ITR -Quarterly Information - 06/30/2015 - WEG S/A
Version : 1
Contents
Company information
Composition of capital
1
Cash dividends
2
Individual financial statements
Balance sheet - Assets
3
Balance sheet - Liabilities and equity
4
Income statements
5
Statement of comprehensive income
6
Cash flow statement
7
Statement of changes in equity
Statements of changes in equity - 01/01/2015 to 06/30/2015
8
Statements of changes in equity - 01/01/2014 to 06/30/2014
9
Statements of value added
10
Consolidated financial statements
Balance sheet - Assets
11
Balance sheet - Liabilities and equity
12
Income statement
13
Statement of comprehensive income
14
Cash flow statement
15
Statement of changes in equity
Statements of changes in equity - 01/01/2015 to 06/30/2015
16
Statements of changes in equity - 01/01/2014 to 06/30/2014
17
Statements of value added
18
Comments on performance
19
Notes to financial statements
28
Opinions and Statements
Special Review Report – Unqualified
50
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Company information / Composition of capital
Number of shares
(Units)
Quarterly ended
06/30/2015
Paid-in capital
Common
Preferred
Total
1,614,353,076
0
1,614,353,076
Treasury stock
Common
Preferred
Total
1,035,332
0
1,035,332
1
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Company information / Cash dividends
Event
Approval
Earning
First payment
Type of share
Class of share Earnings per share (Reais / Share)
Board of Directors’
Meeting
03/24/2015
Interest on equity
08/12/2015
Common
0.07100
Board of Directors’
Meeting
06/23/2015
Interest on equity
08/12/2015
Common
0.04200
2
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Individual financial statements / Balance sheet Assets
(In thousands of reais)
Account
code
Account description
Current quarter
06/30/2015
Prior year
12/31/2014
1
1.01
Total assets
5,578,140
5,180,037
Current assets
1,102,092
1,023,924
1.01.01
Cash and cash equivalents
1.01.01.01
Cash and banks
953,190
886,700
32
24
1.01.01.02
1.01.02
Short-term investments
953,158
886,676
Long-term investments
30,320
57,699
1.01.06
Taxes recoverable
12,030
8,948
1.01.06.01
Current taxes recoverable
12,030
8,948
1.01.08
Other current assets
106,552
70,577
1.01.08.03
Other
106,552
70,577
1.01.08.03.01
Dividends
18,127
2,453
1.01.08.03.02
Interest on equity
1.02
Noncurrent assets
1.02.01
Long-term receivables
1.02.01.06
Deferred taxes
1.02.01.06.01
Deferred income and contribution taxes
1.02.01.08
1.02.01.08.02
88,425
68,124
4,476,048
4,156,113
8,530
3,987
492
557
492
557
Credits with related parts
1
-
Credits with subsidiaries
1
-
1.02.01.09
Other noncurrent assets
8,037
3,430
1.02.01.09.03
Judicial deposits
8,037
3,430
1.02.02
Investments
4,462,863
4,147,413
1.02.02.01
Equity interest
4,462,863
4,147,413
1.02.02.01.02
Investments in subsidiaries
4,462,863
4,147,413
1.02.03
Property, plant and equipment
4,655
4,713
1.02.03.01
Property, plant and equipment in use
4,655
4,713
4
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Individual financial statements / Balance sheet
Liabilities and equity
(In thousands of reais)
Account
code
2
2.01
2.01.01
2.01.01.01
2.01.03
2.01.03.01
2.01.03.01.01
2.01.03.01.02
2.01.05
2.01.05.02
2.01.05.02.01
2.01.05.02.04
2.02
2.02.02
2.02.02.01
2.02.02.01.02
2.02.04
2.03
2.03.01
2.03.02
2.03.02.04
2.03.02.07
2.03.03
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
2.03.06.01
2.03.07
Account description
Total liabilities
Current liabilities
Labor and social charges
Social obligations
Tax obligations
Federal tax obligations
Income and social contribution taxes payable
Other taxes payables
Other payables
Other
Dividends and interest on equity capital payable
Other
Noncurrent liabilities
Other liabilities
Related parties liabilities
Debt with subsidiaries
Provisions
Equity
Paid-in capital
Capital reserves
Options granted
Premium on capital transaction
Revaluation reserve
Income reserve
Legal reserve
Statutory reserve
Additional proposed dividends
Treasury stock
Retained earnings/accumulated losses
Equity valuation adjustments
Deemed cost
Cumulative translation adjustments
Current quarter
06/30/2015
5,578,140
145,709
5,633
5,633
11,808
11,808
65
11,743
128,268
128,268
127,091
1,177
4,240
0
0
0
4,240
5,428,191
3,533,973
(58,054)
1,869
(59,923)
3,599
803,844
47,736
630,929
133,904
(8,725)
257,869
517,561
517,561
369,399
Prior year
12/31/2014
5,180,037
118,793
4,090
4,090
9,336
9,336
95
9,241
105,367
105,367
104,174
1,193
4,859
873
873
873
3,986
5,056,385
3,533,973
(59,139)
1,817
(60,956)
3,658
837,741
47,736
630,929
167,494
(8,418)
548,750
548,750
191,402
4
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Individual financial statements / Income statement
(In thousands of reais)
Account
code
3.04
3.04.02
3.04.02.01
3.04.02.02
3.04.05
3.04.06
3.05
3.06
3.06.01
3.06.02
3.07
3.08
3.08.01
3.08.02
3.09
3.11
3.99
3.99.01
3.99.01.01
3.99.02
3.99.02.01
Account description
Operating income/expenses
General and administrative expenses
Management fees
Other expenses
Other operating expenses
Equity pick-up
Income before financial income (expenses) and taxes
Financial income (expenses)
Financial income
Financial expenses
Income before income taxes
Income and social contribution taxes
Current
Deferred
Net income from continuous operations
Income/ loss for the period
Earnings per share - (Reais/share)
Basic earnings per share
Common shares
Diluted earnings per share
Common shares
Current quarter
04/01/2015 to 06/30/2015
Current period
01/01/2015 to 06/30/2015
Prior quarter
04/01/2014 to 06/30/2014
Prior period
01/01/2014 to 06/30/2014
237,143
(890)
(532)
(358)
(1,053)
239,086
237,143
24,138
24,182
(44)
261,281
(400)
(316)
(84)
260,881
260,881
460,728
(1,971)
(1,061)
(910)
(1,714)
464,413
460,728
46,642
46,724
(82)
507,370
(630)
(565)
(65)
506,740
506,740
209,024
(797)
(472)
(325)
(467)
210,288
209,024
19,129
19,164
(35)
228,153
(168)
(157)
(11)
227,985
227,985
396,245
(1,615)
(960)
(655)
(1,217)
399,077
396,245
37,083
37,157
(74)
433,328
(456)
(378)
(78)
432,872
432,872
0.16170
0.31410
0.14132
0.26834
0.16160
0.31388
0.14120
0.26813
5
ITR – Quarterly Information – 06/30/2015– WEG S/A
Version: 1
Individual financial statements / Statement of comprehensive income
(In thousands of reais)
Account
code
4.01
4.02
4.02.01
4.03
Account description
Net income for the period
Other comprehensive income
Cumulative translation adjustments
Comprehensive income for the period
Current quarter
04/01/2015 to 06/30/2015
260,881
(57,019)
(57,019)
203,862
Current period
Prior quarter
01/01/2015 to 06/30/2015 04/01/2014 to 06/30/2014
506,740
177,997
177,997
684,737
227,985
(31,941)
(31,941)
196,044
Prior period
01/01/2014 to 06/30/2014
432,872
(85,559)
(85,559)
347,313
6
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Individual financial statements / Cash flow statements - indirect method
(In thousands of reais)
Account
code
6.01
6.01.01
6.01.01.01
6.01.01.02
6.01.01.03
6.01.01.04
6.01.02
6.01.02.01
6.01.02.02
6.01.02.03
6.01.03
6.02
6.02.02
6.02.03
6.03
6.03.01
6.03.03
6.05
6.05.01
6.05.02
Account description
Net cash flows from operating activities
Cash from operations
Income before taxes
Depreciation, amortization and depletion
Equity pickup
Expenses plan options purchase shares
Changes in assets and liabilities
Increase (decrease) in accounts receivable
Increase (decrease) in accounts payable
Income and social contribution taxes paid
Other
Net cash flows from investing activities
Dividends and interest on equity capital received
Long-term financial investments
Net cash from financing activities
Dividends/interest on equity capital paid
Treasury shares
Increase/(decrease) in cash and cash equivalents
Opening cash and cash equivalents balance
Closing cash and cash equivalents balance
Current period
01/01/2015 to 06/30/2015
Prior period
01/01/2014 to 06/30/2014
32,790
43,441
507,370
58
(464,413)
426
(11,684)
(13,466)
2,378
(596)
1,033
269,220
241,841
27,379
(235,520)
(235,213)
(307)
66,490
886,700
953,190
27,908
34,557
433,328
58
(399,077)
248
(7,262)
(7,344)
433
(351)
613
196,853
251,418
(54,565)
(247,445)
(247,768)
323
(22,684)
870,906
848,222
7
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Individual financial statements / Statement of changes in equity - 01/01/2015 to 06/30/2015
(In thousands of reais)
Account
code
5.01
5.03
5.04
5.04.03
5.04.04
5.04.05
5.04.07
5.05
5.05.01
5.05.02
5.05.02.04
5.05.02.06
5.06
5.06.02
5.06.04
5.06.05
5.07
Account description
Opening balances
Adjusted opening balances
Capital transactions with shareholders
Recognized options granted
Treasury shares acquired
Sold treasury shares
Interest on equity capital
Total comprehensive income
Net income for the period
Other comprehensive income
Translation adjustments in the period
Realization of deemed cost
Internal changes in equity
Realization of resoluction reserve
Dividends paid
Dividends prescribed
Closing balances
Paid-in
capital
3,533,973
3,533,973
3,533,973
Capital reserves,
Options granted and
Treasury stock
(55,481)
(55,481)
1,085
52
1,033
(59)
(59)
(54,455)
Income reserves
670,247
670,247
(307)
(1,334)
1,027
669,940
Retained earnings/
accumulated losses
167,494
167,494
(146,537)
(388)
(146,149)
537,929
506,740
31,189
31,189
(167,113)
59
(167,494)
322
391,773
Other comprehensive
income
740,152
740,152
146,808
146,808
177,997
(31,189)
886,960
Equity
5,056,385
5,056,385
(145,759)
(336)
(1,334)
2,060
(146,149)
684,737
506,740
177,997
177,997
(167,172)
(167,494)
322
5,428,191
8
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Individual financial statements / Statement of changes in equity - 01/01/2014 to 06/30/2014
(In thousands of reais)
Account
code
5.01
5.03
5.04
5.04.01
5.04.03
5.04.05
5.04.07
5.04.08
5.05
5.05.01
5.05.02
5.05.02.04
5.05.02.06
5.06
5.06.02
5.06.04
5.06.05
5.07
Account description
Opening balances
Adjusted opening balances
Capital transactions with shareholders
Capital increase
Recognized options granted
Sold treasury shares
Interest on equity capital
Premium on capital transaction
Total comprehensive income
Net income for the period
Other comprehensive income
Translation adjustments in the period
Realization of deemed cost
Internal changes in equity
Realization of revaluation reserve
Dividends paid
Dividends prescribed
Closing balances
Paid-in
capital
2,718,440
2,718,440
815,533
815,533
3,533,973
Capital reserves,
Options granted and
Treasury stock
(54,012)
(54,012)
(2,128)
248
323
(2,699)
(25)
(25)
(56,165)
Income
reserves
1,005,903
1,005,903
(815,000)
(815,533)
533
190,903
Retained earnings/
accumulated losses
163,174
163,174
(108,795)
(35)
(108,760)
453,476
432,872
20,604
20,604
(162,797)
25
(163,174)
352
345,058
Other comprehensive
income
724,267
724,267
(106,163)
(106,163)
(85,559)
(20,604)
618,104
Equity
4,557,772
4,557,772
(110,390)
213
856
(108,760)
(2,699)
347,313
432,872
(85,559)
(85,559)
(162,822)
(163,174)
352
4,631,873
9
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Individual financial statements / Statement of value added
(In thousands of reais)
Account
code
7.02
7.02.02
7.02.03
7.03
7.04
7.04.01
7.05
7.06
7.06.01
7.06.02
7.07
7.08
7.08.01
7.08.01.01
7.08.01.02
7.08.01.03
7.08.02
7.08.02.01
7.08.03
7.08.03.01
7.08.04
7.08.04.01
7.08.04.03
Account description
Inputs purchased from third-parties
Materials, electricity, third party services and other
Loss/recovery of amounts receivable
Gross value added
Withholdings
Depreciation, amortization and depletion
Net value added produced
Value added received in transfer
Equity pick-up
Financial income
Total value added to be distributed
Distribution of value added
Personnel
Direct compensation
Benefits
Unemployment Compensation Fund (FGTS)
Taxes, charges and contributions
Federal
Third-party capital remuneration
Interest
Equity remuneration
Interest on equity capital
Retained profit/loss for the period
Current period
01/01/2015 to 06/30/2015
Prior period
01/01/2014 to 06/30/2014
(896)
(211)
(685)
(896)
(58)
(58)
(954)
511,137
464,413
46,724
510,183
510,183
2,463
2,362
40
61
904
904
76
76
506,740
146,149
360,591
(578)
27
(605)
(578)
(58)
(58)
(636)
436,234
399,077
37,157
435,598
435,598
2,058
1,983
35
40
597
597
71
71
432,872
108,760
324,112
10
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Consolidated financial statements / Balance Sheet - Assets
(In thousand of reais)
Account
code
1
1.01
1.01.01
1.01.01.01
1.01.01.02
1.01.02
1.01.03
1.01.03.01
1.01.04
1.01.06
1.01.06.01
1.01.08
1.01.08.03
1.02
1.02.01
1.02.01.01
1.02.01.01.01
1.02.01.06
1.02.01.06.01
1.02.01.09
1.02.01.09.03
1.02.01.09.04
1.02.01.09.05
1.02.02
1.02.02.01
1.02.02.01.04
1.02.02.02
1.02.03
1.02.03.01
1.02.04
1.02.04.01
1.02.04.01.02
1.02.04.02
Account description
Total assets
Current assets
Cash and cash equivalents
Cash and banks
Short-term investments
Long-term investments
Trade accounts receivable
Clients
Inventories
Taxes recoverable
Current taxes recoverable
Other current assets
Other
Noncurrent assets
Long-term receivables
Short-term investments at fair value
Trading securities
Deferred taxes
Deferred income and social contribution taxes
Other noncurrent assets
Judicial deposits
Taxes recoverable
Other
Investments
Equity interests
Other equity interests
Investment properties
Property, plant and equipment
Property, plant and equipment in use
Intangible assets
Intangible assets
Other
Goodwill
Current quarter
06/30/2015
13,121,290
9,157,900
3,771,495
374,017
3,397,478
938,866
2,050,968
2,050,968
1,954,542
214,644
214,644
227,385
227,385
3,963,390
186,772
0
0
77,962
77,962
108,810
54,828
18,017
35,965
1,379
1,379
1,379
0
3,030,429
3,030,429
744,810
96,516
96,516
648,294
Prior year
12/31/2014
11,782,630
8,098,187
3,328,015
302,346
3,025,669
865,162
1,867,864
1,867,864
1,704,919
159,446
159,446
172,781
172,781
3,684,443
126,670
1,047
1,047
55,864
55,864
69,759
44,394
19,221
6,144
8,224
1,004
1,004
7,220
2,877,942
2,877,942
671,607
81,317
81,317
590,290
11
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Consolidated financial statements / Balance Sheet - Liabilities and equity
(In thousand of reais)
Account
code
2
2.01
2.01.01
2.01.01.01
2.01.02
2.01.03
2.01.03.01
2.01.03.01.01
2.01.03.01.02
2.01.04
2.01.04.01
2.01.05
2.01.05.02
2.01.05.02.01
2.01.05.02.04
2.01.05.02.05
2.01.05.02.06
2.02
2.02.01
2.02.01.01
2.02.02
2.02.02.02
2.02.02.02.03
2.02.02.02.04
2.02.03
2.02.03.01
2.02.04
2.03
2.03.01
2.03.02
2.03.02.04
2.03.02.07
2.03.03
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
2.03.06.01
2.03.07
2.03.09
Account description
Total liabilities
Current liabilities
Labor and social charges
Social obligations
Trade accounts payable
Tax obligations
Federal tax obligations
Income and social contribution taxes payable
Other
Loans and financing
Loans and financing
Other payables
Other
Dividends and interest on equity capital payable
Advance from clients
Profit sharing
Other
Noncurrent liabilities
Loans and financing
Loans and financing
Other payables
Other
Tax obligations
Other
Deferred taxes
Deferred income and social contribution taxes
Provisions
Consolidated equity
Paid-in capital
Capital reserves
Options granted
Premium on capital transaction
Revaluation reserve
Income reserves
Legal reserve
Statutory reserve
Additional proposed dividends
Treasury stock
Retained earnings/accumulated losses
Equity valuation adjustments
Deemed cost
Cumulative translation adjustments
Noncontrolling interest
Current quarter
06/30/2015
13,121,290
4,135,593
269,395
269,395
549,136
120,338
120,338
42,681
77,657
2,026,159
2,026,159
1,170,565
1,170,565
143,964
493,456
91,738
441,407
3,446,018
2,729,895
2,729,895
124,982
124,982
8,709
116,273
298,680
298,680
292,461
5,539,679
3,533,973
(58,054)
1,869
(59,923)
3,599
803,844
47,736
630,929
133,904
(8,725)
257,869
517,560
517,560
369,400
111,488
Prior year
12/31/2014
11,782,630
3,380,815
173,382
173,382
445,577
148,335
148,335
84,714
63,621
1,466,752
1,466,752
1,146,769
1,146,769
111,707
590,815
111,173
333,074
3,262,552
2,625,398
2,625,398
95,316
95,316
9,011
86,305
282,989
282,989
258,849
5,139,263
3,533,973
(59,139)
1,817
(60,956)
3,658
837,741
47,736
630,929
167,494
(8,418)
548,750
548,750
191,402
82,878
12
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Consolidated financial statements / Income
Statement
(In thousand of reais)
Account
code
3.01
3.02
3.03
3.04
3.04.01
3.04.02
3.04.02.01
3.04.02.02
3.04.04
3.04.05
3.05
3.06
3.06.01
3.06.02
3.07
3.08
3.08.01
3.08.02
3.09
3.11
3.11.01
3.11.02
3.99
3.99.01
Account description
3.99.01.01
Common shares
3.99.02
Diluted earnings per share
3.99.02.01
Common shares
Revenue from sale of products and/or services
Cost of goods sold and/or services rendered
Gross profit
Operating income/expenses
Selling expenses
General and administrative expenses
Management fees
Other administrative expenses
Other operating income
Other operating expenses
Income before financial results and taxes
Financial results
Financial income
Financial expenses
Income before income taxes
Income and social contribution taxes
Current
Deferred
Net income from continuous operations
Consolidated Income/ loss for the period
Attributed to shareholders of parent company
Attributed to non-controlling shareholders
Earnings per share - (Reais/share)
Basic earnings per share
Prior quarter
04/01/2014 to 06/30/2014
Prior period
01/01/2014 to 06/30/2014
2,349,432
(1,677,705)
671,727
(397,090)
(236,201)
(108,028)
(5,336)
(102,692)
2,940
(55,801)
274,637
53,472
18,198
35,274
328,109
(64,891)
(48,468)
(16,423)
263,218
263,218
260,881
2,337
Current period
01/01/2015 to 06/30/2015
4,479,723
(3,169,373)
1,310,350
(761,651)
(443,036)
(214,369)
(10,894)
(203,475)
6,451
(110,697)
548,699
95,151
537,826
(442,675)
643,850
(129,835)
(124,790)
(5,045)
514,015
514,015
506,740
7,275
1,821,547
(1,244,222)
577,325
(326,086)
(191,300)
(96,418)
(4,934)
(91,484)
1,739
(40,107)
251,239
32,349
142,242
(109,893)
283,588
(55,493)
(53,088)
(2,405)
228,095
228,095
227,985
110
3,605,090
(2,457,344)
1,147,746
(655,669)
(387,961)
(185,121)
(9,748)
(175,373)
3,585
(86,172)
492,077
60,828
295,084
(234,256)
552,905
(117,479)
(123,757)
6,278
435,426
435,426
432,872
2,554
0.16170
0.31410
0.14132
0.26834
0.16160
0.31388
0.14120
0.26813
Current quarter
04/01/2015 to 06/30/2015
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Version: 1
Consolidated financial statements / Statement of comprehensive income
(In thousand of reais)
Current quarter
04/01/2015 to 06/30/2015
Current period
01/01/2015 to 06/30/2015
Prior quarter
04/01/2014 to 06/30/2014
Prior period
01/01/2014 to 06/30/2014
Consolidated net income for the period
263,218
514,015
228,095
435,426
Other comprehensive income
(57,347)
177,655
(31,911)
(85,908)
(31,911)
(85,908)
Account
code
Account description
4.01
4.02
4.02.01
Adjustment of conversion period
(57,347)
177,655
4.03
Consolidated comprehensive income for the period
205,871
691,670
196,184
349,518
203,862
684,737
196,044
347,313
4.03.01
Attributed to shareholders of parent company
4.03.02
Attributed to noncontrolling shareholders
2,009
6,933
140
2,205
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Version: 1
Consolidated financial statements / Cash flow statement - Indirect method
(In thousand of reais)
Account
code
6.01
6.01.01
6.01.01.01
6.01.01.02
6.01.01.04
6.01.01.05
6.01.01.06
6.01.01.07
6.01.01.08
6.01.01.09
6.01.01.10
6.01.01.11
6.01.02
6.01.02.01
6.01.02.02
6.01.02.03
6.01.02.04
6.01.02.05
6.01.03
6.02
6.02.01
6.02.02
6.02.03
6.02.04
6.02.05
6.02.06
6.02.07
6.02.08
6.02.09
6.03
6.03.01
6.03.02
6.03.03
6.03.04
6.03.05
6.05
6.05.01
6.05.02
Account description
Net cash from operating activities
Cash from operations
Income before taxes
Depreciation, amortization and depletion
Employee profit sharing
Expenses plan options purchase shares
Provision for credit risk
Provision for tax, civil and labor liabilities
Provision for inventory losses
Provision for product warranty
Low of noncurrent assets
Accrued interest on loans and financing
Changes in assets and liabilities
Increase (decrease) in accounts receivable
Increase (decrease) in accounts payable
Increase (decrease) in inventories
Income and social contribution taxes paid
Employee profit sharing paid
Other
Net cash from investing activities
Property, plant and equipment
Intangible assets
Receive sale of fixed assets
Cumulative translation adjustments
Long-term investments
Premium on capital transaction
Acquisition of subsidiary
Acquisition of noncontrolling
Cash acquired from subsidiary
Net cash from financing activities
Loans and financing obtained
Payment of loans and financing
Interest paid on loans and financing
Treasury shares
Dividends/interest on equity capital paid
Increase (decrease) in cash and cash equivalents
Opening cash and cash equivalents balance
Closing cash and cash equivalents balance
Current period
01/01/2015 to 06/30/2015
321,604
1,035,447
643,850
151,811
85,529
426
7,787
33,612
19,586
14,590
2,237
76,019
(732,397)
(415,788)
192,853
(238,457)
(166,823)
(104,182)
18,554
(229,492)
(221,396)
(17,344)
11,823
163,853
(72,657)
0
(97,500)
0
3,729
351,368
1,031,414
(333,351)
(120,515)
(307)
(225,873)
443,480
3,328,015
3,771,495
Prior period
01/01/2014 to 06/30/2014
707,999
833,811
552,905
119,066
71,504
248
2,955
7,730
245
5,021
1,364
72,773
(131,280)
110,039
78,717
(68,663)
(156,338)
(95,035)
5,468
(454,394)
(158,315)
(8,708)
4,195
(85,559)
(75,755)
(2,699)
(136,528)
(5,947)
14,922
(341,539)
385,963
(422,998)
(83,101)
323
(221,726)
(87,934)
3,373,799
3,285,865
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Version: 1
Consolidated financial statements / Statement of changes in equity - 01/01/2015 to 06/30/2015
(In thousand of reais)
Capital reserves,
Paid-in
capital Options granted and
Treasury stock
3,533,973
(55,481)
3,533,973
(55,481)
1,085
52
1,033
Account
code
5.01
5.03
5.04
5.04.03
5.04.04
5.04.05
Account description
5.04.07
5.04.09
5.05
5.05.01
5.05.02
5.05.02.04
5.05.02.06
5.06
5.06.02
5.06.04
5.06.05
5.07
Interest on equity
Other
Total comprehensive income
Net income for the period
Other comprehensive income (losses)
Adjustment of translation for the period
Realization at deemed cost
Internal changes in equity
Realization of revaluation reserve
Dividends paid
Dividends prescribed
Closing balances
3,533,973
Opening balances
Adjusted opening balances
Capital transactions with shareholders
Recognized options granted
Treasury Shares Acquired
Sold treasury shares
(59)
(59)
(54,455)
Income
reserves
670,247
670,247
(307)
(1,334)
1,027
669,940
Other
Retained earnings/ comprehensive
accumulated losses
income
167,494
740,152
167,494
740,152
(146,537)
(388)
(146,149)
537,929
506,740
31,189
31,189
(167,113)
59
(167,494)
322
391,773
146,808
146,808
177,997
(31,189)
886,960
Equity
5,056,385
5,056,385
(145,759)
(336)
(1,334)
2,060
(146,149)
684,737
506,740
177,997
177,997
(167,172)
(167,494)
322
5,428,191
Non-controlling Consolidated
interest
equity
82,878
5,139,263
82,878
5,139,263
21,677
(124,082)
(336)
(1,334)
2,060
(1,508)
23,185
6,933
7,275
(342)
(342)
111,488
(147,657)
23,185
691,670
514,015
177,655
177,655
(167,172)
(167,494)
322
5,539,679
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Version: 1
Consolidated financial statements / Statement of changes in equity - 01/01/2014 to 06/30/2014
(In thousand of reais)
Opening balances
Adjustment opening balances
Capital transactions with shareholders
Increase of capital
Recognized options granted
Sold treasury shares
Dividends
Interest on equity
Goodwill on capital transaction
Other
Total comprehensive income
Net income for the period
Other comprehensive income (losses)
Adjustments of Translation for the period
Realization of deemed cost
Internal changes in equity
Realization of revaluation reserve
Dividends paid
Dividends prescribed
Paid-in
capital
2,718,440
2,718,440
815,533
815,533
-
Capital
reserves,
Options granted
and Treasury
stock
(54,012)
(54,012)
(2,128)
248
323
(2,699)
(25)
(25)
-
Closing balances
3,533,973
(56,165)
Account description
Account
code
5.01
5.03
5.04
5.04.01
5.04.03
5.04.05
5.04.06
5.04.07
5.04.08
5.04.09
5.05
5.05.01
5.05.02
5.05.02.04
5.05.02.06
5.06
5.06.02
5.06.04
5.06.05
5.07
Income
Retained earnings/
reserves
accumulated
losses
1,005,903
163,174
1,005,903
163,174
(815,000)
(108,795)
(815,533)
(35)
533
(108,760)
453,476
432,872
20,604
20,604
(162,797)
25
(163,174)
352
190,903
345,058
Other
comprehensive
income
724,267
724,267
(106,163)
(106,163)
(85,559)
(20,604)
-
Equity
4,557,772
4,557,772
(110,390)
213
856
(108,760)
(2,699)
347,313
432,872
(85,559)
(85,559)
(162,822)
(163,174)
352
Non-controlling
interest
84,495
84,495
(10,834)
(222)
(1,550)
(9,062)
2,205
2,554
(349)
(349)
-
Consolidated
equity
4,642,267
4,642,267
(121,224)
213
856
(222)
(110,310)
(2,699)
(9,062)
349,518
435,426
(85,908)
(85,908)
(162,822)
(163,174)
352
618,104
4,631,873
75,866
4,707,739
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Version: 1
Consolidated financial statements / Statement of value added
(In thousand of reais)
Account
code
7.01
7.01.01
7.01.02
7.01.04
7.02
7.02.02
7.02.03
7.03
7.04
7.04.01
7.05
7.06
7.06.02
7.07
7.08
7.08.01
7.08.01.01
7.08.01.02
7.08.01.03
7.08.02
7.08.02.01
7.08.02.02
7.08.02.03
7.08.03
7.08.03.01
7.08.03.02
7.08.04
7.08.04.01
7.08.04.03
7.08.04.04
Account description
Revenues
Sales of goods, products and services
Other revenues
Set up/Reversal of allowance for doubtful accounts
Inputs purchased from third parties
Materials, electricity, third party services and other
Loss/recovery of amounts receivable
Gross value added
Withholdings
Depreciation, amortization and depletion
Net value added produced
Value added received in transfer
Financial income
Total value added to be distributed
Distribution of value added
Personnel
Direct compensation
Benefits
Unemployment Compensation Fund (FGTS)
Taxes, charges and contributions
Federal
State
Municipal
Remuneration of third-party’s capital
Interest
Rental
Equity capital remuneration
Interest on equity capital
Retained profit/loss for the period
Noncontrolling interest in retained profits
Current period
01/01/2015 to 06/30/2015
5,082,968
5,077,115
7,769
(1,916)
(2,847,607)
(2,829,672)
(17,935)
2,235,361
(151,811)
(151,811)
2,083,550
537,826
537,826
2,621,376
2,621,376
994,584
858,193
95,267
41,124
651,799
595,678
50,907
5,214
460,978
441,646
19,332
514,015
146,149
360,591
7,275
Prior period
01/01/2014 to 06/30/2014
4,169,906
4,172,536
2,580
(5,210)
(2,234,783)
(2,226,222)
(8,561)
1,935,123
(119,066)
(119,066)
1,816,057
295,084
295,084
2,111,141
2,111,141
853,766
733,908
82,100
37,758
571,020
508,354
57,784
4,882
250,929
232,554
18,375
435,426
108,760
324,112
2,554
18
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Performance comments
Highlights




Net operating revenues in the second quarter of 2015 reached R$ 2,349.4 million, for 29.0% growth over
the 2Q14 and 10.3% growth over the 1Q15;;
EBITDA reached R$ 352.1 million and EBITDA margin reached 15.0%. In relation to the same quarter
last year EBITDA grew by 13.0%, while compared to the previous quarter there was growth of 1.1%;
Net income totaled R$ 260.9 million, with net margin of 11.1% and growth of 14.4% over the 2Q14 and
growth of 6.1% over the 1Q15;
Investments in fixed assets totaled R$ 202.5 million in the first half of 2015, being 59% in industrial plants
in Brazil and 41% in expansion projects abroad.
Key Figures
(R$ Thousands)
Economic Activity and Industrial Production
The first half of 2015 showed few changes in global economic activity, which continued recovering at a gradual
pace and with significant differences in the various geographies. The purchasing managers indexes (PMI), used
as industrial activity indicators, showed recovery in the US, reverting the slowdown noticed during the northern
hemisphere winter. Germany has consistently posted PMI readings above 50, indicating activity expansion, since
November 2014. China, on the other hand, confirmed this quarter the activity slowdown and the slower economic
expansion pace that had already been indicated at the beginning of 2015.
In Brazil, economic activity continued to deteriorate, with estimates of 1.5% decrease in gross domestic product
in 2015. The industrial sector is the most affected by the lower activity, with the industrial production showing
6.9% drop in the year and 5.3% drop over the previous year, according the survey by the Instituto Brasileiro de
Geografia e Estatística (IBGE). May showed the first positive reading after three negative months. Nevertheless,
in May 2015 the industrial production fell to levels similar to the end of 2006 and the expectations of drop of 5%
for 2015 show little space for recovery.
19
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Version: 1
Industrial Indicators According to Categories of Use in Brazil
Source: IBGE, Research Office, Industry Coordination
(*) Series with seasonal adjustments
The drop in industrial production was strongly influenced by trucks and autos, which has shown significant
decreases in the light and heavy vehicles production. Conditions in other industrial sectors are not necessarily
as negative as in the auto industry.
Net Operating Revenue
Net Operating Revenues totaled R$ 2,349.4 million in the second quarter of 2015 (2Q15), for 29.0% growth over
the second quarter of 2014 (2Q14) and 10.3% growth over the first quarter of 2015 (1Q15). Adjusting net
revenues for transactions occurred in the period, organic growth was of 22.3% over 2Q14.
Net Operating Revenue per Market (R$ million)
In the second quarter we noted the intensification of the same trends observed in the previous quarter. In the
Brazilian market, growth in the equipment for energy generation, transmission and distribution sector, mainly in
wind power generation systems, more than offset the drop in investments in industrial capacity expansion and in
consumption. In the external market, the devaluation Brazilian currency, in excess of 37% when comparing 2T15
and 2T14 averages, enhanced the positive impacts of geographical diversification and the product line expansion,
resulting in strong growth in net operating revenues. These results reaffirm one of the most important
characteristics of our business model, the ability to find and exploit growth opportunities, even in unfavorable
macroeconomic scenarios.
20
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Net Operating Revenue in 2Q15 breakdowns as follows:
 Brazilian Market: R$ 1,051.5 million, representing 45% of Net Operating Revenue, with 16.8% growth
over 2Q14 and 2.3% growth over 1Q15. Organic growth in the Brazilian market, excluding the
acquisitions in the last 12 months, was 16.6% over 2Q14;

External Markets: R$ 1,297.9 million, equivalent 55% of Net Operating Revenue. The comparison in
Brazilian Reais shows growth of 40.9% over the same period last year and of 17.7% over the previous
quarter. Considering the average US dollar for the quarter, comparison shows growth of 2.3% over the
2Q14 and considering the local currencies of each market, the comparison shows growth of 14.8% over
2Q14. Organic growth in Brazilian Reais in the external markets was 27.8% over 2Q14.
Evolution of Net Revenues according to Geographic Market (R$ Million)
External Market – Distribution of Net Revenues according Geographic Market
Distribution of Net Revenues per Business Area
21
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Version: 1
Business Areas
The performance of the external markets was highlight in the Industrial Electro-Electronic Equipment area
and ensured net operating revenue growth. Industrial investments in domestic market showed further slowdown,
with maintenance of installed capacity remaining the primary demand driver. The investments in capacity
expansion continue to be concentrated in a few specific segments and the impact of devaluation of the Brazilian
Real over the competitiveness of value added manufactured products is limited.
For WEG, the recent devaluation of the Brazilian currency creates more favorable conditions for the
implementation of our expansion strategy abroad, both with the expansion of production capacity, with new plants
in Mexico and China, as with additional effort in staff, services and sales infrastructure in international markets.
In doing so we are using the short-term competitiveness boost provided by the weaker Brazilian Real to build a
structurally stronger position.
Growth in Energy Generation, Transmission and Distribution (GTD) business area continued strong. We
have highlighted the improvement in conditions in the regulated energy auctions, with impacts on the demand
and the attractiveness of electricity generation systems, especially in renewable sources. Additionally, we
successfully launched a new product, the wind power generation systems, with a strong impact on the revenue
growth rate over this first half of 2015. In transmission and distribution (T&D) demand conditions in Brazil showed
some cooling off due to the lower economic activity. The outlook, however, remains positive, with the current
order backlog execution and the prospect of winning new business with the completion of energy auctions in the
second half.
In the Motors for Domestic Use area we continued to see strong growth due to the consolidation of the
SINYA/CMM acquisition in China, which allowed us to complete our product portfolio and advance in our
internationalization in this segment. On the other hand, the Brazilian market performance continued weak, with
demand being affected by the worsening of consumer credit and disposable income conditions and increases of
regulated tariffs. We do not expect a rapid turnaround in this scenario.
Another area that showed weaker performance was the Paints and Varnishes, which continued affected by the
slowdown in industrial production and consumption. In this area we have adjusted the cost and operating
expenses structures and have sought new markets and application segments for our products.
Cost of Goods Sold
Cost of Goods Sold (COGS) totaled R$ 1,677.7 million in 2Q15, 34.8% above 2Q14 and 12.5% above 1Q15.
Gross margin reached 28.6%, with reduction of 3.1 percentage points over 2Q14 and of 1.4 percentage points
over 1Q15.
The impacts on gross margin were:
 cost increases on raw materials denominated in or referenced to the US dollar, occurring at faster rate
than our ability to adjust selling prices;
 Relative growth of revenues in the wind power generation systems, incorporating subsystems that are
not manufactured by WEG and therefore has lower operating margins. From the perspective of return on
capital, these lower margins are offset by lower capital intensity. It is important to remember that this is
a new product for WEG, and we're still climbing the learning curve of the production process;
 Higher relative importance of some recently acquired businesses, with different margin profiles;
 Constitution of additional labor, receivables and inventories provisions.
22
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Version: 1
The average copper spot prices at the London Metal Exchange (LME) continued to show decline compared to
2014, falling by 11.0% in 2Q15 compared to the 2Q14 average, but increasing by 3.4% over the average of 1Q15.
Steel prices have also continued to fall, 22% lower compared to 2Q14 and stable in relation to 1Q15. These are
the variations of US dollars prices, which means that prices in Brazilian Reais continued to rise, as they
incorporate devaluations to the US dollar of 38% over 2Q14 and 7% over 1Q15.
Selling, General and Administrative Expenses
Consolidated selling, general and administrative expenses (SG&A) totaled R$ 344.2 million in 2Q15, 19.6%
growth over the 2Q14 and 9.9% growth over the previous quarter. As a percentage of Net Operating Revenue,
operating expenses represented 14.7% in 2Q15, 1.1 percentage points lower than in 2Q14, remaining at the
same level as in 1Q15.
EBITDA and EBTIDA Margin
In the 2Q15, EBITDA (according to the Instruction CVM 527/2012) totaled R$ 352.1 million, 13.0% growth over
the 2Q14 and 1.1% growth over the 1Q15. EBITDA margin reached 15.0%, 2.1 percentage points lower than
2Q14 and 1.4 percentage points lower than 1Q15. The EBITDA margin decrease was lower than the decrease
of gross margin due to better control over operating expenses.
IN R$ million
23
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Version: 1
Net Financial Results
In this quarter, net financial result was positive in R$ 53.5 million (R$ 32.3 million and R$ 41.7 million in 2Q14
and 1Q15, respectively). Financial revenues totaled R$ 18.2 million in 2Q15 (R$ 142.2 million and R$ 519.6
million, respectively), with a decrease in absolute terms compared to 1Q15 as a result of the impact of the
changes on exchange rates. The impact of changes on exchange rate on debt were positive financial expenses,
i.e. increasing the the results in R$ 35.3 (negative R$ 109.9 million and R$ 477.9 million in 2Q14 and 1Q15,
respectively). This peculiar result was caused by exchange rate changes on the portion of the debt that is
denominated in other currencies than the Braszilian Real, used to finance our transactions outside Brazil (trade
finance). The net impact of was a 65.3% growth of net financial result over the previous year, a result of higher
interest rates earned of liquid resources and the attractive financing costs.
Income TAX
Income Tax and Social Contribution on Net Profit provision in 2Q15 reached R$ 48.5 million (R$ 53.1 million and
R$ 76.3 million in 2Q14 and 1Q15, respectively). Additionally, R$ 16.4 million were recorded as “Deferred Income
Tax / social contribution” debt (debt of R$ 2.4 million and credit of R$ 11.3 million, respectively). The effective tax
rate on income remained within the usual standards.
Net Income
As a result of aforementioned impacts, net income for 2Q15 was R$ 260.9 million, an increase of 14.4% over
2Q14 and increase of 6.1% over the previous quarter. Net margin for the quarter was 11.1%, 1.4 percentage
points lower than in 2Q14 and 0.4 percentage points lower than the previous quarter.
Cash Flow
In the first half of 2015, cash flow of operating activities was positive in R$ 321.6 million, reversing the cash
consumption observed in the first three months of 2015. The impact of exchange rate changes on working
capital (inventories, accounts payable and receivable) remained relevant, but it was offset by increased
operating cash generation.
Investing activities demanded cash to the amount of R$ 229.5 million in the first half, also reverting the position
observed at the end of the first quarter, with the exchange rate changes effect on the account "Cumulative
translation adjustment". The highlight continued to be the expansion investment in the new plants in China and
Mexico.
Finally, financing activities generated R$ 351.4 million in the period, with R$ 1,031.4 million in financing raised
at attractive terms and interest rates, and R$ 333.4 million in amortization (net debt increase of R$ 698.1
million), and the payment of interest on loans and dividends and interest on stockholders’ capital reffering to the
second half of 2014.
​
24
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Version: 1
Investments
In the first half of 2015, we highlight the exectution of investment program for expansion and modernization of
production capacity abroad, which consumed 41% of the R$ 202.5 million invested in the first six months of the
year. The two main projects are the new electric motors production industrial plants in Mexico, which is already
operational, and in China, which should start production in the second half of the year. Investments in industrial
plants in Brazil are being implemented with an eye to adjust the production capacity and effective demand.
Our program for 2015 foresees investments of R$ 477.6 million in capacity expansion and modernization, but we
have flexibility in implementing these investments, always in search of maximizing capacity utilization and return
on invested capital.
Debt and Cash Position
On June 30, 2015 cash, cash equivalents and financial investments totaled R$ 4,710.4 million, almost entirely
invested in fixed income instruments linked to the CDI, in the short-term and in Brazilian currency, with first-tier
banks. Gross financial debt totaled R$ 4,756.1 million, being 43% in short-term and 57% in long-term.
IN R$ Thousands
At the end of the 2Q15, WEG had R$ 45.7 million net debt. We continue to find financing opportunities at
attractive conditions both in costs and in maturity. The current characteristics of the debt are:


The total debt duration is of 23.2 months and for the long-term portion is of 37.3 months. Duration for
portion denominated in Brazilian Reais is of 17.0 months and for the portion in foreign currencies is of
30.1 months. These values are almost the same as those of the 1Q15, demonstrating the continuing
availability of attractive financing lines.
The weighted average cost of fixed-rate Brazilian Reais denominated debt is approximately 6.4% per
year. Floating rate contracts are indexed mainly by Brazilian long-term interest rate (TJLP).
25
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Dividends and interest on stockholder`s equity
Over the first half of 2015, the Board of Directors approved, ad referendum of a future Annual Shareholders
Meeting, the following events as dividends:


On March 24, as interest on stockholders’ equity (JCP), to shareholders on said date, to the gross
amount of R$ 67.4 million
On June 23, as interest on stockholders’ equity (JCP) to shareholders on said date, to the gross
amount of R$ 78.8 million
In addition, on July 28, the Board of Directors approved intermediate dividends related to the net income for the
first half of 2015, to the total amount of R$ 133.9 million to the shareholders on said date. The proceeds will be
paid from August 12, 2015 ownwards. Amounts declared as remuneration to shareholders in the first half
represented 55.3% of net income for the period.
Our policy is to declare interest on stockholders equity quarterly and declare dividends based on profit earned
each semestre, i.e., we report six events per year, which are paid semiannualy.
WEGE3 Share Performance
The comon shares issued by WEG, traded under the code WEGE3 at BM&F Bovespa, ended the last trading
sessin of June 2015 quoted at R$ 19.05, with a nominal gain of 24.5% in the year and of 26.0% considering the
dividends and interest on stockholders equity declared in the period. These percentages are already adjusted for
the stock split approved at the Ordinary and Extraordinary General Shareholders Meeting held on March 31. The
stock split at the ratio of two common shares for each existing share, and were ex-split on April 1st.
26
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
The average daily traded volume in 2Q15 was R$ 22.5 million, (R$ 21.1 million in 2Q14). Throughout the quarter
265,379 stock trades were carried out (176,040 stock trades in 2Q14), involving 80.0 million shares and moving
R$ 1,374.9 million (R$ 1,370.1 million in 2Q14).
Transformadores Suntec acquisition in Colombia
On May 07, WEG S.A. announced the acquisition of Transformadores Suntec S.A.S. (“Suntec”), company
founded in 1979, with wide experience in manufacturing oil and dry transformers. The company’s manufacturing
plant occupies around 5,000 square meters and currently employs 140 people. Revenues in 2014 were of
approximately US$ 18 million.
Transformers business acquisition in South Africa
On April 22, WEG S.A. announced the acquisition of the high voltage transformers, mini substations, switchgear
manufacturing business and related services from TSS Transformers (Pty) Ltd ("TSS"), a company based in
Heidelberg (Gauteng), South Africa. Founded in 1994, TSS initially performed transformers maintenance and
repair services, later evolving into manufacturing power transformers up to 40 MVA - 145 kV, mini substations
and switchgear. The company manufacturing assets are located near Johannesburg, with 45,000 square meters
total area.
This is WEG’s second acquisition in the South African transformer market. In 2013, WEG acquired the
transformers mini substations manufacturing business from Hawker Siddeley Electric Africa (Pty) Ltd. ("HST"),
creating the WEG Transformers Africa (Pty) Ltd. Subsidiary.
The transaction is subject to certain conditions and to the approval by the South African authorities.
27
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Version: 1
WEG S.A.
Notes to financial statements
At June 30, 2015
(In thousands of reais, except when indicated otherwise).
1. Company information
WEG S.A. (the “Company”) is a publicly traded company with main place of business at Avenida Prefeito Waldemar Grubba,
no 3.300, in Jaraguá do Sul - SC, Brazil, holding company member of the WEG Group, and its business purpose is the
manufacture and marketing of capital goods, such as, electric motors, generators and transformers; control and protection of
electric circuits and industrial automation; electric traction solutions (land and sea); solutions for the generation of renewable
and distributed energy, exploring all opportunities in small hydroelectric plants and thermal biomass, wind and solar energy
sources; no-breaks and alternators for groups of generators; electric substations; industrial electrical and electronic
equipment systems; and industrial paint & varnish. The operations are performed through manufacturing facilities located in
Brazil, Argentina, Mexico, United Stated, Portugal, Austria, South Africa, India, and China.
The Company has shares traded on BM&F Bovespa under the code “WEGE3” and has been listed since June 2007 in
the special segment of corporate governance called New Market.
The Company has American Depositary Receipts (ADR) - Level 1 that are traded on over-the-counter (OTC) market, in
the United States under the symbol WEGZY.
2. Basis of preparation and summary of main accounting policies
2.1 Declaration of conformity (regarding the IFRS and CPC standards)
The quarterly information have been prepared in accordance with the rules of the Brazilian Securities Commission (CVM) applicable
to the preparation of Quarterly Information (ITR), using the historical cost basis of value, except for the measurement at fair value
of certain financial instruments, when required by the standards.
Authorization to complete the preparation of these quarterly information was granted at the executive board meeting on july 10,
2015.
The accounting policies, basis of consolidation and methods of calculation adopted in the preparation of quarterly information, as
well the estimates and judgments used in applying the accounting policies are the same practiced in preparing the financial
statements for the year ended December 31, 2014.
3. Accounting estimates
The financial statements included the use of estimates that considered past and current event experiences, assumptions related
to future events and other objective and subjective factors. Significant items subject to these estimates are:
a) credit risk analysis for the determination of the allowance for doubtful accounts;
b) review of the economic useful life of fixed assets and their recovery in operations;
c) fair value measurement of financial instruments;
d) commitments with employees’ benefit plans;
e) transactions with stock option plan;
f) deferred income tax assets on income and social contribution tax losses, and
g) Provisions, for contingencies;
The settlement of transactions involving these estimates may result in amounts different from those recorded in the quarterly
information statements due to the misstatements inherent to the estimate process. Estimates and assumptions are periodically
reviewed.
28
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
4. Cash and cash equivalents
COMPANY
06/30/15
12/31/14
a) Cash and banks
b) Short-term investments
In local currency
Bank Deposit Certificate (CDB), Repurchase operations
and Investment funds
In foreign currency
Certificates of Deposits Abroad,
Other balances held abroad
SWAP
NDF - “Non Deliverable Forwards”
TOTAL
CONSOLIDATED
06/30/15
12/31/14
32
953,158
953,158
24
886,676
886,676
374,017
3,397,478
3,178,495
302,346
3,025,669
2,916,630
953,158
953,190
886,676
886,700
3,178,495
64,258
17,705
46,553
154,378
347
3,771,495
2,916,630
65,299
23,512
41,787
42,590
1,150
3,328,015
Investments in Brazil:
Are remunerated at the rates of 100% to 105.3% of the CDI (100% to 105.3% of CDI at December 31, 2014),
Investments abroad:
CONSOLIDADO
Taxa de Juros
In Euros
In U.S. Dollars
Other coins
TOTAL
0.005% a 0.08% p.a.
0.20% a 0.25% p.a.
0.80% a 23.50% p.a.
Valores em moeda
original
379
5,279
Sundry
06/30/15
12/31/14
1,319
16,386
46,553
64,258
5,410
18,102
41,787
65,299
5. Short-term investments
Certificate of deposit and repurchase operations
Others
TOTAL
Current assets
Noncurrent assets
COMPANY
06/30/15
12/31/14
30,320
57,699
30,320
57,699
30,320
57,699
-
CONSOLIDATED
06/30/15
12/31/14
938,866
865,162
1,047
938,866
866,209
938,866
865,162
1,047
The Company and its subsidiaries have investments which are interest at rates from 100% to 105.3% of CDI (100% to 105.3% of
CDI at December 31, 2014).
6. Trade accounts receivable
CONSOLIDATED
06/30/15
12/31/14
a) Breakdown of balances
Domestic Market
External Market
SUBTOTAL
Present value adjustment
Allowance for losses on trade receivables
TOTAL
919,608
1,185,693
2,105,301
(6,850)
(47,483)
2,050,968
986,990
921,931
1,908,921
(1,361)
(39,696)
1,867,864
29
ITR – Quarterly Information – 06/30/2015 – WEG S/A
b) Losses on trade accounts receivable for the period
c) Maturity of trade notes
Not yet due
Due: Up to 30 days
Over 30 days
TOTAL
Version: 1
6,118
5,020
1,842,745
128,759
133,797
2,105,301
1,652,153
111,114
145,654
1,908,921
The breakdown of provision with losses on trade accounts receivable is as follows:
Balance at 01/01/2014
Losses written-off during the year
Setting up of provisions during the year
Balance at 12/31/2014
Losses written-off diving the period of six months
Setting up of provisions
Reversal of Provisions
Balance at 06/30/2015
(27,973)
5,020
(16,743)
(39,696)
6,118
(15,612)
1,707
(47,483)
7. Inventories
Finished products
Products in process
Raw materials and others
Imports in transit
Provision for slow moving
Total inventories - domestic market
Finished products
Products in process
Raw materials and others
Provision for slow moving
Total inventories - external market
OVERALL TOTAL
CONSOLIDATED
06/30/15
12/31/14
383,029
319,997
358,125
314,885
312,335
300,553
47,338
43,777
(12,716)
(10,882)
1,088,111
968,330
513,759
193,920
204,566
(45,814)
866,431
492,000
123,208
149,443
(28,062)
736,589
1,954,542
1,704,919
The breakdown of provision for slow moving is as follows:
Balance at 01/01/2014
(33,407)
Recognition of a provision during the year
(6,914)
Reversal of provision during the year
1,377
Balance at 12/31/2014
(38,944)
Recognition of a provision
(20,890)
Reversal of provision diving the period of six months
1,304
Balance at 06/30/2015
(58,530)
Inventories are insured and their coverage is determined considering the values and level of risk involved, Recognition and
reversal of provision of loss for slow moving are recorded in cost of goods sold.
30
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
8. Taxes recoverable
State VAT (ICMS) on capital expenditures
Value Added Tax (IVA) from foreign subsidiaries
PIS/COFINS on capital expenditures
ICMS
IPI
IRPJ/CSLL recoverable
PIS/COFINS
REINTEGRA
Other
TOTAL
Short-term
Long-term
COMPANY
06/30/15
12/31/14
12,030
8,948
12,030
8,948
12,030
8,948
-
CONSOLIDATED
06/30/15
12/31/14
31,006
29,827
87,434
65,209
3,277
2,647
27,237
20,446
24,875
16,619
21,204
15,918
28,039
11,248
6,781
13,441
2,808
3,312
232,661
178,667
214,644
159,446
18,017
19,221
Credits will be realized by the Company and its subsidiaries through regular tax collection, also including tax credits subject to
refund and/or offset.
9. Related parties
Business transactions of purchase and sale of products, raw materials and contracting of services as well as financial transactions
of loans, raising of funds among Group companies and Management fees are as follows:
COMPANY
CONSOLIDATED
06/30/15
12/31/14
06/30/15
12/31/14
1
-
-
-
1
-
-
-
Current liabilities
Agreements with administrators
-
-
3,770
3,770
3,075
3,075
Noncurrent liabilities
Management of financial resources
WEG Equipamentos Elétricos S,A,
-
873
-
-
-
873
-
-
BALANCE SHEET
Noncurrent assets
Management of financial resources
WEG Equipamentos Elétricos S,A,
COMPANY
INCOME STATEMENT
Management compensation:
a) Fixed (fees)
Board of Directors
Executive Board
b) Variable (profit sharing )
Board of Directors
Executive Board
CONSOLIDATED
06/30/15
06/30/14
06/30/15
06/30/14
1,061
487
574
960
494
466
10,894
975
9,919
9,748
989
8,759
1,029
473
556
614
316
298
8,549
945
7,604
6,001
632
5,369
31
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Additional information:
a) Business transactions
The transactions of purchase and sale of inputs and products are made under the same conditions with unrelated third parties,
prevailing spot sales;
b) Management of financial resources
The financial and commercial operations between Group companies are recorded, in compliance with the requirements of the
Group’s bylaws;
The credit/debit contracts entered into with Administrators are recorded subject to interest between 95% and 100% of the CDI
variation;
c) Services provision and other covenants
WEG Equipamentos Elétricos S,A, entered into an agreement for “Guarantees and Other Covenants” with Hidráulica Industrial
S,A, Ind, e Com - HISA, for WEG to be guarantor in loan operations and provide guarantee to customers (Performance Bond,
guarantee insurance, etc,);
d) Securities and guarantees
WEG SA has sureties and guarantees to subsidiaries abroad, in the amount of US$ 197.8 million (US$ 190.5 million at
December 31, 2014);
e) Management compensation
Board of Directors members were paid the amount of R$ 975 (R$ 989 at june 30, 2014) and the executive officers were paid the
amount of R$ 9,919 (R$ 8,759 at june 30, 2014), for their services, aggregating the total of R$ 10,894 (R$ 9,748 at june 30,
2014). It is expected the participation of 0% to 2.5% of net income to be paid to management as long as the result of activity on
capital invested. The performance targets refer to Return on Investment (50%), growing on net operating revenue (25%) and growing
on EBITDA (25%). The respective prevision in the amount of R$ 8,549 (R$ 6,001 in june 30, 2014) was recorded in the period in
the rubric other operating results. Board members and officers receive additional corporate benefits, as follows: Health and dental
insurance, life insurance, supplementary pension benefits, among others.
10. Deferred taxes
Credits and deferred tax liabilities for income tax and social contribution was calculated according to the standards.
a) Breakdown:
Income tax losses
Social contribution tax losses
Temporary differences:
Provision for contingencies
Taxes questioned in court
Losses on trade receivables
Losses on low movement inventories
Labor severance pay and for contract termination
Freight and sales commissions
Accounts payable (electric energy, technical assist and others)
Employee profit sharing
Unrealized gains from derivatives
Accelerated depreciation incentive - Law n° 11,196/05
Diferença de amortização de ágio fiscal x contábil
Diferença de depreciação fiscal x contábil (vida útil)
Other additions and exclusions
Deemed cost of PP&E
TOTAL
Noncurrent assets
Noncurrent liabilities
COMPANY
06/30/15
12/31/14
42
58
1,442
(52)
548
(1,488)
492
492
-
1,355
(52)
704
(1,508)
557
557
-
CONSOLIDATED
06/30/15
12/31/14
41,561
31,775
8,745
8,361
56,532
28,319
6,522
10,580
15,827
10,986
51,124
8,808
(49,597)
(6,803)
(29,987)
(147,196)
26,644
(252,783)
(220,718)
77,962
(298,680)
47,024
26,350
5,210
8,471
16,165
10,191
46,420
8,303
(13,033)
(6,387)
(28,331)
(137,367)
16,860
(267,137)
(227,125)
55,864
(282,989)
32
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
b) Estimated realization term
Management estimates that deferred assets arising from temporary differences will be realized in proportion to realization of
contingencies, losses and projected obligations,
In relation to deferred tax credits calculated on income and social contribution tax losses, management estimates that they will
be realized within the next 5 years, with a view to projecting future profits,
11. Investments
11.1. Investments in subsidiaries
Investment in Capital (%)
Country
Ajusted
Shareholder
s’ equity
P&L
06/30/15
Direct
Indirect
12/31/14
Direct
Equity
Book Value
06/30/15
06/30/14
06/30/15
12/31/14
Indirect
(*)
WEG Equipamentos Elétricos S.A.
RF Reflorestadora Ltda.
WEG Tintas Ltda.
WEG Amazônia S.A.
WEG Administradora de Bens Ltda.
WEG Logística Ltda.
WEG Linhares Equips. Elétricos S.A.
WEG Drives & Controls Aut. Ltda.
WEG Partner Aerogeradores S.A.
WEG-Cestari Redut. Motorredut. S.A.
WEG Automação Critical Power Ltda.
Hidráulica Indl. S.A. Ind. e Com.
Agro Trafo Adm. de Bens S.A.
Injetel Ind. Com. Comp. Plásticos Ltda.
Ind. de Tintas e Vernizes Paumar S.A.
WEG-Jelec Oil and Gas Sol. Aut. Ltda.
Transformadores do Nordeste Ltda.
Zest WEG Group Africa (PTY) Ltd.
Zest Energy (Pty) Ltd.
Zest WEG Manufacturing (Pty) Ltd.
Zest WEG Electric (Pty) Ltd.
Electric/Instrumentations Eng.
Cont.(Pty)
Zest WEG Group Namibia Limited
WEG (Germany) GmbH
Watt Drive GmbH
Wurttembergische Elektromotoren
GmbH
Antriebstechnik KATT Hessen GmbH
WEG Equipamientos Electricos S.A.
Pulverlux S.A.
EPRIS Argentina S.R.L.
WEG Austrália Pty Ltd.
Watt Drive Antriebstechnik GmbH
WEG International Trade GmbH
WEG Holding GmbH
WEG Benelux S.A.
WEG Chile S.A.
WEG (Nantong) Electric Motor Co., Ltd.
Changzhou Machine Master Co., Ltd.
Changzhou Master Machinery Co., Ltd.
Changzhou Sinya Electromotor Co., Ltd.
Changzhou Yatong Jiewei Elect., Ltd.
Wuxi Ecovi Technology Co., Ltd.
Jiangsu Shiya Elect. Technolog. Co., Ltd
The First Drive Technology Co., Ltd.
WEG (Jiangsu) Electric Equip. Co., Ltd.
Watt Euro-Drive Pte. Ltd.
WEG Singapore Pte. Ltd.
Brazil
South Africa
3,794,670
163,377
120,277
44,384
31,236
106,708
200,074
401,048
8
39,365
39,326
48,240
9,335
4,286
124,004
9
5,049
153,718
3,561
(321)
75,566
433,910
2,207
10,005
662
949
8,367
26,445
35,085
(1)
862
613
1,667
236
(4)
(3,757)
(1)
(500)
18,662
106
(3,936)
(2,897)
100.00
100.00
99.91
0.02
3.53
89.20
0.10
0.03
91.75
0.01
-
0.09
99.98
96.47
100.00
100.00
10.80
99.90
50.00
99.97
62.32
8.25
100.00
100.00
100.00
99.99
100.00
76.09
100.00
74.90
100.00
100.00
99.91
0.02
4.41
89.20
0.03
91.75
-
0.09
99.98
95.59
100.00
100.00
10.80
99.90
50.00
99.97
62.32
8.25
100.00
100.00
100.00
100.00
76.09
100.00
100.00
416,395
2,251
9,996
(145)
31,295
2,255
-
363,332
2,293
12,259
1
19,627
(6)
-
3,794,670
163,377
120,166
7
1,104
1
357,734
11
8,565
-
3,502,936
169,296
114,441
7
1,095
1
339,277
11
6,548
-
20,365
141
45,974
4,343
(940)
141
(3,794)
(429)
-
86.67
100.00
100.00
100.00
-
86.67
100.00
100.00
100.00
-
-
-
-
10,631
10,645
102,194
2,675
69
15,013
13,317
4,448
685,901
45,455
35,255
130,506
39,561
(893)
32,128
38,004
(3,728)
12,895
14,409
75,827
18,290
3,056
337
443
17,588
750
(5,290)
4,031
4,303
12,690
2,258
2,410
2,637
(2,541)
(150)
202
(1,035)
1,043
(101)
(592)
338
(136)
10.44
8.00
-
100.00
100.00
89.56
100.00
100.00
100.00
100.00
100.00
100.00
100.00
92.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
10.44
8.00
-
100.00
89.55
100.00
100.00
100.00
100.00
100.00
100.00
100.00
92.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
1,836
193
-
1,284
58
-
10,687
2,794
-
8,207
2,350
-
Germany
Argentina
Australia
Áustria
Belgium
Chile
China
Singapore
33
ITR – Quarterly Information – 06/30/2015 – WEG S/A
WEG Colômbia S.A.S
FTC Energy Group S.A.
SUNTEC WEG Transformadores
S.A.S.
WEG Middle East Fze.
WEG Ibéria Industrial S.L.
WEG Electric Corporation
Electric Machinery Company Inc.
WEG Service Co.
FTC Energy Group Inc.
WEG France SAS
Zest Electric Ghana Ltd.
E & I Electrical Ghana Ltd.
WEG Industries Índia Private Ltd.
WEG Electric (Índia) Private Ltd.
WEG (UK) Ltd.
WEG Itália S.R.L.
WEG Electric Motors Japan Co. Ltd.
Watt Euro-Drive SDN BHD
WEG México S.A. de C.V.
WEG Transform. México S.A. de C.V.
Voltran S.A. de C.V.
ENI Eletrical Moçambique (Pty) Limited
WEG Peru S.A.
WEG Euro Ind. Electrica S.A.
WEG Electric CIS
WEG Scandinavia AB
ENI Eletrical Tanzania (Pty) Limited
WEG Indústrias Venezuela C.A.
E & I Zambia Ltd.
TOTAL
Colômbia
Arab
Emirates
Spain
USA
France
Ghana
India
England
Italy
Japan
Malaysia
Mexico
Mozambiqu
e
Peru
Portugal
Russia
Sweden
Tanzania
Venezuela
Zambia
Version: 1
48,259
2,308
(1,072)
(69)
-
100.00
51.00
1.00
-
99.00
-
(129)
-
(3)
-
-
120
-
9,249
679
-
100.00
-
-
-
-
-
-
(1,018)
1,350
-
100.00
-
100.00
-
-
-
-
58,814
221,794
38,765
12,050
658
11,638
(1,945)
(269)
152,799
2,657
22,507
16,177
2,620
3,973
186,513
51,906
72,294
1,753
6,868
(121)
3,653
(76)
(1,241)
515
(234)
2,375
1,043
3,047
2,128
360
148
13,577
2,927
11,658
5.00
-
100.00
100.00
100.00
100.00
51.00
100.00
100.00
90.00
100.00
95.00
100.00
100.00
95.00
100.00
100.00
60.00
60.00
5.00
0.07
-
100.00
100.00
100.00
100.00
100.00
100.00
90.00
100.00
95.00
100.00
99.93
100.00
100.00
100.00
60.00
60.00
52
(8)
-
76
30
1
-
133
1
-
71
9
1
-
(10)
1,213
62,903
2,605
3,848
669
8,428
97
(2)
188
7,001
(2,337)
(250)
229
(3,921)
(162)
0.05
5.74
-
66.67
99.95
94.26
100.00
100.00
100.00
100.00
50.00
0.05
5.74
-
66.67
99.95
94.26
100.00
100.00
100.00
99.99
50.00
422
464,413
(1)
126
399,077
1
3,612
4,462,863
3,043
4,147,413
(*)Equity pickup adjusted by unearned income
11.2. Acquisitions 2015
(i)
Efacec Energy Service Ltda.
The subsidiary WEG Equipamentos Elétricos S.A., acquired the company Efacec Energy Service Ltda., changing its name
toTransformadores do Nordeste Ltda., which operates in the maintenance of power transformers, motors, generators, circuit
breakers and field engineering services various industrial segments of energy. The goodwill, in the amount of R$ 5,451, was
measured as the excess of the consideration transferred in relation to net assets acquired. Inclusion in the consolidated balance
sheet as of January 2015.
(ii)
FTC Energy Group.
The subsidiary WEG Colombia SAS, acquired the company FTC Energy Group, which operates in the manufacture and assembly
of electrical panels for process automation in Colombia. The goodwill in the amount of R$ 7,280, was initially measured as the
excess of the consideration transferred in relation to net assets acquired. Inclusion in the consolidated balance sheet as of
January 2015.
(iii)
Antriebstechnik KATT Hessen GmbH
The subsidiary WEG Equipamentos Elétricos S.A., acquired the company Antriebstechnik KATT Hessen GmbH, which operates
in the manufacture of electric motors in Germany. The goodwill in the amount of R$ 4,260, was initially measured as the excess
of the consideration transferred in relation to net assets acquired. Inclusion in the consolidated balance sheet as of January 2015.
(iv)
Transformadores Suntec S.A.S.
The subsidiary WEG Colombia SAS, acquired the company Transformadores Suntec S.A.S., which operates in the manufacture
of transformers in Colombia. Goodwill in the amount of R$ 54,560, was initially measured as the excess of the consideration
transferred in relation to net assets acquired. Included in the consolidated balance sheet as of April 2015.
34
ITR – Quarterly Information – 06/30/2015 – WEG S/A
(v)
Version: 1
TSS Transformers (Pty) Ltd.
On April 22, 2015, the Company announced the signing of agreements for the business acquisition of manufacturing high voltage
transformers, minisubstations, molded circuit breakers and related services, belonging to TSS Transformers (Pty) Ltd. ("TSS"),
manufacturer based in South Africa. The acquisition is not part of the financial statements of June 30, 2015. The Company is
awaiting the approval of the South African authorities.
12. Property, plant and equipment
COMPANY
06/30/15
12/31/14
1,440
1,440
5,639
5,639
7,079
7,079
Land
Construction and facilities
Equipment
Furniture and fixtures
Hardware
Construction in progress
Reforesting
Other
Subtotal
Accumulated deprec,/depletion
Construction and facilities
Equipment
Furniture and fixtures
Hardware
Reforesting
Other
TOTAL
Annual depreciation rate (%)
02 to 03
05 to 20
07 to 10
20 to 50
-
CONSOLIDATED
06/30/15
12/31/14
380,484
378,747
999,965
944,907
3,327,066
3,150,970
109,555
103,459
98,266
89,903
225,821
116,886
53,683
53,051
76,838
104,205
5,271,678
4,942,128
(2,424)
(2,424)
-
(2,366)
(2,366)
-
(2,241,249)
(272,910)
(1,808,576)
(59,703)
(67,952)
(15,419)
(16,689)
(2,064,186)
(249,834)
(1,664,119)
(54,869)
(62,829)
(14,076)
(18,459)
4,655
4,713
3,030,429
2,877,942
a) Summary of changes in property, plant and equipment - consolidated:
PP&E Classification
Land
Construction and facilities
Equipment
Furniture and fixtures
Hardware
Construction in progress
Reforesting
Advance to suppliers
Other
TOTAL
12/31/14
Transfer
between
classes
Acquisition
1 Write-offs Deprec, and Exchange
depletion
effect
378,747
695,073
1,486,851
48,590
27,074
116,886
38,975
83,390
2,356
4
8,300
9,434
(872)
285
(16,835)
152
(468)
4,190
15,629
106,154
4,389
8,085
118,654
632
(31,251)
4,424
(10,630)
(39)
(2,651)
(98)
(115)
(79)
(448)
(13,429)
(117,973)
(3,870)
(6,062)
(1,343)
(2,029)
8,173
21,521
36,675
1,713
1,047
7,195
3,030
993
380,484
727,055
1,518,490
49,852
30,314
225,821
38,264
55,321
4,828
2,877,942
-
230,906
(14,060)
(144,706)
80,347
3,030,429
06/30/15
b) Amounts offered in guarantee – PP&E items were provided as collateral for loans, financing, labor claims and tax suits in the
amount of R$ 24,145 (R$ 23,118 at December 31, 2014).
35
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
13. Intangible assets – consolidated
Software license
Right to use property
Other
Subtotal
Goodwill - Acquisition of subsidiaries
TOTAL
Amortization/
Years
5
50 - 99
5
-
Cost
98,571
60,325
196,072
354,968
669,647
1,024,615
Accumulated
Amortization
(68,070)
(17,565)
(172,817)
(258,452)
(21,353)
(279,805)
06/30/15
12/31/14
30,501
42,760
23,255
96,516
648,294
744,810
26,343
39,390
15,584
81,317
590,290
671,607
a) Summary of changes in intangible assets:
12/31/14 Additions
Software license
Right to use property
Other
Subtotal
Goodwill - Acquisition of subsidiaries
TOTAL
26,343
39,390
15,584
81,317
590,290
671,607
7,731
9,950
17,681
71,551
89,232
Transfers
Amortization
(11,536)
(11,536)
(4,204)
(317)
(2,584)
(7,105)
(7,105)
Exchange
effect
631
3,687
305
4,623
(2,011)
2,612
06/30/15
30,501
42,760
23,255
96,516
648,294
744,810
In May 2015 was finalized the PPA report (Purchase Price Allocation) of companies Sinya Changzhou Co., Ltd., Changzhou Master
Machinery Co., Ltd. and Changzhou Master Machine Co., Ltd., acquired in June 2014. As PPA result of the amount of R $ 11,536
initially recognized as goodwill was recorded in fixed assets according to their fair value. The PPA report did not identify other assets
or liabilities at fair value to be recognized.
b) Schedule of amortization of intangible assets (except goodwill):
2015
2016
2017
2018
2019
After 2020
TOTAL
06/30/15
7,506
14,392
13,006
11,347
7,606
42,659
96,516
12/31/14
11,348
10,644
8,903
7,515
4,209
38,698
81,317
14. Loans and financing
Direct loans from BNDES and FINEP are guaranteed by the controlling company, WEG S.A. Finame operations are guaranteed
by endorsement and statutory lien.
All covenant clauses related to indicators of capitalization, current liquidity and the relation between net debt/Ebitda, included in
the BNDES, are being met.
36
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Type
In Brazil
SHORT TERM
In R$, pre fixed rate
Working capital
Property, plant and equipment
In R$, post fixed rate
Working capital
Working capital
In US Dollar
Working capital
Working capital
Prepayment of Export
Other
SWAP
Other
LONG TERM
In R$, pre fixed rate
Working Capital
Property, plant and equipment
In R$, post fixed rate
Working Capital
Property, plant and equipment
In US Dollar
Prepayment of Export
Other
Other
ABROAD
SHORT TERM
In US Dollar
Working Capital
In EUR
Working Capital
In Pesos (Mexico)
Working Capital
In Renminbi (China)
Working Capital
Other currencies
Working Capital
LONG TERM
In US Dollar
Working Capital
In EUR
Working Capital
In Pesos (Mexico)
Working Capital
Other currencies
Working Capital
TOTAL SHORT TERM
TOTAL LONG TERM
Annual charges in 06/30/15
Version: 1
CONSOLIDATED
06/30/15
12/31/14
1,446,446
1,090,901
3.5% to 11.0% p.a.
2.5% to 9.0% p.a.
802,778
2,897
382,749
2,495
TJLP (+) 1.4% to 5.0% p.a.
UFIR (+) 1.0% to 4.0% p.a.
350,589
14,264
375,135
15,281
US$ dollar (+) 0.9% to 1.0 %p.a.
US$ dollar (+) 1.4% p.a.
US$ dollar (+) Libor (+) 1.1% p.a.
216,398
805
46,709
266,032
3,045
38,419
8,502
3,504
4,259
3,486
2,490,246
2,376,690
1,172,349
20,201
1,552,001
19,391
109,494
27,517
89,983
33,612
1,154,350
675,281
6,335
6,422
579,713
375,851
LIBOR (+) 0.7% to 3.3% p.a.
136,548
116,264
EURIBOR (+) 0.8% to 3.0% p.a.
158,611
10,603
224
74,262
Interest of 4.1% to 6.0% p.a.
129,761
137,387
Exchange rate variation
154,569
37,335
239,649
248,708
LIBOR (+) 1.5% p.a
95,574
81,597
EURIBOR (+) 1.4% to 3.4% p.a.
20,732
157,155
121,375
-
1,968
9,956
2,026,159
2,729,895
1,466,752
2,625,398
Sundry
3.5% a 11.0% p.a
2.5% a 9.0% p.a.
TJLP (+) 1.4% to 5.0% p.a.
UFIR (+) 1.0% to 4.0% p.a.
US$ dollar (+) Libor (+) 1.0% to 1.5% p.a.
Sundry
3.4% p.a.
TIIE (+) 1.1% p.a.
Interest of local market
37
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
Maturity of long-term financing and loans:
06/30/15
212,097
563,150
874,851
784,942
127,783
167,072
2,729,895
2016
2017
2018
2019
2020
2021 after
TOTAL
12/31/14
1,213,429
647,792
214,807
519,357
17,457
12,556
2,625,398
15. Provision for contingencies
The Company and its subsidiaries are parties to administrative and judicial proceedings of labor, civil and tax nature arising from
the normal activities of their businesses. The respective provisions were set up for proceedings the likelihood of loss of which was
rated as “probable” based on the estimate of value at risk determined by the Company’s legal counselors. The Company's
management estimates that the provision for contingencies set up is sufficient to cover any losses from the proceedings in
progress.
a) Balance of provision for contingencies
(i) Tax:
- IRPJ e CSLL
- INSS
- PIS e COFINS
- IRRF
- Other
(a.1)
(a.2)
(a.3)
(a.4)
COMPANY
06/30/15
12/31/14
4,240
3,986
3,764
3,510
476
476
-
CONSOLIDATED
06/30/15
12/31/14
95,831
90,767
16,073
15,310
42,462
38,703
27,223
26,297
476
476
9,597
9,981
(ii) Labor
-
-
117,749
91,781
(iii) Cívil
-
-
74,875
73,747
(iv) Other
-
-
4,006
2,554
4,240
3,986
292,461
258,849
TOTAL
b) Changes in the provision for contingencies for the period - consolidated
a) Tax
b) Labor
c) Civil
d) Other
TOTAL
12/31/14
Additions
Interest
Write-offs
Reversals
06/30/15
90,767
91,781
73,747
2,554
258,849
6,524
25,069
4,889
1,452
37,934
1,329
3,937
1,443
6,709
(2,599)
(4,461)
(7,060)
(2,789)
(439)
(743)
(3,971)
95,831
117,749
74,875
4,006
292,461
c) The provisions recorded basically refer to:
(i)
Tax contingencies
(a.1) The Company and its subsidiaries maintain a provision of 16.24% for the proceeding referring to IPC difference (51.82%) of
January 1989 “Plano Verão” (Summer Plan). The decision is favorable to the limit of the index of 35.58%.
(a.2) This refers to social security contribution taxes payable. The litigation refers to social security charges levied on the private
pension plan, profit sharing, education funding tax, among others.
(a.3) Refers to non-ratification by the Receita Federal do Brasil (FRB) about the request for compensation from the credit balance
of PIS and COFINS with federal tax debts.
(a.4) Relates to late payment penalty levied on credit IRRF on interest on capital received, offset by debts of the same nature,
whose compensation has not been approved by the RFB.
38
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Version: 1
(ii) Labor contingencies
The Company and its subsidiaries are defendants in labor claims primarily involving health and risk exposure, among others, Was
provisioned the amount of R$ 117,749 (R$ 91,781 at December 31, 2014).
(iii) Civil contingencies
These correspond primarily to civil lawsuits, including personal injury, aesthetic damage, occupational diseases and indemnities
arising out of occupational accidents. Was provisioned the amount of R$ 74,875 (R$ 73,747 at December 31, 2014).
d) Judicial deposits
Tax
Labor e Civil
Other
TOTAL RESTRICTED JUDICIAL DEPOSITS
Non-restricted judicial deposits
TOTAL JUDICIAL DEPOSITS
COMPANY
06/30/15
12/31/14
3,711
3,430
4,326
8,037
3,430
8,037
3,430
CONSOLIDATED
06/30/15 12/31/14
30,139
27,656
20,683
12,234
935
889
51,757
40,779
3,071
3,615
54,828
44,394
The judicial deposits not associated ace contingencies are waiting authorized to withdraw from court.
e) Contingencies classified as possible losses
The Company and its subsidiaries are parties to other suits, the likelihood of loss of which are rated as "possible", for which no
provision for contingencies was set up.
The estimated amount of such litigation relates to the tax proceedings totaling R$ 79,668 (R$ 66,326 at December 31, 2014), The
processes classified as “possible” by legal opinions, are:
- taxation on profits computed abroad in the total estimated amount of R$ 48 million.
- not properly approved of IPI credits amounting to R$ 10.6 million.
- incidence of ICMS-ST on purchase transactions of raw materials amounting to R$ 9.3 million.
16. Benefit plan
The Company and its subsidiaries are sponsors of WEG Social Security - Pension Plan, which seeks to supplement the retirement
benefits offered by the official social security system.
The Plan managed by WEG Seguridade Social includes monthly income benefits, annual bonus, supplemental sickness benefits,
supplemental disability retirement, pension due to death, supplementation of the annual bonus and death benefit.
The number of participants is 22,018 participants (22,781 at June 30, 2014). The Company and its subsidiaries made contributions
in the amount of R$ 14,678 (R$ 13,453 at June 30, 2014).
Based on actuarial calculations carried out by independent actuarial, aiming to define the taxable net value of the defined benefit
obligation and the fair value of plan assets in accordance with the procedures established by CVM Resolution No, 695/12 –
technical pronouncement CPC 33 (R1) Benefits Employee, provision was set up in the amount of R$ 4,092 (R$ 5,000 at December
31, 2014).
17. Equity
a) Capital
The Company's capital consists of 1,614,353,076 registered book-entry common shares with no par value, all with voting rights,
including 1,035,332 treasury shares pursuant to item "c".
In the Ordinary and Extraordinary Shareholders Meeting, held on March 31, 2015, approved the split of all shares without par
value, issued by the Company for each one (1) current action pass to be represented by two (2) shares of the same species and
without changing the share capital. The shareholding position considered to split the Company's common shares is the March
31, 2015.
b) Shareholder compensation - Interest on equity capital
b.1.) Interest on equity capital
The Company stated on the first semester of 2015, interest on own capital in the gross amount of R$ 146,149 (net R$ 124,227),
corresponding to R$ 0.113 per share, after the deduction of pursuant to § 2 of Article 9 of Law No. 9,249 / 95, except for corporate
shareholders who are exempt from this tax, according to the following Board of Directors’ approval:
39
ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
I. In March 24, 2015, the Gross value of R$ 67,378 (net R$ 57,271) corresponding to R$ 0.071 per share (total of 806,634,288
shares), after the deduction of pursuant to § 2 of Article 9 of Law No. 9,249 / 95, except for corporate shareholders who are
exempt from this tax.
II. In June 23, 2015, the Gross value of R$ 78,771 (net R$ 66,955 corresponding to R$ 0.042 per share (total of
1,613,330,244 shares), after the deduction of pursuant to § 2 of Article 9 of Law No. 9,249 / 95, except for corporate shareholders
who are exempt from this tax.
b.2.) Dividends
The Board submitted to the Board of Directors approval the proposal of distribution of interim dividends on the results recorded
in the first half of 2015, the amount of R$ 133,904 (R$ 0.083 per share). The proposed value is recorded in the line “Proposed
dividends” in Equity.
The interest on own capital, pursuant to Article 37 of the Bylaws and Article 9 of Law No. 9,249 / 95, will be imputed to mandatory
dividends, paid from August 12, 2015.
The total value of net interim dividends and interest on own capital to be paid is R$ 258.1 millions, equivalent to 50.94% of net
profit earned during the period.
c) Treasury stock
On April 26, 2011 was authorized by the Board of Directors, to acquire up to 500,000 Company’s common shares, at average cost
of R$ 20.11/share. At June 30, 2015, the Company had the amount of 967,932 shares considering the stock split occurred in
March 31, 2015.
The Board of Directors authorized the purchase of up to 600,000 common shares issued by the Comany pursuant to the minute
of April 28, 2015. 67,400 common shares were acquired up to June 2015, amounting to R $ 1,239 at an average cost of R $
18.38 per share.
The acquired shares will be held in treasury for use in connection with exercise of options of purchase of shares by the
beneficiaries of the Share Purchase Option Program (“Program”) of the Company or subsequently canceled or sold.
Were exercised by the beneficiaries of the Share Purchase Option Program (“Program”) the amount of 208,877 shares, of which
90,359 shares exercised until December 31, 2014 and 118,518 shares exercised in the period from January to June 2015. The
Company keeps in treasury 1,035,332 shares at the average cost of R$ 8,43 per share in the total amount of 8,725.
18. Stock option plan
(i) Plan description
The Plan is managed by the Board of Directors, seeking to grant Stock Option Plans for WEG S,A,’s (Company) shares to its
statutory officers or of its subsidiaries with head offices in Brazil, so as to attract, motivate and retain them, as well as aligning
their interests to that of the Company and its shareholders.
Each option grants its bearer with the right to acquire 1 (one) common Company-issued share (BM&FBOVESPA: “WEGE3”),
strictly according to the terms and conditions established in the Plan ("Option”), Share purchase options to be granted are limited
to 2% (two percent) of the total Company’s capital,
The participant must maintain the invested shares blocked during the retention period, according to the minimum levels
determined by the Plan. The Plan may be extinguished, suspended or altered at any moment, through a proposal approved by
the Company's Board of Directors.
(ii) Programs
The Board of Directors may approve, each semester, a Share Purchase Option Program ("Program"), which will define the
participants, number of Options, exercise price, Option distribution, term and other rules specific to each Program.
In order to participate in each Program, the participant must invest an amount of his/her variable compensation in each period in
Company’s shares.
The Programs of Stock Options have been updated on the date of March 31, 2015, in light of the stock split, without nominal value,
issued by the Company, in which for each 1 (one) share became represented by 2 (two) shares of the same specie, considered
the new market value and the increase of shares. This update does not have impact in the calculus done in the beginning of the
program.
40
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Version: 1
In reais (R$)
Program
April /11
Number of
Options Rights
Strike Price
Price corrected
by IPCA
Option price
Option
Difference
Amount
appropriate
(thousand R$)
163,155
8.08
9.36
12.68
3.32
785
71,398
6.71
7.87
10.40
2.54
236
169,393
7.38
8.67
11.30
2.64
515
95,053
6.73
7.91
10.51
2.60
276
April /13
214,688
9.40
11.10
14.33
3.23
692
September /13
108,862
9.60
11.40
15.58
4.19
455
March/14
221,040
10.48
12.54
17.30
4.76
1,053
91,160
13.12
15.75
19.77
4.03
367
187,020
14.05
16.90
22.49
5.60
1,046
September /11
March /12
September /12
August /14
March/15
Total
1,321,769
5,425
The weighted average of fair value was determined based on the Black-Scholes-Merton method, considering the following aspects:
Program
Exercise price
Of option (R$)
Lifespan of the
option – in days
Current price for
corresponding
share (R$)
Interest free of risk for the
Expected volatility
lifespan of the option
In share price (%)
(%)
April /11
8.08
755 – 1,260
8.50
13.17
12.79 – 12.83
September /11
6.71
756 – 1,259
6.95
14.94
10.90 – 11.22
March /12
7.38
755 – 1,257
7.62
14.93
9.76 – 10.33
September /12
6.73
753 – 1,257
7.73
12.25
8.32 – 8.78
April /13
9.40
760 – 1,260
9.89
14.27
8.67 – 9.24
September /13
9.60
756 – 1,258
10.68
14.13
11.29 – 11.81
March /14
10.48
753 – 1,257
12.16
10.26
12.28 – 12.58
August /14
13.12
754 – 1,257
13.45
10.02
11.26 – 11.28
March /15
14.05
751 – 1254
15.21
9.87
13.26 – 13.43
41
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Version: 1
Summary of the movement of shares plan:
Program
Number of shares
06/30/15
Exercised
12/31/14
Granted
Stock split
Expired
April/11
58,010
-
58,010
-
(53,914)
62,106
September/11
27,691
-
26,998
-
(4,161)
50,528
March/12
75,054
-
75,054
-
(32,802)
117,306
September/12
44,540
-
43,283
-
(1,257)
86,566
107,344
-
107,344
-
(26,384)
188,304
54,431
-
54,431
-
-
108,862
March/14
110,520
-
110,520
-
-
221,040
August/14
45,580
-
45,580
-
-
91,160
March/15
-
93,510
93,510
-
-
187,020
523,170
93,510
614,730
-
(118,518)
1,112,892
April/13
September/13
TOTAL
The recognition of expenses with stock option is carried out throughout the period of acquisition of "vesting rights”,
In June 30, 2015, was recorded R$ 426 (R$ 446 at June 30, 2014) as other results in the financial statements for the year
counterpart capital reserve in Equity,
The options exercised in June 30, 2015 were held under the caption capital reserve in equity in the amount of R$ 374, R$ 762 for
the options performed and R$ 388 complement to the amount accrued recognized in retained earnings,
The accumulated equity totals in June 30, 2015 R$ 1,869 (R$ 1,817 at December 31, 2014).
19. Net revenue
BREAKDOWN OF NET REVENUE
CONSOLIDATED
06/30/15
06/30/14
Gross revenue
Domestic market
External market
5,156,569
2,651,727
2,504,842
4,268,732
2,361,924
1,906,808
Deductions
Taxes
Returns and Rebates
(676,846)
(597,393)
(79,453)
(663,642)
(567,446)
(96,196)
Net revenue
Domestic Market
External Market
4,479,723
2,079,380
2,400,343
3,605,090
1,795,795
1,809,295
20. Construction contracts
Construction contract’s revenues and costs are recognized according to the execution of each project by the method of
percentage of incurred costs.
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ITR – Quarterly Information – 06/30/2015 – WEG S/A
Gross operational revenue recognized
Incurred costs
Received prepayments
Version: 1
CONSOLIDATED
06/30/15
06/30/14
307,375
49,450
(277,640)
(23,374)
06/30/15
248,194
12/31/14
167,628
21. Operating expenses by nature and function
CONSOLIDATED
06/30/15
06/30/14
EXPENSE BY NATURE
Depreciation, amortization and depletion
Personnel expenses
Raw materials and use and consumption materials
Freight and insurance costs
Other expenses
EXPENSE BY FUNCTION
Cost of products and services sold
Selling expenses
General and administrative expenses
Management fees
Other operating expenses
(3,931,024)
(151,811)
(1,002,172)
(2,036,658)
(126,599)
(613,784)
)
(3,931,024)
(3,169,373)
(443,036)
(203,475)
(10,894)
(104,246)
(3,113,013)
(119,066)
(842,442)
(1,569,702)
(118,265)
(463,538)
(3,113,013)
(2,457,344)
(387,961)
(175,373)
(9,748)
(82,587)
22. Other operating revenue/expenses
The recorded values are relative to profit sharing, reversal/ (provision) for lawsuits and others, as follows:
CONSOLIDATED
06/30/15
06/30/14
OTHER OPERATING REVENUE
- Other
OTHER OPERATING EXPENSES
- Profit sharing – Employees
- Profit sharing - foreign subsidiaries
- Profit sharing - executive board
- Constitution/Reversal of provision for tax proceedings
- Tax incentives of Rouanet Law
- Other
TOTAL NET
6,451
6,451
(110,697)
(71,747)
(13,782)
(8,549)
(3,209)
(2,138)
(11,272)
(104,246)
3,585
3,585
(86,172)
(62,742)
(8,762)
(6,001)
(2,352)
(2,566)
(3,749)
(82,587)
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Version: 1
23. Financial income (expenses), net
06/30/15
COMPANY
06/30/14
FINANCIAL INCOME
Short-term investment yield
Exchange variation
Exchange variation – Trade accounts payable
Exchange variation – Customers
Exchange variation – Loans
Exchange variation – Others
Present value adjustment - customers
Pis/Cofins on interest on equity
Derivatives
PROEX – Equaliz. Interest rate
Other income
46,724
56,232
(9,647)
139
37,157
43,991
(6,995)
161
537,826
219,386
141,473
54,780
88,745
32,779
(34,831)
29,630
(9,748)
127,427
8,408
21,250
295,084
140,092
102,741
57,150
14,957
22,061
8,573
32,062
(6,995)
5,665
21,519
FINANCIAL EXPENSES
Interest on loans and financing
Exchange variation
Exchange variation – Trade accounts payable
Exchange variation – Customers
Exchange variation – Loans
Exchange variation – Other
Present value adjustment - suppliers
Derivativos
Other expenses
(82)
(82)
(74)
(74)
(442,675)
(98,776)
(281,604)
(31,055)
(44,458)
(198,552)
(7,539)
(13,632)
(22,771)
(25,892)
(234,256)
(84,099)
(114,306)
(22,768)
(30,367)
(15,744)
(45,427)
(10,413)
(998)
(24,440)
46,642
37,083
95,151
60,828
NET FINANCIAL INCOME
CONSOLIDATED
06/30/15
06/30/14
24. Provision for income and social contribution taxes
The parent company and subsidiaries in Brazil assess income and social contribution taxes according to taxable income, except
for WEG Administradora de Bens Ltda, and Agro Trafo Administradora de Bens S,A,, which adopt profit computed as a percentage
of the Company's gross revenue, The provision for income tax was constituted at a 15% rate added of a 10% additional, and social
contribution with a 9% rate, Taxes for companies abroad are constituted according to the Law of each country,
Reconciliation of income and social contribution taxes
Income before taxes on profit
Statutory rate
IRPJ and CSLL calculated at the statutory rate
Adjustment to determine effective income and social contribution taxes:
Result from investments in subsidiaries
Rate difference on foreign results
Tax incentives
Reintegra
Interest on equity
Other adjustments
IRPJ and CSLL as per the income statement
Current tax
Deferred tax
Effective rate - %
COMPANY
06/30/15
06/30/14
507,370
433,328
34%
34%
CONSOLIDATED
06/30/15 06/30/14
643,850
552,905
34%
34%
(172,506)
(147,332)
(218,909)
(187,988)
157,901
14,231
(256)
(630)
(565)
(65)
135,686
11,268
(78)
(456)
(378)
(78)
(3,668)
(7,099)
42,940
4,850
49,780
2,271
(129,835)
(124,790)
(5,045)
(302)
(4,482)
32,920
37,252
5,121
(117,479)
(123,757)
6,278
0.12%
0.11%
20.17%
21.25%
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Version: 1
25. Insurance coverage
The corporate unit in Brazil is responsible for the management of the insurance portfolio of the WEG Group in Brazil
and abroad, establishing risk policies for the Group in order to protect its assets. The Company implemented the
Worldwide Insurance Program - WIP, through which the local insurance policies will be replaced by worldwide policies,
such as: transport risk (Export, Import and Domestic), Civil Product Liability, Civil Management's Liability (D&O),
Securety Insurance, General Civil Liability, Properties and Environment Pollution, Contractual Insurance and Risk
Engineering Installation and Assembly.
The insurance policies are issued only in multinational insurance companies first line and that can meet the WEG
Group in the countries where it has operations. The financial structure and sustainability of said insurance companies
are continuously monitored by the Brazilian corporate unit.
Below we highlight some of the policies and the due capital.
- Operating Risks (Equity): US$36 million;
- Loss of profits: US$13 million (for the paint and vanishes companies);
- Civil liability US$25 million;
- Civil liability products: US$ 50 million;
- Transport: US$ 5million per shipment (Import, Export and Domestic);
- Environmental pollution: US$20 million;
- Contractual Insurance: as stipulated in the contract;
- Risk Engineering Installation and Assembly: R$ 100 million Brazil, R$ 40 million Latin America (except Cuba) and
USD 5 million United States.
- Managers civil responsibility (D&O): US$ 30 milion.
26. Financial instruments
The Company and its subsidiaries carried out an evaluation of its financial instruments, including derivatives, recorded in the financial
statements presented the following values:
BOOK VALUE
06/30/15
12/31/14
MARKET VALUE
06/30/15
12/31/14
Cash and cash equivalents
Cash and banks
Short-term investments:
- Local currency
- Foreign currency
- SWAP
- Non Deliverable Forwards - NDF
Short-term investments
Total assets
3,771,495
374,017
3,397,478
3,178,495
64,258
154,378
347
938,866
4,710,361
3,328,015
302,346
3,025,669
2,916,630
65,299
42,590
1,150
866,209
4,194,224
3,771,495
374,017
3,397,478
3,178,495
64,258
154,378
347
938,866
4,710,361
3,328,015
302,346
3,025,669
2,916,630
65,299
42,590
1,150
866,209
4,194,224
Loans and financing:
- Local currency
- Foreign currency
- SWAP
Total liabilities
4,756,054
2,509,928
2,227,956
18,170
4,756,054
4,092,150
2,470,647
1,606,895
14,608
4,092,150
4,756,054
2,509,928
2,227,956
18,170
4,756,054
4,092,150
2,470,647
1,606,895
14,608
4,092,150
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ITR – Quarterly Information – 06/30/2015 – WEG S/A
Version: 1
The risk factors of financial instruments are relate to:
(i) Financial risks
Foreign currency risk
The Company and subsidiaries has import and export operations in various currencies, it manages and monitors its exposure to
foreign currency, seeking to balance its financial assets and liabilities within the limits established by Management,
The financial exposure limit (net) can be to equivalent to 2 months of exports in foreign currency as defined by the Company's
Board of Directors.
The Company had export operations totaling US$ 395.2 million (US$ 455.2 million in 2014), which acts as a natural hedge for
indebtedness and other costs tied to other currencies, especially US Dollars.
Risks related to debt charges
These risks arise from the possibility that the subsidiaries may suffer losses due to fluctuations in interest rates or other debt
indexes, which increase financial expenses related to loans and financings obtained in the market, or decrease financial
revenues relative to financial investments from subsidiaries, The Company continuously monitors the interest rates in the market
so as to evaluate the need, if any, of protection against the risk of volatility of said rates,
Derivative financial instruments
The Company and its subsidiaries have the following operations with derivative financial instruments:
a) NDF derivative financial instruments - Non Deliverable Forwards, with notional amount of:
(i) US$ 0.7 million, held by subsidiary WEG Austrália Pty Ltda, for the purpose of protecting exports from the fluctuation risks of
the exchange rates;
(ii) US$ 11.6 million, held by foreign subsidiary Zest Electric Motors (Pty) Ltd,, for the purpose of protecting its transactions
imports of products from the risks of fluctuations in exchange rates;
b) SWAP operations, in the notional amount of:
(i) EUR 10 million, held by its subsidiary Watt Drive Antriebstechnik GmbH, with the purpose of hedging financing from
fluctuation risks of Euribor;
(ii) US$ 12.9 million held by subsidiary WEG Equipamentos Elétricos S,A, to protect against Libor increase risks;
(iii) R$ 150 million, held by the subsidiary WEG Equipamentos Elétricos S,A,, SWAP from fixed to floating interest rate, to hedge
against decrease risk in interest rate,
(iv) US$ 385 million, held by the subsidiary WEG Equipamentos Elétricos S,A,, SWAP from protect the Prepayment Export
operations against the risk of fluctuation rates,
The Company's Management and that of its subsidiaries permanently monitors the derivative financial instruments contracted
through its internal controls.
The sensitivity analysis statement chart must be read jointly with the other financial assets and liabilities expressed in foreign
currency as at June 30, 2015, as the estimated impact of the foreign currency rate over the NDFs and on SWAPs presented
below will be offset, if effective, entire or partially, with loss of value of assets and liabilities.
Management has determined that, for the probable scenario (market value) should be considered the exchange rates used tomarket
of
financial
instruments,
valid
on
30
June
2015.
These
rates
represent
the
best estimate of the future behavior of prices and these represent the amount by which the positions could be settled at maturity.
The table below presents "cash and expense" effects of the results of financial instruments in real scenarios.
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ITR – Quarterly Information – 06/30/2015 – WEG S/A
a)
Version: 1
Operations of Non Deliverable Forwards - NDF:
Notional value Currency
(thousands)
Risk
Dollar Increase
Dollar Decrease
675 US$/AUD
11,559 US$/ZAR
12,234
Total of Dollar
Total
Market value at
Possible scenario 25% Remote scenario 50%
06/30/2015
Average
R$ Average
R$
Average
R$
price thousand
price thousand
price thousand
0.7654
12.2665
(15)
362
347
347
0.9568
9.1999
(546)
(8,694)
(9,240)
(9,240)
1.1481
6.1333
(2,086)
(17,751)
(19,837)
(19,837)
b) SWAP Operations:
Risk
Notional value
(thousands)
Market value at 06/30/15
Average price
R$ thousand
Possible scenario 25%
Average price
Possible scenario 50%
R$ thousand
Average price
R$ thousand
(10,152)
Interest 0.37% p.a.
(10,636)
Euribor Decrease
EUR 10.0
Interest 0.75% p.a.
(9,668) Interest 0.56% p.a.
Libor Increase
US$ 12.9
Interest 0.40% p.a.
(185) Interest 0.30% p.a.
(201) Interest 0.20% p.a.
(217)
CDI Decrease
R$ 150.0
Interest 13.68% p.a.
(2,394) Interest 17.09% p.a.
(2,796) Interest 20.51% p.a.
(3,186)
Dollar Decrease (*)
US$ 385.0
TOTAL
3.1026
148,455
136,208
2.3270
(110,273)
(123,422)
1.5513
(336,498)
(350,537)
(*) Coin swap with the purpose of protect US$ 385 million in PPE financial operations (prepaid export) that have at June 30, 2015,
the amount of R$ 174,172 in exchange rate.
The Company’s accounting records based on the market price as at June 30, 2015 according to the fair value and accrual method,
These operations had a net negative impact as at June 30, 2015 of R$ 103,873 (R$ 1,773 negative at June 30, 2014), which
were recognized in net income, The Company has no margins pledged in guarantee for derivative financial instruments
outstanding at June 30, 2015,
(ii) Operational risks
Credit risk
Risks arise from the possibility of the Company's subsidiaries not receiving the amounts related to sales or not receiving credit
from financial institutions regarding financial investments, To mitigate the risk from sales, the Company's subsidiaries analyze
the financial situation of their customers, as well as establish a credit limit and permanently assess their debtor balance,
Regarding financial investments, the Company and its subsidiaries invest in low risk credit institutions,
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Version: 1
27. Subsidies and assistance government
The Company obtained subventions in the amount of R$ 24,156 (R$ 18,990 at June 30, 2014) from tax incentives, recognized in
the year:
CONSOLIDATED
06/30/15
06/30/14
Total Subsidies and assistance government
a) WEG Amazônia S,A,
- ICMS incentive credit of 90.25%
- Corporate Income Tax (IRPJ) 75% reduction
b) WEG Linhares Equipamentos Elétricos S,A,
- ICMS incentive credit of 85%
- Corporate Income Tax (IRPJ) 75% reduction
- Municipal investment
d) WEG Logística Ltda,
- ICMS incentive credit of 75%
24,156
184
176
8
18,990
176
113
63
16,962
14,793
2,157
12
11,365
11,353
12
7,010
7,010
7,449
7,449
There are no contingencies tied to subsidies, and all of the conditions for obtaining government subsidies have been met.
28. Information by segment
Brazil
Foreign
Industry
6/30/15
Revenue from sale of products /
2,404,474
services
790,420
Earnings before income taxes
Depreciation / Amortization /
87,236
Depletion
6/30/15
3,201,084
Identifiable assets
804,575
Identifiable liabilities
Consolidated
Energy
6/30/14
6/30/15
2,225,266
679,553
1,087,9911
329,678
72,640
12/31/14
3,125,990
782,492
Eliminations and adjustments
27,754
6/30/15
1,552,755
515,283
6/30/14
6/30/15
6/30/14
6/30/15
6/30/14
6/30/15
6/30/14
800,784
267,573
2,278,991
98,450
1,683,123
71,763
(1,291,733)
(574,698)
(1,104,083)
(465,984)
4,479,723
643,850
3,605,090
552,905
21,793
12/31/14
1,509,993
599,922
36,821
6/30/15
3,409,259
1,123,111
24,633
12/31/14
2,663,313
823,931
6/30/15
113,662
(352,517)
12/31/14
180,628
(380,673)
151,811
6/30/15
8,276,760
2,090,452
119,066
12/31/14
7,479,924
1,897,672
Industry: single phase and triple phase motors with low and medium tension, drives and controls, equipment and services
for industrial automation, paints and varnishes,
Energy: electricity generators for thermal and hydraulic power plants (biomass), hydraulic turbines (PCHs), transformers,
substations, control panels and system integration services and solutions for renewable and distributed wind energy,
Foreign: composed by operations carried out by subsidiaries in other countries,
The adjustment and elimination column include the eliminations applicable to the Company in the context of the Consolidated
Financial Statements, All operating assets and liabilities are presented as identifiable assets and liabilities.
29. Earnings per share
a) Basic
Calculation of basic earnings per share is made by dividing net income, attributed to common shareholders, by the weighted
average number of common shares available during the year.
06/30/15
Profit attributed to Company shareholders
Weighted average number of outstanding common shares (shares /thousand)
Basic earnings per share - R$
506,740
1,613,305
0.31410
06/30/14
432,872
1,613,174
0.26834
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Version: 1
b) Diluted
Net earnings per share is calculated by dividing the net profit attributable to Company’s common shareholders by the weighted
average number of outstanding common shares for the year plus the weighted average number of common shares that
would be issued upon the conversion of all potential diluted common shares into common shares,
06/30/15
Profit attributed to Company shareholders
Weighted average of potentially diluted common shares held by shareholders(shares/thousand)
Basic and diluted earnings per share - R$
506,740
1,614,447
0.31388
06/30/14
432,872
1,614,454
0.26813
30. Statement of comprehensive income
The Company and its subsidiaries presents as other comprehensive income the values of accumulated translation
adjustment. These values are not taxable.
The presentation of the comprehensive income results is required by CPC 26 - Financial Statement Presentation (R1)
and includes the comprehensive results which correspond to revenue and expense items which are not recognized in the
financial statements as required or allowed by the standards, interpretations and guidance issued by the CPC.
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Version: 1
Quarterly Information Review Report
To the Shareholders and Board of Directors
Weg S.A.
Jaraguá do Sul - SC
Introduction
We have reviewed the interim financial statements, Individual and Consolidated, of Weg S.A. (“Company”)
contained within the Quarterly Information for the quarter ended June 30, 2014, which comprise the balance sheet
as of June 30, 2014 and the related statements of income and comprehensive income for the three and six months
period them ended and the changes in shareholders’ equity and cash flows for the six months period then ended,
including the notes to the financial statements.
Management is responsible for the preparation of the individual interim financial statements in accordance with the
technical pronouncement CPC 21(R1) – Interim financial statements, and the consolidated interim financial
statements in accordance with the technical pronouncement CPC 21(R1) and International Accounting Standard
(IAS) 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as
for the presentation of these interim financial statements in accordance with the standards issued by the Brazilian
Securities and Exchange Commission (CVM) applicable to the Quarterly Information. Our responsibility is to
express a conclusion on the interim financial statements based on our review.
Scope of the review
We conducted our review in accordance with Brazilian and international standards for reviewing interim financial
information (NBC TR 2410 and ISRE 2410 - Review of Interim Financial Information Performed by the Independent
Auditor of the Entity, respectively). An interim review consists principally of applying analytical and other review
procedures, and making enquiries of and having discussions with persons responsible for financial and accounting
matters. An interim review is substantially less in scope than an audit conducted in accordance with auditing
standards. An interim review does not provide assurance that we would become aware of any or all significant
matters that might be identified in an audit. Accordingly, we do not express such an audit opinion.
Conclusion about the individual interim financial statements
Based on our review, we are not aware of any fact that leads us to believe that the individual interim financial
statements included in the quarterly information referred to above have not been prepared, in all material respects,
in accordance with CPC 21(R1) applicable to the Quarterly Information and presented in accordance with the
standards issued by the Brazilian Securities and Exchange Commission.
Conclusion about the consolidated interim financial statements
Based on our review, we are not aware of any fact that leads us to believe that the consolidated interim financial
statements included in the quarterly information referred to above have not been prepared, in all material respects,
in accordance with CPC 21(R1) and IAS 34 applicable to the Quarterly Information and presented in accordance
with the standards issued by the Brazilian Securities and Exchange Commission.
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Version: 1
Other issues
Statements of value added
We have also reviewed the statements of value added, Individual and Consolidated, for the six months period ended
in June 30, 2015, prepared under the responsibility of the Company’s Management, whose disclosure in the interim
financial statements is required in accordance with the standards issued by the Brazilian Securities and Exchange
Commission (CVM) applicable to the preparation of the Quarterly Information and considered as supplemental
information by international accounting standards (IFRS), which do not require the disclosure of the statement of
value added. This statement was submitted to the same review procedures previously described and, based on our
review, we are not aware of any fact that would lead us to believe that they have not been fairly stated, in all material
respects, in relation to the interim financial statements, Company and Consolidated, taken as a whole.
Joinville, July 13, 2015
KPMG Auditores Independentes
CRC SC-000071/F-8
Marcelo Lima Tonini
Accountant CRC PR-045569/O-4 T – SC
51