1Q14 Quarterly Information (ITR)

Eneva S.A.
(Publicly-held company)
Quarterly Information - ITR
at March 31, 2014
and report on review
of quarterly information
PricewaterhouseCoopers, Av. Jos Silva de Azevedo Neto 200, 1 e 2, Torre Evolution IV, Barra da Tijuca, Rio de Janeiro, RJ, Brasil 22775-056
T: (21) 3232-6112, F: (21) 3232-6113, www.pwc.com/br
PricewaterhouseCoopers, Rua da Candelria 65, 20, Rio de Janeiro, RJ, Brasil 20091-020, Caixa Postal 949,
T: (21) 3232-6112, F: (21) 2516-6319, www.pwc.com/br
2
(A free translation of the original in Portuguese)
Report on review of quarterly information
To the Board of Directors and Shareholders
Eneva S.A.
Introduction
We have reviewed the accompanying parent company and consolidated interim accounting
information of Eneva S.A. (the "Company"), included in the Quarterly Information Form (ITR) for the
quarter ended March 31, 2014, comprising the balance sheet as at that date and the statements of
operations, comprehensive loss, changes in equity and cash flows for the quarter then ended, and a
summary of significant accounting policies and other explanatory information.
Management is responsible for the preparation of the parent company interim accounting information
in accordance with the accounting standard CPC 21, Interim Financial Reporting, of the Brazilian
Accounting Pronouncements Committee (CPC), and of the consolidated interim accounting
information in accordance with CPC 21 and International Accounting Standard (IAS) 34 - Interim
Financial Reporting issued by the International Accounting Standards Board (IASB), as well as the
presentation of this information in accordance with the standards issued by the Brazilian Securities
Commission (CVM), applicable to the preparation of the Quarterly Information (ITR). Our
responsibility is to express a conclusion on this interim accounting information based on our review.
Scope of review
We conducted our review in accordance with Brazilian and International Standards on Reviews of
Interim Financial Information (NBC TR 2410 - Review of Interim Financial Information Performed by
the Independent Auditor of the Entity and ISRE 2410 - Review of Interim Financial Information
Performed by the Independent Auditor of the Entity, respectively). A review of interim information
consists of making inquiries, primarily of persons responsible for financial and accounting matters,
and applying analytical and other review procedures. A review is substantially less in scope than an
audit conducted in accordance with Brazilian and International Standards on Auditing and
consequently does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Eneva S.A.
3
Conclusion on the parent company
interim information
Based on our review, nothing has come to our attention that causes us to believe that the
accompanying parent company interim accounting information included in the quarterly information
referred to above has not been prepared, in all material respects, in accordance with CPC 21 applicable
to the preparation of the Quarterly Information, and presented in accordance with the standards
issued by the CVM.
Conclusion on the consolidated
interim information
Based on our review, nothing has come to our attention that causes us to believe that the
accompanying consolidated interim accounting information included in the quarterly information
referred to above has not been prepared, in all material respects, in accordance with CPC 21 and IAS
34 applicable to the preparation of the Quarterly Information, and presented in accordance with the
standards issued by the CVM.
Emphasis of matter
Continuity of the Company's operations
We draw attention to Note 1 to this quarterly information, which states that the Company recorded, at
March 31, 2014, an accumulated deficit of R$ 2.447.591 thousand and presented an excess of current
liabilities over current assets in the parent company and consolidated quarterly information of
R$ 1.577.095 thousand and R$ 2.413.269 thousand, respectively. This, along with other matters as
described in Note 1, indicates the existence of a material uncertainty which may raise significant doubt
about the ability of Eneva S.A. to continue as a going concern, which will depend on the success of its
current plans that include capital increase , sale of assets and renegotiations to reschedule the
maturities of loans from third parties as described in subsequent events in Note 29. No adjustments
arising from these uncertainties were included in the interim accounting information. Our conclusion
is not qualified in respect of this matter.
Audit and reviewof prior-year information
The Quarterly Information Form (ITR) mentioned in the first paragraph includes accounting
information related to the statement of operations, changes in equity, cash flows and value added for
the quarter ended March 31, 2013, obtained from the ITR as at that date, presented for comparison
purposes. The review of the Quarterly Information (ITR) for the quarter ended March 31, 2013 was
conducted by other independent auditors, who issued an unqualified review report dated May 8, 2013
that included the same emphasis of matter of the aforementioned paragraph.
Eneva S.A.
4
Other matters
Statements of value added
We have also reviewed the parent company and consolidated statements of value added for the quarter
ended March 31, 2014. These statements are the responsibility of the Company's management, and are
required to be presented in accordance with standards issued by the CVM applicable to the
preparation of Quarterly Information (ITR) and are considered supplementary information under
IFRS, which do not require the presentation of the statement of value added. These statements have
been submitted to the same review procedures described above and, based on our review, nothing has
come to our attention that causes us to believe that they have not been prepared, in all material
respects, in a manner consistent with the parent company and consolidated interim accounting
information taken as a whole.
Rio de Janeiro, May 13, 2014
PricewaterhouseCoopers
Auditores Independentes
CRC 2SP000160/O-5 "F" RJ
Guilherme Naves Valle
Contador CRC 1MG070614/O-5 "S" RJ
Eneva S.A.
Balance Sheet - Assets
1
(Thousands of Reais)
Account Code Account Description
Current Quarter
3/31/2014
Previous Year
12/31/2013
1 Total Assets 4.600.013 4.751.985
1.01 Current Assets 49.301 141.241
1.01.01 Cash and Cash Equivalents 19.694 110.156
1.01.01.01 Cash and Bank deposits 312 509
1.01.01.02 Fundo Multimercado MPX 63 19.382 109.647
1.01.01.04 CDB - -
1.01.01.05 Other Fixed-Income Investments - -
1.01.02 Short-termInvestments - -
1.01.02.01 Short-terminvestments valued at Fair Value - -
1.01.02.01.01 Marketable Securities - -
1.01.02.01.02 Available-for-sale securities - -
1.01.02.02 Short-terminvestments valued at amortized cost - -
1.01.02.02.01 Securities Held to Maturity - -
1.01.03 Accounts Receivable - -
1.01.03.01 Trade accounts receivable - -
1.01.03.02 Other Accounts Receivable - -
1.01.04 Inventories - -
1.01.05 Agricultural Assets - -
1.01.06 Recoverable Taxes 28.248 25.701
1.01.06.01 Current Taxes Recoverable 28.248 25.701
1.01.07 Prepaid Expenses - -
1.01.08 Other Current Assets 1.359 5.384
1.01.08.01 Noncurrent Assets for Sale - -
1.01.08.02 Assets of Discontinued Operations - -
1.01.08.03 Other 1.359 5.384
1.01.08.03.01 Other Advances 1.320 1.175
1.01.08.03.02 Dividends Receivable - -
1.01.08.03.03 Gain on derivatives - 4.171
1.01.08.03.04 EscrowDeposits 39 38
1.01.08.03.06 Other Accounts Receivable - -
1.02 Noncurrent Assets 4.550.712 4.610.744
1.02.01 Long-TermAssets 1.276.933 1.464.405
1.02.01.01 Short-terminvestments valued at Fair Value - -
1.02.01.02 Short-terminvestments valued at amortized cost - -
1.02.01.03 Accounts Receivable - -
1.02.01.03.01 Trade accounts receivable - -
1.02.01.04 Inventories - -
1.02.01.05 Agricultural Assets - -
1.02.01.06 Deferred Taxes - -
1.02.01.06.01 Deferred Income and Social Contribution Taxes - -
1.02.01.07 Prepaid Expenses - -
1.02.01.08 Related-party Credits - -
1.02.01.08.01 Credits with Associated Companies - -
1.02.01.08.02 Credit with Subsidiaries - -
1.02.01.08.03 Credits with Controlling Shareholders - -
1.02.01.08.04 Other Related-party Credits - -
1.02.01.09 Other Noncurrent Assets 1.276.933 1.464.405
1.02.01.09.01 Noncurrent Assets for Sale - -
1.02.01.09.02 Assets of Discontinued Operations - -
1.02.01.09.03 Gain on Derivatives - -
1.02.01.09.04 EscrowDeposits - -
1.02.01.09.07 Recoverable Taxes 7.243 7.215
1.02.01.09.08 Accounts receivable fromother related parties 12.542 217.337
1.02.01.09.09 AFAC at Subsidiaries and Joint Ventures 136.295 206.678
1.02.01.09.10 Prepaid expense 841 841
1.02.01.09.11 Loan at Subsidiaries and Joint Ventures 979.289 909.327
1.02.01.09.12 Accounts receivable fromSubsidiaries and Joint Ventures 127.513 123.005
1.02.01.09.13 Embedded derivatives 13.207 -
1.02.01.09.14 Other Accounts Receivable 3 2
1.02.02 Investments 3.258.396 3.130.978
1.02.02.01 Equity Interests 3.258.396 3.130.978
1.02.02.01.01 Interests in Associated Companies 79.760 51.899
1.02.02.01.02 Interests in Subsidiaries 2.293.306 2.181.366
1.02.02.01.03 Interests in Joint Ventures 823.235 835.618
1.02.02.01.04 Other Equity Interests 62.095 62.095
1.02.02.02 Property for Investment - -
1.02.03 Property, plant and equipment 12.773 12.634
1.02.03.01 Property, plant and equipment in operation - -
1.02.03.02 Leased property, plant and equipment - -
1.02.03.03 Property, plant and equipment in progress - -
1.02.04 Intangible assets 2.610 2.727
1.02.04.01 Intangible assets - -
1.02.04.01.01 Concession Agreement - -
1.02.05 Deferred charges - -
Eneva S.A.
Balance Sheet - Liabilities
2
Current Quarter
3/31/2014
Previous Year
12/31/2013
2 Total Liabilities 4.600.013 4.751.985
2.01 Current Liabilities 1.626.396 1.580.010
2.01.01 Social and labor obligations 9.006 8.424
2.01.01.01 Payroll Obligations - -
2.01.01.02 Labor Obligations 9.006 8.424
2.01.02 Trade payables 5.312 3.473
2.01.02.01 Domestic Trade Payables 5.312 3.473
2.01.02.02 Foreign Trade payables - -
2.01.03 Tax Obligations 575 709
2.01.03.01 Federal Tax Liabilities 575 709
2.01.03.01.01 Income taxes and contributions payable 575 709
2.01.03.02 State Tax Liabilities - -
2.01.03.03 Municipal Tax Liabilities - -
2.01.04 Loans and Financing 1.606.422 1.562.323
2.01.04.01 Loans and Financing 1.606.253 1.562.211
2.01.04.01.01 In local currency 1.606.253 1.562.211
2.01.04.01.02 Foreign currency - -
2.01.04.02 Debentures 169 112
2.01.04.02.01 Principal - -
2.01.04.02.02 Interest 169 112
2.01.04.03 Financing through Financial Lease - -
2.01.05 Other liabilities 5.081 5.081
2.01.05.01 Related-Party Transactions - -
2.01.05.01.01 Debits with Associated Companies - -
2.01.05.01.02 Debts with Subsidiaries - -
2.01.05.01.03 Debits with Parent Companies - -
2.01.05.01.04 Debts with Other Related Parties - -
2.01.05.02 Other 5.081 5.081
2.01.05.02.01 Dividends and Interest on Shareholder's Equity Payable - -
2.01.05.02.02 Minimum Mandatory Dividend Payable - -
2.01.05.02.03 Expenses on Share Based Payments - -
2.01.05.02.04 Losses on Derivative Transactions - -
2.01.05.02.07 Profit Sharing 4.990 4.990
2.01.05.02.09 Other liabilities 91 91
2.01.06 Provisions - -
2.01.06.01 Tax, Welfare and Civil Contingencies - -
2.01.06.01.01 Tax Provisions - -
2.01.06.01.02 Social Security and Labor Provisions - -
2.01.06.01.03 Provisions for Employee Benefits - -
2.01.06.01.04 Civil Provisions - -
2.01.06.02 Other Provisions - -
2.01.06.02.01 Provisions for Guarantees - -
2.01.06.02.02 Provision for Reorganization - -
2.01.06.02.03 Provisions for environmental and deactivation liabilities - -
2.01.07 Liabilities on Noncurrent Assets for Sale and Discontinued Assets - -
2.01.07.01 Liabilities on Noncurrent Assets for Sale - -
2.01.07.02 Liabilities on Assets of Discontinued Operations - -
2.02 Noncurrent Liabilities 572.132 703.232
2.02.01 Loans and Financing 527.588 660.656
2.02.01.01 Loans and Financing 522.232 655.417
2.02.01.01.01 In local currency 522.232 655.417
2.02.01.02 Debentures 5.356 5.239
2.02.01.02.01 Principal 4.605 4.605
2.02.01.02.02 Interest 751 634
2.02.01.02.03 Embedded Derivatives - -
2.02.02.01 Related-Party Transactions 36.700 34.489
2.02.02.01.02 Debts with Subsidiaries - -
2.02.02.01.04 Debts with Other Related Parties 36.700 34.489
2.02.02.02 Other - -
2.02.02.02.02 Advance for Future Capital Increase - -
2.02.02.02.03 Losses on derivative transactions - -
2.02.02.02.04 Devaluation of investments - -
2.02.02.02.05 Unsecured Liability - -
2.02.03 Deferred Taxes - -
2.02.03.01 Deferred Income and Social Contribution Taxes - -
Eneva S.A.
Balance Sheet Liabilities (continued)
3
Current Quarter
3/31/2014
Previous Year
12/31/2013
2.02.04 Provisions 7.844 8.087
2.02.04.02 Other Provisions 7.844 8.087
2.02.04.02.05 Negative Equity 7.844 8.087
2.02.06 Unappropriated Prots and Revenue - -
2.02.06.01 Unappropriated Prots - -
2.02.06.02 Unappropriated Revenue - -
2.02.06.03 Unappropriated Investment Subsidies - -
2.03 Shareholders Equity 2.401.485 2.468.743
2.03.01 Realized Capital 4.532.315 4.532.313
2.03.02 Capital Reserves 354.025 350.514
2.03.02.01 Goodwill on Share Issuance - -
2.03.02.02 Special Goodwill Reserve under Merger - -
2.03.02.03 Sale of Subscription Bonus - -
2.03.02.04 Options Awarded 354.025 350.514
2.03.02.05 Treasury Stock - -
2.03.02.06 Advance for Future Capital Increase - -
2.03.03 Revaluation Reserves - -
2.03.04 Profit Reserves - -
2.03.04.01 Legal Reserve - -
2.03.04.02 Statutory Reserve - -
2.03.04.03 Reserve for Contingencies - -
2.03.04.04 Unrealized Profit Reserve - -
2.03.04.05 Profit Retention Reserve - -
2.03.04.06 Special Reserve for Undistributed Dividends - -
2.03.04.07 Tax Incentive Reserve - -
2.03.04.08 Additional Dividend Proposed - -
2.03.05 Retained Earnings/Accumulated Losses (2.432.731) (2.360.800)
2.03.06 Equity Appraisal Adjustments (52.124) (53.284)
2.03.07 Accumulated Translation Adjustments - -
2.03.08 Other Comprehensive Income - -
Eneva S.A.
Statement of Income
4
Accrued Value
of the Current
Year 1/1/2014
to 3/31/2014
Accrued Value
of the Prior Year
1/1/2013 to
3/31/2013
3.01 Revenue from goods sold and services rendered - -
3.02 Cost of goods and/or services sold - -
3.03 Gross Profit - -
3.04 Operating Income/Expenses (41.589) (220.392)
3.04.01 Sales Expenses - -
3.04.02 General and Administrative Expenses (28.324) (23.710)
3.04.02.01 Personnel and Management (13.287) (11.121)
3.04.02.02 Outsourced Services (11.925) (9.796)
3.04.02.03 Depreciation and Amortization (525) (453)
3.04.02.04 Leasing and Rentals (1.348) (1.080)
3.04.02.05 Other Expenses (1.239) (1.260)
3.04.03 Impairment of assets - -
3.04.04 Other Operating Income 21.870 14
3.04.04.01 Sale of PGN (OGX Maranho) 21.858 -
3.04.04.02 Other 12 14
3.04.05 Other Operating Expenses (129) (1.040)
3.04.05.01 Unsecured Liability 36 (1.040)
3.04.05.02 Provision for investment losses (165) 3
3.04.05.03 Losses on the sale of assets - (3)
3.04.06 Equity in Net Income of Subsidiaries (35.006) (195.656)
3.05 Earnings before financial income/loss and tax (41.589) (220.392)
3.06 Financial Income/Loss (30.342) (30.509)
3.06.01 Financial Revenue 62.753 14.982
3.06.01.01 Exchange Variance Gain 19.137 3.407
3.06.01.02 Interest-earning bank deposits 1.459 4.314
3.06.01.03 Derivative Financial Instruments 9.036 (1.443)
3.06.01.04 Fair value of debentures - (251)
3.06.01.05 Other Financial Revenue 61 1
3.06.01.06 Interest on loans 33.060 8.954
3.06.02 Financial Expenses (93.095) (45.491)
3.06.02.01 Exchange Variance Loss (15.149) (1.981)
3.06.02.02 Derivative Financial Instruments - (2.831)
3.06.02.03 Debenture Interest/Cost (211) (213)
3.06.02.04 Fair value of debentures - -
3.06.02.05 Debt charges (75.421) (23.349)
3.06.02.06 Other Financial Expenses (2.314) (17.117)
3.07 Earnings before tax on net income (71.931) (250.901)
3.08 Income and social contribution taxes on profit - -
3.08.01 Current - -
3.08.02 Deferred charges - -
3.09 Net Income from Continued Operations (71.931) (250.901)
3.10 Net Income from Discontinued Operations - -
3.10.01 Net income (loss) for the year from discontinued operations - -
3.10.02 Net Gains/Losses on Assets of Discontinued Operations - -
3.11 Net Income/Loss for the Period (71.931) (250.901)
3.99 Earnings per Share - (Reais / Share) - -
3.99.01 Basic Earnings per Share - -
3.99.01.01 Common (0) (0)
3.99.02 Diluted Earnings per Share - -
Eneva S.A.
Statement of Comprehensive Income
5
Accrued Value
of the Current
Year 1/1/2014
to 3/31/2014
Accrued Value
of the Prior Year
1/1/2013 to
3/31/2013
4.01 Net Income for the Period (71.931) (250.901)
4.02 Other Comprehensive Income (765) (1.763)
4.02.01 Cash flow hedges - hedge accounting - (1.100)
4.02.02 Effective portion of the changes in fair value of cash flow hedges - hedge accounting (1.160) (1.005)
4.02.03 Deferred income and social contribution taxes - hedge accounting 395 342
4.03 Comprehensive Income for the Period (72.696) (252.664)
Eneva S.A.
Statement of Cash Flows - Indirect Method
6
Accrued Value
of the Current
Year 1/1/2014
to 3/31/2014
Accrued Value
of the Prior Year
1/1/2013 to
3/31/2013
6.01 Net Cash from Operating Activities 232.719 (20.076)
6.01.01 Cash Provided by Operating Activities 30.896 (19.276)
6.01.01.01 Net income/loss before IR and CSLL (71.931) (250.901)
6.01.01.02 Depreciation and Amortization 525 453
6.01.01.03 Equity in Net Income of Subsidiaries 35.006 195.656
6.01.01.04 Operations with derivative financial instruments (9.036) 4.274
6.01.01.05 Stock Options Awarded 4.671 7.819
6.01.01.06 Amortization of deferred charges - -
6.01.01.07 Investment devaluation 165 (3)
6.01.01.08 Provision for Unsecured Liabilities (36) 1.040
6.01.01.09 Provision for Disassembly - -
6.01.01.10 Minority Interests - -
6.01.01.11 Deferred income and social contribution liabilities, net - -
6.01.01.12 Current income and social contribution taxes - -
6.01.01.13 Debenture Interest/Cost 211 213
6.01.01.14 Fair value of debentures - 251
6.01.01.15 Interest on loans and related parties 71.433 21.922
6.01.01.16 Adjustment for exchange loss - -
6.01.01.17 Equity Appraisal - -
6.01.01.18 Other (112) -
6.01.02 Changes in Assets and Liabilities 201.823 (800)
6.01.02.01 Other Advances (143) (39)
6.01.02.02 Prepaid Expenses - -
6.01.02.04 Escrow Deposits - -
6.01.02.05 Recoverable Taxes (2.575) (1.486)
6.01.02.06 Inventory - -
6.01.02.09 Taxes, Duties and Contributions (134) 341
6.01.02.10 Trade payables 1.840 2.746
6.01.02.11 Provisions and payroll charges 581 661
6.01.02.12 Accounts Payable - -
6.01.02.13 CCC Subsidies Receivable - -
6.01.02.14 Debts / Credits with related parties 202.498 (2.531)
6.01.02.15 AFAC to associated companies - -
6.01.02.16 Other Changes in investments - -
6.01.02.17 K > (244) (492)
6.01.02.18 Cash effect Spin-off CCX Carvo da Colmbia - -
6.01.02.19 Cash effect spin-off of E.On - -
6.01.03 Other - -
6.02 Net Cash from Investment Activities (162.568) (389.496)
6.02.01 Acquisition of PPE and intangible assets (435) (226)
6.02.02 Write-off of PPE and intangible assets - -
6.02.03 Securities - -
6.02.04 Capital contribution/AFAC in investments (92.170) (361.789)
6.02.05 Cash resulting from sale of property, plant and equipment and intangible assets - -
6.02.06 AFAC to associated companies - -
6.02.07 Debt to related parties (69.962) (28.145)
6.02.08 Dividend - 2.040
6.02.09 Contractual Retentions - -
6.02.10 Escrow Deposits (1) (1.376)
6.03 Net Cash from Financing Activities (160.613) 450.061
6.03.01 Financial Instruments - 315
6.03.02 Capital Increase - 241
6.03.03 Debt to related parties - -
6.03.07 Loans and Financing Obtained (160.576) 449.550
6.03.08 Capital decrease deriving from noncontrolling interests - -
6.03.09 Escrow Deposits - -
6.03.10 Issuance (payment) of debentures (37) (45)
6.03.11 AFAC to subsidiaries - -
6.03.12 Dividends - -
6.03.13 Adjustment spin-off CCX Carvo - Colombia - -
6.04 Exchange Variance on Cash and Cash Equivalents - -
6.05 Increase (Decrease) in Cash and Cash Equivalents (90.462) 40.489
6.05.01 Opening Balance of Cash and Cash Equivalents 110.156 206.263
6.05.02 Closing Balance of Cash and Cash Equivalents 19.694 246.752
Eneva S.A.
Statement of Changes in Equity
Period from 01/01/2014 to 03/31/2014
7
Paid-in share
capital
Capital
Reserves,
Options
Awarded and
Treasury Stock Profit Reserves
Retained
Earnings or
Accumulated
Losses
Other
Comprehensive
Income
Shareholders
Equity
5.01 Opening Balances 4.532.315 350.514 - (2.360.800) (53.284) 2.468.745
5.02 Prior-year Adjustments - - - - - -
5.03 Adjusted Opening Balances 4.532.315 350.514 - (2.360.800) (53.284) 2.468.745
5.04 Capital Transactions with Partners - 3.511 - - - 3.511
5.04.01 Capital Increases - - - - - -
5.04.02 Stock Issuance Expense - - - - - -
5.04.03 Awarded Options Recognized - 3.511 - - - 3.511
5.04.04 Treasury Stock Acquired - - - - - -
5.04.05 Treasury Stock Sold - - - - - -
5.04.06 Dividends - - - - - -
5.04.07 Interest in Shareholders Equity - - - - - -
5.05 Total Comprehensive Income - - - (71.931) 1.160 (70.771)
5.05.01 Net Income for the Period - - - - - -
5.05.02 Other Comprehensive Income - - - (71.931) 1.160 (70.771)
5.05.02.01 Financial Instrument Adjustments - - - - 1.160 1.160
5.05.02.02 Tax on Financial Instrument Adjustments - - - - - -
5.05.02.03 Equity Income on Comp. Income Subsidiaries and Associated Companies - - - - - -
5.05.02.04 Translation Adjustments in the Period - - - - - -
5.05.02.05 Taxes on Translation Adjustments in the Period - - - - - -
5.05.02.06 Loss for the period - - - (71.931) - (71.931)
5.05.03 Reclassification to Net Income - - - - - -
5.05.03.01 Financial Instrument Adjustments - - - - - -
5.06 Internal Changes in Shareholders' Equity - - - - - -
5.06.01 Creation of Reserves - - - - - -
5.06.02 Realization of Revaluation Reserve - - - - - -
5.06.03 Taxes on Realization of Revaluation Reserve - - - - - -
5.07 Closing Balances 4.532.315 354.025 - (2.432.731) (52.124) 2.401.485
Eneva S.A.
Statement of Changes in Equity
Period from 01/01/2013 to 03/31/2013
8
Paid-in share
capital
Capital
Reserves,
Options
Awarded and
Retained
Earnings or
Accumulated
Losses
Other
Comprehensive
Income
Shareholders
Equity
5.01 Opening Balances 3.731.734 321.904 - (1.364.978) (119.067) 2.569.593
5.02 Prior-year Adjustments - - - - - -
5.03 Adjusted Opening Balances 3.731.734 321.904 - (1.364.978) (119.067) 2.569.593
5.04 Capital Transactions with Partners 241 5.714 - - - 5.955
5.04.01 Capital Increases 241 - - - - 241
5.04.02 Stock Issuance Expense - - - - - -
5.04.03 Awarded Options Recognized - 5.714 - - - 5.714
5.04.04 Treasury Stock Acquired - - - - - -
5.04.05 Treasury Stock Sold - - - - - -
5.04.06 Dividends - - - - - -
5.04.07 Interest in Shareholders Equity - - - - - -
5.05 Total Comprehensive Income - - - (250.901) 2.105 (248.796)
5.05.01 Net Income for the Period - - - - - -
5.05.02 Other Comprehensive Income - - - (250.901) 2.105 (248.796)
5.05.02.01 Financial Instrument Adjustments - - - - 1.005 1.005
5.05.02.02 Tax on Financial Instrument Adjustments - - - - - -
5.05.02.03 Equity Income on Comp. Income Subsidiaries and Associated Companies - - - - - -
5.05.02.04 Translation Adjustments in the Period - - - - 1.100 1.100
5.05.02.05 Taxes on Translation Adjustments in the Period - - - - - -
5.05.02.07 Loss for the Period - - - (250.901) - (250.901)
5.05.03 Reclassification to Net Income - - - - - -
5.05.03.01 Financial Instrument Adjustments - - - - - -
5.06 Internal Changes in Shareholders' Equity - - - - - -
5.06.01 Creation of Reserves - - - - - -
5.06.02 Realization of Revaluation Reserve - - - - - -
5.06.03 Taxes on Realization of Revaluation Reserve - - - - - -
5.07 Closing Balances 3.731.975 327.618 - (1.615.879) (116.962) 2.326.752
Eneva S.A.
Statement of Value Added
9
Accrued Value
of the Current
Year 1/1/2014
to 3/31/2014
Accrued Value
of the Prior Year
1/1/2013 to
3/31/2013
7.01 Revenue - -
7.01.01 Sales of Goods, Products and Services - -
7.01.02 Other Revenue - -
7.01.03 Revenue relating to construction of company assets - -
7.01.04 Allowance/(Reversal of allowance) for doubtful accounts - -
7.02 Consumables acquired from third parties (12.447) (10.918)
7.02.01 Cost of goods and services sold - -
7.02.02 Material, Energy, Outsourced Services and Other (12.447) (10.918)
7.02.03 Loss/Recovery of Assets - -
7.02.04 Other - -
7.03 Gross Added Value (12.447) (10.918)
7.04 Retentions (525) (453)
7.04.01 Depreciation, Amortization and Depletion (525) (453)
7.04.02 Other - -
7.05 Net Added Value Produced (12.972) (11.371)
7.06 Transferred Added Value 30.340 (185.107)
7.06.03 Other 63.825 6.472
7.06.03.02 Provision for Unsecured Liabilities 36 (1.040)
7.06.03.04 Provision for devaluation of investments (165) 3
7.07 Total Added Value to be Distributed 17.368 (196.478)
7.08 Distribution of Added Value 17.368 (196.478)
7.08.01 Personnel 13.287 11.122
7.08.01.01 Direct Remuneration 8.402 8.536
7.08.01.02 Benefits 2.213 948
7.08.01.03 F.G.T.S. 2.672 1.638
7.08.01.04 Other - -
7.08.02 Taxes, Duties and Contributions 319 12
7.08.02.01 Federal 319 12
7.08.02.02 State - -
7.08.02.03 Municipal - -
7.08.03 Interest Expenses 75.693 43.289
7.08.03.01 Interest 211 213
7.08.03.02 Rent 1.348 1.080
7.08.03.03 Other 74.134 41.996
7.08.03.03.01 Losses on Derivative Transactions - 2.831
7.08.03.03.02 Advances to suppliers - -
7.08.03.03.03 Insurance 398 127
7.08.03.03.04 Exchange Variance (3.987) (1.426)
7.08.03.03.05 Studies and Projects - -
7.08.03.03.06 Financial Expenses 77.735 40.464
7.08.03.03.07 Other (12) -
7.08.04 Interest earnings (71.931) (250.901)
7.08.04.01 Interest on Shareholders Equity - -
7.08.04.02 Dividends - -
7.08.04.03 Retained Earnings/Loss for the Period (71.931) (250.901)
7.08.05 Other - -
Eneva S.A.
Consolidated Balance Sheet - Assets
10
Current Quarter
3/31/2014
Previous Year
12/31/2013
1 Total Assets 9.497.656 9.689.212
1.01 Current Assets 639.157 747.842
1.01.01 Cash and Cash Equivalents 96.801 277.582
1.01.01.01 Cash and Bank deposits 57.271 16.493
1.01.01.02 Fundo Multimercado MPX 63 30.693 202.444
1.01.01.03 Bradesco Corporate FIC FI Referenciado DI Federal - -
1.01.01.04 CDB 8.838 58.645
1.01.01.05 Other Fixed-Income Investments - -
1.01.02 Short-term Investments - -
1.01.02.01 Short-term investments valued at Fair Value - -
1.01.02.01.03 Securities - -
1.01.02.02 Short-term investments valued at amortized cost - -
1.01.03 Accounts Receivable 344.704 294.396
1.01.03.01 Trade accounts receivable 344.704 294.396
1.01.03.02 Other Accounts Receivable - -
1.01.04 Inventories 78.345 78.376
1.01.05 Agricultural Assets - -
1.01.06 Recoverable Taxes 55.950 47.651
1.01.06.01 Current Taxes Recoverable 55.950 47.651
1.01.07 Prepaid Expenses 10.601 9.825
1.01.08 Other Current Assets 52.757 40.012
1.01.08.01 Noncurrent Assets for Sale - -
1.01.08.02 Assets of Discontinued Operations - -
1.01.08.03 Other 52.757 40.012
1.01.08.03.01 Other Advances 5.783 5.001
1.01.08.03.03 Gain on Derivatives - 4.171
1.01.08.03.04 Escrow Deposits 39 38
1.01.08.03.05 CCC subsidies receivable 46.935 30.802
1.02 Noncurrent Assets 8.858.499 8.941.370
1.02.01 Long-Term Assets 854.497 966.682
1.02.01.01 Short-term investments valued at Fair Value - -
1.02.01.02 Short-term investments valued at amortized cost - -
1.02.01.03.01 Trade accounts receivable - -
1.02.01.04 Inventories - -
1.02.01.05 Agricultural Assets - -
1.02.01.06 Deferred Taxes 304.077 302.327
1.02.01.06.01 Deferred Income and Social Contribution Taxes 304.077 302.327
1.02.01.07 Prepaid Expenses 2.171 2.905
1.02.01.08 Related-party Credits - -
1.02.01.08.01 Credits with Associated Companies - -
1.02.01.08.03 Credits with Controlling Shareholders - -
1.02.01.08.04 Other Related-party Credits - -
1.02.01.09 Other Noncurrent Assets 548.250 661.450
1.02.01.09.01 Noncurrent Assets for Sale - -
1.02.01.09.02 Assets of Discontinued Operations - -
1.02.01.09.03 Gain on Derivatives - -
1.02.01.09.04 Escrow Deposits 128.672 118.606
1.02.01.09.05 CCC Subsidies Receivable - -
1.02.01.09.07 Recoverable Taxes 14.378 14.614
1.02.01.09.08 Accounts receivable from other related parties 13.886 218.680
1.02.01.09.09 AFAC at joint ventures 185 150
1.02.01.09.11 Loan with joint ventures 246.305 191.968
1.02.01.09.12 Accounts receivable from joint ventures 131.615 117.372
1.02.01.09.13 Embedded derivatives 13.207 -
1.02.01.09.14 Other Accounts Receivable 2 60
1.02.01.09.15 Securities - -
1.02.02 Investments 957.331 941.853
1.02.02.01 Equity Interests 957.331 941.853
1.02.02.01.01 Interests in Associated Companies 79.760 51.899
1.02.02.01.04 Other Equity Interests 877.571 889.954
1.02.02.02 Property for Investment - -
1.02.03 Property, plant and equipment 6.836.644 6.819.454
1.02.03.01 Property, plant and equipment in operation - -
1.02.03.02 Leased property, plant and equipment - -
1.02.03.03 Property, plant and equipment in progress - -
1.02.04 Intangible assets 210.026 213.381
1.02.04.01 Intangible assets - -
1.02.04.01.01 Concession Agreement - -
1.02.04.02 Goodwill - -
Eneva S.A.
Consolidated Balance Sheet - Liabilities
11
Current Quarter
3/31/2014
Previous Year
12/31/2013
2 Total Liabilities 9.497.656 9.689.212
2.01 Current Liabilities 3.052.426 2.978.859
2.01.01 Social and labor obligations 18.267 16.770
2.01.01.01 Payroll Obligations - -
2.01.01.02 Labor Obligations 18.267 16.770
2.01.02 Trade payables 338.185 331.216
2.01.02.01 Domestic Trade Payables 338.185 331.216
2.01.02.02 Foreign Trade payables - -
2.01.03 Tax Obligations 37.507 45.934
2.01.03.01 Federal Tax Liabilities 37.507 45.934
2.01.03.01.01 Income taxes and contributions payable 37.507 45.934
2.01.03.02 State Tax Liabilities - -
2.01.03.03 Municipal Tax Liabilities - -
2.01.04.02 Debentures 169 112
2.01.04.02.01 Principal - -
2.01.04.02.02 Interest 169 112
2.01.05.01 Related-Party Transactions - -
2.01.05.01.04 Debts with Other Related Parties - -
2.01.05.02 Other 180.202 176.685
2.01.05.02.01 Dividends and Interest on Shareholder's Equity Payable - -
2.01.05.02.02 Minimum Mandatory Dividend Payable - -
2.01.05.02.05 Contractual Retentions 79.942 84.789
2.01.05.02.06 Other Advances - -
2.01.05.02.07 Profit Sharing 8.148 8.148
2.01.05.02.08 Dividends Payable - -
2.01.05.02.09 Other liabilities 92.112 83.748
2.01.06 Provisions - -
2.01.06.02 Other Provisions - -
2.02 Noncurrent Liabilities 3.933.603 4.136.480
2.02.01.02 Debentures 5.356 5.239
2.02.01.02.01 Principal 4.605 4.605
2.02.01.02.02 Interest 751 634
2.02.01.02.03 Embedded Derivatives - -
2.02.02.01 Related-Party Transactions 286.704 307.720
2.02.02.01.04 Debts with Other Related Parties 286.704 307.720
2.02.02.02 Other - -
2.02.02.02.02 Advance for Future Capital Increase - -
2.02.02.02.04 Devaluation of investments - -
Eneva S.A.
Consolidated Balance Sheet - Liabilities (continued)
12
Current Quarter
3/31/2014
Previous Year
12/31/2013
2.02.03 Deferred Taxes 12.444 9.591
2.02.03.01 Deferred Income and Social Contribution Taxes 12.444 9.591
2.02.04 Provisions 8.331 11.552
2.02.04.02 Other Provisions 8.331 11.552
2.02.04.02.04 Provision for Disassembly 2.317 2.266
2.02.04.02.05 Unsecured Liability 6.014 9.286
2.02.06 Unappropriated Prots and Revenue - -
2.02.06.01 Unappropriated Prots - -
2.02.06.02 Unappropriated Revenue - -
2.02.06.03 Unappropriated Investment Subsidies - -
2.03 Consolidated Shareholders Equity 2.511.627 2.573.873
2.03.01 Realized Capital 4.532.314 4.532.313
2.03.02 Capital Reserves 354.025 350.514
2.03.02.01 Goodwill on Share Issuance - -
2.03.02.02 Special Goodwill Reserve under Merger - -
2.03.02.03 Sale of Subscription Bonus - -
2.03.02.04 Options Awarded 354.025 350.514
2.03.02.06 Advance for Future Capital Increase - -
2.03.02.07 Investments Reserve - -
2.03.02.08 Capital Reserves - -
2.03.03 Revaluation Reserves - -
2.03.04 Profit Reserves - -
2.03.04.01 Legal Reserve - -
2.03.04.02 Statutory Reserve - -
2.03.04.03 Reserve for Contingencies - -
2.03.04.04 Unrealized Profit Reserve - -
2.03.04.05 Profit Retention Reserve - -
2.03.04.06 Special Reserve for Undistributed Dividends - -
2.03.04.07 Tax Incentive Reserve - -
2.03.04.08 Additional Dividend Proposed - -
2.03.05 Retained Earnings/Accumulated Losses (2.447.591) (2.379.303)
2.03.06 Equity Appraisal Adjustments (52.124) (53.284)
2.03.07 Accumulated Translation Adjustments - -
2.03.08 Other Comprehensive Income - -
2.03.09 Minority Interests 125.233 123.633
Eneva S.A.
Consolidated Statement of Income
13
Accrued Value
of the Current
Year 1/1/2014
to 3/31/2014
Accrued Value
of the Prior Year
1/1/2013 to
3/31/2013
3.01 Revenue from goods sold and services rendered 586.771 196.098
3.02 Cost of goods and/or services sold (494.779) (312.608)
3.03 Gross Profit 91.993 (116.510)
3.04 Operating Income/Expenses (34.428) (123.531)
3.04.01 Sales Expenses - -
3.04.02 General and Administrative Expenses (36.791) (39.029)
3.04.02.01 Personnel and Management (15.292) (20.298)
3.04.02.02 Outsourced Services (17.358) (14.062)
3.04.02.03 Depreciation and Amortization (768) (638)
3.04.02.04 Leasing and Rentals (1.528) (1.677)
3.04.02.05 Other Expenses (1.845) (2.354)
3.04.03 Impairment of assets - -
3.04.04 Other Operating Income 21.870 511
3.04.04.02 Other 12 511
3.04.05 Other Operating Expenses (12.144) (1.522)
3.04.05.01 Unsecured Liability 110 (973)
3.04.05.02 Provision for investment losses (6.718) 3
3.04.05.03 Losses on the sale of assets - (552)
3.04.05.06 Other (5.538) -
3.05 Earnings before financial income/loss and tax 57.565 (240.041)
3.06 Financial Income/Loss (124.293) (77.827)
3.06.01.01 Exchange Variance Gain 21.368 3.888
3.06.01.02 Interest-earning bank deposits 5.433 4.922
3.06.01.04 Fair value of debentures - (251)
3.06.01.05 Other Financial Revenue 874 631
3.06.02 Financial Expenses (174.811) (90.528)
3.06.02.01 Exchange Variance Loss (16.012) (2.263)
3.06.02.02 Derivative Financial Instruments - (2.250)
3.06.02.03 Debenture Interest/Cost (211) (213)
3.06.02.04 Fair value of debentures - -
3.06.02.05 Debt charges (149.417) (58.087)
3.06.02.06 Other Financial Expenses (9.170) (27.713)
3.07 Earnings before tax on net income (66.728) (317.868)
3.08 Income and social contribution taxes on profit (3.837) 60.807
3.08.01 Current (2.733) -
3.08.02 Deferred charges (1.103) 60.807
3.09 Net Income from Continued Operations (70.565) (257.061)
3.10 Net Income from Discontinued Operations - -
3.10.01 Net income (loss) for the year from discontinued operations - -
3.10.02 Net Gains/Losses on Assets of Discontinued Operations - -
3.11 Consolidated Net Income/Loss for the Period (70.565) (257.061)
3.11.01 Attributed to Partners of the Parent Company (71.931) (250.901)
3.11.02 Attributed to Minority Partners 1.365 (6.160)
3.99 Earnings per Share - (Reais / Share) - -
3.99.01 Basic Earnings per Share - -
3.99.01.01 Common (0) (0)
3.99.02 Diluted Earnings per Share - -
Eneva S.A.
Consolidated Statement of Comprehensive Income
14
Accrued Value
of the Current
Year 1/1/2014
to 3/31/2014
Accrued Value
of the Prior Year
1/1/2013 to
3/31/2013
4.01 Consolidated Net Income for the Period (70.565) (257.061)
4.02 Other Comprehensive Income (765) (1.763)
4.02.01 Accumulated Translation Adjustments - (1.100)
4.02.02 Effective portion of the changes in fair value of cash flow hedges - hedge accounting (1.160) (1.005)
4.02.03 Deferred income and social contribution taxes - hedge accounting 394 342
4.03 Consolidated Comprehensive Income for the Period (71.331) (258.824)
4.03.01 Attributed to Partners of the Parent Company (72.696) (252.664)
4.03.02 Attributed to Minority Partners 1.365 (6.160)
Eneva S.A.
Consolidated Statement of Cash Flows - Indirect Method
15
Accrued Value
of the Current
Year 1/1/2014
to 3/31/2014
Accrued Value
of the Prior Year
1/1/2013 to
3/31/2013
6.01 Net Cash from Operating Activities 250.402 (98.573)
6.01.01 Cash Provided by Operating Activities 150.971 (147.065)
6.01.01.01 Net income/loss before IR and CSLL (66.728) (317.868)
6.01.01.02 Depreciation and Amortization 48.711 17.895
6.01.01.03 Equity in Net Income of Subsidiaries 7.361 83.491
6.01.01.04 Operations with derivative financial instruments (9.036) 3.693
6.01.01.05 Stock Options Awarded 4.671 7.819
6.01.01.06 Amortization of deferred charges - -
6.01.01.07 Investment devaluation 6.718 (3)
6.01.01.08 Provision for Unsecured Liabilities (110) 973
6.01.01.09 Provision for Disassembly 51 8
6.01.01.10 Minority Interests - -
6.01.01.11 Deferred income and social contribution liabilities, net - -
6.01.01.12 Current income and social contribution taxes - -
6.01.01.13 Debenture Interest/Cost 211 213
6.01.01.14 Fair value of debentures - 251
6.01.01.15 Interest on loans and related parties 144.062 56.463
6.01.01.16 Adjustment for exchange loss - -
6.01.01.17 Equity Appraisal - -
6.01.01.18 Other 15.062 -
6.01.02 Changes in Assets and Liabilities 99.431 48.493
6.01.02.01 Other Advances (782) (879)
6.01.02.02 Prepaid Expenses (42) 4.354
6.01.02.03 Accounts Receivable (50.308) (207.619)
6.01.02.04 Escrow Deposits - -
6.01.02.05 Recoverable Taxes (8.063) (23.491)
6.01.02.06 Inventory 31 11.876
6.01.02.09 Taxes, Duties and Contributions (8.427) 32.423
6.01.02.10 Trade payables 6.969 187.469
6.01.02.11 Provisions and payroll charges 1.496 1.502
6.01.02.12 Accounts Payable 8.365 1.470
6.01.02.13 CCC Subsidies Receivable (16.133) 7.509
6.01.02.14 Debts / Credits with related parties 169.539 34.484
6.01.02.15 AFAC to associated companies - -
6.01.02.16 Other Changes in investments - -
6.01.02.17 K > (3.213) (606)
6.01.02.18 Cash effect Spin-off CCX Carvo da Colmbia - -
6.01.02.19 Cash effect spin-off of E.On - -
6.01.03 Other - -
6.02 Net Cash from Investment Activities (175.427) (532.035)
6.02.01 Acquisition of PPE and intangible assets (77.658) (381.505)
6.02.02 Write-off of PPE and intangible assets - -
6.02.03 Securities - (2.159)
6.02.04 Capital contribution/AFAC in investments (28.529) (76.596)
6.02.05 Cash resulting from sale of property, plant and equipment and intangible assets 12 -
6.02.06 AFAC to associated companies - -
6.02.07 Debt to related parties (54.337) (22.841)
6.02.08 Dividends - -
6.02.09 Contractual Retentions (4.847) (45.608)
6.02.10 Escrow Deposits (10.067) (3.328)
6.03 Net Cash from Financing Activities (255.757) 470.453
6.03.01 Financial Instruments - (41)
6.03.02 Capital Increase - 241
6.03.03 Debt to related parties - -
6.03.07 Loans and Financing Obtained (255.720) 478.581
6.03.08 Capital decrease deriving from noncontrolling interests - (6.322)
6.03.09 Escrow Deposits - -
6.03.10 Issuance (payment) of debentures (37) (45)
6.03.11 AFAC to subsidiaries - -
6.03.12 Dividends - (1.960)
6.03.13 Adjustment spin-off CCX Carvo - Colombia - -
6.04 Exchange Variance on Cash and Cash Equivalents - -
6.05 Increase (Decrease) in Cash and Cash Equivalents (180.782) (160.156)
6.05.01 Opening Balance of Cash and Cash Equivalents 277.583 519.277
6.05.02 Closing Balance of Cash and Cash Equivalents 96.801 359.121
Eneva S.A.
Consolidated Statement of Changes in Equity
Period from 01/01/2014 to 03/31/2014
16
Paid-in share
capital
Capital
Reserves,
Options
Awarded and
Retained
Earnings or
Accumulated
Losses
Other
Comprehensive
Income
Shareholders
Equity
Minority
interests
Consolidated
Shareholders
Equity
5.01 Opening Balances 4.532.314 350.514 - (2.379.303) (53.284) 2.450.242 123.633 2.573.873
5.02 Prior-year Adjustments - - - - - - - -
5.03 Adjusted Opening Balances 4.532.314 350.514 - (2.379.303) (53.284) 2.450.242 123.633 2.573.873
5.04 Capital Transactions with Partners - 3.511 - 3.642 - 7.153 - 7.153
5.04.01 Capital Increases - - - - - - - -
5.04.02 Stock Issuance Expense - - - - - - - -
5.04.03 Awarded Options Recognized - 3.511 - - - 3.511 - 3.511
5.04.04 Treasury Stock Acquired - - - - - - - -
5.04.05 Treasury Stock Sold - - - - - - - -
5.04.06 Dividends - - - - - - - -
5.04.07 Interest in Shareholders Equity - - - - - - - -
5.04.09 Deferred Asset Adjustment - - - 3.642 - 3.642 - 3.642
5.05 Total Comprehensive Income - - - (71.931) 1.160 (70.771) 1.370 (69.401)
5.05.01 Net Income for the Period - - - - - - - -
5.05.02 Other Comprehensive Income - - - (71.931) 1.160 (70.771) 1.370 (69.401)
5.05.02.01 Financial Instrument Adjustments - - - - 1.160 1.160 - 1.160
5.05.02.02 Tax on Financial Instrument Adjustments - - - - - - - -
5.05.02.03 Equity Income on Comp. Income Associated companies - - - - - - - -
5.05.02.04 Translation Adjustments in the Period - - - - - - - -
5.05.02.05 Taxes on Translation Adjustments in the Period - - - - - - - -
5.05.02.07 Loss for the period - - - (71.931) - (71.931) 1.365 (70.565)
5.05.02.08 Minority interest - - - - - - 5 5
5.05.03 Reclassification to Net Income - - - - - - - -
5.05.03.01 Financial Instrument Adjustments - - - - - - - -
5.06 Internal Changes in Shareholders' Equity - - - - - - - -
5.06.01 Creation of Reserves - - - - - - - -
5.06.02 Realization of Revaluation Reserve - - - - - - - -
5.06.03 Taxes on Realization of Revaluation Reserve - - - - - - - -
5.07 Closing Balances 4.532.314 354.025 - (2.447.591) (52.124) 2.386.624 125.003 2.511.626
Eneva S.A.
Consolidated Statement of Changes in Equity
Period from 01/01/2013 to 03/31/2013
17
Paid-in share
capital
Capital
Reserves,
Options
Awarded and
Retained
Earnings or
Accumulated
Losses
Other
Comprehensive
Income
Shareholders
Equity
Minority
interests
Consolidated
Shareholders
Equity
Opening Balances 3.731.734 321.904 - (1.384.971) (119.067) 2.549.600 151.538 2.701.138
Prior-year Adjustments - - - - - - - -
Adjusted Opening Balances 3.731.734 321.904 - (1.384.971) (119.067) 2.549.600 151.538 2.701.138
Capital Transactions with Partners 241 5.714 - 372 - 6.327 (5.568) 759
Capital Increases 241 - - - - 241 (5.568) (5.327)
Stock Issuance Expense - - - - - - - -
Awarded Options Recognized - 5.714 - - - 5.714 - 5.714
Treasury Stock Acquired - - - - - - - -
Treasury Stock Sold - - - - - - - -
Dividends - - - - - - - -
Interest in Shareholders Equity - - - - - - - -
Deferred Asset Adjustment - - - 372 - 372 - 372
Total Comprehensive Income - - - (250.901) 2.105 (248.796) (754) (249.550)
Net Income for the Period - - - - - - - -
Other Comprehensive Income - - - (250.901) 2.105 (248.796) (754) (249.550)
Financial Instrument Adjustments - - - - 1.005 1.005 - 1.005
Tax on Financial Instrument Adjustments - - - - - - - -
Equity Income on Comp. Income Associated companies - - - - - - - -
Translation Adjustments in the Period - - - - 1.100 1.100 - 1.100
Taxes on Translation Adjustments in the Period - - - - - - - -
Loss for the Period - - - (250.901) - (250.901) (754) (251.655)
Reclassification to Net Income - - - - - - - -
Financial Instrument Adjustments - - - - - - - -
Internal Changes in Shareholders' Equity - - - - - - - -
Creation of Reserves - - - - - - - -
Realization of Revaluation Reserve - - - - - - - -
Taxes on Realization of Revaluation Reserve - - - - - - - -
Closing Balances 3.731.975 327.618 - (1.635.500) (116.962) 2.307.131 145.216 2.452.347
Eneva S.A.
Consolidated Statement of Value Added
18
Accrued Value
of the Current
Year 1/1/2014
to 3/31/2014
Accrued Value
of the Prior Year
1/1/2013 to
3/31/2013
7.01 Revenue 600.606 559.700
7.01.01 Sales of Goods, Products and Services 586.771 196.098
7.01.02 Other Revenue - -
7.01.03 Revenue relating to construction of company assets 13.835 363.602
7.01.04 Allowance/(Reversal of allowance) for doubtful accounts - -
7.02 Consumables acquired from third parties (348.025) (289.979)
7.02.01 Cost of goods and services sold - -
7.02.02 Material, Energy, Outsourced Services and Other (348.025) (289.979)
7.02.03 Loss/Recovery of Assets - -
7.02.04 Other - -
7.03 Gross Added Value 252.582 269.721
7.04 Retentions (48.711) (17.895)
7.04.01 Depreciation, Amortization and Depletion (48.711) (17.895)
7.04.02 Other - -
7.05 Net Added Value Produced 203.871 251.826
7.06 Transferred Added Value 37.039 (75.648)
7.06.03 Other 38.034 2.541
7.06.03.02 Provision for Unsecured Liabilities 110 (973)
7.06.03.04 Provision for devaluation of investments (6.718) 3
7.07 Total Added Value to be Distributed 240.910 176.178
7.08 Distribution of Added Value 240.910 176.178
7.08.01 Personnel 28.312 25.611
7.08.01.01 Direct Remuneration 15.230 17.977
7.08.01.02 Benefits 6.518 2.604
7.08.01.03 F.G.T.S. 6.564 5.030
7.08.01.04 Other - -
7.08.02 Taxes, Duties and Contributions 4.241 (60.614)
7.08.02.01 Federal 4.241 (60.614)
7.08.02.02 State - -
7.08.02.03 Municipal - -
7.08.03 Interest Expenses 278.922 468.242
7.08.03.01 Interest 211 167
7.08.03.02 Rent 99.981 17.117
7.08.03.03 Other 178.729 450.958
7.08.03.03.01 Losses on Derivative Transactions - 2.250
7.08.03.03.02 Advances to suppliers 13.835 363.688
7.08.03.03.03 Insurance 6.137 843
7.08.03.03.04 Exchange Variance (5.356) (1.625)
7.08.03.03.05 Studies and Projects - -
7.08.03.03.06 Financial Expenses 158.587 85.802
7.08.03.03.07 Other 5.526 -
7.08.04 Interest earnings (70.565) (257.061)
7.08.04.01 Interest on Shareholders Equity - -
7.08.04.02 Dividends - -
7.08.04.03 Retained Earnings/Loss for the Period (71.931) (250.901)
7.08.04.04 - Minority interests in retained earnings 1.365 (6.160)
7.08.05 Other - -
(A free translation of the original in Portuguese)
Eneva S.A.
(Publicly held company)
Notes to the quarterly information - ITR
at March 31, 2014
In thousands of reais, unless stated otherwise
19
1 Reporting entity
MPX Energia S.A. ("Company") was founded on April 25, 2001 and is headquartered in Rio de
Janeiro. The Extraordinary General Meeting held on September 11, 2013 approved the decision to
change the Company's name to Eneva S.A.
Its core activity is the generation of electricity through the development of a diversified portfolio of
sources, including mineral coal, natural gas and renewable sources. The Company has a diversified
portfolio of projects, including thermal power plants in Brazil, in addition to renewable energy
projects, such as solar and wind energy. In order to integrate its operations, the Company is also a
shareholder in a natural gas production and exploration project in Brazil, which supplies gas to
plants built by the company in Maranho.
The Company participates as a quotaholder or shareholder of the companies that implement these
projects and certain projects will be implemented in partnership with other parties in the energy
sector. These projects were primarily funded through funds obtained under the Company's public
share offering made on December 14, 2007 and January 11, 2008 (supplementary lot), amounting to
R$ 2,035,410, in addition to financing and the issuance of 21,735,744 convertible debentures on
June 15, 2011 amounting to R$ 1,376,527. On May 24, 2012, 21,653,300 debentures were converted
generating the issuance of 33,255,219 new shares, as a result of the corporate reorganization
implemented by the Company.
On March 28, 2013 the controlling shareholder of MPX Energia S.A., Mr. Eike Fuhrken Batista,
entered into an investment agreement with E.ON SE consisting of the following events:
(a) On May 29, 2013 E.ON acquired Company shares held by Eike Batista accounting for approximately
24.5% of the share capital.
(b) On the date the shares were acquired, E.ON and Eike Batista entered into a new shareholders'
agreement, which regulated the exercising of voting rights and restrictions on the transfer of shares
held by them.
(c) In August 2013 a private capital increase was concluded of approximately R$ 800 million, with a
subscription price fixed at R$ 6.45 per share.
(d) The shareholders will subsequently be asked to approve the acquisition by the Company at the equity
value of ENEVA Participaes S.A., a joint-venture between the Company and EON ("JV").
As shown in the table below, on March 31, 2014 the economic group ("Group" or "Company")
includes the Company and its equity interests in associated companies, direct and indirect
subsidiaries, joint ventures and the Multimercado MPX 63 investment fund. The companies that are
already in the opeational phase are (for further details about the subsidiaries see Note 12):
Parnaba I Gerao de Energia S.A.;
Porto do Pecm Gerao de Energia S.A.;
Pecm II Gerao de Energia S.A.;
Itaqui Gerao de Energia S.A.,;
Amapari Energia S.A.;
ENEVA Comercializadora de Energia Ltda.,
ENEVA Comercializadora de Combustveis Ltda.,
Eneva S.A.
at March 31, 2014
20
Tau Gerao de Energia Ltda;
Parnaba III Gerao de Energia S.A.; and
Parnaba IV Gerao de Energia S.A.
* Joint subsidiary.
** Associated company.
Eneva S.A.
as of March 31, 2014
21
Directly or by way of its subsidiaries, joint subsidiaries and associated companies, the Company has
been making the investment required to finalize the ventures in its portfolio and subsequently begin
the commercial operation of the respective enterprises.
The Company contracted short-term debt to finance its operations in 2012, 2013 and 2014. The
consolidated loans maturing in the next 12 months can be summarized as follows from March 31,
2013:
Up to 3 months: R$ 146 million.
Between 3 and 6 months: R$ 114 million.
Between 6 and 9 months: R$ 2,109 million.
Between 9 and 12 months: R$ 109 million.
The short-term debts were contracted to finance part of the investments made and to meet working
capital requirements. The Company is also working to partially settle and roll forward its short-term
debts to the long term and is mainly considering the following events in its business plan:
Long-term financing for Panaba II in 2014 of R$ 960 million.
Long-term financing for Panaba III and IV of R$ 270 million.
Possibility of re-leveraging the Pecm II Gerao de Energia and Itaqui Gerao de Energia S.A.,
ventures in operation via the issue of debentures of R$ 650 million.
Lengthening the short-term debt of the Parnaba Gerao de Energia venture in operation by a
total of R$ 125 million.
In addition to the re-leveraging of certain projects described above, the Company is analyzing
potential measures to bolster the capital structure and create the means necessary to permit a
substantial reduction in its leverage, see Note 29 subsequent events.
Eneva S.A.
22
2 Licenses and permits
ENEVA is committed to obtaining all the legal licenses and permits required for each of its facilities
and activities. The Company and its investees have the following environmental licenses and permits
at March 31, 2014:
Held by Ventures Licenses Expiry
ITAQUI GERAO DE ENERGIA S.A.
UTE PORTO DO ITAQUI LO 1,101/2012 10/26/2017
TRANSMISSION LINE LO 1061/2011 12/16/2017
PORTO DO PECM GERAO DE ENERGIA S.A.
UTE PORTO DO PECEM I LO 1,062/2012 12/28/2015
PECEM I TRANSMISSION LINE LO 889/2012 9/26/2015
PECM II GERAO DE ENERGIA S.A.
UTE PORTO DO PECM II LO 09/2013 2/8/2016
PECEM II TRANSMISSION LINE LO 108/2013 7/17/2016
AMAPARI ENERGIA S.A. UTE SERRA DO NAVIO (including TL) LO 172/2013 3/25/2016
TAU GERAO DE ENERGIA LTDA.
USINA SOLAR TAU 1MW - (including TL) LO 133/2012* 2/28/2014
USINA SOLAR TAU 4MW LI 15/2012* 3/5/2014
USINA SOLAR TAU (45MW) LP 253/2012 8/15/2015
PARNABA I GERAO DE ENERGIA S.A. MARANHO IV AND V LO 559/2012 12/20/2016
PARNABA II GERAO DE ENERGIA S.A. MARANHO III LI 274/2011* 12/27/2013
PARNABA I GERAO DE ENERGIA S.A. MARANHO IV AND V (cycle closure) LI 273/2011* 12/5/2013
ENEVA S.A. UTE PARNAIBA I LI 111/2012* 5/9/2013
ENEVA S.A. UTE PARNABA II LI 003/12* 11/11/2013
PARNABA IV GERAO DE ENERGIA S.A. PARNABA IV LO 415/2013 11/25/2017
ENEVA S.A MC2 NOVA VENECIA 2 LO 1001972/2014 9/23/2017
UTE PORTO DO AU ENERGIA S.A.
- - -
UTE PORTO DO AU II LP IN 025871 12/30/2015
TRANSMISSION LINE LI IN 019365 4/24/2015
AU III GERAO DE ENERGIA LTDA.
ELICA MARAVILHA LI IN 000208* 5/22/2012
ELICA MUNDUS LI IN 000207* 5/22/2012
ENEVA S.A. UTE SUL LP 332/2009* 12/22/2012
SUL GERAO DE ENERGIA LTDA. BARRAGEM SUL LP 601/2010* 5/21/2012
SEIVAL GERAO DE ENERGIA LTDA. UTE SEIVAL LI 589/2009* 2/17/2014
SEIVAL SUL MINERAO LTDA. SEIVAL MINE LO No. 9221/2009* 10/20/2013
CENTRAL ELICA MORADA NOVA LTDA. CGE MORADA NOVA LP 0010/2012
8/10/2014
CENTRAL ELICA SO FRANCISCO LTDA. CGE SO FRANCISCO LP 0083/2012
CENTRAL ELICA MILAGRES LTDA. CGE MILAGRES LP 0084/2012
CENTRAL ELICA SANTA LUZIA LTDA. CGE SANTA LUZIA LP 0085/2012
CENTRAL ELICA PEDRA VERMELHA I LTDA. CGE PEDRA VERMELHA I LP 0090/2012
CENTRAL ELICA ASA BRANCA LTDA. CGE ASA BRANCA LP 0091/2012
CENTRAL ELICA SANTO EXPEDITO LTDA. CGE SANTO EXPEDITO LP 0092/2012
CENTRAL ELICA PEDRA VERMELHA II LTDA. CGE PEDRA VERMELHA II LP 0093/2012
CENTRAL ELICA PAU DARCO LTDA CGE PAU DARCO LP 0184/2013 4/26/2015
CENTRAL ELICA PEDRA ROSADA LTDA CGE PEDRA ROSADA LP 0187/2013 5/2/2015
CENTRAL ELICA PAU BRANCO LTDA CGE PAU BRANCO LP 0189/2013 5/10/2015
CENTRAL ELICA ALGAROBA LTDA CGE ALGAROBA LP 0186/2013 5/6/2015
CENTRAL ELICA UBAEIRA I LTDA CGE UBAEIRA I LP 0188/2013 5/10/2015
CENTRAL ELICA UBAEIRA II LTDA CGE UBAEIRA II LP 0185/2013 5/6/2015
CENTRAL ELICA SANTA BENVINDA I LTDA CGE SANTA BENVINDA I LP 0183/2013 5/23/2015
CENTRAL ELICA SANTA BENVINDA II LTDA CGE SANTA BENVINDA II LP 0191/2013 5/10/2015
CENTRAL ELICA BOA VISTA I LTDA CGE BOA VISTA I LP 0268/2013 6/18/2015
CENTRAL ELICA BOA VISTA II LTDA CGE BOA VISTA II LP 0270/2013 6/18/2015
CENTRAL ELICA BONSUCESSO LTDA CGE BONSUCESSO LP 0271/2013 6/18/2015
CENTRAL ELICA PEDRA BRANCA LTDA CGE PEDRA BRANCA LP 0269/2013 6/18/2015
(*) The renewal of environmental licenses was applied for at least 120 (one hundred and twenty)
days before the validity expired, as fixed in the respective license, and is extended automatically
until the respective environmental authority states its final position. (Supplementary Law
140/2011 Art. 14 (4).
Eneva S.A.
23
3 Presentation of the financial statements
The financial statements have been prepared based on the historic cost basis, adjusted to realization
value when applicable, except for financial instruments held at fair value, including derivative
instruments. The interim financial statements have been prepared in accordance with the accounting
policies, principles, methods and consistent criteria in relation to those used to prepare the audited
financial statements for the financial year ended December 31, 2013 and should therefore be read in
conjunction with them.
The preparation of financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise its judgment in the process of applying the accounting policies.
The areas involving a higher degree of judgment or complexity, or areas where assumptions and
estimates are significant to the financial statements are disclosed in Note 5.
(a) Consolidated interimfinancial information
The consolidated interim financial information has been prepared and has been presented in
accordance with the pronouncement issued by the Accounting Pronouncements Committee (CPC 21
- R1), interim statements, equal to International Financial Reporting Standards (IAS 34).
The presentation of the individual and consolidated Statement of Value Added (DVA) is required by
Brazilian corporate legislation and the accounting practices adopted in Brazil that apply to listed
companies.
(b) Individual interim financial information
The Parent company's individual interim financial statements have been prepared in accordance
with CPC 21 (R1) - Interim Statements issued by the Accounting Pronouncements Committee
("CPC") and are being published in conjunction with the consolidated financial statements.
In the individual interim financial statements subsidiaries are accounted for by the equity method
adjusted to the proportion held in the Group's contractual rights and obligations. The accounting
practices adopted in Brazil applicable to the individual financial information differ from IFRS
applicable to the separate financial statements only in relation to the measurement of investments in
subsidiaries, joint ventures and associated companies based on the equity accounting method, while
this is based on cost or fair value under IFRS.
For the purpose of BR GAAP, Law 11941/09 abolished deferred assets, permitting the maintenance
of the balance accumulated up to December 31, 2008, which may be amortized in up to 10 years,
subject to impairment tests. Following the adoption of IFRS, the Company recorded the amount of
R$ 26,192 in the consolidated accumulated losses, net of tax as of January 1, 2009, corresponding to
its and its subsidiaries' deferred charges at that date. The difference between the individual and
consolidated shareholders' equity is therefore related to the deferred asset which was recognized in
accumulated losses in the consolidated shareholders' equity.
Eneva S.A.
24
The table below shows the reconciliation between the individual and consolidated shareholders'
equities at March 31, 2014:
2014
Shareholders' equity - Parent Company 2,401,485
Deferred charges - Law 11941/09 (14,861 )
Shareholders' equity - Attributable to controlling shareholders 2,386,624
The Board of Directors authorized the issuance of these financial statements on May 12, 2014.
4 Significant accounting policies
The accounting policies applied to prepare this interim account information are the same as those
used to prepare the audited financial statements for the financial year ended December 31, 2013.
5 Critical Accounting Estimates and Judgments
Estimates and judgments are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the
circumstances. The critical estimates and judgments used in the accounting information are the
same as those used in the audited financial statements for the year ended December 31, 2013.
6 Cash and cash equivalents
Parent company Consolidated
March 31,
2014
December
31, 2013
March 31,
2014
December
31, 2013
Cash and bank deposits 312 396 57,270 16,493
Fundo de Investimento MM MPX 63 (a) 19,382 109,647 30,692 202,444
CDB/Purchase and Sale Agreements (b) 113 8,838 58,645
19,694 110,156 96,800 277,582
(a) Substantially consist of quotas in investment funds, of high liquidity, readily convertible into a
known amount of cash, regardless of asset maturity, and are subject to an insignificant risk of a
change in value. This is a share investment fund FI Multimercado Crdito Privado MPX 63
administrated by Banco Ita and primarily backed by Bank Deposit Certificates - CDBs and
securities subject to repurchase agreements issued by first-rate financial institutions and
companies, all linked to floating rates and with an average yield of 100.91% (nominal rate on the
curve) of the DI CETIP rate (Interbank Deposit Certificate - CDI). Securities held under
repurchase agreements underlied by debentures represent purchase and sale commitments,
registered at CETIP or SELIC, when applicable, and with guarantee of repurchase at a
previously established rate from the financial institutions. A 100% of the portfolio consists of
securities held under repurchase agreements at March 31, 2014.
Eneva S.A.
25
As required by CVM Instruction 408/05, the consolidated quarterly information includes the
balances and transactions of the exclusive investment funds, whose only shareholders are the
Company and its subsidiaries, as shown below:
March 31,
2014
December
31, 2013
March 31,
2014
December
31, 2013
Consolidated Multi-Market Fund
Eneva S.A. 19,382 109,647 19,382 109,647
Amapari Energia S.A. 4,247 9,349
Seival Sul Minerao Ltda. 252 406
Parnaba Gerao de Energia S.A. 808 27,905
Parnaba II Gerao de Energia S.A. 6,003 55,137
19,382 109,647 30,692 202,444
(b) Amounts invested in CDBs issued by first-rate financial institutions. The companies that hold
these amounts are the subsidiaries Pecm II Gerao de Energia S.A. and Itaqui Gerao de
Energia S.A.
The exclusive funds are regularly reviewed/audited by independent auditors and are subject to
constraints on the payment of services rendered by the asset manager, attributed to operating
investments, such as custody and audits fees and other expenses. There are no material
financial obligations or Company assets to guarantee these obligations.
7 Secured deposits
March 31,
2014
December
31, 2013
March 31,
2014
December
31, 2013
BNDES - Porto do Pecm 39 38 39 38
BNDES - Itaqui (a) 66,717 64,629
BNDES - Pecm II (b) 20,092 19,682
BNDES - Parnaba (c) 41,864 34,044
Others 69
39 38 128,712 118,644
Current 39 38 39 38
Non-current 128,674 118,606
(a) Refers to the debt service reserve accounts linked to the financing agreement between the
subsidiary Itaqui Gerao de Energia S.A , BNB-Banco do Nordeste do Brasil S.A. and BNDES.
(b) Refers to the debt service reserve accounts linked to the financing agreement between BNDES,
BNB-Banco do Nordeste do Brasil S.A. and the subsidiary Pecem II Gerao de Energia S.A.
(c) Refers to the debt service reserve accounts linked to the financing agreement between BNDES
and the subsidiary Parnaba Gerao de Energia S.A.
Eneva S.A.
26
8 Accounts receivable and fuel consumption account
Consolidated
2014 2013
Amapari Energia S.A. (a) 54,419 40,273
Itaqui Gerao de Energia S.A. (b) 81,051 85,026
Parnaba Gerao de Energia S.A. (b) 153,437 110,113
Parnaba II Gerao de Energia S.A. (b) 8,497 -
Pecm II Gerao de Energia S.A. (b) 94,235 89,786
391,639 325,198
Current 391,639 325,198
Non-current
(a) The accounts receivable is for energy sold to Zamim Ferrous of R$ 7,482 (R$ 9,472 at December
31, 2013) and the balance receivable of the subsidiary is R$ 46,935 (R$ 30,802 at December 31,
2013), as described below.
At March 31, 2014 the balance receivable of the subsidiary is R$ 46,935 (R$ 30,802 at
December 31, 2013). This amount reflects the 7-month subsidy due to the delay to pass through
the subsidy to the Company. At December 31, 2013 subsidies for 4 months had been recorded.
The Company's non-current assets include the CCC reimbursement not received for the period
November 2008 to May 2009 of R$ 24,617 thousand. If this amount is not received, the
Company is entitled to charge Anglo Ferrous Amap Ltda. for it. This is because, under the
energy supply agreement between the parties, in the event of an economic/financial unbalance
for reasons not attributable to the Company, the parties shall adjust the contractual terms to
restore the economic and financial equilibrium. However, to date collection procedures against
Anglo Ferrous Amap Ltda. have not commenced, as the Company initially decided to adopt
judicial measures before ANEEL in an attempt to obtain this reimbursement via the CCC
mechanism. At March 31, 2014 the amount had been completely provided for.
(b) The balance denotes the accounts receivable of the subsidiaries Itaqui Gerao de Energia S.A
under the electricity purchase contract in a regulated environment (CCEAR), signed with
ANEEL, of R$ 81,051 (R$ 85,026 at December 31, 2013) and the companies that came into
operation in 2013 Parnaba Gerao de Energia S.A. of R$ 153,437 (R$ 110,113 at December 31,
2013) and Pecm II Gerao de Energia S.A. of R$ 94,235 (R$ 89,786 at December 31, 2013),
also under the CCEAR with ANEEL. The subsidiary Parnaba II Gerao de Energia R$ 8,497
referring to the sale of energy in the free market.
Eneva S.A.
27
9 Inventories
Consolidated
March 31,
2014
December
31, 2013
Diesel oil/lubricant (a) 6,426 12,685
Coal (b) 48,769 49,070
Electronic and mechanical parts (c) 23,150 16,621
78,345 78,376
(a) The balance consists of the reservoirs of diesel oil and lubricating oil used as consumables in
electricity generation by the subsidiaries Amapari Energia S.A.(R$ 4,804), Pecm II Gerao de
Energia S.A. (R$ 1,055) and Itaqui Gerao de Energia S.A. (R$ 567). The subsidiary Amapari
Energia S.A. has a contractual acquisition obligation ("take or pay") with BR Distribuidora S.A.,
to acquire a minimum 3,600 m of diesel oil a month, for a fixed price or to pay for this even if
it is not taken. If the obligation is exercised, this results in the acquisition of the diesel oil used
as a consumable by the Company. The Company recorded a provision under trade payables for
the difference between the amount required and the minimum mandatory amount under the
contract, charged to inventory. At March 31, 2014 the balance of this provision is R$ 3,615
(R$ 8,481 at December 31, 2013), as under the agreement between the parties the recognized
consumption of diesel changed to 35,000 m, down from the remaining take or pay of 61,000
m under the previous contract.
(b) The balance consists of the inventory of coal used as a consumable in electricity generation by
the subsidiaries Itaqui Gerao de Energia S.A. (R$ 19,359) and Pecm II Gerao de Energia
S.A. (R$ 29,410). The coal was acquired for the commissioning phase of the operation, and to
establish a safety inventory at the plant, with a view to the commercial operations. Note that
Porto do Itaqui initiated its commercial operations, consuming coal inventories.
(c) The balance consists of electronic and mechanical parts for use and replacement in the
maintenance operations carried out by the subsidiaries: Amapari Energia S.A. (R$ 3,119), Itaqui
Gerao de Energia S.A. (R$ 8,736), Pecm II Gerao de Energia S.A. (R$ 3,774), Parnaba
Gerao de Energia S.A. (R$ 7,072) and Parnaba II Gerao de Energia S.A. (R$ 449).
Eneva S.A.
28
10 Recoverable and deferred taxes
The balance of recoverable taxes is as follows:
March 31,
2014
December
31, 2013
March 31,
2014
December
31, 2013
Income tax withheld at source (b) 3,894 3,533 12,648 12,161
Prepaid income tax 4,319 3,687
Prepaid social contributions 3,065 2,857
Prepaid social contributions -
previous year (a) 462 462 464 464
Income tax withheld at source -
previous year (b) 12,537 13,948 13,696 14,539
Income tax withheld at source -
loan (b) 17,486 13,728 17,485 13,727
ICMS 10 6,687 1,994
PIS 1,486 1,727
COFINS 1 1 6,846 7,956
Others 1,101 1,244 3,632 3,153
35,491 32,916 70,328 62,265
Current 28,248 25,701 55,950 47,651
Non-current 7,243 7,215 14,378 14,614
(a) Refers to income and social contribution taxes prepaid in the course of the year and previous
years, which will be offset against the income and social contribution taxes determined on the
taxable income.
(b) The balance of income tax withheld at source refers to amounts withheld on interest-earning
bank deposits and related-party loans. These balances will be offset against the income and
social contribution taxes payable.
Deferred taxes
Deferred income and social contribution taxes reflect future tax effects attributable to temporary
differences between the tax bases of assets and liabilities and their carrying values.
The deferred tax was maintained at the subsidiaries due to the expectations of generating future
taxable income, determined by a technical valuation approved by Management. The carrying value of
the deferred tax asset is reviewed periodically and the projections are reviewed annually. If there are
significant factors that change the projections, they are also reviewed by the Company during the
year.
Eneva S.A.
29
The Company and its subsidiaries adopted the Transitional Taxation Scheme (RTT) so that the
amendments introduced by Law 11638 of December 28, 2007 and Articles 37 and 38 of Law 11941 of
2009, which changed the procedure for recognizing revenue, costs and expenses used to calculate
the net income for the year defined in Art. 191 of Law 6404 of December 15, 1976, do not affect the
calculation of the taxable income and social contribution calculation base of companies that opt for
the Transitional Taxation Scheme - RTT. For tax purposes the accounting methods and criteria in
force at December 31, 2007 should be used.
The Company and its subsidiaries will not elect the option provided in MP 627, and we believe it will
not make any fiscal amendment to be adjusted in the financial statements.
The origin of the deferred income and social contribution taxes is presented below:
March 31,
2014
December
31, 2013
March 31,
2014
December
31, 2013
Non-current deferred charges
Tax loss carryforwards and negative tax base 304,077 302,327
304,077 302,327
Non-current deferred liabilities
Temporary differences - RTT 12,444 9,591
Breakdown of deferred tax by company:
March 31,
2014
December 31,
2013
Parent Company
Pecm II 86,065 85,708
Itaqui 192,127 192,127
Amapari 1,195 1,783
Parnaba 14,813 14,006
Parnaba II 9,876 8,703
Tax loss carryforwards and negative tax base 304,077 302,327
Eneva S.A.
30
At March 31, 2014 and 2013 the taxes calculated on the adjusted net income consisted of IRPJ (rate
of 15% and surcharge of 10%) and CSLL (rate of 9%). The reconciliation between the tax expense as
calculated by the combined statutory rates and the income and social contribution tax expense
charged to net income is presented below:
(*) Refers essentially to (i) the portion of deferred taxes of subsidiaries which was not recorded, as
there is no study demonstrating the realization thereof.
(**) Primarily consists of the transaction differences between companies of the same group. These
transactions are eliminated for consolidation purposes.
2013
Parent
Company Consolidated
Net income for the period before IRPJ/CSLL (250,901 ) (317,868)
Statutory rate - % 34 34
IRPJ/CSLL at the nominal rate (85,306) (108,075)
Tax asset not recorded (*) 85,306 47,147
Permanent differences (***) 121
Income tax and social contribution expense, current
Deferred income and social contribution taxes 60,807
Total tax 60,807
Effective rate - % (13.82) (19.13)
(***) Essentially consists of non-deductible fines for taxable income purposes.
2014
Parent
Company Consolidated
Net income for the period before IRPJ/CSLL (71,931 ) (66,728)
Statutory rate - % 34 34
IRPJ/CSLL at the nominal rate (24,456) (22,688)
Consolidated differences (**) 15,032
Tax asset not recorded (*) 24,456 11,493
Provision for impairment of tax credit (a)
Income tax and social contribution expense, current 2,733
Deferred income and social contribution taxes 1,104
Total tax 3,837
Effective rate - % (5.75)
Eneva S.A.
31
Based on the estimated generation of future taxable earnings, by way of its subsidiaries the Company
expects to recover these tax credits from FY 2015 onwards, as shown below:
2015 2016 2017 2018 2019 2020 2021 2022 2023 Total
Expected annual
realization
of deferred
taxes 20,355 23,326 24,236 22,527 38,407 57,034 43,057 55,220 7,469 291,631
The expected recoverability of the tax credits is based on the projection of future taxable income
taking into consideration business and financial assumptions at year end. Accordingly, these
estimates may differ from the effective taxable income in the future due to the inherent uncertainties
involving these estimates.
11 Investments
(a) Composition of balances
March 31,
2014
December
31, 2013
March 31,
2014
December
31, 2013
Equity interests 3,258,301 3,130,881 957,236 941,758
Other investments 95 95 95 95
3,258,396 3,130,977 957,331 941,853
(b) Equity interests
The Company's equity interests include the subsidiaries, joint ventures and associates. The balances
of the main account groups of equity interests at December 31, 2013 and December 31, 2012 are:
March 31 ,2014
Equity interests
Equity
interest in
%
Current
assets
Non-
current
assets
Current
liabilities
Non-current
liabilities
Shareholders'
equity Net income
Porto do Pecm Gerao de Energia S.A. 50.00 150,777 1,957,158 301,235 1,240,323 566,378 (15,022 )
Pecm II Gerao de Energia S.A. 100.00 151,812 2,028,991 210,936 1,339,437 630,430 (705 )
Itaqui Gerao de Energia S.A. 100.00 139,623 2,931,806 291,631 1,688,687 1,091,111 (28,492 )
Amapari Energia S.A. 51.00 69,527 66,705 37,274 337 98,621 (1,028 )
Porto do A Gerao de Energia S.A. 50.00 3,724 25,660 3,033 2,049 24,301 (399 )
Seival Sul Minerao Ltda. 70.00 308 4,848 10 5,146 (166 )
Sul Gerao de Energia Ltda. 50.00 17 6,967 10 415 6,559 (24 )
Termopantanal Participaes Ltda. 66.67 9 400 (4) 2,726 (2,313 ) (0)
Parnaba Gerao de Energia Ltda. 70.00 204,652 1,247,147 275,187 764,520 412,092 6,397
Porto do Pecm Transportadora de
Minrios S.A. 50.00 1,050 28 310 768 319
OGMP Transporte Arieo Ltda. 50.00 188 63 251 2
PO&M - Pecm Operao e Manuteno
de Gerao Eltrica S.A. 50.00 1,502 365 1,186 (49 ) (256 )
Seival Participaes S.A. 50.00 13 31,018 1 11,311 19,720 74
Parnaba II Gerao de Energia S.A. 100.00 23,900 1,212,929 611,082 299,869 325,877 (2,285 )
ENEVA Participaes S.A. 50.00 50,726 175,087 69,198 30,062 126,553 (2,273 )
A II Gerao de Energia S.A. 50.00 129 2,396 6 188 2,330 (1 )
Parnaba Participaes S.A. 50.00 63,735 273,762 85,665 105,649 146,183 4,186
Parnaba V Gerao de Energia S.A 99.99 1 1
ENEVA Investimentos S.A. 99.99 2 11 (9 )
ENEVA Desenvolvimento S.A. 99.99 7 303 10 495 (194 ) (5 )
Tau II Gerao Energia Ltda. 100.00 6 477 (87 ) 44 526 (69 )
MABE Construo e Administrao de
Projetos Ltda. 50.00 28,756 23,119 40,057 11,789 29 (6,392 )
Eneva S.A.
32
December 31, 2013
Equity in
the capital Current
Non-
current Current
Non-
current Equity Net
Equity interests in % assets assets Liabilities liabilities net income
Porto do Pecm Gerao de Energia S.A. 50.00% 290,867 3,906,638 548,838 2,487,934 1,160,732 (282,342 )
Pecm II Gerao de Energia S.A. 100.00% 170,228 2,029,084 221,660 1,346,518 631,134 (46,331 )
Itaqui Gerao de Energia S.A. 100.00% 153,100 2,924,724 285,496 1,724,724 1,067,603 (250,736 )
Amapari Energia S.A. 51.00% 62,105 69,205 31,608 52 99,649 (3,619 )
Porto do A Gerao de Energia S.A. 50.00% 7,341 51,248 6,064 3,124 49,402 (4,296 )
Seival Sul Minerao Ltda. 70.00% 477 4,840 22 5,295 (792 )
Sul Gerao de Energia Ltda. 50.00% 29 13,947 8 832 13,136 (521 )
Termopantanal Participaes Ltda. 66.67% 9 400 (4 ) 2,726 (2,313 ) (2 )
Parnaba Gerao de Energia Ltda. 70.00% 158,288 1,264,731 265,826 768,997 388,195 152
Minrios S.A. 50.00% 1,274 98 474 899 222
OGMP Transporte Arieo Ltda. 50.00% 368 130 498 410
PO&M - Pecm Operao e Manuteno
de Gerao Eltrica S.A. 50.00% 3,263 491 2,357 415 (324 )
Seival Participaes S.A. 50.00% 30 61,695 6 22,469 39,251 (624 )
Parnaba II Gerao de Energia S.A. 100.00% 62,301 1,163,940 594,757 303,322 328,163 (16,806 )
Eneva Participaes S.A. 50.00% 116,364 388,463 203,084 44,480 257,263 (26,952 )
Porto do A II Gerao de Energia S.A. 50.00% 259 4,782 12 367 4,662 (4 )
Parnaba Participaes S.A. 50.00% 200,833 399,256 233,955 85,464 206,788 14,076
Parnaba V Gerao de Energia S.A 99.99% 9 1 108 (100 ) (111 )
Parnaba Gas Natural S.A. 33.33% 258,196 1,100,395 1,134,315 68,572 155,704 12,640
MPX Investimentos S.A. 99.99% 2 11 (9 ) (12 )
MPX Desenvolvimento S.A. 99.99% 8 303 10 490 (189 ) (201 )
MPX Tau II Energia Solar Ltda. 100.00% 64 69 (506 ) 44 596 (230)
MABE Construo e Administrao de
Projetos Ltda. 50.00% 55,866 48,871 69,331 35,378 28 (94,169 )
The balance of investments breaks down as follows:
Equity interests
March 31,
2014
December 31,
2013
March 31,
2014
December 31,
2013
Porto do Pecm Gerao de Energia S.A. 566,377 580,367 566,251 580,240
Pecm II Gerao de Energia S.A. 630,430 631,135
Itaqui Gerao de Energia S.A. 1,091,111 979,904
Goodwill based on future profits 14,875 15,001
Amapari Energia S.A. 50,297 50,821
Porto do Au Energia S.A. 24,301 24,701 16,987 17,386
Seival Sul Minerao Ltda. 3,603 3,707
Sul Gerao Energia Ltda. 6,545 6,569 6,225 6,249
Porto do Pecm Transportadora de Minrios S.A. 768 449 768 449
Parnaba Gs Natural S.A. (d). 79,761 51,899 79,761 51,899
Parnaba Gerao de Energia Ltda.(b) 177,115 172,637
OGMP Transporte Areo Ltda. (c) 102 277 102 277
Pecm Operao e Manuteno de Unidades
de Gerao Eltrica S.A. - PO&M (49) 207 (49) 207
Seival Participaes S.A. 19,699 19,625 19,699 19,625
Parnaba II Gerao de Energia S.A. 325,877 328,162
ENEVA Participaes S.A. 95,553 97,685 95,553 97,685
A II Gerao de Energia S.A. 2,331 2,331 2,331 2,331
Parnaba V Gerao de Energia S.A
Parnaba Gerao e Comercializao de Energia S.A.
Parnaba Participaes S.A. 107,579 103,393 107,579 103,393
ENEVA Investimentos S.A.
Subscription premium 62,000 62,000 62,000 62,000
MABE do Brasil 28 14 28 14
Future acquisition of investment 95 95 95 95
3,258,396 3,130,976 957,331 941,852
(a) At March 31, 2014 the balance of the investment with the joint ventures and the subsidiaries
MPX Chile Holding Ltda., ENEVA Desenvolvimento S.A. and Termopantanal Participaes
Ltda. was classified under unsecured liabilities in the non-current liabilities, due to the fact that
these companies had negative equity.
Eneva S.A.
33
(b) On August 14, 2013 the Extraordinary General Meeting approved the split-off of Parnaba
Gerao de Energia S.A. with the net assets being transferred to Parnaba III Gerao de
Energia S.A.. The split-off is a necessary step in the implementation of the venture and
commercial start-up of Parnaba III, via the transfer of the 5th generator turbine, with a total
capacity of 176.2 MW.
(c) The shareholders Eneva Energia S.A. and OGX Petrleo e Gs Participaes S.A. approved the
capital decrease of the joint subsidiary OGMP Transporte Areo Ltda. on August 8, 2013.
(d) On October 30, 2013 the EGM approved the change of the associated company's name from
OGX Maranho Petrleo e Gs S.A. to Parnaba Gs Natural S.A. A capital increase of R$ 250
million was concluded on February 19, 2014 at its associate Parnaba Gs Natural S.A. The
increase was fully subscribed and paid in by Cambuhy and E.ON, as announced in the press
release in October 2013. As a result of the capital increase, the interest held by ENEVA S.A.
dropped from 33.33% to 18.18%.
See below the breakdown of the minority interest in the equity and net income of investees.
The balance of investments is as follows:
Attributed to minority interests
Investments Equity
Shareholders'
equity Net income
Equity
net Result
Amapari Energia S.A. 51% 98,621 (1,028) 48,324 503
Parnaba I Gero de
Energia 70% 412,092 6,397 75,906 (1,919)
Termopantanal
Participaes 67% (2,313) (771)
Seival Sul Minerao 70% 5,146 165 1,543 49
125,002 (1,367)
Eneva S.A.
at March 31, 2014
34
(c) Change in investment
March 31 ,2014
Direct subsidiaries %
Balance at
December
31, 2013
Capital
subscription
Equity
income
Gain on
increase in
interest
Capital
reduction
Exchange
variance
Equity
appraisal
adjustment
Adjustment
in equity
interest Amortization
Balance at
March
31, 2014
Porto do Pecm Gerao de Energia S.A. 50.00 580,366 (15,148 ) 1,159 566,377
Pecm II Gerao de Energia S.A. 100.00 631,135 (705 ) 630,430
Itaqui Gerao de Energia S.A. 100.00 979,903 139,700 (28,492 ) 1,091,111
Goodwill based on future profits 15,001 (126 ) 14,875
Amapari Energia S.A. 51.00 50,821 (524 ) 50,297
Porto do Au Energia S.A. 50.00 24,701 (399 ) 24,301
Seival Sul Minerao Ltda. 70.00 3,707 12 (116 ) 3,603
Sul Gerao de Energia Ltda. 50.00 6,569 (24 ) 6,545
Minrios S.A. 50.00 449 319 768
Parnaba Gs Natural S.A. 33.30 51,899 6,003 21,858** 79,761
Parnaba Gerao de Energia S.A. 70.00 172,637 4,478 177,115
OGMP Transporte Aereo 50.00 277 2 (178 ) 102
Pecm Operao e Manuteno de
Unidades de Gerao
Eltrica S.A. - PO&M 50.00 207 (256 ) (49 )
Seival Participaes S.A. 99.90 19,625 74 19,699
Au II Gerao de Energia S.A. 50.00 2,331 (1 ) 2,331
ENEVA Participaes S.A. 50.00 97,685 (753 ) 96,932
Subscription Premium 62,000 62,000
Parnaba Participaes S.A. 50.00 103,393 4,186 107,579
Parnaba V Gerao de Energia S.A. 99.99 -
MABE do Brasil 50.00 14 14 28
ENEVA Investimentos S.A. 99.99 -
Parnaba II Gerao de Energia S.A. 100.00 328,162 (2,285 ) 325,877
Future acquisition of investment 95 95
3,130,977 139,712 (40,558 ) (178 ) 1,159 21,858 (126 ) 3,258,396
Parent company
2013
Balance at
December Paid in
Gain on
increase of Capital Exchange
Equity
appraisal
Balance at
December
Investment % 31, 2012 capital Equity income interest decresa variace adjustment Spin-off Amortization 31, 2013
Porto do Pecm Gerao de Energia S.A. 50.00 611,561 98,600 (141,171 ) 11,379 580,366
Pecm II Gerao de Energia S.A. 100.00 449,104 227,400 (46,331 ) 961 631,134
Itaqui Gerao de Energia S.A. 100.00 551,549 694,560 (250,736 ) (469 ) 994,904
Amapari Energia S.A. 51.00 52,872 (2,051 ) 50,821
Porto do Au Energia S.A. 50.00 27,251 4,850 (7,400 ) 24,701
Seival Sul Minerao Ltda. 70.00 3,511 750 (554 ) 3,707
Sul Gerao de Energia Ltda. 50.00 6,599 230 (261 ) 6,568
Porto do Pecm Transportadora de Minrios S.A. 50.00 338 - 111 449
Parnaba Gs Natural S.A. 33.30 31,861 15,825 4,213 51,899
Parnaba Gerao de Energia S.A.* 70.00 231,101 33,600 106 (92,170 ) 172,637
OGMP Transporte Aereo 50.00 6,823 250 205 (7,000 ) 278
Pecm Operao e Manuteno de Unidades de Gerao S.A.
Gerao Eltrica S.A. - PO&M 50.00 367 (162 ) 207
Seival Participaes S.A. 99.90 19,365 573 (312 ) 19,626
Au II Energia S.A. 50.00 2,133 200 (2 ) 2,331
ENEVA Participaes S.A. 50.00 128,406 (15,074 ) 267 46,085 159,685
Parnaba Participaes S.A. 50.00 6,917 43,355 7,036 46,085 103,393
Parnaba V Gerao de Energia S.A. 99.99 1 (1)
MABE do Brasil 50.00 14 14
Eneva Tau II Energia Solar Ltda.
100.00
% 1 (1)
Eneva
ENEVA Investimentos S.A. 99.99
Parnaba II Gerao de Energia S.A. 100.00 85,254 259,715 (16,806 ) 328,163
Future acquisition of investment 95 95
2,215,107 1,379,922 (469,189 ) 961 (7,000 ) 267 11,379 (469 ) 3,130,978
(*) Denotes the effect of transferring the turbine from Parnaba I to Parnaba III.
(**) The effect denotes the reduction in the percentage interest in the capital of its associate
Parnaba Gs Natural S.A.
Eneva S.A.
35
12 Property, plant and equipment
Consolidated
Property, plant and equipment in service
Land
Buildings,
civil works
and
improvements
Machinery
and
equipment
IT
Equipment Vehicles
Furniture
and
fixtures
Cost of
disassembly
PP&E
in
progress Total
Depreciation rate % p.a. 4 7 17 20 10
Cost
Balance at December 31, 2013 7,844 3,159,154 2,599,073 5,103 1,757 8,434 2,079 1,194,260 6,977,705
Additions 1,374 188 108 279 60.187 62,136
Write-offs (17 ) (17 )
Transfers 19,822 (13,397 ) (6.453 ) (28 )
Balance at March 31, 2014 7,844 3,178,976 2,587,049 5,292 1,865 8,713 2,079 1,247,978 7,039,796
Depreciation
Balance at December 31, 2013 (68,448 ) (85,201 ) (1,711 ) (649 ) (2,244 ) (158,253
Balance at December 31, 2013 (68,448 ) (85,201 ) (1,711 ) (649 ) (2,244 ) (158,253
Additions (21,900 ) (22,677 ) (22 ) (93 ) (207 ) (44,900
Write-offs
Transfers
Balance at March 31, 2014 (90,348 ) (107,879 ) (1,734 ) (742 ) (2,451 ) (203,153
Carrying amount
Balance at March 31, 2014 7,844 3,088,628 2,479,171 3,558 1,123 6,262 2,079 1,247,978 6,836,643
2013
Land
Buildings,
civil works
and
improvements
Machinery
and
equipment
Equipment
IT Vehicles
Furniture
and
fixtures
Gas
pipeline
Provision
for
impairment
loss
Dismantling
cost
Property,
plant and
equipment
in progress Spin-off Total
Depreciation rate % p.a. 4 7 17 20 10
Cost
Balance at December 31, 2012 3,113 18,471 75,162 4,586 1,294 6,269 12,169 (12,169 ) 3,993 5,478,044 5,590,931
48,264
Balance at December 31, 2012 3,113 18,471 75,162 4,586 1,294 6,269 12,169 (12,169 ) 3,993 5,478,044 5,590,931
Additions 40,522 33,767 485 584 1,865 (39 ) 1,441,983 (124,118 ) 1,395,050
Write-offs (7,742 ) (1,241 ) (3 ) (120 ) (54 ) (9,160 )
Transfers 4,732 3,107,904 2,491,383 35 354 (5,603,522 ) 885
Balance at December 31, 2013 7,845 3,159,154 2,599,071 5,104 1,757 8,434 12,169 (12,169 ) 3,954 1,316,505 (124,118 ) 6,977,706
Depreciation
Balance at December 31, 2012 (1,496 ) (15,826 ) (1,280 ) (434 ) (1,500 ) (20,535 )
Additions (67,470 ) (69,376 ) (432 ) (307 ) (749 ) (138,335 )
Write-offs 518 93 6 616
Transfers
Carrying amount
Balance at December 31, 2012 3,113 16,975 59,336 3,306 860 4,769 12,169 (12,169 ) 3,993 5,478,044 5,570,399
Balance at December 31, 2013 7,845 3,090,707 2,513,869 3,392 1,109 6,190 12,169 (12,169 ) 3,954 1,316,505 (124,118 ) 6,819,454
Machinery and equipment
Basically relates to the UTEs Amapari Energia S.A., Itaqui, Parnaba and Pecm II, which came into
operation in November 2008, February 2013, March 2013 and October 2013 respectively. Asset
depreciation is based on the concession term and calculated by the straight line method at the rates
determined by Normative Resolution 474 issued February 7, 2012 by the National Electric Energy
Agency - ANEEL. For the estimated portion of the investments made and not amortized or
depreciated by the end of the concession, a new depreciation or amortization rate is calculated and
recorded in income monthly, so that a value equal to zero is obtained at the end of the concession.
Eneva S.A.
36
Buildings, Civil Works and Improvements
Basically relates to the UTEs Itaqui, Parnaba and Pecm II, which came into operation in February
2013, March 2013 and October 2013 respectively. Depreciation follows the same procedure and
criteria described in the item Machinery and equipment.
Land
On June 30, 2010 Parnaba Gerao de Energia S.A. acquired land to build the venture for R$ 3,113,
which it recorded under land. Following the operational start-up of the Porto do Itaqui plant, we
transferred R$ 4,731 from property, plant and equipment in progress to property, plant and
equipment in service. The amounts are recorded in accordance with Technical Pronouncement CPC
27 - Property, Plant and Equipment.
Property, plant and equipment in progress
UTEs Parnaba I and II signed with Duro Felguera do Brasil Desenvolvimento de Projetos Ltda. and
Initec do Brasil Engenharia e Construes Ltda. respectively EPC agreements (Engineering,
Procurement and Construction) in the form lump sum turn key to build the power stations.
The expenses incurred on advances made for reserves and equipment acquisitions to build the
thermal power plants of the companies Pecm II Gerao de Energia S.A., Itaqui Gerao de Energia
S.A. and Parnabas I and II are transferred to the respective accounts of property, plant and
equipment in service, following the approval of the declaration of commercial operation (DCO). The
subsidiaries, Pecm II Gerao de Energia S.A., Itaqui Gerao de Energia S.A, and MABE
Construo e Administrao de Projetos Ltda. signed EPC agreements ("Engineering, Procurement
and Construction") in the form lump sum turn key to build the power stations. As established in the
respective agreements, 15% of each advance made will be withheld as a guarantee for delivery of the
power station, to be disbursed in the course of FY 2013, if MABE presents bank guarantees. It should
be noted that it is not known when this withheld portion of the advance will be applied in the
construction of the plant. At March 31, 2014 the total guarantees retained by the subsidiaries amount
to R$ 79,942 (R$ 84,789 at December 31, 2013) and have been recorded under the respective
subsidiary's current liabilities and presented in the consolidated financial statements under
"Contractual retentions".
The labor costs of workers directly allocated to the construction of the Parnaba II plant, which
amounts to R$ 22,455 at March 31, 2014 (R$ 20,038 at December 31, 2013), is being
capitalized.
In 2013 the Itaqui, Pecm II and part of the Parnaba complex came into operation and the
corresponding amounts of property, plant and equipment in progress were transferred to the
respective accounts of property, plant and equipment in service. At March 31, 2014 the remaining
balance of property, plant and equipment in progress primarily consists of the Parnaba II project,
which is forecast to come into operation in 2014.
Eneva S.A.
37
At December 31, 2013 the costs of consolidated loans capitalized under the property, plant and
equipment in progress amounted to R$ 20,122 (2013 - R$ 117,926), as follows:
Parnaba II
Average rate in 2014 (p.a.) 10%
Amounts capitalized in 2014 20,122
Amounts capitalized in 2013 72,328
13 Intangible assets
Consolidated
Intangible assets in service
Computer
programs
and
licenses
Goodwill on
acquisition of
investments
Concessions
and
CCEARs
Usage
rights
Intangible
assets in
progress Total
Amortization rate % p.a. 20 3.30 20
Cost
Balance at December 31, 2013 22,023 15,470 183,448 10,498 6,089 222,058
Balance at December 31, 2013 22,023 15,470 183,448 10,498 6,089 222,058
Additions 54 15,524
Write-offs
Transfers 28 28
Balance at March 31, 2014 6,635 15,470 183,448 10,498 6,089 237,610
Amortization
Balance at December 31, 2013 (3,081 ) (468) (5,129) (8,678)
Balance at December 31, 2013 (3,081 ) (468) (5,129) (8,678)
Additions (291 ) (128) (3,017 ) (3,436)
Balance at March 31, 2014 (3,372) (596) (8,146) (12,114)
Carrying amount
Balance at December 31, 2013 18,943 (468) 178,319 10,498 6,089 213,381
Balance at March 31, 2014 3,264 14,874 175,302 10,498 6,089 210,026
Eneva S.A.
38
2013
Computer
programs
and
licenses
Goodwill on
investments
Concessions
and CCEARs
Usage
rights
Intangible
assets
In progress Total
Amortization rate % p.a. 20 3.3 20
Cost
Balance at December 31, 2012 5,215 15,470 183,448 12,900 167 201,730
Additions 5,224 251 270 21,214
Write-offs
Transfers 6,613 (7,061 ) (436 ) (885 )
Balance at December 31, 2013 17,053 15,470 183,448 6,089 222,059
Amortization
Balance at December 31, 2012 (1,965 ) (1,965 )
Balance at December 31, 2012 (1,965 ) (1,965 )
Additions (6,244 ) (469) (6,713 )
Write-offs
Transfers
Balance at December 31, 2013 (8,209 ) (469) (8,677 )
Carrying amount
Balance at December 31, 2013 8,843 15,001 183,448 6,089 213,381
(b) Goodwill on investments
On October 14, 2008 Eneva S.A. acquired the entire capital of Itaqui Gerao de Energia S.A. from
EDP Energias do Brasil S.A. in an acquisition that involved the swap of a 50% interest in Porto do
Pecm Gerao de Energia S.A. for said capital. This transaction generated goodwill for Eneva S.A. of
R$ 15,470, which is being presented under investments in the parent company's financial statements
and under intangible assets in the consolidated financial statements. This goodwill is based on the
expected future yield and is amortized over the term established in Ordinance authorization 177
issued May 12, 2008.
(c) Intangible asset in progress
Basically refers to the easement for the water collection system installation for the thermal power
plant Parnaba II.
14 Related parties
The main balances of assets and liabilities at March 31, 2014 and December 31, 2013 related to
related-party transactions, as well as the transactions that influenced the income for the period,
relate to transactions between the Company and its direct and indirect subsidiaries, affiliates and key
management personnel, which were conducted in accordance with the terms agreed by the parties.
Eneva S.A.
39
(a) Controlling shareholder
The Company's control is jointly exercised by Mr. Eike Fuhrken Batista and DD Brazil Holdings
S..R.L (fully controlled by E.ON AG), which respectively hold 23.9% and 37.9% of the common
shares.
(b) Managers
The Company is managed by a Board of Directors and an Executive Board, pursuant to the duties
and powers vested by its Bylaws in accordance with corporate law.
(c) Related companies
The Company's main affiliated companies are: EBX Holding Ltda., E.ON AG, leo e Gs
Participaes S.A., Prumo Logstica S.A., MMX Minerao e Metlicos S.A., OSX Brasil S.A., OMX
Operaes Martimas Ltda., CCX Brasil Participaes S.A., MMX Chile S.A., LLX A Operaes
Porturias S.A. and AVX Txi Areo Ltda., in addition to its subsidiaries and associated companies.
The balances of assets, liabilities and effects on income of related-party transactions are as follows:
Assets
March 31,
2014
December 31,
2013
March 31,
2014
December 31,
2013
Pecm II Gerao de Energia S.A. (c) 331,689 324,216
Termopantanal Ltda. (a) 7,683 7,683
Termopantanal Ltda. (a) (7,453) (7,453 )
Termopantanal Participaes Ltda. (a) 457 457
ENEVA Comercializadora de Energia S.A. (e) 772 653 26,158 14,387
Parnaba Gerao de Energia S.A. (f) 5,523 5,159
Itaqui Gerao de Energia S.A. (g) 414,066 404,621
Sul Gerao de Energia S.A. (m) 197 181 197 181
Porto do A Energia S.A. (m) 248 241 248 241
Parnaba II Gerao de Energia S.A. (j) 3,398 2,977
ENEVA Comercializadora de Combustvel Ltda. (m) 355 327 355 327
Seival Participaes S.A. (m)
EBX Holding Ltda. (b) 12,542 12,542 12,542 12,542
Pecm Operao e Manuteno Eltrica S.A. (j) 1,582 1,547 1,582 1,547
ENEVA Participaes S.A. (n) 7,727 5,341 7,727 5,341
Porto do Pecm Gerao de Energia S.A. (k) 262,257 258,749 263,763 260,268
ENEVA Desenvolvimento (l) 348 346
Seival Sul Minerao Ltda. (m) 10 10
Parnaba Participaes S.A. (m) 1,063 1,131 1,063 1,131
ENEVA Investimentos S.A. (m) 11 11
Parnaba V Gerao de Energia S.A. (m) 119
Tau II Gerao de Energia Ltda. 44 44
Parnaba III Gerao de Energia S.A.
Parnaba IV Gerao de Energia S.A. (q) 64,879 14,219 64,879 14,219
Parnaba Gs Natural S.A. (p) 204,794 1,344 206,138
MABE da BrasilA. 11,786 11,559 11,786 11,559
Seival Gerao de Energia S.A. 161 195 161 195
Advances for future capital
increases for subsidiaries (h) 136,295 206,678 185 150
1,255,640 1,456,347 391,990 528,227
Non-current 1,255,640 1,456,347 391,990 528,227
Eneva S.A.
40
Liabilities
March 31,
2014
December 31,
2013
March 31,
2014
December 31,
2013
EBX Holding Ltda. (b) 2,772 2,772 5,598 2,824
ENEVA Comercializadora de Energia Ltda. (e) 81 81 98,288 138,478
Copelmi Minerao Ltda. (d) 147 158
Porto do Pecm Gerao de Energia S.A. (k) 1,904 2,502
ENEVA Comercializadora de Combustveis Ltda. (m)
ENEVA Participaes S.A. (n) 5,035 3,919 5,035 3,919
Tau Gerao de Energia Ltda. 444 444 444 444
Porto do Pecm Transportadora e Minrios S.A. 218 70
Petra Energia S.A.(o) 90,910 80,781
Parnaba Gs Natural S.A.(p) 274 274 49,650 45,128
Parnaba Participaes S.A. 28,094 27,000 280.94 27,000
DD Brazil 6,416 6,416
36,700 34,489 286,705 307,720
Current
Non-current 36,700 34,489 286,705 307,720
Net income
March 31,
2014
December 31,
2013
March 31,
2014
December 31,
2013
EBX Holding Ltda. (b) (4,249) (6) (4,981 )
Pecem II Gerao de Energia S.A. (c) 8,592 433 433
ENEVA Comercializadora de Energia S.A. (e) 46 52 15,455 52
Parnaba Gerao de Energia S.A. (f) 265 403 (361)
Itaqui Gerao de Energia S.A. (g) 10,704 6,860 1,939
MPX Sul Energia S.A. (m) 8 60 8 60
Porto do A Energia S.A. (m) (1) 64 (1) 64
ENEVA Solar Empreendimentos Ltda.
ENEVA Comercializadora de Combustvel Ltda. (m) 4 9 4 9
Seival Participaes S.A. (m) (34) (13) (34) (13)
Pecm Operao e Manuteno Eltrica S.A. (i) 42 26 42 (2,211 )
Parnaba II Gerao (j) 310 310 (341)
Parnaba Participaes (m) 148 6 6
ENEVA Participaes S.A. (n) 514 478 514 478
Porto do Pecm Gerao de Energia S.A. (k) 4,201 2,608 4,201 2,608
ENEVA Desenvolvimento S.A. (l) 3 61
Parnaba III Gerao de Energia S.A. (m) (986) (986)
Parnaba V Gerao de Energia S.A. (m) 101 64 101 64
MABE Construo e Administrao de Projetos Ltda. (m) 293 45 (4,795) 45
ENEVA Investimentos S.A. (m) 11 11
Copelmi Minerao Ltda. (d) (18)
Parnaba IV Gerao de Energia S.A. (q) 1,917 1,917
Petra Energia S.A. (o) 76,658
Seival Sul Minerao 3
Parnaba Gs Natural S.A. (p) (8,421 ) 59,098
17,706 7,231 152,176 (2,156)
(a) Loan agreement executed with Eneva S.A. (lender) subject to monthly interest (101% of CDI)
and with an unfixed term of maturity. Eneva S.A. has made a provision of R$ 7,453 for the
devaluation of its 66.67% investment in Termopantanal Participaes Ltda.
Eneva S.A.
41
(b) The Company and its subsidiaries also maintain agreements for sharing costs of operating and
financial activities entered into with the company EBX Holding Ltda. involving monthly
collections made through trade notes paid according to understandings between the parties.
The effect on net income at March 31, 2014 is R$ (6) (R$ (4,981) at March 31, 2013).
(c) Revenue from reimbursement of operational, financial and project implementation costs. At
March 31, 2013 the effect on net income is R$ 433.
(d) Reimbursement of administrative costs related to the 30% interest held by Copelmi Minerao
Ltda. in the share capital of Seival Sul Minerao, with an effect on net income of R$ 18 at
March 31, 2013.
(e) The balance consists of operational and financial cost sharing agreements with Eneva S.A.,
Itaqui Gerao de Energia S.A., Parnaba II Gerao de Energia S.A. and Pecm II Gerao de
Energia S.A., involving monthly collections made through trade notes paid according to
understandings between the parties (average DPO of 30 to 60 days). At March 31, 2014 the
effect on net income is R$ 15,455.
(f) The balance consists of revenue from reimbursement of feasibility study costs. At March 31,
2013 the effect on net income is R$ (361).
(g) The balance consists of revenue from reimbursement of operating and finance activities and
project implementation costs; at March 31, 2013 the effect on net income is R$ 1,939.
(h) Balance consisting of advances for future capital increase (AFACs) of its subsidiaries from
investments to non-current assets, which are irrevocable and irreversible. However, no fixed
value has been defined for the number of shares in the capital increase, in contravention of CPC
38. The following AFACs are outstanding at March 31, 2014 with the following companies:
Subsidiary
March 31,
2014
December 31,
2013
MPX Sul Energia S.A. 15
MPX Seival Participaes S.A. 20
Parnaba Gerao de Energia S.A. 135,500 118,000
Parnaba V Gerao de Energia S.A. 10
Itaqui Gerao de Energia S.A. 87,700
Parnaba Participaes S.A.
Pecm II Gerao de Energia S.A.
ENEVA Investimentos S.A. 3
OGMP Transporte Areo Ltda. 150 150
Tau II Gerao de Energia Ltda. 610 815
136,295 206,678
(i) The balance consists of: (i) loan agreement executed in December 2011 with Eneva S.A. (lender)
subject to monthly interest (110% of CDI) and with a fixed term of maturity on December 31,
2013. At March 31, 2014 the effect on net income is R$ 42.
(j) Revenue from reimbursement of operational, financial and project implementation costs. At
March 31, 2013 the effect on net income is R$ (341).
Eneva S.A.
42
(k) Loan agreement made on September 24, 2012 with Eneva S.A. (lender) subject to monthly
interest (105% of CDI) and with a term of maturity of 1 (one) day after full repayment of loan by
lender. The company determined revenue balance at March 31, 2014 of R$ 4,201.
(l) The balance consists of (i) revenue from reimbursement of project management costs; at March
31, 2014 the effect on net income is R$ 3.
(m) Revenue from reimbursement of project implementation costs.
(n) Revenue from reimbursement of project implementation costs. At March 31, 2014 the effect on
net income is R$ 514.
(o) The balance consists of: (i) costs relating to the gas purchase agreement and leasing of the gas
treatment plant's capacity, between Parnaba and Petra. The effect on net income is R$ 28,937
and (ii) Advance for future capital increase of R$ 47,721 between Petra and Parnaba.
(p) The balance consists of: (i) costs relating to the gas purchase agreement and leasing of the gas
treatment plant's capacity, between Parnaba Gs Natural and Parnaba Gerao. The effect on
net income is R$ 67,519 and (ii) income from interest charged on the outstanding receivables,
financial progress achieved regarding Parnaba Gas Natural of R$ 8,421. Additionaly, we
emphasize that this accounts receivable was fully settled in March 2014.
(q) On January 29, 2014 a loan agreement was entered into with the Geneva Preview SA (lender),
subject to monthly interest (125% of the CDI) and with a maturity of one (1) day after the full
payment of the total contract value. Geneva Preview additionaly recorded revenue for
reimbursement of costs related to implementation of this project, in March 2014 the effect on
net income is $ 1.9 million.
(d) Compensation of the Board of Directors and
Executive Board members
In accordance with Law 6404/1976 and the Company's bylaws, the shareholders will establish the
managers' overall annual remuneration at the General Meeting. The Board of Directors will
distribute the amount among the directors.
The annual compensation of officers and the Board of Directors is presented below:
March 31,
2014
December 31,
2013
March 31,
2014
December 31,
2013
Immediate benefits
Salaries 1,652 1,371 2,366 2,303
1,652 1,371 2,366 2,303
See below the minimum, average and maximum individual annual compensation of the Board of
Directors and Officers, in R$:
Consolidated
March 31, 2014 December 31, 2013
Minimum Average Maximum Minimum Average Maximum
Board of Directors 20,000 25,000 40,000 15,000 33,864 45,000
Officers 775,175 1,127,379 1,807,836 92,603 191,951 365,520
Eneva S.A.
at March 31, 2014
43
15 Loans and financing
At March 31, 2011 and December 31, 2013 the loans taken out from financial institutions break down as follows:
Consolidated
Effective Transaction Unappropriated Transaction Unappropriated
Company Creditor Currency Interest rates Maturity rate cost cost Principal Interest Total cost cost Principal Interest Total
Itaqui BNDES (Direct) (a) R$ TJLP+2.78% 15/06/26 2.89% 11,182 9,759 813,670 2,365 806,276 11,182 9,913 830,630 2,586 823,304
Itaqui BNB (b) R$ 10,00% 15/12/26 10.14% 2,892 2,699 201,668 856 199,825 2,892 2,727 201,977 857 200,107
Itaqui BNDES (Indirect) (c) R$ IPCA + TR BNDES + 4.8% 15/06/26 4.94% 2,023 1,937 111,744 9,603 119,411 1,475 1,473 109,302 6,041 113,870
Itaqui BNDES (Indirect) (d) R$ TJLP+4.8% 15/06/26 4.94% 1,475 1,473 158,811 578 157,917 2,023 1,953 162,052 632 160,731
Pecm II BNDES (Direct) (e) R$ TJLP+2.18% 15/06/27 2.30% 7,256 6,583 697,140 1,881 692,439 7,803 6,091 710,327 2,054 706,290
Pecm II BNDES (Direct) (f) R$ IPCA + TR BNDES + 2.18% 15/06/27 2.32% 1,611 1,165 134,548 47,948 181,330 1,740 1,294 131,607 42,840 173,153
Pecm II BNB (g) R$ 10,00% 31/01/28 10.17% 4,287 4,235 248,875 244,640 4,287 3,620 250,000 4,070 250,450
Parnaba I BRADESCO (h) R$ CDI +3.00% 18/12/14 36,000 93 36,093 4,593 48,000 117 48,117
Parnaba I Banco Ita BBA (i) R$ CDI +3.00% 15/04/15 60,670 2,716 63,386 11,516 60,670 776 61,446
Parnaba I BNDES (Direct) (j) R$ TJLP+1.88% 15/06/27 2.21% 20,192 20,176 484,306 1,727 465,857 16,867 16,860 493,444 1,370 477,954
Parnaba I BNDES (Direct) (k) R$ IPCA + TR BNDES + 1.88% 15/07/26 2.23% 8,323 7,880 220,815 13,361 226,296 6,953 6,663 215,988 10,408 219,733
Parnaba II Banco Ita BBA (l) R$ CDI +3.00% 30/12/14 200,000 6,418 206,418 200,000 146 200,146
Parnaba II CEF (m) R$ CDI +3.00% 30/12/14 280,000 9,077 289,077 280,000 286 280,286
Parnaba II BNDES (n) R$ TJLP+2.40% 15/06/15 3.39% 5,403 4,569 283,610 2,372 281,413 3,619 3,619 280,700 223 277,304
ENEVA S.A. Banco Ita BBA (o) R$ CDI +2.65% 16/12/14 105,790 3,743 109,534 105,790 503 106,293
ENEVA S.A. Banco Citibank (p) R$ CDI +2.95% 22/09/14 101,250 6,410 107,660 101,250 3,107 104,357
ENEVA S.A. Banco Citibank (q) USD LIBOR 3M + 1.26% 27/09/17 113,150 19 113,169 117,130 20 117,150
ENEVA S.A. Banco BTG Pactual (r) R$ CDI +3.75% 09/12/14 101,912 836 102,748 101,912 792 102,705
ENEVA S.A. Banco BTG Pactual (s) R$ CDI +3.75% 09/06/15 350,000 2,871 352,871 350,000 2,559 352,559
ENEVA S.A. Banco BTG Pactual (t) R$ CDI +3.75% 09/12/14 370,000 3,035 373,035 370,000 1,196 371,196
ENEVA S.A. Banco HSBC (u) R$ CDI +2.75% 12/12/14 303,825 11,138 314,962 303,825 1,747 305,572
ENEVA S.A. Banco Citibank (v) R$ CDI +4.00% 03/11/14 42,000 886 42,886 42,000 879 42,879
ENEVA S.A. Banco Citibank (w) R$ CDI +4.00% 09/12/14 100,000 4,194 104,194 100,000 792 100,792
ENEVA S.A. Banco Ita BBA (x) R$ CDI +2.65% 05/12/14 200,000 7,765 207,765 200,000 1,618 201,618
ENEVA S.A. Banco Ita BBA (y) R$ CDI +2.65% 09/12/14 210,000 7,947 217,947 210,000 1,499 211,499
ENEVA S.A. Banco Santander (z) R$ CDI+3.25-4.25% 15/01/15 66,667 336 67,003
ENEVA S.A. Morgan Stanley (aa) R$ CDI+3.25-4.25% 15/01/15 66,667 336 67,003
ENEVA S.A. Banco Ita BBA (bb) R$ CDI+3.25-4.25% 15/01/15 66,667 336 67,003
ENEVA S.A. Banco Ita BBA (cc) R$ CDI +3.15% 19/01/16 80,000 1,712 81,712
64,644 60,476 6,009,784 149,552 6,098,861 74,950 54,213 6,176,605 88,129 6,210,520
Unappropriated
cost Principal Interest Total
Unappropriated
Current 5,648 2,335,901 147,843 2,478,096 6,984 1,716,403 110,555 1,819,974
Non-current 54,830 3,673,883 1,712 3,620,765 32,409 3,111,363 25,852 3,104,806
Eneva S.A.
44
The table below shows the breakdown of the loans of the joint subsidiary Porto do Pecm Gerao de Energia S.A. and the indirect subsidiaries MPX Chile
Holding Ltda., Parnaba III Gerao de Energia S.A and Parnaba IV Gerao de Energia S.A.. As a result of the new consolidation rules introduced by IFRS
11, from 2013 we are no longer obliged to present them in the financial statements:
Consolidated
Interest Effective Transaction Unappropriated Transaction Unappropriated
Company Creditor Currency rates Maturity rate cost cost Principal Interest Total cost cost Principal Interest Total
Pecm I (50%) BNDES (Direct) (gg) R$ TJLP + 2.77% 15/06/26 TJLP + 3.09% 8.461 4.653 725.640 2.115 723.102 8.461 4.844 740.449 2.312 737.917
Pecm I (50%) IDB (hh) USD LIBOR + 3.50% 15/05/26 Libor + 4.67% 8.829 5.396 152.768 2.225 149.598 8.808 5.296 158.142 779 153.625
Pecm I (50%) IDB (ii) USD LIBOR + 3.00% 15/05/22 Libor + 4.16% 8.965 4.841 178.236 2.259 175.655 8.939 5.374 184.506 791 179.924
Chile (50%) Banco Credit Suisse (jj) USD 8,125% 15/04/15 10.184 384 10.568 10.519 183 10.701
Chile (50%) Banco Credit Suisse (kk) USD 8,000% 15/04/15 6.789 252 7.041 7.013 120 7.134
Parnaba IV (35%) Banco BTG Pactual (ll) R$ CDI + 2.28% 29/01/14 24.500 1.796 26.296
Parnaba III (35%) Banco Bradesco (mm) R$ CDI + 2.53% 30/07/14 3,22% 664 381 42.000 836 42.455 42.000 493 42.493
26.919 15.271 1.115.618 8.071 1.108.418 26.208 15.514 1.167.129 6.474 1.158.089
Unappropriated
Unappropriated
Current 2.448 109.892 8.071 115.515 2.481 160.876 6.475 164.870
Non-current 12.823 1.005.726 - 992.903 13.033 1.006.253 - 993.219
45
Porto do Itaqui Gerao de Energia SA (Itaqui)
(a) The National Social and Economic Development Bank ("BNDES") released the entire R$ 784 million
of the long-term loan to Itaqui relating to subcredits A, B and C, incurring an annual cost of TJLP +
2.78%. The financing facility has a term of 17 years, with 14 years repayment and a grace period on
the principal until July 2012. Subcredit D, intended for social investments (BNDES Social) of R$ 13.7
million, only incurs TJLP and R$ 11.7 million has been disbursed to date. The "BNDES Social"
facility has a total term of 9 years, with 6 years repayment and a grace period until July 2012. The
interest earned during the grace period was capitalized along with the amounts disbursed. The
balance of the principal at March 31, 2014 therefore stands at R$ 813.7 million. The interest on these
loans was capitalized during the construction phase. This financing is secured by the traditional
guarantee for project finance loans.
(b) To top up the funding from the BNDES, Itaqui took out a loan from BNB-FNE, worth a total R$ 203
million under which the last payment was released on July 28, 2011, completing the loan. The BNB
loan has a total term of 17 years, with 14 years repayment and a grace period on the principal until
July 2012. It is charged interest of 10% p.a. The funding has a performance bonus (15%), which
consequently reduces the cost to 8.5% per annum. This financing is secured by the traditional
guarantee for in project finance loans.
(c) R$ 99 million of this indirect BNDES line has been released to Itaqui consisting of subcredits A, B, C,
D and E, whose agents are the banks Bradesco and Votorantim This part of the loan has a total term
of 17 years, including 14 years of amortization and a grace period for interest and the principal until
July 2012. The loan incurs IPCA + BNDES Reference rate + 4.8% p.a. during the construction stage
and IPCA + BNDES Reference rate + 5.3% during the operational stage. The interest earned during
the grace period was capitalized along with the amounts disbursed. The balance of the principal at
March 31, 2014 therefore stands at R$ 111.7 million. The interest on these loans was capitalized
during the construction phase. This financing is secured by the traditional guarantee for project
finance loans.
Eneva S.A.
46
(d) The entire subcredit F, of the loan mentioned in the previous item equal to R$ 141.8 million, has
been passed through to Itaqui. This part of the loan has a total term of 17 years, with 14 years
repayment and a grace period on the principal and interest of until July 2012. The loan incurs TJLP
+ 4.80% p.a. during the construction stage and TJLP + 5.30% during the operational stage. The
interest earned during the grace period was capitalized along with the amounts disbursed. The
balance of the principal at March 31, 2014 therefore stands at R$ 158.8 million. The interest on these
loans was capitalized during the construction phase. This financing is secured by the traditional
MPX PecmII Gerao de Energia SA (Pecm II)
(e) By March 31, 2014 Pecm II had received R$ 615.3 million of the R$ 627.3 million earmarked in
subcredits A, B, C, D and L of the long-term financing contract with the BNDES (in nominal R$,
excluding interest during the construction). These subcredits have a total term of 17 years, with 14
years repayment and a grace period on the principal and interest of until July 2013. The loan incurs
LTIR + 2.18% p.a. The interest earned during the grace period was capitalized along with the
amounts disbursed. The balance of the principal at March 31, 2014 therefore stands at R$ 697.1
million. This financing is secured by the traditional guarantee for project finance loans.
(f) Pecm II received R$ 110.1 million referring to subcredits E, F, G, H and I of the long-term financing
contract with the BNDES mentioned in the item above. These subcredits have a total term of 17
years, with 14 years repayment and a grace period on the principal and interest of until June 2014.
The loan incurs IPCA + BNDES Reference rate + 2.18% p.a. Subcredit J, of R$ 22 million, which
comprised this financing line, was transferred in April 2012 to subcredit A of the previous item. This
financing is secured by the traditional guarantee for project finance loans.
(g) To top up the funding from the BNDES, Pecm II took out a loan from BNB with FNE funding,
worth a total R$ 250 million, which has been disbursed in its entirety. The BNB loan has a total term
of 17 years, with quarterly interest and 14 years' repayment and a grace period on the principal until
February 2014. It is charged interest of 10% p.a. The funding has a performance bonus (15%), which
consequently reduces the cost to 8.5% per annum. This financing is secured by the traditional
UTE Parnaba Gerao de Energia SA (Parnaba I)
(h) On December 27, 2011 Parnaba I borrowed R$ 75 million under a CCB loan (Bank Credit Note) with
BRADESCO, which was endorsed by the parent company. Taken out to finance the construction of
thermoelectric power plants Maranho IV and V, this bridge loan incurs annual interest of the CDI
rate + 3% and matures initially on June 26, 2013, whereupon the principal and interest is due. A
further R$ 75 million was disbursed on February 28, 2012 by the bank on the same terms as the
previous disbursement. R$ 90 million of the principal plus the interest due was settled on December
28, 2012, when the long-term BNDES loan described in items (j) and (k) was released. On June 26,
2013 the company renegotiated the principal balance of R$ 60 million, paying all the interest due up
to that date with the new maturity date changing to September 24, 2013 and the interest held at the
CDI rate plus 3% per annum. On September 24 UTE Parnaba renegotiated the terms of the contract,
changing the maturity date to October 24, 2013 and subsequently to November 24, 2013. On October
31, 2013 a new renegotiation amended the loan's maturity to December 18, 2014. The principal and
interest will be paid in 15 monthly installments. The balance of the principal at March 31, 2014
therefore stands at R$ 36 million.
Eneva S.A.
47
(i) On December 27, 2011 Parnaba I borrowed R$ 125 million under a CCB loan (Bank Credit Note)
with Banco Ita BBA, which was endorsed by the parent company. Taken out to finance the
construction of thermoelectric power plants Maranho IV and V, this bridge loan incurs annual
interest of the CDI rate + 3% and matures originally on June 26, 2013, whereupon the principal and
interest was due. R$ 60 million of the principal plus the interest due was settled in December 2012,
when the long-term BNDES loan described in items (j) and (k) was released. On June 26, 2013 the
company renegotiated the principal balance of R$ 65 million, paying all the interest due up to that
date with the new maturity date changing to September 24, 2013 and the interest held at the CDI
rate plus 3% per annum. On this date a new renewal amended the loan's maturity to October 24,
2013 and subsequently to April 15, 2015. The principal and interest will be paid in 5 quarterly
installments commencing April 15, 2014. The balance of the principal at March 31, 2014 therefore
stands at R$ 60.7 million.
(j) In December 2012 Parnaba I received R$ 495.7 million as subcredits B and C of the bridge loan
from BNDES, out of a total of R$ 671 million. These subcredits will be amortized over 168 monthly
instalments commencing July 15, 2013, along with the interest. The loan incurs LTIR + 1.88% p.a.
The balance of the principal at March 31, 2014 therefore stands at R$ 484.3 million.
(k) In December 2012 Parnaba I also received R$ 204.3 million referring to the entire subcredit A of the
long-term financing contract with the BNDES mentioned in the item above. This subcredit will be
amortized over 13 annual instalments commencing July 15, 2014, along with the interest. The loan
incurs IPCA + BNDES Reference rate + 1.88% p.a. The interest earned during the grace period was
capitalized along with the amounts disbursed. The balance of the principal at March 31, 2014
therefore stood at R$ 220.8 million. This financing is secured by the traditional guarantee for project
finance loans.
UTE Parnaba II Gerao de Energia SA (Parnaba II)
(l) On March 30, 2012 the Parnaba II project secured R$ 100 million under a CCB loan from Banco
Ita BBA, endorsed by the parent company. Originally maturing on September 30, 2013 for the
payment of principal and interest, this bridge loan was used to finance the building of the Maranho
III thermal power plant. Upon maturity this bridge loan incurs annual interest of the CDI rate + 3%
and matures on September 30, 2013, whereupon the principal and interest was due. The company
renegotiated the loan, altering its maturity date to December 30, 2013. The loan was subsequently
renegotiated, changing its maturity to December 30, 2014 and an additional R$ 100 million was
borrowed, maturing on December 30, 2014. The balance of the principal at March 31, 2014 therefore
stands at R$ 200 million.
(m) In May 2012 Parnaba II borrowed R$ 325 million under a CCB loan from Caixa Econmica Federal,
which was endorsed by the parent company. Taken out to finance the construction of thermoelectric
power plant Maranho III, this bridge loan incurs annual interest of the CDI rate + 3% and originally
matured on November 7, 2013, whereupon the principal and interest was due. A portion of R$ 125
million has been released, in addition to two portions of R$ 100 million, on May 8, 2012, May 15,
2012 and May 30, 2012. Upon maturity the company renegotiated the loan, altering its maturity date
to December 30, 2013. R$ 45 million of the principal has been repaid to date, in addition to the
interest incurred, and the remaining amount has been renegotiated to December 30, 2014. The
balance of the principal at March 31, 2014 therefore stands at R$ 280.0 million.
(n) Parnaba II received a bridge loan from BNDES of R$ 280.7 million at the end of December 2013.
This loan will be amortized in a single payment on June 15, 2015 along with the interest. The annual
cost was LTIR + 2.40%.
Eneva S.A.
48
Eneva S.A. (Eneva)
(o) On December 16, 2013 Eneva renegotiated the R$ 105.8 million of CCBs (Bank Credit Notes) from
Banco Ita BBA S.A., paying all the interest due up to that date with the new maturity date changing
to December 16, 2014. The cost will be CDI plus 2.65% per annum with the interest and principal
being paid at the end of the loan.
(p) On September 27, 2012 the parent company Eneva S.A issued a CCB (Bank Credit Note) via Banco
Citibank S.A. for R$ 101,250 maturing on September 27, 2013. The interest agreed was 100% of the
CDI rate +1.15% per annum and is due upon maturity, on September 27, 2013. On this date Eneva
S/A renewed this agreement, changing its maturity date to September 22, 2014 and changing the
interest rate to CDI plus 2.95% per annum.
(q) On September 27, 2012 Eneva took out a loan equal to USD 50,000 from Banco Citibank S.A. under
a Credit Agreement, in due accordance with BACEN Resolution 4131. This loan is subject to interest
of Libor + 1.26% p.a. and will be paid quarterly. The principal will be paid semi-annually, with a
grace period of September 26, 2014 and the contract expiring on September 27, 2017. Eneva S.A.
took out a swap from Citibank in order to hedge this loan against exchange variance. See Note 18.
(r) On December 13, 2012 Eneva issued a CCB (Bank Credit Note) via Banco BTG Pactual for R$ 101.9
million maturing on December 13, 2013. Upon maturity the line was renegotiated, altering its
maturity date to December 9, 2014. The interest will be paid quarterly at the cost of the CDI rate plus
3.75% p.a. The principal will be paid in full upon maturity.
(s) On February 7, 2013 Eneva issued a CCB (Bank Credit Note) via Banco BTG Pactual for R$ 350
million maturing on August 6, 2013. The interest agreed was 100% of the CDI rate 2.95% per annum
and is due upon maturity. On August 6, 2013 the company renegotiated the loan, altering its
maturity date to December 2, 2013. A new renegotiation extended the debt's maturity date to June 9,
2015, with interest paid quarterly at the cost of CDI + 3.75% p.a. and the principal paid on maturity.
(t) On December 9, 2013 and December 26, 2013 Eneva issued two CCBs (Bank Credit Notes) via Banco
BTG Pactual for the individual amounts of R$ 100 million on December 9, 2013 and R$ 270 million
on December 26, 2013, both maturing on December 9, 2014. The interest agreed was 100% of the
CDI rate 3.75% per annum and is due quarterly.
(u) On March 25, 2013 Eneva issued a CCB (Bank Credit Note) via Banco HSBC for R$ 100 million
maturing on March 25, 2014. The interest agreed was 100% of the CDI rate 1.75% per annum and is
due upon maturity. The interest accumulated to December 12, 2013 was paid and a new maturity was
agreed for December 12, 2014. The spread for this new period will be 2.75% per annum. At the time
of the renegotiation the company issued a new CCB amounting to R$ 203.8 million scheduled for
maturity on December 12, 2014. The cost will be CDI plus 2.75% per annum with the interest and
principal being paid at the end of the loan.
(v) Eneva took out a loan from Citibank S.A. of R$ 42 million (in the form of a CCB) on November 1,
2013, maturing on November 3, 2014. The interest will be paid quarterly at the cost of the CDI rate
plus 4.00% per annum and the principal will be paid upon maturity.
(w) On December 9, 2013 Eneva issued a Banco Citibank CCB (Bank Credit Note) for R$ 100 million
maturing on December 9, 2014. The principal and interest will be paid at maturity at the cost of the
CDI rate plus a spread of 4.00%.
Eneva S.A.
49
(x) On December 5, 2013 Eneva issued a Ita BBA CCB (Bank Credit Note) for R$ 200 million maturing
on December 5, 2014. The interest agreed was 100% of the CDI rate plus 2.65% per annum with
principal and interest due upon maturity.
(y) On December 09, 2013 Eneva issued a Ita BBA CCB (Bank Credit Note) for R$ 210 million
maturing on December 9, 2014. The interest agreed was 100% of the CDI rate plus 2.65% per annum
with principal and interest due upon maturity.
(z) As a result of the negotiations of OGX Maranho (now Parnaba Gs Natural), Eneva took out a loan
from Banco Santander of R$ 66.6 million (CCB) on November 4, 2013, maturing on January 15,
2015. The interest will be paid monthly at the cost of the CDI rate plus: 3.25% per annum until June
14, 2014, 3.75% per annum until September 14, 2014 and 4.25% until the full settlement of the CCB.
The entire CCB was settled in March 2014 along with the interest incurred.
(aa) As a result of the negotiations of OGX Maranho (now Parnaba Gs Natural), Eneva took out a loan
from Morgan Stanley of R$ 66.6 million (CCB) on November 4, 2013, maturing on January 15, 2015.
The interest will be paid monthly at the cost of the CDI rate plus 3.25% per annum until June 14,
2014, 3.75% per annum until September 14, 2014 and 4.25% until the full settlement of the CCB. The
entire CCB was settled in March 2014 along with the interest incurred.
(bb) As a result of the negotiations of OGX Maranho (now Parnaba Gs Natural), Eneva took out a loan
from Ita BBA of R$ 66.6 million (CCB) on November 4, 2013, maturing on January 15, 2015. The
interest will be paid monthly at the cost of the CDI rate plus 3.25% per annum until June 14, 2014,
3.75% per annum until September 14, 2014 and 4.25% until the full settlement of the CCB. The entire
CCB was settled in March 2014 along with the interest incurred.
(cc) On January 29, 2014 Eneva issued a Ita BBA CCB (Bank Credit Note) for R$ 80 million maturing
on January 19, 2016. The interest agreed was 100% of the CDI rate plus 3.15% per annum with
principal and interest due upon maturity.
Porto do Pecm Gerao de Energia SA (Pecm I)
(dd) By June 30, 2013 the BNDES had released R$ 1.40 billion of a long-term loan to Pecm I. The
BNDES financing agreement involves a total amount of R$ 1.41 billion (in nominal R$, excluding
interest during the construction), with a total term of 17 years, including 14 years for amortization
and a grace period for payment of interest and principal of until July 2012. The loan incurs LTIR +
2.77% p.a. The interest was capitalized during the construction phase. The balances of the principal
and interest stated in the table above refer to 50% of the original balances, and take into account the
50% interest of EDP Energias do Brasil S.A. in the company. This financing is secured by the
traditional guarantee for project finance loans.
(ee) To top up the direct loan from the BNDES, Pecm I has a direct loan from the Interamerican
Development Bank - BID ("A loan"), worth a total USD 147 million, of which USD 143.78 million has
been released thus far (equal to R$ 305,537 at March 31, 2014). The A Loan has an annual cost of
Libor + 3.5% and a total term of 17 years, with 14 years repayment and a grace period on the
principal of until July 2012. The balances of the principal and interest stated in the table above refer
to 50% of the original balances, and take into account the 50% interest of EDP Energias do Brasil
S.A.
Eneva S.A.
50
(ff) To top up the direct loan from the BNDES, Pecm I has an indirect loan from the Interamerican
Development Bank - BID ("B loan"), worth a total USD 180 million, of which USD 176 million has
been released thus far (equal to R$ 356,473 at March 31, 2014). The onlending banks are Grupo
Banco Comercial Portugus, Calyon and Caixa Geral de Depsito. The B Loan has a total term of 13
years and a cost of 3.0%, with 10 years repayment and a grace period on the principal until July
2012. The balances of the principal and interest stated in the table above refer to 50% of the original
balances, and take into account the 50% interest of EDP Energias do Brasil S.A.
MPX Chile Holding Ltda (MPX Chile)
(gg) On April 13, 2011 MPX Chile took out an offshore loan from Banco Credit Suisse, endorsed by the
parent company. The loan is denominated in US dollars amounting to USD 15 million (equal to
R$ 20,367 at March 31, 2014), charging fixed annual interest of Libor + 8.13%. The principal and
interest will be paid semi-annually, with a grace period for the principal until April 15, 2013 and the
contract expiring on April 15, 2015. The balances of principal and interest shown in the table above
account for 50% of the original balances.
(hh) On June 29, 2011 MPX Chile took out an offshore loan from Banco Credit Suisse, endorsed by the
parent company. The loan is denominated in US dollars amounting to USD 10 million (equal to
R$ 13,578 at March 31, 2014), charging fixed annual interest of Libor + 8%. The principal and
interest will be paid semi-annually, with a grace period for the principal until April 15, 2013 and the
contract expires on April 15, 2015. The balances of principal and interest shown in the table above
account for 50% of the original balances.
UTE Parnaba IV Gerao de Energia SA (Parnaba IV)
(ii) On April 29, 2013 the Parnaba IV project borrowed R$ 70 million under a CCB contract (Bank
Credit Note) with Banco BTG Pactual. Taken out to finance the construction of a natural gas thermal
power plant with Kinross Brasil Minerao S.A., this bridge loan incurs annual interest of the CDI
rate plus 2.28% per annum and matures on January 29, 2014, whereupon the principal and interest
is due. This loan was settled on maturity.
UTE Parnaba III Gerao de Energia SA (Parnaba III)
(jj) On November 25, 2013 the Parnaba III project secured a bridge loan from Banco Bradesco of
R$ 120 million, initially maturing on January 9, 2014. A new maturity date was agreed for January
31, 2014. The cost of the bridge loan is CDI plus 2.53% per annum. Principal and interest will be paid
at the end of the operation. A promissory note was issued to replace this loan on the same terms and
with a new maturity date of July 30, 2014.
The portions of the loans and financing classified in non-current liabilities at March 31, 2014 have
the following payment schedule:
Consolidated
Maturity
2015 846,666
2016 325,730
2017 282,009
2018 to final maturity 2,223,562
3,677,967
Eneva S.A.
51
Project finance is secured by guarantees including share pledges, statutory lien of rights and
receivables, statutory lien of the rights emerging from the project, conditional assignment of rights
and contracts, statutory lien of machinery and equipment, amongst others.
Financial covenants
Creditors involved in financial contracts use financial covenants in a number of debt contracts to
monitor the Company and its investees' financial situation.
The financing contracts relating to the ventures Porto do Pecm Gerao de Energia S.A., MPX
Pecm II Gerao de Energia S.A., UTE Porto do Itaqui Gerao de Energia S.A. and UTE Parnaba
Gerao de Energia S.A. have minimum debt service coverage indexes that measure the payment
capacity of the financial expense in relation to EBITDA. .
All the financial covenants had been met at March 31, 2014.
A number of financing contracts also have nonfinancial covenants, which are usual for the market
and have been summarized below. At March 31, 2014 all these covenants were being met.
Obligation to periodically submit financial statements to creditors.
Creditor rights to inspect and visit facilities.
Obligation to keep up with tax, social security and payroll obligations.
Obligation to maintain materially important contracts for its operations in force.
Comply with environmental legislation and keep any operating licenses necessary in force.
Contractual restrictions on related-party transactions and sales of assets outside the normal
course of business.
Restrictions on the change of share control, corporate restructuring and material changes to the
core activities and articles of association of the borrowers, and
Restrictions on debt ratios and the procurement of new debt.
No non-performance of financial and non-financial covenants were detected up to March 31, 2014.
16 Taxes and contributions payable
March 31,
2014
December 31,
2013
March 31,
2014
December 31,
2013
Corporate Income Tax - IRPJ 7 1,960
Social Contribution on Net Income - CSLL 773
Income Tax Withheld at Source - IRRF 60 6 8,891 6,286
ICMS 19 1 2,318 634
PIS, COFINS, IRRF and CSL 421 570 11,080 23,406
Tax on Financial Transactions - IOF 7 56 8 58
Others 62 76 12,476 15,550
Current 576 709 37,506 45,934
Eneva S.A.
52
17 Financial instruments and risk management
The management of these financial instruments is done through operating strategies and internal
controls, aimed at liquidity, profitability and security. The control policy consists of permanently
monitoring contract rates versus market rates. The Company and its subsidiaries do not invest in
derivative financial instruments or any other risky assets on a speculative basis. This is a
determination of the financial investment policy.
The estimated realization values of the financial assets and liabilities of the Company and its
subsidiaries were determined through information available in the market and appropriate valuation
methodologies. However, considerable judgment was required in the interpretation of the market
data to estimate the most adequate realization value. Consequently, the estimates below do not
necessarily indicate the values that could be realized in the current exchange market. The use of
different market methodologies may have a material effect on the estimated realizable values.
See below a description of the consolidated book balances for the financial instruments included in
the balance sheets at March 31, 2014 and December 31, 2013:
Parent company
March 31,
2014
December 31,
2013
Financial instruments Total Total
Assets
Loans and receivables
Cash and cash equivalents 19,694 110,157
Escrow deposits 39 38
Loans to subsidiaries 979,289 909,327
Accounts receivable from other related parties 12,542 217,337
Accounts receivable from subsidiaries 127,513 123,005
AFAC-with subsidiaries 136,295
Fair value through profit or loss
Gains on derivative transactions 13,207 4,171
Liabilities
Other financial liabilities
Trade payables 5,312 3,473
Loans and financing 2,128,485 2,217,628
Debentures 5,356 5,350
Debts with subsidiaries 5,560 4,444
Loans with other related parties 31,140 30,045
Stock options 354,025 350,514
Eneva S.A.
53
Consolidated
March 31,
2014
December 31,
2013
Financial instruments Total Total
Assets
Loans and receivables
Accounts receivable 344,704 294,396
CCC subsidy receivable 46,935 30,802
Escrow deposits 128,711 118,644
Loans to subsidiaries 246,305 191,968
Accounts receivable from other related parties 13,886 218,680
Accounts receivable from subsidiaries 131,615 117,372
Liabilities
Other financial liabilities
Trade payables 338,185
Loans and financing in R$ 6,098,862 6,210,520
Debts with subsidiaries 105,889 145,412
Debits with related parties 180,815 162,308
Contractual retentions 79,942
Stock options 354,025 350,514
The financial instruments measured at amortized cost and presented above are close to their market
values (fair value).
17.1 Fair value of financial instruments
The concept of fair value states that assets and liabilities should be valued at market prices, in the
case of liquid assets, or by using mathematical pricing methods, in other cases. The hierarchy level of
the fair value gives priority to unadjusted prices quoted on an active market. A part of the Company's
accounts has the fair value equal to book value, these accounts include cash equivalents, payables
and receivables, bullet debts and short-term.
Eneva S.A.
54
Consolidated
March 31, 2014
Prices
observable in
an active
market
Pricing with
observable
prices
Pricing
without
observable
prices
(Level I) (Level II) (Level III)
Loans and financing (5,705,981)
Stock options (354,025)
Derivatives 13,207
Balance at March 31, 2014 (6,046,799)
December 31,2013
Prices
observable in
an active
market
Pricing with
observable
prices
Pricing
without
observable
prices
(Level I) (Level II) (Level III)
Securities
Stock options (350,514)
Derivatives 4,171
Balance at December 31, 2013 (346,343)
17.2 Derivatives, hedges and risk management
The Company has a formal policy for financial risk management. The use of financial instruments for
hedging purposes is done through an analysis of the risk exposure (exchange and interest rates,
amongst others) and follows the strategy approved by the Board of Directors.
The protection guidelines are applied according to exposure type. The risk factors posed by foreign
currencies should be neutralized in the short term (within 1 year), and the protection may be
extended for longer. Decision taking regarding the risk posed by interest rates and inflation on
liabilities acquired will be assessed in terms of the economic and operational context and when
Management deems the risk to be material.
Eneva S.A.
55
17.2.1 Notional and fair value of derivative instruments
Forward currency contract - acquisition of US dollars (USD)
Maturity
Notional
USD MTM
Notional
USD MtM
Eneva S.A.
Long position USD (purchased)
Morgan Stanley 59,207 4,171
Total USD 59,207 4,171
Swap Cross-Currency
Maturity Notional Assets Liabilities MTM Notional MtM
Eneva S.A.
Libor USD | DI
Citibank September 27, 2017 101,250 115,058 101,851 13,207 101,250 15,650
Total Swap 101,250 115,058 101,851 13,207 101,250 15,650
17.2.2 Market risks
Risk of change in commodity prices, exchange rates and interest rates.
17.2.2.1 Risk of oscillation in commodity prices
In Eneva's case, this risk is exclusively posed by the coal price, which is recorded, according to the
formation of inventory for generating energy in the thermoelectric power plants.
The inventory coal price is established and will be converted into revenue, according to the
remuneration for the energy generation, according to the PPA rules
1
. The period between the
purchase of the cargo and its use for generating energy constitutes the price change risk incurred by
the thermoelectric power plant.
(a) Risk management
The coal price risk is managed by structuring hedge transactions in the future coal market without
physical settlement. Eneva is seeking resources in the domestic market - whose market for this type
of operation is still incipient - to mitigate the risk posed by its coal inventory by structuring hedges
during 2014.
17.2.2.2 Exchange risk
Risk of change in exchange rates which could be associated to the Company's assets and liabilities.
1
The Multiyear Plan (PPA) is the planning instrument that establishes the regional guidelines, objectives and
targets of the Public Administration for a period of four years.
Eneva S.A.
56
(a) Risk management
The Company manages the exchange risk on a consolidated basis for its companies to detect and
mitigate risks posed by changes in exchange rates underlying global assets and liabilities. The aim is
to detect or create natural hedges, taking advantage of the synergy between the companies'
operations, thereby minimizing the use of derivatives. Derivative instruments are used in cases
where natural hedges cannot be taken advantage of.
(b) Investment in fixed assets (capex)
The revenue of Eneva's consolidated energy generating units is denominated in reais. Part of the
investment made in fixed assets is also paid in foreign currency, primarily US dollars and euros. The
volumes and terms of these payments do not generally require the structuring of hedge transactions.
The Company is currently mapping out the payments in foreign currencies - based on historic and
future entries, in order to establish an average amount and terms, thereby ensuring control over the
related foreign currency exposure.
(c) Coal inventory
The Company goes long when forming its coal inventory for its thermal power plants, which in turn
is determined in the international market in US dollars. The Company consequently also assumes a
long position in US dollars, generally creating a mismatch between its assets and liabilities. As
mentioned earlier for the coal price risk, the Company is studying hedge mechanisms against the
market risks posed by coal purchases. In other words, the commodity price hedge and the exchange
risk hedge will be structured simultaneously.
(d) Loans and financing
The Company has foreign exchange exposure on its financial liabilities, deriving from transactions in
US dollars by its subsidiaries. Eneva's 50.00 million dollar loan is translated into reais for
restatement via the DI rate via a cross-currency swap. The result and sensitivity analysis of the
operation are shown below.
Scenario I Scenario II
Risk for the position Fair value
(25%
increase)
(50%
increase)
Eneva S.A.
Cross-Currency Swap (hedge) US Dollar devaluation 115,058 143,822 172,587
Dollar loan US Dollar valuation (115,058) (143,822) (172,587)
Net exposure
(*) The valuation does not denote the total exposure in the currency or the overall loss posed by
this exposure.
Reference rate: PTAX 800 Venda (2.2630 on March 31, 2014) of the Brazilian Central Bank
Scenario I: adverse change of 25% (increase in foreign exchange rate to generate loss in a short
position)
Scenario II: adverse change of 50% (increase in foreign exchange rate to generate loss in a short
position)
Eneva S.A.
57
(e) Operations hedged by derivative instruments
US Dollar loan at UTE Porto do Pecm
Hedge accounting
The investment in capex of Energia Pecm (construction of the thermal power plant) will consist of
75% long-term financing, partly in US dollars, and 25% of company capital. The long-term financing
agreements were signed with the Inter-American Development Bank ("BID") and the National Social
and Economic Development Bank ("BNDES") on July 10, 2009. To finance its capex requirements in
the period prior to July 10, 2009 it was necessary to take out a bridge loan from Citibank, which will
be repaid using funds provided under these financing agreements.
As most of the investment is denominated in US dollars and Euros and its future revenue will be
generated in Brazilian reais, derivative instruments have been taken out for hedge purposes. On
April 1, 2009 the Company used hedge accounting in order to hedge against the exchange variance
on the long-term US dollar financing loans taken out from IDB. The derivative instrument used is an
NDF maturing in October 2012 with a notional value of USD 327 million. (USD 163.5 million equal
to 50% of the interest of Eneva S.A.). This NDF was rolled over on September 25, 2012 with a
notional value of USD 327 million and maturing between November 2012 and May 2015.
As this is hedge accounting classified as cash flow, changes in the fair value of derivative instruments
designated as cash flow hedges are recognized directly in shareholders' equity for the amount of the
hedge that is considered effective. The difference between the fair value and the exchange variance is
the ineffective portion which is therefore recognized in the statement of operations.
This bridge loan was settled on October 30, 2009. USD 260 million was released on this date
consisting of the first part of the long-term funding from BID and the adjustment to present value
(AVP) was calculated based on the USD 67 million yet to be disbursed by the BID (before this
release, the AVP was calculated based on the exposure of USD 169 million relating to the difference
in the contracted derivative of USD 327 million and the bridge loan of USD 158 million). USD 50
million was released on August 31, 2010 referring to the second portion of the IDB long-term
financing, and the AVP accordingly began to be calculated based on the outstanding USD 17 million,
not yet disbursed by IDB. USD 9 million was released on February 4, 2011 referring to the third
portion of the IDB long-term financing, and the AVP accordingly began to be calculated based on the
outstanding USD 7 million, not yet disbursed by IDB.
The impacts of the gains and losses of this hedge accounting transaction in the period were as
follows:
2014
Net income
Shareholders'
equity
Hedge derivatives
Derivative gains (losses) (870 ) 574
Eneva S.A.
58
2013
Net income
Shareholders'
equity
Hedge derivatives
Derivative gains (losses) (3,465 ) 2,287
On April 1, 2011 the Company used hedge accounting in order to hedge against the Libor interest for
the amortization period on the long-term US dollar financing loans taken out from IDB. The
derivative instrument designated for this relation is an interest-rate cash-flow float/fixed maturing
between October 2012 and October 2024, whose notional amounts refer to the expected
accumulated disbursement tranches of the long-term interest owed to IDB.
As this is hedge accounting classified as cash flow, changes generated by the MTM (mark-to-market)
variance, net of the interest provided for up to the base date, are recognized directly in shareholders'
equity in an equity valuation adjustment account. The difference between the fair value and the
Libor rate is the ineffective portion which is therefore recognized in the statement of operations.
The impacts of the gains and losses of this hedge accounting transaction in the period were as
follows:
2014
Net income
Shareholders'
equity
Hedge derivatives
Derivative losses (887 ) 585
2013
Net income
Shareholders'
equity
Hedge derivatives
Gain on derivatives (13,776 ) 9,092
17.2.2.3 Interest rate risk
Risk of shifting of the interest structure that could be associated with the payment flows of the debt
principal and interest.
(a) Cash flowrisk related to floating interest rates
There is a financial risk associated with floating rates that could increase the future value of the
financial liabilities. The common risk is uncertainty about the interest futures market, which makes
payment flows unpredictable. In loss scenarios, the interest forward rises, thereby increasing the
liability's value. Alternatively, the company's liabilities could diminish if the rates fell.
Eneva S.A.
59
More than 90% of Eneva and its subsidiaries' liabilities are indexed to floating interest in the
interbank deposit segment (DI) and the long-term interest rate of the BNDES (TJLP), and in the
inflationary segment with restatement according to the IPCA price index.
The debt that incurs the interbank deposit rate is allocated as short-term. 76.71% of the 2.76 billion
reais will be repaid by the end of 2014 and the remainder by the first half of 2015. The volatility
posed by this risk factor is therefore substantially reduced.
The BNDES facilities restated by the IPCA and TJLP price indexes - which also contain a strong
inflation component - are part of a special credit segment posing low volatility and therefore a low
probability of abrupt changes in rates. As this is a specific segment, caution should be exercised in
respect of interference and hypotheses in statistical models in the attempt to map out and make
projections about this segment in order to quantify the hypothetical related losses. Furthermore, the
companies' assets consisting of the revenue will also be restated by the same rates, which
substantially reduces the mismatch between asset and liability rates.
Interest rate sensitivity
The debt restated by the interbank deposit rate - DI had a principal of R$ 1.96 billion and balance of
R$ 2.01 billion at March 31, 2014. 78.00% of this will be repaid by the end of 2014 and 96.00% by
the first half of 2015. The volatility posed by this risk factor is therefore substantially reduced.
However, as this is a floating rate in a scenario of rising interest rates, see below the financial loss if
the interest rate curve were shifted by 25% and 50%, respecting the payment terms of each facility.
At December 31, 2013 the debts of the Company and its subsidiaries are primarily linked to the
change in the CDI interest rate. Given the current upward trend in interest rates, a plausible change
in interest rates from 10% to 11.5% per annum would incur an additional financial expense of
R$ 93,157 in 2013, all other variables remaining constant. With a stress of 25% and 50%, this
financial expense would amount to R$ 116,447 and R$ 139,737 respectively.
Risk
Future
market
value
Future
value
(25%
increase)
Future
value
(50%
increase)
Eneva S.A.
Cash flow risk related to Increase in interest rate 2,907,056 2,974,992 3,033,249
Liability indexed to CDI
Outstanding (Principal + Interest) 2,907,056 2,974,992 3,033,249
Increase in financial expense 67,936 126,193
(*) The scenarios do not reflect the Company's projections for interest rates.
This assessment merely aims for compliance with the legislation.
Method: parallel upwards shift in DI rate of 25% and 50%
17.2.3 Credit risk
This arises from the possibility of the Company and its subsidiaries suffering losses due to the
default of their counterparties or of financial institutions where they have funds or financial
investments. This risk factor could derive from commercial operations and cash management.
Eneva S.A.
60
To mitigate these risks, the Company and its subsidiaries have a policy of analyzing the financial
position of their counterparties, as well constantly monitoring outstanding accounts.
The Company has a Financial Investment Policy, which establishes investment limits for each
institution and considers the credit rating as a reference for limiting the investment amount. The
average terms are continually assessed, as are the indexes underlying the investments, in order to
diversify the portfolio. The maximum exposure to credit risk is denoted by the balance of short-term
investments.
Consolidated
March 31,
2014
December 31,
2013
Positions of credit risk
Trade receivables 344,703 294,396
Escrow deposits 128,711 118,644
Consolidated credit accounts 630,357 725,595
The cash and cash equivalents substantially consists of the current account and investment fund at
Ita S.A., a first-rate bank and in relation to accounts receivable its main exposure derives from the
possibility of the Company incurring losses due to problems in realizing receivables. To mitigate this
type of risk and to help manage default risk management, the Company monitors the accounts
receivable realizing several collection proceedings. Furthermore, the Company's customers have
signed an assurance of full performance of the contractual obligations.
17.2.4 Liquidity risk
The Company and its subsidiaries monitor their liquidity levels, based on expected cash flows versus
the amount of cash and cash equivalents at hand. Managing the liquidity risk means maintaining
cash, sufficient securities and capacity to settle market positions. The amounts recognized at
December 31, 2013 approach the operations' settlement values, including estimated future interest
payments (see Note 1).
Consolidated
March 31, 2014
(Restated)
Up to 6 6 to 12 1 to 2 to Over Total
months months 2 years 5 years 5 years by account
Liabilities
Related parties 286,274 430 286,704
Loans and financing 844,470 2,401,889 949,760 1,297,788 2,620,561 8,114,468
Debentures 751 4,605 5,356
Contractual retention 79,942 79,942
Financial derivative
instruments 2,866 2,693 4,221 9,780
1,471,795 2,485,275 959,016 1,297,788 2,620,561 8,834,435
Eneva S.A.
61
Consolidated
December 31,2013
Up to 6 6 to 12 1 to 2 to Over Total
months months 2 years 5 years 5 years by account
Liabilities
Related parties 306,545 306,545
Loans and financing 676,967 2,570,541 1,079,040 1,324,391 2,696,265 8,347,204
Contractual retention 84,789 84,789
Financial derivative
instruments 3,971 2,725 4,694 11,390
1,012,154 2,658,055 1,390,279 1,324,391 2,696,265 9,081,144
18 Provision for contingencies
The Company and its subsidiaries are not party to judicial proceedings, involving labor and tax
issues rated as a probable loss, and no provision was therefore made for them.
The Company and its subsidiaries are party to judicial proceedings, involving labor and civil issues to
the estimated amount of R$ 110,629 (R$ 108,773 at December 31, 2013). Their legal advisors rate the
proceedings as a possible loss, and management does not believe it is necessary to record a provision
for them.
Downtime Costs (ADOMP)
On January 7, 2014 Pecm I and Itaqui filed legal proceedings against Aneel contesting the
calculation of downtime, as the CCEARs stipulate the use of a mobile average of 60 months of
effective uptime.
On January 24, 2014 the 15th Federal Court of the Federal District awarded an injunction to the
Pecm I and Itaqui plan suspending the payment for downtime, based on the time calculated, with
immediate effect.
The legal proceeding against Aneel is also claiming reimbursement of the amounts paid since the
commencement of the CCEARs.
19 Shareholders' equity
At March 31, 2014 and December 31, 2013 respectively, the Company's share capital consists of
702,524,469 (seven hundred and two million five hundred and twenty-four thousand, four hundred
and sixty-nine) nominative common shares, with no par value and the authorized capital is 1.2
billion book-entered common shares with no par value.
Eneva S.A.
62
At March 31, 2014 the Company's share capital was R$ 4,532,314 (R$ 4,532,314 at December 31,
2013), consisting of common shares distributed as follows:
2014 %
March 31,
2014 %
Shareholder
Eike Fuhrken Batista 145,704,988 20.7 145,704,988 20.7
Centennial Asset Mining Fund LLC (*) 20,208,840 2.9 20,208,840 2.9
Centennial Asset Brazilian Equity
Fund LLC (*) 1,822,065 0.3 1,822,065 0.3
E.ON 266,269,556 37.9 266,269,556 37.9
BNDESPAR 72,650,210 10.3 72,650,210 10.3
Others 195,868,810 27.9 195,868,810 27.9
702,524,469 100 702,524,469 100
(*) Controlled by Eike Fuhrken Batista.
The changes in the share capital up to March 2014 have been summarized below:
Quantity Share capital
Date of shares (R$ thousand) Description
December 2012 578,241,732 3,731,734 Opening balance
January 2013 147,480 232 Capital increase - company plan
February 2013 27,000 95 Capital increase - company plan
April 2013 34,500 114 Capital increase - company plan
May 2013 29,250 99 Capital increase - company plan
September 2013 124,031,007 800,000 Capital increase
October 2013 13,500 40 Capital increase - company plan
March 31, 2014 702,524,469 4,532,314 Closing balance
The Company's capital was increased in January 2013 by the Board of Directors' meeting held
January 10, 2013, ratifying the issuance of 147,480 new common shares, with no par value, resulting
from the exercising of stock options awarded under the Company's stock options program. The
number of Company shares accordingly changed to 578,389,212.
The Company's capital was increased in February 2013 by the Board of Directors' meeting held
February 6, 2013, ratifying the issuance of 27,000 new common shares, with no par value, resulting
The Company's capital was increased in April 2013 by the Board of Directors' meeting held April 5,
2013, ratifying the issuance of 34,500 new common shares, with no par value, resulting from the
exercising of stock options awarded under the Company's stock options program. The number of
Company shares accordingly changed to 578,450,712.
The Company's capital was increased in May 2013 by the Board of Directors' meeting held May 8,
2013, ratifying the issuance of 29,250 new common shares, with no par value, resulting from the
exercising of stock options awarded under the Company's stock options program. The number of
Company shares accordingly changed to 578,479,962.
Eneva S.A.
63
On September 16, 2013 the Board of Directors' meeting ratified the Company's capital increase, as
approved by the Board of Directors' meeting on July 3, 2013, of R$ 799,999,995.15, within the
authorized capital limit, as a result of the subscription and full payment of the 124,031,007 new
common registered shares with no par value. The number of Company shares accordingly rose from
578,479,962 to 702,510,969.
The Company's capital was increased in October 2013 by the Board of Directors' meeting held
October 21, 2013, ratifying the issuance of 13,500 new common shares, with no par value, resulting
20 Earnings per share
Basic and diluted earnings per share
The basic and diluted earnings per share were calculated by dividing the earnings of the year
attributable to the controlling and noncontrolling shareholders of the Company at March 31, 2014
and 2013 and the respective average number of common shares in circulation, as per the table below:
Common Total Common Total
Basic and diluted numerator
Loss attributable to shareholders
parent companies (71,931 ) (71,931 ) (250,901 ) (250,901 )
Basic and diluted denominator
Weighted share average 640,131,923 640,131,923 578,416,212 578,416,212
Loss per share (R$) - basic (0.1124) (0.1124) (0.4338) (0.4338)
At March 31, 2014 and 2013 there is no material difference between the loss per basic and diluted
share.
21 Share-based remuneration plan
The Company's stock options are as follows:
Parent company
and consolidated
March 31,
2014
December 31,
2013
Stock options granted - Shareholders' Equity
Granted by Company 38,478 36,231
Granted by Controlling shareholder 315,547 314,283
354,025 350,514
Eneva S.A.
64
Parent company
and consolidated
March 31,
2014
December 31,
2013
Expenses incurred on share options awarded 3,511 5,714
The stock option plans were released in two different modalities: the primary plan, which consists of
awarding call options, resulting in the issuance of new shares by the Company or the assignment of
treasury stock; and secondary plans consisting of options offered by the shareholder to Company
executives, which in this case does not entail a dilution of the share capital.
(a) Stock option granted by the Company
The Company awarded stock option plans for its own stock to beneficiaries providing services to it.
The Extraordinary General Meeting held November 26, 2007 approved the Stock Purchase Option
Program, which was recorded in the minutes as an Appendix. The same date share options were
awarded to the Company's executives.
The plan entailed the right to acquire 175,900 shares, following the share split on July 17, 2009,
awarded to 5 participants in equal amounts, subject to the individuals remaining at the Company for
5 years in order to exercise all of their rights.
The Options Program consists of the right to acquire a certain amount of Company shares, awarded
to the program's beneficiary, at a given strike price per share - or purchase price per share - which
has to be exercised in a period or by a deadline.
The plan's regulations state that the Company's Board of Directors should determine the amount of
shares to be awarded, the strike prices, maturity terms and expiry dates of the rights.
On the date the right is exercised, the shares sold to the plan beneficiary should be subscribed again
or placed in the treasury. The Company's other shareholders do not have subscription rights to the
shares allocated to the option plans.
The Extraordinary General Meeting held December 7, 2007 approved the grouping of the Company's
shares, by which 22 shares were grouped into 1 common share. The Extraordinary General Meeting
held July 17, 2009 subsequently approved the splitting of the Company shares, by which each
common share on that date was split into 20 common shares. A further split was approved on
August 15, 2012, whereby each common share was split into 3 common shares. These events led to
an adjustment in the quantity and strike price of the options under the plans awarded.
The minutes from the Extraordinary General Meeting held September 28, 2010 documented the
extension to the Company's stock options program to December 31, 2015.
Options were again awarded to executives on December 1, 2010, subject to the individuals remaining
at the company for 7 years.
The Extraordinary General Meeting held April 26, 2011 approved the increase to the maximum
percentage of shares that can be allocated to the Stock Options Program, to 2% of the Company's
total shares.
Eneva S.A.
65
The EGM held January 26, 2012 updated the Plan's contract and new beneficiaries were included,
although for a vesting date of November 24, 2011.
On May 24, 2012 the split-off was approved to CCX Carvo da Colmbia S.A., which accounted for
20.69% of the Company's assets. Following the split-off the share value was reduced by the same
proportion. To maintain the value of the options awarded, a discount was awarded in the strike price
of options not exercised by the date the two companies were split-off.
A further 75,000 options were awarded on May 31, 2012. Three more batches were awarded in the
3rd quarter of 2012, totaling 165,000 options.
Ten blocks of options had therefore been awarded by December 31, 2013, segregated as follows (*):
Plan 1: 528,000 options awarded on November 26, 2007;
Plan 2: 3,300,000 options on December 1, 2010;
Plan 2.1: 30,000 options on April 27, 2012 - the second block of Plan 2;
Plan 2.2: 60,000 options on June 2, 2012 - the third block of Plan 2;
Plan 3: 2,098,500 options on November 24, 2011;
Plan 3.1: 225,000 options on May 31, 2012 - the second block of Plan 3;
Plan 3.2: 52,500 options on July 10, 2012 - the third block of Plan 3;
Plan 3.3: 22,500 options on July 20, 2012 - the fourth block of Plan 3;
Plan 3.4: 90,000 options on August 1, 2012 - fifth block of Plan 3; and
Plan 3.5: 3,000,000 options on December 13, 2012 - the sixth block of Plan 3.
(*) amounts and strike prices after the split on August 15, 2012 and split-off of CCX.
The table below denotes the general terms of the options awarded by the Company.
Plan
Date
awarded
Vesting
period
(years)
Initial date
of maturity
Date
rights
expire
Original
amount
awarded
(
a
)
Original
strike
price (
a
)
Strike price
restated by
IPCA(
b
)
Plan 1 11.26.2007 5 11.26.2008 11.26.2013 528,000 0.76 -
Plan 2 12.1.2010 7 12.14.2011 12.14.2018 3,300,000 2.97 3.87
Plan 2.1 4.27.2011 7 4.27.2013 4.27.2020 30,000 4.13 -
Plan 2.2 6.2.2012 7 6.2.2013 6.2.2020 60,000 2.97 -
Plan 3 11.24.2011 7 11.24.2012 11.24.2019 2,098,500 5.14 5.92
Plan 3.1 5.31.2012 7 5.31.2013 5.31.2020 225,000 5.14 5.76
Plan 3.2 7.10.2012 7 7.10.2013 7.10.2020 52,500 3.91 4.38
Plan 3.3 7.20.2012 7 7.20.2013 7.20.2020 22,500 4.13 4.63
Plan 3.4 8.1.2012 7 8.1.2013 8.1.2020 90,000 4.23 4.72
Plan 3.5 12.13.2012 7 12.13.2013 12.13.2020 3,000,000 4.53 4.91
Total 9,406,500
(a) Amounts and strike prices after the split on August 15, 2012 and split-off of CCX.
Eneva S.A.
66
The table below shows the changes in the options plan in FY 2013.
Plan awarded by the Company -
number of stock options Plan 1 Plan 2 Plan 2.1 Plan 2.2 Plan 3 Plan 3.1 Plan 3.2 Plan 3.3 Plan 3.4 Plan 3.5
Balance at December 31, 2013 1,776,000 1,520,100 225,000 52,500 22,500 60,000 2,900,000
Exercised
Cancelled (36,000) (95,850) (50,000)
Awarded
Expired
Balance at March 31, 2014 1,740,000 1,424,250 225,000 52,500 22,500 60,000 2,850,000
To determine the fair value of the options the Merton model (1973)
1
was used, which is a variant of
the Black & Scholes (1973)
2
model which considers dividend payments. A number of assumptions
were made for the model's entry variables. Like:
the share price at the measurement date
the instrument's strike price
the expected volatility
expected dividends
the instruments' term, and
risk-free interest rate.
To calculate the expected volatility the continuous returns from the price history of the share were
used (based on the past volatility, adjusted for changes expected due to information publicly
available). The time window for estimating the expected volatility was the same as the option's term,
or the longest term available, when the trading history of the Company's share was shorter than the
expected term.
The risk-free interest rate was based on public securities and interest rate curves published by
BM&FBovespa.
Service conditions and performance conditions outside the market inherent to the transactions are
not taken into account when determining fair value.
The table below shows the assumptions made to calculate the fair value of the options awarded by
the Company:
Fair value assumptions Plan 2 Plan 2.1 Plan 2.2 Plan 3 Plan 3.1 Plan 3.2 Plan 3.3 Plan 3.4 Plan 3.5
Number of exercisable options (matured) 217,500 158,250 22,500 5,250 2,250 6,000 285,000
Average outstanding term (years) 3.13 3.70 3.82 3.93 3.96 3.99 4.37
Fair value of options awarded in R$ (
a
) 0.19 0.13 0.15 0.22 0.21 0.20 0.23
Price of the share in R$ (
b
) 1.63 1.63 1.63 1.63 1.63 1.63 1.63
Strike price of the options in R$ (
c
) 3.87 5.92 5.76 4.38 4.63 4.72 4.91
Average expected volatility (per annum) (
d
) 50.5% 50.5% 51.6% 50.4% 50.4% 50.5% 49.9%
Risk-free interest rate (per annum) (
e
) 5.85% 6.09% 6.13% 6.10% 6.11% 6.12% 6.16%
Effects on net income in the period in R$ k 428 537 85 17 8 23 1,149
Intrinsic value in R$ k (
f
)
(a) Calculation of the options' fair value based on the Merton model (1973).
(b) The closing price of the share ENEV3.
1
MERTON, R. Theory of Rational Option Pricing. Bell Journal of Economics and Management Science, 4
(Spring 1973), 141-83
2
BLACK, F.; SCHOLES, M. The pricing of options and corporate liabilities. Journal of Political Economy,
Chicago, v. 81, p. 637-654, 1973
Eneva S.A.
67
(c) Strike prices of the options restated by the IPCA price index.
(d) To calculate the volatility of the share the continuous returns from the price history of the share
ENEV3 were used.
(e) Reference rate to adjust the SWAP contracts for the IPCA coupon disclosed by BM&FBOVESPA.
(f) A value of zero is used when the options' intrinsic value is negative.
(b) Stock options granted by the Shareholder
The Plans awarded by the shareholder includes call options granted to executives of the Company.
This plan is a means of remunerating and retaining managers and executives who the shareholder
views as key players in the Company's success. These options do not generate any dilution for the
other shareholders.
There is no preapproved schedule for this plan, unlike the Company's plan. The shareholder awarded
the plan to employees based on individually negotiated contracts.
As is the case in the plan awarded by the Company, in order to receive each batch, employees must
remain at the Company until the respective maturity date.
The table below shows the overall characteristics of the plan awarded by the shareholder.
Plan
Date
awarded
Vesting
period
(years)
Initial date
of maturity
Date
rights
expire
Original
amount
awarded
Original
strike price
Shareholder 4.28.2008 5 12.13.2008 12.13.2013 3,354,120 0.01
Shareholder 4.28.2008 10 12.13.2008 12.13.2018 20,198,040 0.01
23,552,160
The table below consolidates the change in stock options in FY 2013:
Plan awarded by the Shareholder -
number of stock options
Shareholder
Plan
Balance at December 31, 2013 2,904,812
Exercised
Cancelled
Awarded
Expired
Balance at March 31, 2014 2,904,812
Eneva S.A.
68
The table below shows the assumptions made to calculate the fair value of the options awarded by
the Shareholder:
Fair value assumptions
MPX
Shareholder
Plan
Number of exercisable options (matured) 322,652
Average outstanding term (years) 2.74
Fair value of options awarded in R$ (
a
) 1.60
Price of the share in R$ (
b
) 1.63
Exercise price of the options in R$ 0.01
Average expected volatility (per annum) (
c
) 52.20%
Risk-free interest rate (per annum) (
d
) 12.20%
Effects on net income in the period in R$ (thousand) 1,264
Intrinsic value R$ (thousand) 4,706
(a) Calculation of the options' fair value based on the Merton model (1973).
(b) The closing price of the share ENEV3.
(c) To calculate the volatility of the share the continuous returns from the price history of the share
ENEV3 were used.
(d) Reference rate to adjust the SWAP contracts for a fixed rate disclosed by BM&FBOVESPA.
22 Operating revenue
The reconciliation between the gross revenue and the net revenue recorded in the statement of
operations for the period/year is as follows:
Consolidated
March 31,
2014
December 31,
2013
Gross revenue 656,588 217,569
Minus
Sales taxes (69,816) (21,471 )
Total net revenue 586,772 196,098
The increase seen above was due to the commercial start-up of the Itaqui, Pecm II and Parnaba
plants during the course of 2013.
Eneva S.A.
69
23 Costs and expenses by nature
March 31,
2014
December 31,
2013
March 31,
2014
December 31,
2013
Depreciation and amortization (525) (453) (48,711) (17,895)
Personnel expenses (9,775) (5,407) (24,800) (19,889)
Outsourced services (11,925) (9,796) (53,272) (17,769)
Rental expenses (1,348) (1,080) (99,981) (17,117)
Expenses incurred on stock options awarded (3,512) (5,714) (3,512) (5,714)
Provision for Investment Devaluation (165) 3 (6,718) 3
Provision for Unsecured Liabilities 36 (1,040) 110 (973)
Cost per Downtime Incident (32,353)
Material (3,813) (1,010)
Insurance (5,739) (545)
Other expenses 20,631 (1,249) (3,471) (27,973)
Consumables (227,875) (90,207)
CCC Incentive 15,286 19,207
Electricity for resale (26,995) (172,766)
(6,583) (24,737) (521,845) (352,648)
Classified as:
Cost (494,779) (312,608)
Administrative and general expenses and stock
options granted (6,583) (24,736) (27,066) (40,040)
The increase seen above was due to the commercial start-up of the Itaqui, Pecm II and Parnaba
plants during the course of 2013.
24 Finance result
The Company's financial income is as follows:
March 31,
2014
December 31,
2013
March 31,
2014
December 31,
2013
Finance costs
Commission on bank guarantees
Bank expenses (75,421 ) (23,348) (149,417) (58,088)
Monetary variance (15,149) (1,981) (16,012) (2,263)
Loss on derivative transactions (2,831) (2,250)
Debenture interest/cost (211) (213) (211) (214)
Fair value of debentures
Financial Advisory Services
Others (2,315) (17,118) (9,170) (27,714)
(93,096) (45,491) (174,810 ) (90,528)
Finance income
Short-term investments 34,519 13,268 19,239 9,876
Monetary variance 19,137 3,407 21,368 3,888
Gains (losses) on derivative transactions 9,036 (1,443) 9,036 (1,443)
Fair value of debentures (251) (251 )
Others 61 1 874 631
62,754 14,981 50,517 12,701
Net finance costs (30,342) (30,509) (124,293) (77,827 )
Eneva S.A.
70
25 Commitments undertaken
The main commitments undertaken with suppliers of goods and services are the following:
Company Supplier Subject matter of contract Signature Term
Total
contracted
on March 31,
2014
Balance of
contract
March 31,
2014
Balance of
contract
December 31,
2013
Mpx P II
AVIPAM TURISMO E TECNOLOGIA LTDA Purchase of Flights/Accommodation 12.11.2012 5.31.2014 720 412 416
Mpx P II
BANCO BANKPAR SA Supply of accommodation 12.11.2012 12.10.2014 1,360 773 853
Mpx P II
BRASLIMP TRANSPORTES ESPECIALIZADOS LTDA
Collection, transportation and disposal of Class II fluid waste
(lime water) and Class II in general 11.5.2013 5.4.2014 882 804 882
Mpx P II
CAL TREVO INDUSTRIAL LTDA Supply of Burnt Lime 5.2.2013 5.1.2015 1,119 1,119 1,119
Mpx P II
CARBOMIL QUIMICA S.A Supply of Burnt Lime 7.29.2013 5.6.2015 6,000 5,127 5,249
Mpx P II COMPANHIA DE INTEGRACAO PORTUARIA DO
CEARA CEARAPORTOS
Regulation of the movement of solid bulk at the Pecm Port
Terminal 6.29.2012 1.1.2025 7,674 6,092 763
Mpx P II COMPANHIA DE INTEGRACAO PORTUARIA DO
CEARA CEARAPORTOS Supply of Electricity to the Port 8.7.2012
Not
determined 2,400 1,532 1,658
Mpx P II
E ON GLOBAL COMMODITIES SE Supply of coal 10.2.2013 1.9.2014 26,700 9,255 9,255
Mpx P II
E ON GLOBAL COMMODITIES SE Supply of coal 1.2.2014 12.31.2014 109,179 83,281 -
Mpx P II
EBM CONSULTORIA E INVESTIMENTOS LTDA
Technical consultancy services for obtaining long-term financing from
the Banco do Nordeste do Brasil S.A. (BNB). 1/29/2010
Not
determined 4,428 1,757 1,757
Mpx P II
ELETROMECANICA CAPISTRANO EIRELI-ME
Services for supporting the commissioning and maintenance
of turbine 03 9.18.2013 1.31.2014 3,300 298 854
Mpx P II
ELETROMECANICA CAPISTRANO EIRELI-ME
Specialist labor services for the maintenance and operation of
UTE Pecem II. 1.24.2014 12.31.2014 4,800 4,179 -
Mpx P II FORNECEDORA MAQUINAS E EQUIPAMENTOS
LTDA
Provision for Coal Spreading, Stacking and Compacting of
Coal in the Yard. 8.7.2012 6.26.2014 2,251 167 732
Mpx P II
FORSHIP ENGENHARIA S/A
Technical commissioning services at the Pecm II thermal
power plant 1.2.2013 7.21.2014 8,500 1,651 1,596
Mpx P II
GUIMAR ENGENHARIA S.A. Support for project closure process management 9.28.2012
Not
determined 2,000 303 449
Mpx P II
ICAL INDUSTRIA DE CALCINAO LTDA Supply of Burnt Lime 8.9.2013 4.22.2015 786 786 786
Mpx P II
MINERAO BELOCAL LTDA Supply of Burnt Lime 9.3.2013 5.1.2015 941 347 941
Mpx P II
MINERAO LAPA VERMELHA LTDA Supply of Burnt Lime 9.9.2013 2.28.2015 1,871 388 871
Mpx P II
MONSERTEC MANUTENCAO INDUSTRIAL LTDA
Maintenance support for scaffolding, thermal insulation and
industrial paintwork 10.28.2013 10.27.2015 1,440 1,040
Mpx P II NUTRINOR RESTAURANTES DE COLETIVIDADE
LTDA Provision of meals - breakfast, lunch, dinner and supper 12.7.2012 1.10.2014 571 129 175
Mpx P II
NATIONAL ELECTRIC SYSTEM OPERATOR - ONS Transmission services between concession operators and Mpx 2.8.2013
Not
determined 25,601 4,195 10,589
Mpx P II
OPCAO CONSTRUCOES E SERVICOS LTDA Services for raising slopes of the coal yard 5.22.2014 1,063 823
Mpx P II PORTO DO PECEM TRANSPORTADORA DE
MINERIOS S/A
Product unloading services for ships moored at the terminal
and shipment to the point of delivery 3.26.2012 12.31.2016 6,950 4,885 5,632
Mpx P II
REX EMPREENDIMENTOS IMOBILIARIOS LTDA Property rental 1.1.2009 11.27.2042 45,283 39,178 39,592
Mpx P II RH CLEAN SERVICOS PROFISSIONAIS DE LIMPEZA
LTDA
Cleaning Services of the Coal Transfer Towers 1.8.2013 12.31.2014 1,263 844 1,102
Mpx P II
RH CLEAN SERVICOS PROFISSIONAIS DE LIMPEZA
LTDA
Provision and availability of 3 financial assistants, 1
administrative assistant, 1 supply assistant and 1 supplies
analyst 7.2.2012 3.31.2014 750 22 41
Mpx P II RH CLEAN SERVICOS PROFISSIONAIS DE LIMPEZA
LTDA
warehouse services at the facilities at Usina Termeltrica Porto
do Pecm II. 1.31.2015 583 583
Mpx P II
RIP SERVIOS INDUSTRIAIS LTDA Specialist Labor for Pre-assembly of Metal Structures 9.24.2013 1.31.2014 7,500 107 4,163
Mpx P II
SS&B CONSTRUTORA LTDA construction of the ash yard - 2nd yard 7/17/2014 4,866 3,480
Mpx P II
SUPRICEL LOGISTICA LTDA Burnt Lime Shipping Services 8.9.2013 4.22.2015 6,112 2,306 4,826
Mpx P II
TDG - TRANSMISSORA DELMIRO GOUVEIA S/A Connection Bay 9.22.2011
Not
determined 1,020 926
Mpx P II
ENVIRONMENTAL COMPENSATION Semace 9.5.2008
Not
determined 4,850 1,500 1,500
ITAQUI
MABE Construction of UTE-EPC 1.27.2008 Indefinite 144,144.00 5,960.00 2,738.00
ITAQUI
Tecnometal Supply of coal conveyor transportation system 7.24.2009 7.31.2014 130,757.00 31,967.00 27,926.00
ITAQUI
Guimar Engenharia Works management services 5.7.2010 7.31.2014 5,956.00 51.00 171.00
ITAQUI
Carbomil Supply of Burnt Lime 1.1.2012 7.6.2015 30,000.00 26,798.00 26,798.00
ITAQUI
EMS Silvestrini Maintenance, Industrial Cleaning and Industrial Support 1.1.2012 6.30.2014 13,342.00 1,208.00 2,641.00
ITAQUI
Avipam Provision of passenger tickets 4.9.2012 6.30.2014 831.00
ITAQUI
Banco Bankpar Provision of passenger tickets 5.1.2012 12.31.2013 1,349.00 258.00 258.00
ITAQUI
Sulconsult
Services monitoring the final stage of decommissioning and
preoperation of the plant 5.31.2012 1.19.2013 1,617.00 19.00 19.00
ITAQUI
MCE Engenharia Commissioning assistance services 7.1.2012 3.8.2013 8,984.00 81.00 81.00
ITAQUI Safety Consultoria Empresarial Emergency safety services combating fires 7.1.2012 4.24.2013
ITAQUI
S Sade First aid and healthcare management services 7.1.2012 6.30.2013 856.00
ITAQUI
Voz Telecom External lighting network, CFTV and ESS system 7.25.2012 4.4.2014 2,499.00 214.00 214.00
ITAQUI
Terra Plan Com.e Servios Supply of diesel oil for generators and luminaires 8.1.2012 1.9.2013 558.00 379.00 379.00
ITAQUI
Terra Plan Com.e Servios
Coal stacking service during unloading and technical support
for fuel and waste areas 8.10.2012 3.1.2014 2,845.00 82.00 1,769.00
ITAQUI
Iluminar Comrcio e Servios Ltda
Installation services for cathode protection system for piping
and tanks 9.21.2012 2.12.2013 1,018.00 48.00 48.00
ITAQUI
Fortal Servios de Segurana Armed security and surveillance services 9.24.2012 3.24.2014 5,275.00 8.00 286.00
ITAQUI
Petroleo Sabba Supply of diesel oil 12.19.2012 8.31.2014 19,325.00
ITAQUI
Nova Aliana Locao de Veculos Personnel Transportation Services 12.25.2012 8.31.2015 3,843.00 818.00 1,255.00
ITAQUI
MAQMIX
Support for maintenance of the seawater clarification plant
and pumping station inside UTE Itaqui 1.1.2013 9.18.2013 1,491.00 5.00
ITAQUI CONSULTORIA PLANEJAMENTO E ESTUDOS
AMBIENTAIS Monitoring of water quality 2.1.2013 2.28.2014 904.00 173.00 248.00
ITAQUI
E ON GLOBAL COMMODITIES Supply of coal 3.1.2013 1.31.2015 114,746.00 94,064.00
ITAQUI
SERGIO BERMUDES ADVOGADOS
Legal assistance for litigation involving Tecnimont/Efacec
related to the termination of the EPC with Mabe 4.15.2013 1.31.2015 911.00
ITAQUI
SEMPRE VERDE SERV. E CONSTR. CIVIL Technical management of agricultural hub 5.20.2013 5.19.2014 522.00 79.00
ITAQUI
SEMPRE VERDE SERV. E CONSTR. CIVIL
Recovery of degraded areas and preventive and corrective
maintenance of possible degraded areas around the plant. 7.21.2013 4.14.2015 1,914.00
ITAQUI
RH Global Specialist outsourced labor services 9.2.2013 7.21.2014 1,019.00 309.00 520.00
ITAQUI
ECOSOFT
Maintenance and operation of the automatic air quality
monitoring and meteorology network 10.1.2013 4.14.2015 697.00 374.00 400.00
ITAQUI
OGMO
Collective agreement with trade unions of dockers, weight
master and porters 12.5.2013 9.30.2015 750.00 706.00 750.00
ITAQUI
MONSERTEC
Procurement of services for the assembly of scaffolding,
installation, paintwork and industrial and civil treatment. 1.1.2014 12.4.2015 6,000.00 4,730.00 6,000.00
Eneva S.A.
71
Company Supplier Subject matter of contract Signature Term
Total
contracted
on March 31,
2014
Balance of
contract
March 31,
2014
Balance of
contract
December 31,
2013
ITAQUI
Atlas Copco Brasil
Maintenance of Atlas Copco compressors through the total
maintenance plan 2.25.2014 4.24.2017 664.00 664.00
PecmI
Mabe Construction of UTE-EPC 1.27.2008 Indefinite 2,633,962 25,817 104,527
PecmI
Mabe/SEMACE Environmental compensation 05.092008 Indefinite 713 713 3,584
PecmI
Consulgal Portugal Owner's engineering 12.20.2007 2.20.2013 14,004 746 1,741
PecmI
Other Services/Materials Other Indefinite 560,541 191,463 155,594
PecmI
Other Operating Leasing Other Indefinite 14,352 11,261 11,026
PecmI
Carbomil Lime 6.2.2010 6.2.2015 11,910 8,363 11,372
PecmI
ICAL Lime 9.23.2011 8.23.2013 21,950 21,897 21,950
PecmI
Cogerh Raw Water 10.28.2010 4.30.2019 87,120 73,446 75,025
PecmI
Estre Ambiental Solid Waste 6.21.2011 5.21.2026 66,764 66,764 66,562
PecmI
CAGECE Effluent 11.10.2011 10.10.2031 161,857 155,243 49,708
PecmI
EDP Comercializadora Energy for sale Other Indefinite 165,555 26,525
PecmI
MPX Comercializadora Energy for sale Other Indefinite 39,427 21,201
PecmI
BTG Energia Energy for sale Other Indefinite 44,865 44,865
PecmI
Other Coal Other Indefinite 177,906 112,215
UTE Parnaba II
INITEC Energia S.A. Acquisition of 2 (two) turbo generators 8.20.2012 12.19.2013 67,861
UTE Parnaba II
INITEC Energia S.A. EPC 8.15.2011 2.2.2014 913,300 539,425 539,425
UTE Parnaba II
Hidroinga Artesian Wells WELL ENGINEERING 3.25.2012 4.29.2014 1,578 21 21
UTE Parnaba II
Brasilis Kaduna Consultancy services 2.17.2012 4.16.2013 1,000 352 352
UTE Parnaba II
Desga Ambiental Industria e Comrcio Water intake and disposal system 8.1.2012 10.31.2013 20,763 9,789 9,789
UTE Parnaba II
Desga Ambiental Industria e Comrcio
Full and complete implementation of the water intake and
disposal system 8.1.2012 5.31.2014 42,206 41,911 42,206
UTE Parnaba II
General Electric Company Acquisition of 2 (two) turbo generators 8.20.2012 12.19.2013 61,424 9,920 9,920
UTE Parnaba II
Hidroinga Artesian Wells Planning and construction of two deep cased wells 11.30.2012 4.29.2014 3,605 104 509
UTE Parnaba II
CONEL CONSTRUCOES E ENGENHARIA LTDA Construction of the well interconnection system 3.21.2013 5.31.2014 12,162 2,981 3,736
UTE Parnaba II HATCH CONSULTORIA E GERENCIAMENTO DE
EMPREENDIMENTOS LTDA
Development of the detailed project of the system
interconnecting 04 wells to the 03 water tanks of the well 3.18.2013 1.17.2014 1,756 265 265
UTE Parnaba II
ARM CONSULTORIA EM SEGURANCA LTDA -
PREVINE
Consultancy for occupational safety and the environment in
audits of companies working on the construction of UTE
Parnaba II 5.21.2013 5.20.2014 4,568 1,211 1,851
UTE Parnaba II
RH GLOBAL Procurement of specialist labor 7.24.2013 7.23.2014 1,930 753 960
UTE Parnaba II
LBB TRANSPORTE
Extension and completion of effluent disposal ducts in the
river alongside the plant 10.15.2013 4.14.2014 1,841 176 1,300
UTE Parnaba II
Guimar Engenharia Engineering consultancy 9.1.2013 2.29.2016 3,040 1,878 2,512
UTE Parnaba II
STEAG Energy Engineering consultancy 9.1.2013 2.29.2016 6,504 3,297 4,748
UTE Parnaba II
E M S Silvestrini
Preventive, predictive and corrective industrial and electrical
and mechanical maintenance of equipment 1.1.2014 4.3.2015 836 739
UTE Parnaba II
VIP Vigilncia Unarmed security and property protection services 1.1.2014 8.9.2015 998 916
UTE Parnaba II
Biota Projetos Biotic monitoring of parnaiba 1.1.2014 8.9.2018 454 425
UTE Parnaba I
GE International GE Turbina e assistencia 5.30.2011 1.18.2014 397,986 334,792 334,792
UTE Parnaba I
DURO Felguera EPC 5.30.2011 5.3.2013 468,030
UTE Parnaba I
DURO Felguera EPC and Turbine and technical assistance 5.30.2011 10.31.2013 586,827 290,726 290,726
UTE Parnaba I
DURO Felguera Siemes technical assistance 5.30.2011 10.31.2013 24,687
UTE Parnaba I
Ecosoft Air Monitoring Station acquisition 6.1.2011 9.30.2013 803 23 23
UTE Parnaba I Souza, Cescon, Barrieu, Flesch Teixeira dos Santos
Advogados Services related to legal and corporate advice. 12.1.2011 12.31.2012 550 486 486
UTE Parnaba I
KAERCHER e BAGGIO Provision of legal and agency services before ANEL. 6.1.2011 10.30.2012 605 480 480
UTE Parnaba I
Lara Pontes e Nery Advogados Provision of legal services 7.2.2012 12.31.2014 1,124 234
UTE Parnaba I
Embratel Provision of dataplus services and access to Primelink 8.1.2012 7.31.2015 711 384 447
UTE Parnaba I
Embratel Provision of Primelink services 8.1.2012 7.31.2015 1,002 131 158
UTE Parnaba I
Biota Projetos e Consultoria Ambiental Biotic Monitoring 8.10.2012 8.9.2018 1,081 443 1,014
UTE Parnaba I
ALBUQUERQUE PINTO ADVOGADOS Tax Legal advisory services 9.11.2012 12.31.2014 550 480 480
UTE Parnaba I
BANCO BANKPAR S.A Air tickets, flights and vehicle rental 4.20.2013 4.19.2015 2,718 2,718 2,718
UTE Parnaba I
BESSA & BARREIRA ADVOGADOS Specialist legal advisory services for environmental matters 1.3.2011 12.31.2013 560 532 532
UTE Parnaba I
GASMAR Distribution system operation and maintenance 12.17.2012 12.16.2027 57,838 22,682 2,946
UTE Parnaba I
EIG / COMPASS
Consultancy and management services for the sale of
electricity at the ACL - energy sales 1.24.2011 3.24.2016 743 91 145
UTE Parnaba I
ELETRONORTE Maintenance and operation services - in sectioning bay 3.21.2013 3.20.2014 1,571 67 68
UTE Parnaba I
ELETRONORTE Maintenance and operation services - in connection bay 3.21.2013 3.20.2015 1,881 732 981
UTE Parnaba I
EMS SILVESTRINI
Preventive, predictive and corrective industrial and electrical
and mechanical maintenance of equipment 4.4.2013 4.3.2015 1,664 772 1,931
UTE Parnaba I
FACULDADES CATOLICAS Design of new business model for trading energy in ACL 2.5.2013 2.4.2015 1,395 196 610
UTE Parnaba I
INMED BRASIL
Development of the Healthy Children, Healthy Future project
in Santo Antonio dos Lopes and Capinzal 12.6.2011 2.5.2015 693 245 245
UTE Parnaba I
LOBO E DE RIZZO Legal advisory services 1.19.2011 12.31.2014 770 481 485
UTE Parnaba I
M CARTAXO LACERDA Procurement of specialist labor 6.3.2013 6.2.2015 723 386 952
UTE Parnaba I
PARNABA GS NATURAL Natural gas acquisition 1.1.2013 12.31.2027 371,917 13,937 106,968
UTE Parnaba I
BPMB PARNABA Leasing of leased capacity by lessors to lessee 2.1.2013 1.31.2028 434,820 174,405 279,059
UTE Parnaba I
RH GLOBAL CONSULTORIA E ASSESSORIA LTDA Specialist services: outsourced labor 7.24.2013 7.23.2014 1,129 623 738
UTE Parnaba I
AGUIAR LOCAO Worker transportation service 4.18.2013 4.17.2014 642 61 157
UTE Parnaba I
VIP VIGILANCIA Unarmed security and property protection services 8.10.2013 8.9.2015 1,431 957 2,234
UTE Parnaba I
INST. AYRTON SENNA
Project implementing management program for correction of
school flow and management in municipal schools of Santo
Antnio dos Lopes and surrounding areas 6.18.2013 1.30.2017 2,121 2,121 2,121
8,308,908 2,571,068 2,318,566
Eneva S.A.
72
(*) The figures presented include commitments undertaken by the subsidiary in conjunction with
Pecm Gerao de Energia S.A, to an amount equal to the Company's percentage interest
(50%).
(**) The environmental compensation amounts are being included as and when the construction
costs are incurred.
(***) Refers to the purchase and sale of energy from several suppliers and with several clients for
the period between 2014 and 2024, subject to fixed prices and volumes. These purchase and
sale prices are not therefore subject to changes in the energy sector.
26 Insurance coverage
It is the policy of the Company and its direct and indirect subsidiaries to take out insurance coverage
for the assets subject to risk at amounts considered by management sufficient to cover any incidents,
considering the nature of their activity. The policies are in force and the premiums have been paid.
The Company considers its insurance coverage is consistent with other companies of similar sizes
operating in the sector.
At March 31, 2014 and December 31, 2013, the main risks covered were:
Consolidated
March 31,
2014
December 31,
2013
Material damages 11,846,576 12,432,201
Civil liability 249,000 269,000
27 Segment reporting
Segment information should be prepared in accordance with CPC 22 (Segment reporting),
equivalent of IFRS 8, and should be presented with respect to the Company and its subsidiaries'
business that was identified based on its management structure and on internal management
reporting, provided to the main manager for decision-taking purposes.
Company Management takes its decisions based on four core business segments: energy generation,
energy sales, supplies and corporate, which are subject to risks and remuneration managed by
centralized decisions.
The current activity is managed by a main manager, who allocates and evaluates the operational
segment's performance. In the case of the Company, this manager is the CEO.
Eneva S.A.
73
As the ventures move forward, Management aims to re-evaluate business segments to provide the
market with real and quantitative information.
March 31,2014
Electricity
generation Supplies Corporate Others
Eliminations
and
adjustments
Total
consolidated
Balance sheet - assets 8,075,018 5,156 4,600,011 312 (3,208,214) 9,497,656
Current 579,100 308 49,301 9 639,157
Cash and cash equivalents 76,810 288 19,694 9 96,801
Securities
Inventory 78,345 78,345
CCC subsidies receivable 46,935 46,935
Gains on derivative transactions
Secured deposits 39 39
Other current assets 32,306 20 29,568 72,334
Non-current 7,495,917 4,848 4,550,710 303 (3,208,214) 8,858,499
Long-term
Related parties 36,340 1,119,345 (763,937) 391,748
Deferred taxes 304,077 304,077
Secured deposits 128,672 128,672
Other non-current assets (16,173 ) 21 144,378 (136,110) (7,823 )
Investments 3,258,396 (2,301,065) 957,331
Property, plant and equipment 6,822,787 781 12,773 303 6,836,644
Intangible assets 192,543 2,610 210,026
Deferred charges 3,055 4,046 (7,101 )
December 31,2014
Electricity
Eliminations
and
adjustments
Total
consolidated
Balance sheet - liabilities 8,085,457 5,156 4,600,014 312 (3,193,283) 9,497,656
Current 1,426,020 1,626,396 10 3,052,426
Loans and financing 871,842 1,606,253 2,478,096
Trade payables 332,873 5,312 1 338,185
Losses on derivative transactions
Related parties (1 )
Debentures 169 169
Other current liabilities 221,304 14,662 10 235,976
Non-current 4,105,351 10 572,132 505 (744,395) 3,933,603
Non-current liabilities
Loans and financing 3,098,534 522,232 3,620,766
Related parties 989,797 10 36,700 505 (740,308) 286,704
Losses on derivative transactions
Other non-current liabilities 4,576 7,843 (4,087) 8,331
Non-controlling shareholders 125,003 125,003
Shareholders' equity 2,554,087 5,146 2,401,485 (203 ) (2,573,890) 2,386,624
Eneva S.A.
74
March 31, 2014
Electricity
Eliminations
and
adjustments
Total
consolidated
Statement of operations
Net operating revenue 586,771 586,771
Cost of Goods and/or Services sold (494,605 ) (173) (494,779)
Operating expenses (8,463 ) (28,324 ) (5 ) (36,791 )
Other operating income (12,091 ) 21,740 75 9,725
Equity in net income of subsidiaries (35,006) (7,361 )
Financial income (93,960) 8 (30,342) 0 (124,293 )
Provision for current and deferred taxes (3,837 ) (3,837 )
Non-controlling interest (1,414 ) 50 (1,365 )
Net income (loss) for the period (27,599 ) (116) (71,931 ) (4) 75 (71,931 )
December 31, 2013
Energy
generation Supplies Corporate Others Eliminations
Total
consolidated
Balance sheet - assets 8,056,566 5,317 4,751,985 313 (3,149,193) 9,689,212
Current 596,950 477 141,242 10 747,842
Cash and cash equivalents 166,960 457 110,156 10 277,583
Securities
Inventory 78,376 78,376
CCC subsidies receivable 30,802 30,802
Gains on derivative
transactions 4,171 4,171
Secured deposits 38 38
Other current assets 26,416 19 26,878 62,477
Non-current 7,459,616 4,840 4,610,742 303 (3,149,193) 8,941,310
Long-term
Related parties 24,418 1,249,669 (746,067 ) 528,019
Gains on derivative
transactions
Secured deposits 118,606 118,606
Other non-current assets (15,175 ) 21 214,734 (206,528) (6,947)
Investments 3,130,978 (2,189,125 ) 941,853
Property, plant and equipment 6,805,744 773 12,634 303 6,819,454
Intangible assets 195,653 2,727 213,381
Deferred charges 3,427 4,046 (7,473 )
Eneva S.A.
75
December 31, 2013
Energy
generation Supplies Corporate Others Eliminations
Total
consolidated
Balance sheet - liabilities 8,065,730 5,317 4,751,987 313 (3,134,135 ) 9,689,212
Current 1,398,839 1,580,010 10 2,978,859
Loans and financing 845,930 1,562,211 2,408,142
Trade payables 327,743 3,473 1 331,216
Losses on derivative
transactions
Related parties (1 )
Debentures 112 112
Other current liabilities 225,165 14,215 10 239,389
Non-current 4,156,224 22 703,232 501 (723,499 ) 4,136,479
Non-current liabilities
Loans and financing 3,146,961 655,417 3,802,378
Deferred taxes 9,591 - 9,591
Related parties 995,147 22 34,489 501 (722,438 ) 307,720
Losses on derivative
transactions
Other non-current liabilities 4,524 8,087 (1,060) 11,551
Non-controlling shareholders 123,633 123,633
Shareholders' equity 2,510,668 5,295 2,468,744 (198) (2,534,268 ) 2,450,242
December 31, 2013
Eliminations Total
Energy
and
adjustments consolidated
Statement of operations
Net operating revenue 1,438,831 1,438,831
Cost of goods and/or services
sold (1,506,234 ) (812) (1,507,046)
Operating expenses (43,375 ) (12) (123,701 ) (173) (167,261 )
Other operating income (24,839 ) (14,403) 557 (38,684)
Equity in net income of subsidiaries (469,179) (153,012)
Financial income (285,315 ) 32 (220,773 ) (40) (506,096)
Provision for current
and deferred taxes 103,248 (114,400) (11,152)
Non-controlling
interest 1,729 238 1,966
Net income (loss) for the period (315,957 ) (554) (942,456) (212) 557 (942,455 )
Eneva S.A.
76
Geographic data
The four segments described above are located in three different geographical areas, as summarized
below:
North and North-east System
The North and North-east System consists of the plants of Itaqui Gerao de Energia S.A., Porto do
Pecm Gerao de Energia S.A., Pecm II Gerao de Energia S.A., Parnaba Gerao de Energia
S.A., Parnaba II Gerao de Energia S.A., Parnaba III Gerao de Energia S.A., Parnaba IV
Gerao de Energia S.A., Parnaba V Gerao de Energia S.A., Tau Gerao de Energia Ltda., Tau
II Gerao de Energia Ltda. and Amapari Energia S.A.
The coal-fired Itaqui thermal power plant is located in the proximity of Itaqui, in Maranho State. It
has an energy generation capacity of 360 MW and has energy sale orders as from 2012.
The pulverized coal-fired power plants Porto do Pecm Gerao de Energia S.A. and Pecm II
Gerao de Energia S.A. are located in the region of Porto do Pecm, Cear State, with installed
capacity of 720 MW and 360 MW respectively.
Tau and Tau II are also located in the State of Cear, and are solar energy generation companies
with an environmental license for the joint generation of 5 MW each, where two 1-MW plants have
already been built.
Amapari, an Independent Energy Producer (PIE) in the isolated system, is a diesel fuel thermal
power plant located in the municipality of Serra do Navio, Amap State, with an installed capacity of
23 MW.
The Parnaba complex, a natural gas thermal power plant, is strategically located in block PN-T-68
of the Parnaba Basin, in Maranho State. The venture has been licensed by the Maranho State
environment Department (SEMA) and has a forecast total capacity of 3,722 MW. The five Parnaba
companies are located in this complex.
South - Southeast System
The Seival Sul mine, located in the municipality of Candiota, Rio Grande do Sul State, has proven
reserves of 152 million tons of coal. The thermoelectric ventures of Sul Gerao de Energia and UTE
Seival are going to be built in this area. These power plants will have an installed capacity of 727 MW
and 600 MW respectively, and will guarantee the supply of fuel for 30 years by integrating with the
Seival Sul mine.
Eneva S.A.
77
28 Subsequent events
(i) Capital increase, the restructuring of debts and sale of Pecm II
On May 12, 2014 ENEVA will launch a private capital increase at the level of ENEVA of up to
R$ 1,500,000,000.00 (one billion, five hundred million Reais) divided in two phases:
A cash only private capital increase of up to R$ 316,500,000.00 (three hundred, sixteen million and
five hundred thousand Reais) at a price per share of R$ 1,27 (one real and twenty seven centavos)
which represents ENEVA's closing stock trading price at the BM&FBOVESPA on May 9, 2014, as
approved by ENEVA's Board of Directors of the Company on the same date (May 9, 2014), whereby
E.ON has committed to subscribe for new ENEVA shares in an amount of R$ 120,000,000.00 (one
hundred and twenty million Reais), subject to certain conditions precedent ("Phase I Capital
Increase"); and
An asset and cash private capital increase of up to R$ 1,500,000,000.00 (one billion and five
hundred million Reais) less the amount raised in Phase I Capital Increase, to be submitted for
approval to ENEVA's shareholders meeting upon fulfilment of certain conditions precedent, for a
price to be fixed in accordance with Brazilian law and to be defined by ENEVA`s Board of Directors,
whereby E.ON has committed to subscribe for new ENEVA shares pro rata to its current
shareholding in ENEVA up to an amount of R$ 450,000,000.00 (four hundred fifty million Reais),
provided that such commitment may be fulfilled through the contribution of part of or all of E.ON's
direct or indirect shareholding in Pecm II Gerao de Energia S.A. ("Pecm II"), following the
potential sale of Pecm II to E.ON, as described below). ("Phase II Capital Increase" and, together
with Phase I Capital Increase, the "Capital Increases"). The subscription by E.ON is limited to the
extent that E.ON's participation in ENEVA shall not exceed 49.9%.
As a preliminary step to Phase II Capital Increase, ENEVA will dispose of between 50% and 100% of
Pecm II ("Pecm II Sale") via a bidding process ("Bidding Process"). E.ON has committed to
provide a backstop guarantee whereby it would indirectly acquire up to 50% (fifty percent) of the
shares of Pecm II and a certain part of the intercompany loan provided by ENEVA to Pecm II,
through a special purpose vehicle to be equally held by E.ON and ENEVA, at fair market value to be
assessed in the context of the Bidding Process, and confirmed by way of a valuation report by
Deloitte Touche Tohmatsu ("Pecm II Price"), provided that E.ON's commitment shall not exceed
R$ 400,000,000.00.00 (four hundred million Reais) and the fulfilment of certain conditions
precedent, including that a more attractive offer is not present by a third party in the context of the
Bidding Process.
Additionally, a long-term financing to Pecm II will be provided by financial institutions of
R$ 150,000,000.00 (one hundred fifty million Reais) subject to obtainment of consents and
approvals under existing financing agreements of the ENEVA group ("Pecem II Long-term
Financing").
Subject to certain conditions precedent, the financial institutions have committed to (a) bridge
financing to ENEVA of R$ 100,000,000.00 (one hundred million Reais) to be repaid with the
proceeds from the Pecem II Long-term Financing; and (b) a R$ 600,000,000.00 (six hundred
million Reais) minimum roll down of their outstanding holding credit against ENEVA to the
Company's subsidiaries and to a five-year maturity extension of the remaining holding loans at
ENEVA level, with amortization starting in June, 2017 ("Debt Restructuring").
Eneva S.A.
78
The Capital Increases, the Debt Restructuring and the Pecm II Sale are aimed at providing
additional cash to the ENEVA group and enhance its capital structure and balance sheet.
The Company will keep its shareholders and the market informed of the progress in the
implementation of the Capital Increases, the Pecm II Sale and the Debt Restructuring.
(ii) Aneel refused the petition for a provisional remedy - suspending the start of the contracts for the
commercialization of energy in the Regulated Environment of UTE Parnaba II.
At a meeting held on May 13, 2014, the Directorate of the Agncia Nacional de Energia Eltrica -
Aneel refused the petition for a provisonal remedy - suspending the start of the contracts for the
commercialization of energy in the Regulated Environment (CCEARs) of the thermal electric power
station Parnaba II. A final decision on the question is still pending.
The Company is analysing alternatives, including legal measures, and will maintain its shareholders
and the market in general on any development of the situation.
* * *
Board of Directors
Jorgen Kildahl (CEO)
Keith Plowman
Stein Dale
Adriano Carvalhdo Castello Branco Gonalves
Ronnie Vaz MoreiraLuiz do Amaral de Frana Pereira
Ricardo Luiz de Souza Ramos
Luiz Fernando Vendramini Fleury
Executive Board
Fbio H. Bicudo (CEO and Investor Relations Officer)
Frank Possmeier (Officer)
General Controller's Department Manager
Carlos Renato Rodrigues Peixoto
Accountant
Ana Paula Vergetti Diniz
CRC 087040/O-9
1Q14 Earnings Release
1
Economic and Financial Performance
1. Net Operating Revenues
In 1Q14, ENEVA recorded consolidated Net Operating Revenues of R$ 586.8 million vs R$ 196.1 million reported
in 1Q13. The increase in net revenues is mostly attributable to the beginning of commercial operations of Pecm
II in October 2013 and full-quarter operations of Itaqui and Parnaba I.
Net revenues in 1Q14 are comprised largely by the revenues from the Regulated Market Power Purchase
Agreements (PPA) of Itaqui, Pecm II and Parnaba I, which reached, respectively, R$ 159.1 million, R$ 147.1
million and R$ 268.1 million in the period.
The breakdown of operating revenues for 1Q14 is as follows:
Operating Revenues
(R$ million) Consolidated Itaqui Pecm II Parnaba I Amapari Parnaba II
Gross Revenues 656.6 176.7 164.5 298.3 16.9 0.2
Fixed Revenues 269.9 79.0 71.3 110.8 8.9 0.0
Variable Revenues 330.0 60.7 77.3 183.7 8.0 0.2
Adjustments from previous periods 0.0 0.0 0.0 0.0 0.0 0.0
Other Revenues 56.7 37.0 15.9 3.8 0.0 0.0
Deductions from Operating Revenues -69.8 -17.6 -17.4 -30.2 -4.6 0.0
Net Operating Revenues 586.8 159.1 147.1 268.1 12.3 0.2
2. Operating Costs
Operating Costs
(R$ thousands) 1Q14 1Q13
Personnel and Management (13,021) (5,313)
Fuel (227,875) (90,207)
Outsourced Services (35,914) (3,707)
Leases and Rentals (98,454) (15,440)
Energy Acquired for Resale (26,995) (172,766)
Other Costs (44,578) (7,919)
Transmission Charges (16,118) (8,553)
Compensation for Downtime (32,353) -
Other 3,894 634
Total (446,836) (295,352)
Depreciation and Amortization (47,942) (17,257)
Total Operating Costs (494,779) (312,609)
2
Operating Costs totaled R$ 494.8 million in 1Q14, impacted mainly by an increase of R$ 137.7 million in fuel
costs relative to the same period of the preceding year, due to the full-quarter operation of Itaqui and Parnaba I
the beginning of commercial operations of Pecm II. All plants were dispatched by the ONS during the full
quarter. The fuel cost of R$ 227.9 million recorded in the quarter is divided into R$ 62.7 million incurred by
Itaqui, R$ 62.8 million incurred by Pecm II, R$ 85.0 million incurred by Parnaba I and R$ 17.4 million by
Amapari.
The full-quarter operation of these plants also impacted the Outsourced Services account, which reached R$ 35.9
million in 1Q14, mainly due to higher costs with utilities, machinery and equipment repair, mechanical
maintenance service and technical consulting.
The Leases and Rentals account, which totaled R$ 98.5 million in the quarter, is comprised mainly by lease costs
incurred by Parnaba I, according to its gas supply agreement (R$ 96.6 million).
The Other Costs account, which totaled R$ 44.6 million in 1Q14, is mainly composed by transmission charges
(TUST) and compensation for downtime of the power plants (unavailability charges).
In 1Q14, Itaqui, Pecm II and Parnaba I had to reimburse discos for the energy not delivered by the difference
between their declared variable cost per MWh (CVU) and the spot price (PLD). In the quarter, these costs
amounted to R$ 5.5 million, R$ 14.0 million and R$ 12.9 million for Itaqui, Pecm II and Parnaba I, respectively.
On January 07, 2014, Itaqui filed a lawsuit against Aneel questioning the penalties being charged on an hourly
basis, considering that the Regulated Market Power Purchase Agreements (PPAs) provide for using the 60-month
rolling average availability. On January 24, 2014, a Federal Court granted an injunction to Itaqui determining
that unavailability charges be calculated based on the 60-month rolling average. In the cases of Pecm II and
Parnaba I, unavailability charges are still being measured and charged on an hourly basis. Downtime charges
are calculated based on the difference between the actual production of the generating units and the authorized
capacity discounting forced and programmed stoppage rates, internal consumption of the units and grid losses.
3. Operating Expenses
In the quarter, Operating Expenses, excluding Depreciation & Amortization, amounted to R$ 36.0 million, a 6.2%
reduction when compared to 1Q13. In the same period, the holding company posted Operating Expenses,
excluding Depreciation & Amortization, of R$ 27.8 million, compared to the R$ 23.3 million recorded in 1Q13.
During the period, the IPCA inflation index rose by 6.15%.
Operating Expenses Consolidated
(R$ thousands) 1Q14 1Q13 %
Personnel (15,292) (20,297) -24.7%
Outsourced Services (17,358) (14,062) 23.4%
Leases and Rentals (1,528) (1,677) -8.9%
Other Expenses (1,845) (2,354) -21.6%
Total (36,023) (38,391) -6.2%
Depreciation and Amortization (768) (638) 20.4%
Total Operating Expenses (36,791) (39,029) -5.7%
3
Operating Expenses Holding
Personnel (13,287) (11,121) 19.5%
Stock Options 3,511 5,714 -38.5%
Outsourced Services (11,925) (9,796) 21.7%
Leases and Rentals (1,348) (1,080) 24.8%
Other Expenses (1,239) (1,260) -1.7%
Total (27,799) (23,258) 19.5%
Total Operating Expenses (28,324) (23,712) 19.5%
The main changes are as follows:
Personnel: Personnel expenses totaled R$ 15.3 million in 1Q14, compared to R$ 20.3 million reported in
the same period of the preceding year. The reduction in personnel expenses is largely a result of:
Reduction in stock option-related expenses resulting from a decrease in both the number of
options outstanding and the share price since 1Q13 (-R$ 2.2 million);
Headcount reduction in Parnaba I and II (-R$ 3.1 million);
Outsourced services: Expenses with outsourced services in 1Q14 totaled R$ 17.4 million, up R$ 3.2
million in relation to 1Q13. The highlights are:
Decrease in expenses with shared services in the holding company, resulting from the
elimination of EBX's service structure (-R$ 4.2 million);
Increase in expenses with technical, financial and legal consulting services in the holding
company (+R$ 4.8 million);
Increase in third-party services at Parnaba II, aimed mainly at expediting the construction of
the plant (+R$ 1.5 million)
4. EBITDA
In 1Q14, ENEVA reported a positive EBITDA of R$ 103.9 million, mainly due to:
Beginning of commercial operations of Pecm II on Oct 18, 2013;
Full-quarter operations of Itaqui and Parnaba I; and
Improved operational performance of the coal plants, with resulting decrease on operating costs per
MWh generated.
4
5. Net Financial Result
Financial Result
Financial Income 50,517 12,701 297.7%
Monetary variation 21,368 3,889 449.5%
Revenues from financial investments 19,239 9,876 94.8%
Marking-to-market of derivatives 9,036 (3,018) -399.5%
Settlement of derivatives - 1,575 -100.0%
Present value adjust. (debentures) - (251) -100.0%
Other 874 631 38.5%
Financial Expenses (174,811) (90,528) 93.1%
Monetary variation (16,012) (2,263) 607.5%
Interest expenses (149,417) (58,088) 157.2%
Settlement of derivatives - (634) -100.0%
Marking-to-market of derivatives - (1,616) -100.0%
Costs and Interest on Debentures (211) (213) -0.6%
Other (9,170) (27,714) -66.9%
Net Financial Result (124,293) (77,827) 59.7%
In 1Q14, ENEVA recorded net financial expenses of R$ 124.3 million, compared to net expenses of R$ 77.8
million in 1Q13, impacted mainly by the increase in interest expenses in the holding company (+R$ 52.1 million),
Itaqui (+R$ 15.0 million); Pecm II (+R$ 33.1 million) and Parnaba I (+R$ 6.5 million). Given the end of the
grace period for interest payments on the Pecm II and Parnaba I long-term debts, interest due, which until
then was mostly capitalized, started being expensed. Higher interest expenses at the holding level are related to
the growth in debt motivated by increased cash needs in the subsidiaries resulting from energy acquisition costs
due to delays in the startup of the power plants and unavailability penalties.
6. Equity Income
The company reported a negative equity income of R$ 7.4 million, mainly impacted by losses incurred by Pecm
I.
The following analysis considers 100% of the projects. On March 31, 2014, ENEVA held an interest of 50.0% in
Pecm I, 50% in Eneva Participaes, 52.5% in Parnaba III and Parnaba IV, and 18.2% in Parnaba Gs Natural
(formerly, OGX Maranho).
5
6.1. Pecm I
INCOME STATEMENT - Pecm I
(R$ million) 1Q14 1Q13 %
Net Operating Revenues 283.7 207.5 36.7%
Operating Costs
(265.7)
(363.1) -26.8%
Operating Expenses (4.7) (3.9) 20.8%
Net Financial Result
(58.8) (28.7)
104.7%
Earnings Before Taxes (45.5) (188.2) -75.8%
Taxes Payable and Deferred 15.5 64.0 -75.8%
NET INCOME (30.0) (124.2) -75.8%
EBITDA 48.8 (143.4) -134.0%
Net revenues for Pecm I in the quarter amounted to R$ 283.7 million, comprised of:
Fixed revenues amounting to R$ 151.1 million;
Variable revenues amounting to R$ 103.1 million;
Revenues referring to power trades resulting from the annual revision of the plant's firm energy, provided for
in the concession contract, totaling R$ 64.4 million;
Taxes on revenues amounting to R$ 34.9 million.
Operating Costs, excluding depreciation and amortization, totaled R$ 230.2 million, a 33.7% decrease compared
to the same period of last year, mostly attributable to the reduction in energy acquisition costs. The second
generating unit of Pecm I was granted authorization for commercial operations in May 2013 and therefore 1Q13
figures were impacted by costs incurred to meet contractual obligations for this unit.
Fuel costs in the quarter reached R$ 93.4 million, split mainly between coal (R$ 83.4 million) and diesel oil
(R$ 5.3 million) costs.
Operating costs in 1Q14 were also inflated by costs associated with power trades resulting from the annual
revision of the plant's firm energy, provided for in the concession contract, amounting to R$ 57.0 million. Every
year, the ONS resets the plant's firm energy based on the performance of the past 60 months. If the average
availability rate falls below the value originally declared, the plant's firm energy is reduced and the difference has
to be covered by a free market collateral contract. The plant can then sell in the spot market the energy
associated with the collateral contract, maintaining only the collateral component of the contract. In 1Q14, given
high spot prices, gross revenues resulting from this sale amounted to R$ 64.4 million.
Other Costs totaled R$ 55.0 million in 1Q14. This account is composed mainly by transmission charges (R$ 14.0
million) and compensation for downtime or unavailability charges (R$ 40.6 million).
6
In 1Q14, Pecm I recorded a positive EBITDA of R$ 48.8 million. Net financial expenses amounted to R$ 58.8
million, compared to R$ 28.7 million in 1Q13, impacted mainly by increased interest expenses due to interest on
long-term financing no longer being capitalized with the start-up of operations, interest on intercompany loans,
higher losses on monetary variation, due to differential exchange rates on hedging swaps and the reversal of
values previously booked to Shareholders' Equity due to the ineffectiveness of hedge accounting.
Pecm I reported a net loss of R$ 30.0 million in 1Q14.
6.2. Eneva Participaes S.A. (formerly MPX/E.ON Participaes)
6.2.1. Holding Operating Expenses
Operating Expenses Holding ENEVA Participaes S.A.
Personnel (6,022) (8,894) -32.3%
Outsourced Services
(2,055)
(1,721) 19.4%
Leases and Rentals (576) (909) -36.7%
Other Expenses (251) (393) -36.2%
Total (8,903) (11,917) -25.3%
Total Operating Expenses (8,924) (11,919) -25.1%
In 1Q14, Operating Expenses, excluding Depreciation & Amortization, amounted to R$ 8.9 million, a decrease of
R$ 3.0 million compared to 1Q13, mostly attributable to reduced personnel expenses.
6.2.2. Parnaba III
INCOME STATEMENT - Parnaba III
Operating Costs (63.4) (67.1) -5.5%
Net Financial Result (2.7) (0.8) 263.5%
Other Revenues/Expenses (0.8) - -
Earnings Before Taxes 9.3 (31.7) -129.3%
Taxes Payable and Deferred (3.1) 10.8 -129.2%
NET INCOME 6.1 (20.9) -129.3%
EBITDA 14.4 (30.9) -147%
7
On October 22, 2013, Parnaba III received authorization from Aneel to start the commercial operations of its
first generation unit, with 169MW of installed capacity. On February 17, 2014, the plant started the commercial
operations of its second generation unit, with 7MW of installed capacity. Thereby, in 1Q14, the installed capacity
of the plant reached 176MW, complying with the total capacity contracted under the terms of the Regulated
Market power purchase agreement secured in the 2008 A-5 energy auction.
Net revenues in the quarter totaled to R$ 76.5 million, split between fixed revenues of R$ 24.9 million and
variable and other revenues amounting to R$ 60.2 million. Revenues in 1Q13 refer to the pass-through of
energy acquisition costs incurred to ensure compliance with the plant's energy supply agreements until the
authorization to start commercial operations.
Operational Costs reached R$ 63.4 million in the quarter, comprised mainly of:
Fuel - natural gas (R$ 19.1 million);
Lease costs, according to the gas supply agreement (R$ 29.1 million)
Energy acquisition costs incurred to meet contractual obligations until the start-up of the second generation
unit (R$ 2.4 million)
Unavailability costs (R$ 6.8 million).
In 1Q14, Parnaba III recorded a positive EBITDA of R$ 14.4 million.
Net financial expenses amounted to R$ 2.7 million, mainly impacted by interest expenses.
Parnaba III reported a net income of R$ 6.1 million in 1Q14.
6.2.3. Parnaba IV
INCOME STATEMENT - Parnaba IV
Net Operating Revenues 32.9 - -
Operating Costs (23.1) (0.0) -
Net Financial Result (1.2) (2.6) -52.4%
Other Revenues/Expenses (0.9) - -
Earnings Before Taxes 7.0 (2.7) -356.7%
Taxes Payable and Deferred (1.3) - -
NET INCOME 5.7 (2.7) -308.6%
EBITDA 10.3 (0.2) -6610.3%
8
Parnaba IV (56MW) received authorization from Aneel to start commercial operations as a power self-producer
on December 12, 2013. The plant, a partnership between Eneva, Eneva Participaes and Petra Energia S.A.,
signed a contract in the free market, for a five-year period, to supply 20 MWavg from December, 2013 until May,
2014 and 46MWavg from June, 2014 until December, 2018.
In 1Q14, Parnaba IV recorded net revenues of R$ 32.9 million and operational costs amounting to R$ 23.1
million, impacted mainly by fuel costs - natural gas (R$ 6.8 million) and energy costs resulting from submarket
exposure (R$ 12.7 million). One should note that such exposure was partially hedged, with resulting revenues
accounted for in the ENEVA Trading arm.
Parnaba IV reported an EBITDA of R$ 10.3 million in the quarter.
Net financial expenses totaled R$ 1.2 million, mainly impacted by debt interest.
In 1Q14, the plant reported a net income of R$ 5.7 million.
6.3. Parnaba Gs Natural
In 1Q14, Parnaba Gs Natural recorded net revenues of R$ 162.0 million, with a cumulative production of 378.6
million m
3
of gas. EBITDA in the quarter reached R$ 133.8 million.
Parnaba Gs Natural recorded a net profit of R$ 35.1 million in 1Q14.
Income Statement (Non audited) Parnaba Gs Natural
(R$ thousand) 1Q14 1Q13
Operating Period
(1)
90 days 65 days
Gas Production - in MMm
3 (2)
378.6 83.5
Gross Operating Revenues 181,559 39,279
Deductions from Gross Revenue
(3)
(19,533) (4,522)
Net Operating Revenues 162,026 34,757
Production costs (3,712) (3,597)
Royalties, Special Part. And Government Part. (23,218) (2,718)
SG&A 126 (6,317)
Exploration Expenses (1,426) (37,355)
EBITDA 133,796 (15,230)
Depreciation and Amortization (38,332) (5,667)
Net Financial Income (41,216) (5,134)
Financial Income 2,669 1,729
Financial Expenses (43,191) (5,148)
Foreign Exchange (694) 3,717
Derivatives - (5,432)
Earnings Before Taxes 54,248 (26,031)
IR (14,042) 6,306
CSLL (5,057) 2,271
Net Income 35,149 (17,454)
(1)
Date of closing for book values: 25
th
day of the month.
(2)
Gas production related to Parnaba Gs Natural's participation in the blocks (70%).
(3)
Deductions from Revenues: taxes such as PIS/COFINS/ICMS.
9
7. Net Income
In 1Q14, ENEVA reported a net loss of R$ 71.9 million, impacted mainly by interest expenses related to the end
of the grace period of the long-term project loans and higher leverage at the holding company.
INCOME STATEMENT
Operating Costs (494.8) (312.6) 58.3%
Operating Expenses (36.8) (39.0) -5.7%
Net Financial Result (124.3) (77.8) 59.7%
Equity Income (7.4) (83.5) -91.2%
Other Revenues/Expenses 9.7 (1.0) -1061.8%
Earnings Before Taxes (66.7) (317.9) -79.0%
Taxes Payable and Deferred (3.8) 60.8 -106.3%
Minority Interest (1.4) 6.2 -122.2%
NET INCOME (71.9) (250.9) -71.3%
EBITDA 103.9 (137.6) -175.5%
8. Debt
As of March 31, 2014, consolidated gross debt amounted to R$ 6,098.9 million, a reduction of 2.7% in relation to
the amount recorded on December 31, 2013.
Consolidated debt profile (R$ million)
The
balance of short-term debt at the end of March, 2014 was R$ 2,478.1 million, or R$ 70.0 million higher than the
amount recorded on December 31, 2013.
R$ 871.8 million out of the total balance of short-term debt are allocated in the projects (vs. R$ 845.9 million on
December 31, 2014), as follows:
R$ 290.3 million refer to the current portion of the long-term debts of Itaqui, Pecm II and Parnaba I;
R$ 87.3 million refer to bridge loans to Parnaba I. The outstanding balance will be paid-off in
installments, which started in October, 2013;
R$ 494.2 million refer to bridge loans to Parnaba II.
2,478
41%
3,621
59%
Short Term Long Term
2,128
35%
3,970
65%
Working Capital Project Finance
10
The remaining balance of short-term debt, amounting to R$ 1,606.3 million, is allocated in the holding company
(vs. R$ 1,562.2 million on December 31, 2013). During 1Q14, ENEVA holding raised additional R$ 80 million to
cover project investment and working capital needs.
In March 2014, following the conclusion of a R$ 250 million capital increase at Parnaba Gs Natural - PGN, and
the approval by its shareholders for the issuance of R$ 745 million in non-convertible debentures, PGN paid off a
R$ 200 million debt with ENEVA. This debt was contracted in the 4Q13, in light of the early termination triggered
by OGX's judicial recovery procedure, the Company raised further R$ 200.0 million to pay-off 1/3 of the debt
held by Parnaba Gs Natural - PGN (formerly OGX Maranho), thus replacing the banks as a creditor to PGN.
According to the new IFRS standards, Pecm I is no longer included in the consolidated statements. As of March
31, 2014, the gross debt of Pecm I (50%) amounted to R$ 1,048.4 million.
At the end of march, 2014, the average cost of debt stood at 10.20% p.a. and the average maturity at 4.2
years.
Debt Maturity Profile* (R$ million)
*Values include principal + capitalized interest + charges and exclude outstanding convertible debentures.
Net debt in 1Q14 amounted to R$ 6,002.5 million, 1.2% higher than the value reported on December 31, 2013.
Consolidated Cash and Cash Equivalents totaled R$ 96.4 million at the end of March, 2014, a decrease of
R$ 181.2 million as compared to the balance in December 31, 2013.
96,4
871,8
844,3
325,7
282,0
2.168,7
Project Finance
1.606,3 Working Capital
Cash & Cash
Equivalents
2014 2015 2016 2017 From 2018 on
11
Consolidated Cash and Cash Equivalents (R$ million)
277,6
571,9
80,0
156,5
104,8
521,6
350,9
96,4
Cash and Cash
Equivalents
(4Q13)
Revenues Debt Raised Intercompany
Loan
CAPEX Operating Costs
and Expenses
Debt Service Cash and Cash
Equivalents
(1Q14)
FEDERAL PUBLIC SERVICE
CVM BRAZILIAN SECURITIES COMMISSION
ITR Quarterly Information Corporate Legislation
COMMERCIAL AND INDUSTRIAL COMPANIES AND OTHER - as of 3/31/2014
02123-7 ENEVA S/A 04.423.567/0001-21
20.01 - OTHER INFORMATION CONSIDERED SIGNIFICANT TO THE COMPANY
27/05/2014 13:01:22 Page: 1
Pursuant to the Company's Bylaws, the company, its shareholders and managers undertake to
settle through arbitration any and all disputes between them arising from, or in connection with,
the application, validity, effectiveness, interpretation, violation or effects of the rules contained in
Brazilian Corporation Law, the Company's By-Laws, regulations issued by the Brazilian
Monetary Council, the Brazilian Central Bank and the Brazilian Securities Commission (CVM),
and any other regulations applicable to the capital market in general, as well as those contained
in the New Market Regulations, the Regulations of the Market Chamber of Arbitration and New
Market Agreement.
At March 31, 2014 the Companys share capital consisted of 702,524,469 common shares
distributed as follows:
CONSOLIDATED SHAREHOLDINGS OF CONTROLLING SHAREHOLDERS
MANAGERS ANDFREE FLOAT
Position at 3/31/2014
Shareholder
Number of Common
Shares
(in units)
%
Total Number of
Shares
(in units)
%
Controlling Shareholder 434,005,449 61.78 434,005,449 61.78
Executives
Board of Directors
155,155 0.02 155,155 0.02
Executive Board
0 0.00 0 0.00
Audit Committee*
- - - -
Treasury Stock
0 0.00 0 0.00
Other Shareholders
268,363,865 38.20 268,363,865 38.20
Total
702,524,469 100 702,524,469 100
Free Float 268,363,865 38.20 268,363,865 38.20
* At 3/31/2014 the Company did not have an Audit Committee.
The Company's capital was increased on 5/26/2011 by the Board of Directors' meeting held
3/24/2011, which raised the number of shares from 136,692,680 to 136,720,840, as a result of
subscription options being exercised.
2/29/2012, via the issuance of 9,633 new shares resulting from the conversion of 6,383 of the
21,735,744 debentures issued by the Company on June 15, 2011. The number of Company
shares accordingly rose from 136,720,840 to 136,730,473.
The Company's capital was increased in March 2012 by the Board of Directors' meeting held
3/21/2012, via the issuance of 984 new shares resulting from the conversion of 649 debentures
and the issuance of 7,040 new common shares, with no par value, resulting from the exercising
of stock options awarded under the Company's stock options program. The number of
Company shares accordingly rose from 136,730,473 to 136,738,497.
02123-7 ENEVA S/A 04.423.567/0001-21
27/05/2014 13:01:22 Page: 2
The Company's capital was increased in May 2012 by the Board of Directors' meeting held
5/9/2012 as a result of the (i) issuance of 4,112 new shares resulting from the conversion of
2,701 debentures and (ii) the issuance of 125,620 new common shares, with no par value,
resulting from the exercising of stock options awarded under the Company's stock options
program. The number of Company shares accordingly rose from 136,738,497 to 136,868,229.
The capital was increased again the same month by the Board of Directors' meeting held
5/24/2012, which ratified the issuance of 33,254,705 new common shares with no par value,
resulting from the conversion of 21,652,966 debentures. The number of Company shares
accordingly rose from 136,868,229 to 170,122,934.
On 5/24/2012 the ENEVA Board of Directors approved a capital increase of R$
1,000,000,063.00 via the issuance of 22,623,796 new shares. However, the subscribed shares
will only exist after the capital increase has been concluded and subsequently ratified, which
was concluded in July 2012 and ratified by the Board of Directors' meeting held July 25, 2012.
The Company's capital was increased in June 2012 by the Board of Directors' meeting held
6/15/2012, which ratified the issuance of 514 new common shares with no par value, resulting
from the conversion of 334 debentures. The number of Company shares accordingly rose from
170,122,934 to 170,123,448.
On 6/25/2012 the Board of Directors' meeting ratified the capital increase, approved by the
Board of Directors' meeting on 5/24/2012 at 11 AM, of R$ 1,000,000,063.00 (one billion and
sixty-three reais), within the authorized capital limit, as a result of the subscription and full
payment of the 22,623,796 new common registered shares with no par value by E.ON AG
(E.ON). The number of Company shares accordingly rose from 170,123,448 to 192,747,244.
Pursuant to the minutes of the Extraordinary General Meeting held by the Company on
8/15/2012, the shareholders in attendance unanimously approved the split of common shares
issued by the Company, whereby each existing common share was split into 3 (three) shares of
the same class. ENEVA's shareholders are entitled to receive the split shares according to their
shareholding at Wednesday, August 15, 2012. The number of Company shares accordingly
rose from 192,747,244 to 578,241,732.
The Company's capital was increased in January 2013 by the Board of Directors' meeting held
1/10/2013, ratifying the issuance of 147,480 new common shares, with no par value, resulting
However, there was a partial subscription of the capital increase, whereby the share capital as
of 3/31/2013 stood at R$ 3,736,269,091.89, less than the figure presented in the minutes to the
Board of Directors' meeting held February 06, 2013. The remainder of the share capital was
paid in after the end of the first quarter, resulting in a share capital of R$ 3,736,354,722.02.
02123-7 ENEVA S/A 04.423.567/0001-21
27/05/2014 13:01:22 Page: 3
The Company's capital was increased in April 2013 by the Board of Directors' meeting held
number of Company shares accordingly changed to 578,450,712. As a result of this resolution
the Company's share capital has changed from R$ 3,736,354,722.02 to R$ 3,736,468,820.55.
The Company's capital was increased in May 2013 by the Board of Directors' meeting held
On 9/16/2013 the Board of Directors' meeting ratified the Company's capital increase, as
approved by the Board of Directors' meeting on July 03, 2013, of R$ 799,999,995.15, within the
authorized capital limit, as a result of the subscription and full payment of the 124,031,007 new
common registered shares with no par value. The number of Company shares accordingly rose
from 578,479,962 to 702,510,969. The Company's share capital has accordingly changed from
R$ 3,736,568,320.85 to R$ 4,536,568,316.00.
The Company's capital was increased in October 2013 by the Board of Directors' meeting held
Shareholdings of over 5% of the shares of each type and class in the Company, including those
of individuals
Company: ENEVA S.A. Position at 3/31/2014
Common shares* Total
Shareholder
Quantity % Quantity %
Eike Fuhrken Batista
145,704,988 20.7 145,704,988 20.7
Centennial Asset Mining Fund LLC
20,208,840 2.9 20,208,840 2.9
Centennial Asset Brazilian Equity Fund LLC
1,822,065 0.3 1,822,065 0.3
E.ON
266,269,556 37.9 266,269,556 37.9
BNDESPAR
72,650,210 10.3 72,650,210 10.3
Other
195,868,810 27.9 195,868,810 27.9
Total
702,524,469 100 702,524,469 100
*ENEVA's share capital consists solely of common shares.
02123-7 ENEVA S/A 04.423.567/0001-21
27/05/2014 13:01:22 Page: 4
Distribution of share capital in our corporate shareholder (Company shareholder), including the
shareholdings of individuals
Company: Centennial Asset Mining Fund LLC Position at 3/31/2014
Quotas Total
Shareholder Quantity % Quantity %
Eike Fuhrken Batista 1,000 100 1,000 100
Total 1,000 100 1,000 100
Company: Centennial Asset Brazilian Equity Fund LLC Position at 3/31/2014
Quotas Total
Centennial Asset Mining Fund LLC 1,000 100 1,000 100
Total 1,000 100 1,000 100
To facilitate your comprehension a summary follows of the corporate changes ENEVA has
undergone in the period of one year:
On 5/27/2013 E.ON SE. and Mr. Eike Fuhrken Batista ("Parties), the controlling
shareholder of ENEVA, signed the Shareholders' Agreement (Agreement), by which
the Parties established the main terms and conditions that will govern their relationship
as ENEVA shareholders, in order for the Parties to share control of the Company
(subject to the Agreement's severance terms). E.ON and Mr. Eike Fuhrken Batista
signed an Investment Agreement on March 27, 2013 for the acquisition by E.ON of
ENEVA shares held by Mr. Eike Fuhrken Batista, followed by a private capital increase
of ENEVA, ratified on September 16, 2013.
02123-7 ENEVA S/A 04.423.567/0001-21
27/05/2014 13:01:22 Page: 5
At March 31, 2013 the Companys share capital consisted of 578,241,732 common shares
distributed as follows:
CONSOLIDATED SHAREHOLDINGS OF CONTROLLING SHAREHOLDERS
MANAGERS ANDFREE FLOAT
Position at 3/31/2013
Shareholder
Number of Common
Shares
(in units)
%
Total Number of
Shares
(in units)
%
Controlling Shareholder
309,280,530 53.47 309,280,530 53.47
Executives
Board of Directors
2,935,816 0.51 2,935,816 0.51
Executive Board
4,198,060 0.73 4,198,060 0.73
Audit Committee*
- - - -
Treasury Stock
0 0.00 0 0.00
Other Shareholders
262,001,806 45.29 262,001,806 45.29
Total
578,416,212 100 578,416,212 100
Free Float 262,001,806 45.29 262,001,806 45.29
*The Company's Annual Meeting did not convene the Audit Committee in FY 2012.
Shareholdings of over 5% of the shares of each type and class in the Company, including those
of individuals
Company: ENEVA S.A. Position at 3/31/2013
Common shares Total
Shareholder
Quantity % Quantity %
Eike Fuhrken Batista
287,249,625 49.7 287,249,625 49.7
Centennial Asset Mining Fund LLC
20,208,840 3.5 20,208,840 3.5
Centennial Asset Brazilian Equity Fund LLC
1,822,065 0.3 1,822,065 0.3
E.ON
67,869,516 11.7 67,869,516 11.7
BNDESPAR
59,823,537 10.3 59,823,537 10.3
Other
141,442,629 24.5 141,442,629 24.5
Total
578,416,212 100 578,416,212 100
02123-7 ENEVA S/A 04.423.567/0001-21
27/05/2014 13:01:22 Page: 6
Distribution of share capital in our corporate shareholder (Company shareholder), including the
shareholdings of individuals
Company: Centennial Asset Mining Fund LLC Position at 3/31/2013
Quotas Total
Eike Fuhrken Batista 1,000 100 1,000 100
Total 1,000 100 1,000 100
Company: Centennial Asset Brazilian Equity Fund LLC Position at 3/31/2013
Quotas Total
Centennial Asset Mining Fund LLC 1,000 100 1,000 100
Total 1,000 100 1,000 100

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