UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
 
For the month of August, 2016
Commission File Number 32297


 
CPFL Energy Incorporated
(Translation of Registrant's name into English)

 
Rua Gomes de Carvalho, 1510, 14º andar, cj 1402
CEP 04547-005 - Vila Olímpia, São Paulo – SP
Federative Republic of Brazil
(Address of principal executive office)
 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.  Form 20-F ___X___ Form 40-F _______

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]

 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____

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_________________

.


 
 

Registration Form – 2016 – CPFL Energia S.A.                                                          Version: 1

 

Summary

 

Registration data

1.     General information 2
2.     Address 3
3.     Securities 4
4.     Auditor information 5
5.     Share register 6
6.     Investor relations officer 7
7.     Shareholders’ department 8

 

 

1

 


 
 

Registration Form – 2016 – CPFL Energia S.A.                                                          Version: 1

 

1.     General information

 

Company name:

CPFL ENERGIA S. A.

Date of adoption of company name:

08/06/2002

Type:

publicly-held Corporation

Previous company name:

Draft II Participações S. A

Date of incorporation:

03/20/1998

CNPJ (Corporate Taxpayer ID):

02.429.144/0001-93

CVM code:

1866-0

CVM registration date:

05/18/2000

CVM registration status:

Active

Status starting date:

05/18/2000

Country:

Brazil

Country in which the securities

 

Are held in custody:

Brazil

Other countries in which the securities can be traded

Country

Date of admission

United States

09/29/2004

 

Sector of activity:

Holding company (Electric Energy)

Description of activity:

Holding company

Issuer s category:

Category A

Date of registration in the current category:

01/01/2010

Issuer s status:

Operating

Status starting date:

05/18/2000

Type of ownership control:

Private Holding

Date of last change in ownership control:

11/30/2009

Date of last change of fiscal year:

 

Month/day of the end of fiscal year:

12/31

Issuer´s web address:

www. cpfl. com. br

Newspaper or media where issuer discloses its information:     

Newspaper or media

FU

Diário Oficial do Estado de São Paulo

SP

Valor Econômico

SP

www.cpfl.com.br/ri

SP

www.portalneo1.net

SP

www.valor.com.br/valor-ri

SP

 

2

 


 

Registration Form – 2016 – CPFL Energia S.A.                                                          Version: 1

 

2.     Address

 

Mail Address: Rodovia Engenheiro Miguel Noel Nascentes Burnier, 1755, Km 2,5, Parque São Quirino, Campinas, SP, Brazil, zip code 13088-140

Telephone (019) 3756-6083, Fax (019) 3756-6089, E-mail: [email protected]

 

Registered Office Address: Rua Gomes de Carvalho, 1510, 14º– Cj 2 Vila Olímpia, São Paulo, SP, Brazil, zip code: 04547-005

Telephone: (019) 3756-6083, Fax: (019) 3756-6089, E-mail: [email protected]

 

3

 


 

Registration Form – 2016 – CPFL Energia S.A.                                                          Version: 1

 

3.     Securities

 

Share   trading

Trading mkt                              Stock exchange

Managing entity                        BM&FBOVESPA

Start date                                 09/29/2004

End date          

Trading segment                       New Market

Start date                                 9/29/2004

End date

                                                                                             

Debenture trading

Trading mkt                              Organized market

Managing entity                        CETIP

Start date                                 05/18/2000

End date          

Trading segment                       Traditional

Start date                                 05/19/2000

End date

 

4

 


 

Registration Form – 2016 – CPFL Energia S.A.                                                          Version: 1

 

4.     Auditor information

 

Does the issuer have an auditor?                      Yes

CVM code:                                                      385-9

Type of auditor:                                               Brazilian firm

Independent auditor:                                         Deloitte Touche Tomatsu Auditores Independentes

CNPJ (Corporate Taxpayer ID):                         49.928.567/0001-11

Period of service:                                             03/12/2012

Partner in charge                                              Marcelo Magalhães Fernandes

Period of service                                              03/12/2012

CPF (Individual Taxpayer ID)                             110.931.498-17

5

 


 

Registration Form – 2016 – CPFL Energia S.A.                                                          Version: 1

 

5.     Share register

 

Does the company have a service provider:    Yes

Corporate name:                                            Banco do Brasil 

CNPJ:                                                           00.000.000/0001-91

Period of service:                                          01/01/2011

Address:

Rua Lélio Gama, 105 – 38º floor, Gecin, Centro, Rio de Janeiro, RJ, Brazil, zip code: 20031-080, Telephone (021) 38083551, Fax: (021) 38086088, e-mail: [email protected]

6

 


 

Registration Form – 2016 – CPFL Energia S.A.                                                          Version: 1

 

6.     Investor relations officer

 

Name:                                      Gustavo Estrella

                                               Investor Relations Officer

CPF/CNPJ:                              037.234.097-09

Address:

Rodovia Engenheiro Miguel Noel Nascentes Burnier, 1755, Km 2,5, Parque São Quirino, Campinas, SP, Brazil, zip code 13088-140

Telephone (019) 3756-6083, Fax (019) 3756-6089, email: [email protected].

 

Date when the officer assumed the position:                 02/27/2013

Date when the officer left the position:

 

7

 


 
 

Registration Form – 2016 – CPFL Energia S.A.                                                          Version: 1

 

7.     Shareholders’ department

 

Contact Leandro José Cappa de Oliveira
Date when the officer assumed the position: 10/06/2014
Date when the officer left the position:  

 

 

Address:

Rodovia Engenheiro Miguel Noel Nascentes Burnier, 1755, Km 2,5, Parque São Quirino, Campinas, SP, Brazil, zip code 13088-140

Telephone (019) 3756-6083, email: [email protected]

 

8

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

Table of Contents  

Company Data

 

Capital Composition

1

Cash dividend

2

Individual financial statements

 

Statement of Financial Position - Assets

3

Statement of Financial Position - Liabilities and Equity

4

Statement of Income

5

Statement of Comprehensive Income

6

Statement of Cash Flows Indirect Method

7

Statement of Changes in Equity

 

01/01/2016 to 06/30/2016

7

01/01/2015 to 06/30/2015

8

Statements of Value Added

9

Consolidated Interim Financial Statements

 

Statement of Financial Position - Assets

12

Statement of Financial Position - Liabilities and Equity

13

Statement of Income

14

Statement of Comprehensive Income

15

Statement of Cash Flows - Indirect Method

16

Statement of Changes in Equity

 

01/01/2016 to 06/30/2016

15

01/01/2015 to 06/30/2015

16

Statements of Value Added

17

Comments on performance

28

Notes to Interim financial statements

37

Other relevant information

98

Reports

 

Independent Auditor s Report - Unqualified

101

 

 

9

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Capital Composition

Number of Shares

(In units)

Closing Date

06/30/2016

Paid-in capital

 

Common

1,017,914,746

Preferred

0

Total

1,017,914,746

Treasury Stock

0

Common

0

Preferred

0

Total

0

 

 

10

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Company Data

Cash dividends

Event

Approval

Description

Beginning of payment

Type of share

Class of share

Amount per share

(Reais/share)

Board of Directors’ Meeting

03/16/2016

Dividend

07/01/2016

ON

(Common shares)

 

0.20687

 

 

 

11

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Individual Financial Statements

Statement of Financial Position – Assets

 

(in thousands of Brazilian reais – R$)

 

 

       

Code

Description

Current Year 06/30/2016

Previous Year 12/31/2015

1

Total assets

8,316,075

8,948,469

1.01

Current assets

1,164,073

1,795,763

1.01.01

Cash and cash equivalents

872,166

424,192

1.01.06

Recoverable taxes

76,233

72,885

1.01.06.01

Current recoverable taxes

76,233

72,885

1.01.08

Other current assets

215,674

1,298,686

1.01.08.03

Others

215,674

1,298,686

1.01.08.03.01

Other credits

1,256

943

1.01.08.03.02

Dividends and interest on shareholders’ equity

214,418

1,227,590

1.01.08.03.03

Derivatives

-

70,153

1.02

Noncurrent assets

7,152,002

7,152,706

1.02.01

Noncurrent assets

299,827

211,432

1.02.01.06

Deferred taxes

168,369

140,389

1.02.01.06.02

Deferred taxes credits

168,369

140,389

1.02.01.08

Related parties credits

100,146

2,814

1.02.01.08.02

Subsidiaries credits

100,146

2,814

1.02.01.09

Other noncurrent assets

31,312

68,229

1.02.01.09.03

Escrow deposits

723

630

1.02.01.09.05

Other credits

14,569

14,919

1.02.01.09.07

Advance for future capital increase

16,020

52,680

1.02.02

Investments

6,850,886

6,940,036

1.02.02.01

Permanent equity interests

6,850,886

6,940,036

1.02.02.01.02

Investments in subsidiaries

6,850,886

6,940,036

1.02.03

Property, plant and equipment

1,265

1,215

1.02.04

Intangible assets

24

23

1.02.04.01

Intangible assets

24

23

1.02.04.01.02

Other Intangibles

24

23

 

 

12

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Individual Financial Statements

Statement of Financial Position – Liabilities and Equity

(in thousands of Brazilian reais – R$)

   
       

Code

Description

Current Year 06/30/2016

Previous Yearr 12/31/2015

2

Total liabilities

8,316,075

8,948,469

2.01

Current liabilities

454,616

1,206,708

2.01.02

Trade payables

674

1,157

2.01.02.01

National Trade payables

674

1,157

2.01.03

Tax Obligations

13,772

747

2.01.03.01

Federal Tax Obligations

13,772

747

2.01.03.01.01

Income tax and Social Contribution

11,066

-

2.01.03.01.02

PIS (Tax on Revenue)

289

63

2.01.03.01.03

COFINS (Tax on Revenue)

1,472

391

2.01.03.01.04

Others Federal

945

293

2.01.04

Loans and financing

166,787

973,252

2.01.04.01

Loans and financing

166,787

973,252

2.01.04.01.01

Brazilian currency

-

330,164

2.01.04.01.02

Foreign Currency

166,787

643,088

2.01.05

Other Current liabilities

273,383

231,552

2.01.05.02

Others

273,383

231,552

2.01.05.02.01

Dividends and interest on capital payable

210,710

212,531

2.01.05.02.04

Derivatives

43,303

981

2.01.05.02.05

Other payable

19,370

18,040

2.02

Noncurrent liabilities

58,711

67,565

2.02.02

Other Noncurrent liabilities

57,851

65,930

2.02.02.02

Others

57,851

65,930

2.02.02.02.04

Other payable

29,619

31,961

2.02.02.02.05

Provision for equity interest losses

28,232

33,969

2.02.04

Provisions

860

1,635

2.02.04.01

Civil, Labor, Social and Tax Provisions

860

1,635

2.02.04.01.02

Labor and tax provisions

353

1,209

2.02.04.01.04

Civil provisions

507

426

2.03

Shareholders’ equity

7,802,748

7,674,196

2.03.01

Capital

5,741,284

5,348,312

2.03.02

Capital reserves

468,082

468,082

2.03.04

Profit reserves

1,388,864

1,672,481

2.03.04.01

Legal reserves

694,058

694,058

2.03.04.02

Statutory reserves

694,806

978,423

2.03.05

Retained earnings

436,476

-

2.03.08

Other comprehensive income

- 231,958

185,321

2.03.08.01

Accumulated comprehensive income

- 231,958

185,321

 

 

13

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Individual Financial Statements

Statement of income

 

(in thousands of Brazilian reais – R$)

 

 

 

           

Code

Description

Current Year - Second Quarter

YTD Current Year

Previous Year - Second Quarter

YTD Previous Year

04/01/2016 to 06/30/2016

01/01/2016 to 06/30/2016

04/01/2015 to 06/30/2015

01/01/2015 to 06/30/2015

3.01

Net Operating revenues

-

1,713

1,156

1,156

3.03

Gross Operating income

-

1,713

1,156

1,156

3.04

Gross Operating income (expense)

252,078

525,869

141,346

324,658

3.04.02

General and administrative

(12,898)

(20,942)

(7,297)

(15,261)

3.04.06

Equity income

264,976

546,811

148,643

339,919

3.05

Income before financial income and taxes

252,078

527,582

142,502

325,814

3.06

Financial income / expense

15,200

4,760

(7,897)

(21,945)

3.06.01

Financial income

27,225

36,386

7,196

25,576

3.06.02

Financial expense

(12,025)

(31,626)

(15,093)

(47,521)

3.07

Income before taxes

267,278

532,342

134,605

303,869

3.08

Income tax and social contribution

(7,467)

(1,182)

(10,425)

(10,719)

3.08.01

Current

(7,220)

(29,162)

(7,587)

(7,657)

3.08.02

Deferred

(247)

27,980

(2,838)

(3,062)

3.09

Net income/(loss) from continuing operations

259,811

531,160

124,180

293,150

3.11

Net income/(loss)

259,811

531,160

124,180

293,150

3.99.01.01

ON

0.26

0.52

0.12

0.29

3.99.02.01

ON

0.26

0.52

0.12

0.29

 

 

14

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Individual Financial Statements

Statement of Comprehensive Income

 

(in thousands of Brazilian reais – R$)

 

 

 

 

 

 

 

 

 

 

Code

Description

Current Year Second Quarter

YTD Current

 Year

Previous Year Second Quarter

YTD Previous

Year

04/01/2016 to 06/30/2016

01/01/2016 to 06/30/2016

04/01/2015 to 06/30/2015

01/01/2015 to 06/30/2015

4.01

Net income/(loss)

259,811

531,160

124,180

293,150

4.02

Other comprehensive income

(403,036)

(404,363)

-

-

4.02.01

Comprehensive income for the period of subsidiaries

(403,036)

(404,363)

-

-

4.03

Comprehensive income

(143,225)

126,797

124,180

293,150

 

 

15

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Individual Financial Statements

Statement of Cash Flows – Indirect Method

 

(in thousands of Brazilian reais – R$)

 

 

 

 

 

 

Code

Description

Current year

01/01/2016 to 06/30/2016

Previous Year

01/01/2015 to 06/30/2015

6.01

Net cash from operating activities

1,239,878

575,000

6.01.01

Cash generated (used) from operations

8,992

9,829

6.01.01.01

Net income, including income tax and social contribution

532,342

303,869

6.01.01.02

Depreciation and amortization

102

80

6.01.01.03

Provision for tax, civil and labor risks

38

468

6.01.01.04

Interest on debts, inflation adjusment and exchange rate changes

23,321

45,331

6.01.01.05

Share of profit (loss) of investees

(546,811)

(339,919)

6.01.02

Variation on assets and liabilities

1,230,886

565,171

6.01.02.01

Dividend and interest on shareholders’ equity received

1,289,907

607,349

6.01.02.02

Recoverable taxes

(122)

(5,144)

6.01.02.03

Escrow deposits

(72)

(32)

6.01.02.04

Other operating assets

301

131

6.01.02.05

Trade payables

(482)

(212)

6.01.02.06

Other taxes and social contributions

1,959

5,742

6.01.02.07

Tax, civil and labor risks paid

(839)

(95)

6.01.02.08

Other operating liabilities

(1,013)

(4,082)

6.01.02.09

Interest on debts (paid)

(40,657)

(36,858)

6.01.02.10

Income tax and social contribution paid

(18,096)

(1,628)

6.02

Net cash in investing activities

(108,818)

(15,841)

6.02.01

Acquisition of property, plant and equipment

(219)

(268)

6.02.02

Securities

(199)

-

6.02.06

Purchases of intangible assets

-

(7)

6.02.07

Advance for future capital increase

(16,020)

(80)

6.02.08

Intragroup loans

(92,380)

(15,486)

6.03

Net cash in financing activities

(683,085)

(795,729)

6.03.01

Payments of Loans, financing and debentures

(726,148)

(1,290,000)

6.03.02

Derivative instruments paid

43,128

-

6.03.03

Loans, financing and debentures obtained

-

494,383

6.03.04

Payments of dividend and interest on shareholders’ equity

(65)

(112)

6.05

Increase (decrease) in cash and cash equivalents

447,975

(236,570)

6.05.01

Cash and cash equivalents at beginning of period

424,192

799,775

6.05.02

Cash and cash equivalents at end of period

872,167

563,205

 

 

16

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Individual Financial Statements

Statement of Changes in Equity – from January 1, 2016 to June 30, 2016

 

 

(in thousands of Brazilian reais – R$)

           
               

Code

Description

Capital

Capital Reserves,
options and treasury shares

Profit Reserves

Retained earnings

Other comprehensive income

Shareholders’ Equity Total

5.01

Opening balance

5,348,312

468,082

1,672,481

-

185,320

7,674,195

5.03

Adjusted balance

5,348,312

468,082

1,672,481

-

185,320

7,674,195

5.04

Capital transactions with shareholders

392,972

-

(392,972)

1,756

-

1,756

5.04.01

Capital increase

392,972

-

(392,972)

-

-

-

5.04.11

Prescribed dividend

-

-

-

1,756

-

1,756

5.05

Total comprehensive income

-

-

-

531,160

(404,363)

126,797

5.05.01

Net income for the period

-

-

-

531,160

-

531,160

5.05.02

Other comprehensive income

-

-

-

-

(404,363)

(404,363)

5.06

Internal changes in Shareholders' equity

-

-

109,356

(96,440)

(12,916)

-

5.06.05

Equity on comprehensive income of subsidiaries

-

-

-

12,916

(12,916)

-

5.06.06

Changes in statutory reserve in the period

-

-

109,356

(109,356)

-

-

5.07

Ending Balances

5,741,284

468,082

1,388,865

436,476

(231,959)

7,802,748

 

 

17

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Individual Financial Statements

Statement of Changes in Equity – from January 1, 2015 to June 30, 2015

 

(in thousands of Brazilian reais – R$)

     
               

Code

Description

Capital

Capital Reserves, options and treasury shares

Profit Reserves

Retained earnings

Other comprehensive income

Shareholders’ Equity Total

5.01

Opening Balances

4,793,424

468,082

1,536,136

-

145,893

6,943,535

5.03

Adjusted balance

4,793,424

468,082

1,536,136

-

145,893

6,943,535

5.04

Capital transactions with shareholders

554,888

-

(554,888)

3,134

-

3,134

5.04.01

Capital increase

554,888

-

(554,888)

-

-

-

5.04.11

Prescribed dividend

-

-

-

3,134

-

3,134

5.05

Total Comprehensive Income

-

-

-

293,150

-

293,150

5.05.01

Net income for the period

-

-

-

293,150

-

293,150

5.06

Internal changes in Shareholders' equity

-

-

88,447

(75,260)

(13,187)

-

5.06.04

Equity on comprehensive income of subsidiaries

-

-

-

13,187

(13,187)

-

5.06.06

Changes in statutory reserve in the year

-

-

88,447

(88,447)

-

-

5.07

Ending Balances

5,348,312

468,082

1,069,695

221,024

132,706

7,239,819

 

 

 

18

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Individual Financial Statements

Statement of Value Added

 

(in thousands of Brazilian reais – R$)

 

 

 

 

 

 

Code

Description

Current Year

01/01/2016 to 06/30/2016

Previous Year

01/01/2015 to 06/30/2015

7.01

Revenues

2,106

1,548

7.01.01

Sales of goods, products and services

1,887

1,274

7.01.03

Revenues related to construction of own assets

219

274

7.02

Inputs

(5,061)

(5,193)

7.02.02

Material-Energy-Outsourced services-Other

(4,163)

(4,306)

7.02.04

Other

(898)

(887)

7.03

Gross added value

(2,955)

(3,645)

7.04

Retentions

(102)

(80)

7.04.01

Depreciation and amortization

(102)

(80)

7.05

Net added value generated

(3,057)

(3,725)

7.06

Added value received in transfer

586,200

371,262

7.06.01

Equity in subsidiaries

546,811

339,919

7.06.02

Financial income

39,389

31,343

7.07

Added Value to be Distributed

583,143

367,537

7.08

Distribution of Added Value

583,143

367,537

7.08.01

Personnel

13,644

8,583

7.08.01.01

Direct Remuneration

5,527

4,537

7.08.01.02

Benefits

7,421

3,518

7.08.01.03

Government severance indemnity fund for employees-F.G.T.S.

696

528

7.08.02

Taxes, Fees and Contributions

7,126

21,500

7.08.02.01

Federal

7,107

21,489

7.08.02.02

State

19

11

7.08.03

Remuneration on third parties’ capital

31,213

44,304

7.08.03.01

Interest

31,188

44,233

7.08.03.02

Rental

25

71

7.08.04

Remuneration on own capital

531,160

293,150

7.08.04.03

Retained profit / loss for the period

531,160

293,150

 

 

 

19

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Consolidated Financial Statements

Statement of Financial Position – Assets

 

(in thousands of Brazilian reais – R$)

 

 

 

 

 

 

Code

Description

Current Year 06/30/2016

Previous Year 12/31/2015

1

Total assets

37,950,234

40,532,471

1.01

Current assets

11,302,583

12,508,652

1.01.01

Cash and cash equivalents

5,464,783

5,682,802

1.01.02

Financial Investments

22,183

23,633

1.01.02.02

Financial Investments at amortized cost

22,183

23,633

1.01.02.02.01

Held to maturity

22,183

23,633

1.01.03

Accounts receivable

3,444,243

3,174,918

1.01.03.01

Consumers

3,444,243

3,174,918

1.01.06

Recoverable taxes

517,302

475,211

1.01.06.01

Current Recoverable taxes

517,302

475,211

1.01.08

Other current assets

1,854,072

3,152,088

1.01.08.03

Other

1,854,072

3,152,088

1.01.08.03.01

Other credits

625,097

959,554

1.01.08.03.02

Derivatives

560,057

627,493

1.01.08.03.04

Dividends and interest on shareholders’ equity

13,424

91,392

1.01.08.03.05

Financial asset of concession

9,846

9,630

1.01.08.03.06

Sector financial asset

645,648

1,464,019

1.02

Noncurrent assets

26,647,651

28,023,819

1.02.01

Noncurrent assets

6,789,276

8,392,634

1.02.01.03

Accounts receivable

131,118

128,946

1.02.01.03.01

Consumers

131,118

128,946

1.02.01.06

Deferred taxes

495,045

334,886

1.02.01.06.02

Deferred taxes credits

495,045

334,886

1.02.01.08

Related parties

44,532

84,265

1.02.01.08.01

Related parties credits

44,532

84,265

1.02.01.09

Other noncurrent assets

6,118,581

7,844,537

1.02.01.09.03

Derivatives

686,282

1,651,260

1.02.01.09.04

Escrow deposits

495,527

1,227,527

1.02.01.09.05

Recoverable taxes

160,071

167,159

1.02.01.09.07

Financial asset of concession

4,002,959

3,597,474

1.02.01.09.09

Investments at cost

116,654

116,654

1.02.01.09.10

Other credits

657,088

594,518

1.02.01.09.11

Sector financial asset

-

489,945

1.02.02

Investments

1,384,239

1,247,631

1.02.02.01

Permanent equity interests

1,384,239

1,247,631

1.02.02.01.04

Other permanent equity interests

1,384,239

1,247,631

1.02.03

Property, plant and equipment

9,453,342

9,173,217

1.02.03.01

PP&E - in service

8,643,295

8,499,051

1.02.03.03

PP&E - in progress

810,047

674,166

1.02.04

Intangible assets

9,020,794

9,210,337

1.02.04.01

Intangible assets

9,020,794

9,210,337

 

 

 

20

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Consolidated Financial Statements

Statement of Financial Position – Liabilities and Equity

 

 

(in thousands of Brazilian reais – R$)

 

 

 

 

 

 

Code

Description

Current Year 06/30/2016

Previous Year 12/31/2015

2

Total liabilities

37,950,234

40,532,471

2.01

Current liabilities

7,342,643

9,524,873

2.01.01

Social and Labor Obligations

123,203

79,924

2.01.01.02

Labor Obligations

123,203

79,924

2.01.01.02.01

Estimated Labor Obligation

123,203

79,924

2.01.02

Trade payables

1,688,003

3,161,210

2.01.02.01

National Trade payables

1,688,003

3,161,210

2.01.03

Tax Obligations

746,067

653,342

2.01.03.01

Federal Tax Obligations

367,537

265,126

2.01.03.01.01

Income tax and Social Contribution

214,102

43,249

2.01.03.01.02

PIS (Tax on Revenue)

22,414

33,199

2.01.03.01.03

COFINS (Tax on Revenue)

104,179

159,317

2.01.03.01.04

Others Federal

26,842

29,361

2.01.03.02

State Tax Obligations

374,693

384,151

2.01.03.02.01

ICMS (Tax on Revenue)

374,693

384,151

2.01.03.03

Municipal Tax Obligations

3,837

4,065

2.01.03.03.01

Others Municipal

3,837

4,065

2.01.04

Loans and financing

3,287,016

3,640,314

2.01.04.01

Loans and financing

2,270,776

2,949,922

2.01.04.01.01

Brazilian currency

920,326

1,287,278

2.01.04.01.02

Foreign Currency

1,350,450

1,662,644

2.01.04.02

Debentures

1,016,240

690,392

2.01.04.02.01

Debentures

787,842

458,165

2.01.04.02.02

Interest on debentures

228,398

232,227

2.01.05

Other liabilities

1,498,354

1,990,083

2.01.05.02

Others

1,498,354

1,990,083

2.01.05.02.01

Dividends and interest on capital payable

222,937

221,855

2.01.05.02.04

Derivatives

48,536

981

2.01.05.02.05

Sector financial liability

42,510

-

2.01.05.02.06

Public utility

9,941

9,457

2.01.05.02.07

Other payable

850,851

904,971

2.01.05.02.08

Regulatory charges

319,311

852,017

2.01.05.02.09

Post-employment benefit obligation

4,268

802

2.02

Noncurrent liabilities

20,423,625

20,877,460

2.02.01

Loans and financing

16,748,008

18,092,904

2.02.01.01

Loans and financing

11,102,484

11,712,865

2.02.01.01.01

Brazilian currency

6,455,890

6,438,701

2.02.01.01.02

Foreign Currency

4,646,594

5,274,164

2.02.01.02

Debentures

5,645,524

6,380,039

2.02.01.02.01

Debentures

5,622,996

6,363,553

2.02.01.02.02

Interest on debentures

22,528

16,486

2.02.02

Other payable

1,694,577

782,427

2.02.02.02

Other

1,694,577

782,427

2.02.02.02.03

Trade payables

633

633

2.02.02.02.04

Post-employment benefit obligation

861,304

474,318

2.02.02.02.05

Derivatives

83,031

33,205

2.02.02.02.06

Sector financial liability

473,099

-

2.02.02.02.07

Public utility

86,152

83,124

2.02.02.02.08

Other payable

190,358

191,147

2.02.03

Deferred taxes

1,363,006

1,432,594

2.02.03.01

Deferred Income tax and Social Contribution

1,363,006

1,432,594

2.02.04

Provisions

618,034

569,535

2.02.04.01

Civil, Labor, Social and Tax Provisions

618,034

569,535

2.02.04.01.01

Tax Provisions

245,909

184,362

2.02.04.01.02

Labor and pension provisions

146,571

171,990

2.02.04.01.04

Civil provisions

199,243

194,530

2.02.04.01.05

Others

26,311

18,653

2.03

Shareholders´ equity - consolidated

10,183,966

10,130,138

2.03.01

Capital

5,741,284

5,348,312

2.03.02

Capital reserves

468,082

468,082

2.03.04

Profit reserves

1,388,864

1,672,481

2.03.04.01

Legal reserves

694,058

694,058

2.03.04.02

Statutory reserve

694,806

978,423

2.03.05

Retained earnings

436,476

-

2.03.08

Other comprehensive income

(231,958)

185,321

2.03.09

Shareholders Non-controlling interest

2,381,218

2,455,942

 

 

 

21

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Consolidated Financial Statements

Statement of income

 

(in thousands of Brazilian reais – R$)

   
           

Code

Description

Current Year - Second Quarter

YTD Current Year

Previous Year - Second Quarter

YTD Previous Year

04/01/2016 to 06/30/2016

01/01/2016 to 06/30/2016

04/01/2015 to 06/30/2015

01/01/2015 to 06/30/2015

3.01

Net Operating revenues

4,416,082

8,665,472

5,162,549

10,452,617

3.02

Cost of electric energy services

(3,475,976)

(6,745,768)

(4,365,436)

(8,642,051)

3.02.01

Cost of electric energy

(2,664,546)

(5,192,567)

(3,611,688)

(7,209,539)

3.02.02

Operating cost

(536,398)

(1,060,632)

(468,623)

(916,725)

3.02.03

Services rendered to third parties

(275,032)

(492,569)

(285,125)

(515,787)

3.03

Gross Operating income

940,106

1,919,704

797,113

1,810,566

3.04

Gross Operating income (expense)

(350,626)

(690,948)

(429,287)

(784,761)

3.04.01

Sales expenses

(136,739)

(264,096)

(129,177)

(235,396)

3.04.02

General and administrative

(210,219)

(415,128)

(256,570)

(434,710)

3.04.05

Others

(72,306)

(143,842)

(107,797)

(196,036)

3.04.06

Equity income

68,638

132,118

64,257

81,381

3.05

Income before financial income and taxes

589,480

1,228,756

367,826

1,025,805

3.06

Financial income / expense

(199,315)

(430,963)

(186,758)

(553,487)

3.06.01

Financial income

401,522

806,370

329,493

616,567

3.06.02

Financial expense

(600,837)

(1,237,333)

(516,251)

(1,170,054)

3.07

Income before taxes

390,165

797,793

181,068

472,318

3.08

Income tax and social contribution

(150,030)

(325,212)

(90,828)

(239,768)

3.08.01

Current

(266,721)

(551,798)

(84,338)

(198,655)

3.08.02

Deferred

116,691

226,586

(6,490)

(41,113)

3.09

Net income from continuing operations

240,135

472,581

90,240

232,550

3.11

Net income

240,135

472,581

90,240

232,550

3.11.01

Net income attributable to controlling shareholders

259,811

531,159

124,180

293,150

3.11.02

Net income attributable to noncontrolling shareholders

(19,676)

(58,578)

(33,940)

(60,600)

 

 

22

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Consolidated Financial Statements

Statement of Comprehensive Income

 

(in thousands of Brazilian reais – R$)

 

 

           

Code

Description

Current Year - Second Quarter

YTD Current Year

Previous Year - Second Quarter

YTD Previous Year

04/01/2016 to 06/30/2016

01/01/2016 to 06/30/2016

04/01/2015 to 06/30/2015

01/01/2015 to 06/30/2015

4.01

Consolidated profit for the period

240,135

472,581

90,240

232,550

4.02

Other comprehensive income

(403,036)

(404,363)

-

-

4.02.01

Actuarial gains (losses), net of tax effects

(403,036)

(404,363)

-

-

4.03

Consolidated comprehensive income

(162,901)

68,218

90,240

232,550

4.03.01

Comprehensive income attributable to controlling shareholders

(143,225)

126,797

124,180

293,150

4.03.02

Comprehensive income attributable to non controlling shareholders

(19,676)

(58,579)

(33,940)

(60,600)

 

 

23

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Consolidated Financial Statements

Statement of Cash Flows – Indirect Method

 

(in thousands of Brazilian reais – R$)

 

 

 

 

 

 

Code

Description

YTD Current Year

01/01/2016 to 06/30/2016

YTD previous year

01/01/2015 to 06/30/2015

6.01

Net cash from operating activities

1,611,666

169,115

6.01.01

Cash generated from operations

2,406,604

2,194,376

6.01.01.01

Net income, including income tax and social contribution

797,793

472,318

6.01.01.02

Depreciation and amortization

620,002

638,300

6.01.01.03

Reserve for tax, civil, labor and environmental risks

139,095

139,524

6.01.01.04

Allowance for doubtful accounts

95,865

62,466

6.01.01.05

Interest and monetary and exchange restatement

848,205

902,089

6.01.01.06

Private pension plan

27,825

32,689

6.01.01.07

Equity income

(132,118)

(81,381)

6.01.01.08

Loss (gain) on disposal of noncurrent assets

19,982

27,466

6.01.01.09

Deferred taxes - PIS and COFINS

(9,715)

3,368

6.01.01.10

Other

(330)

(2,463)

6.01.02

Variation on assets and liabilities

(794,938)

(2,025,261)

6.01.02.01

Consumers, Concessionaires and Licensees

(366,295)

(1,205,959)

6.01.02.02

Dividend and interest on shareholders’ equity received

75,161

16,517

6.01.02.03

Recoverable Taxes

(26,185)

27,943

6.01.02.04

Escrow deposits

749,422

17,200

6.01.02.05

Sector financial asset

1,588,088

(663,333)

6.01.02.06

Receivables - amounts from the Energy Development Account - CDE

229,359

(182,563)

6.01.02.07

Concession financial asset (transmission)

(11,754)

(27,707)

6.01.02.08

Other operating assets

45,543

(5,661)

6.01.02.09

Trade payables

(1,473,207)

(107,234)

6.01.02.10

Other taxes and social contributions

(94,018)

175,330

6.01.02.11

Other liabilities with post-employment benefit obligation

(41,737)

(67,463)

6.01.02.12

Regulatory charges

(532,706)

894,282

6.01.02.13

Tax, civil and labor risks paid

(120,162)

(78,382)

6.01.02.14

Sector financial liability

276,163

(22,434)

6.01.02.15

Resources provided by the CDE - payable

(29,505)

52,247

6.01.02.16

Other operating liabilities

101,863

104,889

6.01.02.17

Interest paid on debts and debentures

(801,508)

(764,585)

6.01.02.18

Income tax and social contribution paid

(363,460)

(188,348)

6.02

Net cash in investing activities

(963,569)

(793,363)

6.02.01

Purchases of property, plant and equipment

(517,272)

(287,750)

6.02.02

Securities, pledges and restricted deposits

(59,631)

(99,378)

6.02.04

Purchases of intangible assets

(432,454)

(425,060)

6.02.05

Sale of noncurrent assets

789

8,268

6.02.08

Loans to subsidiaries and associates

44,999

103

6.02.11

Sale of interest in investees

-

10,454

6.03

Net cash in financing activities

(866,116)

(29,477)

6.03.01

Borrowings and debentures obtained

1,364,314

3,518,023

6.03.02

Borrowings and debentures paid

(2,199,250)

(3,515,017)

6.03.03

Payments of dividend and interest on shareholders’ equity

(14,989)

(425)

6.03.05

Business combination payment

(16,191)

(32,058)

6.05

Increase (decrease) in cash and cash equivalents

(218,019)

(653,725)

6.05.01

Cash and cash equivalents at beginning of period

5,682,802

4,357,455

6.05.02

Cash and cash equivalents at end of period

5,464,783

3,703,730

 

 

 

24

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Consolidated Financial Statements

Statement of Changes in Equity – from January 1, 2016 to June 30, 2016

 

(in thousands of Brazilian reais – R$)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Code

Description

Capital

Capital Reserves, options and treasury shares

Profit Reserves

Retained earnings

Other comprehensive income

Shareholders’ Equity Total

Noncontrolling Shareholders’ Equity

Consolidated Shareholders’ Equity

5.01

Opening balance

5,348,312

468,082

1,672,481

-

185,320

7,674,195

2,455,943

10,130,138

5.03

Adjusted opening balances

5,348,312

468,082

1,672,481

-

185,320

7,674,195

2,455,943

10,130,138

5.04

Capital transactions within shareholders

392,972

-

(392,972)

1,756

-

1,756

(16,114)

(14,358)

5.04.01

Capital increase

392,972

-

(392,972)

-

-

-

-

-

5.04.09

Dividend proposal approved

-

-

-

-

-

-

(16,114)

(16,114)

5.04.10

Prescribed dividend

-

-

-

1,756

-

1,756

-

1,756

5.05

Total comprehensive income

-

-

-

531,160

(404,364)

126,796

(58,578)

68,218

5.05.01

Net income for the period

-

-

-

531,160

-

531,160

(58,578)

472,581

5.05.02

 Other comprehensive income

-

-

-

-

(404,364)

(404,364)

-

(404,363)

5.06

Internal changes of shareholders equity

-

-

109,356

(96,440)

(12,916)

-

(32)

(32)

5.06.04

Changes in statutory reserve in the period

-

-

-

-

-

-

(32)

(32)

5.06.06

Realization of deemed cost of property, plant and equipment

-

-

-

19,570

(19,570)

-

-

-

5.06.07

Tax on realization of deemed cost

-

-

-

(6,654)

6,654

-

-

-

5.06.08

Changes in statutory reserve in the period

-

-

109,356

(109,356)

-

-

-

-

5.07

Ending balance

5,741,284

468,082

1,388,865

436,476

(231,960)

7,802,747

2,381,219

10,183,966

 

 

25

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Consolidated Financial Statements

Statement of Changes in Equity – from January 1, 2015 to June 30, 2015

 

(in thousands of Brazilian reais – R$)

               
                   

Code

Description

Capital

Capital
Reserves,
options and
treasury shares

Profit Reserves

Retained earnings

Other comprehensive income

 

Noncontrolling Shareholders’ Equity

Consolidated Shareholders’ Equity

Shareholders´ equity

5.01

Opening balance

4,793,424

468,082

1,536,136

-

145,893

6,943,535

2,453,794

9,397,329

5.03

Adjusted opening balance

4,793,424

468,082

1,536,136

-

145,893

6,943,535

2,453,794

9,397,329

5.04

Capital transactions within shareholders

554,888

-

- 554,888

3,134

-

3,134

2,070

5,204

5.04.01

Capital increase

554,888

-

- 554,888

-

-

-

-

-

5.04.09

Dividend proposal approved

-

-

-

-

-

-

2,070

2,070

5.04.10

Prescribed dividend

-

-

-

3,134

-

3,134

-

3,134

5.05

Total comprehensive income

-

-

-

293,150

-

293,150

- 60,600

232,550

5.05.01

Net income

-

-

-

293,150

-

293,150

- 60,600

232,550

5.06

Internal changes of shareholders equity

-

-

88,447

- 75,260

- 13,187

-

- 7

- 7

5.06.04

Other changes in non-controlling shareholders

-

-

-

-

-

-

- 7

- 7

5.06.06

Realization of deemed cost of property, plant and equipment

-

-

-

19,980

- 19,980

-

-

-

5.06.07

Tax on realization of deemed cost

-

-

-

- 6,793

6,793

-

-

-

5.06.08

Changes in statutory reserve in the period

-

-

88,447

- 88,447

-

-

-

-

5.07

Ending balance

5,348,312

468,082

1,069,695

221,024

132,706

7,239,819

2,395,257

9,635,076

 

 

26

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Consolidated Interim Financial Statements

Statement of Value Added

 

(in thousands of Brazilian reais – R$)

 

 

 

 

 

 

Code

Description

Current Year

01/01/2016 to 06/30/2016

Previous Year

01/01/2015 to 06/30/2015

7.01

Revenues

15,115,473

16,920,299

7.01.01

Sales of goods, products and services

14,168,173

16,173,168

7.01.02

Other revenue

491,850

515,720

7.01.02.01

Revenue from construction of infrastructure distribution

491,850

515,720

7.01.03

Revenues related to the construction of own assets

551,315

293,875

7.01.04

Allowance for doubtful accounts

(95,865)

(62,464)

7.02

Inputs

(7,394,280)

(9,393,739)

7.02.01

Cost of sales

(5,767,084)

(7,981,950)

7.02.02

Material-Energy-Outsourced services-Other

(1,350,063)

(1,108,044)

7.02.04

Other

(277,133)

(303,745)

7.03

Gross added value

7,721,193

7,526,560

7.04

Retentions

(621,316)

(639,067)

7.04.01

Depreciation and amortization

(497,409)

(470,375)

7.04.02

Other

(123,907)

(168,692)

7.04.02.01

Intangible concession asset - amortization

(123,907)

(168,692)

7.05

Net added value generated

7,099,877

6,887,493

7.06

Added value received in transfer

969,569

706,255

7.06.01

Equity in subsidiaries

132,118

81,381

7.06.02

Financial income

837,451

624,874

7.07

Added Value to be Distributed

8,069,446

7,593,748

7.08

Distribution of Added Value

8,069,446

7,593,748

7.08.01

Personnel

488,074

447,113

7.08.01.01

Direct Remuneration

302,238

276,893

7.08.01.02

Benefits

159,835

147,992

7.08.01.03

Government severance indemnity fund for employees- F.G.T.S.

26,001

22,228

7.08.02

Taxes, Fees and Contributions

5,795,525

5,723,017

7.08.02.01

Federal

3,269,069

3,479,544

7.08.02.02

State

2,518,112

2,236,606

7.08.02.03

Municipal

8,344

6,867

7.08.03

Remuneration on third parties’ capital

1,313,266

1,191,068

7.08.03.01

Interest

1,283,562

1,164,734

7.08.03.02

Rental

29,704

26,334

7.08.04

Remuneration on own capital

472,581

232,550

7.08.04.03

Retained Earnings / Loss for the Period

472,581

232,550

 

 

27

 


 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

COMMENTS ON THE INDIVIDUAL PERFORMANCE

 

The comments on performance are expressed in thousands of Brazilian reais, unless otherwise indicated.

 

Analysis of Results

 

 

 

 

 

 

CPFL Energia (Parent Company)

 

The increase in net income in the quarter was R$ 135,631, compared with the same quarter of 2015 (R$ 259,811 in 2016 and R$ 124,180in 2015), primarily due to an increase in the equity income.

 

28

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 COMMENTS ON CONSOLIDATED PERFORMANCE

 

 

Consolidated

 

2nd Quarter

 

1st Semester

 

2016

 

2015

 

%

 

2016

 

2015

 

%

Operating revenues

7,161,756

 

9,053,011

 

-20.9%

 

14,660,022

 

16,688,888

 

-12.2%

Electricity sales to final consumers (*)

5,844,986

 

5,945,120

 

-1.7%

 

12,308,064

 

11,211,844

 

9.8%

Electricity sales to wholesaler´s

639,961

 

1,062,761

 

-39.8%

 

1,388,217

 

1,919,223

 

-27.7%

Revenue from construction of concession infrastructure

274,716

 

284,912

 

-3.6%

 

491,850

 

515,720

 

-4.6%

Other operating revenues (*)

864,071

 

864,647

 

-0.1%

 

1,666,123

 

1,457,947

 

14.3%

Sector financial asset and liability

(461,979)

 

895,571

 

-151.6%

 

(1,194,232)

 

1,584,155

 

-175.4%

Deductions from operating revenues

(2,745,673)

 

(3,890,462)

 

-29.4%

 

(5,994,551)

 

(6,236,271)

 

-3.9%

Net operating revenue

4,416,082

 

5,162,549

 

-14.5%

 

8,665,472

 

10,452,617

 

-17.1%

Cost of eletric energy

(2,664,546)

 

(3,611,688)

 

-26.2%

 

(5,192,567)

 

(7,209,539)

 

-28.0%

Electricity purchased for resale

(2,313,621)

 

(3,311,561)

 

-30.1%

 

(4,479,553)

 

(6,515,492)

 

-31.2%

Electricity network usage charges

(350,926)

 

(300,127)

 

16.9%

 

(713,014)

 

(694,047)

 

2.7%

Operating cost/expense

(1,230,694)

 

(1,247,292)

 

-1.3%

 

(2,376,267)

 

(2,298,654)

 

3.4%

Personnel

(267,200)

 

(236,425)

 

13.0%

 

(512,167)

 

(461,458)

 

11.0%

Employee pension plans

(13,913)

 

(16,344)

 

-14.9%

 

(27,825)

 

(32,689)

 

-14.9%

Materials

(39,271)

 

(34,946)

 

12.4%

 

(79,056)

 

(67,126)

 

17.8%

Outside services

(157,568)

 

(134,154)

 

17.5%

 

(306,789)

 

(270,019)

 

13.6%

Depreciation and amortization

(250,014)

 

(240,375)

 

4.0%

 

(496,095)

 

(469,607)

 

5.6%

Intangible of concession amortization

(62,020)

 

(83,992)

 

-26.2%

 

(123,907)

 

(168,693)

 

-26.5%

Costs related to infrastructure construction

(274,491)

 

(284,540)

 

-3.5%

 

(491,527)

 

(514,718)

 

-4.5%

Other

(166,217)

 

(216,515)

 

-23.2%

 

(338,902)

 

(314,342)

 

7.8%

Income from electric energy service

520,842

 

303,569

 

71.6%

 

1,096,638

 

944,423

 

16.1%

Financial income (expense)

(199,315)

 

(186,758)

 

6.7%

 

(430,963)

 

(553,487)

 

-22.1%

Income

401,522

 

329,493

 

21.9%

 

806,370

 

616,567

 

30.8%

Expense

(600,837)

 

(516,251)

 

16.4%

 

(1,237,333)

 

(1,170,054)

 

5.8%

Interest in subsidiaries, associates and joint ventures

68,638

 

64,257

 

6.8%

 

132,118

 

81,381

 

62.3%

Income before taxes

390,164

 

181,068

 

115.5%

 

797,793

 

472,318

 

68.9%

Social Contribution

(42,502)

 

(23,172)

 

83.4%

 

(89,668)

 

(64,635)

 

38.7%

Income Tax

(107,528)

 

(67,656)

 

58.9%

 

(235,544)

 

(175,133)

 

34.5%

Net income

240,135

 

90,240

 

166.1%

 

472,581

 

232,550

 

103.2%

                       

Net income attributable to the shareholders of the company

259,814

 

124,180

 

109.2%

 

531,160

 

293,150

 

81.2%

Net income/(loss) attributable to the non controlling interests

19,674

 

(33,940)

 

-158.0%

 

(58,578)

 

(60,600)

 

-3.3%

                       

EBITDA

901,659

 

692,477

 

30.2%

 

1,849,047

 

1,664,673

 

11.1%

                       

(*) The reclassification of revenue from network usage charge - TUSD was not taken into acount in presentation of the comments on consolidated perfomance.

                       
                       

Net income for the period and EBITDA reconciliation

 

 

 

 

 

 

 

 

 

 

 

Net income

240,135

 

90,240

     

472,581

 

232,550

 

 

Depreciation and amortization

312,034

 

324,367

     

620,002

 

638,301

 

 

Amortization of value-added of assets

145

 

284

     

290

 

568

 

 

Financial income (expense)

199,315

 

186,758

     

430,963

 

553,487

 

 

Social contribution

42,502

 

23,172

     

89,668

 

64,635

 

 

Income tax

107,528

 

67,656

     

235,544

 

175,133

 

 

EBITDA

901,659

 

692,477

     

1,849,047

 

1,664,673

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 Gross Operating Revenue

The Gross Operating Revenue in the 2nd quarter of 2016 was R$ 7,161,756, drop of 20.9% (R$ 1,891,256) compared with the same quarter of the previous year.        

The main factors in this change were:

 

·         Decrease of 1.7% (R$ 100,134) in the supply of electric energy, due to a decrease of 6.6% (R$ 415,544) in the average tariffs charged mainly as a result of the reduction in billing for tariff flags, which were largely "red" in the second quarter of 2015.  This effect was partially offset by (i) annual tariff adjustments, (ii) extraordinary tariff adjustment, and (iii) increase of 5.3% in the volume of energy sold (R$ 315,410);

·       Decrease of 39.8% (R$ 422,799) in the energy supplied, caused mainly by:

 

o    Decrease of 106.4% (R$ 443,216) in sales of current electric energy in the Electric Energy Commercialization Chamber (“CCEE”), due to the drop in the volume of energy traded in the spot market e and re-accounting for CCEE transactions in prior.

o    Increase of 1.2% (R$ 6,100) in sales to other concessionaires and licensees, mainly due to an increase of 11.4% (R$ 59,530) in the volume sold partially offset by a drop of 9.1% (R$ 53,430) in the average price.

o    Increase of 11.7% (R$ 14,317) for Furnas due the price increase.

·         Decrease of 151.6% (R$ 1,357,550) in sector financial assets and liabilities, mainly due to recognition of a sector financial liability in the 2nd quarter of 2016, as a result of the reduction in energy costs, CDE, Itaipu on lending and Overcontracting and an increase in amortization expense for the approved assets and liabilities.

Quantity of Energy Sold

In the 2nd quarter of 2016, 0.4% more energy was billed to captive consumers, including other licensees, than in the same quarter of the previous year.

The residential category, representing 39.5% of the total market supplied by the distributors, reported an increase of 4.2% in the 2nd quarter of 2016 in relation to the same period of the previous year. Besides the accumulated reduction of 4.2% in income levels in 12 months (May 2016), together with the possible effects of the decrease in consumption by customers due to the tariff increases from the 2nd quarter of 2015, the positive result is due to the natural growth of around 2.0% and the temperature in the quarter, which was more extreme than in the same period of the previous year.

The commercial category, which accounts for 21.5% of the total market supplied by the distributors, reported an increase of 0.4% in the 2nd quarter of 2016 in relation to the same period of the previous year. The result includes reclassification of the common areas of residential condominiums as commercial category, pursuant to Resolution 414/2010. Excluding the commercial category's performance, the effect would be a drop of 0.2%. In spite of the low basis, resulting from the possible effects of the decrease in consumption by customers due to the tariff increases perceived by customers from the second quarter of 2015, the performance of the main indexes, such as income levels and retail sales, with accumulated 12-month decreases of 4.2% and 6.1%, respectively, and consumer confidence, the result indicates a potential stabilization of the consumption level.

The industrial category, which accounts for 18.1% of the total market supplied by the distributors, reported a drop of 9.8% in the 2nd quarter of 2016 in relation to the same period of the previous year, as a direct consequence of the poor results of industrial activity in Brazil, which fell by 9.5%, year-to-date (May 2016). In spite of the decline in industrial production, CPFL Brasil's sales to customers in this category increased 13.7%, compared with the same period of the previous year. This performance reflects the marketing company's strategy of boosting energy sales to free and special consumers at a time when price conditions favor the migration of customers to the free market.

The other consumption categories (rural, public authorities, public lighting, utilities and licensees) accounted for 20.9% of the total market supplied by the distributors. These categories reported an increase of 3.5% in the 2nd quarter of 2016, compared with the same period of the previous year. The result is due to the increase in consumption by the following categories: (i) rural, due to low rainfall in the period, resulting in more irrigation in the rural area, and (ii) Licensees, mainly serving residential consumers, and (iii) public authorities.

30

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

The amount of energy sold and transported in the concession area dropped by 2.0% in comparison with the same period of the previous year, with impacts on both the supply billed (captive market) and collection of TUSD (free market). The variation per category is an increase of 4.2% in the residential, 1.0% in the commercial, drop of 9.3% in the industrial and an increase 3.7% in the other consumption categories.

Tariffs

In the 2nd quarter of 2016 the supply tariffs increased by an average of 6.6%. This was largely due to the effect of the distributors' annual tariff adjustment and periodic tariff review, as follows:

 

   

Periodic tariff review ("RTP") and
Annual tariff adjustment ("RTA")

       

2016

 

2015

Distributor

 

Month

 

RTA / RTP

 

Average effect perceived by consumers (a)

 

RTA / RTP

 

Average effect perceived by consumers (a)

CPFL Paulista

 

April (b)

 

9.89%

 

7.55%

 

41.45%

 

4.67% (c)

CPFL Piratininga

 

October

 

(b)

 

(b)

 

56.29%

 

21.11% (c)

RGE

 

June

 

-1.48%

 

-7.51%

 

33.48%

 

-3.76% (c)

CPFL Santa Cruz

 

March

 

22.51%

 

7.15%

 

34.68%

 

27.96%

CPFL Leste Paulista

 

March

 

21.04%

 

13.32%

 

20.80%

 

24.89%

CPFL Jaguari

 

March

 

29.46%

 

13.25%

 

38.46%

 

45.70%

CPFL Sul Paulista

 

March

 

24.35%

 

12.82%

 

24.88%

 

28.38%

CPFL Mococa

 

March

 

16.57%

 

9.02%

 

23.34%

 

29.28%

 

a.     Represents the average effect perceived by consumers, as a result of elimination from the tariff base of financial components added in the annual adjustment for the previous year (Information not reviewed by the independent auditors).

b.     The related annual tariff increases for 2016 have not yet been made

c.     Perception of consumers in comparison to the extraordinary tariff review of March 2015

 

 

Deductions from Operating Revenue

Deductions from Operating Revenue in the 2nd quarter of 2016 amounted to R$ 2,745,673, decrease of 29.4% (R$ 1,144,789) on the same quarter of 2015, largely due to:

·         Reduction of 21.0% (R$ 165,103) in PIS and COFINS, largely due to the decrease in the calculation base for these taxes (energy provision, energy supply, sector assets and liabilities and other income);

·       Decrease of 1.6% (R$ 19,236) in ICMS, largely as a result of the decrease in the supply billed;

·       Decrease of 50.8% (R$ 960,943) in sector charges, mainly caused by a decrease in the (i) accounting of the effects of the tariff flag and others (R$ 657,868) and (ii) Energy Development Account - CDE (R$ 305,302).

 

Cost of Electric Energy

The cost of electric energy in the quarter totaled R$ 2,664,546, drop puff 26.2% (R$ 947,142) on the same period of the previous year, mainly due to:

·       Decrease of 30.1% (R$ 997,940) in electric energy purchased for resale, due to:

o   drop of 32.7% (R$ 876,232) in the average price due to the reduction in the settlement price (“PLD”);

o   decrease in the effect of the difference between the energy generated and the physical guarantee (GSF - Generation Scaling Factor), valued at the settlement price “PLD” of Ceran, CPFL  Renováveis and Jaguari Geração (R$ 67,206);

31

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

o   decrease of 24.3% (R$ 161,640) in energy purchased from Itaipu, mainly due to a drop in the tariff; partially offset by

o   increase of  3.3% (R$ 85,471) in energy purchased; and

o   increase of R$ 21,667 in cost due to the decrease in gains from the strategy of seasonality of the physical guarantee.

·         Increase of 16.9% (R$ 50,799) in transmission and distribution network usage charges, mainly due to an increase of R$ 70,829 in Reserve Energy Charges, partially offset by a  decrease of R$ 18,376 in Basic network charges.

 

Costs and Expenses

Not considering the costs related to infrastructure construction, operating costs and expenses in the quarter amounted to R$ 956,203, down 0.7% (R$ 6,551) on the same period of the previous year. This was mainly due to:

·         Personnel: increase of 13% (R$ 30,773), mainly due to the effects of the collective agreement and increase in the workforce;

·         Material: increase of 12.4% (R$ 4,325) mainly as a result of replacement of line and grid maintenance materials;

·         Third party services: increase of  17.5% (R$ 23,414), mainly for (i) maintenance of the electrical system, machinery and equipment (R$ 11,500), (ii) readout/invoice delivery (R$ 4,145), (iii) tree trimming (R$ 3,691) and (iv) recovery of default losses (R$ 2,340);

·         Depreciation and Amortization: an increase of 4.0% (R$ 9,639), mainly due to (i) increase of R$ 5,628 for the subsidiary CPFL Renováveis mainly due to the  companies that started operations in the period and (ii) increase of R$ 2,936 in amortization of intangible distribution infrastructure asset, mainly due to additions to the intangible assets base in the period;

·         Intangible of concession amortization: decrease of 26.2% (R$ 21,972) mainly due to (i) discontinuance of the concessions of the subsidiaries CPFL Santa Cruz, CPFL Leste Paulista, CPFL Jaguari, CPFL Sul Paulista and CPFL Mococa, and (ii) the change to the straight-line method of the amortization criterion for the remaining term of the concessions, from January 1, 2016, in compliance with IAS 16/CPC 27 and IAS 38/CPC 04 (R1);    

·         Other Expenses: decrease of 23.2% (R$ 50,298), mainly due to the decrease in legal and judicial (R$ 70,379), partially offset by an increase in (i) allowance for doubtful accounts expenses (R$ 8,626) and (ii) fine for financial ratios and rates (R$ 6,149).

 

Financial Income (Expense)

The Net Financial Expense in the quarter was R$ 199,315, compared with R$ 186,758 in the same period of 2015, increase of 6.7% (R$ 12,557) in net expense. This variation is mainly due to:

·         Increase of 21.9% (R$ 72,029) in financial income, mainly due to increase of (i) income from financial investments (R$ 68,687), (ii) gain with the mark to market of derivatives (zero cost collar)  (R$ 31,845), (iii) adjustment for inflation of tax credits (R$ 9,740) and (iv) late payment interest and fines (R$ 7,363)  partially offset by decreases in (i) adjustments to the sector financial asset (R$ 26,051) and (ii) adjustment of expected cash flow from the financial asset of concession (R$ 10,316).

·         Increase of 16.4% (R$ 84,586) in financial expense, mainly due to increase in (i) debt charges and adjustment for inflation and exchange rate change resulting from the increase in the indexes (R$ 108,199) and (ii) adjustments to the sector financial liability (R$ 16,153), partially offset by (iii) decrease in the exchange variation on energy purchased from Itaipu (R$ 15,176), and (iv) increase in capitalized interest (R$ 13,775).

 

32

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Interest in subsidiaries, associates and joint ventures

Changes in consolidated equity income relate to income from equity in joint ventures, as shown below:

  

 

 

2nd quarter 2016

 

2nd quarter 2015

Epasa

 

17,696

 

32,836

Baesa

 

1,014

 

2,693

Enercan

 

30,376

 

18,325

Chapecoense

 

19,697

 

10,687

Amortization of value-added of assets

 

(145)

 

(284)

Total

 

68,638

 

64,257

 

 

·         Epasa: decrease of  R$ 15,140, largely due to (i) the reduction in energy supply revenue due to the drop in energy generation as a result of ONS decisions, and a reduction in variable income due to a drop in the cost of fuel oil purchases (R$ 51,293); (ii) a decrease in fuel oil purchases due to lower energy generation and the drop in price (R$ 30,384).

 

·         Chapecoense/Enercan: increase of R$ 21,061, largely due to a drop in the cost of energy purchased resulting from reductions of the GSF factor, and mainly in the PLD price (R$ 15,944).

 

Social Contribution and Income Tax

Taxes on income in the 2nd quarter of 2016 were R$ 150,029, increase of 65.2% (R$ 59,201) in relation to the expense and recorded in the same quarter of 2015, primarily due to the effects of changes in income before taxes. 

 

Net Income and EBITDA

As a result of the above factors, net income for the quarter was R$ 240,135, 166.1% (R$ 149,895) higher than the same period of 2015.

EBITDA (net income excluding the effects of depreciation, amortization, financial income (expense), social contribution and income tax) for the 2nd quarter of 2016 was R$ 901,659, or 30.2% (R$ 209,182) higher than the same quarter of 2015.

 

 

 

33

 


 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

COMMENTS ON THE PERFORMANCE OF SUBSIDIARIES/ASSOCIATES

 

Subsidiary/Associate: Companhia Paulista de Força e Luz - CPFL

The subsidiary Companhia Paulista de Força e Luz - CPFL is a publicly quoted corporation, and its individual comments on performance are provided in its Interim Financial Statements - ITR, at June 30, 2016, filed with the CVM – Comissão de Valores Mobiliários.

 

Subsidiary/Associate: CPFL Geração de Energia S.A.

The subsidiary CPFL Geração de Energia S/A is a publicly quoted corporation, and its individual and consolidated comments on performance are provided in its Interim Financial Statements - ITR, at June 30, 2016, filed with the CVM – Comissão de Valores Mobiliários.

 

Subsidiary/Associate: Companhia Piratininga de Força e Luz

The subsidiary Companhia Piratininga de Força e Luz is a publicly quoted corporation, and its individual comments on performance are provided in its Interim Financial Statements - ITR, at June 30, 2016, filed with the CVM – Comissão de Valores Mobiliários.

 

Subsidiary/Associate: Rio Grande Energia S.A.

The subsidiary Rio Grande Energia S/A is a publicly quoted corporation, and its individual comments on performance are provided in its Interim Financial Statements - ITR, at June 30, 2016, filed with the CVM – Comissão de Valores Mobiliários.

 

34

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

Subsidiary/Associate: CPFL Comercialização Brasil S.A.

 

 

Consolidated

 

2nd Quarter

 

1st Semester

 

2016

 

2015

 

%

 

2016

 

2015

 

%

Operating revenues

549,112

 

505,252

 

8.7%

 

1,037,500

 

980,906

 

5.8%

Electricity sales to final consumers

338,601

 

284,169

 

19.2%

 

654,370

 

560,424

 

16.8%

Electricity sales to wholesaler´s

184,058

 

221,075

 

-16.7%

 

356,647

 

420,473

 

-15.2%

Other operating revenues

26,453

 

8

 

323606.5%

 

26,482

 

8

 

323972.0%

Deductions from operating revenues

(64,157)

 

(59,011)

 

8.7%

 

(121,443)

 

(120,601)

 

0.7%

Net operating revenue

484,955

 

446,240

 

8.7%

 

916,056

 

860,305

 

6.5%

Cost of eletric energy

(443,022)

 

(394,133)

 

12.4%

 

(849,139)

 

(780,199)

 

8.8%

Electricity purchased for resale

(443,022)

 

(394,133)

 

12.4%

 

(849,140)

 

(780,198)

 

8.8%

Operating cost/expense

(11,780)

 

(9,572)

 

23.1%

 

(21,457)

 

(19,208)

 

11.7%

Personnel

(7,261)

 

(5,970)

 

21.6%

 

(12,752)

 

(11,545)

 

10.5%

Materials

(65)

 

(49)

 

33.6%

 

(126)

 

(90)

 

40.2%

Outside services

(1,679)

 

(1,369)

 

22.6%

 

(3,203)

 

(2,883)

 

11.1%

Depreciation and amortization

(960)

 

(1,214)

 

-20.9%

 

(1,929)

 

(2,362)

 

-18.4%

Other

(1,816)

 

(970)

 

87.2%

 

(3,447)

 

(2,329)

 

48.0%

Income from electric energy service

30,153

 

42,535

 

-29.1%

 

45,461

 

60,898

 

-25.3%

Financial income (expense)

2,122

 

(763)

 

-378.0%

 

3,477

 

3,764

 

-7.6%

Income

8,169

 

8,583

 

-4.8%

 

17,824

 

20,666

 

-13.7%

Expense

(6,047)

 

(9,346)

 

-35.3%

 

(14,347)

 

(16,902)

 

-15.1%

Income before taxes

32,275

 

41,772

 

-22.7%

 

48,938

 

64,662

 

-24.3%

Social contribution

(2,755)

 

(3,613)

 

-23.7%

 

(4,255)

 

(5,693)

 

-25.3%

Income tax

(7,629)

 

(10,050)

 

-24.1%

 

(11,766)

 

(15,910)

 

-26.0%

Net income

21,891

 

28,109

 

-22.1%

 

32,916

 

43,059

 

-23.6%

                       
                       

EBITDA

31,113

 

43,749

 

-28.9%

 

47,389

 

63,260

 

-25.1%

                       
                       

Net income for the period and EBITDA (*) reconciliation

 

 

 

 

 

 

 

 

 

 

 

Net income

21,891

 

28,109

     

32,916

 

43,059

 

 

Depreciation and amortization

960

 

1,214

     

1,929

 

2,362

 

 

Financial income (expense)

(2,122)

 

763

     

(3,477)

 

(3,764)

 

 

Social contribution

2,755

 

3,613

     

4,255

 

5,693

 

 

Income tax

7,629

 

10,050

     

11,766

 

15,910

 

 

EBITDA

31,113

 

43,749

     

47,389

 

63,260

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(*) Information not reviewed by the independent auditors

 

Gross Operating Revenue

Gross Revenue for the 2nd quarter of 2016 was R$ 549,112, up R$ 43,860 (8.7%) in relation to the same quarter of 2015, mainly due to: (i) increase of 208 GWh (R$ 54,432) in the volume of energy sold to free customers, partially offset by (ii) a drop in sales through bilateral supply contracts (R$ 16,093) and (ii) a decrease in gains on CCEE transactions (R$ 21,210), largely due to the drop in the average price (R$ 23,009).

Cost of Electric Energy

The cost of electric energy in the 2nd quarter of 2016 was R$ 443,022, up R$ 48,889 (12.4%) on the same quarter of 2015, mainly due to: (i) bilateral agreements: increase in volume of purchases (514 GWh - R$ 82,104) with a drop of 5% (R$ 17,869) in the average price; and (ii) CCEE: a decrease in the volume of purchases (39 GWh – R$ 15,898).

Financial income (expense)

The finance income (expense) determined in the 2nd quarter of 2016 was finance income of R$ 2,122, a drop of R$ 2,885 in relation to the same quarter of 2015, mainly due to (i) settlement of debentures in the first quarter of 2016 (R$ 7,890), partially offset by (ii) interest on debts (R$ 1,343) and (iii) interest of intercompany loans (R$ 2,033).

35

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Net Income for the period and EBITDA

Net income in the 2nd quarter of 2016 was R$ 21,891, down R$ 6,218 (22.1%) on the same quarter of 2015.

EBITDA (net Income before financial income (expense), income tax and social contribution, depreciation and amortization) for the 2nd quarter of 2016 was R$ 31,113, decrease of 28.9% when compared with the same quarter of 2015 (R$ 43,749) (not reviewed by the independent auditors). 

 

 

36

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

NOTES TO INTERIM FINANCIAL STATEMENTS

 

 

 

CPFL ENERGIA S.A.

NOTES TO THE INTERIM FINANCIAL STATEMENTS

FOR JUNE 30, 2016

(Amounts in thousands of Brazilian reais – R$, unless otherwise stated)

 

CPFL ENERGIA S.A.

Statement of Financial Position as of June 30, 2016 and December 31, 2015

(in thousands of Brazilian reais)

 

     

Parent company

 

Consolidated

ASSETS

Note

 

June 30,
2016

 

December 31,
2015

 

June 30,
2016

 

December 31,
2015

                   

CURRENT ASSETS

                 

Cash and cash equivalents

5

 

872,166

 

424,192

 

5,464,783

 

5,682,802

Consumers, concessionaires and licensees

6

 

-

 

-

 

3,444,243

 

3,174,918

Dividends and interest on capital

12

 

214,418

 

1,227,590

 

13,424

 

91,392

Securities

   

-

 

-

 

22,183

 

23,633

Taxes recoverable

7

 

76,233

 

72,885

 

517,302

 

475,211

Derivatives

33

 

-

 

70,153

 

560,057

 

627,493

Sector financial asset

8

 

-

 

-

 

645,648

 

1,464,019

Concession financial asset

10

 

-

 

-

 

9,846

 

9,630

Other receivables

11

 

1,256

 

942

 

625,097

 

959,553

TOTAL CURRENT ASSETS

   

1,164,073

 

1,795,763

 

11,302,583

 

12,508,652

                   

NONCURRENT ASSETS

                 

Consumers, concessionaires and licensees

6

 

-

 

-

 

131,118

 

128,946

Associates, subsidiaries and parent company

31

 

100,146

 

2,814

 

44,532

 

84,265

Escrow Deposits

21

 

723

 

630

 

495,527

 

1,227,527

Taxes recoverable

7

 

-

 

-

 

160,071

 

167,159

Sector financial assets

8

 

-

 

-

 

-

 

489,945

Derivatives

33

 

-

 

-

 

686,282

 

1,651,260

Deferred tax assets

9

 

168,369

 

140,389

 

495,045

 

334,886

Advance for future capital increase

12

 

16,020

 

52,680

 

-

 

-

Concession financial asset

10

 

-

 

-

 

4,002,959

 

3,597,474

Investments at cost

   

-

 

-

 

116,654

 

116,654

Other receivables

11

 

14,569

 

14,919

 

657,087

 

594,519

Investments

12

 

6,850,886

 

6,940,036

 

1,384,239

 

1,247,631

Property, plant and equipment

13

 

1,265

 

1,215

 

9,453,342

 

9,173,217

Intangible assets

14

 

24

 

24

 

9,020,793

 

9,210,338

TOTAL NONCURRENT ASSETS

   

7,152,002

 

7,152,706

 

26,647,651

 

28,023,819

                   

TOTAL ASSETS

   

8,316,075

 

8,948,469

 

37,950,234

 

40,532,471

 

The accompanying notes are an integral part of these interim financial statements.

 

 

37

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

 

CPFL ENERGIA S.A.

Statement of Financial Position as of June 30, 2016 and December 31, 2015

(in thousands of Brazilian reais)

     

Parent company

 

Consolidated

LIABILITIES AND SHAREHOLDERS' EQUITY

Note

 

June 30,
2016

 

December 31,
2015

 

June 30,
2016

 

December 31,
2015

                   

CURRENT LIABILITIES

                 

Trade payables

15

 

675

 

1,157

 

1,688,003

 

3,161,210

Interest on debts

16

 

3,891

 

38,057

 

89,789

 

118,267

Interest on debentures

17

 

-

 

-

 

228,398

 

232,227

Borrowings

16

 

162,896

 

935,196

 

2,180,986

 

2,831,654

Debentures

17

 

-

 

-

 

787,842

 

458,165

Private pension plan

18

 

-

 

-

 

4,268

 

802

Regulatory charges

19

 

-

 

-

 

319,311

 

852,017

Taxes, fees and contributions

20

 

13,772

 

747

 

746,067

 

653,342

Dividends and interest on capital payable

24

 

210,710

 

212,531

 

222,937

 

221,855

Estimated payroll

   

-

 

-

 

123,203

 

79,924

Derivatives

33

 

43,303

 

981

 

48,536

 

981

Sector financial liability

8

 

-

 

-

 

42,510

 

-

Use of public asset

22

 

-

 

-

 

9,941

 

9,457

Other payables

23

 

19,369

 

18,041

 

850,851

 

904,971

TOTAL CURRENT LIABILITIES

   

454,616

 

1,206,708

 

7,342,643

 

9,524,873

                   

NONCURRENT LIABILITIES

                 

Trade payables

15

 

-

 

-

 

633

 

633

Interest on debts

16

 

-

 

-

 

155,296

 

120,659

Interest on debentures

17

 

-

 

-

 

22,528

 

16,487

Borrowings

16

 

-

 

-

 

10,947,188

 

11,592,206

Debentures

17

 

-

 

-

 

5,622,996

 

6,363,552

Private pension plan

18

 

-

 

-

 

861,304

 

474,318

Deferred tax liabilities

9

 

-

 

-

 

1,363,006

 

1,432,594

Provision for tax, civil and labor risks

21

 

860

 

1,635

 

618,034

 

569,534

Derivatives

33

 

-

 

-

 

83,031

 

33,205

Sector financial liability

8

 

-

 

-

 

473,100

 

-

Use of public asset

22

 

-

 

-

 

86,152

 

83,124

Provision for equity interest losses

12

 

28,233

 

33,969

 

-

 

-

Other payables

23

 

29,619

 

31,961

 

190,359

 

191,148

TOTAL NONCURRENT LIABILITIES

   

58,711

 

67,565

 

20,423,625

 

20,877,460

                   

EQUITY

24

               

Issued capital

   

5,741,284

 

5,348,312

 

5,741,284

 

5,348,312

Capital reserves

   

468,082

 

468,082

 

468,082

 

468,082

Legal reserve

   

694,058

 

694,058

 

694,058

 

694,058

Statutory reserve - working capital improvement

   

-

 

392,972

 

-

 

392,972

Statutory reserve - concession financial asset

   

694,806

 

585,451

 

694,806

 

585,451

Accumulated comprehensive income

   

(231,958)

 

185,321

 

(231,958)

 

185,321

Retained earnings

   

436,476

 

-

 

436,476

 

-

     

7,802,748

 

7,674,196

 

7,802,748

 

7,674,196

Equity attributable to noncontrolling interests

   

-

 

-

 

2,381,218

 

2,455,942

TOTAL EQUITY

   

7,802,748

 

7,674,196

 

10,183,966

 

10,130,138

                   

TOTAL LIABILITIES AND EQUITY

   

8,316,075

 

8,948,469

 

37,950,234

 

40,532,471

 

 

The accompanying notes are an integral part of these interim financial statements.

 

38

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

CPFL ENERGIA S.A.

Statement of income for the periods ended on June 30, 2016 and 2015

(in thousands of Brazilian reais, except for earnings per share)

     

Parent company

 

Consolidated

     

2016

 

2015

 

2016

 

2015

 

Note

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

Net operating revenue

26

 

-

 

1,713

 

1,156

 

1,156

 

4,416,082

 

8,665,472

 

5,162,549

 

10,452,617

Cost of electric energy services

                                 

Cost of electric energy

27

 

-

 

-

 

-

 

-

 

(2,664,546)

 

(5,192,567)

 

(3,611,688)

 

(7,209,539)

Operating cost

28

 

-

 

-

 

-

 

-

 

(536,398)

 

(1,060,632)

 

(468,623)

 

(916,725)

Services rendered to third parties

28

 

-

 

-

 

-

 

-

 

(275,032)

 

(492,568)

 

(285,125)

 

(515,787)

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross operating income

   

-

 

1,713

 

1,156

 

1,156

 

940,106

 

1,919,705

 

797,113

 

1,810,566

Operating expenses

28

                               

Sales expenses

   

-

 

-

 

-

 

-

 

(136,739)

 

(264,096)

 

(129,177)

 

(235,396)

General and administrative expenses

   

(12,898)

 

(20,942)

 

(7,297)

 

(15,261)

 

(210,219)

 

(415,128)

 

(256,570)

 

(434,710)

Other operating expense

   

-

 

-

 

-

 

-

 

(72,306)

 

(143,843)

 

(107,798)

 

(196,036)

Income from electric energy service

   

(12,898)

 

(19,229)

 

(6,141)

 

(14,105)

 

520,842

 

1,096,638

 

303,569

 

944,423

                                   

Equity in subsidiaries

12

 

264,976

 

546,811

 

148,643

 

339,919

 

68,638

 

132,118

 

64,257

 

81,381

Finance income (expense)

29

                               

Income

   

27,225

 

36,386

 

7,195

 

25,576

 

401,522

 

806,370

 

329,493

 

616,567

Expense

   

(12,025)

 

(31,626)

 

(15,093)

 

(47,521)

 

(600,837)

 

(1,237,333)

 

(516,251)

 

(1,170,054)

     

15,200

 

4,760

 

(7,898)

 

(21,946)

 

(199,315)

 

(430,963)

 

(186,758)

 

(553,487)

Income before taxes

   

267,278

 

532,342

 

134,605

 

303,869

 

390,164

 

797,793

 

181,068

 

472,318

Social contribution

9

 

(1,649)

 

318

 

(1,386)

 

(1,445)

 

(42,502)

 

(89,668)

 

(23,172)

 

(64,635)

Income tax

9

 

(5,818)

 

(1,500)

 

(9,039)

 

(9,274)

 

(107,528)

 

(235,544)

 

(67,656)

 

(175,133)

     

(7,467)

 

(1,182)

 

(10,425)

 

(10,719)

 

(150,029)

 

(325,211)

 

(90,828)

 

(239,768)

                                   

Net income

   

259,811

 

531,160

 

124,180

 

293,150

 

240,135

 

472,581

 

90,240

 

232,550

                                   

Net income (loss) attributable to controlling shareholders

                   

259,811

 

531,160

 

124,180

 

293,150

Net income (loss) attributable to noncontrolling shareholders

                   

(19,676)

 

(58,578)

 

(33,940)

 

(60,600)

Earnings per share attributable to controlling shareholders - basic - R$

25

 

0.26

 

0.52

 

0.12

 

0.29

 

0.26

 

0.52

 

0.12

 

0.29

Earnings per share attributable to controlling shareholders - diluted - R$

25

 

0.26

 

0.52

 

0.12

 

0.29

 

0.26

 

0.52

 

0.12

 

0.29

 

 

The accompanying notes are an integral part of these interim financial statements.

 

39

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

 

 

CPFL Energia S.A.

 

Statement of comprehensive income for the periods ended on June 30, 2016 and 2015

(In thousands of Brazilian reais – R$)

   

Parent company

   

2016

 

2015

   

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

Net income

 

259,811

 

531,160

 

124,180

 

293,150

                 

Other comprehensive income:

               

Items that will not be reclassified subsequently to profit or loss:

               

Equity on comprehensive income of subsidiaries

 

(403,036)

 

(404,363)

 

-

 

-

                 

Comprehensive income of the period- parent company

 

(143,225)

 

126,797

 

124,180

 

293,150

                 
   

Consolidated

   

2016

 

2015

   

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

Net income

 

240,135

 

472,581

 

90,240

 

232,550

                 

Other comprehensive income:

               

Items that will not be reclassified subsequently to profit or loss:

               

- Actuarial gain/(loss)

 

(403,036)

 

(404,363)

 

-

 

-

                 

Comprehensive income of the period - consolidated

 

(162,901)

 

68,218

 

90,240

 

232,550

Comprehensive income attributable to controlling shareholders

 

(143,225)

 

126,797

 

124,180

 

293,150

Comprehensive income attributable to non controlling shareholders

 

(19,676)

 

(58,578)

 

(33,940)

 

(60,600)

 

The accompanying notes are an integral part of these interim financial statements.

 

 

40

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

 

CPFL Energia S.A.

Statement of changes in shareholders' equity for the period ended on June 30, 2016

(In thousands of Brazilian reais – R$)

         

Profit reserves

 

Accumulated comprehensive

 income

         

Net equity attributable to noncontrolling shareholders

 
         

 

 

Statutory reserve

 

 

 

 

         

 

 

 

   
 

Issued capital

 

Capital reserves

 

Legal reserve

 

Concession financial asset

 

Working capital improvement

 

Deemed Cost

 

Post-employment benefit obligation

 

Retained earnings

 

Total

 

Accumulated comprehensive income

 

Other equity

Total Shareholders' equity

Balance at December 31, 2015

5,348,312

 

468,082

 

694,058

 

585,451

 

392,972

 

457,491

 

(272,171)

 

-

 

7,674,196

 

15,320

 

2,440,623

 

10,130,138

                                               

Total comprehensive income

-

 

-

 

-

 

-

 

-

 

-

 

(404,363)

 

531,160

 

126,797

 

-

 

(58,578)

 

68,218

Net income for the period

-

 

-

 

-

 

-

 

-

 

-

 

-

 

531,160

 

531,160

 

-

 

(58,578)

 

472,581

Other comprehensive income: actuarial gain (loss)

-

 

-

 

-

 

-

 

-

 

-

 

(404,363)

 

-

 

(404,363)

 

-

 

-

 

(404,363)

                                               

Internal changes of shareholders' equity

-

 

-

 

-

 

109,356

 

-

 

(12,916)

 

-

 

(96,440)

 

-

 

(874)

 

843

 

(31)

Realization of deemed cost of fixed assets

-

 

-

 

-

 

-

 

-

 

(19,570)

 

-

 

19,570

 

-

 

(1,324)

 

1,324

 

-

Tax on deemed cost realization

-

 

-

 

-

 

-

 

-

 

6,654

 

-

 

(6,654)

 

-

 

450

 

(450)

 

-

Changes in statutory reserve for the period

-

 

-

 

-

 

109,356

 

-

 

-

 

-

 

(109,356)

 

-

 

-

 

-

 

-

Other changes in non-controlling shareholders

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(31)

 

(31)

                                               

Capital transactions with the shareholders

392,972

 

-

 

-

 

-

 

(392,972)

 

-

 

-

 

1,756

 

1,756

 

-

 

(16,114)

 

(14,359)

Capital increase

392,972

 

-

 

-

 

-

 

(392,972)

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Prescribed dividend

-

 

-

 

-

 

-

 

-

 

-

 

-

 

1,756

 

1,756

 

-

 

-

 

1,756

Dividend proposal approved

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(16,114)

 

(16,114)

                                               

Balance at June 30, 2016

5,741,284

 

468,082

 

694,058

 

694,806

 

-

 

444,575

 

(676,534)

 

436,476

 

7,802,748

 

14,446

 

2,366,773

 

10,183,966

 

 

CPFL Energia S.A.

Statement of changes in shareholders' equity for the period ended on June 30, 2015

(In thousands of Brazilian reais – R$)

         

Profit reserves

 

Accumulated comprehensive income

         

Net equity attributable to noncontrolling shareholders

 
         

 

 

Statutory reserve

 

 

 

 

         

 

 

 

   
 

Issued capital

 

Capital reserves

 

Legal reserve

 

Concession financial asset

 

Working capital improvement

 

Deemed Cost

 

Post-employment benefit obligation

 

Retained earnings

 

Total

 

Accumulated comprehensive income

 

Other equity

Total Shareholders' equity

Balance at December 31, 2014

4,793,424

 

468,082

 

650,811

 

330,437

 

554,888

 

483,610

 

(337,718)

 

-

 

6,943,535

 

17,003

 

2,436,791

 

9,397,329

                                               

Total comprehensive income

-

 

-

 

-

 

-

 

-

 

-

 

-

 

293,150

 

293,150

 

-

 

(60,600)

 

232,550

Net income for the period

-

 

-

 

-

 

-

 

-

 

-

 

-

 

293,150

 

293,150

 

-

 

(60,600)

 

232,550

                                               

Internal changes of shareholders' equity

-

 

-

 

-

 

88,447

 

-

 

(13,187)

 

-

 

(75,260)

 

-

 

(809)

 

803

 

(6)

Realization of deemed cost of fixed assets

-

 

-

 

-

 

-

 

-

 

(19,980)

 

-

 

19,980

 

-

 

(1,226)

 

1,226

 

-

Tax on deemed cost realization

-

 

-

 

-

 

-

 

-

 

6,793

 

-

 

(6,793)

 

-

 

417

 

(417)

 

-

Changes in statutory reserve for the period

-

 

-

 

-

 

88,447

 

-

 

-

 

-

 

(88,447)

 

-

 

-

 

-

 

-

Other changes in non-controlling shareholders

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(6)

 

(6)

                                               

Capital transactions with the shareholders

554,888

 

-

 

-

 

-

 

(554,888)

 

-

 

-

 

3,135

 

3,135

 

-

 

2,067

 

5,202

Capital increase

554,888

 

-

 

-

 

-

 

(554,888)

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Prescribed dividend

-

 

-

 

-

 

-

 

-

 

-

 

-

 

3,135

 

3,135

 

-

 

-

 

3,135

Dividend proposal approved

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

2,067

 

2,067

                                               

Balance at June 30, 2015

5,348,312

 

468,082

 

650,811

 

418,884

 

-

 

470,423

 

(337,718)

 

221,024

 

7,239,819

 

16,194

 

2,379,061

 

9,635,076

 

The accompanying notes are an integral part of these interim financial statements.

 

41

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

 

CPFL Energia S/A

Statement of cash flow for the periods ended on June 30, 2016 and 2015

(In thousands of Brazilian reais – R$)

                 
   

Parent company

 

Consolidated

   

June 30,
2016

 

June 30,
2015

 

June 30,
2016

 

June 30,
2015

                 

Income, before income tax and social contribution

 

532,342

 

303,869

 

797,793

 

472,318

Adjustment to reconcile Income to cash provided by operating activities

               

Depreciation and amortization

 

102

 

80

 

620,002

 

638,300

Provision for tax, civil and labor risks

 

38

 

468

 

139,095

 

139,524

Allowance for doubtful accounts

 

-

 

-

 

95,865

 

62,466

Interest and monetary adjustment

 

23,321

 

45,331

 

848,205

 

902,089

Post-employment benefit loss (gain)

 

-

 

-

 

27,825

 

32,689

Interest in subsidiaries, associates and joint ventures

 

(546,811)

 

(339,919)

 

(132,118)

 

(81,381)

Loss (gain) on the write-off of noncurrent assets

 

-

 

-

 

19,982

 

27,466

Deferred taxes (PIS and COFINS)

 

-

 

-

 

(9,715)

 

3,368

Other

 

-

 

-

 

(330)

 

(2,463)

   

8,992

 

9,828

 

2,406,604

 

2,194,376

Decrease (increase) in operating assets

               

Consumers, concessionaires and licensees

 

-

 

-

 

(366,295)

 

(1,205,959)

Dividend and interest on equity received

 

1,289,907

 

607,349

 

75,161

 

16,517

Taxes recoverable

 

(122)

 

(5,144)

 

(26,185)

 

27,943

Escrow deposits

 

(72)

 

(32)

 

749,422

 

17,200

Sector financial asset

 

-

 

-

 

1,588,088

 

(663,333)

Resources provided by the Energy Development Account - CDE

 

-

 

-

 

229,359

 

(182,563)

Concession financial asset (transmission)

 

-

 

-

 

(11,754)

 

(27,707)

Other operating assets

 

301

 

131

 

45,542

 

(5,661)

                 

Increase (decrease) in operating liabilities

               

Trade payables

 

(482)

 

(212)

 

(1,473,207)

 

(107,234)

Other taxes and social contributions

 

1,959

 

5,742

 

(94,018)

 

175,330

Other liabilities with post-employment benefit obligation

 

-

 

-

 

(41,737)

 

(67,463)

Regulatory charges

 

-

 

-

 

(532,706)

 

894,282

Tax, civil and labor risks paid

 

(839)

 

(95)

 

(120,162)

 

(78,382)

Sector financial liability

 

-

 

-

 

276,163

 

(22,434)

Resources provided by the CDE - payable

 

-

 

-

 

(29,505)

 

52,247

Other operating liabilities

 

(1,013)

 

(4,082)

 

101,864

 

104,889

Cash flows provided by (used in) operations

 

1,298,631

 

613,485

 

2,776,634

 

1,122,048

Interests on borrowings and debentures paid

 

(40,657)

 

(36,858)

 

(801,508)

 

(764,585)

Income tax and social contribution paid

 

(18,096)

 

(1,628)

 

(363,460)

 

(188,348)

Net cash provided by (used in) operating activities

 

1,239,878

 

574,999

 

1,611,666

 

169,115

                 

Investing activities

               

Sale of interest in investees

 

-

 

-

 

-

 

10,454

Additions to property, plant and equipment

 

(219)

 

(268)

 

(517,272)

 

(287,750)

Financial investments, pledges, funds and tied deposits

 

(199)

 

-

 

(59,631)

 

(99,378)

Additions to intangible assets

 

-

 

(7)

 

(432,454)

 

(425,060)

Sale of noncurrent assets

 

-

 

-

 

789

 

8,268

Advance for future capital increase

 

(16,020)

 

(80)

 

-

 

-

Loans to subsidiaries and associates

 

(92,380)

 

(15,486)

 

44,999

 

103

   

 

 

 

 

 

 

 

Net cash flow provided by (used in) investing activities

 

(108,818)

 

(15,841)

 

(963,569)

 

(793,363)

                 

Financing activities

               

Borrowings and debentures obtained

 

-

 

494,383

 

1,364,314

 

3,518,023

Borrowings and debentures paid

 

(726,148)

 

(1,290,000)

 

(2,100,035)

 

(3,483,422)

Derivative instruments paid

 

43,128

 

-

 

(99,215)

 

(31,595)

Business combination payment

 

-

 

-

 

(16,191)

 

(32,058)

Dividend and interest on shareholders’ equity paid

 

(65)

 

(112)

 

(14,989)

 

(425)

Net cash flow provided by (used in) financing activities

 

(683,085)

 

(795,729)

 

(866,116)

 

(29,477)

Increase (decrease) in cash and cash equivalents

 

447,975

 

(236,571)

 

(218,019)

 

(653,725)

Opening balance of cash and cash equivalents

 

424,192

 

799,775

 

5,682,802

 

4,357,455

Closing balance of cash and cash equivalents

 

872,166

 

563,204

 

5,464,783

 

3,703,730

 

The accompanying notes are an integral part of these interim financial statements.

42

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

 

 

Added value statements of income for the semesters ended on June 30, 2016 and 2015

(in thousands of Brazilian Reais)

 

Parent company

 

Consolidated

 

1st semester 2016

 

1st semester 2015

 

1st semester 2016

 

1st semester 2015

1. Revenues

2,107

 

1,548

 

15,115,473

 

16,920,298

1.1 Operating revenues

1,887

 

1,274

 

14,168,173

 

16,173,168

1.2 Revenue related to the construction of own assets

219

 

274

 

551,316

 

293,875

1.3 Revenue from construction of concession infrastructure

-

 

-

 

491,850

 

515,720

1.4 Allowance of doubtful accounts

-

 

-

 

(95,865)

 

(62,466)

               

2. (-) Inputs

(5,061)

 

(5,193)

 

(7,394,280)

 

(9,393,739)

2.1 Electricity purchased for resale

-

 

-

 

(5,767,084)

 

(7,981,950)

2.2 Material

(257)

 

(288)

 

(751,778)

 

(524,126)

2.3 Outsourced services

(3,906)

 

(4,018)

 

(598,285)

 

(583,918)

2.4 Other

(898)

 

(887)

 

(277,132)

 

(303,745)

               

3. Gross added value (1 + 2)

(2,955)

 

(3,645)

 

7,721,193

 

7,526,559

               

4. Retentions

(102)

 

(80)

 

(621,316)

 

(639,067)

4.1 Depreciation and amortization

(102)

 

(80)

 

(497,409)

 

(470,375)

4.2 Amortization of intangible assets of concession

-

 

-

 

(123,907)

 

(168,691)

               

5. Net added value generated (3 + 4)

(3,057)

 

(3,725)

 

7,099,878

 

6,887,492

               

6. Added value received in transfer

586,200

 

371,261

 

969,569

 

706,256

6.1 Financial Income

39,389

 

31,342

 

837,451

 

624,875

6.2 Interest in subsidiaries, associates and joint ventures

546,811

 

339,919

 

132,118

 

81,381

               

7. Added value to be distributed (5 + 6)

583,143

 

367,537

 

8,069,446

 

7,593,748

               

8. Distribution of added value

             

8.1 Personnel and charges

13,644

 

8,583

 

488,073

 

447,114

8.1.1 Direct remuneration

5,527

 

4,537

 

302,238

 

276,893

8.1.2 Benefits

7,421

 

3,518

 

159,835

 

147,992

8.1.3 Government severance indemnity fund for employees - F.G.T.S.

696

 

528

 

26,001

 

22,229

8.2 Taxes, fees and contributions

7,126

 

21,500

 

5,795,525

 

5,723,017

8.2.1 Federal

7,107

 

21,489

 

3,269,069

 

3,479,544

8.2.2 Estate

19

 

11

 

2,518,112

 

2,236,606

8.2.3 Municipal

-

 

-

 

8,343

 

6,867

8.3 Lenders and lessors

31,213

 

44,304

 

1,313,266

 

1,191,068

8.3.1 Interest

31,188

 

44,233

 

1,283,562

 

1,164,734

8.3.2 Rental

25

 

71

 

29,704

 

26,333

8.4 Interest on capital

531,160

 

293,150

 

472,581

 

232,550

8.4.2 Retained earnings

531,160

 

293,150

 

472,581

 

232,550

 

583,143

 

367,537

 

8,069,446

 

7,593,748

 

 

The accompanying notes are an integral part of these interim financial statements.

 

 

43

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

( 1 ) OPERATIONS

 

CPFL Energia S.A. (“CPFL Energia” or “Company”) is a publicly-held corporation incorporated for the principal purpose of operating as a holding company, with equity interests in other companies primarily engaged in electric energy distribution, generation and commercialization activities in Brazil.

The Company’s registered office is located at Rua Gomes de Carvalho, 1510 - 14º andar - Sala 142 - Vila Olímpia - São Paulo - SP - Brazil.

The Company has direct and indirect interests in the following subsidiaries and joint ventures (information on the concession area, number of consumers, energy production capacity and related data are not reviewed by the independent auditors):

 

Energy distribution

 

Company type

 

Equity interest

 

Location (state)

 

Number of municipalities

 

Approximate number of consumers (in thousands)

 

Concession period

 

End of the concession

                             

Companhia Paulista de Força e Luz ("CPFL Paulista")

 

Publicly-held corporation

 

Direct
100%

 

Interior of São Paulo

 

234

 

4,267

 

30 years

 

November 2027

Companhia Piratininga de Força e Luz ("CPFL Piratininga")

 

Publicly-held corporation

 

Direct
100%

 

Interior and coast of São Paulo

 

27

 

1,684

 

30 years

 

October 2028

Rio Grande Energia S.A. ("RGE")

 

Publicly-held corporation

 

Direct
100%

 

Interior of Rio Grande do Sul

 

255

 

1,455

 

30 years

 

November 2027

Companhia Luz e Força Santa Cruz ("CPFL Santa Cruz")

 

Privately-held corporation

 

Direct
100%

 

Interior of São Paulo and Paraná

 

27

 

208

 

30 years

 

July 2045

Companhia Leste Paulista de Energia ("CPFL Leste Paulista")

 

Privately-held corporation

 

Direct
100%

 

Interior of São Paulo

 

7

 

57

 

30 years

 

July 2045

Companhia Jaguari de Energia ("CPFL Jaguari")

 

Privately-held corporation

 

Direct
100%

 

Interior of São Paulo

 

2

 

40

 

30 years

 

July 2045

Companhia Sul Paulista de Energia ("CPFL Sul Paulista")

 

Privately-held corporation

 

Direct
100%

 

Interior of São Paulo

 

5

 

84

 

30 years

 

July 2045

Companhia Luz e Força de Mococa ("CPFL Mococa")

 

Privately-held corporation

 

Direct
100%

 

Interior of São Paulo and Minas Gerais

 

4

 

46

 

30 years

 

July 2045

 

 

                   

Installed power (MW)

Energy generation
(conventional and renewable sources)

 

Company type

 

Equity interest

 

Location (state)

 

Number of plants / type of energy

 

Total

 

CPFL share

                         

CPFL Geração de Energia S.A.
("CPFL Geração")

 

Publicly-held corporation

 

Direct
100%

 

São Paulo and Goiás

 

1 Hydropower, 4 SHPs (a) e 1 Thermal

 

715

 

715

CERAN - Companhia Energética Rio das Antas
("CERAN")

 

Privately-held corporation

 

Indirect
65%

 

Rio Grande do Sul

 

3 Hydropower

 

360

 

234

Foz do Chapecó Energia S.A.
("Foz do Chapecó")

 

Privately-held corporation

 

Indirect
51%

 

Santa Catarina and
Rio Grande do Sul

 

1 Hydropower

 

855

 

436

Campos Novos Energia S.A.
("ENERCAN")

 

Privately-held corporation

 

Indirect
48,72%

 

Santa Catarina

 

1 Hydropower

 

880

 

429

BAESA - Energética Barra Grande S.A.
("BAESA")

 

Publicly-held corporation

 

Indirect
25,01%

 

Santa Catarina and
Rio Grande do Sul

 

1 Hydropower

 

690

 

173

Centrais Elétricas da Paraíba S.A.
("EPASA")

 

Privately-held corporation

 

Indirect
53.34%

 

Paraíba

 

2 Thermal

 

342

 

182

Paulista Lajeado Energia S.A.
("Paulista Lajeado")

 

Privately-held corporation

 

Indirect
59.93% (b)

 

Tocantins

 

1 Hydropower

 

903

 

63

CPFL Energias Renováveis S.A.
("CPFL Renováveis")

 

Publicly-held corporation

 

Indirect
51.61%

 

(c)

 

(c)

 

(c)

 

(c)

CPFL Centrais Geradoras Ltda ("CPFL Centrais Geradoras")

 

Limited liability company

 

Direct
100%

 

São Paulo

 

6 MHPs (d)

 

4

 

4

 

 

Energy commercialization

 

Company type

 

Core activity

 

Equity interest

CPFL Comercialização Brasil S.A. ("CPFL Brasil")

 

Privately-held corporation

 

Energy commercialization

 

Direct
100%

Clion Assessoria e Comercialização de Energia Elétrica Ltda.
("CPFL Meridional")

 

Limited liability company

 

Commercialization and provision of energy services

 

Indirect
100%

CPFL Comercialização Cone Sul S.A. ("CPFL Cone Sul")

 

Privately-held corporation

 

Energy commercialization

 

Indirect
100%

CPFL Planalto Ltda. ("CPFL Planalto")

 

Limited liability company

 

Energy commercialization

 

Direct
100%

CPFL Brasil Varejista S.A. ("CPFL Brasil Varejista")

 

Privately-held corporation

 

Energy commercialization

 

Indirect
100%

 

44

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

Provision of services

 

Company type

 

Core activity

 

Equity interest

CPFL Serviços, Equipamentos, Industria e Comércio S.A.
("CPFL Serviços")

 

Privately-held corporation

 

Manufacturing, commercialization, rental and maintenance of electro-mechanical equipment and service provision

 

Direct
100%

NECT Serviços Administrativos Ltda ("Nect")

 

Limited liability company

 

Provision of administrative services

 

Direct
100%

CPFL Atende Centro de Contatos e Atendimento Ltda. ("CPFL Atende")

 

Limited liability company

 

Provision of call center services

 

Direct
100%

CPFL Total Serviços Administrativos Ltda. ("CPFL Total")

 

Limited liability company

 

Collection services

 

Direct
100%

CPFL Eficiência Energética S.A ("CPFL ESCO")

 

Privately-held corporation

 

Energy efficiency management

 

Direct
100%

TI Nect Serviços de Informática Ltda. ("Authi")

 

Limited liability company

 

Provision of IT services

 

Direct
100%

CPFL GD S.A ("CPFL GD")

 

Privately-held corporation

 

Provision of maintenance services for energy generation companies

 

Indirect
100%

 

 

Others

 

Company type

 

Core activity

 

Equity interest

CPFL Jaguariúna Participações Ltda ("CPFL Jaguariuna")

 

Limited liability company

 

Holding company

 

Direct
100%

CPFL Jaguari de Geração de Energia Ltda ("Jaguari Geração")

 

Limited liability company

 

Holding company

 

Direct
100%

Chapecoense Geração S.A. ("Chapecoense") (e)

 

Privately-held corporation

 

Holding company

 

Indirect
51%

Sul Geradora Participações S.A. ("Sul Geradora")

 

Privately-held corporation

 

Holding company

 

Indirect
99.95%

CPFL Telecom S.A ("CPFL Telecom")

 

Privately-held corporation

 

Telecommunication services

 

Direct
100%

CPFL Transmissão Piracicaba S.A ("CPFL Transmissão Piracicaba")

 

Privately-held corporation

 

Energy transmission services

 

Indirect
100%

CPFL Transmissora Morro Agudo S.A ("CPFL Transmissão Morro Agudo")

 

Privately-held corporation

 

Energy transmission services

 

Indirect
100%

 

 

a)     SHP – Small Hydropower Plant.

 

b)    Paulista Lajeado has a 7% share in the installed power of Investco S.A. (5.94% interest in total capital).

 

c)     CPFL Renováveis has operations in the states of São Paulo, Minas Gerais, Mato Grosso, Santa Catarina, Ceará, Rio Grande do Norte, Paraná and Rio Grande do Sul and its main activities are: (i) holding investments in companies of the renewable energy segment; (ii) identification, development, and exploration of generation potentials; and (iii) sale of electric energy. At June 30, 2016, CPFL Renováveis had a portfolio of 126 projects with installed capacity of 2,909.2 MW (1,898.9 MW in operation), as follows:

 

·       Hydropower generation: 47 SHP’s (557.7MW) with 39 SHPs in operation (423 MW) and 8 SHPs under development (134.7MW);

·       Wind power generation: 70 projects (1,980.4 MW) with 37 projects in operation (1,104.8 MW) and 33 projects under construction/development (875.6 MW);

·       Biomass power generation: 8 plants in operation (370 MW); 

·       Solar power generation: 1 solar plant in operation (1.1 MW).

 

(d)   MHP – micro hydroelectric plant

(e)   The joint venture Chapecoense has as its direct subsidiary Foz do Chapecó and fully consolidates its interim financial statements. 

 

( 2 ) PRESENTATION OF THE INTERIM FINANCIAL STATEMENTS

2.1  Basis of presentation

These individual (parent company) and consolidated interim financial statements have been prepared and are presented in conformity with International Standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board – IASB, and also based on the standards issued by the Brazilian Securities Commission (Comissão de Valores Mobiliários – CVM) applicable to Quarterly Financial Information (ITR), in accordance with Technical Pronouncement CPC 21 (R1) - Demonstração Intermediária.

45

 


 
 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

The Company also follows the guidelines of the Accounting Manual of the Brazilian Electricity Sector and the standards laid down by the Brazilian Electricity Regulatory Agency (Agência Nacional de Energia Elétrica – ANEEL), when these do not conflict with the accounting practices adopted in Brazil and/or international Financial Reporting Standards. The accounting policies adopted in preparing these individuals and consolidated Interim Financial Statements are consistent with those adopted in December 31, 2015, except for the change of practice in relation to Intangible Assets (Note 3), and should be read together with those statements.

The consolidated interim Management states that all material information of the financial statements is disclosed and corresponds to what is used in the Company's management.

The financial statements were approved by Management and authorized for issue on August 1, 2016.

 

2.2  Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items recorded in the statements of income: i) derivative financial instruments measured at fair value, ii) financial instruments measured at fair value through profit or loss, and iii) available-for-sale financial assets measured at fair value. The classification of the fair value measurement in the level 1, 2 or 3 categories (depending on the degree of observance of the variables used) is presented in note 33 – Financial Instruments.

 

2.3  Use of estimates and judgments

The preparation of the interim financial statements requires the Company’s management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

By definition, the accounting estimates are rarely the same as the actual results. Accordingly, the Company’s management reviews the estimates and assumptions on an ongoing basis, based on previous experience and other relevant factors. Adjustments resulting from revisions to accounting estimates are recognized in the period in which the estimates are revised and applied on a prospective basis.

The main accounts that require the adoption of estimates and assumptions, which are subject to a greater degree of uncertainty and may result in a material adjustment if these estimates and assumptions suffer significant changes in subsequent periods, are:

·         Note 6 – Consumers, concessionaires and licensees;

·         Note 8 – Sector financial asset and liability;

·         Note 9 – Deferred tax assets and liabilities;

·         Note 10 – Concession financial asset;

·         Note 11 – Other receivables (Allowance for doubtful debts);

·         Note 13 – Property, plant and equipment and impairment;

·         Note 14 – Intangible assets and impairment;

·         Note 18 – Private pension plan;

·         Note 21 – Provision for tax, civil and labor risks and escrow deposits;

·         Note 23 – Other payables (Provision for socio environmental costs)

·         Note 26 – Net operating revenue;

·         Note 27 – Cost of electric energy; and

·         Note 33 – Financial instruments.

 

46

 


 
 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

2.4  Functional currency and presentation currency

The Company’s functional currency is the Brazilian Real, and the interim individual and consolidated financial statements are presented in thousands of reais.  Figures are rounded only after sum-up of the amounts.  Consequently, when summed up, the amounts stated in thousands of reais may not tally with the rounded totals.

2.5  Segment information

An operating segment is a component of the Company (i) that engages in operating activities from which it earns revenues and incurs expenses, (ii) whose operating results are regularly reviewed by Management to make decisions about resources to be allocated and assess the segment's performance, and (iii) for which individual financial information is available.

The Company’s management uses reports to make strategic decisions, segmenting the business into: (i) electric energy distribution activities (“Distribution”); (ii) electric energy generation from conventional sources activities (“Generation”); (iii) electric energy generation activities from renewable sources (“Renewables”); (iv) energy commercialization activities (“Commercialization”); (v) service activities (“Services”); and (vi) other activities not listed in the previous items.

The presentation of the operating segments includes items directly attributable to them, as well as any allocations required, including intangible assets.

2.6  Information on equity interests

The Company's equity interests in direct and indirect subsidiaries and joint ventures are described in note 1. Except for (i) the companies ENERCAN, BAESA, Chapecoense and EPASA, which use the equity method of accounting, and (ii) the investment stated at cost by the subsidiary Paulista Lajeado in Investco S.A., all other entities are fully consolidated.

At June 30, 2016 and December 31, 2015 and for the quarters and semesters ended in June 30, 2016 and 2015 noncontrolling interests recognized in the interim financial statements refer to the interests held by third parties in subsidiaries CERAN, Paulista Lajeado and CPFL Renováveis.

2.7  Statement of value added

The Company has prepared the individual and consolidated statements of value added (“DVA”) in conformity with technical pronouncement CPC 09 - Statement of Value Added, which are presented as an integral part of the financial statements in accordance with accounting practices adopted in Brazil and as supplementary information to the financial statements in accordance with IFRS, as the statement is neither provided for nor mandatory in accordance with IFRS.

 

 

( 3 ) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The significant accounting policies used in preparing the Company’s interim financial statements were prepared based on the same accounting policies as described in Notes 3.1 to 3.18, disclosed in financial statements for the year ended in December 31, 2015.

In relation to the accounting policies described in Note 3.5 of the December 31, 2015 financial statements, and in accordance with the changes to IAS 16/CPC 27 and IAS 38/CPC 04 (R1), until that date the portion derived from business combinations corresponding to the right to explore the concession was amortized over the remaining term of the respective exploration rights, on a straight-line basis or based on the net projected profit curve of the concessionaires, as applicable. From January 1, 2016 the Company will amortize the intangible concession assets prospectively on a straight-line basis over the remaining period of the concessions, in all cases. Accordingly, there was a reduction of R$ 12,301 in amortization of intangible concession assets expense for the first semester of 2016 (R$ 6,150 for the second quarter of 2016).

 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

( 4 ) DETERMINATION OF FAIR VALUES

 

A number of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the following methods. When applicable, further information on the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

Accordingly, the Company measures fair value in accordance with IFRS 13 / CPC 46, which defines the fair value as the price estimate for an unforced transaction for the sale of the asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions.

 

- Property, plant and equipment and intangible assets

The fair value of property, plant and equipment and intangible assets recognized as a result of a business combination is based on market values. The fair value of these assets is the estimated value for which an asset could be exchanged on the valuation date between knowledgeable interested parties in an unforced transaction between market participants on the measurement date. The fair value of items of property, plant and equipment is based on the market approach and cost approaches using quoted market prices for similar items when available and replacement cost when appropriate.

- Financial instruments

Financial instruments measured at fair values are valued based on quoted prices in an active market, or, if such prices were not available, assessed using pricing models, applied individually for each transaction, taking into consideration the future payment flows, based on the conditions contracted, discounted to present value at market interest rate curves, based on information obtained, when available, from the BM&FBOVESPA S.A – Bolsa de Valores, Mercadorias e Futuros (“BM&FBOVESPA”) and “Associação Brasileira das Entidades dos Mercados Financeiros e de Capitais – ANBIMA” (note 33), and also includes the debtor's credit rating.

Financial assets classified as available-for-sale refer to the right to compensation, to be paid by the Federal Government regarding the assets of the distribution concessionaires at the end of the concession agreement. The methodology adopted for marking these assets to fair value is based on the tariff review process for distributors. This review, conducted every four or five years according to each concessionaire, involves assessing the replacement price for the distribution infrastructure, in accordance with criteria established by the granting authority (“ANEEL”). This valuation basis is used for pricing the tariff, which is adjusted annually up to the next tariff review, based on the parameter of the main inflation indices.

Accordingly, at the time of the tariff review, each concessionaire adjusts the position of the financial asset base for compensation at the amounts ratified by the granting authority and uses the Extended Consumer Price Index (“IPCA”) as the best estimates for adjusting the original base to the fair value at subsequent dates, in accordance with the tariff review process.

 

( 5 ) CASH AND CASH EQUIVALENTS

 

 

Parent company

Consolidated

 

June 30, 2016

 

December 31, 2015

 

June 30, 2016

 

December 31, 2015

Bank balances

2,246

 

311

 

78,431

 

148,224

Short-term financial investments

869,920

 

423,881

 

5,386,352

 

5,534,578

Overnight investment (a)

-

 

-

 

33,363

 

26,914

Bank certificates of deposit (b)

-

 

-

 

2,200,696

 

1,255,666

Repurchase agreements secured on debentures (b)

-

 

-

 

33,756

 

433,693

Investment funds (c)

869,920

 

423,881

 

3,118,538

 

3,818,306

Total

872,166

 

424,192

 

5,464,783

 

5,682,802

 

a)   Current account balances, which earn daily interest by investment in repurchase agreements secured on debentures and interest of 15% of the variation in the Interbank Certificate of Deposit – (CDI).

48

 


 
 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

b)   Short-term investments in Bank Certificates of Deposit (CDB) and repurchase agreements secured on debentures with major financial institutions that operate in the Brazilian financial market, with daily liquidity, low credit risk and interest equivalent, on average, to 101.6% of the CDI.

c)   Exclusive Fund investments, with daily liquidity and interest equivalent, on average, of 100.5% of the CDI, subject to floating rates tied to the CDI linked to federal government bonds, CDBs, financial bills and secured debentures of major financial institutions, with low credit risk.

 

( 6 ) CONSUMERS, CONCESSIONAIRES AND LICENSEES

 

In the consolidated interim financial statements, the balance derives mainly from the supply of electric energy. The following table shows the breakdown at June 30, 2016 and December 31, 2015:

 

   

Consolidated

   

Amounts

 

Past due

 

Total

   

coming due

 

until 90 days

 

> 90 days

 

June 30, 2016

 

December 31, 2015

Current

                   

Consumer classes

                   

Residential

 

502,332

 

380,110

 

70,921

 

953,363

 

793,826

Industrial

 

266,028

 

81,275

 

68,852

 

416,155

 

365,420

Commercial

 

201,356

 

71,599

 

31,508

 

304,463

 

263,259

Rural

 

45,137

 

11,045

 

2,218

 

58,399

 

64,257

Public administration

 

54,905

 

17,837

 

3,835

 

76,577

 

79,953

Public lighting

 

46,441

 

9,246

 

4,091

 

59,778

 

78,204

Public utilities

 

64,042

 

20,929

 

5,727

 

90,698

 

80,706

Billed

 

1,180,241

 

592,041

 

187,152

 

1,959,433

 

1,725,625

Unbilled

 

1,002,162

 

-

 

-

 

1,002,162

 

881,307

Financing of consumers' debts

 

133,830

 

35,217

 

26,700

 

195,747

 

197,035

CCEE transactions

 

101,931

 

-

 

-

 

101,931

 

169,561

Concessionaires and licensees

 

317,383

 

13,918

 

5,097

 

336,398

 

331,105

Other

 

21,932

 

-

 

-

 

21,961

 

10,770

   

2,757,479

 

641,176

 

218,949

 

3,617,632

 

3,315,403

Allowance for doubtful debts

             

(173,389)

 

(140,485)

Total

             

3,444,243

 

3,174,918

                     

Non current

                   

Financing of consumers' debts

 

100,282

 

-

 

-

 

100,282

 

101,585

Free energy

 

5,088

 

-

 

-

 

5,088

 

4,768

CCEE transactions

 

41,301

 

-

 

-

 

41,301

 

41,301

   

146,671

 

-

 

-

 

146,671

 

147,654

Allowance for doubtful debts

             

(15,554)

 

(18,708)

Total

             

131,118

 

128,946

 

 

Allowance for doubtful debts

Movements in the allowance for doubtful debts are shown below:

 

 

Consumers, concessionaires and licensees

 

Other
receivables
(note 11)

 

Total

As of December 31, 2015

(159,193)

 

(14,441)

 

(173,634)

Allowance - recognition (reversal)

(129,709)

 

(1,313)

 

(131,022)

Recovery of revenue

34,938

 

219

 

35,157

Write-off of accrued receivables

65,021

 

2,520

 

67,541

As of June 30, 2016

(188,943)

 

(13,015)

 

(201,958)

           

Current

(173,389)

 

(13,015)

 

(186,404)

Noncurrent

(15,554)

 

-

 

(15,554)

 

49


 
 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

( 7 ) TAXES RECOVERABLE

 

 

Parent company

 

Consolidated

 

June 30, 2016

 

December 31, 2015

 

June 30, 2016

 

December 31, 2015

Current

             

Prepayments of social contribution - CSLL

-

 

-

 

4,251

 

35,019

Prepayments of income tax - IRPJ

-

 

2,171

 

17,119

 

76,920

Withholding income tax - IRRF on interest on capital

1,807

 

10,776

 

1,807

 

11,150

Income tax and social contribution to be offset

56,784

 

42,456

 

285,308

 

100,658

Withholding income tax - IRRF

17,344

 

16,996

 

76,344

 

125,392

State VAT - ICMS to be offset

-

 

-

 

73,673

 

63,450

Social Integration Program - PIS

49

 

74

 

8,212

 

8,543

Contribution for Social Security financing - COFINS

248

 

411

 

35,976

 

40,126

National Social Security Institute - INSS

-

 

-

 

9,178

 

12,660

Other

-

 

-

 

5,433

 

1,292

Total

76,233

 

72,885

 

517,302

 

475,211

               

Noncurrent

             

Social contribution to be offset - CSLL

-

 

-

 

53,798

 

57,439

Income tax to be offset - IRPJ

-

 

-

 

10,161

 

23,765

State VAT - ICMS to be offset

-

 

-

 

91,735

 

81,584

Social Integration Program - PIS

-

 

-

 

131

 

350

Contribution for Social Security Funding - COFINS

-

 

-

 

606

 

1,613

National Social Security Institute - INSS

-

 

-

 

1,874

 

-

Other

-

 

-

 

1,765

 

2,409

Total

-

 

-

 

160,071

 

167,159

 

 

( 8 )  SECTOR FINANCIAL ASSETS AND LIABILITIES

 

The breakdown and changes for the period in the balances of sector financial asset and liability are as follows:  

     

Operating revenue

 

Finance income or expense

 

Receipt

   
 

As of December 31, 2015

 

Constitution

 

Realization

 

Monetary adjustment

 

Tariff flag
(note 26)

 

As of June 30, 2016

Parcel "A"

                     

CVA (*)

                     

CDE (**)

517,232

 

(405,701)

 

(156,305)

 

12,916

 

-

 

(31,858)

Electric energy cost

6,091

 

(140,966)

 

(380,910)

 

(98,250)

 

(400,350)

 

(1,014,384)

ESS and EER (***)

(274,209)

 

14,431

 

240,685

 

(22,582)

 

(269,233)

 

(310,908)

Proinfa

(6,148)

 

41,540

 

(1,137)

 

2,183

 

-

 

36,439

Basic network charges

96,474

 

(6,708)

 

(65,309)

 

(2,560)

 

-

 

21,897

Pass-through from Itaipu

1,320,695

 

51,859

 

(220,407)

 

156,263

 

-

 

1,308,410

Transmission from Itaipu

15,469

 

4,632

 

(5,580)

 

1,105

 

-

 

15,626

Neutrality of industry charges

190,273

 

78,245

 

(39,832)

 

7,164

 

-

 

235,851

Overcontracting

144,705

 

(123,726)

 

(13,200)

 

(18,193)

 

(438)

 

(10,853)

Other financial components

(56,618)

 

(54,426)

 

(11,416)

 

2,280

 

-

 

(120,181)

                       

Total

1,953,964

 

(540,821)

 

(653,411)

 

40,327

 

(670,021)

 

130,039

                       

Current assets

1,464,019

                 

645,648

Noncurrent assets

489,945

                 

-

Current liabilities

-

                 

(42,510)

Noncurrent liabilities

-

                 

(473,100)

 

 

(*) Deferred tariff costs and gains variations from Parcel “A” items

(**) Energy Development Account – CDE

(***) System Service Charge (ESS) and Reserve Energy Charge (EER)

 

50

 


 
 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

The details of the nature of each sector financial asset and liability are provided in Note 8 to the December 31, 2015 financial statements.

 

( 9 ) DEFERRED TAX ASSETS AND LIABILITIES

9.1    Breakdown of tax credits and debits

 

Parent company

 

Consolidated

 

June 30, 2016

 

December 31, 2015

 

June 30, 2016

 

December 31, 2015

Social contribution credit/(debit)

             

Tax losses carryforwards

43,506

 

46,602

 

102,825

 

152,200

Tax benefit of merged goodwill

-

 

-

 

89,578

 

93,467

Nondeductible temporary differences

4,720

 

(5,918)

 

(434,878)

 

(547,066)

Subtotal

48,226

 

40,684

 

(242,474)

 

(301,399)

               

Income tax credit / (debit)

             

Tax losses carryforwards

107,031

 

116,438

 

280,327

 

417,600

Tax benefit of merged goodwill

-

 

-

 

309,704

 

323,421

Nondeductible temporary differences

13,112

 

(16,733)

 

(1,207,074)

 

(1,519,170)

Subtotal

120,143

 

99,705

 

(617,043)

 

(778,150)

               

PIS and COFINS credit/(debit)

             

Nondeductible temporary differences

-

 

-

 

(8,444)

 

(18,159)

               

Total

168,369

 

140,389

 

(867,961)

 

(1,097,708)

               

Total tax credit

168,369

 

140,389

 

495,045

 

334,886

Total tax debit

-

 

-

 

(1,363,006)

 

(1,432,594)

 

The estimate of recovery of the deferred tax credits recorded in noncurrent assets, derived from temporary non-deductible differences and tax benefit of the merged goodwill and tax loss carry forwards, is based on the projections of future profit or loss, approved by the Board of Directors and reviewed by the Audit Committee. A breakdown of which is provided in the financial statements of December 31, 2015. To reflect adequately the effective tax rate on net income, deferred tax credits on losses are registered monthly for the companies with positive projections, in accordance with the above-mentioned studies.

 

9.2    Tax benefit of merged goodwill

Refers to the tax credit calculated on the goodwill derived from the acquisition of subsidiaries, as shown in the following table, which had been incorporated and is recognized in accordance with CVM Instructions No. 319/1999 and No. 349/2001 and ICPC 09 (R2) - Individual Interim financial statements, Separate Interim financial statements, Consolidated Interim financial statements and Application of the Equity Method. The benefit is realized proportionally to the tax amortization of the merged goodwill that gave rise to it, during the remaining concessions period, as shown in note 14.

 

 

Consolidated

 

June 30, 2016

 

December 31, 2015

Social contribution

 

Income tax

 

Social contribution

 

Income tax

CPFL Paulista

52,810

 

146,695

 

55,123

 

153,119

CPFL Piratininga

12,768

 

43,820

 

13,286

 

45,597

RGE

24,000

 

101,954

 

25,058

 

106,324

CPFL Geração

-

 

17,235

 

-

 

18,380

Total

89,578

 

309,704

 

93,467

 

323,421

 

 

51

 


 
 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

9.3    Accumulated balances on nondeductible temporary differences

 

Consolidated

 

June 30, 2016

 

December 31, 2015

 

Social contribution

 

Income tax

 

PIS/COFINS

 

Social contribution

 

Income tax

 

PIS/COFINS

Nondeductible temporary differences

                     

Provision for tax, civil and labor risks

36,797

 

102,215

 

-

 

33,806

 

93,906

 

-

Private pension fund

1,521

 

4,225

 

-

 

1,867

 

5,185

 

-

Allowance for doubtful debts

18,390

 

51,084

 

-

 

15,680

 

43,556

 

-

Free energy supply

7,291

 

20,253

 

-

 

6,897

 

19,158

 

-

Research and development and energy efficiency programs

16,718

 

46,440

 

-

 

16,060

 

44,612

 

-

Personnel-related provisions

3,376

 

9,350

 

-

 

2,578

 

7,161

 

-

Depreciation rate difference

6,485

 

18,014

 

-

 

6,797

 

18,880

 

-

Derivatives

(100,296)

 

(278,600)

 

-

 

(219,524)

 

(609,788)

 

-

Recognition of concession - adjustment of intangible asset (IFRS/CPC)

(8,519)

 

(23,664)

 

-

 

(9,031)

 

(25,085)

 

-

Recognition of concession - adjustment of financial asset (IFRS/CPC)

(88,798)

 

(245,519)

 

(4,753)

 

(73,241)

 

(202,271)

 

(18,450)

Actuarial losses (IFRS/CPC)

26,352

 

73,198

 

-

 

26,351

 

73,199

 

-

Other adjustments (IFRS/CPC)

(15,091)

 

(41,917)

 

-

 

(8,542)

 

(23,726)

 

-

Accelerated depreciation

(56)

 

(155)

 

-

 

(34)

 

(95)

 

-

Others

5,189

 

14,222

 

(3,691)

 

3,828

 

9,920

 

291

Nondeductible temporary differences - accumulated comprehensive income:

                     

Property, plant and equipment - adjustment of deemed cost (IFRS/CPC)

(56,850)

 

(157,917)

 

-

 

(58,484)

 

(162,456)

 

-

Actuarial losses (IFRS/CPC)

10,463

 

29,065

 

-

 

10,464

 

29,064

 

-

Nondeductible temporary differences - Business combination - CPFL Renováveis

                     

Deferred taxes - asset:

                     

Fair value of property, plant and equipment (negative value added of assets)

23,509

 

65,304

 

-

 

24,248

 

67,355

 

-

Deferred taxes - liability:

                     

Value added derived from determination of deemed cost

(28,302)

 

(78,616)

 

-

 

(29,132)

 

(80,922)

 

-

Value added of assets received from the former ERSA

(84,842)

 

(235,671)

 

-

 

(86,495)

 

(240,264)

 

-

Intangible asset - exploration right/authorization in indirect subsidiaries acquired

(188,722)

 

(524,227)

 

-

 

(193,927)

 

(538,685)

 

-

Other temporary differences

(19,493)

 

(54,158)

 

-

 

(17,233)

 

(47,874)

 

-

Total

(434,878)

 

(1,207,074)

 

(8,444)

 

(547,066)

 

(1,519,170)

 

(18,159)

 

9.4    Reconciliation of the income tax and social contribution amounts recognized in the statements of profit or loss for the quarters and semesters ended in June 30, 2016 and 2015:

 

Parent company

 

Consolidated

 

Social contribution

 

Social contribution

 

2016

 

2015

 

2016

 

2015

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

Income before taxes

267,278

 

532,342

 

134,605

 

303,869

 

390,164

 

797,793

 

181,068

 

472,318

Adjustments to reflect effective rate:

                             

Equity in subsidiaries

(264,976)

 

(546,811)

 

(148,643)

 

(339,919)

 

(68,638)

 

(132,118)

 

(64,257)

 

(81,381)

Amortization of intangible asset acquired

(3,382)

 

(6,764)

 

(6,650)

 

(13,301)

 

12,162

 

24,324

 

25,223

 

50,446

Tax incentives - PIIT (*)

-

 

-

 

-

 

-

 

(250)

 

(250)

 

(1,807)

 

(3,125)

Effect of presumed profit regime

-

 

-

 

-

 

-

 

(31,271)

 

(19,077)

 

8,847

 

11,634

Adjustment of revenue from excess demand and excess reactive power

-

 

-

 

-

 

-

 

31,235

 

62,466

 

30,627

 

60,684

Interest on capital

12,048

 

12,048

 

62,339

 

62,339

 

-

 

-

 

-

 

-

Other permanent additions (exclusions), net

7,355

 

5,652

 

1,681

 

3,070

 

11,773

 

2,310

 

13,971

 

30,838

Tax base

18,323

 

(3,533)

 

43,332

 

16,058

 

345,175

 

735,448

 

193,672

 

541,414

Statutory rate

9%

 

9%

 

9%

 

9%

 

9%

 

9%

 

9%

 

9%

Tax credit/(debit)

(1,649)

 

318

 

(3,900)

 

(1,445)

 

(31,066)

 

(66,190)

 

(17,430)

 

(48,727)

Tax credit recorded (not recorded)

-

 

-

 

2,514

 

-

 

(11,437)

 

(23,477)

 

(5,742)

 

(15,908)

Total

(1,649)

 

318

 

(1,386)

 

(1,445)

 

(42,502)

 

(89,668)

 

(23,172)

 

(64,635)

                               

Current

(1,682)

 

(7,224)

 

(1,048)

 

(1,048)

 

(71,801)

 

(150,323)

 

(22,724)

 

(55,338)

Deferred

33

 

7,542

 

(338)

 

(397)

 

29,299

 

60,656

 

(448)

 

(9,297)

                               
                               
 

Parent company

 

Consolidated

 

Income tax

 

Income tax

 

2016

 

2015

 

2016

 

2015

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

Income before taxes

267,278

 

532,342

 

134,605

 

303,869

 

390,164

 

797,793

 

181,068

 

472,318

Adjustments to reflect effective rate:

                             

Equity in subsidiaries

(264,976)

 

(546,811)

 

(148,643)

 

(339,919)

 

(68,638)

 

(132,118)

 

(64,257)

 

(81,381)

Amortization of intangible asset acquired

-

 

-

 

-

 

-

 

15,689

 

31,378

 

32,157

 

64,315

Tax incentives - PIIT (*)

-

 

-

 

-

 

-

 

(250)

 

(250)

 

(1,807)

 

(3,125)

Effect of presumed profit regime

-

 

-

 

-

 

-

 

(45,701)

 

(43,639)

 

(1,906)

 

(14,088)

Adjustment of revenue from excess demand and excess reactive power

-

 

-

 

-

 

-

 

31,235

 

62,466

 

30,627

 

60,578

Interest on capital

12,048

 

12,048

 

62,339

 

62,339

 

-

 

-

 

-

 

-

Tax incentive - operating profit

-

 

-

 

-

 

-

 

(8,967)

 

(14,011)

 

2,020

 

(10,328)

Other permanent additions (exclusions), net

8,921

 

8,420

 

4,035

 

10,807

 

(10,638)

 

(20,164)

 

18,470

 

36,166

Tax base

23,271

 

5,999

 

52,336

 

37,096

 

302,894

 

681,455

 

196,372

 

524,455

Statutory rate

25%

 

25%

 

25%

 

25%

 

25%

 

25%

 

25%

 

25%

Tax credit/(debit)

(5,818)

 

(1,500)

 

(13,084)

 

(9,274)

 

(75,724)

 

(170,364)

 

(49,093)

 

(131,115)

Tax credit recorded (not recorded)

-

 

-

 

4,045

 

-

 

(31,804)

 

(65,180)

 

(18,566)

 

(44,019)

Total

(5,818)

 

(1,500)

 

(9,039)

 

(9,274)

 

(107,528)

 

(235,544)

 

(67,656)

 

(175,133)

                               

Current

(5,537)

 

(21,938)

 

(6,540)

 

(6,609)

 

(194,921)

 

(401,475)

 

(61,614)

 

(143,317)

Deferred

(281)

 

20,438

 

(2,500)

 

(2,665)

 

87,393

 

165,931

 

(6,042)

 

(31,816)

(*) Technologic innovation program

52

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

( 10 )     FINANCIAL ASSET OF CONCESSION

 

 

Distribution

 

Transmission

 

Consolidated

As of December 31, 2015

3,483,713

 

123,391

 

3,607,104

Current

-

 

9,630

 

9,630

Noncurrent

3,483,713

 

113,761

 

3,597,474

           

Additions

242,231

 

9,270

 

251,501

Adjustment of expected cash flow

160,527

 

-

 

160,527

Adjustment - financial asset measured at amortized cost

-

 

7,044

 

7,044

Cash inputs - RAP

-

 

(4,559)

 

(4,559)

Disposals

(8,811)

 

-

 

(8,811)

 

         

As of June 30, 2016

3,877,660

 

135,145

 

4,012,805

Current

-

 

9,846

 

9,846

Noncurrent

3,877,660

 

125,299

 

4,002,959

 

 

The amount refers to the financial asset corresponding to the right established in the concession agreements of the energy distributors (measured at fair value) and transmitters (measured at amortized cost) to receive cash (i) by compensation upon the return of the assets to the granting authority at the end of the concession, and (ii) the transmitter's right to receive cash throughout the concession through allowed annual revenue ("RAP").

For energy distributors, according to the current tariff model, the remuneration for this asset is recognized in profit or loss upon billing to consumers and the realization occurs upon receipt of the electric energy bills. Additionally, the difference to adjust the balance to its expected cash flows is recognized against a finance income and/or cost account in the statement of profit or loss for the period, based on the fair value (new replacement value - “VNR”) (finance income of R$ 160,527 in the first semester of 2016 and R$ 137,732 in the first semester of 2015).

For the energy transmitters, the remuneration for this asset is recognized according to the internal rate of return, which takes into account the investment made, the allowed annual revenue (“RAP”) to be received during the remaining concession period and by compensation upon the return of the assets to the granting authority at the end of the concession. The adjustment of R$ 7,044 in the first semester of 2016, (R$ 5,063 in the first semester of 2015) is recognized against other operating income.

 

53


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

( 11 )   OTHER RECEIVABLES

 

 

Consolidated

 

Current

 

Noncurrent

 

June 30, 2016

 

December 31, 2015

 

June 30, 2016

 

December 31, 2015

Advances - Fundação CESP

11,832

 

10,567

 

-

 

-

Advances to suppliers

21,269

 

10,666

 

-

 

-

Pledges, funds and restricted deposits

20,059

 

649

 

479,274

 

433,014

Orders in progress

225,552

 

274,605

 

-

 

-

Services rendered to third parties

11,182

 

6,987

 

-

 

-

Energy pre-purchase agreements

-

 

-

 

30,942

 

31,375

Collection agreements

2,325

 

90,451

 

-

 

-

Prepaid expenses

73,205

 

61,602

 

22,951

 

19,579

GSF Renegotiation

11,647

 

8,724

 

31,716

 

29,392

Receivables - energy development account - CDE

112,422

 

341,781

 

-

 

-

Receivables - business combination

-

 

-

 

13,950

 

13,950

Advances to employees

26,644

 

12,509

 

-

 

-

Indemnities for claims

-

 

49,937

 

-

 

-

Leases

18,406

 

12,883

 

44,053

 

34,504

Other

103,569

 

90,653

 

34,202

 

34,685

(-) Allowance for doubtful debts (Note 6)

(13,015)

 

(12,460)

 

-

 

(1,981)

Total

625,097

 

959,553

 

657,087

 

594,519

               

 

 

Renegotiation of GSF - Refers to the premium paid in advance by the subsidiaries Ceran, CPFL Jaguari Geração (Paulista Lajeado)  and CPFL Renováveis in relation to transfer of the hydrological risk to the Tariff Flag Resources Centralizing Account (“CCRBT”), amortized on a straight-line basis against other operating costs.

Receivables –Energy Development Account – CDE: refer to: (i) low income subsidies totaling R$ 18,016 (R$ 18,190 at December 31, 2015) and (ii) other tariff discounts granted to consumers amounting to R$ 94,407 (R$ 323,591 as of December 31, 2015).

On May 2015, the distribution subsidiaries obtained preliminary injunctions authorizing non-payment of amounts owed for Energy Development Account (CDE) quotas up to the limit of the balances receivable from Eletrobrás relating to the CDE injection. In the first semester of 2016 the subsidiaries carried out matching of accounts of the accounts receivable by way of CDE injection and the CDE accounts payable (note 19) the amount of R$ 428,387.

 

( 12 )   INVESTMENTS

 

 

Parent company

 

Consolidated

 

June 30, 2016

 

December 31, 2015

 

June 30, 2016

 

December 31, 2015

Permanent equity interests - equity method

             

By equity method of the subsidiary

6,120,843

 

6,178,637

 

1,372,730

 

1,235,832

Value-added of assets, net

723,988

 

755,345

 

11,509

 

11,799

Goodwill

6,055

 

6,054

 

-

 

-

Total

6,850,886

 

6,940,036

 

1,384,239

 

1,247,631

 

 

12.1 Permanent equity interests – equity method

The main information on investments in direct permanent equity interests is as follows:

54

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

 

 

 

June 30, 2016

 

June 30, 2016

 

December 31, 2015

 

1st semester 2016

 

1st semester 2015

Investment

 

Number of shares (thousand)

Total assets

 

Capital

 

Shareholders' equity

Profit or loss for the period

Shareholders equity interest

 

Equity in subsidiaries

CPFL Paulista

 

880,653

 

9,485,720

 

905,948

 

1,172,774

 

217,840

 

1,172,774

 

1,352,393

 

217,840

 

137,685

CPFL Piratininga

 

53,096,770

 

3,725,078

 

235,556

 

464,447

 

97,427

 

464,447

 

537,670

 

97,427

 

86,031

CPFL Santa Cruz

 

371,772

 

392,114

 

74,862

 

138,724

 

12,469

 

138,724

 

131,149

 

12,469

 

18,102

CPFL Leste Paulista

 

892,772

 

149,658

 

29,212

 

48,395

 

3,819

 

48,395

 

46,301

 

3,819

 

4,778

CPFL Sul Paulista

 

454,958

 

181,322

 

28,492

 

59,298

 

4,066

 

59,298

 

55,233

 

4,066

 

6,826

CPFL Jaguari

 

209,294

 

127,643

 

20,632

 

34,240

 

5,857

 

34,240

 

28,521

 

5,857

 

892

CPFL Mococa

 

117,199

 

110,830

 

16,004

 

32,039

 

3,938

 

32,039

 

29,205

 

3,938

 

3,390

RGE

 

1,019,790

 

4,445,387

 

1,213,180

 

1,582,713

 

59,388

 

1,582,713

 

1,580,807

 

59,388

 

52,757

CPFL Geração

 

205,492,020

 

6,079,262

 

1,043,922

 

2,291,462

 

129,628

 

2,291,462

 

2,169,922

 

129,628

 

26,957

CPFL Jaguari Geração (*)

 

40,108

 

40,955

 

40,108

 

40,819

 

711

 

40,819

 

42,729

 

711

 

242

CPFL Brasil

 

2,999

 

407,348

 

2,999

 

68,884

 

32,916

 

68,884

 

51,779

 

32,916

 

43,059

CPFL Planalto (*)

 

630

 

1,790

 

630

 

1,635

 

1,005

 

1,635

 

2,003

 

1,005

 

948

CPFL Serviços

 

1,480,835

 

153,659

 

50,143

 

45,954

 

(4,189)

 

45,954

 

7,117

 

(4,189)

 

(4,806)

CPFL Atende (*)

 

13,991

 

23,580

 

13,991

 

15,945

 

2,605

 

15,945

 

17,373

 

2,605

 

4,394

Nect (*)

 

2,059

 

20,252

 

2,059

 

8,071

 

5,600

 

8,071

 

16,087

 

5,600

 

6,359

CPFL Total (*)

 

19,005

 

29,039

 

19,005

 

24,613

 

4,930

 

24,613

 

19,930

 

4,930

 

5,589

CPFL Jaguariuna (*)

 

189,770

 

2,624

 

3,156

 

2,525

 

(51)

 

2,525

 

2,496

 

(51)

 

(53)

CPFL Telecom

 

36,420

 

59,872

 

55,420

 

(28,233)

 

(13,264)

 

(28,233)

 

(33,969)

 

(13,263)

 

(7,222)

CPFL Centrais Geradoras (*)

 

16,128

 

16,433

 

16,128

 

15,801

 

(616)

 

15,801

 

19,972

 

(616)

 

2,383

CPFL ESCO

 

48,164

 

99,446

 

48,164

 

59,830

 

4,022

 

59,830

 

66,038

 

4,022

 

15,900

AUTHI (*)

 

10

 

18,218

 

2,610

 

12,674

 

10,064

 

12,674

 

1,913

 

10,064

 

-

Subtotal - By subsidiary's equity

 

 

 

 

 

 

 

 

 

 

 

6,092,610

 

6,144,669

 

578,166

 

404,212

Amortization of added value on assets

 

 

 

 

 

 

 

 

 

 

 

-

 

-

 

(31,355)

 

(64,293)

Total

 

 

 

 

 

 

 

 

 

 

 

6,092,610

 

6,144,668

 

546,811

 

339,919

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment

 

 

 

 

 

 

 

 

 

 

 

6,120,843

 

6,178,637

 

 

 

 

Provision for equity interest losses

 

 

 

 

 

 

 

 

 

 

 

(28,233)

 

(33,969)

 

 

 

 

(*) number of quotas

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                     

 

 

Fair value adjustments (value added) of net assets acquired in business combinations are classified under Investments in the parent company’s statement of income. The amortization of the fair value adjustments (value added) of net assets of R$ 31,355 (R$ 64,293 in the first semester 2015) is classified in the parent company’s statement of profit or loss in line item “equity in subsidiaries”, in conformity with ICPC 09 (R2).

The movements, in the parent company, in investments in subsidiaries, in the period are as follows:

 

 

Investment

 

Investment as of December 31, 2015

 

Increase / (decrease) / payment of capital

 

Equity in subsidiary (profit or loss)

 

Equity in subsidiary (Other comprehensive income)

 

Dividends and interest on capital

 

Investment as of June 30, 2016

CPFL Paulista

 

1,352,393

 

-

 

217,840

 

(277,013)

 

(120,446)

 

1,172,774

CPFL Piratininga

 

537,670

 

-

 

97,427

 

(102,326)

 

(68,324)

 

464,447

CPFL Santa Cruz

 

131,149

 

-

 

12,469

 

-

 

(4,895)

 

138,724

CPFL Leste Paulista

 

46,301

 

-

 

3,819

 

-

 

(1,725)

 

48,395

CPFL Sul Paulista

 

55,233

 

-

 

4,066

 

-

 

-

 

59,298

CPFL Jaguari

 

28,521

 

-

 

5,857

 

-

 

(139)

 

34,240

CPFL Mococa

 

29,205

 

-

 

3,938

 

-

 

(1,105)

 

32,039

RGE

 

1,580,807

 

-

 

59,388

 

(16,936)

 

(40,546)

 

1,582,713

CPFL Geração

 

2,169,922

 

-

 

129,628

 

(8,088)

 

-

 

2,291,462

CPFL Jaguari Geração

 

42,729

 

-

 

711

 

-

 

(2,621)

 

40,819

CPFL Brasil

 

51,779

 

-

 

32,916

 

-

 

(15,812)

 

68,884

CPFL Planalto

 

2,003

 

-

 

1,005

 

-

 

(1,372)

 

1,635

CPFL Serviços

 

7,117

 

43,026

 

(4,189)

 

-

 

-

 

45,954

CPFL Atende

 

17,373

 

-

 

2,605

 

-

 

(4,034)

 

15,945

Nect

 

16,087

 

-

 

5,600

 

-

 

(13,615)

 

8,071

CPFL Total

 

19,930

 

-

 

4,930

 

-

 

(247)

 

24,613

CPFL Jaguariuna

 

2,496

 

80

 

(51)

 

-

 

-

 

2,525

CPFL Telecom

 

(33,969)

 

19,000

 

(13,264)

 

-

 

-

 

(28,233)

CPFL Centrais Geradoras

 

19,972

 

-

 

(616)

 

-

 

(3,555)

 

15,801

CPFL ESCO

 

66,038

 

-

 

4,022

 

-

 

(10,230)

 

59,830

AUTHI

 

1,912

 

2,600

 

10,064

     

(1,903)

 

12,674

   

6,144,668

 

64,706

 

578,166

 

(404,363)

 

(290,569)

 

6,092,610

 

 

 

55

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

In the interim consolidated financial statements, the investment balances correspond to the interest in the joint ventures accounted for by the equity method:

 

Investment in joint ventures

 

June 30, 2016

 

December 31, 2015

 

1st semester 2016

 

1st semester 2015

 

Shareholders equity interest

 

Equity in subsidiaries

                 

Baesa

 

174,349

 

166,150

 

8,199

 

557

Enercan

 

526,196

 

473,148

 

53,048

 

24,225

Chapecoense

 

487,189

 

449,049

 

38,140

 

20,255

EPASA

 

184,996

 

147,485

 

33,020

 

36,912

Fair value adjustments of assets, net

 

11,509

 

11,799

 

(290)

 

(568)

   

1,384,239

 

1,247,631

 

132,118

 

81,381

 

12.2 Fair value adjustments and goodwill

Fair value adjustments (value added) refer basically to the right to the concession, acquired through business combinations. The goodwill refers mainly to acquisitions of investments and is based on projections of future profits.

In the consolidated interim financial statements, these amounts are classified as Intangible Assets (note 14).

 

12.3 Dividends and interest on capital receivable

At June 30, 2016 and December, 31 2015, the Company has the following amounts receivable from the subsidiaries below, relating to dividends and interest on capital:

 

 

Parent company

 

Dividends

 

Interest on Shareholders´ Equity

 

Total

Investment

June 30, 2016

 

December 31, 2015

 

June 30, 2016

 

December 31, 2015

 

June 30, 2016

 

December 31, 2015

CPFL Paulista

-

 

612,585

 

-

 

52,383

 

-

 

664,968

CPFL Piratininga

-

 

172,239

 

-

 

27,084

 

-

 

199,323

CPFL Santa Cruz

-

 

19,527

 

4,160

 

7,517

 

4,160

 

27,044

CPFL Leste Paulista

3,220

 

3,220

 

3,568

 

2,102

 

6,788

 

5,322

CPFL Sul Paulista

3,848

 

3,848

 

1,986

 

1,986

 

5,834

 

5,834

CPFL Jaguari

1,291

 

1,152

 

-

 

-

 

1,291

 

1,152

CPFL Mococa

2,499

 

2,499

 

2,174

 

1,234

 

4,673

 

3,733

RGE

-

 

67,815

 

-

 

64,073

 

-

 

131,888

CPFL Geração

103,532

 

103,532

 

-

 

-

 

103,532

 

103,532

CPFL Centrais Geradoras

-

 

1,185

 

-

 

-

 

-

 

1,185

CPFL Jaguari Geração

-

 

1,667

 

-

 

-

 

-

 

1,667

CPFL Brasil

55,046

 

41,176

 

1,650

 

1,601

 

56,696

 

42,777

CPFL Planalto

-

 

458

 

-

 

-

 

-

 

458

CPFL Serviços

-

 

12,026

 

-

 

-

 

-

 

12,026

CPFL Atende

-

 

-

 

554

 

-

 

554

 

-

Nect Serviços

5,000

 

4,539

 

-

 

-

 

5,000

 

4,539

CPFL Total

-

 

5,589

 

-

 

-

 

-

 

5,589

CPFL ESCO

9,565

 

9,565

 

16,325

 

6,354

 

25,890

 

15,919

AUTHI

-

 

634

 

-

 

-

 

-

 

634

 

184,001

 

1,063,256

 

30,417

 

164,334

 

214,418

 

1,227,590

 

At the consolidated financial statements, the balance of dividends and interest on capital receivable at June 30, 2016 is R$ 13,424 (R$ 91,392 at December 31, 2015) related to joint ventures.

 

56

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

12.4 Noncontrolling interests and joint ventures

The disclosure of interests in subsidiaries, in accordance with IFRS 12 and CPC 45, is as follows:

12.4.1    Movements in noncontrolling interests

 

   

CERAN

 

CPFL Renováveis

 

Paulista Lajeado

 

Total

As of December 31, 2015

 

234,271

 

2,148,490

 

73,182

 

2,455,942

Equity Interests and voting capital

 

35.00%

 

48.39%

 

40.07%

   
                 

Net equity attributable to noncontrolling shareholders

 

20,152

 

(79,068)

 

339

 

(58,578)

Dividends

 

-

 

(16,114)

 

-

 

(16,114)

Other movements

 

-

 

-

 

(31)

 

(31)

As of June 30, 2016

 

254,423

 

2,053,307

 

73,489

 

2,381,218

Equity Interests and voting capital

 

35.00%

 

48.39%

 

40.07%

   

 

 

12.4.2    Summarized financial information of subsidiaries that have interests of noncontrolling shareholders

Summarized financial information on subsidiaries that have interests of noncontrolling shareholders at June 30, 2016 and December 31, 2015 and in the semesters ended in June 30, 2016 and 2015 are as follows:

 

   

June 30, 2016

 

December 31, 2015

   

CERAN

 

CPFL Renováveis

 

Paulista Lajeado

 

CERAN

 

CPFL Renováveis

 

Paulista Lajeado

Current assets

 

249,044

 

942,186

 

26,996

 

203,205

 

1,296,420

 

39,916

Cash and cash equivalents

 

191,375

 

564,328

 

16,676

 

154,845

 

871,503

 

30,907

Noncurrent assets

 

955,269

 

10,913,957

 

122,959

 

997,049

 

10,607,682

 

126,147

                         

Current liabilities

 

109,495

 

1,098,680

 

5,644

 

128,920

 

1,174,865

 

16,515

Borrowings and debentures

 

60,311

 

659,829

 

326

 

62,279

 

854,042

 

392

Other financial liabilities

 

14,793

 

71,575

 

1,206

 

39,068

 

75,716

 

6,496

Noncurrent liabilities

 

367,897

 

6,637,362

 

36,222

 

401,988

 

6,425,440

 

40,908

Borrowings and debentures

 

281,744

 

5,363,120

 

36,057

 

318,864

 

5,150,530

 

40,908

Other financial liabilities

 

86,152

 

633

 

-

 

83,124

 

633

 

-

Equity

 

726,922

 

4,120,101

 

108,089

 

669,346

 

4,303,797

 

108,639

Equity attributable to controlling shareholders

 

726,922

 

4,004,561

 

108,089

 

669,346

 

4,176,063

 

108,639

Equity attributable to noncontrolling shareholders

 

-

 

115,540

 

-

 

-

 

127,734

 

-

                         
   

1st semester 2016

 

1st semester 2015

   

CERAN

 

CPFL Renováveis

 

Paulista Lajeado

 

CERAN

 

CPFL Renováveis

 

Paulista Lajeado

Net operating revenue

 

147,313

 

638,918

 

15,087

 

156,236

 

660,035

 

15,312

Operating cost and expense

 

(28,051)

 

(260,189)

 

(14,570)

 

(71,033)

 

(326,530)

 

(22,400)

Depreciation and amortization

 

(22,649)

 

(268,259)

 

(1)

 

(23,082)

 

(260,696)

 

(4)

Interest income

 

12,765

 

55,140

 

1,476

 

6,176

 

51,168

 

642

Interest expense

 

(19,024)

 

(284,869)

 

(689)

 

(19,834)

 

(252,858)

 

(315)

Income tax expense

 

(29,811)

 

(16,871)

 

447

 

(22,373)

 

(11,799)

 

(231)

Profit (loss)

 

57,576

 

(167,582)

 

844

 

43,209

 

(157,727)

 

466

Attributable to controlling shareholders

 

57,576

 

(171,502)

 

844

 

43,209

 

(158,516)

 

466

Attributable to nocontrolling shareholders

 

-

 

3,920

 

-

 

-

 

789

 

-

 

 

57

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

12.4.3    Joint ventures

Summarized financial information on joint ventures at June 30, 2016 and December 31, 2015 and in the semesters ended in June 30, 2016 and 2015 are as follows:

 

   

June 30, 2016

 

December 31, 2015

   

Enercan

 

Baesa

 

Chapecoense

 

Epasa

 

Enercan

 

Baesa

 

Chapecoense

 

Epasa

Current assets

 

288,104

 

52,901

 

269,836

 

171,404

 

292,133

 

105,198

 

356,493

 

305,371

Cash and cash equivalents

 

176,275

 

18,012

 

130,678

 

54,786

 

112,387

 

75,097

 

239,192

 

120,307

Noncurrent assets

 

1,201,775

 

1,148,821

 

3,060,231

 

591,807

 

1,253,002

 

1,174,604

 

3,079,957

 

600,413

                                 

Current liabilities

 

141,367

 

113,675

 

294,491

 

144,476

 

264,721

 

188,077

 

447,142

 

336,794

Borrowings and debentures

 

86,565

 

86,000

 

136,554

 

40,878

 

86,724

 

111,422

 

136,322

 

57,269

Other financial liabilities

 

9,410

 

23,109

 

75,418

 

43,457

 

81,121

 

70,793

 

115,360

 

122,921

Noncurrent liabilities

 

268,538

 

390,815

 

2,080,304

 

271,912

 

309,317

 

427,284

 

2,108,820

 

292,490

Borrowings and debentures

 

195,255

 

108,072

 

1,348,920

 

235,452

 

240,336

 

155,826

 

1,404,553

 

251,913

Other financial liabilities

 

25,782

 

271,285

 

730,113

 

32,799

 

24,759

 

260,042

 

703,556

 

40,381

Equity

 

1,079,975

 

697,232

 

955,272

 

346,824

 

971,097

 

664,442

 

880,488

 

276,500

                                 
   

1st semester 2016

 

1st semester 2015

   

Enercan

 

Baesa

 

Chapecoense

 

Epasa

 

Enercan

 

Baesa

 

Chapecoense

 

Epasa

Net operating revenue

 

277,471

 

128,940

 

375,775

 

271,795

 

240,067

 

230,831

 

350,681

 

497,513

Operating cost and expense

 

(73,017)

 

(26,392)

 

(75,437)

 

(164,743)

 

(114,657)

 

(153,548)

 

(111,395)

 

(381,406)

Depreciation and amortization

 

(26,925)

 

(26,114)

 

(64,002)

 

(16,414)

 

(26,791)

 

(27,664)

 

(65,630)

 

(16,191)

Interest income

 

14,614

 

6,097

 

16,393

 

6,541

 

5,790

 

2,719

 

9,715

 

4,906

Interest expense

 

(19,183)

 

(11,757)

 

(63,419)

 

(12,285)

 

(27,575)

 

(11,653)

 

(66,108)

 

(15,399)

Income tax expense

 

(56,412)

 

(16,918)

 

(38,501)

 

(16,063)

 

(25,495)

 

(1,153)

 

(21,705)

 

(15,333)

Profit (loss)

 

108,877

 

32,790

 

74,783

 

61,905

 

49,719

 

2,228

 

39,716

 

69,173

Equity Interests and voting capital

 

48.72%

 

25.01%

 

51.00%

 

53.34%

 

48.72%

 

25.01%

 

51.00%

 

53.34%

 

 

 

Although holding more than 50% in Epasa and Chapecoense, the subsidiary CPFL Geração controls these investments jointly with other shareholders. The analysis of the classification of the type of investment is based on the Shareholders' Agreement of each joint venture.

The borrowings from the BNDES obtained by the joint ventures ENERCAN, BAESA and Chapecoense establish restrictions on the payment of dividends to subsidiary CPFL Geração above the mandatory minimum dividend of 25% without the prior consent of the BNDES.

 

12.4.4    Jointly controlled operation

Through its wholly-owned subsidiary CPFL Geração, the Company holds part of the assets of the Serra da Mesa hydropower plant, located on the Tocantins River, in Goiás State. The concession and operation of the hydropower plant belong to Furnas Centrais Elétricas S.A. In order to maintain these assets operating jointly with Furnas (joint operation), CPFL Geração was assured 51.54% of the installed power of 1,275 MW (657 MW) and the assured energy of mean 671 MW (mean 345.4 MW) until 2028 (information on energy capacity measures not audited by the independent auditors).

 

12.5Advance for future capital increase

At June 30, 2016 the balances of advance for future capital increase mainly refer to advances to the subsidiary CPFL Telecom (R$ 16,000), approved in September 2015.

 

58

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

( 13 )   PROPERTY, PLANT AND EQUIPMENT

 

 

Consolidated

 

Land

 

Reservoirs, dams and water mains

 

Buildings, construction and improvements

 

Machinery and equipment

 

Vehicles

 

Furniture and fittings

 

In progress

 

Total

As of December 31, 2015

176,807

 

1,376,246

 

1,075,982

 

5,824,089

 

36,230

 

9,696

 

674,166

 

9,173,217

Historic cost

198,141

 

1,965,641

 

1,516,228

 

7,878,838

 

52,947

 

22,323

 

674,166

 

12,308,285

Accumulated depreciation

(21,334)

 

(589,395)

 

(440,246)

 

(2,054,749)

 

(16,717)

 

(12,627)

 

-

 

(3,135,068)

                               

Additions

-

 

180

 

77

 

77

 

-

 

-

 

545,395

 

545,729

Disposals

-

 

-

 

-

 

(4,155)

 

(416)

 

(214)

 

(160)

 

(4,944)

Transfers

3,198

 

48,747

 

94,589

 

242,422

 

9,710

 

379

 

(399,044)

 

-

Reclassification - cost

(58)

 

(4,450)

 

(23,213)

 

32,638

 

(13)

 

(416)

 

-

 

4,488

Transfers from/to other assets - cost

-

 

6

 

1

 

(373)

 

-

 

1

 

(10,308)

 

(10,673)

Depreciation

(3,713)

 

(37,229)

 

(23,850)

 

(183,933)

 

(3,819)

 

(876)

 

-

 

(253,421)

Write-off of depreciation

-

 

-

 

-

 

3,182

 

165

 

88

 

-

 

3,435

Reclassification - depreciation

(1,211)

 

346

 

(5,336)

 

1,599

 

7

 

107

 

-

 

(4,488)

                               

As of June 30, 2016

175,022

 

1,383,845

 

1,118,250

 

5,915,547

 

41,865

 

8,765

 

810,047

 

9,453,342

Historic cost

201,282

 

2,010,125

 

1,587,681

 

8,137,625

 

62,229

 

22,072

 

810,047

 

12,831,060

Accumulated depreciation

(26,260)

 

(626,279)

 

(469,431)

 

(2,222,078)

 

(20,363)

 

(13,306)

 

-

 

(3,377,718)

                               

Average depreciation rate

3.86%

 

3.89%

 

3.11%

 

4.45%

 

12.99%

 

9.77%

       

 

 

In accordance with IAS 23 / CPC 20 (R1), the interest on borrowings taken by subsidiaries to finance the works is capitalized during the construction phase. In the first semester of 2016, R$ 28,456 was capitalized at a rate of 11.76% p.a. (R$ 4,180 in the first semester of 2015 at a rate of 11.81% p.a.) (Note 29).

The amounts stated under "Reclassification - cost" mainly relate to the subsidiary CPFL Renováveis and refer to transfers for amendments of fixed asset groups, they do not alter the amount of depreciation expense registered in the period, as there was no change to their useful lives.

In the consolidated, depreciation expenses are recognized in the statement of profit or loss in line item “depreciation and amortization” (note 28).

 

 

59


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

( 14 )   INTANGIBLE ASSETS

 

 

Consolidated

 

Goodwill

 

Concession right

 

Other intangible assets

 

Total

   

Acquired in business combinations

 

Distribution infrastructure - operational

 

Distribution infrastructure - in progress

 

Public utilities

   

As of December 31, 2015

6,115

 

4,355,546

 

4,249,182

 

499,627

 

28,743

 

71,125

 

9,210,338

Historical cost

6,152

 

7,441,902

 

10,348,857

 

499,627

 

35,840

 

192,626

 

18,525,004

Accumulated amortization

(37)

 

(3,086,356)

 

(6,099,675)

 

-

 

(7,097)

 

(121,500)

 

(9,314,665)

                           

Additions

-

 

-

 

-

 

434,618

 

-

 

3,319

 

437,937

Amortization

-

 

(123,907)

 

(237,164)

 

-

 

(710)

 

(5,850)

 

(367,631)

Transfer - intangible assets

-

 

-

 

222,271

 

(222,271)

 

-

 

-

 

-

Transfer - financial asset

-

 

-

 

(8,004)

 

(234,227)

 

-

 

-

 

(242,231)

Disposal and transfer - other assets

-

 

-

 

(18,968)

 

-

 

-

 

1,347

 

(17,621)

                           

As of June 30, 2016

6,115

 

4,231,639

 

4,207,317

 

477,747

 

28,033

 

69,941

 

9,020,793

Historical cost

6,152

 

7,236,860

 

10,470,603

 

477,747

 

35,840

 

195,271

 

18,422,473

Accumulated amortization

(37)

 

(3,005,221)

 

(6,263,286)

 

-

 

(7,807)

 

(125,329)

 

(9,401,680)

 

 

In the consolidated the amortization of intangible assets is recognized in the statement of profit or loss in the following line items: (i) “depreciation and amortization” for amortization of distribution infrastructure intangible assets, use of public asset and other intangible assets; and (ii) “amortization of concession intangible asset” for amortization of the intangible asset acquired in business combination (note 28).

In accordance with IAS 23 / CPC 20 (R1), the interest on borrowings taken by subsidiaries is capitalized for qualifying intangible assets. In the first semester of 2016 R$ 5,483 was capitalized (R$ 5,584 in the first semester of 2015) at a rate of 7.58% p.a. (7.50% p.a. in the first semester of 2015).

 

60

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

14.1     Intangible asset acquired in business combinations

The breakdown of the intangible asset related to the right to operate the concessions acquired in business combinations is as follows:

 

 

Consolidated

 

June 30, 2016

 

December 31, 2015

 

Annual amortization rate

 

Historic cost

 

Accumulated amortization

 

Net value

 

Net value

 

2016

 

2015

Intangible asset - acquired in business combinations

                     

Intangible asset acquired, not merged

                     

Parent company

                     

CPFL Paulista

304,861

 

(192,025)

 

112,836

 

117,829

 

3.28%

 

4.78%

CPFL Piratininga

39,065

 

(23,098)

 

15,966

 

16,614

 

3.31%

 

4.50%

RGE

3,150

 

(1,626)

 

1,523

 

1,590

 

4.24%

 

5.51%

CPFL Geração

54,555

 

(32,721)

 

21,834

 

22,757

 

3.38%

 

5.04%

CPFL Jaguari Geração

7,896

 

(3,447)

 

4,449

 

4,584

 

3.41%

 

6.36%

 

409,527

 

(252,918)

 

156,609

 

163,373

       
                       

Subsidiaries

                     

CPFL Renováveis

3,764,809

 

(645,328)

 

3,119,480

 

3,195,215

 

4.02%

 

4.35%

Other

618

 

(124)

 

494

 

516

       
 

3,765,427

 

(645,452)

 

3,119,975

 

3,195,731

       
                       

Subtotal

4,174,954

 

(898,370)

 

3,276,584

 

3,359,104

       
                       

Intangible asset acquired and merged – Deductible

                     

Subsidiaries

                     

RGE

1,120,266

 

(850,529)

 

269,738

 

281,551

 

2.11%

 

1.79%

CPFL Geração

426,450

 

(308,514)

 

117,936

 

122,919

 

2.34%

 

3.80%

Subtotal

1,546,716

 

(1,159,042)

 

387,673

 

404,470

       
                       

Intangible asset acquired and merged – Reassessed

                     

Parent company

                     

CPFL Paulista

1,074,026

 

(706,359)

 

367,667

 

383,770

 

3.00%

 

4.34%

CPFL Piratininga

115,762

 

(68,448)

 

47,314

 

49,232

 

3.31%

 

4.50%

RGE

310,128

 

(165,317)

 

144,811

 

151,153

 

4.09%

 

5.32%

CPFL Jaguari Geração

15,275

 

(7,687)

 

7,588

 

7,818

 

3.01%

 

5.61%

Subtotal

1,515,190

 

(947,811)

 

567,380

 

591,972

       
                       

Total

7,236,860

 

(3,005,221)

 

4,231,639

 

4,355,546

       

 

 

As mentioned in Note 3, from January 1, 2016, in line with the changes to IAS 16/CPC 27 and IAS 38/CPC 04 (R1), the Company will amortize intangible assets acquired in business combinations prospectively on a straight-line basis over the remaining period of the concessions.

 

( 15 )   TRADE PAYABLES

 

 

Consolidated

 

June 30, 2016

 

December 31, 2015

Current

     

System service charges

46,471

 

203,961

Energy purchased

1,180,870

 

2,402,823

Electricity network usage charges

110,056

 

106,940

Materials and services

227,146

 

331,809

Free energy

123,460

 

115,676

Total

1,688,003

 

3,161,210

       

Noncurrent

     

Materials and services

633

 

633

 

61

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

( 16 )   INTEREST ON DEBTS AND BORROWINGS

 

   

Consolidated

   

June 30, 2016

 

December 31, 2015

   

Interest - current and noncurrent

 

Principal

 

Total

 

Interest - current and noncurrent

 

Principal

 

Total

     

Current

 

Noncurrent

     

Current

 

Noncurrent

 

Measured at cost

                               

Local currency

                               

Investment

 

17,295

 

710,594

 

4,867,561

 

5,595,450

 

17,775

 

693,058

 

4,970,715

 

5,681,549

Rental assets

 

17

 

772

 

3,173

 

3,962

 

17

 

687

 

3,434

 

4,138

Financial Institutions

 

192,794

 

147,180

 

1,439,482

 

1,779,456

 

179,656

 

382,411

 

1,350,746

 

1,912,812

Other

 

802

 

8,359

 

8,370

 

17,531

 

764

 

134,960

 

10,002

 

145,726

Total at cost

 

210,908

 

866,905

 

6,318,586

 

7,396,399

 

198,212

 

1,211,115

 

6,334,897

 

7,744,225

                                 

Measured at fair value

                               

Foreign currency

                               

Financial Institutions

 

34,177

 

1,335,047

 

4,817,407

 

6,186,631

 

40,714

 

1,651,199

 

5,560,517

 

7,252,430

Mark to market

 

-

 

(18,774)

 

(157,131)

 

(175,905)

 

-

 

(29,269)

 

(282,980)

 

(312,249)

Total at fair value

 

34,177

 

1,316,273

 

4,660,276

 

6,010,726

 

40,714

 

1,621,930

 

5,277,536

 

6,940,180

                                 

Borrowing costs (*)

 

-

 

(2,192)

 

(31,675)

 

(33,867)

 

-

 

(1,391)

 

(20,227)

 

(21,618)

                                 

Total

 

245,086

 

2,180,986

 

10,947,188

 

13,373,260

 

238,926

 

2,831,654

 

11,592,206

 

14,662,787

 

 

   

Consolidated

         

Measured at amortized cost

 

June 30, 2016

 

December 31, 2015

 

Annual interest

 

Amortization

 

Collateral

Local currency

                   

Investment

                   

CPFL Paulista

                   

FINEM V

 

53,791

 

70,293

 

TJLP + 2.12% to 3.3% (c)

 

72 monthly installments from February 2012

 

CPFL Energia guarantee and receivables

FINEM V

 

4,510

 

5,384

 

Fixed rate 8% (c)

 

90 monthly installments from August 2011

 

CPFL Energia guarantee and receivables

FINEM V

 

34,605

 

38,386

 

Fixed rate 5.5% (b)

 

96 monthly installments from February 2013

 

CPFL Energia guarantee and receivables

FINEM VI

 

173,692

 

197,145

 

TJLP + 2.06% to 3.08% (e) (f)

 

72 monthly installments from January 2014

 

CPFL Energia guarantee and receivables

FINEM VI

 

9,659

 

10,412

 

Fixed rate 2.5% (a)

 

114 monthly installments from June 2013

 

CPFL Energia guarantee and receivables

FINEM VI

 

177,201

 

191,022

 

Fixed rate 2.5% (a)

 

96 monthly installments from December 2014

 

CPFL Energia guarantee and receivables

FINEM VII

 

61,774

 

63,777

 

Fixed rate 6% (b)

 

96 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINEM VII

 

75,284

 

65,304

 

SELIC + 2.62% to 2.66% (h)

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINEM VII

 

144,183

 

130,774

 

TJLP + 2.12% to 2.66% (c) (d)

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINAME

 

29,578

 

33,808

 

Fixed rate 4.5%

 

96 monthly installments from January 2012

 

CPFL Energia guarantee

CPFL Piratininga

 

 

 

 

           

FINEM IV

 

28,971

 

37,859

 

TJLP + 2.12% to 3.3% (c)

 

72 monthly installments from February 2012

 

CPFL Energia guarantee and receivables

FINEM IV

 

1,454

 

1,736

 

Fixed rate 8% (c)

 

90 monthly installments from August 2011

 

CPFL Energia guarantee and receivables

FINEM IV

 

17,996

 

19,962

 

Fixed rate 5.5% (b)

 

96 monthly installments from February 2013

 

CPFL Energia guarantee and receivables

FINEM V

 

50,766

 

57,621

 

TJLP + 2.06% to 3.08% (e) (f)

 

72 monthly installments from January 2014

 

CPFL Energia guarantee and receivables

FINEM V

 

2,537

 

2,735

 

Fixed rate 2.5% (a)

 

114 monthly installments from June 2013

 

CPFL Energia guarantee and receivables

FINEM V

 

44,097

 

47,536

 

Fixed rate 2.5% (a)

 

96 monthly installments from December 2014

 

CPFL Energia guarantee and receivables

FINEM VI

 

42,668

 

39,605

 

SELIC + 2.62% to 2.66% (h)

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINEM VI

 

71,512

 

69,054

 

TJLP + 2.12% to 2.66% (c) (d)

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINEM VI

 

30,137

 

30,463

 

Fixed rate 6% (b)

 

96 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINAME

 

14,025

 

16,031

 

Fixed rate 4.5%

 

96 monthly installments from January 2012

 

CPFL Energia guarantee

RGE

 

 

 

 

           

FINEM V

 

32,560

 

42,549

 

TJLP + 2.12% to 3.3% (c)

 

72 monthly installments from February 2012

 

CPFL Energia guarantee and receivables

FINEM V

 

13,275

 

14,725

 

Fixed rate 5.5% (b)

 

96 monthly installments from February 2013

 

CPFL Energia guarantee and receivables

FINEM VI

 

92,792

 

105,322

 

TJLP + 2.06% to 3.08% (e) (f)

 

72 monthly installments from January 2014

 

CPFL Energia guarantee and receivables

FINEM VI

 

1,022

 

1,102

 

Fixed rate 2.5% (a)

 

114 monthly installments from June 2013

 

CPFL Energia guarantee and receivables

FINEM VI

 

65,158

 

70,240

 

Fixed rate 2.5% (a)

 

96 monthly installments from December 2014

 

CPFL Energia guarantee and receivables

FINEM VII

 

42,155

 

43,522

 

Fixed rate 6% (b)

 

96 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINEM VII

 

66,904

 

59,348

 

SELIC + 2.62% to 2.66% (h)

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINEM VII

 

88,489

 

76,728

 

TJLP + 2.12% to 2.66% (d)

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINAME

 

7,038

 

8,045

 

Fixed rate 4.5%

 

96 monthly installments from January 2012

 

CPFL Energia guarantee

FINAME

 

198

 

227

 

Fixed rate 10.0%

 

90 monthly installments from May 2012

 

Liens on assets

FINAME

 

647

 

715

 

Fixed rate 10.0%

 

66 monthly installments from October 2015

 

Liens on assets

CPFL Santa Cruz

 

 

 

 

           

FINEM

 

9,698

 

10,306

 

Fixed rate 6%

 

111 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

3,537

 

3,663

 

SELIC + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

6,725

 

7,382

 

TJLP + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

CPFL Leste Paulista

 

 

 

 

           

FINEM

 

3,623

 

3,850

 

Fixed rate 6%

 

111 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

1,297

 

1,343

 

SELIC + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

2,468

 

2,709

 

TJLP + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

CPFL Sul Paulista

 

 

 

 

           

FINEM

 

2,573

 

2,734

 

Fixed rate 6%

 

111 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

1,811

 

1,876

 

SELIC + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

3,464

 

3,803

 

TJLP + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

CPFL Jaguari

 

 

 

 

           

Bank credit note - Santander

 

1,587

 

1,710

 

TJLP + 3.1%

 

96 monthly installments from June 2014

 

CPFL Energia guarantee

Bank credit note - Santander

 

619

 

808

 

UMBNDES + 2.1%

 

96 monthly installments from June 2014

 

CPFL Energia guarantee

FINEM

 

2,583

 

2,745

 

Fixed rate 6%

 

111 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

1,346

 

1,394

 

SELIC + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

2,575

 

2,826

 

TJLP + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

CPFL Mococa

 

 

 

 

           

Bank credit note - Santander

 

2,042

 

2,200

 

TJLP + 3.1%

 

96 monthly installments from June 2014

 

CPFL Energia guarantee

Bank credit note - Santander

 

796

 

1,039

 

UMBNDES + 2.1%

 

96 monthly installments from June 2014

 

CPFL Energia guarantee

Bank credit note - Santander

 

1,503

 

1,932

 

UMBNDES +1.99%

 

96 monthly installments from October 2015

 

CPFL Energia guarantee

Bank credit note - Santander

 

4,351

 

4,619

 

TJLP + 2.99% (f)

 

96 monthly installments from October 2015

 

CPFL Energia guarantee

CPFL Serviços

 

 

 

 

           

FINAME

 

1,403

 

1,509

 

Fixed rate 2.5% to 5.5%

 

96 monthly installments from August 2014

 

CPFL Energia guarantee and liens on equipment

FINAME

 

342

 

357

 

Fixed rate 6%

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and liens on equipment

FINAME

 

767

 

864

 

Fixed rate 7.7% to 10%

 

90 monthly installments from November 2012

 

CPFL Energia guarantee and liens on equipment

FINAME

 

12,169

 

13,049

 

Fixed rate 2.5% to 5.5%

 

114 monthly installments from February 2013

 

CPFL Energia guarantee and liens on equipment

FINAME

 

53

 

60

 

TJLP + 4.2%

 

90 monthly installments from November 2012

 

CPFL Energia guarantee and liens on equipment

FINAME

 

2,454

 

2,659

 

Fixed rate 6%

 

90 monthly installments from October 2014

 

CPFL Energia guarantee and liens on equipment

FINAME

 

108

 

108

 

Fixed rate 6%

 

96 monthly installments from July 2016

 

CPFL Energia guarantee and liens on equipment

FINAME

 

6,131

 

6,496

 

Fixed rate 6%

 

114 monthly installments from June 2015

 

CPFL Energia guarantee and liens on equipment

FINAME

 

883

 

1,002

 

TJLP + 2.2% to 3.2% (c)

 

56 monthly installments from July 2015

 

CPFL Energia guarantee and liens on equipment

FINAME

 

4,274

 

4,006

 

Fixed rate 9.5% to 10% (c)

 

66 monthly installments from October 2015

 

CPFL Energia guarantee and liens on equipment

FINAME

 

1,343

 

-

 

Fixed rate 6% to 10% (c)

 

66 monthly installments from April 2016

 

CPFL Energia guarantee and liens on equipment

 

62

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

CERAN

 

 

 

 

           

BNDES

 

289,400

 

312,150

 

TJLP + 3.69% to 5%

 

168 monthly installments from December 2005

 

Pledge of shares, credit and concession rights, revenues and CPFL Energia guarantee

BNDES

 

52,656

 

68,993

 

UMBNDES + 5% (1)

 

168 monthly installments from February 2006

 

Pledge of shares, credit and concession rights, revenues and CPFL Energia guarantee

CPFL Transmissão

 

 

 

 

           

FINAME

 

18,167

 

19,466

 

Fixed rate 3.0%

 

96 monthly installments from July 2015

 

CPFL Energia guarantee

CPFL Telecom

 

 

 

 

           

FINAME

 

7,610

 

7,610

 

Fixed rate 6.0% (b)

 

60 monthly installments from December 2016

 

CPFL Energia guarantee

FINEM

 

7,490

 

7,018

 

SELIC + 3.12% (h)

 

60 monthly installments from December 2016

 

CPFL Energia guarantee

FINEM

 

21,698

 

21,544

 

TJLP + 2.12% to 3.12% (c)

 

60 monthly installments from December 2016

 

CPFL Energia guarantee

CPFL Renováveis

 

 

 

 

           

FINEM I

 

276,374

 

290,445

 

TJLP + 1.95%

 

168 monthly installments from October 2009

 

PCH Holding a joint and several debtor, letters of guarantee

FINEM II

 

23,765

 

25,308

 

TJLP + 1.90%.

 

144 monthly installments from June 2011

 

CPFL Energia guarantee, liens on assets and assignment of credit rights

FINEM III

 

511,746

 

528,528

 

TJLP + 1.72%

 

192 monthly installments from May 2013

 

CPFL Energia guarantee, pledge of shares, liens on assets, assignment of credit rights

FINEM V

 

85,535

 

90,678

 

TJLP + 2.8% to 3.4%

 

143 monthly installments from December 2011

 

PCH Holding 2 and CPFL Renováveis as joint and several debtors.

FINEM VI

 

77,097

 

79,457

 

TJLP + 2.05%

 

192 monthly installments from October 2013

 

Pledge of CPFL Renováveis shares, assignment of receivables

FINEM VII

 

147,639

 

156,737

 

TJLP + 1.92 %

 

156 monthly installments from October 2010

 

Pledge of shares, assignment of rights, liens on machinery and equipment

FINEM IX

 

28,764

 

32,289

 

TJLP + 2.15%

 

120 monthly installments from May 2010

 

Pledge of shares of subsidiary and liens on machinery and equipment

FINEM X

 

380

 

528

 

TJLP

 

84 monthly installments from October 2010

 

Pledge of shares, assignment of rights, liens on machinery and equipment

FINEM XI

 

110,790

 

115,676

 

TJLP + 1.87% to 1.9%

 

168 monthly installments from January 2012

 

CPFL Energia guarantee, pledge of shares, liens on assets, assignment of credit rights

FINEM XII

 

326,550

 

335,894

 

TJLP + 2.18%

 

192 monthly installments from July 2014

 

CPFL Energia guarantee, liens on assets, joint assignment of credit rights, pledge of shares

FINEM XIII

 

326,615

 

296,891

 

TJLP + 2.02% to 2.18%

 

192 monthly installments from November 2014

 

Pledge of shares and machinery and equipment of SPE , assignment of rights

FINEM XIV

 

(0)

 

11,599

 

TJLP + 3.50%

 

120 monthly installments from June 2007

 

Liens on machinery and equipment , assignment of receivables, pledge of grantor rights - ANEEL, pledge of shares

FINEM XV

 

29,273

 

31,227

 

TJLP + 3.44%

 

139 monthly installments from September 2011

 

Assignment of receivables, pledge of grantor rights - ANEEL, pledge of shares

FINEM XVI

 

7,458

 

8,500

 

Fixed rate 5.50%

 

101 monthly installments from September 2011

 

Assignment of receivables, pledge of grantor rights - ANEEL, pledge of shares

FINEM XVII

 

475,607

 

490,786

 

TJLP + 2.18%

 

192 monthly installments from January 2013

 

Liens on machinery and equipment, assignment of receivables, pledge of grantor rights - ANEEL, pledge of shares and reserve account

FINEM XVIII

 

16,120

 

18,481

 

Fixed rate 4.5%

 

102 monthly installments from June 2011

 

CPFL Energia guarantee, liens on assets , assignment of credit rights

FINEM XIX

 

30,490

 

31,381

 

TJLP + 2.02%

 

192 monthly installments from January 2014

 

CPFL Energia guarantee, liens on assets, joint assignment of credit rights, pledge of shares

FINEM XX

 

48,398

 

52,091

 

Fixed rate 2.5%

 

108 monthly installments from January 2014

 

Pledge of CPFL Renováveis shares,
pledge of shares and reserve account of SPE,
assignment of receivables

FINEM XXI

 

41,537

 

42,765

 

TJLP + 2.02%

 

192 monthly installments from January 2014

 

CPFL Energia guarantee, liens on assets, joint assignment of credit rights, pledge of shares

FINEM XXII

 

42,582

 

45,828

 

Fixed rate 2.5%

 

108 monthly installments from January 2014

 

Pledge of CPFL Renováveis shares,
pledge of shares and reserve account of SPE,
assignment of receivables

FINEM XXIII

 

2,017

 

2,305

 

Fixed rate 4.5%

 

102 monthly installments from June 2011

 

CPFL Energia guarantee, liens on assets , assignment of credit rights

FINEM XXIV

 

123,036

 

136,528

 

Fixed rate 5.5%

 

108 monthly installments from January 2012

 

CPFL Energia guarantee, liens on assets, joint assignment of credit rights

FINEM XXV

 

82,800

 

79,010

 

TJLP + 2.18%

 

192 monthly installments from June 2015

 

Pledge of shares and grantor rights, liens on assets and assignment of credit rights

FINEM XXVI

 

337,011

 

270,768

 

TJLP + 2.75%

 

192 monthly installments from July 2017

 

Pledge of shares and grantor rights, liens on assets and assignment of credit rights

FINEM XXVII

 

69,030

 

-

 

TJLP + 2,02%

 

162 monthly installments from November 2016

 

Pledge of shares of the intervening parties, assignment of credit rights, pledge of incidental rights authorized by ANEEL and SPE Reserve Account

FINAME IV

 

3,092

 

3,327

 

Fixed rate 2.5%

 

96 monthly installments from February 2015

 

Pledge of CPFL Renováveis shares,
pledge of shares and reserve account of SPE,
assignment of receivables

FINEP I

 

1,643

 

1,890

 

Fixed rate 3.5%

 

61 monthly installments from October 2014

 

Bank guarantee

FINEP II

 

10,444

 

10,383

 

TJLP - 1.00%

 

85 monthly installments from June 2017

 

Guarantee

FINEP III

 

5,888

 

6,374

 

TJLP + 3.00%

 

73 monthly installments from July 2015

 

Guarantee

BNB I

 

104,470

 

108,835

 

Fixed rate 9.5% to 10%

 

168 monthly installments from January 2009

 

Liens

BNB II

 

161,781

 

165,324

 

Fixed rate 10% (J)

 

222 monthly installments from May 2010

 

CPFL Energia guarantee

BNB III

 

29,937

 

30,837

 

Fixed rate 9.5%

 

228 monthly installments from July 2009

 

Guarantee, liens on assets, assignment of credit rights

NIB

 

71,216

 

72,739

 

IGPM + 8.63%

 

50 quarterly installments from June 2011

 

No guarantee

Banco do Brasil

 

28,144

 

31,014

 

Fixed rate 10.00%

 

132 monthly installment from June 2010

 

Shareholders support, pledge of shares and grantor rights, assignment of receivables, performance bond, guarantee and civil liability

CPFL Brasil

 

 

 

 

           

FINEP

 

-

 

1,864

 

Fixed rate 5%

 

81 monthly installments from August 2011

 

Receivables

Purchase of assets

 

 

 

 

           

CPFL ESCO

 

 

 

 

           

FINAME

 

3,236

 

3,544

 

Fixed rate 4.5% to 8.7%

 

96 monthly installments from March 2012

 

CPFL Energia guarantee

FINAME

 

108

 

117

 

Fixed rate 6%

 

72 monthly installments from October 2016

 

CPFL Energia guarantee

FINAME

 

263

 

261

 

TJLP + 2.70%

 

48 monthly installments from October 2016

 

CPFL Energia guarantee

FINAME

 

230

 

216

 

SELIC + 2.70%

 

48 monthly installments from October 2016

 

CPFL Energia guarantee

FINAME

 

125

 

-

 

Fixed rate 9.5%

 

48 monthly installments from October 2016

 

CPFL Energia guarantee

Financial institutions

                   

CPFL Energia

                   

Santander - Working capital

 

-

 

331,343

 

86.40% of CDI

 

1 installment in January 2016

 

No guarantee

CPFL Paulista

                   

Banco do Brasil - Working capital

 

354,958

 

331,549

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

CPFL Piratininga

                   

Banco do Brasil - Working capital

 

62,473

 

58,353

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

CPFL Santa Cruz

                   

Banco do Brasil - Working capital

 

46,854

 

43,764

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

Banco IBM - Working capital

 

7,283

 

7,637

 

CDI + 0.27% (f)

 

12 semiannual installments from June 2015

 

CPFL Energia guarantee

CPFL Leste Paulista

                   

Banco IBM - Working capital

 

6,015

 

6,587

 

100.0% of CDI

 

14 semiannual installments from December 2012

 

CPFL Energia guarantee

Banco IBM - Working capital

 

22,396

 

23,790

 

CDI + 0.1%

 

12 semiannual installments from October 2014

 

CPFL Energia guarantee

Banco IBM - Working capital

 

16,467

 

17,268

 

CDI + 0.27%

 

12 semiannual installments from March 2015

 

CPFL Energia guarantee

Banco IBM - Working capital

 

7,606

 

8,052

 

CDI + 1.33 (f)

 

12 semiannual installments from June 2015

 

CPFL Energia guarantee

 

63

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

CPFL Sul Paulista

                   

Banco do Brasil - Working capital

 

29,816

 

27,850

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

Banco IBM - Working capital

 

8,455

 

8,914

 

CDI + 0.27% to 1.33 (f)

 

12 semiannual installments from June 2015

 

CPFL Energia guarantee

CPFL Jaguari

                   

Banco do Brasil - Working capital

 

4,118

 

3,846

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

Banco IBM - Working capital

 

12,040

 

13,266

 

100.0% of CDI

 

14 semiannual installments from December 2012

 

CPFL Energia guarantee

Banco IBM - Working capital

 

12,073

 

12,825

 

CDI + 0.1%

 

12 semiannual installments from October 2014

 

CPFL Energia guarantee

CPFL Mococa

                   

Banco do Brasil - Working capital

 

26,977

 

25,198

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

Banco IBM - Working capital

 

3,907

 

4,305

 

100.0% of CDI

 

14 semiannual installments from December 2012

 

CPFL Energia guarantee

Banco IBM - Working capital

 

13,983

 

14,663

 

CDI + 0.27%

 

12 semiannual installments from March 2015

 

CPFL Energia guarantee

CPFL Serviços

                   

Banco IBM - Working capital

 

4,330

 

5,111

 

CDI + 0.10%

 

11 semiannual installments from June 2013

 

CPFL Energia guarantee

CPFL Geração

                   

Banco do Brasil - Working capital

 

642,113

 

642,124

 

109.5% of CDI

 

1 installment in March 2019

 

CPFL Energia guarantee

CPFL Renováveis

                   

HSBC

 

250,442

 

290,679

 

CDI + 0.5% (i)

 

8 annual installment from June 2013

 

Pledge of shares

Safra

 

138,154

 

-

 

105% of CDI

 

14 installment from August 2016

 

Redeemable preferred shares structure

Banking credit notes -BCN- Banco BBM

 

31,157

 

-

 

CDI + 3.30%

 

1 installment in January 2017

 

No guarantee

Banking credit notes -BCN- Banco ABC

 

44,231

 

-

 

CDI + 3.80%

 

1 installment in December 2017

 

No guarantee

CPFL Telecom

                   

Banco IBM - Working capital

 

33,606

 

35,689

 

CDI + 0.18%

 

12 semiannual installments from August 2014

 

CPFL Energia guarantee

Others

                   

Eletrobrás

                   

CPFL Paulista

 

3,242

 

3,931

 

RGR + 6% to 6.5%

 

monthly installments from August 2006

 

Receivables and promissory notes

CPFL Piratininga

 

13

 

88

 

RGR + 6%

 

monthly installments from August 2006

 

Receivables and promissory notes

RGE

 

6,614

 

7,658

 

RGR + 6%

 

monthly installments from August 2006

 

Receivables and promissory notes

CPFL Santa Cruz

 

743

 

1,029

 

RGR + 6%

 

monthly installments from January 2007

 

Receivables and promissory notes

CPFL Leste Paulista

 

425

 

532

 

RGR + 6%

 

monthly installments from February 2008

 

Receivables and promissory notes

CPFL Sul Paulista

 

411

 

544

 

RGR + 6%

 

monthly installments from August 2007

 

Receivables and promissory notes

CPFL Jaguari

 

16

 

24

 

RGR + 6%

 

monthly installments from June 2007

 

Receivables and promissory notes

CPFL Mococa

 

143

 

170

 

RGR + 6%

 

monthly installments from January 2008

 

Receivables and promissory notes

Others

 

5,925

 

131,751

           

Subtotal local currency - Cost

 

7,396,399

 

7,744,225

           

Foreign Currency

                   

Measured at fair value

                   

Financial Institutions

                   

CPFL Energia

                   

Santander

 

-

 

293,660

 

US$ + 1.547% (3)

 

1 installment in February 2016

 

No guarantee

Bradesco

 

-

 

154,665

 

US$ + 1.72% (2) (f)

 

1 installment in June 2016

 

No guarantee

Santander

 

166,066

 

197,044

 

US$ + 1.918% (3)

 

1 installment in September 2016

 

No guarantee

CPFL Paulista

                   

Bank of America Merrill Lynch

 

329,969

 

397,324

 

US$ + 3.69 % (3)

 

1 installment in July 2016

 

CPFL Energia guarantee and promissory notes

Bank of America Merrill Lynch

 

145,986

 

175,750

 

US$+Libor 3 months+1.70% (4)

 

1 installment in September 2018

 

CPFL Energia guarantee and promissory notes

Bank of Tokyo-Mitsubishi

 

162,460

 

195,524

 

US$ + Libor 3 months + 0.88% (3) (g)

 

1 installment in February 2020

 

CPFL Energia guarantee and promissory notes

Bank of Tokyo-Mitsubishi

 

162,287

 

195,380

 

US$+Libor 3 months+0.80% (3) (f)

 

4 semiannual installments from September 2017

 

CPFL Energia guarantee and promissory notes

BNP Paribas

 

72,492

 

85,991

 

Euro + 1.6350% (3)

 

1 installment in January 2018

 

CPFL Energia guarantee and promissory notes

Citibank

 

162,394

 

195,502

 

US$+Libor 3 months + 1.35% (4)

 

1 installment in March 2019

 

CPFL Energia guarantee and promissory notes

Citibank

 

188,988

 

227,397

 

US$ + Libor 3 months + 1.44% (3)

 

1 installment in January 2020

 

CPFL Energia guarantee and promissory notes

HSBC

 

281,340

 

338,504

 

US$ + Libor 3 months + 1.30% (3)

 

1 installment in January 2018

 

CPFL Energia guarantee and promissory notes

J.P. Morgan

 

129,893

 

156,381

 

US$ + 2.28% to 2.32% (3)

 

1 installment in December 2017

 

CPFL Energia guarantee and promissory notes

J.P. Morgan

 

114,815

 

138,255

 

US$ + 2.36% to 2.39% (3)

 

1 installment in January 2018

 

CPFL Energia guarantee and promissory notes

J.P. Morgan

 

82,137

 

98,891

 

US$ + 2.74% (3)

 

1 installment in January 2019

 

CPFL Energia guarantee and promissory notes

J.P. Morgan

 

49,069

 

59,080

 

US$ + 2.2% (3)

 

1 installment in February 2018

 

CPFL Energia guarantee and promissory notes

Bank of America Merrill Lynch

 

487,840

 

587,094

 

US$ + Libor 3 months + 1.40% (3)

 

1 installment in February 2018

 

CPFL Energia guarantee and promissory notes

Mizuho Bank

 

243,307

 

292,895

 

US$+Libor 3 months+1.55% (3) (f)

 

3 semiannual installments from March 2018

 

CPFL Energia guarantee and promissory notes

Morgan Stanley

 

163,375

 

196,502

 

US$ + Libor 6 months + 1.75% (3)

 

1 installment in September 2016

 

CPFL Energia guarantee and promissory notes

Scotiabank

 

79,321

 

95,502

 

US$ + 3.3125% (3)

 

1 installment in July 2016

 

CPFL Energia guarantee and promissory notes

Syndicated loan - Bank of America Merrill Lynch, Citibank, HSBC and EDC-Export Development Canada

 

216,999

 

-

 

US$ + Libor 3 months + 2.7% (4)

 

5 semiannual installments from May 2019

 

CPFL Energia guarantee and promissory notes

CPFL Piratininga

                   

Bank of America Merrill Lynch

 

40,696

 

48,964

 

US$ + Libor 3 months + 1.15% (3)

 

1 installment in July 2016

 

CPFL Energia guarantee and promissory notes

Bank of America Merrill Lynch

 

81,317

 

97,849

 

US$ + Libor 3 months + 1.15% (3)

 

1 installment in August 2016

 

CPFL Energia guarantee and promissory notes

BNP Paribas

 

199,353

 

236,474

 

Euro + 1.6350% (3)

 

1 installment in January 2018

 

CPFL Energia guarantee and promissory notes

Citibank

 

203,434

 

244,778

 

US$ + Libor 3 months + 1.41% (3)

 

2 annual installments from January 2019

 

CPFL Energia guarantee and promissory notes

Citibank

 

162,394

 

195,502

 

US$ + Libor 3 months + 1.35% (4)

 

1 installment in March 2019

 

CPFL Energia guarantee and promissory notes

Santander

 

147,205

 

177,268

 

US$ + 2.58% (3)

 

1 installment in July 2016

 

CPFL Energia guarantee and promissory notes

Scotiabank

 

103,603

 

124,737

 

US$ + 3.3125% (3)

 

1 installment in July 2016

 

CPFL Energia guarantee and promissory notes

Scotiabank

 

53,969

 

64,980

 

US$ + 2.08% (3)

 

1 installment in August 2017

 

CPFL Energia guarantee and promissory notes

Sumitomo

 

162,852

 

195,938

 

US$ + Libor 3 months + 1.35% (3) (f)

 

1 installment in April 2018

 

CPFL Energia guarantee and promissory notes

Syndicated loan - Bank of America Merrill Lynch, Citibank, HSBC and EDC-Export Development Canada

 

216,999

 

-

 

US$ + Libor 3 months + 2.7% (4)

 

5 semiannual installments from May 2019

 

CPFL Energia guarantee and promissory notes

RGE

                   

Bank of Tokyo-Mitsubishi

 

58,539

 

70,439

 

US$ + Libor 3 months + 0.82%(3)

 

1 installment in April 2018

 

CPFL Energia guarantee and promissory notes

Bank of Tokyo-Mitsubishi

 

266,384

 

320,602

 

US$ + Libor 3 months + 0.83%(3)

 

1 installment in May 2018

 

CPFL Energia guarantee and promissory notes

Citibank

 

48,759

 

58,683

 

US$ + Libor 3 months + 1.25%(4)

 

2 annual installments from May 2018

 

CPFL Energia guarantee and promissory notes

Citibank

 

228,113

 

274,426

 

US$ + Libor 6 months + 1.45% (3)

 

1 installment in April 2017

 

CPFL Energia guarantee and promissory notes

HSBC

 

44,264

 

53,260

 

US$ + Libor 3 months + 1.30% (3)

 

1 installment in October 2017

 

CPFL Energia guarantee and promissory notes

J.P. Morgan

 

198,839

 

239,453

 

US$ + 2.78% (3)

 

1 installment in February 2018

 

CPFL Energia guarantee and promissory notes

J.P. Morgan

 

-

 

139,466

 

US$ + 1.35% (3)

 

1 installment in February 2016

 

CPFL Energia guarantee and promissory notes

Syndicated loan - Bank of America Merrill Lynch, Citibank, HSBC and EDC-Export Development Canada

 

216,999

 

-

 

US$ + Libor 3 months + 2.7% (4)

 

5 semiannual installments from May 2019

 

CPFL Energia guarantee and promissory notes

CPFL Santa Cruz

                   

Santander

 

-

 

34,679

 

US$ + 2.544% (3)

 

1 installment in June 2016

 

CPFL Energia guarantee and promissory notes

CPFL Sul Paulista

                   

Santander

 

-

 

38,147

 

US$ + 2.544% (3)

 

1 installment in June 2016

 

CPFL Energia guarantee and promissory notes

CPFL Jaguari

                   

Santander

 

-

 

53,752

 

US$ + 2.544% (3)

 

1 installment in June 2016

 

CPFL Energia guarantee and promissory notes

CPFL Geração

                   

HSBC

 

324,579

 

390,757

 

US$+Libor 3 months + 1.30% (3)

 

1 installment in March 2017

 

CPFL Energia guarantee and promissory notes

CCB-China Construction Bank

 

97,453

 

-

 

US$+Libor 3 months + 1.60% (3) + 1.4% fee

 

1 installment in June 2019

 

CPFL Energia guarantee and promissory notes

CPFL Serviços

                   

J.P. Morgan

 

12,260

 

14,760

 

US$ + 1.75% (3)

 

1 installment in October 2016

 

CPFL Energia guarantee and promissory notes

Paulista Lajeado

                   

Banco Itaú

 

35,603

 

42,862

 

US$ + 3.196% (4)

 

1 installment in March 2018

 

CPFL Energia guarantee and promissory notes

CPFL Brasil

                   

Scotiabank

 

44,281

 

53,317

 

US$ + 2.779% (3)

 

1 installment in August 2018

 

CPFL Energia guarantee and promissory notes

                     

Mark to market

 

(175,905)

 

(312,249)

           
                     

Total Foreign Currency - fair value

 

6,010,726

 

6,940,180

           
                     

Borrowing costs(*)

 

(33,867)

 

(21,618)

           
                     

Total - Consolidated

 

13,373,258

 

14,662,787

           

 

64

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

The subsidiaries hold swaps converting the operating cost of currency variation to interest rate variation in reais. corresponding to :

(1) 143.85% of CDI

 

(3) 99% to 109% of CDI

       

(2) 95,2% of CDI

 

(4) 109.1% to 119% of CDI

       
                 

Effective rate:

               

(a) 30% to 40% of CDI

 

(e) 80.1% to 90% of CDI

 

(i) CDI + 0.73%

   

(b) 40.1% to 50% of CDI

 

(f) 100.1% to 110% of CDI

 

(J) Fixed rate 10.57%

   

(c) 60.1% to 70% of CDI

 

(g) 110.1% to 120% of CDI

       

(d) 70.1% to 80% of CDI

 

(h) 120.1% to 130% of CDI

       

 

 (*) In accordance with IAS 39 / CPC 08, this refers to the fundraising costs attributable to issuance of the respective debts

 (**) Syndicated transaction - foreign currency financial loans, with a group of financial institutions as counterparty.

 

 

In conformity with CPC 38 and 39 and IAS 32 and 39, the Company and its subsidiaries classified their debts as (i) other financial liabilities (or measured at amortized cost), and (ii) financial liabilities measured at fair value through profit and loss.

The objective of classification as financial liabilities of borrowings measured at fair value is to compare the effects of recognition of income and expense derived from marking derivatives to market, tied to the borrowings, in order to obtain more relevant and consistent accounting information. At June 30, 2016, the total balance of the borrowings measured at fair value was R$ 6,010,726 (R$ 6,940,180 at December 31, 2015).

Changes in the fair values of these borrowings are recognized in the finance income/cost of the Company and its subsidiaries. In June 30, 2016 the accumulated gains of R$ 175,905 (R$ 312,249 at December 31, 2015) on marking the borrowings to market, less losses of R$ 50,359 (R$ 184,518 at December 31, 2015) of marking to market the derivative financial instruments contracted as a hedge against foreign exchange variations (note 33), resulted in a total net gain of R$ 125,546 (R$ 127,731 at December 31, 2015).

 

The maturities of the principal of borrowings are scheduled as follows:

  

Maturity

 

Consolidated

From July 1, 2017

 

800,510

2018

 

3,778,125

2019

 

2,524,457

2020

 

1,294,193

2021

 

665,399

2022 to 2026

 

1,443,177

2027 to 2031

 

564,392

2032 to 2036

 

34,066

Subtotal

 

11,104,319

Mark to market

 

(157,131)

Total

 

10,947,188

 

 

65

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

Main borrowings in the period:

 

          R$ thousand

Company

 

Bank / credit line

 

Total approved

 

Released in 2016

 

Released net of fundraising costs

 

Interest

 

Utilization

Local currency:

                       

Investment:

                       

CPFL Paulista

 

FINEM VII

 

427,716

 

27,075

 

26,421

 

Quarterly

 

Subsidiary's investment plan

CPFL Piratininga

 

FINEM VI

 

194,862

 

7,866

 

7,586

 

Quarterly

 

Subsidiary's investment plan

RGE

 

FINEM VII

 

266,790

 

21,125

 

20,740

 

Quarterly

 

Subsidiary's investment plan

CPFL Serviços

 

FINAME (a)

 

6,011

 

1,730

 

1,730

 

Quarterly

 

Purchase of machinery and equipment

CPFL Renováveis

 

FINEM XIII

 

379,948

 

38,873

 

38,873

 

Monthly

 

Subsidiary's investment plan

CPFL Renováveis

 

FINEM XXVII

 

69,103

 

67,628

 

67,628

 

Monthly

 

Subsidiary's investment plan

CPFL Renováveis

 

FINEM XXVI

 

764,109

 

52,000

 

50,890

 

Monthly

 

Subsidiary's investment plan

                         

Financial institutions:

                       

CPFL Paulista

 

Syndicated loan : Bank of America Merrill Lynch, Citibank, HSBC e EDC / Law 4.131

 

236,127

 

236,127

 

232,458

 

Quarterly

 

Working capital improvement

CPFL Piratininga

 

Syndicated loan : Bank of America Merrill Lynch, Citibank, HSBC e EDC / Law 4.131

 

236,127

 

236,127

 

232,461

 

Quarterly

 

Working capital improvement

RGE

 

Syndicated loan : Bank of America Merrill Lynch, Citibank, HSBC e EDC / Law 4.131

 

236,127

 

236,127

 

232,461

 

Quarterly

 

Working capital improvement

CPFL Geração

 

CCB China / Law 4.131 (a)

 

104,454

 

104,454

 

104,454

 

Quarterly

 

Working capital improvement

CPFL Renováveis - Alto Irani

 

Banco Safra / redeemable preferred shares of the subsidiary Alto Irani (a)

 

75,000

 

75,000

 

73,416

 

Semiannual

 

Subsidiary's investment plan

CPFL Renováveis - Plano Alto

 

Banco Safra / redeemable preferred shares of the subsidiary Plano Alto (a)

 

55,000

 

55,000

 

53,838

 

Semiannual

 

Subsidiary's investment plan

CPFL Renováveis parent company

 

Banco BBM/BCN (a)

 

30,000

 

30,000

 

30,000

 

Bullet

 

Working capital improvement

CPFL Renováveis parent company

 

Banco ABC/BCN (a)

 

44,000

 

44,000

 

44,000

 

Bullet

 

Subsidiary's investment plan

       

3,125,374

 

1,233,132

 

1,216,956

       

 

(a) the agreement has no restrictive covenants

 

 

Restrictive covenants

Borrowings are subject to certain restrictive covenants and include clauses that require the Company and/or its subsidiaries to maintain certain financial ratios within pre-established parameters. The loan contracts also include non-financial restrictive clauses, complied with in accordance with the latest assessment period.

 

Some loans contracted or with releases in 2016 have the clauses related to financial indicators, as follow:

 

FINEM VI and VII - CPFL Paulista, CPFL Piratininga and RGE

Maintenance, by the subsidiaries, of the following ratios:

·         Net indebtedness divided by EBITDA – maximum of 3.5

·         Net indebtedness divided by the sum of net indebtedness and Shareholder’s Equity – maximum of 0.90

 

CPFL Renováveis (calculated in indirect subsidiary CPFL Renováveis and its subsidiaries, except when mentioned in each specific item)

FINEM XIII

·         Maintaining the Debt Service Coverage Ratio (ICSD) at 1.3 or more.

 

FINEM XXVI

 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

·         Maintaining the Debt Service Coverage Ratio (ICSD) at 1.3 or more in the subsidiaries covered by the contract.

·         Maintaining the annual ICSD recorded in the consolidated financial statements for the subsidiary Turbina 16 at 1.3 or more.

 

FINEM XXVII

·         Maintaining the ICSD at 1.2 or more;

·         Equity ratio (ICP), defined as the ratio of Equity to Total Assets, at 39.5% or more;

 

Syndicated loan - Bank of America Merrill Lynch, Citibank, HSBC, EDC (Law 4.131) – CPFL Paulista, CPFL Piratininga and RGE

Maintaining the following ratios in the Company's consolidated financial statements

·         Net indebtedness divided by EBITDA – maximum of 3.75;

·         EBITDA divided by Financial Income (Expense) - maximum of 2.25.

 

The details of the restrictive conditions for other debts are presented in the Financial Statements of December 31, 2015.

 

The Management of the Company and its subsidiaries monitor these ratios systematically and constantly to ensure that the contractual conditions are complied with. In the opinion of the Management of the Company and of its subsidiaries, all the restrictive covenants and clauses that are measured half-yearly and annually are adequately complied with in accordance with the latest assessment period, at June 30, 2016 and December 31, 2015, respectively.

 

 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

( 17 )   DEBENTURES AND INTERESTS ON DEBENTURES

 

                                   
     

Consolidated

     

June 30, 2016

 

December 31, 2015

 

Issue

 

Current and noncurrent interest

 

Current

 

Noncurrent

 

Total

 

Current and noncurrent interest

 

Current

 

Noncurrent

 

Total

CPFL Paulista

                                 

6th Issue

Single series

 

46,727

 

-

 

660,000

 

706,727

 

47,292

 

-

 

660,000

 

707,292

7th Issue

Single series

 

28,644

 

-

 

505,000

 

533,644

 

29,546

 

-

 

505,000

 

534,546

     

75,371

 

-

 

1,165,000

 

1,240,371

 

76,838

 

-

 

1,165,000

 

1,241,838

                                   

CPFL Piratininga

                                 

6th Issue

Single series

 

7,788

 

-

 

110,000

 

117,788

 

7,882

 

-

 

110,000

 

117,882

7th Issue

Single series

 

13,329

 

-

 

235,000

 

248,329

 

13,749

 

-

 

235,000

 

248,749

     

21,117

 

-

 

345,000

 

366,117

 

21,631

 

-

 

345,000

 

366,631

                                   

RGE

                                 

6th Issue

Single series

 

35,399

 

-

 

500,000

 

535,399

 

35,828

 

-

 

500,000

 

535,828

7th Issue

Single series

 

9,643

 

-

 

170,000

 

179,643

 

9,946

 

-

 

170,000

 

179,946

     

45,042

 

-

 

670,000

 

715,042

 

45,774

 

-

 

670,000

 

715,774

                                   

CPFL Santa Cruz

                                 

1st Issue

Single series

 

568

 

32,500

 

32,500

 

65,568

 

568

 

-

 

65,000

 

65,568

                                   

CPFL Brasil

                                 

2nd Issue

Single series

 

-

 

-

 

-

 

-

 

2,794

 

-

 

228,000

 

230,794

                                   

CPFL Geração

                                 

5th Issue

Single series

 

13,374

 

546,000

 

546,000

 

1,105,374

 

13,382

 

-

 

1,092,000

 

1,105,382

6th Issue

Single series

 

23,523

 

-

 

460,000

 

483,523

 

23,531

 

-

 

460,000

 

483,531

7th Issue

Single series

 

17,129

 

-

 

635,000

 

652,129

 

16,770

 

-

 

635,000

 

651,770

8th Issue

Single series

 

839

 

-

 

83,977

 

84,816

 

3,153

 

-

 

80,024

 

83,177

     

54,864

 

546,000

 

1,724,977

 

2,325,841

 

56,835

 

-

 

2,267,024

 

2,323,859

CPFL Renováveis

                                 

1st Issue - SIIF (*)

1st to 12th series

 

780

 

40,249

 

465,033

 

506,062

 

788

 

38,965

 

467,577

 

507,329

1st Issue - PCH Holding 2

Single series

 

663

 

8,701

 

132,091

 

141,455

 

616

 

8,701

 

140,792

 

150,109

1st Issue - Renováveis

Single series

 

5,883

 

43,000

 

322,500

 

371,383

 

6,579

 

43,000

 

365,500

 

415,079

2nd Issue - Renováveis

Single series

 

12,074

 

30,000

 

270,000

 

312,074

 

11,894

 

-

 

300,000

 

311,894

3rd Issue - Renováveis

Single series

 

4,586

 

-

 

296,000

 

300,586

 

4,589

 

-

 

296,000

 

300,589

1st Issue - DESA

Single series

 

669

 

17,500

 

8,500

 

26,669

 

862

 

17,500

 

17,500

 

35,862

2nd Issue - DESA

Single series

 

22,528

 

-

 

65,000

 

87,528

 

16,487

 

-

 

65,000

 

81,487

1st Issue - T-16

Single series

 

-

 

-

 

-

 

-

 

1,810

 

277,200

 

-

 

279,010

1st Issue - Campos dos Ventos V

Single series

 

374

 

42,000

 

-

 

42,374

 

374

 

42,000

 

-

 

42,374

1st Issue - Santa Úrsula

Single series

 

275

 

30,800

 

-

 

31,075

 

275

 

30,800

 

-

 

31,075

1st Issue - Pedra Cheirosa I

Single series

 

2,134

 

-

 

52,200

 

54,334

 

-

 

-

 

-

 

-

1st Issue - Pedra Cheirosa II

Single series

 

1,954

 

-

 

47,800

 

49,754

 

-

 

-

 

-

 

-

1st Issue - Boa Vista II

Single series

 

2,044

 

-

 

50,000

 

52,044

 

-

 

-

 

-

 

-

     

53,964

 

212,250

 

1,709,124

 

1,975,338

 

44,274

 

458,165

 

1,652,369

 

2,154,808

                                   

Borrowing costs (**)

   

-

 

(2,908)

 

(23,606)

 

(26,514)

 

-

 

-

 

(28,842)

 

(28,842)

                                   
     

250,925

 

787,842

 

5,622,996

 

6,661,762

 

248,714

 

458,165

 

6,363,552

 

7,070,430

 

(*) These debentures can be converted into shares and, therefore, are considered in the calculation of the dilutive effect for earnings per share (note 25)

(**) In accordance with CPC 08/IAS 39, this refers to borrowings costs attributable to issuance of the respective debt instruments.

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

 

Issue

Quantity issued

 

Annual Remuneration

 

Annual effective rate

 

Amortization conditions

 

Collateral

CPFL Paulista

                   

6th Issue

Single series

660

 

CDI + 0.8% (2)

 

CDI + 0.87%

 

3 annual installments from July 2017

 

CPFL Energia guarantee

7th Issue

Single series

50,500

 

CDI + 0.83% (3)

 

CDI + 0.89%

 

4 annual installments from February 2018

 

CPFL Energia guarantee

                     
                     

CPFL Piratininga

                   

6th Issue

Single series

110

 

CDI + 0.8% (2)

 

CDI + 0.91%

 

3 annual installments from July 2017

 

CPFL Energia guarantee

7th Issue

Single series

23,500

 

CDI + 0.83% (2)

 

CDI + 0.89%

 

4 annual installments from February 2018

 

CPFL Energia guarantee

                     
                     

RGE

                   

6th Issue

Single series

500

 

CDI + 0.8% (2)

 

CDI + 0.88%

 

3 annual installments from July 2017

 

CPFL Energia guarantee

7th Issue

Single series

17,000

 

CDI + 0.83% (3)

 

CDI + 0.88%

 

4 annual installments from February 2018

 

CPFL Energia guarantee

                     
                     

CPFL Santa Cruz

                   

1st Issue

Single series

650

 

CDI + 1.4%

 

CDI + 1.52%

 

2 annual instalments from June 2017

 

CPFL Energia guarantee

                     

CPFL Brasil

                   

2nd Issue

Single series

2,280

 

CDI + 1.4%

 

CDI + 1.48%

 

2 annual instalments from June 2017

 

CPFL Energia guarantee

                     

CPFL Geração

                   

5th Issue

Single series

10,920

 

CDI + 1.4%

 

CDI + 1.48%

 

2 annual instalments from June 2017

 

CPFL Energia guarantee

6th Issue

Single series

46,000

 

CDI + 0.75% (1)

 

CDI + 0.75%

 

3 annual instalments from August 2018

 

CPFL Energia guarantee

7th Issue

Single series

63,500

 

CDI + 1.06%

 

CDI + 1.11%

 

1 installment in April 2019

 

CPFL Energia guarantee

8th Issue

Single series

1

 

IPCA + 5.86% (1)

 

103.33% of CDI

 

1 installment in April 2019

 

CPFL Energia guarantee

                     

CPFL Renováveis

                   

1st Issue - SIIF (*)

1st to 12th series

432,299,666

 

TJLP + 1%

 

TJLP + 1% + 0.6%

 

39 semi-annual installments from 2009

 

Liens

1st Issue - PCH Holding 2

Single series

1,581

 

CDI + 1.6%

 

CDI + 1.8%

 

9 annual installments from June 2015

 

CPFL Renováveis guarantee

1st Issue - Renováveis

Single series

43,000

 

CDI + 1.7%

 

CDI + 1.82%

 

Annual installments from May 2015

 

Assignment of dividends of BVP and PCH Holding

2nd Issue - Renováveis

Single series

300,000

 

114.0% of CDI

 

115.43% of CDI

 

5 annual instalments from June 2017

 

Unsecured

3rd Issue - Renováveis

Single series

29,600

 

117.25% of CDI

 

120.64% of CDI

 

1 installment in May 2020

 

Unsecured

1st Issue - DESA

Single series

20

 

CDI + 1.75%

 

CDI + 1.75%

 

3 semi-annual installments from May de 2016

 

Unsecured

2nd Issue - DESA

Single series

65

 

CDI + 1.34%

 

CDI + 1.34%

 

3 semi-annual installments from April de 2018

 

Unsecured

1st Issue - T-16

Single series

27,720

 

112.75% of CDI

 

116.94% of CDI

 

1 installment in December 2016

 

CPFL Renováveis guarantee

1st Issue - Campos dos Ventos V

Single series

4,200

 

112.75% of CDI

 

116.94% of CDI

 

1 installment in December 2016

 

CPFL Renováveis guarantee

1st Issue - Santa Úrsula

Single series

3,080

 

112.75% of CDI

 

116.94% of CDI

 

1 installment in December 2016

 

CPFL Renováveis guarantee

1st Issue - Pedra Cheirosa I

Single series

5,220

 

CDI + 2.85%

 

CDI + 2.85%

 

1 installment in September 2017

 

CPFL Renováveis guarantee

1st Issue - Pedra Cheirosa II

Single series

4,780

 

CDI + 2.85%

 

CDI + 2.85%

 

1 installment in September 2017

 

CPFL Renováveis guarantee

1st Issue - Boa Vista II

Single series

5,000

 

CDI + 2.85%

 

CDI + 2.85%

 

1 installment in September 2017

 

CPFL Renováveis guarantee

                     

The Company and its subsidiaries hold swaps that convert the prefixed component of interest on the operation to interest rate variation in reais, corresponding to:

(1) 100.15% to 106.9% of CDI

(2) 107% to 107.9% of CDI

(3) 108% to 108.1% of CDI

 

 

 The maturities of the debentures recognized in noncurrent liabilities are scheduled as follows:

 

Maturity

Consolidated

From July 1, 2017

558,501

2018

1,651,549

2019

1,916,286

2020

668,570

2021

447,026

2022 to 2026

300,234

2027 to 2031

80,831

Total

5,622,996

 

Main borrowings during the period

           

R$ thousand

Company

 

Issue

 

Quantity issued

 

Released in 2016

 

Released net of borrowing costs

 

Interest

 

Utilization

CPFL Renováveis - Pedra Cheirosa I

 

1st issue

 

5,220

 

52,200

 

51,602

 

Single payment

 

Subsidiary's investment plan

CPFL Renováveis - Pedra Cheirosa II

 

1st issue

 

4,780

 

47,800

 

47,251

 

Single payment

 

Subsidiary's investment plan

CPFL Renováveis - Boa Vista I!

 

1st issue

 

5,000

 

50,000

 

49,426

 

Single payment

 

Subsidiary's investment plan

           

150,000

 

148,279

       

 

RESTRICTIVE COVENANTS

The debentures are subject to certain restrictive covenants, including clauses that require the Company and its subsidiaries to maintain certain financial ratios within pre-established parameters. The loan contracts also include non-financial restrictive clauses, complied with in accordance with the latest assessment.

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

The debentures issued in 2016 contain no restrictive clauses that require the Company or its subsidiaries to maintain financial ratios.

 

The details of the restrictive conditions for other debts are presented in the Financial Statements of December 31, 2015.

 

The Management of the Company and its subsidiaries monitor those ratios systematically and constantly for the conditions to be fulfilled. In the opinion of the Management of the Company and of its subsidiaries, all the restrictive covenants and clauses that are measured half-yearly and annually are adequately complied with in accordance with the latest assessment period, at June 30, 2016 and December 31, 2015 respectively.

 

 

( 18 )   PRIVATE PENSION PLAN

 

The subsidiaries sponsor supplementary retirement and pension plans for their employees. The main characteristics of these plans are as follows:

18.1     Characteristics

CPFL Paulista

The plan currently in force for the employees of the subsidiary CPFL Paulista through Fundação CESP is a Mixed Benefit Plan, with the following characteristics:

(i)      Defined Benefit Plan (“BD”) – in force until October 31, 1997 – a defined benefit plan, which grants a Proportional Supplementary Defined Benefit (“BSPS”), in the form of a lifetime income convertible into a pension, to participants enrolled prior to October 31, 1997, the amount being defined in proportion to the accumulated past service time up to that date, based on compliance with the regulatory requirements for granting. The total responsibility for coverage of actuarial deficits of this plan falls to the subsidiary.

 

(ii)     Mixed model, as from November 1, 1997, which covers:

Additionally, the subsidiary’s Managers may opt for a Free Benefit Generator Plan – PGBL (defined contribution), operated by either Banco do Brasil or Bradesco.

 

CPFL Piratininga

The plan currently in force for the employees of the subsidiary CPFL Piratininga through Fundação CESP is a Supplementary Retirement and Pension Plan with the following characteristics:

(i) Defined Benefit Plan (“BD”) - in force until March 31, 1998 – a defined benefit plan, which grants a Proportional Supplementary Defined Benefit (BSPS), in the form of a lifetime income convertible into a pension to participants enrolled until March 31, 1998, in an amount calculated in proportion to the accumulated past service time up to that date, based on compliance with the regulatory requirements for granting. In the event of death while working or the onset of a disability, the benefits incorporate the entire past service time. CPFL Piratininga has full responsibility for covering the actuarial deficits of this Plan.

(ii) Defined Benefit Plan - in force after March 31, 1998 – defined-benefit type plan, which grants a lifetime income convertible into a pension based on the past service time accumulated after March 31, 1998, based on 70% of the average actual monthly salary for the last 36 months of active service. In the event of death while working or the onset of a disability, the benefits incorporate the entire past service time. The responsibility for covering the actuarial deficits of this Plan is equally divided between CPFL Piratininga and the participants.

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

(iii) Variable Contribution Plan – implemented together with the Defined Benefit plan effective after March 31, 1998. This is a defined-benefit type pension plan up to the granting of the income, and generates no actuarial liability for CPFL Piratininga. The pension plan only becomes a Defined Benefit type plan after the granting of the lifetime income, convertible (or not) into a pension, and accordingly starts to generate actuarial liabilities for the subsidiary.

Additionally, the subsidiary’s Managers may opt for a Free Benefit Generator Plan – PGBL (defined contribution), operated by either Banco do Brasil or Bradesco.

 

RGE

A defined benefit type plan, with a benefit level equal to 100% of the adjusted average of the most recent salaries, less the presumed Social Security benefit, with a Segregated Net Asset managed by Fundação CEEE. Only those whose employment contracts were transferred from CEEE to RGE are entitled to this benefit. A defined benefit private pension plan was set up in January 2006 with Bradesco Vida e Previdência for employees hired from 1997.

 

CPFL Santa Cruz

The benefits plan of the subsidiary CPFL Santa Cruz, managed by BB Previdência - Fundo de Pensão do Banco do Brasil, is a defined contribution plan.

 

CPFL Leste Paulista, CPFL Sul Paulista, CPFL Mococa and CPFL Jaguari

In December 2005, the companies joined the CMSPREV private pension plan, managed by IHPREV Pension Fund. The plan is structured as a defined contribution plan.

 

CPFL Geração

The employees of the subsidiary CPFL Geração participate in the same pension plan as CPFL Paulista.

In addition, managers may opt for a Free Benefit Generator Plan – PGBL (defined contribution), operated by either Banco do Brasil or Bradesco.

 

18.2     Movements in the defined benefit plans:

The movements in the period in the net actuarial liability are as follows:

 

CPFL Paulista

 

CPFL Piratininga

 

CPFL Geração

 

RGE

 

Total

                   

Net actuarial liability at December 31, 2015

437,670

 

10,308

 

10,277

 

-

 

458,255

Expenses (income) recognized in the statement of profit or loss

26,124

 

1,329

 

643

 

(271)

 

27,825

Sponsors' contributions transferred during the year

(31,788)

 

(7,458)

 

(662)

 

(5,756)

 

(45,664)

Actuarial loss (gain): effect of changes in financial assumptions

277,013

 

102,326

 

8,088

 

16,936

 

404,363

Net actuarial liability at June 30, 2016

709,019

 

106,505

 

18,346

 

10,909

 

844,779

Other contributions

19,678

 

826

 

206

 

82

 

20,792

Total liability

728,697

 

107,331

 

18,552

 

10,991

 

865,571

                   

Current

               

4,268

Noncurrent

               

861,304

 

In this quarter, due to the change in the Brazilian macroeconomic scenario in comparison with December 31, 2015, the actuarial reports were updated to the base date of June 30, 2016 and the balances of liabilities and other comprehensive income were adjusted at the amount of R$ 404,363 to reflect the new reports. 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

The income and expense recognized as operating cost are shown below:

 

1st semester 2016

 

CPFL Paulista

 

CPFL Piratininga

 

CPFL Geração

 

RGE

 

Consolidated

Service cost

380

 

1,254

 

34

 

10

 

1,678

Interest on actuarial obligations

229,324

 

58,520

 

5,482

 

16,944

 

310,270

Expected return on plan assets

(203,580)

 

(58,446)

 

(4,872)

 

(17,744)

 

(284,642)

Interest on the effect of asset ceiling

-

 

-

 

-

 

520

 

520

Total expense (income)

26,124

 

1,329

 

643

 

(271)

 

27,825

                   
                   
 

1st semester 2015

 

CPFL Paulista

 

CPFL Piratininga

 

CPFL Geração

 

RGE

 

Consolidated

                   

Service cost

636

 

1,940

 

94

 

(16)

 

2,654

Interest on actuarial obligations

210,158

 

54,666

 

4,876

 

15,449

 

285,149

Expected return on plan assets

(183,770)

 

(51,262)

 

(4,744)

 

(15,337)

 

(255,113)

Total expense (income)

27,021

 

5,344

 

227

 

97

 

32,689

 

As mentioned above, due to the changes in the Brazilian macroeconomic scenario, the actuarial reports were updated to June 2016. The estimated income and expense to be recorded in the second quarter of 2016, based on the most recent actuarial reports, is shown below:

 

 

2nd semester 2016 - estimated

 

CPFL Paulista

 

CPFL Piratininga

 

CPFL Geração

 

RGE

 

Consolidated

                   

Service cost

447

 

1,987

 

42

 

49

 

2,525

Interest on actuarial obligations

238,547

 

62,637

 

5,703

 

18,267

 

325,154

Expected return on plan assets

(200,604)

 

(57,161)

 

(4,711)

 

(17,887)

 

(280,363)

Total expense (income)

38,390

 

7,463

 

1,034

 

429

 

47,316

 

The main assumptions taken into consideration in the actuarial calculation, based on the actuarial reports as at June 30, 2016, December 31, 2015 and 2014, were as follows:

    

 

June 30, 2016

 

December 31, 2015

 

December 31, 2014

           

Nominal discount rate for actuarial liabilities:

11.25% p.a.

 

12.67% p.a.

 

11.46% p.a.

Nominal Return Rate on Assets:

11.25% p.a.

 

12.67% p.a.

 

11.46% p.a.

Estimated Rate of nominal salary increase:

6.79% p.a.

 

6.79% p.a.

 

8.15% p.a.

Estimated Rate of nominal benefits increase:

0.00% p.a.

 

0.00% p.a.

 

0.00% p.a.

Estimated long-term inflation rate (basis for determining the nominal rates above)

5.00% p.a.

 

5.00% p.a.

 

5.00% p.a.

General biometric mortality table:

AT-2000 (-10)

 

AT-2000 (-10)

 

AT-2000 (-10)

Biometric table for the onset of disability:

Low light

 

Low light

 

Low light

Expected turnover rate:

ExpR_2012**

 

ExpR_2012**

 

ExpR_2012*

Likelihood of reaching retirement age:

100% on first eligibility for a full benefit

 

100% on first eligibility for a full benefit

 

100% on first eligibility for a full benefit

(*) FUNCESP experience

         

(**) FUNCESP experience, with aggravation of 40%

         

 

 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

( 19 )   REGULATORY CHARGES

 

 

Consolidated

 

June 30, 2016

 

December 31, 2015

Fee for the use of water resources

1,662

 

2,482

Global reversal reserve - RGR

17,469

 

17,446

ANEEL inspection fee

1,516

 

1,764

Energy development account - CDE

297,804

 

526,199

Tariff flags and other

861

 

304,127

Total

319,311

 

852,017

 

 

Energy development account – CDE: refer to the (i) annual CDE quota for the year 2016 in the amount of R$ 170,600 (R$ 401,347 at December 31, 2015); (ii) quota intended for return of the CDE injection for the period from January 2013 to January 2014 in the amount of R$ 44,034 (R$ 45,618 at December 31, 2015); and (iii) quota intended for return of the injection into the Regulated Contracting Environment (ACR) account for the period from February to December 2014, in the amount of R$ 83,166 (R$ 79,231 at December 31, 2015). The subsidiaries conducted matching of accounts between the amount of CDE payable and the accounts receivable – CDE injection (note 11) the amount of R$ 428,387 in the first semester of 2016.

Tariff flags and other: refer basically to the amount to be passed on to the Account Centralizing Tariff Flag Resources (“CCRBT”) (note 26.5). As a result of the improved hydrological conditions, the tariff flag charges were suspended in the quarter, leaving only rebilling.

 

 

( 20 )   TAXES, FEES AND CONTRIBUTIONS

 

 

Consolidated

 

June 30, 2016

 

December 31, 2015

Current

     

ICMS (State VAT)

374,693

 

384,151

PIS (tax on revenue)

22,414

 

33,199

COFINS (tax on revenue)

104,179

 

159,317

IRPJ (corporate income tax)

163,803

 

30,751

CSLL (social contribution on net income)

50,298

 

12,498

Other

30,678

 

33,427

Total

746,067

 

653,342

 

 

 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

( 21 )   PROVISION FOR TAX, CIVIL AND LABOR RISKS AND ESCROW DEPOSITS

 

 

Consolidated

 

June 30, 2016

 

December 31, 2015

 

Provision for tax, civil and labor risks

 

Escrow Deposits

 

Provision for tax, civil and labor risks

 

Escrow Deposits

Labor

146,571

 

78,849

 

171,989

 

78,345

               

Civil

199,243

 

113,906

 

194,530

 

112,909

               

Tax

             

FINSOCIAL

31,135

 

87,496

 

29,917

 

84,092

Income Tax

143,850

 

144,968

 

138,524

 

886,271

Other

70,923

 

67,998

 

15,920

 

63,600

 

245,909

 

300,462

 

184,362

 

1,033,964

               

Other

26,311

 

2,310

 

18,654

 

2,310

               

Total

618,034

 

495,527

 

569,534

 

1,227,527

 

The movements in the provision for tax, civil and labor risks are shown below:

 

Consolidated

 

December 31, 2015

 

Addition

 

Reversal

 

Payment

 

Monetary restatement

 

June 30, 2016

Labor

171,989

 

66,818

 

(36,957)

 

(65,618)

 

10,338

 

146,571

Civil

194,530

 

57,746

 

(18,182)

 

(53,201)

 

18,350

 

199,243

Tax

184,362

 

51,518

 

(33)

 

(3)

 

10,064

 

245,909

Other

18,654

 

9,190

 

(1,871)

 

(1,340)

 

1,679

 

26,311

 

569,534

 

185,273

 

(57,042)

 

(120,162)

 

40,432

 

618,034

 

The provision for tax, civil and labor risks was based on the assessment of the risks of losing the lawsuits to which the Company and its subsidiaries are parties, where the likelihood of loss is probable in the opinion of the external legal counselors and the Management of the Company and its subsidiaries.

The additions to provisions for tax risks in the first semester of 2016 largely refer to challenges by certain subsidiaries in relation to PIS and COFINS on financial income, the balances of which were previously classified in Taxes Payable.

Details of the provisions for tax, civil and labor risks and escrow deposits are presented in the financial statements of December 31, 2015.

Possible losses

 

The Company and its subsidiaries are parties to other lawsuits in which Management, supported by its external legal counselors, believes that the chances of a successful outcome are possible, due to a solid defensive position in these cases. It is not yet possible to predict the outcome of the courts’ decisions or any other decisions in similar proceedings considered probable or remote. The claims relating to possible losses, at June 30, 2016, were as follows:

(i)      R$ 583,711 labor (R$ 659,636 at December 31, 2015) related mainly to workplace accidents, hazardous duty premium, overtime, etc.;

(ii)     R$ 732,881 civil (R$ 697,242 at December 31, 2015) related mainly to bodily injury, environmental impacts and tariff increases; 

(iii)    R$ 3,747,494 tax (R$ 3,600,368 at December 31, 2015), related mainly to ICMS, FINSOCIAL, PIS and COFINS and Income tax. One of the main refer to the deductibility of the expense recognized in 1997 in relation to the commitment assumed for the pension plan of the employees of the subsidiary CPFL Paulista with Fundação CESP in the estimated amount of R$ 1,106,266. In January 2016, the subsidiary obtained court decisions authorizing the replacement of the escrow deposits related to this case by financial guarantees (letter of guarantee and performance bond); the withdrawals on behalf of the subsidiary occurred in 2016.  There is an appeal by the Office of Attorney-General of the National Treasury in one of the cases, with suspensive effect, which is awaiting judgment by the Federal Regional Court; and

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

(iv)    R$ 91,947 regulatory (R$ 71,514 at December 31, 2015). The possible regulatory loss includes mainly the collection of the system service charge - ESS, established in the CNPE Resolution 3 of March 6, 2013. The total amount of the risk is R$ 38,052, related mainly to the subsidiaries CPFL Brasil (R$ 8,496), CPFL Renováveis (R$ 12,642), Ceran (R$ 13,644) and Paulista Lajeado (R$ 2,823).

As regards labor contingencies, the Company informs, as mentioned in Note 22 to the financial statements at December 31, 2015, that discussions are in course concerning the possibility of changing the inflation adjustment index adopted by the Labor Court. There has been no change in the status of the discussion since then and the risk is still classified as possible.

Based on the opinion of their external legal advisers, Management of the Company and its subsidiaries consider that the registered amounts represent best estimate.

 

( 22 )   USE OF PUBLIC ASSET           

 

   

Consolidated

Subsidiary

 

June 30, 2016

 

December 31, 2015

 

Number of remaining installments

 

Interest rates

CERAN

 

96,093

 

92,581

 

237

 

IGP-M + 9.6% p.a.

                 

Current

 

9,941

 

9,457

       

Noncurrent

 

86,152

 

83,124

       

 

 

( 23 )   OTHER PAYABLES

 

 

Consolidated

 

Current

 

Noncurrent

 

June 30, 2016

 

December 31, 2015

 

June 30, 2016

 

December 31, 2015

Consumers and concessionaires

74,282

 

53,959

 

-

 

-

Energy efficiency program - PEE

284,772

 

295,745

 

32,607

 

35,597

Research & Development - P&D

61,930

 

84,943

 

39,857

 

36,426

National scientific and technological development fund - FNDCT

1,907

 

4,115

 

-

 

-

Energy research company - EPE

961

 

2,065

 

-

 

-

Reversion fund

-

 

-

 

17,750

 

17,750

Advances

251,638

 

141,228

 

9,470

 

10,041

Tariff discounts - CDE

25,244

 

54,749

 

-

 

-

Provision for socio environmental costs

-

 

-

 

55,569

 

53,378

Payroll

11,786

 

13,136

 

-

 

-

Profit sharing

38,787

 

49,227

 

3,935

 

5,099

Collections agreement

54,956

 

130,282

 

-

 

-

Guarantees

-

 

-

 

27,057

 

28,531

Business combination

14,511

 

29,935

 

-

 

-

Other

30,077

 

45,587

 

4,114

 

4,326

Total

850,851

 

904,971

 

190,359

 

191,148

 

Advances: refer mainly to advances from customers in relation to advance billing by the subsidiary CPFL Renováveis, prior to provision of the energy or service.

 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

( 24 )   EQUITY

 

The shareholders’ interest in the Company’s equity at June 30, 2016 and December 31, 2015 is shown below:

 

   

Number of shares

   

June 30, 2016

 

December 31, 2015

Shareholders

 

Common shares

 

Interest %

 

Common shares

 

Interest %

BB Carteira Livre I FIA

 

269,285,374

 

26.45%

 

262,698,037

 

26.45%

Caixa de Previdência dos Funcionários do Banco do Brasil - Previ

 

30,502,185

 

3.00%

 

29,756,032

 

3.00%

Camargo Correa S.A.

 

27,435

 

0.00%

 

26,764

 

0.00%

ESC Energia S.A.

 

239,956,080

 

23.57%

 

234,086,204

 

23.57%

Bonaire Participações S.A.

 

1,269,386

 

0.12%

 

1,238,334

 

0.12%

Energia São Paulo FIA

 

150,136,050

 

14.75%

 

146,463,379

 

14.75%

Fundação Petrobras de Seguridade Social - Petros

 

1,861,659

 

0.18%

 

1,816,119

 

0.18%

BNDES Participações S.A.

 

68,592,097

 

6.74%

 

66,914,177

 

6.74%

Antares Holdings Ltda.

 

16,967,165

 

1.67%

 

16,552,110

 

1.67%

Brumado Holdings Ltda.

 

36,497,075

 

3.59%

 

35,604,273

 

3.59%

Members of the Executive Board

 

118,878

 

0.01%

 

105,672

 

0.01%

Other shareholders

 

202,701,362

 

19.91%

 

197,753,114

 

19.91%

Total

 

1,017,914,746

 

100.00%

 

993,014,215

 

100.00%

 

24.1        Capital increase approval

On April 8, 2016, the company disclosed to its shareholders and to the market in general, in a Relevant Fact, that its controlling shareholders had signed an instrument releasing shareholders from the shareholders' agreement in relation to the shares they will receive in connection with the share bonus process.

An Extraordinary General Meeting held on April 29, 2016 approved an increase in the capital of CPFL Energia to reinforce the Company's capital structure, through integralization of the amount of R$ 392,972 from the Statutory - Working Capital Reserve, by issuing 24,900,531 common shares, distributed as a bonus to the shareholders, free of charge, pursuant to Law 6404/76, Article 169.

 

24.2Share transfer between ESC Energia S.A. and Camargo Corrêa S.A.

On March 16, 2016, Extraordinary General Meetings of ESC Energia S.A. (“ESC”) and Camargo Corrêa S.A. (“CCSA”) approved the transfer of 5,870,000 of the Company's common shares held by ESC to CCSA. An Extraordinary General Meetings of ESC held on June 28, 2016 approved an increase in the capital of ESC, paid up by CCSA with the transfer of 124 of the Company's common shares.

The change in shareholding structure was registered with the bank responsible for the Company's book-issue shares (Banco do Brasil) on July 15, 2016, accordingly there is no effect on the Company's share structure at the date of these interim financial statements. There will be no change in the Company's controlling block as a result of this transaction.

Details of the items included in shareholders’ equity are described in the financial statements of December 31, 2015.

 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

( 25 )   EARNINGS PER SHARE

 

Earnings per share – basic and diluted

The calculation of the basic and diluted earnings per share for the quarters and semesters ended in June 30, 2016 and 2015 was based on the profit attributable to controlling shareholders and the weighted average number of common shares outstanding during the reporting periods. For diluted earnings per share, the calculation considered the dilutive effects of instruments convertible into shares, as shown below:

 

   

2nd quarter 2016

 

1st semester 2016

 

2nd quarter 2015

 

1st semester 2015

 

Numerator

                 

Profit attributable to controlling shareholders

 

259,811

 

531,160

 

124,180

 

293,150

 

Denominator

                 

Weighted average number of shares held by shareholders

 

1,017,914,746

(**)

1,017,914,746

(**)

1,017,914,746

(**)

1,017,914,746

(**)

Earnings per share - basic

                 
   

0.26

 

0.52

 

0.12

 

0.29

 
                   

Numerator

                 

Profit attributable to controlling shareholders

 

259,811

 

531,160

 

124,180

 

293,150

 

Dilutive effect of convertible debentures of subsidiary CPFL Renováveis (*)

 

-

 

-

 

-

 

(1,188)

 

Profit attributable to controlling shareholders

 

259,811

 

531,160

 

124,180

 

291,962

 
                   
                   

Denominator

 

1,017,914,746

(**)

1,017,914,746

(**)

1,017,914,746

(**)

1,017,914,746

(**)

Weighted average number of shares held by shareholders

                 

Earnings per share - diluted

 

0.26

 

0.52

 

0.12

 

0.29

 

 

 (*) Proportional to the percentage of the Company’s equity interest in the subsidiary in the respective periods.

(**) Considers the event that occurred on April 29, 2016, related to the capital increase through issue of 24,900,531 shares (note 24.1). In accordance with CPC 41/IAS 33, when there is an increase in the number of shares without an increase in resources, the number of shares is adjusted as if the event had occurred at the beginning of the oldest period presented

The dilutive effect of the numerator in the calculation of diluted earnings per share takes into account the dilutive effects of the debentures convertible into shares issued by subsidiaries of the indirect subsidiary CPFL Renováveis. The calculation of the effects was based on the assumption that these debentures would have been converted into common shares of the subsidiary at the beginning of each period.

The effects calculated in the denominator of indirect subsidiary CPFL Renováveis for calculation of diluted earnings per share resulting from the subsidiary’s share-based payment plan were considered anti-dilutive at quarters and semester ended June 30, 2016. For this reason, these effects were not included in the calculation for the period.

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

( 26 )   NET OPERATING REVENUE

 

 

Consolidated

 

2016

 

2015

Revenue from Electric Energy Operations

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

Consumer class

             

Residential

2,477,996

 

5,307,088

 

2,480,234

 

4,707,019

Industrial

1,304,671

 

2,668,812

 

1,459,992

 

2,641,228

Commercial

1,328,092

 

2,827,307

 

1,350,325

 

2,519,741

Rural

173,634

 

361,067

 

188,583

 

337,524

Public administration

174,314

 

341,040

 

186,652

 

332,926

Public lighting

137,367

 

288,163

 

142,690

 

242,006

Public services

215,696

 

451,046

 

231,202

 

407,931

(-) Transfers of revenues from excess demand and excess reactive power

(17,884)

 

(35,622)

 

(24,544)

 

(48,784)

Billed

5,793,886

 

12,208,900

 

6,015,133

 

11,139,591

Unbilled (net)

51,100

 

99,164

 

(70,015)

 

72,251

Other consumer charges / Emergency Charges - ECE/EAEE

-

 

-

 

2

 

2

(-) Transfers of revenues related to network usage charge of the captive consumers

(2,252,514)

 

(4,635,820)

 

(2,066,182)

 

(3,728,014)

Electricity sales to final consumers

3,592,472

 

7,672,244

 

3,878,938

 

7,483,830

               

Furnas Centrais Elétricas S.A.

136,258

 

258,377

 

121,941

 

238,904

Other concessionaires and licensees

530,497

 

1,001,344

 

524,397

 

1,033,073

(-) Transfers of revenues related to network usage charge of the captive consumers

(12,507)

 

(25,947)

 

-

 

-

Spot market energy

(26,794)

 

128,496

 

416,422

 

647,246

Electricity sales to wholesaler´s

627,454

 

1,362,270

 

1,062,761

 

1,919,223

               

Revenue due to Network Usage Charge - TUSD - Captive Consumers

2,265,022

 

4,661,767

 

2,066,182

 

3,728,014

Revenue due to Network Usage Charge - TUSD - Free Consumers

516,811

 

975,363

 

557,044

 

887,638

(-) Transfers of revenues from excess demand and excess reactive power

(4,304)

 

(8,546)

 

(6,083)

 

(11,900)

Revenue from construction of concession infrastructure

274,716

 

491,850

 

284,912

 

515,720

Sector financial asset and liability

(461,979)

 

(1,194,232)

 

895,571

 

1,584,155

Energy development account - CDE - low-income and other tariff discounts

241,895

 

495,019

 

229,990

 

409,292

Other revenues and income

109,669

 

204,287

 

83,696

 

172,917

Other operating revenues

2,941,830

 

5,625,508

 

4,111,312

 

7,285,836

Total gross revenues

7,161,756

 

14,660,022

 

9,053,011

 

16,688,888

Deductions from operating revenues

             

ICMS

(1,190,950)

 

(2,516,095)

 

(1,210,186)

 

(2,235,122)

PIS

(110,999)

 

(230,026)

 

(140,451)

 

(259,331)

COFINS

(511,296)

 

(1,059,565)

 

(646,947)

 

(1,194,548)

ISS

(2,627)

 

(4,903)

 

(2,135)

 

(3,902)

Global reversal reserve - RGR

(704)

 

(1,384)

 

(636)

 

(1,257)

Energy development account - CDE

(834,925)

 

(1,677,343)

 

(1,140,227)

 

(1,568,676)

Research and development and energy efficiency
programs

(33,110)

 

(66,289)

 

(35,894)

 

(78,536)

PROINFA

(28,545)

 

(48,909)

 

(23,956)

 

(47,910)

Tariff flags and other

(26,131)

 

(377,097)

 

(683,999)

 

(836,122)

IPI

(65)

 

(84)

 

-

 

(3)

FUST and FUNTEL

(9)

 

(17)

 

(6)

 

(10)

Other

(6,312)

 

(12,838)

 

(6,026)

 

(10,853)

 

(2,745,673)

 

(5,994,551)

 

(3,890,462)

 

(6,236,271)

Net revenue

4,416,082

 

8,665,472

 

5,162,549

 

10,452,617

 

78

 


 
 

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Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

Consolidated

 

2016

 

2015

Revenue from electric energy operations - in GWh (*)

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

Consumer class

             

Residential

4,003

 

8,268

 

3,840

 

8,311

Industrial

3,167

 

6,234

 

3,211

 

6,432

Commercial

2,482

 

4,937

 

2,216

 

4,758

Rural

519

 

1,031

 

501

 

1,045

Public administration

326

 

625

 

313

 

637

Public lighting

423

 

845

 

410

 

811

Public services

448

 

903

 

440

 

897

Billed

11,368

 

22,843

 

10,930

 

22,890

Own consumption

8

 

16

 

8

 

17

Electricity sales to final consumers

11,376

 

22,859

 

10,938

 

22,906

               

Furnas Centrais Elétricas S.A.

754

 

1,509

 

754

 

1,501

Other concessionaires and licensees

2,874

 

5,425

 

2,581

 

5,108

Current electric energy

1,215

 

1,764

 

1,400

 

1,718

Electricity sales to wholesaler´s

4,844

 

8,698

 

4,735

 

8,327

 

 

Consolidated

 

Number of Consumers (*)

 

June 30, 2016

 

June 30, 2015

Consumer class

     

Residential

6,998,280

 

6,827,647

Industrial

54,666

 

56,348

Commercial

468,018

 

478,643

Rural

247,231

 

244,025

Public administration

51,917

 

51,127

Public lighting

10,650

 

10,120

Public services

8,531

 

8,264

Total

7,839,293

 

7,676,174

(*) Information not reviewed by the independent auditors

 

26.1     Adjustment of revenues from excess demand and excess reactive power

The information on accounting and background is provided in Note 27.1 to the December 31, 2015 financial statements. 

 

26.2     Periodic tariff revision (“RTP”) e Annual adjustment (“RTA”):

       

2016

 

2015

Subsidiary

 

Month

 

RTA / RTP

 

Effect perceived by consumers (a)

 

RTA / RTP

 

Effect perceived by consumers (a)

CPFL Paulista

 

April

 

9.89%

 

7.55%

 

41.45%

 

4.67% (c)

CPFL Piratininga

 

October

 

(b)

 

(b)

 

56.29%

 

21.11% (c)

RGE

 

June

 

-1.48%

 

-7.51%

 

33.48%

 

-3.76% (c)

CPFL Santa Cruz

 

March

 

22.51%

 

7.15%

 

34.68%

 

27.96%

CPFL Leste Paulista

 

March

 

21.04%

 

13.32%

 

20.80%

 

24.89%

CPFL Jaguari

 

March

 

29.46%

 

13.25%

 

38.46%

 

45.70%

CPFL Sul Paulista

 

March

 

24.35%

 

12.82%

 

24.88%

 

28.38%

CPFL Mococa

 

March

 

16.57%

 

9.02%

 

23.34%

 

29.28%

 

a)     Represents the average effect perceived by consumers, as a result of elimination from the tariff base of financial components added in the annual adjustment for the previous year (not reviewed by the independent auditors).

b)     The related annual tariff increases for 2016 have not yet been made.

c)     Perception of consumers in comparison to the extraordinary tariff review of March 2015.

79

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

 

26.3     Energy Development Account - CDE – low income and other tariff discounts

Law 12,783 of January 11, 2013 determined that the amounts related to the low-income subsidy, as well as other tariff discounts shall be fully subsidized by amount from the CDE.

Income of R$ 495,019 was recognized in the first semester of 2016 (R$ 409,292 in the first semester of 2015), of which (i) R$ 49,753 for the low-income subsidy (R$ 35,017 in the first semester of 2015) and (ii) R$ 445,266 for other tariff discounts (R$ 374,276 in the first semester of 2015), against other receivables in line item “Receivables –Energy Development Account – CDE” (note 11) and “Payables – CDE” (note 23).

 

26.4     Tariff flags

The Tariff Flag implementation system is described in Note 27.5 to the December 31, 2015 financial statements.

In the first semester of 2016, the distribution subsidiaries billed their consumers the amount of R$ 377,097 (R$ 836,122 in the first semester of 2015), recorded in line item "Tariff flags and others”. In the first semester of 2016 were ratified by the ANEEL, R$ 670,021 for the months of November 2015 to May 2016 that was used to offset part of the sector’s financial assets (note 8), R$ 10,337 was passed on to the Account Centralizing Tariff Banner Resources (“CCRBT”), created by means of Decree No. 8,401/2015 and administered by the CCEE, and R$ 811 continues outstanding, recorded under liabilities – regulatory fees (note 19).

 

26.5     Energy development account – CDE

By means of Ratification Resolutions Nos. 2,077 of June 7, 2016, 2,018 of February 2, 2016, and 1,857 of February 27, 2015, the ANEEL established the definitive annual quotas of the CDE for the year 2015 and 2016. This quota comprises: (i) annual quota of the CDE – Usage account; and (ii) CDE quota – Energy, related to part of the CDE contributions received by the electric energy distribution concessionaires in the period from January 2013 to January 2014 (note 27), which should be paid by consumers and passed on to the CDE in five years as from the 2015 RTE. In addition, by means of Ratification Resolutions Nos. 2,004 of December 15, 2015 and 1,863 of March 31, 2015, the ANEEL established another quota intended for amortization of the ACR account, with payment and transfer to the CDE for an average period of five years as from the ordinary tariff process (RTA) for the year 2015.

 

80

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

( 27 )   COST OF ELECTRIC ENERGY

 

 

Consolidated

 

2016

 

2015

Electricity Purchased for Resale

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

Itaipu Binacional

504,062

 

1,050,715

 

665,702

 

1,273,321

Spot market / PROINFA

82,084

 

89,450

 

205,902

 

784,683

Energy purchased through auction in the regulated market and bilateral contracts

1,959,827

 

3,791,302

 

2,773,708

 

5,110,731

PIS and COFINS credit

(232,353)

 

(451,914)

 

(333,752)

 

(653,243)

Subtotal

2,313,621

 

4,479,553

 

3,311,561

 

6,515,492

               

Electricity network usage charge

             

Basic network charges

202,275

 

403,764

 

220,651

 

444,667

Transmission from Itaipu

12,920

 

25,414

 

10,289

 

25,635

Connection charges

18,939

 

35,345

 

12,168

 

23,393

Charges for use of the distribution system

9,572

 

18,907

 

11,024

 

21,265

System service charges - ESS

70,091

 

196,908

 

74,413

 

245,461

Reserve energy charges

70,829

 

101,387

 

-

 

-

PIS and COFINS credit

(33,700)

 

(68,710)

 

(28,417)

 

(66,373)

Subtotal

350,926

 

713,014

 

300,127

 

694,047

               

Total

2,664,546

 

5,192,567

 

3,611,688

 

7,209,539

 

 

Consolidated

 

2016

 

2015

Electricity Purchased for Resale - in GWh (*)

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

Itaipu Binacional

2,531

 

5,047

 

2,552

 

5,090

Spot market / PROINFA

623

 

1,170

 

982

 

2,739

Energy purchased through auction in the regulated market and bilateral contracts

11,870

 

23,734

 

11,011

 

21,646

Total

15,024

 

29,951

 

14,545

 

29,474

(*) Information not reviewed by the independent auditors

             

 

27.1 Generating Scaling Factor (“GSF”) and renegotiation of the hydrologic risk from 2015

The detailed record related to the Generating Scaling Factor - GSF in 2015 are provided in Note 28.2 of the December 31, 2015 financial statements. The generators that adhered to the renegotiation should terminate the lawsuits against the grantor of the concessions, and pay a risk premium related to the transfer of the GSF risk to the CCRBT.

In 2015, the subsidiaries Ceran, CPFL Jaguari Geração (Paulista Lajeado) and CPFL Renováveis and the joint ventures ENERCAN and Chapecoense signed on to the renegotiations of their ACR contracts and canceled their lawsuits.

In 2016, the joint venture Baesa signed on to the renegotiation of its ACR contracts, thus terminating its participation in the lawsuit filed by the Brazilian Association of Independent Electric Energy Producers - APINE. For the Company, the effect was R$ 5,102, net of tax effect, recognized as income from equity in subsidiaries.

81

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

( 28 )   OPERATING COSTS AND EXPENSES

 

 

Parent company

 

Operating expense

 

General

 

2016

 

2015

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

Personnel

10,076

 

15,954

 

4,907

 

10,180

Materials

17

 

44

 

26

 

29

Third party services

2,050

 

3,905

 

1,674

 

4,003

Depreciation and amortization

56

 

102

 

37

 

80

Others

699

 

936

 

652

 

969

Leases and rentals

12

 

25

 

36

 

71

Publicity and advertising

139

 

161

 

47

 

47

Legal, judicial and indemnities

360

 

130

 

380

 

533

Donations, contributions and subsidies

-

 

-

 

97

 

167

Other

187

 

621

 

92

 

152

Total

12,898

 

20,942

 

7,297

 

15,261

 

82

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

 

Consolidated

 

2nd quarter

         

Services Rendered to Third Parties

 

Operating Expenses

 

Total

 

Operating costs

   

Sales

 

General

 

Other

 
 

2016

 

2015

 

2016

 

2015

 

2016

 

2015

 

2016

 

2015

 

2016

 

2015

 

2016

 

2015

Personnel

168,159

 

149,931

 

-

 

-

 

31,779

 

31,173

 

67,261

 

55,321

 

-

 

-

 

267,199

 

236,425

Private pension plans

13,913

 

16,344

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

13,913

 

16,344

Materials

29,821

 

31,404

 

133

 

147

 

1,940

 

1,097

 

7,377

 

2,299

 

-

 

-

 

39,271

 

34,946

Third party services

67,955

 

46,400

 

410

 

439

 

35,177

 

30,972

 

54,026

 

56,333

 

-

 

-

 

157,568

 

134,144

Depreciation and amortization

225,491

 

212,436

 

-

 

-

 

823

 

7,758

 

23,700

 

20,182

 

-

 

-

 

250,014

 

240,375

Cost of infrastructure construction

-

 

-

 

274,491

 

284,540

 

-

 

-

 

-

 

-

 

-

 

-

 

274,491

 

284,540

Others

31,058

 

12,108

 

(3)

 

(1)

 

67,020

 

58,177

 

57,856

 

122,435

 

72,307

 

107,798

 

228,238

 

300,517

Collection fees

-

 

-

 

-

 

-

 

16,398

 

14,552

 

-

 

-

 

-

 

-

 

16,398

 

14,552

Allowance for doubtful accounts

-

 

-

 

-

 

-

 

49,814

 

41,188

 

-

 

-

 

-

 

-

 

49,814

 

41,188

Leases and rentals

9,504

 

7,200

 

-

 

-

 

-

 

-

 

4,465

 

4,527

 

-

 

-

 

13,969

 

11,726

Publicity and advertising

23

 

641

 

-

 

-

 

5

 

-

 

3,001

 

1,582

 

-

 

-

 

3,029

 

2,223

Legal, judicial and indemnities

-

 

-

 

-

 

-

 

-

 

-

 

49,585

 

119,964

 

-

 

-

 

49,585

 

119,964

Donations, contributions and subsidies

13

 

-

 

-

 

-

 

3

 

1,993

 

49

 

1,110

 

-

 

-

 

65

 

3,103

Loss (gain) on disposal, retirement and other noncurrent assets

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

11,678

 

23,911

 

11,678

 

23,911

Amortization of concession intangible asset

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

62,020

 

83,992

 

62,020

 

83,992

Amortization of premium paid - GSF

4,800

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

4,800

 

-

Financial compensation for use of water resources

3,383

 

3,322

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

3,383

 

3,322

Others

13,335

 

945

 

(3)

 

(1)

 

800

 

444

 

755

 

(4,747)

 

(1,391)

 

(105)

 

13,496

 

(3,464)

Total

536,398

 

468,623

 

275,032

 

285,125

 

136,739

 

129,177

 

210,219

 

256,570

 

72,306

 

107,798

 

1,230,694

 

1,247,292

 

83

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

Consolidated

 

1st semester

         

Services Rendered to Third Parties

 

Operating Expenses

 

Total

 

Operating costs

   

Sales

 

General

 

Other

 
 

2016

 

2015

 

2016

 

2015

 

2016

 

2015

 

2016

 

2015

 

2016

 

2015

 

2016

 

2015

Personnel

324,846

 

290,583

 

-

 

-

 

61,890

 

60,945

 

125,429

 

109,929

 

-

 

-

 

512,166

 

461,457

Private pension plans

27,825

 

32,689

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

27,825

 

32,689

Materials

65,899

 

60,690

 

260

 

289

 

3,210

 

2,025

 

9,688

 

4,123

 

-

 

-

 

79,056

 

67,127

Third party services

132,611

 

88,722

 

786

 

783

 

68,620

 

61,185

 

104,770

 

119,319

 

-

 

-

 

306,789

 

270,009

Depreciation and amortization

447,352

 

413,590

 

-

 

-

 

1,656

 

15,560

 

47,087

 

40,457

 

-

 

-

 

496,095

 

469,607

Cost of infrastructure construction

-

 

-

 

491,527

 

514,718

 

-

 

-

 

-

 

-

 

-

 

-

 

491,527

 

514,718

Others

62,099

 

30,450

 

(6)

 

(3)

 

128,719

 

95,682

 

128,154

 

160,882

 

143,843

 

196,036

 

462,807

 

483,047

Collection fees

-

 

-

 

-

 

-

 

31,314

 

28,377

 

-

 

-

 

-

 

-

 

31,314

 

28,377

Allowance for doubtful accounts

-

 

-

 

-

 

-

 

95,865

 

62,466

 

-

 

-

 

-

 

-

 

95,865

 

62,466

Leases and rentals

18,477

 

15,683

 

-

 

-

 

-

 

-

 

8,797

 

8,728

 

-

 

-

 

27,274

 

24,412

Publicity and advertising

44

 

693

 

-

 

-

 

16

 

23

 

5,341

 

4,407

 

-

 

-

 

5,401

 

5,123

Legal, judicial and indemnities

-

 

-

 

-

 

-

 

-

 

-

 

108,969

 

149,573

 

-

 

-

 

108,969

 

149,573

Donations, contributions and subsidies

14

 

-

 

-

 

-

 

3

 

4,008

 

58

 

2,193

 

-

 

-

 

75

 

6,201

Loss (gain) on disposal, retirement and other noncurrent assets

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

19,982

 

27,466

 

19,982

 

27,466

Amortization of concession intangible asset

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

123,907

 

168,693

 

123,907

 

168,693

Amortization of premium paid - GSF

4,800

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

4,800

 

-

Financial compensation for use of water resources

6,973

 

6,210

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

6,973

 

6,210

Others

31,791

 

7,863

 

(6)

 

(3)

 

1,520

 

808

 

4,989

 

(4,019)

 

(46)

 

(123)

 

38,248

 

4,525

Total

1,060,632

 

916,725

 

492,568

 

515,787

 

264,096

 

235,396

 

415,128

 

434,710

 

143,843

 

196,036

 

2,376,266

 

2,298,654

 

84

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

( 29 )    FINANCE INCOME (EXPENSE)

 

 

Parent company

 

Consolidated

 

2016

 

2015

 

2016

 

2015

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

Financial income

                             

Income from financial investments

22,056

 

27,265

 

12,138

 

28,254

 

165,284

 

297,775

 

96,597

 

214,219

Late payment interest and fines

3

 

3

 

-

 

-

 

59,507

 

116,847

 

52,144

 

95,328

Adjustment for inflation of tax credits

2,689

 

3,850

 

-

 

83

 

15,040

 

17,549

 

5,300

 

7,113

Adjustment for inflation of escrow deposits

12

 

22

 

8

 

15

 

8,885

 

17,548

 

19,641

 

38,303

Adjustment for inflation and exchange rate changes

1

 

1

 

-

 

-

 

47,323

 

101,992

 

21,242

 

38,796

Adjustment of expected cash flow (note 10)

-

 

-

 

-

 

-

 

68,010

 

160,527

 

78,326

 

137,732

Discount on purchase of ICMS credit

-

 

-

 

-

 

-

 

5,020

 

11,645

 

3,113

 

7,623

Adjustments to the sector financial asset (note 8)

-

 

-

 

-

 

-

 

7,461

 

56,587

 

33,512

 

43,103

PIS and COFINS on other finance income

(1,397)

 

(1,861)

 

-

 

-

 

(885)

 

(22,033)

 

-

 

-

PIS and COFINS on interest on capital

(1,129)

 

(1,143)

 

(5,766)

 

(5,766)

 

(1,129)

 

(1,143)

 

(5,766)

 

(5,766)

Other

4,991

 

8,247

 

815

 

2,987

 

27,006

 

49,075

 

25,385

 

40,116

Total

27,225

 

36,386

 

7,195

 

25,576

 

401,522

 

806,370

 

329,493

 

616,567

                               

Finance costs

                             

Interest on debts

(1,939)

 

(9,113)

 

(8,973)

 

(36,887)

 

(437,600)

 

(868,390)

 

(411,278)

 

(825,647)

Adjustment for inflation and exchange rate changes

(10,073)

 

(22,043)

 

(4,787)

 

(7,257)

 

(135,380)

 

(288,142)

 

(68,636)

 

(271,297)

(-) Capitalized interest

-

 

-

 

-

 

-

 

21,145

 

33,939

 

7,370

 

9,764

Adjustments to the sector financial liability

-

 

-

 

-

 

-

 

(14,486)

 

(16,261)

 

1,687

 

(1,809)

Use of public asset

-

 

-

 

-

 

-

 

(4,459)

 

(8,350)

 

(3,417)

 

(6,740)

Others

(13)

 

(469)

 

(1,333)

 

(3,377)

 

(30,057)

 

(90,129)

 

(41,978)

 

(74,326)

Total

(12,025)

 

(31,626)

 

(15,093)

 

(47,521)

 

(600,837)

 

(1,237,333)

 

(516,251)

 

(1,170,054)

                               

Finance expense, net

15,200

 

4,760

 

(7,898)

 

(21,946)

 

(199,315)

 

(430,963)

 

(186,758)

 

(553,487)

 

Interest was capitalized at an average rate of 11.05% p.a. in the first semester of 2016 (9.34% p.a. in the first semester of 2015) on qualifying assets, in accordance with CPC 20 (R1) and IAS 23.

In line items of Adjustment for inflation and exchange rate changes, the expense includes the effects of losses of R$ 1,228,903 in the first semester of 2016 (gain of R$ 613,741 in the first semester of 2015) on derivative instruments (note 33).

 

( 30 )   SEGMENT INFORMATION

The segregation of the Company’s operating segments is based on the internal financial information and management structure and is made by type of business: electric energy distribution, electric energy generation (conventional and renewable sources), electric energy commercialization and services rendered activities.

Profit or loss, assets and liabilities per segment include items directly attributable to the segment, as well as those that can be allocated on a reasonable basis, if applicable. Prices charged between segments are based on similar market transactions. Note 1 presents the subsidiaries in accordance with their areas of operation and provides further information on each subsidiary and its business area and segment.

The information segregated by segment is presented below, in accordance with the criteria established by the Company’s Management:

85

 


 
 

(Free Translation of the original in Portuguese)

Standard Financial Statements – ITR – Date: June 30, 2016 - CPFL Energia S. A

 

 

Distribution

 

Generation (conventional source)

 

Generation (renewable source)

 

Commercialization

 

Services

 

Other (*)

 

Elimination

 

Total

1st semester 2016

                             

Net operating revenue

6,931,197

 

282,376

 

515,619

 

887,393

 

33,820

 

15,067

     

8,665,472

(-) Intersegment revenues

11,350

 

201,341

 

140,775

 

29,845

 

146,064

 

4,048

 

(533,424)

 

-

Income from electric energy service

610,092

 

321,076

 

110,470

 

46,505

 

30,398

 

(21,905)

     

1,096,638

Finance income

592,824

 

96,511

 

64,255

 

17,965

 

4,117

 

30,698

     

806,370

Finance cost

(596,911)

 

(266,765)

 

(326,414)

 

(8,741)

 

(2,719)

 

(35,783)

     

(1,237,333)

Profit (loss) before taxes

606,004

 

282,941

 

(151,688)

 

55,729

 

31,797

 

(26,990)

     

797,793

Income tax and social contribution

(230,459)

 

(51,985)

 

(16,871)

 

(16,192)

 

(8,274)

 

(1,430)

     

(325,211)

Profit (loss) for the period

375,545

 

230,956

 

(168,559)

 

39,537

 

23,523

 

(28,420)

     

472,581

Total assets (**)

19,300,856

 

4,779,029

 

11,826,432

 

382,109

 

316,370

 

1,345,438

     

37,950,234

Purchases of PP&E and intangible assets

429,136

 

3,809

 

486,974

 

1,992

 

26,075

 

1,740

     

949,726

Depreciation and amortization

(279,620)

 

(62,100)

 

(268,259)

 

(1,929)

 

(6,382)

 

(1,713)

     

(620,002)

                               

1st semester 2015 (***)

                             

Net operating revenue

8,691,250

 

300,869

 

537,903

 

857,782

 

63,657

 

1,156

     

10,452,617

(-) Intersegment revenues

10,751

 

170,155

 

193,659

 

3,647

 

110,821

 

-

 

(489,033)

 

-

Income from electric energy service

541,186

 

265,006

 

72,808

 

61,909

 

17,666

 

(14,152)

     

944,423

Finance income

445,054

 

45,125

 

59,488

 

17,086

 

25,259

 

24,554

     

616,567

Finance cost

(564,322)

 

(256,459)

 

(278,195)

 

(16,902)

 

(6,641)

 

(47,534)

     

(1,170,054)

Profit (loss) before taxes

421,918

 

135,053

 

(145,899)

 

62,093

 

36,283

 

(37,131)

     

472,318

Income tax and social contribution

(163,870)

 

(20,396)

 

(11,799)

 

(21,749)

 

(11,235)

 

(10,719)

     

(239,768)

Profit (loss) for the period

258,048

 

114,657

 

(157,698)

 

40,344

 

25,049

 

(47,850)

     

232,550

Total assets (**)

22,138,086

 

4,575,230

 

11,868,943

 

714,781

 

317,845

 

917,586

     

40,532,471

Purchases of PP&E and intangible assets

420,869

 

828

 

276,227

 

687

 

13,924

 

275

     

712,810

Depreciation and amortization

(302,512)

 

(66,133)

 

(260,696)

 

(2,366)

 

(6,503)

 

(91)

     

(638,300)

(*) Others – refer basically to assets and transactions which are not related to any of the identified segments.

(**) Intangible assets, net of amortization, were allocated to their respective segments. 

(***) The amounts for the total assets refer to December 31, 2015.

 

( 31 )   RELATED PARTY TRANSACTIONS

 

The Company’s controlling shareholders are as follows:

·   ESC Energia S.A.

Company controlled by the Camargo Corrêa group, with operations in diversified segments, such as construction, cement, textiles, aluminum and highway concessions, among others.

·   Energia São Paulo Fundo de Investimento em Ações

Company controlled by the following pension funds: (a) Fundação CESP, (b) Fundação SISTEL de Seguridade Social, (c) Fundação Petrobras de Seguridade Social - PETROS, and (d) Fundação SABESP de Seguridade Social - SABESPREV.

·   Bonaire Participações S.A.

Company controlled by Energia São Paulo Fundo de Investimento em Ações.

·   BB Carteira Livre I - Fundo de Investimento em Ações

Fund controlled by PREVI - Caixa de Previdência dos Funcionários do Banco do Brasil.

 

The direct and indirect interest in operating subsidiaries are described in note 1.

Controlling shareholders, associates companies, joint ventures and entities under common control that in some way exercise significant influence over the Company are considered to be related parties.

 

The main transactions are listed below:

a)    Bank balances and short-term investments refer mainly to bank balances and short-term investments with financial institutions, as mentioned in note 5. The Company and its subsidiaries also have an Exclusive Investment Fund.

 

b)    Borrowings and Debentures and Derivatives - refer to borrowings from financial institutions under the conditions described in notes 16 and 17. The Company is also the guarantor of certain borrowings raised by its subsidiaries and joint ventures, as described in notes 16 and 17.

86

 


 
 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

 

c)     Other Financial Transactions – the expense amounts are bank costs, collection and bookkeeping expenses.

 

d)    Purchase and sale of energy and charges - refer basically to energy purchased or sold by distribution, commercialization and generation subsidiaries through short or long-term agreements and tariffs for the use of the distribution system (TUSD). Such transactions, when conducted in the free market, are carried out under conditions considered by the Company as similar to market conditions at the time of the trading, according to internal policies previously established by the Company’s management. When conducted in the regulated market, the prices charged are set through mechanisms established by the regulatory authority.

 

e)     Intangible assets, Property, plant and equipment, Materials and Service – refer to the purchase of equipment, cables and other materials for use in distribution and generation activities and contracting of services such as construction and information technology consultancy.

 

f)     Advances – refer to advances for investments in research and development.

 

g)    Intragroup loans – refer to (i) contracts with the joint venture EPASA, under contractual conditions of 113.5% of the CDI, maturing in January 2017; (ii) contracts with the non-controlling shareholder of the subsidiary CPFL Renováveis, with maturity defined for the date of distribution of earnings of the indirect subsidiary to its shareholders and remuneration of 8% p.a. + IGP-M (General Market Price Index).

 

Certain subsidiaries have supplementary retirement plan maintained with Fundação CESP and offered to the employees of the subsidiaries. These plans hold investments in Company’s shares (note 18).

To ensure that commercial transactions with related parties are conducted under usual market conditions, the Company set up a “Related Parties Committee”, comprising representatives of the controlling shareholders, responsible for analyzing the main transactions with related parties.

The subsidiaries Piratininga and Geração, renegotiated with the joint ventures BAESA, Enercan and Chapecoense the extension of the original maturities of the energy purchase bills, previously from January 2016 to July 2016.

The total compensation of key management personnel in the first semester of 2016, in accordance with CVM Decision 560/2008, was R$ 28,381 (R$ 23,545 in the first semester of 2015). This amount comprises R$ 27,694 in respect of short-term benefits (R$ 23,042 in the first semester of 2015), R$ 564 for post-employment benefits (R$ 503 in the first semester of 2015) and R$ 123 for other long-term benefits (no corresponding amounts in the first semester of 2015), recognized on an accrual basis.

Transactions between related parties involving controlling shareholders, entities under common control or with significant influence and joint ventures are as follows:

87

 


 
 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

 

Consolidated

 

ASSET

 

LIABILITY

 

INCOME

 

EXPENSES

 

June 30, 2016

 

December 31, 2015

 

June 30, 2016

 

December 31, 2015

 

1st semester 2016

 

1st semester 2015

 

1st semester 2016

 

1st semester 2015

Bank balances and short-term investments

                             

Banco Bradesco S.A.(**)

3,283,079

 

4,097,770

 

1

 

1

 

145,790

 

-

 

174

 

-

Banco do Brasil S.A.

74,137

 

126,036

 

-

 

-

 

4,557

 

7,188

 

1

 

-

                               

Borrowings (*), debentures (*) and derivatives (*)

                             

Banco Bradesco S.A.(**)

-

 

-

 

610,400

 

667,335

 

15,732

 

-

 

46,747

 

-

Banco do Brasil S.A.

-

 

-

 

3,928,232

 

3,727,087

 

-

 

-

 

236,853

 

109,100

Banco BNP Paribas Brasil S.A (**)

14,273

 

58,478

 

-

 

322,465

 

-

 

-

 

58,050

 

-

                               

Other financial transactions

                             

Banco Bradesco S.A.(**)

36

 

1,344

 

1,173

 

1,259

 

4

 

-

 

6,836

 

-

Banco do Brasil S.A.

-

 

-

 

783

 

879

 

96

 

-

 

3,019

 

3,175

TOTVS S.A.

-

 

-

 

-

 

-

 

-

 

-

 

-

 

1

BAESA – Energética Barra Grande S.A.

-

 

-

 

-

 

-

 

-

 

-

 

-

 

3,498

                               

Advances

                             

BAESA – Energética Barra Grande S.A.

-

 

-

 

772

 

790

 

-

 

-

 

-

 

-

Foz do Chapecó Energia S.A.

-

 

-

 

1,094

 

1,120

 

-

 

-

 

-

 

-

ENERCAN - Campos Novos Energia S.A.

-

 

-

 

1,348

 

1,377

 

-

 

-

 

-

 

-

EPASA - Centrais Elétricas da Paraiba

-

 

-

 

492

 

503

 

-

 

-

 

-

 

-

                               

Energy purchase and sale and charges

                             

Afluente Transmissão de Energia Elétrica S.A.

-

 

-

 

30

 

27

 

-

 

-

 

591

 

857

Aliança Geração de Energia S.A

-

 

-

 

1,572

 

1,364

 

2

 

-

 

26,572

 

11,058

Arizona 1 Energia Renovável S.A

-

 

-

 

-

 

-

 

-

 

-

 

479

 

438

Baguari I Geração de Energia Elétrica S.A.

-

 

-

 

5

 

6

 

-

 

-

 

148

 

130

BRF Brasil Foods

-

 

-

 

-

 

-

 

8,551

 

-

 

-

 

-

Braskem S.A.

-

 

-

 

-

 

-

 

-

 

-

 

11,094

 

-

Caetite 2 Energia Renovável S.A.

-

 

-

 

-

 

-

 

-

 

-

 

441

 

402

Caetité 3 Energia Renovável S.A.

-

 

-

 

-

 

-

 

-

 

-

 

445

 

405

Calango 1 Energia Renovável S.A.

-

 

-

 

-

 

-

 

-

 

-

 

533

 

485

Calango 2 Energia Renovável S.A.

-

 

-

 

-

 

-

 

-

 

-

 

454

 

415

Calango 3 Energia Renovável S.A.

-

 

-

 

-

 

-

 

-

 

-

 

533

 

485

Calango 4 Energia Renovável S.A.

-

 

-

 

-

 

-

 

-

 

-

 

494

 

450

Calango 5 Energia Renovável S.A.

-

 

-

 

-

 

-

 

-

 

-

 

526

 

477

Companhia de Eletricidade do Estado da Bahia – COELBA

768

 

655

 

-

 

-

 

9,947

 

7,410

 

-

 

-

Companhia Energética de Pernambuco - CELPE

715

 

587

 

-

 

-

 

4,857

 

3,554

 

134

 

-

Companhia Energética do Rio Grande do Norte - COSERN

248

 

227

 

-

 

-

 

1,624

 

1,271

 

-

 

657

Companhia Hidrelétrica Teles Pires S.A.

-

 

-

 

1,505

 

1,548

 

25

 

-

 

27,108

 

3,974

ELEB Equipamentos Ltda

-

 

-

 

-

 

-

 

1,525

 

-

 

-

 

-

Embraer

-

 

-

 

-

 

-

 

4,538

 

11,996

 

-

 

-

Energética Águas da Pedra S.A.

-

 

-

 

156

 

130

 

3

 

-

 

2,539

 

2,058

Estaleiro Atlântico Sul S.A.

-

 

-

 

-

 

-

 

3,831

 

9,448

 

-

 

-

Goiás Sul Geração de Enegia S.A.

-

 

-

 

-

 

-

 

-

 

-

 

91

 

81

Mel 2 Energia Renovável S.A.

-

 

-

 

-

 

-

 

-

 

-

 

353

 

316

NC ENERGIA S.A.

-

 

-

 

-

 

-

 

10,129

 

2,625

 

-

 

-

Norte Energia S.A.

1

 

1

 

1,503

 

-

 

2

 

-

 

6,113

 

-

Rio PCH I S.A.

-

 

-

 

281

 

242

 

-

 

-

 

4,759

 

3,891

Samarco Mineração S.A.

-

 

-

 

-

 

-

 

1

 

-

 

-

 

-

Santista Jeanswear S/A

-

 

-

 

-

 

-

 

6,501

 

-

 

-

 

-

Santista Work Solution S/A

-

 

-

 

-

 

-

 

948

 

-

 

-

 

-

SE Narandiba S.A.

-

 

-

 

-

 

-

 

-

 

1

 

70

 

9

Serra do Facão Energia S.A. - SEFAC

-

 

-

 

707

 

576

 

-

 

-

 

12,214

 

10,378

Tavex Brasil S.A

-

 

-

 

-

 

-

 

-

 

2,403

 

-

 

-

Termopernambuco S.A.

-

 

-

 

-

 

-

 

2

 

-

 

-

 

-

ThyssenKrupp Companhia Siderúrgica do Atlântico

-

 

-

 

-

 

-

 

13,424

 

18,257

 

3,719

 

3,369

Vale Energia S.A.

8,400

 

7,843

 

-

 

-

 

50,981

 

45,805

 

-

 

695

BAESA – Energética Barra Grande S.A.

-

 

-

 

13,641

 

88,441

 

-

 

60,077

 

34,477

 

58,079

Foz do Chapecó Energia S.A.

-

 

-

 

44,051

 

142,596

 

468

 

3,873

 

173,719

 

160,505

ENERCAN - Campos Novos Energia S.A.

763

 

667

 

61,108

 

140,496

 

4,312

 

19,835

 

135,317

 

116,077

EPASA - Centrais Elétricas da Paraiba

-

 

-

 

9,153

 

19,807

 

-

 

15,250

 

46,776

 

86,015

                               

Intangible assets, property, plant and equipment, materials and service

Banco Bradesco S.A.(**)

-

 

-

 

-

 

2

 

1

 

-

 

-

 

-

Brasil veículos Companhia de Seguros

-

 

-

 

-

 

-

 

1

 

-

 

-

 

-

BRF Brasil Foods

18

 

-

 

-

 

-

     

-

 

-

 

-

Centro de Gestão de Meios de Pagamento S.A. - CGMP

-

 

-

 

-

 

-

 

-

 

-

 

1,567

 

-

Companhia de Saneamento Básico do Estado de São Paulo - SABESP

21

 

65

 

42

 

42

 

163

 

518

 

6

 

29

Companhia Brasileira de Soluções e Serviços CBSS - Alelo (**)

-

 

-

 

-

 

-

 

-

 

-

 

1,002

 

-

Companhia de Eletricidade do Estado da Bahia – COELBA

   

-

     

-

     

-

     

42

Concessionária de Rodovias do Oeste de São Paulo – ViaOeste S.A.

-

 

-

 

-

 

-

 

-

 

-

 

6

 

-

Concessionária do Sistema Anhanguera - Bandeirante S.A. (**)

-

 

-

 

-

 

-

 

-

 

-

 

3

 

-

Estaleiro Atlântico Sul S.A.

1

 

-

 

-

 

-

 

7

 

7

 

-

 

-

HM 14 Empreendimento Imobiliário SPE Ltda

   

14

     

-

     

-

     

-

Indústrias Romi S.A.

4

 

-

 

-

 

-

 

26

 

44

 

-

 

-

InterCement Brasil S.A

37

 

-

     

-

 

43

 

26

     

-

Instituto CCR

19

 

-

 

-

 

-

 

19

 

-

 

-

 

-

Logum Logística S.A.

106

 

-

 

-

 

-

 

690

 

-

 

-

 

-

Mapfre Seguros Gerais S.A. (**)

-

 

-

 

-

 

-

 

1

 

-

 

12

 

-

Rodovias Integradas do Oeste S.A.

   

-

     

12

     

-

 

-

 

-

SAMM - Sociedade de Atividades em Multimídia Ltda.

117

 

-

 

-

 

-

 

704

           

Tavex Brasil S.A

   

-

     

-

 

-

 

21

 

-

 

-

TOTVS S.A.

   

-

     

3

     

-

 

18

 

23

Ultrafértil S.A

   

-

     

-

     

367

 

-

 

-

Vale Fertilizantes S.A

79

 

39

     

-

 

147

 

-

 

-

 

-

BAESA – Energética Barra Grande S.A.

68

 

-

     

-

 

711

 

648

 

-

 

-

Foz do Chapecó Energia S.A.

   

-

     

-

 

776

 

708

 

-

 

-

ENERCAN - Campos Novos Energia S.A.

   

-

 

-

 

-

 

753

 

648

 

-

 

-

EPASA - Centrais Elétricas da Paraíba S.A.

1,452

 

1,104

     

-

 

360

 

348

 

-

 

-

                               

Intragroup loans

                             

EPASA - Centrais Elétricas da Paraíba S.A.

36,183

 

76,586

 

-

 

-

 

5,409

 

6,332

 

-

 

-

Noncontrolling shareholders - CPFL Renováveis

8,349

 

7,680

 

-

 

-

 

590

 

575

 

-

 

-

                               

Dividends and interest on capital

                             

BAESA – Energética Barra Grande S.A.

-

 

20

 

-

 

-

 

-

 

-

 

-

 

-

Chapecoense Geração S.A.

-

 

28,417

 

-

 

-

 

-

 

-

 

-

 

-

ENERCAN - Campos Novos Energia S.A.

13,424

 

30,905

 

-

 

-

 

-

 

-

 

-

 

-

EPASA - Centrais Elétricas da Paraiba

-

 

29,933

 

-

 

-

 

-

 

-

 

-

 

-

                               

(*) Includes the mark to market value

(**) Related parties since December 31, 2015

 

 

88

 


 
 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

( 32 )      RISK MANAGEMENT

 

The risk management structure and the main market risk factors affecting the Company's business are disclosed in Note 34 to the financial statements for the year ended in December 31, 2015.

 

( 33 )   FINANCIAL INSTRUMENTS

 

The main financial instruments, classified in accordance with the group’s accounting practices, are:

 

                 

Consolidated

                 

June 30, 2016

 

December 31, 2015

 

Note

 

Category

 

Measurement

 

Level (*)

 

Carrying amount

 

Fair value

 

Carrying amount

 

Fair value

                               

Asset

                             

Cash and cash equivalent

5

 

(a)

 

(2)

 

Level 1

 

3,819,029

 

3,819,029

 

4,353,488

 

4,353,488

Cash and cash equivalent

5

 

(a)

 

(2)

 

Level 2

 

1,645,754

 

1,645,754

 

1,329,314

 

1,329,314

Securities

   

(a)

 

(2)

 

Level 1

 

22,183

 

22,183

 

23,633

 

23,633

Derivatives

33

 

(a)

 

(2)

 

Level 2

 

1,183,304

 

1,183,304

 

2,269,932

 

2,269,932

Derivatives - zero-cost collar

33

 

(a)

 

(2)

 

Level 3

 

63,035

 

63,035

 

8,820

 

8,820

Concession financial asset - distribution

10

 

(b)

 

(2)

 

Level 3

 

3,877,660

 

3,877,660

 

3,483,713

 

3,483,713

                 

10,610,965

 

10,610,965

 

11,468,900

 

11,468,900

                               

Liability

                             

Borrowings - principal and interest

16

 

(c)

 

(1)

 

Level 2 (***)

 

7,376,215

 

6,249,841

 

7,725,978

 

6,499,746

Borrowings - principal and interest

16 (**)

 

(a)

 

(2)

 

Level 2

 

5,997,044

 

5,997,044

 

6,936,808

 

6,936,808

Debentures - Principal and interest

17

 

(c)

 

(1)

 

Level 2 (***)

 

6,661,762

 

6,550,803

 

7,070,430

 

6,105,830

Derivatives

33

 

(a)

 

(2)

 

Level 2

 

131,567

 

131,567

 

31,745

 

31,745

Derivatives - Zero-cost collar

33

 

(a)

 

(2)

 

Level 3

 

-

 

-

 

2,440

 

2,440

                 

20,166,588

 

18,929,255

 

21,767,402

 

19,576,570

(*) Refers to the hierarchy for determination of fair value

(**) As a result of the initial designation of this financial liability, the consolidated financial statements reported a loss of R$ 136,345 in the first semester of 2016 (gain of R$ 29,466 in the first semester of 2015)

(***) Only for disclosure purposes, according to CPC 40 (R1) / IFRS 7

Key

               

Category:

     

Measurement:

                 

(a) - Measured at fair value through profit or loss

   

(1) - Measured at amortized cost

(b) - Available for sale

   

(2) - Measured at fair value

(c) - Other finance liabilities

                           

 

The financial instruments for which the carrying amounts approximate the fair values at the end of the reporting period, due to their nature, are:

·       Financial assets: (i) consumers, concessionaires and licensees, (ii) leases, (iii) associates, subsidiaries and parent company, (iv) receivables – amounts from CDE, (v) concession financial asset - transmission, (vi) pledges, funds and restricted deposits, (vii) services rendered to third parties, (viii) Collection agreements and (ix) sector financial asset;

 

·       Financial liabilities: (i) trade payables, (ii) regulatory charges, (iii) use of public asset, (iv) consumers and concessionaires, (v) Nacional scientific and technological development fund - FNDCT, (vi) energy research company - EPE, (vii) collection agreement, (viii) reversal fund, (ix) payables for business combination, (x) tariff discount CDE and (xi) sector financial liability.

In addition, in the first semester of 2016 there were no transfers between hierarchical levels of fair value.

 

a) Valuation of financial instruments

As mentioned in note 4, the fair value of a security corresponds to its maturity value (redemption value) adjusted to present value by the discount factor (relating to the maturity date of the security) obtained from the market interest curve, in Brazilian reais.

CPC 40 (R1) and IFRS 7 requires the classification in a three-level hierarchy for fair value measurement of financial instruments, based on observable and unobservable inputs related to the valuation of a financial instrument at the measurement date.

89

 


 
 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

CPC 40 (R1) and IFRS 7 also defines observable inputs as market data obtained from independent sources and unobservable inputs that reflects market assumptions.

The three levels of the fair value hierarchy are:

· Level 1: quoted prices in an active market for identical instruments;

· Level 2: observable inputs other than quoted prices in an active market that are observable for the asset or liability, directly (i.e. as prices) or indirectly (i.e. derived from prices);

· Level 3: inputs for the instruments that are not based on observable market data.

 

As the distribution subsidiaries have classified their concession financial asset as available-for-sale, the relevant factors for fair value measurement are not publicly observable. The fair value hierarchy classification is therefore level 3. The changes between years and the respective gains (losses) in profit for the first semester of 2016 of R$ 160,527 (R$ 137,732 in the first semester of 2015), and the main assumptions are described in note 10.

Additionally, the main assumptions used in the fair value measurement of the zero-cost collar derivative, the fair value hierarchy of which is Level 3, are disclosed in note 33 b.1.

The Company recognizes in “Investments at cost” in the financial statements the 5.94% interest held by the indirect subsidiary Paulista Lajeado Energia S.A. in the total capital of Investco S.A. (“Investco”), in the form of 28,154,140 common shares and 18,593,070 preferred shares. As Investco’s shares are not traded on the stock exchange and the main objective of its operations is to generate electric energy for commercialization by the shareholders holding the concession, the Company opted to recognize the investment at cost.

 

b) Derivatives

The Company and its subsidiaries have the policy of using derivatives to reduce their risks of fluctuations in exchange and interest rates, without any speculative purposes. The Company and its subsidiaries have exchange rate derivatives compatible with the exchange rate risks net exposure, including all the assets and liabilities tied to exchange rate changes.

The derivative instruments entered into by the Company and its subsidiaries are currency or interest rate swaps with no leverage component, margin call requirements or daily or periodical adjustments. Furthermore, in 2015 subsidiary CPFL Geração contracted a zero-cost collar derivative (see item b.1 below).

As a large part of the derivatives entered into by the subsidiaries have their terms fully aligned with the hedged debts, and in order to obtain more relevant and consistent accounting information through the recognition of income and expenses, these debts were designated at fair value, for accounting purposes (note 16). Other debts with terms different from the derivatives contracted as a hedge continue to be recognized at amortized cost. Furthermore, the Company and its subsidiaries do not adopt hedge accounting for derivative instruments.

At June 30, 2016, the Company and its subsidiaries had the following swap transactions, all traded on the over-the-counter market:

90

 


 

 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

   

Fair values (carrying amounts)

                   

Company / strategy / counterparts

 

Assets

 

Liabilities

 

Fair value, net

 

Values at cost, net

 

Gain (loss) on marking to market

 

Currency / index

 

Maturity range

 

Notional

Derivatives to hedge debts designated at fair value

Exchange rate hedge

                               

CPFL Energia

                               

Santander

 

-

 

(43,303)

 

(43,303)

 

(43,254)

 

(49)

 

dollar

 

September 2016

 

187,750

   

-

 

(43,303)

 

(43,303)

 

(43,254)

 

(49)

           
                                 

CPFL Paulista

                               

Bank of America Merrill Lynch

 

174,592

 

-

 

174,592

 

167,486

 

7,106

 

dollar

 

July 2016

 

156,700

Morgan Stanley

 

74,900

 

-

 

74,900

 

74,802

 

98

 

dollar

 

September 2016

 

85,475

Scotiabank

 

27,072

 

-

 

27,072

 

27,063

 

9

 

dollar

 

July 2016

 

49,000

Citibank

 

38,388

 

-

 

38,388

 

43,965

 

(5,577)

 

dollar

 

March 2019

 

117,250

Bank of Tokyo-Mitsubishi

 

39,530

 

-

 

39,530

 

44,055

 

(4,525)

 

dollar

 

March 2019

 

117,400

Bank of America Merrill Lynch

 

36,874

 

-

 

36,874

 

39,788

 

(2,914)

 

dollar

 

September 2018

 

106,020

Bank of America Merrill Lynch

 

42,084

 

-

 

42,084

 

45,413

 

(3,329)

 

dollar

 

March 2019

 

116,600

J.P.Morgan

 

21,041

 

-

 

21,041

 

22,706

 

(1,666)

 

dollar

 

March 2019

 

58,300

J.P.Morgan

 

12,304

 

-

 

12,304

 

13,000

 

(695)

 

dollar

 

December 2017

 

51,470

J.P.Morgan

 

10,884

 

-

 

10,884

 

11,568

 

(685)

 

dollar

 

December 2017

 

53,100

J.P.Morgan

 

3,650

 

-

 

3,650

 

3,915

 

(265)

 

dollar

 

January 2018

 

27,121

HSBC

 

8,316

 

-

 

8,316

 

9,224

 

(908)

 

dollar

 

January 2018

 

54,214

HSBC

 

35,615

 

-

 

35,615

 

38,236

 

(2,621)

 

dollar

 

January 2018

 

173,459

J.P.Morgan

 

9,460

 

-

 

9,460

 

9,815

 

(355)

 

dollar

 

January 2018

 

67,938

J.P.Morgan

 

9,030

 

-

 

9,030

 

10,139

 

(1,109)

 

dollar

 

January 2019

 

67,613

Citibank

 

20,389

 

-

 

20,389

 

27,465

 

(7,076)

 

dollar

 

January 2020

 

156,600

BNP Paribas

 

3,806

 

-

 

3,806

 

4,536

 

(730)

 

euro

 

January 2018

 

63,896

Bank of Tokyo-Mitsubishi

 

5,949

 

-

 

5,949

 

17,405

 

(11,456)

 

dollar

 

February 2020

 

142,735

J.P.Morgan

 

5,229

 

-

 

5,229

 

5,809

 

(581)

 

dollar

 

February 2018

 

41,100

Bank of America Merrill Lynch

 

68,292

 

-

 

68,292

 

75,242

 

(6,951)

 

dollar

 

February 2018

 

405,300

Bank of America Merrill Lynch

 

-

 

(14,230)

 

(14,230)

 

(8,520)

 

(5,710)

 

dollar

 

October 2018

 

329,500

HSBC

 

-

 

(5,299)

 

(5,299)

 

(5,726)

 

427

 

dollar

 

May 2021

 

59,032

Bank of America Merrill Lynch

 

-

 

(4,049)

 

(4,049)

 

(5,697)

 

1,649

 

dollar

 

May 2021

 

59,032

Citibank

 

-

 

(7,041)

 

(7,041)

 

(11,404)

 

4,363

 

dollar

 

May 2021

 

118,063

   

647,404

 

(30,618)

 

616,786

 

660,286

 

(43,500)

           
                                 

CPFL Piratininga

                               

Scotiabank

 

35,359

 

-

 

35,359

 

35,347

 

12

 

dollar

 

July 2016

 

64,000

Santander

 

40,137

 

-

 

40,137

 

40,141

 

(4)

 

dollar

 

July 2016

 

100,000

Citibank

 

38,388

 

-

 

38,388

 

43,965

 

(5,577)

 

dollar

 

March 2019

 

117,250

HSBC

 

23,326

 

-

 

23,326

 

24,721

 

(1,395)

 

dollar

 

April 2018

 

55,138

J.P.Morgan

 

23,351

 

-

 

23,351

 

24,724

 

(1,374)

 

dollar

 

April 2018

 

55,138

Citibank

 

21,483

 

-

 

21,483

 

29,512

 

(8,028)

 

dollar

 

January 2020

 

169,838

BNP Paribas

 

10,467

 

-

 

10,467

 

12,475

 

(2,008)

 

euro

 

January 2018

 

175,714

Bank of America Merrill Lynch

 

-

 

(433)

 

(433)

 

(416)

 

(18)

 

dollar

 

July 2016

 

40,000

Bank of America Merrill Lynch

 

-

 

(4,800)

 

(4,800)

 

(4,724)

 

(76)

 

dollar

 

August 2016

 

84,250

Scotiabank

 

-

 

(4,933)

 

(4,933)

 

(4,452)

 

(481)

 

dollar

 

August 2017

 

55,440

HSBC

 

-

 

(5,299)

 

(5,299)

 

(5,726)

 

427

 

dollar

 

May 2021

 

59,032

Bank of America Merrill Lynch

 

-

 

(4,805)

 

(4,805)

 

(8,533)

 

3,729

 

dollar

 

May 2021

 

88,548

Citibank

 

-

 

(5,833)

 

(5,833)

 

(8,557)

 

2,724

 

dollar

 

May 2021

 

88,548

   

192,511

 

(26,103)

 

166,407

 

178,478

 

(12,071)

           
                                 

CPFL Geração

                               

HSBC

 

90,177

 

-

 

90,177

 

90,948

 

(770)

 

dollar

 

March 2017

 

232,520

CCB-China Construction Bank

 

6,103

 

-

 

6,103

 

(7,734)

 

13,837

 

dollar

 

June 2019

 

104,454

   

96,280

 

-

 

96,280

 

83,214

 

13,066

           
                                 

RGE

                               

Citibank

 

95,598

 

-

 

95,598

 

96,018

 

(420)

 

dollar

 

April 2017

 

128,590

Bank of Tokyo-Mitsubishi

 

19,569

 

-

 

19,569

 

21,316

 

(1,746)

 

dollar

 

April 2018

 

36,270

Bank of Tokyo-Mitsubishi

 

87,472

 

-

 

87,472

 

95,541

 

(8,069)

 

dollar

 

May 2018

 

168,346

Citibank

 

13,333

 

-

 

13,333

 

14,932

 

(1,599)

 

dollar

 

May 2019

 

33,285

HSBC

 

10,291

 

-

 

10,291

 

10,694

 

(403)

 

dollar

 

October 2017

 

32,715

J.P.Morgan

 

17,108

 

-

 

17,108

 

18,329

 

(1,221)

 

dollar

 

February 2018

 

171,949

HSBC

 

-

 

(5,299)

 

(5,299)

 

(5,726)

 

427

 

dollar

 

May 2021

 

59,032

Bank of America Merrill Lynch

 

-

 

(6,138)

 

(6,138)

 

(11,369)

 

5,231

 

dollar

 

May 2021

 

118,063

Citibank

 

-

 

(4,626)

 

(4,626)

 

(5,711)

 

1,084

 

dollar

 

May 2021

 

59,032

   

243,370

 

(16,063)

 

227,307

 

234,024

 

(6,717)

           

CPFL Serviços

                               

J.P.Morgan

 

2,979

 

-

 

2,979

 

3,007

 

(28)

 

dollar

 

October 2016

 

9,000

                                 

CPFL Telecom

                               

Itaú

 

-

 

(1,267)

 

(1,267)

 

(846)

 

(421)

 

dollar

 

March 2018

 

35,000

                                 

CPFL Brasil

                               

Itaú

 

-

 

(4,244)

 

(4,244)

 

(3,606)

 

(639)

 

dollar

 

August 2018

 

45,360

                                 

Subtotal (a)

 

1,182,544

 

(121,600)

 

1,060,944

 

1,111,303

 

(50,359)

           
                                 

Derivatives to hedge debts not designated at fair value

Exchange rate hedge

CPFL Geração

                               

Votorantim

 

760

 

-

 

760

 

1,635

 

(875)

 

dollar

 

December 2016

 

38,417

                                 

Price index hedge

                               

CPFL Geração

                               

Santander

 

-

 

(384)

 

(384)

 

6,350

 

(6,733)

 

IPCA

 

April 2019

 

35,235

J.P.Morgan

 

-

 

(384)

 

(384)

 

6,350

 

(6,733)

 

IPCA

 

April 2019

 

35,235

   

-

 

(768)

 

(768)

 

12,699

 

(13,467)

           
                                 

Interest rate hedge (1)

                               

CPFL Paulista

                               

Bank of America Merrill Lynch

 

-

 

(2,571)

 

(2,571)

 

(830)

 

(1,741)

 

CDI

 

July 2019

 

660,000

J.P.Morgan

 

-

 

(1,227)

 

(1,227)

 

(295)

 

(931)

 

CDI

 

February 2021

 

300,000

Votorantim

 

-

 

(387)

 

(387)

 

(95)

 

(291)

 

CDI

 

February 2021

 

100,000

Santander

 

-

 

(402)

 

(402)

 

(99)

 

(303)

 

CDI

 

February 2021

 

105,000

   

-

 

(4,587)

 

(4,587)

 

(1,320)

 

(3,267)

           

CPFL Piratininga

                               

J.P.Morgan

 

-

 

(429)

 

(429)

 

(138)

 

(290)

 

CDI

 

July 2019

 

110,000

Votorantim

 

-

 

(467)

 

(467)

 

(120)

 

(346)

 

CDI

 

February 2021

 

135,000

Santander

 

-

 

(334)

 

(334)

 

(87)

 

(247)

 

CDI

 

February 2021

 

100,000

   

-

 

(1,230)

 

(1,230)

 

(346)

 

(883)

           
                                 

RGE

                               

HSBC

 

-

 

(1,948)

 

(1,948)

 

(629)

 

(1,319)

 

CDI

 

July 2019

 

500,000

Votorantim

 

-

 

(720)

 

(720)

 

(171)

 

(549)

 

CDI

 

February 2021

 

170,000

   

-

 

(2,668)

 

(2,668)

 

(800)

 

(1,868)

           

CPFL Geração

                               

Votorantim

 

-

 

(715)

 

(715)

 

(241)

 

(474)

 

CDI

 

August 2020

 

460,000

                                 
   

 

 

 

 

 

 

 

 

 

           

Subtotal (b)

 

760

 

(9,967)

 

(9,207)

 

11,627

 

(20,835)

           
                                 

Other derivatives (2)

                               

CPFL Geração

                               

Itaú

 

21,910

 

-

 

21,910

 

2,868

 

19,042

 

dollar

 

September 2020

 

31,140

Votorantim

 

18,256

 

-

 

18,256

 

2,280

 

15,976

 

dollar

 

September 2020

 

31,140

Santander

 

22,869

 

-

 

22,869

 

2,677

 

20,192

 

dollar

 

September 2020

 

38,359

Subtotal (c)

 

63,035

 

-

 

63,035

 

7,825

 

55,210

           
                                 

Total (a+b+c)

 

1,246,339

 

(131,567)

 

1,114,772

 

1,130,755

 

(15,983)

           
                                 

Current

 

560,057

 

(48,536)

                       

Noncurrent

 

686,282

 

(83,031)

                       
                                 

For further details on terms and information on debts and debentures, see notes 16 and 17

(1) The interest rate hedge swaps have half-yearly validity, so the notional value reduces according to the amortization of the debt.

(2) The notional for this type of derivative is disclosed in dollar, due its characteristics.

 

91

 


 
 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

As mentioned above, certain subsidiaries opted to mark to market debts for which they have fully tied derivative instruments (note 16).

The Company and its subsidiaries have recognized gains and losses on their derivatives. However, as these derivatives are used as a hedge, these gains and losses minimized the impact of variations in exchange and interest rates on the hedged debts. For the quarters and semesters ended in June 30, 2016 and 2015, the derivatives resulted in the following impacts on the result, recognized in the line item of finance costs on adjustment for inflation and exchange rate changes:

 

       

Gain (loss)

       

2016

 

2015

Company

 

Hedged risk / transaction

 

2nd quarter

 

1st semester

 

2nd quarter

 

1st semester

CPFL Energia

 

Exchange variation

 

(30,528)

 

(71,618)

 

(14,103)

 

24,964

CPFL Energia

 

Mark to Market

 

492

 

2,270

 

2,030

 

523

CPFL Paulista

 

Interest rate variation

 

(757)

 

13

 

(501)

 

(781)

CPFL Paulista

 

Exchange variation

 

(397,944)

 

(696,029)

 

(139,832)

 

282,844

CPFL Paulista

 

Mark to Market

 

13,130

 

62,181

 

29,824

 

29,688

CPFL Piratininga

 

Interest rate variation

 

(208)

 

(265)

 

(134)

 

(204)

CPFL Piratininga

 

Exchange variation

 

(184,085)

 

(303,609)

 

(50,251)

 

93,637

CPFL Piratininga

 

Mark to Market

 

9,797

 

26,474

 

17,090

 

6,169

RGE

 

Interest rate variation

 

(444)

 

3

 

(295)

 

(462)

RGE

 

Exchange variation

 

(133,912)

 

(222,017)

 

(52,966)

 

102,932

RGE

 

Mark to Market

 

12,722

 

34,924

 

16,142

 

4,739

CPFL Geração

 

Interest rate variation

 

99

 

1,182

 

911

 

2,307

CPFL Geração

 

Exchange variation

 

(50,422)

 

(88,115)

 

(21,873)

 

44,834

CPFL Geração

 

Mark to Market

 

33,098

 

66,752

 

(1,121)

 

(4,416)

CPFL Santa Cruz

 

Exchange variation

 

(2,821)

 

(5,909)

 

(1,566)

 

4,106

CPFL Santa Cruz

 

Mark to Market

 

163

 

295

 

330

 

207

CPFL Leste Paulista

 

Exchange variation

 

-

 

-

 

(2,031)

 

4,903

CPFL Leste Paulista

 

Mark to Market

 

-

 

-

 

(85)

 

(66)

CPFL Sul Paulista

 

Exchange variation

 

(3,103)

 

(6,500)

 

(2,576)

 

6,161

CPFL Sul Paulista

 

Mark to Market

 

145

 

289

 

327

 

237

CPFL Jaguari

 

Exchange variation

 

(4,372)

 

(9,159)

 

(3,483)

 

7,797

CPFL Jaguari

 

Mark to Market

 

149

 

353

 

467

 

387

CPFL Mococa

 

Exchange variation

 

-

 

-

 

(894)

 

2,157

CPFL Mococa

 

Mark to Market

 

-

 

-

 

(37)

 

(29)

Paulista Lajeado Energia

 

Exchange variation

 

(5,014)

 

(9,191)

 

(2,201)

 

(1,863)

Paulista Lajeado Energia

 

Mark to Market

 

153

 

1,254

 

(342)

 

(342)

CPFL Telecom

 

Exchange variation

 

-

 

-

 

(644)

 

1,260

CPFL Telecom

 

Mark to Market

 

-

 

-

 

293

 

523

CPFL Brasil

 

Exchange variation

 

(6,312)

 

(11,462)

 

-

 

-

CPFL Brasil

 

Mark to Market

 

155

 

1,739

 

-

 

-

CPFL Serviços

 

Exchange variation

 

(1,637)

 

(2,985)

 

(681)

 

1,400

CPFL Serviços

 

Mark to Market

 

68

 

226

 

176

 

129

       

(751,387)

 

(1,228,903)

 

(228,027)

 

613,741

 

b.1) Zero-cost collar derivative contracted by CPFL Geração

In 2015, subsidiary CPFL Geração contracted US$ denominated put and call options, involving the same financial institution as counterpart, and which on a combined basis are characterized as an operation usually known as zero-cost collar. The contracting of this operation does not involve any kind of speculation, inasmuch as it is aimed at minimizing any negative impacts on future revenues of the joint venture ENERCAN, which has electric energy sale agreements with annual restatement of part of the tariff based on the variation in the US$. In addition, according to Management’s view, the current scenario is favorable for contracting this type of financial instrument, considering the high volatility implicit in dollar options and the fact that there is no initial cost for same.

The total amount contracted was US$ 111,817, with due dates between October 1, 2015 and September 30, 2020. At June 30, 2016, the total amount contracted was US$ 100,639, considering the options already settled until this date. The exercise prices of the dollar options vary from R$ 4.20 to R$ 4.40 for the put options and from R$ 5.40 to R$7.50 for the call options.

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Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

These options have been measured at fair value in a recurring manner, as required by IAS 39/CPC 38. The fair value of the options that are part of this operation has been calculated based on the following premises:

 

Valuation technique(s) and key information

We used the Black Scholes Option Pricing Model, which aims to obtain the fair price of the options involving the following variables: value of the asset, exercise price of the option, interest rate, term and volatility.

Significant unobservable inputs

Volatility determined based on the average market pricing calculations, future dollar and other variables applicable to this specific transaction, with average variation of 22.4%.

Relationship between unobservable inputs and fair value (sensitivity)

A slight rise in long-term volatility, analyzed on an isolated basis, would result in an insignificant increase in fair value. If the volatility were 10% higher and all the other variables remained constant, the net carrying amount (asset) would increase by R$ 669, resulting in a net asset of R$ 63,704.

 

Measurement of the fair value of these financial instruments, in the amount of R$ 60,454, of which R$ 58,014 refers to the measurement of the asset instruments and R$ 2,440 to the measurement of liability instruments, has been recognized in the statement of profit or loss for the period in line item Finance income, with no recognition of any effects in Other comprehensive income.

The following table reconciles the opening and closing balances of the call and put options for the semester ended in June 30, 2016, as required by IFRS 13/CPC 46:

 

   

Consolidated

   

Asset

 

Liability

 

Net

As of December 31, 2015

 

8,820

 

(2,440)

 

6,380

Fair value

 

58,014

 

2,440

 

60,454

Net cash recipient by repayment of flows

 

(3,799)

 

-

 

(3,799)

             

As of June 30, 2016

 

63,035

 

-

 

63,035

 

c) Sensitivity analysis

In compliance with CVM Instruction No. 475/2008, the Company and its subsidiaries performed sensitivity analyses of the main risks to which their financial instruments (including derivatives) are exposed, mainly comprising variations in exchange and interest rates.

If the risk exposure is considered asset, the risk to be taken into account is a reduction in the pegged indexes, resulting in a negative impact on the results of the Company and its subsidiaries.  Similarly, if the risk exposure is considered liability, the risk is of an increase in the pegged indexes and the consequent negative effect on the results.  The Company and its subsidiaries therefore quantify the risks in terms of the net exposure of the variables (dollar, euro, CDI, IGP-M, IPCA, TJLP and SELIC), as shown below:

 

c.1) Exchange rate variation

Considering the level of net exchange rate exposure at June 30, 2016 is maintained, the simulation of the effects by type of financial instrument for three different scenarios would be:

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Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

   

Consolidated

   

Exposure
R$ thousand (a)

     

Increase (decrease) R$ thousand

Instruments

   

Risk

 

Currency depreciation (b)

 

Currency appreciation / depreciation of 25% (c)

 

Currency appreciation / depreciation of 50% (c)

Financial liability instruments

 

(5,794,455)

     

(900,633)

 

773,139

 

2,446,911

Derivatives - Plain Vanilla Swap

 

6,017,402

     

935,286

 

(802,886)

 

(2,541,058)

   

222,947

 

drop of the dollar

 

34,653

 

(29,747)

 

(94,147)

                     

Financial liability instruments

 

(271,845)

     

(47,938)

 

(127,884)

 

(207,830)

Derivatives - Plain Vanilla Swap

 

270,981

     

47,786

 

127,477

 

207,169

   

(864)

 

raise of the euro

 

(152)

 

(407)

 

(661)

                     

Total

 

222,083

     

34,501

 

(30,154)

 

(94,808)

                     
           

Increase R$ thousand

Instruments

 

Exposure
US$ thousand

 

Risk

 

Currency depreciation (b)

 

Currency depreciation of 25% (c)

 

Currency depreciation of 50% (c)

Derivatives - zero-cost collar

 

100,639

(d)

raise of the dollar

 

(80,526)

 

(115,385)

 

(150,245)

(a) The exchange rates considered as of June 30, 2016 were R$ 3.21 per US$ 1.00 and R$ 3.54 per € 1.00.

(b) As per the exchange curves obtained from information made available by the BM&FBOVESPA, with the exchange rate being considered at R$ 3.71 and R$ 4.17, and exchange depreciation at 15.54% and 17.63%, for the US$ and €, respectively.

(c) As required by CVM Instruction No. 475/2008, the percentage increases in the ratios applied refer to the information made available by the BM&FBOVESPA.

(d) Owing to the characteristics of this derivative (zero-cost collar), the notional amount is presented in US$.

 

Based on the net exchange exposure in US$ being an asset, the risk is a drop in the dollar and, therefore, the local exchange rate is appreciated by 25% and 50% in relation to the probable exchange rate. Moreover, since the net exchange exposure in € is a liability, the risk is the rise of the Euro and the local exchange rate is depreciated by 25% and 50% in relation to the probable exchange rate.

 

c.2) Interest rate variation

Assuming that (i) the scenario of net exposure of the financial instruments indexed to variable interest rates at June 30, 2016 is maintained, and (ii) the respective accumulated annual indexes for the next 12 months remain stable (CDI 14.13% p.a.; IGP-M 12.21% p.a.; TJLP 7.19% p.a.; IPCA 8.84% p.a.; and SELIC 14.15% p.a.), the effects for the next 12 months would be a net finance cost of R$ 1,015,615 (expenses of CDI R$ 1,037,929, IGP-M R$ 8,696 and TJLP R$ 328,990 and income of IPCA R$ 341,599 and SELIC R$ 18,401). In the event of fluctuations in the indexes in accordance with the three scenarios described below, the effect on net finance cost would as follows:

  

   

Consolidated

           

Raise (drop)

Instruments

 

Exposure
R$ thousand

 

Risk

 

Scenario I (a)

 

Raising index by 25% (b)

 

Raising index by 50% (b)

Financial asset instruments

 

6,039,896

     

(50,735)

 

149,940

 

350,616

Financial liability instruments

 

(8,077,420)

     

67,850

 

(200,522)

 

(468,894)

Derivatives - Plain Vanilla Swap

 

(5,308,050)

     

44,588

 

(131,772)

 

(308,132)

   

(7,345,574)

 

raise of the CDI

 

61,703

 

(182,354)

 

(426,410)

                     

Financial liability instruments

 

(71,216)

     

5,042

 

4,129

 

3,215

   

(71,216)

 

raise of the IGP-M

 

5,042

 

4,129

 

3,215

                     

Financial liability instruments

 

(4,575,661)

     

(14,185)

 

(99,978)

 

(185,772)

   

(4,575,661)

 

raise of the TJLP

 

(14,185)

 

(99,978)

 

(185,772)

                     

Financial liability instruments

 

(84,816)

     

2,222

 

3,541

 

4,860

Derivatives - Plain Vanilla Swap

 

71,404

     

(1,871)

 

(2,981)

 

(4,091)

Concession financial asset

 

3,877,660

     

(101,595)

 

(161,892)

 

(222,190)

   

3,864,248

 

drop of the IPCA

 

(101,244)

 

(161,332)

 

(221,421)

                     

Sector financial asset and liability

 

130,039

 

drop of the SELIC

 

(1,118)

 

(5,439)

 

(9,759)

                     

Total

 

(7,998,164)

     

(49,802)

 

(444,974)

 

(840,147)

                     

(a) The CDI, IGP-M, TJLP, IPCA and SELIC indexes considered of 13.29%, 5.13%, 7.5%, 6.22% and 13.29%, respectively, were obtained from information available in the market.

(b) In compliance with CVM Instruction 475/08, the percentages of increase in indexes were applied to Scenario I indexes.

   

 

 

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Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

( 34 )   NON-CASH TRANSACTION

 

 

Parent company

 

Consolidated

 

June 30, 2016

 

December 31, 2015

 

June 30, 2016

 

December 31, 2015

Other transactions

 

 

 

 

 

 

 

Capital increase in investees with advance for future capital increase

52,680

 

55,157

 

-

 

-

Interest capitalized in property, plant and equipment

-

 

-

 

28,456

 

4,180

Interest capitalized in concession intangible asset - distribution infrastructure

-

 

-

 

5,483

 

5,584

Transfer between property, plant and equipment and other assets

-

 

-

 

10,673

 

4,467

 

 

 

( 35 )   RELEVANT FACT AND EVENT AFTER THE REPORTING PERIOD

35.1.      Acquisition of AES Sul

On June 16, 2016, the Company issued Relevant Fact to shareholders disclosing the acquisition of all the shares issued by AES Sul Distribuidora Gaúcha de Energia S.A. (“AES Sul”). AES Sul operates as an electric energy distributor in the state of Rio Grande do Sul and has a concession over the captive market of electric energy distribution of 118 towns in the state.

The Company will pay the seller AES Guaiba II Empreendimentos Ltda. (“AES Guaíba”) the amount of R$ 1,698,455.

The total price will be adjusted, within 45 days of closing the transaction, in accordance with the changes in working capital and net debt (except for the variation resulting from the aforementioned capital increase) of AES Sul between December 31, 2015 and the transaction closing date. The closing and implementation are subject to certain prior conditions, usual in similar transactions, as established in the purchase contract; these include prior approval by ANEEL, by the Conselho Administrativo de Defesa Econômica ("CADE") and by other third parties, including creditors of AES Sul.

At the date of these interim financial statements, the conditions for closing the transaction are still pending and the closing date is not yet known, accordingly, there is no impact on these individual and consolidated interim financial statements.

 

35.2.      Share acquisition of the Company by State Grid International Development 

In a Relevant Fact issued to the market on July 1, 2016, the Company disclosed that its controlling shareholder, Camargo Corrêa S.A. (“CCSA”) had informed it about a proposal received from State Grid International Development Limited. ("purchaser") for the acquisition of its share interest tied to the Company's controlling block.

A total of 234,086,204 of the Company's shares, currently held by ESC Energia S.A., a CCSA subsidiary, would be acquired; the shares are tied to the Shareholders'  Agreement and represent approximately 23% of the CPFL Energia’s capital. The purchase price is R$ 25.00 per Company share, subject to adjustments foreseen in the transaction documents. CCSA was advised that for purposes of the transaction, the buyer attributed a value of R$ 12.20 per share to the CPFL Renováveis shares held directly or indirectly by the company.

The purchase agreement will be finalized on conclusion of the due diligence of the Company and its subsidiaries, currently in progress at the date of these interim financial statements,  to be carried out by the purchaser and the transaction will effectively be completed after due approval by the competent public authorities, including CADE and ANEEL.

The period during which the other signatories of the Shareholders' Agreement may exercise their preemptive rights to buy all the shares covered by the transaction, or opt to participate in the transaction and, together with CCSA, dispose of all their shares in the Company tied to the Shareholders' Agreement, at the same price and under the same conditions offered to CCSA by the purchaser, will commence after finalization of the purchase agreement.

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Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

 

35.3.      Start of commercial operations - Campo dos Ventos I and Campo dos Ventos V

Commercial operation of the following generation units of the subsidiary CPFL Renováveis' wind farms started in stages between June 10 and July 6, 2016, namely (i) six 2,100 KW generation units, totaling installed capacity of 12,600 KW, in the Campo dos Ventos I Wind Farm, and (ii) ten 2,100 KW generation units, totaling installed capacity of 21,000 KW, in the Campo dos Ventos V Wind Farm. Both wind farms are located in the state of Rio Grande do Norte.

 

 

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Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

OTHER RELEVANT INFORMATION

 

Shareholders of CPFL Energia S/A holding more than 5% of the shares of the same type and class, as of June 30, 2016:

  

Shareholders

 

Common shares

 

Interest - %

ESC Energia S.A.

 

239,956,080

 

23.57

BB Carteira Livre I FIA

 

269,285,374

 

26.45

Bonaire Participações S.A.

 

1,269,386

 

0.12

Energia São Paulo FIA

 

150,136,050

 

14.75

Caixa de Previdência dos Funcionários do Banco do Brasil - Previ

 

30,502,185

 

3.00

Camargo Correa S.A.

 

27,435

 

0.00

Fundação Petrobras de Seguridade Social - Petros

 

1,861,659

 

0.18

BNDES Participações S.A.

 

68,592,097

 

6.74

Brumado Holdings Ltda. (*)

 

36,497,075

 

3.59

Antares Holdings Ltda. (*)

 

16,967,165

 

1.67

Other shareholders

 

202,820,240

 

19.93

Total

 

1,017,914,746

 

100.00

 

(*) Entities fully controlled by Bradespar S.A., which indirectly holds 5.25% of total shares common shares of CPFL Energia.

 

Quantity and characteristic of securities held by directly or indirectly Controlling Shareholders, Executive Officers, Board of Directors, Fiscal Council and Free Float, as of June 30, 2016 and December 31, 2015:

  

   

June 30, 2016

 

December 31, 2015

Shareholders

 

Common shares

 

Interest - %

 

Common shares

 

Interest - %

Controlling shareholders

 

693,038,169

 

68.08

 

676,084,869

 

68.08

Administrator

 

-

 

-

 

-

 

-

Members of the Executive Officers

 

118,878

 

0.01

 

105,672

 

0.01

Members of the Board of Directors

 

-

 

-

 

-

 

-

Fiscal Council Members

 

-

 

-

 

-

 

-

Other shareholders

 

324,757,699

 

31.90

 

316,823,674

 

31.91

Total

 

1,017,914,746

 

100.00

 

993,014,215

 

100.00

Outstanding shares - free float

 

324,757,699

 

31.90

 

316,823,674

 

31.91

 

 

 

 

 

 

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Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

SHAREHOLDING STRUCTURE

First semester of 2016

CPFL ENERGIA S/A

 

 

 

 

 

 

 

Per units shares

Date of last change

1 - SHAREHOLDERS OF THE COMPANY

CNPJ or CPF

Quotes / common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

693,038,169

68.08%

100.00%

-

0.00%

0.00%

693,038,169

68.08%

 

1.1 Esc Energia S.A.

15.146.011/0001-51

239,956,080

23.57%

100.00%

-

0.00%

0.00%

239,956,080

23.57%

April 29, 2016

1.2 Fundo Mútuo de Investimentos em Ações - BB Carteira Livre I

73.899.742/0001-74

269,285,374

26.45%

100.00%

-

0.00%

0.00%

269,285,374

26.45%

April 29, 2016

1.3 Bonaire Participações S.A.

33.754.482/0001-24

1,269,386

0.12%

100.00%

-

0.00%

0.00%

1,269,386

0.12%

April 29, 2016

1.4 Energia São Paulo FIA

02.178.371/0001-93

150,136,050

14.75%

100.00%

-

0.00%

0.00%

150,136,050

14.75%

April 29, 2016

1.5 Caixa de Previdência dos Funcionários do Banco do Brasil - Previ

33.754.482/0001-24

30,502,185

3.00%

100.00%

-

0.00%

0.00%

30,502,185

3.00%

April 29, 2016

1.6 Camargo Correa S.A.

01.098.905/0001-09

27,435

0.00%

100.00%

-

0.00%

0.00%

27,435

0.00%

April 29, 2016

1.7 Fundação Petrobras de Seguridade Social - Petros

34.053.942/0001-50

1,861,659

0.18%

100.00%

-

0.00%

0.00%

1,861,659

0.18%

April 29, 2016

Noncontrolling shareholders

 

324,876,577

31.92%

100.00%

-

0.00%

0.00%

324,876,577

31.92%

 

1.8 BNDES Participações S.A.

00.383.281/0001-09

68,592,097

6.74%

100.00%

-

0.00%

0.00%

68,592,097

6.74%

April 29, 2016

1.9 Brumado Holdings Ltda.

08.397.763/0001-20

36,497,075

3.59%

100.00%

-

0.00%

0.00%

36,497,075

3.59%

April 29, 2016

1.10 Antares Holdings Ltda.

07.341.926/001-90

16,967,165

1.67%

100.00%

-

0.00%

0.00%

16,967,165

1.67%

April 29, 2016

1.11 Board of Directors

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

April 29, 2016

1.12 Executive officers

 

118,878

0.01%

100.00%

-

0.00%

0.00%

118,878

0.01%

April 29, 2016

1.13 Other shareholders

 

202,701,362

19.91%

100.00%

-

0.00%

0.00%

202,701,362

19.91%

 

Total

 

1,017,914,746

100.00%

100.00%

-

0.00%

0.00%

1,017,914,746

100.00%

 

2 - Entity: 1.1 Esc Energia S.A.

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

1,042,392,615

100.00%

100.00%

-

0.00%

0.00%

1,042,392,615

100.00%

 

1.1.1 VBC Energia S.A.

00.095.147/0001-02

521,196,308

51.20%

100.00%

-

0.00%

0.00%

521,196,308

51.20%

November 28, 2013

1.1.2 Camargo Corrêa S.A.

01.098.905/0001-09

521,196,307

51.20%

100.00%

-

0.00%

0.00%

521,196,307

51.20%

May 16, 2016

Noncontrolling shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

1.1.3 Other shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

Total

 

1,042,392,615

100.00%

100.00%

-

0.00%

0.00%

1,042,392,615

100.00%

 

3 - Entity: 1.1.1 VBC ENERGIA S/A

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

4,337,275

100.00%

98.57%

62,981

100.00%

1.43%

4,400,256

100.00%

 

1.1.1.1 Camargo Corrêa Investimento em Infra-Estrutura S.A.

02.372.232/0001-04

2,434,624

0.24%

98.11%

47,018

0.00%

1.89%

2,481,642

0.24%

June 2, 2016

1.1.1.2 Camargo Corrêa S.A.

01.098.905/0001-09

1,902,651

0.19%

99.17%

15,963

0.00%

0.83%

1,918,614

0.19%

October 21, 2015

Noncontrolling shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

1.1.1.3 Other shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

Total

 

4,337,275

100.00%

98.57%

62,981

100.00%

1.43%

4,400,256

100.00%

 

4 - Entity: 1.1.2 Camargo Corrêa S.A.

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

48,943

99.11%

34.46%

93,099

100.00%

65.54%

142,042

99.69%

 

1.1.2.1 Participações Morro Vermelho S.A.

03.987.192/0001-60

48,943

0.00%

34.46%

93,099

0.00%

65.54%

142,042

0.01%

April 30, 2012

Noncontrolling shareholders

 

439

0.89%

99.77%

1

0.00%

0.23%

440

0.31%

 

1.1.2.2 Treasury stocks

 

436

0.00%

100.00%

-

0.00%

0.00%

436

0.00%

 

1.1.2.3 Other shareholders

 

3

0.00%

75.00%

1

0.00%

25.00%

4

0.00%

 

Total

 

49,382

100.00%

34.66%

93,100

100.00%

65.34%

142,482

100.00%

 

5 - Entity: 1.1.3 Camargo Corrêa Investimento em Infra-Estrutura S.A.

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

1,058,326,175

100.00%

100.00%

-

0.00%

0.00%

1,058,326,175

100.00%

 

1.1.3.1 Camargo Corrêa S.A.

01.098.905/0001-09

1,058,326,175

103.97%

100.00%

-

0.00%

0.00%

1,058,326,175

103.97%

April 28, 2016

Noncontrolling shareholders

 

3

0.00%

100.00%

-

0.00%

0.00%

3

0.00%

 

1.1.3.2 Other shareholders

 

3

0.00%

100.00%

-

0.00%

0.00%

3

0.00%

 

Total

 

1,058,326,178

100.00%

100.00%

-

0.00%

0.00%

1,058,326,178

100.00%

 

6 - Entity: 1.1.2.1 Participações Morro Vermelho S.A.

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

2,250,000

100.00%

100.00%

-

0.00%

0.00%

2,250,000

33.33%

 

1.1.2.1.1 RCABON Empreendimentos e Participações S.A

09.594.448/0001-55

750,000

0.07%

100.00%

-

0.00%

0.00%

750,000

0.07%

April 30, 2015

1.1.2.1.2 RCNON Empreendimentos e Participações S.A

09.594.570/0001-21

750,000

0.07%

100.00%

-

0.00%

0.00%

750,000

0.07%

April 30, 2015

1.1.2.1.3 RCPODON Empreendimentos e Participações S.A

09.594.541/0001-60

750,000

0.07%

100.00%

-

0.00%

0.00%

750,000

0.07%

April 30, 2015

Noncontrolling shareholders

 

-

0.00%

0.00%

4,500,000

100.00%

100.00%

4,500,000

66.67%

 

1.1.2.1.4 RCABPN Empreendimentos e Participações S.A

09.594.459/0001-35

-

0.00%

0.00%

1,498,080

0.00%

100.00%

1,498,080

0.15%

October 1, 2008

1.1.2.1.5 RCNPN Empreendimentos e Participações S.A

09.594.480/0001-30

-

0.00%

0.00%

1,498,080

0.00%

100.00%

1,498,080

0.15%

October 1, 2008

1.1.2.1.6 RCPODPN Empreendimentos e Participações S.A

09.594.468/0001-26

-

0.00%

0.00%

1,498,080

0.00%

100.00%

1,498,080

0.15%

October 1, 2008

1.1.2.1.7 RRRPN Empreendimentos e Participações S.A

09.608.284/0001-78

-

0.00%

0.00%

5,760

0.00%

100.00%

5,760

0.00%

October 1, 2008

1.1.2.1.8 Other shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

Total

 

2,250,000

100.00%

33.33%

4,500,000

100.00%

66.67%

6,750,000

100.00%

 

7 - Entity: 1.1.2.1.1 RCABON Empreendimentos e Participações S.A

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

749,850

100.00%

99.99%

90

60.00%

0.01%

749,940

99.99%

 

1.1.2.1.1.1 Rosana Camargo de Arruda Botelho

535.804.358-68

749,850

0.07%

99.99%

90

0.00%

0.01%

749,940

0.07%

December 6, 2012

Noncontrolling shareholders

 

-

0.00%

0.00%

60

40.00%

100.00%

60

0.01%

 

1.1.2.1.1.2 Other shareholders

 

-

0.00%

0.00%

60

0.00%

100.00%

60

0.00%

 

Total

 

749,850

100.00%

99.98%

150

100.00%

0.02%

750,000

100.00%

 

8 - Entity: 1.1.2.1.2 RCNON Empreendimentos e Participações S.A

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

749,850

100.00%

99.99%

40

26.67%

0.01%

749,890

99.99%

 

1.1.2.1.2.1 Renata de Camargo Nascimento

535.804.608-97

749,850

0.07%

99.99%

40

0.00%

0.01%

749,890

0.07%

October 1, 2008

Noncontrolling shareholders

 

-

0.00%

0.00%

110

73.33%

100.00%

110

0.01%

 

1.1.2.1.2.2 Other shareholders

 

-

0.00%

0.00%

110

0.00%

100.00%

110

0.00%

 

Total

 

749,850

100.00%

99.98%

150

100.00%

0.02%

750,000

100.00%

 

9 - Entity: 1.1.2.1.3 RCPODON Empreendimentos e Participações S.A

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

749,850

100.00%

100.00%

-

0.00%

0.00%

749,850

99.98%

 

1.1.2.1.3.1 Regina de Camargo Pires Oliveira Dias

153.204.398-81

749,850

0.07%

100.00%

-

0.00%

0.00%

749,850

0.07%

October 1, 2008

Noncontrolling shareholders

 

-

0.00%

0.00%

150

100.00%

100.00%

150

0.02%

 

1.1.2.1.3.2 Other shareholders

 

-

0.00%

0.00%

150

0.00%

100.00%

150

0.00%

 

Total

 

749,850

100.00%

99.98%

150

100.00%

0.02%

750,000

100.00%

 

                   

(continue)

 

 

 

98

 


 
 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

10 - Entity: 1.1.2.1.4 RCABPN Empreendimentos e Participações S.A

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

1,499,940

100.00%

100.00%

-

0.00%

0.00%

1,499,940

100.00%

 

1.1.2.1.4.1 Rosana Camargo de Arruda Botelho

535.804.358-68

1,499,940

0.15%

100.00%

-

0.00%

0.00%

1,499,940

0.15%

December 6, 2012

Noncontrolling shareholders

 

60

0.00%

100.00%

-

0.00%

0.00%

60

0.00%

 

1.1.2.1.4.2 Other shareholders

 

60

0.00%

100.00%

-

0.00%

0.00%

60

0.00%

 

Total

 

1,500,000

100.00%

100.00%

-

0.00%

0.00%

1,500,000

100.00%

 

11 - Entity: 1.1.2.1.5 RCNPN Empreendimentos e Participações S.A

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

1,499,890

99.99%

100.00%

-

0.00%

0.00%

1,499,890

99.99%

 

1.1.2.1.5.1 Renata de Camargo Nascimento

535.804.608-97

1,499,890

0.15%

100.00%

-

0.00%

0.00%

1,499,890

0.15%

October 1, 2008

Noncontrolling shareholders

 

110

0.01%

100.00%

-

0.00%

0.00%

110

0.01%

 

1.1.2.1.5.2 Other shareholders

 

110

0.00%

100.00%

-

0.00%

0.00%

110

0.00%

 

Total

 

1,500,000

100.00%

100.00%

-

0.00%

0.00%

1,500,000

100.00%

 

12 - Entity: 1.1.2.1.6 RCPODPN Empreendimentos e Participações S.A

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

1,499,850

99.99%

100.00%

-

0.00%

0.00%

1,499,850

99.99%

 

1.1.2.1.6.1 Regina de Camargo Pires Oliveira Dias

153.204.398-81

1,499,850

0.15%

100.00%

-

0.00%

0.00%

1,499,850

0.15%

October 1, 2008

Noncontrolling shareholders

 

150

0.01%

100.00%

-

0.00%

0.00%

150

0.01%

 

1.1.2.1.6.2 Other shareholders

 

150

0.00%

100.00%

-

0.00%

0.00%

150

0.00%

 

Total

 

1,500,000

100.00%

100.00%

-

0.00%

0.00%

1,500,000

100.00%

 

13 - Entity: 1.1.2.1.7 RRRPN Empreendimentos e Participações S.A

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

5,940

100.00%

100.00%

-

0.00%

0.00%

5,940

100.00%

 

1.1.2.1.7.1 Rosana Camargo de Arruda Botelho

535.804.358-68

1,980

0.00%

100.00%

-

0.00%

0.00%

1,980

0.00%

October 1, 2008

1.1.2.1.7.2 Renata de Camargo Nascimento

535.804.608-97

1,980

0.00%

100.00%

-

0.00%

0.00%

1,980

0.00%

October 1, 2008

1.1.2.1.7.3 Regina de Camargo Pires Oliveira Dias

153.204.398-81

1,980

0.00%

100.00%

-

0.00%

0.00%

1,980

0.00%

October 1, 2008

Noncontrolling shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

1.1.2.1.7.4 Other shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

Total

 

5,940

100.00%

100.00%

-

0.00%

0.00%

5,940

100.00%

 

14 - Entity: 1.2 Fundo Mútuo de Investimentos em Ações - BB Carteira Livre I

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

130,163,541

100.00%

100.00%

-

0.00%

0.00%

130,163,541

100.00%

 

1.2.1 Caixa de Previdência dos Funcionários do Banco do Brasil - PREVI

33.754.482/0001-24

130,163,541

12.79%

100.00%

-

0.00%

0.00%

130,163,541

12.79%

November 3, 2009

Noncontrolling shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

1.2.2 Other shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

Total

 

130,163,541

100.00%

100.00%

-

0.00%

0.00%

130,163,541

100.00%

 

15 - Entity: 1.3 Bonaire Participações S.A.

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

66,728,877

100.00%

100.00%

-

0.00%

0.00%

66,728,877

100.00%

 

1.3.1 Energia São Paulo Fundo de Investimento em Ações

02.178.371/0001-93

66,728,877

6.56%

100.00%

-

0.00%

0.00%

66,728,877

6.56%

July 21, 2014

Noncontrolling shareholders

 

1

0.00%

100.00%

-

0.00%

0.00%

1

0.00%

 

1.3.2 Other shareholders

 

1

0.00%

100.00%

-

0.00%

0.00%

1

0.00%

 

Total

 

66,728,878

100.00%

100.00%

-

0.00%

0.00%

66,728,878

100.00%

 

16 - Entity: 1.4 Energia São Paulo Fundo de Investimento em Ações

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

796,479,768

100.00%

100.00%

-

0.00%

0.00%

796,479,768

100.00%

 

1.4.1 Fundos de Investimento em Cotas de Fundo de Investimento em Participações 114

07.792.436/0001-00

353,528,507

34.73%

100.00%

-

0.00%

0.00%

353,528,507

34.73%

November 16, 2004

1.4.2 Fundação Petrobras de Seguridade Social - Petros

34.053.942/0001-50

181,405,069

17.82%

100.00%

-

0.00%

0.00%

181,405,069

17.82%

November 16, 2004

1.4.3 Fundação Sabesp de Seguridade Social - Sabesprev

65.471.914/0001-86

4,823,881

0.47%

100.00%

-

0.00%

0.00%

4,823,881

0.47%

November 16, 2004

1.4.4 Fundação Sistel de Seguridade Social

00.493.916/0001-20

256,722,311

25.22%

100.00%

-

0.00%

0.00%

256,722,311

25.22%

November 16, 2004

Noncontrolling shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

1.4.5 Other shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

Total

 

796,479,768

100.00%

100.00%

-

0.00%

0.00%

796,479,768

100.00%

 

17 - Entity: 1.4.1 Fundos de Investimento em Cotas de Fundo de Investimento em Participações 114

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

5,459,656

100.00%

100.00%

-

0.00%

0.00%

5,459,656

100.00%

 

1.4.1.1 Fundação CESP

62.465.117/0001-06

5,459,656

0.54%

100.00%

-

0.00%

0.00%

5,459,656

0.54%

November 16, 2004

Noncontrolling shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

1.4.1.2 Other shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

Total

 

5,459,656

100.00%

100.00%

-

0.00%

0.00%

5,459,656

100.00%

 

18 - Entity: 1.8 BNDES Participações S.A.

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

1

100.00%

100.00%

-

0.00%

0.00%

1

100.00%

 

1.8.1 Banco Nacional de Desenvolvimento Econômico e Social

33.657.248/0001-89

1

0.00%

100.00%

-

0.00%

0.00%

1

0.00%

September 4, 1974

Noncontrolling shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

1.8.2 Other shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

Total

 

1

100.00%

100.00%

-

0.00%

0.00%

1

100.00%

 

19 - Entity: 1.8.1 Banco Nacional de Desenvolvimento Econômico e Social

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

6,273,711,452

100.00%

100.00%

-

0.00%

0.00%

6,273,711,452

100.00%

 

1.8.1.1 Federal Government (Department of Treasury)

00.394.460/0409-50

6,273,711,452

616.33%

100.00%

-

0.00%

0.00%

6,273,711,452

616.33%

September 28, 2012

Noncontrolling shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

1.8.1.2 Other shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

Total

 

6,273,711,452

100.00%

100.00%

-

0.00%

0.00%

6,273,711,452

100.00%

 

20 - Entity: 1.9 Brumado Holdings Ltda.

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

983,227,791

100.00%

100.00%

-

0.00%

0.00%

983,227,791

100.00%

 

1.9.1 Antares Holdings Ltda.

07.341.926/0001-90

983,227,791

96.59%

100.00%

-

0.00%

0.00%

983,227,791

96.59%

April 30, 2015

1.9.2 Bradespar S.A.

03.847.461/0001-92

1

0.00%

100.00%

-

0.00%

0.00%

1

0.00%

April 30, 2015

Noncontrolling shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

1.9.3 Other shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

Total

 

983,227,791

100.00%

100.00%

-

0.00%

0.00%

983,227,791

100.00%

 

21 - Entity: 1.10 Antares Holdings Ltda.

CNPJ or CPF

Quotes/common shares

%

% Total

Preferred shares

%

% Total

TOTAL

% Total

 

Controlling shareholders

 

326,999,999

100.00%

100.00%

-

0.00%

0.00%

326,999,999

100.00%

 

1.10.1 Bradespar S.A.

03.847.461/0001-92

326,999,999

32.12%

100.00%

-

0.00%

0.00%

326,999,999

32.12%

April 30, 2015

1.10.2 NCF Participações S.A.

04.233.319/0001-18

1

0.00%

100.00%

-

0.00%

0.00%

1

0.00%

April 30, 2015

Noncontrolling shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

1.10.3 Other shareholders

 

-

0.00%

0.00%

-

0.00%

0.00%

-

0.00%

 

Total

 

326,999,999

100.00%

100.00%

-

0.00%

0.00%

326,999,999

100.00%

 

 

The Company is committed to arbitration in the Market Arbitration Chamber, in accordance with the Arbitration Clause in Article 44 of the Company’s By-Laws.

 

99

 


 
 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: June 30, 2016 - CPFL Energia S. A

 

INDEPENDENT AUDITORS' REPORT

 

 

REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION

 

To the Board of Directors and Shareholders of

CPFL Energia S.A.

São Paulo - SP

 

Introduction

We have reviewed the individual and consolidated interim financial information of CPFL Energia S.A. (“CPFL Energia” or “Company”), included in the Interim Financial Information Form - ITR, for the quarter ended June 30, 2016, which comprises the balance sheet as of June 30, 2016 and the related statements of income, comprehensive income for the three-month and six-month periods then ended and changes in shareholders' equity and cash flows for the six-month periods then ended, including the explanatory notes.

Management is responsible for the preparation of these individual and consolidated interim financial information in accordance with technical pronouncement CPC 21 (R1) - Interim Financial Reporting and in accordance with the international standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, and their presentation in accordance with the standards issued by the Brazilian Securities and Exchange Commission (“CVM”) applicable to the preparation of Interim Financial Information - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with Brazilian and international standards on review of interim financial information (NBC TR 2410 and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with standards on auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion on the interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the ITR referred to above is not prepared, in all material respects, in accordance with technical pronouncement CPC 21 (R1) and IAS 34 applicable to the preparation of Interim Financial Information - ITR and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission (“CVM”).

 

Other matters

Statements of value added

We have also reviewed the individual and consolidated statements of value added (“DVA”) for the six-month ended June 30, 2016, prepared under Management's responsibility, the presentation of which is required by the standards issued by the Brazilian Securities and Exchange Commission (“CVM”) applicable to the preparation of Interim Financial Information - ITR and is considered as supplemental information for IFRSs that do not require the presentation of DVA. These statements were subject to the same review procedures described above and, based on our review, nothing has come to our attention that causes us to believe that there are not fairly presented, in all material respects, in relation to the individual and consolidated interim financial information taken as a whole.

 

Campinas, August 1, 2016

 

DELOITTE TOUCHE TOHMATSU                      Marcelo Magalhães Fernandes

Auditores Independentes                                  Engagement Partner

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SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date August 8, 2016
 
CPFL ENERGIA S.A.
 
By:  
         /S/  GUSTAVO ESTRELLA
  Name:
Title:  
 Gustavo Estrella 
Chief Financial Officer and Head of Investor Relations
 
 
FORWARD-LOOKING STATEMENTS

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.