Professional Documents
Culture Documents
Quarterly Information at September 30, 2013 and Report on Review of Quarterly Information
(A free translation of the original report in Portuguese as published in Brazil containing financial statements prepared in accordance with accounting practices adopted in Brazil)
Contents
Company Information Capital Composition Dividends Approved and/or Paid During and After the Quarter Parent Company Financial Statements Balance Sheet - Assets Balance Sheet - Liabilities and Equity Statement of Income Statement of Comprehensive Income Statement of Cash Flows Statement of Changes in Equity 1/1/2013 to 9/30/2013 1/1/2012 to 9/30/2012 Statement of Value Added Consolidated Financial Statements Balance Sheet - Assets Balance Sheet - Liabilities and Equity Statement of Income Statement of Comprehensive Income Statement of Cash Flows Statement of Changes in Equity 1/1/2013 to 9/30/2013 1/1/2012 to 9/30/2012 Statement of Value Added Management Report / Comments on Company Performance Notes to the Quarterly Information Other Information Considered Relevant by the Company Reports Report on Special Review - Without Exceptions 93 18 19 20 21 32 91 13 14 15 16 17 10 11 12 5 6 7 8 9 3 4
0 1,965,074 1,965,074
Company Information / Dividends Approved and/or Paid During and After the Quarter
Event Board of Directors' Meeting Board of Directors' Meeting Board of Directors' Meeting Board of Directors' Meeting Date approved Amount 2/21/2013 2/21/2013 2/21/2013 2/21/2013 Interest on capital Interest on capital Interest on capital Interest on capital Date of payment 9/30/2013 9/30/2013 12/30/2013 12/30/2013 Type of share Common Preferred Common Preferred Class of share Amount per share (Reais / Share) 0.0175 0.0175 0.0175 0.0175
Parent Company Financial Statements / Balance Sheet - Liabilities and Equity (Thousands of Reais)
1 Account Code 2 Account Description 2 2.01 2.01.01 2.01.01.02 2.01.02 2.01.02.01 2.01.02.02 2.01.03 2.01.03.01 2.01.03.01.01 2.01.03.02 2.01.03.03 2.01.04 2.01.04.01 2.01.04.01.01 2.01.04.01.02 2.01.05 2.01.05.02 2.01.05.02.01 2.01.05.02.02 2.01.05.02.04 2.01.05.02.05 2.01.05.02.06 2.01.05.02.07 2.02 2.02.01 2.02.01.01 2.02.01.01.01 2.02.01.01.02 2.02.04 2.02.04.01 2.02.04.01.01 2.02.04.01.02 2.02.04.01.03 2.03 2.03.01 2.03.02 2.03.02.04 2.03.04 2.03.04.01 2.03.04.02 2.03.04.08 2.03.04.09 2.03.05 2.03.06 Total liabilities Current liabilities Social and labor obligations Labor obligations Trade payables Domestic Trade payables Foreign Trade payables Tax obligations Federal tax liabilities Income taxes and contribuitions payable State tax liabilities Municipal tax liabilities Loans and Financing Loans and Financing In local currency Foreign currency Other obligations Other Dividends and interest on Shareholders Equity Payable Minimum mandatory dividend payable Advances from customers Representatives on commission D&O profit shares Other current accounts payable Noncurrent liabilities Loans and financing Loans and financing In local currency Foreign currency Provisions Tax, welfare and civil contingencies Tax provisions Social security and labor provisions Pension plan and retirement benefits for employees provision Shareholders equity Realized capital Capital reserves Goodwil on share issuance Profit reserves Legal reserve Statutory reserve Additional dividend proposed Treasury shares Retained earnings/accumulated losses Equity valuation adjustments Current quarter 9/30/2013 3,118,087 667,097 102,569 102,569 328,558 320,234 8,324 63,338 60,467 60,467 2,662 209 74,292 74,292 44,917 29,375 98,340 98,340 14,502 9,247 23,992 5,769 44,830 1,040,306 963,107 963,107 724,716 238,391 77,199 77,199 6,094 5,089 66,016 1,410,684 1,200,000 593 593 68,748 8,471 66,179 (5,902) 167,824 (26,481) Previous year 12/31/2012 2,387,855 931,664 70,176 70,176 261,069 255,958 5,111 23,400 19,710 19,710 3,617 73 452,445 452,445 384,501 67,944 124,574 124,574 21,620 27,068 26,327 7,570 41,989 156,266 106,606 106,606 106,606 49,660 49,660 4,289 2,314 43,057 1,299,925 700,000 (999) (999) 639,642 48,471 526,179 72,790 (7,798) (38,718)
Revenue from goods sold and services provided Cost of goods and/or services sold Gross profit Operating (expenses) income Sales expenses General and administrative expenses Other operating income Other operating expenses Equity in net income of subsidiaries Net income (loss) from operations Financial Income/loss Financial revenue Financial expenses Profit before income tax and social contribution Income taxes and social contribution Current Deferred charges Net income from continued operations Net income/loss for the period Earnings per share - (reais/share) Basic earnings per share Common Preferred Diluted earnings per share Common Preferred
Net income for the period Other comprehensive income/loss Exchange variance on foreign investments Actuarial losses over employees benefits Deferred tax income and social contribution over actuarial gains/losses Result of comprehensive income of subsidiaries Comprehensive income for the period
Parent Company Financial Statements / Statement of Cash Flows - Indirect Method (Thousands of Reais)
1 Account Code 6.01 6.01.01 6.01.01.01 6.01.01.02 6.01.01.03 6.01.01.04 6.01.01.05 6.01.01.06 6.01.01.07 6.01.02 6.01.02.01 6.01.02.02 6.01.02.03 6.01.02.04 6.01.02.05 6.01.02.06 6.02 6.02.01 6.02.02 6.02.03 6.02.04 6.02.05 6.03 6.03.01 6.03.02 6.03.03 6.03.04 6.03.05 6.03.06 6.05 6.05.01 6.05.02 2 Account Description Accrued value of the current year 1/1/2013 to 9/30/2013 318,360 224,866 214,808 15,855 362 (80,739) (1,434) 37,771 38,243 93,494 (31,235) (50,806) (45,714) 130,833 67,489 22,927 (309,295) (278,570) 11,556 (40,878) (1,583) 180 321,496 902,041 (433,841) (28,096) (122,096) 3,488 330,561 233,119 563,680 Accrued value of the prior year 1/1/2012 to 9/30/2012 61,260 216,868 207,094 16,501 8,995 (80,729) 6,555 49,780 8,672 (155,608) (59,545) (31,051) (57,314) (13,716) 36,718 (30,700) (74,165) (54,752) 17,607 (36,197) (1,849) 1,026 (500,366) (1,530) 24,850 (360,758) (15,027) (153,167) 5,266 (513,271) 739,949 226,678
Cash flows from operating activities Cash flows from operating activities Net income for the year Depreciation and amortization Earnings on disposal of investments, property, plant and equipment and intangible assets Equity in net income of subsidiaries Allowance for doubtful accounts Current and deferred income tax and social contribution Interest and exchange variance appropriated Changes in assets and liabilities (Increase) decrease in trade accounts receivable (Increase) decrease in inventories (Increase) decrease in other accounts receivable (Increase) decrease in assets stated at fai value Increase (decrease) in trade payables Increase (decrease) in actuarial benefits Cash flow from investment activities Investments Dividends from subsidiaries, jointly-controlled entities and associates Purchases of property, plant and equipment Purchases of intangible assets Receipt on sale of property, plant and equipment Cash flow from financing activities Loans from related parties Loans secured from unrelated parties Payment of loans principal Payment of loans interest Payment of interest in shareholders equity and dividends Treasury shares Increase (decrease) in cash and cash equivalents Opening balance of cash and cash equivalents Closing balance of cash and cash equivalents
Parent Company Financial Statements /Statement of Changes in Equity - 1/1/2013 to 9/30/2013 (Thousands of Reais)
1 Account 2 Account Description Code 5.01 5.03 5.04 5.04.01 5.04.05 5.04.07 5.05 5.05.01 5.05.02 5.05.02.04 5.07 Opening balances Adjusted opening balances Capital transactions with partners Capital Increase Treasury stock sold Interest in shareholders equity Total comprehensive income/loss Net income for the period Other comprehensive income/loss Translation adjustments in the period Closing balances Paid-up share capital 700,000 700,000 500,000 500,000 1,200,000 Capital reserves, options awarded and treasury shares (8,797) (8,797) 3,488 3,488 (5,309) Profit Retained earnings / reserves accumulated losses 647,440 647,440 (572,790) (500,000) (72,790) 74,650 (46,984) (46,984) 214,808 214,808 167,824 Other comprehensive income / loss (38,718) (38,718) 12,237 12,237 12,237 (26,481) Shareholders equity 1,299,925 1,299,925 (116,286) 3,488 (119,774) 227,045 214,808 12,237 12,237 1,410,684
10
Parent Company Financial Statements /Statement of Changes in Equity - 1/1/2012 to 9/30/2012 (Thousands of Reais)
1 Account Code 5.01 5.03 5.04 5.04.05 5.04.07 5.05 5.05.01 5.05.02 5.05.02.04 5.07 2 Account Description Paid-up share capital 700,000 700,000 700,000 Capital reserves, options awarded and treasury shares (14,063) (14,063) 5,266 5,266 (8,797) Profit Retained earnings / reserves accumulated losses 506,556 506,556 (84,805) (84,805) 421,751 (30,986) (30,986) 207,094 207,094 176,108 Other comprehensive income / loss (26,305) (26,305) 17,185 17,185 17,185 (9,120) Shareholders equity 1,166,188 1,166,188 (110,525) 5,266 (115,791) 224,279 207,094 17,185 17,185 1,279,942
Opening balances Adjusted opening balances Capital transactions with partners Treasury stock sold Interest in shareholders equity Total comprehensive income/loss Net income for the period Other comprehensive income/loss Translation adjustments in the period Adjusted opening balances
11
Revenue Sales of goods, products and services Other revenue Allowance/(reversal of allowance) for doubtful accounts Consumables acquired from third parties Cost of goods and services sold Materials, energy, outsourced services and other Loss/recovery of assets Gross value added Retentions Depreciation, amortization and depletion Net added value produced Transferred added value Equity in net income of subsidiaries Financial revenue Total added value to be distributed Distribution of added value Personnel Direct remuneration Benefits Government Severance Indemnity Fund for Employees (FGTS) Taxes, duties and contributions Federal State Municipal Interest expenses Interest Rent Interest earnings Interest on shareholders equity Retained earnings / loss for the period
12
13
Consolidated Financial Statements / Balance Sheet - Liabilities and Equity (Thousands of Reais)
1 Account Code 2 2.01 2.01.01 2.01.01.01 2.01.02 2.01.02.01 2.01.02.02 2.01.03 2.01.03.01 2.01.03.01.01 2.01.03.02 2.01.03.03 2.01.04 2.01.04.01 2.01.04.01.01 2.01.04.01.02 2.01.05 2.01.05.02 2.01.05.02.01 2.01.05.02.02 2.01.05.02.04 2.01.05.02.05 2.01.05.02.06 2.01.05.02.07 2.02 2.02.01 2.02.01.01 2.02.01.01.01 2.02.01.01.02 2.02.02 2.02.02.02 2.02.02.02.03 2.02.04 2.02.04.01 2.02.04.01.01 2.02.04.01.02 2.02.04.01.03 2.03 2.03.01 2.03.02 2.03.02.04 2.03.04 2.03.04.01 2.03.04.02 2.03.04.09 2.03.05 2.03.06 2.03.09 2 Account Description Total liabilities and equity Current liabilities Social and labor obligations Payroll obrigations Trade payables Domestic trade payables Foreign trade payables Tax obligations Federal tax liabilities Income taxes and contributions payable State tax liabilities Municipal tax liabilities Loans and financing Loans and financing In local currency Foreign currency Other obligations Other Dividends and interest on equity payable Minimum mandatory dividend payable Advances from customers Representatives on commission D&O profit shares Other current accounts payable Noncurrent liabilities Loans and financing Loans and financing In local currency Foreign currency Other obligations Other Obligations to purchase equity interests Provisions Tax, welfare and civil contingencies Tax provisions Social security and labor provisions Pension plan and retirement benefits for employees provision Consolidated shareholders equity Realized capital Capital reserves Options awarded Profit reserves Legal reserve Statutory reserve Treasury stock Retained earnings/accumulated losses Equity valuation adjustments Non-controlling interests Current quarter 9/30/2013 4,212,545 1,201,210 138,145 138,145 420,926 330,909 90,017 111,237 104,945 104,945 5,887 405 392,206 392,206 262,303 129,903 138,696 138,696 14,502 22,395 28,655 5,769 67,375 1,584,795 1,440,437 1,440,437 1,202,022 238,415 56,148 56,148 56,148 88,210 88,210 14,072 7,630 66,508 1,426,540 1,200,000 593 593 68,748 8,471 66,179 (5,902) 167,824 (26,481) 15,856 Previous year 12/31/2012 3,329,423 1,373,885 94,328 94,328 333,431 268,069 65,362 54,678 45,624 45,624 8,949 105 722,715 722,715 579,398 143,317 168,733 168,733 21,620 29,928 30,487 7,570 79,128 643,094 527,997 527,997 527,967 30 55,380 55,380 55,380 59,717 59,717 11,846 4,503 43,368 1,312,444 700,000 (999) (999) 639,642 48,471 598,969 (7,798) (38,718) 12,519
14
Revenue from goods sold and services provided Cost of goods and/or services sold Gross profit Operating (expenses) income Sales expenses General and administrative expenses Other operating expenses Equity in net income of subsidiaries Net income (loss) from operations Financial Income/loss Financial revenue Financial expenses Profit before income tax and social contribution Income taxes and social contribution Current Deferred charges Net income from continued operations Consolidated net income/loss for the period Attributed to partners of the parent Company Attributed to non-controlling interests Earnings per share (Reais / Share) Basic earnings per share Common Preferred Diluted earnings per share Common Preferred
15
Consolidated net income for the period Other comprehensive income/loss Exchange variance on foreign investments Actuarial losses over employees benefits Deferred tax income and social contribution over actuarial gains/losses Consolidated comprehensive income for the period Attributed to partners of the parent Company Attributed to non-controlling interests
16
Consolidated Financial Statements / Statement of Cash Flows - Indirect Method (Thousands of Reais)
1 Account Code 6.01 6.01.01 6.01.01.01 6.01.01.02 6.01.01.03 6.01.01.04 6.01.01.05 6.01.01.06 6.01.01.07 6.01.01.08 6.01.02 6.01.02.01 6.01.02.02 6.01.02.03 6.01.02.04 6.01.02.05 6.01.02.06 6.02 6.02.01 6.02.02 6.02.03 6.02.04 6.02.05 6.03 6.03.02 6.03.03 6.03.04 6.03.05 6.03.06 6.04 6.05 6.05.01 6.05.02 2 Account Description Accrued value of the current year 1/1/2013 to 9/30/2013 271,706 371,719 216,726 28,336 5,092 (19,000) 1,348 76,669 60,630 1,918 (100,013) (127,131) (108,896) (78,767) 116,294 86,537 11,950 (284,280) (172,025) 15,073 (58,419) (69,389) 480 396,369 1,255,262 (684,826) (49,021) (128,534) 3,488 2,616 386,411 374,219 760,630 Accrued value of the prior year 1/1/2012 to 9/30/2012 110,277 334,843 208,221 27,272 154 (26,032) 6,017 83,161 35,087 963 (224,566) (94,022) (75,095) (110,887) (16,355) 48,348 23,445 (174,889) 17,607 (62,404) (131,120) 1,028 (462,603) 267,902 (538,274) (44,330) (153,167) 5,266 1,246 (525,969) 887,497 361,528
Cash flows from operating activities Cash flows from operating activities Net income for the year Depreciation and amortization Earnings on disposal of investments, property, plant and equipment and intangible assets Equity in net income of subsidiaries Allowance for doubtful accounts Current and deferred income tax and social contribution Interest and exchange variance appropriated Non-controlling interests Changes in assets and liabilities (Increase) decrease in trade accounts receivable (Increase) decrease in inventories (Increase) decrease in other accounts receivable (Increase) decrease in assets stated at fai value Increase (decrease) in trade payables Increase (decrease) in actuarial benefits Cash flow from investment activities Investments Dividends from subsidiaries, jointly-controlled entities and associates Purchases of property, plant and equipment Purchases of intangible assets Receipt on sale of property, plant and equipment Cash flow from financing activities Loans secured from unrelated parties Payment of loans principal Payment of loans interest Payment of interest in shareholders equity and dividends Treasury shares Foreign exchange gains/(losses) on cash equivalents Increase (decrease) in cash and cash equivalents Opening balance of cash and cash equivalents Closing balance of cash and cash equivalents
17
Consolidated Financial Statements /Statement of Changes in Equity - 1/1/2013 to 9/30/2013 (Thousands of Reais)
1 Account Code 5.01 5.03 5.04 5.04.01 5.04.05 5.04.07 5.05 5.05.01 5.05.02 5.05.02.04 5.05.02.06 5.07 2 Account Description Paid-up share capital Capital reserves, options awarded and treasury shares (8,797) (8,797) 3,488 3,488 (5,309) Profit reserves Retained earnings / accumulated losses (46,984) (46,984) 214,808 214,808 167,824 Other Shareholders comprehensive equity income / loss (38,718) (38,718) 12,237 12,237 12,237 (26,481) 1,299,925 1,299,925 (116,286) 3,488 (119,774) 227,045 214,808 12,237 12,237 1,410,684 Noncontrolling interests 12,519 12,519 3,337 1,918 1,419 1,209 210 15,856 Consolidated Shareholders equity 1,312,444 1,312,444 (116,286) 3,488 (119,774) 230,382 216,726 13,656 13,446 210 1,426,540
Opening balances Adjusted opening balances Capital transactions with partners Capital Increase Treasury stock sold Interest in shareholders equity Total comprehensive income Net income for the period Other comprehensive income/loss Translation adjustments in the period Non-controlling interests Closing balances
18
Consolidated Financial Statements / Statement of Changes in Equity - 1/1/2012 to 9/30/2012 (Thousands of Reais)
1 Account Code 5.01 5.03 5.04 5.04.05 5.04.07 5.05 5.05.01 5.05.02 5.05.02.04 5.07
2 Account Description
Capital reserves, options awarded and treasury shares (14,063) (14,063) 5,266 5,266 (8,797)
Profit reserves
Opening balances Adjusted opening balances Capital transactions with partners Treasury stock sold Interest in shareholders equity Total comprehensive income Net income for the period Other comprehensive income/loss Translation adjustments in the period Closing balances
Other Shareholders comprehensive equity income / loss (26,305) (26,305) 17,185 17,185 17,185 (9,120) 1,162,144 1,162,144 (110,525) 5,266 (115,791) 224,443 207,258 17,185 17,185 1,276,062
Consolidated Shareholders equity 1,171,492 1,171,492 (110,525) 5,266 (115,791) 226,188 208,221 17,967 17,967 1,287,155
19
20
MARCOPOLO S.A.
Consolidated Information - 3Q13
Caxias do Sul - November 04, 2013 - Marcopolo S.A. (BM&FBOVESPA: POMO3; POMO4), hereby announces its earnings figures for the third quarter of 2013 (3Q13) and accumulated (9M13). The financial statements are presented in accordance with accounting practices adopted in Brazil and with IFRS - International Financial Reporting Standards issued by the IASB - International Accounting Standards Board.
Selected information with adoption of IFRS 10 and 11 (CPC 36 R3 and CPC 19 R2)
MARCOPOLO IR
Carlos Zignani IR Director +55 (54) 2101.4115
SELECTED INFORMATION Net operating revenue - Revenue in Brazil - Revenues from exports and abroad Gross Profit EBITDA (1) Net Income Earnings per Share Return on Invested Capital (ROIC) (2) Return on shareholders' equity (ROE) (3) Investments Gross Margin EBITDA Margin EBITDA Margin (previous accounting standards) Net Margin DADOS DO BALANO PATRIMONIAL Shareholders Equity Cash and cash equivalents and short-term investments Current financial liabilities Noncurrent financial liabilities Net financial liability (asset) - Industrial Segment
3Q13 975.8 696.7 279.1 206.2 127.7 86.9 0.097 17.5% 24.4% 12.0 21.1% 13.1% 12.3% 8.9%
9/30/13
3Q12 840.8 534.8 306.0 169.1 99.5 69.2 0.077 17.9% 29.9% 10.2 20.1% 11.8% 11.1% 8.2%
6/30/13
Var. % 16.1 30.3 (8.8) 21.9 28.3 25.6 26.0 (0.4)pp (5.5)pp 17.6 1.0pp 1.3pp 1.2pp 0.7pp Var. % 6.6 1.5 (3.0) 4.2 0.5
9M13 2,737.1 2,009.4 727.7 538.0 323.9 216.7 0.242 17.5% 24.4% 284.3 19.7% 11.8% 11.2% 7.9%
9M12 2,399.8 1,628.7 771.1 481.2 289.7 208.2 0.232 17.9% 29.9% 174.9 20.1% 12.1% 11.2% 8.7%
Var. % 14.1 23.4 (5.6) 11.8 11.8 4.1 4.3 (0.4)pp (5.5)pp 62.6 (0.4)pp (0.3)pp (0.8)pp
Notes: (1) EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization; (2) ROIC (Return on Invested Capital) = EBIT of the last 12 months (inventories + trade receivables + property, plant and equipment + intangible assets - trade payables); (3) ROE (Return on Equity) = Net Income for the last 12 months/Initial Shareholders' Equity; pp = percentage points
21
BRAZILIAN BUS INDUSTRY PERFORMANCE In 3Q13 Brazilian production of buses amounted to 9,255 units, an increase of 12.1% in relation to the third quarter of 2012. In 9M13 production reached 25,510 units, 2.9% more than the production of the same period last year. a) Domestic Sales. 8,163 units were produced for the domestic market in 3Q13, 22.6% above the 6,656 units produced in 3Q12, and 22,669 units in 9M13, representing 88.2% and 88.9% of Brazil's total production, respectively. b) Foreign Sales. Exports totaled 1.092 units in 3Q13, 31.7% less than the 1,598 units exported in the third quarter last year. In 9M13 exports totaled 2,841 units, 13.6% less than the 3,290 units exported in 9M12.
(1)
DM
2,164 4,550 1,449 8,163
OM
(2)
(1)
DM
6,188 13,265 3,216 22,669
OM
(2)
OM
(2)
Sources: FABUS (National Association of Bus Manufacturers) and SIMEFRE (Interstate Syndicate of the Industrial of Rail and Road Materials and Equipment). Notes:
(1)
DM = Domestic Market; OM = Overseas Market; (2) Includes units exported as KD (Knockdown) buses does not include the production of entire units such as Volare.
(3)
5,543 units were recorded in net revenue in 3Q13. Of this volume, 5,061 units were registered in Brazil representing 91.3% of the total, and 482 units abroad representing the remaining 8.7%, as shown in the table below:
22
OPERATIONS BRAZIL: - Domestic Sales - Overseas Sales SUBTOTAL Exclusion of exported KDs TOTAL IN BRAZIL INTERNATIONAL: - South Africa - Australia - Mexico TOTAL INTERNATIONAL OVERALL TOTAL
Notes:
(1)
3Q13
3Q12
Var. %
9M13
9M12
Var. %
10,974 2,028 13,002 115 12,887 208 339 1,022 1,569 14,456
Production
Marcopolo's consolidated production was 5,812 units in 3Q13, 10.5% above the 5,261 units produced in 3Q12. In Brazil production reached 5,365 units in 3Q13, 14.8% more than 3Q12, while overseas production was 447 units, 24.1% less than the production of the same period last year. Marcopolo's consolidated production data and the respective comparison with the previous year are shown in the following table: MARCOPOLO - CONSOLIDATED WORLDWIDE PRODUCTION
OPERATIONS BRAZIL:
(1)
3Q13
3Q12
Var. %
9M13
9M12
Var. %
- Domestic Sales - Foreign Sales SUBTOTAL Exclusion of exported KDs TOTAL IN BRAZIL INTERNATIONAL: - South Africa - Australia - Mexico TOTAL INTERNATIONAL OVERALL TOTAL
Notes:
(1)
10,874 2,068 12,942 118 12,824 182 339 1,022 1,543 14,367
Includes the production of the Volare model as well as the production of the companies Ciferal (1,731 units in 3Q13 and 1,351 units in 3Q12) (2) Bodies partially or completely knocked down;
23
3Q12 TOTAL 1,686 2,232 342 4,260 1,552 5,812 DM 1,183 1,369 106 2,658 1,084 3,742 OM
(1)
OM
(1)
OM
(1)
TOTAL PRODUCTION
Total production of OM includes units exported in KD (bodies partially or completely knocked down), which totaled 22 units in 3Q13 and 87 units in 9M13, 14 in 3Q12 and 118 units in 9M12; (2) The production of Volares is not part of the data from SIMEFRE and from FABUS, Marcopolo's market share or the sector's production.
3Q12 TOTAL 1,677 1,816 342 3,835 1,552 5,387 DM 1,183 1,369 106 2,658 1,084 3,742 OM
(1)
Intercity Urban Micros SUBTOTAL Volares (2) TOTAL PRODUCTION PRODUTOS Intercity Urban Micros SUBTOTAL Volares (2) TOTAL PRODUCTION
(em unidades)
OM
(1)
OM
(1)
The Company's market share in Brazil following was 41.4% in 3Q13 and 40,7% over the first nine months of the year. It is important to note the segment of coach buses, wich market share was 57.7% in 9M13.
24
Net Revenue
The consolidated net revenue reached R$ 975.8 million in 3Q13, up by 16.1% over the R$ 840.8 million recorded in 3Q12, explained by an increase of 9.7% in sales, an improvement in mix (greater Intercity and Volare sales) and due to the devaluation of the Brazilian Real compared the United States dollar, which reflected positively on exports revenue. Domestic sales generated revenue of R$ 696.7 million, or 71.4% of the total, while overseas sales totaled R$ 279.1 million, comprising the remaining 28.6% of the consolidated net revenue. The table and graphs below show the breakdown of the net revenue by products and markets: CONSOLIDATED TOTAL NET REVENUE By Products and Markets (R$ million)
PRODUCTS / MARKETS Intercity Urban Micros Subtotal bodies Volares Chassis Bco. Moneo Bank, Parts & Others OVERALL TOTAL
(2)
(1)
3Q13 DM 265.4 160.1 20.3 445.8 217.7 10.4 22.8 696.7 OM 118.6 120.4 11.4 250.4 3.9 6.5 18.3 279.1 DM
3Q12 OM 90.2 122.0 9.9 222.1 49.9 9.4 24.6 306.0 3Q13 201.3 120.8 11.9 334.0 150.6 24.9 25.3 534.8
TOTAL 3Q12 291.5 242.8 21.8 556.1 200.5 34.3 49.9 840.8 384.0 280.5 31.7 696.2 221.6 16.9 41.1 975.8
PRODUCTS / MARKETS Intercity Urban Micros Subtotal bodies Volares Chassis Bco. Moneo Bank, Parts & Others OVERALL TOTAL
(2)
(1)
9M12 OM 257.3 312.4 31.1 600.8 20.3 21.6 85.0 727.7 DM 612.6 415.8 43.0 1.071.4 425.6 59.3 72.4 1.628.7 OM 216.9 348.3 32.4 597.6 62.4 38.3 72.8 771.1 9M13
TOTAL 9M12 829.5 764.1 75.4 1.669.0 488.0 97.6 145.2 2.399.8 967.7 756.1 89.2 1.813.0 667.5 106.8 149.8 2.737.1
25
3Q13
3Q12
9M13
9M12
GROSS PROFIT AND MARGINS Consolidated gross profit in 3Q13 reached R$ 206.2 million, with margin of 21.1%, compared with R$ 169.1 million in 3Q12, with a margin of 20.1%. This increase is explained by an improvement in the export margin due to the devaluation of the Brazilian Real against the United States dollar, an improvement in sales mix, greater Volare revenue and lower income in sales of chassis.
26
OPERATING EXPENSES
Selling Expenses
Selling expenses totaled R$ 47.5 million in 3Q13 comparing to R$ 46.8 million in 3Q12, corresponding to 4.9% and 5.6% of net revenue, respectively. The decrease in these expenses is due to a lower allowance for doubtful accounts and for a higher noncommissioned sales revenue.
The general and administrative expenses totaled R$ 44.4 million in 3Q13, or 4.6% of net revenue, while these expenses in 3Q12 totaled R$ 37.3 million, or 4.4% of revenue. This increase is explained mainly by higher costs with labor caused by the Collective Bargaining Agreement (ACT)
In 3Q13, R$ 6.4 million was recorded as "Other Operating Expenses", due to provisions for tax contingencies and legal fees, compared with expenses of R$ 4.0 million in 3Q12.
27
NET PROFIT The consolidated net income in 3Q13 totaled R$ 86.9 million, with margin of 8.9%, due to higher sales volume, improved margins, more favorable exchange rate and positive financial results. Net income in 3Q12 was R$ 69.2 million with a margin of 8.2%. FINANCIAL DEBT The net financial debt amounted to R$ 1,030.9 million as of 9/30/2013 (R$ 996.4 million as of 6/30/2013). Of this total, R$ 671.3 million came from the financial sector (Banco Moneo) and R$ 359.6 million from the industrial sector. It is important to point out that the financial sector debt derives from the consolidation of the activities of Banco Moneo and should be analyzed separately since it has different characteristics from that of the Company's operating activities. Banco Moneo's financial liability is charged to the account "Trade accounts receivable" in the bank's assets. The credit risk is properly provisioned for. As they relate to FINAME transfers, each disbursement made by the Bank for Economic and Social Development (BNDES) is charged to Banco Moneo's trade accounts receivable, both in term and fixed rate. On September 30, 2013 the net financial liabilities from industrial sector represented 0.8x EBITDA of twelve last months. CASH GENERATION In 3Q13, the amount of R$ 17.3 million were absorbed by the operating activities. Investment activities received R$ 12 million. Financing activities generated R$ 33.7 million, in which R$ 47.6 million correspond to contracting and repayments of loans and R$ 13.9 million consumed in payments of interest in shareholders equity and dividends. As a result, the opening cash balance of R$ 755.4 million, plus R$ 0.8 million of exchange variance on cash, increased to R$ 760.6 million at the end of September 2013. INVESTMENTS IN PERMANENT ASSETS In 3Q13 Marcopolo invested R$ 12.0 million in capital goods, of which R$ 11.3 million was spent by the parent company and invested as follows: R$ 2.2 in machinery and equipment, R$ 2.3 million in buildings and improvements, R$ 5.6 million related to construction im progress and R$ 1.2 million in other fixed assets. In subsidiaries and associated companies, were invested: R$ 6.3 million in Ciferal, R$ 2.2 million in Polomex and R$ 1.0 million on the other plants. The net balance of investments in subsidiaries and associated companies, discounted R$ 8.8 million received as dividends, was R$ 0.7 million. CAPITAL MARKETS Marcopolo's preferred shares - POMO4 - have appreciated by 11.3% in the last 12 months, compared with the 11.6% devaluation of IBOVESPA in the same period. In 3Q13, 125.0 million of Marcopolo shares were traded in a volume of R$ 998.6 million.
28
INDICATORS Number of transactions Shares Traded (million) Trading volume (R$ million) Market Value (R$ millions) Existing shares (thousands) Book value per share (R$)
(1) (2) (*)
(*)
Price of the last transaction of the period for a Book Entry Preferred (PE) share multiplied by the total shares (OE+PE) from the same period; (2) Of this total, 1,965,074 were preferred shares in the treasury at 9/30/2013.
R$ 5.93*
R$ 6.60*
59,175 pts
52,338 pts
OUTLOOK The third quarter of 2013 has been presenting itself as the best quarter of the year regarding the bus industry in Brazil. The Brazilian production that is destined to domestic market has grown 22.6% when compared to the third quarter of 2012. The fleeting and tourism segments are still going well, as well as the demand for microbuses, encouraged by the federal government program known as "Caminho da Escola" and also by the large amount of tourists expected during the period of the World Cup to be held in Brazil in 2014. Otherwise, the demand of medium to large distance intercity buses and for urban buses has suffered a decrease starting in October, that has been affecting the results of the fourth quarter. The decrease in the demand for intercity buses is mainly due to bids related to interstate bus routes, that are expected to end on May/2014. The current
29
concessions had already expired in 2008 and they have been postponed since then. Even though the bidding data sheet has already been divulged by the national agency of transportation, the operators are, at first, holding back the renewal of their fleet in account of the uncertainties related to the continuation of their operations. Regarding urban buses, the retraction in the demand is happening due to the freezing and cut in prices of public transportation fares in some of the main Brazilian cities. Federal government has acted in order to diminish the impact in profitability of the transportation industry by cutting off some of the taxes (PIS and COFINS) related to public transportation fares. Still, the current situation is of uncertainties and the urban buses renewal is happening at lower rates. Regarding this less favorable scenario, it is undeniable that the actions in municipal, state and federal governments are intended to improve public transportation in Brazil. Popular manifestations happened in June and July of 2013 were the trigger for new projects of urban mobility and reduction or freezing in public transportation fares. This new system will require a renewed fleet, one that is more sophisticated and that propitiates more comfortable and fast ways of commuting for users, thus stimulating population to use public transportation. With reference to finance, the FINAME PSI-4 of BNDES, currently with an interest rate of 4.0% per year and valid until December, 31 2013, shall be extended by BNDES, according to recent news from the government. This extension, however, will possibly implicate in higher interest rates, which might anticipate orders still in 2013 to be delivered along the first semester of 2014. The beginning of operations of the new plant Volare in So Mateus, Esprito Santo is still expected to happen in the second semester of 2014. In the first phase, it will manufacture the pre existing models in the portfolios of products, which will be sent as knocked down bodies from Caxias do Sul. In external market, the volume of Marcopolo exports from Brazil has increased 11.5% in relation to 2Q13. Besides greater revenue, also the margins are benefitted, specially due to the devaluation of the Brazilian real compared to the US dollar. Regarding subsidiaries and associates companies, the highlight of the quarter was Volgren, in Australia, where production has increased 7.8% when compared to 2Q13 and 43.8% when compared to 3Q13. In regard to strategic investment in New Flyer, Marcopolo has performed two investments that were used in projects that must increase the business revenue. We must also point out the higher volume of deliveries in 9M13, totalizing 1,556 unities, 22.6% higher when compared to the same period in the previous year. There has also been an evolution in orders along the first nine months of 2013, evolving from 6,325 orders in December, 31 2012 to 9,890 orders in September, 30 2013. This year, the NFI
30
shares has increased value in 29.7%, going from C$8.79 in January, 2 to C$11.40 at the end of September.
The Management.
31
Operations
Marcopolo S.A. ("Marcopolo") is a publicly held company, having its registered office in Caxias do Sul, Rio Grande do Sul state. Marcopolo's core activity is the manufacturing and sale of buses, automobiles, wagons, parts, agricultural and industrial machinery, and imports and exports, and may also acquire equity interests in other companies. Marcopolo's stock is traded under the symbols POMO3 and POMO4 on the So Paulo Stock Exchange BM&FBOVESPA.
2.1 a.
The parent company's individual financial information were prepared in accordance with BR GAAP. For the Company these practices differ from the IFRS applicable to the separate financial statements in respect of the valuation of investments in subsidiaries, associated companies and joint ventures, which are valued by the equity method in BR GAAP but at cost or fair value under IFRS. There is, however, no difference between the consolidated shareholders' equity and net income presented by the Company and the shareholders' equity and net income of the Parent Company in its individual financial information. The Company's consolidated financial informatin and parent company's individual financial information are therefore being presented side-by-side in a single set of financial information. Since January 1, 2013, the Company has adopted IFRS 10/CPC 36 (R3) - "Consolidated Financial Statements", IFRS 11/CPC 19 (R2) - "Joint Arrangements" (see note 2.2.1) and IFRS 12/CPC 45 "Disclosure of interests in Other Entities". As determined by the respective IFRS, their effects should be reflected at the beginning of the earliest period presented. Thus, the comparative values presented in this interim financial statements have been adjusted relative to those previously reported.
b.
Reporting basis
The individual and consolidated financial statements have been prepared on the historical cost basis, except for the following material items recognized in the balance sheets: derivative financial instruments are measured at fair value; the non-derivative financial instruments stated at fair value through profit and loss are measured at fair value; and available-for-sale financial assets are measured at their fair value.
32
c.
d.
2.2 a.
i.
Subsidiary
Subsidiaries are all entities (including the specific purpose companies) over which the Company has the power to determine the financial and operating policies, and in which it generally holds over half the voting rights (voting stock). The existence and the effect of possible voting rights currently exercisable or convertible are taken into account when evaluating whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases. The Company use the acquisition method to record business combinations. The amount transferred to acquire a subsidiary is the fair value of the transferred assets, liabilities incurred and equity instruments issued by the Company. The amount transferred includes the fair value of a given asset or liability resulting from a contingent payment contract when applicable. Acquisition costs are expensed in the income statement for the year as and when incurred. The identifiable assets acquired and the liabilities and the contingent liabilities undertaken in a business combination are initially measured at fair value as of the acquisition date. The minority interest to be recognized is measured on the date of each acquisition. Any excess amount transferred and the fair value at the acquisition date of any previous equity interest in the acquired party in relation to the fair value of the Company's interest in net identifiable assets acquired is recorded as goodwill. In acquisitions where the Company attributes fair value to minority shareholders, the goodwill determined also includes the value of any minority interest in the acquired party, and the goodwill is determined based on the Company and the minority interests. If the amount transferred is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement for the year (Note 2.11).
33
Inter-company transactions, balances and unrealized gains on intercompany transactions are eliminated. Unrealized losses are also eliminated, unless the transaction provides evidence of impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company. ii.
iii.
Loss of control
When control is lost, the Company derecognizes the subsidiary's assets and liabilities, any noncontrolling interest and other components recorded under shareholders' equity related to this subsidiary. Any gain or loss generated by the loss of control is recognized in net income. If the Company retained any interest in the former subsidiary, this interest is measured at fair value on the date the control was lost. This interest is subsequently recorded by the equity method in associated companies or at cost or fair value in an available-for-sale asset, depending on the level of influence retained.
iv.
Associated companies
Associated companies are all the entities over which the Company exercises significant influence but does not control, in which it generally holds an equity interest of between 20% and 50% of the voting rights. Investments in associated companies are recorded by the equity income method and recognized initially at cost. The Company's investment in associated companies include the goodwill identified in the acquisition, net of any accumulated impairment loss. See Note 2.11 about impairment of nonfinancial assets, including goodwill. The Company's interest in the profits or losses of its associated companies post-acquisition is recognized in the income statement and its interest in the changes in post-acquisition reserves is recognized in the reserves. Accrued changes post-acquisition are adjusted against the book value of the investment. When the Company's interest in the losses of an associated company is equal to or greater than its interest in that company, including any other receivables, the Company does not recognize additional losses, unless it has incurred on obligations or makes payments on behalf of the associated company. Unrealized gains on transactions between the Company and its associated companies are eliminated in proportion to the Company's interest in the associated companies. Unrealized losses are also eliminated, unless the transaction provides evidence of impairment of the asset transferred. Accounting policies of associated companies have been changed where necessary to ensure consistency with the policies adopted by the Company.
34
If the equity interest in the associated company diminishes but significant influence is maintained, only a proportional part of the amount previously recognized in other comprehensive income shall be reclassified in the income statement, where appropriate. Gains and losses resulting from dilutions occurring in interests in associated companies are recognized in the income statement. 2.2.1 a) Changes regarding first adoption of IFRS 10 and 11 (CPC 36 R3 and CPC 19 R2) IFRS 10/CPC 36 R3 Consolidated Financial Statements Effective since January 1, 2013, IFRS 10/CPC 36 R3 - "Consolidated Financial Statements", have extended the concept of control, taking into account the power and the returns an investor has about an investment. In this context, a scenario of shareholding with voting rights is analyzed together with the substantive rights that give power over the relevant activities of the investee. If a control is recognized, the subsidiary is totally consolidated from the date on which control is transferred to the Company and transactions with non-controlling subsidiaries, such as transactions with owners of the Group assets, are presented within equity as "participation of non-controlling shareholders" The Company did not change its statements after adoption of IFRS 10. b) IFRS 11/CPC 19 R2 Joint Arrangements Effective since January 1, 2013, IFRS 11/CPC 19 R2 - " Joint Arrangements " has evidenced more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, instead of its legal form providing two types of joint arrangements: (i) joint operations - usually occurring when investors have rights to the assets and contractual obligations and they consequently accounts for their parts in the assets, liabilities, revenues and expenses (proportional consolidation) and (ii) joint venture - occurring when investors have rights to the net assets of the arrangement and accounts for the investment by the equity income method. In this case the proportional consolidation is no longer permitted. Based on the new standard aforesaid, the Company conducted an evaluation of their joint operations, reclassifying them to jointly controlled arrangement. So, these joint arrangements are evaluated by the equity income method and no longer evaluated based on the proportional consolidation. Thus, the comparative amounts disclosed for the periods ended December 31, 2012 no longer reflect the proportional consolidation of its joint arrangements composed by companies: San Marino nibus e Implementos Ltda., San Marino Bus de Mxico S.A. de C.V., Rotas do Sul Logstica Ltda., FCO Participaes Indstria e Comrcio de Componentes Ltda., GB Polo Bus Manufacturing S.A.E., Loma Hermosa S.A., Metalpar S.A., Metalsur Carrocerias S.R.L., Marcopolo Argentina S.A., Superpolo S.A., Hanegas S.A.S., Tata Marcopolo Motors Limited. We reflect below effects on the financial statements originally issued by the Company and the financial statements adjusted regarding application of IFRS 11 for comparative purposes: Reconciliation of balance statement as for December 31, 2012.
35
Consolidated 12/31/12 Published Balance Assets Current Cash and cash equivalent Financial assets stated at fair value Derivative financial instruments Credits Inventory Other accounts receivable Adjustment IFRS 11/ CPC 19/R2 Adjusted Balance
Noncurrent Long Term Credit Other accounts receivable Investments Property, plant and equipment Goodwill and intangible
Total assets Liabilities Current Trade payables Loans and financing Derivative financial instruments Other accounts payable
3,512,075
Adjustment IFRS 11/ CPC 19/R2 (356,130) 288,485 (67,645) 18,875 15,735 1,569 19,033 (12,433) (6,494) 11,944 (6,983) 6,983 -
Adjusted Statement 2,399,803 (1,918,616) 481,187 (131,213) (108,836) (4,708) 26,032 262,462 163,682 (134,762) 291,382 (83,161) 208,221
Published Cash flow Cash flow from operating activities Net income in the period Reconciliation of income (loss) to cash provided by operating activities: Depreciation and amortization Cost on the Sales of permanent assets Equity in net income of subsidiaries Allowance for doubtful accounts Deferred income and social contribution taxes Interest and variance appropriated Non-controlling interests Changes in assets and liabilities (Increase) decrease in accounts receivable (Increase) decrease in inventories (Increase) decrease in other accounts receivable (Increase) decrease in securities Increase (decrease) in trade payables Increase (decrease) in actuarial liabilities Cash provided in operating activities Taxes paid over income Net cash provided by operating activities Cash flow from investment activities Investments Subsidiary dividends Permanent purchases Receipt on sale of property, plant and equipment Net cash provided by investment activities Cash flows from financing activities Gain on the sale of treasury stock Dividends and interest on shareholders equity paid Obtainment of loans and financing Payment of loans and financing Net cash used in financing activities Exchange variance on cash and cash equivalents Net increase (decrease) in cash and cash equivalent Cash and cash equivalent at beginning of the period Cash and cash equivalent at the end of the period 208,221
208,221
37
Published Value added Revenue Consumables acquired from third parties Gross value added Depreciation, amortization and depletion Net added value produced Equity in net income of subsidiaries Financial revenue Total added value to be distributed Distribution of added value Personnel Taxes, duties and contributions Interest expenses Interest earnings 3,209,664 (2,243,054) 966,610 (34,548) 932,062 6,999 170,176 1,109,237 1,109,237 578,855 151,872 170,289 208,221
Adjusted Value added 2,741,418 (1,920,403) 821,015 (27,272) 793,743 26,032 163,682 983,457 983,457 510,161 113,768 151,307 208,221
2.3
Segment reporting
Operating segments are reported consistently with the internal reports provided to the main operating decision takers. The main taker of operating decisions, responsible for allocating funds and evaluating the performance of operating segments, is the Board of Directors, which is also responsible for taking the Company's strategic decisions.
2.4 a.
38
Subsidiary Apolo Solues em Plsticos Ltda. Joint subsidiaries FCO Participaes Indstria e Comrcio de Componentes Ltda GB Polo Bus Manufacturing S.A.E. Loma Hermosa S.A. Metalpar S.A. Metalsur Carrocerias S.R.L. Marcopolo Argentina S.A. New flyer Industries Inc. Rotas do Sul Logstica Ltda. San Marino Bus de Mxico S.A. de C.V. San Marino nibus e Implementos Ltda. Superpolo S.A. Hanegas S.A.S. Tata Marcopolo Motors Limited. Associated companies Mercobus S.A.C. MVC Componentes Plsticos Ltda. Poloplast Painis e Componentes Ltda. Setbus Solues Automotivas Ltda. Spheros Climatizao do Brasil S.A. Spheros Mxico S.A. de C.V. Spheros Thermosystems Colombia Ltda. WSul Espumas Indstria e Comrcio Ltda.
Denomination Apolo Denomination FCO GB Polo Loma Metalpar Metalsur Marsa New Flyer Rotas do Sul San Marino Mxico San Marino Superpolo Hanegas TMML Denomination Mercobus MVC Switchgear Setbus Spheros Spheros Mxico Spheros Colmbia WSul
Functional currency Reais Functional currency Reais Egyptian Pound Argentine Peso Argentine Peso Argentine Peso Argentine Peso Canadian Dollar Reais Mexican Peso Reais Colombian Peso Colombian Peso Rupee Functional currency Soles Reais Reais Reais Reais Mexican Peso Colombian Peso Reais
Country Brazil Country Brazil Egypt Argentina Argentina Argentina Argentina Canada Brazil Mexico Brazil Colombia Colombia India Country Peru Brazil Brazil Brazil Brazil Mexico Colombia Brazil
b.
c.
Company Entities
The results and financial position of all the Company's subsidiaries and joint ventures included in the consolidated financial information and investments recorded by the equity method (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the reporting currency are translated into the Company's reporting currency as follows:
(i)
assets and liabilities are translated at the exchange rate on the closing date of the consolidated financial statements; income and expenses are translated at the monthly average exchange rates, and all differences resulting from exchange rate translation are recognized in shareholders' equity, at equity valuation adjustments account. On consolidation, exchange differences arising from the translation of the net investment in foreign operations and of loans and other currency instruments designated as hedges of such investments, are recognized in comprehensive income. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognized in the statement of income as part of the gain or loss on the sale.
39
(ii) (iii)
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.
2.5 2.5.1
a.
b.
c.
40
d.
e.
2.5.2
2.5.3 a.
41
b.
significant financial difficulty of the issuer or obligor; a breach of contract, such as a default or delinquency in interest or principal payments; the Company, for economic or legal reasons relating to the borrower's financial difficulty granting to the borrower a concession that the lender would not otherwise consider; it becomes probable that the borrower will enter bankruptcy or other financial reorganization; the disappearance of an active market for that financial asset because of financial difficulties; or observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio, including: adverse changes in the payment status of borrowers in the portfolio; and national or local economic conditions that correlate with defaults on the assets in the portfolio.
The Company first assesses whether objective evidence of impairment exists. The amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognized in the consolidated statement of income. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor's credit rating), the reversal of the previously recognized impairment loss is recognized in the consolidated statement of income.
c.
d.
Non-financial assets
The book values of the Company's non-financial assets, inventory and deferred income and social contribution tax assets, are reviewed at each reporting date for signs of impairment. If signs of impairment are detected, the recoverable value of the assets is then estimated. In the case of goodwill and intangible assets with an indefinite useful life, the recoverable value is tested every year. Impairment losses are recognized in the income statement. Recognized losses on Cash Generating Units (UGC) are initially allocated to reduce any goodwill allocated to this unit (or group of units), and then to the reduction of the book value of other assets of this unit (or group of UGCs), on a pro rata basis. Impairment losses related to goodwill are not reversed. Impairment losses for other assets are only reversed if the book value of the asset does not exceed the book value that would have been determined, net of depreciation or amortization, had the impairment not been recognized.
2.6
2.7
2.8
Inventory
Stated at the lower of the cost and the net realizable value. Inventory is recorded at average cost and includes expenses incurred on the acquisition of inventory, production and transformation costs and other costs incurred to bring the inventories to their current status and location. For manufactured inventory and goods in progress, the cost includes part of the general manufacturing expenses based on normal production capacity. The net realizable value is the estimated sale price for the normal course of business, minus estimated conclusion costs and selling expenses.
2.9
2.10
43
The cost of materials and direct labor; Any other costs to bring the asset to its location and condition necessary so it can be operated as intended by Management; The disassembly costs, and the restoration of the site where these assets are located; and Loan costs on qualificable assets.
The cost of property, plant and equipment can include reclassifications from other comprehensive income of qualificable cash flow hedges for the purchase of fixed assets in foreign currency. The software purchased as an integral part of a piece of equipment is capitalized as a part of said equipment. When parts of an item of property, plant and equipment have different useful lives, these items are recorded as separate items (principal constituents) of property, plant and equipment. The gains and losses deriving from the sale of property, plant and equipment (determined by comparing the funds obtained through the sale against the book value of the property, plant and equipment), are recorded net amongst other revenue/expense figures in the income statement.
Subsequent costs
Subsequent expenses are capitalized to the extent it is probable that the future benefits associated with these expenses shall be transferred to the Company. Maintenance and repair expenses are recorded in the income statement.
Depreciation
Items of property, plant and equipment are depreciated by the straight-line method in the income statement for the year, based on the useful estimated economic life of each component. Leased assets are depreciated over the shorter between the useful life and the contractual term, unless the Company is certain it will acquire the property at the end of the lease. Land is not depreciated. Items of property, plant and equipment are depreciated from the date they are installed and are available for use, or in the case of internally constructed assets, on the date construction is completed and the asset is available for use. The estimated useful lives for the current and comparative years are as follows: Year Buildings Machinery Vehicles Furniture, fixtures and equipment 40-60 10-15 5 5-12
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
44
2.11 a.
b.
c.
Software
Software licenses acquired are capitalized based on costs incurred to acquire the software and render it ready for use. These costs are amortized during their estimated useful life of 3 to 5 years. The costs associated with software maintenance are expensed when incurred. Development costs directly related to the design and tests of identifiable and exclusive software products, controlled by the Company are recognized as intangible assets in the following situations: it is technically feasible to complete the software so it is available for use; management intends to conclude the software and use it or sell it; the software can be sold or used; the software will generate probable future economic rewards, which can be demonstrated; technical and financial resources and other suitable resources are available to conclude the development and use or sell the software; and the expense attributable to the software during development can be measured reliably.
Costs directly attributable, which are capitalized as part of the software product, include costs incurred on employees allocated to software development and a suitable portion of the direct relevant expenses. The costs also include financing costs related to the acquisition of the software. Other development expenses that do not meet these criteria are expensed, as and when incurred. Development costs previously recognized as expenses are not recognized as an asset in a subsequent period. Software development costs recognized as assets are amortized during the estimated useful life, not exceeding 5 years.
d.
45
Development activities involve a plan or project entailing the production of new or substantially improved products. Development expenses are only capitalized if the development costs can be measured reliably, if the product or process is technically and commercially feasible, if the future economic rewards are probable and if the Company has the intention and resources to conclude the development and use or sell the asset. Capitalized expenses include the cost of materials, direct labor, manufacturing costs that are directly attributable to the preparation of the asset for its intended use, and the cost of loans. Other development expenses are recognized in the income statement when they are incurred. Capitalized development expenses are measured at cost, minus accumulated amortization and impairment losses.
e.
f.
Subsequent expenses
Subsequent expenses are only capitalized when they increase the future economic benefits incorporated into the specific asset they relate to. All other expenses, including expenses on goodwill generated internally and trademarks are recognized in the statement as and when they are incurred.
g.
Amortization
Except for goodwill, amortization is recognized in income statement by the straight line method in relation to the estimated useful lives of intangible assets, as from the date they are available for use.
2.12
2.13
2.14
Accounts payable to Company suppliers for credit purchases. The Company calculates the present value the same way as it does for accounts receivable.
2.15
Provisions
A provision is recognized for a past event when the Company has a legal or constructive obligation, and it is probable that an outflow of funds will be required to settle the obligation. Provisions are calculated by discounting future expected cash flows at a before-tax rate that reflects current market valuations regarding the value of the money over time and specific risks posed by the liability. The financial costs incurred are expensed in the income statement.
2.16
Warranties
A provision for warranties is recognized when the goods or services are sold and is based on historic warranty data and estimated probabilities of all resulting disbursements.
2.17
The deferred tax is measured at the rates expected to apply to the temporary differences when they are reversed, based on the laws that have been decreed and substantially decreed by the reporting date. Measuring the deferred tax reflects the tax consequences that arise in the manner expected by the Company at the end of the year it prepares its financial statements and recovers or settles the book value of its assets and liabilities. For investment properties measured at fair value, the assumption that the book value of the investment property will be recovered was not refuted. The deferred tax is measured at the rates expected to apply to the temporary differences when they are reversed, based on the laws that have been decreed. Deferred tax assets and liabilities are offset if there is a legal right to offset current tax assets and liabilities, and they are related to income taxes levied by the same tax authority on the same entities subject to taxation.
47
Deferred income and social contribution tax assets are recognized on deductible tax losses, tax credits and temporary differences not used when it is probable that future taxable earnings will be generated against which they can be offset. Deferred income and social contribution tax assets are reviewed at each reporting date and are reduced to the extent that realization is no longer probable.
2.18
i.
The cost of pension and other post-employment benefits provided to employees is actuarially determined using the projected unit credit method and management's best estimate of expected investment performance for funded plans, salary increases, retirement age of employees and expected healthcare costs. The discount rate used for determining future benefit obligations is an estimate of the interest rate in effect at the balance sheet date; Pension plan assets are stated at market value; Past service costs arising from plan adjustments are amortized on a straight-line basis over the remaining service period of active employees at the date of the adjustment; Actuarial gains and losses are immediately recognized in comprehensive income for the year; and A plan curtailment results from significant changes in the expected service period of active employees. A net curtailment loss is recognized when the event is probable and can be estimated, while a net curtailment gain is deferred until realized. In accounting for pension and post-retirement benefits, several statistical and other factors that seek to anticipate future events are used to calculate plan expenses and liabilities. These factors include discount rate assumptions, expected return on plan assets, future increases in healthcare costs, and future salary increases. In addition, actuarial consultants also use subjective factors such as withdrawal, turnover, and mortality rates to estimate these factors. The actuarial assumptions used by the Company may differ materially from actual results due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans.
2.19
Capital
Common shares Common shares are classified as shareholders' equity. Additional costs directly attributable to the issuance of shares and options are recognized as a deduction from the shareholders' equity, net of tax. Preferred shares Preferred shares are classified as shareholders' equity if they are not redeemable or can only be redeemed with the company's consent and any dividends are discretionary. Discretionary dividends are recognized as profit distributions in shareholders' equity when they have been approved by the Company's shareholders. The minimum mandatory dividends established in the bylaws are recognized as liabilities.
48
2.20
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of products and goods in the ordinary course of the Company's activities. Revenue is stated net of tax, returns, rebates and discounts and after eliminating intercompany sales. The Company recognizes revenue when its amount can be reliably estimated, it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the Company's activities, as described below. The Company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the sale specifics.
a.
Sale of bus
Revenue is not recognized until: (i) the vehicles have been delivered to the client; (ii) the risks of obsolescence and loss have been transferred to the client; (iii) the client has accepted the vehicles pursuant to the sale contract; and (iv) the acceptance terms have been agreed, or the Company has objective evidence that all acceptance criteria have been met. Sales are recorded based on the price specified in the sale contract, and are discounted to present value.
b.
Financial revenue
Interest income is recognized on the accrual basis, using the effective interest rate method. When accounts receivable is impaired, the Company reduces the carrying amount to its recoverable amount, which is the estimated future cash flow discounted at the original effective interest rate of the instrument. Subsequently, as time goes by, interest is incorporated into receivables against interest income. This interest income is calculated at the same effective interest rate used to determine the recoverable amount, i.e., the original rate of the receivables.
2.21
2.22
Standards, amendments and interpretations a. Standards, amendments and interpretations of standards that are not yet effective
Interpretations and amendments were issued to existing standards and are mandatory for accounting periods beginning on January 1, 2014 or thereafter, or for subsequent periods. In the managements opinion are not relevant to the Company's current operations, except for the standards listed below, whose impact is being evaluated. However, not early adopt these standards and amendments to standards by the Company.
Topic Amendments to IAS 32 and IFRS 7 (2011) - New Key requirements The amendments to IAS 32 aims to clarify the requirements for offsetting financial instruments. These amendments address inconsistencies encountered in practice when applied the offsetting criteria in IAS 32 Financial Instruments: Presentation. The amendments clarify: the meaning of "has a legally enforceable right to settle the net amount" (currently has a legally enforceable right of set-of), and systems that some gross settlement can be considered equivalent to the net settlement. The amendments are effective for annual periods
49
Effective date Effective for annual periods beginning on or after January 1, 2014
Topic
Key requirements beginning on or after January 1, 2014 and its retrospective application is required. The amendments are part of the compensation project IAS. As part of this project, the IASB also issued separately Disclosures - Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7), changes of this IFRS would contain new disclosure requirements for financial assets and financial liabilities which are: compensation of the financial statement, or subject to master netting agreements or similar agreements.
Effective date
a.
b.
Income and social contribution taxes The Company is subject to income tax in all countries in which it operates. Significant judgment is required to determine the provision for income taxes in different countries. Pension and post-employment benefits
The Company recognizes its obligations related to employee benefit plans and related costs, net of plan assets, in accordance with the following practices:
c.
i.
The cost of pension and other post-employment benefits provided to employees is actuarially determined using the projected unit credit method and management's best estimate of expected investment performance for funded plans, salary increases, retirement age of employees and expected healthcare costs. The discount rate used for determining future benefit obligations is an estimate of the interest rate in effect at the balance sheet date; Pension plan assets are stated at market value; Past service costs arising from plan adjustments are amortized on a straight-line basis over the remaining service period of active employees at the date of the adjustment; Actuarial gains and losses are immediately recognized in comprehensive income for the year; and A plan curtailment results from significant changes in the expected service period of active employees. A net curtailment loss is recognized when the event is probable and can be estimated, while a net curtailment gain is deferred until realized. In accounting for pension and post-retirement benefits, several statistical and other factors that seek to anticipate future events are used to calculate plan expenses and liabilities. These factors include discount rate assumptions, expected return on plan assets, future increases in healthcare costs, and
50
future salary increases. In addition, actuarial consultants also use subjective factors such as withdrawal, turnover, and mortality rates to estimate these factors. The actuarial assumptions used by the Company may differ materially from actual results due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans.
4
4.1 (a) (i)
Trade payables
Loans
Forwards
Consolidated December 31, 2012 Accounts Receivable Currency US dollars Australian dollar
Euros
Trade payables
Loans
Forwards
51
(ii)
(iii)
(b)
Credit risk
The credit risk is administrated on a corporate basis. Credit risk arises from cash and cash equivalents, derivative financial instruments, deposits at banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and repurchase transactions. If no independent classification exists, the credit ratings department evaluates the quality of the customer's credit, taking into account its financial position, past experience and other factors. The individual risk limits are determined based on internal or external classifications according to the limits established by the Board of Directors. The use of credit limits is monitored regularly. The Company also has an allowance for doubtful accounts of R$ 24,359 (parent company) and R$ 70,286 (consolidated) as of September 30, 2013 (R$ 25,793 and R$ 68,973 on December 31, 2012) representing 3.4% and 4.0%, respectively, of the outstanding accounts receivable balance of the parent company and consolidated (3.7% and 4.3% on December 31,2012) which was recorded to cover credit risk.
(c)
Liquidity risk
This is a risk of the Company having insufficient liquid funds to meet its financial commitments, as a result of a time or volume mismatch between scheduled receipts and payments. Future receipt and payment premises are established to administrate cash liquidity in local and foreign currency, which are directly monitored by the Treasury Department.
9/30/2013 Contractual cash flow Book value Non-derivative financial liabilities Loans Trade payables Derivative financial liabilities Derivative financial instruments Total 1 to 2 years 2 to 5 years Over 5 years
1,831,823 420,926
2,007,690 420,926
403,040 420,926
1,556,439 -
48,211 -
820
820
820
52
12/31/2012 Contractual cash flow Book value Non-derivative financial liabilities Loans Trade payables Derivative financial liabilities Derivative financial instruments Total 1 to 2 years 2 to 5 years Over 5 years
1,250,465 333,431
1,309,460 333,431
946,776 333,431
336,767 -
25,917 -
247
247
247
(d)
Premisses CDI - % TJLP - % Exchange rate - US$ Exchange rate - Euro LIBOR - %
Cost of advances on foreign exchange contracts (ACC) discount - %
Effects on results
(Scenario I)
9.75 5.00 2.20 3.05 1.00
Short-term investments Interbank transactions Loans and financing Forwards Receivables less payables
4.2
. . .
WACC between 8% and 12% p.a.; Net Debt/EBITDA between 1.50x and 2.50x; Debt/Equity ratio between 25% and 80%.
The financial leverage indexes as of September 30, 2013 and December 31, 2012 have been summarized below:
Consolidated 9/30/2013 Total loans (Note 15) Less: Cash and cash equivalents (Note 7.1) Net debt Total shareholders equity Total capital Financial leverage index - % 1,831,823 (760,630 ) 1,071,193 1,410,684 2,481,877 76 12/31/2012 1,250,465 (374,219 ) 876,246 1,299,925 2,176,171 67
4.3
The following table presents the Company's assets and liabilities that are measured at fair value at September 30, 2013 and December 31, 2012 which were fully classified in level 2:
Consolidated 9/30/2013 Level 2 Assets
Financial assets at fair value through profit or loss - Fixed income investment fund - Trading derivatives Available-for-sale assets - Bank deposit certificates 124 5,949 10,993 17,066 Liabilities Financial liabilities at fair value through profit or loss - Trading derivatives 1,093 3,446 130,747 135,286
12/31/2012
820 820
247 247
54
5
(a)
(i)
(ii)
(b)
(i)
(ii) (iii)
(c)
Available-for-sale
Short-term investments Funds held in Bank Deposit Certificates.
(d)
(e)
(i)
(ii)
(f)
55
Assets
Notional value Company
Marcopolo BBA BRADESCO BRASIL CITIBANK JP MORGAN MERRILL LYNCH PACTUAL SANTANDER VOTORANTIM SAFRA Sale Sale Sale Sale Sale Sale Sale Sale Sale Sale 08.23.13 08.07.13 08.16.13 06.27.13 08.16.13 01.23.14 01.21.14 11.19.13 11.28.13 01.14.14
Counterpart
Status
Initial
Final
9/30/2013
USD mil 3,103 9,055 10,620 1,500 6,000
08.22.13 08.15.13
01.16.14 10.31.13
2,500 6,450
USD mil 62 62 62 62
Purchase Purchase
04.25.13 03.26.13
10.15.13 12.03.13
68 59 127 4
4 -
68 59 127
4 4
56
Liabilities
Notional value Company
Marcopolo BRASIL MERRILL LYNCH Sale Sale 04.30.13 04.30.13 10.31.13 10.10.13
Counterpart
Status
Initial
Final
9/30/2013
USD mil 1,200 1,200
(205) (205)
(205) (205)
Purchase Purchase
06.13.13 05.31.13
02.03.14 02.03.14
USD mil 500 CHF mil 125 SGD mil 210 CNY mil 12,352
57
The company earned gain and losses from derivative in the periods ended as of September 30, 2013 and 2012 as follows.
Gains / losses Interest on derivatives 9/30/2013 9/30/2012 Marcopolo Ciferal Masa MP Austrlia 6,841 38 11,240 2,449 Foreign Exchange on derivatives 9/30/2013 9/30/2012 (8,164) 16 (1002) (353) (19,139) (4,089) (373) -
(a)
Subsidiaries
Percentage interest September 30, 2013 Subsidiary Apolo Banco Moneo Ciferal Ilmot Laureano MAC MPC MIC MIC UY Mapla Masa Trading Moneo MP Austrlia MP Canad Pologren (1) Volgren (1) PoloRus Polomex Syncroparts Volare Veculos Volare Comrcio Direct 65.00 99.99 100.00 100.00 70.00 100.00 99.99 100.00 99.99 100.00 100.00 100.00 100.00 3.61 99.99 99.90 99.90 Indirect 100.00 0.01 100.00 30.00 0.01 75.00 75.00 70.39 0.01 0.10 0.10 Minority Interest 34.00 25.00 25.00 26.00 Direct 99.99 100.00 100.00 70.00 100.00 100.00 99.99 100.00 99.99 100.00 100.00 100.00 3.61 99.99 99.90 99.90 Indirect 100.00 0.01 100.00 30.00 0.01 75.00 75.00 70.39 0.01 0.10 0.10 December 31, 2012 Minority Interest 25.00 25.00 26.00 -
(1)
Consolidated in MP Austrlia.
The following main practices are adopted in the preparation of the consolidated financial information: i. ii. iii. Elimination of inter-company asset and liability account balances; Elimination of investment in the capital, reserves and retained earnings of the subsidiaries; Elimination of intercompany income and expenses and unearned income arising from intercompany transactions. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment; Elimination of tax charges on unearned income and presented as deferred tax in the consolidated balance sheet; and Identification of minority interests in the consolidated financial information.
iv. v.
58
(b)
(1) Consolidated in the joint venture (unconsolidated) in Loma. (2) Consolidated in the joint venture (unconsolidated) in San Marino.
The main balances of the financial statements of these joint arrangement can be summarized as follows:
Assets 9/30/2013 FCO GBPolo Loma San Marino Superpolo Hanegas TMML 256 69,622 151,304 329,476 166,506 5,847 153,359 12/31/2012 348 69,979 97,291 280,907 132,132 5,817 142,829 9/30/2013 88 69,053 98,450 250,452 92,880 6,649 98,504 Liabilities 12/31/2012 36 62,013 50,704 197,796 59,765 6,609 88,315 9/30/2013 151 17,802 208,716 276,275 192,758 165,935 Net revenue 12/31/2012 13,771 94,711 325,206 141,152 197,648 9/30/2013 (467) (7,202) 10,224 5,526 10,022 (6) 2,814 Profit (loss ) 12/31/2012 (6,238) 1,072 21,394 11,660 (13) 12,455
(c)
12/31/2012 Direct 40.00 26.00 40.00 30.00 Indirect 26.00 40.00 40.00 -
59
The main balances of the financial information of the direct joint ventures can be summarized as follows:
Assets 9/30/2013 Mercobus MVC Setbus Spheros Wsul 1,536 228,983 11,147 66,221 8,405 12/31/2012 1,274 138,676 50,840 8,929 9/30/2013 159 169,458 15,542 41,402 1,436 Liabilities 12/31/2012 70,297 16,371 2,053 9/30/2013 1,110 180,392 3,882 109,217 18,030 Net revenue 12/31/2012 108,431 87,604 14,144 9/30/2013 (200) 14,954 (4,144) 13,642 805 Profit (loss) 12/31/2012 7,105 12,881 (3)
Ciferal Industria de nibus Ltda (Ciferal) Wholly owned subsidiary located in Duque de Caxias, State of Rio de Janeiro, Brazil, is engaged in manufacturing car bodies for buses and minibuses, besides their parts, components and accessories. Ilmot International Corporation (Ilmot) - Wholly owned subsidiary, located in Uruguay. Ilmot has a participation in subsidiaries / affiliates as follows: Polomex A.S. de C. V. (Polomex) - located in Monterrey, Nuevo Len, Mexico, with a share of 70.39% in the capital. Polomex is engaged in manufacturing bus bodies. Superpolo S. A. (Superpolo) - located in Cundinamarca, Colombia, with a share of 50% in the capital. Superpolo is engaged in manufacturing bus bodies.
Hanegas S. A. S - located in Colombia, with a share of 49.875% of the capital. Hanegas is engaged in manufacturing bus bodies. Laureano A.S. - Wholly owned subsidiary, located in Argentina. Currently this subsidiary is not operating. Marcopolo Auto Componentes Co. (Mac) Wholly owned subsidiary, located in ChangZhou City, China, is engaged in developing and selling buses components. Marcopolo Australia Holdings PTY LTD. (MP Australia) Wholly owned subsidiary, located in Melbourne, Australia. MP Australia has a participation in subsidiaries / affiliates as follows: Pologren Australia Holdings PTY LTD. (Pologren) Wholly owned subsidiary, located in Melbourne, Australia. Pologren has participation in subsidiaries / affiliates as follows: Volgren Australia PTY Limited (Volgren) localizada em Melbourne, Australia, com participao de 75% no capital. A Volgren tem por objeto fabricar carrocerias para nibus.
60
Marcopolo Canad Holdings Corp. (MP Canada) Wholly owned subsidiary, located in Canada. MP Canada has participation in subsidiaries / affiliates as well as a joint arrangement, as follow: New Flyer Industries Inc. (New Flyer) located in Canada, with a share of 19,99% of the capital. New Flyer has engaged in manufacture buses. Marcopolo Industria de Carroarias A.S. (MPC) Wholly owned subsidiary, located in Portugal. Currently this subsidiary is not operating. Marcopolo International Corp. (MIC) Wholly owned subsidiary, located in British Virgin Islands (BVI). Currently this subsidiary is not operating. Marcopolo Latinoamrica S. A. (Mapla) Wholly owned subsidiary, located in Argentina. Currently this subsidiary is not operating. Marcopolo South Africa Pty Ltd. (Masa) Wholly owned subsidiary, located in Johannesburg, South Africa. Masa has engaged in manufacture buses bodies. Marcopolo Trading S. A. (Trading) Wholly owned subsidiary, located in Caxias do Sul, State of Rio Grande do Sul, Brazil. Marcopolo trading has engaged in provide technical services regarding foreing trade. Syncroparts Com e Distr. de Peas Ltda (Syncroparts) Wholly owned subsidiary, located in Caxias do Sul, State of Rio Grande do Sul, Brazil. Syncroparts has engaged in trading and distribution of parts for vehicles and has participation in subsidiaries / affiliates as follows: FCO Participaes Industria e Comrcio de Componentes Ltda (FCO) Related Company with a share of 50% of capital, located in Joinvile, State of Santa Catarina, Brazil. FCO has engaged in trading and distribution of parts for vehicles.
PoloAutoRus LLC. Wholly owned subsidiary, located in Moscow, Russia. It has engaged in manufacture bus bodies. Volare Veiculos Ltda - Wholly owned subsidiary, located in So Matheus, State of Espirito Santo, Brazil, has engaged in manufacture bus and minibus bodies, besides their parts, components and accessories. Volare Comrcio e Distribuio de Veculos e Peas Ltda - Wholly owned subsidiary, located in So Paulo, State of So Paulo, Brazil, has engaged in sellvehicle parts and accessories. GB Polo Bus Manufacturing S. A. E (GB Polo) Related Company with a share of 50% of capital, located in Suez, Egito, has engaged in manufacture bus bodies. Loma Hermosa S. A. (Loma) - Related Company with a share of 50% of capital, located in Buenos Aires, Argentina. Loma has participation in subsidiaries / affiliates as follows: Metalpar S. A. Subsidiary with a share of 98% of capital, located in Buenos Aires, Argentina. Metalpar has engaged in manufacture bus bodies. Metalsur Carrocerias S.R.L. Subsidiary with a share of 51% of capital, located in Santa F, Argentina. Metalsur has engaged in manufacture bus bodies. Marcopolo Argentina S. A. (Marsa) Wholly owned subsidiary, located in Buenos Aires, Argentina. Marsa has engaged in sell vehicle parts and accessories.
San Marino nibus e Implementos Ltda (San Marino) - Related Company with a share of 45% of capital, located in Caxias do Sul, State of Rio Grande do Sul, Brazil. San Marino is engaged in manufacturing bus and minibus bodies, besides their parts, components and accessories and has participation in subsidiaries / affiliates as follows: San Marino Bus de Mxico A.S. de C. V. Subsidiary with a share of 99,99% of capital, located in Toluca, State of Mexico, Mexico, has engaged in manufacture bus bodies.
61
Rotas do Sul Logstica Ltda. Subsidiary with a share of 99,99% of capital, located in Caxias do Sul, State of Rio Grande do Sul, Brazil, has engaged in provide transportation services.
Tata Marcopolo Motors Limited (TMML) Related Company with a share of 49% of capital, located in Dharwad, India, has engaged in manufacture bus bodies. Mercobus S. A. C. Related Company with a share of 40% of capital, located in Peru, is engaged in commercial representation of bus bodies. MVC Componentes Plsticos Ltda (MVC) - Related Company with a share of 26% of capital, located in So Jos dos Pinhais, State of Parana, Brazil. MVC is has engaged in manufacture and sell of parts, components and accessories to vehicles and participation in subsidiaries / affiliates as follows: Poloplast Painis e Componentes Ltda - Wholly owned subsidiary, located in So Jos dos Pinhais, State of Parana, Brazil. Poloplast has engaged in manufacture and sell resin coatings for interior and exterior and respective raw material.
Setbus Solues Automotivas Ltda. (Setbus) Related Company with a direct and indirect share of 25% and 20%, respectively, of capital, located in Caxias do Sul, State of Rio Grande do Sul, Brazil. Setbus has engaged in automotive solutions. Spheros Climatizao do Brasil A.S. (Spheros) - Related Company with a share of 40% of capital, located in Caxias do Sul, State of Rio Grande do Sul, Brazil. Spheros has engaged in manufacture and sell of refrigeration and air conditioning equipments and has participation in subsidiaries /affiliates as follows: Spheros Mxico A.S. de C. V - Wholly owned subsidiary located in Mexico and has engaged in manufacture and sell of refrigeration and air conditioning equipments. Spheros Thermosystems Colombia Ltda - Wholly owned subsidiary located in Colombia and has engaged in manufacture and sell of refrigeration and air conditioning equipments as well.
Wsul Espumas Industria e Comrcio Ltda (Wsul) - Related Company with a share of 30% of capital, located in Caxias do Sul, State of Rio Grande do Sul, Brazil. Wsul has engaged in manufacture and sell molded polyurethane foam and derivatives thereof.
7
7.1
12/31/2012
(*) Substantially correspond to Bank Deposit Certificates - CDB remunerated at between 100.0% and 103.3% of the Interbank Deposit Certificate (CDI) rate, resulting in a weighted average of 100.6% of CDI as of September 30, 2013.
62
7.2
Financial assets stated at fair value through profit or loss, available-for-sale and derivative financial instruments
Parent company Current At fair value through profit or loss Fixed-income investment funds
Non Deliverable Forwards (*) 9/30/13 124 5,697 12/31/12 1,093 3,380 9/30/13 124 5,949
Consolidated
12/31/12 1,093 3,446
10,993 16,814
130,747 135,220
10,993 17,066
130,747 135,286
24,515 24,515
36,942 36,942
24,056 24,056
22,130 22,130
The bank deposit certificates yield rates of 11% p.a.. Derivative financial instruments are classified in current assets or liabilities. The Company has no financial instruments recognized under the hedge accounting method, pursuant to IAS 39.
Accounts receivable
Parent company 9/30/2013 Current Domestic customers Foreign customers Related parties Interbank transactions Present value adjustment Allowance for doubtful accounts 12/31/2012 9/30/2013 Consolidated 12/31/2012
700,713
668,044
Interbank accounts refer to the financing for the acquisition of buses granted by Banco Moneo through the Government Agency for Machinery and Equipment Financing (FINAME) program.
63
Inventories
Parent company 9/30/2013 12/31/2012 77,510 29,015 129,484 6,612 (417) 242,204 9/30/2013 133,966 76,579 249,843 19,701 (5,572) 474,517 Consolidated 12/31/2012 102,751 55,192 197,009 15,319 (5,742) 364,529
Finished goods Goods in process Raw materials and storeroom materials Advances to suppliers and other Provision for inventory losses
64
10
11
Investments
Parent company 9/30/2013 Subsidiary Joint subsidiaries Associated companies Other investments 917,411 157,263 31,099 1,105,773 12/31/2012 546,344 156,367 27,811 730,522 9/30/2013 325,138 31,099 1,227 357,464 Consolidated 12/31/2012 127,098 27,811 1,045 155,954
65
(a)
390 390
1,738
14,820
5,032
260 15,080
157 5,189
31,664
66
Joint arrangement Total San Marino (2) 56,080 86,554 7,478,482 45,00 5,525
GBPolo (1) Investment data Capital Adjusted Shareholders equity Share or quotas held % interest Net income (loss) for the period Changes in the investments Opening balances: At equity value Capital subscription Dividends received Equity in net income of subsidiaries and associated companies Accumulated translation adjustments Closing balance: At equity value 31,716 569 4,803,922 49,00 (7,202)
9/30/2013
12/31/2012
(1) External subsidiaries/joint arrangements (2) These balances include goodwill and investments.
Associated companies Total MVC Investment data Capital Adjusted Shareholders equity Share or quotas held % interest Net income (loss) for the period Changes in the investments Opening balances: At equity value Capital subscription Acquistion of equity interest Dividends received Equity in net income of subsidiaries and associated companies Accumulated translation adjustments Closing balances: At equity value
(1) External subsidiaries/joint arrangements
Spheros
Setbus
WSul
9/30/2013
12/31/2012
250 (1,174)
(924)
(b)
12
(a)
Computer equipment
6,211 2,283 (9) 4 (1,324) 7,165 16,846 (9,681) 7,165
Vehicles
2,151 613 (21) (321) 2,422 5,123 (2,701) 2,422
Other PPE
98 98 98 98
PPE in progress
19,677 17,931 (516)
Total
190,584 40,878 (539) (14,424) 216,499 405,611 (189,112) 216,499
2.0
8.3
8.3
20.0
20.0
68
(b)
Land Balance as of December 31, 2012 Exchange effect Additions Write-offs Transfers Depreciation Balance as of September 30, 2013 Cost of property, plant and equipment Accumulated depreciation Residual value Annual depreciation rates - %
22,656 (80) 200 22,776 22,776 22,776
Computer equipments
6,943 2,641 (265) 4 (1,231) 8,092 18,902 (10,810) 8,092
Vehicles
4,644 35 2,042 (678) (662) 5,381 10,467 (5,086) 5,381
Other PPE
3,136 320 741 (119) (696) 3,382 8,873 (5,491) 3,382
PPE in progress
43,103 649 22,469 (1,424) (516) 64,281 64,281 64,281
Total
298,808 281 58,419 (4,971) (23,839) 328,698 609,660 (280,962) 328,698
2.0
8.3
8.3
20.0
20.0
13.0
69
13
(a)
Softwares Balance as of December 31, 2012 Additions Write-offs Amortization Balance as of September 30, 2013 Cost of intangible assets Accumulated amortization Residual value Annual amortization rate - %
4,708 1,583 (3) (1,417) 4,871 47,662 (42,791) 4,871
Total
4,781 1,583 (3) (1,431) 4,930 48,884 (43,954) 4,930
20.0
7.0
(b)
Client Portfolio
14,019 (4) (597) (2,521) 10,897 16,499 (5,602) 10,897
Other Intangibles
9,393 (759) 409 (313) 8,730 9,311 (581) 8,730
Goodwill
184,639 2,208 64,736 251,583 251,583 251,583
Total
213,659 1,884 69,389 (601) (4,497) 279,834 331,035 (51,201) 279,834
2.0
8.3
25
10
70
14
Related parties
The main asset and liability balances at September 30, 2013, as well as the transactions with related parties that influenced the statement of income in the period, are detailed below:
Asset balances of loans and current accounts Subsidiary Ciferal GB Polo Ilmot Loma Hermosa Mac Mapla Masa Moneo MPC MPT MVC Polomex Polorus San Marino Setbus Spheros Superpolo TMML Volare Veculos Volare Comrcio WSUL Balance at Sep 30, 2013 Balance at December 31, 2012 130 22,978 279 1 1,035 1 47 44 Liability balances of loans and current Other accounts receivables 20 10,131 -
Trade accounts receivable 19,229 2,077 2,179 3,039 14,067 322 98 12,543 2,264 5,790 15,971 -
Sales of goods/ services 59,293 168 5,890 3,274 18,284 2 413 41,857 270 8,185 2,445 17,628 -
Financial expenses -
24,515
20
10,131
77,579
18,940
157,709
127,679
494
36,942
20
9,048
48,549
4,551
153,265
62,150
375
The loan and current account balances of companies headquartered in Brazil are subject to financial charges at the CDI interest rate, and those of companies abroad to the semi-annual Libor rate plus 3% p.a.
Fixed Board of Directors and Executive Board Non-executive officers 7,173 4,687 11,860
71
9/30/2012 Retirement plan 94 138 232 Share based payments 256 506 762
Fixed Board of Directors and Executive Board Non-executive officers 6,691 4,341 11,032
15
52,883 14,836 20
TJLP + 1.00
2018
1,036,996
(73,889) 963,107
(*) BNDES credit line used for producing exportation goods, where the shipment must occur no later than 3 years after the initial contract. The long-term installments have the following payment schedule:
Parent company 9/30/2013 From 13 to 24 months From 25 to 60 months After 60 months 34,852 899,066 29,189 963,107 12/31/2012 22,895 62,047 21,664 106,606 9/30/2013 213,276 1,185,264 41,897 1,440,437 Consolidated 12/31/2012 187,352 318,980 21,665 527,997
72
(a)
(b)
The face value of loans in current liabilities approximates the fair value.
16
(a)
Provisions
Civil, labor and tax contingencies
The Company is a party to labor, civil, tax and other lawsuits in progress, and is disputing them at the administrative and judicial levels, which, when applicable, are supported by judicial deposits. The provisions for any losses under these proceedings are estimated and restated by Management, relaying on the opinion of its independent and in-house legal advisers. The contingencies as of September 30, 2013 and December 31, 2012, which are considered to be probable and possible losses, according to the opinion of legal counsel, are shown below. Contingencies involving probable risks of loss have been provisioned for.
Parent company 9/30/2013 Nature Civil Labor Tax Probable 1,314 3,777 6,092 11,183 Possible 67 7,536 78,907 86,510 Probable 181 2,314 4,108 6,603 12/31/2012 Possible 147 4,628 151,888 156,663
73
Consolidated 9/30/2013 Nature Civil Labor Tax Probable 1,585 6,318 13,799 21,702 Possible 529 7,536 108,799 116,864 Probable 181 4,503 11,665 16,349 12/31/2012 Possible 609 4,628 170,818 176,055 Consolidated 9/30/2013 981 1,505 9,420 11,906 12/31/2012 964 1,749 9,335 12,048
Parent company Judicial deposits Civil Labor Tax 9/30/2013 981 428 4,559 5,968 12/31/2012 964 319 4,564 5,847
(i)
(ii)
Tax contingencies
The Company and its subsidiaries are party to various tax lawsuits. The nature of the principal lawsuits is detailed below: . Provisioned for:
Parent company 9/30/2013 ICMS Transfer of credits (i) COFINS Increase in rate (ii) INSS On imported services provided fully abroad (iii) Other contingent liabilities of lesser amounts 3,145 2,947 6,092 12/31/2012 3,144 964 4,108 9/30/2013 3,145 7,513 2,947 194 13,799 Consolidated 12/31/2012 3,144 7,362 1,159 11,665
(i) Contingencies regarding the discussion on the transfer to suppliers of ICMS credits arising from exports. (ii) Contingencies relating to the increase in the Social Contribution on Revenues (COFINS) introduced by Law 9.718/98. The lawsuits are still in progress at the judicial level. (iii) Contingencies regarding the incidence of INSS on services provided by employees abroad.
74
(i) Contingencies deemed as possible loss, regarding IRPJ and CSLL allegedly due on exports intermediated by offshore subsidiaries, carried out in the period from 1999 to 2007 which, according to the tax authorities, characterize simulated transactions. The processes are awaiting judgment of the appeals to the Administrative Board of Tax Appeals. In September 2011, in the processes related to calendar years 20012007 the Administrative Board of Tax Appeals (CARF) unanimously ruled in favor of the Company, fully canceling the tax assessment notices. In July 2012 the above decision was upheld by the Superior Chamber of Tax Appeals of the Board of Tax Appeals. The processes with respect to the calendar years 2001 to 2007 had become final. (ii) Contingency whose perspective of loss is considered possible related to the consolidation of overseas results from indirect subsidiaries, prior to offer profits to taxation in Brazil. The disputes are in progress at the Brazilian Internal Revenue Service. (iii) Contingency of a subsidiary, deemed as possible loss, regarding ICMS liabilities from shipments of goods with a reduced tax rate to non-taxpayers established out of the state. The disputes are in progress at the Taxpayers Council of the State of Rio de Janeiro. (iv) Contingency, deemed as possible loss, regarding ICMS liabilities for alleged issue tax documents with error in rate application to non-taxpayers established out of the state. The disputes are in progress at the Taxpayers Council of the State of So Paulo. There are other contingent liabilities, with lower values, totaling R$ 30,171 (R$ 19,972 in December 31, 2012) for which unfavorable outcomes are assessed as possible.
(b)
Contingent assets
Contingent assets are summarized below, together with the possibilities of a favorable outcome, according to the opinion of legal counsel:
Consolidated 9/30/2013 Nature Contingent Tax Social Security Probable Possible Probable 12/31/2013 Possible
9,458 9,458
9,605 9,605
75
(i)
Tax contingencies
The Company is the plaintiff in various lawsuits at the state and federal levels, in which the following matters are being disputed:
Excise Tax - IPI. Social Integration Program - PIS and Tax for Social Security Financing - COFINS. Corporate Income Tax - IRPJ and Social Contribution on Net Income - CSLL.
Tax on Financial Transactions (IOF) and Income Tax Withheld at Source (IRRF).
Eletrobrs compulsory loan.
(ii)
17
According to the retirement plan statute and the installment recorded for the supplementary retirement plan it is not possible to reimburse the amounts, increase the benefit or reduce future contributions. The changes over the benefit liability occurred during the year is described as follows:
76
Parent company 9/30/2013 At the beginnig of the period Plan participants contributions Actuarial (gains) / losses Recognized net (expenses)/revenue At the end of the period (43,057) 7,313 (23,237) (7,035) (66,016) 12/31/2012 388 8,497 (51,586) (356) (43,057) 9/30/2013 (43,368) 7,401 (23,321) (7,220) (66,508)
Changes in the fair value of the employee benefit plan are demonstrated below:
Parent company 9/30/2013 At the beginnig of the period Sponsors contribution Employees contribution Benefits paid Expected return of active plans Actuarial gains (losses) At the end of the period 188,665 7,313 359 (4,844) (9,033) 182,460 12/31/2012 160,291 8,497 559 (6,475) 26,578 (785) 188,665 9/30/2013 190,072 7,401 365 (4,844) (9,174) 183,820 Consolidated 12/31/2012 160,291 8,602 569 (6,475) 27,870 (785) 190,072
77
. Economic hypothesis
Percentage p.a. Parent company 9/30/2013 Discount rate (*) Return rate expected over plans assets Future salary increments Inflation 8.64 8.64 7.63 4.50 12/31/2012 8.64 8.64 7.63 4.50 9/30/2013 8.64 8.64 7.63 4.50 Consolidated 12/31/2012 8.64 8.64 7.63 4.50
(*) The discount rate is: inflation 4.50% p.a. plus interests of 3.96%p.a as of September 30, 2013 (inflation 4.50%p.a. plus interests of 3.96%p.a. as of December 31, 2012).
. Demographic hypothesys
Percentual p.a. Parent company 9/30/2013 Mortality table Invalid and mortality table Invalid entrance table AT 2000 RRB 1983 RRB 1944 12/31/2012 AT 2000 RRB 1983 RRB 1944 9/30/2013 AT 2000 RRB 1983 RRB 1944 Consolidated 12/31/2012 AT 2000 RRB 1983 RRB 1944
18
(a)
19,174 24,263 21,115 11,183 66 417 18,692 66,016 (5,294) 1,520 (823) 156,329 34 53,152
19,753 26,595 1,004 26,636 6,603 704 417 16,583 43,057 (3,380) 2,908 (18,668) 122,212 34 41,552
21,829 27,839 36,278 24,065 21,682 66 5,572 18,692 66,508 (5,294) 1,860 5,121 224,218 34 76,234
23,877 30,422 37,461 30,973 16,349 704 5,742 16,583 43,368 (3,442) 2,908 (13,283) 32 191,694 34 65,176
78
(b)
(c)
252,579 34 85,877
256,874 34 87,337
293,395 34 99,754
291,382 34 99,070
Permanent addition and exclusions Equity in net income of subsidiaries Management profit sharing Interest on shareholders equity Other additions (exclusions)
19
Equity
According a meeting of the Board of Directors held on August 5, 2013 was approved a Company's capital increase of R$ 500 million through capitalization of capital reserves as at 31 December 2012, with bonus shares 100%.
(a)
Capital social
The authorized Parent Companys capital is 869,900,084 shares (448.450.042 as of December 31, 2012), where 341,625,744 are common shares and 555,274,340 are preferred shares, nominal and with no nominal value. Of the total subscribed capital, 295,502,020 (140,901,676 as of December 31, 2012) preferred shares are held by stockholders abroad.
79
(b) (i)
Reserves Legal reserves Constituted at the rate of 5% of the net income determined in each financial year pursuant to article 193 of Law 6.404/76 up to the limit of 20% of the share capital. Statutory reserves At least 25% (twenty-five percent) of the remaining balance of profit is appropriated for the payment of a compulsory dividend on all shares of the Company. The remaining balance of profit is fully appropriated to the following reserves: Reserve for future capital increase - to be used for future capital increases and established at 70% of the remaining balance of the profit for each year, but the balance cannot exceed 60% of share capital. Reserve for payment of interim dividends - to be used for the payment of interim dividends in accordance with Article 33 (1) of the Company's by-laws and established at 15% of the remaining balance of the profit for each year, but the balance cannot exceed 10% of share capital. Reserve for the purchase of own shares - to be used for the purchase of the Company's own shares, to be canceled, held in treasury and/or sold, and established at 15% of the remaining balance of the profit for each year, but the balance cannot exceed 10% of share capital.
(ii)
(c)
Treasury stock Treasury stock comprises 1,965,074 preferred nominative shares, purchased at the average cost of R$ 3.0037 per share. The market value of the treasury stock, calculated at the closing date for the period, was R$ 5.902. According to article 168 (3) of Brazilian Corporation Law and CVM Instruction No. 390/03, the shares will be utilized to grant managers and employees share purchase options, pursuant to the Stock Option Plan approved by the Extraordinary General Meeting held on December 22, 2005.
20
21
Insurance coverage
As of September 30, 2013, the Company had insurance coverage against fire and other risks to the assets comprising the property, plant and equipment and inventory, at amounts deemed sufficient to cover any losses.
80
22
23
24
Revenue
The reconciliation between gross sales and net revenue is as follows:
Parent company 9/30/2013 Gross Sales Sales taxes and returns Net revenue 2,508,877 (500,566) 2,008,311 6/30/2012 2,182,999 (460,446) 1,722,553 9/30/2013 3,352,860 (615,774) 2,737,086 Consolidated 6/30/2012 2,956,529 (556,726) 2,399,803
81
25
Expenses by nature
Parent company 9/30/2013 Raw material and consumables Direct remuneration Management remuneration Employee profit sharing Depreciation and amortization charges Private pension plan expenses Other expenses Total Sales costs, distribution costs and administrative expenses 1,485,035 248,428 12,732 30,818 15,855 5,263 20,850 9/30/2012 1,280,111 208,931 13,137 28,754 16,501 7,218 8,901 9/30/2013 1,920,555 380,757 12,732 37,325 28,336 5,337 67,754 Consolidated 9/30/2012 1,680,622 321,014 13,137 34,168 27,272 7,218 75,234
1,818,981
1,563,553
2,452,796
2,158,665
26
Financial income
Parent company 9/30/2013 Financial revenue Interest and monetary earnings Interest on derivatives Income on short-term investments Exchange variance Exchange variance on derivatives Present value adjustment of accounts receivable 9/30/2012 9/30/2013 Consolidated 9/30/2012
Financial expenses Interest on loans and financing Exchange variance Exchange variance on derivatives Banks expenses Present value adjustment of accounts payable
(4,435)
27
(a)
82
Parent company 9/30/2013 Profit attributable to Marcopolo's shareholders From continuing operations Weighted average number of shares outstanding (in thousands) Earnings per share from continuing operations 214,808 9/30/2012 207,094 9/30/2013 216,726
894,935 0.2400
894,304 0.2316
894,935 0.2422
894,304 0.2328
(b)
Diluted
Diluted earnings per share are calculated by adjusting the weighted average number of common and preferred shares outstanding to assume conversion of all dilutive potential common shares. The Company considers as dilution effect of common and preferred shares, the exercise of share options by employees and management. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
Parent company 9/30/2013 Profit attributable to Marcopolo's shareholders From continuing operations Weighted average number of shares outstanding (in thousands) Adjustments: - Exercising of share call options Earnings per share from continuing operations 9/30/2012 9/30/2013
Consolidated 9/30/2012
214,808
207,094
216,726
208,221
83
28
The industrial segment produces bus bodies and spare parts. The financial segment is responsible for financing transactions through Banco Moneo.
Balance sheet
Consolidated 9/30/2013 Assets Current Cash and cash equivalent Financial assets stated at fair value Derivative financial instruments Credits Inventory Other accounts receivable 12/31/2012 Industrial Segment 9/30/2013 12/31/2012 Financial Segment 9/30/2013 12/31/2012
Non-current Long Term Credit Financial assets stated at fair value Other accounts receivable Investments Property, plant and equipment Goodwill and intangible
Total assets Liabilities Current Trade payables Loans and financing Derivative financial instruments Other accounts payable
4,212,545
84
Statement of Income
Consolidated 9/30/2013 Continued operations Net revenue from Sales and services Cost of goods sold and services provided Gross profit Operational expenses(income) Sales Administrative expenses Other net operating income (expenses) Equity in net income of subsidaries Operating profit before financial income and equity interest Financial income Financial revenue Financial expenses Profit before income and social contribution taxes Income and social contribution taxes Net income for the period from continuing operations
2,737,086 (2,199,080) 538,006 (133,450) (120,266) (7,746) 19,000 295,544 (2,149) 146,752 (148,901) 293,395 (76,669)
9/30/2012
2,399,803 (1,918,616) 481,187 (131,213) (108,836) (4,708) 26,032 262,462 28,920 163,682 (134,762) 291,382 (83,161)
9/30/2012
2,352,326 (1,918,616) 433,710 (128,291) (99,497) (3,302) 26,032 228,652 28,920 163,682 (134,762) 257,572 (69,007)
9/30/2012
47,477 47,477 (2,922) (9,339) (1,406) 33,810 33,810 (14,154)
216,726
208,221
199,519
188,565
17,207
19,656
85
29
216,726
208,221
199,519
188,565
17,207
19,656
(777) (777)
(212) (212)
Net increase (decrease) in cash and cash equivalent Cash and cash equivalent at beginning of the period Cash and cash equivalent at the end of the period
86
30
Consolidated financial statement and by segment, according to the new standards and interpretations.
Considering the implementation of IFRS10/CPC 36 (R3) and IFRS 11/CPC 19 (R2), the company is demonstrating the effects with and without adoption of these new standards over the consolidated financial statement for the period ended in September 30, 2013.
Balance sheet
Consolidated 9/30/2013
Adoption IFRS 10 and 11 No adoption IFRS 10 and 11
Assets Current Cash and cash equivalent Financial assets stated at fair value Derivative financial instruments Credits Inventory Other accounts receivable
Noncurrent Long Term Credit Other accounts receivable Investments Property, plant and equipment Goodwill and intangible
Total assets Liabilities Current Trade payables Loans and financing Derivative financial instruments Other accounts payable
4,212,545
87
Statement of Income
Consolidated 9/30/2013 Adoption No adoption IFRS 10 IFRS 10 and 11 and 11 Continued operations Net revenue from Sales and services Cost of goods sold and services provided Gross profit Operational expenses(income) Sales Administrative expenses Other net operating income (expenses) Equity in net income of subsidaries Operating profit before financial income and equity interest Financial income Financial revenue Financial expenses Profit before income and social contribution taxes Income and social contribution taxes Net income for the period from continuing operations 2,737,086 (2,199,080) 538,006 (133,450) (120,266) (7,746) 19,000 295,544 146,752 (148,901) 293,395 (76,669) 3,134,806 (2,530,651) 604,155 (153,056) (139,417) (6,778) 8,554 313,458 152,416 (164,939) 300,935 (84,209) Industrial segment 9/30/2013 Adoption No adoption IFRS 10 IFRS 10 and 11 and 11 2,697,198 (2,199,080) 498,118 (133,434) (109,778) (7,353) 19,000 266,553 146,752 (148,901) 264,404 (64,885) 3,094,918 (2,530,651) 564,267 (153,040) (128,929) (6,385) 8,554 284,467 152,416 (164,939) 271,944 (72,425) Financial segment 9/30/2013 Adoption No adoption IFRS 10 IFRS 10 and 11 and 11 39,888 39,888 (16) (10,488) (393) 28,991 28,991 (11,784) 39,888 39,888 (16 (10,488) (393) 28,991 28,991 (11,784)
216,726
216,726
199,519
199,519
17,207
17,207
88
31
Additional information
The industrial segment operates in the geographic areas listed below. The financial segment operates exclusively in Brazil.
(a)
(b)
89
32
Subsequent events
(a) Interest on shareholders' equity - 4th stage 2013.
According to minute of the Director's Board meeting occurred on November 4, 2013, at 11 o'clock the payment of interest on shareholders' equity has been approved - 4th stage 2013, at a rate of R$ 0.0175 for each representative share over the company's capital. These interests are to be added to the compulsory dividends (which will be previously declared) regarding the period of 2013. The value of the interests will be credited to the individual accounts of stockholders on December 24, 2013 based upon the stockholders' positions on December 23, 2013 and they shall start to be paid on March 31, 2014.
90
1 Shareholders of Marcopolo S.A. with over 5% of common shares and/or preferred shares, to the level of individuals, as of September 30, 2013:
SHAREHOLDER Paulo Pedro Bellini Valter Antonio Gomes Pinto Vate Part. e Adm. Ltda Davos Participaes Ltda Subtotal Controlling Group COMMON NUMBER % 149,390,864 43.73 32,047,224 9.38 10,086,520 2.95 32,000,000 9.37 223,524,608 65.43 PREFERRED NUMBER % 2,606,124 0.47 594,200 0.11 0.00 0.00 3,200,324 0.58 TOTAL NUMBER % 151,996,988 16.95 32,641,424 3.64 10,086,520 1.12 32,000,000 3.57 226,724,932 25.28
51,922,784 15.20 0.00 51,922,784 5.79 Fund. Central Bank CENTRUS 936,524 0.27 28,220,312 5.08 29,156,836 3.25 Jos Antonio Fernandes Martins Fund Petrobras Seg Soc Petros 0.00 92,683,154 16.69 92,683,154 10.33 Norges Bank (offshore) 10,000,000 2.93 28,572,465 5.15 38,572,465 4.30 0.00 15,962,400 2.87 15,962,400 1.78 BlackRock Inc (offshore) Treasury stock 0.00 1,965,074 0.35 1,965,074 0.22 Other offshore shareholders (*) 11,302,262 3.31 250,967,155 45.20 262,269,417 29.24 Other shareholders (*) 43,939,566 12.86 133,703,456 24.08 177,643,022 19.81 TOTAL 341,625,744 100.00 555,274,340 100.00 896,900,084 100.00 PROPORTION 38.09 61.91 100.00 * There are no individual shareholders in this item with more than 5% of the common and/or preferred shares. 2 Capital Breakdown of Davos Participao Ltda. as of September 30, 2013: Table denoting quotas: SHAREHOLDER
QUOTAS NUMBER FACE VALUE Paulo Pedro Bellini 4,120,000 4,120,000 James Eduardo Bellini 4,120,000 4,120,000 Mauro Gilberto Bellini 4,120,000 4,120,000 Valter Antonio Gomes Pinto 4,120,000 4,120,000 Viviane Maria Pinto Bado 4,120,000 4,120,000 TOTAL 20,600,000 20,600,000
3 Capital Breakdown of Vate - Participaes e Administrao Ltda. as of September 30, 2013: Table denoting quotas: SHAREHOLDER Valter Antonio Gomes Pinto Therezinha Lourdes Comerlato Pinto Viviane Maria Pinto TOTAL
QUOTAS NUMBER FACE VALUE 6,303,669 6,303,669 770,968 770,968 68,150 68,150 7,142,787 7,142,787
91
(A free translation of the original in Portuguese) 4 Quantity and features of the securities issued by the company owned by the groups Controlling Shareholders, Executives, Members of the Audit Committee and free float. Consolidated Shareholdings of Controlling Shareholders, Executives and free float. Position at 9/30/2013 Table denoting shares: SHAREHOLDER
COMMON PREFERRED TOTAL NUMBER % NUMBER % NUMBER % Parent companies 223,524,608 65.43 3,200,324 0.58 226,724,932 25.28 Controllers spouses 1,498,480 0.44 1,638,132 0.30 3,136,612 0.35 Executives 82,824 0.02 1,760,832 0.32 1,843,656 0.21 Board of Directors 506,600 0.15 2,165,826 0.39 2,672,426 0.30 Executive Board Audit Committee (*) 504,696 0.15 758,760 0.14 1,263,456 0.14 Treasury stock 0.00 1,965,074 0.35 1,965,074 0.22 Other 115,508,536 33.81 543,785,392 97.92 659,293,928 73.50 TOTAL 341,625,744 100.00 555,274,340 100.00 896,900,084 100.00 Free Float in the Market 115,508,536 33.81 543,785,392 97.92 659,293,928 73.50 * Shares held by a director and member of the audit committee, elected by the controlling group.
Consolidated Shareholdings of Controlling Shareholders, Executives and free float. Position at 9/30/2012 Table denoting shares: SHAREHOLDER Parent companies Controllers spouses Executives Board of Directors Executive Board Audit Committee (*) Treasury stock Other TOTAL
TOTAL % NUMBER 0.58 226,724,932 0.30 0.32 0.44 0.14 0.47 3,115,812 1,843,656 2,957,398 1,263,456 2,596,480
97.75 658,398,350
341,625,744 100.00
Free Float in the Market 115,529,336 33.82 542,869,014 97.75 658,398,350 73.40 * Shares held by a director and member of the audit committee, elected by the controlling group. NOTE: For comparison purposes, the shares in this table were subsidized according to bonus of August 2013. 5 The Company is bound to arbitration at the commercial Arbitration Chamber, as per the arbitration clause in its bylaws.
92
Introduction
We have reviewed the interim, individual and consolidated financial statements of the company Marcopolo S.A. (Company), contained in the Quarterly Information Fo rm - ITR for the quarter ended September 30, 2013, consisting of the balance sheets as of September 30, 2013 and the related statements of income, the comprehensive statements of income for the three-month and nine-month periods then ended, the statement of changes in shareholders equity and statements of cash flows for the nine-month period then ended, in addition to the notes to the financial statements. Management is responsible for preparing the individual interim financial statements in accordance with CPC Technical Pronouncement 21 (R1) - Interim reporting and the consolidated interim financial statements in accordance with CPC 21 (R1) and IAS 34 Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, for presenting this information in due accordance with the standards issued by the Brazilian Securities Commission that apply to the preparation of Quarterly Information - ITR. Our responsibility is to express an opinion on the interim financial statements based on review. Review scope We conducted our review in accordance with Brazilian and international standards for reviewing interim 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 information consists of making inquiries, primarily to the individuals in charge of financial and accounting matters, and applying analytical and other review procedures. A review is substantially shorter in scope than a full audit conducted in accordance with audit standards, and we cannot therefore provide an assurance that we have discovered all the significant matters that could have been identified by an audit. We are not therefore expressing an audit opinion. Conclusion about the individual interim information Our review did not detect any facts that suggest the individual interim financial statements were not prepared, in all material aspects, in accordance with CPC 21 (R1) that applies to Quarterly Information - ITR, presented in accordance with the standards issued by the Brazilian Securities Commission - CVM. Conclusion about the consolidated interim information Our review did not detect any facts that suggest the consolidated interim financial information included in the aforesaid quarterly information was not prepared, in all material aspects, in accordance with CPC 21 (R1) and IAS 34 that applies to Quarterly Information - ITR, presented in accordance with the standards issued by the Brazilian Securities Commission - CVM. Emphasis Restatement of corresponding figures As mentioned in Note 2.2.1, due to changes in accounting policies adopted by the Company in 2013, the corresponding figures for the year ended December 31, 2012 and the interim financial information for September 30, 2012 presented for comparative purposes were adjusted and are being restated as required by CPC 23 - Accounting Policies, changes in Accounting Estimates and Errors. Our conclusion does not contain changes related to this subject.
93
(A free translation of the original in Portuguese) Other matters Statements of added value We have also reviewed the individual and consolidated Statements of added value (DVA) for the nine-month period ended September 30, 2013, prepared by Company management, the presentation of which in the interim information is required by the standards issued by the CVM - Brazilian Securities Commission applicable to the preparation of the Quarterly Information - ITR and is considered supplementary information to IFRS which does not require the publication of DVAs. These statements were subject to the audit procedures described earlier and our review did not detect any facts that suggest they have not been prepared, in all material respects, in accordance with the individual and consolidated interim financial statements.
94