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 November, 2017
Commission File Number 32297


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

 
Rodovia Engenheiro Miguel Noel Nascentes Burnier, km 2,5, parte
CEP 13088-140 - Parque São Quirino, Campinas - 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 – 2017 – CPFL Energia S.A.                                                          Version: 5

 

Summary

 

Registration data

 

1.     General information

1
 

2.     Address

2
 

3.     Securities

3
 

4.     Auditor information

4
 

5.     Share register

5
 

6.     Investor relations officer

6
 

7.     Shareholders’ department

7

 

 

 

 


 
 

Registration Form – 2017 – CPFL Energia S.A.                                                          Version: 5

 

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:          01/23/2017

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

 

1

 


 
 

Registration Form – 2017 – CPFL Energia S.A.                                                          Version: 5

 

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: 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]

 

2

 


 
 

Registration Form – 2017 – CPFL Energia S.A.                                                          Version: 5

 

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

 

3

 


 
 

Registration Form – 2017 – CPFL Energia S.A.                                                          Version: 5

 

4.     Auditor information

 

Does the issuer have an auditor?                      Yes

CVM code:                                                      385-9

Type of auditor:                                               Brazilian firm

Independent auditor:                                         KPMG Auditores Independentes

CNPJ (Corporate Taxpayer ID):                         57.755.217/0011-09

Period of service:                                             03/29/2017

Partner in charge                                              Marcio José dos Santos

Period of service                                              03/29/2017

CPF (Individual Taxpayer ID)                             253.206.858-23

 

4

 


 
 

Registration Form – 2017 – CPFL Energia S.A.                                                          Version: 5

 

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]

5

 


 
 

Registration Form – 2017 – CPFL Energia S.A.                                                          Version: 5

 

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:

 

6

 


 
 

Registration Form – 2017 – CPFL Energia S.A.                                                          Version: 5

 

7.     Shareholders’ department

 

Contact                                                            Sérgio Luis Felice

Date when the officer assumed the position:     09/13/2017

Date when the officer left the position:             

 

 

Address:

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

Telephone (019) 3756-8018, email: [email protected]

 

 

7

 


 
 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Table of Contents  
Company Data  
Capital Composition 1
Individual financial statements  
Statement of Financial Position - Assets 2
Statement of Financial Position - Liabilities and Equity 3
Statement of Income 4
Statement of Comprehensive Income 5
Statement of Cash Flows – Indirect Method 6
Statement of Changes in Equity  
01/01/2017 to 09/30/2017 7
01/01/2016 to 09/30/2016 8
Statements of Value Added 9
Consolidated Interim Financial Statements  
Statement of Financial Position - Assets 10
Statement of Financial Position - Liabilities and Equity 11
Statement of Income 12
Statement of Comprehensive Income 13
Statement of Cash Flows - Indirect Method 14
Statement of Changes in Equity  
01/01/2017 to 09/30/2017 15
01/01/2016 to 09/30/2016 16
Statements of Value Added 17
Comments on performance 18
Notes to Interim financial statements 27
Other relevant information 89
Reports  
Independent Auditor’s Report - Unqualified 91

 

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

Capital Composition

Number of Shares

(In units)

Closing Date

09/30/2017

Paid-in capital

 

Common

1,017,914,746

Preferred

0

Total

1,017,914,746

Treasury Stock

0

Common

0

Preferred

0

Total

0

 

 

 

1 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of Financial Position – Assets

 

Code

Description

  Current Year 

09/30/2017

 Prior Year 

12/31/2016

 1

Total assets

         8,920,264

         8,908,964

 1.01

Current assets

            442,803

            791,016

 1.01.01

Cash and cash equivalents

            128,616

              64,973

 1.01.06

Taxes recoverable

              90,825

              82,836

 1.01.06.01

Current taxes recoverable 

              90,825

              82,836

 1.01.06.01.01

Income tax and social contribution to be offset

              86,293

              53,246

 1.01.06.01.02

Other taxes recoverable

                4,532

              29,590

 1.01.08

Other current assets

            223,362

            643,207

 1.01.08.03

Others

            223,362

            643,207

 1.01.08.03.01

Other receivables

                   310

                   229

 1.01.08.03.04

Dividends and interest on capital

            223,052

            642,978

 1.02

Noncurrent assets

         8,477,461

         8,117,948

 1.02.01

Long-term assets

            221,140

            250,625

 1.02.01.06

Deferred taxes

            187,327

            171,073

 1.02.01.06.02

Deferred tax assets

            187,327

            171,073

 1.02.01.08

Receivables from related parties

              25,619

              52,582

 1.02.01.08.02

Receivables from subsidiaries

              25,619

              52,582

 1.02.01.09

Other noncurrent assets

                8,194

              26,970

 1.02.01.09.04

Escrow deposits

                   649

                   710

 1.02.01.09.10

Other receivables

                7,545

              26,260

 1.02.02

Investments

         8,255,110

         7,866,100

 1.02.02.01

Equity interests

         8,255,110

         7,866,100

 1.02.02.01.02

Investments in subsidiaries

         8,255,110

         7,866,100

 1.02.03

Property, plant and equipment

                1,179

                1,199

 1.02.03.01

Property, plant and equipment - operational

                1,179

                1,199

 1.02.04

Intangible assets

                     32

                     24

 1.02.04.01

Intangible assets

                     32

                     24

 

 

 

2 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of Financial Position – Liabilities and Equity

 

 

(In thousands of Brazilian reais – R$)

 

 

 

 

 

 

Code

Description

  Current Year  09/30/2017

 Prior Year  12/31/2016

 2

Total liabilities

                 8,920,264

                 8,908,964

 2.01

Current liabilities

                      20,423

                    255,755

 2.01.02

Trade payables

                           644

                        3,760

 2.01.02.01

Domestic suppliers

                           644

                        3,760

 2.01.03

Taxes payable

                           359

                           454

 2.01.03.01

Federal taxes payable

                           359

                           453

 2.01.03.01.02

PIS (tax on revenue)

                             25

                             15

 2.01.03.01.03

COFINS (tax on revenue)

                           155

                             90

 2.01.03.01.04

Other federal taxes

                           179

                           348

 2.01.03.03

Municipal taxes

                              -  

                               1

 2.01.03.03.01

Other municipal taxes

                              -  

                               1

 2.01.04

Borrowings

                             66

                      15,334

 2.01.04.02

Debentures

                             66

                      15,334

 2.01.04.02.01

Debentures

                             66

                      15,334

 2.01.05

Other liabilities

                      19,354

                    236,207

 2.01.05.02

Others

                      19,354

                    236,207

 2.01.05.02.01

Dividends and interest on own capital payable

                        3,345

                    218,630

 2.01.05.02.07

Other liabilities

                      16,009

                      17,577

 2.02

Noncurrent liabilities

                    214,307

                    683,188

 2.02.01

Borrowings

                    183,288

                    612,251

 2.02.01.02

Debentures

                    183,288

                    612,251

 2.02.01.02.01

Debentures

                    183,288

                    612,251

 2.02.02

Other liabilities

                      30,462

                      69,929

 2.02.02.02

Others

                      30,462

                      69,929

 2.02.02.02.05

Provision for equity interest losses

                              -  

                      19,301

 2.02.02.02.08

Other payables

                      30,462

                      50,628

 2.02.04

Provisons

                           557

                        1,008

 2.02.04.01

Provision on tax, social security, labor and civil risks

                           557

                        1,008

 2.02.04.01.02

Provision on social and labor risks

                             31

                           467

 2.02.04.01.04

Provision on civil risks

                           526

                           541

 2.03

Equity

                 8,685,534

                 7,970,021

 2.03.01

Issued capital

                 5,741,284

                 5,741,284

 2.03.02

Capital reserves

                    468,014

                    468,014

 2.03.04

Earnings reserves

                 2,045,584

                 1,995,355

 2.03.04.01

Legal reserve

                    739,102

                    739,102

 2.03.04.02

Statutory reserve

                 1,306,482

                 1,248,433

 2.03.04.08

Additional dividend proposed

                              -  

                        7,820

 2.03.05

Retained earnings

                    684,579

                              -   

 2.03.08

Other comprehensive income

                   (253,927)

                   (234,632)

 2.03.08.01

Accumulated comprehensive income

                   (253,927)

                   (234,632)

       

 

 

 

3 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of income

 

(In thousands of Brazilian reais – R$)

 

 

 

 

 

 

 

 

 

 

Code

Description

 Current Year - Third Quarter

 YTD Current Year

 Prior Year - Third Quarter

 YTD Prior Year

 

 

 07/01/2017 to 09/30/2017

 01/01/2017 to 09/30/2017

 07/01/2016 to 09/30/2016

 01/01/2016 to 09/30/2016

 3.01

Revenue from sale of energy and/or services

                               1

                              1

                         -  

                         1,713

 3.03

Gross profit

                               1

                              1

                         -  

                         1,713

 3.04

Operating income (expenses)

                    345,775

                   753,744

                215,150

                     741,018

 3.04.02

General and administrative expenses

                      (7,672)

                   (31,743)

                (16,083)

                      (37,025)

 3.04.06

Equity interests in subsidiaries, associates and joint ventures

                    353,447

                   785,487

                231,233

                     778,043

 3.05

Profit before finance income (expenses) and taxes

                    345,776

                   753,745

                215,150

                     742,731

 3.06

Finance income (expenses)

                    (15,656)

                   (48,825)

                  19,631

                       24,392

 3.06.01

Finance income

                        6,995

                     15,979

                  25,320

                       61,707

 3.06.02

Finance expenses

                    (22,651)

                   (64,804)

                  (5,689)

                      (37,315)

 3.07

Profit (loss) before taxes on income

                    330,120

                   704,920

                234,781

                     767,123

 3.08

Income tax and social contribution

                        1,693

                     16,253

                  (3,216)

                        (4,398)

 3.08.01

Current

                              -  

                             -  

                    8,100

                      (21,062)

 3.08.02

Deferred

                        1,693

                     16,253

                (11,316)

                       16,664

 3.09

Profit (loss) from continuing operations

                    331,813

                   721,173

                231,565

                     762,725

 3.11

Profit (loss) for the period

                    331,813

                   721,173

                231,565

                     762,725

 3.99.01.01

Earnings per share - Common shares - Basic (R$)

                          0.33

                         0.71

                      0.23

                           0.75

 3.99.02.01

Earnings per share - Common shares - Diluted (R$)

                          0.32

                         0.71

                      0.22

                           0.74

 

 

4 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of Comprehensive Income

 

(In thousands of Brazilian reais – R$)

 

 

 

 

 

 

 

 

 

 

Code

Description

Current Year -

Third Quarter

YTD Current

Year

Prior

Year - Third

Quarter

YTD Prior

Year

07/01/2017 to

09/30/2017

01/01/2017 to

09/30/2017

07/01/2016 to

09/30/2016

01/01/2016 to

09/30/2016

 4.01

Profit for the period

          331,813

         721,173

         231,565

         762,725

 4.02

Other comprehensive income

                    -  

                   -  

                   -  

       (404,363)

 4.02.01

Equity on comprehensive income for the period of subsidiaries

                    -  

                   -  

                   -  

       (404,363)

 4.03

Comprehensive income for the period

          331,813

         721,173

         231,565

         358,362

 

 

 

5 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of Cash Flows – Indirect Method

 

(In thousands of Brazilian reais – R$)

 

 

 

 

 

 

Code

Description

 Current year

01/01/2017 to

09/30/2017

 Prior Year

01/01/2016 to

09/30/2016

 6.01

Cash flows from operating activities

                      741,801

                   1,250,966

 6.01.01

Cash generated from operations

                       (21,149)

                        15,210

 6.01.01.01

Profit for the period, including income tax and social contribution

                      704,919

                      767,123

 6.01.01.02

Depreciation and amortization

                             163

                             148

 6.01.01.03

Provision for tax, civil and labor risks

                              (41)

                             260

 6.01.01.04

Share of profit (loss) of investees

                     (785,487)

                     (778,043)

 6.01.01.05

Interest on debts, inflation adjusment and exchange rate changes

                        59,297

                        25,722

 6.01.02

Changes in assets and liabilities

                      762,950

                   1,235,756

 6.01.02.01

Dividends and interest on own capital received

                      847,766

                   1,300,253

 6.01.02.02

Taxes recoverable

                         (5,220)

                          7,170

 6.01.02.03

Escrow deposits

                               80

                              (64)

 6.01.02.04

Other operating assets

                        18,633

                          7,362

 6.01.02.05

Trade payables

                         (3,116)

                            (412)

 6.01.02.06

Other taxes and social contributions

                              (95)

                            (135)

 6.01.02.07

Interest on debts (paid)

                       (70,850)

                       (45,470)

 6.01.02.08

Income tax and social contribution paid

                                (4)

                       (27,117)

 6.01.02.09

Other operating liabilities

                       (23,836)

                         (4,771)

 6.01.02.10

Tax, civil and labor risks paid

                            (408)

                         (1,060)

 6.02

Net cash in investing activities

                       (23,215)

                     (115,617)

 6.02.01

Purchases of property, plant and equipment

                            (141)

                            (572)

 6.02.02

Securities

                                -  

                            (400)

 6.02.04

Intragroup loans

                        27,981

                       (43,624)

 6.02.06

Purchases of intangible assets

                              (10)

                                -  

 6.02.07

Advance for future capital increase

                       (51,045)

                       (71,021)

 6.03

Net cash in financing activities

                     (654,945)

                  (1,097,814)

 6.03.01

Repayments of borrowings and debentures, net of derivatives

                     (434,000)

                     (888,408)

 6.03.02

Payments of dividend and interest on own capital

                     (220,945)

                     (204,695)

 6.03.04

Derivative instruments paid

                                -  

                         (4,711)

 6.05

Increase (decrease) in cash and cash equivalents

                        63,641

                        37,535

 6.05.01

Cash and cash equivalents at beginning of period

                        64,974

                      424,192

 6.05.02

Cash and cash equivalents at end of period

                      128,615

                      461,727

 

 

6 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of Changes in Equity – from January 1, 2017 to September 30, 2017

 

Code

Description

 Paid-in capital

 Capital
reserves,

stock options
and treasury
stock

 Earnings
reserves

 Retained earnings/
accumulated
losses

 Other
comprehensive
income

 Equity

 5.01

Opening balances

                 5,741,284

              468,014

           1,995,355

                       -  

            (234,632)

           7,970,021

 5.03

Adjusted opening balances

                 5,741,284

              468,014

           1,995,355

                       -  

            (234,632)

           7,970,021

 5.04

Capital transactions with shareholders

                              -  

                       -  

                (7,820)

                  2,160

                       -  

                (5,660)

 5.04.06

Dividends

                              -  

                       -  

                (7,820)

                       -  

                       -  

                (7,820)

 5.04.12

Prescribed dividends

                              -  

                       -  

                       -  

                  2,160

                       -  

                  2,160

 5.05

Total comprehensive income

                              -  

                       -  

                       -  

              721,173

                       -  

              721,173

 5.05.01

Profit for the period

                              -  

                       -  

                       -  

              721,173

                       -  

              721,173

 5.06

Internal changes in equity

                              -  

                       -  

                58,049

              (38,755)

              (19,294)

                       -  

 5.06.05

Equity on comprehensive income of subsidiaries

                              -  

                       -  

                       -  

                19,294

              (19,294)

                       -  

 5.06.06

Transfers to statutory reserve in the period

                              -  

                       -  

                58,049

              (58,049)

                       -  

                       -  

 5.07

Ending balances

                 5,741,284

              468,014

           2,045,584

              684,578

            (253,926)

           8,685,534

 

 

7 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Individual Financial Statements

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

 

 (In thousands of Brazilian reais – R$)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Code

 Description

Paid-in capital

Capital
reserves,
stock options
and treasury
stock

Earnings
reserves

Retained
earnings/
accumulated
losses

Other
comprehensive
income

Equity

5.01

Opening 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

                     220

            (392,972)

                  1,756

                       -  

                  1,976

5.04.01

Capital increase

          392,972

                       -  

                       -  

                       -  

                       -  

                       -  

5.04.10

Capital increase in subsidiaries with no change in control

                   -  

                     220

                       -  

                       -  

                       -  

                     220

5.04.12

Prescribed dividend

                   -  

                       -  

                       -  

                  1,756

                       -  

                  1,756

5.05

Total comprehensive income

                   -  

                       -  

                       -  

              762,725

            (404,362)

              358,363

5.05.01

Net income for the period

                   -  

                       -  

                       -  

              762,725

                       -  

              762,725

5.05.02

Other comprehensive income

                   -  

                       -  

                       -  

                       -  

            (404,362)

            (404,362)

5.06

Internal changes in Shareholders' equity

                   -  

                       -  

              138,858

            (119,493)

              (19,365)

                       -  

5.06.05

Equity on comprehensive income of subsidiaries

                   -  

                       -  

                       -  

                19,365

              (19,365)

                       -  

5.06.08

Changes in statutory reserve for the period

                   -  

                       -  

              138,858

            (138,858)

                       -  

                       -  

5.07

Ending Balances

       5,741,284

              468,302

           1,418,367

              644,988

            (238,407)

           8,034,534

               

 

 

8 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of Value Added

 

(In thousands of Brazilian reais – R$)

 

 

 

 

 

 

 Code

 Description

 Current Year

01/01/2017 to
09/30/2017

 Prior Year

01/01/2016 to
09/30/2016

7.01

Revenues

                     152

                  2,459

7.01.01

Sales of goods and services

                         1

                  1,888

7.01.02

Revenues related to construction of own assets

                     151

                     571

7.02

Inputs purchased from third parties

                (7,315)

                (9,034)

7.02.02

Materials, energy, third-party services and others

                (5,827)

                (7,269)

7.02.04

Others

                (1,488)

                (1,765)

7.03

Gross value added

                (7,163)

                (6,575)

7.04

Retentions

                   (163)

                   (148)

7.04.01

Depreciation, amortization and depletion

                   (163)

                   (148)

7.05

Net value added generated

                (7,326)

                (6,723)

7.06

Value Added received in transfer

              803,932

              844,015

7.06.01

Interest in subsidiaries, associates and joint ventures

              785,487

              778,043

7.06.02

Finance income

                18,445

                65,972

7.07

Value Added to be distributed

              796,606

              837,292

7.08

Distribution of value added

              796,606

              837,292

7.08.01

Personnel

                20,442

                24,985

7.08.01.01

Salaries and wages

                13,329

                14,583

7.08.01.02

Benefits

                  5,975

                  9,338

7.08.01.03

FGTS (Severance Pay Fund)

                  1,138

                  1,064

7.08.02

Taxes, fees and contributions

                (9,895)

                12,668

7.08.02.01

Federal

                (9,918)

                12,636

7.08.02.02

State

                       23

                       32

7.08.03

Lenders and lessors

                64,886

                36,914

7.08.03.01

Interest

                64,662

                36,877

7.08.03.02

Rentals

                     224

                       37

7.08.04

Interest on own capital

              721,173

              762,725

7.08.04.03

Retained earnings / Loss for the period

              721,173

              762,725

       

 

 

9 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Consolidated Financial Statements

Statement of Financial Position – Assets

 

(In thousands of Brazilian reais – R$)

 

 

 

 

 

 

Code

Description

  Current Year

09/30/2017

 Prior Year

12/31/2016

 1

Total assets

         41,793,477

         42,170,992

 1.01

Current assets

         10,297,796

         11,379,187

 1.01.01

Cash and cash equivalents

           3,832,155

           6,164,997

 1.01.03

Trade receivables

           4,644,672

           3,765,892

 1.01.03.01

Consumers

           4,644,672

           3,765,892

 1.01.06

Taxes recoverable

              372,859

              403,848

 1.01.06.01

Current taxes recoverable

              372,859

              403,848

 1.01.06.01.01

Income tax and social contribution to be offset

              145,802

              143,943

 1.01.06.01.02

Other taxes recoverable

              227,057

              259,905

 1.01.08

Other current assets

           1,448,110

           1,044,450

 1.01.08.03

Others

           1,448,110

           1,044,450

 1.01.08.03.01

Other receivables

              935,255

              797,181

 1.01.08.03.02

Derivatives

              389,732

              163,241

 1.01.08.03.04

Dividends and interest on own capital

              106,237

                73,328

 1.01.08.03.05

Concession financial asset

                11,437

                10,700

 1.01.08.03.06

Sector financial asset

                  5,449

                        -  

 1.02

Noncurrent assets

         31,495,681

         30,791,805

 1.02.01

Long-term assets

         10,125,011

           8,809,442

 1.02.01.03

Trade receivables

              242,650

              203,185

 1.02.01.03.01

Consumers

              242,650

              203,185

 1.02.01.06

Deferred taxes

              979,110

              922,858

 1.02.01.06.02

Deferred tax assets

              979,110

              922,858

 1.02.01.08

Receivables from related parties

                  9,158

                47,632

 1.02.01.08.04

Receivables from other related parties

                  9,158

                47,632

 1.02.01.09

Other noncurrent assets

           8,894,093

           7,635,767

 1.02.01.09.03

Derivatives

              261,942

              641,357

 1.02.01.09.04

Escrow deposits

              837,526

              550,072

 1.02.01.09.05

Income tax and social contribution to be offset

                70,096

                65,535

 1.02.01.09.06

Other taxes recoverable

              162,283

              132,751

 1.02.01.09.07

Concession financial asset

           6,287,650

           5,363,144

 1.02.01.09.09

Investments at cost

              116,654

              116,654

 1.02.01.09.10

Other receivables

              809,785

              766,254

 1.02.01.09.11

Sector financial asset

              348,157

                        -  

 1.02.02

Investments

           1,042,445

           1,493,752

 1.02.02.01

Equity interests

           1,042,445

           1,493,752

 1.02.02.01.01

Equity interests on associates

           1,042,445

           1,493,752

 1.02.03

Property, plant and equipment

           9,841,148

           9,712,998

 1.02.03.01

Property, plant and equipment - operational

           9,645,465

           9,462,696

 1.02.03.03

Property, plant and equipment - in progress

              195,683

              250,302

 1.02.04

Intangible assets

         10,487,077

         10,775,613

 1.02.04.01

Intangible assets

         10,487,077

         10,775,613

       

 

10 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Consolidated Financial Statements

Statement of Financial Position – Liabilities and Equity

 

(In thousands of Brazilian reais – R$)

 

 

 

 

 

 

Code

Description

  Current Year

09/30/2017

 Prior Year

12/31/2016

 2

 Total liabilities

         41,793,477

         42,170,992

 2.01

 Current liabilities

         12,307,461

           9,018,493

 2.01.01

 Payroll and related charges

              171,492

              131,707

 2.01.01.02

 Payroll

              171,492

              131,707

 2.01.01.02.01

 Estimated payroll

              171,492

              131,707

 2.01.02

 Trade payables

           4,148,059

           2,728,131

 2.01.02.01

 Domestic suppliers

           4,148,059

           2,728,131

 2.01.03

 Taxes payable

              698,712

              681,544

 2.01.03.01

 Federal taxes payable

              294,761

              260,607

 2.01.03.01.01

 Income tax and social contribution

              104,464

                57,227

 2.01.03.01.02

 PIS (tax on revenue)

                27,259

                28,759

 2.01.03.01.03

 COFINS (tax on revenue)

              120,026

              126,939

 2.01.03.01.04

 Other federal taxes

                43,012

                47,682

 2.01.03.02

 State taxes payable

              399,421

              416,102

 2.01.03.02.01

 ICMS (state VAT)

              399,408

              416,096

 2.01.03.02.02

 State taxes - other

                       13

                         6

 2.01.03.03

 Municipal taxes payable

                  4,530

                  4,835

 2.01.03.03.01

 Other municipal taxes

                  4,530

                  4,835

 2.01.04

 Borrowings

           5,377,869

           3,422,923

 2.01.04.01

 Borrowings

           3,767,294

           1,875,648

 2.01.04.01.01

 In local currency

           1,603,245

           1,260,527

 2.01.04.01.02

 In foreign currency

           2,164,049

              615,121

 2.01.04.02

 Debentures

           1,610,575

           1,547,275

 2.01.04.02.01

 Debentures

           1,610,575

           1,547,275

 2.01.05

 Other liabilities

           1,911,329

           2,054,188

 2.01.05.02

 Others

           1,911,329

           2,054,188

 2.01.05.02.01

 Dividends and interest on own capital payable

                  5,418

              232,851

 2.01.05.02.04

 Derivatives

                  4,464

                  6,055

 2.01.05.02.05

 Sector financial liability

              384,115

              597,515

 2.01.05.02.06

 Use of public asset

                11,936

                10,857

 2.01.05.02.07

 Other payables

              973,026

              807,623

 2.01.05.02.08

 Regulatory charges

              452,279

              366,078

 2.01.05.02.09

 Private pension plan

                80,091

                33,209

 2.02

 Noncurrent liabilities

         18,391,056

         22,779,831

 2.02.01

 Borrowings

         14,443,078

         18,621,065

 2.02.01.01

 Borrowings

           8,006,258

         11,168,393

 2.02.01.01.01

 In local currency

           5,349,681

           6,293,533

 2.02.01.01.02

 In foreign currency

           2,656,577

           4,874,860

 2.02.01.02

 Debentures

           6,436,820

           7,452,672

 2.02.01.02.01

 Debentures

           6,436,820

           7,452,672

 2.02.02

 Other liabilities

           1,731,960

           2,001,356

 2.02.02.02

 Others

           1,731,960

           2,001,356

 2.02.02.02.03

 Trade payables

              126,394

              129,781

 2.02.02.02.04

 Private pension plan

           1,014,736

           1,019,233

 2.02.02.02.05

 Derivatives

              117,130

              112,207

 2.02.02.02.06

 Sector financial liability

                76,902

              317,406

 2.02.02.02.07

 Use of public asset

                82,153

                86,624

 2.02.02.02.08

 Other payables

              293,538

              309,292

 2.02.02.02.09

 Federal taxes payable

                21,107

                26,813

 2.02.03

 Deferred taxes

           1,267,570

           1,324,134

 2.02.03.01

 Deferred income tax and social contribution

           1,267,570

           1,324,134

 2.02.04

 Provisions

              948,448

              833,276

 2.02.04.01

 Provision on tax, social security, labor and civil risks

              948,448

              833,276

 2.02.04.01.01

 Provision on tax risks

              336,726

              288,389

 2.02.04.01.02

 Provision on social security and labor risks

              208,128

              222,001

 2.02.04.01.04

 Provision on civil risks

              301,123

              236,915

 2.02.04.01.05

 Others

              102,471

                85,971

 2.03

 Consolidated equity

         11,094,960

         10,372,668

 2.03.01

 Issued capital

           5,741,284

           5,741,284

 2.03.02

 Capital reserves

              468,014

              468,015

 2.03.04

 Earnings reserves

           2,045,584

           1,995,355

 2.03.04.01

 Legal reserve

              739,102

              739,102

 2.03.04.02

 Statutory reserve

           1,306,482

           1,248,433

 2.03.04.08

 Additional dividend proposed

                        -  

                  7,820

 2.03.05

 Retained earnings

              684,579

                        -  

 2.03.08

 Other comprehensive income

            (253,927)

            (234,634)

 2.03.09

 Noncontrolling interests

           2,409,426

           2,402,648

       

 

 

11 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Consolidated Financial Statements

Statement of income

 

(In thousands of Brazilian reais – R$)

 

 

 

 

Code

Description

 Current Year -

Third Quarter

 YTD Current

Year

 Prior Year -

Third Quarter

 YTD Prior

Year

 

 

 07/01/2017 to

09/30/2017

 01/01/2017 to

09/30/2017

 07/01/2016 to

09/30/2016

 01/01/2016 to

09/30/2016

 3.01

Revenue from sale of energy and/or services

            7,783,946

          19,285,274

            4,782,815

          13,600,307

 3.02

Cost of goods sold and/or services rendered

           (6,544,266)

         (15,741,409)

           (3,657,687)

         (10,403,455)

 3.02.01

Cost of electric energy

           (5,246,084)

         (12,205,255)

           (2,770,513)

           (7,963,080)

 3.02.02

Cost of operation

              (698,427)

           (2,055,025)

              (562,184)

           (1,622,816)

 3.02.03

Cost of services rendered to third parties

              (599,755)

           (1,481,129)

              (324,990)

              (817,559)

 3.03

Gross profit

            1,239,680

            3,543,865

            1,125,128

            3,196,852

 3.04

Operating income (expenses)

              (349,875)

           (1,188,988)

              (321,483)

           (1,012,431)

 3.04.01

Selling expenses

              (134,823)

              (426,479)

              (123,680)

              (387,775)

 3.04.02

General and administrative expenses

              (199,380)

              (716,170)

              (192,069)

              (607,198)

 3.04.05

Other operating expenses

              (105,703)

              (299,048)

                (74,560)

              (218,402)

 3.04.06

Equity interests in subsidiaries, associates and joint ventures

                 90,031

               252,709

                 68,826

               200,944

 3.05

Profit before finance income (expenses) and taxes

               889,805

            2,354,877

               803,645

            2,184,421

 3.06

Finance income (expenses)

              (343,400)

           (1,197,706)

              (416,893)

              (999,877)

 3.06.01

Finance income

               205,553

               708,896

               286,310

               932,154

 3.06.02

Finance expenses

              (548,953)

           (1,906,602)

              (703,203)

           (1,932,031)

 3.07

Profit (loss) before taxes on income

               546,405

            1,157,171

               386,752

            1,184,544

 3.08

Income tax and social contribution

              (156,208)

              (411,681)

              (117,480)

              (442,690)

 3.08.01

Current

              (184,262)

              (419,848)

              (219,493)

              (771,290)

 3.08.02

Deferred

                 28,054

                   8,167

               102,013

               328,600

 3.09

Profit (loss) from continuing operations

               390,197

               745,490

               269,272

               741,854

 3.11

Consolidated profit (loss) for the period

               390,197

               745,490

               269,272

               741,854

 3.11.01

Attributable to owners of the Company

               331,813

               721,173

               231,565

               762,724

 3.11.02

Attributable to noncontrolling interests

                 58,384

                 24,317

                 37,707

                (20,870)

           

 

 

12 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Consolidated Financial Statements

Statement of Comprehensive Income

 

(In thousands of Brazilian reais – R$)

 

 

 

 

 

 

 

 

 

 

Code

Description

 Current Year -

Third Quarter

 YTD Current Year

 Prior Year -

Third Quarter

 YTD Prior Year

 

 

 07/01/2017to

09/30/2017

 01/01/2017 to

09/30/2017

 07/01/2016 to

09/30/2016

 01/01/2016 to

09/30/2016

 4.01

Consolidated profit for the period

                  390,197

                 745,490

                 269,272

                  741,854

 4.02

Other comprehensive income

                            -  

                           -  

                           -  

                (404,363)

 4.02.01

Actuarial gains (losses), net of tax effects

                            -  

                           -  

                           -  

                (404,363)

 4.03

Consolidated comprehensive income for the period

                  390,197

                 745,490

                 269,272

                  337,491

 4.03.01

Attributtable to owners of the Company

                  331,813

                 721,173

                 231,565

                  358,362

 4.03.02

Attributable to noncontrolling interests

                    58,384

                   24,317

                   37,707

                  (20,871)

           

 

13 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Consolidated Financial Statements

Statement of Cash Flows – Indirect Method

 

(In thousands of Brazilian reais – R$)

 

 

 

 

 

 

Code

Description

 YTD Current Year

01/01/2017 to

09/30/2017

 YTD Prior Year

01/01/2016 to

09/30/2016

 6.01

Cash flows from operating activities

                2,100,706

               2,757,232

 6.01.01

Cash generated from operations

                4,039,604

               3,751,617

 6.01.01.01

Profit for the year, including income tax and social contribution

                1,157,171

               1,184,545

 6.01.01.02

Depreciation and amortization 

                1,142,302

                  936,569

 6.01.01.03

Provision for tax, civil and labor risks

                   115,102

                  180,905

 6.01.01.04

Interest on debts, inflation adjustment and exchange rate changes

                1,570,060

               1,446,963

 6.01.01.05

Pension plan expense (income)

                     85,426

                    51,483

 6.01.01.06

Loss on disposal of noncurrent assets

                     99,689

                    32,272

 6.01.01.07

Deferred taxes (PIS and COFINS)

                       1,075

                    (8,933)

 6.01.01.08

Others

                       2,603

                    (1,269)

 6.01.01.09

Allowance for doubtful accounts

                   118,885

                  130,026

 6.01.01.10

Equity interests in associates and joint ventures

                  (252,709)

                (200,944)

 6.01.02

Changes in assets and liabilities

               (1,938,898)

                (994,385)

 6.01.02.01

Consumers, concessionaires and licensees

               (1,036,050)

                (507,596)

 6.01.02.02

Dividend and interest on shareholders’ equity received

                     16,698

                  113,288

 6.01.02.04

Escrow deposits

                  (247,544)

                  755,342

 6.01.02.05

Sector financial asset

                  (260,784)

               2,174,407

 6.01.02.06

Dividend and interest on shareholders’ equity received

                   579,508

                    86,282

 6.01.02.07

Receivables - Eletrobrás

                    (17,069)

                  101,456

 6.01.02.08

Concession financial assets (transmission companies)

                    (54,625)

                  (38,005)

 6.01.02.09

Other operating assets

                    (14,356)

                  125,267

 6.01.02.10

Trade payables

                1,420,137

             (1,217,552)

 6.01.02.11

Regulatory charges

                     86,204

                (567,176)

 6.01.02.12

Tax, civil and labor risks paid

                  (160,845)

                (175,232)

 6.01.02.13

Payables - CDE

                       5,847

                  (37,509)

 6.01.02.14

Income tax and social contribution paid

                  (366,989)

                (687,539)

 6.01.02.15

Sector financial liability

                  (627,509)

                  247,857

 6.01.02.16

Interest paid on debts and debentures

               (1,361,477)

             (1,229,949)

 6.01.02.17

Other taxes and social contributions

                    (50,764)

                  (65,534)

 6.01.02.18

Other liabilities with private pension plan

                    (43,039)

                  (64,990)

 6.01.02.19

Other operating liabilities

                   193,759

                    (7,202)

 6.02

Net cash in investing activities

               (1,817,553)

             (1,628,855)

 6.02.01

Purchases of property, plant and equipment

                  (610,054)

                (845,229)

 6.02.02

Securities, pledges and restricted deposits

                    (71,162)

                (114,050)

 6.02.04

Purchases of intangible assets

               (1,266,817)

                (714,457)

 6.02.05

Sale of noncurrent assets

                            94

                           -  

 6.02.06

Capital reduction on subsidiaries

                     91,599

                           -  

 6.02.08

Loans to subsidiaries and associates

                     38,787

                    44,881

 6.03

Net cash in financing activities

               (2,615,995)

             (1,466,514)

 6.03.01

Borrowings and debentures raised

                1,545,717

               2,290,437

 6.03.02

Repayment of principal of borrowings and debentures

               (3,766,482)

             (3,766,909)

 6.03.03

Dividends and interest on capital paid

                  (249,703)

                (228,045)

 6.03.04

Capital increase of noncontrolling shareholder

                            13

                         247

 6.03.05

Business combination payment

                      (2,507)

                  (18,752)

 6.03.06

Repayment of derivative instruments

                  (143,033)

                  256,508

 6.05

Increase (decrease) in cash and cash equivalents

               (2,332,842)

                (338,137)

 6.05.01

Cash and cash equivalents at the beginning of the period

                6,164,997

               5,682,802

 6.05.02

Cash and cash equivalents at the end of the period

                3,832,155

               5,344,665

       

 

 

14 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Consolidated Financial Statements

Statement of Changes in Equity – from January 1, 2017 to September 30, 2017

 

(In thousands of Brazilian reais – R$)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Code

 Description

 Paid-in

capital

 Capital reserves,

stock options and

treasury stock

 Earnings

reserves

 Retained

earnings/

accumulated

losses

 Other

comprehensive

income

 Equity

 Noncontrolling interests

 Consolidated

equity

 5.01

 Opening balances

       5,741,284

                      468,014

       1,995,355

                    -  

         (234,632)

           7,970,021

             2,402,648

           10,372,669

 5.03

 Adjusted opening balances

       5,741,284

                      468,014

       1,995,355

                    -  

         (234,632)

           7,970,021

             2,402,648

           10,372,669

 5.04

 Capital transactions with shareholders

                    -  

                                -  

             (7,820)

              2,160

                    -  

                 (5,660)

                (17,475)

                (23,135)

 5.04.01

 Capital increase

                    -  

                                -  

                    -  

                    -  

                    -  

                        -  

                         13

                         13

 5.04.06

 Dividend

                    -  

                                -  

             (7,820)

                    -  

                    -  

                 (7,820)

                (10,262)

                (18,082)

 5.04.12

 Interim dividend

                    -  

                                -  

                    -  

                    -  

                    -  

                        -  

                  (7,226)

                  (7,226)

 5.04.13

 Prescribed dividends

                    -  

                                -  

                    -  

              2,160

                    -  

                  2,160

                         -  

                    2,160

 5.05

 Total comprehensive income

                    -  

                                -  

                    -  

          721,173

                    -  

              721,173

                  24,317

                745,490

 5.05.01

 Profit for the period

                    -  

                                -  

                    -  

          721,173

                    -  

              721,173

                  24,317

                745,490

 5.06

 Internal changes in equity

                    -  

                                -  

            58,049

           (38,755)

           (19,294)

                        -  

                       (64)

                       (64)

 5.06.04

 Others changes in noncontrolling shareholders

                    -  

                                -  

                    -  

                    -  

                    -  

                        -  

                       (64)

                       (64)

 5.06.06

 Transfers to statutory reserve in the period

                    -  

                                -  

            58,049

           (58,049)

                    -  

                        -  

                         -  

                         -  

 5.06.10

 Realization of deemed cost of property, plant and equipment

                    -  

                                -  

                    -  

            29,234

           (29,234)

                        -  

                         -  

                         -  

 5.06.11

 Tax effects on realization of deemed cost

                    -  

                                -  

                    -  

             (9,940)

              9,940

                        -  

                         -  

                         -  

 5.07

 Ending balances

       5,741,284

                      468,014

       2,045,584

          684,578

         (253,926)

           8,685,534

             2,409,426

           11,094,960

                   

 

15 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Consolidated Financial Statements

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

 

(In thousands of Brazilian reais – R$)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Code

Description

Paid-in capital

Capital

reserves,

stock options and

treasury stock

Earnings
reserves

Retained
earnings
/accumulated
losses

Other
comprehensive
income

Equity

Noncontrolling
interests

Consolidated
equity

5.01

Opening balances

        5,348,312

                      468,082

          1,672,481

                    -  

                185,320

        7,674,195

                2,455,943

              10,130,138

5.03

Adjusted opening balances

        5,348,312

                      468,082

          1,672,481

                    -  

                185,320

        7,674,195

                2,455,943

              10,130,138

5.04

Capital transactions within shareholders

           392,972

                             220

           (392,972)

              1,756

                         -  

               1,976

                   (15,883)

                   (13,907)

5.04.01

Capital increase

           392,972

                                -  

           (392,972)

                    -  

                         -  

                     -  

                             -  

                            -  

5.04.09

Dividend proposal approved

                    -  

                                -  

                      -  

                    -  

                         -  

                     -  

                   (16,129)

                   (16,129)

5.04.10

Capital increase in subsidiaries with no change in control

                    -  

                             220

                      -  

                    -  

                         -  

                  220

                          246

                          466

5.04.13

Prescribed dividend

                    -  

                                -  

                      -  

              1,756

                         -  

               1,756

                             -  

                       1,756

5.05

Total comprehensive income

                    -  

                                -  

                      -  

          762,725

              (404,363)

           358,362

                   (20,871)

                   337,491

5.05.01

Net income for the period

                    -  

                                -  

                      -  

          762,725

                         -  

           762,725

                   (20,871)

                   741,854

5.05.02

Other comprehensive income

                    -  

                                -  

                      -  

                    -  

              (404,363)

         (404,363)

                             -  

                 (404,363)

5.06

Internal changes of shareholders equity

                    -  

                                -  

             138,858

         (119,493)

                (19,365)

                     -  

                          (53)

                          (53)

5.06.07

Other changes in noncontrolling shareholders

                    -  

                                -  

                      -  

                    -  

                         -  

                     -  

                          (53)

                          (53)

5.06.08

Changes in statutory reserve in the period

                    -  

                                -  

             138,858

         (138,858)

                         -  

                     -  

                             -  

                            -  

5.06.10

Realization of deemed cost of property, plant and equipment

                    -  

                                -  

                      -  

            29,341

                (29,341)

                     -  

                             -  

                            -  

5.06.11

Tax effects on realization of deemed cost

                    -  

                                -  

                      -  

             (9,976)

                    9,976

                     -  

                             -  

                            -  

5.07

Ending balances

        5,741,284

                      468,302

          1,418,367

          644,988

              (238,408)

        8,034,533

                2,419,136

              10,453,669

                   

 

 

16 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Consolidated Interim Financial Statements

Statement of Value Added

 

(In thousands of Brazilian reais – R$)

 

 

 

 

 

 

 Code

 Description

 Current Year

01/01/2017 to

09/30/2017

 Prior Year

01/01/2016 to

09/30/2016

7.01

Revenues

              29,513,197

              22,942,989

7.01.01

Sales of goods and services

              27,479,387

              21,372,085

7.01.02

Other revenues

                1,480,698

                   816,950

7.01.02.01

Revenue from construction of distribution infrastructure

                1,480,698

                   816,950

7.01.03

Revenues related to construction of own assets

                   671,997

                   883,981

7.01.04

Allowance for doubtful accounts

                  (118,885)

                  (130,027)

7.02

Inputs purchased from third parties

             (16,793,150)

             (11,426,738)

7.02.01

Cost of sales and services

             (13,566,945)

               (8,846,195)

7.02.02

Materials, energy, third-party services and others

               (2,700,772)

               (2,189,095)

7.02.04

Others

                  (525,433)

                  (391,448)

7.03

Gross value added

              12,720,047

              11,516,251

7.04

Retentions

               (1,145,999)

                  (938,522)

7.04.01

Depreciation, amortization and depletion

                  (930,473)

                  (752,249)

7.04.02

Others

                  (215,526)

                  (186,273)

7.04.02.01

Amortization of concession intangible asset

                  (215,526)

                  (186,273)

7.05

Net value added generated

              11,574,048

              10,577,729

7.06

Value Added received in transfer

                1,010,563

                1,212,124

7.06.01

Interest in subsidiaries, associates and joint ventures

                   252,709

                   200,945

7.06.02

Finance income

                   757,854

                1,011,179

7.07

Value Added to be distributed

              12,584,611

              11,789,853

7.08

Distribution of value added

              12,584,611

              11,789,853

7.08.01

Personnel

                1,016,534

                   748,895

7.08.01.01

Salaries and wages

                   603,673

                   463,889

7.08.01.02

Benefits

                   361,428

                   246,535

7.08.01.03

FGTS (Severance Pay Fund)

                     51,433

                     38,471

7.08.02

Taxes, fees and contributions

                8,817,547

                8,250,029

7.08.02.01

Federal

                4,770,588

                4,614,222

7.08.02.02

State

                4,030,145

                3,622,743

7.08.02.03

Municipal

                     16,814

                     13,064

7.08.03

Lenders and lessors

                2,005,040

                2,049,074

7.08.03.01

Interest

                1,951,630

                2,004,205

7.08.03.02

Rentals

                     53,410

                     44,869

7.08.04

Interest on own capital

                   745,490

                   741,855

7.08.04.03

Retained earnings / Loss for the period

                   745,490

                   741,855

         

 

 

17 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

COMMENTS ON THE INDIVIDUAL PERFORMANCE

 

The comments on performance are expressed in thousands of Reais, unless otherwise stated.

 

Profit or loss analysis

 

 

CPFL Energia (Parent company)

 

This quarter, the decrease in profit was R$ 100,248 when compared with the same period of the prior year (R$ 331,813 in 2017 and R$ 231,565 in 2016) mainly due to the decrease in equity interests in subsidiaries, associates and joint ventures.

 

18 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 COMMENTS ON CONSOLIDATED PERFORMANCE

 

 

     

Consolidated

     

3rd quarter

 

Nine months

     

2017

 

2016

 

%

 

2017

 

2016

 

%

 

OPERATING REVENUES

 

   11,073,189

 

     7,376,992

 

50.1%

 

     28,960,086

 

   22,189,035

 

30.5%

 

Electricity sales to final consumers

 

     6,110,261

 

     5,474,412

 

11.6%

 

     18,807,612

 

   17,782,476

 

5.8%

 

Electricity sales to wholesaler´s

 

     2,117,043

 

     1,012,962

 

109.0%

 

       4,521,967

 

     2,401,179

 

88.3%

 

Revenue from construction of concession infrastructure

 

        602,337

 

        325,100

 

85.3%

 

       1,480,699

 

        816,950

 

81.2%

 

Other operating revenues

 

        998,578

 

     1,122,525

 

-11.0%

 

       3,100,524

 

     2,940,670

 

5.4%

 

Sector financial assets and liabilities

 

     1,244,970

 

       (558,007)

 

323.1%

 

       1,049,284

 

    (1,752,239)

 

-159.9%

 

Deductions from operating revenues

 

    (3,289,243)

 

    (2,594,177)

 

26.8%

 

     (9,674,812)

 

    (8,588,728)

 

12.6%

 

NET OPERATING REVENUE

 

     7,783,946

 

     4,782,815

 

62.7%

 

     19,285,274

 

   13,600,307

 

41.8%

 

COST OF ELECTRIC ENERGY SERVICES

 

    (5,246,084)

 

    (2,770,513)

 

89.4%

 

   (12,205,255)

 

    (7,963,080)

 

53.3%

 

Electricity purchased for resale

 

    (4,772,758)

 

    (2,465,707)

 

93.6%

 

   (11,311,684)

 

    (6,945,260)

 

62.9%

 

Electricity network usage charges

 

       (473,326)

 

       (304,806)

 

55.3%

 

        (893,571)

 

    (1,017,820)

 

-12.2%

 

OPERATING COST/EXPENSE

 

    (1,738,090)

 

    (1,277,483)

 

36.1%

 

     (4,977,851)

 

    (3,653,750)

 

36.2%

 

Personnel

 

       (329,180)

 

       (261,189)

 

26.0%

 

        (998,342)

 

       (773,356)

 

29.1%

 

Employee pension plans

 

         (28,483)

 

         (23,658)

 

20.4%

 

          (85,426)

 

         (51,483)

 

65.9%

 

Materials

 

         (69,451)

 

         (64,765)

 

7.2%

 

        (182,008)

 

       (143,821)

 

26.6%

 

Outside Services

 

       (173,821)

 

       (156,531)

 

11.0%

 

        (548,210)

 

       (463,320)

 

18.3%

 

Depreciation and Amortization

 

       (313,329)

 

       (254,202)

 

23.3%

 

        (926,776)

 

       (750,297)

 

23.5%

 

Merged Goodwill Amortization

 

         (71,294)

 

         (62,365)

 

14.3%

 

        (215,526)

 

       (186,272)

 

15.7%

 

Costs related to infrastructure construction

 

       (598,698)

 

       (324,154)

 

84.7%

 

     (1,478,990)

 

       (815,681)

 

81.3%

 

Other

 

       (153,834)

 

       (130,619)

 

17.8%

 

        (542,572)

 

       (469,521)

 

15.6%

 

INCOME FROM ELECTRIC ENERGY SERVICE

 

        799,773

 

        734,819

 

8.8%

 

       2,102,168

 

     1,983,477

 

6.0%

 

FINANCIAL INCOME (EXPENSE)

 

       (343,400)

 

       (416,893)

 

-17.6%

 

     (1,197,706)

 

       (999,877)

 

19.8%

 

 Income

 

        205,553

 

        286,310

 

-28.2%

 

          708,896

 

        932,154

 

-24.0%

 

 Expense

 

       (548,953)

 

       (703,203)

 

-21.9%

 

     (1,906,602)

 

    (1,932,030)

 

-1.3%

 

  Equity in subsidiaries

 

          90,031

 

          68,826

 

30.8%

 

          252,709

 

        200,944

 

25.8%

 

INCOME BEFORE TAXES

 

        546,404

 

        386,752

 

41.3%

 

       1,157,171

 

     1,184,545

 

-2.3%

 

Social Contribution

 

         (44,521)

 

         (35,448)

 

25.6%

 

        (113,385)

 

       (125,116)

 

-9.4%

 

Income Tax

 

       (111,686)

 

         (82,031)

 

36.1%

 

        (298,296)

 

       (317,575)

 

-6.1%

 

NET INCOME

 

        390,197

 

        269,272

 

44.9%

 

          745,490

 

        741,854

 

0.5%

                           
 

Net income attributable to the shareholders of the company

 

        331,813

 

        231,565

 

43.3%

 

          721,173

 

        762,725

 

-5.4%

 

Net income attributable to the non controlling interests

 

          58,385

 

          37,707

 

54.8%

 

            24,319

 

         (20,871)

 

-216.5%

                           
 

EBITDA

 

     1,274,571

 

     1,120,357

 

13.8%

 

       3,497,613

 

     3,121,425

 

12.1%

                           
                           
                           
 

Net Income for the Period and  Adjusted EBITDA  Reconciliation

 

 

 

 

 

 

 

 

 

 
 

   NET INCOME FOR THE PERIOD

 

        390,197

 

        269,272

     

          745,490

 

        741,854

 

 
 

  Depreciation and Amortization

 

        384,622

 

        316,567

     

       1,142,302

 

        936,569

 

 
 

 

 

               145

 

               145

     

                 435

 

               435

 

 
 

  Financial Income (Expense)

 

        343,400

 

        416,893

     

       1,197,706

 

        999,877

 

 
 

  Social Contribution

 

          44,521

 

          35,448

     

          113,385

 

        125,116

 

 
 

  Income Tax

 

        111,686

 

          82,031

     

          298,296

 

        317,575

 

 
 

Adjusted EBITDA

 

     1,274,571

 

     1,120,357

     

       3,497,613

 

     3,121,425

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(*) For purposes of presentation of the comments on performance, the reclassification of revenue from network usage charge - TUSD to captive consumer was not made.

 

19 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

Gross operating revenue

Gross operating revenue for the 3rd quarter of 2017 was R$ 11,073,189, an increase of 50.1% (R$ 3,696,197) compared with the same period of the prior year.

The main factors of this variation were:

·       Increase of 11.6% (R$ 635,849) in the electricity sales to final consumer, justified by the beginning of consolidation of RGE Sul (R$ 864,251) and increase of 4.9% in the volume of energy sold (R$ 266,425), offset by the decrease in average tariffs of 8.6% (R$ 494,826), mainly from the decrease in revenue due to the consolidated negative effects of the Annual Tariff Adjustment (RTA);

·       Increase of 109% (R$ 1,104,081) in the electricity sales to wholesalers, mainly due to:

o   Increase of R$ 849,091 in the sales of energy in the spot market in CCEE (Electric Energy Trading Chamber), basically due to an increase in the average price (R$ 762,177) resulting from an increase in the price of differences settlement (“PLD”) in the quarter, and the beginning of consolidation of RGE Sul (R$ 147,583), partially offset by a decrease in the volume sold of 31.5% (R$ 60,609);

o   Increase of 36.9% (R$ 254,989) in other concessionaires and licensees, basically due to the increase in the average price of 64.7% (R$ 365,972), partially offset by a decrease in the amount sold of 17.2% (R$ 117,298);

·         Decrease of 323.1% (R$ 1,802,977) in sector financial liability (an expense of R$ 558,007 in 2016 for an income of R$ 1,244,970 in 2017), due to: (i) realization of the recorded liability (R$ 338,572), mainly related to costs of electric energy and CDE, and the realization of assets in the third quarter of 2016 (R$ 339,476), and (ii) recording of asset (R$ 906,397), mainly related to costs of electric energy, associated to the recognition of liabilities in the third quarter of 2016 (R$ 218,532).

·         Increase of 11% (R$ 123,947) in other operating revenues, basically due to the decrease in (i) CDE contribution – injunctions and others (R$ 156,992), (ii) TUSD of free consumers (R$ 62,882) and (iii) adjustment of the concession financial asset (R$ 38,244) due to the lower IPCA in the third quarter of 2017, partially offset by the beginning of consolidation of RGE Sul (R$ 129,955).

Ø  Volume of energy sold by distributors

In the 3rd quarter of 2017, the amount of energy billed to captive consumers in the period, including other licensees and excluding the acquisition of RGE Sul, presented a decrease of 3.0% when compared with the same quarter of the prior year.

The comments below regarding the performance by consumption class do not consider the acquisition of RGE Sul:

·         The consumption of the residential class represents 42.3% of the total market supplied by distributors. Despite the positive performance of income mass, which, in the accumulated of 12 months (until July 2017) recorded an increase of 2.7%.

·         The commercial class, which represents 18.8% of the total market supplied by distributors, presented a drop of 9.6% in the 3rd quarter of 2017 in relation to the same period of the prior year. The result reflects the client’s migration to the free market.

·         The industrial class, which represents 15.1% of the total market supplied by distributors, reported a fall of 19.6% in the 3rd quarter of 2017 in relation to the same period of the prior year. Such performance is a direct consequence of the client’s migration to the free market.

·         The other consumption classes (rural, public administration, public utilities and licensees) participate with 23.8% of the total market supplied by distributors. Such classes presented a growth of 3.3% in the 3rd quarter of 2017 in relation to the same period of the prior year. This performance reflects the growth in consumption of classes: (i) Rural, due to a rainfall period below the average level and lower than the 3rd quarter of 2016; and (ii) Public Services.

 

·      Regarding the amount of energy sold and transported in the concession area, which impacts both the billed supply (captive market) and the TUSD collection (free market), there was an increase of 3.2% when compared with the same period of the prior year. The variation by class presented an increase in all consumption classes: 4.4% in the residential class, 1.0% in the commercial class, 2.8% in the industrial class and 4.4% in other classes.

 

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

 

 

Ø

Tariffs

 

In the 3rd quarter of 2017, energy supply tariffs decreased on average 8.6%. This occurred mainly due to the effects of the annual tariff adjustments and periodic tariff review, as follows:

 

 

       

2017

 

2016

Distributor

 

Month

 

RTA

 

Average effect perceived by consumers (a)

 

RTA / RTP

 

Average effect perceived by consumers (a)

CPFL Paulista

 

April

 

-0.80%

 

-10.50%

 

9.89%

 

7.55%

CPFL Piratininga

 

October (b)

 

7.69%

 

17.28%

 

-12.54%

 

-24.21%

RGE

 

June

 

3.57%

 

5.00%

 

-1.48%

 

-7.51%

RGE Sul

 

April

 

-0.20%

 

-6.43%

 

3.94%

 

-0.34%

CPFL Santa Cruz

 

March

 

-2.44%

 

-8.42%

 

22.51%

 

7.15%

CPFL Leste Paulista

 

March

 

-1.20%

 

-4.15%

 

21.04%

 

13.32%

CPFL Jaguari

 

March

 

-0.74%

 

-2.56%

 

29.46%

 

13.25%

CPFL Sul Paulista

 

March

 

-3.12%

 

-10.73%

 

24.35%

 

12.82%

CPFL Mococa

 

March

 

-0.95%

 

-3.28%

 

16.57%

 

9.02%

 

 

(a)

represents the average effect perceived by the consumer, as a result of the elimination from the tariff base of financial components that had been added in the prior tariff adjustment (information not reviewed by the independent auditors).

 

(b)

as described in the note 34.1 to the interim financial statements, there was a RTA for the subsidiary CPFL Piratininga in October 2017.

 

  

 

 

Deductions from operating revenue

 

Deductions from operating revenue in the 3rd quarter of 2017 were R$ 3,289,243, an increase of 26.8% (R$ 695,065) in relation to the same quarter of 2016, which mainly occurred due to:

 

·

Beginning of consolidation of RGE Sul (R$ 487,505);

·

Increase of 30.7% (R$ 191,955) on PIS and COFINS, mainly due to the increase in the basis of calculation of these taxes (energy supply).

·

Increase of 9.5% (R$ 81,526) in sector charges, basically due to an increase in the recognition of effects of tariff flags and others (R$ 176,066), partially offset by a decrease in Energy Development Account – CDE (R$ 114,493); and

·

Decrease of 6.1% (R$ 67,217) on ICMS, mainly due to the decrease in billed supply.

 

 

Cost of electric energy

 

The cost of electric energy this quarter amounted to R$ 5,246,084, an increase of 89.4% (R$ 2,275,571) in relation to the same period of the prior year, mainly justified by:

 

·

Increase of 93.6% (R$ 2,307,051) in electric energy purchased for resale, due to:

 

o

the beginning of consolidation of RGE Sul (R$ 607,366)

 

o

increase of 6.4% (R$ 157,587) in the amount of energy purchased;

 

o

increase of 58.8% (R$ 1,542,098) in average price due to the increase in the PLD.

 

·

Increase of 55.3% (R$ 168,520) in transmission and distribution system usage charges, basically due to (i) the beginning of consolidation of RGE Sul (R$ 86,305), and (ii) an increase in the Itaipu basic networ (R$ 205,034) and transmission charges (R$ 41,932), partially offset by a decrease in the system service charge – ESS and the reserve energy charge – EER (R$ 153,108).

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

Operating costs and expenses

 

Disregarding the cost of construction of the concession infrastructure, Operating Costs and Expenses this quarter amounted to R$ 1,139,392, an increase of 19.5% (R$ 186,063) compared with the same period of the prior year. This variation is mainly due to:

 

·

Personnel: increase of 26% (R$ 67,991), mainly due to (i) beginning of consolidation of RGE Sul (R$ 35,978) and (ii) effects of the collective labor agreement and increase in the number of employees; 

 

·

Private pension plan: increase of 20.4% (R$ 4,825) due to the recognition of the impact of the actuarial report for 2017;

 

·

Materials: increase of 7.2% (R$ 4,686), basically due to the beginning of consolidation of RGE Sul (R$ 7,637).

 

·

Third-party services: increase of 11% (R$ 17,290), mainly due to the beginning of consolidation of RGE Sul (R$ 30,921), partially offset by a decrease in (i) machinery and equipment maintenance (R$ 6,618) and (ii) services related to transmission (R$ 5,801);

 

·

Depreciation and amortization: increase of 23.3% (R$ 59,126), basically due to (i) beginning of consolidation of RGE Sul (R$ 26,929), (ii) increase of R$ 18,636 in the subsidiary CPFL Renováveis mainly due to the beginning of operations of renewable generation facilities in the period and (iii) increase in other distribution subsidiaries basically due to an increase in intangible assets of the distribution infrastructure (R$ 12,622);

 

·

Amortization of the concession intangible asset: increase of 14.3% (R$ 8,929) mainly due to the beginning of consolidation of RGE Sul (R$ 8,149);

 

·

Other expenses: increase of 17.8% (R$ 23,215), mainly due to (i) beginning of consolidation of RGE Sul (R$ 3,842), (ii) judicial and legal expenses and indemnities (R$ 14,382) and losses on disposal, retirement and other non-current assets (R$ 14,882), partially offset by a decrease in the allowance for doubtful accounts (R$ 8,901).

 

 

Finance income (expenses)

 

Net finance result this quarter presented an expense of R$ 343,400, compared with R$ 416,893 in the same period of 2016, a deacrease of 17.6% (R$ 73,493). Such variation is basically due to:

 

·

Decrease in finance income of 28.2% (R$ 80,758), basically due to the decrease in income from financial investments (R$ 95,747), partially offset by the beginning of consolidation of RGE Sul (R$ 15,831);

 

·

Decrease in finance expenses of 21.9% (R$ 154,250), mainly due to interest on debts and adjustment for inflation and exchange rate changes (R$ 222,943), partially offset by the beginning of consolidation of RGE Sul (R$ 52,945).

 

 

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

Share of profit (loss) of investees

The variation in share of profit (loss) of investees refers to the effect of the share of profit (loss) of joint ventures, as follows:

 

   

3rd Quarter

 

 

2017

 

2016

Epasa

 

                      20,924

 

                      10,942

Baesa

 

                        8,638

 

                           172

Enercan

 

                      26,328

 

                      31,025

Chapecoense

 

                      34,286

 

                      26,833

Amortization of value-added of assets

 

                         (145)

 

                         (145)

Total

 

                      90,031

 

                      68,826

 

 

 

 

 

 

·         EPASA: increase of R$ 9,982 mainly due to the increase in the volume of energy generated (456GWh in the 3rd quarter of 2017 and 120 GWh in the 3rd quarter of 2016).

 

·         Chapecoense: increase of R$ 7,453 mainly due to the reduction of finance expenses of R$ 7,373, related to an adjustment in the Use of Public Asset, caused by a decrease in the adjustment indexes.

 

 

Social Contribution and Income Tax

 

Expenses on taxes on profit in the 3rd quarter of 2017 were R$ 156,207, an increase of 33% (R$ 38,727) in relation to the one recorded in the same quarter of 2016, which reflects mainly the effects of variation in profit before taxes.

 

 

Profit for the Period and EBITDA

 

Due to the factors described above, the profit for this quarter was R$ 390,197, 44.9% (R$ 120,924) higher than the one of the same period of 2016.

 

EBITDA (Earnings before depreciation, amortization, finance income and expenses, and income tax and social contribution) for the 3rd quarter of 2017 was R$ 1,274,571, 13.8% (R$ 154,214) higher than the one determined in the same period of 2016.

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

COMMENT ON THE PERFORMANCE OF SUBSIDIARIES/ASSOCIATES

 

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

The subsidiary Companhia Paulista de Força e Luz - CPFL is a publicly-held corporation, and the comment on its performance is included in its Quarterly Financial Information - ITR as of September 30, 2017 filed with the Brazilian Securities and Exchange Commission (CVM).

 

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

The subsidiary CPFL Geração de Energia S/A is a publicly-held corporation, and the comments on its individual and consolidated performance is included in its Quarterly Financial Information – ITR as of September 30, 2017 filed with the Brazilian Securities and Exchange Commission (CVM).

 

Subsidiary/Associate: Companhia Piratininga de Força e Luz

The subsidiary Companhia Piratininga de Força e Luz is a publicly-held corporation, and the comments on its performance is included in its Quarterly Financial Information – ITR as of September 30, 2017 filed with the Brazilian Securities and Exchange Commission (CVM).

 

Subsidiary/Associate: Rio Grande Energia S.A.

The subsidiary Rio Grande Energia S.A. is a publicly-held corporation, and the comment on its performance is included in its Quarterly Financial Information – ITR as of September 30, 2017 filed with the Brazilian Securities and Exchange Commission (CVM).

 

Subsidiary/Associate: RGE Sul Distribuidora de Energia S.A.

The subsidiary RGE Sul Distribuidora de Energia S.A is a publicly-held corporation, and the comment on its performance is included in its Quarterly Financial Information – ITR as of September 30, 2017 filed with the Brazilian Securities and Exchange Commission (CVM).

 

24 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Subsidiary: CPFL Comercialização Brasil S.A.

 

   

Consolidated

   

3rd quarter

 

Nine months

   

2017

 

2016

 

%

 

2017

 

2016

 

%

OPERATING REVENUES

 

    1,109,355

 

       634,500

 

74.8%

 

     2,676,102

 

     1,672,000

 

60.1%

Electricity sales to final consumers

 

       497,008

 

       395,262

 

25.7%

 

     1,397,568

 

     1,049,632

 

33.1%

Electricity sales to wholesaler´s

 

       612,346

 

       216,733

 

182.5%

 

     1,278,528

 

        573,380

 

123.0%

Other operating revenues

 

                  2

 

         22,505

 

-100.0%

 

                   7

 

          48,988

 

-100.0%

Deductions from operating revenues

 

      (124,505)

 

        (74,596)

 

66.9%

 

       (309,401)

 

       (196,039)

 

57.8%

NET OPERATING REVENUE

 

       984,851

 

       559,904

 

75.9%

 

     2,366,701

 

     1,475,960

 

60.3%

COST OF ELECTRIC ENERGY SERVICES

 

      (932,845)

 

      (494,474)

 

88.7%

 

    (2,219,912)

 

    (1,343,612)

 

65.2%

Electricity purchased for resale

 

      (932,833)

 

      (494,474)

 

88.7%

 

    (2,219,862)

 

    (1,343,614)

 

65.2%

Electricity network usage charges

 

               (12)

 

                 -  

 

0.0%

 

                (50)

 

                   1

 

-3716.0%

OPERATING COST/EXPENSE

 

        (11,687)

 

        (11,721)

 

-0.3%

 

         (34,729)

 

         (33,178)

 

4.7%

Personnel

 

          (7,615)

 

          (6,240)

 

22.0%

 

         (22,902)

 

         (18,992)

 

20.6%

Materials

 

               (41)

 

               (56)

 

-25.9%

 

              (128)

 

              (181)

 

-29.4%

Outside Services

 

          (2,074)

 

          (1,969)

 

5.3%

 

           (5,628)

 

           (5,173)

 

8.8%

Depreciation and Amortization

 

             (712)

 

             (951)

 

-25.1%

 

           (2,408)

 

           (2,879)

 

-16.4%

Other

 

          (1,245)

 

          (2,506)

 

-50.3%

 

           (3,662)

 

           (5,953)

 

-38.5%

INCOME FROM ELECTRIC ENERGY SERVICE

 

         40,318

 

         53,709

 

-24.9%

 

        112,061

 

          99,170

 

13.0%

FINANCIAL INCOME (EXPENSE)

 

          (4,179)

 

           4,607

 

-190.7%

 

         (24,908)

 

            8,084

 

-408.1%

 Income

 

           5,495

 

           8,959

 

-38.7%

 

          17,865

 

          26,783

 

-33.3%

 Expense

 

          (9,674)

 

          (4,352)

 

122.3%

 

         (42,773)

 

         (18,699)

 

128.7%

  Equity in subsidiaries

 

          (2,466)

 

                 -  

 

0.0%

 

           (9,249)

 

                  -  

 

0.0%

INCOME BEFORE TAXES

 

         33,673

 

         58,316

 

-42.3%

 

          77,904

 

        107,254

 

-27.4%

Social Contribution

 

          (3,034)

 

          (5,292)

 

-42.7%

 

           (7,691)

 

           (9,547)

 

-19.4%

Income Tax

 

          (8,429)

 

        (14,585)

 

-42.2%

 

         (21,360)

 

         (26,351)

 

-18.9%

NET INCOME

 

         22,209

 

         38,439

 

-42.2%

 

          48,853

 

          71,355

 

-31.5%

                         

EBITDA

 

         38,563

 

         54,660

 

-29.4%

 

        105,219

 

        102,049

 

3.1%

                         
                         

Net Income for the Period and  Adjusted EBITDA  Reconciliation (*)

 

 

 

 

 

 

 

 

 

 

   NET INCOME FOR THE PERIOD

 

         22,209

 

         38,439

     

          48,853

 

          71,355

 

 

  Depreciation and Amortization

 

              712

 

              951

     

            2,408

 

            2,879

 

 

  Financial Income (Expense)

 

           4,179

 

          (4,607)

     

          24,908

 

           (8,084)

 

 

  Social Contribution

 

           3,034

 

           5,292

     

            7,691

 

            9,547

 

 

  Income Tax

 

           8,429

 

         14,585

     

          21,360

 

          26,351

 

 

Adjusted EBITDA

 

         38,563

 

         54,660

     

        105,219

 

        102,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(*) Information not reviewed by the independent auditors

                       

 

 

 Gross Operating Revenue

 

The gross operating revenue of the 3rd quarter of 2017 was R$1,109,355, an increase of R$474,855 (74.8%) in relation to the same quarter of 2016, mainly explained by the (i) increase in the amount of energy sold to free consumers and concessionaires (1,849 GWh – R$ 329,611); (ii) gain in operations of CCEE due to an increase in the amount of energy traded (280.1 GWh – R$ 117,946) and increase in average price of PLD (R$ 45,101); partially offset by (iii) contractual indemnities by postponement of energy (R$ 22,503).

 

 

Cost of Electric Energy

 

Cost of electric energy of the 3rd quarter of 2017 was R$ 932,845, an increase of R$ 438,371 (88.7%) in relation to the same quarter of 2016, basically explained by bilateral contracts: increase in volume purchased (2,108 GWh - R$ 352,359) and in average price of 21.5% (R$99,417).

 

 

Finance Income (expenses)

 

The finance result determined in the 3rd quarter of 2017 was a finance cost of R$ 4,179, an increase of R$ 8,786 in relation to the same quarter of 2016, mainly explained by the 3rd issue of debentures in the 4th quarter of 2016 (R$ 11,313), partially offset by the gain on the fair value adjustment of derivatives and debts (R$ 4,402).

 

The share of profit of investees for the 3rd quarter was negative by R$ 6,534, due to the equity interest in the subsidiary CPFL Jaguariúna.

 

 

 

 

 

25 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

Profit for the Period and EBITDA

 

The result determined in the 3rd quarter of 2017 was a profit of R$ 18,142, a decrease of R$ 20,297 (52.8%) when compared with the same quarter of 2016.

 

EBITDA (Earnings before finance result, income tax and social contribution and depreciation and amortization) for the 3rd quarter of 2017 was R$ 34,496, a decrease of R$ 20,164 (36.9%) when compared with the same quarter of 2016, which was R$ 54,660 (information not reviewed by the Independent Auditors).

 

 

 

26 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

NOTES TO INTERIM FINANCIAL STATEMENTS

 

 

CPFL Energia S.A.

Statements of financial position at September 30, 2017 and December 31, 2016

(In thousands of Brazilian reais - R$)

                 
 

Note

Parent company

 

Consolidated

ASSETS

September 30, 2017

 

December 31, 2016

 

September 30, 2017

 

December 31, 2016

                 

Current assets

               

Cash and cash equivalents

5

           128,616

 

           64,973

 

            3,832,155

 

        6,164,997

Consumers, concessionaires and licensees

6

                   -  

 

                 -  

 

            4,644,672

 

        3,765,893

Dividends and interest on capital

12

           223,052

 

         642,978

 

               106,237

 

            73,328

Income tax and social contribution to be offset

7

             86,293

 

           53,246

 

               145,802

 

          143,943

Other taxes recoverable

7

              4,532

 

           29,589

 

               227,057

 

          259,905

Derivatives

32

                   -  

 

                 -  

 

               389,732

 

          163,241

Sector financial asset

8

                   -  

 

                 -  

 

                  5,449

 

                   -  

Concession financial asset

10

                   -  

 

                 -  

 

                 11,437

 

            10,700

Other receivables

11

                 311

 

               229

 

               935,255

 

          797,181

Total current assets

 

           442,803

 

         791,016

 

          10,297,796

 

      11,379,187

                 

Noncurrent assets

               

Consumers, concessionaires and licensees

6

                   -  

 

                 -  

 

               242,650

 

          203,185

Intragroup loans

30

             25,619

 

           52,582

 

                  9,157

 

            47,631

Escrow deposits

21

                 649

 

               710

 

               837,526

 

          550,072

Income tax and social contribution to be offset

7

                   -  

 

                 -  

 

                 70,096

 

            65,535

Other taxes recoverable

7

                   -  

 

                 -  

 

               162,283

 

          132,751

Sector financial assets

8

                   -  

 

                 -  

 

               348,157

 

                   -  

Derivatives

32

                   -  

 

                 -  

 

               261,942

 

          641,357

Deferred tax assets

9

           187,326

 

         171,073

 

               979,110

 

          922,858

Concession financial asset

10

                   -  

 

                 -  

 

            6,287,650

 

        5,363,144

Investments at cost

 

                   -  

 

                 -  

 

               116,654

 

          116,654

Other receivables

11

              7,546

 

           26,261

 

               809,785

 

          766,253

Investments

12

        8,255,110

 

      7,866,100

 

            1,042,445

 

        1,493,753

Property, plant and equipment

13

              1,179

 

            1,199

 

            9,841,148

 

        9,712,998

Intangible assets

14

                   32

 

                 24

 

          10,487,077

 

      10,775,613

Total noncurrent assets

 

        8,477,461

 

      8,117,948

 

          31,495,681

 

      30,791,805

                 

Total assets

 

        8,920,264

 

      8,908,964

 

          41,793,477

 

      42,170,992

 

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

 

 

27 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

CPFL Energia S.A.

Statements of financial position at September 30, 2017 and December 31, 2016

(In thousands of Brazilian reais - R$)

                   
 

Note

 

Parent company

 

Consolidated

LIABILITIES AND EQUITY

 

September 30, 2017

 

December 31, 2016

 

September 30, 2017

 

December 31, 2016

                   

Current liabilities

                 

Trade payables

15

 

               644

 

            3,760

 

        4,148,059

 

        2,728,130

Borrowings

16

 

                 -  

 

                 -  

 

        3,767,294

 

        1,875,648

Debentures

17

 

                 66

 

           15,334

 

        1,610,575

 

        1,547,275

Private pension plan

18

 

                 -  

 

                 -  

 

             80,091

 

             33,209

Regulatory charges

19

 

                 -  

 

                 -  

 

           452,279

 

           366,078

Income tax and social contribution payable

   

                 -  

 

                 -  

 

           104,464

 

             57,227

Other taxes, fees and contributions

20

 

               359

 

               454

 

           594,249

 

           624,317

Dividends

   

            3,345

 

         218,630

 

               5,418

 

           232,851

Estimated payroll

   

                 -  

 

                 -  

 

           171,492

 

           131,707

Derivatives

32

 

                 -  

 

                 -  

 

               4,464

 

               6,055

Sector financial liability

8

 

                 -  

 

                 -  

 

           384,115

 

           597,515

Use of public asset

   

                 -  

 

                 -  

 

             11,936

 

             10,857

Other payables

22

 

           16,009

 

           17,577

 

           973,025

 

           807,623

Total current liabilities

   

           20,423

 

         255,755

 

       12,307,461

 

        9,018,492

                   

Noncurrent liabilities

                 

Trade payables

15

 

                 -  

 

                 -  

 

           126,394

 

           129,781

Borrowings

16

 

                 -  

 

                 -  

 

        8,006,258

 

       11,168,394

Debentures

17

 

         183,288

 

         612,251

 

        6,436,820

 

        7,452,672

Private pension plan

18

 

                 -  

 

                 -  

 

        1,014,736

 

        1,019,233

Other taxes, fees and contributions

20

 

                 -  

 

                 -  

 

             21,107

 

             26,814

Deferred tax liabilities

9

 

                 -  

 

                 -  

 

        1,267,570

 

        1,324,134

Provision for tax, civil and labor risks

21

 

               557

 

            1,008

 

           948,448

 

           833,276

Derivatives

32

 

                 -  

 

                 -  

 

           117,130

 

           112,207

Sector financial liability

8

 

                 -  

 

                 -  

 

             76,902

 

           317,406

Use of public asset

   

                 -  

 

                 -  

 

             82,153

 

             86,624

Allowance for investment losses

12

 

            2,100

 

           19,302

 

                    -  

 

                    -  

Other payables

22

 

           28,362

 

           50,628

 

           293,538

 

           309,292

Total noncurrent liabilities

   

         214,307

 

         683,189

 

       18,391,056

 

       22,779,832

                   

Equity

23

               

Issued capital

   

      5,741,284

 

      5,741,284

 

        5,741,284

 

        5,741,284

Capital reserves

   

         468,014

 

         468,014

 

           468,014

 

           468,014

Legal reserve

   

         739,102

 

         739,102

 

           739,102

 

           739,102

Statutory reserve - concession financial asset

   

         760,976

 

         702,928

 

           760,976

 

           702,928

Statutory reserve - working capital improvement

   

         545,505

 

         545,505

 

           545,505

 

           545,505

Additional dividend proposed

   

                 -  

 

            7,820

 

                    -  

 

               7,820

Accumulated comprehensive income

   

        (253,927)

 

        (234,633)

 

          (253,927)

 

          (234,633)

Retained earnings

   

         684,579

 

                 -  

 

           684,579

 

                    -  

     

      8,685,534

 

      7,970,020

 

        8,685,534

 

        7,970,021

Equity attributable to noncontrolling interests

   

                 -  

 

                 -  

 

        2,409,425

 

        2,402,648

Total equity

   

      8,685,534

 

      7,970,020

 

       11,094,960

 

       10,372,668

                   

Total liabilities and equity

   

      8,920,264

 

      8,908,964

 

       41,793,477

 

       42,170,992

 

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

 

28 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

 
 

CPFL Energia S.A.

 

Statements of profit or loss for the periods ended September 30, 2017 and 2016

(In thousands of Brazilian reais, except earnings per share)

                                 
                                 
 

Note

Parent company

 

Consolidated

 

2017

 

2016

 

2017

 

2016

 

3rd Quarter

 

9 months

 

3rd Quarter

 

9 months

 

3rd Quarter

 

9 months

 

3rd Quarter (Restated*)

 

9 months (Restated*)

Net operating revenue

25

                     1

 

                     1

 

                    -  

 

               1,713

 

         7,783,946

 

       19,285,274

 

         4,782,815

 

       13,600,307

Cost of electric energy services

                               

Cost of electric energy

26

                    -  

 

                    -  

 

                    -  

 

                    -  

 

        (5,246,084)

 

      (12,205,255)

 

        (2,770,513)

 

        (7,963,080)

Cost of operation

27

                    -  

 

                    -  

 

                    -  

 

                    -  

 

           (698,427)

 

        (2,055,025)

 

           (562,184)

 

        (1,622,816)

Cost of services rendered to third parties

27

                    -  

 

                    -  

 

                    -  

 

                    -  

 

           (599,755)

 

        (1,481,128)

 

           (324,990)

 

           (817,558)

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

                     1

 

                     1

 

                    -  

 

               1,713

 

         1,239,680

 

         3,543,865

 

         1,125,128

 

         3,196,852

Operating expenses

27

                             

Selling expenses

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

           (134,824)

 

           (426,479)

 

           (123,680)

 

           (387,775)

General and administrative expenses

 

              (7,672)

 

            (31,743)

 

            (16,083)

 

            (37,025)

 

           (199,380)

 

           (716,170)

 

           (192,069)

 

           (607,198)

Other operating expenses

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

           (105,702)

 

           (299,048)

 

            (74,560)

 

           (218,402)

                                 
   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from electric energy services

 

              (7,671)

 

            (31,743)

 

            (16,083)

 

            (35,312)

 

            799,773

 

         2,102,168

 

            734,819

 

         1,983,477

                                 

Equity interests in subsidiaries, associates and joint ventures

12

            353,447

 

            785,487

 

            231,233

 

            778,043

 

             90,031

 

            252,709

 

             68,826

 

            200,944

Finance income (expenses)

28

                             

Finance income

 

               6,995

 

             15,979

 

             25,321

 

             61,706

 

            205,553

 

            708,896

 

            286,310

 

            932,154

Finance expenses

 

            (22,651)

 

            (64,804)

 

              (5,689)

 

            (37,315)

 

           (548,953)

 

        (1,906,602)

 

           (703,203)

 

        (1,932,030)

   

            (15,656)

 

            (48,825)

 

             19,631

 

             24,391

 

           (343,400)

 

        (1,197,706)

 

           (416,893)

 

           (999,877)

Profit before taxes

 

            330,120

 

            704,919

 

            234,781

 

            767,123

 

            546,404

 

         1,157,171

 

            386,752

 

         1,184,545

Social contribution

9

                  737

 

               5,818

 

                 (198)

 

                  120

 

            (44,521)

 

           (113,385)

 

            (35,448)

 

           (125,116)

Income tax

9

                  956

 

             10,435

 

              (3,017)

 

              (4,517)

 

           (111,686)

 

           (298,296)

 

            (82,031)

 

           (317,575)

   

               1,693

 

             16,253

 

              (3,216)

 

              (4,397)

 

           (156,207)

 

           (411,680)

 

           (117,480)

 

           (442,691)

                                 

Profit for the period

 

            331,813

 

            721,173

 

            231,565

 

            762,725

 

            390,197

 

            745,490

 

            269,272

 

            741,854

                                 

Profit for the period attributable to owners of the Company

             

                    -  

 

            331,813

 

            721,173

 

            231,565

 

            762,725

Profit (loss) for the period attributable to noncontrolling interests

             

                    -  

 

             58,385

 

             24,319

 

             37,707

 

            (20,871)

Basic earnings per share attributable to owners of the Company (R$)

24

                 0.33

 

                 0.71

 

                 0.23

 

                 0.75

 

                 0.33

 

                 0.71

 

                 0.23

 

                 0.75

Diluted earnings per share attributable to owners of the Company (R$)

24

                 0.32

 

                 0.71

 

                 0.22

 

                 0.74

 

                 0.32

 

                 0.71

 

                 0.22

 

                 0.74

 

(*) Comprises the effects of note 2.8

 

29 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

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

30 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

CPFL Energia S.A.

 Statements of comprehensive income for the periods ended September 30, 2017 and 2016

 (In thousands of Brazilian reais - R$)

                 
   

Parent company

   

2017

 

2016

   

3rd Quarter

 

9 months

 

3rd Quarter

 

9 months

Profit for the period

 

            331,813

 

            721,173

 

            231,565

 

            762,725

                 

Other comprehensive income

               

Items that will not be reclassified subsequently to profit or loss

               

     Comprehensive income for the period of subsidiaries

 

                    -  

 

                    -  

 

                    -  

 

           (404,363)

                 

Total comprehensive income for the period - individual

 

            331,813

 

            721,173

 

            231,565

 

            358,362

                 
                 
                 
                 
   

Consolidated

   

2017

 

2016

   

3rd Quarter

 

9 months

 

3rd Quarter

 

9 months

Profit for the period

 

            390,197

 

            745,490

 

            269,272

 

            741,854

                 

Other comprehensive income

               

Items that will not be reclassified subsequently to profit or loss

               

     - Actuarial gains (losses), net of tax effects

 

                    -  

 

                    -  

 

                    -  

 

           (404,363)

                 

Total comprehensive income for the period

 

            390,197

 

            745,490

 

            269,272

 

            337,491

Attributable to owners of the Company

 

            331,813

 

            721,173

 

            231,565

 

            358,362

Attributable to noncontrolling interests

 

             58,385

 

             24,319

 

             37,707

 

            (20,871)

 

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

31 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

CPFL Energia S.A.

 Statements of changes in equity for the period ended September 30, 2017

 (In thousands of Brazilian reais - R$)

         

 Earning reserves

 

 Accumulated comprehensive income

         

 Noncontrolling interests

  

 
         

 

 

 Statutory reserves

 

 

 

 

 

 

         

 Accumulated comprehensive income

 

 

   
 

 Issued capital

 

 Capital reserve

 

 Legal reserve

 

 Concession financial asset

 

 Working capital improvement

 

 Dividend

 

 Deemed cost

 

 Private pension plan

 

 Retained earnings

 

 Total

   

 Other equity components

  

 Total equity

Balance at December 31, 2016

         5,741,284

 

            468,014

 

            739,102

 

            702,928

 

               545,505

 

               7,820

 

            431,713

 

           (666,346)

 

                    -  

 

         7,970,021

 

             13,572

 

         2,389,076

 

       10,372,668

                                                   

Total comprehensive income

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

                    -  

 

                    -  

 

            721,173

 

            721,173

 

                    -  

 

             24,318

 

            745,490

 Profit for the period

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

                    -  

 

                    -  

 

            721,173

 

            721,173

 

                    -  

 

             24,318

 

            745,490

                                                   

 Internal changes in equity

                    -  

 

                    -  

 

                    -  

 

             58,049

 

                       -  

 

                    -  

 

            (19,294)

 

                    -  

 

            (38,754)

 

                    -  

 

              (1,311)

 

               1,247

 

                   (64)

Realization of deemed cost of property, plant and equipment

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

            (29,234)

 

                    -  

 

             29,234

 

                    -  

 

              (1,987)

 

               1,987

 

                    -  

Tax effects on realization of deemed cost

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

               9,940

 

                    -  

 

              (9,940)

 

                    -  

 

                  676

 

                 (676)

 

                    -  

Changes in statutory reserve in the period

                    -  

 

                    -  

 

                    -  

 

             58,049

 

                       -  

 

                    -  

 

                    -  

 

                    -  

 

            (58,049)

 

                    -  

 

                    -  

 

                    -  

 

                    -  

Other changes in noncontrolling interests

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                   (64)

 

                   (64)

                                                   

Capital transactions with owners

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

              (7,820)

 

                    -  

 

                    -  

 

               2,161

 

              (5,659)

 

                    -  

 

            (17,476)

 

            (23,135)

Capital increase

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                    13

 

                    13

Prescribed dividend

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

                    -  

 

                    -  

 

               2,161

 

               2,161

 

                    -  

 

                    -  

 

               2,161

Interim dividend

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

              (7,226)

 

              (7,226)

Dividend proposal approved

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

              (7,820)

 

                    -  

 

                    -  

 

                    -  

 

              (7,820)

 

                    -  

 

            (10,263)

 

            (18,082)

                                                   

Balance at September 30, 2017

         5,741,284

 

            468,014

 

            739,102

 

            760,976

 

               545,505

 

                    -  

 

            412,419

 

           (666,346)

 

            684,579

 

         8,685,534

 

             12,261

 

         2,397,165

 

       11,094,960

 

 

CPFL Energia S.A.

 Statements of changes in equity for the period ended September 30, 2016

 (in thousand of Brazilian reais - R$)

                                               
         

 Earnings reserves

 

 Accumulated comprehensive income

         

 Noncontrolling interests

  

 
         

 

 

 Statutory reserve

 

 

 

 

         

 Accumulated comprehensive income

 

 

   
 

 Issued capital

 

 Capital reserve

 

 Legal reserve

 

 Concession financial asset

 

 Working capital improvement

 

 Deemed cost

 

 Private pension plan

 

 Retained earnings

 

 Total

   

 Other equity components

  

 Total 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)

 

            762,725

 

            358,362

 

                    -  

 

            (20,871)

 

            337,491

 Profit for the period

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

                    -  

 

            762,725

 

            762,725

 

                    -  

 

            (20,871)

 

            741,854

 Other comprehensive income - actuarial gains (losses)

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

           (404,363)

 

                    -  

 

           (404,363)

 

                    -  

 

                    -  

 

           (404,363)

                                               

 Internal changes in equity

                    -  

 

                    -  

 

                    -  

 

            138,858

 

                       -  

 

            (19,365)

 

                    -  

 

           (119,493)

 

                    -  

 

              (1,311)

 

               1,259

 

                   (53)

Realization of deemed cost of property, plant and equipment

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

            (29,341)

 

                    -  

 

             29,341

 

                    -  

 

              (1,987)

 

               1,987

 

                    -  

Tax effect on realization of deemed cost

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

               9,976

 

                    -  

 

              (9,976)

 

                    -  

 

                  675

 

                 (675)

 

                    -  

Changes in statutory reserve in the period

                    -  

 

                    -  

 

                    -  

 

            138,858

 

                       -  

 

                    -  

 

                    -  

 

           (138,858)

 

                    -  

 

                    -  

 

                    -  

 

                    -  

Other changes in noncontrolling interests

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                   (53)

 

                   (53)

                                               

Capital transactions with owners

            392,972

 

                  220

 

                    -  

 

                    -  

 

              (392,972)

 

                    -  

 

                    -  

 

               1,756

 

               1,976

 

                    -  

 

            (15,882)

 

            (13,907)

Capital increase

            392,972

 

                    -  

 

                    -  

 

                    -  

 

              (392,972)

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

Prescribed dividend

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

                    -  

 

               1,756

 

               1,756

 

                    -  

 

                    -  

 

               1,756

Dividend distributed to noncontrollers

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

                    -  

 

            (16,129)

 

            (16,129)

Dividend proposal  approved

                    -  

 

                  220

 

                    -  

 

                    -  

 

                       -  

 

                    -  

 

                    -  

 

                    -  

 

                  220

 

                    -  

 

                  247

 

                  467

                                               

Balance at September 30, 2016

         5,741,284

 

            468,302

 

            694,058

 

            724,308

 

                       -  

 

            438,126

 

           (676,534)

 

            644,988

 

         8,034,534

 

             14,009

 

         2,405,128

 

       10,453,670

 

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

32 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

CPFL Energia SA

 Statements of cash flow for the periods ended September 30, 2017 and 2016

 (in thousand of Brazilian reais - R$)

                 
   

Parent Company

 

Consolidated

   

September 30, 2017

 

September 30, 2016

 

September 30, 2017

 

September 30, 2016

                 

Profit before taxes

 

                704,919

 

                767,123

 

             1,157,171

 

             1,184,545

Adjustment to reconcile profit to cash from operating activities

               

   Depreciation and amortization

 

                      163

 

                      148

 

             1,142,302

 

                936,569

   Provision for tax, civil and labor risks

 

                       (41)

 

                      261

 

                115,102

 

                180,905

   Allowance for doubtful accounts

 

                         -  

 

                         -  

 

                118,885

 

                130,026

   Interest on debts, inflation adjustment and exchange rate changes

 

                  59,297

 

                  25,722

 

             1,570,060

 

             1,446,963

   Pension plan expense

 

                         -  

 

                         -  

 

                  85,426

 

                  51,483

   Equity interests in associates and joint ventures

 

               (785,487)

 

               (778,043)

 

               (252,709)

 

               (200,944)

   Loss on disposal of noncurrent assets

 

                         -  

 

                         -  

 

                  99,689

 

                  32,272

   Deferred taxes (PIS and COFINS)

 

                         -  

 

                         -  

 

                    1,075

 

                   (8,933)

   Others

 

                         -  

 

                         -  

 

                    2,603

 

                   (1,269)

   

                 (21,149)

 

                  15,210

 

             4,039,604

 

             3,751,617

DECREASE (INCREASE) IN OPERATING ASSETS

               

   Consumers, concessionaires and licensees

 

                         -  

 

                         -  

 

            (1,036,050)

 

               (507,596)

   Dividend and interest on capital received

 

                847,766

 

             1,300,253

 

                579,508

 

                  86,282

   Taxes recoverable

 

                   (5,220)

 

                    7,170

 

                  16,699

 

                113,288

   Escrow deposits

 

                        80

 

                       (64)

 

               (247,544)

 

                755,342

   Sector financial asset

 

                         -  

 

                         -  

 

               (260,784)

 

             2,174,407

   Receivables - Eletrobras

 

                         -  

 

                         -  

 

                 (17,069)

 

                101,456

   Concession financial assets (transmission companies)

 

                         -  

 

                         -  

 

                 (54,625)

 

                 (38,005)

   Other operating assets

 

                  18,633

 

                    7,362

 

                 (14,356)

 

                125,267

                 

INCREASE (DECREASE) IN OPERATING LIABILITIES

               

   Trade payables

 

                   (3,116)

 

                     (412)

 

             1,420,136

 

            (1,217,552)

   Other taxes and social contributions

 

                       (95)

 

                     (135)

 

                 (50,765)

 

                 (65,534)

   Other liabilities with private pension plan

 

                         -  

 

                         -  

 

                 (43,040)

 

                 (64,990)

   Regulatory charges

 

                         -  

 

                         -  

 

                  86,202

 

               (567,176)

   Tax, civil and labor risks paid

 

                     (408)

 

                   (1,060)

 

               (160,843)

 

               (175,232)

   Sector financial liability

 

                         -  

 

                         -  

 

               (627,509)

 

                247,857

   Payables - amounts provided by the CDE

 

                         -  

 

                         -  

 

                    5,847

 

                 (37,509)

   Other operating liabilities

 

                 (23,836)

 

                   (4,771)

 

                193,761

 

                   (7,202)

CASH FLOWS PROVIDED BY OPERATIONS

 

                812,655

 

             1,323,553

 

             3,829,172

 

             4,674,720

   Interest paid on debts and debentures

 

                 (70,850)

 

                 (45,470)

 

            (1,361,477)

 

            (1,229,949)

   Income tax and social contribution paid 

 

                         (4)

 

                 (27,117)

 

               (366,989)

 

               (687,539)

NET CASH FROM OPERATING ACTIVITIES

 

                741,801

 

             1,250,966

 

             2,100,706

 

             2,757,232

                 

INVESTING ACTIVITIES

               

   Capital reduce in subsidiaries

 

                         -  

 

                         -  

 

                  91,599

 

                         -  

   Purchases of property, plant and equipment

 

                     (141)

 

                     (572)

 

               (610,054)

 

               (845,229)

   Securities, pledges and restricted deposits

 

                         -  

 

                     (400)

 

                 (71,162)

 

               (114,050)

   Purchases of intangible assets

 

                       (10)

 

                         -  

 

            (1,266,817)

 

               (714,457)

   Sale of noncurrent assets

 

                         -  

 

                         -  

 

                        94

 

                         -  

   Advances for future capital increases

 

                 (51,045)

 

                 (71,020)

 

                         -  

 

                         -  

   Intragroup loans

 

                  27,981

 

                 (43,624)

 

                  38,787

 

                  44,881

   

 

 

 

 

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

 

                 (23,215)

 

               (115,616)

 

            (1,817,553)

 

            (1,628,855)

                 

FINANCING ACTIVITIES

               

   Capital increase of noncontrolling shareholder

 

                         -  

 

                         -  

 

                        13

 

                      247

   Borrowings and debentures raised

 

                         -  

 

                         -  

 

             1,545,717

 

             2,290,437

   Repayment of principal of borrowings and debentures

 

               (434,000)

 

               (888,408)

 

            (3,766,482)

 

            (3,766,909)

   Repayment of derivatives

 

                         -  

 

                   (4,711)

 

               (143,033)

 

                256,508

   Business combination payment

 

                         -  

 

                         -  

 

                   (2,507)

 

                 (18,752)

   Dividend and interest on capital paid

 

               (220,944)

 

               (204,695)

 

               (249,703)

 

               (228,045)

NET CASH GENERATED BY (USED IN) FINANCING ACTIVITIES

 

               (654,944)

 

            (1,097,814)

 

            (2,615,995)

 

            (1,466,514)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

                  63,641

 

                  37,535

 

            (2,332,842)

 

               (338,137)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD

 

                  64,973

 

                424,192

 

             6,164,997

 

             5,682,802

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD

 

                128,616

 

                461,727

 

             3,832,155

 

             5,344,665

 

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

 

33 of 92



 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

CPFL Energia S.A.

Statements of value added for the periods ended September 30, 2017 and 2016

(in thousand of Brazilian reais - R$)

               
 

Parent Company

 

Consolidated

 

Nine months 2017

 

Nine months 2016

 

Nine months 2017

 

Nine months 2016 (Restated *)

1 - Revenues

                    152

 

                 2,459

 

         29,513,197

 

              22,942,989

1.1 Operating revenues

                       1

 

                 1,888

 

         27,479,387

 

              21,372,085

1.2 Revenue related to the construction of own assets

                    151

 

                    572

 

             671,997

 

                  883,981

1.3 Revenue from construction of concession infrastructure

                      -  

 

                      -  

 

           1,480,699

 

                  816,950

1.4 Allowance for doubtful accounts

                      -  

 

                      -  

 

            (118,885)

 

                 (130,026)

               

2 - (-) Inputs

                (7,315)

 

                (9,034)

 

        (16,793,150)

 

             (11,426,738)

2.1 Electricity purchased for resale

                      -  

 

                      -  

 

        (13,566,945)

 

               (8,846,195)

2.2 Material

                   (103)

 

                   (608)

 

          (1,507,519)

 

               (1,276,465)

2.3 Outsourced services

                (5,723)

 

                (6,661)

 

          (1,193,253)

 

                 (912,630)

2.4 Others

                (1,489)

 

                (1,765)

 

            (525,433)

 

                 (391,448)

               

3 - Gross value added (1+2)

                (7,164)

 

                (6,575)

 

         12,720,047

 

              11,516,251

               

4 - Retentions

                   (163)

 

                   (148)

 

          (1,145,999)

 

                 (938,522)

4.1 Depreciation and amortization

                   (163)

 

                   (148)

 

            (930,473)

 

                 (752,249)

4.2 Amortization of intangible assets of concession

                      -  

 

                      -  

 

            (215,526)

 

                 (186,272)

               

5 - Net value added generated (3+4)

                (7,326)

 

                (6,723)

 

         11,574,048

 

              10,577,729

               

6 - Value Added received in transfer

             803,932

 

             844,015

 

           1,010,563

 

                1,212,124

6.1 Financial income

               18,445

 

               65,972

 

             757,854

 

                1,011,179

6.2 Interest in subsidiaries, associates and joint ventures

             785,487

 

             778,043

 

             252,709

 

                  200,944

               

7 - Value Added to be distributed (5+6)

             796,606

 

             837,292

 

         12,584,611

 

              11,789,852

               

8 - Distribution of value added

             

8.1 Personnel and charges

               20,442

 

               24,985

 

           1,016,534

 

                  748,895

8.1.1 Direct remuneration

               13,329

 

               14,583

 

             603,673

 

                  463,889

8.1.2 Benefits

                 5,975

 

                 9,338

 

             361,428

 

                  246,535

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

                 1,138

 

                 1,064

 

               51,433

 

                    38,471

8.2 Taxes, fees and contributions

                (9,894)

 

               12,668

 

           8,817,547

 

                8,250,030

8.2.1 Federal

                (9,918)

 

               12,636

 

           4,770,588

 

                4,614,222

8.2.2 Estate

                     24

 

                     33

 

           4,030,145

 

                3,622,743

8.2.3 Municipal

                      -  

 

                      -  

 

               16,814

 

                    13,064

8.3 Lenders and lessors

               64,886

 

               36,914

 

           2,005,040

 

                2,049,073

8.3.1 Interest

               64,662

 

               36,877

 

           1,951,630

 

                2,004,204

8.3.2 Rental

                    223

 

                     37

 

               53,409

 

                    44,868

8.4 Interest on capital

             721,173

 

             762,725

 

             745,490

 

                  741,854

8.4.1 Retained earnings

             721,173

 

             762,725

 

             745,490

 

                  741,854

 

             796,606

 

             837,292

 

         12,584,611

 

              11,789,852

               

(*) Includes the effects of note 2.8

 

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

34 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

CPFL ENERGIA S.A.

NOTES TO THE INTERIM FINANCIAL STATEMENTS

AT SEPTEMBER 30, 2017

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

 

( 1 )OPERATIONS

 

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

The Company’s registered office is located at Rodovia Engenheiro Miguel Noel Nascentes Burnier, km 2,5, Parque São Quirino - Campinas - SP - Brazil.

The Company has direct and indirect interests in the following subsidiaries and joint 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

 

4,366

 

30 years

 

 November 2027

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

 

Publicly-held corporation

 

Direct 100%

 

Interior and coast of São Paulo

 

27

 

1,710

 

30 years

 

 October 2028

 Rio Grande Energia S.A. ("RGE")

 

Publicly-held corporation

 

Direct 100%

 

Interior of Rio Grande do Sul

 

255

 

1,477

 

30 years

 

 November 2027

 RGE Sul Distribuidora de Energia S.A.  ("RGE Sul") (a)

 

Publicly-held corporation

 

Indirect100%

 

Interior of Rio Grande do Sul

 

118

 

1,333

 

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

 

212

 

30 years

 

 July 2045

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

 

Privately-held corporation

 

Direct 100%

 

Interior of São Paulo

 

7

 

58

 

30 years

 

 July 2045

 Companhia Jaguari de Energia ("CPFL Jaguari")

 

Privately-held corporation

 

Direct 100%

 

Interior of São Paulo

 

2

 

41

 

30 years

 

 July 2045

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

 

Privately-held corporation

 

Direct 100%

 

Interior of São Paulo

 

5

 

86

 

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

 

47

 

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 e Goiás

 

3 Hydropower (b)

 

1295

 

678

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

 

Privately-held corporation

 

Indirect 65%

 

Rio Grande do Sul

 

3 Hydropower

 

360

 

234

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

 

Privately-held corporation

 

Indirect 51% (d)

 

Santa Catarina e
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 e
Rio Grande do Sul

 

1 Hydropower

 

690

 

173

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

 

Privately-held corporation

 

Indirect 53.34%

 

Paraíba

 

2 Thermal

 

342

 

182

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

 

Privately-held corporation

 

Indirect 59.93% (b)

 

Tocantins

 

1 Hydropower

 

903

 

63

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

 

Publicly-held corporation

 

Indirect 51.60%

 

(c)

 

(c)

 

(c)

 

(c)

CPFL Centrais Geradoras Ltda ("CPFL Centrais Geradoras")

 

Limited liability company

 

Direct 100%

 

São Paulo e Minas Gerais

 

6 SHPs

 

4

 

4

 

 

             

Energy commercialization

 

Company type

 

Core activity

 

Equity interest

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

 

Privately-held corporation

 

Energy commercialization

 

Direct 100%

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

 

Limited liability company

 

Commercialization and provision of energy services

 

Indirect 100%

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

 

Privately-held corporation

 

Energy commercialization

 

Indirect 100%

CPFL Planalto Ltda.  ("CPFL Planalto")

 

Limited liability company

 

Energy commercialization

 

Direct 100%

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

 

Privately-held corporation

 

Energy commercialization

 

Indirect 100%

 

 

 

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Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

Provision of services

 

Company type

 

Core activity

 

Equity interest

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

 

Privately-held corporation

 

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

 

Direct
100%

NECT Serviços Administrativos Ltda ("Nect")

 

Limited liability company

 

Provision of administrative services

 

Direct
100%

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

 

Limited liability company

 

Provision of call center services

 

Direct
100%

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

 

Limited liability company

 

Collection services

 

Direct 
100%

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

 

Privately-held corporation

 

Energy efficiency management

 

Direct
100%

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

 

Limited liability company

 

Provision of IT services

 

Direct
100%

CPFL GD S.A ("CPFL GD")

 

Privately-held corporation

 

Provision of maintenance services for energy generation companies

 

Indirect
100%

             

Others

 

Company type

 

Core activity

 

Equity interest

CPFL 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")

 

Privately-held corporation

 

Holding company

 

Indirect
51%

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

 

Privately-held corporation

 

Holding company

 

Indirect
99.95%

CPFL Telecom S.A ("CPFL Telecom")

 

Privately-held corporation

 

Telecommunication services

 

Direct
100%

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

 

Privately-held corporation

 

Energy transmission services

 

Indirect
100%

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

 

Privately-held corporation

 

Energy transmission services

 

Indirect
100%

 

a)     CPFL Geração has 51.54% of the assured energy and power of the Serra da Mesa hydropower plant, which concession is owned by Furnas. The plants Carioba and Cariobinha are inactive while they await the position of the Ministry of Mines and Energy on the early termination of their concession and are not included in the table.

 

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

 

c)     CPFL Renováveis has operations in the states of São Paulo, Minas Gerais, Mato Grosso, Santa Catarina, Ceará, Rio Grande do Norte, Paraná and Rio Grande do Sul and its main activities are: (i) holding investments in companies of the renewable energy segment; (ii) identification, development, and exploration of generation potentials; and (iii) sale of electric energy. At September 30, 2017, CPFL Renováveis had a portfolio of 113 projects of 2,509.5 MW of installed capacity (2,102.6 MW in operation). 

 

·         Hydropower generation: 47 SHP’s (555.3 MW) with 39 SHPs in operation (423 MW) and 8 SHPs under development (132.3 MW);

·         Wind power generation: 57 projects (1,583.1 MW) with 45 projects in operation (1,308.5 MW) and 12 projects under construction/development (274.6 MW);

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

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

 

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

 

 

( 2 ) PRESENTATION OF THE INTERIM FINANCIAL STATEMENTS

2.1 Basis of preparation

This interim individual (Parent Company) and consolidated financial statement has been prepared and is being presented in accordance with the International Accounting Standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standard Board – IASB, and also based on standards issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of Quarterly Financial Information (ITR), in accordance with Technical Pronouncement CPC 21 (R1) - Interim Financial Reporting.

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Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

                                                                       

The Company and its subsidiaries (“Group”) also follows the guidelines of the Accounting Manual of the Brazilian Electricity Sector and the standards laid down by the Brazilian Electricity Regulatory Agency (Agência Nacional de Energia Elétrica – ANEEL), when these do not conflict with the accounting practices adopted in Brazil and/or with international Financial Reporting.

 

The accounting practices and criteria adopted in preparing this individual and consolidated interim financial statements are consistent with those adopted in preparing the financial statements at December 31, 2016, and therefore should be read together.

Management states that all significant information specific to interim financial statements is disclosed and corresponds to the information used in managing the Group.

 

The interim financial statements was approved by Management and authorized for issue on November 6, 2017.

 

2.2 Basis of measurement

The interim financial statements has been prepared on the historical cost basis except for the following items recorded in the statements of financial position: i) derivative financial instruments measured at fair value, 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 32 – Financial Instruments.

 

2.3 Use of estimates and judgments

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

 

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

 

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

 

·         Note 6 – Consumers, concessionaires and licensees (Allowance for doubtful accounts);

·         Note 8 – Sector financial asset and liability (certain financial components that can start without prior methodology);

·         Note 9 – Deferred tax assets and liabilities (recognition of assets: availability of future taxable profit against which the tax losses can be utilized);

·         Note 10 – Concession financial asset (assumptions for fair value measurement);

·         Note 11 – Other receivables (allowance for doubtful accounts);

·         Note 13 – Property, plant and equipment (application of definite useful lives and key assumptions regarding recoverable amounts);

·         Note 14 – Intangible assets (key assumptions regarding recoverable amounts);

·         Note 18 – Private pension plan (key actuarial assumptions used in the measurement of defined benefit obligations);

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Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

·         Note 21 – Provision for tax, civil and labor risks and escrow deposits (recognition and measurement: key assumptions on the probability and magnitude of outflow of resources);

·         Note 25 – Net operating revenue (assumptions for measurement of unbilled supply and Distribution System Usage Tariff - TUSD ); and

·         Note 32 – Financial instruments (assumptions for fair value measurement).

2.4 Functional currency and presentation currency

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

 

2.5 Segment information

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

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

The presentation of the operating segments includes items directly attributable to them, as well as any allocations required, including intangible assets, see note 29 for further details.

2.6 Information on equity interests

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

 

At September 30, 2017 and December 31, 2016, and for the quarters and nine months periods ended September 30, 2017 and 2016, the noncontrolling interests in the consolidated balances refer to interests held by third parties in subsidiaries CERAN, Paulista Lajeado and CPFL Renováveis.

2.7 Statement of value added

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

2.8 Restatements in the quarter and nine months period ended September 30, 2016 interim financial statements

As mentioned in note 2.8 to the financial statements at December 31, 2016, the Company and its electricity distribution subsidiaries, for a better presentation of their operating and financial performance, concluded that the adjustment of the expected cash flow of the indemnifiable financial asset of the concession of each distribution company, previously presented in the line item of finance income, within finance income (expenses), should be more properly classified in the group of operating income, together with the other income related to their core activity. This allocation reflects more accurately the electricity distribution business model and allows a better presentation regarding its performance.

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Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

According to the guidance in CPC 23 – Accounting Policies, Changes in Accounting Estimates and Errors, the Company and its subsidiaries changed their accounting policy previously adopted to an accounting policy that better reflects the business performance of the Company and its subsidiaries (for the reasons mentioned above) and, therefore, made the retrospective reclassifications in their corresponding information submitted for comparative purposes corresponding to the statements of profit or loss and value added, in relation to those originally issued on November 7, 2016.

The reclassifications made do not change the total assets, equity and profit for the period, or the statement of cash flows.

The statements of profit or loss and value added, for comparability purposes, are presented below:

 

Statement of profit or loss for the period

 

   

Consolidated

 

Consolidated

   

3rd quarter 2016

 

Reclassifications

 

3rd quarter 2016 (Restated)

 

Nine months 2016

 

Reclassifications

 

Nine months 2016 (Restated)

                         

Net operating revenue

 

          4,737,375

 

               45,440

 

          4,782,815

 

         13,402,846

 

             197,461

 

         13,600,307

Cost of electric energy services

                       

Cost of electric energy

 

         (2,770,513)

 

                      -  

 

         (2,770,513)

 

         (7,963,080)

 

                      -  

 

         (7,963,080)

Cost of operation

 

            (562,184)

 

                      -  

 

            (562,184)

 

         (1,622,816)

 

                      -  

 

         (1,622,816)

Cost of services rendered to third parties

 

            (324,990)

 

                      -  

 

            (324,990)

 

            (817,558)

 

                      -  

 

            (817,558)

Gross profit

 

          1,079,688

 

               45,440

 

          1,125,128

 

          2,999,391

 

             197,461

 

          3,196,852

Operating expenses

                       

Selling expenses

 

            (123,680)

 

                      -  

 

            (123,680)

 

            (387,775)

 

                      -  

 

            (387,775)

General and administrative expenses

 

            (192,069)

 

                      -  

 

            (192,069)

 

            (607,198)

 

                      -  

 

            (607,198)

Other operating expenses

 

              (74,560)

 

                      -  

 

              (74,560)

 

            (218,402)

 

                      -  

 

            (218,402)

Income from electric energy services

 

             689,379

 

               45,440

 

             734,819

 

          1,786,017

 

             197,461

 

          1,983,477

Equity interests in subsidiaries, associates and joint ventures

 

               68,826

 

                      -  

 

               68,826

 

             200,944

 

                      -  

 

             200,944

Finance income (costs)

                       

Finance income

 

             335,467

 

              (49,157)

 

             286,310

 

          1,141,838

 

            (209,684)

 

             932,154

Finance costs

 

            (706,920)

 

                 3,717

 

            (703,203)

 

         (1,944,253)

 

               12,223

 

         (1,932,030)

   

            (371,453)

 

              (45,440)

 

            (416,893)

 

            (802,416)

 

            (197,461)

 

            (999,877)

Profit before taxes

 

             386,752

 

                      -  

 

             386,752

 

          1,184,545

 

                      -  

 

          1,184,545

Social contribution

 

              (35,448)

 

                      -  

 

              (35,448)

 

            (125,116)

 

                      -  

 

            (125,116)

Income tax

 

              (82,031)

 

                      -  

 

              (82,031)

 

            (317,575)

 

                      -  

 

            (317,575)

   

            (117,480)

 

                      -  

 

            (117,480)

 

            (442,691)

 

                      -  

 

            (442,691)

Profit for the period

 

             269,272

 

                      -  

 

             269,272

 

             741,854

 

                      -  

 

             741,854

                         

Profit for the period attributable to owners of the Company

         

             231,565

         

             762,725

Profit (loss) for the period attributable to noncontrolling interests

         

               37,707

         

              (20,871)

Basic earnings per share attributable to owners of the Company - R$

         

                  0.23

         

                  0.75

Diluted earnings per share attributable to owners of the Company - R$

       

                  0.22

         

                  0.74

 

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Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Statement of value added for the period

 

   

Consolidated

   

Nine months 2016

 

Reclassifications

 

Nine months 2016 (Restated)

             

1 - Revenues

 

         22,745,528

 

              197,461

 

         22,942,989

1.1 Operating revenues

 

         21,174,624

 

              197,461

 

         21,372,085

1.2 Revenue related to construction of own assets

 

              883,981

 

                      -  

 

              883,981

1.3 Revenue from construction of concession infrastructure

 

              816,950

 

                      -  

 

              816,950

1.4 Allowance for doubtful accounts

 

             (130,026)

 

                      -  

 

             (130,026)

             

2 - (-) Inputs purchased from third parties

 

        (11,426,738)

 

                      -  

 

        (11,426,738)

2.1 Electricity purchased for resale

 

          (8,846,195)

 

                      -  

 

          (8,846,195)

2.2 Material

 

          (1,276,465)

 

                      -  

 

          (1,276,465)

2.3 Outsourced services

 

             (912,630)

 

                      -  

 

             (912,630)

2.4 Others

 

             (391,448)

 

                      -  

 

             (391,448)

             

3 - Gross value added (1+2)

 

         11,318,790

 

              197,461

 

         11,516,251

             

4 - Retentions

 

             (938,522)

 

                      -  

 

             (938,522)

4.1 Depreciation and amortization

 

             (752,249)

 

                      -  

 

             (752,249)

4.2 Amortization of intangible assets of concession

 

             (186,272)

 

                      -  

 

             (186,272)

             

5 - Net value added generated (3+4)

 

         10,380,269

 

              197,461

 

         10,577,729

             

6 - Value Added received in transfer

 

           1,421,808

 

             (209,684)

 

           1,212,124

6.1 Finance income

 

           1,220,863

 

             (209,684)

 

           1,011,179

6.2 Share of profit (loss) of investees

 

              200,944

 

                      -  

 

              200,944

             

7 - Value Added to be distributed (5+6)

 

         11,802,074

 

              (12,223)

 

         11,789,852

             

8 - Distribution of value added

           

8.1 Personnel and charges

 

              748,895

 

                      -  

 

              748,895

8.1.1 Direct remuneration

 

              463,889

 

                      -  

 

              463,889

8.1.2 Benefits

 

              246,535

 

                      -  

 

              246,535

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

 

               38,471

 

                      -  

 

               38,471

8.2 Taxes, fees and contributions

 

           8,250,030

 

                      -  

 

           8,250,030

8.2.1 Federal

 

           4,614,222

 

                      -  

 

           4,614,222

8.2.2 Estate

 

           3,622,743

 

                      -  

 

           3,622,743

8.2.3 Municipal

 

               13,064

 

                      -  

 

               13,064

8.3 Lenders and lessors

 

           2,061,296

 

              (12,223)

 

           2,049,073

8.3.1 Interest

 

           2,016,427

 

              (12,223)

 

           2,004,204

8.3.2 Rental

 

               44,868

 

                      -  

 

               44,868

8.4 Interest on capital

 

              741,854

 

                      -  

 

              741,854

8.4.1 Retained earnings

 

              741,854

 

                      -  

 

              741,854

   

         11,802,074

 

              (12,223)

 

         11,789,852

 

( 3 ) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The interim financial statements of the Group has been prepared based on the same accounting policies described in notes 3.1 to 3.18, disclosed in the financial statements for the year ended December 31, 2016.

 

 

( 4 ) FAIR VALUE MEASUREMENT

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

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

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Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

- Property, plant and equipment and intangible assets

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

- Financial instruments

Financial instruments measured at fair value are valued based on quoted prices in an active market, or, if such prices are not available, they are assessed using pricing models, applied individually to each transaction, taking into consideration future payment flows, based on the contractual conditions, discounted to present value at rates obtained from market interest curves, having as a basis, whenever available, information obtained from the websites of B3 S.A. - Brasil, Bolsa, Balcão (“B3”) and “Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais – ANBIMA” (note 32) and also includes the debtor's credit risk rate.

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

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

 

( 5 ) CASH AND CASH EQUIVALENTS

 

 

Parent company

Consolidated

 

September 30, 2017

 

December 31, 2016

 

September 30, 2017

 

December 31, 2016

Bank balances

             3,460

 

                426

 

          158,243

 

          170,884

Short-term financial investments

          125,156

 

           64,548

 

       3,673,913

 

       5,994,112

Overnight investment (a)

           21,657

 

           64,541

 

          138,778

 

           95,034

Bank certificates of deposit (b)

                  -  

 

                  -  

 

       1,455,836

 

       2,357,187

Repurchase agreements secured on debentures (b)

                  -  

 

                  -  

 

           64,887

 

           58,616

Investment funds (c)

          103,499

 

                   6

 

       2,014,411

 

       3,483,273

Total

          128,616

 

           64,973

 

       3,832,155

 

       6,164,997

 

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

 

b)   Short-term investments in Bank Certificates of Deposit (CDB) and secured debentures with major financial institutions that operate in the Brazilian financial market, with daily liquidity, short term maturity, low credit risk and interest equivalent, on average, to 101.9% of the CDI.

 

c)   Exclusive Fund investments, with daily liquidity and interest equivalent, on average, to 101.9% of the CDI, subject to floating rates tied to the CDI linked to federal government bonds, CDBs, financial bills and secured debentures of major financial institutions, with low credit risk and short term maturity.

 

( 6 ) CONSUMERS, CONCESSIONAIRES AND LICENSEES

 

The consolidated balance includes mainly activities from the supply of electric energy, broken down as follows at September 30, 2017 and December 31, 2016:

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

 

Consolidated

 

 Amounts

 

 Past due

 

 Total

 

 coming due

 

 until 90 days

 

 > 90 days

 

September 30, 2017

 

December 31, 2016

 Current

                 

 Consumer classes

                 

 Residential

         617,550

 

         393,753

 

           55,275

 

      1,066,578

 

         932,380

 Industrial

         268,298

 

           67,081

 

           81,741

 

         417,120

 

         386,826

 Commercial

         238,968

 

           69,978

 

           41,941

 

         350,888

 

         317,111

 Rural

           72,522

 

           13,864

 

             5,883

 

           92,269

 

           97,444

 Public administration

           63,763

 

           11,769

 

             2,906

 

           78,438

 

           94,348

 Public lighting

           53,416

 

             6,061

 

             2,817

 

           62,294

 

           73,142

 Public utilities

           82,703

 

             7,534

 

             5,319

 

           95,556

 

           97,503

 Billed

      1,397,219

 

         570,041

 

         195,882

 

      2,163,142

 

      1,998,754

 Unbilled

         919,652

 

                  -  

 

                  -  

 

         919,652

 

      1,095,188

 Financing of consumers' debts

         181,855

 

           21,436

 

           38,545

 

         214,507

 

         170,981

 CCEE transactions

         935,636

 

           39,468

 

             4,053

 

         979,157

 

         289,761

 Concessionaires and licensees

         542,003

 

               287

 

             7,593

 

         549,883

 

         390,333

 Others

           49,324

 

                  -  

 

                  -  

 

           49,324

 

           39,974

 

      4,025,689

 

         631,232

 

         246,074

 

      4,875,664

 

      3,984,989

 Allowance for doubtful accounts

           

        (230,993)

 

        (219,098)

Total

           

      4,644,672

 

      3,765,893

                   

 Non current

                 

 Financing of consumers' debts

         224,574

 

                  -  

 

                  -  

 

         224,574

 

         198,875

 Free energy

             5,873

 

                  -  

 

                  -  

 

             5,873

 

             5,436

 CCEE transactions

           41,301

 

                  -  

 

                  -  

 

           41,301

 

           41,301

 

         271,748

 

                  -  

 

                  -  

 

         271,748

 

         245,612

 Allowance for doubtful accounts

           

          (29,097)

 

          (42,427)

Total

           

         242,650

 

         203,185

 

Allowance for doubtful accounts

Movements in the Allowance for doubtful accounts are shown below:

 

 

Consumers, concessionaires and licensees

 

Other
receivables
(note 11)

 

Total

At of December 31, 2016

               (261,525)

 

          (27,992)

 

        (289,517)

Allowance - reversal (recognition)

               (202,911)

 

              (760)

 

        (203,672)

Recovery of revenue

                  84,787

 

                  -  

 

           84,787

Write-off of accrued receivables

                119,560

 

               300

 

         119,860

At of September 30, 2017

               (260,090)

 

          (28,453)

 

        (288,543)

           

Current

               (230,993)

 

          (28,453)

 

        (259,445)

Noncurrent

                 (29,097)

 

                  -  

 

          (29,097)

 

The allowance for doubtful debts is set up based on the history and probability of default and, specifically for distributors, according to the following criteria:

 

Class

Past due over:

Residential

90 days

Commercial

180 days

Other classes

360 days

Sundry bills

180 days

Debts in installments

90 days. In the event of default in one of the installments, the whole  receivable from the customer is subject to impairment.

 

42 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

( 7 ) TAXES RECOVERABLE

 

 

 

Parent company

 

Consolidated

 

September 30, 2017

 

December 31, 2016

 

September 30, 2017

 

December 31, 2016

Current

             

Prepayments of social contribution - CSLL

                 -  

 

            5,508

 

            4,890

 

          14,141

Prepayments of income tax - IRPJ

                 -  

 

            2,282

 

          12,893

 

          35,534

Income tax and social contribution to be offset

          86,293

 

          45,457

 

        128,019

 

          94,268

Income tax and social contribution to be offset

          86,293

 

          53,246

 

        145,802

 

        143,943

               

Withholding income tax - IRRF on interest on capital

            2,482

 

            3,126

 

            2,482

 

            3,642

Withholding income tax - IRRF

            1,716

 

          26,150

 

          74,515

 

        115,189

State VAT - ICMS to be offset

                 -  

 

                 -  

 

          99,798

 

          82,090

Social Integration Program - PIS

                55

 

                52

 

            7,491

 

            9,062

Contribution for Social Security Funding - COFINS

               279

 

               262

 

          33,000

 

          39,984

National Social Security Institute - INSS

                 -  

 

                 -  

 

            7,374

 

            6,374

Others

                 -  

 

                  0

 

            2,397

 

            3,564

Others taxes to be offset

            4,532

 

          29,589

 

        227,057

 

        259,905

 

 

 

 

 

 

 

 

Total

          90,825

 

          82,836

 

        372,859

 

        403,848

               

Noncurrent

             

Social contribution to be offset - CSLL

                 -  

 

                 -  

 

          58,036

 

          55,498

Income tax to be offset - IRPJ

                 -  

 

                 -  

 

          12,060

 

          10,037

Income tax and social contribution to be offset

                 -  

 

                 -  

 

          70,096

 

          65,535

               

State VAT - ICMS to be offset

                 -  

 

                 -  

 

        152,502

 

        122,415

Social Integration Program - PIS

                 -  

 

                 -  

 

            1,029

 

               800

Contribution for Social Security Funding - COFINS

                 -  

 

                 -  

 

            4,743

 

            3,687

National Social Security Institute - INSS

                 -  

 

                 -  

 

            1,526

 

                 -  

Others

                 -  

 

                 -  

 

            2,483

 

            5,849

Others taxes to be offset

                 -  

 

                 -  

 

        162,283

 

        132,751

               

Total

                 -  

 

                 -  

 

        232,379

 

        198,286

 

 

( 8 )     SECTOR FINANCIAL ASSET AND LIABILITY

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

 

 

Consolidated

 

At December 31, 2016

 

Operating revenue

 

Finance income or expense

 

Receipt

At September 30, 2017

 

Deferred

 

Approved

 

Total

 

Constitution

 

Through billing

 

Monetary adjustment

 

 Tariff flag
(note 25.4)

 

Deferred

 

Approved

 

Total

Parcel "A"

     (762,573)

 

      190,369

 

     (572,203)

 

      636,019

 

      238,931

 

       (81,690)

 

     (160,995)

 

      424,503

 

     (364,442)

 

        60,062

CVA (*)

                                     

CDE (**)

     (342,161)

 

       (70,301)

 

     (412,462)

 

     (347,989)

 

      208,670

 

       (32,517)

 

               -  

 

     (323,583)

 

     (260,714)

 

     (584,297)

Electric energy cost

     (506,490)

 

     (239,777)

 

     (746,267)

 

    1,256,796

 

      614,024

 

       (44,379)

 

     (160,457)

 

    1,130,526

 

     (210,809)

 

      919,717

ESS and EER (***)

     (406,568)

 

     (124,411)

 

     (530,979)

 

     (579,831)

 

      303,218

 

       (43,858)

 

            (151)

 

     (721,314)

 

     (130,287)

 

     (851,601)

Proinfa

          3,492

 

        31,414

 

        34,906

 

       (30,284)

 

       (24,383)

 

         (1,467)

 

               -  

 

       (15,943)

 

         (5,284)

 

       (21,227)

Basic network charges

        27,527

 

          9,660

 

        37,187

 

       (58,532)

 

       (23,305)

 

             597

 

               -  

 

       (56,754)

 

        12,701

 

       (44,053)

Pass-through from Itaipu

      147,012

 

      442,911

 

      589,923

 

      675,851

 

     (537,367)

 

        24,950

 

               -  

 

      665,331

 

        88,025

 

      753,356

Transmission from Itaipu

          7,646

 

          7,281

 

        14,927

 

             563

 

       (10,154)

 

             347

 

               -  

 

          1,434

 

          4,249

 

          5,683

Neutrality of industry charges

      142,091

 

      164,375

 

      306,466

 

      112,574

 

     (209,031)

 

          5,599

 

               -  

 

      135,590

 

        80,018

 

      215,608

Overcontracting

      164,878

 

       (30,782)

 

      134,096

 

     (393,129)

 

       (82,741)

 

          9,037

 

            (387)

 

     (390,784)

 

        57,659

 

     (333,125)

Other financial components

     (182,958)

 

     (159,759)

 

     (342,717)

 

          1,187

 

      173,147

 

             909

 

               -  

 

     (119,256)

 

       (48,218)

 

     (167,474)

Refunds related to judicial injunctions

       (76,615)

 

     (132,410)

 

     (209,025)

 

         (5,386)

 

      156,470

 

             801

 

               -  

 

               -  

 

       (57,140)

 

       (57,140)

Others

     (106,343)

 

       (27,349)

 

     (133,692)

 

          6,573

 

        16,677

 

             108

 

               -  

 

     (119,256)

 

          8,922

 

     (110,334)

                                       

Total

     (945,530)

 

        30,612

 

     (914,918)

 

      637,205

 

      412,078

 

       (80,781)

 

     (160,995)

 

      305,248

 

     (412,660)

 

     (107,412)

                                       

Current assets

       

               -  

                         

          5,449

Noncurrent assets

       

               -  

                         

      348,157

Current liabilities

       

     (597,515)

                         

     (384,115)

Noncurrent liabilities

       

     (317,406)

                         

       (76,902)

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

(**)          Energy Development Account – CDE

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

 

 

43 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

The details of the nature of each sector financial asset and liability are provided in Note 8 to the financial statements at December 31, 2016.

 

( 9 )DEFERRED TAX ASSETS AND LIABILITIES

9.1    Breakdown of tax assets and liabilities 

 

 

Parent company

 

Consolidated

 

September 30, 2017

 

December 31, 2016

 

September 30, 2017

 

December 31, 2016

 Social contribution credit/(debit)

             

 Tax losses carryforwards

            48,872

 

            42,841

 

          109,957

 

          123,389

 Tax benefit of merged intangible

                  -  

 

                  -  

 

            80,544

 

            86,377

 Temporarily nondeductible differences  

                912

 

             1,125

 

         (280,382)

 

         (332,750)

 Subtotal

            49,785

 

            43,966

 

           (89,881)

 

         (122,984)

               

 Income tax credit / (debit)

             

 Tax losses carryforwards

          135,025

 

          123,980

 

          313,348

 

          358,683

 Tax benefit of merged intangible

                  -  

 

                  -  

 

          275,557

 

          295,986

 Temporarily nondeductible differences  

             2,516

 

             3,126

 

         (776,829)

 

         (923,383)

 Subtotal

          137,541

 

          127,106

 

         (187,924)

 

         (268,713)

               

PIS and COFINS credit/(debit)

             

 Temporarily nondeductible differences  

                  -  

 

                  -  

 

           (10,655)

 

            (9,580)

               

 Total

          187,326

 

          171,073

 

         (288,460)

 

         (401,276)

               

 Total tax credit

          187,326

 

          171,073

 

          979,110

 

          922,858

 Total tax debit

                  -  

 

                  -  

 

      (1,267,570)

 

      (1,324,134)

 

The expected recovery of the deferred tax assets recorded in noncurrent assets, arising from nondeductible temporary differences, tax benefit of merged intangible and income tax and social contribution losses, the breakdown of which is described in the financial statements at December 31, 2016, is based on the projections of future profits, approved by the Board of Directors and reviewed by the Fiscal Council. To reflect adequately the effective rate of the taxes on profit, deferred tax assets are recognized monthly on any losses for companies that have positive projections, in accordance with such studies.

9.2    Tax benefit of merged intangible asset

Refers to the tax credit calculated on the intangible assets derived from the acquisition of subsidiaries, as shown in the following table, which were merged and are recognized in accordance with the concepts of CVM Instructions No. 319/1999 and No. 349/2001 and ICPC 09 (R2) - Individual Financial Statements, Separate Financial Statements, Consolidated Financial Statements and Application of the Equity Method. The benefit is being realized  in proportion to the tax amortization of the merged intangible assets that originated them as per CPC 27 and CPC 04 (R1) - Clarification of acceptable methods of depreciation and amortization, over the remaining concession period, as shown in note 14. 

 

 

Consolidated

 

September 30, 2017

 

December 31, 2016

Social contribution

 

Income tax

 

Social contribution

 

Income tax

CPFL Paulista

           47,028

 

         130,633

 

           50,497

 

         140,270

CPFL Piratininga

           11,474

 

           39,379

 

           12,251

 

           42,044

RGE

           22,042

 

           91,029

 

           23,629

 

           97,584

CPFL Geração

                  -  

 

           14,517

 

                  -  

 

           16,090

Total

           80,544

 

         275,557

 

           86,377

 

         295,987

 

44 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

9.3    Accumulated balances on nondeductible temporary differences

 

 

Consolidated

 

September 30, 2017

 

December 31, 2016

 

Social contribution

 

Income tax

 

PIS/COFINS

 

Social contribution

 

Income tax

 

PIS/COFINS

Temporarily nondeductible differences 

                     

Provision for tax, civil and labor risks

           53,480

 

         148,555

 

                  -  

 

           45,065

 

         125,182

 

                  -  

Private pension fund

             2,182

 

             6,062

 

                  -  

 

             1,711

 

             4,753

 

                  -  

Allowance for doubtful accounts

           26,663

 

           74,064

 

                  -  

 

           26,543

 

           73,729

 

                  -  

Free energy supply

             8,255

 

           22,931

 

                  -  

 

             7,718

 

           21,440

 

                  -  

Research and development and energy efficiency programs

           20,726

 

           57,572

 

                  -  

 

           17,474

 

           48,538

 

                  -  

Personnel-related provisions

             2,231

 

             6,198

 

                  -  

 

             3,422

 

             9,506

 

                  -  

Depreciation rate difference

             5,708

 

           15,856

 

                  -  

 

             6,200

 

           17,223

 

                  -  

Derivatives

          (38,587)

 

        (107,185)

 

                  -  

 

          (54,368)

 

        (151,023)

 

                  -  

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

            (7,584)

 

          (21,066)

 

                  -  

 

            (8,355)

 

          (23,208)

 

                  -  

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

        (107,393)

 

        (296,225)

 

            (7,918)

 

        (104,080)

 

        (287,990)

 

            (6,157)

Actuarial losses (IFRS/CPC)

           25,648

 

           71,244

 

                  -  

 

           25,390

 

           70,527

 

                  -  

Financial instruments (IFRS/CPC)

            (6,688)

 

          (18,577)

 

                  -  

 

          (10,022)

 

          (27,838)

 

                  -  

Accelerated depreciation

                (97)

 

              (270)

 

                  -  

 

                (73)

 

              (204)

 

                  -  

Others

          (16,108)

 

          (44,828)

 

            (2,737)

 

             4,491

 

           12,281

 

            (3,423)

Temporarily nondeductible differences - accumulated
 comprehensive income:

                     

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

          (52,789)

 

        (146,637)

 

                  -  

 

          (55,223)

 

        (153,398)

 

                  -  

Actuarial losses (IFRS/CPC)

           49,699

 

         138,051

 

                  -  

 

           49,698

 

         138,051

 

                  -  

Temporarily nondeductible differences - business combination

                     

Deferred taxes - asset:

                     

Provision for tax, civil and labor risks

           13,505

 

           37,516

 

                  -  

 

                  -  

 

                  -  

 

                  -  

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

           21,646

 

           60,129

 

                  -  

 

           22,771

 

           63,252

 

                  -  

Deferred taxes - liability:

                     

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

          (26,227)

 

          (72,851)

 

                  -  

 

          (27,472)

 

          (76,310)

 

                  -  

Value added derived from determination of deemed cost

          (64,142)

 

        (178,173)

 

                  -  

 

          (78,443)

 

        (217,897)

 

                  -  

Intangible asset - exploration right/authorization in indirect subsidiaries acquired

        (186,932)

 

        (519,255)

 

                  -  

 

        (183,443)

 

        (509,563)

 

                  -  

Other temporary differences

            (3,578)

 

            (9,940)

 

                  -  

 

          (21,754)

 

          (60,435)

 

                  -  

Total

        (280,382)

 

        (776,829)

 

          (10,655)

 

        (332,750)

 

        (923,383)

 

            (9,580)

 

9.4    Reconciliation of the income tax and social contribution amounts recognized in the statements of profit or loss for the quarters and nine months periods ended September 30, 2017 and 2016:

 

 

Parent company

 

Consolidated

 

Social contribution

 

Social contribution

 

2017

 

2016

 

2017

 

2016

 

3rd Quarter

 

Nine months

 

3rd Quarter

 

Nine months

 

3rd Quarter

 

Nine months

 

3rd Quarter

 

Nine months

Profit before taxes

         330,120

 

         704,919

 

         234,781

 

         767,123

 

             546,404

 

          1,157,171

 

             386,752

 

          1,184,545

Reconciliation to reflect effective rate:

                             

Equity in subsidiaries

        (353,447)

 

        (785,487)

 

        (231,233)

 

        (778,043)

 

             (90,031)

 

            (252,709)

 

             (68,826)

 

            (200,944)

Amortization of intangible asset acquired

            (3,382)

 

          (10,146)

 

            (3,382)

 

          (10,146)

 

              12,162

 

              36,487

 

              12,162

 

              36,487

Effect of presumed profit system

                  -  

 

                  -  

 

                  -  

 

                  -  

 

            (158,888)

 

            (255,639)

 

             (98,114)

 

            (117,191)

Adjustment of revenue from excess demand and excess reactive power

                  -  

 

                  -  

 

                  -  

 

                  -  

 

              33,040

 

             106,508

 

              27,545

 

              90,011

Interest on capital income

           16,545

 

           16,545

 

                  -  

 

           12,048

 

                     -  

 

                     -  

 

                     -  

 

                     -  

Other permanent additions (exclusions), net

             1,979

 

             9,519

 

             2,038

 

             7,690

 

              42,213

 

              61,373

 

               (2,072)

 

                    (12)

Tax base

            (8,184)

 

          (64,650)

 

             2,205

 

            (1,328)

 

             384,899

 

             853,191

 

             257,448

 

             992,895

Statutory rate

9%

 

9%

 

9%

 

9%

 

9%

 

9%

 

9%

 

9%

Tax credit/(debit)

               737

 

             5,818

 

              (198)

 

               120

 

             (34,641)

 

             (76,787)

 

             (23,170)

 

             (89,361)

Tax credit recorded (not recorded), net

                  -  

 

                  -  

 

                  -  

 

                  -  

 

               (9,880)

 

             (36,598)

 

             (12,279)

 

             (35,756)

Recorded (unrecognized) Tax credit, net

               737

 

             5,818

 

              (198)

 

               120

 

             (44,521)

 

            (113,385)

 

             (35,448)

 

            (125,116)

                               

Current

                  -  

 

                  -  

 

             2,601

 

            (4,623)

 

             (53,228)

 

            (118,526)

 

             (63,029)

 

            (213,352)

Deferred

               737

 

             5,818

 

            (2,799)

 

             4,743

 

                8,706

 

                5,142

 

              27,580

 

              88,236

                               
 

Parent company

 

Consolidated

 

Income tax

 

Income tax

 

2017

 

2016

 

2017

 

2016

 

3rd Quarter

 

Nine months

 

3rd Quarter

 

Nine months

 

3rd Quarter

 

Nine months

 

3rd Quarter

 

Nine months

Profit before taxes

         330,120

 

         704,919

 

         234,781

 

         767,123

 

             546,404

 

          1,157,171

 

             386,752

 

          1,184,545

Reconciliation to reflect effective rate:

                             

Equity in subsidiaries

        (353,447)

 

        (785,487)

 

        (231,233)

 

        (778,043)

 

             (90,031)

 

            (252,709)

 

             (68,826)

 

            (200,944)

Amortization of intangible asset acquired

                  -  

 

                  -  

 

                  -  

 

                  -  

 

              15,689

 

              47,067

 

              15,689

 

              47,067

Effect of presumed profit system

                  -  

 

                  -  

 

                  -  

 

                  -  

 

            (182,775)

 

            (312,049)

 

            (117,838)

 

            (161,477)

Adjustment of revenue from excess demand and excess reactive power

                  -  

 

                  -  

 

                  -  

 

                  -  

 

              33,040

 

             106,508

 

              27,545

 

              90,011

Interest on capital income

           16,545

 

           16,545

 

                  -  

 

           12,048

 

                     -  

 

                     -  

 

                     -  

 

                     -  

Tax incentive - operating profit

                  -  

 

                  -  

 

                  -  

 

                  -  

 

             (20,657)

 

             (27,518)

 

             (45,045)

 

             (59,056)

Other permanent additions (exclusions), net

             2,958

 

           22,283

 

             8,520

 

           16,940

 

              36,987

 

              70,720

 

               (6,677)

 

             (27,098)

Tax base

            (3,824)

 

          (41,740)

 

           12,069

 

           18,068

 

             338,657

 

             789,191

 

             191,600

 

             873,048

Statutory rate

25%

 

25%

 

25%

 

25%

 

25%

 

25%

 

25%

 

25%

Tax credit/(debit)

               956

 

           10,435

 

            (3,017)

 

            (4,517)

 

             (84,664)

 

            (197,298)

 

             (47,900)

 

            (218,262)

Recorded (unrecognized) Tax credit, net

                  -  

 

                  -  

 

                  -  

 

                  -  

 

             (27,021)

 

            (100,999)

 

             (34,132)

 

             (99,313)

Total

               956

 

           10,435

 

            (3,017)

 

            (4,517)

 

            (111,686)

 

            (298,296)

 

             (82,031)

 

            (317,575)

                               

Current

                  -  

 

                  -  

 

             5,500

 

          (16,438)

 

            (131,035)

 

            (301,322)

 

            (156,464)

 

            (557,938)

Deferred

               956

 

           10,435

 

            (8,517)

 

           11,921

 

              19,349

 

                3,026

 

              74,432

 

             240,363

 

 

 

45 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

( 10 )     CONCESSION FINANCIAL ASSET

 

 

 

 Distribution

 

 Transmission

 

 Consolidated

At December 31, 2016

      5,193,511

 

         180,333

 

      5,373,844

 Current

                  -  

 

           10,700

 

           10,700

 Noncurrent

      5,193,511

 

         169,633

 

      5,363,144

           

Additions

         809,944

 

           45,983

 

         855,926

Adjustment of expected cash flow

           97,155

 

                  -  

 

           97,155

Adjustment - financial asset measured at amortized cost

                  -  

 

           20,287

 

           20,287

Cash inputs - RAP

                  -  

 

            (9,936)

 

            (9,936)

Disposals

          (25,850)

 

                  -  

 

          (25,850)

Business combination

          (12,338)

 

                  -  

 

          (12,338)

 

         

At September 30, 2017

      6,062,420

 

         236,667

 

      6,299,088

 Current

                  -  

 

           11,437

 

           11,437

 Noncurrent

      6,062,420

 

         225,230

 

      6,287,650

 

The balance refers to the financial asset corresponding to the right established in the concession agreements of the energy distribution (measured at fair value) and transmission (measured at amortized cost) companies to receive cash (i) through compensation at the time assets are handed over to the granting authority at the end of the concession, and (ii) the transmission companies’ right to receive cash over the concession period through allowed annual revenue ("RAP").

For energy distribution companies, according to the current tariff model, the remuneration for this asset is recognized in profit or loss upon billing to consumers and the realization occurs upon receipt of the electric energy bills. Moreover, the difference to adjust the balance to the expected cash flow receipts at fair value (new replacement value - “VNR” - note 4) is recognized as a balancing item to the operating income account (note 25) in the statement of profit or loss for the period.

For energy transmission companies, the remuneration for this asset is recognized according to the internal rate of return, which takes into account the investment made, the allowed annual revenue (“RAP”) to be received over the concession period, and the compensation to be received at the time assets are handed over to the granting authority. The adjustment of R$ 20,287 is recognized against other operating revenues and income (R$ 11,171 in the nine months period ended September 30, 2016).

The balances disclosed in the "Business Combinations" line refer to the complementary amounts related to the acquisition of RGE Sul, which final recognition occurred on September 30, 2017, according to note 12.5.

 

 

( 11 )   OTHER RECEIVABLES

 

 

 

Consolidated

 

Current

 

Noncurrent

 

September 30, 2017

 

December 31, 2016

 

September 30, 2017

 

December 31, 2016

Advances - Fundação CESP

            15,247

 

             7,533

 

                  -  

 

                  -  

Advances to suppliers

            26,052

 

            15,787

 

                  -  

 

                  -  

Pledges, funds and restricted deposits

          154,797

 

          106,925

 

          596,091

 

          533,719

Orders in progress

          213,124

 

          203,344

 

                  -  

 

                  -  

Services rendered to third parties

             9,376

 

             9,385

 

                  -  

 

                  -  

Energy pre-purchase agreements

             5,879

 

                  -  

 

            27,398

 

            27,302

Collection agreements

                700

 

             1,273

 

                  -  

 

                  -  

Prepaid expenses

            73,780

 

            65,668

 

            20,524

 

            20,942

GSF renegotiation

            12,476

 

            12,722

 

            20,253

 

            28,935

Receivables - Eletrobrás

          230,620

 

          213,552

 

                  -  

 

                  -  

Advances to employees

            32,341

 

            15,940

 

                  -  

 

                  -  

Leases

            15,792

 

            19,281

 

            45,900

 

            50,541

Others

          173,526

 

          153,764

 

            99,619

 

          104,815

(-) Allowance for doubtful accounts (note 6)

           (28,453)

 

           (27,992)

 

                  -  

 

                  -  

Total

          935,255

 

          797,181

 

          809,785

 

          766,253

 

46 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

Orders in progress: encompass costs and revenues related to ongoing decommissioning or disposal of intangible assets and the service costs related to expenditure on projects in progress under the Energy Efficiency and Research and Development programs. Upon the closing of the respective projects, the balances are amortized against the respective liability recognized in Other Payables (note 22).

 

Receivables – Eletrobras: refer to: (i) low-income subsidies amounting to  R$ 15,757 (R$ 17,239 at December 31, 2016), (ii) other tariff discounts granted to consumers amounting to R$ 211,186 (R$ 164,396 at December 31, 2016), and (iii) tariff discounts – court injunctions amounting to R$ 3,677 (R$ 31,917 at December 31, 2016) - note 25.3.1.

 

In the nine months period ended September 30, 2017, the subsidiaries offset the receivables relating to the Eletrobrás account with the payables relating to the Energy Development Account (CDE) (note 19) amounting to R$ 220,946, of which (i) R$ 88,352 based on an injunction obtained in May 2015, and (ii) R$ 132,595 authorized by Order No. 1,576/2016.

 

 

( 12 )   INVESTMENTS

 

 

 

Parent company

 

Consolidated

 

September 30, 2017

 

December 31, 2016

 

September 30, 2017

 

December 31, 2016

Permanent equity interests - equity method

             

By equity method of the subsidiary

      7,603,458

 

      5,811,894

 

      1,031,660

 

      1,482,533

Fair value of assets, net

         645,598

 

         692,632

 

           10,785

 

           11,219

Advances for future capital increases

                  -  

 

      1,355,520

 

                  -  

 

                  -  

Goodwill

             6,054

 

             6,054

 

                  -  

 

                  -  

Total

      8,255,110

 

      7,866,100

 

      1,042,445

 

      1,493,753

12.1    Permanent equity interests – equity method

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

 

       

September 30, 2017

 

September 30, 2017

 

December 31, 2016

 

Nine months 2017

 

Nine months 2016

Investment

 

Number of shares (thousand)

 

Total assets

 

Issued capital

 

Equity

 

Profit or loss for the period

 

Share of equity of investees

 

Share of profit (loss) of investees

CPFL Paulista

 

         880,653

 

      8,844,283

 

         923,423

 

      1,179,428

 

         118,256

 

      1,179,428

 

      1,063,400

 

           118,256

 

           235,118

CPFL Piratininga

 

     53,096,770

 

      3,811,166

 

         240,144

 

         403,105

 

           87,908

 

         403,105

 

         355,755

 

             87,908

 

           112,604

CPFL Santa Cruz

 

         371,772

 

         396,527

 

           74,862

 

         147,839

 

           22,219

 

         147,839

 

         140,520

 

             22,219

 

             17,209

CPFL Leste Paulista

 

         892,772

 

         174,048

 

           29,212

 

           54,725

 

             8,709

 

           54,725

 

           52,853

 

              8,709

 

              6,485

CPFL Sul Paulista

 

         454,958

 

         206,475

 

           28,492

 

           60,689

 

             9,852

 

           60,689

 

           58,895

 

              9,852

 

              5,846

CPFL Jaguari

 

         209,294

 

         140,632

 

           20,632

 

           31,940

 

             3,871

 

           31,940

 

           30,255

 

              3,871

 

              6,422

CPFL Mococa

 

         117,199

 

         116,045

 

           16,004

 

           34,996

 

             6,157

 

           34,996

 

           33,824

 

              6,157

 

              5,905

RGE

 

      1,019,790

 

      4,190,510

 

      1,223,350

 

      1,682,646

 

           91,850

 

      1,682,646

 

      1,614,320

 

             91,850

 

             79,132

CPFL Geração

 

   205,492,020

 

      5,946,536

 

      1,043,922

 

      2,374,109

 

         402,672

 

      2,374,109

 

      2,158,384

 

           402,672

 

           259,217

CPFL Jaguari Geração (*)

 

           40,108

 

           45,065

 

           40,108

 

           44,913

 

             9,209

 

           44,913

 

           45,099

 

              9,209

 

              3,498

CPFL Brasil

 

             2,999

 

      1,281,922

 

             2,999

 

           71,194

 

           48,853

 

           71,194

 

         109,054

 

             48,853

 

             71,355

CPFL Planalto (*)

 

               630

 

             3,584

 

               630

 

             3,365

 

             2,735

 

             3,365

 

             2,101

 

              2,735

 

              1,668

CPFL Serviços

 

      1,577,706

 

         245,359

 

         117,968

 

         106,285

 

          (11,683)

 

         106,285

 

           97,968

 

            (11,683)

 

             (5,328)

CPFL Atende (*)

 

           13,991

 

           25,415

 

           13,991

 

           18,202

 

             4,940

 

           18,202

 

           17,150

 

              4,940

 

              4,412

Nect (*)

 

             2,059

 

           28,791

 

             2,059

 

           15,275

 

           12,804

 

           15,275

 

           10,295

 

             12,804

 

             10,264

CPFL Total (*)

 

           19,005

 

           27,581

 

           19,005

 

           24,955

 

           15,195

 

           24,955

 

           27,570

 

             15,195

 

              8,837

CPFL Jaguariuna (*)

 

      1,702,676

 

      1,644,275

 

      1,702,676

 

      1,642,405

 

          (13,756)

 

      1,256,564

 

      1,256,161

 

             (4,507)

 

                  (87)

CPFL Telecom

 

           86,420

 

             2,255

 

           86,420

 

            (2,100)

 

          (13,844)

 

            (2,100)

 

          (19,302)

 

            (13,844)

 

            (19,278)

CPFL Centrais Geradoras (*)

 

           16,128

 

           16,721

 

           16,128

 

           16,290

 

               831

 

           16,290

 

           15,459

 

                 831

 

                (684)

CPFL Eficiência

 

           48,164

 

           97,953

 

           48,164

 

           56,635

 

            (1,199)

 

           56,635

 

           61,543

 

             (1,199)

 

              4,670

AUTHI (*)

 

             2,610

 

           28,372

 

             2,610

 

           20,302

 

           17,692

 

           20,302

 

           16,810

 

             17,692

 

             17,813

Subtotal - by subsidiary's equity

                     

      7,601,358

 

      7,148,112

 

           832,522

 

           825,078

Amortization of fair value adjustment of assets

                 

                  -  

 

                  -  

 

            (47,035)

 

            (47,035)

Total

                     

      7,601,358

 

      7,148,112

 

           785,487

 

           778,043

                                     

Investment

                     

      7,603,458

 

      5,811,894

       

Advances for future capital increases

                   

                  -  

 

      1,355,520

       

Allowance for equity investment losses

                 

            (2,100)

 

          (19,302)

       

 

(*) number of quotas

 

Fair value adjustments (value added) of net assets acquired in business combinations are classified in the parent’s statement of profit or loss in the group of Investments. In the parent company’s statement of profit or loss, the  amortization of the fair value adjustments (value added) of net assets of R$ 47,035 (R$ 47,035 in the nine months period ended September 30, 2016) is classified in line item “share of profit (loss) of investees”, in conformity with ICPC 09 (R2).

47 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

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

 

Investment

 

Investment at December 31, 2016

 

Capital increase /payment of capital

 

Share of profit (loss) of investees

 

Dividend and Interest on capital

 

Advances for future capital increases

 

Corporate restructuring

 

Investment at September 30, 2017

CPFL Paulista

 

       1,063,400

 

                  -  

 

          118,256

 

            (2,228)

 

                     -  

 

                     -  

 

          1,179,428

CPFL Piratininga

 

          355,755

 

                  -  

 

            87,908

 

           (40,557)

 

                     -  

 

                     -  

 

            403,105

CPFL Santa Cruz

 

          140,520

 

                  -  

 

            22,219

 

           (14,900)

 

                     -  

 

                     -  

 

            147,839

CPFL Leste Paulista

 

            52,853

 

                  -  

 

             8,709

 

            (6,837)

 

                     -  

 

                     -  

 

              54,725

CPFL Sul Paulista

 

            58,895

 

                  -  

 

             9,852

 

            (8,058)

 

                     -  

 

                     -  

 

              60,689

CPFL Jaguari

 

            30,255

 

                  -  

 

             3,871

 

            (2,186)

 

                     -  

 

                     -  

 

              31,940

CPFL Mococa

 

            33,824

 

                  -  

 

             6,157

 

            (4,986)

 

                     -  

 

                     -  

 

              34,996

RGE

 

       1,614,320

 

                  -  

 

            91,850

 

           (23,525)

 

                     -  

 

                     -  

 

          1,682,646

CPFL Geração

 

       2,158,384

 

                  -  

 

          402,672

 

         (186,947)

 

                     -  

 

                     -  

 

          2,374,109

CPFL Jaguari Geração

 

            45,099

 

                  -  

 

             9,209

 

            (9,395)

 

                     -  

 

                     -  

 

              44,913

CPFL Brasil

 

          109,054

 

                  -  

 

            48,853

 

           (81,802)

 

                     -  

 

               (4,911)

 

              71,194

CPFL Planalto

 

             2,101

 

                  -  

 

             2,735

 

            (1,471)

 

                     -  

 

                     -  

 

                3,365

CPFL Serviços

 

            97,968

 

            76,000

 

           (11,683)

 

                  -  

 

             (56,000)

 

                     -  

 

            106,285

CPFL Atende

 

            17,150

 

                  -  

 

             4,940

 

            (3,888)

 

                     -  

 

                     -  

 

              18,202

Nect

 

            10,295

 

                  -  

 

            12,804

 

            (7,824)

 

                     -  

 

                     -  

 

              15,275

CPFL Total

 

            27,570

 

                  -  

 

            15,195

 

           (17,810)

 

                     -  

 

                     -  

 

              24,955

CPFL Jaguariuna

 

       1,256,161

 

       1,299,520

 

            (4,507)

 

                  -  

 

         (1,299,520)

 

                4,911

 

          1,256,564

CPFL Telecom

 

           (19,302)

 

            31,000

 

           (13,844)

 

                  -  

 

                    45

 

                     -  

 

               (2,100)

CPFL Centrais Geradoras

 

            15,459

 

                  -  

 

                831

 

                  -  

 

                     -  

 

                     -  

 

              16,290

CPFL Eficiência

 

            61,543

 

                  -  

 

            (1,199)

 

            (3,708)

 

                     -  

 

                     -  

 

              56,635

AUTHI

 

            16,810

 

                  -  

 

            17,692

 

           (14,200)

 

                     -  

 

                     -  

 

              20,302

   

       7,148,112

 

       1,406,520

 

          832,522

 

         (430,321)

 

         (1,355,475)

 

                     -  

 

          7,601,358

 

In the consolidated, the investment balances refer to interests in joint ventures accounted for using the equity method:

 

Investments in joint ventures

 

September 30, 2017

 

December 31, 2016

 

Nine months 2017

 

Nine months 2016

 

 Share of equity

 

Share of profit (loss)

                 

Baesa

 

         188,189

 

         175,914

 

           12,275

 

             8,371

Enercan

 

         186,562

 

         562,701

 

           88,825

 

           84,074

Chapecoense

 

         430,485

 

         537,170

 

           94,282

 

           64,972

EPASA

 

         226,424

 

         206,749

 

           57,762

 

           43,962

Fair value adjustments of assets, net

 

           10,785

 

           11,219

 

               (435)

 

               (435)

   

       1,042,445

 

      1,493,753

 

         252,709

 

         200,944

 

12.2    Fair value adjustments and goodwill

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

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

 

12.3    Dividends and interest on capital receivable

At September 30, 2017 and December 31, 2016, the Company has the following amounts receivable from the subsidiaries below, relating to dividends and interest on capital:

 

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Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

 

Parent company

 

Dividends

 

Interest on capital

 

Total

Subsidiary

September 30, 2017

 

December 31, 2016

 

September 30, 2017

 

December 31, 2016

 

September 30, 2017

 

December 31, 2016

CPFL Piratininga

          52,722

 

          72,080

 

                 -  

 

                 -  

 

          52,722

 

          72,080

CPFL Santa Cruz

                 -  

 

                 -  

 

            5,503

 

                 -  

 

            5,503

 

                 -  

CPFL Leste Paulista

                 -  

 

                 -  

 

            2,030

 

                 -  

 

            2,030

 

                 -  

CPFL Sul Paulista

          14,034

 

            8,641

 

            4,251

 

            1,986

 

          18,285

 

          10,627

CPFL Jaguari

            8,301

 

            6,115

 

                 -  

 

                 -  

 

            8,301

 

            6,115

CPFL Mococa

            2,583

 

                 -  

 

            2,176

 

                 -  

 

            4,759

 

                 -  

RGE

          23,525

 

          24,672

 

                 -  

 

                 -  

 

          23,525

 

          24,672

CPFL Geração

                 -  

 

        396,086

 

                 -  

 

                 -  

 

                 -  

 

        396,086

CPFL Jaguari Geração

                 -  

 

            1,664

 

                 -  

 

                 -  

 

                 -  

 

            1,664

CPFL Brasil

          72,025

 

          86,020

 

            2,361

 

            1,650

 

          74,385

 

          87,671

CPFL Atende

                 -  

 

            1,953

 

              620

 

              554

 

              620

 

            2,507

Nect

            3,324

 

            5,600

 

                 -  

 

                 -  

 

            3,324

 

            5,600

CPFL Eficiência

          12,195

 

            9,565

 

          17,404

 

          16,325

 

          29,599

 

          25,891

Authi

                 -  

 

          10,064

 

                 -  

 

                 -  

 

                 -  

 

          10,064

 

        188,707

 

        622,463

 

          34,345

 

          20,516

 

        223,052

 

        642,978

 

 

The consolidated balance includes dividends and interest on capital receivable amounting to R$ 106,237 at September 30, 2017 (R$ 73,328 at December 31, 2016) related basically to joint ventures.

 

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

At December 31, 2016

 

         263,719

 

      2,060,963

 

           77,966

 

      2,402,648

Equity interest and voting capital

 

35.00%

 

48.40%

 

40.07%

   
                 

Equity attributable to noncontrolling interests

 

           29,882

 

          (12,130)

 

             6,566

 

           24,318

Dividends

 

                  -  

 

            (8,722)

 

            (8,766)

 

          (17,489)

Capital increase

 

                  -  

 

                 13

 

                  -  

 

                 13

Other movements

 

                  -  

 

                  -  

 

                (66)

 

                (66)

At September 30, 2017

 

         293,601

 

      2,040,123

 

           75,701

 

      2,409,425

Equity Interests and voting capital

 

35.00%

 

48.40%

 

40.07%

   

 

12.4.2    Summarized financial information on subsidiaries that have noncontrolling interests

The summarized financial information on subsidiaries that have noncontrolling interests at September 30, 2017 and December 31, 2016 and the nine months periods ended September 30, 2017 and 2016 is as follows:

 

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Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

   

September 30, 2017

 

December 31, 2016

   

CERAN

 

CPFL Renováveis

 

Paulista Lajeado

 

CERAN

 

CPFL Renováveis

 

Paulista Lajeado

Current assets

 

         375,173

 

          1,580,011

 

           32,349

 

         288,538

 

      1,398,797

 

           39,429

Cash and cash equivalents

 

         325,686

 

             945,248

 

           14,694

 

         238,241

 

         908,982

 

           24,688

Noncurrent assets

 

         890,159

 

         11,256,360

 

         121,255

 

         927,948

 

     11,066,086

 

         122,991

                         

Current liabilities

 

         133,199

 

          1,901,163

 

           38,775

 

         121,646

 

      1,313,466

 

           10,799

Borrowings and debentures

 

           59,641

 

          1,203,215

 

           35,153

 

           60,162

 

         889,981

 

               324

Other financial liabilities

 

           27,255

 

             207,037

 

               551

 

           20,800

 

           85,523

 

             1,056

Noncurrent liabilities

 

         293,273

 

          6,537,707

 

               255

 

         341,356

 

      6,713,610

 

           36,404

Borrowings and debentures

 

         211,120

 

          5,373,901

 

                  -  

 

         254,732

 

      5,517,890

 

           36,167

Other financial liabilities

 

           82,153

 

                      -  

 

                  -  

 

           86,624

 

               633

 

                  -  

Equity

 

         838,861

 

          4,397,501

 

         114,575

 

         753,484

 

      4,437,807

 

         115,217

  Equity attributable to owners of the Company

 

         838,861

 

          4,286,866

 

         114,575

 

         753,484

 

      4,324,589

 

         115,217

  Equity attributable to noncontrolling interests

 

                  -  

 

             110,635

 

                  -  

 

                  -  

 

         113,218

 

                  -  

                         
   

Nine months 2017

 

Nine months 2016

   

CERAN

 

CPFL Renováveis

 

Paulista Lajeado

 

CERAN

 

CPFL Renováveis

 

Paulista Lajeado

Net operating revenue

 

         237,675

 

          1,367,919

 

           29,669

 

         223,603

 

      1,144,731

 

           22,840

Operational costs and expenses

 

          (71,132)

 

            (500,660)

 

          (11,420)

 

          (43,106)

 

        (421,107)

 

          (20,958)

Depreciation and amortization

 

          (33,873)

 

            (461,530)

 

                  (3)

 

          (33,995)

 

        (406,679)

 

                  (2)

Interest income

 

           24,407

 

               99,623

 

             1,750

 

           20,459

 

           81,576

 

             2,071

Interest expense

 

          (26,901)

 

            (432,402)

 

            (1,003)

 

          (27,936)

 

        (435,558)

 

            (1,093)

Income tax expense

 

          (43,547)

 

              (50,044)

 

            (1,639)

 

          (44,732)

 

          (39,837)

 

               254

Profit (loss) for the year

 

           85,376

 

              (31,597)

 

           16,387

 

           86,558

 

        (117,461)

 

             6,112

 Attributable to owners of the Company

 

           85,376

 

              (37,723)

 

           16,387

 

           86,558

 

        (123,705)

 

             6,112

  Attributable to noncontrolling interests

 

                  -  

 

                 6,126

 

                  -  

 

                  -  

 

             6,244

 

                  -  

 

12.4.3    Joint ventures

 

The summarized financial information on joint ventures at September 30, 2017 and December 31, 2016 and the nine months periods ended September 30, 2017 and 2016 is as follows:  

 

   

September 30, 2017

 

December 31, 2016

   

Enercan

 

Baesa

 

Chapecoense

 

Epasa

 

Enercan

 

Baesa

 

Chapecoense

 

Epasa

Current assets

 

         275,965

 

         100,281

 

         340,463

 

         312,585

 

         405,874

 

           54,703

 

         577,296

 

         257,082

Cash and cash equivalents

 

         151,054

 

           10,762

 

         125,428

 

           21,695

 

         288,956

 

           18,946

 

         280,083

 

           85,709

Noncurrent assets

 

      1,131,530

 

      1,071,461

 

      2,777,283

 

         537,040

 

      1,174,869

 

      1,117,120

 

      2,892,371

 

         562,462

                                 

Current liabilities

 

         434,581

 

         134,969

 

         356,335

 

         182,733

 

         196,760

 

         116,192

 

         391,402

 

         172,401

Borrowings and debentures

 

         127,943

 

           82,363

 

         142,894

 

           34,222

 

           87,560

 

           87,032

 

         137,753

 

           35,555

Other financial liabilities

 

             5,140

 

           21,884

 

           75,885

 

         103,522

 

             7,848

 

           24,119

 

           78,372

 

           62,762

Noncurrent liabilities

 

         590,011

 

         284,196

 

      1,917,323

 

         242,427

 

         229,085

 

         352,142

 

      2,024,989

 

         259,559

Borrowings and debentures

 

         510,753

 

             1,936

 

      1,198,154

 

         194,877

 

         153,020

 

           63,196

 

      1,292,239

 

         218,891

Other financial liabilities

 

           25,115

 

         265,501

 

         715,946

 

           18,816

 

           26,254

 

         276,600

 

         730,494

 

           28,686

Equity

 

         382,902

 

         752,578

 

         844,089

 

         424,465

 

      1,154,897

 

         703,489

 

      1,053,275

 

         387,584

                                 
   

Nine months 2017

 

Nine months 2016

   

Enercan

 

Baesa

 

Chapecoense

 

Epasa

 

Enercan

 

Baesa

 

Chapecoense

 

Epasa

Net operating revenue

 

         434,341

 

         242,186

 

         614,430

 

         531,187

 

         419,061

 

         181,441

 

         579,724

 

         367,658

Operational costs and expenses

 

        (133,737)

 

        (114,797)

 

        (122,190)

 

        (358,318)

 

        (103,861)

 

          (50,212)

 

        (118,546)

 

        (220,713)

Depreciation and amortization

 

          (39,580)

 

          (37,994)

 

          (95,131)

 

          (24,426)

 

          (40,349)

 

          (38,776)

 

          (96,030)

 

          (24,554)

Interest income

 

           32,116

 

             4,067

 

           21,012

 

             5,176

 

           22,477

 

             7,695

 

           24,695

 

             8,460

Interest expense

 

          (16,413)

 

          (11,118)

 

          (87,137)

 

          (14,711)

 

          (27,360)

 

          (16,233)

 

          (94,599)

 

          (17,815)

Income tax and social contribution expenses

 

          (94,230)

 

          (26,925)

 

        (100,714)

 

          (24,625)

 

          (88,951)

 

          (17,387)

 

          (64,447)

 

          (21,081)

Profit (loss) for the period

 

         182,306

 

           49,089

 

         184,866

 

         108,282

 

         172,554

 

           33,478

 

         127,396

 

           82,418

Equity Interests and voting capital

 

48.72%

 

25.01%

 

51.00%

 

53.34%

 

48.72%

 

25.01%

 

51.00%

 

53.34%

 

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

 

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

12.4.4    Joint operation

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

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Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

12.5     Business combination - Acquisition of AES Sul Distribuidora Gaúcha de Energia S.A.  (“AES Sul”)

On June 16, 2016, the Company disclosed in a Material Fact that it had entered into an agreement for the acquisition of 100% of the shares of AES Sul Distribuidora Gaúcha de Energia S.A. (“AES Sul”), currently RGE Sul, through its wholly-owned subsidiary CPFL Jaguariúna Participações Ltda., shares until then held by AES Guaíba II Empreendimentos Ltda. (“seller”), indirect wholly-owned subsidiary of The AES Corporation.

On August 5, 2016, the transaction was approved by CADE (Brazilian antitrust agency) and, on September 9, 2016, authorized by ANEEL (Brazilian Electricity Regulatory Agency).

The acquisition was completed on October 31, 2016 (“acquisition date”), after all the conditions precedent of the transaction were met, date in which the control of RGE Sul was taken over by CPFL Jaguariúna, the ownership of the shares was transferred and the payment was made.  This acquisition resulted in a business combination in accordance with CPC 15 (R1) – “Combinação de Negócios” and IFRS 3 (R) – Business Combination since CPFL Jaguariúna started holding the control of RGE Sul.

The consideration initially transferred was R$ 1,698,455, paid in cash, in a lump sum, at the acquisition date. This consideration was subsequently adjusted for changes in working capital and net debt of RGE Sul, occurred in the period between December 31, 2015 and the acquisition date, as per the amendment to the agreement. The final value of the consideration, considering the price adjustment, was R$1,591,839.

RGE Sul is a publicly traded company engaged in providing public electricity distribution services in any forms, and these activities are regulated by ANEEL, linked to the Ministry of Mines and Energy. Additionally, RGE Sul is authorized to participate in programs that aim at other forms of energy, technologies and services, including operation of activities derived directly or indirectly from the use of assets, rights and technologies owned by it.

Its administrative headquarters are located at Avenida São Borja, 2801, Bairro Fazenda São Borja, São Leopoldo, State of Rio Grande do Sul.

RGE Sul holds the concession for operation of its activities for a thirty-year period, up to November 5, 2027, its concession area comprises 118 municipalities of the State of Rio Grande do Sul, located between the metropolitan region of Porto Alegre and the borders with Uruguay and Argentina, serving approximately 1.3 million consumers (information not reviewed by the independent auditors).

The acquisition of RGE Sul is in line with the Company’s growth strategy, especially in the distribution segment, with potential gains of scale for its operations. The Company also expects to obtain important synergies relating to the concession area of RGE Sul since another important distributor of the Group (RGE) holds concession in the state of Rio Grande do Sul.

 

Additional information to the acquisition of RGE Sul

 

a)     Consideration

 

     

RGE Sul

Consideration paid, net

 

October 31, 2016

 

Consideration directly transferred to prior shareholders

 

1,698,455

 

Reimbursements due to adjustments related to agreement clauses

 

            (106,616)

     

1,591,839

 

b)    Assets acquired and liabilities assumed at the acquisition date

The total amount paid on the transaction was allocated at the acquisition date to the assets acquired and liabilities assumed at fair values, including intangible assets relating to the concession right. Accordingly, as the total amount paid was allocated to assets identified and liabilities assumed, no residual value was allocated as goodwill on this transaction.

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Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

The allocation of the amount paid for assets and liabilities acquired was made with amounts provisionally calculated for the financial statements as at December 31, 2016, based on analyses conducted by Management itself at the time these financial statements were prepared. The final fair values presented were pending confirmation until the completion of the economic and financial appraisal report prepared by independent appraiser, completed on October 30, 2017.

As a consequence, certain reclassifications were made to the amounts as at December 31, 2016, relating to the (i) decrease in the fair value of the concession infrastructure’s intangible asset; (ii) completion of the fair value allocation and alignment of the criteria on the provision for tax, civil and labor risks; (iii) increase in the amount of trade receivables; (iv) decrease in the concession’s financial asset; (v) decrease in the intangible asset relating to the operation right, as a consequence of the revision of the assumptions used to determine the value of tangible and intangible assets; and (vi) recording of deferred income tax and social contribution balances on certain adjustments. These reclassifications are within the measurement period, pursuant to CPC 15 / IFRS 3, and were considered immaterial for purposes of restatement of the 2016 financial statements.

The allocation of the purchase price paid to the fair values of the assets and liabilities acquired is as follows:

 

   

October 31, 2016

 

October 31, 2016

   

Consolidated

 

Consolidated

   

(preliminary)

 

(final)

Current assets

       

Cash and cash equivalents

 

               95,164

 

               95,164

Consumers, concessionaries and licensees

 

             580,945

 

             580,945

Other current assets

 

               89,548

 

               89,548

         

Noncurrent assets

       

Consumers, concessionaries and licensees

 

               54,111

 

               79,501

Deferred tax assets

 

             204,176

 

             310,741

Concession financial asset

 

             876,281

 

             863,943

Intangible assets - Distribution infrastructure

 

           1,456,472

 

           1,444,401

Intangible acquired in this business combination

 

             413,796

 

             398,739

Other noncurrent assets

 

             147,784

 

             155,508

         
         

Current liabilities

       

Trade payables

 

            (479,031)

 

            (479,031)

Debentures and borrowings

 

              (24,672)

 

              (24,672)

Taxes, fees and contributions

 

              (65,198)

 

              (65,198)

Sector financial liability

 

              (29,246)

 

              (29,246)

Regulatory charges

 

              (60,787)

 

              (60,787)

Other current liabilities

 

            (114,552)

 

            (114,552)

         

Noncurrent liabilities

       

Debentures and borrowings

 

          (1,131,949)

 

          (1,131,949)

Sector financial liability

 

              (64,939)

 

              (64,939)

Provision for tax, civil and labor risks

 

            (223,383)

 

            (323,595)

Other noncurrent liabilities

 

            (132,682)

 

            (132,682)

Net assets acquired

 

           1,591,839

 

           1,591,839

 

Goodwill arising on acquisition

   
     

Consideration paid, net

 

      1,591,839

(+) Non controlling shareholders interest

 

                   -

(-) Fair value of identifiable net assets acquired

 

      1,591,839

Goodwill

 

                   -

 

The fair values presented above were finalized are in accordance with the economic and financial appraisal report prepared by the independent expert.

The fair values of the concession’s financial asset and the distribution infrastructure’s intangible asset were calculated based on the independent appraiser’s report, considering the same assumptions adopted at the time of preparation of the report for Periodic Tariff Review purposes (Regulatory Remuneration Basis - “BRR”).

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Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

c) Contingent consideration

The share purchase agreement does not contain any clauses relating to the contingent consideration to be paid to the seller.

d) Indemnification assets

The agreement for purchase of 100% of the shares of RGE Sul establishes that CPFL Jaguariúna may be indemnified, up to the limit of 15% of the total amount paid, if any losses are incurred in the future, contingent upon the compliance with specific clauses, derived from matters originated in the seller or in any of its subsidiaries established in the share purchase agreement. There are also specific clauses for two lawsuits (regulatory and environmental) in which the seller undertakes to indemnify fully CPFL Jaguariúna in the event of cash outflows relating to these lawsuits, and CPFL Jaguariúna undertakes to pass on to the seller any cash flows relating to these lawsuits that may be received in the future, in order to neutralize any effect on these two matters in particular.

The recognized final fair value of the indemnification asset is R$ 41,974, relating to the environmental lawsuit (see item “e” below). This indemnification asset was recognized in the same amount of the fair value attributed to this contingent liability.

No indemnification asset was recognized for the regulatory lawsuit for which there is a specific indemnification clause since no contingent liability relating to this lawsuit was recognized at the acquisition date.

e) Contingent liabilities recognized

We present below the final contingent liabilities recognized in the amount of R$150,065:

   

RGE Sul

   

October 31, 2016

Labor lawsuits (i)

 

                11,429

Civil lawsuits (i)

 

                83,575

Regulatory lawsuits (i)

 

                 5,850

Environmental lawsuits (ii)

 

                41,974

Tax lawsuits (i)

 

                 7,236

   

              150,065

Provisions recognized in the subsidiary

 

              173,530

Provisions for tax, civil and labor risks

 

              323,595

 

i.    These amounts represent the fair values of the labor, civil, regulatory and tax lawsuits for which the likelihood of loss attributed at the acquisition date is “possible” or “remote”. Considering that the settlement of these lawsuits depends on third parties, either at the judicial or administrative level, it is not possible to estimate a schedule for the occurrence of any cash outflows associated with these contingent liabilities. No indemnification asset was recognized for these contingent liabilities.

 

ii.   Refers to the fair value attributed to a class action lawsuit for which the likelihood of loss attributed by Management, together with its legal counsel, is “possible” at the acquisition date. This class action lawsuit seeks compensation for environmental damages occurred in a woodworking and pole manufacture unit that was operated, between 1997 and 2005, by RGE Sul together with its associate at that time AES Florestal. Until 1997, this unit was operated by the former concessionaire, Companhia Estadual de Energia Elétrica (CEEE). An indemnification asset in the same amount was recognized at the acquisition date.

 

f) Receivables acquired

The fair value of the receivables acquired is R$ 660,446. The gross contractual amount of the receivables is R$ 703,672 and based on the independent expert best estimates R$ 43,226 are not expected to be received and represent therefore the portion that is expected to represent an impairment loss.

 

g) Net cash outflow on the acquisition

53 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

Consideration paid, net

 

1,591,839

(-) Cash and cash equivalent balances acquired

 

              (95,164)

Cash and cash equivalents transferred, net

 

1,496,675

 

h) Financial information on the acquiree

i.              On the net operating revenue and profit of the subsidiary acquired included in the consolidated financial statements in 2017:

Considering that the acquisition date was October 31, 2016, the consolidated interim financial information as at September 30, 2017 comprises fully the revenue and the result of RGE Sul for the period. In 2016, there is no amount recognized in the consolidated interim financial information relating to the activities of RGE Sul.

ii.            Consolidated financial information on the net operating revenue and profit for 2016 had the acquisition ocurred on January 1, 2016:

 

 

Operational revenue, net

 

Profit or loss, net

 

Jan. to Sep. 2016

 

Jan. to Sep. 2016

CPFL Energia consolidated

13,600,307

 

741,854

Pro-forma adjustments (*)

2,110,992

 

               (51,036)

Total

15,711,299

 

690,818

 

(*) The pro forma adjustments in the net operating revenue consider the addition of the subsidiary’s net operating revenue for the period in which it was not a subsidiary and, consequently, was not consolidated by the Company. The pro forma adjustments to profit for the period consider: (i) addition of the subsidiary’s result for the period in which it was not consolidated by the Company; (ii) inclusion of the amortization of the intangible asset acquired on the business combination and the amortization of the fair value of the distribution infrastructure’s intangible asset, had the acquisition occurred on January 1, 2016.

 

54 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

( 13 )      PROPERTY, PLANT AND EQUIPMENT

 

 

 

 Consolidated

 

Land

 

Reservoirs, dams and  water mains

 

Buildings, construction and improvements

 

Machinery and equipment

 

Vehicles

 

Furniture and fittings

 

In progress

 

Total

At December 31, 2016

         176,145

 

        1,394,162

 

        1,153,220

 

        6,655,391

 

           76,217

 

             7,562

 

         250,302

 

      9,712,998

Historical cost

         206,330

 

        2,060,191

 

        1,652,934

 

        9,066,408

 

         106,920

 

           21,507

 

         250,302

 

     13,364,592

Accumulated depreciation

          (30,185)

 

         (666,028)

 

         (499,714)

 

       (2,411,017)

 

          (30,704)

 

          (13,945)

 

                  -  

 

     (3,651,594)

                               

Additions

                  -  

 

                   -  

 

                   -  

 

                 722

 

                  -  

 

                  -  

 

         637,084

 

         637,806

Disposals

                (22)

 

                   -  

 

                   -  

 

            (16,104)

 

              (915)

 

                (44)

 

            (5,878)

 

          (22,963)

Transfers

             2,905

 

                 361

 

          107,367

 

           568,029

 

           17,585

 

               645

 

        (696,892)

 

                  -  

Transfers from/to other assets - cost

                  -  

 

              9,039

 

                (808)

 

            (66,973)

 

              (139)

 

                 28

 

           11,067

 

          (47,786)

Depreciation

            (6,060)

 

           (59,464)

 

           (49,775)

 

          (317,732)

 

          (12,659)

 

            (1,093)

 

                  -  

 

        (446,783)

Write-off of depreciation

                   2

 

                   -  

 

                   -  

 

              3,631

 

               512

 

                  -  

 

                  -  

 

             4,145

Transfers from/to other assets - depreciation

                   6

 

             (4,047)

 

              1,466

 

             11,067

 

                   1

 

                 36

 

                  -  

 

             8,529

Business combination

                  -  

 

                   -  

 

                   -  

 

                   -  

 

            (4,800)

 

                  -  

 

                  -  

 

            (4,800)

                               

At September 30, 2017

         172,976

 

        1,340,050

 

        1,211,470

 

        6,838,031

 

           75,803

 

             7,136

 

         195,683

 

      9,841,148

Historical cost

         209,213

 

        2,069,589

 

        1,759,493

 

        9,552,014

 

         118,146

 

           22,137

 

         195,683

 

     13,926,275

Accumulated depreciation

          (36,237)

 

         (729,539)

 

         (548,023)

 

       (2,713,983)

 

          (42,344)

 

          (15,000)

 

                  -  

 

     (4,085,127)

                               

Average depreciation rate

3.86%

 

3.85%

 

3.81%

 

4.46%

 

13.06%

 

8.78%

       

 

The balance of construction in progress, in the consolidated balances, refers mainly to works in progress of operating and/or under development subsidiaries, especially for the projects of CPFL Renováveis, which has construction in progress of R$ 152,027 at September 30, 2017 (R$ 182,181 at December 31, 2016).

In conformity with CPC 20 (R1) and IAS 23, the interest on borrowings taken by subsidiaries to finance the works is capitalized during the construction phase. In the consolidated balances, in the nine months period ended September 30, 2017, R$ 27,755 were capitalized at the rate of 9.99% p.a. (R$ 43,568, at the rate of 11.53% p.a., in the nine months period ended September 30, 2016) (note 28).

In the consolidated balances, the depreciation amounts are recognized in the statement of profit or loss in line item “Depreciation and amortization” (note 26).

The balances disclosed in the "Business Combinations" line refer to the complementary amounts related to the acquisition of RGE Sul, which final recognition occurred on September 30, 2017, according to note 12.5.

 

55 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

( 14 )   INTANGIBLE ASSETS

 

 

 

Consolidated

 

Goodwill

 

Concession right

   

Acquired in business combinations

 

   Distribution infrastructure - operational

 

   Distribution infrastructure - in progress

 

Public utilities

 

Other intangible assets

 

Total

At December 31, 2016

             6,115

 

      4,466,516

 

      5,550,502

 

         666,008

 

           27,324

 

           59,147

 

     10,775,613

Historical cost

             6,152

 

      7,602,941

 

     11,987,109

 

         666,008

 

           35,840

 

         183,138

 

     20,481,188

Accumulated Amortization

                (37)

 

     (3,136,425)

 

     (6,436,607)

 

                  -  

 

            (8,516)

 

        (123,990)

 

     (9,705,576)

                           

Additions

                  -  

 

                  -  

 

                  -  

 

      1,275,607

 

                  -  

 

             4,965

 

      1,280,572

Amortization

                  -  

 

        (215,526)

 

        (475,411)

 

                  -  

 

            (1,065)

 

            (7,229)

 

        (699,230)

Transfer - intangible assets

                  -  

 

                  -  

 

         684,011

 

        (684,011)

 

                  -  

 

                  -  

 

                  -  

Transfer - financial asset

                  -  

 

                  -  

 

            (5,071)

 

        (804,873)

 

                  -  

 

                  -  

 

        (809,944)

Disposal and transfer - other assets

                  -  

 

                  -  

 

          (71,142)

 

           48,060

 

                  -  

 

             1,558

 

          (21,525)

Write-off of assets

                  -  

 

          (16,245)

 

                  -  

 

                  -  

 

                  -  

 

                  -  

 

          (16,245)

Business combination

                  -  

 

          (15,057)

 

            (7,108)

 

                  -  

 

                  -  

 

                  -  

 

          (22,165)

                           

At September 30, 2017

             6,115

 

      4,219,689

 

      5,675,782

 

         500,791

 

           26,259

 

           58,441

 

     10,487,077

Historical cost

             6,152

 

      7,571,639

 

     12,455,595

 

         500,791

 

           35,840

 

         189,123

 

     20,759,140

Accumulated Amortization

                (37)

 

     (3,351,951)

 

     (6,779,813)

 

                  -  

 

            (9,581)

 

        (130,681)

 

    (10,272,063)

 

 

In conformity with CPC 20 (R1) and IAS 23, the interest on borrowings taken by subsidiaries is capitalized for qualifying intangible assets. In the consolidated, for the nine months period ended September 30, 2017, R$ 14,460 were capitalized at a rate of 8.27% p.a. (R$ 8,864 at a rate of 7.59% p.a. n the nine months period ended September 30, 2016).

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 26).

The balances disclosed in the "Business Combinations" line refer to the complementary amounts related to the acquisition of RGE Sul, which final recognition occurred on September 30, 2017, according to note 12.5.

 

14.1 Intangible asset acquired in business combinations

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

 

56 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

 

Consolidated

 

September 30, 2017

 

December 31, 2016

 

Annual amortization rate

 

Historic cost

 

Accumulated amortization

 

Net value

 

Net value

 

2017

 

2016

Intangible asset - acquired in business combinations

                     

Intangible asset acquired, not merged

                     

Parent company

                     

CPFL Paulista

       304,861

 

       (204,507)

 

        100,355

 

          107,843

 

3.28%

 

3.28%

CPFL Piratininga

         39,065

 

         (24,717)

 

          14,348

 

            15,319

 

3.31%

 

3.31%

RGE

           3,150

 

           (1,793)

 

            1,357

 

              1,457

 

4.24%

 

4.24%

CPFL Geração

         54,555

 

         (35,027)

 

          19,528

 

            20,912

 

3.38%

 

3.38%

CPFL Jaguari Geração

           7,896

 

           (3,784)

 

            4,112

 

              4,314

 

3.41%

 

3.41%

 

       409,527

 

       (269,828)

 

        139,699

 

          149,845

       
                       

Subsidiaries

                     

CPFL Renováveis

     3,700,848

 

       (838,371)

 

      2,862,477

 

        2,995,028

 

4.78%

 

5.39%

RGE Sul

         85,999

 

           (7,168)

 

          78,831

 

            99,524

 

9.09%

 

9.09%

RGE

              618

 

              (178)

 

               440

 

                 473

 

7.06%

 

7.06%

 

     3,787,465

 

       (845,717)

 

      2,941,748

 

        3,095,025

       
                       

Subtotal

     4,196,992

 

     (1,115,545)

 

      3,081,446

 

        3,244,869

       
                       

Intangible asset acquired and merged – Deductible

                     

Subsidiaries

                     

RGE

     1,120,266

 

       (880,062)

 

        240,204

 

          257,924

 

2.11%

 

2.11%

RGE Sul

       312,741

 

         (26,080)

 

        286,661

 

          307,982

 

9.09%

 

9.09%

CPFL Geração

       426,450

 

       (320,972)

 

        105,478

 

          112,953

 

2.34%

 

2.34%

                       

Subtotal

     1,859,457

 

     (1,227,114)

 

        632,343

 

          678,859

       
                       

Intangible asset acquired and merged – Reassessed

                     

Parent company

                     

CPFL Paulista

     1,074,026

 

       (746,614)

 

        327,412

 

          351,565

 

3.00%

 

3.00%

CPFL Piratininga

       115,762

 

         (73,243)

 

          42,518

 

            45,395

 

3.31%

 

3.31%

RGE

       310,128

 

       (181,172)

 

        128,956

 

          138,469

 

4.09%

 

4.09%

CPFL Jaguari Geração

         15,275

 

           (8,262)

 

            7,013

 

              7,358

 

3.01%

 

3.01%

Subtotal

     1,515,190

 

     (1,009,292)

 

        505,899

 

          542,787

       
                       

Total

     7,571,639

 

     (3,351,951)

 

      4,219,689

 

        4,466,516

       

 

 

( 15 )   TRADE PAYABLES

 

 

 

 

Consolidated

   

September 30, 2017

 

December 31, 2016

Current

       

System service charges

 

                 73

 

           59,935

Energy purchased

 

      3,318,251

 

      1,868,950

Electricity network usage charges

 

         218,283

 

         121,884

Materials and services

 

         468,960

 

         545,468

Free energy

 

         142,493

 

         131,893

Total

 

      4,148,059

 

      2,728,130

         

Noncurrent

       

Energy purchased

 

         126,394

 

         129,148

Materials and services

 

                  -  

 

               633

Total

 

         126,394

 

         129,781

 

 

57 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

( 16 )   BORROWINGS

 

 

   

Consolidated

  

Consolidated

   

September 30, 2017

 

December 31, 2016

   

Current

 

Noncurrent

 

Noncurrent

 

Total

 

Current

 

Noncurrent

 

Current

 

Noncurrent

 

Total

   

Interest

 

Principal

   

Interest

 

Principal

 

Measured at cost

                                   

Local currency

                                   

Investment

 

        16,427

 

      745,081

 

   4,330,205

 

   5,091,713

 

        17,827

 

      842,015

 

              -  

 

   4,606,227

 

   5,466,069

Rental assets

 

              13

 

         1,178

 

         3,091

 

         4,283

 

              38

 

         1,034

 

              -  

 

         3,955

 

         5,028

Financial Institutions

 

      190,246

 

      632,249

 

   1,002,656

 

   1,825,152

 

        89,387

 

      255,355

 

      144,709

 

   1,517,251

 

   2,006,702

Others

 

              38

 

        22,826

 

        30,990

 

        53,854

 

              50

 

        59,756

 

              -  

 

        42,370

 

      102,176

Total at cost

 

      206,724

 

   1,401,335

 

   5,366,943

 

   6,975,002

 

      107,303

 

   1,158,159

 

      144,709

 

   6,169,803

 

   7,579,974

                                     

Measured at fair value

                                   

Foreign currency

                                   

Financial Institutions

 

        16,509

 

   2,143,305

 

   2,646,635

 

   4,806,449

 

        22,062

 

      595,101

 

              -  

 

   4,922,463

 

   5,539,626

Mark to market

 

              -  

 

         4,235

 

        19,727

 

        23,963

 

              -  

 

        (1,764)

 

              -  

 

       (35,651)

 

       (37,415)

Total at fair value

 

        16,509

 

   2,147,540

 

   2,666,363

 

   4,830,412

 

        22,062

 

      593,337

 

              -  

 

   4,886,812

 

   5,502,211

                                     

Borrowing costs (*)

 

              -  

 

        (4,814)

 

       (27,047)

 

       (31,861)

 

              -  

 

        (5,213)

 

              -  

 

       (32,930)

 

       (38,143)

                                     

Total

 

      223,233

 

   3,544,062

 

   8,006,258

 

 11,773,552

 

      129,364

 

   1,746,284

 

      144,709

 

 11,023,685

 

 13,044,041

 

 

58 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

   

Consolidated

         

Measured at amortized cost

 

September
30, 2017

 

December 31, 2016

 

Annual interest

 

Amortization

 

Collateral

Local currency

                   

Investment

                   

CPFL Paulista

                   

FINEM V

 

         11,501

 

         37,078

 

TJLP + 2.12% to 3.3%  (c)

 

72 monthly installments from February 2012

 

CPFL Energia guarantee and receivables

FINEM V

 

           2,328

 

           3,638

 

Fixed rate 8%  (c)

 

90 monthly installments from August 2011

 

CPFL Energia guarantee and receivables

FINEM V

 

         25,167

 

         30,835

 

Fixed rate 5.5%   (b)

 

96 monthly installments from February 2013

 

CPFL Energia guarantee and receivables

FINEM VI

 

        113,403

 

        149,984

 

TJLP + 2.06% to 3.08%  (e) (f)

 

72 monthly installments from January 2014

 

CPFL Energia guarantee and receivables

FINEM VI

 

           7,777

 

           8,907

 

Fixed rate 2.5%  (a)

 

114 monthly installments from June 2013

 

CPFL Energia guarantee and receivables

FINEM VI

 

        142,681

 

        163,404

 

Fixed rate 2.5%  (a)

 

96 monthly installments from December 2014

 

CPFL Energia guarantee and receivables

FINEM VII

 

         51,810

 

         57,798

 

Fixed rate 6%  (b)

 

96 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINEM VII

 

         68,023

 

         73,435

 

SELIC + 2.62% to 2.66%  (h)

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINEM VII

 

        114,602

 

        132,622

 

TJLP + 2.12% to 2.66%  (c) (d)

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINAME

 

         19,015

 

         25,356

 

Fixed rate 4.5%

 

96 monthly installments from January 2012

 

CPFL Energia guarantee

CPFL Piratininga

                   

FINEM IV

 

           6,195

 

         19,970

 

TJLP + 2.12% to 3.3%  (c)

 

72 monthly installments from February 2012

 

CPFL Energia guarantee and receivables

FINEM IV

 

              751

 

           1,173

 

Fixed rate 8%  (c)

 

90 monthly installments from August 2011

 

CPFL Energia guarantee and receivables

FINEM IV

 

         13,088

 

         16,035

 

Fixed rate 5.5%   (b)

 

96 monthly installments from February 2013

 

CPFL Energia guarantee and receivables

FINEM V

 

         33,145

 

         43,836

 

TJLP + 2.06% to 3.08%  (e) (f)

 

72 monthly installments from January 2014

 

CPFL Energia guarantee and receivables

FINEM V

 

           2,043

 

           2,339

 

Fixed rate 2.5%  (a)

 

114 monthly installments from June 2013

 

CPFL Energia guarantee and receivables

FINEM V

 

         35,507

 

         40,664

 

Fixed rate 2.5%  (a)

 

96 monthly installments from December 2014

 

CPFL Energia guarantee and receivables

FINEM VI

 

         38,553

 

         41,620

 

SELIC + 2.62% to 2.66%  (h)

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINEM VI

 

         56,840

 

         65,778

 

TJLP + 2.12% to 2.66%  (c) (d)

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINEM VI

 

         25,277

 

         28,198

 

Fixed rate 6%  (b)

 

96 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINAME

 

           9,016

 

         12,023

 

Fixed rate 4.5%

 

96 monthly installments from January 2012

 

CPFL Energia guarantee

RGE Sul

                   

Finep

 

           4,723

 

           7,757

 

Fixed rate 5%

 

81 monthly installments from September 2013

 

Bank guarantee

Finep

 

           6,054

 

           7,562

 

TJLP

 

73 monthly installments from May 2016

 

Bank guarantee

RGE

                   

FINEM V

 

           6,962

 

         22,444

 

TJLP + 2.12% to 3.3%  (c)

 

72 monthly installments from February 2012

 

CPFL Energia guarantee and receivables

FINEM V

 

           9,654

 

         11,828

 

Fixed rate 5.5%   (b)

 

96 monthly installments from February 2013

 

CPFL Energia guarantee and receivables

FINEM VI

 

         60,584

 

         80,126

 

TJLP + 2.06% to 3.08%  (e) (f)

 

72 monthly installments from January 2014

 

CPFL Energia guarantee and receivables

FINEM VI

 

              823

 

              942

 

Fixed rate 2.5%  (a)

 

114 monthly installments from June 2013

 

CPFL Energia guarantee and receivables

FINEM VI

 

         52,465

 

         60,085

 

Fixed rate 2.5%  (a)

 

96 monthly installments from December 2014

 

CPFL Energia guarantee and receivables

FINEM VII

 

         35,356

 

         39,442

 

Fixed rate 6%  (b)

 

96 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINEM VII

 

         60,451

 

         65,261

 

SELIC + 2.62% to 2.66%  (h)

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINEM VII

 

         70,334

 

         81,394

 

TJLP + 2.12% to 2.66%  (d)

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and receivables

FINAME

 

           4,525

 

           6,033

 

Fixed rate 4.5%

 

96 monthly installments from January 2012

 

CPFL Energia guarantee

FINAME

 

              123

 

              168

 

Fixed rate 10.0%

 

90 monthly installments from May 2012

 

Liens on assets

FINAME

 

              476

 

              579

 

Fixed rate 10.0%

 

66 monthly installments from October 2015

 

Liens on assets

CPFL Santa Cruz

                   

FINEM

 

           8,183

 

           9,094

 

Fixed rate 6%

 

111 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

           3,009

 

           3,381

 

SELIC + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

           5,033

 

           6,062

 

TJLP + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINAME

 

           1,775

 

                -  

 

TJLP + 3.29%

 

36 monthly installments from April 2019

 

CPFL Energia guarantee

FINAME

 

                 5

 

                -  

 

SELIC + 3.63%

 

36 monthly installments from April 2019

 

CPFL Energia guarantee

CPFL Leste Paulista

                   

FINEM

 

           3,057

 

           3,397

 

Fixed rate 6%

 

111 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

           1,103

 

           1,239

 

SELIC + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

           1,847

 

           2,224

 

TJLP + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINAME

 

           1,319

 

                -  

 

TJLP + 3.29%

 

36 monthly installments from December 2018

 

CPFL Energia guarantee

FINAME

 

                 7

 

                -  

 

SELIC + 3.63%

 

36 monthly installments from December 2018

 

CPFL Energia guarantee

FINAME

 

                58

 

                -  

 

TJLP + 3.39%

 

120 monthly installments from June 2019

 

CPFL Energia guarantee

CPFL Sul Paulista

                   

FINEM

 

           2,171

 

           2,412

 

Fixed rate 6%

 

111 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

           1,541

 

           1,731

 

SELIC + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

           2,592

 

           3,122

 

TJLP + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINAME

 

           2,609

 

                -  

 

TJLP + 3.29%

 

36 monthly installments from February 2019

 

CPFL Energia guarantee

CPFL Jaguari

                   

CCB - Santander

 

           1,272

 

           1,464

 

TJLP + 3.1%

 

96 monthly installments from June 2014

 

CPFL Energia guarantee

CCB - Santander

 

              480

 

              572

 

UMBNDES + 2.1%

 

96 monthly installments from June 2014

 

CPFL Energia guarantee

FINEM

 

           2,180

 

           2,422

 

Fixed rate 6%

 

111 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

           1,145

 

           1,287

 

SELIC + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

           1,927

 

           2,321

 

TJLP + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINAME

 

              381

 

                -  

 

TJLP + 3.29%

 

36 monthly installments from February 2019

 

CPFL Energia guarantee

FINAME

 

                16

 

                -  

 

TJLP + 3.39%

 

120 monthly installments from July 2019

 

CPFL Energia guarantee

CPFL Mococa

                   

CCB - Santander

 

           1,636

 

           1,883

 

TJLP + 3.1%

 

96 monthly installments from June 2014

 

CPFL Energia guarantee

CCB - Santander

 

              617

 

              736

 

UMBNDES + 2.1%

 

96 monthly installments from June 2014

 

CPFL Energia guarantee

CCB - Santander

 

           1,222

 

           1,413

 

UMBNDES +1.99%

 

96 monthly installments from October 2015

 

CPFL Energia guarantee

CCB - Santander

 

           3,657

 

           4,081

 

TJLP + 2.99%  (f)

 

96 monthly installments from October 2015

 

CPFL Energia guarantee

FINAME

 

              106

 

                -  

 

TJLP + 3.29%

 

36 monthly installments from April 2019

 

CPFL Energia guarantee

FINAME

 

                41

 

                -  

 

TJLP + 3.39%

 

120 monthly installments from May 2019

 

CPFL Energia guarantee

CPFL Serviços

                   

FINAME

 

           1,139

 

           1,297

 

Fixed rate 2.5% to 5.5%

 

96 monthly installments from August 2014

 

CPFL Energia guarantee and liens on equipment

FINAME

 

              268

 

              313

 

Fixed rate 6%

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and liens on equipment

FINAME

 

              521

 

              668

 

Fixed rate 7.7% to 10%

 

90 monthly installments from November 2012

 

CPFL Energia guarantee and liens on equipment

FINAME

 

           9,973

 

         11,292

 

Fixed rate 2.5% to 5.5%

 

114 monthly installments from February 2013

 

CPFL Energia guarantee and liens on equipment

FINAME

 

                37

 

                47

 

TJLP + 4.2%

 

90 monthly installments from November 2012

 

CPFL Energia guarantee and liens on equipment

FINAME

 

           1,941

 

           2,249

 

Fixed rate 6%

 

90 monthly installments from October 2014

 

CPFL Energia guarantee and liens on equipment

FINAME

 

                91

 

              101

 

Fixed rate 6%

 

96 monthly installments from July 2016

 

CPFL Energia guarantee and liens on equipment

FINAME

 

           5,221

 

           5,768

 

Fixed rate 6%

 

114 monthly installments from June 2015

 

CPFL Energia guarantee and liens on equipment

FINAME

 

              576

 

              762

 

TJLP + 2.2% to 3.2% (c)

 

56 monthly installments from July 2015

 

CPFL Energia guarantee and liens on equipment

FINAME

 

           3,262

 

           3,870

 

Fixed rate 9.5% to 10% (c)

 

66 monthly installments from October 2015

 

CPFL Energia guarantee and liens on equipment

FINAME

 

           1,354

 

           1,589

 

Fixed rate 6% to 10% (e)

 

66 monthly installments from April 2016

 

CPFL Energia guarantee and liens on equipment

FINAME

 

           5,568

 

           5,832

 

TJLP + 3.50% (e)

 

48 monthly installments from July 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

           1,265

 

           2,511

 

SELIC + 3.86% to 3.90% (k)

 

48 monthly installments from July 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

           1,314

 

                -  

 

SELIC + 3.86%

 

48 monthly installments from August 2019

 

CPFL Energia guarantee and liens on equipment

FINAME

 

           1,259

 

           1,147

 

SELIC + 3.74% (d)

 

36 monthly installments from November 2018

 

CPFL Energia guarantee and liens on equipment

FINAME

 

              578

 

              495

 

TJLP + 3.40% (h)

 

36 monthly installments from November 2018

 

CPFL Energia guarantee and liens on equipment

FINAME

 

           2,531

 

                -  

 

SELIC + 3.58% to 3.72%

 

36 monthly installments from January 2019

 

CPFL Energia guarantee and liens on equipment

FINAME

 

           8,774

 

                -  

 

TJLP + 3.25% to 3.38% 

 

36 monthly installments from January 2019

 

CPFL Energia guarantee and liens on equipment

 

59 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

CPFL Transmissão Piracicaba

                   

FINAME

 

         14,923

 

         16,871

 

Fixed rate 3.0%

 

96 monthly installments from July 2015

 

CPFL Energia guarantee

CPFL Telecom

                   

FINAME

 

                -  

 

           7,448

 

Fixed rate 6.0% (b)

 

60 monthly installments from December 2016

 

CPFL Energia guarantee

FINEM

 

                -  

 

           7,849

 

SELIC + 3.12% (h)

 

60 monthly installments from December 2016

 

CPFL Energia guarantee

FINEM

 

                -  

 

         21,342

 

TJLP + 2.12% to 3.12% (c)

 

60 monthly installments from December 2016

 

CPFL Energia guarantee

FINEM

 

                -  

 

              470

 

TJLP (l)

 

60 monthly installments from December 2016

 

CPFL Energia guarantee

CERAN

                   

BNDES

 

        230,630

 

        266,484

 

TJLP + 3.69 to 5%

 

208 monthly installments from December 2005

 

Pledge of shares, credit and concession rights and revenues

BNDES

 

         40,132

 

         48,409

 

UMBNDES + 5% (1)

 

208 monthly installments from February 2006

 

Pledge of shares, credit and concession rights and revenues

CPFL Renováveis

                   

FINEM I

 

        239,868

 

        262,224

 

TJLP + 1.95%

 

168 monthly installments from October 2009

 

(i)    Liens of equipment;
(ii)   Pledge of receivables;
(iii)  Pledge of shares of SPE and PCH Holding;
(iv)  Pledge of rights authorized by ANEEL

FINEM II

 

         19,774

 

         22,210

 

TJLP + 1.90%.

 

144 monthly installments from June 2011

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Guarantee of CPFL Energia S.A. and Bioenergia S.A.

FINEM III

 

        469,557

 

        495,912

 

TJLP + 1.72%

 

192  monthly installments from May 2013

 

(i)   Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of shares of SPE;
(iv)  Guarantee of CPFL Energia and State Grid.

FINEM V

 

         72,230

 

         80,362

 

TJLP + 2.8% and 3.4%

 

143  monthly installments from December 2011

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of shares of SPE;
(iv)  Pledge of rights authorized by ANEEL;
(v)   Guarantee of CPFL-R.

FINEM VI

 

         70,915

 

         74,737

 

TJLP + 2.05%

 

173 to 192  monthly installments from October 2013 and April 2015

 

(i)    Liens of receivables;
(ii)   Pledge of shares of SPE;
(iii)  Pledge of rights authorized by ANEEL;
(iv)  Guarantee of CPFL Renováveis, CPFL Energia and State Grid.

FINEM VII

 

        124,093

 

        138,474

 

TJLP + 1.92 %

 

156  monthly installments from October 2010

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of shares of SPE;
(iv)  Pledge of rights authorized by ANEEL;
(v)   Pledge of receivables of operation contracts.

FINEM IX

 

         19,685

 

         25,195

 

TJLP + 2.15%

 

120 monthly installments from May 2010

 

(i)    Mortgage of rural property;
(ii)   Liens of equipment;
(iii)  Liens of receivables;
(iv)  Pledge of shares of SPE;
(v)   Pledge of rights authorized by ANEEL;
(vi)  Guarantee of CPFL-R, CPFL Energia and State Grid.

FINEM X

 

                -  

 

              230

 

TJLP

 

84 monthly installments from October 2010

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of shares of SPE;
(iv)  Pledge of rights authorized by ANEEL;
(v)   Pledge of receivables of operation contracts.

FINEM XI

 

         97,709

 

        105,670

 

TJLP + 1.87% to 1.9%

 

108 to 168 monthly installments from January 2012 and January 2013

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Guarantee of CPFL Energia.

FINEM XII

 

        302,828

 

        317,289

 

TJLP + 2.18%

 

192 monthly installments from July 2014

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of receivables of operation contracts;
(iv)  Pledge of shares of SPE and Eolica Holding;
(v)   Pledge of rights authorized by ANEEL;
(vi)  Guarantee of CPFL Renováveis, Eólica Holding S.A, CPFL Energia and State Grid.

FINEM XIII

 

        303,456

 

        318,257

 

TJLP + 2.02% to 2.18%

 

192 monthly installments from November 2014

 

(i)   Pledge of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of receivables of operation contracts;
(iv)  Pledge of shares of SPE;
(v)   Pledge of rights authorized by ANEEL;
(vi)  Guarantee of CPFL Renováveis, CPFL Energia and State Grid.

FINEM XV

 

         24,223

 

         27,305

 

TJLP + 3.44%

 

139 monthly installments from  September 2011

 

(i)    Pledge of shares of SPE;
(ii)   Pledge of rights authorized by ANEEL;
(iii)  Liens of receivables;
(iv)  Guarantee of CPFL Renováveis, CPFL Energia and State Grid.

FINEM XVI

 

           4,857

 

           6,418

 

Fixed rate 5.50%

 

101 monthly installments from  September 2011

 

(i)    Pledge of shares of SPE;
(ii)   Pledge of rights authorized by ANEEL;
(iii)  Liens of receivables;
(iv)  Guarantee of CPFL Renováveis, CPFL Energia and State Grid.

FINEM XVII

 

        436,542

 

        460,426

 

TJLP + 2.18%

 

192 monthly installments from  January 2013

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of receivables of operation contracts;
(iv)  Pledge of shares of SPE and DESA Eolicas SA;
(v)   Pledge of rights authorized by ANEEL;
(vi)  Guarantee letter.

FINEM XVIII

 

         10,222

 

         13,763

 

Fixed rate 4.5%

 

102 monthly installments from June 2011

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Guarantee of CPFL Energia S.A. and Bioenergia S.A.

FINEM XIX

 

         28,080

 

         29,559

 

TJLP + 2.02%

 

192 monthly installments from January 2014

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of shares of SPE;
(iv)  Pledge of rights authorized by ANEEL;
(v)   Guarantee of CPFL Renováveis, CPFL Energia and State Grid.

FINEM XX

 

         39,066

 

         44,650

 

Fixed rate 2.5%

 

108 monthly installments from January 2014

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of shares of SPE;
(iv)  Pledge of rights authorized by ANEEL;
(v)   Guarantee of CPFL Renováveis, CPFL Energia and State Grid.

FINEM XXI

 

         38,266

 

         40,281

 

TJLP + 2.02%

 

192 monthly installments from January 2014

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of shares of SPE;
(iv)  Pledge of rights authorized by ANEEL;
(v)   Guarantee of CPFL Renováveis, CPFL Energia and State Grid.

FINEM XXII

 

         34,369

 

         39,281

 

Fixed rate 2.5%

 

108 monthly installments from January 2014

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of shares of SPE;
(iv)  Pledge of rights authorized by ANEEL;
(v)   Guarantee of CPFL Renováveis, CPFL Energia and State Grid.

FINEM XXIII

 

           1,297

 

           1,729

 

Fixed rate 4.5%

 

102 monthly installments from June 2011

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of shares of SPE;
(iv)  Pledge of rights authorized by ANEEL;
(v)   Pledge of receivables of operation contracts.

FINEM XXIV

 

         89,355

 

        109,580

 

Fixed rate 5.5%

 

102 to 108 monthly installments from January 2012

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Guarantee of CPFL Energia and State Grid.

FINEM XXV

 

         83,952

 

         87,492

 

TJLP + 2.18%

 

192 monthly installments from July 2016

 

(i)    Pledge of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of receivables of operation contracts;
(iv)  Pledge of shares of SPE;
(v)   Pledge of rights authorized by ANEEL;
(vi)  Guarantee of CPFL Renováveis, CPFL Energia and State Grid.

FINEM XXVI

 

        690,014

 

        525,011

 

TJLP + 2.75%

 

192 monthly installments from July 2017

 

(i)    Pledge of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of shares of SPE and T-16;
(iv)  Pledge of rights authorized by ANEEL;
(v)   Guarantee of CPFL Renováveis, CPFL Energia and State Grid.

FINEM XXVII

 

         68,774

 

         70,532

 

TJLP + 2,02%

 

162 monthly installments from November 2016

 

(i)    Pledge of shares of SPE;
(ii)   Liens of receivables;
(iii)  Fiduciary Assignment of emerging rights authorized by ANEEL;
(iv)  Guarantee of CPFL Renováveis, CPFL Energia and State Grid.

FINAME I

 

           2,505

 

           2,857

 

Fixed rate 2.5%

 

96 monthly installments from February 2015

 

(i)    Liens of equipment;
(ii)   Guarantee of CPFL Renováveis.

 

60 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

FINEP I

 

           1,025

 

           1,397

 

Fixed rate 3.5%

 

61 monthly installments from October 2014

 

Guarantee letter.

FINEP II

 

         10,144

 

         10,445

 

TJLP - 1.0%

 

85 monthly installments from June 2017

 

Guarantee letter.

FINEP III

 

           4,375

 

           5,232

 

Fixed rate 8%

 

73 monthly installments from July 2015

 

Guarantee letter.

BNB I

 

         95,111

 

        100,323

 

Fixed rate 9.5% to 10% and compliance bonus of 15%

 

168 monthly installments from January 2009

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of shares of SPE;
(iv)  Pledge of rights authorized by ANEEL;
(v)   Guarantee of SIIF Energies do Brasil.

BNB II

 

        153,125

 

        158,364

 

Fixed rate 10% and compliance bonus of 15% to 25%

 

222 monthly installments from May 2010

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of shares of SPE;
(iv)  Pledge of rights authorized by ANEEL;
(v)   Pledge of receivables of operation contracts;
(vi)  Guarantee of BVP S.A.;
(vii) Guarantee letter.

BNB III

 

         27,610

 

         29,020

 

Fixed rate 9.5% and compliance bonus of 25%

 

228 monthly installments from July 2009

 

(i)    Liens of equipment;
(ii)   Pledge of shares of SPE;
(iii)  Pledge of rights authorized by ANEEL;
(iv)  Liens of receivables;
(v)   Guarantee of CPFL Renováveis.

NIB

 

         59,096

 

         67,872

 

IGPM + 8.63%

 

50 quarterly installments from June 2011

 

(i)    Liens of equipment;
(ii)   Liens of receivables;
(iii)  Pledge of shares of SPE;
(iv)  Pledge of rights authorized by ANEEL;
(v)   Pledge of receivables of operation contracts.

                     

Rental assets

                   

CPFL Eficiência

                   

FINAME

 

           2,441

 

           2,923

 

Fixed rate 4.5% to 8.7%

 

96 monthly installments from March 2012

 

CPFL Energia guarantee

FINAME

 

                86

 

                99

 

Fixed rate 6%

 

72 monthly installments from October 2016

 

CPFL Energia guarantee

FINAME

 

              187

 

              234

 

TJLP + 2.70%

 

48 monthly installments from August 2016

 

CPFL Energia guarantee

FINAME

 

              187

 

              219

 

SELIC + 2.70%

 

48 monthly installments from August 2016

 

CPFL Energia guarantee

FINAME

 

              109

 

              121

 

Fixed rate 9.5%

 

48 monthly installments from October 2016

 

CPFL Energia guarantee

FINAME

 

              556

 

              678

 

Fixed rate 9.5% (e)

 

48 monthly installments from February 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

              717

 

              753

 

TJLP + 3.50% (e)

 

48 monthly installments from August 2017

 

CPFL Energia guarantee and liens on equipment

Financial institutions

                   

CPFL Paulista

                   

Banco do Brasil - Working capital

 

        309,432

 

        380,403

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

CPFL Piratininga

                   

Banco do Brasil - Working capital

 

                -  

 

         66,951

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

CPFL Santa Cruz

                   

Banco do Brasil - Working capital

 

         40,845

 

         50,213

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

Banco IBM - Working capital

 

           6,578

 

           6,925

 

CDI + 0.27% (f)

 

12 semiannual installments from  June 2015

 

CPFL Energia guarantee

CPFL Leste Paulista

                   

Banco IBM - Working capital

 

           4,449

 

           5,405

 

100.0% of CDI

 

14 semiannual installments from December 2012

 

CPFL Energia guarantee

Banco IBM - Working capital

 

         19,481

 

         20,955

 

CDI + 0.1%

 

12 semiannual installments from October 2014

 

CPFL Energia guarantee

Banco IBM - Working capital

 

         14,873

 

         15,658

 

CDI + 0.27%

 

12 semiannual installments from March 2015

 

CPFL Energia guarantee

Banco IBM - Working capital

 

           5,070

 

           6,993

 

CDI + 1.33% (f)

 

12 semiannual installments from January 2016

 

CPFL Energia guarantee

CPFL Sul Paulista

                   

Banco do Brasil - Working capital

 

         25,992

 

         31,954

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

Banco IBM - Working capital

 

           6,496

 

           7,888

 

CDI + 0.27% to 1.33 (f)

 

12 semiannual installments from June 2015

 

CPFL Energia guarantee

Banco IBM - Working capital

 

           5,533

 

           6,784

 

CDI + 1.27% (g)

 

Semiannual installments from February 2017

 

CPFL Energia guarantee

CPFL Jaguari

                   

Banco do Brasil - Working capital

 

           3,589

 

           4,413

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

Banco IBM - Working capital

 

           9,302

 

         10,726

 

100.0% of CDI

 

14 semiannual installments from December 2012

 

CPFL Energia guarantee

Banco IBM - Working capital

 

         10,502

 

         11,297

 

CDI + 0.1%

 

12 semiannual installments from October 2014

 

CPFL Energia guarantee

CPFL Mococa

                   

Banco do Brasil - Working capital

 

         23,517

 

         28,911

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

Banco IBM - Working capital

 

           3,019

 

           3,481

 

100.0% of CDI

 

14 semiannual installments from December 2012

 

CPFL Energia guarantee

Banco IBM - Working capital

 

         12,630

 

         13,296

 

CDI + 0.27%

 

12 semiannual installments from March 2015

 

CPFL Energia guarantee

CPFL Serviços

                   

Banco IBM - Working capital

 

           2,511

 

           3,473

 

CDI + 0.10%

 

11 semiannual installments from June 2013

 

CPFL Energia guarantee

Promissory note

 

         46,095

 

                -  

 

104% of CDI

 

1 installment in June 2018

 

CPFL Energia guarantee

CPFL Geração

                   

Banco do Brasil - Working capital

 

        618,361

 

        641,316

 

109.5% of CDI

 

1 installment in March 2019

 

CPFL Energia guarantee

CPFL Telecom

                   

Banco IBM - Working capital

 

                -  

 

         31,449

 

CDI + 0.18%

 

12 semiannual installments from August 2014

 

CPFL Energia guarantee

CPFL Transmissão Morro Agudo

                   

Santander

 

                -  

 

           5,031

 

CDI + 1.60% (k)

 

1 installment in March 2017

 

CPFL Energia guarantee

CPFL Renováveis

                   

Bradesco

 

        210,312

 

        250,363

 

CDI + 0.5%

 

8 annual installments from June 2013

 

 No collateral

Safra

 

        193,710

 

        208,547

 

105% of CDI

 

14 semiannual installments from August 2016

 

 No collateral

CCB - BBM

 

         45,532

 

         44,171

 

CDI+3.40%

 

1 installment in March 2018

 

 No collateral

CCB - ABC

 

         45,712

 

         44,217

 

CDI+3.80%

 

1 installment in December 2017

 

 No collateral

Promissory note - ABC

 

         99,338

 

        105,883

 

CDI+3.80%

 

4 semiannual installments from February 2017

 

 No collateral

Promissory note - BBM

 

         62,272

 

                -  

 

CDI+1.39%

 

1 installment in June 2018

 

CPFL Renováveis guarantee

                     

Others

                   

Eletrobrás

                   

CPFL Paulista

 

           2,547

 

           2,960

 

RGR + 6% to 6.5% 

 

120 monthly installments from January 2013

 

Receivables and promissory notes

RGE

 

           4,454

 

           5,851

 

RGR + 6%

 

120 monthly installments from May 2008

 

Receivables and promissory notes

RGE Sul

 

         20,691

 

         25,946

 

RGR + 6%

 

120 monthly installments from July 2007

 

Receivables and promissory notes

CPFL Santa Cruz

 

              230

 

              508

 

RGR + 6%

 

120 monthly installments from May 2008

 

Receivables and promissory notes

CPFL Leste Paulista

 

              176

 

              338

 

RGR + 6%

 

120 monthly installments from February 2008

 

Receivables and promissory notes

CPFL Sul Paulista

 

              123

 

              303

 

RGR + 6%

 

120 monthly installments from August 2007

 

Receivables and promissory notes

CPFL Jaguari

 

                -  

 

                 9

 

RGR + 6%

 

120 monthly installments from June 2007

 

Receivables and promissory notes

CPFL Mococa

 

                82

 

              122

 

RGR + 6%

 

120 monthly installments from January 2008

 

Receivables and promissory notes

Others

 

         25,550

 

         66,141

           

Subtotal local currency

 

     6,975,002

 

     7,579,974

           
                     

Foreign currency

                   

Measured at fair value

                   

Financial institutions

                   

CPFL Paulista

                   

Bank of America Merrill Lynch

 

        320,566

 

        327,503

 

US$+Libor 3 months+1.35% (2) (f)

 

1 installment in October 2018

 

CPFL Energia guarantee and promissory notes

Bank of America Merrill Lynch

 

        143,479

 

        146,703

 

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

 

1 installment in September 2018

 

CPFL Energia guarantee and promissory notes

Bank of Tokyo-Mitsubishi

 

        159,744

 

        163,279

 

US$ + Libor 3 months + 0.88% (2) (g)

 

1 installment in February 2020

 

CPFL Energia guarantee and promissory notes

Bank of Tokyo-Mitsubishi

 

        119,650

 

        163,106

 

US$+Libor 3 months+0.80% (2) (f)

 

4 semiannual installments from September 2017

 

CPFL Energia guarantee and promissory notes

BNP Paribas

 

         75,345

 

         68,663

 

Euro + 1.6350% (2)

 

1 installment in January 2018

 

CPFL Energia guarantee and promissory notes

HSBC

 

        276,794

 

        282,808

 

US$ + Libor 3 months + 1.30% (2)

 

1 installment in January 2018

 

CPFL Energia guarantee and promissory notes

J.P. Morgan

 

                -  

 

        130,522

 

US$ + 2.28% to 2.32% (2)

 

1 installment in December 2017

 

CPFL Energia guarantee and promissory notes

J.P. Morgan

 

                -  

 

        115,382

 

US$ + 2.36% to 2.39% (2)

 

1 installment in January 2018

 

CPFL Energia guarantee and promissory notes

J.P. Morgan

 

         80,163

 

         82,544

 

US$ + 2.74% (2)

 

1 installment in January 2019

 

CPFL Energia guarantee and promissory notes

J.P. Morgan

 

                -  

 

         49,311

 

US$ + 2.2% (2)

 

1 installment in February 2018

 

CPFL Energia guarantee and promissory notes

Bank of America Merrill Lynch

 

        479,756

 

        490,334

 

US$ + Libor 3 months + 1.40% (2)

 

1 installment in February 2018

 

CPFL Energia guarantee and promissory notes

Mizuho Bank

 

        239,090

 

        244,484

 

US$+Libor 3 months+1.55%  (2) (f)

 

3 semiannual installments from March 2018

 

CPFL Energia guarantee and promissory notes

Syndicated transaction  (**) - Bank of America Merrill Lynch, Citibank, HSBC and EDC-Export Development Canada

 

        213,374

 

        218,104

 

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

 

5 semiannual installments from May 2019

 

CPFL Energia guarantee and promissory notes

CPFL Piratininga

                   

BNP Paribas

 

        207,198

 

        188,822

 

Euro + 1.6350%  (2)

 

1 installment in January 2018

 

CPFL Energia guarantee and promissory notes

Citibank

 

        200,112

 

        204,486

 

US$ + Libor 3 months + 1.41%  (2)

 

2 annual installments from January 2019

 

CPFL Energia guarantee and promissory notes

Citibank

 

        159,650

 

        163,225

 

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

 

1 installment in March 2019

 

CPFL Energia guarantee and promissory notes

Scotiabank

 

                -  

 

         54,235

 

US$ + 2.08% (2)

 

1 installment in August 2017

 

CPFL Energia guarantee and promissory notes

Sumitomo

 

        160,236

 

        163,712

 

US$ + Libor 3 months + 1.35% (2) (f)

 

1 installment in April 2018

 

CPFL Energia guarantee and promissory notes

Syndicated transaction  (**) - Bank of America Merrill Lynch, Citibank, HSBC and EDC-Export Development Canada

 

        213,374

 

        218,104

 

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

 

5 semiannual installments from May 2019

 

CPFL Energia guarantee and promissory notes

RGE

                   

Bank of Tokyo-Mitsubishi

 

         57,599

 

         58,852

 

US$ + Libor 3 months + 0.82%(2)

 

1 installment in April 2018

 

CPFL Energia guarantee and promissory notes

Bank of Tokyo-Mitsubishi

 

        261,934

 

        267,740

 

US$ + Libor 3 months + 0.83%(2)

 

1 installment in May 2018

 

CPFL Energia guarantee and promissory notes

HSBC

 

         43,548

 

         44,496

 

US$ + Libor 3 months + 1.30% (2)

 

1 installment in October 2017

 

CPFL Energia guarantee and promissory notes

J.P. Morgan

 

                -  

 

        199,826

 

US$ + 2.78%  (2)

 

1 installment in February 2018

 

CPFL Energia guarantee and promissory notes

Syndicated transaction  (**) - Bank of America Merrill Lynch, Citibank, HSBC and EDC-Export Development Canada

 

        213,374

 

        218,104

 

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

 

5 semiannual installments from May 2019

 

CPFL Energia guarantee and promissory notes

 

61 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

CPFL Santa Cruz

                   

Scotiabank

 

         16,053

 

         16,556

 

US$ + 3.37% (3) (g)

 

1 installment in July 2019

 

CPFL Energia guarantee and promissory notes

CPFL Sul Paulista

                   

Scotiabank

 

         16,053

 

         16,556

 

US$ + 3.37% (3) (g)

 

1 installment in July 2019

 

CPFL Energia guarantee and promissory notes

CPFL Leste Paulista

                   

Scotiabank

 

         16,053

 

         16,556

 

US$ + 3.37% (3) (g)

 

1 installment in July 2019

 

CPFL Energia guarantee and promissory notes

CPFL Jaguari

                   

Scotiabank

 

         16,053

 

         16,556

 

US$ + 3.37% (3) (g)

 

1 installment in July 2019

 

CPFL Energia guarantee and promissory notes

CPFL Geração

                   

HSBC

 

                -  

 

        326,159

 

US$+Libor 3 months + 1.30% (2)

 

1 installment in  March 2017

 

CPFL Energia guarantee and promissory notes

CCB-China Construction Bank

 

         95,786

 

         97,946

 

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

 

1 installment in  June 2019

 

CPFL Energia guarantee and promissory notes

Scotiabank

 

        113,979

 

        117,550

 

US$ + 3.37% (3) (g)

 

1 installment in July 2019

 

CPFL Energia guarantee and promissory notes

Citibank

 

        382,743

 

        391,380

 

US$+Libor 3 months + 1.41% (2) (f)

 

3 annual installments from September 2018

 

CPFL Energia guarantee and promissory notes

 CCB China

 

         31,903

 

         32,624

 

US$ + 3.37% (3) (g)

 

1 installment in September 2019

 

CPFL Energia guarantee and promissory notes

Scotiabank

 

        160,780

 

        163,125

 

US$ + 3.13% (f)

 

1 installment in December 2019

 

CPFL Energia guarantee

Paulista Lajeado

                   

Banco Itaú

 

         34,701

 

         35,771

 

US$ + 3.196% (3)

 

1 installment in March 2018

 

CPFL Energia guarantee and promissory notes

CPFL Brasil

                   

Scotiabank

 

         43,205

 

         44,501

 

US$ + 2.779% (2)

 

1 installment in August 2018

 

CPFL Energia guarantee and promissory notes

Scotiabank

 

         11,227

 

                -  

 

US$ + 2.779% (2)

 

1 installment in September 2020

 

CPFL Energia guarantee and promissory notes

Scotiabank

 

        242,930

 

                -  

 

US$ + 2.779% (2)

 

1 installment in September 2020

 

CPFL Energia guarantee and promissory notes

                     

Mark to market

 

         23,963

 

        (37,415)

           
                     

Total in foreign currency - fair value

 

     4,830,412

 

     5,502,211

           
                     

Borrowing costs (*)

 

        (31,861)

 

        (38,143)

           
                     

Total - Consolidated

 

   11,773,552

 

   13,044,041

           
                     
                     

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

   

 (1) 143.85% of CDI

 

 (3) 109.1% to 119% of CDI

           

 (2) 99% to 109% of CDI

                   
                     

Effective rate:

       

 (a)  30% to 40% of CDI

 

 (e)  80.1% to 90% of CDI

           

 (b)  40.1% to 50% of CDI

 

 (f)  100.1% to 110% of CDI

           

 (c)  60.1% to 70% of CDI 

 

 (g) 110.1% to 120% of CDI

           

 (d)  70.1% to 80% of CDI

 

 (h) 120.1% to 130% of CDI

           

 

(*) In accordance with CPC 38/IAS 39, this refers to borrowing costs directly attributable to the issuance of the respective debts.

(**) Syndicated transaction – borrowings in foreign currency, having as counterpart a group of financial institutions.

 

As segregated in the tables above, in conformity with CPCs 38 and 39 and IASs 32 and 39, the Group classified their debts as (i) other financial liabilities (or measured at amortized cost), and (ii) financial liabilities measured at fair value through profit or loss.

The objective of the classification as financial liabilities of borrowings measured at fair value is to compare the effects of the recognition of income and expenses derived from marking to market of derivatives, debt-related derivatives, in order to obtain more relevant and consistent accounting information. At September 30, 2017, the balance of the borrowings measured at fair value was R$ 4,830,412 (R$ 5,502,211 at December 31, 2016).

Changes in the fair values of these borrowings are recognized in finance income/cost of the Group. At September 30, 2017, the accumulated losses obtained on the marking to market of the borrowings were R$ 23,963 (accumulated gains of R$ 37,415 at December 31, 2016), which offset by the gains obtained on the marking to market of derivative financial instruments of R$ 34,334 (R$ 24,504 at December 31, 2016) contracted to hedge against changes in foreign exchange rates (note 32), resulted in a total net gain of R$ 10,371 (R$ 61,919 at December 31, 2016).

 

The maturities of the principal of borrowings recorded in noncurrent liabilities are scheduled as follows:

 

Maturity

 

Consolidated

From October 1st, 2018

 

        513,541

2019

 

      2,771,537

2020

 

      1,620,724

2021

 

        712,155

2022

 

        510,261

2023 to 2027

 

      1,320,764

2028 to 2032

 

        515,886

2033 to 2037

 

          21,664

Subtotal

 

      7,986,531

Mark to market

 

          19,727

Total

 

      8,006,258

 

 

62 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Main additions in the period:

       

R$ thousand

  

   

Company

 

Bank / Credit issue

 

Total approved

 

 Released in 2017

 

 Released net of fundraising costs

 

Interest

 

Utilization

Local currency

                       

Investment

                       

CPFL Santa Cruz, CPFL Leste Paulista, CPFL Jaguari, CPFL Sul Paulista e CPFL Mococa

 

FINAME (a)

 

               6,467

 

               6,467

 

                 6,467

 

 Quarterly

 

 Subsidiary's investment plan

CPFL Serviços

 

FINAME (a)

 

             11,205

 

             11,205

 

               11,205

 

 Quarterly

 

 Acquisition of machinery and equipment

CPFL Serviços

 

Promissory note

 

             45,000

 

             45,000

 

               45,000

 

 Bullet

 

 Working capital

CPFL Renováveis

 

FINEM XXVI

 

           764,109

 

           145,670

 

             142,494

 

 Monthly

 

 Subsidiary's investment plan

CPFL Renováveis

 

FINEM XVII

 

           639,045

 

                  677

 

                    677

 

 Monthly

 

 Subsidiary's investment plan

CPFL Renováveis

 

FINEM XII

 

             99,344

 

                  800

 

                    800

 

 Monthly

 

 Subsidiary's investment plan

CPFL Renováveis

 

FINEM XXVII

 

             87,184

 

               1,699

 

                 1,699

 

 Monthly

 

 Subsidiary's investment plan

CPFL Renováveis

 

Promissory note - BBM (a)

 

             62,000

 

             62,000

 

               61,833

 

 Bullet

 

 Subsidiary's investment plan

                         
       

         1,714,354

 

           273,518

 

             270,175

       
                         

Foreign currency

                       

CPFL Brasil

 

Law 4131 - Scotiabank

 

           249,989

 

           249,989

 

             249,989

 

 Semiannually

 

 Working capital

 

(a) There is no restrictive financial covenant.

 

Prepayment

CPFL Paulista - In the nine-month period ended September 30, 2017, the subsidiary settled borrowings of R$ 250,738 from J.P. Morgan bank, which original maturities would be in December 2017 and February 2018.

 

RGE - In the nine-month period ended September 30, 2017, the subsidiary settled borrowings of R$ 200,672 from J.P. Morgan bank, which original maturities would be in February 2018.

 

CPFL Piratininga - In the nine-month period ended September 30, 2017, the subdisiary settled borrowings of R$ 68,952 from Banco do Brasil bank, which original maturities would be in July 2017 and July 2018.

 

 

Restrictive covenants

The borrowing agreements are subject to certain restrictive covenants, including covenants that require the Company and/or its subsidiaries to maintain certain financial ratios within pre-established parameters. Moreover, these agreements contain restrictive non-financial covenants, which are complied with as per the last measurement period.

CPFL Brasil – Law 4,131 - compliance with the following financial ratios, calculated semiannually: (i) Net debt divided by EBITDA – maximum of 3.75 and (ii) EBITDA divided by Finance Income (expenses) – minimum of 2.25.

For purposes of determining covenants, the definition of EBITDA at the Company takes into consideration mainly the consolidation of subsidiaries, associates and joint ventures based on the Company’s direct or indirect interests in those entities (for both EBITDA and assets and liabilities).

Borrowings for other disbursement of amounts occurred in 2017, as well as other debts, have restrictive covenants related to financial indicators, which details of the restrictive covenants are presented in the financial statements at December 31, 2016.

Specifically for borrowings from BNDES related to (i) FINEM of the subsidiaries CPFL Paulista, CPFL Piratininga and RGE and (ii) Finem III, VI, IX, XII, XIII, XV, XVI, XIX, XX, XXI, XXII, XXIV , XXV, XXVI and XXVII of the subsidiary CPFL Renováveis and its subsidiaries, the respective contracts were added in 2017 with the inclusion of new financial covenants, additional to those previously existing, which must be verified annually in the financial statements of its parent companies:

CPFL Paulista, CPFL Piratininga and RGE:

 

(i)   Compliance, by the subsidiaries, with the financial ratios already disclosed in the notes to the consolidated financial statements for the year ended December 31, 2016;

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

(ii)   Compliance, by CPFL Energia, with the following financial ratios:

·       Net debt divided by EBITDA – maximum of 3.75;

·       Equity / (Equity + Net banking debts) – minumum of 0.28.

(iii) Compliance, by State Grid Brazil Power (SGBP), with the following financial ratios:

·       Equity / Total Assets – minimum of 0.30 (excluding IFRIC 12 / OCPC 01 (R1) effects).

 

CPFL Renováveis and subsidiaries:

 

(i)   Compliance, by CPFL Renováveis and its subsidiaries, with the financial ratios already disclosed in the notes to the consolidated financial statements for the year ended December 31, 2016;

 

(ii)  Compliance, by CPFL Energia, with the following financial ratios:

·       Net debt divided by EBITDA – maximum of 3.75;

·       Equity / (Equity + Net banking debts) – minumum of 0.28.

 

(iii) Compliance, by State Grid Brazil Power (SGBP), with the following financial ratios:

·       Equity / Total Assets – minimum of 0.30.

 

The Management of the Group monitors these ratios systematically and constantly to ensure that the covenants are complied with. In the opinion of the Group’s Management, all restrictive covenants and covenants whose indicators are measured semiannually and annually have been properly complied with, as per  the last measurement period, that is, June 30, 2017 and December 31, 2016, respectively.

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

( 17 )   DEBENTURES

 

 

     

Consolidated

     

September 30, 2017

 

December 31, 2016

     

Current interest

 

Current

 

Noncurrent

 

Total

 

Current interest

 

Current

 

Noncurrent

 

Total

CPFL Paulista

                                 

6th Issue

Single series

 

                    6,402

 

                    -  

 

                 264,000

 

            270,402

 

                  47,079

 

           198,000

 

                 462,000

 

            707,079

7th Issue

Single series

 

                    7,062

 

           126,250

 

                 378,750

 

            512,062

 

                  28,913

 

                    -  

 

                 505,000

 

            533,913

     

                  13,464

 

           126,250

 

                 642,750

 

            782,464

 

                  75,992

 

           198,000

 

                 967,000

 

          1,240,992

                                   

CPFL Piratininga

                                 

6th Issue

Single series

 

                    1,067

 

                    -  

 

                   44,000

 

              45,067

 

                    7,846

 

             33,000

 

                   77,000

 

            117,846

7th Issue

Single series

 

                    3,286

 

             58,750

 

                 176,250

 

            238,286

 

                  13,455

 

                    -  

 

                 235,000

 

            248,455

8th issue

2nd series

 

                    2,861

 

                    -  

 

                 246,000

 

            248,861

 

                         -  

 

                    -  

 

                          -  

 

                     -  

8th issue

1st series

 

                       398

 

                    -  

 

                   60,559

 

              60,957

 

                         -  

 

                    -  

 

                          -  

 

                     -  

     

                    7,612

 

             58,750

 

                 526,809

 

            593,171

 

                  21,301

 

             33,000

 

                 312,000

 

            366,301

                                   

RGE

                                 

6th Issue

Single series

 

                    4,850

 

                    -  

 

                 200,000

 

            204,850

 

                  35,666

 

           150,000

 

                 350,000

 

            535,666

7th Issue

Single series

 

                    2,377

 

             42,500

 

                 127,500

 

            172,377

 

                    9,733

 

                    -  

 

                 170,000

 

            179,733

8th issue

2nd series

 

                    2,914

 

                    -  

 

                 250,000

 

            252,914

 

                         -  

 

                    -  

 

                          -  

 

                     -  

8th issue

1st series

 

                       872

 

                    -  

 

                 131,347

 

            132,219

 

                         -  

 

                    -  

 

                          -  

 

                     -  

     

                  11,013

 

             42,500

 

                 708,847

 

            762,360

 

                  45,399

 

           150,000

 

                 520,000

 

            715,399

                                   

CPFL Santa Cruz

                                 

1st Issue

Single series

 

                    1,058

 

             32,500

 

                          -  

 

              33,558

 

                       550

 

             32,500

 

                   32,500

 

              65,550

                                   

RGE SUL

                                 

4th Issue

Single series

 

                  53,851

 

                    -  

 

               1,100,000

 

          1,153,851

 

                  32,058

 

                    -  

 

               1,100,000

 

          1,132,058

                                   

CPFL Brasil

                                 

3rd Issue

Single series

 

                  19,582

 

                    -  

 

                 400,000

 

            419,582

 

                  11,657

 

                    -  

 

                 400,000

 

            411,657

                                   

CPFL Geração

                                 

5th Issue

Single series

 

                  19,251

 

           546,000

 

                          -  

 

            565,251

 

                  12,969

 

           546,000

 

                 546,000

 

          1,104,969

6th Issue

Single series

 

                    4,623

 

           153,318

 

                 306,682

 

            464,623

 

                  23,228

 

                    -  

 

                 460,000

 

            483,228

7th Issue

Single series

 

                  29,565

 

                    -  

 

                 635,000

 

            664,565

 

                  16,379

 

                    -  

 

                 635,000

 

            651,379

8th Issue

Single series

 

                    2,133

 

                    -  

 

                   87,146

 

              89,279

 

                    3,369

 

                    -  

 

                   85,520

 

              88,889

9th Issue

Single series

 

                    2,632

 

                    -  

 

                   51,190

 

              53,822

 

                       524

 

                    -  

 

                   50,278

 

              50,802

     

                  58,205

 

           699,318

 

               1,080,018

 

          1,837,542

 

                  56,470

 

           546,000

 

               1,776,798

 

          2,379,268

Parent company

                                 

5th Issue

Single series

 

                         66

 

                    -  

 

                 186,000

 

            186,066

 

                  18,069

 

                    -  

 

                 620,000

 

            638,069

                                   

CPFL Renováveis

                                 

1st Issue - SIIF (*)

1st to 12th series

 

                    2,056

 

             44,196

 

                 464,068

 

            510,320

 

                       762

 

             41,938

 

                 461,314

 

            504,014

1st Issue - PCH Holding 2

Single series

 

                       346

 

               8,700

 

                 123,391

 

            132,437

 

                       644

 

               8,700

 

                 132,091

 

            141,435

1st Issue - DESA

Single series

 

                         -  

 

                    -  

 

                          -  

 

                     -  

 

                       425

 

             17,500

 

                          -  

 

              17,925

2nd Issue - DESA

Single series

 

                  37,712

 

             21,665

 

                   43,336

 

            102,713

 

                  29,153

 

                    -  

 

                   65,000

 

              94,153

1st Issue - Pedra Cheirosa I

Single series

 

                       279

 

             64,653

 

                          -  

 

              64,932

 

                    6,675

 

             52,200

 

                          -  

 

              58,875

1st Issue - Pedra Cheirosa II

Single series

 

                       255

 

             59,203

 

                          -  

 

              59,458

 

                    6,114

 

             47,800

 

                          -  

 

              53,914

1st Issue - Boa Vista II

Single series

 

                         -  

 

                    -  

 

                          -  

 

                     -  

 

                    6,395

 

             50,000

 

                          -  

 

              56,395

1st Issue - Renováveis (***)

Single series

 

                  13,000

 

             64,500

 

                 258,000

 

            335,500

 

                    6,160

 

             43,000

 

                 322,500

 

            371,660

2nd Issue - Renováveis

Single series

 

                         96

 

             60,000

 

                 210,000

 

            270,096

 

                  11,486

 

             30,000

 

                 270,000

 

            311,486

3rd Issue - Renováveis

Single series

 

                  11,357

 

             98,658

 

                 197,343

 

            307,358

 

                    4,444

 

                    -  

 

                 296,000

 

            300,444

4th Issue - Renováveis

1st series

 

                         79

 

                    -  

 

                 200,000

 

            200,079

 

                    7,925

 

                    -  

 

                 200,000

 

            207,925

5th Issue - Renováveis

Single series

 

                    7,268

 

               6,000

 

                   94,000

 

            107,268

 

                         -  

 

                    -  

 

                          -  

 

                     -  

7th Issue - Renováveis

Single series

 

                    2,954

 

                    -  

 

                 251,211

 

            254,165

 

                         -  

 

                    -  

 

                          -  

 

                     -  

     

                  75,402

 

           427,575

 

               1,841,349

 

          2,344,326

 

                  80,183

 

           291,138

 

               1,746,905

 

          2,118,226

                                   

Borrowing costs (**)

   

                         -  

 

            (16,570)

 

                  (48,954)

 

             (65,524)

 

                   (7,346)

 

              (8,545)

 

                  (51,684)

 

             (67,575)

                                   
     

                 240,252

 

        1,370,323

 

               6,436,820

 

          8,047,395

 

                 334,333

 

        1,242,092

 

               7,423,518

 

          8,999,945

 

 

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

   

Quantity issued

 

Annual remuneration

 

Annual effective rate

 

Amortization conditions

 

Collateral

CPFL Paulista

                   

6th Issue

Single series

660

 

CDI + 0.8% (2)

 

CDI  + 0.87%

 

3 annual installments from July 2017

 

CPFL Energia guarantee

7th Issue

Single series

50,500

 

CDI + 0.83% (3)

 

CDI  + 0.89%

 

4 annual installments from February 2018

 

CPFL Energia guarantee

                     

CPFL Piratininga

                   

6th Issue

Single series

110

 

 CDI + 0.8% (2)

 

CDI + 0.91%

 

3 annual installments from July 2017

 

CPFL Energia guarantee

7th Issue

Single series

23,500

 

 CDI + 0.83% (2)

 

CDI + 0.89%

 

4 annual installments from February 2018

 

CPFL Energia guarantee

8th issue

2nd series

246,000

 

 109.5% CDI

 

109.5% CDI

 

2 installments in February 2021 and February 2022

 

CPFL Energia guarantee

8th issue

1st series

60,000

 

 IPCA + 5.2901%

 

IPCA + 5.2901%

 

2 installments in February 2021 and February 2022

 

CPFL Energia guarantee

                     

RGE

                   

6th Issue

Single series

500

 

CDI + 0.8% (2)

 

CDI + 0.88%

 

3 annual installments from July 2017

 

CPFL Energia guarantee

7th Issue

Single series

17,000

 

CDI + 0.83% (3)

 

CDI + 0.88%

 

4 annual installments from February 2018

 

CPFL Energia guarantee

8th issue

2nd series

250,000

 

111.25% CDI

 

111.25% CDI

 

2 installments in February 2021 and February 2022

 

CPFL Energia guarantee

8th issue

1st series

130,000

 

IPCA+ 5.3473%

 

IPCA+ 5.3473%

 

2 installments in February 2021 and February 2022

 

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

                     

RGE SUL

                   

4th Issue

Single series

110,000

 

114.50% of CDI

 

114.5% of CDI

 

2 annual installments from October 2019

 

CPFL Energia guarantee

                     

CPFL Brasil

                   

3rd Issue

Single series

40,000

 

114.5% of CDI

 

114.5% of CDI

 

2 annual installments from October 2019

 

CPFL Energia guarantee

                     

CPFL Geração

                   

5th Issue

Single series

10,920

 

 CDI + 1.4%

 

CDI + 1.48%

 

2 annual instalments from June 2017

 

CPFL Energia guarantee

6th Issue

Single series

46,000

 

 CDI + 0.75% (1)

 

CDI + 0.75%

 

3 annual instalments from August 2018

 

CPFL Energia guarantee

7th Issue

Single series

63,500

 

 CDI + 1.06%

 

CDI + 1.11%

 

1 installment in April 2019

 

CPFL Energia guarantee

8th Issue

Single series

1

 

 IPCA + 5.86% (1)

 

103.33% of CDI

 

1 installment in April 2019

 

CPFL Energia guarantee

9th Issue

Single series

50,000

 

 IPCA+ 5.48%

 

101.74% of CDI

 

1 installment in October 2021

 

CPFL Energia guarantee

                     

Parent company

                   

5th Issue

Single series

62,000

 

114.5% of CDI

 

 120.65% of CDI

 

2 annual installments from October 2019

 

No guarantee

                     

CPFL Renováveis

                   

1st Issue - SIIF

1st to 12th series

432,299,666

 

TJLP + 1%

 

TJLP + 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 - 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 2017

 

Unsecured

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

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

4th Issue - Renováveis

1st series

20,000

 

126% CDI

 

134.22% CDI

 

3 annual installments from September 2019

 

CPFL Energia guarantee

5th Issue - Renováveis

Single series

100,000,000

 

129.5% of CDI

 

138.06% of CDI

 

12 semi-annual installments from June 2018

 

Liens of quotas from Ludesa
 and contract credits
Dobrevê guarantee

7th Issue - Renováveis

Single series

250,000

 

IPCA + 5.62%

 

IPCA + 6.03%

 

1 installment in June 2022

 

CPFL Energia guarantee

                     
                     

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

   

(1) 100.15% to 106.9% of CDI

                   

(2) 107% to 107.9% of CDI

                   

(3) 108% to 108.1% of CDI

                   

 

 

(*) These debentures can be converted into shares and, therefore, are considered in the calculation of the dilutive effect for the earnings per share (note 24)

 

(**) In accordance with CPC 38/IAS 39, this refers to borrowing costs directly attributable to the issuance of the respective debts.

 

(***) On June 28, 2017, the subsidiary obtained the agreement of the debenture holders for non-compliance with the Debt Service Coverage Ratio (DSCR) indicator relating to the calculation for June 2017 (higher than 1.00) and DSCR relating to the calculation for December 2017 (higher than 1.05).

 

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

 

Maturity

 

Consolidated

From October 1st, 2018

 

           48,562

2019

 

       2,799,651

2020

 

       1,582,302

2021

 

         863,748

2022

 

         400,659

2023 to 2027

 

         698,344

2028 to 2032

 

           43,555

Total

 

       6,436,820

 

 

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Main additions in the period:  

 

           

R$ thousand

  

Company

 

Issue

 

Quantity issued

 

 Released in 2017

 

 Released net of fundraising costs

 

Interest

 

Utilization

CPFL Piratininga

 

8th issue

 

306,000

 

306,000

 

303,442

 

Semiannually

 

Subsidiary's investment plan, debt refinancing and working capital improvement

RGE

 

8th issue

 

380,000

 

380,000

 

376,605

 

Semiannually

 

Subsidiary's investment plan, debt refinancing and working capital improvement

CPFL Renováveis - parent company (a)

 

5th issue

 

100,000,000

 

100,000

 

97,072

 

Semiannually

 

Subsidiary's investment plan

CPFL Renováveis - controladora (a)

 

7th issue

 

250,000

 

250,000

 

243,472

 

Semiannually

 

Subsidiary's investment plan

           

1,036,000

 

1,020,591

       

 

(a) the agreement has no restrictive covenants

 

Pre-payment

 

6th issue - CPFL Paulista, CPFL Piratininga and RGE – In the nine months period ended September 30, 2017, two quotas of principal were paid of the 6th issue of debentures of the subsidiaries CPFL Paulista (R$ 405,660), CPFL Piratininga (R$ 67,610) and RGE (R$ 311,649), whose due date were July 2017 and 2018.

 

5th issue of debentures - CPFL Energia – In the nine months period ended September 30, 2017, R$ 460,194 of the Company’s 5th issue of debentures, with original maturities in October 2019 and 2020, were settled.

 

 

RESTRICTIVE COVENANTS

The debenture agreements are subject to certain restrictive covenants, including covenants that require the Company and its subsidiaries to maintain certain financial ratios within pre-established parameters. Moreover, these agreements contain restrictive non-financial covenants, which are complied with as per the last  measurement period.

Debentures issued in 2017 are subject to restrictive covenants, which require from Company or its subsidiaries to maintain financial ratios, as follows:

CPFL Piratininga and RGE

Maintenance, by the Company, of the following ratios:

·         Net indebtedness divided by EBITDA – maximum of 3.75;

·         EBITDA divided by finance income (expenses) - minimum of 2.25;

The details of the restrictive conditions for other debts are presented in the Financial Statements of December 31, 2016.

The Management of the Group monitors these ratios systematically and constantly to ensure that the conditions are complied with. In the opinion of the Group’s Management, all restrictive covenants and covenants whose indicators are measured semiannually and annually have been properly complied with, as per the last measurement period, that is, June 30, 2017 and December 31, 2016, respectively.

 

 

( 18 )   PRIVATE PENSION PLAN

 

The subsidiaries have supplementary retirement and pension plans for their employees, the characteristics of which are described in note 19 to the financial statements for the year ended December 31, 2016.

18.1    Movements in the defined benefit plans

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

67 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

CPFL Paulista

 

CPFL Piratininga

 

CPFL Geração

 

RGE

 

RGE Sul

 

Total

Net actuarial liability at December 31, 2016

         800,445

 

         139,958

 

           18,954

 

             4,972

 

     74,830

 

      1,039,159

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

           63,376

 

           12,933

 

             1,550

 

               190

 

       7,377

 

          85,426

Sponsors' contributions transferred during the year/period

          (23,213)

 

            (8,728)

 

              (323)

 

            (5,093)

 

      (4,507)

 

         (41,864)

Net actuarial liability at September 30, 2017

         840,608

 

         144,163

 

           20,182

 

                 69

 

     77,700

 

      1,082,721

Other contributions

           11,225

 

                641

 

               146

 

                 94

 

            -  

 

          12,106

Total liability

         851,833

 

         144,804

 

           20,328

 

               163

 

     77,700

 

      1,094,827

                       

Current

                   

          80,091

Noncurrent

                   

      1,014,736

 

The income and expenses recognized as cost of the operation are shown below:

 

 

Nine months 2017

 

CPFL Paulista

 

CPFL Piratininga

 

CPFL Geração

 

RGE

 

RGE Sul

 

Total

Service cost

                531

 

             2,364

 

                 54

 

               204

 

       1,615

 

            4,768

Interest on actuarial obligations

         357,459

 

           95,670

 

             8,574

 

           28,047

 

     38,205

 

         527,955

Expected return on plan assets

        (294,614)

 

          (85,101)

 

            (7,078)

 

          (28,061)

 

    (32,444)

 

        (447,298)

Total expense (income)

           63,376

 

           12,933

 

             1,550

 

               190

 

       7,377

 

          85,426

                       
                       
 

Nine months 2016

 

CPFL Paulista

 

CPFL Piratininga

 

CPFL Geração

 

RGE

 

RGE Sul

 

Total

Service cost

                604

 

             2,248

 

                 55

 

                 35

 

            -  

 

            2,942

Interest on actuarial obligations

         348,598

 

           89,839

 

             8,333

 

           26,078

 

            -  

 

         472,848

Expected return on plan assets

        (303,883)

 

          (87,027)

 

            (7,228)

 

          (26,689)

 

            -  

 

        (424,827)

Effect of asset ceiling

                  -  

 

                  -  

 

                  -  

 

               520

 

            -  

 

               520

Total expense (income)

           45,319

 

             5,060

 

             1,160

 

                (56)

 

            -  

 

          51,483

 

The main assumptions considered in the actuarial calculation, based on the actuarial reports prepared as of  December 31, 2016 and 2015, were as follows:

 

   

CPFL Paulista, CPFL Geração and CPFL Piratininga

 

RGE

 

RGE Sul

   

12/31/2016

 

12/31/2015

 

12/31/2016

 

12/31/2015

 

12/31/2016

                     

Nominal discount rate for actuarial liabilities:

 

10,99% p.a.

 

12,67% p.a.

 

10,99% p.a.

 

12,67% p.a.

 

10,99% p.a.

Nominal return rate on plan assets:

 

10,99% p.a.

 

12,67% p.a.

 

10,99% p.a.

 

12,67% p.a.

 

10,99% p.a.

Estimated rate of nominal salary increase:

 

7,00% p.a.

 

6,79% p.a.

 

8,15% p.a.

 

6,79% p.a.

 

7,29% p.a.

Estimated rate of nominal benefits increase:

 

5,00% p.a.

 

5,00% p.a.

 

5,00% p.a.

 

4,50% p.a.

 

5,00% 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.

 

5,00% p.a.

 

5,00% p.a.

General biometric mortality table:

 

AT-2000 (-10)

 

AT-2000 (-10)

 

BR-EMS sb v.2015

 

AT-2000 (-10)

 

AT-2000

Biometric table for the onset of disability:

 

Low Light

 

Low Light

 

Medium Light

 

Low Light

 

Medium Light

Expected turnover rate:

 

ExpR_2012*

 

ExpR_2012*

 

Null

 

ExpR_2012

 

Null

Likelihood of reaching retirement age:

 

100% when a beneficiary of the plan first becomes eligible

 

100% when a beneficiary of the plan first becomes eligible

 

100% one year after when a beneficiary of the plan first becomes eligible

 

100% when a beneficiary of the plan first becomes eligible

 

100% one year after when a beneficiary of the plan first becomes eligible

(*) FUNCESP experience, with aggravation of 40%

                   

 

 

68 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

( 19 )   REGULATORY CHARGES

 

 

Consolidated

 

September 30, 2017

 

December 31, 2016

Financial compensation for the use of water resources

               826

 

             1,385

Global reversal reserve - RGR

           17,520

 

           17,469

ANEEL inspection fee - TFSEE

             2,094

 

             2,044

Energy development account - CDE

         261,580

 

         309,117

Tariff flags and others

         170,259

 

           36,064

Total

         452,279

 

         366,078

 

Energy development account – CDE: refers to the (i) annual CDE quota for the year 2017 in the amount of R$ 138,135 (R$ 164,681 at December 31, 2016); (ii) quota intended for the refund of the amount contributed to the CDE account for the period from January 2013 to January 2014 totaling R$ 46,797 (R$ 44,622 at December 31, 2016); and (iii) quota intended for the refund of the amount contributed to the Regulated Contracting Environment (ACR) account for the period from February to December 2014, in the amount of R$ 76,648 (R$ 99,814 at December 31, 2016). The subsidiaries matched the payables relating to the CDE account with the receivables relating to the Eletrobras account (note 11) in the nine months period ended September 30, 2017, in the amount of R$ 220,946.

 

( 20 )   TAXES, FEES AND CONTRIBUTIONS

 

 

Consolidated

 

September 30, 2017

 

December 31, 2016

Current

     

IRPJ (corporate income tax)

           75,975

 

           42,793

CSLL (social contribution on net income)

           28,489

 

           14,434

Income tax and social contribution

         104,464

 

           57,227

       

ICMS (State VAT)

         399,408

 

         416,096

PIS (tax on revenue)

           27,259

 

           28,759

COFINS (tax on revenue)

         120,026

 

         126,939

Others

           47,555

 

           52,522

Other taxes

         594,249

 

         624,317

 

 

 

 

Total current

         698,712

 

         681,544

       

Noncurrent

     

PIS (Tax on Revenue)

           21,107

 

           26,814

Other taxes

           21,107

 

           26,814

       

Total  noncurrent

           21,107

 

           26,814

 

 

69 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

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

 

 

 

Consolidated

 

September 30, 2017

 

December 31, 2016

 

Provision for tax, civil and labor risks

 

Escrow Deposits

 

Provision for tax, civil and labor risks

 

Escrow Deposits

               

Labor

            208,128

 

        118,107

 

            222,001

 

      110,147

               

Civil

            301,123

 

        105,554

 

            236,915

 

      114,214

               

Tax

             

FINSOCIAL

              33,819

 

          94,994

 

              32,372

 

        90,951

Income Tax

            148,736

 

        377,776

 

            142,790

 

      150,439

Others

            154,172

 

        136,664

 

            113,227

 

        84,091

 

            336,726

 

        609,434

 

            288,389

 

      325,481

               

Others

            102,471

 

           4,431

 

              85,971

 

             229

               

Total

            948,448

 

        837,526

 

            833,276

 

      550,072

 

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

 

 

Consolidated

 

December 31, 2016

 

Additions

 

Reversals

 

Payments

 

Monetary adjustment

 

Business combinations

 

September 30, 2017

Labor

         222,001

 

           63,065

 

          (28,838)

 

          (68,690)

 

           26,405

 

              (5,817)

 

         208,128

Civil

         236,915

 

           73,726

 

          (23,846)

 

          (84,604)

 

           17,668

 

             81,264

 

         301,123

Tax

         288,389

 

           24,235

 

            (5,968)

 

                (64)

 

           17,342

 

             12,791

 

         336,726

Others

           85,971

 

             4,168

 

                (59)

 

            (7,486)

 

             7,902

 

             11,974

 

         102,471

Total

         833,276

 

         165,194

 

          (58,710)

 

        (160,843)

 

           69,318

 

           100,212

 

         948,448

 

The provision for tax, civil, labor and other risks was based on the assessment of the risks of losses on lawsuits to which the Company and its subsidiaries are parties, where the likelihood of loss is probable in the opinion of the outside legal counselors and the Group’s management.

The details of the nature of the provision for tax, civil, labor and other risks and escrow deposits are presented in the Note 22 of the financial statements at December 31, 2016.

 

Possible losses:

The Company and its subsidiaries are involved in other lawsuits and risks for which Management, supported by the opinion of its outside legal counselors, believes that the likelihood of a favorable outcome is possible as there is a solid defense position for these cases and,  therefore, no provision was recognized. It is not yet possible to predict the outcome of the courts’ decisions or any other decisions in similar proceedings considered as probable or remote.

The claims relating to possible losses at September 30, 2017 and December 31, 2016 were as follows:

 

   

Consolidated

   
   

September 30, 2017

 

December 31, 2016

   
             
 

Labor

            723,054

 

            668,005

 

Work accidents, risk premium for dangerousness at workplace and overtime

 

Civil

         1,161,063

 

         1,004,279

 

Personal injury, environmental impacts and overfed tariffs

 

Tax

         4,740,916

 

         4,611,077

 

ICMS, FINSOCIAL, PIS, COFINS, Income Tax and Social Contribution

 

Regulatory

              84,616

 

              93,827

 

Technical, commercial and economic-financial supervisions

 

Total

         6,709,648

 

         6,377,188

   

 

 

Tax – there is a discussion about the deductibility for income tax of the expense recognized in 1997 relating to the commitment assumed in regard to the pension plan of employees of the subsidiary CPFL Paulista with Fundação CESP in the estimated amount of R$ 1,167,393. In January 2016, the subsidiary obtained court decisions that authorized the replacement of the escrow deposits related to these lawsuits with financial guarantees (letter of guarantee and performance bond), for which the withdrawals on behalf of the subsidiary occurred in 2016. There is an appeal by the Office of Attorney-General of the National Treasury in both cases, without suspensive effect, which is pending a decision of the Federal Regional Court. Concurrently, in February 2017, there was a decision for the refund of the amount related to interest incurred on one of the deposits withdrawn. Therefore, the subsidiary made an escrow deposit of R$ 206,874.

70 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Regarding the labor risks, as described in note 22 to the financial statements for the year ended December 31, 2016, there is a discussion about the possibility of changing the inflation adjustment index used by the Labor Court, the status of such discussion has been unchanged since then and the risk remains as possible.

Based on the opinion of their outside legal counselors, the Group’s management believes that the amounts provided for reflect the current best estimate.

 

( 22 )   OTHER PAYABLES

 

 

   

Consolidated

   

Current

 

Noncurrent

   

September 30, 2017

 

December 31, 2016

 

September 30, 2017

 

December 31, 2016

Consumers and concessionaires

 

           49,088

 

           73,864

 

           43,765

 

           44,711

Energy efficiency program - PEE

 

         258,575

 

         257,622

 

           83,938

 

           58,798

Research & Development - P&D

 

         120,976

 

           75,655

 

           39,196

 

           55,272

EPE / FNDCT / PROCEL

 

           14,031

 

           12,928

 

                  -  

 

                  -  

Reversion fund

 

                  -  

 

                  -  

 

           17,750

 

           17,750

Advances

 

         305,762

 

         163,054

 

             6,903

 

             8,029

Tariff discounts - CDE

 

           13,343

 

             8,891

 

                  -  

 

                  -  

Provision for socio environmental costs

 

           12,586

 

           13,703

 

           67,584

 

           61,828

Payroll

 

           13,045

 

           16,951

 

                  -  

 

                  -  

Profit sharing

 

           43,450

 

           56,215

 

             7,056

 

           11,400

Collection agreements

 

           66,713

 

           69,793

 

                  -  

 

                  -  

Guarantees

 

                  -  

 

                  -  

 

           24,608

 

           44,140

Business combination

 

             6,845

 

             9,492

 

                  -  

 

                  -  

Others

 

           68,610

 

           49,455

 

             2,738

 

             7,364

Total

 

         973,025

 

         807,623

 

         293,538

 

         309,292

 

Advances: refer mainly to advances from customers in relation to advance billing by the subsidiary CPFL Renováveis, before the energy or service has actually been provided or delivered.

 

( 23 )   EQUITY

 

The shareholders’ interest in the Company’s equity at September 30, 2017 and December 31, 2016 is shown below:

 

   

Number of shares

   

September 30, 2017

Shareholders

 

Common shares

 

Interest %

State Grid Brazil Power Participações S.A.

 

       322,078,613

 

31.64%

ESC Energia S.A.

 

       234,086,204

 

23.00%

Members of Executive Board and Board of Directors

 

               23,516

 

0.00%

Other shareholders

 

       461,726,413

 

45.36%

Total

 

    1,017,914,746

 

100.00%

 

 

 

71 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

   

Number of shares

   

December 31, 2016

Shareholders

 

Common shares

 

Interest %

Caixa de Previdência dos Funcionários do Banco do Brasil - Previ

 

       299,787,559

 

29.45%

Camargo Correa S.A.

 

           5,897,311

 

0.58%

ESC Energia S.A.

 

       234,086,204

 

23.00%

Bonaire Participações S.A.

 

           1,249,386

 

0.12%

Energia São Paulo FIA

 

         35,145,643

 

3.45%

Fundação Petrobras de Seguridade Social - Petros

 

         28,056,260

 

2.76%

Fundação Sistel de Seguridade Social

 

         37,070,292

 

3.64%

Fundação Sabesp de Seguridade Social - Sabesprev

 

             696,561

 

0.07%

Fundação CESP

 

         51,048,952

 

5.02%

Members of Executive Board

 

               34,250

 

0.00%

BNDES Participações S.A.

 

         68,592,097

 

6.74%

Antares Holdings Ltda.

 

         16,967,165

 

1.67%

Brumado Holdings Ltda.

 

         36,497,075

 

3.59%

Other shareholders

 

       202,785,991

 

19.92%

Total

 

    1,017,914,746

 

100.00%

 

 

On January 23, 2017, the Company received a correspondence from State Grid Brazil Power Participações S.A.. (“State Grid Brazil”) informing that on that date the Share Purchase Agreement dated September 2, 2016 between State Grid Brazil, Camargo Corrêa S.A., Caixa de Previdência dos Funcionários do Banco do Brasil – PREVI, Fundação CESP, Fundação Sistel de Seguridade Social, Fundação Petrobras de Seguridade Social – PETROS, Fundação SABESP de Seguridade Social — SABESPREV, and certain other parties, had been signed.

After finalizing the transaction, State Grid Brazil became the parent company of CPFL Energia with 54.64% (556,164,817 shares, direct or indirect) of the Company’s voting and total capital.

With the transaction, State Grid Brazil became the only controlling shareholder of the Company, and the Shareholders’ Agreement dated March 22, 2002 signed among the former shareholders was terminated.

On August 14, 2017, the Company disclosed to the Market that Bradespar S.A., due to the merger of its subsidiaries Antares Holdings Ltda. and Brumado Holdings Ltda., became the holder of 53,464,240 common shares issued by the Company, representing 5.25% of the total capital of the Company. This transaction does not entail any change in the Company’s shareholding control or administrative structure.

The details of the items included in equity are described in the financial statements for the year ended December 31, 2016.

 

( 24 )   EARNINGS PER SHARE

 

Earnings per share – basic and diluted

 

The calculation of the basic and diluted earnings per share for the quarters and nine months periods ended September 30, 2017 and 2016 was based on the profit attributable to the controlling shareholders and the weighted average number of common shares outstanding during the reporting periods.

 

   

2017

 

2016

 
   

3rd Quarter

 

Nine months

 

3rd Quarter

 

Nine months

 

Numerator

                 

Profit attributable to controlling shareholders

 

               331,813

 

               721,173

 

               231,565

 

               762,725

 

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

 

                    0.33

 

                    0.71

 

                    0.23

 

                    0.75

 
                   

Numerator

                 

Profit attributable to controlling shareholders

 

               331,813

 

               721,173

 

               231,565

 

               762,725

 

Dilutive effect of convertible debentures of subsidiary CPFL Renováveis

 

                 (2,718)

 

                 (2,718)

 

                 (7,179)

 

                 (7,179)

 

Profit attributable to controlling shareholders

 

               329,094

 

               718,454

 

               224,386

 

               755,546

 
                   

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 - diluted

 

                    0.32

 

                    0.71

 

                    0.22

 

                    0.74

 

 

72 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

(*)Considers the event that occurred on April 29, 2016, related to the capital increase through issue of 24,900,531 shares (note 24). 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

 

 

( 25 )   NET OPERATING REVENUE

 

 

   

Consolidated

   

2017

 

2016

Revenue from Electric Energy Operations

 

3rd quarter

 

Nine months

 

3rd quarter (Restated)

 

Nine months (Restated)

Consumer class

               

Residential

 

        2,708,078

 

        8,580,231

 

        2,304,438

 

        7,611,526

Industrial

 

        1,276,260

 

        3,778,892

 

        1,295,120

 

        3,963,933

Commercial

 

        1,228,395

 

        4,048,359

 

        1,196,170

 

        4,023,477

Rural

 

           273,868

 

           859,869

 

           191,310

 

           552,378

Public administration

 

           176,618

 

           575,827

 

           154,934

 

           495,974

Public lighting

 

           164,093

 

           477,590

 

           139,861

 

           428,024

Public services

 

           249,703

 

           720,235

 

           214,077

 

           665,123

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

 

            (19,876)

 

            (65,029)

 

            (15,654)

 

            (51,277)

Billed

 

        6,057,138

 

       18,975,975

 

        5,480,257

 

       17,689,157

Unbilled (net)

 

             53,122

 

          (168,362)

 

              (5,845)

 

             93,319

(-) Reclassification to Network Usage Charge - TUSD - Captive Consumers

 

       (2,132,292)

 

       (6,959,567)

 

       (2,064,321)

 

       (6,700,140)

Electricity sales to final consumers

 

        3,977,969

 

       11,848,045

 

        3,410,091

 

       11,082,336

                 

Furnas Centrais Elétricas S.A.

 

           144,208

 

           421,449

 

           137,893

 

           396,271

Other concessionaires and licensees

 

           931,259

 

        2,206,234

 

           682,585

 

        1,683,928

(-) Reclassification to Network Usage Charge - TUSD - Captive Consumers

 

            (13,936)

 

            (38,783)

 

            (11,773)

 

            (37,721)

Spot market energy

 

        1,041,576

 

        1,894,284

 

           192,485

 

           320,981

Electricity sales to wholesalers

 

        2,103,107

 

        4,483,184

 

        1,001,189

 

        2,363,459

                 

Revenue due to Network Usage Charge - TUSD - Captive Consumers

 

        2,146,228

 

        6,998,350

 

        2,076,094

 

        6,737,861

Revenue due to Network Usage Charge - TUSD - Free Consumers

 

           514,854

 

        1,578,458

 

           531,631

 

        1,506,994

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

 

              (5,902)

 

            (18,936)

 

              (4,124)

 

            (12,671)

Revenue from construction of concession infrastructure

 

           602,337

 

        1,480,699

 

           325,100

 

           816,950

Sector financial asset and liability (Note 8)

 

        1,244,970

 

        1,049,284

 

          (558,007)

 

       (1,752,239)

Concession financial asset - Adjustment of expected cash flow (Note 10)

 

             10,399

 

             91,713

 

             45,440

 

           197,461

Energy development account - CDE - Low-income, Tariff discounts - judicial injunctions and other tariff discounts

 

           334,024

 

        1,071,948

 

           430,363

 

           925,383

Other revenues and income

 

           145,203

 

           377,339

 

           119,216

 

           323,503

Other operating revenues

 

        4,992,113

 

       12,628,857

 

        2,965,712

 

        8,743,241

Total gross operating revenue

 

       11,073,189

 

       28,960,086

 

        7,376,992

 

       22,189,035

   

 

 

 

 

 

 

 

Deductions from operating revenues

               

ICMS

 

       (1,271,009)

 

       (4,026,211)

 

       (1,103,749)

 

       (3,619,844)

PIS

 

          (164,278)

 

          (439,068)

 

          (111,639)

 

          (341,665)

COFINS

 

          (756,678)

 

       (2,022,379)

 

          (514,251)

 

       (1,573,816)

ISS

 

              (3,844)

 

            (10,438)

 

              (2,817)

 

              (7,719)

Global reversal reserve - RGR

 

                (755)

 

              (2,211)

 

              (2,142)

 

              (3,527)

Energy development account - CDE

 

          (784,740)

 

       (2,399,054)

 

          (788,646)

 

       (2,465,988)

Research and development and energy efficiency programs

 

            (56,047)

 

          (140,481)

 

            (33,494)

 

            (99,783)

PROINFA

 

            (41,414)

 

          (128,181)

 

            (30,732)

 

            (79,641)

Tariff flags and others

 

          (202,835)

 

          (483,898)

 

                (125)

 

          (377,223)

IPI

 

                  (11)

 

                (102)

 

                  (40)

 

                (124)

FUST and FUNTEL

 

                    -  

 

                  (19)

 

                  (10)

 

                  (27)

Others

 

              (7,632)

 

            (22,771)

 

              (6,532)

 

            (19,370)

 

 

       (3,289,243)

 

       (9,674,812)

 

       (2,594,177)

 

       (8,588,728)

Net operating revenue

 

        7,783,946

 

       19,285,274

 

        4,782,815

 

       13,600,307

 

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

   

Consolidated

   

2017

 

2016

Revenue from operations with electricity - in GWh (*)

 

3rd Quarter

 

Nine months

 

3rd Quarter

 

Nine months

Consumer class

               

Residential

 

            4,538

 

              14,256

 

             3,755

 

            12,023

Industrial

 

            3,754

 

              10,896

 

             3,312

 

              9,546

Commercial

 

            2,325

 

                7,609

 

             2,184

 

              7,121

Rural

 

               877

 

                2,811

 

               593

 

              1,624

Public administration

 

               308

 

                1,075

 

               288

 

                 913

Public lighting

 

               497

 

                1,468

 

               432

 

              1,277

Public services

 

               588

 

                1,600

 

               446

 

              1,349

Billed

 

           12,886

 

              39,715

 

           11,010

 

            33,853

Own consumption

 

                   8

 

                    25

 

                   7

 

                   24

Electricity sales to final consumers

 

           12,894

 

              39,740

 

           11,017

 

            33,877

                 

Furnas Centrais Elétricas S.A.

 

               763

 

                2,263

 

               763

 

              2,272

Other concessionaires and licensees

 

            5,845

 

              15,532

 

             3,509

 

              8,934

Spot market energy

 

            2,590

 

                6,963

 

             2,973

 

              4,737

Electricity sales to wholesalers

 

            9,197

 

              24,759

 

             7,245

 

            15,943

 

(*) Information not reviewed by the independent auditors. 

 

   

Consolidated

Nº of consumers (*)

 

September 30, 2017

 

September 30, 2016

Consumer class

       

  Residential

 

      8,284,900

 

      7,036,187

  Industrial

 

           60,098

 

           54,242

  Commercial

 

         545,514

 

         467,295

  Rural

 

         357,943

 

         247,832

  Public Administration

 

           60,695

 

           52,005

  Public Lighting

 

           11,118

 

           10,843

  Public Services

 

             9,765

 

             8,580

Total

 

      9,330,033

 

      7,877,828

(*) Information not reviewed by the independent auditors.

 

25.1    Adjustment of revenues from excess demand and excess reactive power

The information related to the recognition and historical data are described in note 27.1 to the financial statements for the year ended December 31, 2016. 

 

25.2     Periodic tariff review (“RTP”) and Annual tariff adjustment (“RTA”)

 

       

2017

 

2016

Subsidiary

 

Month

 

RTA

 

Effect perceived by consumers (a)

 

RTA / RTP

 

Effect perceived by consumers (a)

CPFL Paulista

 

April

 

-0.80%

 

-10.50%

 

9.89%

 

7.55%

CPFL Piratininga

 

October (b)

 

7.69%

 

17.28%

 

-12.54%

 

-24.21%

RGE

 

June

 

3.57%

 

5.00%

 

-1.48%

 

-7.51%

RGE Sul

 

April

 

-0.20%

 

-6.43%

 

3.94%

 

-0.34%

CPFL Santa Cruz

 

March

 

-2.44%

 

-8.42%

 

22.51%

 

7.15%

CPFL Leste Paulista

 

March

 

-1.20%

 

-4.15%

 

21.04%

 

13.32%

CPFL Jaguari

 

March

 

-0.74%

 

-2.56%

 

29.46%

 

13.25%

CPFL Sul Paulista

 

March

 

-3.12%

 

-10.73%

 

24.35%

 

12.82%

CPFL Mococa

 

March

 

-0.95%

 

-3.28%

 

16.57%

 

9.02%

 

 

(a) Represents the average effect perceived by the consumer, as a result of the elimination from the tariff base of financial components that had been added in the prior tariff adjustment (information not reviewed by the independent auditors).

 (b) As described in note 34.1, the RTA for CPFL Piratininga occurred in October, 2017.

 

74 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

25.3 Energy Development Account (CDE) – Low income, other tariff subsidies and tariff discounts - injunctions

All the details about CDE are described in note 27.4 of the financial statements for the year ended December 31, 2016.

In the nine months period ended September 30, 2017, revenue of R$ 1,071,948 was recognized (R$ 739,110 in the nine months period ended September 30, 2016), of which (i) R$ 75,509 related to low-income subsidy (R$ 70,912 in the nine months period ended September 30, 2016), (ii) R$ 908,434 related to other tariff discounts (R$ 668,198 in the nine months period ended September 30, 2016) and (iii) R$ 88,005 related to tariff discounts - injunctions. These items were recognized against other receivables, in line item Trade receivables - Eletrobrás (note 11) and other payables in line item Tariff discounts - CDE (note 22).

 

25.4Tariff flags

The system for applying the Tariff Flags is described in note 27.5 to the financial statements for the year ended December 31, 2016.

In the nine months period ended September 30, 2017, ANEEL approved the tariff flags billed from December 2016 to July 2017 of the distribution subsidiaries. The amount billed in this period was R$ 344,278, of this amount R$ 160,995 were used to offset part of the sector financial asset and liability (note 8) and R$ 183,283 were passed on to the Centralizing Account for Tariff Flag Resources (CCRBT).  R$ 170,241, related to tariff flag billed in August and September 2017 and not yet approved, are recorded in regulatory charges (nota 19).

 

25.5 Energy development account (“CDE”)

ANEEL, by means of Ratifying Resolution (“REH”) No. 2,202 of February 7, 2017, amended by REH No. 2,204 of March 7, 2017, established the definitive annual quotas of CDE for the year 2017. These quotas comprise: (i) annual quota of the CDE – USAGE account; and (ii) quota of the CDE – Energy account, related to part of the CDE contributions received by the electric energy distribution concessionaires in the period from January 2013 to January 2014, which should be charged from consumers and passed on to the CDE Account in up to five years from the RTE of 2015. Furthermore, by means of REH No. 2.004 of December 15, 2015, ANEEL established another quota intended for the amortization of the ACR Account, whose amount were updated by REH No. 2.231, of April 25, 2017, with payment and transfer to the CDE Account for the tariff period of each subsidiary.

 

25.6Adjustment for refunding the Reserve Energy Charge ("EER") of Angra III

ANEEL approved through REH No. 2,214 of March 28, 2017 the republication of the energy tariff – TE and Distribution System Usage Tariff - TUSD for the distribution subsidiaries, with the purpose of refunding the amount forecast for the Reserve Energy Charge (EER) of the energy generation company UTN Almirante Alvaro Alberto - Unit III (Angra III).

The tariffs resulting from this decision were effective in April 2017, however, as the reading period of each consuming unit does not coincide with the calendar month, this reduction occurred in the revenue amounts of April and May 2017, with its impact diluted between the two periods.

The average effect perceived by consumers was: -15.28% for CPFL Paulista, -6.8% for CPFL Piratininga, -10.89% for RGE, -13.76% for RGE Sul, -13.41% for CPFL Santa Cruz, -16.49% for CPFL Jaguari, -14.81% for CPFL Leste Paulista, -14.71% for CPFL Mococa, and -14.29% for CPFL Sul Paulista.

The estimated impact of this adjustment is an average reduction of -12.85% in revenues of distribution subsidiaries in April 2017.

 

 

75 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

( 26 )   COST OF ELECTRIC ENERGY

 

 

   

Consolidated

   

2017

 

2016

Electricity Purchased for Resale

 

3rd Quarter

 

Nine months

 

3rd Quarter

 

Nine months

Itaipu Binacional

 

         595,889

 

           1,763,987

 

         462,469

 

         1,513,184

Spot market / PROINFA

 

         114,110

 

              315,928

 

           80,271

 

            169,721

Energy purchased through auction in the regulated market and bilateral contracts

 

      4,540,978

 

         10,366,187

 

      2,168,998

 

         5,960,300

PIS and COFINS credit

 

        (478,219)

 

          (1,134,417)

 

        (246,031)

 

           (697,945)

Subtotal

 

      4,772,758

 

         11,311,684

 

      2,465,707

 

         6,945,260

                 

Electricity Network Usage Charge

               

Basic network charges

 

         491,691

 

              988,004

 

         198,405

 

            602,168

Transmission from Itaipu

 

           66,358

 

                96,896

 

           13,386

 

              38,799

Connection charges

 

           30,950

 

                90,764

 

           22,142

 

              57,487

Charges for use of the distribution system

 

            7,515

 

                29,581

 

            9,272

 

              28,179

System service charges - ESS

 

          (75,657)

 

             (224,185)

 

           84,763

 

            281,672

Reserve energy charges - EER

 

                (74)

 

                     (91)

 

            5,538

 

            106,925

PIS and COFINS credit

 

          (47,457)

 

               (87,399)

 

          (28,700)

 

             (97,410)

Subtotal

 

         473,326

 

              893,571

 

         304,806

 

         1,017,820

                 

Total

 

      5,246,084

 

         12,205,255

 

      2,770,513

 

         7,963,080

 

 

   

Consolidated

   

2017

 

2016

Electricity Purchased for Resale

 

3rd Quarter

 

Nine months

 

3rd Quarter

 

Nine months

Itaipu Binacional

 

         595,889

 

           1,763,987

 

         462,469

 

         1,513,184

Spot market / PROINFA

 

         114,110

 

              315,928

 

           80,271

 

            169,721

Energy purchased through auction in the regulated market and bilateral contracts

 

      4,540,978

 

         10,366,187

 

      2,168,998

 

         5,960,300

PIS and COFINS credit

 

        (478,219)

 

          (1,134,417)

 

        (246,031)

 

           (697,945)

Subtotal

 

      4,772,758

 

         11,311,684

 

      2,465,707

 

         6,945,260

                 

Electricity Network Usage Charge

               

Basic network charges

 

         491,691

 

              988,004

 

         198,405

 

            602,168

Transmission from Itaipu

 

           66,358

 

                96,896

 

           13,386

 

              38,799

Connection charges

 

           30,950

 

                90,764

 

           22,142

 

              57,487

Charges for use of the distribution system

 

            7,515

 

                29,581

 

            9,272

 

              28,179

System service charges - ESS

 

          (75,657)

 

             (224,185)

 

           84,763

 

            281,672

Reserve energy charges - EER

 

                (74)

 

                     (91)

 

            5,538

 

            106,925

PIS and COFINS credit

 

          (47,457)

 

               (87,399)

 

          (28,700)

 

             (97,410)

Subtotal

 

         473,326

 

              893,571

 

         304,806

 

         1,017,820

                 

Total

 

      5,246,084

 

         12,205,255

 

      2,770,513

 

         7,963,080

 

   

Consolidated

   

2017

 

2016

Electricity Purchased for Resale - in GWh (*)

 

3rd Quarter

 

Nine months

 

3rd Quarter

 

Nine months

Itaipu Binacional

 

             2,972

 

                8,806

 

             2,556

 

             7,603

Spot market/PROINFA

 

               630

 

                2,457

 

               461

 

             1,631

Energy purchased through auction in  the regulated market and bilateral contracts

 

           16,054

 

              47,342

 

           13,073

 

           36,808

Total

 

           19,656

 

              58,605

 

           16,090

 

           46,042

(*) Information not reviewed by the independent auditors

               

 

 

( 27 )      OPERATING COSTS AND EXPENSES

 

 

 

Parent Company

 

General and Administrative expenses

 

2017

 

2016

 

3rd Quarter

 

Nine months

 

3rd Quarter

 

Nine months

Personnel

               4,675

 

             24,169

 

             12,391

 

             28,345

Materials

                    37

 

                  103

 

                    18

 

                    62

Third party services

               2,111

 

               5,572

 

               2,740

 

               6,645

Depreciation and amortization

                    55

 

                  163

 

                    46

 

                  148

Others

                  793

 

               1,736

 

                  888

 

               1,825

Leases and rentals

                    13

 

                  223

 

                    12

 

                    37

Publicity and advertising

                  248

 

                  508

 

                  189

 

                  350

Legal, judicial and indemnities

                  168

 

                  174

 

                  276

 

                  406

Donations, contributions and subsidies

                    -  

 

                    15

 

                    -  

 

                    -  

Others

                  365

 

                  816

 

                  410

 

               1,031

Total

               7,672

 

             31,743

 

             16,083

 

             37,025

 

 

 

76 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

 

Consolidated

 

3rd Quarter

 

 

 

 

 

Services rendered to third parties

 

Operating expenses

   

 

 

 

Operating costs

   

Sales

 

General

 

Other

 

Total

 

2017

 

2016

 

2017

 

2016

 

2017

 

2016

 

2017

 

2016

 

2017

 

2016

 

2017

 

2016

Personnel

         217,549

 

         160,273

 

                      1

 

                 -  

 

           40,862

 

           32,061

 

           70,769

 

           68,855

 

                 -  

 

                 -  

 

         329,180

 

         261,189

Private Pension Plans

           28,483

 

           23,658

 

                     -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

           28,483

 

           23,658

Materials

           62,466

 

           59,038

 

                   558

 

               211

 

              (305)

 

            2,121

 

            6,733

 

            3,396

 

                 -  

 

                 -  

 

           69,452

 

           64,766

Third party services

           59,930

 

           66,425

 

                   501

 

               627

 

           40,466

 

           36,662

 

           72,923

 

           52,817

 

                 -  

 

                 -  

 

         173,821

 

         156,531

Depreciation and amortization

         290,885

 

         228,852

 

                     -  

 

                 -   

 

            1,304

 

               979

 

           21,140

 

           24,371

 

                 -  

 

                 -  

 

         313,329

 

         254,202

Costs of infrastructure construction

                 -  

 

                 -  

 

            598,698

 

         324,154

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

         598,698

 

         324,154

Others

           39,115

 

           23,938

 

                     (3)

 

                  (2)

 

           52,498

 

           51,857

 

           27,815

 

           42,631

 

         105,702

 

           74,560

 

         225,127

 

         192,984

Collection fees

            2,915

 

                 -  

 

                     -  

 

                 -  

 

           18,045

 

           16,205

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

           20,960

 

           16,205

Allowance for doubtful accounts

                 -  

 

                 -  

 

                     -  

 

                 -  

 

           32,817

 

           34,161

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

           32,817

 

           34,161

Leases and rentals

           12,957

 

            9,909

 

                     -  

 

                 -  

 

                 33

 

                 -  

 

            4,698

 

            3,885

 

                 -  

 

                 -  

 

           17,688

 

           13,794

Publicity and advertising

                 60

 

                 60

 

                     -  

 

                 -  

 

                 41

 

                 -  

 

            4,527

 

            3,971

 

                 -  

 

                 -  

 

            4,628

 

            4,031

Legal, judicial and indemnities

                 -  

 

                 -  

 

                     -  

 

                 -  

 

                (40)

 

                 -  

 

            8,402

 

           29,258

 

                 -  

 

                 -  

 

            8,362

 

           29,258

Donations, contributions and subsidies

                 17

 

                 22

 

                     -  

 

                 -  

 

                 -  

 

                   3

 

               704

 

                 69

 

                 -  

 

                 -  

 

               721

 

                 94

Gain (loss) on disposal, retirement and other noncurrent assets

                 -  

 

                 -  

 

                     -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

           50,414

 

           12,290

 

           50,414

 

           12,290

Amortization of concession intangible asset

                 -  

 

                 -  

 

                     -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

           71,294

 

           62,365

 

           71,294

 

           62,365

Amortization of the risk premium paid -GSF

            2,398

 

            2,400

 

                     -  

 

                 -  

 

                 -  

 

                 -  

 

                 -   

 

                 -  

 

                 -  

 

                 -  

 

            2,398

 

            2,400

Fee for the use of water

            1,402

 

            2,936

 

                     -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

            1,402

 

            2,936

Others

           19,365

 

            8,612

 

                     (3)

 

                  (2)

 

            1,603

 

            1,489

 

            9,485

 

            5,449

 

          (16,006)

 

                (95)

 

           14,443

 

           15,453

Total

         698,427

 

         562,184

 

            599,755

 

         324,990

 

         134,824

 

         123,680

 

         199,380

 

         192,069

 

         105,702

 

           74,560

 

      1,738,089

 

      1,277,483

                                               
                                               
 

Consolidated

 

Nine months

 

 

 

 

 

Services rendered to third parties

 

Operating expenses

   

 

 

 

Operating costs

   

Sales

 

General

 

Other

 

Total

 

2017

 

2016

 

2017

 

2016

 

2017

 

2016

 

2017

 

2016

 

2017

 

2016

 

2017

 

2016

Personnel

         639,033

 

         485,120

 

                      2

 

                   1

 

         126,445

 

           93,951

 

         232,862

 

         194,285

 

                 -  

 

                 -  

 

         998,342

 

         773,357

Private Pension Plans

           85,426

 

           51,483

 

                     -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

           85,426

 

           51,483

Materials

         162,061

 

         124,936

 

                   856

 

               471

 

            4,432

 

            5,331

 

           14,659

 

           13,083

 

                 -  

 

                 -  

 

         182,008

 

         143,821

Third party services

         198,894

 

         199,037

 

                1,285

 

            1,414

 

         123,734

 

         105,282

 

         224,297

 

         157,586

 

                 -  

 

                 -  

 

         548,210

 

         463,318

Depreciation and amortization

         852,521

 

         676,204

 

                     -  

 

                 -   

 

            4,146

 

            2,635

 

           70,109

 

           71,458

 

                 -  

 

                 -  

 

         926,776

 

         750,297

Costs of infrastructure construction

                 -  

 

                 -  

 

          1,478,990

 

         815,681

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

      1,478,990

 

         815,681

Others

         117,091

 

           86,037

 

                     (5)

 

                  (8)

 

         167,722

 

         180,576

 

         174,243

 

         170,785

 

         299,048

 

         218,403

 

         758,098

 

         655,794

Collection fees

            8,741

 

                 -  

 

                     -  

 

                 -  

 

           52,090

 

           47,519

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

           60,831

 

           47,519

Allowance for doubtful accounts

                 -  

 

                 -  

 

                     -  

 

                 -  

 

         118,885

 

         130,026

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

         118,885

 

         130,026

Leases and rentals

           38,832

 

           28,386

 

                     -  

 

                 -  

 

              (128)

 

                 -  

 

           14,055

 

           12,682

 

                 -  

 

                 -  

 

           52,759

 

           41,068

Publicity and advertising

               187

 

               103

 

                     -  

 

                 -  

 

                 41

 

                 16

 

           12,040

 

            9,312

 

                 -  

 

                 -  

 

           12,267

 

            9,431

Legal, judicial and indemnities

                 -  

 

                 -  

 

                     -  

 

                 -  

 

                (40)

 

                 -  

 

         122,025

 

         138,227

 

                 -  

 

                 -  

 

         121,985

 

         138,227

Donations, contributions and subsidies

                 71

 

                 36

 

                     -  

 

                 -  

 

                   2

 

                   6

 

            3,262

 

               127

 

                 -  

 

                 -  

 

            3,335

 

               169

Gain (loss) on disposal, retirement and other noncurrent assets

                 -  

 

                 -  

 

                     -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

           99,689

 

           32,272

 

           99,689

 

           32,272

Amortization of concession intangible asset

                 -  

 

                 -  

 

                     -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

         215,526

 

         186,272

 

         215,526

 

         186,272

Amortization of the risk premium paid -GSF

            7,195

 

            7,200

 

                     -  

 

                 -  

 

                 -  

 

                 -  

 

                 -   

 

                 -  

 

                 -  

 

                 -  

 

            7,195

 

            7,200

Fee for the use of water

            6,365

 

            9,909

 

                     -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

                 -  

 

            6,365

 

            9,909

Others

           55,701

 

           40,403

 

                     (5)

 

                  (8)

 

           (3,128)

 

            3,009

 

           22,861

 

           10,438

 

          (16,167)

 

              (141)

 

           59,262

 

           53,700

Total

      2,055,025

 

      1,622,816

 

          1,481,128

 

         817,558

 

         426,479

 

         387,775

 

         716,170

 

         607,198

 

         299,048

 

         218,402

 

      4,977,850

 

      3,653,749

 

 

 

77 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

( 28 )   FINANCE INCOME (EXPENSES)

 

 

                               
 

Parent company

 

Consolidated

 

3rd Quarter 2017

 

Nine months 2017

 

3rd Quarter 2016

 

Nine months 2016

 

3rd Quarter 2017

 

Nine months 2017

 

3rd Quarter 2016 (Restated)

 

Nine months 2016
(Restated)

Financial income

                             

Income from financial investments

             1,051

 

             3,449

 

           21,251

 

           48,516

 

           94,177

 

         383,653

 

         186,959

 

         484,733

Late payment interest and fines

                  -  

 

                   2

 

               460

 

               464

 

           60,858

 

         203,693

 

           58,088

 

         174,934

Adjustment for inflation of tax credits

             3,942

 

             6,211

 

             1,569

 

             5,419

 

             9,866

 

           14,821

 

             9,528

 

           27,078

Adjustment for inflation of escrow deposits

                   6

 

                 19

 

                 12

 

                 34

 

           13,847

 

           39,911

 

             9,287

 

           26,835

Adjustment for inflation and exchange rate changes

                  -  

 

                   8

 

                  -  

 

                   1

 

           20,848

 

           50,125

 

           29,647

 

         131,639

Discount on purchase of ICMS credit

                  -  

 

                  -  

 

                  -  

 

                  -  

 

             3,501

 

             9,281

 

             1,808

 

           13,454

Adjustments to the sector financial asset (note 8)

                  -  

 

                  -  

 

                  -  

 

                  -  

 

            (1,105)

 

                  -  

 

            (5,944)

 

           50,643

PIS and COFINS on other finance income

              (429)

 

              (892)

 

            (1,248)

 

            (3,109)

 

          (10,118)

 

          (37,298)

 

          (22,882)

 

          (44,915)

PIS and COFINS on interest on own capital

            (1,545)

 

            (1,574)

 

                (14)

 

            (1,156)

 

            (1,545)

 

            (1,574)

 

                (14)

 

            (1,156)

Others

             3,971

 

             8,755

 

             3,290

 

           11,537

 

           15,224

 

           46,283

 

           19,835

 

           68,910

Total

             6,995

 

           15,979

 

           25,321

 

           61,706

 

         205,553

 

         708,896

 

         286,310

 

         932,154

                               

Finance expenses

                             

Interest on debts

          (19,199)

 

          (61,203)

 

            (1,772)

 

          (10,885)

 

        (393,441)

 

     (1,321,202)

 

        (447,606)

 

     (1,315,996)

Adjustment for inflation and exchange rate changes

                   3

 

                   2

 

            (3,916)

 

          (25,959)

 

          (98,415)

 

        (436,458)

 

        (226,964)

 

        (515,106)

(-) Capitalized interest

                  -  

 

                  -  

 

                  -  

 

                  -  

 

             8,057

 

           42,215

 

           18,493

 

           52,432

Adjustments to the sector financial liability ( note 8)

                  -  

 

                  -  

 

                  -  

 

                  -  

 

          (30,390)

 

          (80,781)

 

              (996)

 

          (17,257)

Use of public asset

                  -  

 

                  -  

 

                  -  

 

                  -  

 

            (1,031)

 

            (4,660)

 

            (4,120)

 

          (12,470)

Others

            (3,455)

 

            (3,603)

 

                  (1)

 

              (470)

 

          (33,732)

 

        (105,717)

 

          (42,010)

 

        (123,633)

Total

          (22,651)

 

          (64,804)

 

            (5,689)

 

          (37,315)

 

        (548,953)

 

     (1,906,602)

 

        (703,203)

 

     (1,932,030)

                               

Finance expense, net

          (15,656)

 

          (48,825)

 

           19,631

 

           24,391

 

        (343,400)

 

     (1,197,706)

 

        (416,893)

 

        (999,877)

 

Interest was capitalized at an average rate of 9.40% p.a. during the nine months period ended September 30, 2017 (10.87% p.a. in the nine months period ended September 30, 2016) on qualifying assets, in accordance with CPC 20 (R1) and IAS 23.

The line item Adjustment for inflation and exchange rate changes includes the effects of losses on derivative instruments amounting to R$ 299,160 in the nine months period ended September 30, 2017 (R$ 1,345,605 in the nine months period ended September 30, 2016) (note 32).

 

( 29 )   SEGMENT INFORMATION 

 

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

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

The information segregated by segment is presented below, according to the criteria established by the Group’s officers:

 

Distribution

 

Generation
(conventional source)

 

Generation
(renewable source)

 

Commercialization

 

Services

 

Other (*)

 

Elimination

 

Total

Nine months 2017

                             

Net operating revenue

     15,320,657

 

            506,494

 

            996,327

 

                2,362,076

 

           41,296

 

           58,424

     

     19,285,274

(-) Intersegment revenues

           22,710

 

            323,729

 

            419,460

 

                      7,809

 

         312,135

 

             9,197

 

     (1,095,040)

 

                  -  

Cost of electric energy

    (10,089,747)

 

             (91,464)

 

           (218,864)

 

               (1,805,180)

 

                  -  

 

                  -  

     

    (12,205,255)

Operating costs and expenses

     (3,096,790)

 

             (75,629)

 

           (271,917)

 

                    (27,248)

 

        (284,738)

 

          (79,225)

     

     (3,835,548)

(-) Intersegment costs and expenses

        (590,345)

 

             (11,924)

 

             (57,747)

 

                  (419,997)

 

            (7,953)

 

            (7,074)

 

      1,095,040

 

                  -  

Depreciation and amortization

        (569,327)

 

             (92,344)

 

           (461,530)

 

                     (2,409)

 

          (14,384)

 

            (2,308)

     

     (1,142,302)

Income from electric energy service

         997,159

 

            558,861

 

            405,729

 

                   115,051

 

           46,355

 

          (20,987)

     

      2,102,168

Equity

                  -  

 

            252,709

 

                    -  

 

                           -  

 

                  -  

 

                  -  

     

         252,709

Finance income

         472,228

 

              89,450

 

            106,957

 

                     12,586

 

             7,092

 

           20,582

     

         708,896

Finance expenses

        (951,199)

 

           (353,983)

 

           (494,239)

 

                    (37,333)

 

            (4,838)

 

          (65,011)

     

     (1,906,602)

(-) Intersegment finance income (expense)

             1,372

 

               (1,297)

 

              10,881

 

                     (5,182)

 

                 48

 

            (5,822)

     

                  -  

Profit (loss) before taxes

         519,560

 

            545,741

 

              29,328

 

                     85,122

 

           48,658

 

          (71,238)

     

      1,157,171

Income tax and social contribution

        (235,340)

 

             (96,922)

 

             (50,044)

 

                    (29,467)

 

          (10,861)

 

           10,954

     

        (411,680)

Profit (loss) for the period

         284,221

 

            448,818

 

             (20,716)

 

                     55,654

 

           37,797

 

          (60,284)

     

         745,490

Attributable to owners of the Company

         284,221

 

            412,370

 

              (8,585)

 

                     55,654

 

           37,797

 

          (60,284)

     

         721,173

Attributable to noncontrolling interests

                  -  

 

              36,448

 

             (12,130)

 

                           -  

 

                  -  

 

                  -  

     

           24,318

Total assets (**)

     22,750,421

 

          4,220,825

 

       12,796,051

 

                   831,834

 

         403,661

 

         790,685

     

     41,793,477

Purchases of PP&E and intangible assets

      1,264,243

 

                3,197

 

            565,671

 

                      2,100

 

           40,909

 

               751

     

      1,876,871

 

78 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

Distribution

 

Generation
(conventional source)

 

Generation
(renewable source)

 

Commercialization

 

Services

 

Other (*)

 

Elimination

 

Total

Nine months 2016 Restated (***)

                             

Net operating revenue

     10,690,753

 

            436,358

 

            934,182

 

                1,427,923

 

           68,225

 

           42,866

     

     13,600,307

(-) Intersegment revenues

           16,752

 

            304,028

 

            229,817

 

                     50,015

 

         229,907

 

             6,330

 

        (836,850)

 

                  -  

Cost of electric energy

     (6,659,834)

 

             (64,996)

 

           (142,772)

 

               (1,095,478)

 

                  -  

 

                  -  

     

     (7,963,080)

Operating costs and expenses

     (2,091,100)

 

             (72,332)

 

           (221,903)

 

                    (25,717)

 

        (228,429)

 

          (77,700)

     

     (2,717,181)

(-) Intersegment costs and expenses

        (483,762)

 

               (8,992)

 

             (75,700)

 

                  (252,926)

 

            (8,641)

 

            (6,828)

 

         836,850

 

                  -  

Depreciation and amortization

        (421,536)

 

             (92,991)

 

           (406,679)

 

                     (2,879)

 

            (9,933)

 

            (2,549)

     

        (936,569)

Income from electric energy service

      1,051,273

 

            501,075

 

            316,945

 

                   100,937

 

           51,129

 

          (37,881)

     

      1,983,477

Equity

                  -  

 

            200,944

 

                    -  

 

                           -  

 

                  -  

 

                  -  

     

         200,944

Finance income

         616,665

 

            131,604

 

              97,742

 

                     25,317

 

             6,845

 

           53,981

     

         932,154

Finance expenses

        (977,675)

 

           (413,364)

 

           (492,310)

 

                    (19,003)

 

            (6,530)

 

          (23,149)

     

     (1,932,030)

(-) Intersegment finance income (expense)

           11,222

 

               (1,915)

 

                  674

 

                      7,795

 

             2,764

 

          (20,540)

     

                  -  

Profit (loss) before taxes

         701,486

 

            418,345

 

             (76,950)

 

                   115,045

 

           54,209

 

          (27,590)

     

      1,184,545

Income tax and social contribution

        (274,371)

 

             (74,189)

 

             (39,837)

 

                    (36,169)

 

          (13,158)

 

            (4,967)

     

        (442,691)

Profit (loss) for the period

         427,114

 

            344,156

 

           (116,787)

 

                     78,877

 

           41,051

 

          (32,556)

     

         741,854

Attributable to owners of the Company

         427,114

 

            311,412

 

             (63,172)

 

                     78,877

 

           41,051

 

          (32,556)

     

         762,725

Attributable to noncontrolling interests

                  -  

 

              32,744

 

             (53,616)

 

                           -  

 

                  -  

 

                  -  

     

          (20,871)

Total assets (**)

     22,887,781

 

          5,310,924

 

       12,459,791

 

                   466,021

 

         345,372

 

         701,103

     

     42,170,992

Purchases of PP&E and intangible assets

         709,200

 

              11,728

 

            802,228

 

                      2,490

 

           31,312

 

             2,728

     

      1,559,686

 

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

(**) The intangible assets, net of amortization, were allocated to the respective segments.

(***) For total assets, the balances refer to December 31, 2016.

 

( 30 )   RELATED PARTY TRANSACTIONS

 

The Company’s controlling shareholders are as follows:

·   State Grid Brazil Power Participações S.A.

Indirect subsidiary of State Grid Corporation of China, a Chinese state-owned company primarily engaged in developing and operating businesses in the electric energy sector.

·   ESC Energia S.A.

Subsidiary of State Grid Brazil Power Participações S.A.

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

Controlling shareholders, subsidiaries, associates, joint ventures and entities under common control and that in some way exercise significant influence over the Company and its subsidiaries and associates were considered as related parties.

The main natures and transactions are described in note 32 to the financial statements for the year ended December 31, 2016.

To ensure that the trading transactions with related parties are conducted under usual market conditions, the Group set up a “Related Parties Committee”, comprising representatives of the controlling shareholders, of the Company and an independent member, which analyzes the main transactions with related parties.

The total compensation of key management personnel in the nine months period ended September 30, 2017, as required by CVM Resolution 560/2008, was R$ 50,675 (R$ 41,764 in the nine months period ended September 30, 2016). This amount is comprised by R$ 49,625 related to short-term benefits (R$ 40,805 in the nine months period ended September 30, 2016), R$ 925 to post-employment benefits (R$ 836 in the nine months period ended September 30, 2016) and R$ 126 to others long-term benefits (R$ 123 in the nine months period ended September 30, 2016), and refers to the amount recognized on the accrual basis.

Transactions with entities under common control basically refers to transmission system charge paid by the Company’s subsidiaries to the direct or indirect  subsidiaries of State Grid Corporation of China.

 

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

79 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

 

 Consolidated

 

 September 30, 2017

 

 Nine months 2017

 

Asset

 

Liability

 

Income

 

Expense

Advances

             

BAESA – Energética Barra Grande S.A.

                   -  

 

                 700

 

                   -  

 

                   -  

Foz do Chapecó Energia S.A.

                   -  

 

                 992

 

                   -  

 

                   -  

ENERCAN - Campos Novos Energia S.A.

                   -  

 

              1,226

 

                   -  

 

                   -  

EPASA - Centrais Elétricas da Paraiba

                   -  

 

                 446

 

                   -  

 

                   -  

               

Energy purchases and sales, and charges

             

Entities under common control

                   -  

 

                 599

 

                   -  

 

             65,075

BAESA – Energética Barra Grande S.A.

                   -  

 

             17,096

 

                   -  

 

             50,527

Foz do Chapecó Energia S.A.

                   -  

 

             36,374

 

                   -  

 

           284,399

ENERCAN - Campos Novos Energia S.A.

                 802

 

             51,746

 

              6,568

 

           211,011

EPASA - Centrais Elétricas da Paraiba

                   -  

 

             32,015

 

                   -  

 

             94,768

               

Intangible assets, property, plant and equipment, materials and services rendered

             

BAESA – Energética Barra Grande S.A.

                 221

 

                   -  

 

              1,181

 

                   -  

Foz do Chapecó Energia S.A.

                     2

 

                   -  

 

              1,307

 

                   -  

ENERCAN - Campos Novos Energia S.A.

                 152

 

                   -  

 

              1,242

 

                   -  

EPASA - Centrais Elétricas da Paraíba S.A.

                 341

 

                   -  

 

                (544)

 

                   -  

               

Intragroup loans

             

EPASA - Centrais Elétricas da Paraíba S.A.

                   -  

 

                   -  

 

                 327

 

                   -  

Noncontrolling shareholder of CPFL Renováveis

              6,184

 

                   -  

 

                 185

 

                   -  

               

Dividends and interest on capital

             

ENERCAN - Campos Novos Energia S.A.

           106,237

 

                   -  

 

                   -  

 

                   -  

               

Others

             

Instituto CPFL

                   -  

 

                   -  

 

                   -  

 

              2,893

 

The comparative information below refers to the period in which  the controlling shareholders were those prior to the change of control described in note 23. 

 

 

 Consolidated

 

 December 31, 2016

 

 Nine months 2016

 

Asset

 

Liability

 

Income

 

Expense

Bank balance and short term investment

             

Banco Bradesco S.A.

                     -  

 

                     -  

 

             200,564

 

                   539

Banco do Brasil S.A.

               48,985

 

                     -  

 

                1,302

 

                       1

               

Borrowings, Debentures and Derivatives

             

Banco Bradesco S.A.

                     -  

 

                     -  

 

               15,732

 

               50,103

Banco do Brasil S.A.

                     -  

 

          4,257,562

 

                     -  

 

             349,777

Banco BNP Paribas Brasil S.A

                5,126

 

                     -  

 

                     -  

 

               43,305

               

Other financial transactions

 

 

         

Banco Bradesco S.A.

                     -  

 

                     -  

 

                     50

 

               10,194

Banco do Brasil S.A.

                     -  

 

                   962

 

                   156

 

                4,781

               

Advances

             

BAESA – Energética Barra Grande S.A.

                     -  

 

                   726

 

                     -  

 

                     -  

Foz do Chapecó Energia S.A.

                     -  

 

                1,025

 

                     -  

 

                     -  

ENERCAN - Campos Novos Energia S.A.

                     -  

 

                1,269

 

                     -  

 

                     -  

EPASA - Centrais Elétricas da Paraiba

                     -  

 

                   462

 

                     -  

 

                     -  

 

 

80 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

Energy purchases and sales, and charges

             

Afluente Transmissão de Energia Elétrica S.A.

                     -  

 

                     53

 

                     -  

 

                   891

Aliança Geração de Energia S.A

                     -  

 

                1,183

 

                       3

 

               38,479

Arizona 1 Energia Renovável S.A

                     -  

 

                     -  

 

                     -  

 

                   720

Baguari I Geração de Energia Elétrica S.A.

                     -  

 

                       6

 

                     -  

 

                   217

BRF Brasil Foods

                     -  

 

                     -  

 

               14,152

 

                     -  

Braskem S.A.

                     -  

 

                     -  

 

                     -  

 

               16,023

Caetite 2 Energia Renovável S.A.

                     -  

 

                     -  

 

                     -  

 

                   662

Caetité 3 Energia Renovável S.A.

                     -  

 

                     -  

 

                     -  

 

                   668

Calango 1 Energia Renovável S.A.

                     -  

 

                     -  

 

                     -  

 

                   799

Calango 2 Energia Renovável S.A.

                     -  

 

                     -  

 

                     -  

 

                   681

Calango 3 Energia Renovável S.A.

                     -  

 

                     -  

 

                     -  

 

                   799

Calango 4 Energia Renovável S.A.

                     -  

 

                     -  

 

                     -  

 

                   742

Calango 5 Energia Renovável S.A.

                     -  

 

                     -  

 

                     -  

 

                   788

Companhia de Eletricidade do Estado da Bahia – COELBA

                   743

 

                   121

 

               14,440

 

                     -  

Companhia Energética de Pernambuco - CELPE

                   692

 

                     20

 

                7,295

 

                   183

Companhia Energética do Rio Grande do Norte - COSERN

                   267

 

                     -  

 

                2,262

 

                1,035

Companhia Hidrelétrica Teles Pires S.A.

                     -  

 

                1,416

 

                     41

 

               40,633

ELEB Equipamentos Ltda

                     -  

 

                     -  

 

                2,228

 

                     -  

Embraer

                     -  

 

                     -  

 

                5,816

 

                     -  

Energética Águas da Pedra S.A.

                     -  

 

                   112

 

                       4

 

                3,674

Estaleiro Atlântico Sul S.A.

                     -  

 

                     -  

 

                5,958

 

                     -  

Goiás Sul Geração de Enegia S.A.

                     -  

 

                     -  

 

                     -  

 

                   133

Itapebi Geração de Energia S.A

                     -  

 

                     -  

 

                       3

 

                     -  

Mel 2 Energia Renovável S.A.

                     -  

 

                     -  

 

                     -  

 

                   533

NC ENERGIA S.A.

                   451

 

                       2

 

               19,505

 

                       9

Norte Energia S.A.

                       1

 

                4,585

 

                     11

 

               27,279

Rio PCH I S.A.

                     -  

 

                   209

 

                     -  

 

                6,878

Santista Jeanswear S/A

                     -  

 

                     -  

 

                9,944

 

                     -  

Santista Work Solution S/A

                     -  

 

                     -  

 

                1,605

 

                     -  

SE Narandiba S.A.

                     -  

 

                       2

 

                     -  

 

                   100

Serra do Facão Energia S.A. - SEFAC

                     -  

 

                   557

 

                     -  

 

               17,963

Termopernambuco S.A.

                     -  

 

                     -  

 

                       5

 

                     -  

ThyssenKrupp Companhia Siderúrgica do Atlântico

                     -  

 

                     -  

 

               19,380

 

                5,705

Vale Energia S.A.

                8,680

 

                     -  

 

               76,732

 

                     -  

BAESA – Energética Barra Grande S.A.

                     -  

 

                5,642

 

                     -  

 

               50,573

Foz do Chapecó Energia S.A.

                     -  

 

               35,018

 

                   468

 

             264,616

ENERCAN - Campos Novos Energia S.A.

                   387

 

               50,526

 

                6,478

 

             209,243

EPASA - Centrais Elétricas da Paraiba

                     -  

 

               12,418

 

                     -  

 

               63,494

               

Intangible assets, property, plant and equipment, materials and services rendered

             

Alpargatas S.A.

                   168

 

                     -  

 

                     -  

 

                     -  

Brasil veículos Companhia de Seguros

                     -  

 

                     -  

 

                       2

 

                     -  

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

                     -  

 

                     -  

 

                     -  

 

                2,699

Companhia de Saneamento Básico do Estado de São Paulo - SABESP

                       4

 

                     42

 

                   167

 

                     33

Companhia Brasileira de Soluções e Serviços CBSS - Alelo

                     -  

 

                     -  

 

                     -  

 

                1,768

Concessionária Auto Raposo Tavares S.A. - CART

                     -  

 

                     -  

 

                     -  

 

                     15

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

                     -  

 

                     -  

 

                     -  

 

                       6

Concessionária do Sistema Anhanguera - Bandeirante S.A. 

                     86

 

                     -  

 

                     -  

 

                       3

Embraer

                     -  

 

                     -  

 

                       7

 

                     -  

Estaleiro Atlântico Sul S.A.

                     -  

 

                     -  

 

                     10

 

                     -  

HM 02 Empreendimento Imobiliário SPE Ltda.

                     -  

 

                     -  

 

                     45

 

                     -  

Indústrias Romi S.A.

                       4

 

                     -  

 

                     39

 

                     -  

InterCement Brasil S.A

                     -  

 

                     -  

 

                     43

 

                     -  

Instituto CCR

                     -  

 

                     -  

 

                     -  

 

                     19

Investco S.A

                     -  

 

                     -  

 

                     -  

 

               15,381

Logum Logística S.A.

                     26

 

                     -  

 

                   702

 

                     -  

Mapfre Seguros Gerais S.A.

                     -  

 

                     -  

 

                     60

 

                     56

NC Energia S.A.

                     -  

 

                     -  

 

                       6

 

                     -  

SAMM - Sociedade de Atividades em Multimídia Ltda.

                     -  

 

                     -  

 

                   845

 

                     -  

Tim Celular S.A.

                       6

 

                     89

 

                     -  

 

                     -  

TOTVS S.A.

                     -  

 

                       2

 

                     -  

 

                     44

Ultrafértil S.A

                     -  

 

                     -  

 

                     14

 

                     -  

Vale Fertilizantes S.A

                     -  

 

                     -  

 

                   147

 

                     -  

BAESA – Energética Barra Grande S.A.

                     56

 

                     -  

 

                1,236

 

                     -  

Foz do Chapecó Energia S.A.

                   104

 

                     -  

 

                1,406

 

                     -  

ENERCAN - Campos Novos Energia S.A.

                     74

 

                     -  

 

                1,309

 

                     -  

EPASA - Centrais Elétricas da Paraíba S.A.

                1,599

 

                     -  

 

                   427

 

                     -  

               

Intragroup loans

             

EPASA - Centrais Elétricas da Paraíba S.A.

               38,078

 

                     -  

 

                6,834

 

                     -  

Noncontrolling shareholders of CPFL Renováveis

                9,067

 

                     -  

 

                1,099

 

                     -  

               

Dividends and interest on capital

             

BAESA – Energética Barra Grande S.A.

                     89

 

                     -  

 

                     -  

 

                     -  

Chapecoense Geração S.A.

               29,329

 

                     -  

 

                     -  

 

                     -  

ENERCAN - Campos Novos Energia S.A.

               40,983

 

                     -  

 

                     -  

 

                     -  

 

 

81 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

( 31 )   RISK MANAGEMENT


The risk management structure and the main risk factors that affect the Group’s business are disclosed in note 34 to the financial statements for the year ended December 31, 2016.

 

 

( 32 )   FINANCIAL INSTRUMENTS


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

 

                 

Consolidated

                 

 September 30, 2017

 

Note

 

Category

 

Measurement

 

Level (*)

 

Carrying amount

 

Fair value

Assets

                     

Cash and cash equivalent

5

 

(a)

 

(2)

 

Level 1

 

      2,945,009

 

      2,945,009

Cash and cash equivalent

5

 

(a)

 

(2)

 

Level 2

 

         887,147

 

         887,147

Derivatives

32

 

(a)

 

(2)

 

Level 2

 

         588,572

 

         588,572

Derivatives - Zero-cost collar

32

 

(a)

 

(2)

 

Level 3

 

           63,102

 

           63,102

Concession financial asset - distribution

10

 

(b)

 

(2)

 

Level 3

 

      6,062,420

 

      6,062,420

                 

     10,546,250

 

     10,546,250

                       

Liabilities

                     

Borrowings - principal and interest

16

 

(c)

 

(1)

 

Level 2 (***)

 

      6,952,926

 

      6,456,188

Borrowings - principal and interest

16

 

(a)

 

(2)

 

Level 2

 

      4,820,626

 

      4,820,626

Debentures - Principal and interest

17

 

(c)

 

(1)

 

Level 2 (***)

 

      8,047,395

 

      8,021,430

Derivatives

32

 

(a)

 

(2)

 

Level 2

 

         121,594

 

         121,594

                 

     19,942,541

 

     19,419,838

(*) Refers to the hierarchy for fair value measurement

                   

(**) As a result of the initial designation of this financial liability, the consolidated balances reported a loss of  R$ 61,378 in the nine months period ended September 30, 2017 (loss of R$ 228,814 in the nine months period ended September 30, 2016).

(***) Only for disclosure purposes, in accordance with CPC 40 (R1) / IFRS 7

               
                       

Key

         

Category:

   

Measurement:

         

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

   

(1) - Measured at amortized cost

         

(b) - Available for sale

   

(2) - Measured at fair value

         

(c) - Other financial liabilities

                     

 

 

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

·       Financial assets: (i) consumers, concessionaires and licensees, (ii) leases, (iii) intercompany loans between associates, subsidiaries and parent company, (iv) receivables – Eletrobras, (v) concession financial asset – transmission companies, (vi) pledges, funds and restricted deposits, (vii) services rendered to third parties, (viii) collection agreements and (ix) sector financial asset;

·       Financial liabilities: (i) trade payables, (ii) regulatory charges, (iii) use of public asset, (iv) consumers and concessionaires, (v) FNDCT/EPE/PROCEL, (vi) collection agreement, (vii) reversal fund, (viii) payables for business combination, (ix) tariff discounts – CDE and (x) sector financial liability.

In addition, in the nine months period ended September 30, 2017 there were no transfers between the fair value hierarchy levels.

 

a)     Measurement of financial instruments

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

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

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

The three levels of the fair value hierarchy are:

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

82 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

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

Level 3: Instruments whose relevant factors are not observable market inputs.

 

As the distribution concessionaries classified the respective concession financial assets as available-for-sale, the relevant factors for fair value measurement are not publicly observable. Therefore, the fair value hierarchy classification is level 3. The movements and respective gains (losses) in profit for or loss for the nine months period ended September 30, 2017 are R$ 97,155 (R$ 209,683 in the nine months period ended September 30, 2016) and the main assumptions are described in note 10.

Additionally, the main assumptions used in the fair value measurement of the zero-cost collar derivative, the fair value hierarchy of which is Level 3, are disclosed in note 32 b.1.

The Company recognizes in the consolidated, in “Investments at cost”, the 5.94% interest held by the indirect subsidiary Paulista Lajeado Energia S.A. in the total capital of Investco S.A., comprising 28,154,140 common shares and 18,593,070 preferred shares. As this company does not have shares listed on the stock exchange and considering that the main objective of its operations is to generate electric energy that will be traded by the shareholders holding the concession, the Company elected to recognize the investment at cost.

 

b)    Derivatives

The Group has the policy of using derivatives to hedge against the risks of fluctuations in exchange and interest rates, without any speculative purposes. The Group has currency hedges in a volume compatible with the net exchange exposure, including all assets and liabilities tied to exchange rate changes.

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

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

At September 30, 2017, the Group had the following swap transactions, all traded on the over-the-counter market:

83 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

   

Fair values (carrying amounts)

                   

Company / strategy / counterparts

 

Assets

 

Liabilities

 

Fair value, net

 

Values at cost, net

 

Gain (loss) on mark to market

 

Currency / index

 

Maturity range

 

Notional

Derivatives to hedge debts designated at fair value

                             

Exchange rate hedge

                               

CPFL Paulista

                               

Bank of Tokyo-Mitsubishi

 

               31,345

 

                  -  

 

              31,345

 

              31,214

 

                  131

 

Dollar

 

Mar 2019

 

      117,400

Bank of America Merrill Lynch

 

               39,006

 

                  -  

 

              39,006

 

              37,325

 

               1,681

 

Dollar

 

Sep 2018

 

      106,020

Bank of America Merrill Lynch

 

               44,118

 

                  -  

 

              44,118

 

              42,721

 

               1,397

 

Dollar

 

Mar 2019

 

      116,600

J.P.Morgan

 

               22,059

 

                  -  

 

              22,059

 

              21,361

 

                  698

 

Dollar

 

Mar 2019

 

        58,300

Bradesco

 

                 8,944

 

                  -  

 

                8,944

 

                8,826

 

                  118

 

Dollar

 

Jan 2018

 

        54,214

Bradesco

 

               36,981

 

                  -  

 

              36,981

 

              36,439

 

                  542

 

Dollar

 

Jan 2018

 

      173,459

J.P.Morgan

 

               11,515

 

                  -  

 

              11,515

 

              11,231

 

                  284

 

Dollar

 

Jan 2019

 

        67,613

BNP Paribas

 

               10,448

 

                  -  

 

              10,448

 

              10,233

 

                  215

 

Euro

 

Jan 2018

 

        63,896

Bank of Tokyo-Mitsubishi

 

               14,281

 

                  -  

 

              14,281

 

              15,646

 

              (1,365)

 

Dollar

 

Feb 2020

 

      142,735

Bank of America Merrill Lynch

 

               71,598

 

                  -  

 

              71,598

 

              70,026

 

               1,572

 

Dollar

 

Feb 2018

 

      405,300

Bank of America Merrill Lynch

 

                      -  

 

          (13,116)

 

             (13,116)

 

             (15,402)

 

               2,287

 

Dollar

 

Oct 2018

 

      329,500

Bradesco

 

                      -  

 

            (4,761)

 

               (4,761)

 

               (6,232)

 

               1,471

 

Dollar

 

May 2021

 

        59,032

Bank of America Merrill Lynch

 

                      -  

 

            (4,368)

 

               (4,368)

 

               (6,215)

 

               1,847

 

Dollar

 

May 2021

 

        59,032

Citibank

 

                      -  

 

            (4,550)

 

               (4,550)

 

               (6,223)

 

               1,672

 

Dollar

 

May 2021

 

        59,032

Citibank

 

                      -  

 

            (4,506)

 

               (4,506)

 

               (6,232)

 

               1,726

 

Dollar

 

May 2021

 

        59,032

   

              290,295

 

          (31,301)

 

            258,994

 

            244,719

 

             14,274

           
                                 

CPFL Piratininga

                               

Citibank

 

               42,988

 

                  -  

 

              42,988

 

              41,763

 

               1,225

 

Dollar

 

Mar 2019

 

      117,250

Bradesco

 

               24,282

 

                  -  

 

              24,282

 

              23,974

 

                  308

 

Dollar

 

Apr 2018

 

        55,138

J.P.Morgan

 

               24,288

 

                  -  

 

              24,288

 

              23,976

 

                  312

 

Dollar

 

Apr 2018

 

        55,138

Citibank

 

               29,336

 

                  -  

 

              29,336

 

              27,764

 

               1,572

 

Dollar

 

Jan 2020

 

      169,838

BNP Paribas

 

               28,731

 

                  -  

 

              28,731

 

              28,139

 

                  591

 

Euro

 

Jan 2018

 

      175,714

Bradesco

 

                      -  

 

            (4,761)

 

               (4,761)

 

               (6,232)

 

               1,471

 

Dollar

 

May 2021

 

        59,032

Bank of America Merrill Lynch

 

                      -  

 

            (4,368)

 

               (4,368)

 

               (6,215)

 

               1,847

 

Dollar

 

May 2021

 

        59,032

Citibank

 

                      -  

 

            (4,550)

 

               (4,550)

 

               (6,223)

 

               1,672

 

Dollar

 

May 2021

 

        59,032

Bank of America Merrill Lynch

 

                      -  

 

            (2,105)

 

               (2,105)

 

               (3,110)

 

               1,004

 

Dollar

 

May 2021

 

        29,516

Citibank

 

                      -  

 

            (2,253)

 

               (2,253)

 

               (3,116)

 

                  863

 

Dollar

 

May 2021

 

        29,516

   

              149,626

 

          (18,037)

 

            131,588

 

            120,723

 

             10,866

           
                                 

RGE

                               

Bank of Tokyo-Mitsubishi

 

               20,742

 

                  -  

 

              20,742

 

              20,723

 

                   19

 

Dollar

 

Apr 2018

 

        36,270

Bank of Tokyo-Mitsubishi

 

               92,399

 

                  -  

 

              92,399

 

              92,147

 

                  252

 

Dollar

 

May 2018

 

      168,346

Bradesco

 

               10,323

 

                  -  

 

              10,323

 

              10,304

 

                   19

 

Dollar

 

Oct 2017

 

        32,715

Bradesco

 

                      -  

 

            (4,761)

 

               (4,761)

 

               (6,232)

 

               1,471

 

Dollar

 

May 2021

 

        59,032

Bank of America Merrill Lynch

 

                      -  

 

            (4,368)

 

               (4,368)

 

               (6,215)

 

               1,847

 

Dollar

 

May 2021

 

        59,032

Citibank

 

                      -  

 

            (4,550)

 

               (4,550)

 

               (6,223)

 

               1,672

 

Dollar

 

May 2021

 

        59,032

Bank of America Merrill Lynch

 

                      -  

 

            (4,211)

 

               (4,211)

 

               (6,219)

 

               2,009

 

Dollar

 

May 2021

 

        59,032

   

              123,464

 

          (17,890)

 

            105,574

 

              98,285

 

               7,289

           

CPFL Jaguari

                               

Scotiabank

 

                      -  

 

               (706)

 

                 (706)

 

                 (770)

 

                   64

 

Dollar

 

Jul 2019

 

        16,484

                                 

CPFL Sul Paulista

                               

Scotiabank

 

                      -  

 

               (706)

 

                 (706)

 

                 (770)

 

                   64

 

Dollar

 

Jul 2019

 

        16,484

                                 

CPFL Leste Paulista

                               

Scotiabank

 

                      -  

 

               (706)

 

                 (706)

 

                 (770)

 

                   64

 

Dollar

 

Jul 2019

 

        16,484

                                 

CPFL Santa Cruz

                               

Scotiabank

 

                      -  

 

               (706)

 

                 (706)

 

                 (770)

 

                   64

 

Dollar

 

Jul 2019

 

        16,484

                                 

CPFL Paulista Lajeado

                               

Itaú

 

                      -  

 

               (297)

 

                 (297)

 

                 (404)

 

                  106

 

Dollar

 

Mar 2018

 

        35,000

                                 

CPFL Brasil

                               

Scotiabank

 

                      -  

 

            (2,623)

 

               (2,623)

 

               (2,746)

 

                  123

 

Dollar

 

Aug 2018

 

        45,360

Scotiabank

 

                      55

 

                  -  

 

                    55

 

                  203

 

                 (147)

 

Dollar

 

Sep 2020

 

        11,000

Scotiabank

 

                      -  

 

            (1,159)

 

               (1,159)

 

                3,573

 

              (4,732)

 

Dollar

 

Sep 2020

 

      238,989

   

                      55

 

            (3,782)

 

               (3,726)

 

                1,029

 

              (4,755)

           
                                 

CPFL Geração

                               

Scotiabank

 

                      -  

 

            (5,013)

 

               (5,013)

 

               (5,464)

 

                  451

 

Dollar

 

Jul 2019

 

      117,036

Votorantim

 

                      -  

 

            (6,257)

 

               (6,257)

 

               (9,070)

 

               2,812

 

Dollar

 

Jun 2019

 

      104,454

Bradesco

 

                      -  

 

               (308)

 

                 (308)

 

                 (808)

 

                  499

 

Dollar

 

Sep 2019

 

        32,636

Citibank

 

                      -  

 

          (13,416)

 

             (13,416)

 

             (15,467)

 

               2,051

 

Dollar

 

Sep 2020

 

      397,320

Scotiabank

 

                      -  

 

          (18,026)

 

             (18,026)

 

             (18,513)

 

                  487

 

Dollar

 

Dec 2019

 

      174,525

   

                      -  

 

          (43,020)

 

             (43,020)

 

             (49,320)

 

               6,301

           
                                 

Subtotal

 

              563,439

 

        (117,151)

 

            446,288

 

            411,954

 

             34,334

           
                                 

Derivatives to hedge debts  not designated at fair value

                           

Exchange rate hedge

                               

CPFL Geração

                               

J.P.Morgan

 

                      -  

 

            (4,443)

 

               (4,443)

 

               (4,813)

 

                  370

 

Dollar

 

Dec 2018

 

        37,291

                                 

Price index hedge

                               

CPFL Geração

                               

Santander

 

                 9,933

 

                  -  

 

                9,933

 

                7,978

 

               1,955

 

 IPCA

 

Apr 2019

 

        35,235

J.P.Morgan

 

                 9,933

 

                  -  

 

                9,933

 

                7,978

 

               1,955

 

 IPCA

 

Apr 2019

 

        35,235

   

               19,865

 

                  -  

 

              19,865

 

              15,956

 

               3,909

           
                                 

Interest rate hedge (1)

                               

CPFL Paulista

                               

J.P.Morgan

 

                 1,059

 

                  -  

 

                1,059

 

                    70

 

                  990

 

CDI

 

Feb 2021

 

      300,000

Votorantim

 

                    362

 

                  -  

 

                  362

 

                    24

 

                  338

 

CDI

 

Feb 2021

 

      100,000

Santander

 

                    382

 

                  -  

 

                  382

 

                    25

 

                  357

 

CDI

 

Feb 2021

 

      105,000

   

                 1,803

 

                  -  

 

                1,803

 

                  119

 

               1,684

           

CPFL Piratininga

                               

Votorantim

 

                    511

 

                  -  

 

                  511

 

                    34

 

                  477

 

CDI

 

Feb 2021

 

      135,000

Santander

 

                    383

 

                  -  

 

                  383

 

                    26

 

                  357

 

CDI

 

Feb 2021

 

      100,000

   

                    894

 

                  -  

 

                  894

 

                    60

 

                  834

           
                                 

RGE

                               

Votorantim

 

                    590

 

                  -  

 

                  590

 

                    39

 

                  551

 

CDI

 

Feb 2021

 

      170,000

                                 

CPFL Geração

                               

Votorantim

 

                 1,980

 

                  -  

 

                1,980

 

                  100

 

               1,880

 

CDI

 

Aug 2020

 

      460,000

                                 

Subtotal

 

               25,132

 

            (4,443)

 

              20,690

 

              11,461

 

               9,229

           
                                 

Other derivatives (2)

                               

CPFL Geração

                               

Itaú

 

               21,929

 

                  -  

 

              21,929

 

                1,990

 

             19,939

 

Dollar

 

Sep 2020

 

        21,548

Votorantim

 

               18,260

 

                  -  

 

              18,260

 

                1,676

 

             16,584

 

Dollar

 

Sep 2020

 

        21,548

Santander

 

               22,913

 

                  -  

 

              22,913

 

                1,968

 

             20,946

 

Dollar

 

Sep 2020

 

        27,095

Subtotal

 

               63,102

 

                  -  

 

              63,102

 

                5,633

 

             57,469

           
                                 

Total

 

              651,674

 

        (121,594)

 

            530,080

 

            429,048

 

           101,032

           
                                 

Current

 

         389,732

 

       (4,464)

                       

Noncurrent

 

         261,942

 

    (117,130)

                       
                                 

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

                       

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

               

(2) Due to the characteristics of this derivative (zero-cost collar), the notional amount is presented in U.S. dollar.

                   

 

 

84 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

As mentioned above, certain subsidiaries elected to mark to market debts for which they have fully debt-related derivatives instruments (note 16).

The Group has recognized gains and losses on their derivatives. However, as these derivatives are used as a hedging instrument, these gains and losses minimized the impacts of fluctuations in exchange and interest rates on the hedged debts. For the quarters and nine months periods ended September 30, 2017 and 2016, the derivatives generated the following impacts on the consolidated profit or loss, recognized in the line item of Finance expenses on adjustment for inflation and exchange rate changes:

 

                       
         

Gain (Loss)

         

2017

 

2016

 

 

Company

 

Hedged risk / transaction

 

Account

3rd Quarter 2017

 

Nine months 2017

 

3rd Quarter 2016

 

Nine months 2016

CPFL Energia

 

Exchange variation

 

Finance expense - swap transaction

                      -  

 

                      -  

 

                (4,584)

 

              (76,202)

CPFL Energia

 

Mark to Market

 

Finance expense - fair value adjustment

                      -  

 

                      -  

 

                     49

 

                 2,319

CPFL Paulista

 

Interest rate variation

 

Finance expense - swap transaction

                    157

 

                    (10)

 

                   (750)

 

                   (736)

CPFL Paulista

 

Exchange variation

 

Finance expense - swap transaction

              (97,613)

 

            (155,275)

 

              (72,032)

 

            (768,061)

CPFL Paulista

 

Mark to Market

 

Finance expense - fair value adjustment

                (2,164)

 

                 6,244

 

               42,902

 

             105,083

CPFL Piratininga

 

Interest rate variation

 

Finance expense - swap transaction

                     82

 

                     22

 

                   (208)

 

                   (473)

CPFL Piratininga

 

Exchange variation

 

Finance expense - swap transaction

              (41,126)

 

              (50,700)

 

              (28,481)

 

            (332,090)

CPFL Piratininga

 

Mark to Market

 

Finance expense - fair value adjustment

                   (943)

 

                 2,936

 

               13,746

 

               40,220

RGE

 

Interest rate variation

 

Finance expense - swap transaction

                     50

 

                     11

 

                   (436)

 

                   (432)

RGE

 

Exchange variation

 

Finance expense - swap transaction

              (25,560)

 

              (44,590)

 

              (21,890)

 

            (243,907)

RGE

 

Mark to Market

 

Finance expense - fair value adjustment

                (1,075)

 

                 2,435

 

                 8,410

 

               43,334

CPFL Geração

 

Interest rate variation

 

Finance expense - swap transaction

                     41

 

                   (183)

 

                 2,949

 

                 4,131

CPFL Geração

 

Exchange variation

 

Finance expense - swap transaction

              (36,600)

 

              (64,284)

 

              (30,312)

 

            (118,427)

CPFL Geração

 

Mark to Market

 

Finance expense - fair value adjustment

               12,578

 

               16,794

 

              (20,849)

 

               45,904

CPFL Santa Cruz

 

Exchange variation

 

Finance expense - swap transaction

                   (814)

 

                (1,385)

 

                   (789)

 

                (6,698)

CPFL Santa Cruz

 

Mark to Market

 

Finance expense - fair value adjustment

                     11

 

                    143

 

                    (94)

 

                    201

CPFL Leste Paulista

 

Exchange variation

 

Finance expense - swap transaction

                   (814)

 

                (1,385)

 

                   (789)

 

                   (789)

CPFL Leste Paulista

 

Mark to Market

 

Finance expense - fair value adjustment

                     11

 

                    143

 

                    (27)

 

                    (27)

CPFL Sul Paulista

 

Exchange variation

 

Finance expense - swap transaction

                   (814)

 

                (1,385)

 

                   (789)

 

                (7,289)

CPFL Sul Paulista

 

Mark to Market

 

Finance expense - fair value adjustment

                     11

 

                    143

 

                    (66)

 

                    223

CPFL Jaguari

 

Exchange variation

 

Finance expense - swap transaction

                   (814)

 

                (1,385)

 

                   (789)

 

                (9,948)

CPFL Jaguari

 

Mark to Market

 

Finance expense - fair value adjustment

                     11

 

                    143

 

                    (27)

 

                    326

Paulista Lajeado Energia

 

Exchange variation

 

Finance expense - swap transaction

                (1,789)

 

                (3,012)

 

                (1,288)

 

              (10,480)

Paulista Lajeado Energia

 

Mark to Market

 

Finance expense - fair value adjustment

                    106

 

                    260

 

                    479

 

                 1,734

CPFL Brasil

 

Exchange variation

 

Finance expense - swap transaction

                 1,518

 

                    (79)

 

                (1,622)

 

              (13,084)

CPFL Brasil

 

Mark to Market

 

Finance expense - fair value adjustment

                (4,916)

 

                (4,760)

 

                    710

 

                 2,449

CPFL Serviços

 

Exchange variation

 

Finance expense - swap transaction

                      -  

 

                      -  

 

                   (342)

 

                (3,327)

CPFL Serviços

 

Mark to Market

 

Finance expense - fair value adjustment

                      -  

 

                      -  

 

                    215

 

                    440

         

            (200,464)

 

            (299,160)

 

            (116,702)

 

          (1,345,605)

 

b.1) Zero-cost collar derivative transactions entered into by CPFL Geração

In 2015, the subsidiary CPFL Geração entered into a transaction involving put options and call options in US$, both having the same institution as counterpart, and that combined are featured as a transaction usually known as zero-cost collar. Entering into this transaction does not have any speculative purpose, inasmuch as it is aimed at minimizing any negative impacts on future revenue of the joint venture ENERCAN, which has electric energy sale agreements with annual adjustment of part of the tariff based on the dollar variation. In addition, according to Management’s view, the scenario in 2015 was favorable to enter into this type of financial instrument, considering the high volatility implicit in dollar options and the fact that there is no initial cost for this type of transaction.

The total amount contracted was US$ 111,817, with due dates between October 1, 2015 and September 30, 2020. At September 30, 2017, the total amount contracted was US$ 70,191, considering the options already settled until this date. The strike prices of the dollar options vary from R$ 4.20 to R$ 4.40 for put options and from R$ 5.40 to R$7.50 for call options.

These options were measured at fair value in a recurring manner, as required by IAS 39/CPC 38. The fair value of the options that are part of this transaction was calculated based on the following assumptions:

85 of 92

 


 

(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

Valuation technique(s) and key information

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

Significant unobservable inputs

Volatility determined based on the average market pricing calculations, future dollar and other variables applicable to this specific transaction, with average variation of 17.6%.

Relationship between unobservable inputs and fair value (sensitivity)

A slight rise in long-term volatility, analyzed separately, would result in an insignificant increase in fair value. If the volatility were 10% higher and all the other variables remained constant, the net carrying amount (asset) would increase by R$ 591, resulting in a net asset of R$ 63,693.

 

The following table reconciles the opening and closing balances of the call and put options for the nine months period ended September 30, 2017, as required by IFRS 13/CPC 46: 

 

   

Consolidated

   

Asset

 

Liability

 

Net

At December 31, 2016

 

        57,715

 

               -  

 

        57,715

Measurement at fair value

 

        22,126

 

               -  

 

        22,126

Net cash, received from settlement of flows

 

       (16,739)

 

               -  

 

       (16,739)

At September 30, 2017

 

        63,102

 

               -  

 

        63,102

 

 

The fair value measurement of these financial instruments was recognized as finance income in the statement of profit or loss for the period, and no effects were recognized in other comprehensive income.

c)     Sensitivity analysis

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

When the risk exposure is considered asset, the risk to be taken into account is a reduction in the pegged indexes, due to a consequent negative impact on the Group’s profit or loss. Similarly, if the risk exposure is considered liability, the risk is of an increase in the pegged indexes and the consequent negative effect on the profit or loss. The Group therefore quantify the risks in terms of the net exposure of the variables (dollar, euro, CDI, IGP-M, IPCA, TJLP and SELIC), as shown below:

c.1)  Changes in exchange rates

Considering that the net exchange rate exposure at September 30, 2017 is maintained, the simulation of the effects by type of financial instrument for three different scenarios would be:

 

   

 Consolidated

           

Decrease (increase)

Instruments

 

Exposure
R$ thousand (a)

 

Risk

 

Exchange depreciation (b)

 

Currency appreciation  of 25% (c)

 

Currency appreciation of 50% (c)

Financial liability instruments

 

            (4,590,320)

     

              (202,710)

 

                995,547

 

               2,193,805

Derivatives - Plain Vanilla Swap

 

             4,641,218

     

               204,958

 

            (1,006,586)

 

              (2,218,130)

   

                 50,898

 

drop in the dollar

 

                   2,248

 

                 (11,039)

 

                  (24,325)

                     

Financial liability instruments

 

              (282,542)

     

                (18,871)

 

                  56,482

 

                  131,835

Derivatives - Plain Vanilla Swap

 

               283,708

     

                 18,949

 

                 (56,715)

 

                 (132,379)

   

                   1,165

 

drop in the euro

 

                       78

 

                     (233)

 

                       (544)

                     

Total

 

                 52,063

     

                   2,326

 

                 (11,272)

 

                  (24,869)

                     
           

Decrease (increase)

Instruments

 

Exposure
US$ thousand (a)

 

Risk

 

Currency depreciation (b)

 

Currency appreciation of 25% (c)

 

Currency appreciation of 50% (c)

Derivatives zero-cost collar

 

                 70,191

 

raise in the dollar

 

                (67,171)

 

                 (90,702)

 

                 (114,233)

 

(a) The exchange rate considered at 9/30/2017 was R$ 3.17 per US$ 1.00 and R$ 3.74 per € 1.00.

(b) As per the exchange rate curves obtained from information made available by B3 S.A., with the exchange rate being considered at R$ 3.31 and R$ 3.99, and the currency depreciation at 4.42% and 6.68%, for US$ and €, respectively.

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

(c) As required by CVM Instruction No. 475/2008, the percentage increases in the ratios applied refer to the information made available by the B3 S.A..

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

 

Except for the zero-cost collar, as the net exchange exposure of the dollar and euro for the other derivative instruments is an asset, the risk is a drop in the dollar and euro, therefore, the exchange rate is appreciated by 25% and 50% in relation to the probable exchange rate.

 

c.2) Changes in interest rates

Assuming that: (i) the scenario of net exposure of the financial instruments indexed to floating interest rates at September 30, 2017 is maintained, and (ii) the respective annual indexes accumulated in the last 12 months, for this base date, remain stable (CDI 8.14% p.a.; IGP-M -1.45% p.a.; TJLP 7.00% p.a.; IPCA 2.47% p.a. and SELIC 11.40% p.a.), the effects that would be recognized in the consolidated financial statements for the next 12 months would be a net finance cost of R$ 920,804 (expenses of CDI R$ 721,153, TJLP R$ 305,251 and SELIC R$ 32,711, and finance income of IGP-M R$ 857 and IPCA R$ 137,454). In the event of fluctuations in the indexes according to the three scenarios defined, the amount of the net finance cost would be impacted by:

 

   

 Consolidated

Instruments

 

Exposure (a)
R$ thousand

 

Risk

 

Scenario I (a)

 

Raising/Drop index by 25% (b)

 

Raising/Drop index by 50% (b)

Financial asset instruments

 

             4,529,045

     

                (48,461)

 

                  31,590

 

                  111,641

Financial liability instruments

 

            (8,837,495)

     

                 94,561

 

                 (61,642)

 

                 (217,844)

Derivatives - Plain Vanilla Swap

 

            (4,550,920)

     

                 48,695

 

                 (31,743)

 

                 (112,180)

   

            (8,859,370)

 

CDI apprec

 

                 94,795

 

                 (61,794)

 

                 (218,383)

                     

Financial liability instruments

 

                (59,096)

 

IGP-M apprec

 

                  (2,612)

 

                  (3,051)

 

                    (3,490)

                     

Financial liability instruments

 

            (4,360,731)

 

TJLP apprec

 

                        -  

 

                 (76,313)

 

                 (152,626)

                     

Financial liability instruments

 

              (590,442)

     

                  (7,262)

 

                  (1,801)

 

                     3,661

Derivatives - Plain Vanilla Swap

 

                 92,972

     

                   1,144

 

                      284

 

                       (576)

Concession financial asset

 

             6,062,420

     

                 74,568

 

                  18,490

 

                  (37,587)

   

             5,564,950

 

drop in the IPCA

 

                 68,449

 

                  16,973

 

                  (34,503)

                     

Financial liability instruments

 

              (107,412)

     

                   4,554

 

                   2,632

 

                        709

Sectorial financial assets and liabilities

 

              (179,526)

     

                   7,612

 

                   4,398

 

                     1,185

   

              (286,938)

 

SELIC apprec.

 

                 12,166

 

                   7,030

 

                     1,894

                     

Total

 

            (8,001,185)

     

               172,798

 

               (117,155)

 

                 (407,108)

 

(a)   The CDI, IGP-M, TJLP, IPCA and SELIC indexes considered of: 7.07%, 2.97%, 7.00%, 3.70% and 7.16%, respectively, were obtained from information available in the market.

(b)   As required by CVM Instruction 475/2008, the percentages of increase or decrease were applied to the indexes in scenario I.

 

 

( 33 )   NON-CASH TRANSACTIONS

 

 

   

Parent Company

 

Consolidated

   

September 30, 2017

 

September 30, 2016

 

September 30, 2017

 

September 30, 2016

Transactions originated from busines combination

               

     Concession financial asset

 

               -  

 

               -  

 

       (12,338)

 

               -  

     Intangible assets

 

               -  

 

               -  

 

       (22,165)

 

               -  

     Property, plant and equipment

 

               -  

 

               -  

 

         (4,800)

 

               -  

   

               -  

 

               -  

 

       (39,303)

 

               -  

                 

Other transactions

               

Capital increase in investees

 

               -  

 

        52,680

 

               -  

 

               -  

Interest capitalized in property, plant and equipment

 

               -  

 

               -  

 

        27,755

 

        43,568

Interest capitalized in concession intangible asset - distribution infrastructure

 

               -  

 

               -  

 

        14,460

 

          8,864

Transfer between  property, plant and equipment and other assets

 

               -  

 

               -  

 

       (39,257)

 

        12,791

 

The balances disclosed in the "Transactions originated from business combination " lines refer to the complementary amounts related to the acquisition of RGE Sul, which final recognition occurred on September 30, 2017, according to note 12.5.

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

( 34 )   SIGNIFICANT FACT AND EVENTS AFTER THE REPORTING PERIOD

 

34.1    Annual tariff adjustment (“RTA”) – CPFL Piratininga

On October 17, 2017, the ANEEL’s Collegiate Body approved the 2017 annual tariff adjustment (“RTA”) of subsidiary CPFL Piratininga. The tariffs were adjusted on average 7.69%, of which 6.33% is related to the economic adjustment and 1.37% related to financial components, in relation to the last tariff event (RTA/2016). The average effect to be perceived by the consumers is 17.28% (as disclosed in the Ratification Resolution), when compared with the RTA occurred in October 2016. The new tariffs are effective from October 23, 2017 to October 22, 2018.

 

34.2    Mandatory Tender Offer

As presented in the note 38.5 of financial statements at December 31, 2016, State Grid Brazil Power Participações will conduct a mandatory tender offer resulting from transfer of control for acquisition of all the common shares held by the remaining shareholders of CPFL (“Mandatory Tender Offer”).

At March 27, 2017, the Company’s extraordinary general meeting decided on the (i) selection of Credit Suisse (Brasil) S.A. for determining the Company’s economic value; (ii) cancelation of the Company’s listing with CVM as issuer of securities registered under the category “A”, and their conversion into category “B”; and (iii) Company’s withdrawal from the Novo Mercado.

On June 12, 2017, CVM requested State Grid to file the appraisal reports relating to the Mandatory Tender Offers, or alternatively, file the adjusted offering documentation foreseeing only the Mandatory Tender Offers, through direct sale of the Company’s control or indirect sale of the CPFL Renováveis’ control. In a material fact disclosed on July 7, 2017, State Grid informed that it had decided to proceed only with the Mandatory Tender Offers for the sale of control of the Companies required, in relation to each of the Companies.

On October 30 and 31, 2017, State Grid Brazil disclosed a Material Fact reporting that:

(i) on October 26, 2017, the CVM formally approved all relevant documents and the continuity of the Mandatory Tender Offer, pursuant to article 254-A of Law 6,404, article 29 of CVM Instruction 361, the Novo Mercado Listing Rules of B3 S.A. – Brasil, Bolsa, Balcão and the CPFL Energia’s bylaws;

(ii) as a result of such approval, in accordance with article 11 of the CVM Instruction 361/02, State Grid Brazil published on October 31, 2017, the Form of Notice of the Offer, with its applicable detailed terms and conditions.

The Offer is valid for a period of 30 (thirty) days, beginning on October 31, 2017, the date of publication of the Notice, and ending on November 30, 2017, the date set forth in the Invitation to Bid.

 

34.3    Issue of debentures – CPFL Paulista

At the Board of Directors' Meeting held on August 21, 2017, the 8th issue of simple debentures of the subsidiary CPFL Paulista, not convertible into shares, unsecured typed, with a personal guarantee, in up to 3 (three) series, was approved. On October 24, 2017 the amount of R$ 700,000 was fully paid in.

 

34.4    Issue of debentures – RGE Sul

At the Board of Directors' Meeting held on August 21, 2017, the 5th issue of simple debentures of the subsidiary CPFL Paulista, not convertible into shares, unsecured typed, with a personal guarantee, in up to 3 (three) series, was approved, in the total amount of R$ 300,000. On October 24, 2017 the subsidiary disclosed a Market Notice related to the suspension of the analysis of the application for registration of the public offering of the 5th issue of debentures, for a period of 30 business days from the date of the Market Notice release.

 

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - 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 September 30, 2017:

   

Number of shares

   

September 30, 2017

Shareholders

 

Common shares

 

Interest %

State Grid Brazil Power Participações S.A.

 

       322,078,613

 

31.64%

ESC Energia S.A.

 

       234,086,204

 

23.00%

Members of Executive Board and Board of Directors

 

               23,516

 

0.00%

Other shareholders

 

       461,726,413

 

45.36%

Total

 

    1,017,914,746

 

100.00%

         

 

 

Quantity and characteristic of securities held by directly or indirectly Controlling Shareholders, Executive Officers, Board of Directors, Fiscal Council and Free Float, as of September 30, 2017 and December 31, 2016:

   

September 30, 2017

 

December 31, 2016

Shareholders

 

Common shares

 

Interest - %

 

Common shares

 

Interest - %

Controlling shareholders

 

           556,164,817

 

       54.64

 

           693,038,168

 

     68.08

Administrator

 

                          -  

 

            -  

 

                          -  

 

          -  

Members of the Executive Officers

 

                   23,516

 

        0.00

 

                   34,250

 

       0.00

Members of the Board of Directors

 

                          -  

 

            -  

 

                          -  

 

          -  

Fiscal Council  Members

 

                          -  

 

            -  

 

                          -  

 

          -  

Other shareholders

 

           461,726,413

 

       45.36

 

           324,842,328

 

     31.91

Total

 

        1,017,914,746

 

     100.00

 

        1,017,914,746

 

    100.00

Outstanding shares - free float

 

           461,726,413

 

       45.36

 

           324,842,328

 

     31.91

 

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

 

SHAREHOLDING STRUCTURE

 9 months of 2017

 

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

 

           556,164,817

54.64%

100.00%

                        -  

0.00%

0.00%

          556,164,817

54.64%

 

 1.1

 Esc Energia S.A.

15.146.011/0001-51

           234,086,204

23.00%

100.00%

                        -  

0.00%

0.00%

          234,086,204

23.00%

January 23, 2017

 1.2

 State Grid Brazil Power Participações Ltda.

26.002.119/0001-97

           322,078,613

31.64%

100.00%

                        -  

0.00%

0.00%

          322,078,613

31.64%

January 23, 2017

 

 Noncontrolling shareholders

 

           461,749,929

45.36%

100.00%

                        -  

0.00%

0.00%

          461,749,929

45.36%

 

 1.3

 Caixa de Previdência dos Funcionários do Banco do Brasil - Previ

33.754.482/0001-24

             98,589,229

9.69%

100.00%

                        -  

0.00%

0.00%

            98,589,229

9.69%

January 23, 2017

 1.4

 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

 1.5

 Bradespar S.A.

08.397.763/0001-20

             53,464,240

5.25%

100.00%

                        -  

0.00%

0.00%

            53,464,240

5.25%

August 15, 2017

 1.6

 Membros do Conselho de Administração

07.341.926/001-90

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

April 29, 2016

 1.7

 Membros da Diretoria Executiva

 

                    23,516

0.00%

100.00%

                        -  

0.00%

0.00%

                   23,516

0.00%

May 31, 2017

 1.8

 Demais Acionistas

 

           241,080,847

23.68%

100.00%

                        -  

0.00%

0.00%

          241,080,847

23.68%

 

 

 Total

 

        1,017,914,746

100.00%

100.00%

                        -  

0.00%

0.00%

       1,017,914,746

100.00%

 

 

 2 - Entity: 1.1 Esc Energia S.A.

CNPJ or CPF

 Quotes/common shares

%

% Total

 Preferred shares

%

% Total

 TOTAL

% Total

 

 

 Controlling shareholders

 

        1,042,392,615

100.00%

100.00%

                        -  

0.00%

0.00%

       1,042,392,615

100.00%

 

 1.1.1

 State Grid Brazil Power Participações Ltda.

26.002.119/0001-97

        1,042,392,615

100.00%

100.00%

                        -  

0.00%

0.00%

       1,042,392,615

100.00%

January 23, 2017

 

 Noncontrolling shareholders

 

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

 

 1.1.2

 Other shareholders

 

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

 

 

 Total

 

        1,042,392,615

100.00%

100.00%

                        -  

0.00%

0.00%

       1,042,392,615

100.00%

 

 

 3 - Entity: 1.2 State Grid Brazil Power Participações S.A.

CNPJ or CPF

 Quotes/common shares

%

% Total

 Preferred shares

%

% Total

 TOTAL

% Total

 

 

 Controlling shareholders

 

      14,299,999,999

100.00%

100.00%

                        -  

0.00%

0.00%

     14,299,999,999

100.00%

 

 1.2.1

 International Grid Holdings Limited

 

      14,299,999,999

100.00%

100.00%

                        -  

0.00%

0.00%

     14,299,999,999

100.00%

July 31, 2017

 

 Noncontrolling shareholders

 

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

 

 1.2.2

 Top View Grid Investment Limited

 

                             1

0.00%

100.00%

                        -  

0.00%

0.00%

                            1

0.00%

July 31, 2017

 1.2.3

 Other shareholders

 

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

 

 

 Total

 

      14,299,999,999

100.00%

100.00%

                        -  

0.00%

0.00%

     14,299,999,999

100.00%

 

 

 4 - Entity: 1.2.1 International Grid Holdings Limited

CNPJ or CPF

 Quotes/common shares

%

% Total

 Preferred shares

%

% Total

 TOTAL

% Total

 

 

 Controlling shareholders

 

                             1

100.00%

100.00%

                        -  

0.00%

0.00%

                            1

100.00%

 

 1.2.1.1

 State Grid International Development Limited

 

                             1

100.00%

100.00%

                        -  

0.00%

0.00%

                            1

100.00%

July 31, 2017

 

 Noncontrolling shareholders

 

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

 

 1.2.1.2

 Other shareholders

 

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

 

 

 Total

 

                             1

100.00%

100.00%

                        -  

0.00%

0.00%

                            1

100.00%

 

 

 5 - Entity: 1.2.2 Top View Grid Investment Limited

CNPJ or CPF

 Quotes/common shares

%

% Total

 Preferred shares

%

% Total

 TOTAL

% Total

 

 

 Controlling shareholders

 

                             1

100.00%

100.00%

                        -  

0.00%

0.00%

                            1

100.00%

 

 1.2.2.1

 State Grid International Development Limited

 

                             1

100.00%

100.00%

                        -  

0.00%

0.00%

                            1

100.00%

July 31, 2017

 

 Noncontrolling shareholders

 

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

 

 1.2.2.2

 Other shareholders

 

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

 

 

 Total

 

                             1

100.00%

100.00%

                        -  

0.00%

0.00%

                            1

100.00%

 

 

 6 - Entity: 1.2.1.1 State Grid International Development Limited

CNPJ or CPF

 Quotes/common shares

%

% Total

 Preferred shares

%

% Total

 TOTAL

% Total

 

 

 Controlling shareholders

 

      21,429,327,845

100.00%

100.00%

                        -  

0.00%

0.00%

     21,429,327,845

21.32%

 

 1.2.1.1.1

 State Grid International Development Co., Ltd

 

      21,429,327,845

100.00%

100.00%

                        -  

0.00%

0.00%

     21,429,327,845

21.32%

July 31, 2017

 

 Noncontrolling shareholders

 

                            -  

0.00%

0.00%

  79,091,019,116

100.00%

100.00%

     79,091,019,116

78.68%

 

 1.2.1.1.2

 State Grid Overseas Investment Ltd

 

                            -  

0.00%

0.00%

  79,091,019,116

100.00%

100.00%

     79,091,019,116

78.68%

July 31, 2017

 1.2.1.1.3

 Other shareholders

 

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

 

 

 Total

 

      21,429,327,845

100.00%

21.32%

  79,091,019,116

100.00%

78.68%

   100,520,346,961

100.00%

 

 

 7 - Entity: 1.2.1.1.1 State Grid International Development Co., Ltd

CNPJ or CPF

 Quotes/common shares

%

% Total

 Preferred shares

%

% Total

 TOTAL

% Total

 

 

 Controlling shareholders

 

        7,131,288,000

100.00%

100.00%

                        -  

0.00%

0.00%

       7,131,288,000

100.00%

 

 1.2.1.1.1.1

 State Grid Corporation of China

 

        7,131,288,000

100.00%

100.00%

                        -  

0.00%

0.00%

       7,131,288,000

100.00%

July 31, 2017

 

 Noncontrolling shareholders

 

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

 

 1.2.1.1.1.2

 Other shareholders

 

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

 

 

 Total

 

        7,131,288,000

100.00%

100.00%

                        -  

0.00%

0.00%

       7,131,288,000

100.00%

 

 

 8 - Entity: 1.2.1.1.2 State Grid Overseas Investment Ltd

CNPJ or CPF

 Quotes/common shares

%

% Total

 Preferred shares

%

% Total

 TOTAL

% Total

 

 

 Controlling shareholders

 

                         100

100.00%

100.00%

                        -  

0.00%

0.00%

                        100

100.00%

 

 1.2.1.1.2.1

 State Grid Corporation of China

 

                         100

100.00%

100.00%

                        -  

0.00%

0.00%

                        100

100.00%

July 31, 2017

 

 Noncontrolling shareholders

 

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

 

 1.2.1.1.2.2

 Other shareholders

 

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

 

 

 Total

 

                         100

100.00%

100.00%

                        -  

0.00%

0.00%

                        100

100.00%

 

 

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.

 

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

INDEPENDENT AUDITORS' REPORT

 

KPMG Auditores Independentes

Av. Barão de Itapura, 950 - 6º andar

13020-431 - Campinas/SP - Brasil

Caixa Postal 737 - CEP 13012-970 - Campinas/SP - Brasil

Telefone +55 (19) 2129-8700, Fax +55 (19) 2129-8728

www.kpmg.com.br

 

 

Independent Auditors’ Report on Review of Interim Financial Information (Draft)

 

(A free translation of the original report in Portuguese, as filed with the Brazilian Securities and Exchange Commission (CVM), prepared in accordance with the accounting practices adopted in Brazil, rules of the CVM and of the International Financial Reporting Standards - IFRS)

 

To the Shareholders and Board Directors of

CPFL Energia S.A.      

Campinas - SP

 

Introduction

 

We have reviewed the individual and consolidated, interim financial information, of CPFL Energia S.A. (“the Company”), included in the Quarterly Information Form (ITR), for the quarter ended September 30, 2017, which comprises the statement of financial position as of September 30, 2017 and the respective statements of profit or loss and other comprehensive income for the three and nine month periods then ended, and the changes in equity and cash flows for the nine month period then ended, comprising the explanatory notes.

 

Management is responsible for the preparation of the interim financial information in accordance with CPC 21(R1) Technical Pronouncement - Interim Financial Information and International Standard IAS 34 - Interim Financial Reporting, issued by International Accounting Standards Board - IASB, and for presentation of this interim financial information in accordance with the rules issued by Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of the quarterly information - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review.

 

Scope of review

 

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

 

 

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(Free Translation of the original in Portuguese)

Standard Interim Financial Statements – ITR –  Date: September 30, 2017 - CPFL Energia S.A.

 

Conclusion

 

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

 

Other matters - Statements of Value Added

 

The individual and consolidated interim financial information, related to statements of value added (DVA) for the nine month period ended September 30, 2017, prepared under the responsibility of the Company's management, and presented as supplementary information for the purposes of IAS 34, were submitted to the same review procedures followed together with the review of the Company's interim financial information. In order to form our conclusion, we evaluated whether these statements are reconciled to the interim financial information and to the accounting records, as applicable, and whether their form and content are in accordance with the criteria set on Technical Pronouncement CPC 09 - Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that the accompanying statements of value added are not prepared, in all material respects, in accordance with the individual and consolidated interim financial information taken as a whole.

 

Other matter relating to corresponding information

The corresponding amounts related to individual and consolidated statement of financial position for the year ended December 31, 2016, were audited by another auditor who issued an unmodified opinion dated March 13, 2017. The corresponding amounts related to the individual and consolidated statement of profit or loss, other comprehensive income, changes in equity, cash flows and value added (supplementary information),  for the three and nine months periods ended September 30, 2016, disclosed for comparative purpose and restated due to the matters described on Note 2.8, were also reviewed by another auditor who expressed an unmodified conclusion dated November 6, 2017.

 

Campinas, November 6, 2017

 

 

KPMG Auditores Independentes

CRC (Regional Accounting Council) CRC 2SP027612/O-4

 

 

(Original report in Portuguese signed by)

Márcio José dos Santos

Accountant CRC 1SP252906/O-0

 

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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: November 7, 2017
 
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.