goldf1q15_6ka.htm - Generated by SEC Publisher for SEC Filing
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K/A
 
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the month of May, 2015
(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):

 

 

 

 

 

Individual and Consolidated

Interim Financial Information - ITR

 

GOL Linhas Aéreas Inteligentes S.A.

 

March 31, 2015

and Report on Review of Interim Financial Information

 

 


 

 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual and Consolidated Interim Financial Information - ITR

March 31, 2015

 

 

Contents   
 
 
Performance report  01 
Audit committee statement  07 
Directors' statement on the interim financial information  08 
Directors' statement on the auditor’s report on review of interim financial information  09 
Independent auditor’s report on the interim financial information  10 
Capital  12 
 
Individual interim financial information – ITR for the period ended March 31, 2015   
 
Statements of financial position  13 
Statements of operations  15 
Statements of comprehensive loss  16 
Statements of cash flows  17 
Statements of changes in equity  18 
Statements of value added  20 
 
Consolidated interim financial information - ITR for the period ended March 31, 2015   
 
Statements of financial position  21 
Statements of operations  23 
Statements of comprehensive loss  24 
Statements of cash flows  25 
Statements of changes in equity  27 
Statements of value added  29 
Notes to the interim financial information - ITR  30 

 

 


 
 

 

Message from Management

 

We recorded an operating margin of 6.1% in 1Q15, with operating income (EBIT) of R$153.8 million, an increase of 6.5% year-over-year. Net revenue was R$2.5 billion, up 0.5% over the same period. Accumulated over the last 12 months, total net revenue registered a new historic high of R$10.1 billion.

The first months of this year were marked by the economic slowdown and a challenging competitive scenario. Even in this environment, we maintained the level of total revenue compared to 1Q14, through the diversification of revenue lines and continuous improvement of our operations and our products. The significant 32.8% increase in ancillary and cargo revenue in the quarter mitigated the decrease in ticket prices. Yield decreased by 8.6% and the PRASK fell by 6.3%, offset by an increase in load factor.

Regarding the industry, capacity for the quarter increased 6.4%, while demand grew 7.9%, both compared to 1Q14. We increased capacity by 4.0% and demand by 6.6%, which represented an expansion in load factor of 2.0 percentage points versus the same period in 2014. Although we have increased supply in the quarter, it is worth noting the zero growth forecast for the supply in 2015 will be maintained.

During this quarter, we broke two records in the national aviation segment, being: (i) the number of passengers transported in a single day by a single airline: 157,000 people on January 15, 2015, and (ii) we served more than 4 million customers in a month, in January of this year. We also led in on-time performance in the first quarter of this year, with 94.13% of flights on-time, according to data from Infraero for the domestic market. During the month of March, the index reached 96.72%, with over 23,000 domestic flights in the period.

We recorded as well the leadership in number of tickets issued for the corporate segment, in line with our focus to expand our portfolio of Corporate Customers. In addition, we had the largest growth in the sector, 14.2%, compared to the same period last year and reached 31.3% of share for this segment, according to Abracorp – Brazilian Association of Corporate Travel Agencies.

We inaugurated the new Gollog terminal at Congonhas Airport, which further strengthen ancillary revenues. With 2.1 thousand square meters, the space stands out for its easily accessible location in downtown Sao Paulo and for the operation itself. This inauguration is part of the strategy to modernize the infrastructure of our cargo transportation, improve service processes and increase efficiency in deliveries. We also signed cargo interline agreement with Air France and KLM. The partnership allows the sale of the service in all departure points offered by GOL to the destinations offered by both companies. It enables both companies to enter new markets.

We expanded sale points utilizing GDS (Global Distribution System), allowing us to increase sales in 15 new countries, in line with our strategy to increase international revenues for the company.

 

1


 
 

 

 

Although we have many achievements to celebrate, the current scenario of high exchange rate volatility and low economic activity causes us to continually manage our costs and to search for new sources of revenue. In this quarter the exchange rate at the end of March was 41.8% higher than the same period in 2014. GOL posted a net exchange variation of R$774.1 million negative (with no immediate cash effect), which explains the net loss of R$672.7 million in the quarter. Disconsidering the exchange rate impact, the result would be a net gain of R$100.0 million in the period.  We are attentive to opportunities of accessing the capital markets already considering the new corporate structure recently implemented with a view towards an eventual capitalization.

We reinforce the belief that the successful passage of this turbulent period, will be given by the discipline of execution our strategic plan and strengthening, even more, our pillars positioning; the obsessive search for the highest standard security; the lowest cost obtained through the gain of efficiency and; focus on intelligence, based on technology and in the relentless pursuit of efficiency to provide even better services to our customers.

I would like to take this opportunity to thank our clients, the trust of our investors and our Team of Eagles that, during this period, have realized that the plan has not changed and the tailwind will soon be in our favor again.

 

Paulo Sérgio Kakinoff

CEO of GOL Linhas Aéreas Inteligentes S.A.

 

 

 

2


 
 
 

Highlights of the subsidiary Smiles’ results in 1Q15

 

*         43.5% in the number of accrued ex-GOL miles compared to 1Q14;

*         Miles redeemed increase by 13.4% over 1Q14;

*         Operating income of R$85.0 million, 23.9% higher than in 1Q14;

*         Operating cash flow of R$335.1 million;

*         Net income of R$69.6 million, 11.1% lower than in 1Q14.

 

 

Smiles S.A. closed 1Q15 with operating income of R$85.0 million, 23.9% up on 1Q14, with an operating margin of 34.5%, thanks to the 43.5% increase in the number of accrued ex-GOL miles and healthy direct redemption margins. The financial result reflects the capital structure following the capital reduction, which led to a significant increase in the return on capital indicators.

 

 

3


 
 

 

Operating and Financial Indicators

 

Traffic Data

1Q15

1Q14

% Var.

4Q14

% Var.

Aviation Market - Industry

 

 

 

 

 

RPK Industry – Total

32,624

30,240

7.9%

32,452

0.5%

RPK Industry – Domestic

24,524

23,219

5.6%

24,919

-1.6%

RPK Industry - International

8,099

7,021

15.4%

7,533

7.5%

ASK Industry – Total

40,443

38,015

6.4%

39,962

1.2%

ASK Industry – Domestic

30,349

29,186

4.0%

30,794

-1.4%

ASK Industry - International

10,094

8,829

14.3%

9,167

10.1%

Industry Load Factor - Total

80.7%

79.5%

1.2 p,p

81.2%

-0.5 p,p

Industry Load Factor - Domestic

80.8%

79.6%

1.2 p,p

80.9%

-0.1 p,p

Industry Load Factor - International

80.2%

79.5%

0.7 p,p

82.2%

-2.0 p,p

Aviation Market – GOL

 

 

 

 

 

RPK GOL – Total

10,172

9,539

6.6%

10,352

-1.7%

RPK GOL – Domestic

8,920

8,502

4.9%

9,181

-2.8%

RPK GOL – International

1,252

1,037

20.7%

1,171

6.9%

ASK GOL – Total

13,033

12,529

4.0%

13,155

-0.9%

ASK GOL – Domestic

11,308

11,075

2.1%

11,497

-1.6%

ASK GOL - International

1,725

1,453

18.7%

1,657

4.1%

GOL Load Factor - Total

78.1%

76.1%

2.0 p,p

78.7%

-0.6 p,p

GOL Load Factor - Domestic

78.9%

76.8%

2.1 p,p

79.9%

-1.0 p,p

GOL Load Factor - International

72.6%

71.4%

1.2 p,p

70.7%

1.9 p,p

Operational Data

1Q15

1Q14

% Var.

4Q14

% Var,

Revenue Passengers - Pax on board ('000)

10,120.9

9,828.0

3.0%

10,709.2

-5.5%

Aircraft Utilization (Block Hours/Day)

11.7

11.6

0.6%

11.8

-0.6%

Departures

80,814

79,133

2.1%

83,342

-3.0%

Average Stage Length (km)

951

909

4.7%

932

2.0%

Fuel consumption (mm liters)

402

386

4.2%

409

-1.6%

Full-time equivalent employees at period end

16,825

16,157

4.1%

16,875

-0.3%

Average Operating Fleet

130

126

3.4%

129

0.8%

Financial Data

1Q15

1Q14

% Var.

4Q14

% Var,

Net YIELD (R$ cents)

21.90

23.95

-8.6%

23.58

-7.1%

Net PRASK (R$ cents)

17.09

18.23

-6.3%

18.55

-7.9%

Net RASK (R$ cents)

19.22

19.90

-3.4%

20.75

-7.4%

CASK (R$ cents)

18.03

18.74

-3.8%

19.45

-7.3%

CASK ex-fuel (R$ cents)

12.00

10.67

12.4%

11.92

0.7%

Spread RASK – CASK (R$ cents)

1.19

1.16

2.9%

1.30

-8.5%

Average Exchange Rate1

2.8702

2.3652

21.4%

2.5437

12.8%

End of period Exchange Rate1

3.2080

2.2630

41.8%

2.6562

20.8%

WTI (avg. per barrel, US$)2

48.6

98.7

-50.7%

73.2

-33.6%

Price per liter Fuel (R$)3

1.96

2.62

-25.3%

2.43

-19.4%

Gulf Coast Jet Fuel Cost (average per liter, US$)2

0.43

0.77

-44.2%

0.61

-29.7%

 

1. Source: Central Bank; 2. Source: Bloomberg; 3. Fuel expenses/liters consumed.       

 

4

 


 
 

 

 

Airline Market – Industry

 

In 1Q15, with reduced predictability in the economy and exchange rate, airlines have concentrated efforts to maintain the level of activity and deal with the rapidly changing demand profile. With this, the seat supply (ASK), increased by 6.4% and demand (RPK), in turn, increased by 7.9%. The load factor grew 1.2p.p., reaching 80.7%.

 

The number of passengers transported in the domestic market increased by 3.9% to 24.5 million. In the international market, more than 1.8 million passengers were transported, 18.8% higher than in the same period last year.

 

Domestic Market – GOL

 

Domestic supply increased by 2.1% over 1Q14, reflecting GOL’s substantial capacity management flexibility, allowing it to take advantage of seasonal market opportunities. It is worth noting that the forecast for zero growth in 2015 is maintained, so that domestic supply will adjust throughout the year.

 

Domestic demand had another quarter of evolution, with an increase of 4.9% compared to 2014, leading the domestic load factor to 78.9%, up 2.1p.p.

                                                                                                                                                                           

During the quarter, GOL transported 9.5 million passengers in the domestic market, 2.4% above the number of passengers in 2014.

 

Even with reduced economic activity in the country, GOL, once again, was the leader in tickets sold to corporate passangers, with a share of 31.3%, according to the Brazilian Association of Corporate Travel Agencies (Abracorp).

 

International Market – GOL

     

International supply increased by 18.7% in the year. The Company announced several new flights during the year, including to Tobago, in the Caribbean, from Guarulhos airport in São Paulo, beginning in January 2015, and to Mendoza, Argentina, beginning in July 2015.

 

International demand followed the pace of expansion higher than supply and raised 20.7% in the quarter, bringing the load factor to 72.6%, an increase of 1.2p.p.

 

GOL transported 579.3 thousand passengers in the international market in the quarter, 12.8% more than in 2014. The Company maintained its focus on gradually increasing its frequencies and destinations in other countries, expanding the share of foreign-currency revenue.

 

PRASK and Yield

 

As a result of the lower economic activity registered in the country and the exchange rate with high volatility, which ended the quarter 41.8% higher than the same period in 2014, the yield fell by 8.6% and PRASK partially benefited due to increased load factor by 2 p.p. and fell by 6.3% in the annual comparison.

 

5


 

 

 

Fleet Plan

2015

2016

>2016

Total

Fleet (End of Period)

140

139

 

 

Aircraft Commitments (R$ million)*

1,336.1

1,672.9

44,363.8

47,372.8

Pre-Delivery Payments (R$ million)

306.4

186.3

5,856.0

6,348.6

 

Fleet (End of Period)

1Q15

1Q14

Var.

Boeing 737-NG Family

140

147

-7

737-800 NG

105

111

-6

737-700 NG

35

36

-1

737-300 Classic*

-

7

-7

767-300/200*

-

1

-1

Opening for rent Type

 

 

 

Financial Leasing (737-NG and 767)

45

46

-1

Operating Leasing

95

102

-7

 

At the end of 1Q15, out of a total of 140 Boeing 737-NG aircraft, GOL was operating 136 aircraft on its routes. Of the 4 remaining aircraft, 3 were in the process of being returned to their lessors and 1 was sent via sub-leasing to an European airline.

 

GOL has 95 aircraft under operating leases and 45 under financial leases, 40 of which with a purchase option when their leasing contracts expire. In 1Q15, GOL received 1 aircraft B737 NG under operating lease and returned 2 B737 NGs.

 

The average age of the fleet was 7.5 years at the end of 1Q15. In order to maintain this indicator at low levels, the Company has 129 firm aircraft acquisition orders with Boeing for fleet renewal by 2026.

 

Capex

 

GOL posted a net investment of R$169.5 million in 1Q15, considering the return of the pre-delivery deposits returns when the aircraft is delivered. For more details on changes in property, plant and equipment, see Note 16 to the financial statements.

 

 

2015 Financial Guidance

 

2015 Financial Guidance

From

To

1Q15 Results

Annual Change in Domestic Supply (ASK)

Zero

2.1%

Average Exchange Rate (R$ /US$)

3.15

2.95

2.87

Jet Fuel Price

2.30

2.10

1.96

Operating Margin (EBIT)

2%

5%

6.1%

 

 

Due to the impact of the adverse macroeconomic scenario, GOL may revise its guidance to incorporate any developments in its operating and financial performance, as well as any changes in interest, FX, GDP and WTI and Brent oil price trends.

 

6


 

 

Audit Committee statement

 

 

The Audit Committee of GOL LINHAS AÉREAS INTELIGENTES S.A., in accordance with its bylaws and legal provisions, examined the interim financial information for the period ended March 31, 2015. Based on the procedures performed, considering also the independent auditor’s report - Ernst & Young Auditores Independentes S.S., dated May 12, 2015, 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, 2015.

 

 

 

 

Richard F. Lark

Member of the Audit Committee

 

 

Antônio Kandir

Member of the Audit Committee  

 

 

Luiz Kaufmann

Member of the Audit Committee  

 

 

7


 

 

 

 

Directors' statement on the interim financial information

 

 

FOR THE PURPOSES OF ARTICLE 25, §1, Subsection VI, of CVM Rule 480/09.

 

In accordance with CVM Rule nº480/09, the Directors declare that discussed, reviewed and agreed with the interim financial information - ITR for the period ended March 31, 2015.

 

 

 

 

 

São Paulo, May 12, 2015.

 

 

 

 

Paulo Sérgio Kakinoff

Chief Executive Officer

 

 

Edmar Prado Lopes Neto

Vice President and Investor Relations Officer

 

 

 

 

 

 

 

 

8


 

 

Directors' statement on the auditor’s review of Interim Financial Information

 

 

FOR THE PURPOSES OF ARTICLE 25, §1, Subsection VI, of INSTRUÇÃO CVM 480/09.

 

In accordance with Instrução CVM 480/09, the Directors declare that discussed, reviewed and agreed with the report on review of interim financial information – ITR for the period ended March 31, 2015.

 

 

 

 

São Paulo, May 12, 2015.

 

 

 

 

Paulo Sérgio Kakinoff

Chief Executive Officer

 

 

Edmar Prado Lopes Neto

Vice President and Investor Relations Officer

 

 

9


 

 

(A free translation from the original in Portuguese into English)

 

Independent auditor’s report on 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 accompanying individual and consolidated interim financial information of Gol Linhas Aéreas Inteligentes S.A.. (“Company”), identified as Company and Consolidated, respectively, contained in the Quarterly Information (ITR) for the quarter ended March 31, 2015, which comprises the balance sheet as at March 31, 2015 and the related statement of operations, statement of comprehensive loss for the quarter,  the statement of changes in equity and statement of cash flows for the three-month period then ended, and a summary of significant accounting practices and other explanatory notes.

 

Company management is responsible for the preparation of interim individual financial information in accordance with the Technical Pronouncement of the Accounting

Pronouncements Committee (CPC) 21 (R1) – Interim Financial Reporting and the consolidated interim financial information in accordance with CPC 21 (R1) and IAS 34 – Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), 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 according to the Brazilian and international review standards of interim financial information (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 inquiries, mainly of the people responsible for the financial and accounting matters, and the application of analytical and other review procedures. The scope of a review is significantly narrower than that of an audit conducted in accordance with audit standards and, accordingly, it did not permit us to obtain assurance that we took notice of all significant matters that could have been raised in an audit. Therefore, we did not

express an audit opinion.

 

 

10


 

Conclusion on the interim individual and consolidated financial information

Based on our review, we are not aware of any fact that makes us believe that the interim individual and consolidated financial information included in the Quarterly Information referred above was not prepared, in all material respects, in accordance with CPC 21 (R1) 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 statement of value added (SVA) for the three-month period ended March 31, 2015, prepared under the responsibility of the Company’s management, the presentation of which in the interim financial information is required by the rules of the CVM applicable to Quarterly Information (ITR), and as supplementary information under IFRS, whereby no statement of value added presentation is required. These statements have been subject to the same review procedures previously described and, based on our review, we are not aware of any fact that makes us believe that they were not prepared, in all material respects, according to the interim individual and consolidated financial information taken as a whole.

Audit and review of the amounts corresponding to prior period

The amounts correspondent to the statements of operations, of comprehensive loss, of changes in shareholders’ equity, of cash flows and of value added for the three-months period ended March 31, 2014 presented for comparison purposes, were previously reviewed by other independent accountants, who issued a review report of quarterly information dated May 14, 2014.

 

São Paulo, May 12, 2015.

 

ERNST & YOUNG

Auditores Independentes S.S.

CRC-2SP015199/O-6

 

Luiz Carlos Passetti
Accountant CRC-1SP144343/O-3
Vanessa R. Martins
Accountant CRC-1SP244569/O

                           

11


 

 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Company Profile / Subscribed Capital

 

 

 

Number of shares

Current Year

03/31/2015

Paid-in capital

5,035,037,140

Preferred

139,318,357

Total

5,174,355,497

Treasury

2,064,782

Total

2,064,782

 

 

 

 

12


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Interim Financial Information / Statements of Financial Position – Assets

 

(In thousands of Brazilian Reais)

 

 

 

Line code

 

Line item

Current Year 03/31/2015

Prior Year 12/31/2014

1

Total assets

1,654,157

1,790,138

1.01

Current assets

566,733

561,036

1.01.01

Cash and cash equivalents

539,742

459,364

1.01.02

Short-term investments

114

56,491

1.01.06

Recoverable taxes

7,055

10,289

1.01.07

Prepaid expenses

348

532

1.01.08

Other current assets

19,474

34,360

1.01.08.01

Noncurrent assets for sale

7

7

1.01.08.01.01

Restricted cash

7

7

1.01.08.03

Others

19,467

34,353

1.02

Noncurrent assets

1,087,424

1,229,102

1.02.01

Long-term assets

192,313

186,195

1.02.01.06

Taxes

83,754

84,697

1.02.01.06.01

Deferred taxes

63,301

65,305

1.02.01.06.02

Recoverable taxes

20,453

19,392

1.02.01.08

Related-party transactions

53,847

52,778

1.02.01.08.04

Other related-party transactions

53,847

52,778

1.02.01.09

Other noncurrent assets

54,712

48,720

1.02.01.09.03

Deposits

29,227

26,706

1.02.01.09.04

Restricted cash

25,485

22,014

1.02.02

Investments

-

181,220

1.02.03

Property, plant and equipment

895,111

861,687

 

 

 

13


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Interim Financial Information / Statements of Financial Position – Liabilities

 

(In thousands of Brazilian Reais)

 

 

 

Line code

 

Line item

Current Year 03/31/2015

Prior Year 12/31/2014

2

Total liabilities and stockholder’s equity

1,654,157

1,790,138

2.01

Current liabilities

55,289

58,908

2.01.01

Salaries, wages and benefits

590

519

2.01.01.02

Salaries, wages and benefits

590

519

2.01.02

Suppliers

723

437

2.01.03

Taxes payable

2,463

-

2.01.04

Short-term debt

50,970

56,619

2.01.05

Other liabilities

350

567

2.01.05.02

Others

350

567

2.01.05.02.04

Other liabilities

350

567

2.01.06

Provisions

193

766

2.02

Noncurrent liabilities

2,856,575

2,249,617

2.02.01

Long-term debt

2,535,529

2,098,209

2.02.02

Other liabilities

321,046

151,408

2.02.02.01

Liabilities with related-party transactions

186,826

151,408

2.02.02.02

Others

134,220

-

2.02.02.02.05

Loss on Investiment

134,220

-

2.03

Stockholder’s equity

(1,257,707)

(518,387)

2.03.01

Capital

2,581,951

2,581,913

2.03.01.01

Issued capital

2,618,837

2,618,748

2.03.01.02

Cost on issued shares

(36,886)

(36,886)

2.03.01.03

Shares to be issued

-

51

2.03.02

Capital reserves

168,558

165,772

2.03.02.01

Premium on issue of shares

32,387

32,387

2.03.02.02

Special reserve

70,979

70,979

2.03.02.05

Treasury shares

(31,132)

(31,357)

2.03.02.07

Share-based payments

96,324

93,763

2.03.05

Accumulated losses

(4,519,078)

(3,814,522)

2.03.06

Equity valuation adjustments

510,862

548,450

2.03.06.01

Equity valuation adjustments

(178,556)

(138,713)

2.03.06.02

Change in equity through public offer

689,418

687,163

 

 

 

14


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Interim Financial Information / Statements of Operations

 

(In thousands of Brazilian Reais)

 

 

 

 

Current Year

Prior Year

Line code

Line item

01/01/2015 to 03/31/2015

01/01/2014 to 03/31/2014

3.04

Operating expenses/revenues

(273,834)

(150,410)

3.04.02

General and administrative expenses

(2,750)

(4,813)

3.04.04

Other operating income

8,009

48,373

3.04.06

Equity in subsidiaries

(279,093)

(193,970)

3.05

Loss before taxes and financial result

(273,834)

(150,410)

3.06

Financial result

(423,527)

19,221

3.06.01

Financial income

2,531

83,773

3.06.01.01

Financial income

2,531

2,135

3.06.01.02

Exchange variation, net

-

81,638

3.06.02

Financial expenses

(426,058)

(64,552)

3.06.02.01

Financial expenses

(55,524)

-

3.06.02.02

Exchange variation, net

(370,534)

-

3.07

Loss before taxes

(697,361)

(131,189)

3.08

Income taxes

(7,195)

(6)

3.08.01

Current

(5,035)

-

3.08.02

Deferred

(2,160)

(6)

3.09

Result from continuing operations, net

(704,556)

(131,195)

3.11

Net loss for the period

(704,556)

(131,195)

 

 

 

15


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Statements of Comprehensive Loss

 

(In thousands of Brazilian Reais)

 

 

   

Current Year

Prior Year

Line code

Line item

01/01/2015 to 03/31/2015

01/01/2014 to 03/31/2014

4.01

Net loss for the period

(704,556)

(131,195)

4.02

Other comprehensive (loss) income

(39,843)

(29,711)

4.02.01

Cash flow hedges

(60,368)

(45,017)

4.02.02

Tax effect

20,525

15,306

4.03

Comprehensive loss for the period

(744,399)

(160,906)

 

 

 

 

16


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Interim Financial Information / Statements of Cash Flows – Indirect Method

 

(In thousands of Brazilian Reais)

 

 

 

 

Current Year

Prior Year

Line code

Line item

01/01/2015 to 03/31/2015

01/01/2014 to 03/31/2014

6.01

Net cash used in operating activities

115,456

34,522

6.01.01

Cash flows from operating activities

745,415

153,250

6.01.01.02

Deferred taxes

2,160

6

6.01.01.03

Equity in subsidiaries

279,093

193,970

6.01.01.04

Share-based payments

1,190

1,592

6.01.01.05

Exchange and monetary variations, net

471,764

(62,787)

6.01.01.06

Interest on loans

51,808

44,065

6.01.01.07

Interest paid

(60,600)

(39,448)

6.01.01.09

Unrealized results of hedge, net

-

15,852

6.01.01.12

Write-off property, plant and equipment and intangible assets

-

-

6.01.02

Changes assets and liabilities

74,597

12,467

6.01.02.02

Financial applications used for trading

56,377

1,407

6.01.02.03

Deposits

(2,521)

(2,305)

6.01.02.04

Prepaid expenses and recoverable taxes

1,786

13,685

6.01.02.05

Other assets

14,886

50

6.01.02.06

Suppliers

286

(1,924)

6.01.02.07

Taxes payable

2,307

261

6.01.02.08

Other obligations

1,405

975

6.01.02.09

Salaries, wages and benefits

71

318

6.01.03

Others

(704,556)

(131,195)

6.01.03.01

Net loss for the year

(704,556)

(131,195)

6.02

Net cash used in investing activities

(39,314)

71,648

6.02.01

Advances for future capital increase

(2,621)

(90,000)

6.02.02

Related-party transactions

202

(192)

6.02.03

Restricted cash

(3,471)

(551)

6.02.05

Advance for future capital increase

-

65,703

6.02.06

Advances for property, plant and equipment acquisition

(33,424)

99,055

6.02.07

Capital increase on subsidiary

-

(2,367)

6.03

Net cash generated by financing activities

4,236

389,011

6.03.01

Loan funding

99

-

6.03.02

Loan and lease payment

-

-

6.03.03

Credit with related parties

4,099

389,011

6.03.05

Capital increase

89

-

6.03.07

Shares to be issued

(51)

-

6.05

Net increase (decrease) in cash and cash equivalents

80,378

495,181

6.05.01

Cash and cash equivalents at beginning of the year

459,364

343,793

6.05.02

Cash and cash equivalents at end of the year

539,742

838,974

 

 

17


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Interim Financial Information / Statements of Changes in Equity – From 01/01/2015 to 03/31/2015

 

(In thousands of Brazilian Reais)

 

 

 

 

Line code

 

 

Line item

 

Capital

stock

Capital reserves, options granted and treasury shares

 

Accumulated

losses

Other comprehensive loss

Total equity

5.01

Opening balance

2,581,913

852,935

(3,814,522)

(138,713)

(518,387)

5.03

Adjusted balance

2,581,913

852,935

(3,814,522)

(138,713)

(518,387)

5.04

Stockholder’s capital transactions

38

5,041

-

-

5,079

5.04.08

Share-based payments

-

2,786

-

-

2,786

5.04.09

Stock options exercised

38

-

-

-

38

5.04.10

Gains on change on investment

-

2,255

-

-

2,255

5.05

Total comprehensive loss

-

-

(704,556)

(39,843)

(744,399)

5.05.01

Net loss for the period

-

-

(704,556)

-

(704,556)

5.05.02

Other comprehensive loss

-

-

-

(39,843)

(39,843)

5.05.02.06

Other comprehensive result, net

-

-

-

(39,843)

(39,843)

5.07

Closing balance

2,581,951

857,976

(4,519,078)

(178,556)

(1,257,707)

 

 

 

 

18


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Interim Financial Information / Statements of Changes in Equity – From 01/01/2014 to 12/31/2014

 

(In thousands of Brazilian Reais)

 

 

 

 

Line code

 

 

Line item

 

Capital

stock

Capital reserves,
options granted and
treasury shares

 

Accumulated losses

Other comprehensive
income

Total consolidated
equity

5.01

Opening balance

2,469,623

767,818

(2,568,353)

(18,162)

650,926

5.03

Adjusted balance

2,469,623

767,818

(2,568,353)

(18,162)

650,926

5.04

Shareholders’ capital transactions

-

73,970

-

-

73,970

5.04.11

Gains on investment sold

-

73,970

-

-

73,970

5.05

Total comprehensive result

-

1,592

(131,195)

(29,711)

(159,314)

5.05.02

Other comprehensive income

-

1,592

(131,195)

(29,711)

(159,314)

5.05.02.07

Other comprehensive income, net

-

-

-

(29,711)

(29,711)

5.05.02.08

Net loss for the period

-

-

(131,195)

-

(131,195)

5.05.02.09

Share-based payments

-

1,592

-

-

1,592

5.07

Closing balance

2,469,623

843,380

(2,699,548)

(47,873)

565,582

 

 

 

 

19


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Interim Financial Information / Statements of Value Added

 

(In thousands of Brazilian Reais)

 

 

   

Current Year

Prior Year

Line code

Line item

01/01/2015 to 03/31/2015

01/01/2014 to 03/31/2014

7.01

Revenue

8,009

48,373

7.01.02

Other revenue

8,009

48,373

7.01.02.01

Other operating income

8,009

48,373

7.02

Acquired from third parties

(1,421)

(2,660)

7.02.02

Material, power, third-party services and other

(1,421)

(2,660)

7.03

Gross value added

6,588

45,713

7.05

Added value produced

6,588

45,713

7.06

Value added received in transfer

(276,562)

(191,835)

7.06.01

Equity in subsidiaries

(279,093)

(193,970)

7.06.02

Financial income

2,531

2,135

7.07

Total wealth for distribution

(269,974)

(146,122)

7.08

Wealth for distribution

(269,974)

(146,122)

7.08.01

Employees

1,480

2,220

7.08.01.01

Salaries

1,415

2,152

7.08.01.03

F.G.T.S.

65

68

7.08.02

Taxes

7,043

(61)

7.08.02.01

Federal taxes

7,043

(61)

7.08.03

Third-party capital remuneration

426,059

(17,086)

7.08.03.01

Interest

426,059

(32,987)

7.08.03.03

Other

-

15,901

7.08.03.03.01

Lenders

-

15,901

7.08.04

Return on own capital

(704,556)

(131,195)

7.08.04.03

Loss for the period

(704,556)

(131,195)

 

 

 

20


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information / Statements of Financial Position – Assets

 

(In thousands of Brazilian Reais)

 

 

 

Line code

 

Line item

Current Year 03/31/2015

Prior Year 12/31/2014

1

Total assets

10,328,493

9,976,647

1.01

Current assets

2,914,012

2,986,198

1.01.01

Cash and cash equivalents

1,956,292

1,898,773

1.01.02

Short-term investments

100,472

355,134

1.01.02.01

Short-term investments at fair value

100,472

355,134

1.01.02.01.03

Restricted cash

59,959

58,310

1.01.02.01.04

Short-term investments

40,513

296,824

1.01.03

Accounts receivable

447,830

352,284

1.01.04

Inventories

162,473

138,682

1.01.06

Recoverable taxes

74,574

81,245

1.01.07

Prepaid expenses

88,096

99,556

1.01.08

Other current assets

84,275

60,524

1.01.08.03

Others

84,275

60,524

1.01.08.03.03

Other credits

31,965

41,678

1.01.08.03.04

Rights on derivatives transactions

52,310

18,846

1.02

Noncurrent assets

7,414,481

6,990,449

1.02.01

Long-term assets

2,015,449

1,665,746

1.02.01.06

Taxes

704,431

557,309

1.02.01.06.01

Deferred Taxes

632,111

486,975

1.02.01.06.02

Recoverable taxes

72,320

70,334

1.02.01.07

Prepaid expenses

16,177

18,247

1.02.01.09

Other noncurrent assets

1,294,841

1,090,190

1.02.01.09.03

Restricted cash

339,043

273,240

1.02.01.09.04

Deposits

925,489

793,508

1.02.01.09.05

Other credits

30,309

23,442

1.02.02

Investments

22,443

8,483

1.02.03

Property, plant and equipment

3,675,243

3,602,034

1.02.03.01

Property, plant and equipment in operation

1,632,910

1,522,310

1.02.03.01.01

Other flight equipments

1,006,816

935,209

1.02.03.01.02

Advances for property, plant and equipment acquisition

495,292

456,197

1.02.03.01.04

Others

130,802

130,904

1.02.03.02

Property, plant and equipment under leasing

2,042,333

2,079,724

1.02.03.02.01

Property, plant and equipment under financial leasing

2,042,333

2,079,724

1.02.04

Intangible

1,701,46

1,714,186

1.02.04.01

Intangible

1,159,044

1,156,701

1.02.04.02

Goodwill

542,302

557,485

 

 

 

21


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information / Statements of Financial Position – Liabilities

 

(In thousands of Brazilian Reais)

 

 

Line code

 

Line item

Current Year

03/31/2015

Prior Year 12/31/2014

2

Total liabilities and equity

10,328,493

9,976,647

2.01

Current liabilities

4,346,397

4,212,646

2.01.01

Salaries, wages and benefits

290,836

255,440

2.01.01.02

Salaries, wages and benefits

290,836

255,440

2.01.02

Suppliers

677,980

686,151

2.01.03

Taxes payable

140,081

100,094

2.01.04

Short-term debt

1,171,286

1,110,734

2.01.05

Other liabilities

1,816,704

1,853,133

2.01.05.02

Others

1,816,704

1,853,133

2.01.05.02.04

Taxes and landing fees

300,159

315,148

2.01.05.02.05

Advance ticket sales

912,809

1,101,611

2.01.05.02.06

Mileage program

234,733

220,212

2.01.05.02.07

Advances from customers

93,671

3,196

2.01.05.02.08

Other liabilities

143,572

127,600

2.01.05.02.09

Liabilities from derivative transactions

131,760

85,366

2.01.06

Provisions

249,510

207,094

2.02

Noncurrent liabilities

7,019,585

6,096,975

2.02.01

Long-term debt

5,953,197

5,124,505

2.02.02

Other liabilities

745,096

693,904

2.02.02.02

Others

745,096

693,904

2.02.02.02.03

Mileage program

616,432

559,506

2.02.02.02.05

Taxes payable

36,811

34,807

2.02.02.02.06

Other liabilities

91,853

99,591

2.02.04

Provisions

321,292

278,566

2.03

Stockholder’s equity

(1,037,489)

(332,974)

2.03.01

Capital

2,468,623

2,468,585

2.03.01.01

Issued capital

2,618,837

2,618,748

2.03.01.02

Cost on issued shares

(150,214)

(150,214)

2.03.01.03

Shares to be issued

-

51

2.03.02

Capital reserves

168,558

165,772

2.03.02.01

Premium on issue of shares

32,387

32,387

2.03.02.02

Special reserve

70,979

70,979

2.03.02.05

Treasury shares

(31,132)

(31,357)

2.03.02.07

Share-based payments

96,324

93,763

2.03.05

Accumulated losses

(4,405,750)

(3,701,194)

2.03.06

Equity valuation adjustments

510,862

548,450

2.03.06.01

Equity valuation adjustments

(178,556)

(138,713)

2.03.06.02

Change in equity through public offer

689,418

687,163

2.03.09

Participation of non-controlling Company’s stockholders

220,218

185,413

 

 

22


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information /Statements of Operations

 

(In thousands of Brazilian Reais)

 

 

Current Year

Prior Year

Line code

Line item

01/01/2015 to 03/31/2015

01/01/2014 to 03/31/2014

3.01

Sales and services revenue

2,505,232

2,493,399

3.01.01

Passenger

2,227,458

2,284,288

3.01.02

Cargo and other

277,774

209,111

3.02

Cost of sales and/or services

(1,962,748)

(2,048,208)

3.03

Gross profit

542,484

445,191

3.04

Operating expenses

(388,641)

(300,741)

3.04.01

Sales expenses

(206,183)

(199,851)

3.04.01.01

Marketing expenses

(206,183)

(199,851)

3.04.02

General and administrative expenses

(189,244)

(148,817)

3.04.04

Other operating income

8,009

48,373

3.04.06

Equity in subsidiaries

(1,223)

(446)

3.05

Result before income taxes and financial result

153,843

144,450

3.06

Financial result

(866,553)

(193,782)

3.06.01

Financial income

140,403

160,239

3.06.01.01

Financial income

140,403

102,752

3.06.01.02

Exchange variation, net

-

57,487

3.06.02

Financial expenses

(1,006,956)

(354,021)

3.06.02.01

Exchange variation, net

(774,068)

-

3.06.02.02

Financial expenses

(232,888)

-

3.07

Loss before income taxes

(712,710)

(49,332)

3.08

Income taxes

39,988

(46,814)

3.08.01

Current

(84,467)

(39,256)

3.08.02

Deferred

124,455

(7,558)

3.09

Result from continuing operations, net

(672,722)

(96,146)

3.11

Net loss for the period

(672,722)

(96,146)

3.11.01

Attributable to Company’ stockholders

(704,556)

(131,195)

3.11.02

Attributable to non-controlling Company’ stockholders

31,834

35,049

 

 

 

 

23


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Statements of Comprehensive Loss

 

(In thousands of Brazilian Reais)

 

 

   

Current Year

Prior Year

Line code

Line item

01/01/2015 to 03/31/2015

01/01/2014 to 03/31/2014

4.01

Net loss for the period

(672,722)

(96,146)

4.02

Other comprehensive income (loss)

(39,843)

(29,711)

4.02.01

Cash flow hedges

(60,368)

(45,017)

4.02.02

Tax effect

20,525

15,306

4.03

Comprehensive income/loss for the period

(712,565)

(125,857)

4.03.01

Attributable to Company’ stockholders

(744,399)

(160,906)

4.03.02

Attributable to non-controlling Company’ stockholders

31,834

35,049

 

 

 

24


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information / Statements of Cash Flows – Indirect Method

 

(In thousands of Brazilian Reais)

 

 

 

Current Year

Prior Year

Line code

Line item

01/01/2015 to 03/31/2015

01/01/2014 to 03/31/2014

6.01

Net cash generated by operating activities

525,747

459,138

6.01.01

Cash flows from operating activities

1,287,997

299,126

6.01.01.01

Depreciation and amortization

100,425

135,252

6.01.01.02

Allowance for doubtful accounts

6,050

4,195

6.01.01.03

Provisions for judicial deposits

12,526

4,650

6.01.01.05

Reversion for inventory obsolescence

14

(34)

6.01.01.06

Deferred taxes

(124,455)

7,558

6.01.01.07

Share-based payments

3,060

1,954

6.01.01.08

Exchange and monetary variations, net

1,066,238

3,216

6.01.01.09

Interest on loans and financial lease

141,115

99,306

6.01.01.10

Unrealized hedge results

4,678

15,852

6.01.01.12

Mileage program

71,447

15,275

6.01.01.13

Write-off property, plant and equipment and intangible assets

4,230

40

6.01.01.14

Equity in subsidiaries

1,223

446

6.01.01.15

Result share plan provision

1,446

11,416

6.01.02

Changes assets and liabilities

(89,528)

256,158

6.01.02.01

Accounts receivable

(101,596)

(143,114)

6.01.02.02

Financial applications used for trading

256,311

666,939

6.01.02.03

Inventories

(23,805)

(10,218)

6.01.02.04

Deposits

(22,539)

(52,684)

6.01.02.05

Prepaid expenses, insurance and tax recoverable

12,778

(12,665)

6.01.02.06

Other assets

2,843

13,299

6.01.02.07

Suppliers

(8,171)

8,025

6.01.02.08

Advanced ticket sales

(188,802)

(26,316)

6.01.02.09

Liabilities from Derivative Transactions

(52,116)

21,429

6.01.02.10

Advances from customers

90,475

(70,590)

6.01.02.11

Salaries, wages and benefits

33,950

2,654

6.01.02.12

Taxes and landing fees

(14,989)

8,364

6.01.02.13

Taxes payable

65,241

28,956

6.01.02.14

Provisions

31,533

(35,864)

6.01.02.15

Other Liabilities

8,234

7,408

6.01.02.16

Interest paid

(155,470)

(126,466)

6.01.02.17

Income tax paid

(23,405)

(22,999)

6.01.03

Others

(672,722)

(96,146)

6.01.03.01

Net loss for the year

(672,722)

(96,146)

6.02

Net cash used in investing activities

(272,962)

95,392

6.02.03

Restricted Cash

(67,452)

46,256

6.02.04

Property, Plant and Equipment

(157,062)

(81,645)

6.02.05

Intangible

(9,353)

(27,727)

6.02.06

Investment acquisition

-

(6,250)

6.02.07

Investment sale, net

-

65,703

6.02.08

Advances for property, plant and equipment acquisition

(39,095)

99,055

 

 

25


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information / Statements of Cash Flows – Indirect Method (Continued)

 

(In thousands of Brazilian Reais)

 

 

 

 

Current Year

Prior Year

Line code

Line item

01/01/2015 to 03/31/2015

01/01/2014 to 03/31/2014

6.03

Net cash (used in) generated by financing activities

(68,129)

(1,861)

6.03.01

Loan funding

191,174

70,645

6.03.02

Payments

(172,112)

(21,598)

6.03.04

Capital increase

5,041

-

6.03.06

Financial leasing payment

(92,181)

(50,908)

6.03.07

Shares to be issued

(51)

-

6.03.10

Cost on loans

-

-

6.04

Exchange and monetary variations, net

(127,137)

(62,766)

6.05

Net increase in cash and cash equivalents

57,519

489,903

6.05.01

Cash and cash equivalents at beginning of the year

1,898,773

1,635,647

6.05.02

Cash and cash equivalents at end of the year

1,956,292

2,125,550

 

 

26


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information / Statements of Changes in Equity – From 01/01/2015 to 03/31/2015

 

(In thousands of Brazilian Reais)

 

 

 

 

 

 

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

2,468,585

852,935

(3,701,194)

(138,713)

(518,387)

185,413

(332,974)

5.03

Adjusted balance

2,468,585

852,935

(3,701,194)

(138,713)

(518,387)

185,413

(332,974)

5.04

Stockholder’s capital transactions

38

5,041

-

-

5,079

2,971

8,050

5.04.08

Share-based payments

-

2,786

-

-

2,786

274

3,060

5.04.09

Stock options exercised

38

-

-

-

38

4,952

4,990

5.04.10

Gains on change on investment

-

2,255

-

-

2,255

(2,255)

-

5.05

Total comprehensive (loss) income

-

-

(704,556)

(39,843)

(744,399)

31,834

(712,565)

5.05.01

Net loss for the period

-

-

(704,556)

-

(704,556)

31,834

(672,722)

5.05.02

Other comprehensive income (loss)

-

-

-

(39,843)

(39,843)

-

(39,843)

5.05.02.06

Other comprehensive results, net

-

-

-

(39,843)

(39,843)

-

(39,843)

5.07

Closing balance

2,468,623

857,976

(4,405,750)

(178,556)

(1,257,707)

220,218

(1,037,489)

 

 

 

27


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information / Statements of Changes in Equity – From 01/01/2013 to 12/31/2014

 

(In thousands of Brazilian Reais)

 

 

Line code

Line item

Capital Stock

Capital reserves, options

granted and

treasury shares

Accumulated losses

Other comprehensive loss

Total consolidated equity

Non-controlling

Interests

Total consolidated

equity

5.01

Opening balance

2,356,295

767,818

(2,455,025)

(18,162)

650,926

567,574

1,218,500

5.03

Adjusted opening balance

2,356,295

767,818

(2,455,025)

(18,162)

650,926

567,574

1,218,500

5.04

Shareholders’ capital transactions

-

73,970

-

-

73,970

37,949

111,919

5.04.09

Gains on investment sold

-

73,970

 

 

73,970

37,949

111,919

5.05

Total comprehensive income

-

1,592

(131,195)

(29,711)

(159,314)

35,205

(124,109)

5.05.02

Other comprehensive income

-

1,592

(131,195)

(29,711)

(159,314)

35,205

(124,109)

5.04.02.06

Share-based payments

-

1,592

-

-

1,592

156

1,748

5.05.02.07

Net loss for the period

-

-

(131,195)

-

(131,195)

35,049

(96,146)

5.05.02.08

Other comprehensive results, net

-

-

-

(29,711)

(29,711)

-

(29,711)

5.07

Closing balance

2,356,295

843,380

(2,586,220)

(47,873)

565,582

640,728

1,206,310

 

 

28


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information / Statements of Value Added

 

(In thousands of Brazilian Reais)

 

 

   

Current Year

Prior Year

 

Line code

 

Line item

01/01/2015 to 03/31/2015

01/01/2014 to 03/31/2014

7.01

Revenue

2,657,355

2,677,010

7.01.02

Other revenue

2,657,987

2,672,815

7.01.02.01

Passengers, cargo and other

2,649,978

2,624,442

7.01.02.02

Other operating income

8,009

48,373

7.01.04

Allowance/reversal for doubtful accounts

(632)

4,195

7.02

Acquired from third parties

(1,626,308)

(1,723,166)

7.02.02

Material, power, third-party services and other

(693,445)

(528,974)

7.02.04

Other

(932,863)

(1,194,192)

7.02.04.01

Suppliers of fuel and lubrificants

(802,432)

(1,023,879)

7.02.04.02

Aircraft insurance

(6,447)

(4,885)

7.02.04.03

Sales and advertising

(123,984)

(165,428)

7.03

Gross value added

1,031,047

953,844

7.04

Retentions

(100,425)

(135,252)

7.04.01

Depreciation, amortization and exhaustion

(100,425)

(135,252)

7.05

Added value produced

930,622

818,592

7.06

Value added received in transfer

139,180

102,306

7.06.01

Equity in subsidiaries

(1,223)

(446)

7.06.02

Financial income

140,403

102,752

7.07

Total wealth for distribution

1,069,802

920,898

7.08

Wealth for distribution

1,069,802

920,898

7.08.01

Employees

384,146

325,499

7.08.01.01

Salaries

312,699

271,510

7.08.01.02

Benefits

45,363

30,398

7.08.01.03

F.G.T.S.

26,084

23,591

7.08.02

Taxes

136,771

182,049

7.08.02.01

Federal taxes

129,865

175,474

7.08.02.02

State taxes

6,616

5,974

7.08.02.03

Municipal taxes

290

601

7.08.03

Third-party capital remuneration

1,221,607

509,496

7.08.03.01

Interest

1,002,008

272,415

7.08.03.02

Rent

214,649

212,962

7.08.03.03

Other

4,950

24,119

7.08.03.03.01

Lenders

4,950

24,119

7.08.04

Capital remuneration

(672,722)

(96,146)

7.08.04.03

Loss for the period

(704,556)

(131,195)

7.08.04.04

Non-controlling interest

31,834

35,049

29


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands 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 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.

 

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 12, 2015. The Company’s registered Office is at Praça Comandante Linneu Gomes, s/n, portaria 3, prédio 24, Jardim Aeroporto, São Paulo, Brazil.

 

2.1.    Basis of preparation  

 

The individual and consolidated interim financial information – ITR was prepared for the three-month period ended on March 31, 2015 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, 2014 filed on March 30, 2015, 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, 2014 to March 31, 2015.

 

30


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

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.

 

The non-financial information included on this Individual and consolidated interim financial information - ITR, such as sales volume, agreement information, forecasts, insurance, among others, have not been reviewed.

 

2.2.    New standards, amendments and interpretations

 

a) New standards and interpretations issued by IASB but not applicable until March 31, 2015 with no early adoption by the Company:

 

•    IFRS 9 Financial instruments: On July, 2014, IASB issued the final version of IFRS 9 - Financial Instruments, which reflects all phases of the financial instruments project, and replaces the IAS 39 - Financial Instruments: Recognition and Measurement and all IFRS 9’s previous versions. The standard introduces new requirements on classification and measurement, loss on impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on January 01, 2018 or thereafter, and the early application is not allowed. Retrospective application is required, but it is not mandatory, however, the presentation of comparative information. Early adoption of earlier versions of IFRS 9 (2009, 2010 and 2013) is allowed if the initial application date is earlier than February 01, 2015. The adoption of IFRS 9 will have an effect on the classification and measurement of the Company’s financial assets, not causing, however, any impact on the classification and measurement of the financial liabilities of the Company.

•    IFRS 15 Revenue contract with customers: Establish a model of five steps that apply to income received from a customer contract, regardless of the type of revenue or industry transaction. Applies to all revenue contracts and provides a model for the recognition and measurement of gains or losses on the sale of certain non-financial assets that are not related to the regular activities of the entity (i.e. real estate sales, installations and equipment or intangibles). Extensive disclosures are also required by this standard. This Statement shall be applied for annual periods beginning on or after January 01, 2017, with earlier application allowed.

 

In addition the following new standards, amendments and interpretations were issued by IASB, but the Company’s Management does not expect impacts on the individual and consolidated interim financial information on the initial adoption:

 

•    IFRS 14 - Deferred Regulatory Accounts - Applicable for annual periods beginning on January 01, 2016 or thereafter;

•    Amendments to IFRS 11 Joint Arrangements: Acquisitions accounting for corporate parties - Applicable for annual periods beginning on January 01, 2016 and thereafter, and the early application is not allowed in Brazil.

•    Amendments to IAS 16 and IAS 38 – Explanation of acceptable methods of depreciation amortization - The amendments are applicable prospectively for annual periods beginning on January 01, 2016 or thereafter.

 

 

 

31


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

The Company intends to adopt those Standards when these become effective and disclose and recognize the impacts in the interim financial information that may occur on application of those standards.

 

Considering the current of the Company and its subsidiaries, management does not expect this change to have a material effect on the interim financial information - ITR from its adoption.

 

There are no other standards and interpretations issued but not yet adopted that, in Management's opinion, have a significant impact on net income or equity issued by the Company.

 

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

 

03/31/2015

12/31/2014

03/31/2015

12/31/2014

Cash and bank deposits

72,565

32,995

554,018

507,248

Cash equivalents

467,177

426,369

1,402,274

1,391,525

 

539,742

459,364

1,956,292

1,898,773

           

 

The cash equivalents breakdown is as follows:

 

 

Individual

Consolidated

 

03/31/2015

12/31/2014

03/31/2015

12/31/2014

Private bonds

466,372

426,369

1,246,801

1,130,462

Government bonds

-

-

-

63

Investment funds

805

-

155,473

261,000

 

467,177

426,369

1,402,274

1,391,525

 

As of March 31, 2015, 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 90% and 101% of the Interbank Deposit Certificate rate (“CDI”) on the onshore investments.

 

The investment funds were represented primarily by government bonds paid at a weighted average rate of 100% of the CDI rate.

 

The investment funds classified as cash equivalents have high liquidity and, according to the Company analysis, readly convertible to a known amount of cash with insignificant risk of change in its value.

 

 

 

 

32


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

Repatriation of the generated cash in Venezuela

 

On January 23, 2014, the Venezuela government announced that the airline companies could request the repatriation of their resources generated by sales in Venezuela through CADIVI ("Comisión de Administración de Divisas") by the official rate of BS 6.30/US$1.00. This rate experienced a level increase and the rate as of March 31, 2015 was BS 12.00/US$1.00. The exchange variation control in Venezuela is determined on a weekly basis by its Federal Reserve (SICAD).

 

Given this increase, the Company recorded an exchange rate depreciation justified by the intention to repatriate values related to the operations performed in Venezuela as of January, 2014.

 

The total amount of the cash in Venezuela registered under “Cash and bank deposits” as of March 31, 2015 was BS 885,925. The cash related to 2013 sales is started at the official exchange rate of 6.3 bolivars per U.S. Dollar. Cash related to 2014 sales and repatriation requests are started using SICAD 1 at the exchange rate of 12.0 bolivars per U.S. Dollar. The portion accrued as an impairment from the Venezuelan Bolívar related to U.S. Dollar as of March 31, 2015 was R$75,237 (R$72,972 as of December 31, 2014). The net recoverable balance of R$377,027 is recorded as “Cash and bank deposits”. While the cash is available for use in Venezuela with no restriction, the Company ability to repatriate these funds has been limited due to Venezuelan government controls.

 

The register is subject to future changes due to the doubtful economic scenario in Vezenuela, with the possibility of new limitations in the cash flows by CADIVI or sanctions by the government that may difficult the cash repatriation of the amounts.

 

5.     Short-term investments

 

 

Individual

Consolidated

 

03/31/2015

12/31/2014

03/31/2015

12/31/2014

Private bonds

114

55,849

13,667

74,127

Government bonds

-

-

25,529

66,030

Investment funds

-

642

1,317

156,667

 

114

56,491

40,513

296,824

 

As of March 31, 2015, the private bonds were represented by CDBs and financial letters with first-rate financial institutions, paid at a weighted average rate of 110% of the CDI rate on onshore investments.

 

Government bonds are represented primarily by government bonds LTN, NTN and LFT paid at a weighted average of 100% of CDI rate.

 

Investment funds are represented primarily by private and government bonds paid at a weighted average of 101% of the CDI rate.

 

 

 

33


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

6.     Restricted cash

 

 

Individual

Consolidated

03/31/2015

12/31/2014

03/31/2015

12/31/2014

Margin deposits for hedge transactions (a)

-

-

118,656

82,025

Deposits in guarantee of letter of credit - Safra (b)

2,941

-

45,969

42,040

Escrow deposits - Bic Banco (c)

22,042

21,579

77,363

70,820

Escrow deposits - Leasing (d)

-

-

90,097

72,672

Escrow deposits - Debentures (e)

-

-

59,952

58,303

Other deposits

509

442

6,965

5,690

25,492

22,021

399,002

331,550

 

 

 

 

Current

7

7

59,959

58,310

Noncurrent

25,485

22,014

339,043

273,240

           

 

(a)    Denominated in U.S. Dollar, remunerated by libor rate (average remuneration of 0.5% p.a.).

(b)    The consolidated amount of R$43,028 is related to the the guarantee of the loan of the subsidiary Webjet (See Note 18).

(c)    The amount of R$22,042 on the individual Company and which comprises the consolidated balance is related to a contractual guarantee for STJ’s PIS and COFINS proceeding, paid to GLAI as detailed in Note 24b and existing notes guarantees.

(d)   Is related to a credit letter of operational leasings of aircraft.

(e)    Is related to debentures issued by the subsidiary Smiles at fair value, classified as current assets. For further information, see Note 18.

 

7.     Trade receivable

 

Consolidated

03/31/2015

12/31/2014

Local currency

 

 

Credit card administrators

89,319

72,116

Travel agencies

245,445

176,244

Installment sales

43,492

43,730

Cargo agencies

34,580

35,536

Airline partners companies

30,774

29,044

Other (*)

53,553

67,228

497,163

423,898

Foreign currency

 

 

Credit card administrators

28,032

18,502

Travel agencies

22,133

10,151

Cargo agencies

-

89

50,165

28,742

547,328

452,640

 

 

Allowance for doubtful accounts

(82,979)

(83,837)

464,349

368,803

 

 

Current

447,830

352,284

Noncurrent

16,519

16,519

 

(*) Includes the amount of R$33,038, related to commercial cooperation strategic partnership with Air France-KLM to be received in two equal installments on June, 2015 and 2016, being the long-term installment registered on “Other credits”. For further information, see Note 12e.

 

 

34


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

The aging list of accounts receivable is as follows:

 

 

Consolidated

 

03/31/2015

12/31/2014

Not yet due

370,976

278,311

Overdue until 30 days

24,929

14,480

Overdue 31 to 60 days

13,766

6,748

Overdue 61 to 90 days

2,623

3,606

Overdue 91 to 180 days

9,376

10,775

Overdue 181 to 360 days

33,540

34,434

Overdue above 360 days

92,118

104,286

 

547,328

452,640

 

The average collection period of installment sales is 6 months and a 6.99% monthly interest is charged on the receivable balance, recognized in financial result. The average collection period of the other receivables is 127 days as of March, 31 2015 and December, 31 2014.

 

The changes in the allowance for doubtful accounts are as follows:

 

 

Consolidated

 

03/31/2015

12/31/2014

Balance at beginning of the period

(83,837)

(85,101)

Additions

(6,050)

(17,143)

Unrecoverable amounts

1,387

9,624

Recoveries

5,521

8,783

Balance at the end of the period

(82,979)

(83,837)

 

8.     Inventories

 

Consolidated

 

03/31/2015

12/31/2014

Consumables

30,409

26,020

Parts and maintenance materials

131,284

117,748

Advances to suppliers

2,920

322

Others

10,732

7,450

Provision for obsolescence

(12,872)

(12,858)

162,473

138,682

 

The changes in the provision for obsolescence are as follows:

 

 

Consolidated

03/31/2015

12/31/2014

Balance at the beginning of the period

(12,858)

(12,227)

Additions

(22)

(3,968)

Write-off and reversal

8

3,337

Balance at the end of the period

(12,872)

(12,858)

 

 

 

35


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

9.     Deferred and recoverable taxes

 

a)      Recoverable taxes

 

Individual

Consolidated

03/31/2015

12/31/2014

03/31/2015

12/31/2014

ICMS

-

-

40,061

39,321

Prepaid income taxes

26,267

25,206

70,058

64,750

Withholding taxes (IRRF)

165

3,336

2,214

14,594

PIS and COFINS

-

-

6,378

2,472

Withholding tax of public institutions

-

-

7,369

16,845

Value added tax - IVA

-

-

19,145

12,280

Income tax on imports

1,076

657

1,077

734

Others

-

482

592

583

Total

27,508

29,681

146,894

151,579

 

 

 

 

Current assets

7,055

10,289

74,574

81,245

Noncurrent assets

20,453

19,392

72,320

70,334

 

b)      Deferred tax assets (liabilities) - long term

 

 

GLAI

VRG

Smiles

Consolidated

03/31/2015

12/31/2014

03/31/2015

12/31/2014

03/31/2015

12/31/2014

03/31/2015

12/31/2014

Income Tax losses

45,792

47,381

271,470

283,543

-

-

317,262

330,924

Negative basis of social contribution

16,485

17,057

97,729

102,075

-

-

114,214

119,132

Temporary differences:

 

 

 

 

 

 

 

 

Mileage program

-

-

36,992

46,853

-

-

36,992

46,853

Allowance for doubtful accounts and

other credits

-

-

87,538

95,874

1,136

729

88,674

96,603

Provision for losses on VRG’s acquisition

-

-

143,350

143,350

-

-

143,350

143,350

Provision for legal and tax liabilities

1,024

867

45,820

41,827

225

158

47,069

42,852

Aircraft return

-

-

129,368

102,524

-

-

129,368

102,524

Derivative transactions not settled

-

-

111,417

88,078

-

-

111,417

88,078

Tax benefit due to goodwill incorporation (a)

-

-

 

-

54,706

58,353

54,706

58,353

Flight rights

-

-

(353,226)

(353,226)

-

-

(353,226)

(353,226)

Maintenance deposits

-

-

(138,651)

(116,873)

-

-

(138,651)

(116,873)

Depreciation of engines and parts for

aircraft maintenance

-

-

(165,607)

(164,391)

-

-

(165,607)

(164,391)

Reversal of goodwill amortization on

VRG’s acquisition

-

-

(127,659)

(127,659)

-

-

(127,659)

(127,659)

Aircraft leasing

-

-

211,514

73,412

-

-

211,514

73,412

Others (b)

-

-

131,213

123,264

17,076

9,454

162,688

147,043

Total deferred tax and social

contribution - noncurrent

63,301

65,305

481,268

338,651

73,143

68,694

632,111

486,975

                   

 

(a)      Related to the tax benefit from the reverse incorporation of the G.A. Smiles Participações S.A. by the Company’s subsidiary Smiles S.A. Under the terms of the current legislation, the goodwill generated by the operation will be a deductible expense on the income tax and social contribution calculation.

(b)      The portion of taxes on Smiles unrealized profit in the amount of R$14,399 is registered directly in the consolidated column (R$14,325 as of December 31, 2014).

 

 

The Company, VRG and Webjet have net operating 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 profit. The unused balances of net operating losses carryforward are as follow:

 

 

36


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

 

Individual

(GLAI)

Direct subsidiary

(VRG)

Indirect subsidiary (Webjet)

 

03/31/2015

12/31/2014

03/31/2015

12/31/2014

03/31/2015

12/31/2014

Income tax losses

183,169

189,522

2,753,326

2,801,620

830,857

818,159

Negative basis of social

contribution

183,169

189,522

2,753,326

2,801,620

830,857

818,159

                 

 

As of March 31, 2015, the tax credits from tax loss carryforwards and negative social contribution basis were valued based on the reasonably expected generation of future taxable income of the parent Company and its subsidiaries, subject to legal limitations. The forecast of future taxable income on tax losses and negative tax base of social contribution were prepared based on the business plan and approved by the Board of Directors on December 19, 2014.

 

The Company and its subsidiaries hold the total amount of R$1,282,765, of which R$62,277 is related to its parent Company GLAI and R$1,220,488 is related to its subsidiaries VRG and Webjet.

 

The forecast of the parent Company presents sufficient taxable profits to be realized over future periods. For the indirect subsidiary Webjet, the forecast did not present sufficient taxable profits to be realized over future periods, and as a result, a provision was recorded for unrealizable loss tax credits of R$282,491. For the subsidiary VRG, such forecasts indicate sufficient taxable profits for such to be realized in the next 10 years. However, due to tax losses presented during the recent years, the Administration conducted a sensitivity analysis on the forecast results, and considering significant changes in the macroeconomic scenario due to changes on the dolar currency, registered the deferred tax assets on tax losses based on the lowest value obtained in this analysis. As a result, the Company and its subsidiaries did not recognized of R$566,933 in its subsidiary VRG.

 

The Company’s Management considers that the deferred assets recognized as of March 31, 2015 arising from temporary differences will be realized when the provisions are settled and the related future events are resolved.

 

Individual

Consolidated

03/31/2015

03/31/2014

03/31/2015

03/31/2014

Loss before income tax and social contribution

(697,361)

(131,189)

(712,710)

(49,332)

Combined tax rate

34%

34%

34%

34%

Income tax credits at the combined tax rate

237,102

44,604

242,321

16,773

Adjustments to calculate the effective tax rate:

 

 

 

 

Equity results

(94,892)

(65,950)

(417)

(152)

Tax losses from wholly-owned subsidiaries

(16,075)

433

(16,414)

183

Income tax on permanent differences and other

 

-

342

(337)

Nontaxable revenues (nondeductible expenses), net

(495)

(6,130)

(12,019)

(27,810)

Exchange variation on foreign investments

(132,835)

28,791

(172,185)

41,104

Benefit on tax losses and temporary differences

not constituted

-

(1,754)

(1,639)

(76,575)

Income tax and social contribution credit (expense)

(7,195)

(6)

39,989

(46,814)

 

 

 

 

Current income tax and social contribution

(5,035)

-

(84,466)

(39,256)

Deferred income tax and social contribution

(2,160)

(6)

124,455

(7,558)

(7,195)

(6)

39,989

(46,814)

Effective rate

1.03%

-

-

94.90%

 

 

37


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

10.  Prepaid expenses

 

Individual

Consolidated

 

03/31/2015

12/31/2014

03/31/2015

12/31/2014

Deferred losses from sale-leaseback

transactions (a)

-

-

24,457

26,525

Prepaid lease

-

-

8,477

44,093

Prepaid insurance

348

532

15,970

21,408

Prepaid commissions

-

-

18,701

16,204

Others (b)

-

-

36,668

9,573

348

532

104,273

117,803

 

 

 

 

Current

348

532

88,096

99,556

Noncurrent

-

-

16,177

18,247

 

(a)   Related to 11 aircraft 737-800 Next Generation from sale-leaseback transaction from 2006 to 2009. For further information, see Note 30b.

(b)   Includes the amount of R$27,351 related to the agreement with Confederação Brasileira de Futebol (“CBF”) signed in 2013, for the sponsorship and transportation of the Brazilian soccer team and other participating teams in the Brazilian cup and championship, with maturity in the year 2017.

 

11.  Deposits

 

Individual

Consolidated

 

03/31/2015

12/31/2014

03/31/2015

12/31/2014

Judicial deposits (a)

29,227

26,706

282,460

266,686

Maintenance deposits (b)

-

-

424,569

343,688

Deposits in guarantee for lease agreements (c)

-

-

218,460

183,134

 

29,227

26,706

925,489

793,508

 

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, 2015 the blocked amounts regarding the Varig’ succession and the third-party lawsuits are R$87,314 and R$69,764 respectively (R$85,558 and R$66,970 as of December 31, 2014, 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 leasing 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.

 

38


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

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.

 

12.  Transactions with related parties

 

a)    Loan agreements - Noncurrent assets and liabilities

 

       Parent Company

 

The Company maintains loan agreements, assets and liabilities, with its subsidiary VRG without interest, maturity or guarantees prescribed, as set forth below:

 

 

Asset

Liability

 

03/31/2015

12/31/2014

03/31/2015

12/31/2014

GLAI with VRG

53,847

52,778

-

4,129

GAC with VRG (*)

-

-

186,826

129,658

LuxCo with VRG

-

-

-

17,621

 

53,847

52,778

186,826

151,408

           

 

(*)        The values that the Company maintains with GAC and Finance, subsidiaries abroad, are subject to exchange rate variations on U.S. Dollars.

 

Additionally, the Parent Company holds loans between: Finance (asset) with Gol LuxCo (liability) and Gol LuxCo (asset) with GAC (liability) in the amount of R$631,656. These transactions are eliminated by the Company, since the entities are offshore and are considered an extension of the Company’s operations.

 

b)    Transportation services and consulting

 

All the agreements related to transportation and consulting services are held by the Company’ subsidiary VRG. The related parties for these services are:

 

i.     Breda Transportes e Serviços S.A. for passenger and luggage transportation services between airports, and transportation of employees, expiring on May 31, 2015, 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).

ii.     Expresso União Ltda., to provide employees’ transportation, maturing on August 01, 2016.

iii.    Serviços Gráficos S.A., providing graphic services, maturing on July 01, 2015.

iv.   Pax Participações S.A., to provide consulting and advisory services, with maturity agreement on April 30, 2015.

 

39


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

v.      Vaud Participações S.A. to provide executive administration and management services, expiring on October 01, 2016.

 

As of March 31, 2015, balances payable to related companies amounting to R$3,108 (R$3,286 as of December 31, 2014) are included in the balance of accounts payables and substantially refers to the payment to Breda Transportes e Serviços S.A..

 

During the period ended on March 31, 2015, the subsidiary VRG recognized the total expenses related to these services of R$3,896 (R$3,481 as of March 31, 2014).

 

c)    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 in the amounts of R$20 and R$40, respectively, 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.

 

d)    Financing contract for engine maintenance

 

The subsidiary VRG has a line of funding for maintenance of engines services, which disbursement occurs through the issuance of Guaranteed Notes.  As of March 31, 2015, VRG holds three series of Guaranteed Notes for maintenance of engines, issued on March 11, 2013, February 14, 2014 and March 13, 2015, maturing up to 3 years. During the period ended March 31, 2015 the spending on engine maintenance conducted by Delta Air Lines was R$71,755 (R$10,602 as of March 31, 2014).

 

e)    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 benefts 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$112,152, which payment is divided in three installments: the first installments in the amount of R$74,506 was received during the period ended March 31, 2015, the second and the third installments, both in the amount of R$16,519, will be received in June 2015 and 2016, respectively. The agreement will mature within 5 years and the installments will be amortized monthly. On June 30, 2014, the company has deffered revenue in the amount of R$24,300 and R$65,422 recorded as “Other Liabilities” in the current and noncurrent liability, respectively (R$22,430 and R$71,030 as of December 31, 2014, in the current and noncurrent liability, respectively).

 

 

 

 

40

 


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

f)     Remuneration of key management personnel

 

 

03/31/2015

03/31/2014

Salaries and benefits

5,411

5,760

Related taxes and charges

937

1,324

Share-based payments

2,069

1,075

 

8,417

8,159

 

As of March 31, 2015 and 2014 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.

 

13.  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 Company’s Stock Options Plan had changes approved by the Company’s Annual Shareholders’ Meeting held on April 30, 2010. The beneficiaries of the shares are allowed to purchase the option after 3 years from the grant date, with 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. On all the granted plans, the options may also be exercised within 10 years after the grant date.

 

On all the stock options, 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:

 

 

41

 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

 

Stock Options Plan

 

Option year

 

 

 

Board

meeting

 

 

Total options granted

Outstan-ding options

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)

2006

01/02/2006

99,816

13,220

47.30

51.68

39.87%

0.93%

18.00%

2

2007

12/31/2006

113,379

14,962

65.85

46.61

46.54%

0.98%

13.19%

3

2008

12/20/2007

190,296

41,749

45.46

29.27

40.95%

0.86%

11.18%

4

2009 (a)

02/04/2009

1,142,473

20,414

10.52

8.53

76.91%

-

12.66%

5

2010 (b)

02/02/2010

2,774,640

1,097,811

20.65

16.81

77.95%

2.73%

8.65%

6

2011

12/20/2010

2,722,444

966,890

27.83

16.07 (c)

44.55%

0.47%

10.25%

6

2012

10/19/2012

778,912

536,330

12.81

5.32 (d)

52.25%

2.26%

9.00%

8

2013

05/13/2013

802,296

572,616

12.76

6.54 (e)

46.91%

2.00%

7.50%

9

2014

08/12/2014

653,130

548,061

11.31

7.98 (f)

52.66%

3.27%

11.00%

10

 

 

9,277,386

3,812,053

19.44

 

 

 

 

6.96

 

(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).

 

The movement of the stock options for the period ended March 31, 2015 is as follows:

 

 

Total of stock

options

Weighted average exercise price

Options outstanding as of December 31, 2014

3,861,742

19.44

Options cancelled and adjustments in estimated lost rights

(49,689)

27.83

Options outstanding as of March 31, 2015

3,812,053

19.33

 

 

Number of options exercisable as of December 31, 2014

3,235,562

20.93

Number of options exercisable as of March 31, 2015

2,293,516

23.97

 

b)    Restricted shares

 

The Restricted Shares Plan was approved on the Extraordinary General Meeting held on October 19, 2012, and the first grants were approved at the Board of Directors’ meeting on November 13, 2012. The transfer of the restricted shares will occur after 3 years from the grant date, with an acquisition condition that the beneficiary maintains its employment relationship up to the end of this period.

 

Restricted shares

 

Year of

the share

Date of the Board Meeting

Total shares granted

Fair value of the share at grant date (in Reais)

Estimate volatility of share price

 

Risk-free rate of return

2012

11/13/2012

589,304

9.70

52.25%

9.0%

2013

05/13/2013

712,632

12.76

46.91%

7.5%

2014

08/12/2014

804,073

11.31

52.66%

11.0%

 

 

2,106,009

 

 

 

 

42


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

As of March 31, 2015, the Company transferred 19,093 restricted shares to its beneficiaries, amounting R$225.

 

Smiles

 

The Stock Option Plan

 

Stock Options Plan

 

 

Option year

 

 

Board Meeting

 

 

Total options granted

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 of return

 

 

Length of the option

(in years)

2013

08/08/2013

1,058,043

21.70

4.25 (a)

36.35%

6.96%

7.40%

10

2014

02/04/2014

1,150,000

31.28

4.90 (b)

33.25%

10.67%

9.90%

10

 

 

2,208,043

 

 

 

 

 

 

 

(a)     The fair value calculated for the plan was R$4.84, R$4.20 and R$3.73 for the respective periods of vesting from 2013 to 2016.

(b)     The fair value calculated for the plan was R$4.35, R$4.63, R$4.90, R$5.15 and R$5.17 for the respective periods of vesting from 2014 to 2018.

 

The movement of the stock options for the period ended March 31, 2015 is as follows:

 

 

Total of stock

options

Weighted average exercise price

Options outstanding as of December 31, 2014

1,347,926

28.75

Options exercised

(230,000)

21.53

Options outstanding as of March 31, 2015

1,117,926

27.25

 

For the  period ended March 31, 2015, the Company recorded in stockholders' equity a result from share-based payments in the amount of R$2,786 related to Company’s stockholders, which R$325 is related to Smiles, and R$274  related to its non-controlling stockholders (R$9,084 related to Company’s stockholders and R$1,254 related to its non-controlling stockholders for the year ended December 31, 2014) for the plans presented above, being the corresponding entry in the income statement result classified as personnel costs.

 

 

43

 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

14.  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 21.3% of the working capital of Netpoints Fidelidade S.A., hold by the subsidiary Smiles, and to SCP Trip investment, hold by the subsidiary VRG, both registered as equity method.

 

The change in investments during the period ended March 31, 2015 is as follows:

 

 

Individual

 

Consolidated

 

Gol

Dominicana

 

VRG

 

Smiles

 

Total

 

 

Trip

 

Netpoints

 

Total

Relevant information of the Company’s subsidiaries as of March 31, 2015:

     

 

 

 

 

 

Total number of shares

-

4,251,383,432

122,739,269

-

 

-

60,492,404

-

Capital

8,846

3,343,381

142,948

-

 

1,318

63,451

-

Interest

100.0%

100.0%

54.2%

-

 

60.0%

21.3%

-

Total stockholder’s equity

2,783

(391,801)

481,183

-

 

3,731

23,620

-

Unrealized gains (a)

-

-

(27,951)

-

 

-

-

-

Adjusted stockholder’s equity (b)

2,783

(391,801)

233,015

-

 

2,240

20,203

-

Net (loss) income for the period

(996)

(315,712)

69,595

-

 

243

(50,965)

-

Unrealized gains (a)

-

-

(146)

-

 

-

-

-

Net (loss) income for the year attributable

to Company’s stockholders

(996)

(315,712)

37,615

-

 

148

(1,371)

-

 

 

 

 

 

 

 

 

 

Changes on investments:

 

 

 

 

 

 

 

 

Balance as of December 31, 2014

1,197

(12,796)

192,819

181,220

 

2,092

6,391

8,483

Equity in subsidiaries

(996)

(315,712)

37,615

(279,093)

 

148

(1,371)

(1,223)

Exchange variation from foreign subsidiaries

(39)

(45)

-

(84)

 

-

-

-

Unrealized hedge losses

-

(39,843)

-

(39,843)

 

-

-

-

Gains due to change on investment

-

-

2,256

2,256

 

-

-

-

Capital increase

2,621

-

-

2,621

 

-

-

-

Goodwill on investment acquisition

-

-

-

-

 

-

15,183

15,183

Share-based payments

-

-

325

325

 

-

-

-

Amortization losses, net of sale leaseback (c)

-

(1,622)

-

(1,622)

 

-

-

-

Balance as of March 31, 2015

2,783

(370,018)

233,015

(134,220)

 

2,240

20,203

22,443

 

 

(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, as of March 31, 2015, the net balance to be deferred is essentially part of the net investment of the Parent Company in VRG. The net balance to be deferred as of March 31, 2015 was R$21,783 (R$23,406 as of December 31, 2014). For further details, see Note 30b.

 

 

44


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

 

15.  Losses 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 35 (thirty five) times of the dividends per share paid to common stockholders. Therefore, the Company understands that the economic capacity of the preferred shares is higher than the common shares.

 

Consequently, result per share is calculated by dividing the net income or loss by the weighted average number of all classes of shares outstanding during the period. Diluted earnings or loss per share are computed including stock options granted to key management and employees using the treasury shares method when the effect is dilutive. The antidilutive effect of all potential shares is disregarded in calculating diluted earnings or loss per share.

 

 

Individual

03/31/2015

03/31/2014

 

Common

Preferred

Common

Preferred

Numerator

   

 

 

Net loss for the period attributable to Company’

stockholders

(342,118)

(362,438)

(68,190)

(63,005)

Diluted securities effect - Smiles (a)

(168)

(178)

(71)

(66)

(342,286)

(362,616)

(68,261)

(63,071)

Denominator

 

 

 

 

Weighted average number of outstanding

shares (In thousands)

5,539,261

152,403

5,035,030

132,919

Adjusted weighted average number of outstanding shares and diluted presumed conversions (In thousands)

5,539,261

152,403

5,035,030

132,919

 

 

 

 

Basic loss per share (b)

(0.062)

(2.378)

(0.014)

(0.474)

Diluted loss per share (b)

(0.062)

(2.379)

(0.014)

(0.475)

 

 

(a) Smiles holds a Stock Options Plan for its employees. These equity instruments have a dilutive effect on earnings per share of this subsidiary, impacting, therefore, the loss considered on the basis calculation of Company’s diluted result per share, in accordance with CPC 41.

(b) The weighted average considers the split of common shares approved at the Extraordinary General Meeting held on March 23, 2015, in accordance with CPC 41 (IAS 33). Earnings per share presented reflects of the economic strenght of each class of shares.

 

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 transactions, described in Note 13. However, due to the losses reported for the period ended on March 31, 2015, these instruments issued have anti-dilutive effect and, therefore, are not considered in the total number of outstanding shares.

 

 

 

45


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

 

16.  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 20 aircraft 737-800 Next Generation (21 aircraft as of December 31, 2014) and 109 aircraft 737-MAX (109 aircraft as of December 31, 2014) in the amount of R$467,811 (R$434,387 as of December 31, 2014) and the right to the residual value of aircraft in the amount of R$427,300 (R$427,300 as of December 31, 2014), both held by the subsidiary GAC.

 

Consolidated

 

03/31/2015

12/31/2014

 

Weighted anual depreciation rate

 

 

 

Cost

 

 

Accumulated

depreciation

 

 

Net

amount

 

 

Net

amount

 

Flight equipment

 

 

 

 

 

Aircraft under finance leasing (a)

4%

3,086,855

(1,044,522)

2,042,333

2,079,724

Sets of replacement parts and

spares engines

4%

1,130,901

(375,148)

755,753

755,640

Aircraft reconfigurations/overhauling

30%

1,042,750

(779,800)

262,950

198,359

Aircraft and safety equipment

20%

2,051

(1,238)

813

840

Tools

10%

29,355

(15,954)

13,401

13,751

 

5,291,912

(2,216,662)

3,075,250

3,048,314

 

 

 

 

 

Impairment losses (b)

-

(26,101)

-

(26,101)

(33,381)

 

5,265,811

(2,216,662)

3,049,149

3,014,933

Property, plant and equipment in use

 

 

 

 

 

Vehicles

20%

10,231

(8,630)

1,601

1,709

Machinery and equipment

10%

50,727

(25,997)

24,730

25,647

Furniture and fixtures

10%

21,695

(14,312)

7,383

7,091

Computers and peripherals

20%

38,257

(27,877)

10,380

10,940

Communication equipment

10%

2,532

(1,540)

992

1,032

Facilities

10%

4,493

(3,840)

653

724

Maintenance center - Confins

10%

105,971

(49,719)

56,252

58,954

Leasehold improvements

20%

52,042

(42,423)

9,619

10,297

Construction in progress

-

19,192

-

19,192

14,510

 

305,140

(174,338)

130,802

130,904

 

5,570,951

(2,391,000)

3,179,951

3,145,837

Advances for aircraft acquisition

-

495,292

-

495,292

456,197

 

6,066,243

(2,391,000)

3,675,243

3,602,034

 

(a)  The aircraft under finance lease with purchase option at the end of the agreement are linearly depreciated by the estimated useful life until its residual value of 20%, estimated based on market values.

(b)  Refers to provisions recorded by the Company in order to present its assets according to the potential of monetary benefit generation.

 

 

46

 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

 

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, 2013

2,175,697

987,310

467,763

141,389

3,772,159

Additions

60,679

189,917

482,911

18,064

751,571

Disposals

(304)

(5,064)

(494,477)

(46)

(499,891)

Depreciation

(156,348)

(236,954)

-

(28,503)

(421,805)

As of December 31, 2014

2,079,724

935,209

456,197

130,904

3,602,034

Additions

(2,920)

127,497

217,837

7,182

349,596

Disposals

-

(4,230)

(178,742)

-

(182,972)

Depreciation

(34,471)

(51,661)

-

(7,283)

(93,415)

As of March 31, 2015

2,042,333

1,006,815

495,292

130,803

3,675,243

 

(*) Additions primarily represent: (i) total estimated costs to be incurred relating to the reconfiguration of the aircraft when returned and, (ii) capitalized costs related to major engine overhaul.

 

17.  Intangible assets

 

 

 

 

Goodwill

Airport operating

licenses

 

 

Software

 

 

Total

Balance as of December 31, 2013

542,302

1,038,900

112,988

1,694,190

Additions

15,183

-

46,308

61,491

Disposals

-

-

(4)

(4)

Amortizations

-

-

(41,491)

(41,491)

Balance as of December 31, 2014

557,485

1,038,900

117,801

1,714,186

Additions

-

-

9,353

9,353

Disposals (*)

(15,183)

-

-

(15,183)

Amortizations

-

-

(7,010)

(7,010)

Balance as of March 31, 2015

542,302

1,038,900

120,144

1,701,346

 

(*) Referes to the goodwill transfer related to Netpoints S.A. acquisition by the subsidiary Smiles S.A., under “investments” for better presentation.

 

 

47


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

18.  Short and long-term debt

 

Maturity of

the contract

Interest rate

 

Individual

 

Consolidated

   

 

03/31/2015

12/31/2014

03/31/2015

12/31/2014

Short-term debt

           

Local currency:

   

 

 

 

 

BNDES – Direct (a)

Jul, 2017

TJLP+1.40% p.a.

-

-

3,119

3,111

Debentures IV (b)

Sep, 2018

128% from DI

-

-

172,677

166,974

Debentures Smiles (c)

Jul, 2015

115% from DI

-

-

203,737

347,484

Safra (d)

May, 2018

128% from DI

-

-

16,435

16,357

Interest

-

-

-

-

986

10,153

Foreign currency (in US$):

 

 

 

 

 

 

J. P. Morgan (e)

Feb, 2016

0.91% p.a.

-

-

105,128

54,213

Finimp (f)

Mar, 2016

3.21% p.a.

-

-

212,157

117,598

Engine Facility (Cacib) (g)

Jun, 2021

Libor 3m+2.25% p.a.

-

-

16,951

14,048

Interest

-

-

50,970

56,619

49,578

55,470

 

 

 

50,970

56,619

780,768

785,408

Financial lease

Jul, 2025

4.97% p.a.

-

-

390,518

325,326

Total short-term debt

 

 

50,970

56,619

1,171,286

1,110,734

 

 

 

 

 

 

 

Long-term debt

 

 

 

 

 

 

Local currency:

 

 

 

 

 

 

BNDES – Direct (a)

Jul, 2017

TJLP+1.40% p.a.

-

-

4,130

4,904

Debentures IV (b)

Sep, 2018

128% from CDI

-

-

443,706

443,076

Debentures V (h)

Jun, 2017

128% from CDI

-

-

491,562

490,625

Safra (d)

May, 2018

128% from DI

-

-

82,585

82,585

Foreign currency (in US$):

 

 

 

 

 

 

J.P. Morgan (e)

Mar, 2018

0.90% p.a.

-

-

84,340

13,566

Engine Facility (Cacib) (g)

Jun, 2021

Libor 3m+2.25% p.a.

-

-

187,385

158,447

Senior Bond I (i)

Apr, 2017

7.50% p.a.

269,982

223,543

269,982

223,543

Senior Bond II (j)

Jul, 2020

9.25% p.a.

494,170

408,663

494,170

408,663

Senior Bond III (k)

Feb, 2023

10.75% p.a.

112,864

93,450

102,708

82,970

Senior Bond IV (l)

Jan, 2022

8.87% p.a.

1,016,913

841,313

1,016,913

841,313

Perpetual Bond (m)

-

8.75% p.a.

641,600

531,240

574,232

475,460

 

 

2,535,529

2,098,209

3,751,713

3,225,152

Financial lease

Jul, 2025

4.97% p.a.

-

-

2,201,484

1,899,353

Total long-term debt

   

2,535,529

2,098,209

5,953,197

5,124,505

 

 

 

 

 

 

 

Total

 

 

2,586,499

2,154,828

7,124,483

6,235,239

 

(a) Credit line obtained on June 27, 2012, to the expansion of the aircraft maintenance Center ("CMA").

(b) Issuance of 600 debentures on September 30, 2010, which the amount raised were used to supply working capital on the subsidiary VRG.

(c) Issuance of 60,000 debentures on July 15, 2014, which the amount raised were used on the capital reduction on Smiles, at the same date.

(d)The total amount of the financing as of March 31, 2015 was R$99,020 with guaranteed deposits in the amount of R$43,028 as shown in Note 6.

(e) Issuance of 3 series of Guaranteed Notes to finance engine maintenance. For further information, see Note 12d.

(f)  Credit line with Banco do Brasil and Banco Safra of import financing for purchase of spare parts and aircraft equipment.

(g)Credit line raised on June 30, 2014 with Credit Agricole.

(h)Issuance of 500 debentures on June 10, 2011, which the amount raised was used to supply working capital on the subsidiary VRG.

(i)  Issuance of the Bond by the subsidiary Finance on March 22, 2007was used on pre-payments financing for purchase of aircraft.

(j)  Issuance of Bond by the subsidiary Finance on July 13, 2010 in order to pay debts held by the Company.

(k) Issuance of the Bond by the subsidiary VRG on February 07, 2013 in order to finance the pre-payment of debts that will mature in the next 3 years. The total amount of the Bond was transferred to the subsidiary LuxCo, along with the financial applications acquired on the date of issuance, and and a portion of the loan was prepaid.

 

48


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

(l)  Issuance of the Bond by the subsidiary LuxCo on September 24, 2014 in order to finance the repurchase of the Senior Bonds I, II and III.

(m) Issuance of the Bond by the subsidiary Finance on April 05, 2006 to finance aircraft purchase and bank loans.

The maturities of long-term debt as of March 31, 2015 are as follows:

 

2016

2017

2018

2019

After

2019

Without

maturity date

Total

Individual

 

 

 

 

 

 

 

Foreign currency (in US$):

 

 

 

 

 

 

 

Senior Bond I

-

269,982

-

-

-

-

269,982

Senior Bond II

-

-

-

-

494,170

-

494,170

Senior Bond III

-

-

-

-

112,864

-

112,864

Senior Bond IV

-

-

-

-

1,016,913

-

1,016,913

Perpetual Bond

-

-

-

-

-

641,600

641,600

Total

-

269,982

-

-

1,623,947

641,600

2,535,529

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

Local currency:

 

 

 

 

 

 

 

BNDES - Direct

2,323

1,807

-

-

-

-

4,130

Safra

33,333

33,333

15,919

-

-

-

82,585

Debentures IV

50,100

50,100

343,506

-

-

-

443,706

Debentures V

250,000

241,562

-

-

-

-

491,562

Foreign currency (in US$):

 

 

 

 

 

 

 

J.P. Morgan

32,834

43,350

8,156

-

-

-

84,340

Engine Facility (Cacib)

12,869

17,159

17,159

17,159

123,039

-

187,385

Senior Bond I

-

269,982

-

-

-

-

269,982

Senior Bond II

-

-

-

-

494,170

-

494,170

Senior Bond III

-

-

-

-

102,708

-

102,708

Senior Bond IV

-

-

-

-

1,016,913

-

1,016,913

Perpetual Bond

-

-

-

-

-

574,232

574,232

Total

381,459

657,293

384,740

17,159

1,736,830

574,232

3,751,713

 

The fair value of senior and perpetual bond as of March 31, 2015 is as follows:

 

 

Individual

Consolidated

 

Book

Market

Book

Market

Senior Bonds (*)

1,893,929

1,597,521

1,883,773

1,597,521

Perpetual Bond

641,600

429,327

574,232

384,247

 

(*) Senior and Perpetual Bonds' market prices are obtained through the current market quotations (level 1).

 

a)    Covenants

 

Long-term financing (excluding perpetual bonds and financing of aircraft) in the total amount of R$3,177,481, as of March 31, 2015 (R$2,749,692 as of December 31, 2014), hold clauses and contratual restrictions, including but not limited to those that require the Company to maintain the liquidity requirements defined  and the cover of expenses with interest.

 

The Company has restrictive covenants in its financing agreements with the following financial institutions: Bradesco and Banco do Brasil (Debentures IV e V), with semi-annual measurements. As of December 31, 2014, the funding by the debentures IV and V have the following restrictive clauses: (i) net debt/EBITDAR below 4.58, and (ii) coverage of debt (CID) of at least 1.00. As of March 31, 2015, the Company did not performed measurement, since the measures from December 31, 2014 were still valid.

 

49


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

 

b)    New loans from the period ended March 31, 2015

 

The Company, during the period ended March 31, 2015, obtained new debt financings, as below:

 

i. Import financing (Finimp): The subsidiary VRG raised funds through long-term financings during the period, with promissory notes as guarantee of the operations. The information related to the loans are below:

 

Date of

loan

Financial institution

Amount

raised (US$)

Amount

raised (R$)

Interest

rate

Maturity

date

02/13/2015

Banco do Brasil

6,557

21,034

4.27% p.a.

02/10/2016

03/09/2015

Banco do Brasil

6,019

19,308

4.16% p.a.

03/03/2016

03/30/2015

Banco Safra

8,156

26,167

4.05% p.a.

03/24/2016

 

ii. Financing of engine maintenance (J.P. Morgan): On March 13, 2015, the subsidiary VRG obtained a financing in the amount of R$130,795 (US$40,539 at the date of the loan) with quarterly amortization and interest payments and issuance costs of R$4,198 (US$1,334 at the date of the loan) and financial guarantee by Export-Import Bank of the United States (“Ex-Im Bank”).

 

c)    Financial leases

 

The future payments of financial leasing contracts indexed to U.S. Dollar are detailed below:

 

 

Consolidated

03/31/2015

12/31/2014

2015

371,587

417,149

2016

482,104

399,179

2017

446,174

369,429

2018

438,542

363,110

2019

364,945

302,171

Beyond 2019

851,907

698,898

Total minimum lease payments

2,955,259

2,549,936

Less total interest

(363,257)

(325,257)

Present value of minimum lease payments

2,592,002

2,224,679

Less current portion

(390,518)

(325,326)

Noncurrent portion

2,201,484

1,899,353

 

The discount rate used to calculate the present value of the minimum lease payments was 4.97% as of March 31, 2015 (5.00% as of December 31, 2014). There are no significant differences between the present value of minimum lease payments and the fair value of these financial liabilities.

  

 

50


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands 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, 2015, the withdrawals made for the repayment at maturity date of the lease agreements amount to R$205,849 (R$164,446 as of December 31, 2014) and are recorded in long-term debt.

 

19.  Salaries, wages and benefits

 

 

Individual

Consolidated

03/31/2015

12/31/2014

03/31/2015

12/31/2014

Salaries

-

-

188,928

158,216

INSS and FGTS recoverable

578

511

72,675

67,189

Profit sharing plan

-

-

22,593

24,984

Others

12

8

6,640

5,051

590

519

290,836

255,440

 

 

20.  Taxes payable

 

 

Individual

Consolidated

 

03/31/2015

12/31/2014

03/31/2015

12/31/2014

PIS and COFINS

-

-

34,788

36,277

Withoholding tax on installments

-

-

1,551

-

Withholding taxes on salaries

2

-

34,363

27,841

ICMS

-

-

36,742

36,212

Tax on import

-

-

3,467

3,467

CIDE

143

-

2,606

1,480

IOF

35

-

35

35

IRPJ and CSLL payable

2,231

-

49,338

15,791

Others

52

-

14,002

13,798

2,463

-

176,892

134,901

 

 

 

 

Current

2,463

-

140,081

100,094

Noncurrent

-

-

36,811

34,807

 

21.  Advance ticket sales

 

As of March 31, 2015, the balance of transport to perform classified in current liabilities was R$912,809 (R$1,1010,611 as of December 31, 2014) and is represented by 5,078,190 coupons tickets sold and not yet used (5,382,145 as of December 31, 2014) with an average use of 57 days (40 days as of December 31, 2014).

 

22.  Mileage program

 

As of March 31, 2015, the balance of Smiles deferred revenue is R$234,733  (R$220,212 as of December 31, 2014) and R$616,432 (R$559,506 as of December 31, 2014) classified in the current and noncurrent liabilities, respectively and the number of outstanding miles as of March 31, 2015 amounted to 44,172,864,009 (42,412,047,693 as of December 31, 2014).

 

51


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

23.  Advances from customers

 

The Company, through its subsidiary Smiles, makes advances sales of miles which are recorded under "Advances from customers". As of March 31, 2015, the outstanding balance related to these advances sales is as follows:

 

 

Consolidated

03/31/2015

12/31/2014

Financial institutions (*)

87,125

1,850

Others

6,546

1,346

93,671

3,196

 

(*) A portion of the amount in the current liabilities of R$87,125 (R$1,850 as of December 31, 2014) is related to the miles sales agreement in the approximately total amount of R$109,170 signed on February 25, 2015 along with the financial institution Bradesco Santander S.A..

24.  Provisions

 

Consolidated

 

 

 

Insurance provision

Provision for aircraft and engine return

of VRG and

Webjet (a)

Provision for legal proceedings (b)

 

 

 

Total

Balance on December 31, 2014

21,916

361,651

102,093

485,660

Additional provisions recognized

1,049

(25,303)

12,526

(11,728)

Utilized provisions

(6,453)

31,848

(351)

25,044

Foreign exchange variation

2,542

69,284

-

71,826

Balance on March 31, 2015

19,054

437,480

114,268

570,802

       

As of December 31, 2014

       

Current

21,916

185,178

-

207,094

Noncurrent

-

176,473

102,093

278,566

21,916

361,651

102,093

485,660

       

As of March 31, 2015

 

 

 

 

Current

19,054

230,456

-

249,510

Noncurrent

-

207,024

114,268

321,292

19,054

437,480

114,268

570,802

 

(*) Refers to not utilized provisions.

 

a)    Return of aircraft and engines

 

The returns provisions consider 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 prescribed in the returns conditions of the lease contracts, and which is capitalized in fixed assets (aircraft reconfigurations/overhauling), as described in Note 16.

 

b)    Provision for legal proceedings

 

As of March 31, 2015 the Company and its subsidiaries are parties to 29,193 (8,325 labor and 20,868 civil) lawsuits and administrative proceedings. The lawsuits and administrative proceedings are classified into Operation (those arising from the Company’s normal course of operations), and Succession (those arising from the succession of former Varig S.A. obligations).

 

52


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

 

Under this classification, the number of proceedings is as follows:

 

 

Operation

Succession

Total

Civil lawsuits

17,214

383

17,597

Civil proceedings

3,261

10

3,271

Labor lawsuits

4,828

3,314

8,142

Labor proceedings

181

2

183

 

25,484

3,709

29,193

 

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:

 

 

03/31/2015

12/31/2014

Civil

59,568

55,097

Labor

54,700

46,996

 

114,268

102,093

 

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 risks, in the estimated amount as of March 31, 2015 of R$16,945 for civil claims and R$10,062 for labor claims (R$15,786 and R$2,341 as of December 31, 2014 respectively), for which no provisions are recognized.

 

The tax lawsuits below were evaluated by the Companys’ management and its legal consultants as being relevant and with probable risk as of March 31, 2015:

 

·  GLAI is discussing the non-incidence of taxation of PIS and COFINS on revenues generated by the interest on capital in the amount of R$37,750, 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 a letter of credit with Bic Banco with a partial guarantee on the lawsuit value of R$22,042 as disclosed in Note 6.

 

·  Tax on Services (ISS), the amount of R$17,198 (R$16,470 as of December, 31 2014) arising from assessment notices issued by the Prefeitura do Município de São Paulo against the Company, in the period from January, 2007 to December, 2010 regarding a possible ISS taxation on partners agreements. The classification of the possible risk stems 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.

 

53


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

·  Customs Penalty in the amount of R$34,564 (R$33,956 as of December, 31 2014) 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$43,608 (R$43,246 as of December, 31 2014) 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$18,167 (R$17,894 as of December, 31 2014) resulted from summons of violation related to the deductibility of the goodwill classified as future payment. The classification of probable risk arises from the absence of a final opinion from the Superior Courts.

 

There are other lawsuits considered by the Company’s management and its legal counsel as possible risk, in the estimated amount of R$121,206 (R$27,538 as of December, 31 2014) which added to the lawsuits mentioned above, amount to R$272,243 as of March 31, 2015 (R$176,854 as of December, 31 2014).

 

 

25.  Stockholders’ equity

 

a)    Issued capital

 

As of March 31, 2015, the Company’s capital is represented by 5,174,355,497 shares, of which 5,035,037,140 are common shares and 139,318,357 are preferred shares. On the Extraordinary General Meeting held on March 23, 2015 was approved the deployment of the Company’s common shares, in the ratio of 1 (one) to 35 (thirty five) shares, without changes in the shareholders’ ratio. The Fundo de Investimento em Participações Volluto is the Company’s controlling fund, which is equally controlled by Constantino de Oliveira Júnior, Henrique Constantino, Joaquim Constantino Neto, and Ricardo Constantino.

 

Shares are held as follows:

 

 

03/31/2015

12/31/2014

 

Common

Preferred

Total

Common

Preferred

Total

Fundo Volluto

100.00%

21.16%

61.22%

100.00%

21.16%

61.22%

Delta Airlines, Inc.

-

5.96%

2.93%

-

5.96%

2.93%

Fidelity Investments

-

5.05%

2.48%

-

5.05%

2.48%

Treasury shares

-

1.50%

0.74%

-

1.50%

0.74%

Other

-

1.33%

0.65%

-

1.33%

0.65%

Free float

-

65.00%

31.98%

-

65.00%

31.98%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

 

 

54


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

The authorized share capital, as of March 31, 2015, was R$4.0 billion. Within the authorized limit, the Company can, once approved by the Board of Directors, increase its capital regardless of any amendment to its bylaws, 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.

 

b)    Dividends

 

The Company’s bylaws provide for a mandatory minimum dividend to be paid to common and preferred stockholders, in the aggregate of at least 25% of annual adjusted profit after resevers in accordance with the Corporate Law (6,404/76). The Brazilian Corporate Law, permits the payment of cash dividends only from retained earnings, and certain reserves recognized in the Company’s statutory accounting records.

 

c)    Treasury shares

 

As of March 31, 2015, the Company holds 2,064,782 treasury shares, totaling R$31,132, with a market value of R$16,147 (R$31,357 in shares with market value of R$31,633 as of December 31, 2014).

 

d)    Share-based payments

 

As of March 31, 2015, the balance of share-based payments reserve was R$96,324 (R$93,763 as of December 31, 2014). The Company recorded a share-based payment expense amounting to R$2,786 related to the Company’s controlling stockholders, of which R$325 is related to Smiles, and R$274 related to its non-controlling stockholders in the period ended March 31, 2015, with a corresponding expense classified as personnel costs under the statement of profit or loss (R$1,592 related to the Company’s controlling stockholders and R$156 related to its non-controlling stockholders as of March 31, 2014).

 

e)    Other comphensive income (losses)

 

The fair value measurement of financial instruments designated as cash flow hedges is recognized as “Other Comphensive Income”, net of tax effects. The balance as of March 31, 2015 corresponds to a net loss of R$178,556 (net loss of R$138,713 as of December 31, 2014) as Note 31.

 

f)     Cost on issued shares

 

As of March 31, 2015 and December, 31 2014, the balance of costs on issued shares was R$36,886 on the parent company and R$150,214 on the consolidated balance.

 

 

 

 

55

 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

26.  Revenue

 

The net revenue has the following breakdown:

 

 

Consolidated

03/31/2015

03/31/2014

Passenger transportation

2,321,414

2,360,581

Cargo

71,822

77,320

Other revenue

256,742

186,541

Gross revenue

2,649,978

2,624,442

 

 

Related taxes

(144,746)

(131,043)

Net revenue

2,505,232

2,493,399

 

The revenues are net of federal, state and municipal taxes, which are paid and transferred to the appropriate government entities.

 

Revenue by geographical segment is as follows:

 

 

Consolidated

 

03/31/2015

%

03/31/2014

%

Domestic

2,225,627

88.8

2,219,211

89.0

International

279,605

11.2

274,188

11.0

Net revenue

2,505,232

100.0

2,493,399

100.0

 

 

56


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

27.  Costs of services, administrative and selling expenses

 

 

Individual

 

03/31/2015

03/31/2014

 

Total

%

Total

%

Personnel (a)

(1,487)

(28.3)

(2,224)

(5.0)

Services rendered

(829)

(15.8)

(2,589)

(5.9)

Sale-leaseback transactions (b)

8,009

152.3

48,801

111.9

Other operating expenses

(434)

(8.2)

(428)

(1.0)

 

5,259

100.0

43,560

100.0

 

 

 

 

Consolidated

03/31/2015

 

Cost of services

 

Selling expenses

 

Administrative expenses

Other operating income

 

 

Total

 

 

%

Personnel (a)

(338,864)

(15,616)

(57,199)

-

(411,679)

17.5

Fuel and lubricants

(786,806)

-

-

-

(786,806)

33.5

Aircraft rent

(214,649)

-

-

-

(214,649)

9.1

Aircraft insurance

(6,447)

-

-

-

(6,447)

0.3

Maintenance materials and repairs

(147,097)

-

-

-

(147,097)

6.3

Traffic services

(103,484)

(51,486)

(77,857)

-

(232,827)

9.9

Sales and marketing

-

(124,496)

(120)

-

(124,616)

5.3

Tax and landing fees

(168,859)

-

-

-

(168,859)

7.2

Depreciation and amortization

(80,897)

-

(19,528)

-

(100,425)

4.3

Sale-leaseback transactions (b)

-

-

-

8,009

8,009

(0.3)

Other, net

(115,645)

(14,585)

(34,540)

-

(164,770)

7.1

(1,962,748)

(206,183)

(189,244)

8,009

(2,350,166)

100.0

 

 

Consolidated

03/31/2014

 

Cost of services

 

Selling expenses

 

Administrative expenses

Other operating income

 

 

Total

 

 

%

Personnel (a)

(291,496)

(7,492)

(48,311)

-

(347,299)

14.8

Fuel and lubricants

(1,011,322)

-

-

-

(1,011,322)

43.0

Aircraft rent

(212,962)

-

-

-

(212,962)

9.1

Aircraft insurance

(4,885)

-

-

-

(4,885)

0.2

Maintenance materials and repairs

(75,531)

-

-

-

(75,531)

3.2

Traffic services

(92,387)

(23,747)

(49,709)

-

(165,843)

7.1

Sales and marketing

-

(161,233)

-

-

(161,233)

6.9

Tax and landing fees

(151,468)

-

-

-

(151,468)

6.4

Depreciation and amortization

(120,312)

-

(14,940)

-

(135,252)

5.8

Sale-leaseback transactions (b)

-

-

-

48,801

48,801

(2.1)

Other, net

(87,845)

(7,379)

(35,857)

(428)

(131,509)

5.6

(2,048,208)

(199,851)

(148,817)

48,373

(2,348,503)

100.0

 

(a)    The Company recognizes the cost of the Audit Committee and Board of Directors on “personnel”.

(b)    The amount of R$8,009 (R$48,801 as of March 31, 2014) comprises the gains fully recognized and deferred losses from sale-leaseback transactions of 1 aircraft during the period ended March 31, 2015 (6 aircraft for the period ended March 31, 2014).

 

 

 

57


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

28.  Financial income (expense)

 

 

Individual

Consolidated

 

03/31/2015

03/31/2014

03/31/2015

03/31/2014

Financial income

 

 

 

 

Income from derivatives

-

-

76,891

54,759

Income from short-term investments

and investment funds

1,789

1,462

56,921

42,171

Monetary variation

631

673

3,300

2,566

Other

111

-

3,291

3,256

2,531

2,135

140,403

102,752

Financial expenses

 

 

 

 

Losses from derivatives

-

(15,901)

(8,861)

(189,145)

Interest on short and long-term debt

(52,617)

(47,700)

(173,121)

(143,105)

Bank interest and expenses

(1,505)

(534)

(11,002)

(5,623)

Loss from short-term investments

and investment funds

-

-

(25,865)

(2,526)

Monetary variation

-

-

(1,188)

(976)

Other

(1,402)

(417)

(12,851)

(12,646)

(55,524)

(64,552)

(232,888)

(354,021)

 

 

 

 

Foreign exchange variation, net

(370,534)

81,638

(774,068)

57,487

 

 

 

 

Total

(423,527)

19,221

(866,553)

(193,782)

 

 

29.  Operating segment

 

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 airline industry and the loyalty program.

 

The accounting policies of the operating segments are the same as those applied to the consolidated Interim Financial Information. Additionally, the Company has distinct natures between the two reportable segments, which prevent any form of cost allocation, so there are no common costs and revenues between operating segments.

 

The Company is the majority shareholder of the subsidiary Smiles, being the non-controlling portion on its capital of 45.8% and 45.5% as of March 31, 2015 and December, 31 2014, respectively.

 

The information below presents the summarized financial position related to reportable segments for the period ended March 31, 2015 and December 31, 2014:

 

 

58


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

a)    Assets and liabilities of the operational segment

 

 

03/31/2015

Flight

transportation

Smiles loyalty

program

Combined information

Eliminations

Total consolidated

Assets

 

 

     

Current

2,520,263

964,357

3,484,620

(570,608)

2,914,012

Noncurrent

7,521,712

711,071

8,232,783

(818,302)

7,414,481

Total assets

10,041,975

1,675,428

11,717,403

(1,388,910)

10,328,493

 

 

 

 

 

Liabilities

 

 

 

 

 

Current

4,801,595

672,747

5,474,342

(1,127,945)

4,346,397

Noncurrent

6,498,086

521,498

7,019,584

1

7,019,585

Stockholder’s equity

(1,257,706)

481,183

(776,523)

(260,966)

(1,037,489)

Total liabilities and stockholder’s equity

10,041,975

1,675,428

11,717,403

(1,388,910)

10,328,493

 

 

12/31/2014

 

 

Flight

transportation

 

Smiles loyalty

program

 

 

Combined information

Eliminations

 

 

Total consolidated

Assets

 

       

Current

2,783,212

734,355

3,517,567

(531,369)

2,986,198

Noncurrent

7,061,616

832,848

7,894,464

(904,015)

6,990,449

Total assets

9,844,828

1,567,203

11,412,031

(1,435,384)

9,976,647

 

 

 

 

 

Liabilities

 

 

 

 

 

Current

3,992,760

708,292

4,701,052

(488,406)

4,212,646

Noncurrent

6,370,455

452,874

6,823,329

(726,354)

6,096,975

Stockholder’s equity

(518,387)

406,037

(112,350)

(220,624)

(332,974)

Total liabilities and stockholder’s equity

9,844,828

1,567,203

11,412,031

(1,435,384)

9,976,647

 

 

 

59

 


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

 

b)    Income and expenses of the operational segment

 

 

03/31/2015

 

Fligh

transportation

Smiles loyalty

Program

Combined

information

Eliminations

Total consolidated

Net revenue

   

 

 

 

Passenger

2,164,276

-

2,164,276

63,182

2,227,458

Cargo and other

231,704

-

231,704

(5,398)

226,306

Miles redeemed revenue

-

245,991

245,991

(194,523)

51,468

Costs

(1,952,721)

(131,767)

(2,084,488)

121,740

(1,962,748)

Net income

443,259

114,224

557,483

(14,999)

542,484

 

 

 

 

 

Operating expenses

 

 

 

 

 

Sales and marketing

(186,969)

(19,707)

(206,676)

493

(206,183)

Administrative expenses

(186,614)

(8,192)

(194,806)

5,562

(189,244)

Other operating revenue, net

8,009

-

8,009

-

8,009

(365,574)

(27,899)

(393,473)

6,055

(387,418)

 

 

 

 

 

Equity results

37,761

(1,371)

36,390

(37,613)

(1,223)

 

 

 

 

 

Finance result

 

 

 

 

 

Financial income

134,453

37,326

171,779

(31,376)

140,403

Financial expense

(253,363)

(10,900)

(264,263)

31,375

(232,888)

Exchange rate changes, net

(769,406)

(4,662)

(774,068)

-

(774,068)

 

 

 

 

 

Income (loss) before income tax and social contribution

(772,870)

106,718

(666,152)

(46,558)

(712,710)

 

 

 

 

 

Current and deferred income tax and social contribution

77,036

(37,123)

39,913

75

39,988

Total income (loss), net

(695,834)

69,595

(626,239)

(46,483)

(672,722)

 

 

 

 

 

 

Attributable to Company’ stockholders

(695,834)

69,595

(626,239)

(78,317)

(704,556)

Attributable to non-controlling stockholders

-

-

-

31,834

31,834

 

 

 

60


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

 

03/31/2014

 

Fligh

transportation

Smiles loyalty

Program

Combined

information

Eliminations

Total consolidated

Net revenue

   

 

 

 

Passenger

2,243,753

-

2,243,753

40,535

2,284,288

Cargo and other

178,805

-

178,805

8,588

187,393

Miles redeemed revenue

-

188,089

188,089

(166,371)

21,718

Costs

(2,056,386)

(99,788)

(2,156,174)

107,966

(2,048,208)

Net income

366,172

88,301

454,473

(9,282)

445,191

 

 

 

 

 

Operating expenses

 

 

 

 

 

Sales and marketing

(194,860)

(13,145)

(208,005)

8,154

(199,851)

Administrative expenses

(154,792)

(6,119)

(160,911)

12,094

(148,817)

Other operating revenue, net

48,373

-

48,373

 

48,373

(301,279)

(19,264)

(320,543)

20,248

(300,295)

 

 

 

 

 

Equity results

-

(446)

(446)

-

(446)

 

 

 

 

 

Finance result

 

 

 

 

 

Financial income

92,064

49,931

141,995

(39,243)

102,752

Financial expense

(393,246)

(18)

(393,264)

39,243

(354,021)

Exchange rate changes, net

57,130

357

57,487

-

57,487

 

 

 

 

 

Income (loss) before income tax and social contribution

(179,159)

118,861

(60,298)

10,966

(49,332)

 

 

 

 

 

Current and deferred income tax and social contribution

(9,002)

(40,548)

(49,550)

2,736

(46,814)

Total income (loss), net

(188,161)

78,313

(109,848)

13,702

(96,146)

 

 

 

 

 

 

Attributable to Company’ stockholders

(188,161)

78,313

(109,848)

(21,347)

(131,195)

Attributable to non-controlling stockholders

-

-

35,049

35,049

 

In the individual Interim Financial Information of the subsidiary 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 this perspective, 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 results, as well as for purposes of equity method of accounting and for consolidation purposes, the Company performed, besides eliminations entries, consolidating adjustments to adjust the accounting practices related to Smiles’ revenues. In this case, under the perspective of the consolidated Interim Financial Information, the miles 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.

 

61


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

30.  Commitments

 

As of March 31, 2015 the Company holds 129 firm orders for aircraft acquisitions with Boeing. These aircraft acquisition commitments include estimates for contractual price increases during the construction phase. The approximate amount of firm orders, not including the contractual discounts, is R$47,372,825 (corresponding to US$14,767,090 at the reporting date) and are segregated according to the following years:

 

 

03/31/2015

12/31/2014

2015

1,336,145

1,323,818

2016

1,672,853

1,385,110

2017

2,575,796

2,132,740

2018

1,759,363

1,456,740

2019

5,392,982

4,465,348

Beyond 2019

34,635,686

28,678,089

47,372,825

39,441,845

 

As of March 31, 2015, from the total orders mentioned above, the Company holds the amount of R$6,348,618 (corresponding to US$1,978,996  at the reporting date) related to advances for aircraft acquisition, to be disbursed in accordance with the following schedule:

 

 

03/31/2015

12/31/2014

2015

306,369

289,945

2016

186,253

154,216

2017

323,551

267,898

2018

786,389

651,124

2019

839,329

694,958

Beyond 2019

3,906,727

3,234,741

6,348,618

5,292,882

 

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 operational and financial leases. As of March 31, 2015, the total fleet leased was comprised of 140 aircraft, of which 95 were under operating leases and 45 were recorded as financial leases. The Company holds 40 aircraft under financial leasing with purchase option. During the period ended March 31, 2015, the Company received 1 aircraft and returned 2 aircraft under operating lease contracts.

 

 

62


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

a)    Operating leases

 

The future payments of non-cancelable operating lease contracts are denominated in U.S. Dollars, and are as follows:

 

 

03/31/2015

12/31/2014

2015

712,584

785,052

2016

907,801

697,744

2017

831,041

632,899

2018

706,347

539,329

2019

636,030

482,752

Beyond 2019

2,158,805

1,657,034

Total minimum lease payments

5,952,608

4,794,810

 

b)    Sale-leaseback transactions

 

The Company, during the years 2006 to 2009, recorded gains and losses from sale-leaseback transactions of aircraft 737-800 Next Generation. These gains and losses were deferred, and are being amortized proportionally to the payments of the operational lease agreements over the contract term of 120 months. The amounts registered during the period ended March 31, 2015 and December 31, 2014 are as follows:

 

 

Prepaid expenses

Other liabilities

 

Current

Noncurrent

Current

Noncurrent

 

03/31/2015

12/31/2014

03/31/2015

12/31/2014

03/31/2015

12/31/2014

03/31/2015

12/31/2014

Deferred losses (*)

8,280

8,280

16,177

18,245

-

-

-

-

Deferred gains (**)

-

-

-

-

1,783

1,783

891

1,337

 

(*)  Related to 2 aircraft from transactions on 2006.

(**) Related to 11 aircraft from transactions from 2006 to 2009.

 

Additionally, during the period ended on March 31, 2015, the Company recorded a net gain of R$8,009 resulting from 1 aircraft received during the period (R$48,801 related to 6 aircraft received during the period ended March 31, 2014) that were used as sale-leaseback transactions and resulted in operating leases. Given that the gains and losses from sale-leaseback transactions will not be offset against future lease payments and were negotiated at fair value, such gain was recognized directly in profit or loss.

 

31.  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 operations. The Company and its subsidiaries consider as most relevant risks: fuel price, exchange rate 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 means of exclusive investment funds, as described in the Risk Management Policy of the Company.

 

63


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

The 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 (CPR), and approved by the Board of Directors. The 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 gains or losses on these transactions and the application of risk management controls are part of the Committee’s monitoring and have been satisfactory when considering the objectives proposed.

 

The fair values of financial assets and liabilities of the Company and its subsidiaries are established through information available in the market and according to valuation methodologies.

 

Most of the derivative financial instruments are engaged with the purpose of hedging against fuel and exchange rates risks based on scenarios with low probability of occurrence, and thus have lower costs compared to other instruments with higher probability of occurrence. Consequently, despite the high correlation between the hedged item and the derivative financial instruments contracted, can presents ineffective positions for hedge accounting purposes upon settlement, which are presented in the tables below.

 

The description of the consolidated account balances and the categories of financial instruments included in the statements of financial position as of March 31, 2015 and December 31, 2014 is as follows:

 

 

Measured at fair value through profit or loss

Measured at amortized

cost

03/31/2015

12/31/2014

03/31/2015

12/31/2014

Assets

 

 

 

 

Cash and cash equivalents

1,956,292

1,898,773

-

-

Short-term investments (a)

40,513

296,824

-

-

Restricted cash

399,002

331,550

-

-

Derivatives operations assets (b)

52,310

18,846

-

-

Accounts receivable

-

-

447,830

352,284

Deposits (c)

-

-

643,029

526,822

Other credits

-

-

62,274

65,120

 

 

 

 

Liabilities

 

 

 

 

Loans and financing (d)

-

-

7,124,483

6,235,239

Suppliers

-

-

677,980

686,151

Derivatives obligations (b)

131,760

85,366

-

-

 

(a)    The Company manages its investments as held for trading to pay its operational expenses.

(b)    The Company registered as of March 31, 2015 the amount net of R$178,556, net of tax effects (R$138,713 as of December 31, 2014) in equity as an equity valuation resulting from these assets and liabilities, as explained in Note 25e.

(c)    Excludes the escrow deposits, as mentioned in Note 11.

(d)   The fair values are approximately the book values, according to the short term maturity period of these assets and liabilities, except the amounts related to Perpetual Bonds and Senior Notes, as disclosed on Note 18.

 

As of March 31, 2015 the Company had no financial assets available for sale.

 

64


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

Risks

 

The operating activities expose the Company and its subsidiaries to the following financial risks: market (especially currency risk, interest rate risk, and fuel price risk), credit and liquidity risks. These risks are originated by, essentially, leasing agreements of aircraft purchase.

 

The Company’s risk management policy aims at mitigating potential adverse effects from transactions that could affect its financial performance.

 

The Company’s and its subsidiaries’ decisions on the exposure portion to be hedged against financial risk, both for fuel consumption and currency and interest rate exposures, consider the risks and hedge costs.

 

The Company and its subsidiaries do not usually contract hedging instruments for its total exposure, and thus they are subject to the portion of risks resulting from market fluctuations. The portion of exposure to be hedged is determined and reviewed at least yearly in compliance with the strategies determined in the Risk Policies Committees. The relevant information on the main risks affecting the Company’s and its subsidiaries’ operation is as follows:

 

a)    Fuel price risk

 

As of March 31, 2015, fuel expenses accounted for 33.6% of the costs and operating expenses of the Company. The aircraft fuel price fluctuates both in the short and in the long term, in line with crude oil and oil byproduct price fluctuations.

 

To mitigate the risk of fuel price, the Company holds derivative financial instruments referenced mainly to crude oil and, eventually, to their derivatives, also contracted, directly with the local supplier, are future fuel deliveries to aircraft at predetermined prices.

 

As of March 31, 2015, there are no open transactions of derivatives instruments of fuel price variation hedge.

 

b)    Exchange rate risk

 

The exchange rate risk derives from the possibility of unfavorable fluctuation of foreign currencies to which the Company’s liabilities or cash flows are exposed. The exposure of the Company’s and its subsidiaries’ assets and liabilities to the foreign currency risk mainly derives from foreign currency-denominated trade accounts payable, leasing provision and leases and financing.

 

The Company’s revenues are mainly denominated in Brazilian Reais, except for a small portion in U.S. Dollar, Argentinean pesos, Bolivian bolivianos, Chilean peso, Colombian peso, Paraguay Guarani, Uruguayan peso, Venezuela bolivar etc.

 

To mitigate the risk of exchange rate, the Company holds derivative financial instruments that are referenced to the U.S. Dollar.

 

65


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

The currency exposure of the Company on March 31, 2015 and December 31, 2014 is shown below:

 

 

Individual

Consolidated

03/31/2015

12/31/2014

03/31/2015

12/31/2014

Assets

       

Cash and short-term investments

527,512

457,902

1,124,345

954,227

Trade receivables

-

-

50,052

35,095

Deposits

-

-

626,200

526,822

Prepaid expenses with leases

-

-

8,477

44,093

Result from hedge operations

-

-

52,310

18,846

Others

-

-

1,317

9,572

Total assets

527,512

457,902

1,862,701

1,588,655

 

 

 

 

Liabilities

 

 

 

 

Foreign suppliers

 

-

120,789

69,733

Short and long-term debt

2,586,499

2,154,828

3,113,544

2,445,291

Finance leases payable

-

-

2,592,002

2,224,679

Other leases payable

-

-

75,999

56,837

Provision for aircraft return

-

-

437,480

361,651

Contingency provision

-

-

6

227

Related parties

186,826

151,408

-

-

Total liabilities

2,773,325

2,306,236

6,339,820

5,158,418

Exchange exposure in R$

2,245,813

1,848,334

4,477,119

3,569,763

 

 

 

 

Obligations not registered in the statements of financial position

 

 

 

 

Future obligations resulting from operating leases

-

-

5,952,608

4,794,810

Future obligations resulting from firm aircraft orders

47,372,825

39,441,845

47,372,825

39,441,845

Total

47,372,825

39,441,845

53,325,433

44,236,655

 

 

 

 

Total exchange exposure R$

49,618,638

41,290,179

57,802,552

47,806,418

Total exchange exposure US$

15,467,156

15,544,831

18,018,252

17,998,049

Exchange rate (R$/US$)

3.2080

2,6562

3.2080

2.6562

 

c)    Interest rate risk

 

The Company and its subsidiaries are exposed to fluctuations in domestic and foreign interest rates, substantially the CDI and Libor, respectively. The highest exposure is related to lease transactions, of which the installments to be paid are indexed to the Libor after date that the aircraft are delivered. Another relevant exposure is the local investments and debts indexed to the CDI rate.

 

To mitigate the interest rate risk the Company holds swap derivatives.

 

d)    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.

 

 

66


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

The trade receivable 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 risks, 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.

 

e)    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 agreed dates.

 

As a way of managing the liquidity risk, the Company invests its funds in liquid assets (governmental bonds, CDBs, and investment funds with daily liquidity), and the Cash Management Policy establishes that the Company’s and its subsidiaries’ weighted average debt maturity should be higher than the weighted average maturity of the investment portfolio. As of March 31, 2015, the weighted average maturity of the Company’s financial assets was 58 days and of financial debt, excluding perpetual bonds, was 4 years.

 

The schedule of financial liability hold by the Company is shown bellow:

 

As of March 31, 2015

Immediate

Less than 6 months

6 a 12 months

1 a 5

years

Up to

5 years

Total

Short and long-term debt

-

105,128

873,411

1,552,101

4,593,843

7,124,483

Suppliers

55,084

565,305

57,584

7

-

677,980

Salaries, wages and benefits

123,818

17,300

149,705

13

-

290,836

Taxes payable

-

140,081

-

36,811

-

176,892

Taxes and landing fees

-

300,159

-

-

-

300,159

Liabilities from derivative transactions

-

131,760

-

-

-

131,760

Provisions

-

224,444

25,066

206,865

114,427

570,802

Other liabilities

26,312

62,538

54,723

55,111

36,741

235,425

 

205,214

1,546,715

1,160,489

1,850,908

4,745,011

9,508,337

              

 

67


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

f)     Capital management

 

The table below shows the financial leverage rate as of March 31, 2015 and December 31, 2014:

 

Consolidated

03/31/2015

12/31/2014

(Deficit) stockholder’s equity (b)

(1,037,489)

(332,974)

Cash and cash equivalents

(1,956,292)

(1,898,773)

Restricted cash

(399,002)

(331,550)

Short-term investments

(40,513)

(296,824)

Short- and long-term debts

7,124,483

6,235,239

Net debt (a)

4,728,676

3,708,092

Leverage ratio (a)/(b)

456%

1,114%

 

The Company remains committed to maintaining high liquidity and an amortization profile without pressure on the short-term refinancing.

 

Derivative financial instruments

 

The derivative financial instruments were recognized in the following statements of financial position line items:

 

Movement of assets and liabilities

 

 

Fuel

 

Foreign currency

 

Interest rate

 

 

Total

 

 

 

 

Asset (liability) as of December 31, 2014

19

15,134

(81,673)

(66,520)

Fair value variations:

 

 

 

 

Net losses recognized in profit or loss

(19)

72,776

(1)

72,756

Losses recognized in

other comprehensive income

(1,437)

-

(66,902)

(68,339)

Payments (cash receipts) during the period

1,636

(35,799)

16,816

(17,347)

Asset (liability) as of March 31, 2015 (*)

199

52,111

(131,760)

(79,450)

 

Movement of other comprehensive results

 

 

Fuel

 

Foreign

currency

 

Interest rate

 

 

Total

 

 

 

 

Balance as of December 31, 2014

168

-

(138,881)

(138,713)

Fair value adjustments during the period

(1,437)

-

(66,902)

(68,339)

Reversal, net to profit or loss (b)

(255)

-

8,226

7,971

Tax effect

576

-

19,949

20,525

Balance as of March 31, 2015

(948)

-

(177,608)

(178,556)

 

 

 

 

Effects on result (a+b)

236

72,776

(8,227)

64,785

 

 

 

 

Operational income

-

-

(3,245)

(3,245)

Financial income (expense)

236

72,776

(4,982)

68,030

 

(*)  Classified as "Rights with derivative operations" if the amount results in an asset or "Obligation with derivative operations" if the amount results in a liability. Includes R$15,840 of assets related to hedges held in an exclusive fund.

 

 

68


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

The Company adopts the hedge accounting. The derivatives contracted to hedge interest rate risk and fuel price risk are classified as "cash flow hedge", according to the parameters described in CPC 38.

 

Classification of derivatives financial instruments

 

i)     Cash flow hedges

 

The Company and its subsidiaries use cash flow hedges to hedge against future revenue or expense fluctuations resulting from changes in the exchange rates, interest rates or fuel price, and accounts for actual fluctuations of the fair value of derivative financial instruments in stockholders’ equity until the hedged revenue or expense is recognized.

 

The Company estimates the effectiveness based on statistical correlation methods and the ratio between gains and losses on the financial instruments used as hedge, and the cost and expense fluctuation of the hedged items.

 

The instruments are considered as effective when the fluctuation in the value of derivatives offsets between 80% and 125% the impact of the price fluctuation on the cost or expense of the hedged item.

 

The balance of the actual fluctuations in the fair values of the derivatives designated as cash flow hedges is transferred from stockholders’ equity to profit or loss for the period in which the hedged costs or expenses impacts profit or loss. Gains or losses on effective cash flow hedges are recorded in balancing accounts of the hedged expenses, by reducing or increasing the operating cost, and the ineffective gains or losses are recognized as financial income or financial expenses for the period.

 

ii)     Derivative financial instruments not designated as hedge

 

The Company holds derivative financial instruments that are not formally designated for hedge accounting. This occurs when transactions are in the short term and the control and disclosure complexity.

 

Hedge activities

 

a)      Fuel hedge

 

Due to the low liquidity of jet fuel derivatives traded in commodities exchanges, the Company and its subsidiaries contracts crude oil derivatives (WTI, Brent) and its byproducts (Heating Oil) to hedge against fluctuations in jet fuel prices. Historically, oil prices are highly correlated with aircraft fuel prices.

 

As of March 31, 2015, the Company and its subsidiaries do not hold fuel contracts designated as cash flow hedge accounting.

 

 

69


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

The gains and losses from the derivative contracts for the years ended March 31, 2015 and December 31, 2014 are summarized below:

 

Closing balance on

03/31/2015

12/31/2014

Fair value at end of the period (R$)

199

-

Gains with hedge effectiveness recognized in stockholders’ equity, net of taxes (R$)

(948)

168

 

Period ended on

03/31/2015

12/31/2014

Hedge result recognized in financial revenue (expenses) (R$)

241

(189,078)

Total gains (losses) (R$)

241

(189,078)

 

As of March 31, 2015, the Company and its subsidiaries do not hold derivatives non-designated as oil hedge accounting (cash flow).

 

Closing balance on

03/31/2015

12/31/2014

Fair value at the end of the period (R$)

-

19

Losses recognized in financial expense (R$)

(5)

(181,118)

 

Closing balance on

03/31/2015

12/31/2014

Volume hedged for future periods (Thousand barrels)

256

651

Volume engaged for future periods (Thousand barrels)

333

945

 

 

2Q15

3Q15

4Q15

1Q16

Total 12M

Percentage of fuel exposure hedged

11%

0%

0%

0%

3%

Amount agreed in barrels (thousands barrels)

333

-

-

-

333

Future rate agreed per barrel (US$) (*)

89.46

-

-

-

89.46

Total in Brazilian Reais (**)

95,663

-

-

-

95,663

 

(*)    Weighted average between call strikes.

(**)  The exchange rate: R$3.2080/US$1.00.

 

b)      Foreign exchange hedge

 

As of March 31, 2015, the Company and its subsidiaries have future derivative contracts for the U.S. Dollar for foreign exchange cash flow protection, not designated as hedge accounting. The losses and gains of the derivatives, for the periods ended on March 31, 2015 and December 31, 2014, are presented below:

 

 

03/31/2015

12/31/2014

Fair value at the end of period (R$)

52,111

15,134

Volume hedged for future periods (US$)

96,000

107,000

 

Period ended on

03/31/2015

12/31/2014

Gains (losses) recognized in financial revenue (expense) (R$)

72,776

(24,722)

 

 

70


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

 

2Q15

3Q15

4Q15

Total 12M

Percentage of cash flow exposure

20%

0%

0%

5%

Notional amount (US$)

96,000

-

-

96,000

Future rate agreed (R$)

2.6804

-

-

2.6804

Total in Brazilian Reais

257,318

-

-

257,318

 

c)      Interest rate hedges

 

As of March 31, 2015, the Company and its subsidiaries have swap derivatives designated as cash flow hedge for Libor interest rate. The summary of interest rate derivatives designated as Libor cash flow hedges is shown below:

 

Closing balance at

03/31/2015

12/31/2014

Fair value at the end of the period (R$)

(131,760)

(81,673)

Nominal value at the end of the period (US$)

594,714

591,150

Hedge losses recognized in stockholders’ equity, net of taxes (R$)

(117,608)

(138,881)

 

 

 

 

Period ended on

03/31/2015

12/31/2014

Losses recognized in financial expense (R$)

(4,685)

(48,412)

Losses recognized as operational costs (R$)

(3,245)

(13,093)

Total losses

(7,930)

(61,505)

 

As of March 31, 2015 the Company’s position in Libor interest derivative agreements not designated for hedge accounting is as follows:

 

 

 

Period ended on

03/31/2015

12/31/2014

Losses recognized in financial expense (R$)

(297)

-

 

Sensitivity analysis of derivative 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 operated by the Company, considering three scenarios considered in the risk variable: most likely scenario, the assessment of the Company; deterioration of 25% (possible adverse scenario) in the risk variable, deterioration 50% (remote adverse scenario).

 

The estimates presented, since they are based on simple statistics, do not necessarily reflect the amounts to be reported in the next 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 for market risks and financial instruments considered relevant by management, open position as of March 31, 2015 and based on the scenarios described above.

 

The probable scenario of the Company is the maintaining of the market rates.

 

In the tables, positive values are displayed as asset exposures (assets higher than liabilities) and negative values are exposed liabilities (liabilities higher than assets).

 

71


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

Individual

 

i)     Foreign exchange risk

 

As of March 31, 2015, the Company has a currency exposure of R$2,245,813 (see Note 31b). On this date, the exchange rate adopted was R$3.2080/US$, corresponding to the closing rate of the month published by Banco Central do Brasil 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

Likely

Possible adverse

scenario

Remote adverse

scenario

scenario

+ 25%

+ 50%

Liabilities, net

Dollar Appreciation

(2,245,813)

-

(561,453)*

(1,122,907)*

 

 

 

 

 

 

 

 

Dollar

3.2080

4.0100

4.8120

 

(*)     Negative amounts correspond to net losses in case of exchange variation.

           

Consolidated

 

i)     Fuel risk factor

 

As of March 31, 2015, the Company holds oil derivative contracts amounting 333 thousand barrels maturiting on June, 2015. The likely scenario is the market curve for the Heating Oil, which amounted as of March 31, 2015, US$72.13/bbl.

 

Risk

Exposed

amount

Adverse Scenario Remote

Possible Adverse Scenario

-50%

-25%

Decrease on the market prices

199

(199)

(199)

 

 

 

 

 

Heating Oil

36.06

54.10

 

ii)     Foreign exchange risk factor

 

As of March 31, 2015, the Company holds Dollar derivative contracts with a notional value of US$96,000 with maturity until May, 2015, and a net exchange exposure liability of R$4,477,119 (see Note 31b). At the current date, the Company adopted the closing exchange rate of R$3.2080/US$ as a likely scenario, and the impact of the change of 25% and 50% over the current rate, is shown below:

 

 

Instruments

Exposed

amount

-50%

-25%

+ 25%

+50%

R$1.6040/USD

R$2.4060/USD

R$4.0100/USD

R$4.8120/USD

Liabilities, net

(4,477,119)*

2,238,560

1,119,280

(1,119,280)*

(2,238,560)*

Derivative

52,111

(153,444)*

(76,722)*

76,723

153,445

 

(4,425,008)

2,085,116

1,042,558

(1,042,557)

(2,085,115)*

 

(*)  Negative values correspond to net losses expected in the case of U.S. Dollar appreciation.

 

72


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

III)   Interest risk factor

 

As of March 31, 2015, the Company holds financial investments and 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, 2015 (see Note 18), arising from fluctuations in interest rates according to the scenarios presented below:

 

 

 

 

Instruments

 

 

 

Risk

 

 

Exposed

amount

Probable

Scenario

Possible Adverse Scenario

Adverse Scenario Remote

25%

50%

Financial investments -

Short and Long-term debt, net (*)

Increase in the CDI rate

(207,788)

-

(21,509)

(43,018)

Derivative

Decrease in the Libor rate

(130,058)

-

(85,010)

(167,509)

 

(*) Refers to the sum of the values invested and raised in the market and indexed to CDI, the negative amounts means more debt than application.

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:

 

a)      Level 1: Fair value measurements are calculated based on quoted prices (without adjustment) in active market or identical liabilities;

 

b)      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

 

c)      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, 2015 and December 31, 2014:

 

 

73


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

March 31, 2015

(In thousands of Brazilian Reais - R$, except when indicated otherwise)

 

 

 

03/31/2015

12/31/2014

 

 

Financial instrument

 

Book value

03/31/2015

Other significant observable factors (level 2)

 

Book value

12/31/2014

Other significant observable factors (level 2)

Cash and cash equivalents

1,956,292

1,956,292

1,898,773

1,898,773

Short-term investments

40,513

40,513

296,824

296,824

Restricted cash

399,002

399,002

331,550

331,550

Rights on derivative transactions

52,310

52,310

18,846

18,846

Liabilities from derivative transactions

(131,760)

(131,760)

(85,366)

(85,366)

 

32.  Non-cash transactions

 

Consolidated

 

As of March 31, 2015, the Company increased its property, plant and equipment in the amount of R$25,303, related to an increase of the provision for aircraft return.

 

As of March 31, 2015, the Company increased its losses recorded in “other comprehensive income” in the amount of R$39.843 related to cash flow hedge.

 

33.  Insurance

 

As of March 31, 2015, 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

15,477,705

4,824,721

Civil liability per event/aircraft (*)

2,406,000

750,000

Inventories (*)

449,120

140,000

 

(*) 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 beginning September 10, 2001, limited to the amount in Brazilian Reais equivalent to one billion in U.S. Dollars.

 

 

74


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 14, 2015
 
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.