cbditr2q16_6k.htm - Generated by SEC Publisher for SEC Filing

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of July, 2016

           Brazilian Distribution Company           
(Translation of Registrant’s Name Into English)

Av. Brigadeiro Luiz Antonio,
3142 São Paulo, SP 01402-901
     Brazil     
(Address of Principal Executive Offices)

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

Form 20-F   X   Form 40-F       

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

Yes ___ No   X  

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101 (b) (7)):

Yes ___ No   X  

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

Yes ___ No   X  


 
 

 

 

(FreeTranslation into English from the Original Previously Issued in Portuguese)

  

Companhia Brasileira
de Distribuição

Individual and Consolidated
Interim Financial Information for the
Quarter Ended June 30, 2016 and
Report on Review of Interim Financial Information

Deloitte Touche Tohmatsu Auditores Independentes

 


 
 

 

 

(Convenience Translation into English from the Original Previously Issued in Portuguese)

REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION

To the Shareholders, Directors and Officers of

Companhia Brasileira de Distribuição

São Paulo - SP

Introduction

We have reviewed the accompanying individual and consolidated interim financial information of Companhia Brasileira de Distribuição (the “Company”), included in the Interim Financial Information Form (ITR), for the quarter ended June 30, 2016, which comprises the balance sheet as of June 30, 2016 and the related statements of profit or loss and of comprehensive income for the three- and six-month periods then ended, and the statements of changes in equity and of cash flows for the six-month period then ended, including the explanatory notes.

Management is responsible for the preparation of the individual and consolidated interim financial information in accordance with technical pronouncement CPC 21 (R1) and international standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, as well as for the presentation of such information in accordance with the standards issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of Interim Financial Information (ITR). Our responsibility is to express an opinion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with Brazilian and international standards on review of interim financial information (NBC TR 2410 and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the standards on auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion on the interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the ITR referred to above is not prepared, in all material respects, in accordance with CPC 21 (R1) and IAS 34 applicable to the preparation of Interim Financial Information (ITR) and presented in accordance with the standards issued by the CVM.

 

© 2016 Deloitte Touche Tohmatsu. All rights reserved.


 
 
 

Deloitte Touche Tohmatsu

 

Emphasis of matter

We draw attention to note 1.2 to the interim financial information, which describes that, as a result of the adjustments identified after the completion of the investigation on indirect subsidiary Cnova Comércio Eletrônico S.A., the respective individual and consolidated financial information related to the statements of profit or loss and of comprehensive income for the three- and six-month periods ended June 30, 2015, and the statements of changes in equity and of cash flows for the six-month period then ended, presented for purposes of comparison, were adjusted and are being restated as provided for by CPC 23 - Accounting Policies, Changes in Accounting Estimates and Errors and CPC 26 (R1) - Presentation of Financial Statements. Our conclusion is not qualified in respect of this matter.

Other matters

Statements of value added

We have also reviewed the individual and consolidated interim statements of value added (“DVA”) for the six-month period ended June 30, 2016, prepared under Management’s responsibility, the presentation of which is required by the standards issued by the CVM applicable to the preparation of Interim Financial Information (ITR), and is considered as supplemental information under International Financial Reporting Standards - IFRSs, which do not require the presentation of a DVA. The corresponding individual and consolidated information for the six-month period ended June 30, 2015 was amended and is being restated to reflect the adjustments described in note 1.2 to the interim financial information. These statements were subject to the same review procedures described above and, based on our review, nothing has come to our attention that causes us to believe that they are not prepared, in all material respects, consistently with the interim financial statements taken as a whole.

The accompanying interim financial information has been translated into English for the convenience of readers outside Brazil.

São Paulo, July 27, 2016

DELOITTE TOUCHE TOHMATSU

Eduardo Franco Tenório

Auditores Independentes

Engagement Partner

 

 

2016-0842

 

 

© 2016 Deloitte Touche Tohmatsu. All rights reserved.


 
 
 

 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 
 

Company Information

 

Capital Composition

2

Individual Interim Financial Information

 

Balance Sheet – Assets

3

Balance Sheet – Liabilities

4

Statement of Profit or Loss

5

Statement of Comprehensive Income

6

Statement of Cash Flows

7

Statement of Changes in Shareholders’ Equity

 

1/1/2016 to 6/30/2016

8

1/1/2015 to 6/30/2015

9

Statement of Value Added

10

Consolidated Interim Financial Information

 

Balance Sheet – Assets

11

Balance Sheet – Liabilities

12

Statement of Profit or Loss

13

Statement of Comprehensive Income

14

Statement of Cash Flows

15

Statement of Changes in Shareholders’ Equity

 

1/1/2016 to 6/30/2016

16

1/1/2015 to 6/30/2015

17

Statement of Value Added

18

Comments on the Company`s Performance

19

Notes to the Interim Financial Information

43

Other information deemed as relevant by the Company

99

 

1

 


 
 
 

 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

 

 

Number of Shares

(thousand)

Current Quarter

6/30/2016

Share Capital

 

Common

99,680

Preferred

166,044

Total

265,724

Treasury Shares

 

Common

-

Preferred

233

Total

233

 

2

 


 
 
 

 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

  
                                                                                                                                                                                        

Companhia Brasileira de Distribuição

 

 

Individual Interim Financial Information / Balance Sheet - Assets

       

R$ (in thousands)

   

Code

Description

Current Quarter
6.30.2016

Previous Year
12.31.2015

1

Total Assets

21,070,000

21,399,000

1.01

Current Assets

5,698,000

6,176,000

1.01.01

Cash and Cash Equivalents

1,047,000

2,247,000

1.01.03

Accounts Receivable

897,000

520,000

1.01.03.01

Trade Receivables

768,000

387,000

1.01.03.02

Other Receivables

129,000

133,000

1.01.04

Inventories

3,047,000

2,828,000

1.01.06

Recoverable Taxes

491,000

357,000

1.01.07

Prepaid Expenses

161,000

74,000

1.01.08

Other Current Assets

55,000

150,000

1.02

Noncurrent Assets

15,372,000

15,223,000

1.02.01

Long-term Assets

1,555,000

2,205,000

1.02.01.03

Accounts Receivable

72,000

67,000

1.02.01.03.02

Other Receivables

72,000

67,000

1.02.01.06

Deferred Taxes

119,000

50,000

1.02.01.07

Prepaid Expenses

16,000

19,000

1.02.01.08

Receivables from Related Parties

321,000

1,076,000

1.02.01.09

Other Noncurrent Assets

1,027,000

993,000

1.02.01.09.04

Recoverable Taxes

519,000

534,000

1.02.01.09.05

Restricted Deposits for Legal Proceedings

508,000

459,000

1.02.02

Investments

5,275,000

5,173,000

1.02.02.01

Investments in Associates and Subsidiaries

5,250,000

5,149,000

1.02.02.01.02

Investments in Subsidiaries

5,250,000

5,149,000

1.02.02.02

Investment properties

25,000

24,000

1.02.03

Property and Equipment, Net

7,155,000

6,525,000

1.02.04

Intangible Assets

1,387,000

1,320,000

 

 

3

 


 
 
 

 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

 

Companhia Brasileira de Distribuição

 

Individual Interim Financial Information / Balance Sheet - Liabilities

   
       

R$ (in thousands)

   

Code

Description

Current Quarter
6.30.2016

Previous Year
12.31.2015

2

Total Liabilities

21,070,000

21,399,000

2.01

Current Liabilities

6,880,000

6,375,000

2.01.01

Payroll and Related Taxes

419,000

390,000

2.01.02

Trade Payables

3,000,000

4,103,000

2.01.03

Taxes and Contributions Payable

139,000

135,000

2.01.04

Borrowings and Financing

2,496,000

828,000

2.01.05

Other Liabilities

823,000

915,000

2.01.05.01

Payables to Related Parties

481,000

268,000

2.01.05.02

Other

342,000

647,000

2.01.05.02.04

Utilities

10,000

3,000

2.01.05.02.05

Rent Payable

69,000

83,000

2.01.05.02.06

Advertisement Payable

50,000

45,000

2.01.05.02.07

Pass-through to Third Parties

4,000

43,000

2.01.05.02.08

Financing Related to Acquisition of Assets

54,000

100,000

2.01.05.02.09

Deferred Revenue

27,000

28,000

2.01.05.02.11

Other Payables

100,000

318,000

2.01.05.02.12

Loalty Programs

28,000

27,000

2.01.06

Provisions

3,000

4,000

2.02

Noncurrent Liabilities

4,080,000

4,670,000

2.02.01

Borrowings and Financing

2,412,000

3,277,000

2.02.02

Other Liabilities

981,000

871,000

2.02.02.02

Other

981,000

871,000

2.02.02.02.03

Taxes Payable in Installments

555,000

572,000

2.02.02.02.05

Financing Related to Acquisition of Assets

4,000

4,000

2.02.02.02.07

Other Accounts Payable

26,000

19,000

2.02.02.02.08

Provision for Negative Equity

397,000

276,000

2.02.04

Provisions

657,000

490,000

2.02.06

Deferred Revenue

29,000

32,000

2.03

Shareholders’ Equity

10,110,000

10,354,000

2.03.01

Share Capital

6,807,000

6,806,000

2.03.02

Capital Reserves

313,000

302,000

2.03.02.04

Options Granted

306,000

295,000

2.03.02.07

Capital Reserve

7,000

7,000

2.03.04

Earnings Reserve

3,331,000

3,333,000

2.03.04.01

Legal Reserve

426,000

426,000

2.03.04.05

Earnings Retention Reserve

275,000

400,000

2.03.04.10

Expansion Reserve

2,743,000

2,624,000

2.03.04.12

Transactions with non-controlling interests

37,000

33,000

2.03.04.14

Settlement of Equity Instrument

(150,000)

(150,000)

2.03.05

Retained Earnings/ Accumulated Losses

(326,000)

-

2.03.08

Other Comprehensive Income

(15,000)

(87,000)

 

 

4

 


 
 
 

 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

                                                                                                                                                                                          

 

Companhia Brasileira de Distribuição

 

Individual Interim Financial Information / Statement of Profit or Loss

 
           

R$ (in thousands)

       

Code

Description

Year To Date
Current Period
1/04/2016 to
6/30/2016

Year To Date
Current Period
1/01/2016

to
6/30/2016

Year To Date
Previous Period
1/04/2015 to
6/30/2015

Year To Date
Previous Period
1/01/2015 to
6/30/2015

3.01

Net Sales of Goods and/or Services

6,048,000

11,800,000

5,471,000

10,985,000

3.02

Cost of Goods Sold and/or Services Sold

(4,275,000)

(8,564,000)

(3,955,000)

(8,027,000)

3.03

Gross Profit

1,773,000

3,236,000

1,516,000

2,958,000

3.04

Operating Income/Expenses

(1,886,000)

(3,261,000)

(1,253,000)

(2,319,000)

3.04.01

Selling Expenses

(1,257,000)

(2,351,000)

(1,000,000)

(1,943,000)

3.04.02

General and Administrative Expenses

(159,000)

(293,000)

(105,000)

(234,000)

3.04.05

Other Operating Expenses

(350,000)

(527,000)

(187,000)

(330,000)

3.04.05.01

Depreciation/Amortization

(137,000)

(262,000)

(119,000)

(236,000)

3.04.05.02

Gain (Loss) on Disposal of Fixed Assets

(213,000)

(265,000)

(68,000)

(94,000)

3.04.06

Share of Profit of Subsidiaries and Associates

(120,000)

(90,000)

39,000

188,000

3.05

Profit before Financial Income (Expenses) and Taxes

(113,000)

(25,000)

263,000

639,000

3.06

Financial Income (Expenses)

(209,000)

(377,000)

(184,000)

(352,000)

3.07

Profit (loss) Before Income Tax and Social Contribution

(322,000)

(402,000)

79,000

287,000

3.08

Income Tax and Social Contribution

47,000

76,000

(13,000)

(29,000)

3.08.01

Current

1,000

7,000

(1,000)

(1,000)

3.08.02

Deferred

46,000

69,000

(12,000)

(28,000)

3.09

Net Income (loss) from Continued Operations

(275,000)

(326,000)

66,000

258,000

3.11

Net Income (loss) for the Period

(275,000)

(326,000)

66,000

258,000

3.99

 

-

-

-

-

3.99.01

Basic Earnings per Share

-

-

-

-

3.99.01.01

Common

(1.03758)

(1.22968)

0.23313

0.91444

3.99.01.02

Preferred

(1.03758)

(1.22968)

0.25644

1.00589

3.99.02

Diluted Earnings per Share

-

-

-

-

3.99.02.01

Common

(1.03758)

(1.22968)

0.23313

0.91444

3.99.02.02

Preferred

(1.03758)

(1.22968)

0.25576

1.00379

 

 

5

 


 
 
 

 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

 

                                                                                                                                                                                          

Companhia Brasileira de Distribuição

 

Individual Interim Financial Information / Statement of Comprehensive Income

           

R$ (in thousands)

       

Code

Description

Year To Date
Current Period
1/01/2016 to
6/30/2016

Year To Date
Previous Period
1/01/2015 to
6/30/2016

Year To Date
Previous Period
4/01/2015 to
6/30/2015

Year To Date
Previous Period
1/01/2015 to
6/30/2015

4.01

Net income (loss) for the Period

(275,000)

(326,000)

66,000

258,000

4.02

Other Comprehensive Income

56,000

72,000

(5,000)

(11,000)

4.02.01

Accumulative Translation Adjustment for the Period

56,000

72,000

(5,000)

(11,000)

4.03

Total Comprehensive Income for the Period

(219,000)

(254,000)

61,000

247,000

 

 

6

 


 
 
 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

                                                                                                                                                                                          

Companhia Brasileira de Distribuição

 

Individual Interim Financial Information / Statement of Cash Flows - Indirect Method

       

R$ (in thousands)

   

Code

Description

Year To Date
Current Period
1/01/2016 to
6/30/2016

Year To Date
Previous Period
1/01/2015 to
6/30/2015

6.01

Net Cash Provided by Operating Activities

(1,502,000)

218,000

6.01.01

Cash Provided by the Operations

623,000

757,000

6.01.01.01

Net Income for the Period

(326,000)

258,000

6.01.01.02

Deferred Income and Social Contribution Taxes (note 20)

(69,000)

28,000

6.01.01.03

Gain (Losses) on Disposal of Fixed Assets and Intangibles

37,000

14,000

6.01.01.04

Depreciation/Amortization

283,000

260,000

6.01.01.05

Interest and Inflation Adjustments

332,000

359,000

6.01.01.06

Adjustment to Present Value

-

2,000

6.01.01.07

Share of Profit (Loss) of Subsidiaries and Associates (note 13)

90,000

(188,000)

6.01.01.08

Provision for Risks (note 22)

150,000

(5,000)

6.01.01.10

Share-based Payment

11,000

9,000

6.01.01.11

Allowance for Doubtful Accounts (note 08)

(1,000)

-

6.01.01.13

Provision for Obsolescence/Breakage (note 10)

17,000

(2,000)

6.01.01.14

Other Operating Expenses

104,000

42,000

6.01.01.15

Deferred Revenue (note 24)

(5,000)

(20,000)

6.01.02

Changes in Assets and Liabilities

(2,125,000)

(539,000)

6.01.02.01

Accounts Receivable

(228,000)

130,000

6.01.02.02

Recoverable Taxes

273,000

(122,000)

6.01.02.03

Inventories

(67,000)

194,000

6.01.02.04

Other Assets

132,000

5,000

6.01.02.06

Trade Payables

(1,560,000)

(866,000)

6.01.02.07

Payroll and Related Taxes

(6,000)

(29,000)

6.01.02.08

Related Parties

(278,000)

(159,000)

6.01.02.09

Restricted Deposits for Legal Proceeding

(38,000)

(33,000)

6.01.02.10

Taxes and Social Contributions Payable

(62,000)

(107,000)

6.01.02.11

Legal claims

(19,000)

(12,000)

6.01.02.12

Received Dividends

10,000

416,000

6.01.02.13

Other Payables

(282,000)

23,000

6.01.02.14

Deferred Revenue

-

21,000

6.02

Net Cash Provided by (Used in) Investing Activities

(126,000)

(405,000)

6.02.02

Acquisition of Property and Equipment (note 14)

(237,000)

(344,000)

6.02.03

Increase in Intangible Assets (note 15)

(46,000)

(71,000)

6.02.04

Sales of Property and Equipment (note 14)

2,000

10,000

6.02.07

Net cash from sale os subsidiary

155,000

-

6.03

Net Cash Provided by (Used in) Financing Activities

428,000

(1,714,000)

6.03.01

Capital Increase

1,000

13,000

6.03.02

Borrowings

899,000

215,000

6.03.03

Payments (note 17)

(469,000)

(1,706,000)

6.03.05

Payment of Dividends

(3,000)

(232,000)

6.03.06

Transactions with Non-controlling Interest

-

(4,000)

6.05

Net Increase (Decrease) in Cash and Cash Equivalents

(1,200,000)

(1,901,000)

6.05.01

Cash and Cash Equivalents at the Beginning of the Period

2,247,000

2,923,000

6.05.02

Cash and Cash Equivalents at the End of the Period

1,047,000

1,022,000

 
 

7

 


 
 
 

 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 
 

                                                                                                                                                                                          

Companhia Brasileira de Distribuição

 

 

Individual Interim Financial Information / Statement of Changes in Shareholders' Equity 01/01/2016 to 6/30/2016

               

R$ (in thousands)

 

 

 

 

 

 

Code

Description

Share
Capital

Capital Reserves,
Options Granted and
Treasury Shares

Earnings
Reserve

Retained Earnings /Accumulated Losses

Other comprehensive income

Shareholders'
Equity

5.01

Opening Balance

6,806,000

302,000

3,333,000

-

(87,000)

10,354,000

5.03

Adjusted Opening Balance

6,806,000

302,000

3,333,000

-

(87,000)

10,354,000

5.04

Capital Transactions with Shareholders

1,000

11,000

(3,000)

-

-

9,000

5.04.01

Capital Increases

1,000

-

-

-

-

1,000

5.04.03

Options Granted

-

7,000

-

-

-

7,000

5.04.08

Mandatory Minimun Dividens (note 25.9)

-

-

(3,000)

-

-

(3,000)

5.04.09

Options Granted recognized in subsidiaries

-

4,000

-

-

-

4,000

5.05

Total Comprehensive Income

-

-

-

(326,000)

72,000

(254,000)

5.05.01

Net Income (loss) for the Period

-

-

-

(326,000)

-

(326,000)

5.05.02

Other Comprehensive Income

-

-

-

-

72,000

72,000

5.05.02.04

Cumulative Translation Adjustment

-

-

-

-

72,000

72,000

5.06

Internal Changes of Shareholders’ Equity

-

-

1,000

-

-

1,000

5.06.05

Transactions with Non-controlling Interests

-

-

1,000

-

-

-

5.07

Closing Balance

6,807,000

313,000

3,331,000

(326,000)

(15,000)

10,110,000

 
 

8

 


 
 
 

 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

                                                                                                                                                                                          

 

Companhia Brasileira de Distribuição

 

Individual Interim Financial Information / Statement of Changes in Shareholders' Equity 01/01/2015 to 6/30/2015

               

R$ (in thousands)

 

 

 

 

 

 

Code

Description

Share
Capital

Capital Reserves,
Options Granted and
Treasury Shares

Earnings
Reserve

Retained Earnings /Accumulated Losses

Other comprehensive Income

Shareholders'
Equity

5.01

Opening Balance

6,792,000

282,000

3,402,000

-

1,000

10,477,000

5.03

Adjusted Opening Balance

6,792,000

282,000

3,402,000

-

1,000

10,477,000

5.04

Capital Transactions with Shareholders

13,000

9,000

-

(38,000)

-

(16,000)

5.04.01

Capital Increases

13,000

-

-

-

-

13,000

5.04.03

Options Granted

-

6,000

-

-

-

6,000

5.04.06

Dividends

-

-

-

(38,000)

-

(38,000)

5.04.08

Options Granted recognized in subsidiaries

-

3,000

-

-

-

3,000

5.05

Total Comprehensive Income

-

-

-

258,000

(12,000)

246,000

5.05.01

Net Income for the Period

-

-

-

258,000

-

258,000

5.05.02

Other Comprehensive Income

-

-

-

-

(12,000)

(12,000)

5.05.02.04

Cumulative Translation Adjustment

-

-

-

-

(11,000)

(11,000)

5.05.02.06

Defined benefit plan

-

-

-

-

(1,000)

(1,000)

5.06

Internal Changes of Shareholders’ Equity

-

-

(4,000)

-

-

(4,000)

5.06.05

Transactions with Non-controlling Interests

-

-

(4,000)

-

-

(4,000)

5.07

Closing Balance

6,805,000

291,000

3,398,000

220,000

(11,000)

10,703,000

 

 

9

 


 
 
 

 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

 

 

Companhia Brasileira de Distribuição

 

 

Individual Interim Financial Information / Statement of Value Added

       

R$ (in thousands)

   

Code

Description

Year To Date
Current Period
1/01/2016 to
6/30/2016

Year To Date
Previous Period
1/01/2015 to
6/30/2015

7.01

Revenues

12,802,000

11,900,000

7.01.01

Sales of Goods, Products and Services

12,810,000

11,898,000

7.01.02

Other Revenues

5,000

2,000

7.01.04

Allowance for/Reversal of Doubtful Accounts

(13,000)

-

7.02

Products Acquired from Third Parties

(10,090,000)

(9,225,000)

7.02.01

Costs of Products, Goods and Services Sold

(8,549,000)

(8,155,000)

7.02.02

Materials, Energy, Outsourced Services and Other

(1,541,000)

(1,070,000)

7.03

Gross Value Added

2,712,000

2,675,000

7.04

Retention

(283,000)

(260,000)

7.04.01

Depreciation and Amortization

(283,000)

(260,000)

7.05

Net Value Added Produced

2,429,000

2,415,000

7.06

Value Added Received in Transfer

(13,000)

320,000

7.06.01

Share of Profit of Subsidiaries and Associates

(90,000)

188,000

7.06.02

Financial Revenue

77,000

132,000

7.07

Total Value Added to Distribute

2,416,000

2,735,000

7.08

Distribution of Value Added

2,416,000

2,735,000

7.08.01

Personnel

1,383,000

1,279,000

7.08.01.01

Direct Compensation

905,000

868,000

7.08.01.02

Benefits

290,000

279,000

7.08.01.03

Government Severance Indemnity Fund for Employees (FGTS)

85,000

73,000

7.08.01.04

Other

103,000

59,000

7.08.02

Taxes, Fees and Contributions

605,000

456,000

7.08.02.01

Federal

351,000

290,000

7.08.02.02

State

181,000

108,000

7.08.02.03

Municipal

73,000

58,000

7.08.03

Value Distributed to Providers of Capital

754,000

742,000

7.08.03.01

Interest

451,000

484,000

7.08.03.02

Rentals

303,000

258,000

7.08.04

Value Distributed to Shareholders

(326,000)

258,000

7.08.04.02

Dividends

1,000

38,000

7.08.04.03

Retained Earnings/ Accumulated Losses for the Period

(327,000)

220,000

 
 

10

 


 
 
 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

 

Companhia Brasileira de Distribuição

 

 

Consolidated Interim Financial Information /Balance Sheet - Assets

       

R$ (in thousands)

   

Code

Description

Current Quarter
6.30.2016

Previous Year
12.31.2015

1

Total Assets

42,034,000

47,241,000

1.01

Current Assets

19,448,000

24,960,000

1.01.01

Cash and Cash Equivalents

3,716,000

11,015,000

1.01.03

Accounts Receivable

4,655,000

3,585,000

1.01.03.01

Trade Receivables

4,310,000

3,210,000

1.01.03.02

Other Receivables

345,000

375,000

1.01.04

Inventories

8,943,000

8,965,000

1.01.06

Recoverable Taxes

1,547,000

1,080,000

1.01.07

Prepaid Expenses

379,000

157,000

1.01.08

Other Current Assets

208,000

158,000

1.02

Noncurrent Assets

22,586,000

22,281,000

1.02.01

Long-term Assets

5,114,000

4,954,000

1.02.01.03

Accounts Receivable

751,000

723,000

1.02.01.03.01

Trade Receivables

119,000

98,000

1.02.01.03.02

Other Receivables

632,000

625,000

1.02.01.06

Deferred Taxes

330,000

406,000

1.02.01.07

Prepaid Expenses

67,000

50,000

1.02.01.08

Receivables from Related Parties

342,000

309,000

1.02.01.09

Other Noncurrent Assets

3,624,000

3,466,000

1.02.01.09.04

Recoverable Taxes

2,473,000

2,467,000

1.02.01.09.05

Restricted Deposits for Legal Proceedings

1,151,000

999,000

1.02.02

Investments

468,000

407,000

1.02.02.01

Investments in Associates

443,000

382,000

1.02.02.02

Investments Property

25,000

25,000

1.02.03

Property and Equipment, Net

10,532,000

10,377,000

1.02.04

Intangible Assets

6,472,000

6,543,000

 
 

11

 


 
 
 

 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

 

 

Companhia Brasileira de Distribuição

 

 

Consolidated Interim Financial Information / Balance Sheet - Liabilities

       

R$ (in thousands)

   

Code

Description

Current Quarter
6.30.2016

Previous Year
12.31.2015

2

Total Liabilities

42,034,000

47,241,000

2.01

Current Liabilities

21,667,000

25,273,000

2.01.01

Payroll and Related Taxes

1,052,000

1,023,000

2.01.02

Trade Payables

10,268,000

15,508,000

2.01.03

Taxes and Contributions Payable

729,000

830,000

2.01.04

Borrowings and Financing

6,114,000

3,814,000

2.01.05

Other Liabilities

3,496,000

4,092,000

2.01.05.01

Payables to Related Parties

1,247,000

563,000

2.01.05.02

Other

2,249,000

3,529,000

2.01.05.02.01

Dividends and Interest on Capital Payable

3,000

-

2.01.05.02.04

Utilities

13,000

16,000

2.01.05.02.05

Rent Payable

119,000

151,000

2.01.05.02.06

Advertisement Payable

67,000

121,000

2.01.05.02.07

Pass-through to Third Parties

313,000

398,000

2.01.05.02.08

Financing Related to Acquisition of Assets

113,000

114,000

2.01.05.02.09

Deferred revenue

350,000

420,000

2.01.05.02.11

Accounts Payable Related to Acquisition of Companies

82,000

76,000

2.01.05.02.12

Other Payables

731,000

1,148,000

2.01.05.02.13

Loalty Programs

28,000

30,000

2.01.05.02.14

Suppliers - structured program

430,000

1,055,000

2.01.06

Provisions

8,000

6,000

2.02

Noncurrent Liabilities

7,484,000

8,616,000

2.02.01

Borrowings and Financing

2,894,000

4,164,000

2.02.02

Other Liabilities

631,000

649,000

2.02.02.02

Other

631,000

649,000

2.02.02.02.03

Taxes Payable in Installments

555,000

572,000

2.02.02.02.04

Payables Related to Acquisition of Companies

23,000

28,000

2.02.02.02.05

Financing Related to Acquisition of Assets

4,000

4,000

2.02.02.02.06

Pension Plan

10,000

11,000

2.02.02.02.07

Other Payables

39,000

34,000

2.02.03

Deferred Taxes

1,058,000

1,184,000

2.02.04

Provisions

1,784,000

1,396,000

2.02.06

Deferred revenue

1,117,000

1,223,000

2.03

Consolidated Shareholders’ Equity

12,883,000

13,352,000

2.03.01

Share Capital

6,807,000

6,806,000

2.03.02

Capital Reserves

313,000

302,000

2.03.02.04

Options Granted

306,000

295,000

2.03.02.07

Capital Reserve

7,000

7,000

2.03.04

Earnings Reserve

3,331,000

3,333,000

2.03.04.01

Legal Reserve

426,000

426,000

2.03.04.05

Earnings Retention Reserve

275,000

400,000

2.03.04.10

Expansion Reserve

2,743,000

2,624,000

2.03.04.12

Transactions with Non-Controlling interests

37,000

33,000

2.03.04.14

Settlement of Equity Instrument

(150,000)

(150,000)

2.03.05

Retained Earnings/ Accumulated Losses

(326,000)

-

2.03.08

Other Comprehensive Income

(15,000)

(87,000)

2.03.09

Non-controlling Interests

2,773,000

2,998,000

 
 

12

 


 
 
 

 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

 

 

Companhia Brasileira de Distribuição

Consolidated Interim Financial Information / Statement of Profit or Loss

 
           

R$ (in thousands)

       

Code

Description

Year To Date
Current Period
1/01/2016 to
6/30/2016

Year To Date
Previous Period
1/01/2015 to
6/30/2015

Year To Date
Current Period
1/04/2016 to
6/30/2016

Year To Date
Previous Period
1/01/2015 to
6/30/2015

3.01

Net Sales from Goods and/or Services

16,684,000

34,458,000

16,113,000

33,327,000

3.02

Cost of Goods Sold and/or Services Sold

(12,442,000)

(26,301,000)

(12,248,000)

(25,324,000)

3.03

Gross Profit

4,242,000

8,157,000

3,865,000

8,003,000

3.04

Operating Income/Expenses

(4,244,000)

(7,982,000)

(3,458,000)

(6,909,000)

3.04.01

Selling Expenses

(3,083,000)

(6,047,000)

(2,770,000)

(5,491,000)

3.04.02

General and Administrative Expenses

(458,000)

(946,000)

(397,000)

(858,000)

3.04.05

Other Operating Expenses

(732,000)

(1,050,000)

(325,000)

(622,000)

3.04.05.01

Depreciation/Amortization

(251,000)

(501,000)

(240,000)

(469,000)

3.04.05.02

Other Operating Expenses

(481,000)

(549,000)

(85,000)

(153,000)

3.04.06

Share of Profit of Subsidiaries and Associates

29,000

61,000

34,000

62,000

3.05

Profit before Financial Income (Expenses) and Taxes

(2,000)

175,000

407,000

1,094,000

3.06

Financial Income (Expenses), Net

(590,000)

(907,000)

(417,000)

(699,000)

3.07

Profit (loss) Before Income Tax and Social Contribution

(592,000)

(732,000)

(10,000)

395,000

3.08

Income tax and Social Contribution

10,000

(7,000)

(4,000)

(157,000)

3.08.01

Current

(50,000)

(74,000)

36,000

(60,000)

3.08.02

Deferred

60,000

67,000

(40,000)

(97,000)

3.09

Net Income (loss) from Continuing Operations

(582,000)

(739,000)

(14,000)

238,000

3.11

Consolidated Net Income (loss)for the Period

(582,000)

(739,000)

(14,000)

238,000

3.11.01

Attributable to Owners of the Company

(275,000)

(326,000)

66,000

258,000

3.11.02

Attributable to Non-controlling Interests

(307,000)

(413,000)

(80,000)

(20,000)

3.99

Earnings per Share - (Reais/Share)

-

-

-

-

3.99.01

Basic Earnings per Share

-

-

-

-

3.99.01.01

Common

(1.03758)

(1.22968)

0.23313

0.91444

3.99.01.02

Preferred

(1.03758)

(1.22968)

0.25644

1.00589

3.99.02

Diluted Earnings per Share

-

-

-

-

3.99.02.01

Common

(1.03758)

(1.22968)

0.23313

0.91444

3.99.02.02

Preferred

(1.03758)

(1.22968)

0.25576

1.00379

 

13

 


 
 
 

 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

 

Companhia Brasileira de Distribuição

 

Consolidated Interim Financial Information / Statement of Comprehensive Income

           

R$ (in thousands)

       

Code

Description

Year To Date
Current Period
4/01/2016 to
6/30/2016

Year To Date
Previous Period
1/01/2016 to
6/30/2016

Year To Date
Previous Period
4/01/2015 to
6/30/2015

Year To Date
Previous Period
1/01/2015 to
6/30/2015

4.01

Net Income (loss) for the Period

(582,000)

(739,000)

(14,000)

238,000

4.02

Other Comprehensive Income

187,000

260,000

(9,000)

(25,000)

4.02.01

Defined Benefit Plan Cumulative

-

-

(1,000)

-

4.02.02

Translation adjustment

187,000

260,000

(8,000)

-

4.03

Total Comprehensive Income for the Period

(395,000)

(479,000)

(23,000)

213,000

4.03.01

Attributable to Owners of the Company

(219,000)

(254,000)

61,000

247,000

4.03.02

Attributable to Non-Controlling Interests

(176,000)

(225,000)

(84,000)

(34,000)

 
 

14

 


 
 
 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

 

Companhia Brasileira de Distribuição

 

Consolidated Interim Financial Information / Statement of Cash Flows - Indirect Method

       

R$ (in thousands)

   

Code

Description

Year To Date
Current Period
1/01/2016 to
6/30/2016

Year To Date
Previous Period
1/01/2015 to
6/30/2015

6.01

Net Cash Provided by Operating Activities

(7,885,000)

(2,457,000)

6.01.01

Cash from Operations

820,000

1,616,000

6.01.01.01

Net Income (loss) for the Period

(739,000)

238,000

6.01.01.02

Deferred Income Tax and Social Contribution (note 20)

(67,000)

97,000

6.01.01.03

Gain (Losses) on Disposal of Fixed Assets and Intangibles

9,000

38,000

6.01.01.04

Depreciation/Amortization

558,000

535,000

6.01.01.05

Interest and Inflation Adjustments

647,000

549,000

6.01.01.06

Adjustment to Present Value

-

8,000

6.01.01.07

Share of Profit (Loss) of Subsidiaries and Associates (note 13)

(61,000)

(62,000)

6.01.01.08

Provision for Risks (note 22)

477,000

26,000

6.01.01.10

Share-based Payment

7,000

11,000

6.01.01.11

Allowance for Doubtful Accounts (note 08)

295,000

251,000

6.01.01.13

Provision for Obsolescence/breakage (note 10)

(10,000)

(10,000)

6.01.01.14

Other Operating Expenses

-

(9,000)

6.01.01.15

Deferred revenue (note 24)

(202,000)

(56,000)

6.01.01.18

Gain in disposal of subsidiaries

(94,000)

-

6.01.02

Changes in Assets and Liabilities

(8,705,000)

(4,073,000)

6.01.02.01

Accounts Receivable

(1,501,000)

344,000

6.01.02.02

Inventories

(149,000)

392,000

6.01.02.03

Recoverable Taxes

(441,000)

(432,000)

6.01.02.04

Other Assets

(239,000)

(188,000)

6.01.02.05

Related Parties

48,000

(177,000)

6.01.02.06

Restricted Deposits for Legal Proceeding

(137,000)

(60,000)

6.01.02.07

Trade Payables

(4,894,000)

(3,236,000)

6.01.02.08

Payroll and Related Taxes

29,000

(62,000)

6.01.02.09

Taxes and Social Contributions Payable

(152,000)

(259,000)

6.01.02.10

Legal Claims

(161,000)

(141,000)

6.01.02.11

Other Payables

(514,000)

(260,000)

6.01.02.12

Deferred revenue

31,000

6,000

6.01.02.14

Suppliers - structured program

(625,000)

-

6.02

Net Cash Provided by (Used in) Investing Activities

(462,000)

(945,000)

6.02.02

Acquisition of Property and Equipment (note 14)

(499,000)

(755,000)

6.02.03

Increase in Intangible Assets (note 15)

(162,000)

(231,000)

6.02.04

Sales of Property and Equipment

108,000

34,000

6.02.06

Net Cash From Sale of Subsidiary

91,000

7,000

6.03

Net Cash Provided by Financing Activities

1,054,000

(936,000)

6.03.01

Capital Increase/Decrease

1,000

13,000

6.03.02

Borrowings

3,531,000

3,134,000

6.03.03

Payments (note 17)

(3,139,000)

(4,835,000)

6.03.05

Transactions with non-controlling interests

-

(4,000)

6.03.08

Borrowings with Related Parties

665,000

1,114,000

6.03.09

Payments of Dividends

(4,000)

(358,000)

6.04

Effects of Exchange Rate Changes on Cash and Cash Equivalents

(6,000)

-

6.05

Increase (Decrease) in Cash and Cash Equivalents

(7,299,000)

(4,338,000)

6.05.01

Cash and Cash Equivalents at the Beginning of the Period

11,015,000

11,149,000

6.05.02

Cash and Cash Equivalents at the End of the Period

3,716,000

6,811,000

 
 

15

 


 
 
 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

 

 

Companhia Brasileira de Distribuição

 

Consolidated Interim Financial Information / Statement of Changes in Shareholders' Equity 01/01/2016 to 6/30/2016

                     

R$ (in thousands)

                 

Code

Description

Share
Capital

Capital Reserves,
Options Granted and
Treasury Shares

Earnings
Reserves

Retained Earnings/ Accumulated Losses

Other comprehensive Income

Shareholders'
Equity

Non-Controlling
Interest

Consolidated
Shareholders'
Equity

 

5.01

Opening Balance

6,806,000

302,000

3,333,000

-

(87,000)

10,354,000

2,998,000

13,352,000

 

5.03

Adjusted Opening Balance

6,806,000

302,000

3,333,000

-

(87,000)

10,354,000

2,998,000

13,352,000

 

5.04

Capital Transactions with Shareholders

1,000

11,000

(3,000)

-

-

9,000

3,000

12,000

 

5.04.01

Capital Increases

1,000

-

-

-

-

1,000

-

1,000

 

5.04.03

Options Granted

-

7,000

-

-

-

7,000

-

7,000

 

5.04.10

Mandatory Minimun Dividens

-

-

(3,000)

-

-

(3,000)

-

(3,000)

 

5.04.08

Options Granted Recognized in Subsidiaries

-

4,000

-

-

-

4,000

3,000

7,000

 

5.05

Total Comprehensive Income

-

-

-

(326,000)

72,000

(254,000)

(225,000)

(479,000)

 

5.05.01

Net Income (loss) for the Period

-

-

-

(326,000)

-

(326,000)

(413,000)

(739,000)

 

5.05.02

Other Comprehensive Income

-

-

-

-

72,000

72,000

188,000

260,000

 

5.05.02.04

Cumulative Translation Adjustment

-

-

-

-

72,000

72,000

188,000

260,000

 

5.06

Internal Changes in Shareholders’ Equity

-

-

1,000

-

-

1,000

(3,000)

(2,000)

 

5.06.04

Settlement of Equity Instrument

-

-

1,000

-

-

-

(3,000)

(2,000)

 

5.07

Closing Balance

6,807,000

313,000

3,331,000

(326,000)

(15,000)

10,110,000

2,773,000

12,883,000

 
 
 

16

 


 
 
 

 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

 

 

Companhia Brasileira de Distribuição

 

 

 

Consolidated Interim Financial Information / Statement of Changes in Shareholders' Equity 01/01/2015 to 6/30/2015

                   

R$ (in thousands)

               

Code

Description

Share
Capital

Capital Reserves,
Options Granted and
Treasury Shares

Earnings
Reserves

Retained Earnings/ Accumulated Losses

Other comprehensive Income

Shareholders'
Equity

Non-Controlling
Interest

Consolidated
Shareholders'
Equity

5.01

Opening Balance

6,792,000

282,000

3,402,000

-

1,000

10,477,000

3,717,000

14,194,000

5.03

Adjusted Opening Balance

6,792,000

282,000

3,402,000

-

1,000

10,477,000

3,717,000

14,194,000

5.04

Capital Transactions with Shareholders

13,000

9,000

-

(38,000)

-

(16,000)

2,000

(14,000)

5.04.01

Capital Increases

13,000

-

-

-

-

13,000

-

13,000

5.04.03

Options Granted

-

6,000

-

-

-

6,000

-

6,000

5.04.06

Dividends

-

-

-

(38,000)

-

(38,000)

-

(38,000)

5.04.08

Options Granted Recognized in Subsidiaries

-

3,000

-

-

-

3,000

2,000

5,000

5.05

Total Comprehensive Income

-

-

-

258,000

(12,000)

246,000

(34,000)

212,000

5.05.01

Net Income (loss) for the Period

-

-

-

258,000

-

258,000

(20,000)

238,000

5.05.02

Other Comprehensive Income

-

-

-

-

(12,000)

(12,000)

(14,000)

(26,000)

5.05.02.04

Cumulative Translation Adjustment

-

-

-

-

(11,000)

(11,000)

(13,000)

(24,000)

5.05.02.06

Defined Benefit Plan

-

-

-

-

(1,000)

(1,000)

(1,000)

(2,000)

5.06

Internal Changes in Shareholders’ Equity

-

-

(4,000)

-

-

(4,000)

(2,000)

(6,000)

5.06.04

Settlement of Equity Instrument

-

-

(4,000)

-

-

(4,000)

(2,000)

(6,000)

5.07

Closing Balance

6,805,000

291,000

3,398,000

220,000

(11,000)

10,703,000

3,683,000

14,386,000

 
 

17

 


 
 

(FREE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

ITR – Interim Financial Information – June 30, 2016 – COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

 

 

Companhia Brasileira de Distribuição

 

Consolidated Interim Financial Information / Statement of Value Added

       

R$ (in thousands)

   

Code

Description

Year To Date
Current Period
1/01/2016 to
6/30/2016

Year To Date
Previous Period
1/01/2015 to
6/30/2015

7.01

Revenues

38,321,000

36,818,000

7.01.01

Sales of Goods, Products and Services

38,813,000

37,067,000

7.01.02

Other Revenues

(197,000)

2,000

7.01.04

Allowance for/Reversal of Doubtful Accounts

(295,000)

(251,000)

7.02

Products Acquired from Third Parties

(30,547,000)

(28,637,000)

7.02.01

Costs of Products, Goods and Services Sold

(26,660,000)

(25,334,000)

7.02.02

Materials, Energy, Outsourced Services and Other

(3,887,000)

(3,303,000)

7.03

Gross Value Added

7,774,000

8,181,000

7.04

Retention

(558,000)

(535,000)

7.04.01

Depreciation and Amortization

(558,000)

(535,000)

7.05

Net Value Added Produced

7,216,000

7,646,000

7.06

Value Added Received in Transfer

367,000

512,000

7.06.01

Share of Profit of Subsidiaries and Associates

61,000

62,000

7.06.02

Financial Income

306,000

450,000

7.07

Total Value Added to Distribute

7,583,000

8,158,000

7.08

Distribution of Value Added

7,583,000

8,158,000

7.08.01

Personnel

3,445,000

3,539,000

7.08.01.01

Direct Compensation

2,552,000

2,567,000

7.08.01.02

Benefits

561,000

587,000

7.08.01.03

Government Severance Indemnity Fund for Employees (FGTS)

212,000

225,000

7.08.01.04

Other

120,000

160,000

7.08.01.04.01

Interest

120,000

160,000

7.08.02

Taxes, Fees and Contributions

2,871,000

2,418,000

7.08.02.01

Federal

2,036,000

1,543,000

7.08.02.02

State

701,000

759,000

7.08.02.03

Municipal

134,000

116,000

7.08.03

Value Distributed to Providers of Capital

2,006,000

1,963,000

7.08.03.01

Interest

1,207,000

1,149,000

7.08.03.02

Rentals

798,000

814,000

7.08.03.03

Others

1,000

-

7.08.04

Value Distributed to Shareholders

(739,000)

238,000

7.08.04.02

Dividends

1,000

38,000

7.08.04.03

Retained Earnings/ Accumulated Losses for the Period

(327,000)

220,000

7.08.04.04

Noncontrolling Interest in Retained Earnings

(413,000)

(20,000)

 

 

18

 


 

 

 

São Paulo, Brazil, July 28, 2016 - GPA [BM&FBOVESPA: PCAR4 (PN); NYSE: CBD] announces its results for the second quarter of 2016 (2Q16). The comments refer to the consolidated results of the Group or of its business units. All comparisons are with the same period in 2015, except where stated otherwise.

Second quarter 2016 Results

Consolidated net sales reach R$16.7 billion, driven by a solid performance from Assaí, better sales trend at Multivarejo and the ongoing recovery at Via Varejo

Consolidated adjusted EBITDA of R$760 million and margin of 4.6%, with Assaí and Via Varejo reporting growth of 117.4% and 50.8%, respectively

9 stores opened in the quarter (5 Minuto Pão de Açúcar, 1 Assaí, 1 Pão de Açúcar, 1 Casas Bahia and 1 Ponto Frio),
a total of 59 new stores in the last 12 months

         

Multivarejo:

o    Improved sales trend and progressive volume growth of food categories, the highlight being the Extra banner, reflecting the initial effects of new commercial actions launched during the course of the quarter, to reinforce the image of competitive daily prices

o    Increase in selling, general and administrative expenses by 7.9%, below inflation in the period, due to initiatives to optimize expenses, particularly the revision of processes and implementation of operational improvements at the stores

o    Maintenance of profitability at Pão de Açúcar and gradual improvement of Proximity

o    Adjusted EBITDA of R$384 million, with margin of 6.0%

Assaí:

o    Acceleration of net sales growth, at 36.9%: double-digit same-store sales significantly above inflation and strong organic expansion of 10 new stores in the last 12 months.

o    10 stores are currently under construction, of which two Extra Hiper stores in the process of being converted to Assaí stores

o    Decrease of 30 bps in selling, general and administrative expenses as a percentage of net sales due to higher operational leverage and disciplined control of costs

o    Adjusted EBITDA of R$168 million, with margin of 5.0%

Via Varejo:

o    Resumption of growth in total and same-store sales as a result of strategic projects implemented, the competitiveness strategy and the solid performance of the telephone and services category

o    Consistent market share gains in both Specialist market (April and May 2016: +150 bps) and Total market (April and May 2016: +220 bps) bringing Via Varejo’s share of these markets to the highest levels in its history

o    Adjusted EBITDA of R$375 million, with margin of 8.7%

Cnova Brasil:

o    Conclusion of the investigation at Cnova Brasil

o    Increase in share of marketplace in GMV to 16.6%, up 780 bps from 2Q15

o    The key focus of Cnova Brasil is to improve operational management and pursue the growth of its business

  Consolidated (1) Food Businesses  Via Varejo
(R$ million)(2)  2Q16  2Q15  Δ  1H16  1H15  Δ  2Q16  2Q15  Δ  2Q16  2Q15  Δ 
 
GrossRevenue  18,749  17,904  4.7%  38,812  37,067  4.7%  10,561  9,696  8.9%  4,968  4,863  2.2% 
Net Revenue  16,684  16,112  3.5%  34,458  33,327  3.4%  9,735  8,953  8.7%  4,321  4,307  0.3% 
Gross Profit  4,243  3,864  9.8%  8,157  8,003  1.9%  2,377  2,178  9.1%  1,660  1,407  18.0% 
Gross Margin  25.4%  24.0%  140 bps  23.7%  24.0%  -30 bps  24.4%  24.3%  10 bps  38.4%  32.7%  570 bps 
Selling, General and Adm. Expenses  (3,541)  (3,167)  11.8%  (6,994)  (6,349)  10.1%  (1,860)  (1,662)  11.9%  (1,303)  (1,183)  10.1% 
% of Net Revenue  21.2%  19.7%  150 bps  20.3%  19.1%  120 bps  19.1%  18.6%  50 bps  30.2%  27.5%  270 bps 
Other Operating Revenue (Expenses)  (481)  (85)  467.5%  (549)  (153)  259.5%  (252)  (72)  248.1%  (39)  26  n.a. 
EBITDA (3)  279  683  -59.2%  737  1,631  -54.8%  300  482  -37.8%  336  275  22.0% 
EBITDA Margin  1.7%  4.2%  -250 bps  2.1%  4.9%  -280 bps  3.1%  5.4%  -230 bps  7.8%  6.4%  140 bps 
Adjusted EBITDA(4)  760  768  -1.0%  1,286  1,784  -27.9%  551  554  -0.5%  375  249  50.8% 
Adjusted EBITDA Margin  4.6%  4.8%  -20 bps  3.7%  5.4%  -170 bps  5.7%  6.2%  -50 bps  8.7%  5.8%  290 bps 
Net Financial Revenue (Expenses)  (590)  (416)  41.8%  (907)  (699)  29.8%  (239)  (171)  40.3%  (260)  (188)  38.8% 
% of Net Revenue  3.5%  2.6%  90 bps  2.6%  2.1%  50 bps  2.5%  1.9%  60 bps  6.0%  4.4%  160 bps 
Net Income (Loss) - Company  (583)  (13)  n.a.  (739)  238  n.a.  (109)  102  n.a.  17  21  -19.7% 
Net Margin  -3.5%  -0.1%  -340 bps  -2.1%  0.7%  -280 bps  -1.1%  1.1%  -220 bps  0.4%  0.5%  -10 bps 
Net Income (Loss) - Controlling Shareholders  (276)  66  n.a.  (327)  258  n.a.  (107)  105  n.a.  7  9  -19.7% 
Net Margin  -1.7%  0.4%  -210 bps  -0.9%  0.8%  -170 bps  -1.1%  1.2%  -230 bps  0.2%  0.2%  0 bps 
Adjusted Net Income (Loss) - Controlling Shareholders (5)  3  128  -97.9%  (6)  354  n.a.  93  160  -41.9%  19  2  n.a. 
Adjusted Net Margin  0.0%  0.8%  -80 bps  0.0%  1.1%  -110 bps  1.0%  1.8%  -80 bps  0.4%  0.0%  40 bps 

(1) Includes the results of Cnova (Cnova Brazil + Cdiscount Group); (2) Totals and percentages may not add up due to rounding. All margins were calculated as a percentage of net sales; (3) Earnings before interest, tax, depreciation and amortization; (4) EBITDA Adjusted for the total of “Other Operating Income and Expenses”, thus eliminating nonrecurring income and expenses; (5) Net Income Adjusted for the total of “Other Operating Income and Expenses”, thus eliminating nonrecurring income and expenses, as well as the respective effects of associated income tax.

 

19

 

 

 

Sales Performance

 

 

Net Total Store Sales
    2Q16 x 2Q15 
(R$ million)  2Q16  ? ?(1)
Consolidated (2)  16,684  3.5%  4.9% 
Food Businesses  9,735  8.7%  11.3% 
Multivarejo (3)  6,389  -1.8%  1.4% 
Assaí  3,347  36.9%  37.6% 
Non-Food Businesses  6,965  -3.0%  -3.0% 
Cnova  2,627  -7.9%  -7.9% 
Via Varejo (4)  4,338  0.3%  0.3% 

      

? Net 'Same-Store' Sales
  2Q16(1)  1Q16(1) 
Consolidated (2)  3.2%  -0.4% 
Multivarejo + Assaí  7.1%  3.1% 
Via Varejo (4)  2.6%  -11.8% 

(1) Adjusted for the calendar effect of 3.2% (2Q16) and -3.6% (1Q16) at Multivarejo and 0.7% (2Q16) and -1.0% (1Q16) at Assaí; (2) Not including revenue from intercompany transactions; (3) Extra and Pão de Açúcar. Includes revenue from leasing of commercial centers; (4) Includes revenue from intercompany transactions.  

 

Sales Performance – Consolidated

 

§  In 2Q16, consolidated net sales totaled R$16.7 billion, up 4.9% after adjusting for the calendar effect, with the highlights being the solid performance by Assaí, improved sales trend at Multivarejo and the ongoing recovery at Via Varejo;

 

§  In the Food segment (Multivarejo + Assaí), net sales grew 11.3% adjusted for the calendar effect, which is the strongest result since 3Q14, reflecting the continued strong growth at Assaí (+37.6%) and the better sales trend at Multivarejo (+1.4%), driven by the commercial actions implemented throughout the quarter;

 

§  Via Varejo continued the sales recovery trend observed in prior quarters, posting its best performance since 1Q15, with growth of 0.3%, or 2.6% on a same-store basis, which translated into market share gains; 

 

§  Nine stores were opened in the quarter, seven of them in the food segment (five Minuto Pão de Açúcar and one Assaí and Pão de Açúcar each), and one Casas Bahia and Ponto Frio store each. A total of 59 stores were opened in the last 12 months.

 

 

20

 

 


 

 

Food Segment (Multivarejo + Assaí)

 

§  Consolidated net sales in the quarter totaled R$9.7 billion, up 11.3% after adjusting for the calendar effect. This result reflects the combination of the solid performance by Assaí, which has been gradually expanding its share of food segment sales (34%), and the sales volume growth at Multivarejo. The opening of 51 stores in the last 12 months also helped drive sales growth in the period;

 

§  On a same-store basis and adjusted for the calendar effect, food segment sales grew 7.1%, the highest since 3Q14. This expansion was mainly driven by sales volume growth at Multivarejo during the quarter, thanks to new commercial actions, and by the continued acceleration of sales at Assaí;

 

§  Significant growth in the food category at Multivarejo, which registered a stronger sales trend in virtually all banners. Worth noting was the gradual improvement in sales and volume at the Extra banner during the quarter, driven by the new commercial actions launched at hypermarkets and supermarkets:

i)    “1,2,3 Savings Steps": campaign launched in April that offers progressive discounts to customers, starting with 20% on the purchase of the first unit and increasing to 33% on the third unit, to meet all their food, home care and personal care needs.

ii)  "Hyper-fair": event launched in May focusing on offering competitive daily prices for the Fresh Produce category; and

iii) "Lowest Price": campaign launched in June, which offers the lowest price for a selection of products that represent the basic everyday needs of consumers.

 

§  As in prior quarters, Assaí posted robust net sales growth of 37.6% adjusted for the calendar effect, which is the best performance since 2Q14, reflecting the strong double-digit same-store sales growth, driven by the correct positioning of the format in the current economic scenario and by organic growth. One store was opened in the quarter, the first in the North region (Manaus), bring the total store openings in the last 12 months to 10. In addition, 2 Extra Hiper stores are in the process of conversion as part of the banner's store expansion plan for the year.

 

 

Via Varejo

 

§  On a same-store basis, net sales in 2Q16 advanced 2.6%. Total sales grew 0.3%, still affected by the store closures in 2H15 and 1Q16. Sales growth in the period was supported by the implementation of strategic actions, which included: (i) banner conversions (growth of 1,130 bps above Via Varejo’s average); (ii) mobile store-in-store (growth of 250 bps above Via Varejo’s average); (iii) solid performance of service revenue; and (iv) effective and unique product assortment at stores, giving the sales teams the tools needed to leverage the sales conversion rate;

 

§  Via Varejo remains strongly focused on improving sales and consistently gaining market share. According to the Monthly Retail Survey (PMC) published by the IBGE, the furniture and electronics/home appliance market in April and May contracted by 6.7% compared to the same period in 2015, which, given the positive growth in net sales in 2Q16, suggests that Via Varejo has been gaining structural market share in both the specialty(1) and total(2) markets, bringing the share in both markets to levels similar to the highest market share in the history of Via Varejo;

 

§  For the coming quarters, Via Varejo will continue to focus on capturing operating efficiency gains at its stores, while advancing on the implementation of strategic projects, on improving its customer service and on monitoring its cost and expense structure in order to optimize its results and profitability for fiscal year 2016.These operational drivers, combined with the strategy based on price competitiveness and offering an effective product assortment, will further leverage its competitive advantages and the strength of the Casas Bahia and Pontofrio brands.

21

 

 


 

 

 

Cnova Brasil

 

§  GMV in 2Q16 amounted to €396 million (R$1,567 million), which corresponds to a reduction of 19.7% per year in constant currency. In the same period, GMV’s share of marketplace reached 16.6% (+780 bps in the annual comparison). On June 30, 2016, we had over 3,500 vendors in the marketplace.

 

§  Traffic in 2Q16 grew 21.4% a year to 257 million visits, with mobile devices accounting for 43.6% of total traffic.

 

§  Improvements in customer service during the quarter include lower stockout rate (8%) of top selling products, better call center service and conclusion of ERP migration.

 

(1) Specialty market: Includes specialty retailers only.

(2) Total market: Includes specialty retailers, supermarkets and purely online competitors.

 

 

22

 

 


 

 

Operating Performance

 

Consolidated
(R$ million)  2Q16  2Q15  Δ  1H16  1H15  Δ 
 
Gross Revenue  18,749  17,904  4.7%  38,812  37,067  4.7% 
Net Revenue  16,684  16,112  3.5%  34,458  33,327  3.4% 
Gross Profit  4,243  3,864  9.8%  8,157  8,003  1.9% 
Gross Margin  25.4%  24.0%  140 bps  23.7%  24.0%  -30 bps 
Selling Expenses  (3,083)  (2,770)  11.3%  (6,047)  (5,491)  10.1% 
General and Administrative Expenses  (458)  (396)  15.6%  (946)  (858)  10.3% 
Selling, General and Adm. Expenses  (3,541)  (3,167)  11.8%  (6,994)  (6,349)  10.1% 
% of Net Revenue  21.2%  19.7%  150 bps  20.3%  19.1%  120 bps 
Equity Income  29  34  -15.9%  61  62  -1.2% 
Other Operating Revenue (Expenses)  (481)  (85)  467.5%  (549)  (153)  259.5% 
Depreciation (Logistic)  30  36  -17.5%  61  68  -10.9% 
EBITDA  279  683  -59.2%  737  1,631  -54.8% 
EBITDA Margin  1.7%  4.2%  -250 bps  2.1%  4.9%  -280 bps 
Adjusted EBITDA (1)  760  768  -1.0%  1,286  1,784  -27.9% 
Adjusted EBITDA Margin  4.6%  4.8%  -20 bps  3.7%  5.4%  -170 bps 

(1)EBITDA adjusted for “Other Operating Income and Expenses”, thus eliminating nonrecurring income and expenses.

 

The Company's gross margin reached 25.4% in the quarter due to the business mix effect and recognition of tax credits.  Excluding the effect of these credits, gross margins of the businesses were as follows: 

(i)     Assaí: gross margin remained stable in relation to 2Q15 (13.8%);

(ii)    Multivarejo: decrease of 160 bps in gross margin due to efforts to drive competitiveness at Extra;

(iii)   Via Varejo: decrease of 70 bps due to efforts to increase competitiveness, compensated by greater efficiency in services; 

The increase in selling, general and administrative expenses was 11.8% in 2Q16, mainly due to the business mix effect: growth of 33.1% in Assaí due to strong store expansion in the last 12 months; increase of 7.9% at Multivarejo, lagging inflation in the period; and increase of 10.1% at Via Varejo, impacted by the end of tax relief on payroll.

The Company incurred other operating income and expenses of R$481 million in the quarter. Most of this amount is related to: (i) additional provision for tax contingencies such as PIS and COFINS, income tax and ICMS, after a review by legal advisors, in the amount of R$184 million; (ii) expenses related to Cnova investigation (R$127 million); (iii) integration and restructuring expenses (R$75 million); and (iv) asset write-offs (R$57 million). Adjusted for these effects, EBITDA stood at R$760 million, with margin of 4.6%.

 

23

 

 


 

 

Multivarejo
 
(R$ million)  2Q16  2Q15  Δ  1H16  1H15  Δ 
 
Gross Revenue  6,929  7,050  -1.7%  14,236  14,197  0.3% 
Net Revenue  6,389  6,508  -1.8%  13,129  13,113  0.1% 
Gross Profit  1,863  1,841  1.2%  3,617  3,627  -0.3% 
Gross Margin  29.2%  28.3%  90 bps  27.6%  27.7%  -10 bps 
Selling Expenses  (1,341)  (1,249)  7.4%  (2,653)  (2,446)  8.5% 
General and Administrative Expenses  (171)  (153)  12.2%  (341)  (308)  10.8% 
Selling, General and Adm. Expenses  (1,513)  (1,401)  7.9%  (2,995)  (2,753)  8.8% 
% of Net Revenue  23.7%  21.5%  220 bps  22.8%  21.0%  180 bps 
Equity Income  21  24  -13.3%  44  45  -3.2% 
Other Operating Revenue (Expenses)  (213)  (76)  178.6%  (267)  (104)  157.3% 
Depreciation (Logistic)  13  13  -3.7%  25  26  -4.0% 
EBITDA  171  401  -57.4%  425  842  -49.5% 
EBITDA Margin  2.7%  6.2%  -350 bps  3.2%  6.4%  -320 bps 
Adjusted EBITDA (1)  384  477  -19.6%  692  945  -26.8% 
Adjusted EBITDA Margin  6.0%  7.3%  -130 bps  5.3%  7.2%  -190 bps 

 (1) EBITDA adjusted for “Other Operating Income and Expenses”, thus eliminating nonrecurring income and expenses

 

Adjusted EBITDA at Multivarejo stood at R$384 million in 2Q16, with margin of 6.0%, due to the following factors:

 

§  Gross Profit of R$1,863 million, with margin of 29.2%:

 

(i)      Tax credits were recognized, positively impacting gross margin by 250 bps vs. 2Q15;

 

(ii)     Excluding the effects of these tax credits, the decrease in gross margin was 160 bps, mainly due to efforts to drive competitiveness at Extra. In 2Q16, the banner launched new commercial actions: “1,2,3 Savings Steps”, “Hyper-fair” and “The Lowest Price”. These efforts to increase competitiveness have already positively affected the growth in volume and market share and these results should intensify over the coming quarters.

 

§  Selling, general and administrative expenses increased by 7.9% from 2Q15, below inflation in the period. The main impacts were:

 

(i)      Store expenses remained stable (down 0.1%) due to various efficiency projects implemented at the end of last year and in the first half of 2016, with a reduction of 11.5% in marketing expenses and 1.5% in store personnel expenses, and increase in rental and utilities expenses below inflation (+1.4% and +0.9% respectively)

 

(ii)     Negative impacts mainly due to:

a.    The increase of R$10 million due to the opening of 41 stores over the last 12 months;

b.   The growth of R$53 million due to higher provisioning for labor contingencies;

c.   The higher levels of default in rental receivables of commercial centers, leading to an increase of R$20 million; 

d.   The increase of R$18 million in administrative expenses, mainly related to the projects to improve operating efficiency.

24

 

 


 

 

Other Operating Income and Expenses in the quarter totaled R$213 million and are mostly related to the additional provision for tax contingencies (approximately R$150 million), as mentioned in the section Operating Performance - Consolidated, on page 5, as well as restructuring expenses and asset write-offs. Adjusted for this effect, EBITDA stood at R$384 million, with margin of 6.0%.

 

25

 

 


 

 

           

Assaí
 
(R$ million)  2Q16  2Q15  Δ  1H16  1H15  Δ 
 
Gross Revenue  3,632  2,646  37.2%  7,046  5,143  37.0% 
Net Revenue  3,347  2,445  36.9%  6,495  4,756  36.6% 
Gross Profit  514  337  52.6%  943  651  44.9% 
Gross Margin  15.4%  13.8%  160 bps  14.5%  13.7%  80 bps 
Selling Expenses  (300)  (234)  28.1%  (589)  (451)  30.8% 
General and Administrative Expenses  (48)  (27)  76.7%  (88)  (56)  57.9% 
Selling, General and Adm. Expenses  (348)  (261)  33.1%  (677)  (506)  33.8% 
% of Net Revenue  10.4%  10.7%  -30 bps  10.4%  10.6%  -20 bps 
Other Operating Revenue (Expenses)  (39)  4  n.a.  (39)  3  n.a. 
Depreciation (Logistic)  1  1  -6.7%  2  2  -4.9% 
EBITDA  129  81  58.8%  229  151  52.0% 
EBITDA Margin  3.9%  3.3%  60 bps  3.5%  3.2%  30 bps 
Adjusted EBITDA (1)  168  77  117.4%  268  147  82.3% 
Adjusted EBITDA Margin  5.0%  3.2%  180 bps  4.1%  3.1%  100 bps 

(1) EBITDA adjusted for “Other Operating Income and Expenses”, thus eliminating nonrecurring income and expenses

 

Assaí registered accelerated growth in net sales, which stood at 36.9% in 2Q16, or 37.6% when adjusted for the calendar effect. The banner's consistent performance reflects: (i) strong double-digit same-store sales growth; (ii) strong expansion with 10 new stores opened in the last 12 months; and (iii) the continued increase in customer traffic in the Cash & Carry segment. This solid performance resulted in a higher share of Assaí in the Food segment sales, in which the format already accounts for the highest share (34% in 2Q16).

Gross margin increased 160 bps mainly due to the recognition of tax credits, in addition to the impact of store maturation and evolution of client mix. Excluding the effects of tax credits, gross margin would have remained stable compared to 2Q15 (13.8%).    

Selling, general and administrative expenses as a percentage of net sales decreased by 30 bps, mainly due to cost control and higher operating leverage.

Other Operating Income and Expenses in the quarter totaled R$39 million, mainly related to the additional provision for tax contingencies, as explained in the section Operating Performance – Consolidated, on page 5. Adjusted for this effect, EBITDA stood at R$168 million.

 

26

 

 


 

 

 

Via Varejo (1)
 
(R$ million)  2Q16  2Q15  Δ  1H16  1H15  Δ 
 
Gross Revenue  4,968  4,863  2.2%  10,379  10,948  -5.2% 
Net Revenue  4,321  4,307  0.3%  9,010  9,678  -6.9% 
Gross Profit  1,660  1,407  18.0%  3,094  3,186  -2.9% 
Gross Margin  38.4%  32.7%  570 bps  34.3%  32.9%  140 bps 
Selling Expenses  (1,171)  (1,084)  8.0%  (2,279)  (2,188)  4.2% 
General and Administrative Expenses  (132)  (99)  32.8%  (279)  (253)  10.5% 
Selling, General and Adm. Expenses  (1,303)  (1,183)  10.1%  (2,558)  (2,441)  4.8% 
% of Net Revenue  30.2%  27.5%  270 bps  28.4%  25.2%  320 bps 
Equity Income  8  10  -21.9%  17  17  4.2% 
Other Operating Revenue (Expenses)  (39)  26  n.a.  (80)  32  n.a. 
Depreciation (Logistic)  10  14  -32.3%  20  28  -27.9% 
EBITDA  336  275  22.0%  493  821  -40.0% 
EBITDA Margin  7.8%  6.4%  140 bps  5.5%  8.5%  -300 bps 
Adjusted EBITDA (2)  375  249  50.8%  573  789  -27.4% 
Adjusted EBITDA Margin  8.7%  5.8%  290 bps  6.4%  8.2%  -180 bps 

(1) Some figures in this earnings release differ from those presented in the Via Varejo release due to the effects of intercompany transactions; (2) EBITDA adjusted for “Other Operating Income and Expenses”, thus eliminating nonrecurring income and expenses.

Adjusted EBITDA stood at R$375 million in 2Q16, with margin of 8.7%, due to the following factors: 

 

§  Gross margin of 38.4%

(i)    Tax credits were recognized, positively impacting gross margin by 650 bps compared to 2Q15. Gross profit in 2Q16 reflects the competitiveness strategy and consistent market share gains captured since 4Q15;

 

(ii)   Positive impact of 120 bps due to the end of tax relief on payroll in 2Q16.

 

(iii)  In January 2016, Via Varejo started to pay PIS and Cofins taxes on products that previously benefitted from the Lei do Bem tax incentive. The tax incentive benefited technology and IT products (e.g. mobile phones and computers) priced at up to R$1,500.00. The additional taxation in 2Q16 produced a negative impact of 240 bps on EBITDA margin.

§  Selling, general and administrative expenses as a percentage of net sales increased 270 bps:

(i)    Negative impact of 250 bps due to the impact of the end of tax relief and collective bargaining on payroll;

 

;

27

 

 


 

Financial Result

Consolidated
 
(R$ million)  2Q16  2Q15  Δ  1H16  1H15  Δ 
 
Financial Revenue  115  234  -50.7%  309  450  -31.2% 
Financial Expenses  (706)  (650)  8.5%  (1,216)  (1,149)  5.9% 
Net Financial Revenue (Expenses)  (590)  (416)  41.8%  (907)  (699)  29.8% 
% of Net Revenue  3.5%  2.6%  90 bps  2.6%  2.1%  50 bps 
 
Charges on Net Bank Debt  (223)  (159)  40.0%  (342)  (244)  40.0% 
Cost of Discount of Receivables of Payment Book  (87)  (79)  9.9%  (171)  (167)  2.3% 
Cost of Sale of Receivables of Credit Card  (239)  (228)  4.9%  (324)  (319)  1.6% 
Restatement of Other Assets and Liabilities  (42)  49  n.a.  (71)  32  n.a. 
Net Financial Revenue (Expenses)  (590)  (416)  41.8%  (907)  (699)  29.8% 

 

The Company's cash management strategy is determined by the following variables: (i) cash requirements; (ii) cost of advancing; and (iii) analysis of other lines of credit and the costs involved determined significant variations in the volumes of receivables advanced in the first half of the year. For better comprehension of the financial results, eliminating possible distortions between the quarters, the following explanations consider the main variations in 1H16 compared to 1H15.

In 1H16, net financial expense increased 29.8% to R$907 million, above the 13% variation in interest rates (measured by average CDI) in the period. The main variations in net financial result were:

§  Net debt charges increased R$98 million or 40.0%, reflecting the lower average cash balance in the period, due to the policy of advancement of receivables and specific payments at Multivarejo (Morzan indemnity and other indemnities related to periods before the association with Casas Bahia) of approximately R$400 million, among other factors;

 

 

§  Increase of R$9 million or 1.9% in the cost of advancing these credit card and payment book receivables, significantly lower than the increase in CDI, due to the lower advanced volume as a result of the decrease in sales in non-food categories compared to the same period the previous year, in addition to the maintenance of approximately R$2 billion in credit card receivables that were not advanced.

 

§  The change of R$103 million in Restatement of Other Assets and Liabilities is mainly related to additional expenses with guarantees, interest, fines and the negative effect of the Cdiscount financial result in 1H16, in addition to positive impacts in 1H15 from the monetary restatement of taxes recoverable and restatements of real estate projects (INCC).

 

 

 

28

 

 


 

Net Income

 

  Consolidated Food Businesses Via Varejo
 
(R$ million)  2Q16  2Q15  Δ  1H16  1H15  Δ  2Q16  2Q15  Δ%  2Q16  2Q15  Δ% 
 
EBITDA  279  683  -59.2%  737  1,631  -54.8%  300  482  -37.8%  336  275  22.0% 
Depreciation (Logistic)  (30)  (36)  -17.5%  (61)  (68)  -10.9%  (14)  (14)  -4.0%  (10)  (14)  -32.3% 
Depreciation and Amortization  (251)  (239)  4.8%  (501)  (469)  6.9%  (178)  (169)  5.5%  (43)  (45)  -3.6% 
Net Financial Revenue (Expenses)  (590)  (416)  41.8%  (907)  (699)  29.8%  (239)  (171)  40.3%  (260)  (188)  38.8% 
Income (Loss)before Income Tax  (593)  (9)  n.a.  (732)  395  n.a.  (132)  128  n.a.  23  29  -20.3% 
Income Tax  10  (4)  n.a.  (7)  (157)  -95.5%  23  (26)  n.a.  (6)  (7)  -22.1% 
Net Income (Loss) - Company  (583)  (13)  n.a.  (739)  238  n.a.  (109)  102  n.a.  17  21  -19.7% 
Net Margin  -3.5%  -0.1%  -340 bps  -2.1%  0.7%  -280 bps  -1.1%  1.1%  -220 bps  0.4%  0.5%  -10 bps 
Net Income (Loss) - Controlling Shareholders  (276)  66  n.a.  (327)  258  n.a.  (107)  105  n.a.  7  9  -19.7% 
Net Margin - Controllings Shareholders  -1.7%  0.4%  -210 bps  -0.9%  0.8%  -170 bps  -1.1%  1.2%  -230 bps  0.2%  0.2%  0 bps 
 
Other Operating Revenue (Expenses)  (481)  (85)  467.5%  (549)  (153)  259.5%  (252)  (72)  248.1%  (39)  26  n.a. 
Income Tax from Other Operating Revenues (Expenses) and Income Tax from Nonrecurring  67  12  477.5%  95  21  362.2%  52  17  199.7%  13  (9)  n.a. 
Adjusted Net Income (Loss)- Company (1)  (168)  60  n.a.  (285)  370  n.a.  91  156  -42.0%  43  4  n.a. 
Adjusted Net Margin - Company  -1.0%  0.4%  -140 bps  -0.8%  1.1%  -190 bps  0.9%  1.7%  -80 bps  1.0%  0.1%  90 bps 
Adjusted Net Income (Loss)- Controlling Shareholders (1)  3  128  -97.9%  (6)  354  n.a.  93  160  -41.9%  19  2  n.a. 
Adjusted Net Margin - Controlling Shareholders  0.0%  0.8%  -80 bps  0.0%  1.1%  -110 bps  1.0%  1.8%  -80 bps  0.4%  0.0%  40 bps 

(1) Net Income adjusted for “Other Operating Income and Expenses”, thus eliminating nonrecurring income and expenses, excluding the effects of Income and social contribution taxes.

 

Net income attributable to controlling shareholders, adjusted for other operating income and expenses, totaled R$3 million.

In the food segment, note the 57.3% net income growth at Assaí, which is higher than the banner's sales growth in the quarter. This result contributed to the net income attributable to controlling shareholders in the Food segment, which stood at R$93 million after adjusting for other operating income and expenses.

Via Varejo's net income adjusted for other operating income and expenses amounted to R$19 million.

 

            29

 

 

 

 


 

 

Indebtedness

 

 

Consolidated
 
(R$ million)  06.30.2016  06.30.2015 
 
Short Term Debt  (3,759)  (2,462) 
Loans and Financing  (3,184)  (781) 
Debentures and Promissory Notes  (575)  (1,681) 
Long Term Debt  (2,701)  (3,750) 
Loans and Financing  (1,803)  (2,854) 
Debentures  (898)  (897) 
Total Gross Debt  (6,460)  (6,213) 
Cash and Financial investments  3,716  6,811 

Net Cash (Debt) 

(2,744)  599 
EBITDA(1)  1,931  4,365 
Net Cash (Debt) / EBITDA(1)  -1.42x  0.14x 
 
Payment Book - Short Term  (2,355)  (2,311) 
Payment Book - Long Term  (193)  (99) 
Net Debt with Payment Book  (5,292)  (1,811) 
Net Debt with Payment Book / EBITDA(1)  -2.74x  -0.41x 
 
On balance Credit Card Receivables  1,997  158 
Net Debt with Payment Book and Credit Card Receivables not sold(2)  (3,295)  (1,653) 
Net Debt with Payment Book and Credit Card Receivables not sold(2) / EBITDA(1)  -1.71x  -0.38x 

 

The Company ended 2Q16 with a strong reserve of cash and financial investments of R$3.7 billion, and a balance of approximately R$2 billion in unsold receivables with immediate liquidity if necessary.

 

Gross debt stood at R$6.5 billion at end-June 2016, similar to the level at end-June 2015. Note that the Company has approximately R$1.3 billion in pre-approved/confirmed credit facilities.

 

The R$1.6 billion increase in net debt(2) at end-June 2016 compared to end-June 2015 mainly reflects the increase in the debt at Cnova, of approximately R$1.1 billion, and specific payments at Multivarejo in the amount of approximately R$400 million, as described in the section “Financial Result”, on page 10.

 

Consequently, net debt(2) stood at R$3.3 billion at end-June 2016, with the net debt(2)/EBITDA(1) ratio increasing from 0.38 times in 2Q15 to 1.71 times in 2Q16.

 

(1)  EBITDA in the last 12 months.

(2)  Includes unsold credit card receivables of R$1,997 million in 2Q16 and R$158 million in 2Q15.

30

 

 


 

Simplified Cash Flow Statement

 

 
Consolidated
 
(R$ million)  2Q16  2Q15  1H16  1H15 
 
Cash Balance at Beginning of Period  4,448  6,145  11,015  11,149 
 
Cash Flow from Operating Activities  90  2,180  (7,885)  (2,459) 
EBITDA  279  683  737  1,631 
Cost of Sale of Receivables  (326)  (307)  (495)  (486) 
Working Capital  639  1,839  (7,169)  (2,479) 
Assets and Liabilities Variation  (502)  (34)  (958)  (1,125) 
Cash Flow from Investment Activities  (199)  (466)  (462)  (945) 
Net Investment  (199)  (466)  (553)  (952) 
Acquisition / Sale of Interest and Others  -  -  91  7 
 
Change on net cash after investments  (109)  1,714  (8,347)  (3,404) 
 
Cash Flow from Financing Activities  (613)  (1,046)  1,054  (936) 
Dividends Payments and Others  (3)  (358)  (4)  (358) 
Net Payments  (610)  (688)  1,058  (578) 
 
Change on Net Cash  (722)  668  (7,293)  (4,340) 
 
Exchange Rate  (10)  (2)  (6)  2 
 
Cash Balance at End of Period  3,716  6,811  3,716  6,811 
  
Net Debt  (2,744)  599  (2,744)  599 

 

 

The Company's cash stood at R$3.716 billion at the end of 1H16. Changes from the same period the previous year were mainly due to the following factors:

 

 

§  EBITDA impacted by more cautious consumer behavior, mainly impacting non-food sales; 

 

§  The cash management strategy adopted by the Company led to lower volume of receivables advanced and negatively impacted working capital by approximately R$1.8 billion in the quarter. Note that this variation was also impacted by the significant improvement in the gap between inventories and suppliers over the course of 2015;

 

§  Specific payments at Multivarejo of approximately R$400 million, as mentioned in the section "Financial Result”, on page 10;

 

§  Deterioration of Cnova debt by approximately R$1.1 billion.

 

 

31

 

 


 

            Capital Expenditure (Capex)

 

  Consolidated Food Businesses  Via Varejo
 
(R$ million)  2Q16  2Q15  Δ  1H16  1H15  Δ  2Q16  2Q15  Δ  2Q16  2Q15  Δ 
 
New stores and land acquisition  96  122  -21.4%  200  259  -22.6%  93  101  -7.6%  3  21  -87.3% 
Store renovations and conversions  190  169  12.9%  332  293  13.3%  171  136  26.4%  19  33  -42.5% 
Infrastructure and Others  134  249  -46.0%  338  439  -22.8%  55  108  -48.9%  14  66  -79.0% 
Non-cash Effect
Financing Assets  (127)  (69)  83.2%  (210)  (4)  4816.3%  (118)  (49)  137.5%  -  (20)  n.a. 
Total  293  470  -37.6%  661  986  -33.0%  202  295  -31.4%  36  101  -64.5% 

 

Consolidated capex in the quarter totaled R$293 million, of which 69% was invested in the Food segment. 

In terms of store openings in the period, the Company opened five Minuto Pão de Açúcar stores and one Assaí, Pão de Açúcar, Casas Bahia and Ponto Frio store each.

In the Food segment, it is important to highlight the opening of the first Assaí store in the North region. Another 10 Assaí stores are under construction, of which two are Extra Hiper stores in the process of being converted to Assaí, which will serve as pilots for additional conversions in the coming years.

Via Varejo will continue to focus on implementing strategic projects: i) store renovations for the new store-in-store mobile concept (307 stores)(1) and; ii) conversion to Casas Bahia stores (82 stores) (1)  

(1)   In the last 12 months.

 

 

 

32

 

 


 

 

Appendix I - Cnova Investigation

 

As announced by the Company and by its subsidiary Cnova NV, the investigation of Cnova Brasil has been completed. The total effect of adjustments made at Cnova N.V. was a negative impact of R$557 million, including adjustments resulting from the investigation launched on December 18, 2015, the effects of the change in accounting practices and the reassessment of the recoverability of deferred taxes at Cnova N.V., Cnova Brasil and Cdiscount. In the Company's consolidated financial statements for the fiscal year ended December 31, 2015 and disclosed on February 24, 2016, some of these effects had already been identified and recorded.

The following table reconciles the final amounts and the additional effects reported in these restated financial statements for December 31, 2015, as well as the allocation of effects by fiscal year. The amounts below are in R$ million:

  Adjustments    Effect on             
  made and    shareholders    Effect on        Effect on 
  reported on  Other  Equity on    shareholders  Effect on  Effect on  Effect on  12/31/2015  
  12/31/15  adjustments  12/31/2015    Equity on 12/31/2014 12/31/2013   12/31/2012   and previous 
  (i)  made in 2015  restated (iv) Final amount   12/31/2015  Results  Results  Results  Results 
Adjustments resulting from the investigation  (177)  (34)  (146)  (357)  -  (83)  (186)  (6)  (82) 
Change in accounting practice (ii)  -  (18)  -  (18)  -  (5)  10  (10)  (13) 
Revaluation of deferred income tax - Cnova                   
Brasil (iii)  -  (24)  (60)  (84)  -  (84)  -  -  - 
Revaluation of deferred income tax - Cnova                   
N.V. and Cdiscount (iii)  -  -  (98)  (98)  (53)  (45)  -  -  - 
Total  (177)  (76)  (304)  (557)  (53)  (217)  (176)  (16)  (95) 

 

(i)         Adjustments identified by the investigation team and reported in the financial statements, originally published on February 24, 2016, disclosed in Note 1.4;

(ii)        Change in accounting practice for booking storage costs under inventory, already reported in the financial statements originally published on December 31, 2015;

(iii)       On December 31, 2015, the Company had partially written off the deferred income tax of Cnova Brasil based on the facts and circumstances available at the time;

(iv)       Effect on Shareholders Equity as of 12/31/2015 restated as of 7/27/2016.

 

The figures in this earnings release for 2Q16, as well as figures presented in comparison with 2Q16 figures, already reflect the restatement of the Company's financial statements as a result of the adjustments at Cnova.

 

33

 

 


 

 

The impacts from the restatements of adjustments made in 2015 and 2016 by quarter are presented below, in millions of R$:

  Consolidated
          Accumulated   
  Effect on  Effect on  Effect on  Effect on  Effect in  Effect on 
  1Q15  2Q15  3Q15  4Q15  2015  1T16 
 
Net Sales from Goods and/or Services  (23)  6  13  109  105  20 
Cost of Goods Sold and/or Services Sold  29  14  (14)  38  68  22 
Selling Expenses  (5)  (1)  (4)  (11)  (22)  - 
General and Administrative Expenses  (2)  (0)  (3)  (1)  (6)  - 
Depreciation/Amortization  2  0  0  0  2  - 
Other Operating Expenses  -  -  -  0  0  - 
Financial Income  (1)  (3)  (1)  (1)  (5)  - 
Income tax and Social Contribution  -  -  -  (104)  (104)  (20) 
Net Income (loss)  -  16  (9)  31  38  22 
Net Income / loss attributable to Owners of the Company  -  6  (3)  11  14  8 
Net Income / loss attributable to Non-controlling Interests  -  10  (5)  20  24  14 

 

  Consolidated
 
  03.31.2015  06.30.2015  09.30.2015  12.31.2015  03.31.2016 
Trade Receivables  (30)  (26)  (22)  (8)  (8) 
Other Receivables  (34)  (40)  (49)  17  17 
Inventories  (34)  (38)  (46)  (24)  (24) 
Others    -  -  (1)  (1) 
Income tax and Social Contribution  2  (4)  (6)  -  - 
Deferred Taxes - short term  -  -  -  (158)  (178) 
Other Intangibles  -  -  -  (21)  (21) 
Operating Fixed Assets  (63)  (65)  (68)  (66)  (66) 
Total Assets  (159)  (173)  (191)  (261)  (279) 
 
National Suppliers  84  60  55  23  2 
Deferred revenue  (2)  (2)  -  -  - 
Demais Contas a Pagar  47  41  35  20  1 
Shareholders Equity  (288)  (272)  (281)  (304)  (282) 
Total Liabilities  (159)  (173)  (191)  (261)  (279) 

  

 

34

 

 


 

 

Appendix II - Definitions used in this document

 

Company’s Business Units: The Company’s business is divided into four units - Retail, Cash & Carry, Bricks and mortar (sale of home appliances and furniture) and E-commerce – grouped as follows:

 

 

Same-Store Sales: The basis for calculating same-store sales is defined by the sales registered in stores open for at least 12 consecutive months. Acquisitions in their first 12 months of operation are not included in the same-store calculation base.

Growth and changes: The growth and changes presented in this document refer to variations from the same period of the previous year, except where stated otherwise.

EBITDA: EBITDA is calculated in accordance with Instruction 527 issued by the Securities and Exchange Commission of Brazil (CVM) on October 4, 2012. 

Adjusted EBITDA: Measure of profitability calculated by excluding Other Operating Income and Expenses from EBITDA. Management uses this measure because it believes it eliminates nonrecurring expenses and revenues and other nonrecurring items that could compromise the comparability and analysis of results. 

Adjusted net income: Measure of profitability calculated as Net Income excluding Other Operating Income and Expenses and excluding the effects of Income and Social Contribution Taxes. Also excluded are the effects of nonrecurring direct income tax. Management uses this metric in its analyses given its belief that it eliminates any nonrecurring expenses and revenues and other nonrecurring items that could compromise the comparability and analysis of results.

 

35

 

 


 

 

BALANCE SHEET
  
ASSETS
 
  Consolidated Food Businesses
 
(R$ million)  06.30.2016  03.31.2016  06.30.2015  06.30.2016  03.31.2016  06.30.2015 
 
Current Assets  19,448  21,076  19,375  7,956  8,010  7,041 
Cash and Marketable Securities  3,716  4,448  6,811  1,426  2,386  2,408 
Accounts Receivable  4,310  5,321  2,636  1,073  247  151 
Credit Cards  1,982  2,851  158  820  37  39 
Payment book  1,806  1,815  1,986  -  -  - 
Sales Vouchers and Others  792  804  692  180  136  104 
Allowance for Doubtful Accounts  (357)  (360)  (342)  (2)  (2)  (1) 
Resulting from Commercial Agreements  87  211  142  74  76  9 
Inventories  8,943  9,161  8,212  4,425  4,487  3,852 
Recoverable Taxes  1,547  1,228  988  616  429  213 
Noncurrent Assets for Sale  9  13  22  8  8  8 
Dividends Receivable  -  -  27  -  -  19 
Expenses in Advance and Other Accounts Receivables  923  905  679  408  452  390 
 
Noncurrent Assets  22,586  22,408  22,114  16,113  15,928  15,624 
Long-Term Assets  5,113  4,983  5,048  1,960  1,906  2,057 
Accounts Receivables  119  123  78  -  -  - 
Credit Cards  15  29  -  -  -  - 
Payment Book  119  106  87  -  -  - 
Allowance for Doubtful Accounts  (15)  (12)  (9)  -  -  - 
Recoverable Taxes  2,473  2,419  2,507  569  550  555 
Deferred Income Tax and Social Contribution  330  364  500  16  44  84 
Amounts Receivable from Related Parties  342  312  357  77  63  195 
Judicial Deposits  1,151  1,067  945  629  583  578 
Expenses in Advance and Others  699  698  661  669  666  644 
Investments  469  439  507  303  282  313 
Property and Equipment  10,532  10,419  10,023  9,032  8,911  8,482 
Intangible Assets  6,472  6,567  6,537  4,819  4,829  4,771 
TOTAL ASSETS  42,034  43,484  41,490  24,069  23,939  22,665 

 

LIABILITIES
 
  Consolidated Food Businesses
 
  06.30.2016  03.31.2016  06.30.2015  06.30.2016  03.31.2016  06.30.2015 
 
Current Liabilities  21,668  22,692  19,313  9,087  8,946  6,812 
Suppliers  10,268  10,849  10,291  4,470  4,312  3,662 
Suppliers ('Forfait')  430  350  -  -  -  - 
Loans and Financing  3,184  3,190  781  2,390  2,351  418 
Payment Book (CDCI)  2,355  2,293  2,311  -  -  - 
Debentures  575  522  1,681  575  522  1,260 
Payroll and Related Charges  1,052  1,001  805  556  543  432 
Taxes and Social Contribution Payable  729  932  684  179  180  166 
Dividends Proposed  3  2  1  0  0  1 
Financing for Purchase of Fixed Assets  113  70  72  86  48  72 
Rents  119  133  92  77  90  69 
Acquisition of Companies  82  80  77  82  80  77 
Debt with Related Parties  1,247  1,446  1,286  363  173  316 
Advertisement  67  83  78  50  62  34 
Provision for Restructuring  8  10  8  4  6  6 
Advanced Revenue  350  426  309  56  132  119 
Others  1,086  1,305  837  200  449  180 
  
Long-Term Liabilities  7,484  7,517  7,767  5,193  5,097  5,997 
Loans and Financing  1,803  2,052  2,854  1,653  1,650  2,431 
Payment Book (CDCI)  193  171  99  -  -  - 
Debentures  898  898  897  898  898  897 
Financing for Purchase of Assets  4  4  4  4  4  4 
Acquisition of Companies  23  27  62  -  -  62 
Deferred Income Tax and Social Contribution  1,058  1,148  1,214  1,031  1,119  1,185 
Tax Installments  555  563  587  554  563  587 
Provision for Contingencies  1,784  1,437  1,310  992  802  760 
Advanced Revenue  1,117  1,171  690  29  30  36 
Others  49  47  51  33  31  35 
 
Shareholders' Equity  12,883  13,276  14,410  9,789  9,895  9,856 
Capital  6,807  6,806  6,805  5,374  5,135  4,683 
Capital Reserves  313  308  291  313  308  291 
Profit Reserves  3,006  3,282  3,639  2,978  3,381  3,736 
Adjustment of Equity Valuation  (12)  (71)  (8)  (14)  (68)  (8) 
Minority Interest  2,769  2,951  3,683  1,138  1,140  1,154 
TOTAL LIABILITIES  42,034  43,484  41,490  24,069  23,939  22,665 

 

 

36

 

 


 

 

 

INCOME STATEMENT

 
 

Consolidated

Food Businesses Multivarejo Assaí Via Varejo
 
R$ - Million  1H16  1H15  Δ  1H16  1H15  Δ  1H16  1H15  Δ  1H16  1H15  Δ  1H16  1H15  Δ 
Gross Revenue  38,812  37,067  4.7%  21,282  19,340  10.0%  14,236  14,197  0.3%  7,046  5,143  37.0%  10,379  10,948  -5.2% 
Net Revenue  34,458  33,327  3.4%  19,623  17,869  9.8%  13,129  13,113  0.1%  6,495  4,756  36.6%  9,010  9,678  -6.9% 
Cost of Goods Sold  (26,240)  (25,255)  3.9%  (15,035)  (13,562)  10.9%  (9,486)  (9,459)  0.3%  (5,549)  (4,103)  35.3%  (5,897)  (6,464)  -8.8% 
Depreciation (Logistic)  (61)  (68)  -10.9%  (28)  (29)  -4.1%  (25)  (26)  -4.0%  (2)  (2)  -4.9%  (20)  (28)  -27.9% 
Gross Profit  8,157  8,003  1.9%  4,561  4,278  6.6%  3,617  3,627  -0.3%  943  651  44.9%  3,094  3,186  -2.9% 
Selling Expenses  (6,047)  (5,491)  10.1%  (3,243)  (2,896)  12.0%  (2,653)  (2,446)  8.5%  (589)  (451)  30.8%  (2,279)  (2,188)  4.2% 
General and Administrative Expenses  (946)  (858)  10.3%  (429)  (364)  18.0%  (341)  (308)  10.8%  (88)  (56)  57.9%  (279)  (253)  10.5% 
Selling, General and Adm. Expenses  (6,994)  (6,349)  10.1%  (3,672)  (3,260)  12.6%  (2,995)  (2,753)  8.8%  (677)  (506)  33.8%  (2,558)  (2,441)  4.8% 
Equity Income  61  62  -1.2%  44  45  -3.2%  44  45  -3.2%  -  -  n.a.  17  17  4.2% 
Other Operating Revenue (Expenses)  (549)  (153)  259.5%  (306)  (100)  205.6%  (267)  (104)  157.3%  (39)  3  n.a.  (80)  32  n.a. 
Depreciation and Amortization  (501)  (469)  6.9%  (353)  (334)  5.7%  (291)  (288)  1.2%  (62)  (46)  33.6%  (87)  (87)  0.0% 
Earnings before interest and Taxes - EBIT  175  1,094  -84.0%  273  629  -56.6%  109  528  -79.4%  165  102  61.6%  386  707  -45.3% 
Financial Revenue  309  450  -31.2%  117  217  -46.1%  97  209  -53.4%  20  8  146.3%  172  178  -3.3% 
Financial Expenses  (1,216)  (1,149)  5.9%  (539)  (559)  -3.5%  (472)  (510)  -7.5%  (67)  (48)  38.6%  (469)  (453)  3.5% 
Net Financial Revenue (Expenses)  (907)  (699)  29.8%  (423)  (342)  23.5%  (375)  (302)  24.3%  (47)  (40)  17.4%  (297)  (276)  7.9% 
Income Before Income Tax  (732)  395  n.a.  (149)  287  n.a.  (266)  226  n.a.  117  62  90.5%  89  431  -79.4% 
Income Tax  (7)  (157)  -95.5%  30  (67)  n.a.  76  (46)  n.a.  (46)  (21)  119.2%  (23)  (141)  -83.4% 
Net Income - Company  (739)  238  n.a.  (119)  220  n.a.  (190)  179  n.a.  71  40  75.5%  66  290  -77.4% 
Minority Interest - Noncontrolling  (413)  (20)  n.a.  (5)  (7)  -36.8%  (5)  (7)  -36.8%  -  -  n.a.  37  164  -77.4% 
Net Income - Controlling Shareholders(1) (327)  258  n.a.  (115)  227  n.a.  (186)  187  n.a.  71  40  75.5%  28  126  -77.4% 
Earnings before Interest, Taxes, Depreciation, Amortization - EBITDA  737  1,631  -54.8%  654  993  -34.1%  425  842  -49.5%  229  151  52.0%  493  821  -40.0% 
Adjusted EBITDA (2) 1,286  1,784  -27.9%  960  1,093  -12.1%  692  945  -26.8%  268  147  82.3%  573  789  -27.4% 
 
 
  Consolidated   Food Businesses   Multivarejo   Assaí   Via Varejo  
% Net Sales Revenue           
  1H16  1H15    1H16  1H15    1H16  1H15    1H16  1H15    1H16  1H15   
Gross Profit  23.7%  24.0%    23.2%  23.9%    27.6%  27.7%    14.5%  13.7%    34.3%  32.9%   
Selling Expenses  17.5%  16.5%    16.5%  16.2%    20.2%  18.7%    9.1%  9.5%    25.3%  22.6%   
General and Administrative Expenses  2.7%  2.6%    2.2%  2.0%    2.6%  2.3%    1.4%  1.2%    3.1%  2.6%   
Selling, General and Adm. Expenses  20.3%  19.1%    18.7%  18.2%    22.8%  21.0%    10.4%  10.6%    28.4%  25.2%   
Equity Income  0.2%  0.2%    0.2%  0.3%    0.3%  0.3%    0.0%  0.0%    0.2%  0.2%   
Other Operating Revenue (Expenses)  1.6%  0.5%    1.6%  0.6%    2.0%  0.8%    0.6%  -0.1%    0.9%  -0.3%   
Depreciation and Amortization  1.5%  1.4%    1.8%  1.9%    2.2%  2.2%    1.0%  1.0%    1.0%  0.9%   
EBIT  0.5%  3.3%    1.4%  3.5%    0.8%  4.0%    2.5%  2.1%    4.3%  7.3%   
Net Financial Revenue (Expenses)  2.6%  2.1%    2.2%  1.9%    2.9%  2.3%    0.7%  0.8%    3.3%  2.8%   
Income Before Income Tax  -2.1%  1.2%    -0.8%  1.6%    -2.0%  1.7%    1.8%  1.3%    1.0%  4.5%   
Income Tax  0.0%  0.5%    -0.2%  0.4%    -0.6%  0.4%    0.7%  0.4%    0.3%  1.5%   
Net Income - Company  -2.1%  0.7%    -0.6%  1.2%    -1.4%  1.4%    1.1%  0.9%    0.7%  3.0%   
Minority Interest - noncontrolling  -1.2%  -0.1%    0.0%  0.0%    0.0%  -0.1%    0.0%  0.0%    0.4%  1.7%   
Net Income - Controlling Shareholders(1) -0.9%  0.8%    -0.6%  1.3%    -1.4%  1.4%    1.1%  0.9%    0.3%  1.3%   
EBITDA  2.1%  4.9%    3.3%  5.6%    3.2%  6.4%    3.5%  3.2%    5.5%  8.5%   
Adjusted EBITDA (2) 3.7%  5.4%    4.9%  6.1%    5.3%  7.2%    4.1%  3.1%    6.4%  8.2%   
(1) Net Income after noncontrolling shareholders
(2) Adjusted EBITDA by excluding the Other Operating Revenue (Expenses), thereby eliminating nonrecurring income, expenses and other nonrecurring items.

 

 

37

 


 

 

 

 

INCOME STATEMENT

 
 

Consolidated

Food Businesses Multivarejo Assaí Via Varejo
 
R$ - Million  1H16  1H15  Δ  1H16  1H15  Δ  1H16  1H15  Δ  1H16  1H15  Δ  1H16  1H15  Δ 
Gross Revenue  38,812  37,067  4.7%  21,282  19,340  10.0%  14,236  14,197  0.3%  7,046  5,143  37.0%  10,379  10,948  -5.2% 
Net Revenue  34,458  33,327  3.4%  19,623  17,869  9.8%  13,129  13,113  0.1%  6,495  4,756  36.6%  9,010  9,678  -6.9% 
Cost of Goods Sold  (26,240)  (25,255)  3.9%  (15,035)  (13,562)  10.9%  (9,486)  (9,459)  0.3%  (5,549)  (4,103)  35.3%  (5,897)  (6,464)  -8.8% 
Depreciation (Logistic)  (61)  (68)  -10.9%  (28)  (29)  -4.1%  (25)  (26)  -4.0%  (2)  (2)  -4.9%  (20)  (28)  -27.9% 
Gross Profit  8,157  8,003  1.9%  4,561  4,278  6.6%  3,617  3,627  -0.3%  943  651  44.9%  3,094  3,186  -2.9% 
Selling Expenses  (6,047)  (5,491)  10.1%  (3,243)  (2,896)  12.0%  (2,653)  (2,446)  8.5%  (589)  (451)  30.8%  (2,279)  (2,188)  4.2% 
General and Administrative Expenses  (946)  (858)  10.3%  (429)  (364)  18.0%  (341)  (308)  10.8%  (88)  (56)  57.9%  (279)  (253)  10.5% 
Selling, General and Adm. Expenses  (6,994)  (6,349)  10.1%  (3,672)  (3,260)  12.6%  (2,995)  (2,753)  8.8%  (677)  (506)  33.8%  (2,558)  (2,441)  4.8% 
Equity Income  61  62  -1.2%  44  45  -3.2%  44  45  -3.2%  -  -  n.a.  17  17  4.2% 
Other Operating Revenue (Expenses)  (549)  (153)  259.5%  (306)  (100)  205.6%  (267)  (104)  157.3%  (39)  3  n.a.  (80)  32  n.a. 
Depreciation and Amortization  (501)  (469)  6.9%  (353)  (334)  5.7%  (291)  (288)  1.2%  (62)  (46)  33.6%  (87)  (87)  0.0% 
Earnings before interest and Taxes - EBIT  175  1,094  -84.0%  273  629  -56.6%  109  528  -79.4%  165  102  61.6%  386  707  -45.3% 
Financial Revenue  309  450  -31.2%  117  217  -46.1%  97  209  -53.4%  20  8  146.3%  172  178  -3.3% 
Financial Expenses  (1,216)  (1,149)  5.9%  (539)  (559)  -3.5%  (472)  (510)  -7.5%  (67)  (48)  38.6%  (469)  (453)  3.5% 
Net Financial Revenue (Expenses)  (907)  (699)  29.8%  (423)  (342)  23.5%  (375)  (302)  24.3%  (47)  (40)  17.4%  (297)  (276)  7.9% 
Income Before Income Tax  (732)  395  n.a.  (149)  287  n.a.  (266)  226  n.a.  117  62  90.5%  89  431  -79.4% 
Income Tax  (7)  (157)  -95.5%  30  (67)  n.a.  76  (46)  n.a.  (46)  (21)  119.2%  (23)  (141)  -83.4% 
Net Income - Company  (739)  238  n.a.  (119)  220  n.a.  (190)  179  n.a.  71  40  75.5%  66  290  -77.4% 
Minority Interest - Noncontrolling  (413)  (20)  n.a.  (5)  (7)  -36.8%  (5)  (7)  -36.8%  -  -  n.a.  37  164  -77.4% 
Net Income - Controlling Shareholders(1) (327)  258  n.a.  (115)  227  n.a.  (186)  187  n.a.  71  40  75.5%  28  126  -77.4% 
Earnings before Interest, Taxes, Depreciation, Amortization - EBITDA  737  1,631  -54.8%  654  993  -34.1%  425  842  -49.5%  229  151  52.0%  493  821  -40.0% 
Adjusted EBITDA (2) 1,286  1,784  -27.9%  960  1,093  -12.1%  692  945  -26.8%  268  147  82.3%  573  789  -27.4% 
 
 
  Consolidated   Food Businesses   Multivarejo   Assaí   Via Varejo  
% Net Sales Revenue           
  1H16  1H15    1H16  1H15    1H16  1H15    1H16  1H15    1H16  1H15   
Gross Profit  23.7%  24.0%    23.2%  23.9%    27.6%  27.7%    14.5%  13.7%    34.3%  32.9%   
Selling Expenses  17.5%  16.5%    16.5%  16.2%    20.2%  18.7%    9.1%  9.5%    25.3%  22.6%   
General and Administrative Expenses  2.7%  2.6%    2.2%  2.0%    2.6%  2.3%    1.4%  1.2%    3.1%  2.6%   
Selling, General and Adm. Expenses  20.3%  19.1%    18.7%  18.2%    22.8%  21.0%    10.4%  10.6%    28.4%  25.2%   
Equity Income  0.2%  0.2%    0.2%  0.3%    0.3%  0.3%    0.0%  0.0%    0.2%  0.2%   
Other Operating Revenue (Expenses)  1.6%  0.5%    1.6%  0.6%    2.0%  0.8%    0.6%  -0.1%    0.9%  -0.3%   
Depreciation and Amortization  1.5%  1.4%    1.8%  1.9%    2.2%  2.2%    1.0%  1.0%    1.0%  0.9%   
EBIT  0.5%  3.3%    1.4%  3.5%    0.8%  4.0%    2.5%  2.1%    4.3%  7.3%   
Net Financial Revenue (Expenses)  2.6%  2.1%    2.2%  1.9%    2.9%  2.3%    0.7%  0.8%    3.3%  2.8%   
Income Before Income Tax  -2.1%  1.2%    -0.8%  1.6%    -2.0%  1.7%    1.8%  1.3%    1.0%  4.5%   
Income Tax  0.0%  0.5%    -0.2%  0.4%    -0.6%  0.4%    0.7%  0.4%    0.3%  1.5%   
Net Income - Company  -2.1%  0.7%    -0.6%  1.2%    -1.4%  1.4%    1.1%  0.9%    0.7%  3.0%   
Minority Interest - noncontrolling  -1.2%  -0.1%    0.0%  0.0%    0.0%  -0.1%    0.0%  0.0%    0.4%  1.7%   
Net Income - Controlling Shareholders(1) -0.9%  0.8%    -0.6%  1.3%    -1.4%  1.4%    1.1%  0.9%    0.3%  1.3%   
EBITDA  2.1%  4.9%    3.3%  5.6%    3.2%  6.4%    3.5%  3.2%    5.5%  8.5%   
Adjusted EBITDA (2) 3.7%  5.4%    4.9%  6.1%    5.3%  7.2%    4.1%  3.1%    6.4%  8.2%   
(1) Net Income after noncontrolling shareholders
(2) Adjusted EBITDA by excluding the Other Operating Revenue (Expenses), thereby eliminating nonrecurring income, expenses and other nonrecurring items.

 

 

38

 

 


 

 

  

STATEMENT OF CASH FLOW
(R$ million)  Consolidated 
  06.30.2016  06.30.2015 
Net Income (Loss) for the period  (739)  238 
Adjustment for reconciliation of net income       
Deferred income tax  (67)  97 
Loss (gain) on disposal of fixed and intangible assets  9  38 
Depreciation and amortization  558  535 
Interests and exchange variation  647  549 
Adjustment to present value  -  8 
Equity Income  (61)  (62) 
Provision for contingencies  477  26 
Share-Based Compensation  7  11 
Allowance for doubtful accounts  295  251 
Provision for obsolescence/breakage  (10)  (10) 
Gains resulting from sale of subisidiaries  (94)  - 
Deferred revenue  (202)  (56) 
Other Operating Expenses  -  (9) 
  820  1,616 
Asset (Increase) decreases       
Accounts receivable  (1,501)  344 
Inventories  (149)  392 
Taxes recoverable  (441)  (432) 
Other Assets  (239)  (188) 
Related parties  48  (177) 
Restricted deposits for legal proceeding  (137)  (60) 
  (2,419)  (121) 
Liability (Increase) decrease       
Suppliers  (4,894)  (3,236) 
Suppliers ('Forfait')  (625)  - 
Payroll and charges  29  (62) 
Taxes and Social contributions payable  (152)  (259) 
Other Accounts Payable  (514)  (260) 
Contingencies  (161)  (141) 
Deferred revenue  31  6 
   (6,286)  (3,952) 
Net cash generated from (used in) operating activities  (7,885)  (2,457) 
 
CASH FLOW FROM INVESTMENT AND FINANCING ACTIVITIES
  Consolidated 
(R$ million)  06.30.2016  06.30.2015 
Acquisition of property and equipment  (499)  (755) 
Increase Intangible assets  (162)  (231) 
Sales of property and equipment  108  34 
Cash provided on sale of subisidiary  91  7 
Net cash flow investment activities  (462)  (945) 
 
Cash flow from financing activities       
Increase of capital  1  13 
Funding and refinancing  3,531  3,134 
Payments of loans and financing  (3,139)  (4,835) 
Dividend Payment  (4)  (358) 
Proceeds from stock offering, net of issue costs  -  (4) 
Intercompany loans  665  1,114 
Net cash generated from (used in) financing activities  1,054  (936) 
 
Monetary variation over cash and cash equivalents  (6)  - 
Increase (decrease) in cash and cash equivalents  (7,299)  (4,338) 
 
Cash and cash equivalents at the beginning of the year  11,015  11,149 
Cash and cash equivalents at the end of the year  3,716  6,811 
Change in cash and cash equivalents  (7,299)  (4,338) 

 

 

39

 

 


 

 

 

 

BREAKDOWN OF GROSS SALES BY BUSINESS

(R$ million)  2Q16  %  2Q15  %  Δ  1H16  %  1H15  %  Δ 
 
Pão de Açúcar  1,778  9.5%  1,735  9.7%  2.5%  3,582  9.2%  3,432  9.3%  4.4% 
Extra (1) 4,274  22.8%  4,510  25.2%  -5.2%  8,859  22.8%  9,216  24.9%  -3.9% 
Convenience Stores (2) 301  1.6%  247  1.4%  22.2%  605  1.6%  460  1.2%  31.6% 
Assaí  3,632  19.4%  2,646  14.8%  37.2%  7,046  18.2%  5,143  13.9%  37.0% 
Other Businesses (3) 575  3.1%  557  3.1%  3.1%  1,190  3.1%  1,089  2.9%  9.3% 
Food Businesses  10,561  56.3%  9,696  54.2%  8.9%  21,282  54.8%  19,340  52.2%  10.0% 
Pontofrio  839  4.5%  1,027  5.7%  -18.3%  1,803  4.6%  2,413  6.5%  -25.3% 
Casas Bahia  4,130  22.0%  3,837  21.4%  7.6%  8,576  22.1%  8,535  23.0%  0.5% 
Cnova  3,220  17.2%  3,344  18.7%  -3.7%  7,151  18.4%  6,779  18.3%  5.5% 
Non-Food Businesses  8,188  43.7%  8,208  45.8%  -0.2%  17,530  45.2%  17,727  47.8%  -1.1% 
Consolidated  18,749  100.0%  17,904  100.0%  4.7%  38,812  100.0%  37,067  100.0%  4.7% 
(1) Includes Extra Supermercado and Extra Hiper.
(2) Includes M inimercado Extra and M inuto Pão de Açúcar sales.
(3) Includes Gas Station, Drugstores, Delivery sales and revenues from the leasing of commercial galleries.
 
 
 
 

BREAKDOWN OF NET SALES BY BUSINESS

(R$ million)  2Q16  %  2Q15  %  Δ  1H16  %  1H15  %  Δ 
 
Pão de Açúcar  1,634  9.8%  1,595  9.9%  2.5%  3,294  9.6%  3,157  9.5%  4.4% 
Extra (1) 3,910  23.4%  4,137  25.7%  -5.5%  8,102  23.5%  8,457  25.4%  -4.2% 
Convenience Stores (2) 280  1.7%  231  1.4%  21.4%  563  1.6%  432  1.3%  30.5% 
Assaí  3,347  20.1%  2,445  15.2%  36.9%  6,495  18.8%  4,756  14.3%  36.6% 
Other Businesses (3) 565  3.4%  546  3.4%  3.6%  1,170  3.4%  1,068  3.2%  9.6% 
Food Businesses  9,735  58.4%  8,953  55.6%  8.7%  19,623  56.9%  17,869  53.6%  9.8% 
Pontofrio  738  4.4%  918  5.7%  -19.6%  1,568  4.6%  2,150  6.5%  -27.1% 
Casas Bahia  3,583  21.5%  3,388  21.0%  5.7%  7,442  21.6%  7,528  22.6%  -1.1% 
Cnova  2,627  15.7%  2,853  17.7%  -7.9%  5,824  16.9%  5,780  17.3%  0.8% 
Non-Food Businesses  6,948  41.6%  7,159  44.4%  -2.9%  14,835  43.1%  15,457  46.4%  -4.0% 
Consolidated  16,684  100.0%  16,112  100.0%  3.5%  34,458  100.0%  33,327  100.0%  3.4% 
(1) Includes Extra Supermercado and Extra Hiper.
(2) Includes M inimercado Extra and M inuto Pão de Açúcar sales.
(3) Includes Gas Station, Drugstores, Delivery sales and revenues from the leasing of commercial galleries.

(1) Does not include Cdiscount.

 

 

 

40

 

 


 

   

SALES BREAKDOWN (% of Net Sales)
  
  Consolidated(1) Food Businesses
  2Q16  2Q15    1H16  1H15    2Q16  2Q15    1H16  1H15 
 
Cash  43.4%  43.9%  43.8%  43.8%  51.3%  51.6%  51.9%  52.1% 
Credit Card  46.5%  46.3%  46.5%  46.6%  38.7%  38.8%  38.3%  38.4% 
Food Voucher  6.5%  5.9%  6.2%  5.6%  10.0%  9.6%  9.8%  9.5% 
Payment Book  3.6%  3.9%  3.5%  4.0%  0.0%  0.0%  0.0%  0.0% 

 

 

    STORE OPENINGS/CLOSINGS BY BANNER   
  03/31/2016  Opened  Closed  Converted  06/30/2016 
 
Pão de Açúcar  185  1  (2)  -  184 
Extra Hiper  137  -  (2)  -  135 
Extra Supermercado  194  -  -  -  194 
Minimercado Extra  239  -  (9)  -  230 
Minuto Pão de Açucar  62  5  -  -  67 
Assaí  96  1  -  -  97 
Other Business  235  -  (4)  -  231 
Gas Station  78  -  (2)  -  76 
Drugstores  157  -  (2)  -  155 
Food Businesses  1,148  7  (17)  -  1,138 
Pontofrio  233  1  (2)  (7)  225 
Casas Bahia  745  1  (3)  7  750 
Consolidated  2,126  9  (22)  -  2,113 
 
Sales Area ('000 m2)            

Food Businesses 

1,794        1,782 

Consolidated 

2,868        2,854 
 
# of employees ('000)(1) 139        137 

                   

(1) Does not include Cdiscount employees.

 

 

 

41

 

 

 


 

 

 

2Q16 Results Conference Call and Webcast
Thursday, July 28, 2016
10:30 a.m. (Brasília) | 9:30 a.m. (New York) | 2:30 p.m. (London)

Conference call in Portuguese (original language)
+55 (11) 2188-0155

Conference call in English (simultaneous translation)
+1 (646) 843-6054

Webcast: http://www.gpari.com.br

Replay
+55 (11) 2188-0400
Access code for Portuguese audio: GPA
Access code for English audio: GPA

http://www.gpari.com.br

 

 

Investor Relations Contacts

 

 

GPA

Tel.: 55 (11) 3886-0421

Fax: 55 (11) 3884-2677

gpa.ri@gpabr.com

www.gpari.com.br

 

Via Varejo

Tel.: 55 (11) 4225-8668

Fax: 55 (11) 4225-9596

ri@viavarejo.com.br

www.viavarejo.com.br/ri

 

Cnova

Tel.: 33 (1) 5370-5590

investor@cnova.com

www.cnova.com/investor-relations


The individual and parent company financial statements are presented in accordance with IFRS and the accounting practices adopted in Brazil and refer to the second quarter of 2016 (2Q16), except where stated otherwise, with comparisons in relation to the prior-year period.

Any and all non-accounting information or derived from non-accounting figures has not been reviewed by independent auditors.

To calculate EBITDA, we use earnings before interest, taxes, depreciation and amortization. The base used to calculate "same-store" gross sales revenue is determined by the sales made in stores open for at least 12 consecutive months and which did not remain closed for seven or more consecutive days in the period. Acquisitions in their first 12 months of operation are not included in the same-store calculation base.

GPA adopts the IPCA consumer price index as its benchmark inflation index, which is also used by the Brazilian Supermarkets Association (ABRAS), since it more accurately reflects the mix of products and brands sold by the Company. IPCA inflation in the 12 months ended June 2016 was 8.84%.

About GPA: GPA is Brazil’s largest retailer, with a distribution network comprising over 2,000 points of sale as well as electronic channels. Established in 1948 in São Paulo, it has its head office in the city and operations in 20 Brazilian states and the Federal District. With a strategy of focusing its decisions on customers and better serving them based on their consumer profile in the wide variety of shopping experiences it offers, GPA adopts a multi-business and multi-channel platform with brick-and-mortar stores and e-commerce operations divided into five business units: Multivarejo, which operates the supermarket, hypermarket and Minimercado store formats, as well as fuel stations and drugstores under the Pão de Açúcar and Extra banners; Assaí, which operates in the cash-and-carry wholesale segment; Via Varejo, with its bricks and mortar electronics and home appliances stores under the Casas Bahia and Pontofrio banners; GPA Malls, which is responsible for managing the real estate assets, expansion projects and new store openings; and the e-commerce segment Cnova, which comprises the operations of Cnova Brazil, Cdiscount in France and their international websites.

Disclaimer: Statements contained in this release relating to the business outlook of the Company, projections of operating/financial results, the growth potential of the Company and the market and macroeconomic estimates are mere forecasts and were based on the expectations of Management in relation to the Company’s future. These expectations are highly dependent on changes in the market, Brazil’s general economic performance, the industry and international markets, and are thus subject to change.

 

 

 

42

 

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

1.      Corporate information

Companhia Brasileira de Distribuição ("Company" or “CBD”), directly or through its subsidiaries (“Group” or “GPA”) engages in the retail of food, clothing, home appliances, electronics and other products through its chain of hypermarkets, supermarkets, specialized stores and department stores principally under the trade names "Pão de Açúcar, “Minuto Pão de Açúcar”, "Extra Hiper", “Extra Super”, “Minimercado Extra”, “Assai”, “Ponto Frio” and “Casas Bahia", as well as the e-commerce platforms “CasasBahia.com,” “Extra.com”, “Pontofrio.com”, “Barateiro.com”, “Partiuviagens.com” and “Cdiscount.com” and the neighborhood shopping mall brand “Conviva”. Its headquarter is located in the city of São Paulo, State of São Paulo, Brazil.

The Company’s shares are listed on the São Paulo Stock Exchange (“BM&FBovespa”) Level 1 of Corporate Governance under the ticker symbol “PCAR4” and on the New York Stock Exchange (ADR level III), under the ticker symbol “CBD”. Subsidiaries that are public companies are Via Varejo S.A (“Via Varejo”) which has its shares listed on BM&FBovespa, under ticker symbols “VVAR11” and “VVAR3” and Cnova N.V (“Cnova Holanda”) which has its shares listed in Nasdaq Global Select Market under ticker symbol “CNV” and in Euronext Paris under ticker symbol “CNV”.

The Company is indirectly controlled by Almacenes Exito S.A., through Wilkes Participações S.A. (“Wilkes”), through the holding companies of Casino Guichard Perrachon (“Casino”), which continued to be the final controller.

1.1.   Morzan arbitration request

On August 14, 2015, CBD and its controlling shareholder Wilkes were jointly convicted by International Court of Arbitration - ICA, to indemnify Morzan Empreendimentos e Participações Ltda. (“Morzan”). Such decision was amended on January 27, 2016 with no significant changes.

The amount initially estimated to the Company is R$200 and is recorded in current liabilities “Other payables”, with effect of income tax of R$50, and a net effect of R$150 on “profit reserve”. See further details on note 25.7 in the financial statements for the year ended December 31, 2015.

The account payable in the amount of R$233, including legal fees, was fully settled in April 1, 2016.

 

 

43

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

1.      Corporate information

1.2    Investigation Cnova and restatement of corresponding amounts

As disclosed to the market in the note 1.6 of the restated consolidated financial statements as of December 31, 2015, disclosed on July 27, 2016, the Company is adjusting retrospectively this quarterly financial information in relation to the investigation initiated on December 18, 2015, by the subsidiary Cnova NV (“Cnova”), which was conducted by law firms has been established on the employee’s practices in inventories of Cnova Comércio Eletrônico S.A. (“Cnova Brasil”), a Cnova NV subsidiary, which is controlled by the Company.

There are no impacts related to the investigation in the six-month period ended June 30, 2016.

The amounts and nature of the adjustments were further described in the consolidated financial statements as of December 31, 2015, disclosed on July 27, 2016, which must be read in conjunction with this financial information also the information that investigation was concluded.

The adjusts that affect the balances presented in this interim financial information for the period ended June 30, 2016 are as follows:

June 30, de 2015:

       

Accounts

Trade payables

Write off accounts receivable carriers

Fixed assets and intangibles adjust

Trade accounts receivables and outstanding orders adjust

ICMS, freight, provision and others adjust

Total recorded 2015 - Previously announced

IAS 2 - Inventories

Net adjust 2015

         

 

     

Net sales of goods and services

-

(45)

-

29

(1)

(17)

-

(17)

Cost of goods sold and services sold

14

33

-

-

(2)

45

(1)

44

Gross profit

14

(12)

-

29

(3)

28

(1)

27

Operating income (expenses)

               

Selling expenses

-

8

(8)

(7)

1

(6)

-

(6)

General and administrative expenses

-

-

(3)

-

-

(3)

-

(3)

Depreciation and amortization

-

-

2

-

-

2

-

2

Profit before financial income (expenses)

14

(4)

(9)

22

(2)

21

(1)

20

Financial income (expenses)

-

-

-

-

(4)

(4)

-

(4)

Profit before income tax and social contribution

14

(4)

(9)

22

(6)

17

(1)

16

Income tax and social contribution

-

-

-

-

-

-

-

-

Net income (loss)

14

(4)

(9)

22

(6)

17

(1)

16

 

44


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

1.       Corporate information

1.2    Investigation Cnova and restatement of corresponding amounts - Continued

June 30, 2015:

 

 

Originally presented 6.30.2015

Total Investigation adjust

Restated as of 6.30.2015

       

Net sales of goods and services

33,344

(17)

33,327

Cost of goods sold and services sold

(25,368)

44

(25,324)

Gross profit

7,976

27

8,003

Operating income (expenses)

     

Selling expenses

(5,485)

(6)

(5,491)

General and administrative expenses

(855)

(3)

(858)

Depreciation and amortization

(471)

2

(469)

Equity pickup

62

-

62

Others operating income (expenses)

(153)

-

(153)

 

(6,902)

(7)

(6,909)

Profit before financial income (expenses)

1,074

20

1,094

Financial income (expenses)

(695)

(4)

(699)

Profit before income tax and social contribution

379

16

395

Income tax and social contribution

(157)

-

(157)

Net income (loss)

222

16

238

Atributtable to:

     

Controlling shareholders

252

6

258

Noncontrolling shareholders

(30)

10

(20)

 

 

Originally presented 6.30.2015

Total Investigation adjust

Restated as of 6.30.2015

       

Net cash provided by operating activities

(2,459)

2

(2,457)

Net cash provided by investing activities

(945)

-

(945)

 

45

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

1.       Corporate information – Continued

1.3.   Corporate restructuring

1.3.1.  Corporate reestructuring – Barcelona and Sendas

On April 27, 2016, was approved in Ordinary and Extraordinary Shareholders´ Meeting of CBD, the part of incorporation of the net assets of Sendas Distribuidora. The steps of this reorganization were preceded by the following corporate actions: (i) redemption Barcelona subsidiary shares held by subsidiary Novasoc; (ii) incorporation of the same date in Sendas Distribuidora of completeness net assets of the Barcelona subsidiary, which was consequently terminated; and (iii) spin-off of part of Sendas Distribuidora collection, also of the same date, with the consequent merger of the spun-off by CBD. As a result of this reorganization, there was no effect on the consolidated interim financial statements of the Company.

(i)   Redemption of Barcelona´s stock

On February 22, 2016, it was approved at the Extraordinary General Meeting the redemption of all preferred shares issued by Barcelona, that corresponding to 3,722,470 shares held by Novasoc at book value of R$160. The transaction did not generate impacts on the consolidated balances of the Company.

(ii)  Total merger of Barcelona

At the Ordinary and Extraordinary General Meeting of April 27, 2016 was approved the merger of Barcelona by Sendas.

On April 30, 2016 the assets and liabilities of Barcelona were fully incorporated to Sendas, consequently Barcelona was extinguished.

(iii)  Partial spin-off of Sendas

Still at the Annual and Extraordinary General Meeting of April 27, 2016 it was approved the spin off of Sendas. On April 30, 2016, after the total merger and extinction of Barcelona, Sendas was partially spun off and incorporated into the CBD. The value of the split assets was R$2.

1.3.2. Rede Duque disposal

On January 31, 2016, the Company concluded the disposal of subsidiaries Auto Posto Império Ltda., Auto Posto Duque Salim Maluf Ltda., Auto Posto Duque Santo André Ltda., Auto Posto Duque Lapa Ltda and Auto Posto Ciara Ltda., to Rede Duque, referring to the agreement previously signed on December 1, 2015. The agreement amount was R$8.

Company had no gain or loss over this transaction. Gas stations assets and liabilities amounts are not consolidated in interim financial information on June 30, 2016.

1.3.3. Sale of Cdiscount subsidiaries

During the first quarter of 2016, subsidiaries CD Vietnam, CD Thailand, CD Asia and E-cavi were sold, no longer being consolidated in the Company, however CD Vietnam and E-Cavi still remain in Casino Group.

(i)      Sale of interest - CDiscount Thailand

On March 21, 2016, subsidiary CDiscount sold its interest over CDiscount Thailand to TCC Group, by the amount of R$94. Transaction impacts were a cash of R$ 91, net of borrowings payment and a gain of R$94 in other operating income (expenses).

46

 


 
 
 

1.   Corporate information – Continued

1.3.   Corporate restructuring - Continued

1.3.3. Sale of Cdiscount subsidiaries - Continued

(ii)     Cdiscount corporate restructuring

On March 1, 2016 subsidiary CDiscount sold its interest over CDiscount Vietnam to E-Cavi, a Casino’s subsidiary. This transaction did not impact Company’s result.

These transactions did not impact segments information .

1.4.   Notices from CVM to GPA and subsidiary Via Varejo

On February 18, 2016, the subsidiary Via Varejo received a notice from CVM, the notice number 18/2016-CVM/SEP/GEA-5 showing the understanding of the Department of Relationship with Companies – SEP in relation to certain accounting entries related to corporate transactions at the level of Via Varejo in 2013. Due to the disclosed effects in its financial statementes the Company received the notice number 19/2016-CVM /SEP/GEA-5.

 

CVM notified its understanding which is different from the applied by Via Varejo in 2013 in relation to (a) revaluation of participation previously held in the sale of interest of Nova Pontocom to the Company (This tansaction has no effect in the consolidated financial statements); and (b) accounting treatment of the control acquisition of Movéis Bartira, by the acquisition of additional 75% interest. In the case of the Company, CVM noticed its understanding related to item (b) above mentioned.

 

The Company presented an appeal to CVM collegiate requesting suspensive effect in the terms of Deliberation 463, however decided for a restatement of item (i) from CVM notice in its subsidiary Via Varejo, which has no effects in the Company’s consolidated financial statements or interim financial information.  Via Varejo and the Company  awaits for a collegiate decision about the presented arguments for the item (ii), related to effects in acquisition of Indústria de Móveis Bartira.

 

Until this date, there are no effects recorded in the financial statements neither in the interim financial information of the Company or its Subsidiaries related to the requested by CVM notice about acquisition of Bartira.

1.5.   Association Via Varejo and Cnova Brazil

On May 12, 2016, the subsidiary Via Varejo announced that it entered into a non-binding Memorandum of Understanding (“MoU”) with its associate Cnova N.V. regarding a possible reorganization of Cnova Brazil, within the Company. As a result of the intended reorganization as outlined in the MoU, Via Varejo would transfer to Cnova approximately 97 million of Cnova´s shares currently held by the Company (21.9% of Cnova´s share capital) as well as a cash consideration ranging from USD 32 million to USD 49 million.  In addition, Via Varejo would reimburse a debt currently owed by Cnova Brazil to Cnova equivalent to approximately USD 127 million (the “proposed transaction”). Should the proposed transaction be completed, Via Varejo would become the sole shareholder of Cnova Brazil and would no longer be a shareholder of Cnova.

 

The Board of Via Varejo has established a Special Committee consisting of three members from the Company´s Board of Directors to supervise the process and to determine the terms and direction of the proposed transaction.

 

 

47


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

 

1.   Corporate information – Continued

1.5.   Association Via Varejo and Cnova Brazil

The parties expect to reach a definitive agreement with respect to the proposed transaction during the third quarter 2016.

 

2.       Basis of preparation

The individual and consolidated interim financial information has been prepared in accordance with IAS 34 - Interim Financial Reporting issued by the International Accounting Standard Board (“IASB”) and CPC 21 - Interim Financial Reporting and presented consistently with the standards approved and issued by the Brazilian Securities and Exchange Commission (“CVM”) applicable to the preparation of interim financial information – ITR.

The individual and consolidated interim financial information is being presented in millions of Brazilian Reais.The reporting currency of the Company is Real and for subsidiaries located abroad is the local currency of each jurisdiction.

Significant accounting policies adopted in the preparation of the individual and consolidated interim  financial information are consistent with those adopted and disclosed in note 4 of the annual financial statements for the year ended December 31, 2015 disclosed on July 27, 2016 and, therefore, should be read in conjunction with those annual financial statements.

The interim financial information for the six-month period ended June 30, 2016 was approved by the Board of Directors on July 27, 2016.

 

 

 

48

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

3.     Basis of consolidation

The information on the basis of consolidation did not have significant modification and was presented in the annual financial statements for 2015, in note 3.

3.1.   Interest in subsidiaries and associates:

 

Direct and indirect equity interests - %

 

6.30.2016

 

12.31.2015

Companies

Company

 

Indirect interest

 

Company

 

Indirect interest

Subsidiaries

             

Novasoc Comercial Ltda. (“Novasoc”)

10.00

 

-

 

10.00

 

-

Sendas Distribuidora S.A. (“Sendas)

100.00

 

-

 

100.00

 

-

Bellamar Empreend. e Participações Ltda. (“Bellamar”)

100.00

 

-

 

100.00

 

-

GPA Malls & Properties Gestão de Ativos e Serviços Imobiliários Ltda. (“GPA M&P”)

 

100.00

 

 

-

 

 

100.00

 

 

-

CBD Holland B.V. (“CBD Holland”)

100.00

 

-

 

100.00

 

-

CBD Panamá Trading Corp. (“CBD Panamá”)

-

 

100.00

 

-

 

100.00

Barcelona Comércio Varejista e Atacadista S.A. (“Barcelona”) (*)

-

 

-

 

68.86

 

31.14

Xantocarpa Participações Ltda. (“Xantocarpa”)

-

 

100.00

 

-

 

100.00

GPA 2 Empreed. e Participações Ltda. (“GPA 2”)

100.00

 

-

 

99.99

 

0.01

GPA Logística e Transporte Ltda. (“GPA Logística”)

100.00

 

-

 

100.00

 

-

Posto Ciara Ltda. (“Posto Ciara”)

-

 

-

 

100.00

 

-

Auto Posto Império Ltda. (“Posto Império”) (**)

-

 

-

 

100.00

 

-

Auto Posto Duque Salim Maluf Ltda. (“Posto Duque Salim Maluf”) (**)

-

 

-

 

100.00

 

-

Auto Posto Duque Santo André Ltda. (“Ponto Duque Santo André”) (**)

-

 

-

 

100.00

 

-

Auto Posto Duque Lapa Ltda. (“Posto Duque Lapa”) (**)

-

 

-

 

100.00

 

-

Marneylectro S.A.R.L (“Luxco”)

53.20

 

19.03

 

53.20

 

19.03

Marneylectro B.V (“Dutchco”)

-

 

72,23

 

-

 

72.23

Cnova N.V (“Cnova Holanda”)

-

 

36.09

 

-

 

36.09

Cnova Comércio Eletrônico S/A (”Cnova Comércio Eletrônico”)

-

 

36.09

 

-

 

36.09

E-Hub Consult. Particip. e Com. S.A. (“E – Hub”)

-

 

36.09

 

-

 

36.09

Nova Experiência PontoCom S.A (“Nova Experiência”)

-

 

36.09

 

-

 

36.09

Cdiscount S.A (“CDiscount”)

-

 

36.09

 

-

 

36.09

Cnova Finança B.V (“Cnova Finança”)

-

 

36.09

 

-

 

36.09

Financière MSR S.A.S (“Financière”)

-

 

36.02

 

-

 

36.02

Cdiscount Afrique S.A.S (“CDiscount Afrique”)

-

 

36.02

 

-

 

36.02

CD Africa SAS (“CD Africa”)

-

 

30.61

 

-

 

30.62

Cdiscount International BV The Netherlands (“Cdiscount Internacional”)

-

 

 

36.02

 

 

-

 

 

36.02

C-Distribution Asia Pte. Ltd. Singapore (“C-Distribution Asia”) (**)

-

 

-

 

-

 

21.61

CLatam AS Uruguay (“CLatam”)

-

 

23.66

 

-

 

25.21

Cdiscount Colombia S.A.S (“CDiscount Colombia”)

-

 

18.38

 

-

 

18.38

C Distribution Thailand Ltd. (“C Distribution Thailand”) (**)

-

 

-

 

-

 

15.13

E-Cavi Ltd Hong Kong (“E-Cavi”) (**)

-

 

-

 

-

 

17.29

Cdiscount Vietnam Co Ltd. (“CDiscount Vietnam”) (**)

-

 

-

 

-

 

17.29

Cnova France SAS (“CNova France”)

-

 

36.09

 

-

 

36.09

Cdiscount Côte d'Ivoire SAS Ivory Coast (“CDiscount Côte”)

-

 

30.62

 

-

 

30.62

Cdiscount Sénégal SAS (“CDiscount Sénégal”)

-

 

30.62

 

-

 

30.62

Cdiscount Panama S.A. (“CDiscount Panama”)

-

 

23.66

 

-

 

25.21

Cdiscount Cameroun SAS (“CDiscount Cameroun”)

-

 

30.61

 

-

 

30.62

Ecdiscoc Comercializadora S.A.(Cdiscount Ecuador) (“Ecdiscoc Comercializadora”)

-

 

 

23.66

 

 

-

 

 

25.21

Cdiscount Uruguay S.A. (“CDiscount Uruguay”)

-

 

23.66

 

-

 

25.21

Monconerdeco.com (Cdiscount Moncorner Deco) (“Monconerdeco.com”)

-

 

 

27.19

 

 

-

 

 

27.18

Cdiscount Moncorner (“CDiscount Moncorner”)

-

 

35.88

 

-

 

35.87

(*) See note 1.3.1

(**)Subsidiaries sold in 2016 (note 1.3.2 and 1.3.3).

 

 

 

 

 

 

 

49

 


 
 
 

 

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Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

3.     Basis of consolidation Continued       

3.1.   Interest in subsidiaries and associates – Continued

 

Direct and indirect equity interests - %

 

6.30.2016

 

12.31.2015

Companies

Company

 

Indirect interest

 

Company

 

Indirect interest

Subsidiaries

             

3W SAS (“3W”) (**)

-

 

35.88

 

-

 

35.87

3W Santé SAS (“3W Santé”)

-

 

33.19

 

-

 

33.18

Via Varejo S.A. (“Via Varejo”)

43.35

 

-

 

43.35

 

-

Indústria de Móveis Bartira Ltda. (“Bartira”)

-

 

43.35

 

-

 

43.35

VVLOG Logistica Ltda. (PontoCred Negócio de Varejo Ltda.) (“VVLOG Logística”)

-

 

43.35

 

-

 

43.35

Globex Adm e Serviços Ltda. (“Globex Adm”)

-

 

43.35

 

-

 

43.35

Lake Niassa Empreend. e Participações Ltda. (“Lake Niassa”)

-

 

43.35

 

-

 

43.35

Globex Adm. Consórcio Ltda. (“Globex Adm. Consórcio”)

-

 

43.35

 

-

 

43.35

 

 

 

 

 

 

 

 

Associates

 

 

 

 

 

 

 

Financeira Itaú CBD S/A Crédito, Financiamento e Investimento (“FIC”)

-

 

41.93

 

-

 

41.93

Banco Investcred Unibanco S.A. (“BINV”)

-

 

21.67

 

-

 

21.67

FIC Promotora de Vendas Ltda. (“FIC Promotora”)

-

 

41.93

 

-

 

41.93

 

In the individual interim financial information, equity interests are calculated considering the percentage held by CBD or by its subsidiaries. In the consolidated interim financial information, the Company fully consolidates all its subsidiaries, keeping noncontrolling interests in a specific line item in shareholders’ equity.

3.2.   Associates

Investments are accounted under the equity method because these associates are entities over which the Company exercises significant influence, but not control, since (a) it is a part of the shareholders’ agreement, appointing certain officers and having veto rights in certain relevant decisions, (b) the power over the operating and financial decisions of BINV and FIC is held by Banco Itaú Unibanco S.A (“Itaú Unibanco”).

FIC’s summarized financial statements are as follows:

 

FIC

 

6.30.2016

 

12.31.2015

Current assets

3,598

 

3,894

Noncurrent assets

52

 

38

Total assets

3,650

 

3,932

       

Current liabilities

2,655

 

3,070

Noncurrent liabilities

15

 

15

Shareholders’ equity

980

 

847

Total liabilities and shareholders’ equity

3,650

 

3,932

 

     

Statement of Profit and Loss :

6.30.2016

 

6.30.2015

 

 

 

 

Revenues

558

 

552

Operating income

209

 

216

Net income for the period

123

 

126

 

For FIC investment calculation, the special goodwill reserve is deducted from its shareholders’ equity, since it is Itaú Unibanco’s (controlling shareholder) exclusive right.

 

50

 


 
 
 

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Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

4.     Significant accounting policies

 

The significant accounting policies adopted by the Company in the preparation of the individual and consolidated interim financial information are consistent with those adopted and disclosed on Note 4 of the financial statements for the year ended December 31, 2015 disclosed on July 27, 2016 and therefore should be read in conjunction with those annual financial statements.

 

5.      Adoption of new standards, amendments to and interpretations of existing standards issued by the IASB and CPC and standards issued but not yet effective

In 2016, the Company began to apply the annual improvements to the IFRSs referring to the 2012-2014 and changes to IAS 1, which are effective for accounting periods beginning on or after January 1, 2016. The application of these improvements did not have impacts on the disclosures or on the Company’s individual and consolidated interim financial information.

The adoption of new standards, amendments to and interpretations of existing standards issued by the IASB and CPC and standards issued but not yet effective are consistent with those adopted and disclosed in note 5 to the financial statements for the year ended December 31, 2015 disclosed on July 27, 2016 and therefore should be read in conjunction with those annual financial statements.

6.      Significant accounting judgments, estimates and assumptions

Judgments, estimates and assumptions

 

The preparation of the Company’s individual and consolidated interim financial information requires Management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the reporting period; however, uncertainties about these assumptions and estimates may result in outcomes that require adjustments to the carrying amount of the affected asset or liability in future periods.

 

The significant assumptions and estimates for interim financial information for the six-month period ended June 30, 2016 were the same as those adopted in the individual and consolidated financial statements for the year ended December 31, 2015 dated July 27, 2016 and therefore should be read in conjunction.

7.      Cash and cash equivalents

The detailed information on cash and cash equivalents was presented in the annual financial statements for 2015, in note 7.

   

Parent Company

 

Consolidated

 

Rate

6.30.2016

12.31.2015

 

6.30.2016

12.31.2015

             

Cash and banks – Brazil

 

78

171

 

178

409

Cash and banks - Abroad

(*)

41

-

 

127

131

Financial investments - Brazil

(**)

928

2,076

 

3,407

10,446

Financial investments - Abroad

1%p.a

-

-

 

4

29

   

1,047

2,247

 

3,716

11,015

 

(*)From the total of cash and banks of R$115, R$65, is deposited in United States of America in american dollars.The other part and financial investments – abroad, in euros, are from the companies of e-commerce segment, located abroad.

(**) Financial investments as at June 30, 2016 refer substantially to repurchase agreements, paid a weighted average rate equivalent to 100.74% of the Interbank Deposit Certificate (“CDI”) and redeemable in terms of less than 90 days as of investment date.

 

 

51

 


 
 
 

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Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

8.      Trade receivables

The detailed information on trade receivables was presented in the annual financial statements for 2015, in note 8.

 

Parent Company

 

Consolidated

 

6.30.2016

12.31.2015

 

6.30.2016

12.31.2015

           

Credit card companies

598

94

 

1,982

664

Sales vouchers

73

80

 

230

189

Consumer finance - CDCI

-

-

 

1,806

1,877

Trade receivable from cash and carry customers

-

-

 

300

355

Private label credit card

22

35

 

22

35

Receivables from related parties (note 12.2)

23

59

 

31

66

Estimated loss on doubtful accounts (note 8.1)

(1)

-

 

(357)

(379)

Receivables from suppliers

53

119

 

87

164

Extended warranties

-

-

 

172

211

Other trade receivables

-

-

 

37

28

Current

768

387

 

4,310

3,210

           

Credit card companies

-

-

 

15

-

Consumer finance – CDCI

-

-

 

119

111

Estimated losses on doubtful accounts (note 8.1)

-

-

 

(15)

(13)

Noncurrent

-

-

 

119

98

 

768

387

 

4,429

3,308

 

8.1.   Estimated losses on doubtful accounts

 

Parent Company

 

Consolidated

 

6.30.2016

6.30.2015

 

6.30.2016

6.30.2015

(Restated)

           

At the beginning of the period

(2)

-

 

(394)

(354)

Loss/reversal in the period

1

-

 

(238)

(258)

Write-off of receivables

-

-

 

246

268

Exchange rate changes

-

-

 

14

(7)

At the end of the period

(1)

-

 

(372)

(351)

           

Current

(1)

-

 

(357)

(342)

Noncurrent

-

-

 

(15)

(9)

Below is the aging list of consolidated gross receivables, by maturity period:

     

Past-due receivables - Consolidated

 

Total

Due

<30 days

30-60 days

61-90 days

>90 days

             

6.30.2016

4,801

4,319

193

104

72

113

12.31.2015

3,700

3,252

133

82

52

181

 

52

 


 
 
 

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Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

9.       Other receivables

The detailed information on other receivables was presented in the annual financial statements for 2015, in note 9.

 

 

Parent Company

 

Consolidated

 

6.30.2016

12.31.2015

 

6.30.2016

12.31.2015

         

 

Receivables from sale of fixed assets

4

20

 

22

38

Supplier receivables

-

-

 

80

21

Rental advances

9

11

 

9

11

Receivables from Audax

4

7

 

11

13

Amounts to be reimbursed

38

37

 

70

115

Rental receivable

75

68

 

76

86

Receivable from Paes Mendonça

-

-

 

532

532

Receivable from sale of companies

61

52

 

107

105

Other

10

5

 

70

79

 

201

200

 

977

1,000

           

Current

129

133

 

345

375

Noncurrent

72

67

 

632

625

 

Accounts receivable from Paes Mendonça are related to amounts deriving from the payment of third-party liabilities by the subsidiaries, Novasoc and Sendas.Pursuant to contractual provisions, these accounts receivable are guaranteed by commercial lease rights (“Commercial rights”) of certain stores currently operated by the Company, Novasoc, Sendas and Xantocarpa. The maturity of the accounts receivable is linked to the lease agreements, which is currently under the tacit renewal under the same conditions previously agreed and were maintained in noncurrent assets due to the possibility of converting them into commercial rights of leased stores.

10.    Inventories

The detailed information on inventories was presented in the annual financial statements for 2015, in note 10.

 

Parent Company

 

Consolidated

 

6.30.2016

12.31.2015

 

6.30.2016

12.31.2015

 

         

Stores

1,879

1,703

 

4,342

4,323

Distribution centers

1,199

1,139

 

4,657

4,627

Real estate inventories under construction (a)

-

-

 

93

165

Estimated losses on obsolescence and breakage (note 10.1)

(31)

(14)

 

(149)

(150)

 

3,047

2,828

 

8,943

8,965

(a)   The Company delivered apartment units of projects Carpe Diem and Thera with net income of R$3. In the second semester of 2016, new units will be delivered.

10.1.    Estimated losses on obsolescence and breakage

 

Parent Company

 

Consolidated

 

6.30.2016

6.30.2015

 

6.30.2016

6.30.2015

(Restated)

           

At the beginning of the period

(14)

(10)

 

(149)

(91)

Additions

(33)

(3)

 

(82)

(30)

Write-offs / reversal

16

5

 

81

40

Exchange rate changes

-

-

 

1

-

At the end of the period

(31)

(8)

 

(149)

(81)

 

 

53

 


 
 
 

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Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

11.    Recoverable taxes

The detailed information on recoverable taxes was presented in the annual financial statements for 2015, in note 11.

 

 

Parent Company

 

Consolidated

 

6.30.2016

12.31.2015

 

6.30.2016

12.31.2015

Current

         

State value-added tax on sales and services – ICMS (note 11.1)

 

95

 

78

 

 

487

 

481

Social Integration Program/Contribution for Social Security Financing-PIS/COFINS

 

317

 

224

 

 

748

 

372

Income tax on Financial investments

15

22

 

20

32

Income tax and Social Contribution

46

15

 

65

34

Social Security Contribution - INSS

16

17

 

23

21

Value-Added Tax - France

-

-

 

105

65

Other

2

1

 

99

75

Total current

491

357

 

1,547

1,080

           

Noncurrent

         

ICMS (note 11.1)

379

412

 

2,254

2,256

PIS/COFINS

-

-

 

29

5

Social Security Contribution- INSS

140

122

 

190

206

Total noncurrent

519

534

 

2,473

2,467

Total

1,010

891

 

4,020

3,547

 

The Company takes extemporaneous credits of taxes, every time legal, documentary and factual understanding of such credits are group to allow their recognition, including the estimation of realization.Such credits are recognized as a reduction of cost of goods sold. In 2016, there was an amount related to the extemporaneous PIS/COFINS credits related to inputs and costs inherent to the activity of the Company in the amount of R$640, recorded in the Company and in the subsidiaries Via Varejo and Sendas. The elements supporting the record and utilization of such credits were obtained during the first semester of 2016.

11.1.ICMS is expected to be realized as follows:

 

In

Parent Company

Consolidated

Up to one year (*)

95

487

2017

123

368

2018

81

417

2019

40

386

2020

39

374

2021

37

619

After 2022

59

90

 

474

2,741

 

For the ICMS tax credits, management, based on technical feasibility studies, based on growth projections and related tax payments in the normal course of the operations, understand be viable the future compensation. The studies mentioned are prepared periodically based on information extracted from Strategic Planning report, previously approved by the Board of Directors of the Company. For the accounting information as of June 30, 2016, management has monitoring controls over the progress of the plan annually established, revaluating and including eventual new elements that contribute to the realization of the expected balance.

54

 


 
 
 

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Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

12.  Related parties

12.1.Management and Board of Directors compensation

The expenses related to management compensation (officers appointed pursuant to the Bylaws including members of the Board of Directors and the related support committees) and Fiscal Council recorded in the Company’s Statement of Profit and Loss for the period ended June 30, were as follows:

 

Base salary

 

Variable compensation

Stock option plan

Total

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

Board of directors (*)

2

2

 

-

-

 

-

-

 

2

2

Executive officers

11

13

 

16

12

 

4

2

 

31

27

 

13

15

 

16

12

 

4

2

 

33

29

 

 (*) The compensation of the Board of Directors advisory committees (Human Resources and Compensation, Audit, Finance, Sustainable Development and Corporate Governance) is included in this line.

 

 

 

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Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

12.    Related parties – Continued

12.2.Balances and transactions with related parties.

The detailed information on related parties was presented in the annual financial statements for 2015, in note 12.

                        

 

Parent company

 

Balances

 

Transactions

 

Trade receivables

 

Other assets

 

Trade payables

 

Other liabilities

 

Sales

 

Purchases

 

Revenues
(expenses)

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

Controlling shareholders

                                       

Casino

-

-

 

-

-

 

2

3

 

18

5

 

-

-

 

-

-

 

(55)

(45)

Euris Societé par Actions Simplifieé

-

-

 

-

-

 

-

-

 

1

3

 

-

-

 

-

-

 

(2)

(3)

Subsidiaries

                                       

Novasoc Comercial

-

-

 

193

382

 

-

-

 

-

-

 

-

-

 

-

-

 

1

1

Sé Supermecados

-

-

 

-

-

 

-

-

 

-

-

 

-

239

 

-

4

 

-

11

Sendas Assaí (a)

1

56

 

9

612

 

-

46

 

8

-

 

104

174

 

89

122

 

38

54

Via Varejo

22

3

 

-

-

 

-

2

 

220

146

 

-

-

 

-

-

 

(70)

(57)

VVLOG Logística

-

-

 

-

-

 

-

-

 

3

1

 

-

-

 

-

-

 

(1)

-

Cnova Comércio Eletrônico

-

-

 

68

22

 

-

-

 

-

-

 

-

-

 

-

-

 

36

-

Nova Pontocom

-

-

 

-

-

 

-

-

 

-

-

 

-

-

 

-

-

 

-

17

Xantocarpa

-

-

 

22

15

 

1

1

 

-

-

 

-

-

 

-

-

 

-

-

GPA M&P

-

-

 

-

-

 

-

-

 

2

1

 

-

-

 

-

-

 

-

-

GPA Logistica

-

-

 

20

23

 

14

20

 

-

-

 

-

-

 

-

-

 

-

-

Posto Duque - Salim Maluf

-

-

 

-

6

 

-

-

 

-

-

 

-

-

 

-

-

 

-

-

Posto GPA - Santo André

-

-

 

-

2

 

-

-

 

-

-

 

-

-

 

-

-

 

-

-

Posto GPA - Império

-

-

 

-

4

 

-

-

 

-

-

 

-

-

 

-

-

 

-

-

Posto Duque - Lapa

-

-

 

-

2

 

-

-

 

-

-

 

-

-

 

-

-

 

-

-

Posto GPA - Ciara

-

-

 

-

2

 

-

-

 

-

-

 

-

-

 

-

-

 

-

-

Bellamar

-

-

 

-

-

 

-

-

 

108

108

 

-

-

 

-

-

 

-

-

Others

-

-

 

-

-

 

-

-

 

-

2

 

-

-

 

-

-

 

-

-

Subtotal

23

59

 

312

1,070

 

17

72

 

360

266

 

104

413

 

89

126

 

(53)

(22)

(a)   The part of Sendas was incorporated in the CBD, eliminating the balance, according to note 1.3.1.

 

56

 


 
 
 

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Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

12.    Related parties – Continued

12.2.Balances and transactions with related parties - Continued

 

 

Parent company

 

 

Balances

 

Transactions

 

 

Trade receivables

 

Other assets

 

Trade payables

 

Other liabilities

 

Sales

 

Purchases

 

Revenues
(expenses)

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

Associates

                                       

FIC

-

-

 

8

-

 

6

7

 

-

1

 

-

-

 

-

-

 

23

20

Other related parties

                                     

-

Management of Nova Pontocom

-

-

 

-

-

 

-

-

 

-

-

 

-

-

 

-

-

 

-

2

Instituto Grupo Pão de Açúcar

-

-

 

-

-

 

-

-

 

-

-

 

-

-

 

-

-

 

-

(4)

Greenyellow do Brasil Energia e Serviços Ltda ("Greenyellow")

-

-

 

-

-

 

-

-

 

120

-

 

-

-

 

-

-

 

(9)

(2)

Others

-

-

 

1

6

 

-

1

 

1

1

 

-

-

 

-

-

 

(2)

(2)

Subtotal

-

-

 

9

6

 

6

8

 

121

2

 

-

-

 

-

-

 

12

14

Total

23

59

 

321

1,076

 

23

80

 

481

268

 

104

413

 

89

126

 

(41)

(8)

                                           

 

 

 

 

 

 

 

57

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

12.    Related parties – Continued

12.2.   Balances and transactions with related parties – Continued

 

 

Consolidated

 

Balances

 

Transactions

 

Trade receivables

 

Other assets

 

Trade payables

 

Other liabilities

 

Revenues
(expenses)

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

Controlling shareholder

                           

Casino

10

8

 

10

-

 

27

23

 

18

86

 

(118)

(59)

Distribution Casino France

15

32

 

-

-

 

33

28

 

-

-

 

(57)

-

Wilkes Participações

-

-

 

-

-

 

-

-

 

-

-

 

-

(1)

Euris Societé par Actions Simplifieé

-

-

 

-

-

 

-

-

 

1

2

 

(3)

-

Almacenes Exito S.A. (Exito)

-

2

 

3

-

 

-

24

 

-

-

 

-

(32)

Casino subsidiaries (note 12.3)

                           

Casino Finance International S.A. (Polca Empréstimos) (i)

-

-

 

-

-

 

-

-

 

1,107

364

 

(2)

(1)

C´est chez vous Societé en Nom Collectif

1

7

 

-

-

 

41

37

 

-

-

 

(34)

(25)

EMC Distribution Societé par Actions Simplifiée

-

-

 

-

-

 

52

43

 

-

-

 

-

(87)

Big C Supercenter S.A.

-

2

 

-

-

 

-

2

 

-

39

 

(2)

(4)

Easydis Societé par Actions Simplifiée

-

-

 

-

-

 

94

58

 

-

-

 

(95)

(78)

Franprix-Leader Price Holding AS

5

12

 

-

-

 

3

6

 

-

-

-

19

-

Others

-

3

 

4

-

 

1

4

 

-

69

 

-

71

Associates

                           

FIC

-

-

 

19

10

 

6

9

 

-

3

 

11

12

Other related parties

                           

Casas Bahia Comercial Ltda

-

-

 

305

291

 

-

-

 

-

-

 

(133)

(129)

Management Nova Pontocom

-

-

 

-

-

 

-

-

 

-

-

 

-

2

Instituto Grupo Pão de Açúcar

-

-

 

-

-

 

-

-

 

-

-

 

-

(4)

Viaw Consultoria Ltda

-

-

 

-

-

 

-

-

 

-

-

 

(1)

(2)

Greenyellow do Brasil Energia e Serviços Ltda.

-

-

 

-

-

 

-

-

 

120

-

 

(9)

-

Others

-

-

 

1

8

 

1

1

 

1

-

 

(1)

-

Total

31

66

 

342

309

 

258

235

 

1,247

563

 

(425)

(337)

12.3 Balances with Casino subsidiaries

(i)   Polca: Casino Group entity that has a cash centralization agreement with Cdiscount Group entities. This balance yields EONIA (Euro Overnight Index Average), plus 0.5% per annum.     

58

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

13.    Investments

The detailed information on investments was presented in the annual financial statements for 2015, in note 13.

13.1.Breakdown of investments

 

Parent Company

 

Sendas

Novasoc

Via Varejo

(Restated)

NCB

(*)

Luxco

(Restated)

Barcelona

Bellamar

GPA M&P

Others

Total

(***)

Balances at 12.31.2015

1,349

174

1,844

501

(276)

770

367

120

24

4,873

Share of profit(loss) of subsidiaries and associates

50

(4)

(34)

(3)

(177)

29

44

8

(3)

(90)

Dividends

-

-

-

-

-

-

-

(10)

-

(10)

Spinoff (note 1.3.1, (iii))

(2)

-

-

-

-

-

-

-

-

(2)

Merger(note 1.3.1, (ii))

800

-

-

-

-

(800)

-

-

-

-

Stock option

-

-

2

-

-

1

-

-

1

4

Write-off (note 1.3.2)

-

-

-

-

-

-

-

-

7

7

Other transactions (**)

-

-

15

-

56

-

-

-

-

71

Balances at 6.30.2016

2,197

170

1,827

498

(397)

-

411

118

29

4,853

 

 

Parent Company

 

Sendas

Novasoc

Via Varejo

Nova Pontocom

(**)

NCB

(*)

Luxco

Barcelona

Bellamar

GPA M&P

Others

Total

(***)

Balance at 12.31.2014 – restated

2,806

1,709

144

1,862

83

507

6

690

286

178

17

8,288

Share of profit(loss) of subsidiaries and associates – restated

11

69

-

108

(55)

(6)

(20)

22

45

11

3

188

Dividends

-

(416)

-

-

-

-

-

-

-

-

-

(416)

Stock option

-

-

-

2

-

-

-

1

-

-

-

3

Other transactions (**) - restated

-

-

-

(3)

(5)

-

(3)

-

-

-

-

(11)

Balances at 6.30.2015 - restated

2,817

1,362

144

1,969

23

501

(17)

713

331

189

20

8,052

 

(*)    In NCB case, the investment amount refers to the effects of the fair value measurements of the business combination. For Via Varejo, the fair value effects were considered together with the accounting investment held in this subsidiary.

(**) Includes the effects of the exchange rate changes on translation of the foreign subsidiaries’ financial information and other comprehensive income in the case of Luxco.

(***) Includes the effect of loss on investment in Luxco, in the amount of R$397 (R$276 on December 31, 2015). The negative shareholders equity balance of the subsidiary is recorded as liabilities in the balance sheet.

59

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

13.    Investments – Continued

13.1.Breakdown of investments – Continued

 

Consolidated

 

FIC

BINV

Outros

Total

Balances at 12.31.2015

361

20

1

382

Share of profit(loss) of subsidiaries and associates

60

1

-

61

Balances at 6.30.2016

421

21

1

443

         
 

FIC

BINV

Outros

Total

Balances at 12.31.2014

373

21

7

401

Share of profit(loss) of subsidiaries and associates

63

(1)

-

62

Write-off

-

-

(6)

(6)

Balances at 6.30.2015

436

20

1

457

 

 

 

 

 

14.    Property and equipment

 

Parent Company

 

Balance at 12.31.2015

Additions

Depreciation

Write-offs

Merger(*)

Transfers

Balance at 6.30.2016

Land

1,272

-

-

-

-

1

1,273

Buildings

1,799

2

(28)

-

18

(104)

1,687

Leasehold improvements

1,858

12

(78)

(9)

301

156

2,240

Machinery and equipment

892

72

(75)

(16)

150

-

1,023

Facilities

179

5

(10)

(1)

37

1

211

Furniture and fixtures

375

19

(27)

(2)

52

-

417

Vehicles

3

-

(1)

(1)

1

-

2

Construction in progress

73

207

2

(7)

9

(54)

230

Other

50

4

(6)

(2)

6

(4)

48

Total

6,501

321

(223)

(38)

574

(4)

7,131

               

Finance lease

             

IT equipment

7

-

(2)

-

-

1

6

Buildings

17

-

-

-

-

1

18

 

24

-

(2)

-

-

2

24

Total

6,525

321

(225)

(38)

574

(2)

7,155

(*) See note 1.3.1 (iii)

 

 

 

 

 

 

 

 

60

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

14.    Property and equipment – Continued

 

Parent Company

 

Balance at 12.31.2014

Additions

Depreciation

Write-offs

Transfers

Balance at 6.30.2015

Land

1,213

7

-

(7)

6

1,219

Buildings

1,853

2

(30)

-

-

1,825

Leasehold improvements

1,635

5

(64)

(6)

127

1,697

Machinery and equipment

806

116

(73)

(7)

(1)

841

Facilities

161

6

(9)

(1)

3

160

Furniture and fixtures

312

48

(23)

(1)

-

336

Vehicles

17

4

(2)

(2)

-

17

Construction in progress

65

136

-

-

(134)

67

Other

38

14

(8)

-

(4)

40

Total

6,100

338

(209)

(24)

(3)

6,202

             

Finance lease

           

IT equipment

7

5

(2)

-

-

10

Buildings

18

-

-

-

-

18

 

25

5

(2)

-

-

28

Total

6,125

343

(211)

(24)

(3)

6,230

 

 

 

Parent Company

 

Balance at 6.30.2016

 

Balance at 12.31.2015

 

Cost

Accumulated depreciation

Net

 

Cost

Accumulated depreciation

Net

Land

1,273

-

1,273

 

1,272

-

1,272

Buildings

2,626

(939)

1,687

 

2,759

(960)

1,799

Leasehold improvements

3,627

(1,387)

2,240

 

3,208

(1,350)

1,858

Machinery and equipment

2,251

(1,228)

1,023

 

2,005

(1,113)

892

Facilities

472

(261)

211

 

410

(231)

179

Furniture and fixtures

954

(537)

417

 

823

(448)

375

Vehicles

7

(5)

2

 

10

(7)

3

Construction in progress

230

-

230

 

73

-

73

Other

123

(75)

48

 

131

(81)

50

 

11,563

(4,432)

7,131

 

10,691

(4,190)

6,501

               

Finance lease

             

IT equipment

39

(33)

6

 

38

(31)

7

Buildings

41

(23)

18

 

34

(17)

17

 

80

(56)

24

 

72

(48)

24

Total

11,643

(4,488)

7,155

 

10,763

(4,238)

6,525

 

 

 

 

 

 

 

 

 

 

 

 

61

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

14.    Property and equipment - Continued

 

Consolidated

 

Balance at 12.31.2015

Additions

Depreciation

Deconsolidation (*)

Write-offs

Transfers

Exchange variation

Balance at 6.30.2016

Land

1,464

-

-

-

-

14

-

1,478

Buildings

2,023

9

(32)

-

(1)

(107)

-

1,892

Leasehold improvements

3,675

77

(133)

(3)

(27)

197

-

3,786

Machinery and equipment

1,676

133

(142)

(1)

(18)

11

(1)

1,658

Facilities

422

22

(24)

(1)

(4)

6

-

421

Furniture and fixtures

701

44

(48)

-

(3)

4

-

698

Vehicles

75

-

(4)

-

(7)

-

-

64

Construction in progress

172

337

-

-

(9)

(117)

(1)

382

Other

97

15

(15)

(2)

(3)

(1)

-

91

Total

10,305

637

(398)

(7)

(72)

7

(2)

10,470

                 

Finance lease

               

Equipment

13

-

(1)

-

-

-

-

12

IT equipment

31

1

(10)

-

-

-

-

22

Facilities

1

-

-

-

-

-

-

1

Furniture and fixtures

6

-

-

-

-

-

-

6

Buildings

21

-

-

-

-

-

-

21

 

72

1

(11)

-

-

-

-

62

Total

10,377

638

(409)

(7)

(72)

7

(2)

10,532

 (*) See note 1.3.

 

14.    Property and equipment

 

 

Consolidated

 

Balance at 12.31.2014

Additions

Depreciation

Write-offs

Transfers

Exchange rate changes

Balance at 06.30.2015

Land

1,449

7

-

(7)

6

-

1,455

Buildings

2,047

15

(34)

-

-

-

2,028

Leasehold improvements

3,182

117

(114)

(8)

218

-

3,395

Machinery and equipment

1,605

203

(150)

(20)

14

-

1,652

Facilities

381

26

(21)

(1)

10

1

396

Furniture and fixtures

601

85

(42)

(6)

9

1

648

Vehicles

121

6

(6)

(7)

1

-

115

Construction in progress

166

251

-

(2)

(249)

-

166

Other

73

28

(14)

-

(5)

-

82

Total

9,625

738

(381)

(51)

4

2

9,937

               

Finance lease

             

Equipment

16

-

(2)

-

-

-

14

IT equipment

26

24

(9)

-

-

-

41

Facilities

1

-

-

-

-

-

1

Furniture and fixtures

7

-

-

-

-

-

7

Vehicles

1

-

-

-

-

-

1

Buildings

23

-

(1)

-

-

-

22

 

74

24

(12)

-

-

-

86

Total

9,699

762

(393)

(51)

4

2

10,023

 
 

62

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

14.    Property and equipment – Continued

 

Balance at 6.30.2016

 

Balance at 12.31.2015

 

Cost

Accumulated depreciation

Net

 

Cost

Accumulated depreciation

Net

Land

1,478

-

1,478

 

1,464

-

1,464

Buildings

2,883

(991)

1,892

 

3,036

(1,013)

2,023

Leasehold improvements

5,519

(1,733)

3,786

 

5,548

(1,873)

3,675

Machinery and equipment

3,410

(1,752)

1,658

 

3,454

(1,778)

1,676

Facilities

799

(378)

421

 

799

(377)

422

Furniture and fixtures

1,363

(665)

698

 

1,349

(648)

701

Vehicles

98

(34)

64

 

111

(36)

75

Construction in progress

382

-

382

 

172

-

172

Other

203

(112)

91

 

227

(130)

97

 

16,135

(5,665)

10,470

 

16,160

(5,855)

10,305

               

Finance lease

             

Equipment

36

(24)

12

 

36

(23)

13

IT equipment

200

(178)

22

 

199

(168)

31

Facilities

2

(1)

1

 

2

(1)

1

Furniture and fixtures

16

(10)

6

 

15

(9)

6

Buildings

44

(23)

21

 

43

(22)

21

 

298

(236)

62

 

295

(223)

72

Total

16,433

(5,901)

10,532

 

16,455

(6,078)

10,377

14.1.   Capitalized borrowing costs

The consolidated borrowing costs for the six-month period ended June 30, 2016 were R$6 (R$9 for the six-month period ended June 30, 2015). The rate used to determine the borrowing costs eligible for capitalization was 104.50% of the CDI (104.72 % of the CDI for the period ended June 30, 2015), corresponding to the effective interest rate on the Company’s borrowings.

14.2.   Additions to property and equipment

 

Parent Company

Consolidated

 

6.30.2016

6.30.2015

6.30.2016

6.30.2015

       

Restated

Additions

321

343

638

762

Finance lease

-

(14)

(1)

(24)

Capitalized interest

(3)

(5)

(6)

(9)

Property and equipment financing - Additions

(311)

(297)

(527)

(367)

Property and equipment financing - Payments

230

317

395

393

Total

237

344

499

755

 

 

 

 

 

 

 

 

63

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

14.    Property and equipment – Continued

14.3.   Other information

As at June 30, 2016, the Company and its subsidiaries recorded in cost of goods sold and services sold the amount of R$23 (R$23 as at June 30, 2015) in parent company and R$61 (R$68 as at June 30, 2015) in consolidated referring to the depreciation of its fleet of trucks, machinery, buildings and facilities related to the distribution centers.

The Company monitored the plan for impairment test performed on December 31, 2015 and despite of not reaching the plan, the analysis were renewed and there was noneed of recording a provision for impairment.

15.    Intangible assets

The detailed information on intangible assets was presented in the annual financial statements for 2015, in note 15.

 

 

Parent company

 
 

Balance at 12.31.2015

Additions

Amortization

Balance at 6.30.2016

Goodwill - home appliances

179

-

-

179

Goodwill - retail

503

-

-

503

Commercial rigths - retail

46

-

-

46

Software and implementation

583

44

(52)

575

Software -capital leasing

9

79

(4)

84

Total

1,320

123

(56)

1,387

 

 

Parent company

 

Balance at 12.31.2014

Additions

Amortization

Balance at 6.30.2015

Goodwill - home appliances

179

-

-

179

Goodwill - retail

394

-

-

394

Commercial rigths - retail

43

-

-

43

Software and implementation

579

59

(49)

589

Software - capital leasing

-

9

-

9

Total

1,195

68

(49)

1,214

 

 

 

Balance at 6.30.2016

 

Balance at 12.31.2015

 

Cost

Accumulated
amortization

Net

 

Cost

Accumulated
amortization

Net

               
 

179

-

179

 

179

-

179

Goodwill - home appliances

1,361

(858)

503

 

1,361

(858)

503

Goodwill - retail

46

-

46

 

46

-

46

Commercial rights - retail

1,091

(516)

575

 

1,046

(463)

583

Software and implementation

88

(4)

84

 

9

-

9

Software - capital leasing

2,765

(1,378)

1,387

 

2,641

(1,321)

1,320

 

64

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

15.    Intangible assets – Continued

 

Consolidated

 

Balance at 12.31.2015

Additions

Amortization

Write-Off

Transfers

Corporate restructuring (*)

Exchange rate changes

Balance at 6.30.2016

Goodwill - cash and carry

362

-

-

-

-

-

-

362

Goodwill - home appliances

920

-

-

-

-

-

-

920

Goodwill - retail

747

-

-

-

-

-

-

747

Goodwill - e-commerce

243

-

-

-

-

-

(41)

202

Brand - cash and carry

39

-

-

-

-

-

-

39

Brand - home appliances

2,061

-

-

-

-

-

-

2,061

Brand - e-commerce

21

-

-

-

-

(5)

(3)

13

Commercial rights - home appliances

570

-

(2)

-

-

-

-

568

Commercial rights - retail

46

-

-

-

-

-

-

46

Commercial rights - cash and carry

34

-

-

-

-

-

-

34

Lease agreement – under advantageous condition

70

-

(7)

-

-

-

-

63

Contractual rights

148

-

(15)

-

-

-

-

133

Software

1,127

119

(119)

(43)

46

(22)

(34)

1,074

Softwares capital leasing

89

79

(6)

-

-

-

-

162

Others

66

41

-

(2)

(48)

1

(10)

48

Total

6,543

239

(149)

(45)

(2)

(26)

(88)

6,472

 (*) See note 1.3.3.

 

Consolidated

 

Balance at 12.31.2014

Additions

Amortization

Write-off

Transfers

Exchange rate changes

Balance at 6.30.2015

 

 

(Restated)

(Restated)

 

 

 

(Restated)

Goodwill - cash and carry

362

-

-

-

-

-

362

Goodwill - home appliances

920

-

-

-

-

-

920

Goodwill - retail

747

-

-

-

-

-

747

Goodwill - e-commerce

254

-

-

-

(3)

20

271

Brand - cash and carry

39

-

-

-

-

-

39

Brand - home appliances

2,061

-

-

-

-

-

2,061

Brand - e-commerce

30

-

-

-

1

2

33

Commercial rights - home appliances

574

-

(3)

-

-

-

571

Commercial rights - retail

46

-

-

-

-

-

46

Commercial rights - cash and carry

34

-

-

-

-

-

34

Costumer relationship - home appliances

2

-

-

-

-

-

2

Lease agreement – under advantageous condition - NCB

97

-

(12)

-

(1)

-

84

Contractual Rights

179

-

(16)

-

-

-

163

Software - restated

965

147

(105)

(21)

31

13

1,030

Software CL

91

10

(5)

-

-

-

96

Other

47

61

(1)

-

(34)

5

78

Total

6,448

218

(142)

(21)

(6)

40

6,537

 

 

.

65

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

15.    Intangible assets – Continued

 

Balance at 6.30.2016

 

Balance at 12.31.2015

 

Cost

Accumulated
amortization

Net

 

Cost

Accumulated
amortization

Net

Goodwill - cash and carry (note 15.1)

371

(9)

362

 

371

(9)

362

Goodwill - home appliances (note 15.1)

920

-

920

 

920

-

920

Goodwill - retail (note 15.1)

1,848

(1,101)

747

 

1,848

(1,101)

747

Goodwill - e-commerce (note 15.1)

202

-

202

 

243

-

243

Brand - cash and carry (note 15.2)

39

-

39

 

39

-

39

Brand - home appliances (note 15.2)

2,061

-

2,061

 

2,061

-

2,061

Brand - e-commerce (note 15.2)

14

(1)

13

 

21

-

21

Commercial rights - home appliances

633

(65)

568

 

637

(67)

570

Commercial rights - retail

46

-

46

 

46

-

46

Commercial rights - cash and carry

34

-

34

 

34

-

34

Costumer relationship - home appliances

34

(34)

-

 

35

(35)

-

Lease agreement under advantageous condition - NCB

293

(230)

63

 

290

(220)

70

Contractual Rights

187

(54)

133

 

187

(39)

148

Software

1,941

(867)

1,074

 

1,932

(805)

1,127

Software capital leasing

200

(38)

162

 

122

(33)

89

Other

61

(13)

48

 

81

(15)

66

Total

8,884

(2,412)

6,472

 

8,867

(2,324)

6,543

15.1.Impairment testing of goodwill and intangible assets

Goodwill and intangible assets were tested for impairment as at December 31, 2015 according to the method described in note 4 - Significant accounting policies, in the financial statements for the year ended December 31, 2015 released on July 27, 2016.

 

The Company monitored the plan for impairment test performed on December 31, 2015 and there were no significant discrepancies indicating loss or need to perform a new impairment test on June 30, 2016.

15.2.Additions to intangible assets

 

Parent Company

Consolidated

 

6.30.2016

6.30.2015

6.30.2016

6.30.2015

   

Restated

 

Restated

Additions

123

68

239

218

Finance lease - software

(79)

-

(79)

(10)

Others accounts payable

-

-

-

11

Intangible assets financing - Additions

-

(3)

-

(3)

Intangible assets financing - Payments

2

6

2

6

Total

46

71

162

222

16.    Trade payables

The detailed information on trade payables was presented in the annual financial statements for 2015, in note 16.

 

Parent Company

 

Consolidated

 

6.30.2016

12.31.2015

 

6.30.2016

12.31.2015

Product suppliers

3,191

4,446

 

9,693

15,590

Service suppliers

191

142

 

1,236

772

Rebates

(382)

(485)

 

(661)

(854)

 

3,000

4,103

 

10,268

15,508

 

66

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

17.    Borrowings and financing

The detailed information on borrowings and financing was presented in the annual financial statements for 2015, in note 17.

17.1.Debt breakdown

   

Parent Company

Consolidated

 

Weighted average rate

6.30.2016

12.31.2015

6.30.2016

12.31.2015

           

Current

         

Debentures and promissory note

         

Debentures, net (note 17.4)

 

38

38

38

38

Promissory note, net (note 17.4)

 

537

-

537

-

   

575

38

575

38

Borrowings and financing

         

Local currency

         

BNDES

TJLP + 3.60 p.a

41

82

41

82

BNDES

3.57% p.a

5

9

18

16

IBM

CDI - 0.71% p.a

-

-

29

27

Working capital

108.43% do CDI

812

111

1,056

111

Working capital

15.72% p.a.

-

-

2,355

2,308

Working capital

TR + 9.80% p.a.

2

1

2

5

Sale of receivables

109% do CDI

-

-

13

4

Finance lease (note 23)

 

37

30

52

44

Swap contracts (note 17.7)

101.40% do CDI

1

-

-

-

Borrowing cost

 

(1)

(1)

(2)

(2)

   

897

232

3,564

2,595

Foreign currency

         

Working capital (i)

USD + 2.45% p.a.

1,086

857

1,981

1,656

Swap contracts (note 17.7)

104.92% do CDI

(62)

(299)

(6)

(475)

   

1,024

558

1,975

1,181

Total current

 

2,496

828

6,114

3,814

 

   

Parent Company

Consolidated

Noncurrent

Weighted average rate

6.30.2016

12.31.2015

6.30.2016

12.31.2015

           

Debentures and promissory note

         

Debentures, net (note 17.4)

 

898

897

898

897

 

 

 

 

 

 

Borrowings and financing

         

Local currency

         

BNDES

TJLP + 3.60 p.a

-

-

-

-

BNDES

3.35% p.a.

8

9

45

51

IBM

CDI - 0.71% p.a.

-

-

58

68

Working capital

15.72% p.a.

-

-

193

167

Working capital

104.93% do CDI

247

980

247

1,131

Working capital

TR + 9.80% p.a.

20

20

126

126

Finance lease (note 23)

 

173

117

266

220

Swap contracts (note 17.7)

101.40% do CDI

(1)

-

(2)

2

Borrowing cost

 

(2)

(3)

(6)

(7)

   

445

1,123

927

1,758

Foreign currency

         

Working capital

USD + 2.28% p.a.

946

1,443

946

1,756

Swap contracts (note 17.7)

101.31% do CDI

123

(186)

123

(247)

   

1,069

1,257

1,069

1,509

Total noncurrent

 

2,412

3,277

2,894

4,164

Total loans and borrowings

 

4,908

4,105

9,008

7,978

 

 

 

67

 


 
 
 

(FREE  TRANSLATION  INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE)

 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

17.    Borrowings and financing - continued

17.2.Changes in borrowings and financing

 

Parent Company

 

Consolidated

At December 31, 2015

4,105

 

7,978

Additions - working capital

899

 

3,531

Additions - finance lease

79

 

82

Accrued interest

205

 

420

Accrued swap

565

 

869

Mark-to-market

(24)

 

(33)

Monetary and exchange rate changes

(459)

 

(701)

Borrowing cost

2

 

1

Interest paid

(121)

 

(300)

Payments

(339)

 

(2,816)

Swap paid

(9)

 

(23)

Merger

5

 

-

At June 30, 2016

4,908

 

9,008

 

 

Parent Company

 

Consolidated

At December 31, 2014

5,526

 

9,728

Additions – working capital

215

 

3,134

Additions – finance lease

14

 

34

Accrued interest

278

 

497

Accrued swap

(118)

 

(137)

Mark-to-market

1

 

-

Monetary and exchange rate changes

164

 

200

Borrowing cost

3

 

1

Interest paid

(343)

 

(563)

Payments

(1,336)

 

(4,244)

Swap paid

(27)

 

(28)

At June 30, 2015

4,377

 

8,622

 

17.3.Maturity schedule of borrowings and financing recorded in noncurrent liabilities

Year

Parent Company

 

Consolidated

2017

1,464

 

1,685

2018

823

 

895

2019

48

 

97

After 2019

82

 

226

Subtotal

2,417

 

2,903

       

Borrowing costs

(5)

 

(9)

Total

2,412

 

2,894

 
 

68

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

17.    Borrowings and financing – Continued

17.4.Debentures and promissory note

       

Date

   

Parent Company

Consolidated

 

Type

Issue Amount

Outstandind debentures
and promissory note

Issue

Maturity

Annual financial charges

Unit price

6.30.2016

12.31.2015

6.30.2016

12.31.2015

Parent Company

                     

12th Issue – CBD

No preference

900,000

900,000

9/12/14

9/12/19

107.00% of CDI

1,007

939

939

939

939

1st issue - promissory note - CBD

No preference

500,000

10

1/8/16

7/6/16

1.49% p.a

50,000

537

-

537

-

                       

Borrowing cost

             

(3)

(4)

(3)

(4)

Parent Company/Consolidated - current and noncurrent

             

1,473

935

1,473

935

Current liabilities

             

575

38

575

38

Noncurrent liabilities

             

898

897

898

897

 

 

69

 


 
 

17.    Borrowings and financing – Continued

17.5.Borrowings in foreign currencies

On June 30, 2016 GPA had loans in foreign currencies (dollar and euro) to strengthen its working capital, maintain its cash strategy, lengthen its debt profile and make investments, being the last due date in October, 2018

17.6.     Guarantees

The Company signed promissory notes for some borrowings agreements.

17.7.     Swap contracts

The Company uses swap transactions for 100% of its borrowings denominated in US dollars and fixed interest rates, exchanging these obligations for Real linked to CDI (floating) interest rates. These contracts have a total debt term and protect the interest and the principal and are signed, with the same due dates and with same counterparty. The weighted average annual rate of CDI in 2016 was 14.09% (11.82% at June 30, 2015).

17.8.     Financial indexes

In connection with the debentures and part of the transactions in borrowings in foreign currencies, GPA is required to maintain certain debt financial covenants. These ratios are calculated based on consolidated financial statements of the Company prepared in accordance with accounting practices adopted in Brazil, in the respective issuing Company as follows: (i) net debt (debt minus cash and cash equivalents and trade accounts receivable) not greater than equity and (ii) consolidated net debt/EBITDA ratio lower than or equal to 3.25. At June 30, 2016, GPA complied with these ratios.

 

 

 

70

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

18.    Financial instruments

The detailed information on financial instruments was presented in the annual financial statements for 2015, in note 18.

 

The main financial instruments and their carrying amounts in the interim financial information, by category, are as follows:

 

 

Parent Company

Consolidated

 

Carrying amount

Carrying amount

 

6.30.2016

12.31.2015

6.30.2016

12.31.2015

Financial assets:

 

 

   

Loans and receivables (including cash)

       

Cash and cash equivalents

1,047

2,247

3,716

11,015

Trade receivables and other receivables

969

587

5,406

4,308

Related parties - assets (*)

321

1,076

342

309

Financial liabilities:

       

Other financial liabilities - amortized cost

       

Related parties -liabilities (*)

(481)

(268)

(1,247)

(563)

Trade payables

(3,000)

(4,103)

(10,268)

(15,508)

Financing for purchase of assets

(58)

(104)

(117)

(118)

Acquisition of non-controlling interest

-

-

(105)

(104)

Debentures

(1,473)

(935)

(1,473)

(935)

Borrowings and financing

(1,320)

(1,355)

(4,364)

(4,222)

Suppliers - structured program

-

-

(430)

(1,055)

Fair value through profit or loss

   

 

 

Loans and financing, including derivatives

(2,115)

(1,815)

(3,171)

(2,821)

Net exposure

(6,110)

(4,670)

(11,711)

(9,694)

 

 (*)    Transactions with related parties refer mainly to transactions between the Company and its

        subsidiaries and other related entities and were substantially accounted for in accordance with the

        prices, terms and conditions agreed between the parties.

The fair value of other financial instruments detailed in table above approximates the carrying amount based on the existing terms and conditions. The financial instruments measured at amortized cost, the related fair values of which differ from the carrying amounts, are disclosed in note 18.3.

 

71

 


 
 
 

18.    Financial instruments – Continued

18.1.       Considerations on risk factors that may affect the business of the Company and its subsidiaries:

(i)      Capital risk management

The main objective of the Company’s capital management is to ensure that the Company sustains its credit rating and a well-defined equity ratio, in order to support businesses and maximize shareholder value. The Company manages the capital structure and makes adjustments taking into account changes in the economic conditions.

There were no changes as to objectives, policies or processes during the period ended June 30, 2016.

 

Parent Company

 

Consolidated

 

6.30.2016

12.31.2015

 

6.30.2016

12.31.2015

Cash and cash equivalents

1,047

2,247

 

3,716

11,015

Suppliers – structured program(**)

-

-

 

(430)

(1,055)

Borrowings and financing

(4,908)

(4,105)

 

(9,008)

(7,978)

Other liabilities with related parties (note 12.2) (*)

-

-

 

(1,107)

(364)

(*) Represents loans of CDiscount with Casino Finance International S.A. (“Polca”).

(**)Suppliers – structured program refers to financial liabilities with suppliers which due dates were extended during six-month period ended June 30, 2016 and the year endend as of December 31, 2015. Due to characteristics of commercial negotiations between suppliers and the Company, these financial liabilities were included in programs with banks, utilizing Company’s credit lines, with implied financial cost of 109.8% of CDI (108.4% in December 31, 2015). The Company understands that this transaction has specific nature and classifies separately from the caption Suppliers – structured program.

(ii)     Liquidity risk management

The Company manages liquidity risk through the daily follow-up of cash flows, control of maturities of financial assets and liabilities, and a close relationship with the main financial institutions.

The table below summarizes the aging profile of the Company’s financial liabilities as at June 30, 2016.

18.1.1 Parent Company

 

Up to 1 Year

1 – 5 years

More than 5 years

Total

Borrowings and financing

2,042

1,301

18

3,361

Debentures and promissory note

669

1,138

-

1,807

Derivatives

125

196

(5)

316

Finance lease

53

189

153

395

Trade payables

3,000

-

-

3,000

Total

5,889

2,824

166

8,879

 

 

72

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

18.    Financial instruments – Continued

18.1.   Considerations on risk factors that may affect the business of the Company and its subsidiaries – Continued

 

 (ii)   Liquidity management risk – Continued

18.1.2 Consolidated

 

 

Up to 1 Year

1 – 5 years

More than 5 years

Total

Borrowings and financing

5,681

1,680

119

7,480

Debentures and promissory note

669

1,138

-

1,807

Derivatives

251

206

1

458

Finance lease

80

283

186

549

Trade payables

10,268

-

-

10,268

Suppliers -structured program

430

-

-

430

Acquisition of noncontrolling interest

82

23

-

105

Sale of receivables

13

-

-

13

Total

17,474

3,330

306

21,110

 

(iii)    Derivative financial instruments

 

 

 

Consolidated

 

 

Notional value

 

Fair value

 

 

6.30.2016

12.31.2015

 

6.30.2016

12.31.2015

Fair value hedge

 

 

 

 

 

 

Purpose of hedge (debt)

 

3,117

2,760

 

3,060

3,512

 

 

 

 

 

 

 

Long position (buy)

 

 

 

 

 

 

Prefixed rate

TR+9.80% p.a

130

131

 

132

131

US$ + fixed

2.45% p.a

2,767

2,629

 

2,760

3,427

EUR + fixed

1.60% p.a

220

-

 

182

-

 

 

3,117

2,760

 

3,074

3,558

Short position (sell)

 

 

 

 

 

 

 

103.63% p.a

(3,117)

(2,760)

 

(3,189)

(2,838)

Net hedge position

 

-

-

 

(115)

720

 

 

73

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

18.    Financial instruments – Continued

18.1.   Considerations on risk factors that may affect the business of the Company and its subsidiaries – Continued

(iii)   Derivative financial instruments - continued

 

Realized and unrealized gains and losses on these contracts during the six-month period ended June 30, 2016 are recorded in financial income (expenses), net and the balance receivable at fair value is R$115 (R$720 as at December 31, 2015), recorded in line item  “Borrowings and financing”.

The effects of the fair value hedge recorded in the Statement of Profit and Loss for the six-month period ended June 30, 2016 were a gain of R$8 (gain of R$32 as at June 30, 2015).

18.2.   Sensitivity analysis of financial instruments

The Company disclosed the net exposure of the derivatives financial instruments, corresponding financial instruments and certain financial instruments in the sensitivity analysis chart below, for each of the scenarios mentioned:

 

For the probable scenario, exchange rate weighted was R$3.47 on the due date, and the interest rate weighted was 13.70% per year. The sources used were the same as those of the annual financial statements for 2015.

 

 

 

74

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

18.    Financial instruments – Continued

18.2.   Sensitivity analysis of financial instruments - continued

(i)      Other financial instruments

 

     

Market projection

Operations

Risk (CDI increase)

Balance at 6.30.2016

Scenario I

 

Scenario II

 

Scenario III

   

 

 

 

 

 

 

Fair value hedge (fixed rate)

101.41% of CDI

(131)

(172)

 

(177)

 

(183)

Fair value hedge (exchange rate)

103.63% of CDI

(3,058)

(3,751)

 

(3,833)

 

(3,914)

Debentures

107% of CDI

(939)

(1,073)

 

(1,106)

 

(1,140)

Promissory note

CDI + 1.49%

(537)

(614)

 

(634)

 

(653)

Bank loans - CBD

106.97% of CDI

(1,057)

(1,213)

 

(1,252)

 

(1,290)

Leases

100.19% of CDI

(81)

(92)

 

(95)

 

(98)

Leases

95.31% of CDI

(94)

(106)

 

(109)

 

(112)

Bank loans- Via Varejo

CDI - 0.71%

(87)

(99)

 

(102)

 

(105)

Bank loans - Barcelona

108% of CDI

(162)

(187)

 

(193)

 

(199)

Total borrowings and financing exposure

 

(6,146)

(7,307)

 

(7,501)

 

(7,694)

   

 

 

 

 

 

 

Cash and cash equivalents (*)

100.74% of CDI

3,419

3,894

 

4,013

 

4,132

Net exposure

 

(2,727)

(3,413)

 

(3,488)

 

(3,562)

Net effect - loss

 

 

(686)

 

(761)

 

(835)

(*) weighted average

             

 

The Company has a net exposure (between trade payables and financial investments abroad) of US$3 million of assets and €3 million of liabilities, besides negative investments in foreign entities amounting to €0.3 million. Management did not apply the sensibility tests related to exchange exposure since the amounts were considered not relevant.

In addition, Company has a borrowing balance of R$1,107 with Casino’s group company Polca, bearing interests of EONIA + 0.5% per year. Considering that part of that interest rate is post-fixed and not representative, Company is not exposed to relevant variation of this interest rate and, therefore, with no sensibility analysis required for this exposure.

 

 

 

 

 

 

 

75

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

18.    Financial instruments – Continued

18.3.   Fair value measurements

The Company discloses the fair value of financial instruments measured at fair value and of financial instruments measured at amortized cost, the fair value of which differ from the carrying amount, in accordance with CPC 46 (“IFRS13”), which refer to the concepts of measurement and disclosure requirements.

The fair values of cash and cash equivalents, trade receivables, short and long-term debt and trade payables are equivalent to their carrying amounts.

The table below presents the fair value hierarchy of financial assets and liabilities measured at fair value and of financial instruments measured at amortized cost, the fair value of which is disclosed in the financial statements:

 

Carrying amount at 6.30.2016

Fair value at

6.30.2016

Fair value measurement at the end of the reporting period using other significant observable assumptions

Financial instruments at fair value through profit (loss)

   

Cross-currency interest rate swaps

(118)

(118)

level 2

Interest rate swaps

2

2

level 2

Borrowings and financing (fair value)

(3,055)

(3,055)

level 2

       

Financial instruments at amortized cost, in which the fair value is disclosed

   

Borrowings and financing (amortized cost)

(5,837)

(5,751)

level 2

Total

(9,008)

(8,922)

 

 

There were no changes between the fair value measurements levels in the six-month period ended June 30, 2016.

·       Cross-currency and interest rate swaps and borrowings and financing are classified in level 2 since the fair value of such financial instruments was determined based on readily observable market inputs, such as expected interest rate and current and future foreign exchange rate.

 

76

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

18.    Financial instruments – Continued

18.4.   Consolidated position of derivative transactions

The consolidated position of outstanding derivative transactions is presented in the table below:

Outstanding

       

Amount payable or receivable

Fair value

Description

Counterparties

Notional value

Contracting date

Maturity

6.30.2016

12.31.2015

6.30.2016

12.31.2015

Exchange swaps

               

registered with CETIP (US$ x CDI)

               
 

Tokyo Bank

US$ 75

1/14/2014

1/10/2017

57

110

57

113

 

JP Morgan Bank

US$ 50

3/19/2014

3/21/2016

-

77

-

82

 

Mizuho

US$ 50

10/31/2014

10/31/2017

35

70

36

69

 

Citibank

US$ 85

11/21/2014

11/21/2016

50

109

51

112

 

Tokyo Bank

US$ 75

1/2/2015

12/29/2016

42

94

42

98

 

Citibank

US$ 5

1/28/2015

1/28/2016

-

6

-

7

 

HSBC

US$ 100

2/25/2015

11/25/2016

30

100

32

102

 

Bradesco

US$ 100

4/27/2015

4/27/2016

-

66

-

76

 

Citibank

US$ 50

4/10/2015

4/10/2017

3

38

4

37

 

Citibank

US$ 30

4/14/2015

4/17/2017

2

22

3

22

 

Tokyo Bank

US$ 50

7/31/2015

7/31/2017

(9)

26

(28)

26

 

Bank of America

US$ 40

9/14/2015

9/14/2017

(28)

(1)

(9)

-

 

Scotiabank

US$ 50

9/30/2015

9/29/2017

(42)

(7)

(37)

(4)

 

Agricole

EUR 50

10/7/2015

10/8/2018

(49)

(13)

(39)

(18)

 

Itaú BBA

US$ 50

10/27/2015

1/17/2017

(50)

(3)

(49)

(1)

 

Bradesco

US$ 50

3/3/2016

3/6/2017

(44)

-

(40)

-

 

Scotiabank

US$ 50

1/15/2016

1/16/2018

(52)

-

(47)

-

 

Bradesco

US$ 50

2/1/2016

10/28/2016

(51)

-

(50)

-

 

Santander

US$ 47

2/22/2016

2/16/2017

(48)

-

(44)

-

Interest rate swap

             

 

registered with CETIP (fixed rate x CDI)

               
 

Itaú BBA

R$ 21

11/11/2014

11/5/2026

1

-

1

-

 

Itaú BBA

R$ 54

1/14/2015

1/5/2027

1

(1)

1

(1)

 

Itaú BBA

R$ 52

5/26/2015

5/5/2027

1

-

1

-

         

(151)

693

(115)

720

 (*) Clearinghouse for the Custody and Financial Settlement of Securities

77

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

19.    Taxes and contributions payable and taxes payable in installments

The detailed information on taxes and contributions payable and taxes payable in installments was presented in the annual financial statements for 2015, in note 19.

19.1.   Taxes and contributions payable and taxes payable in installments

 

Parent Company

 

Consolidated

 

6.30.2016

12.31.2015

 

6.30.2016

12.31.2015

           

PIS and COFINS

19

16

 

433

396

Provision for income tax and social contribution

-

3

 

27

52

ICMS

35

27

 

122

154

Others

2

9

 

64

148

 

56

55

 

646

750

   

 

 

 

 

Taxes payable in installments - Law 11,941/09

631

644

 

631

644

Other

6

8

 

7

8

 

637

652

 

638

652

           

Current

139

135

 

729

830

Noncurrent

554

572

 

555

572

19.2.   Maturity schedule of taxes payable in installments in noncurrent liabilities will occur as follows:

In

Parent Company and Consolidated

2017

41

2018

79

2019

79

2020

79

After 2020

277

 

555

 
 

78

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

20.    Income tax and social contribution

The detailed information on income tax and social contribution was presented in the annual financial statements for 2015, in note 20.

20.1.   Income and social contribution tax expense reconciliation

 

 

Parent Company

 

Consolidated

 

6.30.2016

6.30.2015

 

6.30.2016

6.30.2015

   

Restated

   

Restated

Profit before income tax and social contribution

(402)

287

 

(732)

395

Income tax and social contribution at the nominal rate of 25% for the Company and 34% for subsidiaries

100

(73)

 

216

(119)

Deferred income tax over carrying amount not recognized(*)

-

-

 

(193)

(44)

Tax penalties

(7)

(2)

 

(14)

(2)

Share of profit of subsidiaries and associates

(23)

47

 

21

19

Effect of tax rates in foreign entities

-

-

 

12

-

Reversal of deferred income tax and social contribution (*)

-

-

 

(46)

-

Other permanent differences (nondeductible)

6

(1)

 

(3)

(11)

Effective income tax and social contribution

76

(29)

 

(7)

(157)

           

Income tax and social contribution for the period:

         

Current

7

(1)

 

(74)

(60)

Deferred

69

(28)

 

67

(97)

Deferred income tax and social contribution expense

76

(29)

 

(7)

(157)

Effective rate

18.91%

10.10%

 

-0.96%

39.75%

(*) Refers to Cnova subsidiary.

CBD does not pay social contribution based on a final and unappealable court decision in the past; therefore its nominal rate is 25%.

20.2.   Breakdown of deferred income tax and social contribution

 

Parent Company

 

Consolidated

 

6.30.2016

12.31.2015

 

6.30.2016

12.31.2015

 

 

 

 

 

 

Tax losses

71

-

 

269

232

Temporary differences Write-off

-

-

 

(105)

(59)

Provision for risks

206

141

 

539

344

Provision for derivative transactions taxed on a cash basis

(82)

(107)

 

(86)

(100)

Estimated loss on doubtful accounts

4

1

 

127

106

Provision for current expenses

7

5

 

81

68

Goodwill tax amortization

(19)

(10)

 

(625)

(595)

Present value adjustment

1

1

 

(6)

(12)

Lease adjustment

8

5

 

(66)

(48)

Mark-to-market adjustment

(7)

(2)

 

(10)

(2)

Fair value of assets acquired in business combination

-

-

 

(786)

(790)

Technological innovation – future realization

(17)

(18)

 

(17)

(18)

Depreciation of fixed assets as per tax rates

(62)

(25)

 

(55)

(20)

Provision of Morzan arbitration

-

50

 

-

50

Other

9

9

 

12

66

Deferred income tax and social contribution

119

50

 

(728)

(778)

Noncurrent assets

119

50

 

330

406

Noncurrent liabilities

-

-

 

(1,058)

(1,184)

Income tax and social contribution

119

50

 

(728)

(778)

 

79

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

20.    Income tax and social contribution – Continued

20.2.   Breakdown of deferred income tax and social contribution – Continued

The Company estimates to recover these deferred tax assets as follows:

Year

Parent Company

Consolidated

2016

55

204

2017

43

74

After 2017

21

52

 

119

330

 

 

 

20.3.   Changes in deferred income tax and social contribution

 

 

Parent Company

 

Consolidated

 

6.30.2016

6.30.2015

 

6.30.2016

6.30.2015

 

 

Restated

 

 

Restated

At the beginning of the period

50

56

 

(778)

(642)

Expense for the period

69

(28)

 

67

(97)

Exchange rate changes

-

-

 

(8)

9

Other

-

-

 

(9)

16

At the end of the period

119

28

 

(728)

(714)

 

21.    Accounts payable related to acquisition of companies

The detailed information accounts payable related to acquisition of companies was presented in the annual financial statements for 2015, in note 21.

 

 

Consolidated

 

6.30.2016

12.31.2015

 

 

 

Interest acquisition in Assaí

7

7

Interest acquisition in Sendas

75

69

Interest acquisition in Cdiscount Colombia S.A.S

23

28

 

105

104

   

 

Current liabilities

82

76

Noncurrent liabilities

23

28

 

 

80

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

22.    Provision for risks

The provision for risks is estimated by the Company’s management, supported by its legal counsel. The provision was recognized in an amount considered sufficient to cover probable losses.

22.1. Parent Company

 

PIS/COFINS

Taxes and other

Social security and labor

Civil

Regulatory

Total

Balances at December 31, 2015

63

187

152

71

17

490

Additions

14

75

57

19

12

177

Payments

-

-

(11)

(4)

(4)

(19)

Reversals

-

(3)

(3)

(15)

(6)

(27)

Inflation adjustment

5

13

8

8

2

36

Balances at June 30, 2016

82

272

203

79

21

657

 

 

PIS/COFINS

Taxes and other

Social security and labor

Civil

Regulatory

Total

Balances at December 31, 2014

40

190

168

72

13

483

Additions

-

4

13

8

5

30

Payments

-

-

(8)

(2)

(2)

(12)

Reversals

-

(18)

(2)

(14)

(1)

(35)

Inflation adjustment

2

10

8

9

2

31

Balances at June 30, 2015

42

186

179

73

17

497

22.2. Consolidated

 

PIS/COFINS

Taxes and other

Social security and labor

Civil

Regulatory

Total

Balances at December 31, 2015

103

414

597

248

34

1,396

Additions

57

150

280

122

19

628

Payments

-

-

(103)

(51)

(7)

(161)

Reversals

(4)

(11)

(60)

(65)

(11)

(151)

Inflation adjustment

7

18

32

21

4

82

Exchange rate changes

-

(2)

(2)

(6)

-

(10)

Balances at June 30, 2016

163

569

744

269

39

1.784

 

 

PIS/COFINS

Taxes and other

Social security and labor

Civil

Regulatory

Total

Balances at December 31, 2014

79

510

521

201

33

1,344

Additions

9

16

99

107

12

243

Payments

-

-

(74)

(61)

(6)

(141)

Reversals

(7)

(121)

(18)

(66)

(5)

(217)

Inflation adjustment

3

16

29

28

4

80

Exchange rate changes

-

1

-

-

-

1

Balances at June 30, 2015

84

422

557

209

38

1,310

 

81

 


 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

22.    Provision for risks – Continued

22.3. Tax

As per prevailing legislation, tax claims are subject to monetary indexation, which refers to an adjustment to the provision for tax risks according to the indexation rates used by each tax jurisdiction. In all cases, both the interest charges and fines, when applicable, were computed and fully provisioned with respect to unpaid amounts.

The main provisioned tax claims are as follows:

22.3.1.     COFINS and PIS

Since the noncumulative regime to calculate PIS and COFINS has been used, the Company and its subsidiaries have challenged the right to deduct ICMS from the base of these two contributions and other minor matters. The amount accrued as at June 30, 2016 is R$163 (R$103 as at December 31, 2015).

22.3.2.     Tax

The Company and its subsidiaries have other tax claims, which after analysis by its legal counsel, were considered as probable losses and accrued by the Company. These refer to: (i) tax assessment notices related to purchase, industrialization and sale of soybean and byproducts exports (PIS, COFINS and IRPJ); (ii) challenge on the non-application of the Accident Prevention Factor - FAP for 2011; (iii) challenge on the Poverty Fighting Fund established by the Rio de Janeiro State Government; (iv) challenges on purchases from suppliers considered not qualified in the State Finance Department registry, error in application of rate and accessory obligations by State tax authorities; (v) arguing about ICMS rates over energy expenses in the Rio de Janeiro State; and (vi) other less relevant issues.

The amount accrued for these matters as at June 30, 2016 is R$268 (R$121 as at December 31, 2015).

ICMS

The Federal Supreme Court ("STF") on October 16, 2014 decided that ICMS taxpayers that trade products included in the “basket of food staples” have no right to fully utilize the ICMS credits. The Company, with the assistance of its legal counsel, decided that it would be an appropriate procedure to record a provision for this matter amounting to R$136 as at June 30, 2016 (R$128 as at December 31, 2015) since this claim is considered a “probable” loss. The amounts accrued represent Management’s best estimate of the probable cash disbursement to settle this claim.

22.3.3.      Supplementary Law 110/2001

The Company claims in court the eligibility to not pay the contributions provided for by Supplementary Law 110/01, referring to the FGTS (Government Severance Indemnity Fund for Employees) costs. The accrued amount as at June 30, 2016 is R$69 (R$62 as at December 31, 2015).

 

 

 

82

 


 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

22.    Provision for risks – Continued

22.3.4.      Others contingent tax liabilities - Cdiscount

There were consolidated provisions for contingent tax liabilities from foreign e-commerce entities. As at June 30, 2016 the contingent tax liabilities amount to R$10 (R$13 as at December 31, 2015).

22.3.5.      Others contingent tax liabilities - Via Varejo

Provisions for contingent tax liabilities were recorded as a result of the business combination with Via Varejo, as required by CPC 15(R1) (IFRS 3). As at June 30, 2016, the recorded amount related to contingent tax liabilities is R$86 (R$84 as at December 31, 2015).

These accrued claims refer to administrative proceedings related to the offset of tax debts against credits from the contribution levied on coffee exports.

22.3.6.      Others contingent tax liabilities - Bartira

During the six-month period ended June 30, 2016, the Company reversed almost the totality of contingent liabilities related to Bartira PPA, occurred in 2013. The amounts reversed comprise R$6 of tax and R$11 of labor contingencies, totaling R$17. The remaining amount for six-month period ended June 30, 2016 is R$1 (R$18 at December 31, 2015).

22.4.      Labor

The Company and subsidiaries are parties to various labor lawsuits mainly due to termination of employees in the ordinary course of business. At June 30, 2016, the Company recorded a provision of R$744 (R$597 as at December 31, 2015) related to the potential risk of loss on these lawsuits. Management, with the assistance of its legal counsel, assesses these claims recording a provision for losses when reasonably estimable, based on past experiences in relation to the amounts claimed. Labor claims are indexed to rate according to a table available by TST (“The Brazilian Supreme Labor Court”), plus monthly interest of 1%.

22.5.      Civil and others

The Company and its subsidiaries are parties to civil lawsuits at several court levels (indemnities and collections, among others) and at different courts. The Company’s management records provisions in amounts considered sufficient to cover unfavorable court decisions, when its legal counsel considers the loss as probable.

 

 

83

 


 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

22.    Provision for risks – Continued

22.5 Civil and others - continued

Among these lawsuits, we point out the following:

·The Company and its subsidiaries are parties to various lawsuits requesting the renewal of rental agreements and the review of the current rent paid. The Company recognizes a provision for the difference between the amount originally paid by the stores and the amounts pleaded by the adverse party (owner of the property) in the lawsuit, when internal and external legal counsel consider that it is probable that the rent amount will be changed by the entity. As at June 30, 2016, the amount accrued for these lawsuits is R$109 (R$45 as at December 31, 2015), for which there are no escrow deposits.

 

·       Company and its subsidiaries answer to legal claims related to penalties applied by regulatory agencies, from the federal, state and municipal administrations, among which Consumer Protection Agencies (Procon) , National Institute of Metrology, Standardization and Industrial Quality (INMETRO) and Municipalities. Company supported by its legal counsel, revises that claims, recording a provision according to probable cash expending and estimative of loss .On June 30, 2016 the amounting of this provision is R$39 (R$34 on December 31,2015)

·The subsidiary Via Varejo is a party to lawsuits involving consumer relationship rights (civil actions and assessments from PROCON) and lawsuits involving contracts terminated with suppliers and the amount claimed in these lawsuits totals R$65 as at June 30, 2016 (R$64 as at December 31, 2015).

 

Total civil lawsuits and others as at June 30, 2016 amount to R$308 (R$282 as at December 31, 2015).

22.6. Other non-accrued contingent liabilities

The Company has other demands that have been analyzed by the legal counsel and deemed as possible but not probable, therefore, not provided. Among these claims, there are those concerning the collection of differences in corporate income tax collection, which the Company has a right of indemnity of its current and former shareholders, allegedly due in respect of the 2007 calendar years 2013, on the grounds that there was deduction undue of goodwill amortization properly paid. The amount involved is R$1,097 on June 30, 2016 (R$1,046 at December 31, 2015), sorted by possible loss and there is another part classified as remote. In addition, the balances of possible procedures without any compensation totaling an updated amount of R$10,970 on June 30, 2016 (R$11,671 at December 31, 2015), and are mainly related to:

·       INSS (Social Security Contribution) – GPA was assessed for non-levy of payroll charges on benefits granted to its employees, among other matters, for which possible loss amounts to R$403 as at June 30, 2016 (R$410 as at December 31, 2015). The lawsuits are under administrative and court discussions.

·       IRPJ, withholding income tax - IRRF, CSLL, tax on financial transactions - IOF, withholding income tax on net income, ILL – GPA has several assessment notices regarding offsetting proceedings, rules on the deductibility of provisions, payment divergences and overpayments; fine for failure to comply with accessory obligations, among other less significant taxes. The lawsuits await administrative and court ruling. The amount involved is R$993 as at June 30, 2016 (R$1,010 as at December 31, 2015).

 

 

84

 


 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

22.    Provision for risks – Continued

22.6. Other non-accrued contingent liabilities – Continued

Mandala goodwill: tax assessment related to the goodwill tax deduction in the years of 2012 and 2013, originated by the acquisition of Ponto Frio occurred in the year of 2009. The restated amount of the assessment notice correspond to R$75 of income tax and social contribution(R$72 in December 31, 2015).

·       COFINS, PIS, provisional contribution on financial transactions – CPMF and IPI – the Company has been challenged about offsets of COFINS and PIS against IPI credits – inputs subject to zero rate or exempt – acquired from third parties with a final and unappealable decision which has been challenged by tax authorities, other requests for offset, collection of taxes on soybean export operations, tax payment divergences and overpayments; fine for failure to comply with accessory obligations, disallowance of COFINS and PIS credits on one-phase products, among other less significant taxes. These lawsuits await decision at the administrative and court levels. The amount involved in these assessments is R$2,301 as at June 30, 2016 (R$2,270 as at December 31, 2015).

·         ICMS – GPA received tax assessment notices by the State tax authorities regarding: (i) utilization of electric energy credits; (ii) purchases from suppliers considered not qualified in the State Finance Department registry; (iii) refund of tax replacement without proper compliance with accessory obligations introduced by CAT Administrative Rule 17 of the State of São Paulo; (iv) levied on its own operation of merchandise purchase (own ICMS)) – article 271 of ICMS by-law; (iv) resulting from sale of extended warranty, (v) resulting from financed sales; and (vii) among other matters. The total amount of these assessments is R$6,025 as at June 30, 2016 (R$6,765 as at December 31, 2015), which await a final decision at the administrative and court levels The decrease in the contingencies from possible to remote refers to part of the claims reclassified to remote due to change in the evaluation of external lawyers.

·       Municipal service tax - ISS, Municipal Real Estate Tax (“IPTU”), rates, and others – these refer to assessments on withholdings of third parties, IPTU payment divergences, fines for failure to comply with accessory obligations, ISS – reimbursement of advertising expenses and sundry taxes, in the amount of R$317 as at June 30, 2016 (R$387 as at December 31, 2015), which await decision at the administrative and court levels.

·       Other litigations – these refer to administrative proceedings and lawsuits in which the Company pleads the renewal of rental agreements and setting of rents according to market values and actions in the civil court, special civil court, Consumer Protection Agency  - PROCON (in many States), Institute of Weights and Measure - IPEM, National Institute of Metrology, Standardization and Industrial Quality - INMETRO and National Health Surveillance Agency - ANVISA, among others, amounting to R$931 as at June 30, 2016 (R$829 as at December 31, 2015).

The Company engages external attorneys to represent it in the tax assessments received, whose fees are contingent upon a percentage to be applied to the amount of success in the final outcome of these lawsuits. This percentage may vary according to qualitative and quantitative factors of each claim, and as at June 30, 2016 the estimated amount, in case of success in all lawsuits, is approximately R$115 (R$100 as at December 31,2015).

 

 

 

 

 

85

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

 

22.    Provision for risks – Continued

 

Our subsidiary Cnova, certain of its current and former officers and directors, and the underwriters of Cnova’s initial public offering, or IPO, have been named as defendants in a securities class action lawsuit in the United States Federal District Court for the Southern District of New York asserting claims related to macro-economic situation in Brazil and emphasized by the subject matter of the internal review, and Cnova may incur significant expenses (including, without limitation, substantial attorneys’ fees and other professional advisor fees and obligations to indemnify certain current and former officers or directors and the underwriters of Cnova’s initial public offering who are or may become parties to or involved in such matters). The Company and its subsidiary Cnova are unable at this time to predict the extent of potential liability in these matters, including what, if any, parallel action the SEC might take as a result of the facts at issue in these matters or the related internal review conducted by the Company and its subsidiary Cnova and its advisors retained by the Cnova’s board of directors.

22.7. Restricted deposits for legal proceedings

The Company is challenging the payment of certain taxes, contributions and labor-related obligations and has made court restricted deposits in the corresponding amounts, as well as escrow deposits related to the provision for legal proceedings.

The Company has registered in its assets amounts related to restricted deposits.

 

Parent Company

 

Consolidated

 

6.30.2016

12.31.2015

 

6.30.2016

12.31.2015

 

 

 

 

 

 

Tax

108

101

 

221

210

Labor

367

329

 

850

711

Civil and other

21

18

 

44

44

Regulatory

12

11

 

36

34

Total

508

459

 

1,151

999

22.8. Guarantees

 

Real estate

Equipment

Guarantee

Total

Tax

861

-

7,663

8,524

Labor

6

2

24

32

Civil and other

6

-

193

199

Regulatory

9

-

98

107

Total

882

2

7,978

8,862

 

The cost of guarantees is approximately 1.01% of the amount of the lawsuits and is recorded as expense by the passage of time.

 

 

86

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

23.    Leasing transactions

23.1.     Operating lease

(i)     Non-cancelable minimum payments

 

Consolidated

 

6.30.2016

Minimum rental payment:

 

Up to 1 year

61

1 - 5 years

243

Over 5 years

379

 

683

Refer to non-cancellable rental agreements through the due dates. The operating leasing agreements vary from 3 to 20 years and the table above presents the non-cancelable agreements. There are other operating lease agreements that management considers as cancelable, recording the related expenses in the Statement of Profit and Loss. The total expense recorded as “noncontingent payments” related to operating lease agreements is presented in item (iii) below.

(ii)    Minimum rental payments on the agreement termination date

The Company analyzed and concluded that the rental agreements are cancelable over their duration. In case of termination, minimum payments will be due as a termination fee, which can vary from 1 to 12 months of rental or a fixed percentage of the contractual balance.

 

Parent Company

Consolidated

 

6.30.2016

6.30.2016

Minimum rental payments

   

Minimum payments on the termination date

324

811

 

324

811

(iii)   Contingent payments

Management considers the payment of additional rents as contingent payments, which vary between 0.1% and 4.5% of sales.

 

Parent Company

 

Consolidated

Expenses(Income) for the period

6.30.2016

6.30.2015

 

6.30.2016

6.30.2015

Contingent payments

111

182

 

215

344

Non contingent payments

164

80

 

549

495

Sublease rentals (*)

(67)

(54)

 

(78)

(72)

 (*) Refers to lease agreements receivable from commercial shopping malls.

87

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

23.    Leasing transactions – Continued

23.2.   Finance lease

Finance lease agreements amounted to R$318 as at June 30, 2016 (R$264 as at December 31, 2015), as shown in the table below:

 

Parent Company

 

Consolidated

 

6.30.2016

12.31.2015

 

6.30.2016

12.31.2015

Financial lease liability–minimum rental payments:

         

Up to 1 year

37

30

 

52

44

1 - 5 years

145

91

 

211

157

Over 5 years

28

26

 

55

63

Present value of finance lease agreements

210

147

 

318

264

 

 

   

 

 

Future financing charges

185

179

 

231

238

Gross amount of finance lease agreements

395

326

 

549

502

24.    Deferred revenue

The Company and its subsidiary Via Varejo received in advance amounts from business partners on exclusivity in the intermediation of additional or extended warranties services, and the subsidiary Sendas (the former Barcelona) received in advance amounts for the rental of back lights for exhibition of products from its suppliers.

The detailed information on deferred revenue was presented in the annual financial statements for 2015, in note 24.

 

Parent Company

 

Consolidated

 

6.30.2016

12.31.2015

 

6.30.2016

12.31.2015

           

Additional or extended warranties

39

42

 

733

777

Bradesco agreement

-

-

 

637

699

Swap agreement

-

-

 

7

65

Services rendering agreement - Allpark

16

16

 

16

16

Back lights

-

-

 

22

36

Spread BCA - Customers base exclusivity (5 years)

-

-

 

-

6

Tax credit research

-

-

 

4

5

Others

1

2

 

48

39

 

56

60

 

1,467

1,643

 

 

   

 

 

Current

27

28

 

350

420

Noncurrent

29

32

 

1,117

1,223

 

 

 

 

 

 

88

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

25.    Shareholders’ equity

 

The detailed information on shareholders’ equity was presented in the annual financial statements for 2015, in note 25.

25.1.   Capital stock

The subscribed and paid-up capital as at June 30, 2016 is represented by 265,724 (265,702 as at December 31, 2015) in thousands of registered shares with no par value, of which 99,680 in thousands of common shares as at June 30, 2016 (99,680 as at December 31, 2015) and 166,044 in thousands of preferred shares as at June 30, 2016 (166,022 as at December 31, 2015).

The Company is authorized to increase its capital stock up to the limit of 400,000 (in thousands of shares), regardless of any amendment to the Company’s Bylaws, upon resolution of the Board of Directors, which will establish the issue conditions.

·         At the Board of Directors’ Meetings held on February 24, 2016, March 22, 2016 and May 9, 2016 were approved capital increases in the amount R$1 (R$13 on June 30, 2015) through  the issue of 22 (in thousands of shares) preferred shares(379 thousands of shares on June 30,2015).

 

25.2.   Stock option plan for preferred shares

Option plan

 

Information on the stock option plans is summarized below:

 

 

 

Price

Lot of shares

Series granted

Grant date

1st date of exercise 

2nd date of exercise and expiration

At the grant date

End of the year

Number of shares granted
(in thousands

Exercised

Not exercised by dismissal

Total in effect

Balance at June 30, 2016

 

 

 

 

 

 

Series A6 - Gold

3/15/2012

3/31/2015

3/31/2016

0.01

0.01

526

(490)

(36)

-

Series A6 - Silver

3/15/2012

3/31/2015

3/31/2016

64.13

64.13

526

(489)

(37)

-

Series A7 - Gold

3/15/2013

3/31/2016

3/31/2017

0.01

0.01

358

(182)

(39)

137

Series A7 - Silver

3/15/2013

3/31/2016

3/31/2017

80

80

358

(182)

(39)

138

Series B1

5/30/2014

5/30/2017

11/30/2017

0.01

0.01

239

(17)

(57)

165

Series C1

5/30/2014

5/30/2017

11/30/2017

83.22

83.22

239

(11)

(74)

154

Series B2

5/29/2015

6/1/2018

11/30/2018

0.01

0.01

337

(6)

(25)

306

Series C2

5/29/2015

6/1/2018

11/30/2018

77.27

77.27

337

-

(38)

299

Série B3

5/30/2015

5/30/2019

11/30/2019

0.01

0.01

823

-

-

823

Série C3

5/30/2015

5/30/2019

11/30/2019

37.21

37.21

823

-

-

823

 

 

 

 

 

 

4,566

(1,377)

(345)

2,844

 

 

89

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

25.    Shareholders’ equity - Continued

 

 

 

Price

Lot of shares

Series granted

Grant date

1st date of exercise 

2nd date of exercise and expiration

At the grant date

End of the year

Number of shares granted
(in thousands

Exercised

Not exercised by dismissal

Total in effect

Balance at December 31, 2015

 

 

 

 

 

 

Series A5 - Gold

5/31/2011

5/31/2014

5/31/2015

0.01

0.01

299

(285)

(14)

-

Series A5 - Silver

5/31/2011

5/31/2014

5/31/2015

54.69

54.69

299

(285)

(14)

-

Series A6 - Gold

3/15/2012

3/31/2015

3/31/2016

0.01

0.01

526

(490)

(36)

-

Series A6 - Silver

3/15/2012

3/31/2015

3/31/2016

64.13

64.13

526

(488)

(36)

2

Series A7 - Gold

3/15/2013

3/31/2016

3/31/2017

0.01

0.01

358

(172)

(35)

151

Series A7 - Silver

3/15/2013

3/31/2016

3/31/2017

80

80

358

(172)

(35)

151

Series B1

5/30/2014

5/30/2017

11/30/2017

0.01

0.01

239

(16)

(54)

169

Series C1

5/30/2014

5/30/2017

11/30/2017

83.22

83.22

239

(11)

(64)

164

Series B2

5/29/2015

6/1/2018

11/30/2018

0.01

0.01

337

(5)

(16)

316

Series C2

5/29/2015

6/1/2018

11/30/2018

77.27

77.27

337

-

(23)

314

 

 

 

 

 

 

3,518

(1,924)

(327)

1,267

At June 30, 2016 there were 233 treasury-preferred shares which may be used as guarantee for the options granted in the plan. The preferred share price at BM&FBovespa was R$46.71 per share.

The chart below shows the maximum percentage of interest dilution to which current shareholders will eventually be subject to in the event of exercise until 2016 of all options granted:

 

6.30.2016

12.31.2015

 

 

 

Number of shares

265,724

265,702

Balance of granted series in effect

2,844

1,267

Maximum percentage of dilution

1.07%

0.48%

 

The expectation of remaining average life of the series outstanding at June 30, 2016 was 2.25 year (1.75 year at December 31, 2015). The weighted average fair value of options granted at June 30, 2016 was R$45.11 (R$67.35 at December 31, 2015).

 

Shares

Weighted average of exercise price

Weighted average of remaining contractual term

Intrinsic value added

         

At December 31, 2015

       

Granted during the year

674

38.64

   

Cancelled during the year

(117)

45.53

   

Exercised during the year

(418)

32.62

   

Outstanding at the end of the year

1,267

39.57

1.75

26,586

Total to be exercised at December 31, 2015

1,267

39.57

1.75

26,586

         

At June 30, 2016

       

Granted during the period

1,645

18.61

 

 

Cancelled during the period

(46)

50.35

 

 

Exercised during the period

(22)

35.80

 

 

Outstanding at the end of the period

2,844

27.31

2.25

68,194

Total to be exercised at June 30, 2016

2,844

27.31

2.25

68,194

 

 

 

90

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

25.    Shareholders’ equity - Continued

The amounts recorded in the Consolidated Statement of Profit and Loss , as at June 30, 2016 were R$5 (R$9 as at June 30, 2015).

25.3.   Cumulative other comprehensive income

Cumulative Translation Reserve corresponding to cumulative effect of exchange gains and losses on the translation of assets, liabilities and profit (loss) in Brazilian reais, corresponding to the investment of CBD in subsidiary Cdiscount. The effect in the Parent Company was R$72 and R$188 for non-controlling interests.

 

26.    Net sales of goods and/or services      

 

Parent Company

 

Consolidated

 

6.30.2016

6.30.2015

 

6.30.2016

6.30.2015

Gross sales:

       

Restated

Goods

12,903

11,975

 

37,273

36,316

Services rendered

129

135

 

1,505

1,049

Financial services

-

-

 

682

701

Sales returns and cancellations

(222)

(212)

 

(647)

(999)

 

12,810

11,898

 

38,813

37,067

 

 

       

Taxes

(1,010)

(913)

 

(4,355)

(3,740)

 

 

 

 

 

 

Net sales

11,800

10,985

 

34,458

33,327

 

27.    Expenses by nature       

 

Parent Company

 

Consolidated

 

6.30.2016

6.30.2015

 

6.30.2016

6.30.2015

 

 

 

 

 

Restated

Cost of inventories

(7,998)

(7,511)

 

(24,574)

(23,639)

Personnel expenses

(1,604)

(1,396)

 

(3,937)

(3,628)

Outsourced services

(188)

(154)

 

(1,438)

(1,332)

Functional expenses

(862)

(679)

 

(1,613)

(1,464)

Selling expenses

(364)

(326)

 

(1,380)

(1,334)

Other expenses

(192)

(138)

 

(352)

(276)

 

(11,208)

(10,204)

 

(33,294)

(31,673)

 

         

Cost of goods and/or services sold

(8,564)

(8,027)

 

(26,301)

(25,324)

Selling expenses

(2,351)

(1,943)

 

(6,047)

(5,491)

General and administrative expenses

(293)

(234)

 

(946)

(858)

 

(11,208)

(10,204)

 

(33,294)

(31,673)

 

 

 

91

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

 

28.    Other operating income (expenses), net

 

Parent Company

 

Consolidated

 

6.30.2016

6.30.2015

 

6.30.2016

6.30.2015

Loss on disposal of fixed assets

(37)

(14)

 

(9)

(38)

Integration/restructuring expenses (**)

(36)

(48)

 

(131)

(157)

Indemnified amounts (*)

(38)

(43)

 

(38)

(45)

Cnova expenses (note 1.2)

(1)

-

 

(170)

-

Tax provision (***)

(146)

-

 

(184)

-

Reversal of provision

-

15

 

-

116

Others

(7)

(4)

 

(17)

(29)

 

(265)

(94)

 

(549)

(153)

(*) Amounts related to compensation resulting from expenses of contingencies related to prior periods to association with CB;

(**) A number of additional measures have been implemented to adapt the company's expense structure, covering all operating and administrative areas, in order to mitigate the effects of inflation on fixed costs and lower dilution of expenses; and

(***) The Company accrued the amount of R$184 related to income tax causes, ICMS, PIS / COFINS and fines for legal accessory obligations and reclassified from possible to probable.

 

29.    Financial income (expenses), net

 

Parent Company

 

Consolidated

 

6.30.2016

6.30.2015

 

6.30.2016

6.30.2015

Finance expenses:

 

 

 

 

Restated

Cost of debt

(308)

(334)

 

(608)

(587)

Cost of sales of receivables

(40)

(31)

 

(344)

(319)

Monetary loss

(68)

(68)

 

(138)

(129)

Other finance expenses

(39)

(51)

 

(126)

(114)

Total financial expenses

(455)

(484)

 

(1,216)

(1,149)

 

 

 

 

 

 

Financial income:

 

 

 

 

 

Income from cash and cash equivalents

24

56

 

155

209

Monetary gain

51

76

 

151

228

Other financial income

3

-

 

3

13

Total financial income

78

132

 

309

450

 

         

Total

(377)

(352)

 

(907)

(699)

           

The hedge effects in the period ended June 30, 2016 and 2015 are disclosed in Note 18.

 

 

92

 


 
 
 

30.    Earnings per share

The information on earnings per share was presented in the annual financial statements for 2015, in note 30.

The table below presents the determination of net income available to holders of common and preferred shares and the weighted average number of common and preferred shares outstanding used to calculate basic and diluted earnings per share in each reporting period:

 

 

6.30.2016

 

6.30.2015

 

Preferred

Common

Total

 

Preferred

Common

Total

 

 

 

 

 

Restated

Basic numerator

             

Basic earnings allocated

-

-

-

 

-

-

-

Net income (loss) allocated to common and preferred shareholders

(204)

(122)

(326)

 

167

91

258

 

(204)

(122)

(326)

 

167

91

258

               

Basic denominator (thousands of shares)

             

Weighted average of shares

166

100

266

 

165

100

265

               

Basic earnings per thousands of shares (R$)

(1.22968)

(1.22968)

   

1.00589

0.91444

 
               

Diluted numerator

             

Net income (loss) allocated to common and preferred shareholders

(204)

(122)

(326)

 

167

91

258

 

(204)

(122)

(326)

 

167

91

258

               

Diluted denominator

             

Weighted average of shares
(in thousands)

166

100

266

 

165

100

265

Diluted weighted average of shares (in thousands)

166

100

266

 

165

100

265

Diluted earnings per thousands of shares (R$)

(1.22968)

(1.22968)

   

1.00379

0.91444

 

 

 

 

93

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

31.    Benefit plan

The information on benefit plan was presented in the annual financial statements for 2015, in note 31.

31.1.Pension plan

In France, an industry-specific agreement between employers and employees determines the payment of allowances to employees at the date of retirement depending on the years of service rendered and their salary at the age of retirement.

Main assumptions used in determining defined benefit obligations:

 

Cdiscount

 

6.30.2016

Discount rate

2.00%

Expected rate of future salary increases

1.80%

Retirement age

64

The discount rate is determine by reference to the Bloomberg 15-year AA corporate composite index.

Reconciliation of obligations in the balance sheet

 

Cdiscount

 

2016

At December 31, 2015

11

Cost of the period

1

Exchange rate changes

(2)

At June 30, 2016

10

31.2.Defined contribution plan

In July 2007, the Company established a supplementary defined contribution private pension plan on behalf of its employees to be managed by the financial institution BrasilPrev Seguros e Previdência S.A. The Company pays monthly contributions on behalf of its employees, and the amount paid for the six-month period ended June 30, 2016 is R$2 (R$2 as at June 30, 2015), and employees contribution is R$3 (R$2 as at June 30, 2015). The plan had 845 participants as at June 30, 2015 (872 as at June 30, 2015).

 

32.    Insurance coverage

The insurance coverage as at June 30, 2016 is summarized as follows:

 

 

 

Parent Company

Consolidated

Insured assets

Covered risks

Amount insured

Amount insured

Property and equipment and inventories

Assigning profit

9,250

23,206

Profit

Loss of profits

4,483

10,974

Vehicles and others (*)

Damages

448

778

The Company maintains specific policies for civil liability and directors and officers liability amounting to R$384.

(*)     The value reported above does not include coverage of the hooves, which are insured by the value of 100% of the Foundation Institute of Economic Research – FIPE table.

94

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

33.    Segment information

The information on segments was presented in the annual financial statements for 2015, in note 33.

Management considers the following segments:

·       Retail – includes the banners “Pão de Açúcar”, “Minuto Pão de Açúcar”, “Extra Hiper”, “Extra Supermercado”, “Minimercado Extra”, “Posto Extra”, “Drogaria Extra” and “GPA Malls & Properties”.

·       Home appliances – includes the banners “Ponto Frio” and “Casas Bahia”.

·       Cash & Carry – includes the brand “ASSAÍ”.

·       E-commerce includes the “sites” www.pontofrio.com.br; www.extra.com.br; www.casasbahia.com.br; www.barateiro.com.br, www.partiuviagens.com.br and www.cdiscount.com.br.

Information on the Company’s segments as at June 30, 2016 is included in the table below:

 

95

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

33.    Segment information – Continued

 

Description

Retail

 

Cash & Carry

 

Home appliances

 

E-commerce (**)

 

Total (**)

 

Eliminations(*)

 

Total (**)

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

Net sales

13,129

13,113

 

6,495

4,756

 

9,041

9,712

 

5,827

5,781

 

34,492

33,362

 

(34)

(35)

 

34,458

33,327

Gross profit

3,617

3,627

 

943

651

 

3,094

3,186

 

506

539

 

8,160

8,003

 

(3)

-

 

8,157

8,003

Depreciation and amortization

(291)

(288)

 

(62)

(46)

 

(87)

(87)

 

(61)

(48)

 

(501)

(469)

 

-

-

 

(501)

(469)

Share of profit of subsidiaries and associates

44

45

 

-

-

 

17

17

 

-

-

 

61

62

 

-

-

 

61

62

Operating income

109

528

 

165

102

 

386

707

 

(485)

(243)

 

175

1,094

 

-

-

 

175

1,094

Finance costs

(472)

(510)

 

(67)

(48)

 

(469)

(453)

 

(218)

(155)

 

(1,226)

(1,166)

 

10

17

 

(1,216)

(1,149)

Finance income

97

209

 

20

8

 

171

178

 

31

72

 

319

467

 

(10)

(17)

 

309

450

Profit(loss) before income tax and social contribution

(266)

226

 

117

62

 

89

431

 

(672)

(324)

 

(732)

395

 

-

-

 

(732)

395

Income tax and social contribution

76

(46)

 

(46)

(21)

 

(23)

(141)

 

(14)

51

 

(7)

(157)

 

-

-

 

(7)

(157)

Net income (loss) for the period

(190)

179

 

71

40

 

66

290

 

(686)

(271)

 

(739)

238

 

-

-

 

(739)

238

 

                                       

Current assets

5,943

7,394

 

2,012

2,187

 

8,202

10,491

 

3,313

4,888

 

19,470

24,960

 

(22)

-

 

19,448

24,960

Noncurrent assets

14,004

13,934

 

2,135

1,868

 

5,942

5,806

 

1,004

1,045

 

23,085

22,653

 

(499)

(372)

 

22,586

22,281

Current liabilities

6,794

6,910

 

2,293

2,409

 

7,416

9,463

 

5,685

6,863

 

22,188

25,645

 

(521)

(372)

 

21,667

25,273

Noncurrent liabilities

4,930

5,766

 

263

372

 

2,175

2,350

 

116

128

 

7,484

8,616

 

-

-

 

7,484

8,616

Shareholders' equity

8,223

8,652

 

1,591

1,274

 

4,553

4,484

 

(1,484)

(1,058)

 

12,883

13,352

 

-

-

 

12,883

13,352

 

 

(*) The eliminations are composed by intercompany balances.

(**) Restated balances in the e-commerce segment for 6.30.2015.

 

 

 

 

96

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016

(In millions of Brazilian reais, unless otherwise stated)

 

33.    Segment information – Continued

 

Brazil

 

International

                 

Description

Retail

 

Cash & Carry

 

Home appliances

 

E-commerce(**)
Restated

 

E-commerce

 

Total (**)

 

Eliminations (*)

 

Total (**)

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

 

2016

2015

                                               

Net operating revenue

13,129

13,113

 

6,495

4,756

 

9,041

9,712

 

2,255

3,166

 

3,572

2,615

 

34,492

33,362

 

(34)

(35)

 

34,458

33,327

                                               

Current assets

5,943

7,394

 

2,012

2,187

 

8,202

10,491

 

1,326

2,293

 

1,987

2,595

 

19,470

24,960

 

(22)

-

 

19,448

24,960

Noncurrent assets

14,004

13,934

 

2,135

1,868

 

5,942

5,806

 

476

379

 

528

666

 

23,085

22,653

 

(499)

(372)

 

22,586

22,281

Current liabilities

6,794

6,910

 

2,293

2,409

 

7,416

9,463

 

3,263

3,525

 

2,422

3,338

 

22,188

25,645

 

(521)

(372)

 

21,667

25,273

Noncurrent liabilities

4,930

5,766

 

263

372

 

2,175

2,350

 

31

25

 

85

103

 

7,484

8,616

 

-

-

 

7,484

8,616

Shareholders' equity

8,223

8,652

 

1,591

1,274

 

4,553

4,484

 

(1,492)

(878)

 

8

(180)

 

12,883

13,352

 

-

-

 

12,883

13,352

 

 

(*) The eliminations consist of intercompany balances

(**) Restated balances in the e-commerce segment for 6.30.2015.

97

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016                    

(In millions of Brazilian reais, unless otherwise stated)

33.    Segment information – Continued

Company’s general information

The Company and its subsidiaries operate primarily as a retailer of food, clothing, home appliances and other products. Total revenues are composed of the following types of products:

 

6.30.2016

6.30.2015

 

Restated

Food

56.9%

53.5%

Nonfood

43.1%

46.5%

Total sales

100.0%

100.0%

 

 

 

 

As at June 30, 2016, capital expenditures were as follows:

 

6.30.2016

6.30.2015

 

Restated

Food

523

663

Nonfood

138

323

Total capital expenditures

661

986

34.    Events after report period

34.1.Promissory note emission

The Board of Directors’ meeting held on July 14, approved the 2nd issuance of promissory notes, for public distribution, in the total the amount of R$500. There were 200 promissory notes, which unitary amount of R$2.5. The resources are used to strengthen Company’s working capital.

 

 

 

 

98

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016                    

(In millions of Brazilian reais, unless otherwise stated)

Other information deemed as relevant by the Company.

 

SHAREHOLDING OF CONTROLLING PARTIES OF THE COMPANY’S SHARES. UP TO THE INDIVIDUAL LEVEL

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO (Publicly-held company)

Shareholding at 6/30/2016
(In units)

Shareholder

Common Shares

Preferred Shares

Total

Number

%

Number

%

Number

%

Wilkes Participações S/A

94,019,178

94.32%

-

0.00%

94,019,178

35.38%

Jean-Charles Naouri

-

0.00%

1

0.00%

1

0.00%

Geant International BV*

-

0.00%

9,423,742

5.68%

9,423,742

3.55%

Segisor*

5,600,050

5.62%

-

0.00%

5,600,050

2.11%

Casino Guichard Perrachon*

1

0.00%

-

0.00%

1

0.00%

Almacenes Éxito S.A.*

1

0.00%

-

0.00%

1

0.00%

King LLC*

-

0.00%

852,000

0.51%

852,000

0.32%

Helicco Participações Ltda.

-

0.00%

581,600

0.35%

581,600

0.22%

Carmignac Gestion*

-

0.00%

13,576,698

8.18%

13,576,698

5.11%

Harding Loevner, LP*

-

0.00%

9,259,594

5.58%

9,259,594

3.48%

Brandes Investment Partners, LP*

-

0.00%

8,510,442

5.13%

8,510,442

3.20%

Board of Executive Officers

-

0.00%

2

0.00%

2

0.00%

Board of Directors

-

0.00%

26,701

0.02%

26,701

0.01%

Treasury Shares

-

0.00%

232,586

0.14%

232,586

0.09%

Others

60,621

0.06%

123,580,976

74.43%

123,641,597

46.53%

TOTAL

99,679,851

100.00%

166,044,342

100.00%

265,724,193

100%

(*) Foreign Company

           

 

CORPORATE’S CAPITAL STOCK DISTRIBUTION (COMPANY’S SHAREHOLDER). UP TO THE INDIVIDUAL LEVEL

WILKES PARTICIPAÇÕES S.A

Shareholding at 6/30/2016 (In units)

Shareholder/Quotaholder

Common Shares

Preferred Shares

Total

Number

%

Number

%

Number

%

Casino*

1

0.00%

-

0.00%

1

0.00%

Segisor*

217,371,145

97.23%

-

0.00%

217,371,145

97.23%

Bengal Llc*

2,119,162

0.95%

-

0.00%

2,119,162

0.95%

Oregon Llc*

2,119,162

0.95%

-

0.00%

2,119,162

0.95%

Pincher Llc*

1,961,612

0.88%

-

0.00%

1,961,612

0.88%

Éxito

1

0.00%

-

0.00%

1

0.00%

Ações Em Tesouraria

-

0.00%

-

0.00%

-

0.00%

TOTAL

223,571,083

100.00%

-

0.00%

223,571,083

100%

(*) Foreign Company

           

 

SHAREHOLDING OF CONTROLLING PARTIES OF THE COMPANY’S SHARES. UP TO THE INDIVIDUAL LEVEL

SEGISOR

Quotaholder

Quotas

%

Onper Investimentos 2015 S.L.*

887,239,543

50.00%

Casino Guichard Perrachon*

887,239,543

50.00%

TOTAL

1,774,479,086

100%

(*) Foreign Company

   

99

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016                    

(In millions of Brazilian reais, unless otherwise stated)

Other information deemed as relevant by the Company.

SHAREHOLDING OF CONTROLLING PARTIES OF THE COMPANY’S SHARES. UP TO THE INDIVIDUAL LEVEL

ONPER INVESTIMENTOS 2015 S.L.

Shareholding at 6/30/2016 (In units)

Shareholder

Common Shares

%

Preferred Shares

%

Number

%

Almanacenes Éxito S.A.*

3,000

100.00%

0

0.00%

3,000

100.00%

TOTAL

3,000

100%

0

0%

3,000

100.00%

(*) Foreign Company

           

 

SHAREHOLDING OF CONTROLLING PARTIES OF THE COMPANY’S SHARES. UP TO THE INDIVIDUAL LEVEL

ALMANACENES ÉXITO S.A.

Shareholding at 6/30/2016 (In units)

ShareholderS*

Common Shares

%

Preferred Shares

%

Number

%

Fondo De Pensiones Obligatorias Proteccion

19,547,642

17.12%

-

0.00%

19,547,642

17.12%

Exito Adr Program

13,838,922

12.12%

-

0.00%

13,838,922

12.12%

Oppenheimer Developing Markets Fund

12,596,043

11.03%

-

0.00%

12,596,043

11.03%

Bergsaar B.V.

12,130,244

10.62%

-

0.00%

12,130,244

10.62%

Alianza Fiduciaria S.A Fideicomiso Adm Sonnenblume

7,558,552

6.62%

-

0.00%

7,558,552

6.62%

Fondo De Pensiones Obligatorias Colfondos Moderado

7,191,551

6.30%

-

0.00%

7,191,551

6.30%

Inversiones Pinamar S.A.

4,849,735

4.25%

-

0.00%

4,849,735

4.25%

Fondo Bursatil Ishares Colcap

4,678,686

4.10%

-

0.00%

4,678,686

4.10%

Jara Albarracin Manuel

4,508,402

3.95%

-

0.00%

4,508,402

3.95%

Moreno Barbosa Jaime

4,463,642

3.91%

-

0.00%

4,463,642

3.91%

Corbeta S.A. Y/O Alkosto S.A

3,554,117

3.11%

-

0.00%

3,554,117

3.11%

Fondo De Pensiones Obligatorias Skandia S.A.

3,550,207

3.11%

-

0.00%

3,550,207

3.11%

Vanguard Emerging Markerts Stock Index Fund

3,399,836

2.98%

-

0.00%

3,399,836

2.98%

Platinu7M International Brands Fund

3,323,481

2.91%

-

0.00%

3,323,481

2.91%

Nat. Westminster Bank Plc As Depo For 1St Ste Glob

3,055,729

2.68%

-

0.00%

3,055,729

2.68%

Vanguard Total International Stock Index Fund

2,457,312

2.15%

-

0.00%

2,457,312

2.15%

College Retirement Equities Fund

1,790,482

1.57%

-

0.00%

1,790,482

1.57%

Fondo Bursatil Horizons Colombia Select De S&P

1,699,449

1.49%

-

0.00%

1,699,449

1.49%

TOTAL

114,194,032

100.00%

-

0.00%

114,194,032

100.00%

100

 


 
 
 

Companhia Brasileira de Distribuição

 

Notes to the interim financial information

June 30, 2016                    

(In millions of Brazilian reais, unless otherwise stated)

Other information deemed as relevant by the Company.

             

CONSOLIDATED SHAREHOLDING OF CONTROLLING PARTIES AND MANAGEMENT AND OUTSTANDING SHARES
Shareholding at 6/30/2016

Shareholding at 6/30/2016
(In units)

Shareholder

Common Shares

Preferred Shares

Number

%

Number

%

Number

%

Controlling parties

99,619,230

164331.22%

10,857,343

6.54%

110,476,573

41.58%

 

           

Management

           

Board of Directors

-

0.00%

2

0.00%

2

0.00%

Board of Executive Officers

-

0.00%

26,701

0.02%

26,701

0.01%

 

           

Treasury Shares

-

0.00%

232,586

0.14%

232,586

0.09%

 

           

Other Shareholders

60,621

100.00%

154,927,709

93.31%

154,988,330

58.33%

 

           

Total

99,679,851

164431.22%

166,044,341

100.00%

265,724,192

100.00%

 

           

Outstanding Shares

60,621

0.06%

154,927,709

93.31%

154,988,330

58.33%

 

 

 

       
             
         

Shareholding at 6/30/2015
(In units)

CONSOLIDATED SHAREHOLDING OF CONTROLLING PARTIES AND MANAGEMENT AND OUTSTANDING SHARES
Shareholding at 6/30/2015

Shareholder

Common Shares

Preferred Shares

   

Number

%

Number

%

Number

%

Controlling parties

99,619,230

99.94%

9,887,819

5.96%

109,507,049

41.22%

 

           

Management

           

Board of Directors

-

0.00%

3

0.00%

3

0.00%

Board of Executive Officers

-

0.00%

27,296

0.02%

27,296

0.01%

 

           

Treasury Shares

-

0.00%

232,586

0.14%

232,586

0.09%

 

           

Other Shareholders

60,621

0.06%

155,834,610

93.89%

155,895,231

58.68%

 

           

Total

99,679,851

100.00%

165,982,314

100.00%

265,662,165

100.00%

 

           

Outstanding Shares

60,621

0.06%

155,834,610

93.89%

155,895,231

58.68%

             

 

101

 

 

 


 
 

SIGNATURES

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




     
    COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO



Date:  July 28, 2016 By:   /s/ Ronaldo Iabrudi 
         Name:   Ronaldo Iabrudi
         Title:     Chief Executive Officer



    By:    /s/ Christophe José Hidalgo            
         Name:  Christophe José Hidalgo 
         Title:     Investor Relations Officer


FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.