,686 | 7.1% |
Net Operating Revenue | 953,510 | 738,902 | 29.0% | 2,475,450 | 2,151,237 | 15.1% |
Cost of Electric Power | (621,658) | (453,206) | 37.2% | (1,522,039) | (1,288,232) | 18.1% |
Operating Costs & Expenses | (267,597) | (212,754) | 25.8% | (717,678) | (632,125) | 13.5% |
EBIT | 64,256 | 72,942 | -11.9% | 235,733 | 230,879 | 2.1% |
EBITDA(1) | 103,947 | 111,420 | -6.7% | 355,166 | 345,261 | 2.9% |
Financial Income (Expense) | (23,116) | (42,084) | -45.1% | (90,717) | (106,944) | -15.2% |
Income Before Taxes | 41,140 | 30,859 | 33.3% | 145,016 | 123,936 | 17.0% |
Net Income | 26,149 | 19,744 | 32.4% | 91,850 | 79,132 | 16.1% |
CPFL SANTA CRUZ | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Gross Operating Revenue | 186,488 | 150,478 | 23.9% | 504,773 | 454,599 | 11.0% |
Net Operating Revenue | 128,936 | 96,429 | 33.7% | 334,247 | 276,054 | 21.1% |
Cost of Electric Power | (84,456) | (59,034) | 43.1% | (199,410) | (159,779) | 24.8% |
Operating Costs & Expenses | (34,454) | (27,870) | 23.6% | (94,690) | (83,871) | 12.9% |
EBIT | 10,026 | 9,525 | 5.3% | 40,147 | 32,403 | 23.9% |
EBITDA(1) | 15,414 | 14,221 | 8.4% | 54,360 | 46,302 | 17.4% |
Financial Income (Expense) | (1,954) | (1,995) | -2.1% | (8,180) | (7,661) | 6.8% |
Income Before Taxes | 8,072 | 7,530 | 7.2% | 31,967 | 24,742 | 29.2% |
Net Income | 7,157 | 4,739 | 51.0% | 22,219 | 17,209 | 29.1% |
Note: (1) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization. | ||||||
Página 60 de 65
Summary of Income Statement by Distribution Company (R$ Thousands) | ||||||
CPFL LESTE PAULISTA | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Gross Operating Revenue | 60,296 | 46,211 | 30.5% | 154,980 | 133,813 | 15.8% |
Net Operating Revenue | 42,781 | 30,746 | 39.1% | 105,423 | 84,719 | 24.4% |
Cost of Electric Power | (23,870) | (15,563) | 53.4% | (53,685) | (43,233) | 24.2% |
Operating Costs & Expenses | (13,630) | (10,066) | 35.4% | (36,553) | (28,219) | 29.5% |
EBIT | 5,280 | 5,117 | 3.2% | 15,185 | 13,267 | 14.5% |
EBITDA(1) | 7,445 | 6,859 | 8.6% | 20,490 | 18,444 | 11.1% |
Financial Income (Expense) | (218) | (973) | -77.6% | (2,762) | (3,992) | -30.8% |
Income Before Taxes | 5,062 | 4,144 | 22.2% | 12,423 | 9,274 | 33.9% |
Net Income | 4,070 | 2,666 | 52.7% | 8,709 | 6,485 | 34.3% |
CPFL SUL PAULISTA | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Gross Operating Revenue | 74,342 | 58,890 | 26.2% | 197,466 | 181,497 | 8.8% |
Net Operating Revenue | 51,573 | 37,406 | 37.9% | 131,855 | 110,909 | 18.9% |
Cost of Electric Power | (28,519) | (19,355) | 47.3% | (67,740) | (58,658) | 15.5% |
Operating Costs & Expenses | (17,837) | (14,313) | 24.6% | (46,960) | (39,013) | 20.4% |
EBIT | 5,216 | 3,738 | 39.5% | 17,154 | 13,237 | 29.6% |
EBITDA(1) | 10,177 | 6,087 | 67.2% | 23,665 | 20,183 | 17.2% |
Financial Income (Expense) | 904 | (961) | -194.1% | (3,179) | (4,215) | -24.6% |
Income Before Taxes | 6,120 | 2,777 | 120.4% | 13,975 | 9,022 | 54.9% |
Net Income | 4,912 | 1,780 | 175.9% | 9,852 | 5,846 | 68.5% |
CPFL JAGUARI | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Gross Operating Revenue | 66,419 | 56,276 | 18.0% | 181,459 | 181,638 | -0.1% |
Net Operating Revenue | 42,133 | 32,183 | 30.9% | 109,333 | 101,720 | 7.5% |
Cost of Electric Power | (28,969) | (23,443) | 23.6% | (72,434) | (68,622) | 5.6% |
Operating Costs & Expenses | (8,739) | (7,038) | 24.2% | (27,454) | (19,906) | 37.9% |
EBIT | 4,425 | 1,702 | 160.0% | 9,444 | 13,192 | -28.4% |
EBITDA(1) | 5,676 | 2,838 | 100.0% | 12,691 | 16,565 | -23.4% |
Financial Income (Expense) | 422 | (578) | -173.1% | (3,002) | (2,688) | 11.7% |
Income Before Taxes | 4,847 | 1,124 | 331.3% | 6,442 | 10,505 | -38.7% |
Net Income | 3,121 | 565 | 452.5% | 3,871 | 6,422 | -39.7% |
CPFL MOCOCA | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Gross Operating Revenue | 41,423 | 32,800 | 26.3% | 109,203 | 99,337 | 9.9% |
Net Operating Revenue | 28,009 | 21,088 | 32.8% | 70,963 | 61,853 | 14.7% |
Cost of Electric Power | (16,283) | (10,357) | 57.2% | (37,268) | (29,988) | 24.3% |
Operating Costs & Expenses | (8,199) | (6,892) | 19.0% | (21,871) | (19,953) | 9.6% |
EBIT | 3,526 | 3,839 | -8.2% | 11,824 | 11,912 | -0.7% |
EBITDA(1) | 5,098 | 5,186 | -1.7% | 15,710 | 15,892 | -1.1% |
Financial Income (Expense) | (674) | (784) | -14.0% | (2,916) | (3,265) | -10.7% |
Income Before Taxes | 2,852 | 3,055 | -6.6% | 8,908 | 8,647 | 3.0% |
Net Income | 2,333 | 1,966 | 18.7% | 6,157 | 5,905 | 4.3% |
Note: (1) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization. |
Página 61 de 65
Summary of Income Statement by Distribution Company (R$ Thousands) | |||||||
RGE SUL | |||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | ||
Gross Operating Revenue | 1,445,950 | - | 0.0% | 4,031,311 | - | 0.0% | |
Net Operating Revenue | 958,145 | - | 0.0% | 2,470,428 | - | 0.0% | |
Cost of Electric Power | (693,671) | - | 0.0% | (1,653,362) | - | 0.0% | |
Operating Costs & Expenses | (227,198) | - | 0.0% | (726,715) | - | 0.0% | |
EBIT | 37,276 | - | 0.0% | 90,352 | - | 0.0% | |
EBITDA(1) | 72,354 | - | 0.0% | 215,771 | - | 0.0% | |
Financial Income (Expense) | (37,114) | - | 0.0% | (93,522) | - | 0.0% | |
Income Before Taxes | 162 | - | 0.0% | (3,170) | - | 0.0% | |
Net Income | (12,025) | - | 0.0% | (20,871) | - | 0.0% | |
Note: (1) EBITDA (IFRS) is calculated from the sum of net income, taxes, financial result and depreciation/amortization. | |||||||
Página 62 de 65
CPFL Paulista | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 2,158 | 2,069 | 4.3% | 6,762 | 6,650 | 1.7% |
Industrial | 2,784 | 2,691 | 3.5% | 8,021 | 7,910 | 1.4% |
Commercial | 1,239 | 1,229 | 0.8% | 4,056 | 4,075 | -0.5% |
Others | 1,128 | 1,084 | 4.0% | 3,211 | 3,102 | 3.5% |
Total | 7,308 | 7,073 | 3.3% | 22,050 | 21,737 | 1.4% |
CPFL Piratininga | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 915 | 855 | 7.1% | 2,903 | 2,840 | 2.2% |
Industrial | 1,594 | 1,564 | 2.0% | 4,654 | 4,737 | -1.8% |
Commercial | 557 | 549 | 1.4% | 1,801 | 1,800 | 0.1% |
Others | 284 | 271 | 5.1% | 852 | 835 | 2.0% |
Total | 3,351 | 3,238 | 3.5% | 10,210 | 10,212 | 0.0% |
RGE | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 656 | 646 | 1.4% | 1,981 | 1,960 | 1.1% |
Industrial | 879 | 855 | 2.8% | 2,540 | 2,459 | 3.3% |
Commercial | 318 | 317 | 0.6% | 1,028 | 1,044 | -1.5% |
Others | 688 | 660 | 4.3% | 2,162 | 2,076 | 4.1% |
Total | 2,540 | 2,477 | 2.6% | 7,711 | 7,539 | 2.3% |
CPFL Santa Cruz | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 89 | 85 | 4.4% | 271 | 266 | 1.6% |
Industrial | 53 | 52 | 1.9% | 158 | 157 | 0.7% |
Commercial | 37 | 35 | 6.4% | 120 | 118 | 1.7% |
Others | 98 | 91 | 7.7% | 278 | 265 | 5.1% |
Total | 276 | 262 | 5.3% | 827 | 806 | 2.6% |
CPFL Jaguari | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 22 | 21 | 3.8% | 68 | 67 | 1.6% |
Industrial | 92 | 94 | -1.8% | 284 | 288 | -1.5% |
Commercial | 13 | 12 | 8.9% | 41 | 38 | 7.9% |
Others | 10 | 9 | 2.8% | 29 | 28 | 0.3% |
Total | 138 | 137 | 0.3% | 421 | 421 | -0.1% |
CPFL Mococa | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 19 | 18 | 3.6% | 58 | 56 | 2.2% |
Industrial | 17 | 16 | 6.8% | 50 | 48 | 3.8% |
Commercial | 7 | 7 | -3.1% | 22 | 23 | -3.0% |
Others | 17 | 17 | 2.0% | 47 | 46 | 2.0% |
Total | 60 | 58 | 3.3% | 176 | 173 | 1.9% |
CPFL Leste Paulista | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 25 | 25 | 1.7% | 76 | 75 | 1.2% |
Industrial | 22 | 21 | 3.5% | 66 | 63 | 5.3% |
Commercial | 10 | 10 | -0.8% | 33 | 33 | -0.9% |
Others | 39 | 35 | 10.9% | 92 | 85 | 8.3% |
Total | 96 | 91 | 5.4% | 266 | 255 | 4.3% |
CPFL Sul Paulista | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 37 | 36 | 3.3% | 110 | 109 | 1.3% |
Industrial | 45 | 46 | -2.4% | 135 | 139 | -3.0% |
Commercial | 13 | 13 | 2.4% | 43 | 42 | 1.0% |
Others | 24 | 23 | 4.7% | 71 | 69 | 3.3% |
Total | 119 | 117 | 1.3% | 359 | 359 | 0.0% |
RGE Sul (*) | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 617 | - | 0.0% | 2,029 | - | 0.0% |
Industrial | 734 | - | 0.0% | 2,122 | - | 0.0% |
Commercial | 284 | - | 0.0% | 959 | - | 0.0% |
Others | 410 | - | 0.0% | 1,617 | - | 0.0% |
Total | 2,045 | - | 0.0% | 6,727 | - | 0.0% |
Note: (*) Considers sales within the concession area from 3Q17 and 9M17. |
Página 63 de 65
CPFL Paulista | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 2,158 | 2,069 | 4.3% | 6,762 | 6,650 | 1.7% |
Industrial | 678 | 811 | -16.4% | 2,061 | 2,553 | -19.3% |
Commercial | 963 | 1,073 | -10.2% | 3,183 | 3,619 | -12.0% |
Others | 1,089 | 1,054 | 3.4% | 3,094 | 3,004 | 3.0% |
Total | 4,888 | 5,006 | -2.4% | 15,100 | 15,827 | -4.6% |
CPFL Piratininga | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 915 | 855 | 7.1% | 2,903 | 2,840 | 2.2% |
Industrial | 305 | 429 | -28.9% | 935 | 1,352 | -30.8% |
Commercial | 406 | 475 | -14.5% | 1,356 | 1,586 | -14.5% |
Others | 245 | 247 | -0.7% | 742 | 782 | -5.2% |
Total | 1,872 | 2,006 | -6.7% | 5,936 | 6,560 | -9.5% |
RGE | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 656 | 646 | 1.4% | 1,981 | 1,960 | 1.1% |
Industrial | 312 | 351 | -10.9% | 909 | 1,061 | -14.3% |
Commercial | 293 | 298 | -1.6% | 947 | 988 | -4.1% |
Others | 683 | 659 | 3.7% | 2,149 | 2,076 | 3.5% |
Total | 1,944 | 1,954 | -0.5% | 5,987 | 6,085 | -1.6% |
CPFL Santa Cruz | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 89 | 85 | 4.4% | 271 | 266 | 1.6% |
Industrial | 21 | 36 | -40.8% | 75 | 117 | -35.7% |
Commercial | 34 | 35 | -2.9% | 111 | 117 | -5.9% |
Others | 98 | 91 | 7.7% | 278 | 265 | 5.1% |
Total | 242 | 246 | -2.0% | 734 | 765 | -4.0% |
CPFL Jaguari | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 22 | 21 | 3.8% | 68 | 67 | 1.6% |
Industrial | 45 | 70 | -35.8% | 149 | 212 | -29.8% |
Commercial | 13 | 12 | 5.2% | 40 | 38 | 6.1% |
Others | 10 | 9 | 2.8% | 29 | 28 | 0.3% |
Total | 90 | 113 | -20.7% | 286 | 346 | -17.3% |
CPFL Mococa | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 19 | 18 | 3.6% | 58 | 56 | 2.2% |
Industrial | 8 | 9 | -19.2% | 24 | 27 | -11.5% |
Commercial | 6 | 7 | -6.6% | 21 | 23 | -5.3% |
Others | 17 | 17 | 2.0% | 47 | 46 | 2.0% |
Total | 50 | 51 | -2.5% | 149 | 152 | -1.4% |
CPFL Leste Paulista | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 25 | 25 | 1.7% | 76 | 75 | 1.2% |
Industrial | 7 | 7 | -3.7% | 22 | 21 | 3.5% |
Commercial | 10 | 10 | -0.8% | 33 | 33 | -0.9% |
Others | 39 | 35 | 10.9% | 92 | 85 | 8.3% |
Total | 81 | 77 | 5.0% | 222 | 213 | 3.9% |
CPFL Sul Paulista | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 37 | 36 | 3.3% | 110 | 109 | 1.3% |
Industrial | 19 | 24 | -18.4% | 66 | 72 | -7.6% |
Commercial | 13 | 13 | 2.4% | 43 | 42 | 1.0% |
Others | 24 | 23 | 4.7% | 71 | 69 | 3.3% |
Total | 93 | 95 | -1.9% | 290 | 292 | -0.4% |
RGE Sul (*) | ||||||
3Q17 | 3Q16 | Var. | 9M17 | 9M16 | Var. | |
Residential | 617 | - | 0.0% | 2,029 | - | 0.0% |
Industrial | 235 | - | 0.0% | 697 | - | 0.0% |
Commercial | 250 | - | 0.0% | 849 | - | 0.0% |
Others | 408 | - | 0.0% | 1,614 | - | 0.0% |
Total | 1,510 | - | 0.0% | 5,190 | - | 0.0% |
Note: (*) Considers sales to the captive market from 3Q17 and 9M17. |
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Net debt - Generation projects | ||||||||||
September-17 | Majority-controlled subsidiaries (fully consolidated) |
Investees accounted for under the equity method | Total | |||||||
CERAN | CPFL Renováveis |
Lajeado | Subtotal | Enercan | Baesa | Chapeco- ense |
Epasa | Subtotal | ||
Borrowings and debentures | 271 | 6,577 | 35 | 6,883 | 639 | 84 | 1,341 | 229 | 2,293 | 9,176 |
(-) Cash and cash equivalents | (326) | (945) | (15) | (1,286) | (151) | (11) | (125) | (22) | (309) | (1,595) |
Net Debt | (55) | 5,632 | 20 | 5,597 | 488 | 74 | 1,216 | 207 | 1,984 | 7,582 |
CPFL stake (%) | 65% | 52% | 59.93% | - | 48.72% | 25.01% | 51% | 53.34% | - | - |
Net Debt in generation projects | (36) | 2,906 | 12 | 2,883 | 238 | 18 | 620 | 111 | 987 | 3,869 |
Reconciliation | ||||||||||
CPFL Energia | ||||||||||
Gross Debt | 19,291 | |||||||||
(-) Cash and cash equivalents | (3,832) | |||||||||
Net Debt (IFRS) | 15,459 | |||||||||
(-) Fully consolidated projects | (5,597) | |||||||||
(+) Proportional consolidation | 3,869 | |||||||||
Net Debt (Pro Forma) | 13,731 |
EBITDA - Generation projects | ||||||||||
3Q17 | Majority-controlled subsidiaries (fully consolidated) |
Investees accounted for under the equity method | Total | |||||||
CERAN | CPFL Renováveis |
Lajeado | Subtotal | Enercan | Baesa | Chapeco- ense |
Epasa | Subtotal | ||
Net operating revenue | 315 | 1,870 | 38 | 2,223 | 580 | 300 | 824 | 712 | 2,417 | 4,640 |
Operating cost and expense | (95) | (733) | (18) | (846) | (167) | (142) | (144) | (466) | (918) | (1,764) |
EBITDA | 220 | 1,137 | 20 | 1,377 | 413 | 159 | 681 | 246 | 1,499 | 2,875 |
CPFL stake (%) | 65% | 51.60% | 59.93% | - | 48.72% | 25.01% | 51% | 53.34% | - | - |
Proportional EBITDA | 143 | 587 | 12 | 741 | 201 | 40 | 347 | 131 | 719 | 1,461 |
Reconciliation | ||||||||||
CPFL Energia - 3Q17 LTM | ||||||||||
Net income | 883 | |||||||||
Amortization | 1,497 | |||||||||
Financial Results | 1,652 | |||||||||
Income Tax /Social Contribution | 470 | |||||||||
EBITDA | 4,502 | |||||||||
(-) Equity income | (363) | |||||||||
(-) EBITDA - Fully consolidated projects | (1,377) | |||||||||
(+) Proportional EBITDA | 1,461 | |||||||||
(+) RGE Sul - Jul-16 to Oct-17¹ | 12 | |||||||||
EBITDA Pro Forma | 4,235 | |||||||||
Net Debt / EBITDA Pro Forma | 3.242x |
Notes: 1) In accordance with financial covenants calculation in cases of assets acquired by the Company.
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CPFL ENERGIA S.A. | ||
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By: |
/S/ GUSTAVO ESTRELLA
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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.