SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of May, 2016
(Commission File No. 001-32221) ,
GOL LINHAS AÉREAS INTELIGENTES S.A.
(Exact name of registrant as specified in its charter)
GOL INTELLIGENT AIRLINES INC.
(Translation of Registrant's name into English)
Praça Comandante Linneu Gomes, Portaria 3, Prédio 24
Jd. Aeroporto
04630-000 São Paulo, São Paulo
Federative Republic of Brazil
(Address of Regristrant's principal executive offices)
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F ______
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___
If "Yes" is marked, indicated below the file number assigned to the
registrant in connection with Rule 12g3-2(b):
(Free translation into English from the original previously issued in Portuguese)
Individual and consolidated
Interim financial information
GOL Linhas Aéreas Inteligentes S.A.
March 31, 2016
and report on review of interim financial information
GOL Linhas Aéreas Inteligentes S.A.
Individual and consolidated Interim financial information
March 31, 2016
|
|
Contents
|
|
|
|
Performance report
|
01
|
Report of the statutory audit committee (CAE)
|
07
|
Directors' statement on the interim financial information
|
08
|
Directors' statement on Independent auditor’s report on review of the interim financial information
|
0
9
|
Independent auditor’s report on review of the interim financial information
|
1
0
|
|
Capital
|
1
2
|
|
Individual interim financial information for the period ended March 31, 2016
|
|
Statements of financial position
|
1
3
|
Statements of operations
|
1
5
|
Statements of comprehensive loss
|
1
6
|
Statements of cash flows
|
1
7
|
Statements of changes in equity
|
1
8
|
Statements of value added
|
20
|
|
Consolidated interim financial information for the period ended March 31, 2016
|
|
Statements of financial position
|
2
1
|
Statements of operations
|
2
3
|
Statements of comprehensive loss
|
2
4
|
Statements of cash flows
|
2
5
|
Statements of changes in equity
|
2
7
|
Statements of value added
|
2
9
|
|
Notes to the interim financial information
|
30
|
Performance report
We announce GOL’s result for the first quarter of 2016, reflecting the adoption of measures to enhance the Company’s liquidity position and bring its capital structure in line with Brazil’s macroeconomic environment, which has been negatively impacted by political instability and consequent economic volatility. Since 2015, the Company has been working on several initiatives to overcome the recessionary environment, with the support of all its stakeholders: shareholders, banks, unsecured bondholders and suppliers, among others.
In the first three months of the year, we recorded net revenue from operations 8.3% higher than in the same period in 2015, reaching R$2,713.1 million.
Our recurring operating income in the first quarter of 2016 was R$224.6 million, representing an operational margin of 8.3%.
Non-recurring on the anticipated return of aircraft under finance lease contracts and gains on sale-leaseback transactions was R$212.6 million during the period.
Our cash position at March 31, 2016 was R$1,815.1 million, a decrease of 21.1% from year-end 2015, and was equivalent to 18.2% of our last twelve months (LTM) net revenues. Cash available was R$658.4 million (6.6% of LTM net revenue),
excluding the amount held by Smiles and restricted cash
.
Since the first quarter of 2015, we have been working on a number of initiatives to address issues relating to liquidity and capital structure. These include: (1)
flexibility in our aircraft delivery schedule
for 2016 and 2017, which decreased from 15 deliveries to 1 aircraft delivery - resulting up to R$555 million in cash flow to help fund the exchange offer for our US Dollar-demonimated bonds; (2) the advance ticket sales of up to R$1 billion to Smiles; (3) better supplier terms resulting in R$300 million per year of annual cash savings and; (4) changes in our route network, including the suspension of flights to eight destinations with an expected decrease year-over-year in the number of take-offs between 15% and 18%.
Furthermore, we are working on the following additional initiatives: (1) the renegotiation of
debentures issued in the domestic capital market with Brazilian banks
, with a possible extension of payment terms and waiver of contractual covenants; (2) negotiations with aircraft lessors to reduce our fleet by 20 aircraft, with the support of SkyWorks
Capital
; and (3) the improvement of our capital structure with the assistance of PJT Partners, through a private exchange offer to exchange up to US$781.4 million of our unsecured US Dollar-denominated bonds for new secured bonds.
We are confident that the completion of the ongoing restructuring plan will ensure that GOL emerges from the current political and economic crisis in the best competitive position.
We remain focused, in all aspects, on being the best Brazilian airline. A clear demonstration of this is our continuing leadership in on time performance in the domestic market in the first quarter of 2016, with a 95% rate. In March, we registered a rate of 97.6%.
Since January, we have performed significantly better with regard to damaged and misplaced luggage. In March, we achieved the lowest rate of occurrence per 1,000 boarded passengers in the last 36 months: 1.87 - this was the best indicator of our historical series, and represents a decrease of 31% compared to March 2015.
The 2016 Summer Olympic Games will be hosted in the city of Rio de Janeiro (taking place between August 5 and 21) as well as the Summer Paralympic Games (taking place between September 7 and 18) - the first time that they have been held in South America. Our route network for the event will include extra flights and timetable changes to meet the demand concentrated in Rio de Janeiro. In addition to these adjustments, since 2013, in advance of the 2014 World Cup, we have invested in evolving technology platforms to improve passenger experience, especially given the larger number of international passengers. For example, our self-service kiosks feature in addition to Portuguese, provide menus and operations in English, Spanish and French.
We would like to thank all our employees, investors and stakeholders for their support and commitment during the implementation of GOL’s restructuring plan. I feel confident that the Company will emerge strengthened from this restructuring phase.
Paulo Sérgio Kakinoff
CEO of GOL Linhas Aéreas Inteligentes S.A.
2
Operating and financial indicators
Traffic Data - GOL
|
1Q16
|
1Q15
|
% Var.
|
4Q15
|
% Var.
|
RPK GOL – Total
|
9,497
|
10,172
|
-6.6%
|
9,440
|
0.6%
|
RPK GOL - Domestic
|
8,396
|
8,920
|
-5.9%
|
8,415
|
-0.2%
|
RPK GOL - International
|
1,102
|
1,252
|
-12.0%
|
1,025
|
7.5%
|
ASK GOL – Total
|
12,262
|
13,033
|
-5.9%
|
12,518
|
-2.0%
|
ASK GOL – Domestic
|
10,856
|
11,308
|
-4.0%
|
11,071
|
-1.9%
|
ASK GOL - International
|
1,406
|
1,725
|
-18.5%
|
1,447
|
-2.9%
|
GOL Load Factor - Total
|
77.5%
|
78.1%
|
-0.6 p.p
|
75.4%
|
2.1 p.p
|
GOL Load Factor - Domestic
|
77.3%
|
78.9%
|
-1.6 p.p
|
76.0%
|
1.3 p.p
|
GOL Load Factor - International
|
78.4%
|
72.6%
|
5.8 p.p
|
70.8%
|
7.4 p.p
|
Operational Data
|
1Q16
|
1Q15
|
% Var.
|
4Q15
|
% Var.
|
Revenue Passengers - Pax on board ('000)
|
9,042.8
|
10,120.9
|
-10.7%
|
9,583.5
|
-5.6%
|
Aircraft Utilization (Block Hours/Day)
|
10.7
|
11.7
|
-8.2%
|
11.1
|
-3.2%
|
Departures
|
74,198
|
80,814
|
-8.2%
|
79,377
|
-6.5%
|
Average Stage Length (km)
|
978
|
951
|
2.8%
|
933
|
4.8%
|
Fuel consumption (mm liters)
|
373
|
402
|
-7.2%
|
391
|
-4.6%
|
Full-time employees at period end
|
15,798
|
16,825
|
-6.1%
|
16,472
|
-4.1%
|
Average Operating Fleet
|
131
|
130
|
0.5%
|
132
|
-0.8%
|
Financial Data
|
1Q16
|
1Q15
|
% Var.
|
4Q15
|
% Var.
|
Net YIELD (R$ cents)
|
25.68
|
21.90
|
17.3%
|
24.64
|
4.2%
|
Net PRASK (R$ cents)
|
19.89
|
17.09
|
16.4%
|
18.58
|
7.0%
|
Net RASK (R$ cents)
|
22.13
|
19.22
|
15.1%
|
21.19
|
4.4%
|
CASK (R$ cents)
|
18.53
|
18.03
|
2.8%
|
21.94
|
-15.6%
|
CASK ex-fuel (R$ cents)
|
12.36
|
12.00
|
3.0%
|
14.99
|
-17.6%
|
CASK (R$ cents) adjusted
4
|
20.26
|
18.09
|
12.0%
|
21.96
|
-7.7%
|
CASK ex-fuel (R$ cents) adjusted
4
|
14.09
|
12.06
|
16.9%
|
15.01
|
-6.1%
|
Average Exchange Rate
1
|
3.9022
|
2.8702
|
36.0%
|
3.8441
|
1.5%
|
End of period Exchange Rate
1
|
3.5589
|
3.2080
|
10.9%
|
3.9048
|
-8.9%
|
WTI (avg. per barrel, US$)
2
|
33.6
|
48.6
|
-30.8%
|
42.2
|
-20.2%
|
Price per liter Fuel (R$)
3
|
2.03
|
1.96
|
3.8%
|
2.22
|
-8.7%
|
Gulf Coast Jet Fuel Cost (average per liter, US$)
2
|
0.26
|
0.43
|
-39.1%
|
0.34
|
-22.7%
|
Bloomberg; 3. Fuel expenses/liters consumed; 4. excluding non-recurring gain on the anticipated return of aircraft under finance lease contracts and sale-leaseback transaction
3
Domestic market – GOL
Domestic supply decreased by 4.0% in the quarter, reflecting the start of network adjustments in 2016, with the aim of reducing it between 5% and 8% over the year.
Domestic demand fell by 5.9% in 1Q16, leading to a load factor of 77.3%, a decrease of 1.6 p.p.
GOL transported 8.5 million passengers in the domestic market in the quarter, representing a decrease of 10.9% when compared to the same period in 2015. The Company maintained its leadership position in the number of transported passengers in Brazil’s domestic aviation market.
International market - GOL
In the international market, supply was reduced by 18.5% in 1Q16 due to network adjustments over the year. Demand fell by 12.0% in the quarter, registering a load factor of 78.4%, 5.8 p.p. higher.
During the first quarter of 2016, GOL transported 541.7 thousand passengers in the international market, 6.5% lower compared to the same period in 2015.
Volume of departures and Total seats - GOL
The volume of departures in the overall system was reduced by 16.6% and 8.2% in the month of March and the quarter, respectively. The total number of seats available to the market fell 16.5% in the month and 8.2% in 1Q16.
PRASK and Yield
Net PRASK grew by 16.4% and 7.0% and yield increased by 17.3% and 4.2%, in comparison with 1Q15 and 4Q15, respectively.
Operational fleet and fleet plan
Fleet plan
|
2016
|
2017
|
2018
|
>2018
|
Total
|
Fleet (End of Period)
|
125
|
125
|
128
|
|
|
Aircraft Commitments (R$ million)*
|
607.9
|
-
|
1,952.3
|
50,511.8
|
53,072.0
|
Pre-Delivery Payments (R$ million)
|
-
|
313.3
|
528.1
|
5,880.9
|
6,722.3
|
*Considers aircraft list price
Final
|
1Q16
|
1Q15
|
Var.
|
4Q15
|
Var.
|
Boeing 737-NG Family
|
143
|
140
|
+3
|
144
|
-1
|
737-800 NG
|
107
|
105
|
+2
|
107
|
-
|
737-700 NG
|
36
|
35
|
+1
|
37
|
-1
|
Opening for rent Type
|
1Q16
|
1Q15
|
Var.
|
4Q15
|
Var.
|
Financial Leasing (737-NG)
|
39
|
45
|
-6
|
46
|
-7
|
Operating Leasing
|
104
|
95
|
+9
|
98
|
+6
|
*Non-operational
4
At the end of 1Q16, out of a total of 143 Boeing 737-NG aircraft, GOL was operating 136 aircraft on its routes. Of the 7 remaining aircraft, 2 were in the process of being returned to the lessors and 5 were sent via sub
-
leased to other airlines.
GOL has 104 aircraft under operating leases and 39 under finance leases, 35 of which have a purchase option for when their leasing contracts expire.
The average age of the fleet was 7.7 years at the end of 1Q16. In order to maintain this
average
low , the Company has 122 firm aircraft acquisition orders with Boeing
Capex
GOL posted a negative net investment of R$207 million in the quarter,
in light of
the return of R$374 million in PDPs. For more details on changes in property, plant and equipment, see Note 15 of the interim financial statements.
2016 Guidance
2016 Financial Guidance
|
Range
|
1Q16 Results
|
From
|
To
|
Total supply (ASK)
|
-5%
|
-8%
|
-6%
|
Total seats
|
-15%
|
-18%
|
-8%
|
Total volume of departures
|
-15%
|
-18%
|
-8%
|
|
|
|
|
|
Given the impact of the economic scenario, the Company’ guidance may be revised in order to incorporate the evolution of its operating and financial performance and any eventual changes in interest rate, exchange rate, GDP and WTT and Brent oil price trends.
5
Report of the statutory audit committee (CAE)
The Statutory Audit Committee of GOL LINHAS AÉREAS INTELIGENTES S.A., in accordance with its bylaws and legal provisions, examined the interim financial information for the quarter ended March 31, 2016. Based on the procedures performed, considering also the independent auditor’s report - Ernst & Young Auditores Independentes S.S., and the information and explanations received during the period, opines that these documents are able to be appreciated by the Board Shareholder’s Meeting.
São Paulo, May 11, 2016.
Richard F. Lark
Member of the Statutory Audit Committee
Germán Pasquale Quiroga Vilardo
Member of the Statutory Audit Committee
Antônio Kandir
Member of the Statutory Audit Committee
6
Directors' statement on the interim financial information
In accordance with CVM Rule nº480/09, the Directors declare that discussed, reviewed and agreed with the interim financial information for the quarter ended March 31, 2016.
São Paulo, May 11, 2016
.
Paulo Sérgio Kakinoff
Chief Executive Officer
Edmar Prado Lopes Neto
Vice President and Investor Relations Officer
7
Directors' statement on the interim financial information
In accordance with Instrução CVM 480/09, the Directors declare that discussed, reviewed and agreed with the report on review of interim financial information for the quarter ended March 31, 2016.
São Paulo, May 11, 2016
.
Paulo Sérgio Kakinoff
Chief Executive Officer
Edmar Prado Lopes Neto
Vice President and Investor Relations Officer
8
(A free translation from the original in Portuguese into English)
Report on review of interim financial information
To
The Shareholders, Board of Directors and Officers
Gol Linhas Aéreas Inteligentes S.A.
São Paulo - SP
Introduction
We have reviewed the individual and consolidated interim financial information of Gol Linhas Aéreas Inteligentes S.A. (the “Company”), included in the Quarterly Information (ITR) for the three-month period ended March 31, 2016, which comprises the balance sheets as at March 31, 2016 and the related interim statements of operations, comprehensive income (loss), changes in equity and cash flows for the three-month period then ended, and explanatory notes.
Management is responsible for the preparation and presentation of these individual interim financial information in accordance with the Technical Pronouncement CPC 21 (R1) – Interim Financial Reporting (“CPC 21”) and the consolidated interim financial information in accordance with CPC 21 and International Financial Reporting Standard IAS 34 – Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) (“IAS 34”), as well as for the presentation of these information in compliance with the rules issued by the Brazilian Securities Commission (“CVM”), applicable to the preparation of Quarterly Information (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.
Scope of review
We conducted our review in accordance with Brazilian and International Standards on Review Engagements (NBC TR 2410 – Review of Interim Financial
Information Performed by the Independent Auditor of the Entity, 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 Brazilian and International 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 and 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 Quarterly Information referred above are not prepared, in all material respects, in accordance with CPC 21 and IAS 34 applicable to the preparation of Quarterly Information (ITR), and presented in compliance with the rules issued by the CVM.
Other matters
Statements of value added
We have also reviewed the individual and consolidated statements of value added for the three-month period ended March 31, 2016, prepared under the responsibility of the Company’s management, the presentation of which in the interim financial information is required by the rules from CVM, applicable to preparation of Quarterly Information (ITR), and as supplementary information for IFRS, which do not require a statement of value added presentation. These statements have been subject to the same review procedures previously described above and, based on our review, nothing has come to our attention that
causes us believe that the statements of value added were not prepared, in all significant respects, in relation to the overall interim individual and consolidated financial information.
São Paulo, May 11, 2016.
ERNST & YOUNG
Auditores Independentes S.S.
CRC-2SP015199/O-6
Luiz Carlos Passetti
Accountant CRC-1SP144343/O-3
9
Number of shares
|
Current Year
|
03/31/2016
|
Paid-in capital
|
5,035,037,140
|
Preferred shares
|
203,383,968
|
Total
|
5,238,421,108
|
|
|
Treasury shares
|
1,495,120
|
Total
|
1,495,120
|
10
|
Individual
Interim financial information / Statements of
Financial
Position –
Assets
(In thousands
of Brazilian Reais –
R$)
|
Line code
|
Line item
|
Current Year 03/31/2016
|
Prior Year 12/31/2015
|
1
|
Total assets
|
2,847,000
|
2,842,000
|
1.01
|
Current assets
|
372,000
|
683,000
|
1.01.01
|
Cash and cash equivalents
|
168,000
|
387,000
|
1.01.02
|
Short-term investments
|
160,000
|
195,000
|
1.01.06
|
Recoverable taxes
|
8,000
|
6,000
|
1.01.08
|
Other current assets
|
36,000
|
95,000
|
1.01.08.01
|
Noncurrent assets held for
sale
|
-
|
59,000
|
1.01.08.01.01
|
Restricted cash
|
-
|
59,000
|
1.01.08.03
|
Others
|
36,000
|
36,000
|
1.02
|
Noncurrent assets
|
2,475,000
|
2,159,000
|
1.02.01
|
Long-term assets
|
1,502,000
|
963,000
|
1.02.01.06
|
Taxes
|
24,000
|
25,000
|
1.02.01.06.01
|
Deferred taxes
|
8,000
|
8,000
|
1.02.01.06.02
|
Recoverable taxes
|
16,000
|
17,000
|
1.02.01.08
|
Related-party transactions
|
1,419,000
|
883,000
|
1.02.01.08.04
|
Other related-party
transactions
|
1,419,000
|
883,000
|
1.02.01.09
|
Other noncurrent assets
|
59,000
|
55,000
|
1.02.01.09.03
|
Deposits
|
34,000
|
31,000
|
1.02.01.09.04
|
Restricted cash
|
25,000
|
24,000
|
1.02.02
|
Investments
|
282,000
|
213,000
|
1.02.03
|
Property, plant and equipment
|
691,000
|
983,000
|
11
|
Individual
Interim financial information / Statements of
Financial
Position –
Liabilities
(In thousands
of Brazilian Reais – R$)
|
Line code
|
Line item
|
Current Year
03/31/2016
|
Prior Year
12/31/2015
|
2
|
Total liabilities and stockholder’s
equity
|
2,847,000
|
2,842,000
|
2.01
|
Current liabilities
|
66,000
|
136,000
|
2.01.02
|
Suppliers
|
4,000
|
7,000
|
2.01.04
|
Short-term debt
|
62,000
|
128,000
|
2.01.05
|
Other liabilities
|
-
|
1,000
|
2.01.05.02
|
Others
|
-
|
1,000
|
2.01.05.02.04
|
Other liabilities
|
-
|
1,000
|
2.02
|
Noncurrent liabilities
|
6,633,000
|
7,253,000
|
2.02.01
|
Long-term debt
|
3,862,000
|
4,239,000
|
2.02.02
|
Other non-current liabilities
|
25,000
|
27,000
|
2.02.02.01
|
Liabilities with related-party
transactions
|
25,000
|
27,000
|
2.02.04
|
Provisions
|
2,746,000
|
2,987,000
|
2.02.04.02
|
Others provisions
|
2,746,000
|
2,987,000
|
2.02.04.02.04
|
Loss on investment
|
2,746,000
|
2,987,000
|
2.03
|
Shareholder’s equity
|
(3,852,000)
|
(4,547,000)
|
2.03.01
|
Issued capital
|
3,038,000
|
3,038,000
|
2.03.01.01
|
Capital stock
|
3,080,000
|
3,080,000
|
2.03.01.02
|
Share issuance costs
|
(42,000)
|
(42,000)
|
2.03.02
|
Capital reserves
|
183,000
|
179,000
|
2.03.02.01
|
Premium on issue of shares
|
28,000
|
28,000
|
2.03.02.02
|
Special reserve
|
71,000
|
71,000
|
2.03.02.05
|
Treasury shares
|
(22,000)
|
(23,000)
|
2.03.02.07
|
Treasury shares
|
106,000
|
103,000
|
2.03.05
|
Accumulated losses
|
(7,572,000)
|
(8,275,000)
|
2.03.06
|
Equity valuation adjustments
|
499,000
|
511,000
|
2.03.06.01
|
Equity valuation adjustments
|
(191,000)
|
(179,000)
|
2.03.06.02
|
Gains on change in investment
|
690,000
|
690,000
|
12
|
Individual
Interim financial information / Statements
of
Operations
(In thousands
of Brazilian Reais – R$)
|
|
|
Current Year
|
Prior Year
|
Line code
|
Line item
|
01/01/2016 to 03/31/2016
|
01/01/2015 to
03/31/2015
|
3.04
|
Operating expenses/revenues
|
535,000
|
(274,000)
|
3.04.02
|
General and administrative
expenses
|
(2,000)
|
(3,000)
|
3.04.04
|
Other operating income, net
|
213,000
|
8,000
|
3.04.06
|
Equity results
|
324,000
|
(279,000)
|
3.05
|
Income (loss) before financial result,
net
|
535,000
|
(274,000)
|
3.06
|
Financial result
|
168,000
|
(424,000)
|
3.06.01
|
Financial income
|
263,000
|
3,000
|
3.06.01.01
|
Financial income
|
23,000
|
3,000
|
3.06.01.02
|
Exchange rate variation, net
|
240,000
|
-
|
3.06.02
|
Financial expenses
|
(95,000)
|
(427,000)
|
3.06.02.01
|
Financial expenses
|
(95,000)
|
(56,000)
|
3.06.02.02
|
Exchange rate variation, net
|
-
|
(371,000)
|
3.07
|
Loss before income taxes
|
703,000
|
(698,000)
|
3.08
|
Income taxes
|
-
|
(7,000)
|
3.08.01
|
Current income taxes
|
-
|
(5,000)
|
3.08.02
|
Deferred income taxes
|
-
|
(2,000)
|
3.09
|
Result from continuing operations,
net
|
703,000
|
(705,000)
|
3.11
|
Net income (loss) for the
period
|
703,000
|
(705,000)
|
3.99
|
Income (loss) per share –
(Reais/share)
|
|
|
3.99.01
|
Basic loss per share
|
|
|
3.99.01.01
|
Common
|
0.05800
|
(0.06200)
|
3.99.01.02
|
Preferred
|
2.03400
|
(2.37800)
|
3.99.02
|
Diluted loss per share
|
|
|
3.99.02.01
|
Common
|
0.05800
|
(0.06200)
|
3.99.02.02
|
Preferred
|
2.03400
|
(2.37800)
|
13
|
Individual
Interim financial information / Statements
of
Comprehensive Loss
(In thousands
of Brazilian Reais – R$)
|
|
|
Current Year
|
Prior Year
|
Line code
|
Line item
|
01/01/2016 to
03/31/2016
|
01/01/2015 to
03/31/2015
|
4.01
|
Net income (loss) for the period
|
703,000
|
(705,000)
|
4.02
|
Other comprehensive income (loss)
|
(12,000)
|
(39,000)
|
4.02.
01
|
Cash flow hedges
|
(18,000)
|
(60,000)
|
4.02.0
2
|
Tax effect
|
6,000
|
21,000
|
4.03
|
Total comprehensive income (loss) for the
period
|
691,000
|
(744,000)
|
14
|
Individual
Interim financial information / Statements of
Cash Flows –
Indirect Method
(In thousands
of Brazilian Reais – R$)
|
|
|
Current Year
|
Prior Year
|
Line code
|
Line item
|
01/01/2016 to 03/31/2016
|
01/01/2015 to
03/31/2015
|
6.01
|
Net cash used in operating
activities
|
133,000
|
117,000
|
6.01.01
|
Cash flows from operating
activities
|
(606,000)
|
745,000
|
6.01.01.02
|
Deferred taxes
|
-
|
2,000
|
6.01.01.03
|
Equity results
|
(324,000)
|
279,000
|
6.01.01.04
|
Share-based payments
|
1,000
|
1,000
|
6.01.01.05
|
Exchange and monetary variations,
net
|
(263,000)
|
472,000
|
6.01.01.06
|
Interest on debt and financial
leases
|
71,000
|
52,000
|
6.01.01.07
|
Interest paid
|
(149,000)
|
(61,000)
|
6.01.01.08
|
Income tax paid
|
(1,000)
|
-
|
6.01.01.10
|
Write-off property, plant and equipment and
intangible assets
|
59,000
|
-
|
6.01.02
|
Changes assets and liabilities
|
36,000
|
77,000
|
6.01.02.02
|
Financial applications used for
trading
|
26,000
|
57,000
|
6.01.02.03
|
Deposits
|
(3,000)
|
(3,000)
|
6.01.02.05
|
Other assets
|
-
|
18,000
|
6.01.02.06
|
Suppliers
|
(3,000)
|
-
|
6.01.02.07
|
Taxes payable
|
1,000
|
2,000
|
6.01.02.08
|
Other obligations
|
15,000
|
3,000
|
6.01.03
|
Others
|
703,000
|
(705,000)
|
6.01.03.01
|
Net income (loss) for the
period
|
703,000
|
(705,000)
|
6.02
|
Net cash used in investing
activities
|
(356,000)
|
(40,000)
|
6.02.01
|
Advances for future capital
increase
|
-
|
(3,000)
|
6.02.02
|
Related-party transactions
|
(647,000)
|
-
|
6.02.03
|
Restricted cash
|
58,000
|
(4,000)
|
6.02.06
|
Advances for property, plant and equipment
acquisition
|
233,000
|
(33,000)
|
6.03
|
Net cash generated by financing
activities
|
-
|
4,000
|
6.03.03
|
Related-party transactions
|
-
|
4,000
|
6.04
|
Exchange and monetary variations,
net
|
4,000
|
-
|
6.05
|
Net increase (decrease) in cash and cash
equivalents
|
(219,000)
|
81,000
|
6.05.01
|
Cash and cash equivalents at beginning of
the period
|
387,000
|
459,000
|
6.05.02
|
Cash and cash equivalents at end of the
period
|
168,000
|
540,000
|
15
|
Individual
Interim financial information / Statements of Changes in
Equity
From 01/01/2016
to 03/31/2016
(In thousands
of Brazilian Reais – R$)
|
Line code
|
Line item
|
Capital
stock
|
Capital reserves, options granted and
treasury shares
|
Accumulated
losses
|
Other comprehensive
loss
|
Total
equity
(deficit)
|
5.01
|
Opening
balance
|
3,038,000
|
870,000
|
(8,275,000)
|
(179,000)
|
(4,546,000)
|
5.03
|
Adjusted
balance
|
3,038,000
|
870,000
|
(8,275,000)
|
(179,000)
|
(4,546,000)
|
5.04
|
Stockholder’s capital
transactions
|
-
|
3,000
|
-
|
-
|
3,000
|
5.04.08
|
Stock
options exercised
|
-
|
3,000
|
-
|
-
|
3,000
|
5.05
|
Total
comprehensive loss
|
-
|
-
|
703,000
|
(12,000)
|
691,000
|
5.05.01
|
Net loss
for the
period
|
-
|
-
|
703,000
|
-
|
703,000
|
5.05.02
|
Other
comprehensive loss
|
-
|
-
|
-
|
(12,000)
|
(12,000)
|
5.05.02.06
|
Other
comprehensive result, net
|
-
|
-
|
-
|
(12,000)
|
(12,000)
|
5.07
|
Closing
balance
|
3,038,000
|
873,000
|
(7,572,000)
|
(191,000)
|
(3,852,000)
|
16
|
Individual
Interim financial information / Statements of Changes in
Equity
From 01/01/2015
to 03/31/2015
(In thousands
of Brazilian Reais – R$)
|
Line code
|
Line item
|
Capital
stock
|
Capital reserves, options granted and
treasury shares
|
Accumulated
losses
|
Other comprehensive loss
|
Total
equity
|
5.01
|
Opening
balance
|
2,582,000
|
853,000
|
(3,815,000)
|
(139,000)
|
(519,000)
|
5.03
|
Adjusted
balance
|
2,582,000
|
853,000
|
(3,815,000)
|
(139,000)
|
(519,000)
|
5.04
|
Stockholder’s capital
transactions
|
-
|
5,000
|
-
|
-
|
5,000
|
5.04.08
|
Share-based payments
|
-
|
3,000
|
-
|
-
|
3,000
|
5.04.10
|
Gains on
change on investment
|
-
|
2,000
|
-
|
-
|
2,000
|
5.05
|
Total
comprehensive loss
|
-
|
-
|
(705,000)
|
(39,000)
|
(744,000)
|
5.05.01
|
Net loss
for the
period
|
-
|
-
|
(705,000)
|
-
|
(705,000)
|
5.05.02
|
Other
comprehensive loss
|
-
|
-
|
-
|
(39,000)
|
(39,000)
|
5.05.02.06
|
Other
comprehensive result, net
|
-
|
-
|
-
|
(39,000)
|
(39,000)
|
5.07
|
Closing
balance
|
2,582,000
|
858,000
|
(4,520,000)
|
(178,000)
|
(1,258,000)
|
17
|
Individual
Interim financial information / Statements of
Value Added
(In thousands
of Brazilian Reais – R$)
|
|
|
Current Year
|
Prior Year
|
Line code
|
Line item
|
01/01/2016 to 03/31/2016
|
01/01/2015 to
03/31/2015
|
7.01
|
Revenue
|
213,000
|
8,000
|
7.01.02
|
Other
revenue
|
213,000
|
8,000
|
7.01.02.02
|
Other
operating income
|
213,000
|
8,000
|
7.02
|
Acquired
from third parties
|
(1,000)
|
(1,000)
|
7.02.02
|
Material, power, third-party services and
other
|
(1,000)
|
(1,000)
|
7.03
|
Gross
value added
|
212,000
|
7,000
|
7.05
|
Added
value produced
|
212,000
|
7,000
|
7.06
|
Value
added received in transfer
|
361,000
|
(277,000)
|
7.06.01
|
Equity
in subsidiaries
|
324,000
|
(279,000)
|
7.06.02
|
Financial income
|
37,000
|
2,000
|
7.07
|
Total
wealth for distribution
|
573,000
|
(270,000)
|
7.08
|
Wealth
for distribution
|
573,000
|
(270,000)
|
7.08.01
|
Employees
|
1,000
|
1,000
|
7.08.01.01
|
Salaries
|
1,000
|
1,000
|
7.08.02
|
Taxes
|
-
|
7,000
|
7.08.02.01
|
Federal
taxes
|
-
|
7,000
|
7.08.03
|
Third-party capital
remuneration
|
(131,000)
|
427,000
|
7.08.03.01
|
Interest
|
(131,000)
|
427,000
|
7.08.04
|
Return
on own capital
|
703,000
|
(705,000)
|
7.08.04.03
|
Income (loss) for the
period
|
703,000
|
(705,000)
|
18
|
Consolidated Financial Information / Statements of
Financial Position – Assets
(In thousands of Brazilian Reais – R$)
|
Line code
|
Line item
|
Current Year 03/31/2016
|
Prior Year 12/31/2015
|
1
|
Total assets
|
9,544,000
|
10,369,000
|
1.01
|
Current assets
|
2,338,000
|
2,462,000
|
1.01.01
|
Cash and cash equivalents
|
967,000
|
1,072,000
|
1.01.02
|
Short-term investments
|
435,000
|
551,000
|
1.01.02.01
|
Short-term investments at fair value
|
435,000
|
551,000
|
1.01.02.01.03
|
Restricted cash
|
-
|
59,000
|
1.01.02.01.04
|
Short-term investments
|
435,000
|
492,000
|
1.01.03
|
Trade receivables
|
514,000
|
463,000
|
1.01.04
|
Inventories
|
185,000
|
199,000
|
1.01.06
|
Recoverable taxes
|
42,000
|
58,000
|
1.01.08
|
Other current assets
|
195,000
|
11
9
,000
|
1.01.08.03
|
Others
|
195,000
|
119,000
|
1.01.08.03.03
|
Other credits
|
195,000
|
117,000
|
1.01.08.03.04
|
Derivatives
|
-
|
2,000
|
1.02
|
Noncurrent assets
|
7,206,000
|
7,907,000
|
1.02.01
|
Long-term assets
|
1,774,000
|
1,917,000
|
1.02.01.06
|
Taxes
|
176,000
|
181,000
|
1.02.01.06.01
|
Deferred Taxes
|
104,000
|
108,000
|
1.02.01.06.02
|
Recoverable taxes
|
72,000
|
73,000
|
1.02.01.09
|
Other noncurrent assets
|
1,598,000
|
1,736,000
|
1.02.01.09.03
|
Restricted cash
|
413,000
|
676,000
|
1.02.01.09.04
|
Deposits
|
1,161,000
|
1,020,000
|
1.02.01.09.05
|
Other credits
|
24,000
|
40,000
|
1.02.02
|
Investments
|
14,000
|
18,000
|
1.02.03
|
Property, plant and equipment
|
3,702,000
|
4,257,000
|
1.02.03.01
|
Property, plant and equipment in operation
|
2,058,000
|
2,175,000
|
1.02.03.01.01
|
Other flight equipment
|
1,525,000
|
1,420,000
|
1.02.03.01.02
|
Advances for property, plant and equipment acquisition
|
417,000
|
624,000
|
1.02.03.01.04
|
Others
|
116,000
|
131,000
|
1.02.03.02
|
Property, plant and equipment under leasing
|
1,644,000
|
2,082,000
|
1.02.03.02.01
|
Property, plant and equipment under finance leases
|
1,644,000
|
2,082,000
|
1.02.04
|
Intangible
|
1,716,000
|
1,715,000
|
1.02.04.01
|
Intangible
|
1,174,000
|
1,172,000
|
1.02.04.02
|
Goodwill
|
542,000
|
542,000
|
19
|
Consolidated Financial Information / Statements of
Financial Position – Liabilities
(In thousands of Brazilian Reais – R$)
|
Line code
|
Line item
|
Current Year
03/31/2016
|
Prior Year 12/31/2015
|
2
|
Total liabilities and equity
|
9,544,000
|
10,369,000
|
2.01
|
Current liabilities
|
4,875,000
|
5,544,000
|
2.01.01
|
Salaries
|
218,000
|
251,000
|
2.01.01.02
|
Salaries
|
218,000
|
251,000
|
2.01.02
|
Suppliers
|
952,000
|
902,000
|
2.01.03
|
Taxes payable
|
136,000
|
119,000
|
2.01.04
|
Short-term debt
|
837,000
|
1,397,000
|
2.01.05
|
Other current liabilities
|
2,540,000
|
2,668,000
|
2.01.05.02
|
Others
|
2,540,000
|
2,668,000
|
2.01.05.02.04
|
Taxes and landing fees
|
293,000
|
314,000
|
2.01.05.02.05
|
Advance ticket sales
|
878,000
|
1,207,000
|
2.01.05.02.06
|
Mileage program
|
778,000
|
770,000
|
2.01.05.02.07
|
Advances from customers
|
218,000
|
13,000
|
2.01.05.02.08
|
Other current liabilities
|
213,000
|
223,000
|
2.01.05.02.09
|
Derivatives
|
160,000
|
141,000
|
2.01.06
|
Provisions
|
192,000
|
207,000
|
2.02
|
Noncurrent liabilities
|
8,241,000
|
9,148,000
|
2.02.01
|
Long-term debt
|
7,031,000
|
7,908,000
|
2.02.02
|
Other non-current liabilities
|
314,000
|
33
1
,000
|
2.02.02.02
|
Others
|
314,000
|
33
1
,000
|
2.02.02.02.03
|
Mileage program
|
221,000
|
221,000
|
2.02.02.02.05
|
Taxes payable
|
39,000
|
39,000
|
2.02.02.02.06
|
Other non-current liabilities
|
54,000
|
71,000
|
2.02.03
|
Deferred taxes
|
239,000
|
245,000
|
2.02.03.01
|
Deferred income tax and social Contribution
|
239,000
|
245,000
|
2.02.04
|
Provisions
|
657,000
|
664,000
|
2.03
|
Equity
|
(3,572,000)
|
(4,323,000)
|
2.03.01
|
Capital stock
|
2,925,000
|
2,925,000
|
2.03.01.01
|
Capital stock
|
3,080,000
|
3,080,000
|
2.03.01.02
|
Share issuance costs
|
(155,000)
|
(155,000)
|
2.03.02
|
Capital reserves
|
183,000
|
179,000
|
2.03.02.01
|
Capital reserves
|
28,000
|
28,000
|
2.03.02.02
|
Capital reserves
|
71,000
|
71,000
|
2.03.02.05
|
Treasury shares
|
(22,000)
|
(23,000)
|
2.03.02.07
|
Share-based payments reserve
|
106,000
|
103,000
|
2.03.05
|
Accumulated losses
|
(7,459,000)
|
(8,162,000)
|
2.03.06
|
Other comprehensive income
|
499,000
|
511,000
|
2.03.06.01
|
Equity valuation adjustments
|
(191,000)
|
(179,000)
|
2.03.06.02
|
Gains on change in investment
|
690,000
|
690,000
|
2.03.09
|
Non-controlling interests
|
280,000
|
224,000
|
20
|
Consolidated Financial Information / Statements of Operations
(In thousands of Brazilian Reais – R$)
|
|
Current Year
|
Prior Year
|
Line code
|
Line item
|
01/01/2016 to 03/31/2016
|
01/01/2015 to 03/31/2015
|
3.01
|
Net revenue
|
2,713,000
|
2,506,000
|
3.01.01
|
Passenger
|
2,439,000
|
2,228,000
|
3.01.02
|
Cargo and other
|
274,000
|
278,000
|
3.02
|
Cost of sales and/or services
|
(2,099,000)
|
(1,963,000)
|
3.03
|
Gross profit
|
614,000
|
543,000
|
3.04
|
Operating expenses
|
(177,000)
|
(388,000)
|
3.04.01
|
Sales expenses
|
(199,000)
|
(206,000)
|
3.04.01.01
|
Marketing expenses
|
(199,000)
|
(206,000)
|
3.04.02
|
General and administrative expenses
|
(187,000)
|
(189,000)
|
3.04.04
|
Other operating income
|
213,000
|
8,000
|
3.04.06
|
Equity results
|
(4,000)
|
(1,000)
|
3.05
|
Income before financial expense, net and income taxes
|
437,000
|
155,000
|
3.06
|
Financial income (expense), net
|
386,000
|
(867,000)
|
3.06.01
|
Financial income
|
725,000
|
140,000
|
3.06.01.01
|
Financial income
|
72,000
|
140,000
|
3.06.01.02
|
Exchange rate variation, net
|
653,000
|
-
|
3.06.02
|
Financial expenses
|
(339,000)
|
(1,007,000)
|
3.06.02.01
|
Exchange rate variation, net
|
-
|
(774,000)
|
3.06.02.02
|
Financial expenses
|
(339,000)
|
(233,000)
|
3.07
|
Loss before income taxes
|
823,000
|
(712,000)
|
3.08
|
Tax expenses
|
(66,000)
|
39,000
|
3.08.01
|
Current income taxes
|
(63,000)
|
(85,000)
|
3.08.02
|
Deferred income taxes
|
(3,000)
|
124,000
|
3.09
|
Net loss from continuing operations
|
757,000
|
(673,000)
|
3.11
|
Net loss attributable to equity
|
757,000
|
(673,000)
|
3.11.01
|
Net loss attributable to equity holders of the parent
|
703,000
|
(705,000)
|
3.11.02
|
Net loss attributable to non-controlling interests
|
54,000
|
32,000
|
3.99
|
Income (loss) per share – (Reais/share)
|
|
|
3.99.01
|
Basic loss per share
|
|
|
3.99.01.01
|
Common
|
0.05800
|
(0.06200)
|
3.99.01.02
|
Preferred
|
2.03400
|
(2.37800)
|
3.99.02
|
Diluted loss per share
|
|
|
3.99.02.01
|
Common
|
0.05800
|
(0.06200)
|
3.99.02.02
|
Preferred
|
2.03400
|
(2.37900)
|
21
|
Consolidated Interim financial information / Statements
of Comprehensive Loss
(In thousands of Brazilian Reais – R$)
|
|
|
Current Year
|
Prior Year
|
Line code
|
Line item
|
01/01/2016 to 03/31/2016
|
01/01/2015 to 03/31/2015
|
4.01
|
Net income (loss) for the period
|
757,000
|
(673,000)
|
4.02
|
Other comprehensive income (loss)
|
(12,000)
|
(39,000)
|
4.02.01
|
Cash flow hedges
|
(18,000)
|
(60,000)
|
4.02.02
|
Tax effect
|
6,000
|
21,000
|
4.03
|
Total comprehensive income (loss) for the period
|
745,000
|
(712,000)
|
4.03.01
|
Attributable to equity holders of the parent
|
691,000
|
(744,000)
|
4.03.02
|
Attributable to non-controlling parent interests
|
54,000
|
32,000
|
22
|
Consolidated
Interim financial information / Statements of
Cash Flows –
Indirect Method
(In thousands
of Brazilian Reais – R$)
|
|
|
Current Year
|
Prior Year
|
Line
code
|
Line
item
|
01/01/2016 to 03/31/2016
|
01/01/2015 to
03/31/2015
|
6.01
|
Net cash flows (used in) from operating
activities
|
(175,000)
|
520,000
|
6.01.01
|
Cash flows from operating
activities
|
(210,000)
|
1,216,000
|
6.01.01.01
|
Depreciation and amortization
|
115,000
|
100,000
|
6.01.01.02
|
Allowance for doubtful
accounts
|
4,000
|
6,000
|
6.01.01.03
|
Provisions for legal
proceedings
|
10,000
|
13,000
|
6.01.01.04
|
Provision (reversal) for inventory
obsolescence
|
(31,000)
|
-
|
6.01.01.05
|
Deferred taxes
|
3,000
|
(125,000)
|
6.01.01.06
|
Share-based payments
|
3,000
|
3,000
|
6.01.01.07
|
Exchange and monetary variations,
net
|
(561,000)
|
1,066,000
|
6.01.01.08
|
Interest on loans and financial
lease
|
183,000
|
141,000
|
6.01.01.09
|
Unrealized hedge results, net
|
7,000
|
5,000
|
6.01.01.12
|
Write-off property, plant and equipment and
intangible assets
|
51,000
|
4,000
|
6.01.01.13
|
Equity results
|
4,000
|
1,000
|
6.01.01.14
|
Provision for profit sharing
|
2,000
|
2,000
|
6.01.02
|
Changes assets and liabilities
|
(722,000)
|
(23,000)
|
6.01.02.01
|
Trade receivables
|
(55,000)
|
(102,000)
|
6.01.02.02
|
Short-term investments
|
(52,000)
|
251,000
|
6.01.02.03
|
Inventories
|
45,000
|
(24,000)
|
6.01.02.04
|
Deposits
|
(211,000)
|
(23,000)
|
6.01.02.05
|
Insurance and tax recoverable
|
17,000
|
-
|
6.01.02.06
|
Other assets (liabilities)
|
(62,000)
|
16,000
|
6.01.02.07
|
Suppliers
|
54,000
|
(8,000)
|
6.01.02.08
|
Advanced ticket sales
|
(329,000)
|
(189,000)
|
6.01.02.09
|
Derivatives
|
(4,000)
|
(52,000)
|
6.01.02.10
|
Advances from customers
|
205,000
|
91,000
|
6.01.02.11
|
Salaries, wages and benefits
|
(36,000)
|
34,000
|
6.01.02.12
|
Taxes and landing fees
|
(21,000)
|
(15,000)
|
6.01.02.13
|
Tax obligations
|
62,000
|
65,000
|
6.01.02.14
|
Provisions
|
(16,000)
|
32,000
|
6.01.02.15
|
Other Liabilities
|
(27,000)
|
8,000
|
6.01.02.16
|
Interest paid
|
(256,000)
|
(156,000)
|
6.01.02.17
|
Income tax paid
|
(44,000)
|
(23,000)
|
6.01.02.18
|
Mileage program
|
8,000
|
72,000
|
6.01.03
|
Others
|
757,000
|
(673,000)
|
6.01.03.01
|
Net income (loss) for the
period
|
757,000
|
(673,000)
|
6.02
|
Net cash flows (used in) from investing
activities
|
468,000
|
(268,000)
|
6.02.03
|
Restricted cash
|
322,000
|
(68,000)
|
6.02.04
|
Property, plant and equipment
|
(72,000)
|
(157,000)
|
6.02.05
|
Intangible assets
|
(7,000)
|
(9,000)
|
6.02.08
|
Advances for property, plant and equipment
acquisition, net
|
207,000
|
(39,000)
|
6.02.09
|
Short-term investments
|
18,000
|
5,000
|
|
|
Current Year
|
Prior Year
|
Line
code
|
Line
item
|
01/01/2016 to 03/31/2016
|
01/01/2015 to
03/31/2015
|
6.03
|
Net cash flows (used in) from financing
activities
|
(388,000)
|
(68,000)
|
6.03.01
|
Loan funding, net of issuance
costs
|
-
|
191,000
|
6.03.02
|
Loan payments
|
(252,000)
|
(172,000)
|
6.03.04
|
Capital increase
|
2,000
|
5,000
|
6.03.06
|
Finance lease payments
|
(140,000)
|
(92,000)
|
6.03.08
|
Dividend
|
2,000
|
-
|
6.04
|
Foreign exchange and monetary variations,
net
|
(10,000)
|
(127,000)
|
6.05
|
Net increase in cash and cash
equivalents
|
(105,000)
|
57,000
|
6.05.01
|
Cash and cash equivalents at beginning of
the period
|
1,072,000
|
1,899,000
|
6.05.02
|
Cash and cash equivalents at end of the
period
|
967,000
|
1,956,000
|
23
|
Consolidated Interim financial information / Statements of Changes in Equity
From 01/01/2016 to 03/12/2016
(In thousands of Brazilian Reais – R$)
|
Line code
|
Line item
|
Capital Stock
|
Capital reserves, options
granted and
treasury shares
|
Accumu-lated losses
|
Other Comprehen-
sive loss
|
Equity (deficit) attributable to equity holders of the parent
|
Non-controlling
Interests
|
Total
equity (deficit)
|
5.01
|
Opening balance
|
2,925,000
|
870,000
|
(8,162,000)
|
(179,000)
|
(4,546,000)
|
224,000
|
(4,322,000)
|
5.03
|
Adjusted balance
|
2,925,000
|
870,000
|
(8,162,000)
|
(179,000)
|
(4,546,000)
|
224,000
|
(4,322,000)
|
5.04
|
Stockholder’s capital transactions
|
-
|
3,000
|
-
|
-
|
3,000
|
2,000
|
5,000
|
5.04.06
|
Dividend distributed
|
-
|
-
|
-
|
-
|
-
|
2,000
|
2,000
|
5.04.08
|
Stock options
|
-
|
3,000
|
-
|
-
|
3,000
|
-
|
3,000
|
5.04.09
|
Capital increase for exercise of stock option
|
-
|
-
|
-
|
-
|
-
|
2,000
|
2,000
|
5.04.10
|
Gains on change in investment
|
-
|
-
|
-
|
-
|
-
|
(2,000)
|
(2,000)
|
5.05
|
Total comprehensive result
|
-
|
-
|
703,000
|
(12,000)
|
691,000
|
54,000
|
745,000
|
5.05.01
|
Net income for the
period
|
-
|
-
|
703,000
|
-
|
703,000
|
54,000
|
757,000
|
5.05.02
|
Other comprehensive result
|
-
|
-
|
-
|
(12,000)
|
(12,000)
|
-
|
(12,000)
|
5.05.02.06
|
Other comprehensive results, net
|
-
|
-
|
-
|
(12,000)
|
(12,000)
|
-
|
(12,000)
|
5.07
|
Closing balance
|
2,925,000
|
873,000
|
(7,459,000)
|
(191,000)
|
(3,852,000)
|
280,000
|
(3,572,000)
|
24
|
Consolidated
Interim financial information / Statements of Changes in
Equity
From 01/01/2015
to 03/31/2015
(In thousands
of Brazilian Reais – R$)
|
Line code
|
Line item
|
Capital Stock
|
Capital reserves, options
granted and
treasury shares
|
Accumulated losses
|
Other Comprehensive loss
|
Consolidated Equity
|
Non-controlling
Interests
|
Total consolidated
equity
|
5.01
|
Opening
balance
|
2,469,000
|
853,000
|
(3,701,000)
|
(139,000)
|
(518,000)
|
185,000
|
(333,000)
|
5.03
|
Adjusted
balance
|
2,469,000
|
853,000
|
(3,701,000)
|
(139,000)
|
(518,000)
|
185,000
|
(333,000)
|
5.04
|
Stockholder’s capital transactions
|
-
|
5,000
|
-
|
-
|
5,000
|
3,000
|
8,000
|
5.04.08
|
Share-based payments
|
-
|
3,000
|
-
|
-
|
3,000
|
-
|
3,000
|
5.04.09
|
Stock
options exercised
|
-
|
-
|
-
|
-
|
-
|
5,000
|
5,000
|
5.04.10
|
Gains on
change on investment
|
-
|
2,000
|
-
|
-
|
2,000
|
(2,000)
|
-
|
5.05
|
Total
comprehensive (loss) income
|
-
|
-
|
(705,000)
|
(40,000)
|
(745,000)
|
32,000
|
(713,000)
|
5.05.01
|
Net loss
for the
period
|
-
|
-
|
(705,000)
|
-
|
(705,000)
|
32,000
|
(673,000)
|
5.05.02
|
Other
comprehensive income (loss)
|
-
|
-
|
-
|
(40,000)
|
(40,000)
|
-
|
(40,000)
|
5.05.02.06
|
Other
comprehensive results, net
|
-
|
-
|
-
|
(40,000)
|
(40,000)
|
-
|
(40,000)
|
5.07
|
Closing
balance
|
2,469,000
|
858,000
|
(4,406,000)
|
(179,000)
|
(1,258,000)
|
220,000
|
(1,038,000)
|
25
|
Consolidated
Interim financial information / Statements of
Value
Added
(In thousands
of Brazilian Reais –
R$)
|
|
|
Current Year
|
Prior Year
|
Line code
|
Line item
|
01/01/2016 to 03/31/2016
|
01/01/2015 to
03/31/2015
|
7.01
|
Revenue
|
3,105,000
|
2,657,000
|
7.01.02
|
Other revenue
|
3,103,000
|
2,658,000
|
7.01.02.01
|
Passengers, cargo and other
|
2,890,000
|
2,650,000
|
7.01.02.02
|
Other operating income
|
213,000
|
8,000
|
7.01.04
|
Allowance for doubtful
accounts
|
2,000
|
(1,000)
|
7.02
|
Acquired from third parties
|
(1,676,000)
|
(1,625,000)
|
7.02.02
|
Material, power, third-party services and
other
|
(773,000)
|
(693,000)
|
7.02.04
|
Other
|
(903,000)
|
(932,000)
|
7.02.04.01
|
Suppliers of fuel and
lubricants
|
(774,000)
|
(802,000)
|
7.02.04.02
|
Aircraft insurance
|
(8,000)
|
(6,000)
|
7.02.04.03
|
Sales and advertising
|
(121,000)
|
(124,000)
|
7.03
|
Gross value added
|
1,429,000
|
1,032,000
|
7.04
|
Retentions
|
(115,000)
|
(100,000)
|
7.04.01
|
Depreciation, amortization and
exhaustion
|
(115,000)
|
(100,000)
|
7.05
|
Added value produced
|
1,314,000
|
932,000
|
7.06
|
Value added received in
transfer
|
870,000
|
139,000
|
7.06.01
|
Equity in subsidiaries
|
(4,000)
|
(1,000)
|
7.06.02
|
Financial income
|
874,000
|
140,000
|
7.07
|
Total wealth for distribution
|
2,184,000
|
1,071,000
|
7.08
|
Wealth for distribution
|
2,184,000
|
1,071,000
|
7.08.01
|
Employees
|
415,000
|
384,000
|
7.08.01.01
|
Salaries
|
343,000
|
313,000
|
7.08.01.02
|
Benefits
|
45,000
|
45,000
|
7.08.01.03
|
F.G.T.S.
|
27,000
|
26,000
|
7.08.02
|
Taxes
|
216,000
|
137,000
|
7.08.02.01
|
Federal taxes
|
207,000
|
130,000
|
7.08.02.02
|
State taxes
|
8,000
|
7,000
|
7.08.02.03
|
Municipal taxes
|
1,000
|
-
|
7.08.03
|
Third-party capital
remuneration
|
796,000
|
1,223,000
|
7.08.03.01
|
Interest
|
462,000
|
1,003,000
|
7.08.03.02
|
Rent
|
321,000
|
215,000
|
7.08.03.03
|
Other
|
13,000
|
5,000
|
7.08.03.03.01
|
Other
|
13,000
|
5,000
|
7.08.04
|
Capital remuneration
|
757,000
|
(673,000)
|
7.08.04.03
|
Loss for the period
|
703,000
|
(705,000)
|
7.08.04.04
|
Non-controlling interest
|
54,000
|
32,000
|
26
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
1.
General information
Gol
Linhas Aéreas Inteligentes S.A. (“Company” or “GLAI”) is a publicly-listed
company established on March 12, 2004, in accordance with the Brazilian
Corporate Laws. The Company is engaged in controlling its subsidiaries: (i) VRG
Linhas Aéreas S.A. (“VRG”), which essentially explores (a) the regular and
non-regular flight transportation services of passengers, cargo and mailbags,
domestically or internationally, according to the concessions granted by the
competent authorities; and (b) complementary activities of flight transport
services provided in its bylaws; and (ii) Smiles S.A., which mainly operates (a)
the development and management of its own or third party’s customer loyalty
program, and (b) sale of redemption rights of awards related to the loyalty
program.
Additionally, the Company is the direct parent Company of the
wholly-owned subsidiaries GAC Inc. (“GAC”), Gol Finance (“Finance”), Gol LuxCo
S.A. (“Gol LuxCo”), Gol Dominicana Lineas Aereas SAS (“Gol Dominicana”) and
indirect parent Company of Webjet Linhas Aéreas S.A.
("Webjet").
The
Company’s registered Office is at Praça Comandante Linneu Gomes, s/n, portaria
3, prédio 24, Jardim Aeroporto, São Paulo, Brazil.
The
Company’s shares are traded on BM&FBOVESPA and on the New York Stock
Exchange (“NYSE”). The Company adopted Differentiated Corporate Governance
Practices of Level 2 from BM&FBOVESPA and is included in the Special
Corporate Governance Stock Index (“IGC”) and the Special Tag Along Stock Index
(“ITAG”), which were created to identify companies committed to the
differentiated corporate governance practices.
1.1 Short-term business plan
VRG has been
significantly affected by the devaluation of the Brazilian currency, as the
Company's costs denominated in U.S. dollars totaled approximately 50% in 2015,
and revenues totaled approximately 10%. Although the U.S. dollar depreciated
against the Brazilian real in the three-month period ended March 31, 2016. In
addition, factors such as the downturn in Brazilian GDP (economic downturn),
excessive industry overcapacity in the market and the worsening economic crisis
that impacted the demand from corporate and government clients have been an
adverse scenario to the Company's operations.
In this
context, the Company reassessed its business plan and incorporated strategies
that, once implemented, should be sufficient to ensure the continuity of the
Company’s operations. Among the short-term strategies, we highlight four pillars
to recover operating margin for 2016 and 2017, as well as to maintain the
solvency.
(a) Liquidity
initiatives: negotiations with customers and strategic suppliers to maintain
short term liquidity, including agreements to postpone aircraft delivery over
the next years, the advance airline tickets purchase agreement with Smiles and
the renegotiation of maturity with suppliers and anticipation of customers
receivable.
(b) The
Company changed its flight route network in order to focus on profitable routes
in operation. The change on the flight route network, which has already been
approved by the regulators, is effective since May 2016.
(c) As a
result of the changes of flight route network, the Company is also working on
readjusting and reducing the number of aircraft in operation, which will result
in a reduction in available seats, and align the supply and demand in the
domestic market. The Company's forecast is to return at least 19 aircraft. These
measures will lead to a substantial decrease in maintenance costs for the
current fleet. These measures aim to readjust the Company's structure to
sustainable levels.
27
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
(d) Adjustment
of indebtedness and leases with the purpose of reviewing the amounts related to
lease agreements that are part of the Company's indebtedness. For the
implementation of these initiatives, the Company hired Sky Works to review its
lease agreements. Additionally, in the three-month period ended March 31, 2016,
the Company early ended the financial lease agreements of 6 aircraft, converting
in short- and medium term operating lease agreements, as described in Note
15.
It is
highlight that, even with the business plan presenting actions that are likely
to be implemented, the uncertain political and economic scenario in Brazil may
impact the effectiveness of the expected return. Additionally, the high
volatility of macroeconomic variables raises uncertainties that could compromise
the generation of future results and the maintenance of the cash
position.
The Company’s
Management believes that the business plan prepared, submitted and approved by
the Board of Directors on February 18, 2016 shows strong elements of the
Company´s going concern. Management believes that its plans are feasible and
that, once completed, should lead the Company to the level of strength required
to respond more effectively the high volatility of the economic conditions
and/or adverse events. Management believes that the non-implementation of these
measures can compromise the profitability and solvency of the operation and thus
reinforces its commitment to implement all the necessary measures to ensure the
implementation of the plan and implement the necessary efforts to ensure the
expected return.
2.
Approval and summary of significant accounting policies applied in
preparing the interim financial information
The
interim financial information - ITR were authorized for issuance at the Board of
Directors’ meeting held on May 11, 2016.
28
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
2.1.
Basis of consolidation
The
individual and consolidated interim financial information – ITR was prepared for
the three-month period ended on March 31, 2016 in accordance with International
Accounting Standards (“IAS”) 34, and with corresponding Brazilian technical
pronouncements, CPC (21).
The
consolidated interim financial information – ITR was prepared based on
historical cost, except for certain financial assets and liabilities measured at
fair value and investments measure through the equity method.
The
individual and consolidated interim financial information – ITR do not include
all the information and disclosure items required in the consolidated annual
financial statements and, therefore, it must be read along with the individual
and consolidated financial statements from the year ended December 31, 2015 and
approved on March 28, 2016, which were prepared in accordance with Brazilian
accounting practices and IFRS. There were no changes in accounting policies
adopted during the period from December 31, 2015 to March 31, 2016, except for
the adoption of new standards, amendments and interpretations described in Note
2.2. The Company has not early adopted any standard, interpretation or amendment
that has been issued but is not yet applicable.
The
shareholder’s equity individual and consolidated interim financial information –
ITR do not present differences on its composition, except in respect of the
non-controlling interest in Smiles S.A., highlighted in the consolidated
equity.
Entity
|
Date of
constitution
|
Location
|
Operational
activity
|
Type of control
|
% equity
interest
|
03/31/2016
|
12/31/2015
|
Extensions (*):
|
|
|
|
|
|
GAC
|
03/23/2006
|
Cayman Islands
|
Aircraft
acquisition
|
Direct
|
100.0
|
100.0
|
Gol
Finance
|
03/16/2006
|
Cayman Islands
|
Financial funding
|
Direct
|
100.0
|
100.0
|
Gol
LuxCo
|
06/21/2013
|
Luxemburg
|
Financial funding
|
Direct
|
100.0
|
100.0
|
Subsidiaries:
|
|
|
|
|
|
|
VRG
|
04/09/2007
|
Brazil
|
Flight
transportation
|
Direct
|
100.0
|
100.0
|
Webjet
|
08/01/2011
|
Brazil
|
-
|
Indirect
|
100.0
|
100.0
|
Smiles
|
06/10/2012
|
Brazil
|
Frequent flyer
program
|
Direct
|
54.1
|
54.1
|
Gol Dominicana
|
02/28/2013
|
Dominican Republic
|
Pre-operational
phase
|
Direct
|
100.0
|
100.0
|
Jointly controlled:
|
|
|
|
|
|
SCP Trip
|
04/27/2012
|
Brazil
|
Flight magazine
|
Indirect
|
60.0
|
60.0
|
Associate:
|
|
|
|
|
|
|
Netpoints
|
11/08/2013
|
Brazil
|
Frequent flyer
program
|
Indirect
|
21.2
|
21.2
|
(*) The
extensions are entities organized for the specific purpose of continuing the
headquarter operation, or yet, present rights and/or obligations in order to
supply the Company`s requirements. Besides, do not hold an independent
management itself and do not have autonomy on taking decisions. These entities
present the consolidated assets and liabilities side by side on the individual
interim financial information.
2.2.
New accounting estimates, changes and
assumptions
29
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
The
following new standards, amendments and interpretations were issued by and can
be applicable as of January 01, 2016, but had no material effect on the interim
financial information from its adoption:
Amendments to IAS 16 and IAS 38 - Clarification of Acceptable Methods
of Depreciation and Amortisation:
The
amendments are applicable prospectively for annual periods beginning on or after
January 1, 2016;
Amendments to IAS 27 - Equity Method in Separate Financial
Statements:
The amendments are applicable prospectively
for annual periods beginning on or after January 1, 2016;
Amendments to IFRS 10 and IAS 28 – Assets sales or contribution
between an investor and an associate or joint venture:
The
amendments are applicable prospectively for annual periods beginning on January
01, 2016
.
Annual improvements 2010-2014 cycle - Applicable for annual periods
beginning on or after July 1, 2016:
IFRS
7 Financial Instruments - Disclosures:
(i)
clarifies that a servicing contract that includes a fee can constitute
continuing involvement in a financial asset and (ii) the applicability of the
amendments to IFRS 7 to condensed interim financial statements. This amendment
must be applied retrospectively;
IAS
34 Interim Financial Reporting:
This
amendment must be applied retrospectively;
Amendments to IAS 1 - Disclosure Initiative:
The
amendments are applicable prospectively for annual periods beginning on or after
January 1, 2016.
3.
Seasonality
The
Company expects that revenues and profits from its flights reach the highest
levels during the summer and winter vacation periods, in January and July,
respectively, and during the last two weeks of December, during the season
holidays. Given the high portion of fixed costs, this seasonality tends to
result in fluctuations in our operational quarter-on-quarter
income.
4.
Cash and cash equivalents
|
Individual
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
Cash and bank
deposits
|
162
|
370
|
378
|
629
|
Cash
equivalents
|
6
|
17
|
589
|
443
|
|
168
|
387
|
967
|
1,072
|
30
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
The cash
equivalents breakdown is as follows:
|
Individual
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
Private
bonds
|
5
|
17
|
312
|
208
|
Investment
funds
|
1
|
-
|
277
|
235
|
|
6
|
17
|
589
|
443
|
As of
March 31, 2016, the cash equivalents were represented by private bonds (Bank
Deposit Certificates - “CDBs”), buy-back transactions and time deposits paid at
post fixed rates ranging between 74% and 103% (75% and 103% as of December 31,
2015) of the Interbank Deposit Certificate rate (“CDI”) on the onshore
investments.
The
investment funds classified as cash equivalents have high liquidity and,
according to the Company assessment, are readily convertible to a known amount
of cash with insignificant risk of changes in its value.
5.
Short-term investments
|
Individual
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
Private
bonds
|
160
|
195
|
161
|
197
|
Government
bonds
|
-
|
-
|
9
|
11
|
Investment
funds
|
-
|
-
|
265
|
284
|
|
160
|
195
|
435
|
492
|
As of
March 31, 2016, the private bonds were represented by CDBs and financial letters
with first-rate financial institutions, paid at a weighted average rate of 115%
(110% as of December 31, 2015) of the CDI rate on onshore investments and 69% of
offshore investments.
Government bonds are represented primarily by government bonds LFT
and NTN paid at a weighted average of 97% (98% as of December 31, 2015) of CDI
rate.
Investment funds are represented primarily by private and government
bonds paid at a weighted average of 90% (83% as of December 31, 2015) of the CDI
rate.
6.
Restricted cash
|
Individual
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
Margin deposits for hedge transactions (a)
|
-
|
-
|
63
|
101
|
Deposits in guarantee of letter of credit – Safra
(b)
|
3
|
3
|
177
|
360
|
Escrow deposits – Bic Bank (c)
|
21
|
31
|
55
|
64
|
Escrow
deposits - Leases (d)
|
-
|
-
|
115
|
159
|
Escrow
deposits - Citibank (e)
|
-
|
49
|
-
|
49
|
Other bound
deposits
|
1
|
-
|
3
|
2
|
|
25
|
83
|
413
|
735
|
|
|
|
|
|
Current
|
-
|
59
|
-
|
59
|
Noncurrent
|
25
|
24
|
413
|
676
|
(a)
Denominated in U.S. dollars, remunerated by Libor rate (average
remuneration of 0.5% p.a.).
(b)
For the
quarter ended March 31, 2016, the Company settled the loan with Banco Safra and,
consequently, withdrew the amount of R$116 related to the guarantee linked to
such an operation. Additionally, the Company held the redemption of R$41 related
to the settlement of Finimp operations (See note 17). The remaining amount is
related to labor/legal guarantees and FINIMP agreements (See note
17).
(c)
The amount
of R$21 (individual and consolidated) related to a contractual guarantee for
STJs related to PIS and Cofins on interest attributable to shareholders’ equity
paid to GLAI as described in Note 21b. The other amounts relate to guarantees of
VRG letters of credit.
(d)
Related to
a letter of credit for aircraft operating leases from VRG.
(e)
The amount
held on December 31, 2015 is related to escrow deposits with Delta Air Lines
Inc. (“Delta”) related to the term loan guarantee, as described in Note 17. On
March 31, 2016, the Company did not exceed the contractual limits that would
require them obligation to make such deposit and therefore the balance was
fully reclassified to cash equivalents item.
31
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
7.
Trade receivables
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
Local
currency
|
|
|
Credit card
administrators
|
162
|
115
|
Travel agencies
|
227
|
248
|
Cargo
agencies
|
33
|
32
|
Airline partners
companies
|
20
|
22
|
Other
(*)
|
61
|
53
|
|
503
|
470
|
Foreign
currency
|
|
|
Credit card
administrators
|
21
|
33
|
Travel
agencies
|
21
|
10
|
Airline partners
companies
|
15
|
-
|
Cargo
agencies
|
2
|
-
|
|
59
|
43
|
|
562
|
513
|
|
|
|
Allowance for
doubtful accounts
|
(48)
|
(50)
|
Total trade
receivables
|
514
|
463
|
(*) Related to an additional incentive from the commercial
cooperation strategic partnership with Air France-KLM, to be received on June,
2016. For further information, see Note 11.6.
32
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
The
aging list of trade receivables is as follows:
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
Not yet due
|
454
|
420
|
Overdue until
30 days
|
1
2
|
14
|
Overdue 31 to
60 days
|
8
|
8
|
Overdue 61 to
90 days
|
1
0
|
3
|
Overdue 91 to
180 days
|
17
|
10
|
Overdue 181
to 360 days
|
19
|
21
|
Overdue above
360 days
|
42
|
37
|
|
562
|
513
|
The
changes in the allowance for doubtful accounts are as follows:
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
Balance at beginning of the period
|
(50)
|
(84)
|
Additions
|
(4)
|
(39)
|
Write off
unrecoverable amounts
|
2
|
58
|
Recoveries
|
4
|
15
|
Balance at the end of the period
|
(48)
|
(50)
|
8.
Inventories
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
Consumables
|
37
|
29
|
Parts and
maintenance materials
|
155
|
177
|
Others
|
5
|
5
|
Provision for
obsolescence
|
(12)
|
(12)
|
|
185
|
199
|
The
changes in the provision for obsolescence are as follows:
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
Balances at the beginning of the year
|
(12)
|
(13)
|
Addition
|
-
|
(2)
|
Write-off and
reversal
|
-
|
3
|
Balances at the end of the year
|
(12)
|
(12)
|
33
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
9.
Deferred and recoverable
taxes
9.1.
Recoverable taxes
|
Individual
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
ICMS
|
-
|
-
|
7
|
1
|
Prepaid
income taxes
|
23
|
23
|
54
|
79
|
Withholding
income tax (IRRF)
|
1
|
-
|
9
|
7
|
PIS e
COFINS
|
-
|
-
|
22
|
18
|
Withholding tax of public institutions
|
-
|
-
|
5
|
14
|
Value added
tax – IVA
|
-
|
-
|
12
|
11
|
Others
|
-
|
-
|
5
|
1
|
Total
|
24
|
23
|
114
|
131
|
|
|
|
|
|
Current
assests
|
8
|
6
|
42
|
58
|
Noncurrent
assets
|
16
|
17
|
72
|
73
|
9.2.
Deferred tax assets (liabilities) - Long
term
|
GLAI
|
VRG
|
Smiles
|
Consolidado
|
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
Income tax
losses
|
5
|
5
|
-
|
-
|
-
|
-
|
5
|
5
|
Negative basis of social contribution
|
2
|
2
|
-
|
-
|
-
|
-
|
2
|
2
|
Temporary
differences:
|
|
|
|
|
|
|
|
|
Mileage
program
|
-
|
-
|
5
|
5
|
-
|
-
|
5
|
5
|
Allowance for doubtful accounts and other
credits
|
-
|
-
|
15
|
14
|
-
|
-
|
15
|
14
|
Provision for losses on VRG’s acquisition
|
-
|
-
|
143
|
143
|
-
|
-
|
143
|
143
|
Provision for legal proceedings and tax
liabilities
|
1
|
1
|
13
|
11
|
-
|
1
|
14
|
13
|
Aircraft
return
|
-
|
-
|
39
|
40
|
-
|
-
|
39
|
40
|
Hedge
accounting derivatives
|
-
|
-
|
98
|
92
|
-
|
-
|
98
|
92
|
Derivative
transactions not settled
|
-
|
-
|
(6)
|
(5)
|
-
|
-
|
(6)
|
(5)
|
Tax benefit due to goodwill incorporation
(*)
|
-
|
-
|
-
|
-
|
40
|
44
|
40
|
44
|
Flight
rights
|
-
|
-
|
(353)
|
(353)
|
-
|
-
|
(353)
|
(353)
|
Depreciation of engines and parts for aircraft
maintenance
|
-
|
-
|
(174)
|
(168)
|
-
|
-
|
(174)
|
(168)
|
Reversal of goodwill amortization on VRG acquisition
(a)
|
-
|
-
|
(128)
|
(128)
|
-
|
-
|
(128)
|
(128)
|
Aircraft
leases
|
-
|
-
|
71
|
75
|
-
|
-
|
71
|
75
|
Other (
b
)
|
-
|
-
|
38
|
29
|
32
|
28
|
94
|
83
|
Total
deferred taxes, net
|
8
|
8
|
(239)
|
(245)
|
72
|
73
|
(135)
|
(138)
|
(
a
) Related to the
tax benefit from the reverse merger of G.A. Smiles Participações S.A. by Smiles.
Under the terms of the current tax legislation, the goodwill amortization for
tax purposes will be a deductible expense on the taxable income
calculation.
(b) The
portion of taxes on Smiles unrealized profit in the amount of R$24 is registered
directly in the consolidated column (R$27 as of December 31,
2015).
34
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
The
Company, VRG and Webjet have net operating losses carryforward, represented by
income tax losses and negative basis of social contribution. The net operating
losses carryforward have no expiration period, however, the compensation is
limited to 30% of the annual taxable income. The unused balances of net
operating losses carryforward are as follows:
|
Individual
|
Direct
controlled
|
Indirect
controlled
(Webjet)
|
(GLAI)
|
(VRG)
|
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
Income tax losses
|
185
|
176
|
3,218
|
3,203
|
875
|
871
|
Negative basis of social contribution
|
185
|
176
|
3,218
|
3,203
|
875
|
871
|
The
Company’s Management considers that the deferred assets recognized as of
December 31, 2015 arising from temporary differences will be realized in
connection with the deferred tax liabilities and future
results.
The
analysis of the realization of deferred taxes assets was prepared on a company
basis as follows:
GLAI
: the Company has tax credits of R$64, of
which R$63 is related to net operating losses carryforward and R$1 is related to
temporary differences, with realization supported by the long term plan of the
Company. However, the Company assessed the projections of results and did not
recognize the amount of R$56 related to credits from net operating losses
carryforward.
VRG
: VRG has tax credits on net operating
losses carryforward of R$1,094. However, in view of recent events on the
political scenario in Brazil, instability of the economic environment, constant
fluctuations
in the
U.S. dollar exchange rate and other variables that significantly affect the
projections of future results, as well as, the history of losses in recent
years, the Company has reassessed the recognition of tax credits on net
operating losses carryforward. Additionally, the Company analyzed the
realization of deferred tax assets on temporary differences and limited the
recognition based on the expected realization of deferred tax liabilities on
temporary differences. As a result, the Company did not recognize the net amount
of R$672 of deferred tax assets on temporary differences.
35
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
The
deferred tax credits recorded under “Other comprehensive income (loss)” that
will affect taxable income only at the moment of its realization remain fully
recorded in total equity.
Smiles
: Smiles does not have net operating losses
carryforward. The deferred tax credit is composed only by temporary differences
which, according to the history and projections of taxable results, has an
expectation of realization.
Webjet
: the forecast did not present sufficient
taxable income to be realized over future periods, and as a result, tax credits
of R$297 has not been recorded.
The
reconciliation of income taxes expense for the quarter ended March 31, 2016 and
2015 is as follows:
|
Individual
|
Consolidated
|
|
03/31/2016
|
03/31/2015
|
03/31/2016
|
03/31/2015
|
Loss before income
taxes
|
703
|
(698)
|
823
|
(712)
|
Combined tax
rate
|
34%
|
34%
|
34%
|
34%
|
Income tax
credits at the combined tax rate
|
(239)
|
237
|
(280)
|
242
|
Adjustments to calculate the effective tax
rate:
|
|
|
|
|
Equity
results
|
110
|
(95)
|
(1)
|
-
|
Tax losses
from wholly-owned subsidiaries
|
35
|
(16)
|
35
|
(16)
|
Nontaxable
revenues (nondeductible expenses), net
|
-
|
(1)
|
38
|
(12)
|
Exchange
variation on foreign investments
|
99
|
(132)
|
101
|
(173)
|
Benefit on
tax losses and temporary differences
|
(5)
|
-
|
41
|
(2)
|
Income taxes
expense
|
-
|
(7)
|
(66)
|
39
|
|
|
|
|
|
Current income
taxes
|
-
|
(5)
|
(63)
|
(85)
|
Deferred income
taxes
|
-
|
(2)
|
(3)
|
124
|
|
-
|
(7)
|
(66)
|
39
|
10.
Deposits
|
Individual
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
Judicial
deposits (a)
|
34
|
31
|
360
|
329
|
Maintenance
deposits (b)
|
-
|
-
|
332
|
261
|
Deposits in guarantee for lease agreements (c)
|
-
|
-
|
469
|
430
|
|
34
|
31
|
1,161
|
1,020
|
36
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
(a)
Judicial deposits
Judicial
deposits and blocked escrows represent guarantees of lawsuits related to tax,
civil and labor claims deposited in escrow until the resolution of the related
claims. Part of the blocked amount in escrow is related to civil and labor
claims arising on the succession orders on claims against Varig S.A. and
proceedings filed by employees that are not related to the Company or any
related party (third-party claims). As the Company is not correctly classified
as the defendant of these lawsuits, whenever such blockages occur, the exclusion
of such is requested in order to release the resources. As of March 31, 2016 the
blocked amounts regarding the Varig’ succession and the third-party lawsuits
were R$95 and R$ R$70, respectively (R$92 and R$75 as of December 31, 2015,
respectively).
(b)
Maintenance deposits
The
Company and its subsidiaries VRG and Webjet made deposits in U.S. dollars for
maintenance of aircraft and engines that will be used in future events as set
forth in some lease contracts.
The
maintenance deposits do not exempt the Company and its subsidiaries, as lessee,
neither from the contractual obligations relating to the maintenance of the
aircraft nor from the risk associated with maintenance activities. The Company
and its subsidiaries hold the right to select any of the maintenance service
providers or to perform such services internally.
(c)
Deposits in guarantee for lease agreements
As
required by some lease agreements, the Company and its subsidiaries hold
guarantee deposits in U.S. Dollars on behalf of the leasing companies, whose
full refund occurs upon the contract expiration date.
11.
Transactions with related
parties
11.1.
Loan agreements - Noncurrent assets and liabilities
Individual
The
Company maintains loan agreements, assets and liabilities, with its subsidiary
VRG without interest, maturity or guarantees prescribed, as set forth
below:
|
Asset
|
Liabilities
|
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
GLAI with VRG
|
64
|
62
|
(1)
|
(1)
|
GAC with VRG
|
306
|
98
|
(24)
|
(26)
|
Gol LuxCo
with VRG
|
1,049
|
723
|
-
|
-
|
|
1,4
19
|
883
|
(25)
|
(27)
|
Additionally, the Parent Company holds loans between Gol LuxCo, Gol
Finance and GAC:
37
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
|
Asset
|
Liabilities
|
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
GAC with GLAI
|
3
|
3
|
138
|
151
|
GAC with Gol Finance
|
-
|
-
|
1,203
|
1,298
|
Gol LuxCo
with GAC
|
1,189
|
1,419
|
-
|
-
|
Gol LuxCo with Gol Finance
|
709
|
795
|
780
|
880
|
|
1,901
|
2,217
|
2,121
|
2,329
|
These
transactions are eliminated by the Company, since the entities are offshore and
are considered an extension of the Company’s operations.
11.2.
Transportation
and consulting services
All the
agreements related to transportation and consulting services are held by the
Company’ subsidiary VRG. The related parties for these services
are:
Breda
Transportes e Serviços S.A.
provides passenger and luggage transportation services between airports, and
transportation of employees. The agreement expir
es
on May 31, 2016 is renewable every 12
months for additional equal terms through an amendment instrument signed by the
parties, annually adjusted based on the IGP-M fluctuation (General Market Price
Index from Getulio Vargas Foundation).
Expresso União Ltda.
, to
provide employees’ transportation. The agreement expires on August 01, 2016.
Pax
Participações S.A.
, to provide consulting and advisory
services. The agreement expires on April 30, 2016.
Vaud
Participações S.A.
to provide executive administration and
management services, expires on October 01, 2016.
As of
March 31, 2016, the subsidiary VRG recognized a total expense related to these
services of R$4 (R$4 as of March 31, 2015). At the same date, the balance
payable to related companies amounting to R$1 (R$2 as of December 31, 2015) are
included in the balance of accounts payables and substantially refers to the
payment to Breda Transportes e Serviços S.A..
11.3.
Contracts account opening UATP
(“Universal Air Transportation Plan”) to grant credit
limit
In
September 2011, the subsidiary VRG entered into agreements with related parties
Pássaro Azul Taxi Aéreo Ltda. and Viação Piracicabana Ltda., both with no
expiration date, with the purpose of the issuance of credits to be used in the
UATP (Universal Air Transportation Plan) system. The UATP account (virtual card)
is accepted as a payment method on the purchase of airline tickets and related
services, seeking to simplify the billing and facilitate the payment between
participating companies.
38
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
11.4.
Financing contract for engine maintenance
The subsidiary VRG has a line of funding for engines maintenance services, which
disbursement occurs through the issuance of Guaranteed Notes. As of March
31, 2016, VRG holds two series of Guaranteed Notes for maintenance of engines,
issued on February 14, 2014 and March 13, 2015, with a term of up to 3 years.
Delta Airlines is the guarantor of such Guaranteed Notes.
On March
31, 2016, the balance of engine maintenance funding recorded as "
short and
long
term debt" was R$91 (R$137 on December 31, 2015), as detailed
in Note 17.
During
the period ended March 31, 2016 the engine maintenance expenses conducted by
Delta Air Lines was R$46 (R$72 as of March 31, 2015).
11.5.
Term
Loan guarantee
On
August 31, 2015, the Company, through its subsidiary Gol Luxco issued a term
loan of US$300 million through Morgan Stanley, with a term of 5 years and
effective interest rate of 6.5% p.a. The term loan has an the additional
guarantee ("Backstop Guaranty") granted by Delta Air Lines
.
For additional
information see Note 17.
.
11.6.
Financing contract for engine
maintenance
On
February 19, 2014, the Company signed an exclusive strategic partnership for
long-term business cooperation with Airfrance-KLM with the purpose of the sales
activities improvements and codeshare expansion and mileage programs benefits
between the companies for the customers in the Brazilian and European
market.
The
agreement provides the incentive investment in the Company in the amount of
R$112, which payment is divided in three installments: the first installments in
the amount of R$74 was received on June 2014, the second, in the amount of R$18,
was received on June 2015 and the third installments in the amount of R$2 will
be received on June 2016. The agreement will mature within 5 years and the
installments will be amortized monthly. On March 31, 2016, the company has
deferred revenue in the amount of R$22 and R$43 recorded as “Other Liabilities”
in the current and noncurrent liability, respectively (R$28 and R$49 as of
December 31, 2015, in the current and noncurrent liability,
respectively).
11.7.
Remuneration of key management
personnel
|
03/31/2016
|
03/31/2015
|
Salaries and benefits
|
7
|
5
|
Related taxes and charges
|
1
|
1
|
Share-based payments
|
3
|
2
|
|
11
|
8
|
As of
March 31, 2016 and 2015 the Company did not offer post-employment benefits, and
there are no severance benefits or other long-term benefits for the Management
or other employees.
39
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
12.
Share-based payments
The
Company holds two share-based payment plans offered to its management personnel:
the Stock Option Plan and the Restricted Shares Plan. Both plans stimulate and
promote the alignment of the Company’s goals, management and employees, mitigate
the risks in value created for the Company resulting from the loss of their
executives and strengthen the commitment and productivity of these executives to
long-term results.
GLAI
a)
Stock
option plan
The
beneficiaries of the Company´s stock option plan are allowed to purchase the
Company´s shares after 3 years from the grant date, with an exercise period of
up to 10 years and an acquisition condition that the beneficiary maintains its
employment relationship up to the end of this period.
For
plans granted beginning 2010, 20% of the options become vested as from the first
year, an additional 30% as from the second, and the remaining 50% as from the
third year. All stock options may also be exercised within 10 years after the
grant date. On all the stock options granted, the expected volatility of the
options is based on the historical volatility of 252 working days of the
Company’s shares traded on BM&FBOVESPA, and the fair value of the restricted
shares granted was estimated on the grant date using the Black-Scholes pricing
model, as follows:
|
Stock Options Plan
|
Option year
|
Board
meeting
|
Total options granted
|
Number of options outstan-ding as of
03/31/2016
|
Exercise price
of the option
(In Reais)
|
The fair value of the option at grant
date
(In Reais)
|
Estimate volatility of share
price
|
Expected dividend
|
Risk-free rate return
|
Average remaining maturity
(in years)
|
2007
|
12/31/2006
|
113,379
|
14,962
|
65.85
|
46.61
|
46.54%
|
0.98%
|
13.19%
|
1
|
2008
|
12/20/2007
|
190,296
|
41,749
|
45.46
|
29.27
|
40.95%
|
0.86%
|
11.18%
|
2
|
2009 (a)
|
02/04/2009
|
1,142,473
|
20,414
|
10.52
|
8.53
|
76.91%
|
-
|
12.66%
|
3
|
2010 (b)
|
02/02/2010
|
2,774,640
|
1,067,070
|
20.65
|
16.81
|
77.95%
|
2.73%
|
8.65%
|
4
|
2011
|
12/20/2010
|
2,722,444
|
901,061
|
27.83
|
16.07 (c)
|
44.55%
|
0.47%
|
10.25%
|
5
|
2012
|
10/19/2012
|
778,912
|
480,162
|
12.81
|
5.32 (d)
|
52.25%
|
2.26%
|
9.00%
|
7
|
2013
|
05/13/2013
|
802,296
|
553,053
|
12.76
|
6.54 (e)
|
46.91%
|
2.00%
|
7.50%
|
7
|
2014
|
08/12/2014
|
653,130
|
509,651
|
11.31
|
7.98 (f)
|
52.66%
|
3.27%
|
11.00%
|
8
|
2015
|
08/11/2015
|
1,930,844
|
1,520,423
|
9.35
|
3.37 (g)
|
55.57%
|
5.06%
|
13.25%
|
9
|
|
|
11,108,414
|
5,108,545
|
18.62
|
|
|
|
|
6.62
|
a)
In April
2010 216,673 shares were granted in addition to the 2009 plan.
b)
In April
2010 additional options were approved totaling 101,894, referring to the 2010
plan.
c)
The fair
value is calculated by the average value from R$16.92, R$16.11 and R$15.17 for
the respective periods of vesting (2011, 2012 and 2013).
d)
The fair
value is calculated by the average value from R$6.04, R$5.35 and R$4.56 for the
respective periods of vesting (2012, 2013 and 2014).
e)
The fair
value is calculated by the average value from R$7.34, R$6.58 and R$5.71 for the
respective periods of vesting (2013, 2014 and 2015).
f)
The fair
value is calculated by the average value from R$8.20, R$7.89 and R$7.85 for the
respective periods of vesting (2014, 2015 and 2016).
g)
The fair
value is calculated by the average value from R$3.60, R$3.30 and R$3.19 for the
respective periods of vesting (2015, 2016 and 2017).
40
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
The
movement
in
stock
options outstanding for the period ended March 31, 2016 is as
follows:
|
Total of stock
options
|
Weighted average exercise price
|
Options outstanding as of December 31,
2015
|
5,359,460
|
16.35
|
Options cancelled and adjustments in estimated prescribed
rights
|
(250,915)
|
14.62
|
Options outstanding as of March 31,
2016
|
5,108,545
|
18.62
|
|
|
|
Number of options exercisable as of December 31,
2015
|
4,079,448
|
18.43
|
Number of options exercisable as of March 31,
2016
|
5,108,545
|
18.62
|
b)
Restricted shares
Restricted shares
|
Year of
the share
|
Date of the Board Meeting
|
Total shares granted
|
Number of restricted shares outstanding as of
03/31/2016
|
Fair value of the share at grant date (in
Reais)
|
2013
|
05/13/2013
|
712,632
|
422,713
|
12.76
|
2014
|
08/13/2014
|
804,073
|
509,651
|
11.31
|
2015
|
04/30/2015
|
1,207,037
|
957,756
|
9.35
|
|
|
2,723,742
|
1,890,1
19
|
|
The
movement in the restricted shares for the period ended March 31, 2016 is as
follows:
|
Total restricted
shares
|
Restricted shares outstanding as of December 31,
2015
|
2,009,193
|
Restricted shares granted
|
|
Restricted shares transferred (*)
|
(31,649)
|
Restricted shares cancelled and adjustments in estimated
expired rights
|
(87,425)
|
Restricted shares outstanding as of March 31,
2016
|
1,890,119
|
(*) The
amount related to transferred shares is R$0.1.
Smiles
Smiles Stock Option Plan
Stock Options Plan
|
Option year
|
Board
Meeting
|
Total options
granted
|
Number of options outstanding as of
03
/31/2016
|
Exercise price of the option (In
Reais)
|
Fair value of the option at grant
date (In Reais)
|
Estimate volatility of share
price
|
Expected dividend
yield
|
Risk-free return
rate
|
Length of the option (in
years)
|
2013
|
08/08/2013
|
1,058,043
|
138,868
|
21.70
|
4.25 (a)
|
36.35%
|
6.96%
|
7.40%
|
10
|
2014
|
02/04/2014
|
1,150,000
|
484,050
|
31.28
|
4.90 (b)
|
33.25%
|
10.67%
|
9.90%
|
10
|
|
|
2,208,043
|
622,918
|
|
|
|
|
|
|
a)
The fair
value calculated for the stock options was R$4.84, and R$4.20 for the vesting
periods in 2013 and 2014, and R$3.73 for the vesting periods in 2015 and
2016.
b)
The fair
value calculated for the stock options was R$4.35, R$4.63, R$4.90, R$5.15 and
R$5.37 for the respective periods of vesting from 2014 to
2018.
41
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
The
movement of the stock options outstanding for the quarter ended March 31, 2016
is as follows:
|
Total of stock
options
|
Weighted average exercise price
|
Options outstanding as of December 31,
2015
|
786,918
|
29.59
|
Options exercised
|
(164,000)
|
19.36
|
Options outstanding as of March 31,
2016
|
622,918
|
29.14
|
For the
quarter ended March 31, 2016 the Company recorded in equity a result from
share-based payments of R$3 (R$
3
for the quarter ended March
, 2015), for the
plans presented above, with a corresponding entry in profit or loss in
Salaries.
13.
Investments
The
investments in foreign subsidiaries, GAC, Finance and Gol LuxCo were considered
as an extension of the Company and are consolidated on a line by line basis on
the individual company GLAI. Accordingly, only the subsidiaries Smiles, VRG and
Gol Dominicana were considered as an investment.
The
amount of consolidated investments is related to 21.2% of the working capital of
Netpoints Fidelidade S.A., held by the subsidiary Smiles, and to SCP Trip
investment, held by the subsidiary VRG, both registered as investments accounted
under the equity method.
The
change in investments during the quarter ended March 31, 2016 is as
follows:
|
Individual
|
|
Consolidated
|
|
Gol Dominicana
|
VRG
|
Smiles
|
Total
|
|
Trip
|
Netpoints
|
Total
|
|
|
|
|
|
|
|
|
|
Relevant information of the Company’s
subsidiaries as of March 31, 2016:
|
|
|
|
|
|
|
|
|
Total number of shares
|
-
|
4,619,138,156
|
123,070,277
|
-
|
|
-
|
60,492,408
|
-
|
Capital
|
9
|
3,911
|
179
|
-
|
|
1
|
64
|
-
|
Interest
|
100.0%
|
100.0%
|
54.1%
|
-
|
|
60.0%
|
21.2%
|
-
|
Total equity
|
(1)
|
(2,760)
|
610
|
-
|
|
5
|
(17)
|
-
|
Accumulated unrealized gains
(a)
|
-
|
-
|
(46)
|
-
|
|
-
|
-
|
-
|
Adjusted equity (b)
|
(1)
|
(2,760)
|
282
|
-
|
|
2
|
(4)
|
-
|
Net (loss) income for the
period
|
-
|
256
|
118
|
-
|
|
-
|
(19)
|
-
|
Unrealized gains for the period
(a)
|
-
|
-
|
5
|
-
|
|
-
|
-
|
-
|
Net
(loss) income for the period attributable to Company’s
interest
|
-
|
256
|
69
|
-
|
|
-
|
(4)
|
-
|
|
|
|
|
|
|
|
|
|
Changes
on investments:
|
|
|
|
|
|
|
|
|
Balance
as of December 31, 2015
|
(1)
|
(2,986)
|
213
|
(2,774)
|
|
2
|
16
|
18
|
Equity
results
|
-
|
256
|
69
|
325
|
|
-
|
(4)
|
(4)
|
Unrealized hedge losses
|
-
|
(13)
|
-
|
(13)
|
|
-
|
-
|
-
|
Amortization losses, net of sale leaseback
(c)
|
-
|
(2)
|
-
|
(2)
|
|
-
|
-
|
-
|
Balance
as of March 31, 2016
|
(1)
|
(2,745)
|
282
|
(2,464)
|
|
2
|
12
|
14
|
(a)
Refers to
transactions related to revenue for redeeming miles for flight tickets for
Smiles Program participants that, for consolidated Interim Financial Information
purposes, only take place when the participants of the program are effectively
transported by VRG.
(b)
The
adjusted equity corresponds to the percentage of the equity less unrealized
gains.
(c)
The subsidiary
GAC has a net balance of deferred losses and gains on sale leaseback, whose
deferral is subject to the payment of contractual installments made by its
subsidiary VRG. Accordingly, the net balance to be deferred is essentially part
of the net investment of the subsidiary VRG.
42
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
14.
Results
per share
Although there
are differences between common and preferred shares in terms of voting rights
and priority in case of liquidation, the Company’s preferred shares are not
entitled to receive any fixed dividends. The preferred stockholders are entitled
to receive dividends per share in the same amount (35 times) of the dividends
per share paid to common stockholders. Therefore, the Company understands that,
substantially, there is no difference between the preferred shares and common
shares, and accordingly, basic and diluted result per share is calculated using
the same method for both shares.
Basic results
per share is calculated by dividing the net profit attributable to controlling
shareholders by the weighted average number of all classes of shares outstanding
during the period.
Diluted result
per share is calculated by the weighted average number of outstanding shares, in
order to assume the conversion of all potential dilutive shares. Diluted result
per share is calculated based on considering the instruments that may have a
potential dilutive effect in the future, such as share-based payment
instruments, described in Note 12. However, due to the options being below the
market value (out of money) these instruments issued have an anti-dilutive
effect and, therefore, are not considered in the weighted average number of
outstanding shares for the computation of diluted result per
share.
|
Individual and
consolidated
|
|
03/31/2016
|
03/31/2015
|
|
Common
|
Preferred
|
Common
|
Preferred
|
Numerator
|
|
|
|
|
Net income
(
loss) for the year attributable to
equity holders of the parent
|
29
2
|
411
|
(342)
|
(362)
|
|
|
|
|
|
Denominator
|
|
|
|
|
Weighted average number of outstanding
shares (in thousands) *
|
5,035,037
|
201,887
|
5,539,261
|
152,403
|
Adjusted weighted average number of outstanding shares and
diluted presumed conversions (in thousands) *
|
5,035,037
|
201,887
|
5,539,261
|
152,403
|
|
|
|
|
|
Basic income (loss) per share – In Reais
|
0.058
|
2.034
|
(0.062)
|
(2.378)
|
Diluted income (loss) per share – In Reais
|
0.058
|
2.034
|
(0.062)
|
(2.379)
|
(*) The
weighted average considers the split of common shares approved at the
Extraordinary Shareholders Meeting held on March 23, 2015, in accordance with
IAS 33. Earnings per share presented herein reflects the economic rights of each
class of shares.
15.
Property, plant and equipment
Individual
The
balance corresponds to advances for acquisition of aircraft and are related to
prepayments made based on the contracts with Boeing Company to acquire 13
aircraft of model 737-800 Next Generation (15 aircraft as of December 31, 2015)
and 109 aircraft of model 737-MAX (109 aircraft as of
December 31, 2015) in the amount of R$322
(R$556 as of December 31, 2015) and the right to the residual value of aircraft
in the amount of R$369 (R$427 as of December 31, 2015), both held by the
subsidiary GAC.
43
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
Consolidated
|
03/31/2016
|
12/31/2015
|
|
Weighted anual depreciation
rate
|
Cost
|
Accumulated
depreciation
|
Net
amount
|
Net
amount
|
Flight equipment
|
|
|
|
|
|
Aircraft under finance leasing (a)
|
5.5%
|
2,521
|
(877)
|
1,644
|
2,082
|
Sets of replacement parts and spares
engines
|
5.5%
|
1,207
|
(394)
|
813
|
824
|
Aircraft reconfigurations/overhauling
|
14.0%
|
1,748
|
(1,021)
|
727
|
611
|
Aircraft and safety equipment
|
20.0%
|
1
|
-
|
1
|
1
|
Tools
|
10.0%
|
27
|
(14)
|
13
|
13
|
|
|
5,504
|
(2,306)
|
3,198
|
3,531
|
|
|
|
|
|
|
Impairment losses (b)
|
-
|
(29)
|
-
|
(29)
|
(29)
|
|
|
5,475
|
(2,306)
|
3,169
|
3,502
|
|
|
|
|
|
|
Property, plant and equipment in use
|
|
|
|
|
|
Vehicles
|
20.0%
|
11
|
(9)
|
2
|
2
|
Machinery and equipment
|
10.0%
|
56
|
(32)
|
24
|
24
|
Furniture and fixtures
|
10.0%
|
22
|
(15)
|
7
|
8
|
Computers and peripherals
|
20.0%
|
40
|
(32)
|
8
|
9
|
Communication equipment
|
10.0%
|
3
|
(2)
|
1
|
1
|
Facilities
|
10.0%
|
5
|
(4)
|
1
|
-
|
Maintenance center - Confins
|
10.0%
|
107
|
(61)
|
46
|
50
|
Leasehold improvements
|
20.0%
|
60
|
(47)
|
13
|
15
|
Construction in progress
|
-
|
14
|
-
|
14
|
22
|
|
|
318
|
(202)
|
116
|
131
|
|
|
5,793
|
(2,508)
|
3,285
|
3,633
|
|
|
|
|
|
|
Advances for aircraft acquisition
|
-
|
417
|
-
|
417
|
624
|
|
|
|
|
|
|
|
|
6,210
|
(2,508)
|
3,702
|
4,257
|
(a)
The
Company change the lessors to 6 contracts classified as finance leases in the
quarter ended March 31, 2016. While the Company will continue to maintain these
aircraft in the fleet, factors such as the change of lessors, the new
established contractual terms and mainly the reduction of contractual terms
characterize such contracts, according to IAS17 and CPC06, as new contracts. As
a result, from February 11, 2016, these aircraft are now classified as operating
leases and the related payments are now recorded under costs of "aircraft
leasing".
(b)
Refers
to provisions recorded by the Company in order to present its assets according
to the potential of monetary benefit generation.
44
|
Notes to the interim financial information
March 31, 2016
(In millions of Brazilian Reais - R$, except when indicated otherwise)
|
During the quarter ended March 31, 2016, the Company reviewed the useful life of its assets and, as a result, made the following changes:
|
From
|
To
|
Aircraft under finance leasing
|
4.0%
|
5.5%
|
Sets of replacement parts and spares engines
|
4.0%
|
5.5%
|
Aircraft reconfigurations/overhauling
|
30.0%
|
14.0%
|
Due to this change, the Company presented a decrease on depreciation expenses for the quarter ended March 31, 2016 of approximately R$7. The Company also estimates a decrease of depreciation expenses for the next nine months of 2016 by approximately R$17.
Such adjustments were made by technical analysis and are intended to reflect the Company's current perspective for the use of its assets.
Changes in property, plant and equipment balances are as follows:
|
Property, plant and equipment under finance lease
|
Other flight equipment
|
Advances for acquisition of property, plant and equipment
|
Others
|
Total
|
As of December 31, 2015
|
2,082
|
1,420
|
624
|
131
|
4,257
|
Additions
|
-
|
127
|
167
|
5
|
299
|
Disposals
|
(371)
|
-
|
(374)
|
-
|
(745)
|
Depreciation
|
(22)
|
(79)
|
-
|
(8)
|
(109)
|
Transfers
|
(45)
|
57
|
-
|
(12)
|
-
|
As of March 31, 2016
|
1,644
|
1,525
|
417
|
116
|
3,702
|
16.
Intangible assets
|
Goodwill
|
Airport operating licenses
|
Software
|
Total
|
Balance as of December 31, 2015
|
542
|
1.039
|
134
|
1.715
|
Additions
|
-
|
-
|
7
|
7
|
Amortizations
|
-
|
-
|
(6)
|
(6)
|
Balance as of March 31, 2016
|
542
|
1.039
|
135
|
1.716
|
17.
Short and long-term debt
|
Maturity of
the contract
|
Interest
rate
|
Individual
|
Consolidated
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
Short-term debt
|
|
|
|
|
|
|
Local currency:
|
|
|
|
|
|
|
BNDES – Direct (a)
|
Jul 2017
|
TJLP+1.40% p.a.
|
-
|
-
|
3
|
3
|
Debentures V
I
(b)
|
Sep 2018
|
132% from DI
|
-
|
-
|
102
|
125
|
Safra (c)
|
May 2018
|
128% from DI
|
-
|
-
|
33
|
34
|
Safra K-giro (d)
|
Mar 2016
|
111% from DI
|
-
|
-
|
-
|
116
|
Interest
|
-
|
-
|
-
|
-
|
-
|
22
|
Foreign currency (in US$):
|
|
|
|
|
|
|
J.P. Morgan (e)
|
Mar 2018
|
1.09% p.a.
|
-
|
-
|
48
|
72
|
Finimp (f)
|
Fev 2017
|
3.82% p.a.
|
-
|
-
|
271
|
389
|
Engine Facility (Cacib) (g)
|
Jun 2021
|
Libor 3m+2.25% p.a.
|
-
|
-
|
20
|
21
|
Interest accrued
|
-
|
-
|
62
|
128
|
62
|
127
|
|
|
|
62
|
128
|
539
|
909
|
Financial leases
|
Jul 2025
|
4.97% p.a.
|
-
|
-
|
298
|
488
|
Total short-term debt
|
|
|
62
|
128
|
837
|
1,397
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
|
|
Local currency:
|
|
|
|
|
|
|
BNDES – Direct (a)
|
Jul 2017
|
TJLP+1.40% p.a.
|
-
|
-
|
1
|
2
|
Debêntures VI (b)
|
Sep 2019
|
132% from CDI
|
-
|
-
|
927
|
926
|
Safra (c)
|
May 2018
|
128% from CDI
|
-
|
-
|
54
|
50
|
Foreign currency (in US$):
|
|
|
-
|
-
|
-
|
-
|
J.P. Morgan (e)
|
|
|
-
|
-
|
43
|
65
|
Engine Facility (Cacib) (g)
|
Mar 2018
|
1.09% p.a.
|
-
|
-
|
189
|
213
|
Senior bond I (h)
|
Jun 2021
|
Libor 3m+2.25% p.a.
|
239
|
322
|
239
|
322
|
Senior bond II (i)
|
Apr 2017
|
7.63% p.a.
|
617
|
617
|
617
|
617
|
Senior bond III (j)
|
Jul 2020
|
9.65% p.a.
|
125
|
137
|
116
|
128
|
Senior bond IV (k)
|
Jan 2022
|
11.30% p.a.
|
1,141
|
1,252
|
1,141
|
1,252
|
Perpetual bond (l)
|
-
|
8.75% p.a.
|
712
|
781
|
636
|
699
|
Term loan (m)
|
Aug 2020
|
6.70% p.a.
|
1,028
|
1,130
|
1,028
|
1,129
|
|
|
|
3,862
|
4,239
|
4,991
|
5,403
|
Financial lease
|
Jul 2025
|
4.97% p.a.
|
-
|
-
|
2,040
|
2,505
|
Total long-term debt
|
|
|
3,862
|
4,239
|
7,031
|
7,908
|
|
|
|
|
|
|
|
Total
|
|
|
3,924
|
4,367
|
7,868
|
9,305
|
45
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
(a)
Credit
line obtained on June 27, 2012 for the expansion of the aircraft maintenance
center.
(b)
Full early
settlement of debentures from VRG on September 30, 2015, repaid with funds
raised through issuance of Debentures VI.
(c)
Credit
line from Webjet.
(d)
Working
capital loan raised by VRG with Safra.
(e)
Issuance
of 3 series of Guaranteed Notes to finance engine maintenance. For further
information, see Note 11.4.
(f)
Credit
line with Banco do Brasil and Safra of import financing for purchase of spare
parts and aircraft equipment.
(g)
Credit
line raised on September 30, 2014 with Credit Agricole.
(h)
Issuance
of bonds by Gol Finance on March 22, 2007, which was used on pre-payments of
financing for purchase of aircraft.
(i)
Issuance
of bonds by Gol Finance on July 13, 2010 in order to repay debts held by the
Company.
(j)
Issuance
of bonds by VRG on February 7, 2013 in order to finance the repayment of debts.
The total amount of bonds was transferred to Gol LuxCo, along with the financial
investments acquired on the date of issuance, and a portion of the loan was
prepaid.
(k)
Issuance
of bonds by Gol LuxCo on September 24, 2014 in order to finance the repurchase
of the Senior Bonds I, II and III.
(l)
Issuance
of bonds by Gol Finance on April 05, 2006 to finance aircraft purchase and
repayment of loans.
(m)
Issuance
of term loan by Gol LuxCo on August 31, 2015 in order to finance the acquisition
of aircraft and repayment of loans, with third party guarantee from
Delta.
The
total debt includes debt issuance costs of R$100 (R$106 as of December 31,
2015), which will be amortized over the maturity of the related
debt.
The
maturities of long-term debt as of March 31, 2016 are as follows:
46
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
|
2017
|
2018
|
2019
|
2020
|
Thereafter
|
Without
maturity date
|
Total
|
Individual
|
|
|
|
|
|
|
|
Foreign
currency (US$):
|
|
|
|
|
|
|
|
Senior Bonds I
|
239
|
-
|
-
|
-
|
-
|
-
|
239
|
Senior Bonds II
|
-
|
-
|
-
|
617
|
-
|
-
|
617
|
Senior Bonds III
|
-
|
-
|
-
|
-
|
125
|
-
|
125
|
Senior Bonds IV
|
-
|
-
|
-
|
-
|
1,141
|
-
|
1,141
|
Perpetual
Bonds
|
-
|
-
|
-
|
-
|
-
|
712
|
712
|
Term
Loan
|
-
|
-
|
-
|
1,028
|
-
|
-
|
1,028
|
Total
|
239
|
-
|
-
|
1,645
|
1,266
|
712
|
3,862
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
Local
currency:
|
|
|
|
|
|
|
|
BNDES
|
1
|
-
|
-
|
-
|
-
|
-
|
1
|
Debentures
VI
|
150
|
400
|
377
|
-
|
-
|
-
|
927
|
Safra
|
33
|
21
|
-
|
-
|
-
|
-
|
54
|
Foreign
currency (US$):
|
|
|
|
|
|
|
|
J.P.
Morgan
|
31
|
12
|
-
|
-
|
-
|
-
|
43
|
Engine
Facility (Cacib)
|
21
|
21
|
21
|
21
|
105
|
-
|
189
|
Senior Bonds I
|
239
|
-
|
-
|
-
|
-
|
-
|
239
|
Senior Bonds II
|
-
|
-
|
-
|
617
|
-
|
-
|
617
|
Senior Bonds III
|
-
|
-
|
-
|
-
|
116
|
-
|
116
|
Senior Bonds IV
|
-
|
-
|
-
|
-
|
1,141
|
-
|
1,141
|
Perpetual
Bonds
|
-
|
-
|
-
|
-
|
-
|
636
|
636
|
Term
loan
|
-
|
-
|
-
|
1,028
|
-
|
-
|
1,028
|
Total
|
475
|
454
|
398
|
1,666
|
1,362
|
636
|
4,991
|
The fair
value of senior and perpetual bonds as of March 31, 2016 is as
follows:
|
Individual
|
Consolidated
|
|
Book
value
|
Fair
value
|
Book
value
|
Fair
value
|
Senior bonds
|
2,122
|
898
|
2,113
|
898
|
Perpetual bonds
|
712
|
219
|
636
|
196
|
Senior
and Perpetual Bonds’ fair values are obtained through the current market
quotations.
17.1.
Covenants
Long-term debt (excluding perpetual bonds and finance leases) in the
total amount of R$4,355 as of March 31, 2016 (R$4,704 as of December 31, 2015),
have restrictive covenants, including but not limited to those that require the
Company to maintain the liquidity requirements and the coverage of expenses with
interest.
The
Company has restrictive covenants on the Term Loan and Debentures VI with the
following financial institutions: Bradesco and Banco do Brasil, with semi-annual
measurements. The restrictive covenants are: (i) net debt/EBITDAR below 7.76,
and (ii) debt coverage ratio of at least 1.56. The next measurement will occur
until June 30, 2016. The Company performs continuous monitoring in order to
identify potential events that may affect the restrictive
clauses.
47
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
17.2.
New loans in the period ended in March
31, 2016
During
the quarter the Company raised new loans as described below:
Import financing (Finimp):
The
Company, through its subsidiary VRG, re-negotiated the agreements maturity from
operations that are part of a line of credit that the Company mantains for
import financing, in order to purchase spare parts and equipment for aircraft.
Funding operations are as follows:
Original
|
Financial
institution
|
Principal Amount
|
Interest
|
New maturity
|
Raising
date
|
(US$)
|
(R$)
|
rate (p.a.)
|
date
|
03/09/2015
|
Banco do Brasil
|
5
|
17
|
4.20%
|
02/11/2017
|
05/18/2015
|
Banco do Brasil
|
9
|
31
|
4.19%
|
02/01/2017
|
10/31/2015
|
Banco do Brasil
|
5
|
19
|
4.45%
|
01/16/2017
|
In the
quarter ended March 31, 2016, the Company paid the amount of R$94 relating to
the Finimp operations.
Other
loans and financing have not suffered contractual changes during the quarter
ended March 31, 2016.
17.3.
Finance leases
The
future payments of finance agreements indexed to U.S. Dollar are detailed as
follows:
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
2016
|
371
|
629
|
2017
|
451
|
560
|
2018
|
449
|
550
|
2019
|
426
|
461
|
2020
|
307
|
329
|
Thereafter
|
783
|
862
|
Total minimum lease
payments
|
2,787
|
3.391
|
Less total interest
|
(449)
|
(398)
|
Present value of minimum lease
payments
|
2,338
|
2.993
|
Less current portion
|
(298)
|
(488)
|
Noncurrent portion
|
2,040
|
2.505
|
The
discount rate used to calculate the present value of the minimum lease payments
was 4.43% as of March 31, 2016 (4.91% as of December 31, 2015). There are no
significant differences between the present value of minimum lease payments and
the fair value of these financial liabilities.
48
|
Notes to the interim financial information
March 31, 2016
(In millions of Brazilian Reais - R$, except when indicated otherwise)
|
The Company extended the maturity date of the financing for some of its aircraft leased for 15 years using the SOAR framework (mechanism for extending financing amortization and repayment), which enables the performance of calculated withdrawals to be settled at the end of the lease agreement. As of March 31, 2016, the amounts of withdrawals for the repayment at maturity date of the lease agreements totaled R$309 (R$277 as of December 31, 2015).
18.
Taxes payable
|
Consolidated
|
|
03
/31/2016
|
12/31/2015
|
PIS e COFINS
|
73
|
76
|
ICMS installments (Refis)
|
1
|
1
|
Withholding income tax on salaries
|
23
|
28
|
ICMS
|
42
|
39
|
Tax on import
|
4
|
4
|
IRPJ and CSLL payable
|
25
|
-
|
Others
|
7
|
10
|
|
175
|
158
|
|
|
|
Current
|
136
|
119
|
Noncurrent
|
39
|
39
|
19.
Advance ticket sales
As of March 31, 2016, the balance of transport to perform classified in current liabilities was R$878 (R$1,207 as of December 31, 2015) and is represented by 3,567,330 tickets sold and not yet used (4,464,876 as of December 31, 2015) with an average use of 58 days (36 days as of December 31, 2014).
20.
Mileage program
As of March 31, 2016, the balance of Smiles loyalty program deferred revenue was R$778 (R$770 as of December 31, 2015) and R$221 (R$221 as of December 31, 2015) classified in the current and noncurrent liabilities, respectively, and the number of outstanding miles as of March 31, 2016 amounted to 42,831,878,304 (44,424,598,123 as of December 31, 2015).
21.
Provisions
|
Insurance provision
|
Provision for aircraft
and engine return (a)
|
Provision for legal proceedings (b)
|
Total
|
Balances on December 31, 2015
|
1
|
726
|
144
|
871
|
Additional provisions recognized
|
1
|
50
|
10
|
61
|
Utilized provisions
|
(1)
|
(15)
|
1
|
(15)
|
Foreign exchange variation
|
-
|
(68)
|
-
|
(68)
|
Balances on March 31, 2016
|
1
|
693
|
155
|
849
|
|
|
|
|
|
As of December 31, 2015
|
|
|
|
|
Current
|
1
|
206
|
-
|
207
|
Noncurrent
|
-
|
520
|
144
|
664
|
|
-
|
726
|
144
|
871
|
|
|
|
|
|
As of March 31, 2016
|
|
|
|
|
Current
|
1
|
191
|
-
|
192
|
Noncurrent
|
-
|
502
|
155
|
657
|
|
1
|
693
|
155
|
849
|
49
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
(a)
Provision for aircraft and engines return
The
provision for aircraft and engine return considers the costs that meet the
contractual conditions for the return of engines maintained under operating
leases, as well as the costs to reconfigure the aircraft without purchase
option, as described in the return conditions of the lease contracts, and which
is capitalized in property, plant and equipment (aircraft
reconfigurations/overhauling).
(b)
Provision for legal proceedings
As of
March 31, 2016 the Company and its subsidiaries are
facing
to 26,101
(8,656 labor and 17,445 civil) lawsuits and administrative proceedings. The
lawsuits and administrative proceedings are classified into Operational (those
arising from the Company’s normal course of operations), and Succession (those
arising from the succession of former Varig S.A. obligations).
Under
this classification, the number of proceedings is as follows:
|
Operational
|
Succession
|
Total
|
Civil lawsuits
|
15,622
|
226
|
15,848
|
Civil proceedings
|
1,596
|
1
|
1,597
|
Labor lawsuits
|
5,512
|
2,926
|
8,438
|
Labor proceedings
|
216
|
2
|
218
|
|
22,946
|
3,155
|
26,101
|
The
civil lawsuits are primarily related to compensation claims generally related to
flight delays and cancellations, baggage loss and damage. The labor claims
primarily consist of discussions related to overtime, hazard pay, and wage
differences.
The
provisions related to civil and labor suits, whose likelihood of loss is
assessed as probable are as follows:
|
03/31/2016
|
12/31/2015
|
Civil
|
74
|
70
|
Labor
|
8
1
|
74
|
|
155
|
144
|
50
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
Provisions are reviewed based on the progress of the proceedings and
history of losses based on the best current estimate for labor and civil
lawsuits.
There
are other civil and labor lawsuits assessed by management and its legal counsel
as possible risk of loss, in the estimated amount as of March 31, 2016 of R$30
for civil claims and R$58 for labor claims (R$22 and R$54 as of December 31,
2015 respectively), for which no provisions are recognized.
The tax
lawsuits below were evaluated by the Company’s management and its legal counsels
as being relevant and with possible risk of loss as of March 31,
2016:
·
GLAI is
discussing the non-incidence of taxation of PIS and COFINS on revenues generated
by the interest attributable to shareholders’ equity in the amount of R$51
related to the years from 2006 to 2008, paid by its subsidiary GTA Transportes
Aéreos S.A., succeeded by VRG on September 25, 2008. According to the opinion of
the Company’s legal counsel and based on the jurisprudence occurred in recent
events, the Company classified this case as possible loss, without a provision
registered for the related amount. Additionally, the Company maintains escrow
deposits with Bic Banco with a partial guarantee on the lawsuit of R$20 as
disclosed in Note 6.
·
Tax on
Services (ISS), the amount of R$18 (R$17 as of December 31, 2015) arising from
assessment notices issued by the Municipality of São Paulo against the Company,
in the period from January 2007 to December 2010 regarding a possible ISS
taxation on partnerships. The classification of the possible risk of loss is a
result from the matters under discussion and are interpretative, and involves
discussions of factual and evidential materials, and has no final positioning of
the Superior Courts.
·
Customs
Penalty in the amount of R$41 (R$18 as of December 31, 2015) relating to
assessment notices issued against the Company for alleged breach of customs
rules regarding procedures for temporary import of aircraft. The classification
of possible risk is a result of the absence of a final positioning of the
Superior Courts.
·
BSSF
goodwill (BSSF Air Holdings), in the amount of R$46 (R$45 as of December 31,
2015) related to infraction notices due to the deductibility of the goodwill
allocated to future profitability. The classification of possible risk is a
result of the absence of a final positioning of the Superior
Courts.
·
VRG’s
goodwill in the amount of R$67 (R$66 as of December 31, 2015) resulted from
assessment notice related to the deductibility of the goodwill classified as
future profitability. The classification of possible risk of loss arises from
the absence of a final opinion from the Superior Courts.
·
ICMS in
the amount of R$20 (R$20 as of December 31, 2015) from assessment notice issued
for alleged understated (or incomplete declaration) amounts related to air
transportation revenue to the tax authorities of the State of Ceará in from 2010
and 2011.
51
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
·
Tax on
Industrialized Products (IPI): supposedly levied on the importation of aircraft
in the amount of R$104 (R$101 as of December 31, 2015).
There
are other lawsuits considered by the Company’s Management and its legal counsels
as possible risk, in the estimated amount of R$37 (R$58 as of December 31, 2015)
which added to the lawsuits mentioned above, totaled R$384 (R$364 as of December
31, 2015).
22.
Equity
22.1.
Capital stock
As of March 31, 2016, the Company’s capital stock was R$3,080 and
represented by 5,238,421,108 shares, comprised by 5,035,037,140 common shares
and 203,383,968 preferred shares.
The
Fundo de Investimento em Participações Volluto (“Fundo Volluto”) is the
Company’s controlling shareholder, which is equally controlled by Constantino de
Oliveira Júnior, Henrique Constantino, Joaquim Constantino Neto and Ricardo
Constantino.
The Company’s shares are held as follows:
|
03/31/2016
|
12/31/2015
|
|
Common
|
Preferred
|
Common
|
Preferred
|
Common
|
Preferred
|
Fundo Volluto
|
100.00%
|
33.88%
|
61.28%
|
100.00%
|
33.88%
|
61.28%
|
Delta Airlines, Inc.
|
-
|
16.19%
|
9.48%
|
-
|
16.19%
|
9.48%
|
Treasury shares
|
-
|
0.74%
|
0.43%
|
-
|
0.75%
|
0.44%
|
Other
|
-
|
1.06%
|
0.62%
|
-
|
1.05%
|
0.61%
|
Free
float
|
-
|
48.13%
|
28.19%
|
-
|
48.13%
|
28.19%
|
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
|
|
|
|
|
|
|
The authorized capital stock was R$4 billion, as of March 31, 2016.
Within the authorized limit, the Company can, once approved by the Board of
Directors, increase its capital regardless of any amendment to its by-laws, by
issuing shares, without necessarily maintaining the proportion between the
different types of shares. Under the law terms, in case of capital increase, the
Board of Directors will define the issuance conditions, including pricing and
payment terms.
22.2.
Dividends
The Company’s by-laws provide for a mandatory minimum dividend to be
paid to common and preferred shareholders, at least 25% of annual adjusted net
income after allocation to reserves in accordance with the Brazilian Corporate
Law.
22.3.
Treasury shares
52
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
During the quarter ended March 31, 2016, the Company transferred
31,649 restricted shares to its beneficiaries (19,093 restricted shares on
quarter ended March 31, 2015).
As of March 31, 2016, the Company had 1,495,120 treasury shares,
totaling R$2
3
,
with a market value of R$4 (1,526,769 treasury shares, totaling R$23 with a
market value of R$4 as of December 31, 2015).
22.4.
Share-based payments
As of March 31, 2016, the balance of share-based payments reserve was
R$106 (R$103 as of December 31, 2015).
22.5.
Other
comprehensive income (loss)
The fair value measurement of financial instruments designated as
cash flow hedges is recognized in “Other comprehensive income (loss)”, net of
tax effects. The balance as of March 31, 2016 corresponds to a net loss of R$191
(net loss of R$179 as of December 31, 2015).
22.6.
Share issuance costs
As of March 31, 2016 and December 31, 2015, the balance of share
issuance costs was R$42 on the individual and R$155 on
consolidated
23.
Revenue
|
Consolidated
|
|
03/31/2016
|
03/31/2015
|
Passenger transportation
|
2,428
|
2,321
|
Cargo
|
75
|
72
|
Miles revenue
|
144
|
85
|
Other revenue (*)
|
237
|
173
|
Gross revenue
|
2,884
|
2,651
|
|
|
|
Related tax
|
(171)
|
(145)
|
Net revenue
|
2,713
|
2,506
|
(*) Includes revenues from unused passenger tickets, reissued tickets
and cancellation of flight tickets of R$64 (R$61 as of March, 31
2015).
The revenues are net of federal, state and municipal taxes, which are
paid and transferred to the appropriate government entities.
Revenue by geographical location is as follows:
|
Consolidated
|
|
03/31/2016
|
%
|
03/31/2015
|
%
|
Domestic
|
2,209
|
81.4
|
2,226
|
88.8
|
International
|
504
|
18.6
|
280
|
11.2
|
Net revenue
|
2,713
|
100.0
|
2,506
|
100.0
|
53
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
24.
Costs
of services, administrative and selling expenses
24.1.
Individual
|
03/31/2016
|
%
|
03/31/2015
|
%
|
Salaries (a)
|
(1)
|
(0.5)
|
(2)
|
(40.0)
|
Services rendered
|
(1)
|
(0.5)
|
(1)
|
(20.0)
|
Sale-leaseback transactions (b)
|
213
|
101.5
|
8
|
160.0
|
Other operating
expenses
|
(1)
|
(0.5)
|
-
|
-
|
|
210
|
100.0
|
5
|
100,0
|
24.2.
Consolidated
|
Consolidated
|
|
03/31/2016
|
|
Cost of
services
|
Selling expenses
|
Administrative expenses
|
Other operating income
|
Total
|
%
|
Salaries
(a)
|
(324)
|
(10)
|
(80)
|
-
|
(414)
|
18.3
|
Aircraft
fuel
|
(757)
|
-
|
-
|
-
|
(757)
|
33.3
|
Aircraft
rent
|
(324)
|
-
|
-
|
-
|
(324)
|
14.3
|
Aircraft
insurance
|
(8)
|
-
|
-
|
-
|
(8)
|
0.4
|
Maintenance materials and
repairs
|
(128)
|
-
|
-
|
-
|
(128)
|
5.6
|
Aircraft
traffic
and mileage services
|
(148)
|
(63)
|
(60)
|
-
|
(271)
|
12.0
|
Sales and
marketing
|
-
|
(119)
|
-
|
-
|
(119)
|
5.2
|
Landing
fees
|
(189)
|
-
|
-
|
-
|
(189)
|
8.4
|
Depreciation and amortization
|
(115)
|
-
|
-
|
-
|
(115)
|
5.1
|
Sale-leaseback transactions
(b)
|
-
|
-
|
-
|
213
|
213
|
(9.4)
|
Other,
net
|
(106)
|
(7)
|
(47)
|
-
|
(160)
|
6.8
|
|
(2,099)
|
(199)
|
(187)
|
213
|
(2,272)
|
100.0
|
54
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
|
Consolidated
|
|
03/31/2015
|
|
Cost of
services
|
Selling expenses
|
Administrative expenses
|
Other operating income
|
Total
|
%
|
Salaries
(a)
|
(339)
|
(16)
|
(57)
|
-
|
(412)
|
17.5
|
Aircraft fuel
|
(787)
|
-
|
-
|
-
|
(787)
|
33.5
|
Aircraft
rent
|
(215)
|
-
|
-
|
-
|
(215)
|
9.1
|
Aircraft
insurance
|
(6)
|
-
|
-
|
-
|
(6)
|
0.3
|
Maintenance materials and
repairs
|
(147)
|
-
|
-
|
-
|
(147)
|
6.2
|
Aircraft
traffic and mileage services
|
(103)
|
(51)
|
(78)
|
-
|
(232)
|
9.9
|
Sales and
marketing
|
-
|
(124)
|
-
|
-
|
(124)
|
5.3
|
Landing
fees
|
(169)
|
-
|
-
|
-
|
(169)
|
7.2
|
Depreciation and amortization
|
(81)
|
-
|
(19)
|
-
|
(100)
|
4.3
|
Sale-leaseback transactions
(b)
|
-
|
-
|
-
|
8
|
8
|
(0.4)
|
Other,
net
|
(116)
|
(15)
|
(35)
|
-
|
(166)
|
7.1
|
|
(1,963)
|
(206)
|
(189)
|
8
|
(2,350)
|
100.0
|
(a)
The Company recognizes the cost of the Audit Committee and Board of
Directors
in
"
Salaries".
(b)
During the quarter ended March 31, 2016, the amount of R$213 (R$ 8 on
March 31, 2015) is composed of the gain recognized in full respect of 8
aircraft, including 6 aircraft were renegotiated as Note 15, 1 aircraft received
in sale-leaseback transaction, and 1 trading aircraft sales (1 aircraft
sale-leaseback transactions for the quarter ended March 31,
2015).
25.
Financial income (expense)
|
Individual
|
Consolidated
|
|
03/31/2016
|
03/31/2015
|
03/31/2016
|
03/31/2015
|
Financial income
|
|
|
|
|
Income from derivatives
|
-
|
2
|
17
|
77
|
Income from short-term investments and
investment funds
|
2
|
-
|
54
|
57
|
Monetary variation
|
1
|
1
|
3
|
3
|
Taxes on financial income
(*)
|
-
|
-
|
(6)
|
-
|
Other
|
20
|
-
|
4
|
3
|
|
23
|
3
|
72
|
140
|
Financial expenses
|
|
|
|
|
Losses from derivatives
|
-
|
-
|
(64)
|
(9)
|
Interest on short and long-term
debt
|
(90)
|
(53)
|
(238)
|
(173)
|
Bank charges and expenses
|
(3)
|
(2)
|
(9)
|
(11)
|
Losses with financial
investments
and
funds
|
-
|
-
|
-
|
(26)
|
Other
|
(2)
|
(1)
|
(2
7
)
|
(
13
)
|
|
(95)
|
(56)
|
(339)
|
(233)
|
|
|
|
|
|
Exchange rate variation,
net
|
240
|
(371)
|
653
|
(774)
|
|
|
|
|
|
Total
|
168
|
(424)
|
386
|
(867)
|
(*)
Relative to taxes on financial income (PIS and COFINS), according to the Decree
nº8,426 from April 1, 2015.
26.
Operating segments
Operating segments are defined as business activities from which it
may earn revenues and incur
expenses, which operating results are regularly reviewed by the
relevant decision makers to evaluate performance and allocate resources to the
segments. The Company holds two operating segments: the flight transportation
and the Smiles loyalty program.
55
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
The
accounting policies of the operating segments are the same as those applied to
the consolidated financial statements. Additionally, the Company has distinct
natures between the two reportable segments, so there are no common costs and
revenues between operating segments.
The
Company is the controlling shareholder of Smiles, and the non-controlling
interest of Smiles was 45.9% and 45.8% as of March 31, 2016 and 2015,
respectively.
The
information below presents the summarized financial position related to
reportable segments as of March 31, 2016 and 2015:
26.1.
Assets and liabilities of the operating
segment
|
03/31/2016
|
|
Flight
transportation
|
Smiles loyalty
program
|
Combined
information
|
Eliminations
|
Total
consolidated
|
Assets
|
|
|
|
|
|
Current
|
1,516
|
1,504
|
3,020
|
(682)
|
2,338
|
Noncurrent
|
7,135
|
527
|
7,662
|
(456)
|
7,206
|
Total assets
|
8,651
|
2,031
|
10,682
|
(1,138)
|
9,544
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current
|
4,649
|
1,199
|
5,848
|
(973)
|
4,875
|
Noncurrent
|
7,854
|
222
|
8,076
|
165
|
8,241
|
Total equity (deficit)
|
(3,852)
|
610
|
(3,242)
|
(330)
|
(3,572)
|
Total liabilities and
equity
|
8,651
|
2,031
|
10,682
|
(1,138)
|
9,544
|
|
12/31/2015
|
|
Flight
transportation
|
Smiles loyalty
program
|
Combined
information
|
Eliminations
|
Total
consolidated
|
Assets
|
|
|
|
|
|
Current
|
1,717
|
1,447
|
3,164
|
(702)
|
2,462
|
Noncurrent
|
7,850
|
218
|
8,068
|
(161)
|
7,907
|
Total assets
|
9,567
|
1,665
|
11,232
|
(863)
|
10,369
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current
|
5,324
|
954
|
6,278
|
(734)
|
5,544
|
Noncurrent
|
8,789
|
223
|
9,012
|
136
|
9,148
|
Total equity
(deficit)
|
(4,546)
|
488
|
(4,058)
|
(265)
|
(4,323)
|
Total liabilities and
equity
|
9,567
|
1,665
|
11,232
|
(863)
|
10,369
|
26.2.
Income and expenses of the operational
segment
|
03/31/2016
|
|
Flight
transportation
|
Smiles loyalty
program
|
Combined
information
|
Eliminations
|
Total
consolidated
|
Net revenue
|
|
|
|
|
|
Passenger (a)
|
2,353
|
-
|
2,353
|
86
|
2,439
|
Cargo and other (a)
|
177
|
102
|
279
|
(88)
|
191
|
Miles revenue (a)
|
-
|
249
|
249
|
(166)
|
83
|
Costs (b)
|
(2,050)
|
(190)
|
(2,240)
|
152
|
(2,088)
|
Gross profit
|
480
|
161
|
641
|
(16)
|
625
|
|
|
|
|
|
|
Operating
(expenses)
|
|
|
|
|
|
Sales and marketing
|
(203)
|
(18)
|
(221)
|
22
|
(199)
|
Administrative
expenses
|
(185)
|
(14)
|
(199)
|
1
|
(198)
|
Other operating income,
net
|
213
|
-
|
213
|
-
|
213
|
|
(175)
|
(32)
|
(207)
|
23
|
(184)
|
|
|
|
|
|
|
Equity results
|
69
|
(4)
|
65
|
(69)
|
(4)
|
|
|
|
|
|
|
Finance results
|
|
|
|
|
|
Financial income
|
48
|
50
|
98
|
(26)
|
72
|
Financial expense
|
(365)
|
-
|
(365)
|
26
|
(339)
|
Exchange rate changes, net
|
64
6
|
7
|
65
3
|
-
|
65
3
|
|
32
9
|
57
|
386
|
-
|
386
|
|
|
|
|
|
|
Income (loss) before income
tax
|
70
3
|
182
|
88
5
|
(62)
|
82
3
|
|
|
|
|
|
|
Current and deferred income
taxes
|
-
|
(63)
|
(63)
|
(3)
|
(66)
|
Total income (loss), net
|
70
3
|
119
|
82
2
|
(65)
|
75
7
|
|
|
|
|
|
|
Attributable to equity holders of the
parent
|
70
3
|
65
|
76
8
|
(65)
|
70
3
|
Attributable to non-controlling
interests
|
-
|
54
|
54
|
-
|
54
|
56
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
|
03/31/2015
|
|
Flight
transportation
|
Smiles loyalty
program
|
Combined
information
|
Eliminations
|
Total
consolidated
|
Net revenue
|
|
|
|
|
|
Passenger (a)
|
2,164
|
-
|
2,164
|
64
|
2,228
|
Cargo and other (a)
|
232
|
-
|
232
|
(5)
|
227
|
Miles revenue (a)
|
-
|
246
|
246
|
(195)
|
51
|
Costs (b)
|
(1,953)
|
(132)
|
(2,085)
|
122
|
(1,963)
|
Gross profit
|
443
|
114
|
557
|
(14)
|
543
|
|
|
|
|
|
|
Operating (expenses)
|
|
|
|
|
|
Sales and marketing
|
(187)
|
(20)
|
(207)
|
1
|
(206)
|
Administrative
expenses
|
(187)
|
(8)
|
(195)
|
6
|
(189)
|
Other operating income,
net
|
8
|
-
|
8
|
-
|
8
|
|
(366)
|
(28)
|
(394)
|
7
|
(387)
|
|
|
|
|
|
|
Equity results
|
38
|
(1)
|
37
|
(38)
|
(1)
|
|
|
|
|
|
|
Finance results
|
|
|
|
|
|
Financial income
|
134
|
37
|
171
|
(31)
|
140
|
Financial expense
|
(253)
|
(11)
|
(264)
|
31
|
(233)
|
Exchange rate changes, net
|
(769)
|
(5)
|
(774)
|
-
|
(774)
|
|
|
|
|
|
|
Income (loss) before income
tax
|
(773)
|
106
|
(667)
|
(45)
|
(712)
|
|
|
|
|
|
|
Current and deferred income
taxes
|
76
|
(37)
|
39
|
-
|
39
|
Total income (loss), net
|
(697)
|
69
|
(628)
|
(45)
|
(673)
|
|
|
|
|
|
|
Attributable to equity holders of the
parent
|
(697)
|
69
|
(628)
|
(77)
|
(705)
|
Attributable to non-controlling
interests
|
-
|
-
|
-
|
32
|
32
|
(a) The eliminations are related to transactions between
VRG and Smiles.
(b)
Include depreciation and amortization expenses of R$115 in 2016, comprised by:
R$114 in flight transportation and R$1 in Smiles loyalty program (R$420 and R$3,
respectively, in the year ended December 31,
2015).
57
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
In the
individual financial statements of Smiles, which represents the segment Smiles
Loyalty Program and in the information provided to the relevant decision makers,
the revenue recognition occurs upon redemption of the miles by the participants.
Under the perspective of Smiles, this measurement is appropriate given that this
is when the revenue recognition cycle is complete. At this point, Smiles has
transferred to its suppliers the obligation to provide services or deliver
products to its customers.
However,
from a consolidated perspective, the revenue recognition cycle related to miles
exchanged for flight tickets is only complete when the passengers are
effectively transported. Therefore, for purposes of reconciliation with the
consolidated assets, liabilities and income and expenses, as well as for
purposes of equity method of accounting and for consolidation purposes, the
Company performed, in addition to eliminations entries, consolidating
adjustments to adjust the accounting practices related to Smiles’ revenues. In
this case, under the perspective of the consolidated financial statements, the
mileages that were used to redeem airline tickets are only recognized as revenue
when passengers are transported, in accordance with accounting practices and
policies adopted by the Company.
27.
Commitments
As of
March 31, 2016, the Company had 122 firm orders for aircraft acquisitions with
Boeing. These aircraft acquisition commitments include estimates for contractual
price increases during the construction phase. As of December 31, 2015, the
approximate amount of firm orders, not including
the contractual discounts, was R$53,072
(US$14,909) and are segregated according to the following
periods:
58
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
|
03/31/2016
|
12/31/2015
|
2016
|
608
|
1,338
|
2017
|
-
|
-
|
2018
|
1,952
|
2,142
|
2019
|
3,187
|
3,496
|
2020
|
4,884
|
5,357
|
Thereafter
|
42,441
|
46,554
|
|
53,072
|
58,887
|
As of
March 31, 2016, from the total orders mentioned above, the Company had the
amount of R$6,723 (US$1,888) related to advances for aircraft acquisition, to be
disbursed in accordance with the following schedule:
|
03/31/2016
|
12/31/2015
|
2016
|
-
|
7
|
2017
|
313
|
344
|
2018
|
528
|
579
|
2019
|
720
|
790
|
2020
|
913
|
1,001
|
T
hereafter
|
4,249
|
4,660
|
|
6,723
|
7,381
|
The
installment financed by long-term debt with aircraft guarantee through the U.S.
Ex-Im Bank corresponds approximately to 85% of the aircraft total cost. Other
establishments finance the acquisitions with equal or higher percentages,
reaching up to 100%.
The
Company performs payments related to aircraft acquisition through its own funds,
short and long-term debt, cash provided by operating activities, short and
medium-term line of credit and supplier financing.
The
Company leases its entire aircraft fleet through a combination of operating and
finance leases. As of March 31, 2016, the total fleet leased was comprised of
143 aircraft, of which 104 were under operating leases and 39 were recorded as
finance leases. The Company holds 35 aircraft under finance leases with purchase
option. During the quarter ended March 31, 2016, the Company received 2 aircraft
and returned 3 aircraft under operating lease contracts.
27.1.
Operating leases
The
future payments of non-cancelable operating lease contracts are denominated in
U.S. dollars, and are as follows:
|
03/31/2016
|
12/31/2015
|
2016
|
848
|
1,270
|
2017
|
1,107
|
1,128
|
2018
|
991
|
1,001
|
2019
|
900
|
905
|
2020
|
851
|
855
|
Thereafter
|
2,697
|
2,591
|
Total
minimum lease payments
|
7,394
|
7,750
|
59
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
27.2.
Sale-leaseback transactions
The
Company recorded a net gain of R$213 due to 8 aircraft transactions, 7
sale-leaseback transactions where one aircraft was received during the quarter
ended March 31, 2016 and 6 aircraft previously classified as fixed assets under
finance leases, according to Note 15.a; and the sale of the right to receive 1
aircraft (net gain of R$ 8 on the first aircraft in the quarter ended March 31,
2015). Given that the results will not be offset against future payments of
leases and were negotiated in accordance with the fair value of the aircraft,
such gains were recognized directly in the income statement.
28.
Financial instruments and risks management
The
Company and its subsidiaries have financial asset and financial liability
transactions, which consist in part of derivative financial instruments. The
financial derivative instruments are used to hedge against the inherent risks
related to the Company’s operations. The Company and its subsidiaries consider
as most relevant risks: fuel price, foreign currency and interest rate. These
risks can be mitigated by using exchange swap derivatives, futures and options
contracts based on oil, U.S. dollar and interest markets. The contracts may be
held by exclusive investment funds, as described in the Company’s Risk
Management Policy.
Management follows a documented guideline when managing its financial
instruments, set out in its Risk Management Policy, which is periodically
revised by the Risk Committee, and approved by the Board of Directors. The Risk
Committee sets the guidelines and limits, monitors controls, including the
mathematical models adopted for a continuous monitoring of exposures and
possible financial effects and also prevents the execution of speculative
financial instruments transactions.
The
Company does not hedge its total risk exposure, and is, therefore, subject to
market fluctuations for a significant portion of its exposed assets and
liabilities. Decisions on the portion to be protected consider the financial
risks and the costs for such protection and are determined and reviewed at least
quarterly in line with the strategies of the Risk Committee. The results from
operations and the application of controls for risk management are part of the
monitoring process by the Risk Committee and have been satisfactory to the
proposed objectives.
The
description of the consolidated account balances and the categories of financial
instruments included in the statements of financial position as of March 31,
2016 and December 31, 2015 is as follows:
|
Measured at fair value through profit or
loss
|
Measured at
amortized cost
(c)
|
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
Assets
|
|
|
|
|
Cash and cash equivalents
|
469
|
737
|
498
|
335
|
Short-term investments (a)
|
189
|
228
|
246
|
264
|
Restricted cash
|
413
|
735
|
-
|
59
|
Derivative assets
|
-
|
2
|
-
|
-
|
Trade receivables
|
-
|
-
|
514
|
463
|
Deposits (b)
|
-
|
-
|
801
|
691
|
Other assets
|
-
|
-
|
219
|
157
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Debt
|
-
|
-
|
7,868
|
9,305
|
Suppliers
|
-
|
-
|
952
|
901
|
Derivative liabilities
|
160
|
141
|
-
|
-
|
(a)
The
Company manages its financial investments as held for trading to pay its
short-term operational expenses.
(b)
Excludes
judicial deposits, as described in Note 10.
(c)
Items
classified as amortized cost refer to credits, debt with private institutions
which, in any early settlement, there are no substantial changes in relation to
the values recorded, except the amounts related to Perpetual Bonds and Senior
Notes, as disclosed on Note 17. The fair values approximate to the book values,
according to the short term maturity period of these assets and liabilities.
60
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
The Company
did not have financial assets classified as available for sale as of March 31,
2016 and December 31, 2015.
The
derivative financial instruments were recognized as follows:
|
Foreign
currency
|
Interest
rate
|
Derivatives
of equity
instruments
|
Asset (liability) as of December 31, 2015
(*)
|
2
|
(141)
|
(139)
|
Fair value variations:
|
|
|
|
Net losses recognized in results
(A)
|
(17)
|
-
|
(17)
|
Losses recognized in other comprehensive income
(loss)
|
-
|
(51)
|
(51)
|
Settlements during the period
|
8
|
39
|
47
|
Asset (liability) as of March 31, 2016
(*)
|
(7)
|
(15
3
)
|
(1
60
)
|
Movement of other comprehensive
results
|
Foreign
currency
|
Interest
rate
|
Derivatives
of equity
instruments
|
Balance
as of December 31, 2015
|
-
|
(179)
|
(179)
|
Fair value adjustments during the
period
|
-
|
(51)
|
(51)
|
Reversal, net to profit or loss (B)
|
-
|
33
|
33
|
Tax effect
|
-
|
6
|
6
|
Balance as of March 31,
2016
|
-
|
(191)
|
(191)
|
|
|
|
|
Effects on the 2016 results
(A+B)
|
(17)
|
(33)
|
(50)
|
|
|
|
|
Operating costs and expenses
|
-
|
(3)
|
(3)
|
Financial income (expense)
|
(17)
|
(30)
|
(47)
|
(*) Classified as "Derivatives assets" if the amount
results in an asset or "Derivatives liabilities" if the amount results in a
liability.
61
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
The Company
adopts hedge accounting for derivatives contracted to hedge interest rate risk
classified as cash flow hedge according to CPC38 - Financial Instruments -
Recognition and Measurement. As of March 31, 2016, the Company records the
interest rate hedge as a cash flow hedge and the other derivatives related to
foreign exchange and fuel as economic hedge.
The
Company has deposits in guarantee for derivative transactions as described in
Note 6.
a)
Market
risks
i.
Fuel price risk
The
aircraft fuel price fluctuates both in the short and in the long-term, in line
with crude oil and oil by product price fluctuations. To mitigate the risk of
fuel price, the Company contracts derivative financial instruments referenced
mainly to crude oil and, eventually, to their derivatives, also contracted,
directly with the local supplier, for future fuel deliveries to aircraft at
predetermined prices. During the quarter ended March 31, 2016, the Company has
no outstanding fuel derivative contracts.
ii.
Foreign currency risk
Foreign
risk derives from the possibility of unfavorable fluctuation of foreign
currencies to which the Company’s liabilities or cash flows are exposed. To
mitigate the foreign currency risk, the Company contracts derivative financial
instruments that are referenced to the U.S. dollar. During the quarter ended
March 31, 2016, the Company recognized a loss on foreign currency derivatives in
the amount of R$17 (
gain
of R$73 during the quarter
ended March 31, 2015).
The
Company’s foreign currency exposure is as follows:
|
Individual
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
03/31/2016
|
12/31/2015
|
Assets
|
|
|
|
|
Cash and cash equivalents and short-term
investments
|
775
|
565
|
1,058
|
972
|
Trade receivables
|
-
|
-
|
59
|
57
|
Deposits
|
-
|
-
|
801
|
691
|
Derivatives
|
-
|
-
|
-
|
2
|
Other assets
|
-
|
-
|
-
|
4
|
Total assets
|
775
|
565
|
1,918
|
1,726
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Foreign suppliers
|
3
|
-
|
201
|
113
|
Short and long-term debt
|
3,862
|
4,366
|
4,9
91
|
5,034
|
Finance leases
|
-
|
-
|
2,338
|
2,994
|
Other leases payable
|
-
|
-
|
177
|
179
|
Provision for aircraft and engine
return
|
-
|
-
|
693
|
725
|
Other liabilities
|
25
|
28
|
-
|
-
|
Total liabilities
|
3,890
|
4,394
|
8,400
|
9,045
|
Exchange exposure in Reais
|
3,115
|
3,829
|
6,482
|
7,319
|
|
|
|
|
|
Commitments not recorded in the statements of financial
position
|
|
|
|
|
Future commitments resulting from operating
leases
|
-
|
-
|
7,394
|
7,750
|
Future commitments resulting from firm aircraft
orders
|
53,072
|
58,887
|
53,072
|
58,887
|
Total
|
53,072
|
58,887
|
60,466
|
66,637
|
|
|
|
|
|
Total foreign currency exposure -
R$
|
56,187
|
62,716
|
66,948
|
73,956
|
Total foreign currency exposure -
US$
|
15,788
|
16,061
|
18,811
|
18,940
|
Exchange rate (R$/US$)
|
3.5589
|
3.9048
|
3.5589
|
3.9048
|
62
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
iii.
Interest rate risk
The
Company is mainly exposed to lease transactions indexed to variations in the
Libor rate until the aircraft is received. To mitigate such risks, the Company
has derivative financial instruments of interest rate (Libor) swaps. During the
quarter ended March 31, 2016, the Company recognized a total loss with interest
hedging transactions in the amount of R$33 (R$8 during the quarter ended March
31, 2015).
As of
March 31, 2016, the Company and its subsidiaries had interest rate swap
derivatives recorded as hedge accounting.
b)
Credit risk
The
credit risk is inherent in the Company’s operating and financing activities,
mainly represented by trade receivables, cash and cash equivalents, and
short-term investments. Trade receivables credit risk consists of amounts
falling due from the largest credit card companies, with credit risk better than
or equal to those of the Company and its subsidiaries, and receivables from
travel agencies, installment sales, and government sales, with a small portion
exposed to risks from individuals or other entities.
As
defined in the Risk Management Policy, the Company is required to evaluate the
counterparty risks in financial instruments and diversify the exposure.
Financial instruments are contracted with counterparties rated at least as
investment grade by S&P and Moody’s. The financial instruments are mostly
contracted on commodities and futures exchanges (BM&FBOVESPA and NYMEX),
which substantially mitigate the credit risk, derivative transactions contracted
on the OTC market (OTC) have counterparts with a minimum rating of "investment
grade". The Company’s Risk Management Policy establishes a maximum limit of 20%
per counterparty for short-term investments.
c)
Liquidity risk
Liquidity risk takes on two distinct forms: market and cash flow
liquidity risk. The first is related to current market prices and varies in
accordance with the types of assets and the markets where they are traded. Cash
flow liquidity risk, however, is related to difficulties in meeting the
contracted operating
obligations at the maturity dates. That are uncertainty on the
companies solvency and the business plan to mitigate those uncertainties is
disclosed in Note 1.1. In order to mitigate the liquidity risk, the Company
invests its funds according to the Cash Flow Policy, which states that the term
of the debt must be higher than the investment portfolio term.
63
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
The
schedule of financial liability hold by the Company as of March 31, 2016 is as
follows:
|
Current
|
Less than 6 months
|
6 to 12 months
|
1 to 5
years
|
More than
5 years
|
Total
|
Short and long-term debt
|
62
|
-
|
775
|
4,355
|
2,676
|
7,868
|
Suppliers
|
584
|
368
|
-
|
-
|
-
|
952
|
Salaries
|
61
|
67
|
90
|
-
|
-
|
218
|
Taxes payable
|
-
|
136
|
-
|
39
|
-
|
175
|
Landing fees
|
-
|
293
|
-
|
-
|
-
|
293
|
Derivative liabilities
|
-
|
160
|
-
|
-
|
-
|
160
|
Provisions
|
-
|
29
|
163
|
215
|
442
|
849
|
Other liabilities
|
54
|
65
|
94
|
33
|
21
|
267
|
As of March, 31 2016
|
761
|
1,118
|
1,122
|
4,642
|
3,139
|
10,782
|
d)
Capital management
The
Company seeks alternatives to capital in order to meet its operational needs,
aiming a capital structure that takes into account suitable parameters for the
financial costs, the maturities of funding and its guarantees. The Company
monitors its financial leverage ratio, which corresponds to net debt, including
short and long-term debt, divided by total equity (deficit).
The
table below shows the Company’s capital management:
|
Consolidated
|
|
03/31/2016
|
12/31/2015
|
Short and long-term
debt
|
7,868
|
9,305
|
(-) Cash and cash
equivalents
|
(967)
|
(1,072)
|
(-) Short-term
investments
|
(435)
|
(492)
|
(-) Restricted cash
|
(413)
|
(735)
|
Net debt
|
6,053
|
7,006
|
Total equity
(deficit)
|
(3,572)
|
(4,323)
|
Total capital and net
debt
|
2,481
|
2,683
|
The
Company remains committed to maintaining high liquidity and an amortization
profile without pressure on the short-term refinancing.
e)
Sensitivity analysis of financial instruments
The
sensitivity analysis of financial instruments was prepared according to CVM
Instruction 475/08, in order to estimate the impact on the fair value of
financial instruments held by the Company. The analysis considered three
scenarios of different risk variables: most likely scenario, the assessment of
the Company; deterioration of 25% (possible adverse scenario) in the
risk variable, deterioration 50% (remote adverse scenario).
64
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
The
estimates presented do not necessarily reflect the amounts to be reported in
future interim financial information. The use of different methodologies and/ or
assumptions may have a material effect on the estimates
presented.
The
tables below show the sensitivity analysis of foreign currency exposure,
derivatives position and the interest rates on March 31, 2016 to market risks
considered relevant by management. In the tables, positive values are displayed
as asset exposures (assets higher than liabilities) and negative values are
exposed liabilities (liabilities higher than assets).
i.
Individual
Foreign currency risk
As of
March 31, 2016, the Company has a currency exposure of R$3,115. On this date,
the exchange rate adopted was R$3.5598/US$, corresponding to the closing rate of
the month published by Brazil’s Federal Reserve as a likely scenario, and
the impacts analyzed from the variation of 25% and 50% over the current rate are
shown below:
Instrument
|
Risk
|
Exposed
amount
|
Possible adverse
scenario
|
Remote adverse
scenario
|
+25 %
|
+ 50%
|
Liabilities, net
|
Dollar appreciation
|
(3,115)
|
(3,894)*
|
(4,673)*
|
|
|
|
|
|
|
|
D
o
llar
|
4.44863
|
5.33835
|
(*) Negative amounts correspond to net losses in case of
exchange variation.
Consolidated
i)
Fuel risk
As of
March 31, 2016, the Company did not hold fuel derivative
contracts.
ii)
Foreign currency risk
As of
March 31, 2016, the Company
had
U.S. dollar derivative contracts with
notional value of US$35,500, with maturities until June 2016, and a net exchange
exposure liability of R$6,482. At the same date, the Company adopted the closing
exchange rate of R$3.5589/US$ corresponding to the closing rate of the month
published by Brazil’s Federal Reserve as a likely scenario, and the impact
of the change of 25% and 50% over that rate, is as follows:
Instruments
|
Exposure amount
(*)
|
-50%
|
-25%
|
+25%
|
+50%
|
R$1.77945/USD
|
R$2.66918/USD
|
R$4.44863/USD
|
R$5.33835/USD
|
Liabilities, net
|
(6,482)
|
3,241
|
4,862
|
(8,103)
|
(3,241)
|
Derivatives
|
(160)
|
80
|
40
|
(200)
|
(240)
|
|
(6,642)**
|
3,321
|
4,902
|
(8,303)**
|
(3,481)**
|
(*) The
Company believes that the likely values of the liabilities exposed to the U.S.
Dollar correspond to the amounts recorded as of March 31,
2016.
(**) Negative values
correspond to net losses expected in the case of U.S. Dollar
appreciation.
65
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
iii)
Interest risk factor
As of
March 31, 2016, the Company holds financial investments and financial
liabilities indexed to several rates, and Libor interest. In the sensitivity
analysis of non-derivative financial instruments it was considered the impacts
on yearly interest of the exposed values as of March 31, 2016, arising from
fluctuations in interest rates according to the scenarios presented
below:
Instruments
|
Risk
|
Exposure
amount
|
Possible adverse
scenario
25%
|
Adverse scenario
remote
50%
|
Short and
long-term debt, net of short-term investments (*)
|
Increase
in the CDI rate
|
(26)
|
(14)
|
(29)
|
Derivatives
|
Decrease
in the Libor rate
|
(1
52
)
|
(
17
2)
|
(1
99
)
|
(*) Refers to the sum of the values invested and raised
in the market and indexed to CDI, the negative amounts means more debt than
investments.
Measurement of the fair value of financial
instruments
In order
to comply with the disclosure requirements for financial instruments measured at
fair value, the Company and its subsidiaries must classify its instruments in
Levels 1 to 3, based on observable fair value levels:
·
Level 1:
Fair value measurements are calculated based on quoted prices (without
adjustment) in active market or identical liabilities;
·
Level 2:
Fair value measurements are calculated based on other variables besides quoted
prices included in Level 1, that are observable for the asset or liability
directly (such as prices) or indirectly (derived from prices);
and
·
Level 3:
Fair value measurements are calculated based on valuation methods that include
the asset or liability but that are not based on observable market variables
(unobservable inputs).
The
following table shows a summary of the Company’s and its subsidiaries’ financial
instruments measured at fair value, including their related classifications of
the valuation method, as of March 31, 2016 and December 31,
2015:
|
31/03/2016
|
31/12/2015
|
|
Book
value
|
Other significant observable factors (Level
2)
|
Book
value
|
Other significant observable factors (Level
2)
|
Cash and cash equivalents
|
469
|
469
|
737
|
737
|
Short-term investments
|
189
|
189
|
22
8
|
22
8
|
Restricted cash
|
413
|
413
|
735
|
735
|
Derivative assets
|
-
|
-
|
2
|
2
|
Derivative liabilities
|
(160)
|
(160)
|
(141)
|
(141)
|
66
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
29.
Non-cash transactions
Consolidated
During
the quarter ended March 31, 2016, the Company increased its property, plant and
equipment in the amount of R$50 (R$25 during the quarter ended March 31, 2015)
related to an increase of the provision for aircraft return
.
Additionally,
the Company renegotiated finance lease agreements in the amount of R$320, which
was recorded in property, plant and equipment in aircraft held under finance
lease account.
30.
Insurance
As of March 31, 2016, the insurance coverage by nature, considering
the aircraft fleet and related to the maximum reimbursable amounts indicated in
U.S. Dollars, is as follows:
Aeronautical Type
|
In Reais
|
In U.S.
Dollars
|
Guarantee - hull/war
|
15,800
|
4,440
|
Civil liability per event/aircraft (*)
|
2,669
|
750
|
Inventories (*)
|
498
|
140
|
(*) Values per incident and annual aggregate.
Pursuant to
Law 10,744, of October 9, 2003, the Brazilian government assumed the commitment
to complement any civil liability expenses related to third parties caused by
war or terrorist events, in Brazil or abroad, which VRG may be required to pay,
for amounts exceeding the limit of the insurance policies effective since
September 10, 2001, limited to the amount in Brazilian Reais equivalent to 1.0
billion in U.S. Dollars.
67
|
Notes to the
interim financial information
March 31,
2016
(In millions of
Brazilian Reais - R$, except when indicated
otherwise)
|
31.
Subsequent events
On April 29, 2016, the shareholders of Smiles approved the dividends
distribution based on income for the year ended on December 31, 2015 in the
amount of R$270.
On May 03,
2016 , the Company announced the proposed restructuring of up to US$781 million
in non-guarantee debt issued in the international capital markets, including the
Senior Bonds maturing in 2017 , 2020 , 2022 and 2023 and the Perpetual Bonds.
The bondholders may exchange their securities
bonds
denominated in U.S. dollars
for new secured bonds at a premium to their
current market value. The “earlybird” premium
will
be paid to the bondholders who accept the exchange by May 17, 2016. The exchange
offer
is expected to
be completed occur on June 1, 2016.
68
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date:
May
12, 2016
GOL LINHAS AÉREAS INTELIGENTES S.A.
|
|
|
|
|
By:
|
/S/ Edmar Prado Lopes Neto
|
|
Name: Edmar Prado Lopes Neto
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 a ctually 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.
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