ITR -Quarterly Information - 03/31/2015 - 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 03/31/2015
8
Statements of changes in equity - 01/01/2014 to 03/31/2014
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 03/31/2015
16
Statements of changes in equity - 01/01/2014 to 03/31/2014
17
Statements of value added
18
Comments on performance
19
Notes to financial statements
27
Opinions and Statements
Special Review Report – Unqualified
49
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Company information / Composition of capital
Number of shares
(Units)
Quarterly ended
03/31/2015
Paid-in capital
Common
Preferred
Total
807,176,538
0
807,176,538
Treasury stock
Common
542,250
Preferred
0
Total
542,250
PAGE: 1 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Company information / Cash dividends
Event
Approval
Earning
Board of Directors’
Meeting
03/24/2015
Interest on equity
First payment
08/12/2015
Type of share
Common
Class of share Earnings per share (Reais / Share)
0.07100
PAGE: 2 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Individual financial statements / Balance sheet Assets
(In thousands of reais)
Account
code
Account description
Current quarter
03/31/2015
Prior year
12/31/2014
1
Total assets
5,382,730
5,180,037
1.01
Current assets
1,014,846
1,023,924
1.01.01
Cash and cash equivalents
906,484
886,700
1.01.01.01
Cash and banks
76
24
1.01.01.02
Short-term investments
906,408
886,676
1.01.02
Long-term investments
59,182
57,699
1.01.06
Taxes recoverable
7,358
8,948
1.01.06.01
Current taxes recoverable
7,358
8,948
1.01.08
Other current assets
41,822
70,577
1.01.08.03
Other
41,822
70,577
1.01.08.03.01
Dividends
1,838
2,453
1.01.08.03.02
Interest on equity
39,984
68,124
4,367,884
4,156,113
8,352
3,987
1.02
Noncurrent assets
1.02.01
Long-term receivables
1.02.01.06
Deferred taxes
576
557
1.02.01.06.01
Deferred income and contribution taxes
576
557
1.02.01.09
Other noncurrent assets
7,776
3,430
1.02.01.09.03
Judicial deposits
7,776
3,430
1.02.02
Investments
4,354,848
4,147,413
1.02.02.01
Equity interest
4,354,848
4,147,413
1.02.02.01.02
Investments in subsidiaries
4,354,848
4,147,413
1.02.03
Property, plant and equipment
4,684
4,713
1.02.03.01
Property, plant and equipment in use
4,684
4,713
PAGE: 3 of 50
ITR – Quarterly Information – 03/31/2015 – 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
03/31/2015
5,382,730
75,881
4,810
4,810
10,409
10,409
10,409
60,662
60,662
60,333
329
4,188
114
114
114
4,074
5,302,661
3,533,973
(58,876)
2,049
(60,925)
3,684
670,277
47,736
630,929
(8,388)
196,778
530,407
530,407
426,418
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
PAGE: 4 of 50
ITR – Quarterly Information – 03/31/2015 – 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
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 period
01/01/2015 to 03/31/2015
Prior period
01/01/2014 to 03/31/2014
223,585
(1,081)
(529)
(552)
(661)
225,327
223,585
22,504
22,542
(38)
246,089
(230)
(249)
19
245,859
245,859
187,221
(818)
(488)
(330)
(750)
188,789
187,221
17,954
17,993
(39)
205,175
(288)
(221)
(67)
204,887
204,887
0.30480
0.25403
0.30456
0.25385
PAGE: 5 of 50
ITR – Quarterly Information – 03/31/2015 – 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 period
01/01/2015 to 03/31/2015
Prior period
01/01/2014 to 03/31/2014
245,859
235,016
235,016
480,875
204,887
(53,618)
(53,618)
151,269
PAGE: 6 of 50
ITR – Quarterly Information – 03/31/2015 – 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
6.03.02
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 03/31/2015
Prior period
01/01/2014 to 03/31/2014
15,343
21,033
246,089
29
(225,327)
242
(6,021)
(5,699)
22
(344)
331
273,126
274,609
(1,483)
(268,685)
(268,715)
30
19,784
886,700
906,484
19,234
16,635
205,175
29
(188,789)
220
2,178
3,266
(869)
(219)
421
250,922
250,922
(247,572)
(247,572)
22,584
870,906
893,490
PAGE: 7 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Individual financial statements / Statement of changes in equity - 01/01/2015 to 03/31/2015
(In thousands of reais)
Account
code
5.01
5.03
5.04
5.04.03
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
5.07
Account description
Opening balances
Adjusted opening balances
Capital transactions with shareholders
Recognized options granted
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
Closing balances
Paid-in
capital
3,533,973
3,533,973
3,533,973
Capital reserves,
Options granted and
Treasury stock
(54,481)
(54,481)
263
232
31
26
26
(55,192)
Income reserves
670,247
670,247
30
30
670,277
Retained earnings/
accumulated losses
167,494
167,494
(67,398)
(20)
(67,378)
264,202
245,859
18,343
18,343
(167,520)
(26)
(167,494)
196,778
Other comprehensive
income
740,152
740,152
216,673
216,673
235,016
(18,343)
956,825
Equity
5,056,385
5,056,385
(67,105)
212
61
(67,378)
480,875
245,859
235,016
235,016
(167,494)
(167,494)
5,302,661
PAGE: 8 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Individual financial statements / Statement of changes in equity - 01/01/2014 to 03/31/2014
(In thousands of reais)
Account
code
5.01
5.03
5.04
5.04.03
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
5.07
Account description
Opening balances
Adjusted opening balances
Capital transactions with shareholders
Recognized options granted
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
Closing balances
Paid-in
capital
2,718,440
2,718,440
2,718,440
Capital reserves,
Options granted and
Treasury stock
(54,012)
(54,012)
(2,479)
220
(2,699)
(12)
(12)
(56,503)
Income
reserves
1,005,903
1,005,903
1,005,903
Retained earnings/
accumulated losses
163,174
163,174
(51,824)
(51,824)
215,287
204,887
10,400
10,400
(163,162)
12
(163,174)
163,475
Other comprehensive
income
724,267
724,267
(64,018)
(64,018)
(53,618)
(10,400)
660,249
Equity
4,557,772
4,557,772
(54,303)
220
(51,824)
(2,699)
151,269
204,887
(53,618)
(53,618)
(163,174)
(163,174)
4,491,564
PAGE: 9 of 50
ITR – Quarterly Information – 03/31/2015 – 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 03/31/2015
Prior period
01/01/2014 to 03/31/2014
(436)
(103)
(333)
(436)
(29)
(29)
(465)
247,869
225,327
22,542
247,404
247,404
1,162
1,103
22
37
350
350
33
33
245,859
67,378
178,481
(489)
(158)
(331)
(489)
29
29
(460)
206,782
188,789
17,993
206,322
206,322
1,079
1,041
18
20
318
318
38
38
204,887
51,824
153,063
PAGE: 10 of 50
ITR – Quarterly Information – 03/31/2015 – 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
03/31/2015
12,951,305
9,046,596
3,787,607
421,591
3,366,016
883,585
2,054,676
2,054,676
1,909,593
189,977
189,977
221,158
221,158
3,904,709
155,231
1,118
1,118
68,602
68,602
85,511
51,129
17,770
16,612
8,222
1,002
1,002
7,220
3,037,608
3,037,608
703,648
93,473
93,473
610,175
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
PAGE: 11 of 50
ITR – Quarterly Information – 03/31/2015 – 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
03/31/2015
12,951,305
4,085,760
231,686
231,686
594,308
163,946
163,946
88,616
75,330
1,998,692
1,998,692
1,097,128
1,097,128
69,707
564,522
55,185
407,714
3,467,515
2,810,400
2,810,400
109,262
109,262
8,883
100,379
275,698
275,698
272,155
5,398,030
3,533,973
(58,876)
2,049
(60,925)
3,684
670,277
47,736
630,929
(8,388)
196,778
530,407
530,407
426,418
95,369
PAGE: 12 of 50
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
ITR – Quarterly Information – 03/31/2015 – 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
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
Atributed to shareholders of parent company
Atributed to non-controlling shareholders
Earnings per share - (Reais/share)
Basic earnings per share
3.99.01.01
Common shares
3.99.02
Diluted earnings per share
3.99.02.01
Common shares
Current period
01/01/2015 to 03/31/2015
2,130,291
(1,491,668)
638,623
(364,561)
(206,835)
(106,341)
(5,558)
(100,783)
3,511
(54,896)
274,062
41,679
519,628
(477,949)
315,741
(64,944)
(76,322)
11,378
250,797
250,797
245,859
4,938
Prior period
01/01/2014 to 03/31/2014
1,783,543
(1,213,122)
570,421
(329,583)
(196,661)
(88,703)
(4,814)
(83,889)
1,846
(46,065)
240,838
28,479
152,842
(124,363)
269,317
(61,986)
(70,669)
8,683
207,331
207,331
204,887
2,444
0.30480
0. 25403
0.30456
0. 25385
PAGE: 13 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Consolidated financial statements / Statement of comprehensive income
(In thousand of reais)
Account
code
Account description
Current period
01/01/2015 to 03/31/2015
Prior period
01/01/2014 to 03/31/2014
4.01
Consolidated net income for the period
250,797
207,331
4.02
Other comprehensive income
235,002
(53,997)
4.02.01
Adjustment of conversion period
235,002
(53,997)
4.03
Consolidated comprehensive income for the period
485,799
153,334
4.03.01
Attributed to shareholders of parent company
480,875
151,269
4.03.02
Attributed to noncontrolling shareholders
4,924
2,065
PAGE: 14 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
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
Write off fixed assets
Cumulative translation adjustments
Long-term financial investments
Premium on capital transaction
Acquisition of subsidiary
Acquisition of noncontrolling
Cash acquired from subsidiary
Net cash from financing activities
Funding of Borrowings obtained
Payment of loans and financing
Interest paid on loans and financing
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 03/31/2015
(10,038)
493,021
315,741
74,298
37,162
242
3,265
13,306
7,640
3,475
886
37,006
(517,568)
(412,496)
257,608
(196,376)
(72,419)
(93,885)
14,509
67,249
(120,293)
(9,098)
11,306
235,015
(18,494)
(34,576)
3,389
402,381
905,632
(187,469)
(48,565)
30
(267,247)
459,592
3,328,015
3,787,607
Prior period
01/01/2014 to 03/31/2014
403,976
410,367
269,317
58,805
35,425
220
2,639
4,431
1,527
(467)
1,111
37,359
(12,641)
118,511
50,259
(10,915)
(81,448)
(89,048)
6,250
(142,363)
(64,284)
(3,208)
490
(53,618)
132
(2,699)
(13,229)
(5,947)
(388,037)
16,382
(112,601)
(43,588)
(248,230)
(126,424)
3,373,799
3,247,375
PAGE: 15 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Consolidated financial statements / Statement of changes in equity - 01/01/2015 to 03/31/2015
(In thousand of reais)
Account
code
5.01
5.03
5.04
5.04.03
5.04.05
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
5.07
Capital reserves,
Paid-in
capital Options granted and
Treasury stock
Opening balances
3,533,973
(55,481)
Adjusted opening balances
3,533,973
(55,481)
Capital transactions with shareholders
263
Recognized options granted
232
Treasury shares sold
31
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
26
Realization of revaluation reserve
26
Dividends paid
Closing balances
3,533,973
(55,192)
Account description
Income
reserves
670,247
670,247
30
30
670,277
Other
Retained earnings/ comprehensive
accumulated losses
income
167,494
740,152
167,494
740,152
(67,398)
(20)
(67,378)
264,202
216,673
245,859
18,343
216,673
235,016
18,343
(18,343)
(167,520)
(26)
(167,494)
196,778
956,825
Equity
5,056,385
5,056,385
(67,105)
212
61
(67,378)
480,875
245,859
235,016
235,016
(167,494)
(167,494)
5,302,661
Non-controlling Consolidated
interest
equity
82,878
5,139,263
82,878
5,139,263
7,567
(59,538)
212
61
(263)
(67,641)
7,830
7,830
4,924
485,799
4,938
250,797
(14)
235,002
(14)
235,002
(167,494)
(167,494)
95,369
5,398,030
PAGE: 16 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Consolidated financial statements / Statement of changes in equity - 01/01/2014 to 03/31/2014
(In thousand of reais)
Account description
Account
code
5.01
5.03
5.04
5.04.03
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
Opening balances
Adjustment opening balances
Capital transactions with shareholders
Recognized options granted
Interest on equity
Goodwill on capital transaction
Other
Total comprehensive income
Net income for the period
Other comprehensive income
Adjustments of Translation for the period
Realization of deemed cost
Internal changes in equity
Realization of revaluation reserve
Dividends paid
Paid-in
capital
2,718,440
2,718,440
-
5.07
Closing balances
2,718,440
Capital
reserves,
Income
Options granted
reserves
and Treasury
Retained earnings/
stock
accumulated losses
(54,012)
1,005,903
163,174
(54,012)
1,005,903
163,174
(2,479)
(51,824)
220
(51,824)
(2,699)
215,287
204,887
10,400
10,400
(12)
(163,162)
(12)
12
(163,174)
(56,503)
1,005,903
163,475
Other
comprehensive
income
724,267
724,267
(64,018)
(64,018)
(53,618)
(10,400)
-
Equity
4,557,772
4,557,772
(54,303)
220
(51,824)
(2,699)
151,269
204,887
(53,618)
(53,618)
(163,174)
(163,174)
Non-controlling
interest
84,495
84,495
(8,601)
(1,320)
(7,281)
2,065
2,444
(379)
(379)
-
Consolidated
equity
4,642,267
4,642,267
(62,904)
220
(53,144)
(2,699)
(7,281)
153,334
207,331
(53,997)
(53,997)
(163,174)
(163,174)
660,249
4,491,564
77,959
4,569,523
PAGE: 17 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
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 03/31/2015
2,428,367
2,426,663
3,174
(1,470)
(1,362,563)
(1,347,893)
(14,670)
1,065,804
(74,298)
(74,298)
991,506
519,628
519,628
1,511,134
1,511,134
445,361
380,075
46,386
18,900
328,152
297,386
27,685
3,081
486,824
477,538
9,286
250,797
67,378
178,481
4,938
Prior period
01/01/2014 to 03/31/2014
2,062,514
2,065,039
962
(3,487)
(1,181,797)
(1,175,548)
(6,249)
880,717
(58,805)
(58,805)
821,912
152,842
152,842
974,754
974,754
354,413
296,827
38,930
18,656
279,796
248,633
28,908
2,255
133,214
123,816
9,398
207,331
51,824
153,063
2,444
PAGE: 18 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Highlights
ƒ
ƒ
ƒ
ƒ
Net operating revenues in the first quarter of 2015 reached R$ 2,130.3 million, for 19.4% growth over the
1Q14 and decrease of 2.3% over the 4Q14;
EBITDA reached R$ 348.4 million and EBITDA margin reached 16.4%. In relation to the same quarter
last year EBITDA grew by 16.3%, while compared to the previous quarter there was fall of 9.0%;
Net Income totaled R$ 245.9 million, with net margin of 11.5% and growth of 20.0% over the 1Q14 and
decrease of 6.6% over the 4Q14;
Investments in fixed assets totaled R$ 120,1 million in the first three months of 2015, being 71% in
industrial plants in Brazil and 29% in expansion projects abroad.
Key Figures
Net Operating Revenue
Domestic Market
External Markets
External Markets in US$
Gross Operating Profit
Gross Margin
Net Income
Net Margin
EBITDA
EBITDA Margin
EPS (adjusted for splits)
Q1 2015
Q4 2014
2,130,291
1,027,854
1,102,437
385,011
638,623
30.0%
245,859
11.5%
348,361
16.4%
0.15240
2,179,695
1,086,902
1,092,793
429,332
698,218
32.0%
263,285
12.1%
382,987
17.6%
0.16321
%
Q1 2014
-2.3%
-5.4%
0.9%
-10.3%
-8.5%
-6.6%
-9.0%
-6.6%
%
1,783,543
895,446
888,097
375,677
570,421
32.0%
204,887
11.5%
299,643
16.8%
0.12702
19.4%
14.8%
24.1%
2.5%
12.0%
20.0%
16.3%
20.0%
FIgures in R$ Thousands
Economic Activity and Industrial Production
The beginning of 2015 showed little change in the landscape of the global economic activity recovery, which
remained low and relatively uneven across the world. Industrial activity, as measured by the purchasing manager
indexes (PMI) showed continued recovery in the US, albeit at a slower pace, a movement that had already been
noted at the end of 2014. In Europe, Germany’s PMI continued to show consistent expansion, diminishing fears
of a possible slowdown or recession. In China, the indicator contunied to oscillate around neutral readings, in line
with the slower pace of economic expansion
Manufacturing ISM Report on Business ® (USA)
Markit/BME Germany Manufacturing PMI®
HSBC China Manufacturing PMI™
March 2015
51.5
52.8
49.6
February 2015
52.9
51.1
50.7
January 2015
53.5
50.9
49.7
In Brazil, after a year with virtually no GDP growth, we observed further loss of dynamism and forecasts of around
1% fall in GDP in 2015. Industrial activity in the first two months of 2015 showed strong slowdown, with the
industrial production showing 7.1% drop in the period, according the survey by the Instituto Brasileiro de
Geografia e Estatística (IBGE).
PAGE: 19 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Industrial Indicators According to Categories of Use in Brazil
Change (%)
Categories of Use
Feb 15 / Jan 15* Feb 15 / Feb 14
Capital Goods
Intermediary Goods
Consumer Goods
Durable Goods
Semi-durable and non-durable
General Industry
-4.1
-0.1
-0.4
-0.4
-0.5
-0.9
-25.7
-4.0
-13.4
-25.8
-8.9
-9.1
Acummulated
On Year
12 months
-21.1
-3.2
-10.3
-20.1
-6.9
-7.1
-13.5
-3.0
-4.6
-13.4
-1.7
-4.5
Source: IBGE, Research Office, Industry Coordination
(*) Series with seasonal adjustments
Although the data show deacreses in industrial production in all major economic categories, the data is heavily
influenced by the automobile industry production and do not necessarily reflect the conditions in other segments.
For example, capital goods category fell by 21.1% in the period, which was determined by heavy vehicles
production. This performance, however, did not seem representative of neither the performance we observed in
our own product line or that of our customers, which are influenced by factors different from those of that influence
the automotive market.
Net Operating Revenue
Net Operating Revenues totaled R$ 2,130.3 million in the first quarter of 2015 (1Q15), for 19.4% growth over the
first quarter of 2014 (1Q14) and 2.3% decrease over the fourth quarter of 2014 (4Q14). Adjusting net revenues
for transactions occurred in the period, organic growth was of 14.5% over 1Q14.
Net Operating Revenue per Market (R$ million)
2,180
2,130
52%
50%
52%
2,056
1,784
1,822
50%
51%
50%
49%
48%
50%
48%
Q1 14
Q2 14
Q3 14
Q4 14
Q1 15
Brazilian Market
External Market
The first quarter is traditionally a period of slower activity, due to the lower number of working days and market
behavior. Nevertheless, we maintained healthy growth in the quarter, showing that the diversification and
expansion investments allow us to find and discover opportunities even under unfavorable macroeconomic
scenarios. In Brazil, we continue to see growing momentum in the energy generation, transmission and
distribution equipment markets, offsetting the poor performance of investments in expansion of industrial capacity
and of consumer goods. Outside Brazil we continued to execute our strategy to expand the product line and our
presence, with good results. The consolidation of the WEG brand among leading capital goods manufacturers
and consumers in the world allows us to increase the scope of our offering of goods and services and provide
increasingly integrated systems.
PAGE: 20 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Net Operating Revenue breaks down as follows in the 1Q15:
ƒ
Brazilian Market: R$ 1,027.9 million, representing 48% of Net Operating Revenue, with 14.8% growth
over 1Q14 and decrease of 5.4% over 4Q14. Organic growth in the Brazilian market, excluding the
transaction in the last 12 months, was 14.4% over 1Q14;
ƒ
External Markets: R$ 1,102.4 million, equivalent 52% of Net Operating Revenue. The comparison in
Brazilian Reais shows growth of 24.1% over the same period last year and of 0.9% over the previous
quarter. Considering the average US dollar for the quarter, comparison shows growth of 2.5% compared
to 1Q14 and considering the local currency of each market, the comparison shows growth of 16.8% over
1Q14. Organic growth in the external markets was 14.7% over 1Q14.
Evolution of Net Revenues according to Geographic Market (R$ Million)
Q1 2015
Net Operating Revenues
- Brazilian Market
- External Markets
- External Markets in US$
2,130.3
1,027.9
1,102.4
385.0
Q4 2014
2,179.7
1,086.9
1,092.8
429.3
%
Q1 2014
-2.3%
-5.4%
0.9%
-10.3%
1,783.5
895.4
888.1
375.7
%
19.4%
14.8%
24.1%
2.5%
External Market – Distribution of Net Revenues according Geographic Market
North America
South and Central America
Europe
Africa
Australasia
Q1 2015
Q4 2014
%
35.8%
17.7%
24.7%
10.5%
11.3%
38.7%
13.7%
24.6%
11.4%
11.6%
-2.9
4.0
0.1
-0.9
-0.3
pp
pp
pp
pp
pp
Q1 2014
%
36.0%
15.5%
26.5%
13.1%
8.9%
-0.2
2.2
-1.8
-2.6
2.4
pp
pp
pp
pp
pp
Distribution of Net Revenues per Business Area
Electro-electronic Industrial Equipments
Q1 2015
Q4 2014
%
Q1 2014
%
52.1%
59.5%
-7.4 pp
57.7%
-5.7 pp
Domestic Market
18.5%
24.0%
-5.5 pp
23.0%
-4.5 pp
External Market
33.5%
35.4%
-1.9 pp
34.7%
-1.2 pp
Energy Generation , Transmission and Distribution
29.0%
21.5%
7.4 pp
23.5%
5.4 pp
Domestic Market
18.4%
13.8%
4.6 pp
12.8%
5.6 pp
External Market
10.6%
7.8%
2.8 pp
10.8%
-0.2 pp
Electric Motors for Domestic Use
13.7%
14.1%
-0.4 pp
12.4%
1.4 pp
Domestic Market
6.7%
7.7%
-0.9 pp
8.8%
-2.1 pp
External Market
7.0%
6.4%
0.6 pp
3.6%
3.5 pp
Paints and Varnishes
5.2%
4.9%
0.4 pp
6.4%
-1.1 pp
Domestic Market
4.6%
4.4%
0.2 pp
5.6%
-1 pp
External Market
0.6%
0.5%
0.2 pp
0.7%
-0.1 pp
PAGE: 21 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Business Areas
The Industrial Electro-Electronic Equipment area showed a slight increase in net operating revenue, with the
performance in external markets being the highlight. The domestic market has been characterized by slow
growth, driven primarily by investments in capacity maintenance, with the few relevant projects of capacity
expansion concentrated in specific segments. The depreciation of the Brazilian Real improves the competitive
conditions in less value added activities, but has little short-term impact on the competitiveness of higher added
value manufactured products.
We strive to maintain our competitiveness regardless of the exchange rate levels and other macroeconomic
variables that are not under our control. Still, the recent Brazilian Real devaluation offers us, even if temporarily,
favorable conditions to execute our expansion strategy abroad. Besides the production platform expansion
outside Brazil, with new units for the electric motors production in Mexico and China, we have increased sales
efforts (personnel, services, infrastructure, etc.). With this, we seek to convert the temporary increase of
competitiveness in a structurally stronger position. The result is that we have managed to grow in almost all
markets in which we operate, including those where the market itself is not expanding. It is important to note that
in some cases, due to currency fluctuations, the growth in local currency does not translate into US dollars
denominated growth.
The Energy Generation, Transmission and Distribution (GTD) business area continues to expand at
accelerated pace. The successful introduction of our wind generation product, as well as the better pricing
conditions for electricity sales in the regulated auctions, with impacts on generation systems such as small
hydroelectric plants (PCH), has been instrumental in this performance. In transmission and distribution (T&D) the
demand conditions remained favorable, although competition remains fierce. But the prospects in this area are
positive, with the execution of the current order book and the expectation of new businesses, both in generation
with PCH, wind, solar and return of investments in biomass, as with the additional demand that the new
generation creates for T&D.
In the Motors for Domestic Use area we see strong growth due almost entirely to the consolidation of revenues
from the Sinya / CMM acquisition in China. The Brazilian market performance was weak, with worsening on credit
supply and disposable income for consumption. The electricity rates increases should, in this market, have
additional negative impact on demand, with consumers avoiding new electricity consumption sources. On the
other hand, we advanced in the internationalization and we have a complete portfolio of products, able to serve
our customers in all major global markets.
Finally, the Paints and Varnishes business area continued to weather the weak performance of Brazilian
industrial sector and showed negative performance. With operational structure adjusted to market conditions, the
strategy in this business area remains to diversify and leverage cross-selling opportunities.
Cost of Goods Sold
Cost of Goods Sold (COGS) totaled R$ 1,491.7 million in 1Q15, 23.0% above 1Q14 and 0.7% above 4Q14.
Gross margin reached 30.0%, with reduction of 2.0 precentage points over 1Q14, and reduction of 2.1
precentage points over 4Q14.
The impacts on gross margin were: (i) cost increses on raw material denominated in or referenced to the US
dollar , and; (ii) change in product mix, with relative increase of wind generation systems that incorporate
subsystems that are not manufactured by WEG and therefore have lower operating margins. It is important to
remember that these lower margins in wind generation systems are offset by lower capital intensity. From the
point of view of return on capital, this is an attractive business for WEG.
PAGE: 22 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Labor
21%
Q1 15
Version: 1
Other Costs
8%
Depreciation
4%
Depreciation
4%
Other Costs
9%
Q1 14
Labor
23%
Materials
65%
Materials
65%
Average London Metal Exchange (LME) spot copper prices fell by 17.0% in 1Q15 compared to the average of
1Q14 and fell by 12.0% compared to the average of 4Q14. Steel prices in the international markets also continue
to fall, 23% lower compared to 1Q14 and 8.3% lower compared to 4Q14. These variations values are
denominated in US dollars, which means that prices in Brazilian Reais incorporate 21% devaluation over 1Q14
and 13% devaluation over 4Q14, i.e., Brazilian Reais denominated prices continued to rise.
Selling, General and Administrative Expenses
Consolidated selling, general and administrative expenses (SG&A) totaled R$ 313.2 million in 1Q15, 9.7%
growth over the 1Q14 and fall by 5.2% over the previous quarter. As a percentage of Net Operating Revenue,
operating expenses represented 14.7% in 1Q15, 1.3 percentage points lower than 16.0% of the 1Q14 and 0.5
percentage points lower than 15.2% of the 4Q14.
EBITDA and EBTIDA Margin
In this 1Q15, EBITDA (according to the Instruction CVM 527/2012) totaled R$ 348.4 million, 16.3% growth over
the 1Q14 and fall by 9.0% over the 4Q14. EBITDA margin reached 16.4%, 0.4 percentage points lower than
1Q14 and 1.2 percentage points lower than 4Q14.
Q1 2015
Net Operating Revenues
Net Income before Minorities
Net Margin
(+) Income taxes & Contributions
(+/-) Financial income (expenses)
(+) Depreciation & Amortization
EBITDA
EBITDA Margin
2,130.3
250.8
11.8%
64.9
-41.7
74.3
348.4
16.4%
Q4 2014
%
2,179.7 -2.3%
264.3 -5.1%
12.1%
82.0 -20.8%
-31.2 33.7%
9.6%
67.8
383.0 -9.0%
17.6%
Q1 2014
%
1,783.5 19.4%
207.3 21.0%
11.6%
4.8%
62.0
-28.5 46.3%
58.8 26.3%
299.6 16.3%
16.8%
Figures in R$ Million
Net Financial Results
In this quarter, net financial result was positive in R$ 41.7 million (positive result of R$ 28.5 million and R$ 31.2
million in 1Q14 and 4Q14, respectively). Financial revenues totaled R$ 519.6 million in 1Q15 (R$ 152.8 million
and R$ 282.2 million, respectively), while, financial expenses totaled R$ 477.9 million (R$ 124.4 million and R$
251.1 million).
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The absolute growth of both financial revenues and expenses is the result of the exchange rate variations on
trade finance transactions, with are denominated in other currencies and swaps into Brazilian Reais. Net
financial result growth of 46.3% over the previous year is a result of increase in interest rates on financial
instruments in Brazilian maket due to the good credit rating of WEG.
Income TAX
Income Tax and Social Contribution on Net Profit provision in 1Q15 reached R$ 76.3 million (R$ 70.7 million
and R$ 70.1 millin in 1Q14 and 4Q14, respectively). Additionally, R$ 11.4 million were recorded as “Deferred
Income Tax / social contribution” debt (debt of R$ 8.7 million and credit of R$ 11.9 million, respectively). The
effective tax rate on income remained within the usual standards.
Net Income
As a result of aforementioned impacts, net income for 1Q15 was R$ 245.9 million, an increase of 20.0% over
1Q14 and fall by 6.6% over the previous quarter. Net margin for the quarter was 11.5%, virtually unchanged
from the same period 2014.
Cash Flow
402.4
3,328.0
Cash December 2014
(10.0)
67.2
Operating
Investing
3,787.6
Financing
Cash March 2015
In the first three months of 2015, cash flow operating activities was negative in R$ 10.0 million, reversing the
positive cash generation observed in 2014. This movement is explained by the impact of exchange rate
changes on working capital accounts (inventories, accounts payable and receivable). This larger apparent
consumption of cash was partially offset by increased operating cash generation.
On the other hand, the accounting of exchange rate changes as "Cumulative translation adjustment" generated
cash in investing activities, despite the acceleration of investments in new industrial plants in China and
Mexico. Thus, we generated R$ 67.2 million in investing activities, reversing the cash consumption observed in
2014.
Financing activities generated R$ 402.4 million in the period, with R$ 905.6 million in financing raised in
attractive terms and interest rates, and R$ 187.5 million in amortization of financing (net increase R$ 718.2
million), and R$ 267.2 million in paid dividends and interest on stockholders’ capital reffering to the second half
of 2014.
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Investments
Outside Brazil
Brazil
132.3
94.0
64.3
8.4
55.9
Q1 14
60.5
134.1
120.1
47.9
34.3
23.5
70.6
71.8
Q2 14
Q3 14
86.2
85.8
Q4 14
Q1 15
Figures in R$ Thousands
The new cycle of investments in capacity expansion and modernization, started in 2014, with new electric motors
production units in Mexico and China, continued to run at full speed in the first quarter. In addition to these, we
continue to execute other investments in industrial plants and other installations in Brazil, which consumed 71%
of the R$ 120.1 million invested in the first three months of the year. In addition, we incorporate R$ 1.4 million in
fixed assets resulting from Efacec acquisition, which was consolidated this year
Our program for 2015 foresees investments of R$ 477.6 million in capacity expansion and modernization. As
always point out, we have flexibility in implementing these investments, which are planned and carried out in
modular increments of capacity, responding to incresead demand and to maximizing the return on Invested
capital.
Debt and Cash Position
On March 31, 2015 cash, cash equivalents and financial investments totaled R$ 4,672.3 million, entirely in fixed
income instruments linked to the CDI, in short-term and invested in Brazilian currency in first-tier banks. Gross
financial debt totaled R$ 4,809.1 million, being 42% in short-term and 58% in long-term.
March 2015
December 2014
March 2014
Cash & Financial instruments
4,672,310
4,194,224
3,249,472
- Current
- Long Term
4,671,192
1,118
4,193,177
1,047
3,247,375
2,097
Debt
4,809,092
100%
4,092,150
100%
3,106,557
100%
- Current
1,998,692
42%
1,466,752
36%
914,246
29%
- In Brazilian Reais
- In other currencies
- Long Term
1,181,347
779,146
503,749
817,345
687,606
410,497
2,810,400
58%
2,625,398
2,192,311
1,342,978
- In other currencies
1,467,422
923,990
215,787
(136,782)
102,074
142,915
Net Cash (Debt)
1,701,408
64%
- In Brazilian Reais
71%
1,976,524
Figures in R$
Thousands
At the end of the 1Q15, WEG had R$ 136.8 million net debt, reversing the net cash position of R$ 102.1 million
on December 31, 2014. We continue to take advantage of existing attractive market conditions for companies
with our credit profile to attract new funding. The characteristics of the debt are:
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ITR – Quarterly Information – 03/31/2015 – WEG S/A
ƒ
ƒ
Version: 1
The total duration debt is 23.8 months and the long-term portion is 37.2 months. Duration portion
denominated in Brazilian Reais is 18.1 months and for the portion in foreign currencies is 30 months.
The weighted average cost of fixed-rate denominated in Brazilian Reais is approximately 6.2% per
year. Floating rate contracts are indexed mainly by Brazilian long-term interest rate (TJLP).
Dividends and interest on stockholder`s equity
On March 24, 2015, the Board of Directors approved the payment to shareholders, as interest on stockholders’
equity (JCP), totaling R$ 67.4 million before deduction of income tax at source, payable on August 12, 2015.
Our policy is to declare interest on stockholders equity quarterly and declare dividends based on profit earned
each semestre, thus, we reported six diferent earnings each year, which is paid semiannualy.
WEGE3 Share Performance
The common shares issued by WEG, traded under the code WEGE3 at BM&F Bovespa, ended the last trading
session on March 2015 quoted at R$ 31.80, with nominal gain of 3.9% in the year and gain of 4.9% considering
the dividends and interest on stockholders equity declared in the period. At the Ordinary and Extraordinary
General Shareholders Meeting held on March 31, 2015 approved the stock split the ratio of two shares for each
existing share, from April 1, 2015 the shares were traded ex-split.
3.500
18,00
Shares Traded (thousands)
WEGE3
16,00
3.000
14,00
WEGE3 share prices
10,00
2.000
8,00
1.500
6,00
Traded shares (thousands)
2.500
12,00
1.000
4,00
500
2,00
0,00
0
The average daily traded volume in 1Q15 was R$ 21.8 million, (R$ 15.6 million in 1Q14). Throughout the quarter
167,244 stock trades were carried out (133,501 stock trades in 1Q14), involving 42.1 million shares and moving
R$ 1,330.5 million (R$ 938.6 million in 1Q14).
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Version: 1
WEG S.A.
Notes to financial statements
At March 31, 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. 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 April 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 12.31.2014.
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.
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4. Cash and cash equivalents
COMPANY
03/31/15
12/31/14
a) Cash and banks
b) Short-term investments
In local currency
Bank Deposit Certificate (CDB), Repurchase operation
and Investment funds
In foreign currency
Certificates of Deposits Abroad,
Other balances held abroad
SWAP
NDF - “Non Deliverable Forwards”
TOTAL
CONSOLIDATED
03/31/15
12/31/14
76
906,408
906,408
24
886,676
886,676
421,591
3,366,016
3,114,832
302,346
3,025,669
2,916,630
906,408
906,484
886,676
886,700
3,114,832
52,206
27,289
24,917
197,354
1,624
3,787,607
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% and 103.5% of CDI at December 31, 2014).
Investments abroad:
CONSOLIDATED
Original
currency value
Interest Rate
In Euros
In US Dollars
In others currency
TOTAL
0.005% - 0.08% p.a
0.20% - 0.25% p.a
1.6% - 20.65% p.a
2,426
11,361
Sundry
03/31/15
12/31/14
5,026
22,263
24,917
52,206
5,410
18,102
41,787
65,299
5. Short-term Investments
COMPANY
03/31/15
12/31/14
Certificate of deposit and repurchase operations
Others
TOTAL
Current assets
Noncurrent assets
59,182
59,182
59,182
-
57,699
57,699
57,699
-
CONSOLIDATED
03/31/15
12/31/14
883,585
1,118
884,703
883,585
1,118
865,162
1,047
866,209
865,162
1,047
The Company and its subsidiaries have investments in the amount of R$ 883,585 which are interest at rates from
100% to 105.3% of CDI
6. Trade accounts receivable
CONSOLIDATED
03/31/15
12/31/14
a) Breakdown of balances
Domestic Market
External Market
SUBTOTAL
Present value adjustment
Allowance for losses on trade receivables
TOTAL
951,733
1,150,143
2,101,876
(4,239)
(42,961)
2,054,676
986,990
921,931
1,908,921
(1,361)
(39,696)
1,867,864
PAGE: 28 of 50
ITR – Quarterly Information – 03/31/2015 – 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
2,386
1,839,210
111,431
151,235
2,101,876
The changes of provision with losses on trade accounts receivable is as follows:
Balance at 01/01/2014
Losses written-off
Setting up of provisions
Balance at 12/31/2014
Losses written-off
Setting up of provisions
Reversal of provisions
Balance at 03/31/2015
5,020
1,652,153
111,114
145,654
1,908,921
(27,973)
5,020
(16,743)
(39,696)
2,386
(7,884)
2,233
(42,961)
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
The changes of provision for slow moving is as follows:
Balance at 01/01/2014
Setting up of provisions
Reversal write-off
Balance at 12/31/2014
Setting up of provisions
Reversal write-off
Balance at 03/31/2015
CONSOLIDATED
03/31/15
12/31/14
395,471
319,997
355,238
314,885
308,120
300,553
56,198
43,777
(11,634)
(10,882)
1.103.393
968,330
486,073
161,658
193,419
(34,950)
806,200
492,000
123,208
149,443
(28,062)
736,589
1,909,593
1,704,919
(33,407)
(6,914)
1,377
(38.944)
(8.245)
605
(46.584)
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.
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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
03/31/15
12/31/14
7,358
8,948
7,358
8,948
7,358
8,948
-
CONSOLIDATED
03/31/15
12/31/14
30,183
29,827
81,525
65,209
2,841
2,647
23,312
20,446
20,840
16,619
15.991
15,918
19.420
11,248
10,834
13,441
2,801
3,312
207,747
178,667
189,977
159,446
17,770
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
Commercial transactions were conducted 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
Amount of outstanding balances
BALANCE SHEET
Current liabilities
Agreements with directos/officers
Noncurrent liabilities
Management of financial resources
WEG Equipamentos Elétricos S.A.
03/31/15
12/31/14
03/31/15
12/31/14
-
-
7,172
7,172
3,075
3,075
114
873
-
-
114
873
-
-
COMPANY
INCOME STATEMENT
Management compensation:
a) Fixed (fees)
Board of Directors
Executive Board
b) Variable (profit sharing )
Board of Directors
Executive Board
CONSOLIDATED
03/31/15
03/31/14
03/31/15
03/31/14
529
488
5,558
4,814
230
299
255
233
460
5,098
510
4,304
327
420
2,698
3,507
142
185
219
201
285
2,413
403
3,104
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;
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;
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The credit/debit contracts entered into with managements 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 sponsor in loan operations and provide guarantee to customers
(Performance Bond, guarantee insurance, etc.);
d) Securities and guarantees
WEG SA has securities and guarantees to subsidiaries abroad, in the amount of US$ 175,9 million (US$ 190,5
million at December 31, 2014);
e) Management compensation
Board of Directors members were paid the amount of R$ 460 (R$ 510 at March 31, 2014) and the executive officers
were paid the amount of R$ 5,098 (R$ 4,304 at March 31, 2014), for their services, aggregating the total of R$ 5,558
(R$ 4,814 at March 31, 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 refers to the Return on Invested Capital (50% equals), an increase of net
operating revenue (25% equals) and EBITDA growth (25% equals). The corresponding provision is recognized in the
income statement in the amount of R$ 2,698 (R$ 3,507 on March 31, 2014) under the caption other operating income.
The Directors receive additional corporate benefits such as medical and dental care, 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:
Provisions:
Labor and civic 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
Services from third
Employee profit sharing
Others
Adjustment of transition tax regime
Accelerated depreciation incentive - Law n° 11.196/05
Deemed cost of PP&E
TOTAL
Noncurrent assets
Noncurrent liabilities
COMPANY
03/31/15
12/31/14
69
58
CONSOLIDATED
03/31/15
12/31/14
39,631
31,775
8,133
8,361
1,385
672
(52)
(1,498)
576
1,355
704
(52)
(1,508)
557
50,703
26,788
5,415
9,435
16,406
9,856
48,142
15,474
4,878
(175,229)
(6,727)
(260,001)
(207,096)
47,024
26,350
5,210
8,471
16,165
10,191
46,420
8,303
7,935
(169,806)
(6,387)
(267,137)
(227,125)
576
-
557
-
68,602
(275,698)
55,864
(282,989)
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.
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The estimated realization of tax losses is founded based on the projection of the discounted cash flow, calculated
periodically with premises in accordance with the prospects of each business.
11. Investments
11.1. Investments in subsidiaries
P&L
Country
Equity
Investment in Capital (%)
Ajusted
Sharehol
ders’
equity
03/31/15
Direct
12/31/14
Indirect
Direct
03/31/15
Book Value
12/31/14
03/31/15
12/31/14
Indirect
(*)
WEG Equipamentos Elétricos S.A.
3,697,224
201,774
100.00
-
100.00
-
197,147
164,001
3,697,224
3,502,936
RF Reflorestadora Ltda.
163,065
1,104
100.00
-
100.00
-
1,104
1,258
163,064
169,296
WEG Tintas Ltda.
117,541
5,667
99.91
0.09
99.91
0.09
5,662
6,124
117,432
114,441
WEG Amazônia S.A.
46,205
2,482
0.02
99.98
0.02
99.98
-
-
7
7
WEG Administradora de Bens Ltda.
36,024
565
3.53
96.47
4.41
95.59
(116)
29
1,273
1,095
WEG Logística Ltda.
102,683
4,342
-
100.00
-
100.00
-
-
-
-
WEG Linhares Equips. Elétricos S.A.
194,422
20,793
-
100.00
-
100.00
-
-
1
1
WEG Drives & Controls Aut. Ltda.
391,784
20,451
89.20
10.80
89.20
10.80
18,242
16,600
349,471
339,277
9
-
-
99.90
-
99.90
-
-
-
-
WEG-Cestari Redut. Motorredut. S.A.
40,560
2,050
-
50.00
-
50.00
-
-
-
-
WEG Automação Critical Power Ltda.
39,046
333
0.03
99.97
0.03
99.97
-
1
11
11
Hidráulica Indl. S.A. Ind. e Com.
47,498
925
-
62.32
-
62.32
-
-
-
-
Agro Trafo Adm. de Bens S.A.
10,719
2,692
91.75
8.25
91.75
8.25
2,470
74
9,835
6,548
Injetel Ind. Com. Comp. Plásticos
Ltda.
4,301
10
-
100.00
-
100.00
-
-
-
-
Ind. de Tintas e Vernizes Paumar
S.A.
126,463
(1,439)
-
100.00
-
100.00
-
-
-
-
WEG-Jelec Oil and Gas Sol. Aut.
Ltda.
10
(1)
-
100.00
-
100.00
-
-
-
-
5,644
95
0.01
99.99
-
-
-
-
-
-
206,703
3,783
-
100.00
-
100.00
-
-
-
-
3,177
(393)
-
76.09
-
76.09
-
-
-
-
2,338
(1,362)
-
100.00
-
100.00
-
-
-
-
WEG Transf. África (Pty) Ltd.
7,290
104
-
100.00
-
100.00
-
-
-
-
Electric/Instrumentations Eng.
Cont.(Pty)
22,502
167
-
86.67
-
86.67
-
-
-
-
48,582
(994)
-
100.00
-
100.00
-
-
-
-
4,327
(422)
-
100.00
-
100.00
-
-
-
-
WEG Partner Aerogeradores S.A.
Brazil
Transformadores do Nordeste Ltda.
Zest Electric Motors (Pty) Ltd.
Zest Energy (Pty) Ltd.
Shaw Controls (Pty) Ltd.
South Africa
WEG (Germany) GmbH
Germany
Watt Drive GmbH
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Wurttembergische Elektromotoren
GmbH
10,366
163
-
100.00
-
100.00
-
-
-
-
Antriebstechnik KATT Hessen GmbH
10,388
222
-
100.00
-
-
-
-
-
-
WEG Equipamientos Electricos S.A.
97,781
7,826
10.44
89.55
10.44
89.55
819
717
10,303
8,207
2,060
-
-
100.00
-
100.00
-
-
-
-
74
-
-
100.00
-
100.00
-
-
-
-
20,255
(500)
-
100.00
-
100.00
-
-
-
-
403
(1,992)
-
100.00
-
100.00
-
-
-
-
326
153
-
100.00
-
100.00
-
-
-
-
674,138
5,663
-
100.00
-
100.00
-
-
-
-
Belgium
43,999
991
-
100.00
-
100.00
-
-
-
-
Chile
34,085
98
8.00
92.00
8.00
92.00
8
(80)
2,765
2,350
132,236
18
-
100.00
-
100.00
-
-
-
-
Changzhou Machine Master Co., Ltd.
41,334
(2,376)
-
100.00
-
100.00
-
-
-
-
Changzhou Master Machinery Co.,
Ltd.
(859)
(88)
-
100.00
-
100.00
-
-
-
-
Changzhou Sinya Electromotor Co.,
Ltd.
41,147
241
-
100.00
-
100.00
-
-
-
-
40,540
(3,816)
-
100.00
-
100.00
-
-
-
-
Wuxi Ecovi Technology Co., Ltd.
(4,234)
507
-
100.00
-
100.00
-
-
-
-
Jiangsu Shiya Elect. Technolog. Co.,
Ltd
13,384
(54)
-
100.00
-
100.00
-
-
-
-
The First Drive Technology Co., Ltd.
14,902
-
-
100.00
-
100.00
-
-
-
-
WEG (Jiangsu) Electric Equip. Co.,
Ltd.
79,014
(25)
-
100.00
-
100.00
-
-
-
-
21,728
223
-
100.00
-
100.00
-
-
-
-
2,628
(639)
-
100.00
-
100.00
-
-
-
-
19,682
(337)
-
100.00
1.00
99.00
(120)
(2)
-
120
2,684
196
-
51.00
-
-
-
-
-
-
Arab
Emirates
(3,096)
(640)
-
100.00
-
100.00
-
-
-
-
Spain
57,444
638
-
100.00
-
100.00
-
-
-
-
224,304
1,704
-
100.00
-
100.00
-
35
-
-
34,554
(1,564)
-
100.00
-
100.00
-
-
-
-
Pulverlux S.A.
Argentina
EPRIS Argentina S.R.L.
WEG Austrália Pty Ltd.
Australia
Watt Drive Antriebstechnik GmbH
WEG International Trade GmbH
Áustria
WEG Holding GmbH
WEG Benelux S.A.
WEG Chile S.A.
WEG (Nantong) Electric Motor Co.,
Ltd.
Changzhou Yatong Jiewei Elect., Ltd.
China
Watt Euro-Drive Pte. Ltd.
Singapore
WEG Singapore Pte. Ltd.
WEG Colômbia S.A.S
Colômbia
FTC Energy Group S.A.
WEG Middle East Fze.
WEG Ibéria Industrial S.L.
WEG Electric Corporation
USA
Electric Machinery Company Inc.
PAGE: 33 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
WEG Service Co.
FTC Energy Group Inc.
Version: 1
11,926
3,131
-
100.00
-
100.00
-
-
-
-
688
(71)
-
51.00
-
-
-
-
-
-
WEG France SAS
France
11,347
(1,429)
-
100.00
-
100.00
-
-
-
-
Zest Electric Ghana Ltd.
Ghana
(1,632)
(27)
-
100.00
-
100.00
-
-
-
-
E & I Electrical Ghana Ltd.
Ghana
(150)
(85)
-
90.00
-
90.00
-
-
-
-
160,746
2,137
-
100.00
-
100.00
-
-
-
-
1,527
(182)
5.00
95.00
5.00
95.00
(9)
(5)
77
71
England
19,791
914
-
100.00
-
100.00
-
-
-
-
Italy
14,094
146
-
100.00
0.07
99.93
(8)
-
-
9
Japan
3,245
809
-
100.00
-
100.00
-
-
-
-
Malaysia
4,127
88
-
100.00
-
100.00
-
-
-
-
188,263
4,969
-
100.00
-
100.00
-
-
1
1
53,939
2,011
-
60.00
-
60.00
-
-
-
-
75,712
5,592
-
60.00
-
60.00
-
-
-
-
(10)
(1)
-
66.67
-
66.67
-
-
-
-
Peru
1,563
419
0.05
99.95
0.05
99.95
-
1
1
-
Portugal
58,915
2,099
5.74
94.26
5.74
94.26
128
36
3,383
3,043
WEG Electric CIS
Russia
3,602
(1,260)
-
100.00
-
100.00
-
-
-
-
WEG Scandinavia AB
Sweden
4,541
118
-
100.00
-
100.00
-
-
-
-
ENI Eletrical Tanzania (Pty) Limited
Tanzania
522
16
-
100.00
-
100.00
-
-
-
-
WEG Indústrias Venezuela C.A.
Venezuela
9,375
(1,692)
-
99.99
-
99.99
-
-
-
-
178
(97)
-
50.00
-
50.00
-
-
-
-
225,327
188,789
4,354,848
4,147,413
WEG Industries Índia Private Ltd.
India
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.
Mexico
Voltran S.A. de C.V.
ENI Eletrical
Limited
Moçambique
(Pty)
WEG Peru S.A.
WEG Euro Ind. Electrica S.A.
E & I Zambia Ltd.
Mozambiqu
e
Zambia
TOTAL
(*)Equity pickup adjusted by unearned income in operations between related parties.
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.
PAGE: 34 of 50
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(ii)
Version: 1
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 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 measured as the excess of the
consideration transferred in relation to net assets acquired. Inclusion in the consolidated balance sheet as of January 2015.
12. Property, plant and equipment
COMPANY
03/31/15
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
Reforestation
Other
Total PPE
Accumulated deprec,/depletion
Construction and facilities
Equipment
Furniture and fixtures
Hardware
Reforestation
Other
TOTAL NET PPE
a)
Annual depreciation
rate (%)
02 to 03
05 to 20
07 to 10
20 to 50
-
CONSOLIDATED
03/31/15
12/31/14
381,625
378,747
999,951
944,907
3,309,328
3,150,970
109,863
103,459
100,055
89,903
176,175
116,886
53,293
53,051
105,810
104,205
5,236,100
4,942,128
(2,395)
(2,366)
(2,198,492)
(2,064,186)
(2,395)
4,684
(2,366)
4,713
(268,700)
(1,765,858)
(59,256)
(69,115)
(14,799)
(20,764)
3,037,608
(249,834)
(1,664,119)
(54,869)
(62,829)
(14,076)
(18,459)
2,877,942
Summary of changes in property, plant and equipment - consolidated:
12/31/14
PP&E Classification
Land
Construction and facilities
Equipment
Furniture and fixtures
Hardware
Construction in progress
Reforestation
Other
TOTAL
378,747
695,073
1,486,851
48,590
27,074
116,886
38,975
85,746
2,877,942
Transfer Acquis. Write-offs Deprec. and
between
depletion
classes
622
7,251
4,851
8,432 57,232
296
1,858
(319)
5,911
(15,400) 63,287
242
(260) (4,255)
- 129,748
(10,630)
(5)
(1,223)
(32)
(45)
(96)
(161)
(12,192)
(6,395)
(57,797)
(1,846)
(3,031)
(723)
(951)
(70,743)
Exchange
effect
12,886
30,476
49,975
1,741
1,350
11,498
4,927
112,853
03/31/15
381,625
731,251
1,543,470
50,607
30,940
176,175
38,494
85,046
3,037,608
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Version: 1
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).
13. Intangible assets – consolidated
Software license
Right of use of property
Other
Subtotal
Goodwill - Acquisition of subsidiaries
TOTAL
Amortization/
Years
5
50 – 99
5
95,540
61,940
190,896
348,376
631,528
979,904
Accumulated
Amortization
(65,924)
(17,415)
(171,564)
(254,903)
(21,353)
(276,256)
12/31/14
Additions
Amortization
26,343
39,390
15,584
81,317
590,290
671,607
4,524
4,743
9,267
16,991
18,825
(2,058)
(167)
(1,330)
(3,555)
(3,555)
-
Cost
03/31/15
12/31/14
29,616
44,525
19,332
93,473
610,175
703,648
26,343
39,390
15,584
81,317
590,290
671,607
a) Summary of changes in intangible assets:
Software license
Right of use of property
Other
Subtotal
Goodwill - Acquisition of subsidiaries
TOTAL
Exchange
effect
807
5,302
335
6,444
2,894
16,771
03/31/15
29,616
44,525
19,332
93,473
610,175
703,648
b) Schedule of amortization of intangible assets (except goodwill):
2015
2016
2017
2018
2019
After 2020
TOTAL
03/31/15
9,664
12,757
11,460
9,326
5,564
44,702
93,473
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 parent company, WEG S.A. Finame operations are
guaranteed by collateral signature and statutory lien.
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Version: 1
All covenant clauses related to indicators of capitalization, current liquidity and the relation between net debt/Ebitda,
included in the BNDES, are being met.
CONSOLIDATED
Type
Annual charges in 03/31/15
03/31/15
12/31/14
In Brazil
SHORT TERM
1,090,901
1,555,489
In Real, pre fixed rate
Working capital
3.5% to 8.0% p.a.
792,485
382,749
Property, plant and equipment
2.5% to 9.0% p.a.
2,971
2,495
In Real, pré fixed rate
Working capital
TJLP (+) 1.4% to 5.0% p.a.
361,904
375,135
Working capital
UFIR (+) 1.0% to 4.0% p.a.
18,086
15,281
In US Dollars
Working capital (ACCS)
US$ dollar (+) 0.9% to 1.0% p.a.
322,098
266,032
Working capital
US$ dollar (+) 1.4% p.a.
2,254
3,045
Prepayment of Export
US$ dollar (+) Libor (+) 1.1% p.a.
49,790
38,419
Others
SWAP
2,437
4,259
Other
Sundry
3,464
3,486
LONG TERM
In Real, pre fixed rate
Working capital
Property, plant and equipment
In Real, pre fixed rate
Working capital
Working capital
In US Dollars
Prepayment of Export
Others
Other
In abroad
SHORT TERM
In USA Dollar
Working Capital
In Euros
Working Capital
In Pesos (Mexico)
Working Capital
In Renminbi (China)
Working Capital
Other Currency
Working Capital
LONG TERM
In US Dollar
Working Capital
In Euro
Working Capital
Other currency
Working Capital
TOTAL SHORT TERM
TOTAL LONG TERM
2,536,589
2,376,690
1,167,750
20,996
1,552,001
19,391
120,556
27,592
89,983
33,612
1,193,611
675,281
6,084
6,422
443,203
375,851
135,486
116,264
6,211
10,603
3.4% p.a.
112,627
74,262
5.2% to 6.9% p.a.
148,207
137,387
40,672
37,335
273,811
248,708
98,538
81,597
173,167
157,155
2,106
9,956
1,998,692
2,810,400
1,466,752
2,625,398
3.5% to 11.0% p.a.
2.5% to 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
Libor (+) 0.4% to 3.0% p.a.
Euribor (+) 0.9% to 3.0% p.a.
Interest of local market
Libor (+) 0.8% to 1.5% p.a.
Euribor (+) 0.9% to 3.4% p.a.
Interest of local market
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Version: 1
Maturity of long-term financing and loans:
2016
2017
2018
2019
2020
After 2021
TOTAL
03/31/15
12/31/14
695,483
695,170
439,695
808,479
127,806
43,767
2,810,400
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 their normal business activities. 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/COFINS
- IRRF
- Other
(ii) Labor
(a.1)
(a.2)
(a.3)
(a.4)
COMPANY
03/31/15
12/31/14
4,074
3,986
3,598
3,510
476
476
-
CONSOLIDATED
03/31/15
12/31/14
91,008
90,767
15,310
15,310
40,170
38,703
25,890
26,297
476
476
9,162
9,981
101,402
91,781
(iii) Cívil
-
-
76,138
73,747
(iv) Other
-
-
3,607
2,554
4,074
3,986
272,155
258,849
TOTAL
b) Statement period move - consolidated
a) Tax
b) Labor
c) Civil
d) Other
TOTAL
12/31/14 Additions Interest Write-offs Reversals
03/31/15
90,767
91,781
73,747
2,554
258,849
91,008
101,402
76,138
3,607
272,155
2,396
9,406
3,183
1,053
16,038
619
1,518
468
2,605
(2,774)
(909)
(459)
(4,142)
(394)
(801)
(1,195)
c) The provisions recorded basically refer to:
(i)
Tax contingencies
(a.1) The Company and its subsidiaries maintains 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) 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 tax authorities of Brazil's request for compensation of PIS and COFINS credit
balance with federal tax debts.
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Version: 1
(a.4) Refers to a late payment penalty levied on credit IRRF for interest on capital received, offset by debts the same
nature, whose compensation has not been confirmed by the tax authorities of Brazil’s.
(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$ 101,402 (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$ 76,138 (R$ 73,747 at December
31, 2014).
d) Restricted judicial deposits
Tax
Labor and civil
Other
TOTAL RESTRICTED JUDICIAL DEPOSITS
Non-restricted judicial deposits
TOTAL JUDICIAL DEPOSITS
COMPANY
03/31/15
12/31/14
3,450
3,430
4,326
7,776
3,430
7,776
3,430
CONSOLIDATED
03/31/15 12/31/14
28,027
27,656
18,328
12,234
1,144
889
47,499
40,779
3,630
3,615
51,129
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 recognized.
The estimated amount of such litigation relates to the tax proceedings totaling R$ 70,714 (R$ 66,326 at December 31,
2014). The mainly processes with to possible are:
- taxation on profits computed abroad in the total estimated amount of R$ 48.0 million.
- non-approval of IPI credits amounting to R$ 10.6 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, supplementation of sick-leave,
supplementation of retirement due to disability, pension due to death, lump sum benefit (due to death), proportional
deferred benefit and self-funding.
The number of participants is 22,264 participants (22,064 at March 31, 2014). The Company and its subsidiaries made
contributions in the amount of R$ 7,475 (R$ 6,690 at March 31, 2014).Based on actuarial calculations carried out by
independent actuarial, as per the procedures established by CVM Resolution No. 695/12 – technical pronouncement
CPC 33 (R1), actuarial liabilities were identified in the amount of R$ 4,092 (R$ 5,000 at March 31, 2014).
17. Equity
a) Capital
The Company's capital consists of 807.176.538 registered book-entry common shares with no par value, all with voting
rights, including 542,250 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
The Company stated on March 24, 2015, interest on own capital in the gross amount of R$ 67,378 (R$ 51,824 in March
2014), net R$ 57,271 (R$ 44,050 in March 2014) corresponding to R$ 0.071 per share, after the deduction of withholding
tax of 15% pursuant to § 2 of Article 9 of Law No. 9,249 / 95, except for corporate shareholders who are exempt from
this tax.
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Version: 1
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.
c) Treasury stock
The Company, based on the Board of Directors’ minutes of April 26, 2011 and with the purpose of supporting its Stock
Option Plan, was authorized to acquire up to 500,000 Company’s common shares, 500,000 common shares were
acquired, in the amount of R$10,055 at average cost of R$ 20.11/share.
As a result of the capital increase with bonus shares, the balance on April 23, 2014 of 448,532 treasury shares rose to
583,091, an increase of 134,559 new shares at no cost.
The acquired shares will be held in treasury for use in connection with exercise of options to purchase shares by the
beneficiaries of the Plan of Stock Options of the Company or subsequently canceled or sold.
Were exercised by the beneficiaries of the stock option plan of Company the amount of 92,309 shares. The Company
maintains 542,250 treasury shares in average cost of R$ 15,47, in the total amount of R$ 8,388.
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 holder 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 the variable compensation in each
period in Company’s shares.
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Version: 1
The Programs of Stock Options have been updated on the date of April 24, 2014, down from 30% bonus on the number
of shares voted at an exercise price the new market value and the increase of shares to the number of shares . The
update has no impact on the calculation made at the beginning of the program.
Program
Number of
Options Rights
In reais (R$)
Amount
appropriate
(thousand R$)
Strike Price
Price corrected
by IPCA
Option price
118,372
16.16
18.72
25.35
6.63
785
September /11
46,662
13.42
15.73
20.80
5.07
236
March /12
97,760
14.75
17.33
22.60
5.27
515
September /12
51,770
13.46
15.82
21.02
5.20
276
107,344
18.79
22.20
28.65
6.45
692
54,431
19.20
22.79
31.16
8.37
455
March /14
110,520
20.95
25.08
34.60
9.52
1,053
August /14
45,580
26.23
31.49
39.54
8.05
367
March /15
93,510
28.10
33.79
44.98
11.19
1.046
April /11
April /13
September /13
Total
Option
Difference
725,949
5,425
The weighted average of fair value was determined based on the Black-Scholes-Merton method, considering the
following aspects:
Current price for
Expected volatility Interest free of risk for the
corresponding
In share price (%)
lifespan of the option (%)
share (R$)
Exercise price
Of option (R$)
Lifespan of the
option – in days
April /11
16.16
755 – 1,260
17.00
26.33
12.79 – 12.83
September /11
13.42
756 – 1,259
13.89
29.88
10.90 – 11.22
March /12
14.75
755 – 1,257
15.23
29.85
9.76 – 10.33
September /12
13.46
753 – 1,257
15.46
24.50
8.32 – 8.78
April /13
18.79
760 – 1,260
19.78
28.53
8.67 – 9.24
September /13
19.20
756 – 1,258
21.35
28.25
11.29 – 11.81
March /14
20.95
753 – 1,257
24.31
20.51
12.28 – 12.58
August /14
26.23
754 – 1,257
26.90
20.04
11.26 – 11.28
March /15
28.10
751 – 1,254
30.42
19.73
13.26 – 13.43
Program
PAGE: 41 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Summary of the movement of shares plan:
Program
Number of shares
12/31/2014
Granted
Expired
Exercised
03/31/2015
April/11
58,010
-
-
-
58,010
September/11
27,691
-
-
(693)
26,998
March/12
75,054
-
-
-
75,054
September/12
44,540
-
-
(1,257)
43,283
107,344
-
-
-
107,344
54,431
-
-
-
54,431
March /14
110,520
-
-
-
110,520
August /14
45,580
-
-
-
45,580
-
93,510
-
-
93,510
523,170
93,510
-
April/13
September/13
March /15
Total
(1,950)
614,730
The recognition of expenses with stock option is carried out throughout the period of acquisition of vesting rights.
In March 31, 2015, was recorded R$ 242 (R$ 220 at March, 2014) as other results in the income statements for the year
against capital reserve in Equity.
The options exercised in March 31, 2015 were held under capital reserves in equity in the amount of R$ 10, being R$
30 for the options held and R$ 20 complement of accrued amount recorded in retained earnings.
The accumulated equity totals R$ 2,049 in Mach 31, 2015 (R$ 1,817 at December 31, 2014).
19. Net revenue
BREAKDOWN OF NET REVENUE
CONSOLIDATED
03/31/15
03/31/14
Gross revenue
Domestic market
External market
2,460,375
1,313,134
1,147,241
2,125,289
1,184,610
940,679
Deductions
Taxes
Returns and Rebates
(330,084)
(296,372)
(33,712)
(341,746)
(281,496)
(60,250)
Net revenue
2,130,291
1,783,543
Domestic market
External market
1,027,854
1,102,437
895,446
888,097
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.
CONSOLIDATED
03/31/15
03/31/14
Gross operational revenue recognized
163,617
70,703
Incurred costs
(146,138)
(52,038)
Received prepayments
03/31/15
216,281
12/31/14
167,628
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ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
21. Operating expenses by nature and funcion
EXPENSES BY NATURE
Depreciation, amortization and depletion
Personnel expenses
Raw materials and use and consumption materials
Freight and insurance costs
Other expenses
CONSOLIDATED
03/31/15
03/31/14
(1,856,229)
(1,542,705)
(74,299)
(58,805)
(480,349)
(412,308)
(968,432)
(783,065)
(62,299)
(55,284)
(270,850)
(233,243)
EXPENSES BY FUNCTION
(1,856,229)
(1,542,705)
(1,491,668)
(206,835)
(100,783)
(5,558)
(51,385)
(1,213,122)
(196,661)
(83,889)
(4,814)
(44,219)
Cost of products and services sold
Selling expenses
General and administrative expenses
Management fees
Other operating expenses
22. Other operating revenue/expenses
The recorded values are relative to profit sharing, reversal/provision of lawsuits and others, as follows:
CONSOLIDATED
03/31/15
03/31/14
3,511
3,511
1,846
1,846
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
(54,896)
(30,832)
(6,330)
(2,698)
(857)
(1,300)
(12,879)
(46,065)
(31,120)
(4,305)
(3,507)
(1,629)
(1,506)
(3,998)
TOTAL NET
(51,385)
(44,219)
OTHER OPERATING REVENUE
- Other
23. Financial income (expenses), net
COMPANY
03/31/15
FINANCIAL INCOME
Short-term investment yield
Exchange variation
Exchange variation - Trade accounts payable
Exchange variation - Clients
Exchange variation – Loans
Exchange variation – Others
Present value adjustment - clients
Pis/Cofins on interest on equity
Derivatives
PROEX – Equaliz. Interest rate
Other income
22,542
26,827
(4,351)
66
CONSOLIDATED
03/31/14
03/31/15
03/31/14
17,993
21,232
(3,343)
104
519,628
103,076
233,145
35,571
68,986
25,310
103,278
15,551
(4,398)
163,773
6,055
2,426
152,842
71,021
57,485
31,583
9,484
9,654
6,764
15,019
(3,343)
187
784
11,689
PAGE: 43 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
FINANCIAL EXPENSES
Interest on loans and financing
Exchange variation
Exchange variation - Trade accounts payable
Exchange variation – Clients
Exchange variation - Loans
Exchange variation - Others
Present value adjustment - suppliers
Derivatives
Other expenses
NET FINANCIAL INCOME
Version: 1
(38)
(38)
(39)
(39)
(477,949)
(50,649)
(410,021)
(26,138)
(23,207)
(243,215)
(117,461)
(5,973)
(7,470)
(3,836)
(124,363)
(43,588)
(64,445)
(14,467)
(9,088)
(17,149)
(23,741)
(5,385)
67
(11,012)
22,504
17,954
41,679
28,479
24. Provision for income and social contribution taxes
The Company and its 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.
Conciliation of income and social contribution taxes
COMPANY
CONSOLIDATED
03/31/15
03/31/14
03/31/15
03/31/14
Income before taxes on profit
Statutory rate
246,089
34%
205,175
34%
310,803
34%
269,317
34%
IRPJ and CSLL calculated at the statutory rate
(83,670)
(69,760)
(105,673)
76,611
6,915
(86)
64,188
5,333
(49)
(3,756)
(7,655)
24,795
3,037
22,998
1,310
(993)
(2,711)
14,131
17,698
1,457
(230)
(249)
19
(288)
(221)
(67)
(64,944)
(76,322)
11,378
(61,986)
(70,669)
8,683
0.09%
0.14%
20.90%
23.02%
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 in the income statement
Current tax
Deferred tax
Effective rate - %
(91,568)
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.
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ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
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$25 million;
- Contractual Insurance: as stipulated in the contract;
- Risk Engineering Installation and Assembly: R$ 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, which presented the following book and market values:
BOOK VALUE
03/31/15
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
3,787,607
421,591
3,366,016
3,114,832
52,206
197,354
1,624
884,703
4,672,310
Loans and financing:
- Local currency
- Foreign currency
- SWAP
Total liabilities
4,809,092
2,521,888
2,273,618
13,586
4,809,092
3,328,015
302,346
FAIR VALUE
03/31/15
12/31/14
3,025,669
2,916,630
65,299
42,590
1,150
866,209
4,194,224
3,787,607
421,591
3,366,016
3,114,832
52,206
197,354
1,624
884,703
4,672,310
3,328,015
302,346
3,025,669
2,916,630
65,299
42,590
1,150
866,209
4,194,224
4,092,150
2,470,647
1,606,895
14,608
4,092,150
4,809,092
2,521,888
2,273,618
13,586
4,809,092
4,092,150
2,470,647
1,606,895
14,608
4,092,150
The risk factors of financial instruments are relate to:
(i) Financial risks
Foreign currency risk
The Company and its 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 (balance sheet) is equivalent to 2 months of revenue in foreign currency as defined by
the Company's Board of Directors.
The Company and its subsidiaries had export operations totaling US$ 177.5 million (US$ 200.0 million in 2014),
which acts as a natural hedge for indebtedness and other costs pegged to other currencies, especially US Dollars.
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ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
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 and its subsidiaries
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 - Non Deliverable Forwards, with notional amount of:
(i) US$ 0.3 million, held by subsidiary WEG Austália Pty Ltd., seeking to protect exports from the fluctuation risks of the
exchange rates;
(ii) US$ 12.4 million, held by subsidiary Zest Electric Motors (Pty) Ltd., to protect the imports from the fluctuation
risks of the exchange rates;
b) SWAP operations, in the notional amount of:
(i) EUR 10.0 million, held by its subsidiary Watt Drive Antriebstechnik GmbH, with the purpose of protect the
financing against 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$ 200 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$ 425 million, held by the subsidiary WEG Equipamentos Elétricos S.A., SWAP with the purpose of protecting
operations against the risks of financing high dollar.
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 March 31, 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 to-market of financial instruments, valid on 31 March 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.
a)
NDF Operations - “Non Deliverable Forwards”:
Risk
USD Increase
USD Decrease
Total of Dolar
Notional value Currency
(thousands)
325
12,389
12,714
US$/AUD
US$/ZAR
Market value at
Possible scenario 25% Remote scenario 50%
12/31/14
Average
R$
Average
R$ Average
R$
price thousand
price thousand
price thousand
0.8731
11.9563
179
1,450
1,629
1.0914
9.4720
5
(8,337)
(8,332)
1.3097
6.9877
PAGE: 46 of 50
(269)
(18,125)
(18,394)
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Decrease of euro
Total of euro
Total
88
88
EUR/ZAR
Version: 1
13.1613
(5)
(5)
1,624
9.8710
(81)
(81)
(8,413)
6.5807
(158)
(158)
(18,552)
b) SWAP Operations:
Risk
Euribor decrease
Libor decrease
CDI increase
USD Decrease (*)
Total
Notional
value
(thousands)
EUR 10.0
US$ 12.9
R$ 200.0
US$ 425.0
Market value at
03/31/15
Average price
Interest of 0.30% p.a
Interest of 0.48% p.a
Interest of 13.08% p.a
3.2080
Possible scenario 25%
R$
thousand
(11,149)
(167)
(1,800)
196,884
183,768
Average price
Interest of 0.22% p.a
Interest of 0.36% p.a
Interest of 16.35% p.a
2.4060
R$
thousand
(11,348)
(188)
(4,367)
(96,891)
(112,794)
Remote scenario 50%
R$
thousand
Average price
Interest of 0.15% p.a
Interest of 0.24% p.a
Interest of 19.63% p.a
1.6040
(11,547)
(208)
(6,449)
(357,921)
(376,125)
(*) SWAP SWAP currency for the purpose of protecting US $ 425.0 million PPE financing operations (Prepayment of Exports)
presenting on March 31, 2015 liabilities amounting to R $ 242,605 of currency fluctuations.
The Company and its subsidiaries made the accounting based on their market price at March 31, 2015 at fair value and
the accrual basis. These operations had net negative impact of R$ 28,177 (R$4,385 positive in March 31, 2014) which
were recognized in financial income. The Company and its subsidiaries have no margin guarantees for derivative
financial instruments outstanding at March 31, 2015.
(ii) Operational risks
Credit risk
Risks arise from the possibility of the Company's subsidiaries not receiving the amounts related to sales or not receiving
credit from financial institutions regarding financial investments. To mitigate the risk from sales, the Company's
subsidiaries analyze the financial situation of their customers, as well as establish a credit limit and permanently assess
their debtor balance. Regarding financial investments, the Company and its subsidiaries invest in low risk credit
institutions.
27. Subsidies and assistance government
The Company and its subsidiaries obtained subventions in the amount of R$ 15,546 (R$ 10,744 at March 31, 2014)
from tax incentives, recognized in income during the period:
03/31/15
CONSOLIDADO
03/31/14
TOTAL GOVERNMENT SUBSIDIES AND ASSISTANCE
a) WEG Amazônia S.A.
- ICMS incentive credit of 90.25%
- Corporate Income Tax (IRPJ) 75% reduction
15,546
562
128
434
10,744
91
77
14
b) WEG Linhares Equipamentos Elétricos S.A.
- ICMS incentive credit of 85.00%
- Corporate Income Tax (IRPJ) 75% reduction
- Municipal investment
11,081
8,843
2,232
6
6,126
5,918
202
6
3,903
3,903
4,527
4,527
c) WEG Logística Ltda.
- ICMS incentive credit of 75.00%
There are no contingencies linked to these subsidies, and all the conditions for obtaining government subsidies
have been met.
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Version: 1
28. Information by segment
Brazil
Industry
03/31/15
03/31/14
Revenue from sale of
products / services
Earnings before
income taxes
Depreciation /
Amortization /
Depletion
Identifiable assets
Identifiable liabilities
Eliminations and
adjustments
Foreign
Energy
03/31/15
03/31/14
03/31/15
03/31/14
03/31/15
Consolidated
03/31/14
03/31/15
03/31/14
1,168,274
1,101,036
495,273
362,422
1,066,046
819,754
(599,302)
(499,669)
2,130,291
1,783,543
403,850
344,365
152,147
112,080
36,125
35,295
(276,381)
(222,423)
315,741
269,317
43,327
35,944
13,485
10,669
17,487
12,192
-
-
74,299
58,805
03/31/15
3,266,370
12/31/14
3,125,990
03/31/15
1,481,618
12/31/14
1,509,993
03/31/15
3,195,287
12/31/14
2,663,313
03/31/15
206,820
12/31/14
180,628
03/31/15
8,150,095
12/31/14
7,479,924
793,231
782,492
599,546
599,922
1,016,066
823,931
(285,316)
(308,673)
2,123,527
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, wind turbines, control panels and system integration services and solutions of renewable 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 for the year, attributed to common shareholders,
by the weighted average number of common shares available during the year.
Profit attributed to Company shareholders
Weighted average number of outstanding common shares (shares /thousand)
Basic earnings per share - R$
Basic earnings per share - R$ (with split)
03/31/15
245,859
806,634
0,30480
0,15240
03/31/14
204,887
806,561
0,25403
0,12702
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.
Profit attributed to Company shareholders
Weighted average of potentially diluted common shares held by shareholders (shares/thousand)
Basic and diluted earnings per share - R$
Basic and diluted earnings per share - R$ (with split)
03/31/15
245,859
807,249
0,30456
0,15228
03/31/14
204,887
807,110
0,25385
0,12693
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.
PAGE: 48 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
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 March 31, 2015, which comprise the balance
sheet as of March 31, 2015 and the related statements of income and comprehensive income changes in
shareholders’ equity and cash flows for the three 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.
Other issues
Statements of value added
We have also reviewed the statements of value added, Individual and Consolidated, for the three months period
ended in March 31, 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.
PAGE: 49 of 50
ITR – Quarterly Information – 03/31/2015 – WEG S/A
Version: 1
Joinville, April 14, 2015
KPMG Auditores Independentes
CRC SC-000071/F-8
Marcelo Lima Tonini
Accountant CRC PR-045569/O-4 T – SC
PAGE: 50 of 50