vivitr2q13_6k.htm - Generated by SEC Publisher for SEC Filing

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of August, 2013

 

Commission File Number: 001-14475

 

 


 


TELEFÔNICA BRASIL S.A.

(Exact name of registrant as specified in its charter)

 

TELEFONICA BRAZIL S.A.  

(Translation of registrant’s name into English)

 

Av. Eng° Luís Carlos Berrini, 1376 -  28º andar

São Paulo, S.P.

Federative Republic of Brazil

(Address of principal executive office)

 


 

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

 

Form 20-F

X

 

Form 40-F

 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

 

Yes

 

 

No

 

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):

 

Yes

 

 

No

 

 

 

 

 

 

 

 

 

TELEFÔNICA BRASIL S.A.

 

 

QUARTERLY INFORMATION

 

JUNE 30, 2013

 

 

 


 

 

 

CE-0601-13

 

REPORT OF QUARTERLY INFORMATION REVIEW

 

 

 

To the Shareholders, Board Members and Directors of

TELEFÔNICA BRASIL S.A.

São Paulo - SP

 

 

Introduction

 

 

We have reviewed the individual and consolidated interim accounting information of TELEFÔNICA BRASIL S.A. and subsidiaries, contained in the ITR (Quarterly Information Form), referring to the quarter ended on June 30, 2013, which comprises the balance sheet and related statements of income, of comprehensive income, of changes in shareholders’ equity and of cash flows for the three-month period then ended, including the notes thereto.

 

 

The management is responsible for the preparation of the individual interim accounting information according to CPC Technical Pronouncement CPC 21 – Interim Statement and interim consolidated accounting information according to CPC 21 and international standard IAS 34 – Interim Financial Reporting, issued by International Accounting Standards Board – IASB, as well as for the presentation of such information according to standards issued by CVM (SEC), applicable to the preparation of Quarterly Information - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review.

 

 

Scope of review

 

 

We conducted our review in accordance with the Brazilian and international standards of review of interim information (NBC TR 2410 - Revisão de Informações Intermediárias Executada pelo Auditor da Entidade and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of inquiries, mainly to those responsible for financial and accounting matters, and the application of analytical procedures and other review procedures.

 

The scope of a review is significantly less in scope than an audit and, consequently, it did not allow us to obtain assurance that we became aware of all significant matters which could be identified in an audit. Accordingly, we did not express an audit opinion.

 

 

 

 

2


 

 

 

Conclusion on individual interim information

 

 

Based on our review, we are not aware of any fact which makes us believe that the individual interim accounting information included in the aforesaid quarterly information was not prepared, in all material respects, in accordance with CPC 21 applicable to the preparation of Quarterly Information (ITR) and presented in accordance with the Brazilian SEC (CVM) regulations.

 

 

 

 

3


 

 

 

Conclusion on consolidated interim information

 

Based on our review, we are not aware of any fact which makes us believe that the consolidated interim accounting information included in the aforesaid quarterly information was not prepared, in all material respects, in accordance with CPC 21 and IAS 34 applicable to the preparation of Quarterly Information (ITR) and presented in accordance with Brazilian SEC (CVM) regulations.

 

 

Emphasis

 

Restatement of corresponding amounts

 

As mentioned in note 2, as a consequence of changes in the accounting policy introduced by the adoption of IFRS 11, the corresponding amounts, individual and consolidated, related to the balance sheet of the year ended December 31, 2012, and the interim accounting information related to the statement of income, of comprehensive income, of changes in shareholders’ equity, of cash flow and of value added (supplementary information), referring to the six-month period ended June 30, 2013, presented for comparison purposes, were adjusted and are being restated according to CPC 23 – Políticas Contábeis, Mudança de Estimativa e Retificação de Erro (Accounting Policies, Change in Estimate and Ratification of Error) and CPC 26(R1) - Apresentação das Demonstrações Contábeis (Presentation of Financial Statements). Our conclusion did not change regarding this matter.

 

Other matters

 

Interim statement of value added

 

We have also reviewed the individual and consolidated statement of value added (SVA), referring to the six-month period ended June 30, 2013, the presentation of which in the interim information is required according to standards issued by CVM, regulations applicable to the preparation of the Quarterly Information – ITR and considered as supplementary information by IFRS’s standards, which do not require the presentation of the SVA. These statements were submitted to the same review procedures previously described and, based on our review, we have no knowledge of any fact which could make us believe that they were not prepared, in all material aspects, in accordance with individual and consolidated interim accounting information taken as a whole.

 

São Paulo, July 22, 2013.

 

 

CRC Nº 2SP013002/O-3

 

 

 

 

Clóvis Ailton Madeira

CTCRC Nº 1SP106895/O-1 "S"

 

4


 

TELEFÔNICA BRASIL S. A.

Balance sheets

June 30, 2013 and December 31, 2012

(In thousands of reais)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

Consolidated

 

 

 

 

Company

 

Consolidated

ASSETS

Note

 

6.30.13

 

12.31.12

 

6.30.13

 

12.31.12

 

LIABILITIES AND EQUITY

Note

 

6.30.13

 

12.31.12

 

6.30.13

 

12.31.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

8,570,644

 

6,515,094

 

17,227,068

 

16,209,181

 

CURRENT LIABILITIES

 

 

7,270,046

 

5,910,070

 

13,788,884

 

13,536,792

Cash and cash equivalents

3

 

4,367,490

 

3,079,282

 

7,779,199

 

7,133,485

 

Personnel, social charges and benefits

13

 

155,313

 

205,780

 

368,480

 

416,252

Short-term investments pledged as collateral

3

 

-

 

-

 

253,472

 

-

 

Trade accounts payable

14

 

2,149,398

 

2,191,047

 

5,915,604

 

5,889,068

Trade accounts receivable, net

4

 

2,143,996

 

2,150,724

 

5,355,643

 

5,512,272

 

Taxes, charges and contributions

15

 

478,061

 

529,055

 

1,375,270

 

1,781,250

Inventories

5

 

27,015

 

24,403

 

502,803

 

387,809

 

Loans and financing

16.1

 

774,617

 

743,941

 

1,282,943

 

1,255,323

Taxes recoverable

6.1

 

529,295

 

602,328

 

1,969,172

 

2,052,421

 

Debentures

16.2

 

723,698

 

702,215

 

723,698

 

702,215

Judicial deposits and garnishments

7

 

-

 

-

 

131,823

 

126,625

 

Dividends and interest on equity

17

 

1,973,655

 

467,831

 

1,973,655

 

467,831

Derivative transactions

34

 

59,948

 

39,197

 

64,918

 

41,109

 

Provisions

18

 

367,098

 

334,852

 

527,445

 

496,790

Prepaid expenses

8

 

138,786

 

26,610

 

858,426

 

248,337

 

Derivative transactions

34

 

7,970

 

8,747

 

45,146

 

29,586

Dividends and interest on equity

17

 

1,099,939

 

394,105

 

1,140

 

1,140

 

Deferred income

19

 

67,385

 

69,743

 

798,832

 

734,573

Other assets

9

 

204,175

 

198,445

 

310,472

 

705,983

 

Reverse split of fractional shares

 

 

345,793

 

345,953

 

389,349

 

389,510

 

 

 

 

 

 

 

 

 

 

 

Authorization license

 

 

-

 

-

 

58,530

 

994,977

NONCURRENT ASSETS

 

 

50,440,337

 

51,067,347

 

53,370,078

 

54,041,911

 

Other liabilities

20

 

227,058

 

310,906

 

329,932

 

379,417

Short-term investments pledged as collateral

3

 

23,881

 

23,920

 

110,719

 

109,708

 

 

 

 

 

 

 

 

 

 

 

Trade accounts receivable, net

4

 

-

 

-

 

224,671

 

93,378

 

NONCURRENT LIABILITIES

 

 

8,430,396

 

6,991,251

 

13,497,723

 

12,033,180

Taxes recoverable

6.1

 

284,319

 

549,225

 

484,449

 

738,965

 

Taxes, charges and contributions

15

 

28,890

 

30,057

 

514,523

 

488,749

Deferred taxes

6.2

 

-

 

-

 

1,045,989

 

1,027,888

 

Deferred taxes

6.2

 

1,366,004

 

1,216,651

 

1,372,754

 

1,216,651

Judicial deposits and garnishments

7

 

3,196,738

 

3,068,256

 

4,151,964

 

3,909,268

 

Loans and financing

16.1

 

375,461

 

582,422

 

3,427,889

 

3,756,001

Derivative transactions

34

 

20,201

 

21,465

 

374,697

 

286,278

 

Debentures

16.2

 

3,556,515

 

2,253,690

 

3,556,515

 

2,253,690

Prepaid expenses

8

 

13,782

 

16,720

 

26,930

 

31,396

 

Provisions

18

 

2,634,820

 

2,457,632

 

3,784,559

 

3,453,637

Other assets

9

 

201,351

 

75,587

 

126,469

 

92,308

 

Derivative transactions

34

 

-

 

3,733

 

21,007

 

26,545

Investments

10

 

21,361,644

 

21,561,061

 

132,781

 

142,881

 

Deferred income

19

 

41,520

 

39,022

 

262,734

 

303,362

Property, plant and equipment, net

11

 

10,051,716

 

10,020,263

 

17,085,082

 

17,604,144

 

Post-retirement benefit plans

33

 

386,472

 

372,368

 

407,289

 

392,269

Intangible assets, net

12

 

15,286,705

 

15,730,850

 

29,606,327

 

30,005,697

 

Other liabilities

20

 

40,714

 

35,676

 

150,453

 

142,276

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL EQUITY

 

 

43,310,539

 

44,681,120

 

43,310,539

 

44,681,120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

43,310,539

 

44,681,120

 

43,310,539

 

44,681,120

 

 

 

 

 

 

 

 

 

 

 

Capital

21

 

37,798,110

 

37,798,110

 

37,798,110

 

37,798,110

 

 

 

 

 

 

 

 

 

 

 

Capital reserves

21

 

2,686,897

 

2,686,897

 

2,686,897

 

2,686,897

 

 

 

 

 

 

 

 

 

 

 

Income reserves

21

 

1,100,000

 

1,100,000

 

1,100,000

 

1,100,000

 

 

 

 

 

 

 

 

 

 

 

Premium on acquisition of non-controlling interest

21

 

(70,448)

 

(70,448)

 

(70,448)

 

(70,448)

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

21

 

12,935

 

17,792

 

12,935

 

17,792

 

 

 

 

 

 

 

 

 

 

 

Proposed additional dividend

21

 

-

 

3,148,769

 

-

 

3,148,769

 

 

 

 

 

 

 

 

 

 

 

Retained earnings

21

 

1,783,045

 

-

 

1,783,045

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

59,010,981

 

57,582,441

 

70,597,146

 

70,251,092

 

TOTAL LIABILITIES AND EQUITY

 

 

59,010,981

 

57,582,441

 

70,597,146

 

70,251,092

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5


 

TELEFÔNICA BRASIL S. A.

Income statements

Six-month periods ended June 30, 2013 and 2012

(In thousands of reais)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

Consolidated

 

Note

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

OPERATING REVENUE, NET

22

 

6,284,351

 

6,445,441

 

17,046,989

 

16,551,720

 

 

 

 

 

 

 

 

 

 

Cost of services rendered and products sold

23

 

(4,097,346)

 

(3,713,895)

 

(8,798,819)

 

(8,113,872)

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

2,187,005

 

2,731,546

 

8,248,170

 

8,437,848

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (EXPENSES)

 

 

(182,572)

 

(448,998)

 

(5,772,404)

 

(5,169,475)

Selling expenses

24

 

(1,504,737)

 

(1,597,374)

 

(4,517,671)

 

(4,308,701)

General and administrative expenses

25

 

(349,739)

 

(375,536)

 

(1,177,126)

 

(1,102,351)

Equity pick-up

10

 

1,801,316

 

1,620,591

 

(2,061)

 

1,224

Other operating income (expenses), net

26

 

(129,412)

 

(96,679)

 

(75,546)

 

240,353

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME BEFORE FINANCIAL INCOME (EXPENSES)

 

 

2,004,433

 

2,282,548

 

2,475,766

 

3,268,373

 

 

 

 

 

 

 

 

 

 

Financial income

27

 

263,076

 

299,540

 

748,996

 

619,217

Financial expenses

27

 

(389,502)

 

(347,022)

 

(839,059)

 

(748,932)

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE TAXES

 

 

1,878,007

 

2,235,066

 

2,385,703

 

3,138,658

 

 

 

 

 

 

 

 

 

 

Income and social contribution taxes

28

 

(153,577)

 

(191,501)

 

(661,273)

 

(1,096,508)

 

 

 

 

 

 

 

 

 

 

NET INCOME FOR THE PERIOD

 

 

1,724,430

 

2,043,565

 

1,724,430

 

2,042,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

 

Non-controlling interest

 

 

-

 

-

 

-

 

(1,415)

Controlling interest

 

 

1,724,430

 

2,043,565

 

1,724,430

 

2,043,565

 

 

 

 

 

 

 

 

 

 

Base and diluted earnings per common share

 

 

1.44

 

1.71

 

 

 

 

Basic and diluted earnings per preferred share

 

 

1.58

 

1.88

 

 

 

 

 

6


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TELEFÔNICA BRASIL S. A.

Statements of changes in equity

Period ended June 30, 2013

(In thousands of reais)

 

 

 

 

 

Capital reserve

 

Income reserves

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

Capital

 

Premium on acquisition of non-controlling interest

 

Special goodwill reserve

 

Capital reserve

 

Treasury stock

 

Legal reserve

 

Retained earnings

 

Additional proposed dividends

 

Financial instruments available for sale

 

Derivative transactions

 

Translation difference of investments abroad

 

Company equity

 

Non-controlling interest

 

Total equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2011

37,798,110

 

(29,929)

 

63,074

 

2,735,930

 

(79,339)

 

877,322

 

-

 

1,953,029

 

9,884

 

1,995

 

(4,359)

 

43,325,717

 

5,068

 

43,330,785

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional dividend proposed for 2011

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(1,953,029)

 

-

 

-

 

-

 

(1,953,029)

 

-

 

(1,953,029)

Expired dividends and interest on equity

-

 

-

 

-

 

-

 

-

 

-

 

62,340

 

-

 

-

 

-

 

-

 

62,340

 

-

 

62,340

Repurchase of shares

-

 

-

 

-

 

-

 

(32,768)

 

-

 

-

 

-

 

-

 

-

 

-

 

(32,768)

 

-

 

(32,768)

Noncontrolling interest

-

 

(40,519)

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(40,519)

 

(3,653)

 

(44,172)

Other comprehensive income

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(7,561)

 

(2,851)

 

2,541

 

(7,871)

 

-

 

(7,871)

Net income for the period

-

 

-

 

-

 

-

 

-

 

-

 

2,043,565

 

-

 

-

 

-

 

-

 

2,043,565

 

(1,415)

 

2,042,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2012

37,798,110

 

(70,448)

 

63,074

 

2,735,930

 

(112,107)

 

877,322

 

2,105,905

 

-

 

2,323

 

(856)

 

(1,818)

 

43,397,435

 

-

 

43,397,435

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expired dividends and interest on equity

-

 

-

 

-

 

-

 

-

 

-

 

27,352

 

-

 

-

 

-

 

-

 

27,352

 

-

 

27,352

Other changes in equity

-

 

-

 

-

 

-

 

-

 

-

 

(3,240)

 

-

 

-

 

-

 

-

 

(3,240)

 

-

 

(3,240)

Repurchase of shares

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Other comprehensive income

-

 

-

 

-

 

-

 

-

 

-

 

(46,056)

 

-

 

3,907

 

11,046

 

3,190

 

(27,913)

 

-

 

(27,913)

Net income for the year

-

 

-

 

-

 

-

 

-

 

-

 

2,410,008

 

-

 

-

 

-

 

-

 

2,410,008

 

-

 

2,410,008

Allocation of income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legal reserve

-

 

-

 

-

 

-

 

-

 

222,678

 

(222,678)

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Interim dividends

-

 

-

 

-

 

-

 

-

 

-

 

(1,122,522)

 

-

 

-

 

-

 

-

 

(1,122,522)

 

-

 

(1,122,522)

Proposed additional dividend

-

 

-

 

-

 

-

 

-

 

-

 

(3,148,769)

 

3,148,769

 

-

 

-

 

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at December 31, 2012

37,798,110

 

(70,448)

 

63,074

 

2,735,930

 

(112,107)

 

1,100,000

 

-

 

3,148,769

 

6,230

 

10,190

 

1,372

 

44,681,120

 

-

 

44,681,120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional dividend proposed for 2012

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(3,148,769)

 

-

 

-

 

-

 

(3,148,769)

 

-

 

(3,148,769)

Expired dividends and interest on equity

-

 

-

 

-

 

-

 

-

 

-

 

59,045

 

-

 

-

 

-

 

-

 

59,045

 

-

 

59,045

Other comprehensive income

-

 

-

 

-

 

-

 

-

 

-

 

(430)

 

-

 

(8,202)

 

(1,048)

 

4,393

 

(5,287)

 

-

 

(5,287)

Net income for the period

-

 

-

 

-

 

-

 

-

 

-

 

1,724,430

 

-

 

-

 

-

 

-

 

1,724,430

 

-

 

1,724,430

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at June 30, 2013

37,798,110

 

(70,448)

 

63,074

 

2,735,930

 

(112,107)

 

1,100,000

 

1,783,045

 

-

 

(1,972)

 

9,142

 

5,765

 

43,310,539

 

-

 

43,310,539

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding shares (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,123,269

VPA – Equity value of Company’s shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

38.56

 

7


 

TELEFÔNICA BRASIL S. A.

Cash flow statements

Six-month periods ended June 30, 2013 and 2012

(In thousands of reais)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

Consolidated

 

 

2013

 

2012

 

2013

 

2012

Cash generated by operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before taxes

 

1,878,007

 

2,235,066

 

2,385,703

 

3,138,658

 

 

 

 

 

 

 

 

 

Items not affecting cash

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses (revenue) not representing changes in cash

 

37,796

 

225,537

 

3,886,606

 

2,845,701

Depreciation and amortization

 

1,345,096

 

1,306,276

 

2,845,289

 

2,669,989

Foreign exchange variation on loans

 

13,494

 

8,774

 

40,991

 

16,374

Monetary variations

 

48,808

 

16,603

 

61,350

 

(28,616)

Equity pick-up

 

(1,801,316)

 

(1,620,591)

 

2,061

 

(1,224)

Gain (loss) on assets write-off/disposal

 

(57,629)

 

7,447

 

(139,517)

 

(382,581)

Provision for impairment of accounts receivable

 

154,474

 

145,434

 

402,103

 

340,387

Provision(reversal) of accounts payable

 

(8,610)

 

122,767

 

28,586

 

(262,659)

Provision (write-offs and reversals) for impairment of inventory

 

3,033

 

(2,514)

 

11,506

 

8,697

Pension plans and other post-employment benefits

 

13,296

 

(3,617)

 

13,159

 

(8,109)

Provisions for tax, labor, civil and regulatory contingencies

 

165,638

 

123,525

 

332,444

 

230,258

Interest expenses

 

161,894

 

121,621

 

268,910

 

253,242

Reversal of provision for demobilization

 

(3,821)

 

(188)

 

12,954

 

(1,819)

Provision for customer loyalty programs

 

-

 

-

 

6,770

 

11,762

Investment losses

 

3,439

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

(Increase) decrease in operating assets

 

(397,261)

 

80,935

 

(1,484,734)

 

(413,728)

Trade accounts receivable

 

(147,746)

 

(121,422)

 

(376,767)

 

(188,018)

Inventories

 

(5,645)

 

2,587

 

(126,500)

 

(24,112)

Taxes recoverable

 

12,527

 

387,650

 

(298,088)

 

366,821

Other current assets

 

(105,485)

 

(11,377)

 

(499,716)

 

(346,279)

Other noncurrent assets

 

(150,912)

 

(176,503)

 

(183,663)

 

(222,140)

 

 

 

 

 

 

 

 

 

Increase (decrease) in operating liabilities:

 

(11,366)

 

(746,807)

 

(587,352)

 

(1,664,955)

Personnel, social charges and benefits

 

(50,467)

 

(37,823)

 

(47,772)

 

(66,992)

Trade accounts payable

 

3,826

 

(362,502)

 

114,575

 

(508,814)

Taxes, charges and contributions

 

305,800

 

(116,939)

 

442,467

 

(99,573)

Interest paid

 

(138,817)

 

(123,567)

 

(263,043)

 

(236,198)

Income and social contribution taxes paid

 

-

 

(9,483)

 

(703,097)

 

(547,748)

Other current liabilities

 

(98,265)

 

(107,462)

 

(50,069)

 

(153,980)

Other noncurrent liabilities

 

(33,443)

 

10,969

 

(80,413)

 

(51,650)

Total cash from operating activities

 

1,507,176

 

1,794,731

 

4,200,223

 

3,905,676

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advance for future capital contribution in subsidiaries

 

(65,250)

 

-

 

-

 

-

Additions of PP&E and intangible assets (net of donations)

 

(1,011,834)

 

(1,063,471)

 

(3,016,567)

 

(2,525,131)

Cash received from sale of PP&E items

 

34,273

 

3,248

 

423,090

 

282,703

Cash from investing activities

 

-

 

7,551

 

-

 

10,069

Short-term investments pledged as collateral

 

-

 

-

 

(250,000)

 

-

Dividends and interest on equity received

 

1,320,449

 

1,200,000

 

-

 

-

Total cash from (used in) investing activities

 

277,638

 

147,328

 

(2,843,477)

 

(2,232,359)

 

 

 

 

 

 

 

 

 

Net cash from (used in) financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment of loans, financing and debentures

 

(207,002)

 

(637,737)

 

(430,135)

 

(849,922)

Loans and debentures raised

 

1,300,128

 

-

 

1,318,124

 

14,309

Derivative agreements payment, net

 

(5,671)

 

(3,144)

 

(14,960)

 

(27,780)

Payments referring to grouping of shares

 

(161)

 

-

 

(161)

 

 

Dividends and interest on equity - paid

 

(1,583,900)

 

(1,573,154)

 

(1,583,900)

 

(1,573,154)

Acquisition of noncontrolling interest

 

-

 

(44,171)

 

-

 

(44,171)

Repurchase of treasury stock

 

-

 

(32,769)

 

-

 

(32,769)

Total cash used in financing activities

 

(496,606)

 

(2,290,975)

 

(711,032)

 

(2,513,487)

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

1,288,208

 

(348,916)

 

645,714

 

(840,170)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

3,079,282

 

826,902

 

7,133,485

 

2,889,543

Cash and cash equivalents at end of period

 

4,367,490

 

477,986

 

7,779,199

 

2,049,373

 

 

 

 

 

 

 

 

 

Changes in cash and cash equivalents for the period

 

1,288,208

 

(348,916)

 

645,714

 

(840,170)

 

 

8


 

TELEFÔNICA BRASIL S. A.

Statements of comprehensive income

Six-month periods ended June 30, 2013 and 2012

(In thousands of reais)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

Consolidated

 

 

2013

 

2012

 

2013

 

2012

Net income for the period

 

1,724,430 

 

2,043,565

 

1,724,430

 

2,042,150

 

 

 

 

 

 

 

 

 

Unrealized losses with investment available for sale

 

(8,202) 

 

(7,561)

 

(8,202)

 

(7,561)

Actuarial losses and limitation effect of the assets of surplus plans

 

-  

 

-

 

(430)

 

-

Gains from derivative transactions, net of taxes

 

-  

 

-

 

(1,048)

 

(2,851)

 

 

 

 

 

 

 

 

 

Cumulative transaction adjustments – operations in foreign currency

 

4,393 

 

2,541

 

4,393

 

2,541

 

 

 

 

 

 

 

 

 

Interest in comprehensive income of subsidiaries

 

(1,478) 

 

(2,851)

 

-

 

-

Net losses recognized in equity

 

(5,287) 

 

(7,871)

 

(5,287)

 

(7,871)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income for the period

 

1,719,143 

 

2,035,694

 

1,719,143

 

2,034,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

Non-controlling interest

 

-

 

-

 

-

 

(1,415)

Controlling interest

 

1,719,143

 

2,035,694

 

1,719,143

 

2,035,694

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per common share

 

1.44 

 

1.71

 

 

 

 

Basic and diluted earnings per preferred share

 

1.58 

 

1.88

 

 

 

 

 

 

 

9


 

TELEFÔNICA BRASIL S. A.

Statements of value added

Six-month periods ended June 30, 2013 and 2012

(In thousands of reais)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

Consolidated

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

Revenues

 

8,273,164

 

8,591,579

 

23,204,275

 

22,411,194

Sale of products and services

 

8,298,542

 

8,621,260

 

23,297,628

 

22,497,223

Other revenues

 

129,096

 

115,753

 

308,750

 

254,358

Provision for impairment

 

(154,474)

 

(145,434)

 

(402,103)

 

(340,387)

 

 

 

 

 

 

 

 

 

Inputs acquired from third parties

 

(3,824,313)

 

(3,861,900)

 

(8,693,073)

 

(8,055,220)

Cost of products, goods and services sold

 

(2,806,557)

 

(2,719,640)

 

(5,362,048)

 

(5,025,236)

Materials, electric power, outsourced services and other

 

(1,078,901)

 

(1,160,508)

 

(3,459,368)

 

(3,428,954)

Loss/recovery of assets

 

61,145

 

18,248

 

128,343

 

398,970

 

 

 

 

 

 

 

 

 

Gross value added

 

4,448,851

 

4,729,679

 

14,511,202

 

14,355,974

 

 

 

 

 

 

 

 

 

Retentions

 

(1,345,096)

 

(1,306,276)

 

(2,845,289)

 

(2,669,989)

Depreciation and amortization

 

(1,345,096)

 

(1,306,276)

 

(2,845,289)

 

(2,669,989)

 

 

 

 

 

 

 

 

 

Net value added produced

 

3,103,755

 

3,423,403

 

11,665,913

 

11,685,985

 

 

 

 

 

 

 

 

 

Value added received in transfer

 

2,064,392

 

1,920,131

 

746,935

 

620,441

Equity pickup

 

1,801,316

 

1,620,591

 

(2,061)

 

1,224

Financial income

 

263,076

 

299,540

 

748,996

 

619,217

 

 

 

 

 

 

 

 

 

Total value added to be distributed

 

5,168,147

 

5,343,534

 

12,412,848

 

12,306,426

 

 

 

 

 

 

 

 

 

Distribution of value added

 

5,168,147

 

5,343,534

 

12,412,848

 

12,306,426

 

 

 

 

 

 

 

 

 

Personnel, social charges and benefits

 

414,881

 

389,383

 

1,137,340

 

922,684

Direct compensation

 

286,309

 

276,492

 

741,963

 

671,406

Benefits

 

92,063

 

69,121

 

326,341

 

178,966

Unemployment compensation fund contribution tax (FGTS)

36,509

 

43,770

 

69,036

 

72,312

Taxes, charges and contributions

 

2,171,537

 

2,464,254

 

7,432,081

 

7,759,195

Federal

 

664,590

 

721,979

 

2,589,072

 

3,038,266

State

 

1,482,458

 

1,708,045

 

4,797,996

 

4,667,197

Municipal

 

24,489

 

34,230

 

45,013

 

53,732

Debt remuneration

 

603,837

 

302,825

 

1,775,701

 

1,356,343

Interest

 

368,367

 

346,646

 

815,736

 

748,172

Rent

 

235,470

 

(43,821)

 

959,965

 

608,171

Equity remuneration

 

1,724,430

 

2,043,565

 

1,724,430

 

2,042,150

Retained profits

 

1,724,430

 

2,043,565

 

1,724,430

 

2,043,565

Noncontrolling shareholder interest

 

-

 

-

 

-

 

(1,415)

Other

 

253,462

 

143,507

 

343,296

 

226,054

Provisions for labor and civil contingencies, net

 

253,462

 

143,507

 

343,296

 

226,054

 

 

10


 

Telefônica Brasil S. A.

NOTES TO QUARTERLY INFORMATION

Six-month period ended June 30, 2013

(In thousands of reais, unless stated otherwise)

                                             

 

1.    OPERATIONS  

 

a. Shareholding controlling interest

 

Telefônica Brasil S.A. (“Company” or Telefônica Brasil) is headquartered at Avenida Engenheiro Luiz Carlos Berrini, nº 1376, in the capital city of the state of São Paulo, Brazil. The Company is a member of Telefonica Group (Group), the telecommunications industry leader in Spain and which is also present in several European and Latin American countries. At June 30, 2013 and December 31, 2012, Telefónica S.A., holding company of the Group, held total direct and indirect interest in the Company of 73.81%, excluding treasury shares, 91.76% of which are common shares and 64.60% are preferred shares.

 

b. Subsidiaries

 

At June 30,  2013 and December 31,  2012, the Company held equity interest in direct and indirect subsidiaries (wholly-owned subsidiaries) and jointly controlled entities

Some information on investees is as follows.

 

b.1)  Direct and indirect subsidiaries (wholly-owned subsidiaries)

 

Vivo S.A. (Vivo): Vivo is engaged in SMP services, including activities necessary or useful for the performance of said services, in conformity with the authorizations granted to it.

 

A. Telecom S.A. (ATelecom):  Is engaged in management of telecommunication service rendering and installation, operation and maintenance of Internet, Intranet and Extranet solutions, commercial representation, mediation, intermediation and distribution of assets, sale, representation, rental and maintenance of telecommunication and general IT systems, equipment and devices, advisory services and technical support on specification, implementation and maintenance of new voice, data and image systems, import and export of assets and services useful to the performance of the main activity and to holding interest in capital of other entities, Brazilian or foreign, as a partner, shareholder or member.

 

Telefônica Data S.A. (TData): It is engaged in rendering and operating telecommunication services, as well as preparing, implementing and installing projects related to the operation of integrated corporate solutions, advisory services on telecommunications, activities related to the rendering of technical support services, sale, rental and maintenance of telecommunication equipment and networks.

 

Telefônica Sistema de Televisão S.A. (TST): It is engaged in the provision of the Multichannel Multipoint Distribution Service (MMDS) type pay television services, in addition to general telecommunication and Internet services.

 

Ajato Telecomunicações Ltda. (Ajato): It is engaged in the rendering of telecommunication and IT services, sale, rental business, import, export, maintenance and repair of this equipment.

 

 

 

 

11


 

Telefônica Brasil S. A.

NOTES TO QUARTERLY INFORMATION

Six-month period ended June 30, 2013

(In thousands of reais, unless stated otherwise)

                                             

 

GTR-T Participações e Empreendimentos S.A. (GTR-T): It is engaged in holding interest in other companies engaged in rendering pay and cable television services, telecommunications in general, production, acquisition, licensing, import and distribution of own or third-party television programs, replacement parts and equipment, management and operation of telecommunication and pay television service platforms.

 

TVA Sul Paraná S.A. (Sul Paraná): It is engaged rendering pay and cable television services, telecommunications in general, production, acquisition, licensing, import and distribution of own or third-party television programs, replacement parts and equipment, management, updating and operation of telecommunication and pay television service platforms, and editing publications.

 

Lemontree Participações S.A. (Lemontree): It is engaged in holding interest in other companies engaged in rendering pay and cable television services, telecommunications in general, production, acquisition, licensing, import and distribution of own or third-party television programs, replacement parts and equipment, management, updating and operation of telecommunication and pay television service platforms, and management and sale of data.

 

Comercial Cabo TV São Paulo S.A. (CaTV): It is engaged rendering pay and cable television services, advisory and consultancy services on telecommunications in general, production, acquisition, licensing, import and distribution of own or third-party television programs, replacement parts and equipment, management, updating and operation of telecommunication and pay television service platforms, and operation of publicity and advertising of all types.

 

b.2)  Jointly controlled entities

 

Aliança Atlântica Holding B.V. (Aliança): Company headquartered in Amsterdam, Holland, with 50% interest held by Telefônica Brasil and cash generated from sale of Portugal Telecom shares in June 2010. Through May 8, 2012, the Company held equity interest in Zon Multimédia, Company of the Portugal Telecom group which renders pay television services, Internet, distribution of audiovisual contents, cinema and telecommunication services. This equity interest was disposed of on May 8, 2012.

 

Companhia AIX de Participações (AIX): It is engaged in holding interest in Refibra consortium, and activities related to the direct and indirect operation of activities related to the construction, completion and operation of underground networks or optical fiber ducts.

 

Companhia ACT de Participações (ACT): It is engaged in holding interest in Refibra consortium, and activities related to the rendering of technical support services for the preparation of projects and completion of networks, by means of studies required to make them economically feasible, and monitor the progress of Consortium-related activities.

 

 

 

 

 

 

 

12


 

Telefônica Brasil S. A.

NOTES TO QUARTERLY INFORMATION

Six-month period ended June 30, 2013

(In thousands of reais, unless stated otherwise)

                                             

 

b.3)  Interest in other companies

 

Direct and indirect subsidiaries and jointly controlled entities, as well as the percentage of interest held by the Company as of June 30, 2013 and December 31, 2012

 

June 30, 2013

 

Direct interest

 

Indirect interest