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____
Companhia Paranaense de Energia - Copel
CNPJ/MF 76.483.817/0001-20
Inscrição Estadual 10146326-50
Companhia de Capital Aberto - CVM 1431-1
www.copel.com copel@copel.com
Rua Coronel Dulcídio, 800, Batel - Curitiba - PR
CEP 80420-170
Quarterly Financial Information
ITR
June / 2011
SUMMARY
QUARTERLY FINANCIAL INFORMATION | 3 | |
Balance Sheets |
3 | |
Balance Sheets |
4 | |
Statements of Income |
5 | |
Statements of Income - Turnover for the Second Quarter |
6 | |
Statements of Income - Turnover for the second quarter |
7 | |
Statements of Comprehensive Income |
8 | |
Statements of Changes in Shareholders’ Equity |
9 | |
Statements of Cash Flows |
10 | |
Statements of Added Value |
12 | |
Statements of Added Value |
13 | |
NOTES TO THE QUARTERLY FINANCIAL INFORMATION | 14 | |
1 |
General information | 14 |
2 |
Main accounting policies | 14 |
3 |
Cash and Cash Equivalents | 16 |
4 |
Bonds and securities | 16 |
5 |
Trade accounts receivable | 18 |
6 |
Recoverable Rate Deficit (CRC) transferred to the Government of the State of Paraná | 19 |
7 |
Accounts receivable related to the concession | 21 |
8 |
Other Receivables | 23 |
9 |
Inventories | 23 |
10 |
Income Tax, Social Contribution and Other Taxes | 24 |
11 |
Prepaid Expenses | 29 |
12 |
Judicial Deposits | 29 |
13 |
Receivable from related parties | 30 |
14 |
Investments | 31 |
15 |
Property, Plant and Equipment | 39 |
16 |
Intangible Assets | 44 |
17 |
Payroll, social charges and labor accruals | 47 |
18 |
Suppliers | 48 |
19 |
Loans and Financing | 49 |
20 |
Debentures | 58 |
21 |
Post-employment benefits | 59 |
22 |
Regulatory charges | 61 |
23 |
Research and Development and Energy Efficiency | 61 |
24 |
Accounts payable related to concessions –use of public property | 62 |
25 |
Other accounts payable | 64 |
26 |
Reserve for Contingencies | 64 |
27 |
Shareholders' equity | 68 |
28 |
Operating revenues | 71 |
29 |
Operating Costs and Expenses | 72 |
30 |
Financial income (expenses) | 79 |
31 |
Operational segments | 79 |
32 |
Operating lease agreements | 82 |
33 |
Financial instruments | 82 |
34 |
Related party transactions | 92 |
35 |
Insurance | 95 |
COMMENTS ON PERFORMANCE FOR THE QUARTER | 96 | |
OTHER INFORMATION THAT THE COMPANY UNDERSTANDS TO BE RELEVANT | 106 | |
INDEPENDENT AUDITORS’ REVIEW REPORT | 109 |
QUARTERLY FINANCIAL INFORMATION
Balance Sheets
as of June 30, 2011 and December 31, 2010
In thousands of Reais - R$
Code | Description | Note | Parent Company | Consolidated | ||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |||
1 | Total assets | 13,098,170 | 12,654,419 | 18,601,980 | 17,859,432 | |
1.01 | Current assets | 1,264,836 | 1,102,815 | 4,257,507 | 4,157,790 | |
1.01.01 | Cash and Cash Equivalents | 3 | 13,475 | 89,822 | 1,676,318 | 1,794,416 |
1.01.02 | Financial Investments | 4 | 157 | 175 | 533,588 | 598,173 |
1.01.02.01 | Financial Investments Stated at Fair Value | 157 | 175 | 527,236 | 536,677 | |
1.01.02.01.02 | Bonds and Securities | 157 | 175 | 526,799 | 472,599 | |
1.01.02.01.03 | Collaterals and escrow accounts | - | - | 437 | 64,078 | |
1.01.02.02 | Financial Investments Stated at Amortized Cost | 4 | - | - | 6,352 | 61,496 |
1.01.02.02.01 | Bonds and Securities | - | - | 6,352 | 61,496 | |
1.01.03 | Accounts Receivable | 1,149,255 | 889,823 | 1,735,859 | 1,443,063 | |
1.01.03.01 | Trade Accounts Receivable | - | - | 1,414,535 | 1,162,627 | |
1.01.03.01.01 | Trade Accounts Receivable | 5 | - | - | 1,414,535 | 1,162,627 |
1.01.03.02 | Other Accounts Receivable | 1,149,255 | 889,823 | 321,324 | 280,436 | |
1.01.02.03.01 | Dividends Receivable | 13 | 1,149,250 | 889,823 | 7,859 | 5,851 |
1.01.02.03.02 | CRC transferred to the State Government of Paraná | 6 | - | - | 61,649 | 58,816 |
1.01.02.03.03 | Account Receivable related to concession | 7 | - | - | 66,563 | 54,700 |
1.01.02.03.04 | Other Receivables | 8 | 5 | - | 185,253 | 161,069 |
1.01.04 | Inventories | 9 | - | - | 133,438 | 121,424 |
1.01.06 | Taxes Recoverable | 101,949 | 122,995 | 167,100 | 195,749 | |
1.01.06.01 | Current Taxes Recoverable | 101,949 | 122,995 | 167,100 | 195,749 | |
1.01.06.01.01 | Income Tax and Social Contribution | 10.1 | 101,949 | 122,995 | 130,489 | 158,213 |
1.01.06.01.02 | Other current recoverable taxes | 10.3 | - | - | 36,611 | 37,536 |
1.01.07 | Prepaid expenses | 11 | - | - | 11,204 | 4,965 |
1.02 | Noncurrent assets | 11,833,334 | 11,551,604 | 14,344,473 | 13,701,642 | |
1.02.01 | Long Term Assets | 1,481,219 | 1,442,994 | 5,246,287 | 4,805,293 | |
1.02.01.01 | Financial Investments Stated at Fair Value | - | - | 25,679 | 26,280 | |
1.02.01.01.03 | Collaterals and escrow accounts | 4 | - | - | 25,679 | 26,280 |
1.02.01.02 | Financial Investments Stated at Amortized Cost | - | - | 1,933 | 7,151 | |
1.02.01.02.01 | Bonds and Securities | 4 | 1,933 | 7,151 | ||
1.02.01.03 | Accounts Receivable | - | - | 43,816 | 43,729 | |
1.02.01.03.01 | Trade Accounts Receivable | 5 | - | - | 43,816 | 43,729 |
1.02.01.06 | Deferred Taxes | 148,273 | 144,757 | 633,376 | 507,710 | |
1.02.01.06.01 | Deferred Income Tax and Social Contribution | 10.2 | 148,273 | 144,757 | 633,376 | 507,710 |
1.02.01.08 | Receivable from Related Parties | 1,110,106 | 1,068,002 | - | 1,575 | |
1.02.01.08.02 | Receivable from Subsidiaries | 13 | 1,110,106 | 1,068,002 | - | - |
1.02.01.08.04 | Receivable from Other Related Parties | 13 | - | - | - | 1,575 |
1.02.01.09 | Other Noncurrent Assets | 222,840 | 230,235 | 4,541,483 | 4,218,848 | |
1.02.01.09.03 | Account Receivable related to concession | 7 | - | - | 2,746,862 | 2,423,345 |
1.02.01.09.04 | CRC transferred to the State Government of Paraná | 6 | - | - | 1,288,387 | 1,282,377 |
1.02.01.09.05 | Judicial Deposits | 12 | 222,840 | 230,235 | 399,405 | 400,699 |
1.02.01.09.06 | Income Tax and Social Contribution | 10.1 | - | - | 13,061 | 12,341 |
1.02.01.09.07 | Other noncurrent recoverable taxes | 10.3 | - | - | 77,481 | 84,862 |
1.02.01.09.08 | Other Receivables | 8 | - | - | 16,287 | 15,224 |
1.02.02 | Investments | 14 | 10,352,115 | 10,108,610 | 501,714 | 483,450 |
1.02.02.01 | Investments Interests | 10,352,115 | 10,108,610 | 501,714 | 483,450 | |
1.02.02.01.01 | Investments in Associated Companies | 146,300 | 141,428 | 483,505 | 465,242 | |
1.02.02.01.02 | Investments in Subsidiaries | 9,854,648 | 9,629,368 | - | - | |
1.02.02.01.03 | Investments in Joint Venture | 338,695 | 325,342 | - | - | |
1.02.02.01.04 | Other Investment Interests | 12,472 | 12,472 | 18,209 | 18,208 | |
1.02.03 | Property, Plant and Equipment, net | 15 | - | - | 6,856,267 | 6,663,945 |
1.02.03.01 | Property, Plant and Equipment in Operation | - | - | 5,842,400 | 6,015,235 | |
1.02.03.02 | Property, Plant and Equipment in Progress | - | - | 1,013,867 | 648,710 | |
1.02.04 | Intangible Assets | 16 | - | - | 1,740,205 | 1,748,954 |
1.02.04.01 | Intangible Assets | - | - | 1,740,205 | 1,748,954 | |
1.02.04.01.01 | Concession Contract | - | - | 1,689,595 | 1,699,506 | |
1.02.04.01.02 | Authorization and Concession of Subsidiaries | - | - | 18,666 | 19,043 | |
1.02.04.01.03 | Others | - | - | 31,944 | 30,405 | |
See the accompanying notes to the quarterly information |
3
Balance Sheets
as of June 30, 2011 and December 31, 2010 (continued)
In thousands of Reais - R$
Code | Description | Note | Parent Company | Consolidated | ||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |||
2 | Total liabilities | 13,098,170 | 12,654,419 | 18,601,980 | 17,859,432 | |
2.01 | Current liabilities | 769,544 | 895,791 | 2,481,891 | 2,536,801 | |
2.01.01 | Payroll, social charges and accruals | 17 | 190 | 293 | 196,634 | 175,584 |
2.01.01.01 | Social charges and accruals | 190 | 293 | 51,024 | 48,853 | |
2.01.01.02 | Payroll and accruals | - | - | 145,610 | 126,731 | |
2.01.02 | Suppliers | 537 | 333 | 638,825 | 612,568 | |
2.01.02.01 | Domestic Suppliers | 18 | 537 | 333 | 638,825 | 612,568 |
2.01.03 | Tax Liabilities | 67,455 | 97,113 | 505,811 | 532,120 | |
2.01.03.01 | Federal Taxes | 67,455 | 97,113 | 316,941 | 356,723 | |
2.01.03.01.01 | Income Tax and Social Contribution Payable | 10.1 | - | 14,985 | 190,164 | 153,249 |
2.01.03.01.02 | Other Federal Taxes | 10.3 | 67,455 | 82,128 | 126,777 | 203,474 |
2.01.03.02 | State Taxes | 10.3 | - | - | 185,932 | 173,988 |
2.01.03.03 | Municipal Taxes | 10.3 | - | - | 2,938 | 1,409 |
2.01.04 | Loans and Financing | 641,573 | 639,017 | 704,594 | 704,252 | |
2.01.04.01 | Loans and Financing | 19 | 18,469 | 17,860 | 81,490 | 83,095 |
2.01.04.01.01 | In Domestic Currency | 13,550 | 12,582 | 76,566 | 68,579 | |
2.01.04.01.02 | In Foreign Currency | 4,919 | 5,278 | 4,924 | 14,516 | |
2.01.04.02 | Debentures | 20 | 623,104 | 621,157 | 623,104 | 621,157 |
2.01.05 | Other Liabilities | 59,789 | 159,035 | 436,027 | 512,277 | |
2.01.05.02 | Others | 59,789 | 159,035 | 436,027 | 512,277 | |
2.01.05.02.01 | Dividends and interests on own capital payable | 59,709 | 65,235 | |||
2.01.05.02.02 | Minimum Compulsary Dividend Payable | - | 158,916 | - | 163,634 | |
2.01.05.02.04 | Post Employment Benefits | 21 | 80 | 119 | 24,621 | 24,255 |
2.01.05.02.05 | Custumer charges due | 22 | - | - | 80,474 | 56,105 |
2.01.05.02.06 | Research and Development and Energy Efficiency | 23 | - | - | 145,919 | 155,991 |
2.01.05.02.07 | Payables related to Concession - Use of Public Property | 24 | - | - | 41,375 | 40,984 |
2.01.05.02.08 | Other Accounts Payable | 25 | - | - | 78,403 | 71,308 |
2.02 | Noncurrent liabilities | 691,591 | 728,505 | 4,235,722 | 4,026,805 | |
2.02.01 | Loans and Financing | 375,539 | 380,997 | 1,461,767 | 1,280,982 | |
2.02.01.01 | Loans and Financing | 19 | 375,539 | 380,997 | 1,461,767 | 1,280,982 |
2.02.01.01.01 | In Domestic Currency | 329,600 | 329,600 | 1,415,817 | 1,229,570 | |
2.02.01.01.02 | In Foreign Currency | 45,939 | 51,397 | 45,950 | 51,412 | |
2.02.02 | Other Liabilities | - | 23,751 | 1,009,485 | 992,227 | |
2.02.02.01 | Payable to Related Parties | - | 3,675 | - | - | |
2.02.02.01.02 | Payable to Subsidiaries | - | 3,675 | - | - | |
2.02.02.02 | Others | - | 20,076 | 1,009,485 | 992,227 | |
2.02.02.02.03 | Suppliers | 18 | - | - | 127,488 | 144,936 |
2.02.02.02.04 | Tax Liabilities | 10.3 | - | 20,076 | 388 | 32,252 |
2.02.02.02.05 | Post Employment Benefits | 21 | - | - | 403,691 | 384,208 |
2.02.02.02.06 | Research and Development and Energy Efficiency | 23 | - | - | 119,428 | 90,732 |
2.02.02.02.07 | Payables related to Concession - Use of Public Property | 24 | - | - | 358,474 | 340,099 |
2.02.02.02.08 | Other Accounts Payable | 25 | - | - | 16 | - |
2.02.03 | Deferred Taxes | 25,297 | 25,297 | 901,688 | 887,218 | |
2.02.01.06.02 | Deferred Income Tax and Social Contribution | 10.2 | 25,297 | 25,297 | 901,688 | 887,218 |
2.02.04 | Provisions | 26 | 290,755 | 298,460 | 862,782 | 866,378 |
2.02.04.01 | Tax, Social Security, Labor and Civil Provisions | 280,459 | 288,164 | 823,855 | 827,489 | |
2.02.04.01.01 | Provisions for Taxes | 270,641 | 280,281 | 301,038 | 321,479 | |
2.02.04.01.02 | Labor and Social Security Provisions | - | - | 140,049 | 146,348 | |
2.02.04.01.03 | Provisions for Employee Benefits | - | - | 54,479 | 53,245 | |
2.02.04.01.04 | Civil Provisions | 9,818 | 7,883 | 328,289 | 306,417 | |
2.02.04.02 | Other Provisions | 10,296 | 10,296 | 38,927 | 38,889 | |
2.02.04.02.01 | Provisions for Environmental and Deactivation Liabilities | - | - | 42 | 42 | |
2.02.04.02.02 | Provisions for Regulatory Liabilities | 10,296 | 10,296 | 38,885 | 38,847 | |
2.03 | Consolidated shareholders' equity | 27 | 11,637,035 | 11,030,123 | 11,884,367 | 11,295,826 |
2.03.01 | Share capital | 6,910,000 | 6,910,000 | 6,910,000 | 6,910,000 | |
2.03.04 | Profit Reserves | 2,534,828 | 2,560,607 | 2,534,828 | 2,560,607 | |
2.03.04.01 | Legal Reserves | 478,302 | 478,302 | 478,302 | 478,302 | |
2.03.04.02 | Retaindes earnings | 2,056,526 | 2,056,526 | 2,056,526 | 2,056,526 | |
2.03.04.08 | Additional Dividend Proposed | - | 25,779 | - | 25,779 | |
2.03.05 | Accumulated Profit | 676,917 | - | 676,917 | - | |
2.03.06 | Equity Evaluation Adjustments | 1,515,290 | 1,559,516 | 1,515,290 | 1,559,516 | |
2.03.06 | Attributable Non Controlling Interest | 27.2 | - | - | 247,332 | 265,703 |
See the accompanying notes to the quarterly information |
4
Statements of Income
For the semesters ended June 30, 2011 and 2010
In thousands of Reais - R$
Code | Description | Note | Parent Company | Consolidated | ||
6.30.2011 | 6.30.2010 | 6.30.2011 | 6.30.2010 | |||
3 | Statement of income | |||||
3.01 | Income from sale of goods and/or services | 28 | - | - | 3,668,538 | 3,264,867 |
3.01.01 | Eletrecity sales to final customers | - | - | 1,154,709 | 1,102,519 | |
3.01.02 | Eletrecity sales to distributors | - | - | 679,255 | 646,213 | |
3.01.03 | Use of main distribution and transmission grid | - | - | 1,322,129 | 1,035,549 | |
3.01.04 | Construction revenues | - | - | 276,455 | 272,920 | |
3.01.05 | Telecomunications | - | - | 57,015 | 46,018 | |
3.01.06 | Distribution of Piped Gas | - | - | 124,143 | 117,548 | |
3.01.07 | Other Operating Income | - | - | 54,832 | 44,100 | |
3.02 | Cost of goods and/or services sold | 29 | - | - | (2,508,927) | (2,327,875) |
3.02.01 | Electricity Purchased for Resale | - | - | (1,052,346) | (945,378) | |
3.02.02 | Charges for the Use of the Main Transmition Grid | - | - | (302,406) | (283,397) | |
3.02.03 | Personnel | - | - | (325,267) | (294,508) | |
3.02.04 | Private Pension and Health Plans | - | - | (50,067) | (40,676) | |
3.02.05 | Materials | - | - | (34,385) | (34,878) | |
3.02.06 | Raw Material and Supplies for Electrical Energy Production | - | - | (13,368) | (10,882) | |
3.02.07 | Natural Gas and Supplies for Gas Operations | - | - | (78,082) | (69,306) | |
3.02.08 | Third Party Services | - | - | (123,254) | (109,973) | |
3.02.09 | Depreciation and Amortization | - | - | (254,812) | (259,280) | |
3.02.10 | Construction Cost | (275,570) | (272,892) | |||
3.02.11 | Other Costs | - | - | 630 | (6,705) | |
3.03 | Gross profit | - | - | 1,159,611 | 936,992 | |
3.04 | Operational expenses / income | 642,267 | 542,515 | (342,771) | (269,525) | |
3.04.01 | Selling Expenses | 29 | - | - | (32,253) | (27,441) |
3.04.01.01 | Personnel | - | - | (3,572) | (2,470) | |
3.04.01.02 | Private Pension and Health Plans | - | - | (350) | (278) | |
3.04.01.03 | Materials | - | - | (430) | (811) | |
3.04.01.04 | Third Party Services | - | - | (14,547) | (15,346) | |
3.04.01.05 | Depreciation and Amortization | - | - | (20) | (4) | |
3.04.01.06 | Allowances (reversal) for doubtful debts | - | - | (15,277) | (10,942) | |
3.04.01.07 | Other selling expenses | - | - | 1,943 | 2,410 | |
3.04.02 | General and Administrative Expenses | 29 | (14,899) | (6,853) | (204,029) | (156,147) |
3.04.02.01 | Personnel | (4,236) | (3,638) | (93,030) | (76,790) | |
3.04.02.02 | Private Pension and Health Plans | (323) | (166) | (13,286) | (10,749) | |
3.04.02.03 | Materials | (26) | (7) | (4,692) | (4,100) | |
3.04.02.04 | Third Party Services | (2,368) | (2,491) | (41,178) | (29,779) | |
3.04.02.05 | Depreciation and Amortization | - | - | (14,311) | (13,650) | |
3.04.02.06 | Other General and Administrative Expenses | (7,946) | (551) | (37,532) | (21,079) | |
3.04.04 | Other Operational Income | 29 | 144 | 165 | 3,226 | 2,096 |
3.04.05 | Other Operational Income | 29 | 6,811 | (15,572) | (144,597) | (142,902) |
3.04.05.01 | Provisions for legal claims | 7,188 | (15,195) | (15,250) | (53,994) | |
3.04.05.02 | Provisions for losses on taxes recoverable | - | - | (15,773) | - | |
3.04.05.03 | Amortization of Goodwill | (377) | (377) | (742) | (1,915) | |
3.04.05.04 | Other operational expenses | - | - | (112,832) | (86,993) | |
3.04.06 | Equity in Income of Subsidiaries | 650,211 | 564,775 | 34,882 | 54,869 | |
3.05 | Profit before financial results and taxes | 642,267 | 542,515 | 816,840 | 667,467 | |
3.06 | Financial Results | 30 | (11,124) | 14,753 | 147,139 | 182,682 |
3.06.01 | Financial Income | 60,938 | 62,119 | 308,479 | 299,589 | |
3.06.02 | Financial Expenses | (72,062) | (47,366) | (161,340) | (116,907) | |
3.07 | Profit before tax and social contribution | 631,143 | 557,268 | 963,979 | 850,149 | |
3.08 | Income Tax and Social Contribution on Profit | 10.5 | 3,516 | 1,355 | (321,667) | (279,439) |
3.08.01 | Current | - | (1,983) | (439,161) | (297,447) | |
3.08.02 | Deferred | 3,516 | 3,338 | 117,494 | 18,008 | |
3.09 | Net income for de period | 634,659 | 558,623 | 642,312 | 570,710 | |
3.11 | Consolidated net income for the quarter | 634,659 | 558,623 | 642,312 | 570,710 | |
3.11.01 | Attributed to Controlling Shareholders | - | - | 634,659 | 558,623 | |
3.11.02 | Attributed to Non-Controlling Interest | 27.2 | - | - | 7,653 | 12,087 |
3.99 | Basic and diluted net earning per share attributed | |||||
To parent company shareholders - in reais |
27.1 | |||||
Class "A" Preferred shares | 2.4374 | 2.1451 | 2.4374 | 2.1451 | ||
Class "B" Preferred shares | 2.4366 | 2.1447 | 2.4366 | 2.1447 | ||
Ordinary shares | 2.2151 | 1.9497 | 2.2151 | 1.9497 | ||
See the accompanying notes to the quarterly information |
5
Statements of Income - Turnover for the Second Quarter
for the quarters and semesters ended June 30, 2011 and 2010
In thousands of Reais - R$
Code | Description | Parent Company | |||
4.1.2011 to 6.30.2011 | 1.1.2011 to 6.30.2011 | 4.1.2010 to 6.30.2010 | 1.1.2010 to 6.30.2010 | ||
3 | Statement of income | ||||
3.04 | Operational expenses / income | 264,618 | 642,267 | 236,561 | 542,515 |
3.04.02 | General and Administrative Expenses | (4,872) | (14,899) | (3,913) | (6,853) |
3.04.02.01 | Personnel | (2,584) | (4,236) | (2,070) | (3,638) |
3.04.02.02 | Private Pension and Health Plans | (190) | (323) | (104) | (166) |
3.04.02.03 | Materials | (15) | (26) | (4) | (7) |
3.04.02.04 | Third Party Services | (1,545) | (2,368) | (1,624) | (2,491) |
3.04.02.06 | Other General and Administrative Expenses | (538) | (7,946) | (111) | (551) |
3.04.04 | Other Operational Income | 144 | 144 | 165 | 165 |
3.04.05 | Other Operational Income | (1,907) | 6,811 | (7,588) | (15,572) |
3.04.05.01 | Provisions for legal claims | (1,719) | 7,188 | (7,400) | (15,195) |
3.04.05.03 | Amortization of Goodwill | (188) | (377) | (188) | (377) |
3.04.06 | Equity in Income of Subsidiaries | 271,253 | 650,211 | 247,897 | 564,775 |
3.05 | Profit before financial results and taxes | 264,618 | 642,267 | 236,561 | 542,515 |
3.06 | Financial Results | (13,225) | (11,124) | 6,660 | 14,753 |
3.06.01 | Financial Income | 30,837 | 60,938 | 31,584 | 62,119 |
3.06.02 | Financial Expenses | (44,062) | (72,062) | (24,924) | (47,366) |
3.07 | Profit before tax and social contribution | 251,393 | 631,143 | 243,221 | 557,268 |
3.08 | Income Tax and Social Contribution on Profit | 3,785 | 3,516 | 387 | 1,355 |
3.08.01 | Current | - | - | (986) | (1,983) |
3.08.02 | Deferred | 3,785 | 3,516 | 1,373 | 3,338 |
3.09 | Net income for de period | 255,178 | 634,659 | 243,608 | 558,623 |
3.11 | Consolidated net income for the quarter | 255,178 | 634,659 | 243,608 | 558,623 |
3.99 | Basic and diluted net earning per share attributed | ||||
To parent company shareholders - in reais |
|||||
Class "A" Preferred shares | 2.4374 | 2.1451 | 2.4374 | 2.1451 | |
Class "B" Preferred shares | 2.4366 | 2.1447 | 2.4366 | 2.1447 | |
Ordinary shares | 2.2151 | 1.9497 | 2.2151 | 1.9497 | |
See the accompanying notes to the quarterly information |
6
Statements of Income - Turnover for the second quarter
for the quarters and semesters ended June 30, 2011 and 2010
In thousands of Reais - R$
Code | Description | Consolidated | |||
4.1.2011 to 6.30.2011 | 1.1.2011 to 6.30.2011 | 4.1.2010 to 6.30.2010 | 1.1.2010 to 6.30.2010 | ||
3 | Statement of income | ||||
3.01 | Income from sale of goods and/or services | 1,842,308 | 3,668,538 | 1,623,641 | 3,264,867 |
3.01.01 | Eletrecity sales to final customers | 583,534 | 1,154,709 | 548,856 | 1,102,519 |
3.01.02 | Eletrecity sales to distributors | 318,001 | 679,255 | 307,780 | 646,213 |
3.01.03 | Use of main distribution and transmission grid | 662,336 | 1,322,129 | 530,591 | 1,035,549 |
3.01.04 | Construction revenues | 155,889 | 276,455 | 129,603 | 272,920 |
3.01.05 | Telecomunications | 28,776 | 57,015 | 23,272 | 46,018 |
3.01.06 | Distribution of Piped Gas | 67,189 | 124,143 | 61,500 | 117,548 |
3.01.07 | Other Operating Income | 26,583 | 54,832 | 22,039 | 44,100 |
3.02 | Cost of goods and/or services sold | (1,279,450) | (2,508,927) | (1,174,225) | (2,327,875) |
3.02.01 | Electricity Purchased for Resale | (507,525) | (1,052,346) | (479,299) | (945,378) |
3.02.02 | Charges for the Use of the Main Transmition Grid | (148,222) | (302,406) | (141,286) | (283,397) |
3.02.03 | Personnel | (181,369) | (325,267) | (154,046) | (294,508) |
3.02.04 | Private Pension and Health Plans | (25,678) | (50,067) | (20,096) | (40,676) |
3.02.05 | Materials | (15,928) | (34,385) | (19,741) | (34,878) |
3.02.06 | Raw Material and Supplies for Electrical Energy Production | (6,735) | (13,368) | (5,323) | (10,882) |
3.02.07 | Natural Gas and Supplies for Gas Operations | (43,583) | (78,082) | (35,155) | (69,306) |
3.02.08 | Third Party Services | (64,585) | (123,254) | (57,752) | (109,973) |
3.02.09 | Depreciation and Amortization | (127,991) | (254,812) | (126,467) | (259,280) |
3.02.10 | Construction Cost | (155,488) | (275,570) | (129,585) | (272,892) |
3.02.11 | Other Costs | (2,346) | 630 | (5,475) | (6,705) |
3.03 | Gross profit | 562,858 | 1,159,611 | 449,416 | 936,992 |
3.04 | Operational expenses / income | (213,795) | (342,771) | (165,617) | (269,525) |
3.04.01 | Selling Expenses | (18,966) | (32,253) | (13,668) | (27,441) |
3.04.01.01 | Personnel | (2,034) | (3,572) | (1,287) | (2,470) |
3.04.01.02 | Private Pension and Health Plans | (181) | (350) | (140) | (278) |
3.04.01.03 | Materials | (366) | (430) | (348) | (811) |
3.04.01.04 | Third Party Services | (6,817) | (14,547) | (7,812) | (15,346) |
3.04.01.05 | Depreciation and Amortization | (10) | (20) | (2) | (4) |
3.04.01.06 | Allowances (reversal) for doubtful debts | (10,184) | (15,277) | (5,228) | (10,942) |
3.04.01.07 | Other selling expenses | 626 | 1,943 | 1,149 | 2,410 |
3.04.02 | General and Administrative Expenses | (108,244) | (204,029) | (84,719) | (156,147) |
3.04.02.01 | Personnel | (53,197) | (93,030) | (42,852) | (76,790) |
3.04.02.02 | Private Pension and Health Plans | (6,392) | (13,286) | (5,401) | (10,749) |
3.04.02.03 | Materials | (2,349) | (4,692) | (2,310) | (4,100) |
3.04.02.04 | Third Party Services | (23,741) | (41,178) | (15,281) | (29,779) |
3.04.02.05 | Depreciation and Amortization | (7,515) | (14,311) | (7,664) | (13,650) |
3.04.02.06 | Other General and Administrative Expenses | (15,050) | (37,532) | (11,211) | (21,079) |
3.04.04 | Other Operational Income | 3,051 | 3,226 | 428 | 2,096 |
3.04.05 | Other Operational Income | (109,918) | (144,597) | (81,013) | (142,902) |
3.04.05.01 | Provisions for legal claims | (22,577) | (15,250) | (37,018) | (53,994) |
3.04.05.02 | Provisions for losses on taxes recoverable | (15,773) | (15,773) | - | - |
3.04.05.03 | Amortization of Goodwill | (371) | (742) | (958) | (1,915) |
3.04.05.04 | Other operational expenses | (71,197) | (112,832) | (43,037) | (86,993) |
3.04.06 | Equity in Income of Subsidiaries | 20,282 | 34,882 | 13,355 | 54,869 |
3.05 | Profit before financial results and taxes | 349,063 | 816,840 | 283,799 | 667,467 |
3.06 | Financial Results | 36,779 | 147,139 | 96,815 | 182,682 |
3.06.01 | Financial Income | 124,450 | 308,479 | 152,083 | 299,589 |
3.06.02 | Financial Expenses | (87,671) | (161,340) | (55,268) | (116,907) |
3.07 | Profit before tax and social contribution | 385,842 | 963,979 | 380,614 | 850,149 |
3.08 | Income Tax and Social Contribution on Profit | (128,359) | (321,667) | (129,263) | (279,439) |
3.08.01 | Current | (164,195) | (439,161) | (148,025) | (297,447) |
3.08.02 | Deferred | 35,836 | 117,494 | 18,762 | 18,008 |
3.09 | Net income for de period | 257,483 | 642,312 | 251,351 | 570,710 |
3.11 | Consolidated net income for the quarter | 257,483 | 642,312 | 251,351 | 570,710 |
3.11.01 | Attributed to Controlling Shareholders | 255,178 | 634,659 | 243,608 | 558,623 |
3.11.02 | Attributed to Non-Controlling Interest | 2,305 | 7,653 | 7,743 | 12,087 |
See the accompanying notes to the quarterly information |
7
Statements of Comprehensive Income
For the semester ended June 30, 2011 and 2010
In thousands of Reais - R$
Parent Company | Consolidated | |||
6.30.2011 | 6.30.2010 | 6.30.2011 | 6.30.2010 | |
Net income for the quarter | 634,659 | 558,623 | 642,312 | 570,710 |
Adjustments related to Financial Assets classified as |
||||
available for sale - distribution concession |
- | - | (2,982) | 6,632 |
(-) Taxes on adjustments to financial assets |
- | - | 1,014 | (2,255) |
Investment interest in subsidiaries' comprehensive income |
(2,982) | 6,632 | - | - |
(-) Taxes on investment interest in subsidiaries' comprehensive income |
1,014 | (2,255) | ||
Total comprehensive income for the quarter | 632,691 | 563,000 | 640,344 | 575,087 |
Attributed to Parent Company |
632,691 | 563,000 | ||
Attributed to non controlling interests |
- | - | 7,653 | 12,087 |
8
Statements of Changes in Shareholders’ Equity
For the quarters and semesters ended June 30, 2011 and 2010
In thousands of Reais - R$
Note | Attributable to owners of the company | Total | Attributable to non controlling interests |
Total Consolidated | ||||||
Capital | Equity evaluation adjustments |
Profit reserves | ||||||||
Legal reserve |
Profit retention reserve |
Additional dividends proposed |
Accumulated profit | |||||||
Balance as of December 31, 2010 | 6,910,000 | 1,559,516 | 478,302 | 2,056,526 | 25,779 | - | 11,030,123 | 265,703 | 11,295,826 | |
Net profit for the period |
27.1.3 | - | - | - | - | - | 634,659 | 634,659 | 7,653 | 642,312 |
Other comprehensive income |
||||||||||
Adjustments related to financial assets classified as |
||||||||||
available for sale, net of taxes |
7 | - | (1,968) | - | - | - | - | (1,968) | - | (1,968) |
Total comprehensive income for the period |
- | (1,968) | - | - | - | 634,659 | 632,691 | 7,653 | 640,344 | |
Approval of additional dividends proposed |
- | - | - | - | (25,779) | - | (25,779) | - | (25,779) | |
Realization of equity evaluation adjustments |
27.1.2 | - | (42,258) | - | - | - | 42,258 | - | - | - |
Reimbursement of advances for future capital increase |
27.2 | - | - | - | - | - | - | - | (19,689) | (19,689) |
Allocations proposed to GSM |
||||||||||
Dividends |
27.2 | - | - | - | - | - | - | - | (6,335) | (6,335) |
Balance as of June 30, 2011 | 6,910,000 | 1,515,290 | 478,302 | 2,056,526 | - | 676,917 | 11,637,035 | 247,332 | 11,884,367 | |
See the accompanying notes to the quarterly information | ||||||||||
Note | Attributable to owners of the company | Total | Attributable to non controlling interests |
Total Consolidated | ||||||
Capital | Capital reserve |
Equity evaluation adjustments |
Profit reserves | |||||||
Legal reserve |
Profit retention reserve |
Additional dividends proposed | ||||||||
Balance as of December 31, 2009 | 4,460,000 | 838,340 | 1,660,634 | 428,912 | 2,908,112 | - | 10,295,998 | 228,365 | 10,524,363 | |
Capital increase |
2,450,000 | (838,340) | - | - | (1,611,660) | - | - | - | - | |
Realization of equity evaluation adjustments |
27.1.2 | - | - | (51,775) | - | - | 51,775 | - | - | - |
Advances for future capital increase |
27.2 | - | - | - | - | - | - | - | 54,000 | 54,000 |
Net profit for the period |
27.1.3 | - | - | - | - | - | 558,623 | 558,623 | 12,087 | 570,710 |
Allocations proposed to GSM |
||||||||||
Dividends |
27.2 | - | - | - | - | - | - | - | (853) | (853) |
Balance as of June 30, 2010 | 6,910,000 | - | 1,608,859 | 428,912 | 1,296,452 | 610,398 | 10,854,621 | 293,599 | 11,148,220 | |
See the accompanying notes to the quarterly information |
9
Statements of Cash Flows
For the semesters ended June 30, 2011 and 2010
In thousands of Reais - R$
Note | Parent Company | Consolidated | |||
6.30.2011 | 6.30.2010 | 6.30.2011 | 6.30.2010 | ||
Cash flows from operational activities | |||||
Net income for the period |
634,659 | 558,623 | 642,312 | 570,710 | |
Adjustments for reconciliation of the net income for the period with cash generated from the operational activities |
|||||
Depreciation |
15.3 | - | - | 164,884 | 173,330 |
Amortization of intangible assets - concessions |
16 | - | - | 103,911 | 99,474 |
Amortization of intangible assets - others |
16 | - | - | 725 | 1,681 |
Unrealized monetary and exchange variations - net |
8,593 | 4,928 | 24,071 | (71,358) | |
Remuneration of Accounts Receivable related to concession |
7 | - | - | (148,847) | (152,784) |
Equity in income of subsidiaries |
14.6 | (650,211) | (564,775) | (34,882) | (54,869) |
Income tax and social contribution |
- | 1,983 | 439,161 | 297,447 | |
Deferred income tax and social contribution |
(3,516) | (3,338) | (117,494) | (18,008) | |
Provision for losses from Accounts Receivable related to concession |
7 | - | - | 2,334 | 10,438 |
Provision for doubtful debts |
29.6 | - | - | 15,459 | 10,942 |
Provisions for losses on taxes recoverable |
29.6 | - | - | 15,773 | - |
Provision (reversal) for legal demands |
29.6 | (7,188) | 15,195 | 15,250 | 53,994 |
Provision for post employment benefits |
21.3 | 323 | 166 | 67,347 | 55,265 |
Provision for research and development and energy efficiency |
23 | - | - | 33,079 | 29,833 |
Write off of Accounts Receivable related to concession |
7 | - | - | 12,569 | 5,638 |
Write off of investments |
14.6 | - | 6 | - | 6 |
Property, plant and equipment written off |
15.3 | - | - | 17,293 | 1,258 |
Intangible assets written off |
16 | - | - | 5,759 | 21,567 |
Decrease (increase) in assets |
|||||
Trade accounts receivable |
- | - | (172,033) | 49,312 | |
Dividends and interest on own capital received |
114,604 | 21,073 | 14,357 | 13,345 | |
CRC transferred to the Government of the State of Paraná |
6 | - | - | 71,842 | 64,547 |
Legal deposits |
7,395 | (176,565) | 1,294 | (229,327) | |
Other receivables |
(5) | - | (25,124) | (17,773) | |
Inventories |
- | - | (12,014) | (1,687) | |
Income tax and social contribution |
21,046 | (2,713) | 27,004 | 57,620 | |
Other current taxes recoverable |
- | - | (977) | 3,786 | |
Receivable from related parties |
- | - | 1,575 | - | |
Prepaid expenses |
- | - | (6,239) | (6,118) | |
Increase (decrease) in liabilities |
|||||
Payroll, social charges and accruals |
(103) | (97) | 21,050 | (52,239) | |
Suppliers |
204 | 100 | (65,474) | (35,039) | |
Income tax and social contribution paid |
(14,985) | (1,983) | (402,246) | (287,624) | |
Other taxes |
(37,095) | (41,867) | (92,927) | (86,552) | |
Interest on loans and financing |
19 | (18,352) | (14,587) | (55,269) | (48,156) |
Debenture interest |
20 | (32,524) | (25,577) | (32,524) | (41,258) |
Post employment benefits |
(362) | (148) | (47,498) | (49,569) | |
Customer charges due |
- | - | 24,369 | 20,455 | |
Research and development and energy efficiency |
23 | - | - | (23,323) | (19,337) |
Payable related to the concession - use of public property |
- | - | (20,492) | (19,015) | |
Other accounts payable |
(4,192) | (2,041) | 7,111 | (18,925) | |
Provisions for legal claims |
26 | - | - | (23,730) | (8,477) |
Net cash generated from (used in) operational activities | 18,291 | (231,617) | 447,436 | 322,533 | |
(continued) |
10
Statements of Cash Flows
For the semesters ended June 30, 2011 and 2010 (continued)
In thousands of Reais - R$
(continued) | |||||
Note | Parent Company | Consolidated | |||
6.30.2011 | 6.30.2010 | 6.30.2011 | 6.30.2010 | ||
Cash flows from investment activities | |||||
Financial investments |
18 | 78,958 | 69,803 | (44,236) | |
Additions in investments |
14.6 | 30,330 | (126,146) | (111) | (148) |
Additions to property, plant and equipment |
15.3 | - | - | (363,894) | (143,872) |
Additions to intangible assets related to the concession |
16 | - | - | (321,894) | (348,472) |
Additions to other intangible assets |
16 | - | - | (2,120) | (20,743) |
Financial participation of customers |
16 | - | - | 28,253 | 44,181 |
Net cash generated from (used in) investments activities | 30,348 | (47,188) | (589,963) | (513,290) | |
Cash flows from financial activities | |||||
Payment (reimbursement) of capital in subsidiaries by non controlling interests |
27.2 | - | - | (19,689) | 54,000 |
Loans and financing obtained from third parties |
19 | - | - | 197,262 | 80,059 |
Amortization of principal loans and financing |
19 | - | - | (22,631) | (19,840) |
Amortization of principal debentures |
20 | - | - | - | (177,908) |
Dividends and interest on own capital paid |
(124,986) | (79,161) | (130,513) | (83,994) | |
Net cash used in the financing activities | (124,986) | (79,161) | 24,429 | (147,683) | |
Total effects on cash and cash equivalents | (76,347) | (357,966) | (118,098) | (338,440) | |
Cash and cash equivalents at the beginning of the period |
3 | 89,822 | 479,044 | 1,794,416 | 1,518,523 |
Cash and cash equivalents at the end of the period |
3 | 13,475 | 121,078 | 1,676,318 | 1,180,083 |
Change in cash and cash equivalents | (76,347) | (357,966) | (118,098) | (338,440) | |
See the accompanying notes to the quarterly information | |||||
Additional information on cash flows | |||||
Transactions not involving cash |
|||||
Acquisitions of fixed asssets with an increase in the balance of accounts payable to suppliers |
- | - | 6,176 | 12,572 |
11
Statements of Added Value
For the semesters ended June 30, 2011 and 2010
In thousands of Reais - R$
Parent Company | Consolidated | |||
6.30.2011 | 6.30.2010 | 6.30.2011 | 6.30.2010 | |
Income | ||||
Sale of energy, services and other income |
- | - | 5,421,560 | 4,711,802 |
Other operational income |
144 | 165 | (35,954) | (12,309) |
Construction income |
- | - | 276,455 | 272,920 |
Allowance for doubtful debts |
- | - | (15,277) | (10,942) |
Total | 144 | 165 | 5,646,784 | 4,961,471 |
( - ) Supplies acquired from third parties | ||||
Energy purchased for resale |
- | - | 1,145,789 | 1,045,694 |
Charges for use of the main transmission grid ( - ) |
||||
ESS |
- | - | 320,833 | 311,995 |
Materials, supplies and third parties services |
2,394 | 2,498 | 238,769 | 212,398 |
Natural gas and supplies for gas operations |
- | - | 99,417 | 88,115 |
Construction costs |
- | - | 275,570 | 272,892 |
Other charges |
- | - | 7,102 | 6,002 |
Other supplies |
397 | 15,680 | 48,333 | 64,134 |
Total | 2,791 | 18,178 | 2,135,813 | 2,001,230 |
( = ) Gross added value | (2,647) | (18,013) | 3,510,971 | 2,960,241 |
( - ) Depreciation and amortization | 377 | 377 | 269,885 | 274,849 |
( = ) Net added value | (3,024) | (18,390) | 3,241,086 | 2,685,392 |
( + ) Transferred added value | ||||
Financial income |
60,938 | 62,119 | 308,478 | 299,589 |
Results from investment interests |
650,211 | 564,775 | 34,882 | 54,869 |
Total | 711,149 | 626,894 | 343,360 | 354,458 |
Value added to distribute | 708,125 | 608,504 | 3,584,446 | 3,039,850 |
(continued) |
12
Statements of Added Value
For the semesters ended June 30, 2011 and 2010 (continued)
In thousands of Reais - R$
(continued) | ||||||||
Parent Company | Consolidated | |||||||
6.30.2011 | % | 6.30.2010 | % | 6.30.2011 | % | 6.30.2010 | % | |
Distribution of added value: | ||||||||
Personnel | ||||||||
Remuneration and fees |
3,343 | 2,881 | 288,075 | 245,377 | ||||
Private pension and health plans |
323 | 166 | 63,703 | 51,703 | ||||
Meal and education assistance |
- | - | 33,339 | 29,642 | ||||
Social security charges - FGTS |
224 | 181 | 22,903 | 19,918 | ||||
Labor indemnities (reversals) |
- | - | 21,781 | 13,706 | ||||
Profit sharing |
- | - | 41,319 | 32,545 | ||||
Transfers to property, plant and equipment in progress |
- | - | (62,900) | (36,572) | ||||
Total | 3,890 | 0.5 | 3,228 | 0.5 | 408,220 | 11.4 | 356,319 | 11.7 |
Government | ||||||||
Federal |
(2,496) | (724) | 1,231,559 | 1,020,201 | ||||
State |
1 | 1 | 1,136,340 | 971,245 | ||||
Municipal |
- | - | 1,570 | 1,608 | ||||
Total | (2,495) | (0.4) | (723) | (0.1) | 2,369,469 | 66.1 | 1,993,054 | 65.6 |
Third Parties | ||||||||
Interest and fines |
72,062 | 47,357 | 154,635 | 110,025 | ||||
Leasing and rent |
7 | 19 | 8,416 | 7,402 | ||||
Donations, subsidies and contributions |
2 | - | 1,395 | 2,340 | ||||
Total | 72,071 | 10.2 | 47,376 | 7.8 | 164,446 | 4.6 | 119,767 | 3.9 |
Shareholders | ||||||||
Non controlling interests |
- | - | 7,653 | 12,087 | ||||
Retained profits |
634,659 | 558,623 | 634,658 | 558,623 | ||||
Total | 634,659 | 89.7 | 558,623 | 91.8 | 642,311 | 17.9 | 570,710 | 18.8 |
708,125 | 100.0 | 608,504 | 100.0 | 3,584,446 | 100.0 | 3,039,850 | 100.0 | |
See the accompanying notes to the quarterly information |
13
NOTES TO THE QUARTERLY FINANCIAL INFORMATION
For the semester ended June 30, 2011
In thousands of Reais - R$
1 GENERAL INFORMATION
Companhia Paranaense de Energia - Copel (Copel, the Company or the Parent Company), with headquarters at Rua Coronel Dulcídio, 800, Batel, Curitiba, Estado do Paraná, is a public company with shares traded on Corporate Governance Level 1 of BM&FBOVESPA’s Special Listings and on stock exchanges in the United States of America and Spain. Copel is a mixed capital company, controlled by the Government of the State of Paraná, engaged, through its subsidiaries, in researching, studying, planning, building, and exploiting the production, transformation, transportation, distribution, and sale of energy, in any form, but particularly electric energy. These activities are regulated by the National Electric Energy Agency - ANEEL, which reports to the Ministry of Mines and Energy - MME. Additionally, Copel takes part in consortiums, private enterprises, or mixed capital companies in order to operate mostly in the areas of energy, telecommunications, natural gas, and water supply and sanitation.
The direct and indirect subsidiaries of the Company are described in note 14.
2 MAIN ACCOUNTING POLICIES
2.1 Statement of Compliance
The Company’s quarterly financial information includes:
• The consolidated quarterly financial information prepared in accordance with International Financial Reporting Standards - IFRS issued by the International Accounting Standards Board - IASB and also in accordance with accounting practices adopted in Brazil;
• The individual quarterly financial information of the parent company prepared in accordance with accounting practices adopted in Brazil.
Accounting practices adopted in Brazil include those in Brazilian Corporate Legislation and the pronouncements, orientations and interpretations issued by the Accounting Pronouncements Committee – CPC and approved by the Securities and Exchange Comission - CVM (Comissão de Valores Mobiliários).
The individual quarterly financial information present the values for investments in subsidiaries, joint ventures and associated companies using the equity method, in accordance with Brazilian legislation in force. Thus, these individual quarterly financial information are not in compliance with the IFRSs, which require that these investments reported in the parent company’s individual statements be stated at fair value or cost.
14
Given that there is no difference between the consolidated shareholders´ equity and the consolidated profit attributed to the owners of the parent company, stated in the consolidated quarterly financial information prepared in accordance with the IFRSs and the accounting practices adopted in Brazil and the shareholders’ equity and net profit of the parent company, stated in the individual quarterly financial information prepared in accordance with accounting practices adopted in Brazil, the Company opted to present these individual and consolidated quarterly financial information side by side, in one set of accounts.
This quarterly information is presented considering the rulings included in CPC 21 and IAS 34 -Interim Information and the CVM SNC/SEP Official Circular 03/11.
Consequently, certain information disclosed in the notes to the financial statements for the year ended December 31, 2010 which did not alter during the quarter has not been presented. Therefore, this quarterly information should be read together with the financial statements at December 31, 2010.
2.2 Basis of Presentation
Authorization for the completion of these quarterly financial information was granted at the Meeting of the Board of Officers held on Aug 09, 2011.
The quarterly financial information were prepared based on historic cost, except for certain financial instruments which were stated at fair values, as disclosed in the accounting practices below. The historic cost is generally based on the fair value of the consideration paid in exchange for the assets at the time of initial recognition.
2.3 Basis for consolidation and investments in subsidiaries
The consolidated quarterly financial information include the quarterly financial information of the Company, those of its subsidiaries and the exclusive investment funds.
The reporting dates of the quarterly financial information of the investments in subsidiaries, joint ventures and associated companies used to calculate the equity values and for consolidation coincide with that of the parent company dates.
The individual components of the quarterly financial information of the joint ventures are consolidated in proportion to the investment interest held.
When necessary, the quarterly financial information of the subsidiaries are adjusted to adapt the accounting policies established by the Group. All of the transactions, balances, income and expenses between the Group companies are eliminated in the consolidated quarterly financial information.
2.4 Significant accounting policies
The significant accounting policies used for preparing this quarterly information are consistent with those presented in Note 2 of the Annual Financial Statements at December 31, 2010, available in the CVM and Copel’s sites.
15
2.5 Significant accounting judgments and estimates
In applying the Group’s accounting policies, Management has to make judgments and prepare estimates for the accounting values of assets and liabilities which are not easily obtained from other sources. These estimates and respective assumptions are based on historic experience and other factors considered relevant. The actual results could differ from these estimates.
The underlying estimates and assumptions are continually revised. The effects from the reviews of the accounting estimates are recognized in the period in which the estimates are revised, if the review affects only this period, and also in subsequent periods if the review affects the present period and future periods.
The main judgments from applying the accounting policies, used in preparing this quarterly information, are consistent with those presented in Note 3 of the Annual Financial Statements at December 31, 2010, available in the CVM and Copel’s sites.
3 CASH AND CASH EQUIVALENTS
Parent Company | Consolidated | |||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |
Cash and bank accounts | 1,150 | 456 | 31,063 | 58,958 |
Financial investments with immediate liquidity | 12,325 | 89,366 | 1,645,255 | 1,735,458 |
13,475 | 89,822 | 1,676,318 | 1,794,416 |
Financial investments with immediate liquidity are readily convertible to known amounts of cash and are subject to an insignificant risk of change in value. These short-term investments comprise Certificates of Deposit (CDs) issued by official banks and also financial investments in Government Bonds with repurchase agreements with the issuer banks, in which the Bank has the obligation to repurchase these bonds from Copel on request. These investments have yielded on average 100% of the variation of the Interbank Deposit Rate as of June 30, 2011 and December 31, 2010.
4 BONDS AND SECURITIES
Parent Company | Consolidated | |||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |
Current assets | ||||
Bonds and securities (4.1) | 157 | 175 | 533,151 | 534,095 |
Collaterals and escrow accounts | - | - | 437 | 64,078 |
157 | 175 | 533,588 | 598,173 | |
Noncurrent assets | ||||
Bonds and securities (4.1) | - | - | 1,933 | 7,151 |
Collaterals and escrow accounts (STN - Note 19.2) | - | - | 25,679 | 26,280 |
- | - | 27,612 | 33,431 | |
. |
16
4.1 Securities
Category | Index | Consolidated | |
6.30.2011 | 12.31.2010 | ||
Securities available for sale | |||
CDB (1 and 2) |
CDI | 96,331 | 100,785 |
Committed Operation (3) |
CDI | 39,282 | 17,328 |
Committed Operation (2) |
Selic | 23,360 | 2,961 |
Committed Operation (2) |
PRE-FIXED | 77,721 | 98,552 |
Quotas in Funds (3 and 4) |
CDI | 106 | 124 |
NTN - F |
CDI | - | 27,309 |
NTN - B |
IPCA | 4,107 | - |
LFT (2) |
Selic | 155,317 | 175,043 |
LTN (2) |
PRE-FIXED | 124,091 | 44,482 |
LFBB |
CDI | 6,363 | 6,015 |
Derivatives |
DI Future BMF | 121 | - |
526,799 | 472,599 | ||
Securities held to maturity | |||
LFT (2) |
Selic | 6,352 | 60,662 |
LTN (2) |
PRE-FIXED | - | 6,140 |
Quotas in Funds (3 and 4) |
CDI | 1,933 | 1,845 |
8,285 | 68,647 | ||
535,084 | 541,246 | ||
Current | 533,151 | 534,095 | |
NonCurrent - NC | 1,933 | 7,151 | |
Financial Treasury Bonds - LFT | |||
National Treasury Bonds - LTN | |||
National Treasury Bill - Series F - NTN-F | |||
Financial Bills Committed to Banco do Brasil - LFBB |
Category | Index | Parent Company | |
6.30.2011 | 12.31.2010 | ||
Securities available for sale | |||
CDB |
CDI | 78 | 76 |
Fund Quotas |
CDI | 79 | 99 |
Current | 157 | 175 |
Copel holds securities with variable interest rates. The maturity of these securities varies between 1 and 48 months, as from the reporting date of this report. The counter parties for these securities are classified with at least the credit rating A. None of these assets was overdue or presented recovery problems or impairment losses at the end of the period.
1) | The main amounts invested include: | |
• |
The amount of R$ 69,231 has been invested with Banco do Brasil, corrected to June 30, 2011, (R$ 65,612 as of December 31, 2010), remunerated at the rate of 100% of the DI rate, as guarantee provided to Aneel to comply with the construction of the Hydro electric plant at Mauá, by Copel Geração e Transmissão; | |
2) |
Constitute a guarantee for the Aneel auction by Copel Geração e Transmissão e Copel Distribuição for the amount of R$ 29,613 at June 30, 2011 (R$ 67,162 as of December 31, 2010); |
17
3) |
Constitute a guarantee for the Contracts for the Sale of Energy in the Regulated Environment - CCEARs in CCEE R$ 26,661 at. June 30, 2011 (R$ 27,146 as of December 31, 2010); and |
4) |
An allowance related to a financing contract agreedment signed with BNDES in 2001 by UEG Araucária in the amount of R$ 27 at June 30, 2011 (R$ 26 as of December 31, 2010). |
5 TRADE ACCOUNTS RECEIVABLE
Balances falling due |
Overdue up to 90 days |
Overdue for more than 90 days |
Total Consolidated | |||
6.30.2011 | 12.31.2010 | |||||
Customers | ||||||
Residential |
146,396 | 99,033 | 7,831 | 253,260 | 199,649 | |
Industrial |
147,640 | 48,677 | 37,585 | 233,902 | 184,039 | |
Commercial |
99,339 | 45,865 | 6,840 | 152,044 | 118,540 | |
Rural |
19,235 | 10,287 | 2,978 | 32,500 | 24,004 | |
Public Entities |
24,971 | 19,210 | 19,290 | 63,471 | 43,266 | |
Public lighting |
15,421 | 2,547 | 89 | 18,057 | 15,673 | |
Public service |
15,212 | 14,595 | 44 | 29,851 | 14,335 | |
Unbilled |
234,996 | - | - | 234,996 | 198,363 | |
Energy installments plan |
86,174 | 6,622 | 13,469 | 106,265 | 101,841 | |
Energy installments plan - Non Current |
37,282 | - | - | 37,282 | 40,498 | |
Low income subsidy - Eletrobrás |
44,018 | - | - | 44,018 | 24,376 | |
Fines and charges on energy bills |
4,057 | 3,464 | 3,721 | 11,242 | 9,611 | |
State Government "Luz Fraterna" program |
831 | 4,444 | 16,036 | 21,311 | 11,528 | |
Other receivables |
14,329 | 7,655 | 6,450 | 28,434 | 24,289 | |
Other receivables - non current |
6,534 | - | - | 6,534 | 3,231 | |
896,435 | 262,399 | 114,333 | 1,273,167 | 1,013,243 | ||
Concessionaires and Permission holder | ||||||
Energy supplies |
||||||
CCEAR - auction |
123,782 | 1,337 | - | 125,119 | 133,004 | |
Bilateral contracts |
25,536 | - | 123 | 25,659 | 26,709 | |
CCEE |
11,350 | - | 105 | 11,455 | 21,551 | |
Reimbursement to generators |
- | - | 1,210 | 1,210 | 1,194 | |
160,668 | 1,337 | 1,438 | 163,443 | 182,458 | ||
Charges from using transmission grid |
||||||
Transmission grid |
17,172 | 1,978 | 2,361 | 21,511 | 21,552 | |
Basic network and conection grid |
15,114 | 362 | 499 | 15,975 | 15,104 | |
32,286 | 2,340 | 2,860 | 37,486 | 36,656 | ||
Telecommunications | ||||||
Telecommunication services |
6,463 | 9,043 | 14,832 | 30,338 | 17,571 | |
6,463 | 9,043 | 14,832 | 30,338 | 17,571 | ||
Gas distribution | 24,289 | 771 | 196 | 25,256 | 18,547 | |
Allowance for doubtful accounts (5.1) | - | - | (71,339) | (71,339) | (62,119) | |
1,120,141 | 275,890 | 62,320 | 1,458,351 | 1,206,356 | ||
6.30.2011 | Current | 1,076,325 | 275,890 | 62,320 | 1,414,535 | |
Noncurrent - NC | 43,816 | - | - | 43,816 | ||
12.31.2010 | Current | 941,517 | 198,873 | 22,237 | 1,162,627 | |
Noncurrent - NC | 43,729 | - | - | 43,729 |
18
The average collection period for the electricity sold to customers is 12 days and 10 days for concessionaries and other entities permitted to supply electricity.
5.1 Allowance for Doubtful Accounts
Copel’s senior management has considered the following amounts as sufficient to cover potential losses on the realization of receivables:
Consolidated | Balance | Additions / (reversals) | Reversal of write offs | Balance |
12.31.2010 | 6.30.2011 | |||
Customers, concessionaries and permission holder | ||||
Residential |
7,654 | 10,177 | (4,916) | 12,915 |
Industrial |
40,761 | 2,169 | (258) | 42,672 |
Commercial |
10,880 | 2,280 | (692) | 12,468 |
Rural |
69 | 547 | (118) | 498 |
Public Entities |
1,453 | (149) | - | 1,304 |
Public lighting |
155 | (75) | - | 80 |
Public service |
2 | - | - | 2 |
Concessionaries and permission holder |
224 | - | - | 224 |
Telecommunications | 921 | 255 | - | 1,176 |
62,119 | 15,204 | (5,984) | 71,339 |
Consolidated | Balance | Reversal of write offs | Balance |
12.31.2009 | 6.30.2010 | ||
Customers, concessionaries and permission holder | |||
Residential |
6,245 | 6,819 | 13,064 |
Industrial |
40,101 | 2,597 | 42,698 |
Commercial |
5,863 | 1,364 | 7,227 |
Rural |
185 | (111) | 74 |
Public Entities |
1,272 | 116 | 1,388 |
Public lighting |
149 | 4 | 153 |
Public service |
- | 2 | 2 |
Concessionaries and permission holder |
203 | 21 | 224 |
Telecommunications | 931 | 148 | 1,079 |
54,949 | 10,960 | 65,909 |
The applied criteria, in addition to taking into account management’s experience of the history of losses experienced, also complies with the criteria recommended by ANEEL.
6 RECOVERABLE RATE DEFICIT (CRC) TRANSFERRED TO THE GOVERNMENT OF THE STATE OF PARANÁ |
By means of a fourth amendment dated January 21, 2005, the Company renegotiated with the Government of Paraná the outstanding CRC (Account for Compensation of Income and Losses) balance as of December 31, 2004, in the amount of R$ 1,197,404, to be paid in 244 installments under the Price amortization system, restated according to the IGP-DI inflation index plus interest of 6.65% p.y., with the first installment due on January 30, 2005 and the others due in subsequent and consecutive months. |
19
The State Government has been in compliance with the payments of the renegotiated installments according to the terms of the fourth amendment to the CRC agreement. Amortizations are secured by resources from dividends.
Maturity of noncurrent installments:
Consolidated | ||
6.30.2011 | 12.31.2010 | |
2012 | 64,337 | 62,728 |
2013 | 68,616 | 66,899 |
2014 | 73,179 | 71,348 |
2015 | 78,046 | 76,093 |
2016 | 83,236 | 81,154 |
2017 | 88,772 | 86,551 |
2018 | 94,676 | 92,307 |
2019 | 100,972 | 98,446 |
2020 | 107,687 | 104,993 |
2021 | 114,849 | 111,976 |
2022 | 122,487 | 119,423 |
2023 | 130,633 | 135,836 |
after 2023 | 160,897 | 174,623 |
1,288,387 | 1,282,377 |
Changes in CRC
Current assets | Noncurrent assets | Consolidated | |
Balance as of December 31, 2010 | 58,816 | 1,282,377 | 1,341,193 |
Interest and fees |
42,907 | - | 42,907 |
Monetary variations |
157 | 37,621 | 37,778 |
Transfers |
31,611 | (31,611) | - |
Amortizations |
(71,842) | - | (71,842) |
Balance as of June 30, 2011 | 61,649 | 1,288,387 | 1,350,036 |
Current assets | Noncurrent assets | Consolidated | |
Balance as of December 31, 2009 | 49,549 | 1,205,025 | 1,254,574 |
Interest and fees |
40,172 | - | 40,172 |
Monetary variations |
555 | 65,484 | 66,039 |
Transfers |
26,866 | (26,866) | - |
Amortization |
(64,547) | - | (64,547) |
Balance as of June 30, 2010 | 52,595 | 1,243,643 | 1,296,238 |
20
7 ACCOUNTS RECEIVABLE RELATED TO THE CONCESSION |
7.1 Change in accounts receivable related to the concession
Current assets | Noncurrent assets | Noncurrent special liabilities | Consolidated | |
Balance as of December 31, 2010 | 54,700 | 3,849,462 | (1,426,117) | 2,478,045 |
Capitalization of intangible assets in progress |
- | 190,452 | - | 190,452 |
Transfers from non current to current |
105,768 | (105,768) | - | - |
Transfers to charges for use of main distributions and transmission grid - customers |
(93,905) | - | - | (93,905) |
Transfers to fixed assets in use |
- | (220) | - | (220) |
Provisions for losses - indemnifiable assets |
- | (2,334) | - | (2,334) |
Adjustment to financial assets classified as available for sale |
- | (2,982) | - | (2,982) |
Monetary variations |
- | 105,229 | (55,322) | 49,907 |
Remuneration |
- | 148,847 | - | 148,847 |
Construction income |
- | 58,184 | - | 58,184 |
Write off |
- | (12,569) | - | (12,569) |
Balance as of June 30, 2011 | 66,563 | 4,228,301 | (1,481,439) | 2,813,425 |
Current assets | Non current assets | Noncurrent special liabilities | Consolidated | |
Balance as of December 31, 2009 | 44,070 | 3,045,323 | (1,217,103) | 1,872,290 |
Capitalization of intangible assets in progress |
- | 258,652 | (25,456) | 233,196 |
Transfers from non current to current |
106,789 | (106,789) | - | - |
Transfers to charges for use of main distributions and transmission grid - customers |
(97,816) | - | - | (97,816) |
Provisions for losses - indemnifiable assets |
- | (10,438) | - | (10,438) |
Monetary variations |
- | 139,006 | (69,053) | 69,953 |
Remuneration |
- | 150,123 | - | 150,123 |
Construction income |
- | 2,661 | - | 2,661 |
Write off |
- | (5,638) | - | (5,638) |
Balance as of June 30, 2010 | 53,043 | 3,472,900 | (1,311,612) | 2,214,331 |
7.2 Accounts receivable related to the concession – Distribution
Management adopted Technical Interpretation ICPC 01/IFRIC 12 and SIC 29 – Concession Contracts, which provide guidelines on accounting for public service concessions granted to private operators, as follows:
(a) Estimated amount of investments made and not amortized or depreciated at the end of the concession period classified as a financial asset since it refers to an unconditional right to receive cash or another financial asset from the Conceding Power; and
(b) Remaining balance from determining the financial asset (residual value) classified as an intangible asset given that recovery of such is dependent on the use of the public service, in this case, the consumption of energy by consumers (see Note 16).
Remuneration of this financial asset is based on the regulatory WACC homologated by the ANEEL in the four yearly tariff review, and is included in the composition of income from the amounts billed to consumers and received monthly.
During the periods between the last and following periodic tariff review, the balance for financial asset is adjusted based on management’s expectation of an increase or decrease in its cash flows related to the changes in assets included in the infra-structure (physical assets). These variations in the estimated cash flows are registered directly to the profit or loss for the period.
21
Given that there is no active market for trading this financial asset, the variations in the fair value of the balance for the financial asset related to the perception of market players in relation to the difference between the regulatory remuneration rate and the market rate is periodically adjusted based on the methodology determined by Management and this adjustment, when applicable, is registered directly to the equity evaluation account, to shareholders’ equity.
Further information is available in note 9.2 of the Annual Financial Statements at December 31, 2010.
7.3 Accounts receivable related to the concession – Transmission
Refer to amounts receivable from concession contracts for transmission and are represented by the following amounts: (i) revenue from construction of the infra-structure for transmission to be made available to users; (ii) revenue from the operation and maintenance of the infra-structure when actually realized; and (iii) financial income guaranteed by the Conceding Power during the concession period on this revenue.
Income from the transmission concession contracts is earned from making the infrastructure available to users of the system, it is not subject to the risk from demand and is therefore considered as guaranteed income referred to as Permitted Annual Income – RAP (Receita Annual Permitida) to be received during the concession period. The amounts are billed monthly to the users of the infrastructure, in accordance to the report issued by the National System Operator– ONS.
When the concession matures, if there is a balance remaining that has not been received from the construction, operation and maintenance of the infrastructure, this will be received directly from the Conceding Power, since it represents an unconditional right to receive cash, as provided in the concession contract, as indemnity for the investments made and not recovered through the tariffs (RAP).
Further information is available in note 9.3 of the Annual Financial Statements at December 31, 2010.
7.4 Commitments related to the transmission concessions
7.4.1 LT 525 KV ARARAQUARA 2 TAUBATÉ
This transmission line was awarded to the Company at ANEEL auction 001/10, on June 10, 2010.
The total commitments assumed with suppliers of equipment and services related to LT 525 KV Araraquara 2 Taubaté amounted to R$ 243,398 at June 30, 2011.
7.4.2 SUBSTATION CERQUILHO III 230 KV
This 230/138KV (300MVA) substation was awarded to the Company at ANEEL auction 001/10 –Aneel, on June 10, 2010.
The total commitments assumed with suppliers of equipment and services related to Substation Cerquilho III, amounted to R$ 43,182 at June 30, 2011.
22
8 OTHER RECEIVABLES |
Consolidated | ||
6.30.2011 | 12.31.2010 | |
Current assets | ||
Services in progress, net |
115,368 | 110,374 |
Advance payments to employees |
23,996 | 9,126 |
Decommissioning in progress |
11,295 | 6,284 |
Advance payments for judicial deposits |
10,619 | 9,927 |
Advance payments to suppliers |
5,822 | 3,248 |
Services provided to third parties |
5,665 | 3,631 |
Employee salary granted - recoverable |
4,476 | 4,174 |
Installment plan for Onda Provedor de Serviços |
4,348 | 4,348 |
Purchase of fuel by CCC |
4,174 | 2,406 |
Lease of the Araucária power plant |
2,730 | 4,296 |
Disposal of property and rights |
2,511 | 9,048 |
Allowance for doubtful debts |
(10,052) | (9,979) |
Other receivables |
4,301 | 4,186 |
185,253 | 161,069 | |
Noncurrent assets | ||
Advance payments to suppliers |
11,017 | 9,902 |
Compulsory loans |
2,955 | 2,833 |
Disposal of property and rights |
2,152 | 2,325 |
Other receivables |
163 | 164 |
16,287 | 15,224 |
9 INVENTORIES |
Consolidated | Operation/Maintenance | Fixed assets in progress - materials at deposits | ||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |
Copel Geração e Transmissão |
22,729 | 24,429 | - | - |
Copel Distribuição |
92,737 | 83,893 | - | - |
Copel Telecomunicações |
16,606 | 11,758 | 21,480 | 17,511 |
Compagás |
1,366 | 1,344 | - | - |
Elejor |
- | - | 2,600 | 2,702 |
133,438 | 121,424 | 24,080 | 20,213 |
23
10 INCOME TAX, SOCIAL CONTRIBUTION AND OTHER TAXES |
10.1 Income Tax (IR) and Social Contribution (CSLL)
. | ||||
Parent Company | Consolidated | |||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |
Current assets | ||||
IR and CSLL paid in advance |
101,949 | 155,461 | 379,445 | 518,889 |
IR and CSLL to be offset against |
- | (20,347) | (248,956) | (348,557) |
IRRF on JSCP to be offset against liability |
- | (12,119) | - | (12,119) |
101,949 | 122,995 | 130,489 | 158,213 | |
Noncurrent assets |
||||
IR and CSLL paid in advance |
- | - | 13,061 | 12,341 |
- | - | 13,061 | 12,341 | |
Current liabilities |
||||
IR and CSLL due |
- | 35,332 | 439,120 | 501,806 |
IR and CSLL to be offset against |
- | (20,347) | (248,956) | (348,557) |
- | 14,985 | 190,164 | 153,249 |
The amounts registered for income tax and social contribution in advance refer to prepayments and credits on the Annual Corporate Tax Return – DIPJ, which are compensated against the taxes payable, in accordance with Brazilian tax legislation.
10.2 Deferred income and social contribution taxes
Company records deferred income tax, calculated at the rate of 15%, plus an additional rate of 10%, and deferred social contribution, at the rate of 9%.
Tax credits related to the pension and healthcare plans are realized according the movement of the related accrual based on the actuarial valuation conducted annually by an independent actuary, pursuant to the rules set forth in CVM Resolution no. 600/2009. Deferred taxes on all other accruals will be realized as judicial rulings are issued and regulatory assets are realized.
Under current tax legislation, tax losses and negative bases for social contributions may be offset against future income, up to the limit of 30% of the taxable income for each year, without expiration period.
24
Tax credits have been recorded as follows:
Parent Company | Consolidated | |||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |
Noncurrent assets | ||||
Tax losses and negative tax basis |
25,377 | 1,170 | 27,862 | 10,966 |
Private pension and health plans |
- | - | 142,119 | 135,384 |
Other temporary additions |
- | - | - | - |
Provisions for legal claims |
98,960 | 120,877 | 283,981 | 290,385 |
Allowance for doubtful debts |
1,478 | 1,478 | 27,637 | 24,477 |
Amortization - concession |
17,701 | 17,573 | 42,906 | 35,917 |
Provision for impact of grid charges |
- | - | 6,922 | 6,922 |
Provision for financing |
4,757 | 3,659 | 4,757 | 3,659 |
Provision for energy purchases |
- | - | 83,317 | - |
Provision for profit sharing |
- | - | 13,875 | - |
148,273 | 144,757 | 633,376 | 507,710 | |
Noncurrent liabilities | ||||
Transitional tax system - RTT |
- | - | - | - |
Effects from applying CPC 27 - Deemed cost |
- | - | 776,404 | 802,556 |
Effects from applying ICPC 01 |
- | - | 89,179 | 47,607 |
Other temporary exclusions |
- | - | - | |
Capitalization of financial charges |
- | - | 4,540 | 4,595 |
Provisions for negative goodwill |
25,297 | 25,297 | 25,297 | 25,297 |
Gas supply |
- | - | 6,268 | 7,163 |
25,297 | 25,297 | 901,688 | 887,218 | |
122,976 | 119,460 | (268,312) | (379,508) |
Company’s Board of Directors and Fiscal Council have approved the technical study prepared by the Chief Finance, Investor Relations, and Corporate Partnerships Office on future profitability projections, discounted at present value, which points out to the realization of deferred taxes. In this semester there were no events that required the review of the calculations of recovery of the deferred tax asset.
According to the estimate of future taxable income, the realization of deferred taxes is shown below:
Parent Company | Consolidated | |||||
Estimated Realizable Amount | Actual Realized Amount | Estimated Realizable Amount | Estimated Realizable Amount | Actual Realized Amount | Estimated Realizable Amount | |
2010 | 2,145 | 22,295 | - | 17,311 | 87,728 | - |
2011 | - | - | 14,987 | - | - | 128,826 |
2012 | - | - | 15,152 | - | - | 21,951 |
2013 | - | - | 2,996 | - | - | 9,795 |
2014 | - | - | 2,552 | - | - | 9,351 |
2015 | - | - | 2,554 | - | - | 272,524 |
2016 to 2018 | - | - | 3,804 | - | - | (11,056) |
2019 to 2021 | - | - | 2,540 | (78,009) | ||
after 2021 | - | - | 78,391 | - | - | (621,694) |
2,145 | 22,295 | 122,976 | 17,311 | 87,728 | (268,312) |
25
10.3 Other recoverable taxes and other taxes due
Parent Company | Consolidated | |||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |
Current assets | ||||
Recoverable ICMS (VAT) (10.3.1) |
- | - | 36,105 | 36,785 |
Recoverable PIS/Pasep and Cofins taxes |
- | - | 26,366 | 7,966 |
PIS/Pasep and Cofins to be offset against liabilities |
- | - | (26,190) | (7,966) |
Other recoverable taxes |
- | - | 330 | 751 |
- | - | 36,611 | 37,536 | |
Noncurrent assets |
||||
ICMS (VAT) payable (10.3.1) |
- | - | 73,949 | 82,029 |
Recoverable income tax withheld on finance investments |
- | - | 3,532 | 2,833 |
- | - | 77,481 | 84,862 | |
Current liabilities |
||||
ICMS (VAT) payable |
- | - | 185,933 | 173,989 |
PIS/Pasep and Cofins payable |
749 | 21,016 | 53,660 | 75,511 |
PIS/Pasep and Cofins to be offset against assets |
- | - | (26,190) | (7,966) |
Tax Recovery Programs (10.3.2) |
65,834 | 60,229 | 88,693 | 94,887 |
IRRF on JSCP |
- | 12,119 | - | 45,813 |
IRRF on JSCP to be offset against assets |
- | (12,119) | - | (12,119) |
Other taxes |
872 | 883 | 13,551 | 8,756 |
67,455 | 82,128 | 315,647 | 378,871 | |
Noncurrent liabilities |
||||
ICMS (VAT) payable |
- | - | 388 | 623 |
Tax Recovery Programs (10.3.2) |
- | 20,076 | - | 31,629 |
- | 20,076 | 388 | 32,252 |
10.3.1 Recoverable ICMS (VAT)
The amounts recorded as recoverable ICMS (VAT), R$ 97,071, refer to credits from the acquisition of property, plant, and equipment under Supplemental Law no. 87/96, which shall be recovered monthly at the rate of 1/48 pursuant to Supplemental Law no. 102, dated July 11, 2000.
26
10.3.2 Tax recovery programs
. | Parent Company | ||||||
Debt amount |
Benefits Law 11,941 |
Tax loss carryforward |
Selic interest | Corrected debt value |
Antecipation | Balance of corrected debt | |
Law 11,941/09 | |||||||
Cofins Rescission Claim | 229,933 | (80,927) | - | 15,821 | 164,827 | (99,221) | 65,606 |
INSS | 311 | (93) | - | 35 | 253 | (25) | 228 |
230,244 | (81,020) | - | 15,856 | 165,080 | (99,246) | 65,834 | |
. | Consolidated | ||||||
Value of debt |
Benefits Law 11,941 |
Tax loss carryforward |
Selic interest | Corrected debt value |
Antecipation | Balance of corrected debt | |
Law 11,941/09 | |||||||
IRPJ | 43,256 | (8,898) | (3,123) | 3,030 | 34,265 | (23,985) | 10,280 |
CSLL | 5,925 | (1,460) | (428) | 377 | 4,414 | (3,260) | 1,154 |
Cofins | 43,198 | (9,633) | (3,118) | 2,909 | 33,356 | (23,874) | 9,482 |
PIS/Pasep | 8,893 | (1,992) | (642) | 598 | 6,857 | (4,914) | 1,943 |
Cofins Rescission Claim | 229,933 | (80,927) | - | 15,821 | 164,827 | (99,221) | 65,606 |
INSS | 311 | (93) | - | 35 | 253 | (25) | 228 |
331,516 | (103,003) | (7,311) | 22,770 | 243,972 | (155,279) | 88,693 |
The effect on profit or loss for the semester ended June 30, 2011, registered to financial expenses, was R$ 5,254 in the parent company and R$ 6,054 on consolidated (Note 30).
10.4 Installment Plan – Law no. 11,941/09
Pursuant to a ruling by the 4th District Federal Court, which became final on August 18, 1998, Copel was granted immunity from the levy of COFINS tax on power sales. Even though this ruling was final, the Federal Revenue Service (RFB) issued Copel two notices for failure to collect COFINS tax: on February 19, 2002, notice no. 10980.000932/2002-90, for fiscal year 1997, and on August 22, 2003, notice no. 10980.007831/2003-21, for the first three quarters of 1998. Simultaneously, it filed a lawsuit requesting the cancellation of the immunity ruling, which, after a long legal battle regarding the lapse of RFB's right to dispute the ruling, has been submitted to 4th District Federal Court for judgment on the merits. Copel has thus reclassified the corresponding risk of loss as probable, since there’s consolidated legal precedent in favor of the federal government.
Due to the risk classification of this action as a probable loss, the Company had recorded a provision in the amount of R$ 184,464, comprising R$ 61,872 in principal and R$ 122,165 in Selic interest. Considering the level of risk of this action as probable, the Company chose to include it in the scheme for payment in installments established by Law 11,941 of May 27, 2009, with payment in 30 installments, considering the benefits of a reduction in the charges on arrears. Accordingly, the total debt, with the increase of a fine on arrears in the amount of R$ 12,375, now became R$ 196,839.
On June 29, 2011, the Brazilian Federal Revenue Department consolidated the debt, in which the difference of the ex-officio fine was included only in the notice of infraction related to 1998, and additional interest in the amount of R$ 33,094. Accordingly, the total amount of the debt now became R$ 229,933. After the consolidation of this debt, considering the benefits of a decrease in charges on arrears of R$ 80,927, the debt related to the rescissory action now became R$ 149,006.
27
Debts of the National Institute of Social Security (INSS) referring to the Tax Notification of Issuing of Debt nº 35.273.873-1 were also included in the consolidation in the amount of R$ 311, which when the benefits of payment in installments were included, results in a debt of R$218.
Accordingly, the Company's total debt included in the payment in installments is R$ 149,224. Considering the Selic interest on the payment in installments, as established in paragraph 3 of article 3 of the abovementioned law until June 30, 2011 in the amount of R$ 15,856, and also considering prepayments in the amount of R$ 99,246, the balance of the debt amounts to R$ 65,834.
With respect to Copel Distribuição, tax debts referring to income tax (IRPJ) and social contribution on net income (CSLL) for February 2004 and to income tax for December 2007, March and April 2008, which total R$ 49,181, were included in the aforementioned payment in installments. These taxes were settled in their respective accrual periods through Declarations of Offsetting (Dcomp), which were not ratified by the Federal Revenue Department. Furthermore, in the same scheme for payment in installments debts related to the review of the calculation basis for PIS/Pasep and Cofins from 2005 to 2008, which after consolidation amounted to R$ 52,091, were included. The benefits of the decrease in the charges on arrears granted by Law 11,941/09, in the scheme for payment in 30 installments, amount to R$ 21,983. In the consolidation of the debt before the Federal Revenue Department, tax loss carry forwards and the negative calculation base of CSLL were used for settlement of part of the charges on arrears in the amount of R$ 7,311.
Accordingly, the total debt of Copel Distribuição included in the scheme for payment in installments is R$ 71,978. With the addition of Selic interest on the payment in installments, as established in paragraph 3 of article 3 of the abovementioned law until June 30, 2011 in the amount of R$ 6,914, and also considering prepayments in the amount of R$ 56,033, the balance of the debt amounts to R$ 22,859.
Copel has rigorously fulfilled its obligations in connection with these installment plans.
10.5 Reconciliation of the provision for income tax and social contribution
The reconciliation of the provision for income tax (IRPJ) and social contribution (CSLL), calculated at the applicable rates, with the amounts recorded in the statement of income is shown below:
Parent Company | Consolidated | |||
6.30.2011 | 6.30.2010 | 6.30.2011 | 6.30.2010 | |
Income before IRPJ and CSLL | 631,143 | 557,268 | 963,979 | 850,149 |
IRPJ and CSLL (34%) |
(214,589) | (189,471) | (327,753) | (289,051) |
Tax effects on: | ||||
Interest on own capital |
- | - | - | 1,474 |
Dividends |
6 | 10 | 6 | 10 |
Equity in income |
218,338 | 190,803 | 11,854 | 17,173 |
Non deductible expenses |
(7,057) | - | (9,974) | (1,218) |
Tax benefits Law 11,941/09 |
7,087 | - | 7,087 | - |
Tax incentives |
- | - | 1,266 | 1,320 |
Others |
(269) | 13 | (4,153) | (9,147) |
Current IRPJ and CSLL |
- | (1,983) | (439,161) | (297,447) |
Deferred IRPJ and CSLL |
3,516 | 3,338 | 117,494 | 18,008 |
Actual rate - % |
-0.6% | -0.2% | 33.4% | 32.9% |
28
11 PREPAID EXPENSES |
Consolidated | ||
6.30.2011 | 12.31.2010 | |
Current assets | ||
Program of incentive to alternative energy sources - Proinfa |
9,418 | 35 |
Insurance premiums |
1,710 | 4,855 |
Other |
76 | 75 |
11,204 | 4,965 |
12 JUDICIAL DEPOSITS |
Parent Company | Consolidated | ||||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | ||
Taxes claims | 222,840 | 230,235 | 225,325 | 231,429 | |
Labor claims | - | - | 73,870 | 73,596 | |
Civil | |||||
Suppliers |
- | - | 73,400 | 73,400 | |
Civil |
- | - | 18,260 | 14,197 | |
Easements |
- | - | 2,180 | 2,144 | |
Customers |
- | - | 2,114 | 1,677 | |
- | - | 95,954 | 91,418 | ||
Others | - | - | 4,256 | 4,256 | |
222,840 | 230,235 | 399,405 | 400,699 |
29
13 RECEIVABLE FROM RELATED PARTIES |
Parent Company | Consolidated | |||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |
Associated companies | ||||
Dividends and/or interests on own capital |
||||
Dona Francisca Energética |
72 | 955 | 72 | 955 |
Sanepar |
- | - | 7,787 | 4,896 |
72 | 955 | 7,859 | 5,851 | |
Subsidiaries | ||||
Dividends and/or interest on own capital |
||||
Copel Geração e Transmissão |
767,318 | 510,952 | - | - |
Copel Distribuição |
355,968 | 355,968 | - | - |
Copel Telecomunicações |
10,474 | 10,474 | - | - |
Compagas |
5,751 | 4,910 | - | - |
Centrais Eólicas do Paraná |
2,188 | 1,920 | - | - |
Dominó Holdings |
7,479 | 4,644 | - | - |
1,149,178 | 888,868 | - | - | |
Financing tranferred - STN |
||||
Copel Distribution (13.1) |
50,858 | 56,675 | - | - |
50,858 | 56,675 | - | - | |
Loan contract |
||||
Copel Distribution (13.2) |
747,241 | 715,539 | - | - |
Elejor (13.3) |
312,007 | 295,788 | - | - |
1,059,248 | 1,011,327 | - | - | |
Other related parties | ||||
Paineira Participações e Empreendimentos |
- | - | - | 1,575 |
- | - | - | 1,575 | |
2,259,356 | 1,957,825 | 7,859 | 7,426 | |
Current assets - Dividends receivable | 1,149,250 | 889,823 | 7,859 | 5,851 |
Non current assets | 1,110,106 | 1,068,002 | - | 1,575 |
13.1 Financing transferred – STN
The Company transferred loans and financing to its wholly owned subsidiaries at the time of constitution in 2001. However, since the contracts for the transfers to the respective subsidiaries were not formalized with the financial institutions, they also remain registered in the parent company.
This financing is transferred and incurs the same charges assumed by the Company and is reported separately, as receivable from the wholly owned subsidiaries, and as liabilities for loans and financing in the subsidiaries (Note 19.2).
13.2 Loan Contract - Copel Distribuição
On February 27, 2007, Aneel approved the loan contract agreed between the Company (lender) and Copel Distribution (borrower), for the amount of R$ 1,100,000. The loan is for a period of five years, bearing interest of 104% of the DI rate, and the funds were allocated to the concession investment program and payment of the debentures transferred to Copel Distribuição, which matured on March 01, 2007.
30
13.3 Loan Contract – Elejor
On April 07, 2004, a loan contract was signed between Copel (lender) and Elejor (borrower), for the purpose of guaranteeing the continuity of the project to construct Usinas Hidrelétricas do Complexo Energético Fundão - Santa Clara, with amortization in 120 monthly consecutive installments, plus pro rata temporis interest, equivalent to 3.198% per annum, and a spread based on the variation in the CDI, as from the date of each transfer. The grace period for the loan was extended to February 2016, in accordance with the Second Amendment to the Shareholders’ Agreement on April 18, 2005.
14 INVESTMENTS |
14.1 Main information about Copel’s investees
6.30.2011 | Main activity |
Assets (1) | Liabilities (1) | Shareholders' equity (1) |
Revenues | Net income (loss) (1) |
Part. Group % |
Cia. Saneamento do Paraná - Sanepar | Basic sanitation | 2,408,389 | 1,443,192 | 965,197 | 377,595 | 65,953 | 34.75 |
Sercomtel S.A. - Telecom. | Telecomunications | 277,022 | 109,597 | 167,425 | 70,560 | 6,393 | 45.00 |
Foz do Chopim Energética Ltda. | Energy | 49,180 | 2,681 | 46,499 | 17,672 | 14,832 | 35.77 |
Dona Francisca Energética S. A. | Energy | 294,044 | 65,655 | 228,389 | 32,770 | 16,621 | 23.03 |
Sercomtel Celular S.A. | Telecomunications | 11,233 | 33,774 | - | 14,088 | (2,980) | 45.00 |
Dois Saltos Empreend. de Ger. de Energia Elétrica Ltda. | Energy | 1,350 | 350 | 1,000 | - | - | 30.00 |
Copel Amec S/C Ltda. | Serv. and consulting | 335 | 2 | 333 | - | 9 | 48.00 |
Carbocampel S.A. | Serv. and consulting | 3,553 | 1,084 | 2,469 | - | (26) | 49.00 |
Escoelectric Ltda. | Serv. and consulting | 2,553 | 5,271 | (2,718) | - | (71) | 40.00 |
(1) Balances adjusted to accounting practices |
14.1.1 Sanepar
In 1998, the acquisition of shares in Sanepar by Dominó Holdings S.A. generated the concession right for the total amount of R$ 24,316, which at June 30, 2011 reported a balance of R$ 4,188. Copel’s proportional investment (45%), in this balance corresponded to R$ 2,006 and is being amortized over 15 years, as from 1999, at the rate of R$ 61 per month, and the amount registered to profit/loss for the first quarter of 2011, was R$ 364 (R$ 365 as of June 30, 2010).
14.1.2 Sercomtel
The impairment testing of the Company’s assets, which was concluded in December 2009, adopted, when applicable, the same assumptions stated in the note on property, plant and equipment (Note 15.5) and identified, with a reasonable level of assurance, that the assets tied to the associated company Sercomtel S.A. Telecomunicações were stated above their recoverable values of R$ 35,927 and in Sercomtel Celular S.A. R$ 6,195. In 2010, the methodology was applied again, and the need to reverse the loss in Sercomtel S.A. Telecomunicações for the amount of R$ 23,390 was identified. There were no alterations during the semester.
14.2 Main information about the controlled companies
Copel’s wholly owned subsidiaries are: Copel Geração e Transmissão S.A., Copel Distribuição S.A. and Copel Telecomunicações S.A.
31
The other companies controlled by Copel are: Companhia Paranaense de Gás - Compagas (51% Copel), Elejor - Centrais Elétricas do Rio Jordão S.A. (70% Copel), UEG Araucária Ltda. (20% Copel and 60% Copel Geração e Transmissão), Centrais Eólicas do Paraná Ltda. (30% Copel and 70% Copel Geração e Transmissão).
On December 28, 2006, UEG Araucária agreed the “Contract for Leases and Other Agreements” with Petróleo Brasileiro S.A. - Petrobras, a non controlling partner, for the leasing of plant, extended in various stages until December 31, 2011, with clauses that provide for the possibility of anticipated rescission by UEG Araucária, in the event it participates in energy auctions organized by Aneel. This contract provides for the use, by Petrobras, of the Plant Complex for generating energy at its own expense, with UEG Araucária entitled to the lease income consisting of fixed and variable installments defined in the contract.
14.3 Main information on the joint venture
14.3.1 Dominó Holdings S.A.
This is a closed corporate entity, in which Copel holds a 45% investment in the joint venture with other shareholders. Its corporate activities include investing in other companies. It currently holds 34.75% of the capital of Companhia de Saneamento do Paraná – Sanepar, a mixed economy entity, whose corporate activities include exploiting basic sanitation services, mainly the distribution of water, collection and treatment of sanitary sewage.
The main items of assets, liabilities, and the statement of operations of Dominó Holdings, as well as the corresponding consolidated shares, are shown below:
Dominó Holdings S.A. | Balance as of 6.30.2011 | |
Adjusted balance (1) | Share (45%) | |
Assets | 773,891 | 348,251 |
Current assets | 24,331 | 10,949 |
Noncurrent assets | 749,560 | 337,302 |
Liabilities | 773,891 | 348,251 |
Current liabilities | 21,228 | 9,553 |
Noncurrent liabilities | 7 | 3 |
Shareholders' equity | 752,656 | 338,695 |
Statement of income | ||
Operational expenses | (1,503) | (676) |
Financial income | (1,750) | (788) |
Equity in income of subsidiaries | 50,927 | 22,917 |
Net income for the period | 47,674 | 21,453 |
(1) Balances adjusted to accounting practices |
14.4 Financial statements of subsidiaries and the joint venture
Presented below are the balance sheets and statements of income at June 30, 2011, reclassified for purposes of standardizing the plan of accounts and the effects from adopting the new accounting practices adopted in Brazil. In order to analyze the results by nature of expense, the operational costs and expenses have been aggregated for presentation purposes:
32
ASSETS 6.30.2011 |
GET | DIS | TEL | COM | ELE | UEG | CEO | DOM |
Total Assets | 8,692,375 | 7,324,605 | 329,953 | 264,833 | 767,901 | 649,163 | 11,055 | 348,251 |
Current Assets | 1,623,007 | 2,247,831 | 55,680 | 64,908 | 33,340 | 145,539 | 9,871 | 10,949 |
Cash and cash equivalents | 1,166,790 | 665,928 | 1,956 | 30,467 | 14,361 | 139,930 | 9,535 | 1,569 |
Bonds and securities | 111,591 | 52,885 | - | - | 772 | 27 | - | - |
Restricted financial investments - Pledges and related deposits | 2 | 201 | - | 234 | - | - | - | - |
Trade account receivable | 194,198 | 1,183,826 | 32,457 | 30,699 | 16,959 | - | 111 | - |
Dividends receivable | 5,106 | - | - | - | - | - | - | 7,787 |
CRC transferred to the State Government of Paraná | - | 61,649 | - | - | - | - | - | - |
Accounts Receivable related to concession | 66,563 | - | - | - | - | - | - | - |
Other receivables | 52,460 | 126,099 | 1,832 | 1,247 | 1,135 | 2,954 | - | 2 |
Inventories | 22,729 | 92,737 | 16,606 | 1,366 | - | - | - | - |
Income tax and social contribution | 2,133 | 21,976 | 13 | 1 | - | 2,619 | 222 | 1,576 |
Other current taxes recoverable | 713 | 32,581 | 2,744 | 564 | - | 9 | - | - |
Prepaid expenses | 722 | 9,949 | 72 | 330 | 113 | - | 3 | 15 |
Noncurrent Assets | 7,069,368 | 5,076,774 | 274,273 | 199,925 | 734,561 | 503,624 | 1,184 | 337,302 |
Long Term Assets | 1,019,966 | 3,794,301 | 17,366 | 27,499 | 12,269 | 16,843 | - | 97 |
Financial investments | - | 25,679 | - | 1,933 | - | - | - | - |
Trade account receivable | - | 43,816 | - | 13,167 | - | - | - | - |
CRC transferred to the State Government of Paraná | - | 1,288,387 | - | - | - | - | - | - |
Judicial deposits | 18,511 | 156,740 | 647 | 215 | 106 | 249 | - | 97 |
Accounts Receivable related to concession | 884,166 | 1,862,696 | - | - | - | - | - | - |
Advance to suppliers | - | - | - | 11,017 | - | - | - | - |
Other receivables | 1,878 | 3,228 | - | 164 | - | - | - | - |
Income tax and social contribution | - | - | - | - | - | 13,061 | - | - |
Other current taxes recoverable | 1,080 | 63,839 | 9,029 | - | - | 3,533 | - | - |
Deferred income tax and social contribution | 114,331 | 349,916 | 7,690 | 1,003 | 12,163 | - | - | - |
Investments | 389,427 | 4,232 | - | - | - | - | - | 337,205 |
Property, plant and equipment | 5,622,140 | - | 242,910 | - | 503,356 | 486,677 | 1,184 | - |
Intangible assets | 37,835 | 1,278,241 | 13,997 | 172,426 | 218,936 | 104 | - | - |
LIABILITIES 6.30.2011 |
GET | DIS | TEL | COM | ELE | UEG | CEO | DOM |
TOTAL LIABILITIES | 8,692,375 | 7,324,605 | 329,953 | 264,833 | 767,901 | 649,163 | 11,055 | 348,251 |
CURRENT LIABILITIES | 1,228,375 | 1,520,460 | 38,302 | 57,383 | 50,787 | 3,524 | 7,336 | 9,553 |
Payroll, social charges and accruals | 49,943 | 130,139 | 12,422 | 3,694 | 154 | 91 | - | 1 |
Suppliers | 190,614 | 438,418 | 11,328 | 35,171 | 4,057 | 2,800 | 6 | 8 |
Income tax and social contribution | 110,291 | 77,911 | 84 | 1,461 | 417 | - | - | - |
Other tax liabilities | 16,606 | 222,506 | 2,754 | 2,357 | 1,339 | 611 | 36 | 2,065 |
Loans and financing | 47,123 | 17,629 | - | 3,188 | - | - | - | - |
Dividends payable | 767,318 | 355,968 | 10,474 | 11,277 | - | - | 7,294 | 7,479 |
Post employment benefits | 6,582 | 16,827 | 1,132 | - | - | - | - | - |
Customer charges payable | 4,623 | 75,851 | - | - | - | - | - | - |
Research and development and energy efficiency | 12,242 | 130,232 | - | - | 3,435 | 10 | - | - |
Payable related to concession - use of public property | 391 | - | - | - | 40,984 | - | - | - |
Other accounts payable | 22,642 | 54,979 | 108 | 235 | 401 | 12 | - | - |
NON CURRENT LIABILITIES | 1,789,321 | 2,198,050 | 32,505 | 7,849 | 646,816 | 3,441 | - | 3 |
Associated and subsidiary companies | - | 747,241 | 15,500 | - | 312,007 | - | - | - |
Suppliers | 140,655 | - | - | - | - | - | - | - |
Tax liabilities | - | - | - | - | - | 388 | - | - |
Deferred income tax and social contribution | 819,001 | 51,122 | - | 6,268 | - | - | - | - |
Loans and financing | 447,960 | 684,207 | - | - | - | - | - | - |
Post employment benefits | 109,891 | 276,017 | 16,618 | 1,165 | - | - | - | - |
Research and development and energy efficiency | 31,564 | 87,864 | - | - | - | - | - | - |
Payable related to concession - use of public property | 24,010 | - | - | - | 334,464 | - | - | - |
Other accounts payable | - | - | - | 16 | - | - | - | - |
Provisions for legal claims | 216,240 | 351,599 | 387 | 400 | 345 | 3,053 | - | 3 |
SHAREHOLDERS' EQUITY | 5,674,679 | 3,606,095 | 259,146 | 199,601 | 70,298 | 642,198 | 3,719 | 338,695 |
Capital | 3,505,994 | 2,624,841 | 194,755 | 135,943 | 69,450 | 707,440 | 3,061 | 113,368 |
Capital reserve | - | - | - | - | 38,405 | - | - | - |
Equity evaluation Adjustments | 1,499,168 | 11,495 | - | - | - | - | - | 4,627 |
Legal reserve | 182,162 | 108,500 | 3,521 | 14,636 | - | - | - | 15,703 |
Profit retention reserve Reserva de retenção de lucros | 145,364 | 570,007 | 43,086 | 31,172 | - | - | - | 16,414 |
Unrealized revenue reserve | - | - | - | - | - | - | - | 191,899 |
Accumulated profits (losses) | 341,991 | 291,252 | 17,784 | 17,850 | (37,557) | (65,242) | 658 | (3,316) |
33
STATEMENT OF INCOME 6.30.2011 |
GET | DIS | TEL | COM | ELE | UEG | CEO | DOM |
OPERATIONAL INCOME | 953,061 | 2,597,513 | 76,451 | 134,453 | 94,386 | 14,871 | 365 | - |
Eletricity sales to final customers | 49,309 | 1,108,259 | - | - | - | - | - | - |
Eletricity sales to distributors | 686,749 | 33,606 | - | - | 94,386 | - | 365 | - |
Availability of grid system | 146,551 | 1,216,467 | - | - | - | - | - | - |
Construction income | 54,490 | 212,762 | - | 9,203 | - | - | - | - |
Telecommunications | - | - | 76,451 | - | - | - | - | - |
Distribution of piped gas | - | - | - | 124,143 | - | - | - | - |
Leasing and rents | 609 | 27,699 | - | - | - | 16,423 | - | - |
Other operating income | 15,353 | (1,280) | - | 1,107 | - | (1,552) | - | - |
OPERATING COSTS AND EXPENSES | (553,052) | (2,297,671) | (50,448) | (109,326) | (45,277) | (24,601) | (147) | (676) |
Energy purchased for resale | (35,876) | (1,151,566) | - | - | (755) | - | - | - |
Charges from use of grid system | (91,486) | (241,019) | - | - | (4,942) | (5,848) | - | - |
Personnel and management | (103,797) | (280,045) | (24,819) | (7,594) | (955) | (413) | - | (10) |
Private pension and healthcare plans | (15,743) | (44,115) | (3,017) | (505) | - | - | - | - |
Materials | (6,843) | (30,903) | (827) | (738) | (123) | (46) | - | (1) |
Raw material and supplies - energy porduction | (12,400) | - | - | - | - | (968) | - | - |
Natural gas and supplies - gas operations | - | - | - | (78,082) | - | - | - | - |
Third parties services | (37,553) | (144,164) | (8,132) | (5,087) | (4,130) | (2,468) | (32) | (285) |
Depreciation and amortization | (128,863) | (93,946) | (11,455) | (6,279) | (14,020) | (14,476) | (104) | (365) |
Provisions and reversals | (1,382) | (52,482) | 393 | (17) | - | - | - | - |
Construction costs | (53,605) | (212,762) | - | (9,203) | - | - | - | - |
Other operational costs and expenses | (65,504) | (46,669) | (2,591) | (1,821) | (20,352) | (382) | (11) | (15) |
EQUITY IN INCOME OF SUBSIDIARIES | (758) | - | - | - | - | - | - | 22,917 |
PROFIT BEFORE FINANCIAL RESULTS AND TAXES | 399,251 | 299,842 | 26,003 | 25,127 | 49,109 | (9,730) | 218 | 22,241 |
Financial income | 55,297 | 145,055 | 875 | 2,224 | (52,595) | 7,699 | 496 | (788) |
OPERATIONAL PROFIT | 454,548 | 444,897 | 26,878 | 27,351 | (3,486) | (2,031) | 714 | 21,453 |
Income tax and social contribution | (168,905) | (246,034) | (10,356) | (10,568) | (3,242) | - | (56) | - |
Deferred income tax and social contribution | 14,821 | 92,389 | 1,262 | 1,067 | 4,439 | - | - | - |
PROFIT (LOSS) FOR THE PERIOD | 300,464 | 291,252 | 17,784 | 17,850 | (2,289) | (2,031) | 658 | 21,453 |
34
14.5 Consolidated income statement segregated by company
Aiming to enable analysis of outcome by type of expenditure, costs and expenses are presented in aggregate form. These statements represent the result of the activities of the first quarter of 2011, excluding revenue from the equity of subsidiaries.
Income Statement 6.30.2011 |
GET | DIS | TEL | COM | ELE | UEG | Others | Holding | Eliminations and non controlling interests |
Consolidated |
O PERATIO NAL INCO ME | 953,061 | 2,597,513 | 76,451 | 134,453 | 94,386 | 14,871 | 365 | - | (202,562) | 3,668,538 |
Eletricity sales to final customers | 49,309 | 1,108,259 | - | - | - | - | - | - | (2,859) | 1,154,709 |
Eletricity sales to distributors | 686,749 | 33,606 | - | - | 94,386 | - | 365 | - | (135,851) | 679,255 |
Availability of grid system | 146,551 | 1,216,467 | - | - | - | - | - | - | (40,889) | 1,322,129 |
Construction income | 54,490 | 212,762 | - | 9,203 | - | - | - | - | - | 276,455 |
Telecomunications | - | - | 76,451 | - | - | - | - | - | (19,436) | 57,015 |
Distribution of piped gas | - | - | - | 124,143 | - | - | - | - | - | 124,143 |
Lease and rents | 609 | 27,699 | - | - | - | 16,423 | - | - | (582) | 44,149 |
Other operating revenue | 15,353 | (1,280) | - | 1,107 | - | (1,552) | - | - | (2,945) | 10,683 |
O PERATING COSTS AND EXPENSES | (553,052) | (2,297,671) | (50,448) | (109,326) | (45,277) | (24,601) | (823) | (7,944) | 202,562 | (2,886,580) |
Energy purchased for resale | (35,876) | (1,151,566) | - | - | (755) | - | - | - | 135,851 | (1,052,346) |
Charges from use of grid system | (91,486) | (241,019) | - | - | (4,942) | (5,848) | - | - | 40,889 | (302,406) |
Personnel and management | (103,797) | (280,045) | (24,819) | (7,594) | (955) | (413) | (10) | (4,236) | - | (421,869) |
Private pension and health plans | (15,743) | (44,115) | (3,017) | (505) | - | - | - | (323) | - | (63,703) |
Materials | (6,843) | (30,903) | (827) | (738) | (123) | (46) | (1) | (26) | - | (39,507) |
Raw material and supplies - energy production | (12,400) | - | - | - | - | (968) | - | - | - | (13,368) |
Natural gas and supplies - gas operations | - | - | - | (78,082) | - | - | - | - | - | (78,082) |
Third parties services | (37,553) | (144,164) | (8,132) | (5,087) | (4,130) | (2,468) | (317) | (2,368) | 25,240 | (178,979) |
Depreciation and amortization | (128,863) | (93,946) | (11,455) | (6,279) | (14,020) | (14,476) | (469) | (377) | - | (269,885) |
Provisions and reversals | (1,382) | (52,482) | 393 | (17) | - | - | - | 7,188 | - | (46,300) |
Construction cost | (53,605) | (212,762) | - | (9,203) | - | - | - | - | - | (275,570) |
Compensation for use of water resources | (58,397) | - | - | - | (2,927) | - | - | - | - | (61,324) |
Losses in the decommissioning and disposal of assets | (323) | (6,981) | - | - | (16,765) | - | - | - | - | (24,069) |
Other costs and operational expenses | (6,784) | (39,688) | (2,591) | (1,821) | (660) | (382) | (26) | (7,802) | 582 | (59,172) |
EQUITY IN INCOME O F SUBSIDIARIES | - | - | - | - | - | - | 22,917 | 11,965 | - | 34,882 |
PRO FIT BEFO RE FINANCIAL RESULTS AND TAXES | 400,009 | 299,842 | 26,003 | 25,127 | 49,109 | (9,730) | 22,459 | 4,021 | - | 816,840 |
Financial income | 55,297 | 145,055 | 875 | 2,224 | (52,595) | 7,699 | (292) | (11,124) | - | 147,139 |
O PERATIO NAL PROFIT | 455,306 | 444,897 | 26,878 | 27,351 | (3,486) | (2,031) | 22,167 | (7,103) | - | 963,979 |
Income tax and social contribution | (168,905) | (246,034) | (10,356) | (10,568) | (3,242) | - | (56) | - | - | (439,161) |
Deferred income tax and social income | 14,821 | 92,389 | 1,262 | 1,067 | 4,439 | - | - | 3,516 | - | 117,494 |
PRO FIT (LOSS) FOR THE PERIOD | 301,222 | 291,252 | 17,784 | 17,850 | (2,289) | (2,031) | 22,111 | (3,587) | - | 642,312 |
35
14.6 Changes in investments
Parent Company | Balance as of 12.31.2010 |
Shareholders' Equity |
Equity evaluation adjustments |
Investment and Afac (1) |
Amortization of concession rights |
Proposed dividends and JCP |
Balance as of 6.30.2011 |
Associated companies | |||||||
Sercomtel Telecom. - NE nº 14.1.2 |
72,464 | 2,878 | - | - | - | - | 75,342 |
Dona Francisca Energética |
50,161 | 3,828 | - | - | - | (1,444) | 52,545 |
Foz do Chopim Energética |
17,086 | 5,306 | - | - | - | (5,759) | 16,633 |
Carbocampel |
1,224 | (14) | - | 110 | - | - | 1,320 |
Dois Saltos Empreend. |
300 | - | - | - | - | - | 300 |
Copel Amec |
156 | 4 | - | - | - | - | 160 |
Escoelectric |
37 | (37) | - | - | - | - | - |
141,428 | 11,965 | - | 110 | - | (7,203) | 146,300 | |
Investees | |||||||
Copel Geração e Transmissão |
5,726,083 | 300,464 | - | - | - | (351,868) | 5,674,679 |
Copel Distribuição |
3,316,811 | 291,252 | (1,968) | - | - | - | 3,606,095 |
Copel Telecomunicações |
241,362 | 17,784 | - | 15,500 | - | - | 274,646 |
UEG Araucária |
128,846 | (406) | - | - | - | - | 128,440 |
Compagas |
99,286 | 9,103 | - | - | - | (6,592) | 101,797 |
Elejor |
115,795 | (1,603) | - | (45,940) | (377) | - | 67,875 |
Centrais Eólicas do Paraná |
1,185 | 199 | - | - | - | (268) | 1,116 |
9,629,368 | 616,793 | (1,968) | (30,440) | (377) | (358,728) | 9,854,648 | |
Joint ventures |
|||||||
Dominó Holdings |
325,342 | 21,453 | - | - | - | (8,100) | 338,695 |
325,342 | 21,453 | - | - | - | (8,100) | 338,695 | |
Other investments |
|||||||
Finam (2) |
2,456 | - | - | - | - | - | 2,456 |
Finor (3) |
769 | - | - | - | - | - | 769 |
Investco S.A. |
7,903 | - | - | - | - | - | 7,903 |
Other investments |
1,344 | - | - | - | - | - | 1,344 |
12,472 | - | - | - | - | - | 12,472 | |
10,108,610 | 650,211 | (1,968) | (30,330) | (377) | (374,031) | 10,352,115 | |
(1) Afac - Advance for future capital increase | |||||||
(2) Amazon investment fund - Finam | |||||||
(3) Northeast investment fund - Finor |
36
Parent Company | Balance as of 12.31.2009 |
Shareholders' equity |
Investment and Afac |
Amortization of concession rights |
Proposed dividens and JCP |
Right off | Balance as of 6.30.2010 |
Associated companies | |||||||
Sercomtel - Telecomunicações |
39,863 | 2,420 | - | - | - | - | 42,283 |
Dona Francisca |
19,616 | 30,199 | - | - | (2,331) | - | 47,484 |
Foz do Chopim |
16,616 | 4,965 | - | - | (5,258) | - | 16,323 |
Carbocampel |
1,117 | 35 | 83 | - | - | - | 1,235 |
Dois Saltos Empreend. |
300 | - | - | - | - | - | 300 |
Copel Amec |
154 | 3 | - | - | - | - | 157 |
Escoelectric |
(679) | 424 | 63 | - | - | - | (192) |
76,987 | 38,046 | 146 | - | (7,589) | - | 107,590 | |
Investees |
|||||||
Copel Geração e Transmissão |
5,783,192 | 276,063 | - | - | (435,433) | - | 5,623,822 |
Copel Distribuição |
3,051,476 | 201,923 | - | - | (95,213) | - | 3,158,186 |
Copel Telecomunicações |
221,722 | 14,342 | - | - | (2,265) | - | 233,799 |
UEG Araucária |
130,253 | (3,082) | - | - | - | - | 127,171 |
Compagas |
95,211 | 11,166 | - | - | (887) | - | 105,490 |
Elejor |
35,277 | 10,362 | 126,000 | (377) | - | - | 171,262 |
Centrais Eólicas do Paraná |
1,153 | 161 | - | - | (235) | - | 1,079 |
9,318,284 | 510,935 | 126,000 | (377) | (534,033) | - | 9,420,809 | |
Joint ventures |
|||||||
Dominó Holdings |
309,756 | 15,794 | - | - | (3,667) | - | 321,883 |
309,756 | 15,794 | - | - | (3,667) | - | 321,883 | |
Other investments |
|||||||
Finam |
2,456 | - | - | - | - | - | 2,456 |
Finor |
858 | - | - | - | - | - | 858 |
Investco S.A. |
7,903 | - | - | - | - | - | 7,903 |
Other investments |
2,412 | - | - | - | - | (6) | 2,406 |
13,629 | - | - | - | - | (6) | 13,623 | |
9,718,656 | 564,775 | 126,146 | (377) | (545,289) | (6) | 9,863,905 |
37
Consolidated | Balance as of 12.31.2010 |
Shareholders' equity |
Investment and Afac |
Amortization of concession rights |
Proposed dividends and JCP |
Balance as of 6.30.2011 |
Associated companies | ||||||
Sanepar |
323,814 | 22,917 | - | (364) | (9,162) | 337,205 |
Sercomtel - Telecomunicações |
72,464 | 2,878 | - | - | - | 75,342 |
Dona Francisca |
50,161 | 3,828 | - | - | (1,444) | 52,545 |
Foz do Chopim |
17,086 | 5,306 | - | - | (5,759) | 16,633 |
Carbocampel |
1,224 | (14) | 110 | - | - | 1,320 |
Dois Saltos Empreend. |
300 | - | - | - | - | 300 |
Copel Amec |
156 | 4 | - | - | - | 160 |
Escoelectric |
37 | (37) | - | - | - | - |
465,242 | 34,882 | 110 | (364) | (16,365) | 483,505 | |
Other investments | ||||||
Finam |
2,456 | - | - | - | - | 2,456 |
Finor |
769 | - | - | - | - | 769 |
Investco S.A. |
7,903 | - | - | - | - | 7,903 |
Assets allocated for future use |
4,538 | - | - | - | - | 4,538 |
Other investments |
2,542 | - | 1 | - | - | 2,543 |
18,208 | - | 1 | - | - | 18,209 | |
483,450 | 34,882 | 111 | (364) | (16,365) | 501,714 |
Consolidated | Balance as of 12.31.2009 |
Shareholders' equity |
Investment and Afac |
Proposed dividends and JCP |
Amortization of concession rights |
Others | Balance as of 6.30.2010 |
Investees | |||||||
Sanepar |
308,243 | 16,823 | - | (4,333) | (365) | - | 320,368 |
Dona Francisca |
19,616 | 30,199 | - | (2,331) | - | - | 47,484 |
Sercomtel - Telecomunicações |
39,863 | 2,420 | - | - | - | - | 42,283 |
Foz do Chopim |
16,616 | 4,965 | - | (5,258) | - | - | 16,323 |
Carbocampel |
1,117 | 35 | 83 | - | - | - | 1,235 |
Dois Saltos Empreend. |
300 | - | - | - | - | - | 300 |
Copel Amec |
154 | 3 | - | - | - | - | 157 |
Escoelectric |
(679) | 424 | 63 | - | - | - | (192) |
385,230 | 54,869 | 146 | (11,922) | (365) | - | 427,958 | |
Other investments | |||||||
Finam |
2,456 | - | - | - | - | - | 2,456 |
Finor |
858 | - | - | - | - | - | 858 |
Investco S.A. |
7,903 | - | - | - | - | - | 7,903 |
Assets allocated for future use |
5,596 | - | - | - | - | (15) | 5,581 |
Other investments |
3,610 | - | 2 | - | - | (6) | 3,606 |
20,423 | - | 2 | - | - | (21) | 20,404 | |
405,653 | 54,869 | 148 | (11,922) | (365) | (21) | 448,362 |
38
15 PROPERTY, PLANT AND EQUIPMENT |
15.1 Asset in service by account nature
Consolidated | Cost | Accumulated depreciation | Fixed assets in use, net |
6.30.2011 | |||
Machinery and equipment | 4,370,650 | (2,169,723) | 2,200,927 |
Reservoirs, dams and acqueducts | 7,122,453 | (4,136,017) | 2,986,436 |
Buildings | 1,382,448 | (921,381) | 461,067 |
Land | 182,322 | - | 182,322 |
Vehicules | 35,894 | (27,115) | 8,779 |
Furniture and implements | 11,043 | (8,174) | 2,869 |
13,104,810 | (7,262,410) | 5,842,400 | |
Consolidated | Cost | Accumulated depreciation | Fixed assets in use, net |
12.31.2010 | |||
Machinery and equipment | 4,388,067 | (2,103,285) | 2,284,782 |
Reservoirs, dams and acqueducts | 7,122,207 | (4,059,368) | 3,062,839 |
Buildings | 1,381,957 | (905,487) | 476,470 |
Land | 182,322 | - | 182,322 |
Vehicules | 32,043 | (25,951) | 6,092 |
Furniture and implements | 11,097 | (8,367) | 2,730 |
13,117,693 | (7,102,458) | 6,015,235 |
15.2 Fixed Asset by company
Consolidated | Cost | Accumulated depreciation | Net fixed assets |
6.30.2011 | |||
In service | |||
Copel Geração e Transmissão |
11,460,341 | (6,721,243) | 4,739,098 |
Copel Telecomunicações |
405,663 | (266,028) | 139,635 |
Elejor |
587,513 | (93,998) | 493,515 |
UEG Araucária |
647,164 | (178,196) | 468,968 |
Centrais Eólicas do Paraná |
4,129 | (2,945) | 1,184 |
13,104,810 | (7,262,410) | 5,842,400 | |
In progress |
|||
Copel Geração e Transmissão |
883,042 | - | 883,042 |
Copel Telecomunicações |
103,275 | - | 103,275 |
Elejor |
9,841 | - | 9,841 |
UEG Araucária |
17,709 | - | 17,709 |
1,013,867 | - | 1,013,867 | |
14,118,677 | (7,262,410) | 6,856,267 |
39
Consolidated | Cost | Accumulated depreciation | Net fixed assets |
12.31.2010 | |||
In service | |||
Copel Geração e Transmissão |
11,452,043 | (6,592,462) | 4,859,581 |
Copel Telecomunicações |
407,446 | (256,316) | 151,130 |
Elejor |
606,907 | (87,101) | 519,806 |
UEG Araucária |
647,168 | (163,738) | 483,430 |
Centrais Eólicas do Paraná |
4,129 | (2,841) | 1,288 |
Dominó Holdings |
- | - | - |
13,117,693 | (7,102,458) | 6,015,235 | |
In progress |
|||
Copel Geração e Transmissão |
567,606 | - | 567,606 |
Copel Telecomunicações |
71,161 | - | 71,161 |
Elejor |
9,943 | - | 9,943 |
648,710 | - | 648,710 | |
13,766,403 | (7,102,458) | 6,663,945 |
Under Articles 63 and 64 of Decree no. 41,019, dated February 26, 1957, the assets and facilities mostly used in the generation of energy are related to these services and cannot be retired, sold, or motgaged without the prior written approved of the ANEEL. ANEEL Resolution no. 20/1999 establishes the procedures for assets to be retired or sold and determines that the proceeds from the sales of assets which are no longer useful to the concessions should be deposited in a restricted bank account to be invested in the concession. For the concession contracts of the Use of Public Property – UBP, the restrictions on the use of the infrastructure are established in article 19, of ANEEL Decree number 2003/96.
15.3 Changes in property, plant and equipment
Fixed asset | |||
Balances | in service | in progress | Consolidated |
As of December 31, 2010 | 6,015,235 | 648,710 | 6,663,945 |
Investment program | - | 363,894 | 363,894 |
Investment program - to pay | - | 6,176 | 6,176 |
Fixed assets for projects | 9,401 | (9,401) | - |
Transfers from account receivable related to concession | 220 | - | 220 |
Provision for contingencies | - | 4,884 | 4,884 |
Depreciation quotas to profit and loss | (164,884) | - | (164,884) |
Depreciation quotas - Pasep/Cofins credits | (675) | - | (675) |
Write off | (16,897) | (396) | (17,293) |
As of June 30, 2011 | 5,842,400 | 1,013,867 | 6,856,267 |
Fixed asset | |||
Balances | in service | in progress | Consolidated |
As of December 31, 2009 | 6,284,238 | 375,410 | 6,659,648 |
Investment program | - | 143,872 | 143,872 |
Investment program - to pay | - | 12,572 | 12,572 |
Fixed assets for projects | 64,947 | (64,947) | - |
Depreciation quotas to profit and loss | (173,330) | - | (173,330) |
Write off | (714) | (544) | (1,258) |
As of June 30, 2010 | 6,175,141 | 466,363 | 6,641,504 |
40
15.4 Depreciation rates
Depreciation rates (%) | ||
6.30.2011 | 12.31.2010 | |
Generation | ||
General equipment |
9.73 | 9.73 |
Generators |
3.09 | 3.09 |
Reservoirs, dams and headrace channel |
2.00 | 2.00 |
Hidraulic turbines |
2.47 | 2.47 |
Gas and steam turbines |
5.00 | 5.00 |
Water cooling and treatment facilities |
5.00 | 5.00 |
Gas conditioning equipament |
5.00 | 5.00 |
Central administration |
||
Buildings |
4.00 | 4.00 |
Office machinery and equipment |
10.00 | 10.00 |
Furniture and implements |
10.00 | 10.00 |
Vehicles |
20.00 | 20.00 |
Telecommunications |
||
Transmission equipment |
7.70 | 7.70 |
Terminal equipment |
10.50 | 10.50 |
Infrastructure |
6.30 | 6.30 |
When applicable, the Company uses the depreciation rates defined by the regulatory in light of the right to reimbursement at the end of the concession contract.
15.5 Impairment of assets
The Company’s practice is to evaluate and periodically monitor the impairment of its assets. Accordingly, and considering the ruling in Technical Pronouncement CPC 01/IAS 36 – Impairment of Assets, if there is clear evidence that the Company has assets that are registered for amounts that are not recoverable, or whenever events or changes in circumstances indicate that the book value may unrecoverable in the future, the Company must immediately account for such discrepancies by means of a provision for losses.
The time horizon for the analysis takes into consideration the maturity date of each concession.
The assumptions that sustain the conclusions of the impairment tests are presented in note 17.6 of the Annual financial statements at December 31, 2010. During the semester, there were no events that required new tests to be performed.
15.6 Consórcio Energético Cruzeiro do Sul - UHE Mauá
Consórcio Energético Cruzeiro do Sul, an independent power producer owned by Copel Geração e Transmissão (51%) and by Eletrosul Centrais Elétricas S.A. (49%), won, on October 10, 2006, at the ANEEL Auction of Power from New Projects 004/2006, the rights to build and run the Mauá Hydroelectric Power Plant, which will have installed potential of 361 MW, and is valid for 35 years, as from July 3, 2007, the date of signing the contract.
41
The facility’s total power output was sold at an ANEEL auction at a price of R$ 112.96/MWh, as of November 1, 2006, restated annually according to the variation of the IPCA inflation index, this tariff was R$ 134.09, at December 31, 2010. The company sold 192 average MW, for supply starting in January 2011 for 30 years. The assured power of the project, established in its concession agreement, was 197.7 average MW, after full motorization.
The enterprise will become operational at the beginning of 2012.
Due to the legal preliminary order in the ambit of Public Civil Action 1999.7001.007514-6 which caused a delay in the start-up of commercial generation of each one of the generating units, Copel is pegging the CCEARs (Contracts for Electric Power Trading) related to UHE Mauá to its own generation and to the power acquired in contracts in the Free Contracting Environment (ACL).
The costs incurred in this enterprise have been registered to fixed assets, in the proportion to the quota-part in the consortium. At June 30, 2011, the balance for fixed assets in progress for Copel Geração e Transmissão that refer to the enterprise amounted to R$ 592,278.
Total commitments assumed with suppliers of equipment and services that refer to UHE Mauá amounted to R$ 120,913 at June 30, 2011 (R$ 162,035 as of December 31, 2010).
Further information with respect to the consortium are presented in note 17.7 of the Annual Financial Statements at December 31, 2010.
15.7 Colíder Hydroelectric Power Plant
On July 30, 2010, through the new energy Auction number 003/10 by ANEEL, Copel Geração e Transmissão won the concession to exploit the Colíder hydroelectric plant, which will have installed potential of 300 MW, and the contract will be valid for a period of 35 years, as from January 17, 2011, the date of signing Concession Contract number 001/11–MME–UHE Colíder.
The total forecast investment for the project is approximately R$ 1,570,400, with this value at the base date July 2010.
The energy from the Colider Hydro electric plant was sold in the 10th Auction for New Energy (A-5) on July 30, 2010 at the final tariff of R$ 103.40/MWh, for the base date July 1, 2010. After correction using the variation in the IPCA, this tariff was equivalent to R$ 106.23, at December 31, 2010. A total of 125 MW average, was negotiated, to be supplied as from January 2015 for 30 years. The physical guarantee for the enterprise, established in the concession contract, is 179.6 MW average, after the complete motorization. The energy not negotiated in this auction will be sold on the market in the short term.
The total commitments assumed with suppliers of equipment and services for the UHE Colíder amounted to R$ 1,151,721 at June 30, 2011.
Further information with respect to the consortium are presented in note 17.8 of the Annual Financial Statements at December 31, 2010.
The service order that authorizes the start of the implementation works was signed on March 1, 2011 and the venture is in the execution stage of the 1st stage cofferdam.
42
15.8 Cavernoso II Small Hydropower Plant (SHP)
On August 26, 2010 at ANEEL Auction, number 07/10 ANEEL, Copel Geração e Transmissão S.A. sold the energy from River Cavernoso II SHP, an enterprise with 19 MW of installed capacity, located on the Cavernoso River, in the cities of Virmond and Candói, in the State of Paraná. As a result of this sale, it received authorization to build and exploit the enterprise, for a period of 35 years, as from February 28, 2011, the date of publication of ordance no. 133 issued on February 25, 2011 by the Ministry of Mines and Energy.
The enterprise is part of the Growth Accelerated Program - PAC, from the Federal Government, and will consist of a power house with installed potential of 19 MW, sufficient to attend approximately 50 thousand inhabitants.
The total forecast investment for the project is approximately R$ 120,000, with this value at the base date August 2010.
The energy from Cavernoso II SHP was sold at the final tariff of R$ 146.99/MWh, for the base date August 1, 2010. After correction using the variation of the IPCA, this tariff was equivalent to R$ 151,11, at December 31, 2010. A total of 7.73 MW average, was negotiated, to be supplied as from November 2012 for 30 years. The physical guarantee for the enterprise, established in the Ordinance 133 was published by the Ministry of Mines and Energy dated February 25, 2011 10.56 MW average. The energy not negotiated in Aneel auction 07/10 of August 26, 2010, will be sold on the market in the short term.
The total commitments assumed with suppliers of equipment and services for the PCH Cavernoso amounted to R$ 92,426 at June 30, 2011.
The service order that authorizes the start of the mobilization and consequent start of the works was signed on April 18, 2011 and the implementation is in the excavation stage of the deviation structures of the river.
43
16 INTANGIBLE ASSETS |
Right to use software |
Concession rights |
Concession contracts |
Accumulated amortization |
Other | Consolidated | ||
6.30.2011 | |||||||
In service | |||||||
Assets with finite useful life |
|||||||
Copel Geração e Transmissão |
3,082 | - | - | (2,116) | (1) | 43 | 1,009 |
Copel Distribuição (16.1) |
- | - | 3,714,549 | (2,783,500) | (2) | - | 931,049 |
Copel Telecomunicações |
6,476 | - | - | (3,798) | (1) | - | 2,678 |
Compagas (16.2) |
3,939 | - | 198,414 | (70,477) | (2) | - | 131,876 |
Elejor (16.3) |
- | - | 263,920 | (47,774) | (2) | - | 216,146 |
UEG Araucária |
191 | - | - | (87) | (1) | - | 104 |
Direito de concessão - Elejor (16.3) |
- | 22,626 | - | (3,960) | (2) | - | 18,666 |
13,688 | 22,626 | 4,176,883 | (2,911,712) | 43 | 1,301,528 | ||
Assets with indefinite useful life |
|||||||
Copel Geração e Transmissão |
- | - | - | - | 18 | 18 | |
Compagas |
- | - | - | - | 20 | 20 | |
- | - | - | - | 38 | 38 | ||
13,688 | 22,626 | 4,176,883 | (2,911,712) | 81 | 1,301,566 | ||
In progress |
|||||||
Copel Geração e Transm. (16.4) |
10,704 | - | 24,400 | - | 1,704 | 36,808 | |
Copel Distribuição (16.1) |
- | - | 642,712 | - | - | 642,712 | |
Copel Telecomunicações |
11,316 | - | - | - | 3 | 11,319 | |
Compagas |
- | - | 40,530 | - | - | 40,530 | |
Elejor |
- | - | - | - | 2,790 | 2,790 | |
22,020 | - | 707,642 | - | 4,497 | 734,159 | ||
Special Liabilities |
|||||||
Copel Distribuição (16.5) |
- | - | (434,586) | 139,066 | - | (295,520) | |
- | - | (434,586) | 139,066 | - | (295,520) | ||
1,740,205 | |||||||
(1) Anual amortization rate: 20% | |||||||
(2) Amortization over the concession period | |||||||
Right to use software |
Concession rights |
Concession contracts |
Accumulated amortization |
Others | Consolidated | ||
12.31.2010 | |||||||
In service | |||||||
Assets with finite useful life |
|||||||
Copel Geração e Transmissão |
2,287 | - | - | (1,984) | (1) | 43 | 346 |
Copel Distribuição (16.1) |
- | - | 3,675,078 | (2,675,783) | (2) | - | 999,295 |
Copel Telecomunicações |
4,067 | - | - | (3,659) | (1) | - | 408 |
Compagas (16.2) |
3,473 | - | 195,767 | (64,199) | (2) | - | 135,041 |
Elejor (16.3) |
- | - | 263,920 | (43,812) | (2) | 102 | 220,210 |
UEG Araucária |
190 | - | - | (72) | (1) | - | 118 |
Concession right - Elejor (16.3) |
- | 22,626 | - | (3,583) | (2) | - | 19,043 |
10,017 | 22,626 | 4,134,765 | (2,793,092) | 145 | 1,374,461 | ||
Assets with indefinite useful life |
|||||||
Copel Geração e Transmissão |
- | - | - | - | 18 | 18 | |
Compagas |
- | - | - | - | 20 | 20 | |
- | - | - | - | 38 | 38 | ||
10,017 | 22,626 | 4,134,765 | (2,793,092) | 183 | 1,374,499 | ||
In progress |
|||||||
Copel Geração e Transm. (16.4) |
11,591 | - | 22,249 | - | 1,222 | 35,062 | |
Copel Distribuição (16.1) |
- | - | 583,261 | - | - | 583,261 | |
Copel Telecomunicações |
12,476 | - | - | - | 3 | 12,479 | |
Compagas |
- | - | 34,440 | - | - | 34,440 | |
Elejor |
- | - | - | - | 2,790 | 2,790 | |
24,067 | - | 639,950 | - | 4,015 | 668,032 | ||
Special liabilities |
|||||||
Copel Distribuição (16.5) |
- | - | (406,333) | 112,756 | - | (293,577) | |
- | - | (406,333) | 112,756 | - | (293,577) | ||
1,748,954 | |||||||
(1) Anual amortization rate: 20% | |||||||
(2) Amortization over the concession period |
44
Changes in intangible assets
Balances | Concession contract | Others | Concession/ authorization (goodwill) |
Conoslidated | ||||
in service | in progress | special liabilities | in service | in progress | ||||
in service | in progress | |||||||
As of December 31, 2010 | 1,353,133 | 639,950 | (229,031) | (64,546) | 2,323 | 28,082 | 19,043 | 1,748,954 |
Investment program |
- | 321,894 | - | - | - | 2,120 | - | 324,014 |
Customers' financial participation |
- | - | - | (28,253) | - | - | - | (28,253) |
Aneel concession - use of public assets |
- | 3,999 | - | - | - | - | - | 3,999 |
Capitalizations - indemnifiable assets |
- | (190,452) | - | - | - | - | (190,452) | |
Capitalizations - intangible assets in service |
64,589 | (64,589) | (39,452) | 39,452 | 3,686 | (3,686) | - | - |
Amortization quotas - concession and authorization |
(128,884) | - | 24,973 | - | (348) | - | (377) | (104,636) |
Amortization of quotas - Pasep/Cofins credits |
(7,020) | - | 1,337 | - | (132) | - | - | (5,815) |
Write offs |
(4,346) | (1,312) | - | - | (101) | - | - | (5,759) |
Monetary variations |
- | (1,847) | - | - | - | - | - | (1,847) |
As of June 30, 2011 | 1,277,472 | 707,643 | (242,173) | (53,347) | 5,428 | 26,516 | 18,666 | 1,740,205 |
Balances | Concession Contract | Other | Concession/ authorization (goodwill) |
Consolidated | ||||
in service | in progress | special liabilities | in service | in progress | ||||
in service | in progress | |||||||
As of December 31, 2009 | 1,452,475 | 628,304 | (254,612) | (68,194) | 2,470 | 1,055 | 66,715 | 1,828,213 |
Investment program |
- | 348,472 | - | - | - | 20,743 | - | 369,215 |
Customers financial participation |
- | - | (44,181) | - | - | - | (44,181) | |
Aneel concession- use of public assets |
- | 950 | - | - | - | - | - | 950 |
Capitalizations - indemnifiable assets |
- | (258,652) | - | 25,456 | - | - | - | (233,196) |
Capitalizations - intangible assets in service |
95,130 | (95,130) | (9,119) | 9,119 | 147 | (147) | - | - |
Amortization of quotas - concession and authorization |
(122,044) | - | 22,570 | - | (131) | - | (1,550) | (101,155) |
Amortization of quotas - Pasep/Cofins credits |
(5,646) | - | 1,144 | - | - | - | - | (4,502) |
Write offs |
(20,333) | (996) | - | - | (238) | - | - | (21,567) |
Tranf. between intangible assets and assets allocated for future use |
- | 15 | - | - | - | - | - | 15 |
Monetary variations |
- | (291) | - | - | - | - | - | (291) |
As of June 30, 2010 | 1,399,582 | 622,672 | (240,017) | (77,800) | 2,248 | 21,651 | 65,165 | 1,793,501 |
16.1 Concession - Copel Distribuição
The intangible asset for the concession represents the right to exploit the construction services and the supply of energy services and will be recovered through consumption and consequent billing to customers.
ANEEL establishes the estimated useful economic life of each asset of the distribution infrastructure, for purposes of determining the tariff, and to calculate the indemnity value of the assets that are returned when the concession period expires. This estimate is reasonable and adequate for accounting and regulatory effects and represents the best estimates of the economic useful lives of the assets accepted by the market for this industry.
Amortization of intangible assets reflects the standard expectation for the future economic benefits of the asset to be consumed by Copel Distribuição, with expected average amortization of 15% per annum, limited to the concession period.
The residual value of each asset that exceeds the maturity period of the concession is allocated as accounts receivable related to the concession (Note 7).
16.2 Concession Contract – Compagas
Intangible assets for the construction of the infrastructure and acquisition of the assets necessary to provide the gas distribution services and the right to charge users for the supply of gas. The construction of the infrastructure and acquisition of the assets are considered as services rendered from the Conceding Power.
The amortization period for the intangible asset reflects the standard expectation for the future economic benefits of the asset to be consumed by Compagas.
45
Once the concession has expired, the assets tied to rendering the gas distribution services are reverted to the Conceding Power and Compagas will receive indemnity for the investments made based on the amortized reposition value, determined by an independent company, determined based on the amounts to be calculated at the time.
At June 30, 2011, based on the clauses in the concession contract that refer to the reversal of non depreciated assets, the Company does not have any accounts receivable related to the possible reversal of assets at the end of the concession period.
16.3 Concession Contract – Elejor
Concession Rights
The acquisition of the shares held by Triunfo Participações S.A., in December 18, 2003, resulted in total concession intangible asset of R$ 22,626, which corresponded to a balance of R$ 18,666 as of June 30, 2011 (R$ 19,043 as of December 31, 2010). The straight line method amortization of concession intangible asset was economically determined by the expected income from the commercial operation of the concession, which expires in October 2036, and its effect on the statement of operations as of June 30, 2011 was R$ 377 (R$ 377 as of June 30, 2010).
Concession Contract
Intangible assets that refers to the right to use of public property – UBP, under an onerous concession. These intangible assets is being amortized over the period of the concession contract and the liability is being amortized through payment (Note 24 – Contracts payable related to the concession - use of public asset).
16.4 Copel Geração e Transmissão
Intangible asset that refers to the right to use of public property – UBP, in the form of an onerous concession. These intangible asset is being amortized over the period of the concession contract and the liability is being amortized through payment (Note 24 – Contracts payable related to the concession - use of public asset).
At June 30, 2011 the Group had R$ 11,852 (R$ 10,926 as of December 31, 2010) registered for the Concession Contract - UHE – Mauá, and R$ 12,548 (R$ 11,323 as of December 31, 2010) registered for the Concession Contract - UHE - Colíder.
16.5 Special liabilities
The special liabilities represent resources from the financial participation by customers, budget donations from the Government, federal, state and municipal funds and special credits assigned to investments used in the enterprises tied to the concession.
46
The scheduled date for settlement of these liabilities was the date for the end of the concession. As a result of Aneel Normative Resolution number 234, dated October 31, 2006, altered by ANEEL Regulatory Resolution number 338 of November 5, 2008, which establishes the general concepts, the methodologies applicable and the initial procedures for realizing the second cycle for the periodic review of tariffs for the concessionaries of electrical energy distribution services, the nature of these obligations was altered. Both the balance and the new additions are now amortized in the accounting records as from July 01, 2008, in accordance with ANEEL Ruling 3,073/06 and Official Circular letter number 1,314/07. Amortization is calculated using the same average rate for the corresponding assets.
16.6 Recoverable value of intangible asset (finite useful life)
At the end of 2010, the Company evaluated the recoverable value of its intangible assets based on the present value of estimated future cash flows, as reported in Note 18.7 of the Annual Financial Statements at December 31, 2010.
During the semester there were no events that required a new evaluation of the recoverable values of the intangible assets.
17 PAYROLL, SOCIAL CHARGES AND LABOR ACCRUALS |
. | ||
Consolidated | ||
6.30.2011 | 12.31.2010 | |
Social security liabilities | ||
Taxes and social contribution |
23,956 | 29,987 |
Social security charges on paid vacation and 13th salary |
27,067 | 18,866 |
51,023 | 48,853 | |
Labor Liabilities |
||
Payroll, net |
1,674 | 242 |
Vacation and 13th salary |
86,340 | 60,022 |
Profit sharing |
- | 66,151 |
Profit sharing for the year |
40,810 | - |
Voluntary redundancy |
16,786 | 314 |
Assignements to third parties |
1 | 2 |
145,611 | 126,731 | |
196,634 | 175,584 |
47
18 SUPPLIERS |
. | |||
Consolidated | |||
6.30.2011 | 12.31.2010 | ||
Charges for use of grid system | 70,574 | 67,771 | |
Energy supplies | 270,458 | 286,941 | |
Materials | |||
Petróleo Brasileiro S.A. - Petrobras - gas purchased by Compagas |
34,629 | 25,720 | |
Petróleo Brasileiro S.A. - Petrobras - renegotiation (18.1) |
50,995 | 48,312 | |
Petróleo Brasileiro S.A. - Petrobras - renegotiation - NC (18.1) |
127,488 | 144,936 | |
Other suppliers |
212,169 | 183,824 | |
425,281 | 402,792 | ||
766,313 | 757,504 | ||
Current | 638,825 | 612,568 | |
Noncurrent - NC | 127,488 | 144,936 |
18.1 Petróleo Brasileiro S.A. - Petrobras – Renegotiation
On March 6, 2006, Copel signed an agreement with Petrobras to settle the pending issues regarding the gas purchase agreement for the Araucária Thermoelectric Power Plant. This agreement comprised the signing of an Out-of-Court Agreement, under which Copel Geração Company, with Copel as joint debtor, acknowledged a R$ 150,000 debt to Petrobras, as the assignee of Compagas’ credits to Copel Geração, which shall be paid in 60 monthly installments adjusted by the Selic rate, starting in January 2010.
On May 30, 2006, Copel Generation signed a Statement for the Ratification of mutual settlement with Compagas under which both parties fully and irrevocably release each other from all obligations and rights under the Natural Gas Purchase and Sale Agreement signed by them on May 30, 2000 and terminated on May 31, 2005, renouncing any claims against each other, on any grounds, as of the date of the Out of Court Agreement and the acknowledgement of debt signed by them and by Petrobras, with the participation of Copel. The acknowledgement of debt by Copel Generation remains.
18.2 Main power purchase agreements
The table features the main power purchase agreements signed in the regulated power trading environment. These contracts are shown at original value and restated annually according to the IPCA inflation index.
48
Supply period |
Energy purchased (anual average MW) |
Auction date |
Average purchase price (R$/MWh) | |
Auction of power from existing facilities | ||||
1º Auction - Product 2005 |
2005 to 2012 | 946.00 | 12.07.2004 | 57.51 |
1º Auction - Product 2006 |
2006 to 2013 | 456.34 | 12.07.2004 | 67.33 |
1º Auction - Product 2007 |
2007 to 2014 | 10.74 | 12.07.2004 | 75.46 |
2º Auction - Product 2008 |
2008 to 2015 | 69.37 | 04.02.2005 | 83.13 |
4º Auction - Product 2009 |
2009 to 2016 | 43.47 | 10.11.2005 | 94.91 |
5º Auction - Product 2007 |
2007 to 2014 | 160.09 | 12.14.2006 | 104.74 |
10º Auction Adjust . P -04M |
March to June 2011 | 7.69 | 02.17.2011 | 101.80 |
10º Auction Adjust . P -10M |
March to December 2011 | 20.12 | 02.17.2011 | 115.04 |
1,713.82 | ||||
Auction of power from new facilities |
||||
1º Auction - Product 2008 Hydro |
2008 to 2037 | 3.61 | 12.16.2005 | 106.95 |
1º Auction - Product 2008 Therm |
2008 to 2022 | 25.93 | 12.16.2005 | 132.26 |
1º Auction - Product 2009 Hydro |
2009 to 2038 | 3.26 | 12.16.2005 | 114.28 |
1º Auction - Product 2009 Therm |
2009 to 2023 | 41.59 | 12.16.2005 | 129.26 |
1º Auction - Product 2010 Hydro |
2010 to 2039 | 66.31 | 12.16.2005 | 114.57 |
1º Auction - Product 2010 Therm |
2010 to 2024 | 64.30 | 12.16.2005 | 121.81 |
3º Auction - Product 2011 Hydro |
2011 to 2040 | 57.66 | 10.10.2006 | 120.86 |
3º Auction - Product 2011 Therm |
2011 to 2025 | 54.22 | 10.10.2006 | 137.44 |
4º Auction - Product 2010 Therm |
2010 to 2024 | 18.32 | 07.26.2007 | 134.64 |
5º Auction - Product 2012 Hydro |
2012 to 2041 | 52.50 | 10.16.2007 | 129.14 |
5º Auction - Product 2012 Therm |
2012 to 2026 | 117.27 | 10.16.2007 | 128.37 |
6º Auction - Product 2011 Therm |
2011 to 2025 | 51.07 | 09.17.2008 | 128.42 |
7º Auction - Product 2013 Hydro |
2013 to 2042 | 12.24 | 09.30.2008 | 98.98 |
7º Auction - Product 2013 Therm |
2013 to 2027 | 303.99 | 09.30.2008 | 145.23 |
Santo Antonio |
2012 to 2041 | 106.00 | 12.10.2007 | 78.87 |
Jirau |
2013 to 2042 | 141.51 | 05.19.2008 | 71.37 |
1,119.78 |
19 LOANS AND FINANCING |
Consolidated | Current liabilities |
Non current liabilities | ||||
6.30.2011 Total |
12.31.2010 | 6.30.2011 | 12.31.2010 | |||
Principal | Charges | |||||
Foreign currency | ||||||
IDB (19.1) |
- | - | - | 9,233 | - | - |
STN (19.2) |
4,432 | 487 | 4,919 | 5,278 | 45,939 | 51,397 |
Eletrobrás |
5 | - | 5 | 5 | 11 | 15 |
4,437 | 487 | 4,924 | 14,516 | 45,950 | 51,412 | |
Local currency | ||||||
Banco do Brasil (19.3) |
195 | 13,553 | 13,748 | 12,779 | 860,943 | 691,007 |
Eletrobrás (19.4) |
44,872 | 9 | 44,881 | 44,643 | 236,410 | 257,673 |
BNDES - Compagas (19.5) |
3,188 | - | 3,188 | 6,330 | - | 43 |
Finep (19.6) |
1,952 | 13 | 1,965 | 1,967 | 4,880 | 5,855 |
BNDES (19.7) |
4,192 | 2,165 | 6,357 | 1,389 | 156,792 | 137,496 |
Banco do Brasil |
||||||
Repasse BNDES (19.8) |
4,192 | 2,235 | 6,427 | 1,471 | 156,792 | 137,496 |
58,591 | 17,975 | 76,566 | 68,579 | 1,415,817 | 1,229,570 | |
63,028 | 18,462 | 81,490 | 83,095 | 1,461,767 | 1,280,982 |
49
Parent Company | Current liabilities |
Non current liabilities | ||||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |||
Principal | Charges | Total | ||||
Foreign currency | ||||||
STN (19.2) |
4,432 | 487 | 4,919 | 5,278 | 45,939 | 51,397 |
Local currency | ||||||
Banco do Brasil (19.3) |
- | 13,550 | 13,550 | 12,582 | 329,600 | 329,600 |
4,432 | 14,037 | 18,469 | 17,860 | 375,539 | 380,997 |
Breakdown of loans and financing by type of currency and index
Currency (equivalent in R$) / Index | ||||
6.30.2011 | % | 12.31.2010 | % | |
Foreign currency | ||||
US dollar |
50,874 | 3.30 | 56,695 | 4.16 |
Yen |
- | - | - | - |
IDB currency basket |
- | - | 9,233 | 0.68 |
50,874 | 3.30 | 65,928 | 4.84 | |
Local currency |
||||
TJLP |
11 | - | 285,709 | 20.94 |
IGP-M |
567 | 0.04 | 616 | 0.05 |
UFIR |
119,422 | 7.74 | 125,363 | 9.19 |
FINEL |
161,870 | 10.49 | 176,954 | 12.97 |
UMBND |
336,401 | 21.80 | 6,373 | 0.47 |
CDI |
874,112 | 56.64 | 703,134 | 51.54 |
1,492,383 | 96.71 | 1,298,149 | 95.16 | |
1,543,257 | 100.01 | 1,364,077 | 100.00 |
Index and change in the main foreign currencies and indexes applied to the loans and financing
Currency/Index | Variation (%) | |
6.30.2011 | 12.31.2010 | |
U.S. dollar |
(6.31) | (4.31) |
IDB currency basket |
0.00 | 3.86 |
TJLP |
6.00 | 6.00 |
IGP-M |
3.14 | 11.32 |
FINEL |
0.62 | 2.18 |
UMBND |
0.00 | (3.76) |
CDI |
14.19 | 24.44 |
50
Maturity of noncurrent installments
Foreign currency |
Local currency |
Consolidated | ||
6.30.2011 | 12.31.2010 | |||
2012 | 1,047 | 35,197 | 36,244 | 67,701 |
2013 | 2,095 | 195,572 | 197,667 | 188,168 |
2014 | 1,051 | 525,015 | 526,066 | 516,517 |
2015 | - | 343,811 | 343,811 | 183,780 |
2016 | - | 49,896 | 49,896 | 46,919 |
2017 | - | 33,018 | 33,018 | 30,188 |
2018 | - | 32,108 | 32,108 | 29,278 |
2019 | - | 29,360 | 29,360 | 26,530 |
2020 | - | 26,765 | 26,765 | 23,935 |
2021 | - | 21,665 | 21,665 | 18,834 |
2022 | - | 21,662 | 21,662 | 17,186 |
after 2022 | 41,757 | 101,748 | 143,505 | 131,946 |
45,950 | 1,415,817 | 1,461,767 | 1,280,982 |
Changes in loans and financing:
Foreign currency | Local currency | ||||
Consolidated | current | non current | current | non current | Total |
As of December 31, 2010 | 14,516 | 51,412 | 68,579 | 1,229,570 | 1,364,077 |
Funding |
- | - | - | 197,262 | 197,262 |
Charges |
1,250 | - | 41,155 | 20,067 | 62,472 |
Monetary and exchange variations |
(385) | (3,226) | 67 | 890 | (2,654) |
Transfers |
2,236 | (2,236) | 31,972 | (31,972) | - |
Amortization - principal |
(6,393) | - | (16,238) | - | (22,631) |
Amortization - interest and variation |
(6,300) | - | (48,969) | - | (55,269) |
As of June 30, 2011 | 4,924 | 45,950 | 76,566 | 1,415,817 | 1,543,257 |
Foreign currency | Domestic currency | ||||
Consolidated | current | non current | current | non current | Total |
As of December 31, 2009 | 24,778 | 67,865 | 56,920 | 716,279 | 865,842 |
Funding |
- | - | - | 80,059 | 80,059 |
Charges |
1,854 | - | 33,290 | 567 | 35,711 |
Monetary and exchange variation |
35 | 2,630 | 263 | 1,882 | 4,810 |
Transfers |
12,348 | (12,348) | 26,954 | (26,954) | - |
Amortization - principal |
(6,387) | - | (13,453) | - | (19,840) |
Amortization - interest and variation |
(7,694) | - | (40,462) | - | (48,156) |
As of June 30, 2010 | 24,934 | 58,147 | 63,512 | 771,833 | 918,426 |
19.1 Inter-American Development Bank – IDB
Loan for the Segredo Hydroelectric Power Plant and for the Jordão River Diversion Project, received on January 15, 1991, in the amount of US$ 135,000. This debt is amortized semi-annually, with final maturity in January 2011. Interest is calculated according to the IDB funding rate, which in the fourth quarter of 2010 was 4.13% p.a. The agreement features provisions providing for termination in the following cases:
- Default by the debtor on any other obligation set forth in the agreement or agreements signed with the bank for financing of the project;
- Withdrawal or suspension of the Federal Republic of Brazil as a member of the IDB;
- Default by the guarantor, if any, of any obligation set forth in the guaranty agreement;
51
- Ratio between current assets and total current commercial and bank financing, except for the current share of noncurrent indebtedness and dividends to be reinvested, lower than 1.2; and
- Ratio between noncurrent indebtedness and shareholders’ equity exceeding 0.9.
This agreement is guaranteed by the Federal Government and by mortgage and fiduciary guarantees.
The contract was settled on its maturity date, on January 15, 2011.
19.2 National Treasury Department - STN
The restructuring of medium and long-term debt, signed on May 20, 1998, in connection with the financing received under Law no. 4,131/62, is shown below:
Type of bonus |
Term |
Final Maturity |
Grace period (years) |
Consolidated | |
6.30.2011 | 12.31.2010 | ||||
Par Bond |
30 | 4.15.2024 | 30 | 24,913 | 26,591 |
Capitalization Bond |
20 | 4.15.2014 | 10 | 6,379 | 7,947 |
Debt Conversion Bond |
18 | 4.15.2012 | 10 | 2,349 | 3,761 |
Discount Bond |
30 | 4.15.2024 | 30 | 17,217 | 18,376 |
50,858 | 56,675 |
The annual interest rates and repayments are as follows:
Type of bonus | Anual interest rate (%) | Amortizations |
Par Bond |
6.0 | Single |
Capitalization Bond |
8.0 | Six monthly |
Debt Conversion Bond |
Libor six monthly + 0.8750 | Six monthly |
Discount Bond |
Libor six monthly + 0.8125 | Single |
As collateral for this agreement, the Company has assigned and transferred to the Federal Government, conditioned to the non-payment of any financing installment, the credits that are made to the Company’s centralized revenues account, up to a limit sufficient to cover the payment of installments and other charges payable upon each maturity. For the Discount and Par Bonds, there are collateral deposits of R$ 10,606 and R$ 15,073 as of June 30, 2011 (R$ 10,850 and R$ 15,430 as of December 31, 2010), respectively. (Note 04).
19.3 Banco do Brasil S.A.
Contracts | Consolidated | |
6.30.2011 | 12.31.2010 | |
Private contract for credit assignment - Law 8,727/93 (1) | 579 | 651 |
Credit notes (2) | 343,150 | 342,182 |
Contract for providing fixed credit number 21/02155-4 (3) | 380,555 | 360,953 |
Contract for providing fixed credit number 21/02248-8 (3) | 150,407 | - |
874,691 | 703,786 |
52
1) |
Private Credit Assignment Agreement with the Federal Government, through Banco do Brasil S. A., signed on March 30, 1994, repayable in 240 monthly installments based on the Price amortization system starting on April 1, 1994, monthly restated by the TJLP and IGP-M plus interest of 5.098% p.a. and guaranteed by Copel’s accounts receivables; | |
2) | The following Parent Company credit notes: |
Credit notes | Emission date |
Maturity of principal |
Financial charges maturing six monthly |
Principal | Charges | Total |
Comercial nº 330.600.129 |
1.31.2007 | 1.31.2014 | 106,5% of CDI average rate | 29,000 | 1,428 | 30,428 |
Industrial nº 330.600.132 |
2.28.2007 | 2.28.2014 | 106,2% of CDI average rate | 231,000 | 9,194 | 240,194 |
Industrial nº 330.600.151 |
7.31.2007 | 7.31.2014 | 106,5% of CDI average rate | 18,000 | 886 | 18,886 |
Industrial nº 330.600.156 |
8.28.2007 | 8.28.2014 | 106,5% of CDI average rate | 14,348 | 572 | 14,920 |
Industrial nº 330.600.157 |
8.31.2007 | 8.31.2014 | 106,5% of CDI average rate | 37,252 | 1,470 | 38,722 |
329,600 | 13,550 | 343,150 |
As a guarantee, Banco do Brasil has been authorized to deduct any amounts credited, on any grounds, to the Company's deposit account to cover, in part or in full, the outstanding balance due under the line of credit. It has also been irrevocably authorized, regardless of prior notice, to offset the bank’s receivable, which corresponds to the outstanding balance due under the line of credit, with any credits the Company has or accrues at Banco do Brasil. | |
3) |
Fixed credit assignement, number 21/02155-4 for the amount of R$ 350,000, agreed between Copel Distribuição and Banco do Brasil, signed on September 10, 2010, allocated exclusively to financing working capital. |
The debt will be paid in three annual successive installments, the first falling due on August 25, 2013, for the amount of R$ 116,666, and the other for the amount of R$ 116,667, maturing on July 11, 2014 and August 15, 2015, plus financial charges in proportion to the amount of the principal sum amortized, such that, with the payment of the last installment, will repay the deb in full. | |
Financial charges will be due on the debtor balance, calculated based on the basic remuneration rate for savings accounts - IRP and additional charges based on the variable interest rate, which will be calculated using the exponential method, based on the daily equivalent rate – civil year (365 or 366 days). The effective rate resulting from adding the variable interest rate and the IRP, will be equivalent, in each calculation period, to 98.5% of the variation in the CDI for this same period. The charges will be debited and capitalized monthly to the account tied to the contract, on each base date for the maturity and liquidation of the debt, to be paid together with the principal payments. | |
To ensure payment of any liabilities under this agreement, Copel Distribuição agrees to assign, bind and pledge as guarantee in favor of Banco do Brasil, trade bills receivable, endorsed and accompanied by the corresponding signed authorization for withdrawal. | |
The contract includes clauses providing for anticipated maturity in certain conditions. | |
| |
The amount of R$ 350,000 was liberated in full on September 9, 2010. | |
4) |
Contract nº 21/02248-8 for opening a fixed loan facility in the amount of R$ 150,000, entered into between Copel Distribuição and Banco do Brasil, signed on June 22, 2011, intended solely and exclusively for financing working capital. |
The debt will be paid in one lump sum with maturity on June 1, 2015. |
53
Charges will be levied on the debit balance, calculated based on the index for basic remuneration of passbook savings accounts (IRP) and additional charges based on the floating interest rate that will be calculated by the exponential method, based on the daily equivalent rate – civil year (365 or 366 days). The effective rate resulting from the unification of the floating interest rate with the index for remuneration of savings accounts (IRP) will be equivalent in each calculation period to 99.5% of the variation of the interbank deposit certificate (CDI) in the same period. The charges will be debited and capitalized monthly in the account subject to the contract each base date on the due date and on the settlement of the debt, for payment together with the payment of the principal on June 1, 2015.
To assure payment of any obligations of the contract, Copel Distribuição is bound to yield, bond and pledge as collateral to Banco do Brasil, trade bills duly endorsed and accompanied by bordereaux.
The contract contains clauses establishing accelerated maturity in certain situations.
The amount of R$ 150,000 was fully released on June 22, 2011.
19.4 Eletrobrás - Centrais Elétricas Brasileiras S.A.
Loans originated from the Eletrobras Financing Fund (FINEL) and from the Global Reversal Reserve (RGR) for the expansion of the generation, transmission, and distribution systems. Repayments started in February 1999, and the last payment is due in August 2021. Interest of 5.0% to 8.0% p.a. and principal are repaid monthly, adjusted by the FINEL and Federal Reference Unit (UFIR) rates.
Contract ECFS – 142/2006, was signed on May 11, 2006 by Copel Distribuição and Eletrobras, in the amount of R$ 74,340, for use in the “Luz para Todos” rural electrification program. Out of the total amount, R$ 42,480 came from RGR funds, and R$ 31,860 were economic subsidies from CDE (Energy Development Account) funds. This loan has a grace period of 24 months and bears interest of 5% p.a. plus a commission of 1% p.a. It is repayable in 120 equal monthly installments, with final maturity on September 30, 2018.
The total amount disbursed was R$ 63,104, of which R$ 36,056 came from RGR funds and R$ 27,048 from CDE funds. There will be no further disbursements under this agreement.
Contract ECFS - 206/07, signed on March 3, 2008 between Copel Distribuição and Eletrobrás, for the amount of R$ 126,430 to be invested in the “Luz para Todos” Rural Electricity Program. On September 14, 2010 amendment ECFS-206-D / 2010 was signed, which altered the value of the financing to R$ 109,642 being R$ 93,979 financed with funds from RGR and R$ 15,663 as an economic subsidy. The contract has a grace period of 24 months, and interest of 5% p.a. and commission of 1% p.a., and will be paid in 120 monthly, successive, equal installments, with the final payment to be made on August 30, 2020. In August 2008, the amount of R$ 37,929 was liberated, being R$ 32,511 in funds from RGR and R$ 5,418 in funds from CDE. In June 2009, R$ 25,286 was liberated, being R$ 21,674 in funds from RGR and R$ 3,612 in funds from CDE. In March 2010, R$ 25,286 was liberated, being R$ 21,674 in funds from RGR and R$ 3,612 in funds from CDE.
54
Contract ECFS - 273/09, signed on February 18, 2010 between Copel Distribuição and Eletrobrás, for the amount of R$ 63,944 to be invested in the “Luz para Todos” Rural Electricity Program, being R$ 54,809 financed with funds from RGR and R$ 9,134 with funds from CDE, as an economic subsidy. The contract has a grace period of 24 months, and interest of 5% p.a. and commission of 1% p.a., and will be paid in 120 monthly, successive, equal installments, with the final payment to be made on November 30, 2022. In December 2010, R$ 19,183 was liberated, being R$ 16,443 in funds from RGR and R$ 2,740 in funds from CDE.
Contract ECF - 2540/06, signed on May 12, 2009 between Copel Distribuição and Eletrobrás, for the amount of R$ 2,844 to be invested in the National Program for Efficient Public Lighting -ReLuz, with R$ 2,844 financed with funds from RGR allocated to cover 75% of the total cost of the Project to Improve the Public Lighting System for the City of Ponta Grossa, in the State of Paraná. The contract has a grace period of 9 months, and interest of 5% p.a. and commission of 1.5% p.a., and will be paid in 60 successive, equal installments, with the final payment to be made on December 30, 2016. In January 2011, R$ 284 was liberated, with funds from RGR. Interest due each month during the grace period will be included in the debtor balance.
The guarantee is represented by the income, supported by power of attorney granted by a public instrument, and the issue of promissory notes equal to the number of installments falling due.
19.5 BNDES - Compagas
Financing obtained from BNDES to expand the gas distribution network. This financing agreement is divided into subcredits, with one part corrected by the interest rate of 4% p.a. plus TJLP, and another part by the variation in the BNDES Monetary Unit - UMBND. There are no restrictive clauses in this contract, and the last installment falls due on January 15, 2012.
This guarantee financing by Compagas gas supply network, equivalent to the two financing installments, shall be deposited to be exclusively kept and in checking account with Banco Itaú S.A.
19.6 Financiadora de Estudos e Projetos – FINEP
Contracts | Consolidated | |
6.30.2011 | 12.31.2010 | |
Contact 02070791-00 (1) |
4,014 | 4,586 |
Contact 02070790-00 (2) |
2,831 | 3,236 |
6,845 | 7,822 |
1) |
Loan agreement no. 02070791-00, signed on November 28, 2007 to partially cover expenses incurred in the preparation of the “Generation Research and Development Project for 2007”. |
The total credit amounts of R$ 5,078, with the first installment, of R$ 1,464 liberated in April 2008, and the second one in the amount of R$ 2,321 in May 2009, the third installment for the amount of R$ 866 in December 2010 and the remaining installments will be liberated depending on financial and budget availability; 1% of the funds obtained are allocated to cover inspection and supervision expenses. The principal amount of this debt will be subject to interest of 6.37% p.a., resulting from the equalization factor, paid on the 15th of each month, including during the grace period. The debtor balance will be paid to FINEP in 49 monthly successive installments, with the first installment due on December 15, 2010 and the last one on December 15, 2014. |
55
In order to guarantee the contract, Copel Geração e Transmissão has authorized Banco do Brasil to withhold the amounts due to FINEP from the bank account in which its monthly revenues are deposited. | |
2) |
Loan agreement no. 02070790-00, signed on November 28, 2007 to partially cover expenses incurred in the preparation of the “Transmission Research and Development Project for 2007”. |
The total credit amounts to R$ 3,535. The first installment, in the amount of R$ 844, was released in October 2008, the second one, in the amount of R$ 2,451, was released in December 2009, and the remaining ones will be deposited to the extent there is financial and budget availability. A share of 1% of the funds will be allocated to cover inspection and supervision expenses. The principal amount of this debt will be subject to equalized interest of 6.13 % p.a., due on the 15th day of each month, including the months of the grace period. The outstanding balance will be paid to FINEP in 49 monthly and successive installments, the first one due on December 15, 2010, and the last one on December 15, 2014. | |
To secure the contract, Copel Geração e Transmissão has authorized Banco do Brasil to withhold the amounts due to FINEP from the checking account in which its monthly revenues are deposited. | |
3) |
Loan Agreement no. 02100567-00, signed on November 11, 2010, for the purpose of covering part of the costs incurred in preparing the “BEL Project” by Copel Telecomunicações. No disbursements under this agreement have been made as of the date hereof. |
The loan of R$ 52,198 to be made available in 6 installments, depending on the financial and budget availability of Finep. The principal debt incurs fixed interest of 4% p.a. resulting from the equalization factor, paid on the 15th of each month, including during the grace period. The debtor balance will be paid to Finep in 81 monthly successive installments, with the first installment due on August 8, 2012 and the last one on April 15, 2019. |
19.7 BNDES - Copel Geração e Transmissão
On March 17, 2009, Copel Geração e Transmissão signed with BNDES Loan Agreement no. 08.2.0989.1, with Copel as a intervening agent, to fund the construction of the Mauá Hydroelectric Power Plant and its transmission system, in consortium with Eletrosul. The loan amounts to R$ 169,500, which will be released in installments as funds are required and pursuant to BNDES' financial scheduling.
This loan will be paid off in 192 monthly installments, starting on February 15, 2012 and ending on January 15, 2028, bearing interest of 1.63% p.y. above the Long-Term Interest Rate (TJLP), which will be paid quarterly during the grace period and monthly after the first payment of the principal amount.
As a guarantee for the payment of all amounts due under this agreement, Copel Geração e Transmissão has pledged in favor of BNDES a lien on all the revenues from the sale of energy under Agreements for Energy Trade on the Regulated Power Market (“Contratos de Compra de Energia no Ambiente Regulado” or CCEARs) in connection with this project, which shall be collected in a special main account for this purpose. The Company shall also set up two "reserve accounts" to cover any shortfalls in the main account. This guarantee will be operated under an Agreement on Revenue Transfer and Attachment, Account Management, and Other Covenants signed by Copel Geração e Transmissão, BNDES, and Banco do Brasil.
56
The first installment was made available in July 2009, in the amount of R$ 55,748, the second in February 2010 for the amount of R$ 29,193, the third in December 2010, for the amount of R$ 52,555 and the fourth in June 2010, for the amount of R$ 27,489.
The contract contains provisions on accelerated maturity in certain conditions.
19.8 Banco do Brasil - Distribution of Funds from BNDES
On April 16, 2009, Copel Geração e Transmissão signed with Banco do Brasil Loan Agreement no. 21/02000-0, with Copel as an intervening agent, to fund the construction of the Mauá Hydroelectric Power Plant and its transmission system, in consortium with Eletrosul. The loan amounts to R$ 169,500, which will be released in installments pursuant to the Uses and Sources Schedule attached to the agreement.
This loan will be paid off in 192 monthly installments, starting on February 15, 2012 and ending on January 15, 2028, bearing interest of 2.13% p.y. above the Long-Term Interest Rate (TJLP), which will be paid quarterly during the grace period and monthly after the first payment of the principal amount. As a guarantee for the payment of all amounts due under this agreement, Copel Geração e Transmissão has pledged in favor of Banco do Brasil a lien on all the revenues from the sale of energy under Agreements for Energy Trade on the Regulated Power Market (“Contratos de Compra de Energia no Ambiente Regulado” or CCEARs) in connection with this project, which shall be collected in a special main account for this purpose. The Company shall also set up two "reserve accounts" to cover any shortfalls in the main account. This guarantee will be operated under an Agreement on Revenue Transfer and Attachment, Account Management, and Other Covenants signed by Copel Geração e Transmissão, BNDES, and Banco do Brasil.
The first installment was made available in August 2009, in the amount of R$ 55,748, the second in March 2010 for the amount of R$ 29,193 and the third in December 2010, for the amount of R$ 52,555 and the fourth in June 2010, for the amount of R$ 27,489.
The contract contains provisions on accelerated maturity in certain conditions.
19.9 Contracts with clauses for anticipated maturity
The Company has loan contracts with clauses that require it to maintain certain economic –financial indices within certain previously established parameters, and non compliance with these terms could result in the anticipated maturity of the debts. At June 30, 2011 all of the terms were analyzed, and it was identified that all of the parameters in the contracts had been complied with.
57
20 DEBENTURES |
Consolidated | Current liabilities |
Total | |
As of December 31, 2010 | 621,157 | 621,157 | |
Charges |
34,471 | 34,471 | |
Amortization - interest and variation |
(32,524) | (32,524) | |
As of June 30, 2011 | 623,104 | 623,104 | |
Consolidated | Current liabilities |
Non current liabilities |
Total |
As of December 31, 2009 | 54,195 | 753,384 | 807,579 |
Charges |
30,286 | - | 30,286 |
Transfers |
153,384 | (153,384) | - |
Amortization - principal |
(177,908) | - | (177,908) |
Amortization - interest and variation |
(41,258) | - | (41,258) |
As of June 30, 2010 | 18,699 | 600,000 | 618,699 |
20.1 Parent Company Debentures
The issuance of 60,000 debentures constituted the fourth single issuance carried out by the Company on September 1, 2006, in the amount of R$ 600,000, completed on October, 6, 2006, with full subscription totaling R$ 607,899, valid for five years as from date of issuance and with final maturity, in sole series, on September 1, 2011. Debentures are single, non-convertible into shares, book-entry, nominative and without guarantee.
The interest on the nominal value of the debentures is 104% of the One-day Interbank Deposit (DI over) rate, "extra group", stated as a percentage per annum, on the basis of 252 business days, disclosed daily by the Clearing House for the Custody and Financial Settlement of Securities (CETIP) (at the DI rate) and calculated on the compound and cumulative interest method on a pro rata temporis basis for the business days elapsed. The interest corresponding to the capitalization period will be due and paid on a semi-annual basis, with the first due date on March 1, 2007 and the last on September 1, 2011. The debentures may not be renegotiated.
The funds obtained from the public distribution of debentures were used to extend debt maturities through the payment of financial obligations, as well as to the injection of cash. The funds obtained from the Issuance were used for the financial settlement of 1/3 of the principal value of the debentures of the 3rd issuance of the Issuer, due on February 1, 2007 and settlement of the principal of the debentures of the 2nd issuance of the Issuer, due on March 1, 2007.
The registers for the debentures referred to above include clauses for anticipated maturity, under certain conditions. At June 30, 2011 all of the terms were analyzed, and it was identified that all of the parameters stipulated in the registers had been complied with.
20.2 Debentures – Elejor
Elejor, in compliance with the alterations and terms of the 1st amendment to the Debenture Contract, on March 5, 2010 it amortized in advance all of the remaining debentures held by BNDESPAR, for the amount of R$ 181,239, and thus the debt with BNDESPAR has been settled.
58
21 POST-EMPLOYMENT BENEFITS |
21.1 Benefit Pension Plan
The Company and its subsidiaries sponsor retirement and pension plans (Pension Plans I, II, and III) and a medical and dental care plan (Healthcare Plan) to both current and retired employees and their dependents.
The pension plans I and II are defined benefit plans for which the income is previously determined based on the salary level of each individual and the pension plan III is a defined contribution plan. (CD).
The costs assumed by the sponsors for these plans are registered according to the actuarial evaluation prepared annually by independent actuaries in accordance with the rules established in CVM Decision 600/09, which approved and made Technical Pronouncement CPC 33/IAS 19 and IFRC 14, issued by the Accounting Pronouncements Committee – CPC compulsory for public stock corporations, and refer to employee benefits, and correlated to IAS 19. The economic and financial assumptions and for purposes of the actuarial evaluation are discussed with the independent actuaries and approved by the sponsors’ management.
21.2 Healthcare Plan
The Company and its subsidiaries allocate resources for the coverage of health-care expenses incurred by their employees and their dependents, within rules, limits, and conditions set in specific regulations. Coverage includes periodic medical exams and is extended to all retirees and pensioners for life.
21.3 Balance sheet and statement of income
Amounts recognized in the balance sheet, under Post-Employment Benefits, are summarized below:
Consolidated | |||
6.30.2011 | 12.31.2010 | ||
Pension plan (21.1) |
9,151 | 9,111 | |
Healthcare plan (21.2) |
419,161 | 399,352 | |
428,312 | 408,463 | ||
Current | 24,621 | 24,255 | |
Non current | 403,691 | 384,208 |
The amounts recognized in the statement of income are shown below:
59
. | ||
Consolidated | ||
6.30.2011 | 6.30.2010 | |
Pension plan (CD) |
23,021 | 26,659 |
Pension plan (CD) - management |
305 | 176 |
Healthcare plan - post employment |
27,536 | 13,912 |
Healthcare plan |
16,467 | 14,514 |
Healthcare plan - management |
18 | 4 |
67,347 | 55,265 | |
(-) Appropriation in fixed and intangible assets in progress (a) |
(3,644) | (3,562) |
63,703 | 51,703 |
a) Amount refers to appropriation of direct labor for fixed assets and intangible assets in progress, not considered to be administrative costs.
21.4 Changes in the Post-Employment Benefits balance
Consolidated | Current liabilities | Noncurrent liabilities | Total |
As of December 31, 2010 | 24,255 | 384,208 | 408,463 |
Appropriation of actuarial calculation |
- | 27,536 | 27,536 |
Pension and healthcare contributions |
39,811 | - | 39,811 |
Transfers |
8,053 | (8,053) | - |
Amortizations |
(47,498) | - | (47,498) |
As of June 30, 2011 | 24,621 | 403,691 | 428,312 |
Consolidated | Current laibilities | Noncurrent liabilities | Total |
As of December 31, 2009 | 22,505 | 352,976 | 375,481 |
Appropriation of actuarial calculation |
- | 13,912 | 13,912 |
Private pension and health contributions |
41,353 | - | 41,353 |
Transfers |
9,518 | (9,518) | - |
Amortizations |
(49,569) | - | (49,569) |
As of June 30, 2010 | 23,807 | 357,370 | 381,177 |
21.5 Actuarial valuation pursuant to CVM Ruling no. 600/2009
The Company, in compliance with CVM Decision 600/09, opted to prepare an annual actuarial report.
The information, prepared in accordance with the Actuarial Evaluation Report of December 31, 2010, is presented in note 23 to the Annual Financial Statements at December 31, 2010.
60
22 REGULATORY CHARGES |
Consolidated | ||
6.30.2011 | 12.31.2010 | |
Fuel consumption account - CCC |
27,607 | 27,607 |
Energy development account - CDE |
20,718 | 18,807 |
Global reversal of reserve - RGR |
32,149 | 9,691 |
80,474 | 56,105 |
23 RESEARCH AND DEVELOPMENT AND ENERGY EFFICIENCY |
The concessionaries for public distribution, generation and transmission of electricity services are required to allocate 1% of their annual net operational income to research and development in the electrical sector and to energy efficiency programs, according to Law 9,991/00 and ANEEL Normative Resolutions 316/08 and 300/08.
Copel’s balances allocated to Research and Development (P&D) and Energy Efficiency (PEE) are detailed below:
Balances registered to invest in P&D and PEE
Applied and unfinished | Balance to collect | Balance as of apply | Balance as of 6.30.2011 | Balance as of 12.31.2010 | |
Research and Development - R&D | |||||
FNDCT |
- | 2,823 | - | 2,823 | 2,686 |
MME |
- | 1,413 | - | 1,413 | 1,344 |
R&D |
20,452 | - | 98,796 | 119,248 | 109,061 |
20,452 | 4,236 | 98,796 | 123,484 | 113,091 | |
Energy efficiency program - EEP | 61,624 | - | 80,239 | 141,863 | 133,632 |
82,076 | 4,236 | 179,035 | 265,347 | 246,723 | |
Current | 145,919 | 155,991 | |||
Noncurrent | 119,428 | 90,732 |
Changes in balances for P&D and PEE
FNDCT | MME | R&D | EEP | ||||
current | current | current | non current | current | non current | Consolidated | |
As of December 31, 2010 | 2,686 | 1,344 | 40,333 | 68,728 | 111,628 | 22,004 | 246,723 |
Additions |
8,484 | 4,242 | 1,040 | 7,477 | - | 11,836 | 33,079 |
Selic Interest rate |
- | - | 115 | 4,854 | - | 3,899 | 8,868 |
Transfers |
- | - | (630) | 630 | - | - | - |
Execution of programs and payments |
(8,347) | (4,173) | - | - | - | - | (12,520) |
Concluded projects |
- | - | (3,299) | - | (7,504) | - | (10,803) |
As of June 30, 2011 | 2,823 | 1,413 | 37,559 | 81,689 | 104,124 | 37,739 | 265,347 |
FNDCT | MME | R&D | EEP | ||||
current | current | current | non current | current | non current | Consolidated | |
As of December 31, 2009 | 1,325 | 682 | 49,653 | 54,908 | 69,345 | 35,585 | 211,498 |
Additions |
7,822 | 3,891 | 750 | 7,356 | - | 10,014 | 29,833 |
Selic Interest rate |
- | - | 502 | 3,324 | - | 3,156 | 6,982 |
Execution of programs and payments |
(6,677) | (3,337) | - | - | - | - | (10,014) |
Concluded projects |
- | - | (9,314) | - | (9) | - | (9,323) |
As of June 30, 2010 | 2,470 | 1,236 | 41,591 | 65,588 | 69,336 | 48,755 | 228,976 |
61
24 ACCOUNTS PAYABLE RELATED TO CONCESSIONS –USE OF PUBLIC PROPERTY |
Refers to charges from concessions granted for the Use of Public Property - UBP incurred from when the enterprise starts to operate until the last day of the concession, with the corresponding entry registered to intangible assets.
Consolidated | ||||
Current Liabilities | Noncurrent Liabilities | |||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |
Copel Geração e Transmissão | ||||
Mauá HPP (24.1.1) |
391 | - | 11,461 | 10,926 |
Colider HPP (24.1.2) |
- | - | 12,549 | 11,323 |
Elejor | ||||
Fundão-Santa Clara Hidroelectric Power Plant (24.2.1) |
40,984 | 40,984 | 334,464 | 317,850 |
41,375 | 40,984 | 358,474 | 340,099 |
For the semester ended June 30, 2011, the amounts of R$ 37,107 and R$ 3,864 (R$ 19,783 and R$ 4,399, for the same period in 2010) were registered as expenses to financial expenses and amortization of intangible assets.
24.1 Generation and Transmission
24.1.1 Mauá Hydroelectric Power Plant (Note 15.6)
As compensation for the use of the public property under this concession contract, Copel shall pay to the Federal Government, from the facility’s start of commercial operation until the 35th year of the concession, or as long as it runs the corresponding hydropower project, monthly installments equivalent to 1/12 of the annual proposed payment of R$ 643 (51% of 1,262), pursuant to article 6 of Concession Contract no. 001/07 - MME – UHE Mauá.
These installments are restated annually or at the legally applicable intervals, according to the IPCA (Amplified Cusumer Price Index) inflation index.
The calculation of present value was made taking into account an actual net discount rate of around 5.65% p.a., compatible with the estimated noncurrent rate and not related to the expected rate of return of the project.
The present value of accounts payable related to the concession – use of public property at June 30, 2011 was R$ 11,852.
24.1.2 Colíder Hydroelectric Power Plant (Note 15.7)
As compensation for the use of the public property under this concession contract, Copel shall pay to the Federal Government, from the facility’s start of commercial operation until the 35th year of the concession, or as long as it runs the corresponding hydropower project, monthly installments equivalent to 1/12 of the annual proposed payment of R$ 1,256, pursuant to article 6 of Concession Contract no. 001/11 - MME – UHE Colíder.
These installments are restated annually or at the legally applicable intervals, according to the IPCA (Amplified Consumer Price Index) inflation index.
62
The calculation of present value was made taking into account an actual net discount rate of around 7.74% p.a., compatible with the estimated noncurrent rate and not related to the expected rate of return of the project.
The present value of accounts payable related to the concession – use of public property at June 30, 2011 was R$ 12,549, recorded to non current liabilities.
24.2 Elejor
24.2.1 Complexo Energético Fundão – Santa Clara – AHEs Fundão e Santa Clara
As payment for the use of the public property, referred to in this contract, Elejor will pay the Government, from the 6th until the 35th year of the concession, or whilst it exploits the hydroelectric activities, the value of the monthly installments equivalent to 1/12 of the proposed annual payment of R$ 19,000, in accordance with Bidding Confirmation Term, in accordance with clause six of Concession Contract 125/01 – ANEEL – Complexo Energético Fundão – Santa Clara –AHE’s Fundão e Santa Clara.
The installments will be corrected annually or during a period permitted by legislation, based on the variation in the IPCA – Consumer Price index as from May 2001.
The main amount on the date of signing the concession contract was R$ 570,000. This amount is corrected monthly by the variation in the IGP-M and offset against the monthly amounts paid, and as of June 30, 2011 amounted to R$ 1,082,647 (as of December 31, 2010, R$ 1,041,968).
The original amount on the date of signing the contract was registered at the present value, which as of June 30, 2011, was recorded to liabilities for the amount of R$ 375,448 (R$ 358,834, as of December 31, 2010).
The present value calculation was based on a real and net discount rate of approximately 11% p.a., compatible with the estimated long term rate, and not tied to the expected return from the project.
This concession was granted on October 23, 2001, and the contract was signed on October 25, 2001 and the maturity date is anticipated for October 25, 2036.
63
25 OTHER ACCOUNTS PAYABLE |
Consolidated | ||
6.30.2011 | 12.31.2010 | |
Current Liabilities | ||
Financial compensation for use of water resources |
15,217 | 16,135 |
Public lighting fee collected |
13,921 | 18,224 |
Customers |
23,531 | 7,107 |
Reimbursements to customer contributions |
7,884 | 7,027 |
Pledges in guarantee |
5,474 | 5,946 |
Indemnity Apucaraninha indigenous community |
2,866 | 2,759 |
Aneel investigation fee |
1,717 | 1,638 |
Consortium partners |
1,661 | 339 |
Advances received from customers |
287 | 606 |
Insurance entities |
459 | 3,005 |
Other liabilities |
5,386 | 8,522 |
78,403 | 71,308 | |
Non current liabilities |
||
Other liabilities |
16 | - |
16 | - |
26 RESERVE FOR CONTINGENCIES |
The Company is a party to several labor, tax and civil claims filed before different courts. Copel’s management, based on the opinion of its legal counsel, maintains a reserve for contingencies in connection with lawsuits with probable chance of an unfavorable outcome.
Changes in this reserve
Consolidated | Balance as of 12.31.2010 |
Recorded | Reversals | Recorded fixed asset in progress |
Settled | Balance as of 6.30.2011 |
Tax | ||||||
Cofins (26.1) |
234,563 | - | - | - | - | 234,563 |
Others taxes |
86,916 | 21,923 | (41,811) | - | (553) | 66,475 |
321,479 | 21,923 | (41,811) | - | (553) | 301,038 | |
Labor | 146,348 | 3,987 | (2,793) | - | (7,493) | 140,049 |
Employee Benefits | 53,245 | 10,812 | (550) | - | (9,028) | 54,479 |
Civil | ||||||
Suppliers (26.2) |
86,101 | 1,886 | (176) | - | - | 87,811 |
Civil and administration claims |
73,237 | 16,708 | (1,004) | - | (6,154) | 82,787 |
Easements |
9,065 | 1,310 | (4,370) | - | (484) | 5,521 |
Condemnation and real estate (26.3) |
132,709 | 8,591 | - | 4,884 | - | 146,184 |
Customers |
5,305 | 807 | (108) | - | (18) | 5,986 |
306,417 | 29,302 | (5,658) | 4,884 | (6,656) | 328,289 | |
Environmental claims | 42 | - | - | - | - | 42 |
Regulatory (26.4) | 38,847 | 4,715 | (4,677) | - | - | 38,885 |
866,378 | 70,739 | (55,489) | 4,884 | (23,730) | 862,782 |
64
Consolidated | Balance as of 12.31.2009 |
Recorded | Reversals | Settled | Balance as of 6.30.2010 |
Tax | 77,858 | 14,613 | (1,223) | - | 91,248 |
Labor | 123,259 | 27,785 | (1,807) | (4,970) | 144,267 |
Employee Benefits | 35,172 | 5,786 | (564) | - | 40,394 |
Civil | |||||
Suppliers |
84,024 | 2,123 | - | - | 86,147 |
Civil and administration claims |
57,213 | 15,296 | (21,868) | (3,422) | 47,219 |
Easements |
14,902 | 1,259 | (6,299) | - | 9,862 |
Condemnation and real estate |
125,339 | 6,666 | - | (71) | 131,934 |
Customers |
5,324 | 180 | - | (14) | 5,490 |
286,802 | 25,524 | (28,167) | (3,507) | 280,652 | |
Environmental claims | 10 | - | - | - | 10 |
Regulatory | 37,010 | 49 | (56) | - | 37,003 |
560,111 | 73,757 | (31,817) | (8,477) | 593,574 | |
Parent Company | Balance as of 12.31.2010 |
Recorded | Reversals | Settled | Balance as of 6.30.2011 |
Tax | |||||
Cofins (26.1) |
234,563 | - | - | - | 234,563 |
Others taxes |
45,718 | 1,820 | (10,943) | (517) | 36,078 |
280,281 | 1,820 | (10,943) | (517) | 270,641 | |
Civil | 7,883 | 1,935 | - | - | 9,818 |
Regulatory (26.4) | 10,296 | - | - | - | 10,296 |
298,460 | 3,755 | (10,943) | (517) | 290,755 | |
Parent Company | Balance as of 12.31.2009 |
Registered | Reversals | Settled | Balance as of 6.30.2010 |
Tax | 44,357 | 9,204 | (274) | - | 53,287 |
Civil | 328 | 6,454 | (189) | (2,317) | 4,276 |
Regulatory | 9,249 | - | - | - | 9,249 |
53,934 | 15,658 | (463) | (2,317) | 66,812 |
Lawsuits with Likelihood of Losses deemed as probable
Details of the nature of the claims defended by the Company as of June 31, 2011 are consistent with those reported in Note 28 of the Annual Financial Statements as of December 31, 2010.
26.1 COFINS Tax
Lawsuit no. 10980.004398/2010-09 – Curitiba Federal Revenue Service Office.
In the second half of 2010, the 4th District Federal Court’s ruling favorable to the Federal Government in lawsuit no. 2000.04.01.100266-9 became final, overturne the ruling in lawsuit no. 95.0011037-7 which had recognized the Company’s immunity from payment of COFINS tax.
As a result of this ruling, on December 7, 2010 the Federal Revenue Service Office in Curitiba issued Notice no.9/2010 to Copel, requesting payment of COFINS tax from August 1995 to December 1996
65
This charge arises from the understanding by the Brazilian Federal Revenue Services that Copel had declared through DCTF and/or DIPJ, at the appropriate time, that it had a debtor balance for the amount of R$ 40,678 for Cofins in the period charged, and that the liability period for the tax authorities to collect this tax credit had been suspended as from the time of the sentence for the injunction 95.0011037-7, which recognized the Company’s immunity from paying Cofins, but that this was rescinded by the sentence passed by the Federal Regional Courts from the 4th Region in the sentence for process 2000.04.01.100266-9.
This understanding by the Federal Revenue Service and the complexity and peculiarity of the facts and of the legal matter involved have led the Chief Legal Office’s to consider the principal amount of R$ 40,246 a probable loss.
On the other hand, the Company argues in its defense that the declarations contained in its tax liability statements were not acknowledgements of debt, because the liabilities at hand were already under legal dispute (lawsuit no. 95.0011037-7), and that the Federal Revenue Service’s right to collect had already lapsed.
Finally, it is important to state that liability has been suspended for the tax credit, object of this administrative process, according to the terms of art. 151, IV, of the National Tax Code, under the preliminary order granted in the injunction 5005264-27.2011.404.7000, being decided in the lower federal courts for Curitiba, filed by Companhia Paranaense de Energia.
Lawsuit no. 10980.720458/2011-15 – Curitiba Federal Revenue Service Office.
In the second half of 2010, the 4th District Federal Court’s ruling favorable to the Federal Government in lawsuit no. 2000.04.01.100266-9 became final, overturning the ruling in lawsuit no. 95.0011037-7 which had recognized the Company’s immunity from payment of COFINS tax.
As a result of this sentence, the Federal Revenue Services filed the assessment, through which it intends to demand payment of Cofins for the period from October 1998 to June 2001, as a result of rescission claim 2000.04.01.100266-9 being accepted as legally valid.
The Federal Revenue Services understands that the sentence for the Rescission Claim had suspended the liability period for constituting the aforementioned tax credit.
This understanding of the Federal Revenue Services, together with the complexity and peculiarity of both the facts and the legal question involved in the process, explains the Legal Director’s decision to consider the principal amount of R$ 194,317 as representing a probable loss.
Nevertheless, the Company has argued in its defense, that the Federal Government no longer has the right to constitute this tax credit, given the lack of timely constitution of the tax credit, to prevent the liability period from lapsing.
26.2 Rio Pedrinho Energética S.A. and Consórcio Salto Natal Energética S.A.
The companies Rio Pedrinho Energética S.A. and Consórcio Salto Natal Energética S.A. required the filing of the arbitration proceedings with the Chamber of Arbitrage of the Getúlio Vargas Foundation, through which they plead the payment of the overdue installment values, as well as the cancellation fines, related to the electric energy purchase and sale agreements signed with Copel Distribuição. The arbitrage proceedings were judged to be valid and, consequently, Copel Distribuição was sentenced to pay the claimed amounts plus the attorney’s fees. The Company has filed for a court order making the arbitration ruling void.
66
Given that both companies have identified the pledged amounts (R$ 35,913 on June 17, 2010, R$ 22,823 on October 1, 2009 and R$ 11,833 on February 03, 2010), the legal directors have continued to classify the action as representing a probable loss, highlighting that the same bank bond letters were presented as guarantee for the amounts identified, and thus what remains, besides the legal discussion in question, is the possibility of execution of any remaining balance that may be determined as a result of the legal actions in question, which is the reason why management decided to record a financial provision for the legal claims, for the original value of the debts corrected to June 30, 2011, which amounts to R$ 101,941. Of this amount, R$ 14,959 has been recorded to suppliers.
26.3 Ivaí Engenharia de Obras S.A.
In the declaratory action that was considered in the lower Treasury Courts for Curitiba, recognized the right of the company Ivai to receive credits from Copel Geração e Transmissão as a result of executing contract D-01, the object of which was to execute deviation works from the River Jordão, and consisting of the amount to compensate for the supposed financial imbalance from this contract. Based on this decision, Ivai filed a collection claim, which was considered by the 4th Treasury Courts for Curitiba, and the sentenced, which is being contested by Copel, determined the payment of R$ 180,917, which is the historic value as of October 31, 2005, which should be corrected by the average between the INPC and the IGP-DI, plus interest for late payment of 1% per month, from this date, as well as the legal fees, which amount to 3.2% of this amount.
With respect to the dispute in question, in the Writ of Prevention in the report from the state secretary Castro Meira, filed with the STJ under number 15,372 – PR, an injunction was granted in favor of Copel to attribute a suspensive effect for the collection process in question, which also resulted in the suspension of the provisionary execution that had been filed by Ivai.
The Special Appeal received in the collection action is awaiting judgment, which is also in the report from the state secretary Castro Meira, filed under number 1096906 and special appeal in the rescissory action of a report of Judge Arnaldo Esteves Lima, filed under number 1121458.
In summary, given the peculiarities of the process in question, the Legal Directors consider this demand to represent a probable loss. Consequently, a financial provision has been recorded for this legal claim at June 30, 2011, for the amount of R$ 120,664.
26.4 Regulatory
The Company is discussing, in the administrative and judicial spheres, notifications from the Regulatory Body regarding possible non compliance with regulatory norms, amongst others, the amount of R$ 33,812, which refers to legal actions involving Companhia Estadual de Energia Elétrica - CEEE and Dona Francisca Energética S.A., against Aneel Order number 288/02. The probable successful outcome of the actions referred to above will result in alterations to the accounting registers of CCEE, which will require provisions to be recorded for these amounts, given that Copel will actioned to settle the amounts for which it is responsible.
67
Possible Actions
6.30.2011 | 12.31.2010 | |
Tax | 1,170,263 | 1,049,099 |
Labor | 142,800 | 115,626 |
Employee Benefits | 34,681 | 32,796 |
Civil | 316,249 | 141,233 |
Regulatory (a) | 116,324 | 1,629,001 |
1,780,317 | 2,967,755 |
a) Mercado Atacadista de Energia – MAE was extinct, and on November 12, 2004, its activities, its assets and liabilities were absorbed by CCEE, which was incorporated in the form of a private corporate entity, under regulation and investigation by Aneel.
The data on sales of energy by Copel Distribuição, considered in the accounting records of MAE, now CCEE, were not recognized by the Company as being effective and definitive for the years 2000, 2001 and the first quarter of 2002. These data were calculated based on criteria and amounts that take into consideration decisions by the regulatory agency, which are being contested, and the Company has forwarded, via administrative and legal means, measures against such decisions.
The claim is based mainly on the fact that the Company had sold energy, which should not act as the basis for the calculation prepared by the regulatory body, to comply exclusively with contracts with customers located in the market for the South east region. At December 31, 2010, the estimated amount for the differences in the calculation was approximately R$ 1,473,000, which had not been recognized by the Company to liabilities - suppliers.
At March 31, 2011, Management, based on the decision given by the lower courts in favor of the Company and supported by the opinion given by its legal advisors, considered the chances of loss from the final decision for these legal processes to be remote, maintaining this decision at June 30, 2011.
27 SHAREHOLDERS' EQUITY |
27.1 Equity attributable to Parent Company
27.1.1 Stock Capital
As of June 30, 2011, Copel’s paid-in share capital was R$ 6,910,000. The different classes of shares (with no par value) and main shareholders are detailed below:
68
In shares | ||||||||
Shareholders | Common | Classe A Preferred | Classe B Preferred | Total | ||||
% | % | % | % | |||||
State fo Paraná | 85,028,598 | 58.63 | - | - | 13,639 | 0.01 | 85,042,237 | 31.08 |
BNDESPAR | 38,298,775 | 26.41 | - | - | 27,282,006 | 21.27 | 65,580,781 | 23.96 |
Eletrobras | 1,530,774 | 1.06 | - | - | - | - | 1,530,774 | 0.56 |
Free Float: | ||||||||
BM&FBOVESPA (1) |
19,485,673 | 13.44 | 129,439 | 33.37 | 57,794,410 | 45.07 | 77,409,522 | 28.29 |
NYSE (2) |
135,075 | 0.09 | - | - | 42,969,274 | 33.51 | 43,104,349 | 15.75 |
Latibex (3) |
- | - | - | - | 139,497 | 0.11 | 139,497 | 0.05 |
Municipalities | 178,393 | 0.12 | 12,797 | 3.30 | - | - | 191,190 | 0.07 |
Other shareholders | 373,792 | 0.25 | 245,661 | 63.33 | 37,572 | 0.03 | 657,025 | 0.24 |
145,031,080 | 100.00 | 387,897 | 100.00 | 128,236,398 | 100.00 | 273,655,375 | 100.00 | |
(1) São Paulo Stock, Commodities, and Futures Exchange | ||||||||
(2) New York Stock Exchange | ||||||||
(3) Latin American Exchange in Euros, related to the Madrid Exchange |
The market value of Company stock as of June 30, 2011 is shown below:
Number of shares | Market value | |
Common shares | 145,031,080 | 5,510,845 |
Class A preferred shares | 387,897 | 15,520 |
Class B preferred shares | 128,236,398 | 5,360,442 |
273,655,375 | 10,886,807 |
Each common share entitles its holder to one vote in the general shareholders’ meetings. Preferred shares, which do not carry voting rights, are divided into classes A and B.
Class “A” preferred shares have priority in the reimbursement of capital and the right to non-cumulative annual dividends of 10%, calculated proportionately to the capital represented by the shares of this class, paid until December 31, 2011.
Class “B” preferred shares have priority in the reimbursement of capital and the right to the distribution of minimum dividends, calculated as 25% of adjusted net income, pursuant to the corporate legislation and to the Company’s by-laws, calculated proportionately to the capital represented by the shares of this class. Class “B” shareholders have priority only over the common shareholders in the distribution of mandatory dividends, which shall only be paid out of the remaining net income after the payment of priority dividends to class “A” shareholders.
According to Article 17 and following paragraphs of Federal Law 6,404/76, dividends paid to preferred shares must be at least 10% higher than those paid to common shares.
27.1.2 Equity Valuation Adjustments
The Company recognized the fair value adjustment of its property, plant and equipment of the date of the first-time adoption of the IFRSs. A counterpart entry to this adjustment, net of deferred income tax and social contribution, was recorded in the equity valuation adjustments account, under equity. The realization is accounted for in the retained earnings account, as depreciation and write-off of the property, plant, and equipment fair value adjustment are recorded to income.
69
27.1.3 Basic and diluted profit per share
. | ||
Parent Company | ||
6.30.2011 | 6.30.2010 | |
Basic and diluted numerator | ||
Basic and diluted net income per share category, attributable to parent company |
||
Class A preferred shares |
948 | 847 |
Class B preferred shares |
312,456 | 275,009 |
Common shares |
321,255 | 282,767 |
634,659 | 558,623 | |
Basic and diluted denominator | ||
Weighted average number of shares (in thousands) |
||
Class A preferred shares |
388,935 | 394,857 |
Class B preferred shares |
128,235,360 | 128,229,438 |
Common shares |
145,031,080 | 145,031,080 |
273,655,375 | 273,655,375 | |
Basic and diluted earning per share attributable to Parent Company | ||
Class A preferred shares |
2.4374 | 2.1451 |
Class B preferred shares |
2.4366 | 2.1447 |
Common shares |
2.2151 | 1.9497 |
The weighted average amount of common shares used in the calculation of the basic earnings per share is reconciliated with the weighted average amount of common shares used in the calculation of diluted earnings per share, since there are no financial instruments with diluting potential.
27.2 Equity attributable to non-controlling interest
Consolidated | Compagas | Elejor | UEG Araucária | Total |
As of December 31, 2010 | 95,393 | 41,464 | 128,846 | 265,703 |
Reimbursement of advance for future capital increase - AFAC |
- | (19,689) | - | (19,689) |
Proposed dividends |
(6,335) | - | - | (6,335) |
Results for the period |
8,746 | (687) | (406) | 7,653 |
As of June 30, 2011 | 97,804 | 21,088 | 128,440 | 247,332 |
Consolidated | Compagas | Elejor | UEG Araucária | Total |
As of December 31, 2009 | 91,478 | 6,634 | 130,253 | 228,365 |
Funds for capital increase |
- | 54,000 | - | 54,000 |
Proposed dividends |
(853) | - | - | (853) |
Results for the period |
10,728 | 4,441 | (3,082) | 12,087 |
As of June 30, 2010 | 101,353 | 65,075 | 127,171 | 293,599 |
70
28 OPERATING REVENUES |
Consolidated | Gross revenues |
PIS/Pasep Cofins taxes |
ICMS (VAT) | Regulatory charges |
Service tax (ISSQN ) |
Net revenues |
6.30.2011 | ||||||
Electricity sales to final customers |
1,823,819 | (169,001) | (485,209) | (14,900) | - | 1,154,709 |
Electricity sales to distributors |
785,054 | (75,561) | (157) | (30,081) | - | 679,255 |
Charges for the use of the main transmission grid |
2,514,491 | (228,375) | (621,017) | (342,970) | - | 1,322,129 |
Construction revenues |
276,455 | - | - | - | - | 276,455 |
Revenues from telecommunications |
73,541 | (3,972) | (12,189) | - | (365) | 57,015 |
Distribution of piped gas |
158,386 | (14,334) | (19,901) | - | (8) | 124,143 |
Other operating revenues |
66,269 | (6,337) | (1) | (4,616) | (483) | 54,832 |
5,698,015 | (497,580) | (1,138,474) | (392,567) | (856) | 3,668,538 | |
Consolidated | Gross revenues |
PIS/Pasep Cofins taxes |
ICMS (VAT) | Regulatory charges |
Service tax (ISSQN ) |
Net revenues |
6.30.2010 | ||||||
Electricity sales to final customers |
1,757,675 | (162,883) | (477,852) | (14,421) | - | 1,102,519 |
Electricity sales to distributors |
745,080 | (71,341) | (168) | (27,358) | - | 646,213 |
Charges for the use of the main transmission grid |
1,942,705 | (177,355) | (466,313) | (263,488) | - | 1,035,549 |
Construction revenues |
272,920 | - | - | - | - | 272,920 |
Revenues from telecommunications |
60,934 | (3,503) | (11,003) | - | (410) | 46,018 |
Distribution of piped gas |
148,456 | (12,197) | (18,702) | - | (9) | 117,548 |
Other operating revenues |
56,952 | (7,564) | (1) | (4,803) | (484) | 44,100 |
4,984,722 | (434,843) | (974,039) | (310,070) | (903) | 3,264,867 |
28.1 Regulatory Charges
. | ||
Consolidated | ||
6.30.2011 | 6.30.2010 | |
Fuel Consumptuon Account (CCC) |
166,264 | 114,864 |
Energy Development Account (CDE) |
124,679 | 113,530 |
Global Reversal Reserve (RGR) |
61,445 | 46,025 |
Research and Development and Energy Efficiency Programs - R&D and EEP |
33,079 | 29,649 |
Other charges |
7,100 | 6,002 |
392,567 | 310,070 |
28.2 Power sales to final customers and use of the power grid by customer category
Consolidated | Electicity sales to final customers | Use of the power grid | ||
6.30.2011 | 6.30.2010 | 6.30.2011 | 6.30.2010 | |
Residential |
611,784 | 590,984 | 771,871 | 601,447 |
Industrial |
598,801 | 582,011 | 694,692 | 524,105 |
Commercial, services and other activities |
405,875 | 382,069 | 543,029 | 391,438 |
Rural |
81,176 | 76,728 | 107,778 | 77,984 |
Public agencies |
51,523 | 50,904 | 68,525 | 51,839 |
Public lighting |
36,113 | 39,009 | 52,526 | 39,750 |
Public services |
38,547 | 35,970 | 51,273 | 36,637 |
Free consumers |
- | - | 100,349 | 79,357 |
Basic Network, BN connections, and connection grid |
- | - | 1,340 | 1,336 |
Operation and maintenance (O&M) revenues |
- | - | 21,489 | 22,629 |
Effective interest revenues |
- | - | 101,619 | 116,183 |
1,823,819 | 1,757,675 | 2,514,491 | 1,942,705 |
71
28.3 Power sales to distributors |
Consolidated | ||
6.30.2011 | 6.30.2010 | |
Agreements for Power Trade on the Regulated Market - CCEAR (auction) |
605,807 | 558,135 |
Bilateral contracts |
114,296 | 109,784 |
Electric Energy Trading Chamber - CCEE |
64,951 | 77,161 |
785,054 | 745,080 |
28.4 Other operating revenues
Consolidated | ||
6.30.2011 | 6.30.2010 | |
Leases and rents |
44,149 | 34,742 |
Revenues from services |
18,446 | 17,062 |
Charged service |
2,618 | 3,993 |
Other revenues |
1,056 | 1,155 |
66,269 | 56,952 |
29 OPERATING COSTS AND EXPENSES |
Consolidated operating costs and expenses are broken down below:
Nature of costs and expenses | Costs of goods and/or services |
Sales expenses |
General and administrative expenses |
Other rev. (exp.), net |
Total Consolidated |
6.30.2011 | |||||
Electricity purchased for resale (29.1) | (1,052,346) | - | - | - | (1,052,346) |
Use of main distribution and transmission grid (29.2) | (302,406) | - | - | - | (302,406) |
Personnel and management (29.3) | (325,267) | (3,572) | (93,030) | - | (421,869) |
Pension and healthcare plans (21) | (50,067) | (350) | (13,286) | - | (63,703) |
Materials and supplies (29.4) | (34,385) | (430) | (4,692) | - | (39,507) |
Raw materials and supplies for power | |||||
generation | (13,368) | - | - | - | (13,368) |
Natural gas and supplies for the gas business | (78,082) | - | - | - | (78,082) |
Third-party services (29.5) | (123,254) | (14,547) | (41,178) | - | (178,979) |
Depreciation and amortization | (254,812) | (20) | (14,311) | (742) | (269,885) |
Accruals and provisions (29.6) | - | (15,277) | - | (31,023) | (46,300) |
Construction cost (29.7) | (275,570) | - | - | - | (275,570) |
Other costs and expenses (29.8) | 630 | 1,943 | (37,532) | (109,606) | (144,565) |
(2,508,927) | (32,253) | (204,029) | (141,371) | (2,886,580) |
72
Nature of costs and expenses | Costs of goods and/or services |
Sales expenses |
General and administrative expenses |
Other rev. (exp.), net |
Total Consolidated |
6.30.2010 | |||||
Electricity purchased for resale (29.1) |
(945,378) | - | - | - | (945,378) |
Use of main distribution and transmission grid (29.2) |
(283,397) | - | - | - | (283,397) |
Personnel and management (29.3) |
(294,508) | (2,470) | (76,790) | - | (373,768) |
Pension and healthcare plans (21) |
(40,676) | (278) | (10,749) | - | (51,703) |
Materials and supplies (29.4) |
(34,878) | (811) | (4,100) | - | (39,789) |
Raw materials and supplies for power |
|||||
generation |
(10,882) | - | - | - | (10,882) |
Natural gas and supplies for the gas business |
(69,306) | - | - | - | (69,306) |
Third-party services (29.5) |
(109,973) | (15,346) | (29,779) | - | (155,098) |
Depreciation and amortization |
(259,280) | (4) | (13,650) | (1,915) | (274,849) |
Accruals and provisions (29.6) |
- | (10,942) | - | (53,994) | (64,936) |
Construction cost (29.7) |
(272,892) | - | - | - | (272,892) |
Other costs and expenses (29.8) |
(6,705) | 2,410 | (21,079) | (84,897) | (110,271) |
(2,327,875) | (27,441) | (156,147) | (140,806) | (2,652,269) |
The parent company’s operating costs and expenses comprise the following:
Nature of costs and expenses | General and administrative expenses |
Other rev. (exp.), net |
Total Parent Company |
6.30.2011 | |||
Personnel and management (29.3) |
(4,236) | - | (4,236) |
Pension and healthcare plans |
(323) | - | (323) |
Materials and supplies |
(26) | - | (26) |
Third-party services (29.5) |
(2,368) | - | (2,368) |
Depreciation and amortization |
- | (377) | (377) |
Accruals and provisions (29.6) |
- | 7,188 | 7,188 |
Other operating expenses |
(7,946) | 144 | (7,802) |
(14,899) | 6,955 | (7,944) | |
Nature of costs and expenses | General and administrative expenses |
Other rev. (exp.), net |
Total Parent Company |
6.30.2010 | |||
Personnel and management (29.3) |
(3,638) | - | (3,638) |
Pension and healthcare plans |
(166) | - | (166) |
Materials and supplies |
(7) | - | (7) |
Third-party services (29.5) |
(2,491) | - | (2,491) |
Depreciation and amortization |
- | (377) | (377) |
Accruals and provisions (29.6) |
- | (15,195) | (15,195) |
Other operating expenses |
(551) | 165 | (386) |
(6,853) | (15,407) | (22,260) |
73
29.1 Electricity purchased for resale
Consolidated | ||
6.30.2011 | 6.30.2010 | |
Eletrobrás - Centrais Elétricas Brasileiras S. A. (Itaipu) |
214,186 | 243,509 |
Furnas Centrais Elétricas S. A. - auction |
183,113 | 172,205 |
Companhia Hidro Elétrica do São Francisco - Chesf - auction |
170,519 | 161,077 |
Itiquira Energética S.A. |
62,758 | 58,228 |
Tradener Ltda. |
7,044 | - |
Companhia Energética de São Paulo - Cesp - auction |
66,210 | 62,122 |
Centrais Elétricas do Norte do Brasil S. A. - Eletronorte - auction |
56,473 | 53,168 |
Program for incentive to alternative energy sources - Proinfa |
51,497 | 53,024 |
Petróleo Brasileiro S.A. - Petrobras - auction |
49,812 | 33,224 |
Electric Energy Trading Chamber - CCEE |
16,621 | 28,812 |
Dona Francisca Energética S. A. |
31,015 | 29,786 |
Companhia Energética de Minas Gerais - Cemig - auction |
27,059 | 25,298 |
Companhia de Geração Térmica de Energia Elétrica - Eletrobras CGTEE - auction |
17,057 | 2,919 |
Cia. Estadual de Geração e Transmissão de Energia Elétrica S. A. - CEEE - auction |
19,298 | 18,251 |
Light S. A. - auction |
14,634 | 13,821 |
ThyssenKrupp CSA Companhia Siderúrgica - UTE Atlântico - auction |
14,569 | - |
Tractbel Energia S. A. - auction |
10,778 | 10,103 |
Duke Energy International, Geração Paranapanema S.A. - auction |
9,986 | 9,347 |
(-) PIS/Pasep/Cofins taxes on electricity purchased for resale |
(93,443) | (100,316) |
Others - auction |
123,160 | 70,800 |
1,052,346 | 945,378 |
74
29.2 Use of main transmission grid
Consolidated | ||
6.30.2011 | 6.30.2010 | |
Furnas Centrais Elétricas S.A. |
62,727 | 65,232 |
Cia Transmissora de Energia Elétrica Paulista - Cteep |
36,156 | 34,430 |
Companhia Hidro Elétrica do São Francisco - Chesf |
28,925 | 31,299 |
Centrais Elétricas do Norte do Brasil S. A. - Eletronorte |
27,285 | 23,231 |
Eletrosul Centrais Elétricas S.A. |
20,196 | 23,762 |
Companhia Energética de Minas Gerais - Cemig |
10,996 | 14,759 |
TSN Transmissora Nordeste Sudeste de Energia S.A. |
10,901 | 10,230 |
Novatrans Energia S.A. |
10,713 | 10,247 |
National System Operator - ONS |
10,694 | 10,529 |
Empresa Amazonense de Transmissão de Energia - Eate |
8,986 | 8,560 |
Cia Estadual de Geração e Transmissão de Energia Elétrica S. A. - CEEE |
8,593 | 9,211 |
ATE II Transmissora de Energia S.A. |
4,626 | 4,383 |
Empresa Norte de Transmissão de Energia S.A. - Ente |
4,579 | 4,349 |
Itumbiara Transmissora de Energia Ltda |
4,360 | 4,138 |
Expansion Transmissora de Energia Elétrica S.A. |
4,125 | 3,964 |
Empresa Transmissora de Energia Oeste Ltda - Eteo |
3,689 | 3,554 |
STN Sistema de Transmissão Nordeste S.A |
3,644 | 3,490 |
NTE Nordeste Transmissora de Energia S.A |
3,196 | 3,069 |
ATE Transmissora Energia S.A |
3,039 | 2,730 |
Integração Transmissão Energia - Intesa |
2,887 | 2,708 |
Serra Mesa Transm. Energia Ltda. - SMTE |
2,741 | 2,247 |
ATE III Transmissora Energia S.A |
2,473 | 2,241 |
LT Triângulo S.A. |
2,460 | 2,340 |
SC Energia - Empresa Transmissora Energia Sta Catarina |
2,269 | 2,231 |
Empresa Paraense Transmissão de Energia S/A - Etep |
2,056 | 2,004 |
Arthemis Transmissora de Energia S. A |
1,967 | 1,844 |
IENNE - Interligação Elétrica Norte Nordeste |
1,262 | - |
Encargo de Energia de Reserva - ER |
2,638 | - |
System Service Charges - ESS |
8,443 | 3,159 |
(-) PIS/Pasep/Cofins taxes on charges for use of power grid |
(26,870) | (31,757) |
Others |
32,650 | 25,213 |
302,406 | 283,397 |
75
29.3 Personnel and Management Expenses
Parent Company |
Consolidated | |||
6.30.2011 | 6.30.2010 | 6.30.2011 | 6.30.2010 | |
Personnel | ||||
Wages and salaries |
- | - | 283,352 | 240,882 |
Social charges on payroll |
- | - | 99,155 | 88,134 |
- | - | 382,507 | 329,016 | |
Profit sharing |
- | - | 41,319 | 32,545 |
Meal assistance and education allowance |
- | - | 33,339 | 29,642 |
Compensation - Voluntary termination Program/retirement |
- | - | 21,781 | 13,706 |
- | - | 478,946 | 404,909 | |
(-) Transfers to construction in progress (a) |
- | - | (62,900) | (36,572) |
- | - | 416,046 | 368,337 | |
Management | ||||
Wages and salaries |
3,343 | 2,881 | 4,723 | 4,495 |
Social charges on payroll |
893 | 757 | 1,100 | 936 |
4,236 | 3,638 | 5,823 | 5,431 | |
4,236 | 3,638 | 421,869 | 373,768 |
a) Amount related to the allocation of construction in progress direct labor, not taking into account administrative expenses.
29.4 Materials and Supplies
Consolidated | ||
6.30.2011 | 6.30.2010 | |
Materials for the electric system |
12,390 | 13,485 |
Fuel and vehicle parts |
12,269 | 12,078 |
Cafeteria supplies |
4,448 | 3,582 |
Materials for civil construction |
2,539 | 2,212 |
Office supplies |
2,392 | 2,188 |
Tools |
1,263 | 799 |
Lodging supplies |
761 | 633 |
Clothing and uniforms |
702 | 1,145 |
Safety supplies |
692 | 945 |
IT equipment |
671 | 415 |
Cleaning and preservation |
327 | 267 |
Other materials |
1,053 | 2,040 |
39,507 | 39,789 |
76
29.5 Services from third-parties
Parent Company |
Consolidated | |||
6.30.2011 | 6.30.2010 | 6.30.2011 | 6.30.2010 | |
Transmission grid |
- | - | 43,238 | 42,324 |
Meter reading and bill delivery |
- | - | 12,397 | 14,658 |
Authorized and registered agents |
- | - | 12,149 | 11,715 |
Data processing and transmission |
- | - | 11,776 | 9,031 |
Technical, scientific and administrative consulting |
693 | 851 | 9,735 | 9,465 |
Administrative support services |
- | - | 9,588 | 8,394 |
Telephone services |
- | - | 9,188 | 5,709 |
Security |
- | - | 9,118 | 8,155 |
Travel |
150 | 72 | 8,179 | 6,218 |
Upkeep of right of way areas |
- | - | 5,589 | 4,839 |
Civil maintenance services |
- | - | 5,562 | 5,192 |
Personnel training |
24 | 1 | 4,865 | 4,109 |
Services in "green areas" |
- | - | 4,459 | 3,342 |
Customer service |
- | - | 3,441 | 3,601 |
Vehicle maintenance and repairs |
- | - | 2,954 | 2,429 |
Cargo shipping |
- | - | 2,219 | 2,057 |
Postal services |
- | - | 2,101 | 1,673 |
Telephone operator |
- | - | 1,786 | 1,731 |
Auditing |
964 | 1,094 | 1,536 | 1,615 |
Advertising |
358 | 305 | 1,258 | 982 |
Satellite communications |
- | - | 1,096 | 2,502 |
Other services |
179 | 168 | 16,745 | 5,357 |
2,368 | 2,491 | 178,979 | 155,098 |
29.6 Accruals and provisions
Parent Company | Consolidated | |||
6.30.2011 | 6.30.2010 | 6.30.2011 | 6.30.2010 | |
Allowance for doubtful accounts | ||||
Trade account receivable | - | - | 15,204 | 10,960 |
Other receivables | 73 | (18) | ||
15,277 | 10,942 | |||
Provisions for losses on taxes recoverable | - | - | 15,773 | - |
Reserve (reversals) for risks (Note 26) | ||||
Tax |
(9,123) | - | (19,888) | 13,390 |
Labor |
- | - | 1,194 | 25,978 |
Employee benefits |
- | - | 10,262 | 5,222 |
Suppliers |
- | - | 1,710 | 2,123 |
Civil and administrative claims |
1,935 | 8,930 | 15,704 | (6,572) |
Easement of necessity |
- | - | (3,060) | 7,014 |
Expropriation and equity |
- | - | 8,591 | 6,666 |
Customers |
- | - | 699 | 180 |
Regulatory |
- | 6,265 | 38 | (7) |
(7,188) | 15,195 | 15,250 | 53,994 | |
(7,188) | 15,195 | 46,300 | 64,936 |
77
29.7 Cost of construction
The table below shows the balances of the cost of construction allocated to the respective types of expenditure:
Consolidated | ||
6.30.2011 | 6.30.2010 | |
Materials and supplies | 156,802 | 164,264 |
Third-party services | 82,800 | 73,786 |
Personnel and management | 29,031 | 20,863 |
Other | 6,937 | 13,979 |
275,570 | 272,892 |
29.8 Other operating costs and expenses
Consolidated | ||
6.30.2011 | 6.30.2010 | |
Financial compensation for use of water resources |
61,323 | 60,315 |
Losses in the decommissioning and disposal of assets |
35,338 | 12,107 |
Indemnities |
19,583 | 6,952 |
Taxes |
10,713 | 7,766 |
ANEEL inspection fee |
9,406 | 9,977 |
Leases and rents |
8,416 | 7,402 |
Insurance |
3,673 | 3,573 |
Own power consumption |
3,647 | 3,096 |
Advertising |
2,406 | 1,947 |
Provision for losses - receivables related to concession |
2,302 | 10,438 |
Sports incentives, Rouanet Law and fund for the rights of children and t e |
315 | 1,850 |
Recovery of costs and expenses |
(21,106) | (23,688) |
Other costs and expenses, net |
8,549 | 8,536 |
144,565 | 110,271 |
78
30 FINANCIAL INCOME (EXPENSES) |
Parent Company | Consolidated | |||
6.30.2011 | 6.30.2010 | 6.30.2011 | 6.30.2010 | |
Financial revenues | ||||
Return on financial investments held for sale |
2,796 | 15,230 | 114,594 | 70,067 |
Return on financial investments held until maturity |
- | 42 | 2,440 | 1,868 |
Monetary variation of receivables related to concession |
- | - | 59,437 | 69,954 |
Monetary variation of CRC transfer (Note 6) |
- | - | 37,778 | 66,039 |
Return on CRC transfer (Note 6) |
- | - | 42,907 | 40,172 |
Penalties on overdue bills |
- | - | 32,544 | 35,227 |
Interest on prepaid taxes |
5,165 | 3,107 | 8,079 | 4,220 |
Fines |
- | - | 7,191 | 4,884 |
Interest and commissions on loan agreements |
52,148 | 39,236 | - | - |
Other financial revenues |
829 | 4,504 | 3,509 | 7,158 |
60,938 | 62,119 | 308,479 | 299,589 | |
(-) Financial expenses | ||||
Debt charges |
53,790 | 42,186 | 68,739 | 59,115 |
Monetary variation of payables related to concession - use of public property |
- | - | 37,107 | 19,783 |
PIS/Pasep and Cofins tax of interests on own capital |
755 | 345 | 1,603 | 745 |
Monetary and exchange variations |
1 | - | 8,588 | 13,510 |
Interest on R&D and EEP |
- | - | 8,868 | 6,982 |
Interest on tax installments |
5,254 | 4,826 | 6,054 | 7,642 |
IOF tax |
- | 9 | 6,705 | 6,882 |
Other financial expenses |
12,262 | - | 23,676 | 2,248 |
72,062 | 47,366 | 161,340 | 116,907 | |
(11,124) | 14,753 | 147,139 | 182,682 |
31 OPERATIONAL SEGMENTS |
31.1 Products and services which generate revenues for the reporting segment
The Company operates in five reporting segments identified by management, through the Chief Executive Office and the chief offices of each business area, taking into consideration the regulatory environments, the strategic business units, and the different products and services. These segments are managed separately, since each business and each company requires different technologies and strategies.
During the semester ended June 30, 2011 all sales were made within Brazilian territory.
We have not identified any Company customer who individually accounts for more than 10% of total net revenues during the semester ended June 30, 2011.
The Group’s reporting segments are:
Power generation and transmission (GET) – this segment comprises the generation of electric energy from hydraulic, wind, and thermal projects, the transport and transformation of the power generated by the Company, and the construction, operation, and maintenance of all power transmission substations and lines. This segment operates through Copel Geração e Transmissão, Elejor, UEG Araucária and Centrais Eólicas do Paraná;
79
Power distribution and sales (DIS) – this segment comprises the distribution and sale of electric energy, the operation and maintenance of the distribution infrastructure, and related services. It operates through Copel Distribuição;
Telecommunications (TEL) – this segment comprises telecommunications and general communications services. It operates through Copel Telecomunicações;
Gas – this segment comprises the public service of piped natural gas distribution. It operates through Compagás; and
Holding Company (HOL) - this segment comprises participation in other companies. It operates through Copel and Dominó Holdings.
The Company evaluates the performance of each segment based on information derived from accounting records.
The accounting policies of the operational segments are the same as those described in the summary of main accounting practices and record transactions between segments as transactions with third-parties, i.e., at current market prices.
31.2 Assets per reporting segment
ASSETS 6.30.2011 |
GET | DIS | TEL | GÁS | HOL | Eliminations | Consolidated |
TOTAL ASSETS |
10,120,494 | 7,324,605 | 329,953 | 264,833 | 13,446,421 | (12,884,326) | 18,601,980 |
CURRENT ASSETS |
1,811,757 | 2,247,831 | 55,680 | 64,908 | 1,275,785 | (1,198,454) | 4,257,507 |
Cash and cash equivalents |
1,330,616 | 665,928 | 1,956 | 30,467 | 15,044 | (367,693) | 1,676,318 |
Financial investments - securities |
112,390 | 52,885 | - | - | 157 | 367,719 | 533,151 |
Restricted Financial investments - collaterals and escrow accounts |
2 | 201 | - | 234 | - | - | 437 |
Trade accounts receivable |
211,268 | 1,183,826 | 32,457 | 30,699 | - | (43,715) | 1,414,535 |
Dividends receivable |
5,106 | - | - | - | 1,157,037 | (1,154,284) | 7,859 |
CRC tranferred to State Government of Paraná |
- | 61,649 | - | - | - | - | 61,649 |
Receivable related to concession |
66,563 | - | - | - | - | - | 66,563 |
Other receivables |
56,549 | 126,099 | 1,832 | 1,247 | 7 | (481) | 185,253 |
Inventories |
22,729 | 92,737 | 16,606 | 1,366 | - | - | 133,438 |
Income tax and social contribution |
4,974 | 21,976 | 13 | 1 | 103,525 | - | 130,489 |
Other current recoverable taxes |
722 | 32,581 | 2,744 | 564 | - | - | 36,611 |
Prepaid expenses |
838 | 9,949 | 72 | 330 | 15 | - | 11,204 |
NONCURRENT ASSETS |
8,308,737 | 5,076,774 | 274,273 | 199,925 | 12,170,636 | (11,685,872) | 14,344,473 |
Long term assets |
1,049,078 | 3,794,301 | 17,366 | 27,499 | 1,481,316 | (1,123,273) | 5,246,287 |
Financial investments |
- | 25,679 | - | 1,933 | - | - | 27,612 |
Trade accounts receivable |
- | 43,816 | - | 13,167 | - | (13,167) | 43,816 |
CRC tranferred to State Government of Paraná |
- | 1,288,387 | - | - | - | - | 1,288,387 |
Judicial deposits |
18,866 | 156,740 | 647 | 215 | 222,937 | - | 399,405 |
Receivable related to concession |
884,166 | 1,862,696 | - | - | - | - | 2,746,862 |
Advances to suppliers |
- | - | - | 11,017 | - | - | 11,017 |
Other receivables |
1,878 | 3,228 | - | 164 | - | - | 5,270 |
Income tax and social contribution |
13,061 | - | - | - | - | - | 13,061 |
Other current recoverable taxes |
4,613 | 63,839 | 9,029 | - | - | - | 77,481 |
Deferred Income tax and social contribution |
126,494 | 349,916 | 7,690 | 1,003 | 148,273 | - | 633,376 |
Receivable from other related parties |
- | - | - | - | 1,110,106 | (1,110,106) | - |
Investments |
389,427 | 4,232 | - | - | 10,689,320 | (10,581,265) | 501,714 |
Property, plant and equipment, net |
6,613,357 | - | 242,910 | - | - | - | 6,856,267 |
Intangible assets |
256,875 | 1,278,241 | 13,997 | 172,426 | - | 18,666 | 1,740,205 |
80
31.3 Liabilities per reporting segment
LIABILITIES 6.30.2011 |
GET | DIS | TEL | GÁS | HOL | Eliminations | Consolidated |
TOTAL LIABILITIES |
10,120,494 | 7,324,605 | 329,953 | 264,833 | 13,446,421 | (12,884,326) | 18,601,980 |
CURRENT LIABILITIES |
1,290,022 | 1,520,460 | 38,302 | 57,383 | 779,097 | (1,203,373) | 2,481,891 |
Payroll and labor provisions |
50,188 | 130,139 | 12,422 | 3,694 | 191 | - | 196,634 |
Suppliers |
197,477 | 438,418 | 11,328 | 35,171 | 545 | (44,114) | 638,825 |
Income tax and social contribution |
110,708 | 77,911 | 84 | 1,461 | - | - | 190,164 |
Other taxes |
18,592 | 222,506 | 2,754 | 2,357 | 69,520 | (82) | 315,647 |
Loans and financing |
47,123 | 17,629 | - | 3,188 | 18,469 | (4,919) | 81,490 |
Debentures |
- | - | - | - | 623,104 | - | 623,104 |
Dividends payable |
774,612 | 355,968 | 10,474 | 11,277 | 67,188 | (1,154,284) | 65,235 |
Post employment benefits |
6,582 | 16,827 | 1,132 | - | 80 | - | 24,621 |
Customer charges payable |
4,623 | 75,851 | - | - | - | - | 80,474 |
Research and development and energy efficiency |
15,687 | 130,232 | - | - | - | - | 145,919 |
Payable related to concession - use of public property |
41,375 | - | - | - | - | - | 41,375 |
Other accounts payable |
23,055 | 54,979 | 108 | 235 | - | 26 | 78,403 |
NON CURRENT LIABILITIES |
2,439,578 | 2,198,050 | 32,505 | 7,849 | 691,594 | (1,133,854) | 4,235,722 |
Associated and subsidiary companies |
312,007 | 747,241 | 15,500 | - | - | (1,074,748) | - |
Suppliers |
140,655 | - | - | - | - | (13,167) | 127,488 |
Taxes |
388 | - | - | - | - | - | 388 |
Deferred Income tax and social contribution |
819,001 | 51,122 | - | 6,268 | 25,297 | - | 901,688 |
Loans and financing |
447,960 | 684,207 | - | - | 375,539 | (45,939) | 1,461,767 |
Post employment benefits |
109,891 | 276,017 | 16,618 | 1,165 | - | - | 403,691 |
Research and development and energy efficiency |
31,564 | 87,864 | - | - | - | - | 119,428 |
Payable related to concession - use of public property |
358,474 | - | - | - | - | - | 358,474 |
Other accounts payable |
- | - | - | 16 | - | - | 16 |
Provisions for legal claims |
219,638 | 351,599 | 387 | 400 | 290,758 | - | 862,782 |
SHAREHOLDERS' EQUITY |
6,390,894 | 3,606,095 | 259,146 | 199,601 | 11,975,730 | (10,547,099) | 11,884,367 |
Capital |
4,285,945 | 2,624,841 | 194,755 | 135,943 | 7,023,368 | (7,354,852) | 6,910,000 |
Capital reserves |
38,405 | - | - | - | - | (38,405) | - |
Equity evaluation adjustments |
1,499,168 | 11,495 | - | - | 1,519,917 | (1,515,290) | 1,515,290 |
Legal reserve |
182,162 | 108,500 | 3,521 | 14,636 | 494,005 | (324,522) | 478,302 |
Profit retention reserve |
145,364 | 570,007 | 43,086 | 31,172 | 2,072,940 | (806,043) | 2,056,526 |
Unrealized income reserve |
191,899 | (191,899) | - | ||||
Accumulated income (losses) |
239,850 | 291,252 | 17,784 | 17,850 | 673,601 | (563,420) | 676,917 |
Attributable to non controlling interest |
- | - | - | - | - | 247,332 | 247,332 |
31.4 Statement of income per reporting segment
STATEMENT OF INCOME 6.30.2011 |
GET | DIS | TEL | GÁS | HOL | Eliminations | Consolidated |
OPERATIONAL INCO ME |
1,062,683 | 2,597,513 | 76,451 | 134,453 | - | (202,562) | 3,668,538 |
Electricity sales to final customers - third-parties |
49,309 | 1,105,400 | - | - | - | - | 1,154,709 |
Electricity sales to final customers - between segments |
- | 2,859 | - | - | - | (2,859) | - |
Electricity sales to distributors - third-parties |
645,649 | 33,606 | - | - | - | - | 679,255 |
Electricity sales to distributors - between segments |
135,851 | - | - | - | - | (135,851) | - |
Use of the power grid - third-parties |
112,203 | 1,209,926 | - | - | - | - | 1,322,129 |
Use of the power grid - between segments |
34,348 | 6,541 | - | - | (40,889) | - | |
Construction revenues |
54,490 | 212,762 | - | 9,203 | - | - | 276,455 |
Telecommunications services to third-parties |
- | - | 57,015 | - | - | - | 57,015 |
Telecommunications services between segments |
- | - | 19,436 | - | (19,436) | - | |
Distribution of piped gas |
- | - | - | 124,143 | - | - | 124,143 |
Other operating revenues from third-parties |
27,948 | 25,777 | - | 1,107 | - | - | 54,832 |
Other operating revenues between segments |
2,885 | 642 | - | - | - | (3,527) | - |
OPERATIONAL CO STS AND EXPENSES |
(623,077) | (2,297,671) | (50,448) | (109,326) | (8,620) | 202,562 | (2,886,580) |
Electricity purchased for resale |
(36,631) | (1,151,566) | - | - | - | 135,851 | (1,052,346) |
Charges for the use of the power grid |
(102,276) | (241,019) | - | - | - | 40,889 | (302,406) |
Personnel and management |
(105,165) | (280,045) | (24,819) | (7,594) | (4,246) | - | (421,869) |
Pension and healthcare plans |
(15,743) | (44,115) | (3,017) | (505) | (323) | - | (63,703) |
Materials and supplies |
(7,012) | (30,903) | (827) | (738) | (27) | - | (39,507) |
Raw materials and supplies for generation |
(13,368) | - | - | - | - | - | (13,368) |
Natural gas and supplies for gas business |
- | - | - | (78,082) | - | - | (78,082) |
Third party services |
(44,183) | (144,164) | (8,132) | (5,087) | (2,653) | 25,240 | (178,979) |
Depreciation and amortization |
(157,463) | (93,946) | (11,455) | (6,279) | (742) | - | (269,885) |
Provisions and reversals |
(1,382) | (52,482) | 393 | (17) | 7,188 | - | (46,300) |
Construction cost |
(53,605) | (212,762) | - | (9,203) | - | - | (275,570) |
Other operating costs and expenses |
(86,249) | (46,669) | (2,591) | (1,821) | (7,817) | 582 | (144,565) |
RESULT OF EQUITY IN INVESTEES AND SUBSIDIARIES |
(758) | - | - | - | 673,128 | (637,488) | 34,882 |
RESULT OF OPERATIONS |
438,848 | 299,842 | 26,003 | 25,127 | 664,508 | (637,488) | 816,840 |
Interest income (expenses) |
10,897 | 145,055 | 875 | 2,224 | (11,912) | - | 147,139 |
OPERATING INCOME (LOSSES) |
449,745 | 444,897 | 26,878 | 27,351 | 652,596 | (637,488) | 963,979 |
Income tax and social contribution |
(172,203) | (246,034) | (10,356) | (10,568) | - | - | (439,161) |
Deferred Income tax and social contribution |
19,260 | 92,389 | 1,262 | 1,067 | 3,516 | - | 117,494 |
INCOME (LOSSES) FO R THE PERIOD |
296,802 | 291,252 | 17,784 | 17,850 | 656,112 | (637,488) | 642,312 |
81
32 OPERATING LEASE AGREEMENTS |
32.1 The Group as a lessee
Consolidated | ||
6.30.2011 | 6.30.2010 | |
Real estate |
7,820 | 6,328 |
Photocopiers |
758 | 1,522 |
Others |
514 | 189 |
(-) Pis and Cofins tax credits |
(676) | (637) |
8,416 | 7,402 |
Copel’s estimate for expenses for the next fiscal years is basically the same as 2010, plus contractual monetary restatement rates, and there are no risks in connection with contract rescission.
Out of the total R$ 7,820 spent in rental properties, R$ 4,150 refer to the rental of the Km 3 Center facilities, signed by Copel and the Copel Foundation, and which is the most significant rental agreement held by the Company. In future periods, this amount will be restated according to a real estate appraisal of the property In future periods, this amount will be restated according to a real estate appraisal of the property.
The Company has not identified any operating lease commitments which are noncancelable.
32.2 The Group as a lessor
Consolidated | ||
Lease and rental income | 6.30.2011 | 6.30.2010 |
Equipment and facilities |
26,917 | 28,903 |
Araucária Thermal power plant |
16,423 | 5,107 |
Real estate |
417 | 365 |
Facilities sharing |
392 | 367 |
44,149 | 34,742 |
Operating leases refer to revenues from rental of Copel property; lessees do not hold an option to purchase these assets upon expiration of the lease.
The Company has not identified any operating lease receivables which are noncancelable.
33 FINANCIAL INSTRUMENTS |
The use of financial instruments by the Company is restricted to cash and cash equivalents, bonds and securities, accounts receivable from government agencies, CRC transferred to the State of Paraná, financial investments, accounts receivable related to the concession, accounts payable related to the concession, loans and financing, debentures, and suppliers.
82
Consolidated | Level | Book value | |
6.30.2011 | 12.31.2010 | ||
Financial assets | |||
Cash and cash equivalent (Note 3) |
- | 1,676,318 | 1,794,416 |
Trade accounts receivable (Note 5) |
- | 1,266,674 | 1,039,377 |
Accounts receivable from government entities (Note 5) |
- | 191,677 | 166,979 |
CRC transferred to state of Paraná (Note 6) |
- | 1,350,036 | 1,341,193 |
Securities (Note 4) |
2 | 535,084 | 541,246 |
Collaterals and escrow accounts (Note 4) |
- | 26,116 | 90,358 |
Receivable related to concession (Note7) |
3 | 2,813,425 | 2,478,045 |
Financial liabilities | |||
Loans and financing (Note 19) | - | 1,543,257 | 1,364,077 |
Debentures (Note 20) |
- | 623,104 | 621,157 |
Derivatives |
3 | 27 | 47 |
Payable related to concession - use of public property (Note 24) |
- | 399,849 | 381,083 |
Eletrobrás - Itaipu |
- | 70,075 | 74,316 |
Petrobras - Compagas |
- | 34,629 | 25,720 |
Other suppliers |
- | 661,609 | 657,468 |
Level 1: obtained from prices quoted (not adjusted) on active markets for identical assets or liabilities | |||
Level 2: obtained from other variables other than prices quoted included in level 1, which can be observed for assets or liabilities | |||
Level 3: obtained through evaluation techniques that include variables for the asset or liability, but are not based on observable market data |
33.1 Fair value and rating level for assessment of fair value of financial instruments
33.1.1 Non-derivative financial assets
Cash and cash equivalents, trade accounts receivable and receivables from government agencies have fair values that are approximate to their book values, due to their nature and realization schedules.
The CRC transferred to the State of Paraná has fair value of R$ 1,400,522 as of June 30, 2011. Company based its calculation on the comparison with a noncurrent, variable interest rate National Treasury bond (NTN-B), which yields approximately 6% p.a. plus the IPCA inflation index.
Bonds and Securities and collaterals and escrow accounts have fair values of R$ 535,060 and R$ 20,332, respectively, as of June 30, 2011. The fair values have been calculated according to information made available by the financial agents for each security and to the market values of the bonds issued by the Brazilian government.
33.1.2 Non-derivative financial liabilities
Liabilities to Eletrobras – Itaipu, Petrobras, and other suppliers have fair values that are approximate to their book values, due to their nature and maturity.
The Company’s debentures have fair value of R$ 622,646 as of June 30, 2011, calculated according to the Unit Price quote obtained from the National Association of the Financial Market Institutions (Associação Nacional das Instituições do Mercado Financeiro or ANDIMA).
The Company's loans and financing have fair value of R$ 1,485,401 as of June 30, 2011. The fair value has been calculated based on the cost of the last issue by the Company, of 99% of the CDI variation.
Accounts payable related to concession – use of public property have fair value of R$ 503,760 as of June 30, 2011, calculated based on the rate of return for the last project auctioned by ANEEL and won by the Company.
83
33.1.3 Derivative Financial Assets and Liabilities
The derivative financial liabilities, other liabilities – derivatives have fair value of R$ 27 as of June 30, 2011 (R$ 47, as of December 31, 2010). The derivative financial assets, securities DI Future have fair value of R$ 121 as of June 30, 2011 (Note 33.4.9).
33.1.4 Rating level 3 for assessment of fair value
This rating level includes accounts receivable related to concession and other liabilities -derivatives.
The detailed breakdown of receivables related to concession is featured in note 7, as detailed below:
• A table reconciling initial and final balances, with a separate breakdown of additions, disposals,transfers, losses, monetary variation, and fair value adjustments;
• Criteria for identification and measurement; and
• Assumptions adopted by Company management to restate the recoverable amount.
Other liabilities – derivatives are detailed in item 33.4.9 of this note.
33.2 Financial instruments by category
Consolidated | Book value | |
6.30.2011 | 12.31.2010 | |
Financial assets | ||
Loans and receivables | ||
Cash and cash equivalent |
1,676,318 | 1,794,416 |
Customers, concessionaires and permission holder |
1,266,674 | 1,039,377 |
Accounts receivable from government entities |
191,677 | 166,979 |
CRC transferred to state of Paraná |
1,350,036 | 1,341,193 |
Receivables related to concession |
950,729 | 840,157 |
Collaterals and escrow accounts |
26,116 | 90,358 |
Available for sale | ||
Receivables related to concession |
1,862,696 | 1,637,888 |
Securities |
526,799 | 472,599 |
Held to maturity | ||
Securities |
8,285 | 68,647 |
Financial liabilities | ||
Fair value through profit or loss | ||
Held for trading | ||
Other liabilities - derivatives |
27 | 47 |
O ther financial liabilities | ||
Loans and financing |
1,543,257 | 1,364,077 |
Debentures |
623,104 | 621,157 |
Payable related to concession - use of public property |
399,849 | 381,083 |
Eletrobrás - Itaipu |
70,075 | 74,316 |
Petrobras - Compagas |
34,629 | 25,720 |
Other suppliers |
661,609 | 657,468 |
84
33.3 Summary of bonds and securities held to maturity
Consolidated | Fair value | Net book value | |||||||
Description | Classification | Taxa p.a. | Issue date | Maturity | Type | 6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 |
Held to | Amortized | ||||||||
LTN | maturity | 10.45% | 04/23/2009 | 01/03/2011 | cost | - | 1,183 | - | 1,183 |
Held to | Amortized | ||||||||
LTN | maturity | 10.42% | 04/29/2009 | 01/03/2011 | cost | - | 4,957 | - | 4,957 |
Held to | Amortized | ||||||||
LFT | maturity | SELIC | 07/14/2009 | 03/07/2012 | cost | 5,596 | 5,303 | 5,593 | 5,306 |
Held to | Amortized | ||||||||
LFT | maturity | SELIC | 08/07/2009 | 03/16/2011 | cost | - | 22,651 | - | 22,654 |
Held to | Amortized | ||||||||
LFT | maturity | SELIC | 11/30/2009 | 06/15/2011 | cost | - | 9,949 | - | 9,946 |
Held to | Amortized | ||||||||
LFT | maturity | SELIC | 07/13/2010 | 06/15/2011 | cost | - | 22,044 | - | 22,037 |
Held to | Amortized | ||||||||
LFT | maturity | SELIC | 09/02/2009 | 12/21/2011 | cost | 759 | 720 | 759 | 719 |
33.4 Risk Factors
33.4.1 Credit risk
The Company’s credit risk comprises the possibility of losses due to difficulties in collecting payment of bills issued to customers, concession holders, and permission holders. This risk is closely related to factors that are either internal or external to Copel. To mitigate this risk, the Company focuses on the management of receivables, detecting customer segments which are most likely not to pay their bills, suspending power supply, and implementing specific collection policies, related to real estate or personal securities whenever possible.
Doubtful accounts are properly covered by provisions to offset potential losses in their realization.
33.4.2 Foreign currency risk (US Dollar)
This risk comprises the possibility of losses due to fluctuations in exchange rates, which may reduce assets or increase liabilities denominated in foreign currencies.
The Company’s foreign currency indebtedness is not significant and it is not exposed to foreign exchange derivatives. The Company monitors all relevant exchange rates.
The effect of the exchange rate variation resulting from the power purchase agreement with Eletrobras (Itaipu) is passed on to customers in Copel Distribuição's next rate rewiew.
The exchange rate variation resulting from the purchase of gas from Petrobras by Compagas has a direct impact on the Company's results, Compagas continually negotiates with its customers, trying whenever possible to pass these costs on to them.
The Company’s exposure to foreign currency (US dollar) risk is shown below:
85
Asset | Liability | Net exposure | |
6.30.2011 | |||
Collaterals and escrow accounts (STN) |
25,679 | - | 25,679 |
Loans and financing |
- | (50,874) | (50,874) |
Suppliers |
|||
Eletrobrás (Itaipu) |
- | (70,075) | (70,075) |
Petrobras (acquisiton of gas by Compagas) |
- | (34,629) | (34,629) |
25,679 | (155,578) | (129,899) |
Sensitivity analysis
The Company has developed a sensitivity analysis in order to measure the impact of the devaluation of the U.S. dollar on its loans and financing subject to exchange risk.
The baseline takes into account the existing balances in each account as of June 30, 2011, and the likely scenario takes into account the balances subject to the exchange rate variations (end of quarter R$/US$ rates) of R$ 1.61 per USD, estimated as market average projections for 2011 according to the Focus Report issued by the Brazilian Central Bank as of June 03,2011. For the adverse and remote scenarios, deteriorations of 25% and 50%, respectively, were considered for the main risk factor for financial instruments compared to the rate used for the likely scenario.
Risk | Base 6.30.2011 |
Forecast scenarios - Dec.2011 | |||
Probable | Adverse | Remote | |||
Financial assets | |||||
Collaterals and escrow accounts |
USD appreciation | 25,679 | 26,568 | 33,210 | 39,852 |
25,679 | 26,568 | 33,210 | 39,852 | ||
Financial liabilities | |||||
Loans and financing |
|||||
STN |
USD appreciation | 50,858 | 52,619 | 65,774 | 78,929 |
Eletrobrás |
USD appreciation | 16 | 17 | 21 | 25 |
50,874 | 52,636 | 65,795 | 78,954 | ||
Suppliers |
|||||
Eletrobrás (Itaipu) |
USD appreciation | 70,075 | 72,502 | 90,627 | 108,753 |
Petrobras (acquisiton of gas by Compagas) |
USD appreciation | 34,629 | 35,828 | 44,785 | 53,742 |
104,704 | 108,330 | 135,412 | 162,495 | ||
Net exposure | (129,899) | (134,398) | (167,997) | (201,597) |
In addition to the sensitivity analysis required by CVM Resolution no. 475/08, the Company evaluates its financial instruments considering the possible effects on profit or loss and shareholders’ equity of the risks evaluated by Company management on the reporting date for the financial instruments, as recommended by CPC 40 and IFRS 7. Based on the equity position and the notional value of the financial instruments held as of June 30, 2011, it is estimated that these effects will approximate the amounts stated in the above table in the column for the forecast probable scenario, since the assumptions used by the Company are similar to those previously described.
33.4.3 Interest rate and monetary variation risk
This risk comprises the possibility of losses due to fluctuations in interest rates or other indicators, which may reduce revenues or increase financial expenses in connection with assets and liabilities on the market.
The Company has not engaged in transactions with derivatives to cover this risk, but it has continually monitored interest rates and market indicators, in order to assess the potential need for such transactions for protection for interest rate risks.
86
The Company’s exposure to interest rate and monetary variation risks is shown below:
Asset | Liability | Net exposure | |
6.30.2011 | |||
Financial investments - equivalent to cash |
1,645,255 | - | 1,645,255 |
Financial investments - bonds and securities |
535,521 | - | 535,521 |
CRC transferred to the State of Paraná |
1,350,036 | - | 1,350,036 |
Receivables related to concession |
2,813,425 | - | 2,813,425 |
Loans and financing |
- | (1,492,383) | (1,492,383) |
Debentures |
- | (623,104) | (623,104) |
6,344,237 | (2,115,487) | 4,228,750 |
Sensitivity analysis
The Company has developed a sensitivity analysis in order to measure the impact of variable interest rates and monetary variations on its financial assets and liabilities subject to these risks.
The baseline takes into account the existing balances in each account as of June 30, 2011 and the likely scenario takes into account the indicators (CDI/SELIC of 12.50%, IGP-DI of 6.79%, IGP-M of 6.70% and TJLP of 6.00%) estimated as market average projections for 2011 according to the Focus Report issued by the Brazilian Central Bank as of June 03, 2011. For the adverse and remote scenarios, deteriorations of 25% and 50%, respectively, were considered for the main risk factor for the financial instrument compared to the rate used in the likely scenario.
These forecasts consider the position for the simulated base scenario for December 31, 2011.
Operation | Risk | Base 6.30.2011 |
Forecast scenarios - Dec.2011 | ||
Probable | Adverse | Remote | |||
Financial assets | |||||
Financial investments - equivalent to cash |
Low CDI/SELIC | 1,645,255 | 1,742,490 | 1,718,141 | 1,693,955 |
Financial investments - bonds and securities |
Low CDI/SELIC | 535,521 | 567,171 | 559,246 | 551,373 |
CRC transferred to the State of Paraná |
Low IGP-DI | 1,350,036 | 1,400,250 | 1,377,992 | 1,355,734 |
Receivables related to concession |
Low IGP -M | 2,813,425 | 2,910,353 | 2,864,666 | 2,818,978 |
6,344,237 | 6,620,264 | 6,520,045 | 6,420,040 | ||
Financial liabilities | |||||
Loans and financing |
|||||
Banco do Brasil |
High CDI | 874,691 | 955,474 | 975,312 | 995,016 |
Eletrobrás - Finel |
High IGP -M | 155,928 | 157,029 | 157,548 | 158,067 |
Eletrobrás - RGR |
No Risk (1) | 125,363 | 125,363 | 125,363 | 125,363 |
BNDES - Compagás |
High TJLP | 3,188 | 3,330 | 3,366 | 3,401 |
Finep |
High TJLP | 6,845 | 7,151 | 7,227 | 7,302 |
BNDES – Copel Geração e Transmissão |
High TJLP | 163,149 | 170,437 | 172,243 | 174,042 |
Banco do Brasil – Repasse BNDES funds |
High TJLP | 163,219 | 170,510 | 172,317 | 174,117 |
1,492,383 | 1,589,294 | 1,613,376 | 1,637,308 | ||
Debentures |
High CDI | 623,104 | 680,652 | 694,783 | 708,820 |
2,115,487 | 2,269,946 | 2,308,159 | 2,346,128 | ||
(1) Loan indexed to UFIR |
87
In addition to the sensitivity analysis required by CVM Resolution no. 475/08, the Company evaluates its financial instruments considering the possible effects on profit or loss and shareholders’ equity of the risks evaluated by Company management on the reporting date for the financial instruments, as recommended by CPC 40 and IFRS 7. Based on the equity position and the notional value of the financial instruments held as of June 30, 2011, it is estimated that these effects will approximate the amounts stated in the above table in the column for the forecast probable scenario, since the assumptions used by the Company are similar to those previously described.
33.4.4 Accelerated maturity risk
This risk results from the potential noncompliance with contract covenants, such as those contained in the loan, financing, and debenture agreements of the Company, which usually require that certain economic and financial indicators, which are calculated and analyzed periodically for compliance, be kept at determined levels (financial covenants).
As of June 30, 2011 all of the conditions were analyzed and it was identified that all of the levels provided in the contracts had been complied with.
33.4.5 Environmental Risks
The activities of the energy sector could have significant negative impacts and damage on the environment. The applicable legislation imposes on those who directly or indirectly cause environmental harm the duty to repair or compensate for the damages to the environment and to affected third-parties, regardless of culpability (strict liability). The costs of environmental recovery of compensation may force the Company to delay or redirect investments in other areas and may have an adverse effect on the Company. The Company ensures the balance between environmental conservation and the operation of its business by establishing guidelines and practices to be observed in all operations, in order to reduce environmental impact, focusing on the sustainable development of its business.
33.4.6 Power shortage risk
This risk results from the possibility of periods with low levels of rainfall, since Brazil relies heavily on hydroelectric sources, which depend on the water levels in their reservoirs to operate.
A long period of drought may reduce the water levels in power plant reservoirs and result in losses due to reduced revenues if a new rationing program is implemented.
According to the 2010 Annual Power Operation Plan, published annually at www.ons.org.br, the National System Operator projects a comfortable situation in terms of supply to the power market over the next 5 years, from May 2010 until December 2014. The parameter for supply guarantee established by the National Energy Policy Council (CNPE) which corresponds to risk of energy deficit below 5%, is easily met in all regions of Brazil over the five year period in a scenario of average GDP growth of 5 % p.a., between 2011 and 2014. Even in the event of adverse hydrological conditions, market supply will be guaranteed by the application of Short-Term Operating Procedures (POCP), approved by CMSE, which may trigger additional thermal generation dispatch and maximization of exchanges to ensure safety reserves in reservoirs at the end of each dry season.
88
33.4.7 Risk of non-renewal of concessions
Copel holds concessions for power generation, transmission, and distribution services, with the expectation that they will be renewed by the Ministry of Mines and Energy (MME) with the support of ANEEL. If the extension of these concessions is not approved by the regulatory authority or even if it occurs at additional costs to the Company ("onerous concession"), current profitability and activity levels may be affected.
Maturty date of concessions/authorizations | |
Concessions - Copel Geração e Transmissão | |
Hydroelectric |
|
Gov. Bento Munhoz da Rocha Netto (Foz do Areia) | 5.23.2023 |
Gov. Ney Aminthas de Barros Braga (Segredo) |
11.15.2029 |
Gov. José Richa (Caxias) |
5.4.2030 |
Gov. Pedro Viriato Parigot de Souza |
7.7.2015 |
Guaricana |
8.16.2026 |
Chaminé |
8.16.2026 |
Apucaraninha |
10.12.2025 |
Mourão |
7.7.2015 |
Derivação do Rio Jordão |
11.15.2029 |
Marumbi |
- (a) |
São Jorge |
12.3.2024 |
Chopim I |
7.7.2015 |
Rio dos Patos (b) |
2.14.2014 |
Cavernoso |
1.7.2031 |
Melissa |
- (c) |
Salto do Vau |
- (c) |
Pitangui |
- (c) |
Mauá |
7.3.2042 |
Colíder |
1.17.2046 |
Thermo-electric |
|
Figueira |
3.26.2019 |
Transmission concessions | |
Contract 060/01 - Transmission system |
7.7.2015 |
Contract 075/01 - Transmission line - Bateias - Jaguariaíva |
8.16.2031 |
Contract 006/08 - Transmission line Bateias - Pilarzinho |
3.16.2038 |
Contract 027/09 - Transmission line Foz do Iguaçu - Cascavel Oeste |
11.18.2039 |
Contract 010/10 - Transmission line Araraquara 2 - Taubaté |
10.5.2040 |
Contract 015/10 - Sub-station Cerquilho III |
10.5.2040 |
Concession - Copel Distribuição | 7.7.2015 |
Concession - Compagas | 7.6.2024 |
Concession - Elejor | 10.25.2036 |
Authorization - UEG Araucária | 12.22.2029 |
(a) In progress for homologation from Aneel | |
(b) Sent on 1.27.2011 requesting extension of concession (art .19 of law 9,074/95) | |
(c) at plants with capacity of less than 1 MW, only register with Aneel |
As far as potential reimbursements at the end of the concession, there is uncertainty regarding how to measure the amounts to be paid for reversal of concession assets to the granting authority.
33.4.8 Gas shortage risk
This risk involves potential periods of shortage of natural gas supply to meet the Company’s gas distribution and thermal generation business requirements.
Long periods of gas shortage could result in losses due to lower revenues by subsidiaries Compagas and UEG Araucária.
89
33.4.9 Derivative financial instruments
The Company employs derivative financial instruments with the sole purpose of protecting itself against variable interest rate volatility.
Consolidated | ||
6.30.2011 | 12.31.2010 | |
Derivative Financial Instruments |
||
Future DI Daily Adjustments - Assets |
121 | - |
Future DI Daily Adjustments - Liabilities |
(27) | (47) |
Current quota |
94 | (47) |
In order to protect against the effects of volatility on active exposures (DI interest rates) of bonds and securities, the Company hired future DI rate operations, negotiated at BM&FBOVESPA and registered at CETIP, whose nominal balances and conditions are as follows:
For the semester ended June 31, 2011, the result of operations with derivative financial instruments on the futures market was a gain of R$ 107 (losses R$ (81), in June 30, 2010).
Contracts are adjusted daily in accordance with the future DI rates published by BM&FBOVESPA. The reference (notional) values of these outstanding contracts as of June 30, 2011 corresponded to R$ 93,860 (R$ 57,253, as of December 31, 2010).
On June 30, 2011, a share of the Company’s federal bonds in the amount of R$ 8,435, was deposited as collateral for transactions at BM&FBOVESPA S.A. (the Stock, Commodities, and Futures Exchange of São Paulo), (R$ 7,993, as of December 31, 2010).
Sensitivity analysis
In order to measure the effects of the variations in the indices and rates tied to the derivative operations, the following sensitivity analysis table was prepared in accordance with the terms provided by CVM Resolution no. 475/08, which includes a scenario considered probable by Company management, a situation considered adverse of at least a 25% deterioration in the variables used and a situation considered remote, with a deterioration of at least 50% in the risk variables. The balances reported at June 30, 2011 were considered for the base scenario, and for the probable scenario, the balances with variations in the indices (DI) forecast for the average market expectations for 2011 in the Bacen Focus Report at June 30, 2011 were considered.
Risk | Base 6.30.2011 |
Forecast scenarios - Dec.2011 | |||
Probable | Adverse | Remote | |||
Financial assets (liabilities) | |||||
Derivatives - Assets |
Increase in DI rate | 121 | (100) | (1,025) | (1,963) |
Derivatives - Liabilities |
Decrease in DI rate | (27) | 35 | (390) | (810) |
94 | (100) | (1,025) | (1,963) |
90
33.5 Indebtedness index
Parent Company | Consolidated | |||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |
Debt - loans and financing |
394,008 | 398,857 | 1,543,257 | 1,364,077 |
Debt - Debentures |
623,104 | 621,157 | 623,104 | 621,157 |
Cash and cash equivalents and financial investments |
13,632 | 89,997 | 2,209,906 | 2,392,589 |
Net debt |
1,003,480 | 930,017 | (43,545) | (407,355) |
Shareholders' equity |
11,637,035 | 11,030,123 | 11,884,367 | 11,295,826 |
Net indebtedness index |
8.62% | 8.43% | -0.37% | -3.61% |
33.6 Financing lines
Copel does not employ financing lines such as: non-guaranteed overdraft accounts; non-guaranteed bills of exchange; guaranteed overdraft accounts; and guaranteed bank credit lines.
33.7 Liquidity and interest table |
Consolidated | |||||||
Interest (1) | Less than 1 month |
1 to 3 month |
3 month to 1 year |
1 to 5 years | More than 5 years |
Total | |
June 30, 2011 |
|||||||
Cash and cash equivalent |
- | 1,676,318 | - | - | - | - | 1,676,318 |
Trade accounts receivable |
0.71% | 25,201 | 7,662 | 30,154 | 56,675 | - | 119,692 |
CRC transferred to the State of Paraná |
6.65% a.a. + IGP-DI | 11,974 | 23,947 | 111,890 | 671,244 | 2,039,564 | 2,858,619 |
Securities + exclusive funds |
99.9% do CDI | 6,534 | 7,584 | 92,144 | 86,932 | - | 193,194 |
Collaterals and escrow accounts |
TR e Dólar (3) | - | - | - | - | 88,907 | 88,907 |
Receivables related to concession |
WACC+Tx retorno (2) | 31,088 | 62,372 | 290,931 | 5,089,665 | 1,874,885 | 7,348,941 |
1,751,115 | 101,565 | 525,119 | 5,904,516 | 4,003,356 | 12,285,671 | ||
December 31, 2010 |
|||||||
Cash and cash equivalent |
- | 1,676,318 | - | - | - | - | 1,676,318 |
Trade accounts receivable |
0.76% | 22,051 | 9,508 | 28,459 | 60,000 | - | 120,018 |
CRC transferred to the State of Paraná |
6.65% a.a. + IGP-DI | 11,973 | 23,947 | 107,759 | 840,030 | 1,981,717 | 2,965,426 |
Securities + exclusive funds |
99.9% do CDI | 357,492 | 26,089 | 45,592 | 133,362 | - | 562,535 |
Collaterals and escrow accounts |
TR e Dólar (3) | 64,078 | - | - | - | 98,724 | 162,802 |
Receivables related to concession |
WACC+Tx retorno (2) | 29,587 | 59,304 | 273,828 | 5,050,599 | 2,076,135 | 7,489,453 |
2,161,499 | 118,848 | 455,638 | 6,083,991 | 4,156,576 | 12,976,552 | ||
(1) Effective interest rate - weighted average | |||||||
(2) WACC regulatory + rate of return from enterprise | |||||||
(3) National currency TR; Foreign currency: see note 1.2 | |||||||
Consolidated | |||||||
Less than | 1 to 3 | 3 month to | More than 5 | ||||
Interest (1) | 1 month | month | 1 year | 1 to 5 years | years | Total | |
June 30, 2011 |
|||||||
Loans and financing |
Note 19 | 9,519 | 34,537 | 109,666 | 1,664,466 | 518,457 | 2,336,645 |
Debentures |
Note 20 | - | 635,953 | - | - | - | 635,953 |
Derivatives |
DI Futures | 27 | - | - | - | - | 27 |
Payables related to concession - |
Rate of return + | ||||||
use of public asset |
IGP-M e IPCA | 3,415 | 6,831 | 33,842 | 204,854 | 2,067,414 | 2,316,356 |
Eletrobrás - Itaipu |
Dollar | - | 76,021 | 349,250 | 2,330,301 | 6,394,033 | 9,149,605 |
Petrobras - Compagas |
100% of CDI | 4,253 | 8,635 | 41,088 | 167,943 | - | 221,919 |
Other suppliers |
- | 233,379 | 92,136 | 246,798 | 16,557 | - | 588,870 |
Post employment benefits |
7.17% | 28,269 | 56,537 | 254,417 | 1,213,013 | 1,807,966 | 3,360,202 |
Purchase liabilities |
IGP-M and IPCA | - | 515,690 | 2,429,127 | 12,020,993 | 38,445,155 | 53,410,965 |
278,862 | 1,426,340 | 3,464,188 | 17,618,127 | 49,233,025 | 72,020,542 | ||
December 31, 2010 |
|||||||
Loans and financing |
Note 19 | 22,916 | 28,656 | 99,167 | 1,455,068 | 434,672 | 2,040,479 |
Debentures |
Note 20 | - | 32,247 | 641,103 | - | - | 673,350 |
Derivatives |
DI Futures | 22 | - | - | - | - | 22 |
Payables related to concession - |
Rate of return + | ||||||
use of public asset |
IGP-M and IPCA | 3,524 | 7,048 | 31,715 | 253,278 | 2,061,329 | 2,356,894 |
Eletrobrás - Itaipu |
Dollar | - | 77,507 | 353,466 | 3,284,329 | 7,125,809 | 10,841,111 |
Petrobras - Compagas |
100% of CDI | 3,988 | 8,158 | 38,647 | 194,202 | - | 244,995 |
Other suppliers |
- | 214,026 | 125,151 | 185,168 | 14,944 | - | 539,289 |
Post employment benefits |
7.17% | 28,269 | 56,537 | 254,417 | 1,213,013 | 1,807,966 | 3,360,202 |
Purchase liabilities |
IGP-M and IPCA | - | 457,253 | 2,245,114 | 14,554,719 | 43,263,760 | 60,520,846 |
272,745 | 792,557 | 3,848,797 | 20,969,553 | 54,693,536 | 80,577,188 | ||
(1) Effective interest rate - weighted average |
91
34 RELATED PARTY TRANSACTIONS |
34.1 Parent Company
Consolidated | ||||||
Related parties / Nature of operation | Assets | Liabilities | Results | |||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | 6.30.2011 | 6.30.2010 | |
Controlling shareholders | ||||||
State of Paraná |
||||||
Dividends payable(1) |
- | - | 58,140 | 58,140 | - | - |
BNDESPAR (5) |
||||||
Dividends payable(1) |
- | - | - | 42,601 | - | - |
Key management personnel | ||||||
Fees, social security charges and other (Note 29.3) |
- | - | - | - | (4,236) | (3,638) |
Private pension and health plans (Note 21) |
- | - | - | - | (323) | (166) |
The balances of transactions between the Company and its investees and subsidiaries are shown in Note 13 and Note 14.
In 2002, the Company became guarantor of the loans signed by its investee Dona Francisca Energética S.A. with the National Economic and Social Development Bank (BNDES) (joint debtor), and with Bradesco (joint debtor), As of June 30, 2011, the outstanding debt was R$ 23,501 and R$ 14,408, respectively.
92
34.2 Consolidated
Consolidated | ||||||
Related parties / Nature of operation | Assets | Liabilities | Results | |||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | 6.30.2011 | 6.30.2010 | |
Controlling shareholders | ||||||
State of Paraná |
||||||
Dividends payable (1) |
- | - | 58,140 | 58,140 | - | - |
Installment bills for energy (2) |
39,838 | 39,838 | - | - | - | 894 |
"Luz Fraterna" program (3) |
21,311 | 11,528 | - | - | - | - |
Installment bills for telecommunication serv. (2) |
4,376 | 4,376 | - | - | - | 126 |
Remuneration and employ. social security charges assigned (4) |
2,754 | 2,457 | - | - | - | - |
CRC (Note 6) |
1,350,036 | 1,341,193 | - | - | 80,685 | 106,211 |
ICMS (Note 10.3) |
110,054 | 118,814 | 186,321 | 174,612 | - | - |
BNDES (5) | ||||||
Financing for investment in the gas system (Note 19.5) |
- | - | 3,188 | 6,373 | (203) | (568) |
Financing UHE Mauá and system for associated transmission (Note 19.7) |
- | - | 163,149 | 138,885 | (5,142) | (4,738) |
BNDESPAR (5) | ||||||
Debentures - Elejor | - | - | - | - | - | (3,248) |
Dividends payable(1) | - | - | - | 42,601 | - | - |
Associated companies | ||||||
Dona Francisca Energética |
||||||
Purchase of energy (6) |
- | - | 5,048 | 5,506 | (31,015) | (29,786) |
Dividends receivable by Copel (Note 13) |
72 | 955 | - | - | - | - |
Sanepar | ||||||
Dividends receivable by Dominó Holdings (Note 13) |
7,787 | 4,896 | - | - | - | - |
Key mangement personnel | ||||||
Fees, social security charges and other (Note 29.3) |
- | - | - | - | (5,823) | (5,431) |
Private pension and health plans (Note 21) |
- | - | - | - | (323) | (180) |
O ther related parties | ||||||
Petrobras |
||||||
Rental plant UTE Araucária (Note 32.2) |
2,730 | 4,296 | - | - | 16,423 | 5,107 |
Supply and transport of gas (7) |
209 | 174 | - | - | 2,635 | 3,046 |
Acquisition of gas for resale (7) |
- | - | 34,629 | 25,720 | (78,038) | (69,231) |
Advances to suppliers (7) |
11,017 | 9,902 | - | - | - | - |
Dividends payable (7) |
- | - | 2,763 | 2,359 | - | - |
Mitsui Gás e Energia do Brasil Ltda. (8) | ||||||
Dividends payable |
- | - | 2,763 | 2,359 | - | - |
Remuneration and employ. social security charges assigned |
- | - | 111 | 27 | - | - |
Fundação Copel | ||||||
Rental of administrative real estate |
- | - | - | - | (4,389) | (4,106) |
Private pension and health plans (Note 21) |
- | - | 428,312 | 408,463 | - | - |
Instit. de Tecnol. p/ o Desenvolvimento - Lactec (9) | ||||||
Services rendered and research and development |
24,972 | 28,064 | 226 | 433 | (4,265) | (2,951) |
The amounts resulting from the operating activities of Copel Distribuição involving related parties are billed at the rates approved by ANEEL, and those of Copel Telecomunicações are accounted for according to terms and conditions similar to those in effect in transactions with independent parties.
1) In 2010, out of the total dividends proposed to the Government for the State of Paraná and to BNDESPAR, for the amounts of R$ 83,366 and R$ 59,826, the Company made advance payments during 2010 of R$ 25,226 and R$ 17,225, respectively.
93
2) |
Agreement for renegotiation of power bills and Luz Fraterna Program bills with Copel Distribuição, in the original amount of R$ 84,883, and agreement for renegotiation of the bills for internet connection at public schools with Copel Telecomunicações, in the amount of R$12,000. These agreements were signed on April 20, 2007, for payment in 45 monthly installments, restated according to the SELIC interest rate, generating the financial revenues |
3) |
The Luz Fraterna Program, created under Law no. 491, dated September 11, 2003, allows the State Government to pay for the electricity bills of low income families in Paraná – which have duly applied for the program – provided their consumption does not exceed 100 kWh a month. This benefit is available to residential customers with single phase connections, rural customers with single phase connections or two phase connections with circuit breakers of up to 50 ampères. Applicants must not have more than one electricity bill under their names and must not have any pending debts to Copel. |
4) |
Reimbursement of wages and social charges for employees transferred to the Paraná State Government.The Company set aside a provision in the amount of R$ 2,309 in connection with the June 30, 2011 balances and the amount of R$ 2,036 for the December 31, 2010 balance. |
5) |
BNDESPAR holds 26.41% of the Company’s common shares and has the right, under a shareholders’ agreement, to appoint two members of the Board of Directors. BNDESPAR is a wholly-owned subsidiary of BNDES, with which the Company has financing agreements, described in Note 19. |
6) | Power purchase agreement signed by Dona Francisca Energética and Copel Geração e Transmissão, expiring on October 6, 2015. |
7) | These balances refer to transactions with Petrobras, which holds a 24.5% interest in Compagas, and with its subsidiaries, Petrobras Distribuidora S.A. - BR and Petrobras Gás S.A. – Gaspetro. |
The supply and transport of piped gas and the purchase of gas for resale are conducted at market prices and conditions. | |
Advance payments to suppliers refer to the gas purchase contract covering guaranteed volumes and transport capacity, higher than those actually consumed and used, which contains a future compensation clause. Compagas has the right to receive unused gas in subsequent months, and it may offset amounts under contract but not consumed over a period of up to 10 years. | |
In light of the prospects of increased consumption by the market, Company management believes it will consume the accumulated gas volumes as of June 30, 2011 in the next fiscal years. | |
8) | Mitsui Gás e Energia do Brasil Ltda. holds 24.5% of Compagas’share capital. |
94
9) |
The Institute of Technology for Development (Lactec) was constituted on February 6, 1997 as a not for profit organization whose goal is to promote economic, scientific, technological, and social development and the sustainable conservation of the environment. In 2000, it was qualified by the Ministry of Justice, based on Law no. 9,970, as a Public Interest Civil Society Organization (OSCIP), which allows it, among other things, to enter partnerships with overnment agencies with no need for competitive bidding. Its members are: Copel, the Federal University of Paraná (UFPR), the Engineering Institute of Paraná (IEP), the Paraná Federation of Industries (FIEP), and the Commercial Association of Paraná (ACP). |
Lactec has service and R&D contracts with Copel Geração e Transmissão and Copel Distribuição, which are subject to prior or later control and approval by ANEEL. | |
The asset balances refer to Energy Efficiency and R&D programs, recorded under current assets, in service in progress, until the respective projects are concluded, pursuant to ANEEL.
35 INSURANCE |
The specifications by type of risk and maturity dates for the Company’s main insurance is reported in Note 38 of the Annual Financial Statements as of December 31, 2010.
95
COMMENTS ON PERFORMANCE FOR THE QUARTER
(Amounts expressed in thousands of reais, except when stated otherwise)
1 Distribution |
Customers’ connections – In June 2011, Copel provided energy to 3,812,947 Customers (3,671,272 in June 2010), representing an increase of 141,675 Customers in the last 12 months, a variation of 3.9%.
Compact Grids - Copel has implemented compact networks in urban areas with significant urban forestry close to the distribution grids. This technology avoids having to prune and cut trees and improves the quality of the supply, since it reduces the number of disconnections. At the end of June 2011, the extension of the compact grids installed was 2,366 km (2,008 km at June 2010), representing an increase of 358 km in 12 months, a variation of 17.8%.
Isolated Secondary Grid – Copel is also investing in secondary isolated grids for low voltage (127/220 V), which provide significant advantages compared to the conventional aerial grid, such as:
- improvement in the DEC and FEC indices; - more difficult to steal energy;
- improvement in the environmental conditions and reduction to the pruned area; - increased safety; - reduction to the drop in voltage throughout the network; and
- increase in the useful life of the transformer from the decrease in the number of short circuits in the network, amongst others.
At the end of June 2011, the extent of the installed secondary isolated distribution grids was 6,957 km (5,568 km in June 2010), representing an increase of 1,389 km in the previous 12 months, a variation of 24.9%.
Market behavior – The energy generated by Copel during the first semester of 2011 was 12,693 GWh (12,922 GWh in the same period for 2010). The energy purchased from CCEAR (auction) was 9,131GWh (8.235 GWh in the same period for 2010) and from Itaipu it was 2,615 GWh (2,627 GWh in the same period for 2010), as demonstrated in the following flow chart:
96
(a) The energy negotiated between the subsidiaries Copel has been included (b) Subject to alterations after closing by CCEE
CCEAR - Contracts for Sale of Energy on Regulated Environment
CCEE(MCP) - Câmara de Comercialização de Energia Elétrica (Short term market) MRE- Mechanism for reallocation of energy
CG - Centre of gravity for submarket (difference between energy contracted and received in CG -established in the contract).
Sale of energy (MWh) – The following table presents total energy sales by Copel between Copel Distribuição and Copel Geração e Transmissão:
97
Class | In MWh | ||
January to | January to | ||
June 2011 | June 2011 | Variation | |
Copel Distribuição | |||
Captive market | 11,086,011 | 10,660,899 | 4.0% |
Residential | 3,103,382 | 2,963,955 | 4.7% |
Industrial | 3,557,972 | 3,497,147 | 1.7% |
Commercial | 2,407,545 | 2,255,120 | 6.8% |
Rural | 964,801 | 921,209 | 4.7% |
Others | 1,052,311 | 1,023,468 | 2.8% |
Concessionaries and permission holder | 297,915 | 279,122 | 6.7% |
CCEE (MCP) | 197,874 | 3,361 | - |
Total Copel Distribuição | 11,581,800 | 10,943,382 | 5.8% |
Copel Geração e Transmissão | |||
CCEAR (Copel Distribuição) | 656,801 | 609,397 | 7.8% |
CCEAR (other concessionaries) | 6,972,444 | 6,583,580 | 5.9% |
Free customers | 448,675 | 485,883 | -7.7% |
Bi-lateral contracts | 529,110 | 790,466 | -33.1% |
CCEE(MCP) | 25,324 | 1,660 | - |
Total Copel Geração e Transmissão | 8,632,354 | 8,470,986 | 1.9% |
Total | 20,214,154 | 19,414,368 | 4.1% |
Obs. Does not include energy available through MRE Mechanism for reallocation of energy |
CCEE(MCP): Câmara de Comercialização de Energia Elétrica (Short term market) |
CCEAR: Contracts for Sale of Energy on Regulated Environment |
Captive market of Copel Distribuição – From January to June 2011, the captive market increased 4.0% and was responsible for the consumption of 11,086,011 MWh during the period.
The residential class consumed 3,103,382 MWh, registering an increase of 4.7%, due mainly to the increase in family income and the increase of 4.0% in the number of consumers. At the end of June 2011, this class represented 28% of consumption by Copel’s captive market, amounting to 3,008,656 residential customers.
Consumption by the industrial class increased 1.7%, amounting to 3,557,972MWh during the first quarter of the year. This result was influenced by the growth in industrial production in Paraná, particularly the printing and publishing sectors, vehicle and food sectors, and by the increase of 8.6% in the number of industrial customers. At the end of June, this class represented 32.1% of consumption of Copel’s captive market, with 73,573 customers attended.
The commercial class consumed 2,407,545 MWh, representing an increase of 6.8%, influenced by the heated employment market and the effects from the expansion in credit that had occurred in prior quarters. At the end of the semester, this class represented 21.7% of consumption of Copel’s captive market, with 320,773 customers attended.
The rural class consumed 964,801 MWh and increased 4.7%, as a result of the increase in agricultural production in the State of Paraná. This class represents 8.7% of consumption of Copel’s captive market, and at the end of the first semester, a total of 359,548 rural customers had been attended.
98
The other classes (Government agencies, public lighting, public services and own consumption) consumed 1,052,311 MWh, an increase of 2.8% in the period. These consumption classes represent 9.5% of consumption by Copel’s captive market. At the end of the semester, a total of 50,389 customers from these segments had been attended.
Number of customers – The number of end customers (captive from Copel Distribuição plus free customers from Copel Geração e Transmissão) billed in June 2011 was 3,812,947, representing an increase of 3.9% compared to the same month in 2010.
. | |||
Class | Customers | ||
June 2011 | June 2010 | Variation | |
Residential |
3,008,656 | 2,893,098 | 4.0% |
Industrial |
73,573 | 67,777 | 8.6% |
Commercial |
320,773 | 301,009 | 6.6% |
Rural |
359,548 | 360,482 | -0.3% |
Others |
50,389 | 48,896 | 3.1% |
Total captive | 3,812,939 | 3,671,262 | 3.9% |
Free customers - Copel Geração e Transmissão |
8 | 10 | -20.0% |
Total | 3,812,947 | 3,671,272 | 3.9% |
2 Administration |
Number of employees - Copel ended the first six months of 2011, with a total of 9,076 employees distributed between the Company’s wholly owned subsidiaries and 140 employees distributed between companies controlled by Copel, as follows:
Employees | ||
June 2011 | June 2010 | |
Wholly owned subsidiaries | ||
Copel Geração e Transmissão |
1,791 | 1,618 |
Copel Distribuição |
6,759 | 6,611 |
Copel Telecomunicações |
526 | 451 |
9,076 | 8,680 | |
Subsidiaries | ||
Compagas |
125 | 114 |
Elejor |
6 | 7 |
UEG Araucária |
9 | 10 |
140 | 131 |
3 Market relations |
From January to June 2011, the nominative ordinary shares (ON - code CPLE3) and the nominative preference shares class B (PNB - code CPLE6) of COPEL were present on 93% and 100% respectively, of the floors of the Futures and Commodities Exchange , (BM&FBOVESPA).
The shares for trading amounted to 45% of the Company’s capital. At the end of June 2011, the market value of COPEL, considering quotations from all of the markets, was R$ 10,886.8 million.
99
Of the 67 securities that comprise the theoretical portfolio of Ibovespa, the PNB shares in COPEL, participated with 0.65% and with a Beta index of 0.34. In the IEE portfolio (Index for the Energy Sector), COPEL participated with 6.27%. Copel’s participation in the Business Sustainability Index of BM&FBOVESPA (ISE), was 1.13%.
On the BM&FBOVESPA, the ordinary shares closed the quarter quoted at R$ 38.00 no variation and the preference shares at R$ 41,50 also no variation. During the same period the IBOVESPA reported a negative variation of 9.96%.
On the New York Stock Exchange (NYSE), the preference shares are traded at “Level 3” in the form of ADS’s, under the code ELP, which were present on 100% of the floors, closing the quarter quoted at US$ 27,16 representing a positive variation of 7.91%. During the same period the DOW JONES index reported a positive variation of 7.23%.
On the LABITEX (Latin American Exchange Market in Euros) tied to the Madrid Stock Exchange, the Company’s PNB shares are traded under the code XCOP, and were present on 98% of the floors, closing the quarter quoted at € 18.25 representing a negative variation of 2.14%. During the same period the LABITEX All Shares reported a negative variation of 12.84%.
. | ||||
Share performance - January to June 2011 | ON | PNB | ||
Total | Daily average | Total | Daily average | |
Bovespa | ||||
Traded |
2,193 | 19 | 274,226 | 2,229 |
Quantity |
1,788,200 | 15,550 | 76,685,900 | 623,463 |
Volume (R$ thousand) |
68,700 | 597 | 3,262,683 | 26,526 |
Presence on exchanges |
115 | 93% | 123 | 100% |
Nyse | ||||
Quantity |
42,424 | 1,248 | 51,827,000 | 414,616 |
Volume (US$ thousand) |
981 | 29 | 1,372,505 | 10,980 |
Presence on exchanges |
34 | 27% | 125 | 100% |
Latibex | ||||
Quantity |
- | - | 118,768 | 966 |
Volume (€ thousand) |
- | - | 2,210 | 18 |
Presence on exchanges |
- | - | 123 | 98% |
4 Tariffs |
Energy Supplies
In June 2011, the average tariff for energy supplies was R$ 242.99/MWh, representing an increase of 11.7% compared to June of the previous year.
Aneel, through ratifying resolution nº 1,158 of June 21, 2011, authorized an average adjustment of 5.55% for the tariffs of Copel Distribuição. Of this total, 5.77% refers to the annual rate adjustment and –0.22% to the financial components, characterizing an average effect of 2.99% to be perceived by the captive consumers. These amounts were fully passed on to the tariffs by the company as from June 24, 2011.
100
The average tariffs for energy supplies are presented in the following table:
Average supply tariffs (a) | R$/MWh | ||
June 2011 | June 2010 | Variation | |
Residential |
293.67 | 271.14 | 8.3% |
Industrial (b) |
206.67 | 180.68 | 14.4% |
Commercial |
256.69 | 228.49 | 12.3% |
Rural |
173.65 | 156.74 | 10.8% |
Others |
201.51 | 177.98 | 13.2% |
237.73 | 212.87 | 11.7% | |
(a) Without ICMS (VAT) | |||
(b) Does not include free customers |
Purchasing Energy
Aneel Resolution n° 1,173, of June 28, 2011, fixed at R$ 4,003.45/MW the value of the monthly tariff for electric power transport originating from Itaipu Binational, to be applied to the contracting parties of that power, representing a 7.3% increase.
Copel’s main tariffs for purchasing energy are demonstrated in the following table:
Tariffs for the purchase of energy | R$/MWh | ||
June 2011 | June 2010 | Variation | |
Itaipu |
85.95 | 96.89 | -11.3% |
Auction - CCEAR 2005-2012 |
75.84 | 71.74 | 5.7% |
Auction - CCEAR 2006-2013 |
88.84 | 84.20 | 5.5% |
Auction - CCEAR 2007-2014 |
101.62 | 95.96 | 5.9% |
Auction - CCEAR 2007-2014 (A-1) |
126.37 | 119.87 | 5.4% |
Auction - CCEAR 2008-2015 |
106.94 | 101.29 | 5.6% |
Auction - CCEAR 2008-H30 |
133.00 | 126.20 | 5.4% |
Auction - CCEAR 2008-T15 (a) |
164.75 | 156.10 | 5.5% |
Auction - CCEAR 2009-2016 |
118.67 | 113.10 | 4.9% |
Auction - CCEAR 2009-H30 |
142.19 | 134.89 | 5.4% |
Auction - CCEAR 2009-T15 (a) |
161.02 | 152.56 | 5.5% |
Auction – CCEAR 2010 – H30 |
142.72 | 124.11 | 15.0% |
Auction – CCEAR 2010 – T15 (a) |
151.74 | 149.45 | 1.5% |
Auction – CCEAR 2010 – T15 (4th new power auction) |
158.95 | 156.56 | 1.5% |
Auction – CCEAR 2011 – H30 |
147.12 | - | - |
Auction –CCEAR 2011 – T15 (3rd new power auction) |
167.31 | - | - |
Auction – CCEAR 2011 – T15 (6th new power auction) |
141.74 | - | - |
Auction – 10th adjustment |
99.90 | - | - |
(a) Average auction price fixed by the IPCA. In practice the price is comprised of three components: a fixed portion, a variable portion and expense in the CCEE. The cost of the last two items depends on the order of plants as programming of the National System Operator - ONS. |
Supply of power
Through Resolution 1,158, of June 21, 2011, the supply tariffs for small concessionaires were changed. The average supply tariff for small concessionaires is R$ 135.27/MWh, with an adjustment of around 0.64%.
Copel’s main tariffs for the supply of energy are presented in the following table:
101
Tariffs for the supply of energy | R$/MWh | ||
June 2011 | June 2010 | Variation | |
Auction - CCEAR 2005-2012 |
76.06 | 72.18 | 5.4% |
Auction - CCEAR 2006-2013 |
89.99 | 85.25 | 5.6% |
Auction - CCEAR 2007-2014 |
99.72 | 94.75 | 5.2% |
Auction - CCEAR 2008-2015 |
106.31 | 100.86 | 5.4% |
Auction - CCEAR 2009-2016 |
120.67 | 114.79 | 5.1% |
Auction - CCEAR 2011-2040 |
19.63 | - | 0.0% |
Concessionaries within the State of Paraná |
135.27 | 141.85 | -4.6% |
Transmission Revenues Readjustment
Aneel adjusted Copel’s transmission revenues as from July 2011 so that the 2011/2012 cycle was R$ 295,127. In accordance with the concession agreement the index used was the accumulated annual IGP-M (general market price index) of 9.77%. For the new facilities (RBNI) Aneel recalculated the IRT (tariff readjustment index) for 2010 which had repositioned the revenue by -22.88% and the new repositioning index stood at -19.94%. This resulted in additional annual revenue of R$ 5,000. New transmission facilities were also considered which entered into operation bringing an increase in annual revenue of around R$ 14,800.
5 Economic financial results |
Income (Note 28)
At June 2011, net income from sales and services reached R$ 3,668,538, an increase of 12.4% compared to the amount of R$ 3,264,867 registered to June 2010.
This variation was due mainly to the following factors:
(i) increase of 4.7% in income from the supply of energy, which reflects only income from the sale of energy, without considering the Tusd, as a result of the increase in the total market (the captive market increased 4% in the first semester of 2011), extinction of the policy for offering discounts on tariffs to customers who paid their bills on the due date, and an average increase in the tariff of as provided by Aneel;
(ii) increase of 5.1% in income from the supply of energy, mainly due to the increase in income earned from auction, for the amount of R$ 47,672, Câmara de Comercialização de Energia Elétrica - CCEE, for the amount of R$ 5,087 and an increase in the value from bilateral contracts of R$ 12,210;
(iii) increase in the availability of the energy grid (consisting of TUSD income, income from the basic transmission grid and income from the connection grid) of 27.7% due mainly to the increase of 3.7% reported on the wire market and the tariff adjustment;
(iv) increase of 23.9% in income reported by Copel Telecomunicações as a result of attending new clients and the greater volume of services provided to existing clients; and
(v) increase of 24.3% from other operational income due mainly to rental income from Usina Termelétrica UEGA.
102
Operational costs and expenses (Note 29)
At the end of June 2011, total operational costs and expenses amounted to R$ 2,886,580, which represented an increase of 8.8% compared to the R$ 2,652,269 registered in the same period for 2010. The main highlights are as follows:
Increase of 11.3% to the account for energy purchased for resale due mainly to the increase in (i) the purchase of energy in auctions, for the amount of R$ 130,333; offset by the lower value for: (ii) purchase of power from Eletrobrás in the amount of R$ 29,323 and (iii) energy purchased from CCEE, for the amount of R$ 12,191.
Decrease of 28.7% in provisions and reversals arising mainly from the reversal of provisions for labor claims of R$ 24,784 and taxes, for the amount of R$ 33,278, compensated by the additional provision for civil and administrative claims, for the amount of R$ 22,276.
The increase of 15.4% in third party services, which is due mainly to the increase in telephone expenses, data processing and transmission, travel expenses e administrative support.
The balance presented as Personnel and officers registered an increase of 12.9% compared to the same period of 2010, reflecting mainly the definitions of the new plan for jobs and salaries occurring in June 2011 and the amounts referring to adherence to the Permanent Program for Succession and Voluntary Termination (PSDV)
A 23.2% increase in the pension and healthcare plans resulting mainly from the effects of the actuarial valuation, calculated by a contracted actuary.
Financial results (Note 30)
A 19.5% decrease in financial income due mainly to the decrease on account of monetary variations on the CRC, which is restated by the IGP-DI (general price index - internal unavailability), an index which from January to June 2011 showed a positive change of 3.0%, while in the same period of 2010 there was a positive change of 5.5%.
Ebitda – adjusted
Adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) reached R$ 1,051,843 in June 2011, 18.52% higher than that reported for the same period from the previous year, as demonstrated below:
Calculation of Lajida/Ebitda | Consolidated | |
6.30.2011 | 6.30.2010 | |
Net income for the period |
642,312 | 570,710 |
Deferred IRPJ and CSLL |
(117,494) | (18,008) |
Provision for IRPJ and CSLL |
439,161 | 297,447 |
Equity in income of subsidiaries |
(34,882) | (54,869) |
Financial expenses (income), net |
(147,139) | (182,682) |
Lajir/Ebit |
781,958 | 612,598 |
Depreciation and amortization |
269,885 | 274,849 |
Lajida/Ebitda - adjusted |
1,051,843 | 887,447 |
Net operational results - ROL |
3,668,538 | 3,264,867 |
Ebitda% (Ebitda ÷ ROL) | 28.7% | 27.2% |
103
Net profit for the period
Between January and June 2011, Copel reported net profit of R$ 642,312, 12.55% higher than that reported for the same period from 2010.
Compensation Account for “Part A”
The Compensation Account for Variations in Items from “Part A” - CVA accompanies the variations reported between the amounts homologated for tariff adjustments, and the amounts actually incurred during the tariff period, from the following cost components of “Part A”: Purchase of electric power (Bilateral, Itaipu and Auctions), Energy Transportation Cost (Transport from Itaipu and the Basic Grid) and Sector Charges (Fuel Consumption Account - CCC; Energy Development Account - CDE; System Service Charges - ESS and Incentive Program for Alternative Energy Sources - Proinfa).
Aneel authorized Copel Distribuição, through Homologatory Resolution 1,158, of June 22, 2010, to adjust its supply tariffs as from June 24, 2010, by an average rate of 5.55%, with 5.77% that refers to the tariff adjustment index and -0.22% for the pertinent financial components, of which, CVA, represents a total of (R$ 120,071), consisting of 2 parts : CVA being processed, for the tariff year 2010-2011, for the amount of (R$ 119,409), and the balance to compensate for CVA from prior years for the amount of R$ (662).
104
Composition of balances for CVA
Consolidated | Current assets |
Non current assets | ||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |
CVA recoverable tariff adjustment 2010 | ||||
CCC (Fuel consumption account) |
- | 31,758 | - | - |
Charges for use of transmission system (basic grid) |
- | 20,871 | - | - |
Energy purchased for resale (Itaipu) |
- | 20,861 | - | - |
CDE |
- | 5,220 | - | - |
Proinfa |
- | 4,974 | - | - |
Energy purchased for resale (CVA Energ) |
- | 6,345 | - | - |
Transport of energy purchased (Itaipu) |
- | 1,156 | - | - |
- | 91,185 | - | - | |
CVA recoverable tariff adjustment 2011 | ||||
CCC (Fuel consumption account) |
13,176 | 7,023 | - | 7,023 |
Charges for use of transmission system (basic grid) |
- | 981 | - | 981 |
CDE |
8,045 | 1,134 | - | 1,134 |
Proinfa |
- | 188 | - | 188 |
Transport of energy purchased (Itaipu) |
2,222 | 801 | - | 801 |
23,443 | 10,127 | - | 10,127 | |
CVA recoverable tariff adjustment 2012 | ||||
CCC (Fuel consumption account) |
- | - | 2,066 | - |
Charges for use of transmission system (basic grid) |
- | - | 8,015 | - |
CDE |
- | - | 5,405 | - |
Energy purchased for resale (CVA Energ) |
- | - | 999 | - |
Transport of energy purchased (Itaipu) |
- | - | 561 | - |
- | - | 17,046 | - | |
23,443 | 101,312 | 17,046 | 10,127 | |
Consolidated | Current liabilities |
Non current liabilities | ||
6.30.2011 | 12.31.2010 | 6.30.2011 | 12.31.2010 | |
CVA compensable tariff adjustment 2010 | ||||
ESS |
- | 40,434 | - | - |
Energy purchased for resale (CVA Energ) |
- | 20,439 | - | - |
- | 60,873 | - | - | |
CVA compensable tariff adjustment 2011 | ||||
Charges for use of transmission system (basic grid) |
8,470 | - | - | - |
Energy purchased for resale (Itaipu) |
20,828 | 6,040 | - | 6,040 |
ESS |
25,793 | 3,600 | - | 3,600 |
Proinfa |
1,297 | - | - | - |
Energy purchased for resale (CVA Energ) |
71,557 | 26,158 | - | 26,158 |
127,945 | 35,798 | - | 35,798 | |
CVA compensable tariff adjustment 2012 | ||||
Energy purchased for resale (Itaipu) |
- | - | 18,678 | - |
ESS |
- | - | 14,615 | - |
Proinfa |
- | - | 236 | - |
Energy purchased for resale (CVA Energ) |
- | - | 14,656 | - |
- | - | 48,185 | - | |
127,945 | 96,671 | 48,185 | 35,798 |
105
Changes in CVA
Balance as of 12.31.2010 |
Differ. | Amortiz . | Correction | Transf. | Balance as of 6.30.2011 | |
Assets | ||||||
CCC |
45,804 | 621 | (33,303) | 2,120 | - | 15,242 |
Charges for use of transmission system (basic grid) |
22,833 | 6,283 | (21,833) | 732 | - | 8,015 |
Energy purchased for resale (Itaipu) |
20,861 | - | (21,732) | 871 | - | - |
ESS |
- | - | - | - | - | - |
CDE |
7,488 | 10,869 | (5,458) | 551 | - | 13,450 |
Proinfa |
5,350 | (375) | (5,184) | 209 | - | - |
Energy purchased for resale (CVA Energ) |
6,345 | 1,172 | (6,345) | (173) | - | 999 |
Transport of energy purchased (Itaipu) |
2,758 | 1,089 | (1,208) | 144 | - | 2,783 |
111,439 | 19,659 | (95,063) | 4,454 | - | 40,489 | |
Current |
101,312 | 2,444 | (95,063) | 4,480 | 10,270 | 23,443 |
Non current - NC |
10,127 | 17,215 | - | (26) | (10,270) | 17,046 |
Liabilities | ||||||
Charges for use of transmission system (basic grid) |
- | 8,261 | - | 209 | - | 8,470 |
Energy purchased for resale (Itaipu) |
12,080 | 25,749 | - | 1,677 | - | 39,506 |
ESS |
47,634 | 32,047 | (41,493) | 3,220 | - | 41,408 |
Proinfa |
- | 1,476 | - | 57 | - | 1,533 |
Energy purchased for resale (CVA Energ) |
72,755 | 29,362 | (21,481) | 5,577 | - | 86,213 |
132,469 | 96,895 | (63,974) | 10,740 | - | 176,130 | |
Current |
96,671 | 35,415 | (63,974) | 9,309 | 50,524 | 127,945 |
Noncurrent - NC |
35,798 | 61,480 | - | 1,431 | (50,524) | 48,185 |
Raising of Funds – Debt Refinancing
Considering the maturity on September 1, 2011 of the fourth issue of debentures, issued in September 2006, in the amount of R$ 600 million, the raising of funds by Copel for refinancing this debt was approved by the Board of Directors on August 3, 2011.
OTHER INFORMATION THAT THE COMPANY UNDERSTANDS TO BE
RELEVANT
In compliance with the Rules of Differentiated Practices of Level 1 Corporate Governance of BOVESPA, we present the shareholding position of holders of more than 5% of the shares of each type and class of the Company and the consolidated shareholding position of the controllers and administrators of outstanding shares
C O M P A N H I A P A R A N A E N S E D E E N E R G I A - C O P E L | As of 6.30.2011 (in shares) | ||||||||
SHAREHOLDING POSITION OF THE HOLDERS OF MORE THAN 5% OF EACH CLASS OF STOCK (ENTITIES AND INDIVIDUALS) | |||||||||
SHAREHOLDERS | Common shares | Class A Preferred Shares | Class B Preferred Shares | Total | |||||
Shares | % | Shares | % | Shares | % | Shares | % | ||
CONTROLLING SHAREHOLDERS |
STATE OF PARANÁ | 85,028,598 | 58.63 | - | - | 13,639 | 0.01 | 85,042,237 | 31.08 |
BNDES PARTICIPAÇÕES S.A. - BNDESPAR | 38,298,775 | 26.41 | - | - | 27,282,006 | 21.27 | 65,580,781 | 23.96 | |
OTHER SHAREHOLDERS | 21,703,707 | 14.96 | 387,897 | 100.00 | 100,940,753 | 78.71 | 123,032,357 | 44.96 | |
TOTAL | 145,031,080 | 100.00 | 387,897 | 100.00 | 128,236,398 | 100.00 | 273,655,375 | 100.00 | |
Obs.: BNDES Participações S.A. - BNDESPAR is a public company, wholly-owned by Banco Nacional de Desenvolvimento Social - BNDES, which is 100.0% owned by the Federal | |||||||||
Government. It holds a shareholders' agreement with the State Government. |
106
C O M P A N H I A P A R A N A E N S E D E E N E R G I A - C O P E L | As of 6.30.2010 (in shares) | ||||||||
SHAREHOLDING POSITION OF THE HOLDERS OF MORE THAN 5% OF EACH CLASS OF STOCK (ENTITIES AND INDIVIDUALS) | |||||||||
SHAREHOLDERS | Common shares | Class A Preferred Shares | Class B Preferred Shares | Total | |||||
Shares | % | Shares | % | Shares | % | Shares | % | ||
CONTROLLING SHAREHOLDERS |
STATE OF PARANÁ | 85,028,598 | 58.63 | - | - | 13,639 | 0.01 | 85,042,237 | 31.08 |
BNDES PARTICIPAÇÕES S.A. - BNDESPAR | 38,298,775 | 26.41 | - | - | 27,282,006 | 21.28 | 65,580,781 | 23.96 | |
OTHER SHAREHOLDERS | 21,703,707 | 14.96 | 394,021 | 100.00 | 100,934,629 | 78.71 | 123,032,357 | 44.96 | |
TOTAL | 145,031,080 | 100.00 | 394,021 | 100.00 | 128,230,274 | 100.00 | 273,655,375 | 100.00 | |
Obs.: BNDES Participações S.A. - BNDESPAR is a public company, wholly-owned by Banco Nacional de Desenvolvimento Social - BNDES, which is 100.0% owned by the Federal | |||||||||
Government. It holds a shareholders' agreement with the State Government. | |||||||||
C O M P A N H I A P A R A N A E N S E D E E N E R G I A - C O P E L | As of 6.30.2011 (in shares) | ||||||||
CONSOLIDATED SHAREHOLDING POSITION OF THE MAJORITY SHAREHOLDERS AND SENIOR MANAGEMENT OF THE | |||||||||
COMPANY AND FREE-FLOATING STOCK | |||||||||
SHAREHOLDERS | Common shares | Class A Preferred Shares | Class B Preferred Shares | Total | |||||
Shares | % | Shares | % | Shares | % | Shares | % | ||
MAJORITY SHAREHOLDER | 123,327,373 | 85.04 | - | - | 27,295,645 | 21.29 | 150,623,018 | 55.04 | |
S. MANAGEMENT | BOARD OF DIRECTORS | 9 | 0.00 | - | - | - | - | 9 | 0.00 |
BOARD OF OFFICERS | 3 | 0.00 | - | - | 2,500 | 0.00 | 2,503 | 0.00 | |
FISCAL COUNCIL | 10,000 | 0.01 | 10 | 0.00 | 10,010 | ||||
OTHER SHAREHOLDERS | 21,693,695 | 14.96 | 387,897 | 100.00 | 100,938,243 | 78.71 | 123,019,835 | 44.95 | |
TOTAL | 145,031,080 | 100.00 | 387,897 | 100.00 | 128,236,398 | 100.00 | 273,655,375 | 100.00 | |
FREE-FLOAT | 21,693,695 | 14.96 | 387,897 | 100.00 | 100,938,243 | 78.71 | 123,019,835 | 44.95 | |
C O M P A N H I A P A R A N A E N S E D E E N E R G I A - C O P E L | As of 6.30.2010 (in shares) | ||||||||
CONSOLIDATED SHAREHOLDING POSITION OF THE MAJORITY SHAREHOLDERS AND SENIOR MANAGEMENT OF THE | |||||||||
COMPANY AND FREE-FLOATING STOCK | |||||||||
SHAREHOLDERS | Common shares | Class A Preferred Shares | Class B Preferred Shares | Total | |||||
Shares | % | Shares | % | Shares | % | Shares | % | ||
MAJORITY SHAREHOLDER | 123,327,373 | 85.04 | - | - | 27,295,645 | 21.29 | 150,623,018 | 55.04 | |
S. MANAGEMENT | BOARD OF DIRECTORS | 9 | 0.00 | - | - | - | - | 9 | 0.00 |
BOARD OF OFFICERS | 102 | 0.00 | - | - | - | - | 102 | 0.00 | |
OTHER SHAREHOLDERS | 21,703,596 | 14.96 | 394,021 | 100.00 | 100,934,629 | 78.71 | 123,032,246 | 44.96 | |
TOTAL | 145,031,080 | 100.00 | 394,021 | 100.00 | 128,230,274 | 100.00 | 273,655,375 | 100.00 | |
FREE-FLOAT | 21,703,596 | 14.96 | 394,021 | 100.00 | 100,934,629 | 78.71 | 123,032,246 | 44.96 |
107
ABCD
Management Board |
|
President: |
Mauricio Schulman |
Executive Secretary: |
Lindolfo Zimmer |
Members: |
PAULO PROCOPIAK DE AGUIAR JOSE RICHA FILHO PEDRO LUIZ CERIZE FABIANO BRAGA CORTES CARLOS HOMERO GIACOMINI NILTON CAMARGO COSTA |
AUDIT COMMITTEE |
|
President: |
Paulo Procopiak de Aguiar |
Members: |
JOSE RICHA FILHO PEDRO LUIZ CERIZE |
FISCAL COUNCIL |
|
President: |
Joaquim Antonio Guimarães de Oliveira Portes |
Full members: |
Luiz Eduardo da Veiga Sebastiani JOSÉ TAVARES DA SILVA NETO JORGE MICHEL LEPELTIER WANCLER FERREIRA DA SILVA |
Alternate Members: |
OSNI RISTOW ROBERTO BRUNNER MARCELO CERIZE JOSÉ LUIZ MONTANS ANACLETO JUNIOR |
BOARD OF DIRECTORS |
|
Managing Director |
Lindolfo Zimmer |
Director of Corporate Management |
Yára Christina Eisenbach |
Distribution Director |
PEDRO AUGUSTO DO NASCIMENTO NETO |
Engineering Director |
Jorge Andriguetto Junior |
Director of finance, investor relations and control of investment interests |
Ricardo Portugal Alves |
Director of energy generation and transmission and telecommunications |
Jaime de Oliveira Kuhn |
Director of the environment and Business Citizenship |
Gilberto Mendes Fernandes |
Legal director |
Julio Jacob Junior |
ACCOUNTANT |
|
Accountant - CRC-PR-045809/0-2 |
ADRIANO FEDALTO |
Information on this report: rsustentabilidade@copel.com |
Phone: +55 (41) 3331-4051 |
Information |
Phone: +55 (41) 3222-2027 / 3331-4359 |
|
Fax: +55 (41) 3331-2849 |
108
ABCD |
|
KPMG Auditores Independentes Al. Dr. Carlos de Carvalho, 417 - 16º 80410-180 - Curitiba, PR - Brasil Caixa Postal 13533 80420-990 - Curitiba, PR - Brasil |
Central Tel |
55 (41) 3544-4747 55 (41) 3544-4750 |
REPORT ON QUARTERLY INFORMATION REVIEW
To the Shareholders and Management
Companhia Paranaense de Energia - COPEL
Curitiba - PR
Introduction
We have revised the individual and consolidated interim financial information of Companhia Paranaense de Energia - COPEL included in the Quarterly Information Forms, for the quarter ended June 30, 2011, which include the balance sheet at June 30, 2011 and related statements of income for the quarter and six months then ended, the statements of changes in shareholders’ equity and cash flows for the six months then ended, including a summary of the significant accounting practices and other notes to the financial statements.
Management is responsible for preparing the individual interim financial information in accordance with Technical Pronouncement CPC 21 - Interim Statements and consolidated interim financial information in accordance with CPC 21 and with the international standard IAS 34 – Interim Financial Reporting, issued by the International Accounting Standards Board – IASB, and for presenting this information in a manner consistent with the norms issued by the Securities and Exchange Commission of Brazil (CVM), applicable for preparing Quarterly Information Forms - ITR. Our responsibility is to express a conclusion on these interim financial statements based on our review.
Extent of our review
We performed our review in accordance with Brazilian and international standards for reviewing interim information (NBC TR 2410 – Review of Interim Information Performed by the Entity’s Auditors ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making enquiries, mainly of persons responsible for financial and accounting issues and applying analytical procedures and other review procedures. The extent of our review is significantly less than that for an audit undertaken in accordance with auditing standards and consequently, did not enable us to obtain assurance that we were informed of all of the significant issues that could be identified during an audit. Therefore, we do not express an audit opinion.
Conclusion on the individual interim financial information
Based on our review, we are not aware of any fact that leads us to understand that the aforementioned interim individual financial information included in the Quarterly Information Forms – ITR referred to above was not prepared, in all material respects, in accordance with CPC 21 applicable to the preparation of Quarterly Information Forms – ITR and presented in a manner consistent with the norms issued by the Securities and Exchange Commission of Brazil (CVM).
109
KPMG Auditores Independentes., uma sociedade simples brasileira, de responsabilidade limitada, e firma-membro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative (“KPMG International”), uma entidade suíça. |
KPMG Auditores Independentes, a Brazilian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. |
ABCD
Conclusion on the consolidated interim financial information
Based on our review, we are not aware of any fact that leads us to understand that the aforementioned interim consolidated financial information included in the Quarterly Information Forms – ITR referred to above was not prepared, in all material respects, in accordance with CPC 21 and IAS 34 applicable to the preparation of Quarterly Information Forms – ITR and presented in a manner consistent with the norms issued by the Securities and Exchange Commission of Brazil (CVM).
Other issues
Interim statements of added value
We also reviewed the individual and consolidated interim statements of added value, for the six months period ended June 30, 2011, which are management’s responsibility and presentation of which in the interim information is required according to the norms issued by the Securities and Exchange Commission of Brazil (CVM), applicable for preparing Quarterly Information Forms - ITR and considered supplementary information by the IFRS, which do not require a statement of added value to be reported. These statements were subject to the same review procedures described previously, and based on our review, we are not aware of any fact that leads us to understand that they were not prepared, in all material respects, in accordance with the interim individual and consolidated statements taken as a whole.
The financial statements for the year ended December 31, 2010, whose balance sheet is presented for comparison purposes and the quarterly information for the quarter ended June 30, 2010, were examined by other independent auditors, who issued their unqualified opinion and review report, dated March 22, 2011 and May 16, 2011, respectively.
Curitiba, August 9, 2011
KPMG Auditores Independentes
CRC 2SP014428/O-6-F-PR
José Luiz Ribeiro de Carvalho Accountant-CRC 1SP141128/O-2-S-PR
João Alberto Dias Panceri
Accountant- CRC PR048555/O-2
110
COMPANHIA PARANAENSE DE ENERGIA – COPEL | ||
By: |
/S/ Lindolfo Zimmer
|
|
Lindolfo Zimmer CEO |
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.
K.!#_]@'
M'D@"`$SX1B(`$(5^M`,,>R##('87
M#ZS]`Q)YJ"A![+$#22B+'\8@PY0,T851Y$,@Z?A!-`0""4/LSA0<_X0%9F#N
M ._(]@[]D`_NT`YSHP^=(`7A4`_/T`QB-"I&X@_^0.\@$P^"_1/MGA&OK@]K8`%^)!"[,`%R$`][P`"%[`$S8`UC(`85L`.E8`)E,"*:8`11
M``!)0`[AX`5=,`CF(`]SX'9CD`+XH@Y]D`5;X`V/_ZL!/:`+.-`,?``'.\`&
M\X`-*<`!>A`+$3`% >,T>"]S@R3ZM:%#,/_U,X@M4^\!BC431.&&&&.EH[777OIMOOMA5
MD7T^^TZF?=7:Q/1333+UNR/1.?5?^8\]TT3SCD3L00UHW`\J_/A&,M31#WYH
MHSO,J)(]V.$,`/:#'-*PQS_NX8QD3&T>]>,&-)+A#&TDHQKYT( 3).+P"H-P!ED0!IP`)_:0"4-0!$(P!%B0A7#`!6-0!W``!V(0JV0`
M!_GK!FZ@!KS;".A@#J-P!W+@!G.`"E;[4F%E2,/!@VZ<)[])'*@Q;>>W4LGW
M@!:"&KIA.93Q#K:`!!20``>3`4LC`72P !_@".MC2)3%GYWD`),W+^*Z;P^P`IE@J!I.VS\S;;O!/X\AB4#QPW2*
M6)<9$>[&4W@N66FA2KWE@'GK$&)T.6T.5B,1.<&Q1'^^JOO_LG+IL`E&4`1(
M``5'``2+X).;D)-OK05&`/>-@5IYJJJSH0^;`"KHH!UR`/;[`!
M*D`+__`*'H`,@9`!%\H1S0`,T!"L`X$.49!1`\$*):"L._`'^_`&93`&@7`-
M_Z^@#5V0!']@+=9ZK2O!!V1PM5B;M5AK`;YY$,<``'9@$/A0"ZW0"`!P0U$0
M`]M`#2DP"9-P`A?J"AZ0-/9``UH0#M.`"!+0!3E``Y+Y#R3P!.B0!AP@#:P`
M`+>P#[N`"H+01O\`"[HE#MUP"`J`!AVU+%C0`5O``FCP#^H``,I(%B,[$*K*
MHB?(`BE[# ^WO8MWGCN6
-<]X,`%&$,5I$(Q9($29$`.S,(3>$`C=$,5/(I$9$,9
M0,$@T(,D<``@C,((U,$_J(('6`$@_,`L!`,*N$`B$`$FP`.^$@L#EPRG4P3#<*$;@
M@S(@@MS8`S#<0JR]0AT(0@^AJ*6*9EN19F+$0R"X01TD@BB<@Y?M(U?$0@.4
M`$#_PS*$P`-\PJQDWCU<`YJ_U&[#1?GTPS4X027\434@:V!Z^K7M@RT\@S2D
M`2HHTCPPPA]0PSWP@RO4@!X\4CDD`0TTP:F.7LX27H_#11U]PS>0PZ/2ZY=C
M!3SX>@'5@Z\G)WF:3Z5S!1;5@QC4HLPH`O'*)>1"FT`3/=PR&<`II?0JSG
M#27P03E,(B7>N8HN.U!>>7XI'[3?`C\@@@B`03BT@R)<@1F$@SI$@B@H`R#,
M0ASTP3GT@RK@`#%P`P\D8`*CL4(CQ-HS:,$C),$G;!BX9TH\Q`$+[$`L3.*.
M&]JNJ[O`_S4[C;A[M/]#-XC!U`!#H*S!*&1#%4Q"*@P!,.2#(P2"/N3#$>Q"
M/Q""'!H:/UC"K6!$)IQ!/8S#$DCK/U0\1G"#(A!!.N)ZBG*2$8+\T(F\^I%\
MC9W\U,B#,KS"#HC%)4Q".Z!!0R4#%+S#/B"!SA]"SP.9KUF#(CV"/_[!)%R$
MTJ?Y(`RIG5O>QU/]O5E]5CQ[R6O]/R"#(#B#'8@%)HC]&,C-,7!!/?1#%ZQ]
MV_]8,NP2.;CC*UCE/VA"C25]N$,%*00]U*.[U/M]U;-[\AE0,R0!(YA#.93!
M,MSO'F3#&32"-,!!'HR#@S;#(@##12C"(60#&M#`D>J8/N`""/^,P`E$`3V@
M`B'XJ:D7@R(0KA^0P=2\@RU,PS%PME1T?)#U/>J3&^!C1?G<0R0$0B#H@CVT
M0B_P`SM80BXD0RXPPR$$PC.@02H$`@HC*4!(NO4,V3^#!Q$F5+B084.'#R%&
M-"@/5""+K_@Q.P3NG[I$GMP93$8HD+1_\CPQDK9O88P[$F'&E#F39DV8*`)!
MQ`&`F$V?/X$&%3J4:%&C1G'$.0HS#@Z;[F$\?DY"H2@)X`@!]^@!8'P0O7P`XN@$>)@!HW@"([0#(K0!,PPY[&>
M)XO`6<(0##O0"M'`!).PBOG`!J2@"AHT#\X`P?W0!