6-K

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2017

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  ☒                 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   ☒

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 Items

1.

  Summary of Minutes of the 708th Meeting of the Board of Directors Dated September 29, 2017

2.

  Market Announcement Dated October 11, 2017: Comment on news report – lengthening of debt

3.

  Summary of Minutes of the 709th Meeting of the Board of Directors Dated October 16, 2017

4.

  Extract from the minutes of the 709th meeting of the Board of Directors Dated October 16, 2017

5.

  Summary of Minutes of the 710th Meeting of the Board of Directors Dated October 16, 2017

6.

  Material Announcement Dated October 17, 2017: Renova: Brookfield exclusivity period completed

7.

  Summary of Minutes of the 711st Meeting of the Board of Directors Dated October 20, 2017

8.

  Extraordinary General Meeting to be held on 11/27/2017: Convocation and Proposal

9.

  Market Announcement Dated October 20, 2017: New members of Executive Board

10.

  Market Announcement Dated October 24, 2017: AGC further reduces holding in CEMIG ON, to 12.79%

11.

  Material Announcement Dated October 24, 2017: Renova: Aneel approves transfer of control of wind farms

12.

  Notice to Stockholders Dated November 01, 2017: Capital increase: Subscription of leftover shares – new dates

13.

  Market Announcement Dated November 06, 2017: CEMIG: Financial update

14.

  Market Announcement Dated November 09, 2017: Reply to Stock Exchange Inquiry Letter 1711/2017—SAE, of November 8, 2017

15.

  Material Announcement Dated November 09, 2017: Cemig joins ICMS tax mitigation plan

16.

  Summary of Minutes of the 713rd Meeting of the Board of Directors Dated November 10, 2017

17.

  Material Announcement Dated November 13, 2017: Non-binding offers for Light

18.

  Material Announcement Dated November 13, 2017: Renova: binding proposal for capitalization

19.

  Publication of Results Dated November 15, 2017: Earnings Release – 3Q 2017

20.

  Publication of Results Dated November 16, 2017: Presentation of 3Q 2017 Results

21.

  Extraordinary General Meeting to be held on 12/18/2017: Convocation and Proposal

22.

  Material Announcement Dated November 20, 2017: Cemig: R$ 4 billion refinancing signed

 


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

By:   /s/ Adézio de Almeida Lima
 

Name: Adézio de Almeida Lima

Title: Chief Finance and Investor Relations Officer

Date: November 21, 2017

 


 

1. SUMMARY OF MINUTES OF THE 708TH MEETING OF THE BOARD OF DIRECTORS DATED SEPTEMBER 29, 2017

 

 

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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 September 29, 2017

SUMMARY OF PRINCIPAL DECISIONS

At its 708th meeting, held on September 29, 2017, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

1. Extension of the period for employees to accept the 2017 PDVP Programmed Retirement Offer.

 

2. In response to BM&FBovespa Official Letter 1581/2017-SAE/GAE-1, of September 28, 2017, addition of complementary content to the material published on submission to the Extraordinary General Meeting of Stockholders for authorization of the increase in the capital of Cemig by up to one billion Reais, through issuance of up to two hundred million new shares.

 

  

 

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. MARKET ANNOUNCEMENT DATED OCTOBER 11, 2017:COMMENT ON NEWS REPORT – LENGTHENING OF DEBT

 

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

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

MARKET ANNOUNCEMENT

Comment on news report – lengthening of debt

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 358/2002 as amended, hereby reports to the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (Brasil, Bolsa, Balcão – B3) and the market as follows:

In regard to news reports in the media making reference to the lengthening of Cemig’s debt profile, Cemig informs the public that it is in negotiations with banks on the subject of refinancing of part of its existing debt, and that at the present time it has no conclusions in relation to what terms and conditions may eventually be agreed and signed.

Belo Horizonte, October 11, 2017.

Adézio de Almeida Lima

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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3. SUMMARY OF MINUTES OF THE 709TH MEETING OF THE BOARD OF DIRECTORS DATED OCTOBER 16, 2017

 

 

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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 October 16, 2017

SUMMARY OF PRINCIPAL DECISIONS

At its 709th meeting, held on October 16, 2017, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

1. Surety for extension of maturity of debt of Cemig GT.

 

  

 

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. EXTRACT FROM THE MINUTES OF THE 709TH MEETING OF THE BOARD OF DIRECTORS DATED OCTOBER 16, 2017

 

 

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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

709TH MEETING

 

Date, time and place:   October 16, 2017 at 5.45 p.m. at the company’s head office,
  – with participation also by telephone conference call.

 

Meeting Committee:   Chair:   José Afonso Bicalho Beltrão da Silva;
  Secretary:   Anamaria Pugedo Frade Barros.

Summary of proceedings:

 

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

 

II The Board approved the minutes of this meeting.

 

III The Board authorized a surety, as joint debtor, for the following:

 

a) postponement by sixty days of the maturity of the tranches of October 26, 2017 and October 30, 2017 of the Fixed Credit Line Contracts signed with Cemig GT and Banco do Brasil S.A. (‘BB’), numbers:

330.800.591,         in the amount of R$ 33.9 million, and

330.800.592,         in the amount of R$ 95.2 million,

and alteration of the financial charges on the outstanding balance

from           108.00%            of the variation arising from the average CDI rate (Interbank CD Rate)

to             128.00%               of the variation arising from the average CDI rate,

to be formalized by signature with Banco do Brasil of the Fourth Amendment to the said Contracts.

 

b) postponement by sixty days of the maturity of the tranches of October 24, 2017 of

Bank Credit Notes No.’s     30.800.376,     330.800.383,     330.800.384,     330.800.385,     330.800.386,

                    330.800.387,     330.800.388,     330.800.389,     330.800.390,     330.800.391,

                    330.800.392,     330.800.393,     330.800.394      and    330.800.395,

issued by Cemig GT in favor of Banco do Brasil, for a total of

R$ 270 million,

and alteration of the financial charges on the outstanding balance

from           112.00%           of the variation arising from the average CDI rate,

to             128.00%             of the variation arising from the average CDI rate,

to be formalized by signature, with Banco do Brasil, of the Fifth Amendment to the said Notes.

 

c) postponement by sixty days of the maturity of the tranche of October 24, 2017 of

Bank Credit Note No.       306.401.428, issued by Cemig GT in favor of Banco do Brasil,

in the amount of                R$ 150 million,financial charges being

maintained at                    132.9% of the average CDI rate,

to be formalized by signature with Banco do Brasil of the First Amendment to the said Note.

 

  

 

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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On the total amount of the principal to be postponed,

namely                                        five hundred forty nine million one hundred five thousand three

                                                    hundred thirty three Reais thirty four centavos,

a fee of               0.5%               will be charged, to be offset from the payment of the fee to be charged

                                                    at the time of implementation of the long-term re-profiling of debt.

 

d) Alteration, in the bank credit notes and contracts, of the specified early maturity events, to those in the respective clauses in Bank Credit Note 306.401.428 and in the 7th debenture issue of Cemig GT, so that the early maturity events will now be the following:

Early maturity events:

 

  - protest of receivables against borrower and/or guarantor the individual or aggregate value of which exceeds one hundred million Reais, unless, within a maximum of thirty calendar days from the date of notification by Banco do Brasil to Cemig GT or guarantor, either:

 

  (a) the protest is suspended or canceled; or (b) guarantees are given in court.

 

  - liquidation, dissolution or declaration of borrower and/or of guarantor; application for bankruptcy by borrower and/or guarantor; and/or application for bankruptcy by a third party against borrower and/or guarantor, which is not duly resolved through a preventive deposit or one blocking the bankruptcy;

 

  - proposal by borrower and/or guarantor, to any creditor or class of creditors, of a plan for out-of-court recovery, whether or not court ratification of any such plan has been applied for or obtained; or application to the Court by borrower and/or guarantor for judicial recovery, whether or not granted by the competent judge;

 

  - judgment given against borrower and/or guarantor at first instance in a legal action, or judgment in a court or administrative tax proceeding, for an amount the individual or aggregate value of which exceeds one hundred million Reais, not opposed by an appeal that has suspensive effect;

 

  - in the event that borrower and/or guarantor, directly or through attorneys-in-fact or holders of power of attorney, provide untrue information to Banco do Brasil, by public or private document of any kind;

 

  - in the event that borrower and/or guarantor, directly or through attorneys-in-fact or holders of power of attorney, omit to provide information which, if Banco do Brasil had been aware of it, might alter its judgments and/or assessments of credit;

 

  - early maturity arising from any default by borrower and/or guarantor on any obligation to pay, specified in any debt or credit instrument with individual or aggregate amount greater than one hundred million Reais or its equivalent in other currencies;

 

  - if borrower or guarantor omit to inform Banco do Brasil about any financial covenants that it has agreed with other creditors, and in the case of any additional or more restrictive financial covenants, the obligations assumed in the credit line contract shall automatically reflect such financial covenants;

 

  - making of any payment of dividends or Interest on Equity by borrower and/or guarantor except under Article 202 of the Corporate Law, or any other distribution of dividends provided for by the by-laws;

 

  - any use of the proceeds from the credit line contract or the Bank Credit Note, as the case may be, for any purpose other than precisely the purpose described in the Clause “use of the funds lent”;

 

  - early maturity of, or default on, any contract and/or debt of any company directly or indirectly controlled by borrower or guarantor;

 

  - liquidation, dissolution, extinction and/or any other form of corporate or stockholding reorganization of borrower and/or of guarantor;

 

  - any of the events specified in Articles 333 or 1425 of the Brazilian Civil Code;

 

  - transfer of stockholding control of borrower or of guarantor, unless by order of a court, without the express consent of Banco do Brasil;

 

  - any change in the corporate Objects of borrower and/or of guarantor with prior express authorization of Banco do Brasil;

 

  - termination, for any reason, of any of the concession contracts held by borrower and /or by guarantor such as represent/s an adverse material impact on the payment capacity of borrower and/or of guarantor, except in relation to the São Simão, Jaguara or Miranda Plants;

 

  - non-compliance by borrower and/or by guarantor, as the case may be, with any non-pecuniary obligation arising from the contracts or bank credit notes;

 

  - transformation of borrower and/or guarantor into another type of company;

 

  

 

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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  - any change in the dividend policy contained in the by-laws of guarantor that are in effect on the date of the meeting of the Board of Directors that decides on the Proposal for Decision (Proposta de Deliberação – PD) made by the Executive Board and/or by the Board of Directors, that increases the minimum amount of the profits of borrower or of guarantor to be used for payment of the mandatory dividend, or Interest on Equity or any other method of sharing of profit under the terms of Article 202 of the Corporate Law;

 

  - constitution by borrower at any time, even if under suspensive condition, of any real guarantee, lien or charge in favor of any third party on any asset, in guarantee of future debt incurred by borrower, that might, in the opinion of the lender, adversely affect the guarantees offered to lender in this or in any other debt instrument, or which might adversely affect the solvency or financial capacity of borrower to timely pay the obligations assumed in favor of lender;

 

  - if borrower or guarantor takes any court or arbitration measure with a view to annulment, invalidation or limitation of the efficacy of any provisions, rights, credits and/or guarantees of the fixed credit line contracts or the Bank Credit Notes, as the case may be;

 

  - any act by any governmental authority with the aim of sequestering, expropriating, nationalizing, confiscating, appropriating or in any way compulsorily acquiring in whole or in part assets, property or rights of borrower, unless any such act is canceled, arrested or in any way suspended within the related legal period;

 

  - existence of any final sanctioning administrative decision issued by a court or competent body that arises from practice of any act by borrower and/or guarantor in the nature of racial or gender discrimination, child labor or labor analogous to slavery, or any judgment against which no further appeal lies given as a result of any such act or of any other that characterizes moral or sexual harassment or criminal exploitation of prostitution – unless borrower presents to the Bank a court decision fully suspending the effects of the administrative decision with ninety calendar days from its publication;

 

  - removal, suspension of cancellation of the environmental license of borrower and/or of guarantor by the competent environmental body, when applicable, or which results in crime against the environment;

 

  - if the Financial Activities Control Council (COAF) concludes that any crime exists in the nature of ‘laundering’ or concealment of goods, rights or amounts, specified in Law 9613 of March 3, 1998, arising from acts by borrower, or by its administrators or managers, or if borrower or any of its administrators or managers is convicted for committing any such crime;

 

  - existence of an administrative punishment measure issued by a competent authority or body definitively confirmed by the courts arising from the practice by borrower or its administrators or managers of any act damaging to, or in the exclusive or non-exclusive interest of borrower as against, Brazilian or foreign public administration, in the terms of Law 12846 of August 1, 2013, and/or its being included in the National Register of Punished Companies (CNEP) specified in that Law;

 

  - if borrower does not maintain the following financial ratios, which shall be checked six-monthly based on the consolidated six-monthly information audited by an independent auditor as published regularly by borrower:

 

  the ratio of net debt to the sum of Ebitda and dividends received to be no more than:

5.5, for the business year ended December 31, 2017;

5.0, for the business year ended December 31, 2018;

4.5, for the business year ended December 31, 2019;

3.0, for the business year ended December 31, 2020; and

2.5, as from the business year ending on December 31, 2021, inclusive.

 

  - if guarantor does not maintain the following financial ratios, which shall be checked six-monthly based on the consolidated six-monthly information of borrower audited by an independent auditor, published regularly by borrower:

 

  the ratio of net debt to the sum of Ebitda and dividends received to be no more than:

4.5, for the business year ended December 31, 2017;

4.25, for the business year ended December 31, 2018;

3.5, for the business year ended December 31, 2019;

3.0, for the business year ended December 31, 2020; and

2.5, as from the business year ending on December 31, 2021, inclusive;

 

  

 

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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– the following terms to have the following meanings:

  - ‘Net debt’ means the balance on the accounts of loans, financings and debentures (current and non-current liabilities), plus debts owed to the Forluminas Foundation (the Forluz pension fund) plus put options (value updated monthly); less the total of cash, cash equivalents and securities (current and non-current assets); based on the last consolidated financial statements of borrower or of guarantor, as the case may be, presented to the CVM.

 

  - ‘Ebitda’ means: Profit before interest, tax on revenue including the Social Contribution tax on Net Profit, depreciation, and amortization, calculated in accordance with CVM Instruction 527 of October 4, 2012, and CVM Circular SNC/SEP 01/2007, (a) less: (a.1) gain (loss) by the equity method (affiliated companies), (a.2) provisions for put options, (a.3) non-operational profit (loss), (a.4) any gains (losses) on corporate reorganization and (a.5) accounting effect of transmission indemnities; and (b): plus (b.1) cash effect of transmission indemnities and (b.2) dividends received (affiliated companies).

 

  - ‘Dividends received’ means dividends and Interest on Equity received during the period in question.

 

IV Abstention, and votes against: Item III above was approved with the board member Marcelo Gasparino da Silva abstaining; the members Patrícia Gracindo Marques de Assis Bentes and Daniel Alves Ferreira voted against it.

 

V Comment: The following spoke on subjects and business of interest to the Company.

 

The Chair;
Board members:  

Marcelo Gasparino da Silva,

Daniel Alves Ferreira,

  Patrícia Gracindo Marques de Assis Bentes;
Chief Officer:   Adézio de Almeida Lima.    
The following were present:
Board members:  

José Afonso Bicalho Beltrão da Silva,

Marco Antônio de Rezende Teixeira,

Bernardo Afonso Salomão de Alvarenga,

Antônio Dirceu Araújo Xavier,

Arcângelo Eustáquio Torres Queiroz,

Helvécio Miranda Magalhães Junior,

José Pais Rangel,

Marcelo Gasparino da Silva,

Nelson José Hubner Moreira,

Daniel Alves Ferreira,

 

Agostinho Faria Cardoso,

Patrícia Gracindo Marques de Assis Bentes,

Marco Antônio Soares da Cunha Castello Branco,

Aloísio Macário Ferreira de Souza,

Antônio Carlos de Andrada Tovar,

Franklin Moreira Gonçalves,

Geber Soares de Oliveira,

Luiz Guilherme Piva,

Otávio Silva Camargo,

Ricardo Wagner Righi de Toledo,

Wieland Silberschneider;

Chief Officers :  

Adézio de Almeida Lima,

César Vaz de Melo Fernandes,

Dimas Costa,

 

José de Araújo Lins Neto,

Luciano de Araújo Ferraz,

Maura Galuppo Botelho Martins,

Ronaldo Gomes de Abreu;

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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5. SUMMARY OF MINUTES OF THE 710TH MEETING OF THE BOARD OF DIRECTORS DATED OCTOBER 16, 2017

 

 

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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 October 16, 2017

SUMMARY OF PRINCIPAL DECISIONS

At its 710th meeting, held on October 16, 2017, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

1. Full resumption of the works on the Small Hydroelectric Plants of Guanhães Energia S.A.

 

2. Signature of EPC contract.

 

3. Orientation of vote at a meeting of Light 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.

 

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6. MATERIAL ANNOUNCEMENT DATED OCTOBER 17, 2017: RENOVA: BROOKFIELD EXCLUSIVITY PERIOD COMPLETED

 

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

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

MATERIAL ANNOUNCEMENT

Renova: Brookfield exclusivity period completed

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 as amended, hereby reports to the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (Brasil, Bolsa, Balcão – B3) and the market as follows:

Today Cemig’s affiliated company Renova Energia S.A. (“Renova”) published the following Material Announcement:

 

Renova Energia S.A. (RNEW11) (“Renova”), in compliance with CVM Instruction 358/2002, as amended, refers to its Material Announcements published on:

 

July 19, 2017, which reported the receipt of a non-binding proposal from Brookfield Energia Renovável (“Brookfield”), and the concession of a period of 60 days’ exclusivity for due diligence and negotiation of final documents for a primary capitalization of Renova by Brookfield; and

 

September 15, 2017, when that period was extended for a further 30 days;

and confirms to the market and its stockholders that this period of exclusivity has ended on today’s date – although this does not alter the stage of negotiation with Brookfield in relation to the transaction referred to.

Renova reiterates its commitment to keep its stockholders and the market in general updated and informed in accordance with the applicable legislation.

Belo Horizonte, October 17, 2017

Adézio de Almeida Lima

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 MINUTES OF THE 711ST MEETING OF THE BOARD OF DIRECTORS DATED OCTOBER 20, 2017

 

 

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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 October 20, 2017

SUMMARY OF PRINCIPAL DECISIONS

At its 711th meeting, held on October 20, 2017, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

1. Sale of shares in a company of the Cemig Group / Additional budget allocation.

 

2. Ratification of orientation of vote in meetings of Taesa on: (i) participation in an auction, and (ii) constitution of a company.

 

3. Acquisition by Taesa and by ENTE of a stockholding interest; and orientation of vote in meetings of Taesa.

 

4. Surety for extensions of maturities of long-term debt of Cemig D and Cemig GT.

 

5. Granting of guarantees for issuance of Eurobonds by Cemig GT; re-ratification of a Board Spending Decision (CRCA).

 

6. Change in the composition of the Executive Board, which is now as follows:

 

Bernardo Afonso Salomão de Alvarenga

   Chief Executive Officer

Bernardo Afonso Salomão de Alvarenga

   Deputy CEO*

Dimas Costa

   Chief Trading Officer

José Maria Rabelo

   Chief Business Development Officer

Ronaldo Gomes de Abreu

   Interim Chief Distribution and Sales Officer

Adézio de Almeida Lima

   Chief Finance and Investor Relations Officer

Franklin Moreira Gonçalves

   Chief Generation and Transmission Officer

José de Araújo Lins Neto

   Chief Corporate Management Officer

Maura Galuppo Botelho Martins

   Chief Officer for Human Relations and Resources

Thiago de Azevedo Camargo

   Chief Institutional Relations and Communication Officer

Luciano de Araújo Ferraz

   Chief Counsel

* On interim basis while also serving as Chief Executive 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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8. EXTRAORDINARY GENERAL MEETING TO BE HELD ON 11/27/2017: CONVOCATION AND PROPOSAL

 

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

CNPJ 17.155.730/0001-64 – NIRE 31300040127

EXTRAORDINARY GENERAL MEETING OF STOCKHOLDERS

CONVOCATION

Stockholders are hereby called to an Extraordinary General Meeting of Stockholders to be held on November 27, 2017 at 11 a.m., at the company’s head office, Av. Barbacena 1200, 21st floor, Belo Horizonte, Minas Gerais, Brazil to decide on:

 

Re-ratification of the decision taken by the Extraordinary General Meeting of May 30, 2016, altering its terms so as to postpone the date of exercise of the put option granted by Cemig on April 11, 2011 to:

Redentor Fundo de Investimento em Participações (‘FIP Redentor’)

                                     (succeeded by Banco Santander S.A. (Brasil)),

BV Financeira S.A. – Crédito, Financiamento e Investimento (‘BV Financeira’), and

BB – Banco de Investimento S.A. (‘BB–BI’).

Proxy votes

Any stockholder wishing to be represented by proxy at the said General Meeting of Stockholders should obey the precepts of Article 126 of Law 6406 of 1976, and of Paragraph 1 of Clause 9 of the Company’s by-laws, by exhibiting at the time, or depositing, preferably by November 23, 2017, 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, October 20, 2017.

José Afonso Bicalho Beltrão da Silva

Chair, 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

EXTRAORDINARY GENERAL MEETING OF STOCKHOLDERS

TO BE HELD ON NOVEMBER 27, 2017 AT 11 A.M.

Dear Stockholders:

The Board of Directors of Companhia Energética de Minas Gerais – Cemig (‘Cemig’),

Whereas:

 

a) On May 31, 2016, Cemig pledged:

55,234,637 (fifty five million two hundred thirty four thousand six hundred thirty seven) common shares and 110,469,274 (one hundred ten million four hundred sixty nine thousand two hundred seventy four) preferred shares in Transmissora Aliança de Energia Elétrica S.A. (‘Taesa’), at that time representing value of

R$ 1,075,000,000.00                      (one billion seven hundred fifty million Reais),

in guarantee of obligations it assumed in favor of the banks holding a put option (‘the Put Option’) on

shares in Parati S.A. – Participações em Ativos de Energia Elétrica (‘Parati’);

and further offered to support that guarantee with its equity interest of 26.06% in Light S.A. (‘Light’);

and on August 30, 2016 an Extraordinary General Meeting of Cemig enabled postponement of the date of exercise of the Put Option from its original date (the last business day of the sixtieth month following the date of subscription of the shares in Parati) until November 30, 2017, (the last business day of the seventy seventh month); having reference also to a decision of the Board of Directors of May 30, 2016;

 

b) on August 28, 2016 Cemig sent correspondence to the banks holding the Put Option (‘the Banks’), namely

Banco Santander (Brasil) S.A. (‘Santander’),

BV Financeira S.A. – Crédito, Financiamento e Investimento (‘BV Financeira’),

BB–Banco de Investimento S.A. (‘BBBI’) and

Banco BTG Pactual S.A. (“BTG”) –

 

requesting release of the pledge that had been given, on the following shares in Taesa:

18,411,545 (eighteen million four hundred eleven thousand five hundred forty five) common shares and

36,823,090 (thirty six million eight hundred twenty three thousand ninety) preferred shares –

 

to make it possible to carry out a follow-on transaction, jointly with

Fundo de Investimentos em Participações Coliseu (‘FIP Coliseu’),

in a secondary public offering of Units in Taesa, with restricted efforts in Brazil under CVM Instruction 476, and international efforts under Rule 144A and Regulation S of the US Securities Act;

 

c) on November 30, 2016 BTG exercised the Put Option in the ‘First Exercise Window’, under the Stockholders’ Agreements of the successors of Parati –

Luce Empreendimentos e Participações S.A. (‘Lepsa’) and

Rio Minas Energia Participações S.A. (‘RME’) –

 

  

 

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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  as a result of which Cemig acquired the following shares previously held by BTG:

76,817,097 (seventy six million eight hundred seventeen thousand ninety seven)

preferred shares in Lepsa, and

76,817,097 (seventy six million eight hundred seventeen thousand ninety seven)

preferred shares in RME

  as a result of which BTG ceased to be a stockholder in Parati;

 

d) on September 1, 2017 the exercise value of the Put Option was

R$ 1,560,016,041.42 (one billion five hundred sixty million sixteen thousand forty one Reais forty two centavos),

in which the component of principal was

R$ 921,047,584.94    (nine hundred twenty one million forty seven thousand five hundred

eighty four Reais ninety four centavos),

the component of remuneration was

R$ 335,075,058.58    (three hundred thirty five million seventy five thousand fifty eight Reais fifty eight centavos),

and the gross-up factor represented

R$ 303,893,397.90    (three hundred three million eight hundred ninety three thousand three hundred

ninety seven Reais ninety centavos);

 

e) on September 15, 2017, the remaining banks holders of the Put Option notified Cemig of their intention to exercise the Put Option on all the shares they hold in RME and Lepsa, pursuant to their rights under the Stockholders’ Agreement as signed by Cemig, Santander, BV Financeira and BB-BI, with RME and Lepsa as consenting parties, the amount to be paid by November 30, 2017;

 

f) in this situation it becomes essential to extend the date for exercise of the Put Option, so as to avoid
  (i) Light becoming state-controlled, an event which could give rise to early maturity of several of Light’s financing contracts, which have cross-default clauses; and
  (ii) an accentuated fall in the stock price of its shares, which would be negative for the Banks referred to, since one of the guarantees of the Put Option would lose value;

 

g) extension of the exercise date of the Put Option is conditional upon prior authorization by the stockholders of Cemig in an Extraordinary General Meeting.

–       do now propose to you as follows:

 

Re-ratification of the decision taken by the Extraordinary General Meeting of May 30, 2016, altering its terms so as to postpone the date of exercise of the Put Option granted by Cemig on April 11, 2011 to:

Redentor Fundo de Investimento em Participações (‘FIP Redentor’)

                             (succeeded by Banco Santander S.A. (Brasil)),

BV Financeira S.A. – Crédito, Financiamento e Investimento (‘BV Financeira’), and

BB – Banco de Investimento S.A. (‘BB–BI’).

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

Belo Horizonte, October 20, 2017

 

José Afonso Bicalho Beltrão da Silva

  José Pais Rangel

Marco Antônio de Rezende Teixeira

  Marcelo Gasparino da Silva

Bernardo Afonso Salomão de Alvarenga

  Marco Antônio Soares da Cunha Castello Branco

Antônio Dirceu Araújo Xavier

  Nelson José Hubner Moreira

Arcângelo Eustáquio Torres Queiroz

  Patrícia Gracindo Marques de Assis Bentes

Helvécio Miranda Magalhães Junior

  Daniel Alves Ferreira

 

 

  

 

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. MARKET ANNOUNCEMENT DATED OCTOBER 20, 2017: NEW MEMBERS OF EXECUTIVE BOARD

 

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

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

MARKET ANNOUNCEMENT

New members of Executive Board

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 as amended, hereby reports to the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (Brasil, Bolsa, Balcão – B3) and the market as follows:

At today’s meeting Cemig’s Board of Directors decided to make the following new appointments to its Executive Board:

 

Chief Business Development Officer:    Mr. José Maria Rabelo.
Chief Institutional Relations and Communication Officer:    Mr. Thiago de Azevedo Camargo.

Mr. José Maria Rabelo has a Degree in Law, and MBA in Business Studies for Senior Executives, from the Federal University of Minas Gerais (UFMG). He was a career employee of Banco do Brasil, where he served as Vice-President for International and Wholesale Business from 2005 to 2009. From 2011 to 2014 he was Chief Executive Officer of the National Authority for Supplementary Pension Plans (Superintendência Nacional de Previdência Complementar – Previc). His work in other companies includes serving on the Board of Directors and Audit Board of Taesa, in the period 2011–2015.

Mr. Thiago de Azevedo Camargo has a Degree in Law, and Master’s Degree in Political Science with specialization in Policies, from UFMG. He has wide professional experience, working in several companies in both the public and the private sectors.

Belo Horizonte, October 20, 2017

Adézio de Almeida Lima

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. MARKET ANNOUNCEMENT DATED OCTOBER 24, 2017: AGC FURTHER REDUCES HOLDING IN CEMIG ON, TO 12.79%

 

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

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

MARKET ANNOUNCEMENT

AGC further reduces holding in Cemig ON, to 12.79%

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 Article 12 of CVM Instruction 358 of January 3, 2002 as amended, hereby reports to the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (Brasil, Bolsa, Balcão – B3) and the market as follows:

Cemig has received correspondence from AGC ENERGIA S.A. with the following content:

  In accordance with the terms of Article 12 of CVM Instruction 358 of January 3, 2002 as amended, AGC ENERGIA S.A., a corporation constituted under the laws of Brazil, with head office at Av. do Contorno 8123, Cidade Jardim, Belo Horizonte, Minas Gerais, registered in the CNPJ/MF under No. 11.221.326/0001-65, herein represented in accordance with its articles of association (‘AGC Energia’), hereby reports that it has reduced its equity interest in the common shares of Companhia Energética de Minas Gerais – CEMIG (‘Cemig’)

from         68,545,756 common shares, equivalent to 16.29% of the voting stock in Cemig

to         53,806,156 common shares, equivalent to 12.79% of the voting stock in Cemig,

through sale on a securities exchange of 14,739,600 common shares in Cemig.

The equity interest in Cemig now held by AGC Energia in Cemig is a minority investment which does not involve any change in the composition of the stockholding control of Cemig nor any change in Cemig’s administrative structure.

Please do not hesitate to contact us if you need any further information..  ”

Belo Horizonte, October 24, 2017.

Adézio de Almeida Lima

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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11. MATERIAL ANNOUNCEMENT DATED OCTOBER 24, 2017: RENOVA: ANEEL APPROVES TRANSFER OF CONTROL OF WIND FARMS

 

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

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

MATERIAL ANNOUNCEMENT

Renova: Aneel approves transfer of control of wind farms

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

Today Cemig’s affiliated company Renova Energia S.A. (‘Renova’) published the following Material Announcement:

“  Complementing its Material Announcement of August 23, 2017, Renova Energia S.A. (RNEW11) (‘Renova’), in compliance with CVM Instruction 358/2002 as amended, hereby informs its stockholders and the market in general as follows:

On toda y’s date, the 40th Public Meeting in 2017 of the Council of Aneel, the Brazilian electricity regulator, approved the transfer of the Umburanas wind farm complex to Engie Brasil Energia S.A. (‘Engie’).

However, since the negotiation involved an application for cancellation of four grants of concessions in that complex, the Council decided:

 

  (i) to subject Renova to a fine of R$ 3.8 million; and

 

  (ii) to suspend Renova’s right to contract with Aneel or participate in competitive tenders held by it, for one year.

The decision does not affect the controlling stockholders of Renova.

Below is a copy of the decision, downloaded today from Aneel’s website (at: http://www2.aneel.gov.br/aplicacoes_liferay/noticias_area/dsp_detalheNoticia.cfm?idNoticia=9346&idAreaNoticia=425 )

 

  

 

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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The Council decided unanimously as follows:

 

(i) To suspend the process of decision on Procedure Notices No’s:

 

  1049/2017;        1050/2017;        1051/2017;        1053/2017;         1054/2017;              1056/2017;
  1057/2017;        1058/2017;        1059/2017;        1061/2017;         1063/2017;              1064/2017;
  1065/2017;        1066/2017;        1067/2017;        1068/2017;         1069/2017     and    1070/2017,

issued by the SFG against Renova Energia S.A., controlling stockholder of the special-purpose companies (SPCs) Centrais Eólicas Umburanas 1 to 8, until formalization of the application to Aneel for transfer of stockholding control, to be made within 30 calendar days of the publication of this decision.

 

(ii) To repeal, as per the attached Minutes of Resolution, the grants that are the subject of Ministerial Orders 388/2014, 550/2014, 433/2014 and 435/2014, issued by the Mining and Energy Ministry, which gave the authorizations for the wind farm companies Centrais Eólicas Umburanas 2, 3, 4 and 5 to establish themselves as independent power producers through construction and operation of the wind farms Umburanas 4, 7, 12 and 14, without prejudice to the obligations specified in the related grants and auctions.

 

(iii) To approve the Plan for Transfer of Stockholding Control from Renova Energia S.A., controlling stockholder of the Special-Purpose Companies Centrais Eólicas Umburanas 1 to 8 to Engie Brasil Energia S.A., under Article 4C of Law 13360/2016, which authorizes the transfer of stockholding control as an alternative to cancellation of authorization, in light of the new controlling stockholder having shown a real commitment of technical and financial capacity to making the subject of the grant viable, except in relation to repeal of authorizations without penalty, and in relation to the point of connection.

 

(iv) To return the case records of the penalty proceedings that are the subject of the Procedure Notices, to the Generation Services Monitoring Supervision Unit (Superintendência de Fiscalização dos Serviços de Geração – SFG), which is hereby authorized to set those proceedings aside after actual transfer of stockholding control takes place.

 

(v) If the transfer of stockholding control does not take place, for whatever reason, the SFG will return the case records, including the related Procedure Notices, with a proposal to repeal the authorization for construction and commercial operation of the Umburanas Complex wind farms, for a final decision by the Council, in which event there may be penalties, varying depending on the situation of the project.

 

  

 

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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(vi) To order Renova Energia S.A., taking into account the attenuating circumstances, to pay fines in the amount of 1% of the value of investment declared to EPE (Empresa de Pesquisa Energética – Energy Research Company), of R$ 826,207.90, R$ 1,042,881.80, R$ 926,109.10 and R$ 1,080,509.60, respectively, in relation to the Umburanas 4, 7, 12 and 14 wind farms.

 

(vii) To suspend, temporarily, the right of Renova Energia S.A. to contract with or take part in competitive bids or tenders held by Aneel, for a (non-cumulative) period of one year, for non-compliance with obligations related to the Umburanas 4, 7, 12 and 14 wind farms – this penalty may be lifted in the event of transfer from Renova Energia S.A. to a new controlling stockholder.

 

(viii) If the fines referred to in item (vi) are not paid, the Generation Concessions and Authorizations Supervision Unit (Superintendência de Concessões e Autorizações de Geração – SCG) is hereby authorized to execute the Full Compliance Guarantees related to the Umburanas 4, 7, 12 and 14 wind farms, which are of the following respective amounts:

 

  R$4,131,039.50, R$5,214,409.00, R$4,630,545.50 and R$5,402,548.00.

 

(ix) To suspend execution of the penalties and Full Compliance Guarantees relating to the wind farms Umburanas 1, 2, 3, 5, 6, 8, 9, 10, 11, 13, 15, 16, 17, 18, 19, 21, 23 and 25; and, if the plan for transfer of control is fully executed, to authorize the SCG to set aside the related proceedings.

Belo Horizonte, October 24, 2017

Adézio de Almeida Lima

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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12. NOTICE TO STOCKHOLDERS DATED NOVEMBER 01, 2017: CAPITAL INCREASE: SUBSCRIPTION OF LEFTOVER SHARES – NEW DATES

 

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

CNPJ 17.155.730/0001

NOTICE TO STOCKHOLDERS

Capital increase:

Subscription of leftover shares – new dates

Cemig (Companhia Energética De Minas Gerais) (‘Cemig’) hereby informs its stockholders and the market as follows:

The dates for the 1st and 2nd Apportionments in subscription of leftover shares, referred to in the Notice to Stockholders of October 26, 2017, have been altered as follows:

1st Apportionment:     December 5, 6 and 7, 2017;

2nd Apportionment:     December 13 and 14, 2017.

This alteration is to meet operations needs posted by Banco Itaú (‘the Bookkeeping Bank’) and the Assets Deposit Center of the São Paulo Securities Exchange (Brasil, Bolsa e Balcão S.A. – ‘B3’).

Belo Horizonte, November 1, 2017

Adézio de Almeida Lima

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. MARKET ANNOUNCEMENT DATED NOVEMBER 06, 2017: CEMIG: FINANCIAL UPDATE

 

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

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

MARKET INFORMATION

Cemig: Financial update

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 Article 12 of CVM Instruction 358 of January 3, 2002 as amended, hereby reports to the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (Brasil, Bolsa, Balcão – B3) and the market as follows:

As widely publicized at, and since, Cemig’s 22nd Annual Meeting with the Capital Markets, on June 1, 2017, Cemig is working successfully on execution of its plan to improve its capital structure, increase its operational cash flow generation, and diversify its sources of finance.

The plan is based primarily on the following lines of action:

 

    Reprofiling of debt:

This is in negotiation with the main creditor banks, for a total of R$ 4 billion, with approximate maturity of five years, and grace period of up to 18 months.

This has been approved by the Company’s governance.

 

    International debt issue:

An issue of debt outside Brazil of approximately US$1 billion.

This has been approved by the Company’s governance.

 

    Capital increase:

Increase in the Company’s share capital by R$ 1.3 billion, through subscription of shares.

(Approved by the EGM of October 26, 2017.)

 

    Sale of shares:

A proposed solution for the Put options related to Light, through sale of shares held outside the controlling block of the investee company.

 

    Disinvestment program:

Cemig has various processes of disinvestment in progress.

Highlights are the processes for the sale of its equity interests in Santo Antônio Energia, Light and Renova. The stage of these processes is in line with timing considered to be appropriate for M&A transactions for disposal of interests in companies of this scale.

 

    Operational efficiency:

1,948 employees accepted the Voluntary Retirement Programs implemented in 2016 and 2017 – resulting in a reduction in costs of approximately R$ 450 million per year.

 

  

 

Av. Barbacena 1200

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

 

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In addition to the above, there are also the following significant factors:

Financial expenses:     The reduction in the Selic interest rate has made a substantial contribution to reduction of Cemig’s financial

                                      expenses.

Cash flow:                     Payment of debt of approximately R$ 1 billion in 2017 is a demonstration of Cemig’s economic strength and

                                      cash flow generation capacity.

Tariffs:                         The Periodic Tariff Review scheduled for May 2018 will also contribute to increase in the Company’s cash

                                      generation.

Cemig will keep its stockholders and the market opportunely and appropriately informed on developments on this subject.

Belo Horizonte, November 6, 2017.

Adézio de Almeida Lima

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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14. MARKET ANNOUNCEMENT DATED NOVEMBER 09, 2017: REPLY TO STOCK EXCHANGE INQUIRY LETTER 1711/2017—SAE, OF NOVEMBER 8, 2017

 

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

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

MARKET ANNOUNCEMENT

Reply to Stock Exchange Inquiry Letter 1711/2017—SAE, of November 8, 2017

Inquiry received:

Companhia Energética de Minas Gerais

Att.: Mr. Adézio de Almeida Lima

Investor Relations Director

Subject: Request for information on news media report

Dear Sirs,

A news report in the newspaper Valor Econômico of November 8, 2011, under the headline

“Not selling Light, Cemig prepares sale of shares in Taesa”

contains, among others, the following statements:

 

  1. Cemig has begun preparations to sell the shares in Taesa.

 

  2. The scale of the transaction is expected to be between R$ 800 million and R$ 1.3 billion, and the aim is to complete it before December.

We request information/explanations on the items indicated, by November 9, 2017, including your confirmation of them or otherwise, and also any other information that is considered to be important.

Reply by CEMIG

To: Ms. Ana Lucia da Costa Pereira,

Supervision Office for Companies and Equity Securities Offers, B3 S.A. – Brasil, Bolsa, Balcão:

In response to Official Letter 1711/2017-SAE, of November 8, 2017, we inform you as follows:

Cemig published its Disinvestment Program in a Material Announcement on June 1, 2017.

Taesa is included in that program, among other assets.

Also, a Market Announcement was published on November 6, 2017, which clearly stated:

“Cemig has various processes of disinvestment in progress....”

Cemig takes this opportunity of reiterating its commitment to opportune and timely disclosure of all and any facts that are of interest to its stockholders, in accordance with Article 2 of CVM Instruction 358/2002.

Belo Horizonte, November 9, 2015

Adézio de Almeida Lima

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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15. MATERIAL ANNOUNCEMENT DATED NOVEMBER 09, 2017: CEMIG JOINS ICMS TAX MITIGATION PLAN

 

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

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

MATERIAL ANNOUNCEMENT

Cemig joins ICMS tax mitigation plan

Cemig (Companhia Energética de Minas Gerais), a listed company with securities traded on the stock exchanges of São Paulo, New York and Madrid, as per CVM Instruction 358 of January 3, 2002, as amended, hereby informs the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (Brasil, Bolsa, Balcão – B3) and the market as follows:

Cemig has subscribed to the Tax Credits Regularization Plan (Plano de Regularização de Créditos Tributários, or PRCT) of Minas Gerais State, in relation to ICMS tax totaling R$588 million, resulting in a significant mitigation of risk.

The commitment by Cemig D, for an amount of R$558 million, results in a reduction of 90% in interest charged and penalty fines imposed in relation to payment of the tax. This amount is for the base-date September 2017, and will be updated by application of 50% of the Selic rate until the date of payment, which is to be made in six monthly installments. The first of these, of R$93 million, was paid on October 31, 2017.

The commitment by Cemig GT, for an amount of R$30 million, which was paid in full on October 31, 2017, reduced interest and penalty fines charged by 95%.

The decision will result in negative effects in the results for 3Q17 – reducing Ebitda by approximately R$588 million, and Net profit by approximately R$388 million.    

Payment of the obligation will be financed by operational cash flow, without causing any increase in debt, and without significant change in our financial programming.

Belo Horizonte, November 9, 2017.

Adézio de Almeida Lima

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. SUMMARY OF MINUTES OF THE 713RD MEETING OF THE BOARD OF DIRECTORS DATED NOVEMBER 10, 2017

 

 

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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 November 10, 2017

SUMMARY OF PRINCIPAL DECISIONS

At its 713rd meeting, held on November 10, 2017, the Board of Directors of Cemig (Companhia Energética de Minas Gerais) decided the following:

 

  1. Orientation of vote in a meeting of the Board of Directors of Taesa, on increase in the share capital of Mariana Transmissora de Energia Elétrica S.A.

 

  2. Signature of an Amendment to the Transmission Concession Contract between Cemig GT and Aneel, with intervention and consent of Cemig.

 

  3. Operation in distributed generation and energy solutions.

 

  4. Extension of the maturity of Cemig GT’s 7th Issue of Commercial Promissory Notes, with guarantee by Cemig.

 

  5. General Meeting of Debenture Holders of Cemig GT’s 7th Debenture Issue.

 

  6. Extension of the maturity of debt of Cemig D, with guarantee by Cemig.

 

  7. Convocation of an Extraordinary General Meeting of Stockholders, to deal with election of members of the Board of Directors due to resignations.

 

  

 

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. MATERIAL ANNOUNCEMENT DATED NOVEMBER 13, 2017: NON-BINDING OFFERS FOR LIGHT

 

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

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

MATERIAL ANNOUNCEMENT

Non-binding offers for Light

In continuation of the reports in its Material Announcements published on August 28 and October 2, 2017, and as per CVM Instruction 358 of January 3, 2002, as amended, Cemig (Companhia Energética de Minas Gerais – listed in São Paulo, New York and Madrid) – hereby informs the market, the Brazilian Securities Commission (‘CVM’) and the São Paulo Stock Exchange (‘B3’) as follows:

Cemig has received non-binding proposals related to its process of disinvestment, as a result of the first phase of access to the documents and information contained in the Data Room made available to potential investors in relation to the Light group.

Cemig is analyzing these proposals for possible selection for inclusion in the next phase.

If a selection is made, conclusion of the disinvestment process will also be subject to: a phase of due diligence, including technical visits; submission of binding proposals; negotiations; final approvals for signature of definitive agreements for the transaction referred to; and approvals of conditions precedent that are usual in this type of transaction.

Cemig will keep its stockholders and the market opportunely and appropriately informed on the conclusion of this transaction.

Belo Horizonte, November 13, 2017.

Adézio de Almeida Lima

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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18. MATERIAL ANNOUNCEMENT DATED NOVEMBER 13, 2017: RENOVA: BINDING PROPOSAL FOR CAPITALIZATION

 

 

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COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG

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

MATERIAL ANNOUNCEMENT

Renova: binding proposal for capitalization

As part of the Disinvestment Program published by Cemig on June 1, and updated July 7, 2017; in continuation of Cemig’s reporting to the public in Material Announcements of July 7, September 15 and October 17, 2017, and in compliance with CVM Instruction 358 of January 3, 2002 as amended,

Cemig (Companhia Energética de Minas Geraislisted in São Paulo, New York and Madrid), hereby reports to the Brazilian Securities Commission (CVM), the São Paulo Stock Exchange (B3) and the market as follows:

On November 11, 2013, Cemig’s affiliated company Renova Energia S.A. (‘Renova’) published the following Material Announcement:

Renova Energia S.A. (RNEW11) (‘Renova’), as per CVM Instruction 358/2002 as amended, and with reference to:

 

(i) its Market Notice published on July 4, on receipt of a non-binding offer from Brookfield Energia Renovável (‘Brookfield’) for capitalization of Renova;

 

(ii) its Material Announcement of July 17, when Renova granted exclusivity to Brookfield for due diligence and negotiation of documents for a primary subscription of capital in Renova;

 

(iii) the Material Announcement of September 15, 2017, when Renova extended this exclusivity by 30 days; and

 

(iv) the Material Announcement of October 17, when the exclusivity period ended,

– now reports as follows:

Yesterday (November 12, 2017), after the close of the market, Renova received a binding proposal for primary investment of R$ 1.4 billion in Renova, at a price of R$ 6 per unit.

Continued >

 

  

 

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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The offer further includes an earn-out of up to R$ 1.00 (one Real) per unit, for any amount that Renova receives in the future as adjustment to the sale price of the Alto Sertão II Wind Power Complex.

The proposal also specifies conditions precedent that are usual in this type of transaction.

In the event of acceptance, Brookfield will be given a period of exclusivity of 60 days, able to be extended for 30 days, to finalize the documents of the transaction. The transaction will then be subject to consideration and approval by the governance bodies of Renova and its controlling stockholders.

Renova reiterates its commitment to keeping stockholders and the market in general fully and timely informed in accordance with the applicable legislation.

Belo Horizonte, November 13, 2017.

Adézio de Almeida Lima

Chief Finance and Investor Relations Officer,

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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19. PUBLICATION OF RESULTS DATED NOVEMBER 15, 2017: EARNINGS RELEASE – 3Q 2017

 

 

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PUBLICATION OF RESULTS

CEMIG REPORTS

EBITDA OF R$ 101 MILLION

IN 3Q17

Main impacts in 3Q17:

 

  Expense on acceptance of the Minas Gerais State Tax Regularization Plan – for ICMS tax claims totaling R$ 588 million.

 

  Positive effect, of R$ 277 million, from recalculation of amounts related to the Advance against Future Capital Increase (AFAC).

 

  Provision for losses on investments: R$ 112 million.

 

  Equity method result: loss of R$ 81 million.

 

Indicators (GWh)

   3Q17     3Q16     Change%  

Electricity sold (excluding CCEE)

     14,046       13,841       1.48  

Indicators – R$ ’000

   3Q17     3Q16     Change%  

Sales on CCEE

     111,330       87,198       27.67  

Net debt

     12,770,079       13,138,920       (2.81

Gross revenue

     8,316,895       7,405,476       12.31  

Net revenue

     5,135,822       4,895,606       4.91  

Ebitda (IFRS)

     100,569       1,193,928       (91.58

Net profit in the quarter

     (83,666     433,502       —    

Earnings per share – R$

     -0.06       0.34       —    

Ebitda margin, %

     1.97     24.39     (22.42 )p.p. 

 


 

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Conference call

Publication of 3Q17 results

Video webcast and conference call

November 16, 2017 (Wednesday), at 2 p.m. 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:

Tel.: +55 (11) 2188-0400

Password: a CEMIG Português

(Available from November 16-30, 2017)

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

Adézio de Almeida Lima

 

General Manager, Investor Relations

Antônio Carlos Vélez Braga

 

Manager, Investor Market

Robson Laranjo

 

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Contents

 

CONFERENCE CALL

     48  

CEMIG INVESTOR RELATIONS

     48  

CEMIG’S EXECUTIVE INVESTOR RELATIONS TEAM

     48  

CONTENTS

     49  

DISCLAIMER

     50  

OUR SHARES – IN 3Q17

     51  

CEMIG’S LONG-TERM RATINGS

     52  

ADOPTION OF IFRS

     52  

PROFIT AND LOSS ACCOUNTS

     53  

CEMIG’S CONSOLIDATED ELECTRICITY MARKET

     54  

THE ELECTRICITY MARKET OF CEMIG D

     56  

THE ELECTRICITY MARKET OF CEMIG GT

     57  

PHYSICAL TOTALS OF TRANSPORT AND DISTRIBUTION – MWH

     57  

QUALITY INDICATORS – SAIDI AND SAIFI

     58  

CONSOLIDATED OPERATIONAL REVENUE

     60  

SECTOR/REGULATORY CHARGES REPORTED AS DEDUCTIONS FROM REVENUE

     64  

OPERATIONAL COSTS AND EXPENSES

     65  

EQUITY METHOD GAINS IN NON-CONSOLIDATED INVESTEES

     69  

FINANCIAL REVENUE AND EXPENSES

     71  

EBITDA

     72  

DEBT

     73  

RESULTS SEPARATED BY BUSINESS SEGMENT

     74  

 

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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, which 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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Our shares – in 3Q17

 

Security

   Ticker    Currency      Close of
September 30,
2017
     Close of
2016
     Change
in the
period %
 

Cemig PN

   CMIG4      R$        7.74        7.28        6.32%  

Cemig ON

   CMIG3      R$        7.82        7.70        1.52%  

ADR PN

   CIG      US$        2.48        2.22        11.79%  

ADR ON

   CIG.C      US$        2.43        2.53        –3.99%  

Ibovespa

   Ibovespa      —          74,294        60,227        23.36%  

IEEX

   IEEX      —          41,306        36,108        14.40%  

 

Source: Economática.

Trading volume in Cemig’s preferred shares (CMIG4) totaled R$ 12.94 billion in the first nine months of 2017, a daily average of R$ 69.19 million.    Adding the volume traded in its common (ON) and preferred (PN) shares, Cemig was the company with the highest stock trading liquidity in the Brazilian electricity sector in the period, and among the most traded in the Brazilian market as a whole.

On the New York Stock Exchange the volume traded in ADRs for Cemig’s preferred shares (CIG) in first nine months of 2017 was US$ 2.46 billion: we see this as reflecting recognition by the investor market – and as maintaining Cemig’s undeniable status as a global investment option.

 

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Cemig’s long-term ratings

These tables show credit risk ratings and outlook for Cemig’s companies as provided by the principal rating agencies:

Brazilian rating:

 

Agency

   Cemig    Cemig D    Cemig GT
     Rating    Outlook    Rating    Outlook    Rating    Outlook

Fitch

   BB–(bra)    Negative    BB–(bra)    Negative    BB–(bra)    Negative

S&P

   brBBB–    Stable    brBBB–    Stable    brBBB–    Stable

Moody’s

   B2.br    Negative    B2.br    Negative    B2.br    Negative

Global rating:

 

Agency

   Cemig    Cemig D    Cemig GT
     Rating    Outlook    Rating    Outlook    Rating    Outlook

Fitch

   B-    Negative    B-    Negative    B-    Negative

S&P

   B    Stable    B    Stable    B    Stable

Moody’s

   B3    Negative    B3    Negative    B3    Negative

Adoption of IFRS

The results presented below are prepared in accordance with the new Brazilian accounting rules, which embody a process of harmonization of Brazilian accounting standards to IFRS (International Financial Reporting Standards). In thousands of Reais (R$ ’000)

 

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PROFIT AND LOSS ACCOUNTS

 

Consolidated – R$ ’000

   3Q17     3Q16     Change%  

REVENUE

     5,135,822       4,895,606       4.91  

OPERATING COSTS

      

Personnel

     (358,505     (373,986     (4.14

Employees’ and managers’ profit shares

     (886     (24,217     (96.34

Post-retirement obligations

     (101,589     (89,306     13.75  

Materials

     (16,185     (17,057     (5.11

Outsourced services

     (233,805     (201,023     16.31  

Electricity purchased for resale

     (2,942,974     (2,170,348     35.60  

Depreciation and amortization

     (205,983     (202,480     1.73  

Operating provisions

     (188,875     19,375       —    

Charges for use of the national grid

     (387,078     (215,504     79.62  

Gas bought for resale

     (304,698     (196,494     55.07  

Infrastructure construction costs

     (295,720     (334,122     (11.49

Other operating expenses, net

     (124,140     (132,214     (6.11
  

 

 

   

 

 

   

 

 

 

TOTAL COST

     (5,160,438     (3,937,376     31.06  

Equity method gains in non-consolidated investees

     (80,798     33,218       (343.24

Operational profit before Financial income (expenses) and taxes

     (105,414     991,448       (110.63

Financial revenues

     201,164       231,256       (13.01

Financial expenses

     (188,750     (654,168     (71.15
  

 

 

   

 

 

   

 

 

 

Pre-tax profit

     (93,000     568,536       (116.36

Current and deferred income tax and Social Contribution tax

     9,334       (135,034     —    
  

 

 

   

 

 

   

 

 

 

NET PROFIT FOR THE PERIOD

     (83,666     433,502       —    
  

 

 

   

 

 

   

 

 

 

Interest of the controlling shareholders

     (83,828     433,397    

Interest of non-controlling stockholder

     162       105    
  

 

 

   

 

 

   

NET PROFIT FOR THE PERIOD

     (83,666     433,502    
  

 

 

   

 

 

   

Non Recorring

      

ICMS – Tax Credits Regularization Plan

     387,832       —         —    

Monetary updating – AFAC

     (183,297     —         —    

Generation indemnity revenue

     (171,281       —    
  

 

 

   

 

 

   

 

 

 
     (50,412     433,502       —    
  

 

 

   

 

 

   

 

 

 

 

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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 GT’), and other wholly-owned subsidiaries:

 

Horizontes Energia,    Termelétrica Ipatinga (up to January 2016),
Sá Carvalho,    Termelétrica de Barreiro,    Cemig PCH,
Rosal Energia,    Cemig Geração Camargos,    Cemig Geração Itutinga,
Cemig Geração Salto Grande,    Cemig Geração Três Marias,    Cemig Geração Leste,
Cemig Geração Oeste and    Cemig Geração Sul.     

The total for sales in 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 Free Market;

 

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

 

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

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

In 3Q17 the Cemig group sold total volume of 14,046,051 GWh, or 1.48% more than in 3Q16.

Sales of electricity to final consumers plus Cemig’s own consumption totaled 10,609,657 MWh, or 1.99% less than in 3Q16.

Sales to distributors, traders, other generating companies and independent power producers in 3Q17 totaled 3,427,498 MWh – or 14.00% more than in 3Q16.

In September 2017 the Cemig group invoiced 8,326,081 clients – a growth of 1.2% in the consumer base since the end of September 2016. Of these, 8,325,699 are final consumers, and/or represent Cemig’s own consumption; and 382 are other agents in the Brazilian electricity sector.

 

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This chart shows the breakdown of sales of the Cemig group by type of consumer:

 

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Total consumption of electricity (GWh)

 

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Consolidated

   MWh      Change,%     Average
price
3Q17
R$ ’000
     Average
price
3Q16
R$ ’000
 
   3Q17      3Q16          

Residential

     2,456,908        2,389,353        2.83       764,49        778.08  

Industrial

     4,458,794        5,031,850        (11.39     271,45        274.17  

Commercial, Services and Others

     1,776,377        1,522,936        16.64       553,00        647.15  

Rural

     1,016,897        1,015,555        0.13       417,31        388.46  

Public authorities

     207,967        208,314        (0.17     579,90        617.59  

Public lighting

     354,299        338,892        4.55       374,52        380.70  

Public services

     338,415        318,605        6.22       426,07        427.07  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Subtotal

     10,609,657        10,825,505        (1.99     461,17        463.03  

Own consumption

     8,896        8,528        4.32       —          —    

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

     3,427,498        3,006,675        14.00       117,02        225.28  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total

     14,046,051        13,840,708        1.48       414,04        418.16  

 

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

 

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The electricity market of Cemig D

Electricity billed to captive clients by Cemig D, and electricity transported for Free Clients and distributors with access to Cemig D’s networks, totaled 10,826 GWh in 3Q17, or 0.27% more than in 3Q16.

There are two components of this reduction: consumption by the captive market 2.1% lower YoY, and use of the network by Free Clients 3.7% higher YoY.

In September 2017 the Cemig D invoiced 8,323,807 clients – a growth of 1.2% in the consumer base since the end of September 2016.

 

Cemig D

   Number of clients      Change,%  
   Sep. 30,
2017
     Sep. 30,
2016
    

Residential

     6,752,343        6,663,027        1.34  

Industrial

     73,811        74,768        –1.28  

Commercial, Services and Others

     715,539        717,977        –0.34  

Rural

     699,410        689,765        1.40  

Public authorities

     63,871        64,141        –0.42  

Public lighting

     5,994        5,250        14.17  

Public services

     12,839        12,263        4.70  
  

 

 

    

 

 

    

 

 

 

Total

     8,323,807        8,227,191        1.17  
  

 

 

    

 

 

    

 

 

 

Comments on the various consumer categories:

Residential

Consumption by captive residential users of Cemig D in 3Q17, at 2,456,908 MWh, was 2.83% more than in 3Q16. The higher residential consumption can be seen as reflecting: the addition of 89,316 new consumer units; higher temperatures in 3Q17, causing more use of air conditioners and ventilators in homes; and economic indicators of income and employment showing signs of recovery.

Industrial

Electricity used by captive industrial clients of Cemig D totaled 649,318 MWh in 3Q17 – a reduction of 17.91% when compared to 3Q16.

 

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This lower consumption mainly reflects migration of captive consumers to the Free Market – which was also responsible for part of the increase in the total volume of power distributed.

Cemig D transported a total of 4,585,830 MWh for Free Clients in 3Q17.

Commercial

Total consumption by the captive clients of Cemig D in the commercial category totaled 1,207,847 MWh, or 7.32% less than in 3Q16, mainly because of the adverse conditions of the economy, with lower disposable family incomes and lower economic activity in the other private and public sectors of the economy.

Cemig D transported a total of 239,256 MWh for industrial Free Clients in 3Q17. The 59.30% positive YoY comparison of volume transported for Free Clients mainly reflects incorporation of new facilities supplied with power from incentive-bearing sources.

Physical totals of transport and distribution – MWh

 

Item

   MWh      Change
%
 
   3Q17      3Q16     

Total energy carried

     12,557,710        12,605,734        (0.22

Electricity transported for distributors

     87,016        95,111        (8.51

Electricity transported for Free Clients

     4,564,373        4,394,256        3.87  

Own load

     7,926,321        8,116,367        (2.34

Consumption by captive market

     6,231,650        6,364,941        (2.09

Losses in distribution network

     1,694,671        1,751,426        (3.24

The electricity market of Cemig GT

Cemig GT billed a total of 7,399,204 MWh in 2016, 1.62% more than in 3Q16.

The number of clients billed by Cemig GT was 28.8% higher than in September 2016, totaling 1,203. Of these: 1,137 were industrial, commercial and rural clients; 47 were distribution companies; and 20 were companies in the category of traders, generators and independent power producers. From the end of September 2016 to the end of September 2017 Cemig GT added 102 new industrial clients, 1 rural client and 174 clients in the Commercial and Services category.

 

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Free Clients in the industrial, commercial and rural categories consumed 3,951,230 MWh in 3Q17, or 7.1% less than in 3Q16.

This lower amount reflects consumption by industrial clients 16.1% lower year-on-year, due to: some industrial clients terminating contracts with Cemig GT and signing new contracts with Cemig subsidiary companies; and low consumption of industrial clients due to the economic context in Brazil.

Trading of electricity to other agents in the electricity sector in the Free Market totaled 2,856,740 MWh in 3Q17, 17.1% less than in 3Q16.

 

Cemig GT

   MWh      Change,%  
   3Q17      3Q16     

Free Clients

     3,951,230        4,252,326        –7.1  

Industrial

     3,389,444        4,039,479        –16.1  

Commercial

     561,786        212,847        163.9  

Free Market – Free contracts

     2,856,740        2,427,309        17.7  

Regulated Market

     557,940        566,118        –1.4  

Regulated Market – Cemig D

     33,293        35,441        –6.1  
  

 

 

    

 

 

    

 

 

 

Total

     7,399,204        7,281,194        1.6  

Cemig GT SPCs – Free Clients

     258,863        —          —    
  

 

 

    

 

 

    

 

 

 

Total

     7,658,067        7,281,194        5.2  
  

 

 

    

 

 

    

 

 

 

QUALITY INDICATORS – SAIDI AND SAIFI

Cemig is continuously taking action to improve operational management, organization of the logistics of emergency services, and its permanent regime of inspections and preventive maintenance of substations, lines and distribution networks. It also invests in training of its staff for improved 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 2016.

 

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Total SAIDI (System Average Interruption Duration Index) – hours/consumer/month

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SAIDI components, 2016 and 2017 – hours/consumer/month

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Total SAIFI (System Average Interruption Feqency Index) – outages/consumer/month

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SAIDI components, 2016 and 2017 – outages/consumer/month

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Consolidated operational revenue

Revenue from supply of electricity:

Total revenue from supply of electricity in 3Q17 was R$ 5,815,621, or 0.48% higher than in 3Q16 (R$ 5,787,568).

Final consumers

Total revenue from electricity sold to final consumers, excluding Cemig’s own consumption, in 3Q17 was R$ 4,892,843, or 2.39% less than in 3Q16 (R$ 5,012,483).

The main factors in this revenue were:

 

  The Annual Tariff Adjustment for Cemig D, with average (upward) effect on consumer tariffs of 3.78%, effective from May 28, 2016 (full effect in 2017).

 

  The Annual Tariff Adjustment for Cemig D, with an average negative effect on consumer tariffs of 10.66%, effective from May 28, 2017.

 

  Volume of electricity sold to final consumers 1.99% lower year-on-year.

 

     R$ ’000      Change
%
    Average
price

3Q17
R$
     Average
price

3Q16
R$
     Change
%
 
   3Q17     3Q16             

Residential

     1,878,293       1,859,109        1.03       764,49        778,08        (1.75

Industrial

     1,210,358       1,379,561        (12.26     271,45        274,17        (0.99

Commercial, Services and Others

     982,345       985,574        (0.33     553,00        647,15        (14.55

Rural

     424,366       394,504        7.57       417,31        388,46        7.43  

Public authorities

     120,600       128,652        (6.26     579,90        617,59        (6.10

Public lighting

     132,691       129,015        2.85       374,52        380,70        (1.62

Public services

     144,190       136,068        5.97       426,07        427,07        (0.23
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Subtotal

     4,892,843       5,012,483        (2.39     461,17        463,03        (0.40

Supply not yet invoiced, net

     (10,305     13,261        —         —          —          —    
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 
     4,882,538       5,025,744        (2.85     459,81        463,88        (0.88

Wholesale supply to other concession holders (*)

     401,091       677,340        (40.78     117,02        225,28        (48.05

Wholesale supply not yet invoiced, net

     531,992       84,484        529.70       —          —          —    
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total

     5,815,621       5,787,568        0.48       414,04        418,16        (0.98
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

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

Revenue from Use of Distribution Systems (the TUSD charge)

This is revenue from charging Free Consumers the Tariff for Use of the Distribution System (Tarifa de Uso do Sistema de Distribuição, or TUSD), for transport of electricity sold. In 3Q17 it totaled R$ 330,147, compared to R$ 511,552 in 3Q16 – a year-on-year reduction of 35.46%.

 

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CVA and Other financial components in tariff adjustment

In its interim accounting information Cemig recognizes the difference between actual non-controllable costs (in which the CDE, and electricity bought for resale, are significant components) and the costs that were used as the basis of decision of the rates charged to consumers. This balance is the amount that will be passed through to the Company, or reimbursed to the consumer through Cemig D’s next subsequent tariff adjustments.    In 3Q17 amounts totaling R$ 480,112 to be passed through to the Company in the next tariff adjustment were recognized, compared to a negative balance (i.e. to be reimbursed) of R$ 273,498 arising in 3Q16.

This variation is mainly due to the higher costs of electricity in 3Q17, producing a larger difference between the amounts spent and the costs recognized in the tariff. The variations found are the subject of monetary updating based on the Selic rate and compensated in the subsequent tariff adjustments.

 

Financial components R$’000

   Sep. 30, 3017     Dec. 31, 2016  
   Ratified by
Aneel at
last tariff
adjustment
    To be
ratified by
Aneel in
    Total     Ratified by
Aneel at
last tariff
adjustment
    To be
ratified by
Aneel in
coming
tariff
adjustments
    Total  

Items of ‘Portion A’

            

Quota payable to CDE

     (245,409     (87,471     (332,880     202,801       (244,840     (42,039

Tariff for Use of National Grid

     13,963       (10,784     3,179       1,923       8,103       10,026  

Tariff for transmission from Itaipu

     3,560       (3,070     490       5,254       3,926       9,180  

Proinfa – Incentive Program for Alternative Sources

     (8,178     —         (8,178     13,080       4,247       17,327  

System Service Charge (ESS)

     (64,501     (438,468     (502,969     (54,989     (189,063     (244,052

Power bought for resale (1)

     (138,684     671,226       532,542       422,852       (78,922     343,930  

‘Other Financial Components’

            

Overcontracting of supply

     13,372       (49,569     (36,197     (104,671     (55,834     (160,505

Neutrality of Portion A

     (48,929     70,089       21,160       78,254       (76,367     1,887  

Other financial items

     (178,920     —         (178,920     (166,779     (162,614     (329,393

‘Flag’ Tariff funds (2)

       (80,986     (80,986     —         (13,611     (13,611

Excess demand and

Reactive power (3)

     —         (21,202     (21,202     —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL

     (653,726     49,765       (603,961     397,725       (804,975     (407,250
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Due to unfavorable hydrological conditions since July 2017, there has been less hydroelectric generation and as a result more dispatching of thermal plants, increasing the spot price (PLD), and affecting the level of reduction of the physical power offtake guarantee of the hydroelectric plants. For the distributors, this results in higher costs of CCEAR contracts, with thermal plants, and higher hydrological risk costs for the Itaipu plant, for those that trade power supply under Physical Guarantee Quotas, and for those that sold CCEARs and renegotiated the Hydrological Risk. In view of these factors, the difference from the cost taken into account in setting the tariff if greater, resulting in an increase in the deferred asset related to purchase of power supply on September 30, 2017.
(2) Billing arising from the Flag Tariff System not yet homologated by Aneel.
(3) In accordance with the rules of Proret 2.1A, from this point onward amounts of excess of demand and excess of reactive power were appropriated to sector financial liabilities, and will be amortized only at the time of homologation of the 5th periodic tariff review cycle.

 

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Transmission indemnity revenue

Transmission indemnity revenue in 3Q17 was R$ 25,894, compared to R$ 99,742 in 3Q16.

In 2Q16, as a result of the Mining and Energy Ministry setting the criteria for updating of the transmission indemnity, a posting was made, backdated to 2013, of the amount of the updating of the indemnity receivable based on the regulatory cost of own capital, and this had a significant impact on the revenue reported.

On April 10, 2017, an interim court remedy was granted to the Brazilian Large-scale Free Consumers Association (Associação Brasileira de Grandes Consumidores Livres), the Brazilian Auto Glass Industry Technical Association (Associação Técnica Brasileira das Indústrias Automáticas de Vidro) and the Brazilian Ferro-alloys and Silicon Metal Producers’ Association (Associação Brasileira dos Produtores de Ferroligas e de Silicio Metálico) in their legal action against Aneel and the federal government requesting suspension of the effects on their tariffs of payment of the indemnity for transmission assets payable to agents of the electricity sector who accepted the terms of Law 12783/2013.

The preventive remedy was partial, with effects related to suspension of the inclusion in the consumer tariffs paid by these associations of the portion of the indemnity corresponding to the remuneration on capital included since the date of extension of the concessions.

Cemig GT has the expectation of realization in full of the credits receivable in relation to the transmission indemnity, and has calculated the following amounts as indemnity:

 

     R$ ’000  

Regulatory Remuneration Base (BRR) – Dispatch 2181/2016

     1,177,488  

Amount of the indemnity received so far

     (285,438
  

 

 

 

Net value of the assets for purposes of indemnity

     892,050  
  

 

 

 

Updating in accordance with MME Order 120/16

– IPCA index / Cost of capital – Period Jan. 2013 to June 2017.

     1,033,780  

Adjustment of the BRR of Transmission Assets – Aneel Technical Note 183/2017

     149,255  

Monetary updating

     25,894  

Amounts received

     (125,204
  

 

 

 

Total at September 30, 2017

     1,975,775  
  

 

 

 

 

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Normative Resolution 762, of February 21, 2017, set the procedures and criteria to be used in the calculation of the cost of capital to be added to the Permitted Annual Revenue of each transmission concession holder covered by Law 12783/2013, in harmony with Mining and Energy Ministry Order 120/2016. Under this legislation, the Company began to receive this indemnity as from July, 2017.

Generation Indemnity Revenue

In 3Q17 the Company recognized revenue of R$ 259,516 for the adjustment to the balance not yet amortized of the concessions for the São Simão and Miranda Hydroelectric Plants, as per Ministerial Order 291/17.

On August 3, 2017, the Mining and Energy Ministry published Ministerial Order 291, setting the amounts of indemnity for the São Simão and Miranda Plants.

The Order specifies that the payment shall be made by December 31, 2018, after receipt of the payment of the Concession Grant Fee, for acquisition of the concession, resulting from the competitive tender that was held for the concessions of the plants. The amount of the indemnity will be updated by the IPCA (Amplified Consumer Price) index, up to the date of the signature of the Concession Contract by the party that won the tender for the concession of the Plants, and also by the Selic Reference Rate for Federal securities, as from the date of signature of the Concession Contract up to the date of actual payment of the indemnity.

Cemig GT is holding talks with the Mining and Energy Ministry on the criteria used for the decision on the amounts stated in Ministerial Order 291/17, and also the fact that this Order did not take into consideration the un-amortized balance of the Jaguara Plant in the amount of R$ 169,822, and the balances of investments carried out to the São Simão and Miranda Plants after their coming into operation, in the amounts (before monetary updating) of R$ 3,243 and R$ 22,546, respectively.

The amounts of the Basic Plan of the plants were transferred to the account Indemnity receivable, and subjected to monetary updating, as follows:

 

Plant

   Concession
termination
date
     Net balance of
assets based
on Historic
Cost at
September 30,
2017
     Net value of
assets based
on Deemed
Cost at
September 30,
2017
     Net value of the
assets of the
Basic Plan based
on Deemed Cost
at September 30,
2017
     Adjustment (1)      Amounts in
MME
Order
     Monetary
updating
     Net
balance of
the assets
of the Basic
Plan at
Sep. 30,
2017
 

Miranda

     Dec. 2016        750,836        629,368        606,822        177,330        784,152        13,978        798,130  

São Simão

     Jan. 2015        61,951        206,124        202,744        40,855        243,599        27,353        270,952  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
        812,787        835,492        809,566        218,185        1,027,751        41,331        1,069,082  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Revenue from transactions in the Wholesale Trading Market (CCEE)

Revenue from transactions in electricity on the CCEE in 3Q17 was R$ 111,330, compared to R$ 87,198 in 3Q16 – or 27.67% higher YoY. This basically reflects the average spot price (‘PLD’) being 278.14% higher – at R$ 436.19/MWh in 3Q17, compared to R$ 115.35/MWh in the same period of 2016.

Revenue from supply of gas

The Company reported revenue from supply of gas 42.65% higher year-on-year in 3Q17, at R$ 484,491, compared to R$ 339,634 in 3Q16, mainly due to the higher volume of gas sold: 375,870m³ in 3Q17, compared to 238,440m³ in 3Q16.

 

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Market (R$ ’000 m3/day)

   2013      2014      2015      2016      Up to
September
2017
 

Residential

     0.17        0.72        1.04        3.38        10.35  

Commercial

     20.38        23.15        22.42        24.68        32.26  

Industrial

     2,734.95        2,849.24        2,422.78        2,173.76        2,523.73  

Other

     106.33        99.64        119.87        120.19        124.77  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total market excluding thermal plants

     2,861.83        2,972.75        2,566.11        2,322.01        2,691.11  

Thermal

     1,214.50        1,223.99        1,309.13        591.52        925.90  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     4,076.33        4,196.74        3,875.24        2,913.53        3,617.00  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

There was a recovery of activity in the industrial user category, the largest in Gasmig’s market, with higher consumption by companies in the metallurgy sector.

Supply of gas to the residential market, which began in 2013, totaled 26,836 households invoiced in September 2017 – compared to 14,935 at the end of September 2016.

Sector/Regulatory charges reported as Deductions from revenue

The total of these taxes and charges reported as deductions from revenue in 3Q17 was R$ 3,181,073 – an increase of 26.74% in relation to their total of R$ 2,509,870 in 3Q16.

The Company adhered to the Minas Gerais State Tax Credits Regularization Plan (Plano de Regularização de Créditos Tributários – PRCT), for settlement of certain items of ICMS (state value added tax). The effect reported in 3Q17 was an expense on ICMS of R$ 587,629 (Cemig D and Cemig GT R$ 557,673 and R$ 29,951 respectively).

The commitment by Cemig D results in a reduction of 90% in interest charged and penalty fines imposed in relation to payment of the tax. This amount is for the base-date September 2017, and will be updated by application of 50% of the Selic rate until the date of payment, which is to be made in six monthly installments. The first of these, of R$ 93 million, was paid on October 31, 2017. This adhesion to the PRCT is related to specific amounts charged by the State for ICMS tax: on the funding the Company receives from the CDE (Energy Development Account) and at an additional rate of ICMS charged on condominiums in the ‘residential’ consumer class.

The commitment by Cemig GT, for an amount of R$ 30 million, which was paid in full on October 31, 2017, resulted in a reduction of 95% in interest and penalty fines charged on termination of deferral in the transfers of electric power from consortia to consortium members.

 

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Consumer charges – the ‘Flag’ Tariff system

There was an increase in the Consumer Charges related to the ‘Flag’ tariff system: The figure for 3Q17 was an amount charged to the consumer of R$ 101,625, compared to a reversal in 3Q16, of R$ 429. This variation is due to the change in the tariff ‘Flag’ – it was ‘yellow’ in July, and ‘red’ in August, 2017, which compares to ‘green’ in 3Q16 – indicating implies a larger incoming amount in 3Q17.

 

The ‘Flag’ Tariff component – history

Jul. 2017

   Aug. 2017    Sep. 2017

Yellow

   Red    Yellow

Jul. 2016

   Aug. 2016    Sep. 2016

Green

   Green    Green

Operational costs and expenses

Operational costs and expenses totaled R$ 5,160,438 in 3Q17, or 31.06% more than in 3Q16 (R$ 3,937,376).

 

LOGO

The following paragraphs comment on the main variations:

 

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Electricity purchased for resale

The expense on electricity bought for resale in 3Q17 was R$ 2,942,974, or 35.60% more than in 3Q16 (R$ 2,170,348). The main factors in the higher figure are:

Cemig D:

The expense on electricity bought for resale in 3Q17 was R$ 1,662,921, or 22.09% more than in 3Q16 (R$ 1,362,092).

This mainly reflects higher expenses on purchase of supply in the spot market, totaling R$ 336,398 in 3Q17, compared to R$ 191,655 in 3Q16, in turn reflecting the higher cost of supply in the wholesale market in 2017 as a result of the low level of the reservoirs, and lower output of supply by the hydroelectric plants. The result was a higher volume of operation of the thermal plants, for which the increase in expenditure was financed principally by the electricity distributors, which is a feature of the present regulatory model in Brazil.

Also, expense on purchase of electricity at auctions was higher: at R$ 835,259 in 3Q17, compared to R$ 672,294 in 3Q16 – reflecting new power purchase agreements made in the regulated market in 2017.

Cemig GT:

The expense on electricity bought for resale in 3Q17 was R$ 1,275,814, or 54.91% more than in 3Q16 (R$ 823,584). This reflects an average price per MWh 15.84% higher in 3Q17 (R$ 186.60 in 2017, vs. R$ 161.39 in 2016), and also a volume of electricity purchased in 3Q17 (at 6,823,933 MWh) 33.72% higher than in 3Q16 (5,103,045 MWh).

 

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Operating provisions

Operational provisions were R$ 188,875 in 3Q17, compared to a reversal of provisions totaling R$ 19,375 in 3Q16. The main factors are:

 

  Reversal of provision on the investment options related to RME and LEPSA, in the total amount of R$ 166,767, in 3Q16, which compares with provisions of R$ 85,306 made in 3Q17.

 

  Lower provisions for doubtful receivables: R$ 50,458 in 3Q17, compared to R$ 108,349 in 3Q16 – mainly reflecting lower default.

 

Consolidated

   Balance at
09/30/2017
    Balance at
09/30/2016
 

Put option of RME and LEPSA—Light

     1,242,818       1,149,881  

Put option SAAG

     264,138       196,173  

Put option – Ativas e Sonda

     (4,483     (4,586
  

 

 

   

 

 

 
     1,502,473       1,341,468  
  

 

 

   

 

 

 

Default

With the effects of the Brazilian macroeconomic context of reduction in economic activity, bringing unemployment and inflation, the adverse hydrological situation, and the increase in tariffs, which had been held down, Cemig has experienced higher than average growth in the total debt owed by clients.

To combat a record level of default, in 2017 Cemig has redoubled its efforts to receive payment from customers in arrears with their electricity bills. An additional budget has been approved and is being used this year in the attempt to recover the previous losses of revenue. Some results have already been achieved. Since December 2016 there has been no significant increase in the default percentages, showing that this situation is being brought under control. We expect to see a more consistent decline in the percentages from now on.

The average level of default increased by 3.36% from September 2016 to September 2017; but the percentage has fallen by 1.60% since September 2017.

 

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The Company uses various tools of communication and collection to prevent increase in default. Measures used include contact by telephone, email, collection requests by text and by letter, negative references for defaulting clients, collection through the courts and, principally, disconnection of supply. Aneel Resolution 414 allows supply to be cut off after 15 days from receipt of a notice to the defaulting consumer.

As well as these various collection tools, in 2017 Cemig launched a campaign offering special conditions for negotiation and re-negotiation for low-voltage consumers, hospitals and public authorities.

The Company is confident that with more intense collection and disconnection the levels of default will be reduced in 2017.

 

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Personnel

The expense on personnel in 3Q17 was R$ 358,505, or 4.14% lower than in 3Q16 (R$ 373,986).

 

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Gas bought for resale

In 3Q17 the Company recorded an expense of R$ 304,698 on acquisition of gas, 55.07% higher than its comparable expense of R$ 196,494 in 3Q16. This basically reflects the higher volume of gas acquired (385,487m³ in 3Q17 compared to 234,926m³ in 3Q16).

 

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Equity method gains in non-consolidated investees

In 3Q17 Cemig posted a net equity method loss of R$ 80,798, which compares with a net gain of R$ 33,218 in 3Q16. This principally arises from: the losses by the equity method on Renova and the Santo Antônio and Belo Monte plants.

 

Consolidated – R$ ’000

   Gain
(loss)

by equity
method

3Q17
     Gain
(loss)

by equity
method

3Q16
 

Companhia Transleste de Transmissão

     1,444        1,370  

Companhia Transudeste de Transmissão

     1,051        1,033  

Companhia Transirapé de Transmissão

     1,256        1,385  

Transchile

     —          384  

Companhia de Transmissão Centroeste de Minas

     1,296        1,289  

Light

     34,417        (21,326)  

Axxiom Soluções Tecnológicas

     (2,093)        (1,629)  

Lepsa

     4,742        —    

RME

     4,719        —    

Hidrelétrica Cachoeirão

     2,554        2,604  

Guanhães Energia

     44        (2,478)  

Hidrelétrica Pipoca

     512        1,330  

Madeira Energia (Santo Antônio Plant)

     (35,920)        (19,577)  

FIP Melbourne (Santo Antônio Plant)

     (30,692)        (17,406)  

Lightger

     (1,250)        447  

Baguari Energia

     1,358        8,922  

Central Eólica Praias de Parajuru

     (168)        556  

Central Eólica Volta do Rio

     (1,385)        (316)  

Central Eólica Praias de Morgado

     (1,161)        (595)  

Amazônia Energia (Belo Monte Plant)

     (13,159)        (295)  

Ativas Data Center

     (459)        (10,140)  

Parati

     —          (6,171)  

Taesa

     45,006        90,873  

Renova

     (86,601)        (26,179)  

Itaocara

     (581)        —    

Aliança Geração

     934        21,371  

Aliança Norte (Belo Monte Plant)

     (8,680)        6,115  

Retiro Baixo

     2,018        1,651  
  

 

 

    

 

 

 

Total

     (80,798)        33,218  
  

 

 

    

 

 

 

 

69


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Financial revenue and expenses

Cemig reported net financial revenues in 3Q17 of R$ 12,414, which compares with net financial expenses of R$ 422,912 in 3Q16. The main factors are:

 

  A negative balance of R$ 12,006 in monetary updating of the CVA balances in 3Q17, compared to a gain of R$ 19,403 in 3Q16. The positive and negative balances of CVA are updated by the Selic rate. This difference arises from a net payable amount of CVA on September 30, 2017. In 3Q16 the corresponding amount was a credit.

 

  Income from cash investments was R$ 38,718 lower, due mainly to a lower volume of cash invested.

 

  The financial expense on monetary updating of loans and financings was R$ 41,277 lower, due to the lower total effect of the IPCA inflation index (indexor for the debt) in the quarter – 0.59% in 3Q17, compared to 1.04% in 3Q16.

 

  Costs of loans and financing was 34.39% lower, at R$ 344,297 in 3Q17, compared to R$ 524,775 in 3Q16, due to the lower CDI rate (principal indexor of the debt) over the period – of 2.29% in 3Q17, compared to 3.47% in 3Q16.

 

  Reversal of the monetary updating item of R$ 239,445 applied by the Minas Gerais state government for its Advance against future capital increase (AFAC). On October 25, 2017, Cemig and the Financial Department of Minas Gerais State signed a Debt Recognition Undertaking, under which the State undertook to return to the company the total amount deposited, with monetary updating by the IGP-M inflation index. As a result of the new situation the probability of loss was re-assessed to ‘remote’, due to there no longer being any expectation of future disbursement of cash to settle this obligation, which had until then been provisioned. The Debt Recognition Undertaking signed between the parties specifies that the State will return the amount of R$ 277,723, of which R$ 239,445 refers to the original amount of the deposit, and R$ 38,278 relates to its monetary updating to September 30, 2017. This amount will be returned to the Company by the State in 12 consecutive monthly installments, each updated by the IGP–M index up to the date of actual payment, the first such payment to become due on November 10, 2017. Additionally, Clause 3 of the Undertaking states that, in the event of arrears or default by the State in payment of the agreed consecutive monthly installments, Cemig is authorized to retain dividends or Interest on Equity distributable to the State in proportion to the State’s equity interest, for as long as the arrears and/or default continues.

 

70


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EBITDA

Cemig’s consolidated Ebitda in 3Q17 was 91.58% below its Ebitda of 3Q16:

 

EBITDA – R$ ’000

   3Q17     3Q16      Change,%  

Net profit (loss) for the period

     (83,666     433,502        —    

+ Income tax and Social Contribution tax

     (9,334     135,034        —    

+ Net financial revenue (expenses)

     (12,414     422,912        (37.69

+ Depreciation and amortization

     205,983       202,480        1.73  
  

 

 

   

 

 

    

 

 

 

= EBITDA

     100,569       1,193,928        (91.58
  

 

 

   

 

 

    

 

 

 

 

LOGO

 

71


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DEBT

 

LOGO

The Company’s consolidated total debt on September 31, 2017 was R$ 14,055,575, or 7.40% less than at December 31, 2016.

 

LOGO

 

72


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RESULTS SEPARATED BY BUSINESS SEGMENT

 

INFORMAÇÕES POR SEGMENTO EM 30 DE SETEMBRO DE 2017

 

DESCRIÇÃO

   ENERGIA ELÉTRICA                                
   GERAÇÃO     TRANSMISSÃO     DISTRIBUIÇÃO     TELECOMUNICAÇÕES     GÁS     OUTRAS     ELIMINAÇÕES     TOTAL  

ATIVOS DO SEGMENTO

     13.868.749       4.147.643       18.430.584       334.918       2.049.736       3.369.322       (368.877     41.832.075  

INVESTIMENTOS EM COLIGADAS E CONTROLADAS EM CONJUNTO

     4.565.559       1.671.072       1.748.994       —         —         634.501       —         8.620.126  

ADIÇÕES AO SEGMENTO

     249.826       —         705.295       34.738       40.097       —         —         1.029.956  

ADIÇÕES AO ATIVO FINANCEIRO

     —         160.481       —         —         —         —         —         160.481  

RECEITA LÍQUIDA

     5.307.670       547.179       8.281.712       88.389       1.061.564       83.160       (215.893     15.153.781  

CUSTOS COM ENERGIA ELÉTRICA E GÁS

                

Energia Elétrica Comprada para Revenda

     (3.021.466     —         (4.717.386     —         —         (9     53.469       (7.685.392

Encargos de Uso da Rede Básica de Transmissão

     (261.295     (262     (661.101     —         —         —         131.319       (791.339

Gás Comprado para Revenda

     —         —         —         —         (789.861     —         —         (789.861
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total dos Custos Operacionais

     (3.282.761     (262     (5.378.487     —         (789.861     (9     184.788       (9.266.592

CUSTOS E DESPESAS OPERACIONAIS

                

Pessoal

     (218.933     (84.022     (877.192     (14.559     (36.286     (44.675     —         (1.275.667

Participação dos Empregados e Administradores no Resultado

     (4.182     (1.871     (18.131     (380     —         (1.213     —         (25.777

Obrigações Pós-Emprego

     (42.539     (19.850     (201.745     —         —         (29.483     —         (293.617

Materiais

     (7.468     (2.110     (32.089     (107     (1.434     (111     13       (43.306

Serviços de Terceiros

     (97.890     (21.278     (550.614     (20.624     (12.231     (7.278     29.346       (680.569

Depreciação e Amortização

     (136.400     —         (400.754     (25.974     (41.836     (11.819     —         (616.783

Provisões (Reversões) Operacionais

     (97.543     (9.148     (347.608     (456     —         (104.038     —         (558.793

Custos de Construção

     —         (11.226     (705.296     —         (20.232     —         —         (736.754

Outras Despesas Operacionais Líquidas

     (35.322     (6.550     (240.404     (18.501     (7.506     (5.044     1.746       (311.581
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total do Custo de Operação

     (640.277     (156.055     (3.373.833     (80.601     (119.525     (203.661     31.105       (4.542.847

CUSTOS E DESPESAS OPERACIONAIS

     (3.923.038     (156.317     (8.752.320     (80.601     (909.386     (203.670     215.893       (13.809.439

RESULTADO OPERACIONAL ANTES DO RESL. DE EQUIV. PATRIM. E FINANCEIRO

     1.384.632       390.862       (470.608     7.788       152.178       (120.510     —         1.344.342  

Resultado de Equivalência Patrimonial

     151.126       —         —         (1.951     —         (169.855     —         (20.680

Receitas Financeiras

     126.202       5.013       302.727       2.149       24.240       89.734       —         550.065  

Despesas Financeiras

     (847.998     (1.886     (616.487     (11.450     (30.594     236.464       —         (1.271.951

RESULTADO ANTES DOS IMPOSTOS

     813.962       393.989       (784.368     (3.464     145.824       35.833       —         601.776  

Imposto de Renda e Contribuição Social

     (215.688     (120.333     245.677       307       (45.316     (69.241     —         (204.594
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

RESULTADO

     598.274       273.656       (538.691     (3.157     100.508       (33.408     —         397.182  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Participação dos acionistas controladores

     598.274       273.656       (538.691     (3.157     100.076       (33.408     —         396.750  

Participação de acionista não controlador

     —         —         —         —         432       —         —         432  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     598.274       273.656       (538.691     (3.157     100.508       (33.408     —         397.182  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

73


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Appendices

Generation plants – September 30, 2017

 

Plant

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

Emborcação

   CEMIG GT    Hydroelectric      100,00%        1.192,00        497,00        1.192,00        497,00        7/23/2025  

Nova Ponte

   CEMIG GT    Hydroelectric      100,00%        510,00        276,00        510,00        276,00        7/23/2025  

Irapé

   CEMIG GT    Hydroelectric      100,00%        399,00        210,70        399,00        210,70        2/28/2035  

Queimado

   CEMIG GT    Hydroelectric      82,50%        105,00        58,00        86,63        47,85        1/2/2033  

Volta do Rio

   CEMIG GT    Wind Farm      49,00%        42,00        18,41        20,58        9,02        12/26/2031  

Praias de Parajuru

   CEMIG GT    Wind Farm      49,00%        28,80        8,39        14,11        4,11        9/24/2032  

Praia do Morgado

   CEMIG GT    Wind Farm      49,00%        28,80        13,20        14,11        6,47        12/26/2031  

Paracambi (Cemig)

   CEMIG GT    SHP      49,00%        25,00        19,53        12,25        9,57        2/19/2031  

Rio de Pedras

   CEMIG GT    SHP      100,00%        9,28        2,15        9,28        2,15        9/19/2024  

Poço Fundo

   CEMIG GT    SHP      100,00%        9,16        5,79        9,16        5,79        8/19/2025  

São Bernardo

   CEMIG GT    SHP      100,00%        6,82        3,42        6,82        3,42        8/19/2025  

Paraúna

   CEMIG GT    SHP      100,00%        4,28        1,90        4,28        1,90        —    

Salto Morais

   CEMIG GT    SHP      100,00%        2,39        0,60        2,39        0,60        7/1/2020  

Sumidouro

   CEMIG GT    SHP      100,00%        2,12        0,53        2,12        0,53        7/8/2015  

Anil

   CEMIG GT    SHP      100,00%        2,08        1,10        2,08        1,10        7/8/2015  

Xicão

   CEMIG GT    SHP      100,00%        1,81        0,61        1,81        0,61        8/19/2025  

Luiz Dias

   CEMIG GT    SHP      100,00%        1,62        0,61        1,62        0,61        8/19/2025  

Central Mineirão

   CEMIG GT    SHP      100,00%        1,42        —          1,42        —          —    

Santa Marta

   CEMIG GT    SHP      100,00%        1,00        0,58        1,00        0,58        7/8/2015  

Pissarrão

   CEMIG GT    SHP      100,00%        0,80        0,55        0,80        0,55        11/19/2004  

Jacutinga

   CEMIG GT    SHP      100,00%        0,72        0,57        0,72        0,57        —    

Santa Luzia

   CEMIG GT    SHP      100,00%        0,70        0,23        0,70        0,23        2/25/2026  

Lages *

   CEMIG GT    SHP      100,00%        0,68        0,54        0,68        0,54        6/24/2010  

Bom Jesus do Galho

   CEMIG GT    SHP      100,00%        0,36        0,13        0,36        0,13        —    

Pandeiros

   CEMIG GT    SHP      100,00%        4,20        0,47        4,20        0,47        9/22/2021  

Poquim

   CEMIG GT    SHP      100,00%        1,41        0,58        1,41        0,58        7/8/2015  

Igarapé

   CEMIG GT    Thermal      100,00%        131,00        71,30        131,00        71,30        8/13/2024  

Três Marias

   CEMIG G. TRÊS MARIAS    Hydroelectric      100,00%        396,00        239,00        396,00        239,00        1/4/2046  

Salto Grande

   CEMIG G. SALTO GRANDE    Hydroelectric      100,00%        102,00        75,00        102,00        75,00        1/4/2046  

Camargos

   CEMIG G. CAMARGOS    Hydroelectric      100,00%        46,00        21,00        46,00        21,00        1/4/2046  

Itutinga

   CEMIG G. ITUTINGA    Hydroelectric      100,00%        52,00        28,00        52,00        28,00        1/4/2046  

Peti

   CEMIG G. LESTE    SHP      100,00%        9,40        6,18        9,40        6,18        1/4/2046  

Tronqueiras

   CEMIG G. LESTE    SHP      100,00%        8,50        3,39        8,50        3,39        1/4/2046  

Ervália

   CEMIG G. LESTE    SHP      100,00%        6,97        4,66        6,97        4,66        1/4/2046  

Neblina

   CEMIG G. LESTE    SHP      100,00%        6,47        0,35        6,47        0,35        1/4/2046  

Dona Rita

   CEMIG G. LESTE    SHP      100,00%        2,40        1,03        2,40        1,03        1/4/2046  

Sinceridade

   CEMIG G. LESTE    SHP      100,00%        1,42        3,59        1,42        3,59        1/4/2046  

Gafanhoto

   CEMIG G. OESTE    SHP      100,00%        14,00        6,68        14,00        6,68        1/4/2046  

Martins

   CEMIG G. OESTE    SHP      100,00%        7,70        1,84        7,70        1,84        1/4/2046  

Cajuru

   CEMIG G. OESTE    SHP      100,00%        7,20        2,69        7,20        2,69        1/4/2046  

Piau

   CEMIG G. SUL    SHP      100,00%        18,01        13,53        18,01        13,53        1/4/2046  

Joasal

   CEMIG G. SUL    SHP      100,00%        8,40        5,20        8,40        5,20        1/4/2046  

Cel. Domiciano

   CEMIG G. SUL    SHP      100,00%        5,04        3,03        5,04        3,03        1/4/2046  

Paciência

   CEMIG G. SUL    SHP      100,00%        4,08        2,36        4,08        2,36        1/4/2046  

Marmelos

   CEMIG G. SUL    SHP      100,00%        4,00        2,74        4,00        2,74        1/4/2046  

Rosal

   Rosal Energia S.A    Hydroelectric      100,00%        55,00        30,00        55,00        30,00        5/8/2032  

Sá Carvalho

   Sá Carvalho S.A    Hydroelectric      100,00%        78,00        58,00        78,00        58,00        12/1/2024  

Salto Voltão

   Horizontes Energia S.A    SHP      100,00%        8,20        7,36        8,20        7,36        10/4/2030  

Salto do Passo Velho

   Horizontes Energia S.A    SHP      100,00%        1,80        1,64        1,80        1,64        10/4/2030  

Machado Mineiro

   Horizontes Energia S.A    SHP      100,00%        1,72        1,14        1,72        1,14        7/8/2025  

Salto do Paraopeba

   Horizontes Energia S.A    SHP      100,00%        2,46        —          2,46        —          10/4/2030  

Aimorés

   ALIANÇA    Hydroelectric      45,00%        330,00        172,00        148,50        77,40        12/20/2035  

Amador Aguiar I (Capim Branco I)

   ALIANÇA    Hydroelectric      39,32%        240,00        155,00        94,36        60,94        8/29/2036  

Amador Aguiar II (Capim Branco II)

   ALIANÇA    Hydroelectric      39,32%        210,00        131,00        82,56        51,50        8/29/2036  

Igarapava

   ALIANÇA    Hydroelectric      23,69%        210,00        136,00        49,75        32,22        12/30/2028  

Funil

   ALIANÇA    Hydroelectric      45,00%        180,00        89,00        81,00        40,05        12/20/2035  

Porto Estrela

   ALIANÇA    Hydroelectric      30,00%        112,00        55,80        33,60        16,74        7/10/2032  

Candonga

   ALIANÇA    Hydroelectric      22,50%        —          —          —          —          5/25/2035  

Baguari

   BAGUARI ENERGIA    Hydroelectric      34,00%        140,00        80,20        47,60        27,27        8/15/2041  

Pai Joaquim

   CEMIG PCH S.A    SHP      100,00%        23,00        13,91        23,00        13,91        4/1/2032  
   Light Energia    SHP      43,38%        855,14        637,00        370,92        276,30        1/0/1900  

Paracambi (Light)

   Lightger    SHP      22,12%        25,00        19,53        5,53        4,32        2/16/2031  

Cachoeirão

   Hidrelétrica Cachoeirão    SHP      49,00%        27,00        16,37        13,23        8,02        7/25/2030  

Pipoca

   Hidrelétrica Pipoca    SHP      49,00%        20,00        11,90        9,80        5,83        9/10/2031  
   Renova Energia    Wind Farm      40,95%        386,10        196,10        158,11        80,31        1/0/1900  
   Renova Energia    SHP      40,95%        41,80        24,40        17,12        9,99        1/0/1900  
   Brasil PCH    SHP      20,89%        291,00        192,68        60,78        40,24        1/0/1900  

Belo Monte

   Norte    Hydroelectric      12,77%        3.899,77        3.711,80        497,97        473,97        26/08/2045  

Santo Antônio

   SAE    Hydroelectric      18,13%        3.568,30        2.424,00        646,90        439,45        6/12/2046  

Retiro Baixo

   Retiro Baixo Energética S.A.    Hydroelectric      49,90%        82,00        38,50        40,92        19,21        8/25/2041  

Total

              14.000,33        9.816,49        5.658,96        3.348,46     
           

 

 

    

 

 

    

 

 

    

 

 

    

São Simão

   CEMIG GT    Hydroelectric      100,00%        1.710,00        1.281,00        1.710,00        1.281,00        Temporarily  

Jaguara

   CEMIG GT    Hydroelectric      100,00%        424,00        336,00        424,00        336,00        Temporarily  

Miranda

   CEMIG GT    Hydroelectric      100,00%        408,00        202,00        408,00        202,00        Temporarily  

Volta Grande

   CEMIG GT    Hydroelectric      100,00%        380,00        229,00        380,00        229,00        Temporarily  

 

74


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RAP (Permitted Annual Revenue - Transmission ) - 2017/2018 cycle

 

Annual Permitted Revenue (RAP)

   RAP      % Cemig      Cemig
Consolidado
     Cemig GT  

Cemig GT

     687.018.817        100,00%        687.018.817        709.016.589  

Cemig Itajuba

     21.997.772        100,00%        21.997.772     

Transleste

     40.803.987        25,00%        5.950.581     

Transudeste

     25.290.697        24,00%        3.540.698     

Transirapé

     33.123.484        24,50%        4.733.898     

Centroeste

     17.399.265        51,00%        8.873.625     

Taesa

        32,00%        816.937.362     

Transleste

     40.803.987        5,00%        2.040.199     

Transudeste

     25.290.697        5,00%        1.264.535     

Transirapé

     33.123.484        5,00%        1.656.174     

ETEO

     88.077.706        100,00%        28.184.866     

ETAU

     24.216.647        52,58%        4.074.891     

NOVATRANS

     517.164.423        100,00%        165.492.616     

TSN

     427.855.624        100,00%        136.913.800     

GTESA

     9.361.375        100,00%        2.995.640     

PATESA

     25.008.641        100,00%        8.002.765     

Munirah

     36.484.440        100,00%        11.675.021     

Brasnorte

     10.062.251        38,66%        1.244.966     

São Gotardo

     5.203.930        100,00%        1.665.258     

Abengoa

           

NTE

     153.424.301        100,00%        49.095.776     

STE

     81.598.032        100,00%        26.111.370     

ATEI

     149.036.948        100,00%        47.691.823     

ATEII

     230.277.807        100,00%        73.688.898     

ATEIII

     116.301.579        100,00%        37.216.505     

TBE

           

EATE

     177.139.821        49,98%        88.538.694     

STC

     17.592.992        39,99%        7.034.930     

Lumitrans

     10.651.737        39,99%        4.259.193     

ENTE

     112.564.897        49,99%        56.270.002     

ERTE

     25.266.463        49,99%        12.629.871     

ETEP

     28.183.293        49,98%        14.087.265     

ECTE

     9.074.626        19,09%        1.732.599     

EBTE

     34.269.232        74,49%        25.527.494     

ESDE

     6.548.398        49,98%        3.273.180     

ETSE

     3.722.327        19,09%        710.696     

Light

     8.941.679        43,15%        3.858.335     
        

 

 

    

 

 

 

RAP TOTAL CEMIG

           1.507.814.513        709.016.589  
        

 

 

    

 

 

 

 

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Cemig D Tables (R$ million)

 

CEMIG D Market

 
     (GWh)      GW  

Quarter

   Captive Consumers      TUSD ENERGY1      T.E.D2      TUSD PICK3  

1Q16

     6.408        4.053        10.460        29  

2Q16

     6.711        4.497        11.208        29  

3Q16

     6.365        4.424        10.788        29  

4Q16

     6.402        4.409        10.811        30  

1Q17

     6.249        4.274        10.523        30  

2Q17

     6.314        4.287        10.601        31  

3Q17

     6.232        4.586        10.817        31  

 

1. Refers to the quantity of electricity for calculation of the regulatory charges charged to free consumer clients (“Fbrtion A”)
2. Total electricity distributed
3. Sum of the demand on w hich the TUSD is invoiced, according to demand contracted (“Fbrtion B”).

 

Operating Revenues

   3Q17     3Q16     Change%     9M2017     9M2016     Change%  

Sales to end consumers

     3.885       4.032       (4     12.069       12.427       (3

TUSD

     339       521       (35     1.254       1.374       (9

CVA and Other financial components in tariff adjustment

     480       (273           148       (937      

Construction revenue

     284       321       (11     705       854       (17

Others

     300       279       8       875       858        
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

     5.288       4.880       8       15.051       14.576       3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Deductions

     (2.626     (2.068     27       (6.769     (6.575     3  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Revenues

     2.662       2.811       (5     8.282       8.001       4  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Operating Expenses

   3Q17      3Q16      Change%     9M2017      9M2016      Change%  

Personnel/Administrators/Councillors

     233        264        (12     877        852        3  

Employee Participation

            17              18        27        (33

Forluz - Post-Retirement Employee Benefits

     70        60        17       202        166        22  

Materials

     12        12        2       32        29        10  

Contracted Services

     190        160        19       551        472        17  

Purchased Energy

     1.663        1.362        22       4.717        3.858        22  

Depreciation and Amortization

     138        124        11       401        368        9  

Operating Provisions

     55        134        (59     348        371        (6

Charges for Use of Basic Transmission Network

     347        169        106       661        605        9  

Cost from Operation

     284        321        (11     705        854        (17

Other Expenses

     101        108        (6     240        285        (16
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total

     3.092        2.731        13       8.752        7.887        11  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

Statement of Results

   3Q17     3Q16     Change%     9M2017     9M2016     Change%  

Net Revenue

     2.662       2.811       (5     8.282       8.001       4  

Operating Expenses

     3.092       2.731       13       8.752       7.887       11  

EBIT

     (430     80       (637     (471     114        

EBITDA

     (293     204             (70     482        

Financial Result

     (86     (123     (30     (314     (250     (26

Provision for Income Taxes, Social Cont &

     169       8       2.022       246       23       958  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

     (347     (35     900       (539     (113     378  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

 

76


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Cemig GT tables (R$ million)

 

Operating Revenues

   3Q17     3Q16     Change%     9M2017     9M2016     Change%  

Sales to end consumers

     984       963       2       2.918       2.782       5  

Supply

     913       758       20       2.313       1.974       17  

Revenues from Trans. Network

     86       107       (19     328       299       10  

Gain on monetary updating of Concession Grant Fee

     90       63       42       240       212       13  

Construction revenue

     4       5       (12     11       36       (69

Transactions in the CCEE

     109       85       28       521       137       280  

Transmission indemnity revenue

     26       100       (74     296       692       (57

Generation indemnity revenue

     260                   260              

Others

     13       8       69       30       21       41  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

     2.484       2.089       19       6.916       6.155       12  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Deductions

     (437     (343     27       (1.200     (1.062     13  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Revenues

     2.047       1.746       17       5.716       5.093       12  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Operating Expenses

   3Q17      3Q16      Change%     9M2017      9M2016      Change%  

Personnel/Administrators/Councillors

     89        82        8       301        281        7  

Employees’ and managers’ profit shares

            6              6        6        1  

Forluz - Post-Retirement Employee Benefits

     22        20        8       62        56        12  

Materials

     3        2        37       9        9        (4

Contracted Services

     32        29        14       96        98        (2

Depreciation and Amortization

     37        47        (23     123        141        (13

Operating Reserves

     46        11        297       107        63        69  

Charges for Use of Basic Transmission Network

     91        83        11       257        230        12  

Purchased Energy

     1.276        824        55       2.991        2.292        30  

Construction Cost

     4        5        (12     11        36        (69

Other Expenses

     13        15        (13     41        47        (14
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total

     1.613        1.124        44       4.004        3.261        23  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

Statement of Results

   3Q17     3Q16     Change%     9M2017     9M2016     Change%  

Net Revenue

     2.047       1.746       17       5.716       5.093       12  

Operating Expenses

     (1.613     (1.124     44       (4.004     (3.261     23  

EBIT

     434       622       (30     1.712       1.832       (7

Equity equivalence results

     (172     (24     (622     (158     (155     2  

EBITDA

     299       646       (54     1.678       1.818       (8

Financial Result

     (196     (306     (36     (729     (875     (17

Provision for Income Taxes, Social Cont & Deferred Income Tax

     (72     (68     5       (300     (267     12  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

     (5     224       (102     525       535       (2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tables – Cemig Consolidated (R$ million)

 

Energy Sales (Consolidated)(GWh)

   3Q17      3Q16      Change%     9M2017      9M2016      Change%  

Residential

     2.457        2.389        3       7.490        7.406        1  

Industrial

     4.459        5.032        (11     13.163        14.542        (9

Commercial

     1.776        1.523        17       5.581        4.908        14  

Rural

     1.017        1.016        0       2.769        2.699        3  

Others

     901        866        4       2.653        2.603        2  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Subtotal

     10.610        10.826        (2     31.656        32.158        (2
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Own Consumption

     9        9        4       27        28        (2

Supply

     3.427        3.007        14       9.168        8.813        4  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

TOTAL

     14.046        13.841        1       40.851        40.999         
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

77


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Energy Sales

   3Q17      3Q16      Change%     9M2017      9M2016      Change%  

Residential

     1.878        1.859        1       5.797        5.819         

Industrial

     1.210        1.380        (12     3.634        4.043        (10

Commercial

     982        986              3.219        3.270        (2

Rural

     424        395        8       1.204        1.073        12  

Others

     397        394        1       1.218        1.205        1  

Electricity sold to final consumers

     4.893        5.012        (2     15.072        15.410        (2

Unbilled Supply, Net

     522        98        434       1.027        21         

Supply

     401        677        (41     1.289        1.884        (32
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

TOTAL

     5.816        5.788              17.388        17.316         
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

Operating Revenues

   3Q17     3Q16     Change%     9M2017     9M2016     Change%  

Sales to end consumers

     4.883       5.026       (3     15.027       15.305       (2

TUSD

     330       512       (35     1.231       1.348       (9

Supply

     933       762       22       2.361       2.011       17  

Transactions in the CCEE

     111       87       28       537       139       286  

CVA and Other financial components in tariff adjustment

     480       (273           148       (937      

Gain on monetary updating of Concession Grant Fee

     90       63       42       240       212       13  

Revenues from Trans. Network

     44       80       (45     221       228       (3

Construction revenue

     296       334       (11     737       918       (20

Gas supply

     484       340       43       1.306       1.037       26  

Transmission Indemnity Revenue

     26       100       (74     296       692       (57

Others

     380       375       1       1.099       1.088       1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

     8.317       7.405       12       23.462       22.041       6  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Deductions

     (3.181     (2.510     27       (8.308     (7.934     5  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Revenues

     5.136       4.896       5       15.154       14.107       7  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Operating Expenses

   3Q17      3Q16     Change%     9M2017      9M2016      Change%  

Personnel/Administrators/Councillors

     359        374       (4     1.276        1.217        5  

Employee Participation

     1        24       (96     26        30        (15

Forluz – Post-Retirement Employee Benefits

     102        89       14       294        249        18  

Materials

     16        17       (5     43        41        6  

Raw materials and inputs for production of electricity

     0        0       63       0        0        66  

Contracted Services

     234        201       16       681        602        13  

Purchased Energy

     2.943        2.170       36       7.685        6.126        25  

Depreciation and Amortization

     206        202       2       617        601        3  

Operating Provisions

     189        (19           559        714        (22

Charges for Use of Basic Transmission Network

     387        216       80       791        741        7  

Gas bought for resale

     305        196       55       790        624        27  

Cost from Operation

     296        334       (11     737        918        (20

Other Expenses

     124        132       (6     312        372        (16
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

TOTAL

     5.160        3.937       31       13.809        12.236        13  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

 

Financial Result Breakdown

   3Q17     3Q16     Change%     9M2017     9M2016     Change%  

Financial revenues

     201       231       (13     550       835       (34

Revenue from cash investments

     46       85       (46     172       220       (22

Arrears penalty payments on electricity bills

     55       70       (21     193       212       (9

Exchange rate

     3       12       (78     20       56       (64

Monetary updating

     76       36       110       114       104       10  

Monetary updating – CVA

           19       (100           207       (100

Taxes applied to Financial Revenue

     (13     (15     (13     (36     (54     (35

Other

     34       24       45       87       90       (3

Financial expenses

     (189     (654     (71     (1.272     (1.888     (33

Costs of loans and financings

     (344     (525     (34     (1.202     (1.433     (16

Exchange rate

     6       (2           (13     (19     (34

Monetary updating – loans and financings

     (6     (47     (88     (75     (232     (68

Monetary updating – paid concessions

                       1       (3      

Charges and monetary updating on Post-employment obligations

     (12     (22     (45     (48     (87     (44

Other

     168       (58           65       (114      
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Financial revenue (expenses)

     12       (423     (103     (722     (1.053     (31
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

78


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Statement of Results

   3Q17     3Q16     Change%     9M2017     9M2016     Change%  

Net Revenue

     5.136       4.896       5       15.154       14.107       7  

Operating Expenses

     5.160       3.937       31       13.809       12.236       13  

EBIT

     (25     958       (103     1.344       1.871       (28

Equity gain in subsidiaries

     (81     33             (21     47        

Depreciation and Amortization

     206       202       2       617       601       3  

EBITDA

     101       1.195       (92     1.940       2.520       (23

Financial Result

     12       (423           (722     (1.053     31  

Tax

     9       (135     (107     (205     (224     (9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

     (84     434             397       641       (38
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Cash Flow Statement

   9M2017     9M2016     Change%  

Cash at beginning of period

     995       925       8  

Cash generated by operations

     2.143       229       837  

Net profit

     397       641       (38

Current and deferred income tax and Social Contribution tax

     205       224       (9

Depreciation and amortization

     617       601       3  

Passthrough from CDE

     157       1.278       (88

Equity gain (loss) in subsidiaries

     21       (47     144  

Provisions (reversals) for operational losses

     559       714       (22

Dividends received from equity holdings

     248       445       (44

Interest paid on loans and financings

     (1.031     (1.320     (22

Financial assets of the concession

     314       (2.175     (114

Others

     657       (133     593  

Financing activities

     (1.715     641       368  

Financings obtained and capital increase

     60       2.859       (98

Interest on Equity, and dividends

     (269     (111     141  

Payments of loans and financings

     (1.506     (2.106     (28

Investment activity

     (841     (101     731  

Securities – Financial Investment

     331       1.465       731  

Acquisition of ownership interest and future capital commitments

     (228     (725     (69

Financial assets

     (160            

Fixed and Intangible assets

     (783     (842     (7
  

 

 

   

 

 

   

 

 

 

Cash at end of period

     582       1.693       (66