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 March, 2018
Commission File Number 32297


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

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

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

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

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

 Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  

Yes _______ No ___X____

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

.


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements – ITR –  Date: March 31, 2018 - CPFL Energia S.A.

Table of Contents

 

Company Data

 

Capital Composition

1

Individual interim 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

 

01/01/2018 to 03/31/2018

7

01/01/2017 to 03/31/2017

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

13

Statement of Comprehensive Income

14

Statement of Cash Flows - Indirect Method

15

Statement of Changes in Equity

 

01/01/2018 to 03/31/2018

17

01/01/2017 to 03/31/2017

18

Statements of Value Added

19

Comments on Performance

20

Notes to Interim financial statements 

29

Other relevant information

87

Reports

 

Independent Auditor’s Report - Unqualified

88

Management declaration on financial statements

90

Management declaration on independent auditor’s report

91


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

 

Capital Composition

Number of Shares

(In units)

Closing Date

03/31/2018

Paid-in capital

 

Common

1,017,914,746

Preferred

0

Total

1,017,914,746

Treasury Stock

0

Common

0

Preferred

0

Total

0

 

1


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of Financial Position – Assets

(n thousands of Brazilian reais - R$)

 

 

       

Code

Description

 Current quarter
03/31/2018

 Prior period
12/31/2017

1

Total assets

  9,653,038

  9,463,648

1.01

Current assets

207,286

275,382

1.01.01

Cash and cash equivalents

  3,486

  6,581

1.01.06

Taxes recoverable

63,910

63,751

1.01.06.01

Current taxes recoverable 

63,910

63,751

1.01.06.01.01

Income tax and social contribution to be offset

16,934

17,052

1.01.06.01.02

Other taxes recoverable

46,976

46,699

1.01.08

Other current assets

139,890

205,050

1.01.08.03

Other

139,890

205,050

1.01.08.03.01

Other receivables

466

243

1.01.08.03.04

Dividends and interest on capital

139,424

204,807

1.02

Noncurrent assets

  9,445,752

  9,188,266

1.02.01

Long-term assets

502,319

629,352

1.02.01.06

Deferred taxes

146,052

145,778

1.02.01.06.02

Deferred tax assets

146,052

145,778

1.02.01.08

Receivables from related parties

-

127,147

1.02.01.08.02

Receivables from subsidiaries

-

127,147

1.02.01.09

Other noncurrent assets

356,267

356,427

1.02.01.09.04

Escrow deposits

731

665

1.02.01.09.07

Advance for future capital increase

350,000

350,000

1.02.01.09.10

Other receivables

  5,536

  5,762

1.02.02

Investments

  8,942,192

  8,557,673

1.02.02.01

Equity interests

  8,942,192

  8,557,673

1.02.02.01.02

Investments in subsidiaries

  8,942,192

  8,557,673

1.02.03

Property, plant and equipment

  1,149

  1,170

1.02.03.01

Property, plant and equipment - in servce

  1,149

  1,170

1.02.04

Intangible assets

92

71

1.02.04.01

Other intangible assets

92

71

2


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of Financial Position – Liabilities and Equity

(In thousands of Brazilian reais - R$)

   
       

Code

Description

 Current quarter
03/31/2018

 Prior period
12/31/2017

2

Total liabilities

9,653,038

9,463,648

2.01

Current liabilities

301,690

303,812

2.01.02

Trade payables

1,438

1,644

2.01.02.01

Domestic suppliers

1,438

1,644

2.01.03

Taxes payable

1,943

717

2.01.03.01

Federal taxes

1,943

717

2.01.03.01.02

PIS (tax on revenue)

18

14

2.01.03.01.03

COFINS (tax on revenue)

109

87

2.01.03.01.04

Other federal taxes

1,816

616

2.01.04

Borrowings

  -

1,938

2.01.04.02

Debentures

  -

1,938

2.01.04.02.02

Interests on debentures

  -

1,938

2.01.05

Other liabilities

298,309

299,513

2.01.05.02

Others

298,309

299,513

2.01.05.02.01

Dividends and interest on capital payable

281,914

281,919

2.01.05.02.07

Other liabilities

16,395

17,594

2.02

Noncurrent liabilities

12,545

198,308

2.02.01

Borrowings

  -

184,388

2.02.01.02

Debentures

  -

184,388

2.02.01.02.01

Debentures

  -

184,388

2.02.02

Other liabilities

11,985

13,320

2.02.02.02

Others

11,985

13,320

2.02.04

Provisons

560

600

2.02.04.01

Tax, social security, labor and civil provisions

560

600

2.02.04.01.02

Social security and labor provisions

61

57

2.02.04.01.04

Civil provisions

499

543

2.03

Equity

9,338,803

8,961,528

2.03.01

Issued capital

5,741,284

5,741,284

2.03.02

Capital reserves

468,018

468,014

2.03.04

Earnings reserves

2,958,048

2,916,736

2.03.04.01

Legal reserve

798,090

798,090

2.03.04.02

Statutory reserve

2,159,958

2,118,646

2.03.05

Retained earnings

360,478

  -

2.03.08

Other comprehensive income

(189,025)

(164,506)

2.03.08.01

Accumulated comprehensive income

(189,025)

(164,506)

 

3


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of income

(In thousands of Brazilian reais - R$)

   
       

Code

Description

 YTD current period
01/01/2018 to 
03/31/2018

 YTD prior period
01/01/2017 to
03/31/2017

3.04

Operating income (expenses)

441,740

254,680

3.04.02

General and administrative expenses

  (9,246)

(17,167)

3.04.06

Share of profit (loss) of investees

450,986

271,847

3.05

Profit before finance income (costs) and taxes

441,740

254,680

3.06

Finance income (costs)

1,775

(17,340)

3.06.01

Finance income

7,084

5,765

3.06.02

Finance costs

  (5,309)

(23,105)

3.07

Profit (loss) before taxes on income

443,515

237,340

3.08

Income tax and social contribution

268

8,546

3.08.01

Current

  (5)

  -

3.08.02

Deferred

273

8,546

3.09

Profit (loss) from continuing operations

443,783

245,886

3.11

Profit (loss) for the period

443,783

245,886

3.99.01.01

ON

0.44000

0.24000

3.99.02.01

ON

0.44000

0.24000

4


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of Comprehensive Income

 

(In thousands of Brazilian reais - R$)

   
       

Code

Description

 YTD current period
01/01/2018 to 
03/31/2018

 YTD prior
01/01/2017 to
 03/31/2017

4.01

Profit for the period

 443,783

 245,886

4.02

Other comprehensive income

 (1,804)

 -  

4.02.01

Comprehensive income for the period of subsidiaries

 (1,804)

 -  

4.03

Total comprehensive income for the period

 441,979

 245,886

 

5


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of Cash Flows – Indirect Method

(In thousands of Brazilian reais - R$)

 

 

 

 

 

 

Code

Description

 YTD current period
01/01/2018 to 
03/31/2018

 YTD prior period
01/01/2017 to
03/31/2017

6.01

Net cash from operating activities

  55,547

  173,279

6.01.01

Cash generated from operations

(4,478)

(12,121)

6.01.01.01

Profit for the period before income tax and social contribution

  443,515

  237,339

6.01.01.02

Depreciation and amortization

48

54

6.01.01.03

Interest on debts, inflation adjustment and exchange rate changes

  2,981

 22,329

6.01.01.04

Share of profit (loss) of investees

(450,986)

(271,847)

6.01.01.05

Provision for tax, civil and labor risks

  (36)

4

6.01.02

 Changes in assets and liabilities

  60,025

  185,400

6.01.02.01

 Dividend and interest on capital received

  65,383

  189,515

6.01.02.02

 Taxes recoverable

  (20)

(1,979)

6.01.02.03

 Escrow deposits

  (65)

364

6.01.02.04

 Other operating assets

174

  18,096

6.01.02.05

 Trade payables

  (206)

(1,886)

6.01.02.06

Other taxes and social contributions

  1,220

  1,135

6.01.02.07

Interest paid on debts and debentures

(4,235)

  -

6.01.02.09

Other operating liabilities

(2,199)

(19,661)

6.01.02.10

Tax, civil and labor risks paid

  (27)

  (184)

6.02

Net cash from investing activities

  127,364

(1,688)

6.02.01

Purchases of property, plant and equipment

  (198)

  -

6.02.04

Intragroup loans

  127,625

  29,820

6.02.07

Purchases of intangible assets

 (23)

  (8)

6.02.08

Advance for future capital increases

  (40)

(31,500)

6.03

Net cash from financing activities

(186,006)

(220,904)

6.03.01

Repayment of principal of borrowings and debentures, net of derivatives

(186,000)

  -

6.03.02

Dividend and interest on capital paid

 (6)

(220,904)

6.05

Increase (decrease) in cash and cash equivalents

(3,095)

(49,313)

6.05.01

Cash and cash equivalents at the beginning of the period

  6,581

  64,974

6.05.02

Cash and cash equivalents at the end of the period

  3,486

  15,661

 

6


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of Changes in Equity – from January 1, 2018 to March 31, 2018

(In thousands of Brazilian reais - R$)

           
               

Code

Description

 Share capital

 Capital reserves, options granted  and treasury shares

 Earnings reserves

 Retained earnings or accumulated losses

 Other comprehensive income

 Equity

5.01

 Opening balances

5,741,284

468,014

  2,916,736

-

-  164,506

  8,961,528

5.03

 Adjusted opening balances

5,741,284

468,014

  2,916,736

-

-  164,506

  8,961,528

5.05

 Total comprehensive income 

  -

-

-

395,322

-  18,051

377,271

5.05.01

 Profit for the period

  -

-

-

443,783

-

443,783

5.05.02

 Other comprehensive income

  -

-

-

-  48,461

-  18,051

-  66,512

5.05.02.09

Share of profit (loss) on comprehensive income of subsidiaries and associates

  -

-

-

-  48,461

-  18,051

- 66,512

5.06

 Internal changes in equity

  -

  4

41,313

-  34,845

-  6,468

  4

5.06.04

 Equity on comprehensive income of subsidiaries

  -

-

-

  6,468

-  6,468

-

5.06.05

 Changes in statutory reserve in the period

  -

-

41,313

-  41,313

-

-

5.06.09

 Other changes in noncontrolling interests

  -

  4

-

-

-

  4

5.07

 Closing balances

5,741,284

468,018

  2,958,049

360,477

-  189,025

  9,338,803

 

7


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of Changes in Equity – from January 1, 2017 to March 31, 2017

(In thousands of Brazilian reais - R$)

           
               

Code

Description

 Share capital

 Capital reserves, options granted  and treasury shares

 Earnings reserves

 Retained earnings or 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 owners

  -

  -

-  7,820

-

-

-  7,820

5.04.06

Dividends

  -

  -

-  7,820

-

-

-  7,820

5.05

Total comprehensive income

  -

  -

-

245,886

-

245,886

5.05.01

Profit for the period

  -

  -

-

245,886

-

245,886

5.06

Internal changes in equity

  -

  -

26,680

-  20,269

-  6,411

-

5.06.04

Share of profit (loss) on comprehensive income of subsidiaries and associates

  -

  -

-

  6,411

-  6,411

-

5.06.05

Changes in statutory reserve in the period

  -

  -

26,680

-  26,680

-

-

5.07

Closing balances

5,741,284

  468,014

  2,014,215

225,617

-  241,043

  8,208,087

8


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Individual Financial Statements

Statement of Value Added

(In thousands of Brazilian reais - R$)

 

 

 

 

 

 

 Code

 Description

 YTD current period
01/01/2018 to 
03/31/2018

 YTD prior period
01/01/2017 to
03/31/2017

7.01

Revenues

  221

  8

7.01.03

Revenues related to construction of own assets

  221

  8

7.02

Inputs purchased from third parties

(2,837)

(2,804)

7.02.02

Materials, energy, third-party services and others

(2,122)

(2,201)

7.02.04

Others

  (715)

  (603)

7.03

Gross value added

(2,616)

(2,796)

7.04

Retentions

(48)

  (54)

7.04.01

Depreciation and amortization

(48)

  (54)

7.05

Wealth created by the company

(2,664)

(2,850)

7.06

Wealth received in transfer

  458,417

 277,916

7.06.01

Share of profit (loss) of investees

  450,986

  271,847

7.06.02

Finance income

7,431

  6,069

7.07

Total wealth for distribution

  455,753

  275,066

7.08

Wealth distributed

  455,753

  275,066

7.08.01

Personnel and charges

5,543

  12,076

7.08.01.01

Salaries and wages

2,524

  8,824

7.08.01.02

Benefits

2,587

  2,485

7.08.01.03

FGTS (Severance Pay Fund)

  432

  767

7.08.02

Taxes, fees and contributions

1,120

(6,069)

7.08.02.01

Federal

1,104

(6,074)

7.08.02.02

State

  16

  5

7.08.03

Lenders and lessors

5,307

  23,173

7.08.03.01

Interest

5,306

  22,975

7.08.03.02

Rentals

1

  198

7.08.04

Shareholders

  443,783

  245,886

7.08.04.03

Retained earnings / Loss for the period

  443,783

  245,886

9


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Consolidated Financial Statements

Statement of Financial Position – Assets

(In thousands of Brazilian reais - R$)

 

 

 

 

 

 

Code

Description

 Current quarter
03/31/2018

 Prior period
12/31/2017

1

Total assets

  41,166,359

  41,282,912

1.01

Current assets

  9,603,033

  9,581,212

1.01.01

Cash and cash equivalents

  3,028,978

  3,249,642

1.01.02

Financial investments

183

139

1.01.02.02

Financial investments at amortized cost

183

139

1.01.02.02.01

Held-to-maturity securities

183

139

1.01.03

Trade receivables

  4,258,871

  4,301,283

1.01.03.01

Consumers

  4,258,871

  4,301,283

1.01.06

Taxes recoverable

417,645

395,046

1.01.06.01

Current taxes recoverable

417,645

395,046

1.01.06.01.01

Income tax and social contribution to be offset

107,230

  88,802

1.01.06.01.02

Other taxes recoverable

310,415

306,244

1.01.08

Other current assets

  1,897,356

  1,635,102

1.01.08.03

Others

  1,897,356

  1,635,102

1.01.08.03.01

Other receivables

904,877

900,358

1.01.08.03.02

Derivatives

341,350

444,029

1.01.08.03.04

Dividends and interest on capital

  56,145

  56,145

1.01.08.03.05

Concession financial asset

  24,017

  23,736

1.01.08.03.06

Sector financial asset

570,967

210,834

1.02

Noncurrent assets

  31,563,326

  31,701,700

1.02.01

Long-term assets

  10,267,036

  10,323,201

1.02.01.03

Trade receivables

243,195

236,539

1.02.01.03.01

Consumers

243,195

236,539

1.02.01.06

Deferred taxes

977,462

943,199

1.02.01.06.02

Deferred tax assets

977,462

943,199

1.02.01.08

Receivables from related parties

-

  8,612

1.02.01.08.03

Receivables from owners of the Company

-

  8,612

1.02.01.09

Other noncurrent assets

  9,046,379

  9,134,851

1.02.01.09.03

Derivatives

116,934

203,901

1.02.01.09.04

Escrow deposits

854,224

839,990

1.02.01.09.05

Income tax and social contribution to be offset

  65,285

  61,464

1.02.01.09.06

Other taxes recoverable

170,279

171,980

1.02.01.09.08

Concession financial asset

  6,794,551

  6,545,668

1.02.01.09.09

Investments at cost

116,654

116,654

1.02.01.09.10

Other receivables

861,611

840,192

1.02.01.09.11

Sector financial asset

  66,841

355,002

1.02.02

Investments

  1,065,403

  1,001,550

1.02.02.01

Equity interests

  1,065,403

  1,001,550

1.02.03

Property, plant and equipment

  9,678,537

  9,787,125

1.02.03.01

PP&E - in service

  9,383,535

  9,535,933

1.02.03.03

PP&E - in progress

295,002

251,192

1.02.04

Intangible assets

  10,552,350

  10,589,824

1.02.04.01

Intangible assets

  10,552,350

  10,589,824

 

10


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Consolidated Financial Statements

Statement of Financial Position – Liabilities and Equity

(In thousands of Brazilian reais - R$)

 

 

 

 

 

 

Code

Description

 Current quarter
03/31/2018

 Prior period
12/31/2017

2

Total liabilities

  41,166,359

  41,282,912

2.01

Current liabilities

  10,464,792

  11,378,688

2.01.01

Payroll and related taxes

124,533

116,080

2.01.01.02

Payroll taxes

124,533

116,080

2.01.01.02.01

Estimated payroll

124,533

116,080

2.01.02

Trade payables

  2,528,146

  3,296,870

2.01.02.01

Domestic suppliers

  2,528,146

  3,296,870

2.01.03

Taxes payable

721,308

710,303

2.01.03.01

Federal taxes

331,184

300,748

2.01.03.01.01

Income tax and social contribution

101,510

  81,457

2.01.03.01.02

PIS (tax on revenue)

  34,226

  32,486

2.01.03.01.03

COFINS (tax on revenue)

158,034

141,757

2.01.03.01.04

Other federal taxes

  37,414

  45,048

2.01.03.02

State taxes

384,261

403,512

2.01.03.02.01

ICMS (state VAT)

384,230

403,492

2.01.03.02.02

State taxes - other

  31

  20

2.01.03.03

Municipal taxes

  5,863

  6,043

2.01.03.03.01

Other municipal taxes

  5,863

  6,043

2.01.04

Borrowings

  5,454,449

  5,292,679

2.01.04.01

Borrowings

  3,562,035

  3,589,606

2.01.04.01.01

In local currency

  1,813,298

  1,258,329

2.01.04.01.02

In foreign currency

  1,748,737

  2,331,277

2.01.04.02

Debentures

  1,892,414

  1,703,073

2.01.04.02.01

Debentures

  1,892,414

  1,703,073

2.01.05

Other liabilities

  1,636,356

  1,962,756

2.01.05.02

Others

  1,636,356

  1,962,756

2.01.05.02.01

Dividends and interest on capital payable

294,141

297,744

2.01.05.02.04

Derivatives

  40,943

  10,230

2.01.05.02.05

Sector financial liability

  17,860

  40,111

2.01.05.02.06

Use of public asset

  10,939

  10,965

2.01.05.02.07

Other payables

  1,061,146

961,306

2.01.05.02.08

Regulatory charges

145,194

581,600

2.01.05.02.09

Post-employment benefit obligation

  66,133

  60,800

11


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Code

Description

 Current quarter
03/31/2018

 Prior period
12/31/2017

2.02

Noncurrent liabilities

  19,162,344

  18,717,880

2.02.01

Borrowings

  15,352,469

  14,875,904

2.02.01.01

Borrowings

  6,536,192

  7,402,450

2.02.01.01.01

In local currency

  4,257,638

  4,884,253

2.02.01.01.02

In foreign currency

  2,278,554

  2,518,197

2.02.01.02

Debentures

  8,816,277

  7,473,454

2.02.01.02.01

Debentures

  8,816,277

  7,473,454

2.02.02

Other liabilities

  1,595,064

  1,631,253

2.02.02.02

Others

  1,595,064

  1,631,253

2.02.02.02.03

Trade payables

130,334

128,438

2.02.02.02.04

Private pension plan

872,113

880,360

2.02.02.02.05

Derivatives

  37,544

  84,576

2.02.02.02.06

Sector financial liability

  23,973

  8,385

2.02.02.02.07

Use of public asset

  84,847

  83,766

2.02.02.02.08

Other payables

429,794

426,889

2.02.02.02.09

Federal taxes

  16,459

  18,839

2.02.03

Deferred taxes

  1,236,496

  1,249,589

2.02.03.01

Deferred income tax and social contribution

  1,236,496

  1,249,589

2.02.04

Provisions

978,315

961,134

2.02.04.01

Tax, social security, labor and civil provisions

978,315

961,134

2.02.04.01.01

Tax provisions

365,656

347,291

2.02.04.01.02

Social security and labor provisions

229,725

224,258

2.02.04.01.04

Civil provisions

279,099

291,388

2.02.04.01.05

Others

103,835

  98,197

2.03

Consolidated equity

  11,539,223

  11,186,344

2.03.01

Issued capital

  5,741,284

  5,741,284

2.03.02

Capital reserves

468,018

468,014

2.03.04

Earnings reserves

  2,958,048

  2,916,736

2.03.04.01

Legal reserve

798,090

798,090

2.03.04.02

Statutory reserve

  2,159,958

  2,118,646

2.03.05

Retained earnings

360,478

-

2.03.08

Other comprehensive income

  (189,024)

  (164,506)

2.03.09

Noncontrolling interests

  2,200,419

  2,224,816

12


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Consolidated Financial Statements

Statement of income

(In thousands of Brazilian reais - R$)

 

 

 

 

 

 

Code

Description

 YTD current period
01/01/2018 to 
03/31/2018

 YTD prior
01/01/2017 to
03/31/2017

3.01

Net operating revenue

6,374,654

  5,538,779

3.02

Cost of electric energy services

(5,055,015)

  (4,305,648)

3.02.01

Cost of electric energy

(4,013,721)

  (3,220,654)

3.02.02

Cost of operation

(669,933)

  (669,727)

3.02.03

Cost of services rendered to third parties

(371,361)

  (415,267)

3.03

Gross profit

1,319,639

  1,233,131

3.04

Operating expenses/income

(343,692)

  (413,950)

3.04.01

Selling expenses

(128,640)

  (149,218)

3.04.02

General and administrative expenses

(203,875)

  (261,565)

3.04.05

Other operating expenses

(96,533)

  (82,876)

3.04.06

Share of profit (loss) of investees

85,356

  79,709

3.05

Profit before finance income (costs) and taxes

  975,947

819,181

3.06

Finance income (costs)

(307,519)

  (436,138)

3.06.01

Finance income

  197,151

280,711

3.06.02

Finance costs

(504,670)

  (716,849)

3.07

Profit before taxes

  668,428

383,043

3.08

Income tax and social contribution

(249,024)

  (150,922)

3.08.01

Current

(265,458)

  (202,520)

3.08.02

Deferred

16,434

  51,598

3.09

Profit from continuing operations

  419,404

232,121

3.11

Consolidated profit for the period

  419,404

232,121

3.11.01

Attributable to owners of the Company

  443,783

245,886

3.11.02

Attributable to noncontrolling interests

(24,379)

  (13,765)

3.99.01.01

ON

  0.44000

0.24000

3.99.02.01

ON

  0.44000

0.24000

 

13


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Consolidated Financial Statements

Statement of Comprehensive Income

(In thousands of Brazilian reais - R$)

 

 

 

 

 

 

Code

Description

 YTD current period
01/01/2018 to
03/31/2018

 YTD prior period
01/01/2017 to
03/31/2017

4.01

Consolidated profit for the period

419,404

232,121

4.02

Other comprehensive income

  (1,804)

  -

4.02.01

Actuarial gains (losses)

  (1,804)

  -

4.03

Consolidated comprehensive income for the period

417,600

232,121

4.03.01

Attributable to owners of the Company

441,979

245,886

4.03.02

Attributable to noncontrolling interests

  (24,379)

(13,765)

 

14


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Consolidated Financial Statements

Statement of Cash Flows – Indirect Method

(In thousands of Brazilian reais - R$)

 

 

 

 

 

 

Code

Description

 YTD current period
01/01/2018 to 
03/31/2018

 YTD prior period
01/01/2017 to
03/31/2017

6.01

Net cash from operating activities

  (463,070)

272,288

6.01.01

Cash generated from operations

  1,420,842

  1,418,071

6.01.01.01

Profit for the period before income tax and social contribution

668,428

383,043

6.01.01.02

Depreciation and amortization

390,185

376,718

6.01.01.03

Provision for tax, civil and labor risks

  25,507

  46,675

6.01.01.04

Interest on debts, inflation adjustment and exchange rate changes

359,359

592,962

6.01.01.05

Pension plan expense (income)

  22,477

  28,831

6.01.01.06

Loss (gain) on disposal of noncurrent assets

  30,898

  23,020

6.01.01.07

Deferred taxes (PIS and COFINS)

  (155)

  1,247

6.01.01.08

Others

  (11,084)

  (1,412)

6.01.01.09

Allowance for doubtful debts

  26,420

  46,696

6.01.01.10

Share of profit (loss) of investees

  (85,356)

  (79,709)

6.01.01.11

Impairment reversal

  (5,837)

-

6.01.02

Changes in assets and liabilities

  (1,883,912)

  (1,145,783)

6.01.02.01

Consumers, concessionaries and licensees

  (62,912)

  (347,285)

6.01.02.02

Taxes recoverable

  (12,528)

  (16,784)

6.01.02.04

Escrow deposits

  (5,431)

  (206,335)

6.01.02.05

Sectorial financial asset

  (21,033)

  20,486

6.01.02.06

Receivables - CDE

  37,218

  (70,265)

6.01.02.07

Concession financial assets (transmission companies)

  (2,188)

  (39,636)

6.01.02.08

Other operating assets

  (140,305)

  (85,564)

6.01.02.09

Dividend and interest on capital received

  21,503

  84,150

6.01.02.11

Trade payables

  (768,048)

  (479,421)

6.01.02.12

Other taxes and social contributions

  (14,018)

  44,109

6.01.02.13

Other liabilities with private pension plan

  (27,196)

  (25,499)

6.01.02.14

Regulatory charges

  (436,406)

  (41,786)

6.01.02.15

Tax, civil and labor risks paid

  (30,811)

  (60,668)

6.01.02.16

Sector financial liability

  (55,161)

562,875

6.01.02.17

Payables - amounts provided by the CDE

  (1,356)

  (7,545)

6.01.02.18

Other operating liabilities

214,577

132,880

6.01.02.19

Interest paid on debts and debentures

  (327,727)

  (457,262)

6.01.02.20

Income tax and social contribution paid

  (252,090)

  (152,233)


15


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Code

Description

 YTD current period
01/01/2018 to 
03/31/2018

 YTD prior period
01/01/2017 to
03/31/2017

6.02

Net cash from investing activities

  (445,733)

  (677,755)

6.02.02

Purchases of property, plant and equipment

  (56,084)

  (294,813)

6.02.03

Securities, pledges and restricted deposits

  (19,819)

  (51,359)

6.02.04

Purchases of intangible assets

  (369,830)

  (347,506)

6.02.06

Intragroup loans

-

  15,923

6.03

Net cash from financing activities

688,139

  (881,717)

6.03.01

Borrowings and debentures raised

  2,947,881

801,737

6.03.02

Repayment of principal of borrowings and debentures, net of derivatives

  (2,443,707)

  (1,410,704)

6.03.03

Settlement of derivatives

187,568

  (68,761)

6.03.04

Payment of business combination

-

  (2,514)

6.03.05

Dividend and interest on capital paid

  (3,603)

  (224,437)

6.03.07

Loan agreements with the parent company

-

  22,962

6.05

Increase (decrease) in cash and cash equivalents

  (220,664)

  (1,287,184)

6.05.01

Cash and cash equivalents at the beginning of the period

  3,249,642

  6,164,997

6.05.02

Cash and cash equivalents at the end of the period

  3,028,978

  4,877,813

16


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Consolidated Financial Statements

Statement of Changes in Equity – from January 1, 2018 to March 31, 2018

(In thousands of Brazilian reais - R$)

               
                   

 Code

 Description

 Share capital

 Capital reserves, options granted  and treasury shares

 Earnings reserves

 Retained earnings or accumulated losses

 Other comprehensive income

 Equity

 Noncontrolling interests

 Consolidated equity

5.01

Opening balances

  5,741,284

  468,014

  2,916,736

-

  (164,506)

  8,961,528

  2,224,816

  11,186,344

5.03

Adjusted opening balances

  5,741,284

  468,014

  2,916,736

-

  (164,506)

  8,961,528

  2,224,816

  11,186,344

5.05

Capital transactions with owners

-

  -

-

395,322

  (18,051)

  377,271

  (24,379)

352,892

5.05.01

Profit for the period

-

  -

-

443,783

-

  443,783

  (24,379)

419,404

5.05.02

Other comprehensive income

-

  -

-

  (48,461)

  (18,051)

 (66,512)

-

  (66,512)

5.05.02.01

Financial instruments adjustment

-

  -

-

-

  (16,247)

  (16,247)

-

  (16,247)

5.05.02.06

OCI: gain/loss actuarial

-

  -

-

-

  (1,804)

(1,804)

-

  (1,804)

5.05.02.09

Effects of first adoption of IFRS 9 / CPC 48

-

  -

-

  (48,461)

-

  (48,461)

-

  (48,461)

5.06

Internal changes in equity

-

4

  41,313

  (34,845)

  (6,468)

  4

  (17)

  (13)

5.06.05

Changes in statutory reserve in the period

-

  -

  41,313

  (41,313)

-

-

-

-

5.06.06

Realization of deemed cost of property, plant and equipment

-

  -

-

  9,799

  (9,799)

-

-

-

5.06.07

Tax effect on realization of deemed cost

-

  -

-

  (3,331)

  3,331

-

-

-

5.06.09

Other changes

-

4

-

-

-

  4

  (17)

  (13)

5.07

Closing balances

  5,741,284

  468,018

  2,958,049

360,477

  (189,025)

  9,338,803

  2,200,420

  11,539,223

17


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Consolidated Financial Statements

Statement of Changes in Equity – from January 1, 2017 to March 31, 2017

(In thousands of Brazilian reais - R$)

               
                   

 Code

 Description

 Share capital

 Capital reserves, options granted  and treasury shares

 Earnings reserves

 Retained earnings

 Other comprehensive income

 Equity

 Noncontrolling interests

 Consolidated equity

5.01

Opening balances

  5,741,284

  468,014

  1,995,355

-

  (234,632)

  7,970,021

  2,402,647

  10,372,668

5.03

Adjusted opening balances

  5,741,284

  468,014

  1,995,355

-

  (234,632)

  7,970,021

  2,402,647

  10,372,668

5.04

Capital transactions with owners

-

  -

  (7,820)

-

-

(7,820)

  (3,737)

  (11,557)

5.04.06

Dvidends

-

  -

  (7,820)

-

-

(7,820)

-

  (7,820)

5.05

Total comprehensive income

-

  -

-

245,886

-

  245,886

  (13,765)

232,121

5.05.01

Profit for the period

-

  -

-

245,886

-

  245,886

  (13,765)

232,121

5.06

Internal changes in equity

-

  -

  26,680

  (20,269)

  (6,411)

-

  (8)

  (8)

5.06.04

Realization of deemed cost of property, plant and equipment

-

  -

-

  6,411

  (6,411)

-

-

-

5.06.05

Changes in statutory reserve in the period

-

 -

  26,680

  (26,680)

-

-

-

-

5.06.09

Other changes in noncontrolling interests

-

  -

-

-

-

-

  (8)

  (8)

5.07

Closing balances

  5,741,284

  468,014

  2,014,215

225,617

  (241,043)

  8,208,087

  2,385,137

  10,593,224

18


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Consolidated Interim Financial Statements

Statement of Value Added

(In thousands of Brazilian reais - R$)

   
       

 Code

 Description

 YTD current period
01/01/2018 to 
03/31/2018

 YTD prior
01/01/2017 to
03/31/2017

7.01

Revenues

9,673,757

8,896,526

7.01.01

Sales of goods and services

9,266,935

8,179,148

7.01.02

Other revenues

  370,562

416,039

7.01.02.01

Revenue from construction of concession infrastructure

  370,562

416,039

7.01.03

Revenues related to construction of own assets

  62,680

348,035

7.01.04

Allowance for doubtful debts

(26,420)

(46,696)

7.02

Inputs purchased from third parties

(5,189,576)

  (4,679,612)

7.02.01

Cost of sales

(4,442,138)

  (3,586,020)

7.02.02

Materials, energy, third-party services and others

  (630,914)

(903,503)

7.02.04

Others

  (116,524)

(190,089)

7.03

Gross value added

4,484,181

4,216,914

7.04

Retentions

  (391,227)

(377,397)

7.04.01

Depreciation and amortization

  (319,718)

(305,281)

7.04.02

Others

(71,509)

(72,116)

7.04.02.01

Amortization of concession intangible assets

(71,509)

(72,116)

7.05

Wealth created by  the company

4,092,954

3,839,517

7.06

Wealth received in transfer

  294,210

377,753

7.06.01

 Interest in subsidiaries, associates and joint ventures

  85,356

79,709

7.06.02

Others

  208,854

298,044

7.07

Total wealth for disbribution

4,387,164

4,217,270

7.08

Wealth distributed

4,387,164

4,217,270

7.08.01

Personnel and charges

  336,795

349,210

7.08.01.01

Salaries and wages

  197,685

217,816

7.08.01.02

Benefits

  122,391

113,770

7.08.01.03

FGTS (Severance Pay Fund)

  16,719

17,624

7.08.02

Taxes, fees and contributions

3,105,820

2,877,814

7.08.02.01

Federal

1,674,230

1,404,262

7.08.02.02

State

1,425,792

1,468,374

7.08.02.03

Municipal

5,798

5,178

7.08.03

Lenders and lessors

  525,145

758,125

7.08.03.01

Interest

  507,082

738,422

7.08.03.02

Rentals

  18,063

19,703

7.08.04

Shareholders

  419,404

232,121

7.08.04.03

Retained earnings / Loss for the period

  419,404

232,121


19


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

COMMENTS ON PERFORMANCE

 

COMMENTS ON THE INDIVIDUAL PERFORMANCE

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

 

Profit or loss analysis

 

CPFL Energia (Parent)

This quarter, the increase in profit was R$ 197,898 when compared with the same period of the prior year (R$ 443,783 in 2018 and R$ 245,886 in 2017) mainly due to the increase in profit of investees.

20


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

   

Consolidated

   

1st Quarter

   

2018

 

2017

 

Variation

Gross operating revenue

 

  9,637,497

 

  8,730,385

 

10.4%

Electricity sales to final consumers (*)

 

  6,747,443

 

  6,821,851

 

-1.1%

Electricity sales to wholesalers (*)

 

998,459

 

950,802

 

5.0%

Revenue from concession infrastructure construction

 

370,562

 

416,039

 

-10.9%

Other operating revenues (*)

 

  1,147,486

 

  1,106,695

 

3.7%

Sector financial assets and liabilities

 

373,547

 

  (565,003)

 

166.1%

Deductions from operating revenue

 

(3,262,842)

 

(3,191,606)

 

2.2%

Net operating revenue

 

  6,374,654

 

  5,538,779

 

15.1%

Cost of electric energy

 

(4,013,721)

 

(3,220,654)

 

24.6%

Electricity purchased for resale

 

(3,301,275)

 

(3,018,384)

 

9.4%

Network usage charge

 

  (712,446)

 

  (202,270)

 

252.2%

Operating costs and expenses

 

(1,470,342)

 

(1,578,654)

 

-6.9%

Personnel

 

  (337,745)

 

  (332,483)

 

1.6%

Private pension entity

 

  (22,477)

 

  (28,831)

 

-22.0%

Materials

 

  (62,622)

 

  (55,095)

 

13.7%

Third-party services

 

  (180,932)

 

  (185,253)

 

-2.3%

Depreciation and amortization

 

  (318,676)

 

  (304,323)

 

4.7%

Amortization of concession intangible asset

 

  (71,509)

 

  (72,116)

 

-0.8%

Cost of concession infrastructure construction

 

  (370,559)

 

  (414,627)

 

-10.6%

Others

 

  (105,822)

 

  (185,924)

 

-43.1%

Income from electric energy services

 

890,592

 

739,472

 

20.4%

Finance income (costs)

 

  (307,519)

 

  (436,138)

 

-29.5%

Finance income

 

197,151

 

280,711

 

-29.8%

Finance costs

 

  (504,671)

 

  (716,850)

 

-29.6%

Share of profit (loss) of investees

 

85,356

 

79,709

 

7.1%

Profit before taxes

 

668,428

 

383,043

 

74.5%

Social contribution

 

  (66,869)

 

  (40,575)

 

64.8%

Income tax

 

  (182,156)

 

  (110,347)

 

65.1%

Profit for the period

 

419,404

 

232,121

 

80.7%

             

Profit for the period attributable to owners of the Company

 

443,783

 

245,886

 

80.5%

Profit for the perioid attributable to noncontrolling interests

 

  (24,379)

 

  (13,765)

 

77.1%

             

EBITDA

 

  1,366,277

 

  1,195,765

 

14.3%

             
             
             
             

Reconciliation of Profit for the Period and EBITDA

 

 

 

 

 

 

Profit for the Period

 

419,404

 

232,121

 

 

Depreciation and amortization

 

390,185

 

376,440

 

 

Amortization of fair value adjustment of assets

 

  145

 

  145

 

 

Finance income (costs)

 

307,519

 

436,138

 

 

Social contribution

 

66,869

 

40,575

 

 

Income tax

 

182,156

 

110,347

 

 

EBITDA

 

  1,366,278

 

  1,195,765

 

 

 

 

 

 

 

 

 

 

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

21


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Gross operating revenue

 

Gross operating revenue for the 1st quarter of 2018 was R$ 9,637,497, an increase of 10.4% (R$ 907,112) compared with the same period of the prior year.        

The main factors of this variation were:

 

·       Decrease of 1.1% (R$ 74,408) in the electricity sales to final consumer, justified by the decrease in average tariffs of 2.8% (R$ 194,497), mainly from the negative effects of the Annual Tariff Adjustments (RTA) and increase of 1.8% in the volume of energy sold (R$ 120,088);

·       Increase of 5 % (R$ 47,657) in the electricity sales to wholesalers, mainly due to:

 

o   Increase of 22.2,9% (R$ 126,693) in other concessionaires and licensees, basically due to the increase of 11% in the average price (R$ 62,716), and 10.1% in the average price (R$ 63,977);

o   Decrease of 32.1% (R$ 78,522) in sale of spot market energy in CCEE (Electric Energy Trading Chamber), basically due to the decrease in energy sold of 59.7% (R$ 146,025), partially offset by an increase in average tariffs of 68.4% (R$ 67,503).

·       Increase of 166.1% (R$ 938,549) in sector financial liability (from an expense of R$ 565,003 in 2017 to an income of R$ 373,547 in 2018), due to: (i) in the 1st quarter of 2018, the realization of a liability (R$ 325,729), mainly of ESS and EER, CDE and electric energy costs and the setting up of an asset (R$ 47,817) and (ii) in the 1st quarter of 2017, the realization of an asset (R$ 218,018) and the setting up of a liability (R$ 346,984).

·       Increase of 3.7% (R$ 40,791) in other operating revenues, due to: increase in (i) TUSD free consumers (R$ 52,931) and (ii) other revenues and income (R$ 28,741), partially offset by a reduction in: (iii) contribution CDE – injunctions and others (R$ 47,233).

 

Ø  Volume of energy sold by distributors

 

In the 1st quarter of 2018, the amount of energy billed to captive consumers in the period, including other licensees presented an increase of 0.8% when compared with the same quarter of the prior year.

The consumption of the residential class represents 43.1% of the total market supplied by the distributor. With the positive performance of income mass, which, in the accumulated of 12 months (until January 2018) recorded an increase of 3.3%, consumption recorded an increase of 0.8% in the 1st quarter of 2018, in relation to the same period of the prior year.

The commercial class, which represents 19.4% of the total market supplied by the distributor, presented a drop of 4.9% in the 1st quarter of 2018 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 12.5% of the total market supplied by distributors, reported a fall of 7.8% in the 1st quarter of 2018 in relation to the same period of the prior year. Such performance reflects the client’s migration to the free market.

The other consumption classes (rural, public administration, public utilities and licensees) participate with 24.9% of the total market supplied by distributors. Such classes presented a growth of 3.3% in the 1st quarter of 2018 in relation to the same period of the prior year. This performance reflects the growth in consumption of rural and public utilities classes.

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 2.9% when compared with the same period of the prior year. The variation by class presents an increase of 0.8% in the residential class, an increase of 0.1% in the commercial class and an increase of 5.8% in the industrial class. Regarding other classes, there was a growth of 3.6%.

22


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

Ø  Tariffs

In the 1st quarter of 2018, energy supply tariffs decreased on average 2.8%. This occurred mainly due to the effects of the annual tariff adjustments and periodic tariff review, as follows:

       

2018

 

2017

Distributor

 

Month

 

RTA / RTP

 

Consumer

perception (a)

 

RTA / RTP

 

Consumer perception (a)

CPFL Paulista

 

April (b)

 

12.68%

 

16.90%

 

-0.80%

 

-10.50%

CPFL Piratininga

 

October

 

(c)

 

(c)

 

7.69%

 

17.28%

RGE

 

June

 

(c)

 

(c)

 

3.57%

 

5.00%

RGE Sul

 

April (b)

 

18.45%

 

22.47%

 

-0.20%

 

-6.43%

CPFL Santa Cruz

 

March (d)

 

(d)

 

(d)

 

-1.28%

 

-8.42%

CPFL Leste Paulista

 

March (d)

 

(d)

 

(d)

 

0.77%

 

-4.15%

CPFL Jaguari

 

March (d)

 

5.71%

 

(d)

 

2.05%

 

-2.56%

CPFL Sul Paulista

 

March (d)

 

(d)

 

(d)

 

1.63%

 

-10.73%

CPFL Mococa

 

March (d)

 

(d)

 

(d)

 

1.65%

 

-3.28%

 

(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.

(b)     As described in note 34 to the interim financial information, in April 2018 the subsidiaries CPFL Paulista and RGE Sul adjusted their tariffs.

(c)     The respective adjustments for 2018 have not yet occurred.

(d)     As mentioned in note 12.5.2 to the interim financial information, at December 31, 2017, the EGM approved the grouping of subsidiaries Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia e Companhia Luz and Força de Mococa. In accordance with Normative Resolution 716, of May 3, 2016, until the first tariff review of the grouped concessionaire, which will take place in March 2021, ANEEL may apply the procedure that divides over time the variation in the tariffs of the former concessions and the unified tariff. The decision regarding the tariff transition occurred in the tariff adjustment of March 2018.

On March 13, 2018, the Brazilian Electricity Regulatory Agency – ANEEL published Resolution No. 2,376, which set the average annual tariff adjustment of Companhia Jaguari de Energia (“CPFL Santa Cruz”), effective as of March 22, 2018, at 5.71%, 4.41% regarding the economic tariff adjustment and 1.30% regarding relevant financial components. The average effect to be perceived by consumers of the original concessions are:

 

Consumer perception

 

Jaguari

 

Mococa

 

Leste Paulista

 

Sul Paulista

 

Santa Cruz

       

21.15%

 

3.40%

 

7.03%

 

7.50%

 

5.32%

                         

 

Deductions from operating revenue

Deductions from operating revenue in the 1st quarter of 2018 were R$ 3,262,842, an increase of 2.2% (R$ 71,236) in relation to the same quarter of 2017, which mainly occurred due to:

 

·       Increase of 10.2% (R$ 77,908) in PIS and COFINS, mainly due to the increase in the basis of calculation of these taxes (operating revenue);

·       Increase of 3.8% (R$ 36,400) in sector charges, mainly due to an increase in Energy Development Account – CDE (R$ 67,515), partially offset by a decrease in tariff flags and others (R$ 29,507).

·       Decrease of 2.9% (R$ 43,057) in ICMS, mainly due to the decrease in billed supply;

23


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Cost of electric energy

The cost of electric energy this quarter amounted to R$ 4,013,721, an increase of 24.6% (R$ 793,067) in relation to the same period of the prior year, mainly justified by:

·       Increase of 9.4% (R$ 282,891) in electric energy purchased for resale, due to:

o   Increase of 14.7% (R$ 423,640) in average price due to the increase in the PLD;

o   Decrease of 4.7% (R$ 140,749) in the amount of energy purchased.

·       Increase of 252.2% (R$ 510,176) in the transmission and distribution system usage charges, mainly due to: (i) basic network charges (R$ 319,565) and (ii) system service charge– ESS and reserve energy charge – EER (R$ 195,452).   

Operating costs and expenses

Disregarding the cost of construction of the concession infrastructure, Operating Costs and Expenses this quarter amounted to R$ 1,099,784, a decrease of 5.5% (R$ 64,243) compared with the same period of the prior year. This variation is mainly due to:

·       Personnel: increase of 1.6% (R$ 5,261), mainly due to the effects of the collective labor agreement; 

·       Private pension entity: decrease of 22% (R$ 6,354) due to the recognition of the impact of the actuarial report of 2018;

·       Materials: increase of 13.7% (R$ 7,527), mainly due to maintenance of lines and networks (R$ 13,353), partially offset by a decrease in fleet maintenance (R$ 8,858);

·       Third-party services: decrease of 2.3% (R$ 4,321) mainly due to a decrease in consulting and auditing services (R$ 6,821), partially offset by maintenance of assets (R$ 3,284).

·         Depreciation and amortization: increase of 4.7% (R$ 14,353), basically due to: (i) increase in subsidiary CPFL Renováveis mainly due to the beginning of operations of renewable generation facilities (R$ 6,273) and (iii) increase in other distribution subsidiaries basically due to an increase in the distribution infrastructure intangible asset (R$ 8,053);

·         Other expenses: increase of 43.1 % (R$ 80,102), mainly due to decreases in: (i) legal and compensations (R$ 42,835), (ii) allowance for doubtful debts (R$ 20,276), (iii) offset for non-compliance with technical indexes (R$ 17,648), which, as of January 1, 2018 is now classified in Other Revenues and (iv) reversal of provision for impairment (R$ 5,837), partially offset by an increase in gain on disposal and retirement of non-current assets (R$ 17,131).

 

Finance income (costs)

Net finance result this quarter presented costs of R$ 307,519, compared with R$ 436,138 in the same period of 2017, a decrease in net finance costs of 29.5% (R$ 128,619). Such variation is basically due to:

·       Decrease in finance income of 29.8% (R$ 83,560), basically from a decrease in financial investment earnings (R$ 93,818), partially offset by adjustments of the sector financial asset (R$ 7,105);

·       Decrease in finance costs of 29.6% (R$ 212,179), mainly due to the charges on debts, adjustments for inflation and exchange rate changes, net of capitalized interest (R$ 188,588), and adjustments of the sector financial liability (R$ 22,512).

24


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - 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:

 

 

1st Quarter 2018

 

1st Quarter 2017

Epasa

 

 24,264

 

 19,032

Baesa

 

 3,049

 

 1,282

Enercan

 

 27,398

 

 34,151

Chapecoense

 

 30,789

 

 25,389

Amortization of fair value adjustment of asset

 

 (145)

 

 (145)

Total

 

 85,356

 

 79,709

 

·       EPASA: Increase of R$ 5,232 basically due to the variation of energy price by 3%.

·       Chapecoense: Increase of R$ 5,400 mainly due to increase in financial update of tax credits (R$ 3,643) and decrease in financial update of Use of Public Asset (R$ 1,365);

·       ENERCAN: Decrease of R$ 6,753 mainly due to decrease in financial investment earnings (R$ 5,058) and increase in debt charges (R$ 2,109).

 

Social Contribution and Income Tax

 

Expenses on taxes on profit in the 1st quarter of 2018 were R$ 249,023, an increase of 65% (R$ 98,101) in relation to the one recorded in the same quarter of 2017, 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$ 419,404, 80.7% (R$ 187,282) higher than the one of the same period of 2017.

EBITDA (Earnings before the effects of depreciation, amortization, finance income and costs, and income tax and social contribution) for the 1st quarter of 2018 was R$ 1,366,277, 14.3% (R$ 170,510) higher than the one determined in the same period of 2017.

25


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - 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 Information - ITR as of March 31, 2018 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 Information – ITR as of March 31, 2018 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 Information – ITR as of March 31, 2018 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 Information – ITR as of March 31, 2018 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 Information – ITR as of March 31, 2018 filed with the Brazilian Securities and Exchange Commission (CVM).

 

26


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Subsidiary: CPFL Comercialização Brasil S.A.

   

Consolidated

   

1st Quarter

   

2018

 

2017

 

Variation

Gross operating revenue

 

  805,354

 

  703,672

 

14.5%

Electricity sales to final consumers

 

  460,258

 

  436,533

 

5.4%

Electricity sales to wholesalers

 

  345,094

 

  267,136

 

29.2%

Other operating revenues

 

2

 

2

 

0.0%

Deductions from operating revenue

 

(96,451)

 

(84,129)

 

14.6%

Net operating revenue

 

  708,903

 

  619,543

 

14.4%

Cost of electric energy

 

(691,078)

 

(569,201)

 

21.4%

Electricity purchased for resale

 

(691,049)

 

(569,175)

 

21.4%

Network usage charge

 

  (28)

 

  (25)

 

13.2%

Operating expenses

 

(11,611)

 

(11,633)

 

-0.2%

Personnel

 

(7,839)

 

(7,742)

 

1.3%

Materials

 

  (25)

 

  (34)

 

-28.0%

Third-party services

 

(2,155)

 

(2,076)

 

3.8%

Depreciation/amortization

 

  (612)

 

  (907)

 

-32.6%

Others

 

  (980)

 

  (873)

 

12.2%

Income from electric energy services

 

  6,214

 

  38,709

 

-83.9%

Finance income (costs)

 

(7,365)

 

(11,199)

 

-34.2%

Finance income

 

  10,772

 

  7,051

 

52.8%

Finance costs

 

(18,136)

 

(18,250)

 

-0.6%

Equity

 

  12,799

 

  -

 

0.0%

Profit before taxes

 

  11,649

 

  27,510

 

-57.7%

Social contribution

 

26

 

(2,522)

 

-101.0%

Income tax

 

  (183)

 

(7,018)

 

-97.4%

Profit for the period

 

  11,492

 

  17,970

 

-36.0%

             

EBITDA

 

  19,916

 

  39,616

 

-49.7%

             
             
             
             

Reconciliation of Profit for the Period and EBITDA (*)

 

 

 

 

 

 

Profit for the Period

 

  11,492

 

  17,970

 

 

Depreciation and amortization

 

612

 

907

 

 

Finance income (costs)

 

  7,365

 

  11,199

 

 

Social contribution

 

  (26)

 

  2,522

 

 

Income tax

 

183

 

  7,018

 

 

EBITDA

 

  19,916

 

  39,616

 

 

 

 

 

 

 

 

 

(*) information not reviewed by the independent auditors.

   

 

Gross Operating Revenue

The gross operating revenue for the 1st quarter of 2018 was R$ 805,354, an increase of R$ 101,682 (14.5%) in relation to the same quarter of 2017, mainly explained by: (i) supply of electric energy, basically in the amount sold to commercial clients and public services, (R$ 21,425); (ii) supply of energy mainly in the amount of energy sold (R$ 80,922).

27


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Cost of Electric Energy

Cost of electric energy in the 1st quarter of 2018 was R$ 691,078, an increase of R$ 121,877 (21.4%) in relation to the same quarter of 2017, basically explained by bilateral contracts: increase in volume (R$ 148,874) and in decrease in average price of 17.8% (R$ 25,410).

 

Finance Income (Costs)

The finance result determined in the 1st quarter of 2018 was a finance cost of R$ 7,365, a decrease of R$ 3,834 in relation to the same quarter of 2017, mainly due to the increase of inflation adjustment revenue of trade receivables with CCEE (R$ 6,153), partially offset by the decrease of financial investment earnings (R$ 1,326).

 

The share of profit (loss) of investees in the 1st quarter of 2018 was R$ 12,799, as a result of the share of loss of RGE Sul (R$ 13,089)

 

Profit for the Period and EBITDA

The result determined in the 1st quarter of 2018 was a profit of R$ 11,492, a decrease of R$ 6,478 (36.0%) when compared with the same quarter of 2017.

EBITDA (Earnings before finance result, income tax and social contribution and depreciation and amortization) for the 1st quarter of 2018 was R$ 19,990, a decrease of 49.6% when compared with the same quarter of 2017, which was R$ 39,690 (information not reviewed by the Independent Auditors).

28


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

NOTES TO FINANCIAL STATEMENTS

 

 

SUMMARY

 
     

ASSET

2

LIABILITY AND EQUITY

3

STATEMENTET OF INCOME

4

STATEMENTET OF COMPREHENSIVE INCOME

5

STATEMENTET OF CHANGES IN SHAREHOLDER’ EQUITY

6

STATEMENTET OF CASH FLOW

7

STATEMENTET OF VALUE ADDED

8

(1)

OPERATIONS

9

(2)

PRESENTATION OF THE INTERIM FINANCIAL STATEMENTS

11

(3)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

13

(4)

FAIR VALUE MEASUREMENT

14

(5)

CASH AND CASH EQUIVALENTS

15

(6)

CONSUMERS, CONCESSIONAIRES AND LICENSEES

15

(7)

TAXES RECOVERABLE

17

(8)

SECTOR FINANCIAL ASSET AND LIABILITY

18

(9)

DEFERRED TAX ASSETS AND LIABILITIES

18

(10)

CONCESSION FINANCIAL ASSET

21

(11)

OTHER RECEIVABLES

21

(12)

INVESTMENTS

22

(13)

PROPERTY, PLANT AND EQUIPMENT

27

(14)

INTANGIBLE ASSETS

28

(15)

TRADE PAYABLES

29

(16)

BORROWINGS

30

(17)

DEBENTURES

35

(18)

PRIVATE PENSION PLAN

39

(19)

REGULATORY CHARGES

40

(20)

TAXES, FEES AND CONTRIBUTIONS

40

(21)

PROVISION FOR TAX, CIVIL AND LABOR RISKS AND ESCROW DEPOSITS

41

(22)

OTHER PAYABLES

42

(23)

EQUITY

42

(24)

EARNINGS PER SHARE

43

(25)

NET OPERATING REVENUE

43

(26)

COST OF ELECTRIC ENERGY

46

(27)

OPERATING COSTS AND EXPENSES

46

(28)

FINANCE INCOME (COSTS)

48

(29)

SEGMENT INFORMATION

48

(30)

RELATED PARTY TRANSACTIONS

49

(31)

RISK MANAGEMENT

50

(32)

FINANCIAL INSTRUMENTS

51

(33)

NON-CASH TRANSACTIONS

56

(34)

SIGNIFICANT FACT AND EVENTS AFTER THE REPORTING PERIOD

56

INDEPENDENT AUDITORS’ REPORT

58


29


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

CPFL Energia S.A.

Statements of financial position at March 31, 2018 and December 31, 2017

(In thousands of Brazilian reais - R$)

                 
 

Note

Parent company

 

Consolidated

ASSETS

March 31, 2018

 

December 31, 2017

 

March 31, 2018

 

December 31, 2017

                 

Current assets

               

Cash and cash equivalents

5

  3,486

 

  6,581

 

  3,028,978

 

  3,249,642

Consumers, concessionaires and licensees

6

-

 

-

 

  4,258,871

 

  4,301,283

Dividends and interest on capital

12

139,424

 

204,807

 

56,145

 

  56,145

Income tax and social contribution to be offset

7

16,934

 

17,051

 

107,230

 

  88,802

Other taxes recoverable

7

46,976

 

46,699

 

310,415

 

  306,244

Derivatives

32

-

 

-

 

341,350

 

  444,029

Sector financial asset

8

-

 

-

 

570,967

 

  210,834

Concession financial asset

10

-

 

-

 

24,017

 

  23,736

Other receivables

11

466

 

243

 

905,061

 

  900,498

Total current assets

 

207,286

 

275,383

 

  9,603,034

 

  9,581,211

                 

Noncurrent assets

               

Consumers, concessionaires and licensees

6

-

 

-

 

243,195

 

  236,539

Intragroup loans

30

-

 

127,147

 

-

 

  8,612

Escrow deposits

21

731

 

665

 

854,224

 

  839,990

Income tax and social contribution to be offset

7

-

 

-

 

65,285

 

  61,464

Other taxes recoverable

7

-

 

-

 

170,279

 

  171,980

Sector financial assets

8

-

 

-

 

66,841

 

  355,003

Derivatives

32

-

 

-

 

116,934

 

  203,901

Deferred tax assets

9

146,052

 

145,779

 

977,462

 

  943,199

Advances for future capital increases

 

350,000

 

350,000

 

-

 

-

Concession financial asset

10

-

 

-

 

  6,794,551

 

  6,545,668

Investments at cost

 

-

 

-

 

116,654

 

  116,654

Other receivables

11

  5,536

 

  5,761

 

861,611

 

  840,192

Investments

12

  8,942,192

 

  8,557,673

 

  1,065,403

 

  1,001,550

Property, plant and equipment

13

  1,149

 

  1,170

 

  9,678,537

 

  9,787,125

Intangible assets

14

93

 

71

 

  10,552,350

 

  10,589,824

Total noncurrent assets

 

  9,445,752

 

  9,188,265

 

  31,563,326

 

  31,701,702

                 

Total assets

 

  9,653,038

 

  9,463,648

 

  41,166,359

 

  41,282,912

 

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

30


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

CPFL Energia S.A.

Statements of financial position at March 31, 2018 and December 31, 2017

(In thousands of Brazilian reais - R$)

                   
 

Note

 

Parent company

 

Consolidated

LIABILITIES AND EQUITY

 

March 31, 2018

 

December 31, 2017

 

March 31, 2018

 

December 31, 2017

                   

Current liabilities

                 

Trade payables

15

 

  1,438

 

  1,644

 

  2,528,146

 

  3,296,870

Borrowings

16

 

-

 

-

 

  3,562,035

 

  3,589,607

Debentures

17

 

-

 

  1,938

 

  1,892,414

 

  1,703,073

Private pension plan

18

 

-

 

-

 

66,133

 

60,801

Regulatory charges

19

 

-

 

-

 

145,194

 

581,600

Income tax and social contribution payable

20

 

-

 

-

 

101,510

 

81,457

Other taxes, fees and contributions

20

 

  1,943

 

717

 

619,798

 

628,846

Dividends

   

281,914

 

281,919

 

294,141

 

297,744

Estimated payroll

   

-

 

-

 

124,533

 

116,080

Derivatives

32

 

-

 

-

 

40,943

 

10,230

Sector financial liability

8

 

-

 

-

 

17,860

 

40,111

Use of public asset

   

-

 

-

 

10,939

 

10,965

Other payables

22

 

16,395

 

17,594

 

  1,061,146

 

961,306

Total current liabilities

   

301,690

 

303,812

 

10,464,792

 

11,378,688

                   

Noncurrent liabilities

                 

Trade payables

15

 

-

 

-

 

130,334

 

128,438

Borrowings

16

 

-

 

-

 

  6,536,192

 

  7,402,450

Debentures

17

 

-

 

184,388

 

  8,816,277

 

  7,473,454

Private pension plan

18

 

-

 

-

 

872,113

 

880,360

Other taxes, fees and contributions

20

 

-

 

-

 

16,459

 

18,839

Deferred tax liabilities

9

 

-

 

-

 

  1,236,496

 

  1,249,591

Provision for tax, civil and labor risks

21

 

560

 

600

 

978,316

 

961,134

Derivatives

32

 

-

 

-

 

37,544

 

84,576

Sector financial liability

8

 

-

 

-

 

23,973

 

8,385

Use of public asset

   

-

 

-

 

84,847

 

83,766

Other payables

22

 

11,985

 

13,320

 

429,795

 

426,889

Total noncurrent liabilities

   

12,544

 

198,308

 

19,162,345

 

18,717,880

                   

Equity

23

               

Issued capital

   

  5,741,284

 

  5,741,284

 

  5,741,284

 

  5,741,284

Capital reserves

   

468,018

 

468,014

 

468,018

 

468,014

Legal reserve

   

798,090

 

798,090

 

798,090

 

798,090

Statutory reserve - concession financial asset

   

867,912

 

826,600

 

867,912

 

826,600

Statutory reserve - working capital improvement

   

  1,292,046

 

  1,292,046

 

  1,292,046

 

  1,292,046

Accumulated comprehensive income

   

  (189,025)

 

  (164,506)

 

  (189,025)

 

  (164,506)

Retained earnings

   

360,478

 

-

 

360,478

 

  -

     

  9,338,803

 

  8,961,528

 

  9,338,803

 

  8,961,528

Equity attributable to noncontrolling interests

   

-

 

-

 

  2,200,419

 

  2,224,816

Total equity

   

  9,338,803

 

  8,961,528

 

11,539,223

 

11,186,344

                   

Total liabilities and equity

   

  9,653,038

 

  9,463,648

 

41,166,359

 

41,282,912

 

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

31


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

CPFL Energia S.A.

Statements of income for the periods ended March 31, 2018 and 2017

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

                 
                 
 

Note

Parent company

 

Consolidated

 

1st quarter 2018

 

1st quarter 2017

 

1st quarter 2018

 

1st quarter 2017

Net operating revenue

25

  -

 

  -

 

6,374,654

 

5,538,779

Cost of electric energy services

               

Cost of electric energy

26

  -

 

  -

 

  (4,013,721)

 

  (3,220,654)

Cost of operation

27

  -

 

  -

 

(669,933)

 

(669,727)

Cost of services rendered to third parties

27

  -

 

  -

 

(371,361)

 

(415,267)

   

 

 

 

 

 

 

 

Gross profit

 

  -

 

  -

 

1,319,640

 

1,233,131

Operating expenses

27

             

Selling expenses

 

  -

 

  -

 

(128,640)

 

(149,218)

General and administrative expenses

 

  (9,246)

 

  (17,166)

 

(203,875)

 

(261,564)

Other operating expenses

 

  -

 

  -

 

  (96,533)

 

  (82,877)

                 
   

 

 

 

 

 

 

 

Income from electric energy services

 

  (9,246)

 

  (17,166)

 

  890,592

 

  739,472

                 

Equity interests in subsidiaries, associates and joint ventures

12

  450,986

 

  271,847

 

85,356

 

79,709

Finance income (costs)

28

             

Finance income

 

7,084

 

5,764

 

  197,151

 

  280,711

Finance costs

 

  (5,309)

 

  (23,106)

 

(504,671)

 

(716,850)

   

1,775

 

  (17,341)

 

(307,519)

 

(436,138)

Profit before taxes

 

  443,515

 

  237,339

 

  668,428

 

  383,043

Social contribution

9

  552

 

3,120

 

  (66,869)

 

  (40,575)

Income tax

9

(285)

 

5,426

 

(182,156)

 

(110,347)

   

  267

 

8,546

 

(249,024)

 

(150,922)

                 

Profit for the period

 

  443,783

 

  245,886

 

  419,404

 

  232,121

                 

Profit for the period attributable to owners of the Company

         

  443,783

 

  245,886

Profit (loss) for the period attributable to noncontrolling interests

         

  (24,379)

 

  (13,765)

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

24

       

0.44

 

0.24

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

24

       

0.44

 

0.24

 

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

 

32


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

         

 CPFL Energia S.A.

 Statements of comprehensive income for the periods ended March 31, 2018 and 2017

 (In thousands of Brazilian reais - R$)

         
   

Parent company

   

1st quarter 2018

 

1st quarter 2017

Profit for the period

 

            443,783

 

            245,886

         

Other comprehensive income

       

Items that will not be reclassified subsequently to profit or loss

       

     Comprehensive income for the period of subsidiaries

 

              (1,803)

 

                    -  

         

Total comprehensive income for the period - individual

 

            441,979

 

            245,886

         
         
         
         
   

Consolidated

   

1st quarter 2018

 

1st quarter 2017

Profit for the period

 

            419,404

 

            232,121

         

Other comprehensive income

       

Items that will not be reclassified subsequently to profit or loss

       

     - Actuarial gains (losses), net of tax effects

 

              (1,803)

 

                    -  

         

Total comprehensive income for the period

 

            417,601

 

            232,121

Attributable to owners of the Company

 

            441,979

 

            245,886

Attributable to noncontrolling interests

 

            (24,379)

 

            (13,765)

 

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

 

33


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 CPFL Energia S.A.

 Statements of changes in shareholders' equity for the periods ended March 31, 2018 and 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 / Credit risk in mark to market

 

 Retained earnings

 

 Total

   

 Other equity components

 Total equity

Balance at December 31, 2017

5,741,284

 

  468,014

 

  798,090

 

  826,600

 

  1,292,046

 

  -

 

  405,840

 

(570,346)

 

  -

 

8,961,528

 

11,833

 

2,212,983

 

11,186,344

                                                   

Total comprehensive income

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  -

 

  (18,051)

 

  395,322

 

  377,272

 

  -

 

  (24,379)

 

  352,893

 Profit for the period

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  443,783

 

  443,783

 

  -

 

  (24,379)

 

  419,404

 Other comprehensive income - credit risk in mark to market

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  -

 

  (16,247)

 

  -

 

  (16,247)

 

  -

 

  -

 

  (16,247)

 Other comprehensive income - actuarial gains (losses)

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  -

 

  (1,803)

 

  -

 

  (1,803)

 

  -

 

  -

 

  (1,803)

 Effects of first adoption of IFRS 9 / CPC 48

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  (48,461)

 

  (48,461)

 

  -

 

  -

 

  (48,461)

                                                   

 Internal changes in equity

  -

 

5

 

  -

 

41,312

 

-

 

  -

 

  (6,468)

 

  -

 

  (34,844)

 

5

 

(444)

 

  426

 

(13)

Realization of deemed cost of property, plant and equipment

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  (9,799)

 

  -

 

9,799

 

  -

 

(673)

 

  673

 

  -

Tax effect on realization of deemed cost

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

3,332

 

  -

 

  (3,332)

 

  -

 

  229

 

(229)

 

 -

Recognition of legal reserve

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

Changes in statutory reserve in the period

  -

 

  -

 

  -

 

41,312

 

-

 

  -

 

  -

 

  -

 

  (41,312)

 

  -

 

  -

 

  -

 

  -

Other changes in noncontrolling interests

  -

 

5

 

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  -

 

5

 

  -

 

(18)

 

(13)

                                                   

Capital transactions with owners

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  -

 

  -

 

 -

 

  -

 

  -

                                                   

Balance at March 31, 2018

5,741,284

 

  468,018

 

  798,090

 

  867,912

 

  1,292,046

 

  -

 

  399,371

 

(588,395)

 

  360,478

 

9,338,803

 

11,388

 

2,189,030

 

11,539,223

                                                   
                                                   
         

 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

  -

 

  -

  

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  245,886

 

  245,886

 

  -

 

  (13,765)

 

  232,121

 Profit for the period

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  245,886

 

  245,886

 

  -

 

  (13,765)

 

  232,121

 Other comprehensive income - credit risk in mark to market

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

 -

 

  -

                                                   

 Internal changes in equity

  -

 

  -

 

  -

 

26,680

 

-

 

  -

 

  (6,411)

 

  -

 

  (20,269)

 

  -

 

(437)

 

  429

 

  (8)

Realization of deemed cost of property, plant and equipment

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  (9,713)

 

  -

 

9,713

 

  -

 

(662)

 

  662

 

  -

Tax effect on realization of deemed cost

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

3,302

 

  -

 

  (3,302)

 

  -

 

  225

 

(225)

 

  -

Changes in statutory reserve in the period

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  -

 

  -

 

 -

 

  -

 

  -

Other changes in noncontrolling interests

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

                                                   

Capital transactions with owners

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  -

 

  (7,820)

 

  -

 

  (3,737)

 

  (11,557)

Dividend proposal  approved

  -

 

  -

 

  -

 

  -

 

-

 

  (7,820)

 

  -

 

  -

 

  -

 

  (7,820)

 

  -

 

  -

 

  (7,820)

Dividend distributed to noncontrollers

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

  (3,737)

 

  (3,737)

                                                   

Balance at March 31, 2017

5,741,284

 

  468,014

 

  739,102

 

  729,608

 

545,505

 

  -

 

  425,302

 

(666,346)

 

  225,617

 

8,208,088

 

13,135

 

2,372,003

 

10,593,224

 

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

34


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

CPFL Energia SA

 Statements of cash flow for the periods ended March 31, 2018 and 2017

 (in thousand of Brazilian reais - R$)

                 
   

Parent Company

 

Consolidated

   

March 31, 2018

 

March 31, 2017

 

March 31, 2018

 

March 31, 2017

                 

Profit before taxes

 

                443,515

 

                237,339

 

                668,428

 

                383,043

Adjustment to reconcile profit to cash from operating activities

               

   Depreciation and amortization

 

                        48

 

                        54

 

                390,185

 

                376,718

   Provision for tax, civil and labor risks

 

                       (36)

 

                          4

 

                  25,507

 

                  46,675

   Allowance for doubtful accounts

 

                         -  

 

                         -  

 

                  26,420

 

                  46,696

   Interest on debts, inflation adjustment and exchange rate changes

 

                    2,981

 

                  22,329

 

                359,359

 

                592,962

   Pension plan expense (income)

 

                         -  

 

                         -  

 

                  22,477

 

                  28,831

   Equity interests in associates and joint ventures

 

               (450,986)

 

               (271,847)

 

                 (85,356)

 

                 (79,709)

   Reversal of impairment

 

                         -  

 

                         -  

 

                   (5,837)

 

                         -  

   Loss (gain) on disposal of noncurrent assets

 

                         -  

 

                         -  

 

                  30,898

 

                  23,020

   Deferred taxes (PIS and COFINS)

 

                         -  

 

                         -  

 

                     (155)

 

                    1,247

   Others

 

                         -  

 

                         -  

 

                 (11,085)

 

                   (1,412)

   

                   (4,478)

 

                 (12,121)

 

             1,420,842

 

             1,418,071

Decrease (increase) in operating assets

               

   Consumers, concessionaires and licensees

 

                         -  

 

                         -  

 

                 (62,912)

 

               (347,285)

   Dividend and interest on capital received

 

                  65,383

 

                189,515

 

                  21,503

 

                  84,150

   Taxes recoverable

 

                       (20)

 

                   (1,979)

 

                 (12,528)

 

                 (16,784)

   Escrow deposits

 

                       (65)

 

                      364

 

                   (5,431)

 

               (206,335)

   Sector financial asset

 

                         -  

 

                         -  

 

                 (21,033)

 

                  20,486

   Receivables - CDE

 

                         -  

 

                         -  

 

                  37,218

 

                 (70,265)

   Concession financial assets (transmission companies)

 

                         -  

 

                         -  

 

                   (2,188)

 

                 (39,636)

   Other operating assets

 

                      174

 

                  18,096

 

               (140,305)

 

                 (85,564)

                 

Increase (decrease) in operating liabilities

               

   Trade payables

 

                     (206)

 

                   (1,886)

 

               (768,048)

 

               (479,421)

   Other taxes and social contributions

 

                    1,220

 

                    1,135

 

                 (14,018)

 

                  44,109

   Other liabilities with private pension plan

 

                         -  

 

                         -  

 

                 (27,196)

 

                 (25,499)

   Regulatory charges

 

                         -  

 

                         -  

 

               (436,406)

 

                 (41,786)

   Tax, civil and labor risks paid

 

                       (27)

 

                     (183)

 

                 (30,811)

 

                 (60,668)

   Sector financial liability

 

                         -  

 

                         -  

 

                 (55,161)

 

                562,875

   Payables - amounts provided by the CDE

 

                         -  

 

                         -  

 

                   (1,356)

 

                   (7,545)

   Other operating liabilities

 

                   (2,199)

 

                 (19,661)

 

                214,578

 

                132,880

Cash flows provided (used) by operations

 

                  59,782

 

                173,280

 

                116,747

 

                881,783

   Interest paid on debts and debentures

 

                   (4,235)

 

                         -  

 

               (327,727)

 

               (457,262)

   Income tax and social contribution paid 

 

                         -  

 

                         -  

 

               (252,090)

 

               (152,233)

Net cash from operating activities

 

                  55,547

 

                173,280

 

               (463,070)

 

                272,288

                 

Investing activities

               

   Purchases of property, plant and equipment

 

                     (198)

 

                         -  

 

                 (56,084)

 

               (294,813)

   Securities, pledges and restricted deposits

 

                         -  

 

                         -  

 

                 (19,819)

 

                 (51,359)

   Purchases of intangible assets

 

                       (23)

 

                         (8)

 

               (369,830)

 

               (347,506)

   Advances for future capital increases

 

                       (40)

 

                 (31,500)

 

                         -  

 

                         -  

   Intragroup loans

 

                127,625

 

                  29,820

 

                         -  

 

                  15,923

   

 

 

 

 

 

 

 

Net cash generated by (used) In investing activities

 

                127,364

 

                   (1,688)

 

               (445,733)

 

               (677,755)

                 

Financing activities

               

   Borrowings and debentures raised

 

                         -  

 

                         -  

 

             2,947,881

 

                801,737

   Repayment of principal of borrowings and debentures

 

               (186,000)

 

                         -  

 

            (2,443,707)

 

            (1,410,704)

   Repayment of derivatives

 

                         -  

 

                         -  

 

                187,568

 

                 (68,761)

   Dividend and interest on capital paid

 

                         (5)

 

               (220,904)

 

                   (3,603)

 

               (224,437)

   Intragroup loans

 

                         -  

 

                         -  

 

                         -  

 

                  22,962

   Business combination payment

 

                         -  

 

                         -  

 

                         -  

 

                   (2,514)

Net cash generated by (used in) financing activities

 

               (186,005)

 

               (220,904)

 

                688,139

 

               (881,717)

Net increase (decrease) in cash and cash equivalents

 

                   (3,094)

 

                 (49,312)

 

               (220,664)

 

            (1,287,184)

Cash and cash equivalents at the beginning of the period

 

                    6,581

 

                  64,973

 

             3,249,642

 

             6,164,997

Cash and cash equivalents at the end of the period

 

                    3,486

 

                  15,661

 

             3,028,978

 

             4,877,813

 

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

35


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

CPFL Energia S.A.

Statements of value added for the periods ended March 31, 2018 and 2017

(in thousand of Brazilian reais - R$)

 

Parent Company

 

Consolidated

 

1st quarter 2018

 

1st quarter 2017

 

1st quarter 2018

 

1st quarter 2017

1 - Revenues

                    221

 

                       8

 

           9,673,757

 

                8,896,526

1.1 Operating revenues

                       0

 

                      -  

 

           9,266,935

 

                8,179,148

1.2 Revenue related to the construction of own assets

                    221

 

                       8

 

               62,681

 

                  348,035

1.3 Revenue from construction of concession infrastructure

                      -  

 

                      -  

 

             370,562

 

                  416,039

1.4 Allowance for doubtful accounts

                      -  

 

                      -  

 

              (26,420)

 

                   (46,696)

               
               

2 - (-) Inputs

                (2,837)

 

                (2,805)

 

          (5,189,577)

 

               (4,679,612)

2.1 Electricity purchased for resale

                      -  

 

                      -  

 

          (4,442,138)

 

               (3,586,020)

2.2 Material

                   (225)

 

                    (36)

 

            (295,106)

 

                 (542,752)

2.3 Outsourced services

                (1,896)

 

                (2,166)

 

            (335,807)

 

                 (360,751)

2.4 Others

                   (715)

 

                   (603)

 

            (116,525)

 

                 (190,089)

               

3 - Gross value added (1+2)

                (2,615)

 

                (2,797)

 

           4,484,181

 

                4,216,914

               

4 - Retentions

                    (48)

 

                    (54)

 

            (391,226)

 

                 (377,397)

4.1 Depreciation and amortization

                    (48)

 

                    (54)

 

            (319,718)

 

                 (305,281)

4.2 Amortization of intangible assets of concession

                      -  

 

                      -  

 

              (71,508)

 

                   (72,116)

               

5 - Net value added generated (3+4)

                (2,664)

 

                (2,850)

 

           4,092,954

 

                3,839,517

               

6 - Value Added received in transfer

             458,417

 

             277,916

 

             294,209

 

                  377,753

6.1 Financial income

                 7,430

 

                 6,069

 

             208,853

 

                  298,044

6.2 Interest in subsidiaries, associates and joint ventures

             450,986

 

             271,847

 

               85,356

 

                    79,709

               
               

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

             455,753

 

             275,066

 

           4,387,164

 

                4,217,270

               

8 - Distribution of value added

             

8.1 Personnel and charges

                 5,543

 

               12,076

 

             336,795

 

                  349,210

8.1.1 Direct remuneration

                 2,524

 

                 8,824

 

             197,685

 

                  217,817

8.1.2 Benefits

                 2,587

 

                 2,485

 

             122,391

 

                  113,770

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

                    432

 

                    767

 

               16,719

 

                    17,624

8.2 Taxes, fees and contributions

                 1,120

 

                (6,069)

 

           3,105,820

 

                2,877,814

8.2.1 Federal

                 1,104

 

                (6,074)

 

           1,674,230

 

                1,404,262

8.2.2 Estate

                     16

 

                       5

 

           1,425,792

 

                1,468,374

8.2.3 Municipal

                      -  

 

                      -  

 

                 5,798

 

                      5,178

8.3 Lenders and lessors

                 5,307

 

               23,173

 

             525,145

 

                  758,125

8.3.1 Interest

                 5,306

 

               22,975

 

             507,082

 

                  738,423

8.3.2 Rental

                       1

 

                    198

 

               18,062

 

                    19,703

8.4 Interest on capital

             443,783

 

             245,886

 

             419,404

 

                  232,121

8.4.1 Retained earnings

             443,783

 

             245,886

 

             419,404

 

                  232,121

               
 

             455,753

 

             275,066

 

           4,387,164

 

                4,217,270

 

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

36


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

CPFL ENERGIA S.A.

NOTES TO THE INTERIM FINANCIAL STATEMENTS

AT MARCH 31, 2018

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

 

( 1 ) OPERATIONS

 

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

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

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

Energy distribution

 

Company type

 

Equity interest

 

Location (state)

 

Number of municipalities

 

Approximate number of consumers (in thousands)

 

Concession period

 

End of the concession

                             

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

 

Publicly-held corporation

 

Direct
100%

 

Interior of São Paulo

 

234

 

4,413

 

30 years

 

 November 2027

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

 

Publicly-held corporation

 

Direct
100%

 

Interior and coast of São Paulo

 

27

 

1,728

 

30 years

 

 October 2028

 Rio Grande Energia S.A. ("RGE")

 

Publicly-held corporation

 

Direct
100%

 

Interior of Rio Grande do Sul

 

255

 

1,491

 

30 years

 

 November 2027

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

 

Publicly-held corporation

 

Indirect
100%

 

Interior of Rio Grande do Sul

 

118

 

1,347

 

30 years

 

 November 2027

  Companhia Jaguari de Energia  ("CPFL Santa Cruz") (e)

 

Privately-held corporation

 

Direct
100%

 

Interior of São Paulo, Paraná and Minas Gerais

 

45

 

449

 

30 years

 

 July 2045

 

                   

Installed power (MW)

Energy generation
(conventional and renewable sources)

 

Company type

 

Equity interest

 

Location (state)

 

Number of plants / type of energy

 

Total

 

CPFL share

                         

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

 

Publicly-held corporation

 

Direct
100%

 

São Paulo and Goiás

 

3 Hydropower (a)

 

1295

 

678

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

 

Privately-held corporation

 

Indirect
65%

 

Rio Grande do Sul

 

3 Hydropower

 

360

 

234

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

 

Privately-held corporation

 

Indirect
51% (d)

 

Santa Catarina and
Rio Grande do Sul

 

1 Hydropower

 

855

 

436

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

 

Privately-held corporation

 

Indirect
48.72%

 

Santa Catarina

 

1 Hydropower

 

880

 

429

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

 

Privately-held corporation

 

Indirect
25.01%

 

Santa Catarina and
Rio Grande do Sul

 

1 Hydropower

 

690

 

173

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

 

Privately-held corporation

 

Indirect
53.34%

 

Paraíba

 

2 Thermal

 

342

 

182

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

 

Privately-held corporation

 

Indirect
59.93% (b)

 

Tocantins

 

1 Hydropower

 

903

 

63

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

 

Publicly-held corporation

 

Indirect
51.60%

 

(c)

 

(c)

 

(c)

 

(c)

CPFL Centrais Geradoras Ltda ("CPFL Centrais Geradoras")

 

Limited liability company

 

Direct
100%

 

São Paulo and Minas Gerais

 

6 SHPs

 

4

 

4

 

Energy commercialization

 

Company type

 

Core activity

 

Equity interest

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

 

Privately-held corporation

 

Energy commercialization

 

Direct
100%

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

 

Limited liability company

 

Commercialization and provision of energy services

 

Indirect
100%

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

 

Privately-held corporation

 

Energy commercialization

 

Indirect
100%

CPFL Planalto Ltda.  ("CPFL Planalto")

 

Limited liability company

 

Energy commercialization

 

Direct
100%

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

 

Privately-held corporation

 

Energy commercialization

 

Indirect
100%

 

37


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Provision of services

 

Company type

 

Core activity

 

Equity interest

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

 

Privately-held corporation

 

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

 

Direct
100%

NECT Serviços Administrativos Ltda ("Nect")

 

Limited liability company

 

Provision of administrative services

 

Direct
100%

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

 

Limited liability company

 

Provision of call center services

 

Direct
100%

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

 

Limited liability company

 

Collection services

 

Direct 
100%

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

 

Privately-held corporation

 

Energy efficiency management

 

Direct
100%

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

 

Limited liability company

 

Provision of IT services

 

Direct
100%

CPFL GD S.A ("CPFL GD")

 

Privately-held corporation

 

Provision of maintenance services for energy generation companies

 

Indirect
100%

             

Others

 

Company type

 

Core activity

 

Equity interest

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

 

Limited liability company

 

Holding company

 

Direct
100%

Chapecoense Geração S.A. ("Chapecoense")

 

Privately-held corporation

 

Holding company

 

Indirect
51%

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

 

Privately-held corporation

 

Holding company

 

Indirect
99.95%

CPFL Telecom S.A ("CPFL Telecom")

 

Privately-held corporation

 

Telecommunication services

 

Direct
100%

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

 

Privately-held corporation

 

Energy transmission services

 

Indirect
100%

CPFL Transmissora Morro Agudo S.A ("CPFL 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 March 31, 2018, CPFL Renováveis had a portfolio of 112 projects of 2,508.6 MW of installed capacity (2,102.8 MW in operation). 

 

·         Hydropower generation: 46 SHP’s (543.4 MW) with 39 SHPs in operation (423.2 MW) and 7 SHPs under development (120.2 MW);

·         Wind power generation: 57 projects (1,594.1 MW) with 45projects in operation (1,308.5MW) and 12projects under construction/development (285.6 MW);

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

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

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

 

e)     As described in note 12.5.2, on December 31, 2017, approval was given for the merger of the subsidiaries Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia and Companhia Luz e Força de Mococa into Companhia Jaguari de Energia, which adopted the trade name “CPFL Santa Cruz”.

 

38


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

 

As at March 31, 2018, the Company recorded in the interim financial statements a negative net working capital of R$ 861,758, which is within the plans to reduce the Company’s debts. In addition, the Company has history of profits and projection of profitability and cash generation, which supports and makes feasible the renegotiation plan for reduction of the Company’s cost of debt.

 

( 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.

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

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, 2017, except for the matters described in note 3, and therefore should be read together.

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

The interim financial statements were authorized for issue by Management and on May 7, 2018.

 

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 and ii) financial instruments measured at fair value through profit or loss. 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:

39


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

·         Note 6 – Consumers, concessionaires and licensees (Allowance for doubtful accounts: key assumptions regarding recoverable amounts);

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

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

·         Note 10 – Concession financial asset (assumptions for fair value measurement, based on significant unobservable inputs);

·         Note 11 – Other receivables (allowance for doubtful accounts: key assumptions regarding recoverable amounts);

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

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

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

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

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

·         Note 32 – Financial instruments (assumptions for fair value measurement, based on significant unobservable inputs).

2.4 Functional currency and presentation currency

The Group’s functional currency is the Brazilian Real, and the individual and consolidated 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.

40


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

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 March 31, 2018 and December 31, 2017 and for the quarters ended March 31, 2018 and 2017 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.

 

( 3 ) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Except for the matters described below, the main interim financial information of the Group was prepared based on the same accounting policies described in explanatory notes 3.1 to 3.18, disclosed in the financial statements for the year ended December 31, 2017.

The Group initially adopted CPC 48 /IFRS 9 Financial Instruments and CPC 47 / IFRS 15 Revenue Recognition, beginning on January 1, 2018, retrospectively. A series of other new standards are effective as of January 1, 2018, however, it has no material effect on the Group’s financial statements.

 

The effect of the initial application of this standard (IFRS 9) is mainly attributed to:

·       When marked to market of financial liabilities recognition of credit risk in other comprehensive income, previously recorded in profit or loss for the period; and

·       an increase in impairment losses (allowance for doubtful accounts) recognized in financial assets.

 

CPC 48 / IFRS 9 establishes requirements to recognize and measure financial assets, financial liabilities and some agreements for purchase or sale of nonfinancial items. This standard replaces CPC 38 / IAS 39 Financial Instruments: Recognition and Measurement.

 

a)   Classification and measurement of Financial Assets and Liabilities

As described in note 3.17 to the financial statements as of December 31, 2017, the Company’s distribution subsidiaries had relevant assets classified as “available for sale”, in accordance with the requirements of IAS 39 / CPC 38. These assets represent the right to indemnity at the end of the concession term of the distribution subsidiaries. These assets started to be classified as measured at fair value through profit or loss according to the new standard and the effects of the subsequent measurement of this asset are recorded in profit or loss for the year, with no material impacts on the Company’s consolidated financial statements.

As described in note 3.18 to the financial statements as of December 31, 2017, IFRS 9 / CPC 48 establishes that financial liabilities designated at fair value through profit or loss with credit risk as a component of their calculation have the effect of the changes in this credit risk recorded in other comprehensive income, instead of directly in profit or loss for the year. The amount recorded in the first quarter of 2018 in comprehensive income, due to this change, was R$16,247.

 

b)   Impairment of financial assets

41


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

CPC 48 / IFRS 9 requires the expected credit loss model, rather than the actual credit loss model mentioned in IAS 39 / CPC 38. The expected credit loss model requires the Company to account for the credit loss expectation and changes to these expectations at each reporting date in order to reflect them since the initial recognition. In other words, it is no longer necessary that the event occurs in order to recognize the credit loss. The effect of the adoption of this pronouncement is an expense supplement of R$73,426 directly recorded in retained earnings (R$48,461 net of tax effects.)

 

CPC 47 / IFRS 15 Revenue recognition

CPC 47 / IFRS 15 establish that revenue most be recognized net of eventual discounts, rebates, refunds, penalties or similar item. The distribution concessionaries are evaluated by service quality rendered to consumers. The quality of the rendered service compromises the evaluation of electricity supply interruptions. When determined index are not complied, the distribution companies are subject of penalties, currently recognized as operational expense.

With CPC 47 / IFRS 15 adoption, it become a revenue deduction, which is a simple reclassification in the profit or loss, with no effect in the Company’ net profit. From January 1st, 2018, the compensation by not complying of technical index is being recognized as operation revenue, in others revenues, until December 31, 2017 was recognized in others operational expenses. In the 1st quarter of 2018, R$ 16,380 was recorded.

Com a adoção do CPC 47/IFRS 15, passam a se tornar uma redutora de receita, representando mera reclassificação entre linhas do resultado, sem efeitos no lucro líquido da Companhia. A partir de 1º de janeiro de 2018, a compensação pelo não cumprimento de indicadores técnicos passou a ser registrada como receita operacional, na rubrica Outras Receitas, sendo que até 31 de dezembro era registrada em Outras Despesas Opercionais. O montante registrado no 1º trimestre de 2018 foi R$ 16.380 (nota 25).

 

( 4 ) FAIR VALUE MEASUREMENT

 

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

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

 

- Property, plant and equipment and intangible assets

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

 

- Financial instruments

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

42


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

credit risk rate.

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 are classified as measured at fair value. 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

 

March 31, 2018

 

December 31, 2017

 

March 31, 2018

 

December 31, 2017

Bank balances

             3,450

 

               508

 

         286,632

 

         365,031

Short-term financial investments

                 36

 

             6,073

 

      2,742,346

 

      2,884,611

Overnight investment (a)

                   9

 

                 42

 

               372

 

         178,444

Bank certificates of deposit (b)

                  -  

 

                  -  

 

      1,007,859

 

         785,074

Repurchase agreements secured on debentures (b)

                  -  

 

                  -  

 

         191,861

 

             3,268

Investment funds (c)

                 27

 

             6,032

 

      1,542,255

 

      1,917,825

Total

             3,486

 

             6,581

 

      3,028,978

 

      3,249,642

               

 

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% of the CDI.

c)   Exclusive Fund investments, with daily liquidity and interest equivalent, on average, to 100% of the CDI, subject to floating rates tied to the CDI linked to federal government bonds, CDBs, financial bills and secured debentures of major financial institutions, with low credit risk and short term maturity.

 

( 6 ) CONSUMERS, CONCESSIONAIRES AND LICENSEES

 

The consolidated balance includes mainly activities from the supply of electric energy, broken down as follows at March 31, 2018 and December 31, 2017:

43


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

   

Consolidated

   

 Amounts

 

 Past due

 

 Total

   

 coming due

 

 until 90 days

 

 > 90 days

 

March 31, 2018

 

December 31, 2017

 Current

                   

 Consumer classes

                   

 Residential

 

         666,656

 

         486,821

 

           64,515

 

      1,217,992

 

      1,113,604

 Industrial

 

         257,905

 

         108,655

 

           77,271

 

         443,831

 

         483,630

 Commercial

 

         269,906

 

           92,883

 

           35,959

 

         398,748

 

         382,470

 Rural

 

           73,376

 

           25,888

 

             6,104

 

         105,368

 

           98,663

 Public administration

 

           69,105

 

           13,383

 

             3,448

 

           85,936

 

           88,910

 Public lighting

 

           49,913

 

             4,836

 

             2,773

 

           57,522

 

           67,533

 Public utilities

 

           78,691

 

           11,122

 

             2,471

 

           92,284

 

         100,843

 Billed

 

      1,465,552

 

         743,588

 

         192,541

 

      2,401,681

 

      2,335,653

 Unbilled

 

      1,117,928

 

                  -  

 

                  -  

 

      1,117,928

 

      1,008,486

 Financing of consumers' debts

 

         168,113

 

           22,909

 

           39,511

 

         230,532

 

         229,840

 CCEE transactions

 

         158,613

 

         246,600

 

           10,241

 

         415,454

 

         413,067

 Concessionaires and licensees

 

         365,752

 

               156

 

           10,460

 

         376,368

 

         516,419

 Others

 

           28,523

 

                  -  

 

                  -  

 

           28,523

 

           36,011

   

      3,304,481

 

      1,013,253

 

         252,753

 

      4,570,486

 

      4,539,476

 Allowance for doubtful accounts

             

        (311,615)

 

        (238,193)

Total

             

      4,258,871

 

      4,301,283

                     

 Noncurrent

                   

 Financing of consumers' debts

 

         219,068

 

                  -  

 

                  -  

 

         219,068

 

         217,944

 Free energy

 

             6,071

 

                  -  

 

                  -  

 

             6,071

 

             5,976

 CCEE transactions

 

           41,301

 

                  -  

 

                  -  

 

           41,301

 

           41,301

   

         266,440

 

                  -  

 

                  -  

 

         266,440

 

         265,221

 Allowance for doubtful accounts

             

          (23,245)

 

          (28,682)

Total

             

         243,195

 

         236,539

                     

 

Allowance for doubtful accounts

The allowance for doubtful debts is set up based on the expected loss, based on the history and future probability of default.

Movements in the allowance for doubtful accounts are shown below:

 

Consumers, concessionaires and licensees

 

Other
receivables
(note 11)

 

Total

As of December 31, 2017

               (266,876)

 

          (29,379)

 

        (296,255)

Allowance - reversal (recognition)

                 (64,037)

 

              (404)

 

          (64,441)

Recovery of revenue

                  38,021

 

                  -  

 

           38,021

Write-off of accrued receivables

                  30,720

 

              (233)

 

           30,487

Effects of first adoption of IFRS 9 / CPC 48

                 (72,688)

 

              (738)

 

          (73,426)

As of March 31, 2018

               (334,860)

 

          (30,755)

 

        (365,615)

           

Current

               (311,615)

 

          (30,755)

 

        (342,370)

Noncurrent

                 (23,245)

 

                  -  

 

          (23,245)

 

44


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

( 7 ) TAXES RECOVERABLE

 

 

Parent company

 

Consolidated

 

March 31, 2018

 

December 31, 2017

 

March 31, 2018

 

December 31, 2017

Current

             

Prepayments of social contribution - CSLL

  -

 

227

 

3,569

 

7,257

Prepayments of income tax - IRPJ

  -

 

1,725

 

8,857

 

21,887

Income tax and social contribution to be offset

16,934

 

15,099

 

94,805

 

59,658

Income tax and social contribution to be offset

16,934

 

17,051

 

107,230

 

88,802

               

Withholding income tax - IRRF on interest on capital

43,467

 

43,467

 

43,467

 

43,841

Withholding income tax - IRRF

3,131

 

2,893

 

101,651

 

103,277

State VAT - ICMS to be offset

  -

 

  -

 

109,905

 

104,843

Social Integration Program - PIS

63

 

56

 

8,068

 

8,447

Contribution for Social Security Funding - COFINS

315

 

283

 

37,935

 

37,699

National Social Security Institute - INSS

  -

 

  -

 

8,874

 

7,597

Others

  -

 

  -

 

514

 

541

Others taxes to be offset

46,976

 

46,699

 

310,415

 

306,244

 

 

 

 

 

 

 

 

Total current

63,910

 

63,750

 

417,645

 

395,046

               

Noncurrent

             

Social contribution to be offset - CSLL

  -

 

  -

 

59,834

 

58,856

Income tax to be offset - IRPJ

  -

 

  -

 

5,451

 

2,608

Income tax and social contribution to be offset

  -

 

  -

 

65,285

 

61,464

               

State VAT - ICMS to be offset

  -

 

  -

 

158,321

 

159,624

Social Integration Program - PIS

  -

 

  -

 

1,038

 

1,024

Contribution for Social Security Funding - COFINS

  -

 

  -

 

4,784

 

4,719

National Social Security Institute - INSS

  -

 

  -

 

1,729

 

  -

Others

  -

 

  -

 

4,407

 

6,613

Others taxes to be offset

  -

 

  -

 

170,279

 

171,980

               

Total noncurrent

  -

 

  -

 

235,564

 

233,444

               

45


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

 

( 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:

 

As of December 31, 2017

 

Operating revenue

 

Finance income or expense

 

Receipt

 

As of March 31, 2018

 

Deferred

 

Approved

 

Total

 

Constitution

 

Through billing

 

Monetary adjustment

 

 Tariff flag
(note 25.4)

 

Deferred

 

Approved

 

Total

Parcel "A"

                                     

CVA (*)

                                     

CDE (**)

(235,901)

 

(263,520)

 

  (499,422)

 

60,892

 

  149,465

 

(6,237)

 

-

 

(178,833)

 

  (116,468)

 

(295,302)

Electric energy cost

  1,625,759

 

  (18,280)

 

1,607,479

 

30,177

 

  131,023

 

  27,498

 

(297,354)

 

  1,423,426

 

  75,398

 

1,498,823

ESS and EER (***)

(974,091)

 

(167,048)

 

(1,141,139)

 

(103,401)

 

160,362

 

(16,049)

 

-

 

(925,358)

 

(174,869)

 

(1,100,226)

Proinfa

  (610)

 

  (17,961)

 

  (18,572)

 

5,527

 

8,146

 

(87)

 

-

 

  4,762

 

(9,747)

 

  (4,985)

Basic network charges

  (20,163)

 

23,387

 

3,224

 

63,821

 

  (12,001)

 

(112)

 

-

 

41,783

 

  13,148

 

54,932

Pass-through from Itaipu

959,518

 

  125,860

 

1,085,378

 

93,076

 

  (36,213)

 

  16,111

 

-

 

  1,053,205

 

105,147

 

1,158,352

Transmission from Itaipu

  7,802

 

7,806

 

15,608

 

11,088

 

  (3,922)

 

  221

 

-

 

19,003

 

  3,990

 

22,994

Neutrality of sector charges

32,566

 

  112,084

 

144,651

 

  (36,802)

 

  (47,520)

 

(112)

 

-

 

  9,090

 

  51,126

 

60,217

Overcontracting

(469,937)

 

  (38,244)

 

  (508,181)

 

614,690

 

  (35,661)

 

  2,453

 

-

 

119,168

 

(45,866)

 

73,301

Other financial components

  (193,496)

 

21,812

 

  (171,685)

 

  (691,251)

 

12,049

 

(21,244)

 

-

 

  (824,984)

 

(47,147)

 

(872,131)

Hydrological risk

-

 

  -

 

  -

 

  (638,645)

 

  992

 

(16,169)

 

-

 

  (618,619)

 

(35,204)

 

(653,823)

Refunds related to judicial injunctions

-

 

  (27,968)

 

  (27,968)

 

4,338

 

19,938

 

-

 

-

 

-

 

(3,692)

 

  (3,692)

Others

  (193,496)

 

49,780

 

  (143,717)

 

  (56,944)

 

  (8,880)

 

(5,075)

 

-

 

  (206,365)

 

(8,251)

 

(214,616)

                                       

Total

731,447

 

(214,104)

 

517,341

 

47,817

 

  325,729

 

  2,441

 

(297,354)

 

741,262

 

  (145,288)

 

  595,975

                                       

Current assets

       

210,834

                         

  570,967

Noncurrent assets

       

355,003

                         

66,841

Current liabilities

       

  (40,111)

                         

  (17,860)

Noncurrent liabilities

       

  (8,385)

                         

  (23,973)

 

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

(**)  Energy Development Account – CDE

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

 

The details of the nature of each sector financial asset and liability are provided in Note 8 to the financial statements at December 31, 2017.

( 9 )DEFERRED TAX ASSETS AND LIABILITIES

9.1  Breakdown of tax assets and liabilities

 

Parent company

 

Consolidated

 

March 31, 2018

 

December 31, 2017

 

March 31, 2018

 

December 31, 2017

 Social contribution credit/(debit)

             

 Tax losses carryforwards

38,874

 

           38,216

 

           93,811

 

         103,903

 Tax benefit of merged intangible

                  -  

 

                  -  

 

         103,121

 

         105,065

 Temporarily nondeductible/taxable differences 

              (513)

 

              (408)

 

        (278,719)

 

        (305,677)

 Subtotal

           38,362

 

           37,808

 

          (81,786)

 

          (96,708)

               

 Income tax credit / (debit)

             

 Tax losses carryforwards

         109,115

 

         109,103

 

         269,957

 

         303,543

 Tax benefit of merged intangible

                  -  

 

                  -  

 

         335,494

 

         342,262

 Temporarily nondeductible/taxable differences 

            (1,424)

 

            (1,132)

 

        (772,311)

 

        (844,948)

 Subtotal

         107,690

 

         107,971

 

        (166,859)

 

        (199,141)

               

PIS and COFINS credit/(debit)

             

 Temporarily nondeductible/taxable differences 

                  -  

 

                  -  

 

          (10,388)

 

          (10,543)

               

 Total

         146,052

 

         145,779

 

        (259,034)

 

        (306,392)

               

 Total tax credit

         146,052

 

         145,779

 

         977,462

 

         943,199

 Total tax debit

                  -  

 

                  -  

 

     (1,236,496)

 

     (1,249,591)

46


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

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, 2017, 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 Interim 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

 

March 31, 2018

 

December 31, 2017

Social contribution

 

Income tax

 

Social contribution

 

Income tax

CPFL Paulista

44,715

 

124,209

 

45,872

 

127,421

CPFL Piratininga

10,956

 

37,602

 

11,215

 

38,491

RGE

20,984

 

86,658

 

21,513

 

88,843

RGE Sul

26,466

 

73,515

 

26,466

 

73,515

CPFL Geração

  -

 

13,509

 

  -

 

13,992

Total

103,121

 

335,494

 

105,065

 

342,262

 

9.3    Accumulated balances on nondeductible temporary / taxable differences

 

Consolidated

 

March 31, 2018

 

December 31, 2017

 

Social contribution

 

Income tax

 

PIS/COFINS

 

Social contribution

 

Income tax

 

PIS/COFINS

Temporarily nondeductible/taxable differences

                     

Provision for tax, civil and labor risks

56,296

 

156,378

 

  -

 

53,687

 

149,130

 

  -

Private pension fund

2,474

 

6,872

 

  -

 

2,331

 

6,476

 

  -

Allowance for doubtful accounts

33,597

 

93,326

 

  -

 

27,354

 

75,985

 

  -

Free energy supply

8,812

 

24,479

 

  -

 

8,382

 

23,284

 

  -

Research and development and energy efficiency programs

23,535

 

65,374

 

  -

 

21,851

 

60,697

 

  -

Personnel-related provisions

6,566

 

18,238

 

  -

 

4,111

 

11,420

 

  -

Depreciation rate difference

  (15,061)

 

  (41,834)

 

  -

 

  (13,970)

 

  (38,806)

 

  -

Derivatives

  (32,621)

 

  (90,614)

 

  -

 

  (48,848)

 

  (135,690)

 

  -

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

  (7,074)

 

  (19,651)

 

  -

 

  (7,291)

 

  (20,253)

 

  -

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

  (123,354)

 

  (340,583)

 

  (7,848)

 

  (117,527)

 

  (324,387)

 

  (7,881)

Actuarial losses  (IFRS/CPC)

25,774

 

71,592

 

  -

 

25,716

 

71,432

 

  -

Financial instruments (IFRS/CPC)

245

 

682

 

  -

 

  (5,291)

 

  (14,694)

 

  -

Accelerated depreciation

  (112)

 

  (312)

 

  -

 

  (104)

 

  (288)

 

  -

Others

  (2,034)

 

  (5,807)

 

  (2,540)

 

2,956

 

10,292

 

  (2,662)

Temporarily nondeductible differences - accumulated comprehensive income:

                     

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

  (51,150)

 

  (142,084)

 

  -

 

  (51,961)

 

  (144,336)

 

  -

Actuarial losses  (IFRS/CPC)

36,607

 

101,687

 

  -

 

36,607

 

101,687

 

  -

Temporarily nondeductible differences - business combination - CPFL Renováveis

                     

Deferred taxes - asset:

                     
 

12,829

 

35,637

     

13,188

 

36,635

 

  -

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

20,925

 

58,124

 

  -

 

21,294

 

59,150

 

  -

Deferred taxes - liability:

           

  -

 

  -

   

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

  (25,778)

 

  (71,604)

     

  (26,201)

 

  (72,779)

 

  -

Intangible asset - exploration right/authorization in indirect subsidiaries acquired

  (243,602)

 

  (676,672)

 

  -

 

  (246,669)

 

  (685,190)

 

  -

Other temporary differences

  (5,594)

 

  (15,539)

 

  -

 

  (5,292)

 

  (14,713)

 

  -

Total

  (278,719)

 

  (772,311)

 

  (10,388)

 

  (305,677)

 

  (844,948)

 

  (10,543)

                       

 

47


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

9.4    Reconciliation of the income tax and social contribution amounts recognized in the statements of profit or loss for the quarters ended by March 31, 2018 and 2017:

 

Parent company

 

1st quarter 2018

 

1st quarter 2017

 

Social contribution

 

Income tax

 

Social contribution

 

Income tax

Profit before taxes

         443,515

 

         443,515

 

         237,339

 

         237,339

Adjustments to reflect effective rate:

             

Equity in subsidiaries

        (450,986)

 

        (450,986)

 

        (271,847)

 

        (271,847)

Amortization of intangible asset acquired

            (3,382)

 

                  -  

 

            (3,382)

 

                  -  

Other permanent additions (exclusions), net

             4,722

 

             8,608

 

             3,222

 

           12,802

Tax base

            (6,131)

 

             1,137

 

          (34,668)

 

          (21,706)

Statutory rate

9%

 

25%

 

9%

 

25%

Tax credit/(debit)

               552

 

              (284)

 

             3,120

 

             5,426

Recorded (unrecognized) Tax credit, net

                  -  

 

                  -  

 

                  -  

 

                  -  

Total

               552

 

              (284)

 

             3,120

 

             5,426

               

Current

                  (1)

 

                  (4)

 

                  -  

 

                  -  

Deferred

               553

 

              (280)

 

             3,120

 

             5,426

               
 

Consolidated

 

1st quarter 2018

 

1st quarter 2017

 

Social contribution

 

Income tax

 

Social contribution

 

Income tax

Profit before taxes

         668,428

 

         668,428

 

         383,043

 

         383,043

Reconciliation to reflect effective rate:

             

Equity in subsidiaries

          (85,356)

 

          (85,356)

 

          (79,709)

 

          (79,709)

Amortization of intangible asset acquired

           12,162

 

           15,689

 

           12,162

 

           15,689

Effect of presumed profit system

          (42,625)

 

          (57,638)

 

          (48,719)

 

          (63,623)

Adjustment of revenue from excess demand and excess reactive power

           38,520

 

           38,520

 

           30,250

 

           30,250

Tax incentive - operating profit

                  -  

 

                  -  

 

                  -  

 

            (6,501)

Other permanent additions (exclusions), net

           26,160

 

           25,129

 

             4,023

 

           13,395

Tax base

         617,289

 

         604,772

 

         301,050

 

         292,544

Statutory rate

9%

 

25%

 

9%

 

25%

Tax credit/(debit)

          (55,556)

 

        (151,193)

 

          (27,095)

 

          (73,136)

Recorded (unrecognized) Tax credit, net

          (11,312)

 

          (30,963)

 

          (13,481)

 

          (37,212)

Total

          (66,868)

 

        (182,156)

 

          (40,575)

 

        (110,347)

               

Current

          (73,091)

 

        (192,367)

 

          (55,497)

 

        (147,023)

Deferred

             6,223

 

           10,211

 

           14,922

 

           36,676

 

48


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

( 10 )     CONCESSION FINANCIAL ASSET

 

 

 Distribution

 

 Transmission

 

 Consolidated

As of December 31, 2017

      6,330,681

 

         238,723

 

      6,569,404

 Current

                  -  

 

           23,736

 

           23,736

 Noncurrent

      6,330,681

 

         214,987

 

      6,545,668

           

Additions

         191,186

 

               172

 

         191,359

Fair value adjustment

           66,637

 

                  -  

 

           66,637

Adjustment - financial asset measured at amortized cost

                  -  

 

             7,591

 

             7,591

Cash inputs - RAP

                  -  

 

            (5,573)

 

            (5,573)

Disposals

          (10,849)

 

                  -  

 

          (10,849)

           

As of March 31, 2018

      6,577,655

 

         240,914

 

      6,818,568

 Current

                  -  

 

           24,017

 

           24,017

 Noncurrent

      6,577,655

 

         216,897

 

      6,794,551

 

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

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 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 (R$66,637 at 1st quarter of 2018 and R$ 48,923 at 1st quarter of 2017).

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$ 7,591 is recognized against other operating revenues and income (R$ 6,060 at 1st quarter of 2017).

49


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

( 11 )   OTHER RECEIVABLES

 

 

Consolidated

 

Current

 

Noncurrent

 

March 31, 2018

 

December 31, 2017

 

March 31, 2018

 

December 31, 2017

Advances - Fundação CESP

             8,105

 

             7,851

 

             6,797

 

             6,797

Advances to suppliers

           34,996

 

           31,981

 

                  -  

 

                  -  

Pledges, funds and restricted deposits

         150,847

 

         159,291

 

         659,434

 

         621,489

Orders in progress

         151,787

 

         167,197

 

             5,612

 

             5,062

Services rendered to third parties

           10,629

 

             8,530

 

                  -  

 

                  -  

Energy pre-purchase agreements

                  -  

 

                  -  

 

           27,073

 

           26,260

Collection agreements

               423

 

               661

 

                  -  

 

                  -  

Prepaid expenses

           86,509

 

           80,599

 

           19,720

 

           20,042

GSF renegotiation

           12,312

 

           19,629

 

           14,465

 

           17,359

Receivables - CDE

         205,688

 

         242,906

 

                  -  

 

                  -  

Advances to employees

           35,070

 

           19,658

 

                  -  

 

                  -  

Leases

                  -  

 

                  -  

 

                  -  

 

                  -  

Others

         239,450

 

         191,573

 

         128,510

 

         143,183

(-) Allowance for doubtful debts (note 6)

          (30,755)

 

          (29,379)

 

                  -  

 

                  -  

Total

         905,061

 

         900,498

 

         861,611

 

         840,192

 

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 – CDE: refer to: (i) low-income subsidies amounting to  R$ 14,537 (R$ 15,930 at December 31, 2017), (ii) other tariff discounts granted to consumers amounting to R$ 191,057 (R$ 224,936 at December 31, 2017), and (iii) tariff discounts – court injunctions amounting to R$ 95 (R$ 2,039 at December 31, 2017).

At the 1st quarter of 2018, the subsidiaries offset the receivables relating to the CDE account with the payables relating to the Energy Development Account (CDE) (note 19) amounting to R$ 2,213 authorized by Order No. 1,576/2016.

 

( 12 )   INVESTMENTS

 

 

Parent company

 

Consolidated

 

March 31, 2018

 

December 31, 2017

 

March 31, 2018

 

December 31, 2017

Permanent equity interests - equity method

             

By equity method of the subsidiary

  8,205,536

 

  7,804,431

 

  1,054,908

 

990,910

Fair value of assets, net

697,221

 

713,848

 

10,495

 

10,640

Advances for future capital increases

33,380

 

33,340

 

  -

 

  -

Goodwill

6,054

 

6,054

 

  -

 

  -

Total

  8,942,192

 

  8,557,673

 

  1,065,403

 

  1,001,550

 

12.1   Permanent equity interests – equity method

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

50


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

       

March 31, 2018

 

March 31, 2018

 

December 31, 2017

 

1st quarter 2018

 

1st quarter 2017

Investment

 

Number of shares (thousand)

 

Total assets

 

Issued capital

 

Equity

 

Profit or loss for the year

 

Share of equity of investees

 

Share of profit (loss) of investees

CPFL Paulista

 

880,653

 

  8,529,030

 

923,423

 

  1,487,518

 

141,046

 

  1,487,518

 

  1,370,403

 

141,046

 

52,268

CPFL Piratininga

 

53,096,770

 

  3,373,392

 

240,144

 

501,125

 

56,108

 

501,125

 

461,059

 

56,108

 

31,363

CPFL Santa Cruz

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

9,321

CPFL Leste Paulista

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

2,561

CPFL Sul Paulista

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

2,207

CPFL Jaguari

 

359,058

 

  1,142,358

 

170,396

 

358,802

 

20,249

 

358,802

 

340,463

 

20,249

 

  (392)

CPFL Mococa

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

1,965

RGE

 

  1,019,790

 

  4,402,604

 

  1,223,350

 

  1,722,629

 

48,671

 

  1,722,629

 

  1,680,334

 

48,671

 

39,555

RGE Sul

 

527,266

 

  4,442,078

 

  1,495,084

 

  1,760,361

 

54,480

 

  1,263,830

 

  1,228,317

 

42,630

 

  -

CPFL Geração

 

205,492,020

 

  6,243,202

 

  1,043,922

 

  2,480,398

 

131,120

 

  2,480,398

 

  2,354,115

 

131,120

 

94,672

CPFL Jaguari Geração (*)

 

40,108

 

52,820

 

40,108

 

52,704

 

1,734

 

52,704

 

  50,970

 

1,734

 

1,176

CPFL Brasil

 

3,000

 

  1,199,359

 

3,000

 

101,291

 

11,492

 

101,291

 

  96,093

 

11,492

 

17,970

CPFL Planalto (*)

 

630

 

5,238

 

630

 

4,163

 

870

 

4,163

 

  3,293

 

870

 

856

CPFL Serviços

 

  1,577,706

 

232,143

 

117,968

 

100,571

 

  (4,535)

 

100,571

 

105,105

 

  (4,535)

 

  (5,049)

CPFL Atende (*)

 

13,991

 

28,397

 

13,991

 

20,690

 

1,352

 

20,690

 

  19,338

 

1,352

 

1,839

Nect (*)

 

2,059

 

35,945

 

2,059

 

20,630

 

5,116

 

20,630

 

  15,515

 

5,116

 

3,034

CPFL Total (*)

 

9,005

 

29,027

 

9,005

 

26,341

 

5,717

 

26,341

 

  20,624

 

5,717

 

4,829

CPFL Jaguariuna (*)

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

-

 

  -

 

29,071

CPFL Telecom

 

86,420

 

2,314

 

86,420

 

1,897

 

  (160)

 

1,897

 

  2,018

 

  (161)

 

  (6,092)

CPFL Centrais Geradoras (*)

 

16,128

 

17,956

 

16,128

 

17,063

 

885

 

17,063

 

  16,177

 

885

 

295

CPFL Eficiência

 

48,164

 

97,420

 

48,164

 

54,027

 

  (1,225)

 

54,027

 

  55,252

 

  (1,225)

 

1,426

Authi (*)

 

10

 

39,315

 

10

 

25,237

 

6,543

 

25,237

 

  18,694

 

6,543

 

4,651

Subtotal - by subsidiary's equity

                     

  8,238,916

 

  7,837,770

 

467,612

 

287,526

Amortization of fair value adjustment of assets

                     

  -

 

-

 

  (16,627)

 

  (15,678)

Total

                     

  8,238,916

 

  7,837,770

 

450,986

 

271,847

                                     

Investment

                     

  8,205,536

 

  7,804,431

       

Advances for future capital increases

                     

33,380

 

  33,340

       

 

(*) 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$ 16,627 (R$ 15,678 in the 1st quarter of 2017) is classified in line item “share of profit (loss) of investees”, in conformity with ICPC 09 (R2).

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

Investment

 

As of December 31, 2017

 

Share of profit (loss) of investees

 

Share of profit (loss) of investees (OCI)

 

Effects of the first adoption of IFRS 9 / CPC 48

 

Advances for future capital increases / Others

 

As of March 31, 2018

CPFL Paulista

 

1,370,403

 

  141,046

 

  (5,478)

 

(18,453)

 

-

 

1,487,518

CPFL Piratininga

 

  461,059

 

  56,108

 

  (4,045)

 

(11,996)

 

-

 

  501,125

Companhia Jaguari de Energia (CPFL Santa Cruz)

 

  340,463

 

  20,249

 

(355)

 

  (1,556)

 

-

 

  358,802

RGE

 

1,680,334

 

  48,671

 

  772

 

  (7,148)

 

-

 

1,722,629

RGE Sul

 

1,228,317

 

  42,630

 

  4

 

  (7,121)

 

-

 

1,263,830

CPFL Geração

 

2,354,115

 

  131,120

 

  (4,842)

 

  -

 

  5

 

2,480,398

CPFL Jaguari Geração

 

  50,970

 

1,734

 

  -

 

  -

 

-

 

 52,704

CPFL Brasil

 

  96,093

 

  11,492

 

  (4,108)

 

  (2,187)

 

-

 

  101,291

CPFL Planalto

 

3,293

 

  870

 

  -

 

  -

 

-

 

4,163

CPFL Serviços

 

  105,105

 

  (4,535)

 

  -

 

  -

 

-

 

  100,571

CPFL Atende

 

  19,338

 

1,352

 

  -

 

  -

 

-

 

  20,690

Nect

 

  15,515

 

5,116

 

  -

 

  -

 

-

 

  20,630

CPFL Total

 

  20,624

 

5,717

 

  -

 

  -

 

-

 

  26,341

CPFL Telecom

 

2,018

 

(161)

 

  -

 

  -

 

  40

 

1,897

CPFL Centrais Geradoras

 

  16,177

 

  885

 

  -

 

  -

 

-

 

  17,063

CPFL Eficiência

 

  55,252

 

  (1,225)

 

  -

 

  -

 

-

 

  54,027

Authi

 

  18,694

 

6,543

 

  -

 

  -

 

-

 

  25,237

   

7,837,770

 

  467,612

 

(18,051)

 

(48,461)

 

  45

 

8,238,916

                         

 

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

51


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

Investments in joint ventures

 

March 31, 2018

 

December 31, 2017

 

1st quarter 2018

 

1st quarter 2017

 

 Share of equity

 

Share of profit (loss)

                 

Baesa

 

190,703

 

187,654

 

3,049

 

1,282

Enercan

 

204,396

 

176,998

 

27,398

 

34,151

Chapecoense

 

416,659

 

385,870

 

30,789

 

25,388

EPASA

 

243,149

 

240,388

 

24,264

 

19,032

Fair value adjustments of assets, net

 

10,495

 

10,640

 

(145)

 

(145)

   

1,065,403

 

  1,001,550

 

85,356

 

79,709

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 statement, these amounts are classified as Intangible Assets (note 14).

 

12.3   Dividends and interest on capital receivable

At March 31, 2018 and December 31, 2017, the Company has the following amounts receivable from the subsidiaries below, relating to dividends and interest on capital:

 

Parent company

 

Dividends

 

Interest on capital

 

Total

Subsidiary

March 31, 2018

 

December 31, 2017

 

March 31, 2018

 

December 31, 2017

 

March 31, 2018

 

December 31, 2017

CPFL Paulista

  49,798

 

  49,798

 

-

 

-

 

  49,798

 

  49,798

CPFL Santa Cruz

-

 

  24,918

 

-

 

  13,960

 

-

 

  38,878

RGE

  26,795

 

  50,319

 

-

 

-

 

  26,795

 

  50,319

CPFL Centrais Geradoras

17

 

17

 

-

 

-

 

17

 

17

CPFL Brasil

  20,748

 

  20,748

 

-

 

  2,361

 

  20,748

 

  23,109

CPFL Planalto

888

 

888

 

-

 

-

 

888

 

888

CPFL Atende

  1,003

 

  1,003

 

-

 

620

 

  1,003

 

  1,623

Nect

  4,348

 

  4,348

 

-

 

-

 

  4,348

 

  4,348

CPFL Eficiência

  12,195

 

  12,195

 

  17,404

 

  17,404

 

  29,599

 

  29,599

AUTHI

  6,228

 

  6,228

 

-

 

-

 

  6,228

 

  6,228

                       
 

122,020

 

170,461

 

  17,404

 

  34,344

 

139,424

 

204,807

 

The consolidated balance includes dividends and interest on capital receivable amounting to R$ 56,145 at March 31, 2018 and December 31, 2017 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

As of December 31, 2017

 

86,031

 

  2,058,079

 

80,707

 

  2,224,816

Equity Interests and voting capital

 

35.00%

 

48.40%

 

40.07%

   
                 

Profit (loss) attributable to noncontrolling shareholders

 

8,385

 

  (34,112)

 

1,348

 

  (24,379)

Other movements

 

  -

 

  (5)

 

  (14)

 

  (18)

As of March 31, 2018

 

94,416

 

  2,023,962

 

82,041

 

  2,200,419

Equity Interests and voting capital

 

35.00%

 

48.40%

 

40.07%

   

 

52


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

 

12.4.2   Summarized financial information on subsidiaries that have noncontrolling interests

The summarized financial information on subsidiaries that have noncontrolling interests at March 31, 2018 and December 31, 2017 and quarters ended at March 31, 2018 and 2017, is as follows:

   

March 31, 2018

 

December 31, 2017

   

CERAN

 

CPFL Renováveis

 

Paulista Lajeado

 

CERAN

 

CPFL Renováveis

 

Paulista Lajeado

Current assets

 

126,593

 

  1,509,604

 

23,752

 

110,566

 

  1,623,645

 

48,037

Cash and cash equivalents

 

87,671

 

906,667

 

565

 

37,043

 

950,215

 

24,086

Noncurrent assets

 

835,477

 

11,153,503

 

120,098

 

848,445

 

11,232,357

 

120,677

                         

Current liabilities

 

176,212

 

  1,843,004

 

14,629

 

198,624

 

  1,957,000

 

42,525

Borrowings and debentures

 

114,935

 

  1,113,757

 

  -

 

105,844

 

  1,259,105

 

36,453

Other financial liabilities

 

18,710

 

81,138

 

1,929

 

12,360

 

7,258

 

264

Noncurrent liabilities

 

516,097

 

  6,753,646

 

263

 

514,583

 

  6,760,025

 

258

Borrowings and debentures

 

422,229

 

  5,264,158

 

  -

 

422,166

 

  5,251,704

 

  -

Other financial liabilities

 

84,847

 

  -

 

  -

 

83,766

 

  -

 

  -

Equity

 

269,761

 

  4,066,457

 

128,958

 

245,804

 

  4,138,977

 

125,931

  Equity attributable to owners of the Company

 

269,761

 

  3,958,017

 

128,958

 

245,804

 

  4,032,448

 

125,931

  Equity attributable to noncontrolling interests

 

  -

 

108,440

 

  -

 

  -

 

106,529

 

  -

                         
   

1st quarter 2018

 

1st quarter 2017

   

CERAN

 

CPFL Renováveis

 

Paulista Lajeado

 

CERAN

 

CPFL Renováveis

 

Paulista Lajeado

Net operating revenue

 

76,889

 

383,553

 

12,953

 

74,883

 

370,933

 

9,522

Operational costs and expenses

 

  (17,160)

 

  (155,767)

 

  (8,972)

 

  (14,833)

 

  (134,463)

 

  (5,841)

Depreciation and amortization

 

  (11,370)

 

  (157,687)

 

  (1)

 

  (11,153)

 

  (150,833)

 

  (1)

Interest income

 

1,094

 

23,685

 

351

 

8,881

 

36,385

 

736

Interest expense

 

  (9,091)

 

  (118,777)

 

  (348)

 

  (7,977)

 

  (150,878)

 

  (353)

Income tax expense

 

  (12,333)

 

  (13,406)

 

  (669)

 

  (16,160)

 

  (12,146)

 

  (614)

Profit (loss) for the period

 

23,957

 

  (72,521)

 

3,363

 

31,386

 

  (54,664)

 

2,115

 Attributable to owners of the Company

 

23,957

 

  (74,431)

 

3,363

 

31,386

 

  (56,325)

 

2,115

  Attributable to noncontrolling interests

 

  -

 

1,911

 

  -

 

  -

 

1,662

 

  -

 

12.4.3   Joint ventures

The summarized financial information on joint ventures at at March 31, 2018 and December 31, 2017 and quarters ended at March 31, 2018 and 2017, is as follows:

   

March 31, 2018

 

December 31, 2017

   

Enercan

 

Baesa

 

Chapecoense

 

Epasa

 

Enercan

 

Baesa

 

Chapecoense

 

Epasa

Current assets

 

187,328

 

85,069

 

326,348

 

273,917

 

182,843

 

124,361

 

329,721

 

319,222

Cash and cash equivalents

 

69,943

 

48,522

 

46,441

 

50,601

 

48,695

 

17,873

 

116,425

 

74,741

Noncurrent assets

 

1,086,155

 

1,038,733

 

2,707,950

 

532,935

 

1,101,291

 

1,030,904

 

2,745,989

 

531,527

                                 

Current liabilities

 

221,834

 

72,851

 

352,546

 

116,804

 

291,010

 

121,369

 

426,695

 

157,343

Borrowings and debentures

 

129,242

 

41,125

 

138,911

 

34,480

 

140,090

 

63,154

 

  138,788

 

34,299

Other financial liabilities

 

15,170

 

38,806

 

  83,390

 

30,765

 

4,085

 

17,113

 

  67,897

 

993

Noncurrent liabilities

 

632,143

 

288,317

 

  1,864,773

 

234,231

 

629,850

 

283,456

 

1,892,407

 

242,765

Borrowings and debentures

 

510,995

 

  -

 

  1,140,716

 

177,796

 

510,874

 

  -

 

1,172,181

 

186,373

Other financial liabilities

 

25,463

 

269,456

 

721,012

 

11,530

 

25,115

 

265,250

 

  716,986

 

  -

Equity

 

419,506

 

762,634

 

816,979

 

455,817

 

363,273

 

750,440

 

  756,608

 

450,641

                                 
   

1st quarter 2018

 

1st quarter 2017

   

Enercan

 

Baesa

 

Chapecoense

 

Epasa

 

Enercan

 

Baesa

 

Chapecoense

 

Epasa

Net operating revenue

 

140,605

 

62,178

 

208,391

 

174,961

 

143,373

 

53,089

 

203,703

 

166,659

Operational costs and expenses

 

(30,767)

 

(19,329)

 

(47,422)

 

(108,488)

 

(28,865)

 

(24,077)

 

(45,205)

 

(110,083)

Depreciation and amortization

 

(13,017)

 

(12,722)

 

(30,339)

 

(8,760)

 

(13,355)

 

(12,661)

 

(31,710)

 

(8,148)

Interest income

 

968

 

1,021

 

3,493

 

1,402

 

11,857

 

1,560

 

7,769

 

2,599

Interest expense

 

(11,102)

 

(1,977)

 

(26,848)

 

(4,526)

 

(6,971)

 

(3,883)

 

(29,340)

 

(5,029)

Income tax and social contribution expenses

 

(28,961)

 

(6,127)

 

(31,130)

 

(9,235)

 

(36,101)

 

(2,635)

 

(31,195)

 

(7,968)

Profit (loss) for the year

 

56,233

 

12,193

 

60,371

 

45,487

 

70,092

 

5,128

 

49,781

 

35,678

Equity Interests and voting capital

 

48.72%

 

25.01%

 

51.00%

 

53.34%

 

48.72%

 

25.01%

 

51.00%

 

53.34%

 

 

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

53


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

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

 

12.4.4    Joint operation

Through its wholly-owned subsidiary CPFL Geração, the Company holds part of the assets of the Serra da Mesa hydropower plant, located on the Tocantins River, in Goias State. The concession and the right to operate the hydropower plant are held by Furnas Centrais Elétricas S.A. In order to maintain these assets operating jointly with Furnas (jointly operation), CPFL Geração was assured 51.54% of the installed power of 1,275 MW (657 MW) and the assured energy of mean 671 MW (mean 345.4 MW) until 2028.

 

12.5   Corporate restructurings in 2017

12.5.1    Merger of CPFL Jaguariúna

At the EGM held on December 15, 2017, approval was given for the merger of CPFL Jaguariúna  into RGE Sul. Accordingly, the merged company was wound up and RGE Sul became the successor to its assets, rights and obligations.

At the time of the merger, the concepts of CVM Instructions No. 319/99 and 349/01 were applied, which resulted in the recognition of a goodwill rectifying account, generating a tax credit of R$ 99,981 (note 9). To reassess its investments, the Company and CPFL Brasil recognized, proportionally to its investments in RGE Sul, (i) a reassessed concession intangible asset of R$ 148,487 and R$ 45,594 respectively, totaling R$ 194,081, corresponding to the fair value adjustment (value added) of the intangible assets relating to the distribution infrastructure and the right to operate the concession; and (ii) a net adjustment corresponding to the surplus value and decrease in  value in the amounts of R$ 66,607 and R$ 20,452, respectively, corresponding  to the fair value of the provision for tax, civil and labor risks, decrease in value of consumers, and surplus value of indemnification asset. Both amounts are non-deductible for tax purposes for the Company and for CPFL Brasil.

12.5.2      Grouping of subsidiaries Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia and Companhia Luz e Força de Mococa

On November 21, 2017, ANEEL through Resolution No. 6,723/2017 authorized the grouping of the power distribution companies Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia and Companhia Luz e Força de Mococa, pursuant to Normative Resolution No, 716/2016 of May 3, 2016. Effective as of January 1, 2018, the operations of these subsidiaries are controlled only by Companhia Jaguari de Energia, which adopted the trade name “CPFL Santa Cruz”. This operation was approved by the Extraordinary General Meetings (“EGM”) held on December 31, 2017 at the grouped companies.

54


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

( 13 )      PROPERTY, PLANT AND EQUIPMENT

 

 

 Consolidated

 

Land

 

Reservoirs, dams and  water mains

 

Buildings, construction and improvements

 

Machinery and equipment

 

Vehicles

 

Furniture and fittings

 

In progress

 

Total

As of December 31, 2017

  168,494

 

  1,319,257

 

1,094,777

 

6,870,389

 

  75,771

 

  7,245

 

  251,192

 

9,787,125

Historical cost

  207,365

 

  2,066,850

 

1,652,178

 

9,693,512

 

  122,540

 

  22,026

 

  251,192

 

14,015,662

Accumulated depreciation

  (38,870)

 

  (747,593)

 

(557,400)

 

  (2,823,123)

 

(46,769)

 

(14,782)

 

  -

 

  (4,228,537)

                               

Additions

  -

 

-

 

  -

 

  -

 

  -

 

-

 

  58,526

 

  58,526

Disposals

  -

 

-

 

  (9,824)

 

  (2,044)

 

  (1,240)

 

-

 

  -

 

(13,107)

Transfers

  -

 

356

 

1,567

 

2,437

 

5,578

 

  56

 

  (9,992)

 

  -

Transfers from/to other assets - cost

  -

 

-

 

  -

 

1,844

 

  -

 

-

 

  (4,725)

 

  (2,881)

Depreciation

  (2,026)

 

(19,821)

 

(16,273)

 

  (109,490)

 

  (4,426)

 

(221)

 

  -

 

(152,256)

Write-off of depreciation

  -

 

-

 

  -

 

46

 

  424

 

-

 

  -

 

  470

Impairment reversal

  -

 

-

 

  15

 

  645

 

  -

 

-

 

  -

 

  660

                               

As of March 31, 2018

  166,469

 

  1,299,791

 

1,070,262

 

6,763,827

 

  76,107

 

  7,079

 

  295,002

 

9,678,537

Historical cost

  207,365

 

  2,067,205

 

1,644,392

 

9,710,202

 

  126,855

 

  22,081

 

  295,002

 

14,073,103

Accumulated depreciation

  (40,896)

 

  (767,414)

 

(574,130)

 

  (2,946,375)

 

(50,748)

 

(15,002)

 

  -

 

  (4,394,566)

                               

Average depreciation rate

3.86%

 

3.93%

 

4.04%

 

4.60%

 

13.30%

 

6.68%

       

 

55


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

The balance of construction in progress, in the consolidated balances, refers mainly to works in progress of operating and/or under development subsidiaries, especially for the projects of CPFL Renováveis, which has construction in progress of R$ 245,005 at March 31, 2018 (R$ 197,305 at December 31, 2017).

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 1st quarter of 2018 R$ 2,442 were capitalized at the rate of 8.37% p.a. (R$ 19,503, at the rate of 11.18% p.a., in the 1st quarter of 2017) 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 27).

 

( 14 )   INTANGIBLE ASSETS

 

 

Consolidated

 

Goodwill

 

Concession right

 

Other intangible assets

 

Total

   

Acquired in business combinations

 

Distribution infrastructure - operational

 

Distribution infrastructure - in progress

 

Public utilities

   

As of December 31, 2017

6,115

 

4,117,105

 

5,554,447

 

825,476

 

25,904

 

60,777

 

10,589,824

Historical cost

6,152

 

7,558,645

 

11,442,528

 

825,476

 

35,840

 

174,407

 

20,043,048

Accumulated amortization

(37)

 

  (3,441,540)

 

  (5,888,080)

 

  -

 

  (9,936)

 

  (113,630)

 

(9,453,223)

                           

Additions

  -

 

  -

 

  -

 

370,587

 

  -

 

3,516

 

374,103

Amortization

  -

 

  (71,508)

 

  (164,846)

 

  -

 

(355)

 

  (2,040)

 

  (238,749)

Transfer - intangible assets

  -

 

  -

 

161,910

 

  (161,910)

 

  -

 

  -

 

  -

Transfer - financial asset

  -

 

  -

 

  (28,616)

 

  (162,570)

 

  -

 

  -

 

  (191,186)

Disposal and transfer - other assets

  -

 

  -

 

3,136

 

5,310

 

  -

 

4,735

 

13,181

Impairment reversal

  -

 

5,130

 

  -

 

  -

 

  -

 

47

 

5,177

                           

As of March 31, 2018

6,115

 

4,050,726

 

5,526,032

 

876,894

 

25,549

 

67,033

 

10,552,350

Historical cost

6,152

 

7,558,645

 

11,508,477

 

876,894

 

35,840

 

182,805

 

20,168,813

Accumulated amortization

(37)

 

  (3,507,919)

 

  (5,982,444)

 

  -

 

  (10,291)

 

  (115,771)

 

(9,616,462)

 

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 1st quarter of 2018, R$ 3,767 were capitalized at a rate of 7.84% p.a. (R$ 4,654 at a rate of 8.33% p.a. in the 1st quarter of 2017).

In the consolidated interim financial statements the amortization of intangible assets is recognized in the statement of profit or loss in the following line items: (i) “depreciation and amortization” for amortization of distribution infrastructure intangible assets, use of public asset and other intangible assets; and (ii) “amortization of concession intangible asset” for amortization of the intangible asset acquired in business combination (note 27).

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


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

March 31, 2018

 

December 31, 2017

 

Annual amortization rate

 

Historic cost

 

Accumulated amortization

 

Net value

 

Net value

 

2018

 

2017

Intangible asset - acquired in business combinations

                     

Intangible asset acquired, not merged

                     

Parent company

                     

CPFL Paulista

  304,861

 

(209,499)

 

  95,362

 

  97,858

 

3.28%

 

3.28%

CPFL Piratininga

  39,065

 

(25,364)

 

  13,701

 

  14,024

 

3.31%

 

3.31%

RGE

  3,150

 

(1,860)

 

  1,290

 

  1,323

 

4.24%

 

4.24%

CPFL Geração

  54,555

 

(35,950)

 

  18,605

 

  19,066

 

3.38%

 

3.38%

CPFL Jaguari Geração

  7,896

 

(3,919)

 

  3,977

 

  4,044

 

3.41%

 

3.41%

 

  409,527

 

(276,592)

 

  132,935

 

  136,317

       

Subsidiaries

                     

CPFL Renováveis

  3,717,093

 

(932,838)

 

  2,784,255

 

  2,818,331

 

3.67%

 

4.16%

RGE

618

 

  (200)

 

418

 

429

 

7.06%

 

7.06%

 

  3,717,711

 

(933,038)

 

  2,784,673

 

  2,818,760

       
                       

Subtotal

  4,127,239

 

(1,209,629)

 

  2,917,608

 

  2,955,077

       
                       

Intangible asset acquired and merged

                     

Subsidiaries

                     

RGE

  1,120,266

 

(891,875)

 

  228,391

 

  234,298

 

2.11%

 

2.11%

RGE Sul

  312,741

 

(40,295)

 

 272,446

 

  279,553

 

9.09%

 

9.09%

CPFL Geração

  426,450

 

(325,955)

 

  100,495

 

  102,986

 

2.34%

 

2.34%

                       

Subtotal

  1,859,457

 

(1,258,125)

 

  601,332

 

  616,837

       
                       

Intangible asset acquired and merged – Reassessed

                     

Parent company

                     

CPFL Paulista

  1,074,026

 

(762,717)

 

  311,310

 

  319,361

 

3.00%

 

3.00%

CPFL Piratininga

  115,762

 

(75,161)

 

  40,600

 

  41,559

 

3.31%

 

3.31%

RGE

  310,128

 

(187,514)

 

  122,614

 

  125,785

 

4.09%

 

4.09%

CPFL Jaguari Geração

  15,275

 

(8,492)

 

  6,783

 

  6,898

 

3.01%

 

3.01%

Subtotal

  1,515,191

 

(1,033,884)

 

  481,307

 

  493,603

       

Subsidiaries

                     

RGE Sul

  56,759

 

(6,279)

 

  50,480

 

  51,588

 

7.81%

 

9.09%

                       

Total

  7,558,645

 

(3,507,919)

 

  4,050,726

 

  4,117,105

       
                       

 

( 15 )   TRADE PAYABLES

 

 

Consolidated

 

March 31, 2018

 

December 31, 2017

Current

     

System service charges

49,609

 

413

Energy purchased

  1,752,440

 

  2,248,748

Electricity network usage charges

273,263

 

252,170

Materials and services

305,527

 

650,538

Free energy

147,308

 

145,002

Total

  2,528,146

 

  3,296,870

       

Noncurrent

     

Energy purchased

130,333

 

128,438

 

57


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

( 16 )   BORROWINGS

 

   

Consolidated

   

December 31, 2017

 

Raised

 

Repayment

 

Interest, inflation adjustment and MTM

 

Exchange rates

 

Interest paid

 

March 31, 2018

   

Current

 

 

 

Total

           

Current

Noncurrent

 

Total

   

Interest

 

Principal

 

Principal

             

Interest

 

Principal

 

Principal

 

Measured at cost

                                                   

Local currency

                                                   

Investment

 

15,564

 

647,250

 

3,882,601

 

4,545,415

 

162,312

 

(167,191)

 

84,867

 

-

 

(75,337)

 

16,088

 

643,485

 

3,890,493

 

4,550,066

Rental assets

 

13

 

  1,180

 

  2,800

 

  3,993

 

-

 

  (295)

 

76

 

-

 

  (73)

 

12

 

  1,182

 

  2,507

 

  3,701

Financial Institutions

 

79,015

 

472,928

 

989,335

 

1,541,278

 

22,365

 

(61,333)

 

33,674

 

-

 

  (37,313)

 

74,809

 

1,063,089

 

360,773

 

1,498,671

Others

 

32

 

46,125

 

28,584

 

74,741

 

-

 

  (32,052)

 

  885

 

-

 

  (354)

 

29

 

18,224

 

24,967

 

43,220

Total at cost

 

94,624

 

1,167,484

 

4,903,320

 

6,165,427

 

184,677

 

 (260,871)

 

119,502

 

-

 

(113,077)

 

90,938

 

1,725,980

 

4,278,741

 

6,095,659

                                                     

Measured at fair value

                                                   

Foreign currency

                                                   

Financial Institutions

 

21,034

 

2,322,261

 

2,573,703

 

4,916,997

 

158,592

 

(1,072,343)

 

34,651

 

25,746

 

 (38,579)

 

16,047

 

1,731,587

 

2,277,430

 

4,025,064

Mark to market

 

-

 

  (11,375)

 

  (47,177)

 

  (58,552)

 

-

 

-

 

68,935

 

-

 

-

 

-

 

  1,694

 

  8,689

 

10,383

Total at fair value

 

21,034

 

2,310,885

 

2,526,526

 

4,858,445

 

158,592

 

(1,072,343)

 

103,586

 

25,746

 

(38,579)

 

16,047

 

1,733,281

 

2,286,119

 

4,035,447

                                                     

Borrowing costs *

 

-

 

(4,420)

 

(27,396)

(31,816)

 

(2,982)

 

-

 

1,919

 

-

 

-

 

-

 

(4,211)

 

(28,668)

 

(32,879)

                                                     

Total

 

115,658

 

3,473,949

 

7,402,450

 

10,992,057

 

340,287

 

(1,333,214)

 

225,007

 

25,746

 

(151,656)

 

106,985

 

3,455,050

 

6,536,192

 

10,098,227

                                                     


58


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

   

Consolidated

           
   

March 31, 2018

 

December 31, 2017

 

Annual interest

 

Amortization

 

Collateral

Measured at cost

                   

Local currency

                   

Investment

                   

CPFL Paulista

                   

FINEM V

 

  -

 

2,883

 

TJLP + 2.12% to 3.3% (c)

 

72 monthly installments from February 2012

 

SGBP and CPFL Energia guarantee and receivables

FINEM V

 

1,455

 

1,892

 

Fixed rate 8% (c)

 

90 monthly installments from August 2011

 

SGBP and CPFL Energia guarantee and receivables

FINEM V

 

  21,396

 

  23,283

 

Fixed rate 5.5% (b)

 

96 monthly installments from February 2013

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

  88,592

 

  101,068

 

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

 

72 monthly installments from January 2014

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

7,025

 

7,401

 

Fixed rate 2.5% (a)

 

114 monthly installments from June 2013

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

  128,882

 

  135,787

 

Fixed rate 2.5% (a)

 

96 monthly installments from December 2014

 

SGBP and CPFL Energia guarantee and receivables

FINEM VII

 

  28,428

 

  29,612

 

Fixed rate 6% (b)

 

96 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINEM VII

 

  31,250

 

  32,687

 

SELIC + 2.62% to 2.66% (h)

 

72 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINEM VII

 

  51,158

 

  54,259

 

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

 

72 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINAME

 

  14,791

 

  16,904

 

Fixed rate 4.5%

 

96 monthly installments from January 2012

 

CPFL Energia guarantee

CPFL Piratininga

                   

FINEM IV

 

  -

 

1,553

 

TJLP + 2.12% to 3.3% (c)

 

72 monthly installments from February 2012

 

SGBP and CPFL Energia guarantee and receivables

FINEM IV

 

  469

 

  610

 

Fixed rate 8% (c)

 

90 monthly installments from August 2011

 

SGBP and CPFL Energia guarantee and receivables

FINEM IV

 

  11,126

 

  12,108

 

Fixed rate 5.5% (b)

 

96 monthly installments from February 2013

 

SGBP and CPFL Energia guarantee and receivables

FINEM V

 

  25,893

 

  29,540

 

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

 

72 monthly installments from January 2014

 

SGBP and CPFL Energia guarantee and receivables

FINEM V

 

1,845

 

1,944

 

Fixed rate 2.5% (a)

 

114 monthly installments from June 2013

 

SGBP and CPFL Energia guarantee and receivables

FINEM V

 

  32,073

 

  33,791

 

Fixed rate 2.5% (a)

 

96 monthly installments from December 2014

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

  35,423

 

  37,052

 

SELIC + 2.62% to 2.66% (h)

 

72 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

  50,747

 

  53,823

 

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

 

72 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

  23,336

 

  24,308

 

Fixed rate 6% (b)

 

96 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINAME

 

7,014

 

8,016

 

Fixed rate 4.5%

 

96 monthly installments from January 2012

 

CPFL Energia guarantee

RGE SUL

                   

FINEP

 

4,235

 

4,481

 

TJLP

 

73 monthly installments from May 2016

 

Bank guarantee

FINEP

 

4,919

 

5,487

 

Fixed rate 5%

 

81 monthly installments from September 2013

 

Bank guarantee

RGE

                   

FINEM V

 

  -

 

1,745

 

TJLP + 2.12% to 3.3% (c)

 

72 monthly installments from February 2012

 

SGBP and CPFL Energia guarantee and receivables

FINEM V

 

8,207

 

8,932

 

Fixed rate 5.5% (b)

 

96 monthly installments from February 2013

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

  47,329

 

  53,994

 

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

 

72 monthly installments from January 2014

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

  743

 

  783

 

Fixed rate 2.5% (a)

 

114 monthly installments from June 2013

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

  47,391

 

  49,930

 

Fixed rate 2.5% (a)

 

96 monthly installments from December 2014

 

SGBP and CPFL Energia guarantee and receivables

FINEM VII

 

  32,641

 

  34,001

 

Fixed rate 6% (b)

 

96 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINEM VII

 

  55,543

 

  58,097

 

SELIC + 2.62% to 2.66% (h)

 

72 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINEM VII

 

  62,795

 

  66,601

 

TJLP + 2.12% to 2.66% (d)

 

72 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINAME

 

3,520

 

4,022

 

Fixed rate 4.5%

 

96 monthly installments from January 2012

 

CPFL Energia guarantee

FINAME

 

  94

 

  109

 

Fixed rate 10.0%

 

90 monthly installments from May 2012

 

Liens on assets

FINAME

 

  409

 

  443

 

Fixed rate 10.0%

 

66 monthly installments from October 2015

 

Liens on assets

Companhia Jaguari de Energia (CPFL Santa Cruz)

               

Santander - Bank credit note

 

  -

 

3,514

 

TJLP + 2.99% (f)

 

96 monthly installments from October 2015

 

CPFL Energia guarantee

Santander - Bank credit note

 

  -

 

1,215

 

UMBNDES +1.99%

 

96 monthly installments from October 2015

 

CPFL Energia guarantee

Santander - Bank credit note

 

5,975

 

2,759

 

TJLP + 3.1%

 

96 monthly installments from June 2014

 

CPFL Energia guarantee

Santander - Bank credit note

 

2,199

 

1,077

 

UMBNDES + 1.99% to 2.1%

 

96 monthly installments from June 2014

 

CPFL Energia guarantee

FINEM

 

  14,438

 

  15,016

 

Fixed rate 6%

 

111 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

6,024

 

6,424

 

SELIC + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINAME

 

  -

 

  12

 

Selic + 3.63%

 

36 monthly installments from December 2018

 

CPFL Energia guarantee

FINAME

 

  12

 

  -

 

Selic + 3.63%

 

36 parcelas mensais a partir de mai de 2019

 

CPFL Energia guarantee

FINEM

 

9,813

 

  10,612

 

TJLP + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINAME

 

6,008

 

6,204

 

TJLP + 3.29%

 

36 monthly installments from December 2018

 

CPFL Energia guarantee

FINAME

 

  206

 

  206

 

TJLP + 3.39%

 

96 monthly installments from May 2019

 

CPFL Energia guarantee

CPFL Serviços

                   

FINAME

 

1,033

 

1,086

 

Fixed rate 2.5% to 5.5%

 

96 monthly installments from August 2014

 

CPFL Energia guarantee and liens on equipment

FINAME

 

  239

 

  253

 

Fixed rate 6%

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and liens on equipment

FINAME

 

  422

 

  472

 

Fixed rate 7.7% to 10%

 

90 monthly installments from December 2012

 

CPFL Energia guarantee and liens on equipment

FINAME

 

9,095

 

9,534

 

Fixed rate 2.5% to 5.5%

 

114 monthly installments from February 2013

 

CPFL Energia guarantee and liens on equipment

FINAME

 

  30

 

  33

 

TJLP + 4.2%

 

90 monthly installments from November 2012

 

CPFL Energia guarantee and liens on equipment

FINAME

 

1,736

 

1,839

 

Fixed rate 6%

 

90 monthly installments from October 2014

 

CPFL Energia guarantee and liens on equipment

FINAME

 

  84

 

  88

 

Fixed rate 6%

 

96 monthly installments from July 2016

 

CPFL Energia guarantee and liens on equipment

FINAME

 

4,857

 

5,039

 

Fixed rate 6%

 

114 monthly installments from June 2015

 

CPFL Energia guarantee and liens on equipment

FINAME

 

  450

 

  514

 

TJLP + 2.2% to 3.2% (c)

 

56 monthly installments from July 2015

 

CPFL Energia guarantee and liens on equipment

FINAME

 

2,857

 

3,060

 

Fixed rate 9.5% to 10% (c)

 

66 monthly installments from October 2015

 

CPFL Energia guarantee and liens on equipment

FINAME

 

1,198

 

1,276

 

Fixed rate 6% to 10% (c)

 

66 monthly installments from August 2016

 

CPFL Energia guarantee and liens on equipment

FINAME

 

4,858

 

5,216

 

TJLP + 3.50%

 

48 monthly installments from June 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

1,133

 

1,201

 

SELIC + 3.90%

 

48 monthly installments from June 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

1,183

 

1,251

 

SELIC + 3.86%

 

48 monthly installments from August 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

1,264

 

1,262

 

TJLP + 3.40%

 

36 monthly installments from August 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

  598

 

  588

 

SELIC + 3.74%

 

36 monthly installments from August 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

2,654

 

2,613

 

SELIC + 3.58% to 3.72%

 

36 monthly installments from January 2019

 

CPFL Energia guarantee and liens on equipment

FINAME

 

8,920

 

8,906

 

TJLP + 3.25% to 3.38%

 

36 monthly installments from January 2019

 

CPFL Energia guarantee and liens on equipment

FINAME

 

  388

 

  -

 

 TJLP + 3.30%

 

96 Parcelas mensais a partir de Outubro de 2019

 

CPFL Energia guarantee and liens on equipment

CPFL  Piracicaba

                   

FINAME

 

  13,626

 

  14,275

 

Fixed rate 3.0%

 

96 monthly installments from July 2015

 

CPFL Energia guarantee

CPFL Renováveis

                   

FINEM I

 

  224,523

 

  232,310

 

TJLP + 1.95%

 

168 monthly installments from October 2009 and July 2011

 

Pledge of the subdidiary's and PCH Holding's shares; assignment of credit and concession rights ; and liens on equipment

FINEM II

 

  18,108

 

  18,951

 

TJLP + 1.90%

 

144 monthly installments from June 2011

 

CPFL Energia and CPFL Bioenergia guarantees, liens on assets and assignment of credit rights

FINEM III

 

  451,262

 

  460,623

 

TJLP + 1.72%

 

192  monthly installments from May 2013

 

SGBP and CPFL Energia guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit rights

FINEM V

 

  66,669

 

  69,485

 

TJLP + 2.8% to 3.4%

 

143 monthly installments from December 2011

 

CPFL Renováveis guarantee; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM VI

 

  68,259

 

  69,619

 

TJLP + 2.05%

 

173 to 192 monthly installments from October 2013 and April 2015

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; and assignment of credit and concession rights

FINEM VII

 

  114,252

 

  119,234

 

TJLP + 1.92 %

 

156 monthly installments from October 2010 to September 2023

 

Pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM IX

 

  15,945

 

  17,827

 

TJLP + 2.15%

 

120 monthly installments from May 2010

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; liens on assets; assignment of credit and concession rights and real estate mortgage

 

59


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

FINEM XI

 

  92,230

 

  95,016

 

TJLP + 1.87% to 1.9%

 

108 to 168 monthly installments from January 2012 and January 2013

 

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

FINEM XII

 

  292,397

 

  297,835

 

TJLP and TJLP + 2.18%

 

192 monthly installments from July 2014

 

SGBP, CPFL Energia, CPFL Renováveis and Eólica Holding guarantees; pledge of the subsidiary's and Eólica Holding's shares; liens on assets; assignment of credit and concession rights

FINEM XIII

 

  293,145

 

  298,439

 

TJLP + 2.02% to 2.18%

 

192 monthly installments from November 2014

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of the subsidiary's shares; liens on assets; assignment of credit and concession rights

FINEM XV

 

  22,118

 

  23,185

 

TJLP + 3.44%

 

139 monthly installments from  September 2011

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of the subsidiary's shares; and assignment of credit and concession rights

FINEM XVI

 

3,816

 

4,335

 

Fixed rate 5.50%

 

101 monthly installments from  September 2011

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of the subsidiary's shares; and assignment of credit and concession rights

FINEM XVII

 

  419,467

 

  428,205

 

TJLP and TJLP + 2.18%

 

192 monthly installments from  January 2013

 

Bank guarantee; pledge of the subsidiary's and DESA Eólica's shares; liens on assets; and assignment of credit and concession rights

FINEM XVIII

 

7,864

 

9,044

 

Fixed rate 4.5%

 

102 monthly installments from June 2011

 

CPFL Energia and Bioenergia guarantees; liens on assets; and assignment of credit rights

FINEM XIX

 

  27,053

 

  27,579

 

TJLP + 2.02%

 

192 monthly installments from January 2014

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM XX

 

  35,348

 

  37,208

 

Fixed rate 2.5%

 

108 monthly installments from January 2014

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM XXI

 

  36,866

 

  37,583

 

TJLP + 2.02%

 

192 monthly installments from January 2014

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM XXII

 

  31,098

 

  32,734

 

Fixed rate 2.5%

 

108 monthly installments from January 2014

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM XXIII

 

1,009

 

1,153

 

Fixed rate 4.5%

 

102 monthly installments from June 2011

 

Pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM XXIV

 

  75,895

 

  82,632

 

Fixed rate 5.5%

 

102 to 108 monthly installments from January 2012 to August 2020

 

SGBP and CPFL Energia guarantees; liens on assets; and assignment of credit rights

FINEM XXV

 

  81,848

 

  83,136

 

TJLP + 2.18%

 

192 monthly installments from July 2016 to June 2032

 

SGBP and CPFL Energia guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM XXVI

 

  672,104

 

  681,912

 

TJLP and TJLP + 2.75%

 

192 monthly installments from July 2017 to June 2033

 

SGBP and CPFL Energia guarantees; pledge of subsidiary's and T-16's shares; liens on assets; and assignment of credit and concession rights

FINEM XXVII

 

  66,332

 

  67,584

 

TJLP and TJLP + 2,02%

 

162 monthly installments from November 2016 to April 2030

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; and assignment of credit and concession rights

FINEM XXVIII

 

1,391

 

1,415

 

TJLP

 

144 monthly installments from January 2018

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINAME I

 

2,270

 

2,387

 

Fixed rate 2.5%

 

96 monthly installments from February 2015

 

CPFL Renováveis guarantee; and liens on assets

FINEP I

 

  781

 

  904

 

Fixed rate 3.5%

 

61 monthly installments from October 2014

 

Bank guarantee

FINEP II

 

9,433

 

9,516

 

TJLP - 1%

 

85 monthly installments from June 2017

 

Bank guarantee

FINEP III

 

3,805

 

4,091

 

Fixed rate 8%

 

73 monthly installments from July 2015

 

Bank guarantee

BNB I

 

  90,738

 

  92,926

 

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

 

168 monthly installments from January 2009 to 2028

 

SIIF Énergies do Brasil guarantee; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

BNB II

 

  149,665

 

  151,428

 

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

 

222 monthly installments from May 2010 to October 2029

 

BVP S.A. and bank guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

BNB III

 

  26,659

 

  27,138

 

Fixed rate 9.5% and compliance bonus of 25%

 

228 monthly installments from July 2009 to July 2028

 

CPFL Renováveis guarantee; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

BNB IV

 

  161,928

 

  -

 

Fixed rate 10.14% and compliance bonus of 15%

 

228 monthly installments from December 2018 to November 2037 to July 2028

 

Bank guarantee

NIB

 

  55,757

 

  57,291

 

IGPM + 8.63%

 

Interest and principal quartely from June 2011 to September 2023

 

Pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

                     

Rental assets

                   

CPFL Eficiência

                   

FINAME

 

2,121

 

2,281

 

Fixed rate 4.5% to 8.7%

 

96 monthly installments from March 2012

 

CPFL Energia guarantee

FINAME

 

  77

 

  81

 

Fixed rate 6%

 

72 monthly installments from October 2016

 

CPFL Energia guarantee

FINAME

 

  154

 

  171

 

TJLP + 2.70%

 

48 monthly installments from August 2016

 

CPFL Energia guarantee

FINAME

 

  159

 

  174

 

SELIC + 2.70%

 

48 monthly installments from August 2016

 

CPFL Energia guarantee

FINAME

 

  90

 

  100

 

Fixed rate 9.5%

 

36 monthly installments from September 2017

 

CPFL Energia guarantee

FINAME

 

  473

 

  515

 

Fixed rate 9.5%

 

48 monthly installments from February 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

  626

 

  672

 

TJLP + 3.50%

 

48 monthly installments from August 2017

 

CPFL Energia guarantee and liens on equipment

Financial institutions

                   

CPFL Santa Cruz

                   

Banco do Brasil - Working capital

 

  97,278

 

  95,682

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

Banco IBM - Working capital

 

  44,393

 

  35,895

 

 CDI + 0.27%  to 1.33%(f) 

 

12 semiannual installments from June 2015

 

CPFL Energia guarantee

Banco IBM - Working capital

 

  -

 

5,180

 

CDI + 1.33% (f)

 

8 semiannual installments from January 2016

 

CPFL Energia guarantee

Banco IBM - Working capital

 

  -

 

5,652

 

CDI + 1.27%

 

8 semiannual installments from February 2017

 

CPFL Energia guarantee

Banco IBM - Working capital

 

  13,013

 

  13,111

 

100.0% of CDI

 

14 semiannual installments from December 2012

 

CPFL Energia guarantee

Banco IBM - Working capital

 

  25,859

 

  25,443

 

CDI + 0.1%

 

12 semiannual installments from October 2014

 

CPFL Energia guarantee

RGE Sul

                   

Banco IBM - Capital de giro

 

7,369

 

  -

 

 CDI - 1.25%

 

Parcela única em dezembro de 2020

 

CPFL Energia guarantee

CPFL Serviços

                   

Banco IBM - Working capital

 

1,299

 

1,279

 

CDI + 0.10%

 

11 semiannual installments from June 2013

 

CPFL Energia guarantee

Promissory notes

 

  47,717

 

  46,941

 

104.0% of CDI

 

1 installment in June 2018

 

CPFL Energia guarantee

CPFL Geração

                   

Banco do Brasil - Working capital

 

  618,186

 

  630,309

 

109.5% of CDI (3)

 

1 installment in March 2019

 

CPFL Energia guarantee

CPFL Renováveis

                   

Bradesco

 

  208,444

 

  204,934

 

CDI + 0.5%

 

8 annual installment from June 2013

 

No guarantee

Safra

 

  182,871

 

  194,006

 

105% of CDI

 

7 annual installments from January 2017 and May 2017

 

No guarantee

Banco BBM - Bank credit note

 

  -

 

  44,095

 

CDI + 3.40%

 

1 installment in March 2018

 

No guarantee

Banco BBM - Bank credit note

 

  43,046

 

  26,198

 

CDI + 1.90%

 

Interest semiannual and princial bullet

 

CPFL Renováveis guarantee

Deustche Bank - Bank credit note

 

  47,861

 

  46,966

 

CDI + 1.45%

 

Interest semiannual and princial bullet

 

CPFL Renováveis promissory note

Banco ABC - Promissory notes

 

  96,524

 

  102,006

 

CDI + 3.80%

 

4 semiannual installments from February 2017

 

No guarantee

Banco BBM - Promissory notes

 

  64,810

 

  63,582

 

CDI + 1.39%

 

1 installment in June 2018

 

CPFL Renováveis guarantee

                     

Others

                   

Eletrobrás

                   

CPFL Paulista

 

2,273

 

2,410

 

RGR + 6% to 6.5%

 

120 monthly installments from January 2013

 

Receivables and promissory notes

RGE

 

3,522

 

3,988

 

RGR + 6%

 

120 monthly installments from May 2008

 

Receivables and promissory notes

RGE SUL

 

  17,250

 

  18,970

 

RGR + 6%

 

120 monthly installments from December 2008

 

Bank guarantee; assignment of credit rights; and promissory notes

Others

 

  20,175

 

  49,373

           

Subtotal local currency

 

6,095,659

 

6,165,427

           

60


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 
   

Consolidated

           
   

March 31, 2018

 

December 31, 2017

 

Annual interest

 

Amortization

 

Collateral

Measured at cost

                   

Local currency

                   

Investment

                   

CPFL Paulista

                   

FINEM V

 

                  -  

 

             2,883

 

TJLP + 2.12% to 3.3% (c)

 

72 monthly installments from February 2012

 

SGBP and CPFL Energia guarantee and receivables

FINEM V

 

             1,455

 

             1,892

 

Fixed rate 8% (c)

 

90 monthly installments from August 2011

 

SGBP and CPFL Energia guarantee and receivables

FINEM V

 

            21,396

 

            23,283

 

Fixed rate 5.5% (b)

 

96 monthly installments from February 2013

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

            88,592

 

          101,068

 

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

 

72 monthly installments from January 2014

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

             7,025

 

             7,401

 

Fixed rate 2.5% (a)

 

114 monthly installments from June 2013

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

          128,882

 

          135,787

 

Fixed rate 2.5% (a)

 

96 monthly installments from December 2014

 

SGBP and CPFL Energia guarantee and receivables

FINEM VII

 

            28,428

 

            29,612

 

Fixed rate 6% (b)

 

96 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINEM VII

 

            31,250

 

            32,687

 

SELIC + 2.62% to 2.66% (h)

 

72 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINEM VII

 

            51,158

 

            54,259

 

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

 

72 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINAME

 

            14,791

 

            16,904

 

Fixed rate 4.5%

 

96 monthly installments from January 2012

 

CPFL Energia guarantee

CPFL Piratininga

                   

FINEM IV

 

                  -  

 

             1,553

 

TJLP + 2.12% to 3.3% (c)

 

72 monthly installments from February 2012

 

SGBP and CPFL Energia guarantee and receivables

FINEM IV

 

                469

 

                610

 

Fixed rate 8% (c)

 

90 monthly installments from August 2011

 

SGBP and CPFL Energia guarantee and receivables

FINEM IV

 

            11,126

 

            12,108

 

Fixed rate 5.5% (b)

 

96 monthly installments from February 2013

 

SGBP and CPFL Energia guarantee and receivables

FINEM V

 

            25,893

 

            29,540

 

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

 

72 monthly installments from January 2014

 

SGBP and CPFL Energia guarantee and receivables

FINEM V

 

             1,845

 

             1,944

 

Fixed rate 2.5% (a)

 

114 monthly installments from June 2013

 

SGBP and CPFL Energia guarantee and receivables

FINEM V

 

            32,073

 

            33,791

 

Fixed rate 2.5% (a)

 

96 monthly installments from December 2014

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

            35,423

 

            37,052

 

SELIC + 2.62% to 2.66% (h)

 

72 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

            50,747

 

            53,823

 

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

 

72 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

            23,336

 

            24,308

 

Fixed rate 6% (b)

 

96 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINAME

 

             7,014

 

             8,016

 

Fixed rate 4.5%

 

96 monthly installments from January 2012

 

CPFL Energia guarantee

RGE SUL

                   

FINEP

 

             4,235

 

             4,481

 

TJLP

 

73 monthly installments from May 2016

 

Bank guarantee

FINEP

 

             4,919

 

             5,487

 

Fixed rate 5%

 

81 monthly installments from September 2013

 

Bank guarantee

RGE

                   

FINEM V

 

                  -  

 

             1,745

 

TJLP + 2.12% to 3.3% (c)

 

72 monthly installments from February 2012

 

SGBP and CPFL Energia guarantee and receivables

FINEM V

 

             8,207

 

             8,932

 

Fixed rate 5.5% (b)

 

96 monthly installments from February 2013

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

            47,329

 

            53,994

 

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

 

72 monthly installments from January 2014

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

                743

 

                783

 

Fixed rate 2.5% (a)

 

114 monthly installments from June 2013

 

SGBP and CPFL Energia guarantee and receivables

FINEM VI

 

            47,391

 

            49,930

 

Fixed rate 2.5% (a)

 

96 monthly installments from December 2014

 

SGBP and CPFL Energia guarantee and receivables

FINEM VII

 

            32,641

 

            34,001

 

Fixed rate 6% (b)

 

96 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINEM VII

 

            55,543

 

            58,097

 

SELIC + 2.62% to 2.66% (h)

 

72 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINEM VII

 

            62,795

 

            66,601

 

TJLP + 2.12% to 2.66% (d)

 

72 monthly installments from April 2016

 

SGBP and CPFL Energia guarantee and receivables

FINAME

 

             3,520

 

             4,022

 

Fixed rate 4.5%

 

96 monthly installments from January 2012

 

CPFL Energia guarantee

FINAME

 

                  94

 

                109

 

Fixed rate 10.0%

 

90 monthly installments from May 2012

 

Liens on assets

FINAME

 

                409

 

                443

 

Fixed rate 10.0%

 

66 monthly installments from October 2015

 

Liens on assets

Companhia Jaguari de Energia (CPFL Santa Cruz)

               

Santander - Bank credit note

 

                  -  

 

             3,514

 

TJLP + 2.99% (f)

 

96 monthly installments from October 2015

 

CPFL Energia guarantee

Santander - Bank credit note

 

                  -  

 

             1,215

 

UMBNDES +1.99%

 

96 monthly installments from October 2015

 

CPFL Energia guarantee

Santander - Bank credit note

 

             5,975

 

             2,759

 

TJLP + 3.1%

 

96 monthly installments from June 2014

 

CPFL Energia guarantee

Santander - Bank credit note

 

             2,199

 

             1,077

 

UMBNDES + 1.99% to 2.1%

 

96 monthly installments from June 2014

 

CPFL Energia guarantee

FINEM

 

            14,438

 

            15,016

 

Fixed rate 6%

 

111 monthly installments from April 2015

 

CPFL Energia guarantee

FINEM

 

             6,024

 

             6,424

 

SELIC + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINAME

 

                  -  

 

                  12

 

Selic + 3.63%

 

36 monthly installments from December 2018

 

CPFL Energia guarantee

FINAME

 

                  12

 

                  -  

 

Selic + 3.63%

 

36 parcelas mensais a partir de mai de 2019

 

CPFL Energia guarantee

FINEM

 

             9,813

 

            10,612

 

TJLP + 2.19%

 

72 monthly installments from April 2015

 

CPFL Energia guarantee

FINAME

 

             6,008

 

             6,204

 

TJLP + 3.29%

 

36 monthly installments from December 2018

 

CPFL Energia guarantee

FINAME

 

                206

 

                206

 

TJLP + 3.39%

 

96 monthly installments from May 2019

 

CPFL Energia guarantee

CPFL Serviços

                   

FINAME

 

             1,033

 

             1,086

 

Fixed rate 2.5% to 5.5%

 

96 monthly installments from August 2014

 

CPFL Energia guarantee and liens on equipment

FINAME

 

                239

 

                253

 

Fixed rate 6%

 

72 monthly installments from April 2016

 

CPFL Energia guarantee and liens on equipment

FINAME

 

                422

 

                472

 

Fixed rate 7.7% to 10%

 

90 monthly installments from December 2012

 

CPFL Energia guarantee and liens on equipment

FINAME

 

             9,095

 

             9,534

 

Fixed rate 2.5% to 5.5%

 

114 monthly installments from February 2013

 

CPFL Energia guarantee and liens on equipment

FINAME

 

                  30

 

                  33

 

TJLP + 4.2%

 

90 monthly installments from November 2012

 

CPFL Energia guarantee and liens on equipment

FINAME

 

             1,736

 

             1,839

 

Fixed rate 6%

 

90 monthly installments from October 2014

 

CPFL Energia guarantee and liens on equipment

FINAME

 

                  84

 

                  88

 

Fixed rate 6%

 

96 monthly installments from July 2016

 

CPFL Energia guarantee and liens on equipment

FINAME

 

             4,857

 

             5,039

 

Fixed rate 6%

 

114 monthly installments from June 2015

 

CPFL Energia guarantee and liens on equipment

FINAME

 

                450

 

                514

 

TJLP + 2.2% to 3.2% (c)

 

56 monthly installments from July 2015

 

CPFL Energia guarantee and liens on equipment

FINAME

 

             2,857

 

             3,060

 

Fixed rate 9.5% to 10% (c)

 

66 monthly installments from October 2015

 

CPFL Energia guarantee and liens on equipment

FINAME

 

             1,198

 

             1,276

 

Fixed rate 6% to 10% (c)

 

66 monthly installments from August 2016

 

CPFL Energia guarantee and liens on equipment

FINAME

 

             4,858

 

             5,216

 

TJLP + 3.50%

 

48 monthly installments from June 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

             1,133

 

             1,201

 

SELIC + 3.90%

 

48 monthly installments from June 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

             1,183

 

             1,251

 

SELIC + 3.86%

 

48 monthly installments from August 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

             1,264

 

             1,262

 

TJLP + 3.40%

 

36 monthly installments from August 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

                598

 

                588

 

SELIC + 3.74%

 

36 monthly installments from August 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

             2,654

 

             2,613

 

SELIC + 3.58% to 3.72%

 

36 monthly installments from January 2019

 

CPFL Energia guarantee and liens on equipment

FINAME

 

             8,920

 

             8,906

 

TJLP + 3.25% to 3.38%

 

36 monthly installments from January 2019

 

CPFL Energia guarantee and liens on equipment

FINAME

 

                388

 

                  -  

 

 TJLP + 3.30%

 

96 Parcelas mensais a partir de Outubro de 2019

 

CPFL Energia guarantee and liens on equipment

CPFL  Piracicaba

                   

FINAME

 

            13,626

 

            14,275

 

Fixed rate 3.0%

 

96 monthly installments from July 2015

 

CPFL Energia guarantee

CPFL Renováveis

                   

FINEM I

 

          224,523

 

          232,310

 

TJLP + 1.95%

 

168 monthly installments from October 2009 and July 2011

 

Pledge of the subdidiary's and PCH Holding's shares; assignment of credit and concession rights ; and liens on equipment

FINEM II

 

            18,108

 

            18,951

 

TJLP + 1.90%

 

144 monthly installments from June 2011

 

CPFL Energia and CPFL Bioenergia guarantees, liens on assets and assignment of credit rights

FINEM III

 

          451,262

 

          460,623

 

TJLP + 1.72%

 

192  monthly installments from May 2013

 

SGBP and CPFL Energia guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit rights

FINEM V

 

            66,669

 

            69,485

 

TJLP + 2.8% to 3.4%

 

143 monthly installments from December 2011

 

CPFL Renováveis guarantee; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM VI

 

            68,259

 

            69,619

 

TJLP + 2.05%

 

173 to 192 monthly installments from October 2013 and April 2015

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; and assignment of credit and concession rights

FINEM VII

 

          114,252

 

          119,234

 

TJLP + 1.92 %

 

156 monthly installments from October 2010 to September 2023

 

Pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM IX

 

            15,945

 

            17,827

 

TJLP + 2.15%

 

120 monthly installments from May 2010

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; liens on assets; assignment of credit and concession rights and real estate mortgage

FINEM XI

 

            92,230

 

            95,016

 

TJLP + 1.87% to 1.9%

 

108 to 168 monthly installments from January 2012 and January 2013

 

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

FINEM XII

 

          292,397

 

          297,835

 

TJLP and TJLP + 2.18%

 

192 monthly installments from July 2014

 

SGBP, CPFL Energia, CPFL Renováveis and Eólica Holding guarantees; pledge of the subsidiary's and Eólica Holding's shares; liens on assets; assignment of credit and concession rights

FINEM XIII

 

          293,145

 

          298,439

 

TJLP + 2.02% to 2.18%

 

192 monthly installments from November 2014

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of the subsidiary's shares; liens on assets; assignment of credit and concession rights

FINEM XV

 

            22,118

 

            23,185

 

TJLP + 3.44%

 

139 monthly installments from  September 2011

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of the subsidiary's shares; and assignment of credit and concession rights

FINEM XVI

 

             3,816

 

             4,335

 

Fixed rate 5.50%

 

101 monthly installments from  September 2011

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of the subsidiary's shares; and assignment of credit and concession rights

FINEM XVII

 

          419,467

 

          428,205

 

TJLP and TJLP + 2.18%

 

192 monthly installments from  January 2013

 

Bank guarantee; pledge of the subsidiary's and DESA Eólica's shares; liens on assets; and assignment of credit and concession rights

FINEM XVIII

 

             7,864

 

             9,044

 

Fixed rate 4.5%

 

102 monthly installments from June 2011

 

CPFL Energia and Bioenergia guarantees; liens on assets; and assignment of credit rights

FINEM XIX

 

            27,053

 

            27,579

 

TJLP + 2.02%

 

192 monthly installments from January 2014

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM XX

 

            35,348

 

            37,208

 

Fixed rate 2.5%

 

108 monthly installments from January 2014

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM XXI

 

            36,866

 

            37,583

 

TJLP + 2.02%

 

192 monthly installments from January 2014

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM XXII

 

            31,098

 

            32,734

 

Fixed rate 2.5%

 

108 monthly installments from January 2014

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM XXIII

 

             1,009

 

             1,153

 

Fixed rate 4.5%

 

102 monthly installments from June 2011

 

Pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM XXIV

 

            75,895

 

            82,632

 

Fixed rate 5.5%

 

102 to 108 monthly installments from January 2012 to August 2020

 

SGBP and CPFL Energia guarantees; liens on assets; and assignment of credit rights

FINEM XXV

 

            81,848

 

            83,136

 

TJLP + 2.18%

 

192 monthly installments from July 2016 to June 2032

 

SGBP and CPFL Energia guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINEM XXVI

 

          672,104

 

          681,912

 

TJLP and TJLP + 2.75%

 

192 monthly installments from July 2017 to June 2033

 

SGBP and CPFL Energia guarantees; pledge of subsidiary's and T-16's shares; liens on assets; and assignment of credit and concession rights

FINEM XXVII

 

            66,332

 

            67,584

 

TJLP and TJLP + 2,02%

 

162 monthly installments from November 2016 to April 2030

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; and assignment of credit and concession rights

FINEM XXVIII

 

             1,391

 

             1,415

 

TJLP

 

144 monthly installments from January 2018

 

SGBP, CPFL Energia and CPFL Renováveis guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

FINAME I

 

             2,270

 

             2,387

 

Fixed rate 2.5%

 

96 monthly installments from February 2015

 

CPFL Renováveis guarantee; and liens on assets

FINEP I

 

                781

 

                904

 

Fixed rate 3.5%

 

61 monthly installments from October 2014

 

Bank guarantee

FINEP II

 

             9,433

 

             9,516

 

TJLP - 1%

 

85 monthly installments from June 2017

 

Bank guarantee

FINEP III

 

             3,805

 

             4,091

 

Fixed rate 8%

 

73 monthly installments from July 2015

 

Bank guarantee

BNB I

 

            90,738

 

            92,926

 

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

 

168 monthly installments from January 2009 to 2028

 

SIIF Énergies do Brasil guarantee; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

BNB II

 

          149,665

 

          151,428

 

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

 

222 monthly installments from May 2010 to October 2029

 

BVP S.A. and bank guarantees; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

BNB III

 

            26,659

 

            27,138

 

Fixed rate 9.5% and compliance bonus of 25%

 

228 monthly installments from July 2009 to July 2028

 

CPFL Renováveis guarantee; pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

BNB IV

 

          161,928

 

                  -  

 

Fixed rate 10.14% and compliance bonus of 15%

 

228 monthly installments from December 2018 to November 2037 to July 2028

 

Bank guarantee

NIB

 

            55,757

 

            57,291

 

IGPM + 8.63%

 

Interest and principal quartely from June 2011 to September 2023

 

Pledge of subsidiary's shares; liens on assets; and assignment of credit and concession rights

                     

Rental assets

                   

CPFL Eficiência

                   

FINAME

 

             2,121

 

             2,281

 

Fixed rate 4.5% to 8.7%

 

96 monthly installments from March 2012

 

CPFL Energia guarantee

FINAME

 

                  77

 

                  81

 

Fixed rate 6%

 

72 monthly installments from October 2016

 

CPFL Energia guarantee

FINAME

 

                154

 

                171

 

TJLP + 2.70%

 

48 monthly installments from August 2016

 

CPFL Energia guarantee

FINAME

 

                159

 

                174

 

SELIC + 2.70%

 

48 monthly installments from August 2016

 

CPFL Energia guarantee

FINAME

 

                  90

 

                100

 

Fixed rate 9.5%

 

36 monthly installments from September 2017

 

CPFL Energia guarantee

FINAME

 

                473

 

                515

 

Fixed rate 9.5%

 

48 monthly installments from February 2017

 

CPFL Energia guarantee and liens on equipment

FINAME

 

                626

 

                672

 

TJLP + 3.50%

 

48 monthly installments from August 2017

 

CPFL Energia guarantee and liens on equipment

Financial institutions

                   

CPFL Santa Cruz

                   

Banco do Brasil - Working capital

 

            97,278

 

            95,682

 

104.90% of CDI (f)

 

2 annual installments from July 2017

 

CPFL Energia guarantee

Banco IBM - Working capital

 

            44,393

 

            35,895

 

 CDI + 0.27%  to 1.33%(f) 

 

12 semiannual installments from June 2015

 

CPFL Energia guarantee

Banco IBM - Working capital

 

                  -  

 

             5,180

 

CDI + 1.33% (f)

 

8 semiannual installments from January 2016

 

CPFL Energia guarantee

Banco IBM - Working capital

 

                  -  

 

             5,652

 

CDI + 1.27%

 

8 semiannual installments from February 2017

 

CPFL Energia guarantee

Banco IBM - Working capital

 

            13,013

 

            13,111

 

100.0% of CDI

 

14 semiannual installments from December 2012

 

CPFL Energia guarantee

Banco IBM - Working capital

 

            25,859

 

            25,443

 

CDI + 0.1%

 

12 semiannual installments from October 2014

 

CPFL Energia guarantee

RGE Sul

                   

Banco IBM - Capital de giro

 

             7,369

 

                  -  

 

 CDI - 1.25%

 

Parcela única em dezembro de 2020

 

CPFL Energia guarantee

CPFL Serviços

                   

Banco IBM - Working capital

 

             1,299

 

             1,279

 

CDI + 0.10%

 

11 semiannual installments from June 2013

 

CPFL Energia guarantee

Promissory notes

 

            47,717

 

            46,941

 

104.0% of CDI

 

1 installment in June 2018

 

CPFL Energia guarantee

CPFL Geração

                   

Banco do Brasil - Working capital

 

          618,186

 

          630,309

 

109.5% of CDI (3)

 

1 installment in March 2019

 

CPFL Energia guarantee

CPFL Renováveis

                   

Bradesco

 

          208,444

 

          204,934

 

CDI + 0.5%

 

8 annual installment from June 2013

 

No guarantee

Safra

 

          182,871

 

          194,006

 

105% of CDI

 

7 annual installments from January 2017 and May 2017

 

No guarantee

Banco BBM - Bank credit note

 

                  -  

 

            44,095

 

CDI + 3.40%

 

1 installment in March 2018

 

No guarantee

Banco BBM - Bank credit note

 

            43,046

 

            26,198

 

CDI + 1.90%

 

Interest semiannual and princial bullet

 

CPFL Renováveis guarantee

Deustche Bank - Bank credit note

 

            47,861

 

            46,966

 

CDI + 1.45%

 

Interest semiannual and princial bullet

 

CPFL Renováveis promissory note

Banco ABC - Promissory notes

 

            96,524

 

          102,006

 

CDI + 3.80%

 

4 semiannual installments from February 2017

 

No guarantee

Banco BBM - Promissory notes

 

            64,810

 

            63,582

 

CDI + 1.39%

 

1 installment in June 2018

 

CPFL Renováveis guarantee

                     

Others

                   

Eletrobrás

                   

CPFL Paulista

 

             2,273

 

             2,410

 

RGR + 6% to 6.5%

 

120 monthly installments from January 2013

 

Receivables and promissory notes

RGE

 

             3,522

 

             3,988

 

RGR + 6%

 

120 monthly installments from May 2008

 

Receivables and promissory notes

RGE SUL

 

            17,250

 

            18,970

 

RGR + 6%

 

120 monthly installments from December 2008

 

Bank guarantee; assignment of credit rights; and promissory notes

Others

 

            20,175

 

            49,373

           

Subtotal local currency

 

       6,095,659

 

       6,165,427

           
                     

Foreign currency

                   

Measured at fair value

                   

Financial institutions

                   

CPFL Paulista

                   

Bank of America Merrill Lynch

 

          335,907

 

          332,766

 

US$+Libor 3 months+1.35% (1)

 

1 installment in october 2018

 

CPFL Energia guarantee and promissory notes

Bank of America Merrill Lynch

 

                  -  

 

          148,930

 

US$+Libor 3 months+1.70% (2)

 

1 installment in September 2018

 

CPFL Energia guarantee and promissory notes

Bank of Tokyo-Mitsubishi

 

          167,398

 

          165,826

 

US$ + Libor 3 months + 0.88% (1) (3) (g)

 

1 installment in February 2020

 

CPFL Energia guarantee and promissory notes

Bank of Tokyo-Mitsubishi

 

            83,576

 

          124,211

 

US$+Libor 3 months+0.80% (1) (f)

 

4 semiannual installments from September 2017

 

CPFL Energia guarantee and promissory notes

J.P. Morgan

 

            83,945

 

            83,783

 

US$ + 2.74% (1) (3)

 

1 installment in January 2019

 

CPFL Energia guarantee and promissory notes

Bank of America Merrill Lynch

 

                  -  

 

          498,061

 

US$ + Libor 3 months + 1.40% (1)

 

1 installment in February 2018

 

CPFL Energia guarantee and promissory notes

Mizuho Bank

 

          166,971

 

          248,189

 

US$+Libor 3 months+1.55% (1) (3) (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

 

          223,561

 

          221,475

 

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

 

5 semiannual installments from May 2019

 

CPFL Energia guarantee and promissory notes

CPFL Piratininga

                   

BNP Paribas

 

                  -  

 

          218,814

 

Euro + 1.6350% (1)

 

1 installment in January 2018

 

CPFL Energia guarantee and promissory notes

Citibank

 

          209,730

 

          207,743

 

US$ + Libor 3 months + 1.41% (1) (3)

 

2 annual installments from January 2019

 

CPFL Energia guarantee and promissory notes

Citibank

 

          167,307

 

          165,740

 

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

 

1 installment in March 2019

 

CPFL Energia guarantee and promissory notes

Sumitomo

 

          167,953

 

          166,346

 

US$ + Libor 3 months + 1.35% (1) (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

 

          223,561

 

          221,475

 

US$ + Libor 3 months + 2.7% (2) (3)

 

5 semiannual installments from May 2019

 

CPFL Energia guarantee and promissory notes

RGE

                   

Bank of Tokyo-Mitsubishi

 

                  -  

 

            59,793

 

US$ + Libor 3 months + 0.82%(1)

 

1 installment in April 2018

 

CPFL Energia guarantee and promissory notes

Bank of Tokyo-Mitsubishi

 

          274,469

 

          271,893

 

US$ + Libor 3 months + 0.83%(1)

 

1 installment in May 2018

 

CPFL Energia guarantee and promissory notes

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

 

          223,561

 

          221,475

 

US$ + Libor 3 months + 2.7% (1)

 

5 semiannual installments from May 2019

 

CPFL Energia guarantee and promissory notes

Bank of Tokyo-Mitsubishi

 

          174,158

 

          172,592

 

US$ + 1.9275% (1)

 

1 installment in October 2018

 

CPFL Energia guarantee and promissory notes

Bank of Tokyo-Mitsubishi

 

          160,299

 

                  -  

 

USD + 3.474% (1)

 

2 Parcelas anuais a partir de março 2021

 

CPFL Energia guarantee and promissory notes

CPFL Santa Cruz

                   

Scotiabank

 

            67,248

 

            67,219

 

US$ + 3.37% (2)

 

1 installment in July 2019

 

CPFL Energia guarantee and promissory notes

CPFL Geração

                   

China Construction Bank - Bank credit note

          100,369

 

            99,443

 

US$+Libor 3 months + 1.60% + 1.4% fee (2)

 

1 installment in June 2019

 

CPFL Energia guarantee and promissory notes

Scotiabank

 

          119,364

 

          119,314

 

US$ + 3.3703% (2) (3)

 

1 installment in July 2019

 

CPFL Energia guarantee and promissory notes

Citibank

 

          401,002

 

          397,328

 

US$ + Libor 3 months + 1.41% (1) (3)

 

3 annual installments from September 2018

 

CPFL Energia guarantee and promissory notes

China Construction Bank - Bank credit note

            33,426

 

            33,120

 

US$ + Libor 3 months + 1.20% + 1.1% fee (1)

 

1 installment in September 2019

 

CPFL Energia guarantee and promissory notes

Scotiabank

 

          168,378

 

          165,572

 

US$ + 3.1259% (2) (3)

 

1 installment in December 2019

 

CPFL Energia guarantee

Paulista Lajeado

                   

Banco Itaú

 

                  -  

 

            36,311

 

US$ + 3.196% (2)

 

1 installment in March 2018

 

CPFL Energia guarantee and promissory notes

CPFL Brasil

                   

Scotiabank

 

            45,251

 

            45,161

 

US$ + 2.779% (1)

 

1 installment in August 2018

 

CPFL Energia guarantee and promissory notes

Scotiabank

 

            11,759

 

            11,731

 

US$ + 2.6201% (1)

 

1 installment in September 2020

 

CPFL Energia guarantee and promissory notes

Scotiabank

 

          254,448

 

          253,626

 

US$ + 2.2997% (1) (3) (4)

 

1 installment in September 2020

 

CPFL Energia guarantee and promissory notes

Scotiabank

 

          161,424

 

          159,060

 

US$ + 2.3073% (1) (3)

 

1 installment in October 2020

 

CPFL Energia guarantee and promissory notes

                     

Mark to market

 

            10,383

 

           (58,552)

           
                     

Total in foreign currency - fair value

       4,035,447

 

       4,858,445

           
                     

Borrowing costs (*)

 

           (32,879)

 

           (31,816)

           
                     

Total - Consolidated

 

     10,098,227

 

     10,992,057

           
                     

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

       

 (1) 99% to 109% of CDI

 

 (2) 109.1% to 119% of CDI

           

 (3) The subsidiaries holds swap converting the operating cost of interest tax variation to fixed rate of 7.28% to 8.02%,for the year 2018.

   

 (4) The operation swap represents 77% of the debt

               
                     

Effective rate:

                   

 (to)  30% to 40% of CDI

 

 (d)  70.1% to 80% of CDI

 

 (g)  110.1% to 120% of CDI

       

 (b)  40.1% to 50% of CDI

 

 (e) 80.1% to 90% of CDI

 

 (h) 120.1% to 130% of CDI

       

 (c)  60.1% to 70% of CDI 

 

 (f)  100.1% to 110% of CDI

           

(*) In accordance with CPC 48/IFRS 9, 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 CPC 48 and IFRS 9, 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 March 31, 2018, the balance of the borrowings measured at fair value was R$ 4,035,447 (R$ 4,858,445 at December 31, 2017).

 

61


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Changes in the fair values of these borrowings are recognized in the finance income/cost of the Group, except for the component of credit risk calculation, which is recorded in other comprehensive income. At March 31, 2018, the accumulated losses of R$ 10,383 (accumulated gains of R$ 58,552 at December 31, 2017) on marking the borrowings to market, offset by the gains of R$ 1,320 (losses of R$ 51,145 at December 31, 2017) of marking to market the derivative financial instruments contracted as a hedge against foreign exchange variations (note 32), resulted in a total net gain of R$ 9,063 (R$ 7,407 at December 31, 2017).

 

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

Maturity

 

Consolidated

From April 1, 2019

 

         1,478,737

2020

 

         1,335,760

2021

 

         1,161,144

2022

 

            535,924

2023

 

            373,998

2024 to 2028

 

         1,184,222

2029 to 2033

 

            391,312

2034 to 2038

 

              66,406

Subtotal

 

         6,527,503

Mark to market

 

               8,689

Total

 

         6,536,192

     

Main additions in the period:

       

R$ thousand

  

   

Company

 

Bank / Credit issue

 

Total approved

 

 Released in 2018

 

 Released net of fundraising costs

 

Interest

 

Utilization

Local currency

                       

RGE Sul (a)

 

IBM - CCB

 

              7,360

 

              7,360

 

                        7,360

 

 Semiannually

 

 Working capital

CPFL Serviços (a)

 

BNDES Safra - Finame

 

                 384

 

                 384

 

                           384

 

 Quarterly

 

 Acquisition of machinery and equipment

CPFL Renováveis (a)

 

BBM - CCB

 

            16,000

 

            16,000

 

                      14,821

 

 Bullet

 

 Working capital

CPFL Renováveis (a)

 

BNB - FNE

 

          170,152

 

          160,933

 

                    159,130

 

Monthly

 

 Subsidiary's investment plan

                         

Foreign currency

                       

RGE

 

Lei 4131 - Tokyo-Mitsubishi

 

          158,592

 

          158,592

 

                    158,592

 

 Quarterly

 

 Capital de Giro

                         
       

          352,488

 

          343,269

 

                    340,287

       

 

 

(a) There is no restrictive financial covenant.

 

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.

For borrowings contracted or with releases of funds occurred in 2018, some contain covenants related to financial indicators as follows:

RGE Sul - Scotiabank (Law 4,131): (i) Net indebtedness divided by EBITDA, maximum of 3.75 and (ii) EBITDA divided by the minimum financial result of 2.25.

62


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

For other debts, the details of the covenants are presented in the financial statements as of December 31, 2017.

The Group’s management monitors these ratios on a systematic and constant basis, so that all conditions are met. The Group’s management believes that all covenants and financial and non-financial clauses whose indicators are measured semiannually and annually are properly complied with, according to the last calculation period, in other words, June 30, 2017 and December 31, 2017, respectively.

 

( 17 )   DEBENTURES

 

 

 

Consolidated

 

 

As of December

31, 2017

 

Raised

 

Repayment

 

Interest, inflation adjustment

 

Exchange

rates

 

As of March

31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debentures

 

9,253,396

 

  2,610,000

 

(1,110,491)

 

  203,205

 

(176,074)

 

  10,780,036

Borrowings costs

 

  (76,870)

 

(2,406)

 

-

 

7,932

 

-

 

(71,344)

Total

 

9,176,526

 

  2,607,594

 

(1,110,491)

 

  211,137

 

(176,074)

 

  10,708,692

 

 

 

 

 

 

 

 

 

 

 

 

 

                         

63


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

 

 

Consolidated

 

 

March 31, 2018

 

December 31, 2017

 

 

Current interest

 

Current

 

Noncurrent

 

Total

 

Current interest

 

Current

 

Noncurrent

 

Total

CPFL Paulista

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7th Issue

Single series

3,939

 

  126,250

 

252,500

 

382,689

 

17,134

 

  126,250

 

378,750

 

  522,134

8th Issue

1st series

  374

 

-

 

  217,446

 

217,819

 

  1,669

 

-

 

215,310

 

  216,980

8th Issue

2nd series

  654

 

-

 

  361,777

 

  362,431

 

2,925

 

-

 

358,224

 

361,149

8th Issue

3rd series

  260

 

-

 

  132,700

 

  132,960

 

  1,161

 

-

 

131,397

 

  132,558

9th Issue

Single series

  21,184

 

-

 

  1,380,000

 

  1,401,184

 

-

 

-

 

-

 

-

 

 

  26,411

 

126,250

 

  2,344,423

 

  2,497,084

 

22,890

 

126,250

 

1,083,681

 

1,232,821

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPFL Piratininga

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6th Issue

Single series

  759

 

-

 

44,000

 

44,759

 

  1,950

 

-

 

44,000

 

45,950

7th Issue

Single series

  1,833

 

58,750

 

117,500

 

  178,083

 

7,973

 

58,750

 

  176,250

 

242,973

8th issue

2nd series

2,058

 

-

 

246,000

 

248,058

 

7,669

 

-

 

246,000

 

253,669

8th issue

1st series

  380

 

-

 

  61,740

 

  62,120

 

1,174

 

-

 

61,125

 

62,299

9th Issue

Single series

3,053

 

-

 

  215,000

 

  218,053

 

-

 

-

 

-

 

-

 

 

8,083

 

58,750

 

684,240

 

751,073

 

  18,766

 

58,750

 

527,375

 

604,891

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RGE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6th Issue

Single series

3,452

 

-

 

200,000

 

   203,452

 

8,864

 

-

 

200,000

 

208,864

7th Issue

Single series

  1,326

 

42,500

 

85,000

 

  128,826

 

5,768

 

42,500

 

  127,500

 

  175,768

8th issue

2nd series

2,096

 

-

 

250,000

 

252,096

 

  7,812

 

-

 

250,000

 

  257,812

8th issue

1st series

  833

 

-

 

  133,908

 

134,741

 

2,573

 

-

 

  132,573

 

135,146

9th Issue

Single series

  3,314

 

-

 

220,000

 

  223,314

 

-

 

-

 

-

 

-

 

 

11,021

 

42,500

 

888,908

 

942,428

 

  25,017

 

42,500

 

710,073

 

777,590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPFL Santa Cruz

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1st Issue

Single series

  766

 

32,500

 

-

 

33,266

 

  135

 

32,500

 

-

 

32,635

2nd Issue

Single series

2,589

 

-

 

  190,000

 

  192,589

 

-

 

-

 

-

 

-

 

 

3,355

 

32,500

 

190,000

 

225,855

 

135

 

32,500

 

  -

 

32,635

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RGE SUL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4th Issue

Single series

8,724

 

-

 

827,000

 

835,724

 

  16,662

 

-

 

1,100,000

 

  1,116,662

6th Issue

Single series

  9,631

 

-

 

520,000

 

  529,631

 

  312

 

-

 

220,000

 

  220,312

 

 

18,355

 

  -

 

  1,347,000

 

  1,365,355

 

  16,974

 

  -

 

  1,320,000

 

  1,336,974

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPFL Brasil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3rd Issue

Single series

2,080

 

-

 

  160,000

 

  162,080

 

6,059

 

-

 

400,000

 

406,059

4th issue

Single series

  1,744

 

115,000

 

-

 

116,744

 

-

 

-

 

-

 

-

 

 

3,824

 

  115,000

 

160,000

 

278,824

 

6,059

 

  -

 

400,000

 

406,059

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPFL Geração

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5th Issue

Single series

13,983

 

546,000

 

-

 

559,983

 

3,366

 

546,000

 

-

 

549,366

6th Issue

Single series

3,397

 

153,318

 

306,682

 

463,397

 

13,671

 

153,318

 

306,682

 

  473,671

7th Issue

Single series

  20,890

 

-

 

635,000

 

655,890

 

8,978

 

-

 

635,000

 

643,978

8th Issue

Single series

  4,718

 

-

 

88,825

 

93,543

 

  3,401

 

-

 

87,905

 

  91,306

9th Issue

Single series

  1,240

 

-

 

  52,184

 

53,424

 

550

 

-

 

  51,672

 

  52,221

10th issue

Single series

2,882

 

  190,000

 

-

 

  192,882

 

-

 

-

 

-

 

-

 

 

47,108

 

889,318

 

  1,082,692

 

  2,019,118

 

29,966

 

699,318

 

1,081,259

 

1,810,543

Parent company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5th Issue

Single series

-

 

-

 

-

 

-

 

  2,817

 

-

 

  186,000

 

188,817

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPFL Renováveis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1st Issue - SIIF (*)

1st to 12th series

2,030

 

45,708

 

  457,081

 

  504,819

 

762

 

44,968

 

449,678

 

495,408

1st Issue - PCH Holding 2

Single series

  288

 

8,701

 

123,391

 

  132,380

 

260

 

8,701

 

123,391

 

  132,352

2nd Issue - DESA

Single series

41,883

 

43,329

 

21,671

 

  106,883

 

39,857

 

43,329

 

21,671

 

  104,857

1st Issue - Pedra Cheirosa I

Single series

  -

 

-

 

-

 

-

 

1,617

 

64,653

 

-

 

66,270

1st Issue - Pedra Cheirosa II

Single series

  -

 

-

 

-

 

-

 

1,481

 

59,203

 

-

 

60,684

1st Issue - Renováveis

Single series

9,497

 

64,500

 

258,000

 

  331,997

 

2,970

 

64,500

 

258,000

 

325,470

2nd Issue - Renováveis

Single series

59

 

60,000

 

  150,000

 

  210,059

 

  5,531

 

60,000

 

  210,000

 

  275,531

3rd Issue - Renováveis

Single series

7,736

 

98,657

 

  197,343

 

303,736

 

  2,169

 

98,657

 

  197,343

 

  298,169

4th Issue - Renováveis

1st series

62

 

-

 

200,000

 

200,062

 

4,534

 

-

 

200,000

 

204,534

5th Issue - Renováveis

Single series

  11,978

 

  12,000

 

88,000

 

  111,978

 

  9,716

 

  12,000

 

88,000

 

109,716

7th Issue - Renováveis

Single series

2,907

 

-

 

256,084

 

  258,991

 

6,244

 

-

 

253,529

 

259,773

 

 

76,440

 

332,895

 

1,751,570

 

  2,160,905

 

  75,141

 

  456,011

 

  1,801,612

 

  2,332,764

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CERAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1st Issue

1st series

5,636

 

  106,000

 

  212,000

 

323,636

 

181

 

  106,000

 

  212,000

 

  318,181

1st Issue

2nd series

3,757

 

-

 

  212,000

 

  215,757

 

121

 

-

 

  212,000

 

  212,121

 

 

9,393

 

106,000

 

424,000

 

539,393

 

  302

 

106,000

 

424,000

 

530,302

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowing costs (**)

 

(4,956)

 

(9,834)

 

(56,555)

 

  (71,344)

 

(7,580)

 

(8,745)

 

(60,546)

 

(76,870)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

199,035

 

  1,693,379

 

  8,816,277

 

  10,708,692

 

  190,489

 

1,512,584

 

  7,473,454

 

  9,176,526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

64


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

 

 

Quantity issued

 

Annual remuneration

 

Annual effective rate

 

Amortization conditions

 

Collateral

CPFL Paulista

 

 

 

 

 

 

 

 

 

 

7th Issue

Single series

50,500

 

CDI + 0.83% (2)

 

CDI  + 0.89%

 

4 annual installments from February 2018

 

CPFL Energia guarantee

8th Issue

1st series

213,804

 

IPCA + 4,42%

 

IPCA + 4,42%

 

1 installment in September 2022

 

CPFL Energia guarantee

8th Issue

2nd series

355,718

 

IPCA + 4,66%

 

IPCA + 4,66%

 

2 annual instalments from September 2023

 

CPFL Energia guarantee

8th Issue

3rd series

130,478

 

IPCA + 5,05%

 

IPCA + 5,05%

 

3 annual instalments from September 2025

 

CPFL Energia guarantee

9th Issue

Single series

1,380,000

 

CDI + 0.48% (2)

 

106.0% of CDI

 

Parcela única em Janeiro de 2021

 

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) (3)

 

CDI + 0.89%

 

4 annual installments from February 2018

 

CPFL Energia guarantee

8th issue

2nd series

246,000

 

 109.5% CDI (2)

 

109.5% CDI

 

2 annual installments from February 2021

 

CPFL Energia guarantee

8th issue

1st series

60,000

 

 IPCA + 5.2901%

 

IPCA + 5.2901%

 

2 annual installments from February 2021

 

CPFL Energia guarantee

9th Issue

Single series

215,000

 

 CDI + 0.48% (2)

 

106.2% of CDI

 

Parcela única em Janeiro de 2021

 

CPFL Energia guarantee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RGE

 

 

 

 

 

 

 

 

 

 

6th Issue

Single series

500

 

CDI + 0.8% (2)

 

CDI + 0.88%

 

3 annual installments from July 2017

 

CPFL Energia guarantee

7th Issue

Single series

17,000

 

CDI + 0.83% (4)

 

CDI + 0.88%

 

4 annual installments from February 2018

 

CPFL Energia guarantee

8th issue

2nd series

250,000

 

111.25% CDI (2)

 

111.25% CDI

 

2 annual installments from February 2021

 

CPFL Energia guarantee

8th issue

1st series

130,000

 

IPCA+ 5.3473%

 

IPCA+ 5.3473%

 

2 annual installments from February 2023

 

CPFL Energia guarantee

9th Issue

Single series

220,000

 

CDI + 0,48% (2)

 

106.2% of CDI

 

1 installment in January 2021

 

CPFL Energia guarantee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Companhia Luz e Força Santa Cruz

 

 

 

 

 

 

 

 

 

 

1st Issue

Single series

650

 

CDI + 1.4%

 

CDI + 1.52%

 

2 annual instalments from June 2017

 

 CPFL Energia guarantee

2nd Issue

Single series

190,000

 

CDI + 0,48%

 

106.3% of CDI

 

1 installment in January 2021

 

CPFL Energia guarantee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RGE SUL

 

 

 

 

 

 

 

 

 

 

4th Issue

Single series

110,000

 

114.50% of CDI (2) (5)

 

114.5% of CDI

 

2 annual installments from October 2019

 

CPFL Energia guarantee

6th Issue

Single series

520,000

 

 CDI + 0.48% (2)

 

 CDI + 0,48%

 

1 installment in December 2020

 

CPFL Energia guarantee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPFL Brasil

 

 

 

 

 

 

 

 

 

 

3rd Issue

Single series

40,000

 

114.5% of CDI

 

114.5% of CDI

 

2 annual installments from October 2019

 

CPFL Energia guarantee

4th Issue

Single series

115,000

 

CDI + 0.27% (2)

 

106.1% of CDI

 

1 installment in January 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% (2)

 

CDI + 0.75%

 

3 annual instalments from August 2018

 

CPFL Energia guarantee

7th Issue

Single series

63,500

 

 CDI + 1.06% (2)

 

CDI + 1.11%

 

1 installment in April 2019

 

CPFL Energia guarantee

8th Issue

Single series

1

 

 IPCA + 5.86% (1)

 

103.33% of CDI

 

1 installment in April 2019

 

CPFL Energia guarantee

9th Issue

Single series

50,000

 

 IPCA+ 5.4764%

 

 IPCA+ 5.4764%

 

1 installment in October 2021

 

CPFL Energia guarantee

10th Issue

Single series

190,000

 

CDI + 0,27% (2)

 

105,4% do CDI

 

1 installment in December 2018

 

CPFL Energia guarantee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Parent company

 

 

 

 

 

 

 

 

 

 

5th Issue

Single series

62,500

 

114.5% of CDI

 

114.5% of CDI

 

2 annual installments from October 2019

 

No guarantee

 

 

 

 

 

 

 

 

 

 

 

CPFL Renováveis

 

 

 

 

 

 

 

 

 

 

1st Issue - SIIF

1st to 12th series

432,299,666

 

TJLP + 1%

 

TJLP + 3.48%

 

39 semi-annual installments from 2009

 

Liens

1st Issue - PCH Holding 2

Single series

1,581

 

CDI + 1.6%

 

CDI + 2.6%

 

9 annual installments from June 2015 to 2023

 

CPFL Renováveis guarantee

2nd Issue - DESA

Single series

65

 

CDI + 1.34%

 

CDI + 3.03%

 

3 semi-annual installments from April de 2018

 

Unsecured

1st Issue - Pedra Cheirosa I

Single series

5,220

 

CDI + 1.90%

 

CDI + 4.74%

 

1 installment in March 2018

 

CPFL Renováveis guarantee

1st Issue - Pedra Cheirosa II

Single series

4,780

 

CDI + 1.90%

 

CDI + 4.76%

 

1 installment in March 2018

 

CPFL Renováveis guarantee

1st Issue - Renováveis

Single series

43,000

 

CDI + 1.7%

 

CDI + 2.60%

 

9 annual installments from May 2015

 

Assignment of dividends of BVP and PCH Holding

2nd Issue - Renováveis

Single series

300,000

 

114% do CDI

 

129.39% CDI

 

5 annual instalments from 2017

 

Unsecured

3rd Issue - Renováveis

Single series

29,600

 

117.25% CDI

 

135.94% CDI

 

3 semi-annual installments from April de 2018

 

Unsecured

4th Issue - Renováveis

1st series

20,000

 

126% CDI

 

140.16% CDI

 

3 annual installments from September 2019

 

CPFL Energia guarantee

5th Issue - Renováveis

Single series

100,000,000

 

129.5% CDI

 

144.46% CDI

 

Semi-annual installments from June 2018

 

Liens of 60% of the quotas from Ludesa

 and contract credits

Dobrevê guarantee

7th Issue - Renováveis

Single series

250,000

 

IPCA + 5.62%

 

IPCA + 6.14%

 

1 installment in the end of the contract

 

CPFL Energia guarantee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CERAN

 

 

 

 

 

 

 

 

 

 

1st Issue

1st series

318,000

 

 107,75% CDI

 

 109,82% of CDI

 

3 annual installments from December 2018

 

No guarantee

1st Issue

2nd series

212,000

 

 107,75% CDI

 

 109,82% of CDI

 

3 annual installments from December 2021

 

No guarantee

 

 

 

 

 

 

 

 

 

 

 

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

(1) 100.15% to 106.9% of CDI

(2) 107% to 107.9% of CDI

(3) 108% to 108.1% of CDI


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

(**) In accordance with CPC 48/IFRS 9 this refers to borrowing costs directly attributable to the issuance of the respective debts.

65


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

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

 

Maturity

 

Consolidated

Frmo April 1, 2019

 

        2,020,744

2020

 

        1,848,245

2021

 

        2,975,469

2022

 

           980,523

2023

 

           427,883

2024 to 2028

 

           563,413

Total

 

        8,816,277

 

Main additions in the period:

R$ thousand

Company

 

Issue

 

Quantity issued

 

 Released in 2018

 

 Released net of fundraising costs

 

Interest

 

Utilization

CPFL Paulista

 

9th issue

 

1,380,000

 

1,380,000

 

1,379,022

 

Semiannually

 

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

CPFL Piratininga

 

9th issue

 

215,000

 

215,000

 

214,739

 

Semiannually

 

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

CPFL Brasil

 

4th issue

 

115,000

 

115,000

 

114,848

 

Semiannually

 

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

CPFL Santa Cruz

 

2nd issue

 

190,000

 

190,000

 

189,737

 

Semiannually

 

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

RGE

 

9th issue

 

220,000

 

220,000

 

       219,733

 

Semiannually

 

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

RGE Sul

 

6th issue

 

520,000

 

300,000

 

       299,677

 

Semiannually

 

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

CPFL Geração

 

10th issue

 

190,000

 

190,000

 

       189,838

 

Semiannually

 

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

 

 

 

 

 

 

2,610,000

 

2,607,594

 

 

 

 

 

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 2018 are subject to covenants that require the maintenance, by the Company, of the following financial ratios: (i) Debt indebtedness divided by EBITDA lower than 3.75 and (ii) EBITDA divided by the financial result higher 2.25.

The Group’s management monitors these ratios on a systematic and constant basis, so that all conditions are met. The Group’s management believes that all covenants and clauses whose indicators are measured semiannually and annually are properly complied with, according to the last calculation period, in other words, June 30, 2017 and December 31, 2017, respectively.

66


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

( 18 )   PRIVATE PENSION PLAN

The subsidiaries have supplementary retirement and pension plans for their employees, the characteristics of which are described in note 18 to the financial statements for the year ended December 31, 2017.

18.1   Movements in the defined benefit plans             

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

 

 

CPFL

Paulista

 

CPFL Piratininga

 

CPFL Geração

 

RGE

 

RGE Sul

 

Total liability

Net actuarial liability at December 31, 2017

690,000

 

141,724

 

  16,424

 

-

 

  77,623

 

  925,771

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

15,583

 

4,093

 

388

 

(47)

 

  2,461

 

  22,478

Sponsors' contributions transferred during the year / period

  (14,470)

 

  (5,908)

 

  (200)

 

(1,756)

 

(1,852)

 

(24,187)

Effect of asset ceiling

-

 

  -

 

-

 

  1,803

 

-

 

1,803

Net actuarial liability at March, 2018

691,112

 

139,909

 

  16,612

 

-

 

  78,232

 

  925,864

Other contributions

11,675

 

602

 

71

 

  3

 

  31

 

  12,383

Total liability

702,787

 

140,511

 

  16,683

 

  3

 

  78,263

 

  938,247

 

 

 

 

 

 

 

 

 

 

 

 

Current

                 

 

  66,133

Noncurrent

                 

 

  872,113

 

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

 

1st quarter 2018 accomplished

 

CPFL

Paulista

 

CPFL Piratininga

 

CPFL

Geração

 

RGE

 

RGE Sul

 

Total

Service cost

209

 

1,091

 

20

 

  44

 

  698

 

2,061

Interest on actuarial obligations

105,271

 

28,657

 

  2,527

 

  8,388

 

  12,055

 

  156,898

Expected return on plan assets

  (89,897)

 

  (25,655)

 

(2,159)

 

(8,988)

 

(10,292)

 

(136,990)

Effect of asset ceiling

-

 

  -

 

-

 

  509

 

-

 

  509

Total expense (income)

15,583

 

4,093

 

388

 

(47)

 

  2,461

 

  22,477

 

 

1st quarter 2017 accomplished

 

CPFL

Paulista

 

CPFL Piratininga

 

CPFL

Geração

 

RGE

 

RGE Sul

 

Total

Service cost

177

 

788

 

18

 

  68

 

  722

 

1,773

Interest on actuarial obligations

119,153

 

31,890

 

  2,858

 

  9,349

 

  12,732

 

  175,982

Expected return on plan assets

  (98,205)

 

  (28,367)

 

(2,359)

 

(9,354)

 

(10,639)

 

(148,924)

Total expense (income)

21,125

 

4,311

 

517

 

  63

 

  2,815

 

  28,831

  

 

The main assumptions considered in the actuarial calculation, based on the actuarial reports prepared as of December 31, 2017 and 2016, were as follows:

 

 

 

CPFL Paulista, CPFL Geração and CPFL Piratininga

 

RGE

 

RGE Sul

 

 

December 31, 2017

 

December 31, 2016

 

December 31, 2017

 

December 31, 2016

 

December 31, 2017

 

December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Nominal discount rate for actuarial liabilities:

 

9.51% p.a.

 

10.99% p.a.

 

9.51% p.a.

 

10.99% p.a.

 

9.51% p.a.

 

10.99% p.a.

Nominal return rate on plan assets:

 

9.51% p.a.

 

10.99% p.a.

 

9.51% p.a.

 

10.99% p.a.

 

9.51% p.a.

 

10.99% p.a.

Estimated rate of nominal salary increase:

 

6.08% p.a.**

 

7.00% p.a.

 

6.13% p.a.

 

8.15% p.a.

 

6.10% a.a.

 

7.29% p.a.

Estimated rate of nominal benefits increase:

 

4.00% p.a.

 

5.00% p.a.

 

4.00% p.a.

 

5.00% p.a.

 

4.00% p.a.

 

5.00% p.a.

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

4.00% p.a.

 

5.00% p.a.

 

4.00% p.a.

 

5.00% p.a.

 

4.00% p.a.

 

5.00% p.a.

General biometric mortality table:

 

AT-2000 (-10)

 

AT-2000 (-10)

 

BREMS sb v.2015

 

BREMS sb v.2015

 

BREMS sb v.2015

 

AT-2000

Biometric table for the onset of disability:

 

Low Light

 

Low Light

 

Medium Light

 

Medium Light

 

Medium Light

 

Medium Light

Expected turnover rate:

 

ExpR_2012

 

ExpR_2012*

 

Null

 

Null

 

Null

 

Null

Likelihood of reaching retirement age:

 

100% when a beneficiary of the plan first becomes eligible

 

100% when a beneficiary of the plan first becomes eligible

 

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

 

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

 

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

 

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

(*) FUNCESP experience, with aggravation of 40%

(**) Estimated rate of nominal salary increase of 6.39% p.a. for CPFL Piratininga

 

67


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

( 19 )   REGULATORY CHARGES

 

 

Consolidated

 

March 31, 2018

 

December 31, 2017

Financial compensation for the use of water resources

           1,052

 

           1,256

Global reversal reserve - RGR

          17,342

 

          17,545

ANEEL inspection fee -TFSEE

           2,072

 

           2,061

Energy development account - CDE

        124,128

 

        262,213

Tariff flags and others

              599

 

        298,525

Total

        145,194

 

        581,600

 

 

 

 

 

Energy development account – CDE: Refers to (i) quota for the return of CDE contribution for the period from January, 2013 to January, 2014 in the amount of R$47,479 (R$47,429 at December 31, 2017) and (ii) quota for the return of Regulated Contracting Environment Account (“ACR account”) contribution for the period from February to December, 2014, in the amount of R$76,649 (R$76,649 at December 31, 2017.) At December 31, 2017, there was also a balance relating to the CDE annual quota for 2017, in the amount of R$138,135. The subsidiaries matched the amounts payable and the amounts receivable – CDE (note 11) of the first quarter of 2017, in the amount of R$2,213 (R$102,641 in the first quarter of 2017.)

 

( 20 )   TAXES, FEES AND CONTRIBUTIONS

 

 

 

Consolidated

 

 

March 31, 2018

 

December 31, 2017

Current

 

 

 

 

IRPJ (corporate income tax)

 

          73,475

 

          59,026

CSLL (social contribution on net income)

 

          28,035

 

          22,430

Income tax and social contribution

 

        101,510

 

          81,457

 

 

 

 

 

ICMS (State VAT)

 

        384,230

 

        403,492

PIS (tax on revenue)

 

          34,227

 

          32,486

COFINS (tax on revenue)

 

        158,034

 

        141,757

Others

 

          43,307

 

          51,111

Other taxes, fees and contributions

 

        619,798

 

        628,846

 

 

 

 

 

Total current

 

        721,308

 

        710,303

 

 

 

 

 

Noncurrent

 

 

 

 

PIS (tax on revenue)

 

           2,960

 

          18,839

COFINS (tax on revenue)

 

          16,459

 

          18,839

Other taxes, fees and contributions

 

          16,459

 

          18,839

 

 

 

 

 

Total noncurrent

 

          16,459

 

          18,839

68


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

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

 

 

Consolidated

 

March 31, 2018

 

December 31, 2017

 

Provision for tax,

civil and labor risks

 

Escrow

Deposits

 

Provision for tax,

civil and labor risks

 

Escrow

Deposits

 

 

 

 

 

 

 

 

Labor

229,725

 

129,494

 

224,258

 

122,194

 

 

 

 

 

 

 

 

Civil

279,099

 

97,256

 

291,388

 

97,100

 

 

 

 

 

 

 

 

Tax

 

 

 

 

 

 

 

FINSOCIAL

34,846

 

96,724

 

33,473

 

95,903

Income Tax

151,217

 

387,456

 

150,020

 

382,884

Others

179,593

 

142,482

 

163,798

 

140,289

 

365,656

 

626,662

 

347,291

 

619,077

 

 

 

 

 

 

 

 

Others

103,836

 

811

 

98,196

 

1,620

 

 

 

 

 

 

 

 

Total

978,316

 

854,224

 

961,134

 

839,990


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

 

Consolidated

 

As of December 31, 2017

 

Additions

 

Reversals

 

Payments

 

Monetary adjustment

 

As of March

31, 2018

Labor

               224,258

 

            10,222

 

             (6,514)

 

             (6,526)

 

              8,285

 

          229,725

Civil

               291,388

 

            10,800

 

           (10,432)

 

           (19,419)

 

              6,762

 

          279,099

Tax

               347,291

 

            11,167

 

                 968

 

                (270)

 

              6,500

 

          365,656

Others

                 98,196

 

            12,287

 

             (5,108)

 

             (4,595)

 

              3,054

 

          103,836

Total

               961,134

 

            44,476

 

           (21,086)

 

           (30,811)

 

            24,602

 

          978,316

 

The provision for tax, civil, labor and other risks was based on the assessment of the risks of losing the lawsuits to which the Group is part, where the likelihood of loss is probable in the opinion of the outside legal counselors and the Management of the Group.

The details of the nature of the provision for tax, civil, labor and other risks and escrow deposits are presented in the Note 21 of the financial statements at December 31, 2017.

Possible losses

 

The Group is part to other lawsuits in which Management, supported by its external legal counselors, believes that the chances of a successful outcome are possible, that is, it is more likely than not that there will be no disbursement for these cases due to a solid defensive position in these cases. It is not yet possible to predict the outcome of the courts’ decisions or any other decisions in similar proceedings considered probable or remote.

The claims relating to possible losses at March 31, 2018 and December 31, 2017 were as follows:

 

Consolidated

 

 

March 31, 2018

 

December 31, 2017

 

 

 

 

 

 

Labor

           791,521

 

         686,538

Work accidents, risk premium for dangerousness at workplace and overtime

Civil

        1,355,712

 

      1,178,671

Personal injury, environmental impacts and overfed tariffs

Tax

        5,466,484

 

      5,100,151

ICMS, FINSOCIAL, PIS and COFINS, and Income tax

Regulatory

           172,984

 

         140,695

Technical, commercial and economic-financial supervisions

Total

        7,786,702

 

      7,106,055

 

 

 

 

 

 

         

 

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

69


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Fundação CESP in the estimated amount of R$ 1,280,004. 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.

With respect to labor contingencies, the Group informs that, as described in note 22 to the financial statements as of December 31, 2017, there is a discussion regarding the possibility of changing the adjustment index adopted by the Labor Court, and the discussion status has not changed 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

 

March 31, 2018

 

December 31, 2017

 

March 31, 2018

 

December 31, 2017

Consumers and concessionaires

  113,722

 

  93,068

 

  45,129

 

  44,473

Energy efficiency program - PEE

  190,541

 

  186,621

 

  104,669

 

  110,931

Research & Development - P&D

  99,453

 

  103,308

 

  75,676

 

  68,780

EPE / FNDCT / PROCEL

  23,762

 

  15,612

 

-

 

  -

Reversion fund

  -

 

  -

 

  17,322

 

  17,750

Advances

  366,187

 

  300,214

 

  23,408

 

  22,255

Tariff discounts - CDE

  23,684

 

  25,040

 

-

 

  -

Provision for socio environmental costs

  16,415

 

  16,360

 

  99,718

 

  107,814

Payroll

  13,967

 

  20,747

 

-

 

  -

Profit sharing

  96,889

 

  80,518

 

  14,724

 

  16,273

Collection agreements

  74,585

 

  72,483

 

-

 

  -

Guarantees

  -

 

  -

 

  5,738

 

5,959

Business combination

7,046

 

6,927

 

-

 

  -

Others

  34,896

 

  40,408

 

  43,410

 

  32,654

Total

1,061,146

 

  961,306

 

  429,795

 

  426,889

 

 

 

 

 

 

 

 


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 March 31, 2018 and December 31, 2017 is shown below:

 

 

 

Number of shares

 

 

March 31, 2018

 

December 31, 2017

Shareholders

 

Common shares

 

Interest %

 

Common shares

 

Interest %

State Grid Brazil Power Participações S.A.

 

      730,435,698

 

71.76%

 

      730,435,698

 

71.76%

Camargo Correa S.A.

 

              27,435

 

0.00%

 

              27,435

 

0.00%

ESC Energia S.A.

 

      234,086,204

 

23.00%

 

      234,086,204

 

23.00%

Members of the Executive Board

 

                  189

 

0.00%

 

                  189

 

0.00%

Other shareholders

 

        53,365,220

 

5.24%

 

        53,365,220

 

5.24%

Total

 

   1,017,914,746

 

100.00%

 

   1,017,914,746

 

100.00%

 

 

 

 

 

 

 

 

 

The details of the items included in equity are described in the financial statements for the year ended December 31, 2017.

70


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

( 24 )   EARNINGS PER SHARE

 

Earnings per share – basic and diluted

The calculation of the basic and diluted earnings per share as the 1st quarter ended at March 31, 2018 and 2017 was based on the profit of the period attributable to controlling shareholders and the weighted average number of common shares outstanding period:

 

 

1st quarter 2018

 

1st quarter 2017

Numerator

 

 

 

 

Profit attributable to controlling shareholders

 

             443,783

 

             245,886

Denominator

 

 

 

 

Weighted average number of shares held by shareholders

 

    1,017,914,746

 

    1,017,914,746

 

 

 

 

 

Earnings per share - basic and diluted

 

0.44

 

0.24


For the periods ended March 31, 2018 and 2017, the calculation of earnings per share was not affected by the effects of debentures convertible into shares and by share-based payment of the indirect subsidiary CPFL Renováveis, due to the fact that they presented antidilutive effects.

( 25 )   NET OPERATING REVENUE

 

 

Consolidated

 

Number of Consumers

 

In GWh

 

R$ thousand

 

 

Revenue from Electric Energy Operations

March 31,
2018

 

December 31, 2017

 

1st quarter

2018

 

1st quarter

2017

 

1st quarter

2018

 

1st quarter

2017

Consumer class

 

 

 

 

 

 

 

 

 

 

 

Residential

8,383,834

 

8,210,466

 

5,291

 

5,129

 

3,117,458

 

3,177,388

Industrial

  59,498

 

  60,822

 

3,375

 

3,459

 

1,159,349

 

1,243,388

Commercial

  542,582

 

  548,218

 

2,753

 

2,829

 

1,434,467

 

1,526,521

Rural

  360,154

 

  355,693

 

1,236

 

1,099

 

  352,401

 

  329,769

Public administration

  60,704

 

  61,104

 

  374

 

  367

 

  192,918

 

  200,059

Public lighting

  11,323

 

  11,105

 

  504

 

  480

 

  154,050

 

  154,790

Public services

9,858

 

9,693

 

  571

 

  497

 

  238,326

 

  239,845

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

  -

 

  -

 

  -

 

  -

 

  -

 

(24,279)

Billed

9,427,953

 

9,257,101

 

  14,104

 

  13,860

 

6,648,969

 

6,847,482

Own consumption

  -

 

  -

 

  9

 

  9

 

  -

 

  -

Unbilled (net)

  -

 

  -

 

 

 

  -

 

  98,474

 

(25,630)

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

  -

 

  -

 

  -

 

  -

 

  (2,942,052)

 

  (2,591,483)

Electricity sales to final consumers

9,427,953

 

9,257,101

 

  14,113

 

  13,869

 

3,805,391

 

4,230,369

 

 

 

 

 

 

 

 

 

 

 

 

Furnas Centrais Elétricas S.A.

 

 

 

 

  709

 

  746

 

  134,086

 

  134,600

Other concessionaires and licensees

 

 

 

 

3,570

 

3,217

 

  698,245

 

  571,552

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

 

 

 

 

  -

 

  -

 

(17,855)

 

(12,476)

Spot market energy

 

 

 

 

  573

 

1,421

 

  166,128

 

  244,650

Electricity sales to wholesalers

 

 

 

 

4,852

 

5,385

 

  980,604

 

  938,326

 

 

 

 

 

 

 

 

 

 

 

 

Revenue due to Network Usage Charge - TUSD - Captive Consumers

 

 

 

 

 

 

 

 

2,959,906

 

2,603,958

Revenue due to Network Usage Charge - TUSD - Free Consumers

 

 

 

 

 

 

 

 

  579,240

 

  526,309

(-) Compensation for non-compliance with technical indicators

 

 

 

 

 

 

 

 

(16,380)

 

  -

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

 

 

 

 

 

 

 

 

  -

 

  (6,797)

Revenue from construction of concession infrastructure

 

 

 

 

 

 

 

 

  370,562

 

  416,039

Sector financial asset and liability (Note 8)

 

 

 

 

 

 

 

 

  373,547

 

(565,003)

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

 

 

 

 

 

 

 

 

  64,857

 

  48,923

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

 

 

 

 

 

  376,741

 

  423,974

Other revenues and income

 

 

 

 

 

 

 

 

  143,028

 

  114,287

Other operating revenues

 

 

 

 

 

 

 

 

4,851,501

 

3,561,690

Total gross operating revenue

 

 

 

 

 

 

 

 

9,637,497

 

8,730,385

Deductions from operating revenues

 

 

 

 

 

 

 

 

 

 

 

ICMS

 

 

 

 

 

 

 

 

  (1,424,269)

 

  (1,467,326)

PIS

 

 

 

 

 

 

 

 

(149,685)

 

(135,803)

COFINS

 

 

 

 

 

 

 

 

(689,516)

 

(625,490)

ISS

 

 

 

 

 

 

 

 

  (3,528)

 

  (2,922)

Global reversal reserve - RGR

 

 

 

 

 

 

 

 

(247)

 

(716)

Energy development account - CDE

 

 

 

 

 

 

 

 

(897,671)

 

(830,156)

Research and development and energy efficiency programs

 

 

 

 

 

(48,593)

 

(41,102)

PROINFA

 

 

 

 

 

 

 

 

(35,275)

 

(43,905)

Tariff flags and others

 

 

 

 

 

 

 

 

  (7,096)

 

(36,603)

IPI

 

 

 

 

 

 

 

 

(1)

 

(43)

FUST and FUNTEL

 

 

 

 

 

 

 

 

  -

 

(11)

Others

 

 

 

 

 

 

 

 

  (6,962)

 

  (7,531)

 

 

 

 

 

 

 

 

 

  (3,262,842)

 

  (3,191,606)

 

 

 

 

 

 

 

 

 

 

 

 

Net operating revenue

 

 

 

 

 

 

 

 

6,374,654

 

5,538,779

 

 

 

 

               

 

71


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

25.1   Adjustment of revenues from excess demand and excess reactive power

The tariff regulation procedure (Proret), sub item 2.7 Other revenues, approved by ANEEL Normative Resolution No. 463 of November 22, 2011, determined that revenues of the distribution subsidiaries received as a result of excess demand and excess reactive power, from the contractual tariff review date for the 3rd periodic tariff review, must be accounted for as special obligations, in specific sub-accounts, and will be amortized from the next tariff review. Beginning May 2015 for subsidiary CPFL Piratininga, September 2015 for subsidiary Companhia Jaguari de Energia (CPFL Santa Cruz) and November 2017 for subsidiaries CPFL Paulista and RGE Sul due to the 4th cycle of periodic tariff review, this special obligation started being amortized and the new values from the excess demand and excess reagents started being recognized in sector financial assets and liabilities and will only be amortized when the 5th cycle of periodic tariff review is approved.

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

 

 

 

 

2018

 

 

 

2017

 

 

Subsidiary

 

Month

 

RTA

 

Effect perceived by consumers (a)

 

RTA / RTP

 

Effect perceived by consumers (a)

CPFL Paulista

 

April (b)

 

12.68%

 

16.90%

 

-0.80%

 

-10.50%

CPFL Piratininga

 

October

 

(c)

 

(c)

 

7.69%

 

17.28%

RGE

 

June

 

(c)

 

(c)

 

3.57%

 

5.00%

RGE Sul

 

April (b)

 

18.45%

 

22.47%

 

-0.20%

 

-6.43%

Companhia Luz e Força Santa Cruz

 

March

 

(c)

 

(c)

 

-1.28%

 

-8.42%

CPFL Leste Paulista

 

March

 

(c)

 

(c)

 

0.77%

 

-4.15%

Companhia Jaguari de Energia (CPFL Santa Cruz)

 

March

 

5.71%

 

(c)

 

2.05%

 

-2.56%

CPFL Sul Paulista

 

March

 

(c)

 

(c)

 

1.63%

 

-10.73%

CPFL Mococa

 

March

 

(c)

 

(c)

 

1.65%

 

-3.28%

(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.

(b)   As described in note 34, in April 2018 the subsidiaries CPFL Paulista and RGE Sul adjusted their tariffs.

(c)   The respective adjustments for 2017 have not yet occurred.

(d)   As mentioned in note 12.5.2, at March 31, 2018, the EGM approved the grouping of subsidiaries Companhia Luz e Força Santa Cruz, Companhia Leste Paulista de Energia, Companhia Jaguari de Energia, Companhia Sul Paulista de Energia e Companhia Luz and Força de Mococa In accordance with Normative Resolution 716, of May 3, 2016, until the first tariff review of the grouped concessionaire, which will take place in March 2021, ANEEL may apply the procedure that divides over time the variation in the tariffs of the former concessions and the unified tariff. This occurred in the tariff adjustment of March 2018.

On March 13, 2018, the ANEEL published REH No. 2,376, which set the average annual tariff adjustment of Companhia Jaguari de Energia (“CPFL Santa Cruz”), effective as of March 22, 2018, at 5.71%, 4.41% regarding the economic tariff adjustment and 1.30% regarding relevant financial components. The average effect to be perceived by consumers of the original concessions are:

 

Jaguari

 

Mococa

 

Leste Paulista

 

Sul Paulista

 

Santa Cruz

Effect perceived by consumers

21.15%

 

3.40%

 

7.03%

 

7.50%

 

5.32%

 

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

All details on the CDE contribution are described in notes 25.3 to the financial statements as of December 31, 2017.

In the first quarter of 2018, a revenue of R$376,741 was recognized (R$423,974 in the first quarter of 2017), considering (i) R$21,114 for low-income subsidy (R$28,034 in the first quarter of 2017), (ii) R$350,771 for

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Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

other tariff discounts (R$338,425 in the first quarter of 2017), and (iii) R$4,857 for tariff discounts – CCRBT injunctions and subsidy (R$57,514 in the first quarter of 2018); These items were recorded as a balancing item to other receivables in line item Receivables – Eletrobrás (note 11) and other payables in line item Tariff discounts – CDE (note 22.)

 

25.4  Tariff flags

The system of Tariff Flags application is described in note 25.4 to the financial statements as of December 31, 2017.

In the first quarter of 2018, ANEEL approved the tariff flags billed for November and December 2017 and January 2018. The amount approved in this period was R$350,508. Out of this amount, R$297,354, referring to November and December 2017, were used to offset part of the sector financial asset and liability (note 8) and R$53,154, referring to the January 2018 approval, due to Closing Order No. 4,356 of December 22, 2017, were classified as sector financial asset. The amount of R$588, with respect to the tariff flag billed for February and March 2018, was not approved and is recorded in regulatory fees (note 17.)

 

25.5    Energy development account (“CDE”)

ANEEL, by means of Ratifying Resolution (“REH”) No. 2,358 of December 19, 2017, amended by REH No. 2,368 of February 9, 2018, established the definitive annual quotas of CDE for the year 2018. 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 October 2017 to September 2018.

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Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

( 26 )   COST OF ELECTRIC ENERGY

 

 

 

Consolidated

 

 

GWh

 

R$ thousand

Electricity purchased for resale

 

1st quarter 2018

 

1st quarter 2017

 

1st quarter 2018

 

1st quarter 2017

Itaipu Binacional

 

         2,739

 

         2,908

 

      558,432

 

      557,997

PROINFA

 

              -  

 

              -  

 

       85,875

 

       70,885

Energy purchased through auction in  the regulated market and bilateral contracts / Spot market

 

       11,886

 

       15,498

 

   2,975,166

 

   2,692,811

PIS and COFINS credit

 

              -  

 

              -  

 

     (318,198)

 

     (303,309)

Subtotal

 

       18,465

 

       19,368

 

   3,301,275

 

   3,018,384

 

 

 

 

 

 

 

 

 

Electricity network usage charge

 

 

 

 

 

 

 

 

Basic network charges

 

 

 

 

 

      567,440

 

      247,875

Transmission from Itaipu

 

 

 

 

 

       62,191

 

       14,893

Connection charges

 

 

 

 

 

       32,196

 

       30,037

Charges for use of the distribution system

 

 

 

 

 

         9,567

 

       11,286

System service charges - ESS net of CONER pass through

 

 

 

 

 

       46,875

 

      (82,663)

Reserve energy charges - EER

 

 

 

 

 

       65,914

 

              -  

PIS and COFINS credit

 

 

 

 

 

      (71,736)

 

      (19,158)

Subtotal

 

 

 

 

 

      712,446

 

      202,270

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

   4,013,721

 

   3,220,654

 

 

 

 

 

 

 

 

 

 

( 27 )      OPERATING COSTS AND EXPENSES

 

 

Parent company

 

Operating expense

 

General and administrative

 

1st quarter 2018

 

1st quarter 2017

Personnel

           6,565

 

         14,112

Materials

                35

 

                36

Third party services

           1,873

 

           2,158

Depreciation and amortization

                48

 

                54

Others

              724

 

              806

Leases and rentals

                 1

 

              198

Publicity and advertising

                 2

 

              209

Donations, contributions and subsidies

                -  

 

                15

Others

              721

 

              385

Total

           9,246

 

         17,166

 

 

 

 

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Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

 

 

Consolidated

 


Operating costs

 

Services rendered to third parties

 

Operating expenses

 

 

 

 

 

 

Sales

 

General and administrative

 

Other

 

Total

 

1st quarter 2018

 

1st quarter 2017

 

1st quarter 2018

 

1st quarter 2017

 

1st quarter 2018

 

1st quarter 2017

 

1st quarter 2018

 

1st quarter 2017

 

1st quarter 2018

 

1st quarter 2017

 

1st quarter 2018

 

1st quarter 2017

Personnel

  216,403

 

203,595

 

-

 

  -

 

40,701

 

42,524

 

80,641

 

86,364

 

  -

 

  -

 

  337,745

 

  332,483

Private Pension Plans

22,477

 

28,831

 

-

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

22,477

 

28,831

Materials

56,926

 

48,611

 

191

 

  139

 

1,938

 

2,594

 

3,567

 

3,751

 

  -

 

  -

 

62,622

 

55,095

Third party services

64,313

 

67,335

 

613

 

  504

 

37,984

 

43,638

 

78,022

 

73,776

 

  -

 

  -

 

  180,932

 

  185,253

Depreciation and amortization

  296,668

 

  277,980

 

-

 

  -

 

1,070

 

1,326

 

20,938

 

25,017

 

  -

 

  -

 

  318,676

 

  304,323

Costs of infrastructure construction

  -

 

  -

 

  370,559

 

  414,627

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

  370,559

 

  414,627

Others

13,146

 

43,374

 

(2)

 

  (3)

 

46,946

 

59,136

 

20,707

 

72,656

 

96,532

 

82,877

 

  177,329

 

  258,040

Collection fees

  -

 

2,303

 

-

 

  -

 

20,106

 

16,518

 

  -

 

  -

 

  -

 

  -

 

20,106

 

18,821

Allowance for doubtful accounts

  -

 

  -

 

-

 

  -

 

26,420

 

46,696

 

  -

 

  -

 

  -

 

  -

 

26,420

 

46,696

Leases and rentals

14,448

 

12,354

 

-

 

  -

 

  -

 

  28

 

3,347

 

4,635

 

  -

 

  -

 

17,795

 

17,017

Publicity and advertising

  -

 

1

 

-

 

  -

 

  -

 

  -

 

2,265

 

2,884

 

  -

 

  -

 

2,265

 

2,885

Legal, judicial and indemnities

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

12,284

 

55,119

 

  -

 

  -

 

12,284

 

55,119

Donations, contributions and subsidies

  13

 

  25

 

-

 

  -

 

  -

 

2

 

1,127

 

1,128

 

  -

 

  -

 

1,140

 

1,155

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

  -

 

2,944

 

-

 

  -

 

  -

 

  -

 

  -

 

  -

 

30,898

 

10,823

 

30,898

 

13,767

Amortization of concession intangible asset

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  -

 

  -

 

71,508

 

72,116

 

71,508

 

72,116

Fee for the use of water

2,192

 

2,265

 

-

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

2,192

 

2,265

Impairment reversal

  -

 

  -

 

-

 

  -

 

  -

 

  -

 

  -

 

  -

 

  (5,837)

 

  -

 

  (5,837)

 

  -

Others

  (3,507)

 

23,483

 

(2)

 

  (3)

 

  420

 

  (4,108)

 

1,684

 

8,890

 

(37)

 

(62)

 

  (1,442)

 

28,200

Total

  669,933

 

  669,727

 

  371,361

 

  415,267

 

  128,640

 

  149,218

 

  203,875

 

  261,564

 

96,533

 

82,877

 

1,470,342

 

1,578,653

 

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Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

( 28 )   FINANCE INCOME (COSTS)

 

 

Parent company

 

Consolidated

 

1st quarter 2018

 

1st quarter 2017

 

1st quarter 2018

 

1st quarter 2017

Financial income

 

 

 

 

 

 

 

Income from financial investments

191

 

1,073

 

66,386

 

160,204

Late payment interest and fines

  -

 

1

 

69,523

 

73,435

Adjustment for inflation of tax credits

213

 

1,198

 

2,540

 

2,526

Adjustment for inflation of escrow deposits

2

 

10

 

8,804

 

13,237

Adjustment for inflation and exchange rate changes

  -

 

8

 

22,742

 

30,406

Discount on purchase of ICMS credit

  -

 

  -

 

6,732

 

2,922

Adjustments to the sector financial asset (Note 8)

  -

 

  -

 

7,105

 

  -

PIS and COFINS on other finance income

  (346)

 

  (305)

 

  (11,666)

 

  (14,659)

Others

7,024

 

3,780

 

24,986

 

12,641

Total

7,084

 

5,764

 

197,151

 

280,711

 

 

 

 

 

 

 

 

Financial expenses

 

 

 

 

 

 

 

Interest on debts

  (3,855)

 

  (22,951)

 

  (343,232)

 

  (485,294)

Adjustment for inflation and exchange rate changes

  (109)

 

  (23)

 

  (119,132)

 

  (183,606)

(-) Capitalized interest

  -

 

  -

 

6,209

 

24,157

Adjustments to the sector financial liability (Note 8)

  -

 

  -

 

  (4,663)

 

  (27,175)

Use of public asset

  -

 

  -

 

  (3,802)

 

  (3,386)

Others

  (1,345)

 

  (132)

 

  (40,052)

 

  (41,544)

Total

  (5,309)

 

  (23,106)

 

  (504,671)

 

  (716,850)

 

 

 

 

 

 

 

 

Finance expense, net

1,775

 

  (17,341)

 

  (307,519)

 

  (436,138)

 

 

 

 

 

 

 

 

               

 

Interests were capitalized at an average rate of 8.05% p.a. in the 1st quarter of 2018 (10.63% p.a. in the 1st quarter of 2017) on qualifying assets, in accordance with CPC 20 (R1) and IAS 23.

In line item of adjustment for inflation and exchange rate changes, the expense includes the effects of gains of R$ 16,528 in the 1st quarter of 2018 (loss of R$ 290,752 in the 1st quarter of 2017) on derivative instruments (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.

As of 2018, due to the way the Group’s new management monitors the segment results, intangible assets acquired in business combination that were previously allocated to the respective segments started to be presented in the parent company in which it is recorded, in the segment “Others.” In order to keep the comparability, 2017' information are been disclosed in the same criteria.

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

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Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

 1st quarter 2018

Distribution

 

Generation

(conventional source)

 

Generation

(renewable source)

 

Commercialization

 

Services

 

Total

 

Other (*)

 

Elimination

 

Total

Net operating revenue

5,199,141

 

170,270

 

  277,556

 

  709,823

 

17,864

 

6,374,654

 

  -

 

  -

 

6,374,654

(-) Intersegment revenues

1,617

 

111,185

 

  105,997

 

  111

 

93,795

 

  312,705

 

  -

 

(312,705)

 

  -

Cost of electric energy

  (3,450,874)

 

  (18,550)

 

  (70,466)

 

(691,078)

 

  -

 

  (4,230,967)

 

  -

 

  217,246

 

  (4,013,721)

Operating costs and expenses

(957,507)

 

  (23,245)

 

  (85,301)

 

(11,093)

 

  (89,101)

 

  (1,166,249)

 

  (9,367)

 

95,459

 

  (1,080,157)

Depreciation and amortization

(180,504)

 

  (30,147)

 

(157,687)

 

(612)

 

  (5,504)

 

(374,455)

 

  (15,730)

 

  -

 

(390,184)

Income from electric energy service

  611,873

  

209,513

 

70,099

 

  7,151

 

17,053

 

  915,688

 

  (25,096)

 

  -

 

  890,592

Equity

  -

 

85,356

 

  -

 

-

 

  -

 

85,356

 

  -

 

  -

 

85,356

Finance income

  136,438

 

20,463

 

30,140

 

  10,846

 

1,778

 

  199,664

 

7,096

 

  (9,609)

 

  197,151

Finance expenses

(241,145)

 

  (88,328)

 

(159,354)

 

(18,139)

 

  (2,005)

 

(508,971)

 

  (5,309)

 

9,609

 

(504,671)

Profit (loss) before taxes

  507,165

 

227,003

 

  (59,115)

 

(142)

 

16,826

 

  691,738

 

  (23,309)

 

  -

 

  668,428

Income tax and social contribution

(186,611)

 

  (45,123)

 

  (13,406)

 

(295)

 

  (3,857)

 

(249,292)

 

  267

 

  -

 

(249,024)

Profit (loss) for the year

  320,554

 

181,880

 

  (72,521)

 

(436)

 

12,969

 

  442,446

 

  (23,042)

 

  -

 

  419,404

Total assets (**)

21,868,519

 

  7,210,593

 

12,663,107

 

1,206,221

 

  459,693

 

43,408,132

 

9,293,449

 

  (11,535,222)

 

41,166,359

Purchases of PP&E and intangible assets

  366,374

 

1,256

 

44,049

 

  794

 

13,220

 

  425,693

 

  221

 

 

 

  425,914

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1st quarter 2017(**)

Distribution

 

Generation

(conventional source)

  

Generation

(renewable source)

 

Commercialization

 

Services

 

Total

 

Other (*)

 

Elimination

 

Total

Net operating revenue

4,456,742

 

192,607

 

  253,536

 

  616,809

 

18,323

 

5,538,018

 

  761

 

  -

 

5,538,779

(-) Intersegment revenues

2,301

 

106,611

 

  117,397

 

  3,757

 

82,731

 

  312,796

 

  -

 

(312,796)

 

  -

Cost of electric energy

  (2,807,321)

 

  (21,973)

 

  (53,271)

 

(569,201)

 

  -

 

  (3,451,765)

 

  -

 

  231,111

 

  (3,220,654)

Operating costs and expenses

  (1,025,878)

 

  (61,401)

 

  (81,191)

 

(10,815)

 

  (83,404)

 

  (1,262,690)

 

  (21,209)

 

81,685

 

  (1,202,214)

Depreciation and amortization

(173,640)

 

  (30,026)

 

(150,833)

 

(907)

 

  (4,412)

 

(359,818)

 

  (16,621)

 

  -

 

(376,439)

Income from electric energy service

  452,206

 

185,818

 

85,637

 

  39,643

 

13,237

 

  776,541

 

  (37,069)

 

  -

 

  739,472

Equity

  -

 

79,709

 

  -

 

-

 

  -

 

79,709

 

  -

 

  -

 

79,709

Finance income

  177,375

 

50,677

 

38,890

 

  7,103

 

2,580

 

  276,626

 

8,817

 

  (4,731)

 

  280,711

Finance expenses

(358,873)

 

  (151,604)

 

(167,044)

 

(18,250)

 

  (1,187)

 

(696,958)

 

  (24,623)

 

4,731

 

(716,850)

Profit (loss) before taxes

  270,708

 

164,601

 

  (42,517)

 

  28,496

 

14,631

 

  435,918

 

  (52,875)

 

  -

 

  383,043

Income tax and social contribution

(105,350)

 

  (27,559)

 

  (12,146)

 

(9,670)

 

  (3,901)

 

(158,625)

 

7,703

 

  -

 

(150,922)

Profit (loss) for the year

  165,358

 

137,042

 

  (54,664)

 

  18,826

 

10,730

 

  277,293

 

  (45,172)

 

  -

 

  232,121

Total assets (**)

22,040,918

 

  7,113,427

 

12,856,002

 

1,378,814

 

  454,961

 

43,844,122

 

9,103,854

 

  (11,665,064)

 

41,282,912

Purchases of PP&E and intangible assets

  347,451

 

286

 

  282,681

 

  119

 

12,036

 

  642,573

 

  556

 

  -

 

  643,129

 

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

(**)For total assets, the balances refer to December 31, 2017.

 

( 30 )   RELATED PARTY TRANSACTIONS

The Company’s controlling shareholders are as follows:

·   State Grid Brazil Power Participações S.A.

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

·   ESC Energia S.A.

Subsidiary of State Grid Brazil Power Participações S.A.

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

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

The main transactions are listed below:

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

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

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

77


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

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 1st quarter of 2018, in accordance with CVM Decision 560/2008, was R$ 19,893 (R$ 26,050 in the 1st quarter of 2017). This amount comprises R$ 19,403 (R$ 25,750 in the 1st quarter of 2017) in respect of short-term benefits and R$ 489 (R$ 300 in the 1st quarter of 2017) of post-employment benefits, and refers to the amount recognized on an accrual basis.

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

 

Transactions involving controlling shareholders, entities under common control or  significant influence and joint ventures:

 

 

 Consolidated

 

Asset

 

Liability

 

Income

 

Expense

 

March 31, 2018

 

December 31, 2017

 

March 31, 2018

 

December 31, 2017

 

1st quarter 2018

 

1st quarter 2017

 

1st quarter 2018

 

1st quarter 2017

Advances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BAESA – Energética Barra Grande S.A.

  -

 

  -

 

  682

 

  691

 

  -

 

  -

 

  -

 

  -

Foz do Chapecó Energia S.A.

  -

 

  -

 

  967

 

  979

 

  -

 

  -

 

  -

 

  -

ENERCAN - Campos Novos Energia S.A.

  -

 

  -

 

1,198

 

1,212

 

  -

 

  -

 

  -

 

  -

EPASA - Centrais Elétricas da Paraiba

  -

 

  -

 

  435

 

  440

 

  -

 

  -

 

  -

 

  -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy purchases and sales, and charges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Entities under common control (State Grid Corporation of China' subsidiaries)

  -

 

  -

 

  448

 

13,330

 

  -

 

  -

 

38,622

 

19,880

BAESA – Energética Barra Grande S.A.

  -

 

  -

 

1,543

 

13,169

 

  -

 

  -

 

3,847

 

10,200

Foz do Chapecó Energia S.A.

  -

 

 

 

39,524

 

37,415

 

  -

 

  -

 

99,319

 

92,528

ENERCAN - Campos Novos Energia S.A.

  836

 

  823

 

49,708

 

51,381

 

  -

 

2,174

 

68,961

 

69,793

EPASA - Centrais Elétricas da Paraiba

 

 

 

 

22,137

 

19,458

 

  -

 

  -

 

30,727

 

35,447

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BAESA – Energética Barra Grande S.A.

  3

 

  153

 

  -

 

  -

 

  401

 

  387

 

  -

 

  -

Foz do Chapecó Energia S.A.

  4

 

  2

 

  -

 

  -

 

  440

 

  292

 

  -

 

  -

ENERCAN - Campos Novos Energia S.A.

  -

 

  152

 

  -

 

  -

 

  4

 

  410

 

  -

 

  -

EPASA - Centrais Elétricas da Paraíba S.A.

  479

 

  416

 

  -

 

  -

 

  73

 

  53

 

  -

 

  -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intragroup loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EPASA - Centrais Elétricas da Paraíba S.A.

  -

 

  -

 

  -

 

  -

 

  1

 

  327

 

  -

 

  -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends and interest on capital

 

 

 

 

 

 

 

 

 

 

  -

 

  -

 

  -

BAESA – Energética Barra Grande S.A.

  108

 

  108

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

Chapecoense Geração S.A.

32,734

 

32,734

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

ENERCAN - Campos Novos Energia S.A.

21,184

 

21,184

 

  -

 

  -

 

  -

 

  -

 

  -

 

  -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Others

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Instituto CPFL

  9

 

  -

 

  203

 

  -

 

  -

 

  -

 

1,018

 

  457

   

( 31 )      RISK MANAGEMENT

 

The risk management structure and the main risk factors that affect the Group’s business are disclosed in note 32 to the financial statements for the year ended December 31, 2017.

 

78


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

( 32 )   FINANCIAL INSTRUMENTS

The main financial instruments, at fair value and/or the carrying amount is significantly different of the respective fair value, classified in accordance with the Group’s accounting practices, are:

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 March 31, 2018

 

Note

 

Category

 

Measurement

Level (*)

 

Carrying amount

 

Fair value

Assets

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalent

5

 

(a)

 

(2)

Level 1

 

         2,041,232

 

         2,041,232

Cash and cash equivalent

5

 

(a)

 

(2)

Level 2

 

            987,746

 

            987,746

Derivatives

32

 

(a)

 

(2)

Level 2

 

            401,843

 

            401,843

Derivatives - Zero-cost collar

32

 

(a)

 

(2)

Level 3

 

              56,441

 

              56,441

Concession financial asset - distribution

10

 

(a)

 

(2)

Level 3

 

         6,577,655

 

         6,577,655

 

 

 

 

 

 

 

 

       10,064,917

 

       10,064,917

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

Borrowings - principal and interest

16

 

(b)

 

(1)

Level 2 (***)

 

         6,070,936

 

         5,980,993

Borrowings - principal and interest (**)

16

 

(a)

 

(2)

Level 2

 

         4,027,291

 

         4,027,291

Debentures - Principal and interest

17

 

(b)

 

(1)

Level 2 (***)

 

       10,708,691

 

       10,632,465

Derivatives

32

 

(a)

 

(2)

Level 2

 

              78,487

 

              78,487

 

 

 

 

 

 

 

 

       20,885,405

 

       20,719,236

(*) 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$ 68,935 in the 1st quarter of 2018 (a loss of R$ 55,887 in the 1st quarter of 2017).

(***) 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) - Other financial liabilities

(2) - Measured at fair value

 

 

 

 

 

 

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 – CDE, (v) concession financial asset – transmission companies, (vi) pledges, funds and restricted deposits, (vii) services rendered to third parties, (viii) collection agreements and (ix) sector financial asset;

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

In addition, in the 1st quarter of 2018 there were no transfers between the fair value hierarchy levels.

 

a)    Measurement of financial instruments

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

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

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

The three levels of the fair value hierarchy are:

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

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

 

79


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

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

 

As the distribution concessionaries classified the respective concession financial assets as fair value through profit or loss, 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 at the 1st quarter are R$ 66,637 (R$ 48,923 in the 1st quarter of 2017) 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 “Investments at cost” in the interim financial statements the 5.94% interest held by the indirect subsidiary Paulista Lajeado Energia S.A. in the total capital of Investco S.A. (“Investco”), in the form of 28,154,140 common shares and 18,593,070 preferred shares. As Investco’s shares are not traded on the stock exchange and the main objective of its operations is to generate electric energy for commercialization by the shareholders holding the concession, the Company opted to recognize the investment at cost.

 

b)    Derivatives

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

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

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

At March 31, 2018, the Group had the following swap transactions, all traded on the over-the-counter market:

 

 

 

Fair values (carrying amounts)

 

 

 

 

 

 

 

 

 

 

Company / strategy / counterparts

 

Assets

 

Liabilities

 

Fair value, net

 

Values at cost, net (3)

 

Gain (loss) on mark to market

 

Currency / index

  Maturity range  

Notional

Derivatives to hedge debts designated at fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange rate hedge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPFL Paulista

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank of Tokyo-Mitsubishi

 

  24,512

 

-

 

24,512

 

24,692

 

(180)

 

Dollar

 

Mar 2019

 

  117,400

Bank of America Merrill Lynch

 

  33,978

 

-

 

33,978

 

33,547

 

  431

 

Dollar

 

Mar 2019

 

  116,600

J.P.Morgan

 

  16,989

 

-

 

16,989

 

16,774

 

  215

 

Dollar

 

Mar 2019

 

  58,300

J.P.Morgan

 

  14,945

 

-

 

14,945

 

15,448

 

(503)

 

Dollar

 

Jan 2019

 

  67,613

Bank of Tokyo-Mitsubishi

 

  22,702

 

-

 

22,702

 

23,679

 

(977)

 

Dollar

 

Feb 2020

 

  142,735

Bank of America Merrill Lynch

 

  2,306

 

-

 

  2,306

 

  2,169

 

  138

 

Dollar

 

Oct 2018

 

  329,500

Bradesco

 

-

 

(2,159)

 

(2,159)

 

(3,514)

 

  1,354

 

Dollar

 

May 2021

 

  59,032

Bank of America Merrill Lynch

 

-

 

(1,861)

 

(1,861)

 

(3,501)

 

  1,640

 

Dollar

 

May 2021

 

  59,032

Citibank

 

-

 

(2,000)

 

(2,000)

 

(3,507)

 

  1,507

 

Dollar

 

May 2021

 

  59,032

Citibank

 

-

 

(2,036)

 

(2,036)

 

(3,531)

 

  1,495

 

Dollar

 

May 2021

 

  59,032

 

 

  115,432

 

(8,056)

 

107,376

 

102,256

 

  5,120

 

 

 

 

 

 

CPFL Piratininga

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Citibank

 

  50,102

 

-

 

50,102

 

49,544

 

  558

 

Dollar

 

Mar 2019

 

  117,250

Bradesco

 

  27,810

 

-

 

27,810

 

28,158

 

(348)

 

Dollar

 

Apr 2018

 

  55,138

J.P.Morgan

 

  27,811

 

-

 

27,811

 

28,160

 

(348)

 

Dollar

 

Apr 2018

 

  55,138

Citibank

 

  39,300

 

-

 

39,300

 

38,191

 

  1,109

 

Dollar

 

Jan 2020

 

  169,838

Bradesco

 

-

 

(2,159)

 

(2,159)

 

(3,514)

 

  1,354

 

Dollar

 

May 2021

 

  59,032

Bank of America Merrill Lynch

 

-

 

(1,861)

 

(1,861)

 

(3,501)

 

  1,640

 

Dollar

 

May 2021

 

  59,032

Citibank

 

-

 

(2,000)

 

(2,000)

 

(3,507)

 

  1,507

 

Dollar

 

May 2021

 

  59,032

Bank of America Merrill Lynch

 

-

 

(906)

 

  (906)

 

(1,761)

 

  855

 

Dollar

 

May 2021

 

  29,516

Citibank

 

-

 

(1,018)

 

(1,018)

 

(1,765)

 

  747

 

Dollar

 

May 2021

 

 29,516

 

 

  145,023

 

(7,944)

 

137,079

 

130,004

 

  7,074

 

 

 

 

 

 

RGE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank of Tokyo-Mitsubishi

 

  1,462

 

-

 

  1,462

 

  1,593

 

(130)

 

Dollar

 

Mar 2022

 

  158,592

Bank of Tokyo-Mitsubishi

 

  103,930

 

-

 

103,930

 

105,138

 

(1,209)

 

Dollar

 

May 2018

 

  168,346

Bank of Tokyo-Mitsubishi

 

  1,188

 

-

 

  1,188

 

  2,987

 

(1,799)

 

Dollar

 

Oct 2018

 

  169,260

Bradesco

 

-

 

(2,159)

 

(2,159)

 

(3,514)

 

  1,354

 

Dollar

 

May 2021

 

  59,032

Bank of America Merrill Lynch

 

-

 

(1,861)

 

(1,861)

 

(3,501)

 

  1,640

 

Dollar

 

May 2021

 

  59,032

Citibank

 

-

 

(2,000)

 

(2,000)

 

(3,507)

 

  1,507

 

Dollar

 

May 2021

 

  59,032

Bank of America Merrill Lynch

 

-

 

(1,812)

 

(1,812)

 

(3,521)

 

  1,710

 

Dollar

 

May 2021

 

  59,032

 

 

  106,580

 

(7,832)

 

98,748

 

95,675

 

  3,073

 

 

 

 

 

 

 

80


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Companhia Jaguari de Energia (CPFL Santa Cruz)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Scotiabank

 

-

 

(85)

 

  (85)

 

381

 

(466)

 

CDI

 

Jul 2019

 

  65,936

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPFL Brasil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Scotiabank

 

-

 

(741)

 

  (741)

 

  (527)

 

(214)

 

Dollar

 

Aug 2018

 

  45,360

Scotiabank

 

  6,943

 

-

 

  6,943

 

15,917

 

(8,974)

 

Dollar

 

Sep 2020

 

  249,989

Scotiabank

 

  1,142

 

-

 

  1,142

 

  6,653

 

(5,510)

 

Dollar

 

Oct 2020

 

  150,011

 

 

  8,085

 

(741)

 

  7,344

 

22,043

 

(14,699)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPFL Geração

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Scotiabank

 

-

 

(151)

 

  (151)

 

676

 

(828)

 

Dollar

 

Jul 2019

 

  117,036

Votorantim

 

-

 

(2,204)

 

(2,204)

 

(4,397)

 

  2,193

 

Dollar

 

Jun 2019

 

  104,454

Bradesco

 

  1,214

 

-

 

  1,214

 

736

 

  478

 

Dollar

 

Sep 2019

 

  32,636

Citibank

 

  4,353

 

-

 

  4,353

 

  3,008

 

  1,345

 

Dollar

 

Sep 2020

 

  397,320

Scotiabank

 

-

 

(11,271)

 

  (11,271)

 

(9,300)

 

(1,972)

 

Dollar

 

Dec 2019

 

  174,525

 

 

  5,567

 

(13,627)

 

(8,060)

 

(9,277)

 

  1,217

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal

 

  380,687

 

(38,285)

 

342,402

 

341,083

 

  1,320

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives to hedge debts  not designated at fair value

 

 

 

 

 

 

 

 

 

 

 

 

Price index hedge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPFL Geração

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Santander

 

  10,578

 

-

 

10,578

 

  8,868

 

  1,710

 

 IPCA

 

Apr 2019

 

  35,235

J.P.Morgan

 

  10,578

 

-

 

10,578

 

  8,868

 

  1,710

 

 IPCA

 

Apr 2019

 

  35,235

 

 

  21,156

 

-

 

21,156

 

17,737

 

  3,419

 

 

 

 

 

 

Interest rate hedge (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPFL Paulista

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goldman

 

-

 

(3,228)

 

(3,228)

 

  (189)

 

(3,039)

 

CDI

 

Jan 2019

 

  682,489

Santander

 

-

 

(295)

 

  (295)

 

  (3)

 

(292)

 

CDI

 

Jan 2019

 

  116,600

Bradesco

 

-

 

(833)

 

  (833)

 

  (62)

 

(771)

 

CDI

 

Jan 2019

 

  142,735

Itaú

 

-

 

(4,509)

 

(4,509)

 

  (106)

 

(4,403)

 

CDI

 

Jan 2019

 

  1,380,000

 

 

-

 

(8,866)

 

(8,866)

 

  (360)

 

(8,506)

 

 

 

 

 

 

CPFL Piratininga

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank of America Merrill Lynch

 

-

 

(271)

 

  (271)

 

  (11)

 

(260)

 

CDI

 

Jan 2019

 

  71,786

Santander

 

-

 

(1,496)

 

(1,496)

 

  (116)

 

(1,379)

 

CDI

 

Jan 2019

 

  246,000

Bradesco

 

-

 

(1,397)

 

(1,397)

 

  (105)

 

(1,293)

 

CDI

 

Jan 2019

 

  259,000

Itaú

 

-

 

(3,142)

 

(3,142)

 

  (233)

 

(2,909)

 

CDI

 

Jan 2019

 

  523,214

 

 

-

 

(6,306)

 

(6,306)

 

  (465)

 

(5,841)

 

 

 

 

 

 

RGE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank of America Merrill Lynch

 

-

 

(1,021)

 

(1,021)

 

  (7)

 

(1,014)

 

CDI

 

Jan 2019

 

  343,873

Santander

 

-

 

(1,153)

 

(1,153)

 

  (82)

 

(1,071)

 

CDI

 

Jan 2019

 

  220,000

Bradesco

 

-

 

(1,078)

 

(1,078)

 

  (81)

 

(998)

 

CDI

 

Jan 2019

 

  200,000

Itaú

 

-

 

(1,402)

 

(1,402)

 

  (99)

 

(1,302)

 

CDI

 

Jan 2019

 

  236,127

 

 

-

 

(4,655)

 

(4,655)

 

  (269)

 

(4,386)

 

 

 

 

 

 

RGE Sul

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goldman

 

-

 

(3,947)

 

(3,947)

 

  (101)

 

(3,846)

 

CDI

 

Jan 2019

 

  1,100,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPFL Geração

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goldman

 

-

 

(2,363)

 

(2,363)

 

  (127)

 

(2,236)

 

CDI

 

Jan 2019

 

  597,090

Santander

 

-

 

(5,979)

 

(5,979)

 

  (402)

 

(5,577)

 

CDI

 

Jan 2019

 

  1,222,320

Bradesco

 

-

 

(3,763)

 

(3,763)

 

  (290)

 

(3,472)

 

CDI

 

Jan 2019

 

  617,520

Itaú

 

-

 

(1,790)

 

(1,790)

 

  (136)

 

(1,655)

 

CDI

 

Jan 2019

 

  291,561

 

 

-

 

(13,895)

 

  (13,895)

 

  (955)

 

(12,940)

 

 

 

 

 

 

CPFL Brasil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Santander

 

-

 

(603)

 

  (603)

 

  (43)

 

(560)

 

CDI

 

Jan 2019

 

  115,000

Bradesco

 

-

 

(1,930)

 

(1,930)

 

  (147)

 

(1,783)

 

CDI

 

Jan 2019

 

  335,000

 

 

-

 

(2,533)

 

(2,533)

 

  (190)

 

(2,342)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal

 

  26,063

 

-

 

26,063

 

17,881

 

  8,182

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other derivatives (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPFL Geração

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Itaú

 

  19,673

 

-

 

19,673

 

  2,401

 

  17,272

 

 Dollar

 

Sep 2020

 

  19,975

Votorantim

 

  16,246

 

-

 

16,246

 

  1,973

 

  14,273

 

 Dollar

 

Sep 2020

 

  19,975

Santander

 

  20,522

 

-

 

20,522

 

  2,317

 

  18,205

 

 Dollar

 

Sep 2020

 

  25,248

Subtotal

 

  56,441

 

-

 

56,441

 

  6,691

 

  49,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

  458,284

 

(78,487)

 

379,797

 

363,170

 

  16,627

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

  341,350

 

  (40,943)

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent

 

  116,934

 

  (37,544)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

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

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

(3) The value at cost are the derivative amount without the respective mark to market, while the notional refers to the contracted accrual

 

 

 

Consolidated

 

 

As of December

31, 2017

 

Interest, inflation adjustment, exchange rate and MTM

 

Repayment

 

As of March

31, 2018

Derivatives

 

 

 

 

 

 

 

 

To hedge debts designated at fair value

 

         526,148

 

                             (2,959)

 

        (182,106)

 

         341,083

To hedge debts not designated at fair value

 

           17,881

 

                              2,977

 

           (5,462)

 

           15,396

Other (zero cost collar)

 

                 -  

 

                              6,691

 

                 -  

 

            6,691

Mark to market (*)

 

            9,095

 

                              7,532

 

                 -  

 

           16,627

 

 

         553,124

 

                            14,241

 

        (187,568)

 

         379,797

 

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

81


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

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 ended at March 31, 2018 and 2017, the derivatives generated the following impacts on the consolidated profit or loss, recognized in the line item of Finance costs on adjustment for inflation and exchange rate changes:

 

 

 

 

 

Gain (Loss)

Company

 

Hedged risk / transaction

 

1st quarter 2018

 

1st quarter 2017

CPFL Paulista

 

Interest rate variation

 

1,117

 

  (157)

CPFL Paulista

 

Exchange variation

 

  (8,150)

 

  (152,589)

CPFL Paulista

 

Mark to Market

 

12,890

 

12,818

CPFL Piratininga

 

Interest rate variation

 

274

 

  (65)

CPFL Piratininga

 

Exchange variation

 

1,447

 

  (57,615)

CPFL Piratininga

 

Mark to Market

 

12,020

 

5,315

RGE

 

Interest rate variation

 

219

 

  (33)

RGE

 

Exchange variation

 

3,468

 

  (48,474)

RGE

 

Mark to Market

 

4,509

 

4,702

RGE SUL

 

Interest rate variation

 

  (101)

 

  -

RGE SUL

 

Mark to Market

 

  (3,855)

 

  -

CPFL Geração

 

Interest rate variation

 

1,658

 

  (217)

CPFL Geração

 

Exchange variation

 

7,551

 

  (63,822)

CPFL Geração

 

Mark to Market

 

  (5,354)

 

18,947

CPFL Santa Cruz

 

Exchange variation

 

  -

 

  (1,102)

CPFL Santa Cruz

 

Mark to Market

 

  -

 

111

CPFL Leste Paulista

 

Exchange variation

 

  -

 

  (1,102)

CPFL Leste Paulista

 

Mark to Market

 

  -

 

111

CPFL Sul Paulista

 

Exchange variation

 

  -

 

  (1,102)

CPFL Sul Paulista

 

Mark to Market

 

  -

 

111

CPFL Jaguari

 

Exchange variation

 

26

 

  (1,102)

CPFL Jaguari

 

Mark to Market

 

  (614)

 

111

Paulista Lajeado Energia

 

Exchange variation

 

  (464)

 

  (2,405)

Paulista Lajeado Energia

 

Mark to Market

 

  (41)

 

  (374)

CPFL Brasil

 

Interest rate variation

 

  (190)

 

  -

CPFL Brasil

 

Exchange variation

 

  (147)

 

  (3,007)

CPFL Brasil

 

Mark to Market

 

  (9,736)

 

188

 

 

 

 

16,528

 

  (290,752)

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 March 31, 2018, the total amount contracted was US$ 65,197, considering the options already settled until this date. The strike prices of the dollar options vary from R$ 4.20 to R$ 4.40 for put options and from R$ 5.40 to R$7.50 for call options.

These options were measured at fair value in a recurring manner, as required by IFRS 9 /CPC 48. The fair value of the options that are part of this transaction was calculated based on the following assumptions:

 

Valuation technique(s) and key information

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

Significant unobservable inputs

Volatility determined based on the average market pricing calculations, future dollar and other variables applicable to this specific transaction, with average variation of 17.35%.

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$ 664, resulting in a net asset of R$ 57,105.

 

82


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

The following table reconciles the opening and closing balances of the call and put options for the 1st quarter of 2018, as required by IFRS 13/CPC 46:

 

 

Consolidated

 

 

Asset

 

Liability

 

Net

As of December 31, 2017

 

          52,058

 

                 -  

 

          52,058

Measurement at fair value

 

            4,384

 

                 -  

 

            4,384

As of March 31, 2018

 

          56,441

 

                 -  

 

          56,441

 

 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 March 31, 2018 is maintained, the simulation of the effects by type of financial instrument for three different scenarios would be:

 

 

 

 Consolidated

 

 

 

 

Decrease (increase)

Instruments

 

Exposure (a)

Risk

Exchange depreciation (b)

Currency appreciation  of 25% (c)

Currency appreciation of 50% (c)

Financial liability instruments

 

        (4,037,647)

 

              (99,004)

                 935,159

              1,969,322

Derivatives - Plain Vanilla Swap

 

         4,060,937

 

               99,575

                (940,553)

             (1,980,681)

Total

 

              23,290

drop in the dollar

                    571

                   (5,394)

                  (11,359)

 

 

 

 

 

 

 

 

 

 

 

Decrease (increase)

Instruments

 

Exposure

US$ thousand

Risk

Currency depreciation (b)

Currency depreciation of 25% (c)

Currency depreciation of 50% (c)

Derivatives zero-cost collar

 

65,197 (d)

raise in the dollar

              (59,012)

                  (80,862)

 

                (102,712)

(a) The exchange rate considered at 03/31/2018 was R$ 3.32 per US$ 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$ 3.41, and the currency depreciation at 2.45% for US$.

(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$.

83


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Except for the zero-cost collar, as the net exchange exposure of the dollar for the other derivative instruments is an asset, the risk is a drop in the dollar, 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 March 31, 2018 is maintained, and (ii) the respective annual indexes accumulated in the last 12 months, for this base date, remain stable (CDI 6.39% p.a.; IGP-M 0.2% p.a.; TJLP 6.75% p.a.; IPCA 2.72% p.a. and SELIC 8.03% p.a.), besides the debts with exposure in fixed rate indexes the effects that would be recognized in the consolidated interim financial statements for the next 12 months would be a net finance cost of R$ 856,020 (costs of CDI R$ 116,133, IGP-M R$ 112,TJLP R$ 259,717 and the residual amount in fixed rate R$ 669,474 and finance income of SELIC R$ 37,111 and IPCA R$ 152,305). In the event of fluctuations in the indexes according to the three scenarios defined, the amount of the net finance cost would be impacted by:

 

   

 Consolidated

   

Exposure (a)

 

Risk

 

Decrease (raise)

Instruments

     

Scenario I (a)

 

Raising/Drop index by 25% (b)

 

Raising/Drop index by 50% (b)

Financial asset instruments

 

           3,658,347

     

                  (6,219)

 

                    50,668

 

                  107,555

Financial liability instruments

 

        (10,458,017)

     

                 17,779

 

                 (144,844)

 

                 (307,466)

Derivatives - Plain Vanilla Swap

 

           4,982,255

     

                  (8,470)

 

                    69,004

 

                  146,478

   

          (1,817,415)

 

CDI apprec.

 

                   3,090

 

                   (25,172)

 

                   (53,433)

                     

Financial liability instruments

 

              (55,757)

 

IGP-M apprec.

 

                  (1,522)

 

                     (1,931)

 

                     (2,339)

                     

Financial liability instruments

 

          (3,847,663)

 

TJLP apprec.

 

                   5,771

 

                   (57,715)

 

                 (121,201)

                     

Financial liability instruments

 

          (1,316,030)

     

                (15,003)

 

                     (2,303)

 

                    10,397

Derivatives - Plain Vanilla Swap

 

               96,930

     

                   1,105

 

                         170

 

                        (766)

Concession financial asset

 

           6,818,568

     

                 77,732

 

                    11,932

 

                   (53,867)

   

           5,599,468

 

drop in the IPCA

 

                 63,834

 

                      9,799

 

                   (44,236)

                     

Sectorial financial assets and liabilities

 

             595,975

     

                (10,310)

 

                   (19,697)

 

                   (29,084)

Financial liability instruments

 

            (133,820)

     

                   2,315

 

                      4,423

 

                      6,530

   

             462,155

 

drop in the SELIC

 

                  (7,995)

 

                   (15,274)

 

                   (22,554)

                     

Total

 

             340,788

     

                 63,178

 

                   (90,293)

 

                 (243,763)

(a)   The CDI, IGP-M, TJLP, IPCA and SELIC indexes considered of: 6.22%, 2.93%, 6.60%, 3.86% and 6.30%, 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

 

 

Consolidated

 

March 31, 2018

 

December 31, 2017

Other transactions

 

 

 

Interest capitalized in property, plant and equipment

         2,442

 

       19,503

Interest capitalized in concession intangible asset - distribution infrastructures

         3,767

 

         4,654

Reversal of provision for socio environmental costs capitalized in property, plant and equipment

         9,725

 

              -  

Transfers between property, plant and equipment and other assets

         2,881

 

         1,102

 

( 34 )   SIGNIFICANT FACT AND EVENTS AFTER THE REPORTING PERIOD

 

34.1.Periodic Tariff Revision – CPFL Paulista and Annual Tariff Adjustment RGE Sul

On April 3, 2018, ANEEL published Resolution No. 2,381, related to the fourth periodic tariff revision (RTP), which set the average tariff adjustment of the subsidiary CPFL Paulista, effective as of April 8, 2018, at

84


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

12.68%, 8.67% related to the economic tariff adjustment and 4.01% related to relevant financial components. Total average effect to be perceived by consumers is 16.90%.

On April 17, 2017, ANEEL published Resolution No. 2,385, which set the average tariff adjustment of the subsidiary RGE Sul, effective as of April 19, 2018, at 18.45%, 11.57% related to the economic tariff adjustment and 6.88% related to relevant financial components. The total average effect to be perceived by consumers is 22.47%.

 

34.2.  Dividend

At the Annual and Extraordinary General Meeting on April 27, 2018, the allocation of the profit for 2017 through declaration of minimum mandatory dividend in the amount of R$280,191 was approved.

 

85


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - 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 March 31, 2018:

Shareholders

 

Common shares

 

Interest - %

State Grid Brazil Power Participações Ltda.

 

       730,435,698

 

        71.76

ESC Energia S.A.

 

       234,086,204

 

        23.00

Other shareholders

 

         53,392,844

 

          5.25

Total

 

    1,017,914,746

 

      100.00


Quantity and characteristic of secutiries held by directly or indirectly Controlling Shareholders, Executive Officers, Board of Directors, Fiscal Council and Free Float, as of March 31, 2018 and December 31, 2017:
   

March 31, 2018

 

December 31, 2017

Shareholders

 

Common shares

 

Interest - %

 

Common shares

 

Interest - %

Controlling shareholders

 

       964,521,902

 

        94.75

 

       964,521,902

 

        94.75

Administrator

 

                      -  

 

             -  

 

                      -  

 

             -  

Members of the Executive Officers

 

                    189

 

          0.00

 

                    189

 

          0.00

Members of the Board of Directors

 

                      -  

 

             -  

 

                      -  

 

             -  

Fiscal Council  Members

 

                      -  

 

             -  

 

                      -  

 

             -  

Other shareholders

 

         53,392,655

 

          5.25

 

         53,392,655

 

          5.25

Total

 

    1,017,914,746

 

      100.00

 

    1,017,914,746

 

      100.00

Outstanding shares - free float

 

         53,392,655

 

          5.25

 

         53,392,655

 

          5.25

 

SHAREHOLDING STRUCTURE

 1st quarter of 2018

 

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

 

           964,521,902

94.75%

100.00%

                        -  

0.00%

0.00%

          964,521,902

94.75%

 

 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

           730,435,698

71.76%

100.00%

                        -  

0.00%

0.00%

          730,435,698

71.76%

November 30, 2017

 

 Noncontrolling shareholders

 

             53,392,844

5.25%

100.00%

                        -  

0.00%

0.00%

            53,392,844

5.25%

 

 1.3

 Board of Directors members

07.341.926/001-90

                            -  

0.00%

0.00%

                        -  

0.00%

0.00%

                          -  

0.00%

November 30, 2017

 1.4

 Executive Office members

 

                         189

0.00%

100.00%

                        -  

0.00%

0.00%

                        189

0.00%

November 30, 2017

 1.5

 Other shareholders

 

             53,392,655

5.25%

100.00%

                        -  

0.00%

0.00%

            53,392,655

5.25%

 

 

 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.

86


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

INDEPENDENT AUDITORS' REPORT

KPMG Auditores Independentes

Av. Coronel Silva Telles, 977 - 10º andar, Cambuí

13024-001 - Campinas/SP – Brasil

Edifício Dahruj Tower

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

Telephone +55 (19) 3198-6000, Fax +55 (19) 3198-6205

www.kpmg.com.br

 

 

INDEPENDENT AUDITORS’ REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION

(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 March 31, 2018, which comprises the statement of financial position as of March 31, 2018 and the respective statements of profit or loss and other comprehensive income for the three month period then ended, and the changes in equity and cash flows for the three 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.

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 three month period ended March 31, 2018, prepared under the responsibility of the Company's management, and presented as supplementary information for the purposes of IAS 34, were submitted to the

 

87


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

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.

 

Campinas, May 7, 2018

 

KPMG Auditores Independentes

CRC 2SP014428/O-6

Original report in Portuguese signed by

Marcio José dos Santos

Accountant CRC 1SP252906/O-0

 

88


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Management declaration on financial statements

 

In compliance with the provisions in items V and VI of article 25 of the Brazilian Securities & Exchange Commission (CVM) Instruction No. 480, of December 7, 2009, as amended by CVM Instruction No. 586, of June 8, 2017, the chief executive officers and the officers of CPFL Energia S.A, a publicly traded company, with its registered office at Rodovia Engo Miguel Noel Nascentes Burnier, km 2,5, Parque São Quirino - Campinas - SP -  Brasil, enrolled with the National Register of Legal Entities (CNPJ ) under No. 02.429.144/0001-93, hereby stated that:

 

a)     they have reviewed and discussed, and agree with, the opinions expressed in the opinion of KPMG Auditores Independentes on the interim financial statements of CPFL Energia of March 31, 2018;

 

b)     they have reviewed and discussed, and agree with, the interim financial statements of CPFL Energia of March 31, 2018;

 

 

Campinas, May 7, 2018.

 

 

 

__________________________________

André Dorf

Chief Executive Officer, holding also the function of

Chief Business Development Officer

 

 

 

__________________________________

Yumeng Zhao

Deputy Chief Executive Officer

 

 

 

Gustavo Pinto Gachineiro

Chief Institutional Relations Officer

 

 

Gustavo Estrella

Chief Financial and

Investor Relations Officer

 

 

__________________________________

Wagner Luiz Schneider de Freitas

Chief Business Planning and

Management Officer

 

 

 

__________________________________

Karin Regina Luchesi

Chief Market Operations Officer

 

 

 

 

 

 

 

 

__________________________________

Luis Henrique Ferreira Pinto

Chief Regulated Operations Officer

89


 
 

(Free Translation of the original in Portuguese)

Interim Standard Financial Statements –ITR–  Date: March 31, 2018 - CPFL Energia S.A.

 

Management declaration on independent auditors’ report

 

 

In compliance with the provisions in items V and VI of article 25 of the Brazilian Securities & Exchange Commission (CVM) Instruction No. 480, of December 7, 2009, as amended by CVM Instruction No. 586, of June 8, 2017, the chief executive officers and the officers of CPFL Energia S.A, a publicly traded company, with its registered office at Rodovia Engo Miguel Noel Nascentes Burnier, km 2,5, Parque São Quirino - Campinas - SP -  Brasil, enrolled with the National Register of Legal Entities (CNPJ ) under No. 02.429.144/0001-93, hereby stated that:

 

a)     they have reviewed and discussed, and agree with, the opinions expressed in the opinion of KPMG Auditores Independentes on the interim financial statements of CPFL Energia of March 31, 2018;

 

b)     they have reviewed and discussed, and agree with, the interim financial statements of CPFL Energia of March 31, 2018;

 

 

Campinas, May 7, 2018.

 

 

__________________________________

André Dorf

Chief Executive Officer, holding also the function of

Chief Business Development Officer

 

 

__________________________________

Yumeng Zhao

Deputy Chief Executive Officer

 

 

 

Gustavo Pinto Gachineiro

Chief Institutional Relations Officer

 

 

Gustavo Estrella

Chief Financial and

Investor Relations Officer

 

 

 

__________________________________

Wagner Luiz Schneider de Freitas

Chief Business Planning and

Management Officer

 

 

 

__________________________________

Karin Regina Luchesi

Chief Market Operations Officer

 

 

 

 

 

 

__________________________________

Luis Henrique Ferreira Pinto

Chief Regulated Operations Officer

90

 

 
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: May 7, 2018
 
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.