6-K

 

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

Report of foreign private issuer pursuant to rule 13a-16 or 15d-16 of the securities exchange act of 1934

For the month of April 2016

Commission File Number 1-15224

 

 

ENERGY COMPANY OF MINAS GERAIS

(Translation of Registrant’s Name Into English)

 

 

Avenida Barbacena, 1200

30190-131 Belo Horizonte, Minas Gerais, Brazil

(Address of Principal Executive Offices)

 

 

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

Form 20-F  x                 Form  40-F   ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper

as permitted by Regulation S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper

as permitted by Regulation S-T Rule 101(b)(7):  ¨

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

Yes  ¨                 No   x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

 

 

 


Index

 

Item

  

Description of Item

 

1.

  

 

Summary of Minutes of the 571st Meeting of the Board of Directors Held on July 3, 2013

 

2.   

Summary of Minutes of the 594th Meeting of the Board of Directors Held on April 30, 2014

 

3.   

Market Notice Dated February  3, 2016: Reply to BM&FBovespa Official Letter 285/2016–SAE, of February 2, 2016

 

4.   

Summary of Principal Decisions of the 653rd Meeting of the Board of Directors Held February 19, 2016

 

5.   

Material Announcement Dated March  1, 2016: Exchange of AGC Energia debentures for shares in Cemig

 

6.   

Material Announcement Dated March  3, 2016: Material Stock Transaction – BNDESPAR

 

7.   

Summary of Principal Decisions of the 654th Meeting of the Board of Directors Held on March 11, 2016

 

8.   

Summary of Principal Decisions of the 655th Meeting of the Board of Directors Held on March 11, 2016

 

9.   

Material Announcement Dated March 16, 2016: Mr.  Carlos Henrique Waack’s resignation as CEO of Renova Energia S.A.

 

10.   

Summary of Principal Decisions of the 656th Meeting of the Board of Directors Held on March 28, 2016

 

11.   

Summary of Principal Decisions of the 657th Meeting of the Board of Directors Held on March 28, 2016

 

12.   

Notice to Shareholders Dated March  29, 2016: Article 133 of Law 6,404 of December 15, 1976

 

13.   

Earnings Release – 2015

 

14.   

2015 Results – Presentation

 

15.   

Market Announcement Dated March  28, 2016: Creation of joint Directorate for Compliance and Corporate Risk Management

 

16.   

Convocation and Proposal of the Ordinary and Extraordinary General Meetings of Stockholders to be Held April 29, 2016

 

17.   

Summary of Minutes of the 656th Meeting of the Board of Directors Held on March 28, 2016

 

18.   

Material Announcement Dated April 2, 2016: Renova Energia S.A.: The ESPRA Agreement rescinded. Intention to exercise the option to sell Terraform Global’s shares held by Renova Energia S.A.

 

 


FORWARD-LOOKING STATEMENTS

This report contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Actual results could differ materially from those predicted in such forward-looking statements. Factors which may cause actual results to differ materially from those discussed herein include those risk factors set forth in our most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission. CEMIG undertakes no obligation to revise these forward-looking statements to reflect events or circumstances after the date hereof, and claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG
Date: April 6, 2016     By:   /s/    Fabiano Maia Pereira
    Name:   Fabiano Maia Pereira
    Title:   Chief Officer for Finance and Investor Relations

 

 


 

1. SUMMARY OF MINUTES OF THE 571ST MEETING OF THE BOARD OF DIRECTORS HELD ON JULY 3, 2013

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

BOARD OF DIRECTORS

SUMMARY OF MINUTES

OF THE

571ST MEETING

 

Date, time and place:   July 3, 2013 at 9 a.m. at the company’s head office.
Meeting Committee:  

Chair: Dorothea Fonseca Furquim Werneck;

Secretary: Alexandre de Queiroz Rodrigues

Summary of proceedings:

 

I Conflict of interest: The Chair asked the Board Members present whether any of them had conflict of interest in relation to the matter on the agenda of this meeting, and all stated there was no such conflict of interest, except following members who stated that they had conflict of interest:

 

Paulo Roberto Reckziegel Guedes,    Saulo Alves Pereira Junior,    Bruno Magalhães Menicucci,
Newton Brandão Ferraz Ramos,    Tarcísio Augusto Carneiro, and    Marina Rosenthal Rocha

These members withdrew from the meeting room at the time of discussion and voting on the matter, returning after the vote on it had been taken, to proceed with the meeting.

 

II The Board approved:

 

  a) Payment of subscription of shares in Acesa, referred to in subclause ‘c’ of item III below, in the amount of up to R$ 170 million, within 3 years.

 

  b) The minutes of this meeting.

 

III The Board authorized:

 

  a) Signature, jointly with Andrade Gutierrez Concessões S.A. (‘AGC’), Equatorial Energia S.A. (‘Equatorial’) and CPFL Energia S.A. (‘CPFL’), of the Term of Adhesion to the Memorandum of Understanding signed between CPFL and Equatorial.

 

  b) Signature, jointly with:

– AGC and the signatories of the Investment Commitment Undertaking (i.e., Equatorial and CPFL), as investors; Jorge Queiroz de Morais Junior, as vendor; and JQMJ Participações S.A, BBPM Participações S.A., Denerge Desenvolvimento Energético S.A., Rede Energia S.A. and Empresa de Eletricidade Vale Paranapanema S.A., as consenting parties,

– of the Term of Adhesion to the Share Sale Commitment Undertaking for participation in companies of the Rede Group (Grupo Rede), by a company to be constituted by Cemig, AGC and Equatorial.

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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  c) Constitution by Cemig, jointly with AGC and Equatorial, of the company that will be the vehicle for the acquisition referred to in subclause ‘b’ of this item, to be named ACESA, of which the total and voting stock will be owned as follows:

Equatorial 50%; Cemig 25%; AGC 25%.

 

  d) Signature, by Cemig, with AGC and Equatorial, of a Stockholders’ Agreement in relation to ACESA.

 

  e) Supplementation to the budget for expenses of the Chief Business Development Officer’s Department, in the period of 2013 and 2014, to provide from the payments to advisors and consultants specified in the Investment Commitment Undertaking and in the Term of Adhesion referred to above.

 

IV The Board ratified signature of the Memorandum of Agreement with AGC and Equatorial to govern, establish and/or provide details of the terms and conditions for a valuation to be the basis of the acquisition referred to in subclause ‘b’ of Item III above and will agree the manner in which the participation of Cemig and AGC in the potential acquisition of companies of the Rede Group will take place.

 

V Comment: The Chair made comments on a subject of interest to the Company.

The following were present:

 

Board members:   

Dorothea Fonseca Furquim Werneck,

Djalma Bastos de Morais,

Arcângelo Eustáquio Torres Queiroz,

Guy Maria Villela Paschoal,

João Camilo Penna,

Paulo Roberto Reckziegel Guedes,

Saulo Alves Pereira Junior,

Tadeu Barreto Guimarães,

Wando Pereira Borges,

   Adriano Magalhães Chaves,

Bruno Magalhães Menicucci,

Luiz Augusto de Barros,

Newton Brandão Ferraz Ramos,

Tarcísio Augusto Carneiro,

Christiano Miguel Moysés,

Franklin Moreira Gonçalves,

Marco Antonio Rodrigues da Cunha,

Marina Rosenthal Rocha,

Paulo Sérgio Machado Ribeiro;

Chief Officer:    Fernando Henrique Schüffner Neto;     
Secretary:    Alexandre de Queiroz Rodrigues.     

(Signed) Alexandre de Queiroz Rodrigues

Registered at:

Commercial Board of the State of Minas Gerais

I certify registry on: February 16, 2016

Under the number: 5701198

Filing Receipt number: 16/163.964-0

Marinely de Paula Bomfim

General Secretary

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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2. SUMMARY OF MINUTES OF THE 594TH MEETING OF THE BOARD OF DIRECTORS HELD ON APRIL 30, 2014

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

BOARD OF DIRECTORS

SUMMARY OF MINUTES

OF THE

594TH MEETING

 

Date, time and place:  

April 30, 2014 at 8.30 a.m. at the company’s head office,

Av. Barbacena 1200, 21st floor, Belo Horizonte, Minas Gerais, Brazil.

Summary of proceedings:

 

I Meeting Committee: Due to vacancy of the position of Chair of this Board, as a result of the resignation, on April 7, 2014, of the board member Dorothea Fonseca Furquim Werneck, as per a letter in the Company’s possession, the Deputy Chair, Mr. Djalma Bastos de Morais, assumed the post of Chair, and invited Mr. Alexandre de Queiroz Rodrigues to be Secretary of the meeting.

 

II Conflict of interest: The board members listed below said they had no conflict of interest in the matters on the agenda of this meeting.

 

III The Board approved the minutes of this meeting.

 

IV The Board authorized acquisition, by Cemig GT, of 49.9% of the voting and total stock of Retiro Baixo Energética S.A., an unlisted special-purpose corporation, which has as its only asset the Retiro Baixo Hydroelectric Plant, jointly with Orteng Equipamentos e Sistemas Ltda. and Arcadis Logos Energia.

 

V Comment: The Chair made comments on a subject of interest to the Company.

The following were present:

 

Board members:   

Djalma Bastos de Morais,

Arcângelo Eustáquio Torres Queiroz,

Guy Maria Villela Paschoal,

João Camilo Penna,

Joaquim Francisco de Castro Neto,

Saulo Alves Pereira Junior,

Wando Pereira Borges,

   Bruno Magalhães Menicucci,

Luiz Augusto de Barros,

Marina Rosenthal Rocha,

Newton Brandão Ferraz Ramos,

Tarcísio Augusto Carneiro,

Adriano Magalhães Chaves,

José Augusto Gomes Campos;

Secretary:    Alexandre de Queiroz Rodrigues.     

(Signed) Alexandre de Queiroz Rodrigues

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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3. MARKET NOTICE DATED FEBRUARY 3, 2016: REPLY TO BM&FBOVESPA OFFICIAL LETTER 285/2016–SAE, OF FEBRUARY 2, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

MARKET NOTICE

Reply to BM&FBovespa Official Letter 285/2016–SAE, of February 2, 2016

Question asked by BM&FBovespa

“ COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

Mr. Fabiano Maia Pereira

Investor Relations Director

Subject: Atypical trading in shares

Dear Sir,

In view of the most recent variations in the prices of your company’s shares, the number of trades and volume traded, as set out below, we request you to inform us, by February 3, 2016, whether there is any fact you are aware of that could be the reason for this.

We note the obligation stated in the sole sub-paragraph of Article 4 of CVM Instruction 358/02, to question managers and controlling stockholders of the Company to ascertain whether they had knowledge of information that should be disclosed to the market.

 

ON shares

 

Prices (R$ per share)

 

Date

   Opening      Minimum      Maximum      Average      Last      Change %      No. of trades      Quantity      Volume  

19/01/2016

     4.72         4.47         4.82         4.62         4.47         –4.69         296         84,000         388,152.00   

20/01/2016

     4.48         4.39         4.59         4.53         4.53         1.34         267         78,200         354,114.00   

21/01/2016

     4.52         4.50         4.74         4.59         4.51         –0.44         94         36,600         168,133.00   

22/01/2016

     4.66         4.66         4.80         4.74         4.72         4.66         114         80,900         383,319.00   

26/01/2016

     4.85         4.60         4.85         4.71         4.76         0.85         187         86,300         406,189.00   

27/01/2016

     4.78         4.76         5.22         5.00         5.15         8.19         205         88,500         442,464.00   

28/01/2016

     5.27         5.06         5.51         5.34         5.38         4.47         381         299,000         1,597,442.00   

29/01/2016

     5.48         5.48         6.01         5.80         5.80         7.81         1,197         400,700         2,323,637.00   

01/02/2016

     5.97         5.66         6.70         6.35         6.70         15.52         810         201,900         1,281,571.00   

02/02/2016*

     6.80         5.39         6.86         6.03         5.46         –18.50         494         224,800         1,356,312.00   

 

* Updated to 5.04 p.m.

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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PN shares

 

Prices (R$ per share)

 

Date

   Opening      Minimum      Maximum      Average      Last      Change %      No. of trades      Quantity      Volume  

19/01/2016

     4.57         4.28         4.60         4.49         4.29         –4.67         15,646         7,495,100         33,657,323.00   

20/01/2016

     4.25         4.10         4.35         4.25         4.35         1.40         19,127         7,806,400         33,168,684.00   

21/01/2016

     4.35         4.28         4.49         4.39         4.37         0.46         8,351         3,488,400         15,310,830.00   

22/01/2016

     4.50         4.37         4.51         4.45         4.47         2.29         11,023         3,764,600         16,743,219.00   

26/01/2016

     4.49         4.28         4.60         4.44         4.45         –0.45         14,118         4,761,900         21,119,273.00   

27/01/2016

     4.41         4.41         4.98         4.81         4.91         10.34         11,670         4,936,400         23,743,818.00   

28/01/2016

     4.86         4.78         5.34         5.10         5.34         8.76         11,158         6,132,600         31,270,477.00   

29/01/2016

     5.39         5.37         6.02         5.82         5.91         10.67         18,080         9,150,400         53,211,442.00   

01/02/2016

     5.84         5.76         6.70         6.45         6.65         12.52         16,394         8,800,500         56,774,586.00   

02/02/2016*

     6.45         5.25         6.48         5.69         5.30         –20.30         21,797         12,039,000         68,520,753.00   

 

* Updated to 5.05 p.m.

The file to be sent should contain the question that is asked above, preceding your company’s reply.

We remind you that this request is made under the Cooperation Working Agreement made between the CVM and BM&FBOVESPA on December 13, 2011, and that non-compliance with it may make your company subject to imposition of an incentive fine by the Company Relations Management Unit (SEP) of the CVM, subject to CVM Instruction 452/07.

Yours,

Nelson Barroso Ortega

Company Monitoring Management Unit”

Reply by CEMIG

Dear Mr. Nelson Barroso Ortega,

On the question of the most recent variations in the prices of our shares, and the increase in the number of trades and the quantity traded, we inform you that we have no knowledge of any fact or event resulting from our activities or business that would justify the events and which has not been duly publicized.

In compliance with Article 4 of CVM Instruction 358/02, the Company’s managers and controlling stockholders have been questioned to ascertain whether they had knowledge of information that should have been disclosed to the market. We have not yet received the replies.

Cemig reiterates its commitment to opportune and timely disclosure of all and any fact which is of interest to its stockholders.

Belo Horizonte, February 3, 2016.

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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4. SUMMARY OF PRINCIPAL DECISIONS OF THE 653RD MEETING OF THE BOARD OF DIRECTORS HELD FEBRUARY 19, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

BOARD OF DIRECTORS

Meeting of February 19, 2016

SUMMARY OF PRINCIPAL DECISIONS

At its 653rd meeting, held on February 19, 2016, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

1. Guarantee in contracting of loans by Cemig D.

 

2. Communication to the Executive Board of decision on signature of terms of indemnity and quittance with Axxiom Soluções Tecnológicas S.A.

 

3. Signature of amendment to contract, between the federal government and Centroeste, with Cemig and Furnas as consenting parties.

 

4. Filing of a legal action.

 

5. Cost of capital.

 

6. Contracting of advertising agencies.

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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5. MATERIAL ANNOUNCEMENT DATED MARCH 1, 2016: EXCHANGE OF AGC ENERGIA DEBENTURES FOR SHARES IN CEMIG

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

MATERIAL ANNOUNCEMENT

Exchange of AGC Energia debentures for shares in Cemig

With reference to the information already given in the Market Announcement published on December 1, 2015, Cemig (Companhia Energética de Minas Gerais), a listed company with securities traded on the stock exchanges of São Paulo, New York and Madrid, in compliance with CVM Instruction 358 of January 3, 2002, hereby reports to the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (BM&FBovespa S.A.) and the market in general as follows:

Cemig has today received correspondence from the stockholder AGC Energia S.A. (AGC Energia’) reporting that BNDES Participações S.A. – BNDESPar (‘BNDESPar’) has requested exchange of the totality of the debentures issued under the Deed of AGC Energia’s First Private Issue of Non-convertible Permanent Asset-guaranteed Exchangeable Shareholders’ Debentures, in a single series, dated February 28, 2011 and amended January 17, 2012, for 54,342,992 common shares and 16,718,797 preferred shares in Cemig, owned by AGC Energia, and asking Cemig that all payments to stockholders arising from the shares being exchanged, declared after February 25, 2016 and not paid by February 29, 2016 should be paid directly to BNDESPar.

Cemig will keep its stockholders and the market duly informed on all new information on this subject.

Belo Horizonte, March 1, 2016.

Fabiano Maia Pereira

Diretor de Finanças e Relações com Investidores

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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6. MATERIAL ANNOUNCEMENT DATED MARCH 3, 2016: MATERIAL STOCK TRANSACTION – BNDESPAR

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

MATERIAL ANNOUNCEMENT

MATERIAL STOCK TRANSACTION – BNDESPAR

In accordance with CVM Instruction 358 of January 3, 2002, as amended, Cemig (Companhia Energética de Minas Gerais), a listed company with securities traded on the stock exchanges of São Paulo, New York and Madrid, hereby informs the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (BM&F Bovespa S.A.) and the market in general, as follows:

Cemig has received correspondence from BNDES Participações S.A. – BNDESPar (‘BNDESPar’) with the following content:

 

“1. In accordance with Article 12 of CVM Instruction 358/02 (“the CVM Instruction”) as amended, and CVM Official Circular CVM/SEP/N°002/2015, BNDES Participações S.A. –BNDESPar, a wholly-owned subsidiary of the Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico e Social – BNDES), registered in the CNPJ/MF under Nº 00.383.281/0001-09; with head office in Brasília, Federal District, at Centro Empresarial Parque Cidade, Setor Comercial Sul – SCS, Quadra 9, Torre C, 12th Floor, and offices in Rio de Janeiro, RJ, at Avenida República do Chile 100, hereby informs you as follows:

On March 3, 2016, BNDESPar exchanged the totality of its holding of debentures issued under the Deed of the First Private Issue by AGC Energia of Non-convertible Permanent Asset-guaranteed Exchangeable Shareholders’ Debentures, in a Single Series, dated February 28, 2011 and amended January 17, 2012, for 54,342,992 common shares and 16,718,797 preferred shares in Companhia Energética de Minas Gerais (“Cemig”), owned by AGC Energia.

 

2. After the exchange, the equity interest held by BNDESPar in Cemig — which on March 2, 2016 totaled 0% of the common shares and 1.13% of the preferred shares — increased to 12.9% of the common shares and 3.13% of the preferred shares. Under Article 12, §1º, of CVM Instruction 358/02, this characterizes a material transaction in the stock of Cemig.

 

3. On March 2, 2016 BNDESPar held an equity interest of 0.75% in the total capital of Cemig. This total equity interest has now increased to 6.4%.

 

4. We request you to transmit this information to the market, in accordance with the CVM Instruction.

Cemig will keep stockholders and the market duly informed of all new information on this subject.

Belo Horizonte, March 3, 2016.

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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7. SUMMARY OF PRINCIPAL DECISIONS OF THE 654TH MEETING OF THE BOARD OF DIRECTORS HELD ON MARCH 11, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

BOARD OF DIRECTORS

First meeting of March 11, 2016

SUMMARY OF PRINCIPAL DECISIONS

At its 654th meeting, held on March 11, 2016, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

  Alteration of the value of a loan to Cemig D from the Federal Savings Bank (Caixa Econômica Federal), with guarantee by Cemig.

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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8. SUMMARY OF PRINCIPAL DECISIONS OF THE 655TH MEETING OF THE BOARD OF DIRECTORS HELD ON MARCH 11, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

BOARD OF DIRECTORS

Second meeting of March 11, 2016

SUMMARY OF PRINCIPAL DECISIONS

At its 655th meeting, held on March 11, 2016, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

  Change in the composition of the Executive Board:

Mr. Luiz Fernando Rolla no longer to be Chief Officer for Institutional Relations and Communication; and election of Mr. Luís Fernando Paroli Santos to this office, to serve the rest of the present period of office, that is to say until the first meeting of the Board of Directors after the Annual General Meeting of 2018.

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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9. MATERIAL ANNOUNCEMENT DATED MARCH 16, 2016: MR. CARLOS HENRIQUE WAACK’S RESIGNATION AS CEO OF RENOVA ENERGIA S.A.

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

MATERIAL ANNOUNCEMENT

Cemig (Companhia Energética de Minas Gerais), a listed company with securities traded on the stock exchanges of São Paulo, New York and Madrid, in compliance with CVM Instruction 358 of January 3, 2002, hereby reports to the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (BM&FBovespa S.A.) and the market in general as follows:

On March 15, 2016 Cemig’s affiliated company Renova Energia S.A. (Renova’) published a Material Announcement with the following content:

“ Material Fact

In accordance with CVM Instruction 358/2002 as amended, Renova Energia S.A. (RNEW11) (“Renova” or “the Company”) hereby informs its stockholders and the market that the Board of Directors was informed on this date, of the resignation of Mr. Carlos Henrique Waack from the position of CEO.

On the same date, the Board of Directors elected Cristiano Corrêa de Barros to the position of CEO, who will provisionally cumulate the duties of his current position of CFO, Business Development and Investor Relations Officer.

Belo Horizonte, March 16, 2016

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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10. SUMMARY OF PRINCIPAL DECISIONS OF THE 656TH MEETING OF THE BOARD OF DIRECTORS HELD ON MARCH 28, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

 

BOARD OF DIRECTORS

First meeting of March 28, 2016

SUMMARY OF PRINCIPAL DECISIONS

At its 656th meeting, held on March 28, 2016, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

  Grant of a guarantee for issue of Promissory Notes by Guanhães Energia S.A.

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

22


 

11. SUMMARY OF PRINCIPAL DECISIONS OF THE 657TH MEETING OF THE BOARD OF DIRECTORS HELD ON MARCH 28, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

BOARD OF DIRECTORS

Second meeting of March 28, 2016

SUMMARY OF PRINCIPAL DECISIONS

At its 657th meeting, held on March 28, 2016, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

1. Technical feasibility study.

 

2. Report of Management and Financial Statements for the year 2015.

 

3. Allocation of the net profit for 2015.

 

4. Operational provisions in 2015.

 

5. Orientation of votes in the Annual General Meetings of Cemig D and Cemig GT.

 

6. Legal guarantee insurance, and corresponding counter-guarantee contract.

 

7. Sale of equity interest in Transchile.

 

8. Increase in the share capital of Light SESA; and orientation of vote, in a meeting of the Board of Directors of Light S.A.

 

9. Reduction of share capital, and orientation of vote in Extraordinary General Meeting of Stockholders, of Horizontes Energia S.A.

 

10. Amendment to private instrument of constitution of the exploration consortium.

 

11. Budget for April 2016.

 

12. Calling of Ordinary and Extraordinary General Meetings of Stockholders, to be held concurrently on April 29, 2016 at 11 a.m.

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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12. NOTICE TO SHAREHOLDERS DATED MARCH 29, 2016: ARTICLE 133 OF LAW 6,404 OF DECEMBER 15, 1976

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

BRAZILIAN LISTED COMPANY – CNPJ 17.155.730/0001-64

NOTICE TO SHAREHOLDERS

We advise our shareholders that the documents referred to in article 133 of Law # 6,404 of December 15, 1976, relating to the year 2015, are available for consultation at the head offices of this Corporation located at Av. Barbacena, 1,200, Belo Horizonte.

Belo Horizonte, March 29, 2016

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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13. EARNINGS RELEASE – 2015

 

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2015 RESULTS

CEMIG REPORTS

2015 NET INCOME OF

R$ 2.492 BILLION

Highlights

¡     Cash flow, as measured by Ebitda: R$ 4.9 billion in 2015

¡     2015 Net revenue R$ 21.2 billion

¡     R$ 1.7 billion contribution from CVA/Other financial tariff components in 2015

¡     Gain on Aliança stockholding transaction R$ 729 million in 2015

¡     R$ 1.2 billion provision for loss on investments in the year

 

Indicators (GWh)

   2015      2014      Change %  

Electricity sold, GWh (excluding CCEE)

     56,904         63,470         –10.35   

 

Indicators – R$ ’000

   2015     2014     Change %  

Sales on the CCEE

     2,425        2,348        3.28   

Net debt

     11,732        11,610        1.05   

Gross revenue

     32,842        25,165        30.51   

Net revenue

     21,292        19,540        8.97   

Ebitda (IFRS)

     4,954        6,381        –22.36   

Net income

     2,492        3,137        –20.56   

Profit per share

     1.98        2.49        –20.48   

Ebitda margin

     23.27     32.66     –9.39 p.a.   

 

 


 

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Conference call

Publication of 2015 results

Video webcast and conference call

March 30, 2016 – Wednesday – at 11 am (Brasília time)

This transmission on Cemig’s results will have simultaneous translation into English and can be seen in real time by Video Webcast, at http://ri.cemig.com.br or heard by conference call on:

+ 55 (11) 2188-0155 (1st option) or

+ 55 (11) 2188-0188 (2nd option)

Password: CEMIG

 

Playback of Video Webcast:

Site:

http://ri.cemig.com.br

Click on the banner and download.

Available for 90 days

 

  

Conference call – Playback:

Telephone: (+55-11) 2188-0400

Password:

CEMIG Português

Available from March 30 to April 13, 2016

Cemig Investor Relations

http://ri.cemig.com.br/

ri@cemig.com.br

Tel.:(+55-31) 3506-5024

Fax:(+55-31) 3506-5025

Cemig’s Executive Investor Relations Team

 

¡ Chief Finance and Investor Relations Officer

Fabiano Maia Pereira

 

¡ General Manager, Investor Relations

Antônio Carlos Vélez Braga

 

¡ Manager, Investor Market

Robson Laranjo

 

 

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Contents

 

CONFERENCE CALL

     29   

CEMIG INVESTOR RELATIONS

     29   

CEMIG’S EXECUTIVE INVESTOR RELATIONS TEAM

     29   

CONTENTS

     30   

DISCLAIMER

     31   

CEMIG STOCK PRICE PERFORMANCE

     32   

CEMIG: LONG TERM RATINGS

     33   

ADOPTION OF IFRS

     33   

CEMIG’S CONSOLIDATED ELECTRICITY MARKET

     35   

THE ELECTRICITY MARKET OF CEMIG D

     37   

THE ELECTRICITY MARKET OF CEMIG GT

     39   

PHYSICAL TOTALS OF TRANSPORT AND DISTRIBUTION – MWH

     40   

QUALITY INDICATORS – SAIDI AND SAIFI

     40   

CONSOLIDATED OPERATIONAL REVENUE

     41   

TAXES AND CHARGES APPLIED TO REVENUE

     43   

OPERATIONAL COSTS AND EXPENSES

     44   

FINANCIAL REVENUE (EXPENSES)

     49   

EBITDA

     50   

DEBT

     51   

THE CEMIG GROUP’S PORTFOLIO OF GENERATION ASSETS

     53   

FINANCIAL STATEMENTS SEPARATED BY COMPANY AND BY OPERATIONAL SEGMENT

     54   

GENERATING PLANTS

     56   

GENERATION PLANTS: CONCESSION CONTRACT EXPIRY PERIODS

     57   

EXCHANGE OF SHAREHOLDERS’ DEBENTURES OWNED BY AGC ENERGIA FOR SHARES IN CEMIG

     58   

GENERATION: ANNUAL PERMITTED REVENUE (RAP)

     60   

APPENDICES

     61   

 

 

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Disclaimer

Certain statements and estimates in this material may represent expectations about future events or results, which are subject to risks and uncertainties that may be known or unknown. There is no guarantee that the events or results will take place as referred to in these expectations.

These expectations are based on the present assumptions and analyses from the point of view of our management, in accordance with their experience and other factors such as the macroeconomic environment, market conditions in the electricity sector, and expected future results, many of which are not under Cemig’s control.

Important factors that could lead to significant differences between actual results and the projections about future events or results include Cemig’s business strategy, Brazilian and international economic conditions, technology, Cemig’s financial strategy, changes in the electricity sector, hydrological conditions, conditions in the financial and energy markets, uncertainty on our results from future operations, plans and objectives, and other factors. Due to these and other factors, Cemig’s results may differ significantly from those indicated in or implied by such statements.

The information and opinions herein should not be understood as a recommendation to potential investors, and no investment decision should be based on the veracity, currentness or completeness of this information or these opinions. None of Cemig’s professionals nor any of their related parties or representatives shall have any liability for any losses that may result from use of the content of this material.

To evaluate the risks and uncertainties as they relate to Cemig, and to obtain additional information about factors that could give rise to different results from those estimated by Cemig, please consult the section on Risk Factors included in the Reference Form filed with the Brazilian Securities Commission – CVM – and in the 20-F form filed with the U.S. Securities and Exchange Commission – SEC.

 

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Cemig stock price performance

 

Security

   Ticker    Currency      Close of 2015      Close of 2014      Change in the
period %
 

Cemig PN

   CMIG4      R$         5.97         12.40         -51.86

Cemig ON

   CMIG3      R$         6.28         13.04         -51.84

ADR PN

   CIG      US$         1.46         4.60         -68.38

ADR ON

   CIG.C      US$         1.74         5.11         -65.96

Ibovespa

   Ibovespa      -         43,349         50,007         -13.31

IEEX

   IEEX      -         24,803         27,161         -8.68

 

Source: Economática.

Trading volume in Cemig’s preferred shares (CMIG4) totaled R$ 10.93 billion in full-year 2015, a daily average of R$ 44.46 million. At this level, Cemig continues to be one of the most liquid companies in the Brazilian electricity sector, and one of the most traded in the Brazilian capital markets.

On the New York Stock Exchange, the volume traded in ADRs for Cemig’s preferred shares (CIG) in full-year 2015 was US$ 3.11 billion. We see this as reflecting recognition by the investor market of Cemig as a global investment option.

The São Paulo stock exchange Ibovespa index was down 13.31% in 2015, closing the year at 43,349 points. The negative result directly reflects Brazil’s current adverse economic phase.

Cemig’s shares underperformed the Ibovespa. Over the year the price of Cemig’s common shares (Cemig ON) declined 51.84%, and the preferred stock (Cemig PN) was down 51.86%. A major factor adversely affecting Cemig’s stock price was the conclusion, with a judgment against Cemig, of the legal action on the Jaguara Hydroelectric Plant in the Higher Appeal Court (STJ), even though the case has now been taken to the Federal Supreme Court on an appeal. Other factors affecting the stock price in the year included: designation by the Mining and Energy Ministry (published September 15), of Cemig GT as responsible for operation of the São Simão hydroelectric plant under the quota regime; the fall in electricity consumption; the water supply crisis affecting the country; and the country’s macroeconomic situation.

 

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Cemig: long term ratings

This table shows credit risk ratings and outlook for Cemig’s companies as provided by the principal rating agencies:

Brazilian ratings:

 

Agency

   Cemig    Cemig D    Cemig GT
     Rating    Outlook    Rating    Outlook    Rating    Outlook

Fitch

   AA–(bra)    Negative    AA–(bra)    Negative    AA–(bra)    Negative

S&P

   brA    Negative    brA    Negative    brA    Negative

Moody’s

   A2.br    Negative    A2.br    Negative    A2.br    Negative

Global ratings:

 

Agency

   Cemig    Cemig D    Cemig GT
     Rating    Outlook    Rating    Outlook    Rating    Outlook

S&P

   BB–    Negative    BB–    Negative    BB–    Negative

Moody’s

   Ba3    Negative    Ba3    Negative    Ba3    Negative

 

(Fitch gives only Brazilian – not global – ratings.)

On February 25, 2016, Moody’s downgraded its Brazilian ratings for Cemig, its wholly-owned subsidiaries Cemig D and Cemig GT, and their debenture issues from Aa2.br to A2.br; and their global ratings from Ba1 to Ba3, changing the outlook to negative.

Adoption of IFRS

The results presented below are prepared in accordance with the new Brazilian accounting rules, which embody a process of harmonization between Brazilian accounting rules and IFRS (International Financial Reporting Standards).

 

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PROFIT AND LOSS ACCOUNTS

 

Consolidated – R$ ’000

   2015     2014     Change %  

REVENUE

     21,292,211        19,539,578        8.97   
      

OPERATIONAL COSTS

      

Personnel

     (1,435,001     (1,252,458     14.57   

Employees’ and managers’ profit shares

     (137,364     (249,369     -44.92   

Post-retirement liabilities

     (156,009     (211,916     -26.38   

Materials

     (69,522     (98,660     -29.53   

Raw materials and inputs for production of electricity

     (83,723     (282,447     -70.36   

Outsourced services

     (899,470     (953,033     -5.62   

Electricity purchased for resale

     (9,541,940     (7,428,381     28.45   

Depreciation and amortization

     (834,830     (800,918     4.23   

Operational provisions

     (1,401,455     (580,720     141.33   

Charges for use of national grid

     (998,756     (744,431     34.16   

Gas bought for resale

     (1,050,925     (254,488     312.96   

Infrastructure construction costs

     (1,251,836     (941,795     32.92   

Other operational expenses, net

     (457,159     (651,993     -29.88   
  

 

 

   

 

 

   

 

 

 

TOTAL COST

     (18,317,990     (14,450,609     26.76   
      

Equity gain (loss) in subsidiaries

     415,865        210,484        97.58   

Fair value gain (loss) on stockholding transaction

     729,442        —          —     

Gain (loss) on combination of businesses

     —          280,945        —     
      

Operational profit before Financial revenue (expenses) and taxes

     4,119,528        5,580,398        -26.18   
      

Financial revenues

     1,469,277        592,684        147.90   

Financial expenses

     (2,204,344     (1,693,672     30.15   
  

 

 

   

 

 

   

 

 

 

Pretax profit

     3,384,461        4,479,410        -24.44   
      

Current and deferred income tax and Social Contribution tax

     (892,583     (1,342,507     -33.51   
  

 

 

   

 

 

   

 

 

 

NET INCOME FOR THE PERIOD

     2,491,878        3,136,903        -20.56   
  

 

 

   

 

 

   

 

 

 

Interest of the controlling stockholders

     2,491,375        3,136,639     

Interest of non-controlling stockholder

     503        264     
  

 

 

   

 

 

   
     2,491,878        3,136,903        -20.56   
  

 

 

   

 

 

   

NET INCOME FOR THE PERIOD

     2,491,878        3,136,903        -20.56   
  

 

 

   

 

 

   
      

Fair value gain (loss) on stockholding transaction

     (573,182     —       

Transmission indemillionity revenue

     —          (235,421  

Employment-law provision – 2012 annual salary increase

     —          84,091     

Equity method less – Madeira Energia

     —          167,022     

Gain (loss) on combination of businesses – Gasmig

     —          (185,424  
  

 

 

   

 

 

   

ADJUSTED NET INCOME FOR THE PERIOD

     1,918,696        3,125,205        -38,61   

 

* AFAC = Advance against future capital increase.

 

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Cemig’s consolidated electricity market

The Cemig Group sells electricity through its distribution company, Cemig Distribuição (‘Cemig D’), its generation and transmission company Cemig Geração e Transmissão (‘Cemig Generation and Transmission’, or ‘Cemig GT’), and the wholly-owned subsidiaries Horizontes Energia, Termelétrica Ipatinga (up to January 2015), Sá Carvalho, Termelétrica de Barreiro, Cemig PCH, Rosal Energia and Cemig Capim Branco Energia (up to March 2015).

Total sales reported for Cemig’s consolidated electricity market comprises sales to:

 

(I) captive consumers in Cemig’s concession area in the State of Minas Gerais;

 

(II) Free Consumers in both the State of Minas Gerais and other States of Brazil, in the Free Market (Ambiente de Contratação Livre, or ACL);

 

(III) other agents of the electricity sector – traders, generators and independent power producers, also in the ACL;

 

(IV) Distributors, in the Regulated Market (Ambiente de Contratação Regulada, or ACR); and

 

(V) the Wholesale Trading Chamber (Câmara de Comercialização de Energia Elétrica, or CCEE)

( – eliminating transactions between companies of the Cemig Group).

In 2015 this Cemig group sold a total volume of 56,903,594 MWh, which was 10.3% less than in 2014.

Overall, electricity consumption in 2015 was affected by adverse Brazilian political and economic circumstances; and, in the captive market, by the successive increases in electricity rates charged to consumers, associated with application of the ‘Tariff Flag’ system – resulting in significant increases in consumers’ electricity invoices.

Sales to distributors, traders, other generating companies and independent power producers totaled 10,831,194 MWh – or 23.4% less than in 2014.

 

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In December 2015 the Cemig Group invoiced 8,079,771 customers – a growth of 0.9% in the customer base in the year since December 2014. Of these, 8,079,719 were final consumers (including Cemig’s own consumption); and 52 were other agents of the Brazilian electricity sector.

This chart shows the breakdown of sales to final consumers of the Cemig Group in the quarter, by consumer category:

 

LOGO

Total consumption of electricity (GWh)

 

LOGO

The volume of electricity sold to final consumers of Cemig in 2015 was 10.35% lower than in 2014.

 

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Consolidated

   MWh      Change, %      Average
price

2015
R$
     Average
price

2014
R$
 
   2015      2014           

Residential

     9,829,992         10,013,757         –1.84         742.38         517.60   

Industrial

     22,968,931         26,025,584         –11.74         251.67         184.18   

Commercial, Services and Others

     6,433,728         6,395,473         0.60         614.94         435.57   

Rural

     3,379,734         3,390,096         –0.31         416.18         267.97   

Public authorities

     892,368         891,454         0.10         613.77         427.55   

Public lighting

     1,325,525         1,298,047         2.12         401.81         275.72   

Public service

     1,204,461         1,272,365         –5.34         448.66         289.33   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal

    

 

46,036,754

4,739

  

  

     49,286,776         –6.60         435.80         299.83   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Own consumption

     37,661         37,590         0.19         —           —     

Wholesale supply to agents in Free and Regulated Markets ( * )

     10,831,194         14,146,109         –23.43         197.90         159.16   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     56,903,594         63,470,475         –10.35         395.87         271.50   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(*) Includes Regulated Market Electricity Sale Contracts (CCEARs) and ‘bilateral contracts’ with other agents.

The electricity market of Cemig D

Electricity billed to captive clients and electricity transported for Free Clients and distributors with access to Cemig D’s networks totaled 42,124 GWh in 2015, or 5.3% less than in 2014.

There are two components of this reduction: Consumption by the captive market 2.1% lower in the year; and use of the network by Free Clients 10.2% lower by volume.

Overall, consumption of electricity in 2015 was affected by adverse Brazilian political and economic circumstances; and, in the captive market, by the successive increases in electricity rates charged to consumers, associated with application of the ‘Tariff Flag’ system, resulting in significant increases in consumers’ electricity invoices.

In December 2015 Cemig billed 8,079,645 consumers, or 0.9% more than in December 2014. Of this total, 422 are Free Consumers using Cemig D’s distribution network.

Comments on the various consumer categories:

 

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Residential

Residential consumption was 17.27% of the total volume of electricity transacted by Cemig, and totaled 9,830 GWh, or 1.84% less than in 2014.

Average monthly consumption per consumer in 2015 was 126.5 KWh/month, or 3.6% less than the average in 2014 (131.2 KWh/month) – this is the first year-on-year reduction in this variable since 2008.

Industrial

Electricity used by captive industrial clients was 7.84% lower in total volume than in 2014, and the total of electricity transported for Free Clients was 10.0% lower.

The main Brazilian and international macroeconomic factors that could have influenced consumption by the industrial sector are:

 

  ¡ In Brazil: Retraction of domestic demand, accumulation of inventories, idle manufacturing capacity, loss of competitiveness, reduction of the number of employees and/or reduction of the use of labor (e.g. forced vacations, shorter work shifts), lack of entrepreneur confidence, low levels of public and private investment, uncertainties in the Brazilian political and economic situation, high cost of corporate credit due to high interest rates, and banks being more selective in granting loans.

 

  ¡ International: Lower exports due to lower external demand.

In manufacturing there was a reduction in consumption across all sectors – led by: steel (–2.0%), non-metallic minerals (–7.7%), chemicals (–9.6%), ferroalloys (–44.6%), non-ferrous metals (–10.8%), auto industry (–16.1%), and textiles (–11.9%).

The year-on-year comparison is affected by two factors in 2014: (i) a group of Free Clients migrated to the national grid; and (ii) some Free Clients stopped using the Cemig D network.

 

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The electricity market of Cemig GT

One factor in Cemig GT’s total sales volume in 2015 was termination of concession of plants. Following this change, payment for the output from these plants was redirected to the Physical Guarantee Quota regime, and to settlement on the spot market.

Cemig GT’s market comprises sales of power as follows:

 

  (I) sales in the Free Market, to Free Clients, in Minas Gerais or other States;

 

  (II) sales in the Free Market to other agents in the electricity sector – traders, generators and independent power producers;

 

  (III) sales to electricity distributors (in the Regulated Market); and

 

  (IV) sales in the CCEE (Electricity Trading Chamber).

The total supply billed by Cemig GT in 2015 was 29,966 GWh, or 15.6% less than in 2014.

Free Clients consumed 18,832 GWh in 2015, 11.8% less than in 2014, reflecting:

 

  ¡ termination of contracts with clients at the end of 2014 that were not renewed with Cemig GT; and

 

  ¡ reduction of consumption by clients due to weak demand in the Brazilian economy, with lower domestic demand for goods and services, also affected by the speed of recovery of the international market.

Cemig GT added 28 new free market clients in 2015, mainly outside Minas Gerais.

Trading of electricity to other agents in the electricity sector in the Free Market totaled 6,443 GWh in 2015, 24.5% less than in 2014; and the total sold in the Regulated Market was 4,690 GWh, 16.9% less than in 2014.

 

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Physical totals of transport and distribution – MWh

 

Description

   MWh      Change, %  
   2015      2014     

Total energy carried

     48,067,296         49,899,186         –3.67   

Electricity transported for distributors

     361,487         355,204         7.84   

Electricity transported for free clients

     15,315,122         16,736,754         –8.47   

Own load

        

Consumption by captive market

     26,453,478         27,010,669         –2.06   

Losses in distribution network

     5,933,209         5,816,560         2.01   

QUALITY INDICATORS – SAIDI AND SAIFI

Cemig is continuously taking action to improve operational management, organization of the logistics of its emergency services, and its permanent regime of preventive inspection and maintenance of substations, lines and distribution networks. It also invests in training of its staff for improvement of qualifications, state-of-the-art technologies, and standardization of work processes, aiming to uphold the quality of electricity supply, and as a result maintain the satisfaction of clients and consumers.

The charts below show Cemig’s indicators for duration and frequency of outages – SAIDI (System Average Interruption Duration Index, in hours), and SAIFI (System Average Interruption Frequency Index, in number of outages), since January 2014. These results reflect the investments made by the company in preventive maintenance, such as cleaning of power line pathways, tree pruning, replacement of cross-arms, maintenance of structures, replacement of poles, transformers and cables, and other work such as network shielding, and overhaul and interconnection of circuits. Another important initiative is the change of technological level, with systematic investment in automation of the electricity system, which will enable automatic remote re-establishment of supply after outages.

 

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Consolidated operational revenue

Revenue from supply of electricity:

Total revenue from supply of electricity to final consumers in 2015 was R$ 22.526 billion, or 30.72% more than the total revenue of R$ 17.232 billion in 2014.

Final consumers

Total revenue from electricity sold to final consumers, excluding Cemig’s own consumption, was R$ 20.319 billion in 2015 – or 36.17% more than the total of R$ 14.922 billion in 2014.

The main factors affecting revenue were:

 

  ¡ The Annual Tariff Adjustment for Cemig D, with average effect of 14.76% on consumer tariffs, effective from April 8, 2014 (full effect in 2015).

 

  ¡ The Extraordinary Tariff Adjustment for Cemig D, which resulted in an average impact on consumers’ tariffs of 28.76%, applicable from March 2, 2015.

 

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¡ The Annual Tariff Adjustment effective from April 8, 2015, with average effect on consumer tariffs of 7.07%.

 

¡ Creation, in 2015, of the ‘Tariff Flag’ mechanism – at the following rates per 100 kWh consumed: (i) as from January 2015, R$ 1.50 per 100kWh for the Yellow Flag tariff, and R$ 3.00 for the Red Flag tariff; (ii) as from March 2015, R$ 2.50 per 100kWh for the Yellow Flag tariff and R$ 5.50 for the Red Flag tariff; and finally (iii) from September 2015, R$ 2.50 for the Yellow Flag tariff and R$ 4.50 for the Red Flag tariff. In practice, the Red Flag rates were in effect for the whole of 2015.

 

¡ Total volume of electricity sold in 2015 was 10.35% lower than in 2014.

 

     R$      Change
%
     Average
price

2015
R$
     Average
price

2014
R$
     Change
%
 
   2015     2014              

Residential

     7,297,557        5,183,149         40.79         742.38         517.60         43.43   

Industrial

     5,780,660        4,793,414         20.60         251.67         184.18         36.64   

Commercial, Services and Others

     3,956,344        2,785,659         42.03         614.94         435.57         41.18   

Rural

     1,406,590        908,436         54.84         416.18         267.97         55.31   

Public authorities

     547,707        381,144         43.70         613.77         427.55         43.55   

Public lighting

     532,603        357,892         48.82         401.81         275.72         45.73   

Public service

     540,338        368,136         46.79         448.66         289.33         55.07   
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal

     20,061,849        14,777,830         35.76         435.80         299.83         45.35   

Supply not yet invoiced, net

     256,753        144,162         78.10         —           —           —     

Wholesale supply to other concession holders (*)

     2,358,466        2,251,431         4.75         217.75         159.16         24.34   

Wholesale supply not yet invoiced, net

     (150,793     58,682         —           —           —           —     
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     22,526,275        17,232,105         30.72         395.87         271.50         45.81   
  

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(*) Includes Regulated Market Electricity Sale Contracts (CCEARs) and ‘bilateral contracts’ with other agents.

Revenue from Use of Distribution Systems (the TUSD charge)

The revenue of Cemig D (Distribution) from the TUSD in 2015 was R$ 1.465 billion, or 71.35% higher than in 2014 (R$ 855 million). This reflects the impact of the tariff adjustments in 2015 – an increase of 96.21% for Free Consumers. The 2015 increases were mainly due to passing through of the CDE (Energy Development Account) amounts to the tariffs paid by consumers. The effect of the increase in tariffs was partially offset by the effect of lower activity in the industrial sector – which consumed 11.74% less electricity, year-on-year, in the period.

 

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Revenue from transactions in the Wholesale Trading Chamber (CCEE)

Revenue from transactions in electricity on the CCEE was R$ 2.425 billion in 2015, compared to R$ 2.348 billion in 2014 – an increase of 3.28%. The components of this figure were: Higher total volume sold, at 7,157,641 MWh in 2015 – compared to 3,354,224 MWh in 2014; and the Spot Price (Preço de Liquidação de Diferenças – PLD) in the wholesale market 58.31% lower (at R$ 287.20/MWh in 2015, vs. R$ 688.89/MWh in 2014).

CVA and Other financial components in the tariff adjustment calculation

Due to the alteration in the concession contracts of the distributors, Cemig started to recognize certain balances of non-controllable costs to be passed through to Cemig D’s next tariff adjustment – these represented an operational revenue of R$ 1.704 billion in 2015, compared to R$ 1.107 billion in 2014.

Revenue from supply of gas

Cemig reports revenue from supply of gas totaling R$ 1.667 billion in 2015, compared to R$ 422 million in 2014 – an increase of 295.02%. The variation basically reflects the fact that figures for Gasmig began to be consolidated into Cemig’s results in October 2014.

Taxes and charges applied to Revenue

The sector charges that are effectively deductions from reported revenue were 105.28% higher in 2015, at R$ 11.549 billion – compared to R$ 5.626 billion in 2014. The increase mainly reflects the higher charges under the Energy Development Account (CDE), and also the Tariff Flag charges.

The Energy Development Account – CDE

Payments to the Energy Development Account (CDE) are decided by an Aneel Resolution. The expenses included are: concession indemillionities, tariff subsidies, the subsidy for balanced tariff reduction, the low-income consumer subsidy, the coal consumption subsidy, and the Fuels Consumption Account (CCC).

 

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Charges for the CDE in 2015 were R$ 2.870 billion, compared to R$ 211 million in 2014. This is the result of the new budget for the CDE in 2015, in which Aneel increased the annual amount to be paid by Cemig D, which is passed through to the consumer in the Sector Charges component of tariffs.

Consumer charges – the ‘Tariff Flag’ system

In 2015, with the Tariff Flag mechanism coming into force, Cemig had an account under Consumer Charges related to the Tariff Flag payments, totaling R$ 1.067 billion.

The ‘Flag Account’ (Conta Bandeira) was created on February 5, 2015, to manage the funds collected from captive customers of utilities holding electricity distribution concessions and permissions – these funds are paid, on account of the CDE, directly to the Flag Account. The Wholesale Trading Chamber (CCEE) passes the proceeds through to distribution agents, based on the difference between the realized amounts of costs of thermal generation and the exposure to spot prices, and the amount covered by the tariff.

The other deductions from revenue are taxes, calculated as a percentage of amounts invoiced. Thus their variations are, substantially, proportional to the changes in revenue.

Operational costs and expenses

Operational costs and expenses, excluding Financial revenue (expenses), totaled R$ 18.318 billion in 2015, compared to R$ 14.451 billion in 2014 – an increase of 26.76%.

 

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The following paragraphs comment on the main variations:

Electricity purchased for resale

The expense on electricity bought for resale in 2015 was R$ 9.542 billion, or 28.46% more than in 2014 (R$ 7.428 billion). Over the course of 2015, this cost has been more than 50% of the Company’s total costs. The main factors in the higher figure are:

Cemig D:

 

  ¡ Expense on electricity acquired in auctions 20.74% higher, at R$ 4.098 billion, in 2015, compared to R$ 3.394 billion in 2014 – arising mainly from availability contracts, due to the expenditure on fuel for generation by the thermal plants.

 

  ¡ Expense on electricity from Itaipu Binacional was 108.92% higher. This amount is indexed to the US dollar, and was R$ 1.734 billion in 2015, compared to R$ 830 million in 2014. This reflects both an increase in the tariff – which was US$ 26.05/kW-month in 2014, and rose to US$ 38.07/kW-month as from January 2015 – and also the increase in the dollar exchange rate against the Real from 2014 to 2015. The average exchange rate used for the dollar in invoices in 2015 was R$ 3.38, compared to R$ 2.35 in 2014 – an increase of 43.83%.

 

  ¡ Purchases of supply in the short-term market were 24.67% lower – at R$ 849 million in 2015, compared to R$ 1.127 billion in 2014, due to the lower cost of electricity in the wholesale market in 2015.

 

 

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Cemig GT:

The expense on electricity bought for resale in 2015 was R$ 2.601 billion, or 53.72% more than in 2014 (R$ 1.692 billion). The difference mainly reflects electricity bought for resale 48.10% higher in 2015 (at 15,273,685 MWh), than in 2014 (10,313,226 MWh) – reflecting lower generation capacity, with the termination of the concessions of some plants.

Operational provisions

Operational provisions in 2014 totaled R$ 1.401 billion, compared to R$ 581 million in 2014, an increase of 141.14%. This change mainly reflected a provision of R$ 1.079 billion made in 2015 for losses relating to the put options for the equity interests in Parati and a provision of R$ 119 million for SAAG – Santo Antonio Investment.

 

  a) Put options for Units in FIP Melbourne

Option contracts for sale of Units (‘put options’) were signed between Cemig GT and the pension plan entities that participate in the investment structure of SAAG, which those entities may exercise in the 84th month from June 2014. The exercise price of the put options will correspond to the amount invested by each pension plan company in the Investment Structure, updated pro rata temporis by the IPCA inflation index (Índice National de Preços ao Consumidor Amplo, published by the Brazilian Geography and Statistics Institute – IBGE), plus 7% per year, less such dividends and Interest on Equity as have been paid by SAAG to the pension plan entities.

 

 

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To decide the method to be used for measuring the fair value of the put options, since Madeira Energia is an unlisted company, the Company adopted the discounted cash flow method to measure the fair value of those options. The fair value of this option has been calculated on the basis of the estimated exercise price on the day of exercise of the option, less the fair value of the shares that are the subject of the put option, also estimated for the date of exercise, brought to present value at the interim reporting date, at the effective rate of 8% p.a. (discounting inflation effects). Based on the studies made, the amount of R$ 148 million is recorded in Cemig GT as the best estimate of the loss on these options.

 

  b) FIP Redentor

Cemig has granted to Fundo de Participações Redentor, which is a stockholder of Parati, an option to sell the totality of the shares which that fund holds in Parati, exercisable in May 2016. The price of the option is calculated using the sum of the value of the injections of capital by the fund into Parati, plus the running expenses of the fund, less any Interest on Equity, and dividends, distributed by Parati. The exercise price is subject to monetary updating by the CDI (Interbank CD) Rate plus financial remuneration at 0.9% per year.

For the purposes of determining the method to be used to measure the fair value of this option, the Company observed the daily trading volume of the shares of Light, and also the fact that such option, if exercised by the Fund, will require the sale to the Company, in a single transaction, of shares in Light in a quantity higher than the daily exchange trading averages. Thus, the Company has adopted the discounted cash flow method for measurement of the fair values of the option. The fair value of this option has been calculated on the basis of the estimated exercise price on the day of exercise of the option, less the fair value of the underlying shares, also estimated for the date of exercise, brought to present value at the interim reporting date, at the effective rate of 7.5% p.a. (discounting inflation effects).

Based on the studies carried out, a liability in the amount of R$ 1.245 billion has been recorded in the financial statements, for the best estimate of the loss on this option.

 

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Personnel

Personnel expenses were R$ 1.435 billion in 2015, compared to R$ 1.252 billion in 2014, an increase of 14.62%. This arises mainly from the following items:

 

  ¡    Salary increases, under the Collective Agreement, of 6.34%, coming into effect in November 2014 (full effect in 2015).

 

  ¡    Salary increases of 3% from March 2015, as a result of the collective negotiation decided by the courts on application from organizations representing the employees.

 

  ¡    Salary adjustments applied at the 10.33%, from November 2015, under the Collective Agreement.

Cemig: number of employees

 

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Gas bought for resale

The expense that Cemig reports for Gas bought for resale was R$ 1.051 billion in 2015, vs. R$ 254 million in 2014. Cemig started consolidating the results of Gasmig in October 2014, after Cemig acquired the 40% interest in Gasmig held by Petrobras.

 

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Raw materials and inputs for production of electricity

The expense on raw material and inputs for production of electricity in 2015 was R$ 84 million, compared to R$ 282 million in 2014 – a reduction of 70.21%. This reflects the temporary stoppage of the Igarapé thermal plant in 2015, due to the need for maintenance and installation of new equipment, and the federal government’s decision to stop generation by thermal plants that have the highest Variable Unit Cost (CVU).

Financial revenue (expenses)

 

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Cemig reports net financial expenses of R$ 735million in 2015, compared to net financial expenses of R$ 1.101 billion in 2014. The main factors are:

 

  ¡ Recognition, as from 2015, of the foreign exchange variation and monetary updating on the balances of the CVA and the Other financial components elements of tariff adjustments, representing and increase in financial revenue of R$ 68 million in 2015.

 

  ¡ A higher gain on updating of financial assets of the Remuneration Base of Assets (Base Regulatória de Remuneração, or BRR): R$ 606 million in 2015, vs. R$ 58 million in 2014. In November 2015 Aneel ordered an alteration of the indexor of the BRR, from the IGP-M inflation index to the IPCA inflation index. This change generated an updating adjustment backdated to January 2013. The effect of this change in financial revenue recorded in December 2015 was R$ 143 million. This difference also arises from the higher variation in the present indexor of the BRR – the IPCA index – which was 10.67% in 2015, compared to variation of 3.69% in the IGP-M index in 2014. Additionally, in June 2014 there was a reversal in the monetary updating of the BRR, totaling R$ 110 million, due to the final, definitive, homologation of the value of the BRR of Cemig D.

 

 

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  ¡ Recognition, starting in 2015, of monetary updating on deposits linked to legal actions, representing a gain in financial revenue of R$ 212 million in 2015.

 

  ¡ Higher expenses of exchange rate variations on loans and financings, and on Itaipu Binacional, which totaled R$ 172 million in 2015, vs. R$ 26 million in 2014. This mainly reflects the effects on Cemig D of the higher variation of the US dollar in 2015 (47.01% in full-year 2015, compared to 13.39% in 2014);

 

  ¡ Charges for loans and financings 48.44% higher, at R$ 1.382 billion in 2015, compared to R$ 931 million in 2014. This mainly reflects higher debt indexed to the CDI Rate; and also the higher CDI rate itself, in 2015 – representing 13.23% in the year, compared to 10.81% in 2014.

 

  ¡ Expense on monetary updating of loans and financings 42.80% higher, at R$ 387 million in 2015, compared to R$ 271 million in 2014. This is mainly the effect of higher variation in the IPCA inflation index in the period (10.67% in 2015, compared to 6.41% in 2014).

Ebitda

Cemig’s consolidated Ebitda in 2015 was 22.36% lower than in 2014. This mainly reflects operational costs and expenses (excluding depreciation and amortization) 28.08% higher in 2015 – an outstanding element of this expense being provisions totaling R$ 1.198 billion for losses on investments.

 

Ebitda – R$ ’000

   2015      2014      Change, %  

Profit (loss)

     2,491,878         3,136,903         -20.56   

+ Income tax and Social Contribution tax

     892,583         1,342,507         -33.51   

+ Net financial revenue (expenses)

     735,067         1,100,988         -33.24   

+ Depreciation and amortization

     834,830         800,918         4.23   
  

 

 

    

 

 

    

 

 

 

= Ebitda

     4,954,358         6,381,316         -22.36   
  

 

 

    

 

 

    

 

 

 

 

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DEBT

 

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The Company’s consolidated total debt on December 31, 2015 was R$ 15.167 billion, 12.27% more than at December 31, 2014.

 

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THE CEMIG GROUP’S PORTFOLIO OF GENERATION ASSETS

 

Cemig – generation portfolio, in MW*

 

Stage

   Hydro plants      Small Hydro Plants      Wind power      Solar      Thermal plants      Total  

In operation

     7,195         257         158         31         144         7,785   

Under construction / contracted

     1,699         29         658         45         –           2,431   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     8,894         286         816         76         144         10,216   

 

* The amounts refer only to direct or indirect equity interests held by Cemig on December 31, 2015.

4Q15 HIGHLIGHTS:

Santo Antônio Hydroelectric Plant

Rotor 35 of the Santo Antônio Hydroelectric plant started operation in December. The original physical offtake guarantee level of 2,218 MW average was reached in September 2014.

 

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FINANCIAL STATEMENTS SEPARATED BY COMPANY AND BY OPERATIONAL SEGMENT

 

FINANCIAL STATEMENTS SEPARATED BY COMPANY: DECEMBER 31, 2015

 

R$ ’000

   Holding
Company
    CEMIG
GT
    CEMIG D     GASMIG     CEMIG
TELECOM
   
CARVALHO
    ROSAL     Other
subsidiaries
    Eliminations
/ transfers
    Total,
subsidiaries
    TAESA     LIGHT     MADEIRA     ALIANÇA
GERAÇÃO
    Other
jointly-
controlled
subsidiaries
    Eliminations/
transfers
    Subsidiaries
and jointly-
controlled
subsidiaries
 

ASSETS

     16,342,013        15,369,754        16,191,234        2,054,460        317,346        152,827        129,487        264,987        (9,942,144     40,879,964        4,728,754        5,052,431        2,496,533        1,044,606        4,575,766        (7,871,106     50,906,948   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents

     256,484        283,703        318,834        33,746        5,015        1,254        1,082        24,514        —          924,632        130,575        196,844        29,996        31,394        126,019        —          1,439,460   

Accounts receivable

     —          1,008,021        2,785,980        88,774        16,172        5,774        3,617        5,568        (15,738     3,898,168        100,346        787,420        30,093        70,590        52,748        (14,715     4,924,650   

Securities – cash investments

     129,665        1,916,804        288,759        71,381        17,655        6,126        4,902        75,020        —          2,510,312        1,588        —          —          —          54,446        —          2,566,346   

Taxes

     995,131        142,328        1,227,384        59,741        17,255        136        449        685        —          2,443,109        309,497        410,182        67,323        2,568        13,523        —          3,246,202   

Other assets

     1,532,377        853,410        1,671,470        471,741        4,957        4,905        1,277        30,770        (983,817     3,587,090        154,536        842,237        151,648        27,017        383,640        (204,864     4,941,304   

Investments, PP&E, Intangible and Financial assets of concession

     13,428,356        11,165,488        9,898,807        1,329,077        256,292        134,632        118,160        128,430        (8,942,589     27,516,653        4,032,212        2,815,748        2,217,473        913,037        3,945,390        (7,651,527     33,788,986   

LIABILITIES AND STOCKHOLDERS’ EQUITY

     16,342,013        15,369,754        16,191,234        2,054,460        317,346        152,827        129,487        264,987        (9,942,144     40,879,964        4,728,754        5,052,431        2,496,533        1,044,606        4,575,766        (7,871,106     50,906,948   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Suppliers and supplies

     8,765        331,823        1,307,893        244,551        11,405        7,670        4,210        5,318        (20,482     1,901,153        22,102        472,122        144,636        16,528        171,518        (106,904     2,621,155   

Loans, financings and debentures

     —          7,739,072        7,020,042        368,398        39,023        —          —          2        —          15,166,537        1,860,409        2,468,539        1,451,202        —          1,215,707        —          22,162,394   

Interest on Equity, and dividends

     1,318,022        728,832        185,105        45,667        —          2,464        —          90        (961,927     1,318,253        5,012        43,966        —          —          21,779        (70,757     1,318,253   

Post-retirement liabilities

     303,191        721,470        2,228,710        —          —          —          —          —          —          3,253,371        —          10,436        —          —          —          —          3,263,807   

Taxes

     53,123        759,122        1,742,350        306,265        10,381        38,975        2,782        10,115        —          2,923,113        837,599        486,479        37,982        17,414        73,965        —          4,376,552   

Other liabilities

     1,663,777        394,928        1,011,285        167,028        87,531        792        674        9,580        (17,171     3,318,424        107,285        374,205        137,604        140,148        79,535        8,473        4,165,674   

STOCKHOLDERS’ EQUITY

     12,995,135        4,694,507        2,695,848        922,551        169,006        102,926        121,821        239,883        (8,942,564     12,999,113        1,896,347        1,196,684        725,109        870,516        3,013,262        (7,701,918     12,999,113   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Attributed to controlling stockholders

     12,995,135        4,694,507        2,695,848        918,573        169,006        102,926        121,821        239,883        (8,942,564     12,995,135        1,896,347        1,196,684        725,109        870,516        3,013,262        (7,701,918     12,995,135   

Interest of non-controlling stockholder

     —          —          —          3,978        —          —          —          —          —          3,978        —          —          —          —          —          —          3,978   

PROFIT AND LOSS ACCOUNT

                                

Net operational revenue

     292        7,377,198        12,386,671        1,394,725        122,569        58,197        51,800        169,056        (268,297     21,292,211        855,669        3,459,848        254,173        408,846        697,693        (231,129     26,737,311   

Operational costs and expenses

     (1,157,525     (4,133,629     (11,779,022     (1,235,867     (111,828     (41,877     (28,121     (59,477     229,356        (18,317,990     (121,383     (3,209,417     (216,366     (257,816     (511,512     1,118        (22,633,366
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Electricity purchased for resale

     —          (2,601,484     (6,992,822     —          —          (30,970     (13,551     (23,395     120,282        (9,541,940     —          (2,326,933     (50,617     (158,895     (53,562     148,842        (11,983,105

Charges for use of national grid

     —          (293,484     (813,313     —          —          —          (3,065     (1,179     112,285        (998,756     —          —          (53,100     (15,388     (271,035     59,542        (1,278,737

Gas bought for resale

           (1,050,925     —          —          —          —          —          (1,050,925     —          —          —          —          —          —          (1,050,925

Construction cost

     —          (146,030     (1,043,806     (62,000     —          —          —          —          —          (1,251,836     (17,060     (304,413     —          —          (3,817     —          (1,577,126

Personnel

     (31,895     (334,845     (999,655     (43,092     (15,431     (1,362     (1,221     (7,500     —          (1,435,001     (44,205     (110,654     (7,564     (10,064     (35,057     —          (1,642,545

Employee profit shares

     (4,816     (35,383     (94,815     —          (2,062     (139     (149     —          —          (137,364     (5,888     —          —          (1,467     (97     —          (144,816

Post-retirement liabilities

     (3,867     (30,939     (121,203     —          —          —          —          —          —          (156,009     —          —          —          —          —          —          (156,009

Materials

     (262     (99,312     (50,651     (1,830     (129     (368     (404     (314     25        (153,245     (20,764     (5,904     (1,631     (863     (2,961     —          (185,368

Outsourced services

     (10,991     (159,432     (697,484     (15,035     (25,491     (3,239     (5,112     (13,673     30,987        (899,470     (22,309     (155,676     (10,546     (22,133     (56,794     4,076        (1,162,852

Depreciation and amortization

     (1,601     (252,897     (443,766     (54,177     (48,968     (5,526     (4,391     (10,243     (13,261     (834,830     (1,296     (149,282     (48,076     (51,255     (75,112     (195,164     (1,355,015

Operational provisions

     (1,084,757     (106,443     (209,072     —          (1,181     —          (1     (1     —          (1,401,455     484        (92,148     (36,771     —          (1,124     —          (1,531,014

Other expenses, net

     (19,336     (73,380     (312,434     (8,808     (18,566     (273     (227     (3,173     (20,962     (457,159     (10,345     (64,407     (8,061     2,249        (11,953     (16,178     (565,854
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operational profit before Equity gains (losses) and Financial revenue (expenses)

     (1,157,233     3,243,569        607,649        158,858        10,741        16,320        23,679        109,579        (38,941     2,974,221        734,286        250,431        37,807        151,030        186,181        (230,011     4,103,945   

Equity gain (loss) in subsidiaries

     3,296,744        38,125          —          (27,769     —          —          1,343        (2,892,578     415,865        6,884        (39,698     (79,312     (455     (16,471     (348,258     (61,445

Gain on stockholding reorganization

       729,442          —          —          —          —          —          —          729,442        —          —          —          —          16,375        —          745,817   

Financial revenue

     65,180        204,741        1,148,437        23,082        4,054        2,966        4,545        16,272        —          1,469,277        333,487        446,993        94,983        13,711        26,705        —          2,385,156   

Financial expenses

     (36,024     (990,235     (1,129,969     (41,531     (5,794     (172     (85     (534     —          (2,204,344     (577,332     (612,626     (113,173     (21,877     (107,287     —          (3,636,639
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit before income and Social Contribution tax

     2,168,667        3,225,642        626,117        140,409        (18,768     19,114        28,139        126,660        (2,931,519     3,384,461        497,325        45,100        (59,695     142,409        105,503        (578,269     3,536,834   

Income tax and Social Contribution tax

     322,708        (887,979     (255,908     (23,339     (16,096     (5,392     (3,431     (23,146     —          (892,583     (104,542     (29,214     61,498        (13,788     (66,327     —          (1,044,956
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit (loss)

     2,491,375        2,337,663        370,209        117,070        (34,864     13,722        24,708        103,514        (2,931,519     2,491,878        392,783        15,886        1,803        128,621        39,176        (578,269     2,491,878   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest of the controlling stockholders

     2,491,375        2,337,663        370,209        116,567        (34,864     13,722        24,708        103,514        (2,931,519     2,491,375        392,783        15,886        1,803        128,621        39,176        (578,269     2,491,375   

Interest of non-controlling stockholder

     —          —          —          503        —          —          —          —          —          503        —          —          —          —          —          —          503   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     2,491,375        2,337,663        370,209        117,070        (34,864     13,722        24,708        103,514        (2,931,519     2,491,878        392,783        15,886        1,803        128,621        39,176        (578,269     2,491,878   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

54


LOGO

 

 

INFORMATION BY MARKET SEGMENT AT DECEMBER 31, 2015

 

R$ ’000

   ELECTRICITY     TELECOMS     GAS     OTHERS     Eliminations     TOTAL  
   GENERATION     TRANSMISSION     DISTRIBUTION            

ASSETS OF THE SEGMENT

     13,404,398        4,880,161        17,738,194        317,346        2,529,757        2,997,172        (987,064     40,879,964   

ADDITIONS TO THE SEGMENT

     577,330        146,030        1,043,806        42,488        62,000        —          —          1,871,654   

INVESTMENTS IN JOINTLY-CONTROLLED SUBSIDIARIES

     5,773,838        2,423,084        1,546,960        —          —          23,840        —          9,767,722   

NET REVENUE

     7,046,513        518,671        12,386,671        122,569        1,394,725        91,358        (268,296     21,292,211   

COSTS

                

Electricity purchased for resale

     (2,669,371     —          (6,992,822     —          —          (29     120,282        (9,541,940

Charges for use of national grid

     (297,423     (305     (813,313     —          —          —          112,285        (998,756

Gas bought for resale

     —          —          —          —          (1,050,925     —          —          (1,050,925
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operational costs

     (2,966,794     (305     (7,806,135     —          (1,050,925     (29     232,567        (11,591,621

OPERATIONAL COSTS AND EXPENSES

                

Personnel

     (224,197     (113,230     (999,655     (15,431     (43,092     (39,396     —          (1,435,001

Employees’ and managers’ profit shares

     (23,552     (12,119     (94,815     (2,062     —          (4,816     —          (137,364

Post-retirement liabilities

     (21,274     (9,664     (121,204     —          —          (3,867     —          (156,009

Materials

     (95,381     (4,969     (50,651     (129     (1,830     (310     25        (153,245

Outsourced services

     (142,931     (36,844     (697,484     (25,491     (15,035     (12,672     30,987        (899,470

Depreciation and amortization

     (273,053     —          (443,766     (48,968     (54,177     (14,866     —          (834,830

Operational provisions (reversals)

     (108,728     2,283        (209,072     (1,181     —          (1,084,757     —          (1,401,455

Construction costs

     —          (146,030     (1,043,806     —          (62,000     —          —          (1,251,836

Other operational expenses, net

     (60,692     (15,983     (312,434     (18,566     (8,808     (45,393     4,717        (457,159
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of operation

     (949,808     (336,556     (3,972,887     (111,828     (184,942     (1,206,077     35,729        (6,726,369

OPERATIONAL COSTS AND EXPENSES

     (3,916,602     (336,861     (11,779,022     (111,828     (1,235,867     (1,206,106     268,296        (18,317,990

OPERATIONAL PROFIT BEFORE EQUITY GAIN (LOSS) IN SUBSID. AND FINANCIAL REV (EXP.)

     3,129,911        181,810        607,649        10,741        158,858        (1,114,748     —          2,974,221   

Equity gain (loss) in subsidiaries

     39,468        410,052        (6,408     (27,769     —          522        —          415,865   

Gain on stockholding reorganization

     729,442          —          —          —          —          —          729,442   

Financial revenues

     199,200        21,892        1,148,437        4,054        23,082        72,612        —          1,469,277   

Financial expenses

     (984,018     (6,875     (1,129,969     (5,794     (41,531     (36,157     —          (2,204,344
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

PRETAX PROFIT

     3,114,003        606,879        619,709        (18,768     140,409        (1,077,771     —          3,384,461   

Income tax and Social Contribution tax

     (835,791     (71,104     (255,908     (16,096     (23,339     309,655        —          (892,583
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

PROFIT AND LOSS ACCOUNT

     2,278,212        535,775        363,801        (34,864     117,070        (768,116     —          2,491,878   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Interest of the controlling stockholders

     2,278,212        535,775        363,801        (34,864     116,567        (768,116     —          2,491,375   

Interest of non-controlling stockholder

     —          —          —          —          503        —          —          503   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     2,278,212        535,775        363,801        (34,864     117,070        (768,116     —          2,491,878   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

55


LOGO

 

Generating plants

 

Plant

   Type    Company    Cemig’s
Interest
    Installed
Capacit
(MW)
     Assured
Energy
(average
MW)
     Installed
Capacit
(MW)*
     Assured
Energy
(average
MW)*
     Year
Concession or
Authorization
Expires

São Simão

   Hydroelectric    CEMIG GT      100.0     1,710.00         1,281.00         1,710.00         1,281.00       1/11/2015

Emborcação

   Hydroelectric    CEMIG GT      100.0     1,192.00         497.00         1,192.00         497.00       7/23/2025

Nova Ponte

   Hydroelectric    CEMIG GT      100.0     510.00         276.00         510.00         276.00       7/23/2025

Jaguara

   Hydroelectric    CEMIG GT      100.0     424.00         336.00         424.00         336.00       8/28/2013

Miranda

   Hydroelectric    CEMIG GT      100.0     408.00         202.00         408.00         202.00       12/23/2016

Irapé

   Hydroelectric    CEMIG GT      100.0     399.00         210.70         399.00         210.70       2/28/2035

Três Marias

   Hydroelectric    CEMIG GT      100.0     396.00         239.00         396.00         239.00       1/4/2046

Volta Grande

   Hydroelectric    CEMIG GT      100.0     380.00         229.00         380.00         229.00       2/23/2017

lgarapé

   Thermal    CEMIG GT      100.0     131.00         71.30         131.00         71.30       8/13/2024

Salto Grande

   Hydroelectric    CEMIG GT      100.0     102.00         75.00         102.00         75.00       1/4/2046

ltutinga

   Hydroelectric    CEMIG GT      100.0     52.00         28.00         52.00         28.00       1/4/2046

Camargos

   Hydroelectric    CEMIG GT      100.0     46.00         21.00         46.00         21.00       1/4/2046

Piau

   SHP    CEMIG GT      100.0     18.01         13.53         18.01         13.53       1/4/2046

Gafanhoto

   SHP    CEMIG GT      100.0     14.00         6.68         14.00         6.68       1/4/2046

Peti

   SHP    CEMIG GT      100.0     9.40         6.18         9.40         6.18       1/4/2046

Rio de Pedras

   SHP    CEMIG GT      100.0     9.28         2.15         9.28         2.15       9/19/2024

Poço Fundo

   SHP    CEMIG GT      100.0     9.16         5.79         9.16         5.79       8/19/2025

Tronqueiras

   SHP    CEMIG GT      100.0     8.50         3.39         8.50         3.39       1/4/2046

Joasal

   SHP    CEMIG GT      100.0     8.40         5.20         8.40         8.40       1/4/2046

Martins

   SHP    CEMIG GT      100.0     7.70         1.84         7.70         1.84       1/4/2046

Cajuru

   SHP    CEMIG GT      100.0     7.20         2.69         7.20         2.69       1/4/2046

Ervália

   SHP    CEMIG GT      100.0     6.97         3.03         6.97         3.03       1/4/2046

São Bernado

   SHP    CEMIG GT      100.0     6.82         3.42         6.82         3.42       8/19/2025

Neblina

   SHP    CEMIG GT      100.0     6.47         4.66         6.47         4.66       1/4/2046

Cel. Domiciano

   SHP    CEMIG GT      100.0     5.04         3.59         5.04         3.59       1/4/2046

Paraúna

   SHP    CEMIG GT      100.0     4.28         1.90         4.28         1.90       –    

Pandeiros

   SHP    CEMIG GT      100.0     4.20         0.47         4.20         0.47       9/22/2021

Paciência

   SHP    CEMIG GT      100.0     4.08         2.36         4.08         2.36       1/4/2046

Marmelos

   SHP    CEMIG GT      100.0     4.00         2.74         4.00         2.74       1/4/2046

Dona Rita

   SHP    CEMIG GT      100.0     2.40         1.03         2.40         1.03       1/4/2046

Salto de Moraes

   SHP    CEMIG GT      100.0     2.39         0.60         2.39         0.60       7/1/2020

Sumidouro

   SHP    CEMIG GT      100.0     2.12         0.53         2.12         0.53       –    

Anil

   SHP    CEMIG GT      100.0     2.08         1.10         2.08         1.10       –    

Xicão

   SHP    CEMIG GT      100.0     1.81         0.61         1.81         0.61       8/19/2025

Luiz Dias

   SHP    CEMIG GT      100.0     1.62         0.61         1.62         0.61       8/19/2025

Sinceridade

   SHP    CEMIG GT      100.0     1.42         0.35         1.42         0.35       1/4/2046

Central Mineirão

   Solar    CEMIG GT      100.0     1.42         –             1.42         –           –    

Poquim

   SHP    CEMIG GT      100.0     1.41         0.39         1.41         0.39       7/8/2015

Santa Marta

   SHP    CEMIG GT      100.0     1.00         0.58         1.00         0.58       7/8/2015

Pissarrão

   SHP    CEMIG GT      100.0     0.80         0.55         0.80         0.55       –    

Jacutinga

   SHP    CEMIG GT      100.0     0.72         0.57         0.72         0.57       –    

Santa Luzia

   SHP    CEMIG GT      100.0     0.70         0.23         0.70         0.23       2/25/2026

Lages*

   SHP    CEMIG GT      100.0     0.68         –             0.68         –           –    

Bom Jesus do Galho

   SHP    CEMIG GT      100.0     0.36         0.13         0.36         0.13       –    

Pai Joaquim

   SHP    CEMIG PCH      100.0     23.00         4.26         23.00         4.26       4/1/2032

Salto Voltão

   SHP    Horizontes Energia      100.0     8.20         6.63         8.20         6.63       10/4/2030

Salto do Paraopeba

   SHP    Horizontes Energia      100.0     2.46         –             2.46         –           10/4/2030

Salto do Passo Velho

   SHP    Horizontes Energia      100.0     1.80         1.06         1.80         1.06       10/4/2030

Machado Mineiro

   SHP    Horizontes Energia      100.0     1.72         1.03         1.72         1.03       7/8/2025

Rosal

   Hydroelectric    Rosal Energia      100.0     55.00         30.00         55.00         30.00       5/8/2032

Sá Carvalho

   Hydroelectric    Sá Carvalho      100.0     78.00         58.00         78.00         58.00       12/1/2024

Barreiro

   Thermal    Usina Termelétrica Barreiro      100.0     12.90         11.37         12.90         11.37       4/30/2023

Queimado

   Hydroelectric    CEMIG GT      82.5     105.00         58.00         86.63         47.85       1/2/2033

Praias de Parajuru

   Wind Farm    CEMIG GT      49.0     28.80         8.39         14.11         4.11       9/24/2032

Praia do Morgado

   Wind Farm    CEMIG GT      49.0     28.80         13.20         14.11         6.47       12/26/2031

Paracambi

   SHP    CEMIG GT      49.0     25.00         19.53         12.25         9.57       2/16/2031

Volta do Rio

   Wind Farm    CEMIG GT      49.0     42.00         18.41         20.58         9.02       12/26/2031

Santo Antônio

   Hydroelectric    Santo Antônio Energia      17.7     2,714.72         2,218.00         480.06         392.22       6/12/2046

Aimorés

   Hydroelectric    ALIANÇA      45.0     330.00         172.00         148.50         77.40       12/20/2035

Amador Aguiar I (Capim Bra

   Hydroelectric    ALIANÇA      39.3     240.00         155.00         94.36         60.94       8/29/2036

Amador Aguiar II (Capim Br

   Hydroelectric    ALIANÇA      39.3     210.00         131.00         82.56         51.50       8/29/2036

lgarapava

   Hydroelectric    ALIANÇA      23.7     210.00         136.00         49.75         32.22       12/30/2028

Funil

   Hydroelectric    ALIANÇA      45.0     180.00         89.00         81.00         40.05       12/20/2035

Candonga

   Hydroelectric    ALIANÇA      22.5     140.00         64.50         31.50         14.51       5/25/2035

Porto Estrela

   Hydroelectric    ALIANÇA      30.0     112.00         55.80         33.60         16.74       7/10/2032

Baguari

   Hydroelectric    BAGUARI ENERGIA      34.0     140.00         80.20         47.60         27.27       8/15/2041

Cachoeirão

   SHP    Hidrelétrica Cachoeirão      49.0     27.00         16.37         13.23         8.02       7/25/2030

Pipoca

   SHP    Hidrelétrica Pipoca      49.0     20.00         11.90         9.80         5.83       9/10/2031

Retiro Baixo

   Hydroelectric    Retiro Baixo Energética      25.0     82.00         38.50         20.46         9.61       8/25/2041
   Hydroelectric    Lightger      49.0     855.14         637.00         419.02         312.13      
   SHP    Lightger      25.0     25.00         19.53         6.25         4.88      
   SHP    Brasil PCH      31.2     291.00         188.85         90.67         20.31      
   Wind Farm    Renova Energia      35.2     680.50         325.91         239.21         114.56      
   SHP    Renova Energia      35.2     41.80         18.74         14.69         6.59      

 

*The installed capacit and the assured energy are already on cemig’s share

 

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Generation plants: Concession contract expiry periods

In November 2015 Cemig was the winner of Lot D in the first auction of concessions held by Aneel with a new structure: placement of concessions for hydroelectric plants under a regime of allocation of generating capacity and physical offtake guarantees.

 

  ¡ Number of generation plants: 18 (eighteen).

 

  ¡ Total installed generation capacity: 699.57 MW.

 

  ¡ Percentage of the guaranteed physical power offtake allocated to the Regulated Market: 100% (one hundred per cent), from January 1 to December 31, 2016; and 70% (seventy per cent), on and after January 1, 2017.

 

  ¡ Payment: R$ 2.216 billion in Concession Grant Fee (Bonificação pela Outorga), of which R$ 1.4 billion (65%) was paid on January 5, 2016 and R$ 770 million is to be paid within 180 days.

 

  ¡ Revenue received by Cemig GT for provision of the service: R$ 498.6 million/year.

Under that contract, as from this termination the assets of each plant that had not been fully depreciated are to be returned to the concession-granting power, and the company is to be indemillionified for them, on terms specified in the contract. The accounting balances corresponding to these assets, including the Deemed Cost, were transferred from Fixed assets to Financial assets on the date of termination of the concession in July 2015, and total R$ 546 million.

As specified in Aneel Normative Resolution 615/2014, the Valuation Opinions proposing the amounts of the indemillionity of the assets were delivered to Aneel on December 31, 2015. The company is in the process of preparation of these Opinions. Based on the discussions and valuations currently in progress, management believes that there is no indication that the amounts to be indemillionified by the Grantor Power will be lower than those recognized in its interim financial statements at December 31, 2015

 

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Power Plant

   Installed Capacit (MW)      Assured Energy
(average MW)
 

Três Marias

     396,0         239,0   

Salto Grande

     102,0         75,0   

Itutinga

     52,0         28,0   

Camargos

     46,0         21,0   

Piau

     18,0         13,5   

Gafanhoto

     14,0         6,7   

Peti

     9,4         6,2   

Tronqueiras

     8,5         3,4   

Joasal

     8,4         5,2   

Martins

     7,7         1,8   

Cajuru

     7,2         3,7   

Ervália

     7,0         3,0   

Neblina

     6,5         4,7   

Coronel Domiciano

     5,0         3,6   

Paciência

     4,1         2,4   

Marmelos

     4,0         2,7   

Dona Rita

     2,4         1,0   

Sinceridade

     1,4         0,4   
  

 

 

    

 

 

 

Total

     699,6         421,3   
  

 

 

    

 

 

 

Exchange of Shareholders’ Debentures owned by AGC Energia for shares in Cemig

On March 3, 2016, BNDES Participações (‘BNDESPar’) exchanged the totality of its holding of debentures issued under the Deed of the First Private Issue by AGC Energia of Non-convertible Permanent Asset-guaranteed Exchangeable Shareholders’ Debentures, in a Single Series, dated February 28, 2011 and amended January 17, 2012, for 54,342,992 common shares and 16,718,797 preferred shares in Cemig, owned by AGC Energia.

After the exchange, the equity interest held by BNDESPAR in Cemig — which on March 2, 2016 totaled 0% of the common shares and 1.13% of the preferred shares — increased to 12.9% and 3.13%, respectively. This characterizes a material transaction in the stock of Cemig in the terms of Article 12, §1º, of CVM Instruction 358/02. On March 2, 2016 BNDESPAR held an equity interest of 0.75% in the total capital of Cemig. This percentage has risen to 6.4%.

http://cemig.infoinvest.com.br/enu/13329/c-13329-enu.html?idioma=enu

 

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LOGO

After this exchange, the stockholders’ agreement between Cemig and AGC Energia remains unchanged.

http://cemig.infoinvest.com.br/ptb/8867/AcordodeAcionistas_por.pdf

 

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Generation: Annual Permitted Revenue (RAP)

 

Resolução Homologatoria ANEEL - nº 1.313*

 

Receita Anual Permitida - RAP

   RAP     %
Cemig
    Cemig
Consolidado
     Cemig GT  

Cemig GT

     234.340.198        100,0     234.340.198         234.340.198   

Cemig Itajuba

     36.345.194        100,0     36.345.194         36.345.194   

Centroeste

     15.420.427        51,0     7.864.418      

Transirapé

     26.287.112        24,5     6.440.342      

Transleste

     36.163.304        25,0     9.040.826      

Transudeste

     22.414.358        24,0     5.379.446      

Taesa

     43,36 %        

ETEO

     155.851.060        43,4     67.576.823      

ETAU

     38.433.513        22,8     8.762.945      

NOVATRANS

     460.994.392        43,4     199.886.586      

TSN

     449.086.299        43,4     194.723.252      

GTESA

     8.238.429        43,4     3.572.172      

PATESA

     18.930.852        43,4     8.208.394      

Munirah

     32.335.023        43,4     14.020.425      

Brasnorte

     22.865.011        16,8     3.833.291      

São Gotardo

     4.594.930        43,4     1.992.356      

Abengoa

         

NTE

     135.672.013        43,4     58.827.214      

STE

     72.452.041        43,4     31.415.113      

ATEI

     132.046.398        43,4     57.255.152      

ATEII

     204.000.305        43,4     88.454.275      

ATEIII

     102.659.854        43,4     44.513.183      

TBE

         

EATE

     381.289.719        21,7     82.634.235      

STC

     36.934.709        17,3     6.403.873      

Lumitrans

     23.591.101        17,3     4.090.187      

ENTE

     199.517.005        21,7     43.245.595      

ERTE

     44.785.760        21,7     9.706.942      

ETEP

     86.906.931        21,7     18.835.509      

ECTE

     84.200.833        8,3     6.970.657      

EBTE

     40.614.511        32,3     13.118.164      

ESDE

     11.542.416        21,7     2.501.610      

ETSE

     19.741.437        8,3     1.634.316      

Light

     7.924.732        32,6     2.581.878      

Transchile**

     21.396.000        49,0     10.484.040      
      

 

 

    

 

 

 

RAP TOTAL CEMIG

         1.284.658.610         270.685.392   
      

 

 

    

 

 

 

 

* Receitas anuais permititidas com vigência entre 1º de julho de 2015 e 30 de junho de 2016.
** A receita de transmissão da Transchile é dada em Dólar Norte Americano e é corrigida, anualmente, de acordo com o Decreto Nº 163 (http://www.cne.cl/images/stories/normativas/otros%20niveles/electricidad/DOC65_-_decreto163obrasurgentes.pdf).

 

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Appendices

Electricity losses – 4Q15

Control of electricity losses is one of Cemig D’s strategic objectives, and the Company has a structure dedicated to this – its Distribution Losses Measurement and Control Management Unit. Compliance with the objective is monitored monthly through the Total Distribution Losses Index (Índice de Perdas Totais da Distribuição, or IPTD): the result at December 31, 2015 was 11.52% – compared to a regulatory target of 10.48% by the end of 2017. In the decision on the regulatory target, taken during the 3rd Tariff Review Cycle, the regulator, Aneel, made significant changes in the method of calculation of technical losses, imposing extremely challenging limits for Cemig D. Total losses are composed of technical losses plus non-technical losses. The indicators for measurement are the PPTD (Distribution Technical Losses Percentage –percentual de perdas técnicas da distribuição), and the PPNT (Distribution Non-technical Losses Percentage – or percentual de perdas não técnicas da distribuição). The projected result for the PPTD on December 31, 2015 was 9.46%, for a regulatory target of 7.84 %, and the projected result for the PPNT was 3.06%, for a regulatory target of 2.64%.

Aneel measures non-technical losses with reference to the low-voltage market. Taking this into account, the result for the PPNT in relation to the low voltage market as invoiced at December 31, 2015 was 7.85%, for a regulatory target of 7.63% (2.88% above the limit set by the Regulator).

 

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LOGO

Cemig D Tables (R$ million)

 

CEMIG D Market

 
     (GWh)      GW  

Quarter

   Captive Consumers      TUSD ENERGY1      T.E.D2      TUSD PICK3  

3Q13

     6,486         5,017         11,503         29   

4Q13

     6,615         4,975         11,591         29   

1Q14

     6,744         4,464         11,208         29   

2Q14

     6,646         4,485         11,132         29   

3Q14

     6,686         4,298         10,984         27   

4Q14

     6,935         4,201         11,136         29   

1Q15

     6,780         4,034         10,814         30   

2Q15

     6,371         3,896         10,268         28   

3Q15

     6,471         3,803         10,274         29   

4Q15

     6,850         3,937         10,787         28   

 

1. Ref ers to the quantity of electricity f or calculation of the regulatory charges charged to f ree consumer clients (“Portion A”)
2. Total electricity distributed
3. Sum of the demand on w hich the TUSD is invoiced, according to demand contracted (“Portion B”).

 

Operating Revenues

   4Q15     4Q14     Change %     2015     2014     Change %  

Sales to end consumers

     4,498        3,050        47        16,515        11,443        44   

TUSD

     296        254        17        1,500        893        68   

Transactions in the CCEE

     —          —          —          50        —          —     

CVA and Other financial components in tariff adjustment

     397        1,107        (64     1,704        1,107        54   

Construction revenue

     353        315        12        1,044        861        21   

Others

     301        256        18        1,194        1,039        15   

Subtotal

     5,846        4,982        17        22,007        15,344        43   

Deductions

     (2,753     (1,168     136        (9,620     (4,103     134   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Revenues

     3,093        3,814        (19 )      12,387        11,241        10   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Operating Expenses

   4Q15     4Q14      Change %     2015      2014      Change %  

Personnel/Administrators/Councillors

     316        252         25        1,000         886         13   

Employee Participation

     (48     47         —          95         184         (48

Forluz – Post-Retirement Employee Benefits

     (4     38         —          121         153         (21

Materials

     13        43         (69     51         80         (37

Contracted Services

     199        256         (22     697         737         (5

Purchased Energy

     1,619        1,730         (6     6,993         5,748         22   

Depreciation and Amortization

     108        110         (1     444         428         4   

Operating Provisions

     31        191         (84     209         300         (30

Charges for Use of Basic Transmission Network

     183        159         16        813         573         42   

Cost from Operation

     353        315         12        1,044         861         21   

Other Expenses

     10        31         (68     312         299         4   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total

     2,781        3,173         (12 )      11,779         10,249         15   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

Statement of Results

   4Q15     4Q14     Change %     2015     2014     Change %  

Net Revenue

     3,093        3,814        (19     12,387        11,241        10   

Operating Expenses

     2,781        3,173        (12     11,779        10,249        15   

EBIT

     312        641        (51 )      608        992        (39 ) 

EBITDA

     421        751        (44 )      1,051        1,420        (26 ) 

Financial Result

     191        (70     —          18        (393     —     

Provision for Income Taxes, Social Cont & Deferred Income

     (199     (148     34        (256     (169     51   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

     305        424        (28 )      370        430        (14 ) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cemig GT Tables (R$ million)

 

Operating Revenues

   4Q15     4Q14     Change %     2015     2014     Change %  

Sales to end consumers

     943        634        49        3,716        3,394        9   

Supply

     426        851        (50     2,199        2,225        (1

Transactions in the CCEE

     535        61        775        2,356        2,281        3   

Revenues from Trans. Network

     97        410        (76     339        629        (46

Construction revenue

     57        32        77        146        80        82   

Transmission indemnity revenue

     40        357        (89     101        420        (76

Others

     12        11        8        26        26        (2

Subtotal

     2,111        2,357        (10 )      8,883        9,055        (2 ) 

Deductions

     (386     (243     58        (1,506     (1,341     12   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Revenues

     1,725        2,114        (18 )      7,377        7,715        (4 ) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Operating Expenses

   4Q15     4Q14      Change %     2015      2014      Change %  

Personnel/Administrators/Councillors

     97        82         18        335         304         10   

Employee Participation

     (17     12         —          35         55         (36

Forluz – Post-Retirement Employee Benefits

     (7     12         —          31         48         (36

Materials

     3        5         (48     16         16         (5

Raw Materials and Supplies Energy Production

     2        79         (97     84         282         (70

Contracted Services

     63        63         1        159         172         (7

Depreciation and Amortization

     51        78         (35     253         297         (15

Operating Reserves

     50        53         (5     106         84         26   

Charges for Use of Basic Transmission Network

     76        73         4        293         273         7   

Purchased Energy

     621        415         50        2,601         1,692         54   

Construction Cost

     57        32         77        146         80         82   

Other Expenses

     19        209         (91     73         283         (74
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total

     1,015        1,113         (9 )      4,134         3,588         15   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

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Statement of Results

   4Q15     4Q14     Change%     2015     2014     Change%  

Net Revenue

     1,725        2,114        (18     7,377        7,715        (4

Operating Expenses

     (1,015     (1,113     (9     (4,134     (3,588     15   

EBIT

     710        1,001        (29 )      3,244        4,127        (21 ) 

Equity equivalence results

     48        (61     —          38        (388     —     

Fair value gain (loss) on stockholding transaction

     —          —          —          729        —          —     

EBITDA

     808        1,018        (21 )      4,264        4,035        6   

Financial Result

     (167     (224     (25     (785     (534     47   

Provision for Income Taxes, Social Cont & Deferred Income Tax

     (104     (170     (38     (888     (1,115     (20
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

     486        546        (11 )      2,338        2,089        12   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cemig Tables (R$ million)

 

Energy Sales (Consolidated)(GWh)

   4Q15      4Q14      Change%     2015      2014      Change%  

Residential

     2,517         2,556         (2     9,830         10,014         (2

Industrial

     5,685         6,701         (15     22,969         26,026         (12

Commercial

     1,691         1,678         1        6,434         6,395         1   

Rural

     907         854         6        3,380         3,390         —     

Others

     879         885         (1     3,422         3,462         (1

Subtotal

     11,679         12,674         (8 )      46,035         49,287         (7 ) 

Own Consumption

     10         10         —          38         38         —     

Supply

     1,880         4,007         (53     10,831         14,146         (23
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

TOTAL

     13,568         16,691         (19 )      56,904         63,470         (10 ) 
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

Energy Sales

   4Q15      4Q14      D%     2015      2014      D%  

Residential

     1,994         1,379         45        7,298         5,183         41   

Industrial

     1,500         1,027         46        5,781         4,793         21   

Commercial

     1,085         765         42        3,956         2,786         42   

Rural

     399         240         66        1,407         908         55   

Others

     446         298         50        1,621         1,107         46   

Electricity sold to final consumers

     5,424         3,709         46        20,062         14,778         36   

Unbilled Supply, Net

     65         103         (37     106         203         (48

Supply

     439         784         (44     2,358         2,251         5   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

TOTAL

     5,928         4,596         29        22,526         17,232         31   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

Operating Revenues

   4Q15     4Q14     D%     2015     2014     D%  

Sales to end consumers

     5,464        3,723        47        20,319        14,922        36   

TUSD

     288        225        28        1,465        855        71   

Supply

     464        872        (47     2,208        2,310        (4

Transactions in the CCEE

     539        70        665        2,425        2,348        3   

CVA and Other financial components in tariff adjustment

     397        1,107        (64     1,704        1,107        54   

Revenues from Trans. Network

     76        395        (81     261        557        (53

Construction revenue

     472        348        36        1,252        942        33   

Gas supply

     401        422        (5     1,667        422        295   

Transmission Indemnity Revenue

     40        357        (89     101        420        (76

Others

     367        325        13        1,441        1,282        12   

Subtotal

     8,508        7,844        8        32,842        25,165        31   

Deductions

     (3,242     (1,513     114        (11,549     (5,626     105   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Revenues

     5,267        6,331        (17 )      21,292        19,540        9   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Operating Expenses

   4Q15     4Q14      D%     2015      2014      D%  

Personnel/Administrators/Councillors

     448        354         27        1,435         1,252         15   

Employee Participation

     (70     56         —          137         249         (45

Forluz – Post-Retirement Employee Benefits

     (17     53         —          156         212         (26

Materials

     17        49         (66     70         99         (30

Raw materials and inputs for production of electricity

     2        79         (97     84         282         (70

Contracted Services

     282        339         (17     899         953         (6

Purchased Energy

     2,274        2,146         6        9,542         7,428         28   

Depreciation and Amortization

     206        213         (3     835         801         4   

Operating Provisions

     977        433         126        1,401         581         141   

Charges for Use of Basic Transmission Network

     231        208         11        999         744         34   

Gas bought for resale

     261        254         3        1,051         254         313   

Cost from Operation

     472        348         36        1,252         942         33   

Other Expenses

     49        269         (82     457         652         (30
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

TOTAL

     5,133        4,803         7        18,318         14,451         27   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

Financial Result Breakdown

   4Q15     4Q14     D%     2015     2014     D%  

Financial revenues

     629        171        269        1,469        593        148   

Revenue from cash investments

     91        62        47        251        298        (16

Arrears penalty payments on electricity bills

     72        41        76        230        166        38   

Exchange rate

     21        1        1,537        76        15        405   

Monetary updating

     233        36        547        248        53        367   

Monetary updating - CVA

     (72     —          —          68        —          —     

Taxes applied to Financial Revenue

     (66     (38     75        (84     (38     125   

Monetary updating of the Financial Asset of the Concession

     323        58        455        606        58        941   

Other

     28        10        190        75        39        90   

Financial expenses

     (559 )      (700 )      (20 )      (2,204 )      (1,694 )      30   

Costs of loans and financings

     (384     (300     28        (1,386     (931     49   

Exchange rate

     (8     (16     (48     (172     (26     553   

Monetary updating – loans and financings

     (108     (81     34        (387     (271     43   

Monetary updating – paid concessions

     (2     (9     —          (11     (17     (35

Charges and monetary updating on Post-employment obligations

     (31     (24     31        (129     (99     30   

Other

     (25     (270     (91     (120     (349     (66
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Financial revenue (expenses)

     71        (529 )      (113 )      (735 )      (1,101 )      (33 ) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Statement of Results

   4Q15     4Q14     D%     2015     2014     D%  

Net Revenue

     5,267        6,331        (17     21,292        19,540        9   

Operating Expenses

     5,133        4,803        7        18,318        14,451        27   

EBIT

     134        1,528        (91 )      2,974        5,089        (42 ) 

Equity gain in subsidiaries

     156        177        (12     416        210        98   

Gain on stockholding reorganization

                          729                 

Gain on change of accounting status in subsidiary

            281                      281          

Depreciation and Amortization

     206        213        (3     835        801        4   

EBITDA

     496        2,200        (77 )      4,954        6,382        (22 ) 

Financial Result

     71        (529            (735     (1,101     (33

Tax

     (55     (340     (84     (893     (1,343     (34
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

     306        1,117        (73 )      2,492        3,137        (21 ) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Cash Flow Statement

   2015     2014     Change%  

Cash at beginning of period

     887        2,202        (60 ) 

Cash generated by operations

     3,007        3,734        (19 ) 

Net profit

     2,492        3,137        (21

Current and deferred income tax and Social Contribution tax

     893        1,343        (34

Depreciation and amortization

     835        801        4   

Gain on the Aliança stockholding reorganization

     (729     —          —     

Passthrough from CDE

     (1,704     (1,107     54   

Equity gain (loss) in subsidiaries

     (416     (210     98   

Provisions (reversals) for operational losses

     1,401        581        141   

Dividends received from equity holdings

     487        683        (29

Other adjustments

     (252     (1,493     (83

Financing activities

     247        (750 )      (133 ) 

Financings obtained and capital increase

     5,739        4,562        26   

Interest on Equity, and dividends

     (796     (3,918     (80

Payments of loans and financings

     (4,696     (1,394     237   

Investment activity

     (3,217 )      (4,299 )      (25 ) 

Securities - Financial Investment

     (1,644     37        —     

Acquisition of ownership interest and future capital commitments

     (490     (3,416     (86

Fixed and Intangible assets

     (1,083     (920     18   

Cash at end of period

     924        887        4   
  

 

 

   

 

 

   

Total Cash

     3,435        1,898     
  

 

 

   

 

 

   

 

BALANCE SHEETS (CONSOLIDATED) - ASSETS

   12/31/2015      12/31/2014  

CURRENT

     9,377         6,554   

Cash and cash equivalents

     925         887   

Securities

     2,427         994   

Consumers and traders

     3,581         2,142   

Concession holders – Transport of electricity

     184         248   

Financial assets of the concession

     874         848   

Tax offsetable

     175         214   

Income tax and Social Contribution tax recoverable

     306         295   

Dividends receivable

     62         73   

Linked funds

     —           1   

Inventories

     37         40   

Passthrough from CDE (Energy Development Account)

     72         345   

Other credits

     735         468   

NON-CURRENT

     31,503         28,446   

Securities

     84         17   

Consumers and traders

     58         203   

Receivables Investment Fund

     75         6   

Tax offsetable

     258         387   

Income tax and Social Contribution tax recoverable

     206         207   

Deferred income tax and Social Contribution tax

     1,498         1,246   

Escrow deposits in legal actions

     1,813         1,535   

Other credits

     868         408   

Financial assets of the concession

     2,660         7,475   

Investments

     9,768         8,040   

PP&E

     3,940         5,544   

Intangible assets

     10,275         3,379   
  

 

 

    

 

 

 

TOTAL ASSETS

     40,880         35,000   
  

 

 

    

 

 

 

 

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BALANCE SHEETS LIABILITIES AND SHAREHOLDERS’ EQUITY

   12/31/2015      12/31/2014  

CURRENT

     13,086         10,123   

Suppliers

     1,901         1,604   

Regulatory charges

     517         106   

Profit shares

     114         116   

Taxes

     740         555   

Income tax and Social Contribution tax

     11         43   

Interest on Equity, and dividends, payable

     1,318         1,643   

Loans and financings

     5,145         4,151   

Debentures

     1,156         1,140   

Payroll and related charges

     221         195   

Post-retirement liabilities

     167         153   

Other obligations

     551         419   

Provisions for losses on investments

     1,245         —     

NON-CURRENT

     14,795         13,592   

Regulatory charges

     226         252   

Loans and financings

     1,792         1,832   

Debentures

     7,074         6,386   

Taxes

     740         723   

Income tax and Social Contribution tax

     689         611   

Provisions

     755         755   

Post-retirement liabilities

     3,086         2,478   

Provisions for losses on investments

     148         195   

Other obligations

     285         359   

STOCKHOLDERS’ EQUITY

     12,995         11,281   

Share capital

     6,294         6,294   

Capital reserves

     1,925         1,925   

Profit reserves

     4,674         2,594   

Adjustments to Stockholders’ equity

     102         468   

Retained earnings

     —           —     

NON- CONTROLLING STOCKHOLDER´S EQUITY

     4         4   
  

 

 

    

 

 

 

TOTAL LIABILITIES

     40,880         35,000   
  

 

 

    

 

 

 

 

67


 

14. 2015 RESULTS – PRESENTATION

 

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2015 Results
2015, A year of important decisions

 

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Disclaimer
CEMIG
Brazil’s Best Energy
Certain statements and estimates in this material may represent expectations about future events or results, which are subject to risks and uncertainties that may be known or unknown. There is no guarantee that the events or results will take place as referred to in these expectations. These expectations are based on the present assumptions and analyzes from the point of view of our management, in accordance with their experience and other factors such as the macroeconomic environment, and market conditions in the electricity sector; and on our expectations for future results, many of which are not under our control.
Important factors that could lead to significant differences between actual results and the projections about future events or results include our business strategy, Brazilian and international economic conditions, technology, our financial strategy, changes in the electricity sector, hydrological conditions, conditions in the financial and energy markets, uncertainty on our results from future operations, plans and objectives, and other factors. Because of these and other factors, our real results may differ significantly from those indicated in or implied by such statements.
The information and opinions herein should not be understood as a recommendation to potential investors, and no investment decision should be based on the veracity, currentness or completeness of this information or these opinions. None of our professionals nor any of their related parties or representatives shall have any liability for any losses that may result from the use of the content of this presentation.
To evaluate the risks and uncertainties as they relate to Cemig, and to obtain additional information about factors that could give rise to different results from those estimated by Cemig, please consult the section on Risk Factors included in the Reference Form filed with the Brazilian Securities Commission – CVM – and in the 20-F form filed with the U.S. Securities and Exchange Commission – SEC.
In this material, financial amounts are in R$ million (R$ mn) unless otherwise stated. Financial data reflect the adoption of IFRS.

 

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CEMIG
Brazil’s Best Energy
Highlights
Focus on operational efficiency
Efficiency measures contribute to reduction of 8% (nominal) in PMSO* in 2015
Further reductions expected in 2016 and 2017
2015–16 profit sharing agreement benefits Company’s sustainability
Staff structure – reshaping through voluntary retirement incentive plans
New portfolio strategy being finalized
Three business dimensions: focus on investment, optimization, availability for disinvestment
Adaptation of the rates of return required by the economic context
Corporate governance – strengthening
Financial sustainability assured
Board of Directors proposes to pay R$ 634mn in dividends
Short term debt has been refinanced
* PMSO : Personnel, Materials, outsourced Services and Other expenses.

 

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CEMIG
Brazil’s Best Energy
Highlights – Generation
• Auction 12 of 2015: Cemig won concessions to operate 18 plants
• Investment of R$ 2.2 billion – installed capacity 699.6 MW
• Return higher than cost of capital
• Federal Supreme Court (STF):
• Reconciliation proceedings in progress on Jaguara hydro plant concession
• Renegotiation of hydrological risk
• Cemig GT accepted this in the Regulated Market, for the Queimado and Irapé plants
• Regulatory asset of R$ 63 million recognized in 2015
• Creation of Aliança Energia:
• Equity method earnings R$ 107 million

 

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CEMIG
Brazil’s Best Energy
Highlights – Distribution
• Cemig D’s concession contracts renewed for a further 30 years
• New concession contracts make distributors subject to efficiency requirements:
• Service quality
• Sustainability of economic and financial management
• Winner of IASC 2015 Consumer Satisfaction Award
• Category: Southeast Region / over 400,000 consumers

 

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CEMIG
Brazil’s Best Energy
Highlights – Recognition
• Winner of the Anefac-Fipecafi-Serasa Transparency Trophy
• Awarded for transparency in financial statements
• Abrasca Value Creation Award
• – outstanding performance, Electricity Sector

 

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CEMIG
Brazil’s Best Energy
Recognition
16th year running in the DJSI World Index
(selected every year since the index was created)
11th year running in the ISE
Corporate Sustainability Index (BM&FBovespa)
6th year running in the ICO2 Carbon Efficient Index
Commitment to creation of value for stockholders, employees and suppliers

 

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CEMIG
Brazil’s Best Energy
Stockholding structure
AGC Energia S.A.
BNDESPAR
Other stockholders
ON –51% PN –0% ON –20% PN –3% ON –13% PN –3% ON –16% PN –94%
• The Stockholders’ Agreement of 2011 between Cemig and AGC Energia remains unchanged.
http://cemig.infoinvest.com.br/enu/8867/AcordodeAcionistas_ing.pdf

 

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CEMIG
Brazil’s Best Energy
Analyzing the 2015 results

 

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CEMIG
Brazil’s Best Energy
Net revenue
Ebitda
Net profit
R$ mn
+8.9%
-22.4%
-20.6%
2014 2015 2014 2015 2014 2015
• Net revenue – boosted by: (i) tariff adjustments; (ii) gas supply revenue
• Deficit in hydro generation, and lower spot price, reduce net profit
• Spot price: averaged R$ 287.20/MWh in 2015 vs. R$ 688.89/MWh in 2014
• GSF*: averaged 84.61% in 2015 vs. 90.61% in 2014
• Reduced by: provision for put option on Parati shares
• R$ 1.079 billion in 2015 : R$ 899 million in 4Q15
* Generation Scaling Factor

 

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CEMIG
Brazil’s Best Energy
R$ mn +8.9%
19.539 21,292 2014 2015
Changes in sales – by volume, MWh
-10.3%
184 3,057 38 10 38 3,315
63,470 56,904
2014 Residencial Industrial Comercial Rural Others Wholesale 2015
• Main factors affecting revenue:
• Annual Tariff Adjustments – with average effect:
• 7.07% as from April 8, 2015
• 14.76% as from April 8, 2014 (full effect in 2015)
• Extraordinary Tariff Adjustment – average effect: increase of 28.76%

 

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CEMIG
Brazil’s Best Energy
Consolidated operational expenses
R$ mn +26.8%
14,451 18,318
2014 2015
• Wide-ranging group of efficiency measures being implemented
• Manageable costs (PMSO) already reduced by 8% (nominal) in 2015
• Further reductions expected in 2016 and 2017
• Provisions for losses on investments
• Parati: Total provision R$1.245 billion, of which R$1.079 billion in 2015
• SAAG: Total provision R$148 million, of which R$119 million in 2015
Change in consolidated operational expenses, 2014–2015
183 -112 -56 -29 -199 -54 2,114 34 821 254 796 310 -195
Personnel Profit shares Post-employment Materials Fuel consumption Outsourced services Electricity purchased for resale Depreciation and amortization Provisions National Grid Gas bought for resale Construction costs Other expenses

 

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CEMIG
Brazil’s Best Energy
Consolidated Ebitda
R$ mn
-23.3%
6,382 4,955 6,834 5,435 2015 Guidance Guidance
2014 2015
By company
4.264 4,830 3,721 1.051 1,336 1,046 742 360 213 202
Cemig GT Guidance Cemig GT Cemig D Guidance Cemig D Taesa Light Fasmig Aliança
• 2015 consolidated Ebitda 23.3% lower than in 2014.
• Main effect is from provision for Parati shares put option: R$ 1.079 billion
• Ebitda of Cemig GT and Cemig D perform: within Guidance given at 20th annual Cemig/Apimec.

 

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CEMIG
Brazil’s Best Energy
Consolidated net profit
R$ mn -20.6%
By operational segment
3.137 2.492 2014 2015
2,278 535 364 -685
Generation Transmission Distribution Others
• Cemig’s 2015 net profit was 20.6% less than in 2014
• Main factor was provision of R$ 1.079 billion for the put option in shares of Parati.

 

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CEMIG
Brazil’s Best Energy
Cemig, consolidated: debt profile
Maturities timetable – Average tenor: 2.8 years Main indexors
2% 1%
Main indexors
R$ mn
Total net debt: R$ 11.7 billion
6,300 2,628 2,493 806
963
780 532 665
2016 2017 2018 2019 2020 2021 2022 After 2022
2% 1% 26% 71%%
CDI IPCA URTJ RGR / others
Cost of debt – % Leverage – %
9.81 10.32 11.74 12.51 13.88 14.28
4.51 4.55 5.03 4.08 4.16 4.50 3.74
2012 2013 2014 mar/15 jun/15 set/15 2015
Real Nominal
1.40 1.80 1.80 1.75 1.80 1.67 2.40
39.2 42.3 50.7 48.4 45.4 43.8 47.4
jun/14 set/14 2014 mar/15 jun/15 set/15 2015
Net debt Ebitda
Net debt Stockholders’ equity + Net debt

 

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CEMIG
Brazil’s Best Energy
Cemig GT – debt profile
Maturities timetable – Average tenor: 2.4 years Main indexors
R$ mn
Total net debt: R$ 5.5 billion
2,831 2,097 1,718 152 311 297 305 27
2016 2017 2018 2019 2020 2021 2022 After 2022
1% 16% 83%
CDI IPCA Others
Cost of debt – % Leverage – %
11.14 10.76 12.11 12.57 13.42 13.63 14.41
5.09 4.66 5.37 4.35 4.12 4.19 4,35 3,66
2012 2013 2014 mar/15 jun/15 set/15 2015
0.89 0.93 1.36 1.52 1.31 1.15 1.30
47.7 59.9 63.8 55.6 50.1 48.3 54.1
jun/14 set/14 2014 mar/15 jun/15 set/15 2015
Net debt Ebitda
Net debt Stockholders’ equity + Net debt

 

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CEMIG
Brazil’s Best Energy
Cemig D – Debt profile
R$ mn
Total net debt: R$ 6.4 billion
3,346 476 622 634 634 464 206 638
2016 2017 2018 2019 2020 2021 2022 After 2022
4% 38% 58%
CDI IPCA Others
Cost of debt – % Leverage – %
9.56 9.98 11.47 12.60 13.52 14.24 14.31
5.19 4.40 4.79 4.20 4.29 4.68 4.01
2012 2013 2014 mar/15 jun/15 set/15 2015
Real Nominal
7.56 7.23 3.90 3.87 4,36 4.51 6.10
67.2 69.0 69.4 69.0 70.3 69.4 70.4
Jun-14 Sep-14 2014 Mar-15 Jun-15 Sep-15 2015
Net debt Ebitda
Net Debt Stockholders’ equity + Net debt

 

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CEMIG
Brazil’s Best Energy
Capex
Descrição Realizado Planejado
2015 2016
GENERATION 535,818 2,693,818
Investment program 36,090 49,854
Capital injections 499,728 427,611
Aliança Norte 367,342 62,897
Madeira Energia S/A – MESA - 113,000
SPE -Amazônia Energia Participações S.A. (Belo Monte) 120,123 132,805
Others 12,264 118,909
Auction 012/2015 -Concession Grant Fee - 2,216,353
TRANSMISSION 43,133 46,181
Investment program 43,133 46,181
Cemig D 1,107,996 829,772
Investment program 1,107,996 829,772
Cemig – holding company 29,255 17,512
Investment program 2,264 866
Capital injections 26,991 16,646
TOTAL INVESTIMENT 1,716,202 3,587,283
In constant currency -June 2014 (R$ ‘000).

 

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CEMIG
Brazil’s Best Energy
Cash flow
R$ mn
R$3,007 R$247 – R$3,217
Cash from operations Financing Investments
887 2,492 1,401 1,704 818 1,043 796 1,499 490 1,228 924 2,511 3,435
2015 initial cash 2015 profit Provisions CVA and other Other Loans and financings Interest on Equity, and dividends Cash investments Acquisitions and cash injections Other Cash at close of 2015 Securities Total available

 

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CEMIG
Brazil’s Best Energy
Proposal for allocation of net profit
The Board of Directors will propose to the AGM to be held by April 30, 2016:
– That the profit for 2015, in the amount of R$ 2,491,375,000, and the balance of Retained earnings, of R$ 59,536,000, should be allocated as follows:
• R$ 633,967,000 as the minimum obligatory dividend, to be paid to stockholders as follows:
• R$ 200,000,000 as Interest on Equity, in two equal installments, by June 30 and December 30, 2016, to stockholders whose names were on the Company’s Nominal Share Registry on December 26, 2015;
• R$ 433,967,000 as dividends for the 2015 business year, by December 30, 2016, to stockholders on the Company’s Nominal Share Registry on the date on which the Annual General Meeting is held;
• R$ 633,967,000 to be held in Stockholders’ equity in a Reserve for obligatory dividends not distributed, to be paid as and when the Company’s financial situation permits;
• R$ 1,262,280,000 to be held in Stockholders’ equity in the Retained earnings reserve, to provide funding for the Company’s consolidated investments planned for 2016, in accordance with a capital budget; and
• R$ 20,696,000 to be held in Stockholders’ equity in the Tax incentives reserve, for tax incentive amounts gained in 2015 due to investments in the region of Sudene.

 

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CEMIG
Brazil’s Best Energy
Investor relations
Tel: +55 (31) 3506-5024
Fax: +55 (31) 3506-5025
ri@cemig.com.br
http://ri.cemig.com.br

 

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15. MARKET ANNOUNCEMENT DATED MARCH 28, 2016: CREATION OF JOINT DIRECTORATE FOR COMPLIANCE AND CORPORATE RISK MANAGEMENT

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

MARKET ANNOUNCEMENT

Creation of joint Directorate for

Compliance and Corporate Risk Management

As part of its commitment to best corporate governance practices, Cemig (Companhia Energética de Minas Gerais), a listed company with equity securities traded on the stock exchanges of São Paulo, New York and Madrid, reports to stockholders and the market as follows:

In a further measure to integrate and consolidate its Governance, Risks and Compliance (GRC) practices, reflecting internal and external rules and its own commitment to ethical conduct, Cemig’s Executive Board has approved creation of a joint Compliance and Corporate Risk Management Directorate.

This new senior management unit, headed by a General Manager, reflects the importance of the subject to the Company. Its duties include:

 

    Creation and implementation of policies and procedures to maintain the Company’s risk exposure within the planned level.

 

    Continuous best efforts for conformity with law and regulations, and ethical conduct by our professionals.

 

    Coordination of and support for the Company’s compliance and risk management activities, to bring these processes to a further enhanced standard.

This decision, supporting the Company’s stance in favor of maintaining compliance with the law and ethical conduct as a constant among the professionals that represent it, is a recognition by Cemig of its responsibility to maintain the strongest possible GRC practices in the current Brazilian context.

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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This important step reflects a new phase for Cemig in its continuing development of measures to maintain integrity and provide enhanced risk management.

Although Brazil’s Anti-corruption Law provides strengthening of support for the GRC practices adopted by Cemig, the Company has adopted the requirements of the Foreign Corrupt Practices Act (FCPA), and the Sarbanes-Oxley Act, of the United States since its shares were first traded on the New York Stock Exchange.

Cemig’s existing system of internal controls and compliance includes the following:

 

    The Cemig Statement of Ethical Principles and Code of Professional Conduct.

 

    The Cemig Ethics Committee.

 

    The Cemig Information Hotline.

 

    The Cemig Anti-fraud Policy.

 

    A coordinated group of policies, rules and procedures orienting employees’ conduct.

 

    Monitoring and control units, including those dealing with Internal Audits, Risks, Compliance, the Controller’s Department, and Information Security.

 

    Numerous internal committees that assess subjects and submit recommendations on important subjects for decisions by the Executive Board and the Board of Directors.

Cemig continually reviews its processes with the intention that consolidation of best GRC practices in the Company, and strict obedience to legislation, will serve as a benchmark not only for all companies of the Cemig Group, but also suppliers of materials and services and all other companies with which companies of the Group transact business.

Belo Horizonte, March 28, 2016.

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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16. CONVOCATION AND PROPOSAL OF THE ORDINARY AND EXTRAORDINARY GENERAL MEETINGS OF STOCKHOLDERS TO BE HELD APRIL 29, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

ORDINARY AND EXTRAORDINARY

GENERAL MEETINGS OF STOCKHOLDERS

CONVOCATION

Stockholders are hereby called to Ordinary and Extraordinary General Meetings of Stockholders, to be held concurrently, on April 29, 2016 at 11 a.m., at the company’s head office, Av. Barbacena 1200, 21st floor, Belo Horizonte, Minas Gerais, Brazil, to decide on the following matters:

 

  1 Examination, debate and voting on the Report of Management and the Financial Statements for the year ended December 31, 2015, and the related complementary documents.

 

  2 Allocation of the Net profit for the business year 2015, in the amount of R$ 2,491,375,000, and of the balance of Retained earnings in the amount of R$ 59,536,000.

 

  3 Decision on the form and date of payment of the minimum obligatory dividend, in the amount of R$ 633,968,000.

 

  4 Election of the sitting and substitute members of the Audit Board, due to completion of their period of office, and setting of their remuneration.

 

  5 Election of the sitting and substitute members of the Board of Directors, due to the completion of the current period of office.

 

  6 Setting of the remuneration of the Company’s senior management.

 

  7 Orientation of vote by the representative(s) of the Company in the Ordinary Annual General Meeting of Stockholders of Cemig Distribuição S.A., to be held by April 29, 2016, as to the following matters:

 

  a) Examination, debate and voting on the Report of Management and the Financial Statements for the year ended December 31, 2015, and the related complementary documents.

 

  b) Allocation of the Net profit for the business year 2015, in the amount of R$ 370,209,000.

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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  c) Decision on the form and date of payment of dividends, in the amount of R$ 92,552,000.

 

  d) Election of the sitting and substitute members of the Audit Board, due to completion of their period of office.

 

  e) Election of the sitting and substitute members of the Board of Directors, due to the completion of the current period of office.

 

  8 Orientation of vote by the representative(s) of the Company in the Ordinary Annual General Meeting of Stockholders of Cemig Geração e Transmissão S.A., to be held by April 29, 2016, as to the following matters:

 

  a) Examination, debate and voting on the Report of Management and the Financial Statements for the year ended December 31, 2015, and the related complementary documents.

 

  b) Allocation of the Net profit for the business year 2015, in the amount of R$ 2,337,663,000, and of the balance of Retained earnings in the amount of R$ 47,761,000.

 

  c) Decision on the form and date of payment of dividends, in the amount of R$ 635,407,000.

 

  d) Election of the sitting and substitute members of the Audit Board, due to completion of their period of office.

 

  e) Election of the sitting and substitute members of the Board of Directors, due to the completion of the current period of office.

Under Article 3 of CVM Instruction 165 of December 11, 1991, as amended by CVM Instruction 282 of June 26, 1998 and subsequent amendments, adoption of the multiple voting system for election of members of the Company’s Board of Directors requires the vote of stockholders representing a minimum of 5% (five per cent) of the voting stock.

Any stockholder who wishes to be represented by proxy at the said General Meetings of Stockholders should obey the precepts of Article 126 of Law 6406 of 1976, and of the sole paragraph of Clause 9 of the Company’s by-laws, by exhibiting at the time, or depositing, preferably by April 27, 2016, proofs of ownership of the shares, issued by a depositary financial institution, and a power of attorney with specific powers, at Cemig’s Corporate Executive Office (Superintendência da Secretaria Geral) at Av. Barbacena, 1200 – 19th Floor, B1 Wing, Belo Horizonte, Minas Gerais.

Belo Horizonte, March 28, 2015.

José Afonso Bicalho Beltrão da Silva

Chair of the Board of Directors

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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PROPOSAL

BY THE BOARD OF DIRECTORS

TO THE

ORDINARY AND EXTRAORDINARY GENERAL MEETINGS OF STOCKHOLDERS

TO BE HELD, CONCURRENTLY, BY

APRIL 29, 2016

Dear Stockholders:

The Board of Directors of Companhia Energética de Minas Gerais – Cemig

– whereas:

 

  a) Article 192 of Law 6404 of December 15, 1976, as amended, and Clauses 27 to 31 of the by-laws, govern the holding of an annual meeting;

 

  b) the Financial Statements for 2015 present net profit of R$ 2,491,375,000, and a balance of Retained earnings of R$ 59,536,000 arising from realization of the Stockholders’ Equity Valuation Reserve;

 

  c) it is the duty of the Board of Directors to make a proposal to the Annual General Meeting for allocation of the Company’s net profit;

 

  d) Paragraph 4 of Article 202 of Law 6404/1976 specifies, in relation to the dividend specified in the by-laws, that it “shall not be obligatory in a business year in which the Company’s management bodies inform the Annual Ordinary General Meeting of Stockholders that it would be incompatible with the company’s financial situation”.

 

  e) Paragraph 5 of Article 202 of Law 6404/1976 specifies that “profits that are, under Paragraph 4 of this Article, not distributed, shall be held and reported in a special reserve and, if not absorbed by losses in subsequent business years, must be paid as a dividend as soon as the company’s financial situation permits”;

 

  f) the forecasts of cash flow for 2016 indicate limitation of the Company’s funds in terms of payment in 2016 of the minimum obligatory dividends for 2015 specified in the by-laws;

 

  g) Cemig Distribuição S.A. and Cemig Geração e Transmissão S.A. are wholly-owned subsidiaries of Cemig and will hold Ordinary Annual General Meetings of Stockholders by April 29, 2016;

 

  h) Clause 21, Paragraph 4, Subclause ‘g’ of the by-laws of Cemig states:

“Clause 21 – ...

§4 The following maters shall require a decision by the Executive Board:

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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  g) approval, upon proposal by the Chief Executive Officer, prepared jointly with the Chief Business Development Officer and the Chief Finance and Investor Relations Officer, of the statements of vote in the General Meetings of the wholly-owned and other subsidiaries, affiliated companies and in the consortia in which the Company participates, except in the case of the wholly-owned subsidiaries Cemig Distribuição S.A. and Cemig Geração e Transmissão S.A., for which the competency to decide on these matters shall be that of the General Meeting of Stockholders, and decisions must obey the provisions of these Bylaws, the decisions of the Board of Directors, the Long-term Strategic Plan and the Multi-year Strategic Implementation Plan.”;

– now proposes to you as follows:

 

I) – that the Net profit for the business year 2015, in the amount of R$ 2,491,375,000, and the balance of Retained earnings, in the amount of R$ 59,536,000, should be allocated as follows:

 

  a) R$ 633,968,000 as minimum obligatory dividend, to be paid to the Company’s stockholders, as follows:

 

  1) R$ 200,000,000 in the form of Interest on Equity, as per CRCA-088/2015, of December 17, 2015, and CRD-432/2015, of January 4, 2016, to be paid in two equal installments, by June 30 and December 30, 2016

 

  the Executive Board to obey the periods and decide places and processes of payment and to allocate the amount of the Interest on Equity against the minimum obligatory dividend, to stockholders whose names were on the Company’s Nominal Share Registry on December 30, 2015. The shares began to trade ‘ex–’ these rights on January 4, 2016.

 

  2) R$ 433,968,000 in the form of dividends for the 2015 business year, to stockholders of record on the date on which the Ordinary General Meeting is held.

 

  b) R$ 633,967,000 to be held in Stockholders’ equity in the Reserve for obligatory dividend not distributed, to be paid as and when the Company’s financial situation permits.

 

  c) R$ 1,262,280,000 to be held in Stockholders’ equity in the Retained earnings reserve, to provide funding for the Company’s planned consolidated investments in 2016 in accordance with a capital budget; and

 

  d) R$ 20,696,000 to be held in Stockholders’ equity in the Tax incentives reserve, for tax incentives gained in 2015 as a result of investment in the region of Sudene.

 

  the payments of the dividends to be made by December 30, 2016, in accordance with the availability of cash and at the decision of the Executive Board.

Appendix I summarizes the calculation of the dividends proposed by Management, in accordance with the by-laws.

Appendix 2 presents the Company’s Capital Budget for the business year 2016.

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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II) – that the representative(s) of the Company in the Annual General Meetings of Cemig Distribuição S.A. and Cemig Geração e Transmissão S.A., both to be held by April 29, 2016, should be oriented to vote in favor of the matters on the agenda, namely:

Cemig D:

 

  a) Examination, debate and voting on the Report of Management and the Financial Statements for the year ended December 31, 2015, and the related complementary documents.

 

  b) Allocation of the Net profit for the business year 2015, in the amount of R$ 370,209,000.

 

  c) Decision on the form and date of payment of dividends, in the amount of R$ 92,552,000.

 

  d) Election of the sitting and substitute members of the Audit Board, due to completion of their period of office.

 

  e) Election of the sitting and substitute members of the Board of Directors, due to completion of the period of office.

Cemig GT:

 

  a) Examination, debate and voting on the Report of Management and the Financial Statements for the year ended December 31, 2015, and the related complementary documents.

 

  b) Allocation of the Net profit for the business year 2015, in the amount of R$ 2,337,663,000, and of the balance of Retained earnings in the amount of R$ 47,761,000.

 

  c) Decision on the form and date of payment of dividends, in the amount of R$ 635,407,000.

 

  d) Election of the sitting and substitute members of the Audit Board, as a result of completion of the period of office.

 

  e) Election of the sitting and substitute members of the Board of Directors, due to the completion of the period of office.

As can be seen, the objective of this proposal is to meet the legitimate interests of the stockholders and of the Company, and as a result it is the hope of the Board of Directors that it will be approved.

Belo Horizonte, March 28, 2015.

 

José Afonso Bicalho Beltrão da Silva

Mauro Borges Lemos

Allan Kardec de Melo Ferreira

Arcângelo Eustáquio Torres Queiroz

Eduardo Borges de Andrade

Guy Maria Villela Paschoal

Helvécio Miranda Magalhães Junior

José Henrique Maia

  

José Pais Rangel

Marco Antônio de Rezende Teixeira

Nelson José Hubner Moreira

Paulo Roberto Reckziegel Guedes

Ricardo Coutinho de Sena

Saulo Alves Pereira Junior

Ricardo Wagner Righi de Toledo

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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17. SUMMARY OF MINUTES OF THE 656TH MEETING OF THE BOARD OF DIRECTORS HELD ON MARCH 28, 2016

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

BOARD OF DIRECTORS

SUMMARY OF MINUTES

OF THE

656TH MEETING

 

Date, time and place:  

March 28, 2016 at 1 p.m., at

Av. Barbacena, 1200 – 21st Floor, Belo Horizonte, Minas Gerais.

Meeting Committee:  

Chair: José Afonso Bicalho Beltrão da Silva;

Secretary: Anamaria Pugedo Frade Barros

 

I Conflict of interest: The Board Members listed below stated that they had no conflict of interest with the matters on the agenda of the meeting.

 

II The Board approved the minutes of this meeting.

 

III The Board authorized:

 

  a) Provision of a surety guarantee by the Company for the Sixth Issue of Promissory Notes by Guanhães Energia S.A. (‘the Notes’; ‘Guanhães’ or ‘the Issuer’), through a non-joint, partial guarantee on the printed Notes, in proportion to the 49% interest held by Cemig GT in Guanhães Energia, the issue to have the following characteristics:

 

Issuer:    Guanhães
Managers:    Financial institutions of the Brazilian securities distribution system, to be contracted for intermediation and coordination of the issuance of the Notes.
Surety guarantee:    The Notes and all obligations resulting from them shall have the non-joint, partial, surety guarantee of Cemig and Light S.A. (‘Light’), jointly and individually referred to as Guarantors, in proportion to the equity interests that Cemig GT and Light Energia hold in the share capital of the issuer, of 49% and 51% respectively, through the Surety Guarantee to be written on the printed Notes. The guarantee shall be irrevocable and cover the principal and all accessory debt, such as arrears interest, contractual and/or arrears penalty payments and/or other additions, including any costs provenly incurred by holders of Notes arising from processes, proceedings, procedures and other measures in court or otherwise as are necessary for protection of the rights related to the Notes. The surety shall remain in effect until full compliance by the Issuer with all its obligations arising from the issue of the Notes.

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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Use of proceeds:    Settlement of the Second Series of the Fifth Issue of Notes, comprising a total of seventy two commercial promissory notes with total nominal value of one hundred forty four million Reais, plus the remuneration specified on the reverse side of the printed Notes.
Volume of the Issue:    One hundred fifty million Reais.
Number of series:    The issue will be in two series.
Nominal unit value:    One million Reais, on the Issue Date.
Quantity:    Up to thirty Notes for the First Series; and up to one hundred twenty Notes for the Second Series, comprising a total of up to one hundred fifty Notes
Placement procedure and regime:   

The Notes will be the subject of a public offering, with restricted distribution efforts by the Managers, in the terms of Law 6385/1976, as amended, CVM Instruction 476/2009, and other applicable law and regulations.

All the Notes will be distributed exclusively by the Assets Distribution Module (Módulo de Distribuição de Ativos – MDA), managed and operated by Cetip S.A. – Mercados Organizados (Cetip).

The target public shall be professional investors, as defined in the specific regulations, in the terms of Article 3 of CVM Instruction 476/2009.

Issue Date:    The Issue Date shall be the Date of the actual subscription and payment of subscription of the Notes, as specified on the physical Notes.
Maturity of the Notes:    Up to ninety days for the First Series, and up to two hundred eighty days for the Second Series, from the Issue Date, subject to the situations giving rise to early maturity to be described on the printed Notes.
Updating of the Nominal Unit Value, and Remuneration of the Notes:   

The Nominal Unit Value will not be updated. Both Series of the Notes will pay remuneratory interest equal to 125.10% of the daily average of the over extra-grupo Interbank Deposit (Depósitos Interfinanceiros, or DI) Rate, expressed in the form of percentage per year, on the two hundred and fifty-two business days basis, calculated and published daily by Cetip in its daily bulletin available on its website (http://www.cetip.com.br)(‘the Remuneration’).

The Remuneration will be calculated on an exponential and cumulative basis, ‘pro rata temporis’, by business days elapsed, on the Nominal Unit Value of each Note, from the Issue Date up to the Date of payment of the Remuneration, according to the criteria set out in Cetip Manual of Formulas for Notes and Bonds (Caderno de Fórmulas – Notas Comerciais e Obrigações, or ‘Cetip21’) – which is available for consultation as stated above.

These criteria will be printed on the physical Notes.

Payment of the Remuneration and Amortization of the Nominal Unit Value:   

In a single payment, on the earlier of:

– the date of the maturity of each series, or

– the date of any Early Maturity of the Notes taking place due to any of the early maturity events described on the printed Notes.

Renegotiation:    None.
Early maturity:    Early maturity of the Notes shall be declared in the event of certain occurrences or situations specified on the printed Notes.
Place of payment:   

For Notes deposited electronically at Cetip: in accordance with the procedures of Cetip;

for the holders of Notes not linked to that system: at the head office of the Issuer or in accordance with the procedures of the mandated bank, as applicable.

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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Extension of periods:    If the maturity date of an obligation of the Issuer under the Notes falls on a day that is not a banking business day in Ipatinga, Minas Gerais and in São Paulo, São Paulo State, the payment date of that obligation shall be automatically deemed extended to the next business day, without any addition to the amounts to be paid, except in cases for which the payments are to be made via Cetip, in which case there will only be extension when the date of the obligation is a Saturday, Sunday or declared public holiday.
Arrears charges:   

If the payment of any amount owed to holders of the Notes is not made punctually, payments due and in arrears shall be subject to:

– a non-reducible contractual compensatory arrears penalty payment of 2%; and

– non-compensatory arrears interest at 1% per month or fraction thereof,

both calculated on the amount due and unpaid, from the date of default up to the actual date of payment, independently of advice, notification or interpelation through the courts or otherwise.

 

  b) Signature by Cemig, as Guarantor, of the documents necessary for making the Surety Guarantee effective, in such a way that the Guarantee is existing, valid and effective for as long as all the obligations to be assumed by the Issuer in the ambit of the Notes are not settled in full, including but not limited to: agreement of the printed Notes and the distribution contract of the Notes with the Managers and any short term related amendments and/or terms of acceptance.

 

  c) Execution of all the acts necessary to put the above decisions into effect.

 

IV Comment: The Chair spoke on a subject of interest to the Company.

The following were present:

 

Board members:   

José Afonso Bicalho Beltrão da Silva,

Mauro Borges Lemos,

Allan Kardec de Melo Ferreira,

Arcângelo Eustáquio Torres Queiroz,

Eduardo Borges de Andrade,

Guy Maria Villela Paschoal,

Helvécio Miranda Magalhães Junior,

José Henrique Maia,

José Pais Rangel,

Marco Antônio de Rezende Teixeira,

Nelson José Hubner Moreira,

Paulo Roberto Reckziegel Guedes,

Ricardo Coutinho de Sena,

   Saulo Alves Pereira Junior,

Ricardo Wagner Righi de Toledo,

Antônio Dirceu Araujo Xavier,

Bruno Magalhães Menicucci,

Bruno Westin Prado Soares Leal,

Flávio Miarelli Piedade,

José Augusto Gomes Campos,

José João Abdalla Filho,

Luiz Guilherme Piva,

Newton Brandão Ferraz Ramos,

Tarcísio Augusto Carneiro,

Samy Kopit Moscovitch,

Wieland Silberschneider;

Secretary:    Anamaria Pugedo Frade Barros.     

 

(Signed by:) Anamaria Pugedo Frade Barros.

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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18. MATERIAL ANNOUNCEMENT DATED APRIL 2, 2016: RENOVA ENERGIA S.A.: THE ESPRA AGREEMENT RESCINDED. INTENTION TO EXERCISE THE OPTION TO SELL TERRAFORM GLOBAL’S SHARES HELD BY RENOVA ENERGIA S.A.

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

LISTED COMPANY – CNPJ 17.155.730/0001-64 – NIRE 31300040127

MATERIAL ANNOUNCEMENT

Cemig (Companhia Energética de Minas Gerais), a listed company with securities traded on the stock exchanges of São Paulo, New York and Madrid, in compliance with CVM Instruction 358 of January 3, 2002, hereby reports to the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (BM&FBovespa S.A.) and the market in general as follows:

On April 1, 2016 Cemig’s affiliated company Renova Energia and Cemig’s affiliated company Light S.A. published the following Material Announcement:

“Renova Energia S.A. (RNEW11) (“Renova” or “Company”), in accordance to Instruction CVM No. 358/2002, as amended, informs to shareholders and the market in general that, on this date, the purchase and sale of shares for the sale of ESPRA project ( “Agreement ESPRA”) owned by Renova to Terraform Global, Inc. ( “ terraform Global “) was terminated by an agreement between the parties, upon a break up fee payment in the amount of US$10.00 million to Renova. In this way, the Espra projects (three small hydroelectric contracted under PROINFA, with 41.8MW installed capacity), remains in the Company and return to compose the Renova’s portfolio of operational assets.

The Espra Agreement was covered in the first phase of the transaction with Terraform Global and SunEdison, Inc. (“SunEdison”) announced on July 15, 2015.

The Company also informs that has notified SunEdison and Terraform Global of its intention to exercise the option to sell 7 million Terraform Global’s shares held by the Company as provided in the contract and as disclosed in the Material Fact published by Renova on 18 September 2015. SunEdison will have 60 days to settle the transaction, given that SunEdison may, at its exclusive discretion, choose the price per share of US$ 15.00 or R$ 50.48.

Further clarifications on the Transaction may be discussed with the Company.”

Belo Horizonte, April 2, 2016.

Fabiano Maia Pereira

Chief Finance and Investor Relations Officer

 

  

 

Av. Barbacena 1200

  Santo Agostinho   30190-131 Belo Horizonte, MG   Brazil   Tel.: +55 31 3506-5024   Fax +55 31 3506-5025

 

This text is a translation, provided for information only. The original text in Portuguese is the legally valid version.

 

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