ITR Quarterly Information – 03/31/2013 – 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 01/01/2013 to 03/31/2013
108
Statements of changes in equity 01/01/2012 to 03/31/2012
119
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 01/01/2013 to 03/31/2013
16
Statements of changes in equity 01/01/2012 to 03/31/2012
17
Statements of Value Added
18
Comments on performance
19
Notes to financial statements
27
Opinions and Statements
Special Review Report - Unqualified
48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Company information / Composition of capital
Number of shares
(Units)
Quarterly ended
03/31/2013
Paid-in capital
Common
Preferred
Total
620,405,029
0
620,405,029
Treasury stock
Common
500,000
Preferred
0
Total
500,000
PAGE: 1 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Company information / Cash dividends
Event
Approval
Earning
Board of Directors‟
Meeting
03/26/2013
Interest on equity
First payment
08/21/2013
Type of share
Common
Class of share
Earnings per share (Reais / Share)
0.05500
PAGE: 2 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Individual financial statements / Balance sheet Assets
(In thousands of reais)
Account
Account description
code
1
Total assets
1.01
1.01.01
1.01.01.01
Cash and banks
1.01.01.02
Current quarter
03/31/2013
Prior year
12/31/2012
4,084,265
4,154,315
Current assets
864,096
889,397
Cash and cash equivalents
566,548
561,214
114
28
Short-term investments
566,434
561,186
1.01.02
Short-term investments
265,714
261,244
1.01.02.01
Short-term investments at fair value
265,714
261,244
265,714
261,244
1.01.02.01.01 Trading securities
1.01.06
Taxes recoverable
4,686
6,107
1.01.06.01
Current taxes recoverable
4,686
6,107
1.01.08
Other current assets
27,148
60,832
1.01.08.03
Other current assets
27,148
60,832
1.01.08.03.01 Dividends
1.01.08.03.02 Interest on equity
1.02
Noncurrent assets
1.02.01
Long-term receivables
1.02.01.08
Receivables from related parties
513
2,513
26,635
58,319
3,220,169
3,264,918
1,370
864
480
-
1.02.01.08.02 Receivables from subsidiaries
480
-
1.02.01.09
890
864
Other noncurrent assets
1.02.01.09.03 Judicial deposits
890
864
1.02.02
Investments
3,213,871
3,259,097
1.02.02.01
Equity interest
3,213,871
3,259,097
3,213,871
3,259,097
1.02.02.01.02 Investments in subsidiaries
1.02.03
Property, plant and equipment
4.918
4.947
1.02.03.01
Property, plant and equipment in use
4,918
4,947
1.02.04
Intangible assets
10
10
1.02.04.01
Intangible assets
10
10
10
10
1.02.04.01.02 Goodwill
PAGE: 3 of 48
ITR – Quarterly Information – 03/31/2013 – 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
2.02.03
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
Account description
Total liabilities
Current liabilities and equity
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 payables
Payables to related parties
Payables to subsidiaries
Deferred taxes
Deferred income and social contribution taxes
Provisions
Equity
Paid-in capital
Capital reserves
Premium on share issue
Options granted
Premium on capital transaction
Revaluation reserve
Income reserves
Statutory reserve
Additional proposed dividends
Treasury stock
Retained earnings/accumulated losses
Equity valuation adjustments
Deemed cost
Cumulative translation adjustments
Current quarter
03/31/2013
4,084,265
46,081
3,153
3,153
6,248
6,248
43
6,205
36,680
36,680
36,431
249
3,629
87
87
3,542
4,034,555
2,718,440
(58,330)
916
(59,246)
3,748
559,989
32,799
537,245
(10,055)
144.291
644,546
644,546
21,871
Prior year
12/31/2012
4,154,315
90,072
3,320
3,320
6,482
6,482
86
6,396
80,270
80,270
79,070
1,200
3,894
296
296
296
123
123
3,475
4,060,349
2,718,440
(53,319)
758
(54,077)
3,784
687,792
32,799
537,245
127,803
(10,055)
656,646
656,646
47,006
PAGE: 4 of 48
ITR – Quarterly Information – 03/31/2013 – 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
3.04.04
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
3.99.01.02
3.99.02.01
Account description
Operating income/expenses
General and administrative expenses
Management fees
Other expenses
Other operating income
Other operating expenses
Equity pick-up
Income before financial income (expenses) and taxes
Financial income (expenses)
Financial income
Financial expenses
Income before income taxes
Income and social contribution taxes
Current
Deferred
Net income from continuous operations
Income/ loss for the period
Earnings per share - (Reais/share)
Basic earnings per share
Common shares
Diluted earnings per share
Common shares
Quarter to date
01/01/2013 to 03/31/2013
161,158
(796)
(466)
(330)
(463)
162,417
161,158
11,450
11,517
(67)
172,608
(309)
(345)
36
172,299
172,299
Prior quarter
01/01/2012 to 03/31/2012
131,796
(853)
(471)
(382)
2
(603)
133,250
131,796
16,299
16,655
(356)
148,095
152
8
144
148,247
148,247
0.27772
0.23895
0.27761
0.23887
PAGE: 5 of 48
ITR – Quarterly Information – 03/31/2013 – 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
Quarter to date
01/01/2013 to 03/31/2013
172,299
(25,135)
(25,135)
147,164
Prior quarter
01/01/2012 to 03/31/2012
148,247
2,382
2,382
150,629
PAGE: 6 of 48
ITR – Quarterly Information – 03/31/2013 – 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
6.05
6.05.01
6.05.02
Account description
Net cash flows from operating activities
Cash from operations
Income before taxes
Depreciation and amortization
Equity pickup
Other
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
Increase/(decrease) in cash and cash equivalents
Opening cash and cash equivalents balance
Closing cash and cash equivalents balance
Quarter to date
01/01/2013 to 03/31/2013
8,183
10,378
172,608
29
(162,417)
158
(2,431)
(271)
(1,772)
(388)
236
201,852
206,322
(4,470)
(204,701)
(204,701)
5,334
561,214
566,548
Prior quarter
01/01/2012 to 03/31/2012
13,856
15,002
148,095
65
(133,250)
92
(1,464)
(4,556)
3,119
(27)
318
183,041
189,282
(6,241)
(173,949)
(173,949)
22,948
520,939
543,887
PAGE: 7 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Individual financial statements / Statement of changes in equity - 01/01/2013 to 03/31/2013
(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
Payments of dividends
Closing balances
Paid-in
capital
2,718,440
2,718,440
2,718,440
Capital reserves
Options granted and
Treasury stock
(49,535)
(49,535)
(5,011)
158
(5,169)
(36)
(36)
(54,582)
Income reserves
559,989
559,989
559,989
Retained earnings/
accumulated losses
127,803
127,803
(40,144)
(40,144)
184,399
172,299
12,100
12,100
(127,767)
36
(127,803)
144,291
Other comprehensive
Equity
income
703,652 4,060,349
703,652 4,060,349
(45,155)
158
(40,144)
(5,169)
(37,235)
147,164
172,299
(37,235)
(25,135)
(25,135)
(25,135)
(12,100)
(127,803)
(127,803)
666,417 4,034,555
PAGE: 8 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Individual financial statements / Statement of changes in equity - 01/01/2012 to 03/31/2012
(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
Payments of dividends
Closing balances
Paid-in
capital
2,265,367
2,265,367
2,265,367
Capital reserves
Options granted and
Treasury stock
4,073
4,073
(51,015)
92
(51,107)
(50)
(50)
(46,992)
Income reserves
684,007
684,007
684,007
Retained earnings/
accumulated losses
173,714
173,714
(47,443)
(47,443)
161,005
148,247
12,758
12,758
(173,664)
50
(173,714)
113,612
Other comprehensive
Equity
income
672,951 3,800,112
672,951 3,800,112
(98,458)
92
(47,443)
(51,107)
(10,376)
150,629
148,247
(10,376)
2,382
2,382
2,382
(12,758)
(173,714)
(173,714)
662,575 3,678,569
PAGE: 9 of 48
ITR – Quarterly Information – 03/31/2013 – 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
Quarter to date
01/01/2013 to 03/31/2013
(203)
12
(215)
(203)
(29)
(29)
(232)
173,934
162,417
11,517
173,702
173,702
910
861
32
17
450
450
43
43
172,299
40,144
132,155
Prior quarter
01/01/2012 to 03/31/2012
(390)
(390)
(390)
(65)
(65)
(455)
149,905
133,250
16,655
149,450
149,450
876
843
18
15
(6)
(6)
333
333
148,247
47,443
100,804
PAGE: 10 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Consolidated financial statements / Balance Sheet - Assets
(In thousand of reais)
Account
Account description
code
1
Total assets
1.01
Current assets
1.01.01
Cash and cash equivalents
1.01.01.01
Cash and banks
1.01.01.02
Short-term investments
1.01.02
Short-term investments
1.01.02.01
Short-term investments at fair value
1.01.02.01.01 Trading securities
1.01.03
Trade accounts receivable
1.01.03.01
Clients
1.01.04
Inventories
1.01.06
Taxes recoverable
1.01.06.01
Current taxes recoverable
1.01.08
Other current assets
1.01.08.03
Other
1.02
Noncurrent assets
1.02.01
Long-term receivables
1.02.01.01
Short-term investments at fair value
1.02.01.01.01 Trading securities
1.02.01.06
Deferred taxes
1.02.01.06.01 Deferred income and social contribution taxes
1.02.01.09
Other noncurrent assets
1.02.01.09.03 Judicial deposits
1.02.01.09.04 Taxes recoverable
1.02.01.09.05 Other
1.02.02
Investments
1.02.02.01
Equity interests
1.02.02.01.04 Other equity interests
1.02.02.02
Investment properties
1.02.03
Property, plant and equipment
1.02.03.01
Property, plant and equipment in use
1.02.04
Intangible assets
1.02.04.01
Intangible assets
1.02.04.01.02 Other
1.02.04.02
Goodwill
Current quarter
03/31/2013
9,496,435
6,310,741
3,013,804
127,858
2,885,946
265,714
265,714
265,714
1,347,331
1,347,331
1,316,606
158,070
158,070
209,216
209,216
3,185,694
107,528
2,059
2,059
43,337
43,337
62,132
28,229
16,527
17,376
7,577
357
357
7,220
2,544,242
2,544,242
526,347
28,108
28,108
498,239
Prior year
12/31/2012
8,873,550
5,710,017
2,302,256
211,295
2,090,961
261,244
261,244
261,244
1,472,839
1,472,839
1,306,273
183,627
183,627
183,778
183,778
3,163,533
88,833
2,032
2,032
36,891
36,891
49,910
27,844
16,032
6,034
7,622
402
402
7,220
2,537,094
2,537,094
529,984
31,215
31,215
498,769
PAGE: 11 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Consolidated financial statements / Balance Sheet - Liabilities and equity
(In thousand of reais)
Account
Account description
code
2
Total liabilities and equity
2.01
Current liabilities
2.01.01
Labor and social charges
2.01.01.01
Social obligations
2.01.02
Trade accounts payable
2.01.03
Tax obligations
2.01.03.01
Federal tax obligations
2.01.03.01.01 Income and social contribution taxes payable
2.01.03.01.02 Other
2.01.04
Loans and financing
2.01.04.01
Loans and financing
2.01.05
Other payables
2.01.05.02
Other
2.01.05.02.01 Dividends and interest on equity capital payable
2.01.05.02.04 Advance from clients
2.01.05.02.05 Profit sharing
2.01.05.02.06 Other
2.02
Noncurrent liabilities
2.02.01
Loans and financing
2.02.01.01
Loans and financing
2.02.02
Other payables
2.02.02.02
Other
2.02.02.02.03 Tax obligations
2.02.02.02.04 Other
2.02.03
Deferred taxes
2.02.03.01
Deferred income and social contribution taxes
2.02.04
Provisions
2.03
Consolidated equity
2.03.01
Paid-in capital
2.03.02
Capital reserves
2.03.02.04
Premium on share issue
2.03.02.07
Premium on capital transaction
2.03.03
Revaluation reserve
2.03.04
Income reserves
2.03.04.01
Legal reserve
2.03.04.02
Statutory reserve
2.03.04.08
Additional proposed dividends
2.03.04.09
Treasury stock
2.03.05
Retained earnings/accumulated losses
2.03.06
Equity valuation adjustments
2.03.06.01
Deemed cost
2.03.07
Cumulative translation adjustments
2.03.09
Noncontrolling interest
Current quarter
03/31/2013
9,496,435
2,852,160
172,007
172,007
365,492
103,069
103,069
51,664
51,405
1,526,274
1,526,274
685,318
685,318
36,718
306,889
38,260
303,451
2,528,789
1,878,432
1,878,432
123,063
123,063
48,835
74,228
319,621
319,621
207,673
4,115,486
2,718,440
(58,330)
916
(59,246)
3,748
559,989
32,799
537,245
(10,055)
144,291
644,546
644,546
21,871
80,931
Prior year
12/31/2012
8,873,550
3,012,824
168,831
168,831
331,037
126,655
126,655
72,927
53,728
1,645,772
1,645,772
740,529
740,529
79,381
358,124
33,559
269,465
1,709,100
1,044,068
1,044,068
137,916
137,916
47,328
90,588
320,503
320,503
206,613
4,151,626
2,718,440
(53,319)
758
(54,077)
3,784
687,792
32,799
537,245
127,803
(10,055)
656,646
656,646
47,006
91,277
PAGE: 12 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Consolidated financial statements / Income Statement
(In thousand of reais)
Account
Account description
code
3.01
Revenue from sale of products and/or services
3.02
Cost of goods sold and/or services rendered
3.03
Gross profit
3.04
Operating income/expenses
3.04.01
Selling expenses
3.04.02
General and administrative expenses
3.04.02.01 Management fees
3.04.02.02 Other
3.04.04
Other operating income
3.04.05
Other operating expenses
3.05
Income before financial income (expresses) and taxes
3.06
Financial income (expenses)
3.06.01
Financial income
3.06.02
Financial expenses
3.07
Income before income taxes
3.08
Income and social contribution taxes
3.08.01
Current
3.08.02
Deferred
3.09
Net income from continuous operations
3.11
Consolidated Income/ loss for the period
3.11.01
Atributed to shareholders of parent company
3.11.02
Atributed to non-controlling shareholders
3.99
Earnings per share - (Reais/share)
3.99.01
Basic earnings per share
3.99.01.01
Common shares
3.99.02
Diluted earnings per share
3.99.02.01
Common shares
Quarter to date
01/01/2013 to 03/31/2013
1,477,577
(1,013,942)
463,635
(266,873)
(156,625)
(73,708)
(5,187)
(68,521)
5,568
(42,108)
196,762
24,651
123,036
(98,385)
221,413
(48,342)
(51,305)
2,963
173,071
173,071
172,299
772
Prior quarter
01/01/2012 to 03/31/2012
1,369,762
(977,795)
391,967
(243,289)
(142,191)
(67,767)
(4,763)
(63,004)
4,958
(38,289)
148,678
45,885
127,801
(81,916)
194,563
(43,288)
(48,453)
5,165
151,275
151,275
148,247
3,028
0.27772
0.23895
0.27761
0.23887
PAGE: 13 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Consolidated financial statements / Statement of comprehensive income
(In thousand of reais)
Account
Account description
code
Quarter to date
01/01/2013 to 03/31/2013
Prior quarter
01/01/2012 to 03/31/2012
4.01
Consolidated net income for the period
173,071
4.02
Other comprehensive income
(24,745)
151,275
4.02.01
Adjustment of conversion period
(24,745)
4.03
Consolidated comprehensice income for the period
148,326
153,721
4.03.01
Attributed to shareholders of parent company
147,164
150,629
4.03.02
Attributed to noncontrolling shareholders
1,162
3,092
2,446
2,446
PAGE: 14 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Consolidated financial statements / Cash flow statement - Indirect method
(In thousand of reais)
Account
Account description
code
6.01
Net cash from operating activities
6.01.01
Cash from operations
6.01.01.01 Pre-tax income
6.01.01.02 Depreciation and amortization
6.01.01.04 Employee profit sharing
6.01.01.05 Other
6.01.02
Changes in assets and liabilities
6.01.02.01 Increase (decrease) in accounts receivable
6.01.02.02 Increase (decrease) in accounts payable
6.01.02.03 Increase (decrease) in inventories
6.01.02.04 Income and social contribution taxes paid
6.01.02.05 Employee profit sharing paid
6.01.03
Other
6.02
Net cash from investing activities
6.02.01
Investments
6.02.02
Property, plant and equipment
6.02.03
Intangible assets
6.02.04
Disposal of assets
6.02.05
Cumulative translation adjustments
6.02.06
Long-term financial investments
6.02.07
Premium on capital transaction
6.02.08
Acquisition of subsidiary
6.03
Net cash from financing activities
6.03.03
Loans and financing raised
6.03.04
Payment of loans and financing
6.03.05
Interest paid on loans and financing
6.03.06
Dividends/interest on equity capital paid
6.05
Increase/(decrease) in cash and cash equivalents
6.05.01
Opening cash and cash equivalents balance
6.05.02
Closing cash and cash equivalents balance
Quarter to date
01/01/2013 to 03/31/2013
297,756
302,366
221,413
52,136
28,659
158
(6,294)
91,360
46,754
(10,480)
(71,190)
(62,738)
1,684
(96,349)
(56,759)
(811)
2,290
(25,135)
(4,497)
(5,169)
(6,268)
510,141
(204,724)
862,953
(136,811)
(11,277)
711,548
2,302,256
3,013,804
Prior quarter
01/01/2012 to 03/31/2012
273,508
267,172
194,563
49,573
22,944
92
(7,579)
23,288
67,113
11,661
(51,241)
(58,400)
13,915
(242,580)
(58,335)
3,784
2,136
2,382
(7,337)
(51,107)
(52,090)
(82,013)
(398,654)
(172,052)
169,878
(352,546)
(43,934)
(367,726)
2,931,615
2,563,889
PAGE: 15 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Consolidated financial statements / Statement of changes in equity - 01/01/2013 to 03/31/2013
Statement
(In thousand of reais)
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
5.07
Account description
Opening balances
Adjusted opening balances
Capital transactions with shareholders
Recognized options granted
Interest on equity
Goodwill on capital transaction
Other
Total comprehensive income
Net income for the year
Other comprehensive income (losses)
Adjustments of translation for the year
Realization at deemed cost
Internal changes in equity
Realization of revaluation reserve
Payments of dividends
Closing balances
Paid-in
capital
2,718,440
2,718,440
2,718,440
Capital reserves Options
granted and Treasury
stock
(49,535)
(49,535)
(5,011)
158
(5,169)
(36)
(36)
(54,582)
Income
reserves
559,989
559,989
559,989
Retained earnings/
accumulated losses
127,803
127,803
(40,144)
(40,144)
184,399
172,299
12,100
12,100
(127,767)
36
(127,803)
144,291
Other
comprehensive
Equity
income
Non-controlling interest
703,652 4,060,349
91,277
703,652 4,060,349
91,277
(45,155)
(11,508)
158
(40,144)
(220)
(5,169)
(11,288)
(37,235)
147,164
1,162
172,299
772
(37,235)
(25,135)
390
(25,135)
(25,135)
390
(12,100)
(127,803)
(127,803)
666,417 4,034,555
80,931
Consolidated
equity
4,151,626
4,151,626
(56,663)
158
(40,364)
(5,169)
(11,288)
148,326
173,071
(24,745)
(24,745)
(127,803)
4,115,486
PAGE: 16 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Consolidated financial statements / Statement of changes in equity - 01/01/2012 to 03/31/2012
Statement
(In thousand of reais)
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
5.07
Account description
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 year
Other comprehensive income (losses)
Adjustments of Translation for the year
Realization of deemed cost
Internal changes in equity
Realization of revaluation reserve
Payments of dividends
Closing balances
Paid-in
capital
2,265,367
2,265,367
2,265,367
Capital reserves Options
granted and Treasury
stock
4,073
4,073
(51,015)
92
(51,107)
(50)
(50)
(46,992)
Income
reserves
684,007
684,007
684,007
Retained earnings/
accumulated losses
173,714
173,714
(47,443)
(47,443)
161,005
148,247
12,758
12,758
(173,664)
50
(173,714)
113,612
Other
comprehensive
income
672,951
672,951
(10,376)
(10,376)
2,382
(12,758)
662,575
Equity
3,800,112
3,800,112
(98,458)
92
(47,443)
(51,107)
150,629
148,247
2,382
2,382
(173,714)
(173,714)
3,678,569
Non-controlling interest
106,477
106,477
(28,748)
(28,748)
3,028
3,028
80,757
Consolidated
equity
3,906,589
3,906,589
(127,206)
92
(47,443)
(51,107)
(28,748)
153,657
151,275
2,382
2,382
(173,714)
(173,714)
3,759,326
PAGE: 17 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Consolidated financial statements / Statement of value added
(In thousand of reais)
Account
Account description
code
7.01
Revenues
7.01.01
Sales of goods, products and services
7.01.02
Other revenues
7.01.04
Set up/Reversal of allowance for. doubtful accounts
7.02
Inputs purchased from third parties
7.02.02
Materials, electricity, third party services and other
7.02.03
Loss/recovery of amounts receivable
7.03
Gross value added
7.04
Withholdings
7.04.01
Depreciation, amortization and depletion
7.05
Value added received in transfer
7.06
Net value added produced
7.06.02
Equity pickup
7.07
Total value added to be distributed
7.08
Distribution of value added
7.08.01
Personnel
7.08.01.01 Direct compensation
7.08.01.02 Benefits
7.08.01.03 Unemployment Compensation Fund (FGTS)
7.08.02
Taxes, charges and contributions
7.08.02.01 Federal
7.08.02.02 State
7.08.02.03 Municipal
7.08.03
Remuneration of third-party‟s capital
7.08.03.01 Interest
7.08.03.02 Rental
7.08.04
Equity capital remuneration
7.08.04.01 Interest on equity capital
7.08.04.03 Retained profit/loss for the period
7.08.04.04 Noncontrolling interest in retained profits
Quarter to date
01/01/2013 to 03/31/2013
1,727,896
1,726,147
2,624
(875)
(936,170)
(927,396)
(8,774)
791,726
(52,136)
(52,136)
739,590
123,036
123,036
862,626
862,626
331,710
283,811
31,177
16,722
252,192
228,479
22,539
1,174
105,653
98,059
7,594
173,071
40,144
132,155
772
Prior quarter
01/01/2012 to 03/31/2012
1,578,581
1,574,991
4,889
(1,299)
(880,031)
(869,030)
(11,001)
698,550
(49,573)
(49,573)
648,977
127,801
127,801
776,778
776,778
299,342
257,916
26,810
14,616
235,982
206,189
28,570
1,223
90,179
84,069
6,110
151,275
47,443
100,804
3,028
PAGE: 18 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Comments on performance
Highlights




Net operating revenue in the first quarter of 2013 reached R$ 1,477.6 million, with 7.9% growth over 1Q12 and decrease
of 11.1% over 4Q12;
EBITDA reached R$ 248.9 million and EBITDA margin of 16.8%. Growth was 25.5% over the previous year and
decrease of 14.1% over the previous quarter,
Net Income totaled R$ 172.3 million, with net margin of 11.7% and 16.2% growth over 1Q12 and decrease of 5.9% over
4Q12;
Investments in fixed assets totaled R$ 56.8 million in the first three months of 2013.
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
Q1 2013
Q4 2012
1,477,577
772,935
704,642
353,077
463,635
31.4%
172,299
11.7%
248,898
16.8%
0.2777
1,662,258
1,369,762
774,533
714,268
887,725
655,494
-18.1%
431,141
370,825 -4.8%
528,641 -12.3%
391,967 18.3%
31.8%
28.6%
183,157 -5.9%
148,247 16.2%
11.0%
10.8%
289,786 -14.1%
198,251 25.5%
17.4%
14.5%
0.2952 -5.9%
0.2390 16.2%
Figures in R$ Thousand
%
Q1 2012
-11.1%
-0.2%
-20.6%
%
7.9%
8.2%
7.5%
Economic Activity and Industrial Production
The beginning of 2013 was characterized by the slow pace of industrial activity, both in Brazil and abroad. Purchasing
manager indexes (PMI), commonly used as indicators of industrial activity (PMI indexes above 50 indicate industrial
expansion, while indexes below 50 indicate contraction in industrial activity), showed continuing recovery in China and U.S.,
while the situation in Germany continued unfavorable.
Manufacturing ISM Report on Business ®
Markit/BME Germany Manufacturing PMI®
HSBC China Manufacturing PMI™
USA
Germany
China
March 2013
51.3
49.0
51.6
February 2013
54.2
50.3
50.4
January 2013
53.1
49.8
52.3
December 2012
50.2
46.0
51.5
In Brazil, although expectations of the financial market, as gathered by the Brazilian Central Bank in the Focus survey,
indicate a 3.5% increase in industrial production in 2013, IBGE Industrial Production numbers showed fall 2.5% in February
over the previous month, practically eliminating the 2.6% expansion recorded in January 2013. Growth accumulated in the
first two months of the year reached 1.1%, while in the 12 months to February there is still 1.9% drop. Compared with the
results accumulated in 2012, down 2.6%, these numbers point to a slow recovery.
PAGE: 19 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Comments on performance
Industrial Indicators According to Categories of Use in Brazil
Change (%)
Categories of Use
Fev/Jan (*)
Feb 13 / Feb 12
Capital Goods
1.60
Intermediary Goods
-1.30
Consumer Goods
-4.20
Durable Goods
-6.80
Semi-durable and non-durable
-2.10
General Industry
-2.50
Source: IBGE, Research office, Industry Coordination
(*) Series with seasonal adjustments
9.10
-4.40
-5.00
-2.20
-5.80
-3.20
Acummulated
On Year
12 months
13.30
-0.30
-0.30
4.00
-1.50
1.10
-7.80
-1.50
-0.40
-0.30
-0.40
-1.90
Capital goods production showed the best results among the categories of use, with growth of 13.3% accumulated in the
year, but still down 7.8% over the past 12 months. Remember that both the performance of the general industrial production,
as the production of capital goods were influenced by large variations in production of light vehicles (negatively) and heavy
vehicles / trucks (positively). Even after discounting for this impact, the performance in capital goods remained positive,
showing investments in capacity expansion in some sectors.
Net Operating Revenue
Net Operating Revenues totaled R$ 1,477.6 million in the first quarter of 2013 (1Q13), corresponding to an increase of 7.9%
in relation to the first quarter of 2012 (1Q12) and decrease of 11.1% in relation to the fourth quarter of 2012 (4Q12). The
growth rate considering the comparison on the same basis, adjusted for the consolidation of revenues from acquisitions,
was 7.0% over 1Q12.
Net Operating Revenue per Market (R$ million)
External Market
Domestic Market
1,613
1,529
1,662
1,478
1,370
52%
50%
48%
50%
Q2
Q3
53%
48%
48%
52%
Q1
2012
47%
Q4
52%
Q1
2013
In the 1Q13, net operating revenue breaks down as follows:
 Domestic Market: R$ 772.9 million, representing 52% of Net Operating Revenue, with 8.2% growth over 1Q12 and
decrease of 0.2% over 4Q12. Adjusting for the consolidation of revenues from acquires companies Stardur, Paumar and
Injetel the growth over 1Q12 would have been 6.5%;
PAGE: 20 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Comments on performance
 External Market: R$ 704.6 million, equivalent to 48% of Net Operating Revenue. The comparison in Brazilian Reais
shows growth of 7.5% over the same period last year and decrease of 20.6% over the previous quarter. Considering the
average US dollar, comparison shows decreases of 4.8% compared to 1Q12 and of 18.1% over 4Q12.
Evolution of Net Revenues according to Geographic Market (R$ Million)
Q1 2013
Net Operating Revenues
- Domestic Market
- External Markets
- External Markets in US$
1,477.6
772.9
704.6
353.1
Q4 2012
1,662.3
774.5
887.7
431.1
Change
Q1 2012
-11.1%
-0.2%
-20.6%
-18.1%
1,369.8
714.3
655.5
370.8
Change
7.9%
8.2%
7.5%
-4.8%
External Market – Distribution of Net Revenues according to Geographic Market
Q1 2013
North America
South and Central America
Europe
Africa
Australasia
37.5%
14.8%
25.9%
11.7%
10.2%
Q4 2012
30.7%
19.4%
23.4%
16.1%
10.5%
Change
Q1 2012
6.8 pp
-4.6 pp
2.5 pp
-4.4 pp
-0.3 pp
35.8%
14.6%
27.8%
12.7%
9.1%
Change
1.7 pp
0.2 pp
-1.9 pp
-1 pp
1.1 pp
Distribution of Net Revenues per Business Area
Electro-electronic Industrial Equipments
Domestic Market
External Market
Energy Generation , Transmission and Distribution
Domestic Market
External Market
Electric Motors for Domestic Use
Domestic Market
External Market
Paints and Varnishes
Domestic Market
External Market
Q1 2013
Q4 2012
%
Q1 2012
%
63.8%
27.7%
36.1%
19.8%
11.7%
8.1%
10.1%
7.3%
2.8%
6.3%
5.7%
0.7%
56.6%
23.0%
33.6%
28.0%
11.5%
16.5%
9.3%
6.8%
2.5%
6.1%
5.4%
0.8%
7.1 pp
4.7 pp
2.4 pp
-8.2 pp
0.2 pp
-8.3 pp
0.8 pp
0.5 pp
0.3 pp
0.2 pp
0.3 pp
-0.1 pp
63.5%
28.8%
34.7%
22.8%
12.1%
10.7%
8.1%
6.2%
1.9%
5.6%
5.1%
0.5%
0.3 pp
-1 pp
1.3 pp
-3 pp
-0.4 pp
-2.6 pp
2 pp
1.1 pp
0.9 pp
0.7 pp
0.5 pp
0.2 pp
Business Areas
The revenue performance showed a natural slowdown in this 1Q13 compared with the pace seen in the second part of the
previous year. This is an expected behavior, in line with normal seasonality of markets. On the other hand, we continue to
see favorable trends in the mix of products sold and average prices in long cycle products, important variables for the overall
profitability of our business. We are confident that the inflection points in these variables have been overcome and that the
prospects for improvement are consistent.
In the Industrial Electro-Electronic Equipment our position in the Brazilian industrial market is very strong and we have
expanded our operations in increasingly broader systems and solutions, leveraging opportunities in new segments and
introducing new products and services. The performance in the domestic market shows that economic agents are beginning
to respond to production incentives deployed within the “Plano Brazil Maior”, but the speed of this response continues to be
below expectations. Additionally, we have seen some delays in converting investments intentions into new orders in areas
such as oil and gas and mining, for example.
PAGE: 21 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Comments on performance
In the external markets we observe a slowdown of growth rates after the strong growth seen in recent quarters, both in
mature and emerging markets. This recent strong performance was followed by a gradual brought a gradual change on the
competitive conditions in many markets, which was to be expected. We are confident that our product portfolio, which is up
to date technologically and adapted to the specificities of each market, will continue to be an important competitive
advantage. We also highlight the negative impact on revenues caused by the devaluation of local currencies in some of our
key markets, such as South Africa and Argentina, for example.
In the Energy Generation, Transmission and Distribution (GTD) market conditions for T&D indicate gradual elimination of
excess production capacity, which is improving product pricing conditions relative to recent quarters, with consequent
positive effect on profitability. The market for generation equipment continues at a slow pace.
The Motors for Domestic Use area showed slight improvement in the “white goods” market. The recent increase on import
duties over some components are beginning to stimulate local production and to prevent imported products to benefit from
consumption stimulus, such as, for exempla, lower excise taxes.
The Paints and Varnishes area recorded organic growth and consolidated of the acquisitions made in 2012. We continued
to execute our growth strategy based on expanding the product portfolio and entering new segments, exploring synergies
with other WEG products.
Cost of Goods Sold
Cost of Goods Sold (COGS) totaled R$ 1,013.9 million in 1Q13, increasing 3.7% over 1Q12 and decrease of 10.6% over
4Q12. Gross margin reached 31.4%, with expansion of 2.8 percentage points over 1Q12 and decrease of 0.4 percentage
point over 4Q12.
Gross Margin
This increase in gross margin compared to 1Q12, is due to: (i) relative stability of raw material costs; (ii) the positive effect of
devaluation on revenues (iii) greater dilution of processing costs with revenue growth; (iv) gains from product and process
engineering, with impacts on the use of materials and labor; (v) reduction on payroll social security taxes; and (vi) more
favorable pricing dynamics in some long-cycle products and relative improvement in the mix of products sold.
Cost of Raw Materials
Average copper spot prices at the London Metal Exchange fell by 5% in the 1Q13 compared to the average of 1Q12 and
remained stable in relation to the average of 4Q12. Steel prices in the international markets, according to the CRUspiGlobal
index, fell by 7.8% over 1Q12 but rose 4.5% in relation to the 4Q12. It is important to note that the price declines observed in
US dollars were partially offset by the depreciation of the Real, result in costs stable when measured in Brazilian currency.
These are the two main raw materials in our production process and their management requires great attention. Copper
prices are, after transportation costs are considered, quite uniform across the various markets. Steel prices may show
regional variations, but under normal conditions follow similar trends in many global markets. Our price and risk exposure
management of these costs considers these characteristics. Adjustments in selling prices occur naturally, according to the
characteristics of each order and to the current market conditions, incorporating raw materials costs variations gradually.
Selling, General and Administrative Expenses
Consolidated selling, general and administrative expenses (SG&A) represented 15.6% of net operating revenue in the
1Q13, 0.3 percentage point higher than the 15.3% of the 1Q12 and 0.7 percentage point higher than the 14.9% of the 4Q12.
In absolute terms, operating expenses grew by 9.7% over 1Q12 and decrease of 7.9% over the previous quarter.
PAGE: 22 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Comments on performance
Q1 2013
Net Operating Revenues
Consolidated Net Income for the Period
Net Margin
(+) Income taxes & Contributions
(+/-) Financial income (expenses)
(+) Depreciation & Amortization
EBITDA
EBITDA Margin
Q4 2012
%
Q1 2012
%
1,477.6
1,662.3
-11.1%
1,369.8
7.9%
173.1
11.7%
48.3
(24.7)
52.1
248.9
16.8%
184.8
11.1%
53.7
(2.7)
54.0
289.8
17.4%
-6.4%
151.3
11.0%
43.3
(45.9)
49.6
198.3
14.5%
14.4%
-9.9%
826.4%
-3.4%
-14.1%
11.7%
-46.3%
5.2%
25.5%
Figures in R$ thousands
EBITDA and EBITDA Margin
As a result of aforementioned impacts, EBITDA in 1Q13, calculated according to the new methodology defined by CVM in
the Instruction nº 527/2012, totaled R$ 248.9 million in 1Q13, an increase of 25.5% over 1Q12 and decrease of 14.1% over
4Q12. EBITDA margin reached 16.8%, 2.3 percentage points higher than the 1Q12 and 0.6 percentage point lower than the
4Q12.
As for comparative purposes, EBITDA calculated according to the methodology previously used reached R$ 256.8 million,
an increase of 23.1% over 1Q12 and decrease of 14.6% over the previous quarter, EBITDA margin of 17.4%.
Net Financial Results
In this quarter, net financial income was positive in R$ 24.6 million (R$ 45.9 million in 1Q12 and R$ 2.7 million in 4Q12).
Financial revenues totaled R$ 123.0 million in 1Q13 (R$ 127.8 million in 1Q12 and R$ 96.8 million in 4Q12). Financial
expenses totaled R$ 98.4 million (R$ 81.9 million in 1Q12 and R$ 94.1 million in 4Q12). The decrease in net financial
income is mainly due to the reduction of real interest rates on financial instruments in the Brazilian market.
Income Tax and Social Contribution
The Income Tax and Social Contribution Tax on Net Profit provision in 1Q13 reached R$ 51.3 million (R$ 48.5 million in
1Q12 and R$ 62.3 million in 4Q12). Additionally, R$ 3.0 million were recorded as „„Deffered income tax / social contribution‟‟
credit (credit of R$ 5.2 million in 1Q12 and credit of R$ 8.6 million in 4Q12).
Net Income
As the result of the previously discussed impacts, net income for 1Q13 was R$ 172.3 million, an increase of 16.2% over
1Q12 and decrease of 5.9% over the previous quarter. The net margin of the quarter was 11.7%, 0.9 percentage point
higher compared to the 1Q12 and 0.7 percentage point higher compared to the 4Q12.
Cash flow
The Cash total showing in the Cash Flow Statement, of R$ 3,013.8 million, does not includes R$ 265.7 million in
investments maturing in May next, but without immediate liquidity. Considering the accounts „„Cash‟‟, „„Cash and Equivalent‟‟
and „„Short-term investments‟‟, the total cash position reaches R$ 3,275.5 million.
PAGE: 23 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Comments on performance
510.1
3,013.8
96.3
297.8
2,302.3
Investing
Operating
Financing
Cash Mar 2013
Cash Dec 2012
Operating cash flow
Cash flow from operating activities totaled R$297.8 million in 1Q13, an increase of 9% over 1Q12. This expansion in
operating cash generation was mainly due to the increase in cash generated from operations, with increase in net income
before depreciation. There was reduction in working capital needs, with emphasis on the reduction of receivables and
increased suppliers. On the other hand, there were increases in the Income Tax and profit sharing provisions.
Investments
Investments in fixed assets for capacity expansion and modernization totaled R$ 56.8 million in the first three months of
2013, 89% o which destined to the industrial plants and other installations in Brazil and the remaining amount to production
units and other subsidiaries abroad.
In the 1Q13 training and labor development expenses reached R$ 1.4 million, 16% above 1Q12.
As announced in 4Q12 results conference call, we expect to invest approximately R$ 265 million in capacity expansion and
modernization of plants in 2013. Additionally, we estimate approximately R$ 87 million in the expansion of working capital.
Investments in Fixed Assets (R$ million)
Outside Brazil
Brazil
58.7
73.7
55.5
50.4
5.0
3.7
5.1
53.7
51.9
45.4
Q1
Q2
Q3
2012
56.8
9.3
6.0
64.5
50.8
Q4
Q1
2013
Cash flow from investing activities
Investing activities consumed R$ 96.4 million in 1Q13, a decrease of 3% over 1Q12. There were no new acquisitions
announced and paid for in this quarter, which ended up being the main factor in reducing the use of cash for investments.
PAGE: 24 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Comments on performance
Debt and Cash Position
Debt and Cash Position (R$ thousands)
Cash & Financial instruments
- Current
- Long Term
Debt
- Current
- In Brazilian Reais
- In other currencies
- Long Term
- In Brazilian Reais
- In other currencies
Net Cash (Debt)
March 2013
3,281,577
3,279,518
2,059
3,404,706
1,526,274
1,077,205
449,069
1,878,432
1,646,899
231,533
(123,129)
December 2012
2,565,532
2,563,500
2,032
2,689,840
1,645,772
1,067,683
578,089
1,044,068
824,910
219,158
(124,308)
March 2012
2,851,862
2,563,889
287,973
3,233,726
1,464,198
509,861
954,336
1,769,528
1,543,720
225,810
(381,864)
As of March 31, 2013 cash, cash equivalents and financial investments totaled R$ 3,281.6 million, mainly in short-term.
Gross financial debt totaled R$ 3,404.7 million, 45% in short-term operations and 55% in long-term operations.
We took the opportunity, in 1Q13, to obtain funding at very attractive terms, both in maturity and interest rates. With this we
increased the duration and extended the profile of our total debt. The impact on net debt position at the end was small. At
the end of the first quarter of 2013 WEG had net debt of R$ 123.1 million (net debt of R$ 124.3 million in December 31,
2012). The cash resources are invested in Brazilian currency in first-tier banks, in fixed income instruments linked to the
CDI.
The characteristics of the debt are:



The duration of the long-term portion is 31.0 months.
The duration of the Brazilian Reais denominated portion is 20.1 months and of the foreign currencies denominated
portion is 12.6 months.
The weighted average cost of fixed-rate debt denominated in Reais is approximately 6.3% per year. Floating rate
contracts are indexed mainly by to the Brazilian long-term interest rate (TLJP).
Dividends
On March 26 the Board of Directors approved the payment to shareholders, as interest on stockholders‟ equity (JCP),
totaling R$ 40.1 million. Shareholders on March 26, 2013 will be entitled to payment of R$ 0.06470589 per share (before
deduction of income tax at source), payable on August 21, 2013.
We maintain our policy to declare interest on stockholders equity quarterly and declare dividends based on profit earned
each semester. Thus, we reported six different earnings each year.
Cash flow from financing activities
Financing activities generated R$ 510.1 million in 1Q13, mainly due to the new funding with very attractive maturity and
interest rates terms, as previously discussed. During this period we increased financing by R$ 726.1 million (new debt of R$
862.9 million and amortizations of R$ 136.8 million).
PAGE: 25 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Comments on performance
WEGE3 Share Performance
The common shares issued by WEG, traded under the code WEGE3 at BM&F Bovespa, ended the last trading session of
March 2013 quoted at R$ 26.04, with nominal decline of 3.6% in the year. Considering the dividends and interest on
stockholders equity declared in this first quarter, the decline was of 2.5% in 2013.
The average daily traded volume in 1Q13 was R$ 14.3 million, (R$ 6.2 million in 1Q12). Throughout the quarter 114,952
stock trades were carried out (42,664 stock trades in 1Q12), involving 32.5 million shares (19.6 million shares in 1Q12) and
totaling R$ 844.6 million (R$ 383.7 million in 1Q12).
Share Price Performance and Traded Volume
30,00
10.000
Shares Traded (thousands)
WEGE3
28,00
26,00
8.000
WEGE3 share prices
22,00
6.000
20,00
18,00
4.000
16,00
14,00
2.000
Traded shares (thousands)
24,00
12,00
10,00
10
nJa
0
0
r-1
Ap
0
l-1
Ju
0
t- 1
Oc
11
nJa
1
r-1
Ap
1
l-1
Ju
1
t- 1
Oc
12
nJa
2
r-1
Ap
2
l-1
Ju
2
t- 1
Oc
13
bFe
Dividend adjusted performance (dividend and interest on stockholders equity).
PAGE: 26 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
WEG S.A.
Notes to financial statements
At March 31, 2013
(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
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 12,
2013.
The accounting policies and methods of calculation adopted in the preparation of quarterly information, as well as major
uncertainties in the estimates and judgments used in applying the accounting policies are the same practiced in preparing the
financial statements for the year ended 12.31.2012
3. Estimates and assumptions
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 and assumptions include:
a) credit risk analysis for the determination of the allowance for doubtful accounts (Note 6);
b) review of the economic useful life of fixed assets and their recovery in operations (Note 12);
c) fair value measurement of financial instruments (Note 25);
d) commitments with employees‟ benefit plans (Note 16);
e) transactions with stock option plan (Note 18);
f) deferred income tax assets on income and social contribution tax losses (Note 10), and
g) analysis of other risks for determination of other provisions, including contingencies arising from administrative and judicial
proceedings and other assets and liabilities at the date of financial statements (Note 15);
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.
PAGE: 27 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
4. Cash and cash equivalents
COMPANY
03/31/13
12/31/12
a) Cash and banks
b) Short-term investments
In local currency
Bank Deposit Certificate (CDB) and Investment funds
In foreign currency
Certificates of Deposits Abroad
Other balances held abroad
SWAP
NDF - “Non Deliverable Forwards”
TOTAL
114
566,434
566,434
566,434
566,548
28
561,186
561,186
561,186
561,214
CONSOLIDATED
03/31/13
12/31/12
127,858
2,885,946
2,791,918
2,791,918
84,282
61,469
22,813
5,693
4,053
3,013,804
211,295
2,090,961
1,932,330
1,932,330
149,656
128,596
21,060
8,956
19
2,302,256
Investments in Brazil:
Are remunerated at the rates of 98% to 107% of the CDI (98% to 107% of CDI at December 31, 2012).
Investments abroad:
Certificates of deposits issued by foreign financial institutions are bear interest as follows:
- In Euros with interest of 0.25% to 1.50% p.a. at the original amount of EUR 10,689, of which balance amounts to R$ 27,633
(R$ 91,635 at December 31, 2012);
- In US dollars with interest of 0.02% to 1.5% p.a. at the original amount of US$ 16,828, of which the balance amounts to R$
33,836 (R$ 36,961 at December 31, 2012);
- In the original currency with interest from 3.0% to 15.0% p.a. at the amount of R$ 22,813 (R$ 21,060 at December 31, 2012).
Financial investments readily convertible to a known amount of cash were considered as cash equivalents in the statements of
cash flows.
5. Short-term investments
Treasury Bills
Other
Total
Short-term
Long-term
COMPANY
03/31/13
12/31/12
265,714
261,244
265,714
261,244
265,714
261,244
-
CONSOLIDATED
03/31/13
12/31/12
265,714
261,244
2,059
2,032
267,773
263,276
265,714
261,244
2,059
2,032
6. Trade accounts receivable
CONSOLIDATED
03/31/13
12/31/12
a) Breakdown of balances
Domestic Market
External Market
SUBTOTAL
Present value adjustment
Allowance for losses on trade receivables
TOTAL
766,913
600,299
1,367,212
(1,483)
(18,398)
1,347,331
PAGE: 28 of 48
753,737
738,189
1,491,926
(897)
(18,190)
1,472,839
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
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
349
3,010
1,195,732
69,127
102,353
1,367,212
1,266,632
97,068
128,226
1,491,926
The breakdown of provision with losses on trade accounts receivable is as follows:
Balance at 01/01/2012
Losses written-off
Setting up of provisions
Reversal of provisions
Balance at 12/31/2012
Losses written-off
Setting up of provisions
Reversal of Provisions
Balance at 03/31/2013
(13,146)
3,010
(8,810)
756
(18,190)
349
(1,046)
489
(18,398)
7. Inventories
CONSOLIDATED
03/31/13
12/31/12
Finished products
Products in process
Raw materials and others
Imports in transit
Provision for obsolescence
Total inventories - domestic market
276,971
252,646
227,113
40,235
(9,159)
787,806
229,276
222,197
229,249
51,167
(9,780)
722,109
Finished products
Products in process
Raw materials and others
Provision for obsolescence
Total inventories - external market
353,177
71,446
122,181
(18,004)
528,800
408,681
72,734
119,982
(17,233)
584,164
1,316,606
1,306,273
OVERALL TOTAL
The breakdown of provision for obsolescence is as follows:
Balance at 01/01/2012
Inventories write-off
Setting up of provisions
Balance at 12/31/2012
Inventories write-off
Setting up of provisions
Balance at 03/31/2013
(26,055)
9,067
(10,025)
(27,013)
1,474
(1,624)
(27,163)
Inventories are insured and their coverage is determined considering the values and level of risk involved, the cost of sales
includes R$ 1,474 (R$ 3,481 at March 31, 2012) regarding inventories written off and the amount of R$ 1,624 (R$ 2,595 at March
31, 2012), related to accrual of provision for inventory losses.
PAGE: 29 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
8. Taxes recoverable
State VAT (ICMS) on capital expenditures
Value Added Tax (IVA) from foreign subisidiaries
PIS/COFINS on capital expenditures
ICMS
IPI
IRPJ/CSLL recoverable
PIS/COFINS
Other
TOTAL
Short-term
Long-term
COMPANY
03/31/13
12/31/12
4,686
6,107
4,686
6,107
4,686
6,107
-
CONSOLIDATED
03/31/13
12/31/12
24,355
23,462
60,536
69,400
3,620
3,696
25,168
24,554
10,373
12,643
15,168
16,050
15,427
33,416
19,950
16,438
174,597
199,659
158,070
183,627
16,527
16,032
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
The financial statements include the financial information of the Company and its subsidiaries as in Note 11.
Business transactions of purchase and sale of products, raw materials and contracting of services as well as financial
transactions of loans, raising of funds among Group companies and management fees are as follows:
BALANCE SHEET
Noncurrent assets
Management of financial resources
WEG Equipamentos Elétricos S.A.
Current liabilities
COMPANY
03/31/13 12/31/12
480
-
-
-
480
-
-
-
-
-
4,835
2,092
4,835
2,092
Agreements with directors/officers
Noncurrent liabilities
Management of financial resources
WEG Equipamentos Elétricos S.A.
INCOME STATEMENT
Management compensation:
a) Fixed (fees)
Board of Directors
Executive Board
b) Variable (profit sharing )
Board of Directors
Executive Board
CONSOLIDATED
03/31/13 12/31/12
-
296
-
-
-
296
-
-
03/31/13
COMPANY
12/31/12
466
471
5,187
4,763
254
212
302
169
508
4,679
423
4,340
248
212
1,730
1,246
135
113
136
76
270
1,460
191
1,055
CONSOLIDATED
03/31/13 12/31/12
PAGE: 30 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
Additional information:
a) Business transactions
The transactions of purchase and sale of inputs and products are made under the same conditions with unrelated third parties,
prevailing spot sales;
b) Management of financial resources
The financial and commercial operations between Group companies are recorded in book accounts, in compliance with the
requirements of the Group‟s bylaws, not subject to interest.
The credit/debit contracts entered into with Administrators are recorded in book accounts, subject to interest between 95% and
100% of the CDI variation;
c) Services provision and other covenants
WEG Equipamentos Elétricos S.A. entered into an agreement for “Guarantees and Other Covenants” with Hidráulica Industrial
S.A. Ind. e Com - HISA, for WEG to be guarantor in loan operations and provide guarantee to customers (Performance Bond,
guarantee insurance, etc.);
d) Securities and guarantees
WEG S.A. granted guarantees and sureties to foreign subsidiaries, in the amount of US$ 221,9 million (US$ 237.9 million at
December 31, 2012);
e) Management compensation
Board of Directors members were paid the amount of R$ 508 (R$ 423 at 03/31/2012) and the executive officers were paid the
amount of R$ 4,679 (R$ 4,340 at March 31, 2012), for their services, aggregating the total of R$ 5,187 (R$ 4,763 at 03/31/2012).
As long as the result of activity on capital invested is at least 10%, interest to be paid to management is expected to range from
0% to 2.5% of net income. The provision is recognized in P&L for the period, in the amount of R$ 1,730 (R$ 1,246 at March 31,
2012), under other operating expenses. Board members and officers receive additional corporate benefits, as follows: Health
and dental insurance, life insurance, supplementary pension benefits, among others.
PAGE: 31 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
10. Deferred taxes
Deferred income tax and social contribution tax credits and debts were determined in accordance with each country‟s ruling
standards.
a) Breakdown:
COMPANY
03/31/13
12/31/12
Income tax losses
CSLL tax losses
Temporary differences:
Provision for contingencies
Taxes questioned in court
Losses on trade receivables
Losses on obsolete inventories
Labor severance pay and for contract termination
Freight and sales commissions
Accounts payable (electric energy, technical assist. and others)
Employee profit sharing
Adjustment of transition tax regime
Accelerated depreciation incentive - Law No, 11196/05
Other additions and exclusions
Deemed cost of PP&E
TOTAL
Noncurrent assets
Noncurrent liabilities
CONSOLIDATED
03/31/13
12/31/12
3
21
22,043
4,439
21,393
3,277
902
(52)
636
(1,576)
(87)
(87)
879
(51)
614
(1,586)
(123)
(123)
31,687
25,398
3,135
7,181
11,122
9,112
14,976
11,607
(105,396)
(4,767)
6,299
(313,120)
(276,284)
43,337
(319,621)
32,302
24,383
2,694
5,244
13,316
7,936
15,241
11,254
(97,766)
(4,359)
768
(319,295)
(283,612)
36,891
(320,503)
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.
PAGE: 32 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
11. Investments
11.1. Investments in subsidiaries
Ajusted
Shareholders’
equity
WEG Equipamentos Elétricos S.A.
RF Reflorestadora Ltda
WEG Tintas Ltda.
WEG Amazônia S.A.
WEG Administradora de Bens Ltda.
WEG Logística Ltda.
WEG Linhares Equips Elétricos S.A.
WEG Drives & Controls Automação Ltda
WEG Partner Aerogeradores S.A.
WEG-Cestari Redut. Motorredut. S.A.
WEG Automação Critical Power Ltda
Hidráulica Indl.S.A. Ind. e Com.
Agro Trafo Administradora de Bens S.A.
Sensores Eletrônicos Instrutech Ltda.
Injetel Ind. Com. Comp. Plásticos Ltda
Ind. de Tintas e Vernizes Paumar S.A.
WEG Equipamientos Electricos S.A.
WEG Chile S.A.
WEG Colômbia Ltda.
WEG Electric Corp.
WEG Service CO.
WEG Overseas S.A.
WEG México S.A. de C.V.
WEG Transformadores México S.A. de C.V.
Voltran S.A de C.V.
WEG Indústrias Venezuela C.A.
Zest Electric Motors (Pty) Ltd.
WEG Nantong CO Ltd.
WEG Middle East Fze.
WEG Industries (Índia) Private Ltd.
WEG Electric (Índia) Private Limited
WEG Electric Motors Japan CO. Ltd.
WEG Singapore Pte. Ltd.
WEG Germany GmbH.
WEG Benelux S.A.
WEG Ibéria S.L.
WEG France S.A.S
WEG Electric Motors (UK) Ltd.
WEG Itália S.R.L.
WEG Euro Ind. Electrica S.A.
WEG Electric CIS
WEG Scandinavia AB.
WEG Austrália Pty Ltd.
WEG Peru S.A.
Pulverlux S.A.
EPRIS Argentina S.R.L.
Electric Machinery Holding Company
Watt Drive Antriebstechnik GmbH
TOTAL
2,600,712
237,681
88,175
37,597
24,840
57,061
104,764
270,358
10
37,042
17,685
51,395
4,744
2,978
953
64,842
55,447
25,332
11,433
107,573
31
7
113,994
35,432
49,361
4,340
152,619
57,450
(593)
106,299
691
1,383
3,660
39,285
29,119
742,495
2,409
10,899
9,898
44,642
2,873
2,318
30,319
950
150
190
58,428
10,068
P&L
134,500
1,912
6,579
183
119
2,294
6,646
18,810
942
113
(1,393)
(109)
423
139
(2,108)
4,219
1,195
274
3,610
159
(2)
4,629
(1,039)
2,237
52
9,855
3,127
1,040
(1,184)
31
158
15
735
1,288
26,509
(297)
(262)
630
2,590
967
(366)
535
69
(95)
38
(2,901)
2,493
Participation (%)
Direct
100,00
100,00
99,91
0,02
5,09
99,99
0,05
91,75
0,05
10,44
8,00
1,00
0,79
100,00
4,99
0,07
5,74
0,05
-
03/31/13
Indirect Direct
- 100,00
- 100,00
0,09
99,91
99,98
0,02
94,91
5,09
100,00
99,99
0,01
99,99
99,90
50,01
99,95
0,05
61,92
8,25
91,75
99,95
0,05
100,00
100,00
89,55
10,44
92,00
8,00
99,00
1,00
99,91
0,79
100,00
- 100,00
99,99
60,00
60,00
99,99
96,62
100,00
100,00
99,99
94,99
4,99
100,00
100,00
100,00
99,99
100,00
100,00
100,00
99,93
0,07
94,26
5,74
100,00
100,00
100,00
99,95
0,05
100,00
100,00
100,00
100,00
-
Equity
Investment Value
12/31/12
03/31/13 03/31/12
03/31/13
12/31/12
Indirect
- 134,500(*) 109,174 2,600,712
2,667,895
1,912
3,152
237,680
237,332
0,09
6,572
4,360
88,093
82,840
99,98
6
6
94,91
6
1,265
1,238
100,00
99,99
1
1
0,01
18,810 15,946
270,358
254,217
99,90
50,01
99,95
9
9
61,92
8,25
(100)
27
4,353
4,453
99,95
2
2
100,00
100,00
89,55
440
293
5,789
5,666
92,00
96
35
2,027
1,929
99,00
3
5
114
120
99,91
28
40
848
808
100,00
(2)
(5)
7
9
99,99
1
1
60,00
60,00
99,99
92,57
100,00
100,00
99,99
94,99
2
(2)
35
34
100,00
100,00
100,00
99,99
100,00
100,00
100,00
99,93
1
7
7
94,26
149
225
2,563
2,529
100,00
100,00
100,00
99,95
1
1
100,00
100,00
100,00
100,00
162,417 133,250 3,213,871
3,259,097
(*)Equity pickup adjusted by unearned income
PAGE: 33 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
11.2. Acquisitions
Zest Electric Motors (Pty) Ltd.
In January 2013, the subsidiary WEG Equipamentos Elétricos S.A., acquired 4.05% of Zest Electric Motors (Pty) Ltd. The goodwill,
in the amount of R$ 5,169, was initially measured as transferred payment exceeding amount in relation to acquired net assets and
recognized in equity as capital transaction. The consideration transferred was realized through resources available in cash and
cash equivalents in the amount of R$11,437.
11.3. Other investments
These refer to other investments recorded at cost of acquisition in the amount of R$ 7,577 (R$ 7,622 at December 31, 2012).
12. Property, plant and equipment
The Company capitalized borrowing costs in the amount of R$ 184 (R$ 1,306 at December 31, 2012) regarding ongoing
constructions. The costs are capitalized until the moment of transfer of construction in progress to property, plant and equipment in
use.
COMPANY
03/31/13
12/31/12
7,079
7,079
7,079
7,079
Land, construction and facilities
Equipment
Furniture and fixtures
Hardware
Construction in progress
Reforestation
Other
Subtotal
Accumulated deprec./depletion
Construction and facilities
Equipment
Furniture and fixtures
Hardware
Reforestation
Other
TOTAL
Annual depreciation
rate (%)
02 to 03
05 to 20
07 to 10
20 to 50
(2,161)
4,918
(2,132)
4,947
CONSOLIDATED
03/31/13
12/31/12
1,143,447
1,141,222
2,680,423
2,652,581
85,111
82,998
84,142
83,145
93,667
76,079
50,178
50,005
41,273
41,221
4,178,241
4,127,251
(196,680)
(1,308,467)
(42,275)
(61,526)
(9,097)
(15,954)
2,544,242
(191,688)
(1,271,564)
(41,592)
(60,502)
(8,464)
(16,347)
2,537,094
a) Summary of changes in property, plant and equipment:
12/31/12
PP&E Classification
Land, construction and facilities
Equipment
Furniture and fixtures
Hardware
Construction in progress
Reforestation
Other
TOTAL
949,534
1,381,017
41,405
22,643
76,079
41,540
24,876
2,537,094
Transfer Acquis Write-offs
1
Deprec.and
between
depletion
classes
256
3,565
23
(45)
(3,984)
185
-
1,199
27,402
3,108
1,162
21,871
174
1,843
56,759
(7)
(1,582)
(99)
(94)
(508)
(2,290)
(5,086)
(40,418)
(1,369)
(1,914)
(633)
(818)
(50,238)
Exchange
effect
871
1,972
(232)
864
(299)
(259)
2,917
03/31/13
946,767
1,371,956
42,836
22,616
93,667
41,081
25,319
2,544,242
b) Amounts offered in guarantee - PPE items were provided as collateral for loans, financing, labor claims and tax suits in the
amount of R$ 15,790 (R$ 15,790 at December 31, 2012).
PAGE: 34 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
13. Intangible assets – consolidated
Software license
Other
Subtotal
Goodwill - Acquisition of subsidiaries
TOTAL
Amortization/
Years
5
5
-
Cost
67,646
40,569
108,215
519,625
627,840
Accumulated
Depreciation
(52,054)
(28,053)
(80,107)
(21,386)
(101,493)
03/31/13
12/31/12
15,592
12,516
28,108
498,239
526,347
17,371
13,844
31,215
498,769
529,984
a) Summary of changes in intangible assets:
Information Technology Project
Software license
Other
Subtotal
Goodwill - Acquisition of subsidiaries
TOTAL
12/31/12
Additions
Amort
17.371
13.844
31.215
498.769
529.984
783
28
811
811
(1.296)
(602)
(1.898)
(1.898)
Exchange
effect
(1.266)
(754)
(2.020)
(530)
(2.550)
03/31/13
15.592
12.516
28.108
498.239
526.347
b) Schedule of amortization of intangible assets (except goodwill):
2013
2014
2015
2016
After 2017
TOTAL
03/31/13
4,651
6,010
3,754
2,955
10,738
28,108
12/31/12
7,461
6,789
4,584
3,917
8,464
31,215
(c) Goodwill on acquisition of subsidiaries is not amortized for accounting purposes. Therefore the income tax liability was
recognized by the Company (Note 10).
14. Loans and financing
Financing raised in foreign currency comprises Advances on Exchange Contracts (ACC‟s), BNDES-FINEM in currency basket,
BNDES-FINEM in dollar and IFC in dollar (+) LIBOR.
Financing taken by foreign subsidiaries for working capital purposes is denominated in US dollars and/or in the currency of each
country, amounting to R$ 394 million in the short-term (R$ 490,7 million at December 31, 2012) and R$ 74,6 million in the longterm (R$ 40,8 million at December 31, 2012), corresponding to US$ 232,7 million (US$ 260,1 million at December 31, 2012).
Direct loans from BNDES are guaranteed by the parent company, WEG S.A. Finame operations are guaranteed by collateral
signature and statutory lien.
PAGE: 35 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
All covenant clauses related to indicators of capitalization, current liquidity and the relation between net debt/Ebitda, included in the
BNDES and IFC contracts, are being met.
Type
In Brazil
SHORT TERM
Working capital (ACCs)
Working Capital
Working Capital
Working Capital
Working Capital
Working Capital
Prepayment of Export
Non Deliverable Forwards (NDF)
Property, plant and equipment
SWAP
Other
LONG TERM
Working Capital
Property, plant and equipment
Working Capital
Property, plant and equipment
Working Capital
Working Capital
Prepayment of Export
SWAP
Other
Annual charges
Interest of 2.6% to 3.0% p.a. (+) exchange variation
TJLP (+) 1.4% to 3.0% p.a.
Interest of 4.5% to 9.0 %p.a.
US$ dollar (+) 1.4% to 1.8% p.a.
US$ dollar (+) Libor (+) 3.3% p.a.
UFIR (+) 1.0% to 4.0% p.a.
Exchange rate variation
Exchange rate variation
TJLP (+) 1.0% to 5.0% p.a.
Sundry
TJLP (+) 1.4% to 2.0% p.a.
UFIR (+) 1.0% to 4.0% p.a.
Interest of 4.0% to 9.0 %p.a.
TJLP (+) 1.0% to 5.0% p.a.
US$ dollar (+) 1.4% to 1.8% p.a.
US$ (+) Libor (+) 3.3% p.a.
Exchange rate variation
Sundry
ABROAD
SHORT TERM
Working Capital
Working Capital
Working Capital
Working Capital
Working Capital
Non Deliverable Forwards (NDF)
EURIBOR (+) 0.8% to 1.4% p.a.
LIBOR (+) 0.6% to 1.5% p.a.
90% of PBOC (4.5% to 5.0%) p.a.
BBSY (+) 2.0% p.a.
Interest of 0.8% to 11.5% p.a.
Exchange rate variation
LONG TERM
Working Capital
Working Capital
Working Capital
SWAP
Libor (+) 2.4% p.a.
Interest of 1.5% to 15% p.a.
Euribor (+) 1.0% p.a.
-
TOTAL SHORT TERM
TOTAL LONG TERM
CONSOLIDATED
03/31/13
12/31/12
1,132,249
1,155,042
323
37,406
489,118
490,076
553,155
545,257
19,881
20,166
7,183
6,876
26,015
23,074
27,692
14,558
7,901
6,122
6,244
288
254
2,472
3,230
1,803,777
359,271
42,708
1,230,602
8,281
1,003,260
391,430
44,427
373,596
8,866
46,730
36,920
73,050
178
6,037
52,423
37,464
88,137
326
6,591
394,025
156,224
117,360
3,376
4,856
112,209
-
490,730
202,796
173,116
8,899
5,328
100,093
498
74,655
53,074
14,228
7,353
40,808
15,943
13,471
3,307
8,087
1,526,274
1,878,432
1,645,772
1,044,068
PAGE: 36 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
Maturity of long-term financing and loans:
03/31/13
338.862
385.342
1.008.981
99.826
45.421
1.878.432
2014
2015
2016
2017
2018
TOTAL
12/31/12
405.730
386.643
144.776
59.253
47.666
1.044.068
15. Provision for contingencies
The Company and its subsidiaries are parties to administrative and judicial proceedings of labor, civil and tax nature arising from
the normal activities of their businesses. The respective provisions were set up for proceedings the likelihood of loss of which was
rated as “probable” based on the estimate of value at risk determined by the Company‟s legal counselors.
The Company's management estimates that the provision for contingencies set up is sufficient to cover any losses from the
proceedings in progress.
a) Balance of provision for contingencies
(i) Tax:
- IRPJ e CSLL
- INSS
- Presumed IPI credit
- Other
(a.1)
(a.2)
(a.3)
COMPANY
03/31/13
12/31/12
2,652
2,586
2,652
2,586
-
CONSOLIDATED
03/31/13
12/31/12
92,512
89,122
14,668
14,668
37,465
36,977
24,700
24,700
15,679
12,777
(ii) Labor
-
-
44,764
46,118
(iii) Cívil
-
-
67,627
68,980
890
889
2,770
2,393
3,542
3,475
207,673
206,613
890
890
-
864
864
-
25,518
19,784
5,734
25,133
19,670
5,463
(iv) Other
TOTAL
(v) Restricted judicial deposits
- Tax
- Other
b) Changes in the provision for contingencies for the period - consolidated
a) Tax
b) Labor
c) Civil
d) Other
TOTAL
12/31/12
Additions
Interest
Write-offs
Reversals
03/31/13
89,122
46,118
68,980
2,393
206,613
2,758
649
1,539
450
5,396
632
157
304
1,093
(1,369)
(2,696)
(4,065)
(791)
(500)
(73)
(1,364)
92,512
44,764
67,627
2,770
207,673
c) The provisions set up basically refer to:
(i)
Tax contingencies
(a.1) The Company maintains a provision 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%.
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ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
(a.2) This refers to social security contribution taxes payable. The litigation refers to social security charges levied on the private
pension plan, profit sharing, education funding tax, among others.
(a.3)
Refers to judicial proceedings, in order to ensure the right to claim IPI credits (from the acquisition of raw materials,
materials, intermediate products and packaging exempt, taxed at zero rate or not subject to taxation) offset against IRPJ, CSLL,
PIS, COFINS, IPI.
(ii) Labor contingencies
The Company and its subsidiaries are defendants in labor claims primarily involving health and risk exposure, among others.
Based on which a provision of R$ R$ 44,764 (R$ 46,118 at December 31, 2012) was set up.
(iii) Civil contingencies
These correspond primarily to civil lawsuits, including personal injury, aesthetic damage, occupational diseases and indemnities
arising out of occupational accidents. A provision of R$ 67,627 was set up (R$ 68,980 at December 31, 2012).
(iv) Restricted judicial deposits
IRPJ/CSLL “Summer Plan”
Other
TOTAL RESTRICTED JUDICIAL DEPOSITS
Non-restricted judicial deposits
TOTAL JUDICIAL DEPOSITS
COMPANY
03/31/13
12/31/12
890
864
890
864
890
864
CONSOLIDATED
03/31/13 12/31/12
13,195
13,195
12,323
11,938
25,518
25,133
2,711
2,711
28,229
27,844
d) Contingencies classified as possible losses
The Company and its subsidiaries are parties to other suits, the likelihood of loss of which are rated as "possible", for which no
provision for contingencies was set up.
The estimated amount of such litigation relates to the tax proceedings totaling R$ 144,225 (R$ 143,997 at December 31, 2012).
Those considered relevant and with "legal opinions" include the following proceedings:
- taxation according to taxable profit in the total estimated amount of R$ 68.0 million.
- taxation on profits computed abroad in the total estimated amount of R$ 35 million.
- taxation on products of Information Technology Acts in the amount of R$36 million.
16. Benefit plan
The Company and its subsidiaries are sponsors of WEG Social Security - Pension Plan, which seeks to supplement the retirement
benefits offered by the official social security system.
The Plan managed by WEG Seguridade Social includes monthly income benefits, supplementation of sick-leave, supplementation
of retirement due to disability, pension due to death, lump sum benefit (due to death), proportional deferred benefit and selffunding.
There comprise 20,871 participants (20,371 at March 31, 2012). The Company and its subsidiaries made contributions in the
amount of R$ 5,815 (R$ 5,196 at March 31, 2012).
Based on actuarial calculations carried out by independent actuarial, as per the procedures established by CVM Resolution No.
371/2000, actuarial liabilities were identified in the amount of R$5,000.
17. Equity
a) Capital
The Company's capital stock is made up by 620,405,029 common registered and uncertified shares, without par value, all of which
with voting rights, not including the 500,000 shares held in treasury as per item "c”.
PAGE: 38 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
b) Shareholder compensation - interest on equity capital
On March 26, 2013 the Company declared interest on equity capital in the gross amount of R$40,144 (R$34,122 net) equivalent to
0.055 per share, which will be paid net of withholding income tax at 15%, pursuant to paragraph two, article nine of Law 9.249/95,
except for shareholders that are legal entities and are exempt from the taxation.
Under clause 37 of the Company's bylaws and article nine of Law 9.949/95 interest on equity capital will be paid as from August 21,
2013 on mandatory dividends for a capital stock of 620,405,029 shares.
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$20.11/share. The shares acquired shall be held in Treasury to be used in the exercise of the
purchase right of stock options by the Company‟s stock option plans beneficiaries or the subsequent cancellation or disposal.
18. Stock option plan
(i) Plan description
The Plan is managed by the Board of Directors, seeking to grant stock option plans for WEG S.A.‟s (Company) shares to its
statutory officers or of its subsidiaries with head offices in Brazil, so as to attract, motivate and retain them, as well as aligning their
interests to that of the Company and its shareholders.
Each option grants its bearer with the right to acquire
1 (one) common Company-issued
“WEGE3”), strictly according to the terms and conditions established in the Plan ("Option”).
share (BM&FBOVESPA:
Share purchase options to be granted are limited to 2% (two percent) of the total Company‟s capital.
The participant must maintain the invested shares blocked during the retention period, according to the minimum levels determined
by the Plan.
The Plan may be extinguished, suspended or altered at any moment, through a proposal approved by the Company's Board of
Directors.
(ii) Programs
The Board of Directors may approve, each semester, a Share Purchase Option Program ("Program"), which will define the
participants, number of Options, exercise price, Option distribution, term and other rules specific to each Program.
In order to participate in each Program, the participant must invest an amount of his/her variable compensation in each period in
Company‟s shares.
Program
Abril/11
Number of shares
Granted
Acquired Rights
Number
Vesting
of Options
Period
Rights
274,678
46,653
91,056
1º
2º
3º
274,678
18,072
35,894
1º
2º
3º
Subtotal
Setembro/11
Subtotal
Março/12
Subtotal
535,000
41,000
75,200
1º
2º
3º
30,352
30,352
30,352
91,056
11,965
11,965
11,964
35,894
25,067
25,067
25,066
75,200
In reais (R$)
Price
Strike
corrected
Price
by IPCA
21,01
23,16
21,01
24,32
21,01
25,54
Amount
Option
Option appropriate
price Difference
(thousand R$)
30,60
32,98
35,29
7,43
8,66
9,76
17,45
17,45
17,45
19,39
20,43
21,54
25,08
27,05
29,00
5,70
6,62
7,46
19,17
19,17
19,17
21,34
22,51
23,75
27,22
29,40
31,51
5,89
6,89
7,76
PAGE: 39 of 48
226
263
296
785
68
79
89
236
148
173
194
515
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
Setembro/12
110,000
21,162
1º
2º
3º
40,824
Subtotal
Total
13,608
13,608
13,608
40,824
242,974
17,50
17,50
17,50
19,48
20,56
21,69
25,51
27,33
29,16
6,02
6,78
7,47
82
92
102
276
1,812
The weighted average of fair value was determined based on the Black-Scholes-Merton method, considering the following aspects:
Program
Vesting Períod
1º
April/11
2º
Factors:
Exercise price of option (R$)
21,01
21,01
Lifespan of the option - in days
755
1.008
Current price for corresponding share(R$)
22,10
22,10
Expected volatility in share price (%)
26,33
26,33
Interest free of risk for the lifespan of the option (%)
12,79
12,81
3º
September/11
1º
2º
3º
1º
March/12
2º
September/12
1º
2º
3º
3º
21,01
1.260
17,45
756
17,45
1.008
17,45
1.259
19,17
755
19,17
1.008
19,17
1.257
17,50
753
17,50
1.006
17,50
1.257
22,10
18,06
18,06
18,06
19,80
19,80
19,80
20,10
20,10
20,10
26,33
29,88
29,88
29,88
29,85
29,85
29,85
24,50
24,50
24,50
12,83
10,90
11,05
11,22
9,76
10,12
10,33
8,32
8,57
8,78
Recording of expenses with shares is carried out throughout the period of acquisition of "vesting rights”.
In March 31, 2013, R$ 158 (R$ 92 at March 31, 2012) was recorded as other results in the financial statements for the year against
capital reserve in Equity. The accumulated equity totals R$ 916 (R$ 758 at December 31, 2012).
19. Net revenue
BREAKDOWN OF NET REVENUE
Gross revenue
Domestic market
External market
Deductions
Taxes
Returns and Rebates
Net revenue
CONSOLIDATED
03/31/13
03/31/12
1,775,556
1,023,412
752,144
(297,979)
(248,570)
(49,409)
1,477,577
1,607,331
929,573
677,758
(237,569)
(205,228)
(32,341)
1,369,762
20. Operating expenses by nature
The Company opted for presenting consolidated income statement by function. As required by IFRS, the Company sets out below
a detailed consolidated income statement by nature:
CONSOLIDATED
03/31/13
03/31/12
EXPENSE BY NATURE
Depreciation and amortization
Personnel expenses
Raw materials and use and consumption materials
Freight and insurance costs
Other expenses
(1,280,815)
(52,136)
(345,933)
(647,113)
(43,867)
(191,766)
(1,221,084)
(49,573)
(332,821)
(629,110)
(43,438)
(166,142)
EXPENSE BY FUNCTION
Cost of products and services sold
Selling expenses
General and administrative expenses
Management fees
Other operating expenses
(1,280,815)
(1,013,942)
(156,625)
(68,521)
(5,187)
(36,540)
(1,221,084)
(977,795)
(142,191)
(63,004)
(4,763)
(33,331)
PAGE: 40 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
21. Other operating revenue/expenses
The recorded values are relative to profit sharing, reversal/(provision) for lawsuits and others, as follows:
CONSOLIDATED
03/31/13
03/31/12
5,568
4,958
5,568
4,958
(42,108)
(38,289)
(26,026)
(21,408)
(2,633)
(1,536)
(1,730)
(1,246)
(1,528)
(4,420)
(857)
(900)
(9,334)
(8,779)
(36,540)
(33,331)
OTHER OPERATING REVENUE
- Other
OTHER OPERATING EXPENSES
- Profit sharing - Employees
- Profit sharing - foreign subsidiaries
- Profit sharing - executive board
- Constitution/Reversal of provision for tax proceedings
- Tax incentives of Rouanet Law
- Other
TOTAL NET
22. Financial income (expenses), net
FINANCIAL INCOME
Short-term investment yield
Exchange variation
Present value adjustment - customers
Pis/Cofins on interest on equity
Other
FINANCIAL EXPENSES
Interest on loans and financing
Exchange variation
Present value adjustment - suppliers
Other expenses
NET FINANCIAL INCOME
03/31/13
COMPANY
03/31/12
CONSOLIDATED
03/31/13
03/31/12
11,517
14,334
(2,898)
81
16,655
19,587
(2,982)
50
123,036
46,410
65,247
7,796
(2,898)
6,481
127,801
75,040
36,031
11,491
(2,982)
8,221
(67)
(67)
(356)
(356)
(98,385)
(40,546)
(47,881)
(3,175)
(6,783)
(81,916)
(43,934)
(27,149)
(4,444)
(6,389)
11,450
16,299
24,651
45,885
23. Provision for income and social contribution taxes
The parent company and subsidiaries in Brazil assess income and social contribution taxes according to taxable income, except for
WEG Administradora de Bens Ltda., Instrutech Ltda, e Agro Trafo Administradora de Bens S.A., which adopt profit computed as a
percentage of the Company's gross revenue. The provision for income tax was constituted at a 15% rate added of a 10%
additional, and social contribution with a 9% rate. Taxes for companies abroad are constituted according to the Law of each
country.
Reconciliation of income and social contribution taxes
Income before taxes on profit
Statutory rate
03/31/13
172,608
34%
COMPANY
03/31/12
148,095
34%
CONSOLIDATED
03/31/13
03/31/12
221,413
194,563
34%
34%
IRPJ and CSLL calculated at the statutory rate
(58,687)
(50,352)
(75,280)
(66,151)
Adjustment to determine effective income and social contribution taxes
Result from investments in subsidiaries
55,222
Rate difference on foreign results
Tax incentives
-
45,305
-
(1,113)
3,540
11,168
(2,299)
4,519
4,981
PAGE: 41 of 48
ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
Interest on equity
Other adjustments
2,995
161
5,171
28
13,724
(381)
16,131
(469)
IRPJ and CSLL as per the income statement
Current tax
Deferred tax
(309)
(345)
36
152
8
144
(48,342)
(51,305)
2,963
(43,288)
(48,453)
5,165
0,18%
-0,10%
21,83%
22,25%
Effective rate - %
24. Insurance coverage
The corporate unit in Brazil is responsible for the management of the insurance portfolio of the WEG Group in Brazil and abroad;
and continuously constitutes, jointly with the executive board, the risk policies for the WEG Group so as to protect its assets.
Risk analysis assumptions adopted, given their nature, are not included in the audit scope and, as a result, were not audited by
our independent auditors.
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), Surety Insurance, General Civil Liability, Properties and Environment Pollution.
The insurance policies are issued only by first tier multinational insurance companies which are able to cater to the WEG
Group in the countries where it operates. 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): R$60 million;
- Loss of profits: US$13 million;
- Civil liability US$25 million;
- Civil liability products: US$ 100 million
- Transport: US$ 4 million per shipment (Import and export) and R$ 6 million (Domestic).
- Environmental pollution: US$25 million.
25. Financial instruments
The Company and its subsidiaries carried out an evaluation of its financial instruments, including derivatives, recorded in the financial
statements as at March 31, 2013, which presented the following book and market values:
Cash and cash equivalents
Cash and banks
Short-term investments:
- Local currency
- Foreign Currency
- SWAP
- Non Deliverable Forwards - NDF
Short-term investments
Customers
Suppliers
Loans and financing:
- Local currency
- Foreign Currency
- Non Deliverable Forwards (NDF)
- SWAP
BOOK VALUE
03/31/13
12/31/12
MARKET VALUE
03/31/13
12/31/12
127,858
211,295
127,858
211,295
2,791,918
84,282
5,693
4,053
267,773
1,347,331
365,492
1,932,330
149,656
8,956
19
263,276
1,472,839
331,037
2,791,918
84,282
5,693
4,053
267,773
1,347,331
365,492
1,932,330
149,656
8,956
19
263,276
1,472,839
331,037
2,724,104
672,783
7,819
1,892,593
780,181
8,399
8,667
2,724,104
672,783
7,819
1,892,593
780,181
8,399
8,667
The risk factors of financial instruments are relate to:
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ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
(i) Financial risks
Foreign currency risk
The Company has import and export operations in various currencies, it manages and monitors its exposure to foreign currency,
seeking to balance its financial assets and liabilities within the limits established by Management .
The financial exposure limit (balance sheet) is equivalent to 3 months of revenue in foreign currency as defined by the Company's
Board of Directors.
The Company had export operations totaling US$ 204,8 million (US$ 201,5 million at March 31, 2012), which acts as a natural
hedge for indebtedness and other costs pegged to other currencies, especially US Dollars.
Risks related to debt charges
These risks arise from the possibility that the subsidiaries may suffer losses due to fluctuations in interest rates or other debt
indexes, which increase financial expenses related to loans and financings obtained in the market, or decrease financial
revenues relative to financial investments from subsidiaries. The Company continuously monitors the interest rates in the market
so as to evaluate the need, if any, of protection against the risk of volatility of said rates.
Derivative financial instruments
The Company has the following operations with financial instruments:
a) NDF derivative financial instruments - Non Deliverable Forwards, with notional amount of:
(i) US$ 44.3 million, (US$ 66.6 million at December 31, 2012) held by subsidiary WEG Equipamentos Elétricos S.A., seeking to
protect exports from the fluctuation risks of the exchange rates;
(ii) EUR 24.8 million, (US$ 42.3 million at December 31, 2012) held by subsidiary WEG Equipamentos Elétricos S.A. to
protect exports from the fluctuation risks of the exchange rates;
(iii) US$ 13.3 million, (US$ 13.7 million at December 31,2012) held its subsidiary abroad Zest ElectricMotors (Pty) Ltd., to
protect imports from the fluctuation risks of the exchange rates.
b) SWAP operations, in the notional amount of:
(i) EUR 10 million, held by its subsidiary Watt Drive Antriebstechnik GmbH, with the purpose of hedging financing from
fluctuation risks of Euribor;
(ii) EUR 30,0 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.
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, 2013, 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 defined that the Company must use the exchange rates used to mark financial instruments to market valid as at
March 31, 2013 for the likely scenario (market value). Said rates represent the best estimate of future behavior of said prices
and represent the value for which the positions may have been settled on their maturity date.
Unrealized profit and losses in operations with derivatives are recorded (in case of loss) in the loans and financing line or (in case
of profit) as financial investments and matched against exchange gains (losses) in P&L.
The table below presents "cash and expense" effects of the results of financial instruments in real scenarios.
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ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Notes to financial statements
a)
NDF Operations - “Non Deliverable Forwards”:
Risk
USD Increase
USD Increase
USD Increase
USD Increase
USD Increase
USD Increase
USD Increase
USD Increase
Total US$
EUR Increase
EUR Increase
EUR Increase
EUR Increase
EUR Increase
EUR Increase
EUR Increase
Total EUR
USD Increase
USD Increase
Total US$
Total
Market value at
Possible scenario 25% Remote scenario 50%
03/31/13
Average
R$ thousand
Average
Average
R$
R$
price
price thousand
price thousand
Notional vallue
(milion)
Currency
3,0
13,5
10,0
3,8
2,0
2,5
1,8
7,8
44,3
2,0
2,0
5,8
5,5
4,5
0,5
4,5
24,8
8,0
2,8
10,8
US$/R$
US$/R$
US$/R$
US$/R$
US$/R$
US$/R$
US$/R$
US$/R$
2,0175
2,0551
2,0180
2,0668
2,0832
2,0538
2,0826
2,0743
EUR/R$
EUR/R$
EUR/R$
EUR/R$
EUR/R$
EUR/R$
EUR/R$
2,6038
2,6415
2,6170
2,6362
2,6052
2,7068
2,5924
US$/ZAR
US$/ZAR
8,9969
9,4153
(83)
(38)
475
191
(18)
248
(16)
484
1.243
99
112
501
187
382
108
419
1.808
589
413
1.002
4.053
2,5219
2,5688
2,5226
2,5835
2,6039
2,5672
2,6033
2,5929
3,2547
3,3018
3,2713
3,2952
3,2564
3,3835
3,2406
6.7477
7,0615
(1.596)
(6.974)
(4.569)
(1.746)
(1.060)
(1.036)
(927)
(3.133)
(21.041)
(1.203)
(1.209)
(3.261)
(3.437)
(2.549)
(231)
(2.497)
(14.387)
(3.517)
(1.028)
(4.545)
(39.973)
3,0263
3,0826
3,0271
3,1002
3,1247
3,0807
3,1240
3,1115
3,9056
3,9622
3,9255
3,9542
3,9077
4,0602
3,8887
4,4985
4,7077
(3.109)
(13.910)
(9.615)
(3.684)
(2.101)
(2.319)
(1.838)
(6.759)
(43.335)
(2.505)
(2.529)
(7.023)
(7.062)
(5.480)
(569)
(5.414)
(30.582)
(7.623)
(2.469)
(10.092)
(84.009)
b) SWAP Operations:
Risk
Euribor decrease
Libor decrease
Libor decrease
CDI increase
CDI increase
CDI increase
Total
Notional vallue (milion)
EUR 10,0
USD 15,0
USD 15,0
R$ 70,0
R$ 50,0
R$ 80,0
Market value at
03/31/13
Average price
R$ thousand
(7.353)
Interest of 1,67% p.a.
(305)
Interest of 0,68% p.a.
(161)
Interest of 0,72% p.a.
2.280
Interest of 8,85% p.a.
2.030
Interest of 8,78% p.a.
1.383
Interest of 8,82% p.a.
(2.126)
Possible scenario 25%
Average price
Interest of 1,25% p.a.
Interest of 0,51% p.a.
Interest of 0,54% p.a.
Interest of 11,06% p.a.
Interest of 10,98% p.a.
Interest of 11,03% p.a.
Remote scenario 50%
R$ thousand
Average price
(8.447)
Interest of 0,83% p.a.
(382)
Interest of 0,34% p.a.
(258)
Interest of 0,36 % p.a.
(1.204)
Interest of 13,27% p.a.
(348)
Interest of 13,17% p.a.
(2.824)
Interest of 13,23% p.a.
(13.463)
R$ thousand
(9.541)
(460)
(354)
(4.464)
(2.579)
(6.779)
(24.177)
We carried out the accounting record based on the market price as at March 31, 2013 according to the accrual method. These
operations had a net positive impact as at March 31, 2013 of R$ 7,973 (R$ 3,109 negative at March 31, 2012), which were
recognized as financial revenues. The Company did not have outstanding derivative financial instruments at March 31, 2013.
(ii) Operational risks
Credit risk
Risks arise from the possibility of the Company's subsidiaries not receiving the amounts related to sales or not receiving credit
from financial institutions regarding financial investments. To mitigate the risk from sales, the Company's subsidiaries analyze the
financial situation of their customers, as well as establish a credit limit and permanently assess their debtor balance. Regarding
financial investments, the Company and its subsidiaries invest in low risk credit institutions.
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Notes to financial statements
26. Subsidies and assistance government
The Company obtained subventions in the amount of R$ 9,484 (R$ 1,641 at March 31, 2013) from tax incentives, recognized in
the year:
a) WEG Amazônia S.A.
- ICMS incentive credit of 90.25%
70
70
b) WEG Linhares Equipamentos Elétricos S.A.
- ICMS incentive credit of 85.00%
- Corporate Income Tax (IRPJ) 75% reduction
- Municipal investment
4,141
3,776
359
6
c) WEG Logística Ltda
- ICMS incentive credit of 75.00%
5,273
5,273
All conditions to obtain government incentives were met.
27. Information by segment
Foreign
Brazil
Industry
Revenue from sale of products / services
Earnings before income taxes
Depreciation / Amortization / Depletion
Identifiable assets
Identifiable liabilities
3/31/2013
946,972
291,116
32,515
3/31/2013
3,316,920
763,989
Consolidated
Eliminations and adjustments
Energy
3/31/2012
837,877
22,093
30,587
3/31/2012
3,318,387
758,499
3/31/2013
304,572
101,392
9,978
3/31/2013
1,299,890
401,665
3/31/2012
299,473
57,714
9,957
3/31/2012
1,370,784
394,642
3/31/2013
656,582
45,334
9,643
3/31/2013
1,893,326
545,843
3/31/2012
577,497
33,088
9,029
3/31/2012
1,938,375
601,254
3/31/2013
(430,549)
(216,429)
3/31/2013
(374,537)
(299,266)
3/31/2012
(345,085)
(118,332)
3/31/2012
(391,884)
(328,808)
3/31/2013
1,477,577
221,413
52,136
3/31/2013
6,135,599
1,412,231
3/31/2012
1,369,762
194,563
49,573
3/31/2012
6,235,662
1,425,587
Industry: single phase and triple phase motors with low and medium tension, drives and controls, equipment and
services for industrial automation, paints and varnishes.
Energy: electricity generators for thermal and hydraulic power plants (biomass), hydraulic turbines (PCHs), transformers,
substations, control panels and system integration services.
Foreign: composed by operations carried out by subsidiaries in other countries.
The adjustment and elimination column applicable to the Company in the context of the Consolidated IFRS Financial Statements.
All operating assets and liabilities are presented as identifiable assets and liabilities.
28. Earnings per share
a) Basic
Calculation of basic earnings (loss) per share is made by dividing net income (loss) 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$
03/31/13
172,299
620,405
0,27772
03/31/12
148,247
620,405
0,23895
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$
03/31/13
172,299
620,648
0,27761
03/31/12
148,247
620,613
0,23887
The amount of 242,974 shares (207,720 at March 31, 2012) was considered to be shares with potential to dilute, related to the
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Notes to financial statements
stock option plan.
29. Statement of comprehensive income
The Company 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 and includes the
comprehensive results which correspond to revenue and expense items which are not recognized in the financial statements as
required or allowed by the standards, interpretations and guidance issued by the CPC.
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ITR – Quarterly Information – 03/31/2013 – WEG S/A
Version: 1
Opinions and statements – Special Review Report Unqualified
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, Company and Consolidated, of Weg S.A. (“Company”) contained within the
Quarterly Information for the quarter ended March 31, 2013, which comprise the balance sheet as of March 31, 2013 and the
related statements of income, comprehensive income changes in shareholders‟ equity and cash flows for the three month period
then ended, including the notes to the financial statements.
Management is responsible for the preparation of these 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), and 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
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) and IAS 34 applicable to the Quarterly Information and presented in accordance with the standards issued by the
Brazilian Securities and Exchange Commission.
Conclusion about the consolidated interim financial statements
Based on our review, we are not aware of any fact that leads us to believe that the consolidated interim financial statements
included in the quarterly information referred to above have not been prepared, in all material respects, in accordance with CPC
21(R1) and IAS 34 applicable to the Quarterly Information and presented in accordance with the standards issued by the
Brazilian Securities and Exchange Commission.
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ITR – Quarterly Information – 03/31/2013 – WEG S/A
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Opinions and statements – Special Review Report Unqualified
Other issues
Statements of value added
We have also reviewed the statements of value added, Company and Consolidated, for the quarter ended March 31, 2013,
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.
Comparative interim financial information
The individual and consolidated financial information contained in the financial statements relating to the balance sheet of
December 31, 2012 and the statements of income comprehensive income, cash flows, changes in equity and value added for
the quarter ended March 31, 2012, presented for comparative purposes, were audited and reviewed, respectively, by other
auditors who issued audit report dated February 8, 2013 and the review report dated April 17, 2012, unqualified.
Joinville, April 12, 2013
KPMG Auditores Independentes
CRC SC-000071/F-8
Marcelo Lima Tonini
Accountant CRC PR-045569/O-4 T – SC
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