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____(Free Translation of the original in Portuguese) | ||
FEDERAL GOVERNMENT | ||
BRAZILIAN SECURITIES COMMISSION (CVM) | ||
QUARTERLY INFORMATION ITR | Brazilian Corporation Law | |
COMMERCIAL, INDUSTRIAL AND OTHER COMPANIES | Date: September 30, 2008 |
REGISTRATION WITH CVM SHOULD NOT BE CONSTRUED AS AN EVALUATION OF THE COMPANY. COMPANY MANAGEMENT IS RESPONSIBLE FOR THE INFORMATION PROVIDED. |
01.01 - IDENTIFICATION
1 - CVM CODE 01866-0 |
2 - COMPANY NAME CPFL ENERGIA S.A |
3 - CNPJ (Federal Tax ID) 02.429.144/0001-93 |
4 - NIRE (State Registration Number) 353.001.861.33 |
01.02 - HEAD OFFICE
1 - ADDRESS Rua Gomes de Carvalho, 1510 14º andar Conjunto 2 |
2 - DISTRICT Vila Olímpia |
|||
3 - ZIP CODE 04547-005 |
4 - CITY São Paulo |
5 - STATE SP |
||
6 - AREA CODE 019 |
7 - TELEPHONE 3756-8018 |
8 - TELEPHONE - |
9 - TELEPHONE - |
10 - TELEX |
11 - AREA CODE 019 |
12 - FAX 3756-8392 |
13 - FAX - |
14 - FAX - |
|
15 - E-MAIL ri@cpfl.com.br |
01.03 - INVESTOR RELATIONS OFFICER (Company Mailing Address)
1- NAME José Antonio de Almeida Filippo |
||||
2 ADDRESS Rodovia Campinas Mogi-Mirim, 1755, Km 2,5 |
3 - DISTRICT Jardim Santana |
|||
4 - ZIP CODE 13088-900 |
5 - CITY Campinas |
6 - STATE SP |
||
7 - AREA CODE 019 |
8 - TELEPHONE 3756-8704 |
9 - TELEPHONE - |
10 - TELEPHONE - |
11 - TELEX |
12 - AREA CODE 019 |
13 - FAX 3756-8777 |
14 - FAX - |
15 - FAX - |
|
16 - E-MAIL jfilippo@cpfl.com.br |
01.04 ITR REFERENCE AND AUDITOR INFORMATION
CURRENT YEAR | CURRENT QUARTER | PREVIOUS QUARTER | |||||
1 - BEGINNING | 2. END | 3 - QUARTER | 4 - BEGINNING | 5 - END | 6 - QUARTER | 7 - BEGINNING | 8 - END |
01.01.2008 | 12.31.2008 | 3 | 07.01.2008 | 09.30.2008 | 2 | 04.01.2008 | 06.30.2008 |
09 - INDEPENDENT ACCOUNTANT KPMG Auditores Independentes |
10 - CVM CODE 00418-9 |
||||||
11. PARTNER IN CHARGE Jarib Brisola Duarte Fogaça |
12 - CPF (INDIVIDUAL TAX ID) 012.163.378-02 |
1
01.05 - CAPITAL STOCK
Number of Shares (in units) |
1 Current Quarter 09.30.2008 |
2 Previous Quarter 06.30.2008 |
3 Same Quarter of Last Year 09.30.2007 |
Paid-in Capital | |||
1 Common | 479,910,938 | 479,910,938 | 479,756,730 |
2 Preferred | 0 | 0 | 0 |
3 Total | 479,910,938 | 479,910,938 | 479,756,730 |
Treasury Stock | |||
4 Common | 0 | 0 | 0 |
5 Preferred | 0 | 0 | 0 |
6 Total | 0 | 0 | 0 |
01.06 - COMPANY PROFILE
1 - TYPE OF COMPANY Commercial, Industrial and Other |
2 - STATUS Operational |
3 - NATURE OF OWNERSHIP Private National |
4 - ACTIVITY CODE 3120 Administration and Participation Company - Electric Energy |
5 - MAIN ACTIVITY Holding |
6 - CONSOLIDATION TYPE Full |
7 TYPE OF REPORT OF INDEPENDENT AUDITORS Unqualified |
01.07 - COMPANIES NOT INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS
1 ITEM | 2 - CNPJ (Federal Tax ID) | 3 - COMPANY NAME |
01.08 - CASH DIVIDENDS
1 ITEM | 2 EVENT | 3 APPROVAL | 4 TYPE | 5 - DATE OF PAYMENT | 6 - TYPE OF SHARE | 7 - AMOUNT PER SHARE |
01 | RCA | 08.11.2008 | Dividend | 09.30.2008 | ON | 1.2535168090 |
2
01.09 - SUBSCRIBED CAPITAL AND CHANGES IN THE CURRENT YEAR
1 - ITEM | 2 - DATE OF CHANGE | 3 - CAPITAL STOCK (IN THOUSANDS OF REAIS) |
4 - AMOUNT OF CHANGE (IN THOUSANDS OF REAIS) |
5 - NATURE OF CHANGE | 7 - NUMBER OF SHARES ISSUED (IN UNITS) |
8 -SHARE PRICE WHEN ISSUED (IN REAIS) |
01.10 - INVESTOR RELATIONS OFFICER
1- DATE 11/05/2008 |
2 SIGNATURE |
3
02.01 - BALANCE SHEET - ASSETS (in thousands of Brazilian reais R$)
1 Code | 2 Description | 3 09/30/2008 | 4 06/30/2008 |
1 | Total assets | 5,824,335 | 6,113,361 |
1.01 | Current assets | 262,497 | 850,782 |
1.01.01 | Cash and banks | 5,723 | 7,626 |
1.01.02 | Credits | 251,761 | 838,570 |
1.01.02.01 | Accounts receivable | 0 | 0 |
1.01.02.02 | Other receivables | 251,761 | 838,570 |
1.01.02.02.01 | Dividends and interest on shareholders equity | 163,203 | 742,483 |
1.01.02.02.02 | Financial investments | 38,250 | 36,316 |
1.01.02.02.03 | Recoverable taxes | 40,571 | 49,799 |
1.01.02.02.04 | Deferred taxes | 9,410 | 9,645 |
1.01.02.02.05 | Prepaid expenses | 327 | 327 |
1.01.03 | Material and supplies | 0 | 0 |
1.01.04 | Other | 5,013 | 4,586 |
1.02 | Noncurrent assets | 5,561,838 | 5,262,579 |
1.02.01 | Long-term assets | 580,659 | 582,728 |
1.02.01.01 | Other receivables | 171,341 | 173,411 |
1.02.01.01.01 | Financial investments | 91,152 | 94,796 |
1.02.01.01.02 | Recoverable taxes | 2,787 | 2,787 |
1.02.01.01.03 | Deferred taxes | 75,793 | 74,137 |
1.02.01.01.04 | Prepaid expenses | 1,609 | 1,691 |
1.02.01.02 | Related parties | 409,310 | 409,310 |
1.02.01.02.01 | Associated companies | 0 | 0 |
1.02.01.02.02 | Subsidiaries | 409,310 | 409,310 |
1.02.01.02.03 | Other related parties | 0 | 0 |
1.02.01.03 | Other | 8 | 7 |
1.02.01.03.01 | Escrow deposits | 8 | 7 |
1.02.02 | Permanent assets | 4,981,179 | 4,679,851 |
1.02.02.01 | Investments | 4,980,770 | 4,670,740 |
1.02.02.01.01 | Associated companies | 0 | 0 |
1.02.02.01.02 | Associated companies - goodwill | 0 | 0 |
1.02.02.01.03 | Permanent equity interests | 3,422,954 | 3,080,625 |
1.02.02.01.04 | Permanent equity interests - goodwill | 1,557,816 | 1,590,115 |
1.02.02.01.05 | Other investments | 0 | 0 |
1.02.02.02 | Property, plant and equipment | 409 | 424 |
1.02.02.03 | Intangible | 0 | 0 |
1.02.02.04 | Deferred charges | 0 | 8,687 |
4
02.02 - BALANCE SHEET - LIABILITIES AND SHAREHOLDERS' EQUITY (in thousands of Brazilian reais R$)
1 Code | 2 Description | 3 09/30/2008 | 4 06/30/2008 |
2 | Total liabilities and shareholders equity | 5,824,335 | 6,113,361 |
2.01 | Current liabilities | 24,648 | 653,675 |
2.01.01 | Loans and financing | 0 | 0 |
2.01.01.01 | Loans and financing | 0 | 0 |
2.01.01.02 | Interest on loans and financing | 0 | 0 |
2.01.02 | Debentures | 4,432 | 16,678 |
2.01.02.01 | Interest on debentures | 4,432 | 16,678 |
2.01.03 | Suppliers | 1,697 | 4,242 |
2.01.04 | Taxes and social contributions payable | 65 | 14,992 |
2.01.05 | Dividends and interest on equity | 16,970 | 616,018 |
2.01.06 | Reserves | 0 | 0 |
2.01.07 | Related parties | 0 | 0 |
2.01.08 | Other | 1,484 | 1,745 |
2.01.08.01 | Accrued liabilities | 177 | 125 |
2.01.08.02 | Derivative contracts | 35 | 44 |
2.01.08.03 | Other | 1,272 | 1,576 |
2.02 | Non-current liabilities | 506,262 | 504,852 |
2.02.01 | Long-term liabilities | 506,262 | 504,852 |
2.02.01.01 | Loans and financing | 0 | 0 |
2.02.01.02 | Debentures | 450,000 | 450,000 |
2.02.01.03 | Reserves | 56,238 | 54,852 |
2.02.01.03.01 | Reserve for contingencies | 56,238 | 54,852 |
2.02.01.04 | Related parties | 0 | 0 |
2.02.01.05 | Advances for future capital increase | 0 | 0 |
2.02.01.06 | Other | 24 | 0 |
2.02.02 | Deferred income | 0 | 0 |
2.04 | Shareholders equity | 5,293,425 | 4,954,834 |
2.04.01 | Capital | 4,741,175 | 4,741,175 |
2.04.02 | Capital reserves | 16 | 16 |
2.04.03 | Revaluation reserves | 0 | 0 |
2.04.03.01 | Own assets | 0 | 0 |
2.04.03.02 | Subsidiary/associated companies | 0 | 0 |
2.04.04 | Profit reserves | 213,643 | 213,643 |
2.04.04.01 | Legal reserves | 213,643 | 213,643 |
2.04.04.02 | Statutory reserves | 0 | 0 |
2.04.04.03 | For contingencies | 0 | 0 |
2.04.04.04 | Unrealized profits | 0 | 0 |
2.04.04.05 | Profit retention | 0 | 0 |
2.04.04.06 | Special reserve for undistributed dividends | 0 | 0 |
2.04.04.07 | Other revenue reserve | 0 | 0 |
2.04.05 | Retained earnings | 338,591 | 0 |
2.04.06 | Advance for future capital increase | 0 | 0 |
5
03.01 - INCOME STATEMENT (in thousands of Brazilian reais R$)
1 Code | 2 Description | 3 07/01/2008 to 09/30/2008 | 4 - 01/01/2008 to 09/30/2008 | 5 07/01/2007 to 09/30/2007 | 6 - 01/01/2007 to 09/30/2007 |
3.01 | Operating revenues | 0 | 0 | 0 | 0 |
3.02 | Deductions from operating revenues | 0 | 0 | 0 | 0 |
3.03 | Net operating revenues | 0 | 0 | 0 | 0 |
3.04 | Cost of sales and/or services | 0 | 0 | 0 | 0 |
3.05 | Gross operating income | 0 | 0 | 0 | 0 |
3.06 | Operating expenses/income | 341,275 | 1,062,472 | 423,675 | 1,345,673 |
3.06.01 | Sales and marketing | 0 | 0 | 0 | 0 |
3.06.02 | General and administrative | (3,439) | (13,405) | (3,007) | (13,014) |
3.06.03 | Financial | (37,611) | (28,794) | (37,637) | (41,475) |
3.06.03.01 | Financial income | 11,847 | 125,418 | 10,469 | 90,407 |
3.06.03.01.01 | Interest on shareholders' equity | 0 | 98,340 | 0 | 70,464 |
3.06.03.01.02 | Other financial income | 11,847 | 27,078 | 10,469 | 19,943 |
3.06.03.02 | Financial expenses | (49,458) | (154,212) | (48,106) | (131,882) |
3.06.03.02.01 | Goodwill amortization | (32,299) | (96,903) | (28,476) | (78,864) |
3.06.03.02.02 | Other financial expenses | (17,159) | (57,309) | (19,630) | (53,018) |
3.06.04 | Other operating income | 0 | 0 | 0 | 0 |
3.06.05 | Other operating expenses | 0 | 0 | 0 | 0 |
6
03.01 - INCOME STATEMENT (in thousands of Brazilian reais R$)
1 Code | 2 Description | 3 07/01/2008 to 09/30/2008 | 4 - 01/01/2008 to 09/30/2008 | 5 07/01/2007 to 09/30/2007 | 6 - 01/01/2007 to 09/30/2007 |
3.06.06 | Equity in subsidiaries | 382,325 | 1,104,671 | 464,319 | 1,400,162 |
3.06.06.01 | Companhia Paulista de Força e Luz | 147,320 | 447,291 | 199,985 | 606,833 |
3.06.06.02 | Companhia Piratininga de Força e Luz | 60,074 | 154,057 | 94,876 | 259,363 |
3.06.06.03 | Rio Grande Energia S.A. | 36,992 | 139,517 | 44,215 | 44,215 |
3.06.06.04 | CPFL Geração de Energia S.A. | 55,598 | 171,091 | 52,202 | 210,770 |
3.06.06.05 | CPFL Comercialização Brasil S.A. | 64,978 | 137,963 | 59,177 | 187,827 |
3.06.06.06 | Nova 4 Participações Ltda | 0 | 0 | 3,410 | 2,938 |
3.06.06.07 | Perácio Participações S.A. | 9,793 | 30,554 | 10,454 | 8,905 |
3.06.06.08 | CPFL Comercialização Cone Sul S.A. | 0 | 0 | 0 | 2,024 |
3.06.06.09 | Companhia Luz e Força Santa Cruz | 7,598 | 24,226 | 0 | 0 |
3.06.06.10 | CPFL Serra | 0 | 0 | 0 | 77,287 |
3.06.06.11 | CPFL Atende | (28) | (28) | 0 | 0 |
3.07 | Income (loss) from operations | 341,275 | 1,062,472 | 423,675 | 1,345,673 |
3.08 | Nonoperating income/expense | (8,687) | (9,785) | 109 | 3,309 |
3.08.01 | Income | 0 | 0 | 109 | 3,309 |
3.08.02 | Expenses | (8,687) | (9,785) | 0 | 0 |
3.09 | Income before taxes on income and minority interest | 332,588 | 1,052,687 | 423,784 | 1,348,982 |
3.10 | Income tax and social contribution | 4,581 | (10,238) | 3,138 | (6,760) |
3.10.01 | Social contribution | 1,590 | (1,223) | 1,158 | (493) |
3.10.02 | Income tax | 2,991 | (9,015) | 1,980 | (6,267) |
3.11 | Deferred tax | 1,422 | (3,941) | 1,517 | (944) |
3.11.01 | Deferred social contribution | 448 | (1,220) | 495 | (256) |
3.11.02 | Deferred income tax | 974 | (2,721) | 1,022 | (688) |
7
3.12 | Statutory profit sharing/contributions | 0 | 0 | 0 | 0 |
3.12.01 | Profit sharing | 0 | 0 | 0 | 0 |
3.12.02 | Contributions | 0 | 0 | 0 | 0 |
3.13 | Reversal of interest on shareholders equity | 0 | (98,340) | 0 | (70,464) |
3.15 | Net income for the period | 338,591 | 940,168 | 428,439 | 1,270,814 |
SHARES OUTSTANDING EX-TREASURY STOCK (in units) | 479,910,938 | 479,910,938 | 479,756,730 | 479,756,730 | |
INCOME PER SHARE | 0.70553 | 1.95905 | 0.89303 | 2.64887 | |
LOSS PER SHARE |
8
04.01 NOTES TO THE INTERIM FINANCIAL STATEMENTS
(Amounts stated in thousands of Brazilian reais, except where otherwise indicated)
( 1 ) OPERATIONS |
CPFL Energia S.A. (CPFL Energia or Company) is a publicly quoted corporation incorporated for the principal purpose of acting as a holding company, participating in the capital of other companies primarily dedicated to electric energy distribution, generation and sales activities.
The Company has direct and indirect interests in the following operational subsidiaries, allocated by line of business:
September 30, 2008 | June 30, 2008 | |||||||||
Subsidiary | Consolidation | Equity Interest - % | Equity Interest - % | |||||||
Method | Direct | Indirect | Direct | Indirect | ||||||
Energy Distribution | ||||||||||
Companhia Paulista de Força e Luz ("CPFL Paulista") | Full | 100.00 | - | 100.00 | - | |||||
Companhia Piratininga de Força e Luz ("CPFL Piratininga") | Full | 100.00 | - | 100.00 | - | |||||
Rio Grande Energia S.A. ("RGE") | Full | 100.00 | - | 100.00 | - | |||||
Companhia Luz e Força Santa Cruz ("CPFL Santa Cruz") | Full | 99.99 | - | 99.99 | - | |||||
Companhia Paulista de Energia Elétrica ("CPFL Leste | ||||||||||
Paulista") | Full | - | 96.56 | - | 96.56 | |||||
Companhia Jaguari de Energia ("CPFL Jaguari") | Full | - | 90.15 | - | 90.15 | |||||
Companhia Sul Paulista de Energia ("CPFL Sul Paulista") | Full | - | 87.80 | - | 87.80 | |||||
Companhia Luz e Força de Mococa ("CPFL Mococa") | Full | - | 89.75 | - | 89.75 | |||||
Energy Generation | ||||||||||
CPFL Geração de Energia S.A.("CPFL Geração") | Full | 100.00 | - | 100.00 | - | |||||
CPFL Sul Centrais Elétricas Ltda. ("CPFL Sul Centrais | ||||||||||
Elétricas") | Full | - | 100.00 | - | 100.00 | |||||
CPFL Bioenergia S.A. ("CPFL Bioenergia") | Full | - | 100.00 | - | - | |||||
Paulista Lajeado Energia S.A. ("Paulista Lajeado") | Full | - | 54.03 | - | 54.03 | |||||
CERAN - Companhia Energética Rio das Antas ("CERAN") | Proportionate | - | 65.00 | - | 65.00 | |||||
BAESA - Energética Barra Grande S.A. ("BAESA") | Proportionate | - | 25.01 | - | 25.01 | |||||
Campos Novos Energia S.A.("ENERCAN") | Proportionate | - | 48.72 | - | 48.72 | |||||
Foz do Chapecó Energia S.A. ("Foz do Chapecó") | Proportionate | - | 51.00 | - | 51.00 | |||||
Energy Commercialization | ||||||||||
CPFL Comercialização Brasil S.A. ("CPFL Brasil") | Full | 100.00 | - | 100.00 | - | |||||
CPFL Comercialização Cone Sul S.A. ("CPFL Cone Sul") | Full | - | 100.00 | - | 100.00 | |||||
Clion Assessoria e Comercialização de Energia Elétrica | ||||||||||
Ltda. ("CPFL Meridional") | Full | - | 100.00 | - | 100.00 | |||||
CPFL Planalto Ltda. ("CPFL Planalto") | Full | - | 100.00 | - | 100.00 | |||||
Sul Geradora Participações S.A. ("Sul Geradora") | Full | - | 99.95 | - | 99.95 | |||||
Services | ||||||||||
CPFL Serviços, Equipamentos, Industria e Comércio S.A. | ||||||||||
("CPFL Serviços") | Full | - | 89.81 | - | 89.81 |
9
CPFL Atende Centro de Contratos e Atendimento Ltda. ("CPFL Atende") |
Full | 100.00 | - | - | - | |||||
Holdings | ||||||||||
Perácio Participações S.A.("Perácio") | Full | 100.00 | - | 100.00 | - | |||||
Chumpitaz Participações S.A.("Chumpitaz") | Full | 100.00 | - | 100.00 | - | |||||
CPFL Jaguariuna S.A. ("CPFL Jaguariuna") | Full | - | 100.00 | - | 100.00 | |||||
Companhia Jaguari Geração de Energia ("Jaguari Geração") | Full | - | 90.15 | - | 90.15 |
The following changes occurred in the Company's interests in the quarter:
CPFL Bionergia S.A.
The principal objective of CPFL Bionergia S.A. (CPFL Bionergia), previously Makelele Participações S.A. (Makelele), a private corporation and a fully-controlled subsidiary of CPFL Geração, is the
thermal and steam generation of electric energy, using co-generation plants powered by sugarcane waste and straw.
On August 18, 2008, CPFL Bioenergia signed a partnership agreement with Baldin Bioenergia for the construction of a 45 MW Thermo-Electric plant powered by sugarcane waste in Pirassununga, in the State of São Paulo. It is planned to invest around R$ 100 million in the project and it is scheduled to start operating in April 2010.
CPFL Atende Centro de Contatos e Atendimento Ltda
A fully-controlled subsidiary of the Company, CPFL Atende Centro de Contatos e Atendimento Ltda (CPFL Atende), is a Brazilian limited liability company and its objective is to provide call center services in general, especially consumer
services, receiving and answering calls from customers, using operators and electronic answering - ARU. The initial objective is to provide services to group companies, and subsequently to other companies.
( 2 ) | PRESENTATION OF THE INTERIM FINANCIAL STATEMENTS |
The parent companys and consolidated interim financial statements have been prepared in accordance with principles, practices and criteria consistent with those adopted in preparing the prior years financial statements and interim financial statements as of March 31, 2008 and June 30, 2008 and should be analyzed together with those statements.
These interim financial statements were prepared in accordance with (i) generally accepted accounting principles in Brazil, (ii) the Accounting Manual of the Public Electric Energy Service and standards defined by ANEEL, and (iii) the complementary instructions of the Brazilian Securities Commission (CVM), including the CVM Instruction 469/08, which provides guidance for compliance with Law 11.638/07, as mentioned in Note 29.
The Cash Flow and Added Value Statements for the nine months ended September 30, 2008 and 2007 are presented as additional information for the market (appendices I and II, respectively).
The Cash Flow Statements are presented in accordance with the criteria established by FAS 95 Statement of Cash Flows, with respect to the presentation format, within the context of registering the Company's financial statements with the Securities and Exchange Commission (SEC).
10
Consolidation Principles
The consolidated interim financial statements include the balances and transactions of the Company and its subsidiaries CPFL Paulista, CPFL Piratininga, CPFL Santa Cruz, RGE, CPFL Geração, CPFL Brasil, Chumpitaz, Perácio and CPFL Atende (as from September 2008). The asset, liability, income and expense balances have been fully consolidated. Prior to consolidation in the Company's financial statements, the financial statements of CPFL Geração, CPFL Brasil and Perácio are consolidated with those of their fully (majority) controlled or proportionally (jointly) controlled subsidiaries, according to the rules defined in CVM Instruction No. 247/96.
In compliance with the above conditions, the portion relating to the non-controlling shareholders is stated separately in liabilities and income statements for the presented period in question.
All significant intercompany balances and transactions have been eliminated.
The accounting policies of the parent companys subsidiaries are consistent with those of the parent company. The main difference in accounting policies relates to the revaluation of property, plant and equipment recorded by the subsidiary RGE, which is eliminated in the shareholders equity base for calculation of equity interest and, consequently, in consolidation.
( 3 ) | REGULATORY ASSETS AND LIABILITIES |
Consolidated | ||||||||
Current | Noncurrent | |||||||
September | June 30, | September | June 30, | |||||
30, 2008 | 2008 | 30, 2008 | 2008 | |||||
Assets | ||||||||
Consumers, Concessionaires and Licensees (note 5) | ||||||||
Extraordinary tariff adjustment (a) | 1,277 | 2,175 | - | - | ||||
Free energy (a) | 756 | 1,045 | 170 | 134 | ||||
Discounts on TUSD and irrigation (b.3) | 58,207 | 68,530 | 2,278 | 5,198 | ||||
Other financial components | 2,848 | 3,160 | 862 | 95 | ||||
63,088 | 74,910 | 3,310 | 5,427 | |||||
Deferred Costs Variations | ||||||||
Parcel "A" (a) | 270,532 | 254,483 | 25,507 | 96,574 | ||||
CVA (c) | 329,753 | 246,825 | 136,639 | 180,529 | ||||
600,285 | 501,308 | 162,146 | 277,103 | |||||
Prepaid Expenses (note 9) | ||||||||
Other financial components | 8,143 | 10,124 | - | 42 | ||||
Increase in PIS and COFINS (b.3) | 258 | 258 | - | - | ||||
Overcontracting of electric energy (b.3) | 27,152 | 784 | 79,048 | 2,073 | ||||
Discounts on TUSD Generation (b.3) | 6,423 | 9,343 | - | - | ||||
Low income consumers' subsidy - Losses (d) | 62,811 | 52,712 | 894 | - | ||||
104,787 | 73,221 | 79,942 | 2,115 | |||||
Liabilities | ||||||||
Suppliers (note 17) | ||||||||
Free energy (a) | (29,439) | (29,651) | - | - | ||||
Deferred Gains Variations | ||||||||
Parcel "A" (a) | (18,202) | (17,740) | (703) | (2,878) | ||||
CVA (c) | (233,816) | (213,287) | (74,792) | (108,467) | ||||
(252,018) | (231,027) | (75,495) | (111,345) | |||||
Other Accounts Payable (note 22) | ||||||||
Other financial components | (15,769) | (17,198) | - | (54) | ||||
Increase in PIS and COFINS (b.3) | (123,398) | (121,559) | - | - | ||||
Refund to consumer TUSD and Irrigation (b.3) | (347) | (1,950) | (443) | (727) | ||||
Overcontracting of electric energy (b.3) | (25,013) | (32,681) | (34,680) | (22,472) | ||||
Low income consumers' subsidy - Gains (d) | (11,494) | (10,360) | (199) | - | ||||
(176,021) | (183,748) | (35,322) | (23,253) | |||||
Total , net | 310,682 | 205,013 | 134,581 | 150,047 | ||||
11
a) Rationing
At the end of 2001, as a result of the Emergency Program for the Reduction of Electric Energy Consumption, in effect between June 2001 and February 2002, the generators, the power distributors and the Federal Government signed the "Overall Agreement for the Electric Energy Sector". The agreement introduced an Extraordinary Tariff Increase of 2.9% on electric power supply to residential consumers (except those regarded as "low income consumers") and for rural and public lighting, and 7.9% for all other consumers, as a mechanism to reimburse the electricity sector for the losses incurred as a result of this program.
The changes in RTE, Free Energy and Parcel A, net of the provision for losses, during the quarter ended in September 30, 2008 are shown below:
Consolidated | ||||||||
Free Energy | ||||||||
RTE | Asset | Liability | Parcel "A" Net |
|||||
Balances as of June 30, 2008 | 2,175 | 1,179 | (29,651) | 330,439 | ||||
Remuneration | 149 | 128 | (128) | 9,968 | ||||
Provision for losses | (167) | (16) | 107 | - | ||||
Amortization | (880) | (365) | 233 | (63,273) | ||||
Balances as of September 30, 2008 | 1,277 | 926 | (29,439) | 277,134 | ||||
Extraordinary Tariff Adjustment (RTE) Corresponds to the loss of revenue determined by comparison of the sales revenues from energy effectively recorded in the rationing period, and projected revenue for this period, without taking into account the effects of the Energy Rationing Program.
As the deadline for recovery of the RTE has passed for the other distributors, the RTE balance refers to the indirect subsidiary CPFL Sul Paulista, which established a provision for losses of R$ 2,456, based on revenue projections, taking into consideration market growth and estimates of inflation, interest and regulatory aspects. ANEEL set a deadline of January 2009 for recovery of the RTE by CPFL Sul Paulista.
The distributors CPFL Paulista and CPFL Piratininga recorded losses of R$ 152,090 in prior years, due to the deadline for recovery of the full amount of the RTE having passed.
12
Electric energy from Independent Suppliers (Free Energy) Corresponds to the energy produced and made available to the consumer market during the rationing period by the independent producers and self-producers of energy.
The distribution utilities collected payment from consumers by means of the extraordinary tariff adjustment and passed it on to the generators, in accordance with the percentage established for each concessionaire, recording an asset and a liability. These amounts are monetarily restated in accordance with ANEEL instructions.
In the case of the subsidiary RGE, the Free Energy regulatory asset derives from the fact that the distributor assigned its quota of Itaipu to the rationing program.
As of September 30, 2008, the subsidiaries RGE and CPFL Geração have a reserve for losses on realization of Free Energy amounting to a total of R$ 893. The subsidiary CPFL Geração also recorded a loss of R$ 5,420 in relation to funds to be passed on by distributors, in cases where the deadlines for receipt have passed. On account of passing on RTE, the subsidiary CPFL Sul Paulista recorded a reserve of R$ 2,024 for losses on realization of Free Energy (recorded against liabilities).
Parcel A Refers to the variation in the non-manageable costs corresponding to Parcel "A" of the concession contracts, between January 1 and October 25, 2001. These amounts are restated in accordance with variation in the SELIC rate.
The subsidiaries CPFL Piratininga and CPFL Paulista started to offset Parcel A as from February 2007 and January 2008, respectively, using a mechanism similar to that used for the RTE. For the subsidiary CPFL Sul Paulista, amortization of parcel A will start from February 2009, over the period required to reach the amount recorded. In the case of the subsidiaries CPFL Santa Cruz, CPFL Leste Paulista, CPFL Mococa and CPFL Jaguari, Parcel A was amortized in November 2007, September 2005, March 2007 and August 2005, respectively.
Amortization of Parcel A in the quarter for CPFL Paulista and CPFL Piratininga:
Consolidated | ||
September | ||
30, 2008 | ||
Energy purchased | 45,605 | |
System service charge | 5,428 | |
Fuel Consumption Account - CCC | 14,180 | |
Global Reverse Fund - RGR | (1,636) | |
Inspection fee | (304) | |
Total | 63,273 | |
CPFL Piratininga completed amortization of Parcel A in May 2008.
13
b) Review and Adjustment Tariff
b.1) 1st Tariff review cycle (2003/2004)
a) CPFL Paulista Depreciation Difference
In 2007, by Ratification Resolution nº 443, ANEEL amended the final result of the first periodic tariff review of the subsidiary CPFL Paulista, approved in April 2005, adjusting the energy supply tariffs by 20.66%, due to a review of the calculation of the average depreciation percentage used in the 2003 tariff review. The difference in income resulting from the change in the tariff adjustment from 20.29% to 20.66%, and of the Xe component of the X Factor from 1.1352% to 1.2530%, corresponds to a financial adjustment of R$ 44,868, including PIS and COFINS, which was offset in the 2007 tariff adjustment.
b) CPFL Piratininga Remuneration Base
In 2006, by Ratification Resolution nº 385, and in answer to the application filed by Bandeirante Energia S.A. (Bandeirante) for reconsideration of the tariff review, ANEEL amended the amounts of the remuneration base for the subsidiary CPFL Piratininga.
In accordance with this amendment, ANEEL established that the electric energy supply tariffs should be reset at 10.14% . Accordingly, in line with the new provisional percentage established by ANEEL, the subsidiary CPFL Piratininga recorded a regulatory asset of R$ 26,970 in 2006, in the Consumers, Concessionaires and Licensees account, including PIS and COFINS, which was amortized by October 2007.
ANEEL Resolution nº 336, of 2001, concerning approval of the request for spin-off of Bandeirante and the partial transfer of its concession area to the subsidiary CPFL Piratininga, established that, in the first periodic tariff review, the lower of the rates used for the two concessionaires would apply. As the rate for Bandeirante was 10.14%, against 11.52% for CPFL Piratininga, the rate of 10.14% prevails.
ANEEL Order nº 3209, of October 22, 2007, ratified the result of the subsidiary CPFL Piratiningas first tariff review, making it final.
c) CPFL Santa Cruz, CPFL Mococa and CPFL Leste Paulista Remuneration Base
In 2005, ANEEL finally approved the results of the first periodic tariff review of February 2004 for the subsidiaries CPFL Santa Cruz, CPFL Leste Paulista, CPFL Sul Paulista, CPFL Jaguari and CPFL Mococa. The differences between the provisional and the final percentages for subsidiaries CPFL Santa Cruz, CPFL Leste Paulista and CPFL Mococa were recovered by January 2008.
b.2) 2nd tariff review cycle (2007/2008)
ANEEL provisionally readjusted the tariffs and financial components relating to the tariff review on October 23, 2007, for the subsidiary CPFL Piratininga, on February 3, 2008, for the subsidiaries CPFL Santa Cruz, CPFL Jaguari, CPFL Mococa, CPFL Leste Paulista and CPFL Sul Paulista, on April 08, 2008, for the subsidiary CPFL Paulista and on April 19, 2008, for RGE, as shown below:
14
CPFL | ||||||||||||||||
CPFL Santa | CPFL | CPFL | Leste | CPFL Sul | CPFL | CPFL | ||||||||||
Cruz | Jaguari | Mococa | Paulista | Paulista | Piratininga | Paulista | RGE | |||||||||
Verified revenue | 213,312 | 87,989 | 54,148 | 77,145 | 92,390 | 2,136,914 | 5,175,546 | 1,950,452 | ||||||||
Parcel A - Total | 124,331 | 68,585 | 30,989 | 42,854 | 58,690 | 1,423,875 | 3,314,145 | 1,324,735 | ||||||||
Sector charges | 21,504 | 12,294 | 4,687 | 8,072 | 10,594 | 257,170 | 540,872 | 191,416 | ||||||||
Purchase of energy | 85,546 | 46,524 | 21,357 | 26,643 | 37,956 | 954,779 | 2,394,482 | 948,665 | ||||||||
Energy transmission | 17,281 | 9,767 | 4,945 | 8,139 | 10,140 | 211,926 | 378,791 | 184,654 | ||||||||
Parcel B - Total | 69,506 | 19,386 | 19,019 | 32,786 | 31,802 | 492,479 | 1,180,392 | 533,062 | ||||||||
Gross interest on capital | 14,894 | 4,880 | 3,658 | 11,696 | 7,745 | 154,530 | 351,310 | 179,713 | ||||||||
Depreciation rate | 10,594 | 2,492 | 1,816 | 4,322 | 4,230 | 81,098 | 252,111 | 97,139 | ||||||||
Reference company | 42,555 | 11,794 | 13,419 | 16,581 | 19,602 | 244,232 | 542,368 | 241,662 | ||||||||
Default | 1,463 | 220 | 126 | 187 | 225 | 12,619 | 34,603 | 14,548 | ||||||||
Income required (Parc. A + B) | 193,837 | 87,971 | 50,008 | 75,640 | 90,492 | 1,916,354 | 4,494,537 | 1,857,797 | ||||||||
(-) Other income | (1,291) | (291) | (411) | (569) | (860) | (13,152) | (27,276) | (12,170) | ||||||||
Net required revenue | 192,546 | 87,680 | 49,597 | 75,071 | 89,632 | 1,903,202 | 4,467,261 | 1,845,627 | ||||||||
Financial components | 5,013 | (1,079) | 1,366 | 777 | (524) | 15,767 | 3,336 | 187,320 | ||||||||
Financial repositioning | -9.73% | -0.35% | -8.40% | -2.69% | -2.98% | -10.94% | -13.69% | -5.37% | ||||||||
Financial components (*) | 2.60% | -1.23% | 2.75% | 1.04% | -0.58% | 0.83% | 0.08% | 10.15% | ||||||||
Total repositioning | -7.13% | -1.58% | -5.65% | -1.65% | -3.57% | -10.11% | -13.61% | 4.77% | ||||||||
Factor Xe | 0.22% | 2.10% | 0.24% | 1.07% | 1.31% | 0.73% | 0.83% | 0.66% | ||||||||
Consumer perception (**) | -8.14% | -3.56% | -8.15% | -1.45% | -7.11% | -15.29% | -17.21% | 2.52% |
(*) In addition to the CVA (see item c), the main additional financial components are overcontracting of electric energy, discounts on collection of TUSD, adjustments of connection charges, basic network and CUSD. In the case of the subsidiary RGE, 56% of the financial components refer to the subsidies to cooperatives located within the concession area.
(**) Represents the average effect perceived by consumers, as a result of the elimination from the tariff base of financial components added in the annual adjustment for the previous year.
The provisional 2007 periodic tariff review index for the subsidiary CPFL Piratininga was amended by Ratification Resolution nº 716, of October 21, 2008, due to the provisional inclusion of one of the improvements in method submitted to Public Hearing AP 52/2007, regarding the increase in the percentage of irrecoverable income from 0.5% to 0.6% . Furthermore, the income recorded was amended due to the inclusion of tariffs without discounts, to bring it into line with the methodology adopted by ANEEL for the second tariff review cycle. As a result of these changes, the tariff adjustment changed from -10.94% to -11.76%, without changing the Xe factor, which was provisionally maintained at 0.73% .
In the tariff review process of the subsidiary CPFL Paulista, ANEEL provisionally recalculated the amount to be passed on to the tariffs for Overcontracting as of December 31, 2007. The regulatory agency included a refund of R$ 27,534 to consumers in the tariff review, while the balance at the same date was an asset of R$ 76,798.
On analyzing the process, management of the subsidiary CPFL Paulista reviewed the procedures and applied to the CCEE for reassessment of part of the transactions involving the supply agreement of electric energy traded between the subsidiaries CPFL Paulista and CPFL Brasil.
In view of the above, pending the final result of the analysis by the regulatory agency, in March 2008 the subsidiary CPFL Paulista conservatively recorded a provision of R$ 38,587 for accounts receivable in relation to the CCEE reassessment for the period from January 2005 to February 2008, set against an increase of R$ 17,749 in CCEE revenue and a reduction of R$ 20,838 in CCEE cost. As a result of the reassessment, a provisions were recorded of R$ 25,769 was recorded for the overcontracting asset and a provision of R$ 14,084 for the liability to refund to consumers in the next tariff adjustment, set against Electric energy costs. These records did not affect CPFL Paulistas income.
15
Conservatively, and in order to fully cover the amounts approved by the regulatory agency, the subsidiary CPFL Paulista recorded provisions of R$ 51,029 and R$ 27,534, respectively, in the first quarter of 2008 for realization of an asset and for a liability related to overcontracting, set against the electric energy costs overcontracting, relating to seasonal effects and losses, as defined provisionally by ANEEL. The provision for seasonal effects generated a CVA credit of R$ 9,487. These provisions will be maintained until ANEEL concludes its analyses and ratifies the final result of this review.
Since similar transactions occurred between the subsidiaries CPFL Piratininga and CPFL Brasil, the same provisions procedure was followed by CPFL Piratininga, in March 2008. A provision of R$ 14,453 was recorded in overcontracting and accounts receivable on account of reassessment of CCEE (increase of R$ 4,946 in CCEE income and reduction of R$ 9,507 in CCEE cost, respectively) and a further provision of R$ 45,398 in overcontracting for CCEE operations and losses.
During the quarter, CCEE opposed the reassessment requested by the subsidiaries CPFL Paulista and CPFL Piratininga, since it referred to operations maturing in less than 180 days, and suggested a bilateral adjustment between the CPFL group companies. Accordingly, the subsidiaries CPFL Paulista and CPFL Piratininga (and consequently, CPFL Brasil) reclassified the accounts receivable from CCEE (and accounts payable to CPFL Brasil) to the Concessionaires and Licensees account, at the restated amounts of R$ 44,408 and R$ 16,281, respectively.
These provisions will be maintained until ANEEL completes its analyses and ratifies the final result of the tariff review.
b.3) Tariff adjustment
a) CPFL Paulista Tariff adjustment of 2007
On establishing the Annual Tariff Adjustment Rate (IRT) of the subsidiary CPFL Paulista on April 3, 2007, in Ratification Resolution No. 445, and in order to review the PIS and COFINS amounts of the generators, ANEEL recalculated the electric energy cost of the first 2005 IRT contracts. As the cost of electric energy affects adjustment of the consumer tariff and calculation of CVA, the recalculation, which resulted in a reduction in the average energy price, generated a liability to be reimbursed to the consumers and an additional CVA asset. Also, the CVA amounts approved by ANEEL in the 2007 IRT excluded the electric energy contract surpluses, in accordance with item 61 of ANEEL Technical Note nº 069 of March 22, 2007. These effects basically explain the adjustments (and related amounts realized to April 2008) of R$ 98,635, recorded in Other Accounts Payable, and R$ 177,710, recorded in Deferral of Tariff Costs, set against Cost of Electric Energy (note 25).
b) CPFL Piratininga Tariff adjustment of 2008
In Ratification Resolution nº 717, of October 21, 2008, ANEEL set the annual tariff review at an average percentage of 16.54%, as follows: 10.92% in relation to the annual tariff adjustment and 5.62% in relation to the financial components not included in the annual tariff review.
The average percentage adjustment to be passed on to the final consumer is 15.03% .
The adjustment authorized by ANEEL is comprised by the following items:
16
Income Recorded | 2,029,124 | |
Parcel A | 1,624,895 | |
Parcel B | 625,758 | |
Income Required (Parcel A + B) | 2,250,653 | |
Financial Components | 126,610 | |
Total Revenue | 2,377,263 | |
Financial Repositioning | 10.92% | |
Financial Components | 5.62% | |
Total Tariff Adjustment | 16.54% |
Calculation of Parcel A includes:
Sector charges of R$ 304,080 (of which CCC and CDE account for around 69%);
Energy Purchased amounting to R$ 1,083,246;
Energy Transmission amounting to R$ 237,569.
The financial components not included in the tariff review comprise:
Deferred Tariff Costs and Gains Variations (CVA) amounting to R$ 56,400;
Overcontracting of energy pass-through amounting to (R$ 11,439);
Discounts on collection of the Tariff for Use of the Distribution System (TUSD) of R$ 14,834;
Advances relating to the subsidies to the Free Market TUSD, Cooperatives and low income consumers, of R$ 13,063, R$
9,214 and R$ 10,792 respectively;
Portion of adjustment of the Basic Border Network, to be passed on to the transmission companies, amounting to R$ 42,248;
Parcel A liabilities of (R$ 9.847) to be offset;
Other
components totaling R$ 1,345.
An Xe Factor of 0.73% was provisionally applied in the 2008 tariff adjustment as a reduction factor for Parcel B.
In addition to CVA (see item c), the main additional financial components of the assets and liabilities recorded are as follows:
Increase in PIS and COFINS
Refers to the difference between the costs relating to PIS and COFINS calculated by applying the current legislation, and those incorporated into tariff to April 2005 for the subsidiary CPFL Paulista and October 2005 for the subsidiary CPFL Piratininga.
The amounts approved in 2006 and 2007 were recorded in the Prepaid Expenses and were amortized to April 2008.
In view of the discussions concerning the nature of this credit, the Company conservatively opted to record a liability of the same amount as the assets, posted in the account Other Accounts Payable (note 22), which is monetarily restated based on the variation of the IGP-M rate.
17
Overcontracting
The electricity distribution concessionaires are obliged to guarantee 100% of their energy and power market through contracts approved, registered and ratified by ANEEL. The distribution concessionaires are also assured that costs or income derived from overcontracting of electric energy will be passed on to the tariffs, limited to 3% of the energy load requirement. See item b.2 for further details on changes during this period, relating to the tariff review and adjustment of CPFL Paulista and CPFL Piratininga.
It should be noted that, during the 2008 annual tariff adjustment process of the subsidiary CPFL Piratininga, ANEEL decided that, in view of the provisions of Regulatory Resolution n° 255/2007 the short-term energy shortfalls should also be treated by the methodology of passing on overcontracting and not as CVA, in accordance with the procedure followed by the subsidiaries CPFL Piratininga and CPFL Paulista. Accordingly, the subsidiaries reclassified CVA of R$ 52,529 and R$ 51,624, respectively, to the overcontracting account. Part of the amount was recorded in noncurrent, as the shortfalls occurred as from 2008 and, as ratification of the overcontracting applies to the calendar year prior to the date of the tariff adjustment, these amounts will only be ratified in the next adjustments for CPFL Paulista and CPFL Piratininga.
Provisions for and realization of overcontracting are recorded in Prepaid Expenses (note 9) or Other Accounts Payable (note 22) and set against Cost of Electric Energy (note 25).
Discounts on the TUSD and Irrigation
The subsidiaries record regulatory assets in relation to the special discounts on the TUSD, for the free market with electric energy supplied by alternative energy sources and on the tariffs for irrigation and aquaculture.
Discounts on and realization of TUSD and irrigation are recorded in Consumers, Concessionaires and Licensees and set against Revenue from Electricity Sales (note 24) account.
Since the 2008 tariff review, ANEEL has granted tariff advances in relation to the estimate of these discounts for the next tariff period, which has resulted in a reduction in these assets.
Discounts on the TUSD Generation
The subsidiary RGE recorded a TUSD Generators asset in accordance with Resolution nº 497/2007, amended by Resolution nº 547/2007, which established new tariffs for shared Use of the Distribution System for the generation plants connected to the Other Transmission Facilities DITs. A liability of R$ 11,679 was recorded in 2007, and passed on to the CEEE, and consequently, a balancing item was recorded as a regulatory asset in the 2008 Tariff Review.
18
The following table shows the changes in the items described above, relating to Tariff Review and Adjustments, during the quarter ended September 30, 2008:
Consolidated - Assets and Liabilities, Net | ||||||||||||
Other financial components (*) | Increase in PIS and COFINS (b.3) | Overcontracting (b.3) | Discounts on the TUSD and irrigation (b.3) | Discounts on the TUSD Generation (b.3) | Total | |||||||
Balance as of June 30, 2008 | (3,831) | (121,301) | (52,296) | 71,051 | 9,343 | (97,034) | ||||||
Constitution | (3,171) | - | 90,128 | 13,452 | - | 100,409 | ||||||
Restatement | (1) | (1,839) | 372 | 603 | - | (865) | ||||||
Amortization | 3,087 | - | 8,303 | (25,411) | (2,920) | (16,941) | ||||||
Balance as of September 30, 2008 | (3,916) | (123,140) | 46,507 | 59,695 | 6,423 | (14,431) | ||||||
(*) The effects of the provision were recorded in Operating Income (R$ 300), Energy Cost (R$ -22) and Accounts Receivable (R$ -3,449).
The effects of amortization were recorded in Operating Revenue (R$ 5,657), Energy Cost (R$ -607), Network Usage Charges (R$ -996), Operating Expense (R$ -960), and Financial Income (Expense) (R$ -7).
c) Deferred Tariff Costs and Gains Variations (CVA)
Refer to the mechanism for compensation of the variations in unmanageable costs incurred by the electric energy distribution concessionaires. These variations are calculated in accordance with the difference between the expenses effectively incurred and the expenses estimated at the time of setting the tariffs for the annual tariff adjustments.
The CVA amounts are restated at the SELIC rate.
Consolidated | ||||||||||
Balance as of June 30, 2008 | Changes | Balance as of September 30, 2008 | ||||||||
Deferral | Amortization | Restatement | ||||||||
ASSET | ||||||||||
Energy purchased | 318,249 | (1,900) | (57,728) | 1,998 | 260,619 | |||||
System service charge | 95,504 | 51,047 | (1,401) | 2,572 | 147,722 | |||||
Fuel consumption account CCC | 4,359 | 48,155 | (1,317) | 211 | 51,408 | |||||
Energy development account - | ||||||||||
CDE | 9,242 | 1,426 | (4,217) | 192 | 6,643 | |||||
Total | 427,354 | 98,728 | (64,663) | 4,973 | 466,392 | |||||
LIABILITY | ||||||||||
Energy purchased | (267,524) | (62,815) | 49,829 | (7,028) | (287,538) | |||||
System service charge | (31,039) | 7,701 | 10,306 | 294 | (12,738) | |||||
CCC | (23,191) | (2,893) | 19,072 | (164) | (7,176) | |||||
Energy development account - | ||||||||||
CDE | - | (1,151) | (1) | (4) | (1,156) | |||||
Total | (321,754) | (59,158) | 79,206 | (6.902) | (308,608) | |||||
19
As mentioned in Note b.3.b, in view of the 2008 tariff adjustment for CPFL Piratininga, the subsidiaries CPFL Piratininga and CPFL Paulista reclassified the amounts of R$ 52,529 and R$ 51,624 from the CVA assets account to an overcontracting account, comprising principal of R$ 49,022 and R$ 48,436 and restatement of R$ 3,507 and R$ 3,188, respectively.
d) Low Income Consumers Subsidy
Law nº 10.438, of April 26, 2002 and Decree nº 4.336 of August 15, 2002 established new guidelines and criteria for classification of consumer units in the low-income residential sub-category. According to the legislation, this new criteria encompasses consumer units served by monophase circuits, with an average monthly consumption in the last 12 months of less than 80kWh, and consumer units with an average monthly consumption in the last 12 months of 80 to 220kWh, provided certain specific requirements are complied with, such as enrollment in Federal Government Social Programs.
As the subsidies granted to the consumers are to be offset in the ambit of the concessionaire itself, through the tariff charged to the other consumers in the market served, and as the introduction of this new criteria impacts the current tariff levels, in addition to the principle of reasonable tariffs for the rest of the market, ANEEL established a new methodology for calculating the subsidy, which has been applied monthly since May 2002.
As from the 2008 tariff adjustment, ANEEL also provided for tariff advances to cover the subsidies to consumers. Thus the difference between the subsidy actually granted and the advance received will be calculated monthly for purposes of inclusion in the next tariff adjustment.
The changes in balances in the quarter as of September 30, 2008, are as follows:
Consolidated | ||||
Asset | Liability | |||
Balances as of June 30, 2008 | 52,712 | (10,360) | ||
Revenue loss (gain) | 19,830 | (1,936) | ||
Amortization of tariff adjustment | (780) | 621 | ||
Receivables approved by ANEEL | (8,057) | - | ||
Monetary Restatement | - | (18) | ||
Balances as of September 30, 2008 | 63,705 | (11,693) | ||
( 4 ) CASH AND BANKS | ||
Parent Company | Consolidated | |||||||
September | June 30, | September | June 30, | |||||
30, 2008 | 2008 | 30, 2008 | 2008 | |||||
Bank deposits | 4,675 | 324 | 92,109 | 93,145 | ||||
Short-term financial investments | 1,048 | 7,302 | 668,852 | 776,466 | ||||
Total | 5,723 | 7,626 | 760,961 | 869,611 | ||||
20
The short-term financial investments are operations with financial institutions under normal market conditions and rates, mainly remunerated based on the variation of the CDI, and are available for use in the operations of the Company and its subsidiaries.
( 5 ) CONSUMERS, CONCESSIONAIRES AND LICENSEES | ||
The consolidated balance mainly refers to electricity sales activities as of September 30, 2008 and June 30, 2008, as follows:
Consolidated | ||||||||||
Balances | Past due | Total | ||||||||
Coming | Up to 90 | More than | September | June 30, | ||||||
due | days | 90 days | 30, 2008 | 2008 | ||||||
Current | ||||||||||
Consumer Classes | ||||||||||
Residential | 235,462 | 152,096 | 24,385 | 411,943 | 418,779 | |||||
Industrial | 173,095 | 56,494 | 29,414 | 259,003 | 278,001 | |||||
Commercial | 91,811 | 38,549 | 21,958 | 152,318 | 158,377 | |||||
Rural | 25,332 | 6,190 | 1,368 | 32,890 | 29,859 | |||||
Public administration | 25,747 | 3,498 | 2,514 | 31,759 | 34,144 | |||||
Public lighting | 51,678 | 3,630 | 36,336 | 91,644 | 90,827 | |||||
Public service | 22,612 | 6,787 | 1,277 | 30,676 | 37,768 | |||||
Billed | 625,737 | 267,244 | 117,252 | 1,010,233 | 1,047,755 | |||||
Unbilled | 381,589 | - | - | 381,589 | 376,215 | |||||
Financing of consumers' debts | 21,716 | 3,122 | 11,013 | 35,851 | 33,352 | |||||
Regulatory asset (note 3) | 63,088 | - | - | 63,088 | 74,910 | |||||
CCEE transactions (a) | 32,132 | - | - | 32,132 | 72,479 | |||||
Concessionaires and licensees (b) | 101,345 | - | 4 | 101,349 | 86,708 | |||||
Other | 46,729 | - | - | 46,729 | 42,861 | |||||
Total | 1,272,336 | 270,366 | 128,269 | 1,670,971 | 1,734,280 | |||||
Non current | ||||||||||
Financing of consumers' debts | 137,538 | - | - | 137,538 | 138,963 | |||||
Regulatory asset (note 3) | 3,310 | - | - | 3,310 | 5,427 | |||||
CCEE transactions (a) | 41,797 | - | - | 41,797 | 41,800 | |||||
Total | 182,645 | - | - | 182,645 | 186,190 | |||||
a) Electric Energy Trading Chamber (CCEE) transactions
The amounts refer to the accounting records of the Electric Energy Trading Chamber CCEE for the period September 2000 to September 2008. The non-current amount receivable for energy sales mainly comprises: (i) legal adjustments, made as a result of suits brought by agents in the sector; (ii) lawsuits challenging the CCEE accounting for the period September 2000 to December 2002; (iii) provisional accounting entries made by the CCEE; (iv) amounts negotiated bilaterally pending settlement. The subsidiaries consider that there is no significant risk on the realization of these assets and consequently no provisions were posted in the accounts. The changes in the current balance are due mainly to reclassification of accounts receivable, in accordance with the CCEE instruction mentioned in Note 3.b.2.
21
b) Concessionaires and Licensees
Refers basically to accounts receivable in respect of the supply of electricity to other Concessionaires and Licensees, mainly by the subsidiaries CPFL Geração and CPFL Brasil, and to certain transactions relating to the partial spin-off of Bandeirante by the subsidiary CPFL Piratininga. The amounts are set off against accounts payable, through a settlement of accounts.
( 6 ) FINANCIAL INVESTMENTS | ||
In April 2005, through a Private Credit Agreement, the Company acquired the credit arising from the Purchase and Sale of Electricity Agreement between Companhia Energética de São Paulo (CESP) (seller) and CPFL Brasil (purchaser), referring to the supply of energy for a period of 8 years. The amounts handed over by the Company to CESP will be settled using the funds derived from the acquisition of energy produced by that company for CPFL Brasil.
As of September 30, 2008 the parent companys short-term balance is R$ 38,250 (R$ 36,316 as of June 30, 2008), and the long-term balance is R$ 91,152 (R$ 94,796 as of June 30, 2008). The operation is subject to interest of 17.5% p.a., plus the annual variation of the IGP-M, and is being amortized in monthly installments of amounts corresponding to the purchase of energy.
( 7 ) RECOVERABLE TAXES | ||
Parent Company | Consolidated | |||||||
September | June 30, | September | June 30, | |||||
30, 2008 | 2008 | 30, 2008 | 2008 | |||||
Current | ||||||||
Social contribution prepayments - CSLL | 1,590 | - | 6,720 | 6,623 | ||||
Income tax prepayments - IRPJ | 3,190 | - | 9,566 | 7,086 | ||||
Social contribution and income tax | 18,941 | 33,184 | 35,026 | 52,135 | ||||
Withholding income tax - IRRF | 16,777 | 16,542 | 44,073 | 36,623 | ||||
ICMS (State VAT) | - | - | 51,675 | 58,699 | ||||
PIS (Tax on revenue) | - | - | 3,592 | 3,726 | ||||
COFINS (Tax on revenue) | 9 | - | 13,355 | 14,620 | ||||
INSS (Social security) | - | - | 2,293 | 2,755 | ||||
Other | 64 | 73 | 4,864 | 4,429 | ||||
Total | 40,571 | 49,799 | 171,164 | 186,696 | ||||
Noncurrent | ||||||||
Social contribution tax - CSLL | - | - | 26,013 | 25,664 | ||||
Income tax - IRPJ | - | - | 891 | 872 | ||||
PIS (Tax on Revenue) | 2,787 | 2,787 | 2,855 | 2,855 | ||||
ICMS (State VAT) | - | - | 65,373 | 66,858 | ||||
INSS (Social security) | - | - | 97 | 97 | ||||
Other | - | - | 584 | 557 | ||||
Total | 2,787 | 2,787 | 95,813 | 96,903 | ||||
22
( 8 ) ALLOWANCE FOR DOUBTFUL ACCOUNTS | ||
Consolidated | ||
Balance as of June 30, 2008 | (89,305) | |
Additional allowance recorded | (21,931) | |
Recovery of revenue | 13,850 | |
Write-off of accounts receivable | 12,785 | |
Balance as of September 30, 2008 | (84,601) | |
( 9 ) PREPAID EXPENSES | ||
Consolidated | ||||||||
Current | Noncurrent | |||||||
September | June 30, | September | June 30, | |||||
30, 2008 | 2008 | 30, 2008 | 2008 | |||||
Regulatory asset (note 3) | 104,787 | 73,221 | 79,942 | 2,115 | ||||
Other | 19,520 | 23,420 | 12,166 | 12,500 | ||||
Total | 124,307 | 96,641 | 92,108 | 14,615 | ||||
( 10 ) DEFERRED TAXES |
10.1 Composition of the tax credits:
Parent Company | Consolidated | |||||||
September | June 30, | September | June 30, | |||||
30, 2008 | 2008 | 30, 2008 | 2008 | |||||
Social Contribution Credit on: | ||||||||
Tax loss carryforwards | 14,599 | 13,918 | 30,660 | 31,575 | ||||
Tax benefit on merged goodwill | - | - | 220,580 | 224,366 | ||||
Temporarily nondeductible differences | 111 | 345 | 84,822 | 86,196 | ||||
Subtotal | 14,710 | 14,263 | 336,062 | 342,137 | ||||
Income Tax Credit on: | ||||||||
Tax loss carryforwards | 56,128 | 54,849 | 69,318 | 72,287 | ||||
Tax benefit on merged goodwill | - | - | 668,730 | 680,225 | ||||
Temporarily nondeductible differences | 14,365 | 14,670 | 248,722 | 252,192 | ||||
Subtotal | 70,493 | 69,519 | 986,770 | 1,004,704 | ||||
PIS and COFINS Credit on: | ||||||||
Temporarily nondeductible differences | - | - | 19,649 | 19,776 | ||||
Subtotal | - | 19,649 | 19,776 | |||||
Total | 85,203 | 83,782 | 1,342,481 | 1,366,617 | ||||
Current | 9,410 | 9,645 | 227,443 | 226,485 | ||||
Non current | 75,793 | 74,137 | 1,115,038 | 1,140,132 | ||||
85,203 | 83,782 | 1,342,481 | 1,366,617 | |||||
The projections of future results that guided and support the deferred tax credits recorded by the Company and its subsidiaries were approved by the Board of Directors and examined by the Audit 24 Committee, and are reviewed annually. For the quarter ended September 30, 2008, management does not expect relevant changes in the projections disclosed in the financial statements as of December 31, 2007.
23
10.2 Tax Credit on Tax Benefit on Merged Goodwill:
The tax benefit on merged goodwill refers to the tax credit calculated on the merged goodwill on purchase and is recorded in accordance with CVM Instructions nº 319/1999 and nº 349/2001. The benefit is realized in proportion to amortization of the merged goodwill, in accordance with the net projected profit of the subsidiaries during the remaining term of the concession, as shown in note 13.2.
Consolidated | ||||||||
September 30, 2008 | June 30, 2008 | |||||||
Social | Social | |||||||
Contribution | Income Tax | Contribution | Income Tax | |||||
CPFL Paulista | 115,975 | 322,153 | 118,379 | 328,831 | ||||
CPFL Piratininga | 25,808 | 88,535 | 26,331 | 90,311 | ||||
RGE | 65,456 | 181,822 | 65,773 | 182,701 | ||||
CPFL Santa Cruz | 7,460 | 23,499 | 7,795 | 24,511 | ||||
CPFL Leste Paulista | 1,776 | 4,936 | 1,839 | 5,109 | ||||
CPFL Sul Paulista | 1,740 | 4,832 | 1,801 | 5,003 | ||||
CPFL Jaguari | 1,661 | 4,615 | 1,720 | 4,776 | ||||
CPFL Mococa | 704 | 1,953 | 728 | 2,022 | ||||
CPFL Geração | - | 36,385 | - | 36,961 | ||||
Total | 220,580 | 668,730 | 224,366 | 680,225 | ||||
24
10.3 Accumulated balances on temporary nondeductible differences:
Consolidated | ||||||||||||
September 30, 2008 | June 30, 2008 | |||||||||||
Social | Income | Social | Income | |||||||||
Contribution | Tax | PIS and | Contribution | Tax | PIS and | |||||||
Tax (CSLL) | (IRPJ) | COFINS | Tax (CSLL) | (IRPJ) | COFINS | |||||||
Reserve for contingencies | 11,311 | 45,377 | - | 11,734 | 46,197 | - | ||||||
Pension plan expenses | 5,114 | 15,202 | - | 5,389 | 15,965 | - | ||||||
Allowance for doubtful accounts | 6,997 | 19,438 | - | 8,252 | 22,919 | - | ||||||
- | ||||||||||||
Provision for realization of RTE | 221 | 614 | 206 | 572 | - | |||||||
Research and Development and | - | |||||||||||
Energy Efficiency Programs | 14,713 | 40,869 | 14,271 | 39,640 | - | |||||||
Profit sharing | 1,760 | 5,633 | - | 1,193 | 3,862 | - | ||||||
Differences in revaluation rates | 10,482 | 29,113 | - | 10,610 | 29,473 | - | ||||||
Regulatory liability - Increase in PIS | - | |||||||||||
and COFINS | 10,199 | 28,330 | 10,149 | 28,191 | - | |||||||
Provision for CCEE reassessment | ||||||||||||
and overcontracting (note 3.b.2) | 18,043 | 50,117 | 19,649 | 18,233 | 50,645 | 19,776 | ||||||
Other | 5,982 | 14,029 | - | 6,159 | 14,728 | - | ||||||
Total | 84,822 | 248,722 | 19,649 | 86,196 | 252,192 | 19,776 | ||||||
25
10.4 - Reconciliation of the income tax and social contribution amounts reported in the income statements for the quarters and nine months ended September 30, 2008 and 2007:
Parent Company | ||||||||
CSLL | ||||||||
2008 | 2007 | |||||||
3rd Quarter | Nine months | 3rd Quarter | Nine months | |||||
Income before CSLL | 332,588 | 1,052,687 | 423,784 | 1,348,982 | ||||
Adjustments to Reflect Effective Rate: | ||||||||
- Equity in Subsidiaries | (382,324) | (1,104,671) | (464,319) | (1,400,162) | ||||
- Goodwill Amortization | 25,549 | 76,649 | 21,940 | 59,254 | ||||
- Other Additions | 1,548 | 2,480 | 229 | 246 | ||||
Calculation base | (22,639) | 27,145 | (18,366) | 8,320 | ||||
Statutory Tax Rate | 9% | 9% | 9% | 9% | ||||
Total | 2,038 | (2,443) | 1,653 | (749) | ||||
Parent Company | ||||||||
IRPJ | ||||||||
2008 | 2007 | |||||||
3rd Quarter | Nine months | 3rd Quarter | Nine months | |||||
Income before IRPJ | 332,588 | 1,052,687 | 423,784 | 1,348,982 | ||||
Adjustments to Reflect Effective Rate: | ||||||||
- Equity in Subsidiaries | (382,324) | (1,104,671) | (464,319) | (1,400,162) | ||||
- Goodwill Amortization | 32,299 | 96,903 | 28,476 | 78,864 | ||||
- Other Additions | 1,592 | 2,570 | 52 | 137 | ||||
Calculation base | (15,845) | 47,489 | (12,007) | 27,821 | ||||
Statutory Tax Rate | 25% | 25% | 25% | 25% | ||||
Tax (Credit) Debit Result | 3,961 | (11,872) | 3,002 | (6,955) | ||||
- Tax credit allocated | 4 | 136 | - | - | ||||
Total | 3,965 | (11,736) | 3,002 | (6,955) | ||||
26
Consolidated | ||||||||
CSLL | ||||||||
2008 | 2007 | |||||||
3rd Quarter | Nine months | 3rd Quarter | Nine months | |||||
Income before CSLL | 527,721 | 1,471,421 | 669,875 | 1,914,486 | ||||
Adjustments to Reflect Effective Rate: | ||||||||
- Goodwill Amortization | 27,065 | 81,193 | 23,609 | 59,219 | ||||
- CMC Realization | 3,765 | 12,227 | 5,368 | 14,411 | ||||
- Effect of presumed profit system | (10,528) | (32,710) | (5,998) | (21,420) | ||||
- Other Additions (Deductions), Net | 5,200 | (13,735) | (17,555) | 8,188 | ||||
Calculation base | 553,223 | 1,518,396 | 675,299 | 1,974,884 | ||||
Statutory Tax Rate | 9% | 9% | 9% | 9% | ||||
Tax Debit Result | (49,790) | (136,656) | (60,777) | (177,740) | ||||
- Tax credit allocated (not allocated) | (383) | (1,155) | - | - | ||||
Total | (50,173) | (137,811) | (60,777) | (177,740) | ||||
Consolidated | ||||||||
IRPJ | ||||||||
2008 | 2007 | |||||||
3rd Quarter | Nine months | 3rd Quarter | Nine months | |||||
Income before IRPJ | 527,721 | 1,471,421 | 669,875 | 1,914,486 | ||||
Adjustments to Reflect Effective Rate: | ||||||||
- Goodwill Amortization | 38,476 | 115,429 | 37,212 | 106,159 | ||||
- Effect of presumed profit system | (13,029) | (39,526) | (8,784) | (28,085) | ||||
- Other Additions (Deductions), Net | (6,901) | (2,213) | 14,201 | 21,127 | ||||
Calculation base | 546,267 | 1,545,111 | 712,504 | 2,013,687 | ||||
Statutory Tax Rate | 25% | 25% | 25% | 25% | ||||
Tax Debit Result | (136,567) | (386,278) | (178,126) | (503,422) | ||||
- Tax credit allocated | (9) | 90 | - | 40,234 | ||||
Total | (136,576) | (386,188) | (178,126) | (463,188) | ||||
27
( 11 ) OTHER CREDITS | ||
Consolidated | ||||||||
Current | Noncurrent | |||||||
September | June 30, | September | June 30, | |||||
30, 2008 | 2008 | 30, 2008 | 2008 | |||||
Receivable from CESP | 19,655 | 16,365 | 9,800 | 16,299 | ||||
Receivable from Shareholders BAESA (a) | - | - | 41,082 | 39,805 | ||||
Advances - Fundação CESP | 6,768 | 5,320 | - | - | ||||
Pledges, funds and tied deposits | 2,284 | 1,422 | 90,705 | 94,378 | ||||
Fund tied to Foreign Currency Loans | - | - | 19,462 | 15,978 | ||||
Orders in progress | 15,293 | 9,525 | - | - | ||||
Services rendered to third parties | 23,516 | 24,729 | - | - | ||||
Reimbursement RGR | 5,091 | 4,325 | 707 | 707 | ||||
Advance energy purchase agreements (b) | 4,101 | 1,430 | 34,589 | 28,624 | ||||
Other | 27,987 | 31,023 | 11,569 | 9,210 | ||||
Total | 104,695 | 94,139 | 207,914 | 205,001 |
a) Credits receivable Shareholder BAESA - In the period November 1, 2005 to April 30, 2008, differences in the prices used in billing energy sold to the shareholders, different payment terms and other factors resulted in variations in contributions from the shareholders towards the subsidiary BAESAs results.
To settle this question, the BAESAs shareholders agreed that the contributions made by the subsidiary CPFL Geração should be restated in accordance with the variation in the CDI rate, amortized over 36 months as from January, 2009, and offset by an increase in the price of energy billed to the shareholders Alcoa Alumínio, Companhia Brasileira de Alumínio, Camargo Corrêa Cimentos and DME Energética, and a reduction in the price to the subsidiary CPFL Geração. As of June 2008, as a result of the final agreement, the accounts receivable were increased by R$ 8,011, with restatement of R$ 1,277 in the quarter, in accordance with the variation in the CDI rate, set against Other Operating Income. From May 1, 2008, the question of the differences in contribution towards BAESA's income was solved through approval by ANEEL of restructuring of the energy sales contracts, whereby BAESA sells the energy quota corresponding to its participation to the subsidiary CPFL Geração under the same conditions and prices as the other shareholders, and CPFL Geração trades this energy with CPFL Paulista and CPFL Piratininga.
b) Advance Energy Purchase Agreements - as a result of the partnership between CPFL Bioenergia and Baldin Bioenergia, as mentioned in Note 1, an agreement was signed for acquisition of energy for future deliver, trading Baldin Bioenergia's surplus energy. CPFL Bioenergia paid an advance of R$ 5,965 in the quarter.
( 12 ) ADVANCE FOR FUTURE CAPITAL INCREASE |
The advance refers to cash transferred to the subsidiary Perácio for acquisition of the indirect subsidiary CPFL Jaguariúna.
28
( 13 ) INVESTMENTS | ||
Parent Company | Consolidated | |||||||
September | June 30, | September | June 30, | |||||
30, 2008 | 2008 | 30, 2008 | 2008 | |||||
Permanent equity interests | 3,422,954 | 3,080,625 | - | - | ||||
Goodwill / Negative goodwill | 1,557,816 | 1,590,115 | 1,752,690 | 1,791,166 | ||||
Leased assets | - | - | 704,953 | 710,665 | ||||
Other | - | - | 115,774 | 115,705 | ||||
Total | 4,980,770 | 4,670,740 | 2,573,417 | 2,617,536 | ||||
13.1 - Permanent Equity Interests:
The principal information on the investments in direct permanent equity Interests is as follows:
Investment | September 30, 2008 | September 30, | June 30, | 3rd Quarter | 3rd Quarter | |||||||||||||
2008 | 2008 | 2008 | 2007 | |||||||||||||||
Number of Shares held (thousand) | Share of Capital - % | Shareholders Equity | ||||||||||||||||
Capital | Net Income | Shareholders Equity Interest | Equity in Subsidiaries | |||||||||||||||
Companhia Paulista de Força e Luz | 36,324 | 100% | 36,324 | 644,708 | 447,291 | 644,708 | 497,388 | 147,320 | 199,985 | |||||||||
Companhia Piratininga de Força e Luz | 53,031,259 | 100% | 54,832 | 290,612 | 154,057 | 290,612 | 230,538 | 60,074 | 94,876 | |||||||||
Rio Grande Energia S.A. | 807,168 | 100% | 830,924 | 1,137,378 | 139,517 | 1,137,378 | 1,100,386 | 36,992 | 44,215 | |||||||||
Companhia Luz e Força Santa Cruz S/A | 371,772 | 100% | 38,167 | 87,733 | 24,228 | 87,726 | 120,125 | 7,598 | - | |||||||||
CPFL Geração de Energia S.A. | 205,487,716 | 100% | 1,039,618 | 1,184,189 | 171,091 | 1,184,189 | 1,128,591 | 55,598 | 52,202 | |||||||||
CPFL Comercialização Brasil S.A. | 2,999 | 100% | 2,999 | 68,575 | 137,963 | 68,575 | 3,597 | 64,978 | 59,177 | |||||||||
CPFL Atende Centro de Contr. e Atend. | ||||||||||||||||||
Ltda. | 1 | 100% | 1 | (27) | (28) | (27) | - | (28) | - | |||||||||
Nova 4 Participações Ltda. | - | 100% | - | - | - | - | - | - | 3,410 | |||||||||
Perácio Participações Ltda. | - | 100% | - | 9,793 | 30,554 | 9,793 | - | 9,793 | 10,454 | |||||||||
Total | 3,422,954 | 3,080,625 | 382,325 | 464,319 | ||||||||||||||
The changes in the balance of equity interests are as follows:
CPFL | CPFL | CPFL Santa | ||||||||||||||||
Paulista | Piratininga | RGE | Cruz | CPFL Geração | CPFL Brasil | Perácio | CPFL Atende | Total | ||||||||||
As of June 30, 2008 | 497,388 | 230,538 | 1,100,386 | 120,125 | 1,128,591 | 3,597 | - | - | 3,080,625 | |||||||||
Payment of capital | - | - | - | - | - | - | - | 1 | 1 | |||||||||
Capital Reduction | - | - | - | (39,997) | - | - | - | - | (39,997) | |||||||||
Equity in subsidiaries | 147,320 | 60,074 | 36,992 | 7,598 | 55,598 | 64,978 | 9,793 | (28) | 382,325 | |||||||||
As of September 30, 2008 | 644,708 | 290,612 | 1,137,378 | 87,726 | 1,184,189 | 68,575 | 9,793 | (27) | 3,422,954 | |||||||||
CPFL Santa Cruz
The company received R$ 39,997 on July 15, 2008 in relation to reduction of the capital of CPFL Santa Cruz, without canceling shares, resulting in amendment of Article 5 of the bylaws. The objective of the reduction was to adjust the capital structure to bring it into line with the other distributors in the group. The operation was approved at an Extraordinary General Meeting (EGM) held on June 26, 2008.
29
13.2 Goodwill and negative goodwill:
Consolidated | ||||||||||
September 30, 2008 | June 30, 2008 | Amortization Rate 2008 |
||||||||
Historical | Accumulated | |||||||||
Cost | Amortization | Net Value | Net Value | |||||||
Goodwill on acquisition | ||||||||||
Parent company | ||||||||||
CPFL Paulista | 292,033 | (54,329) | 237,704 | 242,911 | 6.23% | |||||
CPFL Piratininga | 39,065 | (6,791) | 32,274 | 32,927 | 6.70% | |||||
CPFL Geração | 54,555 | (10,562) | 43,993 | 44,835 | 6.21% | |||||
RGE | 3,150 | (143) | 3,007 | 3,054 | 6.07% | |||||
Other | 26 | (2) | 24 | 25 | 0 to 11.81% | |||||
388,829 | (71,827) | 317,002 | 323,752 | |||||||
Subsidiaries | ||||||||||
CPFL Jaguariúna | 142,793 | (17,763) | 125,030 | 129,246 | 11.81% | |||||
ENERCAN | 10,233 | (790) | 9,443 | 9,566 | 4.83% | |||||
Barra Grande | 3,081 | (598) | 2,483 | 2,535 | 6.65% | |||||
Foz do Chapecó | 7,319 | - | 7,319 | 7,319 | - | |||||
Other | 17,517 | (10,047) | 7,470 | 7,740 | 4.99% to 11.65% | |||||
180,943 | (29,198) | 151,745 | 156,406 | |||||||
Subtotal | 569,772 | (101,025) | 468,747 | 480,158 | ||||||
Goodwill reassessment | ||||||||||
Parent company | ||||||||||
CPFL Paulista | 1,074,026 | (266,599) | 807,427 | 824,163 | 6.23% | |||||
CPFL Piratininga | 115,762 | (20,128) | 95,634 | 97,572 | 6.70% | |||||
RGE | 310,128 | (24,349) | 285,779 | 290,322 | 5.88% | |||||
CPFL Santa Cruz | 61,685 | (9,711) | 51,974 | 54,306 | 15.12% | |||||
1,561,601 | (320,787) | 1,240,814 | 1,266,363 | |||||||
Subsidiaries | ||||||||||
CPFL Leste Paulista | 21,131 | (8,103) | 13,028 | 13,486 | 8.67% | |||||
CPFL Sul Paulista | 20,941 | (8,183) | 12,758 | 13,208 | 8.59% | |||||
CPFL Jaguari | 20,026 | (7,844) | 12,182 | 12,611 | 8.56% | |||||
CPFL Mococa | 8,444 | (3,283) | 5,161 | 5,340 | 8.49% | |||||
70,542 | (27,413) | 43,129 | 44,645 | |||||||
Subtotal | 1,632,143 | (348,200) | 1,283,943 | 1,311,008 | ||||||
Total Parent company | 1,950,430 | (392,614) | 1,557,816 | 1,590,115 | ||||||
Total Consolidated | 2,201,915 | (449,225) | 1,752,690 | 1,791,166 | ||||||
30
The goodwill arising from the acquisitions of the equity interests is amortized in proportion to the net income curves projected for the remaining term of the concession contract. The rates are subject to periodical review.
Goodwill on Purchase:
Parent Company: Refers mainly to acquisition of all the shares held by minority shareholders (share merger) of CPFL Geração in June 2005, CPFL Paulista and CPFL Piratininga in November 2005, and RGE in December 2007.
Goodwill reassessment
In order to comply with ANEEL instructions and prevent the goodwill amortization resulting from the merger of the parent company from causing a negative impact on dividends paid to the shareholders, the subsidiaries apply the concepts of CVM Instructions nº 319/1999 and nº 349/2001 in relation to this goodwill. Accordingly, a reserve was recorded, set against the subsidiaries equity reserve, so that the effect on the equity reflects the tax benefit of the merged goodwill. These changes affected the Company's investment in the subsidiaries, and goodwill was recorded in the parent company in order to restore it. The goodwill is amortized by the Company in proportion to the projected net income curves for the remaining term of the subsidiaries concession.
13.3 - Leased Assets
In the consolidated financial statements, the leased assets refer principally to the assets of the Serra da Mesa Plant, owned by the subsidiary CPFL Geração, leased to FURNAS for a 30-year period ending in 2028. These assets are depreciated over their estimated useful life at annual rates defined by ANEEL, and in accordance with general conditions of the concession agreement held by FURNAS. The average depreciation rate is 2.4% p.a.
13.4 Other
Refers mainly to the indirect subsidiary Paulista Lajeado Energia S.A.s 5.84% participation in the total capital of Investco S/A, comprising 25,829 common shares and 16,412 preferred shares. This investment is recorded on a cost basis. Due to the participation of minority shareholders in the form of (i) preferred shares representing 40.07% of the total capital of Paulista Lajeado, and (ii) beneficiaries (founder-shares) who assign the right to 10% of net income before profit sharing, these effects, totaling R$ 75,827 (R$ 74,799 as of June 30, 2008), were registered in the consolidated financial statements under Non-Controlling Shareholders Interest liabilities.
13.5 Interest on Shareholders Equity and Dividend:
Consolidated | ||||||||||||
Dividend | Interest on net equity | Total | ||||||||||
September | June 30, | September | June 30, | September | June 30, | |||||||
Subsidiaries | 30, 2008 | 2008 | 30, 2008 | 2008 | 30, 2008 | 2008 | ||||||
CPFL Paulista | 4,999 | 284,431 | - | 13,208 | 4,999 | 297,639 | ||||||
CPFL Piratininga | - | 86,783 | - | 6,120 | - | 92,903 | ||||||
RGE | - | 62,614 | - | 31,280 | - | 93,894 | ||||||
CPFL Santa Cruz | 10,000 | 13,088 | - | 3,008 | 10,000 | 16,096 | ||||||
CPFL Geração | 118,233 | 118,232 | 29,971 | 29,971 | 148,204 | 148,203 | ||||||
CPFL Brasil | - | 72,987 | - | - | - | 72,987 | ||||||
Perácio | - | 20,761 | - | - | - | 20,761 | ||||||
Total | 133,232 | 658,896 | 29,971 | 83,587 | 163,203 | 742,483 | ||||||
31
In the quarter, R$ 579,280 was received in relation to the results for the first semester of 2008.
( 14 ) PROPERTY, PLANT AND EQUIPMENT |
Consolidated | ||||||||
September 30, 2008 | June 30, 2008 | |||||||
Accumulated | ||||||||
Historical Cost | Depreciation | Net Value | Net Value | |||||
In Service | ||||||||
- Distribution | 7,887,112 | (4,030,585) | 3,856,527 | 3,804,195 | ||||
- Generation | 1,821,508 | (185,434) | 1,636,074 | 1,626,572 | ||||
- Commercialization | 207,828 | (84,796) | 123,032 | 124,424 | ||||
- Administration | 248,349 | (165,085) | 83,264 | 83,405 | ||||
10,164,797 | (4,465,900) | 5,698,897 | 5,638,596 | |||||
In Progress | ||||||||
- Distribution | 346,057 | - | 346,057 | 307,561 | ||||
- Generation | 827,113 | - | 827,113 | 701,885 | ||||
- Commercialization | 17,314 | - | 17,314 | 12,494 | ||||
- Administration | 34,376 | - | 34,376 | 31,494 | ||||
1,224,860 | - | 1,224,860 | 1,053,434 | |||||
Subtotal | 11,389,657 | (4,465,900) | 6,923,757 | 6,692,030 | ||||
Other assets not linked to the concession | 1,554,793 | (880,841) | 673,952 | 682,914 | ||||
Total of Property, Plant and Equipment | 12,944,450 | (5,346,741) | 7,597,709 | 7,374,944 | ||||
Special obligations linked to the concession | (995,122) | (962,354) | ||||||
Net Property, Plant and Equipment | 6,602,587 | 6,412,590 | ||||||
The average depreciation rate of the assets is 5.0% p.a. for the distributors and 2.6% p.a. for the generators.
( 15 ) INTEREST, LOANS AND FINANCING |
Consolidated | ||||||||||||||||
September 30, 2008 | June 30, 2008 | |||||||||||||||
Interest Current and Non current |
Principal | Total | Interest Current and Non current |
Principal | Total | |||||||||||
Current | Non current | Current | Non current | |||||||||||||
LOCAL CURRENCY | ||||||||||||||||
BNDES - Power increases | 131 | 10,027 | 23,345 | 33,503 | 131 | 9,949 | 25,797 | 35,877 | ||||||||
BNDES - Investment | 24,972 | 239,783 | 1,886,837 | 2,151,592 | 16,222 | 231,145 | 1,721,565 | 1,968,932 | ||||||||
BNDES - Regulatory asset | - | - | - | - | 6 | 1,330 | - | 1,336 | ||||||||
BNDES - Purchase of assets | 20 | 121 | 1,422 | 1,563 | 16 | 48 | 822 | 886 | ||||||||
Furnas Centrais Elétricas S.A. | - | 92,524 | 61,683 | 154,207 | - | 91,119 | 83,526 | 174,645 | ||||||||
Financial institutions | 8,443 | 134,894 | 205,357 | 348,694 | 5,800 | 108,472 | 175,149 | 289,421 | ||||||||
Other | 502 | 29,875 | 39,590 | 69,967 | 495 | 30,127 | 41,201 | 71,823 | ||||||||
Subtotal | 34,068 | 507,224 | 2,218,234 | 2,759,526 | 22,670 | 472,190 | 2,048,060 | 2,542,920 | ||||||||
FOREIGN CURRENCY | ||||||||||||||||
IDB | 524 | 4,029 | 61,033 | 65,586 | 432 | 2,882 | 51,934 | 55,248 | ||||||||
Financial institutions | 32,850 | 83,736 | 1,045,824 | 1,162,410 | 16,770 | 44,387 | 898,040 | 959,197 | ||||||||
Subtotal | 33,374 | 87,765 | 1,106,857 | 1,227,996 | 17,202 | 47,269 | 949,974 | 1,014,445 | ||||||||
Total | 67,442 | 594,989 | 3,325,091 | 3,987,522 | 39,872 | 519,459 | 2,998,034 | 3,557,365 | ||||||||
32
Consolidated | ||||||||||
September 30, | June 30, | Remuneration | Amortization | Collateral | ||||||
Local currency | 2008 | 2008 | ||||||||
BNDES - Power Increases | ||||||||||
36 to 84 monthly installments from February 2003 up to December 2008 | Guarantee of CPFL Energia and CPFL Paulista | |||||||||
CPFL Geração | 33,046 | 35,445 | TJLP + 3.1% to 4.3% p.a. | |||||||
72 and 84 montthly installments from February 2003 up to September 2004 | Guarantee of CPFL Energia and CPFL Paulista | |||||||||
CPFL Geração | 457 | 432 | UMBND + 3.5% a 4.% a.a. | |||||||
BNDES - Investment | ||||||||||
Guarantee of CPFL Energia and receivables | ||||||||||
CPFL Paulista - FINEM II | 142,922 | 158,657 | TJLP + 5.4% p.a. | 48 monthly installments from January 2007 | ||||||
Guarantee of CPFL Energia and receivables | ||||||||||
CPFL Paulista - FINEM III | 140,953 | 115,247 | TJLP + 3.3% p.a. | 72 monthly installments from January 2008 | ||||||
Guarantee of CPFL Energia and receivables | ||||||||||
CPFL Paulista - FINEM IV | 70,306 | 70,089 | TJLP + 3.28% to 3.4% p.a. | 60 monthly installments from January 2010 | ||||||
RGE - FINEM I "A" | 4,567 | 11,408 | TJLP + 4.5% p.a. | 36 monthly installments from December 2005 | Revenue collection/Reserve Account | |||||
RGE - FINEM I "B" | 1,387 | 1,992 | UMBNDES + 4.5% p.a (1) | 36 monthly installments from February 2006 | Revenue collection/Reserve Account | |||||
RGE - FINEM II | 95,122 | 100,626 | TJLP +5.0% p.a | 60 monthly installments from January 2008 | Revenue collection/Reserve Account | |||||
Revenue collection/credit of CPFL Energia | ||||||||||
RGE - FINEM III | 76,331 | 76,097 | TJLP + 3.28% to 3.4% p.a. | 60 monthly installments from January 2010 | ||||||
Guarantee of CPFL Energia and receivables | ||||||||||
CPFL Piratininga - FINEM I | 53,218 | 59,078 | TJLP + 5.4%p.a. | 48 monthly installments from January 2007 | ||||||
Guarantee of CPFL Energia and receivables | ||||||||||
CPFL Piratininga - FINEM II | 83,732 | 80,705 | TJLP + 3.3% p.a. | 72 monthly installments from January 2008 | ||||||
Guarantee of CPFL Energia and receivables | ||||||||||
CPFL Piratininga - FINEM III | 39,654 | 32,041 | TJLP + 3.28% to 3.4% p.a. | 60 monthly installments from January 2010 | ||||||
CPFL Santa Cruz | 1,518 | 1,502 | TJLP + 2.9% p.a. | 54 monthly installments from December 2010 | Guarantee of CPFL Energia | |||||
BAESA | 155,342 | 159,125 | TJLP + 3.125%p.a. | 144 monthly installments from September 2006 | Letters of Credit | |||||
BAESA | 34,832 | 29,795 | UMBND + 3.125% p.a. (1) | 144 monthly installments from November 2006 | Letters of Credit | |||||
ENERCAN | 347,994 | 355,971 | TJLP + 4% p.a. | 144 monthly installments from April 2007 | Letters of Credit | |||||
ENERCAN | 22,960 | 19,749 | UMBND + 4% p.a. | 144 monthly installments from April 2007 | Letters of Credit | |||||
CERAN | 288,843 | 284,996 | TJLP + 5% p.a. | 168 monthly installments from December 2005 | Guarantee of CPFL Energia | |||||
CERAN | 46,906 | 38,038 | UMBND + 5% p.a. (1) | 168 monthly installments from February 2006 | Guarantee of CPFL Energia | |||||
TJLP + 3.69% p.a.(average of | ||||||||||
CERAN | 118,332 | 115,523 | percentages) | 168 monthly installments from November 2008 | Guarantee of CPFL Energia | |||||
Foz do Chapecó | 421,155 | 255,827 | TJLP + 2.49% to 2.95% p.a. | 192 monthly installments from October 2011 | Pledge of shares, credit rights and revenue | |||||
CPFL Mococa | 3,023 | - | TJLP + 2.9% p.a. | 54 monthly installments from December 2010 | Guarantee of CPFL Energia and receivables | |||||
CPFL Jaguari | 2,495 | 2,466 | TJLP + 2.9% p.a. | 54 monthly installments from December 2010 | Guarantee of CPFL Energia and receivables | |||||
BNDES - Regulatory asset | ||||||||||
CPFL Sul Paulista - RTE | - | 1,336 | Selic + 1.0 % p.a. | 79 monthly installments from March 2002 | Receivables | |||||
BNDES - Purchase of assets | ||||||||||
CPFL Brasil | 1,563 | 886 | TJLP + 2.84% p.a. | 36 monthly installments from May 2009 | Linked to the asset acquired | |||||
Furnas Centrais Elétricas S.A. | ||||||||||
CPFL Geração | 154,207 | 174,645 | IGP-M + 10% p.a. | 24 monthly installments from June 2008 | Energy produced by plant | |||||
Financial Institutions | ||||||||||
CPFL Paulista | ||||||||||
Banco do Brasil - Law 8727 | 48,750 | 49,728 | IGPM variation + 7.42% p.a. | 240 monthly installments from May 1994 | Receivables | |||||
CPFL Piratininga | ||||||||||
Banco do Brasil | 105,425 | 101,945 | 106.45% of CDI | 1 installment in October 2008 | No guarantee | |||||
RGE | ||||||||||
Banco Itaú BBA | 100,803 | 103,545 | 106% of CDI | 1 installment in March 2011 | No guarantee | |||||
CPFL Santa Cruz | ||||||||||
Banco HSBC | 35,400 | 34,203 | CDI + 1.10% p.a. | 1 installment in June 2011 | Guarantee of CPFL Energia | |||||
CERAN | ||||||||||
Banco Bradesco | 58,316 | - | CDI + 2% p.a. | 24 monthly installments from August 2008 | No guarantee | |||||
Other | ||||||||||
Eletrobrás | ||||||||||
CPFL Paulista | 9,466 | 9,962 | RGR + rate variable of 6% to 9% p.a. | Monthly installments until July 2016 | Receivables/Promissory notes | |||||
CPFL Piratininga | 2,025 | 2,146 | RGR + 6% p.a. | Monthly installments until July 2016 | Receivables/Promissory notes | |||||
RGE | 11,429 | 11,548 | RGR + 6% p.a. | Monthly installments until June 2020 | Receivables/Promissory notes | |||||
CPFL Santa Cruz | 5,822 | 6,134 | RGR + 6% p.a. | Monthly installments until April 2018 | Receivables/Promissory notes | |||||
CPFL Leste Paulista | 1,167 | 1,198 | RGR + 6% p.a. | Monthly installments until January 2018 | Receivables/Promissory notes | |||||
CPFL Sul Paulista | 1,744 | 1,795 | RGR + 6% p.a. | Monthly installments until July 2018 | Receivables/Promissory notes | |||||
CPFL Jaguari | 36 | 37 | RGR + 6% p.a. | Monthly installments until May 2017 | Receivables/Promissory notes | |||||
CPFL Mococa | 329 | 338 | RGR + 6% p.a. | Monthly installments until January 2018 | Receivables/Promissory notes | |||||
Outros | 37,949 | 38,665 | ||||||||
Total Local Currency - Consolidated | 2,759,526 | 2,542,920 | ||||||||
Foreign currency | ||||||||||
IDB - Enercan | 65,586 | 55,248 | US$ + Libor + 3.5% p.a. | 49 quarterly installments from May 2007 | Guarantee of CPFL Energia | |||||
Financial Institutions | ||||||||||
CPFL Paulista | ||||||||||
Debt Conversion Bond | 9,376 | 7,674 | US$ + 6-month Libor + 0.875% p.a. | 17 semiannual installments from April 2004 | Revenue/Government SP guaranteed | |||||
New Money Bond | 618 | 506 | US$ + 6-month Libor + 0.875% p.a. | 17 semiannual installments from April 2001 | Revenue/Government SP guaranteed | |||||
FURB | 627 | 514 | US$ + 6-month Libor + 0.8125% p.a. | 13 semiannual installments from April 2003 | Revenue/Government SP guaranteed | |||||
C-Bond | 12,654 | 10,314 | US$ + 8% p.a. | 21 semiannual installments from April 2004 | Revenue/Government SP guaranteed | |||||
Discount Bond | 17,173 | 14,058 | US$ + 6-month Libor + 0.8125% p.a.(2) | 1 installment in April 2024 | Escrow deposits and revenue/ Gov.SP guarantee | |||||
PAR-Bond | 24,591 | 20,142 | US$ + 6% p.a. | 1 installment in April 2024 | Escrow deposits and revenue/ Gov.SP guarantee | |||||
Banco do Brasil | 90,818 | 74,618 | Yen + 5.7778% p.a. (4) | 1 installment in September 2011 | No guarantee | |||||
ABN AMRO | 375,473 | 311,801 | Yen + 1.4824% p.a. (4) | 1 installment in January 2012 | No guarantee | |||||
CPFL Piratininga | ||||||||||
Banco BNP Paribás | 48,948 | 40,288 | US$ + 4.10% p.a. (5) | 1 installment in February 2009 | Promissory notes | |||||
RGE | ||||||||||
Banco do Brasil | 32,152 | 26,427 | Yen + 5.7778%p.a. (6) | 1 installment in September 2009 | No guarantee | |||||
CPFL Geração | ||||||||||
Banco do Brasil | 549,980 | 452,855 | Yen + 2.5% up to 5.8% p.a. (7) | 1 installment between April 2010 and january 2011 | Guarantee of CPFL Energia | |||||
Total Foreign Currency - Consolidated | 1,227,996 | 1,014,445 | ||||||||
Total - Consolidated | 3,987,522 | 3,557,365 | ||||||||
The Company and its subsidiaries hold swap positions that convert the fixed rate component of the interest on the transaction into a variable interest rate in reais, corresponding to: | ||
(1) 150.0% to 152.11% of CDI | (4) 102.9% of CDI | |
(2) 96,5% to 111,3% of CDI | (5) 106.0% of CDI | |
(3) 104.5% of CDI | (6) 103.5% of CDI (7) 104.2% to 104.50% of CDI |
33
Main funding in the period:
Local Currency
BNDES FINEM III Investment (CPFL Paulista) The subsidiary obtained approval for financing of R$ 156,543 from the BNDES in 2007, part of a FINEM credit line, to be invested in the expansion and modernization of the Electricity System. During the quarter, the subsidiary received the remaining balance of R$ 31,532. The interest was paid quarterly to December 15, 2007 and amortized monthly as from January 15, 2008.
BNDES FINEM II Investment (CPFL Piratininga) The subsidiary obtained approval for financing of R$ 94,327 from the BNDES in 2007, part of a FINEM credit line, to be invested in the expansion and modernization of the Electricity System. During the quarter, the subsidiary received the remaining balance of R$ 6,811. The interest was paid quarterly to December 15, 2007 and amortized monthly as from January 15, 2008.
BNDES FINEM III Investment (CPFL Piratininga) The subsidiary obtained approval for financing of R$ 155,178 from the BNDES in 2008, part of a FINEM credit line, to be invested in the expansion and modernization of the Electricity System. The subsidiary has received R$ 39,500 to date, R$ 7,500 in this quarter, and the outstanding balance of R$ 115,678 is scheduled for release by the end of 2009. The interest will be paid quarterly to December 31, 2009, and will be amortized monthly as from January 15, 2010.
BNDES Investment - (Foz do Chapecó) Installments of the loan approved by the BNDES on July 3, 2007, amounting to R$ 308,117 (R$ 157,140 in proportion to the participation of CPFL Geração) were released to the indirect subsidiary Foz do Chapecó in the quarter, to finance the construction on the Foz do Chapecó Hydropower Plant. The interest and principal will be paid monthly as from October 2011.
Financial Institutions - (CERAN) CERAN contracted a loan of R$ 88,000 (R$ 57.200 in proportion to the participation of CPFL Geração) in the quarter, in order to honor short-term commitments. The interest and principal will be paid monthly as from August 2008.
RESTRICTIVE COVENANTS
The financing by the BNDES approved in the quarter restricts the subsidiaries to only paying dividends and interest on equity in an amount in excess of the minimum mandatory dividend laid down by law, after proof is provided to the BNDES and the AGENTS in the operation of full compliance with the restrictive covenants established in the contract; and to maintaining certain financial ratios within predefined parameters, as follows:
CPFL Piratininga FINEM III
Net indebtedness divided by EBITDA maximum of 2.5 in 2007, 3.0 in 2008 and 2.5 from 2009 to 2014;
Net indebtedness divided by the sum of net indebtedness and net equity maximum of 0.80 from 2007 to 2014.
34
The indirect subsidiary ENERCAN's loans from the BNDES and IDB contain clauses that require the subsidiary to maintain certain financial ratios within preestablished parameters. As a result of the damage that occurred in the bypass tunnels of the Campos Novos hydropower plant, the start of commercial operations was postponed, compromising generation of the cash required to meet certain contractual obligations by the deadline originally foreseen. ENERCAN's management has already asked the respective financial institutions to review the contractual parameters, and has obtained confirmation that this review will not involve declaration of early maturity of the loan contract.
Other loan and financing agreements are subject to certain restrictive covenants, including clauses that require the Company and its subsidiaries to maintain certain financial ratios within predefined parameters. Details of these restrictive covenants are presented in the financial statements as of December 31, 2007.
Company management monitors these indices systematically and constantly to ensure that the contractual conditions are complied with. In the opinion of the management, these restrictive covenants and clauses are being complied with, except in relation to ENERCAN, as mentioned above.
SWAP OPERATIONS
The net gains and losses on the swap operations contracted by the Company and its subsidiaries, including contracting on short-term operations, are recorded under Derivatives, and corresponding amounts are recognized under financial income or expense. The consolidated results of these operations as of September 30, 2008, were an asset of R$ 57,058 and a liability of R$ 54,385 (liability of R$ 156,433 as of June 30, 2008). See Note 28 for further details of the investments in derivatives.
( 16 ) DEBENTURES |
Consolidated | ||||||||||||||||||||||||
September 30, 2008 | June 30, 2008 | |||||||||||||||||||||||
Issued | Remuneration | Amortization Conditions | Collateral | Interest | Current | Non current | Total | Interest | Current | Non current | Total | |||||||||||||
Parent Company | ||||||||||||||||||||||||
3rd issue | ||||||||||||||||||||||||
Single series | 45,000 | CDI + 0.45% p.a. (1) | 3 annual installments from September 2012 | Unsecured | 4,432 | - | 450,000 | 454,432 | 16,678 | - | 450,000 | 466,678 | ||||||||||||
CPFL Paulista | ||||||||||||||||||||||||
2nd issue | ||||||||||||||||||||||||
1st series | 11,968 | 109% of the CDI | July 1, 2009. | Unsecured | 4,124 | 119,680 | - | 123,804 | 6,985 | - | 119,680 | 126,665 | ||||||||||||
2nd series | 13,032 | IGP-M + 9.8% p.a. | July 1, 2009. | Unsecured | 4,113 | 168,501 | - | 172,614 | 15,978 | - | 165,795 | 181,773 | ||||||||||||
3rd issue | ||||||||||||||||||||||||
1st series | 64,000 | 104.4% of CDI | 3 annual installments from December 2011 | Credit of CPFL Energia | 27,655 | - | 640,000 | 667,655 | 6,032 | - | 640,000 | 646,032 | ||||||||||||
CPFL Piratininga | 35,892 | 288,181 | 640,000 | 964,073 | 28,995 | - | 925,475 | 954,470 | ||||||||||||||||
1st issue | ||||||||||||||||||||||||
Single series | 40,000 | 104% of the CDI | 2 annual installments from January 2010 | Guarantee of CPFL Energia | 13,142 | - | 400,000 | 413,142 | 22,247 | - | 400,000 | 422,247 | ||||||||||||
RGE | ||||||||||||||||||||||||
2nd issue | ||||||||||||||||||||||||
1st series | 2,620 | IGP-M + 9.6% p.a. | 1 installment on April 1, 2011 | Unsecured | 1,312 | 1,557 | 26,200 | 29,069 | 613 | 1,112 | 26,200 | 27,925 | ||||||||||||
2nd series | 20,380 | 106.0% of CDI | 1 installment on April 1, 2009 | Unsecured | 12,954 | 203,800 | - | 216,754 | 5,828 | 203,800 | - | 209,628 | ||||||||||||
3rd issue | ||||||||||||||||||||||||
1st series | 1 | CDI + 0.60% p.a. (2) | 3 annual installments from December 2011 | Credit of CPFL Energia | 4,348 | - | 100,000 | 104,348 | 950 | - | 100,000 | 100,950 | ||||||||||||
2nd series | 1 | CDI + 0.60% p.a. (3) | 3 annual installments from December 2011 | Credit of CPFL Energia | 4,643 | - | 140,000 | 144,643 | 7,972 | - | 140,000 | 147,972 | ||||||||||||
3rd series | 1 | CDI + 0.60% p.a. (4) | 3 annual installments from December 2011 | Credit of CPFL Energia | 869 | - | 40,000 | 40,869 | 1,851 | - | 40,000 | 41,851 | ||||||||||||
4rd series | 1 | CDI + 0.60% p.a. (5) | 3 annual installments from December 2011 | Credit of CPFL Energia | 3,153 | - | 50,000 | 53,153 | 1,422 | - | 50,000 | 51,422 | ||||||||||||
5rd series | 1 | CDI + 0.60% p.a. (5) | 3 annual installments from December 2011 | Credit of CPFL Energia | 3,153 | - | 50,000 | 53,153 | 1,422 | - | 50,000 | 51,422 | ||||||||||||
30,432 | 205,357 | 406,200 | 641,989 | 20,058 | 204,912 | 406,200 | 631,170 | |||||||||||||||||
CPFL Geração | ||||||||||||||||||||||||
Guarantee of CPFL Energia, Receivables and CPFL Geração common nominal shares | ||||||||||||||||||||||||
2nd Issue | 69,189 | TJLP + 4 to 5% p.a. | Semiannual with settlement in June 2009 | 5,102 | 158,041 | - | 163,143 | 1,175 | 157,946 | - | 159,121 | |||||||||||||
Baesa | ||||||||||||||||||||||||
1st series | 9,000 | 100% of the CDI+ 0.3% p.a. | Quarterly with settlement in August 2016. | Letters of Credit | 550 | 3,164 | 22,150 | 25,864 | 490 | 3,164 | 22,941 | 26,595 | ||||||||||||
2nd series | 9,000 | 100% of the CDI+ 0.4% p.a. | Annually with settlement in August 2016. | Letters of Credit | 205 | - | 9,331 | 9,536 | 1,347 | - | 9,331 | 10,678 | ||||||||||||
755 | 3,164 | 31,481 | 35,400 | 1,837 | 3,164 | 32,272 | 37,273 | |||||||||||||||||
89,755 | 654,743 | 1,927,681 | 2,672,179 | 90,990 | 366,022 | 2,213,947 | 2,670,959 | |||||||||||||||||
35
The Company and its subsidiaries hold swap positions that convert the fixed rate component of the interest on the transaction into a variable interest rate in reais, corresponding to: | ||
(1) 104.4% of CDI | (3) 104.85% of CDI | (5) 104.87% of CDI |
(2) 105.7% of CDI | (4) 104.9% of CDI |
RESTRICTIVE COVENANTS
The debentures are subject to certain restrictive covenants, including clauses that require the subsidiaries to maintain certain financial ratios within pre-established parameters. Details of these restrictive covenants are presented in the financial statements as of December 31, 2007. In the opinion of the subsidiary's Management, these restrictive covenants and clauses are being adequately complied with.
( 17 ) SUPPLIERS |
Consolidated | ||||
September | June 30, | |||
30, 2008 | 2008 | |||
System service charges | 18,445 | 18,081 | ||
Energy purchased | 610,501 | 600,063 | ||
Electricity network usage charges | 109,623 | 97,318 | ||
Materials and services | 88,200 | 78,848 | ||
Regulatory liability (note 3) | 29,439 | 29,651 | ||
Other | 26,427 | 18,494 | ||
Total | 882,635 | 842,455 | ||
( 18 ) TAXES AND SOCIAL CONTRIBUTIONS PAYABLE |
Parent Company | Consolidated | |||||||||||
Current | Current | Non current | ||||||||||
September | June 30, | September | June 30, | September | June 30, | |||||||
30, 2008 | 2008 | 30, 2008 | 2008 | 30, 2008 | 2008 | |||||||
ICMS (State VAT) | - | - | 277,179 | 275,708 | - | - | ||||||
PIS (Tax on revenue) | - | - | 10,842 | 9,962 | - | 169 | ||||||
COFINS (Tax on revenue) | - | - | 49,657 | 47,253 | 2,512 | 3,291 | ||||||
IRPJ (Corporate income tax) | - | 12,129 | 115,842 | 104,019 | 11,164 | 17,392 | ||||||
CSLL (Social contribution tax) | - | 2,813 | 20,420 | 21,330 | 3,812 | 6,056 | ||||||
IRRF (Withholding tax on equity interest) | - | - | - | 14,751 | - | - | ||||||
Other | 65 | 50 | 21,801 | 19,276 | (152) | - | ||||||
Total | 65 | 14,992 | 495,741 | 492,299 | 17,336 | 26,908 | ||||||
( 19 ) EMPLOYEE PENSION PLANS |
The subsidiaries CPFL Paulista, CPFL Piratininga and CPFL Geração, through Fundação CESP, the subsidiary RGE, through Fundação CEEE de Seguridade Social - ELETROCEEE, the indirect subsidiary CPFL Santa Cruz, through BB Previdência Fundo de Pensão Banco do Brasil, and the subsidiary CPFL
36
Jaguariuna through IHPREV Fundo de Pensão, sponsor supplementary retirement and pension plans for their employees. The main characteristics of these plans are as follows:
I CPFL Paulista
A Mixed Benefit Plan is currently in effect for the employees of the subsidiary CPFL Paulista.
On modification of the Pension Plan in October 1997, the subsidiary recognized an obligation to pay in respect of the plan deficit determined at the time by the external actuaries of Fundação CESP. This deficit will be liquidated in 260 installments, amortized monthly, plus interest of 6% p.a. and restatement based on the IGP-DI (FGV). Through the addendum to the agreement with Fundação CESP dated January 17, 2008, the payment terms were changed to 238 monthly payments and 19 annual installments, in relation to the base date of December 31, 2007, with final maturity on October 31, 2027. The balance of the liability as of September 30, 2008 is R$ 598,535 (R$ 586,296 as of June 30, 2008).
II CPFL Piratininga
As a result of the split-off of Bandeirante Energia S.A. (the subsidiarys predecessor), the subsidiary CPFL Piratininga assumed the responsibility for the actuarial liabilities for its retired and discharged employees up to the date of the split-off, as well as the responsibilities relating to the active employees transferred to CPFL Piratininga.
A Proportional Supplementary Defined Benefit (BSPS) and a Mixed Benefit Plan are currently in effect for CPFL Piratiningas employees.
In September 1997, through a contractual instrument of adjustment of reserves to be amortized, Eletropaulo Metropolitana Eletricidade São Paulo S.A. (the predecessor of Bandeirante) recognized an obligation to pay in respect of the plan deficit determined at the time by the external actuaries of Fundação CESP, to be liquidated in 260 installments, amortized on a monthly basis, plus interest of 6% p.a. and restatement based on the IGP-DI (FGV). Under the Contractual Amendment, signed with Fundação CESP on January 17, 2008, the payment terms were amended to 221 monthly payments and 18 annual installments, in relation to the base date of December 31, 2007, with final maturity on May 31, 2026. The balance of the liability as of September 30, 2008 is R$ 155,351 (R$ 152,304 as of June 30, 2008).
III RGE
A defined benefit type plan, with a benefit level equal to 100% of the adjusted average of the most recent salaries, including the presumed Social Security benefit, with a Segregated Net Asset administered by ELETROCEEE. Only those employed prior to the spin-off from CEEE to RGE are entitled to this benefit.
IV CPFL Santa Cruz
The subsidiary CPFL Santa Cruz has a defined contribution plan.
V CPFL Geração
The plans currently in force for the employees of the subsidiary CPFL Geração are a Proportional Supplementary Defined Benefit (BSPS) and a Mixed Benefit Plan, along the same lines as the CPFL Paulista plan.
With the modification of the Retirement Plan, at that point maintained by CPFL Paulista, in October 1997, a liability was recognized as payable by the subsidiary CPFL Geração, relating to the plan deficit calculated by the external actuaries of Fundação CESP, which is being amortized on a monthly basis, in 260 installments, plus interest of 6% p.a. and restatement according to the IGP-DI (FGV). Under the Contractual Amendment, signed with Fundação CESP on January 17, 2008, the payment terms were amended to 238 monthly installments and 19 annual installments, in relation to the base date of December 31, 2007, with final maturity on October 31, 2027. As of September 30, 2008, the balance of the liability, which is restated annually in line with the changes in the actuarial deficit calculated in accordance with the criteria of the Supplementary Pensions Department, was R$ 12,094 (R$ 11,846 as of June 30, 2008).
37
VI CPFL Jaguariúna
The subsidiary CPFL Jaguariúna has a defined contribution plan.
The changes in net actuarial liability as of September 30 and June 30, 2008, pursuant to CVM Resolution nº 371/2000, are as follows:
September 30, 2008 | ||||||||||
CPFL | CPFL | CPFL | Consolidated | |||||||
Paulista | Piratininga | RGE | Geração | |||||||
Net actuarial liability at the beginning of the | ||||||||||
quarter | 472,147 | 129,460 | (5,362) | 8,151 | 604,396 | |||||
Income recognized in income statement | (16,579) | (3,091) | (921) | (447) | (21,038) | |||||
Sponsor's contributions during the period | (12,492) | (5,321) | - | (269) | (18,082) | |||||
Net actuarial liability at the end of the | ||||||||||
period | 443,076 | 121,048 | (6,283) | 7,435 | 565,276 | |||||
Other contributions | 12,481 | 2,709 | 10,678 | 211 | 26,079 | |||||
TOTAL | 455,557 | 123,757 | 4,395 | 7,646 | 591,355 | |||||
Current | 31,498 | 8,976 | (2,424) | 801 | 38,851 | |||||
Non current | 424,059 | 114,781 | 6,819 | 6,845 | 552,504 | |||||
455,557 | 123,757 | 4,395 | 7,646 | 591,355 | ||||||
June 30, 2008 | ||||||||||
CPFL | CPFL | CPFL | ||||||||
Paulista | Piratininga | RGE | Geração | Consolidated | ||||||
Net actuarial liability at the beginning of the | ||||||||||
year | 500,684 | 136,440 | (4,441) | 8,855 | 641,538 | |||||
Income recognized in income statement | (16,580) | (3,091) | (921) | (447) | (21,039) | |||||
Sponsor's contributions during the period | (11,957) | (3,889) | - | (257) | (16,103) | |||||
Net actuarial liability at the end of the | ||||||||||
period | 472,147 | 129,460 | (5,362) | 8,151 | 604,396 | |||||
Other contributions | 12,398 | 497 | 13,282 | 164 | 26,341 | |||||
TOTAL | 484,545 | 129,957 | 7,920 | 8,315 | 630,737 | |||||
Current | 30,507 | 8,287 | 483 | 734 | 40,011 | |||||
Non current | 454,038 | 121,670 | 7,437 | 7,581 | 590,726 | |||||
484,545 | 129,957 | 7,920 | 8,315 | 630,737 | ||||||
38
The revenues recognized are as follows:
3rd Quarter 2008 | ||||||||||
CPFL | CPFL | CPFL | Consolidated | |||||||
Paulista | Piratininga | RGE | Geração | |||||||
Cost of service | 271 | 1,143 | 308 | 27 | 1,749 | |||||
Interest on actuarial liabilities | 67,046 | 16,618 | 4,003 | 1,426 | 89,093 | |||||
Expected return on assets | (83,888) | (20,505) | (5,843) | (1,865) | (112,101) | |||||
Unrecognized cost of past service | - | 3 | - | - | 3 | |||||
Unrecognized actuarial gains amortization | - | - | (310) | - | (310) | |||||
Subtotal | (16,571) | (2,741) | (1,842) | (412) | (21,566) | |||||
Expected contributions from participants | (8) | (350) | - | (35) | (393) | |||||
Subtotal | (16,579) | (3,091) | (1,842) | (447) | (21,959) | |||||
Decrease of 50% on prepaid pension | ||||||||||
expense (*) | - | - | 921 | - | 921 | |||||
Total | (16,579) | (3,091) | (921) | (447) | (21,038) | |||||
3rd Quarter 2007 | ||||||||||
CPFL | CPFL | CPFL | ||||||||
Paulista | Piratininga | RGE | Geração | Consolidated | ||||||
Cost of service | 262 | 1,022 | 225 | 22 | 1,531 | |||||
Interest on actuarial liabilities | 64,878 | 16,272 | 2,831 | 1,363 | 85,344 | |||||
Expected return on assets | (74,137) | (18,424) | (3,834) | (1,614) | (98,009) | |||||
Unrecognized cost of past service | - | 3 | - | - | 3 | |||||
Unrecognized actuarial gains amortization | - | - | (965) | - | (965) | |||||
Subtotal | (8,997) | (1,127) | (1,743) | (229) | (12,096) | |||||
Expected contributions from participants | (9) | (477) | - | - | (486) | |||||
Total | (9,006) | (1,604) | (1,743) | (229) | (12,582) | |||||
(*) As the sponsor, RGE, matches the participants contributions to this plan, only 50% was recorded.
39
The revenues were recorded in the following accounts in the statement of operations:
3rd Quarter 2008 | ||||||||||
CPFL | CPFL | CPFL | ||||||||
Paulista | Piratininga | RGE | Geração | Consolidated | ||||||
Operating cost | (16,579) | (3,091) | (921) | (447) | (21,038) | |||||
Total | (16,579) | (3,091) | (921) | (447) | (21,038) | |||||
3rd Quarter 2007 | ||||||||||
CPFL | CPFL | CPFL | ||||||||
Paulista | Piratininga | RGE | Geração | Consolidated | ||||||
Operating cost | (9,006) | (1,604) | (1,743) | 13 | (12,340) | |||||
Operating expenses | - | - | - | (242) | (242) | |||||
Total | (9,006) | (1,604) | (1,743) | (229) | (12,582) | |||||
( 20 ) REGULATORY CHARGES |
Consolidated | ||||
September | June 30, | |||
30, 2008 | 2008 | |||
Fee for the use of water resources | 2,509 | 2,371 | ||
Global Reverse Fund - RGR | 7,140 | 6,947 | ||
ANEEL inspection fee | 1,832 | 1,830 | ||
Fuel Consumption Account - CCC | 47,151 | 28,558 | ||
Energy Development Account - CDE | 33,054 | 33,054 | ||
Total | 91,686 | 72,760 | ||
40
( 21 ) RESERVE FOR CONTINGENCIES |
Consolidated | ||||||||||||||||
September 30, 2008 | June 30, 2008 | |||||||||||||||
Reserve for contingencies - Gross | Escrow Deposits related to Contingencies (1) | Reserve for Contingencies, net |
Other deposits, Judicial (2) | Reserve for contingencies - Gross | Escrow Deposits related to Contingencies (1) | Reserve for Contingencies, net |
Other deposits, Judicial (2) | |||||||||
Labor | ||||||||||||||||
Various | 57,599 | 48,872 | 8,727 | 54,425 | 60,837 | 51,484 | 9,353 | 44,824 | ||||||||
Civil | ||||||||||||||||
General damages | 16,629 | 16,217 | 412 | 37,781 | 18,037 | 13,256 | 4,781 | 43,973 | ||||||||
Tariff increase | 11,026 | 3,090 | 7,936 | 15,307 | 11,302 | 3,005 | 8,297 | 7,056 | ||||||||
Energy purchased | 24,276 | 13,227 | 11,049 | - | 24,275 | 13,228 | 11,047 | - | ||||||||
Other | 6,678 | 5,452 | 1,226 | 10,013 | 6,772 | 5,504 | 1,268 | 9,996 | ||||||||
58,609 | 37,986 | 20,623 | 63,101 | 60,386 | 34,993 | 25,393 | 61,025 | |||||||||
Tax | ||||||||||||||||
FINSOCIAL | 18,377 | 18,377 | - | 33,984 | 18,270 | 18,270 | - | 33,787 | ||||||||
Increase in basis - PIS and COFINS | 1,253 | 652 | 601 | - | 1,396 | - | 1,396 | - | ||||||||
Interest on shareholders equity - PIS | ||||||||||||||||
and COFINS | 59,576 | - | 59,576 | 301 | 58,112 | - | 58,112 | 301 | ||||||||
Income tax | 58,068 | 38,226 | 19,842 | 404,358 | 55,942 | 36,056 | 19,886 | 393,844 | ||||||||
Other | 8,176 | 5,216 | 2,960 | 13,083 | 7,961 | 5,031 | 2,930 | 12,941 | ||||||||
145,450 | 62,471 | 82,979 | 451,726 | 141,681 | 59,357 | 82,324 | 440,873 | |||||||||
Total | 261,658 | 149,329 | 112,329 | 569,252 | 262,904 | 145,834 | 117,070 | 546,722 | ||||||||
The changes in the balances in the quarter ended September 30, 2008 are as follows:
Consolidated | ||||||||||||
June 30, 2008 | Addition | Reversal | Payment | Monetary | September 30, | |||||||
Restatement | 2008 | |||||||||||
Labor | 60,837 | 349 | (882) | (2,705) | - | 57,599 | ||||||
Civil | 60,386 | 1,450 | (1,351) | (1,876) | - | 58,609 | ||||||
Tax | 141,681 | 2,249 | (430) | (12) | 1,962 | 145,450 | ||||||
Reserve for contingencies - Gross | 262,904 | 4,048 | (2,663) | (4,593) | 1,962 | 261,658 | ||||||
Escrow Deposits (1) + (2) | 692,556 | 21,932 | (7,129) | (1,905) | 13,127 | 718,581 | ||||||
The reserves for contingencies were based on appraisal of the risks of losing litigation to which the Company and its subsidiaries are parties, where a loss is probable in the opinion of the legal advisers and the management of the Company and its subsidiaries. Details of the reserves for contingencies are presented in the financial statements as of December 31, 2007.
Possible Losses: The Company and its subsidiaries are parties to other suits in which management, supported by its legal advisers, believes that the chances of a successful outcome are possible, due to a solid defensive base in these cases. These questions do not yet indicate a trend in the decisions of the courts or any other decision in similar proceedings considered probable or remote, and therefore no provision has been established for these. As of September 30, 2008, the claims relating to possible losses were as follows: (i) R$ 217,935 for labor suits (R$ 214,766 as of June 30, 2008); (ii) R$ 495,370 for civil suits, mainly for suits for personal injuries, environmental damages and tariff increases (R$ 394,771 as of June 30, 2008); and (iii) 516,440 in respect of tax suits, relating basically to Income Tax, ICMS, FINSOCIAL and PIS and COFINS R$ (R$ 475,343 as of June 30, 2008).
Escrow Deposit - Income Tax: refers to discussion of the deductibility for income tax purposes of expense recorded in 1997 in respect of the welfare deficit of the pension plan of the subsidiary CPFL Paulista's employees in relation to Fundação CESP, due to the renegotiation and renewal of debt in that year. After consulting the Brazilian Federal Income Office, CPFL Paulista obtained a favorable answer in Note MF/SRF/COSIT/GAB nº 157 of April 9, 1998, and used the tax deductibility of the expense, thereby generating tax loss carryforwards in that year. In March 2000, CPFL Paulista was assessed by the tax inspectors in relation to use of the tax loss carryforwards in 1997 and 1998. In 2007, as a result of the legal decision demanding the deposit to permit continuity of the discussions, CPFL Paulista made the escrow deposit, restated to September 30, 2008 at R$ 402,801 (R$ 391,814 as of June 30, 2008). This deductibility also affected other taxes and, in order to be able to continue the discussions, the subsidiary CPFL Paulista offered a total of R$ 223,505 (bank guarantees), restated as of September 30, 2008. Based on the updated position of the legal counsel in charge of this case, the risk of loss continues to be classified as remote.
41
Based on the opinion of their legal advisers, Management of the Company and of its subsidiaries consider that there are no significant contingent risks that are not covered by adequate provisions in the Interim Financial Statements, or that might result in the significant impact on future earnings.
( 22) OTHER ACCOUNTS PAYABLE | ||
Consolidated | ||||||||
Current | Long-term | |||||||
September | June 30, | September | June 30, | |||||
30, 2008 | 2008 | 30, 2008 | 2008 | |||||
Consumers and Concessionaires | 53,185 | 51,510 | - | - | ||||
Regulatory Liability (note 3 ) | 176,021 | 183,748 | 35,322 | 23,253 | ||||
Energy Efficiency Program - PEE | 37,148 | 37,465 | 75,002 | 73,646 | ||||
Research & Development - P&D | 36,082 | 32,729 | 52,117 | 49,461 | ||||
National Scientific and Technological | ||||||||
Development Fund - FNDCT | 24,765 | 23,819 | 228 | 2,277 | ||||
Energy Research Company - EPE | 12,023 | 12,074 | 114 | 632 | ||||
Fund for Reversal | - | - | 17,751 | 17,751 | ||||
Advances | 13,864 | 10,457 | 92,429 | 82,597 | ||||
Interest on Compulsory Loan | 3,650 | 4,120 | - | - | ||||
Emergency Charges (ECE/EAEE) | 3,237 | 4,929 | - | - | ||||
Provision for Environmental Expenses | 6,987 | 8,252 | 544 | 541 | ||||
Payroll | 6,898 | 5,990 | - | - | ||||
Profit sharing | 19,720 | 19,479 | - | - | ||||
Other | 63,833 | 51,935 | 9,370 | 6,434 | ||||
Total | 457,413 | 446,507 | 282,877 | 256,592 | ||||
42
( 23 ) SHAREHOLDERS EQUITY |
The shareholders' participations the in the Company's equity as of September 30, 2008 and June 30, 2008 are distributed as follows:
Total Shares | ||||||||
September 30, 2008 | June 30, 2008 | |||||||
Common | Interest | Common | Interest | |||||
Shareholders | Shares | % | Shares | % | ||||
VBC Energia S.A. | 136,329,808 | 28.41 | 136,329,808 | 28.41 | ||||
521 Participações S.A. | 149,233,727 | 31.10 | 149,233,727 | 31.10 | ||||
Bonaire Participações S.A. | 60,713,511 | 12.65 | 60,713,511 | 12.65 | ||||
BNDES Participações S.A. | 27,465,653 | 5.72 | 27,465,653 | 5.72 | ||||
Brumado Holdings S.A. | 28,420,052 | 5.92 | 28,420,052 | 5.92 | ||||
Board Members | 3,112 | - | 3,112 | - | ||||
Executive Officers | 13,590 | - | 31,102 | 0.01 | ||||
Other Shareholders | 77,731,485 | 16.20 | 77,713,973 | 16.19 | ||||
Total | 479,910,938 | 100.00 | 479,910,938 | 100.00 | ||||
Interest on Shareholders Equity and Dividend
Parent Company | ||||
September | June 30, | |||
30, 2008 | 2008 | |||
Interest Payable on Shareholders Equity | 439 | 441 | ||
Dividend Payable | ||||
VBC Energia S.A. | - | 170,892 | ||
521 Participações S.A. | - | 187,067 | ||
Bonaire Participações S.A. | - | 76,105 | ||
BNDES Participações S.A. | - | 34,429 | ||
Other Shareholders | 16,531 | 147,084 | ||
Subtotal | 16,531 | 615,577 | ||
Total | 16,970 | 616,018 | ||
During the quarter, the Company paid an interim dividend and interest on equity of R$ 599,048, as declared and provided as of June 30, 2008.
43
( 24 ) OPERATING REVENUES |
Consolidated | ||||||||
2008 | 2007 | |||||||
Revenue from eletric energy operations | 3rd Quarter | Nine months | 3rd Quarter | Nine months | ||||
Consumer class | ||||||||
Residential | 1,080,093 | 3,363,073 | 1,136,254 | 3,387,733 | ||||
Industrial | 1,033,331 | 3,062,751 | 1,080,990 | 3,028,394 | ||||
Commercial | 555,984 | 1,789,087 | 591,422 | 1,842,920 | ||||
Rural | 107,794 | 327,470 | 129,832 | 344,655 | ||||
Public Administration | 81,651 | 251,798 | 88,029 | 259,040 | ||||
Public Lighting | 64,348 | 200,484 | 71,719 | 206,226 | ||||
Public Services | 101,969 | 315,841 | 114,663 | 332,281 | ||||
Billed | 3,025,170 | 9,310,504 | 3,212,909 | 9,401,249 | ||||
Unbilled (Net) | 5,375 | (40,221) | 58,388 | 25,229 | ||||
Emergency charges - ECE/EAEE | 4 | 14 | 12 | 41 | ||||
Realization of extraordinary tariff adjustment (note 3 a) | (880) | (2,669) | (53,705) | (163,442) | ||||
Realization of free energy (note 3 a) | (263) | (763) | (19,583) | (57,223) | ||||
Tariff review - Remuneration base (note 3 b.1) | - | 728 | 2,078 | 6,142 | ||||
Realization of tariff review - Remuneration base (note 3 b.1) | - | (2,193) | (12,484) | (34,476) | ||||
Tariff review - Depreciation (note 3 b.1) | - | - | - | 6,310 | ||||
Realization of tariff review - Depreciation (note 3 b.1) | - | (13,147) | (12,470) | (23,854) | ||||
Realization of tariff review - Purchase of electric energy from Itaipu (nota 3.b.3) | - | - | - | (13,052) | ||||
Other financial components | 300 | (10,972) | 2,771 | 23,665 | ||||
Realization of other financial components | 5,657 | (7,421) | (13,743) | (17,626) | ||||
Discount of tariff adjustment TUSD and irrigation (note 3.b.3) | 13,452 | 27,066 | 19,328 | 53,018 | ||||
Realization of discount of tariff adjustment TUSD and irrigation (note 3.b.3) | (25,411) | (54,454) | (11,609) | (25,283) | ||||
Discount TUSD Generation (note 3.b.3) | - | 11,679 | - | - | ||||
Realization of discount TUSD Generation (note 3.b.3) | (2,920) | (5,256) | - | - | ||||
ELECTRICITY SALES TO FINAL CONSUMERS | 3,020,484 | 9,212,895 | 3,171,892 | 9,180,698 | ||||
Furnas Centrais Elétricas S.A. | 81,161 | 241,754 | 75,320 | 223,534 | ||||
Other concessionaires and licensees | 141,485 | 396,051 | 98,171 | 217,673 | ||||
Current electric energy | 18,533 | 25,470 | 27,048 | 44,434 | ||||
ELECTRICITY SALES TO WHOLESALER | 241,179 | 663,275 | 200,539 | 485,641 | ||||
Revenue due to network usage charge - TUSD | 190,802 | 568,301 | 208,409 | 607,239 | ||||
Low income consumer's subsidy (note 3 d) | 17,735 | 44,036 | 6,709 | 7,212 | ||||
Other revenue and income | 51,109 | 153,939 | 39,116 | 97,190 | ||||
OTHER OPERATING REVENUES | 259,646 | 766,276 | 254,234 | 711,641 | ||||
Total | 3,521,309 | 10,642,446 | 3,626,665 | 10,377,980 | ||||
44
Consolidated | ||||||||
2008 | 2007 | |||||||
Revenue from Eletric Energy Operations - Consolidated - GWh (*) | 3rd Quarter | Nine months | 3rd Quarter | Nine months | ||||
Consumer class | ||||||||
Residential | 2,918 | 8,653 | 2,671 | 7,993 | ||||
Industrial | 4,129 | 12,026 | 4,316 | 12,277 | ||||
Commercial | 1,654 | 5,096 | 1,505 | 4,791 | ||||
Rural | 612 | 1,819 | 669 | 1,802 | ||||
Public Administration | 256 | 754 | 238 | 712 | ||||
Public Lighting | 340 | 1,010 | 328 | 953 | ||||
Public Services | 408 | 1,217 | 396 | 1,180 | ||||
Billed | 10,317 | 30,575 | 10,123 | 29,708 | ||||
Own Consumption | 8 | 24 | 7 | 21 | ||||
Electric Energy distributed | 10,325 | 30,599 | 10,130 | 29,729 | ||||
Furnas Centrais Elétricas S.A. | 763 | 2,272 | 763 | 2,263 | ||||
Other Concessionaires and Licensees | 1,340 | 3,632 | 1,081 | 2,866 | ||||
Current Electric Energy | 203 | 546 | 368 | 1,561 | ||||
ELECTRICITY SALES TO WHOLESALER | 2,306 | 6,450 | 2,212 | 6,690 | ||||
Consolidated | ||||
September 30, | September 30, | |||
Number of consumers (*) | 2008 | 2007 | ||
Consumer class | ||||
Residential | 5,531,805 | 5,334,690 | ||
Industrial | 77,111 | 86,429 | ||
Commercial | 492,259 | 481,964 | ||
Rural | 229,820 | 263,674 | ||
Public Administration | 41,636 | 40,703 | ||
Public Lighting | 5,944 | 4,294 | ||
Public Services | 6,412 | 6,259 | ||
TOTAL | 6,384,987 | 6,218,013 | ||
(*) Information not reviewed by the independent auditors.
In the quarter, the indirect subsidiary CERAN finalized the negotiations with the Japanese Government in relation to the transfer of the Monte Claro Hydropower Plant's carbon credits for the period from March 2005 to February 2008 to the Tokyo Electric Power Company TEPCO, receiving an amount of R$ 8,875 from this transaction (R$ 5,769 in proportion to the participation of the subsidiary CPFL Geração), recorded in Other Operating Income.
45
( 25 ) COST OF ELECTRIC ENERGY |
Consolidated | ||||||||
2008 | 2007 | |||||||
Electricity purchased for resale | 3rd Quarter | Nine months | 3rd Quarter | Nine months | ||||
Energy Purchased in Restricted Framework - ACR | ||||||||
Itaipu Binacional | 227,433 | 675,349 | 245,660 | 754,255 | ||||
Furnas Centrais Elétricas S.A. | 24,473 | 72,597 | 23,107 | 65,765 | ||||
CESP - Cia Energética de São Paulo | 32,633 | 100,947 | 32,641 | 49,637 | ||||
Cia de Geração de Energia Elétrica do Tietê | 7,228 | 20,903 | 8,440 | 23,845 | ||||
Duke Energy Inter. Ger. Paranapanema S.A. | 4,026 | 11,371 | 26,059 | 82,774 | ||||
Tractebel Energia S.A. | 243,280 | 695,101 | 249,619 | 750,145 | ||||
Petróleo Brasileiro S.A. Petrobrás | 51,586 | 137,760 | 53,258 | 140,995 | ||||
CHESF - Cia Hidro Elétrica do São Francisco | 24,701 | 73,488 | 11,002 | 31,980 | ||||
CEMIG - Cia Energética de Minas Gerais | 18,485 | 56,920 | 5,140 | 15,506 | ||||
TermoRio S.A. | 18,376 | 56,459 | - | - | ||||
Enguia Gen | 2,368 | 38,561 | - | - | ||||
AES Uruguaiana Ltda. | 44,098 | 125,153 | 45,336 | 117,872 | ||||
Câmara de Comercialização de Energia Elétrica - CCEE | 38,408 | 231,113 | 36,983 | 41,609 | ||||
Other | 93,172 | 307,665 | 62,364 | 179,638 | ||||
830,267 | 2,603,387 | 799,609 | 2,254,021 | |||||
Energy Purchased in the Free Market - ACL | 390,355 | 1,074,891 | 348,961 | 976,845 | ||||
1,220,622 | 3,678,278 | 1,148,570 | 3,230,866 | |||||
Deferral/Amortization net effect - CVA | 141,551 | 221,428 | 53,580 | (30,545) | ||||
Overcontracting of energy (note 3 b.3) | (98,431) | 64,031 | (11,400) | (57,263) | ||||
Refund to consumer - Tariff adjustments (note 3 b.3) | - | (26,212) | (24,861) | 51,074 | ||||
PIS and COFINS credit | (112,417) | (341,357) | (104,921) | (287,591) | ||||
Other | 746 | 1,947 | 267 | 267 | ||||
Subtotal | 1,152,071 | 3,598,115 | 1,061,235 | 2,906,808 | ||||
Electricity Network Usage Charge | ||||||||
Basic network charges | 200,099 | 545,178 | 163,342 | 474,127 | ||||
Charges for transmission from Itaipu | 19,574 | 54,381 | 16,476 | 48,620 | ||||
Connection charges | 18,715 | 50,044 | 6,805 | 32,581 | ||||
Cost of network usage | 2,280 | 6,984 | 2,388 | 3,839 | ||||
System Service Charges - ESS | 38,085 | 129,905 | (906) | 8,517 | ||||
278,753 | 786,492 | 188,105 | 567,684 | |||||
Net effect of deferral and amortization - CVA | (62,108) | (134,080) | 1,685 | 9,901 | ||||
Credit of PIS and COFINS | (18,345) | (54,450) | (16,635) | (49,439) | ||||
Subtotal | 198,300 | 597,962 | 173,155 | 528,146 | ||||
Total | 1,350,371 | 4,196,077 | 1,234,390 | 3,434,954 | ||||
46
Consolidated | ||||||||
2008 | 2007 | |||||||
Electricity Purchased for Resale - GWh (*) | 3rd Quarter | Nine months | 3rd Quarter | Nine months | ||||
Energy Purchased in Restricted Framework - ACR | ||||||||
Itaipu Binacional | 2,794 | 8,298 | 2,784 | 8,216 | ||||
Furnas Centrais Elétricas S.A. | 312 | 939 | 305 | 890 | ||||
CESP - Cia Energética de São Paulo | 435 | 1,281 | 407 | 641 | ||||
Cia de Geração de Energia Elétrica do Tietê | 76 | 226 | 97 | 276 | ||||
Duke Energy Inter. Ger. Paranapanema S.A. | 55 | 157 | 266 | 856 | ||||
Tractebel Energia S.A. | 1,796 | 5,299 | 1,997 | 6,073 | ||||
Petróleo Brasileiro S.A. Petrobrás | 462 | 1,225 | 464 | 1,234 | ||||
CHESF - Cia Hidro Elétrica do São Francisco | 311 | 935 | 160 | 468 | ||||
CEMIG - Cia Energética de Minas Gerais | 158 | 526 | 64 | 196 | ||||
TermoRio S.A. | 80 | 285 | - | - | ||||
Enguia Gen | - | 83 | - | - | ||||
AES Uruguaiana Ltda. | 327 | 916 | 327 | 917 | ||||
Câmara de Comercialização de Energia Elétrica - CCEE | 680 | 2,012 | 243 | 455 | ||||
Other | 749 | 2,199 | 558 | 1,587 | ||||
Subtotal | 8,235 | 24,381 | 7,672 | 21,809 | ||||
Energy Purchased in the Free Market - ACL | 4,268 | 11,816 | 4,489 | 14,158 | ||||
Total | 12,503 | 36,197 | 12,161 | 35,967 | ||||
(*) Information not reviewed by the independent auditors
47
( 26 ) OPERATING EXPENSES |
Parent company | ||||||||
2008 | 2007 | |||||||
General and Administrative Expenses | 3rd Quarter | Nine months | 3rd Quarter | Nine months | ||||
Personnel | 727 | 2,071 | 620 | 1,367 | ||||
Materials | 22 | 45 | 15 | 47 | ||||
Outside Services | (47) | 6,260 | 1,691 | 8,560 | ||||
Leases and Rentals | 44 | 114 | 5 | 91 | ||||
Depreciation and Amortization | 24 | 74 | 25 | 75 | ||||
Publicity and Advertising | 226 | 603 | 196 | 1,455 | ||||
Legal, Judicial and Indemnities | 6 | 402 | - | 209 | ||||
Donations, Contributions and Subsidies | - | 138 | - | - | ||||
Other | 2,437 | 3,698 | 455 | 1,210 | ||||
Total | 3,439 | 13,405 | 3,007 | 13,014 | ||||
48
Consolidated | ||||||||
2008 | 2007 | |||||||
Sales and Marketing Expenses | 3rd Quarter | Nine months | 3rd Quarter | Nine months | ||||
Personnel | 14,697 | 49,232 | 14,508 | 40,774 | ||||
Materials | 752 | 2,101 | 606 | 1,649 | ||||
Outside Services | 25,257 | 48,386 | 16,619 | 44,258 | ||||
Allowance for Doubtful Accounts | 8,081 | 30,266 | 14,257 | 31,026 | ||||
Depreciation and Amortization | 2,910 | 8,724 | 2,715 | 7,256 | ||||
Collection Tariffs and Services | 12,226 | 35,911 | 11,905 | 34,508 | ||||
Other | 2,682 | 6,732 | 3,373 | 10,484 | ||||
Total | 66,605 | 181,352 | 63,983 | 169,955 | ||||
General and Administrative Expenses | ||||||||
Personnel | 32,303 | 99,593 | 29,366 | 81,545 | ||||
Materials | 1,719 | 4,759 | 1,254 | 3,379 | ||||
Outside Services | 35,993 | 105,790 | 37,696 | 103,981 | ||||
Leases and Rentals | 1,587 | 3,540 | 1,070 | 3,073 | ||||
Depreciation and Amortization | 2,229 | 16,198 | 5,175 | 14,341 | ||||
Publicity and Advertising | 2,020 | 3,633 | 1,198 | 3,888 | ||||
Legal, Judicial and Indemnities | 2,666 | 14,387 | 6,299 | 20,885 | ||||
Donations, Contributions and Subsidies | 967 | 3,202 | 962 | 2,778 | ||||
Other | 4,197 | 16,028 | 2,524 | 11,622 | ||||
Total | 83,681 | 267,130 | 85,544 | 245,492 | ||||
Other Operating Expenses | ||||||||
Inspection Fee | 6,785 | 18,784 | 5,751 | 15,657 | ||||
RTE and Free Energy Losses | 76 | 586 | 30 | 9,420 | ||||
Other | (886) | 74 | 1,208 | 1,212 | ||||
Total | 5,975 | 19,444 | 6,989 | 26,289 | ||||
Goodwill Amortization | 9,530 | 28,591 | 8,930 | 25,260 | ||||
Total Operating Expenses | 165,791 | 496,517 | 165,446 | 466,996 | ||||
49
( 27 ) FINANCIAL INCOME (EXPENSE) |
Parent Company | ||||||||
2008 | 2007 | |||||||
Financial Income | 3rd Quarter | Nine months | 3rd Quarter | Nine months | ||||
Income from Short-term Financial Investments | 8,420 | 26,550 | 8,736 | 21,215 | ||||
Interest on Prepaid Income and Social Contribution | ||||||||
Taxes | 669 | 2,354 | 617 | 2,344 | ||||
Monetary and Exchange Variations | - | 2,597 | - | 111 | ||||
PIS and COFINS of Interest on Equity | - | (9,097) | - | (6,518) | ||||
Other | 2,758 | 4,674 | 1,116 | 2,791 | ||||
Subtotal | 11,847 | 27,078 | 10,469 | 19,943 | ||||
Interest on shareholder´s equity | - | 98,340 | - | 70,464 | ||||
TOTAL | 11,847 | 125,418 | 10,469 | 90,407 | ||||
Financial Expense | ||||||||
Debt Charges | (15,370) | (45,628) | (15,230) | (18,228) | ||||
Banking Expenses | - | (12) | (72) | (2,856) | ||||
Monetary and Exchange Variations | (100) | (6,803) | (3,600) | (29,906) | ||||
Other | (1,689) | (4,866) | (728) | (2,028) | ||||
Subtotal | (17,159) | (57,309) | (19,630) | (53,018) | ||||
Goodwill Amortization | (32,299) | (96,903) | (28,476) | (78,864) | ||||
Total | (49,458) | (154,212) | (48,106) | (131,882) | ||||
Net financial expenses | (37,611) | (28,794) | (37,637) | (41,475) | ||||
Consolidated | ||||||||
2008 | 2007 | |||||||
Financial Income | 3rd Quarter | Nine months | 3rd Quarter | Nine months | ||||
Income from Short-term Financial Investments | 42,777 | 104,578 | 32,560 | 82,748 | ||||
Late Payments Charges | 29,097 | 87,477 | 28,649 | 80,111 | ||||
Interest on Prepaid Income and Social Contribution Taxes | 1,719 | 5,489 | 4,508 | 8,796 | ||||
Interest on Escrow deposits | 13,127 | 35,789 | 5,151 | 8,041 | ||||
Monetary and Exchange Variations | 20,959 | 30,121 | (1,543) | (3,487) | ||||
Remuneration Interest - CVA and Parcel "A" | 8,039 | 30,594 | 14,355 | 55,208 | ||||
Discount on purchase of ICMS credit | 1,845 | 7,811 | 4,264 | 10,591 | ||||
Interest of Realization of Extraordinary Tariff Adjustment (note 3 a) | 149 | 477 | 3,939 | 16,053 | ||||
PIS and COFINS of Interest on Equity | - | (9,097) | - | (6,518) | ||||
Other | 12,764 | 31,733 | 7,158 | 26,153 | ||||
Total | 130,476 | 324,972 | 99,041 | 277,696 | ||||
Financial Expense | ||||||||
Debt Charges | (158,429) | (418,545) | (134,588) | (390,320) | ||||
Banking Expenses | (911) | (3,131) | (16,158) | (59,129) | ||||
Monetary and Exchange Variations | (62,126) | (161,281) | (28,195) | (81,848) | ||||
Other | (8,796) | (23,633) | (6,740) | (27,283) | ||||
Subtotal | (230,262) | (606,590) | (185,681) | (558,580) | ||||
Goodwill Amortization | (38,476) | (115,429) | (37,212) | (106,159) | ||||
Total | (268,738) | (722,019) | (222,893) | (664,739) | ||||
Net financial expenses | (138,262) | (397,047) | (123,852) | (387,043) | ||||
50
( 28 ) FINANCIAL INSTRUMENTS AND OPERATING RISKS |
28.1 COMMENTS ON RISKS AND COMPLIANCE WITH CVM INSTRUCTION Nº 550 (DISCLOSURE OF DERIVATIVE OPERATIONS)
The business of the Company and its subsidiaries comprises, principally, generation, sale and distribution of electric energy. As public service concessionaires, the operations and tariffs of its principal subsidiaries are regulated by ANEEL.
The principal market risk factors that affect their business are the following:
Exchange Rate Risk: This risk derives from the possibility of the subsidiaries incurring losses and cash constraints on account of fluctuations in exchange rates, increasing the balances of foreign currency denominated liabilities. The Company and its subsidiaries substancially protect themselves against the risks of raising funds in foreign currency by contracting swap operations, indexing the liabilities to the variation in the CDI. The Companys subsidiaries are also exposed in their operations to exchange variations in the purchase of electric energy from Itaipu. The compensation mechanism - CVA protects the companies against possible losses. These operations are recorded on the accrual basis and in accordance with the terms of the contractual instrument.
Interest Rate Risk: This risk is derived from the possibility of the Company and its subsidiaries incurring losses due to fluctuations in interest rates that increase financial expenses on loans, financing and debentures. The Company and its subsidiaries set loans taken out in local currency against regulatory assets, restated in accordance with the variation in the SELIC rate. Swap operations have been contracted for a portion of the debentures issued, as protection against variations in the interest rate. The subsidiaries also aim to increase the number of loans tied to the variation in the TJLP, an index less susceptible to the oscillations of the financial market.
Credit Risk: This risk arises from the possibility of the subsidiaries incurring losses resulting from difficulties in receiving amounts billed to customers. This risk is evaluated by the Company and its subsidies as low, as it is spread over the number of customers and in view of the collection policy and cutting off supplies to defaulting costumers.
Risk of Energy Shortages: The energy sold by the subsidiaries is basically generated by hydropower plants. A prolonged period of low rainfall could reduce the volume of water in the reservoirs of the power plants and result in losses based on the increase in costs of purchasing energy or a reduction in revenues arising from the adoption of a new rationing program, as in 2001.
Risk of Acceleration of Debts: The subsidiaries have loan agreements, financing and debentures with restrictive clauses (covenants) normally applicable to these kinds of operation, related to compliance with economic and financial ratios, cash generation and others. These covenants are monitored appropriately and do not restrict the capacity to operate normally.
28.2 VALUATION OF FINANCIAL INSTRUMENTS
The Company and its subsidiaries maintain certain operating and financial policies and strategies with a view to ensuring the liquidity, security and profitability of their assets. As a result, control and follow-up procedures are in place on the transactions and balances of financial instruments, for the purpose of monitoring the risks and current rates in relation to those used in the market.
As of September 30, 2008, the principal financial asset and liability instruments of the Company and its subsidiaries are as follows:
51
Cash and banks with market values approximately equivalent to the amounts stated in the balance sheets (note 4);
Investments investments are valued by the equity method of accounting (note 13);
Regulatory Assets
and Liabilities the amounts are recorded in accordance with the criteria defined by ANEEL rules and instructions (note 3);
Loans and Financing - are valued in accordance with the criteria stipulated in the contracts and the
characteristics defined in note 15;
Debentures may be traded on the market and are valued in accordance with the criteria stipulated at the time of issue and the characteristics defined in note 16.
The book values of the main financial instruments for the Company and its subsidiaries, compared with the market funding amounts as of September 30, 2008 and June 30, 2008, are as follows:
Parent Company | ||||||||
September 30, 2008 | June 30, 2008 | |||||||
Book Value | Fair Value | Book Value | Fair Value | |||||
Debentures (note 16) | (454,432) | (461,928) | (466,678) | (474,341) | ||||
Derivatives (note 15) | (35) | (2,271) | (44) | (105) | ||||
Total | (454,467) | (464,199) | (466,722) | (474,446) | ||||
Consolidated | ||||||||
September 30, 2008 | June 30, 2008 | |||||||
Book Value | Fair Value | Book Value | Fair Value | |||||
Loans and financing (note 15) | (3,987,522) | (3,722,174) | (3,557,365) | (3,321,746) | ||||
Debentures (note 16) | (2,672,179) | (2,699,468) | (2,670,959) | (2,710,826) | ||||
Derivatives (note 15) | 2,673 | (39,062) | (156,433) | (169,913) | ||||
Total | (6,657,028) | (6,460,704) | (6,384,757) | (6,202,485) | ||||
The estimates of the market value of these financial instruments (including derivatives) for the Company and its subsidiaries were based on models that discount future cash flows to present value, comparison with similar transactions contracted on dates close to the end of the quarter and comparisons with average market parameters. In cases where there are no similar transactions in the market, principally relating to the loan linked to the regulatory assets and credits receivable from CESP, the subsidiaries assumed that the market value corresponds to the respective book value.
28.3 DERIVATIVES
The Company and its subsidiaries use derivatives to manage the risks associated with variations in exchange and interest rates, and have sufficient exchange swaps to cover the degree of net exposure to exchange risks, including all the assets and liabilities tied to exchange variation.
The protection financial instrument contracted by the Company and its subsidiaries comprises currency or interest rate swaps with no leverage component, margin call requirements or daily or periodical adjustments.
As of September 30, 2008, the Company and its subsidiaries held swap operations as a hedge against their exposure to variations in exchange and interest rates, as shown below:
52
Book values | ||||||||||||||||
Company / Strategy | Assets | (Liabilities) | Net Assets (Liabilities) |
Net market value |
Loss on mark to market(2) |
Currency / index |
Maturity | Notional value | ||||||||
CPFL Energia (parent company) | ||||||||||||||||
Interest rate hedge (1) | - | (35) | (35) | (2,271) | (2,236) | CDI + spread | March 2009 to March 2014 | 450,000 | ||||||||
CPFL Paulista | ||||||||||||||||
Exchange rate hedge | 29,575 | (55,610) | (26,035) | (53,721) | (27,686) | yen | August 2009 to January 2012 | 439,466 | ||||||||
Exchange rate hedge | - | 1,261 | 1,261 | 1,162 | (99) | dollar | October 2008 to April 2009 | 14,497 | ||||||||
29,575 | (54,349) | (24,774) | (52,559) | (27,785) | ||||||||||||
CPFL Piratininga | ||||||||||||||||
Exchange rate hedge | 3,603 | - | 3,603 | 3,091 | (512) | dollar | February 2009 | 42,428 | ||||||||
CPFL Geração | ||||||||||||||||
April 2010 to | ||||||||||||||||
Exchange rate hedge | 20,833 | - | 20,833 | 10,636 | (10,197) | yen | January 2011 | 486,760 | ||||||||
Exchange rate hedge | 1,070 | - | 1,070 | 925 | (145) | dollar | October 2008 | 62,042 | ||||||||
21,903 | - | 21,903 | 11,561 | (10,342) | ||||||||||||
RGE | ||||||||||||||||
December 2008 to | ||||||||||||||||
Interest rate hedge (1) | 14 | (1) | 13 | (662) | (675) | CDI + spread | December 2013 | 380,000 | ||||||||
Exchange rate hedge | 1,899 | - | 1,899 | 1,717 | (182) | yen | September 2009 | 27,000 | ||||||||
Exchange rate hedge | 64 | - | 64 | 61 | (3) | dollar | October 2008 | 1,255 | ||||||||
1,977 | (1) | 1,976 | 1,116 | (860) | ||||||||||||
Consolidated | 57,058 | (54,385) | 2,673 | (39,062) | (41,735) | |||||||||||
(1) The interest rate hedge swaps have a half-yearly validity, and the theoretical value decreases in accordance with amortization of the debt.
(2) The Company and its subsidiaries do not record these amounts. For further
information, see Note 29
* The swaps are traded on the over-the-counter market
** The counterparts in the swap operation are: Citibank, ABN, Banco do Brasil, Bradesco, HSBC, Itaú, Santander and BNP Paribas
*** For further detais of terms and information on debts and debentures, see Notes 15 and
16.
The Company and its subsidiaries recorded gains of R$ 64,450 in the nine-month period ended September 30, 2008 (R$ 166,932 in the quarter) on the derivatives held. The derivative contracts are recorded on the accrual basis (see Note 29).
These effects neutralized the impact of exchange variations on foreign currency indebtedness.
It should be noted that the subsidiary ENERCAN has no exchange hedge in relation to the debt of R$ 88,546 to BID and the BNDES, since a percentage of its tariff adjustments covers the exchange variation in the tariff period. In spite of the existence of a natural hedge against this exposure, the effect of exchange variations on these debts generated a loss of R$ 14,657 in the quarter (R$ 6,426 in the year), which will only be recovered after the subsidiary's next tariff adjustment.
The subsidiary CPFL Paulista also has a liability of R$ 47,866 tied to foreign currency, not secured on any derivative, as it has sufficient assets indexed in dollars (credit receivable from CESP and a fund tied to foreign currency see Note 11) to offset any exchange impact.
53
( 29 ) CHANGE IN THE LEGISLATION AMENDMENT OF LAW 6.404/76 LAW 11.638/07 |
Law 11.638/07 was enacted on December 28, 2007, amending, revoking and adding to the provisions of Brazilian Company Law (Law 6.404/76) relating to preparation and disclosure of Financial Statements. These changes came into effect as from January 1, 2008.
Solely to comply with the provisions of CVM Instruction 469, dated May 2, 2008, the Company analyzed the impacts caused by Law 11.638/2007 on its financial statements for the nine months ended September 30, 2008, comparated to the same period of 2007, and no significant effects were identified. In the opinion of Company management, the financial statements already reflect, in all material respects, the changes proposed by Law 11.638, based on the guidelines issued by the Brazilian Securities Commission - CVM.
The main introduced by this law, which came into effect as from 2008, are summarized below:
Certain financial instruments and derivatives should be recorded at market value.
Mandatory registration in fixed assets of physical assets to be used in the Company's operations, including those in respect of which the benefits, risks and control have been transferred to the Company;
Pre-fixed long-term assets
and liabilities, and relevant short-term assets and liabilities, should be adjusted to current value where the effects are relevant;
Restriction of the use of deferred assets to pre-operating expenses and restructuring expenses that
effectively contribute to increasing income in more than one fiscal year and that do not constitute simply any reduction in costs or increase in operating efficiency.
In Note 28, the Company discloses the market values of certain financial instruments. The impact of exchange variations on the market value of the derivatives, due mainly to the current crisis in the world financial markets, will result in a decrease in their realization value in comparison with the book value of R$ 27,545, net of tax effects. However, taking into consideration the international accounting practices issued the IASB, as established by IAS 39, with regard to measuring the derivatives to market value, the Company could also consider the effects of appreciation of the financial instruments tied to these derivatives at the time of contracting by measuring to market. Consequently, were this procedure to be adopted overall, the total impact would amount to R$ 11,691. However, the Company is awaiting CVM regulations on the matter prior to making the appropriate adjustments to the accounts.
Furthermore, the Company (i) was not affected by the change in the rule for evaluation of investments in associated companies, (ii) did not engage in any transactions involving premiums received on the issuing of debentures, donations or investment subsidies, (iii) does not have an accounting policy of revaluation of assets, (iv) has no remuneration based on shares, and (v) was not involved in any merger, amalgamation or spin off between unrelated parties, linked to the transfer of control.
As announced to the market, CVM intends to conclude, in 2008, the regulatory process for the provisions of corporate law that have been altered and that require regulation, and to review all its regulatory rulings on accounting matters, in order to check and eliminate any divergences in relation to the specific changes made by the new law.
The effects of application of the new Law on the Company's quarterly information have been evaluated based on the legislation and regulations in force as of this date, and may still change as a result of regulations to be issued by the appropriate agencies.
54
( 30 ) SUBSEQUENT EVENT |
A debenture was issued in a public offer on October 1, 2008, as deliberated in a meeting of the Board of Directors of the subsidiary CPFL Piratininga held on September 29, 2008. The debenture is a 2nd issue, registered, book entry, single series, subordinated debenture, not convertible into shares, with a unit par value of R$ 100,000 (one hundred million reais) on the issue date, bearing interest of 106,45% of the CDI and maturing on April 30, 2011. The debenture was issued in order to settle promissory notes to Banco do Brasil, maturing in a single installment in October 2008.
55
APENDIX I
CASH FLOWS
For the nine months period ended September 30, 2008 and 2007
Parent Company | Consolidated | |||||||
September 30, | September 30, | September 30, | September 30, | |||||
2008 | 2007 | 2008 | 2007 | |||||
OPERATING CASH FLOW | ||||||||
Income for the period | 940,168 | 1,270,814 | 940,168 | 1,270,814 | ||||
Adjustments to reconcile net income to cash derived from | ||||||||
operations | ||||||||
Non-controlling shareholders' interest | - | - | 7,254 | 2,744 | ||||
Monetary restatement of rationing regulatory assets | - | - | (33,183) | (63,787) | ||||
Provision for losses on rationing regulatory assets | - | - | 587 | 9,420 | ||||
Tariff review and adjustment | - | - | 39,140 | 51,893 | ||||
Other regulatory assets | - | - | 90,403 | 51,505 | ||||
Low income consumers subsidy | - | - | (44,036) | (7,212) | ||||
Depreciation and amortization | 96,977 | 78,939 | 425,189 | 407,839 | ||||
Reserve for contingencies | 9,097 | 8,505 | (10,190) | (1,917) | ||||
Interest, monetary and exchange restatement | (16,214) | (32,931) | 100,616 | (87,056) | ||||
Derivative contracts | (47,900) | (22,565) | (178,417) | 81,544 | ||||
Pension plan gain | - | - | (63,116) | (37,746) | ||||
Equity in subsidiaries | (1,104,671) | (1,400,162) | - | - | ||||
Loss (gain) on the write-off of permanent assets and investment | - | (3,307) | 14,372 | 19,937 | ||||
Deferred taxes - assets and liabilities | 3,942 | 943 | (26,689) | 20,620 | ||||
Research and development and energy efficiency programs | - | - | 2,228 | (5,119) | ||||
Other | - | - | 20,942 | (5,281) | ||||
REDUCTION (INCREASE) IN OPERATING ASSETS | ||||||||
Consumers, concessionaires and licensees | - | - | 132,264 | 144,164 | ||||
Dividend and interest on equity received | 1,549,643 | 1,574,820 | - | - | ||||
Recoverable taxes | 6,078 | 3,794 | 29,474 | 14,995 | ||||
Financial Investments | 11,720 | 16 | 93,054 | 79,063 | ||||
Deferred tariff costs variations | - | - | 9,975 | 80,441 | ||||
Additions (reduction) deferred charges | - | - | (3,917) | 1,143 | ||||
Escrow deposits | - | - | (35,419) | (393,038) | ||||
Other operating assets | (37) | (6,782) | (7,436) | (29,013) | ||||
INCREASE (DECREASE) IN OPERATING LIABILITIES | ||||||||
Suppliers | (12,332) | (4,827) | 14,458 | (20,939) | ||||
Taxes and social contributions payable | (208) | (222) | (88,649) | 87,765 | ||||
Payroll | - | - | (267) | - | ||||
Deferred tariff gains variations | - | - | 27,450 | 48,067 | ||||
Other liabilities for employee's pension plans | - | - | (66,053) | (64,174) | ||||
Interest on debts - accrued and paid | (24,056) | 18,078 | 481 | 31,679 | ||||
Interest on debts - incorporated interest | - | - | 37,051 | 30,310 | ||||
Regulatory charges | - | - | 22,990 | (27,718) | ||||
Other operating liabilities | 164 | 369 | 69,206 | 38,488 | ||||
CASH FLOWS PROVIDED BY OPERATIONS | 1,412,371 | 1,485,482 | 1,519,930 | 1,729,431 | ||||
INVESTMENT ACTIVITIES | ||||||||
Acquisition of investments (net of cash & cash equivalents) | (1) | (12) | (111) | (377,437) | ||||
Increase in property, plant and equipment | (17) | (25) | (804,866) | (864,903) | ||||
Financial investments | - | - | (54,817) | (11,649) | ||||
Redemption of financial investment | 27,317 | 22,566 | 112,151 | 23,379 | ||||
Advance energy purchase agreements | - | - | (717) | 2,258 | ||||
Increase in special obligations | - | - | 57,240 | 42,534 | ||||
Additions (reduction) to deferred charges | 6,412 | (729) | (448) | (12,696) | ||||
Sale of permanent assets | - | 2,631 | 22,714 | 32,783 | ||||
Advance for Future Capital Increase | - | (409,368) | - | - | ||||
Decrease (Increase) capital in subsidiary | 39,997 | 12,400 | (3) | - | ||||
Other | 5,031 | - | (198) | - | ||||
GENERATION (UTILIZATION) OF CASH IN INVESTMENTS | 78,739 | (372,537) | (669,055) | (1,165,731) | ||||
FINANCING ACTIVITIES | ||||||||
Loans, financing and debentures obtained | 446,804 | 466,250 | 1,786,083 | 1,609,108 | ||||
Payment of capital | - | - | 1 | - | ||||
Payments of loan and debentures | (623,034) | (34,500) | (1,568,586) | (776,809) | ||||
Dividend and interest on equity paid | (1,315,240) | (1,557,175) | (1,320,666) | (1,557,575) | ||||
GENERATION (UTILIZATION) OF CASH IN FINANCING | (1,491,470) | (1,125,425) | (1,103,168) | (725,276) | ||||
DECREASE IN CASH AND CASH EQUIVALENTS | (360) | (12,480) | (252,293) | (161,576) | ||||
OPENING BALANCE OF CASH AND CASH EQUIVALENTS | 5,744 | 25,429 | 927,898 | 540,364 | ||||
CLOSING BALANCE OF CASH AND CASH EQUIVALENTS | 5,384 | 12,949 | 675,605 | 378,788 | ||||
SUPPLEMENTARY INFORMATION | ||||||||
Social contribution and income tax paid | - | - | 546,183 | 477,972 | ||||
Interest paid | 69,339 | 137 | 418,811 | 331,252 | ||||
Transactions with no cash effects | ||||||||
Advances for future capital increase through assumption of debts | ||||||||
of subsidiary | - | 202,728 | - | - | ||||
69,339 | 202,865 | 964,994 | 809,224 | |||||
September 30, | December 31, | September 30, | December | |||||
CASH AND CASH EQUIVALENTS | 2008 | 2007 | 2007 | 31, 2006 | ||||
PARENT COMPANY | ||||||||
Balance according to Corporation Law | 5,723 | 17,803 | 13,897 | 26,393 | ||||
Reclassification - FAS 95 (1) | (339) | (12,059) | (948) | (964) | ||||
Adjusted balance | 5,384 | 5,744 | 12,949 | 25,429 | ||||
Consolidated | ||||||||
Balance according to Corporation Law | 760,961 | 1,106,308 | 389,611 | 630,250 | ||||
Reclassification - FAS 95 (1) | (85,357) | (178,411) | (10,823) | (89,886) | ||||
Adjusted balance | 675,604 | 927,897 | 378,788 | 540,364 | ||||
(1) Adjustment made to cash and cash equivalents to adjust the Cash Flow Statement to the criteria established by FAS 95 Statements of Cash Flow. In accordance with this criterion, short term cash investments which, while having immediate liquidity, have maturity dates of more than 90 days with early redemption subject to their market value, are subject to reclassification to Financial Investments.
56
APENDIX II
Added Value Statements
For the nine months period ended September 30, 2008 and 2007
Parent Company | Consolidated | |||||||||
September | September | September | September | |||||||
30, 2008 | 30, 2007 | 30, 2008 | 30, 2007 | |||||||
1 - Revenues | (9,785) | 3,309 | 10,591,819 | 10,322,735 | ||||||
1.1 Operating revenues | - | - | 10,642,446 | 10,377,980 | ||||||
1.2 Provision for losses on the realization of regulatory assets | - | - | (586) | (9,420) | ||||||
1.3 Allowance for doubtful accounts | - | - | (30,266) | (31,026) | ||||||
1.4 Nonoperating income (expense) | (9,785) | 3,309 | (19,775) | (14,799) | ||||||
2- ( - ) Inputs | (11,147) | (11,483) | (5,064,301) | (4,223,942) | ||||||
2.1 - Electricity purchased for resale | - | - | (4,591,884) | (3,771,984) | ||||||
2.2 - Outsourced services | (6,260) | (8,560) | (261,896) | (249,021) | ||||||
2.3 - Material | (44) | (47) | (44,443) | (38,178) | ||||||
2.4 - Other | (4,843) | (2,876) | (160,727) | (160,568) | ||||||
2.5 - Cost of service rendered | - | - | (5,351) | (4,191) | ||||||
3- Gross added value (1 + 2) | (20,932) | (8,174) | 5,527,518 | 6,098,793 | ||||||
4- Retentions | (96,978) | (78,939) | (440,943) | (418,593) | ||||||
4.1 - Depreciation and amortization | (75) | (75) | (296,923) | (287,174) | ||||||
4.2 - Goodwill amortization | (96,903) | (78,864) | (144,020) | (131,419) | ||||||
5- Net Added Value Generated (3 + 4) | (117,910) | (87,113) | 5,086,575 | 5,680,200 | ||||||
6- Added value received in transfer | 1,140,846 | 1,426,623 | 325,943 | 211,006 | ||||||
6.1 - Financial income | 36,175 | 26,461 | 333,197 | 213,750 | ||||||
6.2 - Equity in subsidiaries | 1,104,671 | 1,400,162 | - | - | ||||||
6.3 - Non-controlling shareholder's equity | - | - | (7,254) | (2,744) | ||||||
7- Added value to be distributed (5 + 6) | 1,022,936 | 1,339,510 | 5,412,518 | 5,891,206 | ||||||
8- Distribution of added value | ||||||||||
8.1 - Personnel and charges | 1,747 | 1,213 | 249,263 | 222,281 | ||||||
8.2 - Taxes, fees and contributions | 23,716 | 17,230 | 3,611,690 | 3,961,415 | ||||||
8.3 - Interest and rentals | 57,306 | 50,253 | 611,398 | 436,696 | ||||||
8.4 - Dividend | 601,576 | 842,375 | 601,576 | 842,375 | ||||||
8.5 - Retained income for the period | 338,591 | 428,439 | 338,591 | 428,439 | ||||||
1,022,936 | 1,339,510 | 5,412,518 | 5,891,206 | |||||||
57
05.01 COMMENTS ON PERFORMANCE OF THE QUARTER
Analysis of Results CPFL Energia (parent company)
Net income was R$ 338,591 in the quarter, a decrease of 21.0% (R$ 89,848) compared to the same quarter of the previous year, due mainly to:
a) results of equity in subsidiaries, in relation to the performance of the subsidiaries, as shown below:
3rd quarter 2008 | 3rd quarter 2007 | |||
CPFL Paulista | 147,320 | 199,985 | ||
CPFL Piratininga | 60,074 | 94,876 | ||
RGE | 36,992 | 44,215 | ||
CPFL Santa Cruz | 7,598 | - | ||
CPFL Geração | 55,598 | 52,202 | ||
CPFL Brasil | 64,978 | 59,177 | ||
Perácio Participações | 9,793 | 10,454 | ||
CPFL Atende | (28) | - | ||
Nova 4 | - | 3,410 | ||
Total | 382,325 | 464,319 | ||
b) non-operating expense of R$ 8,687 was recorded in the quarter, as against income of R$ 109 in the same period of the previous year, due mainly to recognition of expenditures on prospecting for new business.
58
06.01 - CONSOLIDATED BALANCE SHEET - ASSETS (in thousands of Brazilian reais R$)
1 Code | 2 Description | 3 09/30/2008 | 4 - 06/30/2008 |
1 | Total assets | 15,446,820 | 15,341,906 |
1.01 | Current assets | 3,658,868 | 3,671,522 |
1.01.01 | Cash and banks | 760,961 | 869,611 |
1.01.02 | Credits | 2,778,223 | 2,692,421 |
1.01.02.01 | Accounts receivable | 1,586,370 | 1,644,975 |
1.01.02.01.01 | Consumers, concessionaires and licensees | 1,670,971 | 1,734,280 |
1.01.02.01.02 | (-) Allowance for doubtful accounts | (84,601) | (89,305) |
1.01.02.02 | Other credits | 1,191,853 | 1,047,446 |
1.01.02.02.01 | Financial Investments | 38,250 | 36,316 |
1.01.02.02.02 | Recoverable taxes | 171,164 | 186,696 |
1.01.02.02.03 | Deferred taxes | 227,443 | 226,485 |
1.01.02.02.04 | Deferred tariff cost variations | 600,285 | 501,308 |
1.01.02.02.05 | Prepaid expenses | 124,307 | 96,641 |
1.01.02.02.06 | Derivatives contracts | 30,404 | 0 |
1.01.03 | Materials and suppliers | 14,989 | 15,351 |
1.01.04 | Other | 104,695 | 94,139 |
1.02 | Noncurrent assets | 11,787,952 | 11,670,384 |
1.02.01 | Long-term assets | 2,552,128 | 2,570,536 |
1.02.01.01 | Other credits | 1,494,054 | 1,527,095 |
1.02.01.01.01 | Consumers, concessionaires and licensees | 182,645 | 186,190 |
1.02.01.01.02 | Financial investments | 100,558 | 103,870 |
1.02.01.01.03 | Recoverable taxes | 95,813 | 96,903 |
1.02.01.01.04 | Deferred taxes | 1,115,038 | 1,140,132 |
1.02.01.02 | Related parties | 0 | 0 |
1.02.01.02.01 | Associated companies | 0 | 0 |
1.02.01.02.02 | Subsidiaries | 0 | 0 |
1.02.01.02.03 | Other related parties | 0 | 0 |
1.02.01.03 | Other | 1,058,074 | 1,043,441 |
1.02.01.03.01 | Escrow deposits | 569,252 | 546,722 |
1.02.01.03.02 | Deferred tariff costs variations | 162,146 | 277,103 |
1.02.01.03.03 | Prepaid expenses | 92,108 | 14,615 |
1.02.01.03.04 | Derivatives contracts | 26,654 | 0 |
1.02.01.03.05 | Other | 207,914 | 205,001 |
1.02.02 | Permanent assets | 9,235,824 | 9,099,848 |
1.02.02.01 | Investments | 2,573,417 | 2,617,536 |
1.02.02.01.01 | Associated companies | 0 | 0 |
1.02.02.01.02 | Associated companies - goodwill | 0 | 0 |
1.02.02.01.03 | Permanent equity interests | 0 | 0 |
1.02.02.01.04 | Permanent equity interests - goodwill | 1,752,690 | 1,791,166 |
1.02.02.01.05 | Other investments | 820,727 | 826,370 |
1.02.02.02 | Property, plant and equipment | 6,602,587 | 6,412,590 |
1.02.02.02.01 | Property, plant and equipment | 7,597,709 | 7,374,944 |
1.02.02.02.02 | (-) Special obligation linked to the concession | (995,122) | (962,354) |
1.02.02.03 | Intangible | 0 | 0 |
1.02.02.04 | Deferred charges | 59,820 | 69,722 |
59
06.02 - CONSOLIDATED BALANCE SHEET - LIABILITIES AND SHAREHOLDERS' EQUITY (in thousands of Brazilian reais R$)
1 Code | 2 Description | 3 09/30/2008 | 4 - 06/30/2008 |
2 | Total liabilities and shareholders equity | 15,446,820 | 15,341,906 |
2.01 | Current liabilities | 3,723,518 | 3,801,553 |
2.01.01 | Loans and financing | 620,428 | 533,053 |
2.01.01.01 | Accrued interest on debts | 25,439 | 13,594 |
2.01.01.02 | Loans and financing | 594,989 | 519,459 |
2.01.02 | Debentures | 744,498 | 457,012 |
2.01.02.01 | Accrued interest on debentures | 89,755 | 90,990 |
2.01.02.02 | Debentures | 654,743 | 366,022 |
2.01.03 | Suppliers | 882,635 | 842,455 |
2.01.04 | Taxes and social contributions payable | 495,741 | 492,299 |
2.01.05 | Dividends and interest on equity | 25,650 | 624,735 |
2.01.06 | Reserves | 15 | 15 |
2.01.06.01 | Reserve for contingencies | 15 | 15 |
2.01.07 | Due to related parties | 0 | 0 |
2.01.08 | Other | 954,551 | 851,984 |
2.01.08.01 | Employee pension plans | 38,851 | 40,011 |
2.01.08.02 | Regulatory charges | 91,686 | 72,760 |
2.01.08.03 | Accrued liabilities | 60,198 | 57,397 |
2.01.08.04 | Deferred tariff gains variations | 252,018 | 231,027 |
2.01.08.05 | Derivative contracts | 54,385 | 4,282 |
2.01.08.06 | Other | 457,413 | 446,507 |
2.02 | Noncurrent liabilities | 6,335,301 | 6,493,036 |
2.02.01 | Long-term liabilities | 6,335,301 | 6,493,036 |
2.02.01.01 | Loans and financing | 3,367,094 | 3,024,312 |
2.02.01.01.01 | Accrued interest on debts | 42,003 | 26,278 |
2.02.01.01.02 | Loans and financing | 3,325,091 | 2,998,034 |
2.02.01.02 | Debentures | 1,927,681 | 2,213,947 |
2.02.01.03 | Reserves | 112,314 | 117,055 |
2.02.01.03.01 | Reserve for contingencies | 112,314 | 117,055 |
2.02.01.04 | Related parties | 0 | 0 |
2.02.01.05 | Advance for future capital increase | 0 | 0 |
2.02.01.06 | Other | 928,212 | 1,137,722 |
2.02.01.06.01 | Employee pension plans | 552,504 | 590,726 |
2.02.01.06.02 | Taxes and social contributions payable | 17,336 | 26,908 |
2.02.01.06.03 | Deferred tariff gains variations | 75,495 | 111,345 |
2.02.01.06.04 | Derivative contracts | 0 | 152,151 |
2.02.01.06.05 | Other | 282,877 | 256,592 |
2.02.02 | Deferred income | 0 | 0 |
2.03 | Non-controlling shareholders interest | 94,576 | 92,483 |
2.04 | Shareholders equity | 5,293,425 | 4,954,834 |
60
2.04.01 | Capital | 4,741,175 | 4,741,175 |
2.04.02 | Capital reserves | 16 | 16 |
2.04.03 | Revaluation reserves | 0 | 0 |
2.04.03.01 | Own assets | 0 | 0 |
2.04.03.02 | Subsidiary/associated companies | 0 | 0 |
2.04.04 | Profit reserves | 213,643 | 213,643 |
2.04.04.01 | Legal reserves | 213,643 | 213,643 |
2.04.04.02 | Statutory reserves | 0 | 0 |
2.04.04.03 | For contingencies | 0 | 0 |
2.04.04.04 | Unrealized profits | 0 | 0 |
2.04.04.05 | Profit retention | 0 | 0 |
2.04.04.06 | Special reserve for undistributed dividends | 0 | 0 |
2.04.04.07 | Other revenue reserves | 0 | 0 |
2.04.05 | Accumulated profit | 338,591 | 0 |
2.04.06 | Advance for future capital increase | 0 | 0 |
61
07.01 - CONSOLIDATED INCOME STATEMENT (in thousands of Brazilian reais R$)
1 Code | 2 Description | 3 - 07/01/2008 to 09/30/2008 | 4 - 01/01/2008 to 09/30/2008 | 5 - 07/01/2007 to 09/30//2007 | 6 - 01/01/2007 to 09/30/2007 |
3.01 | Operating revenues | 3,521,309 | 10,642,446 | 3,626,665 | 10,377,980 |
3.02 | Deductions from operating revenues | (1,132,231) | (3,458,511) | (1,222,832) | (3,596,752) |
3.02.01 | ICMS | (590,612) | (1,815,464) | (625,619) | (1,836,102) |
3.02.02 | PIS | (55,676) | (170,977) | (63,798) | (178,734) |
3.02.03 | COFINS | (256,690) | (787,348) | (291,424) | (815,841) |
3.02.04 | ISS | (664) | (2,059) | (560) | (1,134) |
3.02.05 | Global Reversal Reserve - RGR | (12,162) | (35,603) | (13,593) | (38,592) |
3.02.06 | Fuel Consumption Account - CCC | (90,857) | (274,584) | (103,259) | (358,307) |
3.02.07 | Energy Development Account - CDE | (102,751) | (303,948) | (101,533) | (295,812) |
3.02.08 | Research and Development and Energy Efficiency Programs | (22,815) | (68,514) | (23,035) | (72,188) |
3.02.09 | Emergency Charges (ECE/EAEE) | (4) | (14) | (11) | (42) |
3.03 | Net operating revenues | 2,389,078 | 7,183,935 | 2,403,833 | 6,781,228 |
3.04 | Cost of electric energy services | (1,543,677) | (4,799,175) | (1,435,025) | (3,997,904) |
3.04.01 | Electricity purchased for resale | (1,152,071) | (3,598,115) | (1,061,235) | (2,906,808) |
3.04.02 | Electricity network usage charges | (198,300) | (597,962) | (173,155) | (528,146) |
3.04.03 | Personnel | (75,335) | (227,185) | (65,599) | (190,624) |
3.04.04 | Employee pension plans | 21,038 | 63,116 | 12,340 | 37,020 |
3.04.05 | Material | (12,461) | (36,399) | (12,753) | (31,890) |
3.04.06 | Outsourced services | (24,943) | (101,590) | (37,637) | (94,258) |
3.04.07 | Depreciation and amortization | (87,461) | (256,247) | (84,605) | (254,822) |
3.04.08 | Other | (12,463) | (38,850) | (11,307) | (23,633) |
3.04.09 | Services Rendered to Third Parties | (1,681) | (5,943) | (1,074) | (4,743) |
3.05 | Gross operating income | 845,401 | 2,384,760 | 968,808 | 2,783,324 |
3.06 | Operating expenses/income | (304,053) | (893,564) | (289,298) | (854,039) |
62
1 Code | 2 Description | 3 - 07/01/2008 to 09/30/2008 | 4 - 01/01/2008 to 09/30/2008 | 5 - 07/01/2007 to 09/30//2007 | 6 - 01/01/2007 to 06/30/2007 |
3.06.01 | Sales and marketing | (66,605) | (181,352) | (63,983) | (169,955) |
3.06.02 | General and administrative | (83,681) | (267,130) | (85,544) | (245,492) |
3.06.03 | Financial | (138,262) | (397,047) | (123,852) | (387,043) |
3.06.03.01 | Financial income | 130,476 | 324,972 | 99,041 | 277,696 |
3.06.03.02 | Financial expenses | (268,738) | (722,019) | (222,893) | (664,739) |
3.06.03.02.01 | Goodwill amortization | (38,476) | (115,429) | (37,212) | (106,159) |
3.06.03.02.02 | Other financial expenses | (230,262) | (606,590) | (185,681) | (558,580) |
3.06.04 | Other operating income | 0 | 0 | 0 | 0 |
3.06.05 | Other operating expense | (15,505) | (48,035) | (15,919) | (51,549) |
3.06.05.01 | Merged goodwill | (9,530) | (28,591) | (8,930) | (25,260) |
3.06.05.02 | Other operating expenses | (5,975) | (19,444) | (6,989) | (26,289) |
3.06.06 | Equity in subsidiaries | 0 | 0 | 0 | 0 |
3.07 | Income (loss) from operations | 541,348 | 1,491,196 | 679,510 | 1,929,285 |
3.08 | Nonoperating income (expense) | (13,627) | (19,775) | (9,635) | (14,799) |
3.08.01 | Income | 3,561 | 11,905 | (898) | 5,107 |
3.08.02 | Expenses | (17,188) | (31,680) | (8,737) | (19,906) |
3.09 | Income before taxes on income and minority interest | 527,721 | 1,471,421 | 669,875 | 1,914,486 |
3.10 | Income tax and social contribution | (164,716) | (530,958) | (218,374) | (599,118) |
3.10.01 | Social contribution | (43,830) | (141,784) | (58,903) | (158,890) |
3.10.02 | Income tax | (120,886) | (389,174) | (159,471) | (440,228) |
3.11 | Deferred income tax and social contribution | (22,033) | 6,959 | (20,529) | (41,810) |
3.11.01 | Deferred Social contribution | (6,343) | 3,973 | (1,874) | (18,850) |
3.11.02 | Deferred Income tax | (15,690) | 2,986 | (18,655) | (22,960) |
3.12 | Statutory profit sharing/contributions | 0 | 0 | 0 | 0 |
3.12.01 | Profit sharing | 0 | 0 | 0 | 0 |
3.12.02 | Contributions | 0 | 0 | 0 | 0 |
3.13 | Reversal of interest on shareholders equity | 0 | 0 | 0 | 0 |
63
1 Code | 2 Description | 3 - 07/01/2008 to 09/30/2008 | 4 - 01/01/2008 to 09/30/2008 | 5 - 07/01/2007 to 09/30//2007 | 6 - 01/01/2007 to 09/30/2007 |
3.14 | Non-controlling shareholder's interest | (2,381) | (7,254) | (2,533) | (2,744) |
3.15 | Net income (loss) for the period | 338,591 | 940,168 | 428,439 | 1,270,814 |
SHARES OUTSTANDING EX-TREASURY STOCK (in units) | 479,910,938 | 479,910,938 | 479,756,730 | 479,756,730 | |
EARNINGS PER SHARE (R$) | 0.70553 | 1.95905 | 0.89303 | 2.64887 | |
LOSSES PER SHARE (R$) |
64
08.01 COMMENTS ON CONSOLIDATED PERFORMANCE OF THE QUARTER
Analysis of Results CPFL Energia Consolidated
The comments on performance are expressed in thousands of Brazilian reais, unless otherwise indicated.
Information (Consolidated) | Consolidated | |||||||||||
3rd Quarter | 3rd Quarter | Nine months | Nine months | |||||||||
2008 | 2007 | Variation | 2008 | 2007 | Variation | |||||||
GROSS REVENUE | 3,521,309 | 3,626,665 | -2.9% | 10,642,446 | 10,377,980 | 2.5% | ||||||
Electricity sales to final consumers | 3,020,484 | 3,171,892 | -4.8% | 9,212,895 | 9,180,698 | 0.4% | ||||||
Electricity sales to wholesaler | 241,179 | 200,539 | 20.3% | 663,275 | 485,641 | 36.6% | ||||||
Other operating revenues | 259,646 | 254,234 | 2.1% | 766,276 | 711,641 | 7.7% | ||||||
DEDUCTION FROM OPERATING REVENUE | (1,132,231) | (1,222,832) | -7.4% | (3,458,511) | (3,596,752) | -3.8% | ||||||
NET OPERATING REVENUE | 2,389,078 | 2,403,833 | -0.6% | 7,183,935 | 6,781,228 | 5.9% | ||||||
ENERGY COST | (1,350,371) | (1,234,390) | 9.4% | (4,196,077) | (3,434,954) | 22.2% | ||||||
Electricity purchased for resale | (1,152,071) | (1,061,235) | 8.6% | (3,598,115) | (2,906,808) | 23.8% | ||||||
Electricity network usage charges | (198,300) | (173,155) | 14.5% | (597,962) | (528,146) | 13.2% | ||||||
OPERATING COST/EXPENSE | (359,097) | (366,081) | -1.9% | (1,099,615) | (1,029,946) | 6.8% | ||||||
Personnel | (122,597) | (109,889) | 11.6% | (376,694) | (313,841) | 20.0% | ||||||
Employee pension plan | 21,038 | 12,582 | 67.2% | 63,116 | 37,746 | 67.2% | ||||||
Material | (15,313) | (14,823) | 3.3% | (44,988) | (38,179) | 17.8% | ||||||
Outsourced Services | (86,200) | (92,457) | -6.8% | (258,472) | (244,815) | 5.6% | ||||||
Depreciation and Amortization | (92,810) | (92,676) | 0.1% | (281,718) | (276,908) | 1.7% | ||||||
Merged Goodwill Amortization | (9,506) | (8,930) | 6.5% | (28,595) | (25,260) | 13.2% | ||||||
Other | (53,709) | (59,888) | -10.3% | (172,264) | (168,689) | 2.1% | ||||||
INCOME FROM ELECTRIC UTILITY SERVICES | 679,610 | 803,362 | -15.4% | 1,888,243 | 2,316,328 | -18.5% | ||||||
FINANCIAL INCOME (EXPENSE) | (138,262) | (123,852) | 11.6% | (397,047) | (387,043) | 2.6% | ||||||
Income | 130,476 | 99,041 | 31.7% | 324,972 | 277,696 | 17.0% | ||||||
Expenses | (268,738) | (222,893) | 20.6% | (722,019) | (664,739) | 8.6% | ||||||
OPERATING INCOME | 541,348 | 679,510 | -20.3% | 1,491,196 | 1,929,285 | -22.7% | ||||||
NON-OPERATING INCOME (EXPENSE) | (13,627) | (9,635) | 41.4% | (19,775) | (14,799) | 33.6% | ||||||
Income | 3,561 | (898) | -496.5% | 11,905 | 5,107 | 133.1% | ||||||
Expenses | (17,188) | (8,737) | 96.7% | (31,680) | (19,906) | 59.1% | ||||||
INCOME BEFORE TAX | 527,721 | 669,875 | -21.2% | 1,471,421 | 1,914,486 | -23.1% | ||||||
Social Contribution | (50,173) | (60,777) | -17.4% | (137,811) | (177,740) | -22.5% | ||||||
Income Tax | (136,576) | (178,126) | -23.3% | (386,188) | (463,188) | -16.6% | ||||||
INCOME BEFORE | ||||||||||||
MINORITY INTEREST AND REVERSALS | 340,972 | 430,972 | -20.9% | 947,422 | 1,273,558 | -25.6% | ||||||
Minority interest | (2,381) | (2,533) | -6.0% | (7,254) | (2,744) | 164.4% | ||||||
NET INCOME FOR THE PERIOD | 338,591 | 428,439 | -21.0% | 940,168 | 1,270,814 | -26.0% | ||||||
EBITDA | 744,880 | 880,218 | -15.4% | 2,108,411 | 2,563,207 | -17.7% | ||||||
Net Income for the Period and EBITDA Reconciliation (*) | ||||||||
NET INCOME FOR THE PERIOD | 338,591 | 428,439 | 940,168 | 1,270,814 | ||||
Employee Pension Plan | (21,038) | (12,582) | (63,116) | (37,746) | ||||
Depreciation and Amortization | 102,316 | 101,606 | 310,313 | 302,168 | ||||
Financial Income (Expense) | 138,262 | 123,852 | 397,047 | 387,043 | ||||
Social Contribution | 50,173 | 60,777 | 137,811 | 177,740 | ||||
Income Tax | 136,576 | 178,126 | 386,188 | 463,188 | ||||
EBITDA | 744,880 | 880,218 | 2,108,411 | 2,563,207 | ||||
(*)information not reviewed by the Independent Auditors |
65
Gross Operating Revenue
The Gross Operating Revenue in the third quarter of 2008 was R$ 3,521,309, down in 2.9% (R$ 105,356) on the revenue obtained in the same period of the previous year.
The main factors that contributed to this change were:
a) A decrease of 5.8% (R$ 187,739) in energy supply billed, justified by the reduction of 7.6% in the average tariffs, partially offset by the increase of 1.9% in the quantity of energy billed.
b) The amortization of the subsidiary CPFL Paulista's RTE (R$ 70,465 in the third quarter of 2007), which since January 2008, as it relates to Parcel A, is recorded in Deductions from Operating Income, Cost of Electric Energy and Operating Cost/Expense.
c) An increase of 44.1% (R$ 43,314) in the supply of energy to other concessionaires and licensees, due mainly to the increase of 24.0% in the amount sold and to the price adjustments, basically as a result of the good performance of the commercialization sector.
Quantity of Energy Sold
An increase of 19% was recorded in the quantity of energy billed to final consumers in the third quarter of 2008. The residential and commercial classes, which account for 44.3% of the energy sold to end users in the quarter and have the highest average tariffs, registered growth of 9.2% and 9.9% respectively, compared with the same quarter of the previous year, due to the high temperatures recorded in the period, salary increases and availability of credit.
The amount sold to the industrial class, which accounts for 40.0% of the energy billed, decreased by 4.3%, due mainly to the migration of consumers to the free market and the decrease in sales to the free customers of CPFL Brasil.
It should be noted that the increase in the energy billed in the period was also affected by differences in the schedule for reading meters, especially for the residential class. Eliminating this effect, the growth would be 1.1%, namely 6.0% for the residential class, which includes the effects of reclassification from the rural to the residential class, 8.7% to commercial classes, and a drop of 4.7% for the industrial class. The schedule effect is offset in the accounts in Supply not Billed, which decreased by R$ 53,012 in the period.
The total energy sales, taking into account the supply to end users and to concessionaires and licensees (bilateral agreements), increased by 4.1% in relation to the same quarter of the previous year (3.3% on the same schedule basis).
The expansion in CPFL Energias concession areas, which impacts both the supply billed and the collection of TUSD, was 6.8% compared to the same period of the previous year. On the same schedule basis, the increase was 5.8% .
Tariffs
In the third quarter of 2008, the energy supply tariffs applied decreased by an average of 7.6%, mainly due to the impacts of the tariff adjustments of the subsidiaries:
-17,21% for CPFL Paulista and 2.52% for RGE as from April 2008;
-8,14% for CPFL Santa Cruz, -3,56% for CPFL Jaguari, -8,15% for CPFL Mococa, -1.45% for CPFL Leste Paulista and -7.11% for CPFL Sul Paulista, as from February 2008;
-15,29% for CPFL Piratininga as from October 2007.
66
On the other hand, it should be noted that there was an improvement in the sales mix, mainly due to the increases of 9.2% and 9.9%, in residential and commercial consumption, respectively (which have higher tariffs) and a decrease of 4.3% in the industrial class consumption.
Deductions from Operating Revenue
Deductions from Operating Income in the third quarter of 2008 amounted to R$ 1,132,231, a reduction of 7.4% (R$ 90,601) in relation to the same quarter of 2007, as a result of:
a) A decrease of R$ 12,402 in the CCC sector charge.
b) Reduction of PIS and COFINS, due to recording of R$ 32,894, mainly to the R$ 32,894 recorded in the third quarter of the previous year in relation to amortization of the Regulatory Asset corresponding to the increase in the PIS and COFINS rate.
c) Decrease of R$ 35,007 in ICMS as a result of the reduction in the supply billed.
Cost of Electric energy
Cost of Electric Energy in the quarter totaled R$ 1,350,371, an increase of 9.4% (R$ 115,981) in relation to the same period of the previous year, due mainly to the impacts of the tariff adjustments and the increase in the amount of energy purchased (2.8%) .
Operating Costs and Expense
Operating costs and expenses in the quarter amounted to R$ 359,097, a reduction of 1.9% (R$ 6,984) compared to the same period of the previous year, mainly due to:
Manageable Operating Expenses
Comprising costs for Personnel, Material, Third-party Services and Others, these expenses totaled R$ 277,819 in the quarter, a decrease of 0.3% (R$ 762), mainly as a result of:
A reduction of 6.8% (R$ 6,257) in Outsourced Services, arising mainly from services related to the environment performed in 2007 for the generation projects;
reduction of 10.3% (R$ 6,179) in Other Expenses, due mainly to reversal of the Provision for Doubtful Accounts;
offset by the increase of 11.6% (R$ 12,708) in Personnel, due mainly to the 2008 Collective Agreement and the increase in the number of staff.
Private Pension Plan
The Private Pension Plan produced income of R$ 21,038 in the quarter (R$ 8,456 more than in the same period of 2007). This was mainly to the expected return on the plan assets, as defined in the Actuarial Report prepared in December 2007.
Financial Income (Expense)
The net Financial Income (Expense) in the quarter was an expense of R$ 138,262, compared with R$ 123,852 in the same period of 2007, an increase of 11.6% (R$ 14,410), due mainly to:
67
a) An increase of R$ 10,217 in income from short-term financial investments;
b) An increase of R$ 23,841 in debt charges, mainly caused by the higher indebtedness of the subsidiaries CPFL Piratininga and RGE;
c) An increase of R$ 17,203 in the
expense of monetary and exchange adjustments in relation to the subsidiary ENERCAN's loan from BID and the BNDES, in US$ and basket of currencies, respectively, due to appreciation of around 20% in the indexes in the quarter, as against devaluation
of some 4% in the same period of 2007;
d) A decrease of R$ 15,247 in banking expense, due mainly to extinction of the CPMF charge;
e) The increase of R$ 30,478 in restatement of escrow deposits and monetary and exchange variations, mainly in
relation to the subsidiary CPFL Paulista, with no effect on the result, since the subsidiary recorded similar amounts in financial expense as it has liabilities of the same amounts, with the same indexes.
Non-operating Income/Expense
Non-operating expense of R$ 13,627 was recorded in the quarter, compared with R$ 9,635 in the same period of 2007, an increase of 41.4% (R$ 3,992), due mainly to recognition of higher expenditures on projects for prospecting for new business.
Social Contribution and Income Tax
Taxes on income in the third quarter of 2008 totaled R$ 186,749, a decrease of 21.8% (R$ 52,154) in relation to the same quarter of 2007, mainly as a result of the reduction in pre-tax income.
Net income and EBITDA
As a result of the above factors, the net income for the quarter was R$ 338,591, or 21.0% (R$ 89,848) less than in the same period of 2007.
The adjusted EBITDA (net income for the quarter, eliminating the effects of the private pension plan, depreciation, amortization, financial income (expense), equity accounting, social contribution, income tax and extraordinary item) for the third quarter of 2008 was R$ 744,880, 15.4% (R$ 135,338) lower than the EBITDA for the same period of 2007.
68
09.01 INVESTMENTS IN SUBSIDIARIES AND/OR ASSOCIATED COMPANIES
1 - ITEM | 2 - NAME OF SUBSIDIARY/ASSOCIATED COMPANY | 3 - CNPJ (Federal Tax ID) | 4 - CLASSIFICATION | 5 - EQUITY IN CAPITAL OF INVESTEE - % | 6 - SHAREHOLDERS' EQUITY - % |
7 - TYPE OF COMPANY | 8 - NUMBER OF SHARES HELD IN CURRENT QUARTER (in units) |
9 - NUMBER OF SHARES HELD IN PREVIOUS QUARTER (in units) |
|||
01 | COMPANHIA PAULISTA DE FORÇA E LUZ - CPFL | 33.050.196/0001-88 | PUBLIC SUBSIDIARY | 100.00 | 32.02 |
COMMERCIAL, INDUSTRIAL AND OTHER | 36,324,228 | 999,996 | |||
02 | CPFL GERAÇÃO DE ENERGIA S/A | 03.953.509/0001-47 | PUBLIC SUBSIDIARY | 100.00 | 26.00 |
COMMERCIAL, INDUSTRIAL AND OTHER | 205,487,715,790 | 205,487,715,790 | |||
03 | CPFL COMERCIALIZAÇÃO BRASIL S/A | 04.973.790/0001-42 | CLOSED SUBSIDIARY | 100.00 | 1.30 |
COMMERCIAL, INDUSTRIAL AND OTHER | 2,998,565 | 2,998,565 | |||
04 | COMPANHIA PIRATININGA DE FORÇA E LUZ | 04.172.213/0001-51 | PUBLIC SUBSIDIARY | 100.00 | 7.91 |
COMMERCIAL, INDUSTRIAL AND OTHER | 53,031,258,896 | 53.031.258.896 | |||
05 | RIO GRANDE ENERGIA S/A | 02.016.439/0001-38 | PUBLIC SUBSIDIARY | 99.76 | 26.94 |
COMMERCIAL, INDUSTRIAL AND OTHER | 807,168,578 | 807,168,578 |
69
10.01 CHARACTERISTICS OF PUBLIC OR PRIVATE ISSUE OF DEBENTURES
1 - ITEM | 01 |
2 - ISSUE ORDER NUMBER | 3 |
3 - REGISTRATION NUMBER WITH CVM | CVM/SRE/DEB/2007/042 |
4 - DATE OF REGISTRATION WITH CVM | 10/25/2007 |
5 - ISSUED SERIES | UN |
6 - TYPE | SIMPLE |
7 - NATURE | PUBLIC |
8 - ISSUE DATE | 09/03/2007 |
9 - DUE DATE | 09/03/2014 |
10 - TYPE OF DEBENTURE | NO PREFERENCE |
11 - REMUNERATION CONDITIONS PREVAILING | CDI + 0.45% |
12 - PREMIUM/DISCOUNT | |
13 - NOMINAL VALUE (Reais) | 10,000.00 |
14 - ISSUED AMOUNT (Thousands of Reais) | 450,000 |
15 - NUMBER OF DEBENTURES ISSUED (UNIT) | 45,000 |
16 - OUTSTANDING DEBENTURES (UNIT) | 45,000 |
17 - TREASURY DEBENTURES (UNIT) | 0 |
18 - REDEEMED DEBENTURES (UNIT) | 0 |
19 - CONVERTED DEBENTURES (UNIT) | 0 |
20 - DEBENTURES TO BE PLACED (UNIT) | 0 |
21 - DATE OF THE LAST RENEGOTIATION | |
22 - DATE OF NEXT EVENT | 09/03/2012 |
70
15.01 INVESTMENTS
(Not reviewed by independent auditors)
Our principal capital expenditure in recent years has been on maintaining and upgrading our distribution network and generation projects. The following table sets forth our capital expenditure for the nine month-period ended September 30, 2008, as well as the three years ended December 31, 2007, 2006 and 2005.
In millions of R$ | ||||||||
Year Ended December 31, | ||||||||
Nine Months | 2007 | 2006 | 2005 | |||||
Distribution | ||||||||
CPFL Paulista | 194 | 291 | 245 | 189 | ||||
CPFL Piratininga | 143 | 144 | 131 | 86 | ||||
RGE | 86 | 221 | 151 | 93 | ||||
CPFL Santa Cruz | 10 | 11 | - | - | ||||
CPFL Jaguariúna | 10 | 9 | - | - | ||||
Total distribution | 443 | 676 | 527 | 368 | ||||
Generation | 348 | 445 | 266 | 255 | ||||
Commercialization | 11 | 9 | 4 | 4 | ||||
Other | 3 | 2 | - | - | ||||
Total | 805 | 1,132 | 797 | 627 | ||||
We plan to effect capital expenditure totaling approximately R$ 1,233 million in 2008 and approximately R$ 1,126 million in 2009. Of the total budgeted capital expenditure over this period, R$ 1,505 million is for distribution, R$ 815 million is for generation, R$ 0.4 million is for holding company and R$ 39 million is for commercialization.
71
16.01 OTHER IMPORTANT INFORMATION ON THE COMPANY
Additional information New Market
Shareholders of CPFL Energia S/A holding more than 5% of the shares with voting rights, as of September 30, 2008:
Common | Interest - % | |||
Shareholders | Shares | |||
VBC Energia S.A. | 136,329,808 | 28.41 | ||
521 Participações S.A. | 149,233,727 | 31.10 | ||
Bonaire Participações S.A. | 60,713,511 | 12.65 | ||
BNDES Participações S.A. | 27,465,653 | 5.72 | ||
Brumado Holdings S.A. | 28,420,052 | 5.92 | ||
Board of directors | 3,112 | - | ||
Executive officers | 13,590 | 0.01 | ||
Other shareholders | 77,731,485 | 16.19 | ||
Total | 479,910,938 | 100.00 | ||
Quantity and characteristic of securities held by the Controlling Shareholders, Executive Officers, Board of Directors, Fiscal Council and Free Float, as of September 30, 2008 and 2007:
September 30, 2008 | September 30, 2007 | |||||||
Common | Common | |||||||
Shareholders | Shares | % | Shares | % | ||||
Controlling shareholders | 347,114,888 | 72.33 | 349,784,397 | 72.91 | ||||
Administrator | ||||||||
Executive officers | 13,590 | 0.00 | 30,795 | 0.01 | ||||
Board of directors | 3,112 | 0.00 | 3,112 | 0.00 | ||||
Fiscal Council | 0 | 0.00 | 0 | 0.00 | ||||
Other shareholders Free float | 132,779,348 | 27.67 | 129,938,426 | 27.08 | ||||
Total | 479,910,938 | 100.00 | 479,756,730 | 100.00 | ||||
72
Shareholders of VBC Energia S/A holding more than 5% of common shares (with voting rights), up to the individuals level, as of September 30, 2008.
Shareholders | Common Shares | % | Preferred Shares | % | TOTAL | % |
(a) Votorantim Energia Ltda | 1,100,652 | 30.31 | 47,018 | 33.33 | 1,147,670 | 30.42 |
(b) Camargo Corrêa Energia S.A. | 1,100,652 | 30.31 | 47,018 | 33.33 | 1,147,670 | 30.42 |
(c) Atila Holdings S.A. | 550,326 | 15.15 | 23,510 | 16.67 | 573,836 | 15.21 |
(d) Camargo Corrêa S.A. | 550,326 | 15.15 | 23,512 | 16.67 | 573,838 | 15.21 |
Other Shareholders | 329,899 | 9.08 | 3 | 0.00 | 329,902 | 8.74 |
Total | 3,631,855 | 100.00% | 141,061 | 100.00 | 3,772,916 | 100.00 |
(a) Votorantim Energia Ltda
Shareholders | Quotas | % |
(e) Votorantim Investimentos Industriais S.A. | 228,617,352 | 70.28 |
(f) Companhia Brasileira de Alumínio | 70,827,862 | 21.77 |
(g) Santa Cruz Geração de Energia S.A. | 25,855,977 | 7.95 |
Total | 325,301,191 | 100.00 |
(b) Camargo Corrêa Energia S.A.
Shareholders | Common Shares | % | Preferred Shares | % | TOTAL | % |
(h) Camargo Corrêa Investimento em Infra-Estrutura S.A. | 518,860 | 100.00 | 518,853 | 100.00 | 1,037,713 | 100.00 |
Other Shareholders | 0 | 0.00 | 7 | 0.00 | 7 | 0.00 |
Total | 518,860 | 100.00 | 518,860 | 100.00 | 1,037,720 | 100.00 |
(c) Atila Holdings S/A
Shareholders | Common Shares | % |
(e) Votorantim Investimentos Industriais S.A. | 43,888,284 | 100.00 |
Total | 43,888,284 | 100.00 |
(d) Camargo Corrêa S.A.
Shareholders | Common Shares | % | Preferred Shares | % | TOTAL | % |
(i) Participações Morro Vermelho S.A. | 48,940 | 99.99 | 93,099 | 100.00 | 142,039 | 100.00 |
73
Other Shareholders | 6 | 0.01 | 1 | 0.00 | 7 | 0.00 |
Total | 48,946 | 100.00 | 93,100 | 100.00 | 142,046 | 100.00 |
(e) Votorantim Investimentos Industriais S.A.
Shareholders | Common Shares | % |
(j) Votorantim Participações S.A. | 11,165,582,998 | 100.00 |
Other Shareholders | 2 | 0.00 |
Total | 11,165,583,000 | 100.00 |
(f) Companhia Brasileira de Alumínio
Shareholders | Common Shares | % |
(e) Votorantim Investimentos Industriais S.A. | 765,534,496 | 99.76 |
Other Shareholders | 1,874,557 | 0.24 |
Total | 767,409,053 | 100.00 |
(g) Santa Cruz Geração de Energia S.A.
Shareholders | Common Shares | % |
(f) Companhia Brasileira de Alumínio | 42,105,504 | 100.00 |
Other Shareholders | 6 | 0.00 |
Total | 42,105,510 | 100.00 |
(h) Camargo Corrêa Investimentos em Infra-Estrutura S.A.
Shareholders | Common Shares | % |
(d) Camargo Corrêa S.A. | 526,206,813 | 100.00 |
Other Shareholders | 7 | 0.00 |
Total | 526,206,820 | 100.00 |
(i) Participações Morro Vermelho S.A.
Shareholders | Common Shares | % |
Rosana Camargo Arruda Botelho | 4,882,646 | 33.34 |
Renata Camargo Nascimento | 4,882,646 | 33.33 |
Regina Camargo Pires Oliveira Dias | 4,882,644 | 33.33 |
74
Other Shareholders | 191 | 0.00 |
Total | 14,648,127 | 100.00% |
(j) Votorantim Participações S.A.
Shareholders | Common Shares | % |
(k) Hejoassu Administração S.A. | 5,304,772,480 | 98.59 |
Other Shareholders | 76,106,493 | 1.41 |
Total | 5,380,878,973 | 100.00 |
(k) Hejoassu Administração S.A.
Shareholders | Common Shares | % |
(l) JEMF Participações S.A. | 400,000 | 25.00 |
(m) AEM Participações S.A. | 400,000 | 25.00 |
(n) ERMAN Participações S.A. | 400,000 | 25.00 |
(o) MRC Participações S.A. | 400,000 | 25.00 |
Total | 1,600,000 | 100.00 |
(l) JEMF Participações S.A.
Shareholders | Common Shares | % | Preferred Shares | % | TOTAL | % |
José Ermírio de Moraes Neto | 228,243,033 | 33.33 | 0 | 0.00 | 228,243,033 | 33.33 |
José Roberto Ermírio Moraes | 228,243,033 | 33.33 | 0 | 0.00 | 228,243,033 | 33.33 |
Neide Helena de Moraes | 228,243,034 | 33.34 | 0 | 0.00 | 228,243,034 | 33.34 |
(m) AEM Participações S.A. | 0 | 0.00 | 300 | 33.33 | 300 | 0.00 |
(n) ERMAN Participações S.A. | 0 | 0.00 | 300 | 33.34 | 300 | 0.00 |
(o) MRC Participações S.A. | 0 | 0.00 | 300 | 33.33 | 300 | 0.00 |
Total | 684,729,100 | 100.00 | 900 | 100.00 | 684,730,000 | 100.00 |
75
(m) AEM Participações S.A.
Shareholders | Common Shares | % | Preferred Shares | % | TOTAL | % |
Antonio Ermírio de Moraes holds the voting rights in relation to all his common shares | 684,729,100 | 100.00 | 0 | 0.00 | 684,729,100 | 100.00 |
(l) JEMF Participações S.A. | 0 | 0.00 | 300 | 33.33 | 300 | 0.00 |
(n) ERMAN Participações S.A. | 0 | 0.00 | 300 | 33.33 | 300 | 0.00 |
(o) MRC Participações S.A. | 0 | 0.00 | 300 | 33.34 | 300 | 0.00 |
Total | 684,729,100 | 100.00 | 900 | 100.00 | 684,730,000 | 100.00 |
(n) ERMAN Participações S.A.
Shareholders | Common Shares | % | Preferred Shares | % | TOTAL | % |
Ermírio Pereira de Moraes holds the voting rights in relation to all his common shares | 684,729,100 | 100.00 | 0 | 0.00 | 684,729,100 | 100.00 |
(l) JEMF Participações S.A. | 0 | 0.00 | 300 | 33.33 | 300 | 0.00 |
(m) AEM Participações S.A. | 0 | 0.00 | 300 | 33.33 | 300 | 0.00 |
(o) MRC Participações S.A. | 0 | 0.00 | 300 | 33.34 | 300 | 0.00 |
Total | 684,729,100 | 100.00 | 900 | 100.00 | 684,730,000 | 100.00 |
(o) MRC Participações S.A.
Shareholders | CommonShares | % | Preferred Shares | % | TOTAL | % |
Maria Helena Moraes Scripilliti holds the voting rights in relation to all her common shares | 684,729,100 | 100.00 | 0 | 0.00 | 684,729,100 | 100.00 |
(l)JEMF Participações S.A. | 0 | 0.00 | 300 | 33.33 | 300 | 0.00 |
(m) AEM Participações S.A. | 0 | 0.00 | 300 | 33.33 | 300 | 0.00 |
(n) ERMAN Participações S.A. | 0 | 0.00 | 300 | 33.34 | 300 | 0.00 |
Total | 684,729,100 | 100.00 | 900 | 100.00 | 684,730,000 | 100.00 |
76
Shareholders composition of 521 Participações S.A. holding more than 5% of common shares (voting right), up to the individuals level, as of September 30, 2008.
Shareholders | Common Shares | % |
Fundo de Investimento Financeiro BB Renda Fixa IV | 377,592 | 15.70 |
Fundo Mutuo de Investimento em Ações BB - Free Portfolio I | 2,027,402 | 84.30 |
Other Shareholders | 6 | 0.00 |
Total | 2,405,000 | 100.00 |
Shareholders of Bonaire Participações S.A. holding more than 5% of common shares (with voting rights), up to the individuals level, as of September 30, 2008.
Shareholders | Common Shares | % |
Energia São Paulo Fundo de Investimento em Participações | 66,728,872 | 100.00 |
Other Shareholders | 6 | 0.00 |
Total | 66,728,878 | 100.00 |
Shareholders of BRUMADO HOLDINGS S.A. holding more than 5% of common shares (with voting rights), up to the individuals level, as of September 30, 2008.
Shareholders | Common Shares | % |
(a) Antares Holding Ltda | 980,527,791 | 100.00 |
Other Shareholders | 1 | 0.00 |
Total | 980,527,792 | 100.00 |
(a) Antares Holding Ltda
Shareholders | Quotas | % |
(b) Bradespar S.A. | 274,546,567 | 100.00 |
Other Shareholders | 1 | 0.00 |
Total | 274,546,568 | 100.00 |
77
(b) Bradespar S.A.
Shareholders | Common Shares | % | Preferred Shares | % | TOTAL | % |
(c)Cidade de Deus Cia Cial de Participações | 44,883,224 | 36.59 | 300,960 | 0.13 | 45,184,184 | 12.92 |
Fundação Bradesco | 18,179,304 | 14.82 | 2,210,984 | 0.97 | 20,390,288 | 5.83 |
Hedging Griffo (Fundos) | 6,323,980 | 5.16 | 17,632,268 | 7.77 | 23,956,248 | 6.85 |
(d) NCF Participações S.A. | 23,767,944 | 19.38 | - | 0.00 | 23,767,944 | 6.80 |
Fundo de Pensões do Banco Espirito Santo | 6,620,432 | 5.40 | - | 0.00 | 6,620,432 | 1.89 |
Schroder (Fundos) | - | - | 15,132,316 | 6.67 | 15,132,316 | 4.33 |
BlackRock, Inc. | - | - | 12,541,200 | 5.52 | 12,541,200 | 3.59 |
Other Shareholders | 22,889,620 | 18.65 | 179,207,168 | 78.94 | 202,096,788 | 57.79 |
Total | 122,664,504 | 100.00 | 227,024,896 | 100.00 | 349,689,400 | 100.00 |
(c) Cidade de Deus Cia Cial de Participações
Shareholders | Common Shares | % |
(e) Nova Cidade de Deus Participações S.A. | 2,666,400,460 | 44.84 |
Fundação Bradesco | 1,971,462,964 | 33.15 |
Lia Maria Aguiar | 424,869,425 | 7.14 |
Lina Maria Aguiar | 505,373,186 | 8.50 |
Other Shareholders | 378,780,409 | 6.37 |
Total | 5,946,886,444 | 100.00 |
(d) NCF Participações S.A.
Shareholders | Common Shares | % | Preferred Shares | % | TOTAL | % |
Fundação Bradesco | 132,346,199 | 25.13 | 469,390,527 | 100.00 | 601,736,726 | 60.41 |
(c) Cidade de Deus Cia Cial de Participações | 393,537,013 | 74.72 | - | - | 393,537,013 | 39.51 |
(e) Nova Cidade de Deus Participações S.A. | 787,932 | 0.15 | - | - | 787,932 | 0.08 |
Total | 526,671,144 | 100.00 | 469,390,527 | 100.00 | 996,061,671 | 100.00 |
78
(e) Nova Cidade de Deus Participações S.A.
Shareholders | Common Shares | % | Preferred Shares | % | TOTAL | % |
Fundação Bradesco | 104,444,477 | 46.30 | 239,026,439 | 98.35 | 343,470,916 | 73.29 |
(f) Elo Participações e Investimentos S.A. | 121,129,551 | 53.70 | 0 | 0.00 | 121,129,551 | 25.85 |
Caixa Beneficiente Fund. do Bradesco | 0 | 0 | 4,014,708 | 1.65 | 4,014,708 | 0.86 |
Total | 225,574,028 | 100.00 | 243,041,147 | 100.00 | 468,615,175 | 100.00 |
(f) Elo Participações S.A.
Shareholders | Common Shares | % | Preferred Shares | % | TOTAL | % |
Lázaro de Mello Brandão | 10,194,242 | 6.33 | - | 0.00 | 10,194,242 | 4.43 |
Other Shareholders | 150,956,300 | 93.67 | 69,006,686 | 100.00 | 219,962,986 | 95.57 |
Total | 161,150,542 | 100.00 | 69,006,686 | 100.00 | 230,157,228 | 100.00 |
Shareholders of BNDES Participações S.A. holding more than 5% of common shares (with voting rights), up to the individuals level, as of September 30, 2008.
Shareholders | Common Shares | % |
Banco Nacional de Desenv.Econômico e Social ( 1 ) | 1 | 100.00 |
Total | 1 | 100.00 |
(1) State agency Brazilian Federal.
The quantity of shares are expressed in units
Commitment to arbitrage
The Company is committed to arbitration in the Market Arbitratoin Chamber, in accordance with the Arbitration Clause in Article 44 of the Companys By-Laws.
79
Social Report / Nine-month period ended September 2008 and 2007 (*) | ![]() |
Company: CPFL ENERGIA S.A. |
1 - Calculation Basis | 9 month-period ended September 2008 Value (R$ thousand) | 9 month-period ended September 2007 Value (R$ thousand) | ||||||||||
Net Revenues (NR) | 7,183,935 | 6,781,228 | ||||||||||
Operating Result (OR) | 1,491,196 | 1,929,285 | ||||||||||
Gross Payroll (GP) | 327,442 | 304,076 | ||||||||||
2 - Internal Social Indicators | Value (000) | % of GP | % of NR | Valor (000) | % of GP | % of NR | ||||||
Food | 26,168 | 7.99% | 0.36% | 22,072 | 7.26% | 0.33% | ||||||
Mandatory payroll taxes | 86,889 | 26.54% | 1.21% | 76,608 | 25.19% | 1.13% | ||||||
Private pension plan | 18,471 | 5.64% | 0.26% | 15,087 | 4.96% | 0.22% | ||||||
Health | 22,435 | 6.85% | 0.31% | 15,941 | 5.24% | 0.24% | ||||||
Occupational safety and health | 1,696 | 0.52% | 0.02% | 1,650 | 0.54% | 0.02% | ||||||
Education | 1,532 | 0.47% | 0.02% | 1,370 | 0.45% | 0.02% | ||||||
Culture | 0 | 0.00% | 0.00% | 0 | 0.00% | 0.00% | ||||||
Trainning and professional developmen | 5,746 | 1.75% | 0.08% | 4,694 | 1.54% | 0.07% | ||||||
Day-care / allowance | 681 | 0.21% | 0.01% | 567 | 0.19% | 0.01% | ||||||
Profit / income sharing | 28,169 | 8.60% | 0.39% | 24,049 | 7.91% | 0.35% | ||||||
Others | 3,417 | 1.04% | 0.05% | 4,244 | 1.40% | 0.06% | ||||||
Total - internal social indicators | 195,205 | 59.61% | 2.72% | 166,282 | 54.68% | 2.45% | ||||||
3 - External Social Indicators | Valor (000) | % of OR | % of NR | Valor (000) | % of OR | % of NR | ||||||
Education | 1,591 | 0.11% | 0.02% | 13 | 0.00% | 0.00% | ||||||
Culture | 6,220 | 0.42% | 0.09% | 7,446 | 0.39% | 0.11% | ||||||
Health and sanitation | 418 | 0.03% | 0.01% | 668 | 0.03% | 0.01% | ||||||
Sport | 16 | 0.00% | 0.00% | 10 | 0.00% | 0.00% | ||||||
Hunger and malnutrition | 0 | 0.00% | 0.00% | 0 | 0.00% | 0.00% | ||||||
Others | 1,850 | 0.12% | 0.03% | 1,037 | 0.05% | 0.02% | ||||||
Total contributions to society | 10,095 | 0.68% | 0.14% | 9,173 | 0.48% | 0.14% | ||||||
Taxes (excluding payroll taxes) | 3,138,797 | 210.49% | 43.69% | 3,440,554 | 178.33% | 50.74% | ||||||
Total - external social indicators | 3,148,892 | 211.17% | 43.83% | 3,449,727 | 178.81% | 50.87% | ||||||
4 - Environmental Indicators | Valor (000) | % of OR | % of NR | Valor (000) | % of OR | % of NR | ||||||
Investments relalated to company production / operatio | 31,456 | 2.11% | 0.44% | 30,223 | 1.57% | 0.45% | ||||||
Investments in external programs and/or project | 20,595 | 1.38% | 0.29% | 27,894 | 1.45% | 0.41% | ||||||
Total environmental investments | 52,052 | 3.49% | 0.72% | 58,117 | 3.01% | 0.86% | ||||||
Regarding the establishment of "annual targets" to minimize residues, the consumption in production / operation and increase efficiency in the use of natural resources, the company | ( ) do not have targets ( ) fulfill from 51 to 75% ( ) fulfill from 0 to 50% (X) fulfill from 76 to 100% |
() do not have targets ( ) fulfill from 51 to 75% ( ) fulfill from 0 to 50% (x) fulfill from 76 to 100% |
||||||||||
5 - Staff Indicators | 9 month-period 2008 | 9 month-period 2007 | ||||||||||
N° of employees at the end of period | 7,112 | 6,946 | ||||||||||
N° of employees hired during the period | 660 | 228 | ||||||||||
N° of outsourced employees | 6,072 | 6,989 | ||||||||||
N° of interns | 226 | 175 | ||||||||||
N° of employees above 45 years age | 1,637 | 1,614 | ||||||||||
N° of women working at the company | 1,199 | 1,128 | ||||||||||
% of management position occupied by women | 10.14% | 9.95% | ||||||||||
N° of Afro-Brazilian employees working at the compan | 652 | 524 | ||||||||||
% of management position occupied by Afro-Brazilian employee | 0.61% | 0.50% | ||||||||||
N° of employees with disabilities | 299 | 206 | ||||||||||
6 - Relevant information regarding the exercise of corporate citizenship | 3rd Quarter 2008 | 3rd Quarter 2007 | ||||||||||
Ratio of the highest to the lowest compensation at company | 77.87 | 80.67 | ||||||||||
Total number of work-related accidents | 16 | 22 | ||||||||||
Social and environmental projects developed by the company were decided upon by: | ( ) directors | (X) directors and managers | ( ) all employees | ( ) directors | (X) directors and managers | ( ) all employees | ||||||
Health and safety standards at the workplace were decided upon by: | ( ) directors and managers | ( ) all employees | (X) all + Cipa | ( ) directors and managers | ( ) all employees | (X) all + Cipa | ||||||
Regarding the liberty to join a union, the right to a collective negotiation and the internal representation of the employees, the company: | ( ) does not get involved | ( ) follows the OIT rules | (X) motivates and follows OIT | ( ) does not get involved | ( ) follows the OIT rules | (X) motivates and follow OIT | ||||||
The private pension plan contemplates: | ( ) directors | ( ) directors and managers | (X) all employees | ( ) directors | ( ) directors and managers | (X) all employees | ||||||
The profit / income sharing contemplates: | ( ) directors | ( ) directors and managers | (X) all employees | ( ) directors | ( ) directors and managers | (X) all employees | ||||||
In the selection of suppliers, the same ethical standards and social / environmenta responsibilities adopted by the company: | ( ) are not considered | ( ) are suggested | (X) are required | ( ) are not considered | ( ) are suggested | (X) are not considered | ||||||
Regarding the participation of employees in voluntary work programs, th company: | ( ) does not get involved | ( ) supports | (X) organizes and motivates | ( ) does not get involved | ( ) supports | (X) organize and motivates | ||||||
Total number of customer complaints and criticisms: | in the company 536,499 | in Procon 591 | in the Courts 983 | in the company 611,717 | in Procon 1,077 | in the Courts 1,299 | ||||||
% of complaints and criticisms attended to or resolved: | in the company 100% | in Procon 100% | in the Courts 40.39% | in the company 100% | in Procon 100% | in the Courts 52.33% | ||||||
Total value-added to distribute (R$ 000): | Nine-month-period 2008: 5,412,537 | Nine-month-period 2007: 5,891,206 | ||||||||||
Value-Added Distribution (VAD): | 66.72% government 4.61% employees 11.11% shareholders 11.30% third parties 6.26% retained |
67.20% government 3.80% employees 14.30% shareholders 7.40% third parties 7.30% retained |
||||||||||
7 - Other Information |
Consolidated informations
In the financial items were utilized the percentage of share paticipation. For the other information, as number of employees and legal lawsuits, the informations were available in full numbers.
Responsible: Antônio Carlos Bassalo, phone: 55-19-3756-8018, bassalo@cpfl.com.br
(*) Information not reviewt by the Independent Auditors
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17.01 REPORT ON SPECIAL REVIEW-UNQUALIFIED
(Convenience Translation into English from the Original Previously Issued in Portuguese)
Independent auditors review report
To
The Shareholders and Directors
CPFL Energia S.A.
São Paulo - SP
1 We have reviewed the accompanying quarterly financial information individual and consolidated of CPFL Energia S.A. as of and for the quarter ended September 30, 2008, comprising the balance sheet, and the statements of income, cash flows and added value, the performance reports and relevant information, prepared under the responsibility of the Companys Management.
2 The quarterly financial information of the jointly-owned indirect subsidiary BAESA - Energética Barra Grande S.A. as of September 30, 2008 was reviewed by other independent auditors, who issued a non qualified special review report on October 13, 2008. CPFL Energia S.A. values its indirect interest in BAESA - Energética Barra Grande S.A. by the equity method of accounting and consolidates this investment by the proportional consolidation method. As of September 30, 2008, the balance of this investment is R$ 140,577 thousand, and the equity in income of subsidiaries and associated companies of this investment in the net income for this three-month period is a profit of R$ 94 thousand. The quarterly financial information of this indirect investee included in the consolidated quarterly financial information presents proportional assets of R$ 373,239 thousand as of September 30, 2008. Our report, in relation to the amounts generated by this company during the aforementioned three-month period is based exclusively on the report of the review conducted by the independent auditors of BAESA - Energética Barra Grande S.A.
3 Our review was conducted in accordance with specific standards established by the Brazilian Institute of Independent Auditors (IBRACON) and the Federal Accounting Council (CFC), which consisted mainly of (a) inquiries of and discussions with persons responsible for the accounting, financial and operating areas of the Company and its subsidiaries about the main criteria adopted in preparing the quarterly financial information, and (b) review of the information and subsequent events that have or may have material effects on the financial position and operations of the Company and its subsidiaries.
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4 Based on our special review and the review report issued by other independent auditors, we are not aware of any material modifications that should be made to the quarterly financial information mentioned in paragraph 1 for it to be in conformity with the regulations issued by the Brazilian Securities Commission (CVM), specifically applicable to the preparation of mandatory quarterly financial information, including the CVM instruction 469/08.
5 As described in Note 29, Law 11638 was published on December 28, 2007, applicable as from January 1, 2008. This Law amended, revoked and introduced new provisions to Law 6404/76 (Corporation Law) and has introduced changes in accounting practices adopted in Brazil. Although the aforementioned Law has already come into force, some of its changes introduced depend on regulation by regulatory agencies, in order to be applied by the companies. Even so, as mentioned in Note 29, the Company, exclusively for compliance with the provisions contained in CVM Instruction 469 dated as of May 2, 2008, analyzed the impacts caused by Law 11638/2007 in its financial statements for the quarter ended September 30, 2008, comparatively with the same period of 2007, and no significant effects were identified. Therefore, the aforementioned accounting information was prepared in accordance with specific instructions of CVM exclusively for compliance with the provisions contained in CVM Instruction 469 dated May 2, 2008, and do not consider the amendments in the accounting practices introduced by Law 11638/2007 which have not been regulated yet.
6 As mentioned in Note 3, item (b.2) to the quarterly financial information, as result of the second periodical tariff review and annual tariff adjustment rate established on the concession agreement, the Brazilian Electricity Agency (ANEEL) ratified, on a temporary basis, the percentage to be applied to the tariffs of its directs subsidiaries, Companhia Piratininga de Força e Luz, Companhia Paulista de Força e Luz, Rio Grande Energia S.A. and Companhia Luz e Força Santa Cruz and its indirect subsidiaries of CPFL Jaguariuna group, Companhia Paulista de Energia Elétrica, Companhia Sul Paulista de Energia Elétrica, Companhia Jaguari de Energia and Companhia Luz e Força Mococa. The possible effects resulting from this final review, if any, will be recorded in the Companys equity and financial position in subsequent periods.
October 24, 2008
KPMG Auditores Independentes
CRC 2SP014428/O-6
Jarib Brisola Duarte Fogaça
Accountant CRC 1SP125991/O-0
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18.02 COMMENTS ON PERFORMANCE OF SUBSIDIARIES
Subsidiary: COMPANHIA PAULISTA DE FORÇA E LUZ - CPFL |
The subsidiary Companhia Paulista de Força e Luz - CPFL is a public company and its Comments on the performance in this quarter are attached to the Interim Financial Statements as of September 30, 2008, filed with the CVM (Brazilian Securities Commission).
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18.02 COMMENTS ON PERFORMANCE OF SUBSIDIARIES
Subsidiary: CPFL GERAÇÃO DE ENERGIA S.A. |
The subsidiary CPFL Geração de Energia S.A. is a public company and its Comments on the performance in this quarter (the Company and Consolidated) are attached to the Interim Financial Statements as of September 30, 2008, filed with the CVM (Brazilian Securities Commission).
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Subsidiary
CPFL COMERCIALIZAÇÃO BRASIL S/A
18.01 INCOME STATEMENT OF SUBSIDIARY (in thousands of Brazilian reais R$)
1 Code | 2 Description | 3 - 07/01/2008 to 09/30/2008 | 4 - 01/01/2008 to 09/30/2008 | 5 - 07/01/2007 to 09/30//2007 | 6 - 01/01/2007 to 09/30/2007 |
3.01 | Operating revenues | 542,184 | 1,445,228 | 485,457 | 1,394,518 |
3.02 | Deductions from operating revenues | (77,937) | (217,441) | (69,115) | (195,666) |
3.02.01 | ICMS | (29,032) | (87,417) | (25,393) | (68,868) |
3.02.02 | PIS | (8,663) | (22,995) | (7,753) | (22,521) |
3.02.03 | COFINS | (39,909) | (105,917) | (35,717) | (103,740) |
3.02.04 | ISS | (333) | (1,112) | (252) | (537) |
3.03 | Net operating revenues | 464,247 | 1,227,787 | 416,342 | 1,198,852 |
3.04 | Cost of sales and/or services | (371,581) | (1,014,651) | (326,002) | (909,185) |
3.04.01 | Electricity purchased for resale | (364,556) | (990,289) | (318,224) | (891,343) |
3.04.02 | Electricity network usage charges | - | (430) | - | - |
3.04.03 | Material | (248) | (1,635) | (704) | (1,553) |
3.04.04 | Outsourced services | (6,777) | (22,297) | (7,074) | (16,289) |
3.05 | Gross operating income | 92,666 | 213,136 | 90,340 | 289,667 |
3.06 | Operating expenses/income | 2,952 | (13,060) | (2,325) | (8,830) |
3.06.01 | Sales and Marketing | (4,436) | (14,946) | (4,863) | (13,443) |
3.06.02 | General and administrative | (76) | (3,835) | (54) | (166) |
3.06.03 | Financial | 7,464 | 5,721 | 2,592 | 4,779 |
3.06.03.01 | Financial income | 6,827 | 14,399 | 4,378 | 11,693 |
3.06.03.02 | Financial expenses | 637 | (8,678) | (1,786) | (6,914) |
3.06.03.02.01 | Goodwill amortization | (2) | (8) | (2) | (8) |
3.06.03.02.02 | Other financial expenses | 639 | (8,670) | (1,784) | (6,906) |
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CPFL COMERCIALIZAÇÃO BRASIL S/A
18.01 INCOME STATEMENT OF SUBSIDIARY (in thousands of Brazilian reais R$)
1 Code | 2 Description | 3 - 07/01/2008 to 09/30/2008 | 4 - 01/01/2008 to 09/30/2008 | 5 - 07/01/2007 to 09/30//2007 | 6 - 01/01/2007 to 09/30/2007 |
3.06.05 | Other operating expense | 0 | 0 | 0 | 0 |
3.06.06 | Equity in subsidiaries | 0 | 0 | 0 | 0 |
3.07 | Income from operations | 95,618 | 200,076 | 88,015 | 280,837 |
3.08 | Nonoperating income (expense) | 9 | 9 | (161) | (161) |
3.08.01 | Income | 9 | 9 | 55 | 55 |
3.08.02 | Expenses | 0 | 0 | (216) | (216) |
3.09 | Income before taxes on income and minority interest | 95,627 | 200,085 | 87,854 | 280,676 |
3.10 | Income tax and social contribution | (26,336) | (81,190) | (28,947) | (93,119) |
3.10.01 | Social contribution | (7,032) | (21,675) | (7,737) | (24,765) |
3.10.02 | Income tax | (19,304) | (59,515) | (21,210) | (68,354) |
3.11 | Deferred income tax and social contribution | (4,313) | 19,068 | 270 | 270 |
3.11.01 | Social contribution | (1,142) | 5,030 | 91 | 91 |
3.11.02 | Income tax | (3,171) | 14,038 | 179 | 179 |
3.12 | Statutory profit sharing/contributions | 0 | 0 | 0 | 0 |
3.12.01 | Profit sharing | 0 | 0 | 0 | 0 |
3.12.02 | Contributions | 0 | 0 | 0 | 0 |
3.13 | Reversal of interest on shareholders equity | 0 | 0 | 0 | 0 |
3.15 | Net income (loss) for the period | 64,978 | 137,963 | 59,177 | 187,827 |
SHARES OUTSTANDING EX-TREASURY STOCK (in units) | 2,998,565 | 2,998,565 | 2,998,565 | 2,998,565 | |
EARNINGS PER SHARE | 21.66970 | 46.00967 | 19.73511 | 62.63896 | |
LOSS PER SHARE |
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18.02 COMMENTS ON PERFORMANCE OF SUBSIDIARIES
Subsidiary: CPFL COMERCIALIZAÇÃO BRASIL S.A. |
Gross Revenue
Gross Revenue for the third quarter of 2008, which includes the operations of the subsidiaries CLION, Sul Geradora and Cone Sul, was R$ 542,184, an increase of R$ 56,727 (11.7%) in relation to the same quarter of 2007, explained mainly by the increase of 6.9% in the volume of energy sold.
Net Income and EBITDA
Net income of R$ 64,978 was recorded in the third quarter of 2008, an increase of R$ 5,801 (9.8%), compared with the same quarter of 2007. The increase was due mainly to: i) an increase of R$ 3,055 in EBITDA for the period; ii) the positive effect of R$ 4,872 recorded in Financial Income (Expense); and iii) the CSLL and IRPJ tax effects, amounting to R$ 2,695, of the events mentioned above.
EBITDA (net income before Financial Income (Expense), income tax and social contribution, depreciation and amortization) for the third quarter of 2008 was R$ 88,705, 3.6% higher than the R$ 85,650 recorded in the same quarter of 2007 (information not reviewed by the Independent Auditors).
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18.02 COMMENTS ON PERFORMANCE OF SUBSIDIARIES
Subsidiary: CPFL PIRATININGA DE FORÇA E LUZ |
The subsidiary CPFL Piratininga de Força e Luz is a public company and its Comments on the performance in this quarter are attached to the Interim Financial Statements as of September 30, 2008, filed with the CVM (Brazilian Securities Commission).
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18.02 COMMENTS ON PERFORMANCE OF SUBSIDIARIES
Subsidiary: RIO GRANDE ENERGIA S.A. |
The subsidiary Rio Grande Energia S.A. is a public company and its Comments on the performance in this quarter are attached to the Interim Financial Statements as of September 30, 2008, filed with the CVM (Brazilian Securities Commission).
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SUMMARY
Group | Table | Description | Page |
01 | 01 | IDENTIFICATION | 1 |
01 | 02 | HEAD OFFICE | 1 |
01 | 03 | INVESTOR RELATIONS OFFICER (Company Mailing Address) | 1 |
01 | 04 | ITR REFERENCE AND AUDITOR INFORMATION | 1 |
01 | 05 | CAPITAL STOCK | 2 |
01 | 06 | COMPANY PROFILE | 2 |
01 | 07 | COMPANIES NOT INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS | 2 |
01 | 08 | CASH DIVIDENDS | 2 |
01 | 09 | SUBSCRIBED CAPITAL AND CHANGES IN THE CURRENT YEAR | 3 |
01 | 10 | INVESTOR RELATIONS OFFICER | 3 |
02 | 01 | BALANCE SHEET ASSETS | 4 |
02 | 02 | BALANCE SHEET - LIABILITIES AND SHAREHOLDERS' EQUITY | 5 |
03 | 01 | INCOME STATEMENT | 7 |
04 | 01 | NOTES TO THE INTERIM FINANCE STATEMENTS | 10 |
05 | 01 | COMMENTS ON PERFORMANCE IN THE QUARTER | 59 |
06 | 01 | CONSOLIDATED BALANCE SHEET - ASSETS | 60 |
06 | 02 | CONSOLIDATED BALANCE SHEET - LIABILITIES & SHAREHOLDERS' EQUITY | 61 |
07 | 01 | CONSOLIDATED INCOME STATEMENT | 63 |
08 | 01 | COMMENTS ON CONSOLIDATED PERFORMANCE OF THE QUARTER | 66 |
09 | 01 | INVESTMENTS IN SUBSIDIARIES AND/OR ASSOCIATED COMPANIES | 70 |
10 | 01 | CHARACTERISTICS OF PUBLIC OR PRIVATE ISSUE OF DEBENTURES | 71 |
15 | 01 | INVESTMENTS | 72 |
16 | 01 | OTHER IMPORTANT INFORMATION ON THE COMPANY | 73 |
17 | 01 | REPORT ON SPECIAL REVIEW-UNQUALIFIED | 82 |
18 | 02 | COMMENTS ON PERFORMANCE OF SUBSIDIARIES | 84 |
COMPANHIA PAULISTA DE FORÇA E LUZ CPFL | |||
18 | 02 | COMMENTS ON PERFORMANCE OF SUBSIDIARIES | 85 |
CPFL GERAÇÃO DE ENERGIA S.A. | |||
18 | 01 | INCOME STATEMENT OF SUBSIDIARIES | 86 |
CPFL COMERCIALIZAÇÃO BRASIL LTDA | |||
18 | 02 | COMMENTS ON PERFORMANCE OF SUBSIDIARIES | 88 |
CPFL COMERCIALIZAÇÃO BRASIL LTDA | |||
18 | 02 | COMMENTS ON PERFORMANCE OF SUBSIDIARIES | 89 |
COMPANHIA PIRATININGA DE FORÇA E LUZ | |||
18 | 02 | COMMENTS ON PERFORMANCE OF SUBSIDIARIES | 90 |
RIO GRANDE ENERGIA S.A. |
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CPFL ENERGIA S.A.
| ||
|
By: | /S/
JOSÉ ANTONIO DE ALMEIDA FILIPPO
|
Name: Title: |
José Antonio de Almeida Filippo
Chief Financial Officer and Head of Investor Relations
|
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.