EDP - Energias do Brasil SA

Transcrição

EDP - Energias do Brasil S.A.
Consolidated financial statement
December 31, 2012 and 2011
EDP - ENERGIAS DO BRASIL S.A.
STATEMENTS OF FINANCIAL POSITION AS OF
(In thousands of Reais)
Note
ASSETS
Current assets
Cash and cash equivalents
Accounts receivable
Indemnifiable financial assets
Consumers and concessionaires
Taxes and social contributions
Related parties
Dividends receivable
Inventories
Pledges and restricted deposits
Prepaid expenses
Income receivable
Financial assets available for sale
Other credits
4
6
15
5
7
9
28
10
11
37
13
Non-current assets
Accounts receivable
Deferred income tax and social contribution
Related parties
Advances for future capital increases
Prepaid expenses
Other credits
6
15
5
7
8
9
12
11
13
14
16
17
18
Investments
Investment properties
Property, plant and equipment
Intangible assets
Total assets
Parent company
12/31/2012
12/31/2011
Reclassified
99,054
3,402
105,289
10,698
183,043
222
63
19,806
1,789
423,366
230,222
1,121
95,958
15,638
208,019
222
198
33,011
598
584,987
572,378
4,530
1,352,308
404,812
359
109,609
24,856
957
6,150
19,806
222,896
2,718,661
895,868
4,165
797
963,226
519,210
68,077
10,107
4,887
4,825
33,011
161,837
2,666,010
20,602
153,771
195,400
12,213
14,291
396,277
21,018
73,441
10,237
8,979
13,012
126,687
21,324
690,278
40,294
63,770
749,871
69,488
244,650
46,327
1,926,002
23,897
482,285
63,657
38,184
791,997
2,223
245,635
496
39,811
1,688,185
4,392,502
5,004
1,670
4,399,176
5,218,819
4,168,961
3,113
856
4,172,930
4,884,604
96,541
4,127
6,259,530
3,424,982
9,785,180
14,429,843
32,896
4,186
5,659,533
3,565,143
9,261,758
13,615,953
See the accompanying notes to the financial statements.
ϭ
Consolidated
12/31/2012
12/31/2011
Reclassified
STATEMENTS OF FINANCIAL POSITION AS OF
Note
LIABILITIES and SHAREHOLDERS' EQUITY
Current liabilities
Suppliers
Dividends
Debentures
Loans, financing and debt interest
Post-employment benefits
Estimated employee benefits and social charges
Regulatory and industry charges
Use of public property
Provisions
Other accounts payable
Non-current liabilities
Deferred income and social contribution taxes
Debentures
Loans, financing and debt interest
Related parties
Provisions
Provision for unsecured liability
Reserve for reversal and amortization
Other accounts payable
Shareholders' equity
Capital stock
Capital reserves
Profit reserves
Other comprehensive income
Treasury shares
Shareholders' equity attributed to the owners of equity
Non-controlling interests
Total shareholders' equity
Total liabilities and shareholders' equity
Parent company
12/31/2012
12/31/2011
Reclassified
19
7
28
20
21
22
23
24
25
26
13
7,897
44,623
113,393
11,364
6,429
4,742
188,448
6,446
40,203
115,631
6
8,407
5,108
5,390
181,191
1,033,442
502,642
201,472
435,535
365,206
35,498
67,660
205,108
21,953
56,443
141,156
3,066,115
703,742
551,130
192,612
107,923
471,798
30,035
59,164
275,374
20,184
162,127
114,349
2,688,438
7
8
20
21
22
9
24
25
26
14
2.2.s
13
43,879
1,908
460,674
768
31,569
27,781
449
567,028
44,466
2,828
109
25,250
25,482
264
98,399
111,855
387,391
1,052,633
2,427,454
491,344
17,071
242,140
182,507
1,455
17,248
82,427
5,013,525
136,817
468,710
860,637
2,173,228
262,412
7,035
231,139
182,568
1,587
17,248
38,496
4,379,877
3,182,716
144,540
1,194,422
(51,721)
(6,614)
4,463,343
1,886,860
6,350,203
14,429,843
3,182,716
95,598
1,379,110
(45,796)
(6,614)
4,605,014
1,942,624
6,547,638
13,615,953
27.1
27.3
27.3
27.3.2
27.4
3,182,716
144,540
1,194,422
(51,721)
(6,614)
4,463,343
4,463,343
5,218,819
Ϯ
Consolidated
12/31/2012
12/31/2011
Reclassified
3,182,716
95,598
1,379,110
(45,796)
(6,614)
4,605,014
4,605,014
4,884,604
-
-
-
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31
(Amounts expressed in thousands of Reais, unless otherwise indicated)
Note
29
Revenues
Cost of production for electricity services
Electricity services cost
Electricity purchased for resale
Electricity network utilization charges
Cost of production for electricity
Cost of consumed raw material
Parent company
2012
2011
1,777
-
1,384
-
-
-
1,777
1,384
Consolidated
2012
2011
Reclassified
6,567,283
5,705,409
(3,499,543)
(2,302,822)
(737,216)
(651,398)
(4,236,759)
(2,954,220)
(5,533)
(5,533)
-
30
Cost of operation
Personnel
Thir-party materials and services
Depreciation and amortization
Other operating costs
Cost of service rendered to third-parties
Gross income
Operating income and expenses
Sales expenses
General and administrative expenses
Other operating income and expenses
(189,407)
(230,179)
(273,931)
(13,525)
(707,042)
(4,949,334)
(243,492)
1,374,457
(167,551)
(222,686)
(261,194)
(36,090)
(687,521)
(3,641,741)
(309,295)
1,754,373
30
Net result for the year
(484)
(49,523)
(6,209)
(16,443)
(72,659)
(70,882)
436,505
27,085
(49,821)
(22,736)
342,887
(1,243)
(1,243)
341,644
(1,430)
(67,642)
(12,192)
12,479
(68,785)
(67,401)
569,951
30,647
(44,278)
(13,631)
488,919
(354)
2,149
1,795
490,714
(11,827)
(305,583)
(66,486)
(17,501)
(401,397)
973,060
(2,898)
191,962
(437,672)
(245,710)
724,452
(146,327)
(44,588)
(190,915)
533,537
(41,825)
(310,908)
(84,395)
(125,266)
(562,394)
1,191,979
(3,482)
210,256
(493,699)
(283,443)
905,054
(234,587)
21,249
(213,338)
691,716
Attributable to controlling shareholders
Attributable to non-controlling interests
Income per share attributable to controlling shareholders
Basic earnings per share (Reais / Shares)
ON
Diluted earnings per share (Reais / Shares)
ON
341,644
0.71838
0.71838
490,714
1.03183
1.03183
341,644
191,893
0.71838
0.71838
490,714
201,002
1.03183
1.03183
Income (loss) before financial income (loss), taxes and ownership interest
Income from equity interests
Financial income
Financial expenses
Financial result
Income (loss) before income taxes
Income and social contribution - current
14.1
31
31
32
ϯ
STATEMENTS OF COMPREHENSIVE INCOME
Parent company
2012
2011
Net income for the year
Actuarial gains and losses - Post-employment benefits
Cashflow hedge
Comprehensive income for the year
341,644
490,714
(237,365)
(2,707)
(6,270)
83,756
179,058
(80,270)
5,018
(31,565)
36,317
420,214
(237,405)
(2,707)
(6,270)
83,770
370,925
(80,424)
5,018
(31,565)
36,369
621,114
179,058
420,214
179,058
191,867
420,214
200,900
ϰ
Consolidated
2012
2011
Reclassified
533,537
691,716
STATEMENTS OF CASH FLOWS
Parent company
2012
Consolidated
2011
2012
2011
Reclassified
Cash flows from operating activities
Income before income tax and social contribution
Adjustments for reconciliation of income to cash from operations
Allowance for doubtful accounts and net losses
Indemnifiable financial assets - Write-off
Fair value of indemnifiable financial assets
Net book value of assets and intangible assets written off
Prepaid expenses
Suppliers - Monetary restatement - Energia livre
Debt charges and monetary variations on loans, financings and debentures
Use of public property - monetary restatement and adjustment to present value
Provision for post-employment benefit plan
Provision (reversal) and monetary restatement for civil, tax and labor contingencies
Reserve for environmental permits - monetary restatement and adjustment to
present value
Adjustment to present value
Gain on business combination
Allowance for investment losses
Regulatory and sector charges - Provision and monetary restatement
Pledges and restricted deposits - monetary restatement
Income tax and social contribution - monetary restatement
Monetary (reversal) restatement - contingent consideration
Other
(Increase) decrease of operational assets
Income tax and social contribution credits
Inventories
Prepaid expenses
Income receivable
Accounts receivable
Other operational assets
Increase (decrease) in operating liabilities
Suppliers
Other taxes and social contributions
Provisions
PIS and Cofins taxes on revenue returned to consumers - Tax Situation Code 27
Other operating liabilities
Cash (invested in) from operating activities
342,887
6,213
46
10,302
488,919
12,192
71
(633)
724,452
9,002
8,701
(102,439)
342,583
32,566
2,727
5,006
260,390
905,054
37,243
9,071
345,894
44,817
1,712
6,136
360,984
-
-
32,028
30,491
34,214
23,890
7,640
14,526
55,658
126,448
(436,505)
(20,978)
(4,425)
(94,820)
(9,331)
(3,234)
135
(2,603)
(15,033)
1,451
14,617
2,957
(469)
18,556
(91,297)
(569,951)
2,300
(52,576)
14,110
(286)
(8)
(1,525)
12,291
3,076
361
3,633
(12,398)
595
(4,733)
(45,018)
1,638
4,156
2,898
(20,978)
53,251
(13,713)
3,898
(521)
5,353
1,437,147
(401,263)
(60,599)
(49,431)
(57)
1,698
(1,325)
4,191
(64,233)
(571,019)
325,387
34,454
(33,529)
7,805
(50,402)
(66,537)
(74)
(6,026)
211,078
1,077,206
1,012
(1,155)
3,482
(10,184)
2,300
52,717
(17,288)
4,934
(9,681)
1,921,600
(79,157)
13,440
(39,503)
(1,692)
(904)
(238)
3,567
2,330
(102,157)
73,446
(5,932)
(28,707)
8,162
(8,601)
(48,777)
(56,878)
(7,620)
(74,907)
1,744,536
(264,688)
-
-
(151,492)
Net cash (invested in) from operating activities
(91,297)
(45,018)
925,714
1,479,848
Investing activities
Disposal (acquisition) of investment
Dividends received
Securities received
Additions in assets, intangible and financial assets, indemnifiable
Cash and cash equivalents - Investment held for sale
Net cash (invested in) from investing activities
61,430
521,330
2,861
(3,247)
582,374
535,595
1,121
(1,897)
534,819
53,307
(873,415)
(820,108)
(283,918)
(778,401)
8,907
(1,053,412)
Net cash from financing activities
Related parties
Advance for future capital increase
Dividends and interest on capital paid
Funding form Loans, financing and debentures
Repayment of principal for loans, financing and debentures
Debt charges, net of derivatives
Contingent consideration
Net cash (invested in) from financing activities
(74,731)
(644,638)
(352,346)
449,470
(622,245)
27,451
(235,264)
(337,578)
(545,391)
(1,298)
4
(66,345)
(527,962)
1,360,110
(841,817)
(236,519)
(96,011)
(19,258)
(429,096)
1,385
(270)
(488,955)
908,376
(840,575)
(218,881)
(18,097)
(657,017)
Net decrease (increase) in cash and cash equivalents
(131,168)
(55,590)
(323,490)
(230,581)
Cash and cash equivalents at the end of the year
Cash and cash equivalents at the beginning of the year
99,054
230,222
(131,168)
230,222
285,812
(55,590)
572,378
895,868
(323,490)
895,868
1,126,449
(230,581)
Income and social contribution taxes paid
ϱ
Cashflow hedge
Transfer to profit reserve
Balances at December 31, 2012
Capital reserves
Additional dividend approved - OGM 04/10/2012
Net profit for the year
Allocation of net income
Legal reserve
Intermediary dividends JSCP (interest on own capital)
Additional dividend proposed
Cashflow hedge
Transfer to profit reserve
Balances at December 31, 2011
Additional proposed dividend on April 7, 2011
Legal reserve
Intermediary dividends JSCP (interest on own capital)
Reserve for profit
Balances at January 1, 2011
3,182,716
-
144,540
48,942
-
95,598
stock
3,182,716
3,182,716
Capital
reserves
95,598
Capital
(6,614)
-
(6,614)
shares
(6,614)
Treasury
income
ϲ
(237,365)
(2,707)
(6,270)
83,756
156,660
(51,721)
-
(80,270)
5,018
(31,565)
36,317
52,979
(45,795)
(28,274)
Other comprehensive
(156,660)
1,194,422
(239,249)
17,082
194,140
(238,678)
24,536
239,249
95,929
(52,979)
1,379,109
reserves
1,311,052
Profit
STATEMENS OF CHANGES IN SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2012 and 2011
-
-
341,644
(17,082)
(130,422)
(194,140)
490,714
(24,536)
(131,000)
(239,249)
(95,929)
-
earnings
Retained
(237,365)
(2,707)
(6,270)
83,756
4,463,343
48,942
(239,249)
341,644
(130,422)
-
(40)
14
1,886,860
(48,942)
191,893
(198,689)
-
181,392
(139,309)
(154)
52
1,942,624
(238,678)
490,714
(131,000)
(80,270)
5,018
(31,565)
36,317
4,605,014
Noncontrolling interests
1,900,643
Total
Parent company
4,554,478
Total
(237,405)
(2,707)
(6,270)
83,770
6,350,203
(239,249)
533,537
(329,111)
-
(238,678)
672,106
(270,309)
(80,424)
5,018
(31,565)
36,369
6,547,638
Consolidated
6,455,121
STATEMENTS OF ADDED VALUE
Parent company
2012
2011
Reclassified
27,874
13,789
1,961
3,247
1,897
22,666
11,892
(51,439)
(42,391)
(4,813)
(1,952)
(29,582)
(24,375)
(17,044)
(16,064)
(23,565)
(28,602)
(6,209)
(12,192)
(29,774)
(40,794)
27,085
30,647
436,505
569,951
433,816
559,804
30,665
18,089
24,959
12,933
3,648
3,276
2,058
1,880
26,842
22,248
25,784
21,869
566
215
492
164
34,665
28,753
30,711
25,908
3,954
2,845
130,422
131,000
130,422
131,000
222,594
200,090
211,222
359,714
433,816
559,804
Generation of added value
Net operating income
Allowance for doubtful accounts and net losses
Revenue related to the construction of company assets
Revenue from construction
Other revenue
(-) Inputs acquired from third parties
Costs of purchased energy
Materials
Third-party services
Infrastructure construction costs
Gross value added
Retentions
Net generated value added
Added value received as a transfer
Financial revenues
Equity accounting result
Total value added to distribute
Distribution of value added
Personnel
Direct remuneration
Benefits
FGTS
Taxes, fees and contributions
Federal
State
Municipal
Remuneration of third party capital
Interest
Rents
Remuneration on own capital
Interest on own capital
Founders' shares
Retained earnings
ϳ
Consolidated
2012
2011
Reclassified
10,601,607
9,169,172
9,459,758
8,372,895
(9,640)
(37,256)
662,297
417,290
235,736
303,747
253,456
112,496
(6,145,587)
(4,583,832)
(3,881,895)
(2,588,773)
(808,979)
(717,825)
(260,689)
(245,904)
(747,570)
(522,312)
(235,736)
(303,747)
(210,718)
(205,271)
4,456,020
4,585,340
(351,865)
(375,022)
4,104,155
4,210,318
205,952
245,015
(174,109)
(181,392)
(2,898)
(3,482)
4,133,100
4,270,459
307,726
261,304
217,986
186,429
64,751
57,404
24,989
17,471
2,901,807
2,876,924
1,308,532
1,385,833
1,587,154
1,485,734
6,121
5,357
564,139
621,907
531,804
596,980
32,335
24,927
148,206
150,610
130,422
131,000
17,784
19,610
3,921,878
3,910,745
211,222
359,714
4,133,100
4,270,459
Management’s notes to the financial statements
Years ended December 31, 2012 and 2011
1
Operational context
EDP - Energias do Brasil S.A. (Company or Energias do Brasil or Parent company), corporation, publicly traded, incorporated on July 24, 2000,
headquartered in the municipality of São Paulo, has as its corporate purposes the participation in other corporations as a shareholder or quota holder,
as well as in businesses and enterprises in the electric power industry in Brazil or overseas; to manage electricity generation, transmission, distribution
and trading assets in their various forms and types; to study, plan, develop and implement electricity generation, transmission, distribution and
commercialization projects in their various forms and types.
The Company has direct and indirect interests in the following subsidiaries, jointly-controlled subsidiaries and associates (referred to as "Group"):
% interest
12/31/2012
Companies
Distribution
Bandeirante Energia S.A. (Bandeirante)
Espírito Santo Centrais Elétricas S.A. (Escelsa)
Generation
Energest S.A. (Energest)
Costa Rica Energética Ltda. (Costa Rica)
Pantanal Energética Ltda. (Pantanal)
Santa Fé Energia S.A. (Santa Fé)
Lajeado Energia S.A. (Lajeado)
Companhia Energética do Jari - (CEJA)
ECE Participações S.A. (ECE Participações)
Investco S.A. (Investco)
Enerpeixe S.A. (Enerpeixe)
Terra Verde Bioenergia Participações S.A. (Terra Verde)
EDP Renováveis Brasil S.A. (EDP Renováveis)
Consolidation
12/31/2011
Indirect
Direct
Indirect
full
full
full
full
full
full
full
full
full
full
by the equity method
100.00
100.00
100.00
55.86
100.00
60.00
92.00
45.00
51.00
100.00
100.00
100.00
40.78
-
100.00
100.00
100.00
55.86
100.00
60.00
92.00
45.00
51.00
100.00
100.00
100.00
40.78
-
Porto do Pecém Geração de Energia S.A. (Porto do Pecém)
proportional
50.00
-
50.00
-
Porto do Pecém Transportadora de Minérios S.A. (Pecém TM)
Pecém Operação e Manutenção de Unidades de Geração
Elétrica S.A. (Pecém OM)
proportional
50.00
-
50.00
-
proportional
50.00
-
50.00
-
Central Nacional de Energia Eólica S.A. (Cenaeel)
by the equity method by EDP
Renováveis
-
45.00
-
45.00
Elebrás Projetos S.A. (Elebrás)
Renováveis
-
45.00
-
45.00
Central Eólica Baixa do Feijão I S.A. (Feijão I)
Renováveis
-
45.00
-
45.00
Central Eólica Baixa do Feijão II S.A. (Feijão II)
Renováveis
-
45.00
-
45.00
Central Eólica Baixa do Feijão III S.A. (Feijão III)
Renováveis
-
45.00
-
45.00
Central Eólica Baixa do Feijão IV S.A. (Feijão IV)
Renováveis
-
45.00
-
45.00
Central Eólica Aventura S.A. (Aventura)
Renováveis
-
45.00
-
-
full
100.00
-
100.00
-
full
full
Trading
EDP - Comercialização e Serviços de Energia S.A. (EDP Comercializadora)
Transmission
Evrecy Participações Ltda. (Evrecy)
Other
Enercouto S.A. (Enercouto)
Escelsa Participações S.A. (Escelsapar)
Omega Engenharia e Assessoria Ltda (Omega)
1.1
Direct
full
-
-
100.00
-
full
full
full
100.00
100.00
100.00
-
100.00
100.00
100.00
-
Concessions
The Company has the right to indirectly explore the following power generation, distribution and transmission concessions/licenses/permits:
1.1.1
Under operation
Concession/ Authorization /
Record
Companies
Distribution
Bandeirante
Escelsa
Generation
Power Plants
-
State
SP
ES
Installed capacity (MWm)
Inception
Assured energy (MWm)
End
-
-
10/23/1998
7/17/1995
10/23/2028
7/17/2025
295.03
191.12
7/17/1995
5/19/2029
Energest
UHE's Mascarenhas, Suiça, Alegre, Fruteiras,
Jucu and Rio Bonito/ PCH's Viçosa and São
João
ES / MG
Pantanal
CGH's Coxim, São João I and São João II/
PCH Paraíso I/ UHE Assis Chateaubriand
MS
52.76
34.78
12/4/1997
12/23/2029
Santa Fé
PCH Francisco Gros
ES
29.00
16.40
11/13/2001
11/13/2031
Costa Rica
PCH Costa Rica
MS
16.00
11.67
11/5/2001
11/5/2031
Enerpeixe
UHE Peixe Angical
TO
498.75
280.50
11/7/2001
11/7/2036
Investco
UHE Luiz Eduardo Magalhães
TO
902.50
526.60
1/15/1998
1/15/2033
Cenaeel
UEE's Horizonte e Água Doce
SC
6.21
1.51
8/12/2002
12/11/2032
Elebrás
UEE Elebrás Cidreira I
RS
31.50
10.86
9/5/2002
9/5/2032
8
1.1.2
Under construction phase
Concession/ Authorization /
Record
Companies
Generation
(*) Porto do Pecém
ECE Participações
Power Plants
State
UTE Porto do Pecém I
CE
180.07
157.75
UHE Santo Antônio do Jari
PA / AP
373.40
217.70
Installed capacity (MWm)
Assured energy (MWm)
Inception
7/1/2008
End
7/1/2043
12/21/1987 12/31/2044
(*) Refers to the generating unit UG1 of the subsidiary under joint control Porto do Pecém, see note 3.1
Distribution
Concession contracts of the subsidiaries Bandeirante and Escelsa
The main obligations set forth in the concession agreements are as follows:
Concession grantor: inspection of the compliance with the contract; to ensure the adequate provision of the service; to extend the term of the contract to
ensure the quality of the service at adequate costs; to adjust the tariffs to ensure the economic and financial balance of the concession agreement; and,
upon the receipt of the concession, to refund, as provided for in the law, the portions of associated investments which are not amortized or not
depreciated on the date of the transfer, discounting, in the event of forfeiture, amounts of contractual fines and damage caused by Bandeirante and
Escelsa.
Bandeirante and Escelsa: to keep the record of assets and facilities continuously updated; to keep the equipment in perfect working condition, and to
have the technical conditions to ensure the continuity and efficiency of the services; to charge for the supply of electric power at the tariffs approved by
the Grantor; and to make the investments required to ensure the provision of the service.
Generation
Concession contract of the subsidiary Energest
Concession contracts of the Parent company (UHE`s Mascarenhas, Suiça, Alegre, Fruteiras, Jucú and Rio Bonito)
The term of the concessions of the UHEs of the parent company can be extended for a period of up to 20 years, pursuant to paragraph 20 of article 40
of Law 9074/95, worded by article 80 of Law 10848/04, based on the specific technical reports prepared by ANEEL inspectors, provided that the
Hydroelectric Power Plants are being operated in compliance with the conditions set forth in the related concession agreements and the legislation of
the electric power industry, and in a manner that properly protects the consumers' interests.
When operating the Hydroelectric Power Plants, the concessionaires will have considerable independence in the management of their businesses,
which includes measures related to investments, personnel, materials and technology, provided that they comply with the provisions of the concession
agreements, the standards of the electric power industry and the instructions of the Concession grantor and ANEEL.
The concession contracts of UHEs of the parent company establish that the price applicable to the electric power generated will be freely negotiated by
the concessionaires and buyers, pursuant to article 10 of Law 9648/98, and articles 27 and 28 of Law 10438/02, worded by Laws 10604/02 and
10848/04.
The concession contracts of the UHEs of the parent company establish that, once the concession term has ended, the assets and facilities linked to the
exploration of hydroelectric power plants can be returned to the Concession grantor, with the carrying out of the necessary analyses and appraisals, as
well as the determination of an indemnity due to the concessionaires, which is based on the dates and amounts of their respective incorporation into the
electric system.
Research and development - R&D
The Company shall annually apply the amount of one percent (1%) of its net operating income to research and development in the electric power
industry, pursuant to Law 9991/00, and as provided for in the specific regulations addressing this subject.
Concession contract of the subsidiary Pantanal (UHE Assis Chateaubriand)
The concession contract determines that, at the exclusive discretion of the Grantor, and for the purpose of ensuring the continuity and quality of the
electric power generated, the concession term can be extended for a period not exceeding its original term, at the request of the concessionaire.
When operating the Hydroelectric Power Plants, the concessionaires will have considerable independence in the management of their businesses,
which includes measures related to investments, personnel, materials and technology, provided that they comply with the provisions of the concession
The contract establishes that, in power sales, the concessionaire will apply the tariffs approved by the Concession grantor pursuant to the legislation to
be established for the electric industry and legislation that may be enacted after the execution of the agreement. Tariffs are adjusted annually.
The concession agreements establish that, once the concession term has ended, the assets and facilities linked to the exploration of hydroelectric
power plants can be returned to the Concession grantor (the Federal Government), with the carrying out of the necessary analyses and appraisals, as
well as the determination of an indemnity due to the concessionaires, which is based on the dates and amounts of their respective incorporation into the
electric system.
The subsidiary Pantanal shall annually apply the amount of one percent (1%) of its net operating income to research and development in the electric
power industry, pursuant to Law 9991/00, and as provided for in the specific regulations addressing this subject.
Authorizations of the parent company (PCH´s Viçosa and São João), of the subsidiaries Santa Fé (Francisco Gros), Pantanal (Paraíso) and
Costa Rica
The authorizations of PCHs will remain in force for a term of 30 years and may be extended at the discretion of ANEEL, pursuant to Article 7 of
Resolutions 110/99 and 111/99.
When operating the PCHs, the authorized concessionaires will have considerable independence in the management of their businesses, which includes
measures related to investments, personnel, materials and technology, provided that they comply with the provisions of the concession agreements, the
standards of the electric power industry and the instructions of the Concession grantor and ANEEL.
The power generated by the Authorized entity is intended to be marketed under the “independent production of electricity” modality, in accordance with
the conditions set forth in Articles 12, 15 and 16 of Law 9.074/95, regulated by Decree 2.003/96.
At the end of the duration of this Authorization, if there is no extension, the assets and facilities linked to the production of electricity will become the
property of the Federal Government, through compensation of investments realized, provided they have been previously authorized but not yet
amortized, as determined by an ANEEL audit.
9
Records of Subsidiary Pantanal (CGHs: Coxim, São João I & II)
Hydroelectric power plants with power production equal to or less than 1,000 kW are called hydroelectric generating stations, or CGHs, and are exempt
from concession, permission or authorization, but need only register with ANEEL, pursuant to article 8 of Law 9.074/95. The registration will remain in
force indefinitely, on a precarious basis, pursuant to Article 22 of ANEEL Resolution 395/98.
The electricity produced by the CGHs is intended to be sold exclusively on the regulated market.
Concession contract of the subsidiary Investco
Investco has the right to operate the assets of the Luís Eduardo Magalhães Hydroelectric Power Plant (Lajeado Power Plant) for a 35-year period
starting on the date of the publication in the Official Gazette (January 15, 1998) and ending on January 15, 2033, and the concession term may be
extended at the request of the concessionaires. The mentioned hydroelectric power plant is operating with five turbines, with a capacity of 180.5 MW
each, with a total installed capacity of 902.5MW and an assured capacity of 701.4MW.
Of the total assured capacity, Investco will sell 617.48MW and 2,877,660MWh/year to electric power distribution concessionaires by the end of the
concession term. In the event Investco is unable to deliver the aforementioned electric power amount, it shall refund the market agents with which it has
commitments. At the end of the concession period, all assets and facilities linked to the Hydroelectric Power Plant will be incorporated into the Brazilian
Federal Government's assets, and the concessionaires will be refunded for any investments made and not yet amortized, provided that the latter have
been authorized by ANEEL and subjected to an ANEEL audit.
Investco is the sole owner of the assets that comprise the Lajeado hydroelectric power plant, but is not the exclusive holder of the concession
agreement. The concession of the Lajeado hydroelectric power plant is jointly held by: CEB Lajeado S.A. - holder of 19.80%, Lajeado Energia S.A. holder of 72.27%, Paulista Lajeado Energia S.A. - holder of 6.93% and Investco - holder of 1%. Therefore, the aforementioned companies, together with
Investco, are the concessionaires of the Lajeado hydroelectric power plant.
The electric power generated by the Lajeado hydroelectric power plant is used and traded on an "Independent Producer" basis, pursuant to the
provisions of the concession agreement, by the aforementioned concessionaires, in proportion to their respective interests in the concession agreement.
A lease agreement was entered into for the assets of the Lajeado hydroelectric power plant with the concessionaires of this power plant, under which
the lease is proportionate to the concessionaires' interest in the concession agreement. Therefore, in addition to the revenue accrued from the trading of
electric power proportionately to its interest in the concession agreement, Investco also accrues revenue from the lease of the assets of the Lajeado
hydroelectric power plant.
As payment for the use of the public property which is the subject matter of this contract, Investco will pay to the Federal Government, as from the startup of the operations of the first generating unit and throughout the period it is operating the Hydroelectric Power Plant, annual amounts, payable in
monthly installments corresponding to 1/12th of the amount of R$1,351, annually adjusted for inflation based on the variation of the General Market
Price Index (IGP-M). The non-payment of six monthly consecutive installments will entail the forfeiture of the concession, at the discretion of ANEEL.
industry, pursuant to Law 9991/00, and as provided for in the specific regulations addressing this subject.
Concession contract of the subsidiary ECE Participações
The initial concession term provided for a 30-year period starting on December 21, 1987, the date of the publication of the concession notice. The 4th
addendum dated January 23, 2012 extended the concession term up to December 31, 2044.
The concession term can be extended based on the specific technical reports prepared by ANEEL inspectors, at the discretion of ANEEL, upon the
request of the concessionaire, provided that the hydroelectric power plant is being operated in compliance with the conditions set forth in the related
concession agreement and the legislation of the electric power industry, and in a manner that properly protects the consumers' interests.
When operating the Hydroelectric Power Plants, the concessionaire will have considerable independence in the management of its businesses, which
includes measures related to investments, personnel, materials and technology, provided that it complies with the provisions of the concession
The basic design of the UHE Jari was altered on July 27, 2011, by ANEEL Ruling n°3080, increasing from 300 MW to 373.4 MW of inst alled capacity.
The physical guarantee related to the 300MW capacity is 196.1 average MW, pursuant to Ordinance No. 34/10 of the Ministry of Mines and Energy
(MME).
On May 23, 2012, the Ministry of Mines and Energy, through MME Ordinance 35/12, published a review of the physical guarantee, rising from 196.1 to
217.7 average MW (Main Power House 214.5 average MW and Secondary Power House 3.2 average MW).
At auction A-5 held in December 2010, 190 average MW was sold, corresponding to a utilization factor of 65% of the installed capacity, already
approved by ANEEL for the 30-year period ending on December 31, 2044.
At the end of the concession period, all assets and facilities linked to the Hydroelectric Power Plant will be incorporated into the Brazilian Federal
Government's assets, and the concessionaires will be refunded for any investments made and not yet amortized, provided that the latter have been
authorized by ANEEL and subjected to an ANEEL audit.
As payment for the use of the public asset which is the subject matter of this contract, ECE Participações will pay to the Federal Government, as from
the start-up of the operations of the first generating unit and throughout the period it is operating the Hydroelectric Power Plant, annual amounts,
payable in monthly installments corresponding to 1/12th of the amount of R$574, annually adjusted for inflation based on the variation of the General
Market Price Index (IGP-M). The non-payment of six monthly consecutive installments will entail the forfeiture of the concession, at the discretion of
ANEEL.
industry, pursuant to Law 9991, and as provided for in the specific regulations addressing this subject.
10
Concession contracts of the subsidiary Enerpeixe
The concession term is 35 years starting from the date of the execution of the concession agreement (November 7, 2001). The concession term can be
extended based on the specific technical reports prepared by ANEEL inspectors, at the discretion of ANEEL, upon the request of the concessionaire,
provided that the hydroelectric power plant is being operated in compliance with the conditions set forth in the related concession agreement and the
legislation of the electric power industry, and in a manner that properly protects the consumers' interests. The request for an extension of the concession
term should be submitted within 36 months before the expiry of the concession agreement, together with proof of compliance with tax and social security
obligations, as well as with commitments and charges assumed with the Public Administration bodies of the electric power generation industry.
In the event the power generated is lower than the assured power and contracted and/or used capacity, Enerpeixe will have to refund the other agents
operating on an integrated basis for the remainder of the amounts contracted and/or used, pursuant to the legislation, criteria and standards of the
Control, Optimization and Computational Intelligence Group Applied to the Electric Power Systems (GCOI) in force, using tariffs defined by ANEEL. At
any time, to safeguard public interest and as provided for in the prevailing legislation, the Concession grantor can carry out an expropriation by paying a
previous indemnity to the concessionaires for assets which have not yet depreciated. The amount of the indemnity will be determined by audit to be
conducted by the Concession grantor. Should the forfeiture of the concession be declared, the Concession grantor will indemnify the concessionaires for
investments made during the contract term, but not yet amortized or depreciated, provided that these investments have been approved, deducting the
amounts of penalties and damages that may have arisen from the event that led to the forfeiture.
industry, pursuant to Law 9991, and as provided for in the specific regulations addressing this subject.
2
2.1
2.1.1
Preparation basis and accounting practices
Preparation basis
Statement of compliance
The consolidated financial statements were prepared according to the International Financial Reporting Standards (IFRS) issued by the
Accounting Standards Board - IASB and also in accordance with accounting practices adopted in Brazil.
International
The financial statements of the Parent Company were prepared in accordance with accounting practices adopted in Brazil, in compliance with the
provisions contained in the Corporation Law, and incorporates the changes introduced through Law nº 11638/07 and 11941/09, supplemented by the
new pronouncements, interpretations and guidelines of the Committee of Accounting Pronouncements (CPC), approved by resolutions of the Federal
Accounting Council (CFC) and Brazilian Securities Commission (CVM) and specific laws of the the Brazilian Power Regulatory Agency - ANEEL, when
they do not conflict with the accounting practices adopted in Brazil and/or international accounting practices.
The individual financial statements present investments in subsidiaries, joint ventures and associates accounted for using the equity method, in
conformity with Brazilian Corporate Law. Therefore, these individual financial statements are not considered to be fully consistent with IFRS, since IFRS
requires that these investments be measured in the Parent company's separate financial statement either at fair value or at cost.
Since there is no difference between consolidated shareholders' equity and consolidated net income attributable to the equity owners of the parent
company in the consolidated financial statements prepared under IFRS and BR GAAP, and the Parent Company's shareholders' equity and net income
in the parent company financial statements under BR GAAP, the Company elected to present the accompanying individual and consolidated financial
statements in a single set of information, side by side.
The Company's management authorized the completion of the preparation of financial statements on February 25, 2013.
Direct and indirect subsidiaries and the jointly-controlled subsidiaries are consolidated from the date of acquisition, which is the date on which the
Company obtains control, and will continue to be consolidated until the date when such control ceases.
2.1.2
Measurement basis
The individual and consolidated financial statements have been prepared under the historical cost convention, except for certain derivative financial
instruments measured at fair value, non-derivative financial instruments measured at fair value through profit or loss, and assets available for sale
measured at fair value.
2.1.3
Functional and presentation currency
The individual and consolidated financial statements are being presented in Brazilian Real, functional currency of the Company. All financial information
presented in Brazilian Reais has been rounded to the nearest value, except otherwise indicated.
2.2
Summary of significant accounting policies
The accounting practices described in detail below have been consistently applied by the Company and subsidiaries, jointly-controlled subsidiaries and
associated companies to the years presented in these individual and consolidated financial statements.
a) Cash and cash equivalents (Note 4)
Cash and cash equivalents include cash, bank deposits, and high-liquidity short-term investments, promptly convertible into a known sum of cash and
subject to low risk of change of market value, which are stated at fair value that corresponds to cost, plus interest accrued until the statement of financial
position date.
b) Accounts receivable
• Consumers and concessionaires (Note 5)
Trade accounts receivable are recorded in the amount billed, adjusted to present value when applicable, including the respective direct taxes which
include:
(i) The amounts billed to final consumers, concessionaires, distributors and trading companies of free energy, as well as the estimated revenue referring
to energy consumed and not billed;
(ii) The calculation of the present value is performed for scheduled payments of debts of consumers of the Company, based on the capital remuneration
rates, regulated by ANEEL and applied to the tariffs of electricity public service distributors (average remuneration rate of the investment). The contra
entry of the adjustments to present value of accounts receivable is against net income for the year (Note 5.4);
(iii) The amounts receivable relating to the energy traded in the Power Trading Board - CCEE (Note 5.1);
(iv) Allowance for doubtful accounts - The amounts were allocated pursuant to Accounting Instruction 6.3.2, of the Accounting Manual of the Electricity
Public Service, which defines as a standard the following provisioning terms for overdue credits: Residential - over 90 days, Business - over 180 days
and other classes - over 360 days. Furthermore, there is a careful analysis of the balance of Consumers and concessionaires, and the amount formed is
considered sufficient to cover possible losses in the realization of these assets.
11
• Indemnifiable financial assets (Note 15)
Subsidiaries Bandeirante and Escelsa recognize an amount receivable from the Concession grantor due to the unconditional right of receiving cash at
the end of the concession, as provided for in the contract, as indemnity for the construction services carried out and not received as service provisions
related to the concession. These financial assets are recorded at the New Replacement Value, as criteria established in the of the Concession grantor
based on the value of assets pertaining to the concession and that will be returned at the end of concession.
c) Inventories (Note 10)
The materials used in the construction of the concession infrastructure, operation and maintenance of service provision and the mineral coal of the jointcontrolled subsidiary Porto do Pecém are recorded at the average acquisition cost, not exceeding market value.
d) Investments (Note 14)
The financial statements of the parent company, the investments in subsidiaries and associated companies with a percentage of the voting capital
above 20% or with significant influence, and in other companies that are part of the same group or that are under common control, are valued by the
equity method.
• Subsidiaries
Subsidiaries are all entities (including special purpose entities) over which the Company has the power to govern the financial and operating policies,
generally accompanying a shareholding of more than one half of the voting rights (voting capital). The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases.
• Associated companies
Associates are all entities over which the Company has significant influence but not control, generally accompanying a shareholding of between 20%
and 50% of the voting rights. Investments in associates are accounted for under the equity method, and are initially recognized at cost. The Company's
investment in associates includes the goodwill identified on acquisition, net of any accumulated impairment losses.
The Company's share of the profits or losses of its associates is recognized in the statement of income, and the share of the movements in reserves is
recognized directly against the Company's shareholders' equity. When the Company's share of the losses of an associate is equal to or exceeds the
carrying amount of the investment, including any other receivables, the Company does not recognize any additional losses unless the Company has
assumed obligations or made payments to the associate.
• Jointly-controlled entities
Joint venture arrangements that involve the establishment of a separate entity in which each venturer has an interest are referred to as jointly-controlled
entities.
In the Parent Company's financial statements, investments in jointly-controlled entities are accounted for under the equity method.
Any goodwill arising from the acquisition of an interest in a jointly-controlled entity is accounted for in accordance with the Company's accounting policy
for goodwill resulting from a business combination.
Other investments that do not fit in the above categories are valued at acquisition cost, less provision for devaluation, when applicable.
• Concession right
According to ICPC 09, Concession Rights are classified as investments net of deferred taxes, in the parent company.
e) Investment properties (Note 16)
Investments in land and properties which are not part of the core operating activity of the subsidiaries are stated at acquisition cost, allowance for loss,
when applicable.
f) Infrastructure assets managed to the Concession Grantor (Notes 15 and 18)
Infrastructure assets managed to the Concession Grantor are being presented in the groups of indemnifiable financial assets, assets and intangible
assets, due to the implementation of CPCs. They are as follows:
Assets related to the concession
According to Articles 63 and 64 of Decree 41019/57, the assets and installations used in generation, transmission, distribution, including trading of
power, are related to these services and cannot be disposed, sold, assigned or mortgaged without prior and formal authorization of the Regulatory
Agency.
ANEEL Resolution 20 regulates the removal of fixed assets from the Power Public Service concessions, granting prior authorization to separate assets
not of use to the concession, when available for sale, determining that the amount from the sale should be deposited in a specific bank account for
reinvestment in the concession.
g) Property, plant and equipment (Note 17)
All generating companies' tangible assets and only tangible assets not related to the distribution companies' infrastructure are recorded in Property,
plant and equipment. Are accounted for at: i) acquisition costs plus nonrecoverable taxes on purchase; ii) any costs directly attributable to the
placement of the asset in the location and required operating conditions as intended by the Management; iii) financial charges relating to the financing
obtained from third parties, effectively invested in construction in service; iv) in thermal and wind power plants, at the initial estimate of costs for
disassembling and removing the item and restoring the location; and v) less accumulated depreciation and impairment losses.
The depreciation calculation basis is the asset's depreciable amount (acquisition cost less residual value). Depreciation is recognized in the income
statement on a straight line basis in accordance with the estimated useful life of each component of a property, plant and equipment item, as this
method best reflects the consumption pattern of future economic benefits incorporated into the asset. The depreciation rates for assets of hydroelectric
plants are in accordance with Normative Resolution 474/12 issued by ANEEL, new depreciation rates for assets in service were established, starting
January 01, 2012, altering Tables I and XVI of the Manual of Asset Control in the Electricity Sector (MCPSE), approved by Resolution 367/09. The
depreciation rates reflect the useful lives of the assets and are used by the Company to calculate the depreciation of its PP&E items.
The residual value is the asset's remaining Balance on the end of the concession, since, as established in the agreement entered into by the Company
and the Federal government, at the end of the concession, the assets will be transferred to the Federal government, which will indemnify the Company
for the assets not fully depreciated. When the indemnity at the end of the thermal and wind power concession is not possible, no residual value is
recognized and depreciation rates are adjusted so that all assets are depreciated within the concession. In the case of hydroelectric plants operating
under the “independent producer” system, the Company believes that there is a right to compensation of the residual value of the related and reversible
assets, supported by its legal advisors and considering the facts and circumstances available at the time. Any changes will be monitored and the
impacts of any such changes will be analyzed.
Depreciation methods and residual values are reviewed at the end of each year, possible adjustments are recognized as a change in accounting
estimates.
12
h) Intangible assets (Note 18)
Intangible assets include:
• Concession rights: the right of concessionaires of charging users for the power distribution system construction and by the use of infrastructure are
recorded as intangible assets at cost plus financial charges, when applicable. The use of the goodwill is recorded according to the concession
remaining term.
• Software: these are measured by the total cost of purchase, less amortization expenses.
• Concession rights - other: these are measured by the total cost of purchase, less amortization expenses.
• Development of projects: Are recognized as assets from the development stage, provided that they comply with the requirements defined in CPC 04
(R1).
• The permanent rights of use: are recorded at cost.
• Concession right - use of public property: refer to the right to explore joint hydropower plants and transmission systems of Enerpeixe and Investco,
compensated by monthly payments to the Federal Government, as agreement entered into by the parties. It is recognized at the total fair value of the
right to Use the Public Property until the end of the concession agreements and amortized according to its terms.
• Goodwill incorporated: refers to the spin-off portion of goodwill incorporated in the subsidiaries Bandeirante, Escelsa and Lajeado, resulting from the
acquisition of shares of the abovementioned Companies, which was accounted for in accordance with CVM Instructions nº 319/99 and 349/99 and ICPC
09 and, pursuant to the determination of ANEEL, is being realized by the curve between the expectation of future results and the concession period of
the Companies.
• Goodwill generated in a business combination: is recorded as the difference between the amount paid for the business acquired and the fair value of
the business.
Amortization is calculated on the asset amortizable amount (cost or other amount that replaces cost less residual value) and is recognized in income at
the straight-line method in relation to the estimated useful lives of intangible assets other than goodwill, beginning as of the date in which they are
available for use, as this method is the one that best reflects the consumption standard of future economic benefits incorporated to the asset. Useful
lives of intangible assets related to concession rights are lower than the remaining terms of concession contracts. Intangible assets with undefined
useful life are not amortized, but are tested annually for impairment, according to note 2.2.j below.
In accordance with the provisions of the Accounting Instructions of the Accounting Manual of the Electricity Public Service and in CVM Resolution
672/11, which approves the technical pronouncement CPC 20 (R1), the financial charges relating to the financing obtained from third parties, effectively
invested in Intangible assets in progress, are recorded in this subgroup as construction cost.
i) Environmental licenses (Notes 18 and 26)
Pre-construction and installation licenses obtained during planning and installation are recognized as plant costs, more specifically as dam costs,
according to ANEEL accounting guide, and depreciated over the useful lives of dams. As regards operation permits obtained after the enterprise
becomes operational, if environmental costs related to these licenses are paid before the license is obtained, the amount disbursed is recorded as
intangible asset - operation permits - and amortized over the license validity. If the license is obtained before disbursements, at the start of the license
period, the estimated disbursements are provisioned and recorded as intangible asset - operation permits - and amortized over the license period.
j) Impairment
Financial assets
Evaluated at the end of each year regarding recoverability. Considered as nonrecoverable assets when there are evidences that one or more events
occurred after the initial recognition of the financial asset that resulted in adverse effects on the estimated future cash flow of the investment.
Non-financial asset
The Management of the Company reviews the net book value of property, plant and equipment, investment property and intangible assets, including
goodwill and intangible assets, on an annual basis to identify whether there was any evidence of unrecoverable losses or evidence of the occurrence of
events or alterations in the circumstances indicating that the book value might not be recoverable.
When such evidence is identified, and the net book value exceeds the recoverable value, provision is recognized to adjust the net book value to the
recoverable value.
Goodwill and intangible assets with undefined useful life have the recovery of their book value tested annually regardless of any indication of loss of
value, when applicable.
k) Other current and non-current assets
These are presented at cost or realizable value, including, when applicable, income accrued up to the statement of financial position date.
l) Suppliers (Note 19)
Mainly includes balances payable to suppliers of electricity and of charges on the use of the electricity network.
m) Loans and financing, debt charges and debentures (Notes 20 and 21)
Loans, financing and debentures are stated at the net amount of transaction costs incurred and subsequently measured at the amortized cost using the
effective interest rate method or fair value.
Swap operations were recognized at fair value through profit or loss for the year.
n) Provisions (Note 26)
Contingencies (Note 26.1)
These are recognized in the statement of financial position as a result of a past event, and it is probable that an economic resource will be required to
settle the obligation and that can be reliably estimated. Provisions are recorded considering the best estimates of the risk specific to the liability.
13
Dismantling
Recognized when there is a legal or contract obligation at the end of the assets' useful lives. Accordingly, these type of provisions are recognized for
power and wind plants to cover responsibilities related to location and land replacement expenses. These provisions are calculated based on the
current value of corresponding future responsibilities and are recorded as a contra entry to an increase to respective property, plant and equipment, and
amortized on a straight-line basis over the expected average useful lives of the assets.
Provisions are subject to annual review, in accordance with estimated future responsibilities. The provision is adjusted at the end of each year and
recognized in the statement of income.
Contingent consideration (Note 26.3)
Contingent liabilities acquired from a business combination are initially measure at fair value on the acquisition date. At the closing of the year, these
liabilities are adjusted by the effective interest rate and variations of fair value.
o) Use of public property (Note 25)
It is a financial instrument stated at the amortized cost adjusted by IGP-M incurred through statement of financial position date.
It corresponds to the amounts established in the concession agreements as consideration for the right to operate the hydroelectric power plants and
associated transmission systems of Enerpeixe and Investco, calculated through the expiry of the concession agreements and recognized at present
value at the underlying rates provided for in the respective agreements.
p) Other current and non-current liabilities
Stated at the known or estimated amounts, plus, when applicable, the corresponding charges, monetary and exchange variations incurred up to the
statement of financial position date.
q) Income and social contribution taxes (Notes 7, 8 and 32)
The current income and social contribution taxes recorded in income are calculated in indirect subsidiaries Costa Rica, Pantanal and Santa Fé, based
on the deemed profit method, where income and social contribution tax bases were computed considering tax rates of 8% and 12%, respectively,
calculated on the amount of gross revenue in accordance with current legislation, and the current income tax is calculated in the parent company and
other subsidiaries considering taxable income at tax rate applicable under the current legislation, of 15%, with a surtax of 10% on taxable income
exceeding R$240 per year, and the current social contribution tax is calculated considering taxable income before income tax, at a tax rate of 9%. Both
considering the offsetting of tax loss carryforward and negative social contribution basis, limited to 30% of the taxable income, when applicable.
Deferred income and social contribution tax assets and liabilities were recorded, as of the tax loss carryforward, negative social contribution basis and
temporary differences and events resulting from the Law 11.638/07 RTT, considering the rates in force of the aforementioned taxes, in accordance with
the provisions of CVM Resolution 371/02, and consider past profitability record and expectations of future taxable income based on a technical viability
study.
As of the issuance of CPC Technical Statement n° 32, assets and liabilities of deferred income tax and social contribution are stated at their net amount.
Income and social contribution tax expenses comprise current and deferred taxes, are recognized in the income statement unless they relate to items
directly recognized in Shareholders' equity or Other comprehensive income.
On March 23, 2010, the subsidiary Escelsa obtained Incorporation Report 26/2010 from Superintendência do Desenvolvimento do Nordeste - SUDENE,
attesting to the fulfillment of all the legal conditions and requirements stipulated for recognition of the right to the reduction of 75% of the rate of Income
Tax and Non-Reimbursable Surcharges, calculated with a basis on the income from the exploration relating to the municipalities from the northern
region of the state, which are from the area of activity of SUDENE, for a period of 10 years as of the fiscal year 2010, filed at the Unit of the Brazilian
Internal Revenue Service - RFB, with jurisdiction over the municipality of its head office.
On December 22, 2009, the subsidiary Energest obtained from the Agency for the Development of the Northeast Region (SUDENE) Incentive-Granting
Report No. 176/2009, attesting to the compliance with all legal conditions and requirements for the recognition of the right to a 75% reduction in the
Income Tax rate and Additional non-reimbursable taxes calculated based on operating profit, on 33.08% of the revenue generated by the Mascarenhas
power plant located in the Municipality of Baixo Guandu in Espírito Santo State, corresponding to 28.16% of the Company's total revenue, for a ten-year
period beginning in the 2005 fiscal year.
In compliance with the determinations of Administrative Ruling 2091-A of December 28, 2007 of the Ministry of National Integration, entity that regulates
the benefit, the amount of unpaid income tax cannot be distributed to the partners or shareholders, which can only be be used for compensation of loss
or capital increase.
Since the year ended December 31, 2008, the Tax incentive reserve in subsidiary Enerpeixe has been comprised of tax incentives granted by the
Amazon Development Agency (ADA), referring to the reduction of the Corporate Income Tax (IRPJ) rate. The amount of this government subsidy is
being excluded from the calculation basis of the dividends, in accordance with article 195-A of Law 6,404/76 amended by Law 11,638/07.
r) Post-employment benefits (Note 22)
The Company and its subsidiaries have employee benefit plans of the defined contribution and defined benefit types, including pension and retirement
plans. The main benefit plans granted to the employees are described in notes 22.1, 22.2, 22.3, 22.4 and 22.5.
Pursuant to CVM Resolution 600/09, post employment benefit liabilities should be accounted for based on standards contained in CPC 33 of Accounting
Pronouncement Committee. To meet this requirement, the Company hired independent actuaries to conduct an actuarial appraisal of the benefits
according to the Projected Unit Credit Method, and the last was performed at the base date of December 31, 2012.
Actuarial gains and losses generated by adjustments and changes to actuarial assumptions of defined benefit plans are directly recognized in
Shareholders' equity under Other comprehensive income in the year.
The obligations of the defined contribution plans are recognized as personnel expenses in the statement of income for the period in which the services
are rendered.
s) Reserve for reversal and amortization
Refers to resourced derived from the Reserve for reversal and amortization, set up until December 31, 1971 under the terms of the regulation of SPEE
(Federal Decree 41019/57), applied by the subsidiary Bandeirante in the expansion of the Power Public Service, and interest of 5% per annum is
charged on the Fund for reversal, paid monthly. Its potential settlement will occur in accordance with determinations of the Concession grantor.
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t) Capital stock (Note 27)
Ordinary shares are classified as stock capital and any costs attributable to the issuance of shares and stock options are recognized as a deduction
from shareholders' equity, net of any tax effects.
Preferred shares are classified as shareholders' equity in case they are not redeemable, or only redeemable at the Company's discretion. Are not
entitled to vote and have preemptive rights in the settlement of its portion of capital.
Repurchased shares classified as treasury shares are recognized as a deduction to shareholders' equity, including corresponding acquisition costs.
When these shares are again made available to the market, the corresponding cost is deducted from shareholders' equity and excess or deficit is
transferred to retained earnings.
u) Dividends and interest on own capital (Note 28)
The distribution of dividends and interest on own capital are recognized as a liability in the Company's financial statements at the end of year, based on
the by-laws. However, any amounts above the mandatory minimum is only provisioned on the date in which they are approved by a Shareholders'
Meeting. The tax benefit of interest on own capital is recognized in the statement of income.
v) Income determination
Income and expenses are recognized on the accrual basis.
Revenue from electricity operations and services rendered is recognized in statement of income in accordance with its realization. Revenue is not
recognized if there are significant uncertainties as to its realization.
The billing of electric power to all consumers and concessionaires is processed monthly, in accordance with the reading calendar and supply
agreements, respectively.
The energy supplied and not billed, corresponding to the period lapsed between the date of the last reading and the closing of the statement of financial
position, is estimated and recognized as unbilled revenue.
The power supply is billed on a monthly basis for all concessionaires.
The recognition of construction revenue is directly associated with additions to intangible assets in progress (Concession right - Infrastructure), without
incorporating a profit margin into this construction activity in accordance with Technical Interpretation ICPC 01 (R1) - Concession Contracts.
Construction revenue arises from the allocation of the hours worked by the technical teams, materials used, measurement of outsourced services
rendered and other costs directly allocated to it.
Financial revenues include interest earned from interest earning bank deposits, hedge instrument gains, when applicable, and arrear charges on power
sold, which are recognized in the statement of income.
Financial expenses include interest, foreign exchange fluctuation and mark-to-market loans and financing and operating results swap and hedge, which
are recognized in income.
w) Use of estimate and judgment
In the preparation of individual and consolidated financial statements in accordance with Brazilian accounting practices and international accounting
practices, it is required by the Management of the Company and its subsidiaries to make estimated to record certain transactions that affect assets,
liabilities, income and expenses.
The final results of these transactions and information, at the time of their effective realization in subsequent periods, may differ from these estimates,
due to the lack of precision inherent to the process of their determination. The Company reviews the estimates and assumptions at least quarterly,
except for the Post-employment benefit plans which is reviewed on a 6-month basis and yearly for impairment losses.
The main estimates related to the financial statements refer to the recording of impacts resulting from: Provision for allowance for doubtful accounts;
Unbilled supply revenue; Transactions carried out in the sphere of the CCEE; Recovery of deferred income and social contribution taxes on tax loss
carryforward, negative basis and temporary differences; Measurement of financial instruments; Provisions for contingencies; Post-employment benefit
plans; Asset impairment test; Provisions for dismantling: Provision for contingent consideration; and Evaluation of the useful life of tangible and
intangible assets.
x) Financial instruments (Note 34)
Financial instruments are defined as any contract that originates a financial asset to the entity and a financial liability or equity instrument to another
entity.
Non-derivative financial instruments include Cash and cash equivalents, Pledges and restricted deposits, Accounts receivable and other receivables,
investments in debt and equity instruments, Loans, financing, Debentures and Suppliers, as well as accounts payable and Other liabilities. These
financial instruments are immediately recognized on negotiation date, that is, when the obligation or right is formalized, and are initially recorded at fair
value plus or less any directly attributable transaction costs. After the initial recognition, they are measured as described below:
· Instruments held to maturity
If the Company and/or its subsidiaries have the intention and capacity to hold to maturity their financial instruments, these are classified as held to
maturity. Investments held to maturity are measured by the amortized cost using the effective interest rate method, less any reductions in their
recoverable value.
· Instruments available for sale
The investments of the Company and/or its subsidiaries in equity instruments and instruments of certain assets relating to financial instruments are
classified as available for sale. Subsequent to initial recognition, they are valued at their fair value and their fluctuations, excepting reductions in their
recoverable value, and the differences in foreign currency of these instruments, are recognized directly in shareholders' equity, net of tax impacts. When
an investment is recognized, the gain or loss accumulated in shareholders' equity is transferred to statement of income.
· Financial instruments at fair value through profit or loss
An instrument is classified at fair value through profit and loss if it is held for trading, that is, designated as such upon initial recognition. Financial
instruments are recorded at fair value through profit or loss if the Company and/or its subsidiaries manages these investments and decides on
purchases and sale based in their fair value according to the investment risk management strategy documented by them. After initial recognition,
attributable transaction costs are recognized in statement of income when incurred.
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· Loans and receivables
Only non-derivative assets with fixed or determined payments that are not quoted in an active market are allocated to this category, initially recognized
at their fair value any attributable transaction cost. After initial recognition, loans and receivables are measured at amortized cost using the effective
interest method less any impairment losses.
· Derivative financial instruments
Derivative financial instruments are contracts with the following characteristics:
a) Their value changes as market changes affecting interest rates, foreign exchange rates, commodities prices, etc.;
b) No initial investment is required or the initial investment is much lower than the investment required for similar contracts in the market; and
c) They will always be settled in a future date.
Derivative financial instruments are recognized on their trade date at their fair value. Subsequently, the fair value of the derivative financial instruments
is reevaluated on a regular basis, while the gains and losses resulting from this revaluation are recorded in statement of income for the year, excepting
as refers to the cash flow hedge derivatives, where the accounting treatment depends on the transaction's effectiveness.
Hedge accounting
Beginning in 2008, the Company and its subsidiaries started qualifying certain financial instruments for hedge accounting. The hedge derivatives are
recorded at fair value and gains or losses are recognized according to the hedge accounting model adopted and for such the following requirements
were met:
i) there is formal documentation of the hedge on the start date of the relationship;
ii) the hedge is expected to be highly effective;
iii) the hedge effectiveness can be measured reliably;
iv) the hedge is evaluated on a continual basis and effectively determined as being highly effective throughout the useful life of the hedge accounting
structure period; and
v) in relation to the hedge of an anticipated transaction, this must be highly probable and must present exposure to cash flow variations that could
ultimately affect the statement of income.
The Company and its subsidiaries use financial instruments of hedge of the interest rate, and foreign exchange variation. The derivatives that do not
qualify as hedge derivatives are recorded as trading derivatives.
Cash flow hedge
The effective portion of fair value variations of derivatives designated and qualified as cash flow hedges is recognized in Shareholders' equity, as Other
comprehensive income. The gains or losses of the ineffective portion of the hedge relation are recognized by counter entry in statement of income for
the year, at the time the ineffectiveness occurs.
Amounts accumulated in shareholders' equity are recorded in the statement of income in the years in which the item affects results; however, when the
covered transaction results in the recognition of a non-financial asset or liability, gains and losses recorded in shareholders' equity are recognized as a
contra entry to the initial cost of the asset or liability.
When a hedge instrument expires or is sold, or when the hedge relation fails to fulfill the criteria for hedge accounting, any accumulated gain or loss
recorded in Shareholders' equity on the date is kept in Shareholders' equity until the foreseen transaction is recognized in net income. When the
transaction is not expected to take place, the accumulated gains or losses recorded by counter entry of shareholders' equity are immediately recognized
in the statement of income.
Effectiveness
For a hedge relation to be classified as such, its effectiveness should be demonstrated. Hence the Company and its subsidiaries carry out prospective
tests on the start date of the hedge relation and on each statement of financial position date and retroactively in order to demonstrate its effectiveness
and that alterations in the fair value of the hedged item are offset by alterations in the fair value of the hedge instrument, with respect to the hedged risk.
Any ineffectiveness is recognized in the statement of income as soon as it occurs.
Derecognition
Financial instruments are written-off provided that contract rights to cash flows expire, that is, the end of the right or obligation of receiving or delivering
cash or membership certificate is certain. For this situation, Management, based on consistent information, records the settlement.
The recognition may be equity instrument due to cancellation, payment, receipt or when the debts expire.
y) Foreign currency
Transactions in foreign currency, that is, all those that are not performed in the functional currency, are translated by the exchange rate of the dates of
each transaction. Monetary assets and liabilities in foreign currency are translated into the functional currency at the foreign exchange rate of the closing
date. Gains and losses of variations in the exchange rates on monetary assets and liabilities are recognized in the statement of income. Non-monetary
assets and liabilities acquired or contracted in foreign currency are translated with a basis on the exchange rates of the dates of the transactions or on
the dates of valuation at the fair value when this is used.
z) Business combination and goodwill
Business combinations are accounted for under the acquisition method. The consideration transferred for the acquisition of a subsidiary is the fair value
of the assets transferred, the liabilities incurred and the equity instruments issued by the Company. The consideration transferred includes the fair value
of any asset or liability resulting from a contingent consideration arrangement, when applicable. Acquisition-related costs are recognized in the
statement of income for the year as incurred. Identifiable assets acquired and the liabilities and contingent liabilities assumed in a business combination
are initially measured at their acquisition-date fair values. The Company recognizes the non-controlling interest in the acquiree at fair value or at the noncontrolling interest's proportionate share of the fair value of the acquiree's net assets. The measurement of the non-controlling interest is made on an
acquisition-by-acquisition basis.
Goodwill is the value exceeding the business combination cost regarding the interest of the acquiring company on the fair value of the acquired
company's assets and liabilities, that is, the exceeding amounts is the portion overpaid by the acquiring company due to expected future earnings of the
acquired company. In acquisitions in which the Company attributes fair value to non-controlling interests, the determination of goodwill also includes the
value of any non-controlling interest in the acquiree, and goodwill is determined considering the Company's and non-controlling interests.
16
The goodwill should not be amortized, but is subject to impairment test.
The negative goodwill is directly recognized in the statement of income by the acquiring company, when total fair values are higher than the amount
paid for the business.
aa) Lease agreements
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments
made for operating leases (net of any incentive received from the lessor) are charged to the statement of income at the straight-line basis over the lease
period.
ab) Concession contracts
The CPC issued in 2009, the Technical interpretation ICPC 01 (R1) – Concession contracts. This Interpretation was approved by CVM Resolution nº
677/11.
ICPC 01 (R1) is applicable to the public-private concession agreements in which the public entity controls or regulates the services rendered, with which
infrastructure, at which price and to whom the service should be rendered, and is also has possession of this infrastructure.
As concession agreements of the distributing companies of the Group have these characteristics, this interpretation is applicable. But the agreements of
the group's power plants have different characteristics, therefore, this interpretation is not applicable.
According to ICPC 01, the infrastructure classified in this interpretation cannot be recognized as property, plant and equipment because the
concessionaire does not control the underlying assets, and it is recognized in accordance with one of the accounting models provided for in the
interpretation, depending on the type of remuneration agreed on between the concessionaire and the concession grantor, according to the agreement
entered into by the parties, which are the financial asset model, intangible asset model and the bifurcated model.
For distribution companies, the bifurcated model is applied as the companies are remunerated (i) by the Concession Grantor, regarding the
infrastructure residual value at the end of the concession agreement and (ii) by users, regarding their portion of the construction work and of the service
rendered in relation to electricity supply.
ac) Income per share
The basic earnings per share is calculated based on net income for the year attributable to the Company's shareholders and the weighted average
value of ordinary shares outstanding in the respective period. Diluted earnings per share is calculated by the same indicators, and the average of
outstanding shares adjusted by instruments potentially convertible into share, with diluting effect, in accordance with CPC 41 - Income per share,
approved by CVM Resolution 636/10. There is no difference between Basic and Diluted earnings per share.
ad) Statements of added value
The Company prepared individual and consolidated statements of added value in accordance with the standards of technical pronouncement CPC 09 Statement of Added Value, which are presented as an integral part of the accounting information under accounting practices adopted in Brazil
applicable to publicly-held companies, whereas under IFRS they represent additional financial information.
2.3
Consolidated financial statements
The consolidated financial statements were prepared in accordance with the standards established by CPC 36 (R2) - Consolidated statements
approved by the CVM Resolution 668/11 covering the Company and its subsidiaries (as described in Note 14.2).
The main consolidation practices adopted were as follows:
• Elimination of the investment of the Parent company in the subsidiary companies and jointly-controlled subsidiaries;
• Elimination of the balances of accounts between the Parent company and its subsidiaries and Jointly-controlled subsidiaries and of the accounts
maintained among these subsidiary companies;
• Recognition of non-controlling interests in the statement of financial positions and in the statements of income;
• The Company presents its investments in jointly-controlled entities, in its consolidated financial statements, using the proportionate consolidation
method. The Company's share of the assets, liabilities and results of jointly-controlled entities are combined with the corresponding items in the
Company's consolidated financial statements, line by line;
• When a Company's subsidiary carries out transactions with its jointly-controlled subsidiaries, the resulting profits and losses are eliminated in the
Company's consolidated financial statements only to the extent of the Company's interest in the jointly-controlled subsidiary;
• Business combinations have been considered since September 2008, determining acquisition cost, recognizing and measuring all assumed assets
and liabilities, as well as non-controlling interests, recognizing and measuring goodwill for expected future earnings, all measured on acquisition date. If
the excess is negative, a gain is recognized in results for the year.
The jointly-controlled subsidiary Porto do Pecém is consolidated by the proportional method as from October 14, 2008 (Note 2.6.1);
Jointly-owned subsidiary Porto do Pecém Transportadora de Minérios is proportionally consolidated since April 29, 2011 (Note 2.6.2); and
Jointly-owned subsidiary Pecém Operação e Manutenção de Unidades de Geração Elétrica (Pecém Power Plant Operation and Maintenance
Company) is proportionally consolidated since June 1, 2011 (Note 2.6.3).
2.4
Presentation of segment information
Information per operating segment is presented consistently with the internal report provided for the operating decision maker. The main operating
decision maker, in charge of allocating funds and evaluating performance of operating segments is the Company's Executive Board, in charge of the
Group's strategic decision making (Note 38).
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2.5
New IFRS and IFRIC (IASB's International Financial Reporting Interpretations Committee) interpretations
Some of the standards and amendments to standards and interpretations issued by IASB have not yet become effective for the year ended December
31, 2012, therefore, they have not been applied in the preparation of these financial statements.
CPC has not issued the respective pronouncements and corresponding amendments to new and revised IFRS and IFRIC previously presented yet.
These pronouncements and amendments should be edited by CPC and approved by CVM up to their date of compulsory application, due to the
commitment of CPC and CVM of keeping the set of standards issued based on updates made by the IASB current.
New and revised standards and interpretations already issued by the IASB and not adopted by the Company
IFRS 9 Financial instruments
IFRS 9 – Financial Instruments, addresses the classification, measurement and recognition of financial assets and liabilities. IFRS 9 was issued in
November 2009 and revised in October 2010, replacing the portions of IAS 39 relating to the classification and measurement of financial instruments.
This standard requires the classification of financial assets, at initial recognition, in two categories: measured at fair value and measured at amortized
cost. The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial instruments. In
financial liabilities, the main change is that, in cases where the fair value option is adopted, the value resulting from this change in fair value due to
credit risk of the entity itself is recorded in other comprehensive P/L and not in the income statement, except when this results in accounting mismatch.
The Company is evaluating the impact of this standard, which will be applicable starting January 01, 2015.
IFRS 13 – Fair value measurement
IFRS 13 introduces a single basis of guidance for fair value measurements and disclosures of such information. The quantitative and qualitative
disclosures, based on the three-tier fair value hierarchy currently required for financial instruments, will be supplemented to include all assets and
liabilities within its scope. Company management believes that the adoption of this new standard may affect certain amounts reported on the financial
statements and result in more comprehensive disclosures on the financial statements. This standard is effective for years starting as of January 1, 2013.
New regulations and revisions on consolidation, equity interest agreements, and related disclosures
In May 2011, a package of five standards of consolidation, equity interest agreements, and related disclosures was issued, including IFRS 10, IFRS 11,
IFRS 12, IAS 27 (revised in 2011), and IAS 28 (also revised in 2011).
IFRS 10 - Consolidated financial statements
IFRS 10 replaces the portions of IAS 27 – Consolidated and Separate Financial Statements, dealing with consolidated financial statements and
incorporated into SIC-12 – Consolidation – Special Purpose Enterprises. This standard introduces the concept of control as the basis for consolidation.
This definition of control considers three elements: (a) power over an investee; (b) exposure, or rights, to variable returns from its interest in the
investee; and (c) ability to use its power over the investee to affect the value of returns to the investor. Comprehensive instructions were included in
IFRS 10 to address complex scenarios. This standard is effective for years starting as of January 1, 2013. Company management believes that IFRS 10
does not have a significant impact on the financial statements.
IFRS 11 – Joint Arrangements
IFRS 11 replaces IAS 31 – Interests in Joint Ventures, and addresses how equity interests should be classified where two or more parties have joint
control. This standard defines that equity interest agreements are classified as joint operations (recognition of assets and liabilities) or joint ventures
(equity method of accounting), according to the rights and obligations of the parties to the agreements. This standard is effective for fiscal years
beginning on or after January 01, 2013 and is in the process of impact assessment by Company management.
IFRS 12 – Disclosure of Interests in Other Entities
IFRS 12 requires comprehensive disclosure of information that enables users of financial statements to evaluate the nature and risks associated with
interests in other entities and the effects of such shareholdings on financial position, financial performance and cash flows.
Overall, the required disclosures are grouped into the broader categories mentioned below: Significant judgment and assumptions; Participations in
subsidiaries; Interests in joint arrangements and subsidiaries; Interests in unconsolidated structured entities. IFRS 12 lists specific examples and
additional disclosures that inform each of these disclosure objectives in more detail, including other guidance on the comprehensive disclosures
required.
This standard is effective for fiscal years beginning on or after January 01, 2013 and Company management believes that the impact of IFRS 12 is
basically an increase in disclosure.
Revisions of Pronouncements and Interpretations issued previously occurred in fiscal year 2012 and New Pronouncements, with adoption
required for January 01, 2013
CPC 18 (R2) Investment in associated company, subsidiary and jointly controlled venture (IAS 28)
Inclusion of reference to the Joint Venture. As with the previous version of CPC 18, this standard includes reference to Investment in Subsidiaries, which
is not included in the IAS 28 version (issued by the IASB), but is needed in Brazil due to the rule – contained in Brazilian Corporate Law – that on
individual financial statements, investment in subsidiaries must be valued by the equity method of accounting. Company management believes that
CPC 18 (R2) has no significant impact on the financial statements.
CPC 19 (R2) Joint Arrangements (IFRS 11)
The main changes included compatibilizations of text in order to produce the same accounting effects as the implementation of IFRS 11 - Joint
Arrangements, mandatory application thereof starts in 2013, and alter the original Pronouncement primarily regarding the elimination of the option to
consolidate the so-called investments in joint ventures and differentiation between a jointly controlled entity and joint operation agreements, as defined
in the Pronouncement. Company management is in the process of assessing the impacts of the standard.
CPC 33 (R1) Employee benefits (IAS 19)
The revision includes substantial changes in the text of IAS 19. The main modifications of this standard refer to defined benefit plans. Elimination of
usage of the “corridor method,” and only full recognition of actuarial gains and losses on the date of the financial statements in Other Comprehensive
Income shall be effective, a practice already used by the Company and its subsidiaries since the initial adoption of the IFRS in 2010. Aside from the full
recognition in P/L of past service costs, and the financial expense/revenue of the plan, which is now recognized at net value based in the discount rate.
The modifications to IAS 19 are effective for annual periods beginning January 01, 2013 and require retroactive adoption. The expected impacts are in
regard to the immediate recognition of costs of past services as an expense upon the change of the plan in substitution of the deferral against P/L.
In the subsidiaries Escelsa, Energest and Investco, the estimated impacts are a reduction in the opening balance sheet of January 01, 2012 of
R$ 29,766 and an increase in spending of Personnel for fiscal year 2012 of R$ 26,996, when presented comparatively with the financial statements for
the year ending December 31, 2013. In contrast, the amortization of past service cost at an amount of R$ 2,770 per year that would occur, in the
medium term, for another 14 fiscal years, will not further impact such spending.
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CPC 36 (R3) Consolidated financial statements (IFRS 10)
This standard requires the parent company to present its consolidated financial statements as if it were a single economic entity, replacing the
requirements previously contained in IAS 27 – Consolidated and Separate Financial Statements, and SIC 12 – Consolidation – Special Purpose
Entities. The details of the changes were identified in the IFRS 10. Company management believes that CPC 36 (R3) has no significant impact on the
financial statements.
CPC 45 Disclosure of Interests in Other Entities (IFRS 12)
The details of the changes were identified in the IFRS 12. Company management believes that CPC 45 has no significant impact on the financial
statements.
CPC 46 Disclosure of Interests in Other Entities (IFRS 13)
The details of the changes were identified in the IFRS 13. Company management expects that the adoption of this new standard may affect certain
amounts reported on the financial statements and result in more comprehensive disclosures on the financial statements.
New and revised standards and interpretations already issued by CPC – Committee of Accounting Pronouncements and adopted by the
Company
CPC 17 (R1) – Construction contracts (IAS 11)
The revision of this pronouncement does not change the essence of the original version. Only a few compatibilizations of text were made in order to
produce the same accounting effects as the application of IFRS.
CPC 18 (R2) Investment in associated company and subsidiaries (IAS 28)
The only modification refers to the change of item 22A and the inclusion of items 22B and 22C, with the proposal not to eliminate the results that – from
the viewpoint of consolidation – are considered not realized in the individual statements of a subsidiary, upon the sale of assets to the parent company
or other subsidiaries of the same group, in order to prevent that the interest of non-controlling shareholders in the selling subsidiary have their potential
dividends or receipts of profits deferred in time. Briefly, transactions that generate gains or losses between companies of the same group should not be
recognized in the parent company, nor on the consolidated statements, because they do not reflect changes at that level.
CPC 30 (R1) – Income (IAS 18)
The revision of this pronouncement introduced the latest changes made to international standards, and made adjustments and clarifications in order to
clarify any doubts as to accounting effects of the accounting harmonization for application of IFRS in Brazil. The Company evaluated the revision of this
CPC and there was no significant impact on the financial statements.
CPC 40 (R1) Financial instruments: Disclosures (IFRS 7)
The proposed revision of this pronouncement is substantially due to compatibilization of text in order to produce the same accounting effects as
application of IFRS 7. This review stresses qualitative disclosures in the context of quantitative disclosures, allowing users to make an association with
related disclosures, and thus form a broad understanding of the nature and extent of risks arising from financial instruments. It also changed the required
disclosures to help the users of financial statements to evaluate risk exposures regarding transfers of financial assets and the effect of these risks on the
entity’s financial position. This review does not include the changes resulting from IFRS 9, which will only be required by the IASB on January 01, 2015.
ICPC 01 (R1) – Concession contracts (IFRIC 12)
The main changes are in order to give clarity to the items of interpretation and to rename some of the subtitles. Paragraphs 28–30 that dealt with
submission and disclosure were excluded from ICPC 01 and added to ICPC 17, in paragraphs 6 and 7. The revision of ICPC 01 and issuance of ICPC
17 encompass the changes made by the IASB itself, including several compatibilizations of text in order to clarify that the intention of the ICPCs is to
produce the same accounting effects as application of IFRIC 12 and SIC 29. The revision brought no significant changes.
ICPC 08 (R1) – Calculating Dividend Payments
The revision of this interpretation is intended to supplement the original document by including topics of Brazilian Corporate Law (Law 6.404/76) in
relation to calculating the proposed payment of dividends or interest on equity to shareholders. The interpretation incorporated the concepts of CPC 25 Provisions, Contingent Liabilities and Contingent Assets, and determines that: the interim, fixed and minimum dividends owed to preferred shareholders,
and the profits earmarked for distribution as mandatory dividends (including in the form of IoE), actually represent an obligation extant on the balance
sheet date, because they represent a legal obligation, even if the dividends are declared after the reporting period to which the financial statements
refer. The remaining portion of distributable profits should figure as a withholding of profit, in a specific account, until approval thereof at the General
Shareholders’ Meeting.
ICPC 09 (R1) – Individual, separate and consolidated financial statements and Equity accounting
The revision of this interpretation stems from the public hearing process for CPC 18 (R2), in the items described above, which mean direct changes in
the Financial Statements. Additional changes were made in order to give further clarity to the items of interpretation, providing cross-references to items
correlated with other standards, as well as renaming some of the subtitles.
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2.6
Investments in jointly-controlled subsidiaries
2.6.1
Porto do Pecém
The subsidiary's statement of financial position as of December 31, 2012 and its financial statements for the year ended on December 31, 2012, jointly
with the the pre-operating phase of the Porto do Pecém, are presented as follows:
Statement of financial position on 12/31/2012 - Summarized
Liabilities
Assets
Current
442,064 Current liabilities
Non-current assets
304,426 Non-current
3,410,324 Shareholders' equity
Intangible assets
1,460
Total
2.6.2
4,158,274
Total
Statement of income on 12/31/2012 Summarized
471,408
2,464,000
1,222,866
4,158,274
Revenues
Operating expenses
Net financial result
IRPJ & CSLL
Net loss for the period
333,066
(525,932)
(20,892)
(96,518)
103,276
(207,000)
Porto do Pecém Transportadora de Minérios S.A.
The statement of financial position as of December 31, 2012 and its financial statements for the year ended on December 31, 2012, jointly with the the
pre-operating phase of the Porto do Pecém Transportadora de Minérios S.A., are presented as follows:
Assets
Liabilities
Current assets
80 Shareholders' equity
Intangible assets
Total
2.6.3
1,098
Total
420
678
1,098
Revenues
Operating expenses
1,558
(1,990)
56
(376)
Pecém Operação e Manutenção de Unidades de Geração Elétrica S.A.
The statement of financial position as of December 31, 2012 and the statement of income for the period ended on December 31, 2012 of the subsidiary
under joint ownership Pecém Operação e Manutenção de Unidades de Geração Elétrica S.A., in pre-operating phase, are presented as follows:
Assets
Liabilities
Current assets
Shareholders'
equity
Non-current assets
Total
2,984
Total
2,246
738
2,984
Operating expenses
(142)
(130)
(272)
The information related to contingent liabilities, commitments related to the Company's interests in the jointly controlled undertakings is provided for in
notes 26.1.2.2, 14 and 1, respectively.
2.7
Reclassifications in prior years
The following reclassifications, for purposes of comparability, were made in the amounts previously presented in the financial statements as of
December 31, 2011:
2.7.1
Statement of financial position
Parent company
The Company reclassified the assignment right in the amount of R$ 254,411 of the group Intangible Assets for Investment, because according to ICPC
09 the right to assignment must be treated at individual Companies as Investment and on the consolidated financial statements as Intangible Assets.
According to CPC 33, the Company reclassified the balance of net actuarial gains and losses of deferred Income Tax and Social Contribution taxes in
the amount of R$ 128,546 under the account heading of Other Comprehensive Income to the account heading of Profit Reserve.
Consolidated
The subsidiary Costa Rica made a reclassification between estimated Estimated employee benefits and social charges and Income and social
contribution taxes in the amount of R$354.
Iii) The jointly-controlled subsidiary Porto do Pecém Operação e Manutenção made a reclassification between Other current liabilities and Other longterm liabilities in the amount of R$241.
To adapt to CPC 32, the noncurrent deferred tax assets and liabilities were offset, generating a reclassification in the amount of R$ 46,327. This
reclassification occurred for the subsidiaries Enerpeixe, Energest and ECE.
The subsidiary Enerpeixe made a reclassification between Pledges and restricted deposits (Current assets for Non-current assets) in the amount of
R$43,915.
The subsidiary Lajeado made a reclassification in the balance of Accounts receivable of Rede Energia in the amount of R$ 4,948 from Current assets
for Non-current, for a better comparability of book balances.
According to CPC 33, the Company reclassified the balance of net actuarial gains and losses of deferred Income Tax and Social Contribution taxes in
the amount of R$ 128,546 under the account heading of Other Comprehensive Income to the account heading of Profit Reserve.
2.7.2
Statement of income
Consolidated
Construction income and costs: In accordance with Technical Pronouncement CPC 17, the amount of R$303,747 previously recorded on a net basis
within Operating Expenses was reclassified to Revenue from construction (Note 29) and Infrastructure construction costs (Note 30).
Reclassification of Financial income to Financial expenses in the amount of R$33,805.
Reclassification of Other expenses and Operating income to General and administrative expenses in the amount of R$425.
2.7.3
Statement of comprehensive income
Consolidated
Reclassification of Non-Controlling Interest in Net Income of the period for adaptation to CPC 36 (R2) - Consolidated Financial Statements.
20
2.7.4
Statement of added value
Parent company
The Company reclassified the Federal Taxes in the amount of R$ 236 for Remuneration of third-party capital - Lease payments.
Consolidated
To adapt to CPC 09, we reclassified the PIS and COFINS credits of the account heading Inputs Acquired from Third Parties in the amount of
R$ 356,392 (R$ 285,951 referring to Costs of purchased energy, R$ 66,427 referring to Power Grid Usage Charges, R$ 572 referring to Materials,
R$ 3,442 referring to Third-Party Services), Other Revenues in the amount of (R$ 6), as well as Depreciation and Amortization in the amount of
R$ 29,432, for Distribution of added value (R$ 400,625 related to Federal Taxes, (R$ 14,807) referring to lease payments) in the amount of R$ 380,669.
To conform to CPC 09, we reclassified Revenue relating to construction of company assets allocated to Generation of added value, in the amount of
R$ 411,563, previously reported net under the following account headings: Inputs Acquired from third parties in the amount of R$ 396,174 (R$ 218,773
referring to Materials, R$ 172,302 referring to Third-Party Services, R$ 1 referring to Insurance and R$ 5,098 referring to Other Operating Costs),
R$ 20,610 referring to Personnel (R$ 16,721 referring to direct Remuneration, R$ 3,142 referring to benefits, and R$ 747 referring to FGTS), and
R$ 513 referring to Federal Tax of the Distribution of Added Value line.
The subsidiary Lajeado made a reclassification of PIS and COFINS on Interest on Equity ( IoE) previously classified as a deduction from Financial
Income in the amount of R$ 953, reported on the DVA as Taxes, Fees and Contributions.
The subsidiaries Pecém and ECE made a reclassification of Other Income in the amount of R$ 88,088 for Interest (Referring to capitalized interest)
allocated in Distribution of Added Value.
In accordance with Technical Pronouncement CPC 17, construction costs and expenses, amounting to R$303,747, which was previously recorded on a
net basis within Revenue from construction was reclassified to Infrastructure construction costs, affecting the subsidiaries Bandeirante and Escelsa.
2.7.5
Statement of cash flow
Consolidated
The subsidiary Energest made a reclassification of Utilities Companies in the amount of R$ 13 for Provision for Doubtful Accounts and Net Losses in
income from operating activities.
Reclassification of PIS and COFINS previously allocated in the headings Depreciation and Amortization in the amount of R$ 303, of which R$ 190 were
allocated to the residual value of fixed assets and intangible assets written off, (R$ 231) in taxes and social contributions - adjustment for inflation,
(R$ 5,154) in taxes and social contributions compensable, R$ 1,580 in Other taxes and social contributions, and R$ 3,312 in income tax and social
contribution paid.
Reclassification of Taxes and social contributions from operating activities in the amount of R$ 7,498 for Taxes and social contributions - monetary
amortization in P/L of operating activities.
Iv) Reclassification of the monetary correction of Pledges and deposits restricted to litigations, in the amount of R$5,867, previously presented in
Pledges and restricted deposits (increase) decrease in operating assets. And to adapt to CPC 03, there was a reclassification of Escrow deposits in the
amount of (R$ 270), initially in allocated to operating assets, to financing activities.
Reclassification of R&D (MME and FNDCT) in the amount of R$9,390 from Regulatory and sector charges - Provision to Regulatory and sector charges
on the variation of operating liabilities.
Reclassification of use of public property in the amount of R$18,097 from operating activity to financing activity.
Reclassification of interest on adjustment of inflation - Tangara and Rede Energia from operating activities in the amount of R$ 3,312 to notes
receivable allocated in operational assets.
Exclusion of the effect of R$19,860 referring to the capitalization of charges which were previously recognized in additions to property, plant and
equipment and intangible assets, in the investment activity, and in debt charges and inflation adjustment on borrowings and debentures in the operating
activity, since it does not represent an effective cash disbursement.
Reclassification of net book value of fixed assets in the amount of R$ 9,401 for Additions to PP&E, intangible assets and compensable financial assets
allocated in investment activity.
Reclassification of Escrow deposits in the amount of (R$ 270), originally allocated in operational assets for financing activities, for adaptation to CPC
03.
3
3.1
Events of the year
Change in the deployment schedule of the Pecém Thermoelectric Power Plant
On March 27, 2012, the Brazilian Power Regulatory Agency (ANEEL) approved an amendment to the schedule for the implementation of the thermal
power plant Energia Pecém ("Energia Pecém" or "development"), as well as the supply start date provided for in the Power Trading Agreements in the
Regulated Market (CCEAR). By unanimity, the entrance into operation of the two generating units of the Pecém I Thermal Power Plant was postponed
to up to July 23, 2012.
However, the jointly-controlled subsidiary Porto do Pecém will not be able to make the two turbines available for business operations, which will oblige it
to fulfill its power reserve replacement obligations set forth in the Power Trading Agreements in the Regulated Market (CCEAR) through the acquisition
of third parties' electric power contracts.
On July 12, 2012, due to the difficulties faced, the jointly-controlled subsidiary Porto do Pecém sent a letter to ANEEL requesting a letter to ANEEL
requesting that the Article 3, of Regulatory Resolution No. 165/05 and the approval of the monthly payment of the lower amount between: (i) the electric
power purchase agreement entered into by the plant to guarantee its sales in the Regulated Trading Environment; and (ii) the power price in the original
sales agreement, for Power Trading Agreements in the Regulated Environment (CCEARs) according to the availability, such as the cost the consumer
would have if the plant were operational. As of December 31, 2012, ANEEL has not made a decision on the request, however, considering the history of
approvals and discussions in the scope of the revision of REN No. 165/05, the minimum limiter of the CVU was considered for the payment of passthrough of acquisition cost. Thus, the loss of R$173,172 is being recorded at the subsidiary Porto do Pecém due to the impossibility of the full transfer of
the energy purchase cost of the collateral agreement; the Company expects this amount to be lower after this approval. The Company's amount
recognized in the consolidated was R$86,586 (50% of ownership interest).
On November 30, 2012, ANEEL – by means of Ruling n° 3811 – release d the UG1 generator unit, with 360,137 kW installed capacity, of the Porto do
Pecém I thermo electric plant, to begin commercial operation starting on December 1, 2012, when the energy produced by the generator unit is
expected to be available in the National Interconnected System, or “S.I.N.” (“Sistema Interligado Nacional”).
Unit II is in an advanced stage of commissioning, having already occurred boiler first fire and the steam blowing process. The next planned events are:
(i) testing the turbine and generator; (ii) testing of synchronization and (iii) operating service, see Note 40.6.
21
3.2
Sale of the subsidiary Evrecy Participações Ltda.
On May 28, 2012, the Company entered into an agreement for the sale of the total shares it held in Evrecy, representing 100% of this company's capital,
to CTEEP - Companhia de Transmissão de Energia Elétrica Paulista, for a total amount of R$58,000, to be paid in current local currency.
On December 11, 2012, ANEEL approved the sale of 100% of the shares in Evrecy, owned by the Company, to CTEEP.
On December 21, 2012, the sale of the investment in Evrecy to CTEEP was concluded, at a total amount of R$ 63,100, generating a gain of R$ 31,477
for the Company, recorded under the heading of General and Administrative Expenses – Other; see note on Operating Expenses (Note 10).
3.3
First periodic tariff review - Evrecy
The Transmission Concession Agreement No. 20/2008-ANEEL, alongside its First Amendment, sets forth in relation to Evrecy July 1, 2009 as the date
of the First Tariff Adjustment and the four-year review cycle. Included in the Adjustments are the Annual Adjustments as of July 1 of each year, adjusted
for the Allowed Annual Revenue - RAP of the previous year based on the IGPM index, plus or deducted from the Adjustment Installment determined in
the past 12 months.
Through Ratification Resolution 1313/12, ANEEL sets forth the RAPs of the electric power transmission concessionaires for the 1st Cycle from July 1,
2012 to June 30, 2013.
Evrecy's RAP for the first cycle from July 1, 2012 to June 30, 2013 is R$8,555.
3.4
Assumption of MABE Operations
On July 8, 2012, the Company and its partner MPX Energia S.A. (MPX) signed a purchase and sale contract for the symbolic amount of R$ 1.00, the
total shares of MABE Brasil Ltda. (MABE), in equal proportions. MABE belonged to the consortium made up of Maire Tecnimont Group (Tecnimont) and
the Efacec Group (Efacec). The purchase is subject to a variety of set of conditions precedent, which is emphasized is the approval of the Economic
Defense Council (CADE), after which the Company and MPX can jointly take over the management of the construction of the Energia Pecém, Itaqui and
Pecém II Thermal Power Plants, avoiding stoppages in the construction in service and ensuring the completion of the plants.
The Company and MPX agreed that Pecém II and Itaqui, developments fully controlled by MPX, will be managed exclusively by MPX, and the latter
must hold the Company harmless from any burdens, losses, contingencies, expenses, disbursements or costs, and take responsibility for losses and
damage directly related to these developments.
The structured transaction resulted in a commitment on the part of Tecnimont and Efacec to make a capital contribution of R$421,000 in MABE. In
addition, Tecnimont and Efacec continue to guarantee the performance of the plants by providing bank guarantees referring to the technical
performance of the units (without involving indemnity for delay) in the amount of R$411,000. It should also be mentioned that Tecnimont and Efacec
provided additional bank guarantees in the total amount of R$166,000 to cover potential contingencies.
In addition to the aforementioned amounts, Tecnimont and Efacec waived the amounts currently retained by the plants as performance bond, in the total
amount of R$185,000, R$100,000 of which refers to Pecém.
As of December 31, 2012, the above conditions had not been completely fulfilled and therefore the Company and MPX have not taken over the
management of MABE’s operations.
3.5
Return of the indirect subsidiary Couto Magalhães
ANEEL Dispatch No. 2.395, decided: (i) determine the forwarding to the Ministry of Mining and Energy - MME of the request formulated by the
concessionaires Enercouto and Rede Couto Magalhães Energia, members of the Ener-Rede Couto Magalhães consortium, for abolishment of the
concession of UHE Couto Magalhães, subject of the unnumbered Decree of April 2, 2002 and of Concession Agreement no. 21/02-ANEEL, with ruling
in favor of its granting, due to the occurrence of an Act of State characterizing an objective condition that renders the exploration of the hydraulic
potential impracticable, without any compensation to the Concessionaires; (ii) determine the forwarding to the Brazilian National Treasury - STN of the
request formulated by Enercouto S.A. and by Rede Couto Magalhães Energia, for abolishment of the collection of payments for Use of Public Property UBP, enforceable as from July 15, 2012, under the terms of the 1st Rider to Concession Agreement no. 21/02-ANEEL, with ruling in favor of its granting
or, at least, of the suspension of the collection until the final decision is handed down by MME, and (iii) determine that the guarantees presented by the
concessionaires are returned, in the case of a favorable pronouncement from MME and from STN regarding items (i) and (ii) above.
The Companies involved in the Ener-Rede Couto Magalhães consortium are analyzing the possibility of reimbursement of the investment already made,
for which reason the assets are still kept on record. The amount recorded as of December 31, 2012 in Enercouto is R$3,307, and R$3,211 for the
assets and R$96 for the intangible assets.
The request formulated by the concessionaires Enercouto and Rede Couto Magalhães are under analysis by the Ministry of Mining and Energy - MME.
3.6
2012 Tariff readjustment – Escelsa
ANEEL, in a Public Meeting held on July 31, 2012, approved the average annual tariff readjustment of 14.29%, to be applied to tariffs of Espírito Santo
Centrais Elétricas S.A. – ESCELSA (“EDP Escelsa”), as from August 7, 2012, with 6.78% relating to the annual economic tariff readjustment and 7.51%
referring to the pertinent financial components. Considering the financial adjustments already included in the EDP Escelsa's tariffs, related to the
recovery of prior periods, the average effect to be perceived by captive consumers will be 11.33%.
In the tariff readjustment process, ANEEL considers the variation of costs that the companies experienced over the course of the previous twelve
months. The calculation formula includes manageable costs (Portion B), which are subject to the incidence of IGP-M adjusted by X Factor and nonmanageable costs (Portion A), such as power purchased from generators, Fuel Consumption Account (CCC), Global Reversal Reserve (RGR),
inspection rate and transmission charges (Transportation of electricity), industry charges besides financial adjustments recognized by ANEEL in the
Portion A Items Variation Account (CVA) and other financial adjustments.
In the breakdown of the readjustment, applied in 2012 to EDP Escelsa, the components of Installment A, Installment B and financial readjustments
deserve special emphasis, as shown in the table below:
* Corresponding mainly to the balance of the Variation Account of Items of Installment A (CVA) and to the other financial items provided for in regulations.
22
3.7
Tariff review 2011 - Bandeirante
Approval Resolution ANEEL 1.365/12 approved the result of the Third Periodic Tariff Review – RTP.
The tariff repositioning is -1.85%, with -2.22% relating to the economic repositioning and 0.37% referring to the pertinent financial components.
Considering the financial adjustments already included in the tariffs of the subsidiary EDP Bandeirante, associated with the recovery relating to periods
prior to October 2011, the average effect on captive consumers will be -2.25%, whereas -0.79% is the average effect for high and medium voltage
consumers and -3.64% the average effect for low voltage consumers.
In the periodic tariff review process, which occurs every four years at EDP Bandeirante, ANEEL recalculates the parameters of the costs managed by
the Company (Portion B) that include the operating costs, evaluates the investments made (Regulatory Remuneration Basis - BRR) and the capital
remuneration. Non-manageable costs (Portion A), such as electricity purchased from generating companies, electricity transportation charges and
sectoral charges, following the example of the Fuel Consumption Account (CCC), Global Reversal Reserve (RGR) and inspection rate, besides financial
adjustments recognized by ANEEL in the Installment A Items Variation Account (CVA) and other financial adjustments, are considered on a basis of the
price variation in the previous twelve months.
The X Factor, as from this tariff review cycle, becomes a function of the Components "Pd" (productivity gains), "T" (trajectory to adaptation of operating
costs) and "Q" (incentive to quality), which were ratified in: “Pd" - 1.08%; “T” - 0.0% and "Q" to be determined as of the tariff adjustment of 2013.
In the composition of the tariff repositioning of 2011, subject of Public Hearing no. 055/12, the following components merit special emphasis:
Remuneration on Capital and Regulatory Reintegration Quota, derived from the ratified Regulatory Remuneration Base. The Gross Remuneration Base
is R$ 3 billion and the Net Remuneration Base is R$ 1.545 billion.
3.8
Tariff readjustment of 2012 - Bandeirante
At an ordinary public meeting of the board of executive officers held on October 16, 2012, ANEEL approved the annual tariff adjustment of 2012 of the
Company, to be applied as of October 23, 2012. The tariff adjustment is 11.45%, of which 7.60% relates to the economic repositioning and 3.85% to the
pertinent financial components.
In relation to the tariff practiced at present, ratified in the annual tariff adjustment of 2010, the average effect to be perceived by captive consumers,
already considering the tariff review of 2011 and the tariff adjustment of 2012, will be 7.29%, and the average effect for high and medium voltage
consumers is 7.82% while that for low voltage consumers is 6.82%.
The financial adjustment relating to the postponement of the Periodic Tariff Review of 2011 of the subsidiary Bandeirante, in the total amount of
R$78,000, will be divided into three annual portions, with the first included in this adjustment and the others in the subsequent adjustments.
In the tariff adjustment process, ANEEL considers the variation of the costs verified in the previous twelve months, i.e., from October 2011 to September
2012. The calculation formula includes manageable costs (Portion B), which are subject to the incidence of IGP-M adjusted by X Factor and nonmanageable costs (Portion A), such as power purchased from generators, charges (Transportation of electricity), industry charges besides financial
adjustments recognized by ANEEL, i.e, in the Portion A Items Variation Account (CVA) and other financial adjustments.
We present below a summary of the approved amounts, emphasizing the components of Portion A, Portion B and the financial adjustments:
EDP Bandeirante: Breakdown of the Tariff Adjustment of 2012
3.9
Agreement between EDP Cormecializadora and Ampla Energia e Serviços S.A. - Ampla
On November 12, 2012, an agreement was made between the subsidiary and Ampla in order to end the litigation between the parties concerning the
sentence handed down by the FGV Chamber of Conciliation and Arbitration. In order to solve the issue as a whole, the following actions were approved:
(i) payment, by AMPLA, of R$ 35,923 corresponding to the right acknowledged by the arbitration associated with the value of the price differences set
forth in the contract and the amount actually paid by AMPLA regarding to the period from January 01, 2004 to August 28, 2006; (ii) payment, by the
subsidiary, of R$ 14,923 through an increase in the prices in effect for 2012 for energy purchase agreements entered into; and (iii) maintenance of an
energy marketing agreement entered into between the parties on June 26, 2002 until the year 2022.
For the base date of December 31, 2012 after an agreement between the parties, the amount of R$ 35,923 will be paid in eight monthly installments.
3.10
Sale of energy Auction A-5 - UHE Santo Antônio do Jari
In the A-5 auction that occurred on December 14, 2012, the excess energy from the Santo Antonio do Jari HPP was sold, approved by ANEEL in July
2011, under the Regulated Contracting Scope, or “ACR” (Ambiente de Contratação Regulada) at 20.9 average MW.
3.11
Concession of Central Hídrica de Cachoeira Caldeirão
On December 14, 2012, in the A-5 auction held by ANEEL, the Company obtained the concession of the Cachoeira Caldeirão HPP will be built in the
state of Amapá, on the Araguari river. The project will have an installed capacity of 219 MW and electricity sold in the ACR scope, at 129.7 average
MW, and the marketing agreement (CCEAR) is expected to begin in January 2017, for a period of 30 years.
The total investment estimated is R$ 1.1 billion and the beginning of the works is estimated for 2013.
23
4
Parent company
Cash and banks
Interest earning bank deposits - fixed income
funds
Total
Consolidated
12/31/2012
62,025
37,029
12/31/2011
16,210
214,012
12/31/2012
310,503
261,875
12/31/2011
217,378
678,490
99,054
230,222
572,378
895,868
Highly liquid short-term financial investments are promptly convertible into a known sum of cash and are subject to an insignificant risk of change of
value. The Company and its subsidiaries are entitled to requesting advance redemption of said securities, without penalties or loss of profitability.
The Parent company’s financial investments refer substantially to bank deposit certificates and debentures, remunerated at rates that range between
98.0% and 103.0% of the Interbank Deposit Certificate (CDI). The average rate of the Group’s application ranges from 97.0% to 103.0%.
The calculation of the fair value of financial investments, when applicable, is based on the market quotations of the instrument, or market information
that permits this calculation, taking into consideration the future rates of similar instruments.
The Group's exposure to interest rate risks and a sensitivity analysis of financial assets and liabilities are disclosed in note 34.
5
Consolidated
Balances
due
Overdue
up to
90 days
Overdue
for more than
90 days
Total
Allowance
for doubtful
accounts
Net
balance on
12/31/2012
Net
balance on
12/31/2011
Current
Consumers
Billed supply
Residential
Industrial
Commerce, services and other
Rural
Government
Federal
State
Municipal
Public lighting
Public service
Free customers
Unbilled supply
Debt paid in installments
(+) Adjustment to present value
Other credits
0.00
0.00
131,724
37,398
66,524
12,758
0.00
5,216
7,152
10,330
14,782
13,156
44,581
297,660
61,426
(1,458)
28,748
0.00
0.00
119,815
39,884
39,968
9,188
0.00
347
477
5,169
5,026
723
0.00
0.00
7,491
0.00
0.00
0.00
0.00
20,508
39,443
14,314
3,625
0.00
67
420
5,719
2,678
593
0.00
0.00
55,123
0.00
1,493
0.00
0.00
272,047
116,725
120,806
25,571
0.00
5,630
8,049
21,218
22,486
14,472
44,581
297,660
124,040
(1,458)
30,241
0.00
0.00
(20,508)
(19,180)
(8,093)
(335)
0.00
(35)
(365)
(173)
(214)
0.00
0.00
0.00
(69,082)
0.00
0.00
0.00
0.00
251,539
97,545
112,713
25,236
0.00
5,595
7,684
21,045
22,272
14,472
44,581
297,660
54,958
(1,458)
30,241
0.00
0.00
207,818
64,267
78,567
21,692
0.00
4,527
5,693
12,592
26,074
20,741
36,683
261,454
35,551
12
28,592
Concessionaires
Electricity supply
Short-term energy
Other
729,997
0.00
269,681
75,980
4,419
13,977
228,088
0.00
2,136
0.00
370
0.00
143,983
0.00
677
0.00
1,096
411
1,102,068
0.00
272,494
75,980
5,885
14,388
(117,985)
0.00
(522)
0.00
0.00
0.00
984,083
0.00
271,972
75,980
5,885
14,388
804,263
0.00
129,117
21,884
7,962
0.00
364,057
1,094,054
0.00
0.00
0.00
4,960
18
50,039
(13,507)
2,506
230,594
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-
2,184
146,167
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-
368,747
1,470,815
0.00
0.00
0.00
4,960
18
50,039
(13,507)
(522)
(118,507)
0.00
0.00
0.00
(3,209)
(18)
(3,118)
0.00
368,225
1,352,308
0.00
0.00
0.00
1,751
0.00
46,921
(13,507)
158,963
963,226
0.00
0.00
0.00
2,489
18
46,731
(10,821)
41,510
0.00
6,912
0.00
5,248
(6,345)
0.00
(6,912)
0.00
(119)
35,165
0.00
0.00
0.00
5,129
38,417
0.00
0.00
21,079
4,161
12,160
53,670
(7,031)
(13,376)
5,129
40,294
25,240
63,657
Total current
Non-current
Consumers
Billed supply
Industrial
Commerce, services and other
Debt paid in installments
(-) Adjustment to present value
Concessionaires
Short-term energy
Piratininga
Other
41,510
0.00
6,912
0.00
5,248
Total Non-current
12,160
53,670
24
5.1
5.2
Short-term energy
Refers mainly to the transactions of sale of energy, realized in the in the sphere of CCEE.
Concessionaire – Piratininga
On June 29, 2012, the Company performed a reconciliation of the accounts receivable from and payable to Companhia Piratininga de Força e Luz Piratininga, arising from the partial spin-off of the subsidiary Bandeirante on October 1, 2001, amounting to R$76,309 and R$76,538, respectively. The
amounts were adjusted for inflation as established in the spin-off protocol, and the R$ 229 difference was settled on the aforementioned date.
5.3
Concessionaires – Electricity supply
On November 12, 2012, an agreement was established between the subsidiary EDP Comercializadora and AMPLA, see Note 3.10. As a result of the
aforementioned agreement signed, a reversal of the allowance for doubtful accounts was made in the fiscal year, in the amount of R$ 35,923 to be paid
in eight monthly installments starting on January 31, 2013.
5.4
The adjustment to present value, as CPC 12, was calculated with a basis on the average remuneration of investment rate, applied by ANEEL in the tariff
reviews of the distributors. This rate is compatible with the nature, term and risks of similar transactions under market conditions. On December 31,
2012, it corresponded to 15.07% per annum and 11.36% per annum for Bandeirante (15.07% p.a. on December 31, 2011), affecting negatively the
result of distributors for the period positively by R$4,156 (positively by R$1,359 in 2011).
5.5.
Provision for allowance for doubtful accounts
The distributors of the subsidiaries Bandeirante and Escelsa, based on Accounting Instruction 6.3.2 of the Electricity Sector Accounting Manual,
established a provision for doubtful accounts:
i) Residential: overdue for more than 90 days;
ii) Commercial: overdue for more than 180 days; and
iii) Other classes: overdue for more than 360 days.
In the year, the Distributors carried out a revision of the criteria for calculating the Provision for Doubtful accounts of the debit installments, and started
to adopt the following criteria:
i) Low voltage costumers: installment past due for over 90 days, a provision is made at the full balance of the installments;
ii) Medium and high voltage customers: installment past due for over 60 days, a provision is made at the full balance of the installments;
iii) Government: installment past due for over 60 days, a provision is made at the full balance of the installments, deducting the amounts covered
through submission of the funds citation͘
The Company's exposure to credit risks is disclosed in Note 34.5.
6
Accounts receivable
Parent company
Current
12/31/2012
Consolidated
Non-current
12/31/2011
12/31/2012
Current
12/31/2011
Assignment of Credit - Tangará Energia S.A.
4,503
3,402
1,121
20,602
21,018
3,402
1,121
20,602
21,018
Other
Total
Non-current
12/31/2011
4,138
-
Assignment of Credit - Rede Energia S.A.
Preferred shares of classes "A", "B" and "C"
12/31/2012
12/31/2012
12/31/2011
10,548
13,832
10,776
10,065
27
27
4,530
4,165
21,324
23,897
Parent company
The amount of R$24,004 (R$22,139 on December 31, 2011) refers to preferred shares of classes "A", "B" and "C" issued by subsidiary Investco, which,
according to Article 8 of said subsidiary's by-laws, these preferred shares are entitled to the right of receiving a cumulative fixed annual dividend of 3%
on their respective interest in capital. Due to that feature, the shares were classified as a financial instrument in the category of loan and receivables
since they meet the definition of financial assets, since the subsidiary does not have the right to avoid the remittance of cash or other financial asset to
another entity, as established in paragraph 19 of CPC 39.
The estimate of fair value considered the conditions above for the payment of dividends. Annual dividend payment was considered until 2032 (end of
the concession) and discounted to present value at the rate of 8.70% p.a.
Consolidated
Assignment of Credit – Tangará Energia S.A. - Refers to the renegotiating balance of the Credit Assignment contract made by and between the
subsidiary Lajeado Energia S.A. and Tangará Energia S.A., on August 31, 2004, approved by ANEEL through Directive Releases nºs 467/00SFF/ANEEL and 1706/04-SFF/ANEEL, with the following conditions: Payment term of 120 months, a grace period of 18 months, and payment ending by
February 29, 2016, remuneration at 100% of interbank deposit certificate (CDI) rate, and a contract amount of R$18,199. A promissory note was
provided as guarantee by Tangará in the amount of the debit balance.
Cessão de crédito – Rede Energia S.A. - refers to the balance of the consolidation and renegotiating of the Credit Assignment contract made by and
between the subsidiary Lajeado and Caiuá Distribuição de Energia S.A., on December 31, 2006, approved by ANEEL through order nº 181/07 SFF/ANEEL, with the following conditions: payment term of 86 months, a grace period of 24 months, and payment ending by February 29, 2016,
remuneration at 100% of interbank deposit certificate (CDI) rate, plus interest of 2% per year, and a contract amount of R$23,532. A promissory note
was provided as guarantee by Caiuá in the amount of the debit balance.
25
7
Parent company
Assets - to offset
Income and social contribution taxes
PIS and COFINS
Withholding tax on financial investments
Income tax withheld in interest on equity
Other
Total
Current
Total
Balance at
12/31/2011
60,813
469
3,591
31,060
25
95,958
Addition
281
1,943
38,068
55
40,347
Monetary
restatement
5,092
5,092
Federal tax
offset
(35,503)
(351)
(254)
(36,108)
Transfer
33,183
(3,578)
(29,605)
-
95,958
95,958
Balance at
12/31/2012
63,585
399
1,956
39,269
80
105,289
105,289
105,289
Consolidated
Assets - to offset
Income and social
contribution taxes
ICMS
PIS and COFINS
PIS e COFINS - COSIT 27
Withholding tax on financial
investments
Income tax withheld in interest
on equity
Balance at
12/31/2011
ISS
Other
Total
Current
Non-current
Total
Addition
324,545
103,988
54,359
11,591
2,061
303,064
536,003
-
20,364
6,251
31,060
3,647
7,840
557,394
519,210
38,184
557,394
38,068
22,634
908,081
Monetary
restatement
Advances /
Payments
(1,241)
-
9,767
85
86
114,256
225
-
(121,455)
(319,458)
(143,553)
(9,564)
-
-
6,616
(1,056)
(1,241)
9,938
5,246
589
126,932
(254)
(2,807)
(11)
(598,158)
21
(511)
(441)
Addition
1,243
(5)
19,236
146
Monetary
restatement
-
Tax offset
(354)
(18,485)
-
Reclassificati
on
2
Write-offs
Federal tax
offset
Reclassificati
on
Transfer
Sale of
companies
Balance at
12/31/2012
(148)
(1,959)
-
(138,360)
(343,819)
-
2,156
(16,851)
(80)
17,400
(29,605)
(5,061)
(533,696)
(147)
(227)
44,515
861
25,333
468,582
404,812
63,770
468,582
-
189,425
87,819
101,116
2,113
Parent company
Payable - Liabilities
ICMS on rate differential
PIS and COFINS
ISS
PIS, COFINS and Social Contribution - On
services rendered by third-parties
Income tax withheld at source in third - party
services
Tax installment payment - Law No. 11,941/09
Refis - conversion to income
Other
Total
Current
Non-current
Balance at
12/31/2011
354
5
18,370
-
Payments
(141)
Balance at
12/31/2012
1,243
19,121
7
30
738
-
(731)
-
-
37
102
17,269
693
19,563
-
(667)
-
(17,269)
-
126
19,563
43,402
4,446
691
84,669
11,367
52,981
2,955
217
3,172
(3,521)
(11,152)
(16,212)
(36,108)
-
42,836
4,663
906
88,502
(2)
40,203
44,466
84,669
44,623
43,879
88,502
Consolidated
Payable - Liabilities
Income and social
contribution taxes
ICMS on rate differential
ICMS
PIS and COFINS
ISS
PIS, COFINS and Social Contribution - On
services rendered by third-parties
Income tax withheld at source in third - party
services
Tax installment payment - Law No. 11,941/09
Refis - conversion to income
Other
Total
Current
Non-current
7.1
Balance at
12/31/2011
Addition
217,274
289
143,576
87,383
794
147,284
3,227
1,627,519
964,130
9,169
503
4,690
296
2,373
58,358
69,835
128,489
39,672
11,313
687,947
113,432
2,941,659
Monetary
restatement
-
Tax offset
Reclassificati
on
(37,240)
(2,921)
(1,309,299)
(361,271)
(4,893)
(4,635)
(319,458)
(236,275)
(2,807)
(5)
(30)
109
(635)
1
(4,365)
(310)
(19)
1
(1,992)
(223)
(8)
(23,494)
(34,863)
(33,953)
(113,264)
(1,892,692)
(598,571)
8,166
2,301
10,469
551,130
136,817
687,947
Payments
178
(410)
Transfer
(189,865)
(343,773)
11
Sale of
companies
Balance at
12/31/2012
(73)
(26)
-
132,745
590
142,308
110,277
1,639
-
(47)
453
-
(15)
-
-
(11)
(533,638)
(106)
(267)
432
69,836
102,702
41,973
11,542
614,497
502,642
111,855
614,497
Income and social contribution taxes - Parent company
The recorded amounts refer mostly to tax withholdings at source and respective restatements based on the Selic (Central Bank) rate, for prior periods.
26
7.2
PIS and COFINS
As a result of the terms of article 32 of Provisional Measure 66/02, converted into Law 10.637 and of Normative Instruction 199/02, the electric
distributor Escelsa, as an agent member of the Power Trading Chamber - CCEE, exercised the option for the special taxation regime of PIS and of
COFINS on income earned in operations carried out within the sphere of that Institution.
The main effects refer to the calculation basis levied on the net positive results and on the continuity of the application of the rate of 0.65% and 3% for
PIS and COFINS, respectively.
7.3
ICMS
The subsidiary Bandeirante has a balance of R$71,180, which includes (i) ICMS (Value Added Tax on Sales and Services) credits arising from the
acquisition of assets in the amount of R$36,646, which, pursuant to paragraph 5 of section 20 of Supplementary Law 87/96 are offset at the rate of 1/48
per month; and (ii) R$34,534 referring to the purchase of ICMS credits from third parties to be offset against ICMS due on power sales. This transaction
is allowed by the State of São Paulo ICMS Regulation, Decree No. 54,249/09, in article 84 item II. The balance payable to the credit provider is shown
in Note 13.
7.4
Tax installment payment - Law 11941/09, Refis - conversion to income and PAEX
In 2009, the Company formally joined the program for the reduction and installment payment of federal taxes according to Law 11,941/09 of the Federal
Revenue Service, according to the Law 11941/09 - "REFIS IV". As of June 30, 2011, the Company, as well as its subsidiaries Bandeirante, Escelsa,
Energest and EDP Comercializadora realized the consolidation of the debts included in the installment plan.
Parent company
Out of the consolidated total amount of the debt of R$47,499 as of December 31, 2012, R$42,836 was split into 180 installments, of which 142
installments of R$302 remain to be paid, to be monthly restated by the SELIC rate, and for the remaining amount of R$4,663 there are judicial deposits
in the same amount, which expect appropriation by the Federal government (in accordance with article 32 of PGFN/RFB administrative ruling No.
06/09), and when that is done this liability will be written off.
Consolidated
Out of the consolidated total amount of the debt of R$144,675 as of December 31, 2012, R$102,902 was split into installments and will be monthly
restated by the SELIC rate and for the remaining R$41,973 there are judicial deposits in the amount of R$79,567, which await appropriation by the
Federal Government (in accordance with article 32 of PGFN/RFB administrative ruling No. 06/09), and when that is done, this liability will be written off.
Tax installment payment - PAEX
In September 2006, subsidiary Lajeado joined the Exceptional Installment Payment (PAEX) established by Provisional Act 303, of June 29, 2006, which
addresses the payment in installments of legal entities' debts with the Federal Revenue Service (SRF), the National Treasury Attorney General (PGFN)
and the National Institute of Social Security (INSS), in 130 monthly and successive installments (SRF/PGFN), adjusted to inflation at the long-term
interest rate (TJLP) for debts maturing until February 28, 2003, and in 120 monthly and successive installments (IRPJ, CSLL, COFINS, PIS, CPMF,
INSS and fine), adjusted to inflation at the SELIC rate for debts maturing from March 1, 2003 to December 31, 2005, recognized or not, enrolled or not
in the Government or INSS Debt Register, even if they are challenged in a lawsuit proposed by the taxpayer or under the tax foreclosure stage, or under
a previous installment plan, not fully paid, even if canceled for nonpayment.
The consolidated debt to be paid in 130 monthly installments, in accordance with the provisions of Article 1 of Provisional Act 303/06 is being paid since
September 2006. The debt balance bears monthly interest equivalent to TJLP variation.
In 2009, PAEX formally joined the program for the reduction and installment payment of taxes according to Law 11,941/09 of the Federal Revenue
Service - "REFIS IV". As of June 30, 2011, the Company realized the consolidation of the debts included in the installment plan.
8
8.1
Parent company
Parent company
Income
12/31/2011
12/31/2012
Nature of credits
IRPJ
CSLL
0.00
0.00
Total
Total
Tax losses
Negative social contribution basis
0.00
0.00
-
-
-
-
Temporary differences
0.00
0.00
0.00
0.00
MTM Rede shares
Total temporary differences
Income from deferred income tax and social
contribution
-
0.00
0.00
2011
IRPJ/CSLL
1,580
569
2,149
0.00
1,403
505
1,908
2,828
0.00
1,403
0.00
505
0.00
1,908
0.00
2,828
0.00
-
1,403
505
1,908
2,828
2,149
The change in the deferred Income Tax and Social Contribution assets and liabilities for the year was recorded as an offset to the credit in
Shareholders' Equity in the amount of R$920.
27
8.2
Consolidated
The tax credits detailed below, calculated on tax losses carry-forward, negative social contribution basis and other amounts constituting temporary
differences used for reducing the future tax burden, were recognized based on historical taxable profits and on budgets for generating taxable profits for
the next periods at the subsidiaries Energest, Lajeado, Porto do Pecém, Enerpeixe, Bandeirante, Escelsa, EDP Comercializadora within a maximum
period of 10 years.
Consolidated
Non-current assets
12/31/2011
12/31/2012
CSLL
Total
Total
12/31/2012
IRPJ
CSLL
Total
Income
12/31/2011
2012
2011
Total
IRPJ/CSLL
IRPJ/CSLL
Nature of credits
IRPJ
Tax losses
Negative social contribution basis
154,030
0.00
0.00
59,037
154,030
59,037
110,777
43,465
0.00
0.00
0.00
0.00
-
0.00
0.00
30,835
11,101
6,991
(4,363)
154,030
59,037
213,067
154,242
-
-
-
-
41,936
2,628
Temporary differences
Provision for allowance for doubtful accounts
28,544
10,275
38,819
53,635
(9)
(3)
(12)
0.00
(14,804)
4,331
12,161
4,378
16,539
13,195
(143)
(51)
(194)
0.00
2,787
2,005
Provision for tax, civil and labor risks
53,134
(2,744)
19,128
(988)
72,262
(3,732)
73,668
834
(631)
0.00
(224)
0.00
(855)
-
0.00
0.00
(551)
(4,566)
26,506
(3,678)
1,677
1,118
0.00
0.00
-
0.00
559
0.00
0.00
0.00
0.00
13
2,828
0.00
0.00
2,828
(16,575)
Provision for swap results
Provision for inventory losses
1,234
443
Provision for bonus - employees
0.00
0.00
0.00
0.00
MTM Rede shares
0.00
0.00
0.00
0.00
1,403
505
1,908
(90)
Total temporary differences
92,329
33,236
125,565
142,450
620
227
847
Post-employment benefits - PSAP
10,680
3,845
14,525
18,369
0.00
0.00
-
0.00
(3,844)
(3,908)
158,866
57,192
216,058
232,648
0.00
0.00
(16,590)
(16,489)
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Goodwill incorporated
Temporary differences - RTT
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
3,675
0.00
0.00
0.00
0.00
0.00
144
0.00
0.00
Construction in service - Intangible assets
(69)
0.00
(25)
0.00
(94)
0.00
88
0.00
0.00
6,821
0.00
2,456
Goodwill - CPC 15
0.00
0.00
0.00
0.00
292,598
0.00
(441)
Consumers - adjustment to present value
Financial charges - Recouponing
Loans and financing in foreign currency MTM
Goodwill amortization/depreciation - CPC 15
Environmental licenses - CPC 25
Use of public property - CPC 25
Fair value of indemnifiable financial assets ICPC 01
3,673
0.00
(216)
25,462
1,323
0.00
(78)
9,167
4,996
0.00
(294)
105,335
0.00
3,463
(181)
(5,814)
81
(3,475)
0.00
0.00
397,933
397,933
(9,252)
65
(34,952)
244
(28,802)
0.00
(2,749)
(10,387)
0.00
24,429
(9,219)
8,136
(34,829)
30,734
0.00
119,652
0.00
17,965
0.00
6,464
Employee benefits - CPC 33
145,514
65,517
0.00
0.00
16,889
0.00
0.00
0.00
(611)
(7,638)
38,519
0.00
-
Total temporary differences - RTT
132,833
47,823
180,656
244,288
284,225
102,319
386,544
Total deferred tax assets/ liabilities
Income from deferred income and social
contribution taxes
548,738
201,133
749,871
791,997
284,845
102,546
387,391
(464)
(144)
(25,700)
179
(25,610)
22,598
1,320
0.00
38,764
106,995
0.00
9,277
0.00
34,629
Financial instruments - CPC 39
Borrowing costs - CPC 20
-
29,087
0.00
93,288
6,149
(97)
13,614
(34,829)
(22,190)
0.00
(5,820)
0.00
19
0.00
0.00
465,882
468,710
7,362
(756)
6,252
0.00
0.00
(49,515)
9,931
(44,588)
21,249
The change in the deferred Income and Social Contribution tax assets and liabilities for the year was recorded as an offset to the credit for the year in
the amount of R$44,588 to the debit and credit in Shareholders' Equity in the amount of R$83,770.
28
8.2.1
8.2.2
Taxable credit arising from the Provision for the Pension Plan Deficit - PSAP
The taxable credit arising from the Provision for the Pension Plan Deficit - PSAP of Bandeirante, refers to the portion of liabilities related to benefits
exceeding assets relative to the Defined benefit pension plans at the Bandeirante subsidiary, the provision for which was effected on December 31,
2001 with a counterparty in Shareholders’ Equity, deductible on the occasion of the monthly payments, expected to be terminated in 2017.
The goodwill fiscal credit derives from:
a) during 2002, at subsidiary Bandeirante, as a result of the incorporation of the portion spin off from the former parent company Enerpaulo - Energia
Paulista Ltda., represented by the goodwill paid by Enerpaulo on the acquisition of shares issued by Bandeirante;
b) at the subsidiary Escelsa, from the merger that occurred in April 2005, of the spin-off portion of the Parent company Energias do Brasil, represented
by the goodwill paid by the merged companies EDP 2000 Participações Ltda. and EDP Investimentos Ltda. upon the acquisition of shares issued by
IVEN, which was parent company of Escelsa at the time; and
c) at the subsidiary Lajeado, from the takeover of the subsidiaries EDP Lajeado and Tocantins, which occurred in November 2009, represented by the
goodwill paid by the Company.
The amounts were accounted for according to CVM Instructions 319/99 and 349/99, and in accordance with ANEEL’s instructions, and used according
to the curve between the expectation of future results and the term of the companies’ concession. This translates into a future average annual tax credit
realization of R$6,003 to subsidiary Bandeirante up to 2027, R$1,955 to subsidiary Escelsa up to 2025, and R$ 5,030 to subsidiary Lajeado up to 2032.
8.2.3
8.2.4
Taxable credit arising from the Provision for the Payment of preferred shares
In December 2012, the subsidiary Investco reassessed the calculation of deferred income tax and social contribution on gains from the adoption of the
CPCs associated with the classification of preferred shares (Class PNA, PNB, and PNC) as financial instruments, in accordance with CPC 39, in such a
way as to adapt to the expectation of future realization.
Tax losses
Under the tax legislation in force, the tax loss and the negative basis of social contribution can be offset with future income, up to the limit of 30% of the
taxable income, and are not subject to a statutory limitation period.
8.2.5
Projection of future taxable income
The forecasted future taxable income indicates that the subsidiaries Bandeirante, Escelsa and Lajeado have a calculation basis sufficient to recover the
full balance of tax credits. The credits related to PSAP and goodwill, mentioned in Explanatory Notes 8.2.1 and 8.2.2, will be realized financially up to
2017 and 2032, respectively, according to the amortization standards of the amounts related to them.
The Management of the Company and its subsidiaries prepared a projection of future taxable income on December 31, 2012, also considering its
discounts at present value, demonstrating the capacity to realize these tax credits in the periods indicated and, for the subsidiaries Bandeirante,
Escelsa, Investco and Enerpeixe, as required by CVM Instruction nº 371, of June 27, 2002, aforesaid studies were approved by the respective Board of
Directors on February 19, 2013. These estimates are quarterly reviewed in order to allow the Company to record in its financial statements an eventual
alteration in the budget for recovery of these credits on a timely basis. Consequently, the estimates may not be realized in the future, in view of the
uncertainties inherent in these forecasts.
Based on the study, the Company and its subsidiaries expect to recover the deferred tax credits over the following years:
2013
129,430
2014
196,658
2015
150,387
2016
100,435
2017
74,311
from 2018 to
2020
from 2021 to
2022
Non-current
69,704
28,946
749,871
The values contained in the interval from 2021 and 2022 refer to temporary differences that will be realized until the end of the concession.
29
9
Related parties
The balances of assets and liabilities, as well as the transactions of the Company and its subsidiaries with its parent company, key management and
other related parties, which influenced the result of the year, in connection with related-party transactions, result from transactions performed under
normal market conditions presented as follows:
Parent company
Assets
Agreement's purpose
Transaction
date
Validity period
07/01/2012
0
3,476
07/01/2012
0
434
07/01/2012
0
211
Pantanal
07/01/2012
0
Investco
07/01/2012
0
Lajeado
07/01/2012
Santa Fé
Counterpart
12/31/2012
Income (expenses) for the
year
Liabilities
12/31/2011
2012
2011
12/31/2012
12/31/2011
680
-
-
3,476
6,760
129
-
-
436
990
33
-
-
211
522
214
41
-
-
214
541
475
87
-
-
475
964
0
344
65
-
-
344
666
07/01/2012
0
128
25
-
-
126
268
Evrecy
07/01/2012
0
-
8
-
-
40
95
Escelsa
07/01/2012
0
2,991
662
766
-
2,224
6,738
01/01/2011
from 01/01/2011 to 12/31/2014
238
176
-
107
2,817
1,785
01/01/2011
from 01/01/2011 to 12/31/2014
100
87
-
-
1,143
895
EDP
Comercializadora
01/01/2011
from 01/01/2011 to 12/31/2014
32
44
-
-
363
340
17
Related parties
Sharing of expenses with
Bandeirante
corporate managers, approved
by ANEEL through Order
Energest
205/13
EDP
Comercializa
dora
property rentals, condominium Bandeirante
expenses, telecommunications
expenses, approved by ANEEL
Energest
through order No. 1598/11.
Loan agreement - 100% of
CDI
Loan agreement - 102% of CDI
Loan agreement - 110% of CDI
Agreement of consulting
services
Enercouto
01/01/2011
from 01/01/2011 to 12/31/2014
2
1
-
-
22
ECE
Participações
01/01/2011
from 01/01/2011 to 12/31/2014
15
-
-
-
165
-
Instituto EDP
01/01/2011
from 01/01/2011 to 12/31/2014
8
-
-
-
75
-
Pantanal
01/01/2011
from 01/01/2011 to 12/31/2014
2
2
-
-
22
17
Investco
01/01/2011
from 01/01/2011 to 12/31/2014
12
8
-
-
136
85
Lajeado
01/01/2011
from 01/01/2011 to 12/31/2014
2
2
-
-
22
17
CEJA
01/01/2011
from 01/01/2011 to 12/31/2014
2
1
-
-
22
18
Evrecy
01/01/2011
from 01/01/2011 to 12/31/2014
-
1
-
-
21
17
Escelsa
01/01/2011
from 01/01/2011 to 12/31/2014
53
2
2
547
507
CESA
05/15/2003
from 05/15/2003 to 12/29/2011
-
-
-
-
-
3,650
Energest
05/15/2003
from 05/15/2003 to 03/21/2013
-
61,386
-
-
3,121
2,771
CEJA
8/10/2009
from 08/10/2009 to 04/08/2011
-
-
-
-
-
6
EDP
Comercializadora
11/9/2009
from 11/09/2009 to 11/09/2011
-
-
-
-
-
283
Escelsapar
6/27/2005
from 06/27/2005 to 11/29/2014
4,803
4,321
-
-
367
456
Investco
12/10/2009
from 12/10/2009 to 11/08/2012
-
5,519
-
-
406
622
Terra Verde
1/1/2010
from 01/01/2010 to 02/25/2013
7,895
7,271
-
-
623
788
Pecém OM
12/5/2011
from 12/05/2011 to 12/31/2013
718
341
-
-
38
-
Pecém
9/24/2012
from 9/24/2012 to 12/09/2015
133,489
-
-
-
1,325
-
158
Cenaeel
12/1/2011
from 12/01/2011 to 11/30/2012
80
235
-
-
52
235
Elebrás
12/1/2011
from 12/01/2011 to 11/30/2012
798
780
-
-
1,034
780
EDP Renováveis
12/1/2011
from 12/01/2011 to 11/30/2012
23
369
-
-
316
369
Agreement of pass-through of
Guarantee on loan contracts
EDP
Renováveis
Espanha
00/01/1900
0
1,277
-
-
-
1,277
-
Selling of assets
Terra Verde
1/15/2010
from 01/15/2010 to 01/15/2014
Total
Current
Non-current assets
30
6,647
6,647
-
-
-
-
164,469
89,079
768
109
21,460
31,202
10,698
15,638
153,771
73,441
768
109
164,469
89,079
768
109
Consolidated
Assets
Agreement's purpose
Counterpart
Transaction
date
Validity period
12/31/2012
Income (expenses) for the
year
Liabilities
12/31/2011
12/31/2012
12/31/2011
2012
2011
Related parties
Agreement of consulting
services
Debt confession record
between Instituto EDP and
Bandeirante, approved by
ANEEL through Order
3821/11.
EDP
Renováveis
12/1/2011
from 12/01/2011 to 11/30/2012
23
369
-
-
316
369
Cenaeel
12/1/2011
from 12/01/2011 to 11/30/2012
80
235
-
-
52
235
Elebrás
12/1/2011
from 12/01/2011 to 11/30/2012
798
780
-
-
1,034
780
Instituto EDP
10/1/2011
30/09/2012
558
838
-
-
64
29
1/1/2011
from 01/01/2011 to 12/31/2014
7
-
-
-
75
-
1/1/2011
from 01/01/2011 to 12/31/2014
1
1
-
-
-
-
property rentals, condominium Instituto EDP
expenses, telecommunications
expenses, approved by ANEEL
through order No. 1598/11.
EDP
Renováveis
Agreement of pass-through of
Guarantee on loan contracts
EDP
Renováveis
Espanha
1/0/1900
00/01/1900
1,277
-
-
-
1,277
-
CDI
Pecém
9/24/2012
from 9/24/2012 to 12/09/2015
66,744
-
-
-
663
-
CDI
Pecém OM
12/5/2011
from 12/05/2011 to 12/31/2013
359
-
-
-
19
-
69,847
359
69,488
69,847
2,223
2,223
2,223
-
-
3,500
1,413
Current
Non-current
As of January 1, 2011, the Company is responsible for contracting the expenses included in the sharing agreements, and to the Company there is the
allocation of expenses from the corporate managers. The expense-sharing agreements between the related parties are divided into two types:
a) The agreement approved by ANEEL Order No 1359/11, in force until December 7, 2011, sets forth the distribution of expenses with salaries and
payroll taxes of the Holding's corporate managers and employees that create policies and guidelines to be followed by the economic group's companies
and the appropriation is made based on the activities carried out by each party throughout the timesheet.
The request for approval of the 3rd Addendum to the Agreements for Activity Sharing and Expenditure Allocation after December 7, 2011 was not
consented by ANEEL, as communicated in the Dispatch No. 174 of January 18, 2012.
On May 22, 2012, Regulatory Resolution ANEEL no. 489 altered Regulatory Resolution 334/08, allowing, through analysis by ANEEL, the extension of
the consent already granted to human resource sharing agreements resulting from the segregation of activities established by Law 10848/04, of 2004,
until the new Regulatory Resolution that will govern hiring between related parties in the electricity industry, has taken effect.
On June 28, 2012, through Decision No. 2149, ANEEL approved the drafts of the 2nd and 3rd Addenda to the Agreement for Sharing of Activities and
Allocation of Expenditures, to be entered into between the Company and its Parent Companies, for the sharing of corporate managers, as requested in
document No. 48513.039848/2011-00, effective through the date established by the new sole paragraph of section 27 of Regulatory Resolution No.
334/08, amended by Regulatory Resolution No. 489/12.
ANEEL pronounced, through Circular Letter no. 883/12 dated September 11, 2012, that the concessionaires, licensees and authorized parties interested
in the extension of the period of consent granted by ANEEL, must imperatively file an expression of interest by October 11, 2012, for which reason the
Company requested adjustment of the Agreement for Sharing of Activities and Allocation of Expenditures on October 10, 2012, so that the agreement
only takes effect as of the date of July 1, 2012 and for the period from January 1, 2012 to June 30, 2012 fully assumed by the Company, effective
through the date established by the new sole paragraph of section 27 of Regulatory Resolution No. 334/08, amended by Regulatory Resolution No.
489/12, which were approved through ANEEL Ruling n° 205 of January 25, 2013.
b) The infrastructure sharing agreement approved by ANEEL through the Order 1598/11, in force for 48 months as of January 1, 2011, sets forth the
distribution of expenses with property rental, condominium expenses, and telecommunications expenses based on the meter used by each part at the
location that is the subject-matter of the agreement.
The transactions made with parties and that are reported as shared expenses and infrastructure with related parties were carried out in the normal
course of business, without any incremental profit margin.
9.1
Relationship of the Company with each party
The counterparties Bandeirante, Energest, EDP Comercializadora, Lajeado, Escelsa, Terra Verde, Escelsapar, Pecém OM, Pecém, Enercouto and
CEJA are direct subsidiaries of the Company.
The counterparties Pantanal, Investco, Costa Rica, Santa Fé and ECE Participações are Company's indirect subsidiaries.
The counterparties EDP Renováveis, Cenaeel, Elebrás and Instituto EDP are associated companies.
31
9.2
Management remuneration
9.2.1
Compensation policy or practice of the Board of Directors, Board of Officers, and Committees.
(I) - Proportion of each item in total compensation, referring to the year ended December 31, 2012
Board of Directors
Fixed Compensation: 100%
Board of Officers
Variable Compensation: 18%
The Fiscal Council
9.2.2
Total remuneration of the Board of Directors and the Board of Officers paid by the Company in the year ended December 31, 2012 (in R$)
Parent company
Board of
Directors
2012
Number of members
Fixed remuneration (in Reais)
Salary or direct compensation
Direct and indirect benefits (i)
Remuneration for participation in Committees
Social Charges
Variable Compensation (in Reais)
Bonus
Social Charges
Total amount of the remuneration, by body
4 (*)
708,000
410,000
n/a
180,000
118,000
n/a
n/a
n/a
708,000
Statutory
Board
4 (**)
2,416,785
1,925,117
94,380
n/a
397,288
544,800
450,000
94,800
2,961,585
The Fiscal
Council
3 (***)
110,261
91,884
n/a
n/a
18,377
n/a
n/a
n/a
110,261
Total
11
3,235,046
2,427,001
94,380
180,000
533,665
544,800
450,000
94,800
3,779,846
( n/a ) = Not applicable
(*) Out of the 08 positions of the Board of Directors, only 4 receive a compensation. The annual and overall remuneration of the members of the Board of Directors is up to R$840,000 for the period
from April 2012 to March 2013, as approved in the Ordinary General Meeting on April 10, 2012.
(**) Of the 06 positions of the Statutory Board, 4 receive compensation, and out of 4 members, 2 accumulate 2 functions (1 = Director Vice-President for Trading and Director Vice-President for
Generation and 2 = Officer, Vice-President of Finance and Investor Relations and Director Vice-President of Management Control). The annual and overall remuneration of the Board of Officers is up to
R$3,920,125 for the period from April 2012 to March 2013, as approved in the Ordinary General Meeting on April 10, 2012.
(*) Out of the 03 positions of the Fiscal Council, all receive compensation. The annual and overall remuneration of the members of the Board of Directors is up to R$42,409 for the period from April
2012 to March 2013, as approved in the Ordinary General Meeting on April 10, 2012.
(i) The Health Insurance, Dental Care, Drugstore Discount and Social Security and Meal voucher plans were calculated as benefits.
9.2.3
Maximum, minimum and average individual remuneration of members of the Board of Directors and Board of Officers at the period ended
December 31, 2012 (in R$)
Parent company
Board of
Directors
2012
Number of members
Amount of the highest individual remuneration
Amount of the lowest individual remuneration
Average amount of individual remuneration
10
4
288,000
60,000
177,000
Statutory
Board
4
1,327,798
246,883
592,317
Inventories
Consolidated
12/31/2012
Raw material - Coal
Raw material - Diesel oil
64,659
12/31/2011
25,112
1,347
1,374
Stockroom material
14,075
8,961
Wastes and scrap
28,776
31,348
Other
752
1,282
Total
109,609
68,077
32
The Fiscal
Council
3
36,754
36,754
36,754
11
Note
Judicial deposits
Total
26
34.2
Parent company
Non-current
Current liabilities
12/31/2012
12/31/2011
12/31/2012
12/31/2011
12,213
8,979
222
222
222
222
12,213
8,979
Consolidated
Non-current
Current liabilities
12/31/2012
12/31/2011
12/31/2012
12/31/2011
195,710
188,953
24,856
10,107
48,940
56,682
24,856
10,107
244,650
245,635
The balance of the pledges and restricted deposits' account presented in current and non-current of the consolidated refers basically to a portion of shortterm investments of the subsidiary Enerpeixe in the amount of R$53,758 (R$45,216 on December 31, 2011), maintained in a reserve account in
compliance with the financing agreements entered into on May 21, 2004 with BNDES and a bank consortium, recognized as part of the agreements'
guarantees and the short-term power transactions in CCEE.
12
Advances for future capital increases
Parent company
Enercouto
Omega
CEJA
Terra Verde
Total
13
Assets
Non-current assets
12/31/2012
12/31/2011
500
4,590
192,300
2,047
3,100
3,100
195,400
10,237
Other credits - Assets and Other accounts payable – Liabilities
Note
Other credits - Assets
Advances to employees
Advances to suppliers
Tariff modicity - low income
Expenditure to refund
Energy Efficiency Program
RGR to offset
Assets for sale
Services in progress
Services rendered to third parties
Deactivations and disposals in service
Infrastructure sharing
Derivative financial instruments
Other
Total
13.1
13.2
13.3
13.4
Other - Liabilities
Advances received - disposal of assets and rights
Public lighting contribution
Amounts payable to Piratininga
Sundry creditors - consumers
Payroll
Tariff modicity - low income
7.3
ICMS credit assignments
Interest on compulsory loan
Third party collection to be transferred
Amounts payable - Cable TV and Telephony
13.4
Other
Total
13.1
Parent company
Current liabilities
Non-current
12/31/2012
12/31/2011
12/31/2012
12/31/2011
Consolidated
Non-current
Current liabilities
12/31/2012
12/31/2011
12/31/2012
12/31/2011
250
62
1,477
1,789
350
3
62
183
598
14,291
14,291
13,012
13,012
1,370
8,036
4,477
10,209
428
45,170
104,083
14,633
1,815
1,428
31,247
222,896
1,383
5,671
420
10,192
428
134
128,084
6,492
5,265
1,353
2,415
161,837
18,453
987
12,594
14,293
46,327
18,453
1,143
7,033
13,182
39,811
994
3,748
4,742
828
4,562
5,390
449
449
264
264
55,419
15,213
11,170
7,418
1,250
22,042
358
2,941
25,345
141,156
13,459
14,672
13,933
5,762
3,483
44,273
358
5,302
2,928
10,179
114,349
10,017
72,410
82,427
21,079
10,017
7,400
38,496
Tariff modicity – low income
In compliance with Notification 1091/05, of the São Paulo State Sanitation and Power Regulatory Agency (ARSESP), through which the Regulatory
Agency determined the review of the criteria for the register of low income customers, Bandeirante recorded, in 2008, the amount of R$47,640 referring
to amounts to be returned to consumers. In 2010 the classification basis was adjusted and consequently the initial position changed to R$29,698. The
refund started being made as of March 2009, and the balance returnable to consumers on December 31, 2012 amounts to R$11,267 (R$13,500 on
December 31, 2011). Considering that the legislation and regulation of this matter provides for the refunding of part of these amounts through economic
subsidy, Bandeirante also recorded the amount receivable. Balance receivable upon full refund to clients on December 31, 2012 is R$18,453 (R$18,453
on December 31, 2011).
For inactive customers, measures are being taken to locate them and make the reimbursement.
33
13.2
Assets for sale
Of the total amount of R$ 45,170 on December 31, 2012, R$ 41,685 pertains to Escelsa, referring to the balance receivable regarding the sale of
property, according to the Real Estate Purchase & Sale Commitment signed by Escelsa, on November 27, 2012 with Campo Participações Imobiliárias
S/A., the object of which is commitment to sell the proportion of 85,300 m² of the property with a total area of 107,277.58 m² (Registered with the Real
Estate Registry Office in Serra/ES), located at Rodovia BR 101 Norte, 3450, Planalto de Carapina, Municipality of Serra, State of Espírito Santo. The
values proposed from the sale substantially exceeded the book value of the respective assets. The process of dismemberment and demobilization
should be completed within 180 days after the signing of the foregoing Instrument, which is the period foreseen for carrying out the transfer of the
property to the buyer. The gain from the sale of the property at the estimated amount of R$ 50 million will be recorded on the books at the time of
transfer of the risks and benefits in accordance with CPC 31.
13.3
Services in progress
Refer to cost of services rendered by subsidiaries to third parties and related parties, including personnel, material and service expenses, directly
related to the concession and that are calculated and recorded at the orders in progress method. The balance as of December 31, 2012 basically
comprises Research and Development – R&D projects and the Power Efficiency Program – PEE of subsidiaries Bandeirante and Escelsa. The
realization of such amounts for the orders in progress will occur upon conclusion of projects and the recording will be made against the provision for
Liabilities.
13.4
Other creditors and debtors - current and non-current
Refer to amounts receivable for the exchange of Company's shares with Empresa Energética de Mato Grosso do Sul S.A. - Enersul shares which
previously belonged to Grupo Rede Energia S.A., in the amount of R$11,036 (R$10,034 on December 31, 2011).
14
14.1
Investments
Movement of investments in the period
% Direct interest
Parent company
Balances on
12/31/2011
Investments
Bandeirante
Escelsa
Lajeado
Lajeado (Goodwill)
Enercouto
Enerpeixe
Energest
EDP Comercializadora
CEJA
Porto do Pecém (Note 2.6)
P. Pecém Transp. Minérios
(Note 2.6)
Pecém Operações e
Manutenção (Note 2.6)
EDP Renováveis
Omega
Evrecy
Other
Total
Additions
791,369
708,780
636,806
84,515
4,567
787,952
516,627
49,689
-
50,769
500
36,047
367,042
351,630
Write-offs
Equity
accounting
-
80,968
156,952
84,504
(3,057)
(257)
113,986
103,964
38,507
(15,009)
(45,806)
(126,602)
(84,710)
(116,460)
(122,708)
(27,400)
-
Other
comprehensive
income
(47,241)
(108,009)
(34)
(1,827)
(1,377)
-
Transfer for
provision for
unsecured
liability
Balances on
12/31/2012
12/31/2012
(21,038)
779,290
631,121
636,566
130,400
4,810
785,478
496,506
60,796
-
100.00
100.00
55.86
55.86
100.00
60.00
100.00
100.00
100.00
12/31/2011
100.00
100.00
55.86
55.86
100.00
60.00
100.00
100.00
100.00
-
(103,101)
-
(4,138)
-
611,433
50.00
50.00
-
-
(188)
-
-
-
338
50.00
50.00
292
213
-
(136)
-
-
-
369
50.00
50.00
25,730
5,103
27,857
5,320
4,012,175
66,345
4,740
510,244
89,176
9,829
-
45.00
100.00
100.00
-
45.00
100.00
100.00
-
526
(29,953)
(29,953)
(2,899)
(14)
5,755
459,975
Parent company
Concession right
Bandeirante
Enerpeixe
Lajeado Energia
Porto do Pecém (Note 2.6)
Pantanal
Total
Dividends /
JSCP
(interest on
own capital)
Balances on
12/31/2011
Amortization
24,417
2,882
74,312
3,590
9,292
114,493
(1,458)
(116)
(3,542)
(10)
(590)
(5,716)
Balances on
12/31/2012
22,959
2,766
70,770
3,580
8,702
108,777
34
(3,659)
(527,345)
(162,626)
(21,038)
5,320
4,241,432
Parent company
Goodwill
Lajeado Energia and Investco
Total
Balances on
12/31/2011
Balances on
12/31/2012
42,293
42,293
42,293
42,293
Parent company
Provision for unsecured liability
Escelsapar
CEJA
Terra Verde
Total
% Direct interest
Balances on
12/31/2011
Equity
accounting
Provision for
losses
Transfer for
provision for
unsecured
liability
1,516
6,716
17,250
25,482
1,557
21,339
574
(133)
(21,038)
-
3,073
7,017
17,691
23,470
(133)
(21,038)
27,781
Balances on
12/31/2012
12/31/2012
100.00
100.00
92.00
12/31/2011
100.00
100.00
92.00
The increases in the year refer to a capital increase in all subsidiaries.
Escelsapar
Escelsapar has a provision for unsecured liability in the amount of R$ 3,073 (R$ 1,516 on December 31, 2011).
Terra Verde
Terra Verde Bioenergia has provision for unsecured liability in the amount of R$16,236 (R$15,663 on December 31, 2011) and at the Company, a
provision for investment losses was recorded in the amount of R$1,455 (R$1,587 on December 31, 2011).
At the Extraordinary General Meeting of Terra Verde, held on September 14, 2010, the Company communicated its interest in definitely discontinuing
the implementation of the Terra Verde Project, and for this reason it presented to the meeting a proposal for dissolution of the company, but
Investimento Verde Participações Ltda., another shareholder, did not accept the proposal. In view of the mentioned fact, on September 20, 2010, the
Company filed a lawsuit for company dissolution, Lawsuit No. 5830020101846178 being processed at the 3rd Civil Court of São Paulo.
On December 22, 2011, the Company and Investimento Verde entered into an Agreement for Transaction and Other Covenants to suspend and,
consequently, settle the lawsuits and other controversies; this transaction involves the amount of R$6,500 thousand, adjusted for inflation on a daily pro
rata basis, by the General Market Price Index (IGP-M), to be disbursed by EDP as soon as the conditions precedent have been satisfied.
Consolidated
Balances on
12/31/2011
EDP Energias do Brasil
EDP Renováveis
Other
Lajeado
Other
Omega
Other
BBCE
Other investments
Enercouto
Total
Additions
0.00
25,730
5,320
0.00
0.00
55
0.00
0.00
520
0.00
0.00
0.00
0.00
0.00
1,271
0.00
66,345
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
200
0.00
0.00
0.00
32,896
66,545
Write-offs
Equity
accounting
Balances on
12/31/2012
0.00
0.00
(1)
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
(2,899)
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
89,176
5,319
0.00
0.00
55
0.00
0.00
520
0.00
0.00
200
0.00
0.00
1,271
(1)
(2,899)
96,541
Enertrade's stake in EDP Comercializadora no Balcão Brasileiro de Comercialização de Energia - BBCE
On December 15, 2011, at a Directors' Meeting of the Company, the acquisition of a lot of one thousand shares, in the amount of R$ 200, by EDP
Comercializadora was approved, which will allow the BBCE to hold a chair in the Board of Directors' of the new company. BBCE is a closely-held
corporation with a share capital of R$12 million (60 lots of 1000 shares) in which all Agents of the Free Contracting Environment (ACL) can invest. On
February 28, 2012, EDP Comercializadora made a capital contribution in BBCE was paid up in the amount of R$200.
35
(i) The total is 100 shares.
Company
Bandeirante
Enercouto
Energest
Enerpeixe
Escelsa
Escelsapar
CEJA
Lajeado
Porto do Pécem
Porto do Pecém Transportadora de Minérios S.A.
Pecém Operação e Manutenção de Unidades de Geração
Terra Verde (i)
EDP Renováveis
Evrecy
14.2 Direct interest on investments
12/31/2011
Ordinary /
Quotas
39,091,735
1
1,000,572
499,951
26,217
5,876
10
20,127
113,690
475,274
600
1
0.00
46,893
21,512
12/31/2012
Ordinary /
Quotas
39,091,735
1
1,000,572
499,951
26,217
5,876
10
20,127
113,690
475,274
600
1
46,893
-
Shares / Quotas owned by
the Company (In thousand)
100.00
100.00
100.00
60.00
100.00
100.00
100.00
100.00
55.86
50.00
50.00
50.00
92.00
45.00
0.00
Paid-up
capital stock
100.00
100.00
100.00
60.00
100.00
100.00
100.00
100.00
100.00
50.00
50.00
50.00
92.00
45.00
100.00
Voting capital
12/31/2012
100.00
100.00
100.00
60.00
100.00
100.00
100.00
100.00
55.86
50.00
50.00
50.00
92.00
45.00
100.00
Paid-up
capital stock
100.00
100.00
100.00
60.00
100.00
100.00
100.00
100.00
100.00
50.00
50.00
50.00
92.00
45.00
100.00
Voting capital
12/31/2011
% Company's ownership interest
ϯϲ
2,511,611
4,904
766,803
2,006,404
218,963
2,461,523
4,368
552,408
1,707,615
2,079,137
549
1,492
244
234,163
0.00
12/31/2012
2,577,538
5,077
776,131
2,076,504
166,382
2,209,340
5,381
418,665
1,704,577
1,718,441
679
841
244
189,769
29,747
12/31/2011
Total assets
1,732,322
93
270,299
697,274
158,167
1,830,402
7,441
559,426
206,131
1,467,704
210
1,123
17,891
35,992
0.00
12/31/2012
1,786,170
509
259,505
763,251
116,691
1,500,560
6,897
425,382
200,147
1,351,000
152
549
17,268
132,558
1,890
12/31/2011
Liabilities (Current and Noncurrent)
779,289
4,811
496,504
1,309,129
60,796
631,121
(3,073)
(7,018)
1,501,484
611,433
339
369
(17,647)
198,171
0.00
12/31/2012
791,368
4,568
516,626
1,313,253
49,691
708,780
(1,516)
(6,717)
1,504,430
367,441
527
292
(17,024)
57,211
27,857
12/31/2011
(Provision for unsecured
liability)
2,557,089
0.00
191,041
395,166
1,354,606
1,902,304
0.00
0.00
446,140
166,533
779
0.00
0.00
0.00
9,885
12/31/2012
2,584,707
0.00
143,274
357,914
921,735
1,647,749
0.00
0.00
427,329
0.00
406
0.00
0.00
0.00
6,518
12/31/2011
Revenues
80,968
(257)
103,963
189,977
38,506
156,952
(1,557)
(36,348)
(7,539)
(103,500)
(188)
(136)
(623)
(6,441)
5,755
12/31/2012
222,901
(177)
104,148
162,703
23,698
103,976
(731)
(7,144)
(6,145)
(35,820)
(74)
(259)
(11,856)
(7,738)
4,879
12/31/2011
Income for the year
DĂŶĂŐĞŵĞŶƚ͛ƐŶŽƚĞƐƚŽƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ
zĞĂƌƐĞŶĚĞĚĞĐĞŵďĞƌϯϭ͕ϮϬϭϮĂŶĚϮϬϭϭ
;ŵŽƵŶƚƐĞǆƉƌĞƐƐĞĚŝŶƚŚŽƵƐĂŶĚƐŽĨZĞĂŝƐ͕ƵŶůĞƐƐŽƚŚĞƌǁŝƐĞŝŶĚŝĐĂƚĞĚͿ
15
The subsidiaries Bandeirante and Escelsa have the balance of R$690,278 (R$483,082 on December 31, 2011, including the subsidiary Evrecy) in the non-current from the
Concession grantor related to the unconditional right of receiving cash at the end of concession, as indemnity for investments made and not recovered in the rendering of
services granted. These financial assets are valuated based on the historical residual value of assets pertaining to the concession and that will be reversible to the
Concession grantor at the end of concession.
On February 7, 2012, ANEEL issued the Normative Resolution 474, that established the new economic useful life to assets pertaining to the concession, converted into
annual depreciation rates with the retroactive application to January 1, 2012.
The Company's Management understands that this fact altered the terms and conditions of the concession agreement as regards the manner in which it will be remunerated
for the infrastructure investments linked to the rendering of the concession services.
Since ICPC 01 (R1) (IFRIC 12) does not address the accounting treatment applicable to this situation, the Company's Management exercised its judgment to apply an
accounting policy that reflected the economic essence of this change and adequately represented the financial position, as required by Accounting Pronouncement CPC 23
(IAS 8), item 10.
As a result of this analysis, the increase in the balance of indemnifiable financial assets, in the amount of R$3,979, calculated on January 1, 2012, was recorded as a contra
entry to the balance of intangible assets, to reflect the new portion to be directly recovered from the Concession grantor at the end of the concession period. As a result of this
accounting record, there was an equivalent reduction in the balance of intangible assets to adjust the portion to be recovered through the rendering of the concession services
(power sale). The implementation of this adjustment of the annual depreciation rates resulted in an increase in the average useful life of the Company's assets from 22 to 24
years.
Provisional Measure 579/12, converted into Law 12.783/13, in article 8, paragraph 2 thereof, establishes that in calculating the amount of compensation corresponding to the
portions of investments linked to reversible assets, as yet not amortized or not depreciated, shall be based on the methodology of replacement value new, based on the
criteria established in government regulations, which is why in December 2012 the subsidiaries Bandeirante and Escelsa carried out the accounting record of the amount of
the difference between the Replacement Value New and Corrected Historical Cost in the amount of R$ 102,439 in compensation for the reduction in the heading of
Replacement Value New in Operating Expenses (Note 30).
The movement in the year is as follows:
Net amount
on 12/31/2011
Transfer of
intangible
Additions
New replacement
value
Write-offs
Reclassification
Sale of company (*)
Net amount
on
12/31/2012
483,082
129,926
1,939
102,439
(6,300)
188
(20,996)
690,278
Total
483,082
129,926
1,939
102,439
(6,300)
188
(20,996)
690,278
Current
Non-current
482,285
690,278
483,082
690,278
-
797
(*) See Note 3.2
16
The balance of R$4,127 on December 31, 2012 (R$4,186 on December 31, 2011) refers to investments in land and properties that are not part of the Company's operating
activity but generate income. They are stated at acquisition cost.
According to an appraisal carried out by a specialized outsourced company, the fair value of these properties is R$24,336 (R$25,859 on December 31, 2011).
ϯϳ
17
Parent company
12/31/2012
Average
depreciation
rate %
Construction in service
Administration
Construction in service tangible
Machinery and equipment
Vehicles
Furniture and fixtures
Total construction in service
Administration
Liabilities related to the concession
Total property, plant and equipment
-
Historical cost
-
12/31/2011
Accumulated
depreciation
Net amount
-
-
Average
depreciation
rate %
-
Accumulated
depreciation
Historical cost
-
Net amount
-
-
6.25
8
(5)
3
10.00
8
(4)
4
12.64
14.29
6.25
-
1,281
1,281
1,590
4,160
(688)
(611)
(1,076)
(2,380)
593
670
514
1,780
10.00
20.00
10.00
4,160
3,224
3,224
(2,380)
-
1,780
3,224
3,224
-
1,043
1,272
1,591
3,914
3,914
1,253
1,253
(579)
(476)
(995)
(2,054)
(2,054)
-
464
796
596
1,860
1,860
1,253
1,253
-
-
-
-
-
7,384
(2,380)
5,004
-
-
-
5,167
(2,054)
3,113
Consolidated
12/31/2012
Average
depreciation
rate %
Generation
Land
Reservoirs, dams and water mains
Construction in service - tangible
Vehicles
Transmission
Land
Administration
Land
Construction in service tangible
Vehicles
Activities not linked to concession
Land
Distribution
Generation
Administration
Historical cost
12/31/2011
Accumulated
depreciation
Net amount
Average
depreciation
rate %
Historical cost
Accumulated
depreciation
Net amount
1.87
1.77
2.69
14.63
5.01
3.55
3.66
-
169,090
1,993,878
1,120,996
2,333,215
4,154
2,847
5,624,180
(329,795)
(179,311)
(392,683)
(3,095)
(1,325)
(906,209)
169,090
1,664,083
941,685
1,940,532
1,059
1,522
4,717,971
1.03
2.09
2.52
10.74
2.98
164,612
1,982,466
777,274
1,687,378
3,866
2,432
4,618,028
(289,330)
(161,397)
(347,526)
(2,613)
573
(800,293)
164,612
1,693,136
615,877
1,339,852
1,253
3,005
3,817,735
1
96
36,238
36,335
(53)
(10,424)
(10,477)
1
43
25,814
25,858
4.00
3.49
1
96
36,239
36,336
(49)
(9,144)
(9,193)
1
47
27,095
27,143
-
3,638
-
3,638
3.84
164
(43)
121
4.29
163
(36)
127
12.98
14.50
6.66
6.64
-
4,645
3,681
3,282
15,410
(2,386)
(1,825)
(2,008)
(6,262)
2,259
1,856
1,274
9,148
9.81
19.26
8.91
4,231
3,652
3,268
14,952
(1,956)
(1,383)
(1,819)
(5,194)
2,275
2,269
1,449
9,758
85
369
454
(257)
(257)
85
112
197
10.00
5,676,379
(923,205)
4,753,174
273
370
643
4,669,959
(234)
(234)
(814,914)
273
136
409
3,855,045
-
1
1,509,700
4,455
1,514,156
(7,800)
(7,800)
1
1,501,900
4,455
1,506,356
-
7,190,535
(931,005)
6,259,530
1,810,738
1,550
1,812,288
6,482,247
(7,800)
(7,800)
(822,714)
1,802,938
1,550
1,804,488
5,659,533
3,638
-
3,638
Property, plant and equipment in progress refer basically to investments in UTE Porto do Pecém, in the amount of R$878,258 (R$1,422,669 on December 31, 2011) and at
UHE Santo Antônio do Jari in the amount of R$426,602 and the repowering of UHE’s Lajeado, Mascarenhas and Tupirantis totaling R$56,869 (R$143,061 on December 31,
2011 refers to UHEs Mascarenhas and Tupirantins and PCH Rio Bonito).
The Transmission caption balance refer to property, plant and equipment items in service of the power generating company Costa Rica and Investco.
The amount of depreciation of construction in service refers to the provision for asset impairment at subsidiary Terra Verde, recorded until period end.
ϯϴ
Movements during the year are demonstrated as follow:
Parent company
Vehicles
Net total
Net amount
12/31/2011
4
464
796
596
1,860
1,253
Acquisitions
2,301
Transfer to
construction in
service/
Intangible assets
238
66
304
(324)
3,113
3,113
2,301
2,301
(20)
(20)
Depreciation
(1)
(109)
(159)
(82)
(351)
(351)
(351)
Write-offs
(33)
(33)
(6)
(39)
(39)
Net amount
12/31/2012
3
593
670
514
1,780
3,224
5,004
5,004
Consolidated
Net amount
12/31/2011
Land
Reservoirs, dams and water mains
Vehicles
17.1
168,525
1,693,075
616,053
1,369,280
3,521
4,591
3,855,045
1,804,488
5,659,533
Acquisitions
0.00
1
234
118
214
567
625,733
626,300
Capitalized
interest
Transfer to
construction in
service/ Intangible
assets
Depreciation
4,478
11,602
343,934
661,752
518
243
1,022,527
(1,020,225)
2,302
0.00
(40,652)
(17,896)
(58,771)
(1,120)
(2,192)
(120,631)
(120,631)
0.00
96,409
96,409
Net amount
Write-offs
Reclassification
0.00
(1)
(168)
(3,406)
(123)
(19)
(3,717)
(4,359)
(8,076)
(188)
5,364
(71)
(5,792)
0.00
70
(617)
4,309
3,692
12/31/2012
172,815
1,669,388
941,853
1,963,297
2,914
2,907
4,753,174
1,506,356
6,259,530
In the year, there were no evidences of unrecoverable losses or the occurrence of events or alterations in the circumstances indicating that the book value might not be
recoverable.
Acquisitions
Construction of UHE Santo Antônio do Jari
The indirect subsidiary ECE signed an EPC (Engineering Procurement and Construction) contract along the full turn-key model with the consortium made up of the
companies, CESBE S.A Engenharia e Empreendimentos, Alstom Brasil Energia and Transporte Ltda e Areva Koblitz S.A.
Construction of the Santo Antônio do Jari HPP has progressed according to schedule:
The Installation License for the project was issued in June 2011 and the construction was begun in August 2011 and forecast to be finished by the end of 2014. In the year
2012, licenses for specific installation were also issued, for: (i) the construction of the 230 kV transmission line (TL) for connection to the Basic Network; and (ii)
implementation of the Project for the Relocation of the village of São Francisco do Iratapuru.
The investment corresponding to the Company’s share amounted to R$ 333,887, excluding capitalized interest in the project, of R$ 19,205.
The project's total investment foreseen can range from R$ 1,270 million to R$ 1,410 million.
Construction of UTE Porto do Pecém (see Notes 3.1 and 3.4)
The project achieved physical progress of 99.3% and the investment corresponding to the Company’s stake totaled R$210,269, excluding interest capitalized in the project of
R$74,446
Unit II is in an advanced stage of commissioning, having already occurred boiler first fire and the steam blowing process. The next events planned are: (i) testing of the turbine
and generator; (ii) synchronization tests and (iii) operating service.
18
Intangible assets
Parent company
12/31/2012
Average
amortization
rate %
Intangible in service
Administration
Software
Total intangible in service
Administration
Total Intangible
0.00
20.00
0.00
0.00
0.00
0.00
Historical cost
12/31/2011
Accumulated
amortization
0.00
2,770
2,770
0.00
(2,139)
(2,139)
1,039
1,039
3,809
(2,139)
Net amount
0.00
631
631
0.00
1,039
1,039
1,670
0.00
-
ϯϵ
Average
amortization
rate %
0.00
20.00
0.00
Historical cost
Accumulated
amortization
0.00
2,522
2,522
0.00
(1,994)
(1,994)
328
328
2,850
(1,994)
0.00
-
Net amount
0.00
528
528
328
328
856
Consolidated
12/31/2012
Note
Distribution
Concession right - Infrastructure
Average
amortization
rate %
4.02
Generation
Software
Permanent easement
Concession right - Environmental licenses
Concession right - Use of public property UBP
Concession right - Other
18.1
Transmission
Permanent easement
19.58
0.00
14.87
Historical cost
12/31/2011
Accumulated
amortization
Net amount
4,188,378
4,188,378
(2,441,753)
(2,441,753)
0.00
0.00
1,746,625
1,746,625
4,080
670
3,854
(3,111)
0.00
(2,325)
0.00
969
670
1,529
4,110,408
4,110,408
(2,297,792)
(2,297,792)
1,812,616
1,812,616
3,700
487
3,854
(2,520)
0.00
(1,752)
1,180
487
2,102
171,560
(39,864)
131,696
3.27
171,561
(34,253)
137,308
(216,528)
(261,828)
1,032,922
1,167,786
2.39
1,249,449
1,429,051
(186,675)
(225,200)
1,062,774
1,203,851
0.00
111
111
0.00
-
0.00
111
111
0.00
-
18.79
0.00
6,703
303,564
310,267
5,928,370
(4,613)
(55,534)
(60,147)
(2,763,728)
19.92
0.00
6,063
303,564
309,627
5,849,197
(3,992)
(49,152)
(53,144)
(2,576,136)
111
111
2,071
254,412
256,483
3,273,061
0.00
940,511
0.00
940,511
( - ) Provision for maintenance of dividends
0.00
(940,511)
0.00
Amortization of provision for maintenance of
dividends
0.00
305,048
( - ) Goodwill accumulated amortization
0.00
(305,048)
-
0.00
Activities not linked to concession
Goodwill on merger of parent company
Net amount
1,249,450
1,429,614
0.00
Distribution
Generation
Administration
19.48
0.00
16.58
Accumulated
amortization
3.27
175,255
40,748
2,044
218,047
0.00
18.1
4.78
Historical cost
2.39
111
111
2,090
248,030
250,120
3,164,642
0.00
175,255
40,748
2,044
218,047
-
Administration
Software
Average
amortization
rate %
0.00
0.00
0.00
#DIV/0!
0.00
0.00
0.00
-
0.00
0.00
0.00
210,486
38,218
1,085
249,789
0.00
0.00
0.00
940,511
0.00
940,511
(940,511)
0.00
(940,511)
0.00
(940,511)
0.00
305,048
0.00
256,245
0.00
256,245
0.00
-
(305,048)
-
0.00
(256,245)
-
0.00
-
(256,245)
-
42,293
42,293
0.00
-
42,293
42,293
0.00
42,293
42,293
0.00
-
42,293
42,293
6,188,710
(2,763,728)
3,424,982
6,141,279
(2,576,136)
3,565,143
#DIV/0!
0.00
0.00
0.00
-
210,486
38,218
1,085
249,789
0.00
Goodwill
Lajeado Energia and Investco
Total Intangible
In September 2008, the goodwill in the amount of R$42,293 from the business combination, when the Company exchanged the shareholding interest held in Enersul for
shareholding interest held by Rede Energia S.A. in its subsidiaries Lajeado and Investco, and by shareholding interest held by Rede Power do Brasil S.A. in Lajeado and
Tocantins Energia S.A.
The goodwill as result of expected future earnings, with indefinite, is subject to annual recovery analysis and having no tax effects.
The movement of intangible in the year is as follows:
Parent company
Net amount at
12/31/2011
Software
528
328
856
Acquisitions
0.00
946
946
Transfer to
intangible in
service
Amortization
248
(228)
20
(145)
0.00
(145)
ϰϬ
Write-offs
0.00
(7)
(7)
Net amount at
12/31/2012
631
1,039
1,670
Consolidated
Net amount at
12/31/2011
Software
Acquisitions
Permanent easement
Concession right - Environmental licenses
Concession right - Infrastructure
3,251
598
2,102
1,812,616
Concession right - Use of public property - UBP
137,308
1,317,186
0.00
0.00
249,789
42,293
3,565,143
245,046
0.00
245,175
Goodwill
Total Intangible
129
0.00
0.00
0.00
Capitalized
interest
Transfer to
intangible in
service/property,
plant and
equipment
Transfers to
indemnifiabl
e financial
assets
775
183
276,789
0.00
0.00
0.00
(129,926)
(1,215)
0.00
(573)
(187,175)
0.00
0.00
(5,613)
(36,664)
0.00
0.00
(129,926)
0.00
0.00
(231,240)
0.00
-
-
8,903
8,903
(280,049)
(2,302)
Amortization
Reclassifica
tion to
property,
plant and
equipment
Net amount
at
12/31/2012
121
0.00
0.00
0.00
3,060
781
1,529
1,746,625
0.00
0.00
0.00
430
131,695
1,280,952
(1,212)
0.00
(26,892)
(4,430)
0.00
(3,879)
218,047
42,293
3,424,982
Write-offs
(1)
0.00
0.00
(25,679)
The Company evaluated the recovery of the carrying amount of goodwill and intangible assets with indefinite useful lives based on their value in use, at the discounted cash
flow model using the individual cash generating unit, which represents total tangible and intangible assets.
The recoverable amount of subsidiaries' goodwill is evaluated on an annual basis, regardless of impairment indicators. Possible impairment losses are recognized in income.
The recoverable amount is determined based on the assets value in use and are calculated using evaluation methodologies, backed by discounted cash flow techniques,
considering market conditions, time value, and business risks.
A set of assumptions was defined to determine the recoverable amount of the main investments.
Cash generating units: Bandeirante, Escelsa, Energest, EDP Comercializadora, Enerpeixe, Lajeado and Investco;
Basis to determine recoverable amount: value in use - equity value;
Determination of cash flows: production and consumption volume and estimated tariffs and residual value at the end of the concession;
Cash flow period: until the end of the concession;
Average BRR restatement rate (Distribution companies), energy sale agreements (generation companies) and operating costs: IGP-M/IPCA assumption: 4.24% p.a.;
Discount rate used (net of taxes): average remuneration of investment rate: 8.05%.
On December 31, 2012, the Company's and its subsidiaries' recovery test of goodwill and intangible assets with indefinite useful lives did not result in the recognition of losses
in intangible assets. In the year, there were no evidences of unrecoverable losses or the occurrence of events or alterations in the circumstances indicating that the book value
might not be recoverable.
18.1
Consolidated
12/31/2012
Cost
Bandeirante
Lajeado
Enerpeixe
Porto do Pecém
Pantanal
ECE Paricipações
Investco
Total
19
38,143
122,533
3,837
3,590
13,373
584,274
787,264
1,553,014
Amortization
(15,184)
(51,761)
(1,071)
(10)
(4,671)
(199,365)
(272,062)
22,959
70,772
2,766
3,580
8,702
584,274
587,899
1,280,952
Suppliers
Note
Electricity supply
Energia livre
CCEE operations
Materials and services
Total
19.1
Total
19.1
Parent company
Current
12/31/2012
12/31/2011
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
7,897
6,446
7,897
6,446
Consolidated
Current
12/31/2012
12/31/2011
499,365
305,377
63,940
58,934
80,013
78,150
111,896
31,865
278,228
229,416
1,033,442
703,742
Energia livre
The Brazilian Power Regulatory Agency (ANEEL), by means of Regulatory Resolution No. 387/09, changed the method for amortizing the balances of Loss of Revenue and
Energia Livre , in effect since January 2002 and limited to period established in ANEEL Resolution No. 1/04.
ANEEL Dispatch No. 2517/10, disclosed the amount to be settled between generation and distribution agents by September 30, 2010, with restatement by the monthly Selic
Rate.
The payments by the subsidiaries Bandeirante and Escelsa are currently suspended at the time, by a determination by the Regional Federal Court of the First Region until a
petition for a preliminary order included in the records of the injunction No. 91.2010.4.01.3400, sought by the Brazilian Association of Electric Energy Distribution Companies ABRADEE is examined by the judge of the 15th Federal Court in the Federal District.
Liabilities are being monthly adjusted to inflation at the SELIC rate variation, and R$5,006 (R$6,136 in 2011) was recorded as a contra entry to financial expenses (Note 31).
ϰϭ
Total
Issuance costs
300
-
CEJA
-
45,000
-
12,000
CEJA
EDPE
Oliveira Trust
EDPE
Issuance costs
Energest
Pentágono S/A
Distribuidora de Títulos e
Valores Mobiliários
Issuance costs
Energest
-
1,000
-
10
-
1
-
-
Bandeirante
Issuance costs
Banco Bradesco BBI S/A
10
39,000
Bandeirante
SLW Corretora de Valores
e Câmbio Ltda.
-
-
Escelsa
Issuance costs
Unit value
-
10
10
Quantity of
securities
Unit value
25,000
Company
-
45,000
Quantity of
securities
Escelsa
Fiduciary Agent
EDPE
EDPE
Company
(83)
300,000
(530)
450,000
(635)
120,000
-
390,000
-
250,000
Total amount
(530)
450,000
Total amount
Debentures
Composition of Debentures balance
Banco Citibank S/A
Total
Issuance costs
Pentágono S/A
Distribuidora de Títulos e
Valores Mobiliários
Fiduciary Agent
20
20.1
-
-
1st issue on
October 24, 2011
-
1st issue on August
28, 2012
-
1st issue on April
23, 2012
7/1/2010
1/0/1900
7/2/2007
Issuing date
1/0/1900
1st issue on August
28, 2012
Issuing date
-
from 10/24/2011
to 10/11/2013
-
from 08/28/2012
to 02/28/2014
-
from 04/23/2012
to 04/23/2017
-
from 07/01/2010
to 06/30/2016
-
42
-
110.5% of CDI
-
Debt extension. Settlement of the Bank Credit Notes
(CCBs) used in the acquisition of the Jari
Hydroelectric Power Plant.
105.0% of CDI
-
CDI + 0.98%
-
-
-
CDI + 1.50%
-
105.0% of CDI
Debt cost
0
105.0% of CDI
Debt cost
-
Investments in electricity generation assets
Debt extension, working capital financing and
financing of its capital expenses (CAPEX).
-
Cash restructuring to the debt payment and working
capital financing
Debt extension. Payment of Senior Notes with
maturity on 07/15/2007.
from 07/02/2007
to 07/02/2014
-
Purpose
0
Investments in electricity generation assets
Purpose
Contract term
0
from 08/28/2012
to 02/28/2014
Contract term
Payment method
52,383
-
34,125
Monthly amortization
Principal and interest in
single statement in the
end
-
-
-
1,713
Annual principal starting
April 2016 and six-month
period interest
end
(535)
17,080
Principal (annual) and
interest (six-month
period)
-
Current
-
-
-
-
-
-
11,086
-
-
-
11,086
Non-current
(412)
449,588
450,000
Non-current
Principal
Parent company
12/31/2012
Interest
11,086
11,086
Non-current
interest (six-month
period)
Payment method
0
end
Interest
383,152
(37)
300,000
-
-
-
-
-
-
(136)
1,041,547
-
-
(412)
450,000
(541)
120,000
(805)
390,000
(45)
83,350
Non-current
Principal
83,325
Current
12/31/2012
(412)
460,674
461,086
Total
1,488,168
(37)
334,125
(412)
461,086
(541)
121,713
(1,340)
407,080
(181)
166,675
Total
-
-
24,825
-
-
-
-
-
-
(535)
-
-
-
-
-
-
-
-
-
-
-
5,593
-
5,593
Non-current
Interest
25,360
Current
Consolidated
-
-
-
83,098
-
-
-
-
-
-
-
-
(227)
-
-
-
855,044
-
300,000
-
-
-
-
(1,450)
390,000
(181)
166,675
Non-current
Principal
-
-
83,325
Current
12/31/2011
-
12/31/2011
-
968,560
-
305,593
-
-
-
-
(1,985)
415,360
(408)
250,000
Total
-
-
The contracts include termination clauses in the following situations:
The main sections of the agreements that provide for termination are described below. The total sections can be consulted in the prospectuses of the
issuances.
(i) non-compliance by the Issuer with any monetary obligation in the Indenture, not remedied in the period established by the Indenture;
(ii) failure to comply with any obligation related to the principal and/or yield not resolved within the stipulated period;
(iii) spin-off, merger, takeover, or any relevant form of corporate reorganization entailing a transfer of the Issuer's share control, as defined in article
116 of Corporate Law, except (i) if said transfer is to another company of the same economic group as the Issuer; or (ii) a prior consent has been
obtained from debenture holders holding at least two thirds (2/3) of the debentures outstanding or (iii) in the cases of spin-off, merger or acquisition
there is assurance of the right foreseen in Law No. 6404, article 231, paragraph 1;
(iv) Applicable to Bandeirante, Escelsa and Energest: (v) the Issuer's failure to maintain a Gross Debt/EBITDA financial ratio of no more than 3.5 on
the calculation dates, which shall be June 30 and December 31 of each year.
(v) petition for self-bankruptcy;
(vi) settlement, liquidation, dissolution or bankruptcy;
(vii) if the issuer proposes an extra-judicial recovery plan to any creditor or creditor class, irrespective of having been requested or judicial ratification
obtained;
(viii) cancellation of the concession, since such loss impairs the faithful fulfillment of obligations;
(ix) notification of a final and unappealable adverse judgment in a lawsuit, at an amount higher than R$ 40,000 in Ceja, R$ 50,000 in Energest and R$
75,000 in Energias do Brasil, provided that such conviction can jeopardize the faithful fulfillment of the obligations; and
(x) applicable to Bandeirante and Escelsa: accelerated maturity or payment default of any monetary obligation the issuer may be subject to, either in
the local or the international market, in a unit amount or accumulated amount exceeding forty thousand Brazilian Reais (R$40,000) that may be
proven to impair the faithful fulfillment of obligations assumed by the Company in the Debenture Deed;
On December 31, 2012, the Company and the subsidiaries Bandeirante, Escelsa, Energest and CEJA are in full compliance with all the restrictive
clauses of the covenants provided in the debenture contracts.
20.2
Changes in debentures for the year:
Parent company
Net amount
at
31/12/2011
Current
Debentures
Non-current
Debentures
0.00
0.00
-
Acquisitions
0.00
449,470
449,470
Interest
accrued
0.00
11,086
11,086
Transfers
Transaction
costs
(118)
118
(118)
118
118
118
0.00
-
Net amount
at
31/12/2012
0.00
460,674
460,674
Consolidated
Net amount
at
31/12/2011
Current
Debentures
Non-current
Debentures
20.3
107,923
107,923
Acquisitions
0.00
-
860,637
568,945
860,637
568,945
Principal
payments
Payments of
interest
Maturity
Non-current
2014
Parent
company
-
(70,280)
(70,280)
69,051
69,051
411,146
411,146
0.00
-
0.00
-
34,197
34,197
(411,146)
(411,146)
460,674
Consolidated
435,535
435,535
621,496
2015
-
155,732
2016
-
235,428
2017
460,674
39,977
1,052,633
Total
460,674
1,488,168
Transfers
(83,325)
(83,325)
Maturity of current and non-current installments:
Current
2013
Interest
accrued
43
Transaction
costs
1,020
1,020
0.00
-
Net amount
at
31/12/2012
435,535
435,535
0.00
1,052,633
1,052,633
Bandeirante
Pantanal
Porto do Pecém
Porto do Pecém
Bandeirante
Bandeirante
Escelsa
(-) IDB - Transaction cost
BNDES - USD
IDB - Interamerican Development Bank
(-) Fund raising cost
EIB - European Investment Bank
(-) EIB - Transaction cost
EIB - European Investment Bank
Escelsa
Escelsa
Escelsa
Eletrobrás Reluz - ECF 2500/05
Eletrobrás LPT - ECFS 258/09
Escelsa
Escelsa
Escelsa
Escelsa
(-) BNDES -CALC - Transaction costs
Escelsa
Escelsa
BNDES - BB/CALC
Bandeirante
BNDES - BB/CALC
Bandeirante
Bandeirante
Banco do Brasil and Santander - Bank
Credit Bill
BNDES - Banco Santander
Bandeirante
Bandeirante
Bandeirante
Bandeirante
Bandeirante
BNDES - Banco do Brasil
Bandeirante
Banco do Brasil - Commercial Credit
Note
Bandeirante
Bandeirante
Bandeirante
Bandeirante
Local currency
Bandeirante
Company
56,737
75,764
50,304
30,968
380
261
1,230
(205)
164,091
153,283
35,513
35,513
30,000
102,000
12,359
11,523
3,392
3,517
2,946
10,036
3,911
608
EUR 45,000
(110)
EUR 45,000
-
USD 163,500
55,447
(1,785)
USD 100,000
Contracted
amount
8/28/2009
6/25/2007
11/20/2005
5/21/2004
7/12/2007
7/12/2007
9/30/2008
1/29/2009
1/29/2009
1/29/2009
12/27/2007
12/27/2007
6/22/2011
12/5/2006
6/25/2007
5/28/2004
5/27/2010
3/18/2010
12/12/2007
12/12/2007
12/12/2007
4/9/2007
2/17/2012
2/17/2012
2/17/2012
10/17/2007
2/18/2002
3/5/2004
Contracting
date
17,021
44,821
37,114
22,729
294
214
924
(205)
148,201
121,426
35,513
35,513
30,000
102,000
11,015
9,342
2,506
2,651
2,449
9,919
3,594
608
EUR 15,000
(110)
EUR 15,000
-
USD 159,894
9,266
(1,785)
USD 100,000
Amount
released
Deployment of hydroelectric plants: Viçosa/ES, São
João/ES and Paraíso/MS.
from 03/16/2002 to
06/16/2012
from 02/19/2012 to
02/17/2018
Luz para Todos (Light for All) Program
Reluz Program - Municipality of Santa Maria de
Jetiba/ES
from 12/30/2008 to
11/30/2013
Reluz Program - Municipality of Alfredo Chaves/ES
from 12/30/2008 to
11/30/2013
from 01/30/2012 to
12/30/2021
Reluz Program - Municipality of Viana/ES
from 01/30/2012 to
12/30/2016
from 04/30/2010 to
04/30/2020
-
from 02/17/2010 to
05/15/2017
Investment programs in the generation, distribution and
transmission of electricity.
from 02/17/2010 to
05/15/2017
Investment programs in the generation, distribution and
transmission of electricity.
from 02/17/2010 to
06/17/2019
from 08/30/2006 to
07/30/2016
Investment Program in May 2006
from 07/15/2008 to
06/15/2014
from 05/30/2008 to
04/30/2018
Working capital
Investment Program in May 2006
from 06/22/2011 to
06/06/2014
from 07/15/2008 to
06/15/2014
Working capital
from 06/05/2007 to
12/05/2013
from 11/30/2009 to
10/30/2019
Reluz Program - Municipality of Guaratinguetá/SP
from 08/30/2012 to
07/30/2017
Reluz Program - Municipality of Mogi das Cruzes/SP
Reluz Program - Municipality of Suzano/SP
from 03/30/2009 to
02/28/2014
Reluz Program - Municipality of Guarulhos/SP
from 05/30/2010 to
04/30/2015
from 07/30/2012 to
07/30/2017
Reluz Program - Municipality of Taubaté/SP
from 08/30/2006 to
07/30/2016
Reluz Program - Municipality of Aparecida/SP
from 03/30/2009 to
02/28/2014
Expansion and reinforcement of the electrical network of
the Escelsa's distribution area, for maintenance and
supply quality improvement and for reducing system
losses.
-
-
-
-
-
-
-
-
Gross debt in relation to EBITDA ratio at
or below 3.5;
or below 3.5;
or below 3.5;
or below 3.5;
-
or below 3.5;
-
-
-
-
-
-
-
-
Principal and monthly
interest
interest
interest
interest
interest
interest
5% p.a. + 1.5% p.a (mgt.
fee)
5% p.a. + 1.5% p.a (mgt.
fee)
5% p.a. + 1.5% p.a (mgt.
fee)
5% p.a. + 1.5% p.a (mgt.
fee)
5% p.a. + 1% p.a (mgt.
fee)
5% p.a. + 1% p.a (mgt.
fee)
100% of CDI
4
3
interest
interest
interest
interest
interest
interest
5% p.a. +1.5% p.a (mgt.
fee)
5% p.a. +1.5% p.a (mgt.
fee)
5% p.a. + 1.5% p.a (mgt.
fee)
5% p.a. + 1.5% p.a (mgt.
fee)
5% p.a. + 1.5% p.a (mgt.
fee)
5% p.a. + 1.5% p.a (mgt.
fee)
-
-
-
-
-
-
-
interest
312
of transaction cost
247
29
29
-
97
-
-
-
-
-
-
interest
interest
interest
interest
5% p.a. +1.5% p.a (mgt.
fee)
4.5% p.a. and 1.81% to
3.32% p.a. above TJLP
4.5% p.a. and 1.81% to
interest (six-month
period)
Principal and interest
in single statement in
the end
interest
5% p.a. + 1.5% p.a (mgt.
fee)
105% of CDI
interest
5% p.a. + 1.5% p.a (mgt.
fee)
443
2,409
Principal at the end of
the agreement and sixmonth period interest
or below 3.5;
Libor + 1.2750% p.a.
-
-
443
ϰϰ
-
-
-
1,523
Current
of transaction cost
Libor + 1.2750% p.a.
Cost
Cost
interest
Principal and interests:
Six-month period
Payment method
-
or below 3.5;
from 05/30/2008 to
04/30/2013
from 02/19/2012 to
02/17/2018
from 02/19/2012 to
02/17/2018
UMBNDES + 4.50% p.a.
Libor + 3% p.a. to 3.50%
p.a.
Libor + 4.375%p.a. +
exchange variation
Libor + 4.375%p.a. +
exchange variation
Debt cost
-
-
-
-
-
-
-
-
-
-
-
-
4,476
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,702
4,529
3,752
2,338
54
40
200
(30)
24,693
19,864
5,937
5,937
-
20,400
1,313
1,065
524
548
493
2,000
723
42
16,985
-
-
(1,807)
18,792
-
-
-
13,617
28,685
16,257
6,040
-
-
602
(45)
88,172
72,916
2,968
2,968
30,000
-
7,663
2,752
1,881
1,965
82
2,667
120
-
40,065
368,545
(93)
40,064
(10,390)
298,899
-
-
-
Non-current
Principal
Current
12/31/2012
Non-current
Interest
the agreement and sixmonth period interest
-
Expansion and reinforcement of the electrical network of
the Bandeirante's distribution area, for maintenance and
supply quality improvement and for reducing system
losses.
Shareholders’ equity over total assets
greater or equal to 30%.
Rate of coverage of the debt service,
greater or equal to 1.30
-
i. Total debt plus shareholders’ equity, at
or below 0.55;
ii. Total debt in relation to EBITDA ratio at
or below 3.5;
iii. Rate of coverage of the debt service,
greater or equal to 1.2.
Covenants
Deployment of Thermoelectric Power Plant Pecém I.
-
15/02/2026
Investment projects
from 09/01/2006 to
02/15/2012
Use
from 04/15/2004 to
02/15/2012
Contract term
Loans, financing and debt charges
Composition of balance of Loans, financing and debt charges
IDB - Interamerican Development Bank
Foreign currency
21
21.1
15,319
33,214
20,009
8,378
54
40
802
(75)
113,177
93,027
8,934
8,934
34,476
20,497
8,976
3,817
2,409
2,516
575
4,667
843
42
40,508
387,939
(93)
40,507
(12,197)
319,214
-
-
-
1
19
-
7
-
-
-
-
-
-
-
-
388
320
59
59
-
335
-
-
-
-
-
-
-
1,508
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,800
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,702
4,293
3,752
2,338
60
43
201
(37)
21,933
18,219
5,937
5,937
-
20,400
371
1,064
224
227
493
2,000
723
125
11,300
-
-
-
8,310
178
(240)
3,052
15,319
31,484
20,009
8,379
54
40
802
(75)
96,882
84,718
8,905
8,905
30,000
20,400
2,533
3,819
2,325
2,430
575
4,665
843
42
279,116
-
-
(12,503)
291,619
-
-
-
Non-current
Principal
Current
12/31/2011
Non-current
Interest
1,488
Current
Consolidated
Total
17,021
35,777
23,761
10,717
114
83
1,003
(112)
119,203
103,257
14,901
14,901
31,800
41,135
2,904
4,883
2,549
2,664
1,068
6,665
1,566
167
291,924
-
-
(12,503)
301,417
179
(240)
3,071
Total
35,358
90,000
Escelsa
Escelsa
Escelsa
Escelsa
Escelsa
Energest
Energest
Energest
Energest
Pantanal
Costa Rica
Enerpeixe
Enerpeixe
Enerpeixe
Enerpeixe
Enerpeixe
Porto do Pecém
Porto do Pecém
Santa Fé
(-) Banco do Brasil - Commercial Credit
Note - Transaction costs
BNDES - Banco Santander
Banco do Brasil - Bank Credit Bill
Banco do Brasil - Bank Credit Bill Transaction costs
Santander - CDI - 231006019
Santander - CDI - 231006029
BNDES
BNDES - BRL
BNDES
Banco Itaú
Bradesco
Unibanco
Banco do Brasil
BNDES
Cost of transaction
360,000
736,807
(1,474)
ECE
Participações
ECE
Participações
ECE
Participações
BNDES and other banks
BNDES
(-) BNDES - Transaction costs
Bandeirante
Porto do Pecém
Porto do Pecém
Bandeirante
Escelsa
Banco JP Morgan
Citibank
Pactual
Goldman Sachs
Goldman Sachs
-
2/9/2012
2/9/2012
Hedge against
exchange rate
changes and
interest rate of
debt from EIB
-
-
-
Hedge against
exchange rate
changes and
interest rate of
debt from EIB
-
-
3/15/2004
Hedge against
exchange rate
changes on
debt from IDB
-
(1,474)
300,000
246,900
300,000
10,000
-
75,633
-
701,418
83,750
67,000
83,750
100,500
335,000
5,375
53,214
20,004
21,355
11,864
48,000
(1,689)
90,000
33,160
33,160
(2,025)
45,000
135,000
40,400
Amount
released
-
11/13/2003
Hedge against
exchange rate
changes on
debt from IDB
12/13/2012
12/13/2012
10/26/2011
9/21/2000
12/20/2011
-
5/11/2009
6/10/2009
6/10/2009
5/21/2004
5/21/2004
5/21/2004
5/21/2004
5/21/2004
11/4/1997
2/18/2002
11/13/2009
2/12/2009
2/12/2009
2/20/2008
10/4/2012
10/4/2012
12/27/2007
12/27/2007
6/24/2010
5/27/2011
6/24/2010
2/9/2007
Contracting
date
Financing for the sale of electricity for agribusiness.
from 10/04/2012 to
09/24/2014
Deployment of the Hydroelectric Power Plant Peixe
Angelical.
from 03/17/2008 to
01/15/2016
from 02/19/2012 to
02/17/2018
from 02/19/2012 to
02/17/2018
from 04/15/2004 to
02/15/2012
from 04/15/2004 to
02/15/2012
from 12/13/2012 to
05/15/2031
Hedge against EIB financing.
Hedge against EIB financing.
Hedge against IDB financing.
Implementation of the UHE Jari's construction project.
Implementation of the UHE Jari's construction project.
Deployment of Hydroelectric Plant Luis Eduardo
Magalhães - Lajeado.
-
-
-
-
-
ϰϱ
93.40% of CDI
93.40% of CDI
USD 1.8138
EUR/USD 1.4040;
EUR/R$ 2.73; USD/R$
1.9678
from 98.00% to 109.70%
of CDI
from 97.94% to 118.94%
of CDI
1.86% above TJLP
-
109% of CDI
i. Rate of coverage of the debt service,
greater or equal to 1.20 during the
amortization period.
ii. Rate of own capital: Shareholders’
equity over total assets equal or greater
than 25%.
i. Rate of own capital: Shareholders’
equity over total assets equal or greater
than 30%.
ii. Maintenance of minimum cash of R$ 3
million
-
107% of CDI
-
Interest (six-month
period)
Interest (six-month
period)
MtM
MtM
Quarterly interest
Quarterly interest
of transaction cost
1,620
20,006
810
810
-
-
-
-
68,611
-
-
-
-
-
-
68,611
-
-
-
-
-
25,379
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,327
-
-
-
-
30,295
7,134
Principal
16,553
345,200
-
-
65
16,488
-
-
311,662
-
-
-
-
-
-
5,679
(802)
59,236
14,350
11,480
14,350
17,220
56,454
532
-
2,503
-
-
9,600
(842)
-
5,545
5,545
(392)
-
7,000
8,080
Current
12/31/2012
current
Non-
15,977
296
-
interest as from June
15, 2015.
-
the end
-
7,696
176
-
2,475
172
138
interest
the end
Annual dividends
-
The adjustment to present value of A, B and C preferred
shares, as item 19 of CPC 39.
8.70% p.a.
interest
Cost
interest
interest
172
206
interest
interest
6
677
-
interest
Cost
from 01/15/2001 to
10/15/2012
from 12/13/2012 to
05/15/2031
-
agreement and interest
in the moment of the
renegotiation
ii. Rate of coverage of the own capital,
iii. Restriction for payment of dividends.
Working capital
from 10/26/2011 to
10/13/2013
-
in the moment of the
renegotiation
-
773
interest (six-month
period)
Deployment of Small Hydroelectric Plant (PCH) of Santa
Fé/ES.
ii. Restriction for payment of dividends.
Rate of coverage of the debt service,
-
32
-
of transaction cost
interest
interest
interest
27
(six-month period)
27
-
-
1,919
464
Current
Interest
interest
interest
Cost
the end
the end
interest (six-month
period)
Payment method
from 12/20/2011 to
03/20/2012
-
from 04/15/2010 to
02/15/2024
Angelical.
from 03/17/2008 to
01/15/2016
Angelical.
Angelical.
from 03/17/2008 to
01/15/2016
from 03/17/2008 to
01/15/2016
Angelical.
from 03/17/2008 to
01/15/2016
5.00% + 1.50% p.a.
(mgt. fee)
-
Construction of the Hydroelectric Plant Costa Rica.
Shareholders’ equity over total assets
4.50% p.a. and 1.92%
above TJLP
113.50% of CDI
Deployment of hydroelectric plants: Viçosa/ES, São
João/ES and Paraíso/MS.
-
113.50% of CDI
106.6% of CDI
-
Working capital
from 02/12/2009 to
03/05/2012
-
or below 3.5;
98.5% of CDI
100% of CDI
100% of CDI
105% of CDI
Debt cost
Investment Program
Working capital
from 02/12/2009 to
03/05/2012
from 06/15/2010 to
05/15/2018
from 03/16/2002 to
06/16/2012
from 10/30/2010 to
05/31/2014
Deployment of Small Hydroelectric Plant (PCH) of Santa
Fé
from 02/20/2011 to
02/20/2015
-
-
or below 3.5;
Investment Program in expansion, modernization and
improvement of the performance of the power distribution
network
from 07/15/2008 to
06/15/2014
from 10/04/2012 to
09/24/2014
or below 3.5;
Investment Program in expansion, modernization and
improvement of the performance of the power distribution
network
from 07/15/2008 to
06/15/2014
-
or below 3.5;
or below 3.5;
Covenants
-
Working capital
Working capital
Working capital
Use
-
29/05/2015
from 05/27/2011 to
05/9/2014
from 11/29/2010 to
05/29/2015
from 08/09/2007 to
02/10/2014
Contract term
The debts are realized at cost and the result of the swap at market value.
Total
Bandeirante
Banco Citibank
Result of the swaps
300,000
Investco
10,000
Investco
Investco
Cumulative receivable shares
-
75,633
-
705,100
83,750
67,000
83,750
100,500
335,000
5,375
55,447
25,404
21,355
11,864
48,000
(1,689)
35,358
(2,025)
45,000
135,000
Escelsa
Escelsa
Note
40,400
Note
Escelsa
Banco do Brasil and Santander - Bank
Credit Bill
Company
Contracted
amount
72,196
2,358,843
-
-
3,154
69,042
-
-
1,918,102
(1,460)
300,000
-
-
-
21,293
57,734
(4,842)
740,449
29,896
23,917
29,896
35,875
117,611
196
-
11,055
-
-
19,200
(637)
90,000
2,773
2,773
(517)
45,000
110,500
8,080
current
Non-
90,369
2,792,660
810
810
3,219
85,530
-
-
2,314,352
(1,460)
300,296
-
-
-
54,368
63,589
(5,644)
802,160
44,418
35,535
44,418
53,301
174,742
734
-
13,590
-
-
29,573
(1,479)
91,327
8,345
8,345
(909)
45,000
149,714
23,758
Total
12,947
-
-
-
-
-
-
11,439
-
-
-
185
36
-
234
-
-
261
208
261
313
1,025
9
8
45
2,314
1,285
1,628
-
-
55
55
-
-
1,226
1,123
Current
Interest
28,512
-
-
-
-
-
-
28,512
-
-
338
-
-
-
-
-
2,689
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,088
20,597
-
Principal
78,917
458,851
-
-
39
76,168
879
1,831
368,634
-
-
-
46,756
10,000
2,555
5,679
-
26,281
14,350
11,480
14,350
17,220
56,454
532
1,894
2,503
21,355
11,864
9,600
-
-
5,545
5,545
(414)
-
7,000
8,080
Current
12/31/2011
current
Non-
Non-
65,196
2,144,716
-
-
-
65,196
-
-
1,800,404
-
-
54,700
-
-
47,639
63,413
(6,428)
709,586
44,245
35,397
44,246
53,096
174,064
649
-
13,558
-
-
28,800
-
-
8,317
8,317
(909)
45,000
117,500
16,160
current
144,113
2,645,026
-
-
39
141,364
879
1,831
2,208,989
-
-
55,038
46,941
10,036
50,194
69,326
(6,428)
738,556
58,856
47,085
58,857
70,629
231,543
1,190
1,902
16,106
23,669
13,149
40,028
-
-
13,917
13,917
(1,323)
48,088
146,323
25,363
Total
21.2
The change in the loans and financing for the year:
Consolidated
Net amount
at
12/31/2011
Acquisitions
Principal
payments
Interest
accrued
Payments of
interest
Capitalized
interest
Transfers
Adjustment
to market
value
Adjustment
to present
value
Cost of
transaction
Monetary
and
exchange
variation
Net amount
at
12/31/2012
Current liabilities
Loans, financing and charges
392,881
52,600
(684,444)
(164,921)
151,012
(168)
594,850
0.00
52,600
(74,049)
(758,493)
(1,318)
(166,239)
59
151,071
0.00
(168)
0.00
594,850
0.00
0.00
6,117
726
348,653
0.00
-
0.00
6,117
258
984
16,553
365,206
38,809
2,355,259
Swaps
78,917
471,798
12,686
12,686
Non-current
Loans, financing and charges
2,108,032
738,471
0.00
0.00
0.00
-
0.00
-
61,671
168
(594,850)
(548)
2,633
873
Swaps
65,196
0.00
2,173,228
21.3
738,471
0.00
61,671
0.00
168
0.00
6,999
(594,850)
6,451
0.00
2,633
0.00
873
0.00
38,809
72,195
2,427,454
Maturity of current and non-current installments (principal and interest):
Consolidated
Currency
Maturity
Current
2013
Non-current
2014
2015
2016
2017
2018
from 2019 to
2023
from 2024 to
2028
from 2029 to
2032
Total
22
National
Foreign
Total
327,639
37,567
365,206
327,639
37,567
365,206
460,503
399,151
157,320
118,853
97,960
37,118
37,335
34,092
33,184
113,649
497,621
436,486
191,412
152,037
211,609
434,732
145,645
580,377
243,100
39,718
282,818
75,094
1,986,713
2,314,352
0.00
440,741
478,308
75,094
2,427,454
2,792,660
Parent
company
Current
12/31/2011
Consolidated
Current
Non-current
12/31/2012
12/31/2011
12/31/2012
12/31/2011
BSPS - Reserves to amortize
Assistential Programs
0.00
0.00
16,075
0.00
18,317
0.00
138,363
6,867
75,851
6,867
Retirement Incentive Aid - AIA
Medical Healthcare and Life Insurance
Private pension
Private pension plan - EnerPrev
0.00
0.00
6
0.00
6
1,734
17,639
1
49
35,498
1,018
10,647
6
47
30,035
1,302
344,812
0.00
0.00
491,344
2,597
177,097
0.00
0.00
262,412
Pursuant to CVM Resolution 600/09, post employment benefit liabilities should be accounted for based on standards contained in CPC 33. To
meet this requirement, the subsidiaries Bandeirante, Escelsa and Energest, hired independent actuaries to conduct an actuarial appraisal of
these benefits according to the Projected Unit Credit Method.
In accordance with CPC 33 - Employee Benefits, future obligations such as defined benefits assumed by the companies should be recognized
in liabilities, net of recognized funds.
22.1
Bandeirante
Current
12/31/2012
BSPS - Reserves to amortize
Assistential Programs
Private pension
16,075
0.00
1
16,076
Non-current
12/31/2011
12/31/2012
12/31/2011
18,317
138,363
75,851
6,867
6,867
0.00
0.00
18,317
0.00
145,230
0.00
82,718
The subsidiary Bandeirante currently maintains retirement and pension supplementation plans to collaborators and former collaborators, as
follows:
46
22.1.1
Retirement plans
22.1.1.1
Defined benefit plan and variable contribution
Structured down in the category "Paid-in, Defined benefit and Variable Contribution", as from June 1, 2011, the Benefit Plan
PSAP/Bandeirante started to be managed by EnerPrev, a private entity of complementary private pension plan, sponsored by the Grupo EDP
that has purpose of managing a set of pension plans in favor of the subsidiary Bandeirante's employees and former employees, and the rights
and duties of participants and also those from Bandeirante, as provided for in regulation of PSAP/Bandeirante. The amount of R$ 154,438
corresponds to the portion of benefits exceeding the plan's assets which have the adhesion of 602 employees as of December 31, 2012.
The plan has the following characteristics:
(i) Settled Complementary Proportional Benefit Plan - BSPS – This corresponds to the employees’ proportional benefits calculated on the
basis of time of service up to March 1998. Due to the deficit calculated, the subsidiary Bandeirante has a commitment which is being settled in
240 months as from September 1997, based on a percentage of the payroll, subject to revision semiannually to ensure settlement of the
balance in the above period.
This plan was effective until March 31, 1998 and is a defined benefit type which grants Settled Complementary Proportional Benefits (BSPS)
in the form of lifetime income convertible into a pension to plan members registered as at March 31, 1998 in a defined amount proportional to
accumulated years of service up to the said date conditional upon compliance with the regulations. The subsidiary Bandeirante bears total
responsibility for covering actuarial shortfalls .
(ii) Mixed Benefits Plan – DB and DC
• DB Plan – Effective after March 31, 1998 - Defined Benefit Plan that grants a lifetime income convertible into a pension proportional to time
of service accumulated to March 31, 1998 based on 70% of the monthly average wage over the past 36 months in active employment. In the
event of death while the employee is on active service, or disability, the benefits comprise all the years of past service (including the
accumulated period to March 31, 1998) and therefore does not include the accumulated period of service after March 31, 1998 alone. The
subsidiary Bandeirante and plan members bear equal responsibility for covering the actuarial shortfalls.
• DC Plan – Implemented in conjunction with the DB Plan, effective after March 31, 1998. It is a pension plan that until the time of granting the
lifetime income, convertible (or not) into a pension, is a defined contribution plan, not generating any actuarial responsibility on the part of the
subsidiary Bandeirante. Only after the act of granting of the lifetime income, convertible (or not) into a pension, does the pension plan become
a defined benefit one, subjecting the subsidiary Bandeirante to actuarial responsibility .
meet this requirement, the subsidiary Bandeirante hired independent actuaries to conduct an actuarial appraisal of these benefits according to
the Projected Unit Credit Method.
The actuarial appraisal shows as at December 31, 2012 that in the case of the defined benefits plans the present value of the actuarial
liabilities net of the fair value of the assets and of unrecognized actuarial losses, shows a deficit as shown below in the movements during the
period of the defined benefit liability recognized in the statement of financial position:
2012
Present
value of the
actuarial
liabilities
Opening balance recognized
(586,920)
Cost of current service
Interest cost
2011
Fair value of
the plan
assets
Recognized
(liability)
Present
value of the
actuarial
liabilities
492,753
(94,167)
(486,439)
-
93
(58,926)
-
-
93
Fair value of
the plan
assets
Recognized
(liability)
373,195
(113,244)
939
(58,926)
-
939
(51,189)
-
(51,189)
43,453
54,480
54,480
-
43,453
Actuarial gains/(losses) recognized in shareholders' (122,405)
50,827
(71,578)
(73,990)
82,364
8,374
Contribution paid by the Company
15,660
15,660
-
17,500
17,500
-
Expected return from assets
-
Contribution paid by employees
(2,107)
2,107
-
(1,766)
1,766
Benefits paid by the plan
27,792
(27,792)
-
25,525
(25,525)
-
Closing balance recognized
(742,473)
588,035
(154,438)
(586,920)
492,753
(94,167)
Present value of the actuarial obligations
(742,473)
588,035
(154,438)
(586,920)
492,753
(94,167)
The actual return from the plan's assets in the year grew substantially due to the increase in the value of those assets, as calculated in the
actuarial valuation made on December 31, 2012.
The actuarial loss of R$122,405 in the present value of obligations, calculated in the actuarial valuation made as of December 31, 2012, arose
mostly from the revision of assumptions for future salary increases used in that appraisal. In 2011, the actuarial loss was R$73,990.
In 2012, expected contributions of the subsidiary Bandeirante in the amount to R$16,075.
The net expense with the Supplementary Retirement and Pension Plans of Bandeirante - PSAP/Bandeirante, recognized in the income of
2012 and 2011 in counter entry to the Post-employment benefits account, has the following breakdown:
2012
Interest cost
Expected employee contributions
Total
1,771
58,926
(54,480)
(1,864)
4,353
2011
1,207
51,189
(43,453)
(2,146)
6,797
Actuarial gains and losses derived from actuarial appraisals are recorded as Other comprehensive income, in the shareholders' equity, and
recognized in the period of occurrence. The balance on December 31, 2012 of actuarial loss, net of Income and social contribution taxes is
R$73,733 (R$26,492 of actuarial loss on December 31, 2011).
47
12/31/2012
12/31/2011
12/31/2010
12/31/2009
12/31/2008
Adjustments from the experience with plan assets
Actuarial (Gains)/losses of assets
Percentage of (Gains)/losses related to the plan total assets
(50,827)
-8.64%
(82,364)
-16.72%
17,794
4.77%
(10,854)
-3.07%
16,490
5.28%
122,405
16.49%
73,990
12.61%
32,761
6.73%
(16,553)
-3.85%
(9,382)
-2.22%
(742,473)
588,035
(154,438)
(586,920)
492,753
(94,167)
(486,439)
373,195
(113,244)
(430,120)
354,080
(76,040)
(422,199)
312,153
(110,046)
Adjustments from the experience with plan obligations
Actuarial (Gains)/losses of obligations
Plan situation
Present value of fully or partially covered obligations
Fair value of assets
Plan situation
The main classes of plan assets are as follows:
Asset class
Debt instruments
Shares
Real estate
12/31/2012
12/31/2011
Allocation %
89.50%
8.40%
Allocation %
85.60%
11.56%
0.30%
1.80%
0.36%
2.48%
100%
100%
Other
Total
The expected return rate of the assets was determined considering the allocation goal and expected return of each asset class, as follows:
2012
Asset class
Debt instruments
Shares
Real estate
Other
Total
Allocation
target
82.40%
14.40%
0.60%
2.60%
100%
Expected
return
10.22%
16.27%
10.01%
10.77%
11.10%
Allocation
target
2011
Expected
return
82.40%
14.40%
0.60%
2.60%
100%
10.84%
16.31%
10.77%
10.77%
11.63%
We present below the composition of the number of Plan participants:
Active participants
Assisted participants
With deferred benefits
Retirees and pensioners
Total
12/31/2012
666
12/31/2011
749
136
653
103
610
789
1,455
713
1,462
The main assumptions utilized in this actuarial appraisal were as follows:
Economic
Discount rate - nominal
Expected rate of return on assets
Future salary increases
Growth of benefit plans
Inflation
2012
2011
9.30% p.a.
10.25% p.a.
11.10% p.a.
11.63% p.a.
from 6.90% p.a. up to 2016, decreased to
5.79% p.a. as of 2017
5.00% p.a.
from 7.59% p.a. up to 2015, decreased to
5.55% p.a. as of 2016
4.50% p.a.
5.00% p.a.
4.50% p.a.
RP 2000 Gerational
RP 2000 Disabled
Wyatt 85 Class 1
RP 2000 Gerational
RP 2000 Disabled
Wyatt 85 Class 1
Demographic
Mortality table
Mortality table for invalids
Disability table
48
22.2
Escelsa
Subsidiary Escelsa currently maintains retirement and pension supplementation plans to employees and former employees and other postemployment benefits, such as medical care, life insurance, Retirement Incentive Aid and other benefits to retirees.
22.2.1
Complementary retirement and pension plans
22.2.1.1
• Plan I - Escelsos structured as a "Defined benefit" plan, managed by EnerPrev - Previdência Complementar of the Grupo EDP - Energias do
Brasil and registered with the National Register of Benefit Plans (CNPB) and in the National Superintendency of Private Pension Plans
(Previc). The Funding Plan is sustained paritarially by contributions of the sponsor and of the participant, pursuant to the Benefit Plan
Regulation.
• Plan II - Escelsos structured as a "Variable Contribution" plan, managed by EnerPrev-Previdência Complementar of the Grupo EDP Energias do Brasil and registered with the National Register of Benefit Plans (CNPB) of Previc. The Funding Plan is sustained paritarially by
contributions of the sponsor and of the participant, pursuant to the Benefit Plan Regulation.
The actuarial appraisal realized as at December 31, 2012 showed that for these pension plans, the fair value of the assets exceeded the
present value of the actuarial liabilities as indicated below:
This plan has the adhesion of 661 contributors.
2012
Present
value of the
actuarial
liabilities
Opening balance
(159,876)
Interest cost
Actuarial/Gains (losses)
Closing balance
Fair value of
the plan
assets
Present
value of the
actuarial
liabilities
Fair value of
the plan
assets
Fair value of
the plan
assets
258,427
(98,551)
(143,214)
239,072
(95,858)
-
394
(113)
-
113
(15,699)
-
15,699
(14,729)
-
14,729
-
27,961
(27,961)
-
27,092
(27,092)
(26,995)
6,421
20,574
(13,304)
3,572
9,732
(206)
Fair value of
the plan
assets
(394)
-
2011
210
206
(210)
-
(172)
175
172
(175)
-
12,024
(12,024)
-
11,656
(11,656)
-
(191,146)
281,201
(90,055)
(159,876)
258,427
(98,551)
The surplus in the defined benefit pension plans reduces the risk of an eventual actuarial liability for the subsidiary Escelsa. The subsidiary
Escelsa's management did not record this asset as the effective reduction of contributions from the sponsor Escelsa or the reversal of
amounts in the future are not assured.
As the sponsor company, Escelsa contributes a monthly amount proportional to the contribution of EnerPrev members, in accordance with the
conditions established in each benefit plan. The Company contributed R$2,882 (R$2,778 in 2011).
The historical analysis of adjustments in the plan situation, arising from actuarial gains and losses is as follows:
12/31/2012
12/31/2010
12/31/2009
12/31/2008
12/31/2007
(6,421)
(3,572)
(28,137)
(1,972)
19,700
-2.28%
-1.38%
-11.77%
-0.99%
10.50%
26,995
13,304
7,782
9,016
(8,448)
14.12%
8.32%
5.43%
6.80%
-7.01%
(191,146)
(159,876)
(143,214)
(132,626)
(120,453)
281,201
258,427
239,072
200,084
187,553
90,055
98,551
95,858
67,458
67,100
Plan situation
Plan situation
12/31/2012
Asset class
Debt instruments
12/31/2011
Allocation % Allocation %
91.09%
90.80%
Shares
7.60%
7.76%
Real estate
0.44%
0.50%
Other
0.87%
0.94%
Total
100%
100%
49
2012
Asset class
Allocation
target
Expected
return
Allocation
target
2011
Expected
return
Debt instruments
82.40%
10.22%
82.40%
Shares
14.40%
16.27%
14.40%
10.84%
16.31%
Real estate
0.60%
10.01%
0.60%
10.77%
Other
2.60%
10.77%
2.60%
10.77%
Total
100%
11.10%
100%
11.63%
The real return from the plan's assets in the year was R$34,382 (R$30,644 in 2011), compared to the return estimated early in the year of
R$27,961 (R$27,092 in 2011), thus generating an actuarial gain of R$6,421 (R$3,572 in 2011) not recorded in shareholders' equity due to the
unfeasibility of recognizing the aforementioned surplus.
We present below the composition of the number of plan participants:
Plan I
Active participants
-
-
Total
Plan II
2
12/31/2012
12/31/2011
723
725
802
-
-
-
15
15
11
719
214
933
941
719
229
948
952
721
952
1,673
1,754
The main assumptions utilized in this actuarial appraisal of the benefits were as follows:
2012
Economic
2011
Plan I
Plan II
Plan I
Plan II
9.30% p.a.
9.30% p.a.
10.25% p.a.
10.25% p.a.
11.10% p.a.
11.10% p.a.
11.63% p.a.
11.63% p.a.
from 6.90% p.a. up to 2016,
decreased to 5.79% p.a. as of
2017
from 6.90% p.a. up to 2016,
decreased to 5.79% p.a. as
of 2017
from 7.59% p.a. up to 2015,
of 2016
from 7.59% p.a. up to 2015,
of 2016
5.00% p.a.
5.00% p.a.
4.50% p.a.
4.50% p.a.
Inflation
5.00% p.a.
5.00% p.a.
4.50% p.a.
4.50% p.a.
Demographic
AT 2000
AT 2000
AT 2000
RP 2000 Gerational
RP 2000 Disabled
RP 2000 Disabled
RP 2000 Disabled
RP 2000 Disabled
Disability table
Wyatt 85 Class 1
Wyatt 85 Class 1
Wyatt 85 Class 1
Wyatt 85 Class 1
Mortality table
22.2.2
Retirement incentive aid, medical care, life insurance and other benefits to retirees: Defined benefit
Current
12/31/2012
Non-current
12/31/2011
12/31/2012
1,730
981
1,302
2,597
17,512
10,591
339,280
174,582
27
19,269
26
11,598
0.00
340,582
0.00
177,179
12/31/2011
• Retirement Incentive Aid - AIA – Benefit to employees hired up to December 31, 1981, payable on termination of the labor contract,
irrespective of the reasons for such severance. The AIA guarantees payment of a benefit, the amount of which was calculated considering for
each employee, the proportionality of the period of contribution to the INSS (Brazilian Social Security Service) up to October 31, 1996, the
employee’s salary and the INSS benefit as at October 31, 1996; and
• Medical care, life insurance and other benefits to retirees - Coverage for medical and dental care, medications, life insurance, and in proven
cases, existence of dependents with special needs, corresponding to 50% of the minimum salary of the subsidiary Escelsa.
The actuarial evaluation carried out as of December 31, 2012 determined a present obligation for defined benefit plans, as shown below in the
movements during the period of the defined benefit liability recognized in the statement of financial position:
2012
Present
value of the
actuarial
liabilities
2011
Recognized
(liability)
Present
value of the
actuarial
liabilities
Recognized
(liability)
(188,751)
(188,751)
(96,725)
(96,725)
(2,331)
(2,331)
(1,366)
(1,366)
(21,565)
(21,565)
(13,220)
(13,220)
(2,596)
(2,596)
(2,596)
(2,596)
(130)
(130)
Actuarial gains/(losses) recognized in shareholders' (163,650)
(163,650)
Interest cost
Past service cost
Special cost due to end of benefit
Benefits directly paid by the Company
Unrecognized past service cost
-
-
(86,631)
(86,631)
19,199
19,199
11,787
11,787
(359,824)
(359,824)
(188,751)
(188,751)
(25,237)
(385,061)
(359,824)
(27,833)
(216,584)
50
(188,751)
The subsidiary Escelsa will recognize as straight-line expense in the average period of 10 years the post service costs not recognized that will
still be acquired, pursuant to instruction in the paragraph 96 of CPC 33 - Employee benefits. However, in accordance with Instruction CVM no.
695/12, which alters the version of CPC 33 to (R1), past service costs not recognized until the year 2012 will be recognized in full in the year
2013.
mostly from the revision of healthcare cost inflation and the change in discount rate in that appraisal. In 2011, the actuarial loss was R$86,631.
In 2013, expected contributions from subsidiary Escelsa for these benefits amount to R$19,242.
These benefits' net expenses in 2012 and 2011 recognized in income as a contra entry to Post-employment benefits is as follows:
2012
Interest cost
Past service cost
Total
2011
2,331
1,366
21,565
13,220
2,596
2,596
-
130
26,622
17,182
recognized in the period of occurrence. The balance on December 31, 2012 of actuarial loss, net of Income and social contribution taxes is
R$208,735 (R$100,726 of actuarial loss on December 31, 2011).
12/31/2012
12/31/2011
12/31/2010
12/31/2009
12/31/2008
163,650
86,631
33,765
25,182
(10,884)
40.00%
26.55%
33.56%
-19.64%
42.50%
Plan situation
Present value of liabilities completely unsecured
(385,061)
(216,584)
(127,154)
(75,040)
(55,428)
Plan situation
(385,061)
(216,584)
(127,154)
(75,040)
(55,428)
The sensitivity analysis of medical costs trend rate variation is as follows:
Main
assumption
s
Medical Care to Retirees
Defined Benefit Obligation
Service cost and interest cost
Medical cost trend rate
variation
+1%
-1%
358,141
406,823
317,582
25,358
28,657
22,677
2012
Economic
Long-term medical inflation
Inflation
Aging factor
AIA (Retirement Incentive
Aid)
Medical care
Life Insurance
Other benefits to retirees
9.30% p.a.
from 6.90% p.a. up to 2016,
2017
9.30% p.a.
9.30% p.a.
9.30% p.a.
n/a
n/a
6.90% p.a.
5.00% p.a.
n/a
5.00% p.a.
5.00% p.a.
n/a
11.44% p.a. in 2013,
decreased linearly to 6% p.a.
up to 2024
n/a
n/a
5.00% p.a.
5.00% p.a.
5.00% p.a.
5.00% p.a.
n/a
1.50% p.a.
n/a
n/a
Demographic
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Disabled
RP 2000 Disabled
RP 2000 Disabled
RP 2000 Disabled
Disability table
Wyatt 85 Class 1
Wyatt 85 Class 1
n/a
Wyatt 85 Class 1
Aid)
Medical care
Life Insurance
10.25% p.a.
10.25% p.a.
10.25% p.a.
10.25% p.a.
from 7.59% p.a. up to 2015,
2016
n/a
n/a
7.59% p.a.
4.50% p.a.
n/a
4.50% p.a.
4.50% p.a.
n/a
11% p.a. in 2012, decreased
linearly to 6%p.a. up to 2023
n/a
n/a
4.50% p.a.
4.50% p.a.
4.50% p.a.
4.50% p.a.
n/a
1.50% p.a.
n/a
n/a
Mortality table
Economic
Inflation
Aging factor
2011
Demographic
Mortality table
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Disabled
RP 2000 Disabled
RP 2000 Disabled
RP 2000 Disabled
Disability table
Wyatt 85 Class 1
Wyatt 85 Class 1
n/a
Wyatt 85 Class 1
51
22.3
Investco
The subsidiary Investco currently maintains retirement and pension supplementation plans to collaborators and former collaborators and
benefits from the Medical care, from the Law 9656/98.
22.3.1
Medical care - Law 9656/98: Defined benefit
Current
12/31/2012
12/31/2011
Medical care - Law 9656/98
19
Non-current
12/31/2012
8
0.00
4
19
12/31/2011
551
243
0.00
12
0.00
551
243
Pursuant to Law 9656/98, employees who pay a pre-fixed monthly contribution for the health care insurance plan are entitled to continue in a
similar plan, in case of dismissal or retirement, for a determined period of time, in accordance with legislation le legislation to Health Care
Insurance Plan. The subsidiary Investco's current model, signed on April 14, 2005 with Unimed falls under this legislation.
meet this requirement, the subsidiary Investco hired independent actuaries to conduct an actuarial appraisal of this benefit according to the
Projected Unit Credit Method.
The actuarial evaluation carried out as of December 31, 2012 determined a present obligation for defined benefit plans, as shown in the
reconciliation of plan obligations:
2012
2011
Present
value of the
actuarial
liabilities
Recognized
(liability)
(251)
(251)
(106)
(106)
Present
value of the
actuarial
liabilities
(158)
Recognized
(liability)
(158)
Interest cost
(69)
(69)
(89)
(89)
Past service cost
(19)
(19)
(298)
(298)
554
554
Actuarial gains/(losses) recognized in shareholders' equity
(125)
-
(125)
-
(260)
(260)
(570)
(251)
(251)
(570)
(406)
(976)
-
(425)
(570)
(676)
(251)
The subsidiary Investco will recognize as straight-line expense in the average period of 21 years the post service costs not recognized that will
still be acquired, pursuant to instruction in the paragraph 96 of CPC 33 - Employee benefits. However, in accordance with Instruction CVM no.
695/12, which alters the version of CPC 33 to (R1), past service costs not recognized until the year 2012 will be recognized in full in the year
2013.
In 2013, expected contributions of the subsidiary Investco in the amount of R$19.
These benefit's net expenses recognized in income as a contra entry to Post-employment benefits is as follows:
2012
2011
106
158
Interest cost
69
89
Past service cost
19
298
Special cost due to decrease of benefit
-
Total
194
(554)
(9)
recognized in the year of occurrence. The balance on December 31, 2012, of actuarial loss, net of Income and social contribution taxes is
R$254 (R$171 on December 31, 2011).
Main
assumption
s
976
194
variation
+1%
-1%
1,142
841
209
181
Economic
Inflation
2012
2011
9.30% p.a.
10.25% p.a.
11.44% p.a. in 2013,
decreased linearly to 6% p.a.
up to 2024
11% p.a. in 2012, decreased
linearly to 6%p.a. up to 2023
5.00% p.a.
4.50% p.a.
Demographic
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Disabled
RP 2000 Disabled
Disability table
Wyatt 85 Class 1
Wyatt 85 Class 1
Mortality table
52
22.4
Energest
The subsidiary Energest currently maintains retirement and pension supplementation plans to employees and former employees and other
post-employment benefits, such as medical care and other benefits to retirees.
22.4.1
Complementary retirement and pension plans
22.4.1.1
The subsidiary Energest is the sponsor of the complementary retirement and pension plans, managed by EnerPrev since October 2008,
current managing entity of pension plans so far managed by Fundação Escelsa de Seguridade Social – (“ESCELSOS”), a closed, non
profitable private pension plan entity responsible for managing a group of pension plans to the Company's employees and former employees,
through two benefit plans: Benefit Plan I of the defined benefit type and Benefit Plan II of the variable contribution type, convertible into the
defined benefit type on conversion to lifetime income.
The subsidiary Energest is the sponsor of the complementary retirement and pension plans, managed by Fundação Enersul, a closed, non
profitable private pension plan entity responsible for managing a group of pension plans to the Company’s employees and former employees,
through two benefit plans: Benefit Plan I of the defined benefit type and Benefit Plan II of the variable contribution type, convertible into the
defined benefit type on conversion to lifetime income.
meet this requirement, the subsidiary Energest hired independent actuaries to conduct an actuarial appraisal of these benefits according to
The actuarial appraisal realized as at December 31, 2012 showed that for these pension plans, the fair value of the assets exceeded the
present value of the actuarial liabilities as indicated below:
This plan has the adhesion of 23 collaborators.
2012
Present
value of the
actuarial
liabilities
Interest cost
Actuarial/Gains (losses)
(1,187)
2011
Fair value of
the plan
assets
Recognized
(liability)
Present
value of the
actuarial
liabilities
2,643
1,456
Fair value of
the plan
assets
Recognized
(liability)
1,129
(986)
2,115
(51)
-
(51)
(25)
-
(25)
(118)
-
(118)
(103)
-
(103)
(201)
-
292
(80)
(281)
15
(7)
292
48
7
(48)
-
15
(131)
-
-
243
197
15
(8)
-
243
328
66
8
(66)
15
-
(1,516)
2,829
1,313
(1,187)
2,643
1,456
(1,516)
2,829
1,313
(1,187)
2,643
1,456
The surplus in the defined benefit pension plans reduces the risk of an eventual actuarial liability for the subsidiary Energest. The subsidiary
Energest’s management has not recorded this asset due to the uncertainty of an effective reduction in the Sponsor’s contributions or of future
reimbursement.
In its function as sponsor, the subsidiary Energest makes a monthly payment proportional to the members’ contributions of these plans, as
established in each benefits plan. The subsidiary Energest contributed in the period with R$183 (R$181 on December 31, 2011).
12/31/2012
12/31/2011
12/31/2010
12/31/2009
12/31/2008
80
(328)
2.83%
-12.41%
930
43.97%
(130)
(182)
-4.67%
-7.37%
201
131
13.26%
11.05%
(459)
622
-46.55%
46.42%
(986)
(1,340)
182
21.41%
Plan situation
(1,516)
(1,186)
2,829
2,642
2,115
2,782
2,469
Plan situation
1,313
1,456
1,129
1,442
1,619
53
(850)
12/31/2012
Asset class
Debt instruments
12/31/2011
Allocation % Allocation %
89.12%
88.37%
Shares
8.57%
9.13%
Real estate
0.88%
0.97%
Other
1.43%
1.53%
Total
100.00%
100.00%
Asset class
Debt instruments
2012
Allocation
Expected
target
return
82.40%
10.22%
2011
Allocation
Expected
target
return
82.40%
10.84%
14.40%
16.27%
14.40%
16.31%
Real estate
0.60%
10.01%
0.60%
10.77%
Other
2.60%
10.77%
2.60%
10.77%
Total
100.00%
11.10%
100.00%
11.63%
Shares
The real return on the plan's assets in the year was R$121, compared to the return estimated early in the year of R$292, thus generating an
actuarial loss of R$80 not recorded in shareholders' equity due to the unfeasibility of recognizing the aforementioned surplus.
We present below the composition of the number of plan participants:
Plan I
Plan II
Active participants
-
-
Total
12/31/2012
41
12/31/2011
41
46
-
-
4
4
2
1
1
1
5
2
6
2
4
1
46
47
50
The main assumptions utilized in this actuarial appraisal of the benefits were as follows:
2012
Economic
2011
Plan I
Plan II
Plan I
Plan II
9.30% p.a.
9.30% p.a.
10.25% p.a.
10.25% p.a.
11.10% p.a.
11.10% p.a.
11.63% p.a.
11.63% p.a.
from 6.90% p.a. up to 2016,
2017
from 6.90% p.a. up to 2016,
of 2017
from 7.59% p.a. up to 2015,
of 2016
from 7.59% p.a. up to 2015,
of 2016
5.00% p.a.
5.00% p.a.
4.50% p.a.
4.50% p.a.
Inflation
5.00% p.a.
5.00% p.a.
4.50% p.a.
4.50% p.a.
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Disabled
RP 2000 Disabled
RP 2000 Disabled
RP 2000 Disabled
n/a
Wyatt 85 Class 1
n/a
Wyatt 85 Class 1
Demographic
Mortality table
Disability table
22.4.2
Retirement incentive aid, medical care and other benefits to retirees: Defined benefit
Current
12/31/2012
4
Non-current
12/31/2011
37
12/31/2012
-
12/31/2011
-
108
48
4,981
2,272
20
17
132
102
-
-
4,981
2,272
• Retirement Incentive Aid - AIA – Benefit to employees hired up to December 31, 1981, payable on termination of the labor contract,
irrespective of the reasons for such severance. The AIA guarantees payment of a benefit, the amount of which was calculated considering for
each employee, the proportionality of the period of contribution to the INSS (Brazilian Social Security Service) up to October 31, 1996, the
employee’s salary and the INSS benefit as at October 31, 1996; and
• Medical care and other benefits to retirees - Medical care, dental care, medicines, and when it is proved that there is a special dependent, a
benefit corresponding to 50% of Subsidiary Energest minimum salary.
meet this requirement, the subsidiary Energest hired independent actuaries to conduct an actuarial appraisal of these benefits according to
The actuarial evaluation carried out as of December 31, 2012 determined a present obligation for defined benefit plans, as shown in the
reconciliation of plans obligations:
54
2012
Present
value of the
actuarial
liabilities
2011
Recognized
(liability)
Present
value of the
actuarial
liabilities
Recognized
(liability)
-
-
(2,357)
(2,357)
(143)
(143)
(90)
(90)
Interest cost
(392)
(392)
(177)
(177)
Past service cost
Actuarial gains/(losses) recognized in shareholders'
(155)
(155)
(190)
(190)
(2,086)
(2,086)
(1,907)
(1,907)
Benefits directly paid by the Company
40
40
7
7
(5,093)
(5,093)
(2,357)
(2,357)
(1,353)
(6,446)
(5,093)
(1,508)
(3,865)
(2,357)
The subsidiary Energest will recognize as straight-line expense in the average period of 17 years the post service costs not recognized that
will still be acquired, pursuant to instruction in the paragraph 96 of CPC 33 - Employee benefits. However, in accordance with Instruction CVM
no. 695/12, which alters the version of CPC 33 to (R1), past service costs not recognized until the year 2012 will be recognized in full in the
year 2013.
mostly from the revision of healthcare cost inflation and the change in discount rate in that appraisal. In 2011, the actuarial loss was R$1,907.
The expected contributions to this benefits of the subsidiary Energest for 2013 amount to R$112.
These benefits' net expenses in 2012 recognized in income as a contra entry to Post-employment benefits is as follows:
2012
2011
143
90
Interest cost
392
177
Past service cost
155
190
Total
690
457
recognized in the year of occurrence. The balance on December 31, 2012 of actuarial loss, net of Income and social contribution taxes is
R$2,635.
12/31/2012
12/31/2011
12/31/2010
2,086
1,907
-
32.36%
49.34%
0.00%
Plan situation
(6,446)
(3,865)
(1,651)
Plan situation
(6,446)
(3,865)
(1,651)
Main
assumptions
variation
0%
+1%
-1%
6,202
7,294
5,313
638
728
565
2012
Aid)
Medical care
9.30% p.a.
9.30% p.a.
9.30% p.a.
from 6.90% p.a. up to 2016,
2017
n/a
6.90% p.a.
5.00% p.a.
n/a
5.00% p.a.
n/a
11.44% p.a. in 2013,
decreased linearly to 5.5%
p.a. up to 2024
n/a
5.00% p.a.
5.00% p.a.
5.00% p.a.
n/a
1.50% p.a.
n/a
Economic
Inflation
Aging factor
Demographic
Mortality table
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Disabled
RP 2000 Disabled
RP 2000 Disabled
Disability table
Wyatt 85 Class 1
Wyatt 85 Class 1
Wyatt 85 Class 1
55
2011
Aid)
Medical care
10.25% p.a.
10.25% p.a.
10.25% p.a.
from 7.59% p.a. up to 2015,
2016
n/a
7.59% p.a.
4.50% p.a.
n/a
4.50% p.a.
n/a
11.0% p.a. in 2012,
decreased linearly to 5.5%
p.a. up to 2023
n/a
4.50% p.a.
4.50% p.a.
4.50% p.a.
n/a
1.50% p.a.
n/a
Economic
Inflation
Aging factor
Demographic
Mortality table
22.5
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Gerational
RP 2000 Disabled
RP 2000 Disabled
RP 2000 Disabled
Disability table
Wyatt 85 Class 1
Wyatt 85 Class 1
Wyatt 85 Class 1
EnerPrev – Pension plans of the defined contribution type
EnerPrev is a closed, non profitable private pension plan entities and was created in the end of 2006 in order to centrally manage the pension
plans of companies within the Grupo EDP - Energias do Brasil. EnerPrev manages its own benefit plan of the Defined Contribution type
entered in the CNPB - National Register of Benefit Plans at the National Superintendence for Complementary Pension Funds - Previc and the
Company and its subsidiaries manage contracted PGBL (Free Benefit Generating Plan) through Bradesco Vida e Previdência S.A., not
generating any actuarial liability for the Company and its subsidiaries. The Funding Plan is sustained paritarially by contributions of the
sponsors and of the participant, pursuant to the Benefit Plan Regulation.
In the capacity of sponsors of this type of plans, the Company contributed with R$770 in the period (R$672 on December 31, 2011) and the
companies of Grupo EDP contributed with R$3,102 in the period (R$2,508 on December 31, 2011).
This plan has the adhesion of 66(*) Company's collaborators and 778(*)subsidiaries' collaborators.
(*) Not audited by independent auditors.
23
Parent company
12/31/2012
Payroll
IRPJ / CSLL
INSS & FGTS
Total
9,505
0.00
1,859
11,364
12/31/2011
7,054
0.00
1,353
8,407
Consolidated
12/31/2012
12/31/2011
56,813
260
10,587
67,660
49,891
137
9,136
59,164
The payroll item includes basically a provision for vacation, 13th salary, as well as the provision for profit sharing for the period.
24
Accounts payable related to charges established in the electricity sector legislation are as follow:
Consolidated
Note
Reversal Global Reserve Quota - RGR
Collection quota to the Fuel Consumption Account - CCC
Interest on reversal fund
Energy Development Account - CDE
Financial offsetting for the use of hydric resources
Tariff charges (ECE/ EAEEE)
Energy Efficiency Program - EEP
Inspection fee - ANEEL
Other charges
Total
Current
Non-current
Total
24.1
24.2
24.1
24.1
24.2
Balance at
12/31/2011
23,765
27,305
73
18,607
7,059
31,772
72,676
98,281
1,158
1,713
282,409
Additions
51,971
292,100
875
244,739
39,079
15
31,370
20,088
14,372
12,052
706,661
275,374
7,035
282,409
Monetary
restatement
0.00
0.00
0.00
0.00
0.00
0.00
1,758
1,031
0.00
0.00
2,789
Payments
(68,947)
(305,372)
(875)
(242,951)
(38,403)
(74)
(17,841)
0.00
(14,321)
(11,303)
(700,087)
Write-off
17
0.00
0.00
0.00
0.00
0.00
(10,029)
(59,422)
0.00
0.00
(69,434)
Sale of
companies
(15)
0.00
0.00
0.00
0.00
0.00
(141)
0.00
(3)
0.00
(159)
Balance at
12/31/2012
6,791
14,033
73
20,395
7,735
31,713
77,793
59,978
1,206
2,462
222,179
205,108
17,071
222,179
Research and Development (“R&D”) and Energy Efficiency Program (“EEP”)
Expenditures with R&D and EEP made by the subsidiaries are calculated under the terms of the sector legislation, of the electric energy
concession contracts and are regulated by Normative Resolutions ANEEL nºs 300/08 and 316/08. The subsidiaries are obligated to invest 1%
of the Net operating income adjusted in conformity with the criteria defined by ANEEL, recording the value of liability monthly by competent
period. The liability is restated monthly by the variation of the SELIC rate up to the conclusion of the R&D and EEP (energy efficiency)
projects, when its write-off occurs.
Other charges
Law 12911/09, regulated by circular Official Letters nºs 965/10-SFF/ANEEL and 648/10-SAF/ANEEL, established that the concession and
permit holders for public electrical power distribution services are obliged to collect an additional 0.3% of Net operating incomes utilizing the
same criteria for the constitution of R&D liabilities for the purposes of indemnity the Federal Units that suffered loss of revenues as a result of
ICMS tax collection on fossil fuels used to generate energy for the National Grid.
56
25
Use of Public Property
The subsidiaries Enerpeixe and Investco, as retribution for the grant conceded thereto for exploration of the hydroelectric potentials of the
Peixe Angical and Lajeado plants, respectively, pay to the Federal Government over the lifetime of the concession contracts and while they
are exploring them, monthly installments equivalent to one twelfth (1/12) of the annual sum defined in the concession contracts, restated with
a basis on the annual variation of IGP-M calculated by Fundação Getúlio Vargas (or another index that takes its place) in the months of
October for Enerpeixe and December for Investco.
Total fair value of the obligation referring to the Use of public property until the end of the concession agreement was provisioned and
capitalized as a contra entry to Intangible assets (Note 18) at initial recognition. The provision for payments for Use of Public Property was
recognized in accordance with CPC 25, and CPC 38 was adopted for fair value estimation.
This intangible asset is being amortized over the concession agreement period and the liability is being amortized by payment.
Current and non-current liabilities balances are recognized at present value at the project's implicit rate.
Changes in the year are as follows:
Consolidated
Current
Principal
Charges and monetary restatements
(209)
252
31,993
20,783
21,953
Transfer to current
Balance on December 31, 2012
(20,783)
242,140
Provisions – Current and non-current
Note
26.1
26.2
Civil, tax, labor provisions
Environmental licenses
Dismantling
Total
26.1
231,139
(8)
(19,258)
Amortizations
26
Non-current
20,184
Balance on December 31, 2011
26.3
Parent company
Current
Non-current
12/31/2012
12/31/2011
12/31/2012
12/31/2011
6,429
6,429
5,108
5,108
31,569
31,569
Consolidated
Current liabilities
Non-current
12/31/2012
12/31/2011
12/31/2012
12/31/2011
25,250
25,250
14,088
12,663
29,692
56,443
15,582
20,321
126,224
162,127
171,024
9,404
2,079
182,507
163,453
17,207
1,908
182,568
Provisions for civil, tax and labor contingencies and restricted deposits – current and non-current
The Company and its subsidiaries are parties to lawsuits and administrative proceedings in several courts and with government bodies arising
from the normal course of operations, involving tax, labor, civil and other issues.
26.1.1
Risk of probable loss
Based on information from its legal advisors and the analysis of pending lawsuits, managements of the Company and its subsidiaries have
constituted provisions considered sufficient to cover losses estimated as probable for ongoing lawsuits, as follows:
Parent company
Liabilities
Assets
Write-offs
Labor
Civil
Other
Total
Balance at
12/31/2011
Degrees
1st, 2nd and 3rd
9
1st, 2nd, 3rd and Mgt
15
30,334
30,358
Current
Non-current
Total
Additions
0.00
0.00
8,824
8,824
Reversals
0.00
(15)
(6,338)
(6,353)
Judicial Deposit (Note 11)
Balance at
12/31/2012
11
0.00
37,987
37,998
Monetary
restatement
2
0.00
5,167
5,169
5,108
25,250
30,358
12/31/2012
1,882
0.00
0.00
1,882
12/31/2011
5
0.00
0.00
5
6,429
31,569
37,998
Consolidated
Liabilities
Assets
Write-offs
Balance at
12/31/2011
1st, 2nd and 3rd
54,914
78,862
14,925
30,334
179,035
Judicial Deposit (Note 11)
Degrees
Labor
Civil
Tax
Other
Total
Current
Non-current
Total
Additions
26,102
18,171
138
14,126
58,537
Payments
(21,167)
(17,342)
0.00
(6,556)
(45,065)
Reversals
(7,246)
(15,616)
(406)
(6,338)
(29,606)
15,582
163,453
179,035
Monetary
restatement
10,573
8,391
869
9,909
29,742
Reclassificat
ion
0.00
(10,149)
(7,531)
10,149
(7,531)
Balance at
12/31/2012
63,176
62,317
7,995
51,624
185,112
14,088
171,024
185,112
57
12/31/2012
28,458
27,280
995
0.00
56,733
12/31/2011
24,857
30,479
2,903
0.00
58,239
26.1.1.1
Labor
Bandeirante
Lawsuits filed corresponding to the periods after January 1st, 1998 as per the agreement for the partial spin-off of Eletropaulo - Eletricidade de
São Paulo S.A. Subsequently, pursuant to the Partial Spin-off Agreement of the subsidiary Bandeirante on October 1st, 2001, each
concessionaire (Bandeirante and Piratininga) is responsible for the liabilities corresponding to the employees allocated to the respective
regions taken over by each Company. Responsibility for corporate suits will be taken on according to the percentage proportion of the
controllers (Bandeirante and Piratininga) as determined in the respective spin-off agreement.
Include several lawsuits questioning, among other issues, overtime payments and hazardous work.
The balance provided on December 31, 2012, amounting to R$18,676 (R$18,484 on December 31, 2011).
Escelsa, Energest, Investco, Escelsapar, Enerpeixe and EDP - Energias do Brasil
Refer to several lawsuits questioning, among other issues, overtime payments, hazardous work and reinstatement premiums.
The balance provided on December 31, 2012 amounting to R$44,500 (R$36,430 on December 31, 2011).
26.1.1.2
Civil
Bandeirante
Refer mainly to claims for reimbursement of amounts paid in the form of tariff increases by industrial consumers due to the application of
DNAEE Ordinances 38/86 and 45/86 - the Cruzado Plan, in force from March to November of that year. Original values are restated based on
the system practiced by the Judiciary. As of December 31, 2012, the balance is R$37,158 (R$47,105 as of December 31, 2011), emphasizing:
Proceedings brought by White Martins, namely:
• Lawsuit nº 2000.001.127615-0, running at the 10th Civil Court of the Central Forum of the Judiciary District of Rio de Janeiro, discussing the
existence of impacts resulting from the effectiveness of administrative rulings 38/86 and 45/86 of the dissolved DNAEE, on electric power
consumption tariffs related to the period from September 2000 onwards. In April 2010, the subsidiary Bandeirante complied with a legal
determination of substitution of the letter of guarantee by a judicial deposit in the amount of R$60,951 and in June 2011, a complement of
judicial deposit was made in the amount of R$10,627. The subsidiary Bandeirante submitted various pronouncements and appeals targeting
the suspension of the exaction of the amount, and to reverse the determination of deduction of the percentage of 16.66% on the monthly bills
of White Martins, until the release (June 8, 2011), in payment, of the amount of R$60,951 deposited initially, was authorized without provision
of collateral. On June 10, 2011, White Martins obtained said deposit, monetarily restated in the amount of R$66,072. Notwithstanding the
raising of the aforesaid deposit, the amount of R$10,627 remains on deposit with the court, and there are also appeals pending before the
Court of Appeals of Rio de Janeiro and the Superior Court of Justice discussing the matter. The accounting record was made in order to
reduce the judicial deposit against a decrease in the provision formed for this contingency. The remaining balance as of December 31, 2012 is
R$13,994 (R$11,407 on December 31, 2011).
• Lawsuit No. 583.00.2000.577510-1, filed at the 32nd Lower Civil Court of the Judicial District of São Paulo, challenging the legality of the tax
rate increase introduced by administrative standards 38/86 and 45/86 of the National Department of Water and Electric Energy (DNAEE), and
the consequent refund of the amounts allegedly overpaid during the price freeze period (February to November 1986). In February 2012, the
plaintiff commenced the execution of the adverse judgment and submitted the calculations of the amounts due, i.e., R$ 6,375. The subsidiary
Bandeirante, in turn, deposited the amount due in judicial deposit, but also refuted the calculations of White Martins, with a view to reducing
the amount due to approximately R$ 5.7 million. In view of the acceptance of the opposition filed by the subsidiary Bandeirante, we have
reduced the amount of the reserve recorded to match the updated amount of the escrow deposit. On August 13, 2012, White Martins
performed the release of the restated amount of R$5,889 and Bandeirante released the remaining balance in the amount of R$703. Awaiting
filing of the lawsuit. The balance provided on December 31, 2012 (R$13,213 on December 31, 2011).
Escelsa
Refer mainly to claims for reimbursement of amounts paid in the form of tariff increases by industrial consumers due to the application of
DNAEE Ordinances 38/86 and 45/86 - the Cruzado Plan, in force from March to November of that year. Original values are restated based on
the system practiced by the Judiciary. As of December 31, 2012, the balance is R$2,644 (as of December 31, 2011 there was no balance
provided).
On December 31, 2011, the subsidiary EDP Comercializadora was a party in the Declaratory Action to Void the arbitration award, currently in
progress at the Court of Niterói in the state of Rio de Janeiro, filed by Ampla Serviços e Energia S.A and the risk involved in the proceeding
was related to loss of suit expenses in the case of a potential adverse judgment against the subsidiary EDP Comercializadora.
An agreement was made by and between the parties on November 12, 2012 in order to finalize the court suits relating to the litigation of the
contract signed on June 26, 2002, which gave rise to the reversal of civil contingencies as presented in the chart, see note 5.2.
The balance formed as provision on December 31, 2011 is R$4,433, which was totally reversed on December 31, 2012.
Investco
Indemnities
The lawsuits of a civil nature - indemnities refer largely to the indemnities claimed by parties that consider themselves affected by the filling of
the Lajeado Hydroelectric Power Plant reservoir or that intend to increase the indemnities received from the subsidiary Investco on account of
the aforesaid filling.
Expropriations
Refer to civil lawsuits, resulting from indemnification as expropriation proposed by the subsidiary Investco to fill reservoir of UHE Lajeado, in
which the difference between amount deposited by the subsidiary Investco and the amount estimated by the expropriated. The balance of
judicial deposits on December 31, 2012 and 2011 is R$14,209 and are recorded at the item Construction in service (Note 12).
58
26.1.1.3
Tax
Bandeirante
The subsidiary Bandeirante is facing lawsuits related to VAT in electricity bills, which are classified as probable losses. On December 31,
2012, these cases represent the amount of R$4,285 (R$12,274 on December 31, 2011).
There is also an administrative proceeding involving a requirement relating to the supposed use of undue ICMS credit, originating from the
reversal of debt from cancelled invoices, whose provision on December 31, 2012 is R$219 (this provision did not exist on December 31,
2011).
Escelsa Participações
The National Social Security Institute (INSS) issued a notification demanding social security contribution for disregarding the company's
classification of certain service providers as independent workers and other legal entities, with the argumentation that there are employment
relationships between the service providers and the subsidiary Escelsa Participações. The provision recorded is R$2,446 (R$2,367 on
December 31, 2012) and the lawsuit is awaiting a court decision.
Escelsa
The subsidiary Escelsa is party to litigation regarding claims for service taxes and urban property taxes, which are classified as probable
losses on December 31, 2012, for which provisions recorded amount to R$321 (R$284 on December 31, 2012).
A fine applied by the National Institute of Social Security (INSS) with estimated risk on December 31, 2012 in the amount of R$723 (this
provision did not exist on December 31, 2011) is also being discussed. The proceeding is pending judgment by the Administrative Council of
Tax Appeals (CARF).
26.1.1.4
Other
In the Company, the proceedings classified as Other refer mainly to the commitments covenanted in the exchange process of the control
shares of Enersul with the control shares of Investco formerly belonging to Grupo Rede Energia S.A., relative to the lawsuits of various types
filed against Enersul the generating events of which originated in periods when the control of Enersul was exercised by the Company, the
balance on December 31, 2012 is R$37,987 (R$30,334 on December 31, 2011). For the subsidiaries Bandeirante and Escelsa part of the
balance of this account includes notices of infraction published by ANEEL in an inspection proceeding that is in the appeal phase, in the
amount of R$6,803.
26.1.2
Risk of possible loss
There are ongoing labor, civil and tax proceedings, the loss of which has been deemed as possible. These items are periodically reassessed,
not requiring constitution of provisions in the financial statements and are as follow:
Parent company
Labor
Civil
Tax
Other
Total
Degrees
1st, 2nd and 3rd
12/31/2012
958
4,362
82,689
24,910
112,919
12/31/2011
1,471
3,614
57,358
43,554
105,997
Consolidated
Assets
Assets
Judicial deposit
Judicial deposit
12/31/2012
411
0.00
5,257
0.00
5,668
12/31/2011
405
0.00
4,123
0.00
4,528
12/31/2012
119,410
310,838
722,625
31,425
1,184,298
12/31/2011
91,551
274,807
472,180
47,295
885,833
12/31/2012
6,117
7,990
15,912
0.00
30,019
12/31/2011
6,133
2,541
12,716
0.00
21,390
Among the main claims where losses are deemed as possible, the highlights are as follow:
26.1.2.1
Labor
Escelsa
Among several labor claim lawsuits, there are 28 involving several employees, and challenging changes made in the job and salary plan from
2002 to 2006. In 26 of these lawsuits, the issue is being heard in the Superior Labor Court, and therefore there is still an expectation of court
decisions that may be favorable to the subsidiary Escelsa. In 02 proceedings, for procedural reasons, there was res judicata, but the judgment
has not yet materialized. The estimated amount on December 31, 2012 is R$27,217 (R$21,653 as of December 31, 2011).
26.1.2.2
Civil
Bandeirante
The subsidiary Bandeirante is a party in lawsuit nº 2006.209.009405-0, running at the 7th Civil Court of the Central Forum of the Judiciary
District of Rio de Janeiro, filed by White Martins, discussing the existence of impacts resulting from the effectiveness of administrative rulings
38/86 and 45/86 of the dissolved DNAEE, on electric power consumption tariffs, relating to the period from December 1986 to September
2000. On September 23, 2011, a sentence unfavorable to the subsidiary Bandeirante was rendered, accepting the request by the plaintiff plus
inflation updating and late interest as of June 1, 2011. The subsidiary Bandeirante filed an appeal against such decision, which was partially
granted for the purpose of limiting the sentencing of the subsidiary Bandeirante to the validity period of Administrative Ruling no. 153/86 (in
force until March/87). In light of the aforesaid decision, the subsidiary Bandeirante lodged motions to clarify, which are pending judgment. It is
important to emphasize that there is a pacific understanding in the higher courts to the effect that the amounts paid are only refundable in the
freeze period, a period that is not discussed in this lawsuit, for which reason the degree of risk was maintained as possible. The estimated
amount on December 31, 2012 is R$ 76,017 (R$61,967 on December 31, 2011).
The subsidiary Bandeirante is a party in the public civil action No. 26725-92.2009.4.01.3800, being processed by the 3rd Civil Court of the
Central Judicial District of Belo Horizonte, filed by the Collective Interest Defense Association (ADIC), and claiming indemnity for material
damages arising from the tariff adjustment (Portion "A"). The subsidiary Bandeirante is awaiting a decision by the Public Prosecution Office
for the appeals filed by the Public Attorney's Office against the decision determining that the concessionaires would be excluded as
defendants. The estimated amount on December 31, 2012 is R$48,556 (R$41,071 on December 31, 2011).
Investco
The lawsuits of a civil nature in the subsidiary Investco refer largely to the compensation claimed by parties that consider themselves affected
by the filling of the plant reservoir or that intend to increase compensation received on account of the aforesaid filling, in the amount of
R$87,505 (R$83,112 on December 31, 2011).
Due to their significant number, it is not possible to identify the current level of each one.
59
Escelsa
The subsidiary Escelsa is a party in the public civil action No. 26725-92.2009.4.01.3800, being processed by the 3rd Civil Court of the Central
Judicial District of Belo Horizonte, filed by the Collective Interest Defense Association (ADIC), and claiming indemnity for material damages
arising from the tariff adjustment (Parcel "A"). The subsidiary Escelsa is awaiting a decision by the Public Prosecution Office for the appeals
filed by the Public Attorney's Office against the decision determining that the concessionaires would be excluded as defendants. The
estimated amount on December 31, 2012 is R$21,608 (R$18,277 on December 31, 2011).
Porto do Pecém
Proceeding n° 2008.81.00.012450-9
Public civil lawsuit by the Federal Public Ministry ("MPF") aiming: (i) that SEMACE and IBAMA refrain from issuing licenses to activities in the
area of Industrial-Port Complex Governador Mário Covas up to the Complex licensing, (ii) immediate discontinuance of works of Energia
Pecém and (iii) conditions to enter into agreements by the state of Ceará for new projects at previous environmental licensing of the Industrial
Complex. Cause has no cash value.
Proceeding n° 2009.81.00.006337-9
Writ of Mandamus with injunction request (issued by dependence to Public Civil Lawsuit No. 2008.81.00.012450-9) before (i) state of Ceará,
(ii) Brazilian Environment Institute - IBAMA, of (iii) State Environment Superintendence of the state of Ceará - SEMACE and (iv) Porto do
Pecém Geração de Energia S.A., requiring judicial approval which determines, in sum, that (i) works of implementing the Pecém Energy
Facility is discontinued, in the area of Industrial Complex, until the failures and omissions pointed out by MPF are solved by SEMACE, as well
as that (ii) SEMACE issues renewal of the already granted licenses, or any new environmental license for the project in question only when
said failures and omissions are solved. Cause has no cash value.
Proceeding n° 2009.81.00.016918-2
Public civil lawsuits proposed by the Federal Public Ministry ("MPF"), aiming to protect collective rights and interests related to Indian
community Anacé, seeking to avoid expropriation and resettlement of ethnical group of its traditional land, that is, to protect possible land
rights of Anacé Indians. For that, it requested an injunction to cancel environment licensing of projects developed in the area and
discontinuance of all works. Cause has no cash value.
Proceeding nº 0002218-23.2010.4.05.8100
Public civil lawsuits proposed by the Federal Public Ministry ("MPF"), aiming to protect collective rights and interests related to Indian
community Anacé, seeking to avoid expropriation and resettlement of ethnical group of its traditional land, that is, to protect possible land
rights of Anacé Indians. For that, it requested an injunction to cancel environment licensing of projects developed in the area and
discontinuance of all works. Cause has no cash value.
26.1.2.3
Tax
EDP - Energias do Brasil
The Company is a party to administrative discussions related to the Federal Revenue Service not recognizing a corporate income tax (IRPJ)
negative balance, determined for years 1999/2001, originated from a merged company (Magistra Participações S.A.), and that totals
R$70,875 (R$52,188 on December 31, 2011).
Bandeirante
Among the main claims where losses are deemed as possible, the highlight is the discussion in the administrative sphere regarding ICMS
credits utilized by the subsidiary Bandeirante in the period from July 2003 to December 88,281, referring to amounts of "Annulment/Return of
Sale of Electric Energy" in the amount of R$111.498 on December 31, 2012 (R$102,887 on December 31, 2011). The subsidiary Bandeirante
has presented defense and is awaiting judgment. Risk value substantially increases due to the new adjustment criteria of State Law
13.918/2009 and SF Resolution 98/10.
It also has an administrative proceeding relating to the supposed use of undue ICMS credit, originating from the reversal of debt of cancelled
invoices, in the amount of R$22,556 on December 31, 2012 (there was no provision on December 31, 2011). The subsidiary Bandeirante has
presented defense and is awaiting judgment.
The subsidiary Bandeirante has other tax contingencies amounting to approximately R$167,977 on December 31, 2012 (R$145,121 on
December 31, 2011) referring to the administrative discussion of non-homologated offsets of credits arising from IRPJ, CSLL, PIS and
COFINS overpayments in 2001, as a result of COSIT Opinion 26/02 application (taxes on RTE).
The subsidiary Bandeirante filed a lawsuit relating to Cofins of the period of 1993 to 1995, in a joinder with AES Eletropaulo. The dispute
refers to the right to future use of amnesty brought by Provisional Measures nos. 1858-6 and 1858-8, granted to taxpayers that failed to pay
taxes as they considered them inappropriate. In the second instance judgment, the right to amnesty was partially confirmed, excluding the
portion concerning the charges of Decree Law 1025-69. The external attorneys sponsoring the lawsuit classified the contingency referring to
the charges as a possible loss. On December 31, 2012, the restated amount is R$102,485. The proceeding is currently awaiting judgment of
an Appeal to the Higher Courts.
Escelsa
INSS tax authorities issued collection notices on: (i) not considering self-employed and other legal entities, claiming the existence of
employment bond between service providers and the subsidiary Escelsa; (ii) the levy of INSS tax on profit sharing and scholarship payments
made to employees that are pension plan members. These tax collection notices amount to R$7,401 on December 31, 2011 (R$9,205 on
December 31, 2011) and are currently awaiting an administrative decision.
Several Municipal Authorities - Subsidiary Escelsa is discussing in court the collection of ISSQN allegedly levied on services related to the
supply of electric power. Also includes payment demand on land occupied by posts for the electricity network and public lighting. These
lawsuits amount to R$9,363 on December 31, 2012 (R$8,654 on December 31, 2011) and are awaiting lower court decision.
The subsidiary Escelsa also has administrative and court proceedings with regard to tax offsetting issues not ratified by the federal tax
authorities, based on credits recognized in court, as well as negative IRPJ and CSLL balances resulting from IRPJ, CSLL, PIS, and COFINS
overpayments made in 2001, as a result of applying Opinion COSIT 26/02 (taxes on RTE) totaling R$102,670 on December 31, 2012
(R$78,209 on December 31, 2011).
The subsidiary EDP Comercializadora is discussing in court the levy of ICMS on interstate electric power sales transactions amounting to
R$16,165 on December 31, 2012 (R$14,296 on December 31, 2011) is collateralized by bank guarantees. The suit is awaiting judgment. Risk
value substantially increases due to the new adjustment criteria of the State of Minas Gerais.
There are administrative discussions about the collection of IRPJ, CSLL, PIS and COFINS debts referring to 2004/2006, arising from the non
homologation of these taxes credit offset. These proceedings amount to R$13,044 on December 31, 2012 (R$10,915 on December 31, 2011).
60
26.1.2.4
Other
26.1.3
Risk of remote loss
Refer to the contingency described in note 26.1.1.4
In addition to this, in the subsidiary companies Bandeirante, Escelsa, Energest, Escelsapar, Investco and Lajeado there are labor, civil and tax
related proceedings underway, for which the chances of losing have been estimated as being remote, and for these actions the court deposit
balances on December 31, 2012 stood at R$29,391 (R$27,725 on December 31, 2011).
Subsidiary Bandeirante, through the Energy Trade Association of the State of São Paulo (SindiEnergia) filed two collective injunctions against
the Finance Department of the state of São Paulo to obtain suspension of the effects of Decrees No. 55421/10 and 55867/10. Both lawsuits
gained a favorable court decision, and in one of the cases an appeal has already been heard by the São Paulo Court of Justice, confirming a
decision favorable to distribution companies. The second case is pending trial at the appeal court. Company and its external advisors classify
that the case has a remote likelihood of unfavorable outcome. On December 31, 2012, according to the terms of the Decrees, the estimated
amount is R$117,031.
26.2
The amount of R$22,067 as of December 31, 2012 (R$37,528 as of December 31, 2011) refers mostly to provisions for the costs of providing
construction licenses, installing and operating generating power plants, related to requirements of governmental agencies. Those costs are
either associated to the Basic Environmental Project or are in addition to it, and their main objectives are reforestry, acquisition and
regularization of rural and urban areas, recovery and improvement of road, electric and sanitary infrastructures, and implementation of
conservation units. Those costs are recognized against the heading of Property, plant and equipment, since they are associated to the Basic
Environmental Project, and are therefore treated as power plant costs. The balance of this provision is recognized for the best estimate and is
monetarily restated with basis on the general market price index (IGP-M).
26.3
As part of the agreement for the acquisition of ECE Participações by CEJA and the transfer of the additional 10% of the concession of the Jari
Hydroelectric Power Plant to ECE, contingent considerations were agreed with the former owners. Up to December 31, 2012, CEJA and ECE
had paid the amount of R$96,011, referring to the extension of the concession agreement, the increase in the plant's capacity, the increase in
assured power and approval of the Special Incentive Regime for Infrastructure Development (REIDI). The amounts of R$21,843 (CEJA) and
R$2,427 (ECE), relating to approval with all the competent Government Authorities and publication of the fiscal benefit of rate differential due
in interstate purchases of machinery, apparatuses, equipment, their parts and other materials, as well as imported products without a similar
national product (DIFAL), subject matter of Agreement ICMS no. 53, of July 6, 2001 and R$5,422 (CEJA) relating to the execution by the
Company of the CCEAR of 2010 with the respective counterparty relating to the percentage of 1.99% of the electricity sold at auction
004/2010, remained outstanding.
The indirect subsidiary ECE Participações is in the pre-operating stage and presented a loss for the period of R$8,371.
27
27.1
Capital stock
The Company's equity capital is of R$ 3,182,716, represented by 476,415,612 shares, all of which ordinary registered shares with no par
value, with the following main characteristics:
• Capital stock is exclusively represented by ordinary shares. Each ordinary share will grant the holder the right to one vote in the resolutions
of the Company's General Meetings;
• The shares are indivisible in relation to the Company. When the share belongs to more than one person, the rights vested thereupon will be
exercised by the joint ownership representative.
• The issuance of beneficiary parts by the Company is hereby prohibited;
• The Company is authorized to increase the capital up to the limit of two hundred million (200,000,000) ordinary shares regardless of statutory
reform, by decision of the Board of Directors, which will also be responsible for establishing the terms of the issue, including price, term and
form of its payment.
• The Company may issue shares, debentures convertible into ordinary shares and subscription bonuses within the limit of the authorized
capital; and
• At the sole discretion of the Board of Directors, it is possible to exclude or reduce the right of preference in the issues of shares, debentures
convertible into shares and subscription bonuses, whose placement is performed through sale at a stock exchange or public subscription,
under legal terms, and within the limit of the authorized capital.
The composition of the capital stock on December 31, 2012, and 2011 is shown as follows:
12/31/2012
Shareholder
Energias de Portugal Investments and Services, Sociedad Limitada (1) (2)
Balwerk – Consult. Econômica e Particip., Soc.Unipessoal Ltda. (1) (2)
EDP - Energias de Portugal, S.A. (2)
Board members and directors
Treasury shares (4)
Other (3)
Total
Number of
shares
168,185,223
74,786,742
0.00
48
840,675
232,602,924
476,415,612
% interest
35.31
15.70
0.00
0
0.18
48.81
100.00
12/31/2011
Number of
shares
38,234,188
24,928,914
17,827,553
57
280,225
77,534,267
158,805,204
Controlling
% interest
Shareholder
24.08
yes
15.70
yes
11.23
0.00
0.18
48.81
100.00
(1) shareholder with more than 5% of the voting shares.
(2) Foreign-owned company.
(3) There are 232,602,924 outstanding shares out of the total 476,415,612 that is, around 48.81% of the total quantity of shares.
(4) Treasury stock does not have equity rights.
On April 10, 2012, in the event of the General and Special Shareholders' Meeting, the Company's Fiscal Council was formed.
61
0.00
0.00
0.00
0.00
Calculation of free float:
12/31/2012
Number of
shares
Number of shares of controlling shareholders
Number of treasury shares
Amount of shares for board members and directors
Total of non-outstanding shares
Total of shares
Total of outstanding shares
12/31/2011
Number of
shares
% interest
% interest
242,971,965
51.01
80,990,655
51.01
840,675
0.18
280,225
0.18
48
243,812,688
0.00
0.00
57
81,270,937
476,415,612
0.00
158,805,204
232,602,924
77,534,267
48.81
0.00
0.00
0.00
48.81
On July 18, 2011, EDP - Energias de Portugal, the Company's controlling shareholder, completed the process of public offering of secondary
distribution of ordinary, nominative, book-entry, non-par shares, free from charges or lien, issued by the subsidiary EDP - Energias do Brasil
and held by the Company, which resulted in the sale of 21,911,460 shares, decreasing its current interest from 64.80% to 51,00% in the
capital stock of EDP - Energias do Brasil.
EDP's shares split
The split of the Company's ordinary stock, in a manner that each ordinary share existing on the date of the aforementioned General and
Special Shareholders' Meeting, which took place on April 10, 2012, and starts to be represented by three (3) shares of the same class and
with the same voting and economic rights for each existing share on the GSSM's date.
The proposed stock split is intended to contribute to further expanding and diversifying the Company's shareholder base, thereby increasing
the liquidity of the Company's shares traded on the São Paulo Stock, Commodities and Futures Exchange (BM&FBOVESPA).
The financial institution that will be the custodian of the Company's book-entry shares is Itaú Corretora de Valores S.A., which will be
responsible for automatically crediting the new shares into the Shareholders' accounts in proportion to the number of shares registered in the
stock ledger at the time of the Annual Shareholders' Meeting.
In compliance with CPC 41 - Earnings per Share, paragraph 64, determines that the change made to the number of shares, the calculations
per share in these financial statements and in the financial statements of prior periods should be restated to reflect the new number of shares.
Change in the interest
According to the market notice of August 9, 2012, the Company's controlling shareholder, EDP Energias de Portugal (EDP Portugal), direct
holder of 53,482,659 shares (11.23%) in the Company's capital, and indirect holder of 189,489,306 shares (39.77%) in the Company's capital,
through its subsidiary companies Energias de Portugal Investments and Services, Sociedad Ltda. (EDP I&S) and Balwerk - Consultadoria
Econômica e Participações, Sociedade Unipessoal, Lda. (Balwerk), with respective stakes in the Company's capital of 114,702,564 shares
(24.08%), and 74,786,742 shares (15.70%), transferred all of its direct interest in the Company to EDP I&S.
As a consequence of the transfer performed, the ownership interests in the Company previously held directly by EDP Portugal are now held by
EDP Portugal through its subsidiary EDP I&S, which will be the holder of 168,185,223 shares, representing 35.30% of the Company's capital.
The aforesaid change in the equity interest neither aims or nor results in any change in the Company's controlling interest, as EDP Portugal
continues as parent company of the firm, maintaining indirect total interest of 51% in its voting and total capital.
27.2
The Company's dividend policy, pursuant to the 120th meeting of the Board of Directors held on March 5, 2008, proposes the payment of a
minimum amount equivalent to fifty percent (50%) of the adjusted net income, calculated in conformity with articles 189 and following articles
of Corporation Law, which can be reduced when thus required by a legal or regulatory provision or, when recommendable in view of the
financial situation and/or future prospects of the Company.
The Annual Shareholders' Meeting held on April 10, 2012 approved the allocation of net income, with payment of dividends of R$239,249 and
interest on capital of R$131,000 referring to 2011, to be paid throughout 2012, without adjustments, to the shareholder that holds Company
ordinary shares as of the date of the Annual Shareholders' Meeting.
Net income for the year
Legal reserve - 5%
Allocation of net income:
Intermediary dividends - JSCP
Number of shares
Dividends per share - R$ - JSCP
27.3
12/31/2012
341,644
(17,082)
324,562
324,562
130,422
194,140
476,415,612
0.27424
Reserves
12/31/2012
Capital reserves
Goodwill on merger of parent company
Result in the sale of treasury shares
Other capital reserves
Cashflow hedge
Deferred IRPJ/CSLL
Profit reserves
Legal
Profit retention
Total
12/31/2011
35,348
60,250
48,942
144,540
0.00
5,612
(83,976)
26,643
(51,721)
0.00
175,940
824,342
194,140
1,194,422
1,287,241
35,348
60,250
0.00
95,598
0.00
8,319
(77,706)
23,591
(45,796)
0.00
158,858
981,003
239,249
1,379,110
1,428,912
0.00
0.00
Besides the full allocation of net income for the year, the Company will also be allocating additional dividends in the amount of R$45,687,
using prior year income retained in the revenue retention reserves.
62
27.3.1
Reserve for profit
Reserve for profit has been constituted pursuant to Article 196 of Law 6404/76 in support of the Company's Capital Expenditures' Program as
set forth in the capital budgets submitted to the Ordinary General Shareholders' Meetings.
27.3.2
The changes in Other comprehensive income in the period is as follows:
Note
22
37
2.2 "x" and 21
Cashflow hedge
Balance at
12/31/2011
5,491
(51,286)
Gains
19,542
-
Losses
(256,907)
(2,707)
(6,270)
(45,795)
19,542
(265,884)
Provision of
IRPJ/CSLL
80,705
919
2,132
83,756
Transfer to
profit
reserve
156,660
-
Balance at
12/31/2012
3,703
(55,424)
156,660
(51,721)
Up to the end of the year ended December 31, 2012, R$12,540, referring to the cash flow hedge, was recognized in the income statement.
27.4
The non-controlling shareholders correspond to the interest that other shareholders hold in our subsidiaries. The balance includes founders’
shares issued by Lajeado and belonging to Centrais Elétricas Brasileiras S.A. – Eletrobrás.
27.4.1
Founders' shares
The subsidiary Lajeado, at the Extraordinary General Meeting of February 15, 2006, approved the change in the Bylaws, creating 53,210,337
nonconvertible, nominative preference shares carrying no voting rights, that will be entitled to receive dividends 10% higher than the sum
attributed to each ordinary share, and 10,000 founder's shares, with no par value, tradable and foreign to the capital stock, conferring to their
bearers right to potential credit against the subsidiary Lajeado, in an amount equivalent to 10% of the annual income determined by the
subsidiary Lajeado, in compliance with Law no. 6,404/76. These shares as well as the founders’ shares were fully subscribed and acquired on
this date by Eletrobrás. The balance on December 31, 2012 and 2011 is R$451,376.
The duration of the founders’ shares is until October 31, 2032, when they will they will be automatically converted into Class "A" preference
shares (Article 14 of the Bylaws) corresponding to 5.084% of the total shares issued by the subsidiary Lajeado (Article 14, Paragraphs 1 and 2
of the Bylaws), if they have not been redeemed. The redemption can occur at any time at the decision of the subsidiary Lajeado until the end
of the duration of the founders’ shares.
28
Dividends – assets and liabilities
Consolidated
Liabilities
Parent company
Assets
12/31/2012
Bandeirante
Escelsa
Energest
Enerpeixe
Investco
Lajeado
Evrecy
Shareholders - Energias do Brasil
Eletrobrás
Governo de Tocantins
Furnas Centrais Elétricas S.A.
Total
34,819
38,099
23,168
9,298
37,791
0.00
39,868
0.00
0.00
0.00
0.00
0.00
183,043
Liabilities
12/31/2011
48,907
38,066
47,048
5,599
26,520
0.00
41,451
428
0.00
0.00
0.00
0.00
208,019
12/31/2012
12/31/2011
-
12/31/2012
-
0.00
0.00
0.00
0.00
0.00
0.00
0.00
113,393
0.00
0.00
0.00
113,393
0.00
0.00
0.00
0.00
0.00
0.00
0.00
115,631
0.00
0.00
0.00
115,631
0.00
0.00
0.00
0.00
13,601
0.00
0.00
113,392
46,382
2,903
25,194
201,472
The dividends will be received up to December 31, 2012.
29
Revenue
Parent company
Other operating income
Subtotal
(-) Deductions from operating income
PIS/COFINS
ISS
Revenue
R$
R$
2012
2011
1,961
1,384
1,961
1,384
(184)
0.00
(126)
0.00
(58)
1,777
0.00
1,384
The revenue refers to agreements on consulting services rendered to EDP Renováveis.
63
12/31/2011
0.00
0.00
0.00
0.00
6,937
0.00
0.00
115,631
49,344
3,020
17,680
192,612
Consolidated
Nº of consumers (*)
2012
2011
Supply (**)
Residential
Industrial
Commercial
Rural
Government
Public lighting
Public service
Own consumption
(-) Transfer to TUDS (use of the distribution system) - captive clients
Unbilled supply
Electricity supply
Short-term energy
Trading
Total supply
Distribution and transmission system
TUSD - others
TUSD - captive clients
TUSD - Unbilled
Transmission System Use Tariff
Revenue from construction
Other operating income
Subtotal
(-) Deductions from operating income
R&D
Other charges
CCC
CDE
RGR
PIS/COFINS
ICMS
ISS
Revenue
(*) Not audited by independent auditors.
(**) Supply revenue is presented net of ICMS.
29.1
MWh (*)
2012
R$
2011
2012
2011
Reclassified
2,494,001
23,210
223,870
168,664
18,506
2,686
2,434
341
0.00
0.00
2,933,712
2,412,583
22,777
209,260
163,608
18,105
2,553
2,317
306
0.00
0.00
2,831,509
5,337,635
4,084,633
3,328,179
707,151
567,339
549,853
474,590
14,419
0.00
0.00
15,063,799
5,127,530
4,289,840
3,044,384
665,734
528,627
528,320
439,975
12,937
0.00
0.00
14,637,347
1,889,672
1,105,923
1,069,358
149,622
198,030
101,623
106,377
0.00
(2,387,275)
39,211
2,272,541
1,737,468
1,138,932
950,341
132,677
177,039
94,287
97,966
0.00
(2,215,330)
11,194
2,124,574
8
1
0.00
9
2,933,721
207
207
0.00
0.00
0.00
0.00
0.00
2,933,928
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2,933,928
13
0.00
0.00
13
2,831,522
145
145
0.00
0.00
0.00
0.00
0.00
2,831,667
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2,831,667
8,808,905
499,877
0.00
9,308,782
24,372,581
9,305,188
9,305,188
0.00
0.00
0.00
0.00
0.00
33,677,769
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
33,677,769
8,880,034
972,267
0.00
9,852,301
24,489,648
9,413,934
9,413,934
0.00
0.00
0.00
0.00
0.00
33,903,582
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
33,903,582
648,212
152,490
1,486,789
2,287,491
4,560,032
3,053,388
661,071
2,387,275
(3,005)
8,047
235,736
282,746
8,131,902
(1,564,619)
(51,559)
(55,858)
(292,100)
(244,739)
(53,272)
(862,758)
(3,197)
(1,136)
6,567,283
601,092
53,564
933,357
1,588,013
3,712,587
2,872,194
649,513
2,215,330
882
6,469
303,747
238,734
7,127,262
(1,421,853)
(48,558)
(48,821)
(298,906)
(223,282)
(41,244)
(758,063)
(2,140)
(839)
5,705,409
Revenues from Exceeding of Demand and Reactive Energy Surplus - Bandeirante
ANEEL determined, through REN no. 463/11, that the amounts originating from the billing of fines for Surpassing of Demand and consumption
of Surplus Reactive Power, as from the contractual date of tariff review referring to the 3rd tariff review cycle, in the case of the Company, as
of October 23, 2011, determined the accounting as Special obligations previously recorded as Operating Income in progress of the amounts
resulting from and on the occasion of the 4th tariff review cycle, 2015 in the Company's case, the amount accumulated in this subaccount, up
to the date of the asset appraisal report, should be transferred to the normal account of Special obligations, when it will receive the normal
treatment of the contra account of depreciation of the respective assets allocated as investments originating from these Special obligations.
Despite this determination, the Company, through the Brazilian Association of Electric Power Distributors (Abradee), challenged the
aforementioned accounting treatment of these revenues in court.
On February 8, 2012, the preliminary judicial authorization requested by ABRADEE on Ordinary Action No. 003357.85.2012.4.01.3400, being
heard in the 6th Court of Federal Court of Distrito Federal (JFDF) was fully granted. The judicial decision had the effect of: a) suspending the
treatment of revenues from exceeding of demand and reactive energy surplus mentioned in paragraphs 9 to 11 of item 3.1.1 ("Exceeding of
Demand and Reactive Energy Surplus") of item 3.1 ("Revenues Inherent to Distribution System") of Sub-Module 2.7 ("Other Revenues")
attached to ANEEL Regulatory Resolution No. 463/11; b) suspending the determination of separate accounting of those revenues as if they
were special obligations; and c) granting a preliminary authorization of an inhibiting nature to determine that ANEEL is to abstain from
practicing any act tending to require fulfillment of said provisions (which precludes the adoption of other measures for achieving the same
effect).
On June 19, 2012, the Judge assigned by the Federal Regional Court of the 1st Region stayed the bill of review lodged by ANEEL, on which
occasion the injunction initially granted by the first instance court was suspended and, accordingly, the effectiveness of ANEEL Regulatory
Resolution No. 463/11 was reestablished.
In the opinion of legal counsel, the probability of an unfavorable outcome in this lawsuit is remote; however, the Company has recorded the
Special Obligation. As of December 31, 2012, the balance is R$50,132 (R$7,287 as of December 31, 2011).
30
Operating expenses
Parent company
2012
Operating expenses
General and
administrati
With sales
ve
Other
Manageable
Personnel, Managers and Private Pension
Plan Entity
Material
Depreciation
Amortization
Rental and leases
Other
Total
0.00
0.00
0.00
0.00
0.00
0.00
0.00
484
484
36,519
1,580
29,646
6,064
145
0.00
3,673
(21,895)
55,732
2011
Total
0.00
0.00
0.00
0.00
0.00
2,471
0.00
13,972
16,443
64
36,519
1,580
29,646
6,064
145
2,471
3,673
(7,439)
72,659
Total
23,618
457
23,980
348
11,844
(1,988)
2,609
7,917
68,785
Consolidated
2012
Operating expenses
General and
administrati
Rendered to
ve
Other
third-parties
With sales
Service cost
Not manageable
Foreign currency - Itaipu
Local currency
Inspection fee
Financial compensations
With electric
energy
production
433,851
3,065,692
737,216
-
5,533
4,236,759
5,533
Operation
-
-
-
490
1,630
5,606
-
-
-
14,405
39,079
53,484
2011
Total
Total
372,622
1,930,200
651,398
13,799
34,882
-
433,851
3,065,692
737,216
14,405
39,079
5,533
4,295,776
3,002,901
Manageable
Personnel, Managers and Private Pension
Plan Entity
Material
Depreciation
Amortization
-
-
-
-
189,407
21,714
208,465
96,313
177,618
Allowance for doubtful accounts/net losses
Rental and leases
Gains and losses in the deactivation and sale
of assets
Fair value of indemnifiable financial assets
Infrastructure construction costs
Other
-
-
676
-
Total
31
4,236,759
5,533
5
-
12,849
707,042
707,042
235,736
25
243,492
243,492
7
-
132,339
5,371
146,770
26,645
39,841
-
322,236
28,715
360,848
122,958
217,459
287,618
26,566
346,570
125,691
219,898
9,640
-
12,808
-
27,836
19,138
9,640
27,836
13,489
37,256
45,560
10,120
51,093
2,180
11,827
11,827
8,295
372,069
372,069
(102,439)
19,482
(35,983)
17,501
Financial income
Parent company
2012
Financial income
Revenue from financial investments
Monetary variation and monetary addition from purchased energy
Swap and hedge operations
Monetary restatement of judicial deposits
Monetary restatement of judicial deposits - REFIS
Monetary restatement - loan agreements
Monetary variations - domestic currency
SELIC on taxes and social contributions to offset
Mark-to-market - MTM
Monetary variations - foreign currency
Discounts obtained
Remuneration of preferred shares
Contractual fine
Other financial revenue
Financial expenses
Monetary variation and monetary addition from purchased energy
Interest and fines on taxes
Debt charges
Monetary variations - domestic currency
Monetary variations - foreign currency
Monetary restatement of environmental licenses
Interest and fines on ICMS
Adjustment to present value - Preferred shares
Swap and hedge operations
Provision and monetary restatement for civil, tax and labor contingencies
SELIC - Free energy
Provision for devaluation of securities
Monetary restatements - REFIS
Mark-to-market - MTM
Monetary restatement - loan agreements
Monetary restatement for the use of public property
Adjustment to present value of the use of public property
(-) Capitalized interest
Other financial expenses
Total
2011
Consolidated
2012
2011
12,676
1,351
0.00
0.00
0.00
6,108
0.00
5,092
0.00
0.00
0.00
903
0.00
0.00
955
27,085
15,223
275
0.00
0.00
0.00
8,600
0.00
5,690
0.00
0.00
0.00
831
0.00
0.00
28
30,647
46,524
85,998
8,859
3,141
6,026
0.00
103
22,823
807
7
1,314
(3,253)
0.00
1,700
17,913
191,962
68,474
77,529
0.00
2,561
8,044
0.00
0.00
20,024
0.00
0.00
1,000
3,374
4,720
0.00
24,530
210,256
0.00
0.00
(11,158)
0.00
0.00
0.00
0.00
0.00
0.00
(5,178)
0.00
(10,497)
(3,172)
0.00
0.00
0.00
0.00
0.00
0.00
0.00
(19,816)
(49,821)
(22,736)
0.00
(11)
(21)
0.00
0.00
0.00
0.00
0.00
0.00
(4,120)
0.00
(12,808)
(8,393)
0.00
0.00
0.00
0.00
0.00
0.00
0.00
(18,925)
(44,278)
(13,631)
(4,266)
(145)
(330,700)
(3,364)
(39,394)
(1,631)
(756)
(2,953)
(3,582)
(27,831)
(5,006)
(10,497)
(10,356)
0.00
0.00
1,986
(32,245)
217
(26,870)
105,312
(45,591)
(437,672)
(245,710)
(240)
(11)
(312,023)
(4,084)
(51,613)
(1,012)
(1,261)
(2,717)
(11,515)
(68,567)
(6,136)
(12,808)
1,179
(239)
(1,184)
791
(38,138)
3,923
(21,481)
88,088
(54,651)
(493,699)
(283,443)
65
19,138
(102,439)
235,736
42,831
1,298,447
5,594,223
303,747
56,410
1,510,529
4,513,430
32
Net income before income and social contr. taxes
Rate
IRPJ & CSLL
Adjustments to reflect current rate
IRPJ & CSLL on permanent additions and exclusions
Donations
Non deductible losses
Non deductible fines
Non deductible expenses
Bonus to management
Research and development
Equity accounting result
Founders' shares
REFIS program
Interest on own capital
Other
Deferred and unrecognized IRPJ & CSLL
(Addition) Reversal of permanent differences
Prior social year adjustment - Income tax and social
contribution
Deemed profit adjustment
Additional IRPJ
PAT
Rouanet Law
Sport
FIA
SUDENE/ ADA
Income and social contribution tax expenses
Current rate
33
Parent company
Income tax
Social contribution
2012
2011
2012
2011
Consolidated
Income tax
Social contribution
2012
2011
2012
2011
342,887
25%
(85,722)
0.00
0.00
0.00
(503)
(68)
(5)
0.00
(333)
0.00
109,126
0.00
0.00
(19,046)
0.00
0.00
(4,382)
488,919
25%
(122,230)
0.00
0.00
0.00
(275)
(43)
(1)
0.00
(102)
0.00
142,460
0.00
(1,011)
(16,870)
0.00
0.00
(626)
342,887
9%
(30,860)
0.00
0.00
0.00
(181)
(25)
(2)
0.00
(120)
0.00
39,286
0.00
0.00
(6,855)
0.00
0.00
(1,577)
488,919
9%
(44,003)
0.00
0.00
0.00
(99)
(15)
0.00
0.00
(37)
0.00
51,285
0.00
(364)
(6,073)
0.00
0.00
(225)
724,451
25%
(181,113)
0.00
0.00
0.00
(1,310)
(5,978)
(26)
(391)
(857)
0.00
(725)
0.00
0.00
55,996
(799)
(28,786)
(15,406)
905,010
25%
(226,253)
0.00
0.00
0.00
(923)
(7,273)
(26)
(471)
(635)
715
(847)
(4,903)
4,463
54,187
(138)
(3,618)
(5,931)
724,451
9%
(65,201)
0.00
0.00
0.00
(472)
(2,153)
(9)
(141)
(310)
0.00
(261)
0.00
0.00
20,161
(293)
(10,491)
(5,546)
905,010
9%
(81,451)
0.00
0.00
0.00
(332)
(2,616)
(9)
(170)
(228)
257
(306)
(1,765)
1,606
19,508
(85)
(1,302)
(2,132)
0.00
0.00
24
0.00
0.00
0.00
0.00
0.00
(909)
0.00
0.00
24
0.00
0.00
0.00
0.00
0.00
1,326
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
(334)
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
469
1,020
14,497
409
585
1,223
160
178
29,805
(131,518)
883
9,517
302
329
2,220
0.00
0.00
30,635
(147,767)
453
4,866
0.00
0.00
0.00
0.00
0.00
0.00
(59,397)
354
3,100
0.00
0.00
0.00
0.00
0.00
0.00
(65,571)
0.27%
-0.27%
0.10%
-0.10%
18.15%
16.33%
8.20%
7.25%
Earnings per share
The Company's basic earnings per share for the years presented is calculated by dividing the net income attributable to the holders of
Company ordinary shares by the weighted average number of ordinary shares held by the shareholders.
During the reporting year, the Company had no liability financial instruments convertible into Company shares, or transactions that had a
dilutive or anti-dilutive effect on the earnings per share of the period. Therefore, the "basic" earnings per share that was calculated for the
period equals the "diluted" earnings per share, in accordance with the requirements of CPC 41. The calculation of "basic and diluted" earnings
per share is presented in the table below:
Net income for the year attributable to the Company's
shareholders
Parent company
2012
2011
Consolidated
2012
2011
341,644
341,644
490,714
490,714
Weighted average number of ordinary shares held by the
controlling shareholders (thousand)
475,575
475,575
475,575
475,575
Basic and diluted per shares (Reais/shares)
0.71838
1.03183
0.71838
1.03183
The stock split, performed on April 10, 2012 as mentioned in Note 27.1, which did not cause a change in the value of share capital, must be
considered in the earnings per share calculation of the year in which the event took place, as well as in the prior reporting year for comparison
purposes.
34
Financial instruments
In compliance with CPCs 38, 39 and 40 approved by Resolutions CFC no. 1.196/09, 1.197/09 and 1.198/09 and subsequent alterations, the
Company performed a valuation of its financial instruments, including the derivatives, when applicable.
34.1
General considerations
The Company maintains operations with financial instruments. The management of these instruments is executed by means of operating
strategies and internal controls aiming to ensure credit, liquidity, safety and profitability. The contracting of financial instruments with hedge
objectives is performed by means of a periodic analysis of the exposure to the financial risks (foreign exchange, interest rate etc.), which is
reported regularly through risk reports made available to Management. In compliance with the Financial Risk Management Policy of Grupo
EDP, and with a basis on periodic analyses consubstantiated by the risk reports, specific strategies are defined for the mitigation of financial
risks, which are approved by Management, for the effective operation of aforesaid strategy. The control policy consists of permanent
monitoring of the conditions contracted versus conditions in force in the market through operating systems integrated to the SAP platform.
The Company does not perform investments in derivatives or any other risk assets on a speculative basis. The results obtained with these
operations are in line with the policies and strategies defined by Management.
The administration of the risks associated with these operations is performed through the application of policies and strategies defined by
Management and include the monitoring of levels of exposure of each market risk, forecast of future cash flows and establishment of limits of
exposure. This policy also determines that the updating of information in operating systems, as well as the confirmation and effective
operation of transactions with the counterparts, shall be performed with the appropriate segregation of duties.
66
34.2
Fair value
Fair value is the amount by which the asset may be exchanged, or a liability settled, between parties that know the business and have the
interest to make it, in a transaction without advantages to any of the parties.
The fair value concept addresses several different measurement methods intended to reliably measure an amount. Some mathematical
models were developed for that.
To determine fair value, the Company projects financial instruments flow until the end of operations, considering contract standards, including
post-fixed rates, and using the future (interbank investment average rate) average DI disclosed by BM&FBovespa as the discount rate&.
Some carrying amounts are equivalent to fair value because these financial instruments balances are substantially similar to those that would
be obtained had they been traded in the market.
Financial instrument transactions are presented in the Company's statement of financial position at their carrying amounts, equivalent to their
fair value except for certain loans, financings and debt and debenture charges, which in this case, are different from its fair value.
Parent company
Fair value
12/31/2012
12/31/2011
Financial assets
Current
Accounts receivable
Related parties
Non-current
Accounts receivable
Related parties
Financial liabilities
Current liabilities
Suppliers
Non-current
Debentures
Related parties
Book value
12/31/2012
12/31/2011
99,054
3,402
10,698
222
19,806
230,222
1,121
15,638
222
33,011
99,054
3,402
10,698
222
19,806
230,222
1,121
15,638
222
33,011
20,602
153,771
307,555
21,018
73,441
374,673
20,602
153,771
307,555
21,018
73,441
374,673
7,897
6,446
7,897
6,446
460,674
768
469,339
109
6,555
460,674
768
469,339
109
6,555
12/31/2011
12/31/2012
12/31/2011
572,378
895,868
572,378
895,868
4,530
4,165
4,530
4,165
-
797
-
797
1,352,308
963,226
1,352,308
963,226
Consolidated
Fair value
12/31/2012
Book value
Financial assets
Current assets
Accounts receivable
Related parties
Income receivable
Other credits - derivatives
359
-
359
-
24,856
53,969
24,856
53,969
6,150
4,825
6,150
4,825
19,806
33,011
19,806
33,011
-
2,783
-
2,783
Non-current assets
Accounts receivable
21,324
23,897
21,324
23,897
690,278
482,285
690,278
482,285
40,294
63,657
40,294
63,657
Related parties
69,488
2,223
69,488
2,223
48,939
12,821
48,939
12,821
12,594
-
12,594
-
2,863,304
2,543,527
2,863,304
2,543,527
1,033,443
703,742
1,033,442
703,742
435,535
107,923
435,535
107,923
Current liabilities
Suppliers
Debentures
350,519
389,057
348,653
392,881
Derivatives
16,553
78,917
16,553
78,917
28,435
20,184
21,953
20,184
Debentures
1,052,633
860,637
1,052,633
860,637
Loans and financing
2,376,902
2,075,682
2,355,258
2,108,032
Derivatives
72,196
65,196
72,196
65,196
242,140
231,139
242,140
231,139
5,608,356
4,532,477
5,578,363
4,568,651
67
The additional information on the assumptions used for determining the fair values are disclosed below, taking into account their timing and
the weight of each financial instrument.
For Cash and cash equivalents, Management applies its risk policies, and the balance represents the cost plus interest, with immediate
liquidity. Under Management's policies, investments are consolidated by investee and credit rating in order to allow evaluating the
concentration and credit risk exposure. That maximum exposure is also measured considering the shareholders' equity of the Financial
Institution.
Receivables comprise preferred shares of classes A, B and C, and refer to an issuance by subsidiary Investco, with the condition, stated in
article 8 of that subsidiary's by-laws, that shareholders' rights include a fixed cumulative annual dividend of 3% of their respective ownership
interest.
Due to this characteristic, these shares were classified as receivable financial instruments as they meet the definition of financial assets, since
the subsidiary does not have the right to avoid the remittance of cash or other financial asset to another entity, as determined in item 19 of
CPC 39.
The estimate of fair value considered the conditions above for the payment of dividends. Annual dividend payment was considered until 2033
(end of the concession of the subsidiary Investco) and discounted to present value at the rate of 8.70% p.a.
Subsidiaries Bandeirante and Escelsa recognize an amount receivable from the Concession grantor due to the unconditional right of receiving
cash at the end of the concession, as provided for in the contract, as indemnity for the construction services carried out and not received as
service provisions related to the concession. These financial assets are recorded at the right's present value and are calculated based on the
value of assets pertaining to the concession and that will be reversible at the end of concession.
For Consumers and concessionaires, the present value of consumer debt installments is calculated with basis on capital remuneration rates
regulated by ANEEL on the tariffs of energy distribution companies (investment remuneration average rate). The contra entry of the
adjustments to present value of accounts receivable is against financial income of the Company.
The balance of the pledges and restricted deposits' account presented at its fair value, in compliance with financing agreements with BNDES
and a bank consortium, recognized as part of the agreements' guarantees, as specified in Note 21, and the short-term power transactions in
CCEE, and in the non-current portion refers basically to deposits of subsidiaries Santa Fé, Pantanal and Enerpeixe pegged to BNDES debt.
Rede Energia group shares are recorded as available for sale and marked to market by means of Bovespa quotations. (Note 37)
Other credits (Liabilities) - Derivatives, are calculated internally under the discounted cash flow method based in market sources disclosed by
BM&FBovespa. Measured at fair value by means of policies adopted by the Company's management to mitigate the risk of exposure to rates
and foreign exchange. Evidencing is described in Note 34.6 for Derivative financial instruments. They are composed by cash flow hedges at
Pecém, Escelsa and Bandeirante.
The balance in Trade accounts payable is composed mostly by energy supply agreements and network use charges at rates established by
the market regulated by ANEEL; since that balance is continuously changed no fair value methods are applied to this heading.
Debentures, loans, financing and debt charges are valued by the pricing model individually applied for each transaction, taking into account
future payment flows, with basis on contractual conditions and discounts to present value at rates obtained through market interest rate
curves, having as a basis, whenever available, the information obtained from the BM&FBovespa website. Thus, a security's market value
corresponds to its value at maturity (redemption value) brought to present value by the discount factor.
Related parties account comprises agreements for cost sharing under ANEEL regulation, and loan agreements without conflicting interest,
under real market conditions considering only due amounts without any additions whatsoever.
The amount under the heading Use of public property refers to a financial instrument stated at amortized cost with restatement by the general
market price index (IGP-M) incurred through the statement of financial position date. The balances of current and long-term liabilities are
stated at present value, considering the project's implied 6% rate which represents the average cost of capital at the time the public property
use concession agreements were entered into by subsidiaries Enerpeixe and Investco.
Classification of financial instruments:
Parent company
12/31/2012
Financial assets
Accounts receivable
Pledges and restricted
deposits
Financial assets available for
sale
Related parties
Suppliers
Debentures
Related parties
Loans and
receivables
24,004
164,469
188,473
Fair value
through
profit or loss
99,054
-
Held to
maturity
-
12/31/2011
Available for
sale
-
-
222
-
99,054
222
19,806
19,806
12/31/2012
Other at
amortized
cost
Total
7,897
7,897
460,674
460,674
768
768
469,339
469,339
Total
99,054
24,004
222
19,806
164,469
307,555
12/31/2011
Other at
amortized
cost
Total
6,446
6,446
109
109
6,555
6,555
68
Loans and
receivables
22,139
89,079
111,218
Fair value
through
profit or
loss
230,222
230,222
Held to
maturity
-
Available for
sale
-
222
-
222
33,011
33,011
Total
230,222
22,139
222
33,011
89,079
374,673
Consolidated
12/31/2011
12/31/2012
Financial assets
Loans and
receivables
Fair value
through
profit or loss
6,150
572,378
-
Income receivable
Accounts receivable
Consumers and
concessionaires
25,854
-
Financial assets available for
sale
Related parties
-
-
-
Available for
sale
-
572,378
6,150
690,278
-
895,868
-
25,854
690,278
28,062
483,082
1,031,708
-
Held to
maturity
Available for
sale
Total
-
-
895,868
-
-
-
28,062
483,082
1,031,708
-
-
-
1,392,602
-
-
-
73,796
-
73,796
-
-
66,790
-
66,790
-
-
-
19,806
19,806
-
-
-
33,011
33,011
69,847
12,594
-
-
69,847
12,594
2,223
-
2,783
-
-
2,223
2,783
584,972
73,796
2,863,305
1,545,075
898,651
66,790
33,011
1,494,453
710,084
12/31/2012
Derivatives
Loans and
receivables
-
-
Suppliers
Debentures
Total
-
1,392,602
Held to
maturity
Fair value
through
profit or
loss
2,543,527
12/31/2011
Other at
amortized
cost
1,033,442
1,488,168
Total
1,033,442
1,488,168
2,792,660
264,093
5,578,363
2,792,660
264,093
5,578,363
Fair value
through
profit or loss
144,113
144,113
Other at
amortized
cost
703,742
968,560
Total
703,742
968,560
2,500,913
251,323
4,424,538
2,500,913
144,113
251,323
4,568,651
In 2012, the distributors Bandeirante and Escelsa reclassified the account of indemnifiable financial assets from the loans and receivables
category to the available for sale category. This financial instrument is the right to compensation at the end of the concession (Note 15).
The measurement was made with a basis on the appraisal report of these assets issued by the Granting Power. Accordingly the assets were
henceforth measured at fair value, while they were previously valued at amortized cost.
The main uncertainties regarding this financial instrument are due to the risk of non-recognition of part of these assets by the Granting Power
and of their respective replacement prices at the end of the concession.
Regarding the other subsidiaries, the financial Instruments were not restated in the year.
The hierarchy of financial instruments according to fair value regulates the need for more consistent information, adjusted to the Company's
external environment. The Company's instruments fair value measurement requirements:
(a) Level 1– prices agreed on in active markets for identical assets and liabilities;
(b) Level 2 - differ from asset and liability prices negotiated in active markets included in Level 1, directly or indirectly; and
(c) Level 3 - for assets and liabilities that are not based on market variables. They are generally obtained internally or from sources not
considered as from the market.
The methodology applied to classify the Company's financial instruments fair value in levels was based on an individual analysis that searched
for similar transactions in the market. Comparison criteria were structured considering terms, amounts, grace period, indices and active
markets. The simpler and easier is the access to comparative information, the more active is the market; the more restrict is the information,
more restrict is the market to measure the instrument.
Parent company
Fair value measurement
12/31/2012
Identical
markets
Level 1
Similar
markets
Level 2
Financial assets
99,054
19,806
118,860
62,025
19,806
81,831
37,029
37,029
Consolidated
Fair value measurement
12/31/2012
Financial assets
Suppliers
Derivatives
Related parties
Identical
markets
Level 1
Similar
markets
Level 2
Similar
markets
Level 3
572,378
690,278
649
19,806
43,600
1,326,711
310,153
19,806
329,959
262,225
649
43,600
306,474
690,278
690,278
124,489
1,103,533
88,749
133,489
1,450,260
-
124,489
1,103,533
88,749
133,489
1,450,260
-
-
69
-
34.3
Market risk
The market risk is presented as the possibility of losses due to the fluctuation of variables that impact market prices and rates. This fluctuation
impacts virtually all segments, thus representing financial risks.
Loans and financing, and debt charges presented in note 21 refer to funds raised from IEB, BNDES, Eletrobrás, Banco do Brasil and Banco
Santander. Contract standards for financial liabilities acquired by the Company generate risks related to these exposures. As of December 31,
2012, the Company is subject to market risks associated to TJLP, CDI, US dollar and Libor.
As TJLP and CDI are interest rate risks, we took into consideration that the Brazilian economy has a favorable scenario for robust growth and
infrastructure investments. Inflation under control and credit offer are key risk factors to consider when raising funds linked to these indices.
It should be considered that inflation growth and increasing SELIC, the cost of these transactions shall be higher.
Considering the strong currency and the country risk under control, loans denominated in US dollars and Euros are considered favorable. In
addition, the exchange rate risk in foreign currency transactions is considered. In an economy where exchange rate fluctuation is very high,
this exposure may be a relevant factor to make the transaction not possible. The Company maintains derivatives used for hedge and swaps to
control all exchange and interest rate exposures.
Considering that the market rate (or opportunity cost of capital) is defined by external agents, taking into account the risk premium compatible
with activities in the sector, and lacking other alternatives or different market hypotheses and/or estimate methodologies with respect to
company business and special features of the sector, the market value of this loan package comes close to its book value, as do the
remaining assets and liabilities evaluated.
34.3.1
Sensitivity analysis
In the chart below, scenarios for the different indices used by the Company were considered; from interest rate and other indices fluctuation to
transactions maturity. The probable scenario was adopted by the Company, based mainly on macroeconomic assumptions obtained from the
Focus report of the Brazilian Central Bank, scenarios II and III consider a risk increase of 25% and 50%, respectively, and scenarios IV and V
consider a risk reduction of 25% and 50%, respectively.
These sensitivity analyses were prepared in accordance with CVM Instruction nº 475/08, and are intended to measure the impact of changes
in the market variables on each financial instrument of the Company. Nevertheless, the settlement of transactions involving these estimates
can result in amounts different from those estimated due to the subjectivity that is contained in the process used in the preparation of these
analyses. Information in the chart demonstrates the impact of each risk variation in the Company's results.
Parent company
Scenario (I)
Aging - probable scenario
Risk
Up to 1 year
2 to 5 years
Financial instrument assets
CDI
2,100
-
Financial instrument liabilities
CDI
(39,063)
(36,963)
Transaction
Above 5
years
Probable
Scenario (II)
Risk
increase by
25%
Scenario (III) Scenario (IV) Scenario (V)
Risk
Risk
Risk
increase by reduction by reduction by
50%
25%
50%
-
2,100
525
1,050
(525)
(1,050)
(3,340)
-
(42,403)
(10,130)
(20,086)
10,311
20,810
(3,340)
-
(40,303)
(9,605)
(19,036)
9,786
19,760
Scenario (I)
Scenario (II)
Scenario (III) Scenario (IV)
Scenario (V)
Risk
Risk
Risk
increase by reduction by reduction by
50%
25%
50%
13,579
(6,891)
(13,849)
(115,880)
59,047
118,873
(14,057)
7,029
14,057
(116,358)
59,184
119,081
Consolidated
Aging - probable scenario
Transaction
Financial instrument assets
Risk
CDI
CDI
CDI
Transaction
TJLP
-
Up to 1 year
10,823
(149,002)
(5,632)
(143,811)
2 to 5 years
1,709
(112,139)
(22,038)
(132,468)
Above 5
years
(444)
(444)
Probable
12,532
(261,141)
(28,114)
(276,723)
Risk
increase by
25%
6,818
(58,299)
(7,029)
(58,509)
-
(104,201)
(104,201)
(328,003)
(328,003)
(236,883)
(236,883)
(669,087)
(669,087)
(105,369)
(105,369)
(210,088)
(210,088)
105,286
105,286
209,754
209,754
(152)
(152)
(4,781)
(4,781)
-
(4,933)
(4,933)
(119,252)
78,594
(40,658)
(238,504)
157,188
(81,316)
119,252
(78,594)
40,658
238,504
(157,188)
81,316
(12,892)
(14,635)
(27,527)
(63,714)
(24,952)
(88,666)
(33,401)
(16,534)
(49,935)
(110,007)
(56,121)
(166,128)
(8,682)
(15,222)
(23,904)
(17,364)
(30,445)
(47,809)
8,682
15,222
23,904
17,364
30,445
47,809
Transaction
Dollar
Dollar
Transaction
Libor - 6M
Libor - 6M
The futures curves of the financial indicators CDI, TJLP, Libor and US$ are as projected by the market and are aligned with the expectations
of the management of the Company and of its subsidiaries (in the case of the consolidated statement).
The indicators had their intervals as presented below: CDI between 7.75% and 8.00%; TJLP between 5.00% and 5.50%; Libor 6M between
0.55% and 4.55%; and Dollar between 1.81 and 1.85.
34.4
Liquidity risk
Liquidity risk relates to the Company's capacity to settle obligations assumed. In order to determine the Company's financial capacity to meet
commitments assumed, maturities of funds raised and other obligations are also disclosed. More detailed information about the contracted
amounts and those released is presented in note 21.
The Company's management uses only credit lines that allow operating leverage; this premise is reaffirmed by the characteristics of funds
effectively raised.
Covenants are financial indicators that control the Company's financial health, as required by fund raising contracts. Non-compliance with
covenants of loan and financing agreements may result in an immediate disbursement or early maturity of a liability with defined flow and
periodicity. The list of each contract's covenants is presented in note 20. Up to December 31, 2012, all covenants of contracted obligations
were fully complied with.
The Company's most expressive financial assets are presented in captions Cash and cash equivalents (Note 4) and Consumers and
concessionaires (Note 5) and Indemnifiable financial asset (Note 15). As of December 31, 2012, the Company has in cash an immediately
available amount and cash equivalents, which are immediate-liquidity financial investments promptly convertible into known cash amounts.
Consumer and concessionaires balances presented in note 5 comprise the estimated flow of receivables. Indemnifiable financial asset, the
balance presented corresponds to the amount receivable from the Concession Grantor at the end of the concession and it is measured at the
new replacement value.
70
34.5
Credit risk
The credit risk is the possibility that the Company does not realize its rights, and this is directly related to the accounts cash and cash
equivalents, consumers and concessionaires, pledges and committed deposits, among others.
In the electric power industry, the operations carried out are reported to the regulatory agency, which maintains updated information on power
volume produced and consumed. Permitting the preparation of plans to guarantee the system operation without interferences or interruptions.
Power is traded through auctions and contracts, among other mechanisms, bringing reliability and control on default. The priority of
concession agreements for power distribution is to serve the market without excluding low income population and areas with lower population
density.
Accepting and serving these new consumers dwelling in the concessionaire's operating area is a standard of the concession agreement.
For the distribution of electricity, the financial instrument that may expose the subsidiaries Bandeirante and Escelsa to credit risk is Trade
accounts receivable; accounting standards are based on the regulatory agency's standards and assumptions approved by the Company's
management.
The diversification of sale of power to this consumer basis makes the Companies' receivables less volatile; estimated rate of credit default is
8.65%, as shown in Note 5.
The main tool used to mitigate the risk of non-realization of financial assets is to suspend power supply to consumers in default. Before the
suspension, the Companies make administrative collections, bill notices, etc. The Company offers to consumers several communication
channels, as follows call centers, service stores and Internet.
Short-term investments are also a source of credit risk. The management of these financial assets is done through operating strategies based
on internal policies and controls, aimed at assuring liquidity, security and profitability.
Specific mitigation strategies of the Financial Risk Management Policy of Grupo EDP are periodically conducted based on information from
risk reports. The control policy consists of permanent monitoring of the conditions contracted versus conditions in force in the market through
operating systems integrated to the SAP platform. The Company does not perform investments on a speculative basis. The results obtained
with these operations are in line with the policies and strategies defined by Management.
The Company contracts short-term investments only from financial institutions rated as low risk by rating agencies in order to guarantee better
profitability and reliable results.
Management understands that the contracted financial investments do not expose the Company to significant risks that might generate
material losses in the future.
34.6
A derivative financial instrument is the instrument whose value is influenced by the fluctuation of a financial instrument rate or price, does not
require an initial investment or the initial investment is much lower that that of similar contracts and is always settled in a future date.
All cash flow hedge transactions were conducted by the jointly-owned subsidiary Porto do Pecém, while swaps were conducted by subsidiaries
Bandeirante and Escelsa. As of December 31, 2012, the Company's derivatives are recorded at market value.
Gains and losses arising from the derivatives fluctuations in the year were recorded in results of the subsidiaries and jointly-controlled
subsidiaries; hedge accounting is in shareholders' equity.
The hedge transaction qualified for hedge accounting of the jointly-controlled subsidiary Porto do Pecém is the purchase of a NDF in the
amount of US$327,000 maturing on October 1, 2012, to cover the Us dollar debt with IDB. On September 25, 2012 there was the settlement
of the NDF in the amount of R$128,274. On the same date there was the contracting of NDFs in the amount of USD327,000 to restore the
cash flow hedge structure. The NDFs were contracted with maturities up to May 15, 2015.
The derivative instrument qualified as cash flow hedge was so classified to provide effective coverage as required in the contracting, and
based on subsequent evaluations of term.
The changes in the fair value of the derivative instrument designed as cash flow hedge are recognized directly in Shareholders' equity,
proportionally to the stake in the jointly-controlled subsidiary.
The fair values of the derivatives held by jointly-controlled subsidiaries Bandeirante and Escelsa are calculated internally by a discounted cash
flow method based on market sources disclosed by BM&FBovespa.
Consolidated
12/31/2012
12/31/2011
Cash flow
Company
Hedge
Cash flow
SWAPS
Total
Hedge
SWAPS
Total
Asset leg
Libor + 1.275% p.a.
Escelsa
-
40,368
40,368
-
-
Libor + 1.275% p.a.
Bandeirante
-
40,368
40,368
-
-
-
US$ + Libor 4.375 % p.a.
Bandeirante
-
-
-
-
1,221
1,221
US$ + Libor 4.375 % p.a.
Bandeirante
-
-
-
-
214
214
US$ + Libor 4.375% p.a.
Bandeirante
-
-
-
-
766
766
US$ + Libor 4.375 % p.a.
Bandeirante
-
-
-
-
613
Var. US$ + Libor
Porto do Pecem
Var. US$ + Libor
Porto do Pecem
613
-
183,200
174,642
139,841
-
139,841
131,601
-
131,601
323,041
80,736
403,777
306,243
2,814
309,057
183,200
-
-
174,642
Liability leg
93.40% of CDI
Escelsa
-
34,881
34,881
-
-
93.40% of CDI
Bandeirante
-
34,881
34,881
-
-
-
104.69% of CDI
Bandeirante
-
-
-
-
2,450
2,450
118.94% of CDI
Bandeirante
-
-
-
-
816
816
109.70% of CDI
Bandeirante
-
-
-
-
1,324
1,324
109.50% of CDI
Bandeirante
-
-
-
934
Var. US$ + 5.79% p.a.
Porto do Pecem
226,442
-
226,442
212,227
-
212,227
Var. US$ + 5.82% p.a.
Porto do Pecem
180,416
-
180,416
166,363
-
166,363
R$
Porto do Pecem
4,932
-
4,932
69,017
-
69,017
US$
Porto do Pecem
-
-
-
17
-
17
R$
Porto do Pecem
-
-
-
22
-
Total
-
-
934
22
411,790
69,762
481,552
447,646
5,524
453,170
(88,749)
10,974
(77,775)
(141,403)
(2,710)
(144,113)
71
Gains and losses from the Company's subsidiaries derivative transactions on December 31, 2012 and December 31, 2011 are:
Consolidated
Gains and losses of derivative financial instruments
12/31/2012
Shareholders'
Financial
equity
result
Derivatives with protection purpose
Exchange risks
Interest and currency rate risks
Total
4,926
(9,741)
(4,815)
(24,989)
(30,435)
(55,424)
12/31/2011
Shareholders'
Financial
equity
result
(9,701)
(3,389)
(13,090)
(27,606)
(23,680)
(51,286)
Derivatives' maturities are shown in the chart.
Consolidated
Derivatives net
Maturity
2013
2014
After 2014
Receivable/(payable)
(16,555)
(18,364)
(42,856)
(77,775)
In compliance with CVM Instruction 475/08, information on derivative financial instruments should include the hedged transaction motivation,
the instrument fair value, the impact on the Company's results for the year and the main characteristics of the contracted instrument. These
details are shown on the table.
Description
Swap
Assets
Liabilities
Assets
Subsidiary
Counterpart
Inception
Maturity
Escelsa
Banco
Goldman
Sachs
2/9/2012
Libor 6M +
1.275 % p.a.
2/20/2018
93.40% of CDI
Bandeirante
Liabilities
Banco
Goldman
Sachs
2/9/2012
2/20/2018
Position
Libor 6M +
1.275 % p.a.
93.40% of
CDI
Consolidated
US$/EUR notional
12/31/2012
12/31/2011
19,740
-
R$/US$ notional
12/31/2012
12/31/2011
34,071
Fair value
12/31/2012
12/31/2011
-
40,368
-
4,588
34,881
5,487
-
4,588
Bandeirante
Banco
Citibank
3/19/2004
2/14/2012
Libor + 4.375 % p.a.
104.69% of CDI
-
34,071
-
40,368
-
4,588
-
-
-
-
34,881
-
-
-
651
-
-
1,897
-
Bandeirante
Banco
Citibank
12/14/2004 Libor + 4.375 % p.a.
118.94% of CDI
2/14/2012
-
244
-
-
Bandeirante
Banco JP
Morgan
4/5/2006
2/14/2012
Libor + 4.375 % p.a.
109.70% of CDI
-
407
-
-
Bandeirante
Banco JP
Morgan
4/5/2006
2/14/2012
Libor + 4.375 % p.a.
109.50% of CDI
-
325
-
-
Assets
Assets
Liabilities
Assets
Liabilities
Porto do
Pecém
Banco
Citibank
-
214
816
(602)
(36)
12
(48)
8
545
(537)
-
766
1,324
(558)
(59)
19
(78)
187
522
(335)
-
613
934
(321)
(49)
13
(62)
150
369
(219)
183,200
174,642
-
-
226,442
(43,242)
212,227
(37,585)
5,447
(5,447)
1,399
(1,399)
139,841
131,601
-
-
180,416
(40,575)
166,363
(34,762)
4,294
(4,294)
1,432
(1,432)
-
-
-
-
-
-
-
(1,205)
1,205
69,017
(69,017)
(914)
914
10,102
(10,102)
-
1,713
(1,713)
676
-
1,174
-
846
-
Porto do
Pecém
Banco
Citibank
Porto do
Pecém
Banco
Citibank
2/4/2012
Var. USD + Libor
Var. USD +
5.79% p.a.
89,505
-
182,904
-
01/10/2021
-
-
-
-
02/04/2012
Var. USD + Libor
68,322
-
139,615
-
01/10/2024
Var. USD +
5.82% p.a.
-
-
-
-
11/16/2009
100% Libor
-
-
-
-
11/16/2011
100% USD +
2.0895% p.a.
-
-
-
-
403
716
(313)
-
Liabilities
-
(97)
32
(129)
Assets
Liabilities
4,588
-
1,221
2,450
(1,229)
Assets
Liabilities
-
-
-
Assets
Liabilities
-
19,740
5,487
Assets
Liabilities
Effects on Result
12/31/2012
12/31/2011
-
-
-
NDF
Purchased
Sold
Porto do
Pecém
Banco
Citibank
10/17/2007
11/16/2011
USD
R$
-
-
-
-
-
Notional EUR
12/31/2012
12/31/2011
Purchased
Sold
Purchased
Sold
Porto do
Pecém
Porto do
Pecém
Banco
Citibank
BTG Pactual
06/30/2009
01/16/2012
06/30/2009
01/16/2012
EUR
R$
EUR
USD
54,784
31,795
Notional USD
12/31/2012
12/31/2011
-
-
Notional EUR
12/31/2012
12/31/2011
Purchased
Sold
Porto do
Pecém
BTG Pactual
06/30/2009
01/16/2012
EUR
R$
72,392
111,950
64,973
-
1,713
(1,713)
-
-
-
807
(807)
17
(17)
715
(715)
(64)
64
-
2,412
22
2,412
22
(2,412)
(22)
(2,412)
(22)
Notional R$
12/31/2012
12/31/2011
-
72
147,932
34.7
Capital management
The purpose of the Group's capital management is to safeguard the continuous operation of the Group to offer return to shareholders and
benefits to other stakeholders, as well as maintaining an ideal capital structure to reduce costs.
In order to maintain or adjust its capital structure, the Group may review its dividend payment policy, return capital to shareholders and even
issue new shares or sell assets to reduce its indebtedness level.
Consolidated
EŽƚĞ
Total loans and debentures
Less: cash and cash equivalents
20 and 21
4
Net debt
Total shareholders' equity
Total capital
2012
2011
4,280,828
3,613,586
(572,378)
(895,868)
3,708,450
2,717,718
6,350,203
6,547,638
10,058,653
9,265,356
36.87
Financial leverage rate - %
29.33
35
Non-cash transactions
In accordance with CPC 03 (R2), investing and financing transactions not requiring the use of cash or cash equivalents should not be included
in the statement of cash flows. During the reporting year, the subsidiaries' activities that did not involve cash and, consequently, are not
included in the statement of cash flows, are as follows:
The amount of R$ 4,138 of the jointly-controlled subsidiary Porto do Pecém refers to the changes in the cash flow hedge which was not paid in
cash and cash equivalents as of December 31, 2012.
The subsidiary ECE Participações performed Advance for future capital increase in the amount of R$78,300.
The subsidiaries Companhia Energética do Jari and ECE Participações and the jointly-controlled subsidiary Porto do Pecém performed a
capitalization of debt charges in the amount of R$96,409 in Property, plant and equipment.
The subsidiaries Bandeirante and Escelsa capitalized debt charges in the amount of R$8,903 in Intangible assets.
36
36.1
Contractual commitments and guarantees
Contractual commitments
As of December 31, 2012, commitments for short- and long-term financial debts and other short- and long-term liabilities (which are included
in the financial statements) and the remaining purchasing obligations and responsibilities related to operating rentals (which do not appear in
the financial statements) are presented by due dates, as follows:
Parent company
12/31/2012
Note
Short and long-term financial debts include interests to become overdue
Total
20 and 21
460,674
1,041
48,671
510,386
Liabilities from operating rentals
Obligations from purchases
Up to 1 year
1,041
35,601
36,642
From 1 to 3
years
460,674
13,070
473,744
Consolidated
12/31/2012
Note
Short and long-term financial debts include interests to become overdue
Liabilities from operating rentals
Obligations from purchases
Disassemblies
Total
Up to 1 year
From 1 to 3
years
From 3 to 5
years
Above 5 years
20 and 21
4,280,828
800,741
2,138,175
439,368
902,544
25
26
26
26
71,337
38,591,372
264,093
29,692
22,067
2,079
40,744
4,866,279
21,953
29,692
12,664
-
30,308
9,318,720
39,261
9,403
-
285
6,396,812
34,290
-
18,009,561
168,589
2,079
43,261,468
5,772,073
11,535,867
6,870,755
19,082,773
Contractual commitments of the Company and subsidiaries referred to in the table above are at present value and essentially reflect
agreements and commitments necessary to the normal course of the company's operating activities. For the items not appearing in the
financial statements the discount rate used was the Company's average cost of capital.
Obligations from purchases essentially include responsibilities related to the long-term agreements referring to the product and service
provision in the scope of the operating activities of the companies of the Group.
73
36.2
Guarantees
Type of guarantee provided
Parent company
12/31/2012
12/31/2011
Amount
Amount
Consolidated
12/31/2012
12/31/2011
Amount
Amount
^ŚĂƌĞŚŽůĚĞƌΖƐĐŽͲƐŝŐŶĂƚƵƌĞ
ůŽĐŬĞĚĚĞƉŽƐŝƚ
39,724
19,610
400,547
222
222
73,851
66,789
ĂŶŬůĞƚƚĞƌŽĨŐƵĂƌĂŶƚĞĞ
ŽƌƉŽƌĂƚĞŐƵĂƌĂŶƚĞĞ
ZĞĐĞŝǀĂďůĞƐŝŶŐƵĂƌĂŶƚĞĞ
WƌŽŵŝƐƐŽƌǇEŽƚĞƐ
95,893
7,879
502,759
237,680
-
-
1,050,424
890,911
-
-
298,541
277,647
-
-
1,151,803
1,292,197
>ŝĞŶŽŶƐŚĂƌĞƐ
/ŶƐƵƌĂŶĐĞďŽŶĚ
WůĞĚŐĞŽĨZŝŐŚƚƐ
217,244
-
-
1,572,060
2,047,840
8,560
-
177,397
163,400
-
-
716,299
585,318
Shareholder's co-signature A co-signature is a personal guarantee for payment of a security. The co-signatory promises to pay a debt if the
debtor does not do so. Once the security has expired, the creditor may charge both debtor and co-signatory.
On December 31, 2012, the balance of the Parent company and Consolidated, in full, is related to the life insurance contracts.
Blocked deposit: these are deposits in a reserve account in compliance with loan agreements entered into with financial institutions, mostly
with BNDES, Note 11.
As of December 31, 2012, the balance, entirely in the parent company, refers to judicial deposits for tax lawsuits and court actions. Entirely in
the Consolidated, refers to loan and financing agreements.
Bank letter of guarantee: an agreement whereby a financial institution, the guarantor, warrants compliance of an obligation by its customers
(principals), which may be granted for several types of transactions and in those related to foreign trade. A letter of guarantee is nothing more
than a written ancillary commitment issued by the financial institution.
On December 31, 2012, the balance of the Parent company and Consolidated, in full, is related to the loans and financing contracts.
Corporate guarantee: A guarantee that ensures satisfaction to a creditor for an obligation assumed by the debtor, if he does not do so. The
corporate guarantees were issued by EDP Energias do Brasil and by EDP Eletricidade de Portugal S.A for the Group's subsidiaries.
As of December 31, 2012, the balance, entirely, refers to loan and financing agreements.
Receivables in guarantee: Article 28-A in the General Law of Concessions (Law no. 8987/95), which provides for the likelihood of public
utilities assigning under a fiduciary arrangement a portion of their operating credits as security in long-term loan agreements - of at least five
years - intended for investments in the concession. Public utilities may assign their receivables in guarantee of loans entered into by these
concessionaires, under the Securitization of Receivables model, in which a project is secured by future operating revenues arising from the
project itself, after becoming operational.
On December 31, 2012, the full balance is related to the energy sale agreements.
Promissory notes: this is a promise to pay, whereby the issuer commits itself directly with the beneficiary to pay the latter a certain sum of
money.
Pledge of shares: It is a right that consists of the delivery of shares as a guarantee.
As of December 31, 2012, the balance of Lien on shares entirely refers to loan and financing agreements. The final responsibility for the
shares provided as guarantees at subsidiaries Santa Fé, Enerpeixe, Investco and Porto do Pecém, belong to EDP - Energias do Brasil in the
proportion of its ownership interest.
Insurance bond Guarantee insurance is a type of guarantee for government agencies and private companies, the purpose of which is to
guarantee the adequate fulfillment of the obligations set forth in the contract executed by the parties, as described in the policy. In private
companies, we find this type of insurance in contracts entered into with third parties, and its purpose is to eliminate or annul the risk of noncompliance by their suppliers, service providers etc.
On December 31, 2012, the balance, in full at the Parent Company, is related to a warranty of participation in AUCTION 02/2012- CCEE. In
the consolidated statement, it refers, in its majority, to a builder’s warranty.
Pledge of Rights: Pledge of emerging rights of the concession of Lajeado, Assis Chateaubriand (Pantanal), and Peixe Anglical (Enerpeixe)
hydroelectric power plants, and Francisco Gros (Santa Fé) small hydroelectric power plant, comprehending but not limited to the following
items: a) the right to generate electricity; b) the electricity to be generated; and c) guarantees established in energy purchase and sale
agreements in a regulated environment.
37
Refer to the acquisition of 5.63% of preferred shares, corresponding to 3.16% of all the shares of Denerge S.A., a close company that holds
interest in companies from the electricity sector. In this negotiation, the Company had the option to convert Denerge shares into Rede Energia
S.A. preferred shares, within a period of up to two years as from September 11, 2008, at the price of a possible public offer. After this period,
if the public offering does not take place, the Company should exercise the option to concert the shares within one year at the fixed price of
R$5.68 per share.
On September 15, 2011, the option for converting was exercised, resulting in the transfer of Denerge shares held by EDP - Energias do Brasil
to shares of Rede Energia S.A., with recognition of a mark-to-market loss against income for that year, in the amount of R$12,808, with contra
entry in Other comprehensive income.
As of December 31, 2012, the change in the balance of R$13,205 was recognized as follows: R$2,707 within Other comprehensive income
and R$10,497 within Financial expense.
74
38
Segment information
A business segment is an identifiable component of the Group engaged in providing an individual product or service of a group of related
products and services, and that is subject to risks and benefits that may be distinguished from other business segments.
The Group develops a set of power supply activities, with special emphasis on the generation, distribution, transmission and trading of electric
power.
Based on internal reports, the Board of Officers is responsible for evaluating the performance of several segments and deciding on fund
allocation to each of the identified business segments.
38.1
Segment characterization
The amounts reported for each business segment are the result of the consolidation of subsidiaries and business units within each segment
and the cancellation of intrasegment transactions.
The column "Holding" refers to the parent company, and origin of this income is substantially related to the evaluation of investment in
subsidiaries, and jointly-owned companies by the equity accounting method, as required by the accounting practices adopted in Brazil. The
income resulted from the application of the equity method is fully eliminated in the column "Elimination".
38.1.1
Statement of income
2012
Distribution
Revenues
Cost with electricity
Cost of production for electricity
Cost of operation
Personnel
Gross income
Sales expenses
Other Operating income and expenses
Income (loss) before financial income (loss), taxes and ownership
interest
Financial revenues
Financial expenses
Financial result
Income and social contribution taxes - current
Generation
4,461,794
FALSO
FALSO
(2,450,866)
(652,808)
(3,103,674)
-
1,364,164
FALSO
FALSO
(335,308)
(97,815)
(433,123)
(6,149)
(6,149)
Trading
1,354,606
FALSO
FALSO
(1,308,184)
(15,503)
(1,323,687)
-
Holding
1,777
FALSO
FALSO
-
Other
Elimination
9,885
FALSO
FALSO
-
-
-
1,777
(624,943)
FALSO
FALSO
594,815
28,910
623,725
Total
6,567,283
(3,499,543)
(737,216)
(4,236,759)
616
616
(5,533)
(5,533)
(525)
(1,186)
(129)
(1,840)
(1,840)
(1,963)
6,082
1,003
1,003
625,344
401
(189,407)
(230,179)
(273,931)
(13,525)
(707,042)
(4,949,334)
(243,492)
1,374,457
(155,629)
(197,843)
(170,849)
(3,699)
(528,020)
(3,631,694)
(240,445)
589,655
(28,973)
(28,846)
(103,026)
(9,151)
(169,996)
(609,268)
(790)
754,106
(4,280)
(3,307)
(56)
(546)
(8,189)
(1,331,876)
(294)
22,436
(44,162)
(189,616)
(9,383)
37,970
(205,191)
(1,519)
(58,587)
(32,583)
(42,574)
(135,263)
34,363
(6,764)
(223)
3,584
30,960
(484)
(49,523)
(6,209)
(16,443)
(72,659)
(25)
(1,093)
(38)
(1,156)
(18,088)
(18,088)
(11,827)
(305,583)
(66,486)
(17,501)
(401,397)
384,464
137,133
(196,999)
(59,866)
324,598
(26,539)
(60,139)
(86,678)
618,843
33,647
(200,619)
(166,972)
451,871
(112,253)
22,607
(89,646)
53,396
4,424
(265)
4,159
57,555
(5,844)
(13,205)
(19,049)
(70,882)
436,505
27,085
(49,821)
(22,736)
342,887
(1,243)
(1,243)
4,926
427
(722)
(295)
4,631
(448)
(448)
(17,687)
(439,403)
(10,754)
10,754
(457,090)
6,149
6,149
973,060
(2,898)
191,962
(437,672)
(245,710)
724,452
(146,327)
(44,588)
(190,915)
237,920
362,225
38,506
341,644
4,183
(450,941)
533,537
237,920
-
312,947
49,278
38,506
-
341,644
-
4,183
-
(593,556)
142,615
341,644
191,893
75
2011
Distribution
Revenues
Cost with electricity
Cost of operation
Personnel
Gross income
Sales expenses
Other Operating income and expenses
Income (loss) before financial income (loss), taxes and ownership
interest
Financial revenues
Financial expenses
Financial result
Income and social contribution taxes - current
38.1.2
Generation
Trading
Holding
Other
Eliminations
4,232,456
FALSO
FALSO
(1,912,360)
(568,800)
(2,481,160)
1,096,357
FALSO
FALSO
(61,865)
(88,455)
(150,320)
921,735
FALSO
FALSO
(860,457)
(14,381)
(874,838)
(142,839)
(191,060)
(161,704)
(32,611)
(528,214)
(3,009,374)
(308,794)
914,288
(20,781)
(30,078)
(99,414)
(3,093)
(153,366)
(303,686)
(439)
792,232
(3,355)
(1,186)
(76)
(313)
(4,930)
(879,768)
(62)
41,905
1,384
(36,111)
(182,887)
(9,036)
(102,089)
(330,123)
(860)
(53,697)
(62,821)
(36,089)
(153,467)
(3,424)
(6,430)
(346)
555
(9,645)
(1,430)
(67,642)
(12,192)
12,479
(68,785)
(252)
(122)
(374)
584,165
134,678
(265,554)
(130,876)
638,765
9,346
48,819
(190,265)
(141,446)
32,260
4,916
(2,216)
2,700
(67,401)
569,951
30,647
(44,278)
(13,631)
4,588
630
(820)
(190)
(398)
(582,779)
(9,434)
9,434
-
1,191,979
(3,482)
210,256
(493,699)
(283,443)
453,289
(118,782)
(7,630)
(126,412)
506,665
(103,113)
26,105
(77,008)
34,960
(11,887)
625
(11,262)
488,919
(354)
2,149
1,795
4,398
(451)
(451)
(583,177)
-
905,054
(234,587)
21,249
(213,338)
326,877
429,657
23,698
490,714
3,947
(583,177)
691,716
326,877
-
471,308
(41,651)
23,698
-
490,714
-
3,947
-
(477,818)
(105,359)
838,726
(147,010)
6,518
FALSO
FALSO
-
(576)
(907)
(73)
(1,556)
(1,556)
4,962
(553,041)
FALSO
FALSO
531,860
20,238
552,098
5,705,409
FALSO
FALSO
(2,302,822)
(651,398)
(2,954,220)
545
545
552,643
(398)
(167,551)
(222,686)
(261,194)
(36,090)
(687,521)
(3,641,741)
(309,295)
1,754,373
-
Statement of financial position
2012
Current assets
Non-current assets
Investments
Intangible assets
Current liabilities
Shareholders' equity and non-controlling
Distribution
Generation
1,614,152
1,432,778
4,127
197
1,921,880
1,715,317
1,847,407
1,410,410
733,447
387,126
1,326
5,778,490
1,331,928
1,256,112
2,765,692
4,210,513
Distribution
Generation
Trading
209,360
7,599
200
1,181
623
157,919
248
60,796
Holding
423,366
396,277
4,392,502
5,004
1,670
188,448
567,028
4,463,343
Other
212
4,322
520
3,638
5,506
2,140
5,302
6,756
Eliminations
(261,876)
(302,100)
(4,298,007)
471,020
163,375
(253,821)
(172,152)
(3,801,615)
Total
2,718,661
1,926,002
96,541
4,127
6,259,530
3,424,982
3,066,115
5,013,525
6,350,203
2011
Current assets
Non-current assets
Investments
Intangible assets
Current liabilities
Shareholders' equity and non-controlling
1,569,745
1,189,436
4,186
409
2,023,102
1,656,058
1,630,672
1,500,148
Total
Reclassified
1,384
FALSO
FALSO
-
Trading
637,134
402,668
(461,806)
5,651,731
1,378,405
911,083
2,455,877
4,241,172
76
146,423
18,742
567
650
112,173
4,518
49,691
Holding
584,987
126,687
4,168,961
3,113
856
181,191
98,399
4,605,014
Other
19,140
56,253
379,137
3,713
5,344
118,582
320,277
24,728
Eliminations
(291,419)
(105,601)
(4,053,396)
156,786
(290,649)
(129,866)
(3,873,115)
Total
2,666,010
1,688,185
32,896
4,186
5,659,533
3,565,143
2,688,438
4,379,877
6,547,638
(41,825)
(310,908)
(84,395)
(125,266)
(562,394)
39
Insurance coverage
The Company and its subsidiaries hold insurance contracts with coverage determined by specialist guidance, bearing in mind the nature and
level of risk, for amounts deemed sufficient to cover eventual significant losses on their assets and liabilities. Given the nature of the risk
assumptions, these are not part of the scope of a review of financial statements, and consequently, were not analyzed by our independent
auditors.
The main amounts at risk with insurance coverage are:
Parent company
Consolidated
12/31/2012
Substations
-
12/31/2012
1,005,006
Power Plants
-
4,805,437
Buildings and contents (own)
-
63,994
Buildings and contents (third parties)
11,836
86,056
Civil liability
58,999
191,499
Transports (material)
Transportation (vehicles)
Personal accidents
-
5,000
1,600
3,350
39,724
278,761
The balance presented as Civil Liability in the Parent Company is structured down as follows:
(i) General civil liability, with coverage of up to R$6,000;
(ii) Environmental civil liability, with coverage of R$12,680; and
(iii) Civil Liability of Directors and Officers (D&O), with coverage of R$40,562, extensible to its subsidiaries.
In relation to the policies of items (i) and (ii), the coverage applies to the Parent Company and the following subsidiaries: Bandeirante,
Escelsa, Energest, Pantanal, Santa Fé, Cenaeel, EDP Comercializadora and Investco.
40
Subsequent events
40.1
Law no. 12.783/13 (Conversion of Provisional Measure no. 579/12) - Escelsa and Bandeirante
The year 2012 was marked by significant changes in the regulations applied to the electric power sector, including Provisional Measure no.
579, of September 11, 2012, in which the federal government presented measures to reduce the electricity bill as of January 2013. The
average reduction foreseen for all of Brazil was 20.2%, resulting from the government’s performance in two areas: Renewal of concessions
(13%) and Sector charges (7%).
Provisional Measure no. 579/2012 which resulted in Law 12.783 of January 11, 2013, established that generation and transmission
concessionaires, tendered before February 13, 1995 (art. 19 of Law 9.074/1995) and with contracts expiring between 2013 and 2017, will be
able to extend their concessions in advance. The generation concessions covered by the Law should make their guaranteed power output
available for the regime of quotas to be distributed proportionately to the market of each distributor, impacting the contracting of energy. In
turn, the transmission concessionaires, affected by MP 579/12, will have just the operation and maintenance costs, charges and assessments
considered in their tariff, since the assets linked to the service rendering will be totally amortized.
As regards the Industry Charges, the quotas of the Fuel Consumption Account – CCC and the Global Reversal Reserve – RGR will no longer
be charged to consumers and the Energy Development Account – CDE will initially be reduced by 75% of its current value.
Decree 7.891 of January 23, 2013 established a broader scope for the application of CDE resources, which may be used to subsidize the tariff
discounts established by law, such as the social tariff for people on a low income, rural, water, sewage and sanitation, irrigators, and others. In
this manner, the difference earned in income, due to the discounts granted, will no longer be reimbursed by means of the tariffs of the other
consumers.
On January 24, 2013 the Brazilian National Electricity Agency – ANEEL approved the Extraordinary Tariff Review – RTE, specifically for the
adjustment of power costs, transmission costs and industry charges, of all the electricity distributors. Hence the non-manageable costs and
the supply tariffs will be reduced simultaneously, with no impacts on the margin of the distributors. These effects will be perceived by
consumers as of the end of January 2013. The main changes that allowed the reduction of the account were:
i) Allocation of energy quotas, resulting from the generators with renewed concessions;
ii) Reduction of transmission costs;
iii) Reduction in sector charges; and
iv) Withdrawal of subsidies from the tariff structure, with direct contribution by the National Treasury.
Since the hydroelectric generation concessions held by the EDP Group – Energias do Brasil – were granted after February 1995, the date on
which Law 8,987/1995 took effect – they are not affected by the regulatory changes on the agenda.
77
40.2
The shares of EDP Energias do Brasil are henceforth included in the Bovespa index
On January 7, 2013, the Company notified the market that the stock has been included in the Bovespa index with a share of 0.645%. The new
portfolio of Ibovespa is henceforth composed of 69 shares. The Bovespa Index (“Ibovespa”) is one of the most important performance
indicators of Brazilian stock market quotes. Its importance lies in the fact that Ibovespa portrays the behavior of the instruments traded at
BM&FBOVESPA of the listed companies that are most representative of the Brazilian economy.
40.3
BlackRock henceforth holds 5.10% of the Company’s ordinary shares
As communicated to the market on January 11, 2013, BlackRock now holds, in the consolidated statement, twenty-four million, three hundred
twenty-nine thousand, two hundred fifty-two (24,329,252) Company shares, corresponding to 5.10% of its capital stock. BlackRock declared
that this shareholding interest in the Company is neither aimed at nor results from any change in the controlling interest of the Company or in
its administrative structure and is for investment purposes.
40.4
Funding form loans
Energest
On January 11 and February 4, 2013, the subsidiary Energest signed a working capital loan agreement with Banco Alfa, in the amount of
R$6,000 each, totaling R$12,000. There will be 115,03% CDI interest on the amounts raised and principal and interest falling due in one single
payment in March and May 2013 respectively.
On February 22, 2013, the subsidiary Energest signed a working capital loan agreement with Banco Alfa, in the amount of R$22,000. There
will be 115,00% CDI interest on the amounts raised and principal and interest falling due in one single payment in May 2013.
Bandeirante
On February 5, 2013, the subsidiary Bandeirante signed a secured account loan agreement with Banco do Brasil, in the amount of R$20,000.
There will be 116,00% CDI interest on the amounts raised and principal and interest falling due in one single payment in May 2013.
On February 5, 2013, the subsidiary Bandeirante signed a working capital loan agreement with Banco Alfa, in the amount of R$20,000. There
will be 115,00% CDI interest on the amounts raised and principal and interest falling due in one single payment in May 2013.
Empresa de Energia Cachoeira do Caldeirão
On February 14, 2013 the participants of an Extraordinary General Meeting approved the execution of a working capital loan agreement
between Empresa de Energia Cachoeira do Caldeirão and Banco do Brasil S.A, in the amount of R$30,000. Interest of 109% of the CDI
(Interbank Deposit Certificate) is levied on the contracted amount with maturity on March 8, 2013, extendable for a further 30 days.
Escelsa
On February 15, 2013, the subsidiary Escelsa signed a rural credit and an agribusiness loan agreement with Banco do Brasil, in the amount of
R$34,000 each, totaling R$68,000. There will be an interest of 98,50% and 105.50% of CDI on the amounts raised and principal and interest
falling due in one single payment in February 2015.
EDP - Energias do Brasil
On February 22, 2013, the Company signed a secured account loan agreement with Banco do Brasil, in the amount of R$8,000. There will be
116,00% CDI interest on the amounts raised and principal and interest falling due in one single payment in May 2013.
On February 22, 2013 the participants of a Meeting of the Board of Directors approved the execution of a loan agreement between the
Company and Banco do Brasil S.A, in the amount of R$210,000. There will be 107,1% CDI interest with maturity on April 30, 2013. The partial
release of the amount of R$185,000 occurred on February 26, 2013.
40.5
UHE Mascarenhas starts commercial operation of 2nd turbine
On February 8, 2013, ANEEL, through Ruling n. 326, published on February 14, 2013, authorized the commercial operation startup of
generator unit II, with 49.5 MW of installed capacity. Generator unit II was kept inoperative in the period from February 8, 2012 to February 8,
2013 for repowering. With the commercial operation start-up of generator unit II, UHE Mascarenhas, which is located in the municipalities of
Baixo Guandu and Aimorés, finalizes the repowering process of its four generator units. The repowering project of the 4 generator units added
17.5 MW, currently totaling 198 MW of installed capacity.
40.6
Unit II of Usina Termelétrica Energia Pecém I synchronizes with the National Interconnected System
On February 20, 2013, Usina Termelétrica Energia Pecém I carried out the synchronization of unit II with the National Interconnected System.
The synchronization and the load tests constitute the final stage for approval of the Declaration of Commercial Operation (DOC).
40.7
Debentures - Cachoeira Caldeirão S.A
On February 21, 2013 the participants of a Meeting of the Board of Directors approved the 1st public issue of simple, nonconvertible
debentures, of the unsecured type, with personal guarantee, in a single series, for public distribution, with restricted placement efforts, of its
subsidiary, Empresa de Energia Cachoeira Caldeirão S.A., in the total amount of R$168,000 by means of the issue of 16,800 debentures,
which will be entitled to a remuneration that will include remuneratory interest levied on their unit par value, corresponding to 106.30% of the
average daily interest rate of the DI, levied from the date of issue, on the “Debentures” and the “Remuneration".
78
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ĂŶĚĞŝƌĂŶƚĞĂŶĚWƐĐĞůƐĂ͕ŽƵƌŝƐƚƌŝďƵƚŽƌŽŵƉĂŶŝĞƐ͕ŝƐĂĐůĞĂƌĞǆĂŵƉůĞŽĨƚŚŝƐĂďŝůŝƚǇ͘tŝƚŚ
ƚŚĞ /ŶƐƚŝƚƵƚŽ W ĂŶĚ ŽƉĞƌĂƚŝŶŐ ĂƌĞĂƐ͕ Ă ĐŽŵŵƵŶŝƚǇ ƌĞůĂƚŝŽŶƐŚŝƉ ŵŽĚĞů ǁĂƐ ĐƌĞĂƚĞĚ͕ ǁŚŝĐŚ
ŚĂǀĞƐƚĂƌƚĞĚƚŽƉƌŽĚƵĐĞǀĞƌǇŝŶƚĞƌĞƐƚŝŶŐƌĞƐƵůƚƐƚŚŝƐǇĞĂƌ͘
tĞďĞůŝĞǀĞƚŚĂƚƚŚĞƌĞŝƐŽŶůǇŽŶĞǁĂǇƚŽĂĐŚŝĞǀĞŽƵƌĂƐƉŝƌĂƚŝŽŶƐĂŶĚƚŚĂƚĐŽŵĞƐĨƌŽŵƉĞŽƉůĞ
ǁŝƚŚ ĨŽĐƵƐ͕ ƚĞĐŚŶŝĐĂů ƐŬŝůůƐ ĂŶĚ ƉĂƐƐŝŽŶ͘ KƵƌ ĞŵƉůŽǇĞĞƐ ĂŶĚ ƚŚŝƌĚ ƉĂƌƚŝĞƐ͛ ŚĞĂůƚŚ͕ ƐĂĨĞƚǇ͕ ŝŶ
ĂĚĚŝƚŝŽŶ ƚŽ ƚŚĞ ƉƌŽĨĞƐƐŝŽŶĂů ĚĞǀĞůŽƉŵĞŶƚ͕ ĂƌĞ ƉŝǀŽƚĂů ƉŽŝŶƚƐ ŽĨ ŽƵƌ ďƵƐŝŶĞƐƐ ŵŽĚĞů͕ ƚŚƌŽƵŐŚ
ƐĞǀĞƌĂůƉĞƌƐŽŶŶĞůŵĂŶĂŐĞŵĞŶƚƚŽŽůƐ͘
WŽƐŝƚŝǀĞĞŶǀŝƌŽŶŵĞŶƚŝŶƚŚĞƌĂǌŝůŝĂŶŵĂƌŬĞƚ͕ŚŽǁĞǀĞƌǁŝƚŚĂŚŝŐŚĞƌƌŝƐŬůĞǀĞů
/ŶϮϬϭϮ͕ƚŚĞĞĐŽŶŽŵŝĐĐůŝŵĂƚĞǁĂƐŵŽƌĞĞŶĐŽƵƌĂŐŝŶŐŝŶƌĂǌŝůƚŚĂŶŝŶŽƚŚĞƌůŽĐĂƚŝŽŶƐĂƌŽƵŶĚ
ƚŚĞ ŐůŽďĞ͘ ,ŽǁĞǀĞƌ͕ ĐŚĂŶŐĞƐ ŝŶ ƚŚĞ ƌĞŐƵůĂƚŽƌǇ ĨƌĂŵĞǁŽƌŬ ŚĂǀĞ ŝŶĨůƵĞŶĐĞĚ ƚŚĞ ĨŽƌĞŝŐŶ
ƉĞƌĐĞƉƚŝŽŶĂďŽƵƚƌĂǌŝů͛ƐƌŝƐŬƉƌŽĨŝůĞ͘
dŚĞŚĞĂǀǇƚĂǆƐƚƌƵĐƚƵƌĞ͕ƚŚĞĐŽŵƉůĞǆŝƚǇŽĨĞŶǀŝƌŽŶŵĞŶƚĂůůŝĐĞŶƐĞƐĂŶĚŚŝŐŚůĂďŽƌĐŽƐƚƐŝŶƚŚĞ
ĐŽŶƐƚƌƵĐƚŝŽŶŽĨŶĞǁĚĞǀĞůŽƉŵĞŶƚƐŚĂǀĞƉƵƚƉƌĞƐƐƵƌĞĂŶĚĂƌĞĨĂĐƚŽƌƐƚŽďĞĐĂƌĞĨƵůůǇĞǆĂŵŝŶĞĚ
ŝŶ ƚŚĞ ĂŶĂůǇƐŝƐ ŽĨ ŶĞǁ ŝŶǀĞƐƚŵĞŶƚƐ͘ dŚĞ ĐŽŵƉĂŶǇ ŝƐ ĂǁĂƌĞ ŽĨ ƚŚĞƐĞ ĂƐƉĞĐƚƐ ĂŶĚ ŚĂƐ ƚƌŝĞĚ ƚŽ
ŵŝƚŝŐĂƚĞŝŵƉĂĐƚƐŽĨƐĂŝĚĨĂĐƚŽƌƐƚŚƌŽƵŐŚĞĨĨŝĐŝĞŶĐǇŐĂŝŶƐ͘
dŚĞǇĞĂƌŽĨϮϬϭϮǁĂƐƐƚŝůůŵĂƌŬĞĚďǇĂŶƵŶĨĂǀŽƌĂďůĞŚǇĚƌŽůŽŐŝĐĂůƐǇƐƚĞŵ͕ǁŚŝĐŚĐĂŵĞƚŽƉƵƚĂ
ƐƚƌŽŶŐ ƉƌĞƐƐƵƌĞ ŽŶ ŚǇĚƌŽĞůĞĐƚƌŝĐ ƌĞƐĞƌǀŽŝƌ ůĞǀĞůƐ͘ EĂƚŝŽŶĂů ^ǇƐƚĞŵ KƉĞƌĂƚŽƌ ;KE^Ϳ ŚĂƐ
ĚĞƚĞƌŵŝŶĞĚ͕ ƚŚĞŶ͕ ŚŝŐŚĞƌ ĚŝƐƉĂƚĐŚ ŽĨ ƚŚĞ ƚŚĞƌŵŽĞůĞĐƚƌŝĐ ƉůĂŶƚƐ ĂŶĚ͕ ĚƵĞ ƚŽ ƚŚĂƚ ĨĂĐƚ͕ ƚŚĞ
ĞŶĞƌŐǇƐĞƚƚůĞŵĞŶƚƉƌŝĐĞǁĂƐĚŝƌĞĐƚůǇŝŵƉĂĐƚĞĚĂŶĚ͕ĂƐĂĐŽŶƐĞƋƵĞŶĐĞ͕ŽƵƌŽƉĞƌĂƚŝŽŶƉƌŝĐĞ͘
^ƵƐƚĂŝŶĞĚŐƌŽǁƚŚŽŶ'ĞŶĞƌĂƚŝŽŶĨŽĐƵƐĞĚŽŶƐŽĐŝĂůƌĞƐƉŽŶƐŝďŝůŝƚǇ
/ŶƚŚĞĨŝŶĂŶĐĞƐ͕ǁĞƐƵĐĐĞƐƐĨƵůůǇŝƐƐƵĞĚĚĞďĞŶƚƵƌĞƐƚǁŝĐĞ͗ŽŶĞĂƚŶĞƌŐĞƐƚĂŶĚŽƚŚĞƌĂƚ,ŽůĚŝŶŐ
ŶĞƌŐŝĂƐĚŽƌĂƐŝů͘ĞďƚǁĂƐƉŽƐƚƉŽŶĞĚ͕ƚŚƌŽƵŐŚƚŚĞŶĞŐŽƚŝĂƚŝŽŶŽĨĂWƌŽũĞĐƚ&ŝŶĂŶĐĞĨŽƌh,
^ĂŶƚŽ ŶƚƀŶŝŽ ĚŽ :Ăƌŝ͕ŽĨϭϴ͘ϱǇĞĂƌƐ͘ 'ĞŶĞƌĂůůǇ͕ ƚŚĞĐŽŵƉĂŶǇ ŝƐ ƉƌŽƉĞƌůǇ ƉƌŽƚĞĐƚĞĚ ƌĞŐĂƌĚŝŶŐ
ƌŝƐŬƐ͘
dŚĞĚĞůĂǇŝŶƚŚĞǁŽƌŬƐŽĨWŽƌƚŽĚŽWĞĐĠŵdŚĞƌŵŽĞůĞĐƚƌŝĐWŽǁĞƌWůĂŶƚǁĂƐƉĂƌƚŝĂůůǇƌĞĚƵĐĞĚ
ĂŶĚ͕ŝŶĞĐĞŵďĞƌϮϬϭϮ͕ƚŚĞƉůĂŶƚǁĂƐŐŝǀĞŶĂůŝĐĞŶƐĞďǇŶĞĞůƚŽƐƚĂƌƚƚŚĞďƵƐŝŶĞƐƐŽƉĞƌĂƚŝŽŶƐ
ŽĨŝƚƐĨŝƌƐƚŐĞŶĞƌĂƚŽƌƵŶŝƚ͕ǁŝƚŚĂŶŝŶƐƚĂůůĞĚĐĂƉĂĐŝƚǇŽĨϯϲϬDt͘
ϳϵ
ϮϬϭϮDE'DEdZWKZd
ůƐŽ ŝŶ ƚŚĞ ŐĞŶĞƌĂƚŝŽŶ͕ ǁĞ ĐŽƵůĚ ŝŶĐƌĞĂƐĞ ƚŚĞĐĂƉĂĐŝƚǇŽĨ h, DĂƐĐĂƌĞŶŚĂƐ͕ ŝŶ ƚŚĞ ƚŝŵĞ ĂŶĚ
ĐŽƐƚƐ ĞƐƚŝŵĂƚĞĚ͕ ǁŝƚŚ Ă ĐĂƉĂĐŝƚǇ ŝŶĐƌĞĂƐĞ ĨƌŽŵ ϭϴϵ Dt ƚŽ ϭϵϯ͘ϱ Dt͕ Ăƚ ƚŚĞ ƐĂŵĞ ǁĂƚĞƌ
ƉŽƚĞŶƚŝĂů ĂŶĚ ŶŽ ĞŶǀŝƌŽŶŵĞŶƚĂů ŝŵƉĂĐƚ͘ /Ŷ ĞĐĞŵďĞƌ ϮϬϭϮ͕ ǁĞ ǁŽŶ ƚŚĞ ĂƵĐƚŝŽŶ ĨŽƌ ƚŚĞ
ĐŽŶĐĞƐƐŝŽŶ ŽĨ h, ĂĐŚŽĞŝƌĂ ĂůĚĞŝƌĆŽ ŽŶ ƌĂŐƵĂƌŝ ƌŝǀĞƌ͕ ŝŶ ƚŚĞ ƐƚĂƚĞ ŽĨ ŵĂƉĄ͕ ǁŝƚŚ ĂŶ
ŝŶƐƚĂůůĞĚĐĂƉĂĐŝƚǇŽĨϮϭϵDt͘ŶĚƚŚĞǁŽƌŬƐŽĨh,^ĂŶƚŽŶƚƀŶŝŽĚŽ:ĂƌŝĐŽŵƉůĞƚĞĚϭǇĞĂƌ
ĂŶĚŐŽŽŶĂƐƐĐŚĞĚƵůĞĚ͘
/ŶƚŚŝƐƐĞŶƐĞŽĨŐĞŶĞƌĂƚŝŽŶĞǆƉĂŶƐŝŽŶ͕W͛ƉƌĞŵŝƐĞŝƐƚŽŐŽďĞǇŽŶĚǁŚĂƚŝƐƌĞƋƵŝƌĞĚďǇůĂǁ͘
Ŷ ĞǆĂŵƉůĞ ŽĨ ƚŚĂƚ ŝƐ sŝůĂ /ƚĂƉƵƌƵ͕ ǁŚĞƌĞ h, ^ĂŶƚŽ ŶƚƀŶŝŽ ĚŽ :Ăƌŝ ŝƐ ďĞŝŶŐ ĐŽŶƐƚƌƵĐƚĞĚ͕
ǁŚŝĐŚůĞĚWƚŽƌĞĂůůŽĐĂƚĞϮϮĨĂŵŝůŝĞƐ͕ďǇďƵŝůĚŝŶŐĂŶĞǁǀŝůůĂŐĞǁŝƚŚďĂƐŝĐƐĂŶŝƚĂƚŝŽŶ͕ĞůĞĐƚƌŝĐ
ƉŽǁĞƌ͕ƐŽůĂƌƉĂŶĞůƐ͕ĂŶĚŽƚŚĞƌŝŵƉƌŽǀĞŵĞŶƚƐ͘
͞ƵƐƚŽŵĞƌͲŽƌŝĞŶƚĞĚ͟ǀŝĞǁŝŶƚŚĞŝƐƚƌŝďƵƚŝŽŶĂŶĚdƌĂĚĞƌĞƐƵůƚƐŝŶƐĂƚŝƐĨĂĐƚŝŽŶ
ZĞŐĂƌĚŝŶŐ ŝƐƚƌŝďƵƚŝŽŶ͕ ƚŚĞ ǇĞĂƌ ŽĨ ϮϬϭϮ ƉƌŽĚƵĐĞĚ ƉŽƐŝƚŝǀĞ ƌĞƐƵůƚƐ ŽĨ ƚŚĞ KƌŐĂŶŝǌĂƚŝŽŶĂů
dƌĂŶƐĨŽƌŵĂƚŝŽŶWƌŽĐĞƐƐŽǀĞƌƚŚĞůĂƐƚƚŚƌĞĞǇĞĂƌƐ͘WĂŶĚĞŝƌĂŶƚĞĂŶĚWƐĐĞůƐĂƌĞĐŽƌĚĞĚ
ƉŽƐŝƚŝǀĞǀĂƌŝĂƚŝŽŶƐ͕ďŽƚŚŝŶƚĞĐŚŶŝĐĂůƋƵĂůŝƚǇŝŶĚŝĐĂƚŽƌƐĂŶĚŝŶďƵƐŝŶĞƐƐƋƵĂůŝƚǇ͘dŚĞĐƵƐƚŽŵĞƌ͛Ɛ
ƐĂƚŝƐĨĂĐƚŝŽŶ ůĞǀĞůƐ ƌĞĂĐŚĞĚ ƚŚĞ ŚŝŐŚĞƐƚ ƌĂƚĞƐ ŝŶ ƚŚĞ ŚŝƐƚŽƌǇ ŽĨ ƚŚĞ ŽŵƉĂŶŝĞƐ͘ /Ŷ W
ĂŶĚĞŝƌĂŶƚĞ͛ƐĐĂƐĞ͕ƚŚŝƐĂďƐŽůƵƚĞůǇƉŽƐŝƚŝǀĞǀĂƌŝĂƚŝŽŶƌĞƐƵůƚĞĚŝŶƚŚĞƐĞŐŵĞŶƚ͛ƐĂǁĂƌĚŽĨ͞ĞƐƚ
WĞƌĨŽƌŵĂŶĐĞ ǀŽůƵƚŝŽŶ͟ ďǇ Z͕ ĂŶĚ ĂůƐŽ ƚŚĞ ͞ƵƐƚŽŵĞƌƐ͟ ŚŝŐŚůŝŐŚƚ Ăƚ ƚŚĞ EĂƚŝŽŶĂů
YƵĂůŝƚǇǁĂƌĚ͘
tĞĐŽŶƚŝŶƵĞŽƵƌŝƐƚƌŝďƵƚŝŽŶŽƉƚŝŵŝǌĂƚŝŽŶǁŽƌŬ͕ĂŶĚĂƐƚƌĂƚĞŐŝĐƉƌŽũĞĐƚŝƐŽŶŐŽŝŶŐƚŽŝŵƉƌŽǀĞ
ĞĨĨŝĐŝĞŶĐǇ ĂŶĚ ƉƌŽĚƵĐƚŝǀŝƚǇ ŽĨ ƚŚĞŽŵƉĂŶŝĞƐ͘ >ĂƐƚ ǇĞĂƌ͕ ǁĞ ĂůƐŽ ĐŽŶƚŝŶƵĞĚ ƚŚĞŵŽǀĞŵĞŶƚŽĨ
ƐĞůĞĐƚŝǀĞ͟ŝŶƐŽƵƌĐŝŶŐ͕͟ǁŚŝĐŚŚĂƐďĞĞŶĞŶĂďůŝŶŐƵƐƚŽŝŵƉƌŽǀĞƚŚĞƋƵĂůŝƚǇŽĨŽƵƌƐĞƌǀŝĐĞƐ͕ƐŝŶĐĞ
ǁĞƌĞƐƵŵĞĚƐŽŵĞĂĐƚŝǀŝƚŝĞƐǁŚŝĐŚ͕ŝŶƚŚĞƉĂƐƚ͕ǁĞƌĞŽƵƚƐŽƵƌĐĞĚ͘
/ŶŽǀŝƚǇ ƉƌŽũĞĐƚ͕ ŝŶ ƚŚĞ ĐŝƚǇ ŽĨ ƉĂƌĞĐŝĚĂ͕ ǁŝƚŚ ƚŚĞ ŝŵƉůĞŵĞŶƚĂƚŝŽŶ ŽĨ Ă ƐŵĂƌƚ ŵĞƚĞƌŝŶŐ
ƐŽůƵƚŝŽŶ͕ ŝŶ ĂďŽƵƚ ϭϯ ƚŚŽƵƐĂŶĚ ĐŽŶƐƵŵƉƚŝŽŶ ƐŝƚĞƐ͕ ĂŶĚ ƉŝůŽƚ ƉƌŽũĞĐƚƐ ŽĨ ĞůĞĐƚƌŝĐĂů ŵŽďŝůŝƚǇ͕
ĚŝƐƚƌŝďƵƚĞĚŐĞŶĞƌĂƚŝŽŶ͕ĞŶĞƌŐǇĞĨĨŝĐŝĞŶĐǇ͕ĞĨĨŝĐŝĞŶƚƉƵďůŝĐůŝŐŚƚŝŶŐ͕ĂŵŽŶŐŽƚŚĞƌƐ͕ĐŽŵƉƌŝƐĞĂŶ
ŽƉĞŶĚŽŽƌƚŽǁŚĂƚǁŝůůďĞƚŚĞĨƵƚƵƌĞŽĨĞůĞĐƚƌŝĐƉŽǁĞƌĚŝƐƚƌŝďƵƚŝŽŶ͘WĂƐƐƵŵĞĚ͕ƚŚƌŽƵŐŚƚŚŝƐ
ƐŝŐŶŝĨŝĐĂŶƚ ƉƌŽũĞĐƚ͕ ŝƚƐ ƉŽƐŝƚŝŽŶ Ăƚ ƚŚĞ ĨŽƌĞĨƌŽŶƚ ŽĨ ƚŚŝƐ ĨŝĞůĚ͕ ƚĂŬŝŶŐ ĂĚǀĂŶƚĂŐĞ ŽĨ Ăůů ŝƚƐ
ŝŶƚĞƌŶĂƚŝŽŶĂůĞǆƉĞƌŝĞŶĐĞ͕ŶĂŵĞůǇĂŶŝĚĞŶƚŝĐĂůƉƌŽũĞĐƚŝŶǀŽƌĂ͕WŽƌƚƵŐĂů͘
DĞĂƐƵƌĞƐƚŽƌĞƋƵĂůŝĨŝĐĂƚŝŽŶĂŶĚĂƵƚŽŵĂƚŝŽŶŽĨƚŚĞĚŝƐƚƌŝďƵƚŝŽŶŶĞƚǁŽƌŬ͕ĂŝŵŝŶŐƚŽƉƌĞƉĂƌĞƚŚĞ
ŝŶĨƌĂƐƚƌƵĐƚƵƌĞ ĨŽƌ ƚŚĞ ĞƐƚŝŵĂƚĞĚ ŝŶƚĞŶƐŝĨŝĐĂƚŝŽŶ ŽĨ ĂĚǀĞƌƐĞ ĐůŝŵĂƚĞ ĐŽŶĚŝƚŝŽŶƐ͕ ĂƌĞ ŵĂũŽƌ
ŝŶŝƚŝĂƚŝǀĞƐ͕ ǁŚŝĐŚ ĐŽŶƚƌŝďƵƚĞ ƚŽ ďĞƚƚĞƌ ĂĚĂƉƚ ŶĞǁ ďƵƐŝŶĞƐƐ ƚŽ ŶĞǁ ĐŽŶĚŝƚŝŽŶƐ ŽĨ ŽƵƌ
ƐƵƌƌŽƵŶĚŝŶŐƐ͘ dŚĞ ŽƉĞƌĂƚŝŽŶĂůŝǌĂƚŝŽŶ ŽĨ ůŝŵĂ'ƌŝĚ ƉƌŽũĞĐƚ ŝŶ ƚŚĞ ŽƉĞƌĂƚŝŽŶ ĐĞŶƚĞƌƐ ŽĨ ƚŚĞ
ƐǇƐƚĞŵĂŶĚĚŝƐƚƌŝďƵƚŝŽŶŽĨWĂŶĚĞŝƌĂŶƚĞĂŶĚWƐĐĞůƐĂ͕ŝƐĂŶĞǆĂŵƉůĞŽĨƚŚĂƚ͘
/ŶŶŽǀĂƚŝŽŶŝŶĐŽƌƉŽƌĂƚĞĚŝŶƚŚĞW͛ƐŵĂŶĂŐĞŵĞŶƚŵŽĚĞůŝŶƌĂǌŝů
/Ŷ ϮϬϭϮ͕ ǁĞ ĐŽŶƐŽůŝĚĂƚĞĚ ƚŚĞ ĐŽŶĐĞƉƚ ŽĨ ŝŶŶŽǀĂƚŝŽŶ͕ ĂĚǀĂŶĐŝŶŐ ƚŚĞ ƐŚĂƌĞĚ ŵĂŶĂŐĞŵĞŶƚ ŽĨ
/ŶŶŽǀĂƚŝŽŶ ĂŶĚ ^ƵƐƚĂŝŶĂďŝůŝƚǇ ĂƌĞĂƐ͕ ďĞĐĂƵƐĞ ǁĞ ĂƌĞ ĨƵůůǇ ĂǁĂƌĞ ƚŚĂƚ ƚŚĞƐĞ ĂƌĞ ĨŝĞůĚƐ ŽĨ ƚŚĞ
ƐƵƐƚĂŝŶĂďůĞĚĞǀĞůŽƉŵĞŶƚĂůǁĂǇƐĚĞƐŝƌĞĚ͘
tĞĂƌĞƐƵƌĞƚŚĂƚƐƵƐƚĂŝŶĂďŝůŝƚǇŝƐĂƉĂƌƚŽĨŽƵƌƐƉĞĞĐŚ͕ďƵƚĂďŽǀĞĂůů͕ŽĨW͛ƐĚĂŝůǇŽƉĞƌĂƚŝŽŶ͕
ƚŚƌŽƵŐŚĂƐŽůŝĚĨƌĂŵĞǁŽƌŬŽĨĐŽƌƉŽƌĂƚĞƉŽůŝĐŝĞƐĂďŽƵƚƚƌĂŶƐƉĂƌĞŶĐǇ͕ĞƚŚŝĐƐ͕ŚƵŵĂŶƌŝŐŚƚƐ͕ĨŝŐŚƚ
ĂŐĂŝŶƐƚĐŽƌƌƵƉƚŝŽŶ͕ĐŚŝůĚůĂďŽƌ͕ĞŶǀŝƌŽŶŵĞŶƚ͕ĞƚĐ͕͘ĨŽůůŽǁŝŶŐƚŚĞWƌŝŶĐŝƉůĞƐŽĨ'ůŽďĂůWĂĐƚ͘
KƵƌ ŐŽĂů ŝƐ ƚŽ ďĞ ĂůǁĂǇƐ ŽŶ ƚŚĞ ĞĚŐĞ ŽĨ ŬŶŽǁůĞĚŐĞ͕ ĂƐƐƵŵŝŶŐ ƉƌĂĐƚŝĐĞƐ ŽĨ ďƵƐŝŶĞƐƐ
ŵĂŶĂŐĞŵĞŶƚƚŚĂƚƉƌĞƐĞƌǀĞƌĞůĂƚŝŽŶƐŚŝƉǁŝƚŚĂůůƌĞůĂƚĞĚƉĂƌƚŝĞƐ͘dŚĞďĂůĂŶĐĞĂŶĚĐůĞĂƌĚŝĂůŽŐƵĞ
ĂƌĞƚŚĞŚĞĂƌƚŽĨŽƵƌƐƵƐƚĂŝŶĂďůĞŽƉĞƌĂƚŝŽŶ͘
ϴϬ
ϮϬϭϮDE'DEdZWKZd
ĨŝŶĂůǁŽƌĚƚŽƚŚĂŶŬƐƚŚĞƚƌƵƐƚŽĨŽƵƌŽĂƌĚŽĨŝƌĞĐƚŽƌƐ͕ĂƐǁĞůůĂƐĂůůĚĞĚŝĐĂƚŝŽŶĂŶĚĞĨĨŽƌƚŽĨ
ŽƵƌ ŵƉůŽǇĞĞƐ͘ tĞ ĂƌĞ ƐƵƌĞ ƚŚĂƚ ƚŚĞ ǁŽƌŬ ǁĞ ĚŽ ƚŽŐĞƚŚĞƌ ŝƐ ĞƐƐĞŶƚŝĂů ĨŽƌ ƚŚĞ ƵƐƚŽŵĞƌƐ
ĨƵŶĚĂŵĞŶƚĂů ǁĞ ƐĞƌǀĞ͕ ĨŽƌ ƚŚĞ WĂƌƚŶĞƌƐ ǁŚŽ ǁĞ ĐŽŽƉĞƌĂƚĞ ǁŝƚŚ ĂŶĚ ƚŽ ŝŶĐƌĞĂƐĞ ƌĞƚƵƌŶ ŽŶ
ŝŶǀĞƐƚŵĞŶƚĨŽƌ^ŚĂƌĞŚŽůĚĞƌƐ͘tĞŬŶŽǁǁĞĂƌĞŚĞĂĚŝŶŐƚŽƚŚĞƌŝŐŚƚĚŝƌĞĐƚŝŽŶ͘KƵƌĂŵďŝƚŝŽŶŝƐ
ƚŚĂƚǁĞĐĂŶďĞĞǀĞŶďĞƚƚĞƌ͘
ŶĂDĂƌŝĂ&ĞƌŶĂŶĚĞƐ
WƌĞƐŝĚĞŶƚŽĨWŶĞƌŐŝĂƐĚŽƌĂƐŝů
KZWKZdKZ'E/d/KE,Zd
W ŶĞƌŐŝĂƐ ĚŽ ƌĂƐŝů ŝƐ Ă ŚŽůĚŝŶŐ ĐŽŵƉĂŶǇ ǁŝƚŚ ŝŶǀĞƐƚŵĞŶƚƐ ŝŶ ƚŚĞ ƉŽǁĞƌ ŝŶĚƵƐƚƌǇ͕
ĐŽŶƐŽůŝĚĂƚŝŶŐŐĞŶĞƌĂƚŝŽŶ͕ĚŝƐƚƌŝďƵƚŝŽŶĂŶĚƚƌĂĚŝŶŐĂƐƐĞƚƐŝŶƐŝǆƐƚĂƚĞƐ͗dŚĞŽŵƉĂŶǇŽƉĞƌĂƚĞƐ
ŝŶ ƚŚĞ ĞŶĞƌŐǇ ŐĞŶĞƌĂƚŝŽŶ ƐĞĐƚŽƌ ŝŶ ŶŝŶĞ ƌĂǌŝůŝĂŶ ƐƚĂƚĞƐ ;ƐƉşƌŝƚŽ ^ĂŶƚŽ͕ DĂƚŽ 'ƌŽƐƐŽ ĚŽ ^Ƶů͕
dŽĐĂŶƚŝŶƐ͕ ĞĂƌĄ͕ ^ĂŶƚĂ ĂƚĂƌŝŶĂ͕ ZŝŽ 'ƌĂŶĚĞ ĚŽ ^Ƶů͕ WĂƌĄ ĂŶĚ ŵĂƉĄ ĂŶĚ ZŝŽ 'ƌĂŶĚĞ ĚŽ
EŽƌƚĞͿĂŶĚŝŶƚŚĞĚŝƐƚƌŝďƵƚŝŽŶƐĞĐƚŽƌŝŶƚǁŽƌĂǌŝůŝĂŶƐƚĂƚĞƐ;^ĆŽWĂƵůŽĂŶĚƐƉşƌŝƚŽ^ĂŶƚŽͿ͘
ƐƵďƐŝĚŝĂƌǇŽĨWŶĞƌŐŝĂƐĚĞWŽƌƚƵŐĂů͕ŽŶĞŽĨƚŚĞůĂƌŐĞƐƚƵƌŽƉĞĂŶŽƉĞƌĂƚŽƌƐŝŶƚŚĞĞŶĞƌŐǇ
ƐĞĐƚŽƌ͕WŶĞƌŐŝĂƐĚŽƌĂƐŝůǁĞŶƚƉƵďůŝĐŝŶƚŚĞEĞǁDĂƌŬĞƚŽĨƚŚĞ^ĆŽWĂƵůŽ^ƚŽĐŬǆĐŚĂŶŐĞ
ŝŶ :ƵůǇ ϮϬϬϱ͕ ĂĚŚĞƌŝŶŐ ƚŽ ƚŚĞ ŚŝŐŚĞƐƚ ƐƚĂŶĚĂƌĚƐ ŽĨ ĐŽƌƉŽƌĂƚĞ ŐŽǀĞƌŶĂŶĐĞ͘ dŚĞ ŽƌŐĂŶŝǌĂƚŝŽŶ
ĐŚĂƌƚďĞůŽǁƐƵŵŵĂƌŝǌĞƐƚŚĞ'ƌŽƵƉΖƐĐƵƌƌĞŶƚŽǁŶĞƌƐŚŝƉƐƚƌƵĐƚƵƌĞ͗
ϴϭ
ϮϬϭϮDE'DEdZWKZd
DZKKEKD/ÊZ/KEd,WKtZ^dKZ
dŚĞ ǇĞĂƌ ŽĨ ϮϬϭϮ ǁĂƐ ŵĂƌŬĞĚ ďǇ ƉƵƌƐƵŝŶŐ ƚŚĞ ƌĞĐŽǀĞƌǇ ŽĨ ĞĐŽŶŽŵŝĐ ŐƌŽǁƚŚ͘ ,ŽǁĞǀĞƌ͕ ƚŚĞ
ĞĐŽŶŽŵǇŚĂƐĂůƌĞĂĚǇƐŚŽǁŶƚŽďĞŝƌƌĞŐƵůĂƌ͕ŝŶǁŚŝĐŚ'WŚĂƐŐƌŽǁŶŽŶůǇϬ͘ϳй͕ĨƌŽŵ:ĂŶƵĂƌǇ
ƚŽ^ĞƉƚĞŵďĞƌϮϬϭϮ͕ĐŽŵƉĂƌĞĚƚŽƚŚĞƐĂŵĞƉĞƌŝŽĚŝŶƚŚĞƉƌĞǀŝŽƵƐǇĞĂƌ͘
ƵƌŝŶŐƚŚĞǇĞĂƌ͕ƚŚĞ'ŽǀĞƌŶŵĞŶƚŚĂƐĞƐƚĂďůŝƐŚĞĚŵĂŶǇŵĞĂƐƵƌĞƐǁŝƚŚƚŚĞƉƵƌƉŽƐĞŽĨďŽŽƐƚŝŶŐ
ƚŚĞĞĐŽŶŽŵǇʹĞŶĐŽƵƌĂŐŝŶŐŝŶĨƌĂƐƚƌƵĐƚƵƌĞƉƌŽũĞĐƚƐ͕ƌĞĚƵĐŝŶŐŝŶƚĞƌĞƐƚƌĂƚĞƐ͕ƌĞĚƵĐŝŶŐƚĂǆĞƐĂŶĚ
ƌĞůŝĞǀŝŶŐ ĨƌŽŵ ƉĂǇƌŽůů͘ dŚĞƐĞ ĂĐƚŝŽŶƐ ďĞŶĞĨŝƚĞĚ ŐƌĞĂƚůǇ ƚŚĞ ƌĞƚĂŝů ďƵƐŝŶĞƐƐ͕ ƐĂůĞƐ ǀŽůƵŵĞ ŽĨ
ǁŚŝĐŚ͕ĂĐĐŽƌĚŝŶŐƚŽ/'͕ŚĂƐŐƌŽǁŶϴ͘ϰйʹĐŽŶƐŽůŝĚĂƚĞĚĨŽƌƚŚĞǇĞĂƌƵƉƚŽEŽǀĞŵďĞƌϮϬϭϮʹ
ĂŶĚƌĞĨůĞĐƚĞĚŽŶƚŚĞĞŵƉůŽǇŵĞŶƚ;ĐŽŶƐŽůŝĚĂƚĞĚĂǀĞƌĂŐĞƵŶĞŵƉůŽǇŵĞŶƚƌĂƚĞĨŽƌƚŚĞǇĞĂƌǁĂƐ
ϱ͘ϱй͕ ůŽǁĞƌ ƚŚĂŶ ƚŚĞ ŚŝƐƚŽƌŝĐĂů ƌĞĐŽƌĚ ŽĨ ϮϬϭϭͿ ĐŽŶƚƌŝďƵƚŝŶŐ ƚŽ ŵŝŶŝŵŝǌĞ ŝŵƉĂĐƚƐ ŽĨ ƚŚĞ
ŝŶƚĞƌŶĂƚŝŽŶĂůĐƌŝƐŝƐŽŶƚŚĞŝŶĚƵƐƚƌǇ͘
ƌĂǌŝůŝĂŶ ŝŶĚƵƐƚƌŝĂů ƐĞŐŵĞŶƚ ǁĂƐ ŐƌĞĂƚůǇ ĂĨĨĞĐƚĞĚ ďǇ ƚŚĞ ŐůŽďĂů ĞĐŽŶŽŵŝĐ ƐůŽǁĚŽǁŶ ʹ Ă
ŚŝŐŚůŝŐŚƚĨŽƌƚŚĞĐŽŽůŝŶŐŽĨƵƌŽƉĞ͕h^ĂŶĚŚŝŶĂ;ƌĂǌŝů͛ƐŵĂŝŶďƵƐŝŶĞƐƐƉĂƌƚŶĞƌƐͿʹĂŶĚĨŽƌ
ƚŚĞ ƐůŽǁ ƉĂĐĞ ŽĨ ŝŶǀĞƐƚŵĞŶƚ ŝŶ ƚŚĞ ĚŽŵĞƐƚŝĐ ŵĂƌŬĞƚ͘ /Ŷ ƚŚĞ ĐŽŶƐŽůŝĚĂƚĞĚ ĨŽƌ ƚŚĞ ǇĞĂƌ͕
ĂĐĐŽƌĚŝŶŐƚŽ/'͕ŝŶĚƵƐƚƌŝĂůƉŚǇƐŝĐĂůƉƌŽĚƵĐƚŝŽŶŚĂĚĚĞĐƌĞĂƐĞĚϮ͘ϳй͘
^ƚŝůů͕ƌĂǌŝůŝĂŶĞǆƉŽƌƚƐĂŶĚŝŵƉŽƌƚƐŚĂĚ͕ĂĐĐŽƌĚŝŶŐƚŽD/;DŝŶŝƐƚƌǇŽĨĞǀĞůŽƉŵĞŶƚ͕/ŶĚƵƐƚƌǇ
ĂŶĚ &ŽƌĞŝŐŶ dƌĂĚĞͿ͕ ƚŚĞ ƐĞĐŽŶĚ ŚŝŐŚĞƐƚ ĂŵŽƵŶƚ ŝŶ ƚŚĞ ŚŝƐƚŽƌǇ ŽĨ ƚŚĞ ƚƌĂĚĞ ďĂůĂŶĐĞ ŝŶ ϮϬϭϮ
;ĞǀĞŶ ƉƌĞƐĞŶƚŝŶŐ Ă ĚĞĐƌĞĂƐĞ ŝŶ ƌĞůĂƚŝŽŶ ƚŽ ϮϬϭϭͿ͕ ǁŝƚŚ ĂŵŽƵŶƚƐ ŽĨ h^ΨϮϰϮ͘ϲ ďŝůůŝŽŶ ĂŶĚ
h^ΨϮϮϯ͘ϭ ďŝůůŝŽŶ͕ ƌĞƐƉĞĐƚŝǀĞůǇ͘ tŝƚŚ ƚŚĞƐĞ ƌĞƐƵůƚƐ͕ ƚƌĂĚĞ ďĂůĂŶĐĞ ǁĂƐ h^Ψ ϭϵ͘ϰ ďŝůůŝŽŶ ĂŶĚ
ĐŽŵŵĞƌĐĞĐŚĂŝŶ͕h^Ψϰϲϱ͘ϳďŝůůŝŽŶ͘
dŚĞ ǇĞĂƌǁĂƐ ĂůƐŽ ŵĂƌŬĞĚ ďǇ ĐƵƚƐ ŝŶ ƚŚĞ ďĂƐŝĐ ŝŶƚĞƌĞƐƚ ƌĂƚĞ͕ ^ĞůŝĐ͕ ĐůŽƐŝŶŐ ƚŚĞǇĞĂƌ Ăƚϳ͘Ϯϱй͕
ĐŽŵƉĂƌĞĚƚŽϭϭ͘ϬйŝŶ:ĂŶƵĂƌǇϮϬϭϮ͘dŚŝƐĚĞĐůŝŶĞŚĂƐƐŚŽǁŶƚŚĞĐŽŶĐĞƌŶŽĨƚŚĞ'ŽǀĞƌŶŵĞŶƚŝŶ
ƚƌǇŝŶŐ ƚŽ ŬĞĞƉ ƚŚĞ ƌĂǌŝůŝĂŶ ĞĐŽŶŽŵǇ ďŽŽƐƚĞĚ ĨĂĐŝŶŐ ƚŚĞ ĞǆƚĞƌŶĂů ĐƌŝƐŝƐ͘ dŚĞ ĚĞĐƌĞĂƐĞ ŝŶ ƚŚĞ
>ŽŶŐdĞƌŵ/ŶƚĞƌĞƐƚZĂƚĞ;d:>WͿ͕ĨƌŽŵϱ͘ϱйƉ͘Ă͘ƚŽϱ͘ϬйƉ͘Ă͘ǁĂƐĂůƐŽĂŚŝŐŚůŝŐŚƚŝŶϮϬϭϮ͘
EZ'zKE^hDWd/KE
ĐĐŽƌĚŝŶŐƚŽƚŚĞW;ŶĞƌŐǇWůĂŶŶŝŶŐŽŵƉĂŶǇͿĚŽŵĞƐƚŝĐĞůĞĐƚƌŝĐƉŽǁĞƌĐŽŶƐƵŵƉƚŝŽŶŝŶƚŚĞ
ŐƌŝĚ ƚŽƚĂůĞĚ ϰϰϴ͘Ϯ dtŚ ŝŶ ϮϬϭϮ͕ ƌĞƉƌĞƐĞŶƚŝŶŐ ĂŶ ŝŶĐƌĞĂƐĞ ŽĨ ϯ͘ϱй ŝŶ ƌĞůĂƚŝŽŶ ƚŽ ϮϬϭϭ͘
ZĞƐŝĚĞŶƚŝĂůĂŶĚŽŵŵĞƌĐŝĂůĐůĂƐƐĞƐǁĞƌĞƚŚĞŽŶĞƐĐŽŶƚƌŝďƵƚŝŶŐĨŽƌƚŚŝƐƌĞƐƵůƚ͕ǁŝƚŚŝŶĐƌĞĂƐĞƐŽĨ
ϱ͘ϬйĂŶĚϳ͘ϵй͕ƌĞƐƉĞĐƚŝǀĞůǇ͕ŝŵƉĂĐƚĞĚďǇĨĂĐƚŽƌƐĂƐŝŶĐŽŵĞƌĂŝƐĞƐĂŶĚƵŶĞŵƉůŽǇŵĞŶƚĚĞĐůŝŶĞ͘
,ŽƵƐĞŚŽůĚĐŽŶƐƵŵƉƚŝŽŶŚĂƐŐƌŽǁŶϱ͘ϬйŝŶϮϬϭϮ͘
/ƚŝƐǁŽƌƚŚŶŽƚŝŶŐ͕ĂůƐŽ͕ƚŚĞƉĞƌĨŽƌŵĂŶĐĞŽĨƚŚĞĐŽŵŵĞƌĐŝĂůĐůĂƐƐ͕ƌĞĨůĞĐƚŝŶŐĂŶŝŶĐƌĞĂƐĞŝŶƚŚŝƐ
ƐĞŐŵĞŶƚ͕ ŝŶ ƚŚĞ ĞĐŽŶŽŵŝĐ ĞŶǀŝƌŽŶŵĞŶƚ͘ ,ŽǁĞǀĞƌ͕ ƚŚĞ ŝŶĚƵƐƚƌŝĂů ĐůĂƐƐ ǁĂƐ ŝŵƉĂĐƚĞĚ ďǇ ƚŚĞ
ĐŽŽůŝŶŐŽĨƌĂǌŝůŝĂŶŝŶĚƵƐƚƌŝĂůƉƌŽĚƵĐƚŝŽŶ͕ƌĞĚƵĐŝŶŐĞŶĞƌŐǇĐŽŶƐƵŵƉƚŝŽŶĐŽŵƉĂƌĞĚƚŽƉƌĞǀŝŽƵƐ
ǇĞĂƌ͘
Z'h>dKZzEs/ZKEDEd
Z'h>dKZz>dZd/KE^
dŚĞ ǇĞĂƌ ŽĨ ϮϬϭϮ ǁĂƐ ŵĂƌŬĞĚ ďǇ ƐŝŐŶŝĨŝĐĂŶƚ ĐŚĂŶŐĞƐ ŝŶ ƌĞŐƵůĂƚŝŽŶƐ ĂƉƉůŝĞĚ ƚŽ ƚŚĞ ĞůĞĐƚƌŝĐ
ƉŽǁĞƌ ŝŶĚƵƐƚƌǇ͕ ĂŵŽŶŐ ƚŚĞŵ͕ WƌŽǀŝƐŝŽŶĂů DĞĂƐƵƌĞ EŽ͘ ϱϳϵͬϮϬϭϮ͕ ŝŶ ǁŚŝĐŚ ƚŚĞ ĨĞĚĞƌĂů
ŐŽǀĞƌŶŵĞŶƚƉƌĞƐĞŶƚĞĚŵĞĂƐƵƌĞƐƚŽƌĞĚƵĐĞƚŚĞĞůĞĐƚƌŝĐŝƚǇďŝůů͘ǀĞƌĂŐĞƌĞĚƵĐƚŝŽŶĞƐƚŝŵĂƚĞĚĨŽƌ
Ăůů ƌĂǌŝů ŝƐ ϮϬ͘Ϯй͕ ƌĞƐƵůƚŝŶŐ ĨƌŽŵ ƚŚĞ ŐŽǀĞƌŶŵĞŶƚ ŽƉĞƌĂƚŝŽŶ ŝŶ ƚǁŽ ǁĂǇƐ͗ ZĞŶĞǁĂů ŽĨ
ĐŽŶĐĞƐƐŝŽŶƐ;ϭϯйͿĂŶĚƌĞĚƵĐƚŝŽŶŝŶƐĞĐƚŽƌĐŚĂƌŐĞƐ;ϳйͿ͘
ϴϮ
ϮϬϭϮDE'DEdZWKZd
WƌŽǀŝƐŝŽŶĂůDĞĂƐƵƌĞEŽ͘ϱϳϵͬϮϬϭϮ͕ǁŚŝĐŚƌĞƐƵůƚĞĚŝŶƚŚĞ>ĂǁϭϮ͘ϳϴϯĂƐŽĨ:ĂŶƵĂƌǇϭϭ͕ϮϬϭϯ͕
ŚĂƐĞƐƚĂďůŝƐŚĞĚƚŚĂƚŐĞŶĞƌĂƚŝŽŶĂŶĚƚƌĂŶƐŵŝƐƐŝŽŶĐŽŶĐĞƐƐŝŽŶĂŝƌĞƐ͕ǁŚŝĐŚŚĂǀĞďĞĞŶĂƵĐƚŝŽŶĞĚ
ďĞĨŽƌĞ&ĞďƌƵĂƌǇϭϯ͕ϭϵϵϱ;ƌƚŝĐůĞϭϵŽĨ>Ăǁϵ͘ϬϳϰͬϭϵϵϱͿĂŶĚŚĂĚƚŚĞŝƌĂŐƌĞĞŵĞŶƚƐŵĂƚƵƌŝŶŐ
ďĞƚǁĞĞŶ ϮϬϭϯ ĂŶĚ ϮϬϭϳ͕ ŵĂǇ ĞĂƌůǇ ĞǆƚĞŶĚ ƚŚĞŝƌ ĐŽŶĐĞƐƐŝŽŶƐ͘ dŚĞ ŐĞŶĞƌĂƚŝŽŶ ĐŽŶĐĞƐƐŝŽŶƐ
ĐŽǀĞƌĞĚ ďǇ ƚŚĞ >Ăǁ ƐŚŽƵůĚ ŵĂŬĞ ƚŚĞŝƌ ŐƵĂƌĂŶƚĞĞĚ ƉŽǁĞƌ ŽƵƚƉƵƚ ĂǀĂŝůĂďůĞ ĨŽƌ ƚŚĞ ƌĞŐŝŵĞ ŽĨ
ƋƵŽƚĂƐ ƚŽ ďĞ ĚŝƐƚƌŝďƵƚĞĚ ƉƌŽƉŽƌƚŝŽŶĂƚĞůǇ ƚŽ ƚŚĞ ŵĂƌŬĞƚ ŽĨ ĞĂĐŚ ĚŝƐƚƌŝďƵƚŽƌ͕ ŝŵƉĂĐƚŝŶŐ ƚŚĞ
ĐŽŶƚƌĂĐƚŝŶŐ ŽĨ ĞŶĞƌŐǇ͘ &Žƌ ŝƚƐ ƉĂƌƚ͕ ƚƌĂŶƐŵŝƐƐŝŽŶ ĐŽŶĐĞƐƐŝŽŶĂŝƌĞƐ͕ ĂĨĨĞĐƚĞĚ ďǇ DWϱϳϵͬϭϮ͕ ǁŝůů
ĐŽŶƐŝĚĞƌŝŶƚŚĞŝƌƚĂƌŝĨĨƐŽŶůǇĐŽƐƚƐŽĨŽƉĞƌĂƚŝŽŶĂŶĚŵĂŝŶƚĞŶĂŶĐĞ͕ĐŚĂƌŐĞƐĂŶĚƚĂǆĞƐ͕ŽŶĐĞƚŚĞ
ĂƐƐĞƚƐƌĞůĂƚĞĚƚŽƚŚĞƐĞƌǀŝĐĞƉƌŽǀŝƐŝŽŶǁŝůůďĞĨƵůůǇĂŵŽƌƚŝǌĞĚ͘
ZĞŐĂƌĚŝŶŐ ^ĞĐƚŽƌ ŚĂƌŐĞƐ͕ ĨĞĞƐ ĨƌŽŵ &ƵĞů ŽŶƐƵŵƉƚŝŽŶ ĐĐŽƵŶƚ ;Ϳ ĂŶĚ 'ůŽďĂů ZĞǀĞƌƐĂů
ZĞƐĞƌǀĞƐ ʹ Z'Z ǁŝůů ŶŽ ůŽŶŐĞƌ ďĞ ĐŚĂƌŐĞĚ ĨƌŽŵ ĐŽŶƐƵŵĞƌƐ ĂŶĚ ĐŽŶŽŵŝĐ ĞǀĞůŽƉŵĞŶƚ
ĐĐŽƵŶƚ;ͿǁŝůůďĞŝŶŝƚŝĂůůǇƌĞĚƵĐĞĚŝŶϳϱйŽĨŝƚƐĐƵƌƌĞŶƚǀĂůƵĞ͘
ĞĐƌĞĞ ϳ͘ϴϵϭ ŽĨ :ĂŶƵĂƌǇ Ϯϯ͕ ϮϬϭϯ ĞƐƚĂďůŝƐŚĞĚ Ă ďƌŽĂĚĞƌ ƐĐŽƉĞ ĨŽƌ ƚŚĞ ĂƉƉůŝĐĂƚŝŽŶ ŽĨ ƌĞƐŽƵƌĐĞƐ͕ǁŚŝĐŚŵĂǇďĞƵƐĞĚƚŽƐƵďƐŝĚŝǌĞƚŚĞƚĂƌŝĨĨĚŝƐĐŽƵŶƚƐĞƐƚĂďůŝƐŚĞĚďǇůĂǁ͕ƐƵĐŚĂƐƚŚĞ
ƐŽĐŝĂů ƚĂƌŝĨĨ ĨŽƌ ƉĞŽƉůĞ ŽŶ Ă ůŽǁ ŝŶĐŽŵĞ͕ ƌƵƌĂů͕ ǁĂƚĞƌ͕ ƐĞǁĂŐĞ ĂŶĚ ƐĂŶŝƚĂƚŝŽŶ͕ ŝƌƌŝŐĂƚŽƌƐ͕ ĂŶĚ
ŽƚŚĞƌƐ͘/ŶƚŚŝƐŵĂŶŶĞƌ͕ƚŚĞĚŝĨĨĞƌĞŶĐĞĞĂƌŶĞĚŝŶŝŶĐŽŵĞ͕ĚƵĞƚŽƚŚĞĚŝƐĐŽƵŶƚƐŐƌĂŶƚĞĚ͕ǁŝůůŶŽ
ůŽŶŐĞƌďĞƌĞŝŵďƵƌƐĞĚďǇŵĞĂŶƐŽĨƚŚĞƚĂƌŝĨĨƐŽĨƚŚĞŽƚŚĞƌĐŽŶƐƵŵĞƌƐ͘
KŶ:ĂŶƵĂƌǇϮϰ͕ϮϬϭϯ͕EĂƚŝŽŶĂůŐĞŶĐǇŽĨůĞĐƚƌŝĐĂůWŽǁĞƌ;EE>ͿĂƉƉƌŽǀĞĚƚŚĞǆƚƌĂŽƌĚŝŶĂƌǇ
dĂƌŝĨĨ ZĞǀŝƐŝŽŶ ʹ Zd͕ ƐƉĞĐŝĨŝĐ ĨŽƌ ƚŚĞ ĂĚũƵƐƚŵĞŶƚ ƚŽ ƚŚĞ ĐŽƐƚƐ ŽĨ ĞůĞĐƚƌŝĐ ƉŽǁĞƌ͕ ĐŽƐƚƐ ŽĨ
ƚƌĂŶƐŵŝƐƐŝŽŶ ĂŶĚ ƐĞĐƚŽƌ ĐŚĂƌŐĞƐ͕ ŽĨ Ăůů ƉŽǁĞƌ ĚŝƐƚƌŝďƵƚŽƌƐ͘ dŚĞƌĞĨŽƌĞ͕ ƐŝŵƵůƚĂŶĞŽƵƐůǇ͕
ƵŶŵĂŶĂŐĞĂďůĞ ĐŽƐƚƐ ĂŶĚ ƐƵƉƉůǇ ƚĂƌŝĨĨƐǁŝůů ďĞ ƌĞĚƵĐĞĚ͕ ǁŝƚŚ ŶŽ ŝŵƉĂĐƚ ŽŶƚŚĞ ŵĂƌŐŝŶŽĨ ƚŚĞ
ĚŝƐƚƌŝďƵƚŽƌƐ͕ĨŽƌƚŚĞƉƵƌƉŽƐĞƐĚĞƐĐƌŝďĞĚŝŶƚŚŝƐƉĂƌĂŐƌĂƉŚ͕ǁŚŝĐŚǁŝůůďĞƌĞĂůŝǌĞĚďǇĐŽŶƐƵŵĞƌƐ
ĂƐĨƌŽŵƚŚĞĞŶĚŽĨ:ĂŶƵĂƌǇϮϬϭϯ͘
dŚĞ ĐŽŶĐĞƐƐŝŽŶƐ ŽĨ ŚǇĚƌŽĞůĞĐƚƌŝĐ ŐĞŶĞƌĂƚŝŽŶ ŚĞůĚ ďǇ 'ƌƵƉŽ W ʹ ŶĞƌŐŝĂƐ ĚŽ ƌĂƐŝů ʹ ĨŽƌ
ŚĂǀŝŶŐ ďĞĞŶ ŐƌĂŶƚĞĚ ĂĨƚĞƌ &ĞďƌƵĂƌǇ ϭϵϵϱ͕ ĚĂƚĞ ŽĨ ĞĨĨĞĐƚŝǀĞŶĞƐƐ ŽĨ >Ăǁ ϴ͘ϵϴϳ ʹ ǁŝůů ŶŽƚ ďĞ
ĂĨĨĞĐƚĞĚ ďǇ ƚŚĞ ƌĞŐƵůĂƚŽƌǇ ĐŚĂŶŐĞƐ ŝŶ ƋƵĞƐƚŝŽŶ͘ ,ŽǁĞǀĞƌ͕ ƚŚĞƐĞ ĐŚĂŶŐĞƐ ŵĂǇ ŝŶĨůƵĞŶĐĞ ƚŚĞ
ƌƵůĞƐ ƚŽ ďĞ ĂƉƉůŝĞĚ ƚŽ ƚŚĞ ĞǆƚĞŶƐŝŽŶ ŽĨ ƚŚĞƐĞ ĐŽŶĐĞƐƐŝŽŶƐ ŝŶ ƚŚĞ ĨƵƚƵƌĞ͕ ĂƐ ƉĞƌ ĐŽŶĚŝƚŝŽŶƐ
ĞƐƚĂďůŝƐŚĞĚŶŽǁ͗
ͻ ŽŵƉĞŶƐĂƚŝŽŶƉĞƌƚĂƌŝĨĨĐĂůĐƵůĂƚĞĚďǇE>ĨŽƌĞĂĐŚŚǇĚƌŽĞůĞĐƚƌŝĐƉůĂŶƚ͖
ͻ ^ĂůĞ ŽĨ ĞůĞĐƚƌŝĐ ƉŽǁĞƌ ĨƌŽŵ ƉůĂŶƚƐ ;ĐĞƌƚŝĨŝĐĂƚĞ ŶĂŵĞĚ ͞ƐƐƵƌĞĚ ŶĞƌŐǇ͟Ϳ ƚŚƌŽƵŐŚ ƋƵŽƚĂƐ
ĞǆĐůƵƐŝǀĞůǇĂůůŽĐĂƚĞĚƚŽZĞŐƵůĂƚĞĚDĂƌŬĞƚ͕ƚŚĂƚŝƐƚŽƐĂǇ͕ƚŽĚŝƐƚƌŝďƵƚŽƌƐ͖ĂŶĚ
ͻ ^ƵďũĞĐƚƚŽƚŚĞƐĞƌǀŝĐĞƋƵĂůŝƚǇƐƚĂŶĚĂƌĚƐĨŝǆĞĚďǇE>͘
dZ/&&Zs/t^
dŚĞŵĞƚŚŽĚƚŽĐĂƌƌǇŽƵƚƚŚĞdŚŝƌĚǇĐůĞŽĨdĂƌŝĨĨZĞǀŝƐŝŽŶ;ϯZdWͿǁĂƐƉƵďůŝƐŚĞĚĂĨƚĞƌƚŚĞĚĂƚĞ
ŽĨƚĂƌŝĨĨƌĞǀŝƐŝŽŶŽĨƐŽŵĞĚŝƐƚƌŝďƵƚŽƌƐ͘dŚĞƌĞĨŽƌĞ͕E>͛ƐǆĞĐƵƚŝǀĞŽĂƌĚŚĂƐĚĞĐŝĚĞĚƚŚĂƚƚŚĞ
ĐŽŵƉĂŶŝĞƐǁŝƚŚƚĂƌŝĨĨƌĞǀŝƐŝŽŶďĞƚǁĞĞŶϮϬϭϭĂŶĚ&ĞďƌƵĂƌǇϮϬϭϮ͕ŚĂĚƚŚĞŝƌƚĂƌŝĨĨƐĞǆƚĞŶĚĞĚƚŽ
ƚŚĞ ĚĂƚĞ ŽĨ ƚŚĞ ŶĞǆƚ ƚĂƌŝĨĨ ƌĞǀŝƐŝŽŶ͕ ŚŽǁĞǀĞƌ ǁŝƚŚ ƌĞƚƌŽĂĐƚŝǀĞ ĞĨĨĞĐƚƐ ƚŽ ƚŚĞ ŽƌŝŐŝŶĂůůǇ ƉŽƐƚĞĚ
ĚĂƚĞ͘WĂŶĚĞŝƌĂŶƚĞ͕ǁŚŽƐĞĐŽŶĐĞƐƐŝŽŶĂŐƌĞĞŵĞŶƚ͕ƐĞƚĨŽƌƚŚƚŚĂƚƚŚĞƚĂƌŝĨĨƌĞǀŝƐŝŽŶƐŚŽƵůĚ
ŽĐĐƵƌ ŝŶ KĐƚŽďĞƌ ϮϬϭϭ͕ ŚĂĚ͕ ŝŶ ƚŚĞ ƚĂƌŝĨĨ ƉƌŽĐĞƐƐ ŽĨ ϮϬϭϮ͕ ƚŚĞ ƌĞƚƌŽĂĐƚŝǀĞ ĞĨĨĞĐƚƐ ŽĨ ƚĂƌŝĨĨ
ƌĞǀŝƐŝŽŶ ŽĨ ϮϬϭϭ ĂŶĚ ƚĂƌŝĨĨ ƌĞĂĚũƵƐƚŵĞŶƚ ŽĨ ϮϬϭϮ͘ Ɛ ĨƌŽŵ ƚŚĞ ĚŝĨĨĞƌĞŶĐĞ ďĞƚǁĞĞŶ ƚŚĞ ƚĂƌŝĨĨƐ
ĞǆƚĞŶĚĞĚ ĂŶĚ ƚŚŽƐĞ ĚĞĨŝŶĞĚ ŝŶ ƚŚĞ ƚĂƌŝĨĨ ƌĞĂĚũƵƐƚŵĞŶƚ͕ Ă ĨŝŶĂŶĐŝĂů ĞůĞŵĞŶƚ ǁĂƐ ŐĞŶĞƌĂƚĞĚ͕
ǁŚŝĐŚǁŝůůďĞĂŵŽƌƚŝǌĞĚŝŶƚŚƌĞĞŝŶƐƚĂůůŵĞŶƚƐ͕ĂŶĚƚŚĞĨŝƌƐƚŽŶĞǁŝůůďĞĐŽŶƐŝĚĞƌĞĚŝŶƚŚĞƚĂƌŝĨĨ
ƌĞĂĚũƵƐƚŵĞŶƚ ŽĨ ϮϬϭϮ ĂŶĚ ŽƚŚĞƌ ƐƵďƐĞƋƵĞŶƚ ƌĞǀŝƐŝŽŶƐ͘ W ƐĐĞůƐĂ ǁŝůů ŚĂǀĞ ŝƚƐ ƐŝǆƚŚ ƚĂƌŝĨĨ
ƌĞǀŝƐŝŽŶǁŝƚŚƚŚĞŶĞǁŵĞƚŚŽĚŝŶƵŐƵƐƚϮϬϭϯ͘
ϴϯ
ϮϬϭϮDE'DEdZWKZd
dZ/&&:h^dDEd^
W ĂŶĚĞŝƌĂŶƚĞ ʹ ǀĞƌĂŐĞ ĂŶŶƵĂů ƚĂƌŝĨĨ ƌĞĂĚũƵƐƚŵĞŶƚϭŐƌĂŶƚĞĚ ƚŽ ƚŚĞ ĐŽŶĐĞƐƐŝŽŶĂŝƌĞ ǁĂƐ
ϭϭ͘ϰϱй͕ƌĞĂůůŽĐĂƚŝŶŐƚĂƌŝĨĨƐĨŽƌƚŚĞƉĞƌŝŽĚŽĨKĐƚŽďĞƌϮϯ͕ϮϬϭϮƚŽKĐƚŽďĞƌϮϮ͕ϮϬϭϯ͘/ŶƌĞůĂƚŝŽŶ
ƚŽƚŚĞƚĂƌŝĨĨƉƌĂĐƚŝĐĞĚƵƉƚŽKĐƚŽďĞƌϮϮ͕ϮϬϭϮ͕ĂƉƉƌŽǀĞĚĂƚƚŚĞĂŶŶƵĂůƚĂƌŝĨĨƌĞĂĚũƵƐƚŵĞŶƚŽĨ
ϮϬϭϬ͕ƚŚĞĂǀĞƌĂŐĞĞĨĨĞĐƚƌĞĂůŝǌĞĚďǇĐĂƉƚŝǀĞĐŽŶƐƵŵĞƌƐ͕ĐŽŶƐŝĚĞƌŝŶŐƚŚĞƚĂƌŝĨĨƌĞǀŝƐŝŽŶŽĨϮϬϭϭ͕
ǁĂƐϳ͘Ϯϵй͘
dŚĞĨŝŶĂŶĐŝĂůĂĚũƵƐƚŵĞŶƚƌĞůĂƚŝŶŐƚŽƚŚĞƉŽƐƚƉŽŶĞŵĞŶƚŽĨƚŚĞWĞƌŝŽĚŝĐdĂƌŝĨĨZĞǀŝĞǁŽĨϮϬϭϭŽĨ
ƚŚĞWĂŶĚĞŝƌĂŶƚĞ͕ŝŶƚŚĞƚŽƚĂůĂŵŽƵŶƚŽĨZΨϳϴŵŝůůŝŽŶ͕ǁĂƐĚŝǀŝĚĞĚŝŶƚŽƚŚƌĞĞƉŽƌƚŝŽŶƐ͕ǁŝƚŚ
ƚŚĞĨŝƌƐƚŝŶĐůƵĚĞĚŝŶƚŚŝƐĂĚũƵƐƚŵĞŶƚ͘
W ƐĐĞůƐĂ ʹ dŚĞ ĂǀĞƌĂŐĞ ĂŶŶƵĂů ƚĂƌŝĨĨϮƌĞĂĚũƵƐƚŵĞŶƚ ŐƌĂŶƚĞĚ ƚŽ ƚŚĞ ĐŽŶĐĞƐƐŝŽŶĂŝƌĞ ǁĂƐ
ϭϰ͘Ϯϵй͕ ƌĞĂĚũƵƐƚŝŶŐ ƚŚĞ ƚĂƌŝĨĨƐ ĨŽƌ ƚŚĞ ƉĞƌŝŽĚ ĨƌŽŵ ƵŐƵƐƚ Ϭϳ͕ ϮϬϭϮ ƚŽ ƵŐƵƐƚ Ϭϲ͕ ϮϬϭϯ͘ dŚĞ
ĂǀĞƌĂŐĞĞĨĨĞĐƚĐŚĂƌŐĞĚƚŽWƐĐĞůƐĂĐĂƉƚŝǀĞĐŽŶƐƵŵĞƌƐǁĂƐϭϭ͘ϯϯй͕ƚĂŬŝŶŐŝŶƚŽĂĐĐŽƵŶƚƚŚĞ
ĨŝŶĂŶĐŝĂůĂĚũƵƐƚŵĞŶƚƐƌĞůĂƚĞĚƚŽƉƌŝŽƌƉĞƌŝŽĚƐ͘
hd/KE^
dŚĞƌĞǁĞƌĞĨŽƵƌĂƵĐƚŝŽŶƐŚĞůĚŝŶϮϬϭϮŝŶƚŚĞZĞŐƵůĂƚĞĚŶǀŝƌŽŶŵĞŶƚ͗ƵĐƚŝŽŶͲϱŝŶĞĐĞŵďĞƌ
ĂŶĚĚũƵƐƚŵĞŶƚƵĐƚŝŽŶƐŝŶDĂƌĐŚ͕:ƵŶĞĂŶĚ^ĞƉƚĞŵďĞƌ͘
ƵĐƚŝŽŶͲϱ͕ŽŶĞĐĞŵďĞƌϭϰ͕ϮϬϭϮĨŽƌƐƵƉƉůǇďĞŐŝŶŶŝŶŐϮϬϭϳ͕ƐŽůĚϯϬϮ͘ϮDtĂǀĞƌĂŐĞĂƚĂŶ
ĂǀĞƌĂŐĞƉƌŝĐĞŽĨZΨϵϭ͘ϮϱͬDtŚ͘ϭϬǁŝŶĚĨĂƌŵĚĞǀĞůŽƉŵĞŶƚƐǁĞƌĞŶĞŐŽƚŝĂƚĞĚ͕ĂŵŽƵŶƚŝŶŐƚŽĂ
ƚŽƚĂůŽĨϭϱϭ͘ϲĂǀĞƌĂŐĞDtĂƚƚŚĞĂǀĞƌĂŐĞƉƌŝĐĞŽĨZΨϴϳ͘ϵϰͬDtŚ͘/ŶƚŚŝƐƵĐƚŝŽŶ͕WŶĞƌŐŝĂƐ
ĚŽƌĂƐŝůŽďƚĂŝŶĞĚƚŚĞĐŽŶĐĞƐƐŝŽŶŽĨĂĐŚŽĞŝƌĂĂůĚĞŝƌĆŽ,ǇĚƌŽĞůĞĐƚƌŝĐWůĂŶƚ;h,Ϳ͕ǁŚŝĐŚǁŝůů
ďĞďƵŝůƚŽŶƌĂŐƵĂƌŝZŝǀĞƌŝŶƚŚĞƐƚĂƚĞŽĨŵĂƉĄ͘dŚĞƉůĂŶƚŚĂƐƐŽůĚϭϮϵ͘ϳĂǀĞƌĂŐĞDtĨŽƌĂ
ƉĞƌŝŽĚ ŽĨ ϯϬ ǇĞĂƌƐ Ăƚ ƚŚĞ ƉƌŝĐĞ ŽĨ ZΨ ϵϱ͘ϯϭͬDtŚ ;ƌĞĨĞƌĞŶĐĞ͗ ĞĐĞŵďĞƌ ϭϮͿ͘ KƚŚĞƌ ϮϬ͘ϵ
ĂǀĞƌĂŐĞ Dt ŽĨ h, ^ĂŶƚŽ ŶƚŽŶŝŽ ĚŽ :Ăƌŝ ŝŶ ƌĞŐƵůĂƚĞĚ ĂŐƌĞĞŵĞŶƚƐ͕ ĨŽƌ Ϯϴ ǇĞĂƌƐ͕ ǁĂƐ ĂůƐŽ
ƚƌĂĚĞĚĂƚƚŚĞƵĐƚŝŽŶĨŽƌƚŚĞƉƌŝĐĞŽĨZΨϴϮ͘ϬϬͬDtŚ;ƌĞĨĞƌĞŶĐĞ͗ĞĐĞŵďĞƌϮϬϭϮͿ͘
dŚƌĞĞ ZĞǀŝƐŝŽŶ ƵĐƚŝŽŶƐ ǁĞƌĞ ŚĞůĚ ŝŶ ϮϬϭϮ͕ ŝŶ ĚŝĨĨĞƌĞŶƚ ƐƵďŵĂƌŬĞƚƐ͕ ƚŽƚĂůŝŶŐ ϭϭϵ͘ϱ Dt ŽĨ
ĞŶĞƌŐǇƐŽůĚĂƚƐĞǀĞƌĂůĂǀĞƌĂŐĞƉƌŝĐĞƐ͕ǀĂƌǇŝŶŐĨƌŽŵZΨZΨϭϭϰ͘ϱϭͬDtƚŽZΨϭϰϮ͘ϰϲͬDtŚ͘
/ŶŐĞŶĞƌĂů͕ĞŶĞƌŐǇĂƵĐƚŝŽŶƐŽĨϮϬϭϮŚĂǀĞƐƵƉƉůŝĞĚƚŚĞĞŶĞƌŐǇĚĞŵĂŶĚƌĞƋƵŝƌĞĚďǇĚŝƐƚƌŝďƵƚŽƌƐ͕
ĐŽŶƐŝĚĞƌŝŶŐƚŚĂƚ ĂĨƚĞƌ ƐĞǀĞƌĂů ƉŽƐƚƉŽŶĞŵĞŶƚƐ͕ƚŚĞ ĨĞĚĞƌĂů ŐŽǀĞƌŶŵĞŶƚ ĚĞĐŝĚĞĚ ƚŽ ĐĂŶĐĞůƚŚĞ
ĞŶĞƌŐǇĂƵĐƚŝŽŶͲϯŽĨϮϬϭϮ͕ƚŽďĞŚĞůĚŽŶĞĐĞŵďĞƌϭϮ͕ǁŚŝĐŚǁŽƵůĚŶĞŐŽƚŝĂƚĞĞŶĞƌŐǇƐƵƉƉůǇ
ĂŐƌĞĞŵĞŶƚƐĂƐĨƌŽŵϮϬϭϱ͕ǁŚĞŶŝƚĂƐƐĞƐƐĞĚƚŚĂƚŝƚǁŽƵůĚŶŽƚďĞŶĞĐĞƐƐĂƌǇƚŽŚŝƌĞĂĚĚŝƚŝŽŶĂů
ĞŶĞƌŐǇďǇƚŚĞĚŝƐƚƌŝďƵƚŽƌƐƚŽŵĞĞƚƚŚĞĐŽŶƐƵŵƉƚŝŽŶĚĞŵĂŶĚ͘
>dZd/KE^K&KZWKZdEdhZ
/Ŷ ƚŚĞ ďĞŐŝŶŶŝŶŐ ŽĨ ƚŚĞ ǇĞĂƌ͕ ŽŶ :ĂŶƵĂƌǇ ϱ͕ ϮϬϭϮ͕ W ŶĞƌŐŝĂƐ ĚŽ ƌĂƐŝů ŝŶĨŽƌŵĞĚ ƚŚĂƚ ŝƚƐ
ƉĂƌĞŶƚ ĐŽŵƉĂŶǇ W ʹ ŶĞƌŐŝĂƐ ĚĞ WŽƌƚƵŐĂů͕ ƉƵƌƐƵĂŶƚ ƚŽ ƚŚĞ ŶŽƚŝĐĞ ƚŽ ŵĂƌŬĞƚ ĚŝƐĐůŽƐĞĚ ŽŶ
:ĂŶƵĂƌǇϰ͕ϮϬϭϮ͕ŝŶĨŽƌŵĞĚƚŚĞĂĐƋƵŝƐŝƚŝŽŶŽĨƋƵĂůŝĨŝĞĚƐŚĂƌĞŚŽůĚŝŶŐĂƚƚƌŝďƵƚĂďůĞƚŽŚŝŶĂdŚƌĞĞ
'ŽƌŐĞƐ͘
KŶDĂǇϮϴ͕ϮϬϭϮ͕WŶĞƌŐŝĂƐĚŽƌĂƐŝůĞŶƚĞƌĞĚŝŶƚŽĂŶĂŐƌĞĞŵĞŶƚĨŽƌƚŚĞƐĂůĞŽĨƚŚĞƚŽƚĂů
ƐŚĂƌĞƐ ŝƚ ŚĞůĚ ŝŶ ǀƌĞĐǇ WĂƌƚŝĐŝƉĂĕƁĞƐ >ƚĚĂ͘ ;͞ǀƌĞĐǇ͟Ϳ ƚŽ dW ƌĞƉƌĞƐĞŶƚŝŶŐ ϭϬϬй ŽĨ ƚŚŝƐ
ĐŽŵƉĂŶǇΖƐ ĐĂƉŝƚĂů͕ ƚŽ dW ʹ ŽŵƉĂŶŚŝĂ ĚĞ dƌĂŶƐŵŝƐƐĆŽ ĚĞ ŶĞƌŐŝĂ ůĠƚƌŝĐĂ WĂƵůŝƐƚĂ
;͞dW͟Ϳ͕ĨŽƌĂƚŽƚĂůĂŵŽƵŶƚŽĨZΨϱϴŵŝůůŝŽŶ͘/ŶĂDĂƌŬĞƚEŽƚŝĐĞ͕ĚŝƐĐůŽƐĞĚŽŶĞĐĞŵďĞƌϮϭ͕
1
2
Ratification Resolution ANEEL nº 1.368 of October 16, 2012
Ratification Resolution ANEEL nº 1.326 of July 31, 2012
ϴϰ
ϮϬϭϮDE'DEdZWKZd
ϮϬϭϮ͕WŶĞƌŐŝĂƐĚŽƌĂƐŝůŝŶĨŽƌŵĞĚƚŚĞŵĂƌŬĞƚƚŚĂƚ͕ŽŶĞĐĞŵďĞƌϭϭ͕ϮϬϭϮ͕ƚŚĞĞĨĨĞĐƚŝǀĞ
KƉĞƌĂƚŝŽŶ ŽĨ ƐĞůůŝŶŐ ǀƌĞĐǇ͛Ɛ ƋƵŽƚĂƐ ŚĞůĚ ďǇ ƚŚĞ ŽŵƉĂŶǇ ƚŽ dW ǁĂƐ ĂƉƉƌŽǀĞĚ ďǇ ƚŚĞ
EĂƚŝŽŶĂůŐĞŶĐǇŽĨůĞĐƚƌŝĐĂůWŽǁĞƌ;EE>Ϳ͘
KŶ:ƵůǇϴ͕ϮϬϭϮ͕WŶĞƌŐŝĂƐĚŽƌĂƐŝůĞŶƚĞƌĞĚŝŶƚŽĂŶĂŐƌĞĞŵĞŶƚƚŽĂƐƐƵŵĞƚŚĞŵĂŶĂŐĞŵĞŶƚ
ŽĨ ƚŚĞ ǁŽƌŬƐ Ăƚ WĞĐĠŵ / dŚĞƌŵŽĞůĞĐƚƌŝĐ WŽǁĞƌ WůĂŶƚ͕ ƚŚƌŽƵŐŚ ƚŚĞ ĂĐƋƵŝƐŝƚŝŽŶ͕ ƚŽŐĞƚŚĞƌ ǁŝƚŚ
DWyŶĞƌŐŝĂ͕ŝŶĞƋƵĂůƉƌŽƉŽƌƚŝŽŶƐ͕ŽĨϭϬϬйŽĨƚŚĞƐŚĂƌĞƐŽĨDƌĂƐŝů>ƚĚĂ͕͘ĂĐŽŶƐŽƌƚŝƵŵ
ĐŽŵƉŽƐĞĚ ďǇ ƚŚĞ ĐŽŵƉĂŶŝĞƐ DĂŝƌĞ dĞĐŶŝŵŽŶƚ 'ƌŽƵƉ ĂŶĚ ĨĂĐĞĐ 'ƌŽƵƉ͕ ĨŽƌ ƚŚĞ ƐǇŵďŽůŝĐ
ĂŵŽƵŶƚ ŽĨ ZΨ ϭ͘ϬϬ͘ dŚĞ ĂĐƋƵŝƐŝƚŝŽŶ ŝƐ Ɛƚŝůů ƐƵďũĞĐƚ ƚŽ ƚŚĞ ĨƵůĨŝůůŵĞŶƚ ŽĨ ƉƌĞĐĞĚĞŶƚ ĐŽŶĚŝƚŝŽŶƐ͕
ĂŶĚWŶĞƌŐŝĂƐĚŽƌĂƐŝůǁŝůůďĞƌĞƐƉŽŶƐŝďůĞŽŶůǇĨŽƌƚŚĞWĞĐĠŵ/dŚĞƌŵŽĞůĞĐƚƌŝĐWŽǁĞƌ͘
ĚĚŝƚŝŽŶĂůůǇ͕ŽŶKĐƚŽďĞƌϯϬ͕ϮϬϭϮ͕ŶĞƌƚƌĂĚĞʹŽŵĞƌĐŝĂůŝǌĂĕĆŽĞ^ĞƌǀŝĕŽƐĚĞŶĞƌŐŝĂ^͕͘͘ŝŶ
ƚŚĞ ƐĐŽƉĞ ŽĨ ƚŚĞ ǆƚƌĂŽƌĚŝŶĂƌǇ 'ĞŶĞƌĂů DĞĞƚŝŶŐ͕ ŽĐĐƵƌƌĞĚ ŽŶ KĐƚŽďĞƌ ϯϬ͕ ϮϬϭϮ͕ ƌĞƐŽůǀĞĚ ƚŽ
ĐŚĂŶŐĞŝƚƐĐŽƌƉŽƌĂƚĞŶĂŵĞƚŽWʹŽŵĞƌĐŝĂůŝǌĂĕĆŽĞ^ĞƌǀŝĕŽƐĚĞŶĞƌŐŝĂ^͘͘
ƚůĂƐƚ͕ŝŶĂEŽƚŝĐĞƚŽDĂƌŬĞƚĚŝƐĐůŽƐĞĚŽŶĞĐĞŵďĞƌϭϰ͕ϮϬϭϮ͕WŶĞƌŐŝĂƐĚŽƌĂƐŝůŝŶĨŽƌŵĞĚ
ƚŚĂƚŝƚŽďƚĂŝŶĞĚ͕ŝŶƚŚĞƐĐŽƉĞŽĨĂƵĐƚŝŽŶͲϱŚĞůĚďǇE>͕ƚŚĞĐŽŶĐĞƐƐŝŽŶŽĨƚŚĞĂĐŚŽĞŝƌĂ
ĂůĚĞŝƌĆŽ tĂƚĞƌ WŽǁĞƌ ^ƚĂƚŝŽŶ ǁŚŝĐŚ ǁŝůů ďĞ ďƵŝůƚ ŝŶ ƚŚĞ ƐƚĂƚĞ ŽĨ ŵĂƉĄ͕ ŽŶ ƌĂŐƵĂƌŝ ZŝǀĞƌ͕
ǁŝƚŚĂŶŝŶƐƚĂůůĞĚĐĂƉĂĐŝƚǇŽĨϮϭϵDt͘
h^/E^^Z^Ύ
;ΎͿdŚĞŽƉĞƌĂƚŝŶŐŝŶĨŽƌŵĂƚŝŽŶŚĂƐŶŽƚďĞĞŶĂƵĚŝƚĞĚďǇƚŚĞ/ŶĚĞƉĞŶĚĞŶƚƵĚŝƚŽƌƐ͘
'EZd/KE
DĂŝŶƐƚƌĂƚĞŐŝĐǀĞĐƚŽƌĨŽƌƚŚĞŐƌŽǁƚŚŽĨďƵƐŝŶĞƐƐŽĨWŶĞƌŐŝĂƐĚŽƌĂƐŝů͕ƚŚĞŐĞŶĞƌĂƚŝŽŶĂƌĞĂ
ĞŶĚĞĚƚŚĞǇĞĂƌϮϬϭϮǁŝƚŚŝŶƐƚĂůůĞĚĐĂƉĂĐŝƚǇŽĨϮ͕ϬϭϮDt͘dŚĞŝŶĐƌĞĂƐĞŝŶƌĞůĂƚŝŽŶƚŽƚŚĞϭ͕ϴϮϴ
Dt ŽĨ ŝŶƐƚĂůůĞĚ ĐĂƉĂĐŝƚǇ ŝŶ ϮϬϭϭ ŝƐ ĚƵĞ ƚŽ ƚŚĞ ĐŽŵŵĞƌĐŝĂů ƐƚĂƌƚͲƵƉ ŽĨ ƚŚĞ ĨŝƌƐƚ ƵŶŝƚ ŽĨ ƚŚĞ
WĞĐĠŵ / dŚĞƌŵŽĞůĞĐƚƌŝĐ WŽǁĞƌ WůĂŶƚ ;ϭϴϬ Dt͕ ƉƌŽƉŽƌƚŝŽŶĂů ƚŽ ƚŚĞ ŽŵƉĂŶǇ͛Ɛ ϱϬй
ƐŚĂƌĞŚŽůĚŝŶŐͿĂŶĚĐĂƉĂĐŝƚǇŝŶĐƌĞĂƐĞŽĨh,DĂƐĐĂƌĞŶŚĂƐ;ϰ͘ϱDtͿ͘
ŶĞƌƉĞŝǆĞʹWĂƌƚŝĐŝƉĂƚĞƐǁŝƚŚϲϬйŽĨƚŚĞĐĂƉŝƚĂůŝŶƚŚĞŚǇĚƌŽĞůĞĐƚƌŝĐƉŽǁĞƌƉůĂŶƚWĞŝǆĞŶŐŝĐĂů͕
ůŽĐĂƚĞĚ ŽŶ ZŝŽ dŽĐĂŶƚŝŶƐ͕ ĐŽŶƐƚƌƵĐƚĞĚ ŝŶ ƉĂƌƚŶĞƌƐŚŝƉ ǁŝƚŚ &ƵƌŶĂƐ ĞŶƚƌĂŝƐ ůĠƚƌŝĐĂƐ͘ /ŶƐƚĂůůĞĚ
ƉůĂŶƚĐĂƉĂĐŝƚǇŽĨϰϱϮDtǁĂƐƌĞŐƵůĂƌŝǌĞĚϰϵϴ͘ϳϱDt͕ƵƉŽŶƉƵďůŝĐĂƚŝŽŶŽĨKƌĚŝŶĂŶĐĞDDŶǑ
ϭϭ͕ ĚĂƚĞĚ ϬϱͬϭϵͬϮϬϭϭ͕ ǁŚŝĐŚ ĂůƐŽ ŝŶĐůƵĚĞƐ ŐƌŽǁƚŚ ŽĨ ϵ͘ϱ Dt ŽŶ ĂǀĞƌĂŐĞ ŝŶ WŚǇƐŝĐĂů
'ƵĂƌĂŶƚĞĞ͘
ŶĞƌŐĞƐƚͲĚŝƌĞĐƚůǇĂŶĚŝŶĚŝƌĞĐƚůǇĐŽŶƚƌŽůƐƚŚĞĞůĞĐƚƌŝĐĞŶĞƌŐǇŐĞŶĞƌĂƚŝŽŶĂƐƐĞƚƐŽĨWŶĞƌŐŝĂƐ
ĚŽ ƌĂƐŝů͕ ǁŚŝĐŚ ďĞůŽŶŐƐ ƚŽ EZ'^d ŝƚƐĞůĨ ;ŽŶ ϬϳͬϯϭͬϮϬϭϭ EZ'^d ŵĞƌŐĞĚ ĂƐƚĞůŽ
ŶĞƌŐĠƚŝĐŽ^͘͘ʹ^ͿƚŽ^ĂŶƚĂ&ĠŶĞƌŐŝĂ͕ŽƐƚĂZŝĐĂĂŶĚWĂŶƚĂŶĂůŶĞƌŐŝĂ͕ŚŽůĚŝŶŐϭϱƉŽǁĞƌ
ƉůĂŶƚƐƵŶĚĞƌŽƉĞƌĂƚŝŽŶǁŝƚŚĂƚŽƚĂůƉŽǁĞƌŽĨϯϵϮ͘ϴDt͘dŚĞƉůĂŶƚƐĂƌĞůŽĐĂƚĞĚŝŶƚŚĞ^ƚĂƚĞƐŽĨ
ƐƉşƌŝƚŽ^ĂŶƚŽ;ϯϮϰ͘ϬDtŽĨŝŶƐƚĂůůĞĚĐĂƉĂĐŝƚǇͿĂŶĚDĂƚŽ'ƌŽƐƐŽĚŽ^Ƶů;ϲϴ͘ϴDtŽĨŝŶƐƚĂůůĞĚ
ĐĂƉĂĐŝƚǇͿ͘ /Ŷ ƚŚĞ ƐĞĐŽŶĚ ƋƵĂƌƚĞƌ ŽĨ ϮϬϭϮ͕ ƚŚĞ ƉŽǁĞƌ ƵƉŐƌĂĚĞ ŽĨ ŐĞŶĞƌĂƚŝŶŐ ƵŶŝƚ ϭ ŽĨ h,
DĂƐĐĂƌĞŶŚĂƐ͕ĂĚĚŝŶŐϰ͘ϱDtŽĨŝŶƐƚĂůůĞĚĐĂƉĂĐŝƚǇ͘
/ŶǀĞƐƚĐŽ ʹ ŚŽůĚƐ ϭй ŽĨ ƚŚĞ ŝŶƐƚĂůůĞĚ ĐĂƉĂĐŝƚǇ ŽĨ hƐŝŶĂ ,ŝĚƌĞůĠƚƌŝĐĂ >ƵŝƐ ĚƵĂƌĚŽ DĂŐĂůŚĆĞƐ
;͞h, >ĂũĞĂĚŽ͟Ϳ͕ ůŽĐĂƚĞĚ ŝŶ ZŝŽ dŽĐĂŶƚŝŶƐ͕ ŝŶ ƚŚĞ ^ƚĂƚĞ ŽĨ dŽĐĂŶƚŝŶƐ͘ dŚĞ WůĂŶƚ ŚĂƐ ŝŶƐƚĂůůĞĚ
ƉŽǁĞƌŽĨϵϬϮ͘ϱDt͕ĚŝƐƚƌŝďƵƚĞĚĂƌŽƵŶĚĨŝǀĞŐĞŶĞƌĂƚŽƌƵŶŝƚƐǁŝƚŚƉŽǁĞƌŽĨϭϴϬ͘ϱDtĞĂĐŚ͘
>ĂũĞĂĚŽ ŶĞƌŐŝĂ Ͳ tŝƚŚ ŝŶƚĞƌĞƐƚ ŽĨ ϳϮ͘Ϯϳй ŝŶ h, >ĂũĞĂĚŽ͕ >ĂũĞĂĚŽ ŶĞƌŐŝĂ ŝƐ ƚŚĞ ŚŽůĚĞƌ ŽĨ
ϲϱϮ͘Ϯ Dt ŽĨ ŝŶƐƚĂůůĞĚ ĐĂƉĂĐŝƚǇ͘ dŚĞ ĚŝǀŝƐŝŽŶ ŽĨ ƚŚĞ ŝŶƐƚĂůůĞĚ ĐĂƉĂĐŝƚǇ ŽĨ ƚŚĞ ƉůĂŶƚ ŽĐĐƵƌƐ ŝŶ
ƉƌŽƉŽƌƚŝŽŶƚŽŝŶƚĞƌĞƐƚŝŶƚŚĞǀŽƚŝŶŐĐĂƉŝƚĂů͘
ϴϱ
ϮϬϭϮDE'DEdZWKZd
WZĞŶŽǀĄǀĞŝƐƌĂƐŝůͲŽŵƉĂŶŝĞƐŝŶǁŚŝĐŚWŶĞƌŐŝĂƐĚŽƌĂƐŝůŚŽůĚƐĂϰϱйƐŚĂƌĞŝŶƚĞƌĞƐƚ͕
ŚĂƐƚǁŽǁŝŶĚĨĂƌŵƐŝŶŽƉĞƌĂƚŝŽŶŝŶƚŚĞƐƚĂƚĞŽĨ^ĂŶƚĂĂƚĂƌŝŶĂ͕ƚŽƚĂůŝŶŐϭϯ͘ϴDtŽĨŝŶƐƚĂůůĞĚ
ĐĂƉĂĐŝƚǇ ŽŶ DĂǇ Ϯϭ͕ ϮϬϭϭ͕ ƐƚĂƌƚĞĚ ƵƉ ƐĂůĞƐ ŽƉĞƌĂƚŝŽŶƐ ŽĨ ƚŚĞ ƚŚŝƌĚ ĐŽŵƉĂŶǇΖƐ ǁŝŶĚ ĨĂƌŵ ŝŶ
ƌĂǌŝů͕K>ŝĚƌĞŝƌĂ/͕ŝŶdƌĂŵĂŶĚĂşͲZ^͕ǁŝƚŚϳϬDt͘
/Ŷ ƚŚĞǇĞĂƌ ŽĨ ϮϬϭϮ͕ ǀŽůƵŵĞ ŽĨ ĞŶĞƌŐǇ ƐŽůĚ ďǇ ƚŚĞƉůĂŶƚƐ ŽĨ ƚŚĞ 'ƌŽƵƉ ƚŽƚĂůĞĚ ϵ͕ϰϱϬ͘ϯ'tŚ͕
ϭϮ͘ϳйŚŝŐŚĞƌǁŚĞŶĐŽŵƉĂƌĞĚƚŽϮϬϭϭ͕ŵĂŝŶůǇ͕ĚƵĞƚŽƚŚĞƐƚĂƌƚͲƵƉŽĨƚŚĞĨŝƌƐƚŐĞŶĞƌĂƚŽƌƵŶŝƚŽĨ
WĞĐĠŵ/dŚĞƌŵŽĞůĞĐƚƌŝĐWŽǁĞƌWůĂŶƚ͘
WZK:d^hEZKE^dZhd/KE
WD/d,ZDK>dZ/WKtZW>Ed
WŶĞƌŐŝĂƐĚŽƌĂƐŝůΖƐƐƚƌĂƚĞŐǇƚŽŝŶĐƌĞĂƐĞƚŚĞŝŶƐƚĂůůĞĚĐĂƉĂĐŝƚǇŝŶŐĞŶĞƌĂƚŝŽŶŝŶĐůƵĚĞƐƚŚĞ
ĐŽŶƐƚƌƵĐƚŝŽŶŽĨWĞĐĠŵ/dŚĞƌŵŽĞůĞĐƚƌŝĐWŽǁĞƌWůĂŶƚŝŶĂϱϬйƉĂƌƚŶĞƌƐŚŝƉǁŝƚŚDWyŶĞƌŐŝĂ͕ŝŶ
ƚŚĞƐƚĂƚĞŽĨĞĂƌĄ͕ǁŝƚŚĂŶŝŶƐƚĂůůĞĚĐĂƉĂĐŝƚǇŽĨϳϮϬDt͕ŽƵƚŽĨǁŚŝĐŚϲϭϱĂǀĞƌĂŐĞDtǁĞƌĞ
ƐŽůĚƚŽƚŚĞ'ƌŽƵƉŝŶƚŚĞĂƵĐƚŝŽŶͲϱ͕ŝŶKĐƚŽďĞƌϮϬϬϳ͘
/Ŷ KĐƚŽďĞƌ ϮϬϬϵ͕ ƚŚĞ ůŽŶŐͲƚĞƌŵ ĨŝŶĂŶĐŝŶŐ ĨƌŽŵ ƚŚĞ EĂƚŝŽŶĂů ĂŶŬ ŽĨ ĐŽŶŽŵŝĐ ĂŶĚ ^ŽĐŝĂů
ĞǀĞůŽƉŵĞŶƚ;ΗE^ΗͿ͕ŝŶƚŚĞĂŵŽƵŶƚŽĨZΨϭ͘ϰďŝůůŝŽŶĂŶĚƚŚĞ/ŶƚĞƌĂŵĞƌŝĐĂŶĞǀĞůŽƉŵĞŶƚ
ĂŶŬ ;Η/ΗͿ ŝŶ ƚŚĞ ĂŵŽƵŶƚ ŽĨ h^Ψ ϯϮϬ ŵŝůůŝŽŶ͘ /Ŷ ĞĐĞŵďĞƌ ϮϬϭϮ͕ ĚŝƐďƵƌƐĞŵĞŶƚƐ ĨƌŽŵ ƚŚĞ
E^ƚŽƚĂůĞĚϵϵйŽĨƚŚĞŽǀĞƌĂůůĂŵŽƵŶƚǁŚŝůĞ/ĚŝƐďƵƌƐĞŵĞŶƚƐƚŽƚĂůĞĚŶĞĂƌůǇϵϴй͘
KŶ DĂƌĐŚ Ϯϳ͕ ϮϬϭϮ͕ ƚŚĞ E> ĂƉƉƌŽǀĞĚ ĂŶ ĂŵĞŶĚŵĞŶƚ ƚŽ ƚŚĞ ƐĐŚĞĚƵůĞ ĨŽƌ ƚŚĞ
ŝŵƉůĞŵĞŶƚĂƚŝŽŶŽĨƚŚĞƚŚĞƌŵĂůƉŽǁĞƌƉůĂŶƚŶĞƌŐŝĂWĞĐĠŵ/͕ĂƐǁĞůůĂƐƚŚĞƐƵƉƉůǇƐƚĂƌƚĚĂƚĞ
ƉƌŽǀŝĚĞĚĨŽƌŝŶƚŚĞWŽǁĞƌdƌĂĚŝŶŐŐƌĞĞŵĞŶƚƐŝŶƚŚĞZĞŐƵůĂƚĞĚDĂƌŬĞƚ;ZͿƵƉƚŽ:ƵůǇϮϯ͕
ϮϬϭϮ͘,ŽǁĞǀĞƌ͕ƚŚĞƉůĂŶƚĚŝĚŶŽƚƐƚĂƌƚƚŚĞĐŽŵŵĞƌĐŝĂůŽƉĞƌĂƚŝŽŶŝŶƚŚĞƚĞƌŵŐƌĂŶƚĞĚ͕ďĞĐĂƵƐĞ
ŝƚŚĂĚƚŽĐŽŵƉůǇǁŝƚŚŝƚƐŽďůŝŐĂƚŝŽŶƐŽĨŐƵĂƌĂŶƚĞĞƌĞĐŽǀĞƌǇĞƐƚĂďůŝƐŚĞĚŝŶƚŚĞZƐƚŚƌŽƵŐŚ
ƚŚĞĂĐƋƵŝƐŝƚŝŽŶŽĨĞŶĞƌŐǇĂŐƌĞĞŵĞŶƚƐĨƌŽŵƚŚŝƌĚƉĂƌƚŝĞƐ͘
KŶ :ƵůǇ Ϭϴ͕ ϮϬϭϮ͕ W ŶĞƌŐŝĂƐ ĚŽ ƌĂƐŝů ĞŶƚĞƌĞĚ ŝŶƚŽ ĂŶ ĂŐƌĞĞŵĞŶƚ ƚŽ ĂƐƐƵŵĞ ƚŚĞ
ŵĂŶĂŐĞŵĞŶƚ ŽĨ ƚŚĞ ǁŽƌŬƐ Ăƚ WĞĐĠŵ / dŚĞƌŵŽĞůĞĐƚƌŝĐ WŽǁĞƌ WůĂŶƚ͕ ƚŚƌŽƵŐŚ ƚŚĞ ĂĐƋƵŝƐŝƚŝŽŶ͕
ƚŽŐĞƚŚĞƌ ǁŝƚŚ DWy ŶĞƌŐŝĂ͕ ŽĨ D ƌĂƐŝů͕ ĚƵĞ ƚŽ ĨŝŶĂŶĐŝĂů ƉƌŽďůĞŵƐ ŽĨ ƉƌĞǀŝŽƵƐ ƉĂƌƚŶĞƌƐ
ǁŚŽ ũĞŽƉĂƌĚŝǌĞĚ ƚŚĞ ĐŽŶĐůƵƐŝŽŶ ŽĨ ƚŚĞ ƉƌŽũĞĐƚ͘ dŚĞ ĂĐƋƵŝƐŝƚŝŽŶ ŽĨ D͕ Ɛƚŝůů ƐƵďũĞĐƚ ƚŽ ƚŚĞ
ĐŽŵƉůŝĂŶĐĞ ǁŝƚŚ ƉƌĞĐĞĚĞŶƚ ĐŽŶĚŝƚŝŽŶƐ͕ ŚĂĚ ĂƐ ŵĂŝŶ ƉƵƌƉŽƐĞ ƚŽ ĂǀŽŝĚ ŝŶƚĞƌƌƵƉƚŝŽŶƐ ŝŶ ƚŚĞ
ǁŽƌŬƐŝŶƉƌŽŐƌĞƐƐĂŶĚƚŽĞŶƐƵƌĞĂŶĞĨĨĞĐƚŝǀĞŵĂŶĂŐĞŵĞŶƚƵƉƚŽƚŚĞĐŽŶĐůƵƐŝŽŶŽĨƚŚĞǁŽƌŬ͘
dŚĞ ǇĞĂƌ ŽĨ ϮϬϭϮ ǁĂƐ ŵĂƌŬĞĚ ďǇ ƚŚĞ ďĞŐŝŶŶŝŶŐ ŽĨ ĐŽŵŵĞƌĐŝĂů ŽƉĞƌĂƚŝŽŶƐ ŽĨ hŶŝƚ /͕ ŽŶ
ĞĐĞŵďĞƌ ϭ͕ ĂŶĚ ŝƚ ǁĂƐ ƌĞŵƵŶĞƌĂƚĞĚ ƉƵƌƐƵĂŶƚ ƚŽ ƚŚĞ ƚĞƌŵƐ ƐĞƚ ĨŽƌƚŚ ŝŶ ƚŚĞ ZƐ ĨŽƌ ƚŚŝƐ
ƵŶŝƚ͘hŶŝƚ//ĞŶĚĞĚƚŚĞǇĞĂƌŝŶƚŚĞĨŝŶĂůƉŚĂƐĞƐŽĨĐŽŶƐƚƌƵĐƚŝŽŶ͕ĂŶĚŝƚƐĐŽŵŵĞƌĐŝĂůŽƉĞƌĂƚŝŽŶƐ
ĂƌĞƐůĂƚĞĚƚŽďĞŐŝŶŝŶƚŚĞĨŝƌƐƚƋƵĂƌƚĞƌŽĨϮϬϭϯ͘
ƚ ƚŚĞ ĐůŽƐĞ ŽĨ ƚŚĞ ǇĞĂƌ͕ ƚŚĞ ƉƌŽũĞĐƚ ŚĂĚ ĂĐŚŝĞǀĞĚ ϵϵ͘ϯй ƉŚǇƐŝĐĂů ƉƌŽŐƌĞƐƐ ĂŶĚ ĂĐĐƵŵƵůĂƚĞĚ
ŝŶǀĞƐƚŵĞŶƚŝŶϮϬϭϮĐŽƌƌĞƐƉŽŶĚŝŶŐƚŽƚŚĞWŶĞƌŐŝĂƐĚŽƌĂƐŝůƐŚĂƌĞƚŽƚĂůĞĚZΨϮϴϰ͘ϵŵŝůůŝŽŶ͘
h,ÊdKEdNE/KK:Z/
KŶ KĐƚŽďĞƌ ϭϯ͕ ϮϬϭϭ͕ W ŶĞƌŐŝĂƐ ĚŽ ƌĂƐŝů ĂĐƋƵŝƌĞĚ͕ ƚŚƌŽƵŐŚ ŝƚƐ ƐƵďƐŝĚŝĂƌǇ ŽŵƉĂŶŚŝĂ
ŶĞƌŐĠƚŝĐĂĚŽ:Ăƌŝʹ:͕WĂƌƚŝĐŝƉĂĕƁĞƐ^͕͘͘ǁŚŝĐŚŚĞůĚϵϬйŽĨĞǆƉůŽƌĂƚŝŽŶƌŝŐŚƚƐŽĨ^ĂŶƚŽ
ŶƚƀŶŝŽ ĚŽ :Ăƌŝ ,ǇĚƌŽĞůĞĐƚƌŝĐ WůĂŶƚ ;h,Ϳ͕ ƉƵƌƐƵĂŶƚ ƚŽ DĂƚĞƌŝĂů &ĂĐƚ ĚŝƐĐůŽƐĞĚ ŽŶ :ƵŶĞ ϭϱ͕
ϮϬϭϭ͘
ϴϲ
ϮϬϭϮDE'DEdZWKZd
KŶ ĞĐĞŵďĞƌ Ϯϯ͕ ϮϬϭϭ͕ ƚŚƌŽƵŐŚ ŝƚƐ ŝŶĚŝƌĞĐƚ ĐŽŶƚƌŽůůĞƌ WĂƌƚŝĐŝƉĂĕƁĞƐ ^͕͘͘ ƚŚĞ ŽŵƉĂŶǇ
ĂĐƋƵŝƌĞĚ ƚŚĞ ƌĞŵĂŝŶŝŶŐ ĞǆƉůŽƌĂƚŝŽŶ ƌŝŐŚƚƐ ŽĨ h, ^ĂŶƚŽ ŶƚƀŶŝŽ ĚŽ :Ăƌŝ͕ ďĞĐŽŵŝŶŐ ƚŚĞ ƐŽůĞ
ƉƌŽƉƌŝĞƚŽƌ ŽĨ ƚŚĞ ĐŽŶƐƚƌƵĐƚŝŽŶ ƉƌŽũĞĐƚ͘ E> ĂƉƉƌŽǀĞĚ ƚŚĞ ĨƵůů ƚƌĂŶƐĨĞƌ ŽĨ ƚŚĞƐĞ ƌŝŐŚƚƐ ďǇ
ĞǆĞĐƵƚŝŶŐŝŶ:ĂŶƵĂƌǇϮϬϭϮĂŶĂŵĞŶĚŵĞŶƚƚŽƚŚĞĐŽŶĐĞƐƐŝŽŶĐŽŶƚƌĂĐƚ͘
dŚĞƉƌŽũĞĐƚΖƐƚŽƚĂůŝŶǀĞƐƚŵĞŶƚĨŽƌĞƐĞĞŶƌĂŶŐĞƐĨƌŽŵZΨϭ͕ϮϳϬŵŝůůŝŽŶƚŽZΨϭ͕ϰϭϬŵŝůůŝŽŶ͘dŚĞ
ŝŶǀĞƐƚŵĞŶƚ ŝŶ ƚŚĞ ƉůĂŶƚ ĐŽŶƐƚƌƵĐƚŝŽŶ ;WͿ ĨŽƌ ŝŶƐƚĂůůĞĚ ĐĂƉĂĐŝƚǇ ŽĨ ϯϳϯ͘ϰ Dt͕ ĞǆƉĞŶƐĞƐ ŝŶ
ĞŶǀŝƌŽŶŵĞŶƚĂůƉƌŽŐƌĂŵƐ͕ĐŽŶŶĞĐƚŝŽŶƚŽƚŚĞƚƌĂŶƐŵŝƐƐŝŽŶůŝŶĞƐĂŶĚƉĂǇŵĞŶƚŽĨƚŚĞƉƌŽũĞĐƚƚŽ
ƐĂůĞ ƉĞƌƐŽŶƐ ĂƌĞ ŝŶĐůƵĚĞĚ /Ŷ ƚŚŝƐ ĂŵŽƵŶƚ͘ h, ^ĂŶƚŽ ŶƚƀŶŝŽ ĚŽ :Ăƌŝ ƐŝŐŶĞĚ ĂŶ W
;ŶŐŝŶĞĞƌŝŶŐ WƌŽĐƵƌĞŵĞŶƚ ĂŶĚ ŽŶƐƚƌƵĐƚŝŽŶͿ ĐŽŶƚƌĂĐƚ ĂůŽŶŐ ƚŚĞ ĨƵůů ƚƵƌŶͲŬĞǇ ŵŽĚĞů ǁŝƚŚ ƚŚĞ
ĐŽŶƐŽƌƚŝƵŵ ŵĂĚĞ ƵƉ ŽĨ ƚŚĞ ĐŽŵƉĂŶŝĞƐ͕ ^ ^͘ ŶŐĞŶŚĂƌŝĂ Ğ ŵƉƌĞĞŶĚŝŵĞŶƚŽƐ͕ ůƐƚŽŵ
ƌĂƐŝůŶĞƌŐŝĂĂŶĚdƌĂŶƐƉŽƌƚĞ>ƚĚĂĞƌĞǀĂ<Žďůŝƚǌ^͘͘
/ŶĞĐĞŵďĞƌϮϬϭϬ͕h,^ĂŶƚŽŶƚƀŶŝŽĚŽ:ĂƌŝƐŽůĚϭϵϬDtŽŶĂǀĞƌĂŐĞĨŽƌĂƚĞƌŵŽĨϯϬǇĞĂƌƐ
ŝŶ ĐŽŶƚƌĂĐƚƐ ƌĞŐƵůĂƚĞĚ Ăƚ ƵĐƚŝŽŶ Ͳϱ Ăƚ Ă ƉƌŝĐĞ ŽĨ ZΨ ϭϭϳ͘ϮϯͬDtŚ ;ďĂƐĞ͗ ĞĐ͕͘ ϮϬϭϮͿ͘ /Ŷ
ĞĐĞŵďĞƌ ϮϬϭϮ͕ ƚŚĞ ƉůĂŶƚ ƐŽůĚ ŵŽƌĞ ϮϬ͘ϵ Dt ŝŶ ƌĞŐƵůĂƚĞĚ ĂŐƌĞĞŵĞŶƚƐ ĨŽƌ Ϯϴ ǇĞĂƌƐ Ăƚ ZΨ
ϴϮ͘ϬϬͬDtŚ;ƌĞĨĞƌĞŶĐĞ͗ĞĐĞŵďĞƌͬϮϬϭϮͿ͘
dŚĞ /ŶƐƚĂůůĂƚŝŽŶ >ŝĐĞŶƐĞ ĨŽƌ ƚŚĞ ƉƌŽũĞĐƚ ǁĂƐ ŝƐƐƵĞĚ ŝŶ :ƵŶĞ ϮϬϭϭ ĂŶĚ ƚŚĞ ĐŽŶƐƚƌƵĐƚŝŽŶ ǁĂƐ
ďĞŐƵŶŝŶƵŐƵƐƚϮϬϭϭĂŶĚĨŽƌĞĐĂƐƚƚŽďĞĨŝŶŝƐŚĞĚďǇƚŚĞĞŶĚŽĨϮϬϭϰ͘/ŶƚŚĞǇĞĂƌϮϬϭϮ͕ůŝĐĞŶƐĞƐ
ĨŽƌ ƐƉĞĐŝĨŝĐ ŝŶƐƚĂůůĂƚŝŽŶ ǁĞƌĞ ĂůƐŽ ŝƐƐƵĞĚ͕ ĨŽƌ͗ ;ŝͿ ƚŚĞ ĐŽŶƐƚƌƵĐƚŝŽŶ ŽĨ ƚŚĞ ϮϯϬ Ŭs ƚƌĂŶƐŵŝƐƐŝŽŶ
ůŝŶĞ ;d>Ϳ ĨŽƌ ĐŽŶŶĞĐƚŝŽŶ ƚŽ ƚŚĞ ĂƐŝĐ EĞƚǁŽƌŬ͖ ĂŶĚ ;ŝŝͿ ŝŵƉůĞŵĞŶƚĂƚŝŽŶ ŽĨ ƚŚĞ WƌŽũĞĐƚ ĨŽƌ ƚŚĞ
ZĞůŽĐĂƚŝŽŶŽĨƚŚĞǀŝůůĂŐĞŽĨ^ĆŽ&ƌĂŶĐŝƐĐŽĚŽ/ƌĂƚĂƉƵƌƵ͘
/ŶKĐƚŽďĞƌϮϬϭϮ͕h,^ĂŶƚŽŶƚƀŶŝŽĚŽ:ĂƌŝǁĂƐŐƌĂŶƚĞĚĂůŽŶŐƚĞƌŵĨŝŶĂŶĐŝŶŐďǇƚŚĞƌĂǌŝůŝĂŶ
ĞǀĞůŽƉŵĞŶƚ ĂŶŬ Ͳ E^ ŝŶ ƚŚĞ ĂŵŽƵŶƚ ŽĨ ZΨϳϯϲ͘ϴ ŵŝůůŝŽŶ͕ ǁŝƚŚ Ă ƚĞƌŵ ŽĨ ϭϴ͘ϱ ǇĞĂƌƐ͕ ŽĨ
ǁŚŝĐŚϭϲǇĞĂƌƐĂƌĞĨŽƌĂŵŽƌƚŝǌĂƚŝŽŶĂŶĚŐƌĂĐĞƉĞƌŝŽĚƵƉƚŽ:ƵŶĞϭϱ͕ϮϬϭϱ͘>ŽĂŶǁĂƐŐƌĂŶƚĞĚĂƚ
ƚŚĞd:>WƌĂƚĞнĂϭ͘ϴϲйƐƉƌĞĂĚĂǇĞĂƌ͘
WZYh^M>/K^/yK&/:K
W ZĞŶŽǀĄǀĞŝƐ ƌĂƐŝů ^͕͘͘ Ă ĐŽŵƉĂŶǇ ŝŶ ǁŚŝĐŚ W ŶĞƌŐŝĂƐ ĚŽ ƌĂƐŝů ƌĞƚĂŝŶƐ ϰϱй ŝŶƚĞƌĞƐƚ͕
ƐŽůĚ ϱϳ͘Ϯ Dt ŽŶ ĂǀĞƌĂŐĞ ŽĨ ŶĞǁ ĞŶĞƌŐǇ Ăƚ ƚŚĞ ƵĐƚŝŽŶ Ͳϱ͕ ŚĞůĚ ĞĐĞŵďĞƌ ϮϬ͕ Ğ ϮϬϭϭ͕ ďǇ
ŵĞĂŶƐŽĨĨŽƵƌǁŝŶĚĞŶĞƌŐǇŐĞŶĞƌĂƚŝŽŶƉƌŽũĞĐƚƐ͗ĂŝǆĂĚŽ&ĞŝũĆŽ/͕//͕///ĂŶĚ/s͕ůŽĐĂƚĞĚŝŶZŝŽ
'ƌĂŶĚĞ ĚŽ EŽƌƚĞ ^ƚĂƚĞ ŝŶ ƚŚĞ ŶŽƌƚŚĞĂƐƚĞƌŶ ƌĞŐŝŽŶ ŽĨ ƌĂǌŝů͘ dŽŐĞƚŚĞƌ͕ ƚŚĞ ƉƌŽũĞĐƚƐ ƚŽƚĂů
ϭϮϬDtŝŶƐƚĂůůĞĚĐĂƉĂĐŝƚǇ͘dŚĞƐĂůĞŽĨĞŶĞƌŐǇŽŶƚŚĞƌĞŐƵůĂƚĞĚŵĂƌŬĞƚŚĂƐĂƚĞƌŵŽĨϮϬǇĞĂƌƐ͕
ďĞŐŝŶŶŝŶŐŝŶϮϬϭϲ͕ĂƚĂƉƌŝĐĞŽĨZΨϵϳͬDtŚ͘dŚĞĚĞǀĞůŽƉŵĞŶƚƐĂůƌĞĂĚǇŚĂǀĞůĞĂƐĞĚůĂŶĚĂŶĚ
ĚĞĨŝŶĞĚ ĐŽŶŶĞĐƚŝŽŶ ƉŽŝŶƚƐ ĂƉƉƌŽǆŝŵĂƚĞůǇ ϭϯ ŬŵƐ ĨƌŽŵ ƚŚĞ ĨĂƌŵƐ͘ dŽƚĂů ŝŶǀĞƐƚŵĞŶƚ ŝŶ ƚŚĞ
ƉƌŽũĞĐƚƐŝƐďĞƚǁĞĞŶZΨϯϱϬŵŝůůŝŽŶĂŶĚZΨϰϬϬŵŝůůŝŽŶ͘dŚĞƉƌŽũĞĐƚƐΖĨŝŶĂŶĐŝĂůƐƚƌƵĐƚƵƌĞŝŶĐůƵĚĞƐ
ĞƐƚŝŵĂƚĞĚůĞǀĞƌĂŐĞŽĨϲϬй͘dŚĞƉĂƌŬ͛ƐŽƉĞƌĂƚŝŽŶƐĂƌĞƐůĂƚĞĚƚŽďĞŐŝŶŝŶ:ĂŶƵĂƌǇϮϬϭϲ͘
h,,K/Z>/ZK
/ŶƚŚĞƵĐƚŝŽŶͲϱ͕ŚĞůĚďǇE>͕ŽŶĞĐĞŵďĞƌϭϰ͕ϮϬϭϮ͕WŶĞƌŐŝĂƐĚŽƌĂƐŝůŽďƚĂŝŶĞĚƚŚĞ
ĐŽŶĐĞƐƐŝŽŶ ŽĨ ĂĐŚŽĞŝƌĂ ĂůĚĞŝƌĆŽ tĂƚĞƌ WŽǁĞƌ ^ƚĂƚŝŽŶ ƚŚĂƚ ǁŝůů ďĞ ďƵŝůƚ ŝŶ ƚŚĞ ƐƚĂƚĞ ŽĨ
ŵĂƉĄ͕ ŽŶ ƌĂŐƵĂƌŝ ZŝǀĞƌ͕ ǁŝƚŚ ĂŶ ŝŶƐƚĂůůĞĚ ĐĂƉĂĐŝƚǇ ŽĨ Ϯϭϵ Dt͘ ĂĐŚŽĞŝƌĂ ĂůĚĞŝƌĆŽ ƐŽůĚ
ϭϮϵ͘ϳ ĂǀĞƌĂŐĞ Dt ĨŽƌ Ă ƚĞƌŵ ŽĨ ϯϬ ǇĞĂƌƐ ƌĞŐƵůĂƚĞĚ ŝŶ ƚŚĞ ƵĐƚŝŽŶ Ͳϱ͕ Ăƚ ƚŚĞ ƉƌŝĐĞ ŽĨ ZΨ
ϵϱ͘ϯϭͬDtŚ;ƌĞĨĞƌĞŶĐĞ͗:ĂŶͬϭϮͿ͘
dŚĞ ƉƌŽũĞĐƚ͛Ɛ ƚŽƚĂů ŝŶǀĞƐƚŵĞŶƚ ĞƐƚŝŵĂƚĞĚ ŝƐ ZΨ ϭ͘ϭ ďŝůůŝŽŶ͘ dŚĞ ƉƌŽũĞĐƚ ĨŝŶĂŶĐŝŶŐ ĐŽŶƐŝĚĞƌƐ
ŚĂǀŝŶŐĂůŽŶŐƚĞƌŵĚĞďƚǁŝƚŚĂŶĞƐƚŝŵĂƚĞĚůĞǀĞƌĂŐĞŽĨƵƉƚŽϲϬй͘
ϴϳ
ϮϬϭϮDE'DEdZWKZd
ZWKtZ/E'
/ŶϮϬϭϮ͕ϰ͘ϱDtǁĞƌĞĂĚĚĞĚƚŽƚŚĞĐĂƉĂĐŝƚǇĂŶĚϭ͘ϵĂǀĞƌĂŐĞƐDtŽĨĂƐƐƵƌĞĚĞŶĞƌŐǇƌĞĨĞƌƌŝŶŐ
ƚŽƚŚĞĐĂƉĂĐŝƚǇŝŶĐƌĞĂƐĞŽĨƚŚĞĨŝƌƐƚŐĞŶĞƌĂƚŽƌƵŶŝƚŽĨh,DĂƐĐĂƌĞŶŚĂƐ͘dŚĞĐĂƉĂĐŝƚǇŝŶĐƌĞĂƐĞ
ŽĨƚŚĞƉůĂŶƚŝƐƐůĂƚĞĚƚŽĞŶĚŝŶƚŚĞǇĞĂƌŽĨϮϬϭϯ͕ǁŚĞŶh,DĂƐĐĂƌĞŶŚĂƐǁŝůůƚŽƚĂůϭϵϴDtŽĨ
ŝŶƐƚĂůůĞĚĐĂƉĂĐŝƚǇĂŶĚϭϯϴ͘ϱĂǀĞƌĂŐĞƐDtŽĨĂƐƐƵƌĞĚĞŶĞƌŐǇ͘
yWE/E'/E^d>>W/dz
/ŶƐƚĂůůĞĚŐĞŶĞƌĂƚŝŽŶĐĂƉĂĐŝƚǇĂƚWŶĞƌŐŝĂƐĚŽƌĂƐŝůǁĂƐĞǆƉĂŶĚĞĚďǇϭϴϰDt͕ƌĞĂĐŚŝŶŐĂ
ƚŽƚĂůĂŵŽƵŶƚŽĨϮ͕ϬϭϮ͘ϱDt͘dŚŝƐŝŶĐƌĞĂƐĞŝƐŽǁĞĚƚŽƚŚĞĞǀĞŶƚƐƐĞŐŵĞŶƚ͗
ͻZĞƉŽǁĞƌŽĨh,DĂƐĐĂƌĞŶŚĂƐ͗нϰ͘ϱDtƚŽƚĂůŝŶŐϭϵϯ͘ϱDt;dŚĞƌĞŝƐĞǆƉĂŶƐŝŽŶĨŽƌĞĐĂƐƚĨŽƌ
ĂŶĂĚĚŝƚŝŽŶĂůϴDtƚŽƚĂůŝŶŐϭϵϴDtŝŶŝŶƐƚĂůůĞĚĨƵƚƵƌĞĐĂƉĂĐŝƚǇͿ͖ĂŶĚ
ͻ KƉĞƌĂƚŝŽŶĂů ƐƚĂƌƚͲƵƉ ŽĨ hŶŝƚ / ŽĨ WĞĐĠŵ / dŚĞƌŵŽĞůĞĐƚƌŝĐ WŽǁĞƌ WůĂŶƚ͗ нϭϴϬ Dt ;ĐĂƉĂĐŝƚǇ
ƉƌŽƉŽƌƚŝŽŶĂƚĞƚŽƚŚĞϱϬйŚĞůĚďǇƚŚĞŽŵƉĂŶǇ͘dŚĞƚŽƚĂůĐĂƉĂĐŝƚǇŽĨƚŚĞhŶŝƚŝƐϯϲϬDtͿ͖
ŽŵŵĞƌĐŝĂů ƐƚĂƌƚͲƵƉ ŽĨ hŶŝƚ // ŽĨ WĞĐĠŵ / dŚĞƌŵŽĞůĞĐƚƌŝĐ WŽǁĞƌ WůĂŶƚ ;нϭϴϬ Dt ŝŶ ƚŚĞ ĨŝƌƐƚ
ƋƵĂƌƚĞƌŽĨϮϬϭϯͿ͕ƚŚĞĞŶĚŽĨĐĂƉĂĐŝƚǇŝŶĐƌĞĂƐĞŽĨDĂƐĐĂƌĞŶŚĂƐ,ǇĚƌŽĞůĞĐƚƌŝĐWůĂŶƚ;h,Ϳ;нϰ͘ϱ
DtŝŶϮϬϭϯͿ͕ƚŚĞŽƉĞƌĂƚŝŽŶĂůƐƚĂƌƚͲƵƉŽĨ^ĂŶƚŽŶƚƀŶŝŽĚŽ:Ăƌŝ,ǇĚƌŽĞůĞĐƚƌŝĐWůĂŶƚ;h,Ϳ;ϯϳϯ
DtŝŶϮϬϭϱͿ͕ĨŽƵƌǁŝŶĚĨĂƌŵƐŽĨĂŝŵĂĚŽ&ŝũŝĂŶ;ϱϰDtŝŶϮϬϭϲ͕ĂĐĂƉĂĐŝƚǇƉƌŽƉŽƌƚŝŽŶĂůƚŽ
ƚŚĞ ŽŵƉĂŶǇ͛Ɛ ϰϱй ƐŚĂƌĞŚŽůĚŝŶŐͿ͕ ĂŶĚ ĂĐŚŽĞŝƌĂ ĂůĚĞŝƌĆŽ ,ǇĚƌŽĞůĞĐƚƌŝĐ WůĂŶƚ ;h,Ϳ ;Ϯϭϵ
DtŝŶϮϬϭϳͿ͕ǁŝůůƌĞƐƵůƚŝŶĂŶŝŶƐƚĂůůĞĚŽĨϮ͕ϴϰϰDt͘
нϮ͕ϯϭϰ
Ϯϭϵ
ϯϳϯ
Ϯ͕ϴϰϰ
ϱϰ
ϱ
ϭ͕ϴϮϴ
ϭϴϬ
ϭϴϬ
Ϯ͕ϬϭϮ
Pecém
Unit I(1)
2012
ϰ
ϱϯϬ
2005
2011
Power upgrade
HPP
Mascarenhas
WĞĐĠŵ Power upgrade
HPP
hŶŝƚ/ ;ϭͿ
Mascarenhas
EŽƚĞƐ͗
;ϭͿϱϬйŽĨŝŶƚĞƌĞƐƚŽĨWŶĞƌŐŝĂƐĚŽƌĂƐŝů
;ϮͿϰϱйŽĨŝŶƚĞƌĞƐƚŽĨWŶĞƌŐŝĂƐĚŽƌĂƐŝůŝŶWZĞŶŽǀĄǀĞŝƐƌĂƐŝů͘
ϴϴ
HPP
Baixa
HPP
Cachoeira
do
Santo
Caldeirão
Feijão
Antonio do Jari
2016(2)
2015
2017
ϮϬϭϮDE'DEdZWKZd
/^dZ/hd/KE
dŚĞ ĚŝƐƚƌŝďƵƚŝŽŶ ĂĐƚŝǀŝƚŝĞƐ ĂƌĞ ĚĞǀĞůŽƉĞĚ ďǇ ƚǁŽ ĐŽŶĐĞƐƐŝŽŶĂŝƌĞƐ ǁŚŝĐŚ ĐĂƚĞƌ ƚŽ ĂƌŽƵŶĚ Ϯ͘ϵ
ŵŝůůŝŽŶ ĐƵƐƚŽŵĞƌƐ͕ ŝŶ ƌĞŐŝŽŶƐ ƚŚĂƚ ŚŽƵƐĞ Ă ƚŽƚĂů ƉŽƉƵůĂƚŝŽŶ ŽĨ ĂƉƉƌŽǆŝŵĂƚĞůǇ ϳ͘ϴ ŵŝůůŝŽŶ
ƉĞŽƉůĞ͘
W ĂŶĚĞŝƌĂŶƚĞ ʹ ŝƐ Ă ĐŽƌƉŽƌĂƚŝŽŶ͕ ƉƵďůŝĐůǇ ƚƌĂĚĞĚ͕ ǁŝƚŚ ƚŚĞ ŽďũĞĐƚŝǀĞ ŽĨ ƌĞŶĚĞƌŝŶŐ
ŐŽǀĞƌŶŵĞŶƚ ĚŝƐƚƌŝďƵƚŝŽŶ ƐĞƌǀŝĐĞƐ ĨŽƌ ƚŚĞ ƉĞƌŝŽĚ ŽĨ ϯϬ ǇĞĂƌƐ ĂƐ ĨƌŽŵ KĐƚŽďĞƌ Ϯϯ͕ ϭϵϵϴ͕
ƉƵƌƐƵĂŶƚ ƚŽ ƚŚĞ ĐŽŶĐĞƐƐŝŽŶ ĐŽŶƚƌĂĐƚ͕ ƐŝŐŶĞĚ ŽŶ ƚŚĂƚ ĚĂƚĞ͘ /Ŷ Ɖƌŝů ϮϬϬϱ ŝƚ ďĞĐĂŵĞ Ă ǁŚŽůůǇͲ
ŽǁŶĞĚ ƐƵďƐŝĚŝĂƌǇ ŽĨ W Ͳ ŶĞƌŐŝĂƐ ĚŽ ƌĂƐŝů ^͘͘ /ƚƐ ŚĞĂĚ ŽĨĨŝĐĞ ŝƐ ůŽĐĂƚĞĚ ŝŶ ƚŚĞ ĐŝƚǇ ŽĨ ^ĆŽ
WĂƵůŽ͕ůĂƌŐĞƐƚĞĐŽŶŽŵŝĐͬĨŝŶĂŶĐŝĂůĐĞŶƚĞƌŝŶ>ĂƚŝŶŵĞƌŝĐĂ͘
/ƚŽƉĞƌĂƚĞƐŝŶϮϴŵƵŶŝĐŝƉĂůŝƚŝĞƐĨƌŽŵƚŚĞ^ƚĂƚĞŽĨ^ĆŽWĂƵůŽ͕ƐƉĞĐŝĨŝĐĂůůǇŝŶƚŚĞƌĞŐŝŽŶƐŽĨůƚŽ
dŝĞƚġ͕sĂůĞĚŽWĂƌĂşďĂĂŶĚ>ŝƚŽƌĂůEŽƌƚĞ͕ĐŽǀĞƌŝŶŐĂƌŽƵŶĚϰ͘ϱŵŝůůŝŽŶŝŶŚĂďŝƚĂŶƚƐ͗Ϯ͘ϱŵŝůůŝŽŶŝŶ
ůƚŽdŝĞƚġ͕ĂŶĚϮ͘ϬŵŝůůŝŽŶŝŶsĂůĞĚŽWĂƌĂşďĂŝŶĂƚŽƚĂůĂƌĞĂŽĨϵ͘ϲƚŚŽƵƐĂŶĚ<ŵϮ͘/ŶϮϬϭϮƚŚĞ
ǀŽůƵŵĞŽĨϭϰ͕ϳϵϯ'tŚǁĂƐĚŝƐƚƌŝďƵƚĞĚƚŽĂƚŽƚĂůϭ͘ϲϬϭŵŝůůŝŽŶďŝůůĞĚĐƵƐƚŽŵĞƌƐ͕ƌĞƉƌĞƐĞŶƚŝŶŐ
ŐƌŽǁƚŚ ŽĨ Ϭ͘ϱй ŽĨ ƚŚĞ ĞŶĞƌŐǇ ĚŝƐƚƌŝďƵƚĞĚ ŝŶ ƌĞůĂƚŝŽŶ ƚŽ ϮϬϭϭ͘ dŚĞ ƌĞŐŝŽŶ ĐŽŶĐĞŶƚƌĂƚĞƐ
ĐŽŵƉĂŶŝĞƐ ĨƌŽŵ ŝŵƉŽƌƚĂŶƚ ĞĐŽŶŽŵŝĐ ƐĞĐƚŽƌƐ͕ ƐƵĐŚ ĂƐ ĂǀŝĂƚŝŽŶ ĂŶĚ ƉĂƉĞƌ ĂŶĚ ƉƵůƉ
ŵĂŶƵĨĂĐƚƵƌĞ͘
W ƐĐĞůƐĂͲWƐĐĞůƐĂŝƐĂĐŽƌƉŽƌĂƚŝŽŶ͕ƉƵďůŝĐůǇƚƌĂĚĞĚƐŝŶĐĞ:ĂŶƵĂƌǇϭϵ͕ϭϵϵϲ͕ǁŝƚŚŚĞĂĚ
ŽĨĨŝĐĞ ŝŶ sŝƚŽƌŝĂ͕ ƐƉŝƌŝƚŽ ^ĂŶƚŽ ^ƚĂƚĞ͕ ĂŶĚ ĐŽŶƚƌŽůůĞĚ ďǇ W Ͳ ŶĞƌŐŝĂƐ ĚŽ ƌĂƐŝů ^͘ ͘ ƐŝŶĐĞ
EŽǀĞŵďĞƌϮϬϬϮ͕ĂƐŝƚƐǁŚŽůůǇͲŽǁŶĞĚƐƵďƐŝĚŝĂƌǇ͕ĂƐŽĨƉƌŝůϮϵ͕ϮϬϬϱ͘
W ƐĐĞůƐĂ ƐĞƌǀĞƐϳϬŽĨ ƚŚĞ ϳϴ ŵƵŶŝĐŝƉĂůŝƚŝĞƐ ĨƌŽŵƚŚĞ ƐƚĂƚĞŽĨƐƉşƌŝƚŽ ^ĂŶƚŽ͕ ŝŶ ĂŶ ĂƌĞĂŽĨ
ϰϭ͕Ϯϰϭ ŬŵϮ͕ ĂƉƉƌŽǆŝŵĂƚĞůǇ ϵϬй ŽĨ ƚŚĞ ƐƚĂƚĞ ĂŶĚ ϵϰй ŽĨ ƚŚĞ ƚŽƚĂů ƉŽƉƵůĂƚŝŽŶ͕ ǁŚŝĐŚ
ĐŽƌƌĞƐƉŽŶĚƐƚŽϯ͘ϯŵŝůůŝŽŶŝŶŚĂďŝƚĂŶƚƐ͘dŚĞŵĂƚƵƌŝƚǇŽĨƚŚĞĐŽŶĐĞƐƐŝŽŶŝƐƵƉƚŽ:ƵůǇϭϲ͕ϮϬϮϱ͘
dŚĞ ŵĂŝŶ ĞĐŽŶŽŵŝĐ ĂĐƚŝǀŝƚŝĞƐ ŽĨ ƚŚĞ ƌĞŐŝŽŶ ĂƌĞ ŝƌŽŶ ŵĞƚĂůůƵƌŐǇ͕ ŝƌŽŶ ŵŝŶŝŶŐ͕ ƉƌŽĚƵĐƚŝŽŶ ŽĨ
ƉĂƉĞƌ͕ŽŝůĂŶĚŐĂƐ͘/ŶϮϬϭϮƚŚĞǀŽůƵŵĞŽĨϭϬ͕ϭϯϬ'tŚǁĂƐĚŝƐƚƌŝďƵƚĞĚƚŽĂƚŽƚĂůϭ͘ϯϯϮŵŝůůŝŽŶ
ďŝůůĞĚĐƵƐƚŽŵĞƌƐ͕ƌĞƉƌĞƐĞŶƚŝŶŐŐƌŽǁƚŚŽĨϯ͘ϮйŽĨƚŚĞĞŶĞƌŐǇĚŝƐƚƌŝďƵƚĞĚŝŶƌĞůĂƚŝŽŶƚŽϮϬϭϭ͘
KWZd/E'WZ&KZDEK&KE^K>/d/^dZ/hd/KE
Market Development
sŽůƵŵĞ;DtŚͿ
/^dZ/hd/KE
ZĞƐŝĚĞŶƚŝĂů
/ŶĚƵƐƚƌŝĂů
ŽŵŵĞƌĐŝĂů
ZƵƌĂů
KƚŚĞƌ
ŶĞƌŐǇƐŽůĚƚŽĞŶĚĐƵƐƚŽŵĞƌƐ
ŽŶǀĞŶƚŝŽŶĂůƐƵƉƉůǇ
ŶĞƌŐǇŝŶƚƌĂŶƐŝƚ;h^Ϳ͗
&ƌĞĞĐƵƐƚŽŵĞƌƐ
ŽŶĐĞƐƐŝŽŶĂŝƌĞƐ
hƐĞͲŐĞŶĞƌĂƚŝŽŶ
KǁŶĐŽŶƐƵŵƉƚŝŽŶ
dŽƚĂůŶĞƌŐǇŝƐƚƌŝďƵƚĞĚ
ϮϬϭϮ
ϮϬϭϭ
sĂƌ͘
ϮϬϭϮͬ
ϮϬϭϭ
ϱ͕ϯϯϳ͕ϲϯϱ
ϰ͕Ϭϴϰ͕ϲϯϯ
ϯ͕ϯϮϴ͕ϭϴϬ
ϳϬϳ͕ϭϱϬ
ϭ͕ϱϵϭ͕ϳϴϭ
ϭϱ͕Ϭϰϵ͕ϯϳϵ
ϱϱϯ͕ϴϮϱ
ϵ͕ϯϬϱ͕ϭϴϴ
ϵ͕Ϭϰϲ͕ϰϳϳ
Ϯϱϴ͕ϳϭϭ
Ϭ
ϭϰ͕ϰϭϵ
Ϯϰ͕ϵϮϮ͕ϴϭϬ
ϱ͕ϭϮϳ͕ϱϯϬ
ϰ͕Ϯϴϵ͕ϴϰϬ
ϯ͕Ϭϰϰ͕ϯϴϰ
ϲϲϱ͕ϳϯϰ
ϭ͕ϰϵϲ͕ϵϮϮ
ϭϰ͕ϲϮϰ͕ϰϭϭ
ϰϵϮ͕ϰϮϮ
ϵ͕ϰϭϯ͕ϵϯϱ
ϵ͕ϭϲϬ͕ϬϬϮ
Ϯϱϯ͕ϵϯϯ
Ϭ
ϭϮ͕ϵϯϳ
Ϯϰ͕ϱϰϯ͕ϳϬϱ
ϰ͘ϭй
Ͳϰ͘ϴй
ϵ͘ϯй
ϲ͘Ϯй
ϲ͘ϯй
Ϯ͘ϵй
ϭϮ͘ϱй
Ͳϭ͘Ϯй
Ͳϭ͘Ϯй
ϭ͘ϵй
Ͳ
ϭϭ͘ϱй
ϭ͘ϱй
EŽƚĞƐ ͗
KƚŚĞƌƐ с'ŽǀĞƌŶŵĞŶƚнWƵďů ŝĐů ŝŐŚƚŝŶŐнWƵďůŝ ĐƐ ĞƌǀŝĐĞ
h^сhƐ ĞŽĨƚŚĞĚŝ Ɛƚƌŝ ďƵƚŝ ŽŶƐǇƐ ƚĞŵ
ϮϬϭϮ
ϮϬϭϭ
Ϯ͕ϰϵϰ͕ϬϬϭ Ϯ͕ϰϭϮ͕ϱϴϱ
Ϯϯ͕ϮϭϬ
ϮϮ͕ϳϳϳ
ϮϮϯ͕ϴϳϬ ϮϬϵ͕ϮϲϬ
ϭϲϴ͕ϲϲϰ ϭϲϯ͕ϲϬϴ
Ϯϯ͕ϲϮϲ
ϮϮ͕ϵϳϱ
Ϯ͕ϵϯϯ͕ϯϳϭ Ϯ͕ϴϯϭ͕ϮϬϱ
ϯ
ϯ
ϮϬϳ
ϭϰϱ
ϭϴϱ
ϭϮϰ
ϯ
ϯ
ϭϵ
ϭϴ
ϯϰϭ
ϯϬϲ
Ϯ͕ϵϯϯ͕ϵϮϮ Ϯ͕ϴϯϭ͕ϲϱϵ
sĂƌ͘
ϮϬϭϮͬ
ϮϬϭϭ
ϯ͘ϰй
ϭ͘ϵй
ϳ͘Ϭй
ϯ͘ϭй
Ϯ͘ϴй
ϯ͘ϲй
Ϭ͘Ϭй
ϰϮ͘ϴй
ϰϵ͘Ϯй
Ϭ͘Ϭй
ϱ͘ϲй
ϭϭ͘ϰй
ϯ͘ϲй
ϴϵ
ůŝĞŶƚƐ;ƵŶŝƚͿ
ϮϬϭϮDE'DEdZWKZd
ĂƉƚŝǀĞDĂƌŬĞƚ
• ŶĞƌŐǇ ƐŽůĚ ƚŽ ĞŶĚ ĐƵƐƚŽŵĞƌƐ͗ ŽŶƐŽůŝĚĂƚĞĚ ŐƌŽǁƚŚ ŽĨ Ϯ͘ϵй ŝŶ ϮϬϭϮ ŵĂŝŶůǇ ƌĞĨůĞĐƚƐ ƚŚĞ
ŝŶĐƌĞĂƐĞĚ ĐŽŶƐƵŵƉƚŝŽŶ ĂŵŽŶŐ ƚŚĞ ƌĞƐŝĚĞŶƚŝĂů ĂŶĚ ĐŽŵŵĞƌĐŝĂů ĐůĂƐƐĞƐ͘ ZĞŐĂƌĚŝŶŐ ƚŚĞ
ZĞƐŝĚĞŶƚŝĂů ĂŶĚ ŽŵŵĞƌĐŝĂů ĐůĂƐƐĞƐ͕ ƚŚĞ ŝŶĐƌĞĂƐĞƐ ŝŶ ƚŚĞ ĐŽŶƐƵŵƉƚŝŽŶ ĂƌĞ ƚŚĞ ĞĨĨĞĐƚ ŽĨ ƚŚĞ
ĞǆƉĂŶƐŝŽŶ ŽĨ ƚŚĞ ĐůŝĞŶƚ ďĂƐĞ͕ ƚŚĞ ŝŶĐƌĞĂƐĞĚ ĂǀĞƌĂŐĞ ŚŽƵƐĞŚŽůĚ ŝŶĐŽŵĞ ƉĞƌ ĐĂƉŝƚĂ ŽŶ Ă
ĚŽŵĞƐƚŝĐƐĐĂůĞŽĨϲ͘ϵйĂŶĚƚŚĞĂǀĞƌĂŐĞĚĞĐƌĞĂƐĞĚƵŶĞŵƉůŽǇŵĞŶƚƌĂƚĞ͘
W ĂŶĚĞŝƌĂŶƚĞ͗ WĞƌĨŽƌŵĂŶĐĞ ǁĂƐ ƋƵŝƚĞ ƉŽƐŝƚŝǀĞ ďŽƚŚ ŝŶ ƌĞƐŝĚĞŶƚŝĂů ƐĞŐŵĞŶƚ ;ϯ͘ϱйͿ ĂŶĚ
ĐŽŵŵĞƌĐŝĂůŽŶĞ;ϵ͘ϳйͿdŚĞƐĞƌĞƐƵůƚƐƌĞĨůĞĐƚƚŚĞŐƌĞĂƚĞƌŶƵŵďĞƌŽĨĚĂǇƐďŝůůĞĚ;нϭ͘ϰŝŶƚŚĞǇĞĂƌ
ĂŶĚƐŝŶĐĞϮϬϭϮǁĂƐĂďŝƐƐĞǆƚŝůĞǇĞĂƌͿĂŶĚƚŚĞƉŽƐŝƚŝǀĞƌĞƐƵůƚŽĨĚŽŵĞƐƚŝĐĞĐŽŶŽŵŝĐŝŶĚŝĐĂƚŽƌƐ͘
ĚĚŝƚŝŽŶĂůůǇ͕ŝŶƚŚĞĐŽŵŵĞƌĐŝĂůƐĞĐƚŽƌ͕ƚŚĞƌĞǁĂƐŵŝŐƌĂƚŝŽŶƚŽƚŚĞĨƌĞĞŵĂƌŬĞƚďǇϭϲĐůŝĞŶƚƐŝŶ
ϮϬϭϮ͘
W ƐĐĞůƐĂ͗ WĞƌĨŽƌŵĂŶĐĞ ǁĂƐ ƉŽƐŝƚŝǀĞ ŝŶ ďŽƚŚ ƚŚĞ ƌĞƐŝĚĞŶƚŝĂů ƐĞŐŵĞŶƚ ;нϱ͘ϭйͿ ĂƐ ǁĞůů ĂƐ
ĐŽŵŵĞƌĐŝĂů;нϴ͘ϴйͿ͕ŝŶĨůƵĞŶĐĞĚďǇƚŚĞŐŽŽĚƌĞƐƵůƚƐŽĨĞŵƉůŽǇŵĞŶƚĂŶĚŝŶĐŽŵĞŝŶĚŝĐĂƚŽƌƐĂŶĚ
ǁĞĂƚŚĞƌĐŽŶĚŝƚŝŽŶƐ͘
/ŶϮϬϭϮ͕ŝŵƉĂĐƚĞĚƚŚĞƌĞƐƵůƚƐŽĨƚŚĞĐůĂƐƐĞƐĂŶĚƌĞĐůĂƐƐŝĨŝĐĂƚŝŽŶŽĨĐŽŵŵŽŶĂŶĚĂĚŵŝŶŝƐƚƌĂƚĞĚ
ĂƌĞĂƐ ŽĨ ƌĞƐŝĚĞŶƚŝĂů ĐŽŶĚŽŵŝŶŝƵŵƐ ĨŽƌ ƚŚĞ ĐŽŵŵĞƌĐŝĂů ĐůĂƐƐ ĂŶĚ ŝŶ ƚŚĞ ĐŽŵŵĞƌĐŝĂů ĐůĂƐƐ ƚŚĞ
ŵŝŐƌĂƚŝŽŶŽĨϭϱĐůŝĞŶƚƐƚŽƚŚĞĨƌĞĞŵĂƌŬĞƚ͘
ĚĚŝƚŝŽŶĂůůǇ͕ ŝŶ ƚŚĞ ZƵƌĂů ƐĞŐŵĞŶƚ͕ Ă ϲ͘Ϯй ŝŶĐƌĞĂƐĞ ƌĞĨůĞĐƚ ƚŚĞ ĐůŝŵĂƚĞ ǁĞĂƚŚĞƌ ĐŽŶĚŝƚŝŽŶƐ ŝŶ
ƚŚĞƐƚĂƚĞŽĨ^Ɖŝƌŝƚ^ĂŶƚŽŝŶĨůƵĞŶĐĞĚďǇƚŚĞůŽǁǀŽůƵŵĞŽĨƉƌĞĐŝƉŝƚĂƚŝŽŶƚŚĂƚŝŶĐƌĞĂƐĞĚĞŶĞƌŐǇ
ĐŽŶƐƵŵƉƚŝŽŶĨŽƌŝƌƌŝŐĂƚŝŽŶ͘
&ƌĞĞDĂƌŬĞƚ
ŶĞƌŐǇ ŝŶ ƚƌĂŶƐŝƚ ;h^Ϳ͗ dŚĞ ϭ͘Ϯй ƌĞĚƵĐƚŝŽŶ ŝŶ ϮϬϭϮ ŝƐ ŵĂŝŶůǇ ĚƵĞ ƚŽ ƚŚĞ ŐůŽďĂů ĞĐŽŶŽŵŝĐ
ƐůŽǁĚŽǁŶƚŚĂƚŝŵƉĂĐƚĞĚŝŶĚƵƐƚƌŝĂůƉƌŽĚƵĐƚŝŽŶŝŶƚŚĞĨŝĞůĚƐŽĨĐŽŶĐĞƐƐŝŽŶŽĨWĂŶĚĞŝƌĂŶƚĞ
ĂŶĚ W ƐĐĞůƐĂ͘ /Ŷ ƐƵŵ͕ ŝŶ ƚŚĞ 'ƌŽƵƉ͛Ɛ ĚŝƐƚƌŝďƵƚŽƌƐ͕ ϲϯ ĐƵƐƚŽŵĞƌƐ ŵŝŐƌĂƚĞĚ ƚŽ ƚŚĞ ĨƌĞĞ
ŵĂƌŬĞƚ͕ŽĨǁŚŝĐŚϮϯĂƌĞƌĞƉƌĞƐĞŶƚĞĚďǇWŽŵĞƌĐŝĂůŝǌĂĚŽƌĂ͘
/Es^dDEd^
/ŶǀĞƐƚŵĞŶƚƐ ŵĂĚĞ ŝŶ ϮϬϭϮ ďǇ W ŶĞƌŐŝĂƐ ĚŽ ƌĂƐŝů ŝŶ ĚŝƐƚƌŝďƵƚŝŽŶ ƚŽƚĂůĞĚ ZΨ ϯϭϴ͘Ϭ ŵŝůůŝŽŶ
ǁŝƚŚĂϭϯ͘ϱйƌĞĚƵĐƚŝŽŶĐŽŵƉĂƌĞĚƚŽϮϬϭϭ͘
KĨƚŚĞƚŽƚĂů͕ZΨϭϳϬ͘ϯŵŝůůŝŽŶ;ϱϯ͘ϱйͿǁĞƌĞƐĞƚĂƐŝĚĞĨŽƌƚŚĞĞǆƉĂŶƐŝŽŶŽĨůŝŶĞƐ͕ƐƵďƐƚĂƚŝŽŶƐĂŶĚ
ĚŝƐƚƌŝďƵƚŝŽŶŶĞƚǁŽƌŬƐĨŽƌĐŽŶŶĞĐƚŝŽŶŽĨŶĞǁĐƵƐƚŽŵĞƌƐĂŶĚŝŶƚŚĞŝŶƐƚĂůůĂƚŝŽŶŽĨŵĞĂƐƵƌĞŵĞŶƚ
ƐǇƐƚĞŵƐ͖ ZΨϳϵ͘Ϯ ŵŝůůŝŽŶ ;Ϯϰ͘ϵйͿ ǁĞƌĞ ĂůůŽĐĂƚĞĚ ƚŽ ƚŚĞ ŝŵƉƌŽǀĞŵĞŶƚ ŽĨ ƚŚĞ ŶĞƚǁŽƌŬ ĨŽƌ
ƌĞƉůĂĐĞŵĞŶƚ ŽĨ ĞƋƵŝƉŵĞŶƚ͕ ŽďƐŽůĞƚĞ ĂŶĚ ĚĞƉƌĞĐŝĂƚĞĚ ŵĞƚĞƌƐ͕ ƌĞĐŽŶĚƵĐƚŽƌŝŶŐŽĨ ŶĞƚǁŽƌŬƐ Ăƚ
ƚŚĞ ĞŶĚ ŽĨ ƚŚĞŝƌ ƵƐĞĨƵů ůŝǀĞƐ͖ ZΨ ϭϬ͘ϲ ŵŝůůŝŽŶ ;ϯ͘ϯйͿ ǁĞƌĞ ƐĞƚ ĂƐŝĚĞ ĨŽƌ ƵƌďĂŶ ĂŶĚ ƌƵƌĂů
ƵŶŝǀĞƌƐĂůŝǌĂƚŝŽŶ ĂŶĚ ĨŽƌ WƌŽŐƌĂŵĂ >Ƶǌ ƉĂƌĂ dŽĚŽƐ ;>ŝŐŚƚ ĨŽƌ ůů WƌŽŐƌĂŵͿ͕ ĨĂǀŽƌŝŶŐ ƚŚĞ
ĐŽŶŶĞĐƚŝŽŶ ĂŶĚ ƚŚĞ ĂĐĐĞƐƐ ŽĨ ĐŽŶƐƵŵĞƌƐ ƚŽ ƚŚĞ ƉŽǁĞƌ ƐĞƌǀŝĐĞƐ͖ ĂŶĚ ZΨ ϱϳ͘ϵ ŵŝůůŝŽŶ ;ϭϴ͘ϮйͿ
ǁĞƌĞ ŝŶǀĞƐƚĞĚ ŝŶ ƚĞůĞĐŽŵŵƵŶŝĐĂƚŝŽŶƐ͕ /d ĂŶĚ ŽƚŚĞƌ ĂĐƚŝǀŝƚŝĞƐ ƐƵĐŚ ĂƐ ŝŶĨƌĂƐƚƌƵĐƚƵƌĞ͕
ĐŽŵŵĞƌĐŝĂůƉƌŽũĞĐƚƐĂŶĚůŽƐƐƉƌĞǀĞŶƚŝŽŶ͘
ϵϬ
ϮϬϭϮDE'DEdZWKZd
WĂŶĚĞŝƌĂŶƚĞ
ϮϬϭϮ
ϮϬϭϭ
ǆƉĂŶƐŝŽŶŽĨƚŚĞůĞĐƚƌŝĐ^ǇƐƚĞŵϲϴ͕ϵϭϮ ϭϯϬ͕ϭϴϰ
EĞƚǁŽƌŬŝŵƉƌŽǀĞŵĞŶƚ
ϰϰ͕ϱϱϴ ϰϴ͕ϴϯϭ
hŶŝǀĞƌƐĂůŝǌĂƚŝŽŶ
ϭϬ͕ϲϯϬ ϰ͕ϰϮϭ
dĞůĞĐŽŵ͕/dĂŶĚKƚŚĞƌƐ
ϯϬ͕ϵϱϲ Ϯϲ͕ϲϴϲ
^ƵďdŽƚĂů;ϭͿ
ϭϱϱ͕Ϭϱϲ ϮϭϬ͕ϭϮϮ
ZĞǀĞŶƵĞƐĨƌŽŵĞǆĐĞĞĚŝŶŐ;ϮͿ ;ϰϮ͕ϴϰϱͿ Ͳ
;ͲͿ^ƉĞĐŝĂůŽďůŝŐĂƚŝŽŶƐ;ϯͿ
;ϭϭ͕ϭϲϳͿ ;Ϯϱ͕ϮϵϲͿ
EĞƚŝŶǀĞƐƚŵĞŶƚ
ϭϬϭ͕Ϭϰϯ ϭϴϰ͕ϴϮϲ
/ŶǀĞƐƚŵĞŶƚ;ZΨƚŚŽƵƐĂŶĚͿ
WƐĐĞůƐĂ
ϮϬϭϮ
ϮϬϭϭ
ϭϬϭ͕ϯϳϳ
ϵϲ͕ϲϱϬ
ϯϰ͕ϲϱϯ ϯϯ͕ϳϱϰ
Ͳ
Ͳ
Ϯϲ͕ϵϮϳ Ϯϳ͕ϯϬϭ
ϭϲϮ͕ϵϱϳ
ϭϱϳ͕ϳϬϱ
Ͳ
Ͳ
;Ϯϭ͕ϯϮϱͿ ;ϭϴ͕ϵϮϰͿ
ϭϰϭ͕ϲϯϯ
ϭϯϴ͕ϳϴϭ
dŽƚĂů
ϮϬϭϮ
ϮϬϭϭ
ϭϳϬ͕Ϯϴϵ ϮϮϲ͕ϴϯϰ
ϳϵ͕Ϯϭϭ ϴϮ͕ϱϴϱ
ϭϬ͕ϲϯϬ ϰ͕ϰϮϭ
ϱϳ͕ϴϴϯ ϱϯ͕ϵϴϳ
ϯϭϴ͕Ϭϭϯ ϯϲϳ͕ϴϮϳ
;ϰϮ͕ϴϰϱͿ Ͳ
;ϯϮ͕ϰϵϮͿ ;ϰϰ͕ϮϮϬͿ
ϮϰϮ͕ϲϳϲ ϯϮϯ͕ϲϬϳ
;ϭͿ^ƵďƚŽƚĂůс'ƌŽƐƐĂƉĞǆ͕ĐŽŶƐŝĚĞƌŝŶŐƚŚĞĐĂƉŝƚĂůŝŶǀĞƐƚĞĚŝŶƚŚĞŶĞƚǁŽƌŬнĂƉŝƚĂůŝǌĞĚŝŶƚĞƌĞƐƚ
;ϮͿ/ŵƉĂĐƚŽĨŶĞǁƌĞŐƵůĂƚŝŽŶƐŝŶƐƚŝƚƵƚĞĚǁŝƚŚƚŚĞƌĂƚĞƌĞǀŝĞǁƉƌŽĐĞĚƵƌĞƐƌĞůĂƚĞĚƚŽŝŶĐŽŵĞĨƌŽŵĨŝŶĞƐĨŽƌKǀĞƌƐƚĞƉƉŝŶŐĞŵĂŶĚĂŶĚĐŽŶƐƵŵƉƚŝŽŶŽĨǆĐĞƐƐZĞĂĐƚŝǀĞ
;ϯͿ&ŝŶĂŶĐŝĂůƉĂƌƚŝĐŝƉĂƚŝŽŶŽĨĐƵƐƚŽŵĞƌƐ͕ǁŚĞƚŚĞƌŝŶĚŝǀŝĚƵĂůƐ͕ůĞŐĂůĞŶƚŝƚŝĞƐ͕ĨĞĚĞƌĂůŐŽǀĞƌŶŵĞŶƚ͕ƐƚĂƚĞŽƌŵƵŶŝĐŝƉĂůŝƚŝĞƐ͕ŝŶƚŚĞŝŶǀĞƐƚŵĞŶƚƉƌŽũĞĐƚƐ͘
Yh>/dz
dŚĞ ƐĞƌǀŝĐĞ ƌĞŶĚĞƌŝŶŐ ƋƵĂůŝƚǇ ŝŶĚŝĐĂƚŽƌƐ ƌĞŵĂŝŶĞĚ ǁŝƚŚŝŶ ƚŚĞ ůŝŵŝƚƐ ŽĨ ƚŚĞ ƐƚĂŶĚĂƌĚƐ
ĞƐƚĂďůŝƐŚĞĚ ďǇ ƚŚĞ ƌĞŐƵůĂƚŽƌǇ ĂŐĞŶĐǇ͕ ƌĞĨůĞĐƚŝŶŐ ŝŶǀĞƐƚŵĞŶƚƐ ŝŶ ŶĞƚǁŽƌŬ ĞǆƉĂŶƐŝŽŶ ĂŶĚ
ŵŽĚĞƌŶŝǌĂƚŝŽŶ͕ƚŚĞŝŶƚĞŐƌĂƚŝŽŶĂŶĚĂƵƚŽŵĂƚŝŽŶŽĨŽƉĞƌĂƚŝŶŐĐĞŶƚĞƌƐ͘
ƚ W ĂŶĚĞŝƌĂŶƚĞ͕ ĞǀĞŶ ǁŝƚŚ ǁĞĂƚŚĞƌ ĞǀĞŶƚƐ ŐĞƚƚŝŶŐ ǁŽƌƐĞ ďǇ ƚŚĞ ĞŶĚ ŽĨ ƚŚĞ ǇĞĂƌ͕ ƚŚĞ
ĚŝƐƚƌŝďƵƚŽƌ ƌĞĂĐŚĞĚ ƉŽƐŝƚŝǀĞ ƌĞƐƵůƚƐ͕ ďǇ ĐŽŶƐŽůŝĚĂƚŝŶŐ ƉƌĞǀŝŽƵƐ ĐǇĐůĞ ƉƌĂĐƚŝĐĞƐ ĂŶĚ ŚĂǀŝŶŐ Ă
ŐƌĞĂƚĞƌ ƐǇŶĞƌŐǇ ďĞƚǁĞĞŶ ƚŚĞ ĂƌĞĂƐ ĂŶĚ Ă ƚŽƚĂů ĞĨĨŽƌƚ ĨƌŽŵ ƚŚĞ ĞŵƉůŽǇĞĞƐ͘ ^ĞƌǀŝĐĞ ƋƵĂůŝƚǇ
ŝŶĚŝĐĂƚŽƌƐ ƉƌĞƐĞŶƚĞĚ ĂŶ ŝŵƉƌŽǀĞŵĞŶƚ ŝŶ ƚŚĞ ǇĞĂƌ ŽĨ ϮϬϭϮ͕ ƌĞĂĐŚŝŶŐ ǀĂůƵĞƐ ƚŚĂƚ ĂƌĞ ůŽǁĞƌ ƚŽ
ƚŚĞůŝŵŝƚƐŐŝǀĞŶďǇE>͕ďŽƚŚĨŽƌĂŶĚ&͕ŶĂŵĞůǇϵ͘ϰϮĂŶĚϲ͘Ϭϯ͕ƌĞƐƉĞĐƚŝǀĞůǇ͘
ƚWƐĐĞůƐĂ͕ƐĞƌǀŝĐĞƋƵĂůŝƚǇƉĞƌĨŽƌŵĂŶĐĞŝŶĚŝĐĂƚŽƌƐƌĞŵĂŝŶĞĚǁŝƚŚŝŶƚŚĞƌĂǌŝůŝĂŶƐƚĂŶĚĂƌĚƐ
ŽĨ ŶĂƚŝŽŶĂů ĞǆĐĞůůĞŶĐĞ͘ dŚĂƚ ŝƐ ŵŽƐƚůǇ ĚƵĞ ƚŽ ƚŚĞ ŝŶǀĞƐƚŵĞŶƚƐ ŵĂĚĞ͕ ĂŶĚ ƚŽ ƚŚĞ ƉƌĞǀĞŶƚŝǀĞ
ŵĂŝŶƚĞŶĂŶĐĞĂĐƚŝŽŶƐƉĞƌĨŽƌŵĞĚŝŶƚŚĞĚŝƐƚƌŝďƵƚŝŽŶƐǇƐƚĞŵĂƐƐĞƚƐ͘WŽǁĞƌŝŶƚĞƌƌƵƉƚŝŽŶĚƵƌĂƚŝŽŶ
ĂŶĚŝŶƚĞƌƌƵƉƚŝŽŶĨƌĞƋƵĞŶĐǇŝŶĚŝĐĂƚŽƌƐǁĞƌĞĨƵůůǇŝŶĐŽŶĨŽƌŵŝƚǇǁŝƚŚƚŚĞƐƚĂŶĚĂƌĚƐĞƐƚĂďůŝƐŚĞĚ
ďǇƚŚĞE>͕ĂŶĚŝŶϮϬϭϮ͕ǁŝƚŚϵ͘ϴϴŚŽƵƌƐĂŶĚϲ͘ϯϳŝŶƚĞƌƌƵƉƚŝŽŶƐ͕ƌĞƐƉĞĐƚŝǀĞůǇ͘
Yh>/dz/E/dKZ^
;ŚŽƵƌƐͿ
ϮϬϭϮ
ϮϬϭϭ
dĂƌŐĞƚ
ŶĞĞů
;Ϳ
ϵ͘ϰϮ
ϵ͘ϰϯ
ϵ͘ϱϳ
ϲ͘Ϭϯ
ϲ͘ϭϳ
ϴ͘ϯϳ
WƐĐĞůƐĂ
ϵ͘ϴϴ
ϭϬ͘ϰϴ
ϭϬ͘ϳϴ
ϲ͘ϯϳ
ϲ͘ϯϴ
ϴ͘ϱϭ
ŝƐƚƌŝďƵƚŽƌ
&;ƚŝŵĞƐͿ
ϮϬϭϮ
ϮϬϭϭ
dĂƌŐĞƚ
ŶĞĞů
;&Ϳ
͗ƋƵŝǀĂůĞŶƚƵƌĂƚŝŽŶŽĨ/ŶƚĞƌƌƵƉƚŝŽŶďǇƵƐƚŽŵĞƌ͖
&͗ƋƵŝǀĂůĞŶƚ&ƌĞƋƵĞŶĐǇŽĨ/ŶƚĞƌƌƵƉƚŝŽŶďǇƵƐƚŽŵĞƌ͖
KDDZ/>>K^^^
EŽŶͲƚĞĐŚŶŝĐĂůůŽƐƐĞƐƌĞĐŽƌĚĞĚĂϬ͘ϬϮƉ͘Ɖ͘ĚĞĐƌĞĂƐĞŝŶWĂŶĚĞŝƌĂŶƚĞĂŶĚĂϬ͘ϱϴƉ͘Ɖ͘ŝŶĐƌĞĂƐĞ
ŝŶWƐĐĞůƐĂ͕ǁŚĞŶĐŽŵƉĂƌĞĚƚŽĞĐĞŵďĞƌϮϬϭϭ͘
ϵϭ
ϮϬϭϮDE'DEdZWKZd
ϭϰ͘Ϭ
ϭϯ͘ϳ
ϭϮ͘ϴ
ϭϭ͘ϭ
ϭϬ͘Ϯ
ϭϬ͘Ϯ
EŽŶͲƚĞĐŚŶŝĐĂů
ϱ͘ϲ
ϰ͘ϳ
ϰ͘ϳ
dĞĐŚŶŝĐĂů
ϱ͘ϱ
ϱ͘ϱ
ϱ͘ϱ
ϱ͘ϳ
ϴ͘ϯ
ϲ͘Ϭ
ϱ͘ϰ
ϳ͘ϳ
ϳ͘ϱ
ĂŶĚϮϬϭϬ ĂŶĚϮϬϭϭ ĂŶĚϮϬϭϮ ƐĐĞϮϬϭϬ ƐĐĞϮϬϭϭ ƐĐĞϮϬϭϮ
/ŶϮϬϭϮ͕ƚŚĞĚŝƐƚƌŝďƵƚŽƌƐŽĨWŶĞƌŐŝĂƐĚŽƌĂƐŝů͕WĂŶĚĞŝƌĂŶƚĞĂŶĚWƐĐĞůƐĂ͕ĚŝƐďƵƌƐĞĚ
ZΨ ϰϬ͘ϱ ŵŝůůŝŽŶ ŝŶ ƉƌŽŐƌĂŵƐ ƚŽ ĐƵƌď ůŽƐƐĞƐ͘ KĨ ƚŚĞ ƚŽƚĂů ƐƵŵ ŽĨ ƌĞƐŽƵƌĐĞƐ ĂůůŽĐĂƚĞĚ ƚŽ ƚŚĞƐĞ
ƉƌŽŐƌĂŵƐ͕ZΨϮϬ͘ϮŵŝůůŝŽŶǁĞƌĞĨŽƌŽƉĞƌĂƚŝŶŐŝŶǀĞƐƚŵĞŶƚƐ;ƌĞƉůĂĐĞŵĞŶƚŽĨŵĞƚĞƌƐ͕ŝŶƐƚĂůůĂƚŝŽŶ
ŽĨ ƐƉĞĐŝĂů ŶĞƚǁŽƌŬ͕ ƌĞŵŽƚĞ ŵĞƚĞƌŝŶŐ ĂŶĚ ĐŽƌƌĞĐƚŝŽŶŽĨ ĐůĂŶĚĞƐƚŝŶĞĐŽŶŶĞĐƚŝŽŶƐͿ ĂŶĚ ZΨ ϮϬ͘ϯ
ŵŝůůŝŽŶĨŽƌŵĂŶĂŐĞĂďůĞĞǆƉĞŶƐĞƐ;ŝŶƐƉĞĐƚŝŽŶƐĂŶĚƌĞŵŽǀĂůŽĨŝƌƌĞŐƵůĂƌĐŽŶŶĞĐƚŝŽŶƐͿ͘
ŽŵďĂƚŝŶŐŽĨŽŵŵĞƌĐŝĂů>ŽƐƐĞƐWƌŽŐƌĂŵ;ZΨDDͿ
ϮϬϭϮ
ϮϬϭϭ
ϮϬϭϬ
KƉĞƌĂƚŝŶŐŝŶǀĞƐƚŵĞŶƚƐ
ϮϬ͘Ϯ
ϭϮ͘Ϯ
ϯϴ͘ϳ
DĂŶĂŐĞĂďůĞĞǆƉĞŶƐĞƐ
ϮϬ͘ϯ
Ϯϰ͘Ϯ
Ϯϭ͘ϳ
dŽƚĂů
ϰϬ͘ϱ
ϯϲ͘ϱ
ϲϬ͘ϰ
/ŶϮϬϭϮ͕ŽƵƌĐŽŶĐĞƐƐŝŽŶĂŝƌĞƐĐĂƌƌŝĞĚŽƵƚĂƉƉƌŽǆŝŵĂƚĞůǇϮϭϵ͘ϴƚŚŽƵƐĂŶĚŝŶƐƉĞĐƚŝŽŶƐ͕ĂŶĚϭϯ͘ϰ
ƚŚŽƵƐĂŶĚ ĐůĂŶĚĞƐƚŝŶĞ ĐŽŶŶĞĐƚŝŽŶ ƌĞŐƵůĂƌŝǌĂƚŝŽŶƐ͕ ƌĞŵŽǀŝŶŐ ϭϮϬ͘ϳ ƚŚŽƵƐĂŶĚ ŝƌƌĞŐƵůĂƌ
ĐŽŶŶĞĐƚŝŽŶƐƚŚĂƚƌĞƐƵůƚĞĚŝŶƚŚĞƌĞĐŽǀĞƌǇŽĨƌĞǀĞŶƵĞŽĨĂďŽƵƚZΨϭϰ͘ϳŵŝůůŝŽŶ͘
dZ/E'
tŝƚŚŽƉĞƌĂƚŝŽŶƐ ŝŶ ĞǀĞƌǇ ƌĞŐŝŽŶŽĨƚŚĞĐŽƵŶƚƌǇ͕Wʹ ŽŵĞƌĐŝĂůŝǌĂĕĆŽĞ ^ĞƌǀŝĕŽƐ ĚĞ ŶĞƌŐŝĂ
^͘ŝƐƌĞƐƉŽŶƐŝďůĞĨŽƌƚŚĞĞŶĞƌŐǇƚƌĂĚŝŶŐĂĐƚŝǀŝƚŝĞƐĂŶĚƌĞŶĚĞƌŝŶŐŽĨƐĞƌǀŝĐĞƐƚŽƚŚĞĨƌĞĞŵĂƌŬĞƚ͕
ďŽƚŚ ŝŶƐŝĚĞ ĂŶĚ ŽƵƚƐŝĚĞ ŽĨ ƚŚĞ ĐŽŶĐĞƐƐŝŽŶ ĂƌĞĂƐ ŽĨ ƚŚĞ ƚǁŽ ĚŝƐƚƌŝďƵƚŽƌƐ ŽĨ W ŶĞƌŐŝĂƐ ĚŽ
ƌĂƐŝů͘dŚĞĐŽŵƉĂŶǇĞŶĚĞĚϮϬϭϮǁŝƚŚϮϭϬĐƵƐƚŽŵĞƌƐ͕ƵƉϱϯ͘ϯйŽǀĞƌƚŚĞƉƌŝŽƌǇĞĂƌ͘
/ŶϮϬϭϮ͕ƚŚĞĞŶĞƌŐǇƚƌĂĚĞĚĂŵŽƵŶƚĞĚƚŽϭϭ͕Ϯϱϰ'tŚ͕ĂŶŝŶĐƌĞĂƐĞŽĨϭϯ͘ϳйŽǀĞƌƚŚĞƉƌĞǀŝŽƵƐ
ǇĞĂƌ͕ŝŶǁŚŝĐŚϵ͕ϴϵϱ'tŚǁĞƌĞƐŽůĚ͘
ŐƌŽǁƚŚ ŝŶ ǀŽůƵŵĞ ǁĂƐ ĚƌŝǀĞŶ ďǇ ƚŚĞ ŝŶĐƌĞĂƐĞ ŝŶ ƐĂůĞƐ ĨŽƌ ĐƵƐƚŽŵĞƌƐ ŽƵƚ ŽĨ W ŐƌŽƵƉ͛Ɛ
ĐŽŶĐĞƐƐŝŽŶ ĂƌĞĂƐ͕ ƌĞƚĂŝŶŝŶŐ ĐƵƐƚŽŵĞƌƐ ŽĨ ƚŚĞ ƉŽƌƚĨŽůŝŽ͕ ƐƉĞĐŝĂůůǇ͕ ƚŚĞ ŽŶĞƐ ƉŽƚĞŶƚŝĂůůǇ ĨƌĞĞ ŝŶ
WŐƌŽƵƉ͛ƐĐŽŶĐĞƐƐŝŽŶĂƌĞĂƐ͕ŝŶĂĚĚŝƚŝŽŶƚŽƚŚĞƐĂůĞƐǀŽůƵŵĞƚŽŐĞŶĞƌĂƚŽƌƐĂŶĚĚŝƐƚƌŝďƵƚŽƌƐ͘
E>z^/^K&KEKD/ͬ&/EE/>WZ&KZDE
• ŽŶƐŽůŝĚĂƚĞĚƌĞǀĞŶƵĞ
/ŶϮϬϭϮ͕ŶĞƚŽƉĞƌĂƚŝŶŐŝŶĐŽŵĞƚŽƚĂůĞĚZΨϲ͕ϱϲϳ͘ϯŵŝůůŝŽŶ͕ĂŶŝŶĐƌĞĂƐĞŽĨϭϱ͘ϭйŝŶƌĞůĂƚŝŽŶƚŽ
ƚŚĞ ƉƌŝŽƌ ǇĞĂƌ͘ ǆĐůƵĚŝŶŐ ƚŚĞ ĐŽŶƐƚƌƵĐƚŝŽŶ ƌĞǀĞŶƵĞ͕ ŶĞƚ ŽƉĞƌĂƚŝŶŐ ƌĞǀĞŶƵĞ ǁĂƐ ZΨ ϲ͕ϯϯϭ͘ϱ
ŵŝůůŝŽŶ͕ ǁŚŝĐŚ ŝƐ ϭϳ͘Ϯй ŚŝŐŚĞƌ ƚŚĂŶ ƉƌĞǀŝŽƵƐ ǇĞĂƌ͘ dŚĞ ŵĂŝŶ ĚĞƚĞƌŵŝŶĂŶƚ ĐŽŶĚŝƚŝŽŶƐ ŽĨ ƚŚĞ
ŐƌŽǁƚŚŽĨŶĞƚƌĞǀĞŶƵĞǁĞƌĞ͗
ϵϮ
ϮϬϭϮDE'DEdZWKZd
ͻ/ŶŐĞŶĞƌĂƚŝŽŶ͗
dŚĞĐŽŶƐŽůŝĚĂƚĞĚŶĞƚƌĞǀĞŶƵĞŽĨŐĞŶĞƌĂƚŝŽŶƚŽƚĂůĞĚZΨϭ͕ϯϲϰ͘ϮŵŝůůŝŽŶ͕ĂŐƌŽǁƚŚŽĨϮϰ͘ϰйŝŶ
ϮϬϭϮ͘
/Ŷ >ĂũĞĂĚŽ ŶĞƌŐŝĂ͕ ƚŚĞƌĞ ǁĂƐ ƚŚĞ ŐƌĞĂƚĞƐƚ ĞŶĞƌŐǇ ƐĂůĞ ŝŶ Ă ^ŚŽƌƚ dĞƌŵ ŝŶ ƚŚĞ ĨŝƌƐƚ ϵͲŵŽŶƚŚ
ƉĞƌŝŽĚŽĨƚŚĞǇĞĂƌ͕ĂƌĞĨůĞǆŽĨƚŚĞƐĞĂƐŽŶĂůŝƚǇƐƚƌĂƚĞŐǇĂŶĚĨĂǀŽƌĂďůĞŚǇĚƌŽůŽŐŝĐĂůƐĐĞŶĂƌŝŽŝŶ
ƚŚĞƉĞƌŝŽĚ͘
dŚĞƌĞ ǁĂƐ ĂŶ ŝŶĐƌĞĂƐĞ ŝŶ ĞŶĞƌŐǇ ǀŽůƵŵĞ ƐŽůĚ Ăƚ ŶĞƌŐĞƐƚ ŽǁĞĚ ƚŽ ƚŚĞ ŝŶĐƌĞĂƐĞĚ WŚǇƐŝĐĂů
'ƵĂƌĂŶƚĞĞ ŽĨ h, DĂƐĐĂƌĞŶŚĂƐ ĂŶĚ ƚŚĞ ŝŶĐƌĞĂƐĞ ŐĞŶĞƌĂƚŽƌ ĐŽŶƚƌĂĐƚŝŶŐ ůĞǀĞů͘ dŚŝƐ ĞŶĞƌŐǇ
ŝŶĐƌĞĂƐĞǁĂƐƐŽůĚŝŶƐŚŽƌƚƚĞƌŵŽƉĞƌĂƚŝŽŶƐ͕ĨĂǀŽƌĞĚďǇƚŚĞŚŝŐŚƐƉŽƚƉƌŝĐĞ;W>Ϳ͘
ZĞŐĂƌĚŝŶŐ WĞĐĠŵ /dŚĞƌŵŽĞůĞĐƚƌŝĐ WŽǁĞƌ WůĂŶƚ͕ǁĞƐƚĂƌƚĞĚ ƚŚĞ ŶĞƌŐǇ dƌĂĚŝŶŐ ŐƌĞĞŵĞŶƚ ŝŶ
ƚŚĞZĞŐƵůĂƚĞĚDĂƌŬĞƚ;ZͿŽĨWĞĐĠŵ/dŚĞƌŵŽĞůĞĐƚƌŝĐWŽǁĞƌWůĂŶƚ͕ŽŶ:ƵůǇϮϯ͕ϮϬϭϮ͘'ŝǀĞŶ
ƚŚĞƉŽƐƚƉŽŶĞŵĞŶƚŽĨƚŚĞĐŽŵŵĞƌĐŝĂůŐĞŶĞƌĂƚŝŽŶƐƚĂƌƚ͕ƚŚĞWůĂŶƚŚĂĚƚŽĂĐƋƵŝƌĞĞŶĞƌŐǇĨƌŽŵ
ƚŚĞ &ƌĞĞ DĂƌŬĞƚ ƚŽ ŐƵĂƌĂŶƚĞĞ ƚŚĞ ĞŶĞƌŐǇ ƐƵƉƉůǇ ĂŐƌĞĞŵĞŶƚƐ ƵƉ ƚŽ ƚŚĞ ĚĂƚĞ ŽĨ ĐŽŵŵĞƌĐŝĂů
ƐƚĂƌƚͲƵƉ͘ dŚĞ ƌĞŐƵůĂƚŝŽŶ ŝŶ ĨŽƌĐĞ ƐĞƚ ĨŽƌƚŚ ƚŚĂƚ ƚŚŝƐ ĐŽƐƚ ƐŚŽƵůĚ ďĞ ƚƌĂŶƐĨĞƌƌĞĚ ƉƵƌƐƵĂŶƚ ƚŽ
E>͛Ɛ ZĞŐƵůĂƚŽƌǇ ZĞƐŽůƵƚŝŽŶ EŽ͘ ϭϲϱͬϮϬϬϱ͘ ,ŽǁĞǀĞƌ͕ WĞĐĠŵ / dŚĞƌŵŽĞůĞĐƚƌŝĐ WŽǁĞƌWůĂŶƚ
ƌĞƋƵĞƐƚĞĚE>ƚŚĂƚƌƚŝĐůĞϯŽĨZĞŐƵůĂƚŽƌǇZĞƐŽůƵƚŝŽŶEŽ͘ϭϲϱͬϬϱƐŚŽƵůĚďĞĨƵůůǇǁŝƚŚĚƌĂǁŶ͕
ĐŚĂŶŐŝŶŐ ƚŚĞ ĐƌŝƚĞƌŝĂ ŽĨ ƚŚĞ ŵŽŶƚŚůǇ ƚƌĂŶƐĨĞƌ ŽĨ ĞŶĞƌŐǇ ĂĐƋƵŝƐŝƚŝŽŶ ĐŽƐƚ͘ dŚŝƐ ƌĞƋƵĞƐƚ ŝƐ Ɛƚŝůů
ƵŶĚĞƌ E> ŽĂƌĚ͛Ɛ ƌĞǀŝĞǁ͘ ,ŽǁĞǀĞƌ͕ ŐŝǀĞŶ ƉƌĞĐĞĚĞŶƚ ĚĂƚĂ͕ ĨŽƌ ƚŚĞ ĐĂůĐƵůĂƚŝŽŶ ŽĨ ƚŚĞ
ƌĞǀĞŶƵĞŽĨWĞĐĠŵ/dŚĞƌŵŽĞůĞĐƚƌŝĐWŽǁĞƌWůĂŶƚ͕ƚŚĞƚƌĂŶƐĨĞƌŽĨƚŚĞĂƵĐƚŝŽŶďǇƚŚĞ/;ĐŽƐƚͲ
ďĞŶĞĨŝƚ ŝŶĚĞǆͿ ǁĂƐ ĐŽŶƐŝĚĞƌĞĚ͕ ŝŶ ǁŚŝĐŚ ĞŶĞƌŐǇ ǁĂƐ ƐŽůĚ ;ƵĐƚŝŽŶ Ͳϱ ŽĨ ϮϬϬϳͿ͕ ĂĚũƵƐƚĞĚ ďǇ
/W͘ ĚĚŝƚŝŽŶĂůůǇ͕ŽŶĞĐĞŵďĞƌϭ͕ϮϬϭϮ͕ƚŚĞhŶŝƚ/ƐƚĂƌƚĞĚŝƚƐĐŽŵŵĞƌĐŝĂůŽƉĞƌĂƚŝŽŶ͕ĂŶĚŝƚŝƐ
ƌĞŵƵŶĞƌĂƚĞĚƉƵƌƐƵĂŶƚƚŽŶĞƌŐǇdƌĂĚŝŶŐŐƌĞĞŵĞŶƚŝŶƚŚĞZĞŐƵůĂƚĞĚDĂƌŬĞƚ;ZͿĨŽƌƚŚŝƐ
ƵŶŝƚ͘
ͻ/ŶĚŝƐƚƌŝďƵƚŝŽŶ͗
dŚĞĐŽŶƐŽůŝĚĂƚĞĚŶĞƚƌĞǀĞŶƵĞŽĨWĂŶĚĞŝƌĂŶƚĞĂŶĚWƐĐĞůƐĂƚŽƚĂůĞĚZΨϰ͕ϰϲϭ͘ϴŵŝůůŝŽŶ͕Ă
ŐƌŽǁƚŚŽĨϱ͘ϰйŝŶϮϬϭϮ͘EŽƚŝŶĐůƵĚŝŶŐƚŚĞĐŽŶƐƚƌƵĐƚŝŽŶƌĞǀĞŶƵĞ͕ƚŚĞŶĞƚŽƉĞƌĂƚŝŶŐŝŶĐŽŵĞǁĂƐ
ZΨϰ͕ϮϮϴ͘ϬŵŝůůŝŽŶ͕ϳ͘ϲйŐƌĞĂƚĞƌƚŚĂŶƚŚĞƉƌŝŽƌǇĞĂƌ͘
/ŶĐƌĞĂƐĞŽĨϮ͘ϵйŝŶƚŚĞǀŽůƵŵĞŽĨƉŽǁĞƌƐŽůĚƚŽĞŶĚĐŽŶƐƵŵĞƌƐ͕ĚƌŝǀĞŶŵĂŝŶůǇďǇƚŚĞŝŶĐƌĞĂƐĞ
ŝŶƌĞƐŝĚĞŶƚŝĂůĂŶĚĐŽŵŵĞƌĐŝĂůĂŶĚƌƵƌĂůĐůĂƐƐĐŽŶƐƵŵƉƚŝŽŶ͘
ϭ͘ϮйĚĞĐƌĞĂƐĞŝŶĞŶĞƌŐǇǀŽůƵŵĞƐŽůĚƚŽĨƌĞĞĐƵƐƚŽŵĞƌƐŝŶϮϬϭϮ͕ĐŽŵƉĂƌĞĚƚŽϮϬϭϭ͕ŵĂŝŶůǇ
ĚƵĞƚŽƚŚĞŝŶĚƵƐƚƌŝĂůƉƌŽĚƵĐƚŝŽŶƐůŽǁĚŽǁŶ͘
/ŵƉĂĐƚŽĨŶĞǁƌĞŐƵůĂƚŝŽŶƐŝŶƐƚŝƚƵƚĞĚǁŝƚŚƚŚĞƌĂƚĞƌĞǀŝĞǁƉƌŽĐĞĚƵƌĞƐƌĞůĂƚĞĚƚŽŝŶĐŽŵĞĨƌŽŵ
ĨŝŶĞƐ ĨŽƌ KǀĞƌƐƚĞƉƉŝŶŐ ĞŵĂŶĚ ĂŶĚ ĐŽŶƐƵŵƉƚŝŽŶ ŽĨ ǆĐĞƐƐ ZĞĂĐƚŝǀĞ ŶĞƌŐǇ ;WZKZd Ϯ͘ϳͿ
ǁŚŝĐŚ ĂƌĞ ŶŽǁ ĂĐĐŽƵŶƚĞĚ ĨŽƌ ĂƐ ^ƉĞĐŝĂů KŶŐŽŝŶŐ KďůŝŐĂƚŝŽŶƐ͕ ďĞŐŝŶŶŝŶŐ ŽŶ ƚŚĞ ƌĂƚĞ ƌĞǀŝĞǁ
ĐŽŶƚƌĂĐƚ ĚĂƚĞ ŽĨƚŚĞϯƌĚ ZĞǀŝĞǁ ǇĐůĞ͘ dŚĞƌĞĨŽƌĞ͕W ĂŶĚĞŝƌĂŶƚĞŵĂĚĞ Ă ƉƌŽǀŝƐŝŽŶ ĨŽƌ ƚŚĞ
ĂŵŽƵŶƚ ŽĨ ZΨ ϱϬ͘ϭ ŵŝůůŝŽŶ ƌĞůĂƚĞĚ ƚŽ ƚŚĞ KĐƚŽďĞƌ Ϯϯ͕ ϮϬϭϭ ƚŽ ĞĐĞŵďĞƌ ϯϭ͕ ϮϬϭϮ ƉĞƌŝŽĚ
ƌĞĚƵĐŝŶŐ KƉĞƌĂƚŝŶŐ /ŶĐŽŵĞ͘ ƚ ƚŚĞ ďĞŐŝŶŶŝŶŐŽĨƚŚĞϰƚŚZĂƚĞ ZĞǀŝĞǁ ǇĐůĞ͕ ƚŚĞ ĂĐĐƵŵƵůĂƚĞĚ
ǀĂůƵĞ ŝŶ ƚŚŝƐ ƐƵďĂĐĐŽƵŶƚ ǁŝůů ďĞ ƐƵďũĞĐƚ ƚŽ ƚŚĞ ƵƐƵĂů ĚĞƉƌĞĐŝĂƚŝŽŶ ŽĨ ĂƐƐĞƚƐ ĂůůŽĐĂƚĞĚ ĂƐ
ŝŶǀĞƐƚŵĞŶƚƐĂƌŝƐŝŶŐĨƌŽŵƚŚĞƐĞ^ƉĞĐŝĂůKďůŝŐĂƚŝŽŶƐ͘
ϵϯ
ϮϬϭϮDE'DEdZWKZd
ŶŶƵĂůĂǀĞƌĂŐĞƌĂƚĞƌĞĂĚũƵƐƚŵĞŶƚĂƚWƐĐĞůƐĂŽĨϭϰ͘ϮϵйďĞŐŝŶŶŝŶŐƵŐƵƐƚϬϳ͕ϮϬϭϮĂŶĚĂŶ
ĂǀĞƌĂŐĞ ŝŶĐƌĞĂƐĞ ƚŽ ĐĂƉƚŝǀĞ ĐŽŶƐƵŵĞƌƐ ŽĨ ϭϭ͘ϯϯй͕ ƚĂŬŝŶŐ ŝŶƚŽ ĂĐĐŽƵŶƚ ĨŝŶĂŶĐŝĂů ĂĚũƵƐƚŵĞŶƚƐ
ƌĞůĂƚĞĚƚŽƉƌŝŽƌƉĞƌŝŽĚƐ͘
dĂƌŝĨĨ ƌĞǀŝĞǁ ĂŶĚ ƌĞĂĚũƵƐƚŵĞŶƚ Ăƚ W ĂŶĚĞŝƌĂŶƚĞŽĨ Ͳϭ͘ϴϱй ĂŶĚϭϭ͘ϰϱй͕ ƌĞƐƉĞĐƚŝǀĞůǇ͘ dŚĞ
ĂǀĞƌĂŐĞĞĨĨĞĐƚƚŽďĞƉĞƌĐĞŝǀĞĚďǇĐĂƉƚŝǀĞĐŽŶƐƵŵĞƌƐ͕ĂůƌĞĂĚǇĐŽŶƐŝĚĞƌŝŶŐƚŚĞƚĂƌŝĨĨƌĞǀŝĞǁŽĨ
ϮϬϭϭĂŶĚƚŚĞƚĂƌŝĨĨĂĚũƵƐƚŵĞŶƚŽĨϮϬϭϮǁĂƐϳ͘Ϯϵй͕ĂƉƉůŝĞĚĂƐĨƌŽŵKĐƚŽďĞƌϮϯ͕ϮϬϭϮ͘
/ŶĂĚĚŝƚŝŽŶ͕ĚƵĞƚŽƚŚĞĚĞůĂǇŝŶƚŚĞĐŽŵƉůĞƚŝŽŶŽĨƚŚĞŵĞƚŚŽĚŽĨƚŚĞϯƌĚƚĂƌŝĨĨƌĞǀŝƐŝŽŶĐǇĐůĞ͕
E> ŵĂĚĞ W ĂŶĚĞŝƌĂŶƚĞ͛Ɛ ƚĂƌŝĨĨƐ ƌĞŵĂŝŶ ƚŚĞ ƐĂŵĞ͕ ǁŚŝĐŚ ǁĞƌĞ ĂƉƉƌŽǀĞĚ ŝŶ KĐƚŽďĞƌ
ϮϬϭϬ͕ƵƉƚŽKĐƚŽďĞƌϮϯ͕ϮϬϭϮ͘
ͻ/ŶƚƌĂĚŝŶŐ͗
ͲdŚĞŶĞƚŝŶĐŽŵĞĂƚWŽŵĞƌĐŝĂůŝǌĂĚŽƌĂƚŽƚĂůĞĚZΨϭ͕ϯϱϰ͘ϲŵŝůůŝŽŶŝŶϮϬϭϮ͕ǁŝƚŚĂŶŝŶĐƌĞĂƐĞ
ŽĨ ϰϳ͘Ϭй ŝŶ ƌĞůĂƚŝŽŶ ƚŽ ϮϬϭϭ͕ ŽǁĞĚ ŵĂŝŶůǇ ƚŽ ĂŶ ŝŶĐƌĞĂƐĞ ŽĨ ϭϯ͘ϳй ŝŶ ǀŽůƵŵĞ ƐŽůĚ ƌĞƐƵůƚŝŶŐ
ĨƌŽŵƚŚĞŝŶƚĞŶƐŝĨŝĐĂƚŝŽŶŽĨƐŚŽƌƚĂŶĚůŽŶŐƚĞƌŵŶĞŐŽƚŝĂƚŝŽŶƐĂŶĚƐĂůĞƐŽĨƚŚĞϭϯƌĚĚũƵƐƚŵĞŶƚ
ƵĐƚŝŽŶ͕ďĞƐŝĚĞƐƚŚĞŝŶĐƌĞĂƐĞŽĨϯϲйŝŶƚŚĞĂǀĞƌĂŐĞƉƌŝĐĞŽĨƐĂůĞŝŶƌĞůĂƚŝŽŶƚŽϮϬϭϭ͘
• ŽŶƐŽůŝĚĂƚĞĚKƉĞƌĂƚŝŶŐǆƉĞŶƐĞƐ
KƉĞƌĂƚŝŶŐĞǆƉĞŶƐĞƐ͕ŶŽƚĐŽŶƐŝĚĞƌŝŶŐƚŚĞĐŽŶƐƚƌƵĐƚŝŽŶĐŽƐƚ͕ƚŽƚĂůĞĚZΨϱ͕ϯϱϴ͘ϱŵŝůůŝŽŶŝŶϮϬϭϮ͕
ǁŚŝĐŚƌĞƉƌĞƐĞŶƚƐĂŶŝŶĐƌĞĂƐĞŽĨϮϳ͘ϯйŽǀĞƌϮϬϭϭ͘
EŽŶͲŵĂŶĂŐĞĂďůĞ ĞǆƉĞŶƐĞƐ ĂƌĞ ƌĞůĂƚĞĚ ŵĂŝŶůǇ ƚŽ ƚŚĞ ƉƵƌĐŚĂƐĞ ŽĨ ĞŶĞƌŐǇ͕ ĐŚĂƌŐĞƐ ĨŽƌ ƵƐĞ ŽĨ
ƚŚĞ ƉŽǁĞƌ ŶĞƚǁŽƌŬ ĂŶĚ ƚŚĞ ŝŶƐƉĞĐƚŝŽŶ ĨĞĞ ŽĨ E> ĂŶĚ ƚŽƚĂůĞĚ ZΨ ϰ͕Ϯϵϱ͘ϴ ŵŝůůŝŽŶ ŝŶ ϮϬϭϮ͕
ϰϯ͘ϭйĂďŽǀĞƚŚĞƉƌĞǀŝŽƵƐǇĞĂƌ͘
dŚĞĂŵŽƵŶƚŽĨƚŚĞƉŽǁĞƌƉƵƌĐŚĂƐĞĚĨŽƌƌĞƐĂůĞĂŵŽƵŶƚĞĚƚŽZΨϯ͕ϰϵϵ͘ϱŵŝůůŝŽŶ͕ϱϮ͘ϬйĂďŽǀĞ
ƚŚĞǇĞĂƌϮϬϭϭĚƵĞƚŽ͗
;ŝͿƐƚĂƌƚͲƵƉŽĨĞŶĞƌŐǇƐƵƉƉůǇĨƌŽŵƚǁŽŶĞǁƉƌŽĚƵĐƚƐŝŶϮϬϭϮĂĐƋƵŝƌĞĚĂƚŶĞǁĞŶĞƌŐǇĂƵĐƚŝŽŶƐ
ƌĞƋƵŝƌĞĚƚŽŵĞĞƚŵĂƌŬĞƚŐƌŽǁƚŚ͘
;ŝŝͿŝŶĐƌĞĂƐĞŝŶƚŚĞĂǀĞƌĂŐĞƉƌŝĐĞŽĨƉƵƌĐŚĂƐĞŽĨĞŶĞƌŐǇ͕ĂĚũƵƐƚĞĚďǇƚŚĞǀĂƌŝĂƚŝŽŶŽĨƚŚĞ/W
;ŵƉůŝĨŝĞĚŽŶƐƵŵĞƌWƌŝĐĞ/ŶĚĞǆͿ͘
;ŝŝŝͿŝŶĐƌĞĂƐĞŝŶƚŚĞǀĂůƵĞŽĨĞŶĞƌŐǇƉƵƌĐŚĂƐĞĚĨƌŽŵ/d/WhŝŶϮϬϭϮ͕ŽǁĞĚƚŽĂŶŝŶĐƌĞĂƐĞŽĨƚŚĞ
ŽůůĂƌĂƚƚŚĞƉĞƌŝŽĚ͖
;ŝǀͿ WƵƌĐŚĂƐĞ ŽĨ ĞŶĞƌŐǇ ƚŽ ƌĞĐŽǀĞƌ ŐƵĂƌĂŶƚĞĞ͕ ĚƵĞ ƚŽ ĚĞůĂǇ ŝŶ ƚŚĞ ƐƚĂƌƚͲƵƉ ŽĨ WĞĐĠŵ /
dŚĞƌŵŽĞůĞĐƚƌŝĐWŽǁĞƌWůĂŶƚ͘
;ǀͿ ^ƉŽƚ ƉƌŝĐĞ ;W>Ϳ ƌĞŵĂŝŶĞĚ ŝŶ Ă ŚŝŐŚ ůĞǀĞů͕ ƌĞĂĐŚŝŶŐ ĂŶ ĂǀĞƌĂŐĞ ƉƌŝĐĞ ŽĨ ZΨ ϭϲϲ͘ϲϵͬDtŚ
ĚƵƌŝŶŐ ϮϬϭϮ͕ ĐŽŵƉĂƌĞĚ ƚŽ ƚŚĞ ĂǀĞƌĂŐĞ ƉƌŝĐĞŽĨ ZΨϮϵ͘ϰϮͬDtŚ ŝŶ ϮϬϭϭ͕ ƌĞƐƵůƚŝŶŐ ŝŶ Ă ŚŝŐŚĞƌ
ĚŝƐƉĂƚĐŚ ŽĨ ƚŚĞƌŵŽĞůĞĐƚƌŝĐ ƉŽǁĞƌ ƉůĂŶƚƐ ŝŶ ƚŚĞ ƉĞƌŝŽĚ͘ W> ŝƐ ĨŽƌŵĞĚ ďǇ Ă ƐƚĂƚŝƐƚŝĐ ŵŽĚĞů
ĚĞĨŝŶĞĚďǇKE^ĂŝŵŝŶŐƚŽŽƉƚŝŵŝǌĞƚŚĞĞǆƉůŽƌĂƚŝŽŶŽĨƉůĂŶƚƐŝŶƌĂǌŝů͕ŝŶĨůƵĞŶĐĞĚďǇƚŚĞǁĂƚĞƌ
ƌĞƐĞƌǀŽŝƌƐůĞǀĞůŝŶƚŚĞĐŽƵŶƚƌǇĂŶĚƚŚĞƐŚŽƌƚƚĞƌŵŚǇĚƌŽůŽŐŝĐĞǆƉĞĐƚĂƚŝŽŶ͘tŚĞŶW>ƌĞĂĐŚĞƐ
ĂŶ ĂŵŽƵŶƚ ŚŝŐŚĞƌ ƚŚĂŶ ƚŚĞ ǀĂƌŝĂďůĞ ĐŽƐƚ ŽĨ ƚŚĞƌŵŽĞůĞĐƚƌŝĐ ŐĞŶĞƌĂƚŝŽŶ͕ ƚŚĞƌŵŽĞůĞĐƚƌŝĐ ƉůĂŶƚƐ
ĂƌĞĚŝƐƉĂƚĐŚĞĚǁŝƚŚƚŚĞƉƵƌƉŽƐĞƐŽĨŬĞĞƉŝŶŐƚŚĞƐǇƐƚĞŵďĂůĂŶĐĞ͘
/Ŷ ϮϬϭϮ͕ ƚŚĞ ĂĐĐŽƵŶƚ ƵƐĞ ĂŶĚ ĐŽŶŶĞĐƚŝŽŶ ĐŚĂƌŐĞƐ ƌĞĐŽƌĚĞĚ Ă ďĂůĂŶĐĞ ŽĨ ZΨ ϳϯϳ͘Ϯ ŵŝůůŝŽŶ͕
ϭϯ͘Ϯй ŚŝŐŚĞƌƚŚĂŶ ƚŚĞŽŶĞ ƌĞĐŽƌĚĞĚ ŝŶϮϬϭϭ ĚƵĞ ƚŽ ƌĞǀŝƐŝŽŶŽĨ ƚĂƌŝĨĨƐ ĐŚĂƌŐĞĚ ĨŽƌƚŚĞ ƵƐĞ ŽĨ
ƚƌĂŶƐŵŝƐƐŝŽŶ ƐǇƐƚĞŵ ĂŶĚ ĂůƐŽ ƚŽ ƚŚĞ ŝŶĐƌĞĂƐĞ ŝŶ ĚŝƐƚƌŝďƵƚŽƌƐ͕ ĂƐ Ă ƌĞƐƵůƚ ŽĨ ƌĞƐĞƌǀĞ ĞŶĞƌŐǇ
ĐŚĂƌŐĞƐŝŶǀŝĞǁŽĨƚŚĞĞŶĞƌŐǇƐƵƉƉůǇĨƌŽŵǁŝŶĚƌĞƐŽƵƌĐĞƐ͕ŽďũĞĐƚŽĨƚŚĞϮŶĚZĞƐĞƌǀĞŶĞƌŐǇ
ƵĐƚŝŽŶ͕ďĞŐŝŶŶŝŶŐŝƚƐƐƵƉƉůǇŝŶ:ƵůǇϮϬϭϮ͘
ϵϰ
ϮϬϭϮDE'DEdZWKZd
dŚĞϰ͘ϰйǀĂƌŝĂƚŝŽŶŝŶƚŚĞŝŶƐƉĞĐƚŝŽŶĨĞĞŝƐĂƌĞƐƵůƚŽĨƚŚĞĂĚũƵƐƚŵĞŶƚƚŽƚŚĞĂŵŽƵŶƚĐŚĂƌŐĞĚďǇ
ƚŚĞƌĞŐƵůĂƚŽƌǇĂŐĞŶĐǇ͘
dŚĞ ĨŝŶĂŶĐŝĂů ŽĨĨƐĞƚƚŝŶŐ ŝŶĐƌĞĂƐĞĚ ϭϮ͘Ϭй ŽǁĞĚ ƚŽ ŐƌŽǁƚŚ ŝŶ ŐĞŶĞƌĂƚŝŽŶ ƚŚĂƚ ŽĐĐƵƌƌĞĚ ŝŶ ƚŚŝƐ
ƉĞƌŝŽĚ͕ ƚŚĞ ĐĂůĐƵůĂƚŝŽŶ ďĂƐĞ ĨŽƌ ƚŚŝƐ ĐŚĂƌŐĞ ĂƐ ǁĞůů ĂƐ ƚŚĞ ŝŶĐƌĞĂƐĞĚ ĂŶŶƵĂů ƌĂƚĞ ƵƐĞĚ ƚŽ
ĐĂůĐƵůĂƚĞƚŚĞǀĂůƵĞ͘
ZĂǁ ŵĂƚĞƌŝĂů ĐŽƐƚƐ͕ ǁŚŝĐŚ ĂƌĞ ŝƚĞŵƐ ƌĞůĂƚĞĚ ƚŽ ŝŶƉƵƚƐ ĨŽƌ ƚŚĞƌŵŽĞůĞĐƚƌŝĐ ĞŶĞƌŐǇ ŐĞŶĞƌĂƚŝŽŶ
;ĐŽĂůĂŶĚĚŝĞƐĞůͿ͕ƌĞĐŽƌĚĞĚĂŶĞĨĨĞĐƚŽĨZΨϱ͘ϱŵŝůůŝŽŶĚƵĞƚŽƚŚĞƐƚĂƌƚͲƵƉŽĨƚŚĞĨŝƌƐƚŐĞŶĞƌĂƚŽƌ
ƵŶŝƚŽĨWĞĐĠŵ/dŚĞƌŵŽĞůĞĐƚƌŝĐWŽǁĞƌWůĂŶƚ͘
ĐĐƵŵƵůĂƚĞĚŵĂŶĂŐĞĂďůĞĞǆƉĞŶƐĞƐŝŶϮϬϭϮ͕ĞǆĐůƵĚŝŶŐĚĞƉƌĞĐŝĂƚŝŽŶĂŶĚĂŵŽƌƚŝǌĂƚŝŽŶ͕ƚŽƚĂůĞĚ
ZΨϳϮϮ͘ϯŵŝůůŝŽŶŝŶϮϬϭϮ͕ĂĚĞĐƌĞĂƐĞŽĨϭϲ͘ϭйŝŶƌĞůĂƚŝŽŶƚŽZΨϴϲϭ͘ϮŵŝůůŝŽŶŝŶϮϬϭϭ͘
DĂŶĂŐĞĂďůĞĞǆƉĞŶƐĞƐ
WĞƌƐŽŶŶĞů
DĂƚĞƌŝĂů
dŚŝƌĚͲƉĂƌƚǇƐĞƌǀŝĐĞƐ
WƌŽǀŝƐŝŽŶƐ
ůůŽǁĂŶĐĞĨŽƌĚŽƵďƚĨƵůĂĐĐŽƵŶƚƐͬŶĞƚůŽƐƐĞƐ
WƌŽǀŝƐŝŽŶƐĨŽƌĐŽŶƚŝŶŐĞŶĐŝĞƐ
KƚŚĞƌ
dŽƚĂůWD^K
/ŶĨƌĂƐƚƌƵĐƚƵƌĞĐŽŶƐƚƌƵĐƚŝŽŶĐŽƐƚƐ
ĞƉƌĞĐŝĂƚŝŽŶĂŶĚĂŵŽƌƚŝǌĂƚŝŽŶ
dŽƚĂůŵĂŶĂŐĞĂďůĞĞǆƉĞŶƐĞƐ
'ĞŶĞƌĂůDĂƌŬĞƚWƌŝĐĞ/ŶĚĞǆ;/'WͲDͿͲ>ĂƐƚϭϮŵŽŶƚŚƐΎ
/W;ŵƉůŝĨŝĞĚŽŶƐƵŵĞƌWƌŝĐĞ/ŶĚĞǆͿͲ>ĂƐƚϭϮŵŽŶƚŚƐΎΎ
Ύ^ŽƵƌĐĞ͗&'s
ΎΎ^ŽƵƌĐĞ͗/'
ϮϬϭϮ
;ϯϮϮ͕ϮϯϲͿ
;Ϯϴ͕ϳϭϱͿ
;ϯϲϬ͕ϴϰϴͿ
;ϯϳ͕ϰϳϲͿ
;ϵ͕ϲϰϬͿ
;Ϯϳ͕ϴϯϲͿ
Ϯϲ͕ϵϴϭ
;ϳϮϮ͕ϮϵϰͿ
;Ϯϯϱ͕ϳϯϲͿ
;ϯϰϬ͕ϰϭϳͿ
;ϭ͕Ϯϵϴ͕ϰϰϳͿ
ϮϬϭϭ
;Ϯϴϳ͕ϲϭϴͿ
;Ϯϲ͕ϱϲϲͿ
;ϯϰϲ͕ϱϳϬͿ
;ϴϮ͕ϴϭϲͿ
;ϯϳ͕ϮϱϲͿ
;ϰϱ͕ϱϲϬͿ
;ϭϭϳ͕ϲϮϯͿ
;ϴϲϭ͕ϭϵϯͿ
;ϯϬϯ͕ϳϰϳͿ
;ϯϰϱ͕ϱϴϵͿ
;ϭ͕ϱϭϬ͕ϱϮϵͿ
sĂƌ͘
ϭϮ͘Ϭй
ϴ͘ϭй
ϰ͘ϭй
Ͳϱϰ͘ϳй
Ͳϳϰ͘ϭй
Ͳϯϴ͘ϵй
Ŷ͘Ă͘
Ͳϭϲ͘ϭй
ͲϮϮ͘ϰй
Ͳϭ͘ϱй
Ͳϭϰ͘Ϭй
ϳ͘ϴй
ϱ͘ϴй
/ŶƚŚĞĂĐĐŽƵŶƚŽĨƉĞƌƐŽŶŶĞůĞǆƉĞŶƐĞƐ͕ƚŚĞŝŶĐƌĞĂƐĞŽĨZΨϯϰ͘ϲŵŝůůŝŽŶ;нϭϮ͘ϬйͿƌĞƐƵůƚƐŵĂŝŶůǇ
ĨƌŽŵƚŚĞĐŽŵďŝŶĂƚŝŽŶŽĨƚŚĞĨŽůůŽǁŝŶŐĞĨĨĞĐƚƐ͗
(i)
ǀĞƌĂŐĞ ƐĂůĂƌǇ ƌĞĂĚũƵƐƚŵĞŶƚ ŽĨ ϲ͘ϳй ŝŶ ĐŽŵƉůŝĂŶĐĞ ǁŝƚŚ ƚŚĞ ĐŽůůĞĐƚŝǀĞ ďĂƌŐĂŝŶŝŶŐ
ĂŐƌĞĞŵĞŶƚƌĞƐƵůƚŝŶŐŝŶĂĚĚŝƚŝŽŶĂůĐŚĂƌŐĞƐŽŶƚŚĞƉĂǇƌŽůůŝŶĂĚĚŝƚŝŽŶƚŽƚŚĞŝŶĐƌĞĂƐĞĚĞŵƉůŽǇĞĞ
ƌŽƐƚĞƌŽĨƚŚĞ'ƌŽƵƉ;нϭϰϵǁŽƌŬĞƌƐͿ͕ŵĂŝŶůǇŽǁĞĚƚŽƵƉŐƌĂĚŝŶŐĞŵƉůŽǇĞĞƐŝŶƚŚĞĐŽŵŵĞƌĐŝĂů
;ϱϭǁŽƌŬĞƌƐͿĂŶĚƚĞĐŚŶŝĐĂůĂƌĞĂƐĂƚƚŚĞWĂŶĚĞŝƌĂŶƚĞ;нZΨϮϬ͘ϬŵŝůůŝŽŶͿ͖
(ii)
ŶŽŶͲƌĞĐƵƌƌŝŶŐ ĞĨĨĞĐƚ ŽĨ ŽƌŐĂŶŝǌĂƚŝŽŶ ƌĞƐƚƌƵĐƚƵƌŝŶŐ ŽĨ ŝƐƚƌŝďƵƚŝŽŶ ƵƐŝŶĞƐƐ hŶŝƚ Ͳ
ĚŝƐĐŽŶŶĞĐƚŝŽŶƐŝŶϭYϭϮ;нZΨϭϭ͘ϯŵŝůůŝŽŶ͕ŽĨǁŚŝĐŚнZΨϱ͘ϭŵŝůůŝŽŶŝŶWĂŶĚĞŝƌĂŶƚĞĂŶĚZΨ
ϲ͘ϮŵŝůůŝŽŶŝŶWƐĐĞůƐĂͿ͖
(iii)
/ŶĐƌĞĂƐĞĞǆƉĞŶƐĞƐŝŶƌĞůĂƚŝŽŶƚŽďĞŶĞĨŝƚƐ;ĨŽŽĚ͕ŵĞĂůĂŶĚƉŚĂƌŵĂĐǇǀŽƵĐŚĞƌƐͿŽǁĞĚƚŽ
ƚŚĞ ĂƉƉůŝĐĂƚŝŽŶŽĨ ƚŚĞ ƌĞĂĚũƵƐƚŵĞŶƚ ŝŶĚĞǆ ĂŶĚ ŐƌĞĂƚĞƌ ŶƵŵďĞƌŽĨ ǁŽƌŬĞƌƐ ŝŶ ƚŚĞ 'ƌŽƵƉ;нZΨ
ϰ͘ϵŵŝůůŝŽŶͿ͖
(iv) 'ƌĞĂƚĞƌ ĞǆƉĞŶƐĞƐ ĨŽƌ ŚĞĂůƚŚ ŝŶƐƵƌĂŶĐĞ ŽǁĞĚ ƚŽ ƚŚĞ ŝŶĐƌĞĂƐĞĚ ŶƵŵďĞƌ ŽĨ ĞŵƉůŽǇĞĞƐ͕
ĐŽŶƚƌĂĐƚƵĂů ƌĞĂĚũƵƐƚŵĞŶƚƐ ĂŶĚ ŐƌĞĂƚĞƌ ƵƐĞ ŽĨ ƚŚĞ ƐĞƌǀŝĐĞƐ ĨŽƌ ƚŚĞ ƉĞƌŝŽĚƐ ƵŶĚĞƌ ĐŽŵƉĂƌŝƐŽŶ
;нZΨϰ͘ϳŵŝůůŝŽŶͿ͖
(v)
EŽŶͲƌĞĐƵƌƌŝŶŐ ĞĨĨĞĐƚƐ ŽĐĐƵƌƌĞĚ ŝŶ ϮYϭϮ ĂŶĚ ϰYϭϮ ƌĞĨĞƌƌŝŶŐ ƚŽ ^d ;KĐĐƵƉĂƚŝŽŶĂů
ĐĐŝĚĞŶƚ /ŶƐƵƌĂŶĐĞͿ ĐƌĞĚŝƚ ĨĂĐŝůŝƚǇ ƌĞůĂƚĞĚ ƚŽ ƚŚĞ ǇĞĂƌƐ ŽĨ ϭϵϵϭͲϭϵϵϵ ĂŶĚ ϮϬϬϱͲϮϬϭϬ ŝŶ W
ƐĐĞůƐĂĚƵĞƚŽƚŚĞƉĂǇŵĞŶƚƐŝŶƚŚĞƉƌĞǀŝŽƵƐƉĞƌŝŽĚƐ;ͲZΨϴ͘ϱŵŝůůŝŽŶͿ͖ĂŶĚ
/ŶDĂƚĞƌŝĂůƐĂĐĐŽƵŶƚ͕ƚŚĞZΨϮ͘ϭŵŝůůŝŽŶ;нϴ͘ϭйͿŝŶĐƌĞĂƐĞďĞƚǁĞĞŶǇĞĂƌƐŽĨϮϬϭϮĂŶĚϮϬϭϭŝƐ
ĚƵĞ ƚŽ ŐƌĞĂƚĞƌ ĞǆƉĞŶƐĞƐ ǁŝƚŚ ŵĂƚĞƌŝĂů ĚĞƐƚŝŶĞĚ ƚŽ ŝŵƉƌŽǀĞ ƚŚĞ ĨĂĐŝůŝƚŝĞƐ ŽĨ ĂĚŵŝŶŝƐƚƌĂƚŝǀĞ
ϵϱ
ϮϬϭϮDE'DEdZWKZd
ŚĞĂĚƋƵĂƌƚĞƌƐŝŶ^ĆŽWĂƵůŽ͕ŝŶĂĚĚŝƚŝŽŶƚŽŐƌĞĂƚĞƌĞǆƉĞŶƐĞƐǁŝƚŚĨƵĞůĂŶĚŵĂƚĞƌŝĂůĨŽƌǀĞŚŝĐůĞ
ŵĂŝŶƚĞŶĂŶĐĞ͘
/Ŷ ƚŚĞ ŝƚĞŵ ƚŚŝƌĚ ƉĂƌƚǇ ƐĞƌǀŝĐĞƐ͕ ƚŚĞ ŝŶĐƌĞĂƐĞ ŽĨ ZΨ ϭϰ͘ϯ ŵŝůůŝŽŶ ;нϰ͘ϭйͿ ŽŶ ĂŶ ĂŶŶƵĂů
ĐŽŵƉĂƌŝƐŽŶŝƐŵĂŝŶůǇŽǁĞĚƚŽƚŚĞĨŽůůŽǁŝŶŐĨĂĐƚŽƌƐ͗
(i)
ŽŶƚƌĂĐƚƵĂůƌĞĂĚũƵƐƚŵĞŶƚƐĨƌŽŵƐĞƌǀŝĐĞƉƌŽǀŝĚĞƌƐŝŶƚŚĞƉĞƌŝŽĚ;нZΨϭϰ͘ϳŵŝůůŝŽŶͿ͖
(ii) /ŶĐƌĞĂƐĞĚƉĂǇŵĞŶƚĨŽƌĐŽŶƐƵůƚŝŶŐƐĞƌǀŝĐĞƐ;нZΨϱ͘ϱŵŝůůŝŽŶͿ͖
(iii) ŽŶƐƵůƚŝŶŐƐĞƌǀŝĐĞƐĞǆƉĞŶƐĞƐ͕ƌĞĨĞƌƌŝŶŐƚŽƐƐĞƚƐ/ŶǀĞŶƚŽƌǇŝŶƚŚĞŝƐƚƌŝďƵƚŽƌƐ;ZĞŐƵůĂƚŽƌǇ
ĞŵĂŶĚͿ;нZΨϰ͘ϳŵŝůůŝŽŶͿ͖
(iv) ǆƉĞŶƐĞƐ ǁŝƚŚ >ĞŐĂů ĚǀŝƐŽƌƐ ƌĞĨĞƌƌŝŶŐ ƚŽ ƚŚĞ ƐƵĐĐĞƐƐĨƵů ŽƵƚĐŽŵĞ ŽĨ ƚŚĞ ^d ůĂǁƐƵŝƚ Ăƚ
WƐĐĞůƐĂ;нZΨϭ͘ϯŵŝůůŝŽŶͿ͖
(v) ^ƚĂŶĚĂƌĚŶŽŶƌĞĐƵƌƌŝŶŐĞǆƉĞŶƐĞƐĂŶĚŝŵƉƌŽǀĞŵĞŶƚƐƚŽƚŚĞ^ĆŽ:ŽƐĠĚŽƐĂŵƉŽƐƌĞŐŝŽŶĂů
ŝŶƐƚĂůůĂƚŝŽŶƐ͕ĂĚŵŝŶŝƐƚƌĂƚŝǀĞŵĂŝŶŽĨĨŝĐĞŝŶ^ĆŽWĂƵůŽ;нZΨϭ͘ϮŵŝůůŝŽŶͿ͖ĂŶĚ
(vi) ĨĨĞĐƚ ŽĨ ƚŚĞ ŝŶƐŽƵƌĐŝŶŐ Ăƚ W ĂŶĚĞŝƌĂŶƚĞ͕ ďǇ ƌĞĚƵĐŝŶŐ ƐĞƌǀŝĐĞ ƉƌŽǀŝƐŝŽŶ ƐƚĂĨĨ ĂŶĚ
ƌĞĚƵĐŝŶŐĂĐƚŝǀŝƚŝĞƐŽĨŶĞƚǁŽƌŬŵĂŝŶƚĞŶĂŶĐĞĂŶĚƉƌƵŶŝŶŐǀŽůƵŵĞ͕ŝŶĂĚĚŝƚŝŽŶƚŽƚŚĞĐŽŵƉůĞƚŝŽŶ
ŽĨƚĞĐŚŶŝĐĂůƉƌŽũĞĐƚƐ;ͲZΨϭϯ͘ϬŵŝůůŝŽŶͿ͘
/ŶƚŚĞŝƚĞŵƉƌŽǀŝƐŝŽŶƐ͕ƚŚĞƌĞĚƵĐƚŝŽŶŽĨZΨϰϱ͘ϯŵŝůůŝŽŶŵĂŝŶůǇƌĞĨůĞĐƚƐƚŚĞĨŽůůŽǁŝŶŐĞǀĞŶƚƐ͗
(i) /Ŷ ϮϬϭϭ͕ ƚŚĞ EŽŶͲƌĞĐƵƌƌŝŶŐ ĞĨĨĞĐƚ ŝŶ ƚŚĞ ĚŽƵďƚĨƵů ĂĐĐŽƵŶƚƐ ƌĞĐĞŝǀĂďůĞ ďĂůĂŶĐĞƐ ĚƵĞ ƚŽ
ŝŵƉƌŽǀĞŵĞŶƚƐ ŝŵƉůĞŵĞŶƚĞĚ ŝŶ ƚŚĞ ĐŽŵŵĞƌĐŝĂů ĐǇĐůĞ͕ ŝŶƚĞƌŶĂů ZĞǀĞŶƵĞ ƐƐƵƌĂŶĐĞ ƉƌŽĐĞƐƐĞƐ
;ŐƵĂƌĂŶƚĞĞĚŝŶĐŽŵĞͿĂŶĚŶĞǁĂĐĐŽƵŶƚŝŶŐƉƌŽĐĞĚƵƌĞƐĨŽƌƚŚĞĚĞĨĂƵůƚŝŶƐƚĂůůŵĞŶƚƐƉĂǇŵĞŶƚƐĂƚ
WĂŶĚĞŝƌĂŶƚĞĂŶĚWƐĐĞůƐĂ;нZΨϮϮ͘ϬŵŝůůŝŽŶͿ͖
(ii) WƌŽǀŝƐŝŽŶĨŽƌ^ƵĐĐĞƐƐĨƵůKƵƚĐŽŵĞ&ĞĞƐĨŽƌůĂǁƐƵŝƚƐĚĞĞŵĞĚĂƐWŽƐƐŝďůĞĂŶĚZĞŵŽƚĞ;нZΨ
ϰ͘ϱŵŝůůŝŽŶ͕ŽĨǁŚŝĐŚнZΨϬ͘ϲŵŝůůŝŽŶĂƚWĂŶĚĞŝƌĂŶƚĞ͕ZΨϮ͘ϯŵŝůůŝŽŶĂƚWƐĐĞůƐĂĂŶĚZΨ
ϭ͘ϱŵŝůůŝŽŶĂƚ/ŶǀĞƐƚĐŽͿ͖
(iii) EŽŶͲƌĞĐƵƌƌŝŶŐĞĨĨĞĐƚŽĨƌĞǀĞƌƐĂůŽĨƚŚĞůůŽǁĂŶĐĞ&ŽƌWŽƐƐŝďůĞ>ŽĂŶ>ŽƐƐĞƐ;WͿĚƵĞƚŽ
ĂŐƌĞĞŵĞŶƚĞŶƚĞƌĞĚŝŶƚŽďĞƚǁĞĞŶWŽŵĞƌĐŝĂůŝǌĂĚŽƌĂĂŶĚŵƉůĂŶĞƌŐŝĂĨŽƌƚŚĞĞŶĚŽĨƚŚĞ
ũƵĚŝĐŝĂůĚŝƐƉƵƚĞďĞƚǁĞĞŶƚŚĞĐŽŵƉĂŶŝĞƐƌĞĨĞƌƌŝŶŐƚŽƚŚĞĂƌďŝƚƌĂƚŝŽŶĂǁĂƌĚƌĞŶĚĞƌĞĚďǇ&'s͛Ɛ
ƌďŝƚƌĂƚŝŽŶĂŶĚŽŶĐŝůŝĂƚŝŽŶŚĂŵďĞƌ͘dŚĞĂŐƌĞĞŵĞŶƚĞŶƚĞƌĞĚŝŶƚŽƐĞƚƐĨŽƌƚŚƚŚĞŵĂŝŶƚĞŶĂŶĐĞ
ŽĨƚŚĞĞŶĞƌŐǇƚƌĂĚŝŶŐĂŐƌĞĞŵĞŶƚ͕ĞŶƚĞƌĞĚŝŶƚŽŽŶ:ƵŶĞϮϲ͕ϮϬϬϮ͕ŵĂƚƵƌŝŶŐŝŶϮϬϮϮ;ͲZΨϯϱ͘ϵ
ŵŝůůŝŽŶͿ͖
(iv) EŽŶͲƌĞĐƵƌƌŝŶŐĞĨĨĞĐƚ͕ŝŶϮYϭϭ͕ĚƵĞƚŽĂĐŚĂŶŐĞŝŶƚŚĞƌĂƚŝŶŐŽĨƚŚĞůŝŬĞůŝŚŽŽĚŽĨůŽƐƐĨƌŽŵ
͞ƉŽƐƐŝďůĞ͟ƚŽ͞ƉƌŽďĂďůĞ͟ĨŽƌƚŚĞůĂǁƐƵŝƚŝŶƉƌŽŐƌĞƐƐďĞƚǁĞĞŶƚŚĞĐŽŵƉĂŶŝĞƐWĂŶĚĞŝƌĂŶƚĞ
ĂŶĚtŚŝƚĞDĂƌƚŝŶƐ^͕͘͘ƌĞĨĞƌƌŝŶŐƚŽƚŚĞŝŶĐƌĞĂƐĞŝŶƚŚĞƚĂƌŝĨĨƐŝŶƚŚĞ͞ƌƵǌĂĚŽ͟WůĂŶƉĞƌŝŽĚ;ͲZΨ
Ϯϱ͘ϭŵŝůůŝŽŶͿ͖
(v) EŽŶͲƌĞĐƵƌƌŝŶŐ ĞĨĨĞĐƚ͕ ŝŶ ϮϬϭϭ͕ ƌĞĨĞƌƌŝŶŐ ƚŽ ƚŚĞ ƉƌŽǀŝƐŝŽŶ ŝŶ ƚŚĞ ĂƌďŝƚƌĂƚŝŽŶ ƉƌŽĐĞƐƐ ŽĨ
ŽďůŝŐĂƚŝŽŶƐǆĐŽŶƚƌĂĐƚŽƌyŝŶƚŚĞĐŽŶƐƚƌƵĐƚŝŽŶŽĨ^ĆŽ:ŽĆŽ^ŵĂůů,ǇĚƌŽĞůĞĐƚƌŝĐWůĂŶƚ;W,Ϳ͘
;ͲZΨϱ͘ϲŵŝůůŝŽŶͿ͖
(vi) EŽŶͲƌĞĐƵƌƌŝŶŐ ĞĨĨĞĐƚ͕ ŝŶ ϮϬϭϭ͕ ƌĞĨĞƌƌŝŶŐ ƚŽ ƚŚĞ ƌĞĐŽƌĚŝŶŐ ŽĨ ƉƌŽǀŝƐŝŽŶ ĨŽƌ ĐŽŶƚŝŶŐĞŶĐŝĞƐ
ƌĞůĂƚĞĚƚŽ͞ƌƵǌĂĚŽ͟ƉůĂŶ;ͲZΨϱ͘ϲŵŝůůŝŽŶͿ͖
dŚĞĚĞĐƌĞĂƐĞŽĨZΨϭϰϰ͘ϲŵŝůůŝŽŶŝŶƚŚĞKƚŚĞƌƐĂĐĐŽƵŶƚŝƐĂƌĞƐƵůƚŽĨƚŚĞŵĂŝŶĞĨĨĞĐƚƐ͗
ϵϲ
ϮϬϭϮDE'DEdZWKZd
(i) /ŶϮϬϭϭ͕ŶŽŶƌĞĐƵƌƌŝŶŐĞĨĨĞĐƚƌĞůĂƚĞĚƚŽďŽŽŬŐĂŝŶƐŝŶƚŚĞĂĐƋƵŝƐŝƚŝŽŶŽĨƚŚĞĐŽŵƉĂŶǇ
WĂƌƚŝĐŝƉĂĕƁĞƐ ^͘͘ ;h, ^ĂŶƚŽ ŶƚƀŶŝŽ ĚŽ :ĂƌŝͿ ďĂƐĞĚ ŽŶ Ă ŵĂƌŬĞƚ ĞǀĂůƵĂƚŝŽŶ ƌĞƉŽƌƚ ŽŶ
ĂŐƌĞĞŵĞŶƚŽĨŝŶƚĞƌŶĂƚŝŽŶĂůƉƌĂĐƚŝĐĞƐͲWϭϱĂŶĚWϭϴ;нZΨϭϬ͘ϮŵŝůůŝŽŶͿ͖
(ii) EŽŶͲƌĞĐƵƌƌŝŶŐ ĞĨĨĞĐƚ ŽĨ ĨŝŶĞ ĨŽƌ ĚĞůĂǇ ŝŶ WŽƌƚŽ ĚŽ WĞĐĞŵ / dŚĞƌŵŽĞůĞĐƚƌŝĐ WůĂŶƚ ;hdͿ
ƌĞůĂƚĞĚƚŽƚŚĞŶŽŶͲĐŽŵƉůŝĂŶĐĞǁŝƚŚƚŚĞƐƚĂƌƚͲƵƉƚĞƌŵ;нZΨϲ͘ϱŵŝůůŝŽŶͿ͖
(iii) EŽŶͲƌĞĐƵƌƌŝŶŐ ĞĨĨĞĐƚ ŽĨ ǀƌĞĐǇ WĂƌƚŝĐŝƉĂĕƁĞƐ >ƚĚĂ ƐŽůĚ ƚŽ dW ŝŶ DĂǇ ϮϬϭϮ;Ͳ ZΨ ϯϭ͘ϱ
ŵŝůůŝŽŶͿ͖
(iv) EŽŶͲƌĞĐƵƌƌŝŶŐĞĨĨĞĐƚ͕ƌĞůĂƚĞĚƚŽƚŚĞƐĂůĞŽĨƌĞĂůĞƐƚĂƚĞƐŽĨĚŝƐƚƌŝďƵƚŽƌƐ;ͲZΨϭϲ͘ϬŵŝůůŝŽŶ͕ŽĨ
ǁŚŝĐŚZΨϭϭ͘ϭŵŝůůŝŽŶĂƚĂŶĚĞŝƌĂŶƚĞĂŶĚZΨϰ͘ϱŵŝůůŝŽŶĂƚƐĐĞůƐĂͿ͖
(v) ĚũƵƐƚŵĞŶƚ ŽĨ ĂĐĐŽƵŶƚŝŶŐ ƌĞĐŽŶĐŝůŝĂƚŝŽŶ ƌĞůĂƚĞĚ ƚŽ ůŝĂďŝůŝƚŝĞƐ ƌĞĐŽƌĚĞĚ ĨŽƌ ƐĞƌǀŝĐĞƐ
ƉƌŽǀŝĚĞĚĂŶĚƵŶƌĞĂůŝǌĞĚ;ͲZΨϭϮ͘ϳŵŝůůŝŽŶͿ͖
/Ŷ ĂĚĚŝƚŝŽŶ ƚŽ ŝƚĞŵƐ ŵĞŶƚŝŽŶĞĚ ĂďŽǀĞ͕ ƚŚĞ ŝƚĞŵ KƚŚĞƌƐ ǁĂƐ ƉŽƐŝƚŝǀĞůǇ ĂĨĨĞĐƚĞĚ ďǇ EĞǁ
ZĞĐŽǀĞƌǇŵŽƵŶƚŽĨĚŝƐƚƌŝďƵƚŝŽŶĂƐƐĞƚƐŝŶZΨϭϬϮ͘ϰŵŝůůŝŽŶ;ZΨϮϰ͘ϱŵŝůůŝŽŶĂƚWĂŶĚĞŝƌĂŶƚĞ
ĂŶĚZΨϳϳ͘ϵŵŝůůŝŽŶĂƚWƐĐĞůƐĂͿ͘ƐƐĞƚĨŽƌƚŚďǇWƌŽǀŝƐŝŽŶĂůDĞĂƐƵƌĞEŽ͘ϱϳϵ͕ĐŽŶĐĞƐƐŝŽŶ
ĂƐƐĞƚƐĂƌĞƚŽďĞŝŶĚĞŵŶŝĨŝĞĚĐŽŶƐŝĚĞƌŝŶŐƚŚĞEĞǁZĞĐŽǀĞƌǇŵŽƵŶƚͲsEZ͕ƚŚĞƐĂŵĞƵƐĞĚŝŶ
ƚŚĞ ƉƌŽĐĞƐƐĞƐ ŽĨ dĂƌŝĨĨ ZĞǀŝƐŝŽŶ ŽĨ ŶĞƌŐǇ ŝƐƚƌŝďƵƚŝŽŶ ŽŶĐĞƐƐŝŽŶƐ ƚŽ ĚĞĨŝŶĞ ƚŚĞ ZĞŐƵůĂƚŽƌǇ
ZĞŵƵŶĞƌĂƚŝŽŶ ĂƐĞ͕ ŝŶ ǁŚŝĐŚ ƚŚĞ ĂŵŽƵŶƚ ĐĂůĐƵůĂƚĞĚ ĂŶĚ ĐŽŶƐŝĚĞƌĞĚ ƚŽ ƌĞĐŽƌĚ ƚŚĞ ŶĞǁ
&ŝŶĂŶĐŝĂů ƐƐĞƚ ƌĞĨĞƌƐ ƚŽ ƚŚĞ ŶŽƚ ĚĞƉƌĞĐŝĂƚĞĚ ƉĞƌĐĞŶƚĂŐĞ ŽĨ ĂƐƐĞƚƐ ƵƉ ƚŽ ƚŚĞ ĞŶĚ ŽĨ ƚŚĞ
ŽŶĐĞƐƐŝŽŶ͘
dŚĞĂĐĐŽƵŶƚŽĨĚĞƉƌĞĐŝĂƚŝŽŶĂŶĚĂŵŽƌƚŝǌĂƚŝŽŶƚŽƚĂůĞĚZΨϯϰϬ͘ϰŵŝůůŝŽŶŝŶƚŚĞǇĞĂƌŽĨϮϬϭϮ͕Ă
ϭ͘ϱйĚĞĐƌĞĂƐĞĐŽŵƉĂƌĞĚƚŽϮϬϭϭ͕ĂƐĂƌĞƐƵůƚŽĨĂůŽǁĞƌƵƚŝůŝǌĂƚŝŽŶŽĨW/^ĂŶĚK&/E^ĐƌĞĚŝƚƐ
ĚƵĞƚŽĐŚĂŶŐĞŝŶƚŚĞĐƌŝƚĞƌŝĂŽĨĐƌĞĚŝƚǁŚŝĐŚĂƌĞŶŽůŽŶŐĞƌĚŝǀŝĚĞĚŝŶϭϮŝŶƐƚĂůůŵĞŶƚƐ͕ďƵƚŶŽǁ
ƚŚĞǇĂƌĞƵƐĞĚĂĐĐŽƌĚŝŶŐƚŽƚŚĞƵƐĞĨƵůůŝĨĞŽĨƚŚĞĂƐƐĞƚ͘
• /dĂŶĚ/dDĂƌŐŝŶ
/ŶϮϬϭϮ͕ƚŚĞĐŽŶƐŽůŝĚĂƚĞĚ/d;ĂƌŶŝŶŐƐďĞĨŽƌĞŝŶĐŽŵĞƚĂǆ͕ĨŝŶĂŶĐŝĂůŝŶĐŽŵĞŽƌĞǆƉĞŶƐĞƐ͕
ĚĞƉƌĞĐŝĂƚŝŽŶ ĂŶĚ ĂŵŽƌƚŝǌĂƚŝŽŶͿ ĂŵŽƵŶƚĞĚ ƚŽ ZΨ ϭ͕ϯϭϯ͘ϱ ŵŝůůŝŽŶ͕ ƌĞƉƌĞƐĞŶƚŝŶŐ ĂŶ ŝŶĐƌĞĂƐĞ ŽĨ
ϭϰ͘ϲй ŝŶ ƌĞůĂƚŝŽŶ ƚŽ ƚŚĞ ƉƌŝŽƌ ǇĞĂƌ͘ dŚĞ ĐŽŶƐŽůŝĚĂƚĞĚ /d ŵĂƌŐŝŶ ĚĞĐƌĞĂƐĞĚ ϳ͘ϳ Ɖ͘Ɖ͕͘
ƌĞĂĐŚŝŶŐϮϬ͘ϳй͘
/dĨƌŽŵŐĞŶĞƌĂƚŝŽŶ͕ŶŽƚŝŶĐůƵĚŝŶŐĞůŝŵŝŶĂƚŝŽŶƐ͕ƚŽƚĂůĞĚZΨϳϱϰ͘ϱŵŝůůŝŽŶ͕Ăϱ͘ϴйĚĞĐƌĞĂƐĞ
ŝŶ ƌĞůĂƚŝŽŶ ƚŽ ϮϬϭϭ͕ ĂƐ Ă ƌĞƐƵůƚ ŽĨ ƚŚĞ ĚĞůĂǇ ŝŶ ƚŚĞ ƐƚĂƌƚͲƵƉ ŽĨ WĞĐĠŵ / dŚĞƌŵŽĞůĞĐƚƌŝĐ WŽǁĞƌ
WůĂŶƚ͘
/ŶƚŚĞĚŝƐƚƌŝďƵƚŽƌƐWĂŶĚĞŝƌĂŶƚĞĂŶĚWƐĐĞůƐĂ͕/dƚŽƚĂůĞĚZΨϱϲϰ͘ϳŵŝůůŝŽŶŝŶϮϬϭϮ͕Ă
Ϯϱ͘ϮйĚĞĐƌĞĂƐĞŝŶƌĞůĂƚŝŽŶƚŽϮϬϭϭ͕ĂƐĂƌĞƐƵůƚŽĨƚŚĞŝŶĐƌĞĂƐĞŝŶŶŽŶͲŵĂŶĂŐĞĂďůĞĐŽƐƚƐ͕ǁŚŝĐŚ
ŝƐĚƵĞƚŽƚŚĞŝŶĐƌĞĂƐĞŝŶƐƉŽƚƉƌŝĐĞ͕ĐŽŽůŝŶŐŽĨĞĐŽŶŽŵŝĐĂŶĚŐƌŽǁƚŚĂŶĚŝŵƉĂĐƚĨƌŽŵĨƌŽǌĞŶ
ƚĂƌŝĨĨƐƌĞƐƵůƚŝŶŐĨƌŽŵƚĂƌŝĨĨƌĞǀŝƐŝŽŶŽĨWĂŶĚĞŝƌĂŶƚĞ͘
/ŶƚŚĞƚƌĂĚŝŶŐ͕/dǁĂƐZΨϱϯ͘ϳŵŝůůŝŽŶĂŶĚĂŶŝŶĐƌĞĂƐĞŽĨϲϰ͘ϮйŝŶƌĞůĂƚŝŽŶƚŽϮϬϭϭ͕ǁŚŝĐŚ
ŝƐ ŵĂŝŶůǇ ĚƵĞ ƚŽ ƚŚĞ ŝŶƚĞŶƐŝĨŝĐĂƚŝŽŶ ŽĨ ƐŚŽƌƚ ĂŶĚ ůŽŶŐ ƚĞƌŵ ŶĞŐŽƚŝĂƚŝŽŶƐ͕ ƐĂůĞƐ Ăƚ ƚŚĞ ϭϯƚŚ
ĂĚũƵƐƚŵĞŶƚĂƵĐƚŝŽŶ͕ĂƐƐĞƌƚŝǀĞƐƚƌĂƚĞŐǇŽĨƉŽƌƚĨŽůŝŽŵĂŶĂŐĞŵĞŶƚ͕ĂŶĚĂůƐŽƌĞǀĞƌƐĂůŽĨƉƌŽǀŝƐŝŽŶ
ƌĞĐŽƌĚĞĚĚƵĞƚŽƚŚĞĞŶĚŽĨƚŚĞũƵĚŝĐŝĂůĚŝƐƉƵƚĞǁŝƚŚŵƉůĂ͘
&ŝŶĂŶĐŝĂůƌĞƐƵůƚ
dŚĞĐŽŶƐŽůŝĚĂƚĞĚŶĞƚĨŝŶĂŶĐŝĂůĞǆƉĞŶƐĞŝŶϮϬϭϮǁĂƐZΨϮϰϱ͘ϳŵŝůůŝŽŶ͕ůŽǁĞƌƚŚĂŶƚŚĞĞǆƉĞŶƐĞ
ŽĨ ZΨϮϴϯ͘ϰŵŝůůŝŽŶ ŝŶ ϮϬϭϭ͘ dŚĞ ĨŽůůŽǁŝŶŐ ĐŽŶƚƌŝďƵƚĞĚ ƚŽǁĂƌĚ ƚŚŝƐ ƌĞƐƵůƚ͗ ;ŝͿ ĚĞĐƌĞĂƐĞ ŽĨ ƚŚĞ
ŶŽŶƌĞĐƵƌƌŝŶŐ ĞǆƉĞŶƐĞ Ăƚ W ĂŶĚĞŝƌĂŶƚĞ ŽǁĞĚ ƚŽ ƉƌŝĐĞ ůĞǀĞů ƌĞƐƚĂƚĞŵĞŶƚ ŽĨ ƚŚĞ ůŝĂďŝůŝƚǇ
ϵϳ
ϮϬϭϮDE'DEdZWKZd
ƌĞůĂƚĞĚƚŽŽŶŐŽŝŶŐůŝƚŝŐĂƚŝŽŶǁŝƚŚƚŚĞĐŽŵƉĂŶǇ͕tŚŝƚĞDĂƌƚŝŶƐ^͖͘͘;ŝŝͿĚĞĐƌĞĂƐĞŽĨƚŚĞŵĂƌŬĞƚ
ŵĂƌŬĂĚũƵƐƚŵĞŶƚƐĂŶĚƉƌĞƐĞŶƚǀĂůƵĞŽĨĚĞďƚ͖;ŝŝŝͿƉŽƐŝƚŝǀĞĞǆĐŚĂŶŐĞǀĂƌŝĂƚŝŽŶĚƵĞƚŽ,ĞĚŐĞĂŶĚ
^ǁĂƉŽƉĞƌĂƚŝŽŶƐ͘
• EĞƚŝŶĐŽŵĞ
ƵĞƚŽƚŚĞĞĨĨĞĐƚƐĂŶĂůǇǌĞĚĂďŽǀĞ͕ĐŽŶƐŽůŝĚĂƚĞĚŶĞƚŝŶĐŽŵĞĂƚƚĂŝŶĞĚZΨϯϰϭ͘ϲŵŝůůŝŽŶŝŶϮϬϭϮ͕
ϯϬ͘ϰйůŽǁĞƌƚŚĂŶŝŶϮϬϭϭ͘
• /ŶĚĞďƚĞĚŶĞƐƐ
dŚĞĐŽŶƐŽůŝĚĂƚĞĚŐƌŽƐƐĚĞďƚƚŽƚĂůĞĚZΨϰ͕ϮϴϬ͘ϴŵŝůůŝŽŶŝŶĞĐĞŵďĞƌϮϬϭϮ͕ĂŶŝŶĐƌĞĂƐĞŽĨϭϴ͘ϱй
ŝŶƌĞůĂƚŝŽŶƚŽĞĐĞŵďĞƌϮϬϭϭ͘
dŚĞ ǀĂƌŝĂƚŝŽŶ ŽĨ ŐƌŽƐƐ ŝŶĚĞďƚĞĚŶĞƐƐ ŝŶ ϮϬϭϮ ǁĂƐ ŵĂŝŶůǇ ĚƵĞ ƚŽ͗ ;ŝͿ Ă ZΨ ϯϬϬ ŵŝůůŝŽŶ
ĚŝƐďƵƌƐĞŵĞŶƚ ĨƌŽŵ ƚŚĞ ůŽŶŐ ƚĞƌŵ ĨŝŶĂŶĐŝŶŐ ǁŝƚŚ E^ ǁŚŽƐĞ ĨƵŶĚ ǁĂƐ ƵƐĞĚ ƚŽ ƐĞƚƚůĞ ƚŚĞ
ďƌŝĚŐŝŶŐ ůŽĂŶ ŽĨ WĂƌƚŝĐŝƉĂĕƁĞƐ ^͘͘ ǁŝƚŚ ĂŶĐŽ ĚŽ ƌĂƐŝů ƚŽ ďƵŝůĚ ^ĂŶƚŽ ŶƚƀŶŝŽ ĚŽ :Ăƌŝ
,ǇĚƌŽĞůĞĐƚƌŝĐWůĂŶƚ;h,Ϳ͖;ŝŝͿŶĞƌŐĞƐƚĚĞďĞŶƚƵƌĞŝƐƐƵĞŝŶƚŚĞĂŵŽƵŶƚŽĨZΨϭϮϬŵŝůůŝŽŶƚŽďĞ
ƐĞƚƚůĞĚ ŝŶ Ɖƌŝů ϮϬϭϳ͖ ;ŝŝŝͿ ĨƵŶĚƐ ƌĂŝƐĞĚ ƚŽƚĂůŝŶŐ ZΨ ϭϴϯ͘ϲ ŵŝůůŝŽŶ ďĞƚǁĞĞŶ >ͲE^ ĂŶĚ
ƌĠĚŝƚŽŐƌşĐŽůĂĂŶĚ/ĂƚƚŚĞĚŝƐƚƌŝďƵƚŽƌƐ͖;ŝǀͿĚŝƐďƵƌƐĞŵĞŶƚŽĨZΨϲϬ͘ϲŵŝůůŝŽŶĨƌŽŵE^
ĨŽƌ ĐŽŶƐƚƌƵĐƚŝŽŶ ŽĨ hƐŝŶĂ dĞƌŵĞůĠƚƌŝĐĂ ŶĞƌŐŝĂ WĞĐĠŵ /͖ ;ǀͿ ŝƐƐƵĞ ŽĨ ZΨ ϰϱϬ ŵŝůůŝŽŶ ŝŶ
ĚĞďĞŶƚƵƌĞƐ ŽĨ W ŶĞƌŐŝĂƐ ĚŽ ƌĂƐŝů͕ ǁŚŝĐŚ ǁŝůů ďĞ ĂůůŽĐĂƚĞĚ ĂƐ ĐĂƉŝƚĂů ŝŶũĞĐƚŝŽŶ ŝŶ ƚŚĞ
ŐĞŶĞƌĂƚŝŽŶďƵƐŝŶĞƐƐ͕ĚĞĚƵĐĞĚĨƌŽŵ;ǀŝͿĂŵŽƌƚŝǌĂƚŝŽŶŽĨWƐĐĞůƐĂĚĞďĞŶƚƵƌĞƐŝŶƚŚĞĂŵŽƵŶƚ
ŽĨZΨϴϯ͘ϯŵŝůůŝŽŶ͖ĂŶĚ;ǀŝŝͿĂŵŽƌƚŝǌĂƚŝŽŶŽĨůŽŶŐƚĞƌŵĚĞďƚƐĂƚƚŚĞŐĞŶĞƌĂƚŝŽŶĂŶĚĚŝƐƚƌŝďƵƚŝŽŶ
ĐŽŵƉĂŶŝĞƐ͘
tŝƚŚƚŚĞŶĞǁĨƵŶĚŝŶŐƌĂŝƐĞĚĚƵƌŝŶŐƚŚĞǇĞĂƌ͕ĂǀĞƌĂŐĞƚĞƌŵŽĨƚŚĞĐŽŶƐŽůŝĚĂƚĞĚĚĞďƚǁĂƐŬĞƉƚ
ŝŶϰ͘ϱǇĞĂƌƐŝŶĞĐĞŵďĞƌϮϬϭϮĐŽŵƉĂƌĞĚƚŽĞĐĞŵďĞƌϮϬϭϭ͘
KƵƚŽĨƚŽƚĂůŐƌŽƐƐĚĞďƚ͕ŽŶĞĐĞŵďĞƌϯϭ͕ϮϬϭϮ͕ϵ͘ϭйǁĞƌĞĚĞŶŽŵŝŶĂƚĞĚŝŶĨŽƌĞŝŐŶĐƵƌƌĞŶĐǇ͕
ĨƵůůǇ ƉƌŽƚĞĐƚĞĚ ĨƌŽŵ ĨŽƌĞŝŐŶ ĞǆĐŚĂŶŐĞ ǀĂƌŝĂƚŝŽŶ ĂŶĚ >ŝďŽƌ ƚŚƌŽƵŐŚ ŚĞĚŐĞ ĂŶĚ ƐǁĂƉ
ŝŶƐƚƌƵŵĞŶƚƐ͘
dŚĞ ĂǀĞƌĂŐĞ ĐŽƐƚ ŽĨ ƚŚĞ 'ƌŽƵƉΖƐ ĚĞďƚ ŝŶ ĞĐĞŵďĞƌ ϮϬϭϮ ǁĂƐ ϴ͘ϳй ƉĞƌ ǇĞĂƌ͕ ĐŽŵƉĂƌĞĚ ƚŽ
ϭϬ͘ϯй ƉĞƌ ǇĞĂƌ ŝŶ ůĂƚĞ ϮϬϭϭ͕ ƚĂŬŝŶŐ ŝŶƚŽ ĐŽŶƐŝĚĞƌĂƚŝŽŶ ĐĂƉŝƚĂůŝǌĞĚ ŝŶƚĞƌĞƐƚ ŽŶ ƚŚĞ ĚĞďƚƐ ĂŶĚ
ĐŚĂƌŐĞƐŝŶĐƵƌƌĞĚŝŶƚŚĞůĂƐƚǇĞĂƌ͘ĞĐƌĞĂƐĞŝŶĂǀĞƌĂŐĞĐŽƐƚŝƐĚƵĞƚŽƌĞĚƵĐƚŝŽŶƐƚŽĂǀĞƌĂŐĞ^ĞůŝĐ
ĂŶĚd:>WŝŶϮϬϭϮ͕ǁŚĞŶĐŽŵƉĂƌĞĚƚŽϮϬϭϭ͕ŝŶĂĚĚŝƚŝŽŶƚŽŚĂǀŝŶŐŶĞǁĚĞďƚƐŝŶĚĞǆĞĚƚŽ/͘
^ŚŽƌƚͲƚĞƌŵ ĚĞďƚ ĂŵŽƵŶƚƐ ƚŽ ZΨ ϴϬϬ͘ϳ ŵŝůůŝŽŶ͘ KĨ ƚŚŝƐ ƚŽƚĂů͕ ZΨ ϮϮϲ͘ϱ ŵŝůůŝŽŶ ƌĞĨĞƌ ƚŽ
ĚŝƐƚƌŝďƵƚŝŽŶĂŶĚZΨϱϱϳ͘ϴŵŝůůŝŽŶƚŽŐĞŶĞƌĂƚŝŽŶ͘/ŶϮϬϭϯ͕ĚŝƐƚƌŝďƵƚŝŽŶƚŚĞƌĞǁŝůůďĞĂŵŽƌƚŝǌĂƚŝŽŶ
ŽĨ ƚŚĞ W ƐĐĞůƐĂ ĚĞďĞŶƚƵƌĞƐ ƚŽƚĂůŝŶŐ ZΨϴϯ͘ϯŵŝůůŝŽŶ͕ ŝŶ ĂĚĚŝƚŝŽŶ ƚŽ ĂŵŽƌƚŝǌĂƚŝŽŶŽĨE^
ĨŝŶĂŶĐŝŶŐĂŶĚŽƚŚĞƌĐƌĞĚŝƚŽƌƐ͘/ŶƚŚĞŐĞŶĞƌĂƚŝŽŶ͕ĚŝƐďƵƌƐĞŵĞŶƚƐĨƌŽŵƚŚĞůŽŶŐƚĞƌŵĨŝŶĂŶĐŝŶŐ
ǁŝƚŚ E^ ǁŝůů ďĞ ŵĂĚĞ ƚŽ ďƵŝůĚ ^ĂŶƚŽ ŶƚƀŶŝŽ ĚŽ :Ăƌŝ ,ǇĚƌŽĞůĞĐƚƌŝĐ WůĂŶƚ ;h,Ϳ͘ KŶ ƚŚĞ
ŽƚŚĞƌŚĂŶĚ͕ĂŵŽƌƚŝǌĂƚŝŽŶƚŽĨŝŶĂŶĐŝŶŐƐŽĨƚŚĞƉůĂŶƚƐƵŶĚĞƌŽƉĞƌĂƚŝŽŶǁŝůůďĞŵĂĚĞ͕ŝŶĂĚĚŝƚŝŽŶ͕
ǁĞǁŝůůƐƚĂƌƚƚŽĂŵŽƌƚŝǌĞƚŚĞĨŝŶĂŶĐŝŶŐŽĨWĞĐĠŵ/dŚĞƌŵŽĞůĞĐƚƌŝĐWŽǁĞƌWůĂŶƚ͘
EĞƚĚĞďƚ͕ĐŽŶƐŝĚĞƌŝŶŐƚŚĞĂŵŽƵŶƚŽĨZΨϱϳϮ͘ϰŵŝůůŝŽŶŽĨĐĂƐŚĂŶĚĐĂƐŚĞƋƵŝǀĂůĞŶƚƐ͕ƌĞĂĐŚĞĚZΨ
ϯ͕ϳϬϴ͘ϱŵŝůůŝŽŶŽŶĞĐĞŵďĞƌϯϭ͕ϮϬϭϮ͕ĂŶŝŶĐƌĞĂƐĞŽĨϯϲ͘ϱйŝŶƌĞůĂƚŝŽŶƚŽĞĐĞŵďĞƌϮϬϭϭ͕ĚƵĞ
ƚŽƚŚĞϯϲ͘ϭйĚĞĐƌĞĂƐĞ;ZΨϯϮϯ͘ϱŵŝůůŝŽŶͿŝŶƚŚĞďĂůĂŶĐĞŽĨĐĂƐŚĂŶĚĐĂƐŚĞƋƵŝǀĂůĞŶƚƐĂƚƚŚĞĞŶĚ
ŽĨϮϬϭϮ͘dŚŝƐƌĞĚƵĐƚŝŽŶŝŶƚŚĞĐĂƐŚďĂůĂŶĐĞŝƐƌĞƐƵůƚŝŶŐĨƌŽŵŵĂƌŐŝŶƉƌĞƐƐƵƌĞŝŶƚŚĞĚŝƐƚƌŝďƵƚŽƌƐ
ǁŝƚŚ ƚŚĞ ŝŶĐƌĞĂƐĞ ŝŶ ƚŚĞ ĐŽƐƚ ŽĨ ĞŶĞƌŐǇ ƉƵƌĐŚĂƐĞ ĂŶĚ ŝŵƉĂĐƚ ŽĨ ĨƌŽǌĞŶ ƚĂƌŝĨĨƐ ĚƵĞ ƚŽ ƚĂƌŝĨĨ
ƌĞǀŝƐŝŽŶ Ăƚ W ĂŶĚĞŝƌĂŶƚĞ͕ ĂƐ ǁĞůů ĂƐ ƚŚĞ ĚĞůĂǇ ƚŽ ƐƚĂƌƚ ĐŽŵŵĞƌĐŝĂů ŽƉĞƌĂƚŝŽŶƐ ŽĨ WĞĐĠŵ /
dŚĞƌŵŽĞůĞĐƚƌŝĐWŽǁĞƌWůĂŶƚ͘
ϵϴ
ϮϬϭϮDE'DEdZWKZd
dŚĞŶĞƚĚĞďƚͬ/dƌĂƚŝŽĞŶĚĞĚƚŚĞǇĞĂƌĂƚϮ͘ϴƚŝŵĞƐ͕ŽǀĞƌϭ͘ϴƚŝŵĞƐŝŶĞĐĞŵďĞƌϮϬϭϭ͘
ĞƚĂŝůŽĨƚŚĞĨŝŶĂŶĐŝŶŐĚŝƐďƵƌƐĞĚŝŶϮϬϭϮ
,ŽůĚŝŶŐ
KŶ^ĞƉƚĞŵďĞƌϲ͕ϮϬϭϮ͕WʹŶĞƌŐŝĂƐĚŽƌĂƐŝů^͘͘ĐŽŵƉůĞƚĞĚƚŚĞŝƐƐƵĞŽĨĚĞĞďĞŶƚƵƌĞƐŝŶ
ƚŚĞĂŵŽƵŶƚŽĨZΨϰϱϬŵŝůůŝŽŶ͘dŚĞĞďĞŶƚƵƌĞƐŚĂǀĞĂŶϭϴͲŵŽŶƚŚƚĞƌŵ͕ǁŝƚŚŝŶƚĞƌĞƐƚƉĂǇŵĞŶƚ
ĂŶĚĂŵŽƌƚŝǌĂƚŝŽŶŝŶ&ĞďƌƵĂƌǇϮϬϭϰ͘dŚĞŝƐƐƵĂŶĐĞǁĂƐƌĂƚĞĚĂϮ͘ďƌďǇDŽŽĚǇ͛ƐĂŶĚŝƚƐĐŽƐƚǁĂƐ
ĚĞĨŝŶĞĚŝŶďŽŽŬďƵŝůĚŝŶŐƉƌŽĐĞƐƐĂƚϭϬϱ͘ϱϬйŽĨ/͘
ŝƐƚƌŝďƵƚŝŽŶ
/Ŷ&ĞďƌƵĂƌǇϮϬϭϮ͕ƚŚĞĚŝƐƚƌŝďƵƚŽƌƐŽĨƚŚĞ'ƌŽƵƉ͕WĂŶĚĞŝƌĂŶƚĞĂŶĚWƐĐĞůƐĂ͕ĨŝŶŝƐŚĞĚƚŚĞ
ĨƵŶĚ ƌĂŝƐŝŶŐ ƚŚƌŽƵŐŚ ƚŚĞ ƵƌŽƉĞĂŶ /ŶǀĞƐƚŵĞŶƚ ĂŶŬ;/Ϳ ŝŶ ƚŚĞ ĂŵŽƵŶƚŽĨ h^Ψ ϭϵ͘ϳ ŵŝůůŝŽŶ͕
ǁŚŝĐŚĐŽƌƌĞƐƉŽŶĚƐƚŽZΨϯϰ͘ϭŵŝůůŝŽŶĨŽƌĞĂĐŚĐŽŵƉĂŶǇ͘dŚŝƐĨƵŶĚŝŶŐŚĂƐĂƐƉƵƌƉŽƐĞƚŽĨŝŶĂŶĐĞ
ƚŚĞ ŝŶǀĞƐƚŵĞŶƚ ŽĨ ƚŚĞ ĚŝƐƚƌŝďƵƚŽƌƐ ĂŶĚ ŚĂƐ Ă ϲͲǇĞĂƌ ƚĞƌŵ͕ ǁŝƚŚ ƉĂǇŵĞŶƚ ŽĨ ƐŝǆͲǇĞĂƌ ŝŶƚĞƌĞƐƚƐ
ĂŶĚĨŝŶĂůĂŵŽƌƚŝǌĂƚŝŽŶ͘ŚĞĚŐĞǁĂƐŚŝƌĞĚƚŚƌŽƵŐŚĂƐǁĂƉĂŐƌĞĞŵĞŶƚĨŽƌƚŚĞŶŽŵŝŶĂůĐŽƐƚŽĨ
ϵϯ͘ϰйŽĨ/͘
/Ŷ :ƵŶĞ ϮϬϭϮ͕ ƚŚĞƌĞ ǁĞƌĞ ĚŝƐďƵƌƐĞŵĞŶƚƐ ŽĨ ƚŚĞ ƌĞĚŝƚ >ŝŵŝƚ KƉĞŶŝŶŐ ŽŶƚƌĂĐƚ ;>Ϳ ĨƌŽŵ
E^͘dŚĞĂŵŽƵŶƚƌĞůĞĂƐĞĚŽĨZΨϴ͘ϱŵŝůůŝŽŶƚŽWĂŶĚĞŝƌĂŶƚĞĂŶĚZΨϭϳ͘ϬŵŝůůŝŽŶƚŽW
ƐĐĞůƐĂ͘DĂƚƵƌŝƚǇƚĞƌŵŝƐƵƉƚŽϮϬϭϵĂŶĚŝŶƚĞƌĞƐƚƌĂƚĞƐŽĨd:>WнĨƌŽŵϭ͘ϴϭйƚŽϯ͘ϯϮй͘
/Ŷ^ĞƉƚĞŵďĞƌϮϬϭϮ͕WƐĐĞůƐĂƐŝŐŶĞĚǁŝƚŚĂŶĐŽĚŽƌĂƐŝů͕ŐƌŽŝŶĚƵƐƚƌŝĂůƌĞĚŝƚƚǇƉĞůŽĂŶŝŶ
ƚŚĞ ĂŵŽƵŶƚ ŽĨ ZΨ ϵϬ ŵŝůůŝŽŶ͘ dŚĞƌĞ ǁŝůů ďĞ ϵϴ͘ϱϬй / ŝŶƚĞƌĞƐƚ ŽŶ ƚŚĞ ĂŵŽƵŶƚƐ ƌĂŝƐĞĚ ĂŶĚ
ƉƌŝŶĐŝƉĂůĂŶĚŝŶƚĞƌĞƐƚĨĂůůŝŶŐĚƵĞŝŶŽŶĞƐŝŶŐůĞƉĂǇŵĞŶƚŝŶ^ĞƉƚĞŵďĞƌϮϬϭϰ͘
'ĞŶĞƌĂƚŝŽŶ
ŶĞƌŐĞƐƚ
/Ŷ Ɖƌŝů ϮϬϭϮ͕ ŶĞƌŐĞƐƚ ^͘͘ ŝƐƐƵĞĚ ĚĞďĞŶƚƵƌĞƐ ŝŶ ƚŚĞ ĂŵŽƵŶƚ ŽĨ ZΨ ϭϮϬ ŵŝůůŝŽŶ͘ ĞďĞŶƚƵƌĞƐ
ŚĂǀĞĂĨŝŶĂůƚĞƌŵŽĨϱǇĞĂƌƐ͕ƐŝǆͲŵŽŶƚŚƉĞƌŝŽĚƉĂǇŵĞŶƚŽĨŝŶƚĞƌĞƐƚƐĂŶĚĂŵŽƌƚŝǌĂƚŝŽŶƐĂƚƚŚĞ
ĞŶĚ ŽĨ ƚŚĞ ϰƚŚ ĂŶĚ ϱƚŚ ǇĞĂƌƐ͘ dŚĞ ŝƐƐƵĂŶĐĞ ǁĂƐ ƌĂƚĞĚ Ăϭ͘ďƌ ďǇ DŽŽĚǇ͛Ɛ ĂŶĚ ŝƚƐ ĐŽƐƚ ǁĂƐ
ĚĞĨŝŶĞĚŝŶďŽŽŬďƵŝůĚŝŶŐƉƌŽĐĞƐƐĂƚ/нϬ͘ϵϴйƉ͘Ă͘͘
WĂƌƚŝĐŝƉĂĕƁĞƐ^͘͘
KŶKĐƚŽďĞƌϮϲ͕ϮϬϭϭ͕ƐŝŐŶĞĚĂŶĞǁĐƌĞĚŝƚůŝŶĞŝŶƚŚĞĂŵŽƵŶƚŽĨZΨϯϲϬŵŝůůŝŽŶ͕ĨƌŽŵĂŶĐŽ
ĚŽƌĂƐŝůĂƐĂďƌŝĚŐĞůŽĂŶĨŽƌŝŵƉůĞŵĞŶƚĂƚŝŽŶĂŶĚĐŽŶƐƚƌƵĐƚŝŽŶŽĨh,^ĂŶƚŽŶƚƀŶŝŽĚŽ:Ăƌŝ͕Ăƚ
ĂƌĂƚĞŽĨϭϬϵйŽĨ/͕ĨĂůůŝŶŐĚƵĞŽŶKĐƚŽďĞƌϭϯ͕ϮϬϭϯ͘
/Ŷ ĞĐĞŵďĞƌ ϮϬϭϮ͕ Ă ůŽŶŐ ƚĞƌŵ ĨŝŶĂŶĐŝŶŐ ĂŐƌĞĞŵĞŶƚ ǁĂƐ ĞŶƚĞƌĞĚ ŝŶƚŽ ǁŝƚŚ E^ ĨŽƌ h,
^ĂŶƚŽ ŶƚƀŶŝŽ ĚŽ :Ăƌŝ͘ dŚĞ ĨŝŶĂŶĐŝŶŐ ĂŵŽƵŶƚƐ ƚŽ ZΨ ϳϯϲ͘ϴ ŵŝůůŝŽŶ͕ ǁŝƚŚ Ă ϭϲͲǇĞĂƌ ƚĞƌŵ ĨŽƌ
ĂŵŽƌƚŝǌĂƚŝŽŶĂŶĚŐƌĂĐĞƉĞƌŝŽĚ͕ĂŶĚƉĂǇŵĞŶƚƚŽďĞŐŝŶŽŶ:ƵŶĞϭϱ͕ϮϬϭϱ͕ǁŝƚŚd:>WŝŶƚĞƌĞƐƚƌĂƚĞ
н ϭ͘ϴϲй Ɖ͘Ă͘͘ ƚ ƚŚĞ ĞŶĚ ŽĨ ƚŚĞ ŵŽŶƚŚ͕ ƚŚĞ ĨŝƌƐƚ ĂŵŽƵŶƚ ŽĨ ZΨ ϯϬϬ͘Ϭ ŵŝůůŝŽŶ ǁĂƐ ĚŝƐďƵƌƐĞĚ͕
ǁŚŝĐŚǁĂƐƵƐĞĚƚŽƐĞƚƚůĞƚŚĞďƌŝĚŐŝŶŐůŽĂŶƚĂŬĞŶŽƵƚĂƚĂŶĐŽĚŽƌĂƐŝů͘
WĞĐĠŵ/dŚĞƌŵŽĞůĞĐƚƌŝĐWŽǁĞƌWůĂŶƚ
dŚĞůŽĂŶŽĨE^ĞƐƚĂďůŝƐŚĞƐĂůŽĂŶŝŶƚŚĞĂŵŽƵŶƚŽĨZΨϭ͘ϰďŝůůŝŽŶ;ŝŶŶŽŵŝŶĂůZΨ͕ĞǆĐůƵĚŝŶŐ
ŝŶƚĞƌĞƐƚ ĚƵƌŝŶŐ ĐŽŶƐƚƌƵĐƚŝŽŶͿ͕ ǁŝƚŚ Ă ƚŽƚĂů ƉĞƌŝŽĚ ŽĨ ϭϳ ǇĞĂƌƐ͕ ĐŽŶƐŝƐƚŝŶŐ ŽĨ ϭϰ ǇĞĂƌƐ ŽĨ
ĂŵŽƌƚŝǌĂƚŝŽŶ ĂŶĚ ŐƌĂĐĞ ƉĞƌŝŽĚ ĨŽƌ ƉĂǇŵĞŶƚ ŽĨ ŝŶƚĞƌĞƐƚ ĂŶĚ ƉƌŝŶĐŝƉĂů ƵƉ ƚŽ :ƵůǇ ϮϬϭϮ͘ dŚĞ
ĐŽŶƚƌĂĐƚĞĚ ĐŽƐƚ ŝƐ d:>W н Ϯ͘ϳϳй Ɖ͘Ă͕͘ ĂŶĚ ĚƵƌŝŶŐ ƚŚĞ ĐŽŶƐƚƌƵĐƚŝŽŶ ƉŚĂƐĞ ŝŶƚĞƌĞƐƚ ǁŝůů ďĞ
ĐĂƉŝƚĂůŝǌĞĚ͘/ŶƚŚĞĞŶĚŽĨϮϬϭϮ͕ƚŚĞŽƵƚůĂǇŽĨƚŚŝƐůŽĂŶƚŽƚĂůĞĚZΨϭ͘ϰďŝůůŝŽŶ͘
ϵϵ
ϮϬϭϮDE'DEdZWKZd
dŚĞůŽĂŶĨƌŽŵ/ƚŽƚĂůƐh^ΨϯϮϳŵŝůůŝŽŶ͕ĂŶĚƚŚĞĨŝŶĂŶĐŝŶŐĂŐƌĞĞŵĞŶƚĞƐƚĂďůŝƐŚĞƐĂŶΗ>ŽĂŶΗ
ŝŶƚŚĞƚŽƚĂůĂŵŽƵŶƚŽĨh^ΨϭϰϳŵŝůůŝŽŶĂŶĚĂΗ>ŽĂŶΗŝŶƚŚĞƚŽƚĂůĂŵŽƵŶƚŽĨh^ΨϭϴϬŵŝůůŝŽŶ͕
ǁŝƚŚ Ă ƚŽƚĂů ƚĞƌŵ ŽĨ ϭϳ ǇĞĂƌƐ ŝŶ ƚŚĞ Η >ŽĂŶΗ ĂŶĚ ŽĨ ϭϯ ǇĞĂƌƐ ŝŶ ƚŚĞ Η >ŽĂŶΗ͕ ĂŶĚ Ă ŐƌĂĐĞ
ƉĞƌŝŽĚ ĨŽƌ ƚŚĞ ƉĂǇŵĞŶƚ ŽĨ ŝŶƚĞƌĞƐƚ ĂŶĚ ƉƌŝŶĐŝƉĂů ƵƉ ƚŽ :ƵůǇ ϮϬϭϮ͘ dŚĞ ŝŶŝƚŝĂů ƌĂƚĞƐ ŽĨ ƚŚĞ ͞
>ŽĂŶ͟ĂŶĚ͞>ŽĂŶ͟нϯϱϬďƉƐĂŶĚ>ŝďŽƌнϯϬϬďƉƐ͕ƌĞƐƉĞĐƚŝǀĞůǇ͕ǁŝƚŚƐƚĞƉƵƉƐƚŚƌŽƵŐŚŽƵƚƚŚĞ
ƉĞƌŝŽĚ͘
dŚĞƚŽƚĂůŽƵƚůĂǇŽĨƚŚĞĨŝŶĂŶĐŝŶŐƵƉƚŽĞĐĞŵďĞƌϯϭ͕ϮϬϭϮǁĂƐh^Ψϯϭϵ͘ϴŵŝůůŝŽŶ͘dŚĞĂŵŽƵŶƚ
ĚŝƐďƵƌƐĞĚĐŽŶƐŝƐƚƐŽĨh^Ψϭϰϯ͘ϴŵŝůůŝŽŶŽĨƚŚĞ;͞>ŽĂŶ͟ͿĂŶĚh^Ψϭϳϲ͘ϬŵŝůůŝŽŶŽĨƚŚĞ;͞>ŽĂŶ͟
Ϳ͘
Zd/E'^K&WEZ'/^KZ^/>E/d^/^dZ/hdKZ^
/ŶƉƌŝůϮϬϭϮ͕ƚŚĞ^ƚĂŶĚĂƌĚΘWŽŽƌƐƌĂƚŝŶŐĂŐĞŶĐǇƵƉŐƌĂĚĞĚƚŚĞƌĂƚŝŶŐƐŽĨWƐĐĞůƐĂŝŶΗнΗ
ŽŶ Ă ŐůŽďĂů ƐĐĂůĞ ĂŶĚ ΗнΗ ŽŶ Ă ĚŽŵĞƐƚŝĐ ƐĐĂůĞ ĂŶĚ Ă ƐƚĂďůĞ ŽƵƚůŽŽŬ͘ dŚĞ ƌĂƚŝŶŐ ŽĨ W
ĂŶĚĞŝƌĂŶƚĞ ƌĞŵĂŝŶĞĚ ŽŶ ƚŚĞ ĚŽŵĞƐƚŝĐ ƐĐĂůĞ Ăƚ ΗнΗ ĂŶĚ KƵƚůŽŽŬ ĐŚĂŶŐĞĚ ĨƌŽŵ ƐƚĂďůĞ ƚŽ
ƉŽƐŝƚŝǀĞ͘͘
ĚĚŝƚŝŽŶĂůůǇ͕ŝŶDĂǇϮϬϭϮ͕DŽŽĚǇΖƐŚĂƐŵĂŝŶƚĂŝŶĞĚƚŚĞ/ƐƐƵĞƌƌĂƚŝŶŐƐŽĨWĂŶĚĞŝƌĂŶƚĞĂŶĚ
ŽĨ W ƐĐĞůƐĂ ĂƐ ĂĂϯ ŽŶ ƚŚĞ ŐůŽďĂů ƐĐĂůĞ ĂŶĚ Ăϭ͘ďƌ ŽŶ ƚŚĞ ŶĂƚŝŽŶĂů ƐĐĂůĞ͕ ǁŝƚŚ Ă ͞ƐƚĂďůĞ͟
ƉĞƌƐƉĞĐƚŝǀĞ͘ƐĂƌĞƐƵůƚ͕ƚŚĞĚŝƐƚƌŝďƵƚŽƌƐŽĨWŶĞƌŐŝĂƐĚŽƌĂƐŝůƌĞŵĂŝŶŝŶŝŶǀĞƐƚŵĞŶƚŐƌĂĚĞ
ƌĂƚŝŶŐ ŽŶ ƚŚĞ ŐůŽďĂů ƐĐĂůĞ͘ dŚĞ ƌŝƐŬ ĐůĂƐƐŝĨŝĐĂƚŝŽŶ ĂŐĞŶĐǇ ĂůƐŽ ŵĂŝŶƚĂŝŶĞĚ ƚŚĞ ƌĂƚŝŶŐƐ ŽĨ ƚŚĞ
ŝƐƐƵĞƌŝŶůŽĐĂůĐƵƌƌĞŶĐǇŽĨWŶĞƌŐŝĂƐĚŽƌĂƐŝůĂƚΗĂϭΗŽŶĂŐůŽďĂůƐĐĂůĞĂŶĚĂƚΗĂϮ͘ďƌΗŽŶĂ
ĚŽŵĞƐƚŝĐƐĐĂůĞ͕ǁŝƚŚĂ͞ƐƚĂďůĞ͟ƉĞƌƐƉĞĐƚŝǀĞ͘ĚĚŝƚŝŽŶĂůůǇ͕DŽŽĚǇ͛ƐĂƚƚƌŝďƵƚĞĚƌĂƚŝŶŐƐŽĨŝƐƐƵĞƌ
ŝŶĚŽŵĞƐƚŝĐĐƵƌƌĞŶĐǇŽĨŶĞƌŐĞƐƚŝŶ͞ĂĂϯ͟ĂƚĂŐůŽďĂůƐĐĂůĞĂŶĚ͞Ăϭ͘ďƌ͟ĂƚĂĚŽŵĞƐƚŝĐƐĐĂůĞ
ǁŝƚŚĂ͞ƐƚĂďůĞ͟ŽƵƚůŽŽŬ͘
/Es^dDEd^
dŚĞŝŶǀĞƐƚŵĞŶƚƐŽĨWŶĞƌŐŝĂƐĚŽƌĂƐŝůƚŽƚĂůĞĚZΨϵϳϲ͘ϴŵŝůůŝŽŶŝŶϮϬϭϮ͕ǁŝƚŚĂĚĞĐƌĞĂƐĞŽĨ
ϮϬ͘ϵйŝŶƌĞůĂƚŝŽŶƚŽƚŚĞĨƵŶĚƐĂůůŽĐĂƚĞĚƚŽƚŚĞďƵƐŝŶĞƐƐĂƌĞĂƐŝŶƚŚĞƉƌĞǀŝŽƵƐǇĞĂƌ͘
/ŶǀĞƐƚŵĞŶƚƐ ŝŶ ĚŝƐƚƌŝďƵƚŝŽŶ͕ ŝŶĐůƵĚŝŶŐ ƐƉĞĐŝĂů ŽďůŝŐĂƚŝŽŶƐ͕ ƚŽƚĂůĞĚ ZΨ Ϯϰϳ͘ϳ ŵŝůůŝŽŶ͕ ǁŝƚŚ Ă
ĚĞĐƌĞĂƐĞŽĨϮϱ͘ϬйŽǀĞƌϮϬϭϭ͕ĂŶĚŝŶǀĞƐƚŵĞŶƚƐŝŶŐĞŶĞƌĂƚŝŽŶƚŽƚĂůĞĚZΨϳϮϵ͘ϴŵŝůůŝŽŶ͕ϱϰ͘ϯй
ĂďŽǀĞϮϬϭϭ͘DŽƌĞĚĞƚĂŝůƐĂƌĞĂǀĂŝůĂďůĞŝŶƚŚĞƐƉĞĐŝĨŝĐŝƚĞŵƐŽĨŝŶǀĞƐƚŵĞŶƚƐŝŶĚŝƐƚƌŝďƵƚŝŽŶĂŶĚ
ŐĞŶĞƌĂƚŝŽŶŽĨƚŚŝƐŵĂŶĂŐĞŵĞŶƚƌĞƉŽƌƚ͘
/ŶǀĞƐƚŵĞŶƚƐ;ZΨƚŚŽƵƐĂŶĚͿ
ŝƐƚƌŝďƵƚŝŽŶ
WƐĐĞůƐĂ
'ĞŶĞƌĂƚŝŽŶ
ŶĞƌƉĞŝǆĞ
ŶĞƌŐĞƐƚ
>ĂũĞĂĚŽͬ/ŶǀĞƐƚĐŽ
^ĂŶƚĂ&Ġ
WĞĐĠŵ
:Ăƌŝ
KƚŚĞƌ
dŽƚĂů
ϮϬϭϮ
tĞŝŐŚƚ;йͿ
ϮϬϭϭ
tĞŝŐŚƚ;йͿ
ϮϰϮ͕ϲϳϲ
ϭϬϭ͕Ϭϰϯ
ϭϰϭ͕ϲϯϯ
ϳϮϵ͕ϴϭϲ
ϯ͕ϰϲϮ
ϳϯ͕ϳϰϯ
ϲ͕ϰϴϰ
ϭ͕ϴϵϳ
Ϯϴϰ͕ϴϱϱ
ϯϱϵ͕ϯϳϱ
ϰ͕Ϯϵϲ
ϵϳϲ͕ϳϴϴ
Ϯϰ͘ϴй
ϭϬ͘ϯй
ϭϰ͘ϱй
ϳϰ͘ϳй
Ϭ͘ϰй
ϳ͘ϱй
Ϭ͘ϳй
Ϭ͘Ϯй
Ϯϵ͘Ϯй
ϯϲ͘ϴй
Ϭ͘ϰй
ϭϬϬ͘Ϭй
ϯϮϯ͕ϲϬϳ
ϭϴϰ͕ϴϮϱ
ϭϯϴ͕ϳϴϮ
ϰϳϯ͕ϭϮϮ
ϱ͕ϳϮϳ
ϲϭ͕ϱϴϳ
Ϯϯ͕ϭϱϱ
ϭϲ͕ϳϱϮ
Ϯϵϱ͕ϴϵϰ
ϳϬ͕ϬϬϳ
ϭϬ͕ϵϯϯ
ϴϬϳ͕ϲϲϮ
ϰϬ͘ϭй
ϮϮ͘ϵй
ϭϳ͘Ϯй
ϱϴ͘ϲй
Ϭ͘ϳй
ϳ͘ϲй
Ϯ͘ϵй
Ϯ͘ϭй
ϯϲ͘ϲй
ϴ͘ϳй
ϭ͘ϰй
ϭϬϬ͘Ϭй
ȴŶŶƵĂů
;йͿ
ͲϮϱ͘Ϭй
Ͳϰϱ͘ϯй
Ϯ͘ϭй
ϱϰ͘ϯй
Ͳϯϵ͘ϱй
ϭϵ͘ϳй
ͲϳϮ͘Ϭй
Ͳϴϴ͘ϳй
Ͳϯ͘ϳй
ϰϭϯ͘ϯй
ͲϲϬ͘ϳй
ϮϬ͘ϵй
ϭϬϬ
ϮϬϭϮDE'DEdZWKZd
d,W/d>DZ<d
KŶĞĐĞŵďĞƌϯϭ͕ϮϬϭϮ͕WŶĞƌŐŝĂƐĚŽƌĂƐŝůƐƚŽĐŬǁĂƐƋƵŽƚĞĚĂƚZΨϭϮ͘ϰϵ͕ĐůŽƐŝŶŐƚŚĞǇĞĂƌ
ďǇ ƚŚĞ ĚĞǀĂůƵĂƚŝŽŶ ŽĨ ϰ͘ϯй͕ ƐƵƌƉĂƐƐŝŶŐ ƚŚĞ /͕ ǁŚŝĐŚ ĚƌŽƉƉĞĚ ϭϭ͘ϳй͕ ďƵƚ ƚƵƌŶŝŶŐ ŝŶ
ƉĞƌĨŽƌŵĂŶĐĞ ůŽǁĞƌ ƚŚĂŶ /͕ ǁŚŝĐŚ ǁĂƐ ƵƉ ϳ͘ϰй͘ dŚĞ ŵĂƌŬĞƚ ǀĂůƵĞ ŽĨ ƚŚĞ ŽŵƉĂŶǇ ŽŶ
ĞĐĞŵďĞƌϯϭ͕ϮϬϭϮǁĂƐZΨϱ͘ϵďŝůůŝŽŶ͘
ŽŵƉĂŶǇ ƐĞĐƵƌŝƚŝĞƐ ǁĞƌĞ ƚƌĂĚĞĚ ŽŶ Ăůů ƚƌĂĚŝŶŐ ĚĂǇƐ ŝŶ ϮϬϭϮ͕ ƚŽƚĂůŝŶŐ ŝŶ ϰϰϱ͘ϲ ŵŝůůŝŽŶ ƐŚĂƌĞƐ
ƚƌĂĚĞĚĂŶĚĂĚĂŝůǇĂǀĞƌĂŐĞŽĨϭ͕ϴϭϭ͘ϯƚŚŽƵƐĂŶĚƐŚĂƌĞƐĂŶĚĨŝŶĂŶĐŝĂůǀŽůƵŵĞƚŽƚĂůĞĚZΨϱ͕ϴϭϰ͘ϵ
ŵŝůůŝŽŶǁŝƚŚĂĚĂŝůǇĂǀĞƌĂŐĞŽĨZΨϮϯ͘ϲŵŝůůŝŽŶ͘
KtEZ^,/W^dZhdhZ
KŶ ĞĐĞŵďĞƌ ϯϭ͕ ϮϬϭϮ͕ ƚŚĞ ŽŵƉĂŶǇΖƐ ĐĂƉŝƚĂů ƐƚŽĐŬ ǁĂƐ ƌĞƉƌĞƐĞŶƚĞĚ ŝŶ ĨƵůů ďǇ ϰϳϲ͕ϰϭϱ͕ϲϭϮ
ŶŽŵŝŶĂƚŝǀĞ ŽƌĚŝŶĂƌǇ ƐŚĂƌĞƐ͘ KĨ ƚŚĞ ƚŽƚĂů ŶƵŵďĞƌ ŽĨ ƐŚĂƌĞƐ ƚŚĞƌĞ ǁĞƌĞ ϮϯϮ͕ϲϬϮ͕ϵϮϰ ŝŶ
ĐŝƌĐƵůĂƚŝŽŶ͕ ŝŶ ĐŽŵƉůŝĂŶĐĞ ǁŝƚŚ ƚŚĞ DΘ&Ks^W EĞǁ DĂƌŬĞƚ >ŝƐƚŝŶŐ ZĞŐƵůĂƚŝŽŶƐ ĂŶĚ
ϴϰϬ͕ϲϳϱƐŚĂƌĞƐƌĞŵĂŝŶŝŶƚŚĞƚƌĞĂƐƵƌǇ͘
KZ/EZz^,Z^^W>/d
ƚŶŶƵĂůĂŶĚǆƚƌĂŽƌĚŝŶĂƌǇ'ĞŶĞƌĂůDĞĞƚŝŶŐ;͞'K͟Ϳ͕ŚĞůĚŽŶƉƌŝůϭϬ͕ϮϬϭϮ͕ƚŚĞƉƌŽƉŽƐĂů
ŽĨƐƉůŝƚŽĨŽƌĚŝŶĂƌǇƐŚĂƌĞƐƌĞƉƌĞƐĞŶƚŝŶŐƚŚĞWŶĞƌŐŝĂƐĚŽƌĂƐŝů͛ƐĐĂƉŝƚĂůƐƚŽĐŬ͕ƐŽƚŚĂƚĞĂĐŚ
ŽƌĚŝŶĂƌǇƐŚĂƌĞŝƐƌĞƉƌĞƐĞŶƚĞĚďǇƚŚƌĞĞƐŚĂƌĞƐŽĨƚŚĞƐĂŵĞƚǇƉĞĂŶĚǁŝƚŚƚŚĞƐĂŵĞƉŽůŝƚŝĐĂůĂŶĚ
ĞĐŽŶŽŵŝĐƌŝŐŚƚƐŽĨƚŚĞƐƉůŝƚƐŚĂƌĞ͘
dŚĞƐŚĂƌĞŚŽůĚŝŶŐƉŽƐŝƚŝŽŶƚŽďĞƚĂŬĞŶŝŶƚŽĐŽŶƐŝĚĞƌĂƚŝŽŶĨŽƌƚŚĞĐŝƚĞĚƐŚĂƌĞƐƉůŝƚǁŝƚŚƉƌŝůϭϬ͕
ϮϬϭϮĂƐĂďĂƐĞĚĂƚĞ͘dŚƵƐ͕ƚŚĞŝŶƐĐƌŝďĞĚƐŚĂƌĞŚŽůĚĞƌƐŽŶƚŚĞƌĞĨĞƌĞŶĐĞĚĚĂƚĞŝŶƚŚĞŽŵƉĂŶǇ
ƌĞŐŝƐƚĞƌƐ ǁĞƌĞ ĞŶƚŝƚůĞĚ ƚŽ ƌĞĐĞŝǀĞ ƚŚĞ ƐŚĂƌĞƐ ĂƌŝƐŝŶŐ ĨƌŽŵ ƚŚĞ ƐƉůŝƚ͘ ƵĞ ƚŽ ƚŚĞ ƐƚŽĐŬ ƐƉůŝƚ ďĞ
ĂƉƉƌŽǀĞĚ͕ ƚŚĞ ŽŵƉĂŶǇΖƐ ƐŚĂƌĞ ĐĂƉŝƚĂů ƐƚĂƌƚĞĚ ƚŽ ďĞ ƌĞƉƌĞƐĞŶƚĞĚ ďǇ ϰϳϲ͕ϰϭϱ͕ϲϭϮ ;ĨŽƵƌ
ŚƵŶĚƌĞĚ ƐĞǀĞŶƚǇͲƐŝǆ ŵŝůůŝŽŶ͕ ĨŽƵƌ ŚƵŶĚƌĞĚ ĨŝĨƚĞĞŶ ƚŚŽƵƐĂŶĚ͕ Ɛŝǆ ŚƵŶĚƌĞĚ ƚǁĞůǀĞͿ ƌĞŐŝƐƚĞƌĞĚ͕
ďŽŽŬͲĞŶƚƌǇŽƌĚŝŶĂƌǇƐŚĂƌĞƐǁŝƚŚŶŽƉĂƌǀĂůƵĞ͕ǁŝƚŚŽƵƚĐŚĂŶŐŝŶŐƚŚĞǀĂůƵĞŽĨĐĂƉŝƚĂůƐƚŽĐŬ͘
ĚĚŝƚŝŽŶĂůůǇ͕ ĂƐ ĨƌŽŵ :ĂŶƵĂƌǇ ϳ͕ ϮϬϭϯ͕ ƚŚĞ ŽŵƉĂŶǇ͛Ɛ ƐŚĂƌĞƐ ǁĞƌĞ ŝŶĐůƵĚĞĚ ŝŶ ƚŚĞ ŽǀĞƐƉĂ
ŝŶĚĞǆ͕ ǁŝƚŚ Ă Ϭ͘ϲϰϱй ŝŶƚĞƌĞƐƚ͘ dŚĞ ŽǀĞƐƉĂ /ŶĚĞǆ ;͞/ďŽǀĞƐƉĂ͟Ϳ ŝƐ ŽŶĞ ŽĨ ƚŚĞ ŵŽƐƚ ŝŵƉŽƌƚĂŶƚ
ƉĞƌĨŽƌŵĂŶĐĞŝŶĚŝĐĂƚŽƌƐŽĨƌĂǌŝůŝĂŶƐƚŽĐŬŵĂƌŬĞƚƋƵŽƚĞƐ͘
ZDhEZd/KEK&^,Z,K>Z^
WŶĞƌŐŝĂƐĚŽƌĂƐŝůŚĂƐƚŚĞƉŽůŝĐǇŽĨĚŝƐƚƌŝďƵƚŝŶŐĚŝǀŝĚĞŶĚƐĂŶĚͬŽƌŝŶƚĞƌĞƐƚŽŶŽǁŶĐĂƉŝƚĂůŝŶ
ƚŚĞŵŝŶŝŵƵŵĂŵŽƵŶƚĞƋƵŝǀĂůĞŶƚƚŽϱϬйŽĨƚŚĞŽŵƉĂŶǇΖƐĂĚũƵƐƚĞĚŶĞƚŝŶĐŽŵĞ͕ĐĂůĐƵůĂƚĞĚŝŶ
ĐŽŶĨŽƌŵŝƚǇ ǁŝƚŚ ĂƌƚŝĐůĞ ϭϴϵ ŽĨ ƚŚĞ ŽƌƉŽƌĂƚŝŽŶ >Ăǁ͕ ǁŝƚŚ ƌĂǌŝůŝĂŶ ĂĐĐŽƵŶƚŝŶŐ ƉƌĂĐƚŝĐĞƐ ĂŶĚ
ǁŝƚŚƚŚĞƐƚĂŶĚĂƌĚƐŽĨsD;ĐĐŽƵŶƚƐƌĞĐĞŝǀĂďůĞŽŵŵŝƐƐŝŽŶͿ͘
EŽƚǁŝƚŚƐƚĂŶĚŝŶŐ ƚŚĞ ĂĚŽƉƚŝŽŶ ŽĨ ƚŚĞ ĚŝǀŝĚĞŶĚ ĚŝƐƚƌŝďƵƚŝŽŶ ƉŽůŝĐǇ ƌĞĨĞƌƌĞĚ ƚŽ ĂďŽǀĞ͕ ƚŚĞ
ŽŵƉĂŶǇĐĂŶĚŝƐƚƌŝďƵƚĞĚŝǀŝĚĞŶĚƐĂŶĚͬŽƌŝŶƚĞƌĞƐƚŽŶŽǁŶĐĂƉŝƚĂůŝŶĂƐƵŵůŽǁĞƌƚŚĂŶϱϬйŽĨ
ŝƚƐĂĚũƵƐƚĞĚŶĞƚŝŶĐŽŵĞŝŶĂŶǇǇĞĂƌ͕ǁŚĞŶƌĞƋƵŝƌĞĚƚŽĚŽƐŽďǇůĞŐĂůŽƌƌĞŐƵůĂƚŽƌǇƉƌŽǀŝƐŝŽŶŽƌ͕
ĂůƐŽ͕ǁŚĞŶƌĞĐŽŵŵĞŶĚĂďůĞŝŶǀŝĞǁŽĨƚŚĞĨŝŶĂŶĐŝĂůƐŝƚƵĂƚŝŽŶĂŶĚͬŽƌŽƵƚůŽŽŬŽĨƚŚĞŽŵƉĂŶǇ͕
ŽĨ ƚŚĞ ŵĂĐƌŽĞĐŽŶŽŵŝĐ ĐŽŶĚŝƚŝŽŶƐ͕ ŽĨ ƌĞǀŝĞǁƐ ĂŶĚ ƚĂƌŝĨĨ ĂĚũƵƐƚŵĞŶƚƐ͕ ŽĨ ƌĞŐƵůĂƚŽƌǇ ĐŚĂŶŐĞƐ͕
ŐƌŽǁƚŚƐƚƌĂƚĞŐǇ͕ĐŽŶƚƌĂĐƚƵĂůůŝŵŝƚĂƚŝŽŶƐĂŶĚŽƚŚĞƌĨĂĐƚŽƌƐĐŽŶƐŝĚĞƌĞĚƌĞůĞǀĂŶƚďǇƚŚĞŽĂƌĚŽĨ
ŝƌĞĐƚŽƌƐĂŶĚďǇƚŚĞƐŚĂƌĞŚŽůĚĞƌƐŽĨWŶĞƌŐŝĂƐĚŽƌĂƐŝů͘
ϭϬϭ
ϮϬϭϮDE'DEdZWKZd
KŶƉƌŝůϭϬ͕ϮϬϭϯ͕ƚŚĞŽŵƉĂŶǇΖƐŽĂƌĚŽĨŝƌĞĐƚŽƌƐǁŝůůďĞƐƵďŵŝƚƚŝŶŐƚŽƚŚĞĂƉƉƌŽǀĂůŽĨĂŶ
KƌĚŝŶĂƌǇ'ĞŶĞƌĂůDĞĞƚŝŶŐ;'KͿƚŚĞƉĂǇŵĞŶƚŽĨĚŝǀŝĚĞŶĚƐŽĨZΨϯϳϬ͘ϮŵŝůůŝŽŶ͕ĐŽƌƌĞƐƉŽŶĚŝŶŐ
ƚŽZΨϬ͘ϳϴƉĞƌƐŚĂƌĞŵĂŝŶƚĂŝŶŝŶŐƚŚĞƐŚĂƌĞŚŽůĚĞƌƌĞŵƵŶĞƌĂƚŝŽŶƐƚĂďůĞŝŶƌĞůĂƚŝŽŶƚŽƚŚĞƉƌŝŽƌ
ǇĞĂƌ͘
KZWKZd'KsZEE
KZK&/ZdKZ^
dŚĞŽĂƌĚŽĨŝƌĞĐƚŽƌƐŝƐĨŽƌŵĞĚďǇĞŝŐŚƚŵĞŵďĞƌƐ͕ŝŶĐůƵĚŝŶŐĂŶĞǆĞĐƵƚŝǀĞĚŝƌĞĐƚŽƌĂŶĚĨŽƵƌ
ŝŶĚĞƉĞŶĚĞŶƚ ďŽĂƌĚ ŵĞŵďĞƌƐ͘ dŚĞ ďŽĂƌĚŵĞŵďĞƌƐ ĂƌĞ ĞůĞĐƚĞĚ ďǇ ƚŚĞ 'ĞŶĞƌĂůDĞĞƚŝŶŐ ĨŽƌĂ
ƚĞƌŵ ŽĨ ŽĨĨŝĐĞ ŽĨ ŽŶĞ ǇĞĂƌ͕ ǁŝƚŚ ƉŽƐƐŝďŝůŝƚǇ ŽĨ ƌĞĞůĞĐƚŝŽŶ͘ dŚĞ ďŽĚǇ ŝƐ ƌĞƐƉŽŶƐŝďůĞ ĨŽƌ
ĞƐƚĂďůŝƐŚŝŶŐ ŐĞŶĞƌĂů ďƵƐŝŶĞƐƐ ƉŽůŝĐŝĞƐ ĂŶĚ ŐƵŝĚĞůŝŶĞƐ͕ ŝŶĐůƵĚŝŶŐ ƚŚĞ ůŽŶŐͲƚĞƌŵ ƐƚƌĂƚĞŐǇ͕ ĨŽƌ
ĞůĞĐƚŝŶŐŵĞŵďĞƌƐŽĨƚŚĞŽĂƌĚŽĨǆĞĐƵƚŝǀĞŝƌĞĐƚŽƌƐĂŶĚĨŽƌŽǀĞƌƐĞĞŝŶŐŝƚƐŽƉĞƌĂƚŝŽŶ͕ďĞƐŝĚĞƐ
ƚŚĞĂĐƚŝǀŝƚŝĞƐĚĞĨŝŶĞĚďǇůĂǁĂŶĚŝŶƚŚĞŽŵƉĂŶǇΖƐǇůĂǁƐ͘
W ĚŽ ƌĂƐŝů ŝƐ ďŽƵŶĚ ďǇ ĂƌďŝƚƌĂƚŝŽŶ ŝŶ ƚŚĞ DĂƌŬĞƚ ƌďŝƚƌĂƚŝŽŶ WĂŶĞů͕ ƉƵƌƐƵĂŶƚ ƚŽ ƚŚĞ
ƌďŝƚƌĂƚŝŽŶůĂƵƐĞĐŽŶƚĂŝŶĞĚŝŶŝƚƐǇͲůĂǁƐ͘
dŚĞŽĂƌĚŽĨŝƌĞĐƚŽƌƐŽĨƚŚĞŽŵƉĂŶǇŝƐĐƵƌƌĞŶƚůǇĨŽƌŵĞĚďǇƚŚĞĨŽůůŽǁŝŶŐŵĞŵďĞƌƐ͗
• ŶƚſŶŝŽ >ƵŝƐ 'ƵĞƌƌĂ EƵŶĞƐ DĞǆŝĂ ʹ ŚĂŝƌŵĂŶ ŽĨ ƚŚĞ ŽĂƌĚ ŽĨ ŝƌĞĐƚŽƌƐ ĂŶĚ ŽĨ ƚŚĞ
ŽŵƉĞŶƐĂƚŝŽŶŽŵŵŝƚƚĞĞ
• ŶĂDĂƌŝĂDĂĐŚĂĚŽ&ĞƌŶĂŶĚĞƐʹDĞŵďĞƌĂŶĚŚŝĞĨǆĞĐƵƚŝǀĞKĨĨŝĐĞƌŽĨWŶŽƌĂƐŝů͖
• EƵŶŽ DĂƌŝĂ WĞƐƚĂŶĂ ĚĞ ůŵĞŝĚĂ ůǀĞƐ ʹ ŽĂƌĚ ŵĞŵďĞƌ ĂƉƉŽŝŶƚĞĚ ďǇ ƚŚĞ ĐŽŶƚƌŽůůŝŶŐ
ƐŚĂƌĞŚŽůĚĞƌ͖
• :ŽƌŐĞ DĂŶƵĞů WƌĂŐĂŶĂ ĚĂ ƌƵǌ ĚĞ DŽƌĂŝƐ Ͳ ŽĂƌĚ ŵĞŵďĞƌ ĂƉƉŽŝŶƚĞĚ ďǇ ƚŚĞ ĐŽŶƚƌŽůůŝŶŐ
ƐŚĂƌĞŚŽůĚĞƌ͖
• WĞĚƌŽ^ĂŵƉĂŝŽDĂůĂŶʹ/ŶĚĞƉĞŶĚĞŶƚŽĂƌĚŵĞŵďĞƌ͖
• &ƌĂŶĐŝƐĐŽĂƌůŽƐŽƵƚŝŶŚŽWŝƚĞůůĂʹ/ŶĚĞƉĞŶĚĞŶƚŽĂƌĚDĞŵďĞƌĂŶĚŚĂŝƌŵĂŶŽĨƚŚĞƵĚŝƚ
ŽŵŵŝƚƚĞĞ
• DŽĚĞƐƚŽ ^ŽƵǌĂ ĂƌƌŽƐ ĂƌǀĂůŚŽƐĂ ʹ /ŶĚĞƉĞŶĚĞŶƚ ŽĂƌĚ DĞŵďĞƌ ĂŶĚ ŚĂŝƌŵĂŶ ŽĨ ƚŚĞ
ŽƌƉŽƌĂƚĞ'ŽǀĞƌŶĂŶĐĞĂŶĚ^ƵƐƚĂŝŶĂďŝůŝƚǇŽŵŵŝƚƚĞĞ͖ĂŶĚ
• WĂƵůŽĞƐĂƌ,ĂƌƚƵŶŐ'ŽŵĞƐʹ/ŶĚĞƉĞŶĚĞŶƚŽĂƌĚŵĞŵďĞƌ͘
dŚĞ ŽĂƌĚ ŽĨ ŝƌĞĐƚŽƌƐ ŚĂƐ ƚŚƌĞĞ ĚǀŝƐŽƌǇ ŽŵŵŝƚƚĞĞƐ͕ ǁŚŝĐŚ ĂƌĞ͗ ƵĚŝƚ ŽŵŵŝƚƚĞĞ͕
ZĞŵƵŶĞƌĂƚŝŽŶ ŽŵŵŝƚƚĞĞ ĂŶĚ ^ƵƐƚĂŝŶĂďŝůŝƚǇ ĂŶĚ ŽƌƉŽƌĂƚĞ 'ŽǀĞƌŶĂŶĐĞ ŽŵŵŝƚƚĞĞ͘ dŚĞ
ĐŽŵŵŝƚƚĞĞƐ ĂƌĞ ƌĞƐƉŽŶƐŝďůĞ ĨŽƌ ĂĚǀŝƐŝŶŐ ƚŚĞ ŽĂƌĚ ŽĨ ŝƌĞĐƚŽƌƐ ŝŶ ĚĞĐŝƐŝŽŶƐ ƌĞŐĂƌĚŝŶŐ ƚŚĞ
ƐƵďũĞĐƚ ŵĂƚƚĞƌƐ ƐƵďŵŝƚƚĞĚ͘ ůů ĂƌĞ ĨŽƌŵĞĚ ĞǆĐůƵƐŝǀĞůǇ ďǇ ƚŚƌĞĞ ďŽĂƌĚ ŵĞŵďĞƌƐ ƚŚĂƚ ĐĂŶ
ƌĞƋƵĞƐƚŝŶĨŽƌŵĂƚŝŽŶĂŶĚƐƵŐŐĞƐƚŝŽŶƐĨƌŽŵŵĞŵďĞƌƐŽĨƚŚĞŽĂƌĚŽĨKĨĨŝĐĞƌƐŽƌĨƌŽŵŵĞŵďĞƌƐ
ŽĨŽŵƉĂŶǇΖƐDĂŶĂŐĞŵĞŶƚ͘
ƵĚŝƚŽŵŵŝƚƚĞĞ͗ĞŶƐƵƌĞƐƚŚĞĨƵůĨŝůůŵĞŶƚĂŶĚĐŽƌƌĞĐƚĂƉƉůŝĐĂƚŝŽŶŽĨƚŚĞƉƌŝŶĐŝƉůĞƐĂŶĚŽĨƚŚĞ
ĂĐĐŽƵŶƚŝŶŐƐƚĂŶĚĂƌĚƐ͖ŝƐƐƵĞƐŽƉŝŶŝŽŶƐŽŶƚŚĞĂĐĐŽƵŶƚƐƉƌĞƐĞŶƚĞĚďǇƚŚĞĚŝƌĞĐƚŽƌƐĂŶĚĨŝŶĂŶĐŝĂů
ƐƚĂƚĞŵĞŶƚƐ͖ ĂƉƉƌĂŝƐĞƐ ƚŚĞ ƉĞƌĨŽƌŵĂŶĐĞ ŽĨ ƚŚĞ ŝŶƚĞƌŶĂů ĂŶĚ ĞǆƚĞƌŶĂů ĂƵĚŝƚŽƌƐ͖ ĞƐƚĂďůŝƐŚĞƐ
ƉƌŽĐĞĚƵƌĞƐĨŽƌƚŚĞƌĞĐĞƉƚŝŽŶ͕ƐĂĨĞŬĞĞƉŝŶŐĂŶĚŚĂŶĚůŝŶŐŽĨĐůĂŝŵƐŝŶƚŚĞƐƉŚĞƌĞŽĨƚŚĞŚĂŶŶĞů
ĨŽƌŽŵŵƵŶŝĐĂƚŝŽŶĂŶĚĞŶŽƵŶĐĞŵĞŶƚƐŽĨWŶŽƌĂƐŝů͘dŚĞĐŽŵŵŝƚƚĞĞŝƐƉƌĞƐŝĚĞĚŽǀĞƌďǇ
ƚŚĞ ŝŶĚĞƉĞŶĚĞŶƚ ďŽĂƌĚ ŵĞŵďĞƌ &ƌĂŶĐŝƐĐŽ ĂƌůŽƐ ŽƵƚŝŶŚŽ WŝƚĞůůĂ͕ ǁŝƚŚ ƚŚĞ ƉĂƌƚŝĐŝƉĂƚŝŽŶ ŽĨ
ϭϬϮ
ϮϬϭϮDE'DEdZWKZd
EƵŶŽDĂƌŝĂWĞƐƚĂŶĂĚĞůŵĞŝĚĂůǀĞƐĂŶĚWĞĚƌŽ^ĂŵƉĂŝŽDĂůĂŶ͘dŚĞĐŽŵŵŝƚƚĞĞŚĞůĚƐŝǆ;ϲͿ
ŵĞĞƚŝŶŐƐŝŶϮϬϭϮ͘
ZĞŵƵŶĞƌĂƚŝŽŶ ŽŵŵŝƚƚĞĞ͗ /ƚ ĂĚǀŝƐĞƐ ƚŚĞ ŽĂƌĚ ŽĨ ŝƌĞĐƚŽƌƐ ŝŶ ĚĞĐŝƐŝŽŶƐ ƌĞůĂƚŝŶŐ ƚŽ ƚŚĞ
ƌĞŵƵŶĞƌĂƚŝŽŶƉŽůŝĐŝĞƐŽĨWŶŽƌĂƐŝůĂŶĚŽĨŝƚƐƐƵďƐŝĚŝĂƌŝĞƐ͘/ƚŚĂƐƚǁŽŵĞŵďĞƌƐĂƉƉŽŝŶƚĞĚ
ďǇƚŚĞĐŽŶƚƌŽůůŝŶŐƐŚĂƌĞŚŽůĚĞƌͲŶƚſŶŝŽ>ƵŝƐ'ƵĞƌƌĂEƵŶĞƐDĞǆŝĂ;ĐŚĂŝƌŵĂŶͿĂŶĚEƵŶŽDĂƌŝĂ
WĞƐƚĂŶĂ ĚĞ ůŵĞŝĚĂ ůǀĞƐ Ͳ ĂŶĚ Ă ƚŚŝƌĚ ŝŶĚĞƉĞŶĚĞŶƚ ŵĞŵďĞƌ ;WĞĚƌŽ ^ĂŵƉĂŝŽ DĂůĂŶͿ͘ dŚĞ
ĐŽŵŵŝƚƚĞĞŵĞƚŽŶĐĞ;ϭǆͿŝŶϮϬϭϮ͘
^ƵƐƚĂŝŶĂďŝůŝƚǇ ĂŶĚ ŽƌƉŽƌĂƚĞ 'ŽǀĞƌŶĂŶĐĞ ŽŵŵŝƚƚĞĞ͗ ŝƚ ĨŽƐƚĞƌƐ ƚŚĞ ƉĞƌƉĞƚƵŝƚǇ ŽĨ ƚŚĞ
ŽƌŐĂŶŝǌĂƚŝŽŶ͕ ǁŝƚŚ Ă ůŽŶŐͲƚĞƌŵ ƐƵƐƚĂŝŶĂďůĞ ǀŝƐŝŽŶ ĂŶĚ ĐŽŶƐŝĚĞƌŝŶŐ ƉŽƐƐŝďůĞ ƐŽĐŝĂů ĂŶĚ
ĞŶǀŝƌŽŶŵĞŶƚĂů ĐŚĂŶŐĞƐ͖ ŝƚ ŐƵĂƌĂŶƚĞĞƐ ƚŚĞ ĂĚŽƉƚŝŽŶ ŽĨ ďĞƐƚ ĐŽƌƉŽƌĂƚĞ ŐŽǀĞƌŶĂŶĐĞ ƉƌĂĐƚŝĐĞƐ
ĂŶĚ ƌĞƐƉĞĐƚ ĨŽƌ ĞƚŚŝĐĂů ƉƌŝŶĐŝƉůĞƐ͕ ƚŽ ŝŶĐƌĞĂƐĞ ƚŚĞ ǀĂůƵĞ ŽĨ ƚŚĞ ĐŽŵƉĂŶǇ͕ ĨĂĐŝůŝƚĂƚĞ ĂĐĐĞƐƐ ƚŽ
ĐĂƉŝƚĂů Ăƚ ůŽǁĞƌ ĐŽƐƚƐ ĂŶĚ ƚŚƵƐ͕ ƚŽ ĐŽŶƚƌŝďƵƚĞ ƚŽǁĂƌĚ ƚŚĞ ĞŵƉŽǁĞƌŵĞŶƚ ŽĨ ƚŚĞ 'ƌŽƵƉ͖ ŝƚ ŝƐ
ƌĞƐƉŽŶƐŝďůĞĨŽƌƚŚĞĐƌĞĂƚŝŽŶŽĨƚŚĞƐĞůĨͲĂƉƉƌĂŝƐĂůƉƌŽĐĞƐƐŽĨƚŚĞŽĂƌĚŽĨŝƌĞĐƚŽƌƐ͕ŝŶƚƌŽĚƵĐĞĚ
ŝŶϮϬϭϬ͘dŚĞĐŽŵŵŝƚƚĞĞŝƐƉƌĞƐŝĚĞĚŽǀĞƌďǇƚŚĞŝŶĚĞƉĞŶĚĞŶƚŵĞŵďĞƌDŽĚĞƐƚŽ^ŽƵǌĂĂƌƌŽƐ
ĂƌǀĂůŚŽƐĂǁŝƚŚƚŚĞƉĂƌƚŝĐŝƉĂƚŝŽŶŽĨWĂƵůŽĞƐĂƌ,ĂƌƚƵŶŐ'ŽŵĞƐĂŶĚ:ŽƌŐĞDĂŶƵĞůWƌĂŐĂŶĂĚĂ
ƌƵǌĚĞDŽƌĂŝƐ͘dŚĞĐŽŵŵŝƚƚĞĞŵĞƚŽŶĐĞ;ϭǆͿŝŶϮϬϭϮ͘
dŚĞƌĠƐƵŵĠƐŽĨƚŚĞďŽĂƌĚŵĞŵďĞƌƐĐĂŶďĞĨŽƵŶĚŽŶŽƵƌǁĞďƐŝƚĞǁǁǁ͘ĞĚƉďƌ͘ĐŽŵ͘ďƌͬƌŝ͘
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dŚĞŽĂƌĚŽĨKĨĨŝĐĞƌƐŝƐĨŽƌŵĞĚďǇĨŽƵƌŵĞŵďĞƌƐĞůĞĐƚĞĚďǇƚŚĞŽĂƌĚŽĨŝƌĞĐƚŽƌƐĨŽƌĂƚĞƌŵ
ŽĨ ŽĨĨŝĐĞ ŽĨ ƚŚƌĞĞ ǇĞĂƌƐ͘ /ƚ ŝƐ ƌĞƐƉŽŶƐŝďůĞ ĨŽƌ ŵĂŶĂŐŝŶŐ ďƵƐŝŶĞƐƐ ĂŶĚ ĂĚŽƉƚŝŶŐ ŶĞĐĞƐƐĂƌǇ Žƌ
ĐŽŶǀĞŶŝĞŶƚĂĐƚƐ͕ĂŶĚĨŽƌĞǆĞĐƵƚŝŶŐƚŚĞĚĞĐŝƐŝŽŶƐŽĨƚŚĞŽĂƌĚŽĨŝƌĞĐƚŽƌƐ͘
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ĨŽƌĐĞƵŶƚŝůĞĐĞŵďĞƌϮϬϭϰ͕ǁŝƚŚƚŚĞƉŽƐƐŝďŝůŝƚǇŽĨƌĞĞůĞĐƚŝŽŶͿ͘
ŽŵƉĂŶǇΖƐǆĞĐƵƚŝǀĞŽĂƌĚŝƐĐƵƌƌĞŶƚůǇĨŽƌŵĞĚďǇƚŚĞĨŽůůŽǁŝŶŐŵĞŵďĞƌƐ͗
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KĨĨŝĐĞƌŽĨŝƐƚƌŝďƵƚŝŽŶ͗DŝŐƵĞůEƵŶŽ^ŝŵƁĞƐEƵŶĞƐ&ĞƌƌĞŝƌĂ^ĞƚĂƐ
dŚĞƌĠƐƵŵĠƐŽĨƚŚĞŽĨĨŝĐĞƌƐĐĂŶďĞĨŽƵŶĚĂƚŽƵƌǁĞďƐŝƚĞǁǁǁ͘ĞĚƉďƌ͘ĐŽŵ͘ďƌ/ri
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;/^ͿŽĨDΘ&ŽǀĞƐƉĂ͘
/Ŷ ĂĚĚŝƚŝŽŶ͕ W ŶŽ ƌĂƐŝů ƐƉƌĞĂĚ ƚŚĞ ĐŽŶĐĞƉƚ ŽĨ /ŶŶŽǀĂƚŝŽŶ͕ ƚŚĞ ŝŵƉŽƌƚĂŶĐĞ ŽĨ ƚŚĞ
ƐƵƐƚĂŝŶĂďŝůŝƚǇƌĞƉŽƌƚ͕ƚŽĂůůĞŵƉůŽǇĞĞƐŽĨƚŚĞ'ƌŽƵƉŝŶƌĂǌŝů͕ƚŚƌŽƵŐŚƚŚĞŝŶͲŚŽƵƐĞĞǀĞŶƚǁŚŝĐŚ
ǁĂƐ ĂƚƚĞŶĚĞĚ ďǇ ƚŚĞ ƌĞƉƌĞƐĞŶƚĂƚŝǀĞƐ ŽĨ DΘ&ŽǀĞƐƉĂ ĂŶĚ ,^ 'ůŽďĂů ƐƐĞƚ DĂŶĂŐĞŵĞŶƚ͕
ƚŚĞĐŽŽƌĚŝŶĂƚŽƌŽĨƚŚĞǁŽƌŬŐƌŽƵƉŶĂŵĞĚ͞WƌŝŶĐŝƉůĞƐĨŽƌZĞƐƉŽŶƐŝďůĞ/ŶǀĞƐƚŵĞŶƚ͘͟
ŽŶĐĞƌŶŝŶŐ ƚŚĞ ƚŚĞŵĞ ŽĨ ǁĞĂƚŚĞƌ ĐŚĂŶŐĞƐ͕ ĨŽƌ ƚŚĞ ϮŶĚ ĐŽŶƐĞĐƵƚŝǀĞ ǇĞĂƌ͕ ƚŚĞ ĐĂƌďŽŶŝĐ
ĨŽŽƚƉƌŝŶƚ ŽĨ ƚŚĞ ĞŵƉůŽǇĞĞƐ ŽĨ W ŝŶ ƌĂƐŝů ǁĂƐ ĐĂůĐƵůĂƚĞĚ͗ ϲϳϭ ƉĞŽƉůĞ ĂŶƐǁĞƌĞĚ ƚŽ ŝƚ͕
ĐŽƌƌĞƐƉŽŶĚŝŶŐ ƚŽ ϰϲϬ ƚŽŶƐ ŽĨ KϮĞ ;ǁŚŝĐŚ ĐŽƌƌĞƐƉŽŶĚƐ ƚŽ ϭϭϱϬ ƚƌĞĞƐͿ͘ ƌŽƵŶĚ ϴϰ͘ϭ ƚŽŶƐ ŽĨ
KϮĞ͕ĞŵŝƚƚĞĚĚƵƌŝŶŐƚŚĞ͞ŶĐŽŶƚƌĆŽϮϬϭϮ͟ʹĂŶĞǀĞŶƚŽĨĞŵƉůŽǇĞĞƐŽĨWŝŶƌĂƐŝů͕ĨƌŽŵƚŚĞ
ϭϬϯ
ϮϬϭϮDE'DEdZWKZd
ůŽĐĂƚŝŽŶƐ ŽĨ ^ĆŽ WĂƵůŽ ;ƐƚĂƚĞ ŽĨ ^ĆŽ WĂƵůŽͿ͕ ^ĆŽ :ŽƐĠ ĚŽƐ ĂŵƉŽƐ ;ƐƚĂƚĞ ŽĨ ^ĆŽ WĂƵůŽͿ ĂŶĚ
sŝƚſƌŝĂ;ƐƚĂƚĞŽĨƐƉşƌŝƚŽ^ĂŶƚŽͿʹǁĞƌĞĐŽŵƉĞŶƐĂƚĞĚĨŽƌƚŚĞŐĞŶĞƌĂƚŝŽŶŽĨƌĞŶĞǁĂďůĞĞŶĞƌŐǇĂƚ
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ƚŚĞǀŽůƵŶƚĂƌǇƐǇƐƚĞŵ͘ĚĚŝƚŝŽŶĂůůǇ͕ƚŚĞĐŽŵƉĂŶǇǁĂƐĐŽŶƐŝĚĞƌĞĚŽŶĞŽĨƚŚĞϭϬďĞƐƚĐŽŵƉĂŶŝĞƐ
ŝŶ ŝƐĐůŽƐƵƌĞ ĂŶĚ WĞƌĨŽƌŵĂŶĐĞ ŝŶ ƚŚĞ ĂƌďŽŶ ŝƐĐůŽƐƵƌĞ WƌŽũĞĐƚ ;WͿ͕ ĂŵŽŶŐ ϱϮ ƉĂƌƚŝĐŝƉĂŶƚ
ĐŽŵƉĂŶŝĞƐ͘
dŚĞ/ŶƐƚŝƚƵƚŽWŝƐƌĞƐƉŽŶƐŝďůĞĨŽƌƚŚĞƌĞůĂƚŝŽŶƐŚŝƉŽĨWŶĞƌŐŝĂƐĚŽƌĂƐŝůŝŶƚŚĞĨŝĞůĚƐŽĨ
ĐƵůƚƵƌĞ͕ƐƉŽƌƚĂŶĚĞĚƵĐĂƚŝŽŶǁŝƚŚƌĞůĂƚĞĚƉĂƌƚŝĞƐŝŶƚŚĞĂƌĞĂƐǁŚĞƌĞƚŚĞŽŵƉĂŶǇ͛ƐŝŶĨůƵĞŶĐĞ
ŽƉĞƌĂƚĞƐ ŝŶ͘ dŚĞ ĚĞǀĞůŽƉŵĞŶƚ ŽĨ ƉƌŽũĞĐƚƐ ŝŶĐůƵĚĞƐ Ă ƐĞƌŝĞƐ ŽĨ ǀĂƌŝĂďůĞƐ͕ ŶĂŵĞůǇ ƉĂƌƚŝĐƵůĂƌ
ĨĞĂƚƵƌĞƐŽĨĞĂĐŚůŽĐĂƚŝŽŶĂŶĚĂƐƉĞĐƚĂŶĚŝŶŝƚŝĂƚŝǀĞƐŽĨƚŚĞŽƌŐĂŶŝǌĂƚŝŽŶƐŽĨĐŝǀŝůƐŽĐŝĞƚǇŝŶƚŚĞƐĞ
ůŽĐĂƚŝŽŶƐ͕ƉŽƚĞŶƚŝĂůŝǌŝŶŐƐǇŶĞƌŐŝĞƐďĞƚǁĞĞŶƚŚĞƉĂƌƚŝĞƐ͘
dŚĞ ƉƌŽŐƌĂŵƐ ĂŶĚ ƉƌŽũĞĐƚƐ ŽĨ ƚŚĞ /ŶƐƚŝƚƵƚĞ͕ ƐƵĐŚ ĂƐ ƚŚĞ ͞sŽůƵŶƚĂƌǇ WƌŽŐƌĂŵ͕͟ ͞ĞŶƚŝƐƚĂƐ ĚŽ
Ğŵ͕͟͞WŶĂƐƐĐŽůĂƐ͕͟͞W^ŽůŝĚĄƌŝĂ͕͟ĂŶĚĂůƐŽĂĐƚŝŽŶƐĚĞǀĞůŽƉĞĚŝŶƚŚĞ/ŶŽǀŝƚǇƉƌŽũĞĐƚ͕ŝŶ
ƚŚĞ ĐŝƚǇ ŽĨ ƉĂƌĞĐŝĚĂ ĚŽ EŽƌƚĞ ;ƐƚĂƚĞ ŽĨ ^ĆŽ WĂƵůŽͿ͕ ƌĞŵĂŝŶ ƐŽůŝĚ ĂŶĚ ĂĐŚŝĞǀŝŶŐ ĐŽŶĐƌĞƚĞ
ƌĞƐƵůƚƐ͘ dŚĞ EŽƚŝĐĞ ĨŽƌ ƚŚĞ WƵďůŝĐ ^ĞůĞĐƚŝŽŶ ŽĨ WƌŽũĞĐƚƐ ǁĂƐ ŝŶŶŽǀĂƚĞĚ ŝŶ ϮϬϭϮ͕ ŝŶƚĞŐƌĂƚŝŶŐ
ĐƵůƚƵƌĂů͕ ƐƉŽƌƚ ĂŶĚ ĞĚƵĐĂƚŝŽŶĂů ŝŶǀĞƐƚŵĞŶƚƐ ĨŽƌ ƚŚĞ ƐƚĂƚĞƐ ŽĨ ƐƉŝƌŝƚŽ ^ĂŶƚŽ͕ DĂƚŽ 'ƌŽƐƐŽ ĚŽ
^Ƶů͕^ĂŽWĂƵůŽĂŶĚdŽĐĂŶƚŝŶƐ͘
/Ŷ ϮϬϭϮ͕ ŝŶǀĞƐƚŵĞŶƚƐ ŽĨ ƚŚĞ /ŶƐƚŝƚƵƚŽ W ƚŽƚĂůĞĚ ZΨ ϱ͕ϮϰϬ ƚŚŽƵƐĂŶĚ͕ ZΨ ϰ͕ϭϴϴ ƚŚŽƵƐĂŶĚ
ĚĞƌŝǀĞĚĨƌŽŵĨŝƐĐĂůŝŶĐĞŶƚŝǀĞƐƐƵĐŚĂƐĐƵůƚƵƌĂůĂŶĚƐƉŽƌƚŝŶĐĞŶƚŝǀĞůĂǁƐ͘
^dZd'zEDE'DEd
dŚĞ ǇĞĂƌ ϮϬϭϮ ǁĂƐ ĨƵůů ŽĨ ĐŚĂŶŐĞƐ ĨŽƌ W ŝŶ ƌĂǌŝů͘ ŶĞǁ ĐŽŵƉĂŶǇ ƉƌĞƐŝĚĞŶĐǇ͕ ǁŚŝĐŚ ŝƐ
ĐŽŶŶĞĐƚĞĚƚŽƚŚĞƐƚƌƵĐƚƵƌĂůĐŚĂŶŐĞƐƚŚĂƚƚŚĞĞůĞĐƚƌŝĐĂůĞŶĞƌŐǇƐĞĐƚŽƌŝƐĞǆƉĞƌŝĞŶĐŝŶŐŝŶƌĂǌŝů͕
ǁĂƐĐĂƵƐĞĨŽƌĂƌĞǀŝƐŝŽŶŽĨƚŚĞůŽŶŐͲƚĞƌŵƐƚƌĂƚĞŐŝĐƉůĂŶŶŝŶŐŽĨWŶĞƌŐŝĂƐĚŽƌĂƐŝů͕ǁŝƚŚĂ
ĨŽĐƵƐŽŶϮϬϮϬ͘
EĞǀĞƌƚŚĞůĞƐƐ͕ ƚŚĞ ĐĂƌƌǇŝŶŐ ŽƵƚ ŽĨ ƚŚĞ ƐƚƌĂƚĞŐǇ ĞƐƚĂďůŝƐŚĞĚ ŝŶ ϮϬϬϵ ǁĂƐ ĐŽŶƐŽůŝĚĂƚĞĚ ĂŶĚ ŝƚƐ
ŝŵƉůĞŵĞŶƚĂƚŝŽŶ ŚĂƐ ƐŚŽǁŶ ĐŽŶĐƌĞƚĞ ƌĞƐƵůƚƐ͘ dŚĞ ƚŚƌĞĞ ƐƚƌĂƚĞŐŝĐ ƉŝůůĂƌƐ ʹ ŐƵŝĚĞĚ ŐƌŽǁƚŚ͕
ƐƵƉĞƌŝŽƌ ĞĨĨŝĐŝĞŶĐǇ ĂŶĚĐŽŶƚƌŽůůĞĚ ƌŝƐŬ ʹ ŚĂǀĞ ďĞĐŽŵĞ Ă ĨĂĐƚ͕ǁŝƚŚ Ă ďĂůĂŶĐĞĚ ŝŶĐƌĞĂƐĞ ŝŶƚŚĞ
ŐĞŶĞƌĂƚŝŽŶ ĂŶĚ ĐŽŵŵĞƌĐŝĂůŝǌĂƚŝŽŶ ŽĨ ĞŶĞƌŐǇ͖ ŐƌĞĂƚĞƌ ĞĨĨŝĐŝĞŶĐǇ ŝŶ ĚŝƐƚƌŝďƵƚŝŽŶ ʹ ĨŽƵŶĚĞĚ ŽŶ
ŝŶŶŽǀĂƚŝŽŶĂŶĚŝŶĐƵƐƚŽŵĞƌƐĞƌǀŝĐĞƋƵĂůŝƚǇ͘ůůƚŚŝƐĞŶƐƵƌĞƐƌŝƐŬĐŽŶƚƌŽů͘
KǀĞƌ ƚŚĞ ƉĂƐƚ ĨĞǁ ǇĞĂƌƐ͕ ƚŚĞ ĐŽŵƉĂŶǇ ŚĂƐ ƉƌĞƉĂƌĞĚ ŝƚƐĞůĨ ĨŽƌ ƐƚƌƵĐƚƵƌĞĚ ŐƌŽǁƚŚ͘ dŚĞ
ĂĐƋƵŝƐŝƚŝŽŶ ŽĨ WĂƌƋƵĞƐ ſůŝĐŽƐ ĚĞ ĂŝǆĂ ĚŽ &ĞŝũĆŽ ;ZEͿ ĂŶĚ ŽĨ h, ĂĐŚŽĞŝƌĂ ĂůĚĞŝƌĆŽ ;WͿ͕
ƚŽŐĞƚŚĞƌǁŝƚŚƚŚĞĐŽŶƐŽůŝĚĂƚŝŽŶŽĨƚŚĞĐŽŶƐƚƌƵĐƚŝŽŶƐŽĨh,^ĂŶƚŽŶƚƀŶŝŽĚŽ:ĂƌŝĂŶĚhƐŝŶĂ
dĞƌŵĞůĠƚƌŝĐĂŶĞƌŐŝĂWĞĐĠŵ/͕ŚĂǀĞƐƚƌĞŶŐƚŚĞŶĞĚĐŽŶƐƚƌƵĐƚŝŽŶĐŽŵƉĞƚĞŶĐĞĂŶĚKΘDŝŶƌĂǌŝů͘
dŚŝƐƉƌŽĐĞƐƐŽĨĞǆƉĞƌŝĞŶĐĞĂĐĐƵŵƵůĂƚŝŽŶǁĂƐĐŽŶƐŽůŝĚĂƚĞĚŝŶϮϬϭϮ͘
ĚĚŝƚŝŽŶĂůůǇ͕ƐŽůŝĚĂĐƚŝǀŝƚŝĞƐŝŶƚŚĞĂƐƉĞĐƚƐŽĨŝŶŶŽǀĂƚŝŽŶĂŶĚƐƵƐƚĂŝŶĂďŝůŝƚǇŚĂǀĞĐŽŶƚƌŝďƵƚĞĚƚŽ
ƉƵƚƚŝŶŐWŶŽƌĂƐŝůŝŶĂĨĂǀŽƌĂďůĞƉŽƐŝƚŝŽŶƚŽĐŽŶĨƌŽŶƚƚŚĞĐŚĂůůĞŶŐĞƐŝŶƚŚĞƐĞĐƚŽƌŽǀĞƌƚŚĞ
ĐŽŵŝŶŐ ĚĞĐĂĚĞƐ͘ ŽŶƐŽůŝĚĂƚŝŽŶ ŝŶ ƚŚĞ ĂƌĞĂ ŽĨ /ŶŶŽǀĂƚŝŽŶ ĂŶĚ ZĞƐĞĂƌĐŚ ĂŶĚ ĞǀĞůŽƉŵĞŶƚ
;ZΘͿƉƌŽũĞĐƚƐŝůůƵƐƚƌĂƚĞƚŚŝƐƉŽƐŝƚŝŽŶŝŶŐ͘
dŚĞ ĂůĂŶĐĞĚ ^ĐŽƌĞĐĂƌĚ ;^Ϳ ŚĂƐ ĐŽŶƚŝŶƵĞĚ ƚŽ ďĞ ƚŚĞ ŵĂŶĂŐĞŵĞŶƚ ƚŽŽů ƵƐĞĚ ŝŶ W ƐŝŶĐĞ
ϮϬϬϱ͕ ƌĞǀŝƐĞĚ ǇĞĂƌůǇ͘ /ƚ ŝƐ ƚŚĞ ƚŽŽů ƚŚĂƚ ŐƵŝĚĞƐ ǁŽƌŬĞƌƐΖ ĂĐƚŝŽŶƐ͘ ĚĚŝƚŝŽŶĂůůǇ͕ ƚŚĞ <ĂŝǌĞŶ ĂŶĚ
>ĞĂŶ ŵĞƚŚŽĚŽůŽŐŝĞƐ ĂŶĚ ƚŚĞ /^K ĂŶĚ K,^^ ĐĞƌƚŝĨŝĐĂƚŝŽŶ ƐǇƐƚĞŵƐ ƐƵƉƉŽƌƚ ĞǆĞĐƵƚŝŽŶ ŽĨ ƚŚĞ
ĐŽƌƉŽƌĂƚĞƐƚƌĂƚĞŐǇ͘
dŚĞ ƌĞƐƵůƚƐ ŽĨ ĐĂƌƌǇŝŶŐ ŽƵƚ >E ŵĞƚŚŽĚŽůŽŐǇ ŝŶ ƚĞĐŚŶŝĐĂů ĂŶĚ ĐŽŵŵĞƌĐŝĂů ĂƌĞĂƐ ŽĨ W
ĚŝƐƚƌŝďƵƚŽƌƐ ŝŶ ƌĂǌŝů ŚĂǀĞ ƐŚŽǁŶ Ă ĚŝĨĨĞƌĞŶƚŝĂů ƌĞŐĂƌĚŝŶŐ ŝƚƐ ĞǆĞĐƵƚŝŽŶ ŝŶ ŽƚŚĞƌ ŐĞŽŐƌĂƉŚŝĐĂů
ϭϬϰ
ϮϬϭϮDE'DEdZWKZd
ĂƌĞĂƐ͘ &Žƌ ĞǆĂŵƉůĞ͕ ƚŚĞ ĐĂƐĞ ŽĨ ŝŵƉůĞŵĞŶƚĂƚŝŽŶ ŽĨ ƚŚĞ ŵĞƚŚŽĚŽůŽŐǇ ŝŶ ĚŝƐƚƌŝďƵƚŝŽŶ
ŵĂŝŶƚĞŶĂŶĐĞĐĞŶƚĞƌƐǁŽŶƌĞĐŽŐŶŝƚŝŽŶŝŶƚŚĞϭϬƚŚĞĚŝƚŝŽŶŽĨ>ĞĂŶ^Ƶŵŵŝƚ>ĂƚŝŶŵĞƌŝĐĂ͘ůƐŽ͕
ŝŶϮϬϭϮƋƵĂƌƚĞƌůǇĂƵĚŝƚƐǁĞƌĞĐĂƌƌŝĞĚŽƵƚƚŽƐĞĞŝĨƚŚĞƉƌŽĐĞƐƐĞƐƚŚĂƚŚĂĚďĞĞŶŵŽĚŝĨŝĞĚƐƚŝůů
ĂĚŚĞƌĞĚƚŽƚŚĞŵĞƚŚŽĚŽůŽŐǇ͘dŚĞƌĞŝƐƐƚŝůůĂǀŝƐŝŽŶĨŽƌƐƉƌĞĂĚŝŶŐĂŶĚĐĂƌƌǇŝŶŐŽƵƚƚŚĞƉƌŽĐĞƐƐ͕
ƐĞĞŬŝŶŐŝƚƐƐĞůĨͲƐƵƐƚĞŶĂŶĐĞŝŶŽƌĚĞƌƚŽƌĞĂĐŚĂůĞǀĞůŽĨŵĂƚƵƌŝƚǇŶĞĐĞƐƐĂƌǇƐŽƚŚĂƚƚŚĞƉƌŽĐĞƐƐ
ŵĂǇŽĐĐƵƌŶĂƚƵƌĂůůǇŝŶĂƐǇƐƚĞŵŽĨĐŽŶƚŝŶƵĂůŝŵƉƌŽǀĞŵĞŶƚ͘
W ƐĐĞůƐĂ ĐĞƌƚŝĨŝĞĚ Ϯ ƐƵďƐƚĂƚŝŽŶƐ ĂĐĐŽƌĚŝŶŐ ƚŽ /^K ϭϰϬϬϭ ;ĞŶǀŝƌŽŶŵĞŶƚĂůͿ ŶŽƌŵƐ͕ ǁŚĞƌĞĂƐ
ƚŚĞŽƚŚĞƌĐŽŵƉĂŶŝĞƐŽĨ'ƌƵƉŽWŶŽƌĂƐŝůŚĂǀĞŵĂŝŶƚĂŝŶĞĚƚŚĞŝƌĐĞƌƚŝĨŝĐĂƚŝŽŶƐĨƌŽŵƉƌĞǀŝŽƵƐ
ǇĞĂƌƐ͕ƐƵĐŚĂƐ/^KϭϰϬϬϭ͕K^,ϭϴϬϬϭ;ŽĐĐƵƉĂƚŝŽŶĂůŚĞĂůƚŚĂŶĚƐĂĨĞƚǇͿĂŶĚ/^KϵϬϬϭ;ƋƵĂůŝƚǇͿ͕
ĂĐĐŽƌĚŝŶŐƚŽƚŚĞƐĐŽƉĞŽĨĞĂĐŚŽĨƚŚĞŵ͘
dŚĞ ĨŽůůŽǁͲƵƉ ŽĨ ƚŚĞ ƐƚƌĂƚĞŐŝĞƐ ;ĚŝƐƚƌŝďƵƚŝŽŶ͕ ŐĞŶĞƌĂƚŝŽŶ ĂŶĚ ƐĂůĞƐͿ ƚĂŬĞ ƉůĂĐĞ ĚƵƌŝŶŐ ƚŚĞ
ƐƚƌĂƚĞŐŝĐ ĐŽŶƚƌŽůƐ ŵĞĞƚŝŶŐƐ ŚĞůĚ ĞǀĞƌǇ ƋƵĂƌƚĞƌ ĨŽƌ ƚŚĞ ƉƵƌƉŽƐĞ ŽĨ ŝŶƚĞŐƌĂƚŝŶŐ ĂŶĚ ĚŝƐĐůŽƐŝŶŐ
ŽďũĞĐƚŝǀĞƐ ĂŶĚ ŐŽĂůƐ ĂŵŽŶŐ ƚŚĞ ŵĂŶĂŐĞŵĞŶƚ͘ KƉĞŶ ƚŽ Ăůů ĚŝƐƚƌŝďƵƚŽƌ ĐŽŵƉĂŶǇ ǁŽƌŬĞƌƐ͕
ƌŽĂĚƐŚŽǁƐ ƉƌĞƐĞŶƚĞĚ ĞǀĞƌǇ Ɛŝǆ ŵŽŶƚŚƐ ƉƌĞƐĞŶƚ ƚŚĞ ƐƚƌĂƚĞŐŝĐ ƉůĂŶŶŝŶŐ ŝŶĐůƵĚŝŶŐ ŽďũĞĐƚŝǀĞƐ͕
ƉƌŝŽƌŝƚŝĞƐĂŶĚŵĂŝŶƌĞƐƵůƚƐŽĨƚŚĞŵĂŶĂŐĞŵĞŶƚŝŶĚŝĐĂƚŽƌƐ͕ǁŝƚŚĂǀĞƌǇƉŽƐŝƚŝǀĞĨĞĞĚďĂĐŬĨƌŽŵ
ƚŚĞ ƉĂƌƚŝĐŝƉĂŶƚƐ͘ ŵŽŶƚŚůǇ ƐƚƌĂƚĞŐŝĐ Ͳ ŽƉĞƌĂƚŝŽŶƐ ŐĞƚ ƚŽŐĞƚŚĞƌ ŝƐ ŚĞůĚ ƚŽ ŵŽŶŝƚŽƌ ƐĂůĞƐ͕
ƚĞĐŚŶŝĐĂůĂŶĚĨŝŶĂŶĐŝĂůŝŶĚŝĐĂƚŽƌƐŽĨƚŚĞƵƐŝŶĞƐƐƵŶŝƚƐ;hEͿ͘
Z>d/KE^,/Wt/d,h^dKDZ^
/Ŷ ϮϬϭϮ͕ ĂŶ ŝŶƚĞŶƐĞ ĞŶĚĞĂǀŽƌ ŐĞĂƌĞĚ ƚŽ ƌĞĚƵĐŝŶŐ ĐƵƐƚŽŵĞƌ ĐŽŵƉůĂŝŶƚƐ ǁĂƐ ĐĂƌƌŝĞĚ ŽƵƚ͘ /ƚ
ŝŶǀŽůǀĞĚƚŚĞĂƌĞĂƐŽĨĚŝƐƚƌŝďƵƚŽƌŽƉĞƌĂƚŝŽŶƐ͕ƐĞĞŬŝŶŐƚŽďĞƚƚĞƌŝĚĞŶƚŝĨǇƚŚĞĐĂƵƐĞƐŽĨƚŚĞŵĂŝŶ
ƉƌŽďůĞŵƐ ŝŶ ƚŚĞ ĐƵƌƌĞŶƚ ƉƌŽĐĞĚƵƌĞƐ ŽĨ ƚŚĞ ŽƌŐĂŶŝǌĂƚŝŽŶ͘ tŽƌŬ ŐƌŽƵƉƐ ĂŶĚ Ă ƐƉĞĐŝĨŝĐ
ĚĞƉĂƌƚŵĞŶƚ ǁĞƌĞ ĐƌĞĂƚĞĚ ƚŽ ĚĞĂů ǁŝƚŚ ĐŽŵƉůĂŝŶƚƐ͕ ĂůŽŶŐ ǁŝƚŚ ƌĞƉůĂĐŝŶŐ ƚŚĞ ĐĂůů ĐĞŶƚĞƌ
ĨƵƌŶŝƐŚĞƌ͘
dŚĞƐĞ ŝŶŝƚŝĂƚŝǀĞƐ ůĞĚ ƚŽ Ă ƌĞĚƵĐƚŝŽŶ ŝŶ ĐŽŵƉůĂŝŶƚƐ ƚŽ E>͛Ɛ ŽŵďƵĚƐŵĞŶ ĂŶĚ ƚŽ ŽƵƌ
ŝƐƚƌŝďƵƚŽƌƐ ʹ ŝŶ ƚŚŝƐ ůĂƚƚĞƌ ĐĂƐĞ͕ ĂƌŽƵŶĚ ϰϮй͘ dŚĞ WĞƌĐĞŝǀĞĚ YƵĂůŝƚǇ ^ĂƚŝƐĨĂĐƚŝŽŶ /ŶĚĞǆ ŚĂƐ
ŝŶĚŝĐĂƚĞĚĂϭϮйŝŶĐƌĞĂƐĞŝŶƉĞƌĨŽƌŵĂŶĐĞ͕ƌĞŵĂŝŶŝŶŐĂďŽǀĞϴϰй͘/ŶƌĞƐĞĂƌĐŚďǇZ͕W
ĂŶĚĞŝƌĂŶƚĞ ŵŽǀĞĚ ƵƉ ϭϰ ƉůĂĐĞƐ ĐŽŵƉĂƌĞĚ ƚŽ ϮϬϭϭ͕ ƌĞĂĐŚŝŶŐ ϲƚŚ ƉůĂĐĞ ĂŵŽŶŐ ĚŝƐƚƌŝďƵƚŽƌƐ
ǁŝƚŚŵŽƌĞƚŚĂŶϱϬϬ͕ϬϬϬĐƵƐƚŽŵĞƌƐ͘WƐĐĞůƐĂƌŽƐĞϮƉůĂĐĞƐĂŶĚŽĐĐƵƉŝĞƐϭϬƚŚƉůĂĐĞ͘/ŶƚŚĞ
ƐĂŵĞǁĂǇ͕ƚŚĞƌĞŚĂƐďĞĞŶĂƌĞĚƵĐƚŝŽŶŝŶƚŚĞĂŶĚ&ŝŶĚŝĐĂƚŽƌƐ͕ďŽƚŚƌĞŵĂŝŶŝŶŐďĞůŽǁƚŚĞ
ŐŽĂůƐƐĞƚďǇE>͘
ŶŽƚŚĞƌ ŝŵƉŽƌƚĂŶƚ ƉƌŽŐƌĂŵ ʹ ĨŝŐŚƚŝŶŐ ƚĞĐŚŶŝĐĂů ĂŶĚ ĐŽŵŵĞƌĐŝĂů ůŽƐƐĞƐ ʹ ŚĂƐ ƚǁŽŵĂŝŶ ĨŽĐĂů
ƉŽŝŶƚƐ͘dŚĞĨŝƌƐƚƉŽŝŶƚĂĚĚƌĞƐƐĞƐĨƌĂƵĚƵůĞŶƚĐŽŶƐƵŵĞƌƐʹƚŚŽƐĞƐŵĂůůĐŽŵŵĞƌĐŝĂůĂŶĚŝŶĚƵƐƚƌŝĂů
ĞƐƚĂďůŝƐŚŵĞŶƚƐƚŚĂƚƐƚĞĂůĞŶĞƌŐǇ͘/ŶƚŚŝƐĐĂƐĞ͕ƚŚĞŶĞǁŵĞĂƐƵƌŝŶŐƐǇƐƚĞŵŵĂŬĞƐƚŚĞĨƚĚŝĨĨŝĐƵůƚ
ĂŶĚŝƚƉĞŶĂůŝǌĞƐƚŚĞĐŽŶƐƵŵĞƌďǇƵƐŝŶŐŵŽĚĞƌŶƚĞĐŚŶŽůŽŐǇĂŶĚĞƋƵŝƉŵĞŶƚŝŶĐŽŶũƵŶĐƚŝŽŶǁŝƚŚ
ŝŶƚĞůůŝŐĞŶƚ ƐƚƌĂƚĞŐŝĞƐ ƚŽ ĐŽŵďĂƚ ůŽƐƐĞƐ͘ &Žƌ ĞǆĂŵƉůĞ͕ ŝŶƐƚĂůůŝŶŐ ĞŶĞƌŐǇ ŵĞĂƐƵƌŝŶŐ ĚĞǀŝĐĞƐ ŝŶ Ă
ůŽĐŬĞĚďŽǆŽŶůĂŵƉƉŽƐƚƐŝŶƐƚĞĂĚŽĨĂƚƚŚĞĐŽŵŵĞƌĐŝĂůƉŽŝŶƚ͕ŵĂŬĞƐĨƌĂƵĚĚŝĨĨŝĐƵůƚ͘DŽƌĞŽǀĞƌ͕
ĂŶ ĂůĂƌŵ ƐǇƐƚĞŵ ŝƐ ŝŶƐƚĂůůĞĚ ŝŶ ƚŚĞ ďŽǆ͕ Ă ƐǇƐƚĞŵǁŚŝĐŚ͕ ŝŶ ĐĂƐĞŽĨ ĂŶ ĂƚƚĞŵƉƚƚŽ ĨŽŽů ŝƚ͕ ƚŚĞ
ŵĞĂƐƵƌŝŶŐ ĐĞŶƚĞƌ ŽĨ ƚŚĞ ĚŝƐƚƌŝďƵƚŽƌƐ ŝƐ ĐŽŵŵƵŶŝĐĂƚĞĚ ŝŵŵĞĚŝĂƚĞůǇ͕ ǁŚŝĐŚ ĂůůŽǁƐ ĨŽƌ ĨŝĞůĚ
ƚĞĂŵƐƚŽďĞƐĞŶƚƚŽƚŚĞƉůĂĐĞŽĨŽĐĐƵƌƌĞŶĐĞ͘
dŚĞ ŽƚŚĞƌ ƉŽŝŶƚ ŝƐ ƚŚĞ ůŽǁ ŝŶĐŽŵĞ ĐŽŶƐƵŵĞƌ͕ǁŚŽ ŝƐ ŝŶ ĚĞĨĂƵůƚ ŽƌǁŚŽĐŽŵŵŝƚƐ ĨƌĂƵĚ͕ ŽĨƚĞŶ
ŽƵƚŽĨŶĞĐĞƐƐŝƚǇ͘/ŶƚŚŝƐĐĂƐĞ͕ƚŚĞƐƚƌĂƚĞŐǇŽĨWŶŽƌĂƐŝůŝƐƚŽĂĚũƵƐƚƚŚĞĐŽŶƐƵŵƉƚŝŽŶŽĨƚŚŝƐ
ĐůĂƐƐƐŽƚŚĂƚƚŚĞŝƌĂĐĐŽƵŶƚƐƐƚĂǇǁŝƚŚŝŶƚŚĞĨĂŵŝůǇďƵĚŐĞƚ͘dŚŝƐŝƐĂĐĐŽŵƉůŝƐŚĞĚďǇĐŽŵďŝŶŝŶŐ
ůŽǁ ĐŽŶƐƵŵƉƚŝŽŶ ǁŝƚŚ ƚŚĞ ƵƚŝůŝǌĂƚŝŽŶ ŽĨ ĞĨĨŝĐŝĞŶƚ ŚŽƵƐĞŚŽůĚ ĂƉƉůŝĂŶĐĞƐ ĂŶĚ ƐŽĐŝĂů ƚĂƌŝĨĨ͘ dŚŝƐ
ĂĐƚŝǀŝƚǇŵĂŬĞƐƚŚĞĐŽŶƐƵŵĞƌĨĞĞůŵŽƌĞůŝŬĞĂĐŝƚŝǌĞŶĨŽƌŚĂǀŝŶŐĂŶĂĐĐŽƵŶƚŝŶƚŚĞŝƌŶĂŵĞ͕ĂŶĚŝƚ
ϭϬϱ
ϮϬϭϮDE'DEdZWKZd
ƐƚŝŵƵůĂƚĞƐƚŚĞŵƚŽĐŽŶƐƵŵĞĞŶĞƌŐǇůĞŐĂůůǇĂŶĚƐĂĨĞůǇ͘&ŽƌƚŚĞĐŽŵƉĂŶǇ͕ŝŶďŽƚŚĐĂƐĞƐƚŚĞƌĞŝƐ
ĂƌĞĚƵĐƚŝŽŶŝŶůŽƐƐĞƐĂŶĚĚĞĨĂƵůƚƐ͘
ƚ W ŽŵĞƌĐŝĂůŝǌĂĚŽƌĂ͕ ƚŚĞ ƉŽƐƚͲƐĂůĞƐ ĚĞƉĂƌƚŵĞŶƚ ǁĂƐ ĐƌĞĂƚĞĚ ƚŽ ƉƌŽŵŽƚĞ ŵŽƌĞ
ŝŶĨŽƌŵĂƚŝŽŶĨŽƌĐƵƐƚŽŵĞƌƐ͛ďƵƐŝŶĞƐƐŵĂŶĂŐĞŵĞŶƚ͕ƚŚĞƌĞďǇŝŶĐƌĞĂƐŝŶŐƚŚĞůĞǀĞůŽĨŝŶƚĞƌĂĐƚŝŽŶ
ǁŝƚŚ ƚŚĞŵ͘ dŚĞ ŽďũĞĐƚŝǀĞ ŝƐ ƚŽ ƉƌŽǀŝĚĞ ĐƵƐƚŽŵĞƌƐ ǁŝƚŚ ĚĞƚĂŝůƐ ĂďŽƵƚ ǁŚĂƚ ƚŚĞǇ ĂƌĞ ďƵǇŝŶŐ͘
dŚĞƌĞ ŝƐ ŝŶĨŽƌŵĂƚŝŽŶ ĂďŽƵƚ ĐŽŶƐƵŵƉƚŝŽŶ ĞǆĐŚĂŶŐĞ͕ ǁŚŝĐŚ ĞŶĂďůĞƐ ƚŚĞ ĐƵƐƚŽŵĞƌ ƚŽ ĚŽ
ƐŝŵƵůĂƚŝŽŶƐ ĂŶĚ ĐŽƐƚͬďƵĚŐĞƚ ƉƌŽũĞĐƚŝŽŶƐ͕ ďĞƐŝĚĞƐ ŽƚŚĞƌ ŵĞĐŚĂŶŝƐŵƐ ƚŚĂƚ ĨĂĐŝůŝƚĂƚĞ Ă ĨƵůůĞƌ
ƵŶĚĞƌƐƚĂŶĚŝŶŐŽĨƚŚĞƐƵďũĞĐƚ͘ŽŶƐĞƋƵĞŶƚůǇ͕ƚŚĞĐƵƐƚŽŵĞƌƵŶĚĞƌƐƚĂŶĚƐƚŚĂƚWŝƐĂĐŽŵƉĂŶǇ
ƚŚĂƚ͕ ŝŶ ĨĂĐƚ͕ ŝƐ ĐŽŶĐĞƌŶĞĚ ĂďŽƵƚ ŝƚƐ ĐƵƐƚŽŵĞƌƐ͕ ƚŚĂƚ ŝƚ ŝƐ ƚƌĂŶƐƉĂƌĞŶƚ ĂŶĚ ƚŚĂƚ ŝƚ ƉƌŽǀŝĚĞƐ
ŶĞĐĞƐƐĂƌǇŝŶĨŽƌŵĂƚŝŽŶĨŽƌŵĂŶĂŐŝŶŐŝƚƐďƵƐŝŶĞƐƐ͘
WKW>DE'DEd
ŵŽŶŐ ƚŚĞ ŵĂŝŶ ĂĐƚŝǀŝƚŝĞƐ ĚĞǀĞůŽƉĞĚ ĨŽƌ ƚŚĞ ,ƵŵĂŶ ZĞƐŽƵƌĐĞƐ ĚĞƉĂƌƚŵĞŶƚ ŝŶ ϮϬϭϮ͕ ŝƚƐ
ĞĚƵĐĂƚŝŽŶĂů ĂŶĚ ĐĂƉĂĐŝƚǇ ƉƌŽŐƌĂŵƐ ŚĂǀĞ ƐƚŽŽĚ ŽƵƚ͕ ƐƵĐŚ ĂƐ ŝƚƐ ůĞĐƚƌŝĐŝĂŶƐ͛ ^ĐŚŽŽů͕ ŝƚƐ
'ĞŶĞƌĂƚŝŽŶ ^ĐŚŽŽů͕ ĂŶĚ ǁĞůĨĂƌĞ ŝŶŝƚŝĂƚŝǀĞƐ ŐĞĂƌĞĚ ƚŽ ĐŽǁŽƌŬĞƌƐ͕ ƐƵĐŚ ĂƐ ƚŚĞ ͞ŽŶĐŝůŝĂƌ͟
;ŽŶĐŝůŝĂƚŽƌǇͿWƌŽŐƌĂŵ͘
dŚĞ ůĞĐƚƌŝĐŝĂŶƐ͛ ^ĐŚŽŽů ŝƐ Ă ƉĂƌƚŶĞƌƐŚŝƉ ǁŝƚŚ Ê/ ĨŽƌ ƚŚĞ ĞĚƵĐĂƚŝŽŶ ŽĨ ƵŶĞŵƉůŽǇĞĚ
ŝŶĚŝǀŝĚƵĂůƐ ŝŶ ĐŽŵŵƵŶŝƚŝĞƐ ǁŚĞƌĞ W ŶŽ ƌĂƐŝů ĨƵŶĐƚŝŽŶƐ͘ /ƚ ĞŶƚĂŝůƐ ĂƌŽƵŶĚ ϰϴϬ ŚŽƵƌƐ ŽĨ
ƚƌĂŝŶŝŶŐŽǀĞƌϰŵŽŶƚŚƐ͕ĂƉĞƌŝŽĚŝŶǁŚŝĐŚWŐƵĂƌĂŶƚĞĞƐĐŽƵƌƐĞĐŽƐƚƐ͘/ŶϮϬϭϮ͕ƚŚĞƌĞǁĞƌĞϲ
ĐŽƵƌƐĞƐ Ăƚ W ĂŶĚĞŝƌĂŶƚĞ ĂŶĚ ϰ Ăƚ W ƐĐĞůƐĂ͘ ƵĞ ƚŽ ƌĞƐƚƌƵĐƚƵƌŝŶŐ͕ ƚŚĞ ƚĞĐŚŶŝĐĂů
ĚĞƉĂƌƚŵĞŶƚƐ ŽĨ W ĂŶĚĞŝƌĂŶƚĞ ǁĞƌĞ ĂďůĞ ƚŽ ƚĂŬĞ ŝŶ ϭϬϬй ŽĨ ƚŚŽƐĞ ǁŚŽ ŚĂĚ ŐƌĂĚƵĂƚĞĚ͘ /Ĩ
W ĐĂŶŶŽƚ ŚŝƌĞ ĞǀĞƌǇŽŶĞ͕ ƚŚŝƌĚ ƉĂƌƚŝĞƐ ŵĂǇ ŚŝƌĞ ƚŚĞ ƉƌŽĨĞƐƐŝŽŶĂůƐ ǁŚŽ ƚŽŽŬ ƉĂƌƚ ŝŶ ƚŚĞ
ƉƌŽŐƌĂŵďĞĐĂƵƐĞƐƵĐŚƉƌŽĨĞƐƐŝŽŶĂůƐŚĂǀĞĂůƌĞĂĚǇďĞĞŶƚƌĂŝŶĞĚĂĐĐŽƌĚŝŶŐƚŽWƐƚĂŶĚĂƌĚƐ͘
ŽŶĐĞƌŶŝŶŐ ƚŚĞ 'ĞŶĞƌĂƚŝŽŶ ^ĐŚŽŽů͕ ƚŚĞ ĨŽĐƵƐ ŝƐ ƚŽ ŝŶĐƌĞĂƐĞ ŽƉĞƌĂƚŽƌƐ͛ ĂďŝůŝƚŝĞƐ ƚŽ ĂĐƚ ŝŶ ƚŚĞ
ŝŶƚĞŐƌĂƚĞĚ ŵĂŝŶƚĞŶĂŶĐĞ ĂŶĚ ŽƉĞƌĂƚŝŽŶ͘ dŚŝƐ ŝƐ ĂŶ ŝŶŶŽǀĂƚŝŽŶ ďĞĐĂƵƐĞ ƚŚĞƌĞ ĂƌĞ ǀĞƌǇ ĨĞǁ
ŽƉĞƌĂƚŝŽŶĂůŵŽĚĞůƐŝŶǁŚŝĐŚĂŵĂŝŶƚĞŶĂŶĐĞƉƌŽĨĞƐƐŝŽŶĂůŝƐƚƌĂŝŶĞĚƚŽŽƉĞƌĂƚĞ͘dŚŝƐƚƌĂŝŶŝŶŐŝƐ
ďŝĂŶŶƵĂůĂŶĚŝƐŚĞůĚĨŽƌĂůůŽƉĞƌĂƚŽƌƐ͕ŝŶĐƌĞĂƐŝŶŐĞĂĐŚŽŶĞ͛ƐĂďŝůŝƚǇƚŽŽƉĞƌĂƚĞĂŶĚĂůƐŽƚŽŵĂŬĞ
ĐŽƌƌĞĐƚŝǀĞŵĂŝŶƚĞŶĂŶĐĞ͘
dŚĞ ŽŶĐŝůŝĂƚŽƌǇWƌŽŐƌĂŵ͕ǁŚŽƐĞ ƉƵƌƉŽƐĞ ŝƐƚŽĐƌĞĂƚĞ ĐŽŶĚŝƚŝŽŶƐ ĨŽƌ ĐŽǁŽƌŬĞƌƐ ƚŽ ĂƚƚĂŝŶ ƚŚĞ
ďĞƐƚďĂůĂŶĐĞďĞƚǁĞĞŶƚŚĞŝƌƉƌŽĨĞƐƐŝŽŶĂůĂŶĚƉĞƌƐŽŶĂůůŝǀĞƐ͕ĞŶĐŽƵƌĂŐĞƐƐƉŽƌƚƐĂŶĚǁŽƌŬƉůĂĐĞ
ŐǇŵŶĂƐƚŝĐƐ͕ ĂŶĚ ŵĂŬĞƐ ƉƐǇĐŚŽůŽŐŝĐĂů ĂŶĚ ůĞŐĂů ĐŽƵŶƐĞůŝŶŐ ĂǀĂŝůĂďůĞ ŝĨ ƌĞƋƵĞƐƚĞĚ ďǇ ĂŶ
ĞŵƉůŽǇĞĞ͘dŚĞƌĞŝƐĂůƐŽĂƉŝůůĂƌŽĨƐĞƌǀŝĐĞƐĂǀĂŝůĂďůĞŽŶƚŚĞĐŽŵƉĂŶǇ͛ƐŝŶƚƌĂŶĞƚ͕ůŝƐƚŝŶŐǀĂƌŝŽƵƐ
ƉĂƌƚŶĞƌƐ͕ ǁŚŽ ŐŝǀĞ ĚŝƐĐŽƵŶƚƐ ƚŽ ĞŵƉůŽǇĞĞƐ Ăƚ ŚĂŝƌ ƐĂůŽŶƐ͕ ůĂƵŶĚƌŽŵĂƚƐ͕ ƐƵŵŵĞƌ ĐĂŵƉƐ ĨŽƌ
ĐŚŝůĚƌĞŶ͕ĞƚĐ͘
/ŶŶŽǀĂƚŝŽŶŝƐĂĐŽŵƉĞƚĞŶĐĞƐƚƌĂƚĞŐǇĨŽƌWŶŽƌĂƐŝů͛ƐďƵƐŝŶĞƐƐďĞĐĂƵƐĞƚŚĞĐŽŵƉĂŶǇǁĂŶƚƐ
ƚŽďĞĂĐŬŶŽǁůĞĚŐĞĚĂƐĂŶŝŶŶŽǀĂƚŝǀĞĂŶĚƐƵƐƚĂŝŶĂďůĞĐŽŵƉĂŶǇ͘dŚĞ/ŶŶŽǀĂƚŝŽŶŵŽĚƵůĞŽĨƚŚĞ
>ĞĂĚĞƌƐŚŝƉ ĞǀĞůŽƉŵĞŶƚ WƌŽŐƌĂŵ ƐĞĞŬƐ ƚŽ ǁŽƌŬ ƚŚƌŽƵŐŚ ƉĂƌƚŶĞƌƐŚŝƉ ƉƌŽĐĞƐƐĞƐ͕ ǁŚŽƐĞ
ŽďũĞĐƚŝǀĞ ŝƐ ƚŽ ƉƌŽŵŽƚĞ ĚŝĨĨĞƌĞŶƚ ƌĞƉĞƌƚŽŝƌĞƐ ƐŽ ƚŚĂƚ ůĞĂĚĞƌƐ ĐĂŶ ŵĂŬĞ ĚŝĨĨĞƌĞŶƚ ĐŽŶŶĞĐƚŝŽŶƐ
ǁŝƚŚŝŶŶŽǀĂƚŝŽŶŝŶƚŚĞŝƌĚĂŝůǇƉƌŽĨĞƐƐŝŽŶĂůƐŝƚƵĂƚŝŽŶƐ͘
>ĂƐƚůǇ͕ ŽŶĞ ĐĂŶ ƐĞĞ ƚŚĞ ĚĞĐŝƐŝǀĞ ĐŽŶĐŝůŝĂƚŽƌǇ ƌŽůĞ ƚŚĂƚ ƚŚĞ ĚĞƉĂƌƚŵĞŶƚ ŚĂĚ ŝŶ ŶĞŐŽƚŝĂƚŝŶŐ ƚŚĞ
ƐƚƌŝŬĞĚƵƌŝŶŐƚŚĞĐŽŶƐƚƌƵĐƚŝŽŶŽĨhƐŝŶĂdĞŵĞůĠƚƌŝĐĂŶĞƌŐŝĂWĞĐĠŵ/͕ƐŝŶĐĞŝƚǁĂƐĂďůĞƚŽĞŶƐƵƌĞ
ƚŚĂƚĚŝĂůŽŐǁĂƐƚŚĞŵĂŝŶŶĞŐŽƚŝĂƚŝŽŶƚŽŽů͘
ϭϬϲ
ϮϬϭϮDE'DEdZWKZd
,ĞĂůƚŚĂŶĚƐĂĨĞƚǇĂƚǁŽƌŬ
ĂƐĞĚ ŽŶ ŽƉĞƌĂƚŝŽŶƐ ǀŝƐŝƚƐ ĂĐĐŽŵƉůŝƐŚĞĚ ƚŚƌŽƵŐŚŽƵƚ ϮϬϭϮ ŝŶ ƚŚĞ ĂƉƉůŝĐĂƚŝŽŶ ŽĨ ƚŽŽůƐ ĨŽƌ
ƐƚƵĚǇŝŶŐƚŚĞŵĂƚƵƌŝƚǇŽĨǁŽƌŬƉůĂĐĞŚĞĂůƚŚĂŶĚƐĂĨĞƚǇŵĂŶĂŐĞŵĞŶƚ;^^dͿ;ƌĂĚůĞǇƵƌǀĞͿĂŶĚ
ƚŚĞ^ŬŝůůƐĂŶĚƉƚŝƚƵĚĞƐ>ĞǀĞů;DŽĚĞůŽĚĞĞŐŽĂǆƉĞƌƚͲ&ƌĞĚǇ<ŽĨŵĂŶͿ͕ƚŚĞƌĞŝƐĞǀŝĚĞŶĐĞĨŽƌ
ŽƉƉŽƌƚƵŶŝƚŝĞƐ ƚŽ ŝŵƉƌŽǀĞ ƚŚĞ ĐƵƌƌĞŶƚ ƉƌŽĐĞĚƵƌĞ͕ ĂŶĚ ĂůƐŽ ƚŽ ŝŵƉůĞŵĞŶƚ Ă ĞŚĂǀŝŽƌĂů
DĂŶĂŐĞŵĞŶƚŵŽĚĞůƚŽƐƚƌĞŶŐƚŚĞŶ^^dĐƵůƚƵƌĞĂŶĚƚŽŐƵĂƌĂŶƚĞĞƚŚĞĞǆĞĐƵƚŝŽŶŽĨĞŶĚĞĂǀŽƌƐŝŶ
ƚŚĞƐĂĨĞƐƚǁĂǇ͘
ŽŶƐĞƋƵĞŶƚůǇ͕ŝŶϮϬϭϮĂƉŝůŽƚƉƌŽŐƌĂŵǁĂƐĐĂƌƌŝĞĚŽƵƚĂƚ/ŶǀĞƐƚĐŽ͕ƵƐŝŶŐ^ͲĞŚĂǀŝŽƌĂƐĞĚ
^ĂĨĞƚǇ Ͳ ŵĞƚŚŽĚŽůŽŐǇ͘ /ƚƐ ŽďũĞĐƚŝǀĞ ŝƐ ƚŽ ĐƌĞĂƚĞ ďĞŚĂǀŝŽƌ ďĂƐĞĚ ŽŶ ƐĂĨĞƚǇ͕ ŝŶƚĞƌĂĐƚŝŶŐ ǁŝƚŚ
ƉĞŽƉůĞ͛ƐĂƚƚŝƚƵĚĞƐ͘dŚĞƚƌĂŝŶŝŶŐŝƐďĂƐĞĚŽŶĂŐƌŽƵƉŽĨƐƚŝŵƵůŝ͕ǁŝƚŚĚŝƐĐƵƐƐŝŽŶƐĂŶĚƚŚŽƵŐŚƚƐ
ƌĞŐĂƌĚŝŶŐƐĂĨĞƚǇ͕ĞŶĐŽƵƌĂŐŝŶŐŵĂŶĂŐĞƌƐĨŝƌƐƚŽĨĂůůƚŽĂďƐŽƌďƐƵĐŚďĞŚĂǀŝŽƌ͘
dŚĂƚƐĂŵĞǇĞĂƌ͕ƚŚĞƌĞƚŚĞ͞ŝĂĚĞ^ĞŐƵƌĂŶĕĂ͟ĂƚƚŚĞĚŝƐƚƌŝďƵƚŽƌƐ͘KŶƚŚĂƚĚĂǇ͕ŝƚƉƌŽŵŽƚĞĚĂ
ƐƵƌƉƌŝƐĞĂĐƚŝǀŝƚǇǁŝƚŚŽƵƚƉƌĞǀŝŽƵƐǁĂƌŶŝŶŐ͕ŝŶǁŚŝĐŚĚŝƌĞĐƚŽƌƐĂŶĚŵĂŶĂŐĞƌƐǁĞŶƚŽƵƚŝŶƚŽƚŚĞ
ĨŝĞůĚƚŽŵĂŬĞŝŶƐƉĞĐƚŝŽŶƐĂŶĚƚŽŐƵŝĚĞƚŚĞƐĂĨĞƚǇŽĨŝƚƐŽǁŶĞŵƉůŽǇĞĞƐĂŶĚƚŚŝƌĚƉĂƌƚŝĞƐ͘
ůƚŚŽƵŐŚ ƚŚĞƌĞ ŚĂĚ ďĞĞŶ ϱ ĨĂƚĂů ĂĐĐŝĚĞŶƚƐ ʹ Ăůů ŝŶǀŽůǀŝŶŐ ƚŚŝƌĚ ƉĂƌƚŝĞƐ ʹ ĂŶĚ ϴ ǁŽƌŬƉůĂĐĞ
ĂĐĐŝĚĞŶƚƐ ůĞĂǀĞƐ ǁŝƚŚ ŝƚƐ ŽǁŶ ĞŵƉůŽǇĞĞƐ͕ ƚŚĞƌĞ ǁĂƐ ĂŶ ŝŵƉƌŽǀĞŵĞŶƚ ŝŶ ƚŚĞ ŽƚŚĞƌ ƐĂĨĞƚǇ
ŝŶĚŝĐĂƚŽƌƐ ŝŶ ϮϬϭϮ͕ ĐŽŵƉĂƌĞĚ ƚŽ ƚŚĞ ƉƌĞǀŝŽƵƐ ǇĞĂƌ͘ dŚĞƌĞ ǁĂƐ Ă ϭϯй ƌĞĚƵĐƚŝŽŶ ŝŶ ĂĐĐŝĚĞŶƚƐ
ŝŶǀŽůǀŝŶŐ ǁŽƌŬĞƌƐ ĚŝƌĞĐƚůǇ ĞŵƉůŽǇĞĚ ďǇ ƚŚĞ ĐŽŵƉĂŶǇ͕ ǁŚĞƌĞĂƐ ĂĐĐŝĚĞŶƚƐ ŝŶǀŽůǀŝŶŐ ƐĞƌǀŝĐĞ
ƉƌŽǀŝĚĞƌƐ ĨĞůů ϭϵй͘ dŚĞ ŝŶĐŝĚĞŶƚ ƐĞƌŝŽƵƐŶĞƐƐ ƌĂƚĞ ŝŶǀŽůǀŝŶŐ ĞŵƉůŽǇĞĞƐ ĨĞůů ϱϮ͘ϲϯй͕ ǁŚŝůĞ ƚŚĞ
ƌĂƚĞŝŶǀŽůǀŝŶŐƐĞƌǀŝĐĞƉƌŽǀŝĚĞƌƐĨĞůůϮϴ͘ϱϳй͘
Z^Z,Es>KWDEd
ZΘ ĂĐƚŝǀŝƚŝĞƐ ĂƌĞ ĨŽĐƵƐĞĚ ŽŶ E> ŐƵŝĚĞůŝŶĞƐ ĂŶĚ ŽŶ ƚŚĞ ĚĞǀĞůŽƉŵĞŶƚ ŽĨ ĂƉƉůŝĞĚ
ƚĞĐŚŶŽůŽŐǇ͕ ƚŚĂƚ ŝƐ͕ ƚŚĂƚ ǁŚŝĐŚ ŝƐ ƌĞĂĚŝůǇ ĂǀĂŝůĂďůĞ ŝŶ ƚŚĞ ŵĂƌŬĞƚ ǁŝƚŚ ƚŚĞ ƉŽƚĞŶƚŝĂů ƚŽ ďĞ
ŝŶĐŽƌƉŽƌĂƚĞĚŝŶƚŽƚŚĞĐŽŵƉĂŶǇ͛ƐƉƌĂĐƚŝĐĞƐ͘dŚĞƌĞƐĞĂƌĐŚĂŶĚĚĞǀĞůŽƉŵĞŶƚƉƌŽũĞĐƚƐŚĂǀĞďĞĞŶ
ĞƐƚĂďůŝƐŚĞĚ ƚŽ ĂĐŚŝĞǀĞ ŝŵƉƌŽǀĞĚ ĞŶĞƌŐǇ ŐĞŶĞƌĂƚŝŽŶ ĂŶĚ ĚŝƐƚƌŝďƵƚŝŽŶ ƉƌŽĐĞƐƐĞƐ ďĂƐĞĚ ŽŶ
ĐƌŝƚĞƌŝĂƌĞůĂƚĞĚƚŽŽƉĞƌĂƚŝŽŶƐĞĨĨŝĐŝĞŶĐǇ͕ƌŝƐŬƌĞĚƵĐƚŝŽŶĂŶĚŽƉƚŝŵŝǌĂƚŝŽŶŽĨŝŶĐŽŵĞ͘
dŚĞϯŵĂŝŶĂƉƉůŝĞĚƚĞĐŚŶŽůŽŐǇĚĞǀĞůŽƉŵĞŶƚƉƌŽũĞĐƚƐĨŽĐƵƐĞĚŽŶĚŝƐƚƌŝďƵƚŝŽŶĂƌĞ͗&ŝĞůĚ^ĞƌǀŝĐĞ
ƵƚŽŵĂƚŝŽŶ ;&^Ϳ͕ ǁŚŝĐŚ ŝƐ Ă ƚŽŽů ƚŚĂƚ ŝŵƉƌŽǀĞƐ ĞǆƚĞƌŶĂů ƚĞĂŵ ŵĂŶĂŐĞŵĞŶƚ͕ ǁŝƚŚ Ă ǀŝĞǁ ƚŽ
ŝŵƉƌŽǀŝŶŐ ƚŚĞ ŽƉĞƌĂƚŝŽŶĂů ĞĨĨŝĐŝĞŶĐǇ ŽĨ ƚŚĞ ǁŽƌŬĨŽƌĐĞ ďǇ ŵĞĂŶƐ ŽĨ Ă ƐǇƐƚĞŵ ďĂƐĞĚ ŽŶ
ĂůŐŽƌŝƚŚŵƐ ƚŚĂƚ ĐĂŶ ĚĞƚĞƌŵŝŶĞ ƚŚĞ ǁŽƌŬ ƐĞƋƵĞŶĐĞ ŽĨ ĞĂĐŚ ƚĞĂŵ ǁŝƚŚ ƚŚĞ ůĞĂƐƚ ŚƵŵĂŶ
ŝŶƚĞƌĨĞƌĞŶĐĞ͘/ŶϮϬϭϮ͕ĂƚĞĂŵŽĨϯϮŝŶƚĞƌŶĂůƉƌŽĨĞƐƐŝŽŶĂůƐĐĂƌƌŝĞĚŽƵƚƐƚƵĚŝĞƐĂŶĚƐƵƌǀĞǇƐŽĨĂůů
ĨŝĞůĚ ƉƌŽĐĞĚƵƌĞƐ ĂŶĚ ƚŚĞŝƌ ĂƐƐŽĐŝĂƚĞĚ ĐŽƐƚƐ͕ ĂŝŵŝŶŐ Ăƚ ŝĚĞŶƚŝĨǇŝŶŐ ƉƌŝŽƌŝƚǇ ĂƌĞĂƐ ǁŚĞƌĞ ƚŚĞ
ƉƌŽũĞĐƚĐŽƵůĚďĞŝŵƉůĞŵĞŶƚĞĚ͘
ŶŽƚŚĞƌWƌŽũĞĐƚŝŶǀŽůǀĞƐĚĞĨŝŶŝŶŐĂdĞůĞĐŽŵŵƵŶŝĐĂƚŝŽŶƐ^ƚƌĂƚĞŐǇ͕ƐŝŶĐĞƚŚĞĐŽŵƉĂŶǇŝƐŚŝŐŚůǇ
ĚĞƉĞŶĚĞŶƚ ŽŶ ƚĞůĞĐŽŵŵƵŶŝĐĂƚŝŽŶƐ ĨŽƌ ŝƚƐ ŽƉĞƌĂƚŝŽŶƐ͕ ĂŶĚ ǁŚŝĐŚ͕ ĐŽŶƐĞƋƵĞŶƚůǇ͕ ƌĞƉƌĞƐĞŶƚ Ă
ŚŝŐŚůǇ ƐŝŐŶŝĨŝĐĂŶƚ ĐŽƐƚ͘ DĂƉƉĞĚͲŽƵƚ DĂƌŬĞƚ ƚĞŶĚĞŶĐŝĞƐ͕ ƐƵĐŚ ĂƐ ŝŶƚĞůůŝŐĞŶƚ ŵĞĂƐƵƌĞŵĞŶƚ͕
ĚŝƐƚƌŝďƵƚĞĚŵŝĐƌŽͲŐĞŶĞƌĂƚŝŽŶĂŶĚĞůĞĐƚƌŝĐĂůŵŽďŝůŝƚǇ͕ĚĞƉĞŶĚĐƌƵĐŝĂůůǇŽŶƚĞůĞĐŽŵŵƵŶŝĐĂƚŝŽŶƐ͘
ƚĞůĞĐŽŵŵƵŶŝĐĂƚŝŽŶƐƐƚƌĂƚĞŐǇǁĂƐĚĞǀĞůŽƉĞĚŝŶϮϬϭϮ͘
dŚĞƚŚŝƌĚWƌŽũĞĐƚĞŶƚĂŝůƐůĞĐƚƌŝĐĂůDŽďŝůŝƚǇ͕ǁŚŽƐĞŵĂŝŶŽďũĞĐƚŝǀĞŝƐƚŽƉƌĞƉĂƌĞƚŚĞĐŽŵƉĂŶǇ
ĨŽƌƚŚŝƐƚƌĞŶĚ͘/ƚŝƐĚŝǀŝĚĞĚŝŶƚŽϯƐĞŐŵĞŶƚƐ͘/ŶƚŚĞĨŝƌƐƚ͕ƚŚĞŐŽĂůŝƐƚŽƵŶĚĞƌƐƚĂŶĚƚŚĞďƵƐŝŶĞƐƐ
ŽĨĞůĞĐƚƌŝĐĂůŵŽďŝůŝƚǇƚŚƌŽƵŐŚŽƵƚƚŚĞǁŽƌůĚƐŽĂƐƚŽĐŽŶƐŝĚĞƌƉŽƐƐŝďůĞƚĞĐŚŶŽůŽŐǇŵŝŐƌĂƚŝŽŶƐƚŽ
ƌĂǌŝů ƚŚĂƚŵĂǇ ŝŵƉĂĐƚW͛Ɛ ĐŽŶĐĞƐƐŝŽŶ ĂƌĞĂƐ͘ /Ŷ ƚŚĞ ƐĞĐŽŶĚ͕ ŝŶ ƉĂƌƚŶĞƌƐŚŝƉ ǁŝƚŚ /Ͳh^W͕ ŝƚ
ŚĂƐ ƐŽƵŐŚƚ ƚŽ ƌĞƉůŝĐĂƚĞ ƚŚĞ ŝŶĨƌĂƐƚƌƵĐƚƵƌĞ ŽĨ ĂŶ ĞůĞĐƚƌŝĐŝƚǇ ƐĞƌǀŝĐĞ ƐƚĂƚŝŽŶ ĞƋƵĂů ƚŽ ƚŚĂƚ ŽĨ
WŽƌƚƵŐĂů͕ǁŝƚŚĂǀŝĞǁƚŽĐŽůůĞĐƚŝŶŐĚĂƚĂŽŶƚŚĞƐǇƐƚĞŵŝŶŽƉĞƌĂƚŝŽŶ͘dŚĞƚŚŝƌĚƐĞŐŵĞŶƚĂŝŵƐƚŽ
ϭϬϳ
ϮϬϭϮDE'DEdZWKZd
ĚĞǀĞůŽƉ Ă ƉůĂŶŶŝŶŐ ƚŽŽů ƚŚĂƚŵĂŬĞƐ ƐƚƵĚŝĞƐ ĂŶĚ ŵŽĚĞůƐŽŶ ƚŚĞ ŝŵƉĂĐƚ ŽĨ ƚŚĞ ŝŶƚƌŽĚƵĐƚŝŽŶŽĨ
ĞůĞĐƚƌŝĐĂů ǀĞŚŝĐůĞƐ ŝŶƚŽ ƚŚĞ ŽƵŶƚƌǇ͘ dŚĞ ƚŽŽů ǁŝůů ďĞ ĐŽŶŶĞĐƚĞĚ ƚŽ ƚŚĞ ĐŽŵƉĂŶǇ͛Ɛ ŶĞƚǁŽƌŬ͕
ĐƌĞĂƚŝŶŐĂŵŽĚĞůƚŚĂƚĨŽƌĞƐĞĞƐƐĐĞŶĂƌŝŽƐƚŚĂƚĚĞƚĞƌŵŝŶĞ͕ĨŽƌĞǆĂŵƉůĞ͕ǁŚŝĐŚůŽĐĂůŝƚŝĞƐǁŝůůďĞ
ŶĞĞĚĞĚƚŽƐƚƌĞŶŐƚŚĞŶƚŚĞŶĞƚǁŽƌŬ͘
dŚĞƌĞĂƌĞƐƚŝůůϭϬ'ĞŶĞƌĂƚŝŽŶZΘƉƌŽũĞĐƚƐ͕ŽĨǁŚŝĐŚϴĂƌĞƵŶĚĞƌǁĂǇ͕ĂŶĚϮƚŚĂƚǁĞƌĞĨŝŶĂůŝǌĞĚ
ŝŶϮϬϭϮ͘ŵŽŶŐƚŚĞŵ͕ǁĞĞŵƉŚĂƐŝǌĞ͗
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'ĞŽƚĞĐŚŶŝĐĂůƐƚƵĚŝĞƐĂŶĚĂƉƉůŝĐĂƚŝŽŶƐƚŽ ĚĞƚĞƌŵŝŶĞƐŽĐŝŽͲĞŶǀŝƌŽŶŵĞŶƚĂů ŝŵƉĂĐƚƐ ĂŶĚ
ƌĞƐƚƌŝĐƚŝŽŶƐ ŝŶǀŽůǀŝŶŐ ƚŚĞ >ĂũĞĂĚŽ WŽǁĞƌ ^ƚĂƚŝŽŶ ʹ ^/' ƉůĂƚĨŽƌŵ ĨŽƌ ŝĚĞŶƚŝĨǇŝŶŐ ĂŶĚ ŵĂŬŝŶŐ
ŵĂŶĂŐĞŵĞŶƚĚĞĐŝƐŝŽŶƐ͖
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ŚĂƌĂĐƚĞƌŝǌĂƚŝŽŶ ŽĨ ƚŚĞ ƉƌŽĚƵĐƚŝŽŶ ĐŚĂŝŶ ŽĨ ĞůĞƉŚĂŶƚ ŐƌĂƐƐ ĨŽƌ ƚŚĞ ŐĞŶĞƌĂƚŝŽŶ ŽĨ
ĞůĞĐƚƌŝĐĂůĞŶĞƌŐǇĨŝŶĂůŝǌĞĚŝŶ^ĞƉƚĞŵďĞƌŽĨϮϬϭϮ͖
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DŝŶŝͲŶĞƚǁŽƌŬƐǁŝƚŚŝŶƚĞƌŵŝƚƚĞŶƚƐŽƵƌĐĞƐĨŽƌƐĞƌǀŝĐŝŶŐŝƐŽůĂƚĞĚĂƌĞĂƐ͖
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ŶŝŶƚĞůůŝŐĞŶƚƐǇƐƚĞŵŽĨŐĞŽͲƌĞĨĞƌĞŶĐĞĚƌĞƐĞƌǀŽŝƌƐƵƉĞƌǀŝƐŝŽŶƚŚƌŽƵŐŚĂŶĂƵƚŽŶŽŵŽƵƐ
ǀĞŚŝĐůĞ͖
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ĞǀĞůŽƉŵĞŶƚŽĨŵĞƚŚŽĚŽůŽŐǇĨŽƌĞĂƌůǇĚĞƚĞĐƚŝŽŶŽĨĚĂŵĂŐĞŝŶƚŚĞŝƐŽůĂƚŝŽŶŽĨŚǇĚƌŽͲ
ŐĞŶĞƌĂƚŝŶŐƵŶŝƚƐďǇŵĞĂŶƐŽĨŝŵƉĞĚĂŶĐĞƐƉĞĐƚƌƵŵĂŶĂůǇƐŝƐ͖
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WƌŽĚƵĐƚŝŽŶŽĨďŝŽĚŝĞƐĞůĨƌŽŵŵŝĐƌŽͲĂůŐĂĞůŝǀŝŶŐŝŶŚǇĚƌŽĞůĞĐƚƌŝĐƉŽǁĞƌƉůĂŶƚƌĞƐĞƌǀŽŝƌƐ͕
ƵƐŝŶŐƌĞƐŝĚƵĂůďŝŽŵĂƐƐĂƐĂƐŽƵƌĐĞŽĨĞŶĞƌŐǇ͖
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ĞǀĞůŽƉŵĞŶƚ ŽĨ ĂŶ ŝŶƚĞůůŝŐĞŶƚ ŽŶůŝŶĞ ƐǇƐƚĞŵ ĨŽƌ ĞǀĂůƵĂƚŝŶŐ ƚŚĞ ůŽƐƐ ŽĨ ƵƐĞĨƵů ůŝĨĞ ŝŶ
ŚǇĚƌŽͲŐĞŶĞƌĂƚŝŶŐĐŽŵƉŽŶĞŶƚƐĚƵĞƚŽƐƚƌĞƐƐĂŐĞŶƚƐĂŶĚĐŚĂŶŐĞƐŝŶƚŚĞŽƉĞƌĂƚŝŽŶĂůƌĞŐŝŵĞŶ͖
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ZΘŽĨƉŚŽƚŽǀŽůƚĂŝĐĐĞůůƐƵƐŝŶŐĚŝĂŵŽŶĚsĨŝůŵ͖
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ĞǀĞůŽƉŵĞŶƚŽĨĂƐǇƐƚĞŵƚŽŵŽŶŝƚŽƌĐŽŶĐƌĞƚĞĂŶĚĞĂƌƚŚĞŶĚĂŵƐƚƌƵĐƚƵƌĞƐŝŶƚĞŐƌĂƚĞĚ
ŝŶƚŽƚŚĞĚŝĂŐŶŽƐƚŝĐĐĞŶƚĞƌĨŽƌĚĂŵƐĂĨĞƚǇ͖
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ĚĞƋƵĂĐǇŽĨŵĞƚŚŽĚƐ ĨŽƌƉƌĞĚŝĐƚŝŽŶ ĂŶĚ ƌĞŚĂďŝůŝƚĂƚŝŽŶŽĨ ŐƵůůŝĞƐ͕ ĂŝŵĞĚ Ăƚ ŝŵƉƌŽǀŝŶŐ
ƚŚĞƉĞƌĨŽƌŵĂŶĐĞŽĨƌĞƐĞƌǀŽŝƌƐĨŽƌƉŽǁĞƌŐĞŶĞƌĂƚŝŽŶ͘
/EEKsd/KE
dŚĞ /ŶŽǀŝƚǇ WƌŽũĞĐƚ ŝŶ ƉĂƌĞĐŝĚĂ ĚŽ EŽƌƚĞ ;^WͿ͕ ǁŝƚŚ ƚŚĞ ŽďũĞĐƚŝǀĞ ŽĨ ƚĞƐƚŝŶŐ ǀĂƌŝŽƵƐ
dĞĐŚŶŽůŽŐŝĞƐƚŚĂƚĞŶĂďůĞƚŚĞĐƌĞĂƚŝŽŶŽĨĂĐŝƚǇƚŚĂƚŝƐŵŽƌĞĞŶĞƌŐǇĞĨĨŝĐŝĞŶƚ͕ŵĂĚĞƐŝŐŶŝĨŝĐĂŶƚ
ĂĚǀĂŶĐĞƐ͕ƐŚŽǁŝŶŐŝƚƐĨŝƌƐƚƌĞƐƵůƚƐŝŶϮϬϭϮ͘ϭ͕ϯϬϭŵŽŶŽƉŚĂƐŝĐŝŶƚĞůůŝŐĞŶƚŵĞĂƐƵƌŝŶŐĚĞǀŝĐĞƐĂŶĚ
ϭϬ͕ϬϬϬ ďŝƉŚĂƐŝĐ ŽŶĞƐ ǁĞƌĞ ŝŶƐƚĂůůĞĚ͕ ĂůŽŶŐ ǁŝƚŚ ƚŚĞ ĚĞǀĞůŽƉŵĞŶƚ ŽĨ ƚŚĞ ĐƵƚ ĂŶĚ ƌĞĐŽŶŶĞĐƚ
ŵŽĚƵůĞ͕ŽĨƚŚĞ^DDƐǇƐƚĞŵ͕ŽĨƚŚĞ,ŽŵĞŽŶƚƌŽůƐǇƐƚĞŵ͕ĂŶĚŽĨƚŚĞŝƐƉůĂǇ͕ƚŚĞĐĂƌƌǇŝŶŐŽƵƚ
ŽĨ ƚŚĞ ƐƚƵĚǇ ŽĨƚŚĞ ĐŽŵŵƵŶŝĐĂƚŝŽŶƐ ƐǇƐƚĞŵ͕ ƚŚĞ ĐŽŶĨŝƌŵĂƚŝŽŶ ŽĨƚŚĞ WsŽĨ ƚŚĞ ŵŽŶŽƉŚĂƐŝĐ
ĂŶĚďŝƉŚĂƐŝĐŵĞĂƐƵƌŝŶŐĚĞǀŝĐĞƐ͕ďĞƐŝĚĞƐƚŚĞŵŽŶŝƚŽƌŝŶŐŽĨƚŚĞďŝůůŝŶŐ͘
/ŶƚŚĞƉŽǁĞƌĞĨĨŝĐŝĞŶĐǇĂƐƉĞĐƚŽĨƚŚŝƐƉƌŽŐƌĂŵ͕ϰϲϬƌĞĨƌŝŐĞƌĂƚŽƌƐǁĞƌĞĚŽŶĂƚĞĚ͕ϱϲϬƐŚŽǁĞƌƐ͕
ϲϭ͕ϭϰϬ ĞĨĨŝĐŝĞŶƚ ůŝŐŚƚ ďƵůďƐ ĂŶĚ ϭϬϰ > ůŝŐŚƚƐ ǁĞƌĞ ŝŶƐƚĂůůĞĚ͕ ĂŶĚ ϳϵ ƐŽůĂƌ ŚĞĂƚŝŶŐ ƐǇƐƚĞŵƐ͘
&ƵƌƚŚĞƌŵŽƌĞ͕ϳϬƚĞĂĐŚĞƌƐĂŶĚϮ͕ϲϭϰƐƚƵĚĞŶƚƐǁĞƌĞƚƌĂŝŶĞĚŝŶƚŚĞŽĂŶĞƌŐŝĂ;'ŽŽĚŶĞƌŐǇͿ
WƌŽũĞĐƚĂƚ^ĐŚŽŽůƐ͘dŚĞƌĞǁĞƌĞϭϬ͕ϭϵϬĐƵƐƚŽŵĞƌƌĞŐŝƐƚƌĂƚŝŽŶƐ͕ϭϳĚŽŶĂƚĞĚƐĐŽŽƚĞƌƐ͕ϮĞůĞĐƚƌŝĐ
ďŝĐǇĐůĞƐĂŶĚϱŝŶƐƚĂůůĞĚƌĞĐŚĂƌŐŝŶŐƐƚĂƚŝŽŶƐĨŽƌĞůĞĐƚƌŝĐǀĞŚŝĐůĞƐƌĞŐĂƌĚŝŶŐůĞĐƚƌŝĐDŽďŝůŝƚǇ͘
Ǉ ŵĞĂŶƐ ŽĨ ƚŚĞ /ŶƐƚŝƚƵƚŽ W͕ Ϯϯϯ ƚĞĂĐŚĞƌƐ ǁĞƌĞ ƚƌĂŝŶĞĚ ŝŶ ƚŚĞ WƌŽũĞĐƚ ĚƵĐĂŶĚŽ ƉĂƌĂ Ž
dƵƌŝƐŵŽ͕ ĂŶĚ ϱ͕ϭϬϬ ƐĐŚŽŽů ŬŝƚƐ ǁĞƌĞ ŚĂŶĚĞĚ ŽƵƚ ŝŶ ^ĐŚŽŽůƐ ďǇ W͘ >ĞĐƚƵƌĞƐ ǁĞƌĞ ŐŝǀĞŶ ƚŽ
ŶĞĂƌůǇ ϱϬϬ ƉĂƌĞŶƚƐ ƚŽ ϯ͕ϬϬϬ ƐƚƵĚĞŶƚƐ ĂďŽƵƚ ĞŶĞƌŐǇ ĞĨĨŝĐŝĞŶĐǇ ĂŶĚ ƚŚĞ /ŶŽǀŝƚǇ ƉƌŽũĞĐƚ͘
ϭϬϴ
ϮϬϭϮDE'DEdZWKZd
&ƵƌƚŚĞƌŵŽƌĞ͕ ϭϱϬ ƐƚƵĚĞŶƚƐ ǁĞƌĞ ƚƌĂŝŶĞĚ ŝŶ ƚŚĞ 'Ƶƌŝ ƉƌŽũĞĐƚ͕ ĂŶ ĞĚƵĐĂƚŝŽŶĂů ƉƌŽŐƌĂŵ
ƐƉŽŶƐŽƌĞĚ ďǇ ƚŚĞ 'ŽǀĞƌŶŵĞŶƚ ŽĨ ƚŚĞ ^ƚĂƚĞ ŽĨ ^ĂŽ WĂƵůŽ ĂŶĚ ƚŚĞ ^ĞĐƌĞƚĂƌǇ ŽĨ ƵůƚƵƌĞ͕ ĂŶĚ
ǁŚŝĐŚƉƌŽŵŽƚĞƐŵƵƐŝĐĂůĞĚƵĐĂƚŝŽŶĐŽƵƌƐĞƐĨŽƌĐŚŝůĚƌĞŶĂŶĚƚĞĞŶƐŝŶůĞĂƌŶŝŶŐŝŶƐƚŝƚƵƚŝŽŶŽĨƚŚĞ
ƉƵďůŝĐŶĞƚǁŽƌŬŽĨƚŚĞĐŝƚǇŽĨƉĂƌĞĐŝĚĂ͘ĚĚŝƚŝŽŶĂůůǇ͕ϱϭϲƉĞƌƐŽŶƐǁĞƌĞŝŶƚĞƌǀŝĞǁĞĚĚƵƌŝŶŐƚŚĞ
Z'ƉƌŽũĞĐƚ͘
dŚĞ ůŝŵĂ'ƌŝĚ ƉƌŽũĞĐƚ͕ ǁŚŝĐŚ ŝƐ ƉĂƌƚ ŽĨ WůĂŶŽ dĞĐŶŽůſŐŝĐŽ ŵƉƌĞƐĂ ;ŽŵƉĂŶǇ dĞĐŚŶŽůŽŐŝĐĂů
WůĂŶͿ͕ǁĂƐŝŵƉůĞŵĞŶƚĞĚŝŶƚŚĞƐǇƐƚĞŵ͛ƐŽƉĞƌĂƚŝŽŶĂŶĚĚŝƐƚƌŝďƵƚŝŽŶĐĞŶƚĞƌƐŽĨWĂŶĚĞŝƌĂŶƚĞ
ĂŶĚWƐĐĞůƐĂ͘dŚĞƚĞĐŚŶŽůŽŐǇŚĂƐĂĚĂƚĂďĂƐĞƚŚĂƚƐƚŽƌĞƐŚŝƐƚŽƌŝĐĂůǁĞĂƚŚĞƌŝŶĨŽƌŵĂƚŝŽŶŝŶ
ƌĞĂůƚŝŵĞĂŶĚĂůůŽǁƐƚŚĞǁĞĂƚŚĞƌĨŽƌĞĐĂƐƚƐ͘dŚĞƚŽŽůŚĂƐĂŶĞƚǁŽƌŬĨŽƌŵĞĂƐƵƌŝŶŐĚŝƐĐŚĂƌŐĞƐ
ǁŝƚŚŝŶ ĐůŽƵĚƐ ƚŽ ĚĞƚĞĐƚ ůŝŐŚƚŶŝŶŐ ĂŶĚ ƌĂŝŶ͕ ĂŶĚ ŝƚ ƚƌĂĐŬƐ ƐĞǀĞƌĞ ƐƚŽƌŵƐ͘ dŚŝƐ ƌĞĂů ƚŝŵĞ ŐĞŽͲ
ƌĞĨĞƌĞŶĐŝŶŐ ŽĨ ƚŚĞƐĞ ǀĂƌŝĂďůĞƐ ĞŶĂďůĞƐ ƚŚĞ ŵĂŝŶƚĞŶĂŶĐĞ ƚĞĂŵ ƚŽ ŵĂŬĞ ƉŽƐƐŝďůĞ ĐŽƌƌĞĐƚŝǀĞ
ĂĐƚŝŽŶƐĂŚĞĂĚŽĨƚŝŵĞ͘
ŶŽƚŚĞƌĂƉƉůŝĐĂƚŝŽŶŽĨƚŚĞƚŽŽůŝƐƚŽŝĚĞŶƚŝĨǇǁŚĞƌĞƚŽƐƵƉƉŽƌƚŝŶǀĞƐƚŵĞŶƚƐďĂƐĞĚŽŶŚŝƐƚŽƌŝĐĂů
ĚĂƚĂǁŚĞƌĞĞǆƚƌĞŵĞĞǀĞŶƚƐŽĐĐƵƌŵŽƐƚĨƌĞƋƵĞŶƚůǇ͘DŽƌĞŽǀĞƌ͕ƐƵĐŚŝŶĨůƵĞŶĐĞŝŶƚŚĞĐŽŵƉĂŶǇ͛Ɛ
ŽƉĞƌĂƚŝŽŶĂů ŵĂŶĂŐĞŵĞŶƚ ĂůůŽǁƐ ŝĚĞŶƚŝĨǇŝŶŐ͕ ĨŽƌ ĞǆĂŵƉůĞ͕ ƉĞĂŬƐ ŽĨ ĐŽŶƐƵŵƉƚŝŽŶ ƌĞůĂƚĞĚ ƚŽ
ƚŝŵĞ͘
dŚĞ W /ŶŽǀĂĕĆŽ ;/ŶŶŽǀĂƚŝŽŶͿ ϮϬϮϬ ǁĂƌĚ ďĞŐĂŶ ŝŶ ϮϬϭϬ ĨŽƌ ƚŚĞ ƉƵƌƉŽƐĞ ŽĨ ƉƌŽŵŽƚŝŶŐ
ĞŶƚƌĞƉƌĞŶĞƵƌƐŚŝƉ ŝŶ ǀĂƌŝŽƵƐ ďƵƐŝŶĞƐƐ ĂƌĞĂƐ ĐŽŶŶĞĐƚĞĚ ǁŝƚŚ ƚŚĞ ĞůĞĐƚƌŝĐ ƐĞĐƚŽƌ͘ /Ŷ ƚŚĞ ƚŚŝƌĚ
ĞĚŝƚŝŽŶ͕ ƚŚĞ ĂǁĂƌĚ ĐŽƵŶƚĞĚ ŽŶ ĂĐƚŝǀŝƚŝĞƐ ŽĨ ŽŶͲĐĂŵƉƵƐ ĚŝĨĨƵƐŝŽŶ Ăƚ ϭϱ ƵŶŝǀĞƌƐŝƚŝĞƐ ĂŶĚ ϰ
ŝŶĐƵďĂƚŽƌƐůŽĐĂƚĞĚŝŶǀĂƌŝŽƵƐƐƚĂƚĞƐŝŶƌĂǌŝůƐĂƌĞƐƵůƚ͕ϰϯƉƌŽũĞĐƚĞŶƚƌŝĞƐǁĞƌĞŽďƚĂŝŶĞĚ͕ϮϮŽĨ
ǁŚŝĐŚǁĞƌĞĂƉƉƌŽǀĞĚĨŽƌƚŚĞƐĞĐŽŶĚƉŚĂƐĞ͘/ŶƚŚŝƐƉŚĂƐĞ͕WŶŽƌĂƐŝůĨŝŶĂŶĐĞĚ͕ĨŽƌƵƉƚŽƚǁŽ
ƌĞƉƌĞƐĞŶƚĂƚŝǀĞƐ ƉĞƌ ƉƌŽũĞĐƚ͕ Ă ĐŽƵƌƐĞ Ăƚ &'sͲ^W ;'ĞƚƵůŝŽ sĂƌŐĂƐ &ŽƵŶĚĂƚŝŽŶ ŽĨ ^ĂŽ WĂƵůŽͿ ƚŽ
ŚĞůƉ ƚŚĞŵ ĚĞǀĞůŽƉ Ă ďƵƐŝŶĞƐƐ ƉůĂŶ͘ ĨƚĞƌ ĚĞůŝǀĞƌǇ͕ ƚŚĞ ƉƌŽũĞĐƚƐ ǁĞƌĞ ĞǀĂůƵĂƚĞĚ ĂŐĂŝŶ ĂŶĚ ϲ
ǁĞƌĞ ĐŚŽƐĞŶ ĨŽƌ Ă ƉƌĞƐĞŶƚĂƚŝŽŶ ƚŽ W ŶŽƌĂƐŝů͛ƐŵĂŶĂŐĞŵĞŶƚ ĂŶĚ &'s ƌĞƉƌĞƐĞŶƚĂƚŝǀĞƐ͘ KĨ
ƚŚĞƐĞƉƌĞƐĞŶƚĂƚŝŽŶƐ͕ƚŚĞƚŚƌĞĞďĞƐƚƉƌŽũĞĐƚƐǁĞƌĞĐŚŽƐĞŶ͕ĂŶĚǁŚŝĐŚǁŝůůďĞĚĞƚĂŝůĞĚďǇƚŚĞŝƌ
ĂƵƚŚŽƌƐ͘dŚĞǁŝŶŶĞƌǁŝůůďĞĐŚŽƐĞŶĂŶĚĂŶŶŽƵŶĐĞĚďǇDĂƌĐŚŽĨϮϬϭϯ͘
ƚ ƚŚĞ ĞŶĚ ŽĨ ϮϬϭϮ͕ ƚŚĞ ŽůƐĂ ĚĞ /ŶŽǀĂĕĆŽ ;/ŶŶŽǀĂƚŝŽŶ ^ĐŚŽůĂƌƐŚŝƉͿ ƉƌŽŐƌĂŵ ƌĞĂĐŚĞĚ ŝƚƐ ϳƚŚ
ŚĂůůĞŶŐĞ͕ǁŝƚŚϮƉƌŽƉŽƐĞĚƚŚĞŵĞƐ͗ϭͿ,ŽǁƚŽƌĞƚĂŝŶŬŶŽǁůĞĚŐĞĂƚW͍ϮͿ/ŶĚŝĐĂƚĞǇŽƵƌŝĚĞĂ
ĂďŽƵƚ ďŝůůŝŶŐ ĂŶĚ ƚĂǆ ƌĞǀĞŶƵĞƐ͘ tŽƌŬƐŚŽƉƐ ĂŶĚ ƉƌĞƐĞŶƚĂƚŝŽŶƐ ǁŝƚŚ d/ ;/ŶĨŽƌŵĂƚŝŽŶ ĂŶĚ
ŽŵŵƵŶŝĐĂƚŝŽŶdĞĐŚŶŽůŽŐǇͲ/dͿ͕'ĞƐƚĆŽĚĂZĞĐĞŝƚĂĂŶĚZĞŐƵůĂƚſƌŝŽĐŽͲǁŽƌŬĞƌƐǁĞƌĞŚĞůĚƚŽ
ƐƉƌĞĂĚŝŶŶŽǀĂƚŝŽŶĐƵůƚƵƌĞĂŶĚƚŚĞŽůƐĂĚĞ/ŶŽǀĂĕĆŽ;/ŶŶŽǀĂƚŝŽŶ^ĐŚŽůĂƌƐŚŝƉͿƚŽŽůďǇŵĞĂŶƐŽĨ
ĚǇŶĂŵŝĐĂĐƚŝǀŝƚŝĞƐŝŶWĂŶĚĞŝƌĂŶƚĞ͛ƐĂƵĚŝƚŽƌŝƵŵŝŶ^ĂŽ:ŽƐĞĚŽĂŵƉŽƐĂŶĚƚŚĞŚŽůĚŝŶŐŝŶ
^ĂŽWĂƵůŽ͘^ŝŶĐĞƚŚĞϭƐƚŚĂůůĞŶŐĞ͕ϳϰйŽĨƚŚĞƐŽůƵƚŝŽŶƐĂƉƉƌŽǀĞĚĨŽƌŝŵƉůĞŵĞŶƚĂƚŝŽŶďǇƚŚĞ
/ŶŶŽǀĂƚŝŽŶ dĞĂŵ ;ŝŶŶŽǀĂƚŝŽŶ ĐŽŵŵŝƚƚĞĞ ĐŽŵƉŽƐĞĚ ŽĨ ĚŝƌĞĐƚŽƌƐ ĂŶĚ ŵĂŶĂŐĞƌƐ ĨƌŽŵ ǀĂƌŝŽƵƐ
ĚĞƉĂƌƚŵĞŶƚƐŽĨƚŚĞĐŽŵƉĂŶǇͿŚĂǀĞďĞĞŶĞǆĞĐƵƚĞĚŽƌĂƌĞǁŝƚŚŽƵƚĂŶĞǆĞĐƵƚŝŽŶƉŚĂƐĞ͘
WŶŽƌĂƐŝůŝƐĂŵŽŶŐƚŚĞĨŝŶĂůŝƐƚƐŽĨƚŚĞDĂŶĂŐĞŵĞŶƚ/ŶŶŽǀĂƚŝŽŶǆĐŚĂŶŐĞ;D/yͿǁŝƚŚƚŚĞ
/ŶŶŽǀĂƚŝŽŶ DĞŶƚŽƌƐ ƉƌŽũĞĐƚ͕ ǁŚŝĐŚ ĨŽƌĞƐĞĞƐ ƚŚĞ ĐƌĞĂƚŝŽŶ ŽĨ ĂŶ ŝŶƚĞƌŶĂů ŝŶŶŽǀĂƚŝŽŶ ŶĞƚǁŽƌŬ
ƚŚƌŽƵŐŚŽƵƚƚŚĞŽƌŐĂŶŝǌĂƚŝŽŶ͕ŝŶǁŚŝĐŚĞĂĐŚŵĞŶƚŽƌŝƐƚƌĂŝŶĞĚĂƐĂďƵƐŝŶĞƐƐĂŶĚŵĂŶĂŐĞŵĞŶƚ
ŝŶŶŽǀĂƚŽƌ͕ ƚĂŬŝŶŐ ŽŶ ŶĞǁ ƌŽůĞƐ ĂŶĚ ƌĞƐƉŽŶƐŝďŝůŝƚŝĞƐ ŝŶ ŽƌĚĞƌ ƚŽ ǁŽƌŬ ĂƐ ĂŶ ĞǆƚĞŶƐŝŽŶ ŽĨ ƚŚĞ
/ŶŶŽǀĂƚŝŽŶ ĚĞƉĂƌƚŵĞŶƚ͘ D/y ŝƐ Ă ƉůĂƚĨŽƌŵ ĚĞǀĞůŽƉĞĚ ďǇ 'ĂƌǇ ,ĂŵŵĞů͕ ĂůŽŶŐ ǁŝƚŚ DĐ<ŝŶƐĞǇ
ĂŶĚ ƚŚĞ ,ĂƌǀĂƌĚ ƵƐŝŶĞƐƐ ZĞǀŝĞǁ͕ ĨŽƌ ƚŚĞ ƉƵƌƉŽƐĞ ŽĨ ĐŽůůĞĐƚŝŶŐ ĂŶĚ ĚŝƐĐƵƐƐŝŶŐ ŵĂŶĂŐĞŵĞŶƚ
ŝŶŶŽǀĂƚŝŽŶ ĂŶĚ ƚŚĞ ǁĂǇ ŝŶ ǁŚŝĐŚ ĐŽŵƉĂŶŝĞƐ ĂƌĞ ŽƌŐĂŶŝǌĞĚ͘ ĞƐŝĚĞƐ ƚŚŝƐ ŝŶĨŽƌŵĂƚŝŽŶ ƐŚĂƌŝŶŐ͕
D/y ĂůƐŽ ŚŽůĚƐ ĐŽŵƉĞƚŝƚŝŽŶƐ͕ ĂŵŽŶŐ ƚŚĞŵ ƚŚĞ ůĂƚĞƐƚ ĐŚĂůůĞŶŐĞ Η/ŶŶŽǀĂƚŝŶŐ /ŶŶŽǀĂƚŝŽŶ͕Η ŝŶ
ǁŚŝĐŚWŝƐĂŵŽŶŐƚŚĞϮϰĨŝŶĂůŝƐƚƐŽĨƚŚĞϭϰϬĐŽŵƉĞƚŝŶŐƉƌŽƉŽƐĂůƐ͘
dŚĞ >Ƶǌ WŽƌƚĄƚŝů ƌĂƐŝů ƉƌŽũĞĐƚ ŝƐ ĂŶ ŝŶƚĞƌŶĂƚŝŽŶĂů ƉĂƌƚŶĞƌƐŚŝƉ ƚŚĂƚ ƚĂŬĞƐ ƐƚĂƚĞͲŽĨͲƚŚĞ Ăƌƚ
ƚĞĐŚŶŽůŽŐǇ ƚŽ ĐŽŵŵƵŶŝƚŝĞƐ ŝŶ ŵĂǌŽŶŝĂ͘ dŚŝƐ ƉĂƌƚŶĞƌƐŚŝƉ ŝƐ ĐŽŵƉŽƐĞĚ ŽĨ W ʹ ŶĞƌŐŝĂƐ ĚŽ
ϭϬϵ
ϮϬϭϮDE'DEdZWKZd
ƌĂƐŝů;WͿ͕/ŶƐƚŝƚƵƚŽWŶĞƌŐŝĂƐĚŽƌĂƐŝů;/WͿ͕ĂŶĐŽ/ŶƚĞƌĂŵĞƌŝĐĂŶŽĚĞĞƐĞŶǀŽůǀŝŵĞŶƚŽ
;/Ϳ͕dŚĞWŽƌƚĂďůĞ>ŝŐŚƚWƌŽũĞĐƚ;W>WͿ͕WƌŽũĞƚŽ^ĂƷĚĞĞůĞŐƌŝĂ;W^Ϳ͕ĂŶĚƚŚĞ/ŶƐƚŝƚƵƚŽƉĂƌĂŽ
ĞƐĞŶǀŽůǀŝŵĞŶƚŽ ĚĞ ŶĞƌŐŝĂƐ ůƚĞƌŶĂƚŝǀĂƐ Ğ ĚĂ ƵƚŽ ^ƵƐƚĞŶƚĂďŝůŝĚĂĚĞ ;/^Ϳ͘ ZĞůǇŝŶŐ ŽŶ
ƉƌŽĨĞƐƐŝŽŶĂůƐ ĨƌŽŵ ƚŚĞ DĂƐƐĂĐŚƵƐĞƚƚƐ /ŶƐƚŝƚƵƚĞ ŽĨ dĞĐŚŶŽůŽŐǇ ĂŶĚ ,ĂƌǀĂƌĚ hŶŝǀĞƌƐŝƚǇ͕ ƚŚĞ
WƌŽũĞĐƚŝƐůĞĚďǇ/ŶƐƚŝƚƵƚŽWĂŶĚŚĂƐĐŽŶĐůƵĚĞĚƚŚĞĚĞůŝǀĞƌǇŽĨƐŽůĂƌĞŶĞƌŐǇĂŶĚ>ůŝŐŚƚŝŶŐ
ƐǇƐƚĞŵƐ ƚŽ ŝƐŽůĂƚĞĚ ƉŽƉƵůĂƚŝŽŶƐ ŝŶ ƚŚĞ ŵĂǌŽŶ ƌĞŐŝŽŶ͘ /Ŷ ƚŚŝƐ ƉŚĂƐĞ͕ ƚŚĞ WƌŽũĞĐƚ ĞŶƚĂŝůƐ ϯϬϬ
ĨĂŵŝůŝĞƐ͕ďĞŶĞĨŝƚŝŶŐϭ͕ϲϱϬƌŝǀĞƌĚǁĞůůĞƌƐŝŶZŝŽƌĂƉŝƵŶƐ͕ĂƌĞŐŝŽŶŝŶ^ĂŶƚĂƌĠŵ͕WĂƌĄ͘ DŽƌĞƚŚĂŶ
ZΨ ϭ ŵŝůůŝŽŶ ǁĂƐ ŝŶǀĞƐƚĞĚ ŝŶ ƚĞĐŚŶŽůŽŐŝĐĂů ĚĞǀĞůŽƉŵĞŶƚ͕ ƉƌŽĚƵĐƚŝŽŶ ĂŶĚ ĞƋƵŝƉŵĞŶƚ
ĚŝƐƚƌŝďƵƚŝŽŶ͕ ƚŚĞ ƚƌĂŝŶŝŶŐ ŽĨ ďĞŶĞĨŝĐŝĂƌŝĞƐ͕ ƚŚĞ ƚƌĂŶƐĨĞƌĞŶĐĞ ŽĨ ŬŶŽǁůĞĚŐĞ ĂŶĚ ƚŚĞ
ƐŽĐŝŽĞĐŽŶŽŵŝĐĂŶĚƉŽǁĞƌŵĂƉƉŝŶŐŽĨƚŚĞƉƌŽũĞĐƚ͛ƐƚĂƌŐĞƚƌĞŐŝŽŶ͘
EZ'z&&//Ez
ĞĂůĞƌƐŚŝƉƐŝŶƌĂǌŝůŝŶǀĞƐƚϬ͘ϱйŽĨƚŚĞŝƌŶĞƚŽƉĞƌĂƚŝŶŐŝŶĐŽŵĞŽŶƉŽǁĞƌĞĨĨŝĐŝĞŶĐǇƉƌŽŐƌĂŵƐ͘
/ŶǀĞƐƚŵĞŶƚƐ ŝŶ ƉŽǁĞƌ ĐŽŶƐĞƌǀĂƚŝŽŶ ĂƌĞ ĞƐƐĞŶƚŝĂůůǇ ĂŝŵĞĚ Ăƚ ƌĞƐŝĚĞŶƚŝĂů ĐƵƐƚŽŵĞƌƐ ǁŝƚŚ ůŽǁ
ƉƵƌĐŚĂƐŝŶŐ ƉŽǁĞƌ ĂŶĚ ƚŽ ŶŽŶͲƉƌŽĨŝƚ ĞŶƚŝƚŝĞƐ͕ ǁŝƚŚ ƚŚĞ ŽďũĞĐƚŝǀĞ ŽĨ ĚĞŵŽŶƐƚƌĂƚŝŶŐ ƚŚĞ
ŝŵƉŽƌƚĂŶĐĞŽĨĂĐƚŝǀŝƚŝĞƐŽŶŚŽǁƚŽĨŝŐŚƚƚŚĞǁĂƐƚŝŶŐŽĨĞůĞĐƚƌŝĐĂůƉŽǁĞƌĂŶĚƚŚĞƐĂĨĞƵƚŝůŝǌĂƚŝŽŶ
ŽĨƚŚĞĞůĞĐƚƌŝĐŐƌŝĚ͕ĂŶĚĂƚƚŚĞƐĂŵĞƚŝŵĞ͕ƌĞĚƵĐŝŶŐĚĞĨĂƵůƚƚŽŵĂŬĞĐŽƐƚƐŵŽƌĞĂĐĐĞƐƐŝďůĞƚŽ
ĐŽŶƐƵŵĞƌƐ͘
/ŶϮϬϭϮ͕ƚŚĞŝŶǀĞƐƚŵĞŶƚƐƚŽƚĂůĞĚZΨϮϴ͘ϰŵŝůůŝŽŶ͕ĞĐŽŶŽŵŝǌŝŶŐϮϵ͘ϯϬϱDtͬǇĞĂƌŝŶĞŶĞƌŐǇĨŽƌ
ƚŚĞ ǇĞĂƌ ĂŶĚ Ă ƌĞĚƵĐƚŝŽŶ ŽĨ ϮϬ Ŭt ŝŶ ƉŽŝŶƚ ĚĞŵĂŶĚ͘ &ƵƌƚŚĞƌŵŽƌĞ͕ ƚŚĞ ĐŽƐƚ ƐĂǀĞĚ ĚƵĞ ƚŽ
ĞĐŽŶŽŵŝǌĞĚƉŽǁĞƌƌĞƉƌĞƐĞŶƚƐĂďŽƵƚZΨϲ͘ϴŵŝůůŝŽŶ͘
dŚĞ ŽĂ ŶĞƌŐŝĂ ;'ŽŽĚ ŶĞƌŐǇͿ WƌŽũĞĐƚ ŝŶ ƚŚĞ ĐŽŵŵƵŶŝƚŝĞƐ͕ ǁŚŝĐŚ ĂŝŵƐ Ăƚ ƉƌŽŵŽƚŝŶŐ ƉŽǁĞƌ
ĐŽŶƐĞƌǀĂƚŝŽŶĂĐƚŝǀŝƚŝĞƐŝŶĐŽŵŵƵŶŝƚŝĞƐǁŝƚŚůŽǁƉƵƌĐŚĂƐŝŶŐƉŽǁĞƌ͕ǁŝƚŚĞĚƵĐĂƚŝŽŶĂůĂĐƚŝǀŝƚŝĞƐ
ĂŶĚƚŚĞƌĞƉůĂĐĞŵĞŶƚŽĨŽďƐŽůĞƚĞĞƋƵŝƉŵĞŶƚǁŝƚŚŵŽĚĞƌŶĂŶĚĞĨĨŝĐŝĞŶƚĞƋƵŝƉŵĞŶƚ͕ĂƐǁĞůůĂƐ
ƚŚĞ ĂĚũƵƐƚŵĞŶƚ ŽĨ ŝƌƌĞŐƵůĂƌ ĨĂĐŝůŝƚŝĞƐ͕ ŚĂƐ ďĞŶĞĨŝƚĞĚ Ϯϱ͕ϯϱϴ ĐƵƐƚŽŵĞƌƐ ǁŝƚŚ ƌĞƉůĂĐĞŵĞŶƚ ďǇ
ϭϰϭ͕ϱϳϬĞĨĨŝĐŝĞŶƚůŝŐŚƚďƵůďƐ͕ϮϬϮƌĞŵŽĚĞůŝŶŐŽĨŝŶƚĞƌŶĂůĨĂĐŝůŝƚŝĞƐďǇƌĞƉůĂĐŝŶŐĞůĞĐƚƌŝĐƐŚŽǁĞƌƐ
ĂŶĚϰϯϰƌĞĨƌŝŐĞƌĂƚŽƌƐŝŶWĂŶĚĞŝƌĂŶƚĞ͛ƐĐŽŶĐĞƐƐŝŽŶĂƌĞĂ͘
ƚWƐĐĞůƐĂ͕ǁŝƚŚƚŚĞŐĞŶƚĞƐĚĂŽĂŶĞƌŐŝĂ;ŐĞŶƚƐĨŽƌ'ŽŽĚŶĞƌŐǇͿƉƌŽũĞĐƚ͕ǁŚŝĐŚĂŝŵƐ
Ăƚ ůĞŐĂůŝǌŝŶŐ ŝƌƌĞŐƵůĂƌ ĐŽŶƐƵŵĞƌ ƵŶŝƚƐ ďǇ ŵĞĂŶƐ ŽĨ ƐŽĐŝĂů ĂĐƚŝǀŝƚŝĞƐ͕ ŝŶĐůƵĚŝŶŐ ŐƵŝĚĂŶĐĞ ĨŽƌ
ƌĞŐŝƐƚĞƌŝŶŐ ƐŽĐŝĂů ƚĂƌŝĨĨ͕ ϴ͕ϭϱϴ ŽŶƐƵŵĞƌ hŶŝƚƐ ;hΖƐͿ ǁŝƚŚ ŝƌƌĞŐƵůĂƌ ĨĂĐŝůŝƚŝĞƐ ǁĞƌĞ ĂĚũƵƐƚĞĚ͕
ďĞƐŝĚĞƐ ƚŚĞ ĚŽŶĂƚŝŽŶ ŽĨ ŝŶƉƵƚ ƉĂƚƚĞƌŶƐ ĂŶĚ ŝŶƚĞƌŶĂů ƐǇƐƚĞŵƐ͘ dŚĞ ƌĞƐƵůƚƐ ǁĞƌĞ Ϯϲ͕ϰϳϱ hΖƐ
ĂƚƚĞŶĚĞĚ ĂŶĚ ϲϯ͕ϵϲϯ ĞĨĨŝĐŝĞŶƚ ŵĂĐŚŝŶĞƐ ĚŽŶĂƚĞĚ͕ ŝŶĐůƵĚŝŶŐ ϱϵ͕ϲϲϴ ĐŽŵƉĂĐƚ ĨůƵŽƌĞƐĐĞŶƚ ůŝŐŚƚ
ďƵůďƐ͕ ϱϬϬ ŝŶƚĞůůŝŐĞŶƚ ƐŚŽǁĞƌƐ ĂŶĚ ϯ͕ϳϵϱ ƌĞĨƌŝŐĞƌĂƚŽƌƐ͘ dŚĞ ŝŵƉůĞŵĞŶƚĂƚŝŽŶ ŽĨ ƚŚŝƐ WƌŽũĞĐƚ ŝŶ
WůĂŶĂůƚŽ^ĞƌƌĂŶŽĐĂƵƐĞĚůŽƐĞƐƚŽĚƌŽƉĨƌŽŵϰϱйƚŽϯϬйŝŶũƵƐƚƐŝǆŵŽŶƚŚƐ͘
dŚĞŽĂŶĞƌŐŝĂWƌŽũĞĐƚ;'ŽŽĚ^ŽůĂƌŶĞƌŐǇͿŝŶƐĐŚŽŽůƐŚĂƐƉƌŽŵŽƚĞĚĞĚƵĐĂƚŝŽŶĂůĂĐƚŝǀŝƚŝĞƐĂƚ
ϮϳϳŵƵŶŝĐŝƉĂůĂŶĚƐƚĂƚĞƐĐŚŽŽůƐŝŶƚŚĞƉƵďůŝĐƐĐŚŽŽůƐǇƐƚĞŵ͕ŝŶĐůƵĚŝŶŐϭ͕ϮϵϳƚĞĂĐŚĞƌƐ͕ϭϬϵ͕ϲϴϯ
ƐƚƵĚĞŶƚƐĂŶĚϭϯ͕ϳϬϴƉĂƌƚŝĐŝƉĂŶƚƐĂƚĞǀĞŶƚƐĂŶĚĞĚƵĐĂƚŝŽŶĂůůĞĐƚƵƌĞƐŝŶĚŝƐƚƌŝďƵƚŽƌĐŽŶĐĞƐƐŝŽŶ
ĂƌĞĂƐ͘ƚWƐĐĞůƐĂ͕ƚŚĞWƌŽũĞƚŽĨŝĐŝġŶĐŝĂŶĞƌŐĠƚŝĐĂĞŵWƌĠĚŝŽƐWƷďůŝĐŽƐ;WŽǁĞƌĨĨŝĐŝĞŶĐǇ
ŝŶWƵďůŝĐƵŝůĚŝŶŐƐWƌŽũĞĐƚͿŚĂƐƉƌŽŵŽƚĞĚƚŚĞƌĞƉůĂĐĞŵĞŶƚŽĨĞƋƵŝƉŵĞŶƚŝŶϵƉƵďůŝĐďƵŝůĚŝŶŐƐ͕
ŝŶĐůƵĚŝŶŐϱϰĂŝƌĐŽŶĚŝƚŝŽŶĞƌƐ͕ϱ͕ϮϰϴůŝŐŚƚďƵůďƐ͕Ϯ͕ϲϱϴƌĞĂĐƚŽƌƐĂŶĚϮ͕ϭϰϴůĂŵƉƐ͘
dŚĞ ŽĂ ŶĞƌŐŝĂ ^ŽůĂƌ ;'ŽŽĚ ^ŽůĂƌ ŶĞƌŐǇͿ WƌŽũĞĐƚ ŚĂƐ ƉƌŽŵŽƚĞĚ ƚŚĞ ƌĞƉůĂĐĞŵĞŶƚ ŽĨ
ĐŽŶǀĞŶƚŝŽŶĂů ĞůĞĐƚƌŝĐ ƐŚŽǁĞƌƐ ǁŝƚŚ Ă ƐŽůĂƌ ŚĞĂƚŝŶŐ ƐǇƐƚĞŵ ĂŶĚ ϱϬϬ ŝŶƚĞůůŝŐĞŶƚ ĞůĞĐƚƌŝĐĂů
ƐŚŽǁĞƌƐ͘ϯ͕ϬϰϮ h͛Ɛ ǁĞƌĞĂƚƚĞŶĚĞĚ͕ ϯ͕ϬϰϮ ƐŽůĂƌ ĐŽůůĞĐƚŽƌƐ ĂŶĚ ƚŚĞƌŵĂů ƌĞƐĞƌǀŽŝƌƐ͕ ĂŶĚ ϵ͕ϭϮϲ
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ǁĂƌĚͿ ŝŶ ƚŚĞ 'ŽŽĚ ŶǀŝƌŽŶŵĞŶƚĂů WƌĂĐƚŝĐĞƐ ĐĂƚĞŐŽƌǇ ĂŶĚ ŝŶ ƚŚĞ ϮϬϭϮ ŶŶƵĂů ^ƵƐƚĂŝŶĂďŝůŝƚǇ
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• W ŶŽ ƌĂƐŝů ǁĂƐ ůŝƐƚĞĚ ĂŵŽŶŐ ƚŚĞ ϭϬϬ ĞƐƚ ŽŵƉĂŶŝĞƐ ŝŶ ŽƌƉŽƌĂƚĞ ŝƚŝǌĞŶƐŚŝƉ͕ ǁŚŝĐŚ
ĂǁĂƌĚƐ ĐŽŵƉĂŶŝĞƐ ƚŚĂƚ ĂĚŽƉƚ ƉƌŝŶĐŝƉĂů ƉƌĂĐƚŝĐĞƐ ƌĞŐĂƌĚŝŶŐ ĐŽƌƉŽƌĂƚĞ ŐŽǀĞƌŶĂŶĐĞ͕ ŚƵŵĂŶ
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ǁĂƌĚͿ͕ĂŶĂƚŝŽŶĂůĂǁĂƌĚƚŚĂƚŵŽďŝůŝǌĞƐƚŚĞŚƵŵĂŶƌĞƐŽƵƌĐĞƐĐŽŵŵƵŶŝƚǇŝŶƚŚĞŽƵŶƚƌǇ͖
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͚&ŝŶĂŶĐŝĂů ŝƐĐůŽƐƵƌĞ WƌŽĐĞĚƵƌĞƐ͛ ĐĂƚĞŐŽƌǇ ĂŶĚ Ă dKW ϯ ͚ĞƐƚ &K͛ ĐĂƚĞŐŽƌǇ͘ dŚĞ /Z'Z
ĂĐŬŶŽǁůĞĚŐĞƐƚŚĞďĞƐƚĐŽŵŵƵŶŝĐĂƚŝŽŶƐƉƌĂĐƚŝĐĞƐďĞƚǁĞĞŶĐŽŵƉĂŶǇĂŶĚŝŶǀĞƐƚŽƌ͘/ŶƚŚĞϮϬϭϮ
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• ǆĞĐƵƚŝǀĞ DĂŶĂŐĞƌ ŽĨ /ŶǀĞƐƚŽƌ ZĞůĂƚŝŽŶƐ͕ DĂǇƚĞ ^ŽƵǌĂ ĂŶƚĂƐ ĚĞ ůďƵƋƵĞƌƋƵĞ͕ ǁĂƐ
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• W ŶŽ ƌĂƐŝů ǁĂƐ ĂǁĂƌĚĞĚ ŝŶ ƚŚĞ hƚŝůŝƚŝĞƐ ĐĂƚĞŐŽƌǇ ŝŶ ƚŚĞ ϭϮƚŚ ĞĚŝƚŝŽŶ ŽĨ ƚŚĞ ϭϬϬ н
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ƌĞĐĞŝǀĞĚ ƚŚĞ ĂǁĂƌĚ /d >ĞĂĚĞƌƐ ϮϬϭϮ͕ ƐƉŽŶƐŽƌĞĚ ďǇ ŽŵƉƵƚĞƌǁŽƌůĚ DĂŐĂǌŝŶĞ ŝŶ ƉĂƌƚŶĞƌƐŚŝƉ
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ŽƵƚƐƚĂŶĚŝŶŐĚƵƌŝŶŐƚŚĞǇĞĂƌ͘
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ĐŽŶƚƌĂĐƚ ǁŝƚŚ ĞůŽŝƚƚĞ dŽƵĐŚĞ dŽŚŵĂƚƐƵ ƵĚŝƚŽƌĞƐ /ŶĚĞƉĞŶĚĞŶƚĞƐ͕ ŝŶ ĞĐĞŵďĞƌ ϮϬϭϭ͕ ƚŽ
ƉƌŽǀŝĚĞĂƵĚŝƚƐĞƌǀŝĐĞƐĨŽƌŝƚƐŝŶƚĞƌŝŵĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͘ĞůŽŝƚƚĞďĞŐĂŶƉƌŽǀŝĚŝŶŐƐĞƌǀŝĐĞƐŝŶ
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dŚĞƐĞƌǀŝĐĞƐǁĞƌĞĐŽŶĐůƵĚĞĚŝŶϮϬϭϮ͘
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ĨŽƌ ƚŚĞ ǇĞĂƌƐ ĞŶĚĞĚ ĞĐĞŵďĞƌ ϯϭ͕ ϮϬϭϮ ĂŶĚ ϮϬϭϭ͘ dŚĞƐĞ ǁĞƌĞ ƉƌĞƉĂƌĞĚ ĂĐĐŽƌĚŝŶŐ ƚŽ ƚŚĞ
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/ŶƐƚƌƵĐƚŝŽŶŶŽ͘ϰϱϳŽĨ:ƵůǇϭϯ͕ϮϬϬϳ͘
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dŚĞ ĂƌĚ ŽĨ W ŶĞƌŐŝĂƐ ĚŽ ƌĂƐŝů ǁŽƵůĚ ůŝŬĞ ƚŽ ƚŚĂŶŬ Ăůů ƚŚŽƐĞ ǁŚŽ ŚĂǀĞ ǁŽƌŬĞĚ ĂŶĚ
ĐŽŶƚƌŝďƵƚĞĚ ƚŽǁĂƌĚ ƚŚĞ ĂĐŚŝĞǀĞŵĞŶƚ ĂŶĚ ƐƵƉƉŽƌƚ ŽĨ ŝƚƐ ƉŽƐŝƚŝŽŶ ŽĨ ƉƌŽŵŝŶĞŶĐĞ ƚŚĂƚ ƚŚĞ
ĐŽŵƉĂŶǇ ŚĂƐ ŝŶ ƚŚĞ ĚŽŵĞƐƚŝĐ ƐĐĞŶĂƌŝŽ͘ tĞ ĞƐƉĞĐŝĂůůǇ ǁŝƐŚ ƚŽ ĞǆƉƌĞƐƐ ŽƵƌ ŐƌĂƚŝƚƵĚĞ ĨŽƌ ƚŚĞ
ĨĂŝƚŚ ŽĨ ŽƵƌ ƐŚĂƌĞŚŽůĚĞƌƐ͕ ĐůŝĞŶƚƐ ĂŶĚ ƚŚĞ ĞĨĨŽƌƚƐ ĂŶĚ ĐŽŵƉĞƚĞŶĐĞ ŽĨ ŽƵƌ ĐŽůůĂďŽƌĂƚŽƌƐ͘ tĞ
ǁŽƵůĚ ĂůƐŽ ůŝŬĞ ƐŚŽǁ ŝƚƐ ĂƉƉƌĞĐŝĂƚŝŽŶ ĨŽƌ ƚŚĞ ƐƵƉƉŽƌƚ ĨƌŽŵ ŽƵƌ ƐƵƉƉůŝĞƌƐ͕ ƉĂƌƚŶĞƌƐ ĂŶĚ ŽƚŚĞƌ
ƐƚĂŬĞŚŽůĚĞƌƐ͘
&Žƌ ĨƵƌƚŚĞƌ ŝŶĨŽƌŵĂƚŝŽŶ ƌĞŐĂƌĚŝŶŐ W ŶĞƌŐŝĂƐ ĚŽ ƌĂƐŝů ^͘͘ ĂƉĂĐŝƚǇ ƚŽ /ŶŶŽǀĂƚĞ
ŵĂŶĂŐĞŵĞŶƚ͕ĐŽŶƐƵůƚŽƵƌŶŶƵĂůZĞƉŽƌƚǁŚŝĐŚǁŝůůďĞĂǀĂŝůĂďůĞƚŚƌŽƵŐŚƚŚĞĐŽŵŵƵŶŝĐĂƚŝŽŶƐ
ŵĞĂŶƐŽĨƚŚĞĐŽŵƉĂŶǇďĞŐŝŶŶŝŶŐŝŶƚŚĞƐĞĐŽŶĚƋƵĂƌƚĞƌϮϬϭϯ͘
ϭϭϮ
(Convenience Translation into English from the Original Previously Issued in Portuguese)
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors and Shareholders of
EDP - Energias do Brasil S.A.
São Paulo, SP
We have audited the accompanying individual and consolidated financial statements of EDP Energias do Brasil S.A. (“Company”), identified as Parent and Consolidated, respectively, which
comprise the balance sheet as at December 31, 2012, and the income statement, statement of
comprehensive income, statement of changes in equity and statement of cash flows for the year then
ended, and a summary of significant accounting policies and other explanatory information.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of the individual financial
statements in accordance with accounting practices adopted in Brazil and the consolidated financial
statements in accordance with International Financial Reporting Standards (IFRS), issued by the
International Accounting Standards Board - IASB, and in accordance with accounting practices
adopted in Brazil, and for such internal control as management determines is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Brazilian and International Standards on Auditing. Those
standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatements of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the Company’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by Management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our qualified audit opinion.
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© 2013 Deloitte Touche Tohmatsu. All rights reserved.
Basis for qualified opinion
Participating financial instruments in the subsidiary Lajeado Energia S.A.
As described in Note 27.4.1 to the financial statements, subsidiary Lajeado Energia S.A.
(“Lajeado”) issued in 2006 participating financial instruments (“Partes Beneficiárias”) to third
parties, in the amount of R$451 million.Ssince the issuance date, such instruments have been
recorded in Lajeado’s shareholders’ equity. In the Company’s consolidated financial statements, the
corresponding balance was recorded as noncontrolling interests, as part of the consolidated
shareholders’ equity. Considering that these participating financial instruments have features of
compound financial instruments, in accordance with accounting practices adopted in Brazil and the
International Financial Reporting Standards, the respective balance should not have been fully
classified as shareholders’ equity. Rather, a substantial portion of the amount should have been
recorded as liabilities. The liability portion would be represented by the minimum amount that the
Company shall pay to the holder of the participating financial instruments over the instrument’s life.
As the Company has a different understanding on the matter, the minimum cash amount it should
pay to the holder of the respective participating financial instruments was not recorded as part of
liabilities. Consequently, as at December 31, 2012, the Company’s consolidated shareholders’
equity is overstated and liabilities are understated by a undetermined amount, and profit (loss) for
the year did not reflect any effects of the adjustments that might be required due to this matter.
Qualified opinion on the individual financial statements
In our opinion, except for the matter described in the ‘Basis for qualified opinion’ paragraph, the
individual financial statements present fairly, in all material respects, the financial position of EDP Energias do Brasil S.A. as at December 31, 2012, and its financial performance and its cash flows
for the year then ended in accordance with accounting practices adopted in Brazil.
Qualified opinion on the consolidated financial statements
In our opinion, except for the effects of the matters described in the ‘Basis for qualified opinion’
paragraph, the consolidated financial statements present fairly, in all material respects, the
consolidated financial position of EDP - Energias do Brasil S.A. as at December 31, 2012, and its
consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with International Financial Reporting Standards (IFRS) issued by the International
Accounting Standard Board (IASB) and accounting practices adopted in Brazil.
Emphasis of matter
Depreciation of assets intended for generation of electric power under an independent production
regime
As described in Note 2.2(g) to the financial statements, assets intended for generation of electric
power under the independent production regime are depreciated over their estimated useful lives,
considering the facts and circumstances mentioned in that Note. As the regulatory agency or the
concession grantor releases new information or issues new decisions, the current depreciation term
for such assets may be changed. Our opinion has not been qualified regarding this matter.
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Deloitte Touche Tohmatsu
Presentation of individual and consolidated financial statements as a single set
As described in Note 2.1.1 to the financial statements, the individual financial statements have been
prepared in accordance with accounting practices adopted in Brazil. In the case of EDP - Energias
do Brasil S.A., these practices differ from the IFRS applicable to separate financial statements only
with respect to the accounting for investments in subsidiaries, associates and joint ventures by the
equity method of accounting, which, for IFRS purposes, would be measured at cost or fair value.
Our opinion is not qualified regarding this matter.
Other matters
Statements of value added
We have also audited the individual and consolidated statements of value added (“DVA”) for the
year ended December 31, 2012, prepared under the responsibility of the Company’s management,
the presentation of which is required by the Brazilian Corporate Law for publicly-traded companies
and as supplemental information for IFRS, which does not require the presentation of a DVA.
These statements were subject to the same auditing procedures as those described above and, in our
opinion, except for the effect of the matter described in the ‘Basis for qualified opinion paragraph,
are fairly presented, in all material respects, in relation to the financial statements taken as a whole.
Audit of corresponding figures in the prior year
Except for the effects of the reclassifications presented in Note 2.7 to the Company’s individual and
consolidated financial statements, which have not been audited by us or other independent auditors,
the information and amounts corresponding to the year ended December 31, 2011, presented for
purposes of comparison, were previously audited by other independent auditors who issued a report
thereon dated February 29, 2012, without any modifications.
The accompanying financial statements have been translated into English for the convenience of
readers outside Brazil.
São Paulo, February 25, 2013
DELOITTE TOUCHE TOHMATSU
Auditores Independentes
Iara Pasian
Engagement Partner
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EDP - Energias do Brasil SA

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